Dhaka, Bangladesh (BBN) – Experts and policymakers on Saturday suggested that the central bank should strengthen its supervisory capacity by using modern tools for the safeguard of over Tk 4.1 trillion bank deposits in Bangladesh.

The observation came at a ‘Town Hall’ meeting, an American English term given to an informal meeting, on Contemporary Challenges in the Banking Sector and Supervisory Stance, organized jointly by Department of Off-Site Supervision and Bangladesh Bank Training Academy (BBTA) at the Academy in Dhaka.

Bangladesh Bank (BB) Governor Atiur Rahman warned the officials, who are involved in supervision of banks and NBFIs, of taking action against any sort of negligence.

The central bank chief also asked the central bankers to enforce the provision of penalties and fines for violation of prudential regulations and irregularities detected through off-site and on-site supervision strictly.

“Our supervisory role has to be increased in preventing money laundering activities and protecting customers’ interests,” Dr Rahman said while speaking at the meeting as the chief guest.

The BB’s supervisors always have to adopt a pro-active approach in regulating and supervising the banking sector, he said, adding that emerging problem situations have to be detected at the earliest possible stage and referred to the competent authority so that corrective actions may be taken in time.

Banking Supervision Adviser of the BB Glenn Tasky said banking sector assets are equal to about 70 per cent of the country’s total gross domestic product (GDP).

In June 2011, bank deposits were over Tk 4.1 trillion – more than 55 per cent of GDP – a substantial part of the nation’s wealth, according to official figures.

“Small depositors are important,” Mr Tasky said adding that 93 percent accounts have less than Tk 100,000, which is 15 per cent of volume.

“There are 44 million of these small depositors – a very large constituency that is looking to the BB to help keep their money safe,” he said while presenting his paper titled ‘Building a Supervisory Culture’ at the meeting.

Among others, Deputy Governors of the BB Nazrul Huda, Ziaul Hassan Siddiqui and Abul Quasem, Executive Directors of the central bank SK Sur Chowdhury and Ataur Rahman also spoke in the inaugural session.

They also said it is an utmost necessity for the central bank to gear up its supervision for better preparing the banks and non-banking financial institutions (NBFIs) towards addressing current and future challenges to ensure financial stability.

BBN/SI/AD-17Sept11-11:09 pm (BST)