Dhaka, Bangladesh (BBN) – The central bank has amended its diagnostic review report (DRR) policy to scrutinize closely commercial banks’ annual audited financial statements for 2012, officials said.
“The central bank has amended the DRR considering the international best practices to make financial disclosures more analytical to assess financial health of the country’s banking sector,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka.
He also said the BB has started preparations to analyse the banks’ annual audited financial statements and management reports in line with the amended DRR.
As part of the preparations, the central bank has provided training to 30 officials of its Department of Off-site Supervision (DOS).
Under the amended DRR, off-balance sheet items, including opening letter of credit (LC), guaranty and commitment, will be scrutinized along with the balance sheet items.
The BB has taken the latest move to check fraudulence and forgery in the banking sector, considering the latest diversification in foreign exchange activities.
“We’ve already decided to assess different information including foreign bill purchases (FBPs), loans against trust receipts (LTRs), payment against documents (PADs), loans against imported merchandise (LIMs), forced loans and off-balance exposures in line with the amended DRR,” another BB official said.
He also said the central bank has already appointed an expert as consultant to strengthen the skill of its inspection and supervision departments in identifying and preventing acts of fraudulence or misconduct of the banks.
During the scrutiny, the central bank officials will also verify the figures of classified loans and net profits of the banks in line with the BB’s latest policy instructions.
On September 23 last year, the BB revised its loan classification, provisioning and rescheduling policies after more than two months of their introduction. The revision aims at easing the difficulties that members of business community and bankers are facing.
“We’ll check the figures of classified loans and net profits of the banks considering our inspection reports,” another BB official said.
The central bank is now conducting a special inspection in some selected large branches of 20 private commercial banks (PCBs) to verify the figures of classified loans and net profits, he added.
“All banks will have to submit both the reports to the DOS by June 30,” the central banker said, adding that the BB has received annual audited financial statements and management reports from five commercial banks.
BBN/SSR/AD-23Apr13-9:45 am (BST)
