Dhaka, Bangladesh (BBN)– Bangladesh economy presently stands at US$100 billion and this could have been double to $200 billion with better management of fund by the commercial banks, a former caretaker government adviser said on Saturday.
The credit risk management by the banks is significantly important as they are utilizing public money for providing credit for investment, said Syed Manzur Elahi, also the Chairman of Apex Group.
Mr. Elahi spoke at the inaugural session of a workshop on credit risk management organized by International Chamber of Commerce (ICC) Bangladesh in the capital Dhaka.
He said the rate of non-performing loans of the state owned banks are the highest followed by private commercial banks and foreign banks. As a result, liquidity gets affected, ultimately hampering investment in development project by the banks, he added.
Mr. Elahi appreciated the Bangladesh Bank (BB) manual of credit risk. He said the manual is very comprehensive and if properly followed will definitely reduce credit risk.
It will also help better management of fund, he said, adding that the central bank should build up more professional capacity and increased manpower to monitor the risk provided by the banks.
He, however, feared that it will be difficult for the central bank to monitor liquidity closely as more banks are coming in the near future.
Professor Mamun Rashid, Dean, BRAC Business School and Chairman, ICC Bangladesh Standing Committee on Banking, Technique & Practices emphasized the need for appropriate tools & mechanism to mitigate the Credit Risk Management, as it is not possible to eliminate credit risk totally.
He also urges to ensure proper management of credit risk as well as best utilization of resources.
The workshop will provide participants with an overview of best practices in credit risk management and how to avoid unexpected losses, the ICCB said in a press statement.
Participants will also be able to benchmark their institution against industry best practices; emphasis will be given on corporate credit risk management.
Mr. Johnson Chang, Credit Risk Officer, HSBC Bangladesh who is also the resource person of the workshop spoke at the inaugural session. Among others, ICCB Secretary General Ataur Rahman also spoke in the workshop.
A total of 68 senior and mid-level executives from banks and financial institutions attended the workshop.
BBN/SSR/AD-24Mar12-11:50 pm (BST)