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Bangladesh Bank (BB) Governor Dr Atiur Rahman

Quality corporate governance a must for banks: BB boss

Attaining high quality of corporate governance is imperative for creating and maintaining investors’ confidence in corporate businesses and banks, Bangladesh Bank (BB) Governor Dr Atiur Rahman said on Saturday, reports BSS.
The governor attached high importance to improving corporate governance, particularly for banks, saying that the banks are highly engaged in risk bearing investments with depositors’ funds in a fiduciary role.
He was speaking at a seminar on “Revisiting Corporate Governance Regulations for Banks in Bangladesh” at a city hotel.
International Finance Corporation (IFC) in association with Bangladesh Association of Banks (BAB) and Association of Bankers Bangladesh (ABB) organised the seminar where IFC country director for Bangladesh, Nepal and Bhutan Kyle Kelhofe and BB deputy governor SK Sur Chowdhury spoke on the issue.
Referring to the financial crisis in 2009, Dr Rahman held responsible the corporate governance failure in banks for ‘collapses in chains of contagion across institutions and markets with linked exposures’.
Looking forward, he also asked banks to improve quality of corporate governance so they would not only be capable of avoiding a 2009 like financial crisis, but also be strong enough to fence off rising challenges from diverse aspects.
“We at the BB have therefore gone about setting the motivations oriented in the right direction alongside overseeing compliance with corporate governance related laws, regulations and guidelines”, the governor said.
He said the central bank has been constantly updating related rules and regulations to facilitate banks improve corporate management, but reminded that bank directors and senior managements must bear in mind that good corporate governance is more a culture to be fostered spontaneously by the corporate business community rather than a discipline to be enforced coercively by the regulators.
Dr Rahman said the Corporate Social Responsibility (CSR) mainstreaming initiative taken up in 2008 at the onset of the global financial crisis is now a full blown initiative of ingraining socially and environmentally responsible financing in the corporate ethos of Bangladesh’s financial sector.

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