Sunday | 6 October 2024 | Reg No- 06
বাংলা
   
Sunday | 6 October 2024 | Epaper
BREAKING: ● Palestinian death toll in Gaza rises to 41,870      ● Travel ban on ex-NSI DG, his wife      ● Sherpur flash flood death toll rises to 7, new areas flooded      ● 3 killed in Keraniganj restaurant gas cylinder blast       ● Five die of dengue in 24hrs      ● BNP demands steps against ABM Khairul Huque at dialogue with CA      ● 3 die in Sherpur flood; 60,000 stranded      

Bank Restructuring Yields Positive Outcome

Depositors regaining confidence: BCB CEO Tarik Morshed

Published : Sunday, 6 October, 2024 at 12:00 AM  Count : 193
Shamsul Huda
In an exclusive interview with the Daily Observer, Tarik Morshed, Chief Executive Officer and Managing Director of Bengal Commercial Bank (BCB), discussed the current state of Bangladesh's banking sector, highlighting both the challenges and opportunities that lie ahead. Morshed asserts that despite recent turmoil, the sector is on a positive trajectory under the guidance of Bangladesh Bank (BB) and with collective efforts from strong institutions.

Restructuring sets foundation for future stability
Morshed emphasized that the ongoing restructuring initiated by Bangladesh Bank is a pivotal move. He noted that BB has dissolved several underperforming bank boards, taking decisive action to stabilize the sector. "There were undoubtedly causes behind these decisions," he said. "However, the restructuring efforts are aimed at setting a positive outcome. If we collectively stand together, we can overcome the prevailing challenges."
His optimism stems from Bangladesh Bank's recent policy changes that have fostered a more structured environment. "The central bank's interventions are timely. With their support, weak banks can recover and regain stability in the coming days," Morshed affirmed, underscoring the importance of inter-bank cooperation in this recovery process.

Depositors' confidence is key to stability
Morshed elaborated on the significance of restoring depositor confidence, a core element in stabilizing the banking system. He highlighted that banks, fundamentally, operate with depositors' money, and it is the fiduciary duty of banking institutions to safeguard these funds. "It is our holy responsibility to protect depositors' rights," he stressed. "Once we effectively do this, depositor confidence in the banking sector will be restored."

He argued that this confidence is the bedrock upon which the entire system rests. Without it, liquidity will continue to tighten, and economic recovery will stall. He praised Bangladesh Bank's decision not to print new currency notes but instead to focus on liquidity support mechanisms between banks. "This approach is prudent. Many banks have excess liquidity that is currently sitting idle. If stronger banks channel these funds to weaker institutions, it will be a noble practice and will enhance systemic stability."

Liquidity support could stabilize Dollar market
Morshed also addressed the issue of excess liquidity and its impact on the broader market, particularly the foreign exchange market. "If strong banks assist weaker banks with their excess liquidity, it will not only help these struggling institutions but will also contribute to stabilizing the dollar market," he noted. Already, he observed, signs of improvement are evident, with the dollar market starting to stabilize.
He attributed part of this success to coordinated efforts among institutions. "We are witnessing a better alignment between banks, which is critical to ensuring market stability. We expect that as this collaboration strengthens, the banking sector will emerge more resilient."

Addressing NPLs and bad loans is the next frontier
While restructuring has brought immediate relief, Morshed was clear that long-term stability will require tackling the underlying issue of non-performing loans (NPLs). He expressed concern over the high volume of bad loans that continue to plague many institutions, urging Bangladesh Bank to concentrate on recovery efforts. "The central bank now needs to focus on recovering bad loans with renewed intensity," he asserted. "Only then can we ensure that the root causes of banking sector instability are fully addressed."

Morshed suggested that a more robust framework for loan recovery would be essential moving forward, with Bangladesh Bank taking the lead. "We need stronger enforcement mechanisms and better oversight. This would significantly mitigate future risks."

Looking forward with optimism
Reflecting on the broader landscape, Morshed expressed cautious optimism about the future of the banking sector under new leadership. "We have faced disasters in the past, but the times are changing," he said. He remains hopeful that with proper governance, better management of liquidity, and a stronger focus on NPL recovery, the sector can regain its footing.

Morshed also called on Bangladesh Bank to be transparent in addressing the root causes of past failures. "The central bank must clearly communicate why these disasters occurred," he stated. "This transparency is critical for preventing similar crises in the future and for building a more resilient financial ecosystem."

Tarik Morshed's leadership at Bengal Commercial Bank reflects his belief in collective responsibility within the banking sector. By fostering cooperation among institutions and addressing systemic issues such as NPLs, Morshed is confident that Bangladesh's banking sector can regain stability. 

As reforms take shape, his forward-looking approach offers a roadmap for navigating the challenges ahead.


LATEST NEWS
MOST READ
Also read
Rewriting Constitution will be dangerous: Manabzamin editor
NCC demands rewriting of Constitution
15 injured in BNP factional clash in Khulna, 4 expelled
5 die, 927 more hospitalised with dengue
Govt working to send stranded migrants to Malaysia: Asif Nazrul
Lightening-strike casualties rising steadily 297 struck dead in eight months 
Depositors regaining confidence: BCB CEO Tarik Morshed
Chief Adviser’s meeting with political parties
Editor : Iqbal Sobhan Chowdhury
Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000.
Phone: PABX- 41053001-06; Online: 41053014; Advertisement: 41053012.
E-mail: info©dailyobserverbd.com, news©dailyobserverbd.com, advertisement©dailyobserverbd.com, For Online Edition: mailobserverbd©gmail.com
🔝