Unethical banking practices thrive due to bad management: Grameen Bank chairman

Bad management in the banking industry of Bangladesh has given rise to unethical banking practices in the country, said Professor Dr AKM Saiful Majid, chairman of the Board of Directors of Grameen Bank on Saturday.

As the keynote speaker at the 21st Nurul Matin Memorial Lecture on Ethics in Banking, organised by the Bangladesh Institute of Bank Management (BIBM), Majid emphasised that unethical banking practices have led to several instances of bank failures in Bangladesh over the past three decades.

Majid emphasised that ethical banking practices are crucial for the long-term interests of stakeholders, including customers, service provider banks, and bank owners. He added that ethical banking practices have inherent strengths and advantages.

The event was presided by Abdur Rouf Talukder, chairman of the BIBM Governing Board and Governor of Bangladesh Bank, while BIBM Director General Dr Md Akhtaruzzaman delivered the welcome address.

Abdur Rauf Talukder noted that the role of the boards of directors and chief executive officers in practising ethics in banking is essential for the overall performance of banks. He emphasised the separation of management in business decision-making and the execution of banking activities to ensure smooth functioning and support for the boards in an ideal scenario.

Furthermore, Bangladesh Bank has formulated regulations for both the roles of the boards and management of banks in line with international best practices to ensure sound corporate governance and ethics in the banking sector, he added.

Dr Md Akhtaruzzaman, director general of BIBM, explained that the institution arranges the Nurul Matin Memorial Lecture each year to enhance the ethical value of bankers. The event is held in memory of the late AFM Nurul Matin, one of the founders of BIBM and a former director of the institution.

Former governors, deputy governors, senior central bankers, government officials, BIBM's chair and supernumerary professors, top executives from different banks and financial institutions, university professors, academicians, faculty members of BIBM, senior bank executives, and media representatives participated in the annual memorial lecture programme.

Dr Ashraf Al Mamun, associate professor and director (research, development and consultancy) of BIBM, gave the vote of thanks.