Speakers at a seminar on Sunday stressed establishing good governance in the banking industry for making good profit by reducing risks and challenges.
They called for empowering the branches of banks to reduce the pressure on the head offices and avoid disorders in the banking industry.
The speakers came up with the views at the seminar styled ‘Centralised and Decentralised Banking: A Study of Risk-Return Profile of Banks’ at the Bangladesh Institute of Bank Management (BIBM) auditorium in the capital’s Mirpur area on Sunday. Former Deputy Governor of Bangladesh bank and presently the Reform Adviser, SK Sur Chowdhury attended the seminar as chief guest while Associate Professor of BIBM, Mohammad Shohel Mostafa presented keynote paper on the occasion.
While addressing, SK Sur said a bank’s cost control efficiency and higher profitability may be ensured with less manpower in a centralized system since the major decisions are taken at the top level.
“On the other hand, fastest credit decisions can be taken in a decentralised system due to the scope of avoiding long and bureaucratic chain of command,” he added.
He said the customer satisfaction level is high in decentralised system since it saves the time of both bank and its customers.
“Decentralisation has a positive effect on banks’ resilience. It is evident that business cycle synchronization between centralization and the decentralization in which a bank operates has a negative impact on risk,” he added.
SK Sur said the centralised and decentralised banks mitigate the negative effect of synchronisation and reinforce the positive effect of diversification on bank’s resilience.
These positive effects are reinforced during the transformation times, which were specially felt in advanced economies, he added.
Chair Professor of BIBM, also former Professor of the Department of Economics, University of Dhaka, Dr Barkat-E-Khoda, former managing Director of Sonali Bank Limited, S A Chowdhury, Managing Director and CEO of DBBL, Abul Kashem Mohammad Shirin, Country CEO of Standard Chartered Bank, Naser Ezaz Bijoy, Professor of Economics of North-Eastern Hill University of India, Utpal Kumar Dey, former managing Director of Pubali Bank, Md. Helal Uddin were present in the seminar among others.
While addressing, Dr Barkat-e-Khoda said the model of banking is getting changed every day so the method of banking will now depend upon the necessity of time.
SA Chowdhury said the public sector banks provide services in decentralised way, so there have necessity of conducting special study in this regard that will help taking decision for the whole banking sector.