A number of commercial banks in Bangladesh do not make payments on time against letters of credit (L/C) despite having no discrepancy in the system.
“This affects the country’s image to the world negatively,” said ICC Bangladesh President Mahbubur Rahman.
He made the observation at the closing session of a workshop titled ‘Documentary Trade Finance: Technical, Legal & Technology’, organised by ICC Bangladesh in the capital recently.
“We at ICC Bangladesh frequently receive complaints from foreign banks about dishonouring L/C terms and not making payments on time,” he added.
He, therefore, urged the Bangladesh Bank to make sure commercial banks do not withhold payments when the documents are valid. He advised the workshop participants to scrutinise the documents carefully and ensure payments are made on time.
He also asked the participants to discharge their duties responsibly and follow international banking rules and regulations while settling overseas payments.
ICCB President mentioned that the country’s financial institutions are passing through a crucial time due to nexus between regulators, bankers and big-time borrowers. This has to stop, he observed.
Mr Rahman said both clients and financial institutions have to streamline their trade activities in order to remain competitive in today’s changing environment.
According to the ICC 2017 survey, the major challenges businesses facing today are cost control, limited technical competency, limitations of current technology, poor productivity management and limited training and development, he added.
Mr Muhammad A (Rumee) Ali, ICC Bangladesh Banking Commission chairman and chief executive officer of Bangladesh International Arbitration Centre (BIAC) in his speech said, “According to media reports, the banking sector has lost Tk 225 billion over the last 10 years through scam. So, how the sector is sustaining in such a situation and declaring profits every year?”
He mentioned that lack of good governance and pressure from the vested group are the main reasons behind such huge scam. He urged the central bank for ensuring good governance in the banking sector.
Vincent O’ Brien, executive committee member of ICC Banking Commission, Paris and vice chairman of the Banking Commission of ICC United Arab Emirates, conducted the workshop. ICC Bangladesh Secretary General Ataur Rahman also spoke on the occasion.
A total of 151 participants from 35 banks attended the workshop.
