BB urges banks to rebuild global image after Moody’s downgrade
The Bangladesh Bank on Monday asked the country’s commercial banks to devise strategies to restore their global reputation following the Moody’s recent downgrade of Bangladesh’s long-term sovereign credit rating.
On November 18, Moody’s downgraded the ratings for Bangladesh from B1 to B2. The outlook was also changed to ‘negative’ from ‘stable’ and it downgraded the banking sector’s rating from ‘weak’ to ‘very weak’.
Explaining the downgrade, Moody’s mentioned heightened political risks and possibilities for lower economic growth.
The instruction came during a meeting chaired by Bangladesh Bank governor Ahsan H Mansur and attended by leaders of the Association of Bankers, Bangladesh at the central bank’s headquarters in the capital Dhaka on Monday.
ABB chairman Selim RF Hussain, also managing director of BRAC Bank, along with other senior bankers such as Syed Mahbubur Rahman, MD and CEO of Mutual Trust Bank, Sohail RK Hussain, MD of Bank Asia, and Ali Reza Iftekhar, MD and CEO of Eastern Bank, were present in the meeting.
The meeting mainly focused on the challenges posed by the Moody’s downgrade, which the bankers warned could significantly hinder international trade, such as exports and imports.
They raised concerns about increasing confirmation charges and shrinking credit lines imposed by correspondent banks due to the negative ratings.
BB governor Ahsan H Mansur emphasised the need for banks to address the overdue settlement of letters of credit, highlighting the reputational damage caused by such delays on the international stage.
He further instructed sound financial institutions to play a proactive role in mitigating the liquidity crisis currently affecting several banks.
Bangladesh Bank spokesperson Husne Ara Shikha said that the governor encouraged collaboration among stable banks to support those facing financial stress.
Source: New Age | 25 November 2024
