...March 2012. Pp. 16 - 31 Corporate Governance-Its Problems & Prospects in Banking Industry in Bangladesh Begum Ismat Ara Huq* and Mohammad Zahid Hossain Bhuiyan** Corporate Governance ensures to bring transparency, accountability and professionalism in the management system of a corporate body that enhances the credibility and acceptability to the shareholders, employees, potential investors, customers, lenders, governments and all other stakeholders. This is more true in case of Banking Industry. Since Banks deal in public money, public confidence is of outmost importance in this Industry. The study aims at finding out problems & deficiencies involved in Corporate Governance practice in Banking Industry in Bangladesh and also suggesting ways and means to remove the same in order to make the Corporate Governance practice sound and effective. In this study, both the primary and secondary data were used. The primary data relating to problems involved in Corporate Governance practice and suggestions to remove the same were collected on the basis of a questionnaire by interviewing 24 randomly selected Bank personnel such as Directors of the Board as the internal part of management and the Auditors as the external group. The secondary data were collected through an extensive literature survey on the subject. The study has identified some major problems in Corporate Governance practice in the Banking Industry of the country. The prospect of Corporate Governance practice is bright...
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...2. March 2012. Pp. 16 - 31 Corporate Governance-Its Problems & Prospects in Banking Industry in Bangladesh Begum Ismat Ara Huq* and Mohammad Zahid Hossain Bhuiyan** Corporate Governance ensures to bring transparency, accountability and professionalism in the management system of a corporate body that enhances the credibility and acceptability to the shareholders, employees, potential investors, customers, lenders, governments and all other stakeholders. This is more true in case of Banking Industry. Since Banks deal in public money, public confidence is of outmost importance in this Industry. The study aims at finding out problems & deficiencies involved in Corporate Governance practice in Banking Industry in Bangladesh and also suggesting ways and means to remove the same in order to make the Corporate Governance practice sound and effective. In this study, both the primary and secondary data were used. The primary data relating to problems involved in Corporate Governance practice and suggestions to remove the same were collected on the basis of a questionnaire by interviewing 24 randomly selected Bank personnel such as Directors of the Board as the internal part of management and the Auditors as the external group. The secondary data were collected through an extensive literature survey on the subject. The study has identified some major problems in Corporate Governance practice in the Banking Industry of the country. The prospect of Corporate Governance practice is bright...
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...countries to function more effectively in providing the full range of financial services is thus a task that will be well rewarded with economic growth. This report takes a first look at the overall financial system of Iraq with a forward looking approach. At the outset it was agreed with Iraqi authorities that the focus of this review should be forward looking and constructive. Overall the financial sector in Iraq is underdeveloped, and is playing a limited role in financial intermediation. The banking system is still by far the most important part of the Iraqi financial system, accounting for more than 75 percent of the assets and dominated by state ownership. Non-bank financial institutions and markets are small and under-developed but have the potential to provide access to sources of finance. Access to finance is impeded by weak financial infrastructure, which needs to be strengthened over time in all areas, including credit registry, the collateral framework, judicial systems, and accounting and auditing skills. When looking at Iraq’s financial system it is important to keep the general political economy in xv REPUBLIC OF IRAQ FINANCIAL SECTOR REVIEW mind. The difficult security situation imposes costs and constraints, the complex political situation impedes decisive policy action, governance issues linger, and the legacy of...
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...Corporate Governance in Financial Services UMACTF-15-M Corporate Financial Strategy – 2014 Student number- 07975484 Word Count- 2,021 Introduction Dictum Meum Pactum- My word is my bond. Simple, powerful, trustworthy. Unfortunately, the world we live in is not simple, those that hold power (and those that do not) are not always trustworthy. Moral hazard is rife in everyday decisions we make, when multimillion amounts are on the line this does not simply fade. In fact, the temptation to break moral code is as high as it will ever be. As much as we would like to trust those in control to be acting in our best interest, we definitely feel better when there are safeguards in place to ensure we are protected. These safeguards are the beginning of the notion of corporate governance, “The process of supervision and control intended to ensure that the company’s management acts in accordance with the interests of shareholders” Parkinson (1993). Over the course of this essay I will investigate and explain how corporate governance has failed and how this failure is arguably at fault for, or at least contributed to, the recent financial crisis in the UK. Critically assessing the pitfalls in corporate governance I will present a reasonable case for where responsibility lies for resolving previous problems and from this move to suggest potential areas for improvement that may limit the potential for future failure. What has happened? We have experienced financial...
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...Introduction Nepal Rastra Bank (NRB), the Central Bank of Nepal, was established in 1956 under the Nepal Rastra Bank Act, 1955, to discharge the central banking responsibilities including guiding the development of the embryonic domestic financial sector. Since inception, there has been a significant growth in both the number and the activities of the domestic financial institutions. To reflect this dynamic environment, the functions and objectives of the Bank have been recast by the new NRB Act of 2002, the preamble of which lays down the primary functions of the Bank as: * to formulate necessary monetary and foreign exchange policies to maintain the stability in price and consolidate the balance of payments for sustainable development of the economy of Nepal; * to develop a secure, healthy and efficient system of payments; * to make appropriate supervision of the banking and financial system in order to maintain its stability and foster its healthy development; and * to further enhance the public confidence in Nepal's entire banking and financial system. The Bank is eminently aware that, for the achievement of the above objectives in the present dynamic environment, sustained progress and continued reform of the financial sector is of utmost importance. Continuously aware of this great responsibility, NRB is seriously pursuing various policies, strategies and actions, all of which are conveyed in the annual report on monetary policy. Vision To...
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...A Look at a Career as Controller in the Corporate Finance Industry Having worked in the Financial Industry for 11 years I feel like it would be natural for me to seek a job such as Controller at a Financial Institution or in the Finance Industry. In order to determine the requirements for such a position I searched a sample job description: Responsible for direct supervision of all accounting and financial functions. Primary responsibilities include supervision of the monthly close process, monthly, quarterly and annual billings to clients for services provided, billing reimbursements from clients, collection of accounts receivable, supervising accounts payable, payroll, monthly reporting for the owner, monthly preparation of a reforecast, annual preparation of a budget, assist in the preparation of quarterly tax projections and annual tax return preparation and all treasury administration. The Corporate Controller will also be part of a team that creates and implements policies and procedures to identify, resolve and document accounting issues in addition to creating procedures to make the close and reporting processes more efficient and accurate. (www.accountingjobstoday.com) “Budgeting is a key function of controllers and their staff, including the counting of spending and revenues” (www.about.com). As it would suggest, a Controller controls access to corporate funds. Controllers typically report to the chief financial officer (CFO) of an organization. It’s typically...
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...Corporate Governance Alfa-Bank Alfa-Bank was founded in 1990. It is one of Russia’s largest privately owned banks Alfa-Bank is present in every key sector of the financial services industry, including corporate banking, retail banking, investment banking, trade finance, insurance and asset management. The Bank is considered one of the most reliable and dynamic financial institutions in Russia. It combines a thorough knowledge of the specific characteristics of the Russian market with the very highest of Western standards. Alfa Banking Group is one of Russia’s largest privately owned banking groups in terms of equity, assets, branches, retail deposits and funds under management. Founded in 1990, Alfa Banking Group offers a wide range of products and operates in all sectors of the financial market, including corporate and retail lending, deposits, payment and account services, foreign exchange operations, cash handling services, custody services, investment banking and other ancillary services to corporate and retail customers. Alfa Bank has simplified its ownership structure in order to participate in the deposit insurance system. AB Holding has consolidated nearly 100% of the bank's shares to replace the multiple companies that used to own the bank. Alfa Banking Group is owned by 6 beneficial shareholders. The role of the Board of Directors of Alfa-Bank is to define the strategic guidelines and policies by establishing the corporate strategy, review the business plans and...
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...[pic] |Background | BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) registered under the Companies Act 1913 on the 2nd of August, 1988, started its operations from the 21st of January ,1989. It is governed by the Banking Companies Act 1991. The Bank was established as the policy makers of the country felt the urgency for a bank in the private sector for financing small scale Industries (SSIs). At the outset, the Bank started as a joint venture enterprise of the BCC Foundation with 70 percent shares and the Government of Bangladesh (GOB) with the remaining 30 percent shares. The BCC Foundation being nonfunctional following the closure of the BCCI, the Government of Bangladesh took over 100 percent ownership of the bank on 4th June 1992. Thus the Bank is state-owned. However, the Bank is not nationalized; it operates like a private bank as before. BASIC Bank Limited is unique in its objectives. It is a blend of development and commercial banks. The Memorandum and Articles of Association of the Bank stipulate that 50 percent of loanable funds shall be invested in small and cottage industries sector. |Present Chairman |Mr. Sheikh Abdul Hye Bacchu | |Present Managing Director |Mr. Kazi Faqurul Islam | Capital Position |Authorized capital |Tk. 2000.00 million | |Paid up capital...
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...NBFC Sector Report and Recommendations RESERVE BANK OF INDIA August 2011 2 ABBREVIATIONS AND ACRONYMS AFC ALM BIS CIC-ND-SI Asset Finance Company Asset Liability Management Bank for International Settlements Systemically Important Non-Deposit Taking Core investment Company Capital Market Exposures Certificate of Registration Commercial Paper Capital to Risk Weighted Assets Ratio Commercial Real Estate Financial Companies Regulation Bill Foreign Direct Investment Investment Company Inter Corporate Deposits Infrastructure Finance Company Initial Public Offering Insurance Regulatory and Development Authority Joint Parliamentary Committee Know Your Customer Loan Company Liquidity Coverage Ratio Lender Of Last Resort Micro Finance Institution CME CoR CP CRAR CRE FCRB FDI IC ICD IFC IPO IRDA JPC KYC LC LCR LOLR MFI 3 M&A NBFC NBFC-ND-SI Mergers and Acquisitions Non Banking Financial Company Systemically important Non Deposit taking Non Banking Financial Company Deposit taking Non Banking Financial Company Non Deposit taking Non Banking Financial Company Non Banking Financial Institutions Non-convertible debentures Net Owned Funds Non-Performing Asset Over-the-counter Public Financial Institution Priority Sector Lending Reserve Bank of India Residuary Non Banking Company Return on Assets Return on Equity Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Scheduled Commercial Bank Securitisation and Reconstruction Companies Securities...
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...CLICO’s Collapse: Poor Corporate Governance Wayne Soverall1 Abstract The corporate collapse on January 30, 2009 of CLICO, the largest conglomerate in Trinidad and Tobago and the Caribbean, is the worst financial shock experienced by the region to date. Today, more than two years later, its devastating effects are still being felt as the government continues to struggle with the bailout to stabilize the financial system, mitigate contagion risk, and resolve the CLICO crisis. Even one year after the bailout, there was still no resolution of the crisis. In view of the intractable nature of the CLICO collapse, the People’s Partnership government that came to power on May 24, 2010 established a commission of enquiry to investigate the causes of CLICO’s collapse, the scope of the MOU, the cost of the bailout, and the failure to provide a bailout to the Hindu Credit Union (HCU) that collapsed in 2008. There are many questions that are still unanswered. What were the root causes of CLICO’s collapse? What corporate governance structures and practices precipitated the collapse? Did the bailout create moral hazard? Who or what was to blame for the collapse? What action has the government taken to date? What lessons have been learnt and, more importantly, how can this situation be prevented from being repeated in the future? This concept paper examines these questions, analyzes the evidence to find answers, and in the conclusion, suggests ways to improve corporate governance and the empowerment...
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...CLICO’s Collapse: Poor Corporate Governance Wayne Soverall1 Abstract The corporate collapse on January 30, 2009 of CLICO, the largest conglomerate in Trinidad and Tobago and the Caribbean, is the worst financial shock experienced by the region to date. Today, more than two years later, its devastating effects are still being felt as the government continues to struggle with the bailout to stabilize the financial system, mitigate contagion risk, and resolve the CLICO crisis. Even one year after the bailout, there was still no resolution of the crisis. In view of the intractable nature of the CLICO collapse, the People’s Partnership government that came to power on May 24, 2010 established a commission of enquiry to investigate the causes of CLICO’s collapse, the scope of the MOU, the cost of the bailout, and the failure to provide a bailout to the Hindu Credit Union (HCU) that collapsed in 2008. There are many questions that are still unanswered. What were the root causes of CLICO’s collapse? What corporate governance structures and practices precipitated the collapse? Did the bailout create moral hazard? Who or what was to blame for the collapse? What action has the government taken to date? What lessons have been learnt and, more importantly, how can this situation be prevented from being repeated in the future? This concept paper examines these questions, analyzes the evidence to find answers, and in the conclusion, suggests ways to improve corporate governance and the empowerment...
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...1. Introduction to the Organization The banking sector remains always the most dominant sector of the financial sector. Hatton National Bank PLC (HNB) is Sri Lanka’s second largest private sector bank in terms of assets (behind Commercial Bank of Ceylon) and is the fourth largest amongst all banks (after accounting for the two state banks, Bank of Ceylon and Peoples’ Bank). HNB accounts for 10% of banking system assets. HNB provides a broad range of banking products and services in the areas of; Corporate Banking, Small and Medium Size Enterprise Banking, Trade Finance, Retail and Consumer Banking, Asset Leasing, Loan Syndication and Project Finance. HNB has an AA- credit rating from Fitch Ratings Lanka Limited, Sri Lanka’s main rating agency. HNB has been acknowledged globally by The Asian Banker as the Best Retail Bank in Sri Lanka for Six consecutive years for its performance from the year 2007 to 2012. The HNB umbrella of today has two local subsidiaries - HNB Assurance and Acuity Partners. HNB have been established for more than 120 years. Their ethos are so simple for its survival even in turbulent times. HNB remain firm in their belief that they must continue to be banking partner in the lives of the Sri Lankan people. HNB has put in place an effective Risk Management System with clearly stated procedures, utilizing various committees that constitutes senior management personnel with requisite expertise/experience. 1. Identifying Retail Banking Sector...
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...Topic: China’s financial liberalization Title: China’s financial liberalization and the policy transformation towards openness Author: Xuepan Cheng 4136801 Abstract This paper focused on the research of China’s financial liberalization reform in order to discuss the economic and financial effects casted by financial liberation. Also the article pointed out the current problems of China’s financial system and provided suggestions for implementation. The main argument of policy suggestions for China is to further lower down the financial limits, so that China will be able to build a better foundation for financial liberalization. Also the effective and constant supervision and modification of the financial regulation system is also necessary for maintaining a healthy macroeconomic environment and continuing capital flows. While the economic globalization, and financial liberalization has become a major tendency that attracts a lot of people’s attention in world economic development since the 1980s, the financial liberation and reform has become a necessity for China to develop it’s financial market and economy wellbeing. 1. Introduction China, as one of the fastest expanding economy in the world, is largely owing to the economic globalization, and financial liberalization since the 1980s. Economic globalization refers to the fact that economic resources (goods, capital, labor, technology, information and other transactions) flow from one country to another. This tendency makes...
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...Developing Country Studies ISSN 2224-607X (Paper) ISSN 2225-0565 (Online) Vol.5, No.4, 2015 www.iiste.org A Risk-based Assessment of Ghana Commercial Bank Limited ADU-MENSAH, Simon1 ABDALLAH, Mohammed Inusah2 ANTWI, Stephen Kwadwo3* 1. Depot Manager, Armajaro Company Limited, Nyinahin District, Ashanti, Ghana 2. Lecturer, Department of Accountancy, Tamale Polytechnic, P.O. Box 3 ER, Tamale. 3. Lecturer, Department of Accountancy, Tamale Polytechnic, P.O. Box 3 ER, Tamale. *stevekwadant@yahoo.ca Abstract Risk management is a very important concept for any business as most financial decisions revolve around the corporate cost of holding risk. This issue is particularly important to banks since risk constitutes their core business processes. This study assesses the risk profile of GCB to ascertain its soundness and conformity to international best practices. The study selects credit, liquidity, market and operational risks as dependent variables while size, NPLs ratio, capital adequacy and asset management are utilized as explanatory variables for the period of five years from 2007 to 2011. The regression results indicate that the size of bank does not influence any of the risks. Apart from credit risk which is influenced positively by the NPL ratio, all the other risks, show a negative relationship with NPL ratio. The capital adequacy has a negative relationship with credit and liquidity but a positive relationship with market and operational risks...
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...and expanded its services to offer banking, insurance, real estate, energy and beverages. In 2007, their asset totalled US$16Billion, which was equal to 30 percent of the Caribbean’s Growth Domestic Product. So why did such a successful business fail when the Global Financial Crisis hit the Caribbean? Two major issues: 1. The presence of moral hazard as a result of CLICO the British American Insurance Company (BAICO) offering higher returns on customers’ deposits that was higher than other banks. The deposits were then used to finance their real estate and other investments. So when the Global Financial Crisis hit the Caribbean, the investments along with CL Financial crumbled. 2. Better supervision and regulation of large financial institutions’ activities should have been implemented. It is said in the IMF Working Paper on Financial Interconnectedness and Financial Sector Reforms in the Caribbean, July 2013, that CLICO and BAICO were dodging regulations and supervision in order to fund these investments. "We got Clico to agree to set up Audit Committees. We got Clico to agree to set up an Investment Committee. We got Clico to agree to a certain set up for the Board including independent members and then in the final analysis, you expect those to be implemented. But a few...
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