Bangladesh Bank has created a special clause requiring the appointment of accredited foreign consulting firms to carry out risk-based integrated audits of the nation’s banks. This clause states that the central bank will designate a consulting firm to help create bank corporations and banking policies. The consulting firm will then carry out comprehensive audits of individual banks. The Bangladesh Bank Act states that the central bank’s board of directors developed the clause known as “Special Regulations of Bangladesh Bank 2024” during a meeting.
Bangladesh Bank said in a letter to all of the nation’s bank CEOs and managing directors on Sunday, December 22, that this clause will take effect right now.
This clause states that Bangladesh Bank must select an accredited foreign consulting firm to handle the bank’s integrated audit or a portion of it. The terms of the integrated audit and the remuneration to be paid to the international consulting firm for this work and the manner in which the same shall be paid shall be determined by agreement.
International consulting firms may carry out integrated audits or parts thereof as they deem convenient. However, they have to have a separate agreement with Bangladesh Bank to determine the related terms.
Bangladesh Bank has given general permission to banks through this special provision for scheduled banks to provide information about their customers to international consulting firms for integrated audit work.
The central bank will designate a specific department to coordinate the activities of international consulting firms with scheduled banks. According to the agreement, the international consulting firm will submit a report to the Governor of Bangladesh Bank. The Governor will then submit the report to the Board of Directors for further necessary action.
The special provision defines an integrated audit as a risk-based detailed audit, which includes a review of asset quality, a review of the corporate governance situation and a review of the bank’s policies, procedures, processes and compliance with laws and regulatory regulations.
Regarding the reason for issuing this provision, several banks in the country are facing multifaceted challenges despite various regulatory measures. These challenges are particularly in the areas of asset quality, corporate governance, policies and compliance with laws and regulations. As a result, people’s confidence and trust in the banking system in general is losing. Besides, the credibility of the entire banking sector is also getting damaged.
When asked about this special provision of Bangladesh Bank, the executive director and spokesperson of the regulatory agency Husne Ara Shikha said that some banks will be audited by international organizations. This rule has been enacted for this.
It is known that some banks in crisis due to irregularities will start the audit process at the beginning of January. Earlier, Governor Ahsan H. Mansoor said that banks’ asset quality will be checked by international institutions. Initially, 12 banks will be audited. As a result, the true picture of these banks will come out.
