In terms of comprehensiveness, precision and clarity, the Banking Companies (Amendment) Act 2013 is likely to bring ambiguities among the stakeholders; the shortcomings of the Act, therefore, should be addressed immediately to ensure proper corporate governance in the banking sector, opine speaker at a conference organized by Institute of Chartered Accountants of Bangladesh (ICAB) at its auditorium in the city on Friday.
Md. Habibur Rahman Bhuiyan FCA, Deputy Managing Director, Islami Bank Bangladesh Ltd and S.M. Abdul Hamid, FCA, Deputy Managing Director and CFO, IFIC Bank Bangladesh Ltd jointly presented the keynote in the conference titled ‘Changes in Banking Companies (Amendment) Act 2013 and its Analytical Review & Impact’.
As per section 38 of the Bank Companies Act -1991, the Keynote speakers said that earlier, Form of Balance Sheet, Off Balance Sheet items, Profit and Loss Account, Cash Flow Statement, Statement of changes in Equity, guideline for preparation of Financial Statements, guideline for providing notes to the Balance Sheet and Profit and Loss Account etc. were part of the 1st Schedule of the Bank Companies Act-1991, which are offset by the newly introduced Act 2013. More so, Bangladesh Bank also issued Islamic Banking guidelines as per Bangladesh Bank BRPD Circular No. 15 where proforma of Balance sheet, Off Balance Sheet items, Profit and Loss Account, Cash Flow Statement, Statement of changes in Equity, guideline for preparation of Financial Statements, guideline for providing notes to the Balance Sheet and Profit & Loss Account etc. were given for compliance of Islamic Banking in Bangladesh but the same has not yet been included in the Banking Companies Act.
Although the Islamic modes of Investment terms were included in the Banking Companies Act 1991, these are not good enough, the Keynote speakers said. They urged the government to include Accounts and Balance Sheet, Financial Statements of Islamic banking in the Act (Amendment).
Shitangshu Kumar Sur Chowdhury said, Bangladesh Bank takes policies to formulate, implement the law to strengthen the Banking sector in the country. Without help of the auditors, BB’s effort will turn into vain in the regard. Islamic Banking issues could be addressed by this new Act, he said adding that Bangladesh Bank needs suggestions from the ICAB to incorporate any section of the law regarding Audit to adopt any accounting and audit standardS in line with the international practices. He said, Bangladesh will work in future in collaboration with the ICAB to make more transparent the country’s banking system.
ICAB President Md. Abdus Salam FCA said that corporate governance is the burning issue for the Banking Industry which is expected to be resolved by this amendment. He said it is also the expectation of the stakeholders that the Act will ensure the control of the participation of the banks in the capital market and protect the interest of the small investors.
He further said that the Practicing Members of the Institute as well as the Audit Firms have great concern relating to the changes in section- 39 specially; because of significance of the reporting responsibilities through their Audit report.
He said that any changes relevant to Audit Report not in line with the International Standard on Auditing may hamper the whole technical process and will create ambiguities for the Auditors. It should have been made clear, perceive and user friendly.
With reference to the section 39 of the amendment, ICAB President said, the newly included issues in the Act need to be reviewed immediately taking in to account the BSEC’s Guidelines and after consultation with the Institute of Chartered Accountants of Bangladesh (ICAB) is needed to make the amendment meaningful. Otherwise, the true spirit of the reform may be lost as has happened in many instances, he added.