Tracking ethics in banking

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Tracking ethics in banking

Sajjadur Rahman

Professor Muzaffer Ahmad delivers his speech at the eighth Nurul Matin Memorial Lecture on “ethics in banking” at Bangladesh Institute of Bank Management in Dhaka on Wednesday. Photo: STAR

Everything that is legal is not necessarily ethical.

The dogma prevails also in the country's banking industry as it is in other sectors, eminent economist Prof Muzaffer Ahmad said.

“Legalisation of concealment of information on illegal money or reluctance to take money of micro depositors by banks are the two bright examples of this kind,” said Prof Ahmad while delivering eighth Nurul Matin Memorial Lecture on 'Ethics, Banking and Responsibility of Professionals' at Bangladesh Institute of Bank Management (BIBM) in Dhaka on Wednesday.

Owners and managers do not consider ethical things logical. “That's why illegal unanimous transactions take place in the banks,” said Ahmad, who is a former teacher in economics at the Institute of Business Administration of Dhaka University.

“Although there are government regulations and supportive policies on social, environmental and public welfare, businessmen and bankers often refrain from this consideration,” he remarked.

He said ethics is as old as the human history. Good and bad things had always come up in stories, poetry and philosophies.

The issue is also discussed in all religions and culture, he said.

“We can see conscience in the painting of Michelangelo's Sistine Chapel. Jesus' life was full of truth and justice, and the honesty, transparency and equality of Hazrat Muhammad (PBUH) are proud inheritances for the people,” he said.

Bangladesh Bank Governor Dr Salehuddin Ahmed, who is also the head of the BIBM board of governors, chaired the annual lecture session.

Justice Shahabuddin Ahmed, former president of Bangladesh, delivered the first Nurul Matin Memorial lecture followed by former chief adviser to the caretaker government Justice Habibur Rahman, eminent economist Prof Rehman Sobhan, former finance minister M Syeduzzaman, economist Dr Wahiduddin Mahmud, research fellow emeritus at International Food Policy Research Institute Washington Prof Nurul Islam, and former governor of Reserve Bank of India Bimal Jalan.

The lecture has become a campaign to improve ethical standards in the country's banking profession and arouse a sense of ethics among bankers in order to improve their image in public eyes.

Prof Ahmad who is also a well-known personality in promoting good governance, environmental issue and civil rights, delivered the latest one in a gathering of senior bankers and civil society.

His 28-page lecture written in Bangla focused on ethical issues in different sectors although the subject was ethics in banking.

He started by mentioning some fundamentals of ethics before describing it in the banking sector.

Ethics differentiate between good and bad, but it does not always discuss ins and outs of the things, he said. “Everything that is legal is not always ethical,” he added.

Prof Ahmad said ethical business practice in all areas including banking sector is a must for the overall development of the country. He said every area of the society is facing malpractice. People accommodate bad practices willingly as they reap 'benefits' from those, he added.

On the banking business, he said: “It has different characteristics. It varies from other sectors, which is based on people's trust.”

He said, "Personal ethics is fully ignored in our banks. Religious, educational and social values are defeated to profit-mongering."

The industry makes a huge profit with public money, but the businessmen do not always consider the depositors' interest, he said.

“We have seen legal fights of loan defaulters and pilferage of depositors' money by bank officials,” Ahmad said.

“Bribery, influence, corruption and abuse of power have become basic problems for our banking industry.”

When the banks consider anything beyond profit, the issue of ethics becomes irrelevant, he added.

Increasing involvement of politicians in the banking business has also become a concern because experience says negative things about this, he said.

"I will only expect that our new generation of bankers will willingly come forward to helping the campaign on ethics in their collective interest and prove that they are equally concerned to keep banking profession out of corruption and malpractice in order to improve their personal and collective image."

“Can our banking industry adopt the idea of green bank, green housing and green business like what the Europeans have done?”

The economist said the industry needs a proper climate to flourish.

sajjad@thedailystar.net