Fallen from the Trail – A case study based on Banking Sector in Bangladesh
Keywords:Financial Crisis, Depositors Trust, Monetary System, Corporate Governance, Central Bank Guidelines, Systematic Risk
The history of bank failures in many countries indicates that loss of public confidence in banks could be contagious and quickly lead to systemic banking crisis situations. The depositors might lose confidence in the Bank for such activities. Corporate Governance is concerned with holding the balance between economic and social goals and between individuals and communal goals. Banks can undertake all business operations as a result of public trust and faith in the stability and soundness of the banks in particular and the system in general.
The study was carried out to measure the financial crisis and Corporate Governance in the troubled banks in Bangladesh. The concerned bank was forced to pay off loans from the four banks with its securities - treasury bonds and bills - with the Bangladesh Bank. In Bangladesh, commercial banks need to keep the securities with the central bank to maintain its mandatory Statutory Liquidity Requirement (SLR). Currently, few banks have no securities to sustain SLR. A bank has to keep at least 19 percent of its depositors' money in the form of SLR and CRR with the central bank to protect the interest of the depositors.
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