Corporate Sustainability in the Bangladeshi Banking Sector: An Overview

Abstract

This article is intended to understand the banks sustainability, its increasing importance, and new developments contemplation. The global profile of risk management and internal control issues has risen significantly during the past two decades, precipitated in part by major incidents such as the recent stock market crash in Bangladesh in 1996 & 2010 and Hallmark scam. These events received worldwide media attention and increased concerns over major issues such as cracks in management and monitoring systems of banks For the purposes of protection of investors’ rights and legal interests, the Bank shall create the effectively system of sound internal control over the own financial and economic activities. The Bank’s internal control system is designed to provide an appropriate level of reliability relevant to the scope and nature of the Bank’s activity, and to fulfill the objectives set by the Bank’s Management Bodies, as well as requirements stipulated by the current law of The Bank Company Act, 1991, The Companies Act (Bangladesh), 1994 and corporate governance rules and regulations. To do so, 25 top executives in the five Bangladeshi banks were interviewed, and 25 questionnaires were addressed to the interviewees and mid-management. After interviewing the conclusion is that those responsible for strategic thinking already acknowledge the importance of the issue and are already making changes in their strategies, modifying their long-term outlooks, organizational structures and business practices in order to adopt the topic of corporate sustainability. However, for the sector to be able to act as a catalyst of effective change, it still has some challenges to overcome. There is the challenge of improving transparency in the socio-environmental performance of the banking institutions. Many of the sustainability projects of Bangladeshi banks are not disclosed and consequently do not receive due recognition by stakeholders. This higher level of transparency will show their true commitment to the topic and encourage society engagement with the institution, contributing, in fact, to better understanding of the role of banks in society.