An Assessment of Functions of Foreign Exchange Inspection and An - - PowerPoint PPT Presentation

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An Assessment of Functions of Foreign Exchange Inspection and An - - PowerPoint PPT Presentation

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An Assessment of Functions of Foreign Exchange Inspection and An Assessment of Functions of Foreign Exchange Inspection and Vigilance Department of Bangladesh Bank Vigilance Department of Bangladesh Bank -Drawback and Solutions Drawback and

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An Assessment of Functions of Foreign Exchange Inspection and An Assessment of Functions of Foreign Exchange Inspection and Vigilance Department of Bangladesh Bank Vigilance Department of Bangladesh Bank

  • Drawback and Solutions

Drawback and Solutions Presented By Mohammad Shafikul Imdad ID No: St 112282 PMBF Examination Committee Mr.Weerakoon Wijewardena (Chairperson)

  • Dr. Juthathip Jongwanich (Co-chair)
  • Dr. Sundar Venkatesh (Member)

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Agenda of Presentation Agenda of Presentation

Objective Methodology Overview of FEIVD Analysis

Analysis

Conclusions Recommendations

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Objective Objective

To identify the functions of FEIVD To

identify the drawbacks

  • f

the functions of FEIVD

To

identify the mechanisms through

To

identify the mechanisms through which those drawbacks could be resolved

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Methodology

To Identify the Drawbacks(Quantitative):

Questionnaire-

  • Likert Five Scale:

(1 Strongly Disagree, 2 Disagree, 3 Neither Agree nor Disagree, 4 Agree, 5 Strongly Agree)- Employees of FEIVD (34 Questions) 4 Agree, 5 Strongly Agree)- Employees of FEIVD (34 Questions) & CB(22 Questions)

  • Two Scale:(1 Yes, 2 No)- Customers of CB(9 Questions)

Factor analysis- Identify small number of factors the explain most of the variance Mean and standard deviation- indentify most important

questions that affect the functions of FEIVD most. Use below 3 mean value.

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Methodology Methodology

To Reach the Best Solutions (Qualitative)

  • Suggestions from-
  • Employees of FEIVD and CBs
  • Customers of CBs
  • Higher Officials of FEIVD
  • Central Bank of Srilanka
  • Author’s Experience

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Overview of FEIVD Overview of FEIVD

DGM (1) (Foreign Exchange Inspection) GM (1) DGM (1) Vigilance DGM (1) Compliance, Money Changer, System Audit, General Section, Market DGM (1) Help Desk, Complaint Cell

Organogram

Inspection) JD (5) DD (8) AD (3) General Section, Market Studies Cell Complaint Cell JD (6) DD (12) DD (8) AD (3) AD (3) AD (3) JD (6) 6

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Overview of FEIVD Overview of FEIVD

Reason For Note Put up (Annual Inspection Program, Complaints, etc.)

Instruction For Note Put up Note Put Up by Junior Officers (AD, DD) Passed By Higher Officials (DGM to Governor) (Instruction to Further Query then Filed) Pass (Instruction for Inspection time, Team Member, TOR, etc) (Instruction to Further Query then Filed) time, Team Member, TOR, etc) Inspection In Related Banks, FI’s, etc Submission of Inspection Report Passed By Higher Officials (DGM to Governor) Letter Issued to Inspected Organization with Necessary Instructions Compliance and File

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Overview of FEIVD Overview of FEIVD

Functions of FEIVD at a glance

Subject

  • No. of

Team Members Inspecti

  • n

Period Inspection Model Report Inspection Area Comprehensive Foreign Normally 2/3 3/4 Days Yes Inspect all the foreign exchange related areas Foreign Exchange Inspection 2/3 exchange related areas (import, export, remittance, etc). Vigilance Normally 2 2-5 Days No Inspect

  • n

the basis

  • f

complaint about the bank System Audit Normally 2 2 Days Yes Inspect Foreign Exchange Risk Management policies and practices Money Changer Normally 2 1 Day Yes Inspect the business activities

  • f money changer about the

foreign currency

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Analysis Analysis

Factors of FEIVD Factors of FEIVD

Factor Total Variance Explained (%) Questions/Variables Factor 1 26.64

  • The way of annual inspection program for comprehensive inspection,
  • Proper inspection method,
  • Skilled and effective inspectors,
  • Quality inspection report,
  • Proper implementation of inspection report suggestion by FEIVD and CB,
  • Monitoring and time utilization of Inspection,
  • Qualified and efficient supervisor,
  • Proper inspection guideline,
  • Basel core principles implementation,
  • Basel core principles implementation,
  • Good coordination among supervisory departments of BB and among

different regulatory bodies with BB Factor 2 10.498

  • Enough inspection team member

Factor 3 8.760

  • Proper selection of types of banks
  • Timely response by CB to inspection teams query

Factor 4 7.795

  • Sufficient time for inspection
  • Training
  • Timely implementation of inspection report

Factor 5 6.723

  • Prepare the guidelines internally

Factor 6 5.822

  • Familiar with the IT systems of banks

Factor 7 4.574

  • More then one supervisor hampers departments work

Factor 8 4.163

  • Timely submission of inspection report

Total= 74.975

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Analysis Analysis

Factors of CB Factors of CB

Factor Total Variance Explained (%) Questions/Variables Factor 1 24.203

  • Proper implementation of inspection report suggestion by FEIVD and CB
  • Co-operation and timely respond of CB with inspection team,
  • Proper of inspection guidelines
  • Supervision standard is updated as per existing rule and regulations
  • Good coordination among inspection team members, supervisory
  • Good coordination among inspection team members, supervisory

departments of BB and among different regulatory bodies with BB Factor 2 18.128

  • Sufficient IT support for department’s functions
  • Prepare the guidelines internally

Factor 3 11.242

  • Training
  • Timely solution of Vigilance Complaints

Factor 4 8.574

  • Proper inspection method
  • Quality inspection report

Factor 5 8.442

  • Sufficient number of inspection
  • Timely implementation of inspection report

Total= 70.589

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Analysis Analysis

Considering FEIVD and CB factor analysis-exclude only the following questions:

The way to select the types of the banks is appropriate You know the goal of the department You know the action plan of the department to achieve You know the action plan of the department to achieve

its goal

Consider Both Factors- Could not reduce the data that much Consider only the FEIVD or CB-Could reduce more variables.

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Analysis Analysis

Discussion Based on Mean and Standard Deviation Discussion Based on Mean and Standard Deviation

SL No. Question Mean (FEIVD) Mean (CB) 01 The inspectors do not need training 1.41 2.2 02 The time for the inspection is enough 2.03 2.8 03 The number of People for inspection is enough 2.24 >3 04 There is good coordination among supervisory departments of BB 2.52 >3 05 The bank supervision standard is updated as per existing rule and regulations 2.59 >3 06 The inspection reports are timely implemented 2.62 >3 07 You are familiar with the IT systems of banks 2.69 >3 08 IT support is sufficient for you 2.69 >3 09 The suggestions of the inspection reports are properly implemented 2.79 >3 10 The inspectors are skilled enough 2.83 >3 11 The inspection reports are timely submitted 2.86 >3 12 The guidelines require development, it can be done internally. >3 2.65

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Analysis Analysis

Identified Problems and Solutions Identified Problems and Solutions

Problems Opinion-Higher Officials of FEIVD, Former Senior Deputy Governor of CBSL, Author Inspectors need training In house Training, Individual Training Need, MandatoryTraining & Learning ,Mgt. Dev. Center Time for inspection is not enough Higher Officials communicate for time extension, Pre-pre. Work Program, Identify exact data not enough Pre-pre. Work Program, Identify exact data requirement, Additional data- verbally The number of people for inspection is not enough Multi-disciplinary teams , Require more analysis Absence of good coordination among supervisory departments of BB Meeting among the employees and top mgt. of supervisory dept, Meeting with the BB top mgt., Central Data Receiving system, Different deputy governors responsible and coordinate

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Analysis Analysis

Identified Problems and Solutions Identified Problems and Solutions

Questions Opinion-Higher Officials

  • f

FEIVD, Former Senior Deputy Governor of CBSL, Author The bank supervision standard is not updated as per existing rule and Need High Officials consciousness, Continuous update of supervision standard per existing rule and regulations The inspection reports are not timely implemented Monitoring, Accountability, Follow up mechanism, Reminder to Banks Inspectors are not familiar with the IT systems

  • f

banks Prior approval from BB to use software, Training on software, Encourage staffs of BB to learn the changing software IT support is not sufficient for the employees of FEIVD Continuous training, Technical support, Consults with IT experts where lacking

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Analysis Analysis

Identified Problems and Solutions Identified Problems and Solutions

Questions Opinion-Higher Officials

  • f

FEIVD, Former Senior Deputy Governor

  • f

CBSL, Author The suggestions

  • f

the inspection reports are not properly implemented Monitoring, Adequate follow up The inspectors are not skilled enough Proper monitoring, Training , Selection of the right employee for inspection, Sufficient Fund forTraining The inspection reports are not timely submitted Monitoring The guidelines require development, it can be done internally Combination of BB employees and experts from outside

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Analysis Analysis

Discussion Based on Survey Result of Customers Response Discussion Based on Survey Result of Customers Response

CB’s customers-limited knowledge about this service BB and FEIVD. Survey Result on Customers of CB-

All of them heard the name of BB. All of them heard the name of BB. 79% knew about some activities of BB. 76% of them knew Supervision activities of BB Only 48% knew that they could complaint against

CBs to BB.

Very few (7%) knew the various ways to

complaint against CBs to BB.

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Way to inform Customers of CB-

Notice in the Bank premises Short Message Service (SMS) Advertisement-News paper & Electronic Media Attach the information with Account Opening Form,

Analysis Analysis

Discussion Based on Survey Result of Customers Response Discussion Based on Survey Result of Customers Response

Attach the information with Account Opening Form,

Cheque Book, etc

Internet

For Proper Functioning- Banking Ombudsman- CBSL, RBI Credit Counselling Unit -CBSL

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Conclusions Conclusions

Identified some problem of FEIVD as discussed

earlier

Also tries to show the ways to identify problem and

the way to solve it

But this is not the end- concentrate more on the But this is not the end- concentrate more on the

identified issues

Difficult to Proper Solution of identified issues-

qualitative factors, a continuous process.

Always be prepared to solve the new areas for

FEIVD’s efficient functioning.

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Recommendations Recommendations

To overcome the identified problems, the following issues could be considered-

  • Training - Monitoring
  • Accountability - Multi disciplinary team
  • Proper Job management - IT based knowledge development
  • Meeting within the departments
  • Meeting within the departments
  • Encourage self development of employees
  • Communication- CB’s customers
  • Central Data Receiving System

Powerful Committee # Further in depth study on identified issues # Solve the identified problems continuously of the changing banking industry

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END END

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