Bahrain banking group fears deficit
Manama, March 12, 2011
The Bahrain Association of Banks (BAB), a professional group of banks, is failing to achieve what it could because of financial constraints and could even end up running a deficit this year, said its chairman.
The association should be offering a wider range of services to the industry and doing more to promote Bahrain as an international financial centre, said BAB chairman, Abdulkarim Bucheery, who is also chief executive officer of BBK.
Only 20 per cent of financial institution in Bahrain were members of the BAB, he added.
In most Western countries membership of a bankers association was almost compulsory and associations received massive support from the entire industry, he argued.
"I do not believe we are offering as much as we should be to date because of financial constraints but we are playing an important role albeit a smaller role than we would like," he said. "Without that support of all the banks we cannot do the job properly and we do not have the full support of all the banks.
"Our most important objective is to showcase Bahrain as a financial hub and as the financial capital of the Middle East which will work well for the whole of the country. We also need to take part in conferences that are good for promoting Bahrain. And offer networking opportunities that will expand deals across the industry."
Bucheery said the BAB worked as an intermediary between the Central Bank of Bahrain (CBB) and the industry.
"We meet on a regular basis with the CBB governor on a wide range of issues and we have a voice to raise issues with the governor," he said.
"We initiate plans that could be of service to the entire banking industry. We are currently working with the CBB to try to set up a web page addressing the Bahrain Inter Bank Offer Rate. We are also working with the CBB to create a customer mediation centre for the banks. Some of these are big issues that will take time."
He said that at present customers with complaints go to their bank and if they do not get satisfaction to the CBB.
"Customer complaints are not the primary role of the CBB as it has far more important roles that are crucial to the wellbeing of the system," he said. "This is an area where we could set up an arbitration service for the industry so that all the banks could then provide an even better service to their clients.”
"These are examples of how we can provide a better service to clients but there are other areas where we could do more.”
"During the current political instability we were able to bring together bank chief executive officers to brainstorm and exchange experience and speak to the authorities with one voice. We would also like to work with traders' committees to address issues they have. Finance is after all the largest contributor the gross domestic product of the country, so the banks should all be working to strengthen the position of the country's key industry,” he added.
"By offering a fuller range of services and promoting Bahrain more strongly internationally, all banks benefit.”
"Unfortunately, at a time of tight budgets some banks find it easy to cut costs by not registering with the BAB and thus saving BD2,000 ($5,300) to BD3,000 a year. That is short sighted and restricts the BAB from offering the level of service to members and to the industry which is needed for an international financial centre," he claimed.
"Financial constraint and a lack of industry support is holding us up in building up the kind of cadre that can include specialists to provide services," Bucheery concluded.
"We recently appointed a money laundering expert and that is clearly something that can benefit the entire industry, but we need more specialists and we cannot do that without stronger financial support." – TradeArabia News Service