Getting a detailed view of unknown banks

M S Siddiqui | Published: April 06, 2017 19:11:33 | Updated: October 17, 2017 05:08:44

Stakeholders at home and abroad need information from a third party about the standing of banks for safety of their transactions. Bankers' almanac is one of these important sources of information or data on payments, compliance and risk assessment. It proactively collects information directly from banks and primary sources, providing accurate and comprehensive intelligence. It contacts and communicates with various national authorities, as well as associations, clearing houses, and financial institutions for updating and verification of the information that can be consistently relied upon. The almanacs are the leading sources of intelligent reference data for payments, compliance and risk assessment.
In the current banking environment, financial institutions (FIs) are operating under rigorous global and local compliance requirements, established by their national, state and internal regulators. Policies concerning customers, regardless of the types of services that are being provided, have become increasingly important globally to prevent theft, fraud, money laundering and terror financing. The 'customer due diligence' is not just a form-filling exercise --- it is a process that continues from the start of a customer relationship up to the end. The Banking Almanac service supports the FIs in achieving compliance requirements.
Lately, money laundering and terror financing constitute major  threats to global financial system. The requirement for Anti Money-Laundering and Counter Terrorism Financing (AML/CTF) measures is rationally warranted, since overseas banks, insurers and export credit agencies are increasingly demanding that customers provide detailed anti-corruption 'due diligence information' in order to verify their probity and integrity.
The FIs are involved in global financial system. When a FI has decided to work with a bank, it needs data on the latter's location, registered address, contact details, senior personnel such as board members and compliance officers, and other senior people they may need to contact. The bank will need to look into the financials, performance, auditor's reports and regulatory information. The FIs want to know who they are dealing with when conducting the Know Your Customer (KYC) and 'due diligence' on the correspondent banks. The Bankers' Almanac is a source for 'Risk & Compliance'. The almanac can be found virtually in every major financial market. It provides detailed information on financial institutions around the world and enables banks to confidently manage counterparty risk decisions.
Bankers' Almanac offers an independent source for global intelligence on financial institutions allowing the members to improve their operational efficiency while making more informed decisions about their correspondent banks. It provides comprehensive financial data and intelligence on banks, enabling stakeholders to accurately assess counterparty credit risks. It may also maintain records of credit rating by globally reputed agencies with analysis of credit trends and counterparty credit risks for investors and opinion on the relative ability of an entity to meet financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims etc. 
There may be different opinions of the credit quality of individual obligations or of an issuer's general creditworthiness, without respect to individual debt obligations or other specific securities.
The almanac may have information on financial spreads on banks and financial institutions; financial statements; bank personnel etc. It maintains the detailed bank history, including the date of establishment, and information on mergers and acquisitions; bank ownership and group structures; bank branch networks; bank financials; and mergers and acquisition details. The documents contain copies of banks' key documents including licences, articles of association, anti-money laundering controls measures, annual reports etc. It reduces the burden that banks face when conducting Know Your Customer assessments on their counterparties.
It may include some relevant documents such as Certificate of Incorporation, Current Banking Licence, Address of the Head Office, Details of Subsidiaries, Latest Annual Report, Names and Brief Background of Key Personnel - Board of Directors, Chief Executive and Chief Financial Officer,  Information on the Ownership of the Applicant Bank including names of any stock exchanges on which it is listed, Information on Corporate Governance including Articles of Association or Company By-laws, Name of the External Auditor etc.
The almanac may contain an overview of the products and services the FIs provide to its customers.All the data is held in one place in a standardised format linked directly to each FI's web page. This makes it useful in reducing the overhead involved in sending out and responding to multiple requests from banks for 'due diligence' information.
Some almanacs are manually produced physical reports. Most of them have started to collate and store their information online. Currently, they have built their own in-house systems to track workflow and monitor everything that users are doing. These almanacs do have an audit trail, so they can see who has done what and why certain decisions were made in the past. But these systems are costly to create and maintain and do not help with the wider data issues. 
It is to be noted that Bankers' Almanac data is not judgmental; it doesn't judge whether a bank is good or bad, it just provides the data for customers to use in their own compliance activities. Nor can a Bankers' Almanac always be comprehensive-because not every bank is willing to share everything. But the Bankers' Almanacs will tell that this is the case, which may be vital information in itself. They try their best to provide updated data to the service users.
One of the Bankers' Almanac is BANKERSalmanac.com. It is a major database from Reed Business Information in the UK.   It has been serving the sector for over 150 years. It works as the definitive directory of the world's banks, used extensively by professionals in the banking market and other financial service sectors.  This website contains a fully searchable database to over 27,000 banks from 200 countries worldwide.  There is in-depth information on 4,500 internationally trading banks, over 36,000 contact names plus a ranking of the top 3,000 banks in the world.
The Bangladesh Banking Almanac has recently been published with active support from the Bangladesh Bank. It contains structured information about all the banks and financial institutions in the country. The Board of Editors of the Almanac include: Dr Salehuddin Ahmed (Chairman), and Dr Hossian Zillur Rahman, Dr Khair Jahan Sogra, Md Narul Huda, Mahammad Nurul Amin, Liaquat Ali Choudhury, Md Amanullah and Mominul Islam as members. The Project Director is Abdar Rahman and the Executive Directors are Syed Zia Uddin Ahmed and Mohammad Emdadul Haque. The users of the Almanac are expected to have confidence in the relevant data due to the involvement of renowned personalities in the domestic financial sector, economists, academics and eminent researchers with this venture. It has got a lot of significance thanks to the  involvement of Dr Hossain Zillur Rahman, the renewed economist, Fazle Kabir, Governor of Bangladesh Bank, and Dr Salehuddin Ahmed and Dr Atiur Rahman, former Governors of the Bangladesh Bank.
The Almanac is full of information about the FIs in Bangladesh along with some standard information. It could be improved with the related information such as credit rating, compliance, more details on overseas branches, overseas investments, subsidiary organisations, names of stock exchanges where they are listed, details of financial statements and overseas correspondences etc.
The Almanac is likely to emerge as a useful document for all the stakeholders and researchers. The price of Tk 1,000 is quite high, because such almanacs in other countries offer their services for small fees. Some of the information are free of charge as they are found on their webpage.
Bankers' almanacs must have their online portals. The users, particularly those overseas, look for online services. The print version may not reach all the stakeholders in different parts of the world. There is another advantage of the online version: the information may be updated from time to time. 
As per newspaper reports, some of the newly established banks of the country have yet to have correspondent banks in some markets; even some of the overseas banks in the New York financial market are not willing to open or maintain foreign currency accounts of these newly set up banks. The 'Banking Almanac' may be a source of KYC information for overseas banks, as they can assess the credentials of these banks through it.
Banking Almanac 2016 is a well edited and useful document for all kinds of users. To prove its effectiveness, its publication ought to be regular with special emphasis on updated information. An online version will definitely add to its importance.
The writer is a Legal Economist.

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