ICAB calls for better execution of IFRS 9 in banks

Experts have underscored the need for robust modelling, reliable data, and strong coordination between risk and finance functions to ensure the proper implementation of International Financial Reporting Standards (IFRS) 9 and restore confidence in the country's banking sector.

They said building technological resilience, reinforcing governance, and investing in data infrastructure would not only help banks ensure compliance but also strengthen their overall financial and operational sustainability.

The observations came at a webinar, titled "Implementing IFRS 9: Global Insights and Bangladesh Perspectives", organised by the Institute of Chartered Accountants of Bangladesh (ICAB) today, according to a press release.

Muhammad Mehedi Hasan, vice-president of ICAB and partner at Rahman Rahman Huq, Chartered Accountants, chaired the session.

One of the key challenges discussed was the lack of empirical data. While default data is often available, recovery data remains limited, which restricts the accuracy of models and slows down the implementation process of IFRS 9.

Another major challenge lies in incorporating forward-looking information, as many banks lack sufficient historical data to differentiate scenarios or make reliable probability-weighted estimates.

Experts noted that the weak correlation between macroeconomic factors and default rates further undermines predictive modelling.

Md Kabir Ahmed, deputy governor of Bangladesh Bank, attended the webinar as the chief guest, and said the implementation of IFRS 9 represents a paradigm shift for an emerging economy like Bangladesh, which has a dynamic and growing financial sector.

"It enables financial institutions to be better prepared for potential future losses and more resilient to economic shocks," he added.

ICAB President NKA Mobin said the adoption and implementation of IFRS are not merely compliance exercises but cornerstones for enhancing transparency, strengthening financial stability, and fostering investor confidence.

"As the core and most relevant professional accountancy body in Bangladesh, ICAB considers it a sovereign duty to lead the discourse, build capacity, and facilitate a smooth transition to these global benchmarks," he said.

Rajith Perera, partner at Ernst & Young and risk management leader of the Institute of Chartered Accountants of Sri Lanka, and Sk Ashik Iqbal FCA, partner at Nurul Faruk Hasan & Co, Chartered Accountants, presented keynote papers.