Promisingundertakings at ICAB
*NKA Mobin talks rebranding and digitization
The groundbreaking strides that the Bangladesh economy is making has opened the floodgates for innovation, welcoming the age of automation into our industries. As one of the newly elected Vice Presidents of The Institute of the Chartered Accountants of Bangladesh (ICAB), NKA Mobin FCA, FCS encourages automation for our economy to maintain its stupendous growth. Along with his responsibilities as Vice President of ICAB, Mr. Mobin is also the CEO and Managing Director Sponsor Director of a Credit Rating company firm named Emerging Credit Rating Limited (ECRL). He is also one of the sponsored Directors of this company established around 10 years back with his more than 25 years’ of working experience in 4 multinational companies namely Swedish Match, Novartis Bangladesh, KAFCO and lastly in Grameenphone Limited. His primary responsibilities as Vice President of ICAB will include overseeing the education and training of the enrolled students and also the members. Mr. Mobin explains, “When you become a member there is a process of continuous development, as professional members they need continuous update on the professions, so we do a lot of trainings and workshops on the current and professional issues.”
ICAB is gearing up to attract more prospective Chartered Accountants (CA) into the platform. In light of this initiative, the profession is being rebranded as a dignified one for aspiring chartered accountants. The first step of the process has already begun, with the launching of CA Bangladesh. Ongoing efforts are being made to improve relationships with all stakeholders, notably Security & Exchange Commission, Bangladesh Bank, Ministry of Commerce and Ministry of Finance, as well with all notable educational Institutions and the media and leading newspapers of the country.
Currently the market for chartered accountants in Bangladesh is facing a scarcity of fully qualified members. With the number of semi-qualified students totaling at 150,000, the market has an available resource of only 1,800 fully qualified students, while the requirement stands at 18,000 to 20,000 creating a massive vacuum which is being readily occupied by an influx of chartered accountants from outside. Expounding on the matter, Mr. Mobin says, “we really want to promote this profession and explain to students the benefit that awaits them, for which we are doing many roadshows in campuses.” Apart from promotional roadshows, ICAB has signed an agreements with the Accounting and Finance Department of Dhaka University, Jagannath University, Jahangirnagar University, BRAC University and some other well-known Colleges, under which syllabi material has been matched so that students graduating from those discipline will leave with a good amount of chartered accountant credits under their belt, reducing the amount of papers needed for completion of a complete accreditation CA degree as an ACCA. Similar collaborating agreements are being broached with IBA and, AIUB whereby students will receive partial CA credits under their MBA program.
Efforts are being made to reform ICAB’s in-house facilities with a focus on increasing organizational efficiency, and proper management and grooming of current employees and trainees, as well as providing robust IT-based solutions for their members. Mr. Mobin explains as an example, “They don’t need to come to the institute and pay a fee or attend lectures (both in classes and in a seminars) physically since we are looking into digitalization.” Along with in-house improvements and upgrades, ICAB has garnered promising international affiliations with Institute of Chartered Accountants International Charters of England and Wales (ICAEW), CPA Ireland and CIPFA, UK. Similar affiliation with CPA Australia is at its final stage. With a syllabus that is internationally recognized, students are given the lucrative incentive of international recognition and membership by only appearing in a mere 2 or 3 papers.
“With a standardized syllabus, we’ve also made good reading materials for students along with good library facilities,” says Mr. Mobin. Further iterating he says, “We are supporting in terms of providing class facilities, employing quality educators both from within and outside our members, reading materials (ICAEW study materials) and library facility which is open till 10.00 PM and also during the weekends.” Emphasizing on the need for chartered accountants, Mr. Mobin stresses that around 50% of the current ICAB council is made up of new generation, which highlights a promising scope for transformation, branding and digitalization. Pinpointing members’ problems and taking people who are caught in between and offering them a solution, and expanding the profession and garnering international recognition is the bright future ICAB is striving for.
SHEDDING LIGHT THROUGH CREDIT RATING
Speaking as the CEO of Emerging Credit Rating Limited (ECRL), Mr. Mobin touches on the topic of credit rating in Bangladesh. Explaining his responsibilities as a credit analyst, Mr. Mobin says, “Audit report is always for the past, but we use the past as a reference to project the future.” ECRL has been operating in the market for the past 10 years with no signs of slowing down. Having already completed around 14,000 credit ratings assignments, the well-established firm has an impressive 4000-5000 clients across various industries under its wing at present.
The company is licensed by Bangladesh Securities Exchange Commission (BSEC) for doing rating assignments on Shares and Securities in the Capital market. The company then got accredited by Bangladesh Bank to carry out bank audits and its corporate borrowers’ rating audits, and they are also accredited by Insurance Development Authority (IDRA) to do the rating audit of insurance companies. ECRL is responsible for monitoring these fronts and reporting to these government organizations. They are also a part of Association of Credit Rating Agencies in Asia (ACRAA), which was created by Asian Development Bank, and through that ECRL has established connections with more than 30 rating agencies in 28 countries.
In terms of company they are a highly regulated one, with technical collaboration with Malaysian Rating Corporation named MARC companies as well. Reports are approved by rating committees which is comprised of both externals and internal auditors’ experts. Mr. Mobin explains, “Credit rating companies in Bangladesh are mostly all following the international standards and best practices as they have customized methodologies brought from international agencies under technical collaboration as per law.”
With business houses realizing the need for credit ratings, there has been a shift from the initial hesitation to a full-fledged acceptance of the system. Mr. Mobin says, “All organizations know that they need a report from the bank to get the approval of the loan. We haven’t had a remarkable success in the compliance area but we’ve done a lot of improvements, especially in the stock market.” Bangladesh’s BB- or Ba3 Sovereignty conferred by all 3 big International Rating agencies, Moody’s, S&P and The Fitch Rating, has encouraged international trade and pricings, loan approvals and import transactions. “Bangladesh’s economic trend is very good; its GDP growth is over 7%, and Bangladesh up until now never defaulted in any payments,” Mr. Mobin comments, further explaining, “the government is a very good pay master. Every obligation the government has in terms of international loans the government fulfills its responsibilities, which is what contributed to our Ba3 rating.” Bangladesh staunchly maintaining its rating makes it promising from a business aspect and especially for economic development.
Highlighting the challenges of the private banking sector, Mr. Mobin notes that the number of outstanding/default loans are increasing and so are the number of defaulters. He suggests, “The financial systems really needs to be reshuffled,” and is hopeful for the modification of banking company laws to tackle the upsurge in loan culture. The optimistic CEO explains, “If proper action is taken by the banks or the regulator including the concerned finance minister based on ratings and certain other information and criteria like what Bangladesh Bank is doing for a lot of audit and surveillance, then the whole financial system will be better.”
National Board of Revenue should be more focused on automation, so they can control the revenue aspect which is the heart of the economy. If there is an impact on the revenue, either by lower collections then it leaves an impact on the financial markets. If we get revenue properly through NBR then the financial market will be less touched for the development of the country. Therefore, the government would really put more attention on the NBR (revenue collector) side, invest in scaling automation so tax cannot be evaded.
Mr. Mobin harks backs to the new VAT Act which was about to be implemented two years back and was to be a completely automated process. He urges, “That kind of automation should be not only on VAT side but also on the income tax side, and also on the customs side.” While automation is an inescapable reality, there are portions of the organizations that are embracing it while other departments are buckling under a paper pile. The communication gap has to be mended and bridged. “Automation shaking hands with various systems has to happen, and people nowadays are more compliant because of automation. Once automation is in place, people will have to comply,”
The Bangladesh economy is on a trajectory of unprecedented growth. In order to sustain this momentum Mr. Mobin says, “We need automation to control the economic growth, otherwise we won’t be prepared for an unforeseen disaster.” Our stock market has been regulated and brought under much needed control. “Since I am attached to the financial market area,” Mr. Mobin states that “the government should invest in automation and more compliance,” so that they can control the economy in a better way, and run it more efficiently and make it bigger. We have a Finance Minister who is an experienced Chartered Accountant and I am extremely hopeful for a much better and controlled economic development in next 5 years under his leadership as the country’s supreme financial management boss”