Abstract:

The Global financial crisis of 2008 turned the world’s largest economies of Europe, USA & Japan, into turmoil. This forced the financial experts to seriously think about further improving the transparency in the prevailing financial regulations. In-time, coordinated response from G-8, & G-20 countries to combat the situation had not been observed before. Emerging and Developing Economies (EDEs) specifically India, China, Pakistan and the least developed economy of Bangladesh has survived the ambush of this financial crisis. This also justifies a debate that the Regulations alone are not sufficient to guarantee that breakdown of financial sector will not occur”.

This paper endeavors to address  the following issues because these are the  major hindrances in the development of prudent financial regulations for developing economies.

• The Improvement in Securities markets.
• Advances & Credit Risk classifications.
• The Non-Performing Loan (NPA) because it hampers the financial system in EDEs.
• Interest policy on Nonperforming loans.
• The imposition of exposure limit to the borrowers.
• Vigilance on the Directors lending and their vested interest.
• Strengthening the role of ALM committee.
• Proper financial disclosures and its presentation in accordance with the IFRS.
• Establishment of Proper Risk Management functions.