Prime minister's Adviser on Economic Affairs Dr Mashiur Rahman today said it is now time for Bangladesh to implement standards of the Basel-II to minimise banking sector's risk.

It will help reduce the internal risks for well functioning of the banking sector in the time of global financial meltdown, he said.

"The Basel-II will help identify the risky lending areas and minimise those risky areas of the banking sector," Mashiur said.

He said the depositors always want to know which banks are the best in transactions. "It is the regulator's task to identify the problems of banks and tag which bank is the best in transaction," the adviser said.

Basel-II will help find any problems in banking transactions, he added.

Basel-II is the second of the Basel Accords, which is a set of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision.

The purpose of Basel II, which was initially published in June 2004, is to create an international standards that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face.

Mashiur was speaking at a seminar on "Basel-II and its implications for Bank Capital Raising" at Sonargaon Hotel in the city as chief guest.

The World Bank and the Citibank NA jointly organised the day-long seminar where a significant number of managing directors, chief executive officers and banking sector high-ups attended.

At the inaugural session of the seminar, Xian Zhu, country director of the World Bank in Dhaka, said compared to Basel-I, the scope of application in Basel-II is broader.

"Supervisors also need to ensure that individual banks within the group remain adequately capitalised on a stand alone-basis. Significant minority investments would either be deducted from equity or consolidated on a pro-rata basis," Zhu said.

"I would like to emphasize that the challenges of implementing Basel-II are heightened in turbulent financial markets, and this transition must be managed carefully to mitigate any unintended effects," he said.

He said the Basel-I capital accord, published in 1983, represented a major breakthrough

In his speech, Daniel McNamara, Citi's Asia Pacific co-head of investment banking said, "Citi is humbled to be a part of such an important initiative and we are committed to the mobilisation of our global resources to facilitate transition of the banking sector of Bangladesh into Basel-II."

Mamun Rashid, managing director and Citibank NA, Bangladesh, said implementation of the Basel-II is needed for a better and transparent tomorrow.

"If we can implement the standards of Basel-II in the banking sector we will get more accountable Bangladesh," Rashid said.

Faruk Ahmad Siddiqi, chairman of the Securities and Exchange Commission (SEC) among others spoke at the seminar.