NRB Bank Limited has planned to set up more than 300 agent banking outlets across the country by 2019, aiming to bring the unbanked people in the banking network, the bank's top executive has said.
The private commercial bank (PCB) has already included its name in the list of agent-banking banks of Bangladesh through launching 'Bandhu', an agent banking initiative.
Mehmood Husain, Managing Director and Chief Executive Officer (CEO) of the fourth generation bank, had introduced the agent banking business for the first time in Bangladesh in 2014 when he was the President and CEO of Bank Asia Limited.
The senior banker still believes the agent banking initiative helps minimise the social inequality through empowering particularly the small and vulnerable income groups.
"The banks with their agent banking units may collect core deposit from the general people particularly of rural areas by offering comparatively lower interest rates," said the CEO, explaining the benefits of the banks.
It also helps mobilising substantial amount of low-cost or no-cost deposits, increasing inward foreign remittances and channeling micro and agriculture loans, according to the senior banker.
In an exclusive interview with the Financial Express (FE) recently, Mr. Husain also said the NRB Bank had started its agent banking operations with the state-of-the-art technology for ensuring proper security with real time banking facilities.
A total of 20 commercial banks have already taken agent banking licences from Bangladesh Bank while 18 of them are operating across the country at present.
On the other hand, the NRB Bank has also planned to increase its financing in retail and small and medium enterprises (SMEs) for minimising risks through diversifying portfolios by 2020.
Under the NRB Bank's new plans, the investment in SMEs is expected to reach 30 per cent of the bank's total loans and advances within next three years from the existing level of 15 per cent.
"We're also emphasising on retail banking operations that will reach 20 per cent by 2020 from the existing level of 14 per cent," said Mr. Husain, sharing his future plans for boosting financial health of the PCB.
He said the bank is set to bring down its investment in corporate entities to 50 per cent from the existing level of 68 per cent as per a three-year strategic plan.
The new generation bank has taken the strategy to ensure sustainable and quality growth by adhering to compliance in all spheres of its operations, and perusing multiple sources of revenue.
"We want to ensure prudent lending, mobilise deposits from retail investors, diversify loans to MSMEs and other good creditworthy enterprises, and deliberately keeping foreign exchange exposure at a manageable level," the CEO added.
The NBR Bank has already introduced debit and credit cards as part of digitisation of its operations by using modern and world class digital technologies.
"We're now working with different FinTech providers to go for digitisation gradually instead of existing brick-and-mortar infrastructure of the country's banking system," Mr. Husain explained.
FinTech is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services using smartphones or internet.
"We believe that technological sophistication is the precondition for attaining comparative advantages in the age of today's modern and highly competitive banking arena," noted the banker having 35 years of experience in the industry.
NRB Bank is now strengthening its both credit and debit cards business, aiming to attract more clients through providing better services using latest technologies.
The bank's CEO expects that the number of live credit cards will reach 35,000 by the end of 2019 from the existing level of 20,000 which was only 7,600 a year ago.
"The use of plastic money is increasing gradually in Bangladesh," Mr. Husain said, adding that educated young people is the prime user of such digitised products.
The fourth generation PCB is also committed to facilitate the Bangladeshi Diaspora to invest in Bangladesh and Bangladeshi individuals to get access to the international market.
"Shortly we are going to establish a dedicated desk for NRBs to counsel them regarding investment opportunities in Bangladesh," Mr. Husain noted.
NRB Bank Limited is committed to unlocking a new horizon to the country's economy by facilitating non-resident Bangladeshis' (NRBs) investment in Bangladesh.
"We're committed to unlocking a new horizon to the economy by facilitating NRBs' inward investment to Bangladesh and assisting Bangladeshi enterprises to access to international markets," the CEO explained.
The NRB Bank is also working for creating confidence for investment among the Bangladeshi expatriates offering desired services, attractive profitability and secured investment through various financial products, he added.
The senior banker also spoke on different issues like rising trend of classified loans, sluggish growth of deposit and future liquidity situation in the country's banking system.
He recommended taking coordinated efforts to reduce the volume of non-performing loans (NPLs) for improving the financial health of the banking system.
As part of the efforts, a separate bench of the High Court should be established to deal with only the default loan issues, in addition to setting up of multiple Money Loan Courts in Dhaka and Chittagong.
Besides, legal reforms are needed to speed up the recovery process of the classified loans, he said.
"The functions of Artha Rin Adalat (Money Loan Court) should be strengthened for settling the cases within the shortest possible time," the CEO added.
The senior banker also advised the banks to boost their recovery drives across the country to reduce the volume of NPLs. "It should be stopped to turn fresh loans into classified ones under any circumstances."
Also, the banks should refrain from aggressive lending through compromising with its due diligence process in a bid to quench their thrust for profit.
The amount of classified loans in the country's banking sector jumped by more than 20 per cent to Tk 893.40 billion as on June 30, 2018 from Tk 743.03 billion as on December 31 last year. The amount of default loans was Tk 741.48 billion a year before.
Regarding implementation of the revised advance-deposit ratio (ADR) rules, Mr. Husain, a member of governing body of the Association of Bankers, Bangladesh (ABB), said lower interest rates on deposits along with policy supports of the central bank will help implement the rules within the stipulated timeframe.
The banks' net investment in the subordinated bonds will be considered as deposit while calculating their ADRs as per the revised formula, issued by the central bank recently.
"Lower demand for credit ahead of the national election has also helped implement the revised ADR rules," he said.
The credit growth to the private sector came down to 14.67 per cent in September 2018 on a year-on-year basis from 14.95 per cent a month ago. It was 15.87 per cent in July 2018.
Earlier, the central bank had extended the deadline by three more months to implement the revised limit of ADR by the banks.
Under the extended timeframe, the banks having ADR above re-fixed limit are allowed to implement the revised limit of ADR by March 31, 2019 instead of December 31, 2018 earlier.
The ADR has been re-fixed at 83.50 per cent for all the conventional banks and at 89 per cent for the Shariah-based Islami banks. The existing ratios are 85 per cent and 90 per cent respectively.
