Over the years Sangita Ahmed has been involved in various fields in Bangladesh’s diverse business stratosphere. She has worked as a development activist, newscaster, writer, social entrepreneur and businesswoman. She is currently a Director at the Agrani Bank Limited before which she served as a Director at the Janata Bank Limited. Sangita also works as an English Newscaster for BTV. In the food business, she has worked as the Managing Partner at The Sky Room Dining Ltd and is currently the Managing Partner of the popular eatery, Time Out. She has also worked on women’s economic empowerment during her time as a President of the Bangladesh Women Chamber of Commerce and Industry.
The Bangladesh economy is at a transformational stage. The use of IT and the internet has revolutionized how we’re getting our services. At the same time, our country was the victim of a massive cyber security heist. What are your thoughts on these trends?
As a growing economy it is great to see consumers in Bangladesh moving their shopping and buying activities to online platforms through smartphones and computers instead of visiting shops or physical facilities. This can be especially beneficial for women entrepreneurs for whom travelling outside their homes is difficult.
We have moved past the Bangladesh Bank heist and focus on mitigating fraudulent cyber security issues so similar incidents do not occur in the future. In order to keep in pace with modern banking practices we need to improve information sharing among the global financial community. We must tighten the security on customer-managed software to better protect their local environments, enhance our guidelines and develop security audit frameworks for customers. A strong support is required in the banks’ increased use of payment pattern controls to identify suspicious behavior. The introduction of certification requirements for third party providers is also another security measure that needs to be in place.
You have been with the Janata Bank and now you are a Director at the Agrani Bank Limited. What are the main challenges faced by state-owned commercial banks? What is being done regarding these challenges?
Banks, particularly state-owned commercial banks, are facing rising volumes of Non-Performing Loans (NPLs). This is taking a toll on the capital adequacy and profitability of banks. Non-performing loans, coupled with the lower demand for loans by prospective customers has affected the profitability of most banks. Though we offer banking services to remote areas all over the country through our 935 outlets, large sections of people still remain outside the purview of banking services. We are continuously trying to reach out to this unbanked population of our country. At the same time, we are identifying good borrowers in the productive sectors of the economy who can boost our Advance Deposit Ratio while reducing our NPL by recovering classified loans and raising low cost deposits. The main objectives of state-owned banks is to increase low cost deposits, ensure better customer service, increase the perimeter of customers and focus more on supporting small businesses with SME loans. Taking the bank to the doorsteps of the rural non-banked population, women entrepreneurs, poor farmers and low income groups are some of the steps we are taking to improve banking services.
“Technological innovations will be required which can completely nullify all forms of digital
threats and only then can we envision a future where paper money will become obsolete.”
At this stage of globalization, how do you plan on coping with changing banking policies?
The core banking policy of the bank is to operate the affairs of the bank through core banking software (T-24) & WMIS system and the bank has been able to do this to a great extent. Digitalized banking products like plastic card banking and mobile banking have become popular recently. However, the full utilization of Core Banking Solutions including mobile banking and agent banking may change the vision regarding how the bank will move forward.
Word has it that in time plastic money along with other transactional methods will entirely replace cash transactions. What are your thoughts in this regards?
Plastic money along with other transactional methods can replace cash transactions. Nevertheless, for this to work, users will need 100% assurance regarding cyber security issues from the banks. Technological innovations will be required which can completely nullify all forms of digital threats and only then can we envision a future where paper money will become obsolete. Infrastructure relating to IT security and zero downtime must be ensured.
What is your Corporate Social Responsibility policy? How do you contribute through CSR in respect to Global Social Responsibility?
According to the CSR policy of the bank, we must build a society where human dignity and rights receive the highest consideration. Though we have not directly contribute to global social responsibility, the bank through its CSR has contributed to the MDGs set for Bangladesh.
These policies also include promoting a ocially-responsible-environment-friendly atmosphere in Bangladesh through green financing.
There are Nonperforming Loans and at the same time, the interest cap is very high. How will this affect competition?
The NPLs reduce the bank’s earning assets, while, if the interest cap is high, it may create low credit demand thereby affecting the bank’s profitability. So, high NPLs and high-interest caps both result in the bank lagging behind competitively. While these are challenges, it is important to work with the current realities and focus on finding good borrowers who have a proven track record of running a successful business and assist them to grow further. Good borrowers command better interest rates and can be accommodated with the rate caps but are expected to pay their debts as per the terms and conditions which will have a positive impact on the competitive environment.
What are your thoughts regarding risk management? What are the challenges in this respect?
Risk management is a continuous process to safeguard against potential risks. The challenges concerning risk management arise from AML & CFT foreign exchange, internal control and compliance, information & communication technology, reputation, liquidity & credit management, market & interest rate management and environmental & climate change management. We intend to enhance our capital base in line with the Basel III regime which will enhance our capability to withstand capital shocks in case of stressed situations.
