Q/ Congratulations on joining MTB! What are your short-term and long-term goals for MTB? And how do you want to achieve those?
A/ There are a few goals. To start with, I am putting importance on the Human Resources as they are the ones who will implement the changes that are required by the bank and deliver the services. We have to work as a team. So, that is the first thing I am trying to fix, by identifying resources within the bank, and according to the strengths, I will take action. The second thing is, because this is the 4th Industrial Revolution, I am trying to prepare this bank in that direction. If we do not embrace technology, we will fall behind. There are 59 banks, a bit too many for a country like Bangladesh. Imagine a few more joining the league and everybody is selling the same thing. So, unless you have a significant Unique Selling Proposition (USP), you will not prosper. Since MTB is not a leader in the banking industry, we need to have something which will help us in terms of leapfrogging. That is basically my mid-term goal. We need to see the results as well. We also need to make the entire process very efficient because our costing percentage which is around 52%, is very high in terms of the industry. We have to be leaner as well. Adding to that, we aim to reach out to the remotest possible areas to provide solutions to the unbanked population via our agent banking. We are also setting up a number of Sub Branches, which I think is a very good initiative, thanks to our Central Bank, which can help us in terms of mobilizing the projects from a rural area or suburban area. If we follow the brick and mortar model, we will need to spend a lot of money, but this Sub Branch system requires less and is safer than agent banking. We are launching our Islamic Banking Window very soon. We have obtained permission for fifteen (15) Islamic Banking Windows because this is a Muslim country. This is one area we have not been able to get into, so I think this move will help us capture a significant demography of the population and add a new momentum in our journey.
Q/ What is your take on the condition of skilled manpower in the banking industry?
A/ I must say, that it is a very concerning area. For any institute to succeed, two kinds of capitals are needed. One is the financial capital, which may not be hard to mobilize. The other one, human capital, requires time to build and the process is very difficult. If you look at our educational system, in many ways, it is not geared towards addressing the current needs of the job market. After the colonial system, the way things shifted, we have not seen that much of significant change that are required. There is a huge industry-academia gap and that is true for not only banking but for all other industries. Every year, we see about 2 million plus people joining the job market. At the entry level, there is no issue; once you release a job posting, many turn up for interviews. But if I go slightly higher, to perhaps one or two levels, then I find the candidates to be not so satisfactory. Since in a bank we deal with people’s money, we need to have people who are better than the average industry standards. Like others, MTB provides training to groom new and old recruits. But are those enough to enable our workforce to combat the challenges of the 4th Industrial Revolution? Time has come to flag the topic and take measures accordingly.
Q/ If we look back, you are renowned for ushering in a new era in Dhaka Bank with the Go app. Do you have any such digital aspiration for MTB?
A/ Simply put, we need to improve the customer experience. We are looking at banking made easy in a digital way; starting from opening accounts to daily transactions to processing of loan applications – the aim is to improve the overall response time. We have plans to launch an app where loan applications can be approved in a day or two. Yes, we will get the documents later, but the moment you submit the documents, the algorithm will generate a ‘yes’ or a ‘no’ answer based on those. On the trade finance facility as well, we want to improve the customer experience. Besides, we are already working with chat bots, which we expect to launch in 2-3 months time. We are also trying to do CRM, in terms of understanding customers’ overall lifestyle, and then accordingly come back with a product. I do not want it to be supply-driven, it should rather be demand-driven. So understanding the customer with better analytics and coming up with tailor-made products are my current aspirations with MTB.
Q/ What is your take on the current situation of agent banking? You were saying there are certain challenges associated with it. How do you look at it?
A/ In case of agent banking, since its inception, we have not seen any fraud. Agent banking is basically banking managed by a third party. My bank’s logo and brand image are used, but there’s always a risk. Another thing is, with agent banking we have more than 6000 crore taka plus, through all the outlets. There is criticism that we are mobilising deposits from rural areas and investing in urban areas. This is true to some extent. But you will see that banks have already started extending loans in the rural areas. It takes time to understand the market and risks involved, and then you can lend. I am sure very soon you will see loans in the rural area will increase. At the end of the day, we need to ensure that the money we are taking will be given back or given to the customers, our depositors. So I need to ensure that my investments are good as well, where quality is a concern. There are a lot of opportunities in the remote areas that are hard to access; agent banking can do good there. The same can be said about the distribution of remittances, that is playing a vital role. One thing is, when we are offering agent banking, the agents are the individuals. We have not seen corporates play any significant role. For example, in some countries the corporations are the agents, but here, we are still relying on individuals like you and me.
Q/ For the overall banking sector, how do you think trust can be brought back?
A/ I do not think trust is an issue. If there are any such issues, you would have seen run on in the bank, which has not happened. Perhaps, in cases of one or two banks, you have seen unwanted situations unfolding. Otherwise, if you look at the entire banking industry we have not seen degradation. That is because of the prevailing trust. This might sound cynical but yes, people are talking about banks in Bangladesh; except for the bankers, everyone else is an expert on banking.
There was no liquidity crisis as such, if you look at the AD ratio, overall I think it is about 77. Therefore, instead of liquidity, it is more of a distribution issue.
Q/ What about revising the recent monetary policy that allowed the government to borrow more from the banks?
A/ We can see that government is borrowing heavily from the banking sector. Like their target for the fiscal year ending June 2020, was BDT 47000 crore and they have already borrowed more than BDT 50000 crore. This is mainly due to the shortfall in Tax Revenue by more than BDT 20000 crore in the first four months of the fiscal year. Efforts are being made to reduce the interest rate to a single digit to augment domestic investment. But if the Government keeps on borrowing at this rate then there could be a crowding effect, which is a little concerning, and banks will not be able to meet demand for loans, thereby the ultimate objective of single digit, pushing credit growth, may not be achieved.
There is another side of the coin. Think about the senior citizens who keep their money in banks in the form of fixed deposits. For these people, who have no other earnings, the real income will go down. There could be a likelihood that people may take money out of the banks and invest in properties, buying gold and other things. A lot could happen. We might see money coming out of the formal sector also. I am not sure, but this is a hunch, nevertheless, the concern cannot be ruled out totally.
Nevertheless, I strongly believe the policymakers know what is good for the country.
Q/ There is a common perception that banks do not have money, that is why there is no investment in the domestic front. What is your take on that?
A/ It is not true that banks do not have money. Have you heard anything in the recent past that banks are not being able to lend? Hopefully not. The concerns around liquidity crisis have started to fade away already. We have seen certain situations unfolding last year but 2020 brings in a breath of fresh air and we have reasons to be hopeful about it. Look at the credit growth rate of PCBs; it is coming down already. In the last six months, it has reduced to the point of single digit. It is basically because of the lower demand for loans not because of liquidity scenario.
Q/ You already mentioned that there are 59 banks, making it an overheated market. Will adding more banks be a boon or bane?
A/ In any case, I am just a citizen. I am not privy to many things that are happening in the government, or what is on their mind. I do not have any insight on the basis of making such a decision. I am hearing that 2 more banks might get license. So they may have a different understanding or insight, which I do not have as an outsider. Having said that, as a practitioner, I think that 59 itself is a very big number. Because if you look at the banking GDP, the figures stand around 270/280 billion USD. In comparison to the number of banks, that is not a happy number to boast about. So as an individual, having 32 years of banking experience, my humble suggestions would be to add no more banks.
Q/ We have seen the rise of MFS – it is going good. But as a whole, when it comes to Fintech, we are still in a nascent stage. What is your take on that?
A/ As a whole, I do not think we have come to the state where we should be. MFS is basically being used as payment platform, anything more than that has not yet been done. I think for the changes to take place, it will take some time. The number of brilliant people in the market, especially from the young generation, have creative and innovative ideas. And a lot of startups are coming up. The problem with startups is that, there are not many people who can fund those. We do not have venture capital or angel investors, which, again is putting the onus on the bankers. Commercial banks are less eager to fund a startup because they often factor in the success rate and the stats there are not very rosy. Besides, managing startups is a different ball game, it is not the same as managing a commercial or a corporate outlet. For that, we also need that experience on how to handle an emerging enterprise. That could be one of the reasons why we are not seeing too many Fintech companies coming into the market. One concerning issue is the lack of data mining. I mean one of the key features of Fintech is analytics, which is not readily available here. Even in the case of banks, data is not properly stored, let alone using them for further usage. We should look into these issues before we expect startups to emerge and succeed.
Q/ On the personal forefront, what is your resolution for the New Year?
A/ I strongly believe my personal goals are entwined with my professional ones. For this year, I want MTB to have a transformation. MTB has a very good platform, one of the best in the market, but I do not think it has delivered its potential. My solemn efforts would be to enable the bank to set a new standard of service excellence. I strongly believe, with the support of my colleagues, I should be able to achieve that ambition.