Palli Sanchay Bank (PSB), a specialised non-scheduled bank is working to improve the fate of teeming millions and raise the standard of living of the poor and marginal rural people and also empower the distressed and underprivileged women of the country.
"The main objective of PSB is to make the poor people self-reliant through self-employment and to help the country achieve economic prosperity. PSB is implementing the Prime Minister`s dream for achieving the target for becoming a developed and prosperous country by 2041.The Bank has played an important role in achieving the SDG targets," the Bank's Managing Director Khondoker Ataur Rahman told the FE recently.
He said in order to permanently eradicate poverty from the country, the Prime Minister's special initiative 'Amar Bari Amar Khamar, previously known as Akti Bari Akti Khamar, was transformed as Palli Sanchay Bank under Palli Sanchay Bank Act, 2014.
The aims and objectives of PSB are to raise savings for disadvantaged people, provide easy loan assistance, convert every house into a productive income-generating farm, make the poor financially self-sufficient through accumulated deposits by producing goods.
The Amar Bari Amar Khamar project was officially closed on 30 June, 2021. The bank started its operation on 01 July, 2021.
"In September, 2021 the Government appointed me as the first Managing Director of the Bank", he said.
He said the challenge is conducting banking activities with a large number of staff inexperienced in banking.
He added that the PSB, which focuses on bringing in disadvantaged people, especially women entrepreneurs under institutional financial services, has been sanctioning collateral-free loans to rural poor since its inception in 2014.
Unlike many other banks, the PSB encourages and helps underprivileged people in generating income and building savings, and eventually use their savings in providing more loans under its revolving credit scheme, he said.
The bank's MD said the PSB gives financial and banking supports only to the members of the Village Development Association (VDA), formed by the initiative of the bank, who want to be involved in income-generating activities under the `Amar Bari Amar Khamar' project.
Loans are given for cow fattening, raising milking cows, producing food grains, vegetables, spices, fisheries, nurseries and establishing CSME's, he said.
The amount of the loan depends on the investment plan of the borrowers. However, a small entrepreneur can get a loan from Tk 10,000 to Tk 250,000.
Around 5.7 million poor people have taken various types of micro-loans to be self-sufficient at a nominal service charge ranging between 4.0 per cent to 8.0 per cent. At the end of the fiscal year 2020-21, the debt status stood at Tk 78.76 billion.
"As it is a specialized non-scheduled bank, there is no opportunity for the bank to collect deposits from the public.
The bank collects deposits only from the members of the VDA and their families. Such deposits stood at Tk 27.69 billion in FY 2020-21," the PSB MD disclosed.
Besides, the VDA members can take benefit of the different saving products of PSB including general savings, student savings and rural pension scheme.
Apart from the financial support, the bank is also imparting necessary training to the VDA members to improve their skills in poultry, fisheries, livestock, nursery and agriculture.
The main activities are to encourage the members of the VDA in daily savings and to provide micro-loans and SME loans for becoming self-employed.
Each village development association consists of sixty members out of which forty must be women. About 120,000 such associations have been formed so far.
The bank has about 11,000 employees.
The present management has undertaken various initiatives to make the Bank sustainable.
"Some 18 audit teams have been formed since my appointment and the teams have completed audit in 345 out of 490 branches so far. The rest is going on. The initiatives are taken to resolve the irregularities that have come up in the audit," Khondoker Ataur Rahman said.