Modhumoti Bank Limited (MMBL) wants to become a SME-focused bank gradually aiming to facilitate developing entrepreneurship particularly in the rural areas of Bangladesh, the bank's top executive has said.
The private commercial bank (PCB) has also planned to boost its financing in small and medium enterprises (SMEs) for minimising risks with diversifying portfolios in the coming years.
Under the MMBL's new plans, the investment in SMEs is expected to reach 50 per cent of the bank's total loans and advances in 2019 from the existing level of 45 per cent.
"We're increasing investment in micro, small and medium enterprises gradually while dependency on corporate financing is squeezed," Shafiul Azam, managing director and chief executive officer of MMBL told the FE in an interview recently.
The new generation private bank has already launched a product namely 'Modhumoti Goti' to facilitate small enterprises across the country, Mr. Azam said.
Modhumoti Goti is a business loan to meet any kind of urgent business needs for micro and small enterprises, which provide up to Tk 1.0 million.
The fourth generation private bank has already taken a massive expansionary programme to bring more unbanked people into its network through offering quality products along with better services using modern technologies.
"We'll work for consolidation as well as expansion in 2019," the top executive of MMBL said while sharing his future plans for expansion of the bank's activities.
As part of the programmes, the top management of MMBL has already decided to open 15 more branches in different parts of the country in 2019.
"We want to increase the number of our branches to 50 from the existing number of 35 by the end of 2019," the MMBL's CEO disclosed.
The new MMBL agent banking points will be set up on the basis of the proposed branches, according to the CEO.
"We've planned the number of agent banking points to enhance at 700 by the end of the next calendar year from the existing number of 300," Mr. Azam added.
The MMBL is now working to gear up its agent banking operations across the country aiming to bring unbanked people into the banking network, he explained.
"We may collect core deposit from the general people particularly of rural areas by offering comparatively lower interest rates through agent banking," the CEO said while explaining the benefits of the agent banking.
He also said it also helps increasing inward foreign remittances and channeling micro and agriculture credits.
Besides, the PCB has already started providing digital Government-to-Person (G2P) services to marginal people using its agent banking operations.
Under the electronic payment system, the fourth generation PCB has already disbursed Tk 45 million to more than 20,000 account holders through Union Digital Centers (UDC) in Gopalgonj district.
Prime Minister Sheikh Hasina earlier inaugurated the G2P for disbursement of the allowances of Social Safety Net (SSN) programmes for marginalised people including elderly and physically challenged people and widows.
The MMBL opened first agent banking points at Boheratoil and Kakrajan Union Digital Centers (UDCs) at Shakhipur Upazila in Tangail district on February 04, 2016.
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.
"We've already started our digital operations with the state-of-the-art technology for ensuring proper security with real time banking facilities," noted the banker having more than 25 years of experience in the industry.
The MMBL, however, has planned to introduce internet banking fully in 2019 along with developing app-based transactions aiming to ensure better and faster services to the clients.
"We've planned to digitise our all banking activities gradually with ensuring proper security of information and communications technology (ICT)," the CEO said while replying to a query.
He also said the MMBL is expanding its digital banking capabilities to minimise operational cost compared to the brick-and-mortar infrastructure.
"The MMBL is still holding number one position among all nine fourth generation banks considering their overall performances," the CEO mentioned.
Among nine fourth generation PCBs, only MMBL has received offshore banking unit (OBU) licence from the central bank of Bangladesh to run such business.
"We've already received two overseas funds that help running the OBU operation smoothly," the CEO added.
He also the MMBL is still working to expand its OBU business further for facilitating the country's overall foreign trade.
Currently, 35 commercial banks out of 57 are running their OBUs across the country as per a directive issued by the Banking Control Department of BB on December 17, 1985.
The OBUs are allowed to provide foreign currency loans to their customers.
The senior banker also spoke on different issues including rising trend of classified loans in the country's banking system.
He puts thrust to be more cautious about selection of borrowers along with strengthening monitoring and supervision to reduce the volume of non-performing loans (NPLs) for improving the financial health of the banking system.
"We need judicial supports to speed up the recovery process of the classified loans," the senior banker noted.
The amount of NPLs rose by nearly 34 per cent or Tk 250.67 billion to Tk 993.70 billion as on September 30, from Tk 743.03 billion as on December 31, 2017, according to the central bank's latest statistics.
Citing various measures in different countries, the CEO said China has been able to bring down the NPLs at 2.0 per cent from 15 per cent following installation of a mobile ringtone on selected numbers that sounds: "You've called a loan defaulter."
The senior banker also suggested launching campaign against loan defaulters' particularly willful ones.
The fourth generation bank had introduced a privilege banking campaign titled "Freedom" to facilitate Freedom Fighters. Such initiative for Freedom Fighters has been taken for the first time in Bangladesh.
Currently, all Freedom Fighters are honored by providing 0.25 per cent more interest on their deposit while 0.25 per cent interest deducts for their loan portfolios in the fourth generation bank.
Modhumoti Bank Limited (MMBL) is now working to set up a lounge at Shah Amanat International Airport in the country's port city of Chittagong in the next month.
"It will be a New Year gift for our clients," the CEO said, adding that MMBL has already signed agreements with other three banks to extend the services to their cardholders.
Mr. Azam has taken over leadership of the management of MMBL on August 08, 2016 as MD and CEO. He was the additional MD of the PCB prior to getting the latest assignment.
He started his career with AB Bank Limited in 1991 as a probationary officer after completing post-graduation in Marketing from University of Dhaka.
As a part of his career progression, later he joined Shahjalal Islami Bank Limited in 2001 and became the deputy managing director of the Shariah-based Islamic bank within a very short span of time.