State-owned Agrani Bank Ltd will bring 450 branches, out of a total 877 branches, under online banking system by June 2012 with a view to providing better delivery of financial services to its clients, the Bank’s managing director  said on Monday.    

In an exclusive interview with The Independent, Hamid said the board of directors of the Bank is trying to enhance further the reputation of the Bank by providing hassle-free services to its  customers. 

“Currently, we have 51 branches under the online service delivery network and by the end of December the number should rise to 60, though mostly urban-based,” Hamid said.

He said though the Bank’s strength has weakened due to facilitating petroleum imports by BPC (Bangladesh Petroleum Corporation), it is still maintaining growth in basic banking business by providing better services to remitters.

“In receiving remittance, the status of our Bank is close to Sonali Bank, another state-owned scheduled bank, which has an established reputation in remittance mobilisation,”he said.

He said the Bank operates two remittance companies, one in Singapore and the other in Malaysia, while for Europe and Middle East, the bank has several correspondent banks to collect remittances from Bangladesh expatriates.
He said Agrani Bank will soon get Tk 500 crore  as repayment from BPC against the outstanding loans to BPC which stand at Tk 2,100 crore.

“We wrote to the Ministry of Finance last week and the ministry assured me of giving Tk 500 crore by the current week,” Hamid said, adding that “the committed money, once released, would help the Bank in getting some relief in its liquidity position.”

Opposing permission for new banks, the Agrani Bank chief exeutive said allowing new banks will saturate the field. In that case performance of banking activities, with some 47 local and foreign banks already on operation in the country, could be affected.

Besides, over 3,000 non-governmental organisations are also conducting some sort of banking activities across the country, he added.

He said most banks are now suffering from deposit crisis.

About the performance of Agrani Bank he said the target of his Bank was to collect Tk 35,000 crore deposits in 2011 and Tk 42,000 crore deposits in 2012, while disbursement of loans and advances was Tk 19,200 crore in 2011 and Tk 21,100 crore in 2012.

In 2010, the bank’s achievements in deposit collection and loan and advance disbursements were Tk 20,633 crore and Tk 16,326 crore respectively.

He said his Bank’s present lending rate is not very high for growth of industrialisation.
“Present lending rate---around 13 to 14 percent---is slightly higher than the cost of fund at 8.5 to 9 percent,”
he said.

He, however, said the uniqueness of the Agrani Bank is 8 percent rate of interest for farm loans, which is 10 percent at other banks.

He said some 14.27 lakh villagers were brought under banking services across the country by Agrani Bank, as the Bank always gave due importance to rural people to provide them with financial services.

To reduce NPLs (Non Performing Loans), banks will have to enhance motivational campaigns throughout the country, he said adding that they will also have to rescheduled classified loans, waive some interest and some loans.

For raising productivity, the central bank should encourage banks in financing agro-projects, such as cold storage, agro-machinery and equipment and agro-based food industry by providing subsidies, he said.   

Speaking on the country’s overall macroeconomic position, the Agrani Bank MD said the basic indicators of the macro-economy are still good though some negative factors, such as high inflation, increased import cost, low foreign aid and remittance inflows.

He said the government should think of careful import of fuel and avoid stockpiling when the fuel price is high on the international market at present.

He said the inflation is basically on account of food and communication costs.
“We all should try to find ways to control such costs so that expenditure does not go beyond the affordability of the common people,” he said.

Turning to the unbanked population, he said Agrani bank is gradually trying to expand the areas of financial services to cover more people of the country by diversifying products.

“One unit of the Bank is Agrani Equity and Investment Ltd, which is a merchant bank and lends to small investors in the capital market,” he elaborated.

Meanwhile, the Bank has announced a new subsidiary company styled SME Financing Company on Tuesday, he said. “The main objective of forming the new subsidiary is to improve socio-economic conditions through creating employment opportunities,” he explained.

Hamid said the new subsidiary was a conversion of a project that covered 40 upazila in greater Mymensingh and Faridpur districts with financial assistance from the Norwegian Aid for Development since 1995 under which credit facilities were provided to small entrepreneurs.  

Syed Abdul hamid said the Bank has been spending a significant volume of money in implementing CSR (Corporate Social Responsibility) programmes every year. It had donated Tk 5 crore for CSR activities last year.

In 2009, the Bank received three awards in the categories of best Presented Accounts and Corporate Governance Disclosure Awards 2009 by South Asian Federation of Accountants, best Published Accounts and Reports 2009 by the Institute of Chartered Accountants of Bangladesh (ICAB) and National Award for Corporate Governance Disclosure 2009 by ICAB.

The Daily Independent/Bangladesh/ 5th Jan 2012