Pubali Bank Ltd, once a government owned problem Bank, recuperated by overhauling its services under private management that now has a vision to put it on the top.The Bank has been able to recover most of its bad loans worth Tk 600 crore from different state owned corporations and change the mindset of its existing employees by, among other methods, enhancing salaries.

It adopted local software in modernization bid and made significant contribution to health and agriculture sectors in its journey towards success.The Managing Director of Pubali Bank Ltd, Helal Ahmed Chowdhury, shared his views and experiences in an exclusive interview with The Independent on how he and his predecessors, the Board and the management transformed a problem ridden Bank into a profit making modern entity over the years.

Chowdhury joined the Bank in 1977 through the competitive Bangladesh Civil Service examinations. He served the bank all along in different positions, including additional managing director, deputy managing director, general manager of different divisions, and heads of different corporate branches. He witnessed the transformation from different levels of his career.

He is a widely traveled person.The Bank attained over 20 per cent growth in each year in all segments during the last five years. This earned it the status of a top level private commercial bank with the accolade of both excellent financial performance as well as local and foreign awards.It posted a satisfactory profit in 2011. The amount was TK 120 crore in 2005.

Besides, the amount of deposit with the bank crossed Tk. 12,500 crore -mark in 2011 against Tk. 4,200 crore in 2005, and the non- performing loans were brought down to about two per cent or below.Chowdhury said at a time the bank was limping with default loans reaching 42 per cent. With intensive supervision by the central bank coupled with the professionalism by the bank’s board and management, it has now become one of the top banks in Bangladesh.

The central bank issued a circular on loan classifications, which gradually restored credit discipline in the banking sector, he said.It come out of the central bank’s problem bank list in 2005 and the early warning system (EWS) in 2007 due mainly to success of its management in reimbursing about Tk. 550 crore from nine different government corporations, and expansion of good business, bringing discipline and changing the mindset of the members of the staff.

The Pubali Bank could be a role model for state owned enterprises as to how a loss making public bank graduated to a commercially viable private entity, Helal Ahmed Chowdhury pointed out.“The beauty of changes is that we turned it into a profit making Bank by adopting fully local methods and own policies. We didn’t hire any foreign consultants or models in the whole process,” he asserted.

The Bank used locally made software in its automation drive which was validated by Price Waterhouse Cooper (PWC) as a secure tool. A team led by the bank’s General Manager & CTO, Mohammad Ali, has developed the Bank’s IT system, which reduced its reliance on foreign experts, saving a large amount of foreign currency. The Managing Director said the software can provide the management instant follow-up services whenever required.“We update the software regularly whenever we find any problem.

This is user friendly, convenient and pro –customer. The Bank will bring all of its 410 branches and 200 ATM booths under online system in 2012,” Chowdhury noted.About the core lending policy Chowdhury said the bank’s policy is to participate in the mainstream banking like corporate, retail, SME, remittance, export and import and contribute to the sectors like health, agriculture, infrastructure, power etc.

In its unique drive to contribute to the health and farming sectors the bank financed many large and small hospitals, supported agriculture machinery procurement by forming syndication among farmers, lent money to weavers in different ethnic minority groups, financed flower farming in Jessore.Also, the bank financed and arranged syndication loans to many private hospitals including Apollo, United, Birdem and Ibrahim Cardiac to provide healthcare services in the country with a view to reducing exodus of foreign exchange for treatment abroad.About employment generation he said the Pubali is a leading employer in the banking sector.

It has set a model for other financial institutions on how a Bank can accommodate local human resources to deliver international standard services.On liquidity crisis in the banking sector the career banker blamed treasury department of individual banks for aggressive banking.He said treasury management by banks is responsible for creating pressure on liquidity, but there is no crisis in general.

In many cases, banks open too many letters of credit (L/C) without adequate capacity. When it is time to make payments, they find that they do not have adequate funds and go for borrowing from the market. It creates instability in the market.The Managing Director will welcome the government’s proposal to arrange funds through syndication to finance large government projects under Public -Private Partnership.

He said, “We need to invite foreign direct investment by creating a congenial atmosphere and capacity building.” He said the volume of overall business activities, including export and import, increased significantly this year. As a result, the earnings of the banks have gone up. The MD expressed the hope that his Bank is also likely to make a satisfactory profit this year.

The Pubali Bank was the only bank run by erstwhile East Pakistan before Bangladesh achieved independence in 1971. After liberation, it started functioning as a state-owned bank.In 1985, the bank was handed over to the private sector. It won The Daily Star-DHL Business Award in 2010 for its performance.

The Daily Independent/Bangladesh/ 3rd Jan 2012