Nurul Amin

It is difficult to stop the so-called multilevel marketing companies from cheating people without further financial inclusion, said the chairman of the Association of Bankers Bangladesh.

In an interview with The Daily Star, Nurul Amin said 50 percent of the population does not have access to health and education.

They are easily lured by the attractive advertisements and propaganda of these companies, he said.

“If people cannot be made bank-oriented, these MLM companies will continue to cheat people,” Amin said.

In India, more than 60 percent of the population has bank accounts. It is only 30 percent in Bangladesh. The number of bank account holders may have increased after the central bank allowed people to open accounts with only Tk 10.

Private banks now open an equal number of branches in urban and rural areas. “As a result after about five years, more people will have access to banks, which may narrow scope for cheating by MLM companies,” he said.

Amin, also the managing director of National Credit and Commerce Bank Ltd (NCC Bank), talked to The Daily Star on a series of issues and the much-talked-about Destiny Group.

MLM companies try to win people's trust through attractive advertisement, but eventually it becomes clear that their so-called business is not based on any ethical policy, Amin said.

Before the Destiny scandal, many such incidents like Jubok and Unipay2u occurred in Bangladesh.

In case of Destiny, the government and regulatory agencies took cautionary steps in time. “I think the government is in the right direction,” Amin said.

On an allegation that the ABB functions as an agent of the central bank instead of working independently, Amin said: “The ABB is no collective bargaining agent.”

It is a voluntary organisation working for the development of the community and has to work within the boundaries of the law, he said.

“Bangladesh Bank is the regulator and we are operators. We must have some relations. However, we think if the central bank wants to take any policy decision it is better if they take it after consulting with the ABB,” Amin said.

About the new banks recently approved by Bangladesh Bank, he said it would have been better if the banks had been of specialised types -- perhaps for the garment industry or small industries or regional.

Now, a number of banks have already been approved and the finance minister has said the permission was given on political consideration. So there is no scope to comment on it, he said.

“We hope competition and fair play will continue to be there after the new banks emerge.”

Amin also focused on banks' involvement in the stockmarket.

The exposure of banks has now become bearable and within a limit, he said.

However, if the exposure is limited to 25 percent of their capital after an amendment to the banking law, it might be initially difficult for the banks to maintain it.

NCC Bank is going to step into its 20th year. It started its journey with Tk 19 crore in paid-up capital in 1992. Its paid-up capital was Tk 695 crore in 2011.

The bank's assets now stand at about Tk 11,000 crore and the bank has been expanding its client base every day. The bank's deposits have crossed Tk 8,000 crore this year.

NCC Bank's net profit rose 3 percent to Tk 421 crore in 2011, compared to the previous year, according to data from the bank. The bank has 87 branches across the country and will open six more branches this year.

The power crisis is the biggest problem in infrastructure development, Amin said. He said NCC has bankrolled three power projects.

About the overall situation in the banking sector, Amin said there seems no big crisis in the sector now due to monitoring by the central bank and the banks' self-regulation.

He, however, said 12 primary dealer banks face some problems in maintaining the credit-deposit ratio.

He said the central bank's cooperation is required in this case.

The Daily Star/ Bangladesh/ 15th May 2012