Mercantile Bank has targeted mobile banking to make the most of the huge potential that cellular technology offers as part of its long-term goal of becoming a leading player in mobile financial service.
The private commercial bank has already made its foray into the country's mobile financial service scene, re-launching its mobile bank platform MYCash in May this year.
About Tk 25 lakh is transacted through the service every day, according to M Ehsanul Haque, managing director of the bank.
“We are focusing on mobile banking due to its huge potential,” he said in an interview at the bank's head office in the city recently.
The lender, which largely provides loans to apparel and textile industry, also aims to introduce multiple payment solutions for its mobile banking customers.
Mercantile now has around 1.5 lakh mobile banking accounts and is adding 3,000 new customers every day, according to Haque, who joined the bank in January last year as its chief executive.
At present, the bank provides nine services with MYCash, including cash-in, cash-out, send money, mobile top-up, bank deposit, deposit scheme, fund collection, salary disbursement and merchant payment.
The bank is relying on the country's healthy mobile subscribers' base, which stands upwards of 11.6 crore according to Bangladesh Telecommunication Regulatory Commission's latest data.
Haque sees mobile financial service as a viable way of serving the un-banked, especially in rural areas, as the bank does not need to open branches to run the operation.
The average daily transactions through mobile phones soared 117 percent year-on-year to Tk 263 crore in March, according to Bangladesh Bank.
As of March this year, the country has had more than 1.50 crore mobile banking subscribers, up 2.77 percent from the previous month.
A third generation bank, Mercantile is also focusing on full-fledged automation for better customer service.
“We are installing modern core banking software to ensure quality service,” said Haque, adding that the bank plans to complete the installation by this year.
The 60-year-old said the software would strengthen the bank's capacity to prevent fraud and enhance transparency.
Mercantile has 93 branches across the country and will open eight more branches this year. It also has plans to double the number of ATM booths to 250 within the next two years.
Haque, however, went on to stress upon a common ATM platform for all banks.
“An integrated platform will benefit all banks as they will not need to invest additional money for setting individual ATM booths.”
The bank has so far issued around 70,000 debit cards and 25,000 Visa credit cards.
Haque said his bank aims to increase its loan portfolio by around 19 percent within the next one and half years to make available more credit for customers, especially the corporate ones.
As of June this year, the private commercial bank's outstanding loans stood at Tk 10,585 crore, and it plans to lend an additional Tk 2,000 crore by the end of 2015.  
“We want to lend more in order to offset excess liquidity,” he said.
The bank's total deposit stood at Tk 13,936 crore at the end of June this year, 6.04 percent higher from the same period last year.  
“We are hopeful of reaching our loan disbursement target as many clients are now showing interest to borrow from us,” said Haque.  
Recently, the bank cut its lending rate by around 2.5 percentage points to lure in customers.   
Mercantile employs around 3,000 people and plans to recruit 50 more this year.
“We want to expand our operation mainly for serving more people and increasing our balance sheet size,” he said.
Haque started his career with Grindlays Bank some 35 years ago and went on to serve both national and international banks.
He also served as managing director of Prime Bank Ltd, Infrastructure Development Company Ltd, a non-bank financial institution, Brac Afghanistan Bank and Brac Bank.
The veteran banker also touched upon the recent banking scams involving Sonali and BASIC, and called for punishment for the wrong-doers.
“Only a handful of people are involved in such malpractices. The government should hand exemplary punishment to them with proper investigation.”
Haque, however, is not worried about the scams as “they are not a general trend; rather an isolated one".
“It is very shocking as a section of people and the media are downplaying the banking sector just because of two or three incidents.”
Mercantile's operating profit rose to Tk 230 crore during the January-June period, up from Tk 186 crore recorded for the same period last year, according to the MD.
Non-performing loans now stand at about 5 percent, 1 percentage point lower from last year. The bank has targeted to bring it down to 3 percent as soon as possible.  
He said the banking sector was hit hard last year due to prolonged political unrest.
"But the situation is improving with the normalcy of political environment," he added.

For most, it might take a lifetime to manage a bank balance of Tk 1 crore. But thanks to BASIC Bank's reckless lending practice, a select few gobbled up hundreds of crores of taka—in just a few days.

All of them presented supporting documents of companies that do not exist: frauds could easily have been detected if the state-run specialised bank had the intent to find out.

For instance, one borrower withdrew Tk 338.07 crore from BASIC Bank's Gulshan branch in 2012 and 2013 in the name of five fake companies. The borrower is yet to be identified.

One of the fake companies was Surma Steel and Steel Trading Company, for which the BASIC board approved a loan of Tk 64.05 crore on March 3, 2013.

In a letter attached with the loan proposal, the bank's Gulshan branch wrote to the head office stating that Surma Steel's business did not warrant a huge loan and that there was no information on the client.

Neither could it visit the client's office nor could it collect a CIB report, legal opinion on collateral, stock report, vetting and searching.

Curiously, the head office instructed the branch to resend the loan proposal—with a back date and no mention of the negative reports. The branch duly obliged and the board approved the loan, said a central bank report.

The company took out Tk 30.5 crore through 10 cheques a day after the sanction letter was issued on March 10, 2013; another Tk 20 crore through three cheques three days later and Tk 14.05 crore shortly afterwards.

There had been no transactions in the account after the loans were withdrawn. Furthermore, the central bank never received any suspicious transaction report on the account.

Later, the branch imposed Tk 9.04 crore interests on the loan and transferred the amount to the bank's income. BASIC Bank is yet to realise any fund from the client, the report said.

Surma Steel's account identifier was SFG Shipping Lines, another fake company.

From the Gulshan branch—prior to Surma Steel's loans—SFG Shipping Lines took Tk 67.97 crore loans, S Suhi Shipping Lines Tk 59.7 crore, Shifan Shipping Lines Tk 77.41 crore and S Resource Shipping Lines Tk 68.94 crore.

One person named Jewel withdrew the entire amount through cheques.

Despite this, the BASIC board allowed the person to appropriate a fresh amount by approving the loan proposal for Surma Steel, the Bangladesh Bank report observed.

In another case, the bank has allowed three members of a family to swindle Tk 247.68 crore from its Gulshan branch through three non-existent companies, according to the report.

In 2012, two companies, Enterprise and Brothers Enterprise, owned by an uncle and a nephew took out Tk 106 crore and Tk 69 crore respectively from the branch.

As in the previous cases, the entire amount was withdrawn and no transactions took place in the accounts after that, the central bank inspection report said.

Later in 2013, Monica Trading International, a company owned by another uncle, opened a current account with the Gulshan branch, of which ARSS Enterprise was the identifier. The company withdrew Tk 72.68 crore from the branch between January and May last year.

Although the bank knew there was no possibility of realising the previous loans from the uncle and nephew, the board gave the opportunity to another member of the same family to gobble up a huge amount in the name of fresh loans, the BB report observed.

The report also found that the Gulshan branch allowed fake and defaulting companies to swindle Tk 1,000 crore in 2013, defying the central bank's instructions to rectify its irregularities in disbursing around Tk 1,300 crore a year ago.

It said the branch also made forgery in its classified loan statement to hide the real picture.

The Gulshan branch's classified loan was Tk 1,009.67 crore as of September 2013 but it was shown to be Tk 545.66 crore as of December 2013 in the CL report. In other words, it showed that the bad loans were reduced by Tk 464.01 crore.

The branch officials informed the central bank inspection team that the classified loans were doctored following telephonic instructions from the head office. Without any rescheduling, the branch showed Tk 464.01 crore in unclassified loans. “The bank management is responsible for this,” the BB said.

The central bank first opened a probe into BASIC Bank's Gulshan branch in 2012. It ran another investigation between January and June this year. The latest report was forwarded to the Anti-Corruption Commission on July 15, and the anti-graft body has engaged an officer to investigate the matter.

Muhammed Ali, Managing Director of United Commercial Bank Limited (UCBL) has been accorded ‘CEO of the Year’ award at the global brand excellence awards hosted by World Brand Congress.

Moreover, UCash, the mobile financial service of UCBL has been awarded in the category of ‘Effective Use of Marketing Communication Award’.

The theme of the congress was “Brands that last: Role of sustainability in innovative branding”.

Muhammed Ali, a prominent and professional banker, has earned 36 years’ of multi-dimensional experience in banking and other fields of management.

Acknowledgement as ‘CEO of the Year’ is the outcome of his dedication and prudence leadership to craft UCBL as one of the leading private commercial banks of Bangladesh. He is also nurturing and closely monitoring the operations of Ucash that eventually led to the award “Effective Use of Marketing Communication Award’.

United Commercial Bank Limited is one of the largest private commercial banks of the country and is dedicated to best services through innovative product and offers since its inception in 1983, said a bank press release.

Bangladesh Bank (BB) has directed all the banks to ensure network and cash at ATM (Automated Teller Machine) and POS (Point of Sale) round the clock so that clients could make card based electronic transaction anytime.

The central bank in a circular today ordered all the banks to connect their ATM and POS with the network uninterruptedly. It also asked the banks to make available cash at ATM booths all time, reports BSS.

The banks must have to display notice in front of the closed or inoperative ATM booths.

Besides, if the services of ATM and POS of any bank are remained closed for unavoidable circumstances, they must have to inform the clients instantly, added the circular. 

BEIJING: Industrial and Commercial Bank of China Ltd. (ICBC), the country’s largest lender by market value, said Saturday it plans to issue preferred stocks worth up to 80 billion yuan (about 13 billion U.S. dollars) to replenish its capital.

Up to 45 billion yuan in preferred shares will be issued in the domestic market and another 35 billion yuan in preferred shares are planned for the overseas market, ICBC said in a filing on the Shanghai Stock Exchange.

According to the plan approved by ICBC’s board, the bank will issue the preferred shares to no more than 200 qualified investors through a private offering in the domestic market.

The issuance of preference shares overseas will be carried out independently from the domestic offering, according to ICBC.

Voting rights for the planned preferred stocks will be restricted, ICBC said.

As bad loans build up, other Chinese lenders, such as Agricultural Bank of China Ltd. and Bank of China Ltd., said earlier this year they planned to issue preferred shares worth billions of dollars.

The non-performing loan ratio climbed to 1.08 percent for Chinese commercial banks by the end of June this year, according to the China Banking Regulatory Commission.

To help banks meet new global capital rules known as Basel III, the China Securities Regulatory Commission announced in March this year new rules of the pilot program allowing eligible companies to issue preference shares.

Preference shares, along with common shares, are two primary types of stocks that companies offer to investors. Preference shareholders have priority rights over ordinary shareholders in distribution of profits and residual assets.

Unlike common shares, preference shares function more like a bond. They are rated by major credit-rating companies and their prices are affected by changes in interest rates.