Additional managing director (AMD) of Mutual Trust Bank (MTB), Ahsan-uz-Zaman, observed that Bank interest rates in Bangladesh is still very high. “I personally think the interest rate is very high, but it is a function of the inflation rate and it is also a function of the cost of deposit in the market which is high.” He said that his Bank would set up agri-branches in rural areas to serve the unbanked people.

“Apart from setting up rural branches, we are also setting up agri-branches as a big plan to serve the under-served and unbanked particularly in rural areas,” Ahsan-uz-Zaman said, in an exclusive interview with The Independent.

Responding to a question about the Bank’s new products and services, Ahsan-uz-Zaman said every bank tries to enhance the quality of its services, and
the Mutual Trust Bank also tries to understand clients so as to make its services more acceptable to them.

“In 2011, we introduced and extended our ATM network. We are among the few banks that have ATM networks across the country. In one year, we’ve set up 93 ATMs across the country, and the number is going to further increase in the coming months,” he added.

Early last year, the Bank also introduced POS (Point of Sales) machines and currently it has about 400 POS machines at various business establishments, he pointed out.

He further said that since a lot of Bangladeshis are living abroad, the Bank has made a constant effort to make it convenient for these non-resident Bangladeshis (NRBs) to send money to the country. “We have various remittance agreements with different exchange houses across the Middle East and some other countries.

We have already signed an agreement with Western Union which has a major money transfer channel in the world,” he added.

The MTB has introduced two savings products—an account called MTB Junior for school-going kids, which can be opened by the parents, and MTB Graduate, which is meant for university-going young adults. “We have also introduced a product for women, which is called Ruby,” he added.

In the medium and small-enterprise areas, the bank had introduced MTB Probaha and MTB Buniad, he said.
“Probaha is a current account which will pay interest and MTB Buniad is a fixed deposit type product for two years or three years for the business community,” he explained.   

When asked how he would evaluate the overall performance of his bank, Zaman said it was a difficult environment for the Bank last year. “But we are happy that at least we were able to increase our loan portfolio and we have grown by 18 per cent roughly year by year.

On the deposit side, we have grown by about 31 per cent,” he noted.
Explaining the challenges that the bank had faced, he said the cost of getting deposit was quite high and it was mostly on the fixed deposit side. “So, we did a good job in terms of deposit cost as the cost of deposit increased by 16 per cent,” he added.

“Our net income increased by about 37 per cent, because of the expenses which increased by 62 per cent. The net interest margin fell to about 29 per cent.

Our operating expenses have also gone up to about 38 per cent,” he observed.
This, he said, was a result of the increase in the Bank’s establishment cost and an increase in its fixed assets. “So, our operating profit as a result could actually be in absolute terms about Tk. 120 crore compared to Tk. 200 crore in the previous year,” he said.

The MTB has plans to grow its branch network very aggressively, he said, adding, “Currently, we have about 76 branches.”

Because of this expansion plan and increase in the MTB’s establishment costs, the Bank’s net profit after tax was approximately Tk. 40 crore compared to Tk. 98 crore in the previous year.

Asked about the target of his Bank for current and next years, the AMD said the Bank’s plan was to grow its deposit base by 28 per cent in 2012 and its loan portfolio by 22 per cent.

“It is going to be a challenge because our net profit level in 2012 is pretty aggressive and we want to grow our net profit about 18 per cent over the year,” he added. About reaching out the banking services to the unbanked people, he said, “We do that by our own and we have a significant presence in deprived areas.
Apart from setting up rural branches, we are also setting up agro-branches to serve the under-served and unbanked folks, particularly in rural areas. And we’ll do it through our alternative delivery channel, namely internet, as well.”

“We are also going to enhance the ability of the clients to access banking services through their mobile phones,” he added.

Clients could also get access to their accounts by giving the bank a call, he said, adding, “We are not doing things in the traditional way as we are trying to serve the clients by developing our in-house capabilities.”
Replying to a question about the uniqueness of his bank, Zaman said, “We try to understand the clients’ needs, and provide customised banking solutions for them.

“I think we give a lot of importance to the quality of our services.”
Explaining the CSR activities of MTB, Zaman pointed out that the Bank is well aware of its responsibility to the community and participated in its CSR activities by helping needy children, providing scholarships, financial assistance to the poor and distressed. “And during times of natural calamities, we help the affected,” he added.

The Bank also participated in various projects, which had a beneficial impact on environment and society, he said.

The Bank had provided financial support and training to about 120 handicapped people, donated funds to female Bangladeshi painters and set up a school in a remote char area in Bhola. “We have an MTB Foundation which is headed by our founding chairman.” When asked about the necessity of launching new banks in the country, Zaman responded positively, saying as the country was growing there was a need for increasing banking services.

He further said, “I think about 80 to 90 per cent of the urban people avail banking services. Well, the mandate for the new banks is to serve the areas which were not served before.

So they will be concentrated more in the non-urban areas and this is going to bea challenge for them.”
He claimed thatMTB’s interest rate is low.

With regard to the government’s restricted credit growth policy, Zaman said, “If you restrict the credit growth, the interest rate would be a bit higher.”

“I think it is a function of all this, and the increased browning requirement of the government requires funds in the markets.

This is creating pressure on the market and the cost of funds is growing up,” the AMD added.
“The interest rate is needed to be raised initially to restrict demand for the masses.

The increased subsidy requirement of the government in agriculture, energy, fuel and fertilizer is also very high.

And there are reasons that need to be supported.
The requirement is high and it is going up. So once we are able to control that I think the impact would be visible,” he explained at length.

The Independent/ Bangladesh/ 14th May 2012

Md. Sayedul Hasan, Deputy Managing Director of DBBL inaugurates a new branch at Pubail in Gazipur on Sunday.

Dutch-Bangla Bank has opened its 115th branch at Mirer Bazar, Pubail at Fouzia Sarker Commercial Complex, Kamargaon, Mirer Bazar, Pubail, Gazipur on Sunday.

Like the other DBBL branches, this branch will provide on-line banking facilities to the clients from the opening day of the branch, according to a press release.

Md. Sayedul Hasan, Deputy Managing Director of the Bank formally inaugurated the Mirer Bazar branch.

The opening ceremony started with milad mahfil seeking blessings of the Almighty Allah for successful operation of the branch, prosperity of the business community, depositors and stakeholders of the Bank.

The Daily Sun/ Bangladesh/ 14th May 2012

Padma Oil Company, Shahjalal Islami Bank Limited and Export Import (EXIM) Bank of Bangladesh on Sunday declared dividends for the year that ended respectively on June 30 and December 31, 2011.

The Board of Directors of Padma Oil recommended 50 percent cash dividend (Tk 5.00 per share of Tk 10.00 each) and 50 percent stock dividend for the year ended on June 30, 2011.

The annual general meeting of the company will be held on June 28 at Main Installation, Guptakhal, Patenga, Chittagong while June 11 has been fixed as the record date, according to the Dhaka Stock Exchange (DSE) web post.

The Board of Directors of Shahjalal Islami Bank Limited announced 25 percent stock dividend for the year that ended on December 31, 2011.

The annual general meeting of the Bank will be held on June 19 at the Hall of Fame, Bangabandhu International Conference Centre in the city.

Meanwhile, the Board of Directors of EXIM Bank recommended only 14 percent stock dividends for the year that ended on December 31, 2011.

The Daily Sun/ Bangladesh/ 14th May 2012

Bangladesh Bank has asked two state-owned banks and one private commercial bank not to provide any further loan to Rahman Group as a number of sister concerns of the company have become loan defaulters with huge amount owed to different commercial banks.

The banks are: Sonail Bank, Agrani Bank and IFIC Bank.

Seven wings of the Rahman Group owe a total of Tk 3.15 billion to the three banks.

The central bank in its directive also asked the banks to take legal actions against the company, owned by one Fazlur Rahman, for rescheduling their default loans through illegal procedures.

The banking division of the finance ministry has also given its consent to the banks to take legal actions against the company for not paying the installments of the loans, a senior official of the banking division said.

The concerned authorities of the banks will have to take departmental action against their corrupt officials who helped the company to reschedule default loans through illegal procedures.

Earlier in March this year, some officials of Sonail Bank, Narayanganj branch, allegedly revised the installments of Tk 2.53 billion loan given to seven companies of Fazlur Rahman without prior permission of senior branch official, the BB report said.

Sonail Bank’s total outstanding loan with its Narayanganj branch stands at Tk 24.78 crore.

The seven companies owned by Fazlur Rahman are M/SRahman Spinning Mills (Pvt) Ltd, M/S Rahman Hosiery Dyeing and Finishing Mills, M/S Olympia Knitting industries(Pvt) Ltd, M/S Jasy Hosiery Garments (Pvt), M/S Rahman Hosiery Garments (Pvt) Ltd ( Rahman group combined ), M/S Rahman Hosiery Garments (Pvt) Ltd and M/S Fazlur Rahman Industries (Pvt) Ltd.

In Agrani Bank, two Rahman Group companies, with a total loan of Tk 34.70 crore, rescheduled repayment of loan illegally without prior permission of concerned authorities, according to the central bank report .

The two companies are M/S Fazlur Rahman and Co (Pvt) Ltd, and M/S Al-Afrafat Trading Company (Pvt) Ltd.

According to the BB report, in 2011, there was no trace of M/S Al-Afrafat Trading Company Company while M/S Fazlur Rahman and Co (Pvt) Ltd became defaulter with Agrani Bank.

Private commercial bank, IFIC, detected that the repayment of default loans of three Fazlur Rahman companies are irregular and rescheduled illegally. These Fazlur Rahman companies are: M/S Rahman and Company (Pvt), M/S Rahman Spinning Mills (Pvt) Ltd, and M/S Rahman Hosiery Dyeing and Finishing Mills (Pvt) Ltd.

Total loans of IFIC Bank given to three Fazlur Rahman companies stands at Tk 26.70 crore, according to the report.

While contacted, the Chairman and Managing director of Rahman Group, Fazlur Rahman, said if the loans of companies are not rescheduled in proper time in the future, all companies of Rahman Group may close down.

A total of 20000 officials and workers may loose their jobs, he added.

The Daily Sun/ Bangladesh/ 14th May 2012

Bangladesh Bank Governor Dr Atiur Rahman, speaks at the formal launching of BB’s online library and e-news clippings at the Bank’s conference room on Sunday.

Bangladesh Bank (BB) Governor Dr Atiur Rahman on Sunday stressed the need to digitise the country’s banking and financial sector as the first step towards building the digital Bangladesh.

He said the central bank has already undertaken all out efforts to digitise the activities of Bangladesh Bank as well as the overall banking sector of the country.

The BB governor was addressing a programme marking the formal launching of BB’s online library and e-news clippings at its conference room.

Atiur said as part of the massive digitisation endeavor the central bank has started modernising its library maintaining international standard.

He said the central bank has enhanced its supervisory role sufficiently for strengthening the institutional good governance of the banks side by side its risk reduction; building a firm footing for risk management and also enhancing the capability of the central bank.

He hoped that central bank will be the most digitised institution in Bangladesh very shortly.

Deputy Governor Nazneen Sultana, Executive Director M Ahsanullah, general manager of IT-OCD Qazi Nasir Ahmed, Assistant Director Shasanka Kumar Singha also spoke on the occasion.

Nazneen Sultana said skilled manpower and updated information both are similarly important for ensuring expected and timely development of any organisation.

Archiving various news on national and international banking, finance and socio-economic conditions, providing news clipping service to the end users, single point access of all the archived news, alert readers about the news clippings according to reader’s interest list are the vital objectives of developing the e-library.

The central bank is working to introduce two modern information service centers named “Institutional Repository (Archive)” and “Audio Visual, Language and Cyber Section” immediately.

Data on BB, banking sector and socio-economic situation of the country will be available on both the sites.

central bank officials will be able to log-in to both the sites by using network ID and password in the Bangladesh Bank’s website.

IT operations and communication department of BB worked both to develop the online library and e-news clipping management software.

Presently there are 33682 books, 7210 e-books, 520 CD-ROM, 25,000 e-journals, 655 journals articles, 13 magazines, 21333 journals in the archives, 29 daily news papers, 3 foreign daily news papers, 648 e-annual report, have been preserved in the Bangladesh Bank Library.

The Daily Sun/ Bangladesh/ 14th May 2012