Recently BRAC Bank has successfully introduced a new product - Krishak Card or a card designed especially for the farmers' use. This is nothing new to the people of Bangladesh. From time to time the banking sector has been coming up with different products for the lower income group of people. In particular, the Krishi Bank has been providing agriculture loans to the farmers for a long time.

But when it comes to card business, the Krishak Card has added a new dimension to it and it is much younger than other banking products in Bangladesh. Previously, banks used to design credit cards for high-profile businessmen, top executives of corporate bodies or professional bodies with high net worth. So there was a perception that credit card was only for the rich people or for the upper class people of the society.

Multinational banks first introduced credit card in Bangladesh. American Express, Grindlays Bank Plc and the then BCCI were the pioneers in introducing card business in Bangladesh. Of all the products then, holding an American Express card was deemed a symbol of status. Businesspeople used to show Express cards as a mark of high net worth of a business magnet. So these cards were only for the people in the upper class or upper middle class bracket. The card brands that dominated the market then were Visa Master card, American Express and Thomas Cook. Later on, private banks started offering cards to all sections of people, even to the newly-appointed junior executives of companies or small businessmen with stable incomes.

The main advantage of credit card is it allows a certain amount of credit facility without any security and if the credit amount availed is settled by the bill date, then no interest is required to be paid.

Gradually the card business is increasing in our country as in other developed countries. But still it is within the reach of only a section of urban people, not the mass people.

The recent initiative of BRAC Bank is praiseworthy in consideration of the things involved. First of all, they have chosen a segment that involves risks in terms of security of the credit and the income level needed for determining the credit worthiness of the farmers, whose income level fluctuates along with the uncertain production and market prices of their produce. Secondly, in business no one likes to become a pioneer in such a risky area with a new product. But BRAC Bank has come forward with a product that is designed for the farmers' use. The Krishak Card was first launched in Jhenidah in 2011 and this time they have issued 200 cards for the farmers of Dinajpur district which is known for rice cultivation. The farmers will use the cards to borrow funds and start repayment after selling their produce.

There are many aspects of such a dynamic product. One is banking products have become very limited. Competition in the banking arena has increased many times and is also increasing day by day with some new banks going to enter the existing market. Naturally, the competitive environment needs the existing banks to redesign their products and services and explore new areas of markets for their products, such as the new and comparatively unexplored market of rural banking.

Microcredit extended to the poor people has already gained worldwide appreciation. Still full-fledged banking services for the poor people are absent or in a very nascent stage. The BRAC Bank's launch of modern banking products like card service to farmers deserves appreciation. First of all, the system allows farmers' access to credit without security, as it is difficult for a farmer to get a loan by providing any collateral against it. The loan procedure is another hassle for the farmers as most of them are not aware about how to apply for a loan and get it and sometimes the lengthy loan procedure does not allow them to use the fund for the intended purpose. So they spend the loans for their personal purposes and later on become loan defaulters. But by using credit cards they can buy necessary materials such as seeds, fertilisers and other things as required instantly without any documentation or paper work. This will offer the farmers an easy access to instant fund and make farming more productive and easier for them.

Definitely the aspects discussed are the bright side of the said card, but as usual there are some problems with credit card for both sides - the company and the users. As we know, the interest rate of credit card on an unpaid amount is as high as 30 per cent. So, if it remains same in case of Krishak card, then surely it will be difficult for the farmers to borrow fund at such a high rate. Farmers are not habituated to use such loan facilities. So they cannot plan how to repay an instalment or a full amount.

Moreover, the agriculture sector is rife with uncertainties. Crop failure is a common phenomenon even in developed countries, because no one has got any control over the weather conditions. So, if anything goes wrong, how will they settle their dues? One option is a normal credit shield being applied to normal credit cards. But once again it is going to increase the repayment amount on the borrowed money and for marginal farmers it is difficult to repay.

News: The Daily Financial Express/Bangladesh/8th-Dec-12

City Bank yesterday launched CityMaxx American Express Card first time in Asia, which allows customers to gain interest on money up to 15 days after it has been spent.

“Using CityMaxx card, customers could keep on earning interest as usual for 15 days even after the money has been spent form the account,” said Mashrur Arefin, deputy managing director and chief operation officer of City Bank.

The card offers 5 percent cash back on all spending at major grocery outlets in the country, 1 percent cash back on any spending at any shop and restaurant, said Arefin.

News: The Daily Star/Bangladesh/27-Nov-12

BRAC Bank launched debit card for farmers in Dinajpur enabling them to buy agricultural materials, avail loan and withdraw cash whenever necessary in easier way.

The bank in association with Bestec Investment, partner of the bank for the project, organised a programme in Birganj Degree College at Birganj in Dinajpur Friday to hand over Krishak Card to 200 local farmers.

Ahmed Shamim Al Raji, Deputy Commissioner, Dinajpur, Md. Rafiqul Islam, President, Dinajpur Chamber of Commerce and Industry, Mohammad Mamdudur Rashid, Deputy Managing Director, BRAC Bank, Architect Md. Tariqul Islam, Chairman, Bestec Investment Ltd, attended the programme.

Babu Chitta Ghosh, President, Dinajpur Press Club, Md. Quamruzzaman, Managing Director, Bestec Agro Ltd, officials from local administration offices, local dignitaries and senior officials of BRAC Bank, were also present.

News: The Daily Sun/Bangladesh/18-Nov-12

Hassan O Rashid, Head of SME Banking of Standard Chartered Bank, hands over the first SME collateral free Business Instalment Loan (BIL) to Mahbub Iqbal, Managing Director of AS Knitting Ltd in Dhaka recently.

Standard Chartered Bank has launched collateral free Business Instalment Loan scheme.

Under the scheme, the Bank would provide collateral free Business Instalment Loan up to Tk 10 million for Small and Medium Enterprises. The customers would be able to apply for the loan at any of the 26 branches and 17 kiosks of the Bank, said a press release.

“We remain committed to the development of SMEs by continuously addressing the entrepreneurs’ changing financial needs,” Hassan O Rashid, General Manager, SME Banking of Standard Chartered Bank said.

“During last 8 years in SME banking, we have brought many innovations, especially for small business segment. We are committed to help entrepreneurs achieve desired progress in all sectors and through efforts like this, we want to show that we are here for good cause”, he added.

The first loan was sanctioned to AS Knitting Limited, a knit manufacturer unit operating in the country since 2002.

Mahbub Iqbal, Managing Director of AS Knitting Limited said, “The loan offering was exactly what my company needed for its expansion and the fact that no cash or property security is required to avail this loan, which is its main feature”.

News: The Daily Sun/Bangladesh/19-Sep-12

A Rouf Chowdhury, chairman of Bank Asia, launches the Bank's new product -- Bank Asia Hajj Card -- for hajj pilgrims and hajj agencies as an alternative to travellers' cheques or cash in Saudi Arabia, at a ceremony in Dhaka recently. Md Mehmood Husain, managing director, was also present.

News: The Daily Star/Bangladesh/12-Sep-12