Widgetized Section

Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone

Political unrest holds back potential of new banks

oooAKM Shahidul Haque, managing director of Midland Bank, has said the ongoing political unrest in the country is holding back the potential of new banks. He has also talked about various aspects of the banking sector in a recent interview with New Age. Interviewed by Ahmed Shawki.

New Age: What is the condition of the country’s new banks?
AKM Shahidul Haque: The present condition is not so favourable because of the ongoing political unrest and stagnancy in investment. But the long-term scenario is good. The new banks started with Tk 400-crore capital which gave them a solid platform. The latest banking system is also easier than before because of the technological advancement. So the new banks will do well if they maintain the professional and ethical standard because the market is still lucrative.

NA: What are the problems the new banks facing because of the political crisis?
Shahidul: The political crisis is actually hampering the business environment of the country. The investors are shying away because of the instability and the existing businesses are also refraining from expansion for the same reason. So the need of money for productive purpose has reduced. So, all the banks have surplus liquidity which they cannot lend. The existing banks have some long-standing customer network and business continuation but for new banks it is hard.

NA: Do you think that our economy has room for such high number of banks?
Shahidul: I think it has. If you go by the statistics, then you will see around 45 per cent of the people in our country is outside the banking system. That means almost half of the population could be the potential market for the new banks. And it also implies that our economy can afford such number of banks. Bangladesh Bank has a financial inclusion policy for the rural and urban population and the new banks can play a major role in this regard. We have been directed by the central bank to open a rural branch for every urban branch we open. So we will focus on the rural market.

NA: Do you think focusing on rural market will be cost effective?
Shahidul: In the long run it will be cost effective. Now we have diversified products for the rural market like farm loan, small entrepreneur loan. We need to develop more customised products for the rural market. The initial return maybe less than an urban branch but in the long run it will pay off.

NA: Do you think the banking scams in recent times could be a problem for new banks?
Shahidul: I don’t think that it will exactly be a problem but there are issues which are worrisome. The banking scandals like Hallmak and others somehow affected the people and perhaps made a dent in their trust on banking system. I think it has created an opportunity for the new banks to prove themselves. This is the time they can show how complaint and ethical banking the new banks are practicing. For my bank I can say we are highly complaint and focusing on ethical banking. So the central bank and other authorities will do their job to deal with such scams but we, as a new bank, will work to establish an ethical banking model.

NA: How is Midland Bank will play its role among the new banks?
Shahidul: The focus of our bank is to bridge the gap between the rural and urban banking. We are focusing on technology-based banking for the rural market. We are already fully automated with four running branches. We will open another six branches by December and 10 more within the next year. We believe that efficient manpower is our most valuable asset and we are also focusing on that. We have plans of developing agent-based banking to serve clients at cheaper cost.

– http://www.newagebd.com/detail.php?date=2013-12-22&nid=77547#.UrZvnfQW3HA

Share This Post