Home ›› 31 Jul 2021 ›› Stock
The Business Post: Recently, your bank got listed with the stock exchanges. What kind of benefits are you enjoying? What is your recommendation to attract new banks to come to stock markets?
SM Parvez Tamal: All banks are scheduled banks and public limited companies and the condition of being a public limited company is to be registered with the capital market. There is no other choice for us but to be enlisted with the capital market since the public will have shares of the bank. By entering the market and trading, we have received an incredible response. The bank has piqued the curiosity of investors, resulting in a constant increase in our share price. Our transparency, accountability and progress have led the NRBC Bank to a place of interest in the stock market.
Our real goal here is to be involved in the development and changes that are taking place in the country’s economic and social systems, to change the people’s fates. We entered the capital market with the purpose of undertaking banking at the grassroots level. Our fresh approach is to become active in different levels of the government, from village to town, and downward. We want to involve more people, create employment, stimulate investment, stay involved in CMSMEs and create new entrepreneurs.
TBP: Amid the Covid-19 pandemic, the banking sector is suffering as private investment fell sharply. What steps could be taken to boost up private investment?
Parvez Tamal: In the developed world, banks invest in the short term rather than the long term. Whereas in Bangladesh, we invest for a long term with short term deposits which is a significant ‘mismatch’. It is not a bank’s job to invest for a long term. The responsibility of a bank is to invest for a short period, and this is what happens worldwide. The capital market is the best place for long-term investments. However, private banks played a major role in Bangladesh’s transformation during the previous decade. They stepped forward and showed courage as our capital market was not that much active before and did not have the capacity to contribute to large scale infrastructural developments. Moreover, no one dared to provide as much money as needed for such projects. We gathered the courage for the first time with the Padma bridge project; and today, thanks to that, we can say we are going forward on the same path. We will uphold the global standard.
We must also consider the return of investment of private banks. Furthermore, banks are not solely business enterprises, they have some liabilities. They are service centres or points. Again, another job of banks is to foster new business ventures and provide necessary finance, and in turn, create employment. Also, if you look at the IT sector of Bangladesh, you will see very little financing there, and banks also do not want to understand that it is a sector with huge potential. Banks must come forward in all these sectors.
At the lower level, more investment is required in the agriculture sector, the backbone of the economy of Bangladesh. Although we have achieved self-sufficiency with food, now we need to export our agro-goods and try to get more people involved in this sector. Because, the more people get involved in the sector, the more jobs are created and the safer the banks will be.
TBP: NRBC is a dedicated bank for non-resident Bangladeshis (NRBs). What kind of special services do you offer to them?
Parvez Tamal: We have more than 1 crore 10 lakh expatriates, most of whom working in the Middle East or Malaysia. Many remittance houses are collaborating with a number of banks there, and we are working with those remittance houses. We have been convincing them through meetings and seminars that they should come directly under banking channels. As a result of the communication, remittance flow remained normal even during the Covid outbreak. The 2 per cent stimulus package of the government also played an important role here. We needed to figure out a way for the expatriates to send remittances to the country at a low cost.
The first thing we started doing with the Bangladesh Bank for this was to open accounts for expatriates through e-KYC and keep the accounts active. One of the few banks that had already managed to do so is NRBC Bank. Through e-KYC, expatriates will be able to open bank accounts easily from abroad. We are trying to figure out how to use modern technology to simplify the process for them. Campaigning is also important here and the government is doing whatever possible, as the expatriates will suffer if their investments do not come through a proper channel. In addition, we are trying to convince the expatriates who have the ability to invest that there is an environment for investment in our country. Currently, our bank is eyeing Brunei for such activities. We plan to open a window of our securities company in that country. I believe expatriates will benefit significantly from all these initiatives.
TBP: As a fourth-generation bank, what makes you different from others?
Parvez Tamal: As I have mentioned earlier, we, as sponsor shareholders, have a different purpose. We want to get involved in the country’s progress and development, as well as wish to work out of responsibility towards the country. Banks are a big platform for this from where a lot can be done for the benefit of the people, in various sectors, such as education and health. Banks are major service centres where individuals can go to obtain help with a variety of issues. Banks, as you know, spend 10 per cent of their profits on corporate social responsibility (CSR). We spend this money on education, health, and disaster relief.
You have witnessed our response to the coronavirus pandemic. We provided protective equipment to front-liners like doctors, health workers, law enforcers, and other emergency responders at the time. We set up a call centre with physicians, installed Covid testing booths in several remote upazilas. Banks actually serve as service centres, and we demonstrated our distinction by providing some essential services besides banking activities.
On the one hand, we are providing services through our 83 branches. We have 430 sub-branches and 589 agent booths, including BRTA and land registration booths, those serve the low-income people. Meanwhile, we introduced microcredit to provide single-digit loans to people living in remote regions. The service is being provided across the country through partnership banking. This is what distinguishes NRBC Bank from other banks.
TBP: How to stop the soaring default loans, mostly the wilful defaulters?
Parvez Tamal: Defaulted loan is the biggest issue of the country’s banking sector. Many have made it into a habit of taking money from banks and not returning it. These people should be prosecuted to the full extent of the law. However, it is not possible if only the banks want it. The money banks have belongs to the people. Defaulters in Bangladesh live luxurious lives with all sorts of amenities with the money they take from banks. Foreign loan defaulters do not get to enjoy such facilities.
Like other countries, Bangladesh also requires to confiscate the passports of defaulters to bar them from travelling overseas. The government must take steps to ensure that defaulters do not receive any further services or benefits until the defaulted money is repaid. Loan defaulters should face strict legal consequences for their actions. As for wilful loan defaulters, the government must implement stricter measures.
TBP: Banks have more than Tk 1 lakh crore hanging to be cleared in the finance court. What are your comments on the speedy disposal of these cases?
Parvez Tamal: It is taking a long time to settle these cases after being filed with the court. Loan defaulters are taking advantage of this delay. Proper measures need to be taken to deal with loan default cases as quickly as possible. Moreover, defaulters have the option of filing a writ petition with the court to obtain a stay order on actions against them. But they should not be given the chance to embezzle other’s money and enjoy it for long. In case of a writ petition, loan defaulters should require to deposit a certain amount of money they owe to the bank. “Deposit money first if you want a chance to file writ” — this should be the system.
TBP: What is your opinion about the present status of the banking sector, especially the Covid-19 impacts?
Parvez Tamal: Even amid the pandemic, the country’s economy has grown, which is the result of the government’s efforts. Covid-19 has wreaked havoc worldwide. We have suffered as well. However, the government’s goal at that time was to continue the growth of the economy. Exports plummeted dramatically during this period, putting the sector at risk. The government made a wise decision by announcing stimulus packages, which stopped the economy from collapsing.
During the lockdown period, privately-owned banks acted as front liners because of the courage the government showed. We made full investments at the grassroots level. The government also provided necessary stimulus packages.
