Special Supplement

Agrani Bank works to make economy more inclusive: Shams-Ul Islam

Published : 12 Feb 2020 08:34 PM | Updated : 06 Sep 2020 02:20 PM

Agrani Bank, the 2nd largest state-run commercial bank of the country, is working in line with the government’s vision for making economy more inclusive to meet the demand of time. The bank has already adopted modern information technology in order to provide trouble-free banking convenience besides introducing online banking to ensure smooth services. The bank is expanding its services as it is becoming more and more popular among people. 

The bank provides banking services to 32 projects worth around Tk. 4,000 crore under the government’s Social Safety Net Programmes free of charges, which is considered as a great service to the people of the country, said Shams Ul-Islam, Managing Director and Chief Executive Officer (CEO) of Agrani Bank Ltd. 

In an exclusive interview with Bangladesh Post, Shams Ul-Islam, a seasoned banker, continuing his 2nd term at the helm of the 2nd largest state-run commercial bank of the country said that as part of employment generation initiative Agrani Bank has recruited 8451 officers in during the two terms of the present government. The bank also recruited 951 officers under freedom fighter quota. 

MohammadShams-Ul Islam, Managing Director and CEO of Agrani Bank Ltd.

He mentioned that to create employment opportunities abroad, Agrani Bank has initiated a project called ABJL to provide loan with single digit interest rate to those who intend to travel abroad to earn foreign currency. Under this project, every person can apply for loan of up to Tk 3 lakh without any security.

Islam responded to a set of questionnaire put forward by Bangladesh Post, especially in regard to the contributions of the Agrani Bank Ltd (ABL) in the industrialization and socio-economic development of the country. Following are the excerpts of the interview.   Bangladesh Post: What role, you think, the Agrani Bank has played so far in promoting banking, reducing poverty and creating employment opportunity in the country?

Shams-Ul Islam:  We live in a country where lot many works to be done to deliver banking services to every citizen. To bring more people under banking service coverage, ABL has introduced ‘Agent Banking’ first ever among the state-owned banks. By setting up 200 agent booths, we are bringing greater number of rural people under banking services. 

We have plan to widen our agent banking network in the coming years. Agrani Bank, following the guidelines of Bangladesh Bank, has taken all-out initiatives to open ‘No frill Accounts’ for the farmers, freedom fighters, government allowance–taking men and women, garments workers, physically challenged people, street urchins, natural disaster victims of rural population by simplifying the KYC. The Bank has already opened accounts for more than 15 lakh farmers with initial deposit of only Taka 10. ABL is working in line with the government’s vision of making the economy more inclusive which is the demand of time. 

ABL has been providing banking services in 32 projects under the Social Safety Net Programs of the government worth Tk 4,000 crore approximately every year without taking any service charge.  As a part of employment generation Agrani Bank has recruited 8451 officers in the two terms of the present government. 

Moreover, ABL also recruited 951 officers under freedom fighter quota. To create employment opportunities abroad, Agrani Bank has initiated a project called ABJL to provide loans at a single digit interest rate to those who intends to travel abroad in order to earn foreign currency.  Under this project, every person can apply for loans of up to Tk 3 lakh without security. Bangladesh Post: Now please tell us about the challenges, the commercial banks are facing in the recent years, specially mentioning the position of the public sector banks?

Shams-Ul Islam: Banking in a global perspective is facing new challenges every single day. Meeting customer expectations, facing competition in providing information technology-based banking facilities, electronic banking facilities, etc. will give some serious challenge to the banking sector. State-owned commercial and specialized banks suffer from problems related to high levels of non-performing loans (NPLs), low profitability; large capital shortfalls.

 Implementation of the Basel III framework from January 2016, under which Capital to Risk-weighted Assets Ratio (CRAR) will rise to 12.5% by 2019, which will put further pressure on bank capital. These problems are escalating continuously. Banking sector need to evaluate and improve its operations so that it can be able to keep up with the pace of change in the banking and financial industry today and the upcoming days.

Bangladesh Post: Coming over the decades, what changes the Agrani Bank has brought in its banking pattern in view to keeping pace with the demand of latest generation clients?

Shams-Ul Islam: Agrani Bank always tries to deliver up-to-date banking services to its clients. Coming over the decades, Agrani Bank has brought drastic changes in its banking pattern to keep pace with the demand of the latestgeneration banking clients. The bank commenced Online Banking solution among all the state-owned banks for the first time and it has the highest number of 'online' branches under core banking system. Till date all of its 955 branches are providing real time online services throughout the country. Most of the banking activities are being carried out using computer software. All of the branches are providing computerized services with internet connectivity along with ‘Online Foreign Remittance Payment Software’ and Online payment system of Western Union, MoneyGram etc. and they are capable of making instant payment of foreign remittance to the beneficiaries.

The Bank has taken various measures for automation of its functions and services. One of the major steps is installation of fully integrated online core Banking Solution (T-24 by Temenos). It has launched SMS Alert service for all amount of deposit, withdrawal and balance confirmation of the customer’s account. At present ABL customers are enjoying the benefit of 24 hours cash withdrawal, balance query, mini statement etc. along with other banking facilities from around 1408 ATMs of 31 scheduled banks under Q-Cash shared networkfrom around 1408 ATMs of 31 scheduled banks under Q-Cash shared network.The bank is continuously improving quality ofitsservices over time with the changing environment and trying to introduce new services to clients and make them understand about their products attributes and  ensure that all of its branches are operating in similar fashion and providing similar product choices.

Bangladesh Post: As a senior and most experienced banker what will be your recommendations to face the challenges like NPL and Cyber security, specially mentioning the steps taken by your bank?

Shams-Ul Islam: Non-performing loans (NPL) is an issue that concerns us. Due to the ever-increasing volume of non-performing loans, our banking sector and the economy in general have taken a negative turn.The rising trend of the NPL is bound to have a long-lasting negative impact on the country’s financial sector. It has also a negative impact on the banks’ profitability.Issuing of loan to bad borrowers is another reason behind the rise of NPLs.Bank officials lack knowledge about the potential customers;thus, they wrongly select bad borrowers who later turn into willful defaulters.So, bankers should be much more careful in selecting the borrower. Then it will be possible to reduce the soaring amount of NPL.    

Lack of good governance in the banking sector is another important factor behind the rise of NPLs. Big loan defaulters are getting various facilities to reschedule their payment of borrowed amounts. Due to lack of good governance, this problem is increasing. Enforcement of good governance—accountability, transparency and rule of law—can bring the banking sector to the right track.

To bring down the amount of classified and written off loan of the Bank to a logical level, financial incentives have been provided for the greater motivation of the executives and officers and separate committees, including executives and officers, were formed. The result is the significant decrease of classified loan.

At present, banking activities are software-based and services are given through online. So cybersecurity is a big challenge for banking sector.Using information technology (IT) in the financial sector has become very widespread. All types of transactions are done using digital systems, thus it is getting much riskier. Digitalization of the banking and financial sector has paved the way for cybercrimes. Banks and financial institutions are confronting proliferation of cyber incidents across the globe.

We have already taken measures to mitigate these risksboth in terms of physical infrastructure and software upgrades.We have already set up a cyber security monitoring cell in our IT Division. For awareness of Cyber security risks, we provide training regularly to our officers.

Bangladesh Post: We know that you have set up ‘Bangabandhu Corner’at the executive floor of your bank, and later the initiative has gain opportunity and recognition, so what is reaction in this connection?

Shams-Ul Islam: I feel proud to get recognition for setting up Bangabandhu Corner at the executive floor of the Bank. From my personal liability and to pay homage to the great leader Bangabandhu Sheikh Mujibur Rahman, I set up Bangabandhu Corner at my Bank.