FE Report
Finance Minister AMA Muhith Saturday said he would go on 'retirement' from December next.
The octogenarian minister speaking at the Annual Meeting-2018 of Agrani Bank said: "I've been working for long. Now I truly know that I am going to retire, and it will be in December next."
Mr. Muhith asked the bankers to properly scrutinise the project proposals and follow the know-your-client (KYC) criterion to establish mutual trust with the clients.
"Keep in mind two things when you provide banking services; firstly, when you get a project proposal, scrutinise it correctly … because proper evaluation of a project is a matter of special accomplishment which will reduce the bank's risks in lending," he said.
The minister also suggested the bank authorities to develop expertise in different areas, which, he said, would help them assess project proposals properly.
"Secondly, one of the key requirements for the bankers is meeting the KYC needs; so, try to know the person or organisation that comes to you for services, because a deep relationship with the client will help both the parties," he told the Annual Meeting at a city hotel.
Mr Muhith came up with the instruction at a time when the country's banking sector was struggling with poor recovery of loans, particularly from the businesses.
Presided over by Agrani Bank managing director & chief executive officer (CEO) Mohammad Shams-Ul Islam, the meeting was also addressed by State Minister for Finance and Planning MA Mannan, Bangladesh Bank (BB) governor Fazle Kabir, Banking and Financial Institutions Division senior secretary Md Eunusur Rahman and Agrani Bank board chairman Dr Zaid Bakht.
The finance minister said that though there are many banks in the country now, their services are yet to expand to the expected level.
He felt that there should be further expansion of bank branches as financial activities in the country will be intensified further with more and more people getting connected with the banking channel.
He called upon the bankers to discuss more about taking corrective steps in the banking sector because it needs to be cultured and spread further.
Speaking at the programme, governor Fazle Kabir said: "Agrani Bank has done well last year, but lending is quite low when we are trying to stop excess lending by the private banks."
He said Agrani Bank has a scope to easily increase its ADR to 80.5 per cent from existing 60 per cent as there is a need for credit currently.
Talking about recovering the default loans, Mr Kabir said that resolving the cases relating to default loans take time in court which should be reduced.
He also advised the banks' authorities not to concentrate only on few sectors in providing loans.
Agrani Bank chairman Dr Bakht said that many people in the country have negative perception about the financial sector as they think banks are the place for irregularities and corruption.
The government needs to remove that perception from the people's mind by making public the corrective steps taken by the authorities against the allegations.
He also noted that lengthy legal process in settling the cases of financial sector is the key barrier to realising the default loans.
Agrani Bank CEO Shams-Ul Islam said that the bank in 2017 made an operating profit of Tk 9.50 billion against Tk 5.55 billion in 2016, showing a sharp increase by 71 per cent.
Deposit of the bank stood at Tk 530.53 billion in 2017, increased by 7.0 per cent from 2016's Tk 494.05 billion while loans and advances of the bank last year amounted to Tk 319.12 billion compared to that of Tk 265.87 billion in 2016. The credit growth was around 20 per cent.
The advance-deposit ratio (ADR) of the bank was 60 per cent last year which was 54 per cent in the year before, he said.
Of the total 941 branches of the bank, 43 incurred losses last year as compared to 78 in 2016. The volume of classified loan of the bank declined to Tk 51.15 billion last year from Tk 58.78 billion in 2016.
The bank managed to realise Tk 5.76 billion of classified loans in cash and Tk 12.88 billion through rescheduling.
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