‘Due diligence’ reduces Prime Bank’s NPL

Prime Bank Ltd managed to reduce non-performing loan (NPL) volume to 5.0 per cent in 2017 from around 9.0 per cent three years ago thanks to various measures.

Under a new plan, the bank will strictly follow due diligence before disbursing loan and the borrowers will come under strict monitoring of the bank's specialised team, a senior executive of Prime Bank told a press conference Monday.

The press conference was arranged to mark the 23rd anniversary of the leading PCB.

"We don't want to see any fresh loans as NPL. That is our first priority. To tackle the existing crisis meted out due to NPL, we've already deployed two officers from our law department in each division to take care of this. I hope we will yield a good result by this year," PBL deputy managing director (DMD) Md. Golam Rabbani said.

The bank will also intensify its business focus on micro small and medium entrepreneurs (MSMEs) and consumer banking as part of its latest 4-year policy, its high-ups said on Monday.

In lockstep with the plan, the leading private commercial bank will double contributions of these products to almost 40 per cent by 2021 as it terms MSMEs and consumer financing a 'game changer' in the coming years for the country's banking system.

At the same time, the PBL will further strengthen its loan screening process by assigning skilled and dedicated risk management teams to avert any possible scope of NPL (non-performing loan) while decentralised model through centralised authority to be followed to deal with such financing.

Managing Director (MD) and Chief Executive Officer (CEO) Rahel Ahmed said the bank went through many structural changes in term of business process over the last few years and such transformation was matched with the best global practices.

Terming MSMEs and consumer banking a game changer in the next 5 years in the country's financial system, he said the global top companies being encouraged by rapid expansion of economy and middle class started expanding their attention to Bangladesh.

"So, consumer banking will be a key issue here. I think you (clients) will see a lot of difference in the next 6 to 8 months in terms of consumer and MSMEs financing with regards to PBL," he told the press conference held Dhaka Club in the city.

He said MSMEs and consumer products represented roughly 23 per cent of the bank's balance sheet, which would be increased to almost 40 per cent by 2021 when the country will celebrate 50 years of her independence.

About the MSMEs banking, PBL executive vice president and head of MSMEs unit Mohammed Omar Tayub said they took a localised strategy under which skilled RM (risk management) team comprising people having enough knowledge about the market base were deployed in 80 branches out of 146.

"We're moving in a planned way to figure out risk in the tricky SME business. We've already set up local CRM (credit risk management) hubs in five large regions. By this year, we want to have the same setup in 8 more regions. So, it's a decentralised model monitored by central authority," he added.

Currently, Prime Bank is operating its functions through 146 branches, including 18 SME and 5 Islami banking, across the country. The investment and deposit stood at Tk 198.32 billion and Tk 199.01 billion in 2017.

Overall assets of the bank that started journey in 1995 with a firm commitment of excellent customer services with a difference reached to Tk 256.60 billion by last year.

PBL additional managing director Habibur Rahman, DMDs Md. Touhidul Alam Khan, Syed Faridul Islam and Mohammad Habibur Rahman Chowdhury were present at the press conference.

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