Digital banking Midland Bank's top priority

Midland Bank Limited (MDB) has planned to go digital banking gradually instead of the existing 'brick and mortar' one to provide world-class services to the customers, the bank's top executive has said.

"We're working to transform our services into digital shape in the near future from the existing 'brick and mortar' banking system to meet the growing demand of the new generation," Md. Ahsan-uz Zaman, managing director (MD) and chief executive officer (CEO) of the bank, told the Financial Express (FE) in an exclusive interview recently ahead of the bank's 8th anniversary.
MDB started its journey on June 20, 2013 with a corporate slogan 'bank for inclusive growth.'
As part of the moves, the fourth generation private commercial bank (PCB) has already developed a digital platform- Midland online - aiming to offer better services to their clients.
Through Midland online, customers can view their account transactions in real time, transfer funds within MDB and also to other banks externally, pay utility bills and open digital term deposits, monthly savings schemes all instantly without visiting a branch.
"It can also print account statements and order cheque books and send digital gifts to loved ones," the CEO noted.
He also said: "We also offer comprehensive cash management solutions to our business customers via Midland Cash Management (MCM) on a real time basis."
MDB is now offering treasury bills and bonds through all its branches and developed loan syndication and foreign exchange trading capability quoting two way prices of all major currencies of the world, according to the CEO.
He also said MDB business clients can pay their VAT online, an arrangement that was started by the national board of revenue (NBR) with only three banks in 2020.
"We also offer the ekPay payment platform of Prime Minister's office's a2i project and is part of the Interoperable Digital Transaction Project (IDPT) of ICT Ministry/Bangladesh Bank under which banks, MFS and PSPs would be made interoperable giving a boost to building a cashless society - this is expected to go live in December of this year," Mr. Zaman explained.
The PCB is also functioning as a Participating Financial Institution (PFI) under the World Bank's Investment Promotion Financing Facility II (IPFF II) offering low cost long term financing for infrastructure projects.
Besides, MDB has already signed partnership agreements with three leading mobile financial service (MFS) providers-bkash, Nagad and Rocket-to facilitate its clients for making faster payments using a phone or computer.
"We've also introduced e-Saver account -- MDB e-Saver Account -in line with the Bangladesh Bank (BB)'s e-KYC guideline to offer hassle free services to our clients sitting from home," Mr. Zaman said while describing different digital initiatives of the bank.
Interested clients will be able to open such accounts using their smart phones through providing photos and national identity cards (NIDs), according to the CEO. "MDB e-Saver Account is now the most user-friendly, affordable and smart account in today's banking industry."
The fourth generation PCB has also planned to strengthen financing in the cottage, micro, small and medium enterprises (CMSMEs) and retail banking gradually along with corporate entities aiming to bring more un-banked people in the banking network.
"We're working to reach the number of our agent banking centres to 100 by the end of this calendar year from the existing level of 70 to help the ongoing financial inclusion initiatives across the country," the CEO said while replying to a query.
He also said MDB has launched the agent banking programme a few years back with a strategic initiative to help achieve sustainable economic development through boosting financial inclusion activities in Bangladesh.
"We're also focusing more on CMSMEs and retail banking aiming to minimize risk for with diversifying our investment portfolios," Mr. Zaman, a 39-year experienced banker, said while replying to another query.
Prior to joining MDB, he was working for Mutual Trust Bank (MTB) as additional managing director with responsibility for business catering to companies and individuals, international trade Services, information technology and alternative delivery channels.
Prior to MTB, he worked for Bank of America in New York, at its global wealth and investment management division with responsibility for business across a wide assigned territory.
He has diversified banking experience, having worked at home and abroad, serving JP Morgan Chase Bank, Morgan Stanley, BNP Paribas and ANZ Grindlays Bank where he joined as a management trainee in Dhaka in 1982.
He completed his MBA from the Institute of Business Administration of University of Dhaka and is an accredited mediator certified by CEDR of the UK.
The senior banker also spoke on different issues like rising trend of classified loans, corporate governance and surplus liquidity situation in the country's banking system.
"The volume of non-performing loans (NPLs) may increase in the near future after phasing out the regulator policy support," the CEO said while predicting the pressure on classified loans in the banking sector in the coming quarters.
The borrowers are allowed to clear their installments on continuous, demand and term loans by June 2021, instead of March 2021, on the basis of banker-customer relationship, according to a notification issued by the central bank on March 24, 2021.
Besides, the central bank offered a deferral loan classification facility from January 2020 to December 2020, considering the adverse impact of the Covid-19 pandemic on people and businesses.
The CEO also said the credit culture has seen some deterioration in recent times which has come under increased stress due to the ongoing Covid-19 pandemic.
Meanwhile, the volume of non-performing loans (NPLs) has already increased by more than 7.0 per cent or Tk 63.51 billion to Tk 950.85 billion during the January-March period of 2021 from Tk 887.34 billion in the preceding quarter despite providing policy support by the central bank in relation to loan classification.
Regarding implementation of the government announced stimulus packages particularly for the CMSMEs, Mr. Zaman said MDB is implementing the stimulus package in line with the BB's advice.
The central bank has already asked the banks and non-banking financial institutions (NBFIs) to execute the Tk 200-billion financial support for the CMSMEs by June 30 this calendar year.
MDB has already implemented more than 85 per cent of the target, set by the BB earlier, under the package, according to the CEO.
The government has so far announced a total of 23 stimulus packages worth Tk 1.24 trillion to offset the shock of the Covid-19 pandemic in various sectors of the country.
The packages, equivalent to 4.44 per cent of the country's GDP (gross domestic product), are being implemented under the supervision of the central bank and the ministry of finance.
About the quality of services, the CEO said MDB considers a client as a king and tries to achieve the confidence of their clients through offering quality services.
"We, from the very outset, are determined to render un-parallel financial services to our clients, to build a relationship that would exist from generation to generation," Mr. Zaman explained.
He also said: "We're keen to maintain a 'compliant culture' in every aspect of banking, not only in respect of regulatory authorities but also shareholders, stakeholders, patrons and well-wishers.
Currently, the PCB is running its businesses with 34 branches, 8 sub-branches along with 10 bill collection centres across the country.
MDB has 124 foreign correspondents across the world and offers both conventional and islami banking services under its Islamic banking window 'Midland Bank Saalam'.
It's long term credit rating, issued by Credit Rating Agency of Bangladesh (CRAB) was upgraded to A1 recently and its short term rating is ST 2.
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