Meghna Bank Ltd, a newly launched fourth generation bank, looks to move forward progressively by its 'prompt, accurate and safe' services, distinguishing itself from other banks, its chief executive officer (CEO) said.
"We will move forward progressively but in a bit different way than that of other banks instead of dreaming to be the biggest in the market overnight," Mohammed Nurul Amin, Managing Director and CEO of Meghna Bank Ltd, told the FE in an interview recently.
"Immediately, it (Meghna Bank) cannot be the largest bank, create large client base or set up so many branches. But it can be a different bank in three ways: delivery of prompt, accurate and safe services. And we are working to achieve this goal," said Mr Amin, having 37-year banking experiences.
He joined the Meghna Bank Ltd last month; earlier, he served another private commercial bank as its MD and CEO for nine years.
Instead of showing any jumping attitude in the competitive market, Mr Amin shared his plan to take this new bank forward progressively utilizing his long experiences in the banking sector.
Meghna Bank, which completed one year of its operation last May, already set up seven branches; it targets to open nine more branches within this year and 10-12 others in 2015.
"We are prioritising the rural areas for setting up new branches and giving attention to the financial inclusion," Mr Amin continued.
Expansion of branches in the rural areas is also needed to spread our services especially the remittance services across the country, he said, adding that "We are looking to team up with a established NGO, bank or IT company" to take the remittance services to the people's doorsteps.
Mr Amin sees the Tk 4.5 billion paid-up capital of the bank as its big strength for the banking business in the competitive market. Thanks to the strength of high paid-up capital, "We can give substantial amount of loan to a single borrower."
As a new bank, if it can utilize the fervour of the new manpower and render new and better services in new areas of the country, "It will have different mark in the market, and the people will accept it as "Meghna Bank" rather than a new bank," the MD hoped.
Till now, there is no non-performing loan (NPL) of Meghna Bank. Its CAMELS rating is also good as a new bank, he said while sounding the bank's good starting.
In a query regarding the prolonged excess liquidity in the market, Mr Amin, immediate past chairman of the Association of Bankers, Bangladesh (ABB), said that due to lack of credit demand, the liquidity increased, and lack of scope to go to the capital market pushed the people towards the banks' FDR and/or savings certificates.
Investment in the savings certificates surprisingly increased in the recent past.
"The credit demand would definitely have to be increased and the investment environment to be better" to overcome the excess liquidity problem, he said.
The old problems such as restrictions and problems in infrastructure and energy, lack of political certainty among the businesses and other stakeholders are also yet to be solved, he continued.
About the GDP growth, he said, "We remain stagnant in 6.0 per cent GDP growth for about last one decade; we can break the vicious circle of 6.0 per cent GDP growth if the barriers in the areas of infrastructure, credit demand, political uncertainty or instability are solved.
In another query on increased cost of lending, he said that the businesses always try to reduce the cost of lending for better business and profit; the interest rate is important among all other costs in the banking business.
To keep the interest rate in a level, there is a central bank-led committee, from where the businesses are taking foreign loan, he continued.
With respect to all businessmen, entrepreneurs and the committee, he posed a question about it that how much of this foreign loan is being utilized to set up new venture and in the real productive and manufacturing sector, or it is being used to repay previous loan and reduce the interest burden.
"If new capital machineries would be imported, we would see its impact in the market," he said. "The matter should be analyzed."
There should also have a limit of this foreign loan on how much of it a single client or a bank can take; because it has to be given guarantee against the loan, he said, and posed another question that "What if the borrowers cannot repay the loan on maturity date; if they pay duly, the banks will enjoy its benefit, but the banks will have to shoulder additional burden if they failed to repay the loan timely."
The foreign loan prevalence is also another reason behind the lower credit growth in the country; as such it is also causing to increase the excess liquidity in the banking sector, the former ABB chief added.