Pubali Bank won't charge

Pubali Bank is now working to transform major functions to be used by the merchants, customers and corporates into digitization using mobile Apps by June 2021 without receiving any extra charges from its clients, a senior executive of the bank has said.

"We've already launched Pubali PI Banking App to provide real time online banking services to our individual clients," Mohammad Ali, additional managing director (AMD) and chief operating officer (COO) of the leading private commercial bank (PCB) told the Financial Express (FE) in an exclusive interview recently.

PI Banking App refers to the mobile financial service of Pubali Bank Limited that enables bank customers to transact and access accounts through mobile devices.

"With this App, customers can easily transfer their funds to other accounts, connects with BEFTN (Bangladesh Electronic Funds Transfer Network), RTGS (Real-Time Gross Settlement) and NPSB (National Payment Switch Bangladesh), pay their utility bills, credit card bills and they will also be able to get their real-time account statement, make stop payment of any outstanding cheque leaves, top-up their mobile phone, and so on," Mr. Ali, a computer engineer turned banker, explained.

He also said merchant account facility will be available in the Pubali PI Banking App by the end of March this calendar year.

A merchant account is a type of bank account that allows businesses to accept payments by debit or credit cards. So a merchant account is an agreement between a retailer, a merchant bank and payment processor for the settlement of credit card and/or debit card transactions.

Merchant account holders from both formal and informal sectors will be able to transact without paying any changes through the PI Banking App, according to the COO. This will help to build less cash society and promote Digital Bangladesh.

"We're also providing services to the contractors for participating e-government procurement (e-GP) without receiving any extra fees or commissions," Mr. Ali noted.

The e-GP system provides an on-line platform to carry out all procurement activities by the Public Agencies - Procuring Agencies (PAs) and Procuring Entities (PEs).

"Such cost free services help us to grow no cost deposit which is in terns helping us to reduce cost of funds," the AMD said while describing the advantage of such free cost services.

"We've also planned to introduce the Pubali Corporate PI Banking App and web based application by this year to provide services including opening of letters of credit (LCs) along with, disbursing loans to the corporate entities," the senior banker disclosed while sharing the bank's future business strategies.

Pubali Bank wants to extend services to the doorstep of its valued customers across the country using the latest financial technology (FinTech) in the near future, he noted.

FinTech is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services using smartphones or the internet.

"Actually, we're working to establish a less-cash and less-cards banking concept instead of a traditional one through introducing different products and services gradually for our customers," the senior banker said explaining his future planning.

Mr. Ali joined Pubali Bank as general manager and chief technical officer in 2008 after completing his graduation and post-graduation in Computer Science and Engineering from the Bangladesh University of Engineering and Technology (BUET).

He also did EMBA major in Marketing from IBA, MBA major in Finance from AUST and Masters in Development Studies from the University of Dhaka with obtaining deans award .

Under his leadership, Pubali Bank developed its in-house core banking software (CBS) to operate the largest real-time online banking service in the first generation PCB in 2014.

He also leads the affairs of information technology, card, branch operation, business development, marketing, research, treasury (front office), international division, consumers' credit, lease, risk management and corporate matters of the bank.

"We've committed to ensure corporate governance through expediting professionalism along with providing better and faster services to our customers using modern technologies," Mr. Ali said while replying to a query.

He also described the long story of Pubali Bank and how to transform a loss-making bank into a profitable one.

Pubali Bank has already created a success story in the country's banking industry on how a public entity has turned into a good commercial lender after it was denationalised in 1983.

The bank started its journey in 1959 in the name of Eastern Mercantile Bank and it was nationalised in 1972.

The trend of key indicators including paid-up capital, deposits and loans show that the PCB has started a turnaround significantly from 2006 that continued till today.

"We're very meticulous in assessing credit risks, observe the corporate governance, successors while sanctioning loans and this helps us to reduce non performing loans (NPLs) to below 3.0 per cent," the AMD said while explaining the loan sanctioning process of the PBL.

The PBL has also planned to bring down the percentage of classified loan at below 2.5 percent by December 2021 from the existing level of 2.70 percent, which is much below the industry average of 8.88 per cent, for improving its financial health further.

"Good borrowers' selection is a prime task to keep the classified loans at a lower level," the COO disclosed.

He also said Pubali Bank is not interested to extend loan facilities to the companies which have no corporate governance.

The senior banker also spoke on different issues including execution of the government announced financial stimulus packages, impact of single-digit interest rate, NPLs situation and managing liquidity in the near future amid the Covid-19 pandemic.

"Ensuring asset quality will be a major challenge for the country's banking sector for 2021-22," Mr. Ali predicted while replying to another query.

About private sector credit growth, the senior banker said such credit growth would pick up if the overall economic activities revamps fully in the near future.

Country's private sector credit growth has maintained a falling trend in recent months due to supply chain disruption amid the ongoing corona virus pandemic.

The private sector credit growth fell to 8.21 per cent (year-on-year) in November this year from 8.61 per cent a month ago, according to the Bangladesh Bank (BB)'s latest statistics.

This growth was 3.29 percentage points lower than the BB's target of 11.50 per cent for the first half (H1) of the current fiscal year (FY 2020-21).

Like other banks, Pubali Bank is also implementing different stimulus packages, announced by the government and the central bank, to help speed up recovery of the pandemic-hit economy of Bangladesh.

"Banks should execute the packages properly to offset adverse impact of the ongoing Covid-19 pandemic on the country's overall business activities," the AMD said while replying to another query.

[email protected]