NRB Bank Limited was established to play significant role in economic activities of the country by attracting NRBs to invest in Bangladesh and for Bangladeshi individuals and corporate to get access to the international market.
Facing stiff competition, we, as a compliant financial institution, are progressing slowly but steadily. However, we are yet to bring significant investment from abroad or open the passage for local entrepreneurs to invest abroad as these need some regulatory requirements. Side by side, standing on strong footing as a financial institution, we are on the process of opening international market access, both for inward remittance and inward/outward local/foreign investment. Meanwhile, we established Foreign Remittance Department in the Bank with necessary expertise. We hope we shall be able to succeed in attaining our objectives shortly.
Mahtabur Rahman, Chairman of NRB Bank Limited said in an exclusive interview with Bangladesh Post.
The following is the excerpts of the interview:
Bangladesh Post: Please tell us the prime focus of NRB Bank and also mention special schemes of the bank?
Mahtabur Rahman: Our prime focus is obviously business growth and ensuring increased profitability for the bank. At the same time, we are progressing with necessary focus on regulatory compliance and improve in service quality. We are also serious about introducing more value-added services based on techno centric modules.
From the beginning, we have introduced centralized process in the bank which is a globally preferred approach and also a regulatory prescription that helps banks to minimize costs, increase efficiency, reduce different risks, less headcounts, low cost alternate channels. We also started real time online banking. We have some unique offers like clients of our banks can use debit cards in ATMs of any bank without transaction fees. We are the only bank that offers foreign currency debit cards in USD, GBP and EURO in addition to BDT. Our credit and debit cards bear EMV chips with the highest security in transaction.
Bangladesh Post: What are the major challenges that the banking sector has been facing at present? What are your recommendations to overcome them?
Mahtabur Rahman: Financial scandals, aggressive lending, classified loans, lack of customers’ confidence, liquidity management were the generalized talking points about banking sector in 2017. New banks had more challenges like difficulty to open Nostro accounts with international banks which restricts availability of credit line impacting LC confirmation, etc.
However, in the financial sectors, banking is still mostly regulated. To overcome the above said challenges, establishing good corporate governance is a prerequisite. At the same time, efficient management, skilled people, experienced leadership, selection of good borrowers, due diligence and overall compliance, effective risk management, sustainable growth disregarding tendency to rapid growth, etc could be exercised more consistently.
Bangladesh Post: Issues like security at ATM booths, cyber security have become serious concern in recent years. Would you tell us whether these may pose a threat to banking sector development?
Mahtabur Rahman: Breach of security is of course a threat to a banking institution. We have to overcome the threats to continue development. For NRB Bank, we are Techno-Centric from inception.. To ensure 24/7 uptime and customer protection (security), bank invested on world-class core banking system form Oracle (UBS), Card Management system (compassplus-TranzWare), robust engineered system of Oracle. We also engaged one of the Big Four audit companies like PWC for vulnerability assessment and penetration testing (VA&PT). To protect from cyber threat and security breach, we deployed several types of control and security solution in our environment and also maintaining network IPS & firewall, Email Spam Guard solution, Ransom-ware protection, Host IPS, Disk encryption, File protection and many more to minimize the cyber threat.
For ATM, bank maintains separate network, anti-skimmer, application control, CCTV, removable media protection. We are working on PCI DSS & Swift Security control to strength our ICT security. Review and updating security is continuous task and the bank is focused on the issue.
Bangladesh Post: Classified loan is considered as a threat to banking business, would you please let us the strategy your bank has taken to avoid loan classification?
Mahtabur Rahman: No doubt, classified loans are major threats to banking business that affects the overall financial sector business. Our Board, Executive Committee that approves large loans, and the management are all very cautious about marketing, selecting and approving loans. Our Audit Committee is vigilant to check bad loans and stops loans becoming bad. Management tries to extend credit facilities to genuine borrowers, priority sectors and after careful risk grading. Emphasize is given on cash flow based financing. Cautious lending and periodic review of existing portfolio are two major strategies we follow to avoid loan classification.
Bangladesh Post: Would you please tell us how the banks can extend support in building a healthy capital market?
Mahtabur Rahman: As financial institution, a bank can contribute to healthy market in different ways. Such as, Banks can participate as institutional investor in both primary market and secondary market. With large capacity of capital, banks can build sustainable portfolio in secondary market which will help market’s depth and liquidity to attain a vibrant capital market. However, currently, Banks have to follow maximum caps prescribed by Bangladesh Bank for investing in the capital market.
As issuer, banks can ensure healthy liquidity with their quality stocks by getting listed in capital market. After listing of IPOs banks may also raise fund through repeat public offer, right share offer etc.
Banks may also establish full-fledged investment banking setup to serve as capital market intermediaries by forming subsidiaries including merchant banks, brokerages, asset management companies as well as ensure quality trustee and custodian services for the eligible investors. Bank’s more stringent policy and internal compliance can also help to restore investor’s confidence by ensuring good corporate governance practices at every levels.
Bangladesh Post: Satisfying customers has become highly competitive. In this context, please mention the excellence of your bank that can attract new generation customers?
Mahtabur Rahman: In fact, banks have to run their operations within certain regulatory framework. If deviation from set rules is not adopted, banks can hardly give any extra benefits to their customers. To attract customers we are offering extra care, personalized service and cordial relationship. Transparency, accountability, good governance, and running affairs abiding by rules and regulations are the virtues that augment reputation of an institution in general, and banking institutions in particular. Moreover, NRB Bank is heavily pursuing digital marketing using NRB Bank Facebook page and its dynamic website to reach today’s tech savvy generation who are reluctant to physically come to bank branches for banking service. These are few of our strategies to attract customers.
Bangladesh Post: Please tell us about the branch network, product range and manpower status of NRB Bank.
Mahtabur Rahman: Currently, we have 36 branches. In addition we have 37 ATM booths and total number of manpower comprising executives and officers is 535.
We have a wide range of specialized Corporate, SME and Retail products in addition to general banking services for customers. We have different lending and deposit products for corporate business houses – providing term loans for infrastructure, industrial, real estate and corporate business purposes; have term deposits, SND, payroll banking including cash management service for countrywide collection and payment of service such as utility bills collection, payment of different fees etc.
We have different SME lending products to help small and emerging entrepreneurs to meet working capital and fixed assets financing requirements. Have several retail deposit and loan products in the form of secured overdraft facilities, unsecured any purpose loans, home loans, car loans, EMI based credit facilities, student banking, e-banking facilities, savings deposit facilities, monthly savings deposits, monthly benefit deposits etc.
For NRBs we have interest bearing Taka Savings account facilities, NRB FCY account facilities, Rising – an interest bearing FC Savings accounts having option for different term deposits etc.
Bangladesh Post: What role NRB banks can play in drawing foreign direct investment (FDI) or investment from NRBs?
Mahtabur Rahman: NRB banks are committed towards providing services to cater NRB’s investment needs starting from bringing in foreign remittance using proper banking channel and to provide investment supports through ‘One Stop’ FDI desk service extended towards NRBs as well as foreign investors. NRB banks can ensure safety of transactions, provide guidance, assistance, information support to eligible investors to encourage inward investments in Bangladesh. NRB banks can also play vital role to establish country’s brand image abroad. NRB banks can also introduce and promote investment products including foreign currency bonds, NRB portfolio investments, investment in IPOs, placements and secondary market along with private equity investments, and venture capital investments by providing investment banking infrastructures and act as capital market intermediaries.