Banking sector of Bangladesh is more advanced than
that of other countries
An Interview of Abul
Kashem Md. Shirin
Deputy Managing Director
Dutch-Bangla Bank Limited
with
Bangla Times
Not only in Bangladesh, Dutch-Bangla Bank has changed
the concept of modern banking perceived throughout the world. In the present
time, Dutch-Bangla Bank is a popular entity as well as the symbol of a customer
oriented smart bank. The successful use of Information Technology is the main
catalyst behind the accomplishment and popularity of the bank. The Information
technology of DBBL has flourished under the leadership of Deputy Managing
Director of the bank Abul Kashem Md. Shirin. Recently, this interview was
initiated by T H M Jahamgir.
Bangla Times : At present Dutch-Bangla Bank has been
emerged as the lead bank of Bangladesh. How is it possible?
Abul Kashem Md. Shirin : The success of Dutch-Bangla Bank was accompanied by
the Founder Chairman of the bank Mr. M. Shahabuddin Ahmed and the appropriate
use of Information Technology in the bank. The IT issue has been well accepted
by the bank. This is how the bank has reached this level. Once the banking
system was traditional aiming at only deposit collection and sanctioning of
loan. If alike services are offered by various banks, no comparison is possible
to draw among them. In that case, our bank will turn to be an ordinary bank.
Founder Chairman of the bank Mr. M. Shahabuddin Ahmed
thought to shift DBBL from this ordinary line of banking. He opted not to do
what everyone does. We will do such thing that people perceive DBBL as a modern
and advanced bank. We have to render unique services to draw people's attention
to our bank. It was noticed that, nearly all banks would mobilize high-cost
deposit, i.e. FDR. No one paid too much attention in hunting low-cost deposit,
i.e. Savings Account. Banks have to spend more for securing FDR compared to
Savings Account; Savings Account is more profitable. An example will make it
more clear. Assume that, you have opened an FDR worth Tk 1 crore with the bank.
Bank will pay an interest @ 12%, i.e, Tk 12 per annum for Tk 100. But the bank
would have to pay an interest @ 4% only, i.e, Tk 4 per annum for Tk 100 if the
money were collected through a Savings Account. On the other hand, bank will
receive Tk 15 as interest against the loan amount of Tk 100; @ 15% per annum.
This means, bank collects FDR @ 12% interest and gives loan @ 15% interest per
annum. Here, bank secures a profit @ 2.5% which does not subsidies the bank's
expense. The expense is more than 2.5% which includes rent of office space,
salary of the employees, marketing cost, etc. Thus, a bank can’t exist if it
collects only FDR driven deposits. This is why bank should avoid FDR to avoid
loss. So, bank should prefer to collect deposit through Savings Accounts whose
cost is only 4%. Now, if bank gives loan @ 15%, the profit margin will be 11%.
If another 4% is deducted as the operating cost, still bank will secure
considerable profit. The Chairman of our bank noticed the matter and thought
about the way out. For securing deposits through savings accounts, the bank has
to increase opportunities - opportunities to hail customers. What are those
opportunities? It is noticed that customers have to wait in a long queue to
withdraw money from a bank like Sonali or others. At the same time, customers
have to withdraw money within 3.00 pm. They can’t withdraw money at night and
even on holidays. DBBL took an initiative to install some ATMs throughout the
country to remove such problem. So, people will not face problem if they need
money after 3.00 pm., at night, on the holidays including Friday. As a result,
general people will prefer DBBL to other banks for opening a savings account.
As the customer needs money anytime, he will surely maintain some balance in
his accounts; without balance the account will be useless to the customer. In
this context, we started installing ATMs since 2004. Standard Chartered Bank
and HSBC had only 35 and 8/10 ATMs respectively at that time. Starting in 2004
and increasing onward rapidly, the number of DBBL ATMs now stands at 2400, where the number of total ATMs installed by all banks
stands at not more than 4,500. As our ATMs are the highest in number as well as
cover Upazila and village level, customers prefer to have a DBBL ATM
card. A customer can withdraw money from ATM at the time of tour to Coxsbazar
or while traveling to Rangpur for official purpose. He does not need to carry
cash. People are doing numerous accounts with DBBL for this facility. The
number of accounts was 20,000 when we started ATM service in 2004. Now we
maintain 2.8 million accounts. From 20 thousand to 2.8 million - you can
imagine how many people are opening account everyday with us.
Bangla Times : Does only the ATM service responsible
for increasing your customer base?
Abul Kashem Md. Shirin : Only ATM service is not sufficient to entertain
customers. As other banks have already provided ATM service by the meantime, we
are no more ahead of them in terms of ATM services. So, we have to offer new
services and opportunities to the people; such as payment shopping bills using
card. If you withdraw money from ATM, still you need to carry cash. But, the
customer needs not to carry cash if the bank provides POS devices to the shops.
POS device can settle the shopping bill by transferring balance from the
customer's account to the merchant's account by using card. As such, you are
free from the hazard of carrying cash from ATM. By this time, we have provided
5,100 POS terminals to different shops and organizations throughout the
country. Even though, people need more. Customer needs to know the account
balance and has to go to the ATM booth for this purpose. But, he wishes to know the account balance
being at home. People's demand is increasing, even never ending. For instance,
someone has flown to America after opening an account. He wishes, if he could
know the account balance or the amount of interest gained from abroad.
Moreover, he wishes to know if the remittance he has sent to the account is
deposited accordingly. We have introduced Internet Banking to satisfy the
customer. Now, he can know his account status sitting anywhere. He can know
through Internet if the money sent by him from America has been deposited to his
account in Bangladesh. Then, he can transfer any amount from his account to his
mother's or brother's account. Let you have noticed that your account has a
balance of Tk 1.0 million and you want to open an FDR for Tk 1.0 million to
have higher interest. Now, you can open the FDR through Internet Banking.
Bangla Times : What are the other IT related services
offered by you?
Abul Kashem Md. Shirin : I have already explained some IT related services
offered by DBBL; such as ATM service, POS service and Internet Banking.
Moreover, we are providing Credit Card service. We started Credit Card service
in such a way that it is 100% secured. Our Cards contain computer microchips. We
have sent lot of time and money to ensure the security of the card. General
cards contain magnetic strip which can be read and decoded by a simple device.
This decoded data can be used for making a scratch card by which one can
withdraw money from ATM or purchase gold-silver or electronic goods from shops.
We have noticed the frequent instances of card forgery in foreign countries,
specially in Malaysia. We thought - we would avoid this type of frauds. We
thought to do something better. We introduced EMV - "Europay-Master-Visa"
Card. Data of EMV Card is concealed in the Microchips. Data contained in
Microchips can’t be copied. We have shielded our Credit Card holders from card
forgery through the introduction of EMV card. Next to EMV card, we have
introduced the e-Commerce which has enabled customers for buying and selling
goods sitting at home. For instance, I am living in America. I enter the website
of Mina Bazar and select some fish-meat. Then I transfer the money from my card
account to the account of Mina Bazar using Dutch-Bangla Bank e-Commerce payment
gateway. It is noteworthy that, DBBL introduced the mechanism used to transfer
money which is called e-Commerce payment gateway. The card which I use for
purchasing goods could be an American card – say a card from Bank of America.
DBBL will pay the amount to Mina Bazar after obtaining online approval from the
Bank of America (within a minute). After receiving the payment, Mina Bazar will
deliver the goods to my mother's address; this means I have ordered the good
from America, but my mother has received the goods from Bangladesh. Not only
buying goods, it is also possible to pay the school fees through e-Commerce
payment gateway of the DBBL.
Bangla Times : How have the people responded to the
e-Commerce services?
Abul Kashem Md. Shirin : The e-Commerce is used for 2 types of services. One
service is for purchasing goods - as exemplified earlier, fish and meat will be
delivered to my mother. Here fish and meat are products. There is a little
unwillingness among the customers to buy products through e-Commerce. People
can’t be ensured; there is a doubt on the quality, whether the meat or fish I
have selected have reaches to my house or whether the shirt I have purchased is
alike to what the picture shows in the website. This is why buying products has
not been so much popular. Comparatively e-Commerce has been paid a good
response in case of receiving services - where delivery of product/ goods is
absent; such as, payment of utility bills where the delivery of goods is not
required. Moreover, buying of train ticket/ airlines ticket or paying of fees
at school/ college are possible through e-Commerce. These are some the uses of
e-Commerce for providing services. Use of e-Commerce in providing services is
very much popular among the customers.
Bangla Times : How does the mobile banking play the
role in building cashless society?
Abul Kashem Md. Shirin : We have introduced the ATM service to engineer a
cashless society. But, even though the ATM service is said to be cashless, the
use of cash is still visible here. Ultimately, we use the ATM to withdraw cash.
We receive cash from ATM to pay the shoppers. We also introduced POS service to
facilitate cashless banking. But, the POS service could not be extended beyond
the urban enclave. Payment through POS is possible only in some mega shops
within the urban areas. But, we have noticed the use of mobile phone all over
the country, even in rural areas. Therefore, the cashless society is only
possible, if a culture could be practiced for bill payment through mobile
banking for buying goods. For instance, I purchase 1 kg of rice from a grocery
shop and pay the bill from my mobile wallet. I can do the same for having a cup
of tea worth Tk 10 from a tea stall. Everywhere, it is possible to make
transaction through mobile; be it in a village. But, ATM or POS could not solve
these issues.
Bangla Times : DBBL has introduced agent banking.
Would you please give a detail?
Abul Kashem Md. Shirin : Would we be able to deliver banking service to
everyone through mobile. As such, a rickshaw puller does not have the mobile.
So, he cannot be paid through mobile. Besides, government is providing
allowances to the freedom fighters, elderly people and others; nearly 20
million people get the allowances every month. Most of these 20 million people
who get allowances does not have mobile, and thus cannot be incorporated in the
enclave of mobile banking. Only 40 million (excluding users of duplicate SIM)
among the total of 160 million population of the country uses the mobile. So,
we cannot reach most of the people with the mobile banking services. Now, we
are thinking about introduction of agent banking through agents where customers
will use their finger print to authenticate a transaction. We have appointed
various types of shops as our agents, such as grocery shop, pharmacy, electric
shop, phone-fax service provider, etc. Mobile Banking transaction is done
between two mobiles; one is customer's mobile, another is the agent's mobile.
But, for agent banking, agent will use biometric scanner and the customer will
use finger. Finger print will be collected before cash delivery. This means
that the customer does not need to have mobile; transaction will be authenticated
through finger print. This is called agent banking.
Bangla Times : How long this service will start?
Abul Kashem Md. Shirin : It is actually a project. Just now it is running as
pilot project. The project partners are UNDP, Office of the Prime Minister,
Central Bank and Dutch-Bangla Bank as well. Deadline of the project is upto June
this year’
Bangla Times : With your support Dutch-Bangla Bank has advanced far in respect of
Information Technology based banking. Noticeable success is observed specially
in ATM Booth, Mobile Banking, Agent Banking etc. How you got aspiration?
Abul Kashem Md. Shirin : As mentioned earlier, I am not the organizer rather
our honorable Founder Chairman Mr. M. Shahabuddin Ahmed is the architect of
this venture. Actually, this project is brainchild of our honorable Founder
Chairman. You are aware that to implement the project, huge capital investment
is required. So far we have invested Tk 4.00 billion to reach at this stage. A
new bank may be opened by using Tk 4.00 billion. Board of a Bank shall have to
mentally prepare to spend Tk 4.00 billion. We have got support from our Board
of Directors, especially from our Founder Chairman. For this, we could established
and extended the project at this stage. Together with the dreamer of the
project, I am also personally hunger to implement such extensive IT based
banking project. Due to coincide of desire of both, the project has come into
light.
Bangla Times : The project has been advanced so far. How long it will take for our
Bangladesh to become self-reliant in Information Technology like developed
countries?
Abul Kashem Md. Shirin : This is not true. Developed countries may be
advanced far but in banking sector Bangladesh is more advanced than developed
countries. Let me explain. No country in the world has mobile banking system
like Bangladesh. Dutch-Bangla Bank is the only Bank who introduced Bank-Led
Mobile Banking. Earlier, a mobile company of Kenya has introduced mobile
banking but that is not “Bank-Led”. Many banks in the world are far behind in
respect of e-commerce, EMV Credit and debit Cards. Many banks in the developed
world like America Europe could not introduce the said services yet in full. We
have able to reach such stage for which foreigners who visited our country have
become astonished and paid respect to us. They comment that no country in world
have striking IT management system like us.
Bangla Times : Dutch-Bangla Bank advanced a lot. Are not we become self-reliant to use
Information Technology, if all banks in the country use IT?
Abul Kashem Md. Shirin : It’s really depends on aptitude and mental
alertness. Here it is to be understood the business. It is also to be understood
that IT expenses are investment. Here major obstacle/problem is consensus among
the owners and management team of a Bank. Owners want to cash in their investment;
on the contrary, the MD thinks that he is appointed for 3 years. He has to
show/earn handsome profit during his incumbency, otherwise, his tenure will not
be extended further. If a bank put attention to develop IT now, then profit
will not come over night. Profit will come after 5 years. But bank owners do
not want to wait for 5 years. On the other hand, MD, from the management side,
does not want to wait. But if an individual owner thinks that it is my bank and
profit may not come today rather base of the bank will be very strong due to
strong IT infrastructure which will, in turns, make more profit for him in near
future. It is only possible when the Board of a Bank pressurized MD to do it.
If so, the country will go one-step ahead.
Bangla Times : With expectation of getting more profit, owners of the Bank do not want
to invest in Philanthropic activities. But Dutch-Bangla Bank is an exceptional,
why?
Abul Kashem Md. Shirin : Our Founder Chairman thought that investment in the
CSR activities would help poor people of the country. He also wanted to
establish the bank as model bank. He is giant business personnel. He does not
bother about the profit derived from the bank. He believed that Dutch-Bangla
Bank would be emerged as self-reliant bank, model bank and would become bank of
the mass people as well. His spirit is tremendously supporting us to reach at
this stage and to go far. For last 3-4 years members of the Board are not
taking any dividend/profit from the bank. The profit derived from the bank is
being invested in IT sector and/or expended for the welfare of the mass people.
The Tk. 1.02 billion is expended every year only for providing education
scholarships.
Bangla Times : Expert & trained personnel/manpower is required for development.
What plan & strategy Dutch-Bangla Bank has adopted to resolve the issue?
Abul Kashem Md. Shirin : When we started journey with IT based banking we
realized that highly qualified and expert manpower would be required. General
people would not accomplish the job. Special care to be adopted at the time of
recruiting high quality manpower. When we initiate to recruit manpower, many
request come over phone or in person. Requests come from different segment of
the society. If we honor the said requests, we will not able to recruit quality
manpower rather incompetent personnel will be recruited. We must be adamant
that we will recruit competent personnel. There is no want of competent
manpower. Competent person will not go to the door-step of others for
reference. There are many job seekers who go to the door-step of others for
reference due to their bad academic results. If we recruit them, we can’t
expect good performance from them. Therefore, it is imperative to remain
hundred percent impartial and fair while recruiting competent manpower.
Bangla Times : What type of problems Dutch-Bangla Bank has faced while implementing the
job? How do you resolve the problem?
Abul Kashem Md. Shirin : So far as I remember, Dutch-Bangla
Bank has not faced any problem to run the banking
business. Dutch-Bangla Bank has been
earning good profit over the years, almost all portion of the earned profit has
also been spent for the welfare of the mass people. Moreover, Dutch-Bangla Bank
has no liquidity crisis. Our cost of fund is not much high rather low. People
have trust on us. As we are expanding huge amount for welfare of the mass
people, they are reverting our adoration. People do not hesitate to deposit
their money with us. We are in comfortable position.
Bangla Times : Does Bangladesh Bank
prepare to set/laid foundation of modern banking? What type of helps you have
deserved from Bangladesh Bank?
Abul Kashem Md. Shirin : Now-a-days Bangladesh Bank is more
active. Recently Bangladesh Bank has more focused on Information Technology.
Bangladesh Bank has advanced far in Information Technology based banking,
especially after appointment of Dr. Atiur Rahman as honorable Governor of the Bangladesh
Bank, like introduction of Automatic Clearing House. Say, earlier it was taken
more or less 15 days to clear a Cheque in Dhaka while Cheque was issued from an
account maintained with a bank branch in Sylhet. Now, it is being cleared and
deposited in the respective account within a day. Due to adoption of modern
Information Technology, it is possible to introduce Automatic Clearing House,
Electronic Fund Transfer (EFT) and On-line CIB System. Bangladesh Bank is
continuously encouraging commercial banks to erect ATM Booth and start on-line
banking system.
Bangladesh Bank has encouraged us to
introduce e-Commerce. Bangladesh Bank has efficiently and tactfully formulated
Bank-Led Mobile Banking policy. Formulation of Agent Banking policy is
underway. So, Bangladesh Bank has taken IT based different policies for
economic development of the country and we are implementing the same.
Bangla Times : Is it possible to
implement Mobile Banking in Bangladesh perspective?
Mobile Banking already is in place
at our country. In 2011 we have started it and running from last one & half
year in full scale. Now we have 1.20 million mobile banking customers and 26,000
mobile banking agents across the country. Every day more than 100,000 customers
are doing mobile banking transactions.
Bangla Times : But are not these
customers insufficient compared to mobile phone customers/users?
Abul Kashem Md. Shirin : Definitely low if compared. It is
banking. There is no hard and fast rule for a mobile phone customer/user to
have a mobile bank account simultaneously. Mobile phone is used to talk. It may
not a requirement for everyone to deposit money in an account. Moreover, some
people have no money. If someone have no money, why he/she will maintain an account!
Some people have money and they will be the main user of this service. So, all
mobile phone users may not enjoy mobile banking services.
Bangla Times : How do you create
awareness among the customers through your different activities?
Abul Kashem Md. Shirin : We arrange campaign. We inform
people of different villages, markets, schools about our activities. We offer
training for the customers and agents. We have offices in every Upazilla. We
arrange training in this Upazilla office. We have also “Above-The-Line” activities
like TV commercials and news paper advertisements.
Bangla Times : What are the planning for rendering new services to the customer?
Abul Kashem Md. Shirin : Technology is such a thing that we cannot say today
what will be in the next day. Technology is such a thing that 30 years ago we
could not imagine that mobile will create such a revolution. 5 years ago, we
did not think that we should carry banking business through mobile. As such, I
cannot make comment on new technology in advance. When we started ATM service
we also started some other facilities including E-Commerce. After starting
these facilities we thought that we are done and there is nothing new to offer.
Thereafter it was thought that Mobile Banking could be started and after
starting the same it was thought that it was the last one. But after some days,
concept of Agent Banking came into surface and now after Agent Banking, it may
be assume that we have stepped into the last stair of technology. But I know,
this is not the last and many more is yet to come and the ideas of men will not
come to an end so easily. Technology is so rapidly changing that it is
difficult to predict anything in advance.
Bangla Times : What are the Awards DBBL has received till today?
Abul Kashem Md. Shirin : We have received many awards. Specially after
introducing Mobile Banking service we have received five awards. First award
was received from National level. The other four are from International level
and these are e-Asia award, Asian Banker Award, MMT award and Computer World
(USA) laureate.
Bangla Times : What are the main factors for
success of a Bank?
Abul Kashem Md. Shirin : Seven to eight more banks are coming into existence in addition to
the existing 47 banks in Bangladesh. The banking market in Bangladesh is small.
With a view to exist in such small market we shall have to come with new ideas.
We cannot survive with the existing usual banking ideas. Specially, the new
upcoming banks should come with new ideas such as paperless banking where no
paper, no file will exist. For an example, you applied for a loan from a branch
outside Dhaka and the branch send all required papers/documents via courier. On
receipt of the documents at the head office, the paper will move from one table
to another table, proposal will be prepared, series of meeting will be held and
so many formalities. Time has changed. Everything needs to be done through
computer. There is no more room for paper working.
