Covid-19 challenge is both a marathon and a sprint
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There are already 60 banks in the country. “The more you innovate, the more you will be able to retain your position and expand footprint.”
As banks are becoming more digitalised, it has to focus on cybersecurity and enhance protection, the career banker said.
The pandemic has induced a change in behaviour among all categories of end-users, be it individuals and corporates, in terms of how digital channels are viewed. While greater use of online payments and online services came as a necessity during the lockdown period, these changes in behaviour will not reverse, according to Bijoy.
There is a significant scope of digitalisation in the trade ecosystem in the country, starting from issuing the letter of credit (LC) to regulatory reports and customs procedures.
Standard Chartered has a customer base of 300,000 in Bangladesh and it feels that it has to ramp up the number of customers. And Bijoy said it is not possible to acquire customers one by one. It has to be done digitally.
In 2018, Standard Chartered was one of the five banks and the only foreign bank that integrated with bKash. As a result, 3.5 crore wallets of bKash became clients of the bank instantly. The bank is also exploring the possibilities of agent banking.
He said the need for brick and mortar branches would be there but it would reduce gradually.
“Rather, it would be good if the bank can meet all the requirements of customers from bills and house rent payments to paying fees to schools and making payment to other banks through the app.”
He said if the country wants to include all the population under the financial system, whether through banks or MFS, it can’t do without digital options.
In November, Bijoy would complete three years as the CEO.
“I am extremely delighted with the achievements in the last three years. The bank had double-digit growth in revenue and operating profit in the first two years.”
The bank also had double-digit growth in the first quarter of 2020. The second quarter affected the business because of the interest rate cap and depressed activity owing to the coronavirus pandemic.
“Overall, the second-quarter was not that bad given the current circumstances at home and abroad.”
He said there were green shoots in July and August. Volumes are almost 80 per cent back. “Year-on-year, we expect to remain ahead of last year.”
During his stint, the bank received more than 54 international awards in the last three years, in a testament to the contribution of the bank to the economy.
Because of the deep uncertainty caused by the pandemic, investors are thinking twice before making any investment decisions. At the same time, a lot of people are thinking about alternative investment destinations away from China.
“Investors would look to move to countries which will not be affected by the geopolitical tension. But Bangladesh is not the only potential destinations investors are looking at. There are India, Indonesia and Vietnam. We have to attract investment proactively,” Bijoy said.
He is bullish about wooing foreign investment and international orders because the Bangladesh Investment Development Authority, the Bangladesh Economic Zones Authority, the Bangladesh Export Processing Zones Authority and the National Board of Revenue are working proactively.
The Prime Minister’s Office has followed up whether a particular remittance of a foreign investor has been carried out and if not, why it is being delayed.
“The Prime Minister’s Office wants to fast-track the process to attract foreign investment. The purpose of this oversight is to ensure that this can be delivered timely. This is a huge cultural change.”
The bank has disbursed all of its quotas under the stimulus packages for the exporters and a majority of the large borrowers. It is facing challenges in distributing the stimulus packages related to SMEs and microfinance institutions.
Term-loan to finance core working capital of the SME clients constitutes the main portfolio of the bank’s SME lending. The bank gives loans for five years. But only the working capital loans with a tenure of less than one year qualify for the stimulus package.
The target for the bank on SME fund disbursement would be achieved within the next 4-8 weeks. The credit guarantee scheme with some modifications can be a potential game-changer.