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The future of banking is digital

Says chief of Mutual Trust Bank, which celebrates 15th founding anniversary tomorrow

Md Fazlur Rahman
Local banks will have to adopt digital platforms and rearrange their products and services accordingly to meet the growing demand of a population who have embraced mobile technology widely, a top banker said.
"Banking will have to become digital thanks to the advancement of technology. So, our services will have to embrace technological solutions," said Anis A Khan, managing director of Mutual Trust Bank.
He, however, said bank branches would not become absolute completely, as it has not happened even in the US despite adoption of the developed technology, and people there still like to go and visit a bank branch.
"However, branches will not be that roomy, and technology and machines will play a big part in the operations," he said.
Khan said the unprecedented advancement of mobile technology in Bangladesh, where 11 crore people have mobile phones and four crore of whom use internet on their devices, has opened the door for banks to come up with financial products for the vast majority of the population.
The career banker referred to a banking industry conference in the US earlier this month where Bill Gates, the world's richest man and a philanthropist, lauded the proliferation of the mobile technology in Bangladesh and talked about the opportunity for banks.
Khan sat with The Daily Star at the bank's headquarters in Gulshan yesterday to talk about a number of issues, ranging from MTB's 15th anniversary to expansion to human resources development.
Set up by a number of leading industrialists and entrepreneuts in 1999, MTB will celebrate its founding anniversary tomorrow.
In less than two decades, MTB has established its footprint in the banking industry.
In 2013, the bank's total deposits stood at Tk 8,437 crore, up by 12 percent over 2012. With a growth of 5 percent, total loans and advances were Tk 5,958 crore.
In the same year, its operating profit was
Tk 202 crore, which was 52 percent higher than that of 2012. Net profit after tax was Tk 57 crore; up by 75 percent over 2012.
The bank has set up more branches compared to its contemporaries in order to boost the lender's capacity to serve customers. The bank will open its 100th branch in its own building at Bangla Motor in the capital today.
At the end of 2014, the number of branches will be 102, ATMs 200 and 2,200 point of sales machines.
The bank also strengthened its financing for small and medium enterprises who now account for about 8 percent of its outstanding loans.
"We are very strong in case of SME banking. They are all successful products," said Khan, a law graduate from Dhaka University.
Khan joined MTB in 2009 and has shaped the bank in a new way since then.
He envisions turning the bank into one of the best performing banks in Bangladesh and make it a bank of choice and a truly world-class bank.
The bank has seen more growth and expansion in activities under Khan's leadership, as it is focused on optimisation of the investment in people, network, technology, products and services.
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During the last five years, the bank has concentrated on its network expansion and capacity building.
Its branches as well as employees more than doubled under his leadership.
He said MTB would bring in exciting new and electronic products in the coming years.
Khan said the bank is bringing in modern banking practices keeping in touch with the changes going throughout the world.
"We are providing standard banking services, as customer service is one of the cornerstones of MTB."
"We are making the customer experience pleasurable through the various alternate delivery channels through contact centres, internet banking and SMS banking."
He said constant improvement of customer services will be a key part of MTB's efforts to become a bank of choice in the coming years. MTB launched a number of structured products with various schemes and facilities recently for customers such as elderly, women, graduates, school students and autistics, farmers and garment workers, alongside regular banking products.
Khan said in the last 15 years, a number of local business groups have grown as MTB grew, and the bank has always stood by its customers in difficulties.
Without naming the group, Khan said a major client recently faced shortage of funds as it branched out to other areas of business.
"We did not distance ourselves from him. We gave him new loans. Now the group is more stable, as we think our job is to support clients during their goods days as well as bad days."
About MTB's role in financing infrastructure projects in the country, Khan said infrastructure projects are normally government-led and very complex.
"We are part of the agreements of the infrastructure projects. Linder those projects, whenever any customer approaches us for funds, we come forward, thus participating in the projects."
The bank is also involved in syndicated loans aimed for infrastructure projects. For example, MTB is already part of about 10 syndicated financing for power projects.
He thanked the central bank governor, Atiur Rahman, for taking the country's banking sector forward in a big way through measures such as Bangladesh Automated Clearing House and Bangladesh Electronic FundsTransfer Network.
Khan said although the non-performing loans at MTB is a bit higher than before the bank is still stable and doing very well compared to other crisis-hit banks.
Last year, the bank had to provision Tk 60 crore which wasTk 200 crore to Tk 300 crore for many other banks.
Khan said the bank's profit took a hit after income went down following cut in its interest rate for lending.
But the board is very supportive, said Khan. "The board always believes in safe and good lending even at the cost of low income. The board has made it clear that it wants to see the bank as stable as it is here for the long-run. The board does not want any sudden rise in profit and then a sudden fall. We are building a very strong bank."
Khan is also a different genre of leader, as he likes to deal with problems and set strategies, leaving his deputies to manage other things.
"I have to think of progress and how to take it forward and give leadership to the bank and if possible the industry."
Khan said the investment has not taken place as expected due to combined problems stemming from the global financial crisis, domestic troubles in 2012 and 2013, power and gas shortage and export market development. He, however, thinks that a lot of investment has taken place in the country amidst all of these developments.
“Many factories have been set up. A number of power plants have been set up. So, if the demand does not rise further new investment will not bring benefit. So, entrepreneurs are careful now and are consolidating."
MTB would strengthen its human resources and technology platform as part of becoming a bank of choice.
"We have made our salary package competitive to recruit top quality human resources and retain the old ones. We are creating a pool of human resources for the bank as well as the future banking," he said.
Chairman of both Primary Dealers Bangladesh Ltd, and SWIFT Member & User Group of Bangladesh, Khan said MTB maintains a very high level of corporate governance
"It has become possible because of founders who are distinguished industrialists and entrepreneurs of the country."
"The directors have given me authority almost unprecedented in the country's banking history. They also never interfere in the running of the bank," he said.
fazlur.rahman@thedailystar.net