In an exclusive interview with the Dhaka Tribune's Mehedi Hasan, NRB Commercial Bank Managing Director and CEO, Khondoker Rashed Maqsood, discusses the bank’s present status, future challenges, and vision
Maqsood started his career at American Express Bank, Dhaka, in 1992, as a management trainee and later joined the Corporate Banking Group. He was the Managing Director and Country Officer for CitiBank NA, Bangladesh, for over six years. Prior to that, he worked at Citi Indonesia as Managing Director for Global Transaction Services. Prior to joining NRB Commercial Bank (NRBC Bank), he was recently advisor to the Board of MIDAS Financing Limited.
Maqsood completed his MBA in Finance from the Institute of Business Administration (IBA), Dhaka University, in 1992.
What is the future of banking in Bangladesh?
As a developing nation, we have to rethink the products and services offered by banks. Previously, banking activities were only based in Dhaka and Chittagong. But now, banking activities are spreading in the most remote areas of the country. The future of banking will mostly be about delivering banking services to the unbanked population of Bangladesh.
NRBs (non-residential Bangladeshis) who invest in our country have to pay double taxes. If their investment dividends can be made tax-free, then investing in the country will become easier for them. If this can be done, we will also have more short-term investment.
NRBC Bank went through a critical period in 2017. The bank was hit with allegations of loan irregularities soon after its inception. What are you doing to erase this criticism?
The irregularities were mostly board-related. The board was reconstituted in December 2017 to establish discipline in the new bank. Since our board members are NRBs, they attend board meetings by video conference. The whole meeting is recorded and sent to the Bangladesh Bank. Additionally, I discuss important matters with our managers by video conference twice a month. Now we are emphasizing transparency and compliance.
It was alleged that money had been "lost" from our bank. However, this did not happen. On the contrary, two of our borrowers left the country, which is not unusual. But that was a year ago, and now everyone knows that our foundation is strong.
After joining this bank, I emphasized retail banking, lifestyle loans, entrepreneur loans, and loans for small businesses. Our total deposits now stand at Tk5,593.99 crore, while loans and advances stood at Tk4,811.78 crore. In 2018, our operating profits stood at Tk201.75 crore.
How successful are NRB banks—NRB Bank, NRBC Bank, and NRB Global Bank—in Bangladesh?
There is not much work to do other than facilitating remittance inflows. Moreover, we try to make easy, the system of opening accounts and account operations for expatriates. We are currently working with the central bank on these issues.
Non Performing Loans (NPLs) peaked at almost Tk100,000 crore in 2018. How can the sector rein in the growing NPLs and recover the money?
To prevent such a scenario, it is necessary to hand over new loans to asset management companies, who will recover defaulted loans. Legal complications must also be dealt with.
We have to build up a culture where good borrowers are rewarded and defaulters are punished, thus creating an environment where borrowers will be compelled to repay their loans to maintain their social and family status.
What are the challenges to bringing lending interest rates down to single digits?
Interest rates depend on market forces and should not be fixed. To collect deposits, we have to pay more interest, therefore the interest rate for lending cannot be reduced. It is possible to reduce the lending rate if we get deposits from government organizations at 6% interest rate.
What are the challenges to finding reliable borrowers?
We want borrowers whose credit behavior we can influence, and choose to lend money to those who can work closely with us.