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Success of a new branch depends on proper analysis

  • Published at 09:56 pm September 24th, 2019
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Bangladesh Bank Deputy Governor SM Moniruzzaman a seminar on “Opening New Branches of Banks: Rationality and Reality” on Wednesday, September 24, 2019 Collected

BB deputy governor SM Moniruzzamn tells a seminar 

Success of a new branch depended on proper analysis of a bank before launching the branch, including capacity of a bank to manage a large network of branches, said Bangladesh Bank Deputy Governor SM Moniruzzaman on Wednesday.

“Bangladesh Bank regularly instructs banks to keep the cost of opening bank branch or business centres at lower level,” he said at a seminar on “Opening New Branches of Banks: Rationality and Reality”. 

If the set-up cost of a branch was low, it would help reach break-even point easily, said Moniruzzaman. 

The Bangladesh Institute of Bank Management (BIBM) organized the event at its office in the capital.

“Already we have slightly over 10,200 branches across the country. This is a huge network and is a costly exercise. Moreover, there are active alternative delivery channels (ATMs, agent banking points, mobile banking points, point of sales terminals, etc.) to support the branches,” mentioned Moniruzzaman. 

"It is really important to critically examine and formalize the branch opening functions of banks,” he added. 

BB deputy governor pointed out that the central bank already undertook a few initiatives such as guidelines and directives to streamline the branch opening practices of banks. 

Opening a bank branch was mainly a profit-centred issue for a bank but it was more than that for the regulatory body, said Moniruzzaman. 

Bangladesh Bank ensured a prudent combination between the rural and urban ratio of branches to promote balanced economic development in the country, he stated.  

BIBM Chair Professor Barkat-e-Khuda said that from the national economic point of view, the network of branches should be geographically as diversified and evenly distributed as possible keeping in mind the viability of the branches for promoting financial inclusion and reducing rural–urban disparity and to achieve the SDGs.

A paper titled “Opening New Branches of Banks: Rationality and Reality” was presented at the seminar by BIBM Professor and Director Md Mohiuddin Siddique on behalf of research team. 

BIBM Supernumerary Professor and former managing director of Pubali Bank Helal Ahmed Chowdhury, BIBM former supernumerary professor Md Yasin Ali and Dhaka University Professor Md Maksudur Rahman Sarker spoke among others.