Dhaka Lender shapeshifting with pandemic
When nearly all banks are struggling to survive from the ongoing financial meltdown due to the coronavirus pandemic, Dhaka Bank has introduced a novel banking product that will assist clientele open their account from your home.
The lender rolled out the merchandise named "Account from Home" in mid-May to help clients open accounts by method of maintaining social distance, Emranul Huq, managing director of the bank, told The Daily Star in an interview recently.
The agents of the lender now deliver welcome pack at customers' doorstep (maintaining health insurance and safety standard) including free debit cards and cheque reserve and collect documents with their signature.
The banks' accounts are increasing at a faster pace following the product's start, Huq said.
The lender, which marked its 25th anniversary on July 5, invested practically $7 million this past year to upgrade its online platform as part of its effort to make both the digital and virtual banking lively.
"This has helped run our business to an excellent extent at the same time when banking institutions from across the globe encourage clients to accomplish banking while sitting down from home to control the spread of the pandemic," Huq said.
The lender has recently introduced a good number of digital products riding on the investment, which are serving its clients, he said.
Another virtual banking merchandise namely "Dhaka Lender Trade Cloud" has been introduced, which now assists clients to open up letters of credit sitting from their house and office.
The approach is allowing clients to submit all export and import-related records digitally. The businesses are being allowed to carry out trade-related procedures just by arriving at a branch once.
The bank, which commenced its commercial operation in 1995, is among the leading players in trade-based financing in Bangladesh. It makes up about a lot more than 3 % of the country's total trade volume.
Dhaka Bank primarily started its trip with only 1 corresponding bank to do its foreign exchange related banking, however the amount now stands at 450, in what may very well be the lender's developing acceptance across the globe.
"We will be maintaining a line of credit with 30 global banking institutions and several multilateral organisations - International Financing Company and the Asian Creation Bank.
They have provided a exceptional amount of assurance and funded loans due to Dhaka Bank's strong manufacturer image, said Huq, who was simply promoted to the post of MD in February from the prior position of additional managing director. He has been with Dhaka Lender for 23 years right now.
The lender is now campaigning to popularising its online product namely "Dhaka Bank Go" in a way that clients conduct their banking smoothly including inter-bank fund transfer, utility bill payment, mobile phone recharge and pay tuition charge for educational purpose.
Banks must enhance their digital and virtual banking as the pandemic has given a good lesson that manual banking is not possible all the time.
"Improving the skill in manpower is our key target in the days ahead. And we will help to make tech-savvy manpower to maintain with enough time," Huq said.
Quality human asset, technology-based improvement and great corporate governance have been the lender's emphasis since its inception.
The principles have already given several awards.
Dhaka Bank received 9th IFC Trade Award 2019 as a Best Issuing Lender in South Asia for best utilisation and functionality of the Global Trade Finance Course limit maintained with IFC.
Besides, the lender has been awarded 'Lender of the Year-2018 in Bangladesh' seeing as the industry normal for banking excellence from The Banker (UK) because of its strong management, audio business model, banking improvements and prudent Risk methodology.
He also touched upon the ongoing situation found in the banking sector, declaring lenders will need to offer their all-out effort to revive the economy as the majority of the stimulus plans should be implemented by them.
So, banks will have to implement the stimulus deals quickly.
The central bank has allocated Tk 758 crore for Dhaka Bank to disburse to large borrowers in the service and industrial sectors under the stimulus package of Tk 30,000 crore.
"We've already taken an initiative to disburse the amount to 257 customers," said Huq, who began his banking career on 1986.
But it isn't an easy task as client assortment and their assessment are very important and time-consuming too.
Of the total amount for the large borrowers, the lending company has recently sought approval from the central bank to disburse Tk 200 crore immediately.
Besides, the BB provides allocated Tk 256 crore to disburse compact and medium enterprises beneath the stimulus bundle of Tk 20,000 crore.
Meanwhile, the bank has already taken approval from its panel and already started offering the fund to the SME sector.
Dhaka Lender will distribute the reported stimulus money within mid-August if the approval is secured.
Huq feared that both banking institutions and debtors would fall into deep issues if the stimulus fund could not come to be disbursed to the marketplace in time.
Profit in banking institutions has recently declined alarmingly because the last week of March when the federal government had restricted activity to regulate the pandemic.
The country's exports and imports were hit hard both by the neighborhood and global lockdowns.
Lenders' benefit from the foreign trade plunged almost into zero during the lockdown.
He, however, said forex business in Dhaka Bank had strongly rebounded in-may when the government began to relax the shutdown.
But, imposing a 9 % cap on all financial products except credit card has dealt a huge blow to banks mainly because 80-85 % of profit comes from the interest income.
"Against the backdrop, we've taken several actions to keep carefully the wheel of the earnings moving by method of cutting operating and deposit costs."
Although all banks might not exactly achieve their gross annual profit target towards the end of the entire year, Dhaka Bank is relatively confident.
But banks need to take a cautious stance to curb the upward development of defaulted loans as the mortgage moratorium for businesses will end in September.
As per the central lender instruction, borrowers are believed as regular clientele until September in spite of non-payment of their loans instalments from January.
The central bank should extend the moratorium period until December to tackle defaulted loans.
Huq expressed his gratitude to the central lender as it had taken plenty of initiatives to help both banks and borrowers.
He, however, said that banks shouldn't consider the timeframe of the moratorium and they'll give all-out work to recuperate the loans to avoid the deterioration of their fiscal health.
Banks must strictly monitor their clients' businesses in a way that they could devote some time befitting decision.
If banks adopt a tranquil attitude to the end, the whole banking sector will face a crisis.
He went on expressing a trust that the forex reserve, which includes recently crossed $36 billion, can help the nation to get its market when the global businesses will receive a tempo.
He, even so, said that a lot of the importers 've got an expansion to clear the import charges for the moment, which has also widened the quantity of the reserve.
The central bank should closely take care of the reserve in a way that the large deferred payment won't put any adverse effect on the volume.
