State-run banks can make services more customer-friendly: BB governor   

Although state-owned banks have the opportunity to provide customer-friendly services, their services have not yet improved to that great an extent, Bangladesh Bank (BB) Governor Fazle Kabir said on Thursday.

"State banks have shortcomings in debt processing, which need to be overcome. As Sonali Bank holds the leading position in the banking sector, your [officials] ill-treatment of clients will not be acceptable. You must be careful so that no such allegation arises," he said at Sonali Bank's 50th founding anniversary and Independence Day celebrations. 

Finance Minister AHM Mustafa Kamal, Finance Secretary Abdur Rouf Talukder, Sonali Bank Managing Director and Chief Executive Officer (CEO) Md Ataur Rahman Prodhan and Bangladesh Bank's former governor Atiur Rahman, among others, spoke on the occasion at the Bangabandhu International Conference Centre in the capital. 

They said since the emergence of independent Bangladesh, Sonali Bank has played a leading role in the development of the country's economy and the banking sector. The role of this bank has been appreciated even during the Covid-19 pandemic. 

However, microfinance needs to be further enhanced by proper loan processing, said the financial policymakers and stakeholders.

They called for new financial services and innovations to bring the banking system under automation.

"After the Hallmark incident, there has been a fear in Sonali Bank's loan disbursements. It must be overcome. You tend to avoid giving out loans to keep yourself safe. Again, you give loans to big projects only; that is not acceptable," said Fazle Kabir.

He called upon the Sonali Bank authorities to bring down their defaulted loans. 

The governor said the bank has brought down the number of its lossmaking branches to 16. "We would expect it to come down to zero quickly," he put it.

There are 61 conventional banks in the country and of them, five are state-run and three are specialised. 
AHM Mustafa Kamal said in the last three years, the government has not provided any banks with capital support to reduce their shortfall. 

"We will need the cooperation of banks to alleviate hunger and poverty by 2030. This country will be developed with the cooperation of all," he said.

"The average interest rate on bank loans has been brought down from 12.3% to 7.1%. At present, the total loan segment in the banking sector is Tk12.45 lakh crore. Agricultural credit has quadrupled and 11.44 crore people have joined mobile banking," the finance minister added.

At the end of 2021, the total assets of Sonali Bank, which emerged as the largest and leading nationalised commercial bank soon after the liberation of the country, stood at more than Tk170,000 crore. Its outstanding loans are over Tk69,000 crore and defaulted loans amount to 16.35% of the disbursed credit. 

Abdur Rouf Talukder said Sonali Bank's defaulted loans will have to be reduced. 

"We do not want to see a decrease in percentage. We would also like to see that it has decreased quantitatively," added the senior secretary to the Finance Division.

Md Ataur Rahman Prodhan said Sonali Bank has played an important role in disbursing loans from the first stimulus package in the pandemic.  

Referring to media reports about the bank's capital deficit, he said, "When there is any news about our organisation, it is difficult for us to do business with international banks. We have to spend a lot of money to deal with them."

Mentioning that Sonali Bank is providing low cost services for the development of the country, the CEO said it opened letters of credit worth Tk96,000 crore for the construction of the Rooppur Nuclear Power Plant, which saves the government Tk5,000 crore.

For this service, the state bank has received only Tk20 crore. Besides, the bank is financing various projects in the country at nominal interest, he said, adding "Sonali Bank would not have had any deficit if it had collected regular charges from the government."

Atiur Rahman highlighted the contribution of Sonali Bank in the recovery of the war-torn country. "Sonali Bank has been providing good customer service since independence. That trend is still going on. State-owned banks were at the forefront of customer service.

Private banks started rolling out in the country in 1982," added the former central bank governor.

He said the state-owned banks are doing the most work in the marginal areas of the country, but they are not getting any publicity.

That is why they have to increase their publicity.

Deputy managing directors, general managers, deputy general managers, branch managers and all levels of officers and employees of Sonali Bank were present on the occasion.