Country’s economy on the rise

DHAKA: Most of the developed and developing countries of the world are now facing economic recession and all of them are trying their level best to make up their economic stability. It is one of major challenges also for Bangladesh to keep its economy stable.  

The ruling government is on its way to build a happy, prosperous and developed Bangladesh through phase-wise implementation of long-term visionary programs. Bangladesh Bank (BB) is implementing multifarious policy guide lines, legal and institutional programs to improve the economic sector.

Dr. Atiur Rahman has been at the helm of the top most position of the central bank as the governor that covers the much talked about period. He took up this position of the central bank governor in May, 2009. On May 2 next he will start his last year of journey as governor. During this time many of his promotional initiatives were acclaimed. He has earned an identity of poor- friendly economic pilot. His appreciations for infusing humane concepts in banking sector are now reverberating not only within the country but also outside Bangladesh.

Atiur Rahman has recently been awarded with the prestigious Indira Gandhi Gold Plaque by the Asiatic Society, Kolkata, in recognition of his significant contribution to international co-operation towards human progress. The award will be handed to Rahman in a ceremony at the Vidyasagar Hall of the Asiatic Society in Kolkata on May 7.

At this auspicious moment he exclusively talked to banglanews on the achievements of Bangladesh Bank. Excerpts of the first installment of his interview are given below.

Banglanews: During your tenure many effective fiscal measures were taken to restore economic stability in the banking sector. Please say something about the legal, policy and institutional reforms taken by you.

Governor:  Bangladesh Bank has taken up a five year strategic plan (2010-14) to build up a dynamic, efficient and risk- proof fiscal system. Under the plan to make the economy strong and stable a sustained controlling and monitoring system is being enforced. Precisely, necessary measures were taken to ensure financial solvency, liquidity, effective risk coverage and capital availability in the banks and in the financial institutions.

Directives were issued to check money- laundering, financing terrorism and to keep the economy risk free. Many new type of offences in the economic sector were included in the anti-money laundering law-2009.  

On behalf of the central bank Basel-2 policy guidelines were made mandatory from 2010 to assess the financial solvency of the banks and financial institutions in order to ensure the economic stability. Necessary directives were issued to ensure corporate governance and transparency both in bank management and in other financial institutions as well.

Tri-monthly reports are now being prepared to assess the capacity of risk load of the banks. Risk management units have been set up in the banks to identify the existing risks, supervisory work and to build up effective controlling mechanism. A similar cell is also functioning now in Bangladesh Bank.  

Banglanews: You talked about inclusive economy without which macro development is not possible in your idea. What other measures you have taken about inclusive economy?

Governor: Fourteen banks have introduced school banking scheme to bring the students within the framework of banking services. The unemployed youths both male and female now can open accounts in the banks with only Taka 50.00 under the government’s National Service programme aiming to remove unemployment problem.

Measures were taken to open bank accounts with only Taka 10.00 to help the ultra poor for their employment as well as to bring them under the perview of banking service. Similar facilities are being provided to the National ID card holders, workers ID/registration ID issued by the Ministry of Food and Disaster Management and also to the freedom fighters having their pension books. So far 30 thousand freedom fighters have opened such accounts.

Besides, fourteen thousand pension holders under the social safety net program covering old-age pension holders, poor handicapped pensioners, widow and wretched women have been allowed to open bank accounts with the object of helping them reducing their sufferings and harassments ensuring transparency.

Distressed pension holders of Hindu Kalyan Trust have opened their accounts with Taka 10.00. In this way opening of more forty lakhs accounts will be possible. These attempts and its implementation will help expansion of the practical basis of participatory growth.

Banglanews: Bank is one of the regulators of country’s economy. What measure you have taken to modernize the banking system?

Governor: In July 2011 the Credit Information Bureau (CIB) has started formal on- line functioning resulting quick collection of reports of the banks and financial institutions through on-line searching. Before introduction of this system central bank had to wait from five days to months even for getting CIB reports. While within few seconds CIB reports are available now leading to positive impact in banks and financial institutions.

From February 28, 2011 Bangladesh Electronic Fund Solve Transfer Network has started functioning including automated clearing house. For stable economic sector Bangladesh Bank has been working to build up a modern information and technology oriented safe banking system. On-line banking, on-line CIB, automated clearing house and mobile banking including e-commerce are the positive outcomes.

Of the total 47 banks, 37 banks fully and 4 banks are partially are providing on line services.

Banglanews: What steps you have taken to improve the quality of customer services by the banks?

Governor: To improve the customer services it is now mandatory to display the full charts of interest rate of deposit, borrowing and schedule of charges. Banks have been advised to post these chart in the web site. Moreover, the banks have been directed to justify the charges taken from the customers for the services extended to them.

‘Customer interest preservation centers’ have been set up in all bank branches and also in the Head office of BB to earn the confidence and satisfaction of the customer as well as for disposal of the customer’s complaints.

I hope that all these measures will play an effective role to preserve the interest of the customer.

Banglanews: What are the measures taken by you to make BB digitalized?

Governor: BB in recent days has introduced e-tendering, e-recruitment, on-line banking net work, enterprise resource planning, internet system with the object of materializing government’s ‘Digital Bangladesh’ vision. For all these facilities quick decision making has become possible leading to effective execution. All these help the BB functioning with more dynamism and transparently.

Banglanews: How far the banks have advanced in observing corporate social responsibilities (CSR)?

Governor: The banks spent Taka 55 crore as mandatory CSR covering education, health, nutrition, sports, disaster management and poverty reduction activities. In 2010 they spent Taka 391 crore while in 2011 the amount reached at Taka 500 crore.

Again due to BB’s enterprising role CSR has become compulsory activity for county’s banking sectors. The banks have come forward in the government’s poverty alleviation initiatives and employment creation programs covering education, health, nutrition, sports, disaster management, renewable energy and also for the neglected and backward people of the society.

Banglanews: You are giving importance on mobile banking to reach the banking service at the door steps of the people. Speak something on mobile banking service.

Governor: Mobile banking service has been introduced under the present government as part of the  modernization of banking system. So far fourteen banks have introduced mobile banking. People are being given some urgent banking services with the help of cell phone technology. The services include deposit, withdrawal, shopping and utility bill payment, salary payment, withdrawal of money from ATM booth, disbursement of overseas remittance and money transfer. These facilities will help enter modern banking service in shortest time with minimum expense.

Banglanews: Speak something on the branch expansion of the functioning banks.

Governor: During last three years of the present government permissions were accorded for opening 1,112 branches across the country. The growth rate of branch expansion is 819% . On the contrary, in agriculture and SME development sectors permissions for opening 126 new branches were given which did never happen in this country.

Banglanews: What is your opinion regarding the approval of new banks in the country which has led to much talk here?

Governor: Under the present government an specialized bank styled as ‘Probashi Kalayan Bank’ was set up with the aim of providing financial assistance in overseas employment as well as exporting manpower along with expanding investment facilities from the people working abroad. simultaneously applications were invited for new banks.

The board of directors of BB after threadbare discussions has finalized a list of six banks for the local entrepreneurs and three NRB banks for the expatriate Bangladeshi entrepreneurs. BB has taken this decision independently.

Banglanews: What about agricultural credit policy formulation and its progress?

Governor: In 2009-10 and 2010-11 fiscal periods farm loan to tune of Taka 11,512 crore and 12,184 crore were disbursed which is about 97% of the target. The current year target is 13,800 crore.

I think qualitative changes have taken place in disbursing farm loan side by side with the expansion of credit facilities helping the real farmers getting loan in transparent and harassment free conditions. To ensure these conditions monitoring system has been strengthened and a separate inspection division has been opened at BB for the purpose.

Banglanews: What success achieved in opening bank accounts by the farmers with Taka 10.00?

Governor: Such creative arrangements in opening bank accounts never existed earlier. So far more than 95 lakh farmers have opened bank accounts with only Taka 10.00 to get various subsidies provided by the government through banks. In this way farmers are taking modern banking facilities for their benefit.

Beside, a total of 1 crore 30 lakh people opened bank accounts with only Taka 10.00. This is a great achievement.

Banglanews: What are the measures taken in the development of SME sector?

Governor: A separate division was opened in BB for the flourish and development of small and medium enterprise sector. In 2010 for the first time a target of Taka 38,858 crore was fixed after formulating an expanded SME credit policy guideline. In that year the banks and other financial institutions disbursed SME loan of Taka 53,544 crore which was 138% of the target.

In current year (2011), target of SME credit has been fixed at Taka 56,940 crore.

To solve the financing problem in SME sector, the banks and other financial institutions were ensured loan guarantee from three revolving refinancing fund ( BB’s own fund, IDB and ADB).

BDST: 0915 HRS, MAY 02, 2012
Edited by: Shahjahan, Copy Editor/ SM Salahuddin, Output Editor