The South Bangla Agriculture and Commerce Bank Limited (SBAC) has been providing banking services relentlessly through 64 branches and 23 sub-branches across the country since its inception in April 2013. In order to quicken its financial inclusion activities, the bank will introduce agent banking services soon.
In an exclusive interview with The Business Standard's Staff Reporter Ahsan Habib Tuhin, the bank's Managing Director and Chief Executive Officer Mosleh Uddin Ahmed talked about various aspects of the bankand its future plans.Here are some excerpts from the interview.
The 9-year journey of the bank presumably was not a bed of roses. What is the present situation of the bankabout a decade after its inception?
The bank started its journey at a critical moment. All the banks in the countryhave gone through a period of crisis at one time or another and overcome it. Our SouthBangla Bank is no exception.At present, the bank has reached the stage when we need to be more transparent and accountable. Our directors also know this. This is a challenge for our careers also. Getting a bad bank in good shape is more creditable than running a good bank.
How did your bank maintain its profit growth successfully duringthe pandemic?
Despite credit being stagnant in the private sector, we achieved profit growth in 2021relying on non-funded income. This non-fund income came from import-export.
In 2021, there was a record growth in the export-import sector, with 56%growth in imports and28%inexports. We used our idle money (usually used in the call money market) in export-import sector. During the time,wesucceeded increasing the bank's idle fund, or AD ratio (advanced deposit ratio), from 72% to 86%.
What is the defaulted loan situation of your bank?
To be frank, the situation is not very pleasant. We already had some bad loans before the pandemic, and the amount of such loans has increased even more due to the Covid pandemic. Banks like ours have the advantage of having small balance sheets. For example, my bank's balance sheet is Tk6,000 crore, and if we canincrease it to Tk12,000 crore,the rate of defaulted loans will be reduced a lot. It is a tough job, but we have to do it very carefully. Our board is also very cautious about it.
Would you tell us about your bank's position on investing in the stock market?
We are increasing our participation in the stock market. Hopefully, activities of our brokerage firm will start next month.Besides, on instructions of Bangladesh Bank, we are making maximum use of the Tk200 crore special fund.
At present, the rate of return from the capital market is good. If the market is not manipulatedby any vested quarter, in 1996 or 2010, it is now possible to make a good profit from the stock markets.
After readymade garment, which sector do you think has potential?
I think the IT sector will play a leading role in export earnings in the near future.There are no barriers for the banks to invest in this sector. But we do not want to invest as the IT sector entrepreneurs come up empty handed with ideas only. And previous experiences of investing venture capitalwere not very good.
If big corporates come forward with new IT ventures, potential of the sector would be fully utilised.And it will be easier for the banks to invest.
What is your bank's plan to bring the marginalised people under banking services?
A large section of the population, especially in the agricultural sector, is still out of banking services. NGOs are abusing this situation, lending money to the farmers at an abnormally higher interest rate. We give loan at 9% interest rate. If we cannot extend this benefit to marginalised people, providing low-interest agri-loan to farmers, our achievement will be next to nothing.
We can reach out to the marginalisedpopulation through agent banking which will ultimately play a significant role in financial inclusion of them.