Emranul Haq, managing director (MD) and chief executive officer (CEO) of Dhaka Bank
Technology is going to be the most important factor behind every development of the banking industry in the coming days, said Emranul Haq, managing director (MD) and chief executive officer (CEO) of Dhaka Bank, in an interview with Mehedi Hasan of Dhaka Tribune. He also talked about banking amid the Covid-19 pandemic, challenges to implement stimulus packages and impacts of single digit lending rate.
The overall business environment is gradually returning to its normal state. How are you responding to the change?
After the long break caused by the Covid-19 pandemic, it is about time for all economic activities to resume. It is good to see that the wheel is moving, and gradually we are moving towards a normal situation.
Strategies formulated and steps taken during this stage can be a decisive factor if the overall banking industry is to sail through. We need to be very careful before making any lending decision as well as procuring deposits. After the deadlock is removed, huge lending pressure will appear, but in this situation, this must be done based strictly based on merit.
How did the transaction behavior and pattern of the customers change due to the pandemic?
Compared to the pre-pandemic days, the customer’s transaction pattern and behavior has been a lot different in the last few months. Small depositors, who generally were used to withdrawing their money on a piecemeal basis, tended to take out a chunk of their money keeping the pandemic in mind. On the other hand, due to the countrywide shutdown, many business houses had to shut down and consequently the recovery from the loans and advances were close to zero.
The government announced stimulus packages of over Tk100,000 crore to support businesses. What challenges are you facing in implementing the packages?
The stimulus packages were a timely decision taken by our prime minister. However, all these packages were supposed to be implemented by the banking industry and the same were to be subsidized partially by the government. Now, due to the extremely stringent cash flow scenario within the banking industry, many banks initially faced difficulties in implementing the packages and maintaining the regulatory requirements.
However, the same was resolved by various policy level changes by the Bangladesh Bank. Banks also had to face difficulties in ascertaining the actually affected borrowers as most of them were unable to commit to their repayments.
In your opinion, what impact would there be on the banking sector due to the imposition of single digit lending rate?
Initially the banking sector had to go through a tough time in coping. We had to bring down the lending rate at once effective from April 1, but the deposit rates were not in effect as the pricing arrangement of term and scheme deposits are not supposed to be modified prior to the running maturity.
Our earnings had been slashed — we were earning less than we were spending and our profitability was nowhere. After that, with time when the term deposits and scheme deposits were gradually being enforced, the overall situation eased a bit.
Having this tremendous pressure on the income side, what strategy have you adopted to maintain profitability?
In order to maintain profitability with lesser opportunity to earn more, there is only one option, which is to curtail your expenses – more specifically, the controllable overhead costs. We have been focusing on this area since the very beginning of the pandemic and tried to bring down our expenditures.
We ensured rigorous monitoring over the expenses and have been able to cut it down significantly. Due to the same, our employee salaries were not affected and we managed to survive the worst situation ever in our country’s history.
Recently, Dhaka Bank has launched a few tech-based products and services. How are the customers reacting to them?
It will not be inappropriate to say that technology is going to be the most important factor behind development of the banking industry in the coming days, which we can see in recent banking practices as well as the customer demand and requirements.
We introduced our mobile banking app “DBL GO” and we have also introduced a few tech-based products for our small and medium enterprise customers as well.
We were the first to introduce “WhatsApp Banking”, through which our customers can access their accounts and execute their transactions without any hassle. Most recently, we introduced an online account-opening platform “Account from Home” for our customer, which is also the first of its kind, through which a new customer can easily apply and open an account with their preferred branch without visiting in person.