As the master of banking reforms in Bangladesh, Mr. Syed Abu Naser Bukhtear Ahmed is not only an Independent Director of Dhaka Bank Limited and IDLC, but is also the Chairman of Financial Excellence Limited and Managing Director of Trade hub Limited. This professional banker with over 40 years of experience has shown his every skill in formulating policies, promulgating laws, and has significantly contributed to the development of banks. Moreover, this man of academic excellence, who has obtained his Masters Degree from IBA in 1969 from the University of Dhaka, expanded his services to three Central Banks of Pakistan, Bangladesh and UAE over a span of 25 years (1970-1995). He has also led different large private banks like Arab Bangladesh Bank Limited, Prime Bank Limited and Southeast Bank Limited as its President and CEO from 1995-2004.
Mr. Bukhtear Ahmed was appointed by the government of Bangladesh with the task of streamlining the Agrani Bank Limited as its Managing Director & C.E.O (2004 to 2010). This was also a job with PwC-Price Water House Coopers and World Bank where he was the CEO from 2004 to 2010. In a gist, Mr. Ahmed’s well-known career also includes portfolios like: Chairman of Bangladesh Foreign Exchange Dealers Association of Bangladesh, Governing Body Member of Association of Bankers, Bangladesh and many more. In recognition of these huge achievements, as a banker, Mr. Ahmed has been awarded several prestigious awards on numbers of different occasions. The Notables awards are: Artho Banijjo Financial Performance Award (2009), Chandraboti Gold Medal (2008), World Strategy Summit “Strategy Leadership Award” (2007), Dhara Gold Medal (2006 & 2005) etc.
In 1969, Bangladesh, the then East Pakistan, witnessed the uprising of a democratic political movement which gained momentum leading to the liberation war in 1971. In the same year, Syed Abu Naser Bukhtear Ahmed, a young MBA graduate from the University of Dhaka, began his banking career at the State Bank of Pakistan, Karachi.
The two events are unrelated, but a couple of years later when Bangladesh would gain independence and struggle to be re-born socially, politically, and economically, this young man would play a key role in revolutionizing the country’s banking sector. From the privatization of the banking sector to the introduction of credit cards and automated teller machines (ATMs), this man would witness and contribute towards some of the most significant changes in the country’s banking history.
In an interview with Fintech, Syed Abu Naser Bukhtear Ahmed, now the chairman of Financial Excellence Limited, Dhaka, opened up about his struggles in post-liberation war Bangladesh and discussed how he ended up becoming a pioneer in the banking industry.
“I was picked up and tortured by the Pakistani army,” said Ahmed, reminiscing about the night when a trunk full of explosives was found in his home, which the freedom fighters had left for safeguarding. “There were 17 of us who were captured together, but six of them, Rumi, Azad, Bashar, Jewel, Bodi, and Altaf Mahmud, were not released. Eleven of us were let go.”
In September 1970, Ahmed was transferred to the State Bank of Pakistan’s Dhaka office, where he continued to work as a PA until the night he was captured by the army. After the war, the branch was renamed as Bangladesh Bank.
“In 1974, I found a job opportunity at the Central Bank in the United Arab Emirates. I worked there for 21 years,” he said. “Later, in 1995, I took voluntary retirement and shifted to Canada, where I stayed for about a month.”
In late 1995, Ahmed joined the Arab Bangladesh Bank (AB Bank) as the Executive Vice President. Later, he joined Prime Bank as the Deputy Managing Director and continued to climb the ladder to become the Additional Managing Director and later worked as the Managing Director (MD). In 2001, he joined Southeast Bank as its MD.
“In 2004, I was asked by the government of Bangladesh to streamline Agrani Bank Limited,” said Ahmed. “I was the CEO on an advisory board with 10 members of PricewaterhouseCoopers (PWC) to reform the bank.”
“From 2004 to 2010, within 6 years, I was a part of 2 major reformation tasks at Agrani Bank that took 3 years each. Then I retired to start my own business,” he added.
Ahmed explained the setbacks and challenges he faced in Bangladesh’s banking sector as he noticed major differences from the banks he had worked at abroad.
“When I arrived here in 1995, the banks were going through an ‘after liberation effect’ downfall,” said Ahmed, adding that the banks were in poor condition.
“There were no rules, no policies, no financing system regulations or procedures,” said Ahmed. “It seemed like everyone was just working by their own rules.” Ahmed explained that although a plan was made under the patronage of Akbar Ali Khan, the former minister of finance, to restructure the banks, it proved too difficult to implement banking commission.
He continued, “Before I joined, there were only a handful of active banks, like the Eastern Bank Corporation in Uttara and the Eastern Mercantile Bank, which is now Pubali Bank.”
“A major difference was that the banks abroad were heavily computerized, while ours weren’t,” said Ahmed. “If there were any errors, we had to go back and manually check every record. Now you can see managers leaving sharply at 5 PM, but back then no one could leave until the books were closed for the day.”
One of the biggest changes that took place after the liberation war, explained Ahmed, was the decision to transfer ownership of companies from private entrepreneurs to the state.
“Private Banks emerged in Bangladesh in the 1980’s, but the decision to turn all private banks into government banks was taken right after the liberation. Thus we saw a lot of problems in financing the banks as there were huge amounts of loan involved.”
In the late 1980’s, a couple of private banks emerged in Bangladesh, like the AB Bank, IFIC Bank, United Commercial Bank, and more.
“These were all considered to be the first generation banks, there were about 10 of them,” stated Ahmed.
Later, Ahmed witnessed the privatization of banks in Bangladesh, when the second generation banks began arriving after 1995. First, it was Prime Bank, followed by Southeast bank, Dhaka Bank, Al Arafa Bank, Dutch Bank, and more.
“The banking management system in our country was also extremely different than the ones abroad,” said Ahmed. “For example, if a customer wanted a loan, the manager might give it to him depending on whether he liked the person or not. The manager also had problems managing marketing, accounting, etc.”
“Banks abroad, however, had a separate department for each of these tasks, so there was better management,” added Ahmed. “I do need to say though that despite all the problems, my colleagues at the AB Bank were some of the best managers and people I’ve ever worked with in my career.”
According to Ahmed, any bank can be brought in order if it has a good managing director. A good MD, he added, is a person who is honest, responsible and accountable. During his time as the MD at AB Bank and Prime Bank, Ahmed believes he achieved some of his greatest accomplishments. For example, at AB Bank, he introduced the first ATM.
“There was one near Gulshan club and another near Kawranbazar,” said Ahmed. “We had a profit cash flow of about 20 percent with 40 percent bonus, and later during my time as the MD at Prime Bank, the cash flow was 60 percent with 40 percent bonus. So there was a lot of profit made during my time.”
“At the end of five years, we had a classification rate, or nonperformance rate, of less than 1 percent. This was a great achievement that I was proud to be a part of.”
According to Ahmed, his greatest achievement at Southeast Bank was concentrated around automation and the introduction of credit cards, which he later introduced at Prime Bank as well.
“I think this was probably the first time credit cards were introduced by any private bank in Bangladesh,” said Ahmed.
The turning point in his career came with a job offer from Agrani Bank, a job that he hadn’t even applied for.
“I knew that they were restructuring and would probably hire new people, but I expected some of my seniors to be called, not me,” said Ahmed. “I was surprised when I got a call from the finance minister’s PA and he asked for my CV.”
“Within 5 minutes, I got another call from the deputy governor at Bangladesh Bank who asked for the same thing,” said Ahmed. “Without further ado, I sent two copies of my CV.”
What he did next, however, baffled the ministers and governors alike.
“I sent my CVs and went on a vacation the next day,” said Ahmed, laughing. “I just left. Didn’t inform anyone or wait to hear from the ministry.”
“When I returned, I was heavily scolded by people from the finance ministry,” said Ahmed. “Then they emailed me a 20 page agreement to join Agrani Bank.”
According to Ahmed, it was a phone call from Dr. Fakhruddin Ahmed, who was then the governor of Bangladesh Bank that convinced him to leave his job and take the position at Agrani Bank.
“His words had a huge impact on me,” said Ahmed. “He told me that this was going to be a big challenge, but he believed I could do it. He said that if I could reform Agrani Bank, which was in a complete mess at that moment, then my contributions would forever be on record and remembered.”
On his first day at the job, Ahmed expected to meet with some hostility from the employees, and to his dismay, on his arrival he found the gates closed and the security refused to let him in based on their protocol. When he finally entered the building, he was met with cold shoulders.
He picked up a microphone and announced, “I am the new MD here and I know you have been facing a lot of problems and are wary of having a new person on board. Let’s meet upstairs and I will clarify a few things for everyone.”
He then organized a press conference where he addressed several issues raised by the media and employees at Agrani Bank.
“One of the first things to be decided was that we won’t be handing the bank over to any foreigners,” said Ahmed. “Then I assured them that we won’t be giving in to privatization, and we won’t be sacking any employees or opening any new branches.”
Ahmed said that he had to warn everyone about closing down branches that had been incurring huge losses. Out of the bank’s 843 branches, approximately 447 of them were at loss.
“I didn’t end up closing any branches as I knew that would leave a lot of people unemployed,” said Ahmed. “However, I did terminate people I thought were involved in corruption and increasing our losses.”
One of the most difficult negotiations, said Ahmed, was on the issue of privatization. He had to convince the employees that privatization or shutting down the bank was not his decision to make, but rather it was the government who would decide their fate. He gave an example of Adamjee jute mill, a highly functioning enterprise that was shut down by the government’s will.
“Another problem I faced was with the management itself,” stated Ahmed. “Once, after an executive meeting, four people walked in and demanded that I fulfill my commitment to reform the bank within three months, or they would start protesting again. I accepted their challenge.”
“I called all the people who had been working at the bank for over three years,” said Ahmed. “I told them that if you wished to continue working, it had to be my way. I would be giving the direct orders.” The employees chose to stay.
For the first couple of years, the bank continued to incur losses, which rose to about BDT 600 Crores at one point. It took Ahmed 5 years to recover the loans and losses and by the time he left the bank in 2010, they had an advantage in the portfolio of about BDT 12000 Crores.
“I always knew that I wanted to start a kind of training institute where I could acquaint myself with the young generation of bankers,” said Ahmed. “When the founder and director of Finexcel
approached me and said I could join anytime by individual capacity, I agreed.”
Over the years, they have hosted several workshops, seminars and advocacy training for young and upcoming bankers and continue to receive positive feedback from the trainees, according to Ahmed.
When asked about his views on the technological advancements in the banking sector today, Ahmed said he is very happy to see how much progress the third generation banks like Bank of Asia, MTB, etc. have made.
“The IT sector in our country is developing and our banks are trying to get there,” said Ahmed.
As his parting words of wisdom, Ahmed said, “When you’re lending customer money for business you’ve to classify his work experience, his qualifications, his ability to do business, and most importantly see how much loan he has already taken for his business.”
“Diligence is very important,” he added. “We’ve to do things the right way to make classifications and banking work smoothly. In my case, I had done every single thing by myself.”