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TECHNOLOGY HAS MADE IT SIMPLE TO SET UP BANKING FACILITIES IN RURAL AREAS


R Q M Forkan is currently working as the Managing Director of Bangladesh Commerce Bank Limited (BCBL). Prior to his joining to this post, he had been working as the Additional Managing Director of the NRB Global Bank Limited. He is a skilled banker with more than 40 years of rewarding multi-dimensional experience in both local and foreign banks.

He had previously held various senior management positions in multinational and private commercial banks such as Deputy Managing Director Prime Bank Limited, Senior Executive Vice President of AB Bank Limited, Chief Operating Officer of Eastern Bank limited and Head of Banking Services in ANZ Grindlays Bank.


Plaques with names and datelines have stories to tell. The rooms and their walls in which those are being hung emanate a certain power. And the persons sitting inside those rooms are achievers. The unpretentious yet functional MD secretariat of Bangladesh Commerce Bank Limited (BCBL) at Eunoos Center in Motijheel has a plaque with a list of names in one of its wall and at number 20 in that list; the name of Ruhul Quddus Muhammad Forkan appears, with an unfilled dateline as he is the incumbent chief executive of the bank.

When Fintech went to his office on a weekday noon, Mr Forkan, donned in a bluish black suit, was engulfed in work. Yet he made time to talk.
Pointing the plaque that hung on the wall behind him, he said, “I will not be here forever but before I became just a name with dateline there, I want to build a legacy, so that people will remember my name.”

Having said that, the sexagenarian banker with over 40 years of banking experience opened up to Fintech and talked about his life’s work and the plan that he has up in his sleeves for his current bank-BCBL to become an epitome of modern financial institution.

FiNTECH: You have over forty years of experience in the banking sector. How the journey of your illustrious career had started?

R Q M Forkan: It started back in 1973. I can actually remember the date. It was the first day of August in that year. I started my career in national Grindlays Bank Ltd. How I first thought of starting my career over there was an interesting incident. One day, I went in a branch of Grindlays Bank to cash a check. Startled by its nice, air-conditioned interior, I had developed a wish to work there. I learned from a Peon that the bank, at that time, was hiring new recruit. When I disclosed him about my interest, he guided me to go the admin section. Incidentally, they opted for taking my interview. I remember, there was this Englishman named Mr AGA Done, who was at the other side of the table. The interview went on well. At one stage, he asked me, “If I recruit you, what do you want from me in future?” I replied, “I want to replace you.”

I know that was an audacious answer but I spoke my mind and they liked it. I got the job there.
I worked in the Grindlays Bank which later became ANZ Grindlays up until 2001. In 2001, the ANZ Grindlays was acquired by Standard Chartered. I left my job here along with some of my colleagues there and joined the Eastern Bank Ltd (EBL) as its Chief Operating Officer (COO). After working there for four years, I joined Arab Bangladesh (AB) Bank as a Senior Executive Vice President (SEVP). I had a two and half year stint there and from AB Bank, I joined the Prime Bank in the capacity of DMD.

I left the Prime Bank after a while and wanted to start a venture of my own. But it didn’t work out well. So I went back to the banking sector again. I joined the newly established NRB Global Bank. When I left the bank three years later, I was its Additional Managing Director (AMD). Finally, I joined here in the BCBL as its Managing Director in October last year.

FiNTECH: What was the banking industry like when you started your career in ANZ bank? How has commercial banking changed over the years?

R Q M Forkan: Banking System at independence consisted of two branch offices of the former State Bank of Pakistan and seventeen large commercial banks, two of which were controlled by Bangladeshi owners and three by foreigners other than West Pakistanis. There were fourteen small commercial banks.

At that time, almost all the banking services were concentrated in urban areas. The banking in the rural areas was virtually absent. Now, obviously with the rapid advancement in information and communication technology, our banking services have observed significant changes. Banking industry has come a long way from the time when banks used to be mere deposit-taking and money-lending institutions. Banks and financial organizations have improved their services as a financial intermediary through adopting various IT solutions.

You know technology now has become a tool that facilitates banks’ organizational structures, business strategies, customer services and related functions. There had been times when we were unable to do much other than the management of usual banking. Previously Bangladeshi banking was confined to customary banking only, with no access to Internet banking.

FiNTECH: You have been in the BCBL for about a year now. Tell us about its strategy and policies in devising products and services.

R Q M Forkan: Developing a product for a company is not an easy process, be it company involved in manufacturing tangible products or virtual service oriented products like banks. When developing a new product a company must pass through certain pragmatic stages. A systematic and accurate approach to every stage helps to avoid irreversible mistakes and success of the products concerned. After joining BCB, to tell the truth, I had not found any pragmatic steps involved therein while devising new products except usual exemplification of the contemporary market phenomenon. The steps that used to be implemented involve analysis of the market and examination of the products used by other contemporary banks.

So since my joining, I have provided the concerned Divisions of BCBL with the necessary strategies for successful product development. BCBL is now equipped with all pragmatic steps of product development such as Idea creation, Morphological analysis, Idea screening Concept development and check, Marketing strategy establishing and business analysis, Product manufacturing and market testing, Market promotion, Advertising etc.

FiNTECH: How do you think the technologies are changing the banking industry? What are its impacts?

R Q M Forkan: There is no doubt that technology is an integral part of modern banking, and emerging new technologies will bring all-embracing convergence of computing, communications, information and knowledge in banking sector too. The computers are becoming more sophisticated too. They have given banks a potential they could only dream about and have given bank customers high expectations. The changes that new technologies have brought to banking are enormous in their impact on officers, employees, and customers of banks.

Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before – thus creating new bases of competition. Rapid access to critical information and the ability to act quickly and effectively will distinguish the successful banks of the future. The bank gains a vital competitive advantage by having a new streamlined business processes. Consistent management and decision support systems provide the bank that competitive edge to forge ahead in the banking marketplace.

And most importantly, unlike in the past when banking was centralized in urban areas, now day’s technology has made it simple to set up banking facilities in rural areas with the same potentialities. Plastic money or Credit cards or smart cards have made the banking industry more flexible than before. Remote banking, Centralized Information, Signature retrieval facilities, Mobile Banking are paving the way for more relaxed & reliable banking experience.

FiNTECH: You were in NRB Global Bank previously. What kind of products and services BCBL has for the non-residential Bangladeshis?

R Q M Forkan: To be frank, after joining BCB I found no products designed specifically for the NRBs. But personally I do believe that it is necessary for us to show all of our NRB customers that we do care about them and they are very important for us even if though they are not living in Bangladesh. Many might succumb to the common phrase that ‘out of sight, out of mind’, but we don’t. We are in fact intended offering NRBs facilities that they would especially benefit from.

We are planning to design some products so that we can extend investment facilities to Bangladeshis (NRBs) and remit foreign currencies through BCBL. We are intended to promote SME investments, encouraging flow of foreign remittance through banking channel and to curb money laundering, alleviating poverty and encourage development of indigenous/provide employment opportunity.

FiNTECH: What is BCBL’s strength? What separates it from the competitors?

R Q M Forkan: Our strength as a group lies primarily in our diverse people and their limitless capacity to bring their passion to bear on the development and delivery of innovative products and services, creating an excellent customer experience to deliver timely and bespoke solutions for our multinational and multicultural customers. We have created a corporate culture founded upon strong organizational values and performance-driven operating standards.

Aside from those, I can give you some specific traits that we do possess. All of our 48 Branches are Fully Computerized. We use latest technologies in daily transaction to provide prompt and timely services to customers. We have our own training center to provide training to staff. And we also have a well-diversified asset portfolio.

FiNTECH: Most Commercial Banks are reluctant to spread out to rural parts because it is not cost effective. What is your view?

R Q M Forkan: Previously Banks in Bangladesh concentrated their operations in urban areas and largely catered to the upper sections of the society. Initially, banking was akin to money lending business with an additional service of collecting deposits and pay interest on them; gradually, when the business grew, these institutions started offices/branches in other towns/cities.

It was purely a commercial enterprise coming under the purview of shops and establishments act, and it continues to be so — when it comes declaring a premises as a business center, standing orders, declaration of holidays; later these institutions were brought under the purview of Banking Regulation Act.

Personally, I do think that rural banking in Bangladesh plays a vital role to improve the economy of the country but the potential there is still being untapped. Since our economy is agro-based and major portion of our population are living in the rural area, I don’t believe the true development of the country will come unless the huge unbanked rural population is brought under the banking service.

FiNTECH: What is the state of Trade Finance in Bangladesh and where do you see the trend going?

R Q M Forkan: In Bangladesh, the export market is completely dominated by readymade garments industry. Though Bangladesh is the second largest exporter in RMG, the competition is fierce in this sector. Realizing this, the Bangladesh government now wants to extend its export markets. I think, leveraging the global demand for commodities as well as services through export-oriented development should then be a strategic goal for the Bangladesh economy in its quest to achieve middle income status by 2021. There is growing consensus in economic literature that countries achieving structural change in exports through increased export diversification also grew rapidly and inclusively.

With the labor cost advantage that Bangladesh enjoys, there seems to exist good prospects for extending into exports of labor intensive products other than RMG such as agro-processed industry, food products, other manufactures and assembly operations. By broadening the export base, diversification can stabilize and expand export revenues, enhance value added, and boost economic growth.

Vietnam, a strong competitor of Bangladesh in the RMG sector, has a fairly diversified export basket, even better than India, though similar to China. Apart from footwear and RMG, it exports a diverse group of manufactures from electronic and electrical goods and to printing machineries, agro-based products such as canned and frozen seafood, and resource-based products like petroleum.

Meanwhile, it is no surprise that China and India have well diversified export baskets as their production structure is similarly diversified. There is a lot of depth in each of the product categories, like final consumer goods (durable and nondurable), basic industries producing capital goods and machineries, a large intermediate goods industry supplying to domestic and world markets, and an assortment of primary and agricultural products that are basic raw materials for manufactures and agro-based industries. In fact, countries like Sri Lanka also has a fairly diversified export

basket and it proves that small open economies should not rely overwhelmingly on any one product groups for export income.

FiNTECH: What is your view about Agent Banking?

R Q M Forkan: Agent Banking is getting momentum and is being adopted by remote consumers where a bank branch is unavailable. Recent data, released by Bangladesh Bank, shows that this new service delivery channel has registered a 52% quarterly growth in total amount transacted in the 3rd quarter of 2016, compared to the previous quarter.

This distribution channel has also registered growth of 109% and 36% in terms of the number of agents and the total number of transactions respectively. Among the existing 12 licensees of agent banking, Bank Asia is leading the path with 1200 agents. Dutch-Bangla Bank Ltd. is in 2nd position in terms of the number of agents.

A total of BDT 21.69 billion was transacted against 1.17 million transactions in the 3rd quarter of 2016 through agent banking, whereas BDT 14.24 billion was transacted against 0.85 million transactions in the 2nd quarter of the same year.

All these numbers represent a promising picture for the agent banking in the country. Globally, the rise of digital banking service has been replacing branch banking largely and many of industry insiders are touting a future where banks will not have branches, rather small, smart and efficient service delivery locations on a limited scale. ■

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