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WE WANTED TO SEE THAT EVERY ABLE ADULT OF THE COUNTRY HAS A BANK ACCOUNT

 


An MBA from The Institute of Business Administration (IBA), Dhaka University, Md. Arfan Ali is currently holding President & Managing Director. He joined Bank Asia as an AVP on September 13, 1999, three months before the commercial opening of the bank. During the initial years at the Bank, Md. Arfan Ali was in charge of the Treasury Department. Subsequent to that, he was the Head of two of the major Bank Asia branches namely: Principal Office Branch and MCB Banani Branch.

Arfan Ali started his career as a Probationary Officer in Arab Bangladesh Bank Limited on May 02, 1991. Prior to joining Bank Asia, he worked for Hanil Bank (now Woori Bank) of South Korea from 1996 to 1999.

Apart from working for the Bank, Md. Arfan Ali worked as a Part Time Lecturer for Jahangir Nagar University, MBA Department for six years. He is one of the key resource persons for Bangladesh Institute of Bank Management (BIBM), Dhaka.

Actively involved in enhancement of formal and informal education for the village people, Arfan enjoys reading books, recitation, fishing and farming.


For a bank of the stature of Bank Asia, which has garnered the reputation and solidified the branding of one of the most ‘chic’ banks in Bangladesh, its incumbent managing director Mohammad Arfan Ali, is surprisingly down-to-earth.

You would find him neatly clad in the suits and ties if you take a visit to his stylishly interior-ed office in Paltan and the usual labyrinth of a MD Secretariat before reaching out to the personal chamber would serve your pre-conceived notion of meeting a ‘corporate’ lender.

But when he starts talking, you would realize that he is not just ‘another banker’ rather he is a man with specific purpose and that purpose is to bring unbanked population under banking services. That’s a purpose of a lot other but he is one of the few who is giving it all to walk that talk.

Fintech recently visited his office and talked and learned from this visionary banker.

FINTECH: You have started your banking career in the Arab Bangladesh Bank (AB) in 1991. From there, you have now become the Managing Director of Bank Asia. Can you please tell us about your journey in this long career of over 26 years?

A.Ali: I started my career in May 2, 1991 as a probationary officer in the AB Bank. There was a whole batch of us comprising of 50 people who joined there. My first posting was in the principal branch. Later I was transferred to the Bangladesh Shilpa Bhaban (BSB) branch. I spent over five years in the AB Bank in the credit and foreign exchange department.

In 1996, a large Korean Bank named Hanil Bank started its operation in Bangladesh. They were looking for executives and I applied there. I was appointed as the first Bangladeshi person for the bank. I started working there in the treasury and financial control department from its preparatory stage before the launching of its full-fledged operation. Following the Asian financial crisis of 1997, Hanil Bank merged with Commercial Bank of Korea and became Hanvit bank. After 2002, the Hanvit Bank changed its name and become Woori Bank. Woori Bank is still in operation in Bangladesh now. I however didn’t work in that bank under its current name as I left it in 1999 when it was still known as Hanvit Bank.

In September 28, 1999, Bank Asia got its license and started its operation here in Bangladesh. The Bank’s license was issued to Abdur Rauf Chowdhury, founder of Rangs Group and one of the most renowned and respected businessmen of our country. The other major shareholders of the bank include Anisur Rahman Sinha from Opex & Sinha Group and Mohammad Safwan Chowdhury from M/s Ahmed Tea & Lands Co. Ltd. Former Foreign Minister M Sayeduz zaman was the first Chairman of the bank. Because of their presence, the bank had started with a sound footing.

I opted to join again in the preparatory team of another bank. As usual, I joined there in the treasury and financial control department. The Bank started its official journey from November 27, 1999. Our present Prime Minister Sheikh Hasina, who was the then Prime Minister inaugurated the operation of our bank in Sheraton Hotel.

In 2002, I was posted as the Branch Manager of that Banani branch of Bank Asia. After working there for five years, in 2007, I came back to head office from the Banani branch. I was an Executive Vice President (EVP) of the bank then. In 2011, I became a Senior Executive Vice President (SEVP) and joined the SME and retail banking division. Then I became Deputy Managing Director (DMD) of retail banking and later Additional Managing Director (AMD) in 2016. In the same month in January 2016, I became the MD of the bank.

FINTECH: You have joined the preparatory offices of two different banks from the established ones at the early and mid-stage of your career. Why those jumps; what motivated you?

A.Ali: I have attained some rare opportunities and experiences, which I think, very few other bankers of the country have been able to achieve. One of those is working at the preparatory stage of both a foreign bank and a local bank in Bangladesh. I had opted for leaving established banks and joining new ones because I have always been a fan of taking new challenges and venturing avenues that are less chartered.

Yes, you can have a safe and secured job in established entities but the challenge of starting anew in a fresh new entity is captivating and at the same time motivating. May be because of those reasons, I have joined at the preparatory stage of those two banks.

FINTECH: There are 57 banks in the country. How does Bank Asia distinguish itself from those other banks? What are the unique traits of this bank?

A.Ali: Bank Asia has lots of traits with which it has been able to distinguish itself from other banks. In 2001, Bank Asia took over the operation of Scotia Bank of Canada in Bangladesh and one year later it took over the Bangladesh operation of Muslim Commercial Bank of Pakistan. We are the first bank in Bangladesh that took over the local operations of two foreign banks in Bangladesh. No other local commercial bank has done this so far.

I believe it’s a matter of huge courage for a local bank of Bangladesh to take part in the acquisition of the operation of a foreign bank. Bank Asia has shown that courage.

But if ask for the biggest distinguishing feature of Bank Asia, then I would refer to our agent banking. We are the pioneer of agent banking in Bangladesh.

FINTECH: How did the journey of agent banking of Bank Asia start? Why it opted for it at the first place?

A.Ali: At the beginning, we had the focus on concentrating in corporate banking. So we started as a regular corporate lender. Our branches were primarily designed to serve that purpose. But in our mission statement, it was written that Bank Asia would provide technology driven innovative service and would work for the emancipation of poverty in the country So at one stage, the policymakers of the bank started to feel the need of serving its mission purpose because they felt that just by doing corporate lending, those purpose couldn’t be served. Motivated by this vision of our bank’s policymakers, the executive branch of the bank set the motto of bringing all of the citizens of Bangladesh under banking network. We wanted to see that every able adult of the country has a bank account. So to make that vision and dream reality, we had started the agent banking.

Before starting agent banking, we had worked on that vision of bringing unbanked population under banking service through another of our massive achievement-our partnership as a banking partner with the government in its ‘Ekti Bari, Ekti Khamar’. The number of beneficiaries in that project is now over 13 lakh now. We are managing these huge accounts of the beneficiaries. We work in 252 upazilas of the country, so we can say that we basically operate in half of total upazilas of Bangladesh.

Because of that project, Bank Asia has presence in over 20,000 villages. So now we can say that we have been truly working as per our mission statement which I think very few other banks are doing. This is of course a unique trait that a private commercial bank participating with the government to work for implementing a vision of bringing unbanked population under banking service and thus work for the overall economic development of the country.

The idea of agent banking came to our mind while we were working in the ‘Ekti bari, Ekti Khamar’ project. Bangladesh Bank piloted the concept of agent banking with several other banks but it was Bank Asia who successfully implemented it first. We got the agent banking license back in 2013 and within six months of getting license, we first open the agent banking booth in January 2014. Now we have over 1200 agent banking booth.

One of the major jobs of the banker is the efficient distribution of capital. What the bankers have done so far in Bangladesh is concentrating 70% of the credit and banking services in Dhaka and Chittagong. This is very unstable for an economy and for the banks because it increases the concentration risk. We have to spread it out in reach to the grass root level.

By spreading out, Bank Asia wants to demonstrate that the more the banking services can be distributed and outreached to the unbanked population, the more the economic activities of the country will expand. It will not only strengthen the economy of the country but also will strengthen the growth of a bank as well.

FINTECH: How you are providing your agent banking services?

A.Ali: We have two types of agent banking. One is agent banking booth established by private organization and another one is established at the union digital center of the Union Parishad. The number of privately owned booth is 250 and the rest are in union digital center.

These Union Digital Center which is being run by the government’s Access to Information (A2I) project is already providing around 40-50 different services to the people of the union. Many of those services are intricately related with the banking service because at the end, any type of service is related with some sort of financial transaction.

Agent banking there works like human ATM. You can with draw money through the biometric verification of your fingertips. We have already started receiving money for Porcha in our agent booth. The agent booth is providing foreign remittance service. We also are also taking electricity bills.

I believe that the union digital center will once become very strong. It will become the center of all development activities at union level. This is in fact the vision of the government-making those digital centers the hub of major economic activities.

FINTECH: Most of the commercial banks of the country don’t want to spread out to rural parts because they say that the cost of spreading out will put a dent in their balance shit. Do you agree with them?

A.Ali: As per the government statistics, we have around 78,000 economic units in the country. By economic unit I mean individual or organizational entity that is involved with generating economic output. These range from small cottage industries to large ones. The development of Bangladesh is and will be happening from those units.

As of now, we have only been talking about urban based development; the rural based development is still having just small footnotes in the policymaking discourses. But the fact as, for a country like Bangladesh, which still is an agricultural country, the real development will not take place unless we concentrate on rural based development.

So, I believe even if the cost of spreading out seems a bit high at the initial level but in the long run, it will bear fruits for the bank.

FINTECH : Of course agent banking has provided a fruitful solution for spreading out. What do you think are the main challenges of agent banking?

A.Ali: Yes agent banking has been able to provide fruitful solutions for spreading out because by leveraging on the low cost of operation for agent banking, the banking services are being provided. The amount of money needed to open an agent banking booth is way smaller than the amount needed to open a banking branch. So as a business model, it is viable for the commercial banks. There are lots of challenges here though.

First challenge is to acquire the trust of the people. Having the trust of depositors is not that easy for the agent because people still have problem trusting agent booths which of course don’t have the capacity and appearance of a traditional bank even though they are capable of providing the banking services that are needed. To acquire that trust of people, from Bank Asia, we have been conducting financial literacy program.

Another major challenge is liquidity problem. Since the bank branches are usually far from the agent booths, the agent sometimes suffer from liquidity crisis. We have also observed that problem in our bank. Security is of course another big challenge as transporting cash money is always a risky venture. I think this particular problem will be solved because we are gradually advancing towards a cashless society.

FINTECH: As you have mentioned that, a technological disruption in the whole banking system is looming and the traditional banking system is already under threat. Are Bangladesh’s banks ready for that?

A.Ali: There is no doubt that whole banking sector will go through huge disruption in near future. The massive digitization across the world has changed the face of banking and the banks of Bangladesh are no survivors of that wave of change. The adaptation of the banks has already begun but not at par with the banks of developed countries I think. The truth however is that, we the bankers of Bangladesh, are not doing enough yet in adopting and embracing technologies. This is because, we still don’t feel threaten by the technological disruptors and have the notion that the traditional banking service still has a long shelf here.

In Bank Asia, as we have pioneered and concentrated in agent banking, we have developed a mobile app for our agents. Digitization not only helps us to monitor our agent banking activities but also helps us to facilitate the money transfer in immense manner. This is because the ease of transferring money from one place to another in the form of digits is exponentially higher than the transferring of money in cash forms.

But now, because of some regulatory restrictions, the functionality of our app is confined within some limited services and limited amount of transaction. But the important part is that because of that app, our agent can transfer small amount of money from the rural areas digitally and in doing so, they have also provided the depositors an orientation about the usage of technologies in banking services.

The fact is, the technological advancement has made banking service easier for its clients as it makes the service more affordable, reliable and less time consuming. The sooner we make that advancement, the better it will be for all. Ten years later, no one will be writing check. They will write checks digitally and those will be authenticated digitally as well.

FINTECH: Does Bank Asia invest or provide loans to the IT startups or fintech startups?

A.Ali: Yes, we have started doing that because we believe the future lies in IT. We have also worked on to facilitate payment for the freelancer. Bank Asia has tied up with New-York based online payment system Payoneer in 2015 to help Bangladeshi freelancers receive their payment easily.

By opening a free account with Payoneer, the online payment gateway service provider, a freelancer can receive payment for IT services in his or her e-wallet and then transfer the funds to a local bank account for a cash-in. Bank Asia will receive the transferred fund in its ‘Nostro account’ from Payoneer and then it will pay the amount to the recipient in Bangladesh.

 

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