NCC Bank is planning to become one of the country's top ranking banks within the next five years by increasing the number of customers through using modern technologies, the bank's top executive has said.
"We're thinking to update our core banking solution (CBS) system within the next two years aiming to process more transactions properly," Mohammad Mamdudur Rashid, managing director and chief executive officer (CEO) of the National Credit and Commerce (NCC) Bank Limited, told the Financial Express (FE) in an exclusive interview recently ahead of the bank's 28th anniversary.
CBS system allows inter-connectivity between branches of the same bank and facilitates management of deposit, loan, and credit processing. The customers may operate their accounts as well as avail banking services from any branch of the bank on the network.
The second generation private commercial bank (PCB) is trying to include new customers offering innovative products and services, in order to ensure that its growth remains sustainable, according to the top executive.
"The number of customers on both deposit and lending sides will have to increase for enhancement of our balance sheet size," the CEO explained.
As part of the moves, the NCC Bank has been able to add 23,000 deposit accounts in the first quarter of this calendar year against around 38,000 such accounts in 2020.
"It's a significant growth in new customers in terms of deposit accounts," he said, adding that the lending side was facing difficulties due to the pandemic.
"We've to invest more in information and communication technology (ICT) for boosting online services in the banking system that will also help improve the overall digitisation process in Bangladesh," Mr Rashid noted.
Mr Rashid took responsibility as new MD and CEO of NCC Bank on December 28, 2020. Prior to joining NCC Bank, he was serving as an additional managing director of United Commercial Bank Limited. He was also an independent director and chairman of the board's audit committee of IPDC Finance Limited.
Mr Rashid is a seasoned professional with 31 years of experience, primarily in the fields of finance and banking in both global and local markets across several cultures in Bangladesh, India, Australia and New Zealand.
Mentioning lockdown or general holidays, the senior banker said banks would have to think how their customers got services without coming to their premises during the pandemic.
"Actually, we have to increase investment in application-based products to build an automated banking system," he said, while replying to a query.
The top executive also predicted that the country's banking system would turn into virtual shape in the near future from the existing 'brick and mortar' banking to meet the growing demand of the new generation.
Brick and mortar means a business has physical locations that customers can visit to conduct business.
The NCC Bank is also working to extend the number of correspondent banking relationships with overseas banks and financial institutions to facilitate foreign trade covering both export and import businesses.
"We want to increase the number of correspondent banking relationships to receive overseas funds with lower interest in the coming years," the CEO noted.
Besides, letters of credit (LCs) confirmation charges will be decreased if the number of correspondent banking relationships widens, according to Mr Rashid.
In that case, he also suggested the bankers settle payments for foreign trade in line with the existing rules and regulations to improve the country's image in the global market.
He also discussed the impact on 'de-risking' in the country's banking system, saying that there was a scope to improve good governance practices to avert such policy action, imposed by overseas banks.
De-risking refers to the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk.
Each bank will have to establish a stricter compliance culture in the banking industry through ensuring corporate governance and zero tolerance to delayed payment for availing smooth correspondent banking services by the way of navigating the risk of de-risking, according to the senior banker.
The NCC bank has 341 foreign correspondent banking relationships worldwide to facilitate trade transactions.
About asset quality in the coming years, the CEO said the quality of assets in the banking sector may deteriorate slightly mainly due to the pandemic.
Like other banks, one-third customers of the NCC Bank have availed payment deferral facility of the central bank to offset the adverse impact of the Covid-19 pandemic on their businesses, he added.
"More than 50 per cent customers continued their payments fully or partially in 2020 despite deferral facility of the Bangladesh Bank (BB)," the CEO said, while replying to another query.
But overall recovery of NCC Bank decreased in 2020 compared with the previous year because of the pandemic, according to Mr Rashid, who obtained post-graduate degrees from both Bangladesh and the United States.
Mr Rashid earned his MBA (Finance) from IBA of Dhaka University (DU) and MA in International Economics & Finance from Brandeis University, USA.
He is also a FCPA (Australia). He received the Vice Chancellor's Gold Medal at IBA (DU) in 1989 and President's Gold Medal at Marine Academy in 1985. In his multifaceted career, Mr Rashid was a mariner in his early professional life and also a lecturer of finance at IBA (DU).
The senior banker welcomed the BB's latest policy relaxation involving loan repayments to the country's scheduled banks by their borrowers, saying that it would help the customers, who are genuinely facing cash flow crunch, during the second wave of the pandemic.
Under the policy relaxation, the borrowers are allowed to get three more months' time to repay their due loan instalments on the basis of banker-customer relationship because of the 2nd wave of the Covid-19.
Since January 2020, banks have stopped classifying loans in the event of failure to repay loan instalments under instructions from the central bank.
Borrowers will be able to clear their instalments on continuous, demand and term loans by June 2021, instead of March 2021, on the basis of banker-customer relationship, according to a notification, issued by the Bangladesh Bank (BB) on March 24, 2021.
Regarding implementation of the government announced stimulus packages particularly for the cottage, micro, small and medium enterprises (CMSMEs), the CEO said the NCC Bank had decided to go to the prospective borrowers for expediting execution of the package.
Describing the government announced different stimulus packages and policy supports of the central bank, the senior banker said such supports had helped the banks strengthen their investment capacity, particularly in the real sectors of the economy.
The government has so far announced a total of 23 stimulus packages worth Tk 1.24 trillion to offset the shock of the Covid-19 pandemic in various sectors of the country.
The packages, equivalent to 4.44 per cent of the country's GDP (gross domestic product), are being implemented under the supervision of the central bank and the ministry of finance.
"We're committed to ensure maximum interest of our stakeholders in the coming years with improving overall financial health of the bank," Mr Rashid said in his message ahead of the anniversary.
The NCC Bank bears a unique history of its own. The organisation started its journey in the financial sector as an investment company back in 1985.
The company operated up to 1992 with 16 branches and thereafter with the permission of the central bank converted itself into a full-fledged PCB in 1993 with paid up capital of Tk 390 million to serve the nation from a broader platform.
The bank has an international credit rating by Moody with other seven commercial banks in the country. In the last year, the NCC bank retained their international rating as B1 without any deviations. Its local rating was AA and ST1.
Currently, the PCB is running its businesses with 122 branches along with five sub branches across the country.