Wilful loan defaulters are criminals: Tarique Afzal

HM Murtuza | Published: 00:00, Sep 28,2019 | Updated: 00:30, Sep 29,2019


AB Bank president and managing director Tarique Afzal speaks during an interview with New Age at AB Bank headquarters in Dhaka on Tuesday. — Sony Ramany

Wilful loan defaulters should be called criminals, whoever the persons are, as non-payment of depositors’ money cannot be acceptable in any means, said AB Bank president and managing director Tarique Afzal.

Tarique came down heavily on the wilful loan defaulters in an interview with New Age at AB Bank’s headquarters in the Dhaka city on Tuesday.

The AB Bank president, who have made a name for his competency in creating new business streams, operational efficiency, performance improvements and regulatory relationships, also vowed to play a ground-breaking role in resolving the existing banking problems, especially the nonperforming loans, so that the others could follow the country’s first private bank as a symbol of success.

He also mentioned that the bank wanted to become a fully compliant bank by following all the rules and regulations of the central bank with a view to bringing down the nonperforming loans of the bank to 3 per cent from around 8 per cent at present.

Prior to joining AB Bank as deputy managing director with charge of corporate, legal and regulatory affairs head in 2018 and subsequent appointment as president and MD of the bank in July this year, Tarique Afzal worked in various capacities in different international and local entities, including Sonali Polaris Financial Technology Limited, a joint venture of Sonali Bank and Polaris of India.

In his overseas carrier, Tarique worked in London and Canada in the late 1980s and afterwards worked at ANZ Grindlays Bank and Standard Chartered Bank in Bangladesh.

He also worked in Bank Alfalah, BRAC Bank and served as chief executive officer of Dun & Bradstreet Rating Agency in Bangladesh.

Talking about the banking sector, Tarique said that the sector had been moving towards improvement gradually despite having some challenges.

He also believes that even the deposit and lending rates could be gradually brought down to 6 per cent and 9 per cent respectively which would play a vital role in the country’s progress towards development.

Lowering the deposit rate would automatically bring down the lending rate and 3 per cent interest rate spread should be enough for the banks to make profit, he explained.

To achieve the target, end of unhealthy competition among the state-owned banks as well as in the private banks for deposits would be vital, the AB Bank president pointed out.

The AB Bank managing director, however, does not think that such rates should be implemented forcefully.

Terming the country’s economy as a basket of miracle, once known as a bottomless basket, the managing director mentioned that the government has taken many ambitious initiatives — setting up LNG terminal, metro rail, Padma Multipurpose Bridge and digital transformation of the nation — which are almost reality now.

‘For doing such enormous development activities, we all should say thanks to the government,’ he said, adding, ‘The banking sector has been trying to cope with the pace of development so that the country’s development momentum continues.’

‘Since AB Bank is the country’s first private bank that has already completed 37 years of its journey, the bank wants to play a pioneering role overcoming the existing weaknesses of the banking sector so that the others can solve the nonperforming loan issue by following its method,’ he said.

‘To become a fully compliant bank, the bank wants to bring down the nonperforming loans drastically to ensure it remained within 3 per cent of the bank’s outstanding loans,’ Tarique Afzal vowed, adding that the bank has already achieved a significant progress this year.

‘We have successfully managed to bring down AB Bank’s nonperforming loans to around Tk 5,000 crore in the first half of the current year from Tk 7,900 crore at the end of December, 2018,’ the seasoned banker informed.

‘The bank has planned to pull down its NPL to Tk 4,000 crore by this year and reduce the volume of the sore loans further gradually,’ Tarique mentioned.

‘In the recent time, it has been observed that the many of the businesses tries to escape repayment of loans in various lame excuses,’ he said.

In addition, he added, many of the defaulters filed writ petition so that their names remained hidden as defaulters in the Bangladesh Bank’s credit information bureau report, thus creating another problem in the loan recovery process.

‘I cannot accept that someone would not return money that was taken from the bank. Whoever the person, he or she should be called a criminal,’ the managing director said.

‘Despite having so many obstacles, we would not spare anyone and would like to follow legal process to solve the problem,’ he said and hasted add, ‘We express solidarity with prime minister Sheikh Hasina, finance minister AHM Mustafa Kamal and Bangladesh Bank govern Fazle Kabir to fight against the defaulters.’

‘The bank would take measures to arrest defaulters, preventing them from securing bail without loan repayment and selling their collateral to realise our money in any way by following due course of legal procedure,’ he said.

‘The intention is to give signal to the borrowers that they would not be spared if they refrained from returning the bank’s money and it is our first priority to make them pay,’ he said.

Secondly, the bank would restore customers’ confidence by expediting default loan recovery, he said.

Speaking about the present state of the bank, he said that the bank, after the management change, has one of the strongest board guided by former Bangladesh Bank deputy governor Muhammad A Rumee Ali as the bank’s chairman.

The banker said that total public deposit in the bank was Tk 24,000 crore at the end of December last year and that has now increased to Tk 27,000 crore, a testament of people’s trust on AB Bank.

Besides, the liquidity of the bank has increased to 155 per cent from 115 per cent within a span of six months, the AB Bank president said.

Highlighting the banks future focus, Tarique said that the bank would focus on small and medium entrepreneur and retail segments as part of business diversification instead of emphasising only on large loans.

Besides, the bank would stress on expanding agent banking wing as well, the AB Bank president said.

The bank has also introduced a new fixed deposit product ‘Profit First’ that offer customers entire interest amount on the deposit instantly at the time of opening the account instead of the traditional way of payment at the end of maturity.

Under the product, customers might also avail up to 70 per cent loan facility against principal amount of the deposit, he said.

He also mentioned that the bank had been carrying out activates to address various social issues under its corporate social responsibility programme.

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