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Financially sound companies should refrain from applying for loans from the government’s stimulus packages and should give those opportunities to weak and damaged industries owing to Covid-19, NRBC Bank Chairman Parvez Tamal said in an interview with Dhaka Tribune‘s Mehedi Hasan. He also talked about issues regarding current banking services amid the coronavirus pandemic, challenges in implementing the stimulus packages through banking channels and the upcoming budget
What is the importance of digital banking in the midst of such a pandemic?
The coronavirus has caused a huge change in the transaction methods of banks. Now clients are heavily dependent on digital banking. It has also opened up the potential of switching to a cashless society.
Cashless transactions in NRBC bank have increased six to seven times during the pandemic. However, all our branches are open during this crisis, all maintaining the central bank’s rules and regulations.
Now banks are facing cash withdrawal pressure. What are the challenges in liquidity management?
From the beginning of March, individual and institutional depositors have been withdrawing cash for their essential needs. Cash withdrawals by depositors have increased ever since the government announced a countrywide general holiday.
Besides individual depositors, many state-run agencies and institutions have also been withdrawing their deposits, which is very alarming for us. However, as a strong and financially sound bank, we have been able to manage our liquidity amid such a crisis.
In the last two months, we collected near about Tk400crore as deposits.
The government has announced stimulus packages worth over Tk1,00,000cr to overcome the economic impact from coronavirus, which will be implemented through banking channels. What are the challenges in implementing the packages?
The government and Bangladesh Bank will have to come forward in implementing the stimulus package. However, Bangladesh Bank has already introduced several policy support and refinance schemes in this regard.
Businesses and companies will also have to come forward. Financially sound companies should avoid applying for loans from the packages in order to give opportunities to weaker and more damaged industries owing to Covid-19.
Although the central bank has instructed banks to disburse the loans quickly, we will give out the loans after assessing credit risks because we have to recover the loans.
The suspension of interest collection from borrowers for the months of April and May is another barrier for us in implementing the package because it will badly affect banks’ profitability and shrink liquidity.
Banks’ earnings will have fallen by around Tk14,000 crore in April and May owing only to interest suspension.
What are the initiatives you have taken to prevent a spread of Covid-19 among your bank’s employees?
We have already taken several initiatives in this regard. Our officials come to office on a roster basis as per the central bank’s instructions.
What are your expectations from the upcoming budget?
The upcoming budget is very important for us. The government’s stimulus packages or incentives, the suspension of interest collection from borrowers for the months of April and May will impact banks’ profitability badly. In this case, the government should extend a helping hand to the banking sector in the upcoming budget.
(DT)
