'Sonali Bank aims to be a smart bank'
Sonali Bank is planning to go for massive transformation through digital banking in a bid to change customer perception about services in state-owned banks. As part of that, the bank introduced multiple digital products and services in the last nine months after Md Afzal Karim joined the organisation as its new managing director.
In an interview with The Business Standard, he shared his plans about Sonali Bank and how he is working to turn it into a 'smart bank' in line with Prime Minister Sheikh Hasina's Smart Bangladesh Vision 2041.
Md Afzal Karim said that in his nine months with the bank, he has introduced some products focusing on paperless banking, in line with the customer demand.
"Sonali Bank is the first among state-owned banks to introduce QR codes, in January this year, to facilitate customers withdrawing cash without cheque books," he said. Customers need to download the Sonali e-Wallet app and fill in the required data and withdraw cash using the QR code scanning option. With this digital banking feature customers can withdraw their deposited amount from any Sonali Bank branch without a cheque book.
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"We have also introduced digital banking services round the clock for expatriates, allowing them to open bank accounts from abroad," he added.
Previously, expatriates could not operate their bank accounts or open accounts from abroad. Now they can carry out financial transactions using "Sonali eSheba" and "Sonali e-Wallet" mobile apps.
Sonali Bank has also launched Sonali Payment Gateway, an online payment service, to make financial transactions easier.
Through the Sonali Payment Gateway, online payments can be made with the help of different mobile financial services and debit or credit cards.
"Sonali Bank is more advanced in digital banking than other state-owned banks and it is working in line with the Bangladesh Bank's aim of making 75% of total financial transactions cashless by the year 2027. We are working to make Sonali Bank a smart bank in line with the Prime Minister's Smart Bangladesh vision by 2041," Karim also said.
There is a perception about state-owned banks that they only provide traditional banking. "We want to change that perception by mass transformation to digital banking services."
The managing director said Sonali Bank is now working on developing its internal Payment Switch gateway platform to reduce third-party dependency in providing banking services. For instance, SMS alerts that customers get are provided through a third party service provider, for which it has to spend commission. After developing the payment switch platform, the bank will provide this service without involving a third party.
"This platform will also enable the bank to print card personalisation information on debit and credit cards by itself instead of taking third party services. As a result, the bank's costs will reduce significantly for card management," he added.
He also said all card transactions will be facilitated through the bank's own payment switch, which will be introduced by this year. At present, the bank has to pay commission to the third-party service providers for every card transaction. The introduction of its own payment switch will save money for the bank and at the same time lower card transaction costs for customers.
"Sonali Bank is also the first among state-owned banks that introduced a call centre where services are provided to the customers 24/7 via telephone," Karim said. This service was developed by the bank's own manpower.
Investment focus of Sonali Bank
Sonali Bank is focusing on the Cottage, Micro, Small and Medium Enterprises (CMSME) sector for lending as it wants to improve its CMSME portfolio size to 16% this year from the existing 13%, said Karim.
He said the government is emphasising on the CMSME sector and the Bangladesh Bank has also introduced a refinance scheme of Tk25,000 crore. "So, I instructed the branch managers to inform customers about this fund. We can provide loans at 7% interest rate to the customers, which is very cheap.
"We are focusing on the sector as the central bank has guidelines for banks to increase CMSME portfolio size to 25% of total exposure by 2024," he added.
Contribution in government services
"We provide 27 services under the government's social safety net programme free of cost. And more 24 services are provided at minimum cost," Karim said.
"We demanded commission from the government for these services. We sent a letter to the ministry about this. We claimed Tk5,500 crore from the government against these services. If we would charge logically for such services, the bank would earn more Tk5,500 crore.
