Revolution in banking for marginal people

Dr. Syed Nesar Ahmad Rumy :

Banking is expanding very rapidly in Bangladesh. People of our country were not that much aware of banking services only a few years ago. After introducing IT and digitization, mobile phones the service of the different banks and financial institutions have stepped into a new era and from there those banks and financial institutions are running onward with new offers to the marginal clients and as well as big clients also. In one sense people having mobile phones do mobile banking through Bkash, Nagad, Rocket etc. Moreover rapid expansion of debit cards,credit cards shows the indication that within few years Bangladesh might turn close to a cashless economy. Now huge transaction is already ongoing through credit card/debit card and mobile banking.

During Pakistan period there were few banks giving banking service in the then East Pakistan. Few people used to go to banks and other financial institutions. Trade and business were mainly captured by some non-Bengali migrants from British India and businessmen from western wing of Pakistan. During Korean war in early fifties the price of raw jute soared much and in this circumstance Jute was the prime source of foreign exchange earning of the then Pakistan. In that inflated jute business, later a new bank named National Bank of Pakistan was launched in the eastern wing of Pakistan. It was public financial institution and after independence it was renamed as Sonali bank Ltd.

During sixties the economic growth especially structural development in the then East Pakistan was remarkable. A vibrant middle class emerged and people had money in their hands. After independence all the banks and financial institutions and industries were nationalized. In a war-ravaged country banks, industries and financial institutions could not function properly due to mismanagement and lack of professionalism. This was why the level of industrial production decreased and it had to wait till early years of eighties to come to the level of 1969 industrial production of the then East Pakistan.
In the eighties Bangladesh materially allowed private banking system in our economy. Some newly launched commercial banks started functioning and their performance was better in comparison to the government commercial banks. The clients did get more attention and respect in the private banks. The size of the economy was getting bigger and more new private banks started launching in the eighties and nineties of the last century.

Nineties was the time of great leap forward of our economy. Revenue collection of the government jumped to the optimum level through introducing VAT. In that time the vibrant private sector expanded remarkably and huge number of labors started going abroad especially in the Middle East, Malaysia, Brunei and other countries. Booming private sectors, especially garments, expatriate labors and total literacy program (TLM), primary health care and later huge generation of electricity had a multiple effect on the economy of Bangladesh. As a result, private banking, stock markets and agricultural production increased much and a positive multiple wave flowing since last three decades.

Now it has become a great challenge of the economy to sustain the achievements and we achieved in last three decades. There are some crannies in every sector of our economy that should be addressed properly by the highest authority of the country. The major crannies in the banking sector are mismanagements, bad loans, inability of loan recovery and family-coterie in the banks’ board of directors. In the private sector banking, some influential families have compulsion force to control their entire system of banking service. The disbursement of loans, inability of recovery of disbursed loans, security of depositors’ money and bad loans disbursements to the persons close to the banks’ high-ups without fulfilling appropriate terms and conditions of loan getting are now common traits of banking in Bangladesh.

Now common people of the country are very much used to mobile banking. People can send money to their desired persons within minutes through Bkash, Nagad, Rocket and some other apps. A huge number of people have got employment through these activities. As a result of this, the whole economy gets benefitted. Now it has become easier to get expatriates money through electronic/digital channel banking and people get their money through mobile phones linked with concerned banks account. It can be said that it is a silent revolution in banking and financial sectors in Bangladesh for the marginal people.

Using debit/credit cards is getting popular day by day. Now almost every person of lower middle class to upper class possess debit card/credit card. One can find this trueness in the big shops and shopping malls and this trend is increasing very fast.
The economy of Bangladesh is progressing well and some people have huge money in their hand. The number of those people is increasing and it is one side of the coin. It is hard reality that a huge number of people have already lost their purchasing power within last 3/4 years. We see huge lines in TCB’s mobile shops for essential items in different parts of the city. Nowadays the numbers of beggars and distressed people increases remarkably in the city streets. This is not also the healthy sign of the economy.

However, among the different sectors of the economy banking is very important sector. Currently many flaws increasing in this sector give negative messages to our economy. If these flaws and irregularities are addressed properly, the picture of banking sector might turn to a new shape in near future. This is high time banking sector needs it. We all look forward to those days to come.

(The writer is a former civil servant).