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Prime Bank PLC has shifted its focus towards retail banking to boost its market reach with the help of adopting advanced technology, said Tanjil Chowdhury, the bank’s chairman.

In an interview with ¶¶Òõ¾«Æ·, he discussed his vision for diversifying risks and deepening market penetration for Prime Bank.

‘Prime Bank hasn’t traditionally been consumer-oriented, but we now recognise the importance of focusing on retail banking, as low-cost funds typically originate there,’ Tanjil observed.

‘We’ve secured a provisional licence from the Bangladesh Bank to provide mobile financial services, and alongside our existing network, leveraging technology will greatly enhance our penetration,’ he said.

In the past, banks focused on high-net-worth clients, often those with assets exceeding Tk 10 crore.

Now, the aim is to gather the same volume from a larger customer base.

Although handling more accounts was once costly, advancements in technology now allow banks to manage these costs efficiently, he said.

‘We’re now exploring how technologies, particularly machine learning and artificial intelligence, can help us optimise costs and processes to increase market reach,’ he said.

Prime Bank, for instance, pioneered ‘nano loans’ for RMG workers — small loans below Tk 10,000 — with a repayment accuracy of 99 per cent, a feat enabled by digital advancements.

Tanjil said that Prime Bank’s strategy had never been solely profit-driven; rather, it was performance-oriented.

‘We believe that profits naturally follow strong performance. This focus on quality has kept our assets in good shape,’ he said.

The bank is also collaborating with partners in the Middle East and other regions to channel remittances through Prime Bank, aiming to boost inflows, he noted.

He expressed concerns about foreign banks’ reluctance to confirm large letters of credit for local banks due to Bangladesh’s low credit rating.

‘To improve the country’s image, the government should reform the banking sector and other areas to show international stakeholders that rectification is underway,’ he suggested.

Tanjil also highlighted the need for capital market reforms alongside banking sector improvements, adding that a stronger stock market could reduce the pressure on banks for large loans.

Addressing the current banking sector crisis, he noted that the issues stemmed from governance problems and the interim government has to deal with those now.

‘Economists and stakeholders had raised red flags long before. Governance failures were at the core of these problems,’ he observed.

Clients of troubled banks, especially Shariah-based ones, are now using ATM booths from healthier banks to withdraw cash with their cards, reflecting a stark reality.

Tanjil believes the owners of these struggling banks, who initially invested only small amounts, should be required to inject additional capital.

He also suggested that the central bank should ensure Shariah-compliant banks strictly adhere to Shariah principles.

‘Strong and stable banks tackled these governance issues earlier, enabling them to avoid the current crisis,’ he said.

Additionally, he called for a loan classification and early alert system to be integrated into banking reforms to identify fund diversions quickly and enable proactive responses.

‘Prime Bank’s capital adequacy ratio stands at 18.5 per cent. Many banks, however, face risks as their credit exposures far exceed their capital,’ he added.

On the issue of political influence, Tanjil stated that each bank should define its policy on whether to engage with politically connected individuals.

‘Prime Bank has managed to avoid political influence, though not without some costs,’ he said.

Beximco’s Sukuk was well known as a highly risky investment, but banks were pressurised to subscribe it, despite low chances of returns, Tanjil said.

Prime Bank limited its exposure to Tk 50 crore, converting Tk 10 crore of Sukuk into Beximco shares, while many banks invested more, he said.

‘The upside is we don’t have non-performing loans from such exposures,’ he added.

He strongly supported implementing IMF-recommended reforms by the Bangladesh Bank and noted past inconsistencies in the BB’s treatment of banks.

‘Some banks faced lenient regulation, while others dealt with strict oversight. Such discrepancies should be corrected for a level playing field,’ Tanjil argued.

He suggested that regulatory bodies should set policy standards that banks must follow and take firm action if these rules are breached.

About struggling banks, he said that the country had an excess of banks and suggested merging weaker banks before they reached such a crisis level.

‘Burdening stable private banks with the responsibility of merging with these troubled banks is unfair now. No bank is willing to take these challenges now,’ he said.

Instead the government should establish a specialised asset management company to absorb distressed assets from failing banks and recover funds from defaulting borrowers, he suggested.