Working on sustainable banking for economic development is no more an elusive dream for the developing countries, not for Bangladesh at least. BRAC Bank, a leading bank of the country, has already made it possible. The bank is the founder of the world’s most effective network of the sustainable banks around the globe. Here I would like to share some my experiences being involved with the bank’s Research and Development on sustainable banking strategies.
This is to reiterate to the most enthusiasts of development, who might already know that BRAC Bank is owned partially by BRAC, the largest non-government organisation in the world, and also International Finance Corporation (IFC) the private sector arm of The World Bank Group, and ShoreCap International.
Its founder Chairman Sir Fazle Hasan Abed is also the co-founder of Global Alliance for Banking on Values (GABV), a network of world’s leading sustainable banks all of whom have values-driven agenda at the core of their mission and they are mostly working on development of the low-income sector of their respective countries.
My organisation BRAC Bank is one of the fourteen members of GABV, including the newest members like BancoSol who focus on low-income sectors in Bolivia; American Community Development Bank, OneCalifornia Bank, Canada’s largest credit union, Vancity and Norwegian sustainable banking specialists, Cultura Bank.
My bank as well as others in the alliance value people and the environment in addition to the traditional economic objective of profit. They are working to build a powerful voice for sustainable banking as a model for a very different future for finance. My bank’s Research and Development department is relentlessly involved with various research works ranging from retail product development, improvement of foreign currency remittance inflow and poverty alleviation through SME loans.
As Product Manager of such an organisation described above, I had ample opportunity to closely work with the bank’s R&D Team to introduce innovative products and services, with the vision in mind to serve the under-served people, communities and the environment. Some of my mentionable achievements include introducing the Planet Card, an ATM debit card through which the user can contribute to create Green Fund. I am very fortunate because I have also observed many innovative initiatives in the bank such as the “Krishok Card” (meaning: Card for the Farmers) – first ever credit card for peasants and farmers to help them purchase seeds, fertiliser and other agricultural items on emergency when they are in severe credit crisis. The bank believes this will help them have more opportunity to take enterprising ventures.
The bank is also the pioneer in remittance services in the country with the widest network across the country to reach the population in the remotest parts of the country. An online, web based facility called “El Dorado” is used to facilitate the whole remittance process. This service has proved to be very instrumental for the underserved population because a significant portion of these families heavily rely on remittances sent from their family members (mainly unskilled to semi-skilled labours) working abroad. Therefore, sustainable banking model is something that was a part and parcel of my daily professional experience.
Afterwards, I took the responsibility of an even more challenging position. Starting my career as the bank’s competitive position of a Management Trainee, I have always enjoyed the freedom to experiment and come up with new ideas. As Sales Manager of the bank’s Payroll Services, I have been assigned with the overall responsibility of the Payroll business unit and took the charge to reach the unbanked population of my country. Most other banks with modern banking facilities are mainly foreign banks in my country- namely Standard Chartered Bank, HSBC, and Citi Bank, NA, etc.
Most of them are serving the elite class under their payroll service through their limited distribution channels. Whereas in BRAC Bank, after enormous field study and market survey; we have established that we can actually serve the rural people as well, and also by ensuring profit for the shareholders. How was that possible? Yes that was possible through agreements with the factory-owners, mainly manufacturing corporation owners, who have factories in suburban and rural areas to lend us space in their factory premises to establish our ATM booths.
These employers were also committed to the development of their underprivileged rural workers. For example, one of the directors of such a corporate client Mr. Muhammad Abdul Moyeen expressed his solidarity with my bank’s vision and values. He has a PhD from the University of Glasgow and represents the rare class of my country’s educated and prudent employers. He was also looking for some financial services that could support his five thousand factory workers.
In return, we have made agreements to manage the payroll of such thousands of unskilled to low-skilled employees for a very minimal fee, mostly for free in many instances. These low-skilled employees, brought under our payroll service, have monthly fixed salaries ranging from USD 60 to USD 75 only. That is also with access to the most modern banking facilities like VISA-enabled ATM booths, Internet Banking, credit and loan facilities, etc. Many foreign banks may not find it cost-effective because of their high cost involved in these technology-based services and never considered it to be a profitable venture.
Therefore, it was our insights and socially-responsible banking practices supported by extensive analytical findings that made the seemingly unprofitable venture into a mutually beneficial project. So far we have more than 250 ATM Booths, a significant portion in rural areas where even electricity is not available. On the other hand, most foreign banks have only 20 to 40 ATM booths and all of them in metropolitan areas. I consider this as my greatest achievement so far in my life, for which I am immensely indebted to my education in Finance and Economics. And Professor Golam Mohammad has always provided me with encouragement and proper guidance.
Working close to a Professor like him made me even more interested in the arena of economic research which can explore the unknown that awaits us with immense possibilities. I still remember the valuable discussions I had with him after office hours, which have changed the lives of many rural people who never before dreamt of having access to the formal financial channels. Not only they were introduced to the state-of-the-art banking facility, but they are also very assured of the fact that their hard earned money is safer in a bank, and many of them also grew savings habits. This savings habit (BRAC Bank’s payroll account provides 4% interest on any balance) along with their access to fast and convenient credit facility, mostly micro loans and SME loans are giving them the hope of a better and solvent future.
Syed Shurid Khan
Sales Manager, BRAC Bank Limited