When the new private sector commercial banks (PCBs) were allowed in early eighties, most of their CEOs (chief executive officers) and senior management came from the state-owned commercial banks. The trend continued until the mid or late nineties. These people as usual were known to the large private sector clients of those banks and afterward the sponsors of the newly commenced banks. They played a major role in expanding trade finance business of the country and increasing the lending to private sector. However, their focus was understandably less on business process re-engineering, establishment of a robust risk management culture or developing a reliable or forward looking delivery platform or integrated distribution channel. They were found shy even to initiate large 'recourse' or 'non recourse' project finance. For obvious reason, the central bank emerged as the only 'change driver' in the Bangladesh banking sector. Reforms programs initiated and supported by the development partners through the central bank brought in some visible change in the way banks handled classified loans, charged interest rates on the clients and maintained coverage against the risk assets. However information technology, modern management practices, human resource development and governance did not get much priority in their agenda.
During the financial sector reform project (FSRP) implementation phase, few senior managers in the state owned banks, the central bank and the controlling ministry got trained in the global bank/s. When those senior managers afterward joined the private sector commercial banks, market could see some changes in the way 'risk assets' was being managed and cross border trade carried late. End nineties and early new millennium saw few dynamic, young persons with global outlook mostly from the foreign banks operating in Bangladesh joining the private sector commercial banks. I would say the pressure for change' started from there. Some of them were joined by the few second generation foreign educated entrepreneurs in their boards and the change process' gained momentum. This was further supported by the few at the central bank, who either came from development partner organisations or had spent some time with foreign banks. 'Core risk management guideline' put up with the help of mostly the executives working for the global banks, though lost steam afterwards, worked as an 'equity' in the change process. This was probably the first initiative by the foreign and few private bank executives, which brought in some visible changes in the way we do banking or to be more precise 'manage risk' in Bangladesh.
With the fall of ANZ Grindlays Bank, withdrawal of American Express Bank, Banque Indosuez and a few other foreign commercial banks, a couple of human resources were available for absorption. The success of the change process in one particular bank brought in lot of confidence among the private sector commercial bank directors/sponsors to attract more senior managers with global banking background to join in decision making roles in their banks. And this now almost became a 'one-way traffic'. Commercial banks started to gradually embed change' in their growth strategies. Mid level and junior level officials in those banks started to put in their efforts to ensures a better human resources policy, service rules, centralised processing, improved service delivery platform, much improved and well coordinated risk management process, alternate product delivery and distribution channel and more importantly relationship banking along with their 'leadership at the top'.
As of today, I have reasons to celebrate the success of the 'first phase' of change in the management process in Bangladesh commercial banking. With more customized client solutions building, automated teller machines(ATMS), credit cards, mobile cash(M-cash), large project loans, offshore banking, cross border financing, spur in retail and SME banking, Bangladesh banking sector in poised to integrate well with the global banking system. Centralized processing, higher investments in information technology or service delivery platform, bigger kitty for training and development of the people is commanding the agenda of the commercial bank's boards. More importantly our peers and pleasantly our junior colleagues from the foreign banks are joining the 'decision making roles' in PCBs to drive the change process in our 'national banking sector'.
CEOs in a number of private sector banks either spent their entire life or considerable years in the foreign banks. People with cross border banking experience might also join the 'top position' in some other private banks soon. Many of their deputies also come from foreign banks. I know, for sure, all of them are not 'world class' or may not have clear visibility about the destination as well as few local bank CEOs mostly coming from erstwhile joint venture banks have also done a commendable job in bank's progress; yet they know the importance of 'taking care of the best and be fair to rest' centric human resources policy, IT driven solutions, better risk management and establishment of retail banking or transaction banking to diversify risk and bring in efficiency in the system.
While the Bangladesh banking system is going through a tough time now, many owners and directors of the PCBs are thinking aloud to attract seniors from global banks to join them in the next possible opportunity. They have rather reconciled within themselves that the 'change' is going to be the only 'constant' word in 'future banking' and we must invite young, energetic, capable people with home and abroad banking experience to drive and run the show. Though we are yet to see seniors from foreign banks driving the 'change process' in state-owned banks and bring in visible changes there; who knows like Pakistan and many other developing countries, the scenario may change there too and soon. Banking in Bangladesh is making a paradigm shift and the journey is on. More young officials from local private bank are increasingly joining the bandwagon to push things forward.
Looking forward to a day, when young, energetic people with global competence and 'no garbage' in their thought process will dictate the terms for entire Bangladesh finance industry including the regulatory space. 'Success transfer' is happening in Bangladesh and must continue to happen in Bangladesh in its journey towards excellence.
