TBS
AB Bank, the country’s first private commercial bank, is marking its 43rd anniversary with a renewed focus on digital transformation aimed at engaging younger generations. Over the next five years, the bank plans to expand its agent banking network, strengthen loan recovery efforts, and introduce innovative deposit products to attract customers, said Syed Mizanur Rahman, acting managing director and CEO of the bank, in an interview with The Business Standard’s Tonmoy Modak, where he shared insights into the bank’s current state and future goals.
Can you tell us about AB Bank’s performance amid the global economic crisis?
Over the last five years, the global economy has experienced a series of profound disruptions—beginning with the Covid-19 pandemic in early 2020, followed by the Russia-Ukraine war in 2022, and ongoing macroeconomic volatility that has affected every corner of the world, including Bangladesh.
These events triggered a ripple effect on global trade, inflation, and business costs.
During that period, we ensured continued financing and advisory support to vulnerable sectors to help them stay afloat. One of our key strategic shifts was accelerating our digital transformation.
As the pandemic reshaped customer expectations and service delivery norms, digital banking became the name of the game. Our investments in digital infrastructure enabled us to provide seamless, safe, and efficient services to our customers, even during lockdowns and mobility restrictions.
While the economic environment remains uncertain, AB Bank has demonstrated stable performance, a strong commitment to supporting key growth sectors such as agriculture and SMEs, and a forward-looking mindset.
Also, we got a deposit growth of Tk1,700 crore and an overdue loan recovery of Tk170 crore in the last three months. We are confident that our resilience and strategic direction will continue to position us for sustainable growth in the years ahead.
In terms of its product offerings, how does your bank differentiate itself from others
Mostly, the differentiating factor is the service. In banking, staying unique in products and services is not sustainable. Despite this challenge, AB Bank has focused on creating something different through digital transformation.
We recently revamped AB Direct, our internet banking platform, giving it a fresh new look to improve the user experience and, above all, to enhance the scope of banking for the young generations.
We do not believe in one-size-fits-all banking. Instead, we create specific solutions for different groups—like salaried employees, women entrepreneurs, students, rural customers, and small businesses.
For example, our newly launched product “Shachchondo” offers a flexible overdraft facility with easy documentation, making it ideal for both payroll clients and general customers.
What challenge do you see for the banking sector in complying with the new default loan guideline?
In Bangladesh, the issue of loan defaults has long been a systemic challenge, shaped by years of malpractice and a culture of leniency. While Bangladesh Bank has rightly shown “compassion” toward genuine defaulters—particularly those affected by recent economic disruptions—there remains a critical need to differentiate these borrowers from willful defaulters.
Encouragingly, with recent political developments and a renewed emphasis on governance, efforts to recover defaulted loans have gained momentum, and many long-standing cases are now being actively pursued through legal channels.
At AB Bank, we currently have close to 1,000 cases filed under both the Artha Rin Adalat and the Negotiable Instruments (NI) Act. We are working diligently to pursue recoveries through all legal means.
However, the absence of such court functioning outside Dhaka and Chattogram remains a major structural challenge, hampering our ability to resolve cases in other regions.
The introduction of the new Default Loan Guidelines by Bangladesh Bank marks a positive and much-needed shift in the credit landscape. The reforms—such as revised loan categories, updated classification criteria, new provisioning requirements, and a reduced loan write-off period—aim to enhance credit discipline, transparency, and the overall health of the banking sector. While the intent is clearly constructive, the implementation of these changes presents a range of operational and strategic challenges for banks.
One major challenge is ensuring operational readiness across the institution. The reclassification of loans and revised provisioning norms require banks to make substantial changes to their internal systems and processes.
This involves updating risk assessment models, restructuring credit monitoring mechanisms, and strengthening reporting protocols. Moreover, there is a need to train and equip employees—especially those in credit and risk management—with the knowledge and tools to apply the new guidelines consistently and accurately.
Despite these challenges, AB Bank is fully committed to the reforms and has already begun implementing the necessary changes. We are strengthening our credit risk assessment frameworks and improving portfolio monitoring to align with the revised classification and provisioning norms. We are also prioritising borrower engagement and early warning mechanisms to support account regularisation and minimise slippages.
What strategy has AB Bank taken to overcome the liquidity crisis and boost depositors’ confidence?
We recognise that maintaining adequate liquidity and earning the trust of our depositors lie at the core of banking stability. In response to liquidity pressures, AB Bank has adopted a multi-pronged strategy focused on diversifying funding sources, introducing customer-centric deposit products, and enhancing personalised engagement across all segments.
For our business clients, we now offer interest-bearing accounts designed to provide better value and liquidity management.
We are also expanding our Islamic banking windows to cater to the growing demand for Shariah-compliant financial solutions, ensuring inclusion and broader market coverage.
On the distribution front, AB Bank continues to strengthen its presence across the country. Our expanding agent banking network and growing number of sub-branches allow us to serve unbanked and underbanked communities more effectively.
Moreover, our investment in digital banking platforms has empowered customers to manage their finances with greater convenience and security. Whether through mobile banking, internet banking, or self-service tools, we continue to enhance our digital capabilities to meet the expectations of today’s tech-savvy customers.
What are AB Bank’s aspirations for its future?
Looking ahead, AB Bank envisions becoming one of the most trusted, service-centric, and digitally advanced financial institutions in Bangladesh—serving every individual, business, and community with purpose and integrity.
Our aspiration is to lead transformative growth by leveraging technology, innovation, and a relentless focus on customer satisfaction. We aim to expand our footprint in retail and SME banking, strengthen our digital ecosystem, and develop sustainable financing solutions that align with national priorities.
Also, we are planning to expand our agent banking network. Currently, we have 202 agent outlets around the country. In five years, we want to have 4,000 outlets, focusing on marginal and unbanked customers.
