CEO and Managing Director of Dhaka Bank, Syed Mahbubur Rahman, recounts his early life and career, how his father inspired a sense of commitment and strong work ethic in him, and diminishing importance of values in our society today, talks about the ambition of Dhaka Bank, state of technology adoption at the Bank, its renewed effort to diversify portfolio, culture and challenges and the overall banking industry, discusses fin-tech, MFS, and agent banking and reflects on his management philosophy, key lessons from his journey, importance of reflecting on your days and be a good human being and why the way we spend our days if of course how we spend our lives.
Future Startup
I want to start at the beginning of your story. Tell us about yourself and your journey to what you are doing today.
Syed Mahbubur Rahman
I was born and raised in Dhaka. My father was a government employee and my mother was a homemaker. We are five siblings. I attended Mohammadpur Government High School and then Notre Dame College. I did my undergrad in Geology from Dhaka University in 1987 and soon after my undergrad, I enrolled at IBA for an MBA. The 80s was tough time and Dhaka University was the center of everything. Consequently, it took a little longer than usual to get the course work done.
After graduation, while I was settling down and looking for better opportunities I worked for a local company for about three months. While it was a good experience, I started my first proper job at Saudi-Bangladesh Industrial & Agricultural Investment Company Limited (SABINCO), a joint venture between the Government of Bangladesh and the Kingdom of Saudi Arabia and a large organization,
I worked at SABINCO for five and a half years prior to moving to IDLC Finance in 1993. After working for three and half years at IDLC, I joined ANZ Grindlays Bank and moved to Chittagong. I stayed in Chittagong for the next five years when I also worked at Standard Chartered Bank for almost two years after the merger between Grindlays Bank and Standard Chartered Bank.
Afterward, I joined Citibank N.A where I was the manager for Chittagong Branch before returning to Dhaka after a while. I worked at Citibank for seven years in different roles. When I left Citi, I was the Director and Head of Financial Institution for Citibank Bangladesh Operation.
In a way, for me, Citi was the end of working for multinational companies. In fact, while at Citi I had a chance to go to Singapore and work there for the bank which I humbly declined and decided to wait in hope that better opportunities would come and I would be able to contribute to the society through my work. That way I dubbed my career in the local organization.
I left Citibank in 2008 and in the same year, I joined Prime Bank as a Deputy Managing Director (DMD) where I worked for six months before moving to BRAC Bank. I joined BRAC Bank as DMD and head of wholesale Banking in October 2008. After around two years, in 2010, I became the CEO and Managing Director of BRAC Bank.
After almost seven years, I left BRAC Bank in 2015 and joined Dhaka Bank as a CEO and Managing Director in November 2015 and we have been working on various interesting initiatives at Dhaka Bank for the last one and half years.
Future Startup
How was your childhood and experience of growing up?
Syed Mahbubur Rahman
Among many things, we had a strong value system and the practice of values which, I deem, is one of the big differences between our time and now. The things that considered important and invaluable were different in our time. Respecting seniors was an essential value of our social fabric which has a diminishing dominion in today’s world.
There was no difference between kids from a wealthy background and others. Wealth would not dictate worth of a person. In fact, wealthy kids used to make an active effort to make sure that their wealth did not show. Showing off was not a thing and was considered as mean. Now things are completely different. Wealth is considered to be a measure of your worth and showing off has become the center of our cultural case.
In our time, probably our exposure to the world was limited but we had far more valuable things to do. Today young people have access to everything in the world, can watch almost anything and learn anything that they want but for some reason, fundamental values of our society have changed.
I’m not saying that we don’t have values in our society now but that our values have decayed. Today we only respect, to a large extent, the people who have wealth, who are rich and who show off not the people who are more dignified. I used to be a kid once and now I have my own kids, I can see the difference. It seems everything is on sale.
If you say this is a failure, it is our collective failure. We failed as a society to instill values in our kids and maintain a value system.
In our time, probably our exposure to the world was limited but we had far more valuable things to do. Today young people have access to everything in the world, can watch almost anything and learn anything that they want but for some reason, fundamental values of our society have changed. I’m not saying that we don’t have values in our society now but that our values have decayed. Wealth is considered to be a measure of one's worth and showing off has become the center of our cultural case.
Future Startup
Our life often changes when we come across some sort of a catalyst, it might be a person, a book, or an event. What was the influence or inspiration that shaped you and contributed to becoming the person who you are today?
Syed Mahbubur Rahman
My father was a government employee. Throughout my early life, I had seen his dedication and commitment to his work. It had served him well and he was respected for his contribution.
My father- when he retired after his several decades' long career he was a director of Water Development Board- had an unwavering work ethic and honesty and it was incredibly inspiring to me. I saw my father to work really hard and do things in a right way. Looking up to him, I had learned at an early age that if you do good work people would respect you.
He always tried to instill good values in us and would make sure that we understood the importance of values like commitment, dedication, and loyalty. He would tell us if you keep doing your work and if you do good work, you will certainly be rewarded.
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Future Startup
You started your journey at Saudi-Bangladesh Agricultural & Industrial Investment Co. (SABINCO), then you worked at Citibank N.A., Prime Bank, IDLC, BRAC Bank and few other prestigious companies and in important positions. You have over 30 years of experience in building and helping companies to grow, what are the biggest lessons from all those years.
Syed Mahbubur Rahman
It is immensely important that you love your job if you care about doing good work, creating impact and having a fulfilling life. If you come to the office and wait for the office hour to end, you will still do your job but you would be far less effective and deliver far worse than your ability. We spend a significant portion of life in our work which means if you don’t love your work your chance of having a good life will diminish greatly.
It is hard to understate the importance of domain knowledge. Learn about the work you are doing, dig deeper and invest in understanding your work more profoundly. While it takes hard work to invest in your development but without your chance of moving forward would reduce significantly.
We spend a rather large part of our life not making up our mind, avoiding difficult decisions, not choosing and not committing but it is critical that you commit to yourself. If you are committed to yourself you will be doing more, you will be putting in a greater effort and that’s what makes all the difference.
In the short run doing a hundred things feels good and it is easier but in the long run, it is a futile exercise. Focus, don’t do ten things subpar instead do one thing and do it really well.
Mostly importantly, respect people regardless of who they are. How we treat a person tells more about ourselves than that other person.
It is immensely important that you love your job if you care about doing good work, creating impact and having a fulfilling life. If you come to the office and wait for the office hour to end, you will still do your job but you would be far less effective and deliver far worse than your ability. We spend a significant portion of life in our work which means if you don’t love your work your chance of having a good life will diminish greatly.
Future Startup
You joined Dhaka Bank in November 2015, how much has the company evolved over the past years?
Syed Mahbubur Rahman
Dhaka Bank has been largely a wholesale bank focusing on large corporates and large deposits. For a certain time, it was a good strategy. But I realize that for sustainability, growth and the long term prospect that’s not enough, we need to do more.
In 2015, when I joined it was the almost end of the year, there was not much time to do meaningful work. But we identified and started working on certain areas in the Bank that would need improvement and change for the sustainability and growth.
We have come to realize that it is incredibly important to have great talents and a stellar team, more so for us because our ambition is higher. We identified that we could either do this through training our own people or hiring some capable and experienced people from outside. We have been doing the both.
We have brought some really good people from outside where we absolutely need them and we are sending our people to training to some good courses so that they could grow personally as well as train others in the bank after coming back. There is no substitute for training and learning.
I never wanted to bring people from outside grossly without a proper understanding of the need. Before considering a hire, we first try to see whether we have people who can do a particular job or train our people to get it done. When none of those things work only then we decide to bring people from outside. For instance, consumer banking. Our experience in consumer banking was limited because we never did it beyond a certain degree so we needed some solid people to jump start our consumer banking. We did that. We were not doing SME at that level but now that we want to get into SME more rigorously we brought in some people to push our SME product.
In order to higher the average talent bar, we have added some new dimensions to our management trainee program to ensure that we have only the best people and also that our MTOs can learn more.
Over past one and half years, we have been able to do some of the things that I wanted to change or improve but we have a long way to go. We want to do more things. For instance, we want to assess individual training needs of our people and provide them those training. And we want to find more ways to further help our people to do more and better.
The changes that we aim to bring is a team work. I can’t make all these changes happen alone, we have to work as a team. The wonderful thing is that the whole team is ready to improve and do more.
Another change is that we are actively diversifying our product. Dhaka Bank, as I said earlier, has largely been a wholesale bank but now we are going to other territories. We are focusing in SME. We have been doing SME Banking at a limited scale for a while but now our plan is to increase our involvement in the sector to a greater degree. Same goes for the consumer banking. We have a brokerage subsidiary, we are also thinking what more we can do there.
We are bringing changes in how we operate as an organization. We plan to introduce more technology and automation in our operations. We deem this to be critical for efficiency, better customer experience, and faster growth. We just can’t serve our customers only through brick and mortar model anymore which is an expensive proposition and inconvenient, to some extent, for our customers. Customers don’t want to come to your branch all the time, they expect more options. If we can give a virtual option to our customers it will make their life easier and improve their experience with us.
If you look at the performance, we saw a significant growth in 2016, almost 45% year-on-year growth over 2015.
There are also other problems like NPL which is a common problem for the industry. We are also finding ways to deal with it.
We are a sizable bank and as a brand people recognize and respect Dhaka Bank. We have some really good people at the Bank. One thing that I believe is in the quality of human being. It is not only how good you are at banking or at your work but also how good you are as a person.
We are actively diversifying our product. Dhaka Bank, as I said earlier, has largely been a wholesale bank but now we are going to other teritories. We are focusing in SME. We have been doing SME Banking at a limited scale for a while but now our plan is to increase our involvement in the sector to a greater degree. Same goes for the consumer banking. We have a brokerage subsidiary, we are also thinking what more we can do there.
Future Startup
There are 57 scheduled banks, 4 non-scheduled banks, and 31 FIs. What’s your take on the competition in the Financial industry and growth of the industry?
Syed Mahbubur Rahman
The overall growth of the industry is around 14-15%. But my personal question is do we need these many banks? I personally don’t think so. There are countries with larger economies but far fewer banks than us.
Having these many banks is one of the reasons behind growing NPL in the banking industry. It is expensive to open and run a branch. Despite that when you invest in a branch your first priority to get the return as soon as possible which creates all kinds of problems. When you have 57 banks and nine to ten thousand branches across the country and all the banks cater to almost similar customers, the market automatically becomes quite competitive resulting in unhealthy competition at times.
More importantly, in order to run a bank, apart from financial resources you need human resources. Now, where do you get these many bankers? And if you don’t have good people things are bound to get messy.
That said, probably there are needs for banks for specific purposes. Fo instance, we can have a bank for inclusivity, if we need one. We can open up regional banks or bank for a particular issue or with a specific focus. But now the banks that we have are largely high street banks. Everyone is trying to offer loans to that ten people and that does not look good.
Future Startup
Competition often creates challenges, how do you plan to address challenges that arise from the intense competition in the market?
Syed Mahbubur Rahman
There are a number of areas. One is the non-performing loan (NPL). In order to deal with NPL and relevant challenges, you need to have a good screening process in place, define your risk appetite and as well as the target. A credit risk policy and underlying guidelines that would guide you to grow your portfolio should help as well.
Strategically, our goal is simple, we want to prove that we understand our customers better and offer the best possible service.
Our goal is building a strong relationship with our customers in order to understand their need, their work, and problems. This is a common practice in many industries. For instance, in the informal market, the people who give loan they maintain a very close relationship with their borrowers. This is true for micro-credit and also a reason why NPL rate in micro-credit is so low. Close supervision has contributed significantly to the success of micro-finance.
Maintaining a regular communication with your customer, checking on him/her on a regular basis, knowing small things of his/her business are important. Most importantly you should know the end use of the loan that you are giving.
If you stay close to your customer, things get a lot easier. We are trying to do exactly that, building a very personal relationship with our customers. We are asking all our people to become truly customer centric. Our goal is to become a truly customer first bank.
Future Startup
There is a discussion about technology in general and fin-Tech, in particular, changing the financial industry globally. Can you tell us about general tech adoption at Dhaka Bank?
Syed Mahbubur Rahman
We have been using Flexcube for core banking which is a relatively common software in the Banking industry. However, we are upgrading our system which will be done by the end of this year. That’s about core banking.
We are working on a few front end products that I can’t discuss now. There are certain things that we want to introduce for our customers so that they can have an elevated banking experience.
The purpose is to ensure that as a bank we become more efficient and at the same time, our customers have a better experience. We are working hard to reduce the friction when it comes to receiving our service. We are working on things that will allow our customers to experience banking from home or anywhere through web and mobile without commuting to our branches all the time.
We are also coming up with systems that would allow us to assess our customers real time and give decision instantly reducing the time of decision making for us as well as for our customers.
The purpose is to ensure that as a bank we become more efficient and at the same time, our customers have a better experience. We are working hard to reduce the friction when it comes to receiving our service. We are working on things that will allow our customers to experience banking from home or anywhere through web and mobile without commuting to our branches all the time.
Future Startup
How do you see finTech? We have a couple of early signs i.e. companies like bKash are taking over the MFS and other smaller areas of the financial industry.
Syed Mahbubur Rahman
As far as technology is concerned, we have to adapt in order to avoid obsolescence in the long run. As I said earlier, we are embracing tech and trying to introduce technology to every aspect of our operations.
Another aspect is if all the banks follow the same route someone will come and take over the banking industry which has happened to some extent in many countries. In fact, big banks in many parts of the world are now investing heavily in technology and innovation and trying to disrupt their own business before someone else come and take it away from them.
Smaller upstarts are taking over the parts of the financial services- a common thing in many markets. bKash in Bangladesh, Paytm in India, or Jio for that matter in India, these companies have brought fundamental changes in how market works and more things in line with this will happen in the coming years.
Regulations will not be able to keep us safe for long if we don’t innovate because customers would abandon us if we don’t offer convenience and services that they are looking for. You have to invest in tech and be good at it before someone else does.
However, I think we have some upside since we have been in the market for a long time. Our strategy is that we have to identify what we need to do and how we can get a particular thing done. While we will invest in finding solutions ourselves, we are open to partnerships and collaboration as well which we consider as an important part of our strategy.
Regulations will not be able to keep us safe for long if we don’t innovate because customers would abandon us if we don’t offer convenience and services that they are looking for. You have to invest in tech and be good at it before someone else does.
Future Startup
Do you have any plan to get into MFS?
Syed Mahbubur Rahman
I don’t think we need to get into MFS ourselves. There are already some really good players and it also requires a relatively hefty investment.
Instead, we are considering partnership approach. A number of companies are talking to us, we are also looking for options and will hopefully find one that will help us to serve our users better and also reach out to new users.
Future Startup
What do you think about agent banking?
Syed Mahbubur Rahman
It is a good thing but I’m not sure about the business agent banking is bringing in for the banks that are doing it extensively. The volume they have generated I don’t think is that significant compared to the money invested into building the network. That said, it is hard to predict the future. We are also getting into agent banking. We have already applied for the permission.
Future Startup
There is a growing number of startup and tech companies out there and the industry seems to have a solid future, do you have any plan to launch any product for this group?
Syed Mahbubur Rahman
Although there is nothing specific yet but we are considering it. In fact, we recently had a brainstorming session with the team in this regard.
That said, we are yet to have the support system in our country. We are a commercial bank and only a handful of banks have the refinancing scheme. As result, it is very difficult to take a risk because the money we invest is not our money it is our depositors' money. If there is a refinancing option or any other credit scheme mechanism that would make it a lot easier for us to get involved in the space. We need government support here because at the end of the day we have to return the money to our depositors.
That’s said, we are going ahead. We are doing SME and we hopefully will do something in this space as well. Moreover, if we find a good person who is bankable then banks seldom shy away from him/her.
Future Startup
What are the challenges for Dhaka Bank now? What challenges do you anticipate in the future?
Syed Mahbubur Rahman
One challenge, of course, is the human resource. It is impossible to understate the value of right kind of people, great people.
We are a little late in a couple of areas like SME and retail where we are giving renewed focus. We understand that it would take hard work to move forward in these areas and that we have to offer products that would have edge over others. We also want to do a lot of other things for industries like agriculture and startup but we will need support from the government.
A lot of activities are happening but apart from a few industries, growth is relatively stagnant for most industries. That’s something concerning. We need growth in other industries and we need to reduce dependency on and exposure to only a handful of sectors.
Industry-wide, intra-industry collaboration is important which is not happening at that level. We do collaborate but many times one bank does not want to share information with another bank.
Governance also needs to improve. We need to allow people to do their job and should not interfere unless he/she is failing and at the same time we need to take responsibility and do our job.
Employee turnover rate is quite high in our industry, retaining people is a challenge for us. People often switch job for a small salary increment without considering the environment and any other related things. This is detrimental to the industry.
Final and more serious one is the non-performing loan (NPL). This is becoming a problem for the entire industry. We have regulations and procedure for managing this but, unfortunately, going through the existing procedure is not helping much. The available support to deal with people who take a loan with malafide intention is insufficient. If we could get the support and solve these problems swiftly it would have saved a lot of hassle for us and also would drastically reduce the NPL rate. Should we have a mechanism where these can be proceeded fast and get done, it would have saved the industry a lot of hassle.
Future Startup
What are the plans for Dhaka Bank going forward?
Syed Mahbubur Rahman
Product and technology-wise, I have already shared a part of our plans in the coming years. Apart from that, our goal is to be the best service providing bank in the country. We are in the service business and if we can ensure the best service rest should follow. Our ambition is to become the ultimate customer-centric bank.
At the same time, we want to be an equal opportunity employer. We want to see more women coming and working at Dhaka Bank. We take diversity very seriously.
We have created 20% women employment in the bank but if I look at the top, we don’t have any women in our management committee and we have only one woman manager, we want to improve on these metrics. We want more women managers. We want one or two representatives on the management committee. This is something very important to us.
Our goal is to be the best service providing bank in the country. We are in the service business and if we can ensure the best service rest should follow. Our ambition is to become the ultimate customer-centric bank.
Future Startup
What is your management philosophy?
Syed Mahbubur Rahman
My philosophy is always to empower people and delegate. I don’t micro-manage and don’t want to keep everything to myself. I believe in the individual excellence and team to the extent that I want my team to come to me with recommendations instead of just asking for directions and permission about what to do. I want my team to make the decisions not me alone.
Collaboration is extremely important when it comes to solving critical problems and it only happens when you empower your team.
In order to be effective and do your best, you have to own your work and company. I want everybody to own their work. I don’t want to dictate unless it is absolutely necessary. That is not my style.
Future Startup
Have you had a mentor along the way?
Syed Mahbubur Rahman
Mr. Rumee Ali has helped me a lot. He is somebody I always look up to because of his knowledge and personality. I had the opportunity to work with Sir Fazle Hasan Abed. He is an extraordinary person and I have learned so much from him.
Future Startup
What does a typical day of you look like? How do you work?
Syed Mahbubur Rahman
Technology has effectively disrupted our lifestyle. Now the office is no more 9-5, it is virtually every waking hour. My daily routine varies depending on priorities and meetings. But one thing I take seriously and maintain daily is reflecting on my day and doing a self-assessment.
At the end of every day, I try to look back and assess what I have done and what I could have done better. I have found reflection incredibly powerful and empowering when it comes to living a mindful life and managing a meaningful work day.
Don’t think about money or reward rather focus on work. You may have to struggle and struggle is natural, everyone before you had to struggle and suffer through but never let your hardships hold you back. Work hard, find a way, get through it and never give up on yourself and your ability to endure.
Future Startup
What advice would you give to people who are just starting out?
Syed Mahbubur Rahman
We waste so much time regretting the past and worrying about the future neither of which we can control. Which will happen will happen, we can’t change that but we can change what we do today and how we act now. Focus on the present. If you focus on the present rest will take care of itself. You can’t change your past but you can take charge of your present and if you do so your future will be different. There is a saying that the way we spend our days if of course how we spend our lives.
Don’t do too many things at once. Do one thing, do it better than anyone else. Love your work. Be passionate.
Don’t think about money or reward rather focus on work. You may have to struggle and struggle is natural, everyone before you had to struggle and suffer through but never let your hardships hold you back. Work hard, find a way, get through it and never give up on yourself and your ability to endure.
Be a good human being. That’s very important. If you are a good man, the other qualities like commitment, loyalty, dedication become easy to achieve. When you are a good man, you would take your responsibility seriously. Coming to office would not be a mere routine to you, rather you will emphasis on doing good work. You will try to do justice to your organization by delivering good work.
Finally, dream big. Now that I’m saying we want to become the best service providing bank in the country and want to take our bank to the next level. That’s what it, a big dream. And our dream drives us.
