City Bank launches first ever digital loan facility

City Bank, in the private sector has launched the first ever digital    credit facility in association with mobile financial service provider bKash to support micro-business with working capital to empower local economy.
Officials announced the collateral free credit with three months tenure at conventional lending rate of 9 percent at a function at hotel Sheraton Dhaka on Wednesday.
Eligible bKash users can now apply for a loan ranging from Tk 500 to Tk 20 thousand through bKash app. They would receive the loan instantly and repay the loan in three equal monthly installments from their bKash accounts.
Backed by artificial intelligence technology of Ant Financial, fintech arms of Chinese tech-giant Alibaba the facility will provide backend support to run the credit machine.
State Minister for ICT Zunaid Ahmed Palak was the chief guest at the event while Bangladesh Bank Deputy Governor Abu Farah Md Nasser was the special guest.
The bank and the MFS operator expect that the digital loan will help  micro-business and marginalized people to get loan free from loan sharks involvement.
 "The digital credit is another step towards transparency in financial sector. As none can avail the loan with illegal influence as the artificial intelligence will assess the qualification of the borrower analyzing his transaction behavior, not seeing the status," State Minister Zunaid Ahmed Palak said focusing on strength of digital credit.
The minister also focused on the government initiatives like NSPAB and national identity gateway to bring good governance in financial transaction.
"Under supervision of ICT Advisor Sajeeb Wazed, we introduced the national payment switch in 2011 which helps inter-bank transaction on real time.
"Following the initiative, the Porichoy Gateway brought revolutionary changes in banking sector to serve paperless banking with eKYC," added Palak.
City Bank is the first financial institution which integrated Porichoy gateway to its digital banking service like CityTouch and Ekhoni Account, an instant account opening platform. Bangladesh Bank Deputy Governor Abu Farah Md Nasser hoped the digital nano credit will contribute to the economy through inclusion of the unbanked population.
"We introduced the agent banking for financial inclusion. However, the loan deposit ratio is not satisfactory as banks issued only Tk 40 billion against the deposit of Tk 220 billion. That is not up to the mark of central bank.
"We now focus on sub-branch to inspire banks to invest in service rather than infrastructure." the deputy governor said.
City Bank Chairman Aziz Al Kaiser said the first generation bank always welcome innovative services in retail banking as pioneer of American Express credit card and the digital nano loan. "We want to secure micro savings of merginalised people who struggle with high interest of local loan shark. City Bank has focused on retail banking to empower local economy," he said.
City Bank managing director Mashrur Arefin said the financial inclusion in Bangladesh so far meant banks and mobile financial services companies taking deposit and making money transfer digitally for the mass population.
bKash CEO Kamal Quadir said the integration between Bank and MFS has opened up multitude of opportunities where banks can design more creative and inclusive services through digital platform leveraging the large customer base of bKash.