No hidden cost: StanChart

Neeraj Swaroop

Standard Chartered Bank believes in competition. It does not price any product out of the market.
So says Neeraj Swaroop, chief executive for India and South Asia of Standard Chartered, in an interview with The Daily Star at the bank's local headquarters in Gulshan during his recent visit to Bangladesh.
“Pricing is an important strategic issue for any business. It (pricing) depends on market demand and it cannot go out of the market,” Swaroop says.
He has responded to a complaint that the bank charges high commissions, fees and interest rates for its services in Bangladesh.
The official categorically denied it. “We offer competitive prices as clients are not willing to pay higher than other operators' charges.”
If any product is priced high, he says, there must be value addition. He also says the bank does not place any hidden cost. However, he admits that he and other senior officials have received complaints of high charges and fees.
Swaroop, who looks after the bank's operations in South Asia, has also talked about the global financial crisis, credit cards and other forms of plastic money, Bangladesh's economy and its potential, the central bank's emphasis on agriculture and SME credit and entrepreneurship in the region.
StanChart is one of the nine foreign banks operating in Bangladesh. It is the oldest and the top foreign bank in the country. The bank's total assets were over Tk 10,527 crore at the end of 2008 from nearly Tk 9,302 crore in 2007.
The bank's loans and advances stood at Tk 6,736 crore on December 31, 2008, from Tk 5,763 crore a year ago.
The bank considers Bangladesh as a very important market as it has a significantly large market. The bank has more presence here than some other regional markets. It has various deposit and loan products in addition to technology driven services such as ATMs and credit cards. It is also one of the largest consumer banks in the country.
“Standard Chartered Bangladesh is performing quite consistently for the past five years and giving us double digit growth figures,” Swaroop says. “We will continue to consider Bangladesh as a very positive market.”
The official is also optimistic the bank will perform well in 2010, once the recession is over.
StanChart pioneered in the credit card business in Bangladesh and currently, it is the market leader. The bank holds nearly a 50 percent share of the market of five-lakh credit card users.
“The credit card is a risky business, so the interest rate will be high."
The use of plastic money is still at nascent stages in Bangladesh, said Shah Masud Imam, head of corporate affairs, South Asia. Bangladesh has 12 million bank accounts, he adds.
“There is enough for all of us to look at. We are offering more and more premium services to our customers,” says Imam.
On agriculture and SME credit, Swaroop says: “We are a responsible bank and we will follow the directives of the central bank." The official said all banks should comply with orders from the central bank.
He hails Bangladeshi entrepreneurs and their relentless efforts to improve. “First generation entrepreneurs are coming up with great ideas. We just help them to make things happen."
He also talks about the impacts of global recession on the banks. Swaroop blames the western countries for the crisis.
The bank was one of the few global banks that were able to sustain business during the severe global economic slowdown. It was not directly affected by the crisis.
“Clarity of business models has helped the bank perform strongly amid recession,” Swaroop says.
“We are consistent and disciplined in pursuing business."
The bank's regional chief however considers the bank's business concentration, because of which, it was able to keep away from the impacts of recession.
“Nearly 95 percent of our business is concentrated in Asia and Africa,” he reasons. The economic slowdown, which surfaced as a result of the sub prime mortgage crisis in the US, later spread to Europe. But most Asians and Africans were out of any large impacts, Swaroop says.
The bank's presence in the EU and the US is to support the business in other regions, he adds.
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