How to fix Android Studio terminal to be same as linux terminal?

I have recently installed Android Studio on my linux machine. It's terminal shell was set to \bin\sh, which starts something like this:

sh@5.1~

So, I changed the shell to \bin\bash. And, now, when I launch the terminal, it looks similar to how linux's terminal looks:

username@computername:~$

So, I thought everything is set now. But, when I tried to use gpg, I noticed some issues:

echo "test" | gpg --clearsign

Linux terminal succeeds. But, Android Studio terminal fails with:

gpg: signing failed: No pinentry
gpg: [stdin]: clear-sign failed: No pinentry

For which gpg & gpg --version commands:

Android Studio terminal says:

/app/bin/gpg
gpg (GnuPG) 2.2.27
libgcrypt 1.8.9

Linux terminal says:

/usr/bin/gpg
gpg (GnuPG) 2.2.19
libgcrypt 1.8.5

How can I fix this?

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