Islami Bank is at the new peak of success by proving the fear wrong. Islami Bank Managing Director and CEO. Mahbub-ul-Alam said the change in management of Islami Bank had raised concerns in all quarters, starting with the general customer base. Many thought that the change in Islami Bank created a crisis in the bank.
All the achievements of the organization may be over. Success has reached new heights by disproving this fear born of change. Islami Bank is not only the largest bank in the private sector, it has set new milestones by collecting deposits of Rs 1 lakh crore.
Consumer confidence, trust has become stronger and acceptance of the bank has increased a lot, which is having an impact on the banking sector in dealing with this corona outbreak crisis in the country. Prominent banker Mahbub-ul-Alam has been working for Islami Bank for 35 years. Joining as an officer, he has held various important positions in the foreign transaction department for most of his banking career.
Mahbub-ul-Alam took over as the second managing director after the transformation of Islami Bank in 2016. At that time, the change of ownership of Islami Bank raised fears in various quarters that the bank might go bankrupt. Customers will turn away from the top institution of good governance and investment.
Over the last four years, the bank has collected more than Tk 36,000 crore in deposits, proving fears of a tough challenge. The bank, which used to be at the top of deposits, has now surpassed Rs 1 lakh crore. New trade relations have been established with the banks of Europe and America. This experienced banker has talked to Bangladesh Pratidin every day about the success of the bank, the challenges of the country’s banking sector by overcoming the influence of Corona, the possibilities.
Mahbub-ul-Alam said, “The crisis in our economy has started since March. Due to the outbreak of corona, all industries and financial activities came to a standstill. The immediate initiative of the Prime Minister has been very effective in controlling this situation. We are grateful to the Prime Minister, who has instructed the banks to keep open to a limited extent with timely instructions.
Simultaneously announced incentive packages. Because of this, the impact on our economic growth has been much less. Although it was supposed to be open to a limited extent, the work of the bank was not limited. Bangladesh Bank has handled the situation efficiently with excellent coordination and proper direction.
As a result, the banks had relatively normal activities in lending, collecting and collecting deposits. During this time the bank’s deposits did not decrease but came more than expected. Banks have been less affected. Bank officials have served the customers in compliance with the hygiene rules.
Although many bankers have been affected by Corona. The changes that have taken place in our banking sector in the last few years have played a major role in controlling the current stagnation. That is agent banking, mobile banking, through which marginalized customers get services. ‘He said, despite various concerns, there will be no crisis in the banking sector. Liquid flow is normal so far. Banks will be able to implement all the incentives announced by the government.
The government has provided Tk 5,000 crore to the garment sector. Besides, the banks will get 50 per cent refinancing from Bangladesh Bank after giving loans from Tk 30,000 crore and Tk 20,000 crore from the incentive fund. During the lockdown, the loan collection is less but the payment is also less.
Besides, the deposit has come. Banks have received an additional Tk 45,000 crore due to reduction in CRR and increase in ADR ratio. This money will remain liquid after the government borrows for the budget deficit. So those who are worried that there will be problems in the banking sector are wrong.
The MD of Islami Bank said, ‘Islami Bank is now a universally accepted institution irrespective of religion, caste, party, which was not in the beginning. Islami Bank had a market in Bangladesh. Islami Bank has got those customers since its establishment. However, there were some problems with the bank’s acceptability due to the outlook. In 2016, it has been established as a bank acceptable to all by overcoming that problem like many changes.
Ordinary people, of course, had the idea that the Islamic Bank could collapse in many quarters. So many customers started withdrawing deposits at the beginning of the change. But we did not give up and told all the officials to give the money to whoever wants it. There is no need to take pressure. Support all customers. In just a few months, we have been able to restore confidence in our customers.
They have seen that services are available in Islami Bank. There is no crisis of money. At this time we emphasize on agent banking. As a result, marginal customers started coming there after seeing the nameplate of Islami Bank. A large number of remittance customers also joined us. We are getting the benefits now. We have collected the same amount of deposits in just four years as we have collected in almost 30 years before breaking all kinds of records.
More than 50 percent of our deposits belong to ordinary customers. Government or corporate deposits are relatively low. ‘He said,’ Besides increasing deposits, we have also increased investment equally. At present, the investment and deposit ratio (ADR) of Islami Bank is 85 percent. Our ADR ratio is estimated at 92 percent. That means we can invest up to 6 percent more.
The change of management has created another opportunity for us to develop relationships with banks in the United States, Which had not been the case for several years. Islami Bank has launched four accounts with JP Morgan, one of the largest banking institutions in the United States. We have accounts in London, New York, Japan, Europe.
Our business has started with them. Once the epidemic is over, 25 percent of the country’s total foreign trade will go to Islamic banks. The asset quality of Islami Bank is better than any other institution in the country in terms of risk management. We make memos of each project proposal of at least 20 pages, which is four to five pages of most organizations.
We have invested in all kinds of large companies in the country including RMG, Sugar, Steel, Feed Mill, Rice Mill. 50% of our total investment is in the industrial sector. Our board never interferes with any debt. No opportunity to create here. “Our remittances have played a big role in increasing our deposits,” he said. We have brought more remittances before.
However, the service we provided to customers during the Corona outbreak broke all previous records at ৬ 480 million in May and ৮ 570 million in June. In just two months, the total market share has increased by 32 percent to 26 percent. We have 24 delegates across the Middle East who deal with remittances. It’s the most. The number of our agent banking is now around 1200, which was five in 2016.
Through this completely village-based agent banking, we have got about 6 lakh new customers, through which huge amount of deposits have come. This year alone, I have received deposits of Rs 1,100 crore. ‘The banker, who is skilled in foreign banking, said,’ LC skilled workers, who are called CDCS. The more CDCS officers stay in the bank, the more acceptable they are in the world.
There are about 600 CDCS officers in Bangladesh. Of these, only 300 are from Islami Bank. In the case of real automation, we manage through the central department. I have allowed the officers to work at home with iPad. In this way, the customers are getting instant service. ‘He said,’ Last year we made a profit of Tk 2900 crore, which is increasing every year. We have been allowed to pay 100% cash dividend.
The EPS of most companies is below 3 percent, which is 3.40 percent of Islami Bank. Islami Bank is the 946th financial institution of the world’s thousandth bank, which is the only bank in Bangladesh. This situation will improve next year. ”