Through the Decades of Banking

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Islami Bank has had a historic opening. Could you elaborate on its beginnings?
On February 1974, the Father of the Nation, Bangabandhu Sheikh Mujibur Rahman attended the 2nd OIC Conference. There, it was resolved to establish an International Bank of the Muslim States. In the August conference of the OIC Finance Ministers in Jeddah, 1974, Finance Minister of the Bangabandhu Government Tajuddin Ahmed signed the IDB Charter. In this backdrop, through different Government and non-government initiatives and the vital role of the central bank, Islami Bank Bangladesh Limited (IBBL) started operations as the first generation commercial bank of the country on March 30, 1983, by the opening of its first Account for Islamic Foundation, Bangladesh.

Mohammad Abdul Mannan Managing Director and CEO Islami Bank Limited
Mohammad Abdul Mannan
Managing Director and CEO
Islami Bank Limited

Islami Bank has retained an impeccable reputation for more than 40 years. What are the markers of your success? How has the bank grown within the course of time?
Islami Bank has completed its journey of more than three decades of service and care in the perspective of a global trend of shifting to Islamic way of banking; being ranked as “One of the world’s best 1,000 Banks’ and awarded as the “Best Managed Bank in Bangladesh” by the ‘Asian Banker’s resemble the continuity of its global ranking and appreciation of success. Touching the success points one after another in rapid succession, Islami Bank has already become the largest commercial bank in the country, creating a name for itself in all service initiatives – especially in deposit, investment, export-import, remittance, industrialization, entrepreneur development, and women empowerment. Islami Bank is a partner in the national growth and development. It happens to be the highest tax-paying institution of the country. As the best micro-enterprise-friendly bank IBBL is recognized by the huge populace all over the country. In 2000, the Bank had 1 million customers, in 2010 it had 5 million. By 2016, the number stands at 11.5 million. In the last 5 years, the number of depositors grew by 6.5 million. 14% of the country’s total bank depositors’ accounts are with Islami Bank alone.

What are some the services that Islami Bank provides?
Islami Bank encourages people for savings both for individual benefit and for the greater benefit of the country. It has been consistently and very meticulously working to raise the savings awareness of the people, especially in the remote inaccessible areas and among the less-advantaged population of the country. Since 1995, Islami Bank has been operating a scheme of micro-savings with Tk 10 deposit. Besides this, Islami Bank has introduced innovative schemes like Cash Waqf in order to ensure welfare to the poor and deprived sections of the population. For the empowerment of the women, it has introduced ‘Mohor’ Account, based on the saving installments by male members. Islami Bank attaches greater emphasis to harnessing small deposits rather than huge or corporate deposits. As a result, this bank’s deposit base is very strong. The deposit profile of the bank has increased three times in each five years since 1990. In the last decade, the bank’s deposits have grown ten times. These figures stood at Tk 290,000 million in 2010, which stood at Tk 660,000 million by July 2016. Islami Bank holds almost 8% of the country’s total bank deposit and its average deposit growth is 21%.

“In 2000, the Bank had 1 million customers, in 2010 it had 5 million. By 2016, the number stands at 11.5 million. In the last 5 years, the number of depositors grew by 6.5 million. 14% of the country’s total bank depositors’ accounts are with Islami Bank alone.”

Banks are the financial center of business development. How has Islami Bank supported Bangladesh on a national level?
Islami Bank has been ceaselessly working to strengthen the economic base of the country ever since its inception. As part of the delegation of discretion, six committees comprising the members of the Board of Directors were constituted in 1984 in order to augment national development priorities and welfare programs of the Bank. Those committees were on Agriculture, Industry, Trade, Housing, Investment and Foreign Remittance Mobilization. This Bank attaches utmost priority in investing into sectors that concern people’s basic needs, economic development, people’s welfare and overall socio-economic development of the country. Islami Bank pursues a coherent strategy of investing into need-based, labor-intensive, productive, import-substitute and export-oriented sectors and all are carried forth with the national priority coherence for equitable and sustainable development, especially through investment diversification protocols. IBBL is the pioneer in the advancement of the national economy through two major pillars – Foreign Remittance and Readymade Garments. Islami Bank’s investment portfolio was worth Tk 597,600 million by June 2016, out of which investment in foreign exchange was Tk 28,000 million. Islami Bank’s market share in investment in Garments and Textile Sector stands at 21%. IBBL disburses 9% of the total investment/credit of the entire banking system of the country. Growth in Investment of Islami Bank in last 5 years was 17%.

What are the major sectors that Islami Bank has focused on?
More than 5,000 industrial enterprises of the country are now run by IBBL Finance. During the last 15 years, IBBL’s investment was Tk 1,800 billion for industrialization. More than 1,000 Garments factories are run by Islami Bank finance. Islami Bank has been attaching key priority to the SME sector making significant contributions to the sector since its inception. In 2015, IBBL’s contribution in SME sector were 25%; in total, it has invested Tk 1,484,860 million during last 10 years. The bank has disbursed investments to some 0.2 million clients, which is one and a half times more than the target. More than 1,500 agro-based industries have emerged with IBBL investment. IBBL financed more than Tk 10,000 million in Jute sector. More than 17% of Jute goods are produced from factories financed by IBBL.

How is Islami Bank contributing towards decreasing the poverty levels of the nation?
To eradicate rural poverty, creating employment in the countryside, developing agriculture and agro-based enterprise, Islami Bank introduced RDS (Rural Development Scheme) in 1995. Enhancing rural life and livelihood and thus to bring qualitative change in rural life was the core objective of RDS. This unique rural initiative includes, in addition to generating rural job opportunities, some basic human development efforts like creating awareness, enhancement of skills and vocational aptitude, training, savings, various income generating activities, micro-investment, and social security awareness etc. Islami Bank is equally concerned for the urban poor. In 2012, IBBL introduced ‘Urban Poor Development Project’ (UPDP) for the urban slum-dwellers. Tk 150,000 million were disbursed under this project up to June 2016. 4.24% of the country’s total micro-investment is conducted by IBBL. One million families are beneficiaries of this scheme, out of which 82% are women. RDS project members are imparted training support by the local agricultural extension, fishery, veterinary, and youth development officials on various agro-based and income-generating activities. Up to Tk 0.1 million is disbursed without collateral. Up to Tk 0.5 million is disbursed under this scheme for various productive, trading and service enterprises.

Incorporating technology and green banking have become the future of banking. What is your take on this trend?
Islami bank is increasing technology-based services like internet banking, mobile banking, SMS Banking, e-commerce etc. for their valued customers. Up to June 2016, the number of Islami bank’s ATM card reached to 2.6 million, mobile banking customer 2.35 million, SMS banking customer 3.1 million and internet banking customer is 0.2 million. Green economy is needed to build a green earth as such, Islami Bank is working to make the grey economy turn green. The bank doesn’t invest in tobacco, narcotics or any socially harmful grey sectors. It is working for fuel-efficient electrical equipment, solar panels, online communication and marketing, training and skills developments, etc. The bank is contributing in greening the country through massive forestation programs. As a part of green banking, IBBL has introduced paper-saving and time-saving internet banking, ATM, VISA Card, Khidmah card, i-banking, SMS banking, Call Centers, etc.

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