Md. Habibur Rahman
Al Arafah Islami Bank Limited (AIBL) is offering advantage to good performance investment clients aiming to expedite its business activities.
"We're offering lower rates of interest on case to case basis to attract the good performance investment clients," Md. Habibur Rahman, managing director (MD) of the AIBL, told the FE in an exclusive interview recently.
He also said the bank has strengthened its investment in foreign trade along with project financing through induction of good performance clients.
The bank's overall investment increased by nearly 31 per cent to Tk 137.43 billion in June 2014 from Tk 105.21 billion a year ago while operating profit jumped by nearly 40 per cent to Tk 2.73 billion from Tk 1.96 billion. However, the bank's operating profit stands at Tk.3.68 billion up to August,2014.
"We've attained the hefty growth of operating profit in the first six months of the current calendar year due mainly to efficient fund management," Mr. Rahman explained.
He also said the AIBL is trying to keep its cost of fund at a reasonable level through improving fund management.
The traditional banking business is now facing stagnancy due mainly to poor demand for fresh credit caused by the political uncertainty, inadequate infrastructure facilities and availability of low cost foreign currency loan for the private sector, according to the senior banker.
The AIBL chief executive also said top management of the bank is working giving priority the corporate banking along with financing in small and medium enterprises (SME) and agriculture sector to facilitate the ongoing financial inclusion programme in Bangladesh.
The Bangladesh Bank (BB) is now promoting targeted financial inclusion in areas of agriculture, SMEs, and exports facilitations, upholding domestic demand with six plus per cent stable annual average real growth over more than a decade.
Like other banks, the amount of non-performing loans (NPL) of the AIBL has increased slightly in June following higher business growth during the period under review.
The volume of NPL rose to Tk 5.01billion in June 2014 from Tk 4.65 billion in the same period of 2013.
The amount of classified loans in the country's banking system increased by 6.58 per cent to Tk 513.44 billion in the April-June period of 2014 from Tk 481.72 billion in the previous quarter of this calendar year, the BB data showed.
"We've taken different effective measures to curb the volume of NPL," the MD said, adding that the AIBL has already intensified its recovery drives to reduce the amount of NPL.
Mr. Rahman also expressed his commitment to establish the AIBL as a compliant and dynamic bank through ensuing good governance in the Shariah-based Islami bank.
"We're updating our internal control and compliance in line with the central bank requirements. We're also implementing the BB's core risk guidelines to minimise our financial risks," he noted.
The central bank of Bangladesh earlier identified six core risk areas in the country's banking sector. The risk factors are: credit, asset and liability, foreign exchange, information technology, internal control and compliance, and money laundering.
"We believe in providing dedicated services to the clients imbued with Islamic spirit of brotherhood, peace and fraternity," the MD explained.
The AIBL is committed towards establishing a welfare-oriented banking system to meet the needs of low income and underprivileged class of people.
Mr. Rahman also said the AIBL upholds the Islamic values of establishment of a justified economic system through social emancipation and equitable distribution of wealth.
Currently, the AIBL is running businesses across the country through 118 branches. The private commercial bank started its operations from September 27, 1995.
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