Quazi Osman Ali Social Islami Bank Limited (SIBL) has put emphasis on mobilising low-cost deposit by bringing more unbanked people under its network through bolstering financial inclusion programmes across the country.
Under the latest moves, the second generation private commercial bank (PCB) is set to strengthen its rural banking activities with expansion of agent banking and booth banking along with ATM booths in the coming days.
"We want to increase our core deposit from rural areas through strengthening financial inclusion programmes across the country," Quazi Osman Ali, Managing Director (MD) and Chief Executive Officer (CEO) of the SIBL, disclosed while sharing his future plans for expanding business activities of the bank in an exclusive interview with the Financial Express (FE) recently.
The senior banker believes that each citizen should be included in formal economic activities through opening bank account.
Around 30 per cent people in Bangladesh are still excluded from formal financial system mainly due to the lack of banks' dedication to offer diversified services, existing collateral-based system for loan disbursement, low level of financial literacy, and information asymmetry.
Deposit collection through agent banking jumped significantly in the last two years after taking responsibility of the Bank by the current MD on October 31, 2017.
Currently, collection of low-cost deposit with the agent bank rose to Tk.1100 million from only Tk 20 million two year ago, according to the CEO.
To deliver banking services at the doorsteps of the people of the remotest areas of Bangladesh, the SIBL is now providing agent banking services through 108 outlets across the country.
"We have also 12 banking booths with all banking facilities and 10 more will be added to the list within this calendar year," the MD added.
He also believes that the true financial sustainability will not be possible without mainstreaming the marginal people into financial activities.
"We may ensure bank account for each citizen through expansion of agent banking across the country," the senior banker explained to mark the bank's 24th anniversary on Friday.
SIBL is running microfinance and family empowerment programmes to provide collateral free investment to individuals or groups aiming to bring solvency in the ultra-poor families.
"We've already provided financial support to some 9443 ultra-poor families who had no access to any financial institutions previously," the MD said while responding to another query.
The Shariah-based Islami bank has also introduced a special deposit product-- Super Savings Deposit Scheme -aiming to help senior citizens and women.
"We're now offering 1.0 per cent more profit on such deposit scheme to facilitate senior citizens as well as empowering women financially," Mr. Ali explained.
He also said the SIBL wants to attract depositors with providing quality services to their clients using modern technologies.
As part of the move, SIBL is providing better services to their existing 1.50 million clients who are expected to act as brand ambassadors of the bank in future.
"An aggressive competition has begun to procure deposit. A number of new banks also entered into the competition in the last couple of years making the scenario worse," the CEO said while explaining the deposit collection situation on the banking industry.
He also said the SIBL is the first bank among Islami banks to introduce on-line banking for providing prompt and secured services to its valued clients.
"This is also ahead in respect of transparency, accountability, quality services in all its banking activities," Mr. Ali, who obtained a post-graduate degree from the University of Chittagong, noted.
The rising trend of non-performing loans (NPLs) is also a big challenge for the entire banking industry in the near future, according to the senior banker.
"We've already strengthened our recovery drives with taking different measures to reduce the volume of classified loans," he added.
Under the measures, SIBL formed committees from branch to Head office with giving specific loan recovery targets, according to the MD.
Mr. Ali also hoped that the Bangladesh Bank (BB)'s latest policy will help slashing the amount of NPLs in the country's banking sector including his bank by December 2019.
The central bank offered a special facility to loan defaulters on May 16, allowing them to reschedule loans by paying 2.0 per cent down payment for a maximum of 10 years.
SIBL has also planned to set up a full-fledged branch in the Saudi Arabian port city Jeddah to collect more remittance from the KSA.
"We've already submitted an application to the Saudi Arabian Monetary Authority (SAMA) seeking permission to establish the branch in the Kingdom of Saudi Arabia (KSA)," Mr. Ali, a 35-year experienced banker, said while replying to a query.
The CEO also said the branch would help boosting overall business activities including non-funded one of the second generation bank.
"We've been able to meet the desired goals in respect of deposit, investment, export-import, remittance, operating profit, corporate governance, and so on," he explained, adding that the SIBL bank will be the topmost Islami bank in Bangladesh within the next couple of years.
SIBL has taken multiple initiatives to mark 24th celebration.
As a part of the initiatives, the bank has launched a campaign--Sheba Mash- to ensure better services to the clients. "To commemorate the occasion many more programmes have already been done."
As part of the corporate social responsibility (CSR), the Shariah-based Islami bank has already joined Underprivileged Children's Educational Programmes (UCEP) Bangladesh to facilitate improving skills to the underprivileged youth of the society.
The SIBL started its journey on 22 November 1995 with only five branches. Now it has 159 branches that are set to cross 160 branches by the end of 2019.
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