Muhammad Ali

Muhammad Ali, managing director of Social Islami Bank Limited (SIBL), was recently interviewed by Ahammad Parvej Khan, Staff Correspondent of daily sun. He talked about the bank’s achievements over the years, future plans and the new strategy of introducing innovative banking system.

MD said SIBL has set its strategy of introducing a banking system through blending of both centralised processing unit (CPU) and effective branch operation, rather than mere traditional branch-based system. The new system is based on modern essence of banking. SIBL’s goal is to provide better and time-befitting services to the clients, Muhammad Ali added.

As an Islamic Shariah-based bank, he continued, SIBL always lays emphasis on employment generation and environment-friendly business for equitable distribution of resources over geographical territory. According to him, it will help to attain sustainable growth. Following is the details of the interview.

daily sun: As a second generation bank in the country, SIBL has made tremendous growth. Would you please tell us the success stories of the Bank?

Muhammad Ali: SIBL has a well-planned business strategy which eventually led to achieve the success as we maintained steady growth over the years with excellent performance. The Bank was able to have a solid banking foundation in 2011, resulting in a robust growth in 2012. It was possible because of strategic business policy the Bank had adopted. The pro-active management team has been working to make sure that the success continues.

The bank had many challenges to address when it was launching, but now SIBL is a successful bank in the country as it has been able to address almost all of those challenges. The Bank marked significant growth in all indices, as the officials could work without being exposed to any extraneous pressure. The Bank’s management team can approve the investment of up to Tk 100 million as well as appointment and transfer of officials.

The bank’s capital has now increased to Tk 9.70 billion by 2011 from the launching amount of Tk 126 million. It was Tk 4.68 billion in 2010, marking 107.32 percent growth. The total assets of the Bank now stood at Tk 84.37 billion as of 31 December, 2011, compared to Tk 55.17 billion in 2010, posting 52.92 per cent growth.
daily sun: Would SIBL be able to overcome the challenges which the banking sector has many challenges in the years ahead?

Muhammad Ali: The year 2012 is considered as a golden year for SIBL. For last one year, the management has been able to set an ideal investment portfolio catering to very dependable business houses involved in trade, commerce and industry through relentless effort. Meanwhile, the bank has diversified the services to the retail sectors, aimed at culminating their business with SIBL. Consequently, more and more people are being brought to the banking service through financial inclusion initiatives.

As a part of our business strategy, we started earning foreign currency from exports and remittance so that the bank can go for import business smoothly. For this, the bank has enough foreign currency, especially the US dollar to open letter of credit (LCs). But previously, it could not operate foreign trade due to shortage of foreign currency. The Bank had to depend on inter-bank currency market to open LCs for import. But last year, we could open a large number of LCs involving huge foreign currencies from our own source. i.e. export proceeds and remittance.

Nonetheless, SIBL has been boldly facing corporate challenges in a structured planned way in regard to competitive deposit market and market pressure to narrow the spread including implementation of Basel-II and III.
daily sun: What are other fields where SIBL has made success?
Muhammad Ali: We cannot deny that the fact that our economy is experiencing some perennial problems like power, fuel, energy and food shortages together with dearth of infrastructures. Additionally, unemployment is the worst problem for the economy. Given all these issues, we should solve the crises of our economy on priority basis.

Dr. Atiur Rahman, Governor of Bangladesh Bank, has taken the right decision to put emphasis on SME and agro-finance. We believe the GDP growth and the employment generation largely depend on SME and agriculture. Reviving agriculture is must to ensure food security. SIBL, therefore, has started giving special importance on SME and agriculture sectors. After my joining, the bank increased 400 per cent SME investment and 150 per cent agro-financing. SIBL opened LCs worth more than Tk 10 billion for fertiliser. But adequate energy supply to the agriculture and industries still remains a big challenge, which needs to be addressed immediately.

daily sun: Would you tell about financial strength of SIBL?
Muhammad Ali: The Bank’s financial base is much stronger now. In 2011, SIBL’s deposit was Tk 67.13 billion against Tk 45 billion in 2010 while investment was Tk 36.68 billion at the end of 2010, which increased to Tk 53.90 billion by the end of 2011. Remittance through SIBL increased to Tk 5.13 billion in 2011 from Tk 2.11 billion in 2010. The bank’s operating profit jumped remarkably to Tk 3.02 billion by the end of 2011 against Tk 1.63 billion in 2010, indicating a growth of 84.19 percent.

Besides, our corporate strength is also remarkable, showing satisfactory capital adequacy, good asset quality, sound liquidity position, good financial performance, satisfactory operating efficiency and highly experienced proactive management team.

daily sun: How do you see the initiatives that Bangladesh Bank has taken for socio-economic development of the country?

Muhammad Ali: The Bangladesh Bank has given priority to the interests of farmers, lower and middle class people. Besides, its initiatives are contributing tremendously in smooth expansion of the SMEs and agro-based industries.

Bangladesh Bank took initiatives to open bank accounts of hardcore farmers with only Tk 10 for distributing SME credits among them. As I already said, SIBL has also laid due emphasis on SMEs and agro investment as part of its financial inclusion. Not only that, we also have plans to spend our CSR fund in developing human resources. As an Islamic bank, SIBL is quite conscious of its social business responsibilities and always trying to participate in various social programmes in the country. The Bank is committed to serve the society at large through its family empowerment.

daily sun: : How do you think the bank could serve people at grass root level?
Muhammad Ali: Currently, about 20 to 25 percent people in the county have been covered by banking services. SIBL has opened 12 branches in 2011 to bring more people under the banking service. The Bank has plans to open more branches this year. It will also introduce mobile banking, school banking and internet banking, among other new services.

The real-time on-line banking services have already been opened to provide IT services which has been providing to the clients through its core banking software. Internet banking service will be introduced very shortly so that our customers could be informed about the latest position of their account balances, statements, etc through internet. Besides, submissions of cheque book requisitions and LC opening applications will be made possible through internet.
daily sun: What is the vision and mission of SIBL?

Muhammad Ali: SIBL started functioning in November 1995 with a vision to help the country achieve economic growth. It began its functions with a three-tier banking system. Its goal was to alleviate poverty through micro-credit. After years of addressing challenges, the bank now stands on a firm footing. The bank presently has 76 branches. Besides, it has two subsidiary entities SIBL Securities Ltd and SIBL Investment Ltd.
The bank will soon be one of the leading private banks of Bangladesh. It will also be a leading Islamic Shariah-based bank of the country within next few years.

daily sun: Do you have business expansion plans this year?
Muhammad Ali: To continue the growth, the Bank has some new plans for 2012. It will start social and green banking and increase foreign remittance channeling and export business. It will also raise its expenditure in CSR, introduce mobile and SMS banking for rural and middle class people to bring them under banking service, open school banking for the students and some new branches at the areas where people are completely out of banking services till now.

The Bank has begun a three-month campaign with a theme slogan ‘Excellence Non-stop’, aimed at bringing about excellence in the Bank’s service delivery.

SIBL has now appeared with new appearance before the customers with some time worthy packages. The state-of-the-art banking software of the Bank will enable all branches provide real time banking service to the clients. SIBL is supported by core banking solutions and our products and services are strongly backed by IT infrastructure, which are upgraded and expanded time to time.

SIBL has also changed its brand logo recently. The new logo depicts a bird’s wing with nine feathers to represent its comfortable and safe flying in the economic sky of the country connecting it with the global sky beyond boundaries. The wings are coloured in red in a green background.

Red symbolises the vigour and enthusiasm of youth and the green symbolises love for the motherland Bangladesh. Moreover, nine feathers represent- honesty, transparency, efficiency, accountability, reliability, innovation, flexibility, security and technology flying towards continuous excellence. We take pride in our new logo.

Finally, I most humbly submit to the greatness of Almighty Allah (SWT) soliciting Thy’s mercy to pave the journey towards glorious success of SIBL in continuity.

The Daily Sun/Bangladesh/ 5th Feb 2012