Islami Bank Bangladesh Limited (IBBL) has planned to launch real time online investment banking riding on the latest financial technology (FinTech) by the end of this calendar year, the bank's top executive has said.
"We're planning to sanction and disburse small investment initially through our own FinTech platform by the end of 2020," Md Mahbub-ul-Alam, managing director (MD) and chief executive officer (CEO) of IBBL, disclosed while sharing his future business strategies in an exclusive interview with the Financial Express (FE) recently.
FinTech is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services using smartphones or internet.
As part of the strategies, the board of directors of country's largest private commercial bank (PCB) has already given approval of Tk 2.0 billion to procure both hardware and software immediately for developing information and communications technology (ICT) infrastructure.
"Actually, we have planned to provide all kinds of investments and other services through using the FinTech platform in future that will also help reduce the cost of doing business in Bangladesh," the CEO explained.
Currently, IBBL is using its FinTech platform for sanctioning advances from branches to headquarters for providing better services to its clients.
The top management is now trying to convert IBBL into FinTech-based global standard modern bank in the near future from the existing level of the bank, according to the CEO.
The senior banker also said IBBL has already created new milestones in deposit mobilization and inflow of remittances that indicate increased public confidence in the PCB despite a major change in its management in 2017.
"The people have already realized that the current board of directors is capable of running the largest PCB efficiently with maintaining its mission, vision and dignity," the CEO observed.
The PCB has been working to ensure equity and justice in all economic activities for achieving a sustainable and balanced growth and equitable socio-economic development since its inception on March 30, 1983, according to Mr. Alam, who obtained a post-graduate degree from the University of Dhaka.
He has been serving as MD& CEO of IBBL since February 11, 2018. He joined the Sharia-based bank on February 05, 1984.
Aggregate deposit of IBBL has crossed Tk 1.0 trillion-mark recently for the first time in the private banking sector of Bangladesh despite the ongoing Covid-19 pandemic.
The deposit of the PCB grew by Tk 53.43 billion to Tk 1000.24 billion in the first six months of 2020 from Tk 946.81 billion six months ago, according to the bank's latest statistics.
The deposit of IBBL was Tk822.57 billion in 2018.
IBBL has been able to mobilize the low-cost deposit through introducing 28 products including different types of Mudaraba deposits and cost free ones.
"We're investing such deposits in different productive sectors including apparel and clothing one, the government securities and other financial institutions considering the profit of depositors," Mr. Alam said while replying to a query about using the deposit.
The senior banker also urged the authorities concerned to issue sukuk bonds to bring dynamism in the country's Islamic financial market.
Sukuk is the Arabic name for a financial certificate, also commonly referred to as 'Sharia compliant' bond.
"Such Islamic bonds may help fulfill the funding gap for financing development of the country's infrastructures," the CEO said while describing the necessity of sukuk.
Currently, two Islami bonds-- Bangladesh Government Islami Investment Bonds (BGIIB)--with tenures of three and six months respectively are traded on the Islamic money market.
Total investment (excluding investment in shares/security) rose by Tk 27.13 billion to Tk.926.14 billion in the first-half of this calendar year from Tk.899.01 billion of the last half of 2019.
The investment was Tk 805.76billion in 2018.
Besides, the leading PCB is now working to invest around Tk 50 billion for implementation of the government announced financial stimulus package for industrial and services sectors to facilitate businessmen for recovering their losses mainly due to the Covid-19 pandemic, the CEO added.
"We expect that the disbursement of funds will be completed in line with the Bangladesh Bank (BB)'s instructions," Mr. Alam said while replying to another query.
Earlier on July 02 last, the central bank of Bangladesh asked all the scheduled banks for taking effective measures to implement the stimulus package for businesses through disbursing all funds within the next month.
The banks have also been asked to implement the lion's share of the stimulus packages within this month and the remaining portion by August 2020.
"We're working sincerely to implement the financial packages in time for betterment of the business community as well as the general public," the CEO explained.
Currently, IBBL serves 15million clients through 357 branches, 60 sub-branches, 1,200 agent banking outlets, 660 own and about 11,000 shared ATM (automated teller machine) and CRM(cash recycle machine) booths across the country.
IBBL has been grabbing the number one position in collection of inward remittances since 2009 following dedication of top management as well as widening networks both domestic and globally.
But the Shariah-based bank has been able to create a new record for receiving inward remittances in the recent months despite the ongoing Covid-19 pandemic.
The top executive of IBBL predicted that his bank will receive around $750 million as remittances in July which was $582 million in June 2020.
"We expect that the upward trend in inward remittance will continue in the current fiscal year as the government has kept continuing the 2.0 per cent incentive for remittance receipts for this fiscal year," the CEO noted.
The BB's latest policy support has also helped boost the flow of inward remittance in the recent months despite the Covid-19 outbreak almost across the world, Mr. Alam explained.
The central bank has already relaxed the conditions for incentives on the money sent by expatriate Bangladeshis to lift up the sinking flow of remittances amid the coronavirus pandemic.
Under the latest relaxations, the expatriate Bangladeshis can get 2.0 per cent incentives without showing any paper for incentives on remittance up to $5,000 or Tk 500,000.
Earlier, the ceiling was Tk 150,000. Besides, those sending more than Tk 500,000 will have two months to submit the papers instead of 15 days earlier.
The expatriates who have already sent money will also get the facilities. These will be effective until December 31, 2020.
IBBL has once again secured its position for the last nine consecutive years as the only bank of Bangladesh in the list of the world's best 1000 banks.
The leading PCB has already been identified as a best bank with upgrading the ranking to 904th in 2020 from 943 rd a year ago by the Banker, a world-renowned UK-based financial magazine, recently.
"The Banker magazine has upgraded the ranking considering different latest key financial indicators including deposit, advance, cost of fund, return on assets, earnings per share and net asset value of IBBL," Mr. Alam said while explaining such ranking enhancement.
In 2012, IBBL became the first bank of the country to be included in the list of the world's best banks.
Replying to another query, the CEO said quality human asset, technology-based advancement and good corporate governance have been IBBL's cornerstone since its inception.