IFIC Bank to focus on MSMEs, agro sector: Chairman

IFIC Bank has planned to streamline its business policy by focusing on micro, small, and medium enterprises (MSMEs) and the agriculture sector, aiming to bring more unbanked people into the banking network, the bank's top policymaker has said.

"We want to establish inclusive banking with SMEs and micro loans by leveraging our extensive sub-branch network across the country," Md Mehmood Husain, independent director and current chairman of IFIC Bank, disclosed while sharing his future business plans in an exclusive interview with The Financial Express recently.

IFIC plans to expand its network by gradually setting up new sub-branches in various parts of the country after observing deposit growth over the next three months, according to the chairman.

Currently, IFIC Bank is running its business with a network of more than 1,400 branches and sub-branches across the country.

Additionally, the bank has decided to invest 60 per cent of its surplus funds in government-approved securities until September 2026, while the remaining 40 per cent will be disbursed as loans to the MSMEs and the agriculture sector, the chairman added.

"We have already instructed the treasury department to strengthen its capacity for managing liquidity efficiently," Mr Husain said while replying to a query.

He also stated that IFIC Bank will provide financing to support its export-oriented corporate customers.

To improve its financial health, the bank is working to reduce the amount of non-performing loans (NPLs) to a tolerable level within the next two years.

"We will not be able to reduce the percentage of NPLs to a single digit within the next two years. However, we expect to bring down classified loans and the provisioning shortfall to a tolerable level during the period under review," the chairman said while explaining the latest situation of his bank's stressed assets.

He also added that IFIC Bank has no unidentified or untraceable loans.

The reconstituted board of the bank has already completed the assessment of its loan portfolios to determine the status of its classified loans.

According to the chairman, up to 38 per cent of outstanding loans have become classified, and the bank has already reported this to the central bank.

"We did not attempt to conceal the NPLs, which has allowed us to understand the actual status of the loan accounts," he said, adding that this assessment has also helped the bank intensify its recovery efforts.

Similarly, IFIC Bank has already initiated an audit to examine whether the loan sanctioning process was conducted correctly.

"Various penalties are being imposed on the officials responsible, in accordance with service rules of the bank, if any negligence or irregularities are found," Mr Husain continued.

He also emphasised the new board's commitment to restoring transparency and accountability within the bank.

"The reconstituted board has made it clear that IFIC will operate professionally and ethically. There will be zero tolerance for non-transparent transactions, inefficiencies, or dishonesty," the chairman noted.

However, the senior banker acknowledged that the amount of NPLs at the bank has increased significantly, as several corporate accounts transitioned from regular to troubled loans due to Bangladesh's political landscape changing on August 5, 2024.

Classified loans in the banking sector keep rising fast, with the cumulative volume making a quantum leap by over Tk 2.0 trillion year-on-year till last December, official statistics show.

With such leaps in the volume of NPLs, the figure hit a record-high of Tk 3.45 trillion by the end of the last calendar year, accounting for 20.20 per cent of the entire loans worth Tk 17.11 trillion disbursed by the country's all scheduled banks.

Mr Husain was appointed as an independent director on September 4, 2024, through the reconstitution of the IFIC Bank's board by the Bangladesh Bank. He was subsequently elected chairman of the board of directors during the bank's 894th meeting held on September 8, 2024.

Mr Husain is a member of the Executive Committee of the Board of Directors of IFIC Bank. He serves as the chairman of IFIC Money Transfer (UK) Limited, UK, and as a director of Oman Exchange LLC, a joint venture company of the bank in the Sultanate of Oman.

He also served as the managing director and chief executive officer (CEO) of National Bank, NRB Bank, and Bank Asia for nearly 12 years. With over 39 years of experience, his career spans all areas of the banking sector.

He completed his BSS (Hons) and Master's in Economics from the University of Dhaka. He began his career at National Bank Limited as a probationary officer in 1984.

The experienced banker also spoke on different issues like good governance, deposit mobilisation, and image building of the first-generation private commercial bank of Bangladesh.

Citing examples from both national and international banks, Mr Husain expressed confidence that it would be possible to restore the bank's former glory within the next five to seven years, provided that both the board and the management team act efficiently.

Regarding deposit mobilisation, the chairman stated that IFIC Bank has made a turnaround in terms of deposits within just four months by restoring public confidence in the private commercial bank.

IFIC Bank faced significant deposit withdrawals, causing its deposits to decline to Tk 444 billion by the end of August 2024, as public confidence weakened amid the political transition.

By the end of November 2024, the bank recorded a net deposit growth of Tk 10.36 billion, raising total deposits to Tk 477.50 billion in December of the last calendar year, registering 7.33 per cent growth over 2023, according to the chairman.

"Our total deposits reached nearly Tk 500 billion in March 2025, following a combined effort by both the board and the management to reverse the situation by rebuilding public trust," Mr Husain said in response to another query.

He also said that the bank's board and management have tried to reassure valued customers through electronic, social, and print media that those responsible for creating the adverse situation at the bank have already been removed from its board.

"We have also highlighted the government's shareholding in the bank," the chairman said, adding that the bank will operate smoothly following the reconstitution of its board by the central bank.

The Bangladesh government holds 32.75 per cent of the bank's share capital, while the remaining shares are held by both local and foreign institutions as well as general shareholders.

The government is represented on the bank's board by two nominated directors. The current board of directors, formed by the Bangladesh Bank, also includes three independent directors.

The International Finance Investment and Commerce Bank, popularly known as IFIC Bank, was converted into a full-fledged commercial bank in 1983 when the government allowed banks in the private sector.

The chairman also said that the reconstituted board of IFIC Bank remains accountable to the central bank and its stakeholders for ensuring good governance within the bank.

Asked about the controversial IFIC Aamar Bond, issued to fund a real estate project in which Salman F Rahman, former chairman of the bank and adviser to ousted prime minister Sheikh Hasina, and his son Ahmed Shayan Fazlur Rahman have stakes, Mr Husain said the bank is currently exploring various options to move the project forward.

"The bond subscribers will receive their coupons as promised," the chairman said, adding that IFIC Bank serves as the guarantor of the bond.

The chairman criticised the bank's previous governance structure, stating that the 16-year tenure of the Awami League-led government lacked an effective and professional management culture.

"The country's banking sector has faced significant losses over the past 16 years, primarily due to a lack of corporate governance," Mr Husain said, adding that the losses of IFIC Bank are not too severe compared to those of other banks.

siddique.islam@gmail.com