Munafa Islamic Digital Bank can win back affected clients

The proposed Munafa Islamic Digital Bank aims to introduce specially designed products targeting Shariah-compliant clients who have been badly affected by the recent shock in the country's unconventional banking ecosystem.

AKIJ Resource, a business entity originating from one of the country's oldest conglomerates-the AKIJ Group-is one of the 12 aspirants seeking a licence from Bangladesh Bank (BB) to introduce the country's first-ever Shariah-based digital bank.

By onboarding unconventional customers who are seeking a reliable and trusted alternative in the current banking environment, AKIJ Resource aims to regain clients' trust and confidence in Islamic banking operations through digital services, subject to central bank approval.

Chief Executive Officer (CEO) of AKIJ Blue Pill Limited, Mohammad Anwar Hossain, shared the company's plans for the digital bank in an exclusive interview with The Financial Express recently.

Providing background, he said Islamic banks hold nearly one-fourth of Bangladesh's total banking assets, indicating strong demand. "Trust creates demand, and demand creates opportunity," he said, adding that Shariah-based banks have recently suffered a shock due to compliance-related shortcomings in some institutions.

After the banking regulator re-invited applications for digital banking licences, he said many groups applied, but none proposed a full-fledged Islamic digital banking operation. Meanwhile, customers seeking Shariah-centric financial services have been looking for a trusted alternative with strong compliance and corporate governance.

"AKIJ is one of the most trusted brands in Bangladesh, with an 85-year business legacy. That is why we stepped forward to restore confidence in unconventional banking operations, if the regulator permits," said Mr Hossain, who has around 20 years of professional experience.

Upon receiving BB approval, he said the company firmly believes it will be able to bring unbanked populations into the formal system, while also onboarding clients adversely affected by recent crises in some traditional Islamic banks through specially designed products.

Regarding priorities after licensing, he said the bank would first focus on educating potential customers nationwide about Islamic digital banking and how it can meet their expectations.

"Then we will move towards adoption and large-scale engagement activities for our products," he added.

Responding to a question on preparedness, the top executive of AKIJ Blue Pill Limited, which specialises in cybersecurity, said the company is in discussions with globally renowned fintech firms, investors and Malaysia-based Shariah advisory companies to ensure sustainability.

"We are also connected with the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). We have completed all preparations to commence operations if we are licensed," he said.

On Shariah governance, Mr Hossain said the company would form an independent Shariah board in compliance with BB regulations immediately after receiving regulatory clearance, and the company's board of directors would not interfere in its decisions.

"We will not compromise on decisions made by Shariah board members. This was a company decision even before applying for the licence," he said.

Regarding experience in cutting-edge technology, Mr Hossain, who has 16 years of banking experience, said AKIJ Resource has been investing heavily in digital transformation over the past several years to become a globally competitive and sustainable corporate group.

As part of this effort, he said the group has formed four specialised arms, including AKIJ Blue Pill Limited and the Intelligent Business Operating System (AKIJ iBOS), to build a digital ecosystem not only for internal use but also for external clients such as banks and corporate entities.

According to him, AKIJ Blue Pill focuses on cybersecurity, while iBOS develops digital business solutions. "We have a pool of globally certified experts, and global fintech companies will be working with us. We are confident," he said.

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