Social Islami Bank Ltd (SIBL) is focusing on small depositors and millions of unbanked people in order to build a strong deposit base.

The private bank has introduced savings schemes for education, marriage and medical care by giving importance to the needs of people, especially the middle class.

The initiative comes as people need a good chunk of money for medical treatment and to get their children admitted to educational institutions at home and abroad. The savings schemes will enable the account holders to meet a portion of their requirements.

"The feature of these savings schemes is that one can get the double the amount they deposit. We have already received a very good response from savers," said Zafar Alam, managing director and chief executive officer of SIBL.

"We always keep peoples' needs in our mind."

Apart from this, SIBL plans to introduce deposit schemes for non-resident Bangladeshis (NRBs), retired citizens and street vendors in a bid to attract savers and bring more people under the banking system.

Zafar Alam

In Bangladesh, the number of unbanked people is very high.

"We have established seven zonal offices throughout the country to reach the doorsteps of the marginalised people. We have taken the initiative to diversify banking services and accelerate financial inclusion," said Alam.

He believes: "Small deposits are core deposits. The higher the amount of small deposits, the better it is for a bank."

The CEO shared these during an interview with The Daily Star on the occasion of SIBL's 27th anniversary.

Established on 22nd November in 1995, SIBL operates through 179 branches and 145 sub-branches. It has 308 agent banking outlets and 196 automated teller machines to serve clients.

The bank registered a steady growth in deposits and investments in the last five years and has retained the momentum this year as well.

Deposit collection grew 8.18 per cent year-on-year to Tk 36,142 crore in the nine months to September this year, while investments rose 10.5 per cent to Tk 34,139 crore.

SIBL registered a 74 per cent year-on-year growth in deposit accounts.

"We have recorded an increase in both deposits and investments this year. At the same time, our business through facilitating overseas trade increased," said Alam, who took the charge of SIBL in December last year.

"We think this year is going to be a good year for us."

In 2021, the bank recorded Tk 1.69 earnings per share, up 7.6 per cent year-on-year from Tk 1.57 a year earlier, according to its annual reports.

SIBL also brought down its classified investments to 4.89 per cent at the end of September from 5.3 per cent a year ago.

The bank has expanded its agent banking network.

"We have given priority to attracting remittances," said the CEO, adding that the bank registered a 71 per cent growth in the remittance business in January-September.

SIBL have signed agreements with 35 agencies abroad to enable NRBs and migrant workers to send money home. It has also inked contracts with international money transfer companies such as MoneyGram, Western Union, TML, Zoom Express, Express Money, RIA, and Placid.

It is providing additional services to NRBs and migrant workers who have Tk 500,000 and above balance in their SIBL accounts.

The second-generation bank aims to secure one of the top three spots when it comes to attracting remittances from its present fifth position among the shariah-based banks.

Alam urged NRBs and migrant workers to use formal channels to send remittances to avoid future hurdles.

"Those who are sending money through hundi or illegal channels will not be able to show their income as legally earned," he said.

The bank has formed a special task force to recover classified investments and recovered Tk 7 crore out of nearly Tk 650 crore written off.

"We are benefiting from the move," said Alam, who has nearly 30 years of banking experience. "We hope the recovery will accelerate by December this year."

During the interview, Alam, a graduate of the University of Dhaka, also talked about the availability of liquidity and the ongoing crisis in the foreign currency market stemming from the falling foreign currency reserves.

"Banks have enough liquidity. But in order to reduce pressure on foreign currencies, banks are focusing on facilitating the import of essential items."

SIBL has raised the margin on the opening of letters of credit for the purchase of luxury items from external sources.

"We have not stopped financing imports," said Alam, who expects the situation to improve next year.