Liquidity crisis over, SIBL restores customer confidence
In an interview with The New Nation, Acting Managing Director of Social Islami Bank Limited (SIBL), Md Nazmus Saadat, spoke with Muhammad Ayub Ali about how the bank is managing its clients during the time of suffering from liquidity crisis.
How is SIBL managing its clients despite facing a fund crisis?
After 5 August, many clients rushed to withdraw their savings due to a loss of confidence in the bank.
It was nearly impossible for any bank to provide depositors with their money all at once, which led to a liquidity crisis. However, we managed the situation with financial support from the central bank and other stable banks.
Now, we have overcome the crisis and are ensuring that all clients receive their funds. No client leaves empty-handed when they come to withdraw money.
What challenges is SIBL currently facing?
Our primary challenge is maintaining liquidity support to sustain customer confidence. Retaining client trust is crucial-once lost, it is difficult to regain.
Therefore, we are taking all necessary measures to prevent any further loss of confidence. Additionally, we are prioritising loan recovery to ensure a steady cash flow.
How much progress has SIBL made in agent banking?
SIBL launched agent banking on 25 October 2015. Currently, we operate 374 outlets with deposits amounting to approximately Tk 860 crore across 34,000 accounts.
Our aim is to bring banking services to grassroots-level individuals who remain outside the formal banking system.
However, agent banking is not yet fully recognised in all sectors-for instance, if someone submits an agent banking account for visa processing, it is not accepted by the authorities.
What is the progress of school banking?
School banking introduces students under 18 to banking services and modern financial technologies.
We are keen to engage young individuals in banking from an early stage, helping them develop financial literacy and familiarity with banking systems.
What initiatives has SIBL taken to mitigate liquidity challenges?
To ease the liquidity crisis, we have established a task force in every branch to recover classified and overdue loans.
We are also focusing on non-funded businesses, particularly in export-import sectors, which require minimal direct financing.
There are claims that Islamic banks do not fully adhere to Islamic principles. How do you respond to this?
We have a Shariah Board and a Shariah Department – the board sets policies, while the department ensures their implementation.
Our Shariah monitoring team oversees all branches, and if any non-Islamic elements are identified in an investment, the board ensures that profits from such activities are not mixed with Shariah-compliant investments.