No changes in sharia banking practices

The recent reshuffle in the board of Islami Bank will not lead to any change in its core banking practices based on sharia law, Arastoo Khan, the new chairman of the bank, said yesterday.

The bank's institutional preamble, which states its vision, mission and objective, “will never be prejudiced under any circumstances”, he said at a press briefing.

“The preamble will not be violated. We would like to assure the people of the country and customers of the bank that the basic sharia law has to be strictly followed,” said Arastoo.

The briefing was organised at the bank's headquarters in Motijheel at short notice to clarify the board's position and dispel confusion among people, employees, customers and general shareholders.

At the bank's board meeting on Thursday, changes were made to the posts of the bank's chairman, managing director, heads of various committees and chief of the Islami Bank Foundation.

Arastoo Khan, a former bureaucrat and representative of Armada Spinning Mills Limited that owns 2 percent stakes in Islami Bank, was elected chairman of the bank.

The latest development didn't have any negative impact on the bank's share price. Each share of the bank, listed on the stockmarket in 1985, traded between Tk 30 and Tk 33 before closing at Tk 30.6 up by Tk 0.5 on Dhaka Stock Exchange yesterday, the first day of trading after the reshuffle.

On the reshuffle in the bank, he said, this is only a change in the management, not in the fundamental principles. “Changes can happen any time -- in the state, in the government and in the cabinet.”

He said the bank will strictly follow the sharia law in its core banking operations.

“Fundamental principles will never change,” he said.

The corporate social responsibility or CSR activities will also continue. The management and the board want to make sure that the money for the CSR or any other fund falls into the right hands, Arastoo said.

“No inappropriate or improper use of money for the CSR will be tolerated… we will not allow any inappropriate use of CSR money.”

The size and profitability rate of Islami Bank reflect people's trust in the bank, he said, citing the bank's last year's profit of Tk 2,003 crore.

The new board has already assured its employees that their jobs are secured. But it would take the matter of “any inappropriate diversion of resources very seriously”, he asserted.

The new chairman said the bank will now follow “merit-based recruitment”.

The bank is open to all. If people of other religions are willing to work at the bank, they can sit for recruitment tests, he said.

“We will hire them if they are meritorious and qualified.”

Replying to a query, Arastoo said it's true that many don't know about Armada Spinning Mills Limited.

“It's a spinning mill with 36,000 spindles and it will continue to expand its production capacity,” he said.

Asked about the company's financiers, Arastoo said he would share the details later.

Syed Ahsanul Alam, vice chairman of the bank, said the reshuffle in the bank board was aimed at freeing the first generation bank from the perception that it practised “political Islam”.

He said the previous board had problems relating to “set up” and “mindset”. “Political Islam” was practised within the organisation and there was an attempt to cash in on Islam.

“The question is not whether the previous boards were good or bad… they were good, but they had to face criticism… they were not respected. That's why the changes were brought,” he said at the briefing.

The bank's new board is comprised of 16 members. Seven of them come from some little-known companies that own more than 12 percent stakes in the bank.

The companies include Platinum Endeavours Limited, Paradise International Limited, BLU International Limited, ABC Ventures Limited, Grand Business Limited, and Excel Dyeing and Printing Limited.

Asked whether S Alam Group has ties with these new companies, Ahsanul said the Group has no stakes in the firms.