IFIC Bank plans to build rural network
IFIC Bank, a first generation private commercial bank, plans to set up a subsidiary to deliver quality financial services at a low cost, especially for the rural people.
“Our bank mainly focuses on corporate banking or trade finances. We now want to build a rural network,” said Shah A Sarwar, managing director of the bank.
If the government gives the licence, the proposed company will work as an alternative delivery channel and SME centre in the rural area as part of its inclusive banking plan.
The bank also plans to launch mobile banking services next month, Sarwar said in an interview with The Daily Star recently.
“Our aim is to reach the rural areas,” Sarwar said. “But, it may not always be a 'brick and mortar' model or the physical presence of buildings and other structures.”
A bank has to have at least 400 branches to achieve sustainable growth, said Sarwar, who holds a master's in economics from Dhaka University and an MBA from Victoria University in Australia.
The bank plans to add at least 25 new branches next year to the existing 110. It also aims to create at least 10,000 agents in the rural areas over the next couple of years, he said.
The proposed subsidiary will also create employment opportunities for the people who have passed secondary and higher secondary school examinations as they are neglected in the job market, Sarwar said.
These people will get the opportunity to work as field supervisors and officers, he said.
Sarwar, who joined the bank in December last year, said the banking sector is now going through some challenges due to a volatile political situation and several banking scams.
“We must strengthen governance so that we can go on smoothly during the time of uncertainty.”
Over the last 30 years, Sarwar's career evolved around general management, client coverage, risk management, operations and IT management.
He held various senior management positions in multinational and private commercial banks. He was the managing director of Trust Bank Ltd, Premier Bank Ltd and Industrial Promotion & Development Company of Bangladesh Ltd.
Despite several challenges, IFIC did a good business in the third quarter this year, he said, adding that net profit of the bank more than doubled to Tk 123.66 crore in July-Sept than the previous quarter.
In terms of net profit, the bank stood seventh among all banks, he said.
The bank will also be able to meet the target of operating profit at around Tk 450 crore this year.
When asked whether the banking sector will see merger or acquisition due to the launch of some new banks, Sarwar said: “Merger or acquisition is theoretically possible, not practically.”
“You can cut cost mercilessly by slashing human resources. But in the Bangladesh context, it is almost impossible to cut human resources like the western countries do.”
Here one job means that the entire family depends on the income. "So, no chief executive will do so," Sarwar said.
IFIC Bank, a conventional private commercial bank, has also decided to become a full-fledged Islamic or Shariah-based bank.
Currently, the bank has around 2,500 employees and it will employ at least 250 people next year, Sarwar said.
International Finance Investment and Commerce Bank Ltd (IFIC Bank) was set up in 1976 as a joint venture between the government and sponsors in the private sector with the aim to work as a finance company within the country and set up joint venture banks/financial institutions aboard.
In 1983, when the government allowed banks in the private sector, IFIC was converted into a full fledged commercial bank.
The government holds a 32.75 percent stake in the bank, while directors and sponsors 11.31 percent, institutions 33.91 percent, foreign investors 0.28 percent and general public the rest, according to Dhaka Stock Exchange.