Depositors’ Confidence, Good Governance Our Top Priorities: Islami Bank MD

Md Altaf Hossain is the Acting Managing Director of Islami Bank Bangladesh PLC. In an exclusive interview with The Daily Observer at the bank’s head office in Dilkusha in the capital, he spoke about the bank’s approach to classified investments, recovery strategies, new investment approvals, the impact of gas and electricity shortages on businesses, industrial financing, digital banking and remittance services. Drawing on more than two decades of experience in investment, foreign trade and general banking, he also outlined the bank’s plans to strengthen governance, asset quality, capital strength and public confidence while making its extensive service network more efficient and customer-friendly. The interview was taken by Jibon Islam, Senior Correspondent of The Daily Observer. Following  is the excerpt of the interview:

As Bangladesh’s banking sector undergoes a period of transformation and restructuring, maintaining depositors’ confidence, ensuring good governance and strengthening its financial foundation are among the top priorities of Islami Bank Bangladesh PLC, said Md Altaf Hossain, Acting Managing Director of the bank.

He emphasised that transparency, accountability and effective risk management must remain at the forefront of every decision-making process. “Islami Bank is conducting its operations with these principles at the forefront,” he said.

He said the bank is carrying out thorough due diligence, realistic cash-flow assessments and evaluations of customers’ repayment capacity before approving new investments. At the same time, initiatives have been taken to ensure effective recovery from existing troubled investments.

Regular post-disbursement monitoring has also been strengthened to ensure that newly approved investments do not become problematic in the future, he added. “Our objective is not merely to increase the size of the business. Rather, we want to transform Islami Bank into a more trusted, well-governed, efficient and sustainable institution,” Md Altaf Hossain said.

He said the bank is therefore giving equal importance to proper due diligence, effective risk assessment, investment recovery and a strong compliance culture.

The Acting Managing Director said Islami Bank uses the term “investment” instead of the conventional banking term “loan”. Information on classified investments is presented in the bank’s regularly published financial statements and reports submitted to the regulatory authorities in accordance with applicable regulations.

“More important than a specific amount of classified investment is our ability to increase effective recovery from such investments and prevent new investments from becoming classified,” he said.
He said the bank’s recovery strategy is data-driven and focused on cash recovery. For businesses that are realistically viable and operational, the bank is taking measures under applicable Bangladesh Bank policies after assessing their actual cash flows, business cycles and repayment capacity. On the other hand, legal action is being taken in cases involving wilful default, non-cooperation or the diversion of assets. Initiatives are also being taken to recover dues from collateral, he said.

According to him, measurable recovery targets have been set for each branch, zone and recovery unit at the head office. Recovery activities are being closely monitored through regular reviews and supervision by senior management.

Responding to a question about new investments, Md Altaf Hossain said preventing newly approved investments from turning into classified investments is one of the bank’s most important preventive strategies.

He said the bank is not relying solely on collateral while approving investments. Customers’ actual cash flows, repayment capacity, Credit Information Bureau (CIB) status, previous business performance, total group exposure, project feasibility and the future prospects of the relevant sector are being assessed carefully.

Even after approval, the bank regularly monitors whether investment funds are being used for their intended purposes, transaction flows through accounts, inventory and receivables, repayment behaviour and potential early-warning indicators, he said.

Regarding large investments, he said the bank is also focusing on concentration risk, independent reviews and, where necessary, stress testing. “These activities are being conducted in line with Bangladesh Bank’s investment classification and provisioning framework as well as the bank’s own risk-management policies,” he said.

He said applications for new investments are part of a continuous process and their volume changes every day. Such information is part of the bank’s internal Management Information System (MIS).

“Therefore, publishing the number of applications on any particular day may not reflect the overall picture,” he said. Information on approved and disbursed investments is disclosed in the bank’s financial reports in accordance with applicable rules, he added.

Responding to a question about gas and electricity, Md Altaf Hossain said uncertainty over gas and electricity supplies could put pressure on production, supply chains and cash flows, particularly in energy-intensive industries. However, a customer is not considered a defaulter merely because of gas or electricity shortages, he said.

Investment classification is determined on the basis of Bangladesh Bank’s policies and the customer’s actual repayment performance, he added. Customers and sectors that may be affected by gas and electricity shortages are being placed under enhanced early-warning monitoring, he said.

“Even when a company faces a temporary external shock, if its core business remains viable, we reassess its cash flow, production capacity, order position, working-capital requirements, alternative energy arrangements and repayment plan,” he said. Where applicable, policy support announced by Bangladesh Bank may also be considered, he added.

However, the bank does not disclose any separate cause-based figure in its publicly available financial statements indicating how many customers could newly become classified due specifically to gas and electricity shortages, he said.

Responding to a question about the industrial sector, Md Altaf Hossain said Islami Bank has long been making large-scale corporate and project investments in various sectors related to industrialisation, production, trade, employment and infrastructure. According to the bank’s Basel III disclosure as of December 31, 2025, its total investment in the industrial sector stood at Tk114,581.84 crore.

Agriculture-based industries, textiles, steel and engineering, ready-made garments, power and healthcare are among the major sectors receiving investment from the bank, he said. “Considering customer confidentiality and our information-disclosure policy, we believe sector-wise information is generally more appropriate than disclosing the names of individual projects,” he said.

Md Altaf Hossain said Islami Bank aims to further strengthen its position as one of the country’s most trusted and effective banks. “Being number one does not simply mean having the largest balance sheet or the highest volume of business,” he said.

The bank also wants to set a benchmark in good governance, asset quality, profitability, capital strength, customer service, digital capability, Shariah compliance and public confidence, he added. According to the bank’s published information, its customer base reached 30 million at the end of 2025.

The bank is currently providing services through 400 branches, 271 sub-branches, 2,788 agent banking outlets and 3,040 ATMs/CRMs across the country. “Now our priority is to make this extensive network more efficient, standardised and customer-friendly,” Md Altaf Hossain said.

At the same time, the bank is working in an integrated manner on strengthening governance and compliance culture, recovering classified investments, ensuring sustainable deposit growth, maintaining capital and provisioning capacity, expanding technology-driven banking, improving customer experience, increasing remittance and trade services, promoting Bangla QR and developing human resources, he said.

Regarding remittances, Md Altaf Hossain said Islami Bank is one of the leading banks in Bangladesh in collecting inward remittances and has maintained the top position for 18 consecutive years. In 2025, nearly Tk76,000 crore in remittances were channelled through the bank, he said.

He added that Islami Bank secured first place in the Remittance Award in 2026, as well as for the fiscal years 2024 and 2025, for collecting the highest amount of remittances. “We want to make sending remittances through formal channels faster, easier and more convenient,” he said.

To this end, the bank is focusing on making its network of foreign exchange houses and money-transfer partners more effective, ensuring faster crediting of remittances to bank accounts and digital wallets, improving beneficiary services and expanding remittance-focused deposit and investment products.