Dubai: A foreign bank has launched an investment scheme in the UAE that will double money within six years.
Bangladeshi lender Janata Bank, which has four branches serving more than 55,000 depositors in the UAE, recently launched the Janata Bank Double Benefit Scheme that is gaining popularity among the country's expatriate community.
The scheme allows a customer to invest a minimum of 50,000 taka (Dh2,400) as a deposit that offers 12.63 per cent annual compound interest. The scheme is limited to Bangladeshi nationals.
Janata Bank, which launched the scheme last October in Bangladesh, has extended it to its expatriate customers in the UAE.
"This is one of many new initiatives that we are introducing for our customers in the UAE and other parts of the world where we have a strong customer base," S.M. Aminur Rahman, Managing Director and Chief Executive Officer, told Gulf News.
To take advantage of this product, Bangladeshis must open an account with the bank and deposit the equivalent of 50,000 taka or multiples thereof. At the end of the sixth year, the amount will double.
Not for other nationals
"The other initiative, a monthly deposit scheme, is for limited income earners that offers 12 per cent interest.
"This will be very attractive to our expatriate community members as banks in the UAE do not offer attractive interest rates and there are hardly any strong savings and investment products of this stature," he said.
This monthly scheme starts as low as 500 taka (Dh24) per month. The five-year scheme, that stands at 30,000 taka (60 equal installments), offers a benefit of 10,600 taka as interest.
The scheme won't be offered to other nationals, he said.
"Simply because, these amounts will be invested by the bank in Bangladesh — as they are Bangladesh-specific investment products," Rahman said.
"We won't invest these amounts here because of the lower interest rates. These will be invested back in Bangladesh. So the schemes won't cover foreigners."
However, these savings-cum-investment schemes appear to be lucrative to expatriates due to the lack of attractive schemes available in the local market.
Rahman said his bank is planning to expand business in the UAE, having undertaken a number of initiatives, including new product development and adding more banking professionals to the current payroll. His colleagues will also aggressively promote these investment products to retail bank customers to maximise the bank's output.
"First, we are increasing the headcount across the UAE and elevating the status of branch managers and the chief executive officer to bring in more senior officers to the UAE," he said.
Marketing and sales
"We are planning to double the number of customers to more than 100,000 in the next few years."
Being a very community focused lender, Janata Bank — a nationalised commercial bank — did not focus on marketing and sales activities.
Although it is the third foreign bank to be licensed by the UAE Central Bank in 1976, it largely limited its role to safe-keeping depositors' cash and disbursing personal loans to customers on a limited scale. It thrived on the workers' accounts, salary transfers, remittances and small Bangladeshi business accounts, offering limited services. It doesn't even offer automated teller machine (ATM) services.
However, things will change in the coming months, Rahman said.
"We will start rolling out ATM services in the next few months as we have identified the supplier and the decision is in front of the board," he said.
Bracing for growth wave
After years of hyper-speed growth, GCC banks then had to pass the test of the economic crisis and now must prepare for yet another growth wave, research firm A.T. Kearney said in a report.
To leverage opportunities, A.T. Kearney experts suggest banks invest in retail banking infrastructure and capabilities, address untapped opportunities in wholesale banking and redefine priorities for external growth and international expansion.
"Efficiency improvement can yield significant savings, for example a structured approach to sales effectiveness can have a bottom line impact of 15 to 20 per cent," Dr. Alexander von Pock, Principal at A.T. Kearney, said.
