M. Matiul Islam, Chairman IIDFC
ICON OF BANKS & FINANCIAL INSTITUTES
IIDFC Chairman harks back the past glories of his career
He epitomises discerning ethos
At age of 86, he still attends the office regularly at 9.00 am sharp, a rare punctuality indeed.
Another rare juxtaposition of honestly and efficiency remain the quintessence in his chequered career of government service in 25 years, UN and World Bank service in 15 years and 21 years till now in the private sector.
M Matiul Islam, the founder chairman of IIDFC, a leading Financial Institution (FI) is such a towering name in country’s corporate world.
The octogenarian mission-critical is the country’s first finance secretary who later pioneered the establishment of Arab – Bangladesh Bank (now AB Bank), country’s first private sector bank, International Leasing and Financial Services Ltd. National Housing Finance and Credit Rating Agency of Bangladesh (CRAB), country’s second credit rating agency.
Talking to The Financial Express in an exclusive interview recently, Mr. Matiul Said ‘to serve public interest’ in his core ideal in his enduring professional pursuit.
“Honesty and non-partisanship are the core values of a professional (both government and private) to serve public interest and he or she must remain above the parochial interest.” Mr. Matiul said. “A corrupt professional cannot be an agent of good governance.” “ Each one of us is an agent of good governance and each one of us can make enormous contribution to good governance by remaining incorruptible and maintaining a pro-people approach in the discharge of our professional duties and responsibilities. This will not cost us or to the exchequer anything but would bring laurels both for us as well as for the government we serve,” Mr. Matiul Islam wafted.
“During my enduring career path, I have developed a knack for taking quick and bold decisions and shouldered the responsibilities….this discerning ethos propelled me to go a long way,” Mr. Matiul Islam added.
According to Ataul Karim, a former foreign secretary, Mr. Matiul Islam was an exceptional civil servant who believed in solving problems and eliminating bureaucratic red tape.
Reminiscing the memory of Mr. Tajuddin Ahmed, one of the top leaders of Bangladesh’s liberation war, Mr. Matiul said in the postliberation period, the financial sector was in shambles, banking sector was in total disarray ….no budget, no foreign exchange and an empty exchequer.
“I introduced ‘P’ form for to India as was the requirement for travel to other countries. This created uproar and made Tajuddin to comment that I was driving a wedge between two friendly countries of India and Bangladesh. The order had to be withdrawn, but only temporarily. On the other hand, Tajuddin was instrumental in including me in the prime Minister’s entourage for bilateral talks with Indira Gandhi in Calcutta and advised me to make sure that I remained present during the talks.”
“Very often Tajuddin faced dilemma between his responsibility as the planning Minister when he was advised by the members of Planning Commission, all of whom enjoyed the rank of Ministers, and his duties as a Finance Minister when he had to take into consideration the view of the Finance Ministry, especially when the two opinions were contradictory. One such occasion was when as the planning Minister he introduced a Cabinet Paper to break up EPIDC to which I did not subscribe. Tajuddin graciously permitted me to express my dissent in the Cabinet and did not contradict me. When I opposed the proposal to create 10 new divisions in the restructured Planning Commission on the ground that this would create parallel policy making organs in the Government, he did not overturn my views but suggested a compromise between the two extreme positions.”
“Mr. Tajuddin was a strict disciplinarian and dealt with labour union problems with strong hands.”
“Many a time, I accompanied him to Bangladesh Bank to confront the sometime unruly labour unions but he never gave in to unreasonable and unjust demands. When MD of a NCB committed the indiscretion of approving a new pay scale for some of his staff members, under pressure from his union, in spite of specific instruction to the contrary from the Finance Ministry, Mr. Tajddin accepted my recommendation to have the MD removed the same day under PO-9 and sent a strong signal to the banking sector that Government would not yield to pressure,” Mr. Matiul memorized.
LIFETIME ACHIVEMENT AWARD
Coming full circle
M Matiul Islam is an example of life lived to the fullest
Friends and colleagues call him a “doyen of banking”. M Matiul Islam is an endearing name among his peers. He made a clear mark in the nation's financial sector and built a towering profile that dwarfs many others around him. His career that spans six decades stands out with high points of achievement. It started with the Civil Service of Pakistan in 1952. Matiul Islam, now 81, is still a taskmaster the chairman of IIDFC, a leading non-bank financial institution.
In 1972 when the shadows of the Liberation War were lingering on the economy, Matiul Islam was handpicked as the nation's first finance secretary by none other than Bangabandhu Sheikh Mujibur Rahman. He had been tasked with building a banking system, the first step to inject an impetus into the war-ravaged economy. Guided by a new government's mandate for nationalisation, he merged 12 banks into six. When many said the new country, Bangladesh that is, would not last long, he pressed on with his mission to build a strong banking system. A personal vision statement “Bangladesh will survive, if banks survive” carried him forward. Today, he does not shy away from admitting that he exerted a total control over the six banks, without appointing a chairman to any of them. Those state banks were free from political influence and performed very well, he recalls.
In the world of private banks as well, Matiul Islam is a pioneer. The first private bank, Arab Bangladesh Bank, now AB Bank, was his creation.
There was a long pause 12 years in his career in the financial sector at home, but he was active abroad, serving the United Nations, World Bank and other organisations from 1981 to 1993. When he came back home, he picked up his earlier thread in his life by setting up International Leasing and Financial Services Ltd, followed by National Housing Finance.
Matiul Islam's latest creation is Industrial and Infrastructure Development Finance Company, a non-bank financial institution. Its shareholders are banks, not greedy individuals, as he likes to put it.
“Earlier experiences taught me that 'don't give shares to individuals; give them to corporations'. So I took banks as shareholders for IIDFC.”
Dr Farashuddin, who was governor of Bangladesh Bank, had insisted that there should be some state banks as shareholders of IIDFC and Matiul Islam did so.
The IIDFC boss advises government officials to be careful about what they should and should not say because people watch them every moment. Honesty and a sense of duty should be the guiding principles for them, he said.
For him, the third principle, perhaps the most valuable, is his willingness to accept any loss or failure gracefully. He participated in bids to privatise Rupali Bank in 2005 by forming a domestic consortium of banks, but lost out to Saudi Prince Bandar Bin Mohammad Bin Abdulrahman Al-Saud, one of the bidders, because his offer fell far short. He congratulated the Saudi Prince's representative after the prince won the bid with a $330 million offer. “I accepted the loss gracefully,” he said. “I think I am a gracious loser.”
Matiul Islam still remembers the most shocking incident in his life: he was forced out of the Pakistan Civil Service in December 1969. As a senior government official, he went to Karachi to plead for relaxing the import policy which was highly controlled at the time. “You needed permission or licence from the government for anything you wanted to import. It was not like what we see today. Now, our import policy is free.”
“I was there in Karachi to plead for what we needed for East Pakistan. I was there to raise our demands. But at the meeting, I was told that 'Mr Islam, your service is no longer required'.”
“It was a big shock not only to me, but to the whole family. I faced it with courage. I always thought it was a temporary setback and I knew I would make a comeback.”
Matiul Islam, never willing to give up the fight, was determined to make a living in Karachi, away from home. And there is always a silver lining in the clouds. He was offered a job at Pakistan National Oil (now Pakistan State Oil) in Karachi and transferred to Dhaka as the country head of the company three months later.
But things changed after independence. Islam lost his job again and was about to begin a new journey to try his luck elsewhere -- again away from home -- in London.
As he was preparing to leave home for good, he received a call from a former colleague with a piece of news that he would have to take a top job on the Awami League government. Matiul Islam still remembers the date: January 11, 1972. Six days later, he took the reins as the country's first finance secretary, with so much power and authority.
On a night of triumph for business, M Matiul Islam, Chairman of Industrial and Infrastructure Development Finance Company (IIDFC), was crowned with Lifetime Achievement Award for a career that spanned six decades. He is best recognised as a doyen of banking for building a financial system to jive up the war-ravaged economy soon after the Liberation war. Matiul Islam, as the country's first finance secretary, nationalised six banks and set up Arab Bangladesh Bank, a first step in the private sector.
Commerce Minister Faruk Khan, who graced awards ceremony as the chief guest. The minister,who gave away the awards to the winners, said it would not have been possible without the hard work of the entrepreneurs and assured the business community that all obstacles to economic development would be removed.
The ceremony was attended by 300 businesspeople, diplomats, bureaucrats, politicians, entrepreneurs, celebrities, civil society members and academics. The award aims to acknowledge the contributions of companies and individuals in business, create an environment for entreneurship and improve the standards of corporate management.
M. Matiul Islam said his philosophy is to never look back. "I alwase look forward. That is my guiding principle. Life is nothing without productivity."
Environmentalists, ministers, civil society members and business leaders gathered at Bangabandhu International Conference Centre in the capital to attend the HSBC-The Daily Star Climate Awards 2010, the first of its kind in the country.
The awards were designed in four categories: climate change adaptation, mitigation, research and knowledge management, and green business entrepreneurship.
One individual and three institutions were awarded for their distinguished efforts in combating the global threat.
Industrial and Infrastructure Development Finance Company (IIDFC) Ltd won the award in climate change mitigation category for financing the country's first green brick project. It helped introduce a technology that uses 50 percent less energy in making bricks. IIDFC Chairman M Matiul Islam received the award on behalf of the company.
The Daily Star and HSBC jointly organized the award ceremony with the objective to encourage individuals and institutions work to take on the climate-change challenge
Agriculture Minister Matia Chowdhury, who attended the function as the chief guest, said countries like Bangladesh bear the brunt when developed countries do most of the emission. She said Bangladesh should start dealing with the challenges of the global climate change using its own capabilities.
The award-winners thanked HSBC and The Daily Star for taking up such an initiative, which according to them would encourage many others to get involved in activities that help save the environment.
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