Joda: Bank Customers Yearning for Quality Services


The Co-founder and Chief Operating Officer, Taj Bank Limited, Mr. Hameed Joda, in this interview says his recently licensed financial institution is determined the change the face of banking in the country through high quality customer service and the deployment of technology. Obinna Chima brings the excerpt:

What is the state of non-interest banking in the world today and what informed your decision to float a non-interest bank?

The non-interest banking industry is still evolving and currently witnessing rapid change globally. It is one of the fastest growing sectors of the financial services industry. The industry has global assets of more than $2.4 trillion and a forecast of 7.7 per cent compounded growth per year to reach $3.8 trillion by 2023. The industry is well developed in Malaysia where non-interest (Islamic) banking assets amount to almost 30 per cent of their entire banking industry which has total assets amounting to more than $500 billion. This gives you an idea of the size of the non-interest banking industry in that country.

Over the last couple of years, the city of London has established itself as a global hub for Islamic finance while Luxembourg is also steadily climbing up the ladder. We are also seeing growth among the Swiss Banks. Global banks including but not limited to HSBC, Standard Chartered, J.P. Morgan etc have all set up Islamic Banks. If you consider all these factors you will agree with me that the non-interest banking sector is witnessing a global revolution. If you look at recent developments in the non-interest banking space in Nigeria, ranging from the successful Sukuk issuances by the federal government to the success recorded by current players in the industry coupled with the yearnings of the people for a better banking alternative you will agree with me that the non-interest banking space has tremendous potential hence my decision and that of my co-founder, Mr. Sherif Idi, to venture into this sector.

So tell us about TAJBank and what should customers be expecting from your financial institution?

TAJBank is Nigeria’s second non-interest Bank. The Central Bank of Nigeria has granted us regional license to operate in the North East and North West regions of Nigeria and a liaison office in Lagos. We commenced business in our Abuja and Kano branches on the 2nd of December, 2019. Before opening for business, we conducted a thorough research on the Nigerian banking industry and our findings revealed a huge gap in customers’ yearnings for quality service delivery and what they are currently getting. Therefore, our key market entry strategy is high quality customer service. This will distinguish us in the industry. Secondly, we have made significant investments in information technology all in an effort to serve our customers in the best way possible. There are several information technology-related innovations we will be bringing to the market all in an effort to redefine service delivery.

How prepared are you to face competition and what is your unique selling point?

We are very prepared to face competition because we believe we are bringing value to the banking public. Our non-interest banking model is unique in the sense that we operate as a zero interest bank. This proposition is more business friendly to individuals, corporates and SME’s because they can plan better with more certainty if we finance them. We will never change financing rates in the middle of the game as this is against the tenets of ethical banking. We are guided by ethical principles in all our dealings and all parties must be treated with fairness and equity. With us there are no hidden charges or strange surprises. Our wide array of products and the advantage of also transmuting to a trading entity under our sales contracts will do well in the SME space. Likewise, our lease and partnership based products are well suited for a developing economy like Nigeria. In the final analysis, TAJBank will distinguish itself in the area of service delivery.

Is TAJBank a regional or national bank?

TAJBank is a regional bank authorised by the CBN to operate in the north-east and north-western regions of Nigeria with a liaison office in Lagos. Our headoffice is in Abuja and we have another branch in Kano.

How did the name TAJ come about?
TAJ means crown in Arabic and Persian languages so our English name is Crown Bank.

Who are those that make up your board?
Our board is well diversified with eminent and well experienced Nigerians who have distinguished themselves in various fields of human endeavor. The Board is led by Alhaji Tanko Isiaku Gwamna, a seasoned technocrat and businessman.

Corporate governance is a major issue in banking globally, what structures have you put in place in this regard?

As an ethical bank, corporate governance matters to us. First, apart from regulatory guidelines on corporate governance which we are bound to follow, we have an independent body of Advisory Committee of Experts who are well versed in Islamic Commercial jurisprudence and principles. The body ensures that all transactions in the bank are carried out in accordance with Islamic commercial tenets. Where unethical income is earned, the bank must reverse such income to charity.

This causes reputational damage which the bank must try to avoid. The body also ensures that the bank does not finance ineligible transactions like arms and ammunition, pornographic materials, etc. In a nutshell, they are gate keepers who ensure that principles of corporate governance are carried out to the letter. There is also an independent internal unit in the bank that ensures day to day checks of violations in corporate governance and they report to the Advisory Committee of Experts and not the bank’s board or management this gives them enough room to operate without let or hindrance. Under this structure there is no incentive to violate corporate governance and it will remain our guiding principle.

Digital technology plays a major role in the banking industry today, do you have plans to leverage on digital solutions?

Digital technology has taken over the banking industry to the extent that today banking is almost entirely an information technology business. The banks that will survive tomorrow are the ones that are able to keep up with latest trends in information technology. At TAJBank we fully understand this situation and we have made significant investments in information technology in order to give our customers exceptional service and effectively reach out to them in areas where we do not have physical branches.

As I speak our IT platforms including but not limited to mobile banking, internet banking, wallet, USSD, etc, are all up and running. We want customers to do a lot more through their handheld devices and we are making significant investments to bring new IT related innovations that would make life easier for customers.