Deposit Products and Services of Islami Bank Bangladesh Limited

Executive Summary

This report is prepared as per requirement of internship phase of BBA program the report will give a clear understanding about the “Effectiveness of General Banking of IBBL”

The first part is about the Islamic Banking For an expanding economy, a developed and efficient Banking system is indispensable The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983 This Bank is the first of its kind in Southeast Asia It is committed to conduct all banking and investment actives on the basis of interest-free profit – loss sharing system.

The second part is about “General banking Operations”, which is the core for any banking operations It deals with most of the customers The bank offers all sorts of services for the customers Different types of accounts are available deposit products, provides a wide range remittance modes such DD, TT, PO etc The cash section of any bank also plays very significant role in general banking department because, it deals with most liquid assets All cash receipts and payments are made through this department

The third part of the report is about investment under Islamic Shariah IBBL invests by three modes They are Bai-Mode, Leasing – Mode, & share –Mode IBBL commonly use Bai- Mode Some time they use Leasing – Mode, but most of time they are not willing to invest in share mode Another portion of this part is about various special schemes of IBBL such as household Durable scheme, Real Estate investment program etc In this part Rural Development Scheme is also included The performance of IBBL in investment is also mentioned There are two types of investment, Sector – wise investment & Mode – wise investment

The forth part of the report is about the Foreign Exchange Operations It is an International department of a Bank It facilitates international trade through it various mode of services It bridge between importers & Exporters

The last segment deals with recommendations Especially it must focus sharply on improving customer service It must also emphasize on developing infrastructural facilities and incorporating technology throughout the branches for fast and efficient service for delightful customer service IBBL can diffuse its scope of investment through focusing Shariah concept regarding investment among the bank officers, employers and the clients by rigorous training program, workshop, seminars and clients- get together IBBL should initiate different investment modes according to divers needs of clients by conducting huge research & study etc It must also put emphasis on advertisement, without which market share would not increase.

Origin of the report

Since practical orientation is an integral part of the MBA degree. As  I am an internee of the organization, I get chance know many thing about General Banking, Investment & Foreign Exchange, University of IIUC , Dhaka Campus to  Islamic Bank Bangladesh Limited. So that I can share the real  life experience and activity of the organization.

This report has been originated as course requirement of the MBA program. I hope that this report will give a clear idea about the activities and role of the Deposit Product & Services of IBBL, and the present condition, and future of this services.

Objective of the report

The main objective of the study is to get a definite idea about how A/C opening division operates it services and what function it does; I.e. Mudaraba Savings Accounts, Mudaraba Hajj Deposit Scheme, Mudaraba Current Account blab la. This Deposit Product & Services are under in General Banking Activity. A Study on IBBL very lengthy area, the specific objectives are as follows:

      To know the History or Background  of IBBL

      To know the overall activities of the Deposit Product & their Services.

      To know the to Financial Analysis of IBBL.

      To know the Investment Modes.

      To know the Rural Development Scheme.

      To know the ATM Services.

      To know the Special Services.

      To know the Foreign Exchange Business.

      To know the Achievement of IBBL

Methodology of the study

In order to make the report more meaningful and presentable, two sources of data and information have been used widely.

Both primary and secondary data sources are used to generate the report.

Primary source:

• Face to Face discussion with the Branch Manager & Second Officer.
• Face to face conversation with employees and staffs.
• Practical work experience.
• Face to face conversation with clients.

Secondary sources:

• Annual report of IBBL
• Desk report of General Banking, Investment & Foreign exchange Department.
• Various manual on foreign mechanism.
• Prospectus, Different journals of IBBL
• Relevant books.
• IBTRA training material
• IBTRA Library.
• Different Islamic Banking Books
• Website of the Islami Bank Bangladesh Limited.

The major portion of the data source used for this report is a secondary one.

Limitation of the report

To make a report various aspects and experiences are needed. But have faced some barriers for making a complete and perfect report. These barriers or limitations, which hinder my work, are as follows:

      Difficulty of accessing data of its internal operations.

      Non-availability of some preceding and latest data.

      Some information was withheld to retain the confidentiality of the organization.

      Two month is not enough to make a report properly with sufficient data and information. Therefore it was very much difficult to carry out the whole analysis.

FINDINGS & ANALYSIS THERE OF EXPLANATION / EVALUATION

1^st Finding

Historical Background & Development

The introduction of interest-free and equity-based financing by the Islamic banking system is based on the principles of Islamic economics. The aim of Islamic economics, as observed by Molla et.al. (1988), is not only the elimination of interest based transactions and the introduction of the zakah (contribution to poor) system but also the establishment of just and balanced social order free from all kinds of exploitation. The Islamic banking system is highlighted in the World Development report (1989, Box 6.3), as under; “ Islamic banks offer savers risky open-ended mutual fund certificates instead of fixed-interest deposits. (This is not unlike cooperative banks and mutual in the west, where deposits earn variable interest and double as equity.) Difficulties arise on the lending side. Arrangements to share profits and losses lead to considerable problems of monitoring and control, especially in lending to small business”.

Ahmed (1994), argues that elimination of interest does not mean zero-return on capital. Rather, Islam forbids a fixed predetermined return for a certain factor of production i.e. one party having assured return and the whole risk of an entrepreneurship to be shared by others. The author also observed that it is the capital entrepreneurship that shares both the real contribution and the real profitability. The Islamic bank follows the principle of equity based investment.

The Islamic banking system also proposes that resources can be contracted on the basis of venture

capital and risk sharing deals. The idea of equity-based investment banking is not new to the financial market. If we look into history it may be observed that capital, as loan capital as well as venture capital played a great role in promoting industrial and economic development of various countries of the world. For example, during the 19th and 20th centuries investment banks played a great role in French tradition while in British model of banking equity based investment was limited. Similarly in Germany equity-based investment was being practiced by commercial banks during that period. Even the banking crisis in the western world during the great depression in the 30’s or the 80’s proposed two-tire banking i.e. hundred percent deposit banking and the equity-based investment banking.

In the modern financial market an alternate arrangement for participation of capital and entrepreneurship started with the advent of Islamic Banking in the 70’s. In a number of studies such as IMF, World Bank and IFC, the Islamic bank activities were discussed in detail. Highlighting Islamic bank’s principle Khan (1986, p. 19), in the IMF staff Paper, observed as;

“Indeed it is really apparent that the Islamic model of banking based on the principle of equity participation bears a striking resemblance to proposals made in the literature on the reform of banking system in many countries. The Islamic System may well prove to be better suited to adjusting to shocks that result in banking crises and disruption on the payment mechanism of the country. In an equity-based system that exclude predetermined interest rate and does not guarantee the nominal value of deposits, shock to asset position are immediately absorbed by changes in the values of the share deposits held by the public in the banks. Therefore, the real value of assets and liabilities of banks in such a system will be equal at all points in time. In the more traditional banking system since the nominal

value of deposits is fixed, such shocks can cause a diversion between real assets and liabilities. It is not clear if this would be correct and how long the process would take.”

A study by OECD of the European countries, Paris, (1983) reveals the fact that interest-free banking is a novel form of finance and they are not only trying to give interest another name but that legal instruments within the framework of Shari’ah exist which permit profitability on a different, albeit Qoranically acceptable basis. Islamic banks belong to the class of equity-participation bank. In this regard Ahmad (1994, P. 190) in his study quoted the idea of Alba’ch as;

“They supply equity in the form of venture capital to investors whose share is their ingenuity and their labor. Secondly, they supply equity in the form of equity capital participants in the type of project, which in general has majority shareholders. They may be ideally suited to meet the need for equity capital in developing countries where the business risk is particularly high as well as in the industrialized countries where the development of new processes and new projects involves high risk and requires large amount of venture capital”

Scharf (1983, P. 94-95), in his study entitled ‘Arab and Islamic Bank’ conducted by Development center, Organization of Economic Cooperation and Development (OECD), highlighted the Islamic banking principles and prospect as follows;

‘Islamic banking is trying to develop the relationship between finance on one hand and industry and commerce on the other. This new relationship is the basis of the Islamic economic system being set up. Though Islamic principles have yet to be put to the test in the competitive of international finance, the two system are similar in that they both strive for closer ties between financial intermediation and economic asset creation. Islamic banks could make a useful contribution to economic growth and development particularly in a situation of recession, stagflation and low-growth level because the core of their operation is oriented towards productive investment All countries both in the North and in the South, need more venture capital. Loan capital is available, particularly from industrialized countries but at high interest rates. However, even from expansion and innovation. This has acted as a brake on productivity and economic growth in the North. Thus practical and immediate cooperation possibility exists between Islamic banks and enterprises all over the world. The intermediation process remains to be fully developed’.

About the possibility of introducing an interest-free financing system through Islamic banking principle Scharf (1983) also argues that the establishment Islamic Financial System based on the principle of Shari’ah is not only feasible but also profitable.

Western countries today realize the truth that interest is an unbearable burden for the developing countries. Due to that, as observed by Ahmad (1994, p. 188), ‘Canada has already waived of all the interest. Australia has made a similar move. President Mitterrand of France has officially suggested in the Group-7 meeting that at least 30-35 percent of the present interest element of the debt should be waived off’.

In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah. In January 1981, the President while addressing the 3^rd Islamic Summit Conference held at Macca and Taif suggested. “The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce”.

This statement of Late President indicated favorable attitude of the Government of the People’s Republic of Bangladesh towards establishing Islamic banks and financial institutions in the country. Earlier in November 1982,  Bangladesh Bank, the country’s Central Bank, sent a representative to study the working of several Islamic Bank abroad.

In November 1982, a delegation of IDB visited Bangladesh and showed keen interest to participate in establishing a joint venture Islamic Bank in the private sector. They found a lot of work had already been done and Islamic banking was in a ready form for immediate introduction. Two professional bodies Islamic Economics Research Bureau ( IERB) and Bangladesh Islamic Banker’s Association (BIBA) mode significant contributions towards introduction of Islamic Bank in the country.

They came forward to provide training on Islami Banking to top bankers and economists to fill up the vacuum of leadership for the future Islamic banks in Bangladesh. They also help seminars, symposia, and workshops on Islamic economics and banking throughout the country to mobilize public opinion in favor of Islamic Banking.

Their professional activities were reinforced by a number of Muslim entrepreneurs working under the aegis to the then Muslim Businessmen society ( now reorganized as industrialist & Businessmen Association ). The body concentrated mainly in mobilizing equity  capital for the emerging Islamic Bank.

At last, the long drawn struggle to establish an Islamic bank in Bangladesh becomes a reality. Islamic Bank Bangladesh  Limited was established in March 1983. In which 19 Bangladesh nationals, 4 Bangladeshi institutions, and  11 banks, financial institutions and government bodies of the Middle East and Europe Including IDB and two eminent personalities of the kingdom of Saudi Arabia Joined hands to make the dream a reality.

Mission

To establish Islamic Banking through the introduction of a welfare oriented banking system and also ensure equity  and justice in the field of all economic activities,  achieve balanced growth and equitable development through diversified investment operations particularly in the priority sectors and less development areas of the country and to encourage socio-economic enlistment and financial services to the low income community particularly in the rural areas.

Vision

IBBL’s vision is to always strive to achieve superior financial performance, be considered a leading Islamic Bank be by reputation and performance.

      The bank’s goal is to establish and maintain the modern banking techniques, to ensure the soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professionals, working for the benefit of people, based upon accountability, transparency and integrity in order to ensure the stability of financial systems.

      The bank will try to encourage  savings in the form of direct investment.

      The bank will also try to encourage Investment particularly in projects which are more likely to lead to higher employment

2^nd Finding

Achievement of IBBL

National and international ratings of IBBL

IBBL’s past performances have been evaluated by Bangladesh Bank, several credit rating agencies home  & abroad and by the local press.

International Press

“In the midst of a difficult Banking system known to be plagued by high non-performing loans (NPLs), one could easily conclude that it would be difficult to find a bank that is different from norm. However, IBBL provides a refreshing change and is, thus, a pleasant surprise. Although it does not command the market share as the 4 public sector banks, IBBL, which claims to have little interference in lending from the government, has nonetheless, managed to find a niche market of its own-says the ‘BANK ATCH’ a New York based international Credit Rating Agency in its January 30, 1998 issue. “As a market leader offering banking services based on the Islamic rule of Shariah, IBBL’s profitability trend has been quite impressive. The Bank’s ability to keep its return on asset (ROA) well above the industry’s average, reflected its resilience to possible shocks in the banking system. Concerns over massive NPLs and under provisioning are common amongst local banks.  But this seems well resolved in IBBL. IBBL’s good performance and solid capital base have indeed provided refreshing change found within a banking system saddled and held back by huge NPLs” the above agency continued to comment in the same issue.

National Press 

“It is one of a few local banks according to CAMEL (Capital, Assets, Management, Earnings & Liquidity) rating made by the Bangladesh Bank. It holds the highest amount of liquidity among all banks and its ability to keep return on assets at 1.07 percent is well above the banking sector’s average of 0.33 percent”- The Financial Express, Dhaka commented in its issue of May 28,1998.

“The Holiday” in its 29th August, 1997 issue carried out a report under the heading “Setting a precedence of sound banking” and commented “While the country’s banking system is burdened with bad debt portfolios and also suffers from a liquidity shortage, the Islami Bank Bangladesh Ltd. (IBBL) has created a unique precedence by improving its reserve and deposit positions substantially, making handsome profits, and offering attractive dividends to its share holders and depositors.”

 IBBL’s World rating

As per Bankers’ Almanac (January 2001 edition) published by the Reed Business Information, Windsor Court, England, IBBL’s world Rank is 1771 among 3000 banks selected by them. This position was 1902 among 4500 selected banks as on January 1999 edition.

IBBL’s country Rank is 5 among 39 banks as per ratings made by the above Almanac on the basis of IBBL’s Financial Statements of the year 2001.

Award and Prizes: International & National Perspective

IBBL was awarded for several times by international & national organisations. The Global Finance, a reputed London based quarterly magazine, awarded IBBL as the best bank of the country for the year 1999 and 2000.

IBBL has got the 2^nd prize of National Export Fare for its pavilion of Service Organisation in 1985.

Membership of Different Organization / Chamber
Local:

1. Bangladesh Institution of Bank Management (BIBM)
2. The Institution of Bankers Bangladesh (IBB)
3. Bangladesh Association of Banks (BAB)
4. Bangladesh Foreign Exchange Dealers’ Association (BAFEDA)
5. Central Shariah Board for Islamic Banks of Bangladesh
6. International Chamber of Commerce- Bangladesh

 Foreign:

1. International Association of Islamic Banks (IAIB), Jeddah, K.S.A.
2. Accounting and Auditing Organizations for Islamic Financial Institutions (AAOIFI), Manama, Bahrain.
3. General Council of Islamic Banks & Financial Institutions (GCIBFI), Manama, Bahrain (IBBL is a member of its Executive Council)
4. Society for Worldwide Inter-bank Financial Telecommunication (SWIFT)

3^rd Finding

Functions of IBBL

The functions of Islami Bank Bangladesh Limited are as under:

 4^th Finding

Overall activities of Deposit Product & Services

Based on Islamic principles and shariah (Islamic law), with an authorized capital of TK. 500 million (12.5 million US dollars), the Islamic bank in Bangladesh, called Islami Bank Bangladesh Limited (IBBL) was incorporated on March 13, 1983 as a Public Limited Company under the companies Act of 1913. The bank started its financial activities with effect from March 30, 1983. This is one of the first interest free banks in South Asia. The opening of Islami bank brought a new era in the history of the country’s financial market. The long cherished desire of many Muslims in the country was realized. The total number of branches of the bank as on December 1995 stood at 83. The bank had taken steps to spread its activities towards the rural areas of Bangladesh. With the implementation of the expansion program in the year 1997, almost all-important commercial places of the country would come under the operational activities of the bank.

In Bangladesh, which is the second largest Muslim country of the world, Islami Bank Bangladesh Limited (IBBL) started as a joint venture multinational bank with 63.92% of equity contributed by the Islamic Development Bank and financial institutions like Al-Raji Company for Currency Exchange and Commerce of Saudi Arabia, Kuwait Finance House, Jordan Islamic Bank, Islamic Investment and Exchange Corporation of Qatar, Bahrain Islamic Bank, Islamic Banking System International Holding, S.A, Dubai Islamic Bank, Kuwait Ministry of Awqaf and Islamic Affairs. Two eminent personalities of Saudi Arabia namely Fouad Abdul Hameed Al-Khateeb and Ahmed Salah Jamjoom, are also the sponsors of the Islami Bank Bangladesh Limited. (GB 1993/94).The responsibility for management and formulation policy of the IBBL is vested in the board of directors. The board consists of 14 local and 9 foreign directors. As a rule in the Article of Association, a Bangladeshi director is to be elected as the chairman of the company. A high powered Executive Committee has been formed to assist the chairman. There are six members in this committee, nominated by the board of directors. In addition to this there is a Management Committee consisting of the most senior executives of the bank. There is also a Shariah Council comprising famous Islamic scholars, economists and bankers. This Council is responsible for supervising the day to day affairs of the Islamic bank from the viewpoint of the Islamic Shariah. (GB, 1995).

IBBL’s Deposit Products and Services

IBBL Deposit Scheme offers following Product & Services:

      Al-wadeeah Current Account

      Mudaraba Savings Account

      Mudaraba Term Deposit Receipt

      Mudaraba Special Notice Account

      Mudaraba Special Savings ( pension ) Account

      Mudaraba Hajj Svings Account

      Mudaraba Savings Bond Scheme

      Mudaraba Foreign Currency jDeposit Scheme ( Savings)

      Mudaraba Waqf Cash Deposit Account

      Mudaraba Monthly profit Deposit Scheme

      Mudaraba Muhor Savings Deposit Scheme

Other Products & Services of IBBL

IBBL Investment Modes:

      Bai-Muajjal

      Bai-Murabaha

      Hire purchase under Shirkatul Meelk

      Mudarabah

      Musharaka

      Bai-Salam

      Equity and entrepreneurship Fund of Bangladesh Bank

IBBL Special Schemes:

      Household Durables Scheme

      housing Investment Scheme

      Real State Investment Program

      Transport Investment Program

      Car Investment Scheme

      Investment Scheme for Doctors

      Small Business Investment Scheme

      Agriculture Implements Investment Scheme

      Micro Industries Investment Scheme

      Mirpur silk weavers Investment Scheme

IBBL Rural Development Scheme:

IBBL ATM Services:

      Facilities

      Getting IBBL ATM Card

      Cash withdrawal procedure

      Issuing Branches

      Location of ATM Booths

      BTTB Bill Payment Procedure

      IBBL Schemes – Installment Payment Procedure

IBBL Special Service:

      Locker Service

      SWIFT

      Reuter

IBBL Foreign Exchange Business:

      Remittance Agreement

      Correspondents

      Representative abroad

      Customers Service

      Account Opening Form

      NRB Services

Al-wadeeah Current Account

      The deposit is accepted in the AWCA under Al-wadeah principle of Islamic Shariah. The deposited money is invested along with other deposits by the Bank according to Islamic Shariah.  Here, the customer does not have any share in the profit.  The transaction can be made more than once during the banking hour.

      The account can only be opened with the introduction of any acceptable  client/ current account holder of the Bank. In order to open Al-wadeah Current Account, a minimum amount of Tk.500/= is to be deposited and   the minimum balance with minimum amount of Govt. tax is to be maintained in the account. The Bank reserves the authority to return cheque, if otherwise.

      Withdrawal may be made through the cheques supplied by the Bank. In that case all articles of Negotiable Instrument Act are applied.

      Incidental charge @ Tk.50.00 half yearly basis is deducted from the account where minimum balance is not maintained. Closing charge @Tk.50.00 will be realised while closing the account

      For the first cheque book, the customer has to apply   in a specified form (F-6) and then for new cheque book the customer shall have to apply through the requisition slip supplied with the previous cheque book.

      The customer has to count the pages of the cheque book at the time of receiving the same. The book   should be maintained safely so that no cheque may be misused or stolen or destroyed. The Bank will not be responsible for any forgery if occurred by the stolen cheque (s).

      The account holder shall have to use the specimen signature put in the Bank while withdraw money and in case of other correspondence with the Bank. In order to change the specimen signature put earlier the operator shall have to apply in writing before well in time.

      The bank usually allots separate A/c. Nos. to different A/c. holders. The depositors have to mention name and No. of the account while fill-up the deposit slips for depositing the cash/cheque and obtain receipt duly signed by the authorised bank officials. The cheque to be deposited should be marked ‘Crossed’ i.e. A/c. Payee/ & co. etc. in the proper place of the cheque. If the deposited cheque(s) etc. is/are returned unpaid to the bank, charge/commission will be realised as per norms.

      The Bank records the instruction of ‘Stop Payment` with care. But the Bank will not be held responsible if any fraudulent withdrawal is/are made through stopped cheque (s).

      The Bank supplies statement of account every month.

      The bank has right to deduct any account to realise necessary expenditure/postal charge. Moreover, any tax imposed by the Govt. will be deducted from the account.

The Bank preserve the right to close the account without showing any cause.

      The changed address (if applicable) should be informed to the Branch immediately. The bank makes correspondence with the customer through postal services. The Bank will not be held responsible if any letter (cheque/Bill) is not delivered in time or not delivered at all, ]

      In case of joint account, if any of the A/c. holders expired the operation in the account will be stopped just after getting report and balance in that account will be paid as per norms to the heirs of the deceased and the alive A/c. holder(s); if there is any outstanding investment liabilities, the alive account holder/heirs of the deceased is/are bound to adjust the same.

      The Bank consciously sums up the credit/debit of the account. If any amount is credited/debited through mistake, Bank can re-write the balance.

      The unused cheque(s)   must be returned   to the Bank at the time of closing of the account.

      The account holder(s) can select nominee’s) to receive the balance of the account in case of death of the account holder.

      In case of death of the account holder, the nominee’s) has to submit the following papers/documents in support of his/their nomination to receive the balance of the concerned account:

a)Death Certificate regarding death of the account holder.

b)Certificate from 2 (two) valued clients of the Bank or 2 (two) officers of the Bank or the Chairman/Ward Commissioner of the Union Parishad/Municipality in support of the identification of the nominee’s).

c) Attested Passport size photographs of the nominee’s).

d) Indemnity Bond (C.F.-12) duly executed by the nominee’s) under sureties of 2 (two) valued clients each good for the amount and acceptable to the Bank.

      The Bank reserves the authority to change, develop or reform/modify the rules of the account any time and the client is bound to abide by the same.

      Mudaraba Savings Account

Mudaraba Savings Account of Islamic Banks is conducted under Mudaraba principles of Islamic Shari’ah. Under this principle, the Account holders I.e. Depositors are called ‘Shahib Al-Mal’ and the Bank is Mudarib. The bank will manage and deploy the fund without any intervention of the Depositors. The profit earned  by the bank by deploying such deposits is shared by the bank and the depositors as per agreed ratio say bank 35% and the depositors 65% or like this. If any loss is incurred, it is t be borne by the depositors as per Shari’ah. This account may be opened in single or joint name of any organization. The depositors are generally allowed to deposit several times as they require but in case of withdrawal of money there is some restriction as per rules and practices of the concerned bank.

      Mudaraba Term Deposit Receipt

Like Mudaraba Savings Account, Mudaraba Term Deposit Account is also conducted under Mudaraba principles of Islamic Shari’ah. Generally, deposit is accepted in different from 3 months to 36 months. While allocating profit, higher rate of profit is given to this account. No withdrawal facility is allowed here. However, the depositor may enjoy premature encashment facility or he can avail quard against lien of his account as per norms of the bank.

      Mudaraba Special Notice Account

This account is also operated under Mudaraba principles. The very special character of this account is seven days prior notice for any withdrawal.

      Mudaraba Special Savings ( pension ) Account

Islami Bank Bangladesh Limited, in keeping with its welfare-oriented ideals based on Shariah Principles, has developed a deposit pension scheme named “Mudaraba Special Savings (Pension) Scheme”, in order to mobilise and encourage the middle and lower middle class professional and service holders to save as per their capacity for their old age when they will normally retire from their active service life who otherwise do not like to keep and invest their savings and funds in interest bearing deposit pension schemes. Due to lack of or limited scope for savings and investment in non-interest bearing schemes, most of these individuals either consume their savings/funds or spend the same in unproductive expenditures. Thus a substantial amount of Savings/funds remain out of the production cycle.

The savings/funds of these people can play a vital role in capital formation and as a source of invisible fund for generation of income and increase of wealth of the individuals and of the nation. The scheme developed by Islami Bank Bangladesh Ltd. has already been accepted cordially by the lower and middle income group of people and thus it is expected to have great prospect in mobilization of small savings and funds for deployment in income and employment generating activities and business. In view of the above the Bank has introduced “Mudaraba Special Savings (Pension) Scheme”.

Amount of deposit installments 

Accounts under this scheme may be opened for monthly deposits of Tk. 100/-, Tk. 200/-, Tk. 300/-, Tk. 400/-, Tk. 500/-, Tk. 1000/-, Tk. 1500/-, Tk. 2500/- and Tk. 5000/- only. The deposit will be received on Mudaraba Principle.

         Opening of Account

• Any bonafide citizen of Bangladesh of eighteen years or above with sound mind may open account in his name under this scheme by application in Bank’s printed application form designed for this purpose.
• The applicant shall have to be introduced by a bonafide account holder of the Branch where he intends to open account or any client of any Branch of IBBL or any respectable person known to the Bank and shall have to give two passport size photograph at the time of opening the account.
• This account can be opened in the name of minor by his/her father/mother/legal guardian giving necessary instruction for the operation of the account.
• Account may be transferred from one branch to another branch of the Bank at the written request of the account holder.

• Separate account number shall be allotted for each account.
• At the time of Opening of the account the client has to give his specimen signature in a separate card.
• Account may be also opened by thumb impression in case of illiterate person. In such a case the introducer has to submit a suitable declaration to the effect in a form prescribed for this purpose.
• No cheque book shall be issued against this account.

       Deposit of installment

• Under this scheme the depositor has to deposit fixed installment at the rate of his choice from the options as mentioned above (i.e. Tk. 100, Tk. 200, Tk. 300, Tk. 400, Tk. 500, Tk. 1000, Tk. 1500, Tk. 2500 and Tk. 5000) each month regularly.
• Installment must be deposited within 6th to 25th of each month. If the 25th of any month is a Govt. holiday then installment may be deposited on following working day.
• Installment may be also deposited by cheque. In such case proceeds against the cheque must be collected within the 10th day of the month. If the cheque is dishonored then the cheque shall be returned to the depositor observing due formalities and the installment shall be treated as overdue.
• Advance Installments may be allowed to be deposited with proper arrangement between the Bank and the client in this regard.
• The depositor may issue written standing instruction for monthly transfer of installment amount from any other account maintained with the same branch for credit to his MSS account. In that case the client must ensure sufficient credit balance in his/her Savings or Current account and he/she has to pay a charge of Tk. 5 only for each such transfer.

     Profit Sharing and Weightage

The Mudaraba Special Savings (Pension) Scheme account holders shall share income derived from investment i.e., income from the use of the Mudaraba funds in economic activities permitted by Islamic Shariah. This includes profit, dividend, capital gains, rent and any other income derived from investment.

The account holders under this scheme along with other Mudaraba depositors shall get minimum 65% of the income derived from the deployment of Mudaraba Fund in the investment during any accounting year according to their proportion in the total investment on daily product basis applying the following weightage:

05 years Mudaraba Special Savings (Pension) Scheme: 1.10
10 years Mudaraba Special Savings (Pension) Scheme: 1.30

Benefits of full weightage with yearly cumulating of profit shall become payable if withdrawn on maturity.  No profit shall accrue if the account is closed within one year.  In cases of premature withdrawal after one year profit shall be payable at the rate applicable for Mudaraba Savings Deposit. In case of 10 year term MSS Account encashed after 5 years but before 10 years, profit shall be payable at the rate applicable to 5 year term MSS Account for 5 (five) years and at the rate of Mudaraba Savings deposit for the subsequent period.

        Payment of Pension

The pension is payable at the maturity of the term for which the account is opened either in lump sum or on monthly basis at a fixed amount as per written option of the depositor. The depositor may change his/her option in writing during the currency of the term. In case of option for receiving monthly pension the depositor shall get profit at the rate payable to Mudaraba Savings Deposits after the maturity of the account and pension will be paid until such time there remains sufficient balance in the account.

Pension amount shall be paid to the account holder as per contract and in case of his/her death to his/her nominee as per instruction given. In case of payments to the nominee/ nominees rules described below shall be applicable.

The lump sum amount of pension payable at the end of a particular term may vary due to variable rate of profit given on the yearly deposit. This will mean that the pension amount may ultimately vary and may be more-or-less than the figure mentioned in the table. If the actual amount payable becomes more than the amount shown in the table, the account holder or beneficiary will get a higher amount and contrarily if the actual amount payable ultimately becomes less than the amount shown in the table, the beneficiary will get less amount than what is shown in the table.

        Nomination

• The depositor may nominate one or more persons as his nominee of the account. In case of more than one nominee, he should fix their respective share in the nomination.
• Minors also may be named as nominee. In such a case he may also give written instruction as to who is to receive the amount in the event of his death before the attaining of maturity of the nominee (s). Otherwise payment will be made to the legal guardian approved by the court.
• The depositor may at any time nominate a new nominee canceling the previous nominee in writing.
• In the event of the death of the nominee during the lifetime of the depositor and before the withdrawal of the balance of the account, the nomination shall be treated cancelled.
• The nominee (s) shall be entitled to receive the money of the account according to apportionment only after the death of the depositor. In such case there shall be no need for Succession Certificate and the matter shall be settled at the branch level.
• The nominee has to submit the under mentioned papers to receive the balance of the account:
• Application of the nominee /nominees/nominated guardian.
• Death Certificate regarding the deceased depositor.
• Identification Certificate in favor of the nominee, nominees by two valued account holders or two officers of the Bank or from the Chairman or Commissioner of local Municipality.
• Duly attested Passport – size photograph of the nominee/nominees or nominated guardian.
• Indemnity bond jointly executed by the nominee/nominees/nominated guardian along with two valued clients of the branch.

        Automatic closure and revalidation of the account

• The account shall be treated automatically closed if monthly installments are not deposited within the 10th day of each month. However;
• Where a monthly installment falls in arrear within one year of the opening of the account and the depositor deposits the same within the 10th of the following month with a written application showing valid reasons for such default, the account may be revalidated for operation.
• If after one year of opening of the account 3(three) consecutive installments are not deposited, the account may be revalidated subject to deposit of all arrear installments within 10th day of the 4th month with a written application showing valid reasons for such default.
• The client shall get 5 (five) chances for 5 years accounts and 10 (ten) chances for 10 years accounts to revalidate his account as per procedures mentioned at sub-Para nos. 9(a) and 9(b).
• In case of automatically closed accounts, the depositor shall get profit applicable as per terms described at Para no. 10 below. The balance of automatically closed accounts shall be paid to the client on serving notice to him after three months from such closure through pay order or transfer to his Savings/Current Account. If no response to notice is received within a reasonable time, the Pay Order shall be sent to the account holder’s recorded address by registered post and the postal expenses shall be recovered from the balance of the account.

        Pre-mature closing of account

• The client may, at anytime close the account by written application. In such cases a charge of Tk. 25/- shall be recoverable for each account closed and the following terms shall be applicable:
• If the account is closed within 1(one) year of the opening, the client shall receive only the principal amount of deposit.
• In case of 5(five) year term account if the account is closed after 1(one) year but before maturity of the term the depositor shall be entitled to the principal amount along with profit at the rate applicable for Mudaraba Savings Deposit.
• In case of 10(ten) year term account, if it is closed after 5(five) years but before maturity of the term the depositor shall be entitled to the principal amount along with profit at the rate applicable to 5(five) year term MSS account for 5(five) years and at the rate of Mudaraba Savings deposit for the subsequent period.

        Special Facilities for the holder of MSS Account

National Board of Revenue (NBR) may be approached for exemption of excise duty and tax on the profits earned in the account and to treat the deposit under the scheme as investment allowance as provided under income tax rules since similar schemes of NCB’s enjoy such exemptions.

      Mudaraba Hajj Savings Account

Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur’an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh.

      Mudaraba Savings Bond Scheme

Savings play an important role in capital formation, income-generation and creation of employment opportunities and contribute towards the increase in wealth of the individual and nation through profitable investment.

The people generally try to save a portion of their income with a view to protecting themselves from future financial hardship and also to enhance their earnings for their own benefit and the benefit of their family and the nation as a whole. Bangladeshi wage earners living abroad and the retired service holders desire to invest their earnings and retirement benefits in safe and profitable investment schemes. Many a people, however, cannot deploy their fund in business for various reasons. The people of Bangladesh are deeply religious and committed to Islamic way of life and determined to conduct their economic activities in accordance with the tenets of Islamic Shariah. Naturally they want to avoid interest in transaction and business which is forbidden by Islam.

Islam encourages savings, which is the prerequisite for any sustainable economic development. The saying of Holy Prophet (PBUH) is that poverty leads to unbelief and therefore, people have been encouraged to save a portion of their earnings to protect themselves from future financial setback. Islam emphasises in the cycling of surplus capital by investing such funds in productive economic activities that will pave the way for employment, development and progress.

The people of Bangladesh reluctantly invest in interest bearing schemes. The religious Muslims, however, avoid such investments and the idle funds are mostly being consumed to meet the avoidable family demands. Thus the major portion of savings remain out of the production process. Islami Bank Bangladesh Limited, has therefore, introduced the savings deposit accounts viz. Mudaraba Savings Account, Mudaraba Term Deposit Account, Mudaraba Hajj Savings Account, Mudaraba Special Notice Account and Mudaraba Special Savings (Pension) Scheme as per Islamic Shariah. Mudarabah Special Savings (Pension) Account has also been introduced recently. Islami Bank Bangladesh Limited, being encouraged by the success of the Mudaraba deposit accounts has, therefore, introduced yet another savings scheme namely “Mudaraba Savings Bond Scheme”.

Objectives

• To offer investment opportunity to the people and institutions who do not like to keep their savings and funds in interest bearing deposit accounts or invest in interest bearing schemes.
• To facilitate deposit and investment of funds of the wage earners and retirement benefits of the service holders.
• To encourage savings by offering a safe and profitable investment outlet through sharing of a portion of the profit out of investment of their deposited money as per Islamic Shariah.
• To extend the Bank’s Schemes for mobilisation of savings, generation of income, creation of employment and enhancement of wealth of the individual and the nation through profitable investment of these savings as per Islamic Shariah.
• To encourage participation of the people in Islamic banking system and development of the economy in line with the principle of Islamic Shariah.

  Eligibility

• Person(s) aged 18 years and above shall be eligible to purchase Mudaraba Savings Bond(s) in single name or in joint names.
• Educational Institutions, Clubs, Associations and other non-trading and non-profit Socio-economic Institutions shall also be eligible to purchase Bond(s) in the name of the Institutions.
• Guardian(s) shall be allowed to purchase Bond(s) jointly with a minor mentioning the age of the minor. Payment against such Bond(s) shall be made on the basis of joint signature after the minor attains majority.
• Father/Mother/Legal Guardian shall be eligible to purchase these Bonds on behalf of one or two minors mentioning the name and age of the minor(s) and also instructions regarding payment encashment.

Denomination

Mudaraba Savings Bond shall be available in Tk. 1,000.00, Tk. 5,000.00, Tk. 10,000.00, Tk. 25,000.00, Tk. 50,000.00, Tk. 1,00,000.00, Tk. 5,00,000.00 and Tk. 10,00,000.00 denominations.

Purchase Ceiling

Purchase ceiling of Mudaraba Savings Bond is minimum Tk. 1,000.00. Any amount of Bonds can be purchased subject to availability.

 Purchase Procedure

Eligible purchaser(s) shall be entitled to purchase Mudaraba Savings Bonds in single or in joint names or in the name of Institutions from the Branch of the Bank. The purchaser(s) shall have to apply in prescribed form of the Bank and fulfil the terms and conditions in this respect.

Period of Maturity

5 (five) years
8 (eight) years.

Profit Sharing & Weightage

The Bondholders shall share income derived from investment i.e. income from the use of the funds in economic activities permitted by Islamic Shariah. This includes profit, dividend, capital gains, rent and any other income derived from investment
Bondholders shall get minimum 65% of the income derived from the deployment of Mudaraba fund in the investment during any accounting year according to their proportion in the total investment applying the following weightages:

Type of Bonds                                                                        Weightage

8 years Mudaraba Savings Bond          :                                       1.25
5 years Mudaraba Savings Bond          :                                       1.10

Benefits of full weightage shall be given if encashed on maturity. In cases of premature encashment weightage shall be relatively lower as below:

Encashment

For encashment of Mudaraba Savings Bonds, the Bondholder(s) or their nominee(s) [in case of death of the purchaser(s)] shall have to present the Bond(s) and the related papers in original duly discharged as per rules, to the Branch of the Bank where from the Bonds were purchased. The concerned Branch shall verify the signatures and other particulars and if found in order, then make payment with profit to be calculated on the basis of period covered at the time of encashment.

Other Benefits

• Mudaraba Savings Bonds can be purchased in single name or joint names and there shall be provisions for nominating nominee(s).
• Photographs shall not be required with application for purchase of the Bonds.
• Mudaraba Savings Bond shall be acceptable as security.
• If original Bonds are lost or damaged due to theft, fire etc. there shall be arrangement for issuance of duplicate Bonds after due verification.
• Mudaraba Savings Bond holders alongwith other Mudaraba depositors shall get preference in the matter of investment of their deposits over the Bank’s equity and other cost free funds.
• Income derived from the investments during the accounting year shall at first be allocated to the Mudaraba deposits and cost free funds (including Bank’s equity) according to their proportion in the total investment as per principles of distribution of profit to Mudaraba depositors.

Other Terms & Conditions

• Deposits against Mudaraba Savings Bond shall be accepted strictly on Mudaraba principles of Islamic Shariah and accordingly the deposits so received shall also be invested as per Islamic Shariah.
• The depositors must preserve the Bonds properly and carefully. In case of loss or damage of the Bonds, the depositors must inform the Bank immediately for taking necessary precautions. If the depositors fail to inform the Bank about the loss, the Bank shall not be responsible for any withdrawal of money against the Bonds through fraudulent means.
• Nomination can be cancelled at any time and the depositors can nominate new nominee. Nomination shall be cancelled automatically if the nominee dies before maturity of the Bonds. Nominee shall be entitled to the benefits only after the death of the depositors. Mudaraba Savings Bonds purchased in joint names shall be encashed under joint signatures if there is no instructions, the legal heirs of any joint depositors shall get their share as per law in case of death of any of the joint depositors.
• Mudaraba Savings Bond holders shall not share any income derived from different services of the Bank where the use of fund is not involved. Similarly, the Bondholders shall also not share any income derived from the investment of Bank’s equity and cost-free fund.
• Profits of any accounting year shall be declared after certifying the accounts of the Bank by the auditors appointed by the shareholders in the Annual General Meeting.
• If the Bonds are encashed before finalisation of the annual accounts of the Bank, profits shall be paid on the basis of provisional rate. Afterwards if it is found on finalisation of accounts that the profits are more or less than the provisional rate, neither the Bank nor the concerned depositors shall have any claim.
• Profits shall be calculated on the basis of weightage pertaining to the particular Bond.
• No profit shall be paid if any Mudaraba Savings Bond is encashed before expiry of one year. If any Bond is encashed after one year but before the maturity date, profit shall be paid at reduced rates applicable to the period covered.
• No profit shall be paid for the period after maturity of the Bond, if not encashed on maturity.
• The Bondholders shall have to communicate to the Bank, if there is any change of their address.
• The Bank reserves the right to change, amend, modify or cancel any rules, terms and conditions of the scheme.

      Mudaraba Foreign Currency jDeposit Scheme ( Savings)

Islami Bank Bangladesh Limited has introduced a new deposit product titled ‘Mudaraba Foreign Currency Deposit Scheme (Savings)’ under Mudaraba principle and endeavouring to invest the foreign currency funds in profitable way through its Foreign Correspondent Banks under Shariah Principle so as to enable the Bank to pay profit to its FC/PFC depositors, who will intend to open/maintain Mudaraba Foreign Currency Deposit (MFCD) Account particularly in US Dollar. This Scheme offers investment opportunities to wage earners and other private Foreign Currency Account holders who do not like to keep their funds in interest bearing deposit accounts or invest in interest bearing schemes. To encourage savings in Foreign Currency by offering a safe and profitable opportunity to the savers/investors by way of sharing a portion of the profit out of the investment of their funds as per principles of Shariah and to extend the Banks Deposit Scheme for mobilisation of remittance of Bangladeshi expatriates to increase the opportunity for their income generation and increase in the wealth of individuals and of the nation through profitable investment as per Shariah principles are the special features of the Scheme.

Objectives

• To offer investment opportunity to the Wage Earners and other private Foreign Currency account holders who do not like to keep their funds in interest bearing deposit accounts or invest in interest bearing schemes.
• To encourage savings in Foreign Currency by offering a safe and profitable opportunity to the savers/investors by way of sharing a portion of the profit out of the investment of their funds as per principles of Shariah.
• To extend the Bank’s Deposit Scheme for mobilization of remittance of Bangladeshi expatriates to increase the opportunity for their income generation and increase in the wealth of individual and of the nation through profitable investment as per Islamic Shariah Principles.

Eligibility of the Persons/Firms for opening MFCD A/c(s)

1. Bangladeshi nationals residing, working and earning abroad.
2. Foreign nationals residing in Bangladesh and also Foreign Firms registered abroad and operating in Bangladesh.
   1. Foreign missions and their expatriate employees.

Opening of the Account (Currency, Type and withdrawal)

1. Account may be opened in US Dollar, Pound Sterling or other eligible currencies at the option of the account-holder (However, at the moment Deposit in such account will be accepted only in US. Dollar).
   1. Types of account will be “Mudaraba Foreign Currency Deposit Account”.

Payment of Profit

• Initial Deposit must be USD=1000/-
• In case the balance falls below USD=1000/-, no profit will be paid.
• Withdrawal is allowable twice in a month and each withdrawal must not exceed ¼ of the credit balance. Withdrawal exceeding the said limit will require 7 days notice.
• Balance will carry profit only if it remains for one month or above.
• Profit will be on average monthly balance.
• Islami Bank Bangladesh Limited will try to invest such funds profitably in Foreign Investment as per Islami Shariah through their Foreign Correspondent Banks.
• Minimum 65% of the gross investment income derived from Mudaraba Foreign Currency Deposit (MFCD) funds, shall be distributed to this account-holders on half yearly basis.
• If there will be no available opportunity for Foreign Investment as per Shariah, Profit will not be given to the account holders.
• Foreign Currency (Current) Account may be opened with any Authorised Dealer (AD) Branch of the Bank. But for availing the facility of profit, the MFCD Account should be maintained with under-mentioned A/D branches of the Bank.
• Related Account opening form duly filled in alongwith Specimen Signature Card and signed by the account-holder.
• In case of nomination, Signature of the nominee in the account opening form and Signature Card be attested by the account-holder.
• Photocopy of passport (upto VISA pages).
• Passport-size photographs 2 copies.
• Nominee’s Photographs 2 copies (if there be any) duly attested by the account holder.
• Service contract/selection letter/Appointment letter/VISA and other relevant papers regarding occupation.

Procedure/Requirement for opening of MFCD A/c

      Mudaraba Waqf Cash Deposit Account

Cash Waqf is the latest product in the realm of our banking sector particularly in Islamic economics and finance and it provides a unique opportunity for making investment in different religious, educational and social services. It has been decided to introduce a new deposit scheme/product in the name of ‘Mudaraba Waqf Cash Deposit Account MWCDA, through which savings made from earnings for the purpose of Waqf by the well-off and the rich people of the society can be mobilized and the income to be generated there from may be spent for different benevolent purposes. Through the Scheme the Bank will be able to contribute to popularize the role of Waqf in the country including Cash Waqf which will be instrumental in transferring savings of the rich to the deprived member of the public, in financing various religious, educational and social services in Bangladesh. Cash Waqf can work as supplement to the financing of various social investment projects.

Objectives

• To provide banking services as facilitator to create Cash Waqf and to assist in the overall management of Waqf
• To assist mobilization of social savings by creating Cash Waqf with a view to commemorating alive or deceased parents, children and to strengthen the integration of the family relationship of the well-off people and the rich.
• To increase social investment and to transform the social savings into capital.
• To benefit the general public, especially the poor sections of the people out of the resources of the rich.
• To create awareness among the rich regarding their social responsibilities to the society.
• To assist in developing capital market.
• To assist in overall development efforts of the country and to make a unique integration of social security and social peace.

Term

• Waqf to be done in perpetuity and the account shall be opened
• in the title to be decided by the Waquif.

Ceiling of Deposit

Deposits/Cash will be received as endowment on Mudaraba principle. The Bank will manage the Waqf Fund on behalf of the Waquif. Waquif will have the right/opportunities to create Cash Waqf at a time or he/she may start with a minimum deposit of Tk. 50,000/- ( Taka fifty thousand) only and the subsequent deposit shall also be made in thousand or in multiple of thousand taka. If necessary, foreign currency may be accepted on complying with relevant rules/formalities. Cash Waqf shall be accepted in specified Endowment Receipt Voucher and a certificate for the entire amount shall be issued as and when the declared amount is built up in full.

Profit Sharing & Weightage

The Waquif himself may be the beneficiary of a nominal portion of the profit to be earned from the Waqf Fund.

The Waquif or the beneficiary under this Scheme shall get the share of minimum 65% of the investment income or the percentage the Bank decides from time to time derived from the deployment of all categories of Mudaraba fund in the investment during any accounting year according to their proportion applying the highest rate of weightage (1.35 at present stage)

The Waqf amount may not remain intact as the Fund is operated as per Mudaraba principle. As per Mudaraba principle if any loss is incurred in course of business the loss is to be covered to the debit of the Waqf deposit. To be mentioned that the profit amount only will be spent for the purpose(s) specified by the Waquif. Unspent profit amount will automatically be added to Waqf amount and earn profit to grow over the time.

Profit under this Scheme shall be payable to the respective sector(s)! institution(s)/project (s)/person(s) determined by the Waquif on Annual basis i.e. after declaration of final rate of profit of the Bank.

Opening of the Account

• Any bonafide adult citizen of Bangladesh with sound mind (capable to enter into contract) may open this Account with any of the Branches of the Bank.
• Account under the Mudaraba Waqf Cash Deposit Account shall only be opened in the title selected by the Waquif.
• The applicant shall have to be introduced by a bonafide Account holder of the Branch where he/she intends to open this Account or any client of any Branch of the Bank. or any respectable person known to the Bank may also introduce the Waquif.
• 2 (two) passport size photographs of the Waquif will be required to open this Account.
• No Cheque Book shall be issued against this Account.
• If the address of the Waquifs is/are changed that must be informed to the Bank immediately.

Deposit of Installment

• Waquif will have the right to create Cash Waqf at a time or he/she may start with a minimum deposit of Tk.50,000/- (Taka fifty thousand) only and the subsequent deposit shall be made by installment(s) in thousand taka or in multiple of thousand taka. In that case he/she will be given Endowment
• Receipt Voucher against depositing of every installment. But Waqf Certificate shall be issued at a time after depositing the full Waqf Amount.
• Installment may also be deposited by cheque. In such case, proceeds against the cheque will be deposited after collection. If the cheque is dishonored then the cheque shall be returned to the Waquif observing due formalities and the installment shall be treated overdue.

Other Terms

• A Waqf Management Committee at Head Office level will manage the Waqf Fund. Moreover, if any dispute/objection is raised by the Waquif in connection with the mismanagement of the Waqf Fund or for other causes, in that event the issue will be referred to the said Committee and the decision of the Committee will be final.
• The Waquif will issue written standing instruction for yearly transfer of profit amount to MSA/AWCA maintained by the beneficiary(ies)/institution(s)/project(s)/person(s) or the concerned Branch may pay the profit amount directly to the beneficiary(ies)/institution(s)/project(s)/person(s) as determined by the waquif.
• In case of installment basis Cash Waqf, if the Waquif fails to continue depositing the installment(s), the amount accumulated so far throughout the period shall be counted for profit to be given to that Account. Next year, the Waquif will get the opportunity to deposit his installment again. Mentionable that, one particular Waquif will not be entitled to repeat non- depositing of installment (s) more than five times.
• In the event of death of the Waquif the profit of that Waqf Account will be spent as per option given by the Waquif and a Certificate in this regard will be issued for the amount so far deposited by the Waquif and this shall be handed over to the successor of the Waquif. If the successor is willing to pay the shortfall amount to cover the declared amount of Waqf then after getting such amount a Certificate for the full amount may be issued.
• In case of the failure of the Waquif to deposit the installment any more to build up the declared amount, the Waquif may request in writing to the effect that he is unable to deposit the rest amount to cover the declared Cash Waqf. Thereby, he may be issued Cash Waqf Certificate considering the amount so far deposited as the declared amount after obtaining approval from the branch incumbent.
• If the goal/purpose of Waqf is ended/destroyed, where the income/profit of the Waqf A/c will be spent must be mentioned as a special indication at the time of opening of the Account. If it is not mentioned or if there arise any contradiction, the Committee’s (Waqf Management Committee) decision in this regard shall be final.

Special Instructions:

• The Waquif will have the right to choose the purposes to be served either from the list of choices determined by the Bank for this purpose or any other purposes permitted by the Islamic Shariah.
• The Waquif shall also have the right to give standing instruction(s) to the Bank for regular realization of cash Waqf at a rate specified by him/her from any other A/c maintained by him/her with the concerned Branch.
• Bank reserves the right to regret opening of any Account without showing any reasons thereof.
• Waquif may also instruct the Bank to spend the entire profit amount for the purpose specified by him/her.

Purposes

List of purposes determined by the Bank in this regard is as follows and the Waquif will have the right to choose the purpose(s) to be served either from the list or any other purpose(s) permitted by the Shariah:

Family Rehabilitation:

01. Improving the conditions of absolutely poor living below the poverty line.

02. Rehabilitating physical handicapped and disadvantaged group of people.

03. Rehabilitating beggars.

04. Rehabilitation of destitute women.

05. Up-lift of urban slum dwellers.

 Education & Culture:

06. Education of orphans i.e. supplying books/clothes free of cost.

07. Expansion and development of proper education for skill development.

08. Informal education facilities for children at home (i.e. mothers educational program, children literature).

09. Physical education and sports facilities.

10. Supporting to Islamic culture and heritage and art promotion.

11. Conducting Dawah activities.

12. Supporting education of deserving students in the form of scholarship.

13. Supporting vocational education in general.

14. Supporting education to inaccessible and neglected area.

15. Financing specific Madrasha. School and College etc. of a particular area.

16. Educating deserving dependants/descendants.

17. Supporting any project in the area of education, research, religious and social services in the memory of father, mother and am’ dependants/descendants.

18. Establishing educational chair.

Health & Sanitation:

19. Village health care and sanitation.

20. Supplying/arranging of pure drinking water (to households. schools. mosques. slums. etc).

21. Establishing hospitals. clinics, health care programs especially for the poor.

22. Health research grant and research in particular disease.

Social Utility Services:

23. Settling disputes (i.e. Village litigation

24. Providing legal aid to deserving men! women to establish their lawful rights.

25. Assist in arranging dowryless marriage to poor girls.

26. Maintenance of public roads and tree plantation in the illage/road sides.

27. To rehabilitate the Reverted Muslims (Naew-Muslims).

28. Providing assistance to peace-loving Non-Muslims and solving their problems.

29. Creating social awareness to prohibit gambling and other social vices, such as, thieving and other anti-social activities.

30 Construction, installation and development of public utility services.

31. Maintenance of a specific mosque(s) with/without an income generating project(s)

32. Maintenance of a specific graveyard with/without an income generating project(s).

33. Maintenance of a specific Eidgah(s) with/without an income generating project(s). Besides these woquif can mention any other purposes permitted by Shariah.

      Mudaraba Monthly profit Deposit Scheme

There is a substantial demand of monthly profit paying long term deposit schemes among the retired service holders and wage earners residing abroad who want to help their dependants and relatives by contributing a certain amount of money on monthly basis from the profits of their one-time deposit with the bank. Again there are persons who want to meet the day to day expenses of their families out of the monthly profits that may be received on their long-term deposits. Trusts and Foundations who desire to offer monthly scholarship and stipends to the students from the monthly generated profits of their funds deposited on long term basis with banks and parents who want to bear the educational expenses of children from the monthly profits of their savings are also very much interested for such a monthly profit paying deposit scheme.

Islami Bank Bangladesh Limited, as a pioneer of welfare banking, is receiving demands from the vast majority of our clientele and many other Shariah abiding people for introduction of attractive monthly profit based deposit schemes on the basis of Islamic Shariah so as to encourage them to meet their above needs out of the earnings of their deposits.

Considering the above aspects and prospects Islami Bank Bangladesh limited has launched a new deposit product under the name and style “Mudaraba Monthly Profit Deposit Scheme” in accordance with the principles of Islamic Shariah.

Objectives:

• This is a Deposit Scheme based on Shariah Principles where the depositor/investor gets monthly profit out of his/her deposit/investment. The scheme is designed to attract:
• The retirement benefits of service holders,
• The investment of Wage Earners who want to pay a fixed amount monthly to their families/dependants in Bangladesh from the profit of their investment,
• The deposit of those persons who intend to meet the monthly budget of their families from the income out of their deposit,
• Investment of fund of Trusts and Foundations who award monthly scholarship/stipends to students and
• Parents who want to defray the educational expenses of their children from the monthly profit of their deposit with the Bank.

Term:

The Deposit shall be for a period of 5(five) years. The amount is refundable on maturity as per Mudaraba principle.

Ceiling of Deposit:

Under this Scheme Deposits shall be received on Mudaraba principles in the amounts of Tk.100,000/- and multiples thereof. Specially designed Monthly Mudaraba Profit Deposit Receipt will be issued there-against.

Payment of Profit:

The deposits shall receive estimated monthly profit out of the share of investment income calculated on the basis of the weightage determined for such deposits and to be adjusted on completion of each accounting year and declaration of final rate of profit.

Opening of Account:

• Any bonafide adult citizen of Bangladesh with sound mind may open this account in his/her name or in the name of his/her dependants in any of the Branches of the Bank by application in Bank’s printed Account Opening Form designed for this purpose. The depositor will be issued a specially designed Receipt for the deposit under the Scheme in the same manner as is issued in case of MTDR. This receipt shall not be transferable.
• The depositor shall have to maintain a separate Mudaraba Savings/Al-Wadeeah Current Account at the concerned branch where the monthly profits on his deposit shall be credited as per his written request. No separate introducer and photograph shall be required to open account under the scheme.
• At the time of the opening of the account besides filling in the relative Account Opening Form the client has to give his/her specimen signature in the specific place of the AOF as provided for the purpose.
• No cheque book shall be issued against this account.

Profit Sharing & Weightage:

• The depositor of Mudaraba Monthly Profit Deposit Scheme shall share income derived from investment i.e. income from the use of the funds in economic activities permitted by Islamic Shariah. This includes profit, dividend, capital gains, rent and any other income derived from investment.
• The depositor under this scheme along with other Mudaraba depositors shall get the share of minimum 65% of the income derived from the deployment of all Categories of Mudaraba Fund in the investment during any accounting year according to their proportion applying the weightage of 1.05.
• Benefits of full weightage shall become payable if withdrawn on maturity. In case of premature withdrawal before 1(one) year, no profit shall be payable.
• In case of pre-mature withdrawal after 1(one) year profit shall be payable at the rate applicable for Mudaraba Savings Deposit. In such cases excess monthly profits so far paid shall be adjusted.
• Estimated profit calculated on the basis of weightage fixed for deposits under this scheme shall be payable on monthly basis.
• The payment of monthly profit shall start from the subsequent month after a clear minimum gap of 30(thirty) days from the date of deposit. The monthly profit shall be credited each month to a separate Mudaraba Savings/Al-Wadeeah Current Account of the depositor to be opened at the concerned branch for this purpose if not maintained earlier.

Pre-mature encashment:

Normally, the deposit will not be encashable before 5(five) years. But if any depositor intends to withdraw his deposit before maturity due to certain unavoidable reasons, he would be allowed to do so, on the basis of written application.

Nomination:

• The depositor may nominate one or more persons as his nominee of the account. In case of more than one nominee, he should fix their respective share in the nomination.
• Minors may also be named as nominee. In such a case he may also give written instruction as to who is to receive the amount in the event of his death before the attaining of maturity of the nominee(s). Otherwise payment will be made to the legal guardian approved by the court.
• The depositor may at any time nominate a new nominee canceling the previous nominee in writing.
• In the event of the death of the nominee during the life time of the depositor and before the withdrawal of the balance of the account, the nomination shall be treated cancelled.

• The nominee(s) shall be entitled to receive the money of the account according to apportionment only after the death of the depositor. In such case there shall be no need for Succession Certificate and the matter shall be settled at the branch level. The nominee (s) shall be responsible to distribute the portion of other heirs, if any, as per rule of Islamic Shariah.

Special Benefits:

• Mudaraba Monthly Profit Deposit Account may be opened in single name or in joint name and there will be provision for nominating nominee(s).
• Separate photographs will not be needed to apply for opening this account.
• Monthly Mudaraba Profit Deposit receipts will be acceptable as security.
• Monthly Mudaraba Profit Deposit account holders along with other Mudaraba depositors shall get preference in the matter of investment of their deposits over the Bank Equity and other cost-free funds.
• Gross investment income derived from deployment of mudaraba fund during the accounting year, will at first be allocated to the Mudaraba depositors according to their proportion in the total investment as per principle of distribution of profit to Mudaraba Depositors.

Other Terms & Conditions:

• Deposits under Mudaraba Monthly Profit Deposit Scheme shall be accepted strictly on Mudaraba principles of Islamic Shariah and accordingly the deposits so received shall also be invested as per Shariah principles.
• The depositors must preserve the Receipts properly and carefully. In case of loss or damage of the Receipts, the depositor must inform the Bank immediately for taking necessary precautions. Duplicate receipt may be issued after observing necessary formalities in that regard as per Bank’s existing rules.
• Profits of any accounting year will be declared after certifying the Accounts of the Bank by the auditors appointed by the shareholders in the Annual General Meeting.
• If the deposit is withdrawn on maturity of the account but before finalisation of the Annual accounts of the Bank, profit will be paid as per provisional rates. However, on declaration of final rates of profit for that year, the difference amount between the provisional and final rates, if any payable, will be allowed to the account holder on submission of written claim there against.
• Profits will be calculated on the basis of weightage pertaining to the particular deposit.
• The Bank reserves the right to change, amend, modify or cancel any rules, terms and conditions and the client shall have to abide by the same.

      Mudaraba Muhor Savings Deposit Scheme

5^th Findings

Rural Development Scheme

Bangladesh with its 38% people living below poverty line and 18% living in absolute poverty is suffering from acute rural-urban economic disparity coupled with illiteracy, lack of proper health and sanitation facilities. The country’s economy is basically an agrarian one with vast majority living in rural areas. The agriculture sector is unable to provide any further scope for employment resulting in influx of rural population towards urban areas. Rural areas are characterized by stagnant agriculture and scanty industries. Underemployment and unemployment is a regular phenomenon particularly in rural areas. The vast human resources have remained unutilized due to lack of education, proper training and concerted efforts to help grow the rural economy. It results in uneven distribution of income which causes serious set back in balanced geographical growth as well as growth of GDP.

Islami Bank Bangladesh Limited was founded with the major objective of establishing Islamic economy for balanced economic growth by ensuring reduction of rural-urban disparity and equitable distribution of income.

In view of the above, Branches of the Bank have been encouraged to invest their deposits in their respective areas and in particular for the economic uplift of the rural people.

Accordingly, a Scheme in the name and style of ‘Rural Development Scheme’ has been introduced in 1995 to cater to the investment needs of the agriculture and rural sector to create opportunity for generation of employment and raising income of the rural people with a view to alleviate poverty. It is treated as first Islamic Microfinance Model in the Country & abroad.

Target Area

• Initially the Scheme was started as a Pilot Scheme in the rural areas of certain districts under the direct supervision of the nearby Branches of the Islami Bank Bangladesh Limited.

• The Scheme is being gradually extended to all the Districts through different Branches of the Bank.

Purpose, Period and Ceiling of investment

The clients are provided investment maximum of BDT 10,000/-($145) at the first time and the good performers are given enhancement, upon his requirement, by BDT 2,000 to BDT 5,000 in every next term up to the ceiling of a particular sector.

6^th Findings

ATM Services

Automated Teller Machine (ATM), interalia, has unveiled the horizon of Electronic Banking of 21st Century. Through ATM, customers can avail non-stop online teller service without going to the specific branch of the member bank. They can withdraw or deposit cash or cheque as well as pay utility bills like BTTB, Grameen, AKTEL, City Cell Phone, DESA, WASA, TITAS etc. with the help of this modern computer controlled machine. The service is now offered by ETN and eleven member banks including Islami Bank Bangladesh Limited.

 Facilities

• ATM Card holders can withdraw cash from ATM at any time.
• Customers can make transactions from any of the machines with logo ‘E-cash’ installed at different places in the city.
• In course of time utility bills like WASA, TITAS and DESA etc can be paid through ATM.
•  Now BTTB, Grameen, AKTEL, City Cell Phone bill can be paid through ATM.
• Now IBBL E-cash cardholders can be paid their monthly installment of Mudaraba Hajj Savings, MSS (Pension), Mudaraba Muhor Savings and HDS schemes of IBBL through ATM .
• The machines are located in convenient places where customers usually deal with money matters. So they can easily avoid the risk of cash carrying by using ATM Card.
•  Customers may know their present balance at any time from the machine.
• In course of time POS (Point of Sale) can be used.

Getting an ATM Card from IBBL 

• A customer having a deposit account with the designated branch of Islami Bank Bangladesh Limited can get an ATM card.
• Interested customer would collect ATM Account Opening Form from the concerned branch and submit it along with the annual Card Fee of Tk.300/= (Taka three hundred) only.
• After 7 (seven) days from the date of application, the customer would collect the PIN and Card separately from the designated Officials of the concerned branch and then after 48 (forty-eight) hours, customer can use his Card at any ATM with logo ‘E-cash’.
• Customers can withdraw any amount multiplied by Tk.500/- per instance subject to fulfillment of the above conditions i.e. Tk.500/=(Taka Five hundred), Tk.1000/= (Taka One thousand) Tk.2000/=(Taka two thousand), Tk.3000/=(Taka three thousand) and maximum Tk.20,000/=(Taka twenty thousand) per instance and maximum withdrawal limit Tk.20,000/- per day.

Procedure for cash withdrawal ATM

• Go to any of the ATMs located anywhere within Dhaka / Sylhet / Chittagong / Rajshahi City.
• Insert your card into the ATM and type PIN –press ENTER.
• Select the ‘First Cash/Cash Withdrawal’ option by pressing > key
• Press the > key against your required amount
• Collect the money along with receipt
• If you want another transaction, the same procedure may be applied.

Branches of IBBL within ATM network

  DHAKA ZONE

Local Office

 Foreign Exchange Corporate Branch

 Head Office Complex Branch

 Chawk Mughaltuly Branch

 Narayanganj Branch

 Nawabpur Branch

 Islampur Branch

 New Market Branch

 Mirpur Branch

 Farmgate Branch

 Mouchak Branch

Aminbazar Branch

Ramna Branch

      Gazipur Chowrasta Branch

 VIP Road Branch

 Zinzira Branch

 Bangshal Branch

 Mohakhali Branch

 Sadarghat Branch

 Cantonment Branch

 Jatrabari Branch

 Dhanmondi Branch

 Paltan Branch

 Uttara Branch

 Shyamali Branch

 Mirpur-1

 Elephant Road Branch

 Branch, Tongi

 Kawran Bazar Branch

 Haji Camp Branch

 Gulshan  Branch

 IDB Bhaban

 Rampura Branch

 Bhairab Branch

 Khilgaon Branch

 Mohammadpur Krishi Market

       Pallabi Branch

      Gulshan Circle-1 Branch

      Shyampur Branch

 Panthapath Branch

SYLHET ZONE

 Amberkhana Branch

 Sylhet Branch, Taltola

Laldigirpar Branch

CHITTAGONG ZONE

 Agrabad Branch

Khatungong Branch

 CDA Avenue Branch

 Anderkilla Branch

Station Road Branch

Chaktai Branch

 Pahartali Branch

Chawkbazar Branch

 Jublee Road Branch

Cox’s Bazar Branch

RAJSHAHI ZONE

 Rajshahi Branch

 Newmarke Branch, Rajshahi

Location of ATM booths

Feni

Lotif Tower, Comilla Bus station, Trunk Road, Feni.Phone:(0331) 73175, 74548 . 35

CMB

Tajmahal Tower, 66, Moulvi Bazar,Dhaka Phone: (02) 7318013, 7313508 . 36

Ramna

Dawn Plaza, 9 Banga Bandhu Avenue, Dhaka Mobile: 01711-693914 . 37

Jatrabari

69, Shahid Faruque Sarak, South Jatrabari, Dhaka Phone: (02) 7541083,7546200 . 38

Gouripur

Anumia Tower, Gouripur Bazar, Daudkandi, Comilla Mobile: 01714-089573 . 39

Satkhira

Tufan Complex, Radhanagar, Satkhira Mobile: 01711-889917 . 40

Tongi

19, Main Road, Tongi, Gazipur Phone: (02) 9804166, 9813853 Mobile: 01711-693946 . 41

Uttara

House No.-1/E, Road No.2, Sector-3, Uttara, Dhaka . 42

Cox’s Bazar

Main Road Cox’s Bazar, (in front of fire service station) . 43

Gazipur

1034, Chandona Gazipur Chowrasta, (Rahmant Tower), Gazipur . 44

Cantonment

24, North Kafrul, Kachukhet Main Road, Dhaka . 45

Brahmanbaria

Anu Miah Building, court road,B. Baria . 46

Mirpur-10 Branch

        Mirpur-10 Plot No. 28, Road No.1 (Main), Block-Kha, Section-6, Mirpur, Dhaka .

BTTB bill payment procedure

IBBL schemes- installment payment procedure

7^th Findings

Special Services

Locker Service

      Secured Locker Service is provided in some branches of the Bank. Customers may avail this service and secure their valuables.

      Secured Locker Service is available in the following branches:

SWIFT

Society for Worldwide Inter-Bank Financial Telecommunication (SWIFT) is a bank owned co-operative serving the financial community worldwide. The SWIFT Transport Network (STN) is a dedicated global network for secure communication between SWIFT Customers.

SWIFT supports the financial data communication and processing needs of financial institutions, through a range of financial messaging services and value-added processing, as well as, access through the STN and interface and application software. In short SWIFT is a pioneer in the automation of the global financial industries.

Islami Bank Bangladesh Limited has introduced this SWIFT alliance entry system firstly in October 1999 and introduced SWIFT alliance access in October 2001. Presently all the 31 A/D branches are connected to SWIFT.

 8^th Finding

Investment

Bai-Muajjal

Bai-Muajjal may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the country), to the buyer at an agreed fixed price payable at a certain fixed future date in lump-sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the buyer

Meaning

The terms ” Bai ”  and ” Muajjal ”   have been derived from Arabic words ﻊﻴﺒ  and ﻝﺟﺍ . The word  ﻊﻴﺒ  means purchase and sale and the word  ﻝﺟﺍ  means a fixed time or a fixed period. ” Bai-Muajjal ”  means sale for which payment is made at a future fixed date or within a fixed period. In short, it is a sale on Credit.

Definition

Bai-Muajjal may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum  or  within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer.

In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.

Thus it is a Credit sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.

It may be noted here that in  case of  Bai-Muajjal and Bai-Murabaha, the Islamic Bank is a financier to the Client not in the sense that the Bank finances  the purchase of goods by the Client, rather it is a financier by deferring the receipt of  the sale price of goods, it sells to the Client. If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal / Bai-Murabaha Agreement, that will be  a remittance/payment of the amount on behalf of the Client, which shall be nothing but a loan to the Client and any profit on this amount shall be nothing but Interest.

Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the  payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client  any profit on it will be Riba.

Bai-Murabaha

Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the land), to the buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump-sum or by installments. The profit marked-up may be fixed in lump-sum or in percentage of the cost price of the goods.

Meaning

The terms “Bai-Murabaha” have been derived from Arabic words  ﺢﻳﺑ  and  ﺢﺑﺭ  (Bai and Ribhun). The word  ﺢﻳﺑ  means purchase and sale and the word  ﺢﺑﺭ  means an agreed upon profit. ﺢﺑﺍﺭﻣﺍ  ﺢﻳﺑ  ” Bai-Murabaha” means sale on agreed upon profit.

Definition

Bai-Murabaha may be defined as a contract between a Buyer and a Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the Buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump sum or by installments. The profit marked-up may be fixed in lump sum or in percentage of the cost price of the goods.

 Types of Murabaha

In respect of dealing parties Bai-Murabaha may be of two types.

Ordinary Bai-Murabaha 

If there are only two parties, the seller and the buyer, where the seller as an ordinary trader purchases the goods from the market without depending on any order and promise to buy the same from him and sells those to a buyer for cost plus profit, then the sale is called Ordinary Bai-Murabaha.

Bai-Murabaha on Order and Promise 

If there are three parties, the buyer, the seller and the Bank as an intermediary trader between the buyer and the seller, where the Bank upon receipt of order from the buyer with specification and a prior outstanding promise to buy the goods from the Bank, purchases the ordered goods and sells those to the ordering buyer at a cost plus agreed profit, the sale is called “Bai-Murabaha on Order or Promise”, generally known as Murabaha.

Hire purchase under Shirkatul Meelk

Under this mode Bank may supply implements/ equipment/goods on rental basis. The ownership of the implements/equipment/goods will be with the Bank and the client jointly and the portion of the client will remain to the Bank as mortgage until the closure of the investment account, but the client will be authorized to possess the equipment for certain period. The client, after completion of the installments, will be the owner of the implements/ equipment/goods.

Meaning and Defination

Hire Purchase under Shirkatul Melk is a Special type of contract which has been developed through practice. Actually, it is a synthesis of three contracts:

• Shirkat
• Ijarah
• Sale

These may be defined as follows:
Shirkatul Melk

Shirkat means partnership. Shirkatul Melk means share in ownership. When two or more persons supply equity, purchase an asset, own the same jointly, and share the benefit as per agreement and bear the loss in proportion to their respective equity, the contract is called Shirkatul Melk contract.

Ijarh
The term Ijarah has been derived from the Arabic works (Air) and (Ujrat) which means consideration, return, wages or rent. This is really the exchange value or  consideration, return, wages, rent of service of an asset. Ijarah  has been defined as a contract between two parties, the Hire and Hirer where the Hirer enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Hire. It is a hire agreement under which a certain asset is hired out by the Hire to a Hirer against fixed rent or rentals for a specified period.

Stages of Hire Purchase Under  Shirkatul Melk

Thus Hire Purchase under Shirkatul Melk Agreement has got three stages:

• Purchase under joint ownership.
• Hire and
• Sale and /or  transfer of ownership to the other partner Hirer.

Mudarabah

It is a form of partnership where one party provides the funds while the other provides the expertise and management. The first party is called the Sahib-Al-Maal and the latter is referred to as the Mudarib. Any profit accrued are shared between the two parties on a pre-agreed basis, while capital loss is exclusively borne by the partner providing the capital.

Musharaka

An Islamic financial technique that adopts “equity sharing” as a means of financing projects. Thus, it embraces different types of profit and loss sharing partnership. The partners (entrepreneurs, bankers, etc.) share both capital and management of a project so that profits will be distributed among them as per ratios, where loss is shared according to ratios of their equity participation.

Bai-Salam

Under this mode Bank will execute purchase contract with the client and make payment against purchase of product, which is under process of production. Bai-Salam contract will be executed after making any investment showing price, quality, quantity, time, place and mode of delivery. The profit is to be negotiated. In this mode the payment as the price of the goods is made at the time of Agreement and the delivery of the goods is deferred.

9^th Finding

Foreign Exchange Business

Foreign Exchange means currency & trade exchange say conversion of one to another. This is a part of economic & Science. This is a big deal divided into different currencies instrument such as Draft, Traveler cheque, bill of exchange business including sell, purchasing of currency notes & TC etc. Currency Exchange means the conversion of one Currency into another currency.

Foreign Exchange Business:

Foreign Exchange Business has two aspects:

1.               I.    Trading of Foreign Currencies.
2.             II.    Conducting Foreign Trade by using foreign currency as a media of exchange. Foreign Trade includes Import & Export.

Letter Of Credit: Letter of credit is an arrangement whereby bank (issuing bank) acting on the instruction of the customer (importer), undertakes to make payment, or to accept drafts, or authorizes of another bank to pay, accept or to negotiate draft drawn by the beneficiary (exporter) against stipulated documents, provided that the terms and condition of the credit are compile.

LETTER OF CREDIT ISSUE PROCESS:

The issuing process of letter of credit is one of the vital points for a bank engaged in foreign exchange operation. In one side it has to satisfy the client on the other hand it needs to care the order of the Bangladesh Bank rules and regulations very care fully. After all the steps are as like

  When importer wants to import goods, he request issue bank (his bank) to issue a L/C.

  To do that the importer gives an application to the bank for the L/C.

  Checking out the permissibility of that item that is going to import by the importer and the required rules and regulation of both by the Islami Shariah and by the Bangladesh Bank

  So the issuing bank issues a L/C and sends it to the advising nominated bank.

  If the beneficiary wants confirmation of the L/C the L/C may be confirmed usage-confirming bank to confirm payment.

The advising bank authenticates the L/C and advises the same to the beneficiary. The exporter submits the necessary documents to the advising bank after execution of export.

TYPES OF LETTER OF CREDIT

      Document credit

      Stand-by letter of credit

      Revocable credit

      Irrevocable credit

      Counter credit

      Letter of credit

      Back-to-back credit

      Transferable credit

Some vital things that should be mentioned while talking about the LC are as follows

      Middlemen who buys and sells on a letter of credit basis

      Usually the export letter of credit is not transferable

      The Master L/C is a source of repayment

      The baby L/C is a separate undertaking from that of the issuing bank

      Matching of the terms and conditions of both credits in order to produce the required documents within time limits stipulated in the master L/C, with the following exception:-

      Applicant’s name

      Amount

      Unit price

      Dates

      Insurance

      Documents can be substituted

Financing of Foreign Trade:

In modern banking, Foreign Trade is taken into a shape where customers are provided with various products and services by the bank. They get financial assistance at all stages of their Import & Export trade from bank. Almost all such facilities can be provided under Islamic mode. The general principles in financing import and export business are elimination and avoiding of interest in all operation. Foreign trade are-

Import Finance:

Import means lawfully carrying out of anything from one country to another county for buying. It will be occurred according to the Government law. Based on the needs of commodity and availability of finance, Government declares policy. For import of goods for a particular period, having approval from the National Assembly is defined as Import policy order. Import policy is a guideline of a set of rules envisaged by Government Authority i.e. the Ministry of Trade and Commerce for the registered importer for import of goods inside the country.

Mainly three types of import are done purpose wise:

1.           I.    Import of trading item for ultimate user or consumer.
2.         II.    Import of raw materials or industrial item for further processing or further production.
3.        III.    Import of Capital Machinery & Capital Item.

Export Finance:

Export Business has broken all previous records in terms of growth in percentage and in amount (41% growth with growth in amount of Taka 14,964 million).The growth is attributable to induction of new export oriented projects who are contributing largely to the basket of export proceeds. The high growth in export business inspires to take challenging targets for exports to optimize export business of the IBBL.

Export means flow of goods and services produced within Bangladesh but purchased by economic agent (individuals, firms & government) of other countries. In other words in case of exports products sold outside the country.  So getting payment against such sale usually require different time span depending on the terms of sale contract or relative payment terms of export L/C.

In view of above exporter require immediate fund and other financial facilities to execute their export order. It is the bank that extends such facilities as needed by the exporter and facilitating export by financing exporter at different stages is now important part of bank’s activities.

Exporter requires financial assistance at two stages namely

1. Pre-shipment stage &
2. Post–shipment stage

11^th Finding

SWOT Analysis

STRENGTHS

  Adequate finance: IBBL, Mirpur-10 Branch has adequate finance. That is why; they need not to borrow money from Bangladesh Bank or any other.

   More funds fore investment: For adequate financial ability, they can provide more investment facility to their rather than other Banks.

   Honest and reliable employees: All of the employees of IBBL, Mirpur-10 Branch are honest and reliable. They are always devoted themselves to the clients for better customer.

   Religious feelings of the people: Most of the people of Bangladesh are Muslim and they are trusted in superior performance of IBBL, Mirpur-10 Branch as a Sariah based-Islamic Banking.

WEAKNESSES

   Lake of adequate employees: IBBL, Mirpur-10 Branch has very limited human resources compared to its financial activities and investment operation.

   Lake of up-to-date equipment: IBBL, Mirpur-10 Branch has lack of modern technologies and equipments like adequate online facilities as well as cash card and credit card system.

   Deficiency of expertise: Many of the employees are unskilled and from them, superior performance is unexpected to survive in the   national economy as well as in the world economy.

   Centralized decision making: The decision making of the bank is too many centralized. No decision is made without the authorization of the head office.

OPPORTUNITIES

  Innovative and modern customer service: This bank can introduce more innovative and modern customer services to its customers to survive better in the competition market.

  Retaining vast customer: IBBL, Mirpur-10 Branch has a vast opportunity to hold most of the customers by extending its banking operation because most of the people of country are religious minded.

   Poverty alleviation: IBBL, Mirpur-10 Branch has a great opportunity to save the county’s poor people from being taking loan from different NGOs or few banks with   higher interest rate.

   Special Image: IBBL, Mirpur-10 Branch has created special image to the people as a more reliable bank. People believe that if they keep their money in the bank it will be more secured than other banks.

THREATS

   Rules and regulation: Rules and regulation of Bangladesh Bank defers with Islami banking system. So they have to face various problems to operate their activities according to the Islamic Shariah.

   Lower salary structure: Now many of the Banks are hiring young talent and expertise employees with higher remuneration where IBBL, Mirpur-10 Branch could not hire skilled manpower because of lower salary structure compared to other banks.

   Islami banking system introduced by conventional banking: Few other conventional banks have opened their Islamic Banking Branch.

12^th Finding

Objectives of Islami Banks Bangladesh Limited (IBBL)

The main object of the Islami Bank Bangladesh Limited (IBBL) had been to offer an interest free banking system in the financial market. Apart from that, the bank started its operation in the country with a view to realizing the following objectives.

      To establish a partnership relationship with customers and to eliminate the idea of the debtor-creditor relationship of traditional banks.

      To establish welfare oriented banking system;

      To mobilize savings towards productive sectors;

      To invest on profit and risk sharing basis;

      To invest to those businesses sectors that are found legal from the religious point of view.

      To accept deposits on profit and loss sharing basis.

      To create employment opportunities by investing savings towards prospective economic sectors.

      To extend banking services towards the poor, helpless and low-income group of people in the society in order to uplift of their standard of living.

      To contribute to establishment of a society by equitable distribution of wealth

      To establish justice in trade and commerce in the country;

      To develop morals among the people and to establish the shariah in the field of trade and commerce; And;

      To render services for the economic development of the nation.

      To contribute towards establishment of an Islamic Economic System in the Country.

Recommendation

      IBBL, Mirpur Branch should hire more employees.

      IBBL should recruit more female employees to encourage/deal with the woman business promoters.

      Separate customer service section should be opened at every/busy branches.

      The Deposit Vouchers should be updated / Posted at once to reduce the odd situations.

      IBBL should provide ‘One Stop Services’ for the clients.

Conclusion

Islami Bank Bangladesh Limited provides services to the nation. Its economic effect on the economy made our national economy stronger.

Every banks and financial organization trying to adopt KYC “Know Your Customers” because without knowing customers mind, no banks, or organization exists in the market in the end. So here we have to find out the customers level of satisfaction in Islami Bank Bangladesh Limited and if they are not satisfied then what should be done by the bank. To know IBBL customers it is needed to talk with not only the account holders but also who taken investment from the bank. From beginning it was seems to me that customers are satisfy with the bank service but it was not true because there are some customers who had very bad and negative impression on bank and its service specially on General banking and Investment because it takes too much time some cases. The most basic objectives of the report are to find out the customers satisfaction level and to find out the satisfaction from the attached survey questions.