Foreign Exchange Operations of Shahjalal Islami Bank Limited

Background:

Bachelor of Business Administration (BBA) program consists of integrated theoretical and practical method of teaching. In fact, practical orientation with day-to-day activities of an organization is one of the most important parts of BBA program.

As I am doing my internship program in Shahjalal Islami Bank Limited (SJIBL), “Motijheel Branch” it was easy for me to fulfill this purpose.

The paper will deal with the topic of “Foreign Exchange Operations of Shahjalal Islami Bank Limited”. On the basis of my practical experience, I have prepared this report and I have tried my best to relate the theoretical knowledge with the practical work situation.

Justification of the Study:

Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Shariah) and its practical application through the development of Islamic economics. Shariah prohibits (Haraam, forbidden) the payment or acceptance of interest (Riba, usury) fees for the lending and accepting of money respectively, for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principles. It is motioned in the Holy Qur’an, “But Allah has permitted trade and has forbidden interest.” (Sura Baqara, Chapter 2, Verse 275)

The best example of Islamic Banking has been set by the Malaysia government. In Bangladesh, though the Islamic banking is introduced for a long period, but the perfect example of Islamic banking is not yet available. In this context, it is a great chance to observe practically the difference between the Islamic banking and conventional banking.

Objectives of the Study:

The primary objective of this report is to get acquainted with the banking business operation of an Islamic bank. The specific objectives of the report are:

• To submit a report, for fulfillment of my BBA practicum.
• The main objective of this report is to focus on “Foreign Exchange Operations of SJIBL”
• To make a study of the facts in order to arrive at certain conclusion about Foreign Exchange Operations.
• Critically analysis the functions and operations of Foreign Exchange Operations of the organization of SJIBL.
• To acquire an in depth understanding of the functions of Foreign Exchange Operations department.

Scope of the Study:

The focus of the report will be on Foreign Exchange Operations areas of Shahjalal Islami Bank Limited.

Methodology of the Study:

To meet the objectives of the study, I realized that a single method would not be effective. Formal & oral discussion, direct observation, questioning clients & printed papers of the Bank were found to be useful. And as I am working there so it was easy for me collect those. To collect the necessary and meaningful information, the following methods were applied:

Data Collection:

The report was fully investigative in nature. Data have been collected from two sources; primary and secondary sources.

 Primary Sources:

• Face-to-face conversations with the respective colleagues and staffs of the Branch.
• Practical work experience.
• Relevant file study.

Secondary Sources:

1. Annual Report of Shahjalal Islami Bank Limited.
2. Website of Shahjalal Islami Bank Limited.
3. Different ‘Procedure Manual’, published by Shahjalal Islami Bank Limited.
4. Desk report of the related department
5. Foreign Exchange Statement of SJIBL

Limitation of the Study:

1. In preparing this report, I faced some unavoidable problems. Due to this problems, in-spite of my maximum efforts their may be some lacking or miss-reading data. These limitations are:
2. Lack of experiences has acted as constraints in the way of meticulous exploration on the topic.
3. Lack of current information
4. Shortage of time for preparing the report in order.
5. The study was conducted mostly on secondary data.

Synoptic View of the Study:

This report is divided into six chapters to show the different aspects of the study in a systematic way. As this is the first chapter, it includes the introductory part like- background, justification, objective, scope, methodology, limitations. In the second chapter, I have shown the bank’s overall position in present time which includes the company’s brief description, background, vision, mission, strategy, nature and legal aspect, management system, products and services, future outlook etc.

Chapter three deals with the Foreign Exchange Operations activities of the bank which includes any instrument drawn, accepted, made or issued under clause (13), Articles 16 of the Bangladesh Bank Order,1972. All deposits, credits and balances payable in any foreign currency and draft, travelers cheque, letter of credit and bill of exchange expressed or drawn in Bangladeshi currency but payable in any foreign currencies. In chapter four, SWOT analysis along with my finding, recommendation, and conclusion are available.

Introduction:

Shahjalal Islami Bank Limited (SJIBL) is a commercial bank. The commercial banks are the heart of our financial structure since they have the ability to co-operate with the Bangladesh Bank to accelerate the money supply of the nation and thus create additional purchasing power. These characteristics set commercial banks apart from other financial institution. By lending and investing money and by transferring funds throughout the nation, even between countries, they make possible a more complete utilization of resources of the nation. Although banks create no new wealth, their lending, investing, and related activities facilitate the economic process of production, distribution and consumption pattern of the economy.

Overview of Islamic Banking Industry:

At birth, Bangladesh inherited an interest based banking system, which was introduced here earlier when the country was a part of British Colony. On the other hand, Islamic banking was successfully tried in Egypt; after the Mit Ghamar Model, Naser Social Bank was in the process of establishment. During the seventies, Islamic Development Bank (IDB) and a number of Islamic banks at national levels were established in the Islamic world. At home, the Islamic groups were vigorously working for adoption of Islam as the complete code of life. They found Islamic banking in ready form of immediate introduction. Two professional bodies Islamic Economics Research Bureau (IERB) and Bangladesh Islamic Bankers Association (BIBA) were taking practical steps for imparting training on Islamic Economics and Banking to a group of bankers and arranging some national and international seminars and workshops to mobilize local and foreign people and attract investors to come forward to establish Islamic banks in Bangladesh. Their professional and right-thought activities were reinforces by a number of Muslim entrepreneurs working under the aegis of Muslim Businessman Society (MBS).

The body concentrated mainly in mobilizing equity capital for the emerging Islamic bank. Due to continuous and dedicated work of the above groups and individuals and active support from the Government, Islamic banking could be established in early eighties. Islamic banks have been operating in Bangladesh for about one and half decade alongside with the traditional banks. Like any other traditional commercial banks, they do mobilize deposits and produce loans. But their modes of operation, based on Shariah, are different from the other traditional commercial banks.

Role of Bangladesh Bank in Promoting Islamic Banking in Bangladesh:

Though there is no complete Islamic Banking Act for controlling, guiding and supervising the Islamic banks in Bangladesh, some Islamic banking provisions have already been incorporated in the amended Banking Companies Act, 1991 (Act No. 14 of 1991). Bangladesh Bank did not set up any separate Department at its Head Office to control, guide and supervise the operation of the Islamic banks. Inspection and supervision of the Islamic banking operations are conducted by the Bangladesh Bank as per the general guidelines framed for the conventional banks. So, ensuring implementation of Shariah principles in the Islamic banks are being conducted by their own Shariah Councils. The role of Bangladesh Bank in controlling, guiding and supervising the Islamic Banks in Bangladesh in accordance with Islamic Shariah is very minimal. In observing the Shariah implementation status of the Islamic banks, Bangladesh Bank examines only the report of the respective banks’ Shariah Councils.

However, the inspectors and supervisors of Bangladesh Bank are not equally familiar with the technicalities of the different operational methodologies of the Islamic banking. This is because of the fact that there is no separate Department to look into this important matter. According to International Journal of Islamic Financial Services Vol. 2 No.1, a committee of experts set up by the Governors of Central Banks and Monetary Authorities of the OIC countries examined the whole range of relationships between the Central Banks and the Islamic Banks and submitted a report in 1981 on the Promotion, Regulation and Supervision of Islamic Banks. The report highlighted the need to provide for central bank assistance to the Islamic banks on a basis compatible with the Shariah.

Theoretical Basis and Business Practice of Islamic Banking:

From the viewpoint of Islamic Shariah, in order to be justified Islamically, the banking system has to avoid interest. Consequently, financial intermediation in Islamic banking between the bank and the client takes place as a partner rather than a debtor-creditor. The financial activities of modern conventional banks are based on a creditor-debtor relationship between depositors and bank on the one hand and between the borrower and the bank on the other. Interest is regarded by conventional banks as the price of credit reflecting the opportunity cost of money. As interest is prohibited in Islam, commercial banking in an Islamic framework could not be based on the creditor-debtor relationship. The other aspect of the theoretical basis of Islamic banking is that the interest free bank is not risk free. This principle is applicable to two main factors of production, i.e. labor and capital. According to this principle,

No payment is allowed to labor, unless it is applied to work, no reward for capital should be allowed, unless it is exposed to business risk. Organizational Overview:

Brief History:

Shahjalal Islami Bank Limited is named after the name of a saint Hajrat Shahjalal (r) who dedicated his life for the cause of preaching Islam in the east-north part of the subcontinent. It is a Shariah based commercial bank in Bangladesh, was incorporated as a public limited company  on 1^st April, 2001 under Companies Act 1994.The bank commenced commercial operation on 10^th May, 2001 by opening its first branch  i.e. Dhaka Main Branch at 58, Dilkusha, Dhaka obtaining the license from Bangladesh Bank, the Central Bank of Bangladesh. Its corporate head office is situated at 10, Dilkusha C/A, Jibon Bima Bhaban, Dhaka-1000, Bangladesh.

Vision of SJIBL:

To be the unique modern Islami Bank in Bangladesh and to make significant      contribution to the national economy and enhance customer’s trust & wealth, quality investment, employees’ value and rapid growth in shareholders’ equity.

Mission of SJIBL:

• To provide quality services to customers.
• To set high standard of integrity.
• To make quality investment.
• To ensure sustainable growth in business.
• To ensure maximization of shareholders’ equity.
• To extend our customers innovative services acquiring state-of-the-art technology blended Islamic principles.
• To ensure human resource development to meet the challenges of time.

Strategies of SJIBL:

1. To strive for customers best satisfaction & earn their confidence.
2. To manage and operate the bank in the most effective manner.
3. To identify customers’ needs and monitor their perception towards meeting those needs.
4. To review and update policies, procedures and practices to enhance the ability to extend better services to the customer.
5. To train and develop all employees and provide them adequate resource so that the customer needs are reasonably addressed.
6. To promote organizational efficiency by communicating company plan, policies and procedures openly to the employees in a time fashion
7. To cultivate a congenial working environment.
8. To diversify portfolio both the retail and wholesale markets.

Nature and Legal Status of SJIBL:

Organizational Structure:

There are different wings to consist the organizational structure of SJIBL. They are as follows:

1. Board of Directors
2. Board Committees
3. Executive Committees
4. Policy Committees
5. Management Team

Board of Directors:

There is a board of Directors of 15 members in the bank. The board of Directors is the apex body of the bank. It appears like this-

Name of the Board of Directors:

Management Hierarchy:

Policy Committee:

Al matters relating to the principles, rules and regulation, ethics etc. for operation and management of the bank are recommended by the committee to the board of directors.

Products and Services of SJIBL:

The bank is managed by a team of professional executives and officials having profound banking knowledge and experience in different sectors management and operation of banking. During the short span of time SJIBL so far introduced a good number of attractive deposit products to broaden the resources base and also investment products to deploy the deposit products. SJIBL always try to introduce a wide verity of attractive deposit, investment and services for suiting taste and requirement of the client.

Products:

Bank means mobilizing fund from surplus unit and deployment of fund for deficit unit. SJIBL mobilize its fund from surplus unit through different types of deposit schemes and deployment this fund for deficit unit through various investment schemes. So the main products of SJIBL are different kinds of deposits and investment schemes.

Deposit Scheme:

Deposit is the “life-blood” of a bank. Bank has given utmost importance in mobilization of deposits introducing a few popular and innovative schemes. The mobilized deposits were ploughed back in economic activities through profitable and safe investment.

This type of deposit schemes of SJIBL are:

1. Mudaraba Monthly Income Scheme
2. Mudaraba Double/Triple Benefit Scheme
3. Mudaraba Monthly Deposit Scheme
4. Mudaraba Millionaire Scheme
5. Mudaraba Hajj Scheme
6. Mudaraba Housing Deposit Scheme
7. Mudaraba Cash Waqf Scheme
8. Mudaraba Lakhapoti Deposit Scheme
9. Mudaraba Mohor Deposit Scheme
10. Mudaraba Education Deposit Scheme
11. Mudaraba Marriage Deposit Scheme

Other than these deposits schemes SJIBL also operate some traditional deposit schemes these are:

• Al-Wadia Current Deposit
• Mudaraba Saving Deposit
• Mudaraba Short Notice Deposit
• Mudaraba Term Deposit Receipt
• MTDR-Special Scheme
• Mudaraba Foreign Currency Deposit

Investment Schemes:

The special feature of the Investment policy of SJIBL is to invest on the basis of profit loss sharing system in accordance with the tenets and principles of Islamic Shariah. Earning of profit is not only the motive and objective of the bank’s investment policy rather emphasize is given in attaining social good and in creating employment opportunities.

The investment and credit department is very important department of a bank as the money mobilized from ultimate surplus units (Investors) are allocated through this department to the ultimate deficit unit (Borrowers). The success of this department keeps a great influence over the profit of a bank. Failure of this department may lead the bank to huge losses or even to bankruptcy. So, special care should be given to this department.

The bank entertains good investment clients, having credit worthiness and good track record. The bank has different profitable investment projects these are:

•  Mudarabaha
• Bi-Muajjal
• Hire Purchase and Ijara
• Investment Against L/C
• Bill Purchase/Discounted
• Investment Against Scheme Deposit
• Quard
• Others

The bank has got a few investment schemes to provide financial assistance to comparatively less advantage group of people; which are:

• Household Durable Scheme
• Small Business Investment Scheme
• Small entrepreneur Investment Program
• Medium Entrepreneur Program
• Housing Investment Scheme
• Rural Investment Program
• Car Investment Scheme
• Woman Entrepreneur Investment Scheme

Total investment of the bank stood at TK. 32,918.77 million as on 31 December, 2012 as against TK. 20,616.61 million of 31 December, 2011 registering an increase of TK. 12,302.16 million. Mode wise investment portfolio of SJBL as on 31 December, 2012 is given below:

Table: Investment Portfolio Of 2012

Services: 2012

Shahjalal Islami Bank Limited is an industry standard, Islami Shariah and latest technology based modern bank. The bank is equipped with state-of-the-art technology and committed to provide technology based modern banking to its valuable customers. Services provided by SJIBL are:

1. On-Line Banking Services
2. SJIBL VISA Card
3. SMS / Push Pull Service
4. Personnel Management Information Systems (PMIS)
5. SWIFT
6. REUTERS etc.

On-Line Banking:

To provide better services to the valued customers using the latest technology and electronic media competing with other private banks to set and establish full automated, on-line, centralize banking systems interfacing (connecting software) with all delivery channels link, like: ATM (Automated Teller Machine), POS (Point of Sale-Fund Transfer Machine for purchasing at any shop/service center etc.), any branch banking, Home banking, Tele banking, and Internet banking etc.

 SJIBL VISA Card:

Card is considered as a new dimension of product resulting from technological development in the banking arena. In line with our affiliation with VISA International for VISA ATMs and POS, VISA Cards are already introduced.

SMS / Push Pull Service:

This is a service provided by the bank through mobile phone. This new technology based service will helps the bank to attract new customer base. Through SMS or Pull Push service client will be facilitated with cell phone based banking service with a fast secured and economical way.

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. SJIBL has introduced this SWIFT alliance entry system firstly in October 2002 and introduced SWIFT alliance access in October 2003.

Current Position of SJIBL:

Despite changing macroeconomic condition and volatile money market and foreign exchange market SJBL was successfully in achieving much higher than national growth in deposit, investment (loan), export, and import and remittance business. The bank has maintained and achieved strong position in all key areas covering capital adequacy, asset quality, sound management, good earning and strong liquidity. Here shows current position of SJBL in different areas.

Equity:

The Bank’s Equity is divided into two parts i.e. Tier-I and Tier-II capital. Tier-I includes paid-up capital, reserve and retained earnings and Tier-II includes general provision on unclassified investments and exchange equalization account. The authorized capital of the bank is TK. 4,000 million and paid-up capital of the bank is TK. 2,246 million as on 31^st December, 2012. Total equity was TK. 4,069 million as on 31^st December, 2012.

Capital Adequacy:

Total equity of the bank as on 31^st December, 2011 was TK. 3,040.88 million and total equity stood to TK. 4,069.09 on million at 31^st December, 2012, which was 13.81% of the Risk weighted Assets as against the requirement of 10.00%. The core capital was 12.24% of Risk weighted Assets as on 31^st December, 2012 as against requirement of 5%.

Branch Network:

The bank has been operating with a network of 51 branches all over the country. In 2011, the bank has opened 11 new branches. Among these branches, 5 are located in Dhaka and rest of them is in other districts of the country. Here shows zone wise branch distribution of SJIBL:

Table: Zone-wise number of Branches

Human Resources Development:

The Bank always laid emphasis on human resource development. The Bank believes in the factor that helps the banks survive is closely interlinked with the quality of service and satisfaction of the requirements of the client and that directly depends on the qualification and efficiency of the employees. To attract and retain qualified and efficient staff, the Bank has formulated a number of well thought policies for the welfare of its employees, in the form of Gratuity Fund, Social Security Fund, Employees House Building Investment Scheme, Employees Car Financing Scheme, Benevolent Fund & Employees House Furniture Allowance etc. Total number of manpower of the Bank is more than 1,100 now against 878 as on 31^st December, 2012.

Information Technology:

Main objective of the bank is to take care of different economic group of the society and meet their all type of banking requirements stretching its service to the door step of the people with the help of information technology gradually. SJBL is providing customer service through online facilities. SJIBL’s ultimate aim is to enable its respected and valued clients to shop under the same roof. In line with that SJIBL VISA Card, SMS/Push Pull services have already been introduced. Beside these, clients are also being facilitated by the service of REUTERS, SWIFT, and Western Union Money Transfer etc.

Corporate Governance:

The Board of Directors of the bank consists of successful distinguish personalities emerging from area of trade, commerce and industries. The bank conducts its business and operations under the policy, directions and guidelines of the Board. The bank has also a Shariah Council consisting of prominent Faquih, Economists, Lawyers, Bankers to advise and guide the Board and the Management of Shariah matters relating to the business and operations.

Under the able guidance of the Board of Directors and the Shariah council, the professional management team carries out the business operation of the bank, ensuring good governance practicing sound, best corporate and risk management process. The result that was achieved by the bank so far is due to the constant guidance, cooperation and support of the Board and Shariah Council and devoted, dedicated and hard work of the management team and all functionaries of the bank.

Highlights of Performance of SJIBL:

Despite challenging macroeconomic condition and volatile money market and foreign exchange market, SJIBL was successfully in achieve much higher than national growth of deposit, investment(loan), export, import and remittance business.

Income:

Investment Income: Total Investment Income of the bank as at 31^st December, 2012 was TK. 4,428.89 million as against TK. 3071.41 million of the preceding year registering 44.20% growth over last year, which was 83.80% of the total income against 85.58% of 2011.

Non-Investment Income: Total Non-Investment Income of the bank was TK.856.49 million at 31^st December, 2012 against TK. 517.43 million of the preceding year registering 65.53% growth rate over last year, which was 16.20% of the total income compared to 14.42% of 2011.

Expenditure:

Profit Paid on Deposit: Bank distributed profit of TK. 2,962.40 million among the Mudaraba depositors in the year 2008 against TK. 1960.02 million in the year 2011 which is 66.89% of the Investment Income earned from deployment of Mudaraba fund and 85.23% of total Expenditure of 2008 against 86.20% of 2011.

Operating Expenses: Total operating expenses as on 31st December, 2012 was TK. 513.19 million against TK. 313.82 million of 2007, which was 14.77% of the total expenditure of the year 2012 against 13.80% of 2011.

Future Outlook of SJIBL:

“Business policy and six years perspective plan” of the Bank from 2007 to 2012 has been formulated to attain the financial strength, sustainable growth and operational efficiency. To protect the interest of the stakeholders, bank has formulated the six years perspective plan for consolidation of the growth and profitability. During the period of perspective plan, Bank has the main objective to attain the height operational excellence and consolidation to turn the bank into a dynamic Islamic Bank in the country. During the period from 2007 to 2012, The Bank has the plan to regain its excellence in all the core areas of operations and business. During this period, new and potential avenues of Business in all areas of operation to be explored and expanded through the network of existing 26 branches and more new branches to be opened gradually during the plan period subject to permission of Bangladesh Bank.

The financial position and overall achievement of the Bank shall be reviewed and evaluated in the light of the Annual Budget and Business plan on a quarterly basis in every year. Necessary change, adjustment, modification & re-allocation shall be made after periodical review keeping the real scenario in view. All out efforts shall be made for promotion and improvement of quality-investment through effective supervision, control, follow-up and monitoring in order to lessen the quantum of over dues, to arrest further over dues and to recover, regularize the over dues and declassify the classified investments. Adequate care & caution to be exercised for compliance with 05 core risks as per Bangladesh Bank’s Policy/instructions during the planned period. Asset-Liability of the Bank shall be managed effectively through ALCO to avoid Liquidity Risk, profit rate risk, operational risk and other risks. SJIBL is looking forward to see such a bright day in the years to come.

Social Welfare Activities of SJIBL:

With a view to proving financial assistance to the poor and needy people of the society and also for the welfare of the community, Bank has established “Shahjalal Islami Bank Foundation” the foundation among others has also objective to provide health care, relief & rehabilitation, education, dawa, distribution of winter cloths during the winter etc.

At present “Shahjalal Islami Bank Foundation” has a planning to establish the following projects soon:

 Shahjalal Islami Bank International School & College Shahjalal Islami Bank Hospitals. 

2.11 Significant Accounting Policy:

Foreign Currency Translations: The transactions in foreign currencies are converted into equivalent Taka currency using the ruling exchange rates on the dates of such transactions. At the balance sheet date related assets and liabilities are converted to Taka using exchange rates prevailing on that date. 

Basic Earnings per Share: This has been calculated by dividing the basic earnings by the weighted average number of ordinary shares outstanding during the period as per IAS 33 Earnings per Share”. Diluted Earnings per Share is not required to be calculated for the year, as there exists no dilution possibilities during the year. 

Statement of Liquidity: The liquidity statement of assets and liabilities as on the reporting date has been prepared on residual maturity term as per following basis;

1. Balance with other banks and financial institutions, investment in securities are on the basis of their maturity term.
2. Investments (Loans & Advances) are on the basis of their residual maturity term.
3. Fixed assets are on the basis of their useful life.
4. Other assets are on the basis of their adjustment.
5. Financing (borrowing from Bangladesh Bank as per their maturity
6. Deposit and other accounts are on the basis of their maturity term and behavioral past trend.
7. Other long-term liability on die basis of their maturity term.
8. Provisions and other liabilities are on the basis of their settlement.

Introduction:

Foreign Exchange means foreign currency and it includes any instrument drawn, accepted, made or issued under clause (13), Article 16 of the Bangladesh Bank Order, 1972. All deposits, credits and balances payable in any foreign currency and draft, travelers cheque, letter of credit and bill of exchange expressed or drawn in Bangladeshi currency but payable in any foreign currencies.

Bangladesh Bank issues Authorized Dealer (AD) license by observing the bank’s performance and also the customers associated with the bank for conducting foreign dealings. As Motijheel branch is a new one so this branch doesn’t have AD license but through another Motijheel branch perform its operation.

Banks play a vital role by minimizing the risk of two parties, namely buyer and seller. In fact without the help of banks we cannot think about a congenial international trade environment. The special feature of the Investment policy of Shahjalal Islami Bank Limited is to invest on the basis of profit loss sharing system in accordance with the tenets and principles of Islamic Shariah. Earning of profit is not only the motive and objective of the bank’s investment policy rather emphasize is given in attaining social good and in creating employment opportunities.

Now the question comes how banks help international trade. We know that in a local trade there is a chance to know about each other. But in international trade the involved parties stay two distant places. For a buyer the following risks are involved:

1. Risk of non-delivery of goods.
2. Risk of receiving sub standard goods.
3. Risk of fraud in goods.
4. For the seller the following risk is involved
5. Risk of non-payment.

Function of Foreign Exchange:

• Import
• Export
• Remittance

The achievement of Shahjalal Islami Bank in the area of foreign exchange business has been quite phenomenal. The Bank has been providing services to import and export trade and for repatriation of hard-earned foreign exchange of Bangladeshis living and working abroad and has, by now, consolidated its position in these areas.

Import Section:

In case of Import, the importers are asked by their exporters to open a letter of credit, so that their payment against goods is ensured.

Letter of Credit (L/C): Letter of Credit (L/C) is a payment guarantee to the seller by the buyer’s bank. It is in fact, a Credit Contract whereby the buyer’s bank is committed (on behalf of the buyer) to place an agreed amount of money at the seller’s disposal under some agreed conditions. If the conditions of the credit do not require for presentation of specified documents, it is called Clean Credit. On the contrary, if the presentation of specified documents is obligatory, the credit is called a Documentary Credit.

Buyers and sellers enter into contracts for buying and selling goods/ services and the buyer instructs his bank to issue L/C in favor of the seller. Here bank assumes fiduciary function between the buyer and seller.  SJIBL deals with two types of L/C. These are:

Sight L/C

Deferred L/C.

Forms of Letter of Credit (LC):

Revocable L/C: If any letter of credit can be amendment or change of any clause canceled by consent of the exporter and importer is known revocable letter of credit. A revocable letter of credit can be amended or canceled by the issuing bank at any time without prior notice beneficiary. It does not constitute a legally binding undertaking by the bank to make payment. Revocation is possible only until the issuing bank or correspondent has honored the document. Thus a revocable credit does not usually provide adequate security for the beneficiary.

Irrevocable L/C: A documentary credit takes many different forms. The first decision i.e. the choice of the basic form of the credit is usually made at the time of negotiation between the seller and the buyer. The terms of the credit will be determined in detail when the buyer instructs his bank to issue the credit. At this stage the seller, on being informed by the bank regarding the credit terms, should ensure whether the credit terms are agreeable and, if necessary, demand from the buyer a more precise wording of the credit terms or the necessary amendments. It is in the interest of both the parties to the contract that the individual terms of the credit transaction are clearly and correctly stipulated. This facilitates the examination of the documents at the time of utilization.

The following parties are involved to a letter of credit, namely:

Obligatory Parties are:

• Importer/ Buyer/ Applicant
• Opening Bank/ Issuing bank
• Advising Bank/ Notifying Bank
• Exporter/ Seller/ Beneficiary

Optional Parties (In case of need) are

• Negotiating Bank
• Confirming Bank
• Paying/ Reimbursing bank

An importer is required to have the following formalities to import the goods through SJIBL:

• An account with Islami Bank Bangladesh Ltd. FEX.  Branch
• Import Registration Certificate (IRC)
• Tax Paying Identification (TIN) Number
• Pro-forma Invoice/ Indent
• Membership Certificate
• LCA (Letter of Credit Application) form duly attested
• One set of IMP Form
• Insurance Cover note with money receipt
• Others

Retirement of Documents:

On receipt of the cost memo/lodgement voucher the importer pays the required amount. This stage is known as ‘Retirement of Import Bills’. Bank will prepare the vouchers to reflect the amount of cost and other charges from the importer, adjustments of margin and PAD Account. Thereafter the documents may be handed over to the importer against proper acknowledgement after certification and endorsement.

Delivery of Shipping Documents:

If the bill is to be retired by debit to the importer’s account, the shipping documents are handed over to the importer or his duly authorized clearing and forwarding agent for clearance of the goods from customs at his own account.

MPI (Pledge) Facility: In case MPI (Pledge) facility is given, the branch should itself arrange or through debiting the account of client, clearance by bank’s nominated Clearing & Forwarding Agent of the goods on payment of import duty, sales tax etc. and store the goods at the bank’s go down subject to release on production of Delivery order as per arrangement.

TR Facility: Sometimes documents are also handed over to the importer against T.R. for clearance of the goods on the clear undertaking that the importer will hold the goods or the sale proceeds thereof in trust with him at the disposal of the bank till the entire facility is liquidated.

Coordination between Investment and L/C Departments: As per our existing system, imports bills are held under the custody of branches L/C Department but bank finance for opening of L/Cs is handled by Investment Administration Department. After completing of TR/MPI facilities, documents are delivered to the importers by L/C Department. In order to make a full proof system for controlling of import documents, branches should observe the following procedures while releasing import documents retired against T.R. or MPI facilities.

• Investment Department under authorized signatures must issue a memo advising the L/C Department. To release the documents after full adjustment of bank dues and/or TR/MPI facilities, as per prescribed formats.
• The Investment Department must ensure that the necessary vouchers have been passed relating to the release of Import Bills against full payment/TR/MPI facilities under authorized signatures. The accounting entries are to be passed and relative tickets prepared as per instructions given in annexure 1
• The L/C Department must ensure that necessary approval has been obtained while releasing the import documents against TR or MPI facilities.
• L/C Department will forward the documents to Bank’s approved C&F agent, as per standing instructions, with necessary instructions regarding payment of duty and other taxes and the mode of transportation from the port. A copy of he forwarding letter should be endorsed to Investment Department for their record and follow up. Cases where goods are to be cleared locally, documents should be delivered to local approved C&F agents with written permission of branch manager.
• The accounting entries are to be passed and relative tickets prepared as per instructions given in annexure 1

Payment of Import Duty Sales Tax etc: If the bank, on behalf of the importer, clears the goods, the MPI Account is further debited with the amount of import duty, sales tax etc. and other clearing charges including go down rent etc. Delivery of the goods is made in one or more installments through Delivery Orders issued by the branch against cash payment by the importer.

IMP Procedure: All payments for imports into Bangladesh are required to be reported to Bangladesh Bank on IMP form. The importer submits the IMP form in duplicate duly filled in and signed by him or by his authorized agent.

Remittance by the Branch: If the shipping documents concerning the import are received by the branch directly from the foreign correspondent under irrevocable LC, the branch can approve the remittances if otherwise found in order and fully documented and covered by a valid LCA form. Otherwise prior approval of Bangladesh Bank is to be obtained on IMP form on arrival of the goods into Bangladesh, before effecting remittance to the foreign supplier. In case of import by post, the branches may make remittance against the import without prior approval of Bangladesh only if the post parcels are addressed directly to the branch. In other case prior approval on form IMP is required before effecting remittances.

The relative original copy of IMP form is required to be certified by the branch accordingly in the space provided for the purpose along with a copy of Invoice duly certifying the amount remitted and submitted to Bangladesh Bank with usual Monthly Return (Summary statement S-1, S-2 etc. as the case may be) supported by E-2 schedule. The other copies are to be retained by the branch for disposal in future according to Exchange Control Regulations.

Disposal of IMP Forms: The branch will obtain invoices in duplicate and certify these as usual. After recording in the IMP form the particulars of the remittance the original copy of the IMP form along with a copy of the certified invoice should be forwarded to the Bangladesh Bank with usual monthly returns. The branch should retain the duplicate copy of IMP form. Subsequently, when the importer submits the exchange control copy of the Bill of Entry/Custom’s Certified Invoice, its particulars should be matched and checked with those in the IMP form and invoice to see that the merchandise for which remittance was made had been duly received in Bangladesh.

Bill of Entry for Consumption: Subsequently, when the importer submits the exchange control copy of the Bill of Entry/Custom’s Certified Invoice, its particulars should be matched and checked with those in the IMP form and invoice to see that the merchandise for which remittance was made had been duly received in Bangladesh.

Other copies of the IMP forms are to be filed in the relative file for the importer along with other import documents. In case of imports on Govt. Account the IMP form is marked with bold letter “G”.

Returns & Reports: On the last working day of the month, the returns of bills lodged during the month should be sent to Bangladesh Bank along with original copy of the IMP form. The second copy should be filed with the Bill of Entry after clearance of goods. The branch will also retain the third copy. The 4th copy should be sent to Bangladesh Bank on failure of the importer to submit the Bill of Entry within time.

Parties of a Letter of Credit:

Applicant for the Credit

The importer or buyer on whose request and on whose behalf the letter of credit is opened is called the applicant.

Issuing Bank/Opening Bank

The bank that opens a letter of credit, at the request of the importer, is known as Issuing Bank. The issuing bank is the buyer’s bank and is also called opening bank.

Beneficiary

The party, normally the supplier of the goods, in whose favor letter of credit is opened, is called beneficiary. The seller, after shipping the goods as per terms of the credit, presents the documents to negotiating bank/confirming bank for negotiation.

Advising Bank

The bank in the exporter’s country, usually the foreign correspondent of the importer’s bank, through which letter of credit is advised to the supplier is called the ‘advising bank’.

Confirming Bank

If the advising bank also adds its own undertaking to honor the credit while advising the same to the beneficiary, he becomes the confirming bank. The confirming bank, in addition, becomes liable to pay for documents in conformity with the LC terms and conditions.

Negotiating Bank

The bank, which negotiates the bill (draft) of the exporter drawn under the credit, is known as negotiating bank. If the advising bank is also authorized to negotiate the bill (draft) drawn by the exporter it itself becomes the negotiating bank.

Contents of the Letter of Credit:

In general L/C contains the following information.

• Name of the buyer: Who is also known as the accounted since it is for his account that the credit has been opened?
• Name of the seller: Who is also known as the beneficiary of the credit?
• Moment of the credit: This should be the value of the merchandise plus any shipping charge intent to be paid under the credit.
• Trade terms: Such as FOB and CIF
• Tenor of the draft: Which is normally dependent upon the requirements of the buyer?
• Expiration Date: which is specified last date when documents be presented.

Letter of Credit on Deferred Payment Basis:       

Subject to compliance with other conditions laid down in this chapter and the current IPO, import LCs may be opened on deferred payment (DA) basis in the follows cases:

• Capital machinery up to 360 days usance basis;
• Industrial raw materials for own use of industrial importers (including back-to-back imports discussed later in the section) on up to 180 days usance basis.
• Import of coastal vessels including oil tankers and ocean-going vessels including those procured for scrapping on up to 360 days usance basis;
• Import of agricultural implements and chemical fertilizer on up to 180 days basis;
• Import of life saving drugs on up to 90 days usance basis;

For import on deferred payment basis, the price must be internationally competitive and usance interest, if any, should not be higher than the LIBOR for the corresponding period or the rate prevailing in the currency of the country of the supplier.

Instructions regarding opening of import L/Cs on longer usance terms against supplier’s credits arranged by industrial enterprise in the private sector as per general or specific BOI approval are contained in chapter 23 of the ‘Guidelines for Foreign Trade Transactions’ of Bangladesh Bank.

Export Section:

Foreign Exchange Regulation Act, 1947 nobody can export by post and otherwise than by post any goods either directly or indirectly to any place outside Bangladesh, unless a declaration is furnished by the exporter to the collector of customs or to such other person as the Bangladesh Bank (BB) may specify in this behalf that foreign exchange representing the full export value of the goods has been or will be disposed of in a manner and within a period specified by BB.

Back-to-back L/C: It is a secondary L/C (New Import L/C) opened by the seller’s bank based on the original L/C (Master L/C) to purchase the raw materials and accessories for manufacturing of the export product (s) required by the seller. Under the ‘Back to Back’ concept, the seller as the Beneficiary of the master L/C offer it as a ‘security’ to the advising Bank for the issuance of the second L/C. The beneficiary of the Back-to-Back L/C may be located inside or outside the original beneficiary’s country. In case of a Back-to-Back L/C, the bank takes no cash security (margin). Bank liens the Master L/C and the drawn bill are a Usance/ Time bill. 

Figure: Back-to-Back L/C Procedure

SJIBL Motijheel Branch, following papers/ documents is required for opening a back-to-back L/C: Master L/C Valid Import Registration Certificate (IRC) and Export Registration Certificate (ERC) L/C Application and LCAF duly filled in and signed Proforma Invoice or Indent Insurance Cover Note with money receipt IMP Form duly signed

Export L/C: The other type of L/C facility offered by this branch is Export L/C. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and wove), jute, jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters exports to foreign countries. Garments Sector is the largest sector that exports the lion share of the country’s export. Bangladesh exports most of its readymade garments products to USA and European Community (EC) countries. Bangladesh exports about 40 % of its readymade garments products to USA. Most of the exporters who export through this branch are readymade garment exporters. They open L/Cs in this branch to export their goods, which they open against the import L/Cs opened by their foreign importers. The export trade of the country is regulated by the Imports & Exports (Control) Act, 1950. There are a number of formalities that an exporter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated as follows:

 Export Registration Certificate (ERC): The exports from Bangladesh are subject to export trade control exercised by the Ministry of Commerce through Chief Controller of Imports & Exports (CCI&E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI&E and holds valid ERC. The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP (Export) Forms and others documents connected with exports.

The EX Form: After having the registration, the exporter applies to SJIBL, Foreign Exchange Branch with the Trade License, ERC and the Certificate from the concerned Government Organization to get the EXP Form. If the branch is satisfied, an EXP Form is issued to the exporter.

An EXP Form usually contains the following particulars:

• Name and address of the Authorized Dealer;
• Particulars of the commodity to be exported with particulars and code no;
• Country of destination;
• Port of destination;
• Quantity;
• L/C value in foreign currency;
• Terms of sale;
• Name and address of Importer/ Consignee;
• Bill of Lading/Railway Receipt/Airway Bill/Truck Receipt/Post Parcel Receipt no. and date;
• Port of Shipment/Post Office of Dispatch;
• Land Custom Post;
• Shipment Date;
• Name of the Exporter with address;
• CCI & E’s registration number and date;
• Sector (public or private) under which the exporter fails.

1. Securing The Order: Upon registration, the exporter may proceed to secure the export order. This can be done by contracting the buyers directly through correspondence.
2. Signing Of The Contract : While making a contract, the following points are to be mentioned: a)  Description of the goods; b)  Quantity of the commodity;  c)  Price of the commodity;  d)  Shipment;  e)  Insurance and marks;  f)  Inspection, and g)  Arbitration.
3. Procuring The Materials: After making the deal and on having the L/C opened in his favor, the next step for the exporter is set about the task of procuring or manufacturing the contracted merchandise.
4. Registration of Sale: This is needed when the proposed items to be exported are raw jute and jute-made goods.

Shipment of Goods : The following documents are normally involved at the stage of shipment:

• EXP From,
• Photocopy of registration certificate,
• Photocopy of contract,
• Photocopy of the L/C,
• Customs copy of ERF Form for shipment of jute-made goods and EPC Form for raw jute,
• Freight certificate from the bank in case of payment of the freight if the port of lading is involved,
• Railway receipt, berg receipt or truck receipt.

Payment Terms:

The terms of payment i.e. when and how payments are to be received by the exporters are incorporated in the sales contract as per mutual agreement between the buyer and the seller.

These are normally the following:

• Advance Payment
• CAD (Cash against Document)
• Consignment Sales
• Trust Receipt
• Documents against acceptance (D.A. Bill)
• Documentary against Payment (D/P
• Documentary Usance Bill
• Letter of Credit

Receiving the LC and Advising It to the Beneficiary:

On receipt of the LC the steps to be taken are the following: The branch should enter full particulars of the LC in the LC Advising Register allotting separate serial number for each LC. Serial number of the Register should be recorded on the left hand top corner of the printed LC advising form or on the original LC itself as the case may be In case of cable LC, on receipt of mail confirmation update the record by noting the particulars in the LC Advising Register Particulars of all amendments (if any) are also to be recorded in the same register before advising the same to the beneficiary If the credit is an Air Mail LC “Hand-on-credit”, addressed to the beneficiary, dispatch the same in original to the beneficiary under cover of the Bank’s forwarding letter either by registered mail or through messenger, as may be convenient, retaining a photo copy for the bank’s record.

The Head Office, before approving the confirmation of the LC, will ensure that the issuing bank is our correspondent and LC confirmation limit has already been sanctioned for this correspondent after proper verification of the credit standing

Branches should neither forward any case to Head Office for approval for adding confirmation to L/Cs issued by a bank which is not our correspondent or in respect of revocable LC; nor should they add any confirmation to an LC without prior approval of the competent authority in the bank. Any amendment to an LC received from Issuing Bank should be advised to the beneficiary promptly. Only request of Issuing bank for any amendment should be accepted.

Realization of Advising/Confirmation Charges:

Branch should recover LC advising commission from the beneficiary. If the beneficiary is the bank’s client the charge is debited to his account and if the beneficiary is not our client, the charge will be cash. Charges should be recovered either from the beneficiary or the opening bank depending on the terms of the LC.

Amendments of LC: Amendments of LC may be initiated either by the beneficiary or the foreign buyer through LC issuing bank.

On receipt of a request for effecting amendment of LC, the branch should proceed as follows:

1. Time stamp the letter/cable/telex requesting amendment of the LC.
2. Take out the work card and LC folder.
3. Verify the signature on amending letter/test number on tested amending telex/cable with Test Key.
4. Review the LC amending letter/cable/telex for their clarity, completeness and conformity with the existing rules and regulation/sale contract, etc.
5. Record all particulars of amendment in the LC Advising Register and all other documents/papers connected with the LC.
6. Obtain Head Office approval in case of amendment of confirmed LC involving amount or expiry date.
7. Prepare LC amendment form and promptly advise the beneficiary and issuing bank.
8. Check and obtain official approval signature before dispatching amendment advice.

Certification by the Branch:

After negotiation of the bill or acceptance of the documents for collection, the branch should complete the certificates in the space provided on the duplicate copies of the EXP Form to the effect that they have negotiated bills/received-shipping documents for collection for the value stated on the form.

When payment is received the branch shall certify on the reverse of the Triplicate copy of the form retained with them and forward it to the Bangladesh Bank with the usual return. The quadruplicate copy will be retained by the branch for record.

Payments to Exporter:

Negotiation/ Purchase of Documents: On negotiation purchase of the export bill, the exporter may be paid the value of the bill after converting the bill amount into Bangladesh Taka at the ruling bill buying rates–OD Sight Export buying rate for sight bill and long bill buying rate for usance bill. Other approved charges of the bank may also be adjusted against the bill amount. If forward cover had been booked with the branch, the conversion should be made at the booked rate of exchange.

Advance against Export Bill:

When shipment is not covered by an LC or the documents are found discrepant even though shipment is made against LC, the export bill is sent to the correspondents for collection. In that case, the bank may give advance to a trust worthy exporter against the security of the export bills ranging up-to 90% of the value of the bill, depending upon the merit of each case. In such cases, bank may also insist on collateral securities, like guarantee from third party or equitable/legal mortgage of property.

As any L/C does not cover the shipment, the Bank should obtain clear instructions from the drawer (exporter) of the bill particularly on the following points:

• DA/DP/Sight Bills
• Noting/Protesting
• Advising fate of the bill
• Realization of Collection charges, interest etc
• Case in need
• Clearance, storage, insurance etc. at destination
• Mode of Presentation of the bill

Foreign Remittance:

On March 24, 1994 Bangladesh Taka was declared convertible for current account international transaction. As a result remittance became more liberalized. SJIBL is very happy to announce to have joined hands with western union system and kushiara and introduce swift service to serve expertise to send money back home quickly from anywhere in the world.

Kushiara:

Kushiara Money Transfer’s a definition of safety and reliability and a popular Money Transfer Company in United Kingdom (U.K.). Kushiara offers “Instant Cash” next day collection from Bank counter at most cities in Bangladesh and “Quick Credit” to beneficiary’s account in all over the Bangladesh.

Payment may be made by bank deposit (Kushiaras account at Barclays Bank) or cheque or bank draft. Please do not send cash through post. We shall process the remittance request and post the customer copy of the remittance form to customers given address after the fund are cleared. The usual times for clearing of cheques require 3-5 working days. The Remittance Form can be downloaded from the website: www.kushiara.net.

Contact with us, ask for exchange rate and know how much you need to pay. Deposit the money to Barclays Bank-Kushiara Financial Services Ltd, A/C No: 20651079 Sort Code: 202178.

Post your Remittance Form along with bank receipt or cheque or draft of Kushiara Financial Service Ltd. 313-317 Commercial Road, London E1 2PS. (for prompt processing initially you may send Remittance Form & Payment Slip to Fax No: 02077903063 

ID Requirements:

Please note that the Government anti money laundering regulations requires us to obtain proof of name & address of remitter in case of transaction over equivalent Euro1000. Further information regarding ID please contact with us.

The following type of ID we require:

1. Certificate copy of Passport or certified copy of Full UK or another EU Driving License
2. Certificate copy of Bank or Building Society Statement or Utility bill (gas, water, electricity) within three month.
3. All transaction is authorized under the money laundering regulation. Kushiara has all necessary licenses to carry out the financial service business it offers.

Western Union:

“Western Union a fast, reliable and convenient way to send a money transfer”

Western Union Financial Services Inc. U.S.A. is the number one and reliable money transfer company in the world. This modern Electronic Technology based money transfer company has earned worldwide reputation in transferring money from one country to another country within the shortest possible time.

Shahjalal Islami Bank Limited has set up a Representation Agreement with Western Union Financial Services Inc. U.S.A. Millions of people have confidence on Western Union for sending money to their friends and family. Through Western Union Money Transfer Service, Bangladeshi Wage Earners can send money quickly from over 280,000 Western Union Agent Locations in over 200 countries and territories world wide- the world’s largest network of its kind, only by visiting any branches of Shahjalal Islami Bank Limited in Bangladesh.

The money sent by your loved ones is very special to you indeed. So, at Western Union, we offer the following benefits:

Reliability:

Our customers have benefited from our electronic money transfer for over 150 years. Each transfer can be tracked electronically to make sure that you receive the money your loved one has sent.

Speed: When your loved one sends you money, within minutes you can receive it in Bangladesh 

Convenience: Bank account is not required!

Just go to a Shahjalal Islami Bank Limited branch anywhere in Bangladesh offering Western Union Money Transfer. Then simply fill a form and collect your money. Shahjalal Islami Bank Limited has 26 such branches all over Bangladesh and Western Union has over 280,000 agent locations across 200 countries and territories.

 Three easy steps to receive your money: 

•  Ones deposit the money at any Western Union Agent location and get a receipt with MTCN.
• He/she then informs to persons for the amount sent (sender name, amount, sending country, receiver name and MTCN).
• Just go to the nearest Shahjalal Islami Bank Branch with a valid identity card. Fill a simple form and receive the money.

SWOT Analysis of SJIBL:

SWOT stands for Strength, Weakness, Opportunity, and Threat. The SWOT Analysis of SJIBL is given below:

Strengths of SJIBL:

• Develop Management System: SJIBL has better management system which is always responsible for better service.
• More found for Investment: For adequate financial ability they can provide loan to the more investment clients.
• Straightforward and Reliable Employees: all of the employees of SJIBL are sincere reliable. They are always devoted themselves to the works for better customer service.
• Shahjalal Islami Bank Limited has already achieved a goodwill among the clients that’s helps it to retain valuable clients.

Weaknesses of SJIBL: 

• SJIBL has lack of ATM booth.
• Credit proposal evaluation process lengthy.
• No substantive use of annual confidential report to reward or to punish employee. Hence employee becomes in efficient.
• Server problem

Opportunities of SJIBL:

1. Regulatory environment favoring private sector development
2. Wide banking network
3. Credit card business
4. The bank can provide better customer service.
5. They can offer micro credit business for small business.
6. Many branches can be opened to reach the bank’s services in remote location.

Threats of SJIBL: 

• The common attitude of Bangladeshi clients to default.
• Increased competition in the market for public deposit.
• Market pressure for lowering the interest rate.
• Bangladesh bank sometimes requires private commercial banks to be abide by such rules and regulation which is not suitable every commercial bank.

Findings:

1. Lack of strong monitoring unit.
2. Sometimes the process of information transferring to the management is lengthy.
3.  “Banks deal with documents is not goods” is one of the core principles of conventional banking. However Islamic banking needs to with goods are imposed by Shariah.
4. Bank has limited ATM booths.
5. Lake of central AC for better working environment.
6. Generally investment clients do not come to the Islamic Banks only for Shariah purpose rather for low transaction cost.
7. Lake of training facility of junior officers.
8. Fewer clients for trade business.
9. PC Bank server problem.

Recommendations:

• Proper and sufficient training is required for each and every staff to work with full capability in the best way.
• Proper monitoring is the pre-consideration for good collection. So monitoring unit is required to be efficient enough to collect more deposit.
• Staffs of branches require being sincere enough in their jobs. This will help in banking procedure.
• The brochures of the products and services of the branch can be mailed through the welcome letters along with the status of the customers via courier.
• Interpersonal relationship needs to be built among the employees and superiors.
• Customer must be convinced to use token system, which will help the personnel of the customer service work smoothly.
• Complain of the customers should be decreased on zero level.
• Assurance the accuracy of on line banking.
• Increase the SJIBL’s own ATM booth.
• SJIBL requires resorting to massive image re-engineering in order to capture the public perception to take the lead role in this sector.
• SJIBL’s investment processing should become easier than other conventional banks.
• SJIBL should make its investment schemes more attractive for availing high-return projects.
• SJIBL should consider utilization of rural potentials from both efficiency and equity grounds in the context of the present-day socio-economic conditions of Bangladesh. Strong commitments and stepping up through experiment and implementation of innovative ideas are the appropriate ways to do that.
• SJIBL should deserve immediate attention in the promotion of the image of Shariah based banks as PLS (Profit-loss-sharing)-banks.

Conclusion:

Shahjalal Islami Bank Limited is one of the most renowned banks in the country. SJIBL has introduced a new dimension in the field of innovative and benevolent banking in our country. The bank has successfully made a positive contribution to the economy of Bangladesh with in very short period of time. Its profit is gradually increasing. Therefore, Shahjalal Islami Bank Limited (SJIBL) is trying to establish the maximum welfare of the society by maintaining the principles of Islamic Shariah which is based on “Quran” and “Sunnah”. Profit earning is not the only motive and objective of the bank’s overall policy rather emphasis is given in attaining social good and in creation employment opportunities. Shahjalal Islami Bank Limited (SJIBL) has been established with a view to conduct interest free banking to establish participatory banking instead of debtor-creditor relationship and finally to establish welfare oriented banking through its overall banking operations that would lead to a just society.

I hope SJIBL do more work for socio-economic development besides their banking business. To keep pace with ever-changing uncertain domestic business environment and face the challenges of revised global economic scenario, the bank should be more   pro-active and responsive to introduce new marketing strategy to hold the strong position in home and abroad. For the future planning and the successful operation in its prime goal in this current competitive environment I hope this report can provide a good guideline. I wish continuous success and healthy business portfolio of Shahjalal Islami Bank Limited (SJIBL).