General Banking Activities of Shahjalal Islami Bank Limited

Main purpose of this report is to analysis General Banking Activities, here os an overview of Shahjalal Islami Bank Limited. Other objectives are to know the general banking procedures and to exhibit the consumer banking service and product provided by SJIBL. Report also focus on to know the key financial factors in which the policy of the bank depends on. Finally identify the strengths and weakness of the bank and identify the problems faced by SJIBL. Here also recommend actions that may be necessary to take by SJIBL.

OBJECTIVE OF THE REPORT

• To know the general banking procedures of Shahjalal Islami Bank Ltd.
• Relevant policy, system, theories and practices of banking.
• To identify the strengths and weakness of SJIBL
• To identify the problems faced by SJIBL
• To recommend actions that may be necessary to take by SJIBL
• To exhibit the consumer banking service and product provided by SJIBL
• To know the key financial factors in which the policy of the bank depends on.

SCOPE OF THE REPORT

In our economy there are three types of schedule commercial banks are in operations. They are nationalized commercial banks. Shahjalal Islami Bank has discovered a new horizon in the field of banking area which offers different General Banking, Investments and foreign exchange banking system. So I have decided to study on the topic “General Banking” because the internship program of the University is an integral part of the BBA program.

The report is based on my practical work which I have learned, experienced and done in Shahjalal Islami Bank Ltd. This also provides an opportunity to the student to minimize the gap between theoretical and practical knowledge. Finally this report helps me to know the atmosphere and environment of an organization. Thus report is very rational and significant.

As an Internee of SJIBL I have the access of working on different sectors like credit division, account opening, CIB preparation, and opening of different schemes (DPS, MIS, FDR, MTDR, and MILLIONIER), issuance of different cheque books and some knowledge of cash counter. As banking is a large financial sector, so it is impossible to learn everything of this sector within this short period.

METHODOLOGY OF THE REPORT

This report is basically prepared on the basis of my experiences with SJIBL. The data have been used include both as Primary and Secondary sources

• Source of data collection:

The basic source of data collection based on both primary and secondary which used in the preparation of these report is obtained when i went to SJIBL, Mirpur branch for my internee.

Primary Sources:

• Direct observation of daily operation.
• Discussion with high officials of the Branch.
• Questioning (informal) with concerned persons (Officers & employees)

Secondary Sources:

Internal Sources:

• Banks annual report
• Group Business Principal

External Sources:

• Different books and periodicals related to the banking sector
• Newspaper
• Bangladesh Bank report
• Internet

INTRODUCTION

Shahjalal Islami Bank Limited was established as a public limited company on 1^st day of April 2001 under the company’s act, 1994 for carrying out all kinds of banking activities with the authorized capital of Tk. 2,000.00 million divided into 20.00 million ordinary shares of taka 100 each. The Bank commenced its commercial operation in accordance with interest free Islamic Shariah based commercial bank on the 10^th May 2001 under the group of Bank Companies act, 1991 with the permission of Bangladesh Bank. During last five years SJIBL has increased its service coverage by opening new branches at different strategically important locations across the country.

The Bank was sponsored by a group of local businessman having exposure in RMG, Insurance, Electronics and Education etc. The sponsors have subscribed and fully paid for 9.35825 million ordinary shares of Tk. 100 each amounting to Tk. 935.825 million. The Bank now proposed to increased the paid up capital to TK. 1,872 million consisting of 18.72 million ordinary shares of TK. 100 each by issuing 9.36 million ordinary of Tk. 100 each by way of Initial Public Offer (IPO).

SJILBL’S MARKET SHARE

SJIBL’s Market share of deposits and investments are small. The banking industry of Bangladesh had deposits of Tk. 1,440.16 billion (excluding inter- bank and Government deposits) and loans and advances of Tk. 1,319.60 billion on 2007, shared among 49 banks consisting of 4 NCB’s, 5 specialized banks, 10 foreign banks, 24 private commercial banks and 6 Islamic banks. SJIBL’s customer’s deposits stood at Tk. 10.81 bill and Tk. 6.92 billion in year 2006 and year 2005 respectively. The investments (loans and advances) of SJIBL stood at Tk. 10.59 billion and Tk. 7.15 billion respectively during the same period.

SJIBL held only 0.75%of total market deposits and 0.18% of total market investment (loans and advances) on 31^st December 2005. The growth rate of SJIBL is much higher then that of the overall market growth mainly due to small base effect. The SJIBL customer deposits were increased by 56.33% compared to industry growth of 16.56%.

CORPORATE 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.
• To encourage socio-economic development and financial services to the low income community particularly in the rural areas.

CORPORATE VISION

The vision of SJIBL is to always strive to achieve superior financial performance, be considered as leading Islamic bank by reputation and performance.

• To establish and maintain the modern banking techniques, to ensure the soundness and development of financial system based on Islamic principals and to become the strong and efficient organization with highly motivated professionals, working for the benefit of people, based upon accountability, transparency, integrity in order to ensure stability of financial system.
• Attempt to encourage investment particularly in projects, which are more likely to lead to higher employment.

NATURE OF BUSINESS

The bank is carrying out commercial, corporate, investment and retail banking related services to its customers through its twenty six branches following the provisions of the Bank Company Act 1991 as follows:

• Corporate Finance
• Correspondence Banking
• Documentary Credits
• Foreign Exchange
• Guarantees
• Syndicated Finance
• Other Related Business

DIVISIONS OF SJIBL

All branches of Shahjalal Islami Bank Limited are divided into the following departments:

• General Banking Division
• Foreign Exchange Division
• Investment Division
• HRD Division
• Information Technology Division

General Banking Division

General banking department is one of the most important departments of Shahjalal Islami Bank Limited. Basically bank provides the main services to the customer through this department. In general this section of the Shahjalal Islami Bank Limited is divided into five sections.

• Accounts opening section
• Cash section
• Remittance section
• Bills and clearing section
• Accounts section

Foreign Exchange Division

Banks play a very important role in effecting foreign exchange transaction of a country. Mainly transactions with overseas countries are in respect of imports; exports and foreign remittance come under the purview of foreign exchange department. Banks are the vital sectors by which such transactions are effected/settled. Central Bank records all sorts of foreign exchange transactions. The other banks dealing with foreign exchange are to report to Bangladesh Bank regularly (viz. daily, monthly, quarterly, yearly etc.). The foreign exchange department consists of three sections. They are:

• Import section
• Export section
• Foreign remittance section

Investment Division

Total investment of the bank stood at TK.20, 616.61 million as on 31.12.2007 as against TK.15, 515.79 million of 31.12.2006 registering an increase of TK.5, 100.82 million, i.e. 32.88% growth. The bank is careful in deployment of the fund. Mode wise investments portfolio as on 31.12. 2007

Is given below:

The Bank entertains good investment clients having credit-worthiness and good track record. The Bank has got a few investment Schemes to provide financial assistance to comparatively less advantaged group of people; which are:

• House hold durable scheme
• Small Business investment program
• Small Entrepreneur investment Program
• Medium Entrepreneur investment program
• Housing investment program
• Rural investment program

Human Resources Division

 The employees are Shahjalal Bank’s most valuable resource. Having competent and professional employees will become increasingly important in the years ahead, and efforts are targeted towards the training and development of staff members. To the extent, it is practical and expedient that such training will take place within the organization by drawing on group expertise.

The broad functions of this division are:

Employer Image:

HR department has taken steps in building relationship with recognized educational institutes in order to create positive awareness about SJIBL as an employer. This is being done by extending internships to students, sponsoring student events and by participating in career fairs run by different universities.

Training:

As the organization changes to meet opportunities and challenges, HR department emphasizes on training and development in order to minimize the knowledge and skill gaps and enhance business awareness among the bank employees. Training took a different turn as institutional methods were complemented with facilitation, group/syndicate works, experiential and knowledge sharing discussions, question answer session.

Staffing:

Another important task of the HR division is to prepare all formalities regarding appointment and joining of the successful candidates.

Salary Structure & Motivation: For any service-oriented organization, employees are the most valuable assets because they can play a major role to achieve the target of that institution. As a result, every financial institution is very keen to satisfy the employees to take the best from them. Majority portions of the employees of SJIBL are not satisfied with the resent remuneration package and salary. The remuneration package and salary varies a lot between the Top-level management and mid/lower level management and employees. As a result most of the employees are dissatisfied with salary and pay structure, which leads to lack of motivation. For example, SJIBL hired nine Probationary Officers few months back and among them five left the Organization.

Project part: General Banking

INTRODUCTION

General Banking is the heart of Banking. Here money collection procedure occurs. Other services like cheque encashment, account transfer, account closing, bills and remittance are provided here. So general banking section is the life blood in banking service. The activities perform through some procedures such as – Dispatch ( inward and outward), Deposit, A/C Opening and closing, Transfer, Cheque book issue, local remittance ( payment order and DD, TT ) Collections- transfer delivery, IBC, OBC, Cash, Vault etc.

SERVICES OFFERD BY GENERAL BANKING DIVISION

As General Banking Division is a huge Sector so there are many things to do which are given below:

Dispatch Department

Dispatch is the primary department of any organization. For banking sector it is very important department because through these division bank keep the record of all inward and outward documents.

Inward documents means the letters, papers, circulars online vouchers and so on are sending to bank head office, other branches, different organization or re4ceiving by the bank. On the other hand outward documents mean bank send important papers and others to different places.

To keep the record of all inward and outward information bank maintain two register. Those two registers are known as:

Inward Register:

Inward register is a binding register book containing date, serial number, content or particulars, received from whom and where, marked to, remarks and initial signature. In inward register all the incoming and receiving documents are received and posted according to date and subject and then remarked it from operation manager to do the job to different departments.

Outward Register:

Outward register is almost like inward register containing date, serial number, references, address or destination, particulars and initial signature. In inward register SJIBL registered different documents which are sending to different branches of SJIBL both inside and outside of Dhaka or different organizations both inside and outside of Dhaka and Bangladesh by courier.

Account Opening Department

Shahjalal Islami Bank Limited offers three types of account to depositors and withdraws cash for various purposes. The names of the accounts are:

• Mudaraba Savings Deposit (MSD):

Mudaraba Savings Deposit is the most common form of account opening of any bank and so to SJIBL. An account holder operates his or her account through deposit and withdrawals cash. Generally savings account operates by individual or sole proprietorship. Modest profit rate is providing by the bank.

• Al-Wadiah Current Deposit ( ACD):

 Maximum businessman or company operates Al- Wadiah Current Deposit because they need heavy transaction which is possible in current account because of its liquidity. No profit rate is provided by the bank.

• Mudaraba Short Notice Deposit (SND) :

Mudaraba Short Notice Deposit almost same to current deposit but a very small profit rate provided by the bank.

Terms and Conditions for Account Opening

 Minimum Balance:

 Minimum balance to be maintained in Al-Wadiah Current Deposit / Short Notice Deposit Account is TK. 5,000 and in Mudaraba Savings Deposit Account is TK. 2,000. This requirement may at the bank’s direction be changed from time to time. If the balance falls below the requisite minimum balance at any point of time the bank may at its direction impose an incidental charge on a half yearly basis.

Profit Payment:

Deposits of Al-Wadiah Current Deposit Account are accepted as per Al-Wadiah Principals. Clients will not be entitled to receive any profit against the Al-Wadiah Current Deposit Account. Deposits of Mudaraba Savings Deposit Account and Short Notice Deposit Account are received as per Mudaraba principals. Clients are entitled to receive profit on a half yearly basis which is 6% and 5.5% respectively.

Criteria for Distribution of Profit:

The Mudaraba Savings Deposit Account holder can deposit money at any time during a month. The lowest balance of the account with in first six days of the month will be considered as the deposit of the month. Maximum 4-times withdraws in a month is permissible for distribution or calculation of profit.

For Mudaraba Short Notice Deposit Account profit will be calculated on days credit balance on the account. The account holder needs to maintain the requisite minimum balance through out the year to receive the profit.

Service Charges:

Service charge for maintaining the account with the bank will be levied as determined by the bank from time to time apart from governments usual excise duty and other charges.MSD-100ACD-175 Half Yearly.

• Statements:

The Account holder of Mudaraba Savings Deposit Account will usually receive the statement of his or her or their account by courier on a half yearly basis and the account holder of Al-Wadiah Current Deposit Account and Mudaraba Short Notice Deposit Account will usually receive the statement the quarterly basis. Besides these account holder may receive the statement by hand once in every month free of cost.

• Communication/ Instruction:

All Communications or Instructions to the bank regarding stop payment, issuance of cheque book, bank solvency certificate, statement, online transactions, balance inquiry should be in writing, bank may at the customers request, hand over the cheque book, in a closed envelope to any person authorized by the account holder. Any stop payment instruction received after payment of the cheque or instrument is invalid.

• Close of the Account:

The customer may at any time close the account with proper clarification after payment of the requisite fee as determined by the bank from time to time and on surrender of unutilized cheque leaves.

• Age of having an account:

Minor (a person below 18 years old) can not be an account holder but some other person such as guardian could operate the account on behalf of the minor.

• Number of account:

One person can not open more than one account in same name.

Requirements for Account Opening:

For an individual Customer:

a) Copy of the passport, if available or employer’s certificate or commissioner certificate or chairmen’s certificate or letter of introduction by a person acceptable to the bank.

b) TIN Certificate, if applicable.

c) Two recent passport size photographs duly attested by the introducer.

d) One copy photograph of the no nominee.

For sole proprietorship:

a) Copy of Trade License.

b) Two recent passport size photographs of the proprietor/ signatory duly attested by the introducer.

c) Copy of the passport of the proprietor/ signatory, if available or commissioner’s certificate or chairman’s certificate or letter of introduction by a person acceptable to the bank.

d) TIN

e) One copy photograph of nominee.

For Partnership:

a) Copy of the Partnership Deed of the firm.

b) List of Partners with their address and phone number.

c) Copy of Trade License.

d) Extract of Resolution of the partners of the firms for opening the account and authorization for its operation duly certified by the Managing partner of the firm.

e) For registered partnership, Certificate of registration of the firm along with duly certified copy of the Partnership deed.

f) Two recent passport size photographs of each partner/ signatory, duly attested by the introducer.

g) Copy of passport of each partner / signatory, if available or commissioner’s certificate or chairman’s certificate or letter of introduction by a person acceptable to the bank.

h) TIN

I) one copy photograph of nominee.

For private and public limited company:

a) Certified true copy of Memorandum and Article of Association of the company.

b) Certified true copy of Certificate of Incorporation of the company.

c) Certified true copy of Certificate of Commencement of Business of the company, in case of public limited company.

d) Latest list of directors with address and phone number along with form XII.

e) Extract of duly adopted Resolutions of the Board of Directors of the company for opening the account and authorization for its operation duly certified by the chairman / Managing Director of the Company.

f) Copy of Trade License.

g) Two recent passport size photographs of each signatory duly attested by the introducer.

LOCAL OR INLAND REMITTANCE DIVISION:

By the word Remittance we understand transfer from one place tom another through banking channel. When such transfer is made within the country it is called local inland remittance. Local remittance is one of the most important as well crucial parts of general banking.

Parties of Remittance:

In remitting fund physical transfer of money is not made only instruction is passed on from the issuing branch to the drawer branch for paying a certain sum of money to the payee specified in the instrument. There are four parties involved in this transaction which are:

Remitter/ Purchaser:

The remitter gives cash or cheque to the issuing branch who issues D.D. and T.T. as desired by him.

Drawer / Issuing Branch:

The issuing branch receives money from the remitter and sends order to drawee branch to pay the amount to the payee.

Drawee / paying branch:

It has received order to pay from the drawer or issuing branch.

Payee:

The person issues the amount in favor of remitter is known as payee.

Types of local remittance:

Demand Draft (D.D.):

The Demand Draft is written order by one branch of a bank upon another branch of the same bank to pay certain sum of money to or to the order of a specified person.

A Draft is always an order and never a “bearer” instrument. It is a negotiable instrument like a cheque i.e. it can be endorsed, collected, and delivered to the endorsee. D.D. may be issued to any person and it can also be issued in favor of a company, firm or local authority on written request duly signed by the purchaser.

• Issue of a D.D.

The Purchaser is asked to complete the prescribed application from and credit voucher for general account.

• Amount of commissions:

If against cash, the application is given to the customer to deposit the cash with the cashier.

If against cheque (With or without commissions) then:

Amount of Commissions of Demand Draft

Source: From interview with the charge of local remittance department of Shahjalal Islami Bank Limited.

Kushiarer Service:

Kushiarer service is one of the fastest ways to receive money. In these process receivers receive money which was given by the sender any where in the world.

Procedures of kushiarer service:

In Kushiarer service the receivers have to go through some steps, which are:

Firstly, they should have to fill up a form, where they include sender’s name, amount of the money, and the sending country.

Secondly, they should include the beneficiary name, identification, pin code, senders name and the receivers address.

Finally the receivers receive a debit voucher and then they give it to the cash counter to receive the money.

Western Union Service (WU):

Western Union is one of the first and easy ways to receive money from abroad.

Western Union is the Process where the senders send the money from any where in the world.

Procedures of WU:

In these processes the receivers receive the money easily by doing some legal procedures. These procedures are:

Firstly, the receivers have to fill up a form where they should include their name, address, and phone number, amount of money, senders’ name, and the sending country.

Secondly, in this process there have a pin code which should be 10 digits. The receivers write the pin code in the form.

Finally the receivers receive a debit voucher and then they give it to the cash counter to receive the money.

Telegraphic Transfer (T.T.):

It is an instruction duly tested sent by telex/fax/telegram/telephone etc from the issuing branch to the drawee branch for paying a certain sum of money to a specified person. The payment instruction is sent by telex/fax/telegram/telephone and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no account is maintained with branch. No charge is required for T.T.

Issue of T.T.

Written application of the purchaser in prescribed form which is treated as credit voucher for general a/c of the bank.

Issue of Telegraphic Transfer

Pay Order ( PO):

For issuing a pay order the client is to submit an application form. This application form should be properly filled up and signed. The procedures of the issuing pay order are similar to the Telegraphic Transfer (T.T.).

For issuing pay order SJIBL charges commissions on the following rate :

Source: From interview the charge of local remittance department of Shahjalal Islami Bank Limited.

CLEARING SECTION:

Clearing should be happen between different banks with in a region. Receiving cheque of different banks from clients to make cash are submitted in a house belonging Bangladesh Bank is called clearing house. Clearing section receives cheque of other banks to send the clearing house through the main branch of SJIBL. This is a very significant sector of general banking sector. This sector has two vital jobs. Those are:

Outward cheque clearing:

Any branch of SJIBL can not sends the cheque of different banks directly Clearing house belonging Bangladesh Bank. When Mirpur Road branch of ‘Shahjalal Islami Bank Limited’ receives cheque of other banks to collection then SJIBL sends those cheques to Dhaka main branch sends it to Bangladesh Bank. Bangladesh Bank arranges the cheques separately by the name of different banks. In clearing house this jobs is to done twice a day which are known as first house and return house.  First house is to deliver and collect cheques from other banks. Return house is to return the dishonored cheques.

Bangladesh Bank maintains individual account for each bank and regulates the balance according to the flow of cheque in both outward and inward ways.

After completing the clearance the representative of Dhaka main branch of SJLBL sends an inter Branch Credit Advice (IBCA) to the Mirpur branch. Receive of IBCA is considered as clearance for the payment of the client.

Inward Cheque clearing:

This Process is opposite of outward cheque clearing. In this case other banks send cheque for clearing through the clearing house to Dhaka main branch of SJIBL and Dhaka main branch send it to the particular branch. Receiving confirmation from the particular branch, Dhaka main branch gives forward to the sender bank mentioning account status.

Outward Bill Collection:

When the bank is same but branch is different then the cheque or pay order is send to the particular branch through outward bill collection or OBC if the client does not have any online transaction permission.

CASH DEPARTMENT:

Receiving Cash:

Maintaining a receipt register to record all the cash receive of the day whish is known as teller’s sheet. In tellers sheet there are five columns which are serial number, date, account number, amount and initial signature.

Cash Payment:

Client has to give cheque to cash officer to get his money with signature on cheque and signature must be match with the specimen signature. Cash officer have to check the signature and if correct then he put a/c number into the computer and check the balance the client have in his account. Cash officer should provide issue note i.e. torn and damage notes. Payment can be through transfer which is no physical cash but transfer account to account.

Statement of Account:

The account holder of Mudaraba Saving Deposit Account will usually receive the statement on a half yearly basis and the account holder of Al- Wadiah Current Deposit Account will usually receive the statement on a quarterly basis. Besides the account holder may receive the statement by hand once in every month free of cost containing current balance amount in particular.

Account Transfer:

To transfer account from one branch to another branch of SJIBL account holder have to give an application to manager. Balance would be transfer by IBCA.

Closing Account:

Account holder give an application to the manager mentioning the reason of close and then application form, account opening form and specimen signature card will be marked as closed.

PRODUCTS AND SERVICES OF GENERAL BANKING DIVISION:

Monthly Term Deposit Rate (MTDR):

Features

• According to Islami Shariah Mudaraba principals Bank receive and deposit in this account from 10,000 to above any amount and as receive those particular amount bank will give none returnable receipt to the account holder.
• In this account bank offers three months, six months, one year and above time period to maintain the account of account holder.
• If the account holder withdraws his or her principal amount before one month then bank will not grant any profit, but after completing one month and before maturity date in date case bank will pay profit according to the profit rate on deposit.
• On maturity date the account holder has to withdraw or renew his account among 10 days and if it not possible then the account will renew automatically by the bank. After maturity the client gets the principal amount along with the profit.

The rule of counting profit:

Principal amount * Percentage (%) 360 days-Excise duty = Profit.

Provisional profit rate of MTDR:

Table:2: Equal Monthly Installments Sample

Monthly Income Scheme (MIS)

Features

• According to the Islami Shariah Mudaraba principal’s bank receive and deposit in this account 50,000 or any amount of multiply of 50,000. As receive those particular amount bank will give none returnable receipt to the account holder.
• The time period of this account is 3 years.
• To maintain this account, account holder has to open a Mudaraba Savings Account or Al- Wadiah Current account.
• Bank Transfer the monthly profit amount in that savings or current account.
• After death of account holder the nominee will get the amount. The nominee must be chosen by the account holder.
• Account holder has to know to bank if their is any kind of changes that he go through (address, telephone number change etc.).
• Account holder does not close his or her account before one year if he or she does so in that case account holder does not get any profit.
• In a same branch account holder can open account more then one.

Provisional Profit rate of MIS:

Table: 3: Equal Monthly Installments Sample

Source: From interview with the in charge of general banking department of Shahjalal Islami Bank Limited.

Double Benefit Scheme (DBS):

Features

• According to the Islami Sharaiah Mudaraba Principals bank receive and deposit in these account from 10,000 to above any amount and receives those particulars amount bank will give none returnable receipt to the account holder.
• The time period of this account is 7.6 Years. Account holders principal amount will be double by 7.6 years.
• Account holder do not close his or her account before one year if he or she do so in that account holder do not get any profit.
• After death of account holder the nominee will get the amount. The nominee must be chosen by the account holder.
• Account holder has to know to bank if their is any kind of changes that he go through (address, telephone number change etc.).
• In a same branch account holder can open account more then one.

Provisional Rate of DBS:

Table: 4: Equal Monthly Installments Sample

Triple Benefits Scheme (TBS):

Features

• According to the Islami Sharaiah Mudaraba Principals bank receive and deposit in these account from 10,000 to above any amount and receives those particulars amount bank will give none returnable receipt to the account holder.
• The time period of this account is 11.9Years. Account holders principal amount will be Triple by 11.9 years.
• Account holder do not close his or her account before one year if he or she do so in that account holder do not get any profit.
• After death of account holder the nominee will get the amount. The nominee must be chosen by the account holder.
• Account holder has to know to bank if their is any kind of changes that he go through (address, telephone number change etc.).
• In a same branch account holder can open account more then one.

Provisional Rate of TBS:

Table: 5: Equal Monthly Installments Sample

Source: From interview with the in charge of general banking department of Shahjalal Islami Bank Limited

Millionaire Deposit Scheme (MS):

• According to the Islami Sharaiah Mudaraba Principals bank receive and deposit in this account.
• In these account the particular amount will be receive according to the 12 years, 15 years, 20 years, 25 years time phase will be 10,00,000/-.
• After death of account holder the nominee will get the amount. The nominee must be chosen by the account holder.
• Account holder has to know to bank if their is any kind of changes that he go through (address, telephone number change etc.).
• The time period of Deposit the monthly deposit amount is 1 to 25 in every month. If any one failed to deposit in that 1 to 25, he or she give have to give fine 25 TK.
• If account holder misses his or her monthly deposit consecutively 4 times then the account will be closed.

Monthly deposits according to the time period are as follow:

Table: 6: Monthly deposits according to the time period are as follow:

 Provisional profit rate of MS:

Table: 7: Equal Monthly Installments Sample

Monthly Deposit Scheme (MDS):

• According to the Islami Shariah Mudaraba principles bank receive and deposit in a monthly basis from 1000 to 50,000 TK.
• The time periods of this account are 5 years, 8 years, 10 years
• In a same branch account holder can open account more then one.
• The time period of deposit the monthly deposit amount is 1 to 25 in every month. If anyone failed to deposit in that 1 to 25, he or she have to give fine 25 TK.
• Account holder do not close his or her account before one year if he or she do so in that account holder do not get any profit.
• After death of account holder the nominee will get the amount. The nominee must be chosen by the account holder.

Monthly Deposit Period is as follows:

Table: 8: Monthly deposits according to the time period of MDS.

Hajj Deposit Scheme (HDS):

Features

• According to the Islami Shariah Mudaraba Principals bank receive and deposit in a monthly basis from 10,200 to 175 TK.
• The time periods are 1 to 25 Years.
• One person can open only one account.
• If account holder misses his or her monthly deposit consecutively 5 times then the account will be close.
• The time period of deposit the monthly deposit amount is to 1 to 25 in every month. If any one failed to deposit in that 1 to 25, he or she have to give fine 25 TK.

SJIBL WORLD OF CREDIT CARDS

Visa Electronic (SJIBL Debit Card- Local)

To a customer, “My card, my money” concept is used for Debit Card.  Any account holder of SJIBL can apply for a SJIBL VISA DEBIT CARD against his/her Al-Wadiah Current Deposit (AWCD), Mudaraba Savings Deposit (MSD) or Mudaraba Short Notice Deposit (MSND) Account. He/she is fully authorized to enjoy the benefits of cash withdrawal from ATMs, liberty of shopping, dining, paying utility bills.

SJIBL VISA Prepaid Card (Local)

SJIBL VISA Prepaid Local Cards are open to the customers even having no account with Shahjalal Islami Bank Limited. Card holders can have the card against prepayment and have access from anywhere in Bangladesh. SJIBL VISA Prepaid Local Cards are accepted locally at all VISA labeled merchant outlets, ATMs, etc.

SJIBL VISA Prepaid Card (International)

SJIBL VISA Prepaid International Cards are also open to the customers even having no account with Shahjalal Islami Bank Limited. Card holders can have the card endorsing US Dollar paying against Travel Quota, Exporters Retention Quota or marking Lien of his/her FC Account. SJIBL VISA Prepaid International Cards are accepted world wide at the entire VISA labeled merchant outlets, ATMs, etc.

SJIBL VISA Prepaid Card (International)

SJIBL VISA Prepaid International Cards are also open to the customers even having no account with Shahjalal Islami Bank Limited. Card holders can have the card endorsing US Dollar paying against Travel Quota, Exporters Retention Quota or marking Lien of his/her FC Account. SJIBL VISA Prepaid International Cards are accepted world wide at the entire VISA labeled merchant outlets, ATMs, etc.

SJIBL VISA Prepaid Card (Dual)

The Dual Card is a hassle free product, no need to carry two separate plastic cards for local and international card. Now, with one plastic card the Card holders can enjoy all the benefits and make transactions locally & globally from their Prepaid card account at all the VISA labeled merchant outlets, ATMs, etc.

SJIBL VISA Souvenir Card (Gift Card – Local)

SJIBL Souvenir Card is a very attractive and stylish product. Like a Gift Card, SJIBL Souvenir Card can be used by anyone wishes to. The intending customer may have the card instantly or may customize the card as required. The SJIBL Souvenir Cards are accepted locally at the entire VISA labeled merchant outlets, ATMs, etc.

Usage Limit

UPCOMING PROJECTS OF SJIBL:

Shahjalal Islam Bank Limited recently introduces some new projects where 5 are Deposit schemes and other 5 are investment schemes. These schemes are given below:

Deposit Schemes:

• Mudaraba special term deposit scheme.
• Mudaraba Lakhpoti deposit scheme.
• Mudaraba Bibaho deposit scheme.
• Mudaraba Shihkha Deposit scheme.
• Mudaraba Mohor Deposit Scheme.

Investment Schemes:

• Investment scheme for Education.
• Investment scheme for Doctors.
• Marriage investment Scheme.
• Overseas Employment Investment Scheme.
• Investment Scheme for Executives.

Findings and Analysis

PREFORMANCE OF THE BANK

Analysis from the balance sheet:

The financial data’s of the year 2007 and second half have been taken from the auditors report as 2007. The key points of the balance sheet are as follows:

Table: Analysis from the balance sheet:

Analysis of financial condition of Shahjalal Islami Bank takes from the auditor’s report of SJIBL balance sheet at 2007. It shows the comparison between the Year 2006 and 2007. Except authorized capital and paid-up capital there is a significant difference between the two years. Statuary reserve, Share holder’s equity, fixed assets, Total assets, Total deposits, Total liabilities, and Total investments, Total Income, Total Expenditure, Total Import, Total Export in all sectors SJIBL has been increase in 2007 from 2006.

Income and Expenditure Comparison:

To assess the financial performance of SJIBL here are the analysis of income and expenditure from 2005 to 2007. These are given below in the diagram:

Table: Comparison of Income

Source: Auditors Report of Shahjalal Islami Bank Limited as at 2007.

From the above table it is obvious that the total operating income of the bank in 2005 was very little and in 2006 it was increasing very significantly but in 2007 it was decreasing then 2006, through these amount was counting for the year 2007 so it can be say that the number of operating income was increased by the rest of six months in 2007.

 Table: Comparison of Expenditure

Source: Auditors Report of Shahjalal Islami Bank Limited as at 2007.

From the above graph it is clear that the total operating expenditure of the bank in 2005 was little and in 2006 it was increasing but in 2007 it was increasing then 2006, though these amount was counting for half of the year 2007 so it can be say that the number of operating expenditure was increased by the rest of six months in 2007.

 Comparison of Profit /Loss:

Table: Comparison of Profit /Loss

Source: Auditors Report of Shahjalal Islami Bank Limited as at 2007.

From the above table it is obvious that the bank faced a huge net loss in 2005 but in 2006 bank overcame the loss and earned a net profit. Net profit was increasing very significantly in 2006, but in 2007 it was increasing than 2006, through these amount was counting for half of the year 2007 so it can be say that the number of net profit was increased by the rest of six months in 2007.

DEPOSIT AND INVESTMENT POSITION OF SJIBL:

Deposit and Investment position of SJIBL are given in the following table:

Table: Deposit and Investment position

Source: Auditors Report of Shahjalal Islami Bank Limited as at 2007

The Deposit and Investment position of SJIBL for the year 2007 and 2006 shows that it increases its position gradually, as the graph shows that investment and deposits are much higher than 2006 to 2007.

FOREIGN EXCHANGE POSITION ANALYSIS:

Total Foreign Exchange business handled during the year during the year 2007 was Tk. 44,868.60 million as against Tk. 33,500.96 million of 2006 registering an increase of Tk. 11,367.64 million, i.e. 33.93% growth. The particulars of Foreign Exchange Business are given below:

Table:  Composition of Foreign Exchange Business of 2007

During the Year 2007 Banks branches opened 7,104 Import letter of credit as against 5,613 of 2006 and handled 8,027 Export bills in 2007 against 6,336 of 2006.

OTHER MAJOR FINDINGS:

• Shahjslal Islami Bank Limited is becoming a leading and well accepted bank in private banking sector as well as Islami Shariah oriented banking sector.
• All branches of SJIBL have online facilities for transaction, so it is very helpful for the clients to deal with the bank easily.
• Marketing activities of this branch is not so effective through the branch head tries to make it more effective using delicate attachment to the clients or organization.
• Sometimes on the request of valued customers through branch head, staffs have to do pending work. This is mainly happened when different types of accounts and schemes are opened.
• Deposit of Mirpur branch of SJIBL is very good but the investment sectors schemes are not so popular than deposit schemes.
• As the time passes the number of borrowers and organizations are increasing for the investment.
• Though the branch has lots of possibilities to increasing their position but it has limitations of employees then the work.
• After observing all these things the overall performance of Mirpur Branch of SJIBL is satisfactory.

SWOT ANALYSIS OF SJIBL:

SWOT analysis is one of the most important steps in formulating strategy. Using the organization as a context, manager context assess internal strength and weakness as well as external opportunity and Threat. The goal is then to develop good strategies that exploit opportunities and strengths, neutralize threats and weakness.

Strengths:

• Good asset quality
• Satisfactory business growth
• Diversified product lines
• Good profitability
• Experienced top management
• Good operating efficiency

Weaknesses:

• Negative retained earnings
• Dependent on fixed deposits
• Moderate risk management system
• Limited delegation of power
• MIS at primary stage
• Weak in Shariah compliance
• Limited branch network
• Limited market share

Opportunities:

• SME and Agro based business
• Real time online banking
• Credit card in duel currency
• Basel- II compliance to tap advantages from RM system

Threats:

• Increased competition in the market
• Market pressure for increasing the SLR
• Market pressure for dollar crisis

CONCLUSIONS:

Shahjalal Islami Bank Limited is an Islamic shariah based bank in private banking sector. The time period of this bank is very little although SJIBL has already made a good position among the Islam oriented banks as well as private banks and create an image in the clients mind. Eight years is not very big but with in this short time SJIBL create a good financial condition and total deposits of the bank are fairly satisfied.

Shahjalal Islami Bank Limited believes that building strong relation relationship with all stakeholders, particularly customers, is crucial for growth and prosperity. Technology and competition have made it vital for to build stronger bonds with the customers to meet their need at their convenience. SJIBL put emphasis on meeting this continuous challenge of managing relationship.

During the course of my practical orientation i have tried to learn the practical banking to relate with my theoretical knowledge. This internship was arranged for gaining knowledge of practical banking and to compare this practical knowledge with theoretical knowledge involves identification and making recommendations.

Effective Corporate Governance producers are essential to achieving and maintaining public trust and confidence I the banking sector, which are critical to the proper functioning of the banking sector and economy as a whole.

Shahjalal Islami Bank Limited will continue to reinforce their efforts to meet the needs and expectations of customers. SJIBL setting goals and challenges for employees to respond better to customer needs. SJIBL make themselves from the competitors through Shariah based services and flexible and personalized services.

RECOMMENDATIONS:

• The bank should be totally computerized because it is less expensive and time consuming. Be computerized also need for to compete with competitor banks. It will impact the performance of the employees and as a result of the bank.
• Bank should introduce more retail products so that clients can choose among many options.
• The recruitment process should be more sound and effective so that efficient and fresh graduate can prove themselves.
• Have to emphasize on marketing departments to be a focus for clients.
• Mirpur Branch of SJIBL has to hang a big sign board for the Western Union service.
• Online service should be fluent and accurate.
• The Website of the bank is not good enough. Most of the papers are under constructed. The pages should be constructed as soon ass possible.
• They have to take creative activities to overcome any changing situation.
• They need to organize more training facilities for recovery section.
• To enhance the image of the bank, SJIBL should be engaging it self with some social causes and responsibilities.