History of Islami Bank Bangladesh ltd

History of Islami Bank Bangladesh ltd

History of IBBL:

Establishment of Islamic Development Bank (IDB) by the OIC member states in the year 1975 has been proved to be a breakthrough in the expansion of Islamic Shariah based finance and specially banking throughout the world. As a founder member of IDB, the Government of Bangladesh also had the commitment to establish Islamic banks which was reflected in different steps taken by the governments of the country. The OIC members consented to the proposals to introduce Islamic economy and banking in their respective countries held in the foreign ministers’ conferences in 1978 and 1980 in Dakar and Islamabad respectively. In the year 1981, OIC in its 3rd summit held in Makkah approved the proposition submitted by Bangladesh to introduce separate banking system following Islamic ideology. As per decision, the GOB sent representatives to the Middle Eastern countries to learn the existing banking systems in those countries.

In the private sector, the Islamic Economics Research Bureau (IERB) was the first organization that took active initiative in this regard. They arranged a national seminar on Islamic Economics and Banking in the year 1979 and inspired by the discussion and the papers presented in the seminars, some local bankers formed ‘Islami Bank Working Group’. The IERB again arranged an international seminar in 1980. After the seminar, Dhaka based ‘Muslim Businessman Society’ (later renamed as ‘Industrialist and Businessmen Association’) under the leadership of renowned industrialist Abdur Razzaque Lasker, took initiative to establish an Islamic bank and applied to the government for permission. At this stage, the GOB provided necessary permission in the year 1983 and at last ‘Islami Bank Bangladesh’ was registered under Company Act in which 19 Bangladeshi national, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of the Middle East and Europe including IDB and two eminent personalities of the Kingdom of Saudi Arabia joined hands to make the dream a reality.

 Mission of the Bank

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 activity balanced growth and equity development through diversified investment operations particularly in the priority sectors and less development areas of the country.  To  encourage  socio-economic  uplift  and  financial  services to  the  low  income  community  particularly  in  the  rural  areas.

Vision of the Bank

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

To establish and maintain the modern banking technology, to ensure the soundness and development of the financial system based on Islamic principles and become the strong and efficient organization with highly motivated professionals, working for the benefit of people, based upon accountability, transparency and integrity in order to ensure stability of financial system.

Try to encourage savings in the form of direct investment

Try to economic investment particularly in projects, which are move likely to lead to higher employment.

 Special Features of IBBL:

All activities are conducted on interest-free system in accordance with Islamic Shariah Principles.

  • Investment is made through different modes as per Islamic Shariah.
  • Investment-income of the Bank is shared with the Mudaraba depositors according to an agreed upon ratio ensuring a reasonably fair rate of return on their deposits.
  • Aims to introduce a welfare-oriented system and also to establish equity and justice in the field of economic operators.
  • Extends socio-economic and financial services to individuals of all economic background with strong commitment in rural advancement uplift.

Branches of IBBL

IBBL has the largest network of branches among PCBs. IBBL has 209 branches up-to-date located at different commercially important places. Out of these branches, 162 branches are in considered as online branches. With the expansion of business, Bank divided their branches in 11 Zones to ensure close supervision, effective monitoring, and quick disposal of business and optimum utilization of manpower. 52 branches are located in 3 Dhaka Zones (Dhaka Central, South & North Zones), 31 branches are in Chittagong Zone, 23 branches are in Khulna Zone, 23 branches are in Bogra Zone, 27 branches are in Comilla Zone, 19 are in Sylhet Zone, 18 branches in Barisal Zone, 19 branches in Rajshahi Zone and 17 branches in Mymenshing Zone.

Growth and Expansion:

Since its startup, IBBL is maintaining a steady growth in terms of profitability and geographical coverage. 80s may be termed as ‘Foundation Stage’; during the 90s, the bank passed its ‘Early Growth Stage’ and during the first decade of the 21st century, its making ‘Rapid Growth’. The growth fact file from 1983 – 2008 is given hereunder:

Growth and Expansion:

13-03-1983–        Incorporation of IBBL.
30-03-1983–        Inauguration of 1st Branch (Local Office).
12-08-1983–        Formal inauguration.
1984–        Establishment of Islami Bank Training and Research Academy (IBTRA).
1985–        Listed with Dhaka Stock Exchange (DSE) and issue IPO.
1988–        Introduction of ‘Executive Development Program’.
1989–        1st Rights Share Issue.

–        Introduced Zonal concept.

1991–        Opening of the 50th Branch.

–        ‘Sadaqa Tahabil’ converted to form Islami Bank Foundation as a separate entity.

1994–        Introduction of annual award for Dhaka University students.

–        Implementation of BEXIBANK as the banking software.

1995–        Launched Rural Development Scheme.

–        First IBBL representative abroad (KSA).

1996–        Listed with Chittagong Stock Exchange (CSE).

–        2nd Rights Share Issue.

1997–        Opening of the 100th Branch.
1998–        Introduction of Diploma in Islamic Banking at IBTRA.
1999–        ‘Global Finance’, a New York based financial magazine named IBBL as the best bank of the country.

–        Implementation of IBBS – integrated banking software.

–        Introduction of SWIFT service.

2000–        3rd Rights Share Issue.

–        CSE declared IBBL as one of CSE – 30 companies.

–        Head Office shifted to new location (own premises).

–         ‘Global Finance’ named IBBL as the best bank of the country.

2001–        DSE declared IBBL as one of 20 ‘Blue Chip’ companies.

–        Introduction of ATM service.

–        All the branches are computerized.

–        IBTRA shifted to its own premises at Mohammadpur.

–        eIBS project started.

2002–        New Organogram was implemented.
2003–        4th Rights Share Issue.
2004–        LAN has been set up at all the branches.

–        Opening of the 150th Branch.

–        Joining / Agreement with CDBL.

2005–        Implementation of eIBS – web based banking software developed by in-house developers.

–        Introduction of REUTERS and dealing service.

–        ‘Global Finance’ named IBBL as the best bank of the country.

–        IT Audit came into practice.

2006–        Introduction of Online banking.
2007–        Introduction of Mudaraba Perpetual Bond.

–        ICMAB announced IBBL as the ‘First in Best Corporate in the Banking Sector (Local)’.

2008–        Starting brokerage house operation.

Source: Annual Report 2009

Islami Bank Bangladesh ltd