Organizational Overview of Islami Bank Limited

 About Bank

As a Muslim country people of Bangladesh are deeply committed to Islamic way of life and follow the Holy Qur’an and the Sunnah. This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh.

Corporate Information (As on June 30, 2010)

Vision:                                                                   

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

• Our goal is to establish and maintain the modern banking techniques, to ensure the soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professionals, working for the benefit of people, based upon accountability, transparency and integrity in order to ensure stability of financial systems.
• We will try to encourage savings in the form of direct investment.
• We will also try to encourage investment particularly in projects which are more to lead to higher employment.

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 developed areas of the country. To encourage socio economic uplift and financial services to the low-income community particularly in the rural areas.

Objectives of IBBL          

The Board of Directors:

The Board of Directors consists of 14 non executive members including 1 Independent Director. The number of Board of members is within the maximum limit set by the central bank. The Board is composed of experienced members with diverse professional experiences such as business, administration, banking & finance, accounting, general management, diplomacy, government services, engineering and fund management which made the Board very efficient and balanced in deciding and directing on the various issues of the bank. The Board members are independent who express their views and opinions free from any influence. The Directors are also independent from management, business/other relationship of the bank that could materially interfere the activities of the bank.  There is also a clear demarcation of duties and responsibilities between the Board and management. While the Board is responsible for formulating the board policy framework within which the bank is operating, the management is accountable for the execution of the policies and attainment of the bank’s objectives. The Board exercises independent oversight on the affairs of management.

Committees:

The Board has two standing committees viz. Executive Committee and Audit Committee. These Committees operate within clear terms of reference.

The Executive Committee

The executive Committee consists of 6 members and entrusted with the task of policy making and taking important and strategic decisions as authorized by the Board within the norms set by the Bangladesh Bank.

The Audit Committee

The Audit Committee formed by the Board of Directors as per instruction of Bangladesh Bank consists of 3 members and is entrusted with, among others, the task of exercising their duties & responsibilities with regard to:

• Internal Control
• Disclosure of Financial Report
• Internal Audit
• External Audit and
• Compliance of existing laws and regulations

The Management Committee

The Management Committee of the bank comprises of 17 top level executives, headed by the Managing Director (CEO) of the bank. The Committee with financial, administrative and business discretionary power delegated by the Board is mainly responsible for implementation of the policies and guidelines approved by the Board. The Management Committee thoroughly scrutinizes the issues before placing to the Executive Committee/Board. The Management Committee thoroughly evaluates the performance of the bank, takes strategic action plan to achieve various targets of the bank set by the Board of Directors.

Asset-Liability Committee (ALCO)

The asset liability management (ALCO) of IBBL is comprised of 18 members from the top management which meets once in a month to review the liquidity position of the bank, maturity grouping of assets and liabilities, Deposits and Investment pricing and liquidity contingency plan in order to manage the balance sheet risk in a better way. The ALCO is entrusted with the responsibility of ensuring the bank’s sufficient liquidity at all times to meet its obligations when becomes due without compromising the earning potential of the bank. In every ALCO meeting, the Committee reviews actions taken in previous ALCO meeting, economic and market status and outlook, liquidity risk related to balance sheet, profit rate structure etc. Special ALCO meeting is arranged as and when any contingent situation arises.

Shari’ah Council:

The Shari’ah Council of the bank plays a very important role in framing and exerting policy for strict adherence to Shari’ah Principles in the bank. The council is represented by 14 members consisting of prominent Ulama having adequate knowledge in Fiqhul Moamalat, renowned lawyers and eminent economists to advise and guide on the implementation and compliance of Shari’ah principles in all activities of the bank particularly on the modes of investment. The representative of the Council attends in the meetings of the board of Directors, Executive Committee, Audit Committee and other relevant committees and Annual Development Conferences too give opinions and oversee the activities of the bank from the view point of Shari’ah. At present two members of the Council are also the members of Academic Council of IBTRA. The Council also evaluates the performance of the officials in terms of Shari’ah compliance.

Branches:

Till 2009, out of total 231 branches (including 20 SME/Agricultural Branches), 114 are Urban Branches and 117 are Rural Branches which are the highest number of rural branches among the first generation Commercial Banks.

Products and Services

Local currency Deposit Accounts

1. Al-Wadeeah Current Account.
2. Mudaraba Savings Account.
3. Mudaraba Term Deposit Account.
4. Mudaraba Special Notice Account.
5. Mudaraba Special Savings (Pension) Account.
6. Mudaraba Hajj Savings Account.
7. Mudaraba Savings Bond.
8. Mudaraba Waqf Cash Deposit Account.
9. Mudaraba Monthly Profit Deposit Account.
10. Mudaraba Muhar Savings Deposit Account.

Foreign  Currency  Deposit  Accounts

1. Mudaraba Foreign Currency Deposit.

2. Foreign Currency Deposit (USD, EURO, GPB).

3. FC Deposit ERQ.

Investment Modes

1. Bai-Muajjal.
2. Bai-Murabaha.
3. Hire Purchase under Shirkatul Melk.
4. Mudarabah.
5. Musharaka.
6. Musharaka Documentary Bills (MDB).
7. Bai-Salam.
8. Bai-As-Sarf.

Welfare Oriented Special Investment Schemes

1. Household Durables Scheme.

2. Housing Investment Scheme.

3. Real Estate Investment Scheme.

3. Transport Investment Scheme.

4. Car Investment Scheme.

5. Investment Scheme for Doctors.

6. Small Business Investment Scheme.

7. Agriculture Implements Investment Scheme.

8. Rural Development Scheme.

9. Micro Industries Investment Scheme.

10. Women Entrepreneurs Investment Scheme.

11.  Mirpur Silk Weavers Investment Scheme.

12. Equity and Entrepreneurship Fund of Bangladesh Bank.

Sectors under SME Investments

1. Manufacturing.
2. Trading.
3. Service.

ATM Services

1. Cash Withdrawal.

2. Fund Transfer.

3. Mini Statement of Accounts.

4. Balance Enquiry.

5. Payment of Utility Bills (Electricity, Water, Phone and Gas etc).

Other Banking Value Added Services

1. The Bank issues Payment Orders.

2. The Bank co-operates to remit money from one place to another on the basis of commission within the country through Demand Draft (DD) and Telegraphic Transfer (TT).

3. ATM Service has been introduced in selected Branches.

4. Locker Service is available in selected Branches to preserve valuable documents and materials.

5. The Bank gives counseling on different issues.

6. Online Banking.

7. SMS Banking.

8. SWIFT.

9. REUTER, etc.

Foreign Remittance

There are 16 (sixteen) Foreign Representatives of IBBL in 5 (five) Countries to serve expatriate customers to encourage and enhance Foreign Remittance.

Treasury Activities

Dealing Room Operation.

Special Services through Islami Bank Foundation

1. IslamiBankHospital.
2. IslamiBankMedicalCollege.
3. IslamiBankCommunityHospital.
4. Islami Bank Nursing Training Institute.
5. Islami Bank Institute of Health Technology.
6. Islami Bank Homeopathic Clinic.
7. Monorom: Islami Bank Crafts & Fashion.
8. Islami Bank Service Centre.
9. Islami Bank Institute of Technology.
10. IslamiBankInternationalSchool and College.
11. IslamiBankModelSchool.
12. Islami Bank Mohila Madrasah.
13. Bangladesh Sangskritic Kendra.
14. Distressed Women Rehabilitation Centre.

Training Services

1. International: Training to Foreigners on Islamic Banking.

2. National: Training to others on Islamic Banking.

3. Islami Banking Diploma.

IBBL’s World Rating:

As per Banker’s Almanac (January 2006 edition) published by the Reed Business information, Windsor Court, England, IBBL’s world rank is 1591 among 4500 banks selected by them. World ranking of IBBL amongst top 3000 International Banks:

IBBL’s World Rating

Table-

Source: The Bankers Almanac: World Ranking, 2008, Reed Business Information, U.K.