Overview of Islami Bank Bangladesh Limited

Overview of Islami Bank Bangladesh

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in commercial banking business based on Islamic Shari’ah with 63.09% foreign shareholding having largest branch network (246 Branches & 30 SME/Krishi Branches i.e. total 276 Branches) among the private sector Banks in Bangladesh. It was established on the 13th March 1983 as the first Islamic Bank in the South East Asia.

It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. Authorized Capital of the Bank is Tk. 20,000.00 Million ($ 250.47 Million) and Paid-up Capital is Tk. 12,509.64 Million ($ 156.66 Million) having 60,302 shareholders as on 31st December 2012.

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 in through diversified investment operations particularly in the priority sectors and less developed areas of the country. To encourage socio-economic upliftment and financial services to the loss-income community particularly in the rural areas.

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 soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professional, 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 likely to lead to higher employment: To ensure customers’ satisfaction.

Strategic Objectives:

• To ensure welfare oriented banking.
• To establish a set of managerial succession and adopting technological changes to ensure successful development of an Islamic Bank as a stable financial institution.
• To prioritize the clients welfare.
• To emerge as a healthier & stronger bank at the top of the banking sector and continue stable positions in ratings, based on the volume of quality assets.
• To ensure diversification by Sector, Size, Economic purpose & geographical location wise Investment and expansion need based Retail and SME/Women entrepreneur financing.
• To invest in the thrust and priority sectors of the economy.
• To strive hard to become an employer of choice and nurturing & developing talent in a performance-driven culture.
• To pay more importance in human resources as well as financial capital.
• To ensure lucrative career path, attractive facilities and excellent working environment.
• To ensure zero tolerance on negligence in compliance issues both Shari’ah and regulatory issues.
• To train & develop human resources continuously & provide adequate logistics to satisfy customers’ need.
• To be excellent in serving the cause of least developed community and area.
• To motivate team members to take the ownership of every job.
• To ensure development of devoted and satisfied human resources.
• To encourage sound and pro-active future generation.
• To achieve global standard.
• To strengthen corporate culture.
• To ensure Corporate Social Responsibilities (CSR) through all activities.
• To promote using solar energy and green banking culture and ecological balancing.
•  Trust in Almighty Allah

Core Values:

• Strict observance of Islamic Shari’ah
• Highest standard of Honesty, Integrity & Morale
• Welfare Banking
• Equity and Justice
• Environmental Consciousness
• Personalized Service
• Adoption of Changed Technology
• Proper Delegation, Transparency & Accountability

Products and Services:

Under products and services Islami Bank Bangladesh Ltd. has below categories:

(1) DEPOSIT SCHEMES:

• Al-Wadeah Current Account (AWCA)
• Mudaraba Savings Account (MSA)
• Mudaraba Term Deposit Account (MTDR)
• Mudaraba Special Notice Account (MSNA)
• Mudaraba Hajj Savings Account (MHSA)
• Mudaraba Special Savings (Pension) Account (MSSA)
• Mudaraba Savings Bond (MSB)
• Mudaraba Monthly Profit Deposit Account (MMPDA)
• Mudaraba Muhor Savings Account (MMSA)
• Mudaraba Waqf Cash Deposit Account (MWCDA)
• Mudaraba NRB Savings Bond (MNSB) Account
• Mudaraba Foreign Currency Deposit Account (MFCD)
• Students Mudaraba Savings Account (SMSA)
• Mudaraba Farmers Savings Account (MFSA)

(2) INVESTMENT MODES:

BAI- Modes

• Bai-Murabaha
• Bai-Istijrar
• Bai-Muajjal
• Bai Salam
• Istisna’a
• Bai-As-Sarf

SHARE- Modes

• Mudaraba
• Musharaka

IJARA-Modes

• Hire Purchase under Shirkatul Melk (HPSM)

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

(3) INVESTMNET SCHEME

• Household Durables Scheme (HDS)
• Investment Scheme for Doctors (ISD)
• Transport Investment Scheme (TIS)
• Car Investment Scheme (CIS)
• Small Business Investment Scheme (SBIS)
• Micro Industries Investment Scheme (MIIS)
• Agricultural Implement Investment Scheme (AIIS)
• Real Estate Investment Program (REIP)
• Real Estate Investment (Commercial & Working Capital)
• Agricultural Investment of IBBL
• NRB (Non Resident Bangladeshi) Entrepreneurs Investment Scheme(NEIS)
• Women Entrepreneurs Investment Scheme (WEIS)

(4) RURAL DEVELPOMENT SCHEME

(5) FOREIGN EXCHANGE BUSINESS SERVICES

(6) SPECIAL SERVICES:

• Locker Services
• ATM services

Corporate Information:

Financial Information

Authorized Capital                 Tk. 20,000.00 Million ($ 250.47 Million)

Paid Up Capital                      Tk. 12,509.64 Million ($ 156.66 Million)

Deposits                                  Tk. 417,844.14 Million ($ 5,232.87 Million)

Investment                              Tk. 399,930.80 Million ($ 5,008.53 Million)

Particulars in Attainment of IBBL:

As recognition of good performance IBBL won the following awards:

• IBBL has been selected as the only Bank from Bangladesh in top 1000 banks in the world by a UK based century old financial magazine, ‘The Banker’ published the list in its July 2012 issue.
• The institute of Chartered Accountants of Bangladesh (ICAB) awarded IBBL the first prize of SARRC Anniversary Award for Corporate Governance.
• South Asian Federation of Accountants (SAFA) awarded IBBL as joint Winner in the Corporate Governance Disclosure Award-2010.
• South Asian Federation of Accountants (SAFA) also awarded IBBL with Certificate of Merit in Banking Sector in the Annual Report for the year 2010.
• The Institute of Cost and Management Accountants of Bangladesh (ICMAB), awarded IBBL as the ICMAB National Best Corporate Award-2007 (First Position, Local Bank) and ICMAB Best Corporate Performance Award – 2008 (Second Position, Private Commercial Bank).
• The Institute of Chartered Accountants of Bangladesh (ICAB) awarded IBBL with 3^rd position under the catergory-1, Banking in the best published accounts and reports for the year 2010, the Certificate of Appreciation for the year 2001 & 2010 and Certificate of Merit for the year 2008.
• The Global Finance, a reputed U.S.A. based quarterly Financial Magazine, awarded IBBL as the best Islamic Financial Institution of the country for the years 2008, 2009, 2010 & 2011.
• The Global Finance also awarded IBBL as the best bank of the country for the year 1999, 2000, 2004 and 2005.
• ICICI Bank, Hong Kong, awarded IBBL as “The Quality Recognition Award-2009” for U.S. Dollar Clearing (2009).
• Bankers’ Forum awarded IBBL as the Best Bank for Corporate Social Responsibility for 2008 and 2009.
• The Bank-Bima Patrika, a Fortnightly Magazine, awarded IBBL as the Best Islami Banking Award 2007.
• Exclusive economic weekly “The Industry” awarded IBBL as the Best Rated Bank Award- 2010.
• The Citi Bank NA awarded IBBL as the “Largest Contributor” in Foreign Trade Operations in Europe- Bangladesh corridor in 2009.
• The UAE Exchange awarded IBBL for mobilizing around 30% of total foreign remittance of the country.

IBBL is committed to provide banking service that is purely based on Islamic Shari’ah, transparent and efficient. We would like to express our heartfelt thanks and gratitude to Almighty Allah, our customers, patrons, shareholders, print & electronic media, regulatory authorities and employees whose support and confidence has made us worthy of these great recognitions by the experts like the Global Finance, the Institute of Cost and Management Accountants of Bangladesh (ICMAB), the Institute of Chartered Accountants of Bangladesh (ICAB), the BankBima Patrika, the weekly Industry, The Citi Bank NA and The UAE Exchange.

Job at IBBL:

Nature of Job:

In Islami Bank Bangladesh Ltd. I have to perform a variety of jobs as it has 3 departments.

Though I declare my major in Finance and accounting, more or less, I have to work in all of them.

The duties and responsibilities I had to perform in the bank are given below:

Specific Responsibilities of the Job:

Before joining in the branch:

• Before joining in the branch, had an eight days training in the Islami Bank Training and Research Academy. There I have learned different terms and introduced with different products of IBBL.

After joining in the branch:

• After joining in the branch, had to perform any kind of duties assigned by the manager and the senior principal officer.
• Account Opening- Here I had taken part in the completion of some account opening forms. After finishing the procedure of the forms I had to process and store client information into the bank’s software named Electra debt which IBBL use to do their online banking. Also done the transaction profile of the client and risk rating.
• Investment & Foreign Exchange department-Have to study different client’s files and discuss different investment related issues with the supervisor.
• Have to explain different issues to the supervisor.
• Help the clients to open locker account in investment department.
• Putting seals in different papers.
• ATM Desk-Taking requisition for ATM card from the clients, sending request to the head office and hand it over to the client after receiving it.
• Giving account statement to the clients, issuing cheque and helping people to do ibanking.
• I had to take an eight days training and give examination before joining in the branch. After joining in the branch I have to perform different works according to the orders of the manager and the senior principal officer.

I have to study different client’s files and discuss different investment related issues like the process of taking and giving investments, choosing the targeted customers, calculating the portion of profit and installment amount, documents needed to execute the investment etc. with the supervisor.

I have to help the clients to open account in account opening desk. I have to work with Electra debt and IBBL’s software for data entry and other computer related work. I have to take requisition for ATM card from the clients, sending request to the head office and hand it over to the client after receiving it. I also have to give account statement to the clients and issue cheque books.

Different Aspects of Job Performance:

From my observations in the bank while working there, I notice that the customers are satisfied with this bank. They are also getting new products and services like student account, Internet banking.

But I have some recommendation for the bank according to my observation. Those are given below:

Critical Observations and Recommendation:

• The bank need to open more ATM booths in different places as it has a huge number of customers.
• The bank can be more flexible to grant investment to the customers.
• It can provide training on internet to its employees.
• It needs to build up a stronger backup system. As it is a financial institution, missing of data caused by backup failure may turn out a huge loss.
• It can employ more female employee in the branch.
• The bank can make clear picture of the difference of interest and profit.
• They can use an understandable of different Islamic terms, they are using in their bank.
• They can upgrade their services more.

Conclusion:

Islam is a complete code of life where the detailed regulation for maintaining a proper economic life is given. Therefore Islami Bank Bangladesh Ltd. (IBBL) is trying to establish the maximum welfare of the society by maintaining the principles of Islamic Shari’ah which is based on Quran and Sunnah. Both Islam and Bangladesh bank discouraged luxurious lifestyle. Therefore, in terms of consumer investment IBBL also discourages luxurious lifestyle, and always tries to give investment only to those consumers who really need it. As a result, at a time it reduces the extensive usage of luxurious products and also upgrades the lifestyle of society by serving the deserved people.

Islami Bank Bangladesh Ltd. is the pioneer of the welfare activities in Bangladesh. It is emphasize equally in developing the rural areas of the country. The special feature of the Investment Policy of the Bank is to invest on the basis of profit-loss sharing system in accordance with the tenets and principles of Islamic Shari’ah. Earning of profit is not the only  motive and objective of the Bank’s Investment Policy rather emphasis is given in attaining social goal and objective in creating employment opportunities.

Having been considered the pro-efficiency character of Islamic banking and its beneficial impacts on the economy, government policy in Muslim countries should be in favor of transforming conventional banking system into Islamic banking.