An Analysis of Investment & General Banking of
Islami Bank Bangladesh Limited.
Submitted To:
Department of Business Administration
Northern University Bangladesh
Submitted By:
Ramendra Nath Bhowmik
RMBA-ID NO-02090201961
Department of Business Administration
Northern University Bangladesh
Date of Submission – 19th June 2011
Declaration:
I do hereby declare that this report entitled “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” Submitted by me to Department of Business Administration Northern University Bangladesh, for the degree of Masters of Business Administration is an original work.
I also declare that it has not been submitted earlier either partly or wholly to any other University or Institution for any Degree, Diploma, Associate-ship, Studentship, Fellowship and other similar title or prizes.
Ramendra Nath Bhowmik
ID NO-02090201961
(Major in Finance)
Department of Business Administration
BONAFIDE CERTIFICATE:
This is to certify that this report entitled “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” submitted to Northern University Bangladesh, in connection with the institute internship program is a bonafide record of work done by Ramendra Nath Bhowmik under my supervision at the IBBL from “19-04-2011 program..” to “ 17-06-2011”.
……………………….. ………………………
Md. Shoriful Islam Committee Chairman
Senior Lecturer
Department of Business Administration
Northern University, Bangladesh
LETTER OF TRANSMITAL:
June 16, 2011
To,
Md. Shoriful Islam
Sr. Lecturer.
Department of Business Administration
Northern university Bangladesh
Sub: Submission of Internship Report about “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.
Dear Sir,
I am pleased to submitting my internship report as a partial fulfillment of MBA program. I tried my best to present this internship report on according “An Analysis of Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” I tried my best to work sincerely to cover all aspects regarding the matter. Through I faced some limitations to prepare the report due to scarcity of organized data , time limitation and not enough knowledge about banking sector, I have thoroughly enjoyed in preparing this internship report which has contributed significantly to my understanding on the essentials and importance practical knowledge .
I believe that this internship program has enriched both my knowledge and experience. If you have further queries regarding the report, please let me know.
Sincerely yours
Ramendra Nath Bhowmik
ID NO-02090201961
(Major in Finance)
Department of Business Administration
ACKNOWLEDGEMENT:
First I would like to thank almighty Allah for blessing me with the ability to write and submit this report. A large number of individuals have contributed directly and indirectly in preparation of this report. I am thankful to all of them for their assistant and encouragement. First, I delicate all the credits to the Northern University Bangladesh.
Special mention must be made t some persons from whom I have received continuous support without which it might not be possible for me to complete the report. Among them Md. Shoriful Islam, Sr. Lecturer of Business Department of Northern University Bangladesh who has spent his valuable time in supervising my study very closely and cordially. I cannot deny his suggestions to apply new indebted to his contribution.
I would like to thanks my gratitude to Md. Yeanur Rahman (Senior Vice President & Manager) of Paltan branch of Islami Bank Bangladesh Limited. I also would like to thank Md. Hedayet Ullah Course Coordinator ofIslami Bank Training and Research Academic of IBBL for this full support and encouragement. I am also grateful to other personnel of this ac ademy. They tried their best to manage their valuable time for me in furnishing information, as well as gave me suggestion to conduct the study.
I also express my thanks and gratitude to the authority of IBBL to allow me to complete my practical orientation at their bank and helped me by providing all sorts of information and financial data for the preparation of this report. I would like to thank all other officers in this branch to help me despite tremendous work pressure. I would very much appreciate and sincerely acknowledge suggestions from friends for improving of this report.
TABLE OF CONTENT:
| Chapter | Topic | Page Number |
| Executive summary | i-ii | |
| Chapter-1 | Introduction | |
| 1.1 | Introduction | 1 |
| 1.2 | Origin of the report | 1 |
| 1.3 | Scope of the study | 1 |
| 1.4 | Objective of the study | 2 |
| 1.5 | Methodology of the study | 2 |
| 1.5.1 | Secondary source | 2 |
| 1.5.2 | Primary source | 3 |
| 1.5.3 | Limitation of the study | 3 |
| Chapter-2 | Profile of the Islami Bank Bangladesh limited | |
| 2.1 | Definition and concept of Islami Bank | 4 |
| 2.2 | Basic objective of IBBL | 4 |
| 2.3.1 | Prohibition of interest | 5 |
| 2.3.2 | Investment based on profit | 5 |
| 2.3.3 | Investment in Halal business | 5 |
| 2.4 | Mission of IBBL | 5 |
| 2.5 | Vision of IBBL | 6 |
| 2.6 | Characteristics of IBBL | 6 |
| 2.7 | Funcon of IBBLti | 6 |
| 2.8 | Corporate information at glance | 7 |
| Address of the Head office | 8 | |
| 2.9 | Hierarchy Management of IBBL | 9 |
| 3.1 | Paltan Branch: | 10 |
| 3.2 | Deposit products of Paltan Branch: | 10 |
| 3.3 | Investment product of Paltan Branch | 10-11 |
| 3.4 | Hierarchy management of Paltan Branch | 12 |
| 3.5 | Address of the Paltan Branch | 13 |
| 3.6 | Functional department of Paltan Branch | 13 |
| 4.1 | Internship Duties & Position | 14 |
| 4.2 | Duties performed in General Banking | 14-17 |
| 4.3 | Leaning points from my internship work at different department | 17-18 |
| 5.1 | Introduction | 19 |
| 5.2 | Functional Department: | 19 |
| 5.3 | Modes of investment | 20 |
| 5.4 | Bai-Mechanism (Trading Mode): | 20 |
| 5.5.1 | Bai-Murabaha: | 20-23 |
| 5.5.2 | Bai-Salam: | 23-24 |
| 5.5.3 | Application of Bai-Salam | 24 |
| 5.5.4 | Bai-Istisna’a: | 24-25 |
| 5.5.5 | Quard | 25 |
| 5.5.6 | Share Mechanism | 26 |
| 5.6.1 | Mudaraba (Share Mechanism): | 26-27 |
| 5.6.2 | Musharaka (Partnership): | 27-28 |
| 5.7 | Ijara mechanism (Leasing Mode | 28 |
| 5.7.1 | Sirkatul Melk: | 29 |
| 5.7.2 | Ijarah: | 29-31 |
| 5.7.3 | Sale: | 31 |
| 5.8. | Investment procedure: | 31 |
| 5.8.1 | Induction of Client: | 31-32 |
| 5.8.2 | Application: | 32-33 |
| 5.8.3 | Categorization: | 33 |
| 5.8.4 | Processing and Appraisal: | 33-35 |
| 5.8.5 | Sanction: | 35-36 |
| 5.8.6 | Documentation stage: | 36 |
| 5.8.7 | Disbursement Stage: | 37 |
| 5.8.8 | Monitoring and Recovery Stage: | 37 |
| 5.9.1 | Household Durables Scheme | 38 |
| 5.9.2 | Housing Investment Scheme: | 38 |
| 5.9.3 | Officials of the Defense Forces: | 38 |
| 5.9.4 | Real Estate Investment Program: | 38 |
| 5.9.5 | Transport Investment Scheme: | 39 |
| 5.9.6 | Car Investment Scheme: | 39 |
| 5.9.7 | Investment Scheme for Doctors: | 39 |
| 5.9.8 | Small Business Investment Scheme: | 39 |
| 5.9.9 | Agriculture Implements Investment Scheme: | 40 |
| 5.9.10 | Micro-Industries Investment Scheme: | 40 |
| 5.9.11 | Rural Development Scheme: | 40-41 |
| 5.10 | Some Islamic New Investment Products: | 41-44 |
| 6.1 | Introduction: | 45 |
| 6.2 | Functions of General Banking: | 45 |
| 6.3 | Types of Account: | 46 |
| 6.4 | General Characteristics of deposit accounts: | 47 |
| 6.4.1 | Al-wadeeah Current Account(AWCA): | 47 |
| 6.4.2 | Mudaraba Savings Accounts (MSA) | 47 |
| 6.4.3 | Mudaraba shart notice | 47 |
| 6.4.4 | Mudaraba Term Deposit Receipt (MTDR) | 48 |
| 6.4.5 | Incidental Charge | 48 |
| 6.5 | General Practice in account opening section | 49 |
| 6.6 | KYC (know Your Customer) | 49 |
| 6.7 | Account Opening Register | 50 |
| 6.8 | Check Book | 50 |
| 6.9 | Account Closing | 50 |
| 6.10 | Account Transfer | 50 |
| 6.11 | Local Remittance | 51 |
| 6.11.1 | Pay Order (PO) | 51 |
| 6.11.2 | Demand Draft (DD) | 51 |
| 6.11.3 | Telegraphic Transfer (TT) | 52 |
| 6.12 | Clearing and Collection Department | 53 |
| 6.12.1 | Clearing | 53 |
| 6.12.2 | Cheque dishonor | 53 |
| 6.13 | Transfer Delivery | 53 |
| 6.14 | Debit Advice | 54 |
| 6.15 | Credit Advice | 54 |
| 6.16 | OBC | 54 |
| 6.17 | Cash Section | 56 |
| 6.18 | Dispatch Section | 56 |
| 6.18.1 | Inward dispatch | 56 |
| 6.18.2 | Outward dispatch | 57 |
| Chapter-7 | SWOT analysis | 58 |
| 7.1 | Strengths | 58 |
| 7.2 | Weaknesses | 58 |
| 7.3 | Opportunities | 59 |
| 7.4 | Threats | 59 |
| 7.5 | Findings about the Islami Bank Bangladesh Limited, Paltan Branch | 60 |
| Chapter-8 | Conclusion and Recommendation | 61-62 |
| 8.1 | Conclusion | 61 |
| 8.2 | Recommendations | 62 |
| References | 63 |
BBREVIATIONS:
AD : Authorized Dealer
ATM : Automated Teller Machine
AWB : Air Way Bill
BBL/C : Back to Back Letter of Credit
BIBA : Bangladesh Institute of Bankers Association
BL : Bill of Landing
C&F : Clearing & Forwarding
CCI & E : Chief Comptroller of Import & Export
CIB : Credit Information Bureau
CRF : Clean Report Finding
CSR : Corporate Social Responsibility
DP Note : Demand Promissory Note
EPB : Export Promotion Bureau
ERC : Export Registration Certificate
FCA : Foreign Currency Account
FDI : Foreign Direct Investment
FDBS : Foreign Documentary Bills for Collection
FSRP : Financial Sector Reforms Program
HS Code : Harmonic Symbolized Code
IBBL : Islami Bank Bangladesh Limited
IBC : Inward Bills for Collection
IBCA : Inter Branch Credit Advice
IBCT : Inter Branch Credit Transaction
IBDA : Inter Branch Debit Advice
IBTRA : Islami Bank Training & Research Academy
ICC : International Chambers of Commerce
IDB : Islamic Development Bank
IFC Act : Import & Export Act
IRC : Import Registration Certificate
L/C : Letter of Credit
LCAF : Letter of Credit Authorization Form
TR : Trust Receipt
MPI : Mura Post Investment
NFCD : Non Resident Foreign Currency Deposit
NRT : Non- Residence Dollar
OBC : Outward Bills for Collection
PAD : Payment Against Document
PRC : Proceeds Realization Certification
SWIFT : Society for Worldwide Inter Bank Financial Telecommunication
STD : Short Term Deposit
TC : Travel Checks
TIN : Tax Identification Number
UCPDC : Uniform Customers & Practices for Documentary Credit
Executive Summery:
As a student of NUB, Internship is an integrate part to accomplish the MBA degree. This report has been prepared on the basis of work experience in Paltan Branch of Islami Bank Bangladesh Limited with the instruction of Mr. Md. Shoriful Islam, Senior Lecturer in NUB. This report focuses my experience in Islami Bank Bangladesh Limited and has provided a clear idea about the activities and operational activities of Islami Bank Bangladesh Limited.
Basically IBBL is an Islamic Bank based on “Islamic Shariah”. It follows the alternative concept of Islamic Banking which represents unique human approach to credit and banking based on profit- oriented economy devoid of interest. In this regard IBBL has introduced a number of income generating programs for the millions of urban and rural poor people. With the objective in view IBBL has formulated a profitable investment option for the rich to invest and for the poor a credit program to earn and live in a better society with greater security and peace.
IBBL is operating in a three-sector banking system. Such as Formal, Non-formal and Voluntary sector. General Banking, Investment and Foreign Exchange are operated under the formal sector. Development and management of waqf and mosque properties, management and inheritance properties and joint venture for management of non-profit foundations, and charitable trusts and organizations are executed under the Voluntary Sector.
Internship functions have been performed in three departments (General Banking, Investment and foreign Exchange). Among the three departments of the bank more emphasize has been given to General Banking activities in order to prepare this report.
Basically report’s findings is cover three major areas, – “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” General Banking provides the foundation of banker customer relationship through opening account. This is the busiest department and the daily transaction of concerned to the customers for drawing of depository money, selling of instruments to them for remittance purpose, collection of their instruments providing other ancillary services to them and keep customer section busy. Other functions like- offering various types of account, remittance, clearing, cash section function. By these deposits IBBL provides many services to manage the need on customers.
In the case of import-export section IBBL shows better performance than other banks. The import and export business of IBBL has a gradual- increasing tend from 1983. But in order to capture higher market share than the competitors, the policy of IBBL in this regard should be more flexible and competitive than the present.
IBBL is performing well in terms of acquired assets and human resources of higher quality. IBBL will be more effective in our economy by adopting modern financial technology and extending their activities in human and social welfare.
