2.1 History of Islami Bank Bangladesh Ltd.

Islami Bank Bangladesh PLC (IBBLPLC) is the largest commercial bank of

Bangladesh. It is the first Shariah-based Islamic bank in the South-East Asia
established in March 1983. The Bank is a joint venture Public Limited Company with
majority shareholding by foreign institutions and enlisted with Dhaka & Chattogram
stock exchanges. With 394 branch, 237sub-branch & 2700 Agent Banking Outlets,
the Bank possesses the largest branch network among the private sector banks in
Bangladesh. It renders general banking, commercial investment and foreign exchange
services with substantial CSR activities. Besides, the Bank is a global pioneer in and
largest operator of Islamic microfinance.

In the late seventies and early eighties, Muslim countries were awoken by the
emergence of Islami Bank which provided interest free banking facilities. There are
currently more than 300 interest free institutions all over the world. Islami Bank now
a days not only operate in almost all Muslim countries but have extended their wings
to the western world to serve both Muslim and non-Muslim customers. In case of
Islami Banking, the establishment of Mitghamar Local Savings Bank in 1963 is said
to be a milestone for modern Islami Banking. The history of Islami Banking can
nevertheless be traced back to the birth of Islam.

In 1974, Bangladesh signed the Charter of Islamic Development Bank and committed
itself to reorganize its economic and financial system as per Islamic Shari’ah (legal
framework of Islamic Ideology).

In 1978, Bangladesh recommended in Islamic Foreign Minister Conference in

Senegal towards systematic efforts to Islamic Banking.

In 1980, Foreign Minister Conference in Pakistan where Bangladesh Foreign Minister

Prof. Shamsul Hoq, proposed for taking steps for Islamic Banking. Further,
Bangladesh Bank sent representation abroad to study Islamic Banking System. Also,
International Seminar held in Dhaka inaugurated by Bangladesh Bank Governor for
early introduction of Islamic Banking.

In 1981, President of the People’s Republic of Bangladesh addressed the 3rd Islamic
Summit Conference held at Makkah and Taif suggested, ''The Islamic countries

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should develop a separate banking system of their own in order to facilitate their trade
and commerce.''

In 1982, IDB visited Bangladesh for study. They found contributions done by Islamic
Economics Research Bureau (IERB) and Bangladesh Islamic Bankers Association
(BIBA); they mobilized the seminars, public opinion through symposia & workshop.
Professional activities reinforced by Muslim Businessman Society (now reorganized
as Industrialists and Businessman Association). The body mobilized mainly equity
capital for emerging Islamic Bank. Finally, in 1983 Islami Bank Bangladesh Limited
(IBBL) came out to take the challenge of doing banking business.

Islami Bank Bangladesh Limited (IBBL) is considered to be the first interest free
bank in Southeast Asia. It was incorporated on 13-03-1983 as a Public Company with
limited liability under the companies Act 1913. The bank began operations on March
30, 1983, with major share by the foreign entrepreneurs. IBBL is a joint venture
multinational Bank with 66.12% of equity being contributed by the Islamic
Development Bank and financial institutions. The total number of branches 286. Now
the authorized capital of the bank is Tk. 20,000 million.

2.2 Islamic Banking

Islamic bank is a financial institution whose status, rules and procedures expressly
state its commitment to the principle of Islamic Shari’ah and to the banning of the
receipt and payment of interest on any of its operations. -OIC

Ziauddin Ahmed says, “Islamic bank is essentially a normative concept and could
be defined as conduct of banking in consonance with the ethos of the value
system of Islam.”

It appears from the above definitions that Islamic bank is systems of financial
intermediation that avoids receipt and payment of interest in its transactions and
conducts its operations in a way that it helps achieve the objectives of an Islamic
economy. Alternatively, this is a banking system whose operation is based on Islamic
principles of transactions of which profit and loss sharing (PLS) is a major feature,
ensuring justice and equity in the economy. That is why Islamic bank is often known
as PLS-banks.

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2.3 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 likely to lead to higher employment.

2.4 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.

2.5 Core Values

1. Trust in Almighty Allah

2. Strict observance of Islamic Shari’ah
3. Highest standard of Honesty, Integrity & Morale
4. Welfare Banking
5. Equity and Justice
6. Environmental Consciousness
7. Personalized Service
8. Adoption of Changed Technology
9. Proper Delegation, Transparency & Accountability

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2.6 Strategic Objectives

 To ensure customers' satisfaction.

 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 sharia’h 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.

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2.7 Corporate Information (As per Islami Bank Bangladesh Ltd.

Annual Report 2022) Publicly listed banking financial institution

Name of the firm 342

:
Prof. Mohammad Nazmul Hassan, PhD
Status
Mohammed Monirul Moula
:
21000
Number of branches
: Long Term “AAA” & Short Term “ST-1”

Chairman Rangs Nilu Square, House # 75, Road # 5, A

: Satmasjid Road, Dhaka 1209

Managing Director & CEO FAX: 02 9122785

: Email: dhanmondi@[Link]
Number of employees : Website: [Link]
Credit rating Pioneer of Welfare-Oriented Banking
:

Corporate office :

Motto :

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2.8 Products & Services

2.8.1 Deposit Products in Local Currency

 Al-Wadeah Current Account (AWCA)

 Mudaraba Savings Account (MSA)
 Mudaraba Special Notice Account (MSNA)
 Mudaraba Special Savings (Pension) Account (MSSA)
 Mudaraba Term Deposit Account (MTDA)
 Mudaraba Savings Bond Account (MSBA)
 Mudaraba NRB Savings Bond (MNSB)
 Mudaraba Hajj Savings Account (MHSA)
 Mudaraba Waqf Cash Deposit Account
 Mudaraba Monthly Profit Deposit Account
 Mudaraba Muhor Savings Account
 Students Mudaraba Savings Account
 Mudaraba Farmers Savings Account
 Mudaraba Upohar Deposit Scheme (MUDS)
 Mudaraba Industry Employees Saving Account (MIESA)
 Mudaraba Payroll Account (MPA)
 Mudaraba School Students Savings Account
 Mudaraba Priority Savings Account
 Mudaraba Bibaho Savings Account (MBSA)
 Mudaraba Senior Citizen Monthly Profit Deposit Scheme (MSCMPDS)

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  Mudaraba Education Savings Scheme
 Mudaraba Expatriate Housing Deposit Scheme (MEHDS)

2.8.2 Deposit products in Foreign Currency

 Mudaraba Foreign Currency Account (MFCA)

 Mudaraba Exporters’ Retention Quota Account (MERQ)
 Foreign Currency Account (FCA)
 Foreign Currency Account (ERQ)
 Foreign Currency Account of EPZ Enterprise
 Resident Foreign Currency Deposit Account (RFCD)
 Non-Resident Foreign Currency Account of Exchange Houses/Banks
 Non Resident Investors Taka Account (NITA) for foreign portfolio Investors.
 Non-Resident Taka Account (NRTA) for Foreign Direct Investors.
 Foreign Currency Account for EPZ Companies (FCA-EPZ)
 Foreign Currency Account for Recruiting Agency of women workers abroad

2.8.3 Investment Products & Schemes

 Investment Products
 Bai-Murabaha
 Bai-Muajjal
 Bai-Istijrar
 Bai-Salam
 Bai-Salam (Pre-shipment)
 Bai-Istisna  Mudaraba
 Musharaka
 Musharaka Documentary Bill (MDB) Inland
 Musharaka Documentary Bill (MDB) in Foreign Currency
 Musharaka Investment in Potato Storage
 Hire Purchase under Shirkatul Melk (HPSM)
 Murabaha Post Import (MPI)
 Murabaha Import Bills (MIB)
 Murabaha Import LC

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  Murabaha Foreign Currency Investment (MFCI) under EDF
 Murabaha Foreign Currency Investment (MFCI) under Balance of MFCD A/C
 Bai-Muajjal Back to Back Bills
 Bai-as-Sarf (Foreign Documentary Bill: FDB)
 Bai-as-Sarf (Foreign Currency Cheques/Drafts: FCD)

2.8.4 Welfare-oriented Investment Schemes

 Household Durable Scheme (HDS)

 Housing Investment Program for Govt.
 Employees (HIPGE)
 Housing Investment Scheme (HIS)
 Real Estate Investment Program (REIP)
 Transport Investment Scheme (TIS)
 Car Investment Scheme (CIS)
 Investment Scheme for Doctors (ISD)
 Small Business Investment Scheme (SBIS)
 Agriculture Implements Investment Scheme (AIIS)
 Rural Development Scheme (RDS)
 Micro Enterprise Investment Scheme (MEIS)
 Urban Poor Development Scheme (UPDS)
 Micro Industries Investment Scheme (MIIS)
 Women Entrepreneurs Investment Scheme
 Palli Griha Nirman Beniyog Prakalpa
 NRB Entrepreneurs Investment Scheme (NEIS)
 Solar Panel Investment Scheme (SPIS)

2.8.5 Offshore Banking Unit (OBU) Products

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 Deposit Products
 Al Wadiah Foreign Currency Account (AWFCA).
 Mudaraba Foreign Currency Deposit Account (MFCDA).
 Mudaraba Foreign Currency Term Deposit Receipt Account (MFCTDRA)

2.8.6 Remittance Services Foreign

 Remittance Services
 Central Crediting Account
 Issue cheque book centrally for expatriate.
 Payment of 3rd Bank Remittance through BFTN.
 Payment of Spot Cash Remittances  Centrally NRB Accounts Opening
 SMS Notification  SMS Push Pull Service
 Maintaining NRD & NRT Account
 Agent-Banking remittance payment
 Remittance Card
 SWIFT msg. payment
 API service.

2.8.7 Inward Remittance

 Electronic fund Transfer

 Spot cash
 Encashment of cash Foreign Currency
 Collection of FC Cheques / drafts
 Payment of Foreign TT & DD (FTT & FDD)

2.8.8 Outward Remittance

 Travel purpose
 Study purpose/Student File
 Medical purpose
 Issuance of Foreign TT & DD (FTT & FDD)
 Selling/Issuance of Foreign Currency note
 Commercial Remittance
 Different Private Remittance

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2.8.9 Treasury Activities

 Dealing Room Operations

 Foreign Exchange Operations
 Money Market Operations

2.8.10 Money Market Operations

 Placement to others Islami Bank & Financial Institutions.

 Bangladesh Government Islamic Investment Bond (BGIIB)
 Islamic Interbank Fund Market (IIFM)

2.8.11 Forex Investment Products

 Bill Financing under Mudaraba Documentary Bills (Mura-UPAS) against

Usance import Bills
 Bill Financing under Mudaraba Documentary Bills (HPSM-UPAS) against
Usance import Bills
 Bill Financing under Mudaraba Investment for MDB in FC against Inland
Export Bills
 Import Financing
 Export Financing
 Short term Murabaha
 Post-Shipment Financing (Bai-as-Sarf, MDB in FC)

2.8.12 Cash Service

 2,856 Own ATM and above 12,000 shared ATM

 126 IDM (Islami Bank Deposit Machine)
 47 Sheba Ghars (Islami Bank Electronic Booth)
 2,694 Agent Banking outlets
 Connectivity with NPSB & VISA network
 24 hour support service for ATM
 Visa Debit Card

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  Khidmah Credit Card
 Hajj Card
 Travel Card
 Business Expenses Card
 i-PaySafe: e-Commerce Payment Gateway
 IBBL Mobile Banking: mCash

2.8.13 Corporate Services

 Corporate Salary Payment, Free/reduced charges of ATM,

 Standing Instruction facility for depositing MSS & Hajj A/c,
 Existing BEFTN facilities through Bangladesh Bank,
 Existing BACPS service through Bangladesh Bank,
 Existing RTGS service through Bangladesh Bank,
 Crediting salary instantly throughout the Country,
 Centralized Investment Proposal Processing System (CIPPS),
 Centralized foreign trade processing system,
 IBBL Online money transfer,
 mCash withdrawal From ATM.

2.8.14 Other Value Added Services

 Cellfin Services
 Payment Order (PO)
 Demand Draft (DD)
 Locker Service

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  Quard against TDR/MSS/MMPDS/MSB/ MNSB
 IBBL Web Portal (i-Banking)
 Letter of Credit
 Back to Back Letter of Credit
 Bank Guarantee  Foreign Bank Guarantee
 Export Bills Collection
 Bonded Warehouse facilities to exporters
 Duty Draw Back facilities to exporters
 Substitute Cash Assistance
 SWIFT
 Automated Clearing
 IBBL Contact Center
 Agent Banking Services
 Phone Banking/SMS Banking
 Point of Sale (POS)
 IBBL iSmart (Android Apps)
 Payroll Software
 Dissemination of information through Web-site EFT
 Foreign Currency endorsement
 School Fees Payment Services

2.8.15 Services through Islami Bank Foundation

 Islami Bank Hospitals

 Islami Bank Medical College, Rajshahi
 Islami Bank Community Hospitals Islami Bank Nursing Training
Institute
 Islami Bank Institute of Health Technology
 Islami Bank Homeopathic Clinics
 Monorom: Islami Bank Crafts & Fashion
 Islami Bank Institute of Technology
 Islami Bank International School and College
 Islami Bank Model School

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  Islami Bank Mohila Madrasah
 Bangladesh Cultural Centre
 Distressed Women Rehabilitation Centre

2.9 Milestone

2021-Present

40th Founding Anniversary Opening of 2500th Agent

on 30th March 2023 Banking Outlet: 29.08.2021

Issuance of 2nd Mudaraba Opening of 200th Sub-

Perpetual Bond (MPB): 2022 branch: 23.11.2021

2016-20

Opening of 2000th Agent

Banking outlet: Launching of Cellfin

13.12.2020 App: 30.11.2020

Opening of 1500th Agent

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Banking outlet: Opening of 100th Sub-
branch: 27.09.2020
27.09.2020
Opening of 100th Agent Opening of 1st Agent
Banking outlet: Banking Outlet:
10.05.2018 15.07.2017

Launching Internet
Opening of 500th Own
Banking app (iSmart):
ATM Booth: 18.10.2016
30.03.2016

2011-15

Opening of 300th Launching of Sheba

Branch: 09.09.2015 Ghar: 18.03.2015

10 Million Deposit
Launching of Credit Card
Account: 16.04.2014
(Khidmah): 27.05.2014

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Entered into the World’s
Deposit crosses Tk. Top 1,000 Banks’ list:
5,00,000 million:
2012
 Introduction of Deposit
Machine (IDM):
11.10.2012

Launching of Offshore
Banking Unit:
2003-10 04.01.2011

Formation of Islami
Formation of Islami
Bank Capital Bank Securities Limited
Management Limited: (IBSL): 22.03.2010
01.04.2010

1st Position of IBBL in

Opening of 200th
Inward Remittance since:
Branch: 21.06.2009
31.12.2007

Issuance of 1st Mudaraba

In-house Core Banking
Perpetual Bond (MPB):
2007 Software: 02.04.2005

Joining in CDBL: 4th Rights Share Issue:

29.12.2004 2003

1995-2000

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3rd Rights Share issue: Head Office in own

 Enlisting at Chattogram
Stock Exchange:
07.03.1996

2.10 Organizational Structure

Shari’ah Supervisory
Committee
Review Committee
Board of Directors
Chairman

Executive Committee Audit Committee

Islami Bank Islami Bank Capital IBF

Securities Limited Management Limited

Managing
Director

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Shari’ah Board Secretariat

Secretariat Division
 Figure 1: Organizational Structure of Islami Bank Bangladesh Limited.
Source: Annual Report of IBBL year 2022

2.11 SWOT Analysis

 Strengths
1. Adequate finance: Islami Bank Bangladesh Ltd. has adequate finance. That is
why; they need not to borrow money from Bangladesh Bang or any other.
2. More funds for investment: For adequate financial ability, they can provide
more investment facility to their rather than other Banks.
3. Honest and reliable employees: All of the employees of Islami Bank are
honest and reliable. They are always devoted themselves to the clients for
better customer.
4. Religious feelings of the people: Most of the people of Bangladesh are
Muslim and they are trusted in superior performance of IBBL as a Sariah
based-Islamic Banking.

 Weaknesses
1. Lake of adequate employees: Islami Bank Bangladesh Ltd. has very limited
human resources compared to its financial activities.

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 2. Lake of up-to-date equipment: IBBL has lack of modern technologies and
equipment like adequate online facilities as well as cash card and credit card
system.
3. Deficiency of expertise: Many of the employees are unskilled and from them,
superior performance is unexpected to survive in the national economy as
well as in the world economy.
4. Lake of advertising: IBBl has lack of aggressive advertising like other banks.
They don’t telecast any attractive advertise in the media.
5. Centralized decision making: The decision making of the bank is too many
centralized. No decision is made without the authorization of the head office.

 Opportunities
1. Innovative and modern customer service: This bank can introduce more
innovative and modern customer services to its customers to survive better in
the competition market.
2. Retaining vast customer: IBBL has a vast opportunity to hold most of the
customers by extending its banking operation all over the country as most of
the people of Bangladesh are religious minded.
3. Poverty alleviation: IBBL has a great opportunity to save the county’s poor
people from being taking loan from different NGOs or few banks with higher
interest rate.
4. Special Image: IBBL has created special image to the people as a more
reliable bank. People believe that if they keep their money in Islami bank it
will be more secured than other banks.

 Threats
1. Rules and regulation: Rules and regulation of Bangladesh Bank defers with
Islami banking system. So they have to face various problems to operate their
activities according to the Islamic Shari’ah.

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2. Lower salary structure: Now many of the Banks are hiring young talent and
expertise employees with higher remuneration where IBBL could not hire
skilled manpower because of lower salary structure compared to other banks.
3. Islami banking system introduced by conventional banking: Few other
conventional banks have opened their Islamic Banking Branch.

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