diposit mixing of shahjalal islamic bank

Assignment on:

Deposit mix of

Shahjalal Islami Bank

Submitted to:

Mr. Md. Shahidul Islam

Lecturer

Department of Banking

University of Dhaka

Submitted by:

Name ID

Md. Mezbaul Haider 16-030

Md. Mashrur Ali 16- 031

Rafsan Mahtab 16-087

Nazim Reza 16-011

Tauhidul Islam 16-071

Rezaur Rahman 16- 040

Md. Nahid Bulbul 16-078

Letter of Authorization

Date: April 19, 2010

Students of Principle and practice of banking

B-102, 1st year

BBA, 16th batch

Department of Banking

Faculty of business studies

University of Dhaka, Bangladesh.

Dear students,

You are here assigned a report on “Deposit mixing of Shahjalal Islami Bank Ltd” in this course

presentation.

Assigned report must follow a standard system and methodology and should contain sufficient

information. The university will appreciate any additional benefit that can be obtained from your report.

You are required to submit the report on April 22, 2010 online.

I wish you best of luck.

Sincerely,


Letter of Transmittal

Date: April 22, 2010


Course Instructor

Principle and practice of banking

Department of banking

Faculty of business studies

University of Dhaka, Bangladesh.

Dear Sir,

It gives us pleasure to submit the report on “Deposit mixing of Shahjalal Islami Bank Ltd” as you

authorized us to prepare by April 22, 2010.

It was fantastic opportunity for us to prepare the report under your guidance, which really was a great

experience for us. We have collected the information from Shahjalal Islami Bank Ltd and text book.

We have worked hard and tried our best to prepare the report. We will be very pleased to provide

further information if necessary.

Sincerely,

Md. Mezbaul Haider 16-030

Md. Mashrur Ali 16-031

Rafsan Mahtab 16-087

Nazim Reza 16-011

Tauhidul Islam 16-071

Rezaur Rahman 16-040

Md. Nahid Bulbul 16-078

Acknowledgement

At first, we would like to thank our respective course teacher Mr. Md. Shahidul

Islam for assigning us such an interesting topic that we can eagerly work on. We

gratefully declare that without her guidelines and suggestions it would not be

possible for us to complete this task.

Many of our fellows and seniors here helped us a lot by generously supplying

comments; suggestions and giving inspiration .We have collected data from

internet, many books and business journals. We have discussed and worked as a

group and finally we have created an assignment as a group.

Last but not the least, our hearts felt thanks to our family members, classmates

and seniors for helping us in creating this report.

EXECUTIVE SUMMARY

We are assigned to analyze the Deposit Mix of a bank this report is

about the deposit mixing of Sahajalal Islamic Bank. Sahajalal Islamic

Bank is one of Islamic banks in our country has started its activity from

10th May 2001.it has 34 branches. Among them we chose 5 branches

and analyzed their deposit mix in the year 2009 to make this report.

Mainly the bank has four types of deposit accounts - Al-Wadiah

current deposit; Mudaraba savings deposit, Mudaraba short-notice

deposit, Mudaraba term deposit. We focused on all of the accounts to

make this report. We collected data from both Primary sources

(interviews) & Secondary sources (monthly statements of deposits).

We applied the Empirical method & used some mathematical &

statistical tools, tables, MS Excel software etc. Then we analyzed the

reasons of the deviations of the deposits among the branches through

the year 2009 & showed our findings. Considering its collection of

money we get that in almost all of its branches, the amount of

Mudaraba term deposit is highest. But in case of account number the

bank has Mudaraba savings deposit account most. Besides these we

have included a total overview of the total deposit mixing of the

bank. At the very end we analyzed the cyclical variation branch wise.

Whenever we found mismatch between our desired results & the

actual results we recommended for those branches.

Shahjalal Islami Bank:

Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation

in accordance with principle of Islamic Shariah on the 10th May 2001 under the

Bank Companies Act, 1991. During last eight years SJIBL has diversified its

service coverage by opening new branches at different strategically important

locations across the country offering various service products both investment &

deposit.

Islamic Banking, in essence, is not only INTEREST-FREE banking business, it

carries deal wise business product thereby generating real income and thus

boosting GDP of the economy.

Board of Directors enjoys high credential in the business arena of the

country, Management Team is strong and supportive equipped with excellent

professional knowledge under leadership of a veteran Banker Mr. Muhammad Ali.

Company’s Vision

To be the unique modern Islami Bank in Bangladesh and to make significant

contribution to the national economy and enhance customers' trust & wealth,

quality investment, employees' value and rapid growth in shareholders' equity.

Company’s Mission

To provide quality services to customers.

To set high standards of integrity.

To make quality investment.

To ensure sustainable growth in business.

To ensure maximization of Shareholders' wealth.

To extend our customers innovative services acquiring state-of-the-

art technology blended with Islamic principles.

To ensure human resource development to meet the challenges of

the time.

Our Strategies

To strive for customers best satisfaction & earn their confidence.

To manage & operate the Bank in the most effective manner.

To identify customers needs & monitor their perception towards

meeting those requirements.

To review & updates policies, procedures & practices to enhance the

ability to extend better services to the customers.

To train & develop all employees & provide them adequate resources

so that the customers needs are reasonably addressed.

To promote organizational efficiency by communicating company

plans, polices & procedures openly to the employees in a timely

fashion.

To cultivate a congenial working environment.

To diversify portfolio both the retail & wholesale markets.

Our Strategies

• To strive for customers best satisfaction & earn their confidence.

• To manage & operate the Bank in the most effective manner.

• To identify customers needs & monitor their perception towards

meeting those requirements.

• To review & updates policies, procedures & practices to enhance the

ability to extend better services to the customers.

• To train & develop all employees & provide them adequate resources

so that the customers needs are reasonably addressed.

• To promote organizational efficiency by communicating company

plans, polices & procedures openly to the employees in a timely

fashion.

• To cultivate a congenial working environment.

• To diversify portfolio both the retail & wholesale markets.

Al Wadiah Current Deposit Accounts:

Minimum amount for Current Deposit Account

Al-Wadiah Current Deposit Accounts shall be opened with a minimum of Tk. 5,000/ which is also the minimum balance required to be maintained by the Account holder.

Payment of funds on demand

Funds in the Al Wadiah Current Deposit shall be payable on demand in accordance with normal banking traditions, during the banking hours.

No Profit

No profit on Al Wadiah Current Deposit Account balances shall be allowed to the account holder.

Sevice charge

Service charge is applicable in case of this account.

Mudaraba Savings Deposit Accounts (MSD):

Minimum amount for Mudaraba Savings Deposit Account

a. Mudaraba Savings Deposit Account shall be opened with a minimum of Tk.2,000/ which is also the minimum balance required to be maintained by the Account holder for sharing profit on his deposit.

b. The deposit is accepted on the basis of Mudaraba principle of Islamic Shariah and the fund is invested in accordance with Islamic principles .

Rate of profit

Profit on Mudaraba Savings Deposit Accounts shall be allowed at the rate as advised by Head Office from time to time under Mudaraba Principle.

Profit application of

Profit is to be applied on half yearly basis i.e. in June & December and Profit shall be accrued in each month.

Withdrawals process

a. Maximum withdrawals of Tk.25000/ from Mudaraba Savings Deposit Account twice a week are admissible.

b. Withdrawals from Mudaraba Savings Deposit Account up to a maximum 25% of deposits, which should not exceed Tk. 25,000/ in a week.

No Overdrawing

No Mudaraba Saving Account shall be allowed to be overdrawn

Mudaraba Short Notice Deposit Accounts (MSND):

Period of Notice

1. The deposits held in these accounts shall be payable on short notice period but the notice must not be less than 7 days.

2. The deposits may be accepted for the period and rates of profit are fixed by Head Office from time to time.

a. Profit shall be paid only for each day held, but profit on notice period will be forfeited; if withdrawn without notice.

b. Profit on MSND account shall be applied on yearly basis (i.e. December each year)

Mudaraba Term Deposit Accounts (Mtd):

Amount & the period of Mudaraba Term Deposit

a. Mudaraba Term Deposit Accounts have tol be opened for a fixed period varying from 90 days, 180 days, 360 days or above and are payable at a fixed date of maturity.

b. Mudaraba Term Deposit Accounts can be opened with a minimum deposit of Tk.2000/.

Rate of profit

Profit on Mudaraba Term Deposit Account shall be at rates fixed by Head office from time to time depending on their period of maturity.

Available deposit schemes:

1. Mudaraba monthly income

2. Mudaraba millionaire

3. Mudaraba hajj deposit

4. Mudaraba housing deposit

5. Mudaraba small business

6. Mudarba mohor deposit

7. Mudaraba marriage deposit

8. Mudaraba education deposit

9. Mudaraba special term deposit

Mudaraba Monthly Income Deposit Scheme:

This is a Deposit Scheme based on Shariah Principles where the depositor/investor gets monthly income from the profits of their one-time deposit with the bank. . The scheme is designed to attract the retirement benefits of service holders and those persons who intend to meet the monthly budget of their families from the income out of their deposit.

Mudaraba Millonaire Scheme:

This is a deposit scheme for those people who wish to start a small business in future or any other person who wants to get a million taka after a specific period. Clients deposit their amount in this scheme every month and get 1 million taka at its maturity.

Duration Monthly

Installment

Estimated amount after

maturity

15 years 2,050/- Tk. 10 lac

20 years 1,050/- Tk. 10 lac

25 years 550/- Tk. 10 lac

Mudaraba Hajj Deposit:

Hajj is one of the most important prayers of the Muslim people. But it needs huge amount of money to complete Hajj. To ease the arranging of this money SIBL has introduced this deposit scheme.

Mudaraba housing deposit:

By this deposit scheme clients can get their desired amount of money to build their own address. There are several time periods for this scheme such as 5, 10,15or 20 years.

Mudaraba Marriage Deposit:

SIBL has introduced this kind of deposit scheme to make the

matrimony more trouble-free as it is a wealth overwhelming process and a great matter of concern for

parents. Parents can assure a secured future for their children by opening an account like this which is

the purpose of this deposit scheme.

Mudaraba Lakhopoti Deposit:

Small amount of money of a poor person can be increased to an

amount of 1 lakh taka by saving money under this deposit scheme which is going to be a huge financial

gain for the family of that poor person. Poor people can save their spare money in this deposit scheme

which will gradually boost to a pleasing level. SIBL has taken the initiative of introducing this deposit

scheme to encourage the poor community to maintain their small savings.

Mudaraba Mohor Deposit:

SIBL has set off this deposit scheme to protect the right of a wife on her

husband and to curtail the liability of a husband as paying mohor(wealth that must be given to a wife by

her husband) is obligatory in Islam. Any Bangladeshi married or unmarried man can save money under

this deposit scheme.

Mudaraba Education Deposit:

Children of the poor people can not get higher education as the expenditure

of education gets higher from primary level to higher level. That is why the poor students can not get

higher schooling which also causes for a country to loose a huge number of bright sophisticated civilians.

Taking this matter in concern SIBL has introduced this deposit scheme which will help guardians to

continue the cost of education of their children if they save money by opening an account under this

deposit scheme.

Mudaraba special term deposit:

Under this deposit Scheme an account holder can receive expected proceeds

from the beginning of investment. Account holder can withdraw the money anytime. After getting

proceeds the account holder can again invest the money.

Profit Rate on Various Accounts:

Type of account Profit Rate Profit Rate

1/1/2009 31/12/2009

Al-Wadiah Current Accout N/A N/A

Mudaraba Savings Deposit 5.50% 5.50%

Mudaraba Short Notice Deposit 5.00% 5.00%

Mudaraba Term deposit 8.00% 8.75%

Charges On Various Accounts:

Description 1/1/2009 31/12/2009

Tk. 0 to 10000 No charge No charge

Tk. 10,001 to tk. 20,000 120 No charge

Tk. 20,001 to 100,000 120 120

Tk. 100,001 to tk. 1,000,000 250 350

Tk. 1,000,001 to tk. 10,000,000 550 1000

Tk. 10,000,001 to tk. 50,000,000 2500 5000

Over 50,000,000 tk. 5000 10000

Condition of the accounts at the beginning of the year 2009:

Mitford Branch

Type of account Number of account

Total Amount

Al-Wadiah current deposit 980 5,55,80,534.92

Mudaraba savings deposit 1170 5,28,31,217.86

Mudaraba short-notice deposit 104 3,05,28,937.96

Mudaraba term deposit 280 120,60,66,330.69

Condition of the accounts at the end of the year 2009:

Mitford Branch

Type of account Number of account

Total Amount






Motijheel Branch:

Type of account Number of

account

Total Amount






Motijheel Branch:


account

Total Amount






Motijheel Foreign Exchange branch


account

Total Amount








account

Total Amount





Account wise Arithmetic mean and Standard Deviation

Mitford branch

type of account A. mean Standard

deviation

Al-Wadiah current deposit 1025.301488

44.99899005

Mudaraba savings deposit 1317.775678

125.8775075

Mudaraba short-notice deposit 107.6225717

2.934689844

Mudaraba term deposit 370.5772296

99.55506716

Motijheel Branch:

type of account A. mean

Standard

deviation


69.38040809


160.8759462


20.96425923

Mudaraba term deposit 318.3996854 7.990009484


Type of account A. mean Standard

deviation


52.49821076


134.7638047


17.46234292


15.99453897

Branch wise Arithmetic mean and Standard Deviation:

Mitford branch

Type of account A. mean Standard

deviation


3.609025201


5.011379232


4.900939757

Mudaraba term deposit 1102207818

6.333506343

Motijheel Branch:

Type of account A.mean Standard

deviation


4.925825887


5.016218394


4.522987518


5.69680982


type of

account

A. mean Standard

deviation

Al-Wadiah current

deposit

34881600.29

3.515088291

Mudaraba savings

deposit

73321989.68

5.152718707

Mudaraba short-

notice deposit

53467260.55

4.513124824

Mudaraba term

deposit

783298302.3

5.383915684

Conclusion:

Throughout the report we can find that SIBL has been providing

several account services as well as various deposit schemes to their clients. We

have also found from the data that they have been successful to attract

customers. If they employ more expert manpower they can expand their

business more quickly.

diposit mixing of shahjalal islamic bank

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