general banking activities and financial performance on social islami bank limited.docx

8/11/2019 General Banking Activities and Financial Performance on Social Islami Bank Limited.docx

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BACKGROUND OF THE STUDY

Bachelor of Business Administration is a specialized course. State University of Bangladesh

arranges a four year specialized course to provide some efficient graduates in this business

sector of the country. The whole course design is not limited within the theoretical boundary but it

also extends to the practical exposure through the internship program. After completion of 4

years in the BBA program of the School of Business and Social Studies, State University of

Bangladesh, three months organizational attachment is must. So the preparation and submission

of this report is partial requirement for the completion of the Bachelor of Business Administration

(BBA).This report is outcome of the three months long internship program conducted in Social

Islami Bank Limited (SIBL), one of the reputed private commercial banks of the country .While

working operating procedures carried out by the bank were observed and supportive effort with

the trainers, bankers & under the guidance of my faculty respective advisor Kazi Ayesha

Siddiqua.

This internship program has been prepared on the basis of my practical experience in thegeneral

banking.This report will also provide the essential informations how the private commercial

banks contribute for the economic development of the country.

I have tried my best to utilize the opportunity to enrich my knowledge on banking system and

incorporate it with the theoretical course.

OBJECTIVES OF THE STUDY

The objective of the study is to gather practical knowledge on banking system and operation. This

internship gives us a chance to co-ordinate with the theoretical knowledge and the practical

experience and to evaluate the performance of general banking of Social Islami Bank Limited.

The following are of objective for internship in bank:

General Objective

The general objective is to prepare & submit a report on the topic of General Banking Activities

and Financial Performance of Social Islami Bank Limited.

Specific Objective

To apply theoretical knowledge in the practical field.

To be familiar with the banking management system.

To have exposure to the functions of general banking section.

To analyze the service procedure of SIBL.

To familiarize the working hours, values and environment of the bank.

To analyze the financing system of the Bank and find out whether the bank needs any

improvement.
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To find out the contribution of private commercial banks for the economic development of the

country.

METHODOLOGY

Every report is prepared by following a concrete methodology. The success of the report

depends on the followed methodology in major portion. My study is performed based on the

information extracted from different sources collected by using a specific methodology. All the

methodology is mentioned below:

Primary sources

Practical desk work

Face to face conversation with the officer & client

Direct observations

Secondary sources

Annual reports of SIBL.

Files & Folders

Memos & Circulars

Daily diary (containing my activities of practical orientation) maintained by me,

Various publications on Bank,

Websites,

Different circulars sent by Head Office and Bangladesh Bank.

RATIONAL OF THE STUDY

There are three specific sectors in the SIBL. General banking, Investment & Foreign Trade are

those. Basically under those sectors SIBL play a vital role of the country. General banking is one

of the profitable sites for the all bank. On the other investment also a strong silt of the SIBL. But

SIBL (Social Islami Bank Limited) is most popular for its foreign trade. Besides it have very strong

relationship with the foreign customer. SIBL foreign trade policy is huge. Basically most of the

customer is made an import & export by the SIBL. So the foreign trade policy is selected by me to

submit a internship report up to Social Islami Bank Limited.

SCOPE OF THE STUDY

This report has been prepared based on general banking & financial performance. While

preparing this report I had a great opportunity to work. And this work experience gives me a idea

about in general banking activities & financial performance of SIBL Bank. It enhances my

practical knowledge in banking activity and I can be able to communicate with practical and

theoretical one.

LIMITATION

Due to confidentiality of the data, adequate data were not available.


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Supply of more practical and contemporary data is another shortcoming

The study may not be done very successfully due to inexperience.

On our schedule time we could not find the respondent. Because they were busy with their work

on that time.

Chapter: 2

Islami Banking Concept

Bismillahir Rahmanir Raheem

Those who take Riba (usury) will not stand (on the day of resurrection) except like the standing aperson beaten by Shaitan (Shatan) leading him to insanity. That is because they say: Trading is

only like Riba (usury), whereas Allah has permitted trading and forbidden Riba (usury).So

whosoever receives an admonition from his Lord and stops eating Riba (usury) shall not be

punished for the past: his case is for Allah (to judge); but whoever returns [to Riba (usury)], such

are the dwellers of the fire- they will be abide therein.

Surah Al-Baquarah, verse-275

Allah will destroy Riba (usury) and will give increase for Sadaqaat (deeds of charity, alms

etc.)And Allah likes not the disbelievers, sinners.


O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba [(usury)

(from now onward)], if you are (really) believers.


And if you do not do it, then take a notice of war from Allah and His Messenger; but if you repent,

you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and

you shall not be dealt with unjustly (by receiving less than your capital sums).


ISLAMI BANKING CONCEPT

Islamic banking refers to a system of banking or banking activity that is consistent with the

principles of Islamic law (Shariah) and its practical application through the development of Islamic

economics. Shariah prohibits the payment or acceptance of interest fees for the lending and

accepting of money respectively, (Riba, usury) for specific terms, as well as investing in

Messages

From theHoly Quran


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businesses that provide goods or services considered contrary to its principles (Haraam,

forbidden). While these principles were used as the basis for a flourishing economy in earlier

times, it is only in the late 20th century that a number of Islamic banks were formed to apply

these principles to private or semi-private commercial institutions within the Muslim community.

SCENARIO OF ISLAMI BANKING IN BANGLADESH

In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed

itself to reorganize its economic and financial system as per Islamic Shariah.

In January 1981, Late President addressing the 3rd Islamic Summit Conference held at Makkah

and Taif suggested, The Islamic countries should develop a separate banking system of their

own in order to facilitate their trade and commerce.

This statement of Late President indicated favorable attitude of the Government of the Peoples

Republic of Bangladesh towards establishing Islamic banks and financial institutions in thecountry. Earlier in November 1980, Bangladesh Bank, the countrys Central Bank, sent a

representative to study the working of several Islamic banks abroad.

In November 1982, a delegation of IDB visited Bangladesh and showed keen interest to

participate in establishing a joint venture Islamic bank in the private sector. They found a lot of

work had already been done and Islamic banking was in a ready form for immediate introduction.

Two professional bodies -Islamic Economics Research Bureau (IERB) and Bangladesh Islamic

Bankers Association (BIBA) made significant contributions towards introduction of Islamic

banking in the country. They came forward to provide training on Islamic banking to top bankers

and economists to fill-up the vacuum of leadership for the future Islamic banks in Bangladesh.

They also held seminars, symposia and workshops on Islamic economics and banking

throughout the country to mobilize public opinion in favor of Islamic banking. Their professional

activities were reinforced by a number of Muslim entrepreneurs working under the aegis of the

then Muslim Businessmen Society (now reorganized as Industrialist & Businessmen Association).

The body concentrated mainly in mobilizing equity capital for the emerging Islamic bank.

At last, the long drawn struggle to establish an Islamic bank in Bangladesh became a reality and

Islami Bank Bangladesh Limited was established in March 1983 in which 19 Bangladeshi

national, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of

the Middle East and Europe Including IDB and two eminent personalities of the Kingdom of Saudi

Arabia joined hands to make the dream a reality.

Later, other three Islamic Banks were established in the country.

OBJECTIVES OF ISLAMIC BANKING


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The objective of Islamic Banking is not only to earn profit but also to do good and welfare to the

people. Islam upholds the concept that money, income and property belong to ALLAH and this

wealth is to be used for the good of the society. The main objectives of Islamic Banking are as

follows:

1. To conduct interest free banking.

2. To establish participatory Banking instead of Banking on debtor-creditor relationship.

3. To invest through different modes permitted under Islamic Shariah.

4. To accept deposits on profit-loss sharing basis.

5. To establish welfare oriented Banking System.

6. To extend operation to the poor, helpless and low income group for their economic up liftmen.

7. To contribute in achieving the ultimate goal of Islamic economic system.

COMMON PRACTICES OF ISLAMIC BANKS IN MOBILIZATION OF FUND

The common practices of Islamic banks in the sources of funds may be described as follows:

1. Current Account

All Islamic banks operate current account on behalf of their client individuals and business firms.

These accounts are operated for the safe custody of deposits and for the convenience of

customers. There is little different between conventional banks as far the operation of current

accounts is concerned. There are two dominant views about current account. One is to treat

demand deposit as amnah (trust). A trust deposit is defined by the Jordan Islamic Banks as cash

deposits received by the bank where the bank is authorized to use the deposits at its own risk

and responsibility in respect to profit or loss and which are not subject to any conditions for

withdrawals or depositing.

2. SavingAccount

All Islamic banks operate saving accounts. It must be pointed out that any return on capital is

Islamically justified only if the capital is employed in such a way that it is expected to a business

risk. Savings accounts at Islamic Banks Generally operate as follows:

1. Savings accounts are opened with the condition that deposits provide the bank with an

authorization to invest.

2. Depositors have the right to deposit and withdraw funds.

3. The profits in savings accounts are calculated on the minimum balance maintained during the

month. Depositors participate in the profits of savings accounts with effect from the beginning ofthe month following the month in which the deposits are made. Profits are not calculated with effect

from the beginning of the month in which a withdrawal is made from the account.

4. A minimum balance has to be maintained in order to qualify for a share in profit.

3. Investment Deposit

Investment deposits are Islamic banks counterparts of term deposits or time deposits in the

conventional system. They are also called profit and Loss-Sharing (PLS) Accounts or


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Participatory Account. However they can be distinguished from traditional fixed term deposits in

the following manner:

1. Fixed term deposits in the conventional system operate on the basis of interest while investment

accounts in Islamic banks operate on the basis of profit sharing Instead of promising depositors a

predetermined fixed rate of return on their investment the bank tells them only the ratio in which itwill share the profits with them.

2. While fixed term deposit are usually distinguished from each other on the basis of their maturities

investment deposits can be distinguished on the basis of maturity as well as on the basis of

purposes as it is possible to give special instructions to the bank to invest a particular deposit in a

specified project or trade.

The main distinguishing characteristics of investment deposits can be described as follows:

1. Deposit holders do not receive any interest. Instead they participate in the share of the profits or

losses.

2. Usually these accounts are opened for a specific period e.g. three months, six month, one year or

more.3. Generally speaking depositors do not have the right to withdraw from these accounts as is

customary in time deposits in conventional banks.

PROFILE OF SOCIAL ISLAMI BANK LIMITED

BACKGROUND OF THE BANK

Social Islami Bank was founded in 1995 as Social Investment Bank Limited and changed its

name to the present one on August 2009.

SIBL has been running its activities through its 74 branches all over the country. It provides Islami

banking facilities to its customers under the supervision of a strong jury board. It provides allformal commercial banking services to people.

Formal bankingservices rendered by SIBL are Deposit Accounts, Deposit Schemes, Investment

Banking, Foreign Exchange Trade and other routine jobs.

Mudaraba Savings Deposit, Al Wadiah Current Deposit, Mudaraba Term Deposit and Mudaraba

Notice Deposit are the deposit accounts provided by SIBL.

Mudaraba Term deposit is to be opened with a deposit of Tk.5000 minimum from individual, joint

farm, Public limited company or Local Government organizations. After maturity, allowed to

withdraw the money along with profit as decided by the bank.

Mudarabe Notice Deposit requires a notice period before withdrawal of money.

Ten Deposit schemes are presently in function at SIBL. These are:

Mudaraba Monthly profit

Hajj Deposit Scheme

Mudaraba Millionaire Scheme

Mudaraba special Deposit (Pension) scheme


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Mudaraba Term savings Scheme based on Monthly Deposit

Mudaraba Education Savings Scheme

Mudaraba Bashastan Savings Scheme

Mudaraba double Benefit Deposit Scheme

Mudaraba Lakhopoti Deposit Scheme

Mudaraba Foreign Currency Term Deposit Scheme

Monthly Profit scheme is targeted to retired persons who can deposit a substantial amount from

his service benefits for a fixed period. He would get a monthly profit from it.

Hajj Deposit Scheme is to help people for performing Hajj. A mutually agreed monthly installment

is to be deposited and profit earned as per Shariah is added. After maturity client will get the

money with total profit to enhance client Hajj program.

Millionaire Scheme is a monthly deposit Scheme to achieve a total of taka 10 lacs along with

profit after maturity. The duration of this scheme is 15, 20, and 25 years. Accordingly the

installment is decided. The profit is calculated following Shariah.

Special Savings (Pension) Scheme is, as the name implies, for people in job now and desire to

have a regular income after retirement. Deposits are made as monthly installments and after

maturity client may have the total amount at a time or as a monthly pension.

Term saving is also a monthly deposit scheme.

Educational expenditure is getting higher day by day. Still client must not ignore his/her childrens

education. So client would like to build up a fund for future. Mudaraba Education Scheme is the

solution.

Mudaraba Bashastan Savings Scheme is meant for solving housing problem. Clients have todeposit an installment of Tk.500 or any multiple of it for a decided duration. After maturity client

may expect a good amount to be spent for self home.

Voluntary Bankingsector is another field of SIBLs activity. This field includes Cash Waqf

Scheme and Mosque Waqf Property Development Scheme.

Cash Waqf Scheme is designed for investment in the religious, social and educational services.

Well off and rich people are supposed to make the investments and in the mean time response is

good.

Mosque Waqf Property Development Scheme provides consultation to make mosques and Waqfproperties self sufficient and sustainable.

Non Formal Bankingarea of SIBL offers schemes like Micro Investment Scheme, Micro

Enterprise Investment Scheme, Joint Scheme, Development and Rehabilitation Scheme, and

Joint Programs with ILO and UNICEF.


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Micro Investment is a group based lending program aiming at improvement of the low income

people of the society. Maximum amount to invest is Tk. 25000 for each case.

Micro Enterprise Investment Scheme contains three types of schemes. These are Family

Empowerment Micro-Enterprise Program, SMES and Small, Medium & Micro Enterprise

Development in collaboration with JOBS, USA. All these schemes are prepared to create easy

access of small entrepreneurs to business capital.

A rehabilitation program for child labor in garment industries are under taken by SIBL jointly with

ILO. This program aims at complete elimination of child labor.

Social Islami Bank Limited is always with modern thinking and up to date technology. It has

naturally introduced online banking, ATM service and any branch banking like products. SIBL is

prospering along with its clients and partners and contributing to nation as well.

SIBL is a capitalized new generating Bank with an authorized capital and paid up capital of Taka

10000 million in 2011 and also 2987.81575 million respectively as of December 2010.

Company Profile:

Name of the Company Social Islami Bank Limited

Corporate Office15,Dilkusha C/A. Dhaka-1000Websitewww.siblbd.comAuthorized Capital10000

millionPaid up Capital2987.81575 millionChairmanMr. Md. Anisul HoqueManaging DirectorMr.

Muhammad AliCompany SecretaryMahamud HassanType of CompanyPrivate limitedScope of

BusinessBanking, capital market operationsIncorporation of the BankJuly 5, 1995Licensed issued

for opening first branch; Dilkusha BranchNovember 22, 1995Formal launching of the

BankNovember22, 1995Commencement of Business of Dilkusha BranchNovember 22,

1995Listed with Dhaka Stock ExchangeNovember ,2000Listed with Chittagong Stock

ExchangeOctober, 2005Publication of ProspectusDecember 30,1984No. of Branches75

Source: www.siblbd.com

VISION OF THE BANK

Social Islami Bank Ltd started its journey with the concept of 21stCentury Islamic participatory

three sector banking model: i) Formal Sector- Commercial Banking with latest technology; ii)

Non-Formal SectorFamily Empowerment Micro-Credit & Micro-enterprise program and iii)

Voluntary SectorSocial Capital mobilization through CASH WAQF and others. Finally,

Reduction of Poverty Level is our Vision, which is a prime object as stated in Memorandum of

Association of the Bank with the commitment Working Together for a Caring Society.

MISSION OF THE BANK

High quality financial services the latest technology.


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Fast, Accurate and Satisfactory customer service.

Balanced & sustainable growth strategy.

Optimum return on shareholders equity.

Introducing innovative Islamic Banking products.

Attract and retain high quality human resources.

Empowering real poor families and create local income opportunities.

Providing support for social benefit organizationsby way of mobilizing funds and social services.

CORPORATE SOCIAL RESPONSIBILITY OF THE BANK

Social Islami Bank Ltd. has been responding spontaneously to its social commitment as a part of

Corporate Social Responsibility (CSR). Welfare activities for the poor, disabled and distressed of

Social Islami Bank Ltd. are being done mainly from Cash Waqf Fund, Zakat Fund, Compensation

and Doubtful Income. This bank is doing welfare of mankind in various sectors like Health,

Education, Rehabilitation and Donation etc. They are also extended financial support to

Mosques, Madrashas, Orphanages and Voluntary Social Organizations. Social Islami Bank Ltd.

distributed relief to SIDR affected areas and flood affected areas also.

DIVISION OF SOCIAL ISLAMI BANK LIMITED

Name of the divisions of SIBL is as follows:

Information Technology Division

Financial Administration Division

International Division

Logistic Support Division

Managing Directors Secretariat

Business Development & Marketing Division

Audit & Inspection Division

Chairmans Secretariat

Share Division

Board Secretariat

Human Resources Division

Shariah Board Secretariat

SIBL Training Institute

SME Banking Division

Legal Department

Board Audit Cell

MIS, Planning & Research Division

Internal Control & Compliance Division

Investment Risk Management Division

Voluntary Banking Division

Recovery Department

Global Business Division


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NETWORK OF THE BRANCHES

SIBL started its working at 15, Motijheel C/A with a Branch named Motijheel Branch on 22,

November 1995 was the first & main Branch of SIBL and has been operating throughout the

country. The age of the Bank is only 16 years and during this short period of time, the Bank hasestablished total 74 Branches over the country and made a smooth network inside the country.

The number of Branches as Division wise is mentioned in the following table:

DivisionNo. of Br.

Dhaka Division26

Chittagong Division15

Sylhet Division2

Narayangonj5

Bogra2

Khulna Division2

Rajshahi Division1

Sirajgonj3

Noakhali1

Comilla1

Chadpur3

Narsingdi1

Jessor3

Bagerhat1

Satkhira1

Dinajpur1

Gaibandha1

Noagaon1

Rangpur1


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Pabna1

Feni1

Barisal Division1

Gajipur1

Total75


FUCNTIONS OF SOCIAL ISLAMI BANK LIMITED

Mobilization of idle resources of the country by accepting Deposits from the general public.

Granting Loans and Advances to the individual firms and companies for activating and

developing trade, commerce and industries and other productive activities in the country.To give facilities to the client and shareholders in a systematic way.

Give encouragement to the people for savings.

To increase investment.

To make easy transfer of foreign currency.

To identify consumers demand and fulfill their demand by supplying money.

To improve economy by borrowing financial facility.

To assist capital market.

Management Hierarchy


The Ownership Pattern

This is a private sector commercial Bank providing comprehensive range of banking services.

The bank is owned as follows:

Sponsor/Director 26.5%

Institute 13.48%

Public 60.02%

At present the Bank has an amount of Tk.10000.00 million of Authorized Capital and Tk.2987.81

million of Paid-up Capital

Human Resource

There is no alternative to skilled and trained manpower in service Industry. Bearing this in mind

the well educated, promising and honest workers are being appointed and trained. Bank has


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given top priority to develop skilled manpower and introduce them with modern technologies with

the purpose of developing quality customer services. The Bank has undertaken program to train

up its employees of all strata at its own Training Institute. A highly experienced person was

appointed as Director (Training) of the Institute in the year 2001 with the task of formulating

various training modules. Steps are being taken to shift the Institute to separate premises for

facilitating training activities. Side by side, both inland and foreign training also imparted during

the year as usual. A highly experienced, well educated and motivated workforce is playing vital

role towards the growth of the Bank deserve appreciation. The total manpower strength of the

bank was 1252 as on 31stDecember, 2010.

Training Institute

Well educated peoples are needed to achieve the objectives of a firm. With a view to build

enthusiastic and skilled work force, Social Islami Bank Training Institute was established in24thOctober, 1996 at Shyamoli, Dhaka. Every year the Institute trains sufficient number of

employees. By the side of the new employee/officer, it is possible to trained SIBLs existing

employee/officer. There is a library in SIBL. There is about 2thousand books remain in this

library. Accounting, Management, Marketing, and Computer related books are in this library. In

2010, 74 employees from the bank got training from BIBM.

Foreign Correspondents of SIBL

In order to gain maximum advantage from Foreign Exchange related business, the Bank has

entered into correspondent relationship with almost all major 122 Banks of 109 countries of the

world like Standard Chartered Bank, American Express Bank Limited, HSBC, HBZ Finance,

Mashreq Bank PSC, Dresdner Bank AG and with local banks in Pakistan, India, Nepal and

Bhutan etc with whom we have advising, reimbursing and confirming arrangement.

Overseas Operations of SIBL

Social Islami Bank has set up joint venture Exchange Company named Gulf Overseas Exchange

Co. Ltd, in Oman contributing 25% of its paid up capital. The present paid up capital of the

company is Riyal Omani 1, 82,000.00. The Chairman of the company is the ex-minister of the

government of Oman. The exchange company, established in 1985, now has three branches in

Oman and is being managed fully by officials of SIBL. The company is running in profit. SIBL is

also exploring possibilities of opening branches in the Middle East, Switzerland and USA. SIBL

has entered into the Management contract with a Kuwati Exchange company to provide

management and technical services. SIBL has acquired equity and management of Nepal Arab

Bank Ltd. which is the largest and highly profitable Private Commercial Bank in Nepal.


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Product and Service of SIBL

Mudaraba Term Deposit.

Mudaraba Savings Deposit.

Al-Wadia Current Account.Mudaraba Notice Deposit.

Cash Waqf.

Scheme Deposit

Mudaraba Hajj Savings Deposit.

Mudaraba Pension Savings Scheme.

Subarna Rekha (Woman)

Subarba Lota (Women)

Shabuz ShayannaMudaraba Education Saving

Mudaraba Monthly Profit Scheme

Mudaraba Monthly Savings Scheme.

Mudaraba Bashastan Savings Scheme

Mudaraba Millionaire Scheme

Mudaraba Lakhopoti Scheme

Mudaraba Double Benefit Scheme

Mudaraba Marriage Savings Scheme

Mudaraba Mohorana Savings Scheme

Shabuj Chaya Monthly Profit Scheme

Sukher Thikana Scheme

Sonali Din

Sachandey Pratidin

Samriddir Sopan

Shapner Shiri

Shanchita

ATM Service.

Locker Service.

One Line Banking

Rural Credit Program


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Agriculture is the main driving force of economy in Bangladesh. And the whole economic growth

of the country depends on the development, modernization and investment of money in this

connection. As a non-Government financial institution SIBL has been actively participation in rural

credit program in the economic activities for large population of the country since 1992. SIBL has

been working intensively in collaboration with Barindra Multipurpose Development Authority by

conducting the Rural Credit program particularly in Rajshahi, Naoga, Chapainowabgong, and the

northern part of the country in general. In the last 10 years bank has distributed the credit for

Tk.69.85million. The recovery of loan in this project is 94%. In 2001 bank has distributed the loan

for Tk.7.00million. This is the first program for any private bank. Moreover, SIBL has been

participating in Agro Based Industries and Technology Development project Loan financed by

USAID since 1996.

OPERATING PERFORMANCE

Total Operating Income of the Bank as on 31stDecember 2010 stood at

Tk.2,633,090,142.00against Tk.1,717,643,034.00of the previous year. The Bank made an

operating profit of Tk.1,638,628,125.00in 2010 against Tk.1,064,306,005.00of 2009. A summary

of operating result of the Bank as on 31stDecember 2010 vis--vis the position as on 31.12.2009

is shown below:

Operating result of the Bank as on 31st December 2010 (Taka in millions)

Particulars 31.12.2010 31.12.2009 Growth Rate %

Income from Investment 3886.18 3078.98 26.22%

Profit paid on Depositors 2435.01 2063.62 18.00%

Net Investment Income 1451.17 1015.36 42.92%

Commission, Exchange & Other Income 1181.92 702.28 68.30%

Total Operating Income 2633.09 1717.64 53.30%

Total Operating Expenses 994.46 653.34 52.21%

Profit Before Provision 1638.63 1064.30 53.96%

Provision against Investment & Others 501.94 337.42 48.76%

Profit Before Tax 1136.69 726.88 56.38%

Profit After Tax 643.019 431.523 49.01%


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Chapter: 3

Bank Operation

DEPARTMENT OF SOCIAL ISLAMI BANK LIMITED

SIBL is a three sector Islamic bank. Services, which provided by SIBL, are shown below:FORMAL SECTOR

GENERAL BANKING AREA

Financial institution intermediary that mediates or stands between ultimate borrowers and

ultimate lenders is knows as financial institution. Banks perform this function in two ways- taking

deposits from various areas in different forms and lending that accumulated amount of money to

the potential investors in other different forms. General banking department aids in taking

deposits and simultaneously provides some ancillaries services. General banking is the front-side

banking service department. It provides those customers who come frequently and those

customers who come one time in banking for enjoying ancillary services. In some general

banking activities, there is no relation between banker and customers who will take only one

service form bank. On the other hand, there are some customers with who banks are doing its

business frequently. SIBL General banking is divided into six sections.

ACCOUNT OPENNING SECTION

Under this section, SIBL officer opens different types of accounts on the request of clients. The

procedure of opening account is given below.

Procedure for Opening of Accounts

Before opening of a current or savings account, the following formalities must be completed by

the customer:

1. Application for the prescribed form

2. Furnishing photographs

3. Introduction by an account holder

4. Putting specimen signatures in the specimen card

5. Mandate if necessary

After fulfilling the above formalities, SIBL provides the customer a pay-in- slip book and a

checkbook.

Application Form for Current/ Savings Account

Followings are the contents of the application form for opening Savings or Current account in

SIBL,-


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1) Type of the Account: Individual/ Joint/ Proprietorship/ Partnership/ Limited Company/ Club/

Society/ Co-operatives

2) Name of the Applicant(s)

3) Fathers/ husbands Name

4) Present Address

5) Permanent Address

6) Number, Date of issue, Date of Expiry & Place of Issue of Passport (if any)

7) Date of Birth

8) Nationality

9) Occupation

10) Nominee (s)

11) Special Instruction of Operation of the Account (if any)

12) Initial Deposit13)

13) Specimen Signature (s) of the Applicant (s)

14) Introducers Information (Name, Account Number, Specimen Signature)

In case of Join Account

a) Operation instruction of the account

b) Signature (s)

In case of Partnership Account

a) Partners Signature

b) Partners Name -

The following formality along with the documents is to be completed before opening an account:

a) Two copies of photograph of the Account Holder (s) duly attested by the Introducer.

b) Account to be introduced properly.

c) Introducers signature on Account Opening Form to be verified by an officer under full

signature.

d) Letter of thanks to Account Holder(s) and Introducer to be sent under registered post.

e) In case of joint account, operational instructions are to be signed by the Join Account

Holders.In case of Club/ Society,-

a) Up to date list of office bearers.

b) Certified copy of Resolution for opening and operation of account.

c) Certified copy of Bye-laws & Regulations/ Constitution.

d) Copy of Government approval (if registered.)


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In case of Co-operative Society/ societies Limited,-

a) Copy of Bye-law duly certified by the Co-operative officer.

b) Up to date list of office bearers.

c) Resolution of the Executive Committee as regards of the account.

d) Certified copy of Certificate of Registration issued by Registrar, Co-operative Societies.

In case of Non- Government College/School/ Madrasha/ Muktab,-

a) Up to date list of the Governing Body/ Managing committee.

b) Copy of resolution of the Governing Body/ Managing Committee.

In case of Trustee Board,-

1. Prior approval of Head Office of the Bank.

1. Certified copy of Deed of Trust, up to date list of members of the Trustee Board and Certified copy

of the Resolution of Trustee Board to open & operate the account.

In case of Minors Account,-

a) Putting the word MINOR after the title of the account.

b) Recording special instruction of operation of the account.

c) The account opening form is to be filled in and signed by either of the parents or the legal

guardian appointed by the Court of Law & not by the Minor.

In case of Limited Company,-

a) Certified true copy of the Memorandum & Articles of Association of the company.

b) Certificate of Incorporation of the company for inspection and return with a duly certified

photocopy for banks records.

c) Certificate from the Registrar of the Joint Stock Companies that the company is entitled to

commence business (in case of Public limited Co. for inspection and return) along with a duly

certified photocopy for Banks records.

d) Latest copy of Balance Sheet.

e) Extract of Resolution of the Board. General Meeting of the company for opening the

account and authorization for its operation duly certified by the Chairman/ Managing Director of

the company.

List of Directors with address (a latest photocopy of the form-xii).

Authorized signature.

Name

General conditions of governing Current / Savings Account,-

(a) Minimum Balance to be maintained in current account Tk. 10,000 /- and in Savings account

Tk. 5,000/-


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(b) A suitable instruction by an introducer acceptable to the Bank is required prior to opening

an account.

(c) Recent photographs of the Account openers duly attested by the Introducer must be

produced.

(d) When cheques deposited are payable by other banks or outstation they are available after

clearing or collection only, Service charge will be charged @ Tk, 100 /- in current account and Tk

50 /- in Savings account yearly or as charged by the Bank from time to time as and when

required.

Provisional profit rate for Savings Account (SB) @ 6.85% (Half years compounding).

Deposits Accepted by SIBL

I. Mudaraba monthly profit deposit scheme

Social Islami Bank Ltd is an Islamic Bank ruled by Islamic Shariah. The bank is operating in

Formal, Non-Formal and Voluntary banking sector for alleviating poverty in the Bangladesh. But

to reduce poverty in a country like Bangladesh there is no other alternative but increase internal

deposit. Increase in deposit will increase investment and new investment will result in more

employment. For this reason SIBL have introduced Mudaraba Monthly Profit Scheme.

Under this scheme the depositor will get monthly profit on the deposited amount. The reasons for

introducing this scheme are as follows:

1. a. The scheme provides monthly profit for service holders who may deposit the pension benefit

2. b. For those Bangladeshis working abroad willing to deposit once and provide a fixed amount

monthly to family and relative residing in Bangladesh

3. c. The trust and foundations willing to provide monthly scholarship to students against one time

deposit

4. d. For the parents who wants to bear educational expenses of their child against deposit

The features of this scheme are as follows:

Tk. 1,00,000/-, 1,10,000/-, 1,20,000/- or 1,25,000/- or any amount multiple can be deposited

under this scheme.

The duration of the amount should be for Five years

Profit shall be distributed under this scheme as follows:

a. 1,00,000/- Tk. 900 (net)b. 1,10,000/- Tk. 1000 (net)

a. 1,20,000/- Tk. 1,100 (net)

b. 1,25,000/- Tk. 1150 (net)

The payable profit will become due after 1 month of deposit. But the amount will be deposited to

account in the last week of the month.


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Generally, a depositor cannot withdraw the amount before 5 years. But, in unavoidable

circumstances the depositor can withdraw the amount and in that case.

The depositor will have to submit the duly filled application form of the scheme.

The depositor will have to maintain a Mudaraba Savings account in which the profit of the

scheme will be deposited.

In case of change of address the depositor must inform the bank as soon as possible.

If the scheme is closed before 1 year then no profit will be given.

II. Hajj deposit scheme

Hajj is one of the most important bases of Islam. Religious muslims tends to perform Hajj when

they gather financial ability. But they find it difficult to gather the required amount to perform as

there is no such systematic way of saving the money. To help our muslim brothers Social Islami

Bank Ltd introduced Hajj/Umrah Scheme.

The basic rules of this scheme are:

1. a. This account shall be called as Hajj/Umrah Savings Scheme

2. b. Any Muslim Residing in Bangladesh may open an account under this scheme

3. c. This scheme will be accounted under Mudaraba rules. The Bank as Mudarib and the

account holder will be treated as Sahib-e-Mal. The account holder will have to enjoy the Profit /

Loss of the Banks respective year.

4. d. The depositor will be provided with a Deposit book and the deposited amount must be written

and verified by the Banks authorized official. In case of losing the deposit book Tk. 20 has to be

deposited for issuing a new one.

5. e. In case of change of address the bank must have to be notified as soon as possible.

6. f. Provisional profit will be charged on June and December closing. If the account holder isunable to perform the Hajj/Umrah or any other person does not perform instead of the account

holder then the corresponding account will be treated as a Mudaraba Savings account and

accordingly profit will be distributed.

7. g. An introducer must be there to open an account.

8. h. Any installment size can be chosen during the opening of the account, which cannot be

changed afterwards.

9. i. This scheme can be opened in the name of any under-aged people. In such cases the rules

relating to open an account for an under-aged person must be followed.

10. j. In case of closing the account before maturity profit will be given as per rules of Alwadiah

Current account. No profit will be given in case of closing the account before 6 (Six) months.11. k. Monthly installment of the account will be deposited within 10th day of each month. Any

advance installment is always appreciable.

12. l. If a depositor fails to deposit the installment of one month then in the next month two

installments must be deposited in due time. In case of failing of two consecutive installments, prior

permission of the Branch incumbent must be taken to deposit all the pending installments.


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13. m. In case of failing of 3 consecutive installment the account will be automatically changed to

savings account.

14. n. Money cannot be withdrawn from the Hajj/Umrah account therefore cheque book will not be

issued.

15. o. After the scheduled time of the scheme if the accumulated amount with profit is less than the

amount of total estimated cost to perform Hajj/Umrah then the account holder must deposit the rest

amount at a time. If for any reason the account holder cannot perform.

16. p. Similarly if the total cost for performing Hajj is less than the accumulated amount the rest will

be returned to the account holder.

17. q. The account holder while disbursement of total amount must provide adequate proof of

identity.

18. r. The Bank retains the authority to change, modify, rectify or cancel the rules regarding the

scheme and the account holder must abide by the decision.

III. Mudaraba millionair scheme

People of Bangladesh are the followers of Islam. They are mostly interested to make interest free

deposits. Taking these facts into consideration SIBL a joint venture Islamic bank introduced a

monthly installment based Mudaraba Millionaire Scheme

Rules and regulations of this scheme:

1. a. Tk. 550/-, Tk. 1050/- or Tk. 2050/- is taken as monthly installment under Mudaraba principles

of Islami Shariah.

2. b. Duration of this scheme will be 15, 20 and 25 yrs. After maturity an estimated amount will

become as follows:

Duration Monthly Installment Estimated amount after maturity

15 2050 Tk. 10 lac

20 1050 Tk. 10 lac

25 550 Tk. 10 lac

1. c. The amount in the above is an estimated amount and may vary at maturity.

2. d. After starting of operation of this scheme size of installment cannot be changed.

3. e. Rules of depositing installment:

Installment must be deposited on or before 15th day of each month. Otherwise the installment

will be treated as defaulter.

In case of 15th day being a govt. holiday installment can be deposited in the next working day.

Installment can be deposited by cheque also but the clearance date of the cheque will be

treated as deposit date.

The depositor can deposit his/her monthly installment from his/her Savings/ Current/MND

account through permanent standing instruction.

1. f. Any depositor may open one or more account in the same name in the same branch.


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2. g. In case of the scheme account is closed before maturity then profit will be applied at the rate

of Mudaraba Savings Deposit. But if the account is closed before 6 months no profit will be

applied.

3. h. 80% of the amount deposited can be taken as loan but profit rate decided by the bank must

have to be paid by the client.

4. i. If a depositor fails to deposit 4 consecutive installments then the account will be closed and

profit will applied as per rate of Mudaraba Savings Rate. Profit for the first 06 (Six) months shall not

be applied.

5. j. The Bank reserves the right to invest the funds received in mudaraba term deposit accounts,

in its sole judgment, in any interest-free Halal business it deems fit.

6. k. In case of change of address or telephone number the depositor must inform the bank

immediately. The bank will make correspondence with the depositor by postal service and in case

of missing or delay in delivery, the bank will not be liable.

7. l. a. After the death of the depositor the legal guardian of immature nominee or the nominee

himself can continue the scheme. In this a new agreement must be signed with the bank.

b. After the death of the depositor the nominee by providing adequate prove to the bank.

c. The account is matured before the nominee becoming matured then the legal guardian may

encase the amount by providing adequate prove to the bank.

1. m. Any Tax, VAT or Excise duty as applicable by Govt. will be deducted from the account.

2. n. The bank reserves the right to add or alter any or all the rules governing this scheme and

such altered or additional rules shall be immediately thereafter be deemed to be binding on all

depositors.

IV. Mudaraba special savings (pension) scheme

Generally people wants save a portion of their income for economic assurance at old ages. For

this reason a unique kind of savings scheme has to be introduced so that a portion of income can

be deposited regularly for a long time span. This enables a person to get quite a considerable

amount after maturity.

Taking the above reasons into account Social Islami Bank Ltd, a joint venture Islamic bank have

introduced monthly installment based Mudaraba Special Savings (Pension) Scheme.

Under this scheme any person can deposit a fixed amount monthly and after maturity the

depositor will get a handsome amount with increased profit. The depositor may encash the total

amount at a time or can take as monthly pension until a stipulated time.

Intentions and Goal of the scheme:

To create awareness to deposit among average income people.

To create a chance for attractive deposit scheme.

To create an interest free investment.

Eligibility:


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If the depositor fails to deposit 3 (three) installments consecutively before completion of 5 years

of the account then the account will be closed and profit will be applied as per Mudaraba Savings

Deposit rate.

Others:

1. a. The depositor must deposit the installment by cash or cheque within 15th day of each month.

In case of 15th day being govt holiday then the amount can be deposited in the next working day.

2. b. In case of clearing cheque is not collected within 15th day then the depositor will be treated

as defaulter for that month.

3. c. The amount and duration of the scheme will not be changed.

4. d. The account can be transferred from one branch to another by a written application

mentioning the actual reason of transferring.

5. e. The depositor can close the account any time with a service charge of Tk. 25.00.

6. f. VAT, TAX as applicable by Govt must be borne by the depositor.

7. g. The bank reserves the right to add or alter any or all the rules governing MSDPS and such

altered or additional rules shall be immediately thereafter be deemed to be binding on alldepositors.

V. Mudaraba education saving scheme

Education expenditure especially for higher studies is increasing day by day. In many cases

children loses the chance of education as their guardians become unable to adjust with the

expenditure. But if proper financial planning is adopted earlier then it is easier for the parents to

bear the expenses.

For these reasons SIBL has introduced Education Savings Scheme, which is based on Shariah

Principles. This scheme would enable the our parents to bear childs educational expenses in a

planned manner.

General Rules & Regulations of Mudaraba Education Savings Scheme:

1. a. Any amount of Tk. 25,000/- or multiple is accepted in this scheme.

2. b. After maturity the amount can been cashed at a time or can be taken for the next 6 (Six)

years of maturity as mentioned in the following table:

3. c. The abovementioned maturity amount may differ due to the annual profit rate achieved by

the Bank. The depositor will get more or less depending on the profit rate.

4. d. For the above mentioned reason the depositor may get more or less amount of monthly

allowance also.

5. e. The depositor will get a receipt on the deposited amount.6. f. In order to receive the monthly education allowance the depositor will have to submit all the

Receipts duly discharged and proper instruction must be provided in writing to nominate a person

for receiving the allowance.

7. g. The instrument cannot been cashed before maturity. In case of emergency if the depositor

wants to en cash before maturity the following rules will be applicable:


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If the instrument is encashed before 7 years then Mudaraba Savings Deposit will be applied on

the deposited amount.

If the amount is en cashed after 7 years then amount will be given as per rules of 7 years

scheme and for the rest years Mudaraba Savings Deposit rate will be applied.

1. h. a. In case of Death of the depositor the amount payable will be paid to the nominee. If there

is no nominee by submitting Succession certificate the amount will be paid to legal successor of

the depositor.b. In case of death of the depositor if the nominee wants to take monthly allowance

for 6 six years then the instrument must be submitted to bank and should be duly discharged.

2. i. To issue a duplicate instrument the rules for issuing duplicate Term deposit will be

applicable.

3. j. TAX, VAT, Excise Duty as applicable by Government will have to be borne by the depositor.

4. k. Bank authority has the authority to change/amend the rules and regulations regarding the

scheme as and when required and the depositor must abide by the rules.

VI. Mudaraba bashastan savings scheme

Housing has become one of the most fundamental needs of human civilization. But in this early

20th century most of the people of Bangladesh are lacking to fulfill this basic need. As a follower

of Islamic Shariah, Social Islami Bank Ltd focuses forward to help people to fulfill this basic need.

Main features of this scheme:

1. a. The applicant has to fill the application form duly.

2. b. An amount of Tk. 500/-, 1000/-, 1500/-, 2000/- or any amount multiple can be deposited

under this scheme.

3. c. The depositor will enjoy earnings from investments under Islami Shariah based Mudaraba

rules.

4. d. As per rules of Islami banking the actual amount may vary from the estimated amount.5. e. In case of failing of 3 (Three) consecutive installments the account will be closed. In such

cases profit will be given as per savings account rate, but no profit will be given if the account is

closed within 6(Six) months.

6. f. The account holder may choose any installment size on account opening, which cannot be

changed later.

7. g. Installment must be deposited within first 15 day of the month. Any amount deposited as

advance installment is always welcome.

8. h. The scheme is 15 years long and if the depositor intends to withdraw the amount then profit

will be given as per savings rate.

9. i. TAX, Yearly excise duty etc applicable on the profit will be borne by the depositor.10. j. In case of change of address the Bank should be notified immediately.

11. k. An account in the name of under-aged person can be opened under this scheme.

12. l. After successful continuation of the scheme for 5 years the depositor may take up to 80%

loan of the deposited amount.

13. m. After successful completion house building loan facility from the bank may be considered by

the bank authority.


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14. n. The Bank retains the authority to change, modify, rectify or cancel the rules regarding

Bashthan Savings scheme and the account holder must abide by the decision.

15. o. Income tax imposed on the earnings from the deposited amount should be deducted from

depositors account.

VII. Al Wadiah current deposit

1. a. ALWADIAH Current Deposit A/Cs are opened on proper introduction with minimum initial

deposit fixed by the Bank.

2. b. ALWADIAH Deposit is accepted on ALWADIAH principles which mean al Amanah with

permission to use. According to this principle Bank can use the fund of the account along with

other funds as per Shariah at banks own risk. Account holder(s) will not share any profit/loss.

3. c. The Law and regulation of Bangladesh, usual customs and procedures common to banks in

Bangladesh including Islamic Banking Principles shall apply to and govern the conduct of account

opened with the Bank.

4. d. Withdrawal can be made only through cheques issued by the bank.

5. e. The A/c. holder(s) shall preserve the cheque book with utmost care so that it might not be

lost or stolen. For any misappropriation taken place through any such stolen or lost cheque, the

Bank shall not be held responsible.

6. f. The depositor shall take back the pay-in-slip after deposit of any money or cheques etc.

clearly specifying the number and title of account in the slip. All cheques, DD/PO etc shall be

crossed before deposit.

7. g. Bankers shall note Stop payment of the account holder with due care. Payment of any such

cheque, the Bank shall not be held responsible.

8. h. Any change in the address of the depositor should be immediately communicated to the

bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters,

remittances etc sent through Post office and other agents.

9. i. Bank makes entry in the account with due care. However, for any wrong entry, the Bankreserves the right for adjustment/correction and no responsibility can be accepted by the bank for

any loss caused by the caused by the account holder due to such inadvertent/wrong entry passed

by the Banker.

10. j. The Bank reserves the right to close any account without notice and alter, add any or all of

the rules and such altered/additional rules shall immediately thereafter be deemed to be binding on

the account holder.

VIII. Mudaraba savings deposit

To open a Mudaraba Savings Deposit account in our Bank the following rules and regulations are

applied:1. a. Mudaraba i.e. Deposit of one party and on the basis of operation by another party this

deposit is taken.

2. b. By providing Introducer of the account as required by the bank and by depositing a minimum

amount any depositor or multiple depositor can open single or joint account. Any educational

institute, Club, Association or Social institutes can open this account.

3. c. The bank may merge amount collected through this deposit and may invest in any shariah

allowed investments.


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4. d. After determining the annual profit/loss the depositor will get his part of profit.

5. e. In case of balance declining below bank stipulated margin in any month profit shall not be

provided for that month.

6. f. Any amount can be deposited in any working hour but for applying profit the lowest amount

from 6th day till the last day of the month will be taken as the deposit of that month.

7. g. Amount must be withdrawn only by bank issued instruments like cheques.

8. h. Amount can be withdrawn Twice a week but highest 4 times a month. One fourth of the

deposited amount or Tk. 2000/-, the lowest can be withdrawn without notice. If any amount

exceeding the above is withdrawn without providing 07 days prior notice then no profit will be

applied for that month.

9. i. If an account is closed before the declaration of current years profit rate then the depositor

will have to take profit as per previous years declared profit rate.

10. j. The Bank has the right to deny opening any account or can close down any existing with

showing any reason.

11. k. The bank operates the client accounts with utmost attention but still if any miscalculation

occurs the bank holds the right to make adjustments and rectify the problems. But in this situationif any miscreants occur which is caused by the client the bank will not be hold liable for that.

12. l. The Bank may change / amend / rectify any rules and regulations of this account and the

client must abide by the rules.

13. m. The depositor by will may contribute a minimal percentage to his selected Social Development

works.

IX. Mudaraba term deposit

Mudaraba Term Deposits are accepted by the bank with a sum of Tk. 5000 or above (multiple of

1000) from individuals (single and joint), firms (propietorship/partnership), limited companies,

autonomous bodies, charitable institutions, association, educational institution, local bodies,trusts, etc, against issuance of non transferable receipts in acknowledgement of MTD account

may be opened in the names of minors jointly with their guardians, for example :

Received from Mr. X Guardian of Mister/Miss. (Minor)

1. a. The mudaraba term deposits are accepted for periods of 12, 24, 36 months. Weightage on

the rate of return is given to deposits of longer maturity.

2. b. The Bank reserves the right to invest the funds received in mudaraba term deposit accounts,

in its sole judgement, in any interest-free Halal business it deems fit.

3. c. Mudaraba term deposit account holder will share the profit of investment with Social Islami

Bank Ltd, at the rate declared by the bank from time to time. Any loss which cannot be covered by

the investment loss offsetting reserve will be adjusted from Mudaraba fund and in that case the

bank shall not take any remuneration for the service rendered in managing the fund.

4. d. The profit earned on Mudaraba Term Deposit account will be credited as determined by the

bank as its sole direction on the basis of its net working results at the end of the year, within a

reasonable time from the date of the close of the books of accounts of the bank. The banks

decision in this respect will be final & binding on the Mudaraba Term depositors. If the Mudaraba

Term Deposit account is closed before declaration of profit of current year, the depositor shall


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accept profit at the rate declared in the preceding year. In that case, both the bank & the depositor

will relinquish their claim on difference amount of profit, which may accrue at the close of the year.

5. e. The account holder is not allowed to withdraw the amount before maturity date. But on

obtaining the Banks prior consent the depositor(s) may withdraw the deposit before maturity

without any profit i.e. no profit no loss basis.

6. f. MTD account holder may withdraw the profit amount annually if he so desires on condition

the final adjustment. If needed, will be made at the end of the year. MTD account holder will give

an undertaking to that effect.

7. g. If the profit amount is not withdrawn it will automatically be added to the principal amount

annually and the entire amount will earn profit/loss.

8. h. MTDR is not transferable instrument & as such it cannot be endorsed in favor of others.

9. i. The MTDR should be preserved properly. In case of loss, the account holder should notify

the issuing branch immediately by quickest possible means so that the bank can take care of.

10. j. Matured deposit if not encashed within one month of maturity, the deposit shall automatically

be renewed for the period it kept before.

11. k. Any change in the address of the depositor should be immediately communicated to thebank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters,

remittances etc sent through Post office and other agents.

12. l. The bank retains the right of refusing to accept any deposit from any person in MTD account

without assigning any reason.

13. m. The bank reserves the right to add or alter any or all the rules governing this scheme and

such altered or additional rules shall be immediately thereafter be deemed to be binding on all

depositors.

Deposit Rate

Mudaraba Term Deposit Receipt (Shacsondo Protidin)

01 Months (Below one Crore) 12.5


03 Months (one Crore and above) 12.5








Mudaraba Notice Deposit A/C


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1 crore to below 25 crore 3.00

Below 1 crore 2.75



50 crore to above 3.50

Shopner Shiri

2 years (monthly Installment) 3750




Mudaraba Savings Deposit 3.50

Mudaraba Scheme Deposit

Cash Waqf

10.00

Mudaraba Hajj Savings Deposit

10.00

Mudaraba Monthly Savings Scheme

10.00

Mudaraba Bashsthan Savings Scheme

10.00 Mudaraba Special Deposit Pension Scheme (General) for 3 Years (Sonali Din)

11.00

Mudaraba Monthly Profit Deposit Scheme

12.5

Mudaraba Millionaire Savings Scheme

10

Mudaraba Education Deposit Scheme

10

Mudaraba Lakhopati Deposit Scheme

11

Mudaraba Special Deposit Pension Scheme (Garments Worker) for 3 Years (Sonali Din)

11.50

Mudaraba Double Benefit Deposit Scheme

12 to 12.25

Mudaraba Marriage Savings Scheme


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11

Mudaraba Mohorana Savings A/C (5 Years)

11

Mudaraba Mohorana Savings A/C (10 Years)

11 Mudaraba Special Deposit Pension Scheme(General) for 5 Years (Sonali Din)

11.00

Mudaraba Special Deposit Pension Scheme(Garments Worker) for 5 Years (Sonali Din)

11.50

Mudaraba Special Deposit Pension Scheme(General) for 10 Years (Sonali Din)

11.00

Mudaraba Special Deposit Pension Scheme(Garments Worker) for 10 Years (Sonali Din)

11.50

Sonali Din

Mudaraba Special Deposit Pension Scheme (General) for 3 Years

11

Mudaraba Special Deposit Pension Scheme (Garments Worker) for 3 Years

11.5

Mudaraba Special Deposit Pension Scheme(General) for 5 Years

11

Mudaraba Special Deposit Pension Scheme(Garments Worker)

11.5 Mudaraba Special Deposit Pension Scheme(General) for 10 Years

11

Mudaraba Special Deposit Pension Scheme(Garments Worker) for 10 Years

11.5Somridar Sophan

Mudaraba Double Benefit Deposit Scheme (6 Years)

12.5SUBORNO REKHA

SUBORNO REKHA PENSION SCHEMES(3 years)

12.5


12.5


12.5SHABUJ SHAYONNAYA

SHABUJ SHAYONNAYA PENSION SCHEMES (10 YEARS)

12.5

SHABUJ SHAYONNAYA PENSION SCHEMES (5 YEARS)


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After collection of that bill branch advises the concerned branch in which cheques has been

presented to credit the customer account through Inter Branch Credit Advice (IBCA).In absence

of the branch of the same bank, officer sends letter to manager of the bank on which the cheques

is drawn. That bank will send pay order in the name of the branch. This is the procedure of OBC

mechanism.

Clearing

The scheduled banks clear the cheques drawn upon one another through the clearinghouse.

SIBL is a scheduled Bank. According to the Article 37 (2) of Bangladesh Bank Order, 1972, the

banks which are the member of the clearinghouse are called as Scheduled Banks. This is an

arrangement by the central bank where every day the representative of the member banks

gathers to clear the cheques. The place where the banks meet and settle their dues is called the

clearinghouse. The clearinghouse sits for two times a working day. The SIBL Local Office Br

sends the instruments through Inter Branch Debit Advice (I.B.D.A). SIBL Local Office acts as an

agent in this case. For this, Local Office branch gives the following entries,

SIBL General A/C (Local Office Br) Dr.

Customers A/CCr.

If the instrument is dishonored, the instrument is returned to the Local Office branch through

I.B.D.A. along with the following entries,

Customers A/CDr.

SIBL General A/CCr.

Receiving Cheques for Collection

In SIBL, cheques of its customers are received for collection from other banks. In case

of receiving cheques, following points should be checked very carefully-The cheques should not

carry a date older than the receiving date for more than 6 months. In that case it will be a stale

cheque and it will not be allowed for collection. Again the date of the cheque should not be more

than 1 days forward than the receiving date. a. The amount in figures and words in both sides of

the pay-in-slip should be same and it should also be same with the amount mentioned in figures

and words in the cheque. b. The name mentioned in the cheque should be some in both sides of

the pay-in-slip and it should be the same with the name mentioned in the cheque. c. The chequemust be crossed.

Cheque and Crossing

A Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable

otherwise than on demand. [According to section-6, Negotiable Instrument Act,1881]. A cheque

may be classified into:


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a) An open cheque which can be presented for payment by the holder at the counter of the

drawers bank.

b) A crossed cheque which can be paid only through a collecting banker. Crossing cheque: A

cheque is said to be crossed when two transverse parallel lines with or without any words are

drawn across the face. Crossing may be general, special or restrictive.

Issuing Cheque Book

Following procedures are maintained by SIBL, Local Office for issuing checkbook.

(a) Firstly the customer will fill up the check requisition form.

(b) The leaves of the checkbook under issue are counted to ensure that all the leaves and the

blank requisition slip are intact.

(c) The officer writes A/C number and branch name on all the leaves of the checkbook.

(d) The name and the A/C number of the customer are than entered in the checkbook register

against the particular checkbook series.

(e) Then the officer sightseer, checkbook, and requisition slip

(f) Lastly the checkbook is handed over to the customer after taking acknowledgement on

requisition slip.

REMITTANCE OF FUNDS

Remittance of funds is ancillary services of SIBL. It aids to remit fund from one place to another

place on behalf of its customers as well as non- customers of bank. SIBL has its branches in the

major cities of the country and therefore, it serves as one of the best mediums for remittance of

funds from one place to another. The main instruments used by SIBL, Local Office Br for

remittance of funds.

-Pay Order/ Bankers check.

-Demand Draft.

-Telegraphic Transfer.

Banks cheque/ Pay order

The pay order is an instrument issued by bank, instructing itself a certain amount of money

mentioned in the instrument taking amount of money and commission when it is presented in

bank. Only the branch of the bank that has issued it will make the payment of pay order. The

bankers cheque must become the branch for payment wherever it is presented.

Issuing of Pay Order

The procedures for issuing a Pay Order are as follows:

1. Deposit money by the customer along with application form.


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2. Give necessary entry in the bills payable (Pay Order) register where payees name, date, PO

no, etc is mentioned.

3. Prepared the instrument.

4. After scrutinizing and approval of the instrument by the authority, it is delivered to customer.

Signature of customer is taken on the counterpart.

Cancellation of a Pay Order

If a buyer wants to cancel it, he should submit a letter of instrument in this regard and also return

the instrument.

Bank Draft

The person intending to remit the money through a pay order has to deposit the money to be

remitted with the commission which the banker charges for its services. The amount

of commission depends on the amount to be remitted. On issue of the pay order, the remitter

does not remain a party to the instrument

i) Drawer branch

ii) Drawee branch

iii) Payee.

This is treated as the current liability of the bank as the banker on the presentation of the

instrument should pay the money. The banker event on receiving instructions from the remitter

cannot stop the payment of the instrument. Stop payment can be done in the following cases:

i) Loss of draft before endorsement: in this case, Draft reported to be lost, payees

endorsement requires verification is marked.

ii) Loss of draft after endorsement: In this case, the branch first satisfies itself about the

claimant and the endorsement in his favor.

Charges

A commission of 0.15% is taken on the draft value & Tk.50/= is taken as postal charge.

Mail or Telex Transfer (TT)

Telex transfer is another widely used mode for remittances of funds. In case of telex transfer the

message for transfer of funds is communicated through tested telex. SIBL generally recovers

from the telex charges in addition to the usual service charges.Issuing of TT

SIBL follows the following procedures:

i) The customer deposits money with SIBL to be sent.

ii) The customer obtains a cash memo containing TT serial number.

iii) TT serial number, notifying part name is mentioned in the telex message.


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iv) The Telex Department confirms transmission of the telex.

Accounting entries for TT

Cash A/C, Clients A/C Dr.

SIBL General A/C (Local Office branch) Cr.

Procedures for the incoming TT

After receiving the telex, it is authenticated by test. TT Serial number is verified by the TT in-

Concern branch register. The following entries are given in the vouchers, -

SIBL General A/C (Local Office branch) Dr.

Clients A/CCr.

Tk. 50/= is taken as postal charge. The minimum commission is Tk. 50/= or o.15% of the amount

whichever is higher.

CASH SECTION

The cash section of any branch plays very significant role in general banking department.

Because, it deals with most liquid assets The SIBL Local Office Br has an equipped cash section.

This section receives cash from depositors and pay cash against cheque, draft, PO, and pay in

slip over the counter.

Receiving Cash

Any people who want to deposit money will fill up the deposit slip and give the form along with the

money to the cash officer over the counter. The cash officer counts the cash and compares with

the figure written in the deposit slip. Then he put his signature on the slip along with the cash

received seal and records in the cash receive register book against A/C number. At the end of

the procedure, the cash officer passes the deposit slip to the counter section for posting purpose

and delivers the duplicate slip to the clients.

Account treatment

Particulars Dr./Cr.

Cash A/C Dr.

Customers A/C Cr.

Disbursing Cash

The drawn who wants to receive money against cheque comes to the payment counter and

presents his cheque to the officer. He verifies the following information-

a) Date of the cheque

b) Signature of the A/C hold

c) Material alteration

d) Whether the cheque is crossed or not


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e) Whether the cheque is endorsed or not

f) Whether the amount in figure and in word correspondent or not

Then he checks the cheque from computer for further verification. Here the following information

is checked:

1) Whether there is sufficient balance or not

2) Whether there is stop payment instruction or not

3) Whether there is any legal obstruction (Garnishee Order) or not

After checking everything, if all are in order the cash officer gives amount to the hold and records

in the paid register.

Account treatment:

Particulars Dr./Cr.

Customers A/C Dr.

Cash A/C Cr.

The cash section of SIBL deals with all types of negotiable instruments, cash and other

instruments and treated as a sensitive section of the bank. It includes the vault which issued as

the store of cash instruments. The vault is insured up to Tk. 60 laces. If the cash stock goes

beyond this limit, the excess cash is then transferred to Head Office. When the excess cash is

transferred to SIBL Head Office. The cash officer issues IBDA.

Account treatment:

SIBL General A/CDr.

Cash A/CCr.

When cash is brought from SIBL Head Office then,

Account treatment:

Cash A/C- Dr.

SIBL General A/CCr.

LOCKER SERVICE

SIBL Local Office Br is providing facility of locker service for the purpose of safeguarding the

valuable property of customers. The person or the organization that has any account in bank

branch can enjoy this service. They can keep their valuable assets in bankers custody.

Customers have right to look after with a key of their individual locker provided by bank. SIBL

maintains the following types of lockers:

Large locker.

Medium locker.

Small locker.


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1. a. Personal importers (User):they need no registration form CCI & E. For import up to USD

5000/= needs no permission. For above USD 5000/= permission has to be taken form CCI & E.

2. b. Commercial importer:those who import the goods to sell out the same to the market for

earning profit is called commercial importer.

3. c. Industrial importer:those who import the goods for their industrial consumption is called

industrial importer.

2. Registration of importer:

In terms of the importers, exporters and indenter (registration order 1981) no person can import

goods Bangladesh unless registered with the CCI & E or exempted from the provision of the said

order. Personal user needs no registration. They may import beyond USD 5000/= with the

permission from CCI & E.

Persons exempted from registration:

1. Government departments.

2. Local authorities an statutory bodies.

3. Recognized educational institutions.

4. Hospitals.

5. Imports of goods, which does not involve remittance of foreign exchange.

6. Reading materials or medicine imported for personal use within permissible limit given in the policy

in force.

7. Capital machineries and spare parts for new industry.

The interested persons/institutions submit application to the CCI & E along with the following

papers for registration as importer.

1. Nationality certificate.

2. Certificates from the chamber of commerce and industry/registered trade association3. Bank solvency certificate

4. Any order documents required by CCI & E

3. Import formalities and procedures:

Letter of credit: credit means any arrangement, however named or described, that is irrevocable

and thereby constitutes and undertaking of the issuing bank to honor a complying presentation.

Import may be done without letter of credit (L/C) against LCAF up to a certain amount, fixed by

the CCI & E from time to time. But in general import must be done through L/C to be issued by an

AD bank.

1. The AD branches should open L/C only on behalf of their own customers who maintain A/Cs with

them and are known to be participating in trade.

2. It is not permissible to open L/C for imports in favour of a beneficiary in countries form where

imports are banned.

3. L/Cs covering imports against valid LCA form are required to be opened within the period

prescribed by the CCI & E in the import policy order or through public notice issued from time to

time.


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4. Under the existing instructions issued by board of investment(BOI), L/Cs for import of merchandise

by the investors are required to be opened within six months formthe date of receipt of permission

letter issued by the director general, BOI (industries), govt. of Bangladesh.

4. Letter of credit and its classification:

A letter of credit is a conditional undertaking of payment by the issuing bank to the beneficiary. Inconsideration of source of payment there are mainly two types of L/C, Sight L/C and deferred

L/C. if a third bank adds their undertaking for payment in addition to the undertaking of issuing

bank then the L/C is called add confirmed L/C.

Types of L/Cs are:

1. Irrevocable

2. Revocable

3. Confirmed

4. Transferable

5. Back to back

5. Concern partys to an L/C

i) Importer/applicant/buyer

ii) Exporter/beneficiary/supplier

iii) Issuing bank/opening bank

iv) Advising bank/notifying bank

v) Negotiating bank

vi) Reimbursement bank

vii) Confirming bank

6. Application for Import:

a) A valid importer will submit the following paper/documents to his bank for opening L/C.

i. L/C application form duly signed by the importer; with adhesive stamp for tk.

150/-

ii. Indent / proforma invoice

iii. Insurance cover note with money receipt

iv. LCAF duly filled in & signed by the importer

v. Membership certificate form chamber of commerce / trade association

vi. TIN certificate and up to date tax payment declaration

vii. Charge documents, including Musharaka/ Murabaha agreement

viii. IMP

ix. IRC

x. VAT certificate


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xi. Trade license

xii. Memorandum & articles of association

xiii. Partnership deed

xiv. Resolution of the board

xv. Photograpn

xvi. Others, if any

b) The following issues are to be checked carefully:

i. Checking of L/C application an verification of the signature of the importer.

ii. Checking of IMP form and verification of signature of the importer.

iii. Checking of the renewal of IRC and its permissible limit.

iv. Goods must be importable an permissible by the import policy against Pro

forma invoice/indent.

v. Pro forma invoice/indent must be accepted by the importer

vi. In case of indent, Bangladesh Bank permission for indenting should be

obtained.

vii. Proper H.S. code No. should be incorporated in LCAF.

viii. Insurance policy should cover all the required clauses and premium paid

certificate/money receipt should be along with the policy.

ix. Business experience of the importer should be counted.

x. Price and market demand of the goods must be verified.

xi. Credit report of the supplier should be obtained prior to opening L/C for indent

tk. 5 lac & above and proforma invoice tk. 2 lac and above.

c) Authentication/Registration of LCAF:

When the importer submits LCAF (Letter of Credit Authorization Form) with other papers to the

bank to open L/C, bank will authenticate the LCAF, confirming the following:

i. IRC is valid, renewal fee paid (if required)

ii. Item to be imported is eligible as per import policy/Pass book.

iii. LCAF is duly filled in & signed by the importer

iv. H.S> code to be inserted into LCAFThe LCA forms are required to be properly filled in and duly signed by the importer in presence of

concerned official of the branch. The branch is required to keep proper records of the stocks and

issuance of each set of LCA form.

LCAFs remain valid for remittance for 09 (nine) months in case of commercial items and 17

months in case of capita machineries & spares.


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d) Distribution of LCAF:

Original Exchange control copy

Duplicate Custom purpose copy

Triplicate CCI&Es office

Quadruplicate Statistical copy

Quintuplicate Registration unit of Bangladesh bank

Last copy Office copy of the bank

e) Sanctioning for opening L/C:

Upon receipt of the application dealing officer will issue office note stating the following:

a) Whether the client has valid head office sanctioned limit

b) Whether the proposal is within the limit or within the power of branch incumbent

c) The item to be imported is permissible

d) Whether credit report of the supplier obtained if the value of the credit exceeds tk. 200000/-

against proforma invoices issued directly by foreign suppliers and tk. 500000/- against indents

issued by the local agents of the suppliers.

e) Market report of the goods to be obtained

f) Permission from Ministry of Commerce in case of CIF value.

g) Competitive price of goods to be taken.

h) The indent bears the IRC number & registration number of indenter.

i)

general banking activities and financial performance on social islami bank limited.docx

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