islami bank bangladesh mohd shamsul haque

Islamic Banking Opportunities in Asia: Islamic Banking Opportunities in Asia:

FocusFocus--BangladeshBangladesh

MohdMohd. Shamsul . Shamsul HaqueHaque

Deputy Managing Director

Operations Wing

Islami Bank Bangladesh Limited

I S L A M I B A N K B A N G L A D E S H L I M I T E D

Country Information : BangladeshCountry Information : Bangladesh

150Million Population

Muslim : 90%

Growth Rate : 1.32%

Density : 990 per Square Km.

Life expectancy : 67 years

Below extreme poverty line : 25%Per Capita Income : USD 750


Global Global visvis a a visvis Asian Islamic Banking Scenario Asian Islamic Banking Scenario

Due to financial crisis World output contracted by 0.80% in 2009 as against growth of 3.00% in 2008. World trade volume also contracted by 12.30% in 2009 as against growth of 2.80% in 2008. Despite negative growth of world output and world trade volume there has been continuous growth of Islamic Banking world wide.

According to an S&P report, assets of the top 500 Islamic Banks expanded by 28.60% to total $822 billion in 2009, compared to $639 billion in 2008.

Malaysia is recognized as Asia’s Islamic Financial hub by Price Water House Coopers. At the end of 2009 Malaysia’s Islamic Banking assets equivalent to $35.20 billion having largest “sukuk”i.e the Islamic equivalent to bond to $25 billion.


In Asia, mainly in the Middle Eastern countries, Malaysia, Indonesia, Thailand, India, Pakistan and Bangladesh Islamic Banking growth is at a faster rate then the conventional banking.

In Bangladesh there are 7 (seven) full fledged Islami Bank having 496 Branches and 8 (eight) Bangladeshi Conventional Banks and 3 (three) Foreign Commercial Banks had 21 (twenty one) IslamiBanking Branches.

During the recent past 2 (two) conventional banks were converted into full fledged Islami banks.

Among the above, growth rate of IBBL was 23% as against 20.00 % conventional banks.


Global Global visvis a a visvis Asian Islamic Banking Scenario Asian Islamic Banking Scenario


Objectives : Objectives :

First, the savings and investment mobilization mechanisms of both Islamic and Traditional banks have been analyzed.

Second,a number of apparent similarities that frequently equalize bothbanking have been explained, although they are quite different by nature and in effect.

Despite the growth of Islamic banking along with Traditional banking in Bangladesh and other parts of the world, there is a debate regarding whether Islamic banking is any different from the Traditional banking. In this presentation, in order to clarify misleading concepts about Islamic banking, it has been sought to achieve several objectives.

Islamic Banking Opportunities in Asia: FocusIslamic Banking Opportunities in Asia: Focus --BangladeshBangladesh


Objectives ContObjectives Cont ……

Finally, the trends of branch expansion of all Islamic banks and the trends of Islamic banking branch expansion of the traditional banks in Bangladesh have been analyzed to examine the premises of Islamicbanking.

It is hypothesized that the growth of Islamic banking system is gaining momentum in Bangladesh. The results indicate Islamic banking a promising one for the country to minimize its gap between savings and investment.

Islamic Banking Opportunities in Asia : FocusIslamic Banking Opportunities in Asia : Focus --BangladeshBangladesh

Third, the Islamic nature and interpretation of such apparent similarities between the Islamic and Traditional banking, as premises of Islamic banking have been explained.

Finally, the trends of branch expansion of all Islamic banks and the trends of Islamic banking branch expansion of the traditional banks in Bangladesh have been analyzed to examine the premises of Islamicbanking.

It is hypothesized that the growth of Islamic banking system is gaining momentum in Bangladesh. The results indicate Islamic banking a promising one for the country to minimize its gap between savings and investment.


What is Islamic Banking ?What is Islamic Banking ?

An Islamic Bank is a financial institution that operates with the objective to implement and materialize the economic and financial principles of Islam in the banking arena.

As per OIC:“a financial and social institution whose objectives and operations as well as principles and practices must conform to the principles of Islamic Shariah (Jurisprudence), and which must avoid the interest in any of its operations” and “a Company which carries on Islamic banking business.

Islamic Banking Act 1983 of Malaysia: Islamic banking business means banking business whose aims and operations do not involve any element which is not approved by the religion Islam.”

What make Islamic Banking Different from What make Islamic Banking Different from Conventional Western bankingConventional Western banking

� No interest (Riba) paid or charged for any transaction or service to ensure justice, welfare and non-exploitation.

� The investments of an Islamic bank must be channeled to the Islamic Shariah approved (Halal) sectors by Islamic modes of finance like Mudaraba, Musharaka, Bai-Muajjal, Bai-Salam, Ijara, Hire Purchase, etc., Based on the sharing of risk and profit.

� Islamic bankers in effect generate “profit and loss”transactions in which the lender or bank shares in gains or losses based on the economic viability of the project and the credit worthiness of the customer.



Principles of Islamic Banking and FinancePrinciples of Islamic Banking and Finance

Prohibition on interest : The Qur'an forbids the charging of Ribaon money lent. "O You who believe! Fear Allah and give up that remains of your demand for usury, if you are indeed believers."

Concept of moneyConcept of money

In an Islamic system money is primarily and exclusively a measure of value, a means of exchange and a standard of deferred of payment. Money has to operate through some real economic activity or service. It is a facilitator and an intermediary, not an active self-contained agent in itself.


Rules regarding Islamic investment

� Any predetermined payment over and above the actual amount of principal is prohibited.

� The lender must share in the profits or losses arising out of the enterprise for which the money was lent

� Making money from money is not acceptable in Islam.

� Gharar (Uncertainty, Risk or Speculation) is also prohibited.

� Investments should only support practices or products that are not forbidden or even discouraged by Islam

Principles of Islamic Banking and Finance Principles of Islamic Banking and Finance ContCont ……

Analysis of Savings : Analysis of Savings : Islamic vs. Traditional bankingIslamic vs. Traditional banking

Current

Savings and

Fixed Deposits.

Al Wadiah (Trust) Current

Mudarabah Savings and

Term deposits.

Traditional banksIslamic Banks


services



Islamic BanksIslamic BanksIslamic Banks

� Islamic banks accept deposits with the condition that the money will be put to work combined with the skills and management expertise of banks.

� The depositor would get back his principal amount together with a share of profit after the expiry of the contract.

� In fact, the depositor agrees to put his money in the bank’s investment account and to share profits with the bank. In this case, the depositor is the supplier of capital and the bank is the manager of capital.

� The depositor does not earn interest on a fixed rate in Islamic banking system, but accepts some of the business risks and earns a share of the profit.

� The depositor is not guaranteed any pre-determined return on the nominal value of his deposit like interest-bearing banks, but is treated as a shareholder of the bank and as such, is entitled to a share of the profits made by the bank. if the bank incurs losses, the depositor shares in these losses and the value of his deposit is reduced.



Traditional banksTraditional banksTraditional banks

� The Traditional bank accepts deposits to supply money to the income generating activities of entrepreneurs. The major source of funds for Traditional banks is customer deposit, on which the bank pays fixed interest rate.

� This deposit is a form of debt given to the bank by a bank customer.

� The bank has to pay to the depositor the principle as well as interest, regardless whether the bank makes a profit from the money or not.

� In case of a bad loan, the bank has to pay the depositor from its own resources. The depositor has not shared risk with the bank, but is getting paid for his debt to the bank


Analysis of Investment Mechanisms : Analysis of Investment Mechanisms : Islamic vs. Traditional bankingIslamic vs. Traditional banking

Lending (Investment) services :

Mudarabaha

Advances for Hire-purchaseQard Hasana

Purchase or Discount of BillsBai-Salam

OverdraftsIjara

LoansBai-Murabaha

Cash CreditsBai-Muajjal

Musharakah

Traditional banks Islamic Banks



Islamic Investment Islamic Investment MechanismsMechanisms

Islamic banks earn profit either from investment in trading (bai) and leasing (Ijara) or in production/manufacturing.

As a result, Islamic banks get directly involved in trade and industry, for which Islamic banks perform functions of both an intermediary and manager.

Lack of expertise to appraise and monitor different types of industries and long drawn court procedures for recovery of bad loans in case of default by borrowers make Islamic banks hesitant for long-term Mudaraba or Musahrakamodes of lending.

Consequently, ' bai ' and ‘lease’ modes of investment become dominant forms of financing by Islamic banks.



Islamic Investment Islamic Investment Mechanisms ContMechanisms Cont ……

Islamic banking is involved indirectly with commodity trading, as a manager of funds based on the request of the client.

The business relationship between the bank and client on an actual basis considers every aspect of assurance of profitability, such as credit risk, liquidity risk, maturity risk and inflation risk.

In case of genuine default, the Islamic bank recovers only principal without any compensation for bearing risk.

In case of willful default, there is no alternative to the Islamic bank except demanding compensation for bearing risk. However, Islamicbanks do not account this compensation as part of its income, rather they distribute these monies to the poor.


Analysis of Trends of Islamic Bank Branch ExpansionAnalysis of Trends of Islamic Bank Branch Expansion

�� 19831983: : Islami Bank Bangladesh Limited, the 1st Islamic Bank in South East Asia, started its journey with 3 branches.

� 1987: Al-Baraka Bank Ltd . (Now ICB Islamic Bank Limited) established and IBBL branch number stood at 18.

� 1995: Al Arafah Islami Bank Ltd. andSocial Investment Bank Ltd. (renamed as Social Islami Bank Limited) wereestablished.

� 1998: The number of branches of 4 Islamic Banks stood at 172.

� 2000: Prime Bank Ltd., a Traditional bank, opened an Islamic branch that provided a new dimension and set a new example of dual banking systemin the country.

� 2000: Shamil Bank Bahrain, (Now Bank Al(Now Bank Al-- FalahFalahLtd.) a foreign Islamic bank Ltd.) a foreign Islamic bank opened its branch in Bangladesh. opened its branch in Bangladesh. The number of Islamic bank branches The number of Islamic bank branches stood at stood at 194194. .


Analysis of Trends of Islamic Bank Branch Expansion ContAnalysis of Trends of Islamic Bank Branch Expansion Cont ……

� 2001: Shahjalal Bank Ltd., a local Islamic bank, was established.

� 2002: 5 domestic and one foreign Islamic banks’ branches stood at 225.

� 2003:5 new domestic Traditional banks namely i. The Dhaka Bank Ltd. ii. The South East Bank Ltd. iii. Premier Bank Ltd.iv. The City Bank Ltd . and v. Jamuna Bank Limited opened 9 Islamic bank branches.

� Prime Bank Ltd . also opened second Islamic branch in the same year.

�� Up to the year 2003:Up to the year 2003:The number of branches of 7 Islamic banks stood at 496 The number of branches of 7 Islamic banks stood at 496 and number of Islamic branches of 11 Traditional banks stood 21 and number of Islamic branches of 11 Traditional banks stood 21 i,ei,e, altogether , altogether 517 =(496+21) Islamic bank branches were opened in the country.517 =(496+21) Islamic bank branches were opened in the country.


Analysis of Trends of Islamic Bank Branch Expansion Analysis of Trends of Islamic Bank Branch Expansion ContCont ……

�� 2004:2004: EXIM Bank Ltd.EXIM Bank Ltd. has migrated all of its conventional banking operation has migrated all of its conventional banking operation into into ShariahShariahbased Islami banking with its 52 branches.based Islami banking with its 52 branches.

�� Subsequently four (4) nationalized traditional commercial banks Subsequently four (4) nationalized traditional commercial banks (the largest (the largest banking companies) took initiative to implement Islamic banking banking companies) took initiative to implement Islamic banking system side by system side by side with their existing one. side with their existing one.

�� 2005: Bank Al 2005: Bank Al FalahFalah LimitedLimited , a, a foreign Islamic bank opened its office in foreign Islamic bank opened its office in Bangladesh and now its branch number is 5. Bangladesh and now its branch number is 5.


Analysis of Trends of Islamic Bank Branch Expansion Analysis of Trends of Islamic Bank Branch Expansion ContCont ……

�� In the year 2009,In the year 2009, the total number of Islamic banks stood at the total number of Islamic banks stood at 88 and the total and the total number of Islamic bank branches stood at number of Islamic bank branches stood at 517517 in Bangladesh. in Bangladesh.

�� It follows, therefore, the growth of Islamic banking in terms ofIt follows, therefore, the growth of Islamic banking in terms ofbranch expansion branch expansion was observed not only in Islamic banking companies but also in Twas observed not only in Islamic banking companies but also in Traditional raditional banking companies. banking companies.

�� The premises of Islamic banking system in Bangladesh have becomeThe premises of Islamic banking system in Bangladesh have becomestronger, stronger, although Islamicalthough Islamic--banking system is working side by side with Traditional banking banking system is working side by side with Traditional banking system. system.

�� It is an encouraging experience indicating a promising banking sIt is an encouraging experience indicating a promising banking system for other ystem for other countries of Asia to minimize their gap between savings and invecountries of Asia to minimize their gap between savings and investment.stment.


1111994

21496820091031993

1025872004971992

2422003841991

2252002711990

20862001581989

19452000371988

18519992421987

11721998181986

1521997131985

137199671984

12341995311983

No. of Islamic Branches of Traditional

banks

No. of Branches of Islamic Banks

No. of Islamic Bank

YearNo. of Islamic Branches of Traditional

banks

No. of Branches of Islamic Banks

No. of Islamic Bank

Year

Analysis of Trends of Islamic Bank Branch ExpansionAnalysis of Trends of Islamic Bank Branch Expansion

Regulatory and Supervisory Body :Regulatory and Supervisory Body :

.

�� Securities & Exchange CommissionSecurities & Exchange Commission

�� Central Bank : Bangladesh BankCentral Bank : Bangladesh Bank

�� Islamic Banks Consultative Forum (IBCF)Islamic Banks Consultative Forum (IBCF)

�� Central Central ShariahShariah Board for Islamic Banks of BangladeshBoard for Islamic Banks of Bangladesh



Central BankCentral Bank Guidelines for Islamic Banking: Guidelines for Islamic Banking: November 2009November 2009

.

The proposed bank company will be a public limited company and a minimum of 50% share shall be offered to the public.

All the financial transactions of the banking company shall be conducted based on the principles of Islamic Shariah.

The banking company, to commence business, shall raise a minimum paid-up capital of Tk.2.00 billion and shall at all times maintain the required capital adequacy ratio,asprescribed by the Bangladesh Bank.

Criteria for setting up full-fledged Islamic Bank.

Principles of Deposit

Islamic banks receive deposits under two principles:i) Al-Wadeeah principle.ii) Mudaraba principle.

Central BankCentral Bank Guidelines for Islamic BankingGuidelines for Islamic Banking

.

Investment Principles & Investment Products

Islamic banks do not directly deal in money. They run business with money. The funds of Islamic banks are mainly invested in the following modes:

1) Mudaraba2) Musharaka3) Bai-Murabaha (Murabaha to the purchase orders)4) Bai-Muajjal5) Salam and parallel Salam6) Istisna and parallel Istisna7) Ijara8) Ijarah Muntahia Bittamleek (Hire Purchase)9) Hire Purchase Musharaka Mutanaqisa (HPMM)10) Direct Investment11) Investment Auctioning etc.12) Quard13) Quard Hassan etc.


Central BankCentral Bank Guidelines for Islamic BankingGuidelines for Islamic Banking

.

Under Mudaraba principles, profit accrued from investment and financing are shared between the depositors and the bank based on pre-agreed profit ratio. Losses, if any, will be borne by the depositor unless the loss is due to the negligence by the bank in managing the depositors' funds.

Given this unique relationship where the depositors would have adirect financial interest over the bank's income, it is essential to ensure calculation of rate of return in a fair and equitable manner.

Framework of Rate of Return:



ISLAMIC BANKS CONSULTATIVE FORUM (IBCF)ISLAMIC BANKS CONSULTATIVE FORUM (IBCF)

Goals :

• To establish Central Shariah Board for all Islamic Banks in Bangladesh, Islamic Money Market, Islamic Insurance Company(s),

• Innovation of new financial products• Embarking in investment through syndication etc.

The problems and issues relating to the growth and development of Islamic Banking in Bangladesh are discussed and common strategy and policies are formulated for implementation through this common Forum.


Central Central ShariahShariah Board for Islamic Banks of BangladeshBoard for Islamic Banks of Bangladesh

Central Shariah Board for Islamic Banks of Bangladesh (CSBIB) is a national Islamic non-profit corporate body of Islamic banks and Islamic banking branches/windows operating in Bangladesh.

The main objective of CSBIB is to provide overall cooperation and assistance to the government, central bank, regulatory authority and its member banks for tracking right path to Islamic banking industry under the light of Islamic Shariah.


IslamiIslami Bank Bangladesh LimitedBank Bangladesh Limited : : Pioneer in Bangladesh Pioneer in Bangladesh

IBBL is a scheduled Bank

IBBL is a joint venture Bank

ISLAMI BANK BANGLADESH LIMITED (IBBL) ISLAMI BANK BANGLADESH LIMITED (IBBL) was established on 13th March 1983

IBBL is a commercial Bank

IBBL is a multinational Bank


Mission : Mission : IslamiIslami Bank Bangladesh Limited Bank Bangladesh Limited

To invest in the priority sectors and less developed areas of the country

To encourage socio-economic enlistment and sustained economic growth of the country.

To introduce welfare oriented banking system ensuring equity and justice in the field of all economic activities

To achieve balanced growth and equitable development through diversified investment operations

Capital Structure of IBBLCapital Structure of IBBL

$1.45$14.49$14.49Face value per Share

144.9372.4614.50Authorized Capital Million US$

34312139Equity Million US$

$4.7.9

$0.51

25% stock

7549

38%

62%

5

2000

$ 8.09

$0.71

25% stock

17201

42.12%

57.08%

40

2005

90Paid of Capital Million US$

52,164 Total share holders

$0.80EPS

20% stock

& 10% cashDividend

58.23%Foreign Shares

41.77%Local Shares

Market price of Shares (Highest)

Particulars

$12.90

2009


Equity Structure of IBBLEquity Structure of IBBL

2511.442938.50Total Risk Weighted Assets100.00%10.72%269.16100.00%11.65%342.32Total Capital/Equity

39.31%4.22%105.8037.87%4.41%129.63Total Supplementary Capital

16.15%1.73%43.4812.70%1.48%43.48l. Mudaraba Perpetual Bond1.28%0.14%3.432.28%0.27%7.81k. Revaluation Reserves of securities0.21%0.02%0.560.16%0.02%0.56j. Exchange Equalization Account6.13%0.66%16.499.13%1.06%31.26i. Assets Revaluation Reserves (50)%

3.07%0.33%8.272.16%0.25%7.39h. General Provision on Off Balance Sheet Item

12.47%1.34%33.5611.43%1.33%39.13g. General Provision on UC Investmentii. Supplementary Capital

60.69%6.50%163.3662.13%7.24%212.69Total Core Capital

7.67%0.82%20.667.84%0.91%26.86f. Retained Earnings0.17%0.02%0.460.14%0.02%0.46e. Dividend Equalization Account0.65%0.07%1.741.55%0.18%5.32d. General Reserve26.60%2.85%71.6026.44%3.08%90.49c. Statutory Reserve0.01%0.00%0.030.01%0.00%0.03b. Share Premium25.59%2.74%68.8726.15%3.05%89.53a. Paid-up Capital

i. Core Capital

% to total

Capital% to RWA2008% to total

Capital% to RWA2009Particulars


Million US$

IslamiIslami Bank Bangladesh Limited : At a glanceBank Bangladesh Limited : At a glance

111

245

367

398

466

2000

536

524

1080

1408

1562

2005

28%

12%

11%

9%

9%

Share to Country

85%

40%

49%

52%

51%

Share to Total Islamic

Banks

Remittance

Export

Import

Investment

Deposit

Particulars

2822

1542

2337

1st

position in Import

Export

Remittance

&

Operating Profit

3540

3272

National Rank 2009

2009

Million US$


IslamiIslami Bank Bangladesh Limited : At a glanceBank Bangladesh Limited : At a glance

919Foreign Correspondents of IBBL

497Islamic Banks Branches

8 Full-fledged Islamic Bank

295Correspondent Banks of IBBL

21Conventional Banks Islamic Branches

232Total number of branches of IBBL

All Bank Branches in Bangladesh

Investment account Holder

Deposit account Holder

Particulars

7152

4,591,463

80,471

2009


Mode wise Investment of IBBLMode wise Investment of IBBL

100.00%2609100.00%3110Total

0.02%10.02%1Musharaka

0.95%250.97%30Bai- Salam

1.19%311.32%41Quard

5.68%1485.26%164Purchase& Negotiation

3.64%953.41%106Bai-Muazzal

35.08%91534.42%1071Hire Purchase Under Sirkatul Melk

53.44%139454.60%1698Bai-Murabaha

% to Total Investment

Amount% to Total Investment

Amount

20082009Mode


Amount in Million Dollar

Economic PurposeEconomic Purpose --wise Investmentwise Investment of IBBLof IBBL

Trade , 31.87%

INDUSTRY , 52.34%

Others , 3.43%

AGRICULTURE & AGRO INDUSTRY,

3.53%

RDS, 1.78%Other Special

Schemes, 1.18%

Transport, 1.65%

Real Estate, 4.23%


Rural Development Scheme (RDS) : At a glanceRural Development Scheme (RDS) : At a glance

99%Rate of Recovery

Members Savings (Million US$)

Outstanding (Million US$)

Disbursement (Million US$)

No. of Member

No of Village

Particulars

23

62

394

4th

position

Out of

1500MFI

of the

Country

10800

500154

National RankMay, 2010


IBBLIBBL ’’ss International Affiliation International Affiliation

� Member, Accounting and Auditing Organization for Islamic Financial Institutions, Bahrain.

� Member, General Council for Islamic Banks and Financial Institutions, Bahrain

� Member, International Chamber of Commerce, (Bangladesh Chapter)

� Member, International Islamic Conciliation and Commercial Arbitration Centre, UAE

� Member, International Islamic Financial Market (IIFM), Bahrain

� Member, Islamic Financial Services Board (IFSB), Malaysia


IBBLIBBL ’’ss National Affiliation National Affiliation

� Member, Bangladesh Institute of Bank Management (BIBM)

� Member, The Institute of Bankers, Bangladesh (IBB)

� Bangladesh Association of Banks (BAB)

� Bangladesh Foreign Exchange Dealers’ Association (BAFEDA)

� Central Shariah Board for Islamic Banks In Bangladesh

� Islamic Banks’ Consultative Forum (IBCF)

� Dhaka Chamber Of Commerce & Industry (DCCI)



Special Features of Special Features of IBBLIBBL ’’ss PerformancePerformance

� IBBL is Recognized as the Best Bank in National and International Level.

� National Best Corporate Award 2007 By Institute of Cost Management and Accountant Bangladesh.

� ‘Global Finance’ A New York Based Financial Magazine, Named IBBL as the Best Bank of the Country for 2009,2008,2007,2005, 2000 & 1999.

� ‘Bank Watch’ A New York Based International Credit Rating Agency recognized IBBL as the Market Leader.


Corporate Social ResponsibilityCorporate Social Responsibility

�� Bangladesh Bank issued a circular No. DOS. 01 dated 1 June 2008 Bangladesh Bank issued a circular No. DOS. 01 dated 1 June 2008 regarding regarding guidelines for mainstreaming Corporate Social Responsibility (CSguidelines for mainstreaming Corporate Social Responsibility (CSR) in R) in banks and financial institutions. banks and financial institutions.

�� Accounting and Auditing Organization for Islamic Financial InstiAccounting and Auditing Organization for Islamic Financial Institutions tutions (AAOIFI) also formulated the same as their Governance Standard N(AAOIFI) also formulated the same as their Governance Standard No. 7 of o. 7 of which IBBL is obliged to follow as the member of their charter. which IBBL is obliged to follow as the member of their charter.

�� IslamiIslami Bank Bangladesh Limited being one of the most important corporaBank Bangladesh Limited being one of the most important corporate te citizen of the country, has been discharging its responsibilitiecitizen of the country, has been discharging its responsibilities to the society s to the society in general, both directly through its mainstream operations as win general, both directly through its mainstream operations as well as ell as indirectly through its fully owned subsidiary indirectly through its fully owned subsidiary ‘‘ IslamiIslami Bank FoundationBank Foundation’’ since since inception.inception.



As per guidelines of the Central Bank, CSR practices of the BankAs per guidelines of the Central Bank, CSR practices of the Bankare are categorized as follows:categorized as follows:

�� CSR practices within the organization. CSR practices within the organization.

�� Scrutinizing environmental and social impact of the projects fScrutinizing environmental and social impact of the projects financed/to be inanced/to be financed by the Bank.financed by the Bank.

�� Reaching out with financial services to the less fortunate segReaching out with financial services to the less fortunate segments of the ments of the community. community.

�� Community investment by way of donations.Community investment by way of donations.



�� IslamiIslami Bank Medical CollegeBank Medical College�� 6 Modern Hospitals and 8 Community Hospitals6 Modern Hospitals and 8 Community Hospitals�� 5 Vocational Institutes named 5 Vocational Institutes named IslamiIslami Bank Institute of TechnologyBank Institute of Technology�� IslamiIslami Bank Physiotherapy and Disabled Rehabilitation CentreBank Physiotherapy and Disabled Rehabilitation Centre�� Distressed Women Rehabilitation CentreDistressed Women Rehabilitation Centre�� IslamiIslami Bank International School and CollegeBank International School and College�� Service Centre for vulnerable people Service Centre for vulnerable people �� MonoromMonoromIslamiIslami Bank Crafts & FashionsBank Crafts & Fashions�� Other ActivitiesOther Activities

�� Scholarship to the poor and meritorious studentsScholarship to the poor and meritorious students

�� Grant for Medical treatmentGrant for Medical treatment

�� Grant for sustenance & marriage Grant for sustenance & marriage


RatingsRatings

� Wide Branch Network, � Strong Market Share, � Stable Customer Deposit Base, � Diversified and Innovative Product Line, � Experienced Management Team, � Contribution to Corporate Social Responsibility, � Good Financial Performance, � Good Asset quality, � Comfortable liquidity position and low cost of fund.

Rating Agency :Credit Rating Information and Services Limited (CRISL)

Long-term ‘AA+’

Short-term ‘ST-1’

Basis of Rating:


ConclusionConclusion

Islamic banks in Bangladesh have become, to an extent, successful in the field of savings and investment mobilization. As a result, the growth of Islamic banking in terms of branch expansion was evident not only in Islamic banking companies but also in Traditional banking companies.

Islamic banking is growing well in terms of resource mobilization. These indicate that premises of Islamic banking system in Bangladesh have become stronger, although Islamic-banking system is working side by side with Traditional banking system.

The banking system of the country will forward towards Islamic banking system in future and it is really promising for other countries.


RecommendationRecommendation

In order to remove misconception about Islamic banking from the minds of bankers and customers, there is no alternative to publicity, research and training of Islamic banking practices. Research should focus on the development of financial products that conform to Islamic Sharia, and training should be given to bankers, potential researchers and bank customers.

islami bank bangladesh mohd shamsul haque

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