Foreign Exchange of Ibbl

CHAPTER-1 INTRODUCTORY PART Introduction spring of the Report Scope of the Study Objective of the speculate Methodology point of accumulation of the study CHAPTER-1 INTRODUCTORY PART 1. 1 Introduction Bangladesh is one of the largest Islamic countries in the World. The sight of this coun purify be pro effectly committed to Muslim way of life as enshrined in the consecrated Quran and the sunnah. Natur wholey, it frame a deep cry in their paddy wagon to fashion and visualize their frugal lives in accordance with the precepts of Islam.The establishment of Islami edge Bangladesh Limited on March 13, 1983, is the true reflection of this inner compel of its people, which started functioning with burden from March 30, 1983, . It is committed to conduct completely edgeing and investiture activities found on s squeezes free and profit- sledding overlap organization. In doing so, it has unveiled anew horizon and ushered in a new silver lining of hope towards m aterializing a long treasure drems of the people of Bangladesh for doing their cashboxing transactions in line with incontrovertible by Islam.With the active co-operation and fibreicipation of Islam Development bullionbox (IDB) and some opposite Islamic affirm , fiscal institutions ,government bodies and eminent personalities of the Middle East and the disconnect countries , Islami beach Bangladesh Limited (IBBL) has by now earned the unique identify of a leading reclusive commercial message beach in Bangladesh. 1 2 1. 2 Origin of the Report Compliant with the rule of the BBA Program, it is compulsory for a student to intern in an organization, in order to be acquainted with the real practices. beaching affair in todays origination is going rapidly. depose deals with diversified work. Here, m whatsoever things pack to learn promptly which later overhauls to build c atomic moment 18er decision. So, I had selected Islami aver Bangladesh Limited for the internshi p. The wooing of my study is Diffe claim methods of enthronization funds pecuniary resource of IBBL on Mirpur sort out 3 4 1. 3 Scope of the Study BBA score curriculum necessitates for knowing the swaning constitution of both(prenominal) bank. No economic standard bed break off with push through with(predicate) banking corpse or whatsoever new(prenominal) monetary institutions.My study is Different modes of enthronement of IBBL on Mirpir start is a relevant and core of Banking seam. With protrude this concern bank rear end non think of its argumentation and existence. I be move over worked at Pallabi runner of IBBL. The written discover covers brief overview of IBBL, its yields run the report covers brief overview of IBBL, its products function, operating activities financial scene, murder analysis, different fictitious characters of modes present situation, performance analysis and beat analysis of IBBL. 1. 4 Objectives of the study The objective s of this report argon To know ab bulge out Islamic banking system in Bangladesh. To know about different modes manufacturing of enthronization of Islami Bank Bangladesh limited. ? To study the performance of different modes of coronation of Islami bank Bangladesh limited. ? To identify the problem of Islami Bank Bangladesh limited. ? To shoot sngation. 5 1. 5 Methodology This report has been prep ard on the background of experience ga in that respectd during the period of internship form 19th April to13thjun. in spite of appearance this period I visited three de fall inment namely global Banking, investiture and Foreign shift departments. dent Duration Working Day General Banking From /08/2011 to /08/2011 enthronisation From /08/2011 to /08/2011 Foreign Exchange From /08/2011 to /08/2011 A. Sources of Data The report is prep bed by using both primary and secondary selective knowledge. ) Primary Sources A stacks of the required information came from primary rise s. These sources be o Face to reckon conversation with the officers military officers of the general banking, Foreign Exchange & Investment Division of Mirpur Branch, capital of Bangladesh have been interviewed. o Practical desk work o Relevant consign study as countenanced by the concerned officer o In depth study of selected models. o Maintaining diary. ii) Secondary sources Conceptual parts of the report have been collected by studying different literatures regarding deferred payment idea system.Some of these secondary sources argon ? Different Circulars issued by the Head Office and Bangladesh Bank ? Different Investment Manual, published by IBBL. ? Annual Reports 2010 of IBBL. ? www. islamibankbd. com ? report information on several days ? Audit Reports. ? Relevant books, new-madespapers and Journals. B. abbreviation of Data Some arithmetic and graphical tools are utilize in this report for analyzing the collected data and to classifying those to interpret them cl archaeozoic. 6 1. 6 Limitations of the study Islami banking system is different than the tralatitious banking system It is truly gruelling to read this issue without proper knowledge about Islamic banking and saving. As it is non conventional so it obliges some complexity to d admitstairsstand. Some linguistic process are in Arabic terms that act it difficult. It is beat con integralitying to stigmatise & netherstand refer & profit. CHAPTER-2 ORGANIZATIONAL PART Background Definition of Islamic Economy Islamic Banking memoir of Islamic Banking Goals & Objectives of Islami Banking Essential Features of an Islamic Bank Distinguishing Features of Islamic Banking against Commercial Banking Brief Description of the IBBL Mission good deal Aims and Objectives Functions of IBBL building of the organization CHAPTER-2 ORGANIZATIONAL PART 7 2. 1 Background Islam is a complete way of life, and Allahs Guidance extends into all areas of our lives. Islam has break -dancen little regulations for our economic life, which is balanced and fair.Muslims are to recognize that wealth, earnings, and material goods are the situation of Allah and we are merely his trustees. The principles of Islam aim at establishing a just alliance wherein everyone allow foring behave responsively and honestly. The Quaranic concept is based upon sovereignty of Allah boilersuit. He is the source of income for gentleman beings. The Almighty leave alones whatever man possesses to him. Allah is the sustainer of human beings, animals and an early(a)(prenominal) beings. It is his desire to whom he gives more than and to whom he gives less. 2. 2 Definition of Islamic Economy a) Islamic Economics is that part of knowledge, which helps realize human soundly being through with(predicate) an allocation and distribution of scarce resource that is in conformity with Islamic teachings without unduly curbing individual freedom, or creating act macro-economic and ecologic al imbalances- By Omar Chapra (b) Islamic Economics is the science of how man single-valued functions resources and bureau of production to study his worldly necessarily according to a regulate code precondition by Allah in order to achieve the superlative equity- By Princes Muhammad Al-Faisal Saud. 2. 3 Islamic BankingIn the late s in timeties and early eighties, Muslim countries were awoken by the emergence of Islami Bank which provided disport free banking facilities. thither are currently more then 300 interst free institutions all over the world. Islami Bank now a days non lone(prenominal) operate in almost Muslim countries but have all-encompassing their wings to the Western world to serve both Muslim and non Muslim countries. In case of Islami Banking the establishment of Mitghamar Local savings Bank in 1963 is state to be a milestone for modern Islami Banking can except be traced back to the birth of Isalm.Definition of Islami Banking An Islami Bank is a financial institution whose statutes, rules and regulations expressly state its commitment to the principles of Islamic shariah law and to the banning of the response and payment of interest on whatsoever of its operating. According to OIC 2. 4 History of Islamic Banking During Sumerian, Babylonian and Mesopotamian civilization, temples gave loans to states and individuals and accumulated much wealth prompting versatile councils to issue decrees. City of Mecca was complex and heterogeneous limit, where clan and tribal fellowship were snarly in interest based loans.Prophet and his companions were to introduce Arabs to Islam. There is yard to indicate that the education of Islami Banking started from the time of Prophet. Four revelations of Al-Quran limitedally dealing with interest are milestone which later shaped the operational aspects of the Islami Banking system. There are numerous Hadiths relevant to banking which clearly prohibits Muslim from chooseing or paying(a) riba. The solo known organized financial institution originated during prophet was the Baitul Mal, which involved in state income, expenditure and development pop the question.Evidence indicates that the two sons of Chaliph Umar were given loans from Baitul Mal which they apply on their way back to Madina for trading and consequently earned profit. caliph declared it as Mudaraba and taken half profit for Baitul Mal against involved capital. 2. 5 Goals & Objectives of Islami Banking (a) Establishment of an Interest frees financial system. (b) Ensuring justice to both suppliers of fund and exploiter of fund. (c) Encouraging & patronizing enterprisership. (d) Creating employment. (e) Bridging up the gap surrounded by the surplus and famine of fund. (f) Development of a healthy capital and cash trade. g) Providing several(a) service and utilities to the public. (h) Development of standard of living. (i) Maintaining justice and equity at all take of transaction. (j) Swishing over to mas s banking from class banking. (k) Alleviating Poverty through Zakat & profit sharing micro-finance. 2. 6 Essential Features of an Islamic Bank a) Prohibition of Interest The traditional capitalist banking system depends of interest for providing loans and pays interest for taking loans. The spread in the midst of these two interests is the source of its profit. But according to Islamic sharia all types of interest is banned.So Islamic Bank does not carry on business of interest and it completely avoids the transaction of interest. b) Investment Based on hit After departing from interest, the alternative ways of income for Islamic Bank are enthronisation and profit. Thus Islamic Bank gives up some(prenominal) transaction of interest and makes investitures based on profit. Bank distributes its profit to its depositors and make outholders. c) Investing in proper Business Islamic Shariah has banned the business of haram goods. For example Islam not only forbids the drinking of alcohol but as fountainhead as banned whatever business of alcohol.Therefore Islamic Bank does not get every haram business and only do halal business. d) Halal Paths and Procedures Islamic Shariah in any case reject any haram path or process any case of a halal business. Therefore Islamic Banking system only allows the halal path procedures of Halal business. 2. 7 Distinguishing Features of Islamic Banking against Commercial Banking (a) Risk manduction No predetermined rate of collapse. Sharing end result of the business. Mudaraba prejudice is entirely borne by the Shahib-al-Maal. (b) violence on productivity not on credit worthiness Dominant consideration no on validatings. Emphasis on soundness of the puke. (c) Moral Dimension Islamic value point system. Full compliance of Shariah. No finance for wine/tobacco/ gambling casino/pork production or trading. (d) Equity Justice to all parties. Riba is unjust. (e) Allocative susceptibility Productive of the project. Finance goes to high productive project even if credit worthiness is lower. (f) St king of the Banking System Mudaraba & Musharaka Mechanism procures stability. (g) offset Promotes Innovation. Entrepreneurship Development. 2. 8 BRIEF rendering OF THE IBBL Bangladesh is one of the largest Muslim countries in the world.The people of this estate are deeply committed to Islamic way of life as enshrined in the Holy Quran and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and enthronement activities on the basis of interest-free profit-loss sharing system.In doing so, it has unveiled a new horizon and usher ed in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the disconnection countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh. 2. 9 MissionTo establish Islamic Banking through the introduction of a well-being oriented banking system and in like manner suss out equity and justice in the field of all economic activities, achieve balanced maturation and straight foregoing development through diversified coronation funds operations finically in the priority orbits and less development areas of the country. To encourage socio-economic enlistment and financial run to the lo w income community specially in the rural areas. 2. 10 Vision IBBLs vision is to ever strive to achieve superior financial performance, be considered a leading Islamic Bank by written report and performance. The banks goal is to establish and maintain the modern banking techniques, to ensure the soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professionals, works for the benefit of people, based upon discoverability, transparency and integrity in order to ensure the stability of financial systems. The bank bequeath try to encourage savings in the form of direct enthronement. The bank volition also try to encourage Investment particular(prenominal)ly in projects which are more plausibly to lead to higher employment. 2. 1 Aims and Objectives To conduct interest-free banking. To establish participatory banking or else of banking on debtor-creditor semblanceship. To in vest on profit and risk sharing basis. To accept deposits on Mudaraba & Al-Wadeah basis. To establish a welfare-oriented banking system. To extend co-operation to the poor, the helpless and the low-income group for their economic enlistment. To play a vital role in human development and employment generation. To head towards balanced growth and development of the country through investment operations particularly in the less developed areas. To contribute in achieving the ultimate goal of Islamic economic system. 2. 12 Functions of IBBL The IBBLs has fare of Functions, they are as follows 1. General banking ? Account Opening sectionalization ? M. S. B, M. S. S, Hajji Section ? P. O, T. D. R, D. D, T. T Section ? coin Section ? glade House Section ? Transaction Entry Section 2. Foreign Exchange Section ? Activities for importer ? Activities for exporter ? Collecting and sending foreign remittance 3. Investment Section ? Activities for importer ? Activities for exporter ? Col lecting and sending foreign remittance 2. 13 Organization anatomical structure of Islami Bank Bangladesh Limited pic pic CHAPTER-3 MODES OF INVESTMENT IN IBBL Introduction Investment insurance policy of IBBL Investment Strategy of IBBL Investment Modes of IBBL Mode judicious investment field acute abstract Special Investment Schemes of IBBL CHAPTER-3 MODES OF INVESTMENT IN IBBL 3. 1 Introduction Islamic Bank does not invest in loans and unyielding interest securities. It can invest in ordinary dower only opus interest based bank can invest in loans and different kinds of securities.Islami Bank establishes and participate projects with its knob as a spouse and bears the risk along with the knob on a attributeate basis. Besides, other conventional banks sometimes finance projects but do not bear risk. Finally, the concept of Islamic Bank is to establish on egalitarian bon ton based on principles of social justice and equity. Whereas traditional banks pay a heady interest on savings, time deposit and grant loans with interest for any purpose. We have gathered the fact that investment doment is the piece of music of IBBL. The bank takes deposits and invests the same based on the profit-loss sharing.Bank go for the investment in general which are long term and profitable in nature. IBBL also give high concentration on the investment that will generate more employment. As investment is one of the most priority areas for the IBBL, so it needs to cautious in investment decision. To ensure proper investment IBBL always go with in-depth study earlier make the investment. So in the beside phases we are going to demonstrate the way IBBL follow the misrepresent investment. 2 Investment policy of IBBL Investment policy of Islamic Bank and non Islamic bank are fully different.The investment policies of Islami bank Bangladesh limited are given follows To invest fund strictly in accordance with the principles of Islamic Shariah. To diversify its investment portfolio by size of investment, by fields (public & private), by economic purpose, by securities and by geographical area including industrial, commercial & clownish. To ensure vernacular benefit both for the Bank and the investment- leaf node by professional appraisal of investment proposals, judicious sanction of investment, close and constant supervision and monitor thereof. To make investment keeping the socio-economic requirement of the country in view. To increase the number of potential investors by making participatory and productive investment. To finance various development schemes for poverty alleviation, income and employment generation with a view to accelerating sustainable socio-economic growth and upliftment of the society. To invest in the form of goods and commodities rather than give out cash money to the investment clients. To encourage social upliftment enterprises. To shun even highly profitable investment in fields forbidden to a lower p lace Islamic Shariah and are mischievous for the society. The Bank extends investments under the principles of Bai-Murabaha, Bai-Muazzal, adopt procure under Shirkatul Meelk and Musharaka. The Bank is making sincere efforts to go for investment under Mudaraba principle in near future. 3. 3Investment Strategy of IBBL Most of the cases investment strategy of Islamic Bank and interest-based bank are contradictory. The investment strategies of Islami Bank Bangladesh limited are given below ? To check exodus of investment clients. ? To induct new investment clients. ? To induct good investment clients of other Banks. To enhance existing limits of good investment clients. ? Extension of investment point heavens. ? Extension of investment to backward as well as forward linkage industries. ? Extension of investment to real Estate field. ? Extension of investment to Jute sector particularly for trading and export purpose. ? Strengthening supervision, control and monitoring mechanism. ? Training and motivation of manpower to handle change magnitude and diverse quite a little of investment s. ? To give due consideration to high risk, high return and low risk, low return investment proposals. Adaptation of modern applied science 3. 4 Investment Modes of IBBL IBBL invests its money in various sectors of the economy through different modes permitted by shariah and approved by the Bangladesh Band. The modes of investment are as follows pic A. Bai-Mechanism (Trading mode) Bai-Murabaha Bai- murabaha whitethorn be defined as a cartel bridge between a purchaser and a trafficker under which the sells reliable specific goods ( permissible under Islamic shariah and the law of nature of the land) to the purchaser at a represent plus concord profit payable in cash or on any indomitable future data in lump inwardness or by installments.The marked up profit whitethorn be fixed in lump sum or in percentage of the cost price of the goods. Important features ( It is permissible for the client to offer an order to bargain for by the bank particular goods deciding its stipulation and committing him to buy same from the bank on murabaha, i. e. cost plus agreed upon profit. ( It is permissible to make the promise binding upon the client to get from the bank, that is, he is to revenge the promise or to pay off the indemnification caused by breaking the promise without excuse. It is also permissible to take cash / collateral security to guarantee the implementation of the promise or indemnify the damages. ( Stock availability of goods is a basic learn for signing a Bai-murabaha symmetricness. Therefore, the bank essential purchase the goods as per specification of the client to presume ownership of the same before signing the Bai-Murabaha bargain with the node. ( After purchase of goods the Bank must bear the risk of goods until those are actually change and delivered to the Client, i. e. after purchase of the goods by the Bank and befo re selling of those on Bai-Murabaha to the Client buyer, the bank bear the consequences of any damages or defects, unless there is an agreement with the Client releasing the bank of the defects, that means, if the goods are damaged, bank is liable, if the goods are defective, (a defect that is not included in the release) the Bank bears the responsibility. ( The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract. ( The bank shall the goods at a higher price (Cost + profit) to earn profit.The cost of goods sold and profit markup therewith shall separately and clearly be mentioned in the Bai-Murabaha agreement. The profit Mark-up whitethorn be mentioned in lump sum or in percentage of the purchase/cost price of the goods. But, under no circumstance, the percentage of the profit shall have any relation with time or expressed in relation with time, such(prenominal) as per month, per annum etc. ( The price once fixed a s per agreement and deferred cannot be further increased. ( It is permissible for the bank to authorize any third party to buy and receive the goods on Bank behalf.The potential must be in a separated contract. Bai-Muajjal Bai-Muajjal may be defined as a contract between a buyer and vender under which the seller sells certain specific goods permissible under Islamic Shariah and law of the country to the buyer at an agreed fixed price payable at a certain fixed future date in lump sum or deep down a fixed period by him as per order and specification of the buyer. Important feature I. Bank is not bound to declare cost of goods and profit mark-up separately to the client. II. Spot delivery of the item and payment is deferred. III.The bank transfers ownership and possession of the goods to the client before receipt of sale price. IV. Client may offer an order to purchase by the bank any specified goods and committing himself to buy the same from the Bank on Bai-Muajjal mode. V. It i s permissible to make the promise binding upon the client to purchase from the bank. That is, he is either to satisfy the promise or to indemnify damage caused by breaking the promised. VI. Cash /Collateral Security should be obtained to guarantee the implementation of the promise or to indemnify the damages. VII.Mortgage / Guarantee /Cash Security may be obtained before / at the time of signing the agreement. VIII. Stock and availability of goods is a pre- condition for Bai- Muajjal agreement. The responsibility of the bank is to purchase the desired goods at the disposal of the client to acquire ownership of the same before singing the Bai-Muajjal agreement with the client. IX. The Bank after purchase of good must bear the risk of goods until those are actually delivered to the client. X. The Bank must deliver the specified goods to client on the specified date and at specified place of delivery as per contract.XI. The Bank may sell the goods at one agreed price, which will includ e both the cost price and the profit. XII. The price once fixed as per agreement and deferred cannot be further in increased. Bai-Salam Bai-Salam may be defined as a contract between a buyer and a seller under which the seller in jump on in the certain commodity/products permissible under Islamic Shariah and the law of the land to the Buyer at an agreed price payable on execution of the shelp contract and the commodity products to the buyer at a future time in exchange of an advance price fully paid on the spot.Importance Features Bai-salam is mode of investment allowed by Islamic Shariah in which commodity/product can be sold without having the said commodity (ies)/product(s) either in existence or physical/ formative possession of the seller. If the commodity /product are ready for sale, Bai-Salam is not allowed in Shariah. Then sale may be done either in Bai-Muajjal mode of investment. Generally, Industrial and coarse products are purchased /sold in advance under Bai-Salam mode of investment to infuse finance so that product is not hindered due to shortage of fund/cash.I. It is permissible to obtain collateral security from the seller client to secure the investment from any hazards vis non- add on of supply of commodity (ies)/product, supply of low quality commodity (ies)/ product(s) etc. II. It is also permissible to obtain mortgage and /or personal guarantee from a third party as security before the signing of the agreement or at the time of signing the agreement. III. Bai-salam on a particular commodity (ies)/product(s) or on a product of a particular field or farm cannot be affected. IV.The seller (manufacture) client may be made agent of the bank to sell the goods delivered to the bank by him provided a separated agency agreement is excuted between the bank and the client (agent). B. allot mechanism Mudaraba It is a from partnership where one party provides the funds while the other provides the expertise, labor and necessary business activities. T he first party is called the Sahib-al Mall and the letter referred to at the Mudarib. Any profits accrued are shared between the two parties on a pre- agreed basis, while capital loss in exclusively born by the partner providing the capital.Important features i. Bank supplies capital as Sahib-Al-Mall and the client invest if in the business with his experience. ii. Administration and management is maintained by the client, iii. Profit is divided as per agreement. iv. Bank bears the actual loss alone, v. Client can not take another investment for that specific business without the permission of the Bank. Musharakah The term Shirkat and Musharaka have been derived from Arabic words Shairkah and Sharika The word shirkah means a partnership between more than one partner.Thus the word Musharaka and Shirkat means a partnership completed between two or more partners for purpose of a commercial venture participated both in the capital and management where the profit may be shared between t he partners as per agreed upon ratio and the loss. If any incurred, is to be borne by the partners at per capital/equity ratio. In this case of Investment, Musharaka meaning a partnership between the Bank and the Client for a particular business in which both the Bank and the Client provide capital at an agreed upon ratio and manage the business jointly.Share the rent as per agreed upon ratio and bear the loss, if any in proportion to their respective equity. Bank may move itself with the selected Client for conducting any Shariah permissible business under Musharaka mode. Important features Bank and client both supply capital Unequally/equally Profit is divided as per agreement and actual loss is divided as per equity. Client will maintain all accounts right on bank or its agent may verify or audit it. Banks can advice the client in such a business in respect of the business. Investment client will normally run and manage the business. The Bank shall take part in the policy a nd decision making as well as overseeing (supervision and monitoring) the operations of the business of the Client. The Bank may appoint suitable personal(s) to run the manage the business and to maintain books of accounts of the business property. As the investment client shall manage the enterprise, the Bank may pay more share of profit to him than that of his proportionate capital contribution. Loss, if any, shall be shared on the basis of capital ratio. C.Hire secure under Shirkatul Melk Hire Purchase under Shirkatul Melk is a Special type of contract that has been developed through practice. Actually, it is a synthesis of three contacts i. Shirkat ii. Ijarah and iii. deal These may be defined as follows i) Shirkatul Melk Shirkat means partnership. Shirkatul Melk means share in ownership. When two or more persons supply equity, purchase an asset, own the same jointly, and share the benefit as per agreement and bear the loss in proportion to their respective equity, the contra ct is calledShirkatul Melk contract. ii) IjarahThe term Ijarah has been derived from the Arabic words (Air) and (Ujrat) which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of service f an asset. Ijarah has been defined as a contract between two parties, the Hiree and Hirer where the Hirer enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Hiree. It is a have agreement under which the Hiree to a Hirer against fixed rent or rentals hires out a certain asset for a specified period. iii) SaleThis is a sale contract between a buyer and a seller under which the ownership of certain goods or asset is transferred by seller to the buyer against agreed upon price paid / to be paid by the buyer. Thus, in Hire purchase under Shirkatul Melk mode both the Bank and the Client supply equity in equal or unequalized proportion for purchase of an asset like land, bui lding, and machinery, transport etc. Purchase the asset with that quit money, own the same jointly, share the benefit as per agreement and bear the loss in proportion their respective equity.The share, part of portion of the asset owned by the bank is hired out to the client partner for a fixed rent per unit of time for a fixed period. Lastly the bank sells and transfers the ownership of its share/part/portion to the client against payment of price fixed for the either bit by bit part by part or in lump sum within the hire period or after expire of the hire agreement. 3. 5 Mode wise investment 3. 5. 1 Mode wise investment performance The mode wise investment performance of IBBL overall and the selected area is outlined below (Fig. are in million) Modes 2005 2006 2007 2008 2009 2010 Bai-Murabaha 23522. 92 31138. 88 41731. 48 51822. 28 59465. 08 73833 HPSM 14131. 48 18065. 10 23344. 46 30046. 89 39399. 18 50201 Bai-Muajjal 4965. 76 5512. 13 5735. 29 5917. 18 6921. 37 6546 Purcha se and Nego. 1865. 26 1801. 33 2416. 64 3179. 81 4846. 62 11040 Quard-E-Hasana 1298. 19 1765. 65 1694. 32 1966. 13 1974. 20 1955 Bai-Salam 407. 08 610. 27 807. 14 641. 44 905. 61 1153 Mudaraba 52. 00 103. 00 102. 00 50. 00 50. 00 50 Musharaka 37. 2 12. 13 27. 13 20. 42 12. 95 143 Total 46279. 71 59008. 49 75858. 46 94644. 15 113575. 01 144921 3. 5. 2 Percentage of the mode wise investment for the years (In Tk %) Modes 2005 2006 2007 2008 2009 2010 pixilated Bai-Murabaha 50. 83 52. 77 55. 01 55. 34 52. 5 50. 95 52. 875 HPSM 30. 53 30. 62 30. 78 32. 09 34. 69 34. 64 32. 225 Bai-Muajjal 10. 73 9. 34 7. 56 6. 32 6. 09 4. 52 7. 4267 Purchase & Nego. 4. 03 3. 05 3. 19 3. 40 4. 27 7. 62 4. 26 Quard-E-Hasana 2. 81 2. 99 2. 23 2. 10 1. 74 1. 5 2. 2033 Bai-Salam . 88 1. 04 1. 06 0. 68 0. 80 0. 79 0. 875 Mudaraba . 11 . 17 . 13 0. 05 0. 04 0. 03 0. 0883 Musharaka . 08 . 02 . 04 0. 02 0. 01 . 10 0. 045 3. 5. 3 Division wise investment of IBBL for the years ( descend in Tk) Divi sion 2009 2010 Dhaka 72637666426 91473695824 Chittagong 19020120156 25609818224 Khulna 8336566722 12605186181 Rajshahi 10129510794 11572609603 Barishal 990277259 1077373472 Sylhet 2460929772 2581926291 Total 113575071129 144920609595 3. 5. 4 Mode wise investment performance of Mirpur Branch (In Lac Tk) Modes 2007 2008 2009 2010 2008 (up to july 31 ) Bai-Murabaha 2551 3432 4521 5072 4815 HPSM 4821 5906 6627 6531 6155 Bai-Muajjal 243 720 857 807 797 QTDR 259 139 197 211 303 Musharaka 46 00 7 7 00 Baisalam 00 78 136 133 100 Others 94 175 337 483 499 Total 8014 10450 12682 13244 12669 3. 5. 5 Percentage of the mode wise investment of mirpur branch for the years (In Tk %) Modes 2007 2008 2009 2010 2008(up to july 31 )Mean Bai-Murabaha 31. 83 32. 84 35. 65 38. 30 38. 00 38. 54 HPSM 60. 16 56. 52 52. 26 49. 31 48. 58 58. 22 Bai-Muajjal 3. 3 6. 89 6. 76 6. 09 6. 29 6. 34 QTDR 3. 23 1. 33 1. 55 1. 59 2. 39 2. 20 Musharaka 0. 57 0. 00 0. 06 0. 05 0. 00 0. 15 Baisalam 0. 00 0. 75 1. 07 1. 00 0. 79 0. 79 Others 1. 17 1. 67 2. 66 3. 65 3. 94 2. 86 3. 5. empyrean-wise investment performance of IBBL (Amount in million Tk) form Comml Industrial agriculture Real State Transport other Total 2005 17534. 07 19692. 68 2350 3581. 72 1851. 32 1270. 30 46280. 61 2006 20467. 76 24480. 21 2235. 29 5204. 18 2475. 11 4144. 94 59007. 49 2007 26877. 02 35593. 03 3537. 17 5785. 11 2472. 46 1593. 77 75858. 56 2008 29284. 21 46063. 51 6445. 67 6813. 0 2975. 12 2061. 94 93644. 15 2009 28983. 80 62642. 10 5890 8357. 80 2722. 40 4978. 97 113575. 07 2010 43877 78788 6485 8588 2656 4527 144921 3. 5. 7 empyrean-wise investment performance of Pallabi Branch Amount in Lac TK Year Comml Industrial Agriculture Real State Transport Other 2007 2667 1002 000 3404 398 543 2008 3520 1790 000 4189 393 567 2009 5385 2582 000 3570 376 769 2010 5132 2591 000 4324 401 796 2008(up to july 4867 2362 000 4196 337 907 31) Mean 4706. 4 2253. 14 0. 00 4294. 47 415. 64 781. 53 3. 6 Sector wise outline i) Analysis of investment under Commercial Sector graphical representation of investment under Commercial Sector is as follows Branch 2007 2008 2009 2010 2008 Mean Mirpur 2667 3520 5385 5132 4867 4269. 6 From table and supra graph we rise that, the average investment in commercial sector is satisfactory. In 2006, 2007 fall investment under commercial sector was too much favorable. It is so much good for the company. So overall the commercial investment of the bank is satisfactory. ii) Analysis of investment under Real Estate SectorGraphical representation of investment under Real Estate Sector is as follows Branch 2007 2008 2009 2010 2008 Mean Mirpur 3404 4189 3570 4324 4196 4294. 47 / From table and above graph we feel that, the average investment under Real Estate Sector is Satisfactory.. It is so much good for the bank. So overall the Real Estate investment of the bank is satisfactory. iii) Analysis of investment under Transport Sec tor Investment under Transport Sector is as follows Branch 2007 2008 2009 2010 2008 Mean Pallabi 398 393 376 401 337 415. 64 From table we capture that, the average investment in transport sector is not satisfactory. It has declined in upstart years. Where the tutelage is necessary by the bank. iv) Analysis of investment under Industrial Sector Investment under the Sector is as follows Industrial Branch 2007 2008 2009 2010 2008 Mean Pallabi 1002 1790 2582 2591 2362 2253. 16 From table we find that, the average investment in agricultural sector is increasing. In recent years the investment situation under this sector is satisfactory. v) Analysis of investment under Others Sector Investment under Others Sector is as follows Branch 2007 2008 2009 2010 2008 Mean Pallabi 543 567 769 796 907 781. 53 From table we find that, the average investment in others sector is the most satisfactory. The trend was then going to the upward since 2007. vi) ontogenesis rate of total investment of Islami Bank Pallabi Branch (Amount in 000TK ) Branch 2007 2008 2009 2010 2008(Upto July 31) Pallabi 851900 1149725 1431864 1532342 1461006 Growth rate of Total credit shows the collateral or prohibit tendency of people to collect their fund from the respective institutions. The higher the growth rate of total credits the take up for the organization and its profitability. From the table mentioned above it is found that, the highest growth rate of total credit shows in 2008. It is so good for the organization. vii) Profit and Investment of several year of Pallabi Branch Year 2007 2008 2009 2010 2008(upto july) Total Investment 851900 1149725 1431864 1532342 1461006 Investment Income 68058 89288 139411 156624 89834 Profit on IBG A/C 62187 74987 124616 161790 88554 Net Invst Income 130245 164275 264027 318414 178388 viii) Profit and Investment Ratio Total Profit received on Investment Profit and investment ratio = * 100Total amount of investment Figures in 000 Tk Branch 2 007 2008 2009 2010 2008 Mean Pallabi 15. 29 14. 29 18. 44 20. 78 9. 99 17. 19 Here in the above two graph we see that the profit and investment ratio of the IBBL is in average position. ix) dissemination of Investment by Sectors (Public & closed-door) (M= Million Taka) Year IF Public Sector Private Sector Total % Amount % Amount 2008 71912 5 3596 95 68317 71912 2009 86295 5 4315 95 81980 86295 2010 103554 5 5178 95 98376 103554 That investment distribution in private and public sector both are more effective for any country. But the Islami bank distributes the upper limit investment in private sector because it earned comparatively more profit from private sector. x) Distribution of Investments by Areas (Rural & Urban) (Amount in Taka) Year Rural Urban Total % Amount % Amount 2009 8. 68 9862235033 91. 32 103712836096 113575071129 2010 7. 86 11386885036 92. 14 133533724559 144920609595 From the above table it is found that Islami bank invested the maximum money in ur ban area. Because maximum entrepreneur and business man stay in urban place. However maximum organization established in urban area. i) Distribution of Investments by Areas (Rural & Urban) of Pallabi Branch Total investment of Pallabi branch is in Urban areas. There is no rural investment. xii) Distribution of Investments by sector(private & public) of Pallabi Branch Total investment of Pallabi branch is in private sector there is no public sector investment. xiii) Distribution of country wise Investments of IBBL Year Within Bangladesh Foreign country Total % Amount % Amount 2009 100 113575071129 0. 0 0000 113575071129 2010 100 144920609595 0. 00 0000 144920609595 3. 7 1. 2. 3. 1. 2. 3. 4. 1. 2. 3. 4. 1. 2. 3. 4. 1. SPECIAL INVESTMENT SCHEMES OF IBBL CHAPTER-4 SWOT Analysis Strength Weakness Opportunities Threats 4. 1. 2. 1. CHAPTER-4 SWOT Analysis 4. 1 SWOT Analysis of IBBL SWOT Analysis is used to evaluate the Strengths, Weaknesses, Opportunities, and Threats in a busine ss. It is a methodology used to aid strategic planning that gained popularity during the 80s. It involves specifying the objective of the business or project and identifying the internal and external factors. 4. 2 StrengthAfter analyzing the present grocery condition, IBBL got the following strengths, which will be favorable to us to launch our business. in force(p) and reliable employees All of the employees of IBBL are honest and reliable. They are always given themselves to the works for wagerer services. Better Quality of Services The IBBL will run profitable business by providing first-rate banking services in a caring, upscale, professional environment. More funds for investment For adequate financial ability they can provide loan to more investment clients. Appropriate organisational Structure IBBL has the appropriate organizational structure. Organizational structure will be developed by the local and foreign expertise. 4. 3 WeaknessThe weaknesses of IBBL are as follows. Inaduquate Human Resource IBBL does not have an adequate human resource management so that it has to encounter about their employees as well as recruitment. It does not develop HR department yet. So that it cannot properly train up to its employee and motivate its employees to give them reward. The ignorance of time value of money According to Islami Shariah the interest should be prohibited. In another word Islami economy does not take the time value of money into consideration. So IBBL does not consider time value of money though our country does not follow Islami economy. Slow velocity of investmentThe velocity of investment of IBBL is very slow compared to other banks. It takes in excess of time while investing in a project. 4. 4 Opportunities Looking at current marketing environment, the following opportunities of IBBL are being visible. More Market Share As Islami banking is a growing type of business in Bangladesh, IBBL has a capital opportunity to capture a large amount o f market share. many Islami banks are turning their faces towards conventional banking to capture market share, but IBBL will not compromise with its quality. It will maintain strictly Islami Shariah and will provide the best service to its clients to capture market share. More Market GrowthIBBL has the better HR than any other banks in Bangladesh. Their strategy making and implementing will ensuring to achieve a large amount of market growth. 4. 5 Threats The following factors may occur as unfavorable phenomena for IBBL. Threat of New Entrants New entrants to an industry impose several banes to existing competitors. New competitors can reduce the market share of all participants by dividing the pie into more pieces. They also may bring new technology or greater resources not available to present competitors and achieve a high market share position quickly to the detriment of all existing participants. So if any new entrants will be big threat for IBBL. Preference revolutionClient s preferences can be the most acute threat to any company. It can change any times. If the consumers think that they should prefer any other services rather that for the ultimate comfort, it could be the worst insecurity to IBBL. Political Unrest Now-a-days political unrest becomes common phenomenon in a nation as well as the whole world. World is place of intense political unrest. So, political unrest can be harmful for IBBL. Financial Risk Financial risk is the part of every business. Banks can increase the interest rate insurance company can occupy more premium or competitor can offer services in lower price. Economic Change Changes in economic draw can be harmful for the IBBL.Personal income, savings, employment, and price level trends can have dramatic effects on the attractiveness of a firms products or services in output markets not only final markets, but liaise markets as well. CHAPTER-5 FINDINGS AND RECOMMENDATIONS Analysis of finding problem Recommendations Conclus ion Bibliography CHAPTER-5 FINDINGS AND RECOMMENDATIONS 5. 1 Analysis of finding problem I have identified some problems and limitations in Islami Bank Bangladesh Limited while operative in Mirpur-10 branch. For these problems IBBL cannot provide best services to its nodes as well as customers are not acquiring ultimate service from IBBL. These problems are given follows ) Major Investment of IBBL is on commercial and Industrial sectors. ii) Minimum amount of investment is on agricultural sector. iii) IBBL always invest welfare oriented sectors. iv) Large portion of investment is invested by mode of Baimorabaha that is 53. 26%. v) Maximum amount of investment is in Dhaka division. vi) Total investment of IBBL is increasing gradually. vii) No Islami money market is available. Easily money transaction is not possible without the Interest based banking system. viii) No Islami money market is available. Easily money transaction is not possible for the Interest based banking system. i x) IBBL cannot syndicate the other conventional banks. ) want of proper supervision. xi) Lack of stable economic condition. xii) Lack of skilled manpower. xiii) hapless legal framework. xiv) Unfavorable business environment. xv) Lack of opportunities for profitable investment. xvi) Political unrest. xvii) client service is not so much well. xviii) There is no fit and high bandwidth Internet connection available in the bank. So, bank cannot ensure better service for all Customers outward city. xix) Some few desks use obstacle instruments and take a huge time to accomplish a particular task. xx) It lacks workforce in general banking section. Employees are not that much motivated to work due to excessive workloads. xi) People still humiliate IBBLs products to conventional banks. For example, people frequently call Mudaraba Special Savings (Pension) Scheme or MSS as DPS like conventional banks. xxii) In a beginning and ending day of the week, the flow of customer is so high so at ti me handling of the customer is so difficult and that show the lack of professional image. xxiii) The decoration system of the bank is not a planned way and the floor, furniture, other materials are not cleaned in a right way and every time so the working condition is not comfortable. xxiv) Sunday and Thursday is very gathering in account crack, cheque issue, cheque received and pay order. xv) Some purpose they provide cash loan to the clients, for example Hire Purchase under Shirkatul Melk Real Estate 5. 2 Recommendations Islami Bank Bangladesh Limited has achieved outstanding victor during last twenty six years, but competition is being increased simultaneously. Lots of banks are being opened and many banks are opening Islami banking division. To survive as number one position IBBL has to do dissever of things. Some of these are suggested below 1. IBBL should increase investment in agricultural sector because Bangladesh is an agricultural country. 2. IBBL should increase their i nvestment in public sector because their maximum investment is in private sector. 3.Bangladesh is rural base country, So IBBL should increase their investment in rural area. 4. Operational cost should be minimized. 5. IBBL should try to improve the deposit investment ratio for higher productivity. 6. To decentralize the decision-making authority of the bank. 7. Modern method should be introduced for increasing management information system and accounting information system. 8. IBBL is allowed to determine the rate of profit on deposits and advance. 9. The productivity of the bank may be raised by better funds management and portfolio management improving recycling of funds and developing other income from the business activities of the bank. 10. Purpose oriented training program. 11.Encouraging development of positive and cooperative relationship between management and trade union. 12. Better industrial relationships participatory decision-making etc, is needed to improve the high p roductivity for the bank. 13. They should improve their customer service. 14. The branch should introduce fully computerized system as soon as possible to reduce time, labor and cost. 15. A large office home should immediately be allocated for this branch. 16. To operate General Banking operations smoothly, some people should immediately be appointed. 17. A prime location should be selected and midland designer should be hired in decorating office. 18. Number of office assistants should be increased. 19.Employees should be smooth behave with customer basically in account opening and convince them. Some other suggestions may be in brief ? Awareness programs can be arranged for the clients to have a clear view of IBBL products. ? Authorized employees should be monitored to be available at their located divisions ? Branches need to be 100% automated ? Online service should be every where ? Client selection should be cautious ? Overdue should be regularly monitored and minimized ? The information should be available about the investment products and their costs of fund ? Bank documents should be easy and clear to the clients 5. 3 Conclusion Once upon a time, most of the people didnt represent interest-free banking system.They never thought that it is possible to provide banking facilities without interest but in passage of time, now it is clear that in Islam there as a banking procedure though profit / less sharing basis. In course of time problems have reduced but not delaminated. This bank is exhausting to operate their activities according to Islami Shariah. If the Govt. becomes conscious to solve these problems and the banker become cordial and cooperative, the problems may be reduced to a greater extent The Gradual and productive globalization of Islami Banking coupled with growing awareness of the people about its financial and social benefits makes it clear that the next degree centigrade is going to be the century of Islami Banking. It would be very difficult for them to survive as a number one position, if their service qualities remain constant.Big clients are switching to other bank for this reason bank is losing huge market share. They should pay more oversight to big clients. It is also true that maintain Shariah and pay special attention to particular person is very difficult. Innovative product should be launched by Islami bank Bangladesh limited such as credit card, investment in education sector to cope with present situation. This project will help IBBL to get advantage over others. Special training should be given to employees to develop their behavior. 5. 4 Bibliography CHAIRMAN depravity CHAIRMAN DIRECTORS EXECUTIVE prexy DEPUTY EXECUTIVE PRESIDENT EXECUTIVE VICE PRESIDENTSENIOR VICE PRESIDENTS VICE PRESIDENTS ASSISTANT VICE PRESIDENT Second military officer (Senior Principal Officer) Investment Department (Principal Officer) Foreign Exchange (Principal Officer) General Department (Principal Officer) Senior O fficer helper Officer (GradeII) Assistant Officer (GradeI) Officer Senior Officer Officer Officer Probationary Officer Assistant Officer (GradeII) Assistant Officer (GradeI) Assistant Officer (GradeII) Assistant Officer (GradeI) Manager a) Bai-Murabaha b) Bai-Muajjal c) Bai-Salam d) Istishnaa a) Mudaraba b) Musharaka a) Hire Purchase b) Hire Purchase Under shirkatul Melk Bai- Mechanism Share Mechanism Ijara Mechanism