Chapter 2

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL
HAPTER
introduction
WHAT IS INTERNSHIP?
Internship is a field project for a student of Business Administration of final year that gives the student a chance to apply business theory practically in any organizational environment. The objectives of internship are: 1. Practical fulfillment of MBA program. 2. Application of theoretical knowledge into practice. 3. Gaining work experiences. 4. Having an exposure for searching a good job in future. 5. Knowing/understanding gap between theoretical knowledge and practical situation. Parts of Internship Report: There are two parts of internship report. They are: Part A: Organization Part. Part-B: Project Part.
Prepared By Md Elias Alam
Background of the Report

The report comprises of the organizational overview, operation of Banking in the different section such as General Banking, Investment, Foreign Trade/Exchange and Briefly analysis the performance of the Branch. Finally the report has been concluded with some recommendations. During my two months study, Ive tried my best to get knowledge about their overall banking operation with special emphasis on their performance. The Banking Industry in Bangladesh is characterized by strict regulations and monitoring from the central governing body, the Bangladesh Bank. The main concern is that currently there are many banks for the market to sustain. As a result, the market will only accommodate those banks that can transpire the most competitive and profitable in the future. Currently the major financial institutions under the banking system include: 1. 2. 3. 4. 5. Bangladesh Bank Private Commercial Banks State Owned commercials Bank Islamic banks Non-bank financial Institutions, etc.
Of these, there are four state owned commercial banks (NCB), 5 specialized banks, 11 foreign banks, and 26 domestic private banks, 4 Islamic banks currently operating in Bangladesh.
Scheduled Banks in Bangladesh
FCB 20% NCB 8% PCB 54% Islamic 8% Specialized 10%
FCB NCB Islamic Specialized PCB
FIGURE: 1 Generally, the commercial banks and finance companies provide a myriad of banking products/services to cater to the needs of their customers. However, the Bangladesh banking industry is characterized by the tight banking rules and regulations set by the Bangladesh Bank, All banks and financial institutions are highly governed and controlled under the Banking Companies Act-1993.
The range of banking products and financial services is also limited in scope; all local banks must maintain a 4% Cash Reserve Requirement (CRR), which is non-interest bearing and a 16% Secondary Liquidity Requirement (SLR). With the liberalization of markets, competition among the banking products and financial services seems to be growing more intense each day. In addition, the banking products offered in Bangladesh are fairly homogeneous in nature due to the tight regulations imposed by the central bank. Competing through differentiation is increasingly difficult and other banks quickly imitate any innovative banking service.
Objective of the Study

The main objective of the study is to have knowledge about the investment management in the First Security Islami Bank Ltd. In order to study the credit management I have decided to study about the following facts: 1. To know about the Islamic banking system of First Security Islami Bank Limited. 2. To know about the different schemes, policies, procedures of FSIBL. 3. To know about investment policy of the Islamic banking systems. 4. To about the credit policies and limitations of FSIBL. 5. To know about the monitoring and recovery system in islami banking. 6. To observe the overall environmental situation of the Bank.
Scope of the Study
Scope means the area on which the study has to be done. The study is only related in First Security Islami Bank Limited, chawkbazar Branch, Chittagong. This report focuses on the Overview of the First Security Islami Bank Limited and mainly related with Lending Policy and recovery system.
Limitation of the Study

I have faced several problems during the preparation of this repot. Some of the limitations of this report are mentioned below: a. Credit management is a big subject: Credit management is a big subject to cover wholly in this limited space. It required huge time and huge space to cover. So, I have covered only some important topics of credit management and furnished only the gist here. b. Engaged in work: Every man of the branch was so busy in their work, so they were not able to provide sufficient time to make me clear about different topics. c. Time constraint: I had to prepare this report within a period less than three months which was not enough to prepare such a report. Because collection and arrangement of information is a time consuming job. Then again I had to summarize those. So I had to work in haste. d. Confidential matter: It is not possible to get all sorts of information due to official confidentiality. e. Lack of practical knowledge: For the lack of practical knowledge, some short comings may be available in the report. Because in some cases I could not practically involved because of banks policy limitations and operational bindings. The problems mentioned above are some of the major problems; I have faced during the preparation of this report. In spite of that, I have tried my level best to make the report as informative as possible.
HAPTER
Methodology of the Study
Definition of Concepts & Assumption:

The term Loan and Advance is used as the Investment in the Islami Banking system. Investment is the action of deploying funds with the intention and expectation that they will earn a positive return for the owner. Although, the term Loan & Advance and Investment are same, they are differently used in Conventional banking system and Islami Banking system. Because, there is no provision of charging interest in the Islami Banking system. They charge a provisional rate on the investment and charge the profit on the basis of weighted of the previous years profit. And also the Islami Bank is operated on the basis of Mudaraba basis. Mudaraba means trusteeship. The relationship between bank and client is trustee. The client deposits his money to the bank with the permission of using the money in a way which is legal and according to the Shariah law. As there is no provision of charging interest on the loan, the Islamic Banking helps to invest the clients money in various sectors and give profit on the basis of agreement. Prepared By Md Elias Alam 6
Methodology of the study

The methodology of the study can be discussed under the major heads: Organization and development of the report: The report is organized and developed under a mixture of both descriptive and analytical framework. Data Source: The data sources used to prepare this report delineated as follows:
1. Primary Source:
a) Practical deskwork. b) Face to face conversation with the officers and executives. c) Face to face conversation with the clients. 2. Secondary Source: a) Annual report of First Security Islami Bank Limited. b) Prospectus of First Security Islami Bank Limited. c) Banks financial statement. d) Banks quarterly statement. e) Banks daily affairs. f) Broachers etc.
C
ABOUT
HAPTER
THE
FIRST SECURITY ISLAMI BANK LIMITED
Definition of Bank:
We can define A bank as an institution, usually incorporated with power to issue its promissory notes intended to circulate as money (known as bank notes); or to receive the money of others on general deposit, to form a joint fund that shall be used by the institution, for its own benefit, for one or more of the purposes of making temporary loans and discounts; of dealing in notes, foreign and domestic bills of exchange, coin, bullion, credits, and the remission of money; or with both these powers, and with the privileges, in addition to these basic powers, of receiving special deposits and making collections for the holders of negotiable paper, if the institution sees fit to engage in such business." Generally there are two main way of operating commercial bank. They are conventional banking and Islamic banking system.
Islamic Banking:
The Islamic banking has been defined in a number of ways. The definition that is given approved by Organization of Islamic Conference is most popular. According to The OIC, The Islamic bank is a financial institution whose status, rules, and procedures expressly state its commitment to the principle of Islamic Shariah and to the banning of receipt and payment of interest on any of its operations. It appears from the definition that Islamic banking is a system of financial intermediation that avoids receipt and payment of interest in its transactions and conducts its operation ina way that it helps achieve the objectives of an Islamic economy. And also it is operated on the basis of Mudaraba theory. According to Mudaraba theory, the relationship between bank and clients is not debtors-creditors, it is a relationship of trusteeship.
10
The difference between Conventional and Islamic Banking are shown
in terms of a box diagram as shown below:

Conventional Banks 1 The functions and operating modes of conventional banks are based on manmade principles. The investor is assured of a predetermined rate of interest. It aims at maximizing profit without any restriction. It does not deal with Zakat. 1 Islamic Banks The functions and operating modes of Islamic banks are based on the principles of Islamic Shariah. In contrast, it promotes risk sharing between provider of capital and the user of funds. It also aims at maximizing profit but subject to Shariah restrictions. In the modern Islamic banking systems, it has become one of the serviceoriented functions of the Islamic banks to collect an distribute Zakat. Participation in partnership business is the fundamental function of the Islamic banks. The Islamic banks have no provision to charge any extra money from the defaulters. For the Islamic banks, it is comparatively difficult to borrow money from the money market. The Islamic banks, on the other hand, give greater emphasis on the viability of the projects. Strictly speaking and Islamic bank cannot do it. The status of Islamic bank in relation to its clients is that of partners, investors and trader. In Islami Banking system, there is no recycling of interest. There is markup/rebate system. 11
2 3 4
2 3 4
6 7
Leading money and getting it back with interest is the fundamental function of the conventional banks. It can charge additional money in case of defaulters. For interest-based commercial banks, borrowing from the money market is relatively easier. The conventional banks give greater emphasis on creditworthiness of the clients. A conventional bank has to guarantee its deposits. The status of a conventional bank, in relation to its clients, is that of creditor and debtors. The conventional Banking system has the recycling system. They charge interest on interest.
6 7
9 1 0 1 1
9 1 0 1 1
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL 1 2 In case of loan or credit, loss is not bored by the investors. 1 2 In case of investment, the loss is bored by the capital supplier.
History of the First Security Islami Bank

First Security Islami Bank Limited (FSIBL) was incorporated in Bangladesh on 29 August 1999 as a banking company under Companies Act 1994 to carry on banking business. It obtained permission from Bangladesh Bank on 22 September 1999 to commence its business. The Bank went for public issue on 20 July 2008 and its shares are listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).The Bank carries banking activities through its Ninety two (92) branches in the country. The Bank converted its banking operation into Islamic Banking based on Islamic Shariah from traditional banking operation on 01 January 2009 after obtaining approval from High Court, Finance Ministry and Bangladesh Bank. The commercial banking activities of the bank encompass a wide range of services including mobilizing deposits, providing investment facilities, discounting bills, conducting money transfer and foreign exchange transactions, and performing other related services such as safe keeping, collections and issuing guarantees, acceptances and letter of credit. The Bank and its first branch at the busiest commercial hub of the country at 23, Dilkusha Commercial Area, Dhaka. Branch Networks and Inter Division and Branch Coordination All the 92 branches are computerized branches are under distributed to open server within
environment.
Another few
planning
December 2010. FSIBL has already started their on-line, SMS and ATM banking facilities for their clients. The Banking license for the Bank was issued by Bangladesh Bank on August 29, 1999 was opened on October 25, 1999 by Mr. M. Saifur Rahman, Ex-Honorable Finance Minister, Government of the Peoples Republic of Bangladesh as the chief guest. The Authorized Cap ital of the Prepared By Md Elias Alam 12
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL Bank is Tk. 4,600,000,000 Its paid up Capital and reserve reached at present Tk. 2,300,000,000 The sponsors of the Bank are the leading business personalities and eminent industrialists of the country having stakes in various segments of the national economy.
Vision
To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver excellence in banking.
Mission
1. 2. 3. 4. 5. 6. 7. 8. To contribute the socio- economical development of the country. Fast and accurate customer service. Balanced growth strategy. High standard business ethics. Steady return on shareholders equity. Innovative banking at a competitive price. Attract and retain quality human resource. Firm commitment to the society and the growth of national economy.
First Security Islami Bank Now at Present

Having started its operations as a commercial bank in 1999, First Security Islami Bank is today a synonym of quality banking products. It has a diverse array of carefully tailored products and services to cater the needs of all customer segments. They have structured their operational strategies to address the special and often complex needs of the customers. In the growth graph, it has generated profit of Tk. Prepared By Md Elias Alam 13
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL 326,837,749 in the year 2012. The curve keeps soaring upward with dawn of everyday. Today First Security Islami Bank is one of the leading and one of the most successful banking institutions in Bangladesh with a total asset base of Tk. 47,978,552,952 as on 31.12.2009. First Security Islami Bank has now emerged as a major player in the financial sector. Listed in both the Dhaka and Chittagong stock exchange since late 2008 with an IPO that raised the paid-up capital of the bank to Tk. 230,000,000 the current price levels of its shares and turnover in trading is evidence of its high rating among investors. Banks are the pillars of the financial system. Specially, in Bangladesh, the health of the banking system is very vital because the capital market is little developed here. As the banks are still the major sources of credit and exercise great influence on the financial system, it is extremely important that the countrys banking system should be in good health in the interest of investment activities, meeting the needs of all kinds of finance and related matters. Over the years, First Security Islami Bank Ltd. has built itself as one of the pillars of Bangladeshs financial sector and is playing a pivotal role in extending the role of the private sector of the economy. The bank has a strong branch network nationwide with 61 branches to effectively address the needs of its cross- segment customer base.
Corporate Information Name of the Company First Security Islami Bank Limited
A scheduled commercial bank incorporated Legal Form on august 29,1999 as a public limited company under the companies act 1994 and bank companies act 1991. Commencement of Business Registered Office Website 25th October 1999 10, Dilkusha Commercial Area Dhaka-1000.
www.fsiblbd.com
Prepared By Md Elias Alam 14

SWIFT Chairman Managing Director No. of Branches No. of SME Centers No. of Employees Stock Summary: Authorized Capital Paid up Capital Face Value per Share FSEBBDDH
Mr. Saiful Alam (Masud) Mr. A. A. M. Zakaria

92 05 929
Tk. 4,600,000,000 Tk. 2,300,000,000

Tk. 100
Position of the Bank:

According to Bangladesh Bank CAMELS rating FIRSTY SECURITY Islami Bank Limited is a A class bank, which the only second one as Bangladeshi bank. (Source: Exclusive Economic Weekly, INDUSTRY, Sunday 29 March,
2009)
Board of Directors
Alhaj Md. Saiful Alam Chairman Alhaj Akkas Uddin Mollah
Chairman
Alhaj Late Hamidul Haq Director Alhaj Md Farooq
Alhaj Syed Nurul Arefeen
Vice Chairman
Vice Chairman
Farzana Parveen
Rahima Khatun
MS. Shamshad Jahan
Director
Director
Director
Atiqun Nesa
Md. Sharif Hossain
Alhaj A.K.M Ali Johar
Director
Director
Director
Alhaj Md. Wahidul Alam Seth
Shahidul Islam
Director
Director
Mohammed Oheidul Alam Director
Dr. Muhammad Loqman Director
Mr. Muhammad Ali Managing Director Managing Director
A.A.M Zakaria
15
Shariah Council
Shariah Council of the Bank is playing a vital role in guiding and supervising the implementation and compliance of Islamic Shariah principles in all activities of the Bank since its very inception. The Council, which enjoys a high status in the structure of the Bank, consists of prominent Ulema, reputed banker, renowned lawyer and eminent economist. Members of the Shariah Council meet frequently and deliberate on different issues confronting the Bank on Shariah matters. They also conduct Shariah inspection of branches regularly so as to ensure that the Shariah principles are implemented and complied with meticulously by the branches of the Bank.
Shariah Board
Vice Chairman M Mufti Sayeed Ahmed

M
Chairman
Mr.Sheika ( Mowlana)Mohammad Qutubuddin
Member Secretary
Moulana M. Shamaun Ali.
Member
Moulana Abdus Shaheed Naseem
Member
Mohammad Azharul Islam
Member
Md. Abdul Maleq
Member Prof. Md. Sharif Hussain P
Member
Alhaj Md. Saiful Alam
Chairman, First Security Islami Bank Limited
16
Division of First Security Islami Bank

All policy formulation and subsequent executions are done in the Head Office. It comprises nine major divisions. They are described below: 1. Credit & Administration Division 2. Treasury and International Division 3. Internal Control and Compliance Division 4. Human Resources & Logistics Division 5. Marketing Division 6. Merchant Banking Division 7. Share Division &Information Technology Division
Organizational structure of First Security Islami Bank Ltd:

Managing Director Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President First Vice President Senior Assistant Vice President Assistant Vice President First Assistant Vice President Senior Principal Officer Principal Officer Senior Officer Officer Probationary Officer Junior Officer Assistant Officer Trainee Assistant Officer
17
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL First Security Islami Bank Ltd is one of the fastest growing banks among all the private Commercial Banks in Bangladesh. The institution started its function back on 25th October, 1999. As a branch of First Security Islami Bank Ltd Jubilee Road Br. started its function on 9th August, 2001.
Management Hierarchy of FSIBL,

VP
AVP
Principal Officer
Senior Officer
Officer
Junior Officer
Assistant Officer
Trainee Assistant Officer
Different Departments involved in FSIBL,

There are various departments engaged in providing services to the clients in the FSIBL, Jubilee Road Branch. These are: 1) Customer Care Department. 2) Cash Department. 3) Accounts Department. 4) Investment Department. 5) Foreign Department. 6) IT Department. 1. Customer Care Department: Customer care department is one of the most important departments in the Bank. The responsibility of this department is to provide necessary information to the clients, to help opening the accounts, to receive all the documents that are task of dispatching, issuing local remittance etc.
2. Cash Department:
18
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL It is another important department for the Bank. To receive money and to give money according to the claim of the client with the proper signature of the authorities. It is one of the most risky departments of the bank, because all the cash transactions are happened in this department. The vault of the bank is under this department.
3. Accounts Section: Accounts department is the most important department in the FSIBL as it supplies all numerical data and information of the bank. Credit Section, Current deposit, Staff payments, Total assets and Liabilities various income and expenditure are shown in the statement in the statement prepared by the accounts department.
4. Investment Department:
Bank offers loans to the businessman, industrialist and other in consideration of its interest. But, according to the Shariah Law, interest taking is not allowed. So, in Islami Bank like First Security Islami Bank Limited, they called it investment. The Islami Banks invest the capital on behalf of clients and against this charge profit on the investment. There are various modes of investment like Murabaha, Musharaka, Bai-Muajjal, Bai-Salam etc.
Statements prepared by Accounts section: 1. Sector wise balance position 2. Maturity balance sheet 3. Foreign currency statement 4. Branch Trail Balance 5. Liquidity position 6. Income expenses statement.
Products and Services

Prepared By Md Elias Alam 19
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL FSIBL carries out all traditional functions, which a commercial bank performs. Such as, mobilization deposit, disbursement of investment, investment of funds, financing of export and import business and trade and commerce and so on. Product and services offered by FSIBL can be visualized from the diagram in the following:
Products and Services of FIRST SECURTY ISLAMI BANK LTD.
1. General Products
a. Mudaraba Saving Account (MSD) b. Al-Wadiah Current Account c. Mudaraba Short Term Deposit (MSTD)
2. Deposit Scheme
a. Mudaraba Term Deposit Scheme (MTD) b. Mudaraba Double Benefit Scheme (MDBS) c. Mudaraba Monthly Income Scheme (MMIS) d. Mudaraba Monthly Saving Scheme (MMSS) 3. Investment Scheme a. b. c. d. e. Bai-Muajjal. Murabaha Wes Bills. Hire Purchase. Quard against TDR. Bills Purchase & Discount : a) In-Land. b) Foreign
f. Loan against trust receipt g. Consumer credit schemes. h. Staff loan.
4. Services a. b. c. d. Western Union Money Transfer First Solution & other money transfer Locker Services
Remittance- T.T., D.D., P.O, etc
20
HAPTER
Foreign remittance
21
CLEARING DEPARTMENT
Before going to discuss about the functions of clearing department of FSBIL, let us know what Clearing-House is actually. Clearing-House: A bankers clearinghouse system, reciprocal claims of one bank against others are offset & only the net balance of drawing on the account of the debtor bank maintained with the Central bank. On Bangladesh, the bank organized the clearinghouse where it has an officer. Types of clearing Outward clearing:
When a particular branch receives instrument drawn on the other bank within the clearing zone and send those instruments for collection through the clearing arrangement is considered as Outward Clearing for that particular branch. This branch is known as collecting branch. Inward Clearing:
When a particular branch receives instruments, which are on themselves and sent by other member bank for collection is treated as inward 4.4
Local Remittance
Demand draft or telegraphic transfer. These methods of remitting money from one place to another are known as remittance. To facilitate the need of customers, commercial banks transfer funds from one place to another through By other way, we can say that Transfer of funds from one place to another place without physical transfer of money. Remittance may be a) Within the country. Prepared By Md Elias Alam 22
Remittance:
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL b) Outside the country. Remittance has following advantage a) Convenience. b) Speed. c) Minimum cost.
Functions of Remittance section:

The functions of Remittance section Handling of all incoming and outgoing foreign and local remittance is the major function for this department. Handling of incoming and outgoing T.T. Outstation cheque collection. Demand draft handling. Other miscellaneous work of the department.
Instruments of Remittance:
The most widely used instruments of inland remittance are: Telegraphic Transfer (T.T). Demand Draft (D.D). Pay Order (P.O). Security Deposit Receipt (S.D.R).
Telegraphic Transfer (T.T)

A telegraphic transfer is a method of remittance, which is effected by the banker through a coded telegram attested by secret cheque signal, on receipt of which, the paying office pay the amount to the payee by crediting his account. Prepared By Md Elias Alam 23
Issuance:
The applicant fills up the relevant parts of the prescribed application form in triplicate, duly signed the same and gives it to the GB.
GB will fill up the commission part for the banks use and request the applicant to deposit necessary cash or cheque at the cash booth. The first copy of the application form will be treated, as debit ticket while the second copy will be treated as credit ticket. The third copy will be handed over to the applicant as customers copy. GB will prepare telex in appropriate form, sign it and send it to the telex operator for transmission of the message. GB will prepare necessary advice. Debit advice is send to the clients if clients account is debited for the amount of T.T. T.T. confirmation advice is send to the drawee branch. Credit ticket is used to credit the SJIBL general account.
.Demand Draft (D.D)

A demand draft (D.D) is an unconditional order of the bankers one branch to another to pay to the same person or order the amount mentioned there in on demand. A customer can purchase a Demand Draft (D.D) making amount payable to any one including him. Prepared By Md Elias Alam 24
Issuing formalities: 01. Filling of D.D application form. 02. Deposit to requisite funds with commission voucher to prepare: 03. Particulars of D.D: a) Name of the issuing branch. b) Date of purchase. c) Name of the payee. d) Amount in figures and words. e) Drawee branch. f) Authorized signature of two officers. g) Test number (for above TK. 25000). 04. Make entry-particulars of D.D in D.D issuing register. 05. D.D advice to the drawee branch should dispatch on the issuing day. 06. Delivery of D.D signature of the applicant to be obtained on the back page of counter foil of D.D. 07. Telegram/Telephone to the drawee branch, if the amount above TK. 1 lac.
D.D Cancellation:
01. An application from the D.D application requesting cancellation of D.D. 02. Obtain the original D.D that issued. 03. Verify the signature of the applicant. 04. Realize cancellation charges. 05. Send the cancellation advice to the drawee branch.
25
Pay Order (P.O)

A Pay Order (P.O) is a written under issued by a branch of bank, to pay a certain sum of money to a specific person or bank. It may be said as to be a bankers cheaque as it is issued by a bank and payable by itself. It is a negotiable instrument and cannot be endorsed or crossed like D.D. For issuing pay order SJIBL charges commission on the following rates: o For TK. 1 to 1,00,000 the commission is TK. 50. o For TK. 1,00,000 to 5,00,000 the commission is TK. 100. o For TK. 5,00,000 to above, the commission is TK. 150. 1. Fill up payment order application form. It includes the following things a) b) c) d) e) g) Name of the issuing bank. Date. Contact number. A/C payee seal. Payees name. Signature of two authorized official.
f)Amount in figure and word.
2. Realization of the required fund + commission.
Comparative analysis of the total amount of deposit Over the years 2005, 2006, 2007,2008,2009.
Deposit
Year 2005 2006 2007 In Taka (000) 460000 1016267 1243475 26
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL 2008 2009 1425642 1675246
Trend of Total Deposits Over the last 5 Years

2000000 1500000 1000000 500000 0 2005 2006 2007 2008 2009
Total Capital (taka in million)

Year 2006 2007 2008 2009 2010 2011 Total Capital 1147.28 1347.91 2862.19 3379.03 4582.21 5622.11
Total Capital 4,582.21 million

5000.00 4000.00 3000.00 2.000.00 1.0000.00 0.00 2006 2007 2008 2009 2010 Prepared By Md Elias Alam
35.60%
2011
27
Remittance (taka in million)

Year 2006 2007 2008 2009 2010 2011 Remittance 48.44 330 585.84 558.75 843.47 942.57
Remittance Tk. 843.47 million

900 800 700 600 500 400 300 200 100 0
60% 2007
558.75 558.844
843.47
330
48.44
2006
2007
2008
2009
2010
2011
Foreign remittance
Foreign remittance of the bank stood at taka 843.47 million as of December 31 2010 as against TK. 558.75 million in 2009. besides the bank has taken initiatives to make remittance arrangements with some leading exchange houses at abroad.
28
Paid up capital (taka in million)

Year 2006 2007 2008 2009 2010 2011 Total capital 900.00 1000.00 2300.00 2300.00 3036.00 4000.00
Paid up Capital Tk. 3,036 million

3000 2500 2000 1500 1000 500 0.00 2006 2007 2008 2009 2010 2011
32%
29
FIRST SECURITY ISLAMIC BANK BALANCE SHEET AS AT 31 DECEMBER 2010

particulars Note s 3 2010 4857543203 612173146 4245369057 1036199077 926081336 110117741 2859354561 2331134100 528220461 5212390316 4 47640238696 4483664468 573610332 2169188462 8 6361979779 9 5634495916 7 3354827146 5969978631 3 3920011486 6361979779 9 2009 5033532439 432907731 4600624708 731150321 494050218 237100103 1852026032 1610674000 241352032 38725874774 35616450493 3109424281 376477387 1259491999 47978552952
Property & assets
Cash In hand Balance with Bangladesh bank and its agent Balance with other bank & financial institution In Bangladesh Out Bangladesh Investment in shares & securities General investment Bills purchase & discounted Investment Government other Fixed assets including premises, furniture &fixtures Other assets Non banking assets Total assets LIABLITIES & CAPITAL Deposits and other accounts Other liabilities Total liabilities Capital/shareholder equity Total liabilities & shareholder equity
42423092722 2690049475 45113142197 2865410755 47978552952
30
First Security Islamic Bank ltd. Highlights For the year ended 31 December 2010 particulars
Paid-up-capital Total capital fund Capital surplus Total assets Total deposit Total investment Total contingent liabilities & commitment Investment deposit ratio Percentage classified investment Profit before tax & provision Amount of classified investment Provision kept against classified investment Provision surplus Cost of fund Profit earning assets Non Profit earning assets Return on investment Return on assets Income from investment Earning per share (tk.)
31.12.2010
3036000000 4582217485 29266485 63619797799 56344959167 52123909164 8859668340 92.51 2.61 1203600731 1361392000 542894000 13658789 8.90 56040956802 7578840997 9.24 1.89 264208027 2.33
31.12.2009
2300000000 3379035832 267692742 47978552952 42423092722 38725874774 5971673066 91.28 2.14 750837749 830515000 507694000 53834571 9.28 41371529125 6607023827 2.79 1.56 53510527 1.42
31
First Security Islamic Bank ltd. Statement of Fixed Assets As at 31 December 2010
COST Particulars 2009 Addition during The year Sales / Tran sfer durin g The year Balanc e as on 2010 DEPRECIATION Balanc e as on 2010 Jan. Charge during the year Adjustm ent Sales/ transfer 2010 Dec. Written down 2010 Dec.
Building Furniture & fixture Office equipment Vehicles Books Total 2010 Total 2009
66227032 24009004 7 17841003 0 37845372 78837 52265131 8 29737499 8
6395394 3 1080413 86 8088991 6 6631850 3442 2595205 37 2354108 20
13018 0975 34813 1433 25929 9946 44477 222 82279 78217 1855 52265 1318
37699 0 66587 335 65294 951 13843 196 71459 14617 3931 11300 6566
1646781 2323340 4 2991681 2 7586526 4069 6238759 2 4154482 6
8377461
2023 771 8982 0739 9521 1763 2142 9722 7552 8 2085 6152 3 1461 7393 1
128157204 258310694 164088183 23047500 6751 573610332 376477387
32
HAPTER
DIFFERENT SOURCE OF FOREIGN REMITTANCE
33
Remittance?
A remittance is a transfer of money by a foreign worker to his or her home country.Remittances are playing an increasingly large role in the economies of many countries, contributing to economic growth and to the livelihoods of less prosperous people (though generally not the poorest of the poor). According to World Bank estimates, remittances totaled US$414 billion in 2009, of which US$316 billion went to developing countries that involved 192 third of their GDP. million migrant workers. For some individual recipient countries, remittances can be as high as a As remittance receivers often have a higher propensity to own a bank account, remittances promote access to financial services for the sender and recipient, an essential aspect of leveraging remittances to promote economic development. The top recipients in terms of the share of remittances in GDP included many smaller economies such as Tajikistan (45%), Moldova (38%), and Honduras (25%).
FOREIGN REMITTANCE:
Foreign Remittance refers to the transfer of funds from one country to another, which may be within the country or between two countries through banking channel, post office or the informal channel. According to the Foreign Remittance Regulation Act, 1947Foreign Remittance means purchase and sale of freely convertible foreign currencies. Purchase of foreign currencies constitutes inward foreign remittance & sale of foreign currencies constitutes outward foreign currencies. Foreign remittance is very important for the country as valuable foreign remittance is involved in the transfer mechanism. From the year 1990, Prepared By Md Elias Alam 34
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL financial liberalization has been started which is still going on. Due to liberalization, restrictions on foreign remittance become ease. Bangladesh taka is convertible for current account transactions on March 24, 1994 with the view to achieve better exchange rate management system. And from April 1994 Bangladesh Government has accepted the status of Article V111 of international monetary fund. National Credit & Commerce Bank Ltd. Plays an important role in foreign remittance activities both inward & outward. In NBL main components of foreign remittance are T.T, M.T & Draft.
The Role of remittance

The increasing attention paid to the question of migrant remittances comes from the realization of the important role they play in poverty alleviation and, circumstances permitting, economic development more broadly. The former is most obvious in the way the dependent circumstances of individuals that are directly transformed; the latter operates via a collective response much on the existence of institutions can leverage remittances to create true development finance. Individual poverty alleviation Remittance payments directly alleviate the poverty of the individuals and households to whom they are sent. The ways in which remittances alleviate the poverty of individuals are, in the first round of effects, direct and fairly obvious. They include the following. Survivalist income supplementation. For many recipients, remittances provide food security, shelter, clothing and other basic needs.
35
Consumption smoothing Many recipients of remittances, especially in rural areas, have highly variable incomes. Remittances allow better matching of incomes and spending, the misalignment of which otherwise threatens survival and/or the taking on of debt. Education In many developing countries, education is expensive at all levels, whatever the formal commitments of the State. Remittances can allow for the payment of school fees and can provide the wherewithal for children to attend school rather than working for family survival. Housing The use of remittances for the construction, upgrading and repair of houses is prominent in many widely different circumstances. Health Remittances can be employed to access preventive and ameliorative health care. As with education, affordable health care is often unavailable in many remittance recipient countries. Social spending Day-to-day needs include various social
expenditures that are culturally unavoidable. Remittances can be employed to meet marriage expenses and religious obligations and, less happily but even more unavoidable, funeral and related costs.
36
Types Foreign Remittance:

One is inward & another is outward remittance. We can see it by the following figure:
REMITTANCE
a).Foreign Remittance 1. Foreign Outward 2. Foreign Inward b).Local Remittance 1. Demand Draft 2. Tele Transfer 3. Pay Order
Sources of Foreign Remittance :

The foreign remittance is divided into two types: 1) Inward Foreign Remittance 2) Outward Foreign Remittance
Sources of Inward Foreign Remittance :

Export proceeds Remittance by expatriate Bangladesh Commissions earned by local business people Foreign loans & grants, donation & gift
37
Sources of Outward Foreign Remittance:

Payment of import liabilities Payment of consular fees & commissions etc Foreign travel quota through travelers Cheque Educational expenses for students abroad All other payments sent abroad in foreign currency
Foreign Inward Remittance :

Foreign Inward Remittance refers to the currency/remittance in foreign currency that is received from abroad to our country. In case of Foreign Inward Remittance, TT, MT, Draft etc are drawn in local bank by the foreign banks of exchange houses. When a local bank purchases foreign bills, TCs & cash currency is also known as inward remittance. A local bank also receives indenting commission of local firm, trademarks, patent fee etc.
38
Inward Remittance can be classified into two groups:

I}.Visible Inward Remittance such as export proceeds. II}.Invisible Inward Remittance such as family maintenance, constancy fee etc.
Purpose of Inward Remittance:

Family maintenance Donation Indenting commission Gift Foreign investment Export proceeds Others
Foreign Outward Remittance:

Remittance that is made from our country to abroad is called Outward Remittance. This remittance includes issuance of TT, MT, FDD issued by local banks on foreign banks. Further it includes rate of foreign currency, notes, Tic`s, reimbursements against import, bills retired etc. Outward Remittance can be classified into two groups: I. II. Visible Outward Remittance such as payment against import. Invisible Outward Remittance such as membership fee,
subscription fee etc.
39
Purposes of Outward Remittance:

Traveling purpose. Educational purpose. Attending seminar & workshop. Medical treatment. Business travel quota. Evaluation fee. Membership fee. Pre-shipment fee. Advertising of Bangladeshi commodities.
In case of purchase of foreign currency, an applicant must be made to an authorized dealer & if necessary requires to Bangladesh Bank. The prescribed application from like IMP from & for other types of remittance TM form is needed for payment against import.
Modes of Foreign Remittance:

T.T (Telegraphic Transfer) M.T (Mail Transfer) D.D (Demand Draft) T.C (Travelers Cherub) P.O (Pay Order)
Besides this foreign Inward Remittance also includes remittances on account of export, purpose of bills, purpose of T.C Foreign currency notes & coins, cheque issued on foreign banks in favor of beneficiaries in Bangladesh etc.
40
4.2.The remittance process involves the following four modes:

Bank sells Dollar/Pound for using in abroad by the purchaser. The maximum amount of such sell is mentioned in the Bangladesh Bank publication of `Convertibility of Taka for Currency Transactions in Bangladesh Bank can purchase dollar from resident & non resident Bangladeshi & Foreigner. Most dollars Purchased comes from realization of Export Bill of Exchange. TC is useful to traveler abroad. Customers can Ancash the TC in abroad from the drawer bank. TC is alternative to holding cash & it provides better security than holding cash in hand. If any unused leaf of TC is surrendered bank buys it from the customer. All payments are made in local currency. Banks generally buy only those TC. It remits fund by tested TT via its foreign correspondence bank in which it is maintaining its NOSTRO Account. It also makes payment according to telegraphic message of its foreign correspondence bank from the corresponding VOSTRO Account.
Sell Cash Remittance Dollar/Pound
Purchase
Issue of TC Traveler`s Cheque (TC) Buying of TC
Outward TT Telex Transfer Incoming TT
Foreign Demand Draft
Bank issue Demand Draft in favor of purchaser or any other according to instruction of purchaser. The payee can collect it for the drawer bank in which the Issuing bank of Demand Draft holds its NOSTRO Account. Bank also makes payment on DD drawn on this bank by its foreign correspondence bank through the VOSTRO Account.
41
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL Various Modes of Foreign Remittance
Modes of Inward Remittance:

T.T
Cable or telex instructions of payment are called as Telegraphic Transfer, where a foreign bank issue a T.T in favor of some one in Bangladesh, it credits the amount, received form the remitter to the NOSTRO A/C of its correspondent bank. On receipt of the T.T the paying bank in Bangladesh will make payment of the proceeds of the T.T in foreign currency or in equivalent Bangladesh Taka to the beneficiary.
M.T
M.T is an instrument issued by a remitting bank to the paying bank advising in writing to make payment of certain amount to specific beneficiary.
D.D
A demand draft is a negotiable instrument issued by a bank drawn on other bank with the instruction to pay a certain amount to beneficiary on demand.
T.C
It is an instrument issued by the Banks/ Companys payable to the purchaser on presentation.
P.O
A pay order is a written under issued by a branch of bank, to pay am certain sum of money to a specific person or a bank. It may be said as to be a bankers cheque as it is issued by a bank & payable by itself. Prepared By Md Elias Alam 42
Modes of outward remittance:

TT
Local banks can draw telegraphic transfer to those banks with which they have accounting relationship & message should contain test & brief description of the beneficiary.
FDD
Any authorized dealer branches can issue foreign drafts draw on the bank with which they have an accounting relationship.
Foreign Currency, Notes

Authorized dealer branches are permitted to safe foreign currency notes as per ceiling fixed by Bangladesh Bank.
TC
Authorized dealer branches can sale Travelers cheques as per the ceiling fixed by Bangladesh Bank.
43
HAPTER
CONTRIBUTION OF FOREIGN REMITTANCe
44
Broader concerns: remittances and economic development

Remittance income does not benefit just individual recipients; it benefits the local and national economies in which they live. Indeed, the spending allowed by remittances has a multiplied effect on local economiesas funds subsequently spent create incomes for others 9 and stimulate economic activity generally. Beyond such multiplier effects, however, are other factors conducive to economic growth and stability. Remittances can provide receiving countries with much-needed foreign exchange.Adding to the appeal of remittance flows to local and national economies is the fact that their frequency and magnitude tend to be counter-cyclical. Economic distress in the home countryprecisely the scenario least conducive to other financial flows such as FDI inspires migrant workers to increase the volume of funds they remit.
The increasing attention paid to the question of
migrant
remittances comes from the realization of the important role they play in poverty alleviation and, circumstances permitting, economic development more broadly. The former is most obvious in the way the dependent circumstances of individuals that are directly transformed; the latter operates via a collective response much on the existence of institutions can leverage remittances to create true development finance.
45
Individual poverty alleviation

Remittance payments directly alleviate the poverty of the individuals and households to whom they are sent. The ways in which remittances alleviate the poverty of individuals are, in the first round of effects, direct and fairly obvious. They include the following. Survivalist income supple mentation. For many recipients, remittances provide food security, shelter, clothing and other basic needs. Consumption Remittances smoothing allow better Many recipients highly of remittances, incomes.
especially in rural
areas, have
variable
matching of incomes and spending,
the misalignment of which otherwise threatens survival and/or the taking on of debt. Education In many developing countries, education is expensive at all levels, whatever the formal commitments of the State. Remittances can allow for the payment of school fees and can provide the wherewithal for children to attend school rather than working for family survival. Housing The use of remittances for the construction, upgrading and repair of houses is prominent in many widely different circumstances. Health Remittances can be employed to access preventive and ameliorative health care. As with education, affordable health
46
care Social
is
often
unavailable
in
many
remittance recipient
countries. spending Day-to-day needs include various social expenditures that are culturally unavoidable. Remittances can be employed to meet marriage expenses and religious obligations and, less happily but even more unavoidable, funeral and related costs.
Influence in Foreign remittance in Bangladesh economy

Foreign remittance is very important for the country as valuable foreign remittance is involved in the transfer mechanism. From the year 1990, financial liberalization has been started which is still going on. Due to liberalization, restrictions on foreign remittance become ease. Bangladeshi taka is convertible for current account transactions on March 24, 1994 with the view to achieve better exchange rate management system. And form April 1994 Bangladesh Government has accepted the status of Article VIII of international monetary fund. One possibility is that given the government banks efforts to keep the exchange rate steady Bangladesh see the possibility of getting a higher return on taka deposits (13-15%) in Bangladesh, compared.
To dollar or other currency deposits abroad (1-2%) and they are sending their money for these higher returns. Of course, the risk is higher in Bangladesh and so it might be more Bangladeshi who are taking this risk than foreigners, but the possibility that something like this might be happening, and thus bringing in hot money which could leave the country if the underlying interest rate differentials changed or other factors changed. The risk adjusted returns, even after allowing for possibility of exchange restrictions or risk of nationalization might still be positive and Prepared By Md Elias Alam 47
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL significant. Another possibility. Since all foreign remittance that
Bangladesh gets is considered to be white money and there are no questions asked about source of funds, and there are no taxes on it as well, at least on entry, there might be people in Bangladesh who earn through non-documented sources evade taxes and then just whiten the money by taking it out through bangle and bringing it back as foreign currency. I. made Rs 10 million form my work in Bangladesh, but evaded paying taxes on it, which is not uncommon in Bangladesh but now need to whiten the money so that I can bring into legitimate and documented economy send the money, Through hundi, to UAE and then have it remitted back tome in dollars. I. do pay some transaction cost for it, but all of the money gets legitimacy and so the transaction cost is a small amount to pay for this whitening. Now the FBR cannot do anything about it either. If this happens the question really is about the size of such flows. How big are they and do they help us explain the growth in foreign remittance or a significant part of it? There is the further question of what impact this has on our GNP figures and so on, but that is of more academic interest and not related to the question at hand. Foreign remittance is, right now, saving us from major troubles. If our import bill starts increasing. Which can if oil prices go higher or remain high, or if our imports start picking up, then remittance flows become even more important to keep us in good stead? Given our budget. Deficits and debt stock, these flows are the main source of foreign capital for us. And remittance has been showing robust and sustained growth. But it is not clear where this growth is coming from. This is essential for us to understand if we are to figure out whether the increased flows are good for us or not and how to ensure that they continue if they are. And if they are not hypotheses but if there is any Truth to them, and that is an empirical question. This year we are expecting more than $10 billion in foreign remittance. A very large number of Bangladesh are currently working & living in countries that are not their home, and sending funds regularly back to Prepared By Md Elias Alam 48
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL their families in Bangladesh. Foreign remittance is making a huge Contribution towards macroeconomic stability, or any semblance of it, in Bangladesh currently. It is allowing us to keep foreign reserves looking ok & keeping Exchange rate steady. Right now our import bill, due to economic Slowdown, is also low & this, in addition to the remittance inflows, is giving the breathing space that we see on foreign account side. With large deficits, large debt stock, few international lenders willing to give us loans, existing IMF programmer held in abeyance, this breathing space is important. But there are interesting things to think about regarding remittance Flows as well. Remittance started increasing substantially only a few Years ago. Initially it was speculated that the significant increases in Remittance were the result of one time increases where Bangladesh were, After 9/11 & the crack down on Handy as well as harder living conditions outside of BANGLADESH, shifting back their wealth & savings to Bangladesh. This was specially the case as remittance increases even when the world Economy went into a recession. But if this was indeed the case increases in remittance should have stopped & things should have gone to pre increase days. But to the contrary, we continue to see healthy growth in remittances. This calls for some explanation and someone, State Bank research department or other macroeconomic researchers, should look into this. It is important to understand what sort of money is coming in as remittance & why because in some cases this might not be the kind of money.
BANGLADESH wants to attract too much of: if it is hot Money and is coming in for speculative reasons, for example, it could flow out as easily as well & this could get the economy in really hot waters. So we should be looking at who is sending the money, what is the source of the Bangladesh one can speculate & have hypotheses as to why this could be happening. It is not the case that the world economy has improved or there is a boom in the countries where Bangladesh live &/or a lot of new Prepared By Md Elias Alam 49
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL jobs have been created for Bangladeshis, so How do we make sense of healthy growth rates in remittances?
Remittance Boost in Bangladesh Economy:

The amount of money sent home has reached a new record high in Bangladesh the amount of money sent home by Bangladesh living abroad has reached a new record high, according to the Central Bank of Bangladesh. In August, the total sum of money sent home reached a
historic peak of $ 937m-up 30% from a year ago.

The boost to the Bangladesh economy comes despite the global recession Hitting overseas jobs. Remittances are the countrys second highest Revenue earner after exports. The are an estimated 6.5 million Bangladeshis living and working Abroad, mainly in the Middle East, South East Asia, Europe and the United States. Millions at home are dependent on money sent by their expatriate Relatives- money that has been credited for the decline in poverty in the country. This is the highest monthly remittance we have received in our History, said Ziaul Hasan Siddiqui, deputy governor of the central Bank. The figure also shows that the global recession had little impact on the flow of remittance to Bangladesh although job opportunities in the major markets have declined in recent months. Many other countries have reported a sharp decline in remittances during the economic downturn. But analysts say money Bangladesh are in low-end jobs and so the recession has not hit them as hard as it has affected blue collar workers. The increase in remittance could also be partly due to two upcoming religious. However, the upward trend may not continue for long, as overseas employment has fallen in past months due to declining demand. The flow of migrant workers returning home has also increased. The government Prepared By Md Elias Alam 50
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL of Bangladesh has identified seven new countries including Lebanon, Sudan, Romania and Greece to send workers to. The state will seek to open diplomatic missions in those countries, to look for job opportunities, Bangladesh received $ 1.823 billion during the July - August period of the previous fiscal, 2009-10, registering an 18.19 percent growth over the Remittances also help Bangladesh in making the balance of payments favorable, or make up the deficit between total export & import. For example, in 2008, Bangladesh exported $13.97 billion worth of goods & services & in turn imported $19.59 billion worth of goods & services. This gave a deficit of $5.62 billion in Bangladesh Balance of payment (BOP). Remittance has been a key driver of economic growth & poverty reduction in Bangladesh. The migrants send back billons of dollars & the country can then use these resources for investment for industrial development, improvement of educational facilities & services & extend & improve its health services. The money that is sent back is also beneficial to the families & to the country in that it helps reduce poverty & also allows for investment in small businesses & chances for furthering education. Make fund transfers abroad through an integrated Banking system. Allows for quick & efficient payments to ensure that the funds reach the Destination fast & safe. Foreign remittance can be defined as the purchase & sale of freely convertible foreign currencies as admissible under.
51
Bangladesh Scenario: Remittance and Foreign Exchange reserve

Foreign exchange reserve and remittance marked an important milestone in Bangladesh economy in last couple of years and in 2010-11 they sent 11.65 billion US dollar. In ten years, foreign currency reserve grew from $1 billion to cross the $10 billion mark this year for the first time. Both foreign exchange reserve and remittance were broadly immune to the global recession that has been lingering for around two years now. Surprised at the successes , experts also cautioned the government against any inflationary pressure that may be caused by the achievements in remittance and foreign exchange reserve. A few years ago, Bangladesh received remittance of $2 billion to $3 billion annually. The amount crossed $5 billion in fiscal 2006-07. The remittance inflow was $10.99 billion in the last fiscal year with a growth of 13.41 percent. In the year 2010 the main reasons behind the increase in foreign exchange reserve are a decline in import and the boost in remittance. Normally import increases every year but the trend is negative now. Bangladesh Bank Governor Dr Atiur Rahman told: "Banking sector is much active now. And so remittance increased. Many exchange houses and bank branches opened in different countries to send remittance. With the cooperation of NGOs, the system of remittance delivery to the recipients has improved. Now we Think of introducing payment through mobile phones." (Source: The Daily Star) If we analyze the date we find in the last 10 year on an average 35% of Import payment could be meet up with inward remittances.
52
SWOT ANALYSIS
By the SWOT Analysis and other above discussions, observation some findings has come forward, those are given below: 1. The bank is mostly dependent on deposit scheme. 2. Import department of FSBL (jubilee Road Br.) is performing better than the export department. It is said on the basis of efficiency but on the basis of number of L/C against export L/C. 3. Discrepancies are occurring much in Import department than Export Department. 4. No initiative package for promoting export dept. where as different credit facilities are available for import dept. 5. The bank is not emphasizing in Foreign Exchange where as other competitors are aggressively looking for this sector. 6. The bank has no ATM facility. 7. There has no any marketing department 8. In spite of not good reputation this bank is less interested in doing their advertisement of branch products, packages and other facilities where as other competitors are using hard advertisement strategies.
53
HAPTER
Recommendation & Conclusion
54
Recommendations
The existing credit policy is good enough to run the bank. But as the competition is increasing day by day the bank should take some measures so that they can distinguish it from the others. The credit management of First Security Islami Bank Ltd. can follow the following suggestion to improve their performance and distinguish from others: 1. Giving authority to the Branch officials to take decisions to sanction a loan. Right now, for every loan decision is made by Head office. But to faster the speed of loan sanction the branch should be authorized to take decision. 2. Rebate charge on loan should be increased so that more customers are attracted to make loan. 3. The period of loan should be extended. 4. The bank management can give permission to its branches to design or change lending products on the basis of local demand. 5. The bank should recruit some young and energetic executives to ensure timely recovery of disbursed consumer credit loan. 6. The clients of loan should be facilitated with online Banks and other benefits. 7. FSIBL should upgrade its website regularly and provide details information of loan Scheme. 8. FSIBL Bank may also promote its loan program through different advertising tools i.e. TV adds, News paper adds etc.
55
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL 9. The Bank management can reduce the interest rate. Because of high interest rate, some good loans turn to bad loans. But if the interest rate decreases than the default loan will also decrease. 10. To risk grade the credit, the bank can follow other models besides the credit risk grading model. Because the credit risk grading model is not hundred percent up to the mark. 11. The bank management should always be concerned about the change in industry so that they can notice the change and take proper actions to adopt the situation. The credit management of Southeast Bank Ltd. can follow the abovementioned suggestion to improve their performance so that they can be competitive in the market and can gain some competitive advantage.
Conclusion
Banking has become the inspirable part of social transaction. From the very early age it had taken in our society in the non-institutional form. After the Second World War as a financial product lending had been fully structured and institutionalized in USA and other developed countries. Now banking sector play an important role in modern society and private commercial bank has competitive, diversified and dynamic compared to traditional banking system. In banking sector FSBL is a name of trust, to improve the life style of the people, to develop the business environment. Day by day its area of serving is increased all over the country through setting up new branch at new place. FSBL take a vital part in export and import business of Bangladesh through their regulatory services and best quality services. The economy of any country depends with the import and export position of the country. By observing the banking system in FSBL chawkbazar Branch for one month it is clear to me without bank involvement that kind of work cannot be possible. FSBL is providing opportunity of gaining practical knowledge for the students like internship program. During the period of my internship Prepared By Md Elias Alam 56
Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL program I tried my best to understand the concern. However it is also concern that this period of time was not enough to understand everything of the concern. If any one wants to work in banking sector he must have to know about all the department in a bank because one department works related with another department works. I wanted to know about the credit section of the bank because banks main earnings depend with that section. But I cant because of the limited period. Even though I tried my best level to make the informative, this report contain many errors, there may be some printing mistakes no doubt for this reason I apologize.
Bibliography:
1. Annual Report of First Security Islami Bank Limited. 2. Prospectus of First Security Islami Bank Limited. 3. Web Site Of First Security Islami Bank Limited: www.fsiblbd.com. 4. Amader Barta- A quarterly news bulletin, First Security Islami Bank Limited. 5. Industry- A Weekly supplement- Special Supplement on CAMELS Rating. 6. Various Web Sites related to Islami Banking Systems. 7. Islamic Financial System-By Md. Nusrat e Aziz- First Edition, September, 2006 8. Previous Internship Reports. 9. UCPDC-600, 2007 Revision.
57

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Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Background of the Report

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Scheduled Banks in Bangladesh

FCB 20% NCB 8% PCB 54% Islamic 8% Specialized 10%

FCB NCB Islamic Specialized PCB

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Objective of the Study

Scope of the Study

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Limitation of the Study

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Methodology of the Study

Definition of Concepts & Assumption:

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Methodology of the study

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

FIRST SECURITY ISLAMI BANK LIMITED

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

The difference between Conventional and Islamic Banking are shown

in terms of a box diagram as shown below:

Prepared By Md Elias Alam

History of the First Security Islami Bank

First Security Islami Bank Now at Present

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Mr. Saiful Alam (Masud) Mr. A. A. M. Zakaria

Tk. 4,600,000,000 Tk. 2,300,000,000

Position of the Bank:

Alhaj Late Hamidul Haq Director Alhaj Md Farooq

Alhaj Syed Nurul Arefeen

MS. Shamshad Jahan

Md. Sharif Hossain

Alhaj A.K.M Ali Johar

Alhaj Md. Wahidul Alam Seth

Mohammed Oheidul Alam Director

Dr. Muhammad Loqman Director

Mr. Muhammad Ali Managing Director Managing Director

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Vice Chairman M Mufti Sayeed Ahmed

Mr.Sheika ( Mowlana)Mohammad Qutubuddin

Member Prof. Md. Sharif Hussain P

Chairman, First Security Islami Bank Limited

Prepared By Md Elias Alam

Monitoring the flow 0f foreign remittance On Bangladesh the role of FSIBL

Division of First Security Islami Bank

Organizational structure of First Security Islami Bank Ltd:

Prepared By Md Elias Alam

Management Hierarchy of FSIBL,

Trainee Assistant Officer

Different Departments involved in FSIBL,