Overview of Islamic Finance in Bangladesh

Background The saga of Islamic banking and finance of this country is to some extent different from those of others. The intellectual exercise to materialize the dream of Islamic banking and finance in this delta was going on for four decades starting from 1940s. In this period, a group of prominent visionary scholars of the subcontinent, with their own initiative & purely faith-driven obligation, performed voluminous works on Islamic economics and finance, side by side, endeavored a lot to draw an operational frame work of Islamic banking in particular. The basic theoretical works, so far required, was done in this very period and operational exercise thereof was being emphatically waited. The aura of this long cherished hope was sighted first when Bangladesh signed the charter of Islamic Development Bank in August, 1974 & expressed commitment to restructure its financial system as per Islamic Shariah. In 1978 Bangladesh subscribed the recommendation of Islamic Foreign Ministers Conference held in Senegal regarding gradual establishment of Islamic banks in the member countries. Meanwhile, two professional bodies- Islamic Economics Research Bureau (IERB) established in 1976 and Bangladesh Islamic Bankers Association (BIBA) established in 1980 made significant contributions towards introduction of Islamic banking in the country. They initiated a holistic approach in providing basic training on Islamic banking to the top bankers and economists to help overcome the probable leadership vacuum of the future Islamic banks in Bangladesh. A lot of seminars, symposia and workshops on Islamic economics & banking were arranged throughout the country to make the mindset & create awareness among the masses. This development got further momentum in 1981, when the then President of Bangladesh while addressing the 3rd Islamic Summit Conference held in Mecca & Taif suggested The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce. In the subsequent year, a delegation of IDB paid a visit to Bangladesh and expressed their keen interest in establishing a joint venture Islamic Bank in Bangladesh. Finally the epoch making event arrived; the long cherished aspiration turned into a reality and Islami Bank Bangladesh Limited, the first ever Islamic bank in South-East Asia was founded on 13 th March, 1983 in association of the following eminent national and international bodies as well as distinguished personalities:

List of the Sponsors of Islami Bank Bangladesh Limited

Table-1
Sl.No. 01. 02. 03. 04. 05. 06. Name of Sponsor Kuwait Finance House (K.S.C) Safat, Kuwait Jordan Islamic Bank Islamic Investment & Exchange Corporation, Doha, Qatar Bahrain Islamic Bank Islamic Banking System International Holding S.A; Luxembourg Al-Rajhi Company for Currency Exchange & Commerce, Riyadh, K.S.A. Sl. No. 07. 08. 09. 10. 11. 12. Name of Sponsor Dubai Islamic bank The Public Institution for Social Security, Safat, Kuwait Ministry of Awqaf and Islamic Affairs, Kuwait Islamic Development Bank Ministry of justice, Development of Minor Affairs, Kuwait Mohammad Absur Razzaque Lasker (Late), Bangladesh

List of the Sponsors of Islami Bank Bangladesh

Table-1 (Continued)

Sl.No.
13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

Name of Sponsor
Sheikh Ahmed Saleh Jamjoom Jeddah, K.S.A. Sheikh Fouad Abdul Hameed Al-Khateed (Late) Mofizur Rahman (Late) Bangladesh Barrister Tamizul Haque Bangladesh Mohammad Younus (Late) Bangladesh Mohammad Shafiuddin Dewan (Late) Bangladesh Mohammad Bashiruddin Bangladesh Mohammad Hussain (Late) Bangladesh Nasiruddin Ahmed (Late) Bangladesh Muhammad Musharraf Hossain Bangladesh Md. Malek Minar (Late) Bangladesh Zakiuddin Ahmed Bangladesh

Sl.No.
25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36.

Name of Sponsor
M.A. Rashid Chowdhuty Bangladesh Engr. Mustafa Anwar Bangladesh Prof. Mohammad Abdullah Bangladesh Serajuddowla Bangladesh Ibn Sina Trust Bangladesh Bangladesh Islamic Centre Bangladesh Islamic Economics Research Bureau Mohammad Nuruzzaman (Late) Bangladesh Abul Quasem Bangladesh A.K. Fazlul Haque Bangladesh Engr. Muhammad Dawood Khan Bangladesh Baitush Sharaf Foundatuib Ltd. Bangladesh

Impact of IBBL in Banking Sector The establishment of Islamic Bank Bangladesh Limited is a milestone and a turning point in ushering the new era of Islamic finance & banking that paved the way to set up more Islamic banks in Bangladesh. Under this backdrop, the entrepreneurs became immensely encouraged to see the overwhelming success of Islami Bank Bangladesh Limited and came forward to invest their fund in the new industry of Shariah based Islamic banking and till now the following 6 full fledged Islamic banks (other than IBBL) have come into existence: 1. 2. 3. 4. 5. 6. Al Baraka Bank Limited (now reorganized as The Oriental Bank Limited), established in 1987. Al Arafah Islami Bank Limited, established in 1995. Social Islami Bank Limited, established in 1995. Shahjalal Islami Bank Limited, established in 2001. Exim Bank Limited was originally a conventional bank. It converted its entire banking operations into an Islamic one since July 2004. The First Security Bank Limited also was a conventional bank. It converted its entire operations into an Islamic one since 1st January, 2009.

Key Statistics of 7 (Seven) Islamic Banks as at end- 2Q 2010

Table-2
Sl. No. 01. 02. 03. 04. 05. 06. 07. Name of the Bank Islami Bank Bangladesh Limited ICB Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Social Islami Bank Ltd EXIM Bank Limited First Security IslamicBank Shahjalal Islami Bank Paid up Capital No. of
Branch

Amount in Million Taka

(US $ 1= Taka 70)

Total Man Power

Deposit

Market Share in Deposit

Investment

Market Share in Investme nt

Fr. Exchange Business

Market Share in Fr. Ex. Business

6,178 6,647 1,799 2,692 3,374 2,300 2,740 25,730

247 31 60 43 53 47 52 533

10,057 720 1,350 1,183 1,440 1,115 1,547 17,249

265,193 14,407 50,482 41,000 82,189 48,511 53,243 555,025

7.68% 0.42% 1.46% 1.19% 2.38% 1.40% 1.54% 16.07%

273,008 14,310 46,230 30,174 81,191 47,643 51,650 544,206

9.66% 0.51% 1.64% 1.07% 2.87% 1.69% 1.83% 19.27%

105,066 458 40,000 28,850 89,799 10,290 46,972 321,435

4.12% .02% 1.57% 1.13% 3.53% 0.40% 1.84% 12.62%

Total

Islamic Banking Window In the banking sector, the above banks are performing well and their steady development has lured different conventional banks to open Islamic banking window. Till now, total 13 conventional banks have opened around 30 Islamic banking windows which are currently operating with praiseworthy performance. The remaining Private Commercial Banks (PCB) as well as State owned Commercial Banks have been actively contemplating to open Islamic banking windows & of them have already finalized their decision to this effect

Statistics of Islamic Banking Windows of 13 (Thirteen) Conventional Banks as at end- 2009

Amount in Million Taka

Sl. No
01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13.

Name of the Banks

Arab Bangladesh Bank Limited Prime Bank Limited. Jamuna Bank Limited Dhaka Bank Limited South-East Bank Limited Premier Bank Limited The City Bank Limited Standard Bank Limited Standard Chartered Bank Limited (Sadiq) HSBC (AManah) Trust Bank Limited Bank Asia Limited Pubali Bank Limited Total

Table-3 No. of Branches Total Deposit

1 5 2 2 5 2 1 2 1 1 5 2 1 30 3,080 12,680 2,334 4,359 10,308 3,356 900 20 802 118 37,957

(US $ 1= Taka 70)

Total Investment
1,760 8,984 2,076 2,255 4,842 1,266 650 1,374 110 23,317

Profit/Loss
192 640 158 100 236 23 45 191 73 1,658

Measures and incentives Bangladesh Bank i.e. the Central Bank of Bangladesh does not offer any special incentive to Islamic banks but playing an impartial role in dealing with conventional and Islamic Banks as well as the Islamic windows of conventional banks. The Central Bank, however, formulated comprehensive guidelines for Islamic banks to help regulate their day to day operations. The Islamic banks operating in the country are as usual required to comply with the international standards in respect of risk and capital adequacy as set by Basel. They are also expected to adhere to the rules and guidelines as set by the AAOIFI and the IFSB with regard to the accounting treatment of Islamic financial transactions. Major Player Islami Bank Bangladesh Limited since its establishment has been playing a leading role among the Shariah based Islamic banks functioning in Bangladesh. As shown in Table-2 the share of Islami Bank Bangladesh Limited alone, in terms of deposit and investment, is almost equal to that of aggregated amount of the remaining 6 Islamic banks. The following Tables will depict the position vividly how steady and phenomenal progress Islmai Bank Bangladesh Limited is making in different sectors:

YEAR WISE GENERAL INVESTMENT TREND

Table-5

Investment Trend of IBBL since 2002

300,000

Million Taka

260,446 250,000 227,863 191,230 154,000 150,000 120,402 100,000 49,152 62,722 98,610 80,361

200,000

50,000

2002

2003 62,722

2004 80,361

2005 98,610

2006

2007

2008

2009

30.09.1 0

Amount 49,152

120,40 2 154,000 191,23 0 227,86 3 260,44 6

ECONOMIC PURPOSE-WISE INVESTMENT IN COMPARISON WITH PERSPECTIVE PLAN

Table-3
(Amount in Million Taka)
Position as on 31.12.2009 Amount
1 2 3

Sl. No.

Economic Purpose

Proportionate Allocation for 2010 Allocation upto as per Plan September-2010 as per Plan Amount
5

Position as on 30.09.2010 Amount

9

Change on 30.09.2010 over 31.12.2009 Amount

11

%
4

%
6

Amount
7

%
8

%
10

%
12

Agriculture & Agro 1 Industry a. Agriculture b. Agro-based Industry 2 Industry a. Industry: HPSM(Project) b. Industry: Working Capital 3 Trade 4 Real Estate 5 Transport 6 RDS 7 Other Special Schemes 8 Others Total

6,850 2,278 4,572

3.01% 1.00% 2.01%

15,276 8,576 6,700 126,764 56,548 70,216 83,080 18,760 6,700 4,288 6,432 6,700 268,000

5.70% 3.20% 2.50% 47.30% 21.10% 26.20% 31.00% 7.00% 2.50% 1.60% 2.40% 2.50% 100%

12,967 6,836 6,131

5.03% 2.65% 2.38%

13,831 6,911 6,920

5.31% 2.65% 2.66%

6,981 2.30% 4,632 1.65% 2,349 0.65% 10,836 -2.35% 12,073 1.74% (1,238) -4.09% 7,961 -1.08% 1,891 0.22% 991 0.18% 754 0.08% 754 0.16% 2,415 0.49% 32,584 100%

118,593 52.05% 52,771 65,822 23.16% 28.89%

125,078 48.49% 55,759 69,320 81,304 16,130 5,889 4,158 5,327 7,113 257,966 21.61% 26.87% 31.52% 6.25% 2.28% 1.61% 2.06% 2.76% 100%

129,428 49.69% 64,844 64,584 24.90% 24.80%

75,354 33.07% 9,140 3,717 3,752 2,414 8,042 227,863 4.01% 1.63% 1.65% 1.06% 3.53% 100%

83,315 31.99% 11,031 4,708 4,507 3,168 10,457 260,446 4.24% 1.81% 1.73% 1.22% 4.02% 100%

Islamic Microfinance Micro-finance as a means of extending banking services to the marginal and poverty stricken people typically unable to get any access to the mainstream finance markets, was pioneered by Bangladeshi economist Dr. Muhammad Yunus. Dr. Yunus was awarded the Nobel Prize for his immense contribution in poverty alleviation in Bangladesh. Islami Bank Bangladesh Limited, in keeping with its mission & vision as well as the spirit of Maqaside Shariah, has been extending Shariah compliant microfinance facilities to the people of below poverty line since 1995. In doing so, an investment program named Rural Development Scheme has been launched & currently around 1700 regular employees have been engaged to reach the Islamic microfinance facilities to the rural impoverished people across the country. The main objective of the Scheme is to create income generating and productive self-employment opportunities through extension of investment for the development of rural areas and thereby contribute in alleviating rural poverty.

Position of Islamic Microfinance of Islami Bank Bangladesh Limited (as on 31.10.2010) Table-6 Number of village Number of client
11,225 310,702
Amount in Million Taka
(US $ 1= Taka 70)

Percentage of recovery Mode of investment

Cumulative disbursement Resilience

30,524

Market share (Village)

99.12% Mudaraba Musharaka Bai-Murabaha Bai-Muazzal 13%

Despite the global financial crisis, the Islamic banks in Bangladesh have efficiently sustained their position & not in any way distressed whatsoever in terms of its profitability and growth. The compound annual growth of deposit as well as investment being 26.85% & 25.10% respectively for the year 2008-2009 is expected to be further boosted in 2010. The future of Islamic banking sector in Bangladesh appears to have been prospective due to the growing economic development in different sectors; strong regulatory and supervisory framework; increasing number of young and energetic entrepreneurs to take forward the SME sector as well as cheaper manpower. Corporate Social Responsibility
Sectors Cumulative Number of Beneficiary Cumulative Disbursement

Health & Medicare

1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. 1. 2. 3. Assistance to charitable dispensaries Assistance to poor patients Sanitary latrine installation Mobile eye camp Circumcision camp Arsenic mitigation tube well

2,985,349

190,531,067

Educational Program
Assistance for poor student Assistance for Educational Institution Scholarship program Mobile library Slum development

30,638,006

199,293,507

Literature ,Culture & Publication

Bangladesh Cultural Centre Islamic Research Magazine Distribution to Islamic Literature Assistance to youth club etc. Assistance to infants foundation Assistance for Child Development

612,116

135,207,184

Humanitarian Help Program

Distress Women Rehabilitation Centre Assistance to Orphan & Distressed Quarde-e-Hasana

75,335

126,922,865

Mosques Relief & Rehabilitation

1. 2. Relief & Rehabilitation Program Fael Khair Program

47,961

8,028,514 139,772,501

Income Generating Program

1. 2. Sewing macine, self employment Village Health Worker Training

315,777

43,409,744

Total

11,593

843,165,382

Challenges: Despite the phenomenal prospect of expansion, this industry suffers different challenges causing impediments on its progress. Effort is continuing to efficiently overcome thereof and hopefully the barriers will be slackened overtime. The common setbacks that are being faced are: Lack of comprehensive legal system to allow the introduction of more Islamic financial tools. Absence of Islamic money market. Shortage of supportive and link-institutions. Lack of innovative products to boost corporate finance and increase liquidity position. Growing competition due to new entrants/opening of Islamic windows. Lack of understanding of Islamic finance. Lack of talented professional bankers. Lack of customers orientation in Islamic banking

Non-Bank Islamic Financial Institution Apart from the Islamic banking various non-bank Islamic financial institutions have been established and efficiently functioning. The non-bank Islamic financial institutions include the following entities: Position of Non-Bank Islamic Financial Institutions Sl.No. 01. 02. 03. 04. 05. 06. 07. 08. Table -5 Name of Institution Islamic Finance and Investment Limited(IFIL) Islami Insurance Bangladesh Limited Takaful Islami Insurance Limited Far East Islami Life Insurance Limited Prime Islami Life Insurance Co. Padma Life Insurance Limited Homland Life Insurance Limited Shandhani Life Insurance Limited Narure/Remarks Investment Co. General Insurance Co. General Insurance Co. Life Insurance Co. Life Insurance Co. Traditional Life Insurance Co. opened Islamic counter Traditional Life Insurance Co. opened Islamic counter Traditional Life Insurance Co. opened Islamic counter

Overview of Islamic Finance in Bangladesh

Background The saga of Islamic banking and finance of this country is to some extent different from those of others. The intellectual exercise to materialize the dream of Islamic banking and finance in this delta was going on for four decades starting from 1940s. In this period, a group of prominent visionary scholars of the subcontinent, with their own initiative & purely faith-driven obligation, performed voluminous works on Islamic economics and finance, side by side, endeavored a lot to draw an operational frame work of Islamic banking in particular. The basic theoretical works, so far required, was done in this very period and operational exercise thereof was being emphatically waited. The aura of this long cherished hope was sighted first when Bangladesh signed the charter of Islamic Development Bank in August, 1974 & expressed commitment to restructure its financial system as per Islamic Shariah. In 1978 Bangladesh subscribed the recommendation of Islamic Foreign Ministers Conference held in Senegal regarding gradual establishment of Islamic banks in the member countries. Meanwhile, two professional bodies- Islamic Economics Research Bureau (IERB) established in 1976 and Bangladesh Islamic Bankers Association (BIBA) established in 1980 made significant contributions towards introduction of Islamic banking in the country. They initiated a holistic approach in providing basic training on Islamic banking to the top bankers and economists to help overcome the probable leadership vacuum of the future Islamic banks in Bangladesh. A lot of seminars, symposia and workshops on Islamic economics & banking were arranged throughout the country to make the mindset & create awareness among the masses. This development got further momentum in 1981, when the then President of Bangladesh while addressing the 3rd Islamic Summit Conference held in Mecca & Taif suggested The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce. In the subsequent year, a delegation of IDB paid a visit to Bangladesh and expressed their keen interest in establishing a joint venture Islamic Bank in Bangladesh. Finally the epoch making event arrived; the long cherished aspiration turned into a reality and Islami Bank Bangladesh Limited, the first ever Islamic bank in South-East Asia was founded on 13 th March, 1983 in sponsorship of the 22 national as well as following 14 international bodies and distinguished personalities:

List of the Sponsors of Islami Bank Bangladesh Limited

Table-1
Sl.No. 01. 02. 03. 04. 05. 06. 07. Name of Sponsor Kuwait Finance House (K.S.C) Safat, Kuwait Jordan Islamic Bank Islamic Investment & Corporation, Doha, Qatar Bahrain Islamic Bank Exchange Sl. No. 08. 09. 10. 11. 12. 13. 14. Name of Sponsor The Public Institution for Social Security, Safat, Kuwait Ministry of Awqaf and Islamic Affairs, Kuwait Islamic Development Bank Ministry of justice, Development of Minor Affairs, Kuwait Mohammad Absur Razzaque Lasker (Late), Bangladesh Sheikh Ahmed Saleh Jamjoom Jeddah, K.S.A. Sheikh Fouad Abdul Hameed Al-Khateed (Late)

Islamic Banking System International Holding S.A; Luxembourg Al-Rajhi Company for Currency Exchange & Commerce, Riyadh, K.S.A. Dubai Islamic bank

Impact of IBBL in Banking Sector The establishment of Islamic Bank Bangladesh Limited is a milestone and a turning point in ushering the new era of Islamic finance & banking that paved the way to set up more Islamic banks in Bangladesh. Under this backdrop, the entrepreneurs became immensely encouraged to see the overwhelming success of Islami Bank Bangladesh Limited and came forward to invest their fund in the new industry of Shariah based Islamic banking and till now the following 6 full fledged Islamic banks (other than IBBL) have come into existence: 1. 2. 3. 4. 5. 6. Al Baraka Bank Limited (now reorganized as The Oriental Bank Limited), established in 1987. Al Arafah Islami Bank Limited, established in 1995. Social Islami Bank Limited, established in 1995. Shahjalal Islami Bank Limited, established in 2001. Exim Bank Limited was originally a conventional bank. It converted its entire banking operations into an Islamic one since July 2004. The First Security Bank Limited also was a conventional bank. It converted its entire operations into an Islamic one since 1st January, 2009.

Bangladeshs Islamic Banking System: Key Statistics (as at end-2009) Table-1

Amount in Million Taka
(US $ 1= Taka 70)

Regulator Shariah supervisory No. of Islamic banks No. of conventional banks opened Islamic banking window Total deposit of 7 full fledged Islamic banks Total investment Investment-to-deposit ratio

Bangladesh Bank Shariah Supervisory Board of the respective financial institution 07 13 490,359 453,639 92.51%

Market share of investment Compound annual growth of deposit Compound annual growth of investment Islamic capital market Money market products Deposit mechanism Capital market products

17.81% 26.85% (2008-2009) 25.10% (2008-2009) NIL NIL 1. 2. 1. Mudaraba Al-Wadeah Share against the paid up capital of each bank 2. Murabaha Perpetual Bond (MPB) launched by Islami Bank Bangladesh Limited 1. Bai-Murabaha 2. Bai-Muazzal 3. Bai-Salam 4. Bai-Sarf 5. Quard-e-Hasana 6. Mudaraba 7. Musharaka 8. Istisna 9. Ijara 10. Ijara Wa Iqtina 11. Ijara Muntahina Bittamleek

Market share of deposit

15.78%

Investment mechanism

Key Statistics of 7 (Seven) Islamic Banks as at end-2009

Table-2
Sl. No. 01. 02. 03. 04. 05. 06. 07. Name of the Bank Islami Bank Bangladesh Limited ICB Islami Bank Ltd. Al-Arafah Islami Bank Ltd. Social Islami Bank Ltd EXIM Bank Limited First Security IslamicBank Shahjalal Islami Bank Paid up Capital No. of
Branch

Amount in Million Taka

(US $ 1= Taka 70)

Total Man Power

Deposit

Market Share in Deposit

Investment

Market Share in Investme nt

Fr. Exchange Business

Market Share in Fr. Ex. Business

6,178 6,647 1,799 2,692 3,374 2,300 2,740 25,730

247 31 60 43 53 47 52 533

10,057 720 1,350 1,183 1,440 1,115 1,547 17,249

243,652 13,046 38,355 31,588 73,835 42,423 47,459 490,359

7.83% 0.42% 1.23% 1.02% 2.37% 1.36% 1.53% 15.76%

227,863 13,410 36,134 24,938 68,610 38,726 43,958 453,639

8.94% 0.53% 1.42% 0.98% 2.69% 1.52% 1.73% 17.81%

462,370 1,228 60,452 34,888 162,605 20,209 79,450 821,202

10.33% .03% 1.35% 0.78% 3.63% 0.45% 1.77% 18.34%

Total

Islamic Banking Windows In the banking sector, the above banks are performing well and their steady development has lured different conventional banks to open Islamic banking window. Till now, total 13 conventional banks have opened around 30 Islamic banking windows which are currently operating with praiseworthy performance. The remaining Private Commercial Banks (PCB) as well as State owned Commercial Banks have been actively contemplating to open Islamic banking windows & of them have already finalized their decision to this effect

Statistics of Islamic Banking Windows of 13 (Thirteen) Conventional Banks as at end- 2009

Amount in Million Taka

Sl. No
01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 13.

Name of the Banks

Arab Bangladesh Bank Limited Prime Bank Limited. Jamuna Bank Limited Dhaka Bank Limited South-East Bank Limited Premier Bank Limited The City Bank Limited Standard Bank Limited Standard Chartered Bank Limited (Sadiq) HSBC (AManah) Trust Bank Limited Bank Asia Limited Pubali Bank Limited Total

Table-3 No. of Branches Total Deposit

1 5 2 2 5 2 1 2 1 1 5 2 1 30 3,080 12,680 2,334 4,359 10,308 3,356 900 20 802 118 37,957

(US $ 1= Taka 70)

Total Investment
1,760 8,984 2,076 2,255 4,842 1,266 650 1,374 110 23,317

Profit/Loss
192 640 158 100 236 23 45 191 73 1,658

Measures and incentives Bangladesh Bank i.e. the Central Bank of Bangladesh does not offer any special incentive to Islamic banks but playing an impartial role in dealing with conventional and Islamic Banks as well as the Islamic windows of conventional banks. The Central Bank, however, formulated comprehensive guidelines for Islamic banks to help regulate their day to day operations. The Islamic banks operating in the country are as usual required to comply with the international standards in respect of risk and capital adequacy as set by Basel. They are also expected to adhere to the rules and guidelines as set by the AAOIFI and the IFSB with regard to the accounting treatment of Islamic financial transactions. Resilience Despite the global financial crisis, the Islamic banks in Bangladesh have efficiently sustained their position & not in any way distressed whatsoever in terms of its profitability and growth. The compound annual growth of deposit as well as investment being 26.85% & 25.10% respectively for the year 2008-2009 is expected to be further boosted in 2010. The future of Islamic banking sector in Bangladesh appears to have been prospective due to the growing economic development in different sectors; strong regulatory and supervisory framework; increasing number of young and energetic entrepreneurs to take forward the SME sector as well as cheaper manpower. Major Player Islami Bank Bangladesh Limited since its establishment has been playing a leading role among the Shariah based Islamic banks functioning in Bangladesh. As shown in Table-2 the share of Islami Bank Bangladesh Limited alone, in terms of deposit and investment, is almost equal to that of aggregated amount of the remaining 6 Islamic banks. The following Tables will depict the position vividly how steady and phenomenal progress Islmai Bank Bangladesh Limited is making in different sectors: Islamic Microfinance Micro-finance is a means of extending banking services to the marginal and poverty stricken people typically unable to get any access to the mainstream finance markets. Islami Bank Bangladesh Limited, in keeping with its mission & vision as well as the spirit of Maqaside Shariah, has been extending Shariah compliant microfinance facilities to the people of below poverty line since 1995. In doing so, an investment program named Rural Development Scheme has been launched & currently around 1700 regular employees have been engaged to reach the Islamic microfinance facilities to the rural impoverished people across the country. The main objective of the Scheme is to create income generating and productive selfemployment opportunities through extension of investment for the development of rural areas and thereby contribute in alleviating rural poverty. Position of Islamic Microfinance of Islami Bank Bangladesh Limited (as on 31.10.2010) Table-6 Number of village Number of client
11,225 310,702
Amount in Million Taka
(US $ 1= Taka 70)

Percentage of recovery Mode of investment

Cumulative disbursement

30,524

Market share (Village)

99.12% Mudaraba Musharaka Bai-Murabaha Bai-Muazzal 13%

Corporate Social Responsibility Sl.No.

01. 02. 03. 04. 05. 06. 07. 08. 09. 10. 11. 12. 23. 24. 25.

Name of Project
Islami Bank Hospital Islami Bank Community Hospital Islami Bank Medical College Islami Bank Medical College Hospital Nursing Institute Islami Bank Institute of Health Technology Islami Bank Homoeopathy Clinic Islami Bank Institute of Technology Islami International School and College Islami Bank Model School and College Islami Bank Mohila (Women) Madrasah Quranic Language Institute Bangladesh Sangskritic Kendra (Cultural Centre) Monoram-Islami Bank Crafts and Fashion Islami Bank Women Rehabilitation Centre Slum Development Project

No. of Unit
6 7 1 1 1 1 6 1 1 1 1 2 1 1 1

Sectors

Cumulative Number of Beneficiary

Cumulative Disbursement

Health & Medicare

7. 8. 9. 10. 11. 12. 6. 7. 8. 9. 10. 7. 8. 9. 10. 11. 12. 4. 5. 6. Assistance to charitable dispensaries Assistance to poor patients Sanitary latrine installation Mobile eye camp Circumcision camp Arsenic mitigation tube well

2,985,349

190,531,067

Educational Program
Assistance for poor student Assistance for Educational Institution Scholarship program Mobile library Slum development

30,638,006

199,293,507

Literature ,Culture & Publication

Bangladesh Cultural Centre Islamic Research Magazine Distribution to Islamic Literature Assistance to youth club etc. Assistance to infants foundation Assistance for Child Development

612,116

135,207,184

Humanitarian Help Program

Distress Women Rehabilitation Centre Assistance to Orphan & Distressed Quarde-e-Hasana

75,335

126,922,865

Mosques Relief & Rehabilitation

3. 4. Relief & Rehabilitation Program Fael Khair Program

47,961

8,028,514 139,772,501

Income Generating Program

3. 4. Sewing macine, self employment Village Health Worker Training

315,777

43,409,744

Total

11,593

843,165,382