General Banking Activities and Financial Performance On Social Islami Bank Limited

BACKGROUND OF THE STUDY
Bachelor of Business Administration is a specialized course. State University of Bangladesh

arranges a four year specialized course to provide some efficient graduates in this business
sector of the country. The whole course design is not limited within the theoretical boundary but it
also extends to the practical exposure through the internship program. After completion of 4
years in the BBA program of the School of Business and Social Studies, State University of
Bangladesh, three months organizational attachment is must. So the preparation and submission
of this report is partial requirement for the completion of the Bachelor of Business Administration
(BBA).This report is outcome of the three months long internship program conducted in Social
Islami Bank Limited (SIBL), one of the reputed private commercial banks of the country .While
working operating procedures carried out by the bank were observed and supportive effort with
the trainers, bankers & under the guidance of my faculty respective advisor Kazi Ayesha
Siddiqua.
This internship program has been prepared on the basis of my practical experience in the general
banking. This report will also provide the essential informations how the private commercial
banks contribute for the economic development of the country.
I have tried my best to utilize the opportunity to enrich my knowledge on banking system and
incorporate it with the theoretical course.
OBJECTIVES OF THE STUDY
The objective of the study is to gather practical knowledge on banking system and operation. This
internship gives us a chance to co-ordinate with the theoretical knowledge and the practical
experience and to evaluate the performance of general banking of Social Islami Bank Limited.
The following are of objective for internship in bank:
General Objective
The general objective is to prepare & submit a report on the topic of General Banking Activities
and Financial Performance of Social Islami Bank Limited.
Specific Objective
To apply theoretical knowledge in the practical field.
To be familiar with the banking management system.
To have exposure to the functions of general banking section.
To analyze the service procedure of SIBL.
To familiarize the working hours, values and environment of the bank.
To analyze the financing system of the Bank and find out whether the bank needs any
improvement.
To find out the contribution of private commercial banks for the economic development of the
country.
METHODOLOGY
Every report is prepared by following a concrete methodology. The success of the report
depends on the followed methodology in major portion. My study is performed based on the
information extracted from different sources collected by using a specific methodology. All the
methodology is mentioned below:
Primary sources
Practical desk work
Face to face conversation with the officer & client
Direct observations
Secondary sources
Annual reports of SIBL.
Files & Folders
Memos & Circulars
Daily diary (containing my activities of practical orientation) maintained by me,
Various publications on Bank,
Websites,
Different circulars sent by Head Office and Bangladesh Bank.
RATIONAL OF THE STUDY
There are three specific sectors in the SIBL. General banking, Investment & Foreign Trade are
those. Basically under those sectors SIBL play a vital role of the country. General banking is one
of the profitable sites for the all bank. On the other investment also a strong silt of the SIBL. But
SIBL (Social Islami Bank Limited) is most popular for its foreign trade. Besides it have very strong
relationship with the foreign customer. SIBL foreign trade policy is huge. Basically most of the
customer is made an import & export by the SIBL. So the foreign trade policy is selected by me to
submit a internship report up to Social Islami Bank Limited.
SCOPE OF THE STUDY
This report has been prepared based on general banking & financial performance. While
preparing this report I had a great opportunity to work. And this work experience gives me a idea
about in general banking activities & financial performance of SIBL Bank. It enhances my
practical knowledge in banking activity and I can be able to communicate with practical and
theoretical one.
LIMITATION
Due to confidentiality of the data, adequate data were not available.
Supply of more practical and contemporary data is another shortcoming
The study may not be done very successfully due to inexperience.
On our schedule time we could not find the respondent. Because they were busy with their work
on that time.
Chapter: 2
Islami Banking Concept

Bismillahir Rahmanir Raheem
Those who take Riba (usury) will not stand (on the day of resurrection) except like the standing a
person beaten by Shaitan (Shatan) leading him to insanity. That is because they say: Trading is
only like Riba (usury), whereas Allah has permitted trading and forbidden Riba (usury).So
whosoever receives an admonition from his Lord and stops eating Riba (usury) shall not be
punished for the past: his case is for Allah (to judge); but whoever returns [to Riba (usury)], such
are the dwellers of the fire- they will be abide therein.
Surah Al-Baquarah, verse-275
Allah will destroy Riba (usury) and will give increase for Sadaqaat (deeds of charity, alms
etc.)And Allah likes not the disbelievers, sinners.
O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba [(usury)
(from now onward)], if you are (really) believers.
And if you do not do it, then take a notice of war from Allah and His Messenger; but if you repent,
you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and
you shall not be dealt with unjustly (by receiving less than your capital sums).
ISLAMI BANKING CONCEPT
Islamic banking refers to a system of banking or banking activity that is consistent with the
principles of Islamic law (Shariah) and its practical application through the development of Islamic
economics. Shariah prohibits the payment or acceptance of interest fees for the lending and
accepting of money respectively, (Riba, usury) for specific terms, as well as investing in

Messages
From the Holy Quran
businesses that provide goods or services considered contrary to its principles (Haraam,
forbidden). While these principles were used as the basis for a flourishing economy in earlier
times, it is only in the late 20th century that a number of Islamic banks were formed to apply
these principles to private or semi-private commercial institutions within the Muslim community.
SCENARIO OF ISLAMI BANKING IN BANGLADESH
In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed
itself to reorganize its economic and financial system as per Islamic Shariah.
In January 1981, Late President addressing the 3rd Islamic Summit Conference held at Makkah
and Taif suggested, The Islamic countries should develop a separate banking system of their
own in order to facilitate their trade and commerce.
This statement of Late President indicated favorable attitude of the Government of the Peoples
Republic of Bangladesh towards establishing Islamic banks and financial institutions in the
country. Earlier in November 1980, Bangladesh Bank, the countrys Central Bank, sent a
representative to study the working of several Islamic banks abroad.
In November 1982, a delegation of IDB visited Bangladesh and showed keen interest to
participate in establishing a joint venture Islamic bank in the private sector. They found a lot of
work had already been done and Islamic banking was in a ready form for immediate introduction.
Two professional bodies -Islamic Economics Research Bureau (IERB) and Bangladesh Islamic
Bankers Association (BIBA) made significant contributions towards introduction of Islamic
banking in the country. They came forward to provide training on Islamic banking to top bankers
and economists to fill-up the vacuum of leadership for the future Islamic banks in Bangladesh.
They also held seminars, symposia and workshops on Islamic economics and banking
throughout the country to mobilize public opinion in favor of Islamic banking. Their professional
activities were reinforced by a number of Muslim entrepreneurs working under the aegis of the
then Muslim Businessmen Society (now reorganized as Industrialist & Businessmen Association).
The body concentrated mainly in mobilizing equity capital for the emerging Islamic bank.
At last, the long drawn struggle to establish an Islamic bank in Bangladesh became a reality and
Islami Bank Bangladesh Limited was established in March 1983 in which 19 Bangladeshi
national, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of
the Middle East and Europe Including IDB and two eminent personalities of the Kingdom of Saudi
Arabia joined hands to make the dream a reality.
Later, other three Islamic Banks were established in the country.
OBJECTIVES OF ISLAMIC BANKING
The objective of Islamic Banking is not only to earn profit but also to do good and welfare to the
people. Islam upholds the concept that money, income and property belong to ALLAH and this
wealth is to be used for the good of the society. The main objectives of Islamic Banking are as
follows:
1. To conduct interest free banking.
2. To establish participatory Banking instead of Banking on debtor-creditor relationship.
3. To invest through different modes permitted under Islamic Shariah.
4. To accept deposits on profit-loss sharing basis.
5. To establish welfare oriented Banking System.
6. To extend operation to the poor, helpless and low income group for their economic up liftmen.
7. To contribute in achieving the ultimate goal of Islamic economic system.
COMMON PRACTICES OF ISLAMIC BANKS IN MOBILIZATION OF FUND
The common practices of Islamic banks in the sources of funds may be described as follows:
1. Current Account
All Islamic banks operate current account on behalf of their client individuals and business firms.
These accounts are operated for the safe custody of deposits and for the convenience of
customers. There is little different between conventional banks as far the operation of current
accounts is concerned. There are two dominant views about current account. One is to treat
demand deposit as amnah (trust). A trust deposit is defined by the Jordan Islamic Banks as cash
deposits received by the bank where the bank is authorized to use the deposits at its own risk
and responsibility in respect to profit or loss and which are not subject to any conditions for
withdrawals or depositing.
2. Saving Account
All Islamic banks operate saving accounts. It must be pointed out that any return on capital is
Islamically justified only if the capital is employed in such a way that it is expected to a business
risk. Savings accounts at Islamic Banks Generally operate as follows:
1. Savings accounts are opened with the condition that deposits provide the bank with an
authorization to invest.
2. Depositors have the right to deposit and withdraw funds.
3. The profits in savings accounts are calculated on the minimum balance maintained during the
month. Depositors participate in the profits of savings accounts with effect from the beginning of
the month following the month in which the deposits are made. Profits are not calculated with effect
from the beginning of the month in which a withdrawal is made from the account.
4. A minimum balance has to be maintained in order to qualify for a share in profit.
3. Investment Deposit
Investment deposits are Islamic banks counterparts of term deposits or time deposits in the
conventional system. They are also called profit and Loss-Sharing (PLS) Accounts or
Participatory Account. However they can be distinguished from traditional fixed term deposits in
the following manner:
1. Fixed term deposits in the conventional system operate on the basis of interest while investment
accounts in Islamic banks operate on the basis of profit sharing Instead of promising depositors a
predetermined fixed rate of return on their investment the bank tells them only the ratio in which it
will share the profits with them.
2. While fixed term deposit are usually distinguished from each other on the basis of their maturities
investment deposits can be distinguished on the basis of maturity as well as on the basis of
purposes as it is possible to give special instructions to the bank to invest a particular deposit in a
specified project or trade.
The main distinguishing characteristics of investment deposits can be described as follows:
1. Deposit holders do not receive any interest. Instead they participate in the share of the profits or
losses.
2. Usually these accounts are opened for a specific period e.g. three months, six month, one year or
more.
3. Generally speaking depositors do not have the right to withdraw from these accounts as is
customary in time deposits in conventional banks.
PROFILE OF SOCIAL ISLAMI BANK LIMITED
BACKGROUND OF THE BANK
Social Islami Bank was founded in 1995 as Social Investment Bank Limited and changed its
name to the present one on August 2009.
SIBL has been running its activities through its 74 branches all over the country. It provides Islami
banking facilities to its customers under the supervision of a strong jury board. It provides all
formal commercial banking services to people.
Formal banking services rendered by SIBL are Deposit Accounts, Deposit Schemes, Investment
Banking, Foreign Exchange Trade and other routine jobs.
Mudaraba Savings Deposit, Al Wadiah Current Deposit, Mudaraba Term Deposit and Mudaraba
Notice Deposit are the deposit accounts provided by SIBL.
Mudaraba Term deposit is to be opened with a deposit of Tk.5000 minimum from individual, joint
farm, Public limited company or Local Government organizations. After maturity, allowed to
withdraw the money along with profit as decided by the bank.
Mudarabe Notice Deposit requires a notice period before withdrawal of money.
Ten Deposit schemes are presently in function at SIBL. These are:
Mudaraba Monthly profit
Hajj Deposit Scheme
Mudaraba Millionaire Scheme
Mudaraba special Deposit (Pension) scheme
Mudaraba Term savings Scheme based on Monthly Deposit
Mudaraba Education Savings Scheme
Mudaraba Bashastan Savings Scheme
Mudaraba double Benefit Deposit Scheme
Mudaraba Lakhopoti Deposit Scheme
Mudaraba Foreign Currency Term Deposit Scheme
Monthly Profit scheme is targeted to retired persons who can deposit a substantial amount from
his service benefits for a fixed period. He would get a monthly profit from it.
Hajj Deposit Scheme is to help people for performing Hajj. A mutually agreed monthly installment
is to be deposited and profit earned as per Shariah is added. After maturity client will get the
money with total profit to enhance client Hajj program.
Millionaire Scheme is a monthly deposit Scheme to achieve a total of taka 10 lacs along with
profit after maturity. The duration of this scheme is 15, 20, and 25 years. Accordingly the
installment is decided. The profit is calculated following Shariah.
Special Savings (Pension) Scheme is, as the name implies, for people in job now and desire to
have a regular income after retirement. Deposits are made as monthly installments and after
maturity client may have the total amount at a time or as a monthly pension.
Term saving is also a monthly deposit scheme.
Educational expenditure is getting higher day by day. Still client must not ignore his/her childrens
education. So client would like to build up a fund for future. Mudaraba Education Scheme is the
solution.
Mudaraba Bashastan Savings Scheme is meant for solving housing problem. Clients have to
deposit an installment of Tk.500 or any multiple of it for a decided duration. After maturity client
may expect a good amount to be spent for self home.
Voluntary Banking sector is another field of SIBLs activity. This field includes Cash Waqf
Scheme and Mosque Waqf Property Development Scheme.
Cash Waqf Scheme is designed for investment in the religious, social and educational services.
Well off and rich people are supposed to make the investments and in the mean time response is
good.
Mosque Waqf Property Development Scheme provides consultation to make mosques and Waqf
properties self sufficient and sustainable.
Non Formal Banking area of SIBL offers schemes like Micro Investment Scheme, Micro
Enterprise Investment Scheme, Joint Scheme, Development and Rehabilitation Scheme, and
Joint Programs with ILO and UNICEF.
Micro Investment is a group based lending program aiming at improvement of the low income
people of the society. Maximum amount to invest is Tk. 25000 for each case.
Micro Enterprise Investment Scheme contains three types of schemes. These are Family
Empowerment Micro-Enterprise Program, SMES and Small, Medium & Micro Enterprise
Development in collaboration with JOBS, USA. All these schemes are prepared to create easy
access of small entrepreneurs to business capital.
A rehabilitation program for child labor in garment industries are under taken by SIBL jointly with
ILO. This program aims at complete elimination of child labor.
Social Islami Bank Limited is always with modern thinking and up to date technology. It has
naturally introduced online banking, ATM service and any branch banking like products. SIBL is
prospering along with its clients and partners and contributing to nation as well.
SIBL is a capitalized new generating Bank with an authorized capital and paid up capital of Taka
10000 million in 2011 and also 2987.81575 million respectively as of December 2010.
Company Profile:
Name of the Company Social Islami Bank Limited
Corporate Office15,Dilkusha C/A. Dhaka-1000Websitewww.siblbd.comAuthorized Capital10000
millionPaid up Capital2987.81575 millionChairmanMr. Md. Anisul HoqueManaging DirectorMr.
Muhammad AliCompany SecretaryMahamud HassanType of CompanyPrivate limitedScope of
BusinessBanking, capital market operationsIncorporation of the BankJuly 5, 1995Licensed issued
for opening first branch; Dilkusha BranchNovember 22, 1995Formal launching of the
BankNovember22, 1995Commencement of Business of Dilkusha BranchNovember 22,
1995Listed with Dhaka Stock ExchangeNovember ,2000Listed with Chittagong Stock
ExchangeOctober, 2005Publication of ProspectusDecember 30,1984No. of Branches75
Source: www.siblbd.com
VISION OF THE BANK
Social Islami Bank Ltd started its journey with the concept of 21
st
Century Islamic participatory
three sector banking model: i) Formal Sector- Commercial Banking with latest technology; ii)
Non-Formal Sector Family Empowerment Micro-Credit & Micro-enterprise program and iii)
Voluntary Sector Social Capital mobilization through CASH WAQF and others. Finally,
Reduction of Poverty Level is our Vision, which is a prime object as stated in Memorandum of
Association of the Bank with the commitment Working Together for a Caring Society.
MISSION OF THE BANK
High quality financial services the latest technology.
Fast, Accurate and Satisfactory customer service.
Balanced & sustainable growth strategy.
Optimum return on shareholders equity.
Introducing innovative Islamic Banking products.
Attract and retain high quality human resources.
Empowering real poor families and create local income opportunities.
Providing support for social benefit organizations by way of mobilizing funds and social services.
CORPORATE SOCIAL RESPONSIBILITY OF THE BANK
Social Islami Bank Ltd. has been responding spontaneously to its social commitment as a part of
Corporate Social Responsibility (CSR). Welfare activities for the poor, disabled and distressed of
Social Islami Bank Ltd. are being done mainly from Cash Waqf Fund, Zakat Fund, Compensation
and Doubtful Income. This bank is doing welfare of mankind in various sectors like Health,
Education, Rehabilitation and Donation etc. They are also extended financial support to
Mosques, Madrashas, Orphanages and Voluntary Social Organizations. Social Islami Bank Ltd.
distributed relief to SIDR affected areas and flood affected areas also.
DIVISION OF SOCIAL ISLAMI BANK LIMITED
Name of the divisions of SIBL is as follows:
Information Technology Division
Financial Administration Division
International Division
Logistic Support Division
Managing Directors Secretariat
Business Development & Marketing Division
Audit & Inspection Division
Chairmans Secretariat
Share Division
Board Secretariat
Human Resources Division
Shariah Board Secretariat
SIBL Training Institute
SME Banking Division
Legal Department
Board Audit Cell
MIS, Planning & Research Division
Internal Control & Compliance Division
Investment Risk Management Division
Voluntary Banking Division
Recovery Department
Global Business Division
NETWORK OF THE BRANCHES
SIBL started its working at 15, Motijheel C/A with a Branch named Motijheel Branch on 22,
November 1995 was the first & main Branch of SIBL and has been operating throughout the
country. The age of the Bank is only 16 years and during this short period of time, the Bank has
established total 74 Branches over the country and made a smooth network inside the country.
The number of Branches as Division wise is mentioned in the following table:
Division
No. of Br.
Dhaka Division
26
Chittagong Division
15
Sylhet Division
2
Narayangonj
5
Bogra
2
Khulna Division
2
Rajshahi Division
1
Sirajgonj
3
Noakhali
1
Comilla
1
Chadpur
3
Narsingdi
1
Jessor
3
Bagerhat
1
Satkhira
1
Dinajpur
1
Gaibandha
1
Noagaon
1
Rangpur
1
Pabna
1
Feni
1
Barisal Division
1
Gajipur
1
Total
75
FUCNTIONS OF SOCIAL ISLAMI BANK LIMITED
Mobilization of idle resources of the country by accepting Deposits from the general public.
Granting Loans and Advances to the individual firms and companies for activating and
developing trade, commerce and industries and other productive activities in the country.
To give facilities to the client and shareholders in a systematic way.
Give encouragement to the people for savings.
To increase investment.
To make easy transfer of foreign currency.
To identify consumers demand and fulfill their demand by supplying money.
To improve economy by borrowing financial facility.
To assist capital market.
Management Hierarchy
The Ownership Pattern
This is a private sector commercial Bank providing comprehensive range of banking services.
The bank is owned as follows:
Sponsor/Director 26.5%
Institute 13.48%
Public 60.02%
At present the Bank has an amount of Tk.10000.00 million of Authorized Capital and Tk.2987.81
million of Paid-up Capital
Human Resource
There is no alternative to skilled and trained manpower in service Industry. Bearing this in mind
the well educated, promising and honest workers are being appointed and trained. Bank has
given top priority to develop skilled manpower and introduce them with modern technologies with
the purpose of developing quality customer services. The Bank has undertaken program to train
up its employees of all strata at its own Training Institute. A highly experienced person was
appointed as Director (Training) of the Institute in the year 2001 with the task of formulating
various training modules. Steps are being taken to shift the Institute to separate premises for
facilitating training activities. Side by side, both inland and foreign training also imparted during
the year as usual. A highly experienced, well educated and motivated workforce is playing vital
role towards the growth of the Bank deserve appreciation. The total manpower strength of the
bank was 1252 as on 31
st
December, 2010.
Training Institute
Well educated peoples are needed to achieve the objectives of a firm. With a view to build
enthusiastic and skilled work force, Social Islami Bank Training Institute was established in
24
th
October, 1996 at Shyamoli, Dhaka. Every year the Institute trains sufficient number of
employees. By the side of the new employee/officer, it is possible to trained SIBLs existing
employee/officer. There is a library in SIBL. There is about 2thousand books remain in this
library. Accounting, Management, Marketing, and Computer related books are in this library. In
2010, 74 employees from the bank got training from BIBM.
Foreign Correspondents of SIBL
In order to gain maximum advantage from Foreign Exchange related business, the Bank has
entered into correspondent relationship with almost all major 122 Banks of 109 countries of the
world like Standard Chartered Bank, American Express Bank Limited, HSBC, HBZ Finance,
Mashreq Bank PSC, Dresdner Bank AG and with local banks in Pakistan, India, Nepal and
Bhutan etc with whom we have advising, reimbursing and confirming arrangement.
Overseas Operations of SIBL
Social Islami Bank has set up joint venture Exchange Company named Gulf Overseas Exchange
Co. Ltd, in Oman contributing 25% of its paid up capital. The present paid up capital of the
company is Riyal Omani 1, 82,000.00. The Chairman of the company is the ex-minister of the
government of Oman. The exchange company, established in 1985, now has three branches in
Oman and is being managed fully by officials of SIBL. The company is running in profit. SIBL is
also exploring possibilities of opening branches in the Middle East, Switzerland and USA. SIBL
has entered into the Management contract with a Kuwati Exchange company to provide
management and technical services. SIBL has acquired equity and management of Nepal Arab
Bank Ltd. which is the largest and highly profitable Private Commercial Bank in Nepal.
Product and Service of SIBL
Mudaraba Term Deposit.
Mudaraba Savings Deposit.
Al-Wadia Current Account.
Mudaraba Notice Deposit.
Cash Waqf.
Scheme Deposit
Mudaraba Hajj Savings Deposit.
Mudaraba Pension Savings Scheme.
Subarna Rekha (Woman)
Subarba Lota (Women)
Shabuz Shayanna
Mudaraba Education Saving
Mudaraba Monthly Profit Scheme
Mudaraba Monthly Savings Scheme.
Mudaraba Bashastan Savings Scheme
Mudaraba Millionaire Scheme
Mudaraba Lakhopoti Scheme
Mudaraba Double Benefit Scheme
Mudaraba Marriage Savings Scheme
Mudaraba Mohorana Savings Scheme
Shabuj Chaya Monthly Profit Scheme
Sukher Thikana Scheme
Sonali Din
Sachandey Pratidin
Samriddir Sopan
Shapner Shiri
Shanchita
ATM Service.
Locker Service.
One Line Banking
Rural Credit Program
Agriculture is the main driving force of economy in Bangladesh. And the whole economic growth
of the country depends on the development, modernization and investment of money in this
connection. As a non-Government financial institution SIBL has been actively participation in rural
credit program in the economic activities for large population of the country since 1992. SIBL has
been working intensively in collaboration with Barindra Multipurpose Development Authority by
conducting the Rural Credit program particularly in Rajshahi, Naoga, Chapainowabgong, and the
northern part of the country in general. In the last 10 years bank has distributed the credit for
Tk.69.85million. The recovery of loan in this project is 94%. In 2001 bank has distributed the loan
for Tk.7.00million. This is the first program for any private bank. Moreover, SIBL has been
participating in Agro Based Industries and Technology Development project Loan financed by
USAID since 1996.
OPERATING PERFORMANCE
Total Operating Income of the Bank as on 31
st
December 2010 stood at
Tk. 2,633,090,142.00 against Tk.1,717,643,034.00 of the previous year. The Bank made an
operating profit of Tk.1,638,628,125.00 in 2010 against Tk.1,064,306,005.00 of 2009. A summary
of operating result of the Bank as on 31
st
December 2010 vis--vis the position as on 31.12.2009
is shown below:
Operating result of the Bank as on 31st December 2010 (Taka in millions)
Particulars 31.12.2010 31.12.2009 Growth Rate %
Income from Investment 3886.18 3078.98 26.22%
Profit paid on Depositors 2435.01 2063.62 18.00%
Net Investment Income 1451.17 1015.36 42.92%
Commission, Exchange & Other Income 1181.92 702.28 68.30%
Total Operating Income 2633.09 1717.64 53.30%
Total Operating Expenses 994.46 653.34 52.21%
Profit Before Provision 1638.63 1064.30 53.96%
Provision against Investment & Others 501.94 337.42 48.76%
Profit Before Tax 1136.69 726.88 56.38%
Profit After Tax 643.019 431.523 49.01%
Chapter: 3
Bank Operation
DEPARTMENT OF SOCIAL ISLAMI BANK LIMITED
SIBL is a three sector Islamic bank. Services, which provided by SIBL, are shown below:
FORMAL SECTOR
GENERAL BANKING AREA
Financial institution intermediary that mediates or stands between ultimate borrowers and
ultimate lenders is knows as financial institution. Banks perform this function in two ways- taking
deposits from various areas in different forms and lending that accumulated amount of money to
the potential investors in other different forms. General banking department aids in taking
deposits and simultaneously provides some ancillaries services. General banking is the front-side
banking service department. It provides those customers who come frequently and those
customers who come one time in banking for enjoying ancillary services. In some general
banking activities, there is no relation between banker and customers who will take only one
service form bank. On the other hand, there are some customers with who banks are doing its
business frequently. SIBL General banking is divided into six sections.
ACCOUNT OPENNING SECTION
Under this section, SIBL officer opens different types of accounts on the request of clients. The
procedure of opening account is given below.
Procedure for Opening of Accounts
Before opening of a current or savings account, the following formalities must be completed by
the customer:
1. Application for the prescribed form
2. Furnishing photographs
3. Introduction by an account holder
4. Putting specimen signatures in the specimen card
5. Mandate if necessary
After fulfilling the above formalities, SIBL provides the customer a pay-in- slip book and a
checkbook.
Application Form for Current/ Savings Account
Followings are the contents of the application form for opening Savings or Current account in
SIBL,-
1) Type of the Account: Individual/ Joint/ Proprietorship/ Partnership/ Limited Company/ Club/
Society/ Co-operatives
2) Name of the Applicant(s)
3) Fathers/ husbands Name
4) Present Address
5) Permanent Address
6) Number, Date of issue, Date of Expiry & Place of Issue of Passport (if any)
7) Date of Birth
8) Nationality
9) Occupation
10) Nominee (s)
11) Special Instruction of Operation of the Account (if any)
12) Initial Deposit13)
13) Specimen Signature (s) of the Applicant (s)
14) Introducers Information (Name, Account Number, Specimen Signature)
In case of Join Account
a) Operation instruction of the account
b) Signature (s)
In case of Partnership Account
a) Partners Signature
b) Partners Name -
The following formality along with the documents is to be completed before opening an account:
a) Two copies of photograph of the Account Holder (s) duly attested by the Introducer.
b) Account to be introduced properly.
c) Introducers signature on Account Opening Form to be verified by an officer under full
signature.
d) Letter of thanks to Account Holder(s) and Introducer to be sent under registered post.
e) In case of joint account, operational instructions are to be signed by the Join Account
Holders.
In case of Club/ Society,-
a) Up to date list of office bearers.
b) Certified copy of Resolution for opening and operation of account.
c) Certified copy of Bye-laws & Regulations/ Constitution.
d) Copy of Government approval (if registered.)
In case of Co-operative Society/ societies Limited,-
a) Copy of Bye-law duly certified by the Co-operative officer.
b) Up to date list of office bearers.
c) Resolution of the Executive Committee as regards of the account.
d) Certified copy of Certificate of Registration issued by Registrar, Co-operative Societies.
In case of Non- Government College/School/ Madrasha/ Muktab,-
a) Up to date list of the Governing Body/ Managing committee.
b) Copy of resolution of the Governing Body/ Managing Committee.
In case of Trustee Board,-
1. Prior approval of Head Office of the Bank.
1. Certified copy of Deed of Trust, up to date list of members of the Trustee Board and Certified copy
of the Resolution of Trustee Board to open & operate the account.
In case of Minors Account,-
a) Putting the word MINOR after the title of the account.
b) Recording special instruction of operation of the account.
c) The account opening form is to be filled in and signed by either of the parents or the legal
guardian appointed by the Court of Law & not by the Minor.
In case of Limited Company,-
a) Certified true copy of the Memorandum & Articles of Association of the company.
b) Certificate of Incorporation of the company for inspection and return with a duly certified
photocopy for banks records.
c) Certificate from the Registrar of the Joint Stock Companies that the company is entitled to
commence business (in case of Public limited Co. for inspection and return) along with a duly
certified photocopy for Banks records.
d) Latest copy of Balance Sheet.
e) Extract of Resolution of the Board. General Meeting of the company for opening the
account and authorization for its operation duly certified by the Chairman/ Managing Director of
the company.
List of Directors with address (a latest photocopy of the form-xii).
Authorized signature.
Name
General conditions of governing Current / Savings Account,-
(a) Minimum Balance to be maintained in current account Tk. 10,000 /- and in Savings account
Tk. 5,000/-
(b) A suitable instruction by an introducer acceptable to the Bank is required prior to opening
an account.
(c) Recent photographs of the Account openers duly attested by the Introducer must be
produced.
(d) When cheques deposited are payable by other banks or outstation they are available after
clearing or collection only, Service charge will be charged @ Tk, 100 /- in current account and Tk
50 /- in Savings account yearly or as charged by the Bank from time to time as and when
required.
Provisional profit rate for Savings Account (SB) @ 6.85% (Half years compounding).
Deposits Accepted by SIBL
I. Mudaraba monthly profit deposit scheme
Social Islami Bank Ltd is an Islamic Bank ruled by Islamic Shariah. The bank is operating in
Formal, Non-Formal and Voluntary banking sector for alleviating poverty in the Bangladesh. But
to reduce poverty in a country like Bangladesh there is no other alternative but increase internal
deposit. Increase in deposit will increase investment and new investment will result in more
employment. For this reason SIBL have introduced Mudaraba Monthly Profit Scheme.
Under this scheme the depositor will get monthly profit on the deposited amount. The reasons for
introducing this scheme are as follows:
1. a. The scheme provides monthly profit for service holders who may deposit the pension benefit
2. b. For those Bangladeshis working abroad willing to deposit once and provide a fixed amount
monthly to family and relative residing in Bangladesh
3. c. The trust and foundations willing to provide monthly scholarship to students against one time
deposit
4. d. For the parents who wants to bear educational expenses of their child against deposit
The features of this scheme are as follows:
Tk. 1,00,000/-, 1,10,000/-, 1,20,000/- or 1,25,000/- or any amount multiple can be deposited
under this scheme.
The duration of the amount should be for Five years
Profit shall be distributed under this scheme as follows:
a. 1,00,000/- Tk. 900 (net)
b. 1,10,000/- Tk. 1000 (net)
a. 1,20,000/- Tk. 1,100 (net)
b. 1,25,000/- Tk. 1150 (net)
The payable profit will become due after 1 month of deposit. But the amount will be deposited to
account in the last week of the month.
Generally, a depositor cannot withdraw the amount before 5 years. But, in unavoidable
circumstances the depositor can withdraw the amount and in that case.
The depositor will have to submit the duly filled application form of the scheme.
The depositor will have to maintain a Mudaraba Savings account in which the profit of the
scheme will be deposited.
In case of change of address the depositor must inform the bank as soon as possible.
If the scheme is closed before 1 year then no profit will be given.
II. Hajj deposit scheme
Hajj is one of the most important bases of Islam. Religious muslims tends to perform Hajj when
they gather financial ability. But they find it difficult to gather the required amount to perform as
there is no such systematic way of saving the money. To help our muslim brothers Social Islami
Bank Ltd introduced Hajj/Umrah Scheme.
The basic rules of this scheme are:
1. a. This account shall be called as Hajj/Umrah Savings Scheme
2. b. Any Muslim Residing in Bangladesh may open an account under this scheme
3. c. This scheme will be accounted under Mudaraba rules. The Bank as Mudarib and the
account holder will be treated as Sahib-e-Mal. The account holder will have to enjoy the Profit /
Loss of the Banks respective year.
4. d. The depositor will be provided with a Deposit book and the deposited amount must be written
and verified by the Banks authorized official. In case of losing the deposit book Tk. 20 has to be
deposited for issuing a new one.
5. e. In case of change of address the bank must have to be notified as soon as possible.
6. f. Provisional profit will be charged on June and December closing. If the account holder is
unable to perform the Hajj/Umrah or any other person does not perform instead of the account
holder then the corresponding account will be treated as a Mudaraba Savings account and
accordingly profit will be distributed.
7. g. An introducer must be there to open an account.
8. h. Any installment size can be chosen during the opening of the account, which cannot be
changed afterwards.
9. i. This scheme can be opened in the name of any under-aged people. In such cases the rules
relating to open an account for an under-aged person must be followed.
10. j. In case of closing the account before maturity profit will be given as per rules of Alwadiah
Current account. No profit will be given in case of closing the account before 6 (Six) months.
11. k. Monthly installment of the account will be deposited within 10th day of each month. Any
advance installment is always appreciable.
12. l. If a depositor fails to deposit the installment of one month then in the next month two
installments must be deposited in due time. In case of failing of two consecutive installments, prior
permission of the Branch incumbent must be taken to deposit all the pending installments.
13. m. In case of failing of 3 consecutive installment the account will be automatically changed to
savings account.
14. n. Money cannot be withdrawn from the Hajj/Umrah account therefore cheque book will not be
issued.
15. o. After the scheduled time of the scheme if the accumulated amount with profit is less than the
amount of total estimated cost to perform Hajj/Umrah then the account holder must deposit the rest
amount at a time. If for any reason the account holder cannot perform.
16. p. Similarly if the total cost for performing Hajj is less than the accumulated amount the rest will
be returned to the account holder.
17. q. The account holder while disbursement of total amount must provide adequate proof of
identity.
18. r. The Bank retains the authority to change, modify, rectify or cancel the rules regarding the
scheme and the account holder must abide by the decision.
III. Mudaraba millionair scheme
People of Bangladesh are the followers of Islam. They are mostly interested to make interest free
deposits. Taking these facts into consideration SIBL a joint venture Islamic bank introduced a
monthly installment based Mudaraba Millionaire Scheme
Rules and regulations of this scheme:
1. a. Tk. 550/-, Tk. 1050/- or Tk. 2050/- is taken as monthly installment under Mudaraba principles
of Islami Shariah.
2. b. Duration of this scheme will be 15, 20 and 25 yrs. After maturity an estimated amount will
become as follows:
Duration Monthly Installment Estimated amount after maturity
15 2050 Tk. 10 lac
20 1050 Tk. 10 lac
25 550 Tk. 10 lac
1. c. The amount in the above is an estimated amount and may vary at maturity.
2. d. After starting of operation of this scheme size of installment cannot be changed.
3. e. Rules of depositing installment:
Installment must be deposited on or before 15th day of each month. Otherwise the installment
will be treated as defaulter.
In case of 15th day being a govt. holiday installment can be deposited in the next working day.
Installment can be deposited by cheque also but the clearance date of the cheque will be
treated as deposit date.
The depositor can deposit his/her monthly installment from his/her Savings/ Current/MND
account through permanent standing instruction.
1. f. Any depositor may open one or more account in the same name in the same branch.
2. g. In case of the scheme account is closed before maturity then profit will be applied at the rate
of Mudaraba Savings Deposit. But if the account is closed before 6 months no profit will be
applied.
3. h. 80% of the amount deposited can be taken as loan but profit rate decided by the bank must
have to be paid by the client.
4. i. If a depositor fails to deposit 4 consecutive installments then the account will be closed and
profit will applied as per rate of Mudaraba Savings Rate. Profit for the first 06 (Six) months shall not
be applied.
5. j. The Bank reserves the right to invest the funds received in mudaraba term deposit accounts,
in its sole judgment, in any interest-free Halal business it deems fit.
6. k. In case of change of address or telephone number the depositor must inform the bank
immediately. The bank will make correspondence with the depositor by postal service and in case
of missing or delay in delivery, the bank will not be liable.
7. l. a. After the death of the depositor the legal guardian of immature nominee or the nominee
himself can continue the scheme. In this a new agreement must be signed with the bank.
b. After the death of the depositor the nominee by providing adequate prove to the bank.
c. The account is matured before the nominee becoming matured then the legal guardian may
encase the amount by providing adequate prove to the bank.
1. m. Any Tax, VAT or Excise duty as applicable by Govt. will be deducted from the account.
2. n. The bank reserves the right to add or alter any or all the rules governing this scheme and
such altered or additional rules shall be immediately thereafter be deemed to be binding on all
depositors.
IV. Mudaraba special savings (pension) scheme
Generally people wants save a portion of their income for economic assurance at old ages. For
this reason a unique kind of savings scheme has to be introduced so that a portion of income can
be deposited regularly for a long time span. This enables a person to get quite a considerable
amount after maturity.
Taking the above reasons into account Social Islami Bank Ltd, a joint venture Islamic bank have
introduced monthly installment based Mudaraba Special Savings (Pension) Scheme.
Under this scheme any person can deposit a fixed amount monthly and after maturity the
depositor will get a handsome amount with increased profit. The depositor may encash the total
amount at a time or can take as monthly pension until a stipulated time.
Intentions and Goal of the scheme:
To create awareness to deposit among average income people.
To create a chance for attractive deposit scheme.
To create an interest free investment.
Eligibility:
Any Bangladeshi person aged above 18 yrs and having sound mental condition can may open
this scheme.
To open this account there must be a signature of a valued introducer.
Parents or legal guardians can open this scheme in the name of their under aged children.
Rate of installment
Tk. 100/-, Tk. 200/-, Tk. 300/-, Tk. 400/-, Tk. 500/-, Tk. 1000/-
Profit & Wait age:
The depositors will get a percentage from the shariah-based investments made by the bank.
Duration of the scheme Waitage
5 yrs 1.05
10 yrs 1.08
The maturity amount may be more or less than the estimated amount.
In case of amount withdrawn before 6 months no profit will be applied.
In case of amount withdrawn before 5 yrs but after 6 months profit will be applied as Mudaraba
Savings Rate.
In case of 10 years scheme if the amount withdrawn after 5 yrs then profit will be applied as per
MSDPS rate for 5 years and for the rest period profit will be applied as Mudaraba Savings Rate.
After the end of scheme period the depositor may take the matured amount with profit by fixing a
monthly take home amount.
After maturity estimated profit will be applied as follows:
Monthly Installment Estimated amount after maturity
5 years 10 years
100/- 8000/- 22500/-
200/- 16000/- 45000/-
300/- 24000/- 67000/-
400/- 32000/- 90000/-
500/- 40000/- 112500/-
1000/- 80000/- 2,25,000/-
Nominee selection:
The depositor may nominate single or multiple person of hie account. In case of multiple people
being nominee then percentage of each nominee must be mentioned.
In case death of the nominee the depositor may change the nominee by providing notice to the
bank.
Automatic close of the account:
If the depositor fails to deposit 3 (three) installments consecutively before completion of 5 years
of the account then the account will be closed and profit will be applied as per Mudaraba Savings
Deposit rate.
Others:
1. a. The depositor must deposit the installment by cash or cheque within 15th day of each month.
In case of 15th day being govt holiday then the amount can be deposited in the next working day.
2. b. In case of clearing cheque is not collected within 15th day then the depositor will be treated
as defaulter for that month.
3. c. The amount and duration of the scheme will not be changed.
4. d. The account can be transferred from one branch to another by a written application
mentioning the actual reason of transferring.
5. e. The depositor can close the account any time with a service charge of Tk. 25.00.
6. f. VAT, TAX as applicable by Govt must be borne by the depositor.
7. g. The bank reserves the right to add or alter any or all the rules governing MSDPS and such
altered or additional rules shall be immediately thereafter be deemed to be binding on all
depositors.
V. Mudaraba education saving scheme
Education expenditure especially for higher studies is increasing day by day. In many cases
children loses the chance of education as their guardians become unable to adjust with the
expenditure. But if proper financial planning is adopted earlier then it is easier for the parents to
bear the expenses.
For these reasons SIBL has introduced Education Savings Scheme, which is based on Shariah
Principles. This scheme would enable the our parents to bear childs educational expenses in a
planned manner.
General Rules & Regulations of Mudaraba Education Savings Scheme:
1. a. Any amount of Tk. 25,000/- or multiple is accepted in this scheme.
2. b. After maturity the amount can been cashed at a time or can be taken for the next 6 (Six)
years of maturity as mentioned in the following table:
3. c. The abovementioned maturity amount may differ due to the annual profit rate achieved by
the Bank. The depositor will get more or less depending on the profit rate.
4. d. For the above mentioned reason the depositor may get more or less amount of monthly
allowance also.
5. e. The depositor will get a receipt on the deposited amount.
6. f. In order to receive the monthly education allowance the depositor will have to submit all the
Receipts duly discharged and proper instruction must be provided in writing to nominate a person
for receiving the allowance.
7. g. The instrument cannot been cashed before maturity. In case of emergency if the depositor
wants to en cash before maturity the following rules will be applicable:
If the instrument is encashed before 7 years then Mudaraba Savings Deposit will be applied on
the deposited amount.
If the amount is en cashed after 7 years then amount will be given as per rules of 7 years
scheme and for the rest years Mudaraba Savings Deposit rate will be applied.
1. h. a. In case of Death of the depositor the amount payable will be paid to the nominee. If there
is no nominee by submitting Succession certificate the amount will be paid to legal successor of
the depositor.b. In case of death of the depositor if the nominee wants to take monthly allowance
for 6 six years then the instrument must be submitted to bank and should be duly discharged.
2. i. To issue a duplicate instrument the rules for issuing duplicate Term deposit will be
applicable.
3. j. TAX, VAT, Excise Duty as applicable by Government will have to be borne by the depositor.
4. k. Bank authority has the authority to change/amend the rules and regulations regarding the
scheme as and when required and the depositor must abide by the rules.
VI. Mudaraba bashastan savings scheme
Housing has become one of the most fundamental needs of human civilization. But in this early
20th century most of the people of Bangladesh are lacking to fulfill this basic need. As a follower
of Islamic Shariah, Social Islami Bank Ltd focuses forward to help people to fulfill this basic need.
Main features of this scheme:
1. a. The applicant has to fill the application form duly.
2. b. An amount of Tk. 500/-, 1000/-, 1500/-, 2000/- or any amount multiple can be deposited
under this scheme.
3. c. The depositor will enjoy earnings from investments under Islami Shariah based Mudaraba
rules.
4. d. As per rules of Islami banking the actual amount may vary from the estimated amount.
5. e. In case of failing of 3 (Three) consecutive installments the account will be closed. In such
cases profit will be given as per savings account rate, but no profit will be given if the account is
closed within 6(Six) months.
6. f. The account holder may choose any installment size on account opening, which cannot be
changed later.
7. g. Installment must be deposited within first 15 day of the month. Any amount deposited as
advance installment is always welcome.
8. h. The scheme is 15 years long and if the depositor intends to withdraw the amount then profit
will be given as per savings rate.
9. i. TAX, Yearly excise duty etc applicable on the profit will be borne by the depositor.
10. j. In case of change of address the Bank should be notified immediately.
11. k. An account in the name of under-aged person can be opened under this scheme.
12. l. After successful continuation of the scheme for 5 years the depositor may take up to 80%
loan of the deposited amount.
13. m. After successful completion house building loan facility from the bank may be considered by
the bank authority.
14. n. The Bank retains the authority to change, modify, rectify or cancel the rules regarding
Bashthan Savings scheme and the account holder must abide by the decision.
15. o. Income tax imposed on the earnings from the deposited amount should be deducted from
depositors account.
VII. Al Wadiah current deposit
1. a. ALWADIAH Current Deposit A/Cs are opened on proper introduction with minimum initial
deposit fixed by the Bank.
2. b. ALWADIAH Deposit is accepted on ALWADIAH principles which mean al Amanah with
permission to use. According to this principle Bank can use the fund of the account along with
other funds as per Shariah at banks own risk. Account holder(s) will not share any profit/loss.
3. c. The Law and regulation of Bangladesh, usual customs and procedures common to banks in
Bangladesh including Islamic Banking Principles shall apply to and govern the conduct of account
opened with the Bank.
4. d. Withdrawal can be made only through cheques issued by the bank.
5. e. The A/c. holder(s) shall preserve the cheque book with utmost care so that it might not be
lost or stolen. For any misappropriation taken place through any such stolen or lost cheque, the
Bank shall not be held responsible.
6. f. The depositor shall take back the pay-in-slip after deposit of any money or cheques etc.
clearly specifying the number and title of account in the slip. All cheques, DD/PO etc shall be
crossed before deposit.
7. g. Bankers shall note Stop payment of the account holder with due care. Payment of any such
cheque, the Bank shall not be held responsible.
8. h. Any change in the address of the depositor should be immediately communicated to the
bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters,
remittances etc sent through Post office and other agents.
9. i. Bank makes entry in the account with due care. However, for any wrong entry, the Bank
reserves the right for adjustment/correction and no responsibility can be accepted by the bank for
any loss caused by the caused by the account holder due to such inadvertent/wrong entry passed
by the Banker.
10. j. The Bank reserves the right to close any account without notice and alter, add any or all of
the rules and such altered/additional rules shall immediately thereafter be deemed to be binding on
the account holder.
VIII. Mudaraba savings deposit
To open a Mudaraba Savings Deposit account in our Bank the following rules and regulations are
applied:
1. a. Mudaraba i.e. Deposit of one party and on the basis of operation by another party this
deposit is taken.
2. b. By providing Introducer of the account as required by the bank and by depositing a minimum
amount any depositor or multiple depositor can open single or joint account. Any educational
institute, Club, Association or Social institutes can open this account.
3. c. The bank may merge amount collected through this deposit and may invest in any shariah
allowed investments.
4. d. After determining the annual profit/loss the depositor will get his part of profit.
5. e. In case of balance declining below bank stipulated margin in any month profit shall not be
provided for that month.
6. f. Any amount can be deposited in any working hour but for applying profit the lowest amount
from 6th day till the last day of the month will be taken as the deposit of that month.
7. g. Amount must be withdrawn only by bank issued instruments like cheques.
8. h. Amount can be withdrawn Twice a week but highest 4 times a month. One fourth of the
deposited amount or Tk. 2000/-, the lowest can be withdrawn without notice. If any amount
exceeding the above is withdrawn without providing 07 days prior notice then no profit will be
applied for that month.
9. i. If an account is closed before the declaration of current years profit rate then the depositor
will have to take profit as per previous years declared profit rate.
10. j. The Bank has the right to deny opening any account or can close down any existing with
showing any reason.
11. k. The bank operates the client accounts with utmost attention but still if any miscalculation
occurs the bank holds the right to make adjustments and rectify the problems. But in this situation
if any miscreants occur which is caused by the client the bank will not be hold liable for that.
12. l. The Bank may change / amend / rectify any rules and regulations of this account and the
client must abide by the rules.
13. m. The depositor by will may contribute a minimal percentage to his selected Social Development
works.
IX. Mudaraba term deposit
Mudaraba Term Deposits are accepted by the bank with a sum of Tk. 5000 or above (multiple of
1000) from individuals (single and joint), firms (propietorship/partnership), limited companies,
autonomous bodies, charitable institutions, association, educational institution, local bodies,
trusts, etc, against issuance of non transferable receipts in acknowledgement of MTD account
may be opened in the names of minors jointly with their guardians, for example :
Received from Mr. X Guardian of Mister/Miss. (Minor)
1. a. The mudaraba term deposits are accepted for periods of 12, 24, 36 months. Weightage on
the rate of return is given to deposits of longer maturity.
2. b. The Bank reserves the right to invest the funds received in mudaraba term deposit accounts,
in its sole judgement, in any interest-free Halal business it deems fit.
3. c. Mudaraba term deposit account holder will share the profit of investment with Social Islami
Bank Ltd, at the rate declared by the bank from time to time. Any loss which cannot be covered by
the investment loss offsetting reserve will be adjusted from Mudaraba fund and in that case the
bank shall not take any remuneration for the service rendered in managing the fund.
4. d. The profit earned on Mudaraba Term Deposit account will be credited as determined by the
bank as its sole direction on the basis of its net working results at the end of the year, within a
reasonable time from the date of the close of the books of accounts of the bank. The banks
decision in this respect will be final & binding on the Mudaraba Term depositors. If the Mudaraba
Term Deposit account is closed before declaration of profit of current year, the depositor shall
accept profit at the rate declared in the preceding year. In that case, both the bank & the depositor
will relinquish their claim on difference amount of profit, which may accrue at the close of the year.
5. e. The account holder is not allowed to withdraw the amount before maturity date. But on
obtaining the Banks prior consent the depositor(s) may withdraw the deposit before maturity
without any profit i.e. no profit no loss basis.
6. f. MTD account holder may withdraw the profit amount annually if he so desires on condition
the final adjustment. If needed, will be made at the end of the year. MTD account holder will give
an undertaking to that effect.
7. g. If the profit amount is not withdrawn it will automatically be added to the principal amount
annually and the entire amount will earn profit/loss.
8. h. MTDR is not transferable instrument & as such it cannot be endorsed in favor of others.
9. i. The MTDR should be preserved properly. In case of loss, the account holder should notify
the issuing branch immediately by quickest possible means so that the bank can take care of.
10. j. Matured deposit if not encashed within one month of maturity, the deposit shall automatically
be renewed for the period it kept before.
11. k. Any change in the address of the depositor should be immediately communicated to the
bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters,
remittances etc sent through Post office and other agents.
12. l. The bank retains the right of refusing to accept any deposit from any person in MTD account
without assigning any reason.
13. m. The bank reserves the right to add or alter any or all the rules governing this scheme and
such altered or additional rules shall be immediately thereafter be deemed to be binding on all
depositors.
Deposit Rate
Mudaraba Term Deposit Receipt (Shacsondo Protidin)
01 Months (Below one Crore)
12.5
12.5
03 Months (one Crore and above)
12.5
12.5
12.5
12.5
12.5
12.5
12.5
12.5
Mudaraba Notice Deposit A/C
1 crore to below 25 crore
3.00
Below 1 crore
2.75
3.25
3.50
50 crore to above
3.50
Shopner Shiri
2 years (monthly Installment)
3750
2360
1260
470
Mudaraba Savings Deposit 3.50
Mudaraba Scheme Deposit
Cash Waqf
10.00
Mudaraba Hajj Savings Deposit
10.00
Mudaraba Monthly Savings Scheme
10.00
Mudaraba Bashsthan Savings Scheme
10.00
Mudaraba Special Deposit Pension Scheme (General) for 3 Years (Sonali Din)
11.00
Mudaraba Monthly Profit Deposit Scheme
12.5
Mudaraba Millionaire Savings Scheme
10
Mudaraba Education Deposit Scheme
10
Mudaraba Lakhopati Deposit Scheme
11
Mudaraba Special Deposit Pension Scheme (Garments Worker) for 3 Years (Sonali Din)
11.50
Mudaraba Double Benefit Deposit Scheme
12 to 12.25
Mudaraba Marriage Savings Scheme
11
Mudaraba Mohorana Savings A/C (5 Years)
11
Mudaraba Mohorana Savings A/C (10 Years)
11
Mudaraba Special Deposit Pension Scheme(General) for 5 Years (Sonali Din)
11.00
Mudaraba Special Deposit Pension Scheme(Garments Worker) for 5 Years (Sonali Din)
11.50
Mudaraba Special Deposit Pension Scheme(General) for 10 Years (Sonali Din)
11.00
Mudaraba Special Deposit Pension Scheme(Garments Worker) for 10 Years (Sonali Din)
11.50

Sonali Din
Mudaraba Special Deposit Pension Scheme (General) for 3 Years
11
Mudaraba Special Deposit Pension Scheme (Garments Worker) for 3 Years
11.5
Mudaraba Special Deposit Pension Scheme(General) for 5 Years
11
Mudaraba Special Deposit Pension Scheme(Garments Worker)
11.5
Mudaraba Special Deposit Pension Scheme(General) for 10 Years
11
Mudaraba Special Deposit Pension Scheme(Garments Worker) for 10 Years
11.5Somridar Sophan
Mudaraba Double Benefit Deposit Scheme (6 Years)
12.5SUBORNO REKHA
SUBORNO REKHA PENSION SCHEMES(3 years)
12.5
12.5
12.5SHABUJ SHAYONNAYA
SHABUJ SHAYONNAYA PENSION SCHEMES (10 YEARS)
12.5
12.5
12.5SUBORNO LATA
SUBORNO LATA DEPOSIT SCHEMES (3 YEARS)
12.5SHABUJ CHAYA
SHABUJ CHAYA DEPOSIT SCHEMES (3 YEARS)
12.5

BILLS AND CLEARING SECTION
SIBL foreign exchange branch performs the bill clearing function through Local office. SIBL Local
office acts as the agent of all SIBL branches for the clearing house of the Bangladesh Bank.
There are two types of cheque which are-
1. Inward clearing cheque
2. Outward clearing cheque.
Inward Cheques:
Inward cheques are those ones drawn the respective branch which have been presented another
banks and will be cleared / honored through the clearing house of Bangladesh Bank. For
example the cheque drawn on SIBL Local Office Br, then the cheque is called inward cheque of
SIBL Local Office Br,
Accounting treatment:
Customers A/C
Debit.
SIBL General A/c
Credit
Outward Cheques:
Outward cheques are those ones drawn on other bank branches which are presented on the
concerned branch for collection through clearing house of Bangladesh Bank. These cheques are
called outward cheques. For example, the cheque drawn on Mercantile Bank LTD, Kawran Bazar
Br has been presented on SIBL Foreign Exchange Br. This cheque is called the outward cheque
of SIBL Foreign Exchange. Hence it is said that the cheque which is the inward cheque of one
bank is the outward cheque of another bank.
Outward Bills for Collection (OBC)
By OBC, we mean that those cheques drawn on other banks which are not within the same
clearing house. Officer gives OBC seal on this type of cheques and later sends a letter to the
manager of the branch of the some bank located in the branch on which cheque has been drawn.
After collection of that bill branch advises the concerned branch in which cheques has been
presented to credit the customer account through Inter Branch Credit Advice (IBCA).In absence
of the branch of the same bank, officer sends letter to manager of the bank on which the cheques
is drawn. That bank will send pay order in the name of the branch. This is the procedure of OBC
mechanism.
Clearing
The scheduled banks clear the cheques drawn upon one another through the clearinghouse.
SIBL is a scheduled Bank. According to the Article 37 (2) of Bangladesh Bank Order, 1972, the
banks which are the member of the clearinghouse are called as Scheduled Banks. This is an
arrangement by the central bank where every day the representative of the member banks
gathers to clear the cheques. The place where the banks meet and settle their dues is called the
clearinghouse. The clearinghouse sits for two times a working day. The SIBL Local Office Br
sends the instruments through Inter Branch Debit Advice (I.B.D.A). SIBL Local Office acts as an
agent in this case. For this, Local Office branch gives the following entries,
SIBL General A/C (Local Office Br) Dr.
Customers A/CCr.
If the instrument is dishonored, the instrument is returned to the Local Office branch through
I.B.D.A. along with the following entries,
Customers A/CDr.
SIBL General A/CCr.
Receiving Cheques for Collection
In SIBL, cheques of its customers are received for collection from other banks. In case
of receiving cheques, following points should be checked very carefully-The cheques should not
carry a date older than the receiving date for more than 6 months. In that case it will be a stale
cheque and it will not be allowed for collection. Again the date of the cheque should not be more
than 1 days forward than the receiving date. a. The amount in figures and words in both sides of
the pay-in-slip should be same and it should also be same with the amount mentioned in figures
and words in the cheque. b. The name mentioned in the cheque should be some in both sides of
the pay-in-slip and it should be the same with the name mentioned in the cheque. c. The cheque
must be crossed.
Cheque and Crossing
A Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable
otherwise than on demand. [According to section-6, Negotiable Instrument Act,1881]. A cheque
may be classified into:
a) An open cheque which can be presented for payment by the holder at the counter of the
drawers bank.
b) A crossed cheque which can be paid only through a collecting banker. Crossing cheque: A
cheque is said to be crossed when two transverse parallel lines with or without any words are
drawn across the face. Crossing may be general, special or restrictive.
Issuing Cheque Book
Following procedures are maintained by SIBL, Local Office for issuing checkbook.
(a) Firstly the customer will fill up the check requisition form.
(b) The leaves of the checkbook under issue are counted to ensure that all the leaves and the
blank requisition slip are intact.
(c) The officer writes A/C number and branch name on all the leaves of the checkbook.
(d) The name and the A/C number of the customer are than entered in the checkbook register
against the particular checkbook series.
(e) Then the officer sightseer, checkbook, and requisition slip
(f) Lastly the checkbook is handed over to the customer after taking acknowledgement on
requisition slip.
REMITTANCE OF FUNDS
Remittance of funds is ancillary services of SIBL. It aids to remit fund from one place to another
place on behalf of its customers as well as non- customers of bank. SIBL has its branches in the
major cities of the country and therefore, it serves as one of the best mediums for remittance of
funds from one place to another. The main instruments used by SIBL, Local Office Br for
remittance of funds.
-Pay Order/ Bankers check.
-Demand Draft.
-Telegraphic Transfer.
Banks cheque/ Pay order
The pay order is an instrument issued by bank, instructing itself a certain amount of money
mentioned in the instrument taking amount of money and commission when it is presented in
bank. Only the branch of the bank that has issued it will make the payment of pay order. The
bankers cheque must become the branch for payment wherever it is presented.
Issuing of Pay Order
The procedures for issuing a Pay Order are as follows:
1. Deposit money by the customer along with application form.
2. Give necessary entry in the bills payable (Pay Order) register where payees name, date, PO
no, etc is mentioned.
3. Prepared the instrument.
4. After scrutinizing and approval of the instrument by the authority, it is delivered to customer.
Signature of customer is taken on the counterpart.
Cancellation of a Pay Order
If a buyer wants to cancel it, he should submit a letter of instrument in this regard and also return
the instrument.
Bank Draft
The person intending to remit the money through a pay order has to deposit the money to be
remitted with the commission which the banker charges for its services. The amount
of commission depends on the amount to be remitted. On issue of the pay order, the remitter
does not remain a party to the instrument
i) Drawer branch
ii) Drawee branch
iii) Payee.
This is treated as the current liability of the bank as the banker on the presentation of the
instrument should pay the money. The banker event on receiving instructions from the remitter
cannot stop the payment of the instrument. Stop payment can be done in the following cases:
i) Loss of draft before endorsement: in this case, Draft reported to be lost, payees
endorsement requires verification is marked.
ii) Loss of draft after endorsement: In this case, the branch first satisfies itself about the
claimant and the endorsement in his favor.
Charges
A commission of 0.15% is taken on the draft value & Tk.50/= is taken as postal charge.
Mail or Telex Transfer (TT)
Telex transfer is another widely used mode for remittances of funds. In case of telex transfer the
message for transfer of funds is communicated through tested telex. SIBL generally recovers
from the telex charges in addition to the usual service charges.
Issuing of TT
SIBL follows the following procedures:
i) The customer deposits money with SIBL to be sent.
ii) The customer obtains a cash memo containing TT serial number.
iii) TT serial number, notifying part name is mentioned in the telex message.
iv) The Telex Department confirms transmission of the telex.
Accounting entries for TT
Cash A/C, Clients A/C Dr.
SIBL General A/C (Local Office branch) Cr.
Procedures for the incoming TT
After receiving the telex, it is authenticated by test. TT Serial number is verified by the TT in-
Concern branch register. The following entries are given in the vouchers,-
SIBL General A/C (Local Office branch) Dr.
Clients A/CCr.
Tk. 50/= is taken as postal charge. The minimum commission is Tk. 50/= or o.15% of the amount
whichever is higher.
CASH SECTION
The cash section of any branch plays very significant role in general banking department.
Because, it deals with most liquid assets The SIBL Local Office Br has an equipped cash section.
This section receives cash from depositors and pay cash against cheque, draft, PO, and pay in
slip over the counter.
Receiving Cash
Any people who want to deposit money will fill up the deposit slip and give the form along with the
money to the cash officer over the counter. The cash officer counts the cash and compares with
the figure written in the deposit slip. Then he put his signature on the slip along with the cash
received seal and records in the cash receive register book against A/C number. At the end of
the procedure, the cash officer passes the deposit slip to the counter section for posting purpose
and delivers the duplicate slip to the clients.
Account treatment
Particulars Dr./Cr.
Cash A/C Dr.
Customers A/C Cr.
Disbursing Cash
The drawn who wants to receive money against cheque comes to the payment counter and
presents his cheque to the officer. He verifies the following information-
a) Date of the cheque
b) Signature of the A/C hold
c) Material alteration
d) Whether the cheque is crossed or not
e) Whether the cheque is endorsed or not
f) Whether the amount in figure and in word correspondent or not
Then he checks the cheque from computer for further verification. Here the following information
is checked:
1) Whether there is sufficient balance or not
2) Whether there is stop payment instruction or not
3) Whether there is any legal obstruction (Garnishee Order) or not
After checking everything, if all are in order the cash officer gives amount to the hold and records
in the paid register.
Account treatment:
Particulars Dr./Cr.
Customers A/C Dr.
Cash A/C Cr.
The cash section of SIBL deals with all types of negotiable instruments, cash and other
instruments and treated as a sensitive section of the bank. It includes the vault which issued as
the store of cash instruments. The vault is insured up to Tk. 60 laces. If the cash stock goes
beyond this limit, the excess cash is then transferred to Head Office. When the excess cash is
transferred to SIBL Head Office. The cash officer issues IBDA.
Account treatment:
SIBL General A/C Dr.
Cash A/C Cr.
When cash is brought from SIBL Head Office then,
Account treatment:
Cash A/C- Dr.
SIBL General A/C Cr.
LOCKER SERVICE
SIBL Local Office Br is providing facility of locker service for the purpose of safeguarding the
valuable property of customers. The person or the organization that has any account in bank
branch can enjoy this service. They can keep their valuable assets in bankers custody.
Customers have right to look after with a key of their individual locker provided by bank. SIBL
maintains the following types of lockers:
Large locker.
Medium locker.
Small locker.
For enjoying this service, clients have to give charge yearly Tk. 1500, Tk. 1250 and Tk.700 for
large, medium and small locker respectively.
CLOSING OF AN ACCOUNT
For two reasons, one can be closed. One is by banker and other is by the customer.
By banker:
If any customer doesnt maintain any transaction within six years and the A/C balance becomes
lower than the minimum balance, banker has the right to close an A/C.
By customer:
If the customer wants to close his A/C, he writes an application to the manager urging him to
close his A/C. Different procedures are followed in cash of different types of A/C to close. Fixed
deposit A/C is closed after the termination of the period. Closing process for current & savings
A/C:
1. Receiving customers application the officer verifies the balance of the A/C.
2. He then calculates interest and other charges accumulated on the A/C.
3. If it bears a credit balance, the officer writes advice voucher. He gives necessary accounting
entries post to accounts section.
4. The balance is returned to the customer. And lastly the A/C is closed.
But in practice, normally the customers dont close A/C willingly. At times, customers dont
maintain any transaction for long time. Is this situation at first, the A/C becomes dormant and
ultimately it is closed by the bank.

Part 2

FOREIGN EXCHANGE BANKING AREA
Foreign trade constitutes a sizable portion of international transactions of a country. Payment
received for exports and made for imports form a substantial part of its remittances from and to
other countries. In our country a major share of the current balance of payments is made up of
exports and imports of merchandise on private and government account. Thus, trade is the most
important factor giving rise to payments between countries. Foreign trade is a type of
specialization, which like other forms of specialization increases productive efficiency and
standard of living of the people of the country concerned.
FOREIGN EXCHANGE
Foreign trades are mainly of two types. These two are: Import Trade & Export Trade. The
import and export trade of Bangladeshis is controlled under the Import and Export Control Act,
1950. In normal sense the imports involve outward remittances and the export involves inward
remittances. The terms and conditions of contracts between the importers and the exporters and
the eventual remittances in foreign countries are subject to such restrictions and formalities as
are laid down from time to time by the Import and Export Control and Exchange control in their
respective jurisdiction which the importers and exporters must comply with.
IMPORT FINANCE
Import of goods into Bangladesh is regulated by the ministry of commerce in terms of the import
and export control act 1950, with import policy orders and public notice issued from time to time
by CCI and E. it also follows the guidance of foreign exchange circular of Bangladesh bank.
Controls the financial aspects, such as payments imports, rates of exchange, methods of
remittances against imports, under the provision of F.E.R. act 1947.
All AD branches shall have to comply the instructions of head office and principle of Islamic
shariah for importation of goods into Bangladesh.
Sources of finance and items permissible for import against:
1. Cash foreign exchange
2. Foreign aids/grants/barter and under
Import may be defined as bringing of visible item to the country from abroad through letter of
credit or the authorization from paying foreign currency to that exporting country.
1. Classification of importers:
1. a. Personal importers (User): they need no registration form CCI & E. For import up to USD
5000/= needs no permission. For above USD 5000/= permission has to be taken form CCI & E.
2. b. Commercial importer: those who import the goods to sell out the same to the market for
earning profit is called commercial importer.
3. c. Industrial importer: those who import the goods for their industrial consumption is called
industrial importer.
2. Registration of importer:
In terms of the importers, exporters and indenter (registration order 1981) no person can import
goods Bangladesh unless registered with the CCI & E or exempted from the provision of the said
order. Personal user needs no registration. They may import beyond USD 5000/= with the
permission from CCI & E.
Persons exempted from registration:
1. Government departments.
2. Local authorities an statutory bodies.
3. Recognized educational institutions.
4. Hospitals.
5. Imports of goods, which does not involve remittance of foreign exchange.
6. Reading materials or medicine imported for personal use within permissible limit given in the policy
in force.
7. Capital machineries and spare parts for new industry.
The interested persons/institutions submit application to the CCI & E along with the following
papers for registration as importer.
1. Nationality certificate.
2. Certificates from the chamber of commerce and industry/registered trade association
3. Bank solvency certificate
4. Any order documents required by CCI & E
3. Import formalities and procedures:
Letter of credit: credit means any arrangement, however named or described, that is irrevocable
and thereby constitutes and undertaking of the issuing bank to honor a complying presentation.
Import may be done without letter of credit (L/C) against LCAF up to a certain amount, fixed by
the CCI & E from time to time. But in general import must be done through L/C to be issued by an
AD bank.
1. The AD branches should open L/C only on behalf of their own customers who maintain A/Cs with
them and are known to be participating in trade.
2. It is not permissible to open L/C for imports in favour of a beneficiary in countries form where
imports are banned.
3. L/Cs covering imports against valid LCA form are required to be opened within the period
prescribed by the CCI & E in the import policy order or through public notice issued from time to
time.
4. Under the existing instructions issued by board of investment(BOI), L/Cs for import of merchandise
by the investors are required to be opened within six months formthe date of receipt of permission
letter issued by the director general, BOI (industries), govt. of Bangladesh.
4. Letter of credit and its classification:
A letter of credit is a conditional undertaking of payment by the issuing bank to the beneficiary. In
consideration of source of payment there are mainly two types of L/C, Sight L/C and deferred
L/C. if a third bank adds their undertaking for payment in addition to the undertaking of issuing
bank then the L/C is called add confirmed L/C.
Types of L/Cs are:
1. Irrevocable
2. Revocable
3. Confirmed
4. Transferable
5. Back to back
5. Concern partys to an L/C
i) Importer/applicant/buyer
ii) Exporter/beneficiary/supplier
iii) Issuing bank/opening bank
iv) Advising bank/notifying bank
v) Negotiating bank
vi) Reimbursement bank
vii) Confirming bank

6. Application for Import:
a) A valid importer will submit the following paper/documents to his bank for opening L/C.
i. L/C application form duly signed by the importer; with adhesive stamp for tk.
150/-
ii. Indent / proforma invoice
iii. Insurance cover note with money receipt
iv. LCAF duly filled in & signed by the importer
v. Membership certificate form chamber of commerce / trade association
vi. TIN certificate and up to date tax payment declaration
vii. Charge documents, including Musharaka/ Murabaha agreement
viii. IMP
ix. IRC
x. VAT certificate
xi. Trade license
xii. Memorandum & articles of association
xiii. Partnership deed
xiv. Resolution of the board
xv. Photograpn
xvi. Others, if any
b) The following issues are to be checked carefully:
i. Checking of L/C application an verification of the signature of the importer.
ii. Checking of IMP form and verification of signature of the importer.
iii. Checking of the renewal of IRC and its permissible limit.
iv. Goods must be importable an permissible by the import policy against Pro
forma invoice/indent.
v. Pro forma invoice/indent must be accepted by the importer
vi. In case of indent, Bangladesh Bank permission for indenting should be
obtained.
vii. Proper H.S. code No. should be incorporated in LCAF.
viii. Insurance policy should cover all the required clauses and premium paid
certificate/money receipt should be along with the policy.
ix. Business experience of the importer should be counted.
x. Price and market demand of the goods must be verified.
xi. Credit report of the supplier should be obtained prior to opening L/C for indent
tk. 5 lac & above and proforma invoice tk. 2 lac and above.
c) Authentication/Registration of LCAF:
When the importer submits LCAF (Letter of Credit Authorization Form) with other papers to the
bank to open L/C, bank will authenticate the LCAF, confirming the following:
i. IRC is valid, renewal fee paid (if required)
ii. Item to be imported is eligible as per import policy/Pass book.
iii. LCAF is duly filled in & signed by the importer
iv. H.S> code to be inserted into LCAF
The LCA forms are required to be properly filled in and duly signed by the importer in presence of
concerned official of the branch. The branch is required to keep proper records of the stocks and
issuance of each set of LCA form.
LCAFs remain valid for remittance for 09 (nine) months in case of commercial items and 17
months in case of capita machineries & spares.
d) Distribution of LCAF:
Original Exchange control copy
Duplicate Custom purpose copy
Triplicate CCI&Es office
Quadruplicate Statistical copy
Quintuplicate Registration unit of Bangladesh bank
Last copy Office copy of the bank

e) Sanctioning for opening L/C:
Upon receipt of the application dealing officer will issue office note stating the following:
a) Whether the client has valid head office sanctioned limit
b) Whether the proposal is within the limit or within the power of branch incumbent
c) The item to be imported is permissible
d) Whether credit report of the supplier obtained if the value of the credit exceeds tk. 200000/-
against proforma invoices issued directly by foreign suppliers and tk. 500000/- against indents
issued by the local agents of the suppliers.
e) Market report of the goods to be obtained
f) Permission from Ministry of Commerce in case of CIF value.
g) Competitive price of goods to be taken.
h) The indent bears the IRC number & registration number of indenter.
i) The indent bears the signature of agent & importer.
If the bank satisfies then it will issue a letter of credit on behalf of the importer, to the beneficiary,
through an Agent/Correspondent bank in suppliers country.
L/C may be sent by airmail duly signed by authorized officials or by telex authenticated by test
number or SWIFT.
The following necessary clauses should be incorporated in the L/C at the time of issuance of L/C:
i. Name and address of the applicant and beneficiary.
ii. TIN of applicant
iii. Tenor (sight/deferred)
iv. Shipment date
v. Validity of the L/C with place of expiry (presentation/negotiation period)
vi. Negotiation( restricted/freely)
vii. Amount of L/C in word and figure
viii. Reimbursement/payment clause
ix. Description of goods with quantity and unit price must be quoted in the L/C
x. Bill of lading / AWB/TR must be consigned to the order of L/C issuing bank.
xi. Insurance clause
xii. PSI clause should be incorporated in the L/C for taxable items and as per
import policy/SRO.
xiii. Requirement of the invoice, packing list, CO and other necessary
papers/documents/certificate as per import policy/customers requirements should be
incorporated in the L/C.
xiv. Charges on account of beneficiary/applicant should be mentioned
xv. Without/with confirmation of AD confirming bank.
xvi. The L/C should be advised/transmitted through the correspondent bank of the
L/C issuing bank or to beneficiarys bank subject to UCPDC-600 ICC publication-2007
f) Issuing bank will pass the folloing voucher at the time of opening cash L/C:
a) Passing of contra liability voucher:
Dr. Customers liability for L/C (cash) (foreign/local) Tk.
Cr. Bankers liability for L/C (cash) (foreign/local) Tk.
b) Realization of margin and charge:
Dr. Partys A/C Tk.
Cr. Sundry deposit A/C margin on L/C (Cash) Tk.
Cr. Income A/C commission on L/C (Cash) Tk.
Cr. Income A/C SWIFT/Telex/Currier service etc. Tk.
Cr. Others, stamp if any Tk.
g) Receiving, security, lodgment and retirement of import document:
The AD branch will carefully look into the following main points of each of the documents keeping
in view the terms of L/C and it is observed that following are the common discrepancies of the
documents:
General
i. Late shipment effected
ii. Late presentation of documents
iii. Shipment made prior to issuance of L/C or time stipulated in the L/C
iv. L/C expired
v. L/C over drawn
vi. Partial or transshipment effected in the contrary to the L/C terms.
Bill of exchange:
i. Not properly drawn and signed by gthe beneficiary as per L/C term
ii. Amount of bill of exchange differs with that of invoice
iii. The amount drawn does exceed the amount available under the credit
iv. Not drawn on L/C issuing bank
v. Tenor of bill of exchange not identical with L/C.
Invoice:
i. Not issued by the beneficiary
ii. Not signed by the beneficiary
iii. Not made out in the name of the applicant
iv. Description of goods, price, and quantity not correspond with the L/C.
v. Required number of invoice is not submitted.
vi. The relevant LCA form number, IRC number of importer along with the
registration number of indenter with Bangladesh bank, are correctly incorporated in the invoice.
Packing list:
i. Gross wet, net wet, and measurement, number of cartons/packaged differ
with those of B/L.
ii. Not marked Original
Bill of lading/AWB:
i. Full set of B/L not submitted
ii. B/L not drawn or endorsed to the order of issuing bank/negotiating bank.
iii. Shipped on Board, freight prepaid, etc notifications are not marked.
iv. Name and address of the notify party not mentioned.
v. B/L does not indicate the name of carrier or master or on whose behalf the
agent is signing the B/L.
vi. Short form, charter party B/L.
vii. Description of goods in B/L does not agree with that of invoice
viii. Loaded on deck
ix. The bill of lading is stale.
Other documents:
i. Weight list
ii. Certificate of origin
iii. Pre shipment inspection certificate
iv. Certificate to the effect that shipment/ Transshipment has not been made on
the port of a country expressly prohibited in the L/C.
EXPORT FINANCE
There is an unfavorable trade balance in our economy due to higher import and lower export. To
overcome the situation government has taken various steps to promote the export. In handling
export business we must follow the export trade control regulation and export policy issued by
Ministry of commerce form time to time.
Uniform customs and practice for documentary credit (UCPDC) issued by international chamber
of commerce is another guideline for import.
All AD branches shall have to comply the institutions of head office and principle of Islamic
Shariah for importation of goods into Bangladesh.
As a banker we may define export as sending of visible and invisible things outside the country
for sale through letter of credit or against firm contract in exchange of foreign exchange.
Export Policy 1997-2011
Target
1. To attain highest national growth by increasing export to regional and international markets;
2. To reduce gradually the gap between export and import expenditure;
3. To produce export commodity at a competitive price aimed at market retention and promotion;
4. To avail the opportunity to enter in liberalized and globalize Post-Uruguay Round International
Market;
5. To make goods exportable and more suitable for foreign markets by diversification and quality
improvement;
6. To establish backward linkage industry and services and identify higher value added goods;
7. To develop infrastructure for exports;
8. To create skilled manpower in export sector;
9. To upgrade the quality and grading of commodity to an internationally recognized level.
10. Providing adequate guidance to trade bodies, business organizations, business people and
related individuals in understanding the changing international trading system, etc.
The normal export mechanism is much like the procedure maintained in a typical import
mechanism. Whereas in case of import the party is the importer and the bank acts as the opener
of his credit, in case of export the party is the exporter and the bank acts as the negotiator of his
documents. In our country the most promising exporters are the garments industries. About 76%
of the total exports of our country are made by the garments sector. The underlying reason of
success of this sector in exports is the availability of the huge amount of cheap labor. But
because of inadequate supply of locally produced quality fabrics and accessories, we have to
import about 60% of the fabrics and accessories from abroad for use in the garments industry.
This is actually a time consuming and costly process for the garments sector. So considering the
significant contribution of the garments sector in the export trade the private commercial banks
have undertaken an especial arrangement to provide them with export finance, which is called
the foreign Back to Back Letter of credit (BTB).
1. Types of export:
Export must be done as under:
1. Export against L/C or firm contract
2. Export against advance payment
3. Export under consignment basis
2. The exporter must obtain export registration certificate (ERC) form the CCI & E. except
the following institution:
i. Government departments
ii. Recognized educational institutions
iii. Hospitals
iv. Statutory bodies or local authorities
3. General formalities of export:
i. No person can export any goods from Bangladesh unless he is duly registered as
an exporter with the CCI &E.
ii. Al export must be declared on the EXP form, which consists of 4 copies, except in
the following cases such as:
a) Bona fide trade samples up to the value prescribed in the export policy in force
b) Personal effects, whether accompanied of travelers.
c) Gift packets valued less than tk.50/-
a. Advising of Export L/C
The bank may issue a credit through SWIFT or by airmail.
Upon receipt of an Export L/C the banker should advise the same to the beneficiary or
beneficiarys bank on satisfaction of the apparent authenticity of the export L/C.
An exporter receive an Export L/C form any bank and submit the same to the Negotiation bank
upon receipt of an Export L/C from the exporter the Bankers should check the following before
permission of execution of export order or to open Bangladesh Bank L/C.
i. Status of issuing Bank of the Export L/C.
ii. L/C must be subject to UCPDC-600, ICC Publication-2007.
iii. Whether the L/C is advised, authenticated properly.
iv. Tenor( Sight/deferred), shipment date, Negotiation (restricted/freely),
presentation period and validity of the Export L/C with place of expiry.
v. Reimbursement/Payment clause.
vi. Amount of L/C in word and figure.
vii. Description of goods with quantity and unit price must be quoted n the L/C.
viii. Bill of lading must be consigned to the order of Negotiating Bank in Bangladesh
and AWB consigned to the L/C issuing Bank.
ix. Insurance clause must be in L/C
x. Inco term.
xi. Foreign commission, if any within 5%
xii. Export L/C should have validity period adequate to cover the time needed for
importation of raw material.
xiii. Bangladesh Bank (BB) L/C not exceed the admissible percentage of net FOB
value of the relative Export L/C (net FOB=Total L/C value-freight charge-insurance cost-foreign
Commission)
xiv. BB L/C shall be opened on up to 180 days deferred basis and interest shall not
exceed LIBOR or equivalent to the rate of the currency of the country.
xv. No BBL/C will be opened under Proceeds Realization Clause without prior
approval from Bangladesh Bank.
xvi. No BBL/C will be opened against Export L/C received under Barter/STA without
prior approval from Bangladesh Bank.
xvii. Other clause and condition of the L/C whether can be complied or not as per rule of
the state of the country.
If the bank satisfied then it will issue a letter of credit on behalf of the importer to the beneficiary,
through an Agent/Correspondent Bank in suppliers country.
L/C may be sent by Airmail duly signed by Authorized officials or by Telex authenticated by test
number or SWIFT.
b. Issuance of Export
Full particulars of the export form should be entered in the Export Register.
Bank will certify export form only ager confirming:
i. Arrangements made for realization of Export proceeds.
ii. Bona fides of the importer/consignees abroad.
iii. Arrangements have been made for receipt by authorized dealers of documents of
title to goods.
iv. The export has been signed by the exporter.
c. Distribution of Export form:
Original: Form custom Authority to Bangladesh Bank (FEPD) ager shipment of the goods.
Duplicate: from negotiating Bank to Bangladesh Bank ager negotiation along with one copy of
invoice within 14 days from the date of shipment.
Triplicate: From Negotiation Bank to Bangladesh Bank after realization of the proceeds of the
export bill.
Quadruplicate: retained by the negotiating Bank as an Office copy.
d. Negotiation/Collection of Documents:
After shipment of the goods the exporter shall submit export documents to Authorized Dealer for
negotiation of the same or to send the same on collection basis.
There is a time gap between export of the goods and realization of the proceeds. So exporter
may require finance in that period to continue his business. Confirming the following, bank may
purchase/negotiate the export documents.
1. Export documents comply the credit terms
2. Buyer is bonafide.
3. Partys past performance is satisfactory.
4. Any other security in case of export under contract
e. Security of Export Document:
The AD branch will carefully look into the following main points of each of the documents keeping
in view the terms of L/C and it is observed that the following are the common discrepancies of the
documents:
General:
i. Late shipment effected.
ii. Late presentation of documents.
iii. Shipment made prior to issuance of L/C or time stipulated in the L/C.
iv. L/C expired.
v. L/C over drawn.
vi. Partial or transshipment effected in the contrary to the L/C term.

Bill of Exchange:
i. Not properly drawn and signed by the beneficiary as per L/C term.
ii. Amount of bill of exchange differs with that of invoice.
iii. The amount drawn does exceed the amount available under the credit
iv. Not drawn on L/C issuing bank
v. Tenor of bill of exchange not identical with L/C
Invoice:
i. Not issued by the beneficiary
ii. Not signed by the beneficiary
iii. Not made out in the name of the applicant.
iv. Description of goods, price, and quantity not correspond with the L/C.
v. Required number of invoice is not submitted
vi. The relevant LCA form number, IRC number of importer along with the registration
number of indenter with Bangladesh Bank, are correctly incorporated in the invoice.
FOREIGN REMITTANCE
They are playing important role in the Foreign Remittance sector also. They have correspondent
relationship with almost all major 122 Banks of 109 countries of the world like Standard Chartered
Bank, American Express Bank Limited, HSBC, HBZ Finance, Mashreq Bank PSC, Dresdner
Bank AG and with local banks in Pakistan, India, Nepal and Bhutan etc with whom they have
advising, reimbursing and add confirming arrangement.
Visitors of our website can download our Foreign Currency Current Account (FCCA) Opening
Form from the Download Section and also can take a print of the Form in Legal Size Paper.
According to Foreign Exchange Regulation Act 1947, the commercial banks or the authorized
dealer who has the Bangladesh Bank authorization can do Foreign Exchange. According to this
Act, TC (Traveler Cheque), Drafts are included in Foreign Exchange. SIBL, Foreign Exchange
Branch provides its customer with the foreign remittance facilities by issuing Foreign Demand
Drafts, Traveler Cheque, Endorsing passport for cash etc.
Travelers Cheque
It is the safest way to carry money from one country to another. It can be change in any country
of the world. Even if the Traveler Cheque (TC) is lost then the holder of the T.C can inform it to
the bank and the bank will inform it to the agencies so that no one can en-cash the T.C while
issuing a Traveler Cheque (T.C) a signature is needed, so that no one can en-cash it except the
holder and also another signature is needed in encashment in front of the banker. So Traveler
Cheque (T.C) is the safest way to carry outside the home country. A customer is permitted to
endorse maximum US$ 3000 per year for travel in countries other than SAARC countries and
US$ 1000 for travel in SAARC countries. If SAARC countries are to be visited by road then
maximum US$ 500 can be endorsed per passport per year. At a time cash cannot be endorsed
over US$ 500.
Issue of Travelers Cheque
There are some requirements, which are to be fulfilled by the TC publisher:
1 .Passport holder himself to be present to issue TC purchasing.
2. The passport has to be a valid one.
3 .Air ticket has to be confirmed.
4. Steps involved in issue of TC:
5. After verifying all these documents, the customer as asked to fill up prescribed application
form.
6. In the application the customer states the amount he is willing to endorse and it is to be verified
that his required amount is within the stipulated amount.
7. Then the customer pays cash or by debiting hid account the Travelers Cheque is issued.
8. Endorsement is given on the passport and on the ticket. Customer fills up the Travel and
miscellaneous form.
9. Purchase application form is prepared and handed over to the purchaser along with the
Traveler Cheque.
10. Entry is given in three registers: Foreign Currency Issue Register, Travelers Cheque On
Hand Register and Foreign Currency In Hand Register.
Payment of Travelers Cheque
When a customer wants to encase his TC, he has to show his passport and it is to be verified
from the passport that he has traveled outside the country. Then
1. The TC will have to be scrutinized very strictly;
2. If everything in the TC is in order then the customer will be asked to give signature on the
place of Counter Signature;
3. If the signature agrees with the one in place of the signature of the holder then the payment
will be made through giving cash to the customer or crediting his A/c;
4. Travelers Cheque will be crossed and endorsement given on the back of the received TC.
Endorsement of Cash
Cash Foreign Currency can also be remitted through endorsement in the passport. In case of
endorsing cash on passport, the requirements are same as in case of travelers cheque. But the
only exception is that the passport holder is not required to be present by himself.
Foreign Currency Account
The accounts maintained in foreign currencies are known as foreign currency account. The
Authorized Dealers may open foreign currency accounts in the names of followings without prior
approval from Bangladesh Bank.
a) Bangladesh nationals residing abroad.
b) Foreign nationals residing in Bangladesh and also the foreign firms registered abroad and
operating in Bangladesh or abroad.
c) Foreign Missions and their expatriate employees.
Branches are mainly deals with two types of foreign currency accounts, namely:
a)Non-Resident Foreign Currency Deposit Account (NFCD).
b)Resident Foreign Currency Deposit Account (RFCD).
Non-Resident Foreign Currency Deposit Account (NFCD)
All nonresident Bangladesh nationals and persons of Bangladesh origin including those having
dual nationality and ordinarily residing abroad, may maintain interest bearing time deposit
accounts named Not-Resident Foreign Currency deposit (NFCD)Accounts with the Ads.
Eligible persons
a. Bangladesh nationals working and earning abroad.
b. Bangladesh nationals serving with Embassies /High Commission of Bangladesh in foreign
countries including officers /Staff of Govt. / Semi Govt. Autonomous/nationalized sector posted/
deputed abroad.
c. Shore staff posted abroad (Crew of BSC not entitled).
d. Foreign nationals and companies registered and /or incorporated abroad, institutional investors
and 100% (Hundred Percent) Foreign owned industrial unit of EPZ(Minimum Amount USD
25000/- or equivalent).
Resident Foreign Currency Deposit (RFCD)
Ordinary resident of Bangladesh may open and maintain Resident Foreign Currency Deposit
(RFCD) accounts with foreign exchange brought-in at the time of their return from travel abroad.
Any amount brought in with declaration to Custom Authorities inform FMJ and up to US$ 5000/-
brought in without any declaration can be credited to such accounts.
Deposit
The depositors must submit a declaration mentioning the date of return from abroad and the
amount of Foreign exchange brought in at the time of crediting to RFCD account to the effect that
Foreign exchange (i) is not a receipt against export of goods or services from Bangladesh (ii) is
not a commission due from abroad arising from business in Bangladesh.
INVESTMENT BANKING AREA
One of the core functions of commercial banks is to create the claim against individual borrower
or real the purpose of sanctioning credit. Bank grants loan in the form of different securities. By
the primary security, we mean the financial claim of holder against the real sector of economy. In
banking the sector, the financial claim of bank against issuer, (called investors, borrowers and
deficit units). This core function of a bank is performed by the investment department of the bank.
In this case, the relationship of bank and customer is that of the creditor and debtor.
PRODUCT OF INVESTMENT
I. Bai-Muazzal
Bai-Muajjal is a contract between Buyer and Seller under which the seller sells certain specific
goods ( permissible under Shariah and Law of the country ), to the Buyer at an agreed fixed price
payable at a certain fixed future date in lump sum or within a fixed period by fixed installments.
The seller may also sell the goods purchased by him as per order and specification of the Buyer.
This mode is applicable for working capital finance. In conventional Banks, the allow loan in the
from of cash credit against hypothecation of goods & collateral security.
II. HPSM
Hire purchase (participatory Ownership) is a special type of contract which has been developed
through practice. Actually it is a synthesis of three contracts:
Shirkatul Melk
Shirkat means partnership. Shirkatul Melk means participation in ownership. When two or more
persons supply equity, purchase an asset; own the same jointly, and share the benefit as per
agreement and bear the loss in proportion to their respective equity, the contract is called
Shirkatul Melk contract.
Ijarah
The term Ijarah has been derived from the Arabic words Ajr and Ujrat which means
consideration, return, wages or rent. This is really the exchange value or consideration, return,
wages, rent of services of an ASSET. Ijarah has been defined as a contract between two parties,
the Hiree and Hirer where the Hirer enjoys or reaps a specific service or benefit against a
specified consideration or rent from the asset owned by the Hiree. It is a hire agreement under
which a certain asset is hired out by the Hiree to a Hirer against fixed rent or rentals for a
specified period.
Sale
This is a sale contract between a buyer and a seller under which the ownership of certain goods
or asset is transferred by seller to the buyer against agreed upon price paid/ to be paid by the
buyer.
Thus in hire purchase (participatory ownership) mode both the bank and the client supply equity
in equal or unequal proportion for purchase of an asset like land, building, machinery, transport
etc. purchase the asset with that equity money, own the same jointly, share the benefit as per
agreement and bear the loss in proportion to their respective equity. The share, part or portion of
the asset owned by the bank is hired out to the client partner for a fixed rent per unit of time for a
fixed period. Lastly the bank sells and transfers the ownership of its share/part/portion to the
client against payment of price fixed for that part either gradually part by part or in lump sum
within the hired period after the expiry of the hire agreement.
III. Murabaha
Bai-Murabaha is a contract between a Buyer and Seller under which the Seller sells certain
specific goods permissible under Islamic Shariah and Law of the land to the Buyer at a cost plus
agreed profit payable in cash on any fixed future date in lump sum or by installments. The profit
marked-up may be fixed in lump-sum or in percentage of the cost price of the goods.
In case of Bai-Murabaha Banks procure the goods as per indent of the customer, retain it in its
custody and sell the same part by part or at a time to the client who gave indent for the goods.
This mode is applicable for working capital finance. In conventional Banks, they allow Loan
against pledge of goods against fixed rate of interest.
CLASSIFICATION OF INVESTMENT
Investment can be classified in to two types:
1. 1. Classified
i. Continuous loan: the loan accounts in which transactions may be
made within certain limit and have an expiry date for full adjustment will treated as continuous
loans. Examples are: Bai muajjal, murabaha.
Any continuous loan will be classified as:
1. A. Sub standard: if it is past due for 6 months or beyond but less than 9 months.
2. B. Doubtful: if it is past due/overdue for 9 months or beyond but less than 12 months.
3. C. Bad/loss: if it past due/ overdue for 12 months or beyond.
ii. Demand loan: The loans that become repayable on demand by the
bank will be treated as demand loans. If any contingent or any other liabilities are turned to forced
loans (i.e. without any prior approval as regular loan) those too will be treated as demand loans.
Such as Payment against deposit.
Any continuous loan will be classified as:
1. A. Sub standard: if it remains past due/overdue for 6 months or beyond but not over 9 months
from the date of claim by the bank or from the date of creation of forced loan.
2. B. Doubtful: if it remains past due/overdue for 9 months or beyond but not over 12 months from
the date of claim by the bank or from the date of creation of forced loan.
3. C. Bad/loss: if it remains past due/overdue for 12 months or beyond form the date of claim by
the bank or from the date of creation of forced load.
iii. Fixed term loan: the loans which are repayable within a specific time
period under a specific repayment schedule will be treated as fixed term loans.
In case of any installment or part of installment of a fixed term loan is not repaid within the due
date the amount of unpaid installment will be termed as defaulted installment.
In case of fixed term loans, which are repayable within maximum five years of time:
If the amount of defaulted installment is equal to or more than the amount of installment due
within 6 months, the entire loan will be classified as sub standard.
within 12 months, the entire loan will be classified as doubtful
within 18 months, the entire loan will be classified as bad/loss
In case of fixed term loans, which are repayable more than five years of time:
within 18 months, the entire loan will be classified as sub standard.
within 12 months, the entire loan will be classified as doubtful
within 18 months, the entire loan will be classified as bad/loss
iv. Short term agricultural and micro credit: short term agricultural
credit will include the short term credits as listed under the annual credit programme issued by
the agricultural credit and special programmes department of Bangladesh bank. Credits in the
agricultural sector repayable within 12 months will also be included herein. Short term micro
credit will include any micro credits not exceeding tk. 25000/= and repayable within 12 months,
be those termed in any names such as non agricultural credit, self reliant credit, weavers credit or
banks individual project credit.
2. Unclassified
. TYPES OF LOANS AND ADVANCES OFFERD BY SIBL
Types of advance Rate Investment Limit Years Features
Bai Muazzal
(Commercial)
18% Tk. 50,00,000 1 year Meet the working capital.
(Revolving limit)HPSM (Commercial)
16%Tk. 50,00,0002-5 yearsFor asset purchase and long term investment.
(Equal monthly installment)HPSM (Transport)16%Tk. 50,00,0002-5 yearsVehicles uses or
purchase for commercial purpose.
(Equal monthly installment)Bai-Muazzal
(Commercial Installment)
18%Tk. 50,00,0004 yearsFor meet the working capital (Equal monthly installment)Murabaha
(Commercial)18%Tk. 50,00,0001 yearFor meet the working capital (Equal monthly
installment)Bai-Muazzal (Micro Enterprise)
18%Tk. 2,00,0003 yearsFor raw materials purchase
(Equal monthly installment)
FEASIBILITY REPORT
This report is from borrowers point of view. He prepares this report and submitted to the bank.
CREDIT LINE PROPOSAL
In this step of the term loan the branch sends a credit line proposal to the head office for
approval of the term loan. The credit line proposal contains the following particulars:
Fresh/Renewal/Revision of the term loan
Borrower name
Types of business
Capital structure
Particulars of previous transaction
Movement of the accounts
Liabilities of sister concerns
PROJECT APPRAISAL
It is the reinvestment analysis done by the banker before a project he approved. Project
appraisal in the banking sector needed for the following reasons:
To justify the soundness of an investment
To ensure repayment of bank finance
To achieve organizational goals
To recommend if the project is not designed properly
TECHNIQUE OF PROJECT APPRAISAL
An appraisal is a systematic exercise to establish that the proposed project is a viable
preposition. The appraising officer checks the various details submitted by the promoter in first
information sheet, credit application form, feasibility report. SIBL considers the following aspects
in apprising:
1. Entrepreneur
2. Viability of the project
A. Technical viability (location and site of the project).
B. Commercial viability (This study indicates evaluation of a projects feasibility in terms of
market).
C. Financial viability.
D. Economic Viability.
E. Management and organization viability
LENDING RISK ANALYSIS (LRA)
Lending Risk Analysis (LRA) is a technique by which the risk of the loan is calculated. Banker
must analyze LRA when loan application is above 1 core. This analysis is done by experienced
people of Credit department in SIBL. It is a ranking whose total score is 140.Among this score,
120 is for Total Business Risk and 20 for Total Security Risk.
In case of business risk, if the score falls
Between 13-19, then- Poor risk
Between 20-26, then Acceptable risk
Between 27-34, thenMarginal risk
Over 34, then Good risk.
In case of security risk, if the score fall
Between 20 to 15 then
Between 14 to 0, then Acceptable risk
Between 0 to 10, then -Marginal risk
Over 10, then Good risk.
In LRA, following aspects are analyzed Supplies risk
1) Sales risk
2) Performance risk
3) Resilience risk
4) Management ability.
5) Level of Managerial teamwork
6) Management competent risk
7) Management integrity risk
8) Security control risk
9) Security risk cover.
SECURITIES
SIBL charges the following two types of security,
1. Primary security
2. Collateral security.
. DOCUMENT AND DOCUMENTATION
A document is a written statement of facts of proof or evidence arising out of particular
transaction which placement may bind the parties there to answerable and liable to the court of
law for satisfaction of the change in question. The execution of documents in proper form and
according to the law is known as documentation.
Steps in documentation
Obtaining the documents.
Stamping (Stamp Act-1899)
Witnessing.
Execution of Documents.
Registration of Documents (assignment on the body of an insurance Policy, Mortgage deed,
Advance to a limited company etc.)
Common Compulsory Documents
Letter of Acceptance about the terms and conditions laid down in Sanction Advice.
D.P. Note (Depending on the types of borrowers)
Letter of Arrangement.
Besides, there are other documents that are to be obtained depending on the types of Advance.
Such as-
In case of loan
1. Letter of Disbursement.
2. Letter of Authority (if required)
3. Letter of Hypothecation (when goods are hypothecated as security)
4. Insurance Policy (if required).
5. Any other document as stated in Sanction Advice.
In case of overdraft
1. Letter of Continuity.
3. Letter of Hypothecation (when goods are hypothecated as security)
4. Insurance Policy (if required)
In case of cash credit
1. Letter of Continuity.
3. Letter of Pledge/Hypothecation.
4. Insurance Policy under Banks Mortgage clause.
5. Letter of disbursement incase of renewed go down.
Transport Loan
1. Letter of hypothecation of vehicles (in separate form)
2. Photocopy of blue book
3. Photocopy of rote permit
4. Insurance policy under Banks mortgage clause
Legal Mortgage
1. Mortgage deed (certified copy)
2. Registration receipt in
3. Chain of documents for title (original if available)
4. C.S,S.A and R.S parcha
5. Up to date Rent Receipt
6. Non-encumbrance certificate
7. Power of Attorney (if asked for)
8. Legal opinion
9. Valuation Certificate
10. Location plan etc./Site plan etc
Equitable mortgage
1. Chain of documents for title
2. Original title deed
3. C.S, S.A A and R.S parcha
4. Up to date Rent Receipt
5. Memorandum of deposit of title deed
6. Registered power of Attorney
7. Legal opinion
8. Valuation Certificate
9. Location plan etc
10. Non-encumbrance Certificate
CREDIT MONITORING, FOLLOW-UP AND SUPERVISION
SIBL Officer checks on the following points:
1. The borrowers behavior of turnover
2. The information regarding the profitability, liquidity, cash flow situation and trend in sales in
maintaining various ratios.
LOAN CLASSIFICATION
Like other banks, all types of loans of SIBL fall into following four scales:
1. Unclassified: Repayment is regular.
2. Substandard: Repayment is stopped or irregular but has reasonable prospect of improvement.
3. Doubtful debt: Unlikely to be repaid but special collection efforts may result in partial recovery.
4. Bad/Loss: very little chance of recovery.
PROVISION
Type of classification Rate of provision Type of classification Rate of provision
Unclassified 1% Doubtful 50%
Substandard 20% Bad debt 100%
. STATEMENTS PREPARED BY THE CREDIT DEPARTMENT
Monthly Statements prepared by Credit Department for Bangladesh Bank.
Quarterly Statements prepared by Credit Department for Bangladesh Bank.
Monthly Statements prepared by Credit Department for Head Offic
NON-FORMAL SECTOR
Family empowerment credit programs come under Non-formal Banking Non-formal Banking
deals with finance in non-corporate sector. The popular view of non-formal sector activities are
primarily those of petty traders, street hawkers, shoeshine boys and confined to employment peri-
urban and urban areas, SIBLs target areas are however determined by following criteria:
1) MICRO INVESTMENT SCHEME
Micro-Credit Program is designed to develop the Socio-economic condition of the grass-root
people committed to build a caring society by reducing poverty through income generation for
small and low-income families, under which financing is provided without collateral.
Micro-Credit Program is a group-based lending. Investment is provided for maximum three years
@ 10% return per annum at flat rate where maximum ceiling of Investment is Tk.25,000/=.
2) MICRO ENTERPRISE INVESTMENT SCHEME
I. Family empowerment micro-enterprise program
Family Empowerment Micro-Enterprise program is introduced to enhance the Socio-economic
condition of the potential entrepreneur, small and medium Businessmen, successful Micro-Credit
graduates through income generating activities. Ceiling of investment is from Tk.50,000/= to
Tk.5,00,000/= @ 10% return per annum at flat rate for maximum three years. Investment upto
Tk.50,000/= is provided without collateral. In case of investment of above Tk.50,000/= minimum
collateral security is required.
II. Family empowerment micro-enterprise program (SMES)
Considering the potentiality of SMEs sector, SIBL has launched Family Empowerment Micro-
enterprise program (SMEs) to fulfill the diversified need of SMEs clients. Investment ceiling under
this program is from Tk.2,50,000/= to Tk.5,00,000/=@ 14% return per annum for one year on
revolving basis.
III. Small, medium and micro-enterprise development program jointly JOBS project,
USAID
On the basis of Memorandum of Understanding (MoU) signed in 2001 between Social Islami
Bank Ltd. and Job Opportunity and Business Support (JOBS), collaborative efforts are being
made to create easy access to business capital for the Small Medium and Micro-Enterprises
(SMEs) through enhancing the capacity and performance of the entrepreneurs with available
technical assistance from JOBS to be financed through Social Islami Bank Ltd. (SIBL) under
Family Empowerment Micro-Credit and Micro-Enterprise Program.
3) JOINT SCHEME
Small, Medium and Micro-Enterprise Development Program jointly with JOBS project,
USAID. On the basis of Memorandum of Understanding (MoU) signed in 2001 between Social
Investment Bank Ltd. and Job Opportunity and Business Support (JOBS), collaborative efforts
are being made to create easy access to business capital for the Small Medium and Micro-
Enterprises (SMEs) through enhancing the capacity and performance of the entrepreneurs with
available technical assistance from JOBS to be financed through Social Investment Bank Ltd.
(SIBL) under Family Empowerment Micro-Credit and Micro-Enterprise Program.
4) DEVELOPMENT AND REHABILITATION SCHEME
Displaced Garments Child Workers Students Stipend Disbursement Program Aiming To
Eliminate Child Labor From The Garments Sector Implemented Jointly With The International
Labor Organization (ILO). On the basis of the agreements signed between SIBL & ILO during
1996 and 1998, SIBL has successfully completed the stipend disbursement program among the
displaced garments child workers to eliminate child labour in Bangladesh within the frame work
of international program on the elimination of child labour.
5) ILO, UNICEF
I. Micro credit program to the garments workers (parents)/adult family member
jointly with ILO under project finance from govt. of Italy & Norway
In view of the SIBLs satisfactory performance of Stipend Disbursement Program, two agreement
on Family Empowerment Micro-Credit Program have been signed between SIBL and ILO under
project BGD/98/01/PO50/ITA and BGD/99/02/PO70/NORAD on 12.09.2000 and 19.11.2000
respectively for implementing the Program among the parents of the displaced garments child
worker for self employment to their parents. It was an action program, against the child labour in
garments sector. The recovery under these programs is continuing.
II. Financial assistance among the 100 parents/guardian of former
garments working children under project UNICEF to continue their education.
A memorandum of Understanding (MoU) had been signed between the UNICEF & SIBL on
December 15, 2002 for the project entitled Family Empowerment Program among the 100
parent/guardian of former garments working children.
The purpose of the project is to develop a regular source of income for the families of the former
garments child workers so that their parents could provide monthly school fees to continue their
children education. By the financial support from unicef, sibl provided assistance of maximum tk.
10,000/- to-individual member. Recovery under the program is continuing.
III. Family empowerment micro credit program for self employment of HTR
(Hard to Reach) graduates to implement micro credit program in connection with the letter
of exchange signed with UNICEF.
On the basis of the previous MoU with UNICEF signed in the year 2002 , both the organization
has signed a Letter of Exchange (LoE) on 29.05.2005 to provide Micro-credit to a good number of
parents/guardians of HTR (Hard to Reach) graduates who have received Livelihood Skill Training
from Dhaka Ahsania Mission under a project supported by UNICEF.
VOLUNTARY SECTOR
1) CASH WAQF SCHEME
In the voluntary sector SIBL has also introduced Cash Waqf Certificate, a new product for the first
time in the history of banking. Together, a new beginning can be made for a participatory
economy.
Cash Waqf provides a unique opportunity for making investment in different religious, educational
and social services. Savings made from earning by the well off and the rich people of the society
can be utilized in our organized manner. Income earned from these funds will be spent for
different purposes like the purposes of the waqf properties itself. This scheme has been well
received by the public in general due to its unique feature. The guidelines for operation of this
scheme are stated below:
1. a. Cash waqf is an endowment in conformity with shariah, bank manages the waqf on behalf of
the waquif.
2. b. Waqfs are done in perpetuity and the A/c is opened in the title given by the waquif.
3. c. Waquif have the liberty to choose the purpose(s) to be served either from the list of 32
purposes identified by the bank, covering (a) family empowerment credits (b) Human resource
development (c) Health and sanitation and social utility services or any other purpose(s) permitted
by shariah.
4. d. Cash waqf amount earns profit at the highest rate offered by the Bank from time to time.
5. e. Cash waqf amounts remain intact and only the profit amount is spent for the purpose(s)
specified by the waquif. Unspent profit amounts automatically added to waqf amount and earn
profit to grow over the time.
6. f. Waquif can also instruct the Bank to spend the entire profit amount for the purpose specified
by him/her.
7. g. Waqif have the opportunity to create cash waqf at a time. Otherwise he/she may declare the
amount he/she intends to build up and may start with a minimum deposit of Tk. 100/-(one hundred)
only. The subsequent deposits may also be made in thousand or in multiple of thousand.
8. h. Waquif have the right to give standing instruction to the bank for regular realization of cash
waqf at a rate specified by him/her from any other A/c maintained with SIBL.
9. i. The amount in Cash Waqf Account is a perpetual deposit
1. 1. MOSJID WAQF PROPERTY DEVELPOMENT SCHEME
As a declared corporate policy, the Bank intends to help mosjid and waqf property holders with
free consultation & technical support so as to make it economically & socially self-sustained.
Meanwhile, the bank has completed a small project for development of a mosque property at
Uttar Khan, Dhaka.
Chapter: 4
Financial Performance and SWOT Analysis of SIBL
CAPITAL
The authorized capital of the Bank is Tk. 10,000 million, whereas paid up capital of the bank
stood at taka 2,987.81 million as at 31
st
December 2010 compared to Taka 2,691.72 million of
2009.
Graph 4.1: Capital of SIBL (Table 4.1)
2010 2009 2008 2007
Paid up
capital
2,987.82 2,691.73 1,309.88 1,119.56
Statutory
Reserve
788.23 560.89 415.51 344.55
Other
Reserve
- 6.12 6.12 6.12
Retained
Earnings
422.73 297.01 135.84 195.06
Total 4,198.77 3,555.75 1,867.36 1,665.29
Table 4.1 Capital of SIBL
LIQUIDITY
Liquidity in the form of balance with Bangladesh Bank (as the agent of Bangladesh Bank) and
cash in hand including Foreign Currency stood at Tk. $,451.59 million as at 31
st
December 2010
as against Tk. 2217.70 million in last year to maintain cash and statutory liquidity. The bank is
committed to maintain the cash and statutory liquidity requirement to effectively manage asset
and liability portfolios of the Bank in order to maximize the profit.
Graph 4.2: Liqidity (Table 4.2)

2010 2009 2008 2007

Liquidity
4,451.59
2,217.70
1,670.12
1,702.27

Table 4.2: Liquidity
DEPOSITS
Deposit of the bank shows a tremendous increasing trend. Total deposit of the bank stood at Tk.
44850.77 million compared to Tk. 31,588.16 million of 2009 which is sharp 41.99% higher. To
keep the deposit cost within the limit, the bank could successfully maintain its deposit mix which
is the most important in long term and short term deposit planning. The following graph has
shown the deposit trend of the bank:
Graph 4.3: Deposit of SIBL (Table 4.3)
2010 2009 2008 2007
Mudaraba Savings
Deposits
3,692,222,370.00 3,438,376,060.00 1,733,774,115.00 1,512,243,805.00
Mudaraba Term Deposits 25,245,307,928.00 16,155,773,818.00 12,605,379,180.00 10,334,578,234.00
Other Mudaraba Deposits 8,163,355,695.00 7,049,428,362.00 5,874,827,600.00 4,219,804,042.00
Al-Wadeeah Current &
Other Deposit Accounts
7,088,486,139.00 4,289,075,045.00 3,489,874,315.00 2,783,455,779.00
Bills Payable 617,328,955.00 627,771,974.00 371,312,269.00 779,864,605.00
Cash Waqf Fund 44,067,266.00 27,735,138.00 24,655,891.00 19,003,600.00
Total 44,850,768,353.00 31,588,160,397.00 24,099,823,370.00 19,648,950,065.00
Table 4.3: Deposit of SIBL
INVESTMENT
Global investment of SIBL in the year 2010 showed a very favorable growth both in quantity as
well as in quality. The total investments of the Bank stood Tk. 36680.28 million in various sectors
as at 31
st
December 2010 against Tk. 26,580.58 million of 2009 registering a growth by 38.00%
that signifies the confidence of the clients on the bank. The increase in investment by Tk.
10099.70 million as compared to 2009 was due to expansion of business.
Graph 4.4: Investment of SIBL (Table 4.4)
2010 2009 2008 2007
Investment 36,680,285,945.00 26,580,584,597.00 19,951,303,478.00 16,440,259,305.00
Table 4.4: Investment of SIBL
INVESTMENT INCOME
The bank has registered an income from investment by Tk. 3886.18 million under different mode
of investment account in the year under review compared to Tk. 3,078.98 million of 2009 which
increased 26.22% from the previous year. a comparative position on income received from
different mode of investment in the year 2010 to 2007 is given below:
Graph 4.5: Investment Income ( Table 4.5)
2010 2009 2008 2007
Investment Income 1,451,168,098.00 1,015,359,604.00 660,877,606.00 387,897,201.00
Table 4.5: Investement Income
FOREIGN EXCHANGE BUSINESS
Foreign exchange business stood at Tk. 61931.00 million in 2010 against Tk. 39110.00 million in
2009. The breakup of the foreign exchange business is given below:
Graph 4.6: Forign Exchange ( Table 4.6)
2010 2009 2008 2007
Import 39459.5 22753.3 18343.8 13482.3
Export 21372.2 14433.2 12674.3 9961.6
Remittance 1099.4 1923.5 2341.1 459.9
Total 61931 39110 33363.2 23903.8
Table 4.6: Foreign Exchange
GROWTH IN NET PROFIT
Earning net profit is increasingly of SIBL. In the year 2010, the net profit after tax of the Bank was
Tk. 643,019,720 and the growth rate of net profit was 149.01% in 2010.
Graph 4.7: Growth in net profit ( Table 4.7)
2010 2009 2008 2007
Net Profit 643019720 431522723 202068294 150037061
Table 4.7: Growth in net profit
4.8 RATIO
Ratio Formula 2010 2009 2008 2007
Total debt
ratio
0.923891869 0.911063483 0.937355571 0.93215779
Debt
equity ratio
12.13920059 10.24397533 14.96311132 13.7400858
Return on
assets
0.011655551 0.010793244 0.006778795 0.006112349
Return on
investment
0.01753039 0.016234508 0.010128075 0.01
Return on
equity
0.153144617 0.966989074 0.108210661 0.090096547
Earnings
per share
2.14 1.44 17.2 17.6
Table 4.8: Ratio
COMMENTS
Though Social Islami Bank Limited is a new bank, which started its operation in the last half of the
year 1995; it has now become a reputed bank. Its deposits and investment are increasing rapidly.
Its number of branches has increased. Its foreign exchange business is also very credible. In a
few days, it is well known in the banking sector that SIBL gives a higher standard of banking
services.
SWOT ANALYSIS OF SIBL
Every organization is composed of some internal strengths and weaknesses and also has some
external opportunities and threats in its whole life cycle.
1 Strengths
-SIBL provides its customer excellent and consistent quality is every service.
-SIBL is financially sound company.
- SIBL utilizes state of the art technology to ensure consistent quality and operation.
-SIBL provides its works force an excellent place to work
-SIBL already achieved a good will among the clients
-SIBL has research and training division.
Weaknesses
-SIBL lacks well trained human resource in some area.
-SIBL lacks aggressive advertising.
-The procedure of credit facility is to long compare to other banks.
-Employees are not motivated in some areas.
Opportunities
-Emergence of on line banking will open more scope for SIBL.
-SIBL can introduce more innovative and modern customer service.
-Many branches can be opened in local remote area as its high demand.
-SIBL can recruit experienced, efficient and knowledgeable officers and staffs as it offers good
working environment.
Threats
-The worldwide trend of mergers and acquisition in financial institutions is causing problems.
-Frequency taka devaluation and foreign exchange rate fluctuation is causing problem.
-lots of new banks are coming in the scenario with new service.
- Local competitors can capture huge market share by offering similar products
Chapter: 5
Findings, Recommendations and Conclusion
FINDINGS
Lack of strong monitoring unit.
Sometimes the process of information transferring to the management is lengthy.
Bank has limited ATM booth.
Lack of central AC for better working environment.
Generally investment clients do not come to the Islamic Banks only for Shariah purpose rather
for low transaction cost.
Lack of training facility of junior officers.
Fewer clients for trade business.
PC Bank server problem.
RECOMMENDATIONS
Proper and sufficient training is required for each and every staff to work with full capability in the
best way.
Proper monitoring is the pre-consideration for good collection. So monitoring unit is required to be
efficient enough to collect more deposit.
Staffs of branches require being sincere enough in their jobs. This will help in banking procedure.
The brochures of the products and services of the branch can be mailed through the welcome
letters along with the status of the customers via courier.
Interpersonal relationship needs to be built among the employees and superiors.
Customer must be convinced to use token system, which will help the personnel of the customer
service work smoothly.
Complain of the customers should be decreased on zero level.
Assurance the accuracy of online banking.
Increase the SIBLs own ATM booth.
SIBL requires resorting to massive image re-engineering in order to capture the public perception
to take the lead role in this sector.
SIBLs investment processing should become easier than other conventional banks.
SIBL should make its investment schemes more attractive for availing high-return projects.
SIBL should consider utilization of rural potentials from both efficiency and equity grounds in the
context of the present-day socio-economic conditions of Bangladesh. Strong commitments and
stepping up through experiment and implementation of innovative ideas are the appropriate ways
to do that.
SIBL should deserve immediate attention in the promotion of the image of Shariah based banks as
PLS (Profit-loss-sharing)-banks.
CONCLUSION
Social Islami Bank (SIBL) action program is directed towards development of an authentic
participatory Economy beyond Market Economy. The family empowerment credit program of
SIBL is gaining ground at the grass root level in Bangladesh. Family empowerment micro Credit
and micro enterprises program has been designed in a manner so as to make finance,
production, marketing, trading, local specific survey and research as well as moral suasion in one
package. In SIBL credit conveys the totality in life and clearly linked to social context and cultural
setting in conformity with Shariah. There is a built in provision vertical social mobility with
provisioning for social subsidy. It is thus felt that the linking credit to social goals and assignments
will have far-reaching implications for development of an alternative concept of new participatory
economics in the 21
st
Century and thereby laying the foundation of new theories of income, output
and employment.
This Bank begins from the understanding that 120 million people are Bangladeshs most precious
resource. It is rooted in the confidence that cultural heritage and legacy of Bangladesh can be
reactivated for motivating people to work that earn Bangladesh a living coupled with necessary
finance, training and the backing of a government that is committed to encouraging new
initiatives, enterprise, innovation and change, thereby making Bangladesh more efficient, less
dependence on aid, more socially just and compassionate.
BIBLIOGRAPHY
1. Social Islami Bank Annual Report 2010, 2009, 2008, 2007
2. Social Islami Bank Limited- Operational manual
3. www.siblbd.com
4. www.bangladeshinfo.com
5. www.valki.com
6. www.bangladesh-bank.org
7. Book:
Crafting and Executing Strategy 6
th
Edition Thomson/Strickland/Gamble
Fundamentals of Corporate Finance 8
th
Edition Stephen A Ross/Bradford D Jordan

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BACKGROUND OF THE STUDY

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

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