American International University-Bangladesh

(AIUB)
Faculty of Business Administration
INTERSHIP AFFILIATION REPORT ON
Capital Adequacy of Social Islami Bank
Limited
An Internship Report Presented to the Faculty of Business Administration in
Partial Fulfillment of the Requirement for the Degree of
Masters of Business Administration (MBA)
Supervised By
Md Shofiqul Islam
Assistant Professor
Submitted By
Talukder Md Riad Hossain
ID: 14-97577-1
Finance
Date of Submission

29/07/2015

Internship Affiliation Report On

Capital Adequacy Of Social Isalmi Bank Limited

Page: 02

Letter of Endorsement
The Internship Affiliation report entitled Capital Adequacy Of Social Islami Bank Limited
has been submitted to the Office of Placement & Alumni, in Partial Fulfillment of the
Requirement for the Degree of Masters of Business Administration (MBA), Major in
Finance, Faculty of Business Administration on 29.07.2015. By Mr. Talukder Md Riad
Hossain, ID# 14-97577-1. The Report has been accepted and may be presented to the
Internship Defense committee for evaluation.
(Any opinions, Suggestions made in this report are entirely that of the author of the report.
The university does not condone nor reject any of these opinions or suggestions).

_____________________________________________

Md Shofiqul Islam
Intern Supervisor

Page: 03

Letter of Transmittal
July 29, 2015
Mr. Roomee Tareque Moudud
Director, Office of Placement & Alumni
American International University-Bangladesh (AIUB)
Subject: Submission of Internship Report.
Dear Sir,
It is a great pleasure that you have given me an opportunity to submit the report on Capital
Adequacy Of Social Islami Bank Limited which was assigned by Internship and Placement
Office as a partial requirement of the Internship Program a prerequisite for the completion of
the MBA Course.

Social Islami Bank Limited is operating their banking operations effectively and efficiently
and providing services with a view to acceleration socio-economic development of the
country. Adoption of modern technology both in terms of equipment and terms of non
banking practice ensures efficient service to clients. Day by day new competitors appears
with better ideas and products as well as services.

I have tried at my best to avoid my deficiencies and hope that my report will satisfy you and I
also would like to thank you again for giving me the opportunity to submit this report.

Best Regards
Talukder Md Riad Hossain
ID# 14-97577-1

Page: 04

ACKNOWLEDGEMENT

First of all, I wish to express my gratitude to the almighty ALLAH for giving me the strength
to perform my responsibilities as an intern and complete the report within the stipulated time.

I am deeply indebted to my Faculty Supervisor Md Shofiqul Islam for whole-hearted

supervision during my organizational attachment period. I am also grateful to Mr. Mojibul
Haque, Assistant Officer and my organizational supervisor and my colleague who helped me
by providing informative instructions. I was closely attached with them during my internship
tenure. Without them this project would have been very difficult. I must mention the
wonderful working environment and group commitment of this organization that has enabled
me to deal with a lot of things.

And finally I express my sincere gratitude to all those participated to prepare the report. Most
of them were busy employees of Social Islami Bank Limited.

Page: 05

Executive summary

Social Islami Bank Limited (SIBL) is a private owned bank. SIBL is a second generation
Islami bank operating since 22 November, 1995 based on Shariah Principles. Now SIBL has
96 branches all over the country with two subsidiary companies-SIBL securities ltd. and
SIBL investment ltd. The bank opened 12 branches in 2011 to bring more people under the
coverage of banking service.

This report will cover Capital Adequacy of Social Islami Bank Limited (SIBL). Capital
Adequacy is a very vital thing for each and every bank. SIBL maintained and achieved strong
position in all key areas of operations despite challenge in 2012. Capital of the bank was
tk.12.60 crore at the very inception, and by the year 2012 it has increased to tk. 953.45 crore.

Total deposit of the bank stood at tk. 6685.25 crore and total assets stood at tk. 11482 crore as
on 31 December, 2013 which indicate a growth of 49.05% respectively over that of the
previous year.

The bank achieved 46.97% growth in investment with a total investment portfolio of tk.
5390.86 crore in 2013 compared to 3668.03 crore in 2011.

Successful issuance of @ 1:1 Right Share in the year 2012 has resulted in an effort towards
raising the paid up capital to Taka 2987.81 million and thus capital of the bank stood at Taka
9534.52 million at the year ending in 2012. The year 2012 has ended with a capital surplus of
tk. 2456.22 million as per requirement of the Basel ii. Having the year 2011 as a successful
return SIBL witnessed a remarkable growth too in different sectors in the year 2012. SIBL
have successfully opened 12 branches in the year 2011.

Page: 06

TABLE OF CONTENTS
Letter of Endorsement ..03
Letter of Transmittal.04
Acknowledgement05
Executive Summary..06

Part: 01 The Organization

1.1indroduction..13
1.2 Rationale of the Report/Origin of the report.....13
1.3 Historical Background of SIBL....14
1.4 Objectives and Goals of SIBL ......14
1.4.1 Sectoral Objectives...14
1.4.2 Overall Operational goals .15
1.5 Vision of SIBL .15
1.6 Mission of SIBL1.1 Introduction.16
1.7 Functions of SIBL....16
1.8 Products & Services: .......17
1.9 Different departments of SIBL: ..17
1.10 Journey with New Logo ....18
1.11 Objective Behind Doing This Report....19
1.12 Corporate Structure ..20

Page: 07

Part 02 Job Description

2.1 Internship at SIBL..22

2.2 Description of my job at SIBL...22:
2.2.1 Account Open..22
2.2.2 Cheque Requisition.........23
2.2.3 Cheque Delivery..23
2.2.4 Cheque Issue23
2.2.5 Client Account Statement.23
2.2.6 Scanning of Different Documents23
2.2.7 Client Data entry or Edit..24

Part 03 Advance Working Report

3.1 Definition of Capital Adequacy26

3.2 Capital Adequacy under Basel II.26
3.3 The Three Pillars...27

3.3.1 Pillar 1-Minimum Capital Requirements....28

3.3.2 Pillar 2-Supervisory Review Process
3.3.3 Pillar 3-Market Forces ....28
3.4 Capital Base for Minimum Capital Requirement..29
3.4.1 Tier 1 capital....29
3.4.2 Tier 2 capital 32
3.4.3 Tier 3 capital ....33
3.5 Maintenance of Regulatory Capital...35
3.5.1 Conditions for maintaining regulatory capital .36
3.5.2 Eligible regulatory capital ....36
3.6 Calculation of Capital Adequacy Ratio ..37

3.6.1 Formula for calculating Capital Adequacy Ratio.....37

3.7 Comparative Analysis of Capital maintained throughout the.39
3.8 Literature Review............40
3.9 Impact of Adoption of Basel II in Social Islami Bank Limited .41
3.9.1 Improved Risk Management and Capital Adequacy.41
3.9.2 Impact on Customers..41
3.9.3 Shorter Term to maturity of lending .42
3.9.4 Impact on capital flows 42
3.9.5 Higher Interest Costs 42
3.9.6 Competitive Advantage of Corporate Borrowers .........43
3.9.7 Impact on Companies ...43
3.9.8 The Vicious Circle of Curtailment of Credit to Developing Countries ..43
3.10 Risk Management.44
3.11 Capital Management.44
Part 04 Findings Of The Study

4.1 Findings of the Study.46

page: 08

Page: 09

Part 05 Lesson Learn From The Internship Report

5.1 Summary Of Lessons Learned..49

5.2 Culture....49
5.3 Working Environment....49
5.4 Communication...50
5.5 Time Management......50
5.6 Networking.50
5.7 Customer Service51
5.8 Professionalism...51
5.9 Other Activity.51

Page 10

Part 06 Concluding Statement

6.1 Conclusion53
6.2 Recommendation.54

Page 11

Part 1
The
Organization

Page 12

1.1 Introduction:
Social Islami Bank Limited was incorporated in Bangladesh in the year 1995 as a banking
company under the companies Act, 1994. Since its establishment, it has come forward as a
private commercial bank and has come forward as the stimulator of economic activities in the
country. The bank has been entrusted with the responsibility of undertaking various steps
related to the development of the countrys commercial, industrial and agricultural sectors.
The banking sector of a country is called the economic barometer of the country. As a pioneer
commercial bank in the private sector in Bangladesh, Social Islami Bank provides
considerable financial helps to the business sector that imports industrial goods and/or
exports excess production outside the country for profit. Thus for imports the Social Islami
Bank provides LIM (Loan against Import Merchandise) and LTR (Loan against Trust
Receipt) facility and for exports provides both pre shipment and post shipment finances. Thus
with these bank helps the prospects in the business sector has increased more than ever
before.

1.2 Rationale of the Report/Origin of the report:

Internship Program of American International University - Bangladesh is a graduation
requirement for the MBA students. It is a 08 weeks long internship program to introduce the
students with the real life business administration. I took the internship with Social Islami
Bank Limited which stands a prominent name in banking industry. I am proud to work as an
internee with SIBL and this experience will surely help me in my future career. This advance
working report has been prepared as a part of the Internship Program. Being an intern the
main challenge was to translate the theoretical concepts into real life experience.
The internship program and the study have following purposes:
To get and organize detail knowledge on the job responsibility.
To experience the real business world.

To compare the real scenario with the lessons learned at AIUB

To fulfil the requirement of BA Program.

Page: 13

1.3 Historical Background of SIBL:

Social Islami Bank Limited (SIBL) is a banking company registered under the companies Act
1994 with its head office in 15 Dilkusha C/A, Dhaka-1000. The bank operates as a scheduled
bank under a banking license issued by the Bangladesh Bank, Central Bank of the country.
The Bank started its operation from 22, November 1995. SIBL is a capitalized new
generating Bank with an authorized capital and paid up capital of Taka 585 million in 2007
and also 585 million respectively as of December 2006. Currently the bank has 24 branches
of which 12 in Dhaka, 4 in Chittagong, 1 in Sylhet, 2 inNarayanganj, 1 in Bogra, 1 in Khulna,
1 in Rajsahi, 1 in Sirajgonj. The bank undertakes all types of banking transaction to support
the development of trade and commerce in the country. SIBL services are also available for
the entrepreneurs to set up new venture and BMRE of industrial units. To provide clientele
services in respect of international trade it has established wide corresponded banking
relationship with local and foreign bank stride and financial interest home and abroad. Since
the very inception, Social Islami Bank Ltd. is working with the philosophy of serving the
nationals as an ideal and unique financial house. Every organization has some objectives of
its own. The prime objective of Social Islami Bank Ltd. is to earn profit throw undertaking
the responsibility of providing financial help for the development of the countrys
commercial and industrial sector. Now the year 2013 is envisaged as a golden year of SIBL.
Adopting new strategic Business Policy, SIBL will leave no stone unturned to boost business
in all areas of operation to achieve its corporate goals.

1.4 Objectives and Goals of SIBL:

1.4.1 Sectoral Objectives
The key sectoral objectives are

To humanize corporate finance in the formal sector through participatory market

mechanism with collateral.
To socialize non-corporate finance in the non-formal sector through non-market and
participatory custom-tailored micro-level credit package without collateral.

Page: 14

To monetize voluntary sector through participatory financing mainly on joint ownership

basis.
To integrate these three sectors operational activities of the Bank to various will-conceived
and well-planned Social Assignment and Investment Schemes or Social Fund for making
them economically and ethically transparent and revealed.

1.4.2 Overall Operational goals

The key thrusts of the operational goals are as follows:

Empowering the family of the poor by creating income opportunities as well as

strengthening the family of the rich for a better future generation.
Achieving sustainable participatory economy, Social Security, and peace for a society.

1.5 Vision of SIBL:

In SIBL journey towards continuous excellence it is striving to become the Countrys leading
Islamic Bank offering one-step service of an wide range of value added products and services
meeting the needs of its customers; conducting its business ethically in accordance with the
laws of Shariah while optimizing best utilization of the most modern state-of-the-art
technological solutions through creation of a pro-active organizational culture based on sound
team spirit, fairness, mutual understanding and pragmatic leadership always remain open to
new ideas and adaptable to the best practices in the market ensuring recognition and quality
banking experience to its customers and deliver best value to all its stakeholders as well.

Page 15

1.6 Mission of SIBL:

Transformation into a service-oriented technology-driven profit earning Bank.
Ensure fast, accurate and best-in-class 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.

1.7 Functions of SIBL

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 fulfil their demand by supplying money.
To improve economy by borrowing financial facility.
To assist capital market.

Page 16

1.8 Products & Services:

Mudaraba Term Deposit
Mudaraba Savings Deposit
Al-Wadia Current Account
Mudaraba Notice Deposit
Mudaraba Scheme Deposit
Mudaraba Hajj Savings Deposit
Mudaraba Monthly Savings Scheme
Mudaraba Special Deposit Pension Scheme (5 Years)
Mudaraba Monthly Profit Deposit Scheme
Mudaraba Education Deposit Scheme
Mudaraba Home Saving Scheme
Mudaraba Millinery Deposit Scheme
ATM Service
Locker Service
Online Banking

1.9 Different departments of SIBL:

In recent times management has brought a change in the organizational structure in view of
need of time. There are few departments. The departments are:
Human Resources Division
Personal banking Division
Treasury Division
Computer and Information Technology Division
Credit Division

Operation Division

page 17

Card Division
Finance & Accounts Division
Audit & Risk Management Division
Risk Management Unit

1.10 Journey with New Logo:

SIBL has changed its brand logo through a colorful function at Coxs Bazar sea beach. Bank
has passed a successful year 2011 through generating highest business growth in terms of
profit amidst unfavorable market conditions and also set superior service delivery for its
customers through implementation of real time on line state of-the-art banking technology. In
its journey towards continuous excellence the bank has decided to change its logo, the new
logo depicts birds wing, 9(nine) feathers, to represent its comfortable and safe flying in the
economic sky by passing the territorial Boundary. The wings are colored in red in a green
background. Red symbolizes the vigour and enthusiasm of youth and the green symbolizes
love for the dear motherland, Bangladesh is a country of greenery. Moreover 9(nine) feathers
represent- Honesty, Transparency, Efficiency, Accountability, Reliability, Innovation,
Flexibility, Security, and technology flying towards continuous excellence. In SIBL journey
towards Continuous Excellence it takes pride in their new Logo.

Page 18

1.11 Objective Behind Doing Thise Report:

The General objectives of the report are:
To fulfill the partial requirement of the inter program as a full credit
subject of the BBA program
To know about the banking sector of Bangladesh
The Specific objectives of the report are as follows:
To get an overall idea about the capital adequacy policy of SIBL

Page 19

1.12 Corporate Structure

Chairman
Vice Chairman
Director
Managing Director
Deputy Managing Director
Sr. Executive Vice President
Executive Vice President
Sr. Vice President
Vice President
Sr. Asset. Vice President
Principal Officer
Executive Officer
Management Trainee Officer
Officer
Junior Officer
Assistant Officer

Page: 20

Part 2
Job
Description

page:21

2.1 Internship at SIBL:

Internship is offered for 08 weeks and since 11th of June, 2015, I have been working in
Social Islami Bank Limited and deal with lots of issues. My association with this bank is
being a part of the General Banking Section (GB). Particularly being a student of Finance it
is necessary for me to get practical knowledge of General Banking (GB). So, I have tried my
level best to learn a lot about General Banking (GB). The nature of work was quite basic as
an internee; nevertheless I got to see what practical life is. Below, the duties I have performed
are given.
Account open
Cheque requisition
Cheque delivery
Cheque issue
Client account statement
Scanning of different documents
Client data entry or edit

2.2 Description of my job at SIBL:

2.2.1 Account Open:
People need bank account for different purpose. Generally there are four (4) types of account.
1. Mudaraba Savings deposit (Savings Account)
2. Al Wadia Current Account (Current Account)
3. Mudaraba Term Deposit (Fixed Deposit)
4. Mudaraba Special Deposit Pension Scheme (DPS- Deposit Pension Scheme)
Some people need personal account, some people need business account. Each and every
account has different purpose.

Page: 22

2.2.2 Cheque Requisition:

Savings and current account holders need cheque book. Because those account holders
deposit and withdraw their money frequently. Without cheque book they cannot withdraw
their money. So practically those account holders need cheque book for their transaction, for
business and personal purpose. When they open their account there is a separate form for
cheque book requisition. Account holders need to fill out those forms for their account
activation. Through banking software (Ababil) I give entry cheque requisition.

2.2.3 Cheque Delivery:

After giving cheque requisition customers need to wait for their cheque book. After cheque
requisition normally it takes couple of working days to delivery cheque book to respective
customers. After that customers need to collect their cheque book from our branch.

2.2.4 Cheque Issue:

When customers come to our premises for collecting their cheque book, they need to sign it
in a register book. After that I issued their cheque book and give it to them. After issuing
cheque book they can use their cheque book at any time when they wish. But it has to be in
between transaction hour, which is 9am to 4pm.

2.2.5 Client Account Statement:

Some customers ask for their bank account statement. According to their demand I gave bank
account statement to our customers. We didnt apply any charge for bank account statement.

2.2.6 Scanning of Different Documents:

When I open an account, I need to collect different documents from customers. Ex- National
ID Card, Passport, driving Licence, Commissioner Certificate etc. So I need to scan those
documents for banking purpose. After scanning those documents I print it and return the
original copy to the customers.

Page: 23

2.2.7 Client Data entry or Edit:

In the account opening form customers write the details according to what is asking for. After
filling the form I need to cheque it. After that I need to entry those data in computer through
banking software. In the banking software there are minimum two (2) pages that I need to fill
out. In this software I can also edit the data if required.

Page: 24

Part-3
Advance working
report on
Capital Adequacy
of SIBL

Page: 25

3.1 Definition of Capital Adequacy:

A measure of the financial strength of a bank or securities firm, usually expressed as a ratio of
its capital to its assets. For banks, there is now a worldwide capital adequacy standard, drawn
up by the Basel Committee of the Bank for International Settlements. The Basel Capital
Accord, introduced from 1988, requires banks to have capital equal to a minimum of 8 per
cent of their assets. In 2004, a revised framework, known as Basel II, was issued. Among its
proposals are those capitals requirements should be more risk sensitive and that greater use
should be made of risk assessments produced by banks' internal systems. The revisions,
which have sparked controversy, are being considered by national banking supervisors and
implementation is due at the end of 2007.

3.2 Capital Adequacy under Basel II:

To cope with the international best practices and to make the Banks capital more risk
sensitive as well as more shock resilient, Guidelines on Risk Based Capital Adequacy
(RBCA) for Banks (Revised regulatory capital framework in line with Basel II) have been
introduced from January 01, 2009. Throughout the year 2009, Basel II reporting was parallel
to Basel I which was the statutory requirement up to that year. However, beginning year
2010, Basel II became mandatory. Bangladesh Bank further reviewed the RBCA Guidelines
on several occasions prior to Basel II became fully in force. Instructions regarding Minimum
Capital Requirement (MCR), Adequate Capital, and Disclosure requirements as stated in
these guidelines have to be followed by all scheduled banks for the purpose of statutory
compliance.

SIBL has adopted standardized approach for computing capital charge for credit risk and
market risk and basic indicator approach for operational risk. Assessment for capital
adequacy is carried out in conjunction with the guidelines and regulations by Bangladesh
Bank from time to time.

Page: 26

SIBL has been generating most of its incremental capital from retained profit (stock dividend,
right share issue and statutory reserve transfer etc.) to support incremental growth of Risk
Weighted Assets (RWA). Therefore, the Banks Capital Adequacy Ratio (CAR) remained
consistently within the comfort zone under Basel II during 2012. (This was 13.17% against
required MCR of 10% in December, 2012)

Assessing regulatory capital in relation to overall risk exposures of a bank is an integrated

and comprehensive process. SIBL, through its SRP team, is taking active measures to
identify, quantify, manage and monitor all risks to which the Bank is exposed to. Assessment
of Regulatory Capital will be in alignment with the findings of these exercises.
Basel II guidelines are structured on the following aspects:
a) Minimum capital requirements to be maintained by a Bank against credit, market, and
operational risks.
b) Process for assessing the overall capital adequacy aligned with risk profile of a Bank as
well as capital growth plan.
c) Framework of public disclosure on the position of a Banks risk profiles, capital adequacy,
and risk management system.

3.3 The Three Pillars:

Basel II capital accord is known for its three mutually reinforcing pillars, which are minimum
capital requirement, supervisory review process and market discipline. In figure-1, the
approaches for calculation of capital for pillar I are stated. In this section, these three pillars
and the approaches for calculation of capital will be discussed. Pillar I of Basel II is somehow
present in the previous capital accord Basel I, but Pillar 2 and Pillar 3 are new. In the pillar 1

it has identified three risks whereas in the previous accord there were two risks. Operational
Risk was introduced for the first time in Basel II.

Page: 27

3.3.1 Pillar 1-Minimum Capital Requirements:

In Pillar I, three kinds of risk such as credit risk, market risk and operational risk are
considered to determine the minimum capital requirement. The definition of eligible
regulatory capital remains the same as outlined in the 1988 Accord i.e., the ratio of capital to
risk-weighted asset remains unchanged at 8%. This pillar is a quantitative one.

3.3.2 Pillar 2-Supervisory Review Process:

Pillar II ensures that not only do banks have adequate capital to cover their risks, but also that
they employ better risk management practices so as to minimize the risks. Supervisors will be
expected to evaluate the board and management of banks, to look into strategic decisions and
to evaluate portfolio diversification as well as the ability to react to future risks in a rapidly
changing environment. In particular, issues of transparency, corporate governance and
efficient markets can be considered as additional challenges in pillar II enforcement.

3.3.3 Pillar 3-Market Forces:

Banking operations are becoming complex and difficult for supervisors to monitor and
control. In this context, Basel Committee has recognized the importance of market discipline
and has suggested implementing it by asking banks to make adequate disclosures. The
potential audiences of these disclosures are supervisors, bank's customers, rating agencies,
depositors and investors. With frequent and material disclosures, outsiders can learn about the
bank's risks.

Page: 28

3.4 Capital Base for Minimum Capital Requirement:

For the purpose of calculating regulatory capital requirement, capital has been categorized
into the following three tiers:

3.4.1 Tier 1 capital

Tier 1 capital called Core Capital comprises of highest quality of capital elements that
consists of: i) Paid up Capital
ii) Non-repayable share premium account
iii) Statutory Reserve iv) General Reserve
v) Retained Earnings vi) Minority Interest In Subsidiaries
vii) Non-cumulative irredeemable preference shares
viii) Dividend equalization account

Page: 29

Table: 1
Tier-1 (Core Capital )
1.1

Fully Paid-up Capital/Capital Deposited with BB

1.2

Statutory Reserve

1.3

Non-repayable Share premium account

1.4

General Reserve

1.5

Retained Earnings

1.6

Minority interest in Subsidiaries

1.7

Non-Cumulative irredeemable Preferences shares

1.8

Dividend Equalization Account

1.9

Other (if any item approved by Bangladesh Bank)

1.10

Sub-Total

Page: 30

Deductions from Tier-1 (Core Capital)

1.11

Book value of Goodwill and value of any

contingent assets which are shown as assets

1.12

Shortfall in provisions required against

classified assets

1.13

Shortfall in provisions required against

investment in shares

1.14

Remaining deficit on account of revaluation of

investments in securities after netting off from
any other surplus on the securities

1.15

Reciprocal crossholdings of bank

capital/subordinated debt.

1.16

Any investment exceeding the approved limit

under section 26(2) of Bank Company Act,
1991.

1.17

Investment in subsidiaries which are not

consolidated-50%

1.18

Other if any

1.19

Sub Total

1.20

Total Eligible Tier-1 Capital (1.10-1.19)

827.37
Page: 31

3.4.2 Tier 2 capital

Tier 2 capital called Supplementary Capital represents other elements which fall short of
some of the characteristics of the core capital but contribute to the overall strength of a bank
and consists of:
i) General provision
ii) Revaluation reserves

iii) Revaluation reserve for fixed assets

iv) Revaluation Reserve for Securities
v) Revaluation reserve for equity instrument
vi) All other preference shares vii) Subordinated debt

Page: 32

Tier-2 (Supplementary Capital)

2.1

General Provision (Unclassified loans

+SMA+ off Balance Sheet exposure)

69.16

2.2

Assets Revaluation Reserves up to 50%

56.32

2.3

Revaluation Reserves for securities up to

50%

2.4

Revaluation Reserves for equity instruments

up to 10%

2.5

All other preference shares

2.6

Subordinated debt

2.7

Other (if any item approved by Bangladesh

Bank)

2.8

Sub-Total (2.1 to 2.7)

2.9

Deductions if any

2.10

Investment in subsidiaries which are not

consolidated-50%

2.11

Total Eligible Tier-2 Capital

126.08

126.08

Table 2

Page:33

3.4.3 Tier 3 capital

Tier 3 capital called Additional Supplementary Capital, consists of short-term
subordinated debt (original maturity less than or equal to five years but greater than or equal
to two years) would be solely for the purpose of meeting a proportion of the capital
requirements for market risk.

Table 3
Tier-3 (eligible for market risk only)
3.1

Short-term subordinated debt

Page: 33

3.5 Maintenance of Regulatory Capital:

Table 4

3
(a
Quantitative Disclosure :

A) Amount of Tier -1 Capital

Fully Paid-up Capital/Capital Deposited with BB

Statutory Reserve

Retained Earning

B) Amount deducted from Tier-1 Capital

Goodwill

Shortfall

Others
C) Total amount of Tier-2 capital (net of deductions from Tier 2 capital)

d) Total eligible capital

Page: 35

3.5.1 Conditions for maintaining regulatory capital

The calculation of Tier 1 capital, Tier 2 capital, and Tier 3 capital is subject to the following
conditions:
a) The amount of Tier 2 capital will be limited to 100% of the amount of Tier 1 capital.
b) 50% of revaluation reserves for fixed assets and securities eligible for Tier 2 capital.
c) 10% of revaluation reserves for equity instruments eligible for Tier 2 capital.

d) Subordinated debt shall be limited to a maximum of 30% of the amount of Tier 1 capital.
e) Limitation of Tier 3: A minimum of about 28.5% of market risk needs to be supported by
Tier 1 capital. Supporting of Market Risk from Tier 3 capital shall be limited up to maximum
of 250% of a banks Tier 1 capital that is available after meeting credit risk capital
requirement.

3.5.2 Eligible regulatory capital

In order to obtain the eligible regulatory capital for the purpose of calculating Capital
Adequacy Ratio (CAR), banks are required to make following deductions from their Tier-1
capital:
a) Intangible asset e.g., book value of goodwill and value of any contingent assets, etc. which
are shown as assets
b) Shortfall in provisions required against classified assets
c) Shortfall in provisions required against investment in shares
d) Remaining deficit on account of revaluation of investments in securities after netting off
from any other surplus on the securities.
e) Reciprocal/crossholdings of banks capital/subordinated debt artificially intended to inflate
the capital position of banks
f) Holding of equity shares in any form exceeding the approved limit under section 26(2) of
Bank Company Act, 1991. The additional/unauthorized amount of holdings will be deducted
at 50% from Tier 1 capital and 50% from Tier 2 capital.
Page: 36
g) Investments in subsidiaries which are not consolidated. The normal practice is to
consolidate subsidiaries for the purpose of assessing the capital adequacy of banking groups.
Where this is not done, deduction is essential to prevent the multiple uses of the same capital
resources in different parts of the group. The deduction for such investments will be 50%
from Tier 1 capital and 50% from Tier 2 capital. The assets representing the investments in
subsidiary companies whose capital had been deducted from that of the parent would not be
included in total assets for the purposes of computing the CAR

3.6 Calculation of Capital Adequacy Ratio

In order to calculate CAR, banks are required to calculate their Risk Weighted Assets (RWA)
on the basis of credit, market, and operational risks. Total RWA will be determined by
multiplying the amount of capital charge for market risk and operational risk by the
reciprocal of the minimum CAR and adding the resulting figures to the sum of risk weighted
assets for credit risk. The CAR is then calculated by taking eligible regulatory capital as
numerator and total RWA as denominator.

3.6.1 Formula for calculating Capital Adequacy Ratio:

Capital Adequacy Ratio = 1 + 2 By

Capital Adequacy Ratio for the year 2012= 827.37+126.08 By 7238.94 = 13.17%
Similarly,
Capital Adequacy Ratio for the year 2011 = 9.33%

Page: 37

Table-5
Years

Required CAR

CAR M

2011

10%

13

2010

9%

Table -6
NO.

Risk Weighted Assets (RWA)

A.

Credit Risk
5186.70

On Balance Sheet

1396.07

Off Balance Sheet

B.

Market Risk

C.

Operational Risk
Total RWA

Page: 38

3.7 Comparative Analysis of Capital maintained throughout the

year 2012
Particulars

31-03-2011

30-06-2011

30-09-2011

Capital Requirement

494.748

587.7783

720.833

Capital Maintained

496.23

887.54

925.04

Core Capital

406.88

760.07

790.14

Supplementary Capital

89.35

127.47

134.9

Core Capital to RWA

7.40%

11.64%

10.96%

Supplementary Capital to RWA

1.63%

1.95%

1.87%

Risk Weighted Assets

5497.20

6530.87

7208.33

5027.19

6000.64

6719.04

4015.52

4539.36

5124.81

1011.67

1461.28

1594.23

309.55

301.19

271.1

160.46

229.04

218.19

Capital Adequacy Ratio

9.03%

13.59%

12.83%

Minimum Capital Requirement

9%

10%

10%

1. Credit Risk
a) On Balance Sheet
b) Off Balance Sheet
2. Operation Risk
3. Market Risk

Page: 39
It may also be mentioned here that as per Basel II requirement, capital adequacy has been
maintained properly to support the investment policy, risk management policy and overall
growth of SIBL. From the table it is very clear that SIBL has been maintaining its capital
adequacy ratio adequately enough to cope up with the requirement. Total capital has
increased from Tk496.237 crore to Tk 953.45 crore (From quarter 31.12.2012 to 31.12.2012)
registering an increase of 92.14%. The bank is very much proactive to cope up with the
scenario and its Basel committee is well equipped to face the new challenges of capital
requirements of bank at any time.

3.8 Literature Review:

Capital Adequacy:
The significance of start-up and operating capital to any business cannot be over emphasized
and according to the submission of many financial theorists, the term capital is capable of
being a source of confusion because of the variety of meanings which can be assigned to it,
Ebhodage (1991), Greuningand Poratanovic (2003), and Satchindananda (2006). To the
economist, capital refers to real capital which is the stock of goods accumulated through
production while in business and finances, it is seen as financial capital which in itself
could sometimes mean both tangible and intangible capital; Klise(1972). On the other hand,
Arogundade (1999) defines capital as the owners stake in business and therefore a
commitment to its success. Opinion however, differs among experts in banking and finance
as to what constitutes capital adequacy; for instance Nwankwo (1991) submits that the
question of how much capital a bank needs to ensure the stakeholders confidence and sustain
healthy operations is determined by the supervisory and regulatory authorities.
Umoh (1991) noted that adequate capitalization is an important variable in business and it is
more so in the business of using other peoples monies such as banking. It is further stated
that insured banks must have enough capital to provide a cushion for absorbing possible
losses or provide, funds for its internal needs and for expansion, as well as ensure security for
depositors and the depositor insurance system. Regulators and bankers have also not reached
Page: 40
agreement as to what level of capitalization is adequate; for instance while regulators concern
themselves primarily with the safety of banks, the viability of invested funds, and stability of
financial markets, sbankers generally prefer to operate with less capital, as the smaller its
equity base the greater the financial leverage. Rose (1999) buttressed Kochs stand by stating
that even a bank with a low return on assets can achieve a relatively high return on equity
through heavy use of debt (leverage) and minimal use of owners capital. Kidwell et al
(2000), on the issue of capital adequacy observed banks and regulators differ because they
have different objectives. The primary goal of bank management is long term profit
maximization achievable through high leverage while bank regulators are more interested in
the risk of bank failures in general. Hence, bank regulators desire higher capital standards that
promote bank safety.

3.9 Impact of Adoption of Basel II in Social Islami Bank Limited

As Basel II implementation started in Bangladesh from 2010, the impacts of adoption are not
visible clearly yet. But, there will be some certain impacts. In the following those certain and
some potential impacts are discussed.

3.9.1 Improved Risk Management and Capital Adequacy

One aspect that the staunchest critics of Basel II agree to is the fact that it will tighten the risk
management process, improve capital adequacy and strengthen the banking system.

3.9.2 Impact on Customers

For SIBL, Basel II is an internal management exercise that does not directly affect customers.
However, there has been a good deal of talk about Basel II leading to greater risk-based
pricing in loan markets, as it increases the difference in capital required between risky and
safer lending categories. This could lead to riskier types of debt, such as consumer finance,
costing more relative to safer categories such as loan to large corporate house. From 2010,
management of the Bank decided to give preference to the client rated by ECAI. It also will
extend its credit towards the good rated borrower. This scenario will bar the poor rated client
to avail any loan.

Page: 41

3.9.3 Shorter Term to maturity of lending

Both the Basel I and II accords have a preference for short-term lending. This is because of
the ease in exiting the investment in case the situation turns adverse. Also the interest rates on
short term will also tend to be lower further incentivising such borrowings. For this reason,
SIBL is trying to attract shorter term borrowing to get the benefits. This shall impact both the
bank and ultimate borrowers because of the change in the interest rate term structure and the
need for Asset and Liability Management (ALM).

3.9.4 Impact on capital flows

Short Term lending will further increase the volatility of capital flows within Bangladesh,
from one bank to another. If any negative event occurs at any point of the flow, people will
get panicked. There would be a tendency to press the panic button at the smallest change in
the situation, further deteriorating it, leading to crisis.

3.9.5 Higher Interest Costs

Implementation of Basel II will force banks like Social Islami Bank to charge more interest to
risky customer as it has to keep some capital for that loan. On the other hand, there are few
good customers in Bangladesh, so every bank will want them as their customer. So,
competition will increase and interest rate will fall for the well rated borrower.

3.9.6 Competitive Advantage of Corporate Borrowers

Corporate Banking is the main operating business model of Social Islami Bank Limited. But,
in Basel II advantage has been given to corporate borrowers with good rating. As the good
clients number is limited, and competition is huge. SIBL may lose some of its customers.

Page: 42

3.9.7 Impact on Companies

The Shortened term funding of banks will find its way to the balance sheets of companies
because of the need for matching maturities. This would impact output levels in corporate and
skew the capital structure in favor of short term borrowings and working capital finance. The
Liquidity position and the companies ability to globalize would be hampered by this
difficulty in raising long-term capital.

3.9.8 The Vicious Circle of Curtailment of Credit to Developing

Countries

This is countrywide impact which will hit all the financial organization in Bangladesh.
Developing countries like Bangladesh usually has lower sovereign rating. The lower ratings
will reduce the availability of funds in the developing countries. This has the potential to
deteriorate the situation in these countries leading to further recession. The reduced market
access and high costs of funding will further impact the ratings of these countries leading to a
vicious circle with each aspect feeding the other in a downward spiral. In brief, these are
some of the impacts that are felt and will be felt in future as SIBL and other banks adopt
Basel II.

3.10 Risk Management:

The management of Social Islami Bank acknowledges that risk is an integral part of business
and attaches due importance to various risks involved in the banking business. The Board of
Directors of the bank has endorsed the views of the management and instructed to implement
in line with the directives of Bangladesh Bank. The bank has also taken initiatives to structure
the banking activities in line with Bangladesh Banks risk management guidelines. The risk
management of the bank covers a wide spectrum of risk issues and the six core risk areas of
banking i.e. investment risk, foreign exchange risk, internal control & compliance risk,
money laundering risk, ICT risk and asset liability management risk have already been taken
care of by SIBL. The bank is much concerned about the business risk and its proper
Page: 43
management so that the risk and return could be optimizes and management would pay
special attention to reduce the risk to an acceptable level apart from prudent control over the
Banks assets. These issues are periodically reviewed and examined by the Audit &
Inspection Department and Board Audit Cell as well as by the Senior Executive of the Bank.
According to Basel II stet, risk management is also a part of maintaining adequate capital.
Since market risk and operational risk are a part of risks involved in banking operation as
well as Basel II accord, risk management plays a key role in maintaining mandatory capital
adequacy. The bank management has taken it very seriously and established separate team to
manage the risks.

3.11 Capital Management:

The bank started its journey in the year 1995 with a paid up capital of Taka 118.36 million
and thereafter within 16 years it has built a total capital of Taka 9,534.52 million using the
external and internal sources. The table given below is the last 5 years history of SIBLs
capital journey efforts:

Year

Paid up Capital

Total Capital

Growth (over the

previous year)

Source of C

2008

1,119.55

1,870.94

65.86%

Internal & e
generation

2009

1,309.88

2,168.22

15.89%

Internal gen

2010

2,691.72

3,914.62

80.54%

Internal & e
generation

2011

2,987.81

4,678.56

19.52%

Internal gen

2012

6,393.93

9,534.52

103.79%

Internal & e
generation

Page: 44

Part 4

Findings
Of The
Study
Page: 45

4.1 Findings of the Study

After the completion of the report it is assumed that the report writer get some
finding regarding few points from his report. As like from above report
following findings are found:
1.A measure of the financial strength of a bank or securities firm, usually expressed as a ratio
of its capital to its assets is called capital adequacy.
2. Social islami bank limited maintained its capital well during the year 2010 and 2011.
During

these two years the bank has maintained its capital more than it required. This

shows that bank has perfectly followed the rules under Basel II.
3. Capital adequacy has been maintained properly to support the investment policy, risk
management policy and overall growth of SIBL
4. SIBL has been maintaining its capital adequacy ratio adequately enough to cope up with
the requirement. Total capital has increased from Tk496.237 crore to Tk 953.45 crore (From
quarter 31.12.2012 to 31.12.2012) registering an increase of 92.14%.
5. The bank started its journey in the year 1995 with a paid up capital of Taka 118.36 million
and thereafter within 16 years it has built a total capital of Taka 9,534.52 million using the
external and internal sources.
6. In order to calculate CAR, banks are required to calculate their Risk Weighted Assets
(RWA) on the basis of credit, market, and operational risks. Total RWA will be determined by
multiplying the amount of capital charge for market risk and operational risk by the
reciprocal of the minimum CAR and adding the resulting figures to the sum of risk weighted
assets for credit risk. The CAR is then calculated by taking eligible regulatory capital as
numerator and total RWA as denominator.

Page: 46
7. Holding of equity shares in any form exceeding the approved limit under section 26(2) of
Bank Company Act, 1991. The additional/unauthorized amount of holdings will be deducted
at 50% from Tier 1 capital and 50% from Tier 2 capital.

8. SIBL has been generating most of its incremental capital from retained profit (stock
dividend, right share issue and statutory reserve transfer etc.) to support incremental growth
of Risk Weighted Assets (RWA). Therefore, the Banks Capital Adequacy Ratio (CAR)
remained consistently within the comfort zone under Basel II during 2012. (This was 13.17%
against required MCR of 10% in December, 2012)

Page: 47

Part 5
Lesson Learned
From The
Internship Report
Page: 48

5.1 Summary Of Lessons Learned

Form my experiences; I can say that I really enjoyed my internship period in the Satarkul
Road branch of Social Islami Bank Ltd. From the very first day, I was confident that this 08
weeks internship program will definitely help me to realize my further carrier in the job
market. All is not so sufficient to measure and express perfectly within this short time of my
internship period. But it was a great opportunity for me to get used to Banking Procedure of
Social Islami Bank. I have tried by soul to incorporate the necessary relevant information in
my report. During the course of my practical orientation I have tried to learn the practical
banking to relate it with theoretical knowledge, what I have gathered and going to acquire
from various courses. Followings are some of the lessons I have learned from my internship
program.

5.2 Culture
Every organization has its own culture at the same time this company do have their own
organizational culture. Within a very few days I successfully adapted their culture. I have
acquired a tremendous upgrade in my self assessment criterion, now I optimized my
confidence level in a way that gives me hidden backup of working in such an organization. I
also learned maintaining time, working under pressure and cope up with different types of
people.

5.3 Working Environment

This company has good working environments. This is very motivating to an employee. A
good working environment results hi better performance. The rights of both employee and
employer are strictly maintained so both parties are secured. High level of work ethics is
evident among the employees. Employees feel free to work at any given level of pressure.
My coordinator and supervisors were very helpful in assisting me. They never misbehaved if
I made any mistakes rather they helped me to correct things. Peers were very friendly and it
was exciting to learn from them.
Page: 49

5.4 Communication
Throughout the internship program one of the most valuable and important thing I learned is
how to communicate. This company highly emphasize on communication, they prefer virtual
communication rather than faced to face communication. For an example they informed me
the entire schedule earlier and asked if I am comfortable with that. I could change the
schedule by informing them through email or direct call. If I was late all I needed to do was
to text them or email them. They quickly responded to any sort of communication and that
was the best part.

5.5 Time Management

One of the good things that I have learned from the experience is time management. I badly
needed to learn the tune management because I had faced serious problems to manage both
my work and study. For example while working in there we had to do work on priority basis.
We had to make a list of work a week advance or more on the basis of importance then mark
on the calendar or create notes in the cell phone or notepads. This gives a clear idea of the
schedule. The benefit of the process is job breaking in small parts with estimated time. This
highly increases the efficiency and performance and reduces time wastage. Time management
skills helped me a lot to cope up with big assignments and important meetings

5.6 Networking
It is useless being qualified and not having any important contacts. This is how it works in
anywhere in the country. We practice the similar things in our company. Social Islami Bank
Ltd. was helpful in teaching me how to network because I had to attend the board meeting
with directors, member and senior employees. They knew me for my performance and
offered me different opportunities for my performance. I was greatly benefited by this skill.
They are given high level of importance not only into a university but also outside the
university as they have strong networks. I had a great opportunity to know some of professors
personally for my performance and they ensured me to refer when I need them. I am still in
contact with them.
Page: 50

5.7 Customer Service

I worked at General Banking department but still I had to do attend clients to provide service.
It was mandatory for every intern. It was necessary because if I did not know the clients well
then how am I going to serve them better. I learned how to communicate with them. Then it
helped me to give better services. I learned how to handle difficult situations with the clients.
Attending clients gave an overview of demands and needs of them to enhance the
satisfaction.

5.8 Professionalism
Working at the company taught me to be a professional. They highly emphasize on
professionalism. It is also one of the standards to fulfill requirements. They are casual but
very professional on their jobs. The professionalism increases the efficiency and reduces the
errors which ensure standard and quality service as a result maximum client satisfaction is
received. It is all about being accurate, reducing mistakes, following standards and acting as
situations demands. For example when I made mistakes never showed nervousness to the
clients rather solved the problem normally which did not hamper the trustworthiness and
satisfaction was ensured.

5.9 Other Activity:

Through this period I have learned how to maintain office time.
Now I am more careful about my dress code.
As a potential candidate in the job market, I have learned how to deal with organizational
environment.
It was an opportunity to get prepared for my professional career.

Page: 51

Part 6
Concluding
Statements

Page: 52

6.1 Conclusion
Nations trade with each other basically for the same reasons that individual trades with each
other. International trade is an undetectable part of our economy. Social Islami Bank Ltd.
having cutting edge technology, tailored solutions for business needs, global reach in trade
and commerce and high yield on investments is the preferred choice in banking for friendly
and personalized services. It has the efficient trade operation facilities and wide spared
network for international trade settlement. Social Islami Bank finances in international trade
both in pre shipment and post shipment stages. It offers wide range of products and services
in trade finance. Trade operation of Social Islami Bank is very efficient which enabled it to
grow at a significant rate. But in the year 2011-2012, with correlation of the overall
international trade of our country, trade operation business of Social Islami Bank also went
down. Most concerning fact is it is losing market share both in export and import operation.
But todays business world is a continuous competitive area and needs more concentration on
some specific fields. Proper initiative has been taken by Social Islami Bank authority to come
out of this situation and in now international operation business is expected to increase. If
Social Islami Bank authority can formulate proper strategy it will enable the bank to position
itself into the benchmarking position in the country and in the south Asian region. To do so,
Social Islami Bank Limited Needs to go long way.

Page: 53

6.2 Recommendation:
As SIBL has taken all the steps to implement Basel II and maintained it in a proper way, it is
little difficult to recommend. But still I have come up with the following recommendation:
SIBL should look for comprehensive IT solution for Basel II. Bangladesh will go to
implement the foundation IRB approach in 2012 and this approach requires extensive
Management Information System.
The Bank should recalculate its lending rate on a periodic basis to cope with changing
lending scenario caused by Basel II.
The Bank should introduce Risk Based Pricing. For this, Credit officer must be skilled
enough to understand the procedure.
As there are few good customers in the market, extra attention should be given to them as
intense competition is taking place.
The Bank should concentrate more on short term lending as it charges less capital
according to Basel II.
To be fully compliant with Basel II requirements, the bank should develop historical
databases on probability of default (PD) and loss given default (LGD). Such databases will
enable the bank to compute expected loss (EL) from any new credit approval.
For credit risk mitigation purpose, the collateral accepted by Basel II only, should be taken
as security.
An investigative review should be carried out on significant cases. The review should
enable the bank to understand better how problem credits and losses develop and identify
weaknesses in the banking institutions existing credit-granting process and monitoring
process.
Page: 54

Reference:
http://www.siblbd.com/html/homepages.php
http://www.siblbd.com/download/Disclosure_Framework_DEC_2
011.pdf
http://www.scribd.com/doc/16554091/104/D-CAPITALADEQUACY-RATIOS
http://blog.crottaz-finance.ch/wpcontent/uploads/2010/05/01_risk.pdf
http://pages.stern.nyu.edu/~igiddy/articles/capital_adequacy_calc
ulation.pdf
http://en.wikipedia.org/wiki/Capital_adequacy_ratio
http://en.wikipedia.org/wiki/Basel_II
http://www.bis.org/publ/bcbsca.htm
http://www.fsa.go.jp/frtc/english/e_nenpou/2005/03e.pdf
http://www.riksbank.se/upload/dokument_riksbank/kat_publicer
at/artiklar_pv/lind.pdf
http://www.finance-glossary.com/define/capitaladequacy/1680/0/C
http://www.bis.org/bcbs/cp3part2.pdf
http://www.mayerbrown.com/public_docs/Baselarticle.pdf Annual
Report of Social Islami Bank Ltd 2012

Annual Report of Social Islami Bank Ltd 2011

Page 55

Appendices

List of banks in bangladesh

State-owned commercial banks
Agrani Bank
Sonali Bank
Rupali Bank
Janata Bank

Private commercial banks

Uttara Bank Limited
Mutual Trust Bank Limited
Dhaka Bank
Eastern Bank Limited
Dutch Bangla Bank Limited
Pubali Bank Limited
IFIC Bank Limited
National Bank Limited
The City Bank Limited
NCC Bank Limited
Mercantile Bank Limited
Prime Bank Limited
Southeast Bank Limited
Standard Bank Limited
One Bank Limited
Bangladesh Commerce Bank Limited
The Premier Bank Limited
Bank Asia Limited
Trust Bank Limited
Jamuna Bank Limited
AB Bank Limited
NRB Commercial Bank Limited

NRB Bank Limited

Meghna Bank Limited
Farmers Bank Limited
Modhumoti Bank Limited

South Bangla Agriculture and Commerce Bank Ltd

Midland Bank Limited
United Commercial Bank Ltd
BRAC BANK LIMITED
Islami commercial bank
Islami Bank Bangladesh Ltd
Shahjalal islami bank ltd
First Security Islami Bank Limited
Export Import Bank of Bangladesh Limited
Al-Arafah Islami Bank Limited
Social Islami Bank Limited
ICB Islamic Bank
Union Bank Limited

Foreign commercial banks

Citibank NA
HSBC
Standard Chartered Bank
Commercial Bank of Ceylon
State Bank of India
Habib Bank Limited
National Bank of Pakistan
Woori Bank
Bank Alfalah

Specialized development banks

Bangladesh Krishi Bank
Rajshahi Krishi Unnayan Bank
Bangladesh Development Bank Ltd
BASIC Bank Limited

Land development bank

Progoti Co-operative Land Development Bank Limited (progoti Bank)

Non-banking financial institutions

Uttara Finance and Investments Limited
United Leasing Company Limited (ULCL)
Union Capital Limited
The UAE-Bangladesh Investment Co. Ltd
Saudi-Bangladesh Industrial & Agricultural Investment Company Limited (SABINCO)
Reliance Finance Limited
Prime Finance & Investment Ltd
Premier Leasing & Finance Limited
Phoenix Finance and Investments Limited
People's Leasing and Financial Services Ltd
National Housing Finance and Investments Limited
National Finance Ltd
MIDAS Financing Ltd. (MFL)
LankaBangla Finance Ltd.
Islamic Finance and Investment Limited
International Leasing and Financial Services Limited
Infrastructure Development Company Limited (IDCOL)
Industrial Promotion and Development Company of Bangladesh Limited(IPDC)
Industrial and Infrastructure Development Finance Company (IIDFC) Limited
IDLC Finance Limited
Hajj Finance Company Limited

GSP Finance Company (Bangladesh) Limited (GSPB)

First Lease Finance & Investment Ltd.
FAS Finance & Investment Limited
Fareast Finance & Investment Limited
Delta Brac Housing Finance Corporation Ltd. (DBH)
Bay Leasing & Investment Limited
Bangladesh Industrial Finance Company Limited (BIFC)
Bangladesh Finance & Investment Co. Ltd.
Agrani SME Finance Co. Ltd.