Investment Mechanism in Islami Bank Limited

Investment Mechanism of Islami Bank Bangladesh Limited
1. INTRODUCTION
1.1 Origin of the Report The report is for the partial fulfillment of the course requirement as the internee students in the BBA Program different universities. We have completed our 60 days internship program from Islami Bank Bangladesh Limited, Head Office Complex Corporate Branch. The internship program in Islami Bank Bangladesh Limited is designed into two phases: 10 days in Islami Bank Training and Research Academy (IBTRA) and the remaining period in branches to gather practical knowledge about Islamic Banking as well as enrich knowledge about Islamic banking, Islamic economy and different aspects of Islam. 1.2 Research Topic ]The topic of the research is Investment Mechanism of IBBL. Islami Bank Bangladesh Limited is the leading profit achieved private commercial bank in the country. The research is conducted to find out the core investment mechanisms through different modes of investment in different sectors of the country and the secret behind their success. At the end it is identified how far they are from their target that they fixed. Beside these, the research also attempts to other core issues related with the performance of Islami Bank Bangladesh Limited. 1.3 Problem Statement Lack of adequate knowledge in the field of Islamic Banking, their activities and area of performance among the citizens of Bangladesh - encouraged us to conduct our research in such topic. 1.4 Objectives This report consists of two core parts with different related objectives which are mentioned below 1.4.1 Organization Part o To outline the concept of Islamic Banking o To trace out the history and operation of Islamic Banking in Bangladesh o To study the difference between the traditional banking system and the Islamic banking system o To realize the ultimate goal of Islamic banking 1.4.2 Project Part o To identify all the investment mechanisms followed by the Islami Bank Bangladesh limited o To identify all the modes of investment followed by Islami Bank Bangladesh Limited prior to other conventional Banks in Bangladesh o To indicate the special schemes under investment modes of Islami Bank Bangladesh Limited o To identify the problems faced by Islami Bank Bangladesh Limited regarding investment o To give recommendation to overcome the problems and for further improvement
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1.5 Methodology 1.5.1 Source of Data Both primary and secondary data sources are used for the study:
Primary data: These types of information were collected by interviewing knowledgeable

personnel working in different departments of the organization. The designations of the interviewed persons within the organization are: o Senior Vice President and Manager of IBBL, Head Office Complex Corporate Branch o Assistant Vice President and 2nd officer of IBBL, Head Office Complex Corporate Branch o Other employees of IBBL, Head Office Complex Corporate Branch o Different faculty members of IBTRA
Secondary data: Secondary data are gathered from the Annual report of the Bank, website of
Islami Bank and other published materials from the Public Relation Department of Head Office and different course materials of different faculty members of IBTRA. 1.5.2 Literature Survey Extensive literature survey has been done to gather theoretical knowledge for the research problem. The literature survey includes the academic journals, Annual reports, booklets and lecture sheets of IBTRA. Different books of prominent Islamic economists also studied thoroughly to get the clear concept about Islamic banking. 1.5.3 Research Design The research has an exploration purpose. The research design is a flexible one that provides opportunity for considering many different aspects of the research problem. The needed information for the research is collected from both primary and secondary source, which are described later. The information thus collected has been analyzed with due guideline by the supervisors both at Islami Bank Bangladesh Limited and our universities. 1.5.4 Data Collection Method The data collection methods used are as follows:
Interview: Extensive interview has been conducted within the organizations to find out their
past and present experience of banking. The senior officials in the banking industry are also interviewed to get the industry point of view.
Study: The secondary data source has been studied to find out the data needed.
1.5.5 Analysis of Data As the research is descriptive in nature, the collected data is converted into presentable statement. The opinions and views gathered are converted to past trends and future predictions of the banking industry. 1.6 Scope and Limitations Despite the diligent efforts that have given in preparation of this report, we have only succeeded to skin the surface of the ocean of the subject. Therefore the views expressed in this report are likely to be limited by our lack of extensive knowledge and understanding. The followings are the limitations that we have faced during the research:
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1. 2. 3. 4. 5. 6. 7.
Non-cooperation from some of the vital sources. Lack of adequate relevant formal research work on Islamic Banking. The bank confidentially keeps the data. The data that seems insufficient may be suffering from lack of reliability to some extent. Lack of depth knowledge and analytical ability for writing such report. Time constraint. Budget. 1.7 Report Organization
The report is organized primarily in two broad parts, one is the organization part and the other is the project part. In the organization part the bank, Islamic banking concept in Bangladesh as well as around the world, IBBLs functional departments, services, m anagement practice and organizational climate is described briefly. In the project part overall investment policies are described elaborately with overall mechanisms and modes of investment of IBBL in comparison with other banks in the industry is analyzed.
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2. ISLAMIC BANKING IN THE WORLD

2.1 Calls for Islamic Banking For an expanding economy, a developed and efficient banking system is indisputable. Among others, it helps transfer of financial resources from surplus units to deficit units and, hence, accelerates the pace of development by securing uninterrupted supply of financial resources to people engaged in numerous economic activities. Both commercial banks and other development financial institutions provide short, medium and long term credits to businesspersons and entrepreneurs who usually take the lead in the ventures of economic development. Institutional supply of credit has been made possible by a system of financial intermediation organized in a way where conventional banks collect small savings from public by offering them a fixed rate of interest and advancing the loan able funds out of the deposited money to enterprising clients charging relatively higher rates of interest. The margin between these two rates is the banks income. In addition, banks also provide other services to the public for which it charges service charges. Despite the outstanding contribution of the conventional (interest based) banking system several ancient and modern economists are critical about its efficiency level. Some economists consider the role of interest in the conventional banking mechanism as a major negative factor that contributes to the cyclical fluctuation in the economy (Minsky, 1982). More recent concern over the potential instability of the world monetary and financial system was expressed by Maurice Allais, a noble laureate, in the Called for an U rgent Reform of the World Economic Order (Allais 1993, p. 13-16). Others vehemently oppose the argument for using the rate of interest as a stabilizing tool in the economy (Saud 1980, p. 18). These called for the emergence of a new system of banking capable taking new challenges that the present world of economy, particularly the financial sector has been facing. To create a sound economic system all the nations of the world urge to fashion and design their economic lives in accordance with the precepts of Islam. In this regard all the conventional banks are trying to reform their financial structure according to the light of Islam. 2.2 Meaning of Islamic Banking An Islamic bank is a financial institution that operates with the objective to implement and materialize the economic and financial principles of Islam in the banking arena. The definition of Islamic Bank, as approved by the General Secretariat of the OIC is stated in the following manner, An Islamic Bank is a financial institution whose status , rules and procedures expressly states its commitment to the principle of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operation (Ali, M and Sarker, A. A. 1995) Dr. Shawki Ismail Shehta viewing the concept from the perspective of an Islamic economy and the prospective role to be played by an Islamic bank therein opines that It is therefore natural and, indeed, imperative for an Islamic bank to incorporate in its functions and practices commercial investment and social activities, as an institution designed to promote the civilized mission of an Islamic economy (ibid). It appears from the above definitions that Islamic banking is a system of financial intermediation that avoids receipt and payment of interest in its transactions and conducts its operations in a way that it helps to achieve the objectives of an Islamic economy. Alternatively, this is a banking system whose operation is based on Islamic principles of transactions of which profit and loss sharing (PLS) is a major feature, that ensuring justice and equity in the economy. That is why Islamic banks are often known as PLS- banks.
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2.3 Objective of Islamic Banking The objectives of Islamic banking are not only to earn profit, but 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. Islamic banks operate on Islamic principles of profit and loss sharing, thus strictly avoiding interest, which is the root of all exploitation and is responsible for large-scale inflation and unemployment. An Islamic bank is committed to do away with disparity and establish justice in the economy, trade, commerce and industry; build socioeconomic infra structure and create employment opportunities. 2.4 Islamic Banking Movement around the World The expansion and unfolding of Islamic banking along with traditional interest based banking is a recent phenomenon. Islamic banking is an inseparable part of Islamic economy. During the fifties it was only a subject matter of research and was limited to the writings of scholars and philosophers. During the sixties actual experiments were made and in the seventies Islamic banking institutions started gaining strength. The eighties and nineties are the period of consolidation and now Islamic banking is coming up as the only welfare banking system of the modern world.
The first attempt: Interestingly, the concept of Islamic Banking is several decades old. The first
attempt to establish an Islamic financial institution took place in Pakistan in the late 1950s with the establishment of a local Islamic bank in a rural area (Wilson 1983). Some pious landlords who deposited funds at no interest, and then loaned to small landowners for agricultural development initiated the experiment. The borrower did not pay interest on the credit advanced, but a small charge was levied to cover the bank's operational expenses. The charge was far lower than the rate of interest.
The second attempt: The second pioneer experiment of putting principles of Islamic banking
and finance into practice was conducted in Egypt from 1963 to 1967 through the establishment of the Mit Ghamar Savings Bank in a rural area of the Nile Delta. The experiment combined the idea of German savings bank with the principles of rural banking within the general framework of Islamic values (Ahmed 1992). The bank's operation was based on the same Islamic principle i.e. no-interest to the depositors or from the borrowers. Unlike the Pakistani bank, the borrower had to have deposits in the bank in order to request a loan. The experiment soon became successful, more branches were opened in different parts of the country, and the amount of deposits increased. Hence, what started as a single bank operation expanded to form a network of local savings banks. Although the project made a good start and initial results were more than encouraging, it suffered a setback owing to charges in the political atmosphere. Nevertheless, the project was revived in 1971 under the name of Nasser Social Bank. This was the first Islamic bank in an urban setting based in Cairo. The bank was a public authority with an autonomous status (Ahmed 1992). The principles of operation of the Nasser Social Bank were very similar to those of the Mit Ghamar Savings Bank. However, the latter offers a full range of normal banking services and a wide range of investment activities through equity participation (Ashker 1987, pp. 18-35).
Tabung Hajji: a successful attempt- Islamic banking, with a very different approach
contemporary to that in Egypt, emerged in Malaysia. It was a financial institution developed for the pilgrims of Malaysia. These institutions were established in response to what was the contention of the Malaysian Muslims that money spent on pilgrimage must be clean and untamed
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'with Riba, since this was not possible created. Consequently, Pilgrims Savings Corporatio n was established in 1963, which was later on incorporated into the Pilgrims Management Fund Board (Tabung Hajji) in 1969 (A. Ahmad 1993).
Other attempts: Next to follow was the Dubai Islamic Bank in 1975. The Dubai Islamic Bank is
a public limited company having its office Dubai, U.A.E. with capital of 50 million Dirhams. Since then, a number of Islamic banks and financial institutions have been established in different parts of the world and have been functioning successfully. A significant development in Islamic banking has been the granting of an Islamic bank license in Saudi Arabia to the fifty-year old ''Al-Rajhi Company", a firm noted for its currency, exchange and commercial activities, whose assets exceed $ 5 billion. The firm started operation in 1985 under the name of "Al-Rajhi Banking Investment Corporation" and has since developed active relationships with major manufacturing and trading companies in Europe and several U.S. corporations. (Mangia, Uppal & Swiimy, 1988, p. 54). An example of multi-cooperation at the government level in the field of Islamic banking is the Islamic Development Bank, which was founded in 1975 as a multi-national corporation by several Muslim countries. The purpose of the bank is to support and economic development in Muslim nations within an Islamic Framework. A second example of Islamic banking in the West comes from Luxembourg, where the Islamic Banking System International Holding was established in 1978 as a joint-stock company. Its purpose was to establish international Islamic banks in different parts of the western countries where there are communities of Muslims, and to participate in investment projects in Islamic and non-Islamic countries.
Dar-al-mul-al-Islami (DM1), based in Geneva, was established in 1981. DMI aims to foster an
Islamic financial system based on equity and social justice by incorporating three types of institutions including banking of the 1970s. The movement was made to establish Islamic financial institutions side-by-side with traditional banking. In such attempts, two types of institutions were evolved: Islamic banks were established mostly in Muslim countries; and Islamic investment and holding companies started in some Muslim but mostly in non-Muslim countries. The process of Islamization of Islamic banking in Iran has proceeded in three distinct phases: Nationalization, restructuring and reorganization of the entire banking system characterized phase one taking place between 1979 and 1982. (Khan & Minikhor 1989). The second phase began in 1982 and lasted until 1986. It was a phase primarily characterized by adoption of legislative and administrative steps in order to implement a clearly articulated model of Islamic banking (Iqbal & Mirakhor 1987, p. 106). The third phase, which continues till now, began in 1986. This phase defines the role of the Islamic banking system differently from the earlier phases- The system is now expected to be an integral part of the Islamic government, and thus a direct instrument of its policies. Pakistan adopted a policy of gradual transformation of its banking system from February 1979 after several years of study and preparation by the government-appointed Council of Islamic Ideology (CII). The process started when the President of Pakistan announced that interest was to be removed from the economy within a period of three years. Three of the specialized credit institutions - the House Building Corporation, National Investment Trust, and Mutual Trust Funds of Investment Corporation of Pakistan - were to remove interest from then financing operations immediately.
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2.5 Islamic 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, the then President of People's Republic of Bangladesh while 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 the 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 country's 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 and 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, some other Islamic Banks, Islamic Insurance Companies and Financial Institution were established in the country. They are: Name of the Islamic financial institutions Al-Baraka Bank Limited (ICB Islami Bank Limited) Al Rajhi Banking Investment CorporationSaudi Arabia Al Arafah Islami Bank Limited Social Investment Bank Limited Shamil Bank of Bahrain EC (Islamic Bankers) Shahjalal Islami Bank Limited Shamil Bank of Bahrain EC (Islamic Bankers) EXIM Bank Limited (Converted to Fully Islamic) First Security Bank Limited (Converted to Fully Islamic) Time of incorporation 20 May 1987 1985 27 September 1995 22 November 1995 1997 10 May 2001 1997 2003 2006
Again some interest based traditional banks like Prime Bank Ltd, Dhaka Bank Ltd, Southeast Bank Ltd, The Hong Kong and Shanghai Banking Corporation Limited (HSBC) introduced their Islamic banking branches in the country. At present, in parallel with their interest-based banking, many conventional banks operate Islami banking through their Islami banking branches.
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3. ISLAMI BANK BANGLADESH LIMITED

3.1 Corporate Information (2011) Date of Incorporation Inauguration of First Branch Formal Inauguration Authorized Capital Paid up Capital Branches Deposits Investments Import Export Remittance Manpower Number of Shareholders ATM Booth Chairman Managing Director Company Secretary Auditors : : : : : : : : : : : : : : : : : : 13th March, 1983 30th March, 1983 12th august, 1983 Tk. 20,000.00 Million Tk. 10007.71 Million 266 Tk. 341,361.00 Million Tk. 341,031.00 Million Tk. 301,207.00 Million Tk. 178,244.00 Million $ 2,896.93 Million 12000 63,001 1035
Prof. Abu Nasser Muhammad Abduz Zaher Mohammad Abdul Mannan Abu Reza Md. Yeahia (C.P.) M/S. Howladadar Yunus & Co. and M/S. S.F. Ahmed & Co.
REGISTERED OFFICE Islami Bank Tower 40, Dilkusha Commercial Area Dhaka-1000, Bangladesh, GPO Box No.: 233 Phone: PABX-9563040 (Hunting 8 Lines), 9560099, 9567161, 9567162,9559417 Telex: 671620 IBANKBJ Fax : 9564532, 9568634, Cable : ISLAMIBANK S.W.I.F.T:IBBLBDDH E-mail: ibbl@ncll.com, ibbl@agni.com website: www.islamibankbd.com 3.2 Mission o To establish Islamic Banking through the introduction of a welfare oriented banking system and also ensure equity and justice in the field of all economic activities, achieve balanced growth and equitable development through diversified investment operations particularly in the priority sectors and less development areas of the country. To encourage socio-economic development and financial services to the low-income community particularly in the rural areas.
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3.3 Vision o o The vision of IBBL is to always strive to achieve superior financial performance, be considered a leading Islamic Bank by reputation and performance. Banks goal is to establish and maintain the modern banking techniques, to ensure the soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professionals, working for the benefit of people, based upon accountability, transparency and integrity in order to ensure stability of financial systems. Bank will try to encourage savings in the form of direct investment. Bank will also try to encourage investment particularly in projects which are more likely to lead to higher employment. 3.4 Aims and Objectives o o o o o o o o o To conduct interest-free banking To establish participatory banking instead of banking on debtor-creditor relationship To invest through different modes permitted under Islamic Shariah To accept deposits on profit-loss sharing basis To establish a welfare-oriented banking system To extend co-operation to the poor, the helpless and the low-income group for their economic development To play a vital role in human development and employment generation To contribute towards balanced growth and development of the country through investment operations particularly in the less developed areas. To contribute in achieving the ultimate goal of Islamic economic system 3.5 Management of IBBL Islami Bank Bangladesh Limited is managed by a 16-member board of directors. Of the directors 3 are foreigners and 10 are local. A 8-member executive Committee, formed by the Board of Directors for efficient and smooth operation of the bank of them 2 are foreigners. Besides a management committee looks after the affairs of the bank. 3.6 SWOT Analysis SWOT analysis is an important tool for evaluating the companys strength, weaknesses, opportunities and threats. It helps the organization how to evaluate its performance and scan the micro environment, which intern would help the organization to navigate in the turbulent ocean of competition. 3.6.1 Strengths Some of the core strengths of Islami Bank Bangladesh Limited (IBBL) are given below: o Company Reputation: Islami Bank Bangladesh Limited (IBBL) has already established a favorable reputation in the banking industry of the country. Within a period of over twenty one years, IBBL has established a firm footing in the banking sector having tremendous growth in profits and deposits. o Sponsors: IBBL has founded by a group of eminent entrepreneurs among which 19 Bangladeshi national, 4 Bangladeshi institutions and 11 banks, financial institutions and
o o
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government bodies of the Middle East and Europe including IDB and two eminent personalities of the Kingdom of Saudi Arabia. Therefore IBBL has a strong financial strength and is build upon a strong foundation. PLS Banking System: Instead of creditor-debtor relationship between the client and the bank of conventional banks in the industry IBBL ensures a partner-partner relationship with its clients. Under this system, bank share the profit as per agreement and loss (if any) as per equity or agreement. Leadership: At IBBL, eminent banker Prof. Abu Nasser Muhammad Abduz Zaher as the chairman of the bank heads the management team. His years of banking experience at IBBL and others have enabled him to navigate the organization in the turbulent ocean of fierce competition ant taking IBBL in the new millennium. Like the chairman, the top management of the bank is also a major strength for the IBBL and has contributed heavily towards the growth development of the bank. Facilities and Equipments: IBBL has adequate physical facilities and equipments to provide better service to the customers. The bank has computerized banking operations, counting machine in the teller counter, computerized statements for the customers as well as for the internal use of the banks are also available. Head Office Complex, Local Office and Foreign Exchange Branch use online banking facilities for inter branch communication and other branches of Dhaka city will be under the network soon. Shariah Council: IBBL has its own Shariah Council for guiding and supervising the implementation and compliance of Islamic Shariah principles in all branches activities of the bank since its very inception. The council consists of prominent Ulama, reputed banker, renowned lawyer and eminent economists, meet frequently and deliberate on different issues confronting the bank on Shariah matters. Islami Bank Foundation: Islami Bank has a separate welfare oriented institution called Islami Bank Foundation which contributes in the welfare of depressed people in the society through various packages. The elaborate description of the foundation is given later in separate section. Number of Branches: IBBL has the highest number of branches among the PCBs around the country. The total number of branches is 266 at the end of the year 2011 and the number will increase in the future. In all the branches IBBL has an interactive corporate culture. Its work environment is very much friendly, interactive and informal.
3.6.2 Weaknesses Some of the basic weaknesses of Islami Bank Bangladesh Limited (IBBL) are given below: o Advertising and Promotion: It is a major setback for IBBL and one of its weakest areas. IBBL does not pursue on aggressive campaign. It does not express itself to the general public and are not in lime light unlike other banks except some special magazine. Although it published different booklets about its products and services and there is also Islamic Banking Magazine but there are no billboards and advertisements in the public newspapers and magazines. o Disguised Employment: This is also become a growing problem of IBBL. There are people who are only drawing salaries at the end of the month but making a minimum contribution towards the organization. On the other hand there are also people who work hard but are not apprised accordingly. o Poor Service Quality: The quality of service delivered to the customers in most of the department and in most of the branches is very law. Recently some Private Commercial Banks have established in the country for the last five to ten years with their upgraded and standard service to the customers. But IBBL remains with their traditional service
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quality which seems inadequate compared to the competitors in the industry. If this trend continues, IBBL will soon fall into the category of the traditional banks. Low Remuneration Package: Te remuneration package for the entry level and mid level management is considerably low compare with pay structure of the other PCBs in the industry. Under this low pay structure it will be very difficult to attract competent MBAs in the near future for IBBL. Lack of Qualified System Operators and Computer Operators: IBBL need some qualified system operators and computer operators to coup up with the existing demand of the customers. The online banking system is not introduced yet. Too Much Paper Work: As an interest free bank IBBL has to engage in direct buying and selling unlike other conventional banks. As a result they have to maintain so many paper and agreement or deal with its customers and investors. This too much paper work makes the service slower than other banks in the industry.
3.6.3 Opportunities Some of the significant opportunities of Islami Bank Bangladesh Limited (IBBL) are given below: o Diversification: IBBL can pursue a diversification strategy in expanding its current line of business. The management can consider option of starting merchant banking or diversify in to insurance. By expanding their business portfolio, IBBL can reduce their risk. o Online Banking: IBBL can move towards the online banking. It is the high time that they go for this because the foreign banks as well as some local banks have already introduced online banking system and their customers are benefited from that. o Credit Cards and Tele-banking: These are the new retail banking services provided by the foreign banks. These are the new development in the banking sector and IBBL can evaluate the option of launching credit cards and tele-banking system. o New Products and Services: IBBL has the opportunity to introduce new investment schemes for the different sector of the country and at the same time it can introduce various welfare services for the poor and deprive people of the country through the foundation. 3.6.4 Threats Some of the big threats of Islami Bank Bangladesh Limited (IBBL) are given below: o Multinational Banks: The emergence of multinational banks and their rapid expansion becomes a threat to the existing PCBs. Due to the booming energy sector more foreign banks are expected to arrive in Bangladesh. Moreover, the existing foreign banks like Standard Chartered and HSBC are expanding their operation even HSBC recently introduced Islamic banking branch in the country. o Contemporary Banks: The contemporary banks of IBBL can also pose a threat to Islami Bank Bangladesh Limited. Recently some private banks converted their operation into Islamic Banking such as Shahjalal Islami Bank Ltd, EXIM Bank Ltd etc. again some other commercial banks introduced some Islamic banking branches too. Moreover the existing Islami banks in the country introduced new products that may cause of threat for IBBL. o Limited Scope for Expansion: This problem is faced by the entire banking sector of the country. Because of present economic slowdown, there is hardly any new deposit creation as there few investments and savings accompanied by a galloping inflation. As a result banks are not being able to attract absolutely new depositors but rather they have to hunt or snatch away depositors from other banks. o Default Culture: It is a very common threat for the banking sector of Bangladesh. According to PLS banking system, Islami Bank Bangladesh Limited makes exchange of
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goods its default amount and provision for bad debt is relatively lower than the other commercial banks. But more strong and applicable laws are required to overcome this problem.
3.7 Functions of IBBL The functions of Islami Bank Bangladesh Limited are as under: o To maintain all types of deposit accounts. o To make investment. o To conduct foreign exchange business. o To extend other banking services. o To conduct social welfare activities through Islami Bank Foundation. 3.8 Branch Network Recently there are 266 branches of Islami Bank Bangladesh Limited are offering services all over the country. The Bank plans to gradually open more Branches covering important commercial places both in urban and rural areas. 7 (seven) Administrative Officers /Zones are functioning all over the country for effective control, close supervision and proper monitoring of the total operations of the Branches as well as assisting them in the development of business. 3.9 Shariah Council of Islami Bank Bangladesh Ltd There is a Shariah Council of the Bank that consists of prominent Ulama, reputed Bankers, renowned Lawyers and eminent Economists to advise and guide on the implementation and compliance of Shariah principles in all the activities of the Bank particularly on the modes of investments. The Council enjoys a special status in the structure of the bank that meets frequently and plays a vital role. It also conducts Shariah inspection of Branches to ensure that the Shariah principles are implemented and complied with by the Branches of the Bank. 3.10 Membership in International and National Bodies 3.10.1 International Affiliations This Bank is a member of the under noted Foreign Organizations: o Accounting and Auditing Organizations for Islamic Financial Institutions (AAOIFI), Manama, Bahrain o General Council for Islamic Banks and Financial Institutions (GCIBFI), Manama, Bahrain and has also become member of the Executive Committee of GCIBFI. o International Chamber of Commerce-Bangladesh 3.10.2 Local Affiliations The Bank is also member of the under noted Local Originations: o Bangladesh Institute of Bank Management (BIBM) o The Institute of Bankers, Bangladesh (IBB) o Bangladesh Foreign Exchange Dealers' Association (BAFEDA) o Central Shariah Board for Islamic Banks in Bangladesh o Islami Banks Consultative Forum (IBCF) and
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Dhaka Chamber of Commerce & Industry 3.11 Role and Contribution of IBBL to Bangladesh Economy
Islami Bank Bangladesh Limited has many success stories of achievements. These are summarized below: o IBBL is the pioneer institution for introduction of Islamic Banking in Bangladesh. o The success of IBBL has imbibed other sponsors at home and abroad to establish Islamic Banking in Bangladesh. Four national, two international Islamic banks have since been established in the country. Some private sector traditional bank has also established fullfledged Islamic Banking branches. Several other existing and proposed traditional banks have also expressed their intention to introduce Islamic Banking. o IBBL has successfully mobilized deposits from a section of people who hither-to-before did not make any deposit with interest-based banks. o The Islamic Banking products which are offered by IBBL through its 141 branches located at important centre all over the country and spontaneous acceptance of those products by the people proves the superiority of Islamic banking. o IBBL's market share of deposit investment and ancillary business is steadily increasing. o IBBL, though still a tiny bank, handles more than 10% of country's export and import trade. o Among the contemporary commercial Banks IBBL's position is first in respect of mobilization of deposit, deployment of fund and earning profit. o Investment in industrial sector occupies nearly 33% of IBBL's investment portfolio. This is a unique example of industrial-finance by a commercial Bank. o More than 1.15,000 workers are employed in the industrial projects financed by IBBL. IBBL has thus made significant contribution to solving unemployment problem of the country. o Dhaka- the capital of Bangladesh being a Mega city- has acute transport problem. IBBL has joined hands with an enterprising group to introduce a fleet of Premium Bus service, which has attracted the attention of all section of the people and mitigated transportation problem of the city to some extent. o IBBL has introduced several other welfare oriented investment schemes, such as Small Transport Investment Scheme, Small Business Investment Scheme, Agriculture Implements Investment Scheme, Poultry Investment Scheme, Household Durable Investment Scheme, Housing Investment Scheme etc. o IBBL launched a Rural Development Scheme for providing finance to drawn-trodden section of the populace- an area where no other Commercial Bank has extended any finance. IBBL's mission is to reach to all 68,000 villages of the country as early as possible. o IBBL has contributed a remarkable amount as income tax to the Government Exchequer on its net profit over the last 20 years. o At the initiative and drive of IBBL, several Universities in Bangladesh, have introduced Courses on Islamic Banking and finance. o Due to constant persuasion of IBBL the Government has granted license for establishment of an Islamic Insurance Company. By now two (2) Islamic Insurance Companies have started business. o IBBL has earned reputation in the country as a corruption free institution. o IBBL is held in high esteem in the banking circle as a good managed bank. o IBBL has taken initiative to form an Association of Islamic Banks in Bangladesh for furtherance of the causes of Islamic banking.
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IBBL has established a foundation called 'Islami Bonk Foundation' for carrying out social welfare activities. The foundation has taken up a number of schemes covering the whole of Bangladesh.
3.12 Achievement o o o o o o o o o o Pioneer in Islamic Banking running its entire operation based on Islamic Shariah. Shariah Council comprising of leading Ulama, renowned economists, lawyers operation. Never participate in the interest based money market operations. Never borrowed from any source either inside or outside the country. A transparent and corruption free operation for the last 29 years in a row. Regular and timely holding of AGM declaring good dividend since 1989 without break till 2002, except in the year 1992. Largest contributor of Tax to the Government exchequer from the private sector banks receiving CIP status from the Government almost every year. Received the best bank in Bangladesh Awards from Global Finance, UK in 1999, 2000 & 2004. It is connected to 830 offices of 230 foreign banks in 74 countries. IBBL received A+ rating in CRISL ( Credit Rating Information & Services)
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4. INVESTMENT POLICY
4.1 Investment Operation Investment operation of a Bank is an important operation among other operations of the bank. The greatest share of total revenue is generated from it, maximum risk is centered in it and the very existence of a Bank mostly depends on prudent management of its investment Portfolio. As such, for efficient deployment of mobilized resources in profitable, safe and liquid investments, a sound, well-defined, well-planned and appropriate Investment Policy framework is necessary prerequisite for achieving the goal of the Bank. The special feature of the investment policy of the Bank is to invest on the basis of profit-loss sharing system in accordance with the tenets and principles of Islami Shariah. Earning of profit is not the only motive and objective of the Bank's investment policy rather emphasis is given in attaining social good and in creating employment opportunities. The investment policy aimed at diversification of the investment port-folio by size sector geographical area, economic purpose and securities to bring in phases all sectors of the economy and all types of economic groups of the society within the fold of Bank's investment operations. 4.2 Objectives and Principles The objectives and principles of investment operations of the Bank are: o To invest fund strictly in accordance with the principles of Islami Shariah. o To diversity its investment portfolio by size of investment, by sectors (public and private) by economic purpose, by securities and by geographical area including industrial, commercial & agricultural. o To ensure mutual benefit both for the Bank and the investment client by professional appraisal of investment proposals, judicious sanction of investment close and constant supervision and monitoring thereof. o To make investment keeping the socio economic requirement of the country in view. o To increase the number of potential investors by making participatory and productive investment. o To finance various development schemes for poverty alleviation, income and employment generation with a view to accelerate sustainable socio-economic growth and for upliftment of the society. o To invest in the form of goods and commodities rather than give out cash money to the investment clients. o To encourage social upliftment enterprises. o To shun even highly profitable investment in fields forbidden under Islamic Shariah and are harmful for the society. o The Bank extends investments under the principles of Bai-Murabaha, Bai- Muazzal, Hire Purchase under Shirkatul Meelk and Mudaraba. The Bank is making sincere efforts to go for investment under Mudaraba principle in near future.
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4.3 Importance of Assessing Investment Needs Assessment of Investment needs is necessary for the following reasons: o To detect actual Investment limit of Bank. o To detect actual Investment against obsolete /out dated/non trading items. o To assess the quality, quantity, price and marketability of the commodities. o To ensure proper follow-up supervision and monitoring of the Investment. o To ensure capacity of the client in handling Investment activities o To overcome the situation of Division of found by the clients o To ensure trading instead of lending of money. o To ensure payment against delivery of goods. o To ensure actual buying and selling of goods. o To select proper & genuine Investment client. o To ensure viability/profitability of the project. o To ensure compliance of Shariah Principles. o To maintain discipline in the Investment port-folio of the Branch. o To secure the Investment. o To allow Investment for appropriate period. o To handle the Investment proposal efficiently. o To ensure investment for productive purpose. o To identify the tenure of investment to be made i.e. for short term /middle term/long term. o To know the objective of Investment. o To ensure profitability of all concerned. o To ensure welfare of the society. o To ensure Business ethics. o To minimize the risk of investment. o To ensure recovery of investment in time. o To comply with the Bank's target regarding diversification of Investment. 4.4 Induction of Investment Clients 4.4.1 Why of Induction Potential clients may be advised to open Al-Wadiah Current Account, if there is no such account. The client should maintain the current account, satisfactorily for a reasonable period. o Preliminary discussion may have with the prospective client regarding his line of business, experience & investment needs. o The past performance of the client to be studied and Branch's track record of proposed investment. o If the proposal found suitable the client may be asked to submit a formal application along with necessary papers/documents. 4.4.2 Criteria for selection Clients of the Bank for following Investment are to be selected with prudence and good judgment. It should be kept in mind that the person is important than their properties. They must have good character, commitment, capability, integrity and means. Their past performance must be verified first. None should be entertained without verification of his background, experience in the line of business, credit worthiness, financial needs, capacity to handle the finance applied for. Favoritism, personal relationship with a client must not get any consideration for providing Bank's Investment. A detailed credit report of the client must be prepared and all necessary
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information's should be collected and verified at the time of selection of the client. Clients of distant area / beyond control should not be entertained, The following factors / qualities /information may be considered at the time of selection of investment client: o Brief history of financial /credit transaction of the client. o Social and financial behavior of the client should be verified /assessed. o Ability of the client of utilization of credit / Investment fund. o Ability of the client regarding repayment of Investment. o Equity of the client. o Effect of National & International Economic problems/crisis. o Analysis of Investment Risk. The above mentioned factors may be categorized under 5-C's. o Character o Capacity o Capital o Collateral
Character (a) The Human Factor

o o o o o o o o Personal Circumstances (nationality, age, health condition, etc.) Credit Track Record Technical Qualifications (including business experience). Capacity to deal with people (or to manage relationships). Business Experience Management Succession Credit Discipline. Lifestyle Every account officer believes that experience in business is an extremely strong test of credit worthiness. Age of applicant Years in current business/company Total number of years business experience.
(b) Management Assessment
(c) Experience
(d) Succession
Stability of business leadership in the event of the owner's incapacity Is spouse involved in the business? Are adult children and/or relatives involved in the business? Is there a succession plan in place Credit card bills payments Others: Power, telephone. Water bills (business & personal) Existing relationships with other bank's lenders. Personal feedback from customers and suppliers. employees,
(e) Personal Finance/Credit Discipline

The objective is to measure the applicant's discipline in personal and business finance
(f) Lifestyle
Lifestyle variables are an attempt to measure integrity which in turn
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is (potentially) positively correlated with investment/ loan repayment
Personal feedback from neighbors, community members and Bank personal. Membership in local or National industry association. Membership in community or religious institution.
Capacity: (a) The Performance Factor

o o Deployment of Resources (How much is the Investment need and how will it be used?) Profitability Prospects of the project and the Enterprise (How will the project impact on the enterprise?) Profitability. Liquidity. Solvency.
(b) Financial Assessment

o o o
Capital The Financial Factor

o o o o Client's stake in business. Solvency of the enterprise. Availability of reserve resources. Other sources of income.
Collateral The Security Factor

o o o o o Ensuring the Critical Success Factors of the Business. Quality of Collateral's. Value of Collateral's. Location of Collateral's. Ease of Marketability of Collateral's.
4.4.3 Necessary for preparation of credit report Preparation of credit report of the investment client is necessary and very much important for the following reasons /purposes. o To select investment client carefully and judiciously. o To ensure quality investment. o To ascertain credit worthiness of the client. o To ensure adequate securities both primary and collateral. o To ensure clients business establishment and line of business. o To ensure proper valuation of Assets and liabilities. o To ensure prompt disposal of Investment proposals. o To Stoop Malpractices. o To handle investment activities efficiently. o To administer accountability. o To ascertain Joint responsibility of Bank Officials and Investment client. o To recover Invested amount in time. o To maximize profitability of all concerned.
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o o o
To safeguard interest of the Bank and the Client. To avoid classification of Investment. To avoid stuck-up situation of invested fund.
4.5 Present Status of Banks Investment Portfolio Presently the Bank's export Investment is mostly centered in readymade garments and the Bank enters into the area of investment in major traditional and non-traditional exportable items like jute & jute goods, frozen foods, hosiery products, tea, leather and leather products knitwear (Textile), basic chemical products/pharmaceuticals, electric goods (wires and cables), electronic goods/components, handicrafts, fruit juice concentration projects (small and medium scale only), other. Besides the existing items of import, the Bank should go for investment in import in the following areas: o CDSO being imported by edible refineries o Cotton yarn o Coal and hard coke o Fresh fruits, Spices o Dry fruits o Pulses o Onions o C.I. sheet o B.P. sheets o Motor vehicles o Bi-cycle spares o Tiers & tubes o Bitumen Bulk investment of all banks (nationalized commercial banks and private commercial banks) is in the hand of limited number of borrowers, though the position of Islami Bank is to some extent better, yet efforts need to be made for further diversification of investment by size of investment accounts and concentration of investment in the hands of limited few clients is to be avoided. 4.5.1 Sector-wise Investment Table 1: Sector-wise Investment 2011 Sectors Amount % to total (million) investment Industrial 122270 38.98 Commercial 38234 12.50 Real Estate 16966 5.55 Agriculture (including investment in Fertilizer and Agriculture 20923 6.84 Implements) Transport 6457 2.11 SME 100991 33.02 Total 305841 100
Amount (million) 113989 46142 11336 14252 4583 72933 263225
2010 % to total investment 43.30 17.53 4.31 5.41 1.74 27.71 100
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Source: Annual Report 2011

General investment made in the following ways and under the following modes: o Bai-Murabaha o Bai-Murabaha Post Import o Bai-Mujjal o Hire Purchase o Hire Purchase under Shirkatul-Meelk o Musharaka o Mudaraba o Bai-Salam o Leasing o Investment Auctioning Any other mode found appropriate which conforms to the principles of Islamic Shariah. 4.5.2 Mode-wise Investment Table 2: Mode-wise Investment 2011 2010 Amount % to total Amount (million) investment (million) 177136 57.92 146135 89070 29.12 80093 15912 5.20 12393 & 2744 5614 3528 2266 9571 305841 0.91 1.83 1.15 0.74 3.13 100 5141 2095 3624 1500 12244 263225
Mode Bai-Murabaha HPSM Bai-Muajjal Bill Purchase Negotiataion Quard Bai-Salam Mudaraba Musharaka Total
% to investment 55.52 30.42 4.71 1.95 0.80 1.38 0.57 4.65 100
total

4.5.3 Composition of Investment Portfolio Table 3: Industry wise Investment Position (2011) Sl. Particulars Textile- Spinning, Weaving & Dyeing Steel, Re-rolling & Engineering Agro based Industry Garments & Garments Accessories Food & Beverage Cement Industry No. of Industries 186 60 381 200 24 9 % of Total Number 13.62 4.39 27.89 14.64 1.76 0.66 Investment Amount (million) 75031 7579 17219 11239 6678 2097 % of Total Amount 46.63 4.71 10.70 6.99 4.15 1.30
1. 2. 3. 4. 5. 6.
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7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
Pharmaceuticals Poultry, Poultry Feed & Hatchery Chemicals, Toiletries & Petroleum Printing & Packaging Power (Electricity) Ceramic and Bricks Service Industry Bricks and Tiles Petrol-Pump and CNG Filling Station Ship Building Ship Breaking Cable Leather Other Industries Total
13 59 17 47 4 10 37 95 63 6 8 8 3 136 1366
0.95 4.32 1.24 3.44 0.29 0.73 2.71 6.95 4.61 0.44 0.59 0.59 0.22 9.96 100
2031 997 4095 2912 4281 2011 1818 966 836 4085 1515 1515 25 13968 160898
1.26 0.62 2.55 1.81 2.66 1.25 1.13 0.60 0.52 2.54 0.94 0.94 0.02 8.68 100

Taking into consideration the broad objectives of the Bank, national priority, socio-economic need, growth level of the economy, the investment port-folio of the Bank may gradually be diversified and allocated in terms of size, sector, geographical area, economic purpose, security and mode. The following figure presents the composition of the investment portfolio of the Islami Bank in the different areas. Figure 2: Composition of Investment Portfolio (2011)
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Textile- Spinning, Weaving & Dyeing Steel, Re-rolling & Engineering 3% 1% 1% 0% 9% 47% Garments & Garments Accessories Food & Beverage Cement Industry 11% 5% Pharmaceuticals Poultry, Poultry Feed & Hatchery Chemicals, Toiletries & Petroleum Printing & Packaging Agro based Industry
1% 1% 1% 1% 2% 3% 3% 1% 1% 1% 4%
7%
5. Investment Modes
There are three types of Investment Mechanism, which are expressed below:
Bai Mechanism (Trading Mode)

1. 2. 3. 4. Bai Bai Bai Bai Murabaha Muajjal Salam Istishna'a
Ijara Mechanism (Leasing Mode)

1. Hire purchase (Ijarah) 2. Hire purchase under Shirkatul Meelk
Share Mechanism
1. Mudaraba 2. Musharakah 5.1 Bai-Mechanism (Trading Mode) 5.1.1 Bai-Murabaha The terms "Bai-Murabaha" has been derived from Arabic words Bai and Ribhun. The word Bai means purchase and the word Ribhun means agreed upon profit. "Bai-Murabaha" means Sale on agreed upon profit.
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Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the land), to the buyer at a cost plus agreed profit payable in cash or 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.
Types of Murabaha
In respect of dealing parties Bai-Murabaha can be divided into two parts. They are as follows: Ordinary Bai-Murabaha If there are only two parties, the seller and the buyer, where the seller as an ordinary trader purchases the goods from the market without depending on any order and promise to buy the same from him and sells those to a buyer for cost plus profit, then the sale is called Ordinary BaiMurabaha. Bai-Murabaha on Order and Promise If there are three parties, the buyer, the seller and the Bank, is an intermediary trader between the buyer and the seller, where the Bank upon receipt order from the buyer with specification and a prior outstanding promise to buy the goods from the Bank, purchases the ordered goods and sells those to the ordering buyer at a cost plus agreed profit, the sale is called "Bai-Murabaha on Order or Promise", generally known as Murabaha. This Murabaha upon order and promise is generally used by the Islami Banks, which undertake the purchase of commodities according to the specification requested by the Clients and sale on Bai-Murabaha to the one who ordered for the goods and promised to buy those for its cost price plus a marked-up profit agreed upon previously by the two parties, the Bank and the Clients.
Important feature
o It is permissible for the Client to offer an order to purchase by the Bank agriculture goods deciding its specification and committing him to buy the same from the Bank on Murabaha, i.e. cost plus agreed upon profit. It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages a caused by breaking the promise without excuse. It is permissible to take cash/collateral security to guarantee the implementation of the promise or to indemnify the damages. It is also permissible to document the debt resulting from Bai-Murabaha by a Guarantor, or a mortgage, or both lay any other debt. Mortgage /Guarantee /Cash Security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement. Stock and availability of goods is a basic condition for signing a Bai-Murabaha Agreement. Therefore, the bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Murabaha agreement with the Client. After purchase of goods the Bank must bear the risk of goods until those are actually sold and delivered to the Client buyer, the Bank shall bear the consequences of any damages or defects, unless there is an agreement with the Client releasing the Bank of the defects, that means, if the goods are damaged, Bank is liable, if the goods are defective, (a defect that is not included in the release) the Bank bears the responsibility.
o o
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o o
o o
The bank must deliver the specified goods to the Client on specified date and at specified place of delivery as per Contract. The Bank shall sell the goods at a higher price (Cost + Profit) to earn profit. The cost of goods sold and profit mark-up therewith shall separately and clearly be mentioned in the Bai-Murabaha Agreement. The profit mark-up may be mentioned in lump sum or in percentage of the purchase/cost price of the goods. But, under no circumstances, the percentage of the profit shall have any relation with time or expressed in relation with time, such as month, per annum etc. The price once fixed as per agreement and deferred cannot be further increased. It is permissible for the Bank to authorize any third party to buy and receive the goods on Bank's behalf. The authorized must be in a separate contract.
5.1.2 Bai-Muajjal The terms Bai-Muajjal has been derived from two Arabic words "Bai and "Muajjal". It means sale for which payment is made at a future fixed date or within fixed period. In short, it is a sale on Credit. Bai-Muajjal may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods (permissible under Islamic Shariah and the Law of the Country), to the buyer at a cost plus agreed profit payable in cash or on any fixed future date in lump-sum or by installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer.
Important Features
o o o o o Bank is not bound to declare cost of goods and profit mark-up separately to the client. Sport delivery of the item and payment is deferred. The Bank transfers ownership and possession of the goods to the client before receipt of sale price. Client may offer an order to purchase by the Bank any specified goods and committing himself to buy the same from the Bank on Bai-Muajjal Mode. It is permissible to make the promise binding upon the client to purchase from the Bank. That is he is to either satisfy the promise or to indemnify the damage caused by breaking the promise. Cash/Collateral Security should be obtained to guarantee the implementation of the promise or to indemnify the damages. Mortgage/Guarantee/Cash Security may be obtained before/at the time of signing the agreement. Stock and availability of goods is a pre-condition for Bai-Muajjal agreement. The responsibility of the bank is to purchase the desired goods at the disposal of the client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the client. The Bank after purchase of goods must bear the risk of goods until those are actually delivered place of delivery as per contract. The bank must deliver the specified goods to the client on specified date and at specified place of delivery as per contract. The Bank may sell the goods at one agreed price, which will include both the cost price and the profit. The price once fixed as per agreement and deferred cannot be further increased.
o o o
o o o o
5.1.3 Bai-Muajjal Under this mode Bank will execute purchase contract with the client and make payment against purchase of product, which is under process of production. Bai-Salam contract will be executed
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after making any investment showing price, quality, quantity, time, place and mode of delivery. The profit of the goods is to be negotiated. In this mode the payment (price) of the goods is made at the time of Agreement and the delivery of the goods is deferred.
Important feature:
Bai-Salam is a mode of investment allowed by Islamic Shariah in which commodity (ies)/product (s) can be sold without having the said commodity (ies)/product(s) either in existence or physical /constructive possession of the seller. If the commodity (ies)/product (s) are ready for sale, BaiSalam is not allowed in Shariah. Then the sale may be done either on Bai-Murabaha or BaiMuajjal mode of investment. o Generally, industrial and agricultural products are purchased/sold in advance under BaiSalam mode of investment to infuse finance so that product is not hankered due to shortage fund/cash. o It is also permissible to obtain Mortgage and /or Personal Guarantee from a third party as security before the signing of the Agreement or at the time to signing the agreement o Bai-Salam on a particular commodity (ies)/product(s) or on a product of a particular field or firm cannot be effected (for Agricultural Product(s)only). o The seller (manufacturer) client may be made agent of the Bank to sell the goods delivered to the Bank by him provided a separate agency agreement is executed between the Bank and the Client (Agent). 5.1.4 Bai-Istishnaa Istishnaa is a contract between a manufacturer/seller and a buyer under which the manufacturer/seller sells specific product(s) after having manufactured, permissible under Islamic Shariah and Law of the Country after haying manufactured at an agreed price payable in advance or by installments within a fixed period or on/within a fixed future date on the basis of the order placed by the buyer.
Important feature:
o Istishna'a is an exceptional mode of investment allowed by Islamic Shariah in which products can be sold without having the same in existence. In the product(s) are ready for sale. Istishna'a is not allowed is Shariah. Then the sale may be done either in BaiMurabaha or Bai-Muaajjal mode of investment, in this mode, deliveries of goods are deferred and payment of price may also be deferred. It facilitates the manufacturer sometimes to get the price of the goods in advance, which he may use as capital for producing the goods. It gives the buyer opportunity to pay the price in some future dates or by installments. It is a binding contract and no party or is allowed to cancel the Istishnaa contract after the piece is paid and received in full or in part or the manufacturer starts the work. Istishna'a is specially practiced in manufacturing and industrial sectors. However, it can be practiced in agricultural and constructions sectors also. 5.2 Ijarah Mechanism (Leasing Mode) 5.2.1 Hire Purchase/ Ijarah The term Ijarah has been derived from the Arabic works Ajr and Ujrat, which mean consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of service 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 on benefit against a specified
o o o o
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consideration or rent from the asset owned by the Hiree. It is a hire agreement under which the Hiree to a Hirer against fixed rent or rentals hires out a certain asset for a specified period. 5.2.2 Hire purchase under Shirkatul Meelk Hire purchase under Shirkatul Meelk is a special type of contract, which has been developed through practice. Actually, It is a synthesis of three contracts: Shirkat, Izara and Sale. Shirkat means partnership, Shirkatul Meelk means share an 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 contract.
Stages of Hire Purchase under Shirkatul Meelk

Hire Purchase under Shirkatul Meelk Agreement has got three stages: o Purchase under joint ownership, o Hire, and o Sale and /or transfer of ownership to the other partner Hirer.
Types of sale contract in hire purchase under Shirkatul Meelk

As per procedure of transfer of ownership and legal title of the part owned by the Bank is transferred to the other partner, the sale contract may be of various, some of the major forms are mentioned below:
(a) Hire Purchase under Shirkatul Meelk through gradually transfer (sale) of legal title/ownership of the hired asset/property:
Certain asset / property is purchased with equal or unequal equity participation and owned jointly by the two parties, the Bank and the Client. The Bank's share / portion of the asset is hired out to the Client against fixed rent/rentals per unit of time for a fixed period with a promise that the Hire Bank will sell or transfer the ownership of its portion to the Client Hirer gradually part by part in proportion to the consideration paid. So that the Hire's portion of the asset on payment of the total price at the end of the hire period.
(b) Hire Purchase under Shirkatul Meelk through Transfer of legal title by gifts (for no consideration).
Under this type of Hire Purchase, Hiree will transfer his ownership title to the property to the Hirer through gift without any further consideration. After the expiry of the hire period and payment of all the rent /rentals installment, the title of property may be transferred by a separate gift deed executed by the Hire. Otherwise the title may be transferred by issuing a gift deed by the Hiree making it conditional on the settlement of all rental installments. In the later case, the legal title is automatically transferred as soon as the hire period expires and the fixed rent installments for rent are settled. The working of the agreement would be: If the agreed upon rental installments are settled within the agreed upon period, ownership of the asset will be transferred to the Hirer as gift.
(c) Hire Purchase under Shirkatui Melk Through transfer of legal title (sale) at the end of hire period for a token consideration
Under this contract the possession of the asset owned by the Hire is hired out to the hire for a fixed period against fixed rent / rentals and at the end of the hire period the title to the asset is transferred to the Hirer by a separate sale contract on payment of agreed upon token consideration. The consideration may be equal to the value of the asset or not and it would be sufficient if a mutual agreement is reached on the consideration.
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(d) Hire Purchase under Shirkatul Meelk through transfer of legal title (sale) at the end of Hire period for payment of a specified amount to the hire by the hirer
This agreement includes an Ijarah / hire contract and a sale contract. Under this agreement a specific asset is hired out for a fixed period against specific rent mentioning a specific consideration to be paid by the Hirer (buyer) after the expiry of the hire period and upon payment of the agreed upon consideration. The hired asset becomes sold and its title transferred to the Hirer (the buyer). Under the agreement, the hire contract becomes effective firstly sale contract will be effective only after the expiry of the hire contract.
Important Feature:
o In case of Hire Purchase under Shirkatul Meelk transaction the asset / property involved is jointly purchased by the Hire (Bank) and the Hirer (Client) with specified equity participation under a Shirkatul Meelk Contract in which the amount of equity and share in ownership of the asset of each partner (Hire Bank & Hirer Client) are clearly mentioned. Under this agreement, the Hire and the Hirer becomes co-owner of the asset under transaction in proportion to their respective equity participation. No third party registration shall be allowed. The share / part of purchased asset owned by the Hire (Bank) is put at disposal /possession of the Hirer (Client) keeping the ownership with him (Bank) for a fixed period under a hire agreement. In which the amount of rent per unit of time and the benefit for which rent to be paid along with all other agreed upon stipulations are also to be clearly stated. Under this agreement, the Hirer (Client) becomes the owner of the benefit of the asset but not of the asset itself, in accordance with the specific provisions of the contract, which entitles the Hire (Bank) is entitled for the rentals. As the ownership of hired portion of the asset lies with the Hiree (Bank) and rent is paid by the Hirer (Client) against the specific benefit, the rent is not considered as price or part of price of the asset. In the Hire Purchase under Shirkatul Meelk Agreement the Hiree (Bank) does not sell or the Hirer (Client) does not purchase the asset but the Hire (Bank) promise to sell asset to the Hirer (Client) part by part only, if the Hirer (Client) pays the cost price / equity / agreed price as fixed for the asset as per stipulations within agreed upon period on which the Hirer also gives undertakings. As soon as any part of Hire's (Bank's) ownership of the asset is transferred to the Hirer (Client) that becomes the property of the Hirer and hire contract for that share / part and entitlement for rent thereof lapses. The hire contract becomes effective from the day on which the Hire transfers the possession of the hired asset in good order and usable condition to the Hirer, so that the Hirer may make the agreement. Effectiveness of the sale contract depends on the actual sale and transfer of ownership of the asset by the Hire to the Hirer. Under this agreement the Bank acts as a partner, as a Hire and at last as a seller; on the other hand the Client acts as a partner, as a Hirer and lastly as a purchaser. The Hirer cannot make any changes in the exact item of the hire, and / or remove it from its place of installation and transfer it to another location. Without obtaining prior written permission of the Hiree (Bank) In a Hire Purchase under Shirkatul Meelk agreement any stipulation may be made, provided it is not against the nature and requirements of the contract itself, nor does it violate the /this may be the last one divine laws of Islam and is also acceptable to both the parties. The duration of Hire Purchase under Shirkatul Meelk contract shall not exceed the useful life of the subject / asset of the transaction. The Bank should not normally enter a Hire
o o o o
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Purchase under Shirkatul Meelk transaction for items with useful life of less than two years. If, for any reason, the hire contract is revoked prior to the transfer of full title of the asset to the Hirer, both Hiree and Hirer will share the title of the asset that part of title, which has been transferred to him against payment and the Hire, will share the remaining part. The Hirer to secure the Bank (the Hire) will pledge / hypothecate / mortgage his portion / part / share in the asset (acquired / to be acquired) and or any other asset / property of his own / third party guarantor to the Bank to fulfill his all liabilities /commitments including the accrued rental, if any. 5.3 Share Mechanism
5.3.1 Mudaraba It is a form of partnership where one party provides the funds while the other provides the expertise and management. The first party is called the Sahib-Al-Maal and the latter is referred to as the Mudarib. Any profit accrued is shared between the two parties on a pre-agreed basis, while capital loss is exclusively borne by the partner providing the capital.
Importer features:
o o o o o Bank supplies capital as Sahib-Al-Mall and the client invest if in the business with his experience. The client maintains administration and management. Profit is divided as per management. Bank bears the actual loss alone. Client cannot take another investment for that specific business without the permission of the Bank
5.3.2 Musharaka Musharaka is an Islamic financial technique that adopts "equity sharing" as a means of financing projects. Thus, it embraces different types of profit and loss sharing partnership. The partners (entrepreneurs, bankers etc.) share both capital and management of a project so that profits will be distributed among them as per rations, where loss is shared according to ratios of their equity participation.
Important feature:
The investment client will normally run and manage the business. The Bank shall take part in the policy and decision making as well as overseeing (supervision and monitoring) the operations of the business of the client. The Bank may appoint suitable person(s) to manage the business and to maintain books of accounts of the business property. o As the investment client shall manage the enterprise, the Bank may pay more share of profit to him than that of his proportionate capital contribution. o Loss, if any, will be shared on the basis of capital ratio. There are two other modes of investment, which have limited impact in our country. o o 5.4 Quard The word "Quard" is Arabic which means loan or credit on advance. The literal meaning of Quard is giving "Fungible goods" for use without any extra value returning those goods. It must follow the principle of equal for equal return with homogeneous goods. Fungible goods may be rice, oil,
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salt, money etc. In banking sector, money is used as quard. Quard is Halal by Islam for not to pay any extra or interest in return. Quard-E-Hasanah is also one kind of Quard, which is given, with the expectation of return or not.
The characteristics of Fungible goods o Goods which are vanished /converted for one time use. o No flow of service. o Service can't be separated from the actual goods. Characteristics of Quard o There should have fungible goods. o Goods must be returned equally. o There is no extra payment. o Specific period for returning goods.
5.5 Operational Procedures of Investment Mechanism of IBBL IBBL follows the Operational Procedures for all above mentioned investment modes: o Induction of client o Application o Categorization (4 categories) o Processing and appraisal o Sanction o Documentation o Purchase of goods by the Bank o Taking delivery of goods by the Bank o Sales and delivery of goods to the client
Investment Processing of IBBL:
Generally a bank takes certain steps to deliver its proposed investment to the client. But the process takes deep analysis. Because banks invest depositors fund, not banks own fund. If the bank fails to meet depositors demand, then it must collapse. So, each bank should take strong concentration on investment proposal. However, Islami Bank Bangladesh Limited (IBBL) makes its investment decision through successfully passing the following crucial steps: (1) SELECTION OF THE CLIENT
(2) APPLICATION STAGE
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(3) APPRAISAL STAGE
(4) SANCTIONING STAGE
(5) DOCUMENTATION STAGE
(6) DISBURSEMENT STAGE
(7) MONITORING &RECOVERY STAGE
(1) Selection of the client Here, investment
taker (client) approaches to any of the branch of Islami Bank Bangladesh Limited (IBBL). Then, he talks with the manager or respective officer (Investment). Secondly, bank considers five Cs of the client. After successful completion of the discussion between the client and the bank, bank selects the client for its proposed investment. It is to be noted that the client/customer must agree with the banks rules & regulations before availing investment. Generally, bank analyses the following five Cs of the client: Character; Capacity; Capital; Collateral; and Condition.
(2) Application stage At this stage, the bank will collect necessary information about the prospective client. For this reason, bank informs the prospective client to provide and/or fill duly respective information which is crucial for the initiation of investment proposal. Generally, here, all the required documents for taking investment have to prepare by the client himself. Documents that are necessary for getting investment of IBBL is prescribed below:
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Trade License photocopy (for proprietorship); Abridged pro forma income statement; Attested copy of partnership deed (for partnership business); Prior three (03) years audited balance sheet (for joint stock company); Prior three (03) years business transactions statement for the musharaka/mudaraba investment; Abridged pro forma income statement for the musharaka/mudaraba investment; Attested copy of the Memorandum of Association (MOA) & Articles of Association (AOA) for the joint stock company; Attested copy of the Tax Identification Number (TIN)- including final assessment; Tenders of the proposed assets (in case of HPSM); Detailed summary of the sundry debtors and creditors (including both time & schedule); Summary of the personal movable & immovable assets; and others.
(3) Appraisal stage At this stage, the bank evaluates the client and his/her business. It is the most important stage. Because, on the basis of this stage, bank usually goes for sanctioning the proposed investment limit/proposal. If anything goes wrong here, the bank suddenly stops to make payment of investment. In order to appraise the client, Islami Bank Bangladesh Limited (IBBL ) provides a standard F-167B Form (Appraisal Report) to the client for gathering all the information. The original copy of the appraisal report is enclosed in the appendix chapter. However, the following contents are presented from that appraisal report: Companys/Clients Information. Owners Information. List of Partners/Directors. Purpose of Investment/Facilities. Details of Proposed Facilities/Investment. Break up of Present Outstanding. Other Liabilities of the Client/Group. Previous Bankers Information. Details of Sister/Allied Concerns. Allied Deposit as on. Business/Industry Analysis. Relationship Analysis.
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Asset-Liability position of the client as per Audited Balance Sheet. Working Capital Assessment. Risk Grade. Particulars of the godown for storing MPI/Murabaha goods. Insurance Coverage. Audit Observation. Security Analysis.
(4) Sanctioning stage At this stage, the bank officially approves the investment proposal of the respective client. In this case client receives banks sanction letter. Islami Bank Bangladesh Limited (IBBL)s sanction letter contains the following elements: 1. Investment Limit in million. 2. Mode & amount of investment. 3. Purpose of investment. 4. Period of investment. 5. Rate of return. 6. Securities Cash/Goods security In allowing Murabaha investment and amount of cash security is generally realized from the client (amount depends on the nature of goods, creditworthiness of the client, collateral security obtained etc.) which is converted to goods security after purchase of goods purchased out of banks investment and clients cash security is pledged to the bank, kept under banks custody before its delivery to the client on payment. Example: If, for a Murabaha investment cash security is fixed at 25% Banks investment stands at 75% on the total goods purchased. For example, if cost of total goods purchased is Tk.100000 Banks investment will be Tk.75000 and clients cash security will be Tk.25000. Bank Tk. 75000 (75%) Client Tk. 25000 (25%) Total cost of goods Tk. 100000 (100%)
(5) Documentation stage At this stage, usually the bank analyses whether required documents are in order. In the documentation stage, Islami Bank Bangladesh Limited (IBBL) checks the following documents of the client: I. Tax Payment Certificate.
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II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII.
Stock Report. Trade License (renewal). VAT certificate Liability statement from different parties. Receivable from different clients. Other assets statement. Aungykar Nama. Ghosona Potra. Three (03) years net income & business transactions. Performance report with the bank. Account Statement Form of the bank. Valuation Certificate a. Particulars of the Proposal. b. Particulars of the Mortgagor. c. Particulars of the Properties.
XIV. XV.
Outstanding liability position of the bank. CIB (Credit Information Bureau) Report.
(6) Disbursement stage At this stage, bank decides to pay out money. Here, the client gets his/her desired fund or goods. It is to be noted that before disbursement a site plan showing the exact location of each mortgage property needs to be physically verified.
(7) Monitoring & Recovery stage At this final stage of investment processing of the Islami Bank Bangladesh Limited (IBBL), bank will contact with the client continually, for example- bank can obtain monthly stock report from the client in case of micro investment. Here, the bank will keep his eye on over the investment taker. If needed, bank will physically verify the clients operations. Also if bank feels that anything is going wrong then it tries to recover its investment fund from the client.
6. SPECIAL SCHEMES UNDER INVESTMENT MODES

Islami o o o o o o Bank Bangladesh Limited is offering various investment schemes, which are as follows: Household Durable Scheme Investment Scheme for Doctors Small Business Investment Scheme Housing Investment Scheme Real Estate Investment Program Transport Investment Program
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o o o o
Car Investment Scheme Rural Development Scheme Agricultural Implements Investment Scheme Micro Industries Investment Scheme 6.1 Household Durable Scheme
In a developing country like Bangladesh people of middle and lower middle class especially service holders with limited income find it difficult to purchase articles like refrigerator, television, cot, almirah, wardrobe, sofa-set, pressure cooker, sewing machine etc. which are part of modem and decent living. They cannot enhance the standard and quality of life to the desired level due to the constraint of their limited income. Islami Bank Bangladesh Limited has, therefore, introduced Household Durables Investment Scheme, which has already created great enthusiasm among the people and received tremendous response from them.
Objectives:
o o o To assist the service holders with limited income for purchasing household durables. Increase standard of living and quality of life of the fixed income group. Creating service-holders way of life happy and honest.
Household articles:
o o o o o o o o o o o Furniture like Almirah, Sufa set, wardrobe, etc. Electric & electrical equipment like television, refrigerator, gas cooker, air conditioner PC, washing machine, electric generator IPS, UPS, etc. Construction of dwelling house like corrugated iron sheet, cement, rod, wood etc. Motor cycle/By-cycle, Sewing machine etc. Power generator, motor pump/power pump etc. Gold ornaments. Tube-wells. Mobile Phone set. Medical /Engineering Equipment /Machinery. Educational equipment /machinery, books etc. Any other items considered by the bank suitable.
Beneficiaries:
Interested permanent officials of the following organizations may apply for investment: o Government Organizations. o Semi-Government Organizations and Autonomous Bodies. o Banks and Financial Institutions o Armed Forces, BDR, Police and Ansars. o Teachers of Universities, Government Colleges and Schools and Madrashas. o Officers of International Financial & Relief Organization. o Officers of the multinational companies. o Officer of the local established and renowned public limited companies. Permanent Teachers & Officers of established & prominent private universities, Medical Colleges & University Colleges. o House Owners.
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o o o o o
o o
Doctors, Engineers, Architects, Chartered Accountants/FCMA and other important professionals. Investment and Deposit Clients of IBBL. Shopkeepers and businessman. Wage earners, Panel lawyers of IBBL, C&F Agents enlisted in IBBL. Graduate & Post-Graduate Students of Universities, Medical Colleges, Engineering Colleges, University Colleges for purchasing PC, Medical/Engineering equipment/machinery, Books etc. In case of Government, Semi-Government and Autonomous Organizations the age of the investment clients must be 25 and above with at least three years of service and he must have at least three years of service prior to his retirement. In case of private organizations, teachers of school, collage and madrashas the age of investment clients must be in between 30-50, with at least five years of service and he must have five years of confirm service prior to his retirement in the same organization. In case of others except service holders the age limit must be within 27-60 years. In case of students the minimum age must be 18 years and maximum 25 years.
Ceiling of Investment Amount

For doctors, Engineers, Architects, Chartered Accountants, FCMAs the Ceiling ofthe investment of the Bank will be o For all metropolitan City: Maximum Tk. 3,00,000.00 o District& Municipalities: Maximum Tk. 2,00,000.00 o Other Municipal Areas: Maximum Tk. 1,00,000.00 o For depositors of Mudaraba Term Deposit & Mudaraba Savings A/C Maximum Tk. 2,00,000 by lien theyre A/Cs. o For others: Tk. 1,00,000.00 o NCOs of Bangladesh Armed Forces, Teachers of Primary Schools, Private School & Colleges and other professionals; Maximum Tk. 35,000.00 o For students: Maximum Tk. 40,000 and for personnel of IBBL: Maximum Tk. 75,000
Maturity of investment
o o Maximum 2 years for beneficiaries except bank's personnel Maximum 3 years for Bank's personnel.
Mode of Investment: BaiMuajjal Equity

o Minimum 25% of the total value of the articles. The client shall have to deposit the amount of equity in his Mudaraba Savings /Investment Account with the concerned branch before the disbursement of investment. Minimum 10% of the total value of the articles for Bank's personnel.
Guarantors
o For beneficiaries except Bank's personnel, there should have two guarantors, one may be the Boss /colleague in the same level or upper level and another guarantor may be husband /wives parents, brothers etc. For Bank's personnel, no needs of guarantor.
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Charges:
o For beneficiaries except Bank's personnel, charges are included asProfit Charge 13.5% Supervising 4.00% Risk Charges 2.00% Total 19.5% For Bank's personnel, profit charge is 11 % only.
Disbursement
o After sanction of investment and deposit of required equity by the client, the Branch shall supply to the concerned investment client the desired articles within seven days by procuring them by way of pay-order/cheque/draft etc. favoring the supplier. For ensuring the ownership of the Bank over the goods, all papers and documents related to the procurement of the goods shall remain in the name of the Bank and Bank's sticker shall remain affixed over the same. The ownership shall be transferred in favor of the client after full adjustment of the dues to the Bank.
Mode of Recovery
o o The Bank's investments and profit thereon shall be recovered in 24 monthly installment within a period of 2 (two) years. The monthly installment shall be payable by the first week of every month. The first installment shall be due for payment in the first week of the subsequent month of the disbursement /delivery of goods /articles. Dues payable to the Bank shall be recovered in the following manner depending on the nature of the organization and the status of the client: a) On request of the employee, the employers shall product the monthly installment from the salary and remit the amount to the Bank, in this connection; the client shall have to furnish a letter of consent from the employer. b) Before the delivery of goods, the client shall deposit to the Bank 24 post-dated cheques giving specific dates against each month installment. The cheques shall be presented to the concerned bank on due dates for encashment and adjustment of proceeds towards repayment of installment.
Security
The investment client shall execute/provide the following documents in order to secure the investment. o o o All required charge documents as per rules of the Bank. A written undertaking to the effect that the monthly installments shall be paid regularly. Personal guarantee of an official of the same rank or of superior rank. The guarantee shall have to be duly authenticated by the competent authority of the concerned organization. Personal guarantee of another person, preferably family member.
Procedure for Application

Interested clients shall apply in prescribed form to the concerned Branch. The application shall have to be duly recommended by the Divisional Chief of the organization where the applicant serves. Form and booklet outlining the rules and procedures of the Scheme may be obtained from the selected Branches of the Bank on payment of Tk. 25.00 only.
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Supervision of Investment
Under this Scheme, the Bank, at the initial stage, has engaged M/s. Anudip Services Private Ltd., Ibne Sina Group Investment Company Ltd., Faisal Investment Foundation and Crescent Consultants on commission basis for selection of client, disbursement and recovery of investment and for overall supervision of the Scheme. The concerned investment client shall pay the commission of the supervising agency at the rate of 2% per annum over the investment.
Risk Fund
A risk fund shall be created under this Scheme by charging the investment account @ 2% at a time against total investment at the rate of 1% per annum for 2 years. In case of any genuine damage or the concerned client totally incapable to the Bank, then the amount shall be covered or adjusted from the risk fund.
Other Terms & Conditions

o o o o The concerned Branch of the bank shall take possession of the goods supplied to the client in case of his failure to repay 3 (three) installments consecutively. The client shall bear all necessary expenses relating to license, registration, insurance etc. of the goods supplied. The client shall bear cost of all maintenance, repair and preservation. The client shall use and handle the goods with utmost care and he will be liable to pay for any damage of the articles in his possession due to his negligence, carelessness and inefficient use. In case of total damage and destruction of the goods or if it becomes irreparable, the client shall be liable to pay immediately the balance amount of Bank's investment including profit. The client shall use the goods supplied to him personally and under no circumstances he shall let-out or transfer the possession of the goods to others without prior written permission from the Bank. The client shall be bound to allow the Bank's Authorized agent and representative to inspect the goods as and when require. The client, before availing the investment facility, shall execute Bai-Muajjal agreement and other documents as per investment rules and procedure of the Bank. The client must keep the Branch abreast and informed about any change in his official and residential address. 6.2 Investment Scheme for Doctors Islami Bank Bangladesh Limited has introduced the Doctors Investment Scheme" to ensure modern treatment and medical facilities to the remote place of Bangladesh through extension of Bank's investment facilities for self-employment of newly graduated doctors and at the same time extending investment facilities to the established medical practitioners to procure modem and sophisticated medical equipment.
o o o
Objectives
o To provide investment facilities for the establishment of chambers, clinics, medicine shop and procurement of medical equipment by the unemployed medical graduates and thus to provide self-employment. To assist newly passed unemployed medical graduates to establish clinics by way of formation of groups by 5 doctors. To assist experienced and established physicians to procure improved and modem medical equipment and thus to improve the standard and techniques of treatment.
o o
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To assist specialists and consultant physicians to procure specialized medical equipment for extending improved treatment to the people.
Beneficiaries
o o o o o Newly passed medical graduates who are willing to establish chambers, Pharmacies and small clinics in district and Thana level towns. Experienced and established doctors who are settled in district and other towns but cannot procure modem medical equipment to improve their techniques of treatment. Specialized and consultant physicians who are willing to procure latest and specialized type of medical equipment. Newly passed medical graduates who are willing to form groups in order to establish clinic. Priority is given to specialists and consultant physicians like dentists, child specialists, ophthalmologists etc.
Areas of Investment
o Establishment cost of Chambers, Pharmacies & Clinics. Procurement of medical equipment and purchase of Motor Cycle for visiting patients in rural areas in case of newly passed medical graduates willing to settle in district and Thana towns under selfemployment. Procurement of modem medical equipment by experienced and established doctors. Procurement of modem and sophisticated medical equipment and appliances by specialists and consultant physicians. Cost of establishment of clinics, purchase of machinery, equipment, accessories and other goods in case of establishment of clinics by a group of doctors.
o o o
Ceiling of Investment and duration

Category 1. Self employed doctors in district town 2. Self employed doctors in Thana town 3. Specialists /consultant physicians for modern and sophisticated medical equipment 4. Newly graduate unemployed doctors group for establishment of clinics /diagnostic laboratory, machineries, equipments, accessories and other goods Maximum Maximum Amount (in Tk.) Period 5.00 lacs 5.00 lacs 10.00 lacs 25 lacs for a group of 5 doctors (each 5.00 lacs) 5 years 5 years 5 years
5 years
Investment Mode
o o Hire purchase Shirkatul Meelk: For purchasing of medical equipment and accessories, motorcycle and other goods. Bai-Muajjal: For purchasing chamber, establishment of clinic and Medicines.
Equity
o o o New doctors (under self employment scheme: maximum 10%) Established specialized doctors: minimum 20% Established clinic /diagnostic centre: minimum 30%
Mode of Recovery
o Investment of the Bank is to be repaid on monthly installment basis.
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o o
Re-payment of the 1st installment will start after three months from the date of investment. If any investment client under the scheme fails to pay back three consecutive installments without satisfactory reasons acceptable to the bank for such failure, the bank may take possession and control of the machinery and equipment etc. supplied by the Bank.
Security
o o The ownership of the medical equipment, appliances etc. and the motorcycle supplied by the bank on Hire Purchase-Shirkatul Meelk basis, shall remain with the bank. Against Bank's investment, the clients shall have to mortgage property at least equal to the value of investment by the Bank. However, in case of investment (other than clinic) for self-employment of the newly graduated doctors the condition of mortgage of property may be relaxed, if they are unable to offer mortgage of property as security against investment. The investment clients shall have to provide personal guarantee of person(s) acceptable to the bank, in such cases. Original copy of the graduation and post-graduation certificates shall have to be deposited with the bank, in case of investments for self-employment of unemployed doctors.
Procedure for Application and Sanction

Interested medical graduates shall have to apply in prescribed form through the nearest branch of the Bank. Bank will accord Sanction of the investment if the proposal is found viable and acceptable to the bank after examination if its feasibility. 6.3 Small Business Investment Scheme Bangladesh a third-world developing country that is rich in natural and human resources. Inspire of vast possibilities, the majority people of the country live-in hardship-below poverty tapped, explored and exploited. Physical labor is their only means of earning. A large segment of this populace is active youth force. Many of them are efficient, intelligent and energetic with initiative & drive and have courage to take risks. But they cannot uplift their socio-economic condition due to poverty, lack of financial support and other required facilities. IBBL launch a investment scheme for those youth.
Objectives
o o To expand investment facilities for the small traders entrepreneurs in urban and rural areas with a view to raise their level of income and to improve their quality of life. To inspire and encourage unemployed youths to establish small business enterprises and thereby to create opportunities for self-employment for ensuring social justice and welfare of the people in large scale. To extend investment facilities to those small entrepreneurs who could not avail credit or investment facilities from any bank or financial institutions or otherwise deprived of from such investment facilities.
Eligibility of the Clients

o Investment clients must be permanent residents of the command area of the branch through which they intend to avail investment facilities and they must have valid trade license and shops or selling centers.
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Small business and entrepreneurs who are already engaged in trade and business but cannot run their operations smoothly for shortage of fund/ capital valid to avail investment facilities under the Scheme. Investment shall also be extended to those poor and asset-less unemployed who are honest, efficient, physically and mentally capable with drive and initiative, especially those who have ability to run business. Besides the above categories, investment facilities under this Scheme shall also be extended to small and cottage industries and service sector.
Investment Area
All branches of the Bank are eligible to extend investment facilities under this scheme within 10 (ten) kilometers radius of the respective branch. However, for the deserving and justifiable cases the Management may extend the command area up to a radius of 20 (twenty) kilometers.
Sectors of Investment
o Livestock Rearing of beef fattening, raising and rearing of goats and sheep, poultry, ducks and pigeons. Fishery Fish cultivation: excavation, re-excavation and leasing of ponds for cultivation of fish. Agro-processing: Cane bamboo and choir products, just bags and jute products, spices, ghee, molasses, flour making; oil extraction, sugarcane crushing, paddy and pulses husking, bee-keeping and honey collection and processing and handicrafts etc. Manufacturing Garments making, various types of workshops, container making ( plastic, metal, glass etc), and repairing of rickshaw van and hood of rickshaw, furniture making , quilt and related products making, boat building and repairing blacksmith works bobbin making (plastic, metal etc) manufacturing of spare parts for handloom, candle making, oil seed crushing machine making, basket making, household steel iron implements making manufacturing of various iron products(wire nail, wire net etc) rope making , cap making ; chanachur preparation, adhesive making , making and repairing of bullock-buffalo cart, tanga, ice-cream, school and other vans. Trading/shop keeping Rice-paddy, pulse, salt, pepper, vegetables, molasses, firewood, timber, chicken, fish, dry fish, cattle, banana, onion, betel-nut, seasonal fruits, bamboo, milk, fertilizer, tea, potato, coconut, spices, stationary, goods, grocery items, lungi, clothes, saree, mustard seeds and oil, brick, ginger, oil, cake, leather, just products, second-hand clothes, cotton, peanut, cotton bags, yam, choir, bamboo made products, slippers and shoes, seeds and plants, pottery products, seasonal agriculture products, utensils, wheat, coconut oil, restaurant and hotel honey sugarcane, stove, silver, fish feed, cattle feed, garlic, various food items, crockery, medicine, hardware, iron and steel items, sweetmeat , bicycle/ rickshaw/ rickshaw van parts, glass, watch, electrical goods, books under wears, gamsa, towel, shocks, handkerchief, leather goods, and other household items, homeo-medicine, optical, bakery item etc. Transport Purchase of rickshaw, rickshaw van, bullock cart, tanga, country boat and motorized boat. Services Laundry, flour mill, repairing shop and workshop, pumping shop, spice grinding, mill, paddy-pulse husking mill, saw mill, dying and printing, signboard shop, yam twisting factory, watch repairing shop, television, radio and other electronics repairing shop, refrigerator repairing shop; mustered oil processing shop. Agriculture Implements and Forestry purchase of hand tube wells, fanning and plantation; vegetable garden, sugarcane, litchi garden, mango and jack-fruit, betel nut,
o o
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guava, pineapple and fruit garden; purchase of seed and sapling, silk cocoons, beekeeping, honey collection and processing.
Ceiling of Investment
o o o For all Metropolition cities : Upto Tk. .50 million For Districts & municipalities others up to Tk. 0.30 million Others up to TK. 0.20 million
Mode of Investment
o o Hire Purchase Shirkatul Meelk : For all kinds of machineries i.e equimpments & transport sector. Bai-muajjal-TR: For trading shop keeping, agro-processing and raw materials for manufacturing purposes.
Maturity of Investment
o o For HPSM: Maximum 24 months For Bai-MuajjaI: Maximum 12 months
Equity
o o For HPSM: Maximum 20% on the total value of equipment /transport Bai-MuajjaI (Tk): Not applicable
Security For Investment upto Tk. 30,000.00

o o o Hypothecation of existing and future stock of goods . Ownership of machines & equipments shall remain in Bank's name. Personal guarantee of financially sound respectable 2 (two) persons/ prominent businessmen acceptable to the Bank shall have to be given. Collateral security may relax considering the feasibility of investment and client's ability and sincerity. Hypothecation of existing/ future stock of goods. Ownership of machines & equipments shall remain in the Bank's name. The client shall have to give mortgage of immovable properties to the Bank.
For Investment over Tk. 30,000.00

o o
Group Guarantee
The investment clients shall be encouraged to form groups. Each group shall consist of minimum 5 members. Each member of the group will give guarantee for the investment of other members of the same group. Thus the members jointly and severally will remain liable and responsible for the payment of investment.
Procedure for Recovery

o o o o For HPSM: Monthly installment For Bai-MuajjaI (TR): Monthly /Quarterly /Half Yearly /One payment within maturity period. For Investment up to Tk. 30,000: Monthly installment for personal guarantee . Post dated check: Port dated check to be signed by client should be provided to bank indicating monthly installment each time for whole period of investment.
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Risk Fund
A risk fund is made by bank yearly at a fixed rate on total value of this type of investment. In case of default of client, this fund is used for adjustment.
Mudaraba Savings Account

It is compulsory that every client must open a Mudaraba Savings account. Each client should built savings by way of deposit in this account a sum of Tk. 10.00 each month for every Tk. 1,000.00 of investment. No chequebook shall be issued against this account. Money can be withdrawn from this account if there is no liability against the client.
Supervision
Supervision For effective supervision and smooth operation of the scheme, required number of supervisors shall be engaged at the field level. For this purpose the investment client shall have to pay at the time of investment a sum at the rate of 2% per annum of investment as supervision fee. In case of investment for 2 years, supervision charge shall be 4% i.e. 2% per year.
Review and Evaluation

Review and Evaluation The concerned branch shall arrange meetings of the investment clients occasionally, evaluate the performance of the scheme, discuss problems, and take steps to solve those problems.

Procedure of application for availing investment facilities, investment clients can contact the nearest branch of the Bank and submit application in prescribed form of the Bank. The applicant must open two accounts Al Wadeah Current Account to deposit the sale proceeds of the day and a Mudaraba Savings Account to build-up compulsory savings. The Branch shall take appropriate steps after thorough appraisal of the client's investment application. 6.4 Housing Investment Scheme One of the basic human needs is to have a house to live in. A house is an abode of peace and happiness. Housing has now become an acute problem in the country, especially in the towns, cities and metropolis. With their limited income, it has become almost impossible on the part of the lower middle class, middle class and sometimes, even for upper middle class to solve their housing problem, to meet this basic human need, Islami Bank Bangladesh Limited is committed to contribute to this end to provide a peaceful and happy.
Objectives
o o o o o To extend the benefits of the investment of the Bank under the Scheme to different sections of the people. To assist in solving the existing housing problem of the country. To assist the service holder of professionals with fixed income to arrange for house of their own. To extend the investment facilities of the Bank to every comer of the country, by size of investment, by sector of investment and on the basis of geographical area. To make investment facilities easily available under Islamic Shariah to those people who do not want to avail investment facilities from interest-based financial institutions.
Beneficiaries
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Initially the following categories of people shall be eligible to apply for availing investment facilities under this Scheme: o Officials of the Defense Forces. o Permanent Officials of Government, Semi-Government and Autonomous Organizations. o Teachers of the established Universities, University Colleges & Medical Colleges. o Graduate Engineers, Doctors and established professionals. o Bangladeshi Officials of reputed Multinational Companies, International Financial Organizations, Donor Agencies, Foreign Embassies etc. Officials of local established & reputed Public Limited Companies. o Wage earner professionals like Doctors, Engineers, Accountants, Teachers and any other profession doing good job abroad with hand-some pay-package. o The client must have exclusive and undisputed possession and ownership title over the land on which the proposed house will be constructed. The leased property must be on lease for 99 years and must be legally acceptable for mortgage to the Bank. o If the investment client is a service holder then he must have at least 5 years unexpired service prior to retirement. o Bank will select the client on the basis of the following criteria: Percentage of Bank's investment is less than the clients investment: amount of Bank's investment is comparatively smaller in size, quality of construction & value of the property; constructed house/apartment is in good location & the price is reasonable; return from the property (rented income) & their known sources of income of the applicant; investment servicing capacity of the client is quite satisfactory.
Target Area
At the initial stage, the Scheme is being implemented in: o Dhaka metropolitan area. o Chittagong metropolitan area. o Rajshahi metropolitan area. o Khufna metropolitan area. o Sylhet metropolitan area. Later on the Scheme will be implemented in other district headquarters and business areas in phases.
Scope of Investment
o Investment is to be extended to build new houses on the client's own land, to purchase built houses /apartments /flats and for extension/ completion of the house constructed/under construction. The building to be constructed on the land must be as per approved plan of the competent authority of that area, viz. RAZUK, COA, ROA, KOA etc. The amount of investment will be limited to the following: a) For construction of new building on clients own land: Maximum 60% of the total investment will be mode by bank, which do not exceed Tk. 10 million b) For purchase of apartment /flat/ready-made house: maximum 50% of the total investment will be made by bank, which exceed Tk. 20,00,000. If any client intends to provide the following securities to the Bank duly discharged/ completing necessary formalities by him. Bank may allow further or additional investment in excess of the aforesaid ceiling to the extent of 100% of the value of the securities: TOR & Mudaraba Savings Bond of Islami Bank Bangladesh Limited, TOR/Fixed Deposit of any scheduled Bank, Wage Earners, Bond, ICB Unit
o o
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Certificates, National/Defense Savings Bonds/ Sanchaypatra etc., Sank Guarantee from any scheduled Bank.
Mode of Investment: HPSM Period of Investment

o The maximum period of investment shall be generally 15 years. However, the period investment shall be determined on the basis of the proposal of the client, the amount investment (for which the client has applied) and the ability of the project or client repay the dues. Reasonable gestation period for construction be allowed considering the size construction and Bank's investment. of of to of
Rent for Bank

Bank's Rent the Bank, in accordance with its normal practice shall decide rent on the investment. The clients, who will repay the entire dues in time or before the stipulated time by way of payment of all due installments regularly, they will be allowed rebate on the rent.
Disbursement of Investment
Bank will pay the sanctioned money through Pay-order directly or through investment client to the supplier of construction materials/owner of the apartment/owner of the built, house. However, the following points shall be taken into consideration in disbursing the investment: o In case of purchase of apartment/flat/built house, the client shall have to deposit the equity money in the Branch or produce documentary evidence in support of his investment up to the satisfaction of the concerned Branch. o In case of construction of house on the client's own land or for extension of the existing house, the valuation of the Bank as regards client's investment shall be considered final. o The client shall have to submit to the Bank, the construction plan approved by the competent authority and also the required permission to mortgage the property, where necessary. o The client must execute all necessary documents including mortgage deed and complete all necessary documentation formalities to avail the investment. Related documents of mortgage, agreement of sale and other documents must be vetted by the penal lawyer of the Bank.
Procedure for Recovery

o The client shall have to pay the Bank's dues by installment immediately after the expiry of the period of construction. To ensure payment as per stipulation of sanction the client shall have to deposit post-dated cheques to the Bank for the amount of each monthly installment covering the entire period of investment. The Bank shall realise the amount of monthly installment by depositing the cheque of a particular month on the first week of every month. The client shall have to execute irrevocable power of attorney in favor of the Bank authorizing the Bank to collect monthly rent from the tenants in case of failure of the client to pay the monthly in installment.
Security
o Personal guarantee of the clients, his/her spouse, adult son(s) and daughter(s) shall have to be obtained.
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o o
Mortgage of land and building to be constructed thereon, apartment /flat/house in favor of the Bank. An undertaking from tile client as well as from the dependants (nominees) to the effect that tile retirement benefits including Provident Fund will be appropriated towards adjustment of the house building investment liability of the client prior to any other appropriation, if the liability relating thereto or any part of it remains unadjusted at the time of getting the retirement benefits.

Interested persons shall have to apply in prescribed form of the Bank through the Branch of the concerned area. The Bank shall sanction investment if the proposal is found acceptable after examination of its viability and profitability- The Bank reserves the right to sanction or reject any investment proposal. 6.5 Transport Investment Program Under this scheme, investment in being allowed to the existing successful businessmen professionals and potential entrepreneurs in this sector for all types of road and water transport with simple and easy terms and conditions. The bank is also extending investment facilities to multinational companies, established, business houses and well to do officials and professionals for acquisition of private cars, microbus and jeeps.
Aims and Objectives

o o o To assist in the development of communication system of the country. To help overcome the existing transportation problem. To assist solvent service-holders and professionals having fixed income for acquisition of private cars and thus to help them to improve their professional efficiency and the standard of living.
Categories of Transport
Road Transports o Private care, microbus, jeep, pick-up van. o Bus, truck, minibus. o Auto-rickshaw, tempo. o Ambulance. Water Transports o Cargo vessel of maximum 500 ton capacity. o Ocean going vessel of maximum 800 to capacity.
Target Group
Bus/Truck/Minibus o Successful individual /businessman /firm engaged in transport business and potential Individual/ businessman/firm who intends to take-up transport as business. Private Car /Microbus /Jeep
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o o o o o
Permanent Officials of Government, Semi-government, Autonomous Bodies, Corporations, Banks and Financial /institutions, Established Businessman and Business Establishments. Officials of Defense Forces. Professionals: University Teachers, Doctors and Engineers. Experienced Person/Firm engaged or interested in transport business (Rent-a-car). Reference will be given to those person and firm who are already engaged in transport business.
Auto Rickshaw /Tempo /Pick-up van o Persons /Business /Firms who have already proved the transport business and those efficient and potential persons/businessmen/firms who are interested to take shall transport as business, may apply for investment to purchase auto-rickshaw, tempo and pick up van. Ambulance o Established Clinics and Hospitals. Water Transport o Experienced and successful persons and Businessmen engaged in water transport business.
Target Area
Road Transport: All branches of the Bank. Water Transport: Branches adjacent to the areas of river ports to be given priority. Mode of Investment: Hire-Purchase under Shirkatul Meelk
Ceiling of Investment and Client's Equity

Sl. Categories of Transport Maximum Investment of Client's Equity Bank 70% 60% 50% 50% 30% 40% 50% 50%
1. Microbus /Jeep /Private Car 2. Bus /Truck /Minibus 3. Water Transport 4. Auto Rickshaw /Tempo /Pick-up Van /Ambulance
For service holder the monthly installment does not exceed 40% of his total salary, in case of this scheme.
Period of Investment
Maximum 3 to 5 years from the date of delivery of the vehicle.
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Rent of Investment
The Bank as per existing rules shall charge rent on investment. Clients who will repay the entire investments within the stipulated period or earlier by way of regular payment of installments, shall be given rebate over the rent.
Security
o o o The ownership of the vehicle shall remain in Bank's name till full repayment of investment including rent. The client shall have to mortgage immovable properties as collateral security. In case of Officials of Government, Semi-Government and Autonomous Bodies, personal guarantee of the officer of the same grade or of superior grade and in case of officials of public limited company or business houses, corporate guarantee of the employer/ chairman/managing director shall have to be provided.
Disbursement of Investment
o o o o Bank's sanctioned amount shall be disbursed directly to the supplier of the vehicle. Before disbursement the client must provide his equity and cash security into bank's concerned branch. The cost of chassis and bodybuilding shall be taken into consideration in ascertaining the price. The client shall have to complete all documentation formalities including mortgage of property before disbursement of the Bank's investment.
Supervision
Bank officials or appointed agents of the Bank reserve the right to inspect the vehicle at any time in any place where it is kept or found in order to ascertain its overall condition.
Procedure of Recovery
o o The client shall have to repay the dues to the Bank in monthly installment starting immediately after the expiry of the gestation period fixed by the Bank. Required number of post-dated cheques for the whole period of investment mentioning the amount of monthly installments shall have to be deposited to the Bank. The Bank shall collect the monthly installment of a particular month through encashment of the cheque in the first week of the concerned month. If a client fails to pay 3 consecutive installments, the Bank can take back the possession of which from the client and sell or transfer it to another client as per the rules of the Bank. If any amount remains outstanding after sale or transfer of the vehicle, the client shall remain liable to pay the same to the Bank.
Repair, maintenance & others of the vehicle

The client shall wholly and solely be responsible for proper maintenance, care and safety of the vehicle and shall bear all cost of repair, preservation and maintenance. The client shall also be responsible for any loss and damage of the vehicle and shall also be bound to repay all dues of the Bank immediately in case of total damage or destruction of any vehicle.
Registration and others

o The vehicle shall be registered in the name of Bank. The client shall bear the expenses of registration, primary tax token, route permit, fitness, insurance and all other expenses and shall obtain renewal every year. The client shall have to follow and abide by all other necessary rules of the scheme.
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Procedure for application

Interested Person/Firm must apply through any branch of the Bank for availing investment facilities under this scheme in prescribed form along with required papers and documents. The Bank will consider the proposal as per prescribed rules and sanction and disburse the investment.
6.6 Car Investment Scheme Car is considered as on essential mode of transport in the modem society, particularly by a section of the officials, business houses and business executives and established professionals or movement in discharging their duties and responsibilities punctually and efficiently. Many of these categories of people cannot purchase a car on payment of entire purchase value at a time out of their own sources. To meet this need Islami Bank has introduced the 'Car Investment Scheme' for the mid and high ranking officials of government and semi- government organizations, corporations; executives and directors of big business houses and companies arid also for persons of different professional groups on easy payment terms and conditions.
Objectives
o To meet the demand of senior officials of different organizations, established business houses, companies, and persons of various professional groups who essentially need a car but cannot afford to purchase on payment at a time. To assist the above categories of persons to procure a car on easy payment terms, conditions, and thus become its proud owner. To assist in minimizing transport problem in the private sector and help the mid and highranking officials and professionals with fixed income in the improvement of their standard of living. To extend the range of Bank's investment facilities to various sections of people in line with the ideals of the Bank. To diversify the investment portfolio of the Bank by size, sector and volume.
o o
o o
Beneficiaries
Permanent senior officers/executives of the following organization Category-A o Government Organizations. o Semi-Government Organizations/Autonomous Bodies/Corporations. o Banks. o Commissioned Officer of Armed Forces, BDR, Police and Ansars. o Teachers of the Universities, Government Colleges. Category-B o Executives/Directors of big companies and business houses of repute. o Member of all other professional groups having good income. The clients, in both the categories, must be within age group of 27-50 years with minimum 6(six) years service in case of service holders. In all cases the clients must have sufficient capacity to pay the installments in due time to the satisfaction of the Bank. The Bank reserves the right to regret the sanction of any proposal not found suitable.
Nature of Car & Procurement Procedure

o New/reconditioned cars of reputed brands imported within the provision of import policy in force shall be allowed to be procured under the Scheme.
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Interested clients should submit at least 3 (three) quotations from 3(three) different bonafide and genuine car dealers /importers /sellers along with the prescribed application form duly filled in. No supervisory agent of the Bank, appointed under the Scheme, shall involve ill this business, directly or indirectly.
Ceiling of Investment
Bank's investment is maximum Tk. 3.50 Lac per client against purchase cost of the vehicle registration and comprehensive insurance cover shall be in the name of the Bank. The clients shall have to bear all subsequent expenses relating to blue book, registration, first party insurance, tax token, fitness certificate etc.
Client's Equity
Minimum 30% of the purchase cost of the vehicle should have the equity of the clients. The amount of equity shall have to be deposited with the Bank before disbursement of Bank's investment.
Period of investment is maximum 4 (four) years from the date of disbursement or delivery of the vehicle to the client, whichever is earlier.
Mode of Investment
a. Hire Purchase b. Hire Purchase under Shirkatul Meelk.
Security Requirements
The following shall be obtained as security against bank's investment under this scheme: If the client is under category A, any of the following things are required. o Personal guarantee of the investment client. o Personal guarantee of any of the officers of the bank and status equal tot he client or an officer of higher rank. o The guarantee shall have to be duly authenticated by the competent authority of the organization/institution where the client serves. o Employer's certificate to the effect that the client is in permanent service of the organization. The net pay and pay scale of the client is to be mentioned in the certificate. o An undertaking from the client to the effect that in case of his failure to pay regular installments, the amount is to be deducted from his salary at source for adjustment of dues to the Bank. In case of clients falling under category B of eligibility criteria, any of the following additional collateral/securities are required: o Mortgage of land o Bank Guarantee o Deposit of ICB Unit Certificates/National Savings Certificate /National /Share certificates of reputed companies duly discharged/transferred in favor of tile bank and/or completing required formalities.
Procedure for Application & Sanction of Investment

Interested persons falling willing the eligibility criteria are required to apply in prescribed form to the concerned Branch. Their respective Departmental/Divisional Heads should duly recommend the applications of service holders. The Bank shall sanction investment, if the proposal is found
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suitable and viable after feasibility study. The Bank reserves the right to sanction any investment or reject it.
Mode of Disbursement
Bank's sanctioned amount shall be disbursed directly to the supplier of the vehicle as mentioned in the quotation/indent submitted and accepted for the purpose on completion of the following requirements: o Deposit of the equity amount with the concerned Branch. o Completion of all formalities including documentation for the investment. o Obtaining of securities /collateral as per sanction requirements.
Supervision
Bank may engage supervising agent(s) to supervise, monitor and recover the investments under the Scheme. The cost of the supervision charge shall be recovered from the client along with rent.
Mode of Recovery
Dues to the Bank shall be recovered in the following manner: o In equal monthly installment along with monthly rent, starting from the fist week of the month, following the month of disbursement of delivery of the care whichever is earlier. o The monthly installment shall be payable by the first week of every month. o Post-dated cheques for the whole period of investment mentioning the amount of monthly installment shall have to be deposited by the client. In the first week of every month, the cheque(s) shall be presented for clearance /collection for the adjustment of the monthly installment. o The Branch shall have the right to take possession of the vehicle in case of failure of the client to pay 3 (three) consecutive monthly installment.
Bank's Charges
o o o Rate of Return: 13% per annum or the rate to be determined time to time. Risk Fund: 1% per annum (2% per annum where the supervising agents not engaged). Supervising Charge: 1% per annum. Charge is nil, where supervising agents not engaged.
Insurance
The vehicle shall be covered by first party (comprehensive) insurance covering all possible risks throughout the investment period at the cost of the client. The client shall have to ensure timely renewal of insurance and payment of premium.
Registration:
The car shall have to be registered in the name of the Bank only. After payment of the entire investment of the Bank including the charges etc., the car shall be transferred in the name of the client.
Maintenance:
The client shall have to maintain the vehicle properly for ensuring its normal operation and shall be solely responsible for loss/damage, if any, as long as it is in his possession irrespective of risk
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covered by insurance policy. Accordingly, repairing and maintenance cost of operation during investment period, renewal of blue book, tax token, fitness and insurance shall have to be borne by the client.
Inspection:
For the purpose of inspecting the status, operation and custody of the vehicle, the Bank or its authorized agent has the right, at all reasonable time, to enter into the house, office, factory, garage or the premise of the client where the vehicle is kept.
Other Terms and Condition:

In addition to the procedure, terms and conditions already mentioned, the investment client shall have to abide by the following terms and conditions: o The vehicle supplied to the investment client shall have to be used by him with optimum care and that the client shall remain liable for compensation, replacement etc., if any damage is caused to the vehicle .due to his negligence, carelessness and inefficient handling. o In the event, the vehicle is lost or totally damaged and rendered irreparable due to his negligence, carelessness or inefficient handling, the client shall be liable to pay to the Bank the balance of the principal amount and rent etc. immediately. o The investment client shall remain in sole control and custody of the vehicle supplied to him and shall not let out, lend of transfer the possession of rights therein any manner to a third party before adjustment of bank's dues and without prior written permission from the Bank. o The investment client shall keep the vehicle supplied to him available for inspection by any authorized representative of the Bank as and when required. o The investment client shall have to execute necessary documents including the normal charge documents and also offer the securities /collateral required by the Bank before availing investment facility under the Scheme. o Default in payment of 3 (three) consecutive installments shall render the client liable to hand over the vehicle to the Bank. o The investment client must keep the Bank informed about any charge in his official and residential address. 6.7 Rural Development Scheme Islami Bank Bangladesh limited (IBBL) envisages an economic system based on equity and Justice. IBBL has devised a Rural Development Scheme (RDS) with a view to creating employment opportunity for them and alleviates their poverty through income generation activities. IBBL through its RDS project has been implementing integrated programs for the landless poor, laborers and marginal farmers aimed at meeting their basic needs and Promoting their comprehensive development. Consciousness among the poor needs to be enhanced so that they can firm ups their position in the socio- economic structure of the country. In order to consolidate their economic base, invested money should be used in income generating activities so the poorer section of the population can become self-reliant. RSD works for the realization of that objective.
Objectives
o To bring the poorer populating within an organizational framework by setting up certain rules and regulations with a view to free them from the curse of poverty and make them self reliant, thereby converting RDS into a self reliant sustainable programs.
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o o o o o o
o o
To extend bank investment to agricultural and non-agricultural sectors in the rural areas. To invest on employment and income generation activities of the rural population. To provide self-employment for the poor and distressed by group/center formation. To bring both male and female to provide employment under income generation activities and help them to attain self-reliance step by step. To continue to support the self-reliance drive of the poor in their search of capital formation from savings they make out of their increased income. To help reduce and eventually stop, through enhancement of their income, the lending on thigh and exorbitant rates of interest by the village money lenders, the advance sale of crops, land and mortgage of land by the poor at the time when they are most in need. To follow an approach of comprehensive development side by side will economic development. To provide financing to develop housing in the area.
Selection of Ideal Village

For creating an ideal village, one/more villages to be selected within two km of each specified branches area. While doing this considers the following matters. o Easy transportation o Having agricultural /non-agricultural sectors. o Majority of low-income holder
Beneficiaries
The RDS of IBBL is target group based. Beneficiaries of the plan are thus ladles, wage laborers and marginal farmers. Selection criteria for members of the target group are as follows. o Farmers owning up to 0.50 acres of land including sharecroppers; o Persons engaged in non-agricultural activities owning up to 0.50 acres land or landless; o Borrower or defaulters of any other bank or organization will by no means be the beneficiaries of the plan. o Females belonging to the families of the serial 1 and 2 above, interested in income earning projects, but who unable to do so due to dearth of money, may form a group and get the financial support. o Distressed people may undertake income-generating schemes in non-agricultural sectors such as cow/goat/chicken etc. for their self-employment. o Landless to be given priority in selecting target groups whose yearly family income must be below Tk. 15.000/-. Investment Avenues, Higher Limits & Duration Table: Investment Avenues, Higher Limits and Duration Investment Avenues Higher Limit Duration Remarks Crop production Fish cultivation in ponds Irrigation Agriculture implements Tk. 10,000/Tk. 25.000/Tk. 5,000/irrigation Tk. 25,000/Highest 1 (one) year Crops of 21 varieties
Highest 3 (three) year According to need Highest 1 (one) year Highest 3 (three) year 10% borrowers equity
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All non agricultural sectors Tk. 10,000/-
Highest 1 (one) year
For 343 nonagricultural items payable in weekly installment
Rickshaw, van and rural Tk. 5,000/transports Hand Tube well Tk. 3,000/-
Highest 2 (two) year Highest 3 (three) year
Payable in weekly installment
House building materials
Tk. 15.000/-
Highest 3 (three) year
Mode of Investment
o o o o o o Bai Muajjal Mudaraba Murabaha HPSM Musharakah Bai-Salam
Profit on Investment and other charges

Clients should carry specific rate of profit on net investment of bank, supervision fee & risk fund.
Security
o o For every member: Personal guarantee from other member of his /her group should be provided for each investment scheme. For cultivation of fish in pond and purchase of equipment for agriculture and irrigation: Assisted security is taken
Mudaraba Savings A/C

Opening a Mudaraba Savings A/C by each client /member is compulsory. In this A/C each member must deposit Tk. 5 weekly. No checkbook is issued for this A/C. Client can withdraw money from this A/C, if he /she has no any other types of liability.
Process of Recovery
o For the non agricultural sector installments may be made on a weekly/monthly/quarterly basis, weekly installments are preferred since the frequency of the short intervals often times lead to more successful recovery. Usually a payment schedule requiring 45 fixed installments of principal and profit are prescribed, allowing a two-week gestation period. This payment schedule allows for up to three missed installments, two installments are not required during Bids and one installment may be missed in the event there is an accident. Determination for the appropriated installment frequency in the agricultural sector depends on the cropping cycle. In case of vegetable and green curry production, weekly installments allowing a longer gestation period is suggested. Generally all investments are repayable in weekly equal installments. In exceptional cases, with income generated beyond the date of the installment payment, a timely token payment is advisable followed by payment of the residual amount along with the next due installment.
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Supervision
Enough number of supervisors is worked for accurate management of this scheme.
Procedure/or application
Clients of selected ideal villages can apply in the prescribed form of the bank's concerned branches through concerned group. If this application is accepted after proper checking their investment is granted and disbursed by bank.
Islami Bank Foundation's Advanced Activities

Under Bank's Rural Development Scheme, Islami Bank Foundation, welfare institute of Islami Bank takes some advanced activities on education (both primary and Islami base), medicare and healthcare sectors to create ideal villages. 6.8 Agricultural Implements Investment Scheme Bangladesh is predominantly an agricultural country with vast majority of people living in rural areas. Most of our people for their living are dependent on agriculture. Agriculture still contributes the lion share of the gross domestic product. But we could not as yet become self-sufficient in food production. We still import a bulk quantity of food grains from road to meet the deficit. We must modernize our agriculture and establish more and more industries in order to minimize Islami Bank Bangladesh Limited Imports. We can bring about revolutionary changes in the agricultural sector by adopting modem agricultural technology replacing the age-old traditional way of cultivation and increasing the use of fertilizer. This can only be done by collective efforts of both public and private sectors. Islami Bank Bangladesh Limited is a welfare oriented Bank. It can play positive and important role in the economic development, progress and uplift of the country by investing in the agricultural sector. The Bank has, therefore, introduced Agriculture Implements Investment Scheme" to provide power tillers, power pumps, shallow tube wells, thrasher machine etc. One easy term to the unemployed youths for self-employment and to the farmers to help augments production in agricultural sector.
Objectives
o o o o To To To To create opportunities for self-employment of un-employed rural youths. help farmers to augment agricultural production. assist in the introduction and use of modem technology in the auricultural sector. play auxiliary role in achieving self-sufficiency in food production.
Items a/Agricultural Implements

o Power tillers o Power pump o Thrasher Machine o Shallow Tube well Any other agricultural implements proposed by the branch and which has local demand. These implements may be of any popular brand. Any locally manufactured brand, which has large demand, is also acceptable. The choice of investment clients shall be given preference in this regard.
Investment Area
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Investments are allowed under this Scheme through all branches of he Bank except the branches located in the metropolitan areas. The command area of the concerned branch is within 15 miles radius from its location.
Beneficiaries
o Educated or half-educated rural youths, educated or illiterate farmers and any person ready to accept agriculture as business, may apply for investment facilities under this scheme. Preference shall be given to those applicants who have passed S.S.C or above. The applicant farmer should have sound health and his age must be minimum 18 years and maximum 50 year. If the applicant is educated or half educated youth than his age must be between 18 to35 years. The applicant must be physically and mentally fit and willing to operate the machine himself. The applicant must be a permanent resident of the concerned area and be willing to stay and work there.
o o
Period of Investment: 2 (Two) years Mode of Investment: Hire Purchase Shirkatul Meelk Client Equity
Generally the investment client shall have to pay 20 % of the cost of agriculture implements/ equipment as equity. Equity shall be 10% if the Bank undertakes any special project under the supervision of any registered NGO approved by the Bank. The client shall have to bear the cost of installation of the agriculture implements\equipment and related expenses.
Security
o o o The agricultural implements to be supplied to the investment client shall remain in the name of the bank till the repayment\adjustment of the dues to the bank. Collateral security of immovable property equal to the amount of bank's investment backed by irrecoverable general power of attorney. Client, who is unable to offer collateral security of immovable property, shall have to provide personal guarantee of two respectable persons acceptable to the Bank. Guarantors should preferably be client's father/guardian or teacher.
Repayment of Procedure
Repayment Procedure The investment shall have to be repaid in 4 installments within a year. The installment shall be fixed on the basis of the sowing / transplantation and harvesting seasons of the crop. The branch Manager shall deice both the amount and time of the repayment of installment.
Risk Fund
Risk Fund Under this scheme a risk fund shall be created by debiting the concerned investment account an amount equal to 2%of the Bank's investment at a time at the rate of 1 % per annum for 2 years. The risk fund will be utilized for the following purposes:
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o o
For meeting the cost of repair of the implements supplied if there is any damage of the implements due to accidents during operations. To cover the loss (if any), against, the investment subject to approval from the head office.
Supervision
o o The overall supervision of the investment shall be the responsibility of the concerned branch. For supervision at the field level the Bank, may engage educated unemployed youths of the concerned area as per rules of the Bank. Supervision fee at the rate 2% over investment may be charged from the investment client for this purpose.
Bi-monthly Meeting
The concerned branch shall arrange bi-monthly meeting with investment clients and shall evaluate the success of the scheme and discuss problems and take measures to solve them.
Procedure for Submission of Application and Sanction

Interested investment clients shall have to apply to apply to the concerned branch in prescribed form of the Bank for investment facility under the scheme. The bank shall consider the proposal in the light of aforementioned terms and conditions and if found viable then shall sanction and disburse the investment. 6.9 Micro Industries Investment Scheme Islami Bank Bangladesh Ltd. has been appreciably participating to improve the micro industries by financing industrial sector. With a view to creating wider base for industries, the Bank has decided to launch "Micro Industries Investment Scheme" through its Branches. This scheme has been devised to career to the investment needs of those persons who intend to set-up new micro industrial ventures or to restructure their old units by way of BMRE involving a total cost of Tk. 5.00 Lac.
Objectives:
o o To create income generating employment opportunities through establishment of new micro industries and BMRE of existing units by providing necessary investment facilities. To encourage establishment of micro industries in different areas of the country by potential entrepreneurs like educated unemployed youths, technically qualified and skilled / semi skilled persons. To encourage wage earners to utilize their hard-earned money in the country by providing additional investment needs for establishment of micro-industries. To provide investment facilities for self-employment of the unemployed and under employed persons having education, knowledge, skill, experience and initiative to undertake micro industrial enterprises.
o o
Beneficiaries
o o Engineering diploma degree holders from any Technical Notational Training Institutes and willing to set-up micro industries. Educated unemployed youths having initiative and knowledge regarding the proposed industry.
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o o o o
Skilled and semiskilled persons having practical knowledge and experience in industrial operations. Persons already engaged in micro-industries as owners and willing for BMRE of their enterprises. Wage Earners who want to establish micro industries having work experience/ training in the particular field of industry. The proposed enterprise must be exclusively owned by Bangladeshi Nationals, which use indigenous raw materials or imported raw materials not exceeding 25% of the total requirement of raw materials. Defaulters and persons/enterprises having outstanding liabilities with other Banks and Financial Institutions will not be eligible for availing investment under the scheme.
Ceiling of investment by Bank

The extent of Bank's investment will depend upon the actual requirement of a particular industry/ enterprise, its nature of production, model & origin of machineries the working capital requirements etc. The Branch should ascertain the cost to the project taking into account all the above issues. Bank's investment shall not be more than 60% of the cost of machineries or 50% of the total cost of the project (both machinery & working capital), whichever is less, within the maximum total investment ceiling of Tk.5.00 lac per project/enterprise. The client's equity shall be calculated taking into account cash investment plus the cost of the project land & building if owned.
Security
o o o o o To secure Bank's investment, collateral security of immovable properties backed by irrevocable General Power for Attorney shall have to be obtained. In case of technically qualified persons and educated unemployed youths, the original educational certificates shall have to be deposited with the Bank. The ownership of machineries/equipments shall remain in the name of the Bank till full adjustment of Bank's dues. The stock (existing & future) shall remain hypothecated with the Bank till full adjustment of Bank's investment. In case of exceptionally deserving candidates, such as educated, experienced, sincere, hardworking young-men with good reputation who intend to set-up & run the industries fulfilling all the terms & conditions except that of collaterals they may be allowed an investment up to a maximum ceiling of Tk. 2.00 lac without collateral but on personal guarantee of 2(two) reputable persons having good financial means and social standing acceptable to the Bank.
Capital Machinery: 5 years (Exclude reasonable gestation period) Raw Materials: 1 year (From date of disbursement of investment)
Risk Fund
The client will contribute in the risk fund @ 20% of the total Bank's investment for the project/ enterprise at the time of disbursement in order to meet any loss caused by genuine / and unforeseen risks hazards.
Mode of Investment
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Capital Machinery: Hire Purchase Shirkatul Meelk Raw Materials: Murabaha
Recovery of Investment
The mode of payment shall be determined considering the cash flow of the particular project enterprise within the investment period. The Branch in consultation with the client will determine the installment and payment period. However, the following may be considered in fixing the mode of payment. (a) Hire Purchase: In monthly/ fortnightly/ weekly installment basis. (b) Murabaha (TR): In Lump sum at the end of the tenure of investment In order to encourage regular payment of Bank's dues, branch should encourage installment payment in both the modes. This will reduce the risk of overdoes & diversion of funds.
Supervision
Close supervision must be ensured by the branch for proper implementation of the project and recovery of installments in time. For this purpose supervisors (technical hands) shall have to be appointed for each of the designated branches Initially at the stage of implementation, the supervisor must visit the project weekly and after implementation at least once in a month keep the Branch Manager informed about the position of he project in detail.
Sanction & Disbursement

Project investment Department of Head office shall scrutinize the proposal on the basis of the information furnished and the recommendation of the Branch and Zonal Office. If the proposal is found suitable in all respect for making investment. Head Office will issue sanction advice to the Branch, Thereafter, necessary arrangements shall be made by the Branch for disbursement, only after completion of all the required formalities including documentation as per Bank's rules regulations and norms.
Social Benefits
The educated unemployed, technically qualified persons skilled and semi skilled persons will be socially rehabilitated and will get better employment and income generating opportunities. Unemployment and its consequent evils will be gradually eliminated from the society. Wage earners will get opportunity to utilize their hard earned money in productive & profitable enterprises & can settle themselves within the country in a peaceful environment with their family members. The quality of life of these entrepreneurs will improve and it will gradually develop the socioeconomic condition of the country.
7. FINDING OF PROBLEMS REGARDING INVESTMENT OF IBBL

Islamic Banking is a new phenomenon in our country during last two decades. So majority of our people have no proper knowledge about the activities of Islamic Banking as well as its investment mechanism hamper large scope of investment of IBBL.
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Most of the people in our country have a bad impression of IBBLs operations regarding indirect generation of interest which meaning no difference between investment of IBBL loan / Credit / advance of conventional banks for this reason, they are not too much interested to make investment with IBBL. Because of improper and insufficient application of Islamic Banking rule in our country the investment operations of IBBL can't run smoothly. IBBL that is committed to avoid interest can't invest the permissible part of its statutory liquidity Reserve and short Term liquidity surplus in those securities. This Bank can't invest in all economic sectors that are prohibited by the law of Islam. Profitable investment portfolio of IBBL requires clear investment knowledge according to Islamic Shariah. But sometimes IBBL can't invest its assets in proper portfolio due to insufficient and unskilled manpower in these regards .As a result, there is a large amount of money being idle and thus potential profit is not increasing. This Bank revalues its investment operations within limited number of investment modes and does not initiate investment modes according to changing [diverse needs of people Sometimes investment operations of IBBL are hampered due to increase, dishonest, indiscreet, hypocritical nature of people. IBBL has no strong promotional activities to increase motivate its present and potential investment client.
In general o o o IBBL does not grant investment portfolio for new entrepreneurs new businessmen new companies etc., which ultimately create "Class Banking". There are limited scopes to deal women entrepreneurs and professionals for making investment by women interpreters. In rural areas for low income community, this Bank grants investment an group not individual .as a result, the mission, using invested money in income generating activities so the poor needy population can become self reliant - is failed. Moreover, it enhances group dependence. In some sectors like housing, real estate, project (industry) etc. this Bank disburses total invested money in times according to Banks pre-determined proportion.
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8. RECOMMENDATIONS
o IBBL can diffuse its scope of investment through focusing Shariah concept regarding investment among the Bank officers; employer and the Clients by strong training, workshops and Clients get - together. The authority of IBBL should conveyance pressure on Government bodies to run proper and sufficient application of Islamic law in Bangladesh. Inclusion of more subjects based on the Quran and Sunnah in the training courses at the Islami Bank training & Research Academy in order to develop human resources of IBBL. IBBL should frequently monitor the changes in the existing investment areas and should enter into new investment areas where opportunities of future growth exist. Arrangements of monthly or quarterly workshops for the clients selected by the branches in order to promote investment clients of desired level. To fulfill the vision of mass banking the bank should grants investment portfolio to new entrepreneurs and new companies. To gain success in the programs like Poverty Alleviation and Self Reliant especially in rural areas, this bank should provide investment facilities not only on the basis of individual factors (5Cs) but also on the basis of some economic factors like general income level, per capita income; etc to farther strengthen the base of such investments. IBBL should appoint a sufficient number of women employees to deal women entrepreneurs and professionals, understand their needs, and thus create demand for investment. The Bank should disburse total invested money at once to the clients to achieve full benefits of invested money.
o o o o o o
o Build good value for sponsors and shareholders. o o o Formulation of Recruitment / remuneration policy should be outstanding. Enhancement of remuneration package should be competitive and attractive. Eventually, it should be mentioned that IBBL is still very successful and competitive in their customer service, banking operation, management process, record keeping and overall activities of banking. o The Bank should go aggressive advertising and promotional activities to get a broad geographic coverage. o IBBL should utilize "Internship Program" as one kind of promotion policy to encourage its present and potential investment clients. To do so this Bank should provide facilities to the internees through proper placement and practical operations as well as job certainty to those who bring introduce themselves the best performers in doing their particulars. o IBBL should appoint a sufficient number of women employees to deal women entrepreneurs and professionals and understand their needs and thus create demand for investment.
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9. CONCLUSSION
IBBL is trying to develop banking sector through welfare and servicing to the people. Islami economy and banking are bound together. IBBL has emerged facing the many obstacles yet. This bank is trying to operate their activities according to Islam. Most of the people in our country have a bad impression about IBBLs operations regarding indirect generation of interest, which means no difference between investments of IBBL loan/credit/advance of conventional banks for this reason. They are not much interested to investment with IBBL because majority of our people have no proper knowledge about the activities of Islami banking as well as its investment mechanisms. IBBL through its steady progress and continuous success has, by how, earned the reputation of being one of the leading private sector banks of the country. The bank has shown steady progress in this important sector. IBBLs capital adequacy, deposits, reserves, earning per share, export, import and remittances are increasing day by day. So, no doubt IBBL is a growing profitable financial institution. Interest free banking system is no more a concept. It is now a Reality, a dynamic system, embodying a set of superior banking mechanism. More than 300 Islamic bank and financial institutions are operating in different Countries throughout the world with a marked success from this inception in our country in 1983. IBBL has been operating with real and confidence in corporation with other conventional banks. The significant growing of IBBL has encouraged the traditional banks to open Islamic banking window, like HSBC, Dhaka Bank Ltd., Prime Bank Ltd., The city Bank Ltd. Though IBBL has reached the top position among the PCBs in our country, it has to more concentrate its customers service to survive in the long run by facing the competitors banking era. In my study I have found that IBBL has reached this position by its commitment, peoples love and dedicated human resources. Islami Bank has been shown its supremacy in all kinds of banking operations in our country. To conclude we must say that, Islami bank Bangladesh Limited (IBBL) has immense potential in Bangladesh. It can play vital role in bringing revolutionary changes in our life with both material and moral world and in individual and collective level. stron g strategies in
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Investment Mechanism in Islami Bank Limited

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Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Primary data: These types of information were collected by interviewing knowledgeable

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

2. ISLAMIC BANKING IN THE WORLD

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

3. ISLAMI BANK BANGLADESH LIMITED

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Character (a) The Human Factor

(b) Management Assessment

(e) Personal Finance/Credit Discipline

Investment Mechanism of Islami Bank Bangladesh Limited

is (potentially) positively correlated with investment/ loan repayment

Capacity: (a) The Performance Factor

(b) Financial Assessment

Capital The Financial Factor

Collateral The Security Factor

Investment Mechanism of Islami Bank Bangladesh Limited

Amount (million) 113989 46142 11336 14252 4583 72933 263225

Investment Mechanism of Islami Bank Bangladesh Limited

Source: Annual Report 2011

Source: Annual Report 2011

Investment Mechanism of Islami Bank Bangladesh Limited

Source: Annual Report 2011

Investment Mechanism of Islami Bank Bangladesh Limited

Bai Mechanism (Trading Mode)

Ijara Mechanism (Leasing Mode)

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Stages of Hire Purchase under Shirkatul Meelk

Types of sale contract in hire purchase under Shirkatul Meelk

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Processing of IBBL:

(2) APPLICATION STAGE

Investment Mechanism of Islami Bank Bangladesh Limited

(3) APPRAISAL STAGE

(4) SANCTIONING STAGE

(5) DOCUMENTATION STAGE

(6) DISBURSEMENT STAGE

(7) MONITORING &RECOVERY STAGE

(1) Selection of the client Here, investment

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

6. SPECIAL SCHEMES UNDER INVESTMENT MODES

Investment Mechanism of Islami Bank Bangladesh Limited

Investment Mechanism of Islami Bank Bangladesh Limited

Ceiling of Investment Amount