Final 12
Final 12
Final 12
Bank is financial institutions which work as a intermediary/ middleman between savers and
investors. Shahjalal Islami bank limited is a commercial bank and its play a very important role
in our economy; in fact it is difficult imaging how our economic system would function
efficiently without the help of commercial bank. They are heart of our financial structure since
they have the ability, co-operation with the Bangladesh Bank to add to the money supply of the
nation and thus create additional purchasing power. These characteristics set commercial banks
apart from other financial institution. In addition to issuing deposits payable on demand they
accept time deposit. By lending and investing these resources and by transferring funds
throughout the nation and even between countries, they make possible a more complete
utilization of resources of the nation. Although banks create no new wealth, their lending.
Investing and related activities facilitate the economic process of production, distribution and
consumption. There are mainly three sections in SJIBL via General Banking Division,
Investment Division and Foreign Trade Division. These Divisions have small departments or
units under them.
Page 1 of 68
ORGANIZATION OVERVIEW
1.1 History
Shahjalal Islami Bank Limited (SJIBL), a Shariah based commercial bank in Bangladesh, was
incorporated as a public limited company on 1 st April, 2001 under Companies Act 1994.The
bank commenced commercial operation on 10th May, 2001 by opening its first branch i.e.
Dhaka Main Branch at 84, Dilkusha, Dhaka obtaining the license from Bangladesh Bank, the
Central Bank of Bangladesh. Its corporate head office is situated at 10, Dilkusha C/A, Jibon
Bima Bhaban, Dhaka-1000, Bangladesh. The bank opened two branches in 2001, six branches in
2002, two branches in 2003, two branches in 2004, and four branches in 2005, eleven branches
in 2006, 2007 and 2012. Total number of branches stood at 84 in 2012 and some more branches
are likely to open in important business locations of the country during 2012 subject to the
approval of Bangladesh Bank.
SJIBL offers a full range of banking services for the personal and corporate customers, covering
all segment of society within the framework of Banking Company Act 1994 as well as rules and
regulations laid down by central bank. Diversification of products and services include corporate
banking, retail banking and consumer banking right from industry to agriculture, real estate to
software and is backed by the latest technology.
The bank is being managed by a group of highly experienced professionals with diversified
experience in finance and banking. The bank has already achieved tremendous progress in only
five years. The bank has already ranked as one of the quality service providers and is known for
its reputation.
1.2 Vision of SJIBL
To be the unique modern Islami Bank in Bangladesh and to make significant
contribution to
the national economy and enhance customers trust & wealth, quality investment, employees
value and rapid growth in shareholders equity.
1.3 Mission of SJIBL
To provide quality services to customers.
Page 2 of 68
To identify customers needs and monitor their perception towards meeting those needs.
To review and update policies, procedures and practices to enhance the ability to extend
better services to the customer.
To train and develop all employees and provide them adequate resource so that the customer
needs are reasonably addressed.
Page 3 of 68
Legal Form
Commencement
10th May 2001
of Business
Registered
Office
Telephone No.
88-02-9570812, 7160591
Fax No.
88-02-9570809, 9553562
Website
www.shahjalalbank.com.bd
SWIFT
SJBL BD DH
Chairman
Managing
Director
Auditors
Tax Advisor
Legal Advisor
No. of Branches 84
No. of ATM
Booth
34
No. of SME
Centers
06
Off-Shore
banking Unit
01
No. of
Employees
1811
Stock Summary:
Authorized
Capital
Paid up Capital
Tk. 10
Page 5 of 68
progress, Assistance & service to the mass people are the basic objectives of Shahjalal Islami
Bank Limited.
ORGANIZATION STRUCTURE
There are different wings to consist the organizational structure of SJIBL. There are
Board of Directors
Board Committees
Executive Committees
Policy Committees
Management Team
2.1 Board of Directors
There is a board of Directors of 13 members in the bank. The board of Directors is the apex body
of the bank. It appears like this-
Chairmen
Vice-Chairmen
Directors
Managing Directors
Secretary
Page 6 of 68
Chairman
Vice Chairman
Vice Chairman
Page 7 of 68
Director
Director
Director
Director
Director
Director
Director
Director
Page 8 of 68
Director
Director
Independent Director
Independent Director
Managing Director
02.
03.
Chairman
Vice Chairman
Member
04.
05.
06.
Member
Member
Member
07.
08.
Member
Page 9 of 68
Page 10 of 68
Managing Directors
Executive vice-president
Vice-president
ice-president
ice-president
Sr. Asst. vice-president
Asst. vice-president
Page 11 of 68
BANKING SYSTEM
3.1 Deposit scheme
Deposit is the life-blood of a bank. Bank has given utmost importance in mobilization of
deposits introducing a few popular and innovative schemes. The mobilized deposits were
ploughed back in economic activities through profitable and safe investment.
This type of deposit schemes of SJIBL are:
Other than these deposits schemes SJIBL also operate some traditional deposit schemes these
are:
The total deposit of SJIBL stood at TK. 71483.68 million as on 31Decembre, 2012 as against
TK.52618.19 million of 31 December, 2011, registering increase of TK. 23866.05 million and
growth rate is 38.00%. The deposit mix of the bank as on 31 December, 2012 is as bellow:
Sl. No.
Nature of Deposit
Taka in Million
1
2
3
4
5
3,266
4,863.52
1765.11
41,190.16
13,426.65
% of Total
Deposit
5
9
4
48
24
Page 12 of 68
Other Deposits
Total
5,972.24
71483.68
10
100.00%
Taka in
million
14,353.61
26,224.94
10,463.44
206.13
6,721.76
1057.61
Murabaha
Bi-muajjal
Hire-purchase & Ijara
Investment against L/C
Bill purchase & discounted
Investment against scheme
deposits
Quard
268.33
Others
4,322.95
Total
63,628.77
Table: Investment Portfolio Of 2009
Percentage of
Total Investment
21%
42%
15%
1%
9%
3%
2%
7%
100.00%
Page 13 of 68
ii.
Local and international transaction with the same card (for duel card).
Balance Inquiry.
Mini statement.
PIN change.
Page 15 of 68
BANK CAPITAL
4.1 Equity
Authorized capital -------------------------------------Tk.6,000 million
Paid-up Capital
Comparative position of equity for the year 2012 & 2011 is given below:
Particulars
2012
2011
Paid-up capital
6000
5566
Statutory reserve
2,082
1023.55
Retained earnings
1053
935.91
General Provision
1028
863.48
Exchange Equalization
0.34
0.94
402.66
283.12
10566
8673
Total Equity
4.2 Capital Adequacy
Page 16 of 68
Total equity of the Bank as on 31.12.2011was Tk. 8673 million and the total equity stood at Tk.
10566 million on 31.12.2012, which was13.98% of the Risk weighted Assets as against the
requirement of 10.00%.
The core capital was 12.04% of Risk weighted Assets as on 31 st December 2012 as against
requirement of 5%.
NUMBER
Dhaka
39
Chittagong
Sylhet
Khulna
20
9
5
Rajshahi
Barisal
Total
84
employees to meet the above challenges. To keep the employees motivated, incentives,
performance award, promotion and accelerated promotion are given on a regular basis.
Total Deposit
36,484
Total Investment
5,939.90
Total Income
7,117.14
Total Expenditure
5,075.88
2,041.16
79,450.24
HIGHLIGHTS OF PERFORMANCE
Amount in Taka
SL #
1.
PARTICULARS
Paid up Capital
2.
2012
4,245,980,00
0
8,069,092,33
5
2011
2,871,650,000
6,040,882,802
Page 18 of 68
3.
Capital Surplus
2,
122,702,335
85,216,968,6
53
66,484,239,9
93
62,918,773,6
68
20,771,113,5
00
92.62%
2,189,432,802
4.
Total Assets
5.
Total Deposit
0.94%
0.44%
10.
1217,709,533
1246,992,691
11.
143,243,000
248,246,000
12.
48,009,403
43,009,403
13.
40,801,366
20,723,827
14.
Cost of Fund
11.07%
10.99%
15.
45,303,841,268
16.
17.
18.
49,889,424,6
92
9,327,543,96
1
11.74%
2.08%
2.22%
19.
292,717,942
157,974,405
20.
39.07
29.84
21.
39.07
29.84
22.
9.79
8.55
6.
7.
8.
9.
48,346,996,395
42,618,187,303
40,616,605,335
12,402,844,932
96.03%
6,043,155,127
16.84%
Page 19 of 68
INCOME INVESTMENT
6.1 Income
Total income of SJIBL mainly derives from two important sources; investment income and noninvestment income.
Investment Income: Total investment income of the Bank as at 31st December 20012
was Tk.5,939.90 million as against Tk.4,428.89 million of the preceding year registering
34.12% growth over last year, which was 83.46% of the total income against 83.80% of
2011
Non-Investment Income: Total Non-Investment income of the Bank as at 31st December
2012 was Tk.1,177.14 million as against Tk.856.49 million of the preceding year
registering 37.44% growth over last year, which was 16.54% of the total income
compared to 16.20% of 2011.
6.2 Expenditure
Total expenditure of SJIBL mainly derived from two important sources; profit paid on deposit
and operating expense.
Profit Paid on Deposits:
Mudaraba Depositors in the year 2012against Tk. 2,962.40 million of the year 2011 which
being 70.71% of the Investment income earned from deployment fund of which was 66.89%
in 2011. Deposit expenses were 82.75% of total Expenditure in 2012 as against 85.23% of
2011.
Operating Expenses: Total operating expenses as on 31.12.2012 was Tk.875.60 million as
against Tk.513.19 million of 2011, which was 17.25% of the total Expenditure of the year
2012 against 14.77% of 2011.
Page 20 of 68
2012
10,939.90
5,075.88
5864.02
441.00
2011
8,428.89
4,745.59
3683.3
444.00
& Others
Net Profit before Taxation
Less: Provision for taxation
Net Profit
5423.02
1424.60
3998.42
3239.3
1248.09
1991.21
Appropriation:
2012
2011
759.03
1011.53
513.16
804.55
Statutory Reserve
Retained Earnings
Page 21 of 68
Page 22 of 68
Thus, Shahjalal Islami Bank Limited will be turned into a dynamic Islamic Bank in the country
and will expand its Banking Business all over the Country to provide the Banking services to the
groups including the deserving economic groups of the society who have no easy access to the
banking channel.
GENERAL BANKING
General banking is the starting point of all the banking operations. This department does the
most important and basic works of the bank. It is also the department, which provides day-to-day
services to the customers.
All other departments are linked with this department. It also pays a vital role in deposit
mobilization of the branch. SJIBL provides different types of accounts, locker facilities and
special types of saving scheme under general banking. For proper functioning and excellent
customer service this department is divided into various sections namely as follows.
7.1 Account opening section:
Bankers and Customer relationship established through opening an account. It binds the banker
and customer into a contractual relationship. There are two types of account i.e. deposit account
and investment account. Generally account opening means to open a deposit account. Deposits
are the lifeblood of a bank, which is invested, in a bank through opening an account. This section
of general banking of the SJIBL deals with opening of different types of accounts. It is also deals
with issuing of checkbooks and different deposits books to the different accounts openers. A
customer can open different types of accounts through this department.
7.2 Cash Section:
Cash is the lifeblood of all financial activities. Cash section is a very sensitive point of the
branch. This section deals with all types of negotiable instruments and it includes vault, used as
the store of cash, instruments. The vault is insured up to TK.20 LAC. Insured amount yet to be
enhanced to Tk. 40 lac. Operation of this section begins when the banking hour starts. Cash
officer begins his/her transaction with taking money from the vault, known as the opening cash
balance. Vault is kept in a more secured place. The amount of opening cash balance is entered
into a register.
Page 23 of 68
After whole days transaction, the surplus money remains in the cash counter is put back in the
vault and known as the closing balance. If the cash stock goes beyond this limit, the excess cash
is then transferred to SJIBL Foreign Exchange branch. The main functions of this section are Cash Receipt
Cash Payment
Cash department is the most vital department of a bank and it is call blood of a bank. It is a
platform to communicate with customers. Cash department receives & pays cash directly.
In the cash department there are following register:
Vault register
Key register
There is a procedure of cash in and cash-out from the vault. Also a systematic procedure is
maintained for receiving cash through different vouchers and payment against different cheques
and vouchers.
Cash Receive:
Cash is the life of a bank. Different types of from are use for cash deposits for different types of
accounts. Cash may be received by the following ways:
Credit voucher
Different types of instrument remittance (TT, DO, PO etc.) are received by respective
forms.
Share collection
Page 24 of 68
Cash payment:
Cash is paid in payment counter against the following instrument:
Cheques
Pay-in-slip
Procedure:
Receive of the cheques with a signature behind it.
1. Scrutinize it by an authorized officer.
2. Submit to computer-to-computer section for checking the available balance.
3. Cancelled & seal up Pay in Cash and cancellation through sign up.
4. Again submitted to computer section for debiting the party A/C and seal up Posted.
5. Send to cash counter payment officer.
6. Cash officer checks the cancellation, seal and seal up Cash Payment
7. Entry the payments register.
8. Take another signature of payee behind the cheque and pay cash.
Cash Balance:
At the end of the transaction:
Total receiving + Opening balance Total payment = Closing balance for that day &
opening balance for the next day.
Counting cash.
where everyday the representative of the member banks sits to clear the cheques. For clearing
there is a department in every Bank.
This department receives cheques, drafts and like instruments from its customers for the purpose
of collection with a deposit slip over the counter crediting their accounts. Clearing of cheque is
done through the clearing house in Bangladesh Bank. Everyday the first hour starts at 10:00 a.m.
and returns house at 5:00 p.m.
Deposit Mobilization of SJIBL
Bank account is a contractual relationship between a bank and the customers. It is the best way
for a customer to build relationship with the bank. Like interest-based conventional banks, the
main function of Shahjalal Islami Bank Limited (SJIBL) is to mobilize saving and provide
financial support to the entrepreneurs. Depositors receive interest in a predetermined rate for
their deposits make with an interest based banks, where SJIBL neither pay not receive interest
and mobilizes saving of the common people in line with Islamic Shariah.
Deposit account can take in a various forms such as:
8.1 Al Wadiah Current Deposit (AC)
8.2 Mudaraba Savings Deposit (MSD)
8.1 Al Wadiah Current Deposit (ACD)
Shahjalal Islami Bank Limited receives deposits in its Al Wadia Current Account. It has some
similarity with the current account of conventional bank. The term Al Wadiah Current Deposit
means deposit of money allowing somebody to sue it. Banks being trustee preserves and keeps or
in safe custody of what is deposited. Depositors feel safe in keeping their money with the bank
and take transaction facilities. Bank provides assurance of returning money to the depositors on
demand. In the process of opening Al-Wadiah Deposit, the bank gets approval of the depositors
regarding the use of the deposited money and earns profit out of their development. Any losses
incurred by way of such investment are totally borne by the bank. Thus, the depositors dont take
the risk of losses with Al-Wadiah Current Deposit; they also dont expect any profit from it.
Depositors are provided with cheque book. They can withdraw or deposit any amount as and
Page 26 of 68
when they like. Bank may charge a fee in the account. Al-Wadiah Deposit are short terms and
very uncertain, thus banks have to be very useful in the investment of money from this account.
8.2 Mudaraba saving Deposit (MSD):
Mudaraba Saving Deposit (MSD) is open by the lower and middle people who wish to save a
part of their incomes to meet their future need intend to earn an income from their savings. It
aims at encouraging savings of non-trading persons(s), institution(s), society, etc. by depositing
small amount of money in the bank.
The number of withdrawals over a period of time is limited. Two withdrawals per
week are permitted. But more than that no interest will be paid on rest amount for
that month.
The total amount of one or more withdrawal on any date should not exceed 25% of
the in the accounts unless 7 (seven) days advance notice is given.
The customer may deposit any amount in the savings bank account subject to a
minimum of Tk.2000/- in the account.
Payment of Profit:
Shahjalal Islami Bank Limited is proving 5.5% profit on Mudaraba Saving Deposit.
Provisional Rate of Profit
Page 27 of 68
Provisional Rate
4.00%
4.50%
5.50%
i) 1 Month
9.00%
11.00 %
iii) 1 Year
11.00 %
5.00%
5.50%
6.00%
7.00%
Discontinued
2 Years
Discontinued
3 Years
12.00%
(Tk.1,000/-per month per lac: before tax)
11.61%
(Minimum amount Tk. 10,000.00 & Will be
doubled in 6 years )
11.04%
(Minimum amount Tk. 10,000.00 & Will be tripled
Page 28 of 68
in 10 years )
c) Millionaire Scheme:
i) 5 Years
(Tk 12,295/ Per Month)
11.50%
ii) 10 Years
(Tk. 4,570/ Per Month)
11.00%
iii) 12 Years
(Tk.3,340/ Per Month)
11.00%
iv) 15 Years
(Tk.2,180/ Per Month)
11.00%
v) 20 Years
(Tk.1,145/ Per Month)
11.00%
11.50%
ii) 5 Years
11.50%
iii) 8 Years
11.00%
iv) 10 Years
11.00%
e) Hajj Scheme:**
Up to 10 Years
12.05%-12.50%
Monthly Deposit Scheme: Monthly installment and provisional amount payable at maturity
(amount in Taka)
Period
3 Years
Installment
500
1,000
2,000
5,000
10,000
25,000
50,000
21,579
43,158
86,316
2,15,791
4,31,581
10,78,953 21,57,905
Page 29 of 68
5 Years
40,679
81,357
1,62,714 4,06,786
8,13,572
20,33,933 40,67,858
8 Years
77,133
10 Years
Mudaraba Hajj Scheme Deposit: Monthly installment and provisional amount payable at
maturity (amount in Taka)
Account opened in 2013
sYear Monthly
Installment
Monthly
Rate
Yearly
Rate
24,000
3,08,250
12.50%
13.00%
12,000
3,28,450
12.45%
13.05%
7,800
3,41,550
12.40%
13.05%
5,750
3,58,250
12.35%
13.01%
4,500
3,74,250
12.30%
12.97%
3,650
3,89,250
12.25%
12.92%
3,000
3,99,100
12.20%
12.87%
2,500
4,06,600
12.15%
12.82%
2,100
4,11,250
12.10%
12.77%
10
1,800
4,19,450
12.05%
12.72%
Two copies of passport size photographs of accountholder and one copy passport
size photo of nominee.
Introductory reference.
Commissioners/Chairman Certificate.
Date of opening
Types of account.
Initial deposit
Tk.
Tk.
Tk.
Tk.
Tk.
Tk.
period
5 years
8 years
10
1,000
40125
77500
111000
2,000
80250
155000
222000
5,000
10,000
25,000
50,000
160500 401250 802500 2006250
310000 775000 1550000 3875000
444000 1110000 2220000 5550000
years
9.5 Mudaraba Term Deposit Receipt (MTDR)
It is like a fixed deposit in the conventional banking system but it does not receive or accept
interest father, this account give profit and collect deposits. In this mode less than that Tk.1 crore
or Tk.1 crore and above can be deposited against client will get non-transferable instrument of
equal amount. If a customer withdraw his/her money before one month than he/she will not get
any kind of profit. On the other hand, after the
matured if client dont withdraw his/her money than it will be auto renewed with imposed profit
for the next days. If a depositor would like to withdraw his profit after six months he/she will get
the profit accordance with previous years profit rate. After the announced yearly profit or loss, if
bank felt in loss posting then the depositor bound to incur the loss. In absence of account holder
Page 32 of 68
the selected nominee will get the money. Account holder bound to bear any kind of tax or excise
duty according to government circular. The profit rates of this account are:
Time of Deposit
3 Months
6 Months
1 Year
11.25%
11.50%
11.75%
Provisional Rate
Remarks
Credit
3 Years
12.00%
Number
Account
is
required
9.7 Double Profit Deposit Scheme (DPDS)
The Shahjalal Islami Bank gives the facility to the client by the Islamic Shariah Mudaraba rules
and regulations. In this scheme depositors can deposit more than Tk.10, 000 for 6 years and after
the maturity date accountholder will receive double than his/her deposited amount. Depositor
will get 80% investment facility by deposit the deposit receipt. Bank can invest this amount any
sector by the Islamic Shariah rules and regulations. Accountholder are bound to pay any
government tax. For opening this account applicant need recent one copy photograph and one
copy photograph of nominee. The profit rates of this account are:
Period of Scheme
6 Years
Provisional Rate
11.61%
Page 33 of 68
Rate
12 years
Tk. 3280/=
Tk.10 Lac
15 Years
Tk. 2120/=
Tk.10 Lac
20 Years
Tk. 1080/=
Tk.10 Lac
25 Years
Tk. 575/=
Tk.10 Lac
9.9 Hajj scheme:
Hajj is compulsory for all who are the ability to hajj at that cause Hajj is important for all. Hajj is
the important way for the Islam but many people have the interest but there have no ability.
Many people create the ability but at that time they are physically weak. At that cause Shahjalal
Islami Bank open this scheme.
Requirements for this scheme:
Must be age above 18.
Account holder must be citizen of the Bangladesh.
Account holder must be needed the attested photo with introducer.
Gradient can maintain their account for the child.
Duration of the scheme:
This account is duration time is 1 year to 25 year.
12 monthly schemes within one year.
Amount of scheme:
Duration (Year)
Monthly scheme
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
(In Taka)
(In Taka)
10200
5100
3325
2450
1925
1570
1310
1120
965
840
740
655
585
520
465
420
380
340
310
280
255
230
210
190
175
129950
137465
142350
148240
154475
160570
166170
172780
178390
183950
190230
196210
202970
207920
213370
220375
227300
231240
239180
244600
251790
256315
263780
268700
278350
2.
SJIBL VISA Debit Card: To a customer, My card, my money concept is used for Debit Card.
Any accountholder of SJIBL can apply for a SJIBL VISA Debit Card against his/her Al-Wadiah
Current Deposit (AWCD), Mudaraba Savings Deposit (MSD) or Mudaraba Short Notice Deposit
(MSND) Account. He/she is fully authorized to enjoy the benefits of cash withdrawal from
ATMs, liberty of shopping, dining, paying utility bills and having access account information
through SMS, etc. round the clock.
Page 36 of 68
Usage Limit
Description
Transaction Limit
Cash withdrawal limit (total) 4 times per day
Cash
withdrawal
limit Tk. 20,000 per day
(amount)
Balance checking
Mini statement printing
PIN change
Invalid PIN retry count
Card usage limit in ATMs
(total)
Fees & Charges:
A. VISA Debit Card
Particulars
Renewal
Replacement PIN
re-issue
ON-US
Q-Cash
Others (VISA)
General
Primary
500
400
200
Free
10
125
250
400
200
Free
10
125
Supplementary
Number of Account
ACD
242
DPMSS
236
Hajj
28
Page 37 of 68
HDS
21
INV
1015
MBMSS
27
MCWDS
MDS
2200
MIS-3
448
MS-12
210
MS-I5
101`
MS-20
80
MS-25
160
MSD
2139
MTDR
1616
SND
60
Page 38 of 68
Investment
The special feature of the Investment policy of Shahjalal Islami Bank Limited is to invest on the
basis of profit loss sharing system in accordance with the tenets and principles of Islamic
Shariah. Earning of profit is not only the motive and objective of the banks investment policy
rather emphasize is given in attaining social good and in creating employment opportunities.
The investment and credit department is very important department of a Bank. The money
mobilized from ultimate surplus units are allocated through this department to the ultimate
deficit unit (Borrower). The success of this department keeps a great influence over the profit of
a bank. Failure of this department may lead the bank to huge losses or even to bankruptcy. That
is why; special care should be given to this department.
Bank landing is important to the economy. Adequate finance can maintain a stable output. But as
liquidity and profitability are conflicting considerations, SJIBL, as a bank, while employing the
funds pays due regard to both profitability and liquidity.
Investment and credit department receive application from clients in a prescribed application
form supplied by the Shahjalal Islami Bank Limited. This application form contains detail about
Page 39 of 68
the borrowers such as names address of the borrowers/ directors/partners/proprietors, type and
nature of the business, security offered, market of the borrower product, annual sales and
production etc. The applicant must duly sign the application form. The branch officer after
receiving the application form scrutinize the information provided in the form, collect additional
financial information of the proposed firm, detail financial and other relevant information of
sister concern, if any. After appraising the investment request and its securities the branch makes
an investment proposal with detail information to the head office for approval. The officer incharge and manager must sign this investment proposal as well. If head office approves the
investment proposal, the branch prepares all documentation and make arrangement for
investment disbursement Shahjalal Islami Bank Limited offer various types of investments.
The objectives and principles of investment operations of the Bank are :
To invest fund strictly in accordance with the principles of Islamic Shariah.
To diversify its investment portfolio by size of investment, by sectors (public & private),
by economic purpose, by securities and by geographical area including industrial,
commercial & agricultural.
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.
To make investment keeping the socio-economic requirement of the country in view.
To increase the number of potential investors by making participatory and productive
investment.
To finance various development schemes for poverty alleviation, income and
employment generation with a view to accelerating sustainable socio-economic growth
and upliftment of the society.
To invest in the form of goods and commodities rather than give out cash money to the
investment clients.
To encourage social upliftment enterprises.
To shun even highly profitable investment in fields forbidden under Islamic Shariah and
are harmful for the society.
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The Bank extends investments under the principles of Bai-Murabaha, Bai-Muazzal, Hire
Purchase under Shirkatul Meelk and Musharaka. The Bank is making sincere efforts to
go for investment under Mudaraba principle in near future.
investment
decision
through
successfully
passing the
following
crucial
steps:
Selection
Here,
of the client
investment
taker
(client)
approaches
to any of the
branch
Shahjalal
of
Islami
Bank Limited
(SJIBL).
Then, he talks
with
the
respective
manager
or
officer
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(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.
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 SJIBL are prescribed below:
I.
II.
III.
IV.
V.
VI.
VII.
investment;
Abridged pro forma income statement for the musharaka/mudaraba investment;
Attested copy of the Memorandum of Association (MOA) & Articles of Association
VIII.
IX.
X.
XI.
schedule);
Summary of the personal movable & immovable assets; and others.
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.
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In order to appraise the client, Shahjalal Islami Bank Bangladesh Limited (SJIBL) 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:
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
P.
Q.
R.
S.
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.
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.
Sanctioning stage
At this stage, the bank officially approves the investment proposal of the respective client. In
this case client receives banks sanction letter. Shahjalal Islami Bank Bangladesh Limited
(SJIBL)s sanction letter contains the following elements:
1.
2.
3.
4.
5.
6.
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%)
X.
XI.
XII.
XIII.
XIV.
XV.
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Page 46 of 68
To reduce the aforesaid risks an independent system is introduced which will safeguard the
buyer as well as seller in an international trade. Actually banks play due role by getting into
two parties and bind them.
Foreign Trade
Import Section
Export Section
Remittance
Section
Page 47 of 68
Buyers and sellers enter into contracts for buying and selling goods/ services and the buyer
instructs his bank to issue L/C in favor of the seller. Here bank assumes fiduciary function
between the buyer and seller.
SJIBL deals with two types of L/C. These are 1. Sight L/C
2. Deferred L/C.
5.2.1Forms of Letter of Credit:
A Letter of Credit (L/C) may be two forms. These as Below
4.2.1Revocable letter of credit
4.2.2Irrevocable letter of credit
Revocable L/C
If any letter of credit can be amendment or change of any clause canceled by consent of the
exporter and importer is known revocable letter of credit.
A revocable letter of credit can be amended or canceled by the issuing bank at any time without
prior notice beneficiary. It does not constitute a legally binding undertaking by the bank to make
payment. Revocation is possible only until the issuing bank or correspondent has honored the
document. Thus a revocable credit does not usually provide adequate security for the beneficiary.
Undertaking by the bank to make payment. Revocation is possible only until the issuing bank or
correspondent has honored the document. Thus a revocable credit does not usually provide
adequate security for the beneficiary.
Irrevocable
L/C
A documentary credit takes many different forms. The first decision i.e. the choice of the basic
form of the credit is usually made at the time of negotiation between the seller and the buyer. The
terms of the credit will be determined in detail when the buyer instructs his bank to issue the
credit. At this stage the seller, on being informed by the bank regarding the credit terms, should
ensure whether the credit terms are agreeable and, if necessary, demand from the buyer a more
precise wording of the credit terms or the necessary amendments. It is in the interest of both the
Page 48 of 68
parties to the contract that the individual terms of the credit transaction are clearly and correctly
stipulated. This facilitates the examination of the documents at the time of utilization.
The following parties are involved to a letter of credit, namely Obligatory Parties are:
Importer/ Buyer/ Applicant
Opening Bank/ Issuing bank
Advising Bank/ Notifying Bank
Exporter/ Seller/ Beneficiary
Optional Parties (In case of need) are
Negotiating Bank
Confirming Bank
Paying/ Reimbursing bank
An importer is required to have the following formalities to import the goods through SJIBL:
An account with Islami Bank Bangladesh Ltd. FEX. Branch
Import Registration Certificate (IRC)
Tax Paying Identification (TIN) Number
Proforma Invoice/ Indent
Membership Certificate
LCA (Letter of Credit Application) form duly attested
One set of IMP Form
Insurance Cover note with money receipt
Others
Page 49 of 68
IMP Procedure
All payments for imports into Bangladesh are required to be reported to Bangladesh Bank on
IMP form. The importer submits the IMP form in duplicate duly filled in and signed by him or by
his authorized agent.
Subject to compliance with other conditions laid down in this chapter and the current IPO,
import LCs may be opened on deferred payment (DA) basis in the follows cases:
Capital machinery up to 360 days usance basis;
Industrial raw materials for own use of industrial importers (including back-to-back
imports discussed later in the section) on up to 180 days usance basis.
Import of coastal vessels including oil tankers and ocean-going vessels including those
procured for scrapping on up to 360 days usance basis;
Import of agricultural implements and chemical fertilizer on up to 180 days basis;
Import of life saving drugs on up to 90 days usance basis;
For import on deferred payment basis, the price must be internationally competitive and usance
interest, if any, should not be higher than the LIBOR for the corresponding period or the rate
prevailing in the currency of the country of the supplier.
Instructions regarding opening of import LCs on longer usance terms against suppliers credits
arranged by industrial enterprise in the private sector as per general or specific BOI approval are
contained in chapter 23 of the Guidelines for Foreign Trade Transactions of Bangladesh Bank.
Page 51 of 68
Export Section
Back-to-Back L/C
Export L/C
Country of destination;
Page 53 of 68
Port of destination;
Quantity;
Terms of sale;
Shipment Date;
Securing The Order: Upon registration, the exporter may proceed to secure the export
order. This can be done by contracting the buyers directly through correspondence.
Signing Of The Contract : While making a contract, the following points are to be
mentioned: a) Description of the goods; b) Quantity of the commodity; c) Price of the
commodity; d) Shipment; e) Insurance and marks; f) Inspection, and g) Arbitration.
Procuring The Materials: After making the deal and on having the L/C opened in his
favor, the next step for the exporter is set about the task of procuring or manufacturing
the contracted merchandise.
Registration of Sale: This is needed when the proposed items to be exported are raw jute
and jute-made goods.
Shipment of Goods : The following documents are normally involved at the stage of
shipment: (a) EXP From, (b) photocopy of registration certificate, (c) photocopy of
contract, (d) photocopy of the L/C, (e) customs copy of ERF Form for shipment of jutemade goods and EPC Form for raw jute, (f) freight certificate from the bank in case of
Page 54 of 68
payment of the freight if the port of lading is involved, (g) railway receipt, berg receipt or
truck receipt.
Page 55 of 68
DA/DP/Sight Bills
Noting/Protesting
Advising fate of the bill
Realization of Collection charges, interest etc
Case in need
Clearance, storage, insurance etc. at destination
Mode of Presentation of the bill
Western Union a fast, reliable and convenient way to send a money transfer
Western Union Financial Services Inc. U.S.A. is the number one and reliable money transfer
company in the world. This modern Electronic Technology based money transfer company has
earned world wide reputation in transferring money from one country to another country within
the shortest possible time.
Shahjalal Islami Bank Limited has set up a Representation Agreement with Western Union
Financial Services Inc. U.S.A. Millions of people have confidence on Western Union for sending
money to their friends and family. Through Western Union Money Transfer Service, Bangladeshi
Wage Earners can send money quickly from over 280,000 Western Union Agent Locations in
Page 56 of 68
over 200 countries and territories world wide- the worlds largest network of its kind, only by
visiting any branches of Shahjalal Islami Bank Limited in Bangladesh.
The money sent by your loved ones is very special to you indeed. So, at Western Union, we offer
the following benefits:
2012
Taka
2011
Taka
7,117,040,267
5,285,386,647
4,558,492,854
3,173,458,754
Page 57 of 68
2,558,547,413
2,111,927,893
(246,000,000)
(244,000,000)
2,312,547,413
1,867,927,893
20%
275,149,767
15%
724,596,028
31%
748,090,566
40%
To Statutory Reserve
359,032,864
16%
313,160,020
17%
756,853,130
33%
531,527,540
28%
Retained earnings
Depreciation
711,535,429
45,317,701
2,312,547,413 100%
504,549,513
26,978,027
1,867,927,893 100%
6.2 Economic Value Added Statement for the year ended 31 December 2012
Economic Value Addition (EVA) indicates the true economic profit of the company. EVA is an
estimate of the amount by which earnings exceed or fall short of required minireturn for
shareholders at comparable risks.
Particulars
Total Revenue
Expenses
Corporate Tax
Capital Charges
Economic Value Added
2012
7,117.04
5,075
724.60
601.10
715.47
Taka in Million
2011
5,285.39
3,475.59
748.09
447.19
614.52
Page 58 of 68
6.3 Market Value Added Statement for the year ended 31 December 2012
Market Value Addition (MVA) is the difference between the equity market value of a company
and the book value of equity invested in the company. A high MVA indicates that the company
has created substantial wealth for the shareholders.
Particulars
Market value of Total Equity
Less: Book value of Total Equity
Market Value Added
2012
10,480.87
5,429.97
5,050.89
2012
Taka
2011
Taka
562,922,561
449,615,577
3,515,663,193 2,773,858,394
4,078,585,754 3,223,473,971
1,729,470,208 546,298,932
404,441,115 168,432,590
2,133,911,323 714,731,522
4,287,781,041 5,270,089,600
1,100,000,000 800,000,000
2,383,146,682 344,189,400
3,483,146,682 1,144,189,400
Page 59 of 68
Investments
General Investment etc.
Bills Purchased and Discounted
8
9
10
40,369,639,045 29,197,016,442
3,588,621,666 3,721,757,226
43,958,260,711 32,918,773,668
620,466,461
358,743,429
338,806,004
499,438,757
58,920,895,401 44,109,502,922
11
4,500,000,000
4,654,500,000
12
3,072,788,942
27,578,741,808
12,489,742,364
3,966,538,988
351,419,391
47,459,231,493
1,863,522,467
18,985,664,403
10,191,759,337
2,975,717,377
263,076,409
34,279,739,993
Other Liabilities
Deffered Tax Liabilities
Total Liabilities
13
14
1,995,596,548
1,549,568,372
39,434,092
20,253,883
53,994,262,133 40,504,062,248
15
16
17
18
2,740,095,600
1,182,585,039
753,328,328
250,624,301
2,245,980,000
823,552,175
535,908,499
-
4,926,633,268
3,605,440,674
58,920,895,401
44,109,502,922
Page 60 of 68
2012
Taka
2011
Taka
21
22
5,530,882,252
4,200,278,401
1,330,603,851
4,236,170,670
2,962,395,290
1,273,775,380
23
24
25
409,019,391
926,165,551
250,973,073
1,586,158,015
2,916,761,866
192,717,942
693,074,139
163,423,896
1,049,215,977
2,322,991,357
26
27
28
29
30
31
32
33
466,715,391
100,478,972
724,909
11,315,142
40,536,536
5,350,000
4,040,999
152,557
200,000
52,631,301
22,330,358
171,121,380
875,597,545
34
35
36
271,249,767
69,802,239
521,683
9,398,720
29,702,471
3,900,000
2,302,983
144,610
200,000
31,862,115
94,106,670
513,191,258
Page 61 of 68
20
Total Provision
37
Total Profit before Provisions for Taxation
Deffered Tax Expenses
Current Tax Expenses
38
13.2
16
17
2,041,164,321
(80,000,000)
(125,000,000)
(40,000,000)
-
1,809,800,099
(5,000,000)
(140,000,000)
(70,500,000)
(27,500,000)
(1,000,000)
(246,000,000)
1,795,164,321
19,180,209
705,415,819
1,070,568,293
(1,000,000)
(244,000,000)
1,565,800,099
13,472,886
734,617,680
817,709,533
359,032,864
711,535,429
1,070,568,293
313,160,020
504,549,513
817,709,533
41,792,899
711,535,429
753,328,328
39.07
31,358,986
504,549,513
535,908,499
29.84
39
Developed Management System: SJIBL has better management system which is always
responsible for better service.
More sources for investment: For adequate financial ability they can provide loan to the
more investment clients.
Straightforward and Reliable employee: All of the employees of SJIBL are sincere
reliable. They are always devoted themselves to the works for better customer service.
Better Goodwill: Shahjalal Islami Bank Limited has already achieved a goodwill among
the clients that helps it to retain valuable clients.
Server problem
Many branches can be opened to reach the banks services in remote location.
7.2 Findings
Lack of strong monitoring unit.
Sometimes the process of information transferring to the management is lengthy.
Banks deal with documents not goods is one of the core principles of conventional
banking. However Islamic banking needs to with goods are imposed by Shariah.
Bank has limited ATM booth.
Lake of central AC for better working environment.
Generally investment clients do not come to the Islamic Banks only for Shariah purpose
rather for low transaction cost.
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7.3 Recommendation
Proper and sufficient training is required for each and every staff to work with full
capability in the best way.
Proper monitoring is the pre-consideration for good collection. So monitoring unit is
required to be efficient enough to collect more deposit.
Staffs of branches require being sincere enough in their jobs. This will help in banking
procedure.
The brochures of the products and services of the branch can be mailed through the
welcome letters along with the status of the customers via courier.
Interpersonal relationship needs to be built among the employees and superiors.
Customer must be convinced to use token system, which will help the personnel of the
customer service work smoothly.
Complain of the customers should be decreased on zero level.
Assurance the accuracy of on line banking.
Increase the SJIBLs own ATM booth.
SJIBL requires resorting to massive image re-engineering in order to capture the public
perception to take the lead role in this sector.
SJIBLs investment processing should become easier than other conventional banks.
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SJIBL should make its investment schemes more attractive for availing high-return
projects.
SJIBL should consider utilization of rural potentials from both efficiency and equity
grounds in the context of the present-day socio-economic conditions of Bangladesh.
Strong commitments and stepping up through experiment and implementation of
innovative ideas are the appropriate ways to do that.
SJIBL should deserve immediate attention in the promotion of the image of Shariah
based banks as PLS (Profit-loss-sharing)-banks.
7.4 Conclusion
Shahjalal Islami Bank Limited is one of the most renowned banks in the country.
SJIBL has introduced a new dimension in the field of innovative and benevolent banking in our
country. The bank has successfully made a positive contribution to the economy of Bangladesh
with in very short period of time. Its profit is gradually increasing. Therefore, Shahjalal Islami
Bank Limited (SJIBL) is trying to establish the maximum welfare of the society by maintaining
the principles of Islamic Shariah which is based on Quran and Sunnah. Profit earning is not
the only motive and objective of the banks overall policy rather emphasis is given in attaining
social good and in creation employment opportunities. Shahjalal Islami Bank Limited (SJIBL)
has been established with a view to conduct interest free banking to establish participatory
banking instead of debtor-creditor relationship and finally to establish welfare oriented banking
through its overall banking operations that would lead to a just society.
I hope SJIBL do more work for socio-economic development besides their banking business. To
keep pace with ever-changing uncertain domestic business environment and face the challenges
of revised global economic scenario, the bank should be more
introduce new marketing strategy to hold the strong position in home and abroad. For the future
planning and the successful operation in its prime goal in this current competitive environment I
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hope this report can provide a good guideline. I wish continuous success and healthy business
portfolio of Shahjalal Islami Bank Limited (SJIBL).
BIBLIOGRAPHY
Peter S. Rose, Sylvia C. Hudgins, Bank Management & Financial Services Sixth
Edition, McGraw-HILL International Editions
Shahjalal Islami Bank Annual Report 2009
Statement of Affairs, Shahjalal Islami Bank Limited (Banani Branch)
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