Financial institutions are investment intermediaries linking the savers and users of fund.
Introduction:
Financial institutions are investment intermediaries linking the savers and users of fund. These intermediaries are interposed between the ultimate borrowers and lenders permitting them efficient transfer of funds. Individuals having surplus funds can finance them for reasonable return to entrepreneurs who need funds to take the advantage of economically and financially viable investment opportunities. The existence of financial institutions facilitates such exchange of resources. As a result, both the borrowers and lenders are better off than they would have been without financial institutions and market intermediaries. Thus, these financial institutions, such as banks, have a positive role in financing and investment which is a multidimensional process involving the complexity of many interrelated and interdependent factors of diversified nature. It is difficult to assess the contribution of each factor independently.
Investment facility is one of the most important Departments for a bank. All the Investment is dealt with by the Investment Departments of different banks. The whole world is getting transformed into a big global market and it is getting fiercely competitive. This competitive market demands the investment procedure to be swifter. That is why the Investment is planning to introduce a new version which would deal with electronic presentation of the documents rather than the traditional system of presenting hard copies of the documents. So, my study is about the electronic presentation for Documentary Investment. goal is to have a clear idea about the operation of investment electronically and at the same time to find out whether this new system is suitable from Bangladesh perspective.
1.1 Objective of the Study:
General objective: To have a clear idea about the electronic presentation for Documentary Investment and to identify whether this new system fits for Bangladesh or not.
Specific Objective:
- To identify the underlying functions and responsibilities of investment division.
- To measure the overall managerial performance as a specialized bank in small and medium industries and disbursement of investment in different sectors.
1.2 Significance of the Study:
The study is very important because:
1) It will be helpful to reveal all the flaws and opportunities for improvement of the Investment.
2) The study will reveal how this presentation of the investment could be made more efficient.
1.3 Methodology:
Descriptive research: The research will be descriptive in nature, and will be used for narration of characteristics, attributes of several aspects of interests. Since prior knowledge about the problem situation is available to the intern, and specific hypothesis is already been formulated by the intern; exploratory research will not be required in completion of the project. Only quantitative research technique will be followed to recommend a final course of action.
Two descriptive research methods – survey method and observation method are available where only the survey method will be followed to gather primary information.
Data Collection Methods
(A) Primary Sources:
(A) Work experience and direct observation.
(B) Face to face conversation of the bankers & the clients.
(B) Secondary Sources:
1) Different circulars issued by the Bangladesh Bank & Social Islami Bank Limited Head Office.
2) Annual Reports of Social Islami Bank Ltd.
3) Credit Risk Management Manual – Industry Best Practices by Bangladesh Bank
4) Credit Risk Grading Manual
5) Credit Risk Management – Bangladesh Institute of Bank Management.
6) Publications, Articles obtained from different newspaper, libraries and from internet.
7) Various files and documents of Proposal and industrial Investment Division of Social Islami Bank limited.
8) Investment policy manual of Social Islami Bank Limited.
1.4 Limitations of the Study:
The main problem faced in preparing the paper was the inadequacy and lack of availability of required data. But there are some limitations for preparing this report. These barriers, which hinder my work, are as follows:
- Difficulty in accessing latest data of internal operations.
- Non-availability of some preceding and latest data.
- Some information was withheld to retain the confidentiality of the bank.
- The placed to this department for only 3 months of time and working like a regular employee hindered the opportunity to put the better effort for the study.
- Due to time constraint the report has been focusing on bankers’ view and perception. There may be some deviation in their view compared to actual position of the bank.
With all of this limitation tried best to make this report as best as possible. So readers are requested to consider these limitations while reading and justifying any part of study.
2.1 AN OVERVIEW OF BANKING SECTOR IN BANGLADESH:
This chapter provides an overview of the banking system in Bangladesh and developments & performance of the banking sector. Bangladesh has a mixed banking system comprising nationalized, private and foreign commercial banks. Bangladesh Bank (BB) has been working as the central bank since the country’s independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. BB is also responsible for planning the government’s monetary policy and implementing it thereby.
2.2 TYPES OF BANK:
| Bank Types | No. of Banks | No. of Branches |
| SCBs | 4 | 3384 |
| DFIs | 5 | 1354 |
| PCBs | 30 | 1776 |
| FCBs | 09 | 48 |
| Total | 52 | 6562 |
| Source: Bangladesh Bank database | ||
The banking sector in Bangladesh consists of four types of scheduled banks namely state owned commercial banks (SCBs), government owned development finance institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs).
At present there are four state-owned commercial banks (SCBs) operating in Bangladesh. The second type-development finance institutions that derive their funds mainly from the government, other financial institutions and supranational organizations. Development banks have taken a variety of specific forms, but most of them are oriented toward specific economic activity or toward a region. There are five development finance institution s (DFIs) in Bangladesh.
The third category, i.e. private banks financed the development of the currently industrialized countries. Frequently they were instrumental in identifying investment possibilities: arranging for the importation of skilled managers, workers and raw materials; and taking initial steps toward assuring markets for output.
The profit motive stipulated financing to enterprises to promising sectors. In this category there are thirty local private commercial banks and nine foreign commercial banks.
2.3 BANKING SECTOR PERFORMANCE, REGULATION AND SUPERVISION:
The major data sources for this study are Bangladesh Bank Annual Report. In this regard banks are categorized broadly into four categories: State-owned commercial banks (SCBs), government owned Development Finance Institutions (DFIs), Private Commercial Banks (PCBs) and Foreign Commercial Banks (FCBs). The time period covered is basically from 2007 to 2008
2.3.1 ASSETS AND DEPOSITS OF BANKING SECTOR IN BANGLADESH:
| Bank Types | 2007 | 2008 | ||||||||||
| Number of Banks | Number of Branches | Total Assets | % of industry assets | Deposits | % of Deposits | Number of Banks | Number of Branches | Total Assets | % of industry assets | Deposits | % of Deposits | |
| SCBs | 4 | 3384 | 786.7 | 32.7 | 654.1 | 35.2 | 4 | 3383 | 917.9 | 33.1 | 699.7 | 32.6 |
| DFIs | 5 | 1354 | 187.2 | 7.8 | 100.2 | 5.4 | 5 | 1359 | 201.7 | 7.3 | 115.6 | 5.4 |
| PCBs | 30 | 1776 | 1147.8 | 47.7 | 955.5 | 51.3 | 30 | 1922 | 1426.6 | 51.4 | 1150.2 | 53.5 |
| FCBs | 09 | 48 | 284.9 | 11.8 | 150.8 | 8.1 | 09 | 53 | 227.7 | 8.2 | 183.4 | 8.5 |
| Total | 48 | 6562 | 2406.7 | 100.0 | 1860.6 | 100.0 | 48 | 6717 | 2773.9 | 100.0 | 2148.9 | 100.0 |
(SOURCE: Bangladesh Bank Database)
In 2008, the state-owned commercial banks (SCBs) held 33.1 percent of the total industry assets as against 32.7 % in 2007. PCBs’ share rose to 51.4 percent in 2008 as against 47.7 percent in 2007. The foreign commercial banks held 8.2 percent of the industry assets in 2008, showing a declining trend by 3.6 percentage point over the previous year. The DFIs’ share of assets was 7.3 percent in 2008 against 7.8 percent in 2007.
Total deposits of the banks in 2008 are increased by 15.5 percent to Taka 2148.9 billion from Taka 1860.6 billion in 2007. The SCBs’ (comprising largest 4 banks) share in deposits decreased from 35.2 % in 2007 to 32.6 % in 2008. On the other hand, PCBs’ deposits in 2008 amounted to Taka 1150.2 billion or 53.5 % of the total industry deposit against Taka 955.5 billion or 51.3 percent in 2007. FCBs’ deposits in 2008 rose by Taka 32.6 billion or 21.6 percent over the previous year. The DFIs’ deposits in 2008 were Taka 115.6 billion against Taka 100.2 billion in 2007 showing an increase of 15.4 percent over the year.
2.3.2 GUIDELINES FOR MANAGING CORE RISKS IN BANKING:
Due to deregulation and globalization of banking business, banks are now exposed to BE diversified and complex nature of risks. As a result, effective management of such risks has been core aspects of establishing good governance in banking business in order to ensure good performance. In recognition of the importance of an effective risk management system, Bangladesh Bank has issued guidelines on Managing Core Risks in Banking in October 2003. The five core risks that have been advised to manage in these guidelines are, Investment Risks, Asset and Liability/Balance Sheet Risks, Foreign Exchange Risks, Internal Control and Compliance Risks and Money Laundering Risks. Banks have been advised to put in place an effective risk management system based on the above guidelines by June 2004. Bangladesh Bank also arranges program was to train the trainers of the banks on each of these risk management manuals. Besides, the progress of implementation of these guidelines is regularly monitored by the Bangladesh Bank.
3. Overview of the Bank:
“Working Together for a Caring Society” by this eism “Social Ivestment Bank Ltd.” was established at 1995. After that, in April, 2009 “Social Investment Bank Ltd.”was changed name by “Social Islami Bank Ltd.”. The bank provides many services for the client. There are three types of sectors. By those sectors bank provide services. The formal corporate sector, this Bank would, among others, offer the most up-to date banking services through opening of various types of deposit and investment accounts, financing trade, providing letters of guarantee, opening letters of credit, collection of bills effecting domestic and international transfer, leasing of equipment and consumer durables, hire purchase and installment sale for capital goods, investment in low-cost housing and management of real estates, participatory investment in various industrial, agricultural , transport, educational and health projects and so on.
In the Non-formal non-corporate sector, it would, among others, involve in cash Waqf Certificate and development and management of WAQF and MOSQUE properties, and Trust funds.
3.1 Mission & Vision:
Our Mission
- High quality financial services the latest technology.
- Fast, Accurate and Satisfactory customer service.
- Balanced & sustainable growth strategy.
- Optimum return on shareholders’ equity.
- Introducing innovative Islamic Banking products.
- Attract and retain high quality human resources.
- Empowering real poor families and create local income opportunities.
- Providing support for social benefit organizations – by way of mobilizing funds and social services.
Our Vision
Social Islami Bank Ltd started its journey with the concept of 21st Century Islamic participatory three sector banking model:
- Formal Sector– Commercial Banking with latest technology;
- Non-Formal Sector – Family Empowerment Micro-Credit & Micro-enterprise program
- Voluntary Sector – Social Capital mobilization through CASH WAQF and others.
Finally, “Reduction of Poverty Level” is our Vision, which is a prime object as stated in Memorendum of Association of the Bank with the commitment “Working Together for a Caring Society”.
3.2 Policy Facilities:
Social Islami Bank Ltd. provides many policy facilities for the clients. Like,
Provisional Rate (Subject to change according to Mudaraba Principles):
| Name of Policy | Profit Rate |
| Mudaraba Savings Deposit | 4.00 |
| Mudaraba Notice Deposit A/C | 3.50 |
| Mudaraba Scheme Deposit | |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
|
9.50 |
| Mudaraba Term Deposit Receipt | |
|
8 |
|
9 |
|
9 |
|
9 |
|
9 |
|
9 |
|
9 |
FORMAL BANKING SECTOR
- Islami Banking
- Bai-Muazzal
- Commercial
Bai-Muajjal is a contract between Buyer and Seller under which the seller sells certain specific goods (permissible under Shariah and Law of the country), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer. This mode is applicable for working capital finance. In conventional Banks, the allow loan in the form of cash credit against hypothecation of goods & collateral security.
- House Hold
Bai-Muajjal is a contract between Buyer and Seller under which the seller sells certain specific goods (permissible under Shariah and Law of the country), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer. This mode is applicable for working capital finance. In conventional Banks, the allow loan in the from of cash credit against hypothecation of goods & collateral security.
- Trust Receipt
Bai-Muajjal is a contract between Buyer and Seller under which the seller sells certain specific goods ( permissible under Shariah and Law of the country ), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer. This mode is applicable for working capital finance. In conventional Banks, the allow loan in the from of cash credit against hypothecation of goods & collateral security.
- HPSM
- Commercial
Hire Purchase (Participatory Ownership) is a Special type of contract which has been developed through practice. Actually it is a synthesis of three contracts:
- Shirkat
- Ijarah and
- Sale
- Shirkatul Melk
Shirkat means partnership. Shirkatul Melk means participation in ownership. When two or more persons supply equity, purchase an asset; own the same jointly, and share the benefit as per agreement and bear the loss in proportion to their respective equity, the contract is called Shirkatul Melk contract.
- Ijarah
The term Ijarah has been derived from the Arabic words Ajar and Ujrat which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of services of an ASSET. Ijarah has been defined as a contract between two parties, the Hiree and Hirer where the Hirer enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Hiree. It is a hire agreement under which a certain asset is hired out by the Hiree to a Hirer against fixed rent or rentals for a specified period.
- Sale
This is a sale contract between a Buyer and a seller under which the ownership of certain goods or asset is transferred by seller to the buyer against agreed upon price paid / to be paid by the buyer.
Thus in Hire Purchase (participatory ownership) mode both the Bank and the client supply equity in equal or unequal proportion for purchase of an asset like land, building, machinery, transport etc. Purchase the asset with that equity money, own the same jointly, share the benefit as per agreement and bear the loss in proportion to their respective equity. The share, part or portion of the asset owned by the Bank is hired out to the client partner for a fixed rent per unit of time for a fixed period. Lastly the Bank sells and transfers the ownership of it’s share / part / portion to the client against payment of price fixed for that part either gradually part by part or in lump sum within the hired period after the expiry of the hire agreement.
- Real Estate
Hire Purchase (Participatory Ownership) is a Special type of contract which has been developed through practice. Actually it is a synthesis of three contracts:
- Shirkat
- Ijarah and
- Sale
- Shirkatul Melk
Shirkat means partnership. Shirkatul Melk means participation in ownership. When two or more persons supply equity, purchase an asset; own the same jointly, and share the benefit as per agreement and bear the loss in proportion to their respective equity, the contract is called Shirkatul Melk contract.
- Ijarah
The term Ijarah has been derived from the Arabic words Ajar and Ujrat which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of services of an ASSET. Ijarah has been defined as a contract between two parties, the Hiree and Hirer where the Hirer enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Hiree. It is a hire agreement under which a certain asset is hired out by the Hiree to a Hirer against fixed rent or rentals for a specified period.
- Sale
This is a sale contract between a Buyer and a seller under which the ownership of certain goods or asset is transferred by seller to the buyer against agreed upon price paid / to be paid by the buyer.
Thus in Hire Purchase (participatory ownership) mode both the Bank and the client supply equity in equal or unequal proportion for purchase of an asset like land, building, machinery, transport etc. Purchase the asset with that equity money, own the same jointly, share the benefit as per agreement and bear the loss in proportion to their respective equity. The share, part or portion of the asset owned by the Bank is hired out to the client partner for a fixed rent per unit of time for a fixed period. Lastly the Bank sells and transfers the ownership of it’s share / part / portion to the client against payment of price fixed for that part either gradually part by part or in lump sum within the hired period after the expiry of the hire agreement.
- Transport
Hire Purchase ( Participatory Ownership) is a Special type of contract which has been developed through practice. Actually it is a synthesis of three contracts:
· Shirkat
· Ijarah and
· Sale
· Shirkatul Melk
Shirkat means partnership. Shirkatul Melk means participation in ownership. When two or more persons supply equity, purchase an asset; own the same jointly, and share the benefit as per agreement and bear the loss in proportion to their respective equity, the contract is called Shirkatul Melk contract.
· Ijarah
The term Ijarah has been derived from the Arabic words Ajar and Ujrat which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of services of an ASSET. Ijarah has been defined as a contract between two parties, the Hiree and Hirer where the Hirer enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Hiree. It is a hire agreement under which a certain asset is hired out by the Hiree to a Hirer against fixed rent or rentals for a specified period.
· Sale
This is a sale contract between a Buyer and a seller under which the ownership of certain goods or asset is transferred by seller to the buyer against agreed upon price paid / to be paid by the buyer.
Thus in Hire Purchase (participatory ownership) mode both the Bank and the client supply equity in equal or unequal proportion for purchase of an asset like land, building, machinery, transport etc. Purchase the asset with that equity money, own the same jointly, share the benefit as per agreement and bear the loss in proportion to their respective equity. The share, part or portion of the asset owned by the Bank is hired out to the client partner for a fixed rent per unit of time for a fixed period. Lastly the Bank sells and transfers the ownership of it’s share / part / portion to the client against payment of price fixed for that part either gradually part by part or in lump sum within the hired period after the expiry of the hire agreement.
- Mudaraba
- Bill of Exchange
In case of Bai-Murabaha Banks procure the goods as per indent of the customer, retain it in its custody and sell the same part by part or at a time to the client who gave indent for the goods. This mode is applicable for working capital finance. In conventional Banks, they allow Loan against pledge of goods against fixed rate of interest.
- Post Import
Bai-Murabaha is a contract between a Buyer and Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and Law of the land to the Buyer at a cost plus agreed profit payable in cash on any fixed future date in lump sum or by installments. The profit marked-up may beBai-Murabaha is a contract between a Buyer and Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and Law of the land to the Buyer at a cost plus agreed profit payable in cash on any fixed future date in lump sum or by installments. The profit marked-up may be fixed in lump-sum or in percentage of the cost price of the goods.
In case of Bai-Murabaha Banks procure the goods as per indent of the customer, retain it in its custody and sell the same part by part or at a time to the client who gave indent for the goods. This mode is applicable for working capital finance. In conventional Banks, they allow Loan against pledge of goods against fixed rate of interest.
- Foreign Exchange Trade
- Export Finance
Foreign Exchange Trade of SIBL is dealt with its 09 AD branches out of which 4 branches are in Dhaka and the remaining 05 are in Chittagong, Khulna, Sylhet, Rajshahi and Bogra. We as a 21st Century Bank, providing our services in foreign trade through import and export finance and also playing significant role in the area of foreign remittance. To facilitate the import obligation of our Bank as well as considering the requirement of foreign currency of our country we encourage potential exporters to do their export business with us. We provide working capital on their requirement. Presently our export finance is extended for RMG and for non-traditional item that is handled by a number of experienced bankers. We offer competitive exchange rate for foreign currency to our valued exporters. In the last 03 years our export business performance is significant.
- Import Finance
We also deal in import business and our import business is extended to commercial importers (traders) for import of various shariah approved items and industrial importers (Users) for import of raw cotton, yarn, clinker, pharmaceutical raw materials, TV parts, Computer parts etc raw materials for their industries.
We also provide post import finance such as MPI (LIM), LTR and HPSM (Lease financing). Our post import finance is also provided for importing of capital machinery.
- Foreign Remittance
We are playing important role in the Foreign Remittance sector also.
We have correspondent relationship with almost all major 122 Banks of 109 countries of the world like Standard Chartered Bank, American Express Bank Limited, HSBC, HBZ Finance, Mashreq Bank PSC, Dresdner Bank AG and with local banks in Pakistan, India, Nepal and Bhutan etc with whom we have advising, reimbursing and add confirming arrangement.
Visitors of our website can download our Foreign Currency Current Account (FCCA) Opening Form from the Download Section and also can take a print of the Form in Legal Size Paper.
- SWIFT
SIBL is the member of SWIFT and we have 09 SWIFT workstations in all of our 09 AD branches. Besides our 24 branches are equipped with online banking. We are trying to keep all the SWIFT workstations under online system. Inward remittances are credited to the beneficiary’s account on the same day of receipt if the beneficiary maintains A/C with them or within next 24 hours on receipt of the same from our overseas correspondents. All correspondences of foreign trade both export and import are communicated through SWIFT. As a result foreign exchange trade become expeditious and instant.
- Deposit Scheme
- Mudaraba Monthly Profit
Social Islami Bank Ltd is an Islamic Bank ruled by Islamic Shariah. The bank is operating in Formal, Non-Formal and Voluntary banking sector for alleviating poverty in the Bangladesh. But to reduce poverty in a country like Bangladesh there is no other alternative but increase internal deposit. Increase in deposit will increase investment and new investment will result in more employment. For this reason SIBL have introduced “Mudaraba Monthly Profit Scheme”.
Under this scheme the depositor will get monthly profit on the deposited amount. The reasons for introducing this scheme are as follows:
a. The scheme provides monthly profit for service holders who may deposit the pension benefit.
b. For those Bangladeshis working abroad willing to deposit once and provide a fixed amount monthly to family and relative residing in Bangladesh.
c. The trust and foundations willing to provide monthly scholarship to students against one time deposit.
For the parents who wants to bear educational expenses of their child against deposit.
The features of this scheme are as follows:
1. Tk. 1, 00, 000/-, 1, 10,000/-, 1, 20,000/- or 1, 25,000/- or any amount multiple can be deposited under this scheme.
2. The duration of the amount should be for Five years.
3. Profit shall be distributed under this scheme as follows:
a. 1,00,000/- Tk. 900 (net)
b. 1,10,000/- Tk. 1000 (net)
c. 1,20,000/- Tk. 1100 (net)
d. 1,25,000/- Tk. 1150 (net)
4. The payable profit will become due after 1 month of deposit. But the amount will be deposited to account in the last week of the month.
5. Generally, a depositor cannot withdraw the amount before 5 years. But, in unavoidable circumstances the depositor can withdraw the amount and in that case
6. The depositor will have to submit the duly filled application form of the scheme.
7. The depositor will have to maintain a Mudaraba Savings account in which the profit of the scheme will be deposited.
8. In case of change of address the depositor must inform the bank as soon as possible.
- If the scheme is closed before 1 year then no profit will be given.
- Hajj Scheme
Hajj is one of the most important bases of Islam. Religious Muslims tends to perform Hajj when they gather financial ability. But they find it difficult to gather the required amount to perform as there is no such systematic way of saving the money. To help our muslim brothers Social Islami Bank Ltd introduced Hajj/Umrah Scheme.
The basic rules of this scheme are:
a. This account shall be called as Hajj/Umrah Savings Scheme.
b. Any Muslim Residing in Bangladesh may open an account under this scheme.
c. This scheme will be accounted under Mudaraba rules. The Bank as Mudarib and the account holder will be treated as Sahib-e-Mal. The account holder will have to enjoy the Profit / Loss of the Banks respective year.
d. The depositor will be provided with a Deposit book and the deposited amount must be written and verified by the Bank’s authorized official. In case of losing the deposit book Tk. 20 has to be deposited for issuing a new one.
e. In case of change of address the bank must have to be notified as soon as possible.
f. The savings of this scheme can be used.
g. Provisional profit will be charged on June and December closing. If the account holder is unable to perform the Hajj/Umrah or any other person does not perform instead of the account holder then the corresponding account will be treated as a Mudaraba Savings account and accordingly profit will be distributed.
h. An introducer must be there to open an account.
The Bank retains the authority to change, modify, rectify or cancel the rules regarding the scheme and the account holder must abide by the decision.
- Mudaraba Millonaire Scheme
People of Bangladesh are the followers of Islam. They are mostly interested to make interest free deposits. Taking these facts into consideration SIBL a joint venture Islamic bank introduced a monthly installment based “Mudaraba Millionaire Scheme”
Rules and regulations of this scheme:
1. Tk. 550/-, Tk. 1050/- or Tk. 2050/- is taken as monthly installment under Mudaraba principles of Islami Shariah.
2. Duration of this scheme will be 15, 20 and 25 yrs. After maturity an estimated amount will become as follows:
| Duration | Monthly Installment | Estimated amount after maturity |
| 15 | 2,050/- | Tk. 10 lac |
| 20 | 1,050/- | Tk. 10 lac |
| 25 | 550/- | Tk. 10 lac |
3. The amount in the above is an estimated amount and may vary at maturity.
4. After starting of operation of this scheme size of installment cannot be changed.
5. Any depositor may open one or more account in the same name in the same branch.
6. In case of the scheme account is closed before maturity then profit will be applied at the rate of Mudaraba Savings Deposit. But if the account is closed before 6 months no profit will be applied.
7. 80% of the amount deposited can be taken as loan but profit rate decided by the bank must have to be paid by the client.
8. If a depositor fails to deposit 4 consecutive installments then the account will be closed and profit will applied as per rate of Mudaraba Savings Rate. Profit for the first 06 (Six) months shall not be applied.
9. The Bank reserves the right to invest the funds received in mudaraba term deposit accounts, in its sole judgment, in any interest-free “Halal” business it deems fit.
10. In case of change of address or telephone number the depositor must inform the bank immediately. The bank will make correspondence with the depositor by postal service and in case of missing or delay in delivery, the bank will not be liable.
- Mudaraba Special Savings (Pension) Scheme
Generally people wants save a portion of their income for economic assurance at old age. For this reason a unique kind of savings scheme has to be introduced so that a portion of income can be deposited regularly for a long time span. This enables a person to get quite a considerable amount after maturity.
Taking the above reasons into account Social Islami Bank Ltd, a joint venture Islamic bank have introduced monthly installment based “Mudaraba Special Savings (Pension) Scheme”.
Under this scheme any person can deposit a fixed amount monthly and after maturity the depositor will get a handsome amount with increased profit. The depositor may encash the total amount at a time or can take as monthly pension until a stipulated time.
Intentions and Goal of the scheme:
1. To create awareness to deposit among average income people.
2. To create a chance for attractive deposit scheme.
3. To create an interest free investment.
Eligibility:
1. Any Bangladeshi person aged above 18 yrs and having sound mental condition can may open this scheme.
2. To open this account there must be a signature of a valued introducer.
3. Parents or legal guardians can open this scheme in the name of their underaged children.
Rate of installment: Tk. 100/-, Tk. 200/-, Tk. 300/-, Tk. 400/-, Tk. 500/-, Tk. 1000/-
Profit & Weight age:
The depositors will get a percentage from the shariah-based investments made by the bank.
| Duration of the scheme | Weight age |
| 5 yrs | 1.05 |
| 10 yrs | 1.08 |
The maturity amount may be more or less than the estimated amount. In case of amount withdrawn before 6 months no profit will be applied. In case of amount withdrawn before 5 yrs but after 6 months profit will be applied as Mudaraba Savings Rate.
In case of 10 years scheme if the amount withdrawn after 5 yrs then profit will be applied as per MSDPS rate for 5 years and for the rest period profit will be applied as Mudaraba Savings Rate.
After the end of scheme period the depositor may take the matured amount with profit by fixing a monthly take home amount.After maturity estimated profit will be applied as follows:
| Monthly Installment | Estimated amount after maturity | |
| 5 years | 10 years | |
| 100/- | 8000/- | 22500/- |
| 200/- | 16000/- | 45000/- |
| 300/- | 24000/- | 67000/- |
| 400/- | 32000/- | 90000/- |
| 500/- | 40000/- | 112500/- |
| 1000/- | 80000/- | 2,25,000/- |
Nominee selection:
The depositor may nominate single or multiple person of hire account. In case of multiple people being nominee then percentage of each nominee must be mentioned. In case death of the nominee the depositor may change the nominee by providing notice to the bank.
Automatic close of the account:
If the depositor fails to deposit 3 (three) installments consecutively before completion of 5 years of the account then the account will be closed and profit will be applied as per Mudaraba Savings Deposit rate.
Others:
1. The depositor must deposit the installment by cash or cheque within 15th day of each month. In case of 15th day being govt. holiday then the amount can be deposited in the next working day.
2. In case of clearing cheque is not collected within 15th day then the depositor will be treated as defaulter for that month.
3. The amount and duration of the scheme will not be changed.
4. The account can be transferred from one branch to another by a written application mentioning the actual reason of transferring.
5. The depositor can close the account any time with a service charge of Tk. 25.00.
6. VAT, TAX as applicable by Govt. must be borne by the depositor.
7. The bank reserves the right to add or alter any or all the rules governing MSDPS and such altered or additional rules shall be immediately thereafter be deemed to be binding on all depositors.
o Mudaraba Education Savings Scheme
Education expenditure especially for higher studies is increasing day by day. In many cases children loses the chance of education as their guardians become unable to adjust with the expenditure. But if proper financial planning is adopted earlier then it is easier for the parents to bear the expenses.
Housing has become one of the most fundamental needs of human civilization. But in this early 20th century most of the people of Bangladesh are lacking to fulfill this basic need. As a follower of Islamic Shariah, Social Islami Bank Ltd focuses forward to help people to fulfill this basic need.
Main features of this scheme: imam
a. The applicant has to fill the application form duly.
b. An amount of Tk. 500/-, 1000/-, 1500/-, 2000/- or any amount multiple can be deposited under this scheme.
c. The depositor will enjoy earnings from investments under Islami Shariah based Mudaraba rules.
d. As per rules of Islami banking the actual amount may vary from the estimated amount.
e. In case of failing of 3 (Three) consecutive installments the account will be closed. In such cases profit will be given as per savings account rate, but no profit will be given if the account is closed within 6(Six) months.
f. The account holder may choose any installment size on account opening, which cannot be changed later.
g. Installment must be deposited within first 15 day of the month. Any amount deposited as advance installment is always welcome.
h. The scheme is 15 years long and if the depositor intends to withdraw the amount then profit will be given as per savings rate.
Income tax imposed on the earnings from the deposited amount should be deducted from depositors account.
· Deposit Account
o Al Wadiah Current Deposit
1. AL-Wadiah Current Deposit A/Cs is opened on proper introduction with minimum initial deposit fixed by the Bank.
2. AL-Wadiah Deposit is accepted on AL-Wadiah principles which mean al Amanah with permission to use. According to this principle Bank can use the fund of the account along with other funds as per Shariah at bank’s own risk. Account holder(s) will not share any profit/loss.
3. The Law and regulation of Bangladesh, usual customs and procedures common to banks in Bangladesh including Islamic Banking Principles shall apply to and govern the conduct of account opened with the Bank.
4. Withdrawal can be made only through cheques issued by the bank.
5. The A/c. holder(s) shall preserve the cheque book with utmost care so that it might not be lost or stolen. For any misappropriation taken place through any such stolen or lost cheque, the Bank shall not be held responsible.
6. The depositor shall take back the pay-in-slip after deposit of any money or cheques etc. clearly specifying the number and title of account in the slip. All cheques, DD/PO etc shall be crossed before deposit.
7. Bankers shall note “Stop payment” of the account holder with due care. Payment of any such cheque, the Bank shall not be held responsible.
8. Any change in the address of the depositor should be immediately communicated to the bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters, remittances etc sent through Post office and other agents.
9. Bank makes entry in the account with due care. However, for any wrong entry, the Bank reserves the right for adjustment/correction and no responsibility can be accepted by the bank for any loss caused by the caused by the account holder due to such inadvertent/wrong entry passed by the Banker.
- Mudaraba Savings Deposit
To open a Mudaraba Savings Deposit account in our Bank the following rules and regulations are applied:
· Mudaraba i.e. Deposit of one party and on the basis of operation by another party this deposit is taken.
· By providing Introducer of the account as required by the bank and by depositing a minimum amount any depositor or multiple depositors can open single or joint account. Any educational institute, Club, Association or Social institutes can open this account.
· The bank may merge amount collected through this deposit and may invest in any shariah allowed investments.
· After determining the annual profit/loss the depositor will get his part of profit.
· In case of balance declining below bank stipulated margin in any month profit shall not be provided for that month.
· Any amount can be deposited in any working hour but for applying profit the lowest amount from 6th day till the last day of the month will be taken as the deposit of that month.
· Amount must be withdrawn only by bank issued instruments like cheques.
· Amount can be withdrawn twice a week but highest 4 times a month. One fourth of the deposited amount or Tk. 2000/-, the lowest can be withdrawn without notice. If any amount exceeding the above is withdrawn without providing 07 days prior notice then no profit will be applied for that month.
· If an account is closed before the declaration of current years profit rate then the depositor will have to take profit as per previous years declared profit rate.
· The Bank has the right to deny opening any account or can close down any existing with showing any reason.
· The bank operates the client accounts with utmost attention but still if any miscalculation occurs the bank holds the right to make adjustments and rectify the problems. But in this situation if any miscreants occur which is caused by the client the bank will not be hold liable for that.
o Mudaraba Term Deposit
· Mudaraba Term Deposits are accepted by the bank with a sum of Tk. 5000 or above (multiple of 1000) from individuals (single and joint), firms (propietorship/partnership), limited companies, autonomous bodies, charitable institutions, association, educational institution, local bodies, trusts, etc, against issuance of non transferable receipts in acknowledgement of MTD account may be opened in the names of minors jointly with their guardians, for example :
Received from Mr. X Guardian of Mister/Miss…………………. (Minor)
· The mudaraba term deposits are accepted for periods of 12, 24, 36 months. Weight age on the rate of return is given to deposits of longer maturity.
· The Bank reserves the right to invest the funds received in mudaraba term deposit accounts, in its sole judgment, in any interest-free “Halal” business it deems fit.
· Mudaraba term deposit account holder will share the profit of investment with Social Islami Bank Ltd, at the rate declared by the bank from time to time. Any loss which cannot be covered by the investment loss offsetting reserve will be adjusted from Mudaraba fund and in that case the bank shall not take any remuneration for the service rendered in managing the fund.
· The profit earned on Mudaraba Term Deposit account will be credited as determined by the bank as its sole direction on the basis of its net working results at the end of the year, within a reasonable time from the dae of the close of the books of accounts of the bank. The banks decision in this respect will be final & binding on the Mudaraba Term depositors. If the Mudaraba Term Deposit account is closed before declaration of profit of current year, the depositor shall accept profit at the rate declared in the preceding year. In that case, both the bank & the depositor will relinquish their claim on difference amount of profit, which may accrue at the close of the year.
· The account holder is not allowed to withdraw the amount before maturity date. But on obtaining the Bank’s prior consent the depositor(s) may withdraw the deposit before maturity without any profit i.e. no profit no loss basis.
· MTD account holder may withdraw the profit amount annually if he so desires on condition the final adjustment. If needed, will be made at the end of the year. MTD account holder will give an undertaking to that effect.
· If the profit amount is not withdrawn it will automatically be added to the principal amount annually and the entire amount will earn profit/loss.
· MTDR is not transferable instrument & as such it cannot be endorsed in favor of others.
· The MTDR should be preserved properly. In case of loss, the account holder should notify the issuing branch immediately by quickest possible means so that the bank can take care of.
· Matured deposit if not encashed within one month of maturity, the deposit shall automatically be renewed for the period it kept before.
· Any change in the address of the depositor should be immediately communicated to the bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters, remittances etc sent through Post office and other agents.
· The bank retains the right of refusing to accept any deposit from any person in MTD account without assigning any reason.
· The bank reserves the right to add or alter any or all the rules governing this scheme and such altered or additional rules shall be immediately thereafter be deemed to be binding on all depositors.
NON FORMAL BANKING SECTOR
· Micro Investment Scheme
Family Empowerment Micro-Credit Program:
Family Empowerment Micro-Credit Program is designed to develop the Socio-economic condition of the grass-root people committed to build a caring society by reducing poverty through income generation for small and low-income families, under which financing is provided without collateral.
Family empowerment Micro-Credit Program is a group-based lending. Investment is provided for maximum three years @ 10% return per annum at flat rate where maximum ceiling of Investment is Tk.25,000/=.
· Micro Enterprise Investment Scheme
1. Family Empowerment Micro-Enterprise Program:
Family Empowerment Micro-Enterprise program is introduced to enhance the Socio-economic condition of the potential entrepreneur, small and medium Businessmen, successful Micro-Credit graduates through income generating activities. Ceiling of investment is from Tk.50,000/= to Tk.5,00,000/= @ 10% return per annum at flat rate for maximum three years. Investment upto Tk.50, 000/= is provided without collateral. In case of investment of above Tk.50, 000/= minimum collateral security is required.
2. Family Empowerment Micro-Enterprise Program (SMES):
Considering the potentiality of SMEs sector, SIBL has launched Family Empowerment Micro-enterprise program (SMEs) to fulfill the diversified need of SMEs clients. Investment ceiling under this program is from Tk.2, 50,000/= to Tk.5, 00,000/=@ 14% return per annum for one year on revolving basis.
3. Small, Medium and Micro-Enterprise Development Program jointly with JOBS project, USAID:
On the basis of Memorandum of Understanding (MoU) signed in 2001 between Social Islami Bank Ltd. and Job Opportunity and Business Support (JOBS), collaborative efforts are being made to create easy access to business capital for the Small Medium and Micro-Enterprises (SMEs) through enhancing the capacity and performance of the entrepreneurs with available technical assistance from JOBS to be financed through Social Islami Bank Ltd. (SIBL) under Family Empowerment Micro-Credit and Micro-Enterprise Program.
· Joint Scheme
1. Small, Medium and Micro-Enterprise Development Program jointly with JOBS project, USAID:
On the basis of Memorandum of Understanding (MoU) signed in 2001 between Social Investment Bank Ltd. and Job Opportunity and Business Support (JOBS), collaborative efforts are being made to create easy access to business capital for the Small Medium and Micro-Enterprises (SMEs) through enhancing the capacity and performance of the entrepreneurs with available technical assistance from JOBS to be financed through Social Investment Bank Ltd. (SIBL) under Family Empowerment Micro-Credit and Micro-Enterprise Program.
· Development & Rehabilitation Scheme
1. Displaced Garments Child Workers Students Stipend Disbursement Program Aiming To Eliminate Child Labor From The Garments Sector Implemented Jointly With The International Labor Organization (ILO) : On the basis of the agreements signed between SIBL & ILO during 1996 and 1998, SIBL has successfully completed the stipend disbursement program among the displaced garments child worker’s to eliminate child labour in Bangladesh within the frame work of international program on the elimination of child labour.
· ILO, UNICEF
1. Micro-Credit Program to the Garments Child Worker (parents)/adult family member jointly with ILO under project finance from govt. of Italy & Norway.
In view of the SIBL’s satisfactory performance of Stipend Disbursement Program, two agreement on “Family Empowerment Micro-Credit Program” have been signed between SIBL and ILO under project BGD/98/01/PO50/ITA and BGD/99/02/PO70/NORAD on 12.09.2000 and 19.11.2000 respectively for implementing the Program among the parents of the displaced garments child worker for self employment to their parents. It was an action program, against the child labour in garments sector. The recovery under these programs is continuing.
2. Financial Assistance Among The 100 Parents/Guardian Of Former Garments Working Children Under Project UNICEF To Continue Their Education.
A memorandum of Understanding (MoU) had been signed between the UNICEF & SIBL on December 15, 2002 for the project entitled “Family Empowerment Program among the 100 parent/guardian of former garments working children”.
The purpose of the project is to develop a regular source of income for the families of the former garments child workers so that their parents could provide monthly school fees to continue their children’ education. By the financial support from unicef, sibl provided assistance of maximum tk. 10,000/- to-individual member. Recovery under the program is continuing.
3. Family Empowerment Micro-Credit Program for self-employment of HTR (Hard to Reach) graduates to implement Micro-Credit program in connection with