Social Investment Bank Limited: An Analysis of the Overall Performance and Activities

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Social Investment Bank Limited: An Analysis of the Overall Performance and Activities

Background, Objectives, Methodology, Limitation–


It has long been recognized that credit is an important tool in increasing productivity and thereby increasing the income of borrower. Adequate flow of credit can remove the financial constrains of the borrower. There has been phenomenal growth in the flow of credit after liberation due to governments desire to increase productivity in the country. All the credit institutions were geared up thorough a dynamic credit policy to disburse both short-term credit and long-term credit. As a result the flow of annual credit has increased significantly. As the volume of loan default increased substantially over the years, the percentage of loan default increased gradually. Although loan is one of the major assets of the banking sector, it becomes a liability when the loan is not repaid. Since the late 70s the whole banking sector of Bangladesh is being haunted by the specter of problem loans.

A great bulk of problem loans and their ever deepening thrust on Bank credit has brought a gloomy situation in the cost of fund. The impact of such loan in banking arena hinders the flourishing of banking business. Default culture has started in Bangladesh mainly after the nationalization o banks. However, it was enhanced by the availability of hue amount of credit in the name of developing private and industrial sector. From a statistic of Government it is seen that investment Board did not find may existence of 4422 industrial units amongst he sanctioned 7531 units during the years 1985 to 1990. There happened interesting events in the name of industrial credit. Valuation certificates were managed hundred times over the collateral security. Industry set-up was shown as sick industry to get additional loan and relieve from interest.

Despite various Acts, Ordinances as well as various circulars issued by Bangladesh Bank from time to time and special instructions by individual Banks, the striving for realization of such credits proved discouraging.

The Bank of Bangladesh Small industries and commerce (SOCIAL INVESTMENT BANK LIMITED) Bank Limited, which was established to promote the development of Small-scale industries in Bangladesh, is also prone to such disappointing features of problem loans.

Background of the Study:

This academic course of the study has a great value as it has practical application in the real life. Only a lot of theoretical knowledge will be little important unless it is applicable in the practical life . so, “The Overall Performance and Activities” of Social Investment Bank Limited (SIBL). Is my report and I worked in Social Investment Bank Limited.

Origin of the Report:

The main objective of the study is to gain practical knowledge apart from our institutional teaching and also to acquire knowledge about the practice of banking business. Also the prime objective of the study is to know the existing banking business in Social Investment Bank Limited.

The other objectives bellow:

· To have an exposure on the banking environment of Bangladesh.

· To study pre-reform, reform and present situation in the banking and Financial Sector of Bangladesh.

· To gain experience on different functions of different department of the bank.

· To identify the business prospects and performance of the bank through various department.

Assigned by the guide teacher, this report is prepared as partial fulfillment of MBA requirement.

Objective of the Report:

The principal intent of this report is to examine Credit Policy of SOCIAL INVESTMENT BANK LIMITED Bank Ltd. In particular the objectives are as follows:

1. To have a glace at the commercial banking system in Bangladesh.

2. To examine the present banking system in Bangladesh.

3. To get acquainted with the loan structure, size, profile of sector wise outstanding position of loans and system of loan classification of SOCIAL INVESTMENT BANK LIMITED.

4. To know the deposit behavior of NCBs, FCBs, PCBs and SOCIAL INVESTMENT BANK LIMITED bank and to cross-examine any structural changes regarding deposit behavior.

5. To examine the credit operations by our commercial banking system.

6. To explain the procedures, systems of credit management and appraisal of SOCIAL INVESTMENT BANK LIMITED Bank.

7. To find out the nature and size of problem loans in SOCIAL INVESTMENT BANK LIMITED Bank.

8. To find out the causes of problem loans.

9. To analyze the effects of problem loan on income of SOCIAL INVESTMENT BANK LIMITED bank Ltd.

10. To evaluate the various loans programs of SOCIAL INVESTMENT BANK LIMITED bank which includes Industrial, Trade and Commerce, Transport etc.

11. To inspect the recovery of loans by SOCIAL INVESTMENT BANK LIMITED Bank.

12. To examine whether the attributes of gook performance are observed in SOCIAL INVESTMENT BANK LIMITED bank.


The report concerns about the Overall banking policy in SOCIAL INVESTMENT BANK LIMITED Bank. The study is made primarily only on the basis of the observation of SOCIAL INVESTMENT BANK LIMITED operations in its Principal Branch. This bank deals with all types of general banking operations, foreign exchange operations, investment operations and credit operations under the overall control of Bangladesh Bank and thus follows the regulation set by the Bangladesh Bank.


Methodology includes direct observation, face-to-face discussion with employees of different department, study of files, circular, etc and also practical work.

In preparing this report both Primary Data and Secondary Data sources of information have been used.

For collecting Primary Data:

v I had to ask the respective officers. Others are like direct communication with the clients, exposure on different desk of the bank.

v The primary source of data and information was the interviews with managers and officials of the Head Office and Principal Branch of Social Investment Bank Limited.

v Necessary data were segregated from the source material and collected data were complied and processed to prepare the report.

The secondary sources are:

· Annual reports and performance reports of the Bank

· Various files and documents of Credit and industrial Credit Division of SOCIAL INVESTMENT BANK LIMITED .

· Articles related to problem loans in different journals and magazines.

· Study of files and documents of some default borrowers of the main Branch of SOCIAL INVESTMENT BANK LIMITED.

· Some articles.

· Different publication of Bangladesh.

Data sources

Primary sources of the data collections were direct observations, face-to-face interview with both the customers and the staff, obtaining responses from the customers through questionnaire. A model of the questionnaire is including in the appendix. Secondary data is collected from Annual Report, Booklets and credit manual of SOCIAL INVESTMENT BANK LIMITED Bank Limited and a report titled “Credit Policy” in study Bangladesh Small Industries and Commerce Bank Ltd.


The present study is not free from limitations. Those limitations are described in bellow:

· Lack of secondary information:

The study could have been more representative if the banks could provide all the information is not available.

· Limitation of scope:

This type of limitation was faced when collecting information about the study. Every organization has their own secrecy that is not revealed to others. While collecting data i.e. Interviewing the employee, they did not disclosed much information for the sake of the confidentially of the organization.

· Limitation of time:

The area of banking operation is very large. I had been working in this bank about three months. This time is not enough to understand all the banking functions. Besides the employees are very much busy for tremendous workload, so they could not able to extend their cooperation properly.

–Organizational Structure of SIBL–


Social Investment Bank Limited is a joint venture Shariah based bank, which became operational on the 22nd November 1995. As a corporate objective, SIBL has defined its operation in three different sectors – formal, non-formal and voluntary. While formal sector deals with general commercial activities as a scheduled bank, non-formal sector aims at ‘Empowering Family’ by creating investment opportunities for micro and SME clients. Voluntary sector offers Cash Waqf Certificate Scheme-an innovative financial product towards welfare of the mankind.

SIBL is operating three-sector Banking such as Formal, Non-formal and Voluntary sector. SIBL is beginning a new era of Islamic Banking having social, ethical and moral dimension in each of its activities ranging from credit to construction.

SIBL’s Vision

Social Investment Bank Limited started its journey with the concept of 21st Century Islamic participatory three sector banking model. Those are:

· Formal sector-commercial banking with latest technology;

· Non-Formal Sector-Family Empowerment Micro-Credit & Micro-Enterprise Programme and

· Voluntary Sector-Social Capital Mobilisation through Cash Waqf and others. ‘Reduction of Poverty Level’ is our vision, which is a prime object as stated in Memorandum of Association of the Bank with the commitment— ‘Working Together for a Caring Society.

SIBL’s Mission:

· High quality financial services with 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 resource.

§ Empowering real poor families and create local income opportunities.

§ Providing support for social benefit Organizations-by way of Mobilizations of funds and social services.


Managing Director (MD)

Deputy Managing Director (DMP)

Senior Executive Vice President (SEVP)

Executive Vive President (EVP)

Senior Vice President (SVP)

Vice President (VP)

Senior Assistant Vice President (SAVP)

Assistant Vice President (AVP)

First Assistant Vice President (FAVP)

Senior Executive Officer (SEO)

Executive Officer (EO)

Principal Officer (PO)

Senior Officer (SO)

Management Trainee Officer (MTO)

Junior Officer (JO)

SIBL no more a “Problem Bank”

Social Investment Bank Ltd. (SIBL) has come out of problem bank list on November 05, Bangladesh Bank (BB) has informed that SIBL has earned remarkable progress in overall management and financial indexes. BB put SIBL in the problem bank list in October 2005 and asked SIBL to company with DOBBS (Directives Of Bangladesh Bank). SIBL Management with cooperation from all concerned has been successful to get desired progress in all the indexes of DOBBs.

A great change has occurred in the financial base of the bank. The capital of the bank as on September 2007 is Tk. 180.64 crore and 100% provision against debt has been preserved.

The bank has preserved provision of Tk. 40.24 crore against required 38.24 crore. Gross classified loan is 3.68 percent and net classified loan is 0.48 present. Thus the quality of assets of the bank has been improved significantly.

The adjusted capital shortfall of SIBL during its being listed as problem bank in 2005 was Tk. 64.71 crore and classified loan was 161.00 crore or 11.28 percent.

Bank’s Chairman Abdul Awal Patwary has expressed hope that the management of the bank would continue their efforts to develop overall business in the days to come.

Managing Director K M Ashaduzzaman stated that because of release from problem bank list clients’ confidence in the bank would increase and as such, in near future tremendous achievement would be possible in all business aspects.


Social Investment Bank has efficient and experienced human resources for rendering better services to its clients along with modern technology.

Islami Shariah based banking activities of this bank are as follows:

Formal Sector

A. Deposit

Al-Wadiah Current: Deposit Account

Mudaraba Term Deposit Account

Mudaraba Notice Deposit Account

Foreign Currency Account

Cash-Waqf Deposit Account

Different Schemes Account

i) Mudaraba Monthly Profit Deposit Account.

ii) Mudaraba Hajj/Umrah Savings Account.

iii) Mudaraba Education Savings Deposit Account.

iv) Mudaraba Special Savings (Pension) Scheme Account.

v) Mudaraba Millionaire Scheme Account.

vi) Mudaraba Monthly Savings Based Term Deposit Account.

vii) Mudaraba Lakhopoti Deposit Scheme Account.

viii) Mudaraba Double Benefit Deposit Scheme Account.

ix) Mudaraba Foreign Currency Term Deposit Scheme Account.

B. Investment

Mudaraba- Trust Finance Partnership

Musharaka- Participation Financing/Equity Financing

Murabaha- Cost Plus Sale

Bai-Muajjal- Sale under deferred payment

Bai-Salam- Forward Purchase


The bank leases out machinery, transports, houses, ships etc. for an agreed period of time, the company being the legal owner and the lessee having the right to use the property for the duration of the contract.

Direct Investment-

This bank directly invests capital on medium and long-term basis in industry, agriculture, trade, transport, immovable property and for construction of house etc.

Hire Purchase

In this system of business the bank invests for purchasing durable assists like machinery, equipment, transport, land and building along with the client with the stipulation that the client shall pay off the principal among with rent (at the agreed rate) in installment.

C. Foreign Exchange

To purchase and sell foreign currencies and carry on business of import through opening of L/C.

D. Remittance

The bank remits client’s money both at home and abroad, complete alt formalities of remittance in respect of Bangladeshis living abroad and other customers.

E. Special Banking Services

In addition to sale and purchase of foreign currencies the bank issues guarantees, accepts certificates and shares, accepts articles & valuable documents, for safe custody locker service, discharges responsibility as investment trustee, acts as clients’ agents for recovery of clients’ demand and carries on transactions on their behalf within the stipulated period, works as correspondent of local and foreign banks and other financial institutions, acts as banker to the issue on behalf of the companies, provides consultancy service to the customers and all other banking services.

F. Information Technology Services:

As regard information technology, SIBL has uploaded its website which gives easy access to the world of communication technology.

Non-Formal Sector

SIBL has been successfully operating Family Empowerment Micro-Credit & Micro-Enterprise programme under non-formal banking sector since the inception of the bank in 1995. Meanwhile, it has been able to create job opportunities among significant numbers of micro-credit & micro-enterprise borrowers under SMEs financing, as we define Micro-credit & Micro-enterprise programme as small products of SMEs financing. Many of those borrowers have been able to establish themselves as successful entrepreneurs and to graduate from micro-credit to micro-enterprise programme. SIBL has been implementing Micro-credit Programme with the support from ILO to eliminate child labour from garment sector in Bangladesh. SIBL and UNICEF have been jointly implementing Micro-credit Programme to extend credit facilities among the parents/guardians of the former garment child workers.

SIBL & JOBS projects, USA1D in a collaborative effort are creating easy access to business capital for the small & medium enterprises (SMEs), which is an emerging sector in the context of economy of Bangladesh. At SIBL, there is a provision for micro-credit borrowers to graduate into Micro-Enterprise Programme and successful micro-enterprise graduates have the opportunity to get investment from the formal banking sector. SIBL, as part of its social commitment, keeps on patronising the SMEs clients under the coverage of Family Empowerment Micro-credit & Micro-enterprise Programme to fulfill their diversified needs.

The brief description of the programmed already been implemented and are being implemented through the Non-formal & Voluntary Banking Sector is given below:

1. Family Empowerment Micro-Credit Programme

2. Family Empowerment Micro-Enterprise Programme

3. Small and Medium Enterprises (SMEs) Programme

4. Displaced garments child worker stipend disbursement programmed jointly with ILO.

5. Micro-Credit Programme to the Garments, child worker adult family member (parents) jointly with ILO under project finance from governments of Italy and Norway.

6. Access to capital & strengthening small medium and Micro-Enterprise Development Programme jointly with JOBS project, USAID.

7. Financial assistance among the 100 parents/guardians of former garments working children under Project UNICEF to continue their education.

8. Family Empowerment Micro-Enterprise Programme among parents/legal guardians of HTR (Hard to Reach) graduates to support their self-employment.

Islamic Voluntary Sector

In the voluntary sector SIBL has also introduced Cash Waqf Certificate, a new product for the first time in the history of banking.

Cash Waqf

Waqf is an Arabic word, the plural of which is Awqaf. It is meant for permanent donation/ endowment of fixed assets made by the effluent and rich people to be used for the welfare of the mankind for obtaining the spiritual benefit and satisfaction/blessing of Almighty Allah. The waqf properties are converted into income generating units and the income so derived is utilised as per instruction of the Waqif (the persons who made the Waqf) or on the basis of Islamic Shariah. Many of our ancestors made waqf of their valuable properties for the welfare of the mankind by establishing mosque, madrasha, eidgah, orphanage, graveyard etc. for spiritual attainment.

The term Cash Waqf may appear to be new to us. Waqf in the form of cash is called Cash Waqf. Cash Waqf provides a unique opportunity for making investment in different religious, educational and social services. Savings made from earning by the well-off and the rich people of the society is utilised in an organised manner in Cash Waqf. Income earned from such funds will be spent for different purposes like the purposes of the Waqf properties. The person who made waqf is called Waqif and to whom (persons or institutions) the waqf is made is called beneficiary.

The purpose of making Cash Waqf is welfare of mankind and society, which is considered as Hakkul Ebad, which paves the way for eternal peace & happiness. SIBL has brought this opportunity by introducing Cash Waqf Scheme for the first time in the history of banking.

The bank provides the following benefits for Cash Waqf Scheme:

1. Empowering Multigenerational Family Heritage.

2. Developing social capital market under Voluntary Banking Sector.

3. Commemorating self, alive or deceased parents, children and ancestors and thus obtaining social actualisation and spiritual attainment.

4. Providing opportunity for doing welfare to the mankind.

5. Helping in building a caring society.

By opening a Cash Waqf Deposit A/C someone can get an opportunity to do welfare to the mankind through Sadak-e-Jariah. Charity is highly esteemed in Islam. So SIBL urges to all religious & effluent persons of the society to come forward to mobilise Cash Waqf Deposit so that the profit may be utilised for the well being of mankind. Lastly, as a scheduled bank, SIBL guarantees the proper management of Cash Waqf Fund & ensures proper distribution of its profit.

* The amount in Cash Waqf Account is a perpetual deposit (never be withdrawn)

To the best of our knowledge, SIBL is the only commercial bank in the country, which operates on the basis of integrated three-sector model: Formal, Non-formal and Voluntary sectors of the economy. This is the only bank in the country, which starts with the very phrase, ‘Targeting poverty’, while stating its objects in Memorandum of Association for achieving a goal of participatory economy for a caring society.

May Almighty Allah allow us to work together for turning Bangladesh into a model caring society.

Profit Rate (%)
* Provisional Rate (Subject to change according to Mudaraba Principles).
Mudaraba Term Deposit Receipts


01 Month 7.00


03 Months 11.25


06 Months 11.50


12 Months or above 11.75
Mudaraba Savings Deposit 6.00
Mudaraba Notice Deposit A/C 5.50
Mudaraba Scheme Deposit


Cash Waqf 12.00


Mudaraba Hajj Savings Deposit 12.00


Mudaraba Monthly Savings Scheme 12.00


Mudaraba Bashsthan Savings Scheme 12.00


Mudaraba Special Deposit Pension Scheme (5 Years) 12.00


Mudaraba Monthly Profit Deposit Scheme 12.00


Mudaraba Millionaire Savings Scheme 12.00


Mudaraba Education Deposit Scheme 12.00


Mudaraba Lakhopati Deposit Scheme 12.00


Mudaraba Special Deposit Pension Scheme (10 Years) 12.00


Mudaraba Double Benefit Deposit Scheme 12.25


Mudaraba Marriage Savings Scheme 12.00


Mudaraba Mohorana Savings A/C (5 Years) 12.00


Mudaraba Mohorana Savings A/C (10 Years) 12.00


City Name

Area Branch
Motijheel Foreign Exchange Branch
Principal Branch
Gulshan Gulshan Branch
Panthapath Panthapath Branch
Dhanmondi Dhanmondi Branch
Uttara Uttara Branch
Sher-E-Bangla Nagar IDB Bhaban Branch
Nawabpur Nawabpur Road Branch
Babu Bazar Babu Bazar Branch
Moulvi Bazar Moulvi Bazar Branch
Mirpur Mirpur Branch
Keranigonj asnabad Branch

Bottom of Form 1

Chittagong Top of Form 1

Area Branch
Agrabad Agrabad
Khatunganj Khatunganj
Halishahar Halishahar
Jubilee Road Jubilee Road Branch

Bottom of Form 1


Area Branch
Khulna Khulna Branch
Bottom of Form 1



Area Branch
Ambarkhana Sylhet Branch

Bottom of Form 1


Area Branch
Rajshahi Rajshahi Branch

Bottom of Form 1

BograTop of Form 1

Area Branch
Bogra Bogra Branch

Bottom of Form 1

SirajgonjTop of Form 1

Area Branch
Sirajgonj Sirajgonj Branch
Chandaikona Chandaikona Branch

Bottom of Form 1


Information & Communication Technology Division
Financial Administration Division
International Division
General Services Division
Managing Director’s Secretariat
Bisiness Development & Marketing Division
Audit & Inspection Division
Chairman’s Secretariat
Share Division
Board Secretariat
Human Resources Division
Shariah Board Secretariat
SIBL Training Institute
Non Formal & Voluntary Banking Division
Law & Recovery Division
Board Audit Cell
MIS, Planning & Research Division
Internal Control & Compliance Division
Investment Risk Management Division

General Banking Sections, Types of Accounts, Products

General Banking

Financial institution/ intermediary that mediates or stands between ultimate borrowers and ultimate lenders is knows as banking financial institution. Banks perform this function in two ways- taking deposits from various areas in different forms and lending that accumulated amount of money to the potential investors in other different forms.

General Banking is the starting point of all the banking operating. General Banking department aids in taking deposits and simultaneously provides some ancillaries services. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service form Bank.

On the other hand, there are some customers with who bank are doing its business frequently. It is the department, which provides day-to-day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc. since bank in confined to provide the service everyday general banking is also known as retail banking.

General Banking consists of the many sections in the branch. These are:

  • Customer Service.
  • Account Opening/Closing.
  • Remittance
    • Payment Order Issue
    • Demand Draft Issue/Collection
    • T.T. Issue/Collection
    • Endorsements
    • IBC/OBC Collection.

· Deposit Department.

· Locker Service.

· Account’s Department.

· Clearing.

· Transfer.

· Cash.

Customer Services of Social Investment Bank LIMITED:

Professional merit and Competency, Flexibility, Determination and Dedication are the core resources that SIBL consider to be of paramount importance for building a client oriented modern banking. Customer satisfaction is SIBL foremost professional undertaking. Therefore, a satisfied client is SIBL precious product and they consider them SIBL ambassador in the market.

Customer Service In Charge:

Mr. Kazi Imamul Haque (Senior Officer) who guide me as a friend.

Account Opening of SIBL:

Under this department, SIBL officer opens different types of account on the request of clients. The procedure of opening account is given bellow:

Types of Accounts:

General Products are:

 Current Deposit:

1. Interest Rate 0.00%

2. Individual Account

3. Joint Account

4. Proprietor Ship Account

5.Limited Company Account

 Savings Deposits:

1. Interest Rate 6.25%

2. Individual Account

3. Joint Account

4. Proprietor Ship Account

5. Limited Company Account

 Short Term Deposits:

1. Interest Rate 6.00%

2. Individual Account

3. Joint Account

4. Proprietor Ship Account

5. Limited Company Account

 Fixed Deposits:

Fixed deposit is one, which is repayable after the expiry of a predetermined period fixed by him. The period varies form 1 month to 12 months. These deposits are not repayable on demand but they are withdrawable subject to a period of notice. Hence, it is a popularly known as ‘Time Deposit’ or ‘Time Liabilities”. Normally the money on a fixed deposit is not repayable before the expiry of a fixed period.

Before opening a Fixed Deposit Account a customer has to fill up an application form which contains the followings:

? Amount in figures

? Beneficiary’s name and address

? Period

? Rate of interest

? Date of issue

? Date of maturity

? Instructions:

– To be renewed automatically with interest for the next period.

– Not to be renewed for next period.

– Pay interest to account no. (——-) on maturity

? Special instruction

? How the account will be operated (singly or jointly)

? Signature (s)

? FDR no.

Then a FDR account is opened and it is recorded in the FDR Register which contains the following information,-

· FDR A/C no.

· FDR (Fixed Deposit Receipt) no.

· Name of the FDR Holder with address

· Maturity period

· Maturity date

· Interest rate

· In case of Fixed Deposit Account the Bank needs to maintain a cash reserve. So SIBL offers a high interest rate in Fixed Deposit accounts. The interest rates followed by SIBL in Fixed Deposit accounts are:

Interest Rate:

1 months and above but less than 3 months: 8.50%

3 months and above but less than 6 months: 11.00%

6 months and above but less than 12 months: 11.25%

12 months and above: 11.75%

Source: GB Department & Banking Operations Division, circular REF: IC#BOD/21/07, Date: 04-06-2007

The FDR becomes renewed automatically in SIBL if the customer does not encash it within 7 days of maturity. In case of encashment of FDR in maturity, following accounting treatments are given:

Excise Duty on FDR——————–Dr.

Income Tax on interest ————–Dr.

FDR A/C———————————Dr.

Cash A/C—————————————-Cr.

Interest on FDR A/C—————————Cr.

If the customer wants to draw the interest only, then following entries are given:

Interest on FDR A/C—————–Dr.

Cash A/C—————————————Cr.

In case of ‘before maturity enactment’ interest is calculated for the days from the date of opening the FDR account.

Festival Sanchay Prokalpa are:

 Eid-Ul-Azha Sanchaya Prokalpa:

Interest Rate 10.00%

 Eid-Ul-Fitre Sanchaya Prokalpa:

Interest Rate 10.00%

 Durga-Puja Sanchaya Prokalpa:

Interest Rate 10.00%

 Buddha-Purnima Sanchaya Prokalpa:

Interest Rate 10.00%

 Boro-Din Sanchaya Prokalpa:

Interest Rate 10.00%

SIBL Consumer Banking Products are:

1. Brick by Brick Savings Scheme

2. Monthly Benefit Plan

3. Save Everyday Plan

4. Childrens Education Plan

5. Consumer Credit Scheme

6. BestInvest Plan

7. Unique Savings Plan

Some of SIBL Consumer Products

1. Brick By Brick Savings Scheme:

Monthly Installment 5 Years* 8 Years* 10 Years*

* The maturity value is an indicative figure. Tax/Excise Duty will be deducted as per govt. rules. 90% Loan Advantage on deposited amount. Thereafter in multiples of Tk. 5000 up to a limit of Tk. 100,000.

2. MTB Monthly Benefit Plan:

Deposit Amount Income Amount for 3-year plan* Income Amount for 5-year plan*

* The maturity value is an indicative figure. Tax/Excise Duty will be deducted as per govt. rules. 90% Loan Advantage on deposited amount.

3. Save Everyday Plan:

Saving money for the future is a common practice in any society. Savings help you to build a better tomorrow. Regular saving makes a man become disciplined, self confident and successful.

SIBL offers you “Save Everyday” Plan. The primary advantage of this plan is that you are absolutely free to choose your own time for depositing money into this account. You can deposit daily, weekly or monthly. The choice is yours, but the transactions will have to be within the Bank’s transaction hour.

This is a 5 year plan and you will be required to open the account with an initial deposit of Tk. 2500/= only. We offer you very attractive interest rate which is accrued in this account on a daily basis.

4. MTB Education Plan:

Monthly Installment 4 Years* 7 Years* 9 Years*

* The maturity value is an indicative figure. Tax/Excise Duty will be deducted as per govt. rules. 90% Loan Advantage on deposited amount.

5. Consumer Credit Scheme:

In order to make a significant contribution in the living standards of the people of medium and low income category, SIBL has introduced a scheme called “Consumer Credit Scheme”. With a view to materialize the dreams of those who are unable to make one time investment from their own savings, one can now afford to buy necessary household equipments and thus improve the standard of living.

All sorts of household durables eg. Television, Refrigerators, Computers, Air Conditioners, Video Cameras, Washing/ Drying Machines and Furnitures are allowed under this scheme. One can buy Motorcycle too under this programme.

The collateral security is minimum and the interest rates are one of the lowest in the market. Please contact the nearest branch for details.

6. BestInvest:

BestInvest offers you efficient high return investment plan. This plan helps you to build up a sizeable income in easy and affordable installments. This plan allows you to own 5 times the initial invested amount. BestInvest offers two separate and convenient term deposit periods for 4 years and 6 years respectively.

BestInvest is available in units worth Tk.50,000/- each. You will invest Tk.10,000/- as down payment for purchasing 1 (one) unit and the Bank will provide loan for Tk.40,000/-. The customer also has the option to buy units in multiples of Tk. 50,000/- but maximum upto Tk. 1,00,00,000/- (one crore).

This is a unique high return plan catering to all income group. So do not miss the opportunity.

Customized Products are:

MTB Double Saver Plan:

Deposit Amount Maturity Value after 6 Years*

* The maturity value is an indicative figure. Tax/Excise Duty will be deducted as per govt. rules. 90% Loan Advantage on deposited amount.

MTB Triple Saver Plan:

Deposit Amount Maturity Value after 11 Years*

* The maturity value is an indicative figure. Tax/Excise Duty will be deducted as per govt. rules. 90% Loan Advantage on deposited amount.

MTB Millionaire Plan:

Monthly Installment Year Maturity Value*

* The maturity value is an indicative figure. Tax/Excise Duty will be deducted as per govt. rules. 90% Loan Advantage on deposited amount.

7. MTB Unique Savings Plan:

Unique Savings Plan is an any day, any amount savings plan. The beauty of this plan is that a customer can deposit any day, any time and any amount.

Unique Savings Plan offers you to deposit any amount of your choice but not less than Tk. 500/- for 3/4/5 years. This is a high income plan with withdrawal facilities. The withdrawal facility will help you at the time of any emergency. You can withdraw 50% of the deposited balance for once a month. At maturity you will get a handsome amount.

Procedure of Account Opening, Interest Posting, Cheque Book Issues & Account Closing

Procedure of Account Opening:

Account Opening (Normal Account):

? Collect an Account opening form from the Bank

? Fill all the requirements of the form.

? Nominee is must be specified.

? Photograph is most important for any account.

? The account holder sign of his/her own self in front or the specific bank principle Officer in the account opening form.

Account Opening (Saving Account):

? Collect an Account opening form from the Bank.

? Fill all the requirements of the form.

? Nominee is must be specified.

? Photograph is most important for any account.

? The account holder sign of his/her own self in front or the specific bank principle Officer in the account opening form.

? To open this account the most important things is that Passport Photocopy or the Word Commissioner Certificate must have to add with the account opening form.

Account Opening (Current Deposit Account):

? Collect an Account opening form from the Bank.

? Fill all the requirements of the form.

? Nominee is must be specified.

? Photograph is most important for any account.

? To open this account the most important things is that Passport Photocopy or the Word Commissioner Certificate must have to add with the account opening form and also enclose the form 12 with the account opening form.

Checklist of Documents to be obtained for various types of ACCOUNTS:

Sole Proprietorship:

1. Signature Card.

2. Photograph of signatories attested by introducer.

3. Copy of valid Trade License.

4. TIN Certificate.

5. 18-permission from Bangladesh Bank (for GSA & Agents only).


1. Signature Card.

2. Photography of signatories attested by introducer.

3. Partnership Deed.

4. Partners letter of authority to open account and authorization for operation.

5. Copy of valid Trade License.

6. 18-A permission from Bangladesh Bank (for GSA & Agents only).

Limited Liability Company:

1. Signature Card.

2. Photograph of signatories attested by introducer.

3. Copy of Memorandum and Articles of Association (Certified by RJSC).

4. Copy of Certificate of Incorporation and commencement of business (In case of public Ltd. Co.).

5. Copy of Board Resolution to open the account and authorization for operation.

6. List of Directors and signatories along with addresses.

7. Latest copy of From XII.


1. Signature Card.

2. Photograph of signatories attested by introducer.

3. Copy of Resolution of governing body to open the account and authorization for operation.

4. Copy of consolation / bylaws/ rules.

5. Certificate of registration.

6. List of authorized signatories and members of the governing bodies along with address.

7. Trust Deed (for Trust account only).

  • Interest Posting to Client’s account:

     Bangladesh Government has circulated that, 10% deduction from the Bank’s Internal Account’s. This 10% tax deduction from the client’s interest. Other wise another circulation is that, from the OBC collection every bank cut off there OBC commission as income account, here Bangladesh Bank said that 15% money cut off from the OBC collection as Vat on Others.

Cheque Book Issues:

Types of Cheque Book’s:

? Savings Account – 10 Leaves

? Current Deposit Account – 10 Leaves

? Current Deposit Account – 25 Leaves (CDTF)

? Current Deposit Account – 50 Leaves (CDF)

NB: CDTF: Current Deposit Twenty Five

CDF: Current Deposit Fifty

Cheque Issuing is Two Types:

 Direct requisition slip

 Cheque Book’s requisition slip

Customers Service Officer receives these types of slip from the client’s and gives the cheque books under processing. Processing means Cheque Book’s collect from the VOLT and the put account number in the cheque book, write down the serial number of the cheque book in the requisition slip and cheque book register, then Verified client signature. After all this things the Principal officer sign in the cheque leaves and sent the cheque book to another Principal officer for sign, after his sign the client receive the cheque book. These things the Principal Officer for sign, after his sign the client receive the cheque book. Then Principal Officer posting that cheque books leaves number in the computer data processing system.

A cover file containing the requisition slip is effectively preserved as vouchers. If any defect is noticed by the ledger keeper, he makes a remark to that effect on the requisition slip and forward it to the cancellation officer to decide whether a new checkbook to be issued to the customer or not.

Account Closing:

For two reasons, one can be closed. One is by banker and other is by the customer.

By banker: If any customer doesn’t maintain any transaction within six years and the A/C balance becomes lower than the minimum balance, banker has the right to close an A/C.

By customer: If the customer wants to close his A/C, he writes an application to the manager urging him to close his A/C.

Different procedures are followed in cash of different types of A/C to close:

 Fixed deposit A/C is closed after the termination of the period.

 Brick by Brick A/C is very easily closing if one of the clients didn’t pay his/her monthly installment at the bank three months one after one, in this way three months.

 Another account’s will be closed on the parties advice, if they want to close any one of the account clients must have to submit an A/C closing letter through des pass. Then the Sr. Principal Officer checks it out and closes the A/C.

Closing process for current & savings A/C:

 After receiving customer’s application the officer verifies the balance of the A/C.

 He then calculates interest and other charges accumulated on the A/C.

 If it bears a credit balance, the officer writes advice voucher. He gives necessary accounting entries post to accounts section.

 The balance is returned to the customer. And lastly the A/C is closed.

But in practice, normally the customers don’t close A/C willingly. At times, customers don’t maintain any transaction for long time. Is this situation at first, the A/C becomes dormant and ultimately it is closed by the bank.

Remittance, Main instruments, Payment Order & Demand Draft Issue, Cancellation, Charges, Duplicate


Remittance of funds is ancillary services of SIBL. It aids to remit fund from one place to another place on behalf of its customers as well as non- customers of Bank

SIBL has its branches in the major cities of the country and therefore, it serves as one of the best mediums for remittance of funds from one place to another.

The main instruments used by SIBL, Principal Branch for remittance of funds.

? Payment Order Issue/Collection

? Demand Draft Issue/Collection

? T.T. Issue/Collection

? Endorsements

? Travelers Cheque Issuance

? IBC/OBC Collection.

Payment Order Issue/Collection:

The pay order is an instrument issued by bank, instructing itself a certain amount of money mentioned in the instrument taking amount of money and commission when it is presented in bank. Only the branch of the bank that has issued it will make the payment of pay order.

Issuing of Pay Order:

The procedures for issuing a Pay Order are as follows:

? Deposit money by the customer along with application form.

? Give necessary entry in the bills payable (Pay Order) register where payee’s name, date, PO no, etc is mentioned.

? Prepared the instrument.

? After scrutinizing and approval of the instrument by the authority, it is delivered to customer. Signature of customer is taken on the counterpart.

Different modes of PO when a customer can purchase:

By cash:

Cash A/C Debit

Bills payable (PO) A/C Credit.

Income on commission A/C Credit.

By account:

Customer’s A/C Debit

Bills payable (PO) A/C Credit.

Income on commission A/C Credit.

By transfer:

SIBL General/ other Dept Clients A/C Debit

Bills payable (PO) A/C Credit.

Income on commission A/C Credit.

PO A/C is the current liabilities of bank, which is acquired to be discharged by beneficiaries against cash or through an account.

Settlement of a PO:

When PO submitted by collecting bank through clearing house, the issuing bank gives payment.

Bills payable (PO) A/C Debit

SIBL General A/C Credit.

But before giving payment it is duty for issuing to observe whether endorsement was given by the collecting bank or not, then the instrument is dishonored and marking ‘Endorsement required’.

Cancellation of a Pay Order:

If a buyer wants to cancel it, he should submit a letter of instrument in this regard and also return the instrument.

Accounting treatment: Adjustment entry wills be-

Bills payable (PO) —————Dr.

Customer A/C——————Cr.

When PO is lost:

If the instrument is lost, the holder will inform to the issuing bank immediately. Bank will mark ‘stop payment’ on the Bills payable (PO) Register. Buyer will then ask for a new instrument by submitting a GD copy, and indemnity bond. A new instrument will be delivered.

Demand Draft Issue/Collection:

The person intending to remit the money through a Demand Draft (DD) has to deposit the money to be remitted with the commission which the banker charges for its services. The amount of commission depends on the amount to be remitted. On issue of the DD, the remitter does not remain a party to the instrument: i) Drawer branch ii) Drawee branch iii) Payee. This is treated as the current liability of the bank as the banker on the presentation of the instrument should pay the money. The banker event on receiving instructions from the remitter cannot stop the payment of the instrument. Stop payment can be done in the following cases:

 Loss of draft before endorsement: In this case, “Draft reported to be lost, payee’s endorsement requires verification” is marked.

 Loss of draft after endorsement: In this case, the branch first satisfies itself about the claimant and the endorsement in his favor.

Accounting treatment:

In case of issuing of the instrument:

Cash/ customer’s A/C———————Dr.

SIBL General A/C (Drawn on branch)———-Cr.

Income A/C commission—————————Cr.

After giving these entries an Inter Bank Credit Advice is prepared which contains the controlling number, depicting that the branch is credited to whom it is issued.

An IBCA implies the following entries,

SIBL General A/C Issuing Branch ——-Dr.

Drawn on branch————————————Cr.

Role of the Drawn Branch:

After receiving the IBCA lodgment is done by the branch. The following entries are given “DD In-Issuing branch” register:

Issuing branch A/C————————-Dr.

Bills Payable —————————————Cr.

(After receiving an IBCA)

Bills Payable (DD) A/C——————–Dr.

Client’s A/C——————————–Dr.

Entries are given in “DD In-Issuing branch” register:

Issuing branch A/C———————–Dr.

Bills Payable—————————————Cr.

(After receiving an IBCA)

Bills Payable (DD) A/C——————Dr.

Client’s A/C——————————Dr.


A commission of 0.15% is taken on the draft value & Tk.50/= is taken as postal charge.


To cancel an issued DD, the client has to submit an application. Issuing branch then sends an Inter Branch Debit Advice (IBDA) to the drawn branch against previously issued IBCA.

After that the following entries are given:

General A/C drawn on branch———Dr.

Client’s A/C —————————————Cr.

Issuing of Duplicate DD:

If the customer wants to issue a duplicate DD, than customer is asked to do the following formalities:

 making a general diary (GD) in the nearest Police Station.

 Furnishing an Indemnity Bond in Tk.50/= stamp

The banker immediately marks “stop payment” in the register after receiving the application from the customer and a duplicate DD is issued.

T.T. Issue Collection, Accounting entries, Procedures, Endorsements, IBC & OBC, Locker Service

T.T. Issue/Collection:

Telex transfer (TT) is another widely used mode for remittances of funds. In case of telex transfer the message for transfer of funds is communicated through tested telex. SIBL generally recovers from the telex charges in addition to the usual service charges.

Issuing of TT:

SIBL follows the following procedures:

 The customer deposits money with SIBL to be sent.

 The customer obtains a cash memo containing TT serial number.