Islami Bank Internship Report
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Internship Report On General Banking, Investment & Foreign
Exchange operations of Islami Bank Bangladesh Ltd.
Mrs. Mahmuda Sultana Course-Coordinator (Training) SPO & Faculty member, IBTRA
NameNazma Haque Snigdha Rajbongshi Jasmin Akhter
UniversityUniversity of Dhaka University of Dhaka International Islamic University of Chittagong Stamford University
Date of Submission: 27.12.2010
Letter of Transmittal27th December 2010
Mrs. Mahmuda Sultana
SPO & Faculty member, IBTRA
Subject: Submission of report on General Banking, Investment & Foreign Exchange operations of Islami Bank Bangladesh Ltd.
Honorable Madam,With due respect we do hereby submit our Internship Report titled General Banking, Investment & Foreign Exchange operations of Islami Bank Bangladesh Ltd., which was assigned to us as an integral part of our course requirements in B.B.A program.
As we have been working in IBBL, Jatrabari Branch, Dhaka, thus, it is a very good opportunity for us to prepare the report properly out of practical experiences & empirical data, as well as, application of theoretical knowledge.
Preparing this report has been extremely challenging, interesting and rewarding experience. Now we are able to understand and utilize the key terms of Islamic Banking in banking sector. Now it is very easy for us to interpret any impact and its effect on bank. We would like to express our deepest gratitude to you for providing us with such an opportunity.
We have tried our best to make this report as comprehensive and informative as possible within the time allowed for us. Due to various constraints, there may be some mistakes for which we beg your apology.
Sincerely yours, Nazma HaqueSnigdha Rajbongshi Jasmin Akhter Shanzida Rahman
AcknowledgementFirst of all we remember Almighty Allah for making us successful to prepare this report. We are grateful to the Islami Bank Bangladesh Limited authority that has helped us by updating desired information at their website. At the very outset, we would like to thank Mrs. Mahmuda Sultana, Course-Coordinator, SPO & Faculty member IBTRA for giving us the opportunity to know about the Islamic Banking in Bangladesh, and her support and direction it would never be possible for us to make this report.
We also express our heart full thanks to all the faculty members of Islami Bank Training and Research Academy (IBTRA) specially Dr. Mahmood Ahmed, SVP & Course Director (Training) IBTRA, Janab Md. Hedayet Ullah, AD (Training) and other faculty members as well as the employees from top to bottom of IBTRA, who gave us necessary information and excellent guidance to prepare this internship report.
We talked all the concerned officers of the Islami Bank Bangladesh Limited, Jatrabari Branch, who kindly provided us the information and other handouts. Especially we cannot but mention Rana Mohammad Raihan, Senior vice President of IBBL and Branch Manager, Jb.Md.Monowarul Islam Chowdhury, SPO & Jb.Md. Nasiruddin, Senior Officer of this branch.
The management of this Branch had been extremely helpful in providing necessary documents, annual report, statements, voucher etc. which helped us to prepare this Internship report. We express a deep debt of appreciation & gratefulness to the employees of IBBL, Jatrabari Branch.
TABLE OF CONTENTSExecutive Summary
Page No. 1-2 3 4 4 5 6 6 7 8-10 11-13
Introduction of the Report Rational of the study Objective of Report Methodology Scope of the study Limitation Objective of Islamic Banking Basic properties of Islamic Banking
Islamic Banking In Bangladesh
About the organization Corporate Information Vision of IBBL Mission of IBBL Special feature of IBBL Management of IBBL Financial Performance of IBBL
14 15 16 16 16 18 19-20
Analytical Part of IBBL
PEST Analysis SWOT Analysis
Functions of IBBL General Banking Operations Modes of Investment of IBBL Foreign Exchange Operations Welfare Activities of IBBL
27 28-42 43-49 50-53 54-56
Difference between Conventional & Islamic banking
Findings, Recommendation& Conclusion Findings Recommendations Conclusion Bibliography Appendix
65 66-67 68-69 70 71 72-74
Banking system plays a very important role in the economic life of the nation. The health of the economy is closely related to the soundness of its banking system. In a developing country like Bangladesh the banking systems as a whole play a vital role in the progress of economic development. Modern trade and commerce would almost be impossible without the availability of suitable banking services. Islamic Banking is an integral part of Islamic Economics and thereby an Islamic way of life. Islamic Banking is a special nature of financial intermediary which has not involve in any way with interest. The introduction of interest-free and equity-based financing by the Islamic banking system is based on the principles of Islamic economics. Here I provide information about Islamic Banks in Bangladesh. IBBL is a third generation bank in the private sector banking of Bangladesh. IBBL is the private commercial bank that is a brain child of some successful local entrepreneurs. IBBL is a banking company registered under the Companies Act, 1913 (At present the companies Act, 1994) with its Head Office at 40, Dilkusha Commercial Area, Dhaka- 1000, Bangladesh. The bank started its historical operation on the 30th March 1983. Now it has as many as 234 Branch throughout the country. Five more Branches are placed to be opened in 2010. IBBL has already achieved tremendous progress within only 8 years. Now IBBL is offering about to all modern banking service with modern technology. Meanwhile, IBBL has already introduced on-line banking services. Islami Bank has discovered a new horizon in the field of banking area which offers different General Banking, Investments and Foreign Exchange banking system. IBBL has some special mission & vision to establish interest free Banking in the country. From the very beginning since inception the Bank it has been facing different kinds of problem due to lack of Islamic Banking Act, Islamic money market and also general people have no idea about Islamic mode of investment.
We have prepared the internship report on General Banking, Investment & Foreign Exchange operations of Islami Bank Bangladesh Ltd. as a partial fulfillment for the BBA program of the university based on primary & secondary data & information. For this specific purpose we have collected data & information from various sources like published materials such as the annual report, articles related to Banking activities. We concentrated on arranging
& putting the data in such a way that the report progressively anchors to a desired destination of understanding. In this report we have tried to show overall activities & performance of Islami Bank Bangladesh Ltd. We have also shown the differences with conventional banking regarding different aspects as well as identified strength and weakness of IBBL & recommend actions that may be necessary to redesign functions of IBBL.
Introduction of the Report
1.1 Rationale of study:Internship program of University is a partial requirement for the graduation of BBA/M.B.A students. Every B.B.A/M.B.A student is appointed to learn some practical knowledge within the pre-stipulated period by observing the organization day to day activities. In this regard our internship program started at 27th October at Islami Bank Bangladesh Limited. In the modern society commercial Banks occupy a position of economic importance. They play a
significant role to meet the needs of the society such as capital formation, large-scale production, industrialization, growth of trade and economy etc. Islamic banks are unconditional and specialized financial institutions that perform most of the standard banking services and investment activities on the basis of profit and loss sharing system conforming to the principles of Islamic Shariah. Out of 50 banking institutions, 7 banks are backed by Islamic mechanism and worldwide accepted Islamic morality and established code of conduct. This paper, however attempts to appraise performance and dictate the overall scenario of Islami Bank Bangladesh Limited performing beneath the umbrella of Islamic shariah and approved welfare oriented principles.
1.2 Objectives of reportThe first objective of writing the report is fulfilling the partial requirements of the BBA program. In this report, we have attempted to give an overview of Islami Bank Bangladesh Limited in general. The primary objective of this report is to observe the general banking, investment related activities & foreign exchange operations of Islami Bank Bangladesh Ltd. The other objectives include: Following are the main objectives
To familiar the history of Islami Banking in Bangladesh. To learn about the overall general banking operations of IBBL. To show the investment mechanism and product offerings in different modes of IBBL. To learn about the shariah aspects followed for foreign exchange operations. To learn about the welfare activities of IBBL. To show the differences with conventional banking regarding different aspects. To identify strength and weakness of IBBL. To find problems or lacking that IBBL is facing. To recommend actions