Internship Report

On
DIFFERENT MODES OF INVESTMENT
Of
ISLAMI BANK BANGLADESH LIMITED (IBBL)






Internship Report
on
Different Modes of Investment of Islami Bank Bangladesh Limited
Supervised By
Nadira Sultana
Assistant Professor
Department of Finance
Bangladesh University of Business & Technology (BUBT)

Submitted By
Al-Amin Hossain
ID NO: 10112101476
Intake: 24
th



Program: BBA
Major in Finance


Bangladesh University of Business & Technology(BUBT)
Date of Submission: 18-10-2014

LETTER OF TRANSMITTAL

October 18, 2014
Nadira Sultana
Assistant Professor,
Department of Finance
Bangladesh University of Business & Technology (BUBT)

Subject: Submission of Internship Report on Different Modes of I nvestment of Islami Bank
Bangladesh Limited
Dear Madam,
With due respect and humble submission, I would like to inform you that I have completed my
internship program at Islami Bank Training & Research Academy (IBTRA). The title of my
internship report on Different Modes of I nvestment of Islami Bank Bangladesh Limited and here
is the report submitted to you for your kind evaluation.
Working in a Bank was a great experience for me. I believe, this will help me to build my career in
Banking Sector. The internship program gave me the opportunity to enrich my theoretical knowledge
through practical exposure of financial activities of some businesses. I was appointed in the General
banking, Investment and Foreign exchange department there, which helped me to get firsthand
knowledge about banking.
I therefore, hope that this report will provide necessary information about Different Modes of
Investment of Islami Bank Bangladesh Limited(IBBL).
I will be available at any time convenient for further clarification on the report.
Yours faithfully,
..
Al-Amin Hossain
ID NO: 10112101476
BBA Program, 24
th
Intake
Department of Finance
Bangladesh University of Business and Technology (BUBT)

STUDENT DECLARATION

I am, Al-Amin Hossain, hereby declare that the report of internship Program titled Different Modes
of Investment of Islami Bank Bangladesh Limited is uniquely prepared by me after the completion
of two months work at Pallabi Branch of Islami Bank Bangladesh Limited.
I confirm that, the report is only prepared for my academic requirement not for other purpose. It might
be with the interest of opposite party of the corporation. I also assure that this report is not submitted
anywhere of Bangladesh before me.







Al-Amin Hossain
ID NO: 10112101476
BBA Program, 24
th
Intake
Department of Finance
Bangladesh University of Business and Technology (BUBT)



CERTIFICATE OF SUPERVISOR

This is to certify that Al-Amin Hossain, a student of BBA Program, ID No. 10112101476 has
successfully completed his Internship Program entitled Different Modes of Investment of Islami
Bank Bangladesh Limited under my supervision as the partial fulfillment for the award of BBA
degree.

He has done his job according to my supervision and guidance. He has tried his best to do this
successfully. I think this program will help him in the future to build up his career. I wish his success
and prosperity.



....
Nadira Sultana
Assistant Professor
Department of Finance
Bangladesh University of Business & Technology (BUBT)


ACKNOWLEDGMENT

At first I want to express my gratitude to Almighty Allah for giving me the strength and the
composure to finish the task within the scheduled time. Then I am very grateful to the Islami Bank
Bangladesh Limited for providing me the opportunity to complete my internship program.
I received cordial co-operation from the officers and members of staffs of Islami Bank Bangladesh
Limited, Pallabi Branch. I want to express my cordial gratitude to them for their co-operation without
which it would not be possible to complete the report.
I would like to express my deep sense of gratitude & sincere appreciation to my internship supervisor
Nadira Sultana, Assistant Professor, Department of Finance, Bangladesh University of Business &
Technology (BUBT), for his continuous support & guidance during the practical orientation period.
His suggestions and comments were really a great source of spirit to make the report a good one.
It is a great pleasure to me to have a practical experience in banking industry. Special thanks go to
Islami Bank Training and Research Academy (IBTRA) for giving me the opportunity to work with
ISLAMI BANK BANGLADESH LIMITED. Thanks to Md.Nazmul Huda, Senior Principle Officer &
In-Charge of Investment Department for his supervision during my internship program. His guidance
and suggestion regarding banking activities of IBBL helped me much to develop my knowledge in
Finance.
I am really thankful to MD.Qamrul Bari Imami (Vice-President & Manager) of the Islami Bank
Bangladesh Limited, Pallabi Branch for giving me the excellent opportunity to do my practical
orientation in his branch.
Last but not least, my sincere thanks go to my beloved mother for her prayers for me. My special
thanks are due to my beloved family, who were always with me.
Finally I would also like to thank all of the officials of Islami Bank Bangladesh Limited, Pallabi
Branch due to their kind and helpful cooperation with me.


TABLE OF CONTENT

Particulars Page no.
Abbreviation I
Executive Summary II
Chapter-01: Introduction
01-04
1.1 Introduction 02
1.2 Origin of the Report 02
1. Significance of the Report 02
1.4 Scope of the Report 02
1.5 Objective of the report 03
1.6 Methodology of the Report 03-04
1.7 Limitations of the Report 04
Chapter -02: An overview of the IBBL
05-25
2.1 What is Islamic Banking 06
2.2 Objectives of Islamic Banking 06-07
2.3 Essential Features of Islamic Banking 07
2.4 A summary of History and Present Status of Islamic banking around the World 08
2.5 Conventional and Islamic Banking 09-10
2.6 History of IBBL 11-12
2.7 Mission 11
2.8 Vision 11-12
2.9 Shariah Council of IBBL 12
2.10 Objectives of Shariah Council 12-13
2.11 Membership of different organization 13
2.12 Special features of the IBBL 13
2.13 Strategic Objectives 14
2.14 Core Values 14-15
2.15 Commitments 15
2.16 Aims and objectives 15
2.17 Present programs of the organization 16
2.18 Product & Services 16-18
2.19 Functions of IBBL 19-20

2.20 Organizational Structure of IBBL 21
2.21 Hierarchy Management of IBBL 22
2.22 Corporate Information (2013) 23-24
2.23 Recognition of Performance 25
Chapter -03: Theoretical Aspect
26-32
3.1 Investment 27
3.2 Islami Banking 27
3.3 Convensional Banking 27
3.4 Riba(Interest) & Profit 27
3.5 Difference between a) Profit vs Riba and b) Rent vs Riba 28
3.6 Modes of investment: 29-30
3.7 Status of Investment 31
3.8 Investment Scheme of IBBL 32
Chapter- 04: Investment Activities of IBBL
33-47
4.1 Investment 34
4.2 Investment Management of Islami Bank Bangladesh Limited 34
4.3 Investment Policy of Islami Bangladesh Bank Limited 34
4.4 Investment Principles of Islami Bangladesh Bank Limited 34-35
4.5 Investment Process of IBBL 36-39
4.6 Investment Modes of IBBL 40-47
4.6.1 Bai Mechanism 40-45
4.6.2 Share Mechanism 45-46
4.6.3 Ijara Mechanism 47
Chapter- 05: Analysis 48-77
5.1 Year Wise Deposits & growth rate of Islami Bank Bangladesh Limited 49
5.2 Year Wise Investment Deposit Ratio Analysis 50
5.3 Year Wise Investment & Growth Rate 51
5.4. Mode Wise Investment in 2013 52
5.5. Trend of Mode Wise Investment from 2009 to 2013 53-60
5.5.1.1 Investment in Bai Murabaha 53
5.5.1.2 Investment in HPSM 54
5.5.1.3 Investment in Bai Mujjal 55
5.5.1.4 Investment in Bill Purchase & Nego 56



5.5.1.5 Investment in Quard E Hasana 57
5.5.1.6 Investment in Bai Salam 58
5.5.1.7 Investment in Mudaraba 59
5.5.1.8 Investment in Musharaka 60
5.6 Sector Wise Investment in 2013 61-67
5.6.1. Trend of some sector wise investment of IBBL & Industry Investment 62
5.6.1.2 Commerce Investment 63
5.6.1.3 Real Estate Investment 64
5.6.1.4. Agriculture Investment 65
5.6.1.5. Transport Investment 66
5.6.1.6. SME Investment 67
5.7 Income from Investment 68
5.8 Mode Wise Income of IBBL-2013 69-72
5.8.1.1 Invest Income from Murabaha 69
5.8.1.2 Invest Income from Musharaka 70
5.8. 1.3Investment Income from Bai-Muajjal 71
5.8.1.4 Investment Income from HPSM total 72
5.9 Classified Investment as a Percentage of total Investment 73
5.10 Bad or loss as a Percentage of total Investment 74
5.11 Return on Investment (ROI) of IBBL 75
5.12 SWOT Analysis 76-77
Chapter-06: Comparative Analysis
78-82
6.1: Deposit of IBBL as % of total National Deposit 79
6.2: Investment of IBBL as % of total Investment 80
6.3: Comparison of Investment to Deposit Ratio of IBBL & National Investment to
Deposit Ratio
81
6.4: Non- performing Investment of IBBL as % of total Investment 82
Chapter-07: Findings, Recommendation & Conclusion 83-86
7.1 Major Findings 84
7.2 Recommendation 85
7.3 Conclusion 86
Bibliography 88

LIST OF ABBREVIATION
Abbreviation Elaboration
BBA Bachelor of Business Administration
IBBL Islami Bank Bangladesh Limited
BB Bangladesh Bank
BDT Bangladeshi Taka
GOV Government of Bangladesh
CC Cash Credit
CIB Credit Information Bureau
IRM Investment Risk Management
DF Doubtful Loan
FO Financial Obligation
FI Financial Institution
NPI Non Performing Investment
OD Overdraft
RM Relationship Manager
SME Small and Medium Enterprise
RMU Risk Management Unit
CSR Corporate Social Responsibility
RIP Rural Investment Program
AVP Assistant Vice President
ACU Asian Clearing Union
B/C Bill of Collection
BBS Bangladesh Bureau of Statistics
L/C Letter of Credit
TT Telegraphic Transfer
TIN Tax Payers Identification Number
PAD Payment Against Documents
MT Mail Transfer
LCAF Letter of Credit Application Form
IBTRA Islami Bank Training & Research Academy

EXECUTIVE SUMMARY

The main focus of this report is on the Investment modes of Islami Bank Bangladesh Limited.The
study focuses on different modes of investment, the investment procedure and nonperforming
investment of Islami Bank Bangladesh Limited, sector wise investment, geographical location wise
investment of Islami Bank Bangladesh Limited. The study has been conducted mainly based on
secondary data. Some information has also been collected from the discussion with the officers. Trend
analyses are mainly conducted to analyze the trend of investment, sector wise investment of Islami
Bank Bangladesh Limited. Non performing investment and investment performance of IBBL within
the banking industry are also analyzed in the report. Results of the study show that there is an
increasing trend in deposit, investment, and investment income from IBBL. Islami Bank Bangladesh
Limited provides more investment in internal trade finance, house building sector. Islami Bank
Bangladesh Limited does not provide enough investments in agricultural sector. Classified investment
as percentage of total investment of IBBL has fluctuated over the years and classified investment as
percentage of total investment of IBBL was higher than industry average over each year of analysis.
Therefore, Bank should give more effort to maintain and improve its trend of deposit rate by
increasing their branches, providing more customer services like-prompt service, developing new
savings scheme.




















1.1 Introduction:
One of the tried and proven methods of combating the short comings is experience in the internship
program. It is the combined arrangement between the educational institution and corporate house
operating in the practical field BBA program to produce skillful Business Executive having an
absolution professional outlook. For any business school student only curriculum activity is not
enough for handling the real business situation, therefore it is an opportunity for the students to know
about the field of business through the internship program. As internship program is a perfect blend of
the theoretical and practical knowledge. This report is originated to fulfill the requirement of the
assign project internship report on Investment Activities of Islami Bank Bangladesh Limited. In
this regard an organization attachment at Pallabi Branch of Islami Bank Bangladesh Limited has been
given to me a period of two months commencing from 1
st
July, 2012 to 28
th
August, 2014. During this
period I learned how the host organization works with the help of the internal supervisor. The internal
supervisor assigned me one of the projects and shuffled me around to educate me about the operation
of a bank.

1.2 Origin of the Report:
This Internship Report has been preparing under the Internship program, an indispensable part of the
Bachelor of Business Administration (BBA) program. For the internship purpose, I chose Islami Bank
Bangladesh Ltd (IBBL).I prepare this report on the investment related activities of the organization.

1.3 Significance of the Report:
Islami Bank Bangladesh Ltd. is the biggest Bank in Bangladesh in private sector.There are a few
number Of private Banks that can compete with IBBL. The Banking system aiming to gain the goal of
Islamic economy through setting a well designed Islamic Monitory system. Regarding use of money
Islam has Its clear-cut instruction through some distinctive guidelines. Avoiding interest (Riba),
restricting exploitation & speculation etc. are major guidelines in this process. So Islamic Banking
system is doing Banking business under Islamic guide lines.
1.4 Scope of the Report:
Scope of the report is mainly limited to the analysis of investment activities of Islami Bank
Bangladesh Limited. In order to conduct study on this main aspect the following aspects also come
within the scope of the study:
An overview of the Islami Bank Bangladesh Limited.
An analysis of different modes of investment of IBBL.
An analysis of sector wise investment of IBBL.
Status of classified investment.

1.5 Objective of the Report:
The primary objective of this report is to observe the investment related activities for the Investment
Department of Islami Bank Bangladesh Ltd. Objectives are include:
To analyze different modes of investment.
To seek out all the strengths, weaknesses, opportunities & threats.
To compare with other conventional banks.
To familiarize with the various investment schemes.
To get the practical exposure of the banking activities.
To adapt with the corporate environment.
To understand the investment policy of IBBL with other banks.

1.6 Methodology of the Report:
Methodology is the process or system through which a study is being carried out for the purpose of
collection of information that is required is collection with the study for reaching a conclusion on that
Study.
This section of the report contains three Questionnaires, as follows:
a) Questionnaires for common Clients.
b) Questionnaires for Investors.
c) Questionnaire for Banking.
1.6.1. Research design:
This report is analytical in nature which briefly reveals analyze the investment activities of Islami
Bank Bangladesh Limited. It has been conducted by collecting secondary data. Annual reports of IBBL
the major secondary data sources in this purpose. This study has been conducted by collecting data
for the period of 5 years from 2009 to 2013.
1.6.2 Data collection method:
The data required for this study were collected from both primary and secondary sources; however,
majority of the information was collected from secondary sources.

a) Primary source
Primary data was collected form
Branch Manager & Second Officer.
Face to face conversation with employees and staffs.

Practical work experience.
Face to face conversation with clients.

b) Secondary source
The secondary data has been collected from
Annual Report of Islami Bank Bangladesh Limited.
Various prescribed forms of investment were analyzed.
IBTRA Library.
Manuals of Investment of IBBL.
Different text books & materials.
Website of the Islami Bank Bangladesh Limited.
The major portion of the data source used for this report is a secondary one.

1.7 Limitation of the Report:
I have faced some problems during preparing my report:

Lack of experiences has acted as constraints in the way of meticulous exploration on the
topic.
Lack of current information.
Shortage of time for preparing the report in order.
The study was conducted mostly on secondary data.











2.1 What is Islamic Banking?
Islami banking has been defined in different ways. The definition of Islamic bank, as approved by the
Secretariat of the OIC, is stated in the following manner.
An Islami bank is a financial institution whose statutes, rules and procedures expressly state its
commitment to the principle of Islamic Shariah And to the banning of the receipt and payment of
interest on any of its operations.
Shawki Islami Shehta viewing the concept from the prospective of an Islamic Economy and the
prospective role to be played by an Islamic bank there in opines:
It is, therefore, natural, and indeed, imperative for an Islamic bank to incorporate in its functions and
practices commercial investment and social activities, as an institution designed to promote the
civilized mission of an Islamic Economy(Ibid).
It appears from the definition that Islamic banking is systems of financial intermediation that avoids
receipt and payment of interest in its transaction and conducts its operation in a way that it helps
achieve the objectives of an Islamic economy. Alternatively, this is a banking system whose operation
is based on Islamic principles of transaction of which profit and loss sharing (PLS) is a major feature,
ensuring justice and equity in the economy. That is why Islamic banks are often known as PLS bank.
2.2 Objectives of Islamic Banking
The primary objective of establishing Islamic banks all over the world is to promote, foster and
develop the application of Islamic principles in the business sector. More specifically, the objectives
of Islamic banking when viewed in the context of its role in the economy are listed as following:
To offer contemporary financial services in conformity with Islamic Shariah;
To contribute towards economic development and prosperity within the principles of Islamic
justice;
Optimum allocation of scarce financial resources; and
To help ensure equitable distribution of income.

The objectives of Islamic banking are discussed below:
Offer Financial Services: Interest-based banking, which is considered a practice of Riba in
financial transactions, is unanimously identified as anti-Islamic. That means all transactions made
under conventional banking are unlawful according to Islamic Shariah. Thus, the emergence of
Islamic banking is clearly intended to provide for Shariah approved financial transactions.

Islamic Banking for Development: Islamic banking is claimed to be more development- oriented
than its conventional counterpart. The concept of profit sharing is a built-in development promoter
since it establishes a direct relationship between the banks return on investment and the successful
operation of the business by the entrepreneurs.
Optimum Allocation of Resources: Another important objective of Islamic banking is the optimum
allocation of scarce resources. The foundation of the Islamic banking system is that it promotes the
investment of financial resources into those projects that are considered to be the most profitable and
beneficial to the economy.
Islamic Banking for Equitable Distribution of Resources: Perhaps the most important objective of
Islamic banking is to ensure equitable distribution of income and resources among the participating
parties: the bank, the depositors and the entrepreneurs.

2.3 Essential Features of Islamic Bank :
Prohibition of interest
The traditional capitalist banking system depends on interest. It receives interest for providing loans
and pays interest for taking loans. The spread between these two interests is the source of its profit.
But according to Islamic Shariah all types of interest is banned. So, Islamic bank does not carry on
business of interest and it completely avoids the transaction of interest.
Investment based on profit
After departing from interest, the alternate ways of income for Islamic bank is investment and profit.
Thus IBBL gives up any transaction of interest and makes investments based on profit. Bank
distributes its profit to its depositors and shareholders.
Investment in Halal business
Islamic Shariah has banned the business of haram goods. For example, Islam not only forbids the
drinking of alcohol but also banned any business of alcohol. Therefore, Islamic bank does not get any
haram business and only do halal business.
Halal paths and procedures
Islamic Shariah also rejects any haram path or process in case of a halal business. Therefore, Islamic
bank system only allows the halal path procedures of halal business.


2.4 A summary of History and Present Status of Islamic banking around the World
1. In 1962- Pilgrims Saving Corporation was established in Malaysia under Islamic Principle.
2. In 1963- Dr. Ahmed A El-Naggar established an Islamic Bank named Savings Bank in
Mitgamar, 100 km a way from Cairo, Egypt.
3. In 1969-An Islamic Specialized Bank named Tabugn Haji was established in Malaysia.
4. In 1970- Foreign Ministers of OIC countries in their meeting decided to form Islamic
Banking in Muslim countries.
5. In 1971- Nasir Social Bank was established in Cairo, Egypt.
6. In 1973- Finance Ministers of OIC countries in their meeting decided to form an Internal
Islamic Bank on 18-12-73.
7. In 1974- Finance Ministers of OIC countries signed a charter to form an International Islamic
bank, during August.
8. In 1975- Islamic Development Bank (IDB) was formed in Jeddah, KSA on 20-10-75.
9. In 1975- Dubai Islamic Bank was established in Dubai UAE
10. In 1977 i) Faisal Islamic Bank was established Sudan.
ii) Kuwait Finance House was established in Kuwait.
11. In 1977- International Association of Islamic banks (LaIb) was formed in Jeddah, K.S.A
Total member of LAIB was 180.
12. In 1978- Jordan Islamic Bank for Finance and Investment was established in Jordan.
13. In 1978- Pakistan declared all Banks as Islamic
14. In 1983- Islamic bank Bangladesh Ltd. (IBBL) was established in Dhaka, Bangladesh.
15. In 1983- Islamic bank was established in Turkey.
16. In 1984- Iran declared all Banking system Islamic
17. In 1990-The accounting and Auditing Organization for Islamic Financial.
18. Institutions (AAOIFI), formerly known as Financial Accounting Organization for Islamic
Banks and Financial Institution was established on 26-02-90 in accordance with the
Agreement of Association signed in Algiers, Algeria Corporation body in 1991 on 27-03-91
in the state of Bahrain.





2.5 Conventional and Islamic Banking:
Conventional banking is essentially based on the debtor-creditor relationship between the depositors
and the bank on the one hand, and between the borrowers and the bank on the other. Interest is
considered to be the price of credit, reflecting the opportunity cost of money.

Islam, on the other hand, considers a loan to be given or taken, free of charge, to meet any
contingency. Thus in Islamic Banking, the creditor should not take advantage of the borrower. When
money is lent out on the basis of interest, more often it happens that it leads to some kind of injustice.

The first Islamic principle underlying such kinds of transactions is that deal not unjustly, and ye
shall not be dealt with unjustly. Hence, commercial banking in an Islamic framework is not based
on the debtor-creditor relationship.

The second principle regarding financial transactions in Islam is that there should not be any reward
without taking a risk. This principle is applicable to both labor and capital. As no payment is allowed
for labor, unless it is applied to work, there is no reward for capital unless it is exposed to business
risk. Thus, financial intermediation in an Islamic framework has been developed on the basis of the
above two principles. Consequently financial relationships in Islam have been participatory in nature.
Several theorists suggest that commercial banking in an interest-free system should be organized on
the principle of profit and loss sharing. The institution of interest is thus replaced by a principle of
participation in profit and loss.

That means a fixed rate of interest is replaced by a variable rate of
return based on real economic activities. The distinct characteristics which provide Islamic banking
with its main points of departure from the traditional interest-based commercial banking system are:
(a) the Islamic banking system is essentially a profit and loss sharing system and not merely an
interest (Riba) banking system; and (b) investment (loans and advances in the Conventional sense)
under this system of banking must serve simultaneously both the benefit to the investor and the
benefit of the local community as well.

The financial relationship as pointed out above is referred to
in Islamic jurisprudence as Mudaraba.



For the interest of the readers, the distinguishing features of the conventional banking and Islamic
banking are shown in terms of a box diagram as shown below:
Conventional Banks Islamic Banks
1. The functions and operating modes of
conventional banks are based on manmade
principles.
1. The functions and operating modes of Islamic
banks are based on the principles of Islamic
Shariah.
2. The investor is assured of a predetermined rate
of interest.
2. In contrast, it promotes risk sharing between
provider of capital (investor) and the user of funds
(entrepreneur).
3. It aims at maximizing profit without any
restriction.
3. It also aims at maximizing profit but subject to
Shariah restrictions.
4. It does not deal with Zakat. 4. In the modern Islamic banking system, it has
become one of the service-oriented functions of
the Islamic banks to collect and distribute Zakat.
5. Leading money and getting it back with interest
is the fundamental function of the conventional
banks.
5. Participation in partnership business is the
fundamental function of the Islamic banks.
6. Its scope of activities is narrower when
compared with an Islamic bank.
6. Its scope of activities is wider when compared
with a conventional bank. It is, in effect, a multi-
purpose institution.
7. It can charge additional money (compound rate
of interest) in case of defaulters.
7. The Islamic banks have no provision to charge
any extra money from the defaulters.
8. In it very often, banks own interest becomes
prominent. It makes no effort to ensure growth
with equity.
8. It gives due importance to the public interest.
Its ultimate aim is to ensure growth with equity.
9. For interest-based commercial banks, borrowing
from the money market is relatively easier.
9. For the Islamic banks, it is comparatively
difficult to borrow money from the money market.
10. Since income from the advances is fixed, it
gives little importance to developing expertise in
project appraisal and evaluations.
10. Since it shares profit and loss, the Islamic
banks pay greater attention to developing project
appraisal and evaluations.

11. The conventional banks give greater emphasis
on credit-worthiness of the clients.
11. The Islamic banks, on the other hand, give
greater emphasis on the viability of the projects.
12. The status of a conventional bank, in relation to
its clients, is that of creditor and debtors.
12. The status of Islamic bank in relation to its
clients is that of partners, investors and trader.


2.6 History of IBBL
Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply
committed to Islamic way of life as enshrined in the Holy Quran and the Sunnah. Naturally, it remains
a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of
Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983 as a public company
with limited liability under the companies Act 1913. It is the true reflection of this inner urge of its
people, which started functioning with effect from March 30, 1983. This bank is the first of its kind in
Southeast Asia. It is committed to conduct all banking and investment activities on the basis of
interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a
new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh
for doing their banking transactions in line with what is prescribed by Islam. With the active co-
operation and participation of Islamic Development Bank (IDB) and some other Islamic banks,
financial institutions, government bodies and eminent personalities of the Middle East and the gulf
countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private
commercial bank in Bangladesh.
The bank was formally inaugurated on the August 12, 1983. The banks corporate headquarter is
housed in its own 18-storied modern building at 40, Dilkusha Commercial Area, Dhaka.
2.7 Mission
To establish Islamic Banking through the introduction of welfare oriented banking system and also
ensure equity and justice in the field of all economic activities, achieve balanced growth and
equitable development through diversified investment operations particularly in the priority sectors
and less developed areas of the country and to encourage socio-economic uplift and financial
services to the low-income community particularly in the rural areas.
2.8 Vision
Our vision is to always strive to achieve superior financial performance, be considered a leading
Islamic Bank by reputation and performance.
Their goal is to establish and maintain the modern banking techniques, to ensure the
soundness and development of the financial system based on Islamic principles and to
become the strong and efficient organization with highly motivated professionals, working
for the benefit of people, based upon accountability, transparency and integrity in order to
ensure stability of financial systems.
They will try to encourage savings in the form of direct investment.

They will also try to encourage investment particularly in projects which are more likely to
lead to higher employment.
2.9 Shariah Council of IBBL:
Profile of Council Members:
The Shariah Council of Islamic Bank generally consists of experts from the following four areas:
1. Fuqaha: Persons representing this group must be well versed in the Quran, Sunnah and fully
conversant with the opinion of all schools of islami thought and Islami law and jurisprudence. They
must view Islam as a total way of life and a living religion.
2. Banker: There must be a member who is fully conversant with banking law and practices and has
practical experiences in Banking business including foreign trade.
3. Economist: A member from this group need not necessarily be an Islami economist to start with.
But if he is an Islami Economist it is an added advantage. What is important is that he must be really
proficient in modern economies with an in depth study of the community, which a bank is going to
solve. He must have up to date knowledge in the development of the contemporary world.
4. Lawyer: A member representing this group should be a successful practitioner lawyer. He must be
proficient in commercial law including company law. In consultation with the Fuqaha and Economist
members of the council, he should be able to draft such innovating contracts, which will have the
sanction of Islami principles and a banking law of the land.
2.10 Objectives of Shariah Council:
The functions of the council are to offer views and opinions on matters related to the bank from time
to time. The council may require any paper document from the bank and examine the same to see
whether it is according to see whether it is according to Islamic principles.
The shariah council assists the Board of Directors by advising them on matters related to shariah.
The opinion of the majority of members is taken as the opinion of the council provided that the said
opinion is supported by at least three Muftis of the council.
The council maintains its secretariat and a well-equipped library as the Head Office of the bank where
it keeps proper records of all of its proceedings and decisions.
The council elects a chairman and a secretary from amongst them. The chairman will normally
preside over the meetings. In his absence the members present elect one of them to preside over the
meetings.

The council may whenever it thinks necessary, constitutes a subcommittee to help the council.
The council issues Shariah Certificate in the Annual Report of the bank.
2.11 Membership of different organization:
Bangladesh Institution of Bank Management (BIBM).
The Institution of Bankers Bangladesh (IBB).
Bangladesh Association of Banks (BAB).
Bangladesh Foreign Exchange Dealers' Association (BAFEDA).
Central Shariah Board for Islamic Banks of Bangladesh.
International Chamber of Commerce- Bangladesh.
2.12 Special features of the IBBL:
Islami Bank Bangladesh Limited
(IBBL) was incorporated on13.03.1983 as
a public company with limited liability
under the companies act, 1913. The bank
started functioning with effect from
30.03.1983 as the first Shariah based
interest-free bank in South-East Asia.
The bank is committed to run all its
activities as per Islamic Shariah. IBBL
through its steady progress and continuous

success has, by now, earned the reputation
of being one of the leading private sector
banks of the country. The distinguishing
features of IBBL are as under:
All its activities are conducted on
interest-free system according to Islamic
Shariah.
Investment is made through different
modes permitted under Islamic Shariah.
Investment income of the bank is
shared with the Mudaraba depositors
according to a ratio to ensure a reasonably
fair rate of return on their deposits.
Its aims are to introduce a welfare-
oriented banking system and also to

establish equity and justice in the field of
all economic activities.
It extends Socio-economic and
financial services to the poor, helpless and
low-income group of the people for their
economic upliftment particularly in the
rural areas.
It plays a vital role in human resource
development and employment generation
particularly for the unemployed youths.
Its aim is to achieve balance growth &
equitable development of the country
through diversified investment operations
particularly in the priority sectors and in
the less developed areas.


2.13 Strategic Objectives:
To ensure customers' satisfaction.
To ensure welfare oriented banking.
To establish a set of managerial succession and adopting technological changes to ensure
successful development of an Islamic Bank as a stable financial institution.
To prioritize the clients welfare.
To emerge as a healthier & stronger bank at the top of the banking sector and continue stable
positions in ratings, based on the volume of quality assets.
To ensure diversification by Sector, Size, Economic purpose & geographical location wise
Investment and expansion need based Retail and SME/Women entrepreneur financing.
To invest in the thrust and priority sectors of the economy.
To strive hard to become a employer of choice and nurturing & developing talent in a
performance-driven culture.
To pay more importance in human resources as well as financial capital.
To ensure lucrative career path, attractive facilities and excellent working environment.
To ensure zero tolerance on negligence in compliance issues both shariah and regulatory
issues.
To train & develop human resources continuously & provide adequate logistics to satisfy
customers need.
To be excellent in serving the cause of least developed community and area.
To motivate team members to take the ownership of every job.
To ensure development of devoted and satisfied human resources.
To encourage sound and pro-active future generation.
To achieve global standard.
To strengthen corporate culture.
To ensure Corporate Social Responsibilities (CSR) through all activities.
To promote using solar energy and green banking culture and ecological balancing.
2.14 Core Values :
Trust in Almighty Allah
Strict observance of Islamic Shariah
Highest standard of Honesty, Integrity & Morale
Welfare Banking
Equity and Justice
Environmental Consciousness
Personalized Service

Adoption of Changed Technology
Proper Delegation, Transparency & Accountability
2.15 Commitments:
To Shariah
To the Regulators
To the Shareholders
To the Community
To the Customers
To the Employees
To other stakeholders
To Environment
2.16 Aims and objectives:
To conduct interest-free banking.
To establish participatory banking instead of banking on debtor-creditor
relationship.
To invest on profit and risk sharing basis.
To accept deposits on Mudaraba & Al-Wadeah basis.
To establish a welfare-oriented banking system.
To extend co-operation to the poor, the helpless and the low-income group for
their economic enlistment.
To play a vital role in human development and employment generation.
To contribute towards balanced growth and development of the country
through investment operations particularly in the less developed areas.
To contribute in achieving the ultimate goal of Islamic economic systems
To establish a well-balanced economic
system.



2.17 Present programs of the organization:








2.18 Product & Services:
Main product & services of IBBL are as follows:
a) Deposit Schemes
b) Investment Modes
c) Special Scheme
e) ATM Services
f) Special Services
g) Foreign Exchange Business
2.18.1 Deposit Schemes:
Islami Bank Bangladesh limited offers to open the following account to the depositors:
I) Al-Wadiah Current Account
ii) Mudaraba Savings Account
iii) Mudaraba Term Deposit (3 months/6
months/12 months/24 months/36 months)

Islami Bank Bangladesh Ltd.
Foreign Exchange General Banking Investment Deposit Collection

iv) Mudaraba Special Notice Account
v) Mudaraba Special Savings (Pension)
Account (5 years to 10 years)
vi) Mudaraba Haji Savings Account (1 year to
25 years)
vii) Mudaraba Savings Bond Scheme (5 years
to 8 years)
viii) Mudaraba Foreign Currency Deposit Scheme
ix) Mudaraba Waqf Cash Deposit Account
x) Mudaraba Monthly Profit Deposit Scheme (3 years to 5 years)
xi) Mudaraba Muhor Savings Deposit Scheme
2.18.2 Investment Modes:
IBBL invests its money in various sectors of
the economy through different modes
permitted by Shariah and approved by
Bangladesh Bank. The modes of investment
are as follows:
i) Bai- Mechanism

a) Bai-Murabaha
b) Bai-Muajjal
c) Bai-Salam
ii) Ijara Mechanism
a) Hire Purchase
b) Hire Purchase under Shirkatul Melk
iii) Share Mechanism
a) Mudaraba
b) Musharaka
2.18.3 Special Scheme:
Islami Bank Bangladesh Ltd. being welfare oriented institution has now designed and implemented
investment schemes keeping in view the needs of different sectors and various sections of people for
their socio-economic uplift and to improve their quality of life. The special scheme is as follows:
i) Household Durable Scheme
ii) Housing Investment Scheme
iii) Real Estate Investment Program
iv) Transport Investment Program
v) Car Investment Program
vi) Investment Scheme for Doctors
vii) Small Business Investment Scheme
viii) Agriculture Implements Investment Scheme
ix) Micro Industries Investment Scheme
x) Mirpur Silk Weavers Investment Scheme
xi) Rural Development Scheme

2.18.4 ATM Services:
Automated Teller Machine (ATM) has unveiled the horizon of electronic banking of 21st Century.
Through ATM, customers can avail non-stop online teller service without going to the specific branch
of the member bank. The service is now offered by ETN and eleven member banks including Islami
Bank Bangladesh Limited.
i) Facilities
ii) Getting IBBL ATM Card
iii) Cash withdrawal Procedure
iv) Issuing Branches
v) Location of ATM Booths
vi) BTTB Bill payment Procedure
vii) IBBL Schemes-Installment payment Procedure

2.19 Functions of IBBL:
The operation of Islamic Bank Bangladesh limited can be divided into three (3) major categories:
2.19.1 General Banking:
It includes: -
a) Mobilization of deposits
b) Receipts and payment of cash.
c) Handling transfer transaction.
d) Operations of clearing house
e) Maintenance of accounts with
Bangladesh bank and other bank.
f) Collection of cheques and bill.
g) Issue and payment of Demand Draft,
telegraphic transfer and payment Order.
h) Executing customers standing
instructions.
i) Maintenance of safe deposit lockers.
j) Maintenance of internal accounts of the

bank.

While doing all the above noted work IBBL
issue cheques-book, Deposit account operating
form, SS card, Ledgers, Cash book, Deposit
account ledgers, preparation statement of
accounts, Pass book, Balance of different
accounts and calculates profits.
Islami Bank Bangladesh limited offers to open
the following account to the depositors:
1.Al-Wadiah Current Account.
2.Mudaraba Savings Account.
3.Mudaraba term deposit Account. (3 month
/ 6 month / 12 month / 36 months term)
4.Mudaraba Special notice Account
5.Mudaraba Hajj Savings Account (1 year to

25 year term)
6.Mudaraba Special savings (pension)
Account (5 year to 10 year term)
7.Mudaraba Savings bond Scheme (5 year &
8 year term)
8.Mudaraba Foreign Currency Deposit
Account.
9.Mudaraba Monthly Deposit Account.
10. Mudaraba Moharana Account.



2.19.2 Investment:
IBBL invests its money in various sectors of
the economy through different modes
permitted by shariah and approved by
Bangladesh Bank. The modes of investment
are as follows:
i) Bai- Mechanism
a) Bai-Murabaha
b) Bai-Muajjal
c) Bai-Salam
ii) Ijara Mechanism
a) Hire Purchase
b) Hire Purchase under Shirkatul Melk
iii) Share Mechanism
a) Mudaraba
b) Musharaka
2.19.3 Foreign Exchange Business:
Foreign Exchange Business plays a vital role
in providing substantial revenue in the bank

income pool. Like all modern Banks IBBL
operates in the area of the foreign Exchange
business. IBBL performs the following tasks:
a) Opening letter of credit (LC)
against commission for importing
industrial, agricultural
and other permissible items under
Islamic Shariah and Import policy.
b) Opening letter of credit on the
principle of Mudaraba sale, on the
principle of Musharaka sale and under
wage earner scheme.
c) Handling of export/import
document.
d) Negotiation of export / import
document when discrepancy occurs.

e) Financing in import under MPI
(Mudaraba Post Import)
f) Financing to export on profit or loss
sharing.
g) Handling Inward and outward
remittance.



2.20 Organizational Structure of IBBL:



2.21 Hierarchy Management of IBBL:



Executive President
Deputy Executive President
Executive Vice President
Senior Vice President
Vice President
Assistant Vice President
Senior Principle Officer
Principle Officer
Senior Officer
Officer
Probationary Officer
Assistant Officer Grade-i
Assistant Officer Grade-ii
Assistant Officer Grade-iii

2.22 Corporate Information (2013):
Financial Information: [ As on: 31 December 2013 ]
BDT (Tk.) US Dollar ($)
Authorized Capital 20,000.00 Million 257.23 Million
paid-up Capital 14,636.28 Million 188.25 Million
Equity 45,511.90 Million 385.36 Million
Reserve Fund 29,149.01Million 374.91 million
Deposits 473,140.96 Million 6,085.41 Million
Investment
(including Investment in
Shares)
474,015.95 Million 6,096.67 Million


Foreign Exchange
Business
BDT (Tk.) US Dollar ($)
Import 285,890 Million 3,677.04 Million
Export 205,269 Million 2,640.12 Million
Remittance 286,956 Million 3,690.75 Million


Organizational Information:
Chairman, Board of
Director
Prof. Abu Nasser Muhammad Abduz Zaher
Managing Director &
CEO
Mohammad Abdul Mannan
Company Secretary Abu Reza Md. Yeahia
CFO Mohammad Nesar Uddin, FCA, ACMA



Number of Zones 15
Number of Branches 286
Number of AD Branches 48
Number of ATM Booth 298
Number of Shareholders 33,686
Number of Manpower 11,381


Contact Information:
Address Head Office
Islami Bank Tower
40, Dilkusha Commercial Area
Dhaka-1000, Bangladesh
GPO Box No.23
Phone PABX (88-02-) 9563040, 9560099, 9567161,
9567162
Mobile 88-01711-435638-9
FAX 88-02-9564532, 9568634
SWIFT IBBLBDDH
E-mail info@islamibankbd.com
Web-site www.islamibankbd.com

2.23 Recognition of Performance:
As recognition of good performance IBBL won the following awards:
BBL has been selected as the only Bank from Bangladesh in top 1000 banks in the world by a
UK based century old financial magazine, 'The Banker' published the list in its July 2012
issue.
The institute of Chartered Accountants of Bangladesh (ICAB) awarded IBBL the first prize of
SARRC Anniversary Award for Corporate Governance.
South Asian Federation of Accountants (SAFA) awarded IBBL as joint Winner in the
Corporate Governance Disclosure Award-2010.
South Asian Federation of Accountants (SAFA) also awarded IBBL with Certificate of Merit
in Banking Sector in the Annual Report for the year 2010.
The Institute of Cost and Management Accountants of Bangladesh (ICMAB), awarded IBBL
as the ICMAB National Best Corporate Award-2007 (First Position, Local Bank) and ICMAB
Best Corporate Performance Award 2008 (Second Position, Private Commercial Bank).
The Institute of Chartered Accountants of Bangladesh (ICAB) awarded IBBL with 3rd
position under the catergory-1, Banking in the best published accounts and reports for the
year 2010, the Certificate of Appreciation for the year 2001 & 2010 and Certificate of Merit
for the year 2008.
The Global Finance, a reputed U.S.A. based quarterly Financial Magazine, awarded IBBL as
the best Islamic Financial Institution of the country for the years 2008, 2009, 2010 & 2011.
The Global Finance also awarded IBBL as the best bank of the country for the year 1999,
2000, 2004 and 2005.
ICICI Bank, Hong Kong, awarded IBBL as The Quality Recognition Award-2009 for U.S.
Dollar Clearing (2009).
Bankers Forum awarded IBBL as the Best Bank for Corporate Social Responsibility for 2008
and 2009.
The Bank-Bima Patrika, a Fortnightly Magazine, awarded IBBL as the Best Islami Banking
Award 2007.
Exclusive economic weekly The Industry awarded IBBL as the Best Rated Bank Award-
2010.
The Citi Bank NA awarded IBBL as the Largest Contributor in Foreign Trade Operations
in Europe- Bangladesh corridor in 2009.
The UAE Exchange awarded IBBL for mobilizing around 30% of total foreign remittance of
the country.









3.1 Investment:
Investment is the action of deploying funds with the intention and expectation that they will earn a
return for their owners of a fund can deploy it through real investment or financial investment. When
resources are spent to purchase fixed and current assets for use in a production process for trading
purpose, then it can be termed as real investment. For example, deposit of money with a bank,
purchase of Mudarabah Savings Bond or share of a company. Financial investments ultimately takes
form of real investment as it is meant for so. Since hoarding is condemned by Islam and a 2.5 percent
annual tax (Zakat) is imposed on savings, the owner of a fund, if he is unable to make real investment,
has no option but to invest his savings as a financial investment.
3.2 Islami Banking:
Islamic Banking' A banking system that is based on the principles of Islamic law (also known
Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the
sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest.
3.3 Convensional Banking:
Conventional banking is essentially based on the debtor-creditor relationship between the depositors
and the bank on the one hand, and between the borrowers and the bank on the other. Interest is
considered to be the price of credit, reflecting the opportunity cost of money.

3.4 Riba(Interest) & Profit:
Riba(Interest): The literal meaning of interest or Al-RIBA as it is used in the Arabic language
means to excess or increase. In the Islamic terminology interest means effortless profit or that profit
which comes free from compensation or that extra earning obtained that is free of exchange. Hazrat
Shah Waliullah Dehlvi a great scholar and leader has given a very concise and precise definition of
interest. He says,
"Riba` is a loan with the condition that the borrower will return to the lender more than and better
than the quantity borrowed."
Profit: A financial benefit that is realized when the amount of revenue gained from a business
activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained
goes to the business's owners, who may or may not decide to spend it on the business.


3.5 Difference between Profit vs Riba :
In Islam Riba (Interest) is strictly prohibited. Islam support business based banking where banks are
allowed to earn through profit from business. That is banks profit will not be fixed prior to business.
But Riba (Interest) is fixed whatever the business situation is. I will try to difference Riba (Interest)
against Profit and Rent.
Riba (interest) Profit
11. Excess over the principal in a loan
transaction.
1. Positive end result of business operation.

2. Unearned income 2. Has to earn by investing labour and capital.

33. Return of principal with additional amount
(interest) is ensured.

3. No such surety.
4. Pre-determined 4. Uncertain

55. Interest may repetitively be earned on a single
transaction.
5. Profit may be earned once from a single deal.

66. Prefixed cost of goods and services and
creates inflation.
6. Profit is found after deduction of all expenses from
total income. So it has no relation with inflation.

77. Interest increases money supply in the
market.
7. There is no opportunity of increasing money supply.

88. These is the opportunity of compounding

8. Close end transaction.
9. ere is no risk of erosion of capital.

9. Risk of erosion of capital is there.
110. No chance of negative end result i.e., loss. 1 10. This is every possibility of negative end result.

111. Declared Haram (prohibited) unequivocal
terms in the holy Quran.

1 11. Halal (permitted) as declared by the holy Quran.
12. Transfers assets from poor to rich. 12. Ensure equitable distribution.

3.6 Modes of investment:
Bai-Murabaha:
This mode is binding upon the Client to purchase from the Bank. The Bank sells the goods at a
higher price (Cost + Profit) to earn profit. The cost of goods sold and profit mark-up therewith
are separately and clearly be mentioned in the Bai-Murabaha agreement. After purchasing of
goods the Bank must bear the risk of goods until those are actually sold and delivered to the
Client/buyer.
Bai-muajjal:
This mode is binding upon the Client to purchase from the Bank but bank is not bound to declare the cost
of goods and profit mark-up separately to the client. Stock and availability of goods is a pre-condition for
Bai-Muajjal agreement. The responsibility of the bank is to purchase the desired goods at the
disposal of the client to acquire ownership of the same before signing the Bai- Muajjal agreement with
the client. Bank must bear the risk of goods until those are actually sold and delivered to the client/buyer.
Bai-Salam:
The terms Bai and Salam have been derived from Arabic words. The words Bai means sale and
purchase and the word Salam means Advance. Bai-Salam means advance sale and purchase.
It is a sale in which an advance payment is made by the buyer, but the delivery is delayed to an agreed
date. In the Bai-Salam, a financial transaction happens in advance in cash as a price of commodity whose
delivery will be in a future date. It means deferred is the commodity sold (debt in kind) and price of the
commodity described is to be aid immediately in advance.
Istisna'a:
Instisna'a sale is a contracting which the price is paid in advance at the time of contract and the object of
sales manufactured and delivered later A manufacturer, artist or craftsman may take orders, with or
without advance payment, to make articles himself or hire labor to do so.
The majority of the jurists consider Istisna's as one of the divisions of Salam, Therefore, It is subsumed
under the definition of Salam, But the Hanafie school of jurisprudence makes Istisna's as an independent

and distinct contract, The jurists of the Hanafie school have given various definitions to Istisna'a some of
which are "That it is a contract with a manufacturer to make the something" and It is a contract on a
commodity on liability with the provision of work" The purchasers called Mustasnia contractor and the
seller is called "sania" maker manufacturer and the thing is called 'masnooa' manufactured, built, made.
Mudaraba:
Most of investment of IBBL is formed under Mubaraba Mode. It is a form of partnership where one party
provides the funds while the other provides the expertise and management. Any profits generated are
shared between two parties on a pre-agreed basis, while capital loss is exclusively borne by the partner
providing the capital. But IBBL is an expert organization in business sector so they face less failure and if
there is any loss they can overcome it by other sector.
Musharakah:
The partners (entrepreneurs, bankers) share both capital and management of a project so that profits will
be distributed among them as per ratio, where loss is shared according to ratio of their equity
participation. Investment division is the most important for all banks. In investment division maintain all
types of investment procedures of Mirpur-10 branch and support the branch to take different types of
initiatives. So I am prepared to report mode of investment as result majority time I work in the Investment
department.
Ijarah :
The term Ijarah has been derived from the Arabic words Air and Ujrat which means consideration,
return, wages or rent. This is really the exchange value or consideration, return, wages, rent of service of
an asset. Ijarah has been defined as a contract between two parties, the Hire and Hirer where the Hirer
(lessee) enjoys or reaps a specific service or benefit against a specified consideration or rent from the
asset owned by the Hire (lessor). It is a hire agreement under which a certain asset is hired out by the Hire
to a Hirer against fixed rent or rentals for a specified period


3.7 Status of investment:
Unclassified:
These are the investment with which the bank satisfied about repayment. No doubt exists up till now
about their recovery.
Classified:
These are the loans which the bank finds overdue after the due date. The bank applies its predefined
policy and procedures, after a loan becomes classified.
Special Mention Account (SMA):
When loan installment is first missed by the borrower, the loan account is classified as a special
Mention Account (SMA). The tenure of SMA varies with the category of loans.
Sub-Standard:
If a loan is not repaid or reschedule within the SMA period, it becomes Sub- Standard loan. From this
stage the loan is treated as defaulted. Interest is treated the same way as in SMA.
Doubtful:
If a loan is not repaid r reschedule within the sub-standard period, it becomes a doubtful loan Interest
will be treated as before in this stage.
Bad and Loss:
If a loan is not repaid or reschedule within the doubtful stage, it is termed as bad and loss. Serious
doubts exist as to the recovery of such loans.


3.8 Investment Scheme of IBBL:
Under consumer financing, the Bank finances to the individuals for meeting their personal. family and
household needs. The Bank has taken up various welfare oriented investment Schemes
1. Household Durables Scheme (HDS
2. Investment Scheme for Doctors (ISD)
3. Transport Investment Scheme (TIS
4. Car Investment Scheme (CIS)
5. Small Business Investment Scheme (SBIS)
6. Micro Industries Investment Scheme (MIIS)
7. Agricultural Implement Investment Scheme (AIIS)
8. Real Estate Investment Program (REIP)
9. Real Estate Investment (Commercial & Working Capital)
10. Agricultural Investment of IBBL
11. Urban Poor Developmet Scheme
12. Woman Entrepeneur Investment Scheme










4.1 Investment:
Investment is an asset or item that is purchased with the hope that it will generate income or
appreciate in the future. In an economic sense, an investment is the purchase of goods that are not
consumed today but are used in the future to create wealth. In finance, an investment is a monetary
asset purchased with the idea that the asset will provide income in the future or appreciate and be sold
at a higher price.
4.2 Investment Management of Islami Bank Bangladesh Limited:
Investment management is a dynamic field where a certain standard of long range planning is needed
to allocation the fund in diverse field and to minimize the risk and maximizing the return on the
invested fund. Continuous supervision, monitoring and follow-up are highly required for ensuring the
timely repayment and minimizing the default. Actually the investment portfolio is not only constituted
the banks asset structure but also a vital factor of the banks success. The overall success in
investment management depends on the banks investment policy, portfolio of investment, monitoring,
supervision and follow-up of the loan and advance. Therefore, while analyzing the investment
management of Islami Bank Bangladesh Limited, it is required to analyze its investment policy,
investment procedure and quality of investment portfolio.
4.3 Investment Policy of Islami Bangladesh Bank Limited:
One of the most important ways, a bank can make sure that its investment meet organizational and
regulatory standards and they are profitable. It is important to establish an investment policy. Such a
policy gives investment management a specific guideline in making individual investment decisions
and in shaping the banks overall investment portfolio. In Islami Bank Bangladesh Limited there is
perhaps an investment policy but there is no investment written policy.
4.4 Investment Principles of Islami Bangladesh Bank Limited:
In the future, investment principles include the general guidelines of providing investment by branch
manager or investment officer. In Islami Bank Bangladesh Limited they follow the following
guideline while giving loan and advance to the client.
Investment advancement shall focus on the development and enhancement of customer
relationship. All investment extension must comply with the requirements of Banks
Memorandum and Article of Association, Banking Companys Act, Bangladesh Banks
instructions, other rules and regulation as amended from time to time.
Loans and advances shall normally be financed from customers deposit and not out of
temporary funds or borrowing from other banks.

The bank shall provide suitable investment services for the markets in which it operates.
It should be provided to those customers who can make best use of them.
The conduct and administration of the investment portfolio should contribute within defined
risk limitation for achievement of profitable growth and superior return on the bank capital.
Interest rates of various lending categories will depend on the level of risk and types of
security offered.



4.5 Investment Process of IBBL:



SELECTION OF THE
CLIENT
APPLICATION STAGE
APPRAISAL STAGE
SANCTIONING STAGE
DOCUMENTATION
STAGE
DISBURSEMENT STAGE
MONITORING &
RECOVERY STAGE

a) Selection of the client:
Here, investment taker (client) approaches to any of the branch of Islami Bank Bangladesh Limited
(IBBL). Then, he talks with the manager or respective officer (Investment). Secondly, bank considers
five Cs of the client. After successful completion of the discussion between the client and the bank,
bank selects the client for its proposed investment. It is to be noted that the client/customer must
agree with the banks rules & regulations before availing investment. Generally, bank analyses the
following five Cs of the client:
Character
Capacity
Capital
Collateral
Condition.
b) Application stage:
At this stage, the bank will collect necessary information about the prospective client. For this reason,
bank informs the prospective client to provide and/or fill duly respective information which is crucial
for the initiation of investment proposal. Generally, here, all the required documents for taking
investment have to prepare by the client himself. Documents that are necessary for getting investment
of IBBL are prescribed below:
Trade License photocopy (for proprietorship);
Abridged pro forma income statement;
Attested copy of partnership deed (for partnership business);
Prior three (03) years audited balance sheet (for joint stock company);
Prior three (03) years business transactions statement for the musharaka/mudaraba
investment;
Abridged pro forma income statement for the musharaka/mudaraba investment;
Attested copy of the Memorandum of Association (MOA) & Articles of Association (AOA)
for the joint stock company;
Attested copy of the Tax Identification Number (TIN)- including final assessment;
Tenders of the proposed assets (in case of HPSM);
Detailed summary of the sundry debtors and creditors (including both time & schedule);
Summary of the personal movable & immovable assets; and others.



c) Appraisal stage:
At this stage, the bank evaluates the client and his/her business. It is the most important stage.
Because, on the basis of this stage, bank usually goes for sanctioning the proposed investment
limit/proposal. If anything goes wrong here, the bank suddenly stops to make payment of investment.
In order to appraise the client, Islami Bank Bangladesh Limited (IBBL), provides a standard
F-167B Form (Appraisal Report) to the client for gathering all the information. However, the
following contents are presented from that appraisal report:
Companys/Clients Information.
Owners Information.
List of Partners/Directors.
Purpose of Investment/Facilities.
Previous Bankers Information.
Business/Industry Analysis.
Asset-Liability position of the client as per Audited Balance Sheet.
Working Capital Assessment.
Risk Grade.
Insurance Coverage.
Audit Observation.
Security Analysis.
d) Sanctioning stage:
At this stage, the bank officially approves the investment proposal of the respective client. In this case
client receives banks sanction letter. Islami Bank Bangladesh Limited (IBBL),s sanction letter
contains the following elements:
Investment Limit in million.
Mode & amount of investment.
Purpose of investment.
Period of investment.
Rate of return.
Securities
e) Documentation stage:
At this stage, usually the bank analyses whether required documents are in order. In the
documentation stage, Islami Bank Bangladesh Limited (IBBL) checks the following documents of the
client:
Tax Payment Certificate.
Stock Report.

Trade License (renewal).
VAT certificate
Liability statement from different parties.
Receivable from different clients.
Other assets statement.
Aungykar Nama.
Three (03) years net income & business transactions.
Performance report with the bank.
Account Statement Form of the bank.
Particulars of the Proposal.
Particulars of the Properties.
Outstanding liability position of the bank.
CIB (Credit Information Bureau) Report.
f) Disbursement stage:
At this stage, bank decides to pay out money. Here, the client gets his/her desired fund or goods. It is
to be noted that before disbursement a site plan showing the exact location of each mortgage
property needs to be physically verified.
g) Monitoring & Recovery stage:
At this final stage of investment processing of the Islami Bank Bangladesh Limited (IBBL), bank will
contact with the client continually, for example- bank can obtain monthly stock report from the client
in case of micro investment. Here, the bank will keep his eye on over the investment taker. If needed,
bank will physically verify the clients operations. Also if bank feels that anything is going wrong
then it tries to recover its investment fund from the client.


4.6 Modes of Investment of IBBL:
When money is deposited in the IBBL, the bank, in turn, makes investments in different forms
approved by the Islamic Shariah with the intention to earn a profit. Not only a bank, but also an
individual or organization can use Islamic modes of investment to earn profits for wealth
maximization. Some popular modes of IBBLs Investment are discussed below.
Islami Bank Bangladesh Ltd. operates its investment activities mainly through 3 (three) mechanisms:
Bai Mechanism,
Share Mechanism
Hire Purchase Under shirkatul Melk


4.6.1 Bai Mechanism
Bai Murabaha
Meaning:
The terms 'Bai- Murabaha' have derived from Arabic words Bai and Ribhun. The word Bai means
purchase and sale and the words Ribhun means an agreed upon profit. Bai-Murabaha means sale on
agreed upon profit.


Definition:
Bai-Murabaha may be defined as a contract between a Buyer and a seller under which the seller sells
certain specific goods permissible under Islamic Shariah and the Law of the land to the Buyer at a
cost plus agreed profit payable on cash or on any fixed future date in lump- sum or by installments.
The profit marked-up may be fixed on lump sum or in percentage of the cost price of the goods. There
are different types of Murabaha as given bellow:
Types of Murabaha:
In respect of dealing parties Bai-Murabaha may be of two types.
1. Murabaha Adiah: Without request from buyer if the seller sells by adding purchase value with
certain profit after getting the authority is known as Murabaha Adiah.
2. Murabaha lil Amiri Bissira: With request from buyer if the seller sells by adding purchase value
with certain profit after getting the authority is known as Murabaha lil Amiri Bissira.
Important Features of Bai Murabaha:
It is permissible for the client to offer an order to purchase particular goods by the Bank dealing its
specification and committing himself to buy the same from their bank on Murabaha. i.e. Cost-plus
agreed upon profit.
It is permissible to make the promise binding upon the client to purchase from the Bank that is he is to
either satisfy the promise or to indemnify the damages caused by breaking the promise without
excuse.
It is permissible to take cash/collateral security to guarantee the implementation of the promise or to
indemnify the damages.
It is also permissible to document the debt resulting from Bai-Murabaha by a Guarantor or a mortgage
or both like any other debt is permission. Mortgage/ Cash Security may be obtained prior to the
signing of the Agreement or at the time of signing the Agreement.
Stock and availability of goods is a basic condition for signing a Bai-Murabaha agreement. Therefore,
the Bank must purchase the goods as per specification of the client to acquire ownership of the same
before signing the Bai-Murabaha agreement with the client.
After purchase of goods the Bank must bear the risk of goods until those are actually sold and
delivered to the Client, i.e., after purchase of the goods by the Bank and before selling of those on
Bai-Murabaha to the client buyer, the bank shall bear the consequences of any damages or defects,

unless there is an agreement with the client releasing the Bank of the defects that means, if the goods
are damaged, bank is liable, of the goods are defective (defect that id nor included in the release) the
bank bears the responsibility.
The bank must deliver the specified goods to the Client on specified date and at specified place of
delivery as per Contract.
The Bank shall sell the goods at a higher price (Cost +Profit) to earn profit. The cost of goods sold
and profit mark-up therewith shall separately and clearly be mentioned on the Bai- Murabaha
agreement. The profit mark-up may be mentioned in lump sum or in percentage of the purchase/cost
price of the goods. But under no circumstances, the percentage of the purchase/cost price of goods.
But under no circumstances, the percentage of the profit shall have any relation with time or
expressed in relation with time, such as per month, per annum, etc.
The price once fixed as per agreement and deferred cannot be further increased.
It is permissible for the bank to authorize any third party to buy and receive the goods on Bank's
behalf the authorization must be in a separate contract.
These features make Bai-Murabaha identical from all other modes of Islamic Investment. There are
certain steps to accomplish a deal of Bai- Murabaha as shown below.
Bai Muajjal (Deferred sale)
Meaning:
The terms "Bai" and "Muajja" have been derived from Arabic words 'Bai' and 'Ajal'. The word Bai
means purchase and sale and the word 'Ajal' means a fixed time or a fixed period. "Bai-Muajjal"
means sale for which payment is made at a future fixed date or within a fixed period. In short, it is a
sale on Credit.
Definition:
The Bai-Muajjal may be defined as a contract between a Buyer and a 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.
Bai-Muajjal is treated as a contract between the bank and the client under which the bank sells to the
client certain specific goods, purchased as per order and specification of the client at an agreed price
payable with in a fixed future date in lump sum or by fixed installments.

Thus it is a credit sale of goods by which ownership of the goods is transferred by the bank to the
client but the payment of sale price by the client is deferred for a fixed period.
It may be noted here that in case of Bai- Muajjal and Bai-Murabaha, the Islamic bank is a financier to
the client not in the sense that the bank finances the purchase of goods by the client, rather it is a
financier by deferring the receipt of the sale price of goods, it sells to the client. If the bank does not
purchase the goods or does not make any purchase agreement with seller but only makes payment of
any goods directly purchased and received by the client from the seller under Bai-Muajjal / Bai-
Murabaha agreement, that will be a remittance/ payment of the amount on behalf of the client, which
shall be nothing but a loan to the client and any profit on this amount shall be nothing but interest.
Therefore, purchase of goods by the bank should be for and on behalf of the bank and the payment of
price of goods by the bank must be made for and on behalf of the bank. If in any way the payment of
price of goods is turned in to a payment for and on behalf of the client, or it is paid to the client any
profit on it will be Riba.
There are some important features of Bai- Muajjal as given bellow:
Important Features:
It is permissible for the Client to offer an order to purchase by the bank particular goods deciding its
specification and committing him to by the same from the bank on Bai-Muajjal I.e. deferred payment
sale at fixed price.
It is permissible to make the promise binding upon the Client to purchase from the bank, i.e. he is to
either satisfy the promise or to indemnify the damages caused by breaking the promise without
excuses.
It is permissible to take cash/ collateral security to guarantee the implementation of the promise or to
indemnify the damages.
It is also permissible to document the debt resulting from Bai-Muajjal by a Guarantor, or a mortgage
or both like any other debt. Mortgage/ Guarantee/ Cash security may be obtained prior to the signing
of the Agreement or at the time of signing the Agreement.
Stock and availability of goods is a basic condition for signing a Bai- Muajjal Agreement. Therefore,
the Bank must purchase the goods as per specification of the client to acquire ownership of the same
before signing the Bai-Muajjal Agreement with the Client.
After purchase of goods the bank must bear the risk of goods until those are actually delivered to the
Client.

The Bank must deliver the specified goods to the Client on specified date and at specified place of
delivery as per contract.
The Bank may sell the goods at a higher price than the purchase price to earn profit.
The price once fixed as per agreement and deferred cannot be further increased.
The Bank may sell the goods at one agreed price, which will include both the cost price and the profit.
Unlike Bai- Murabaha, the bank may not disclose the cost price and the profit mark- up separately to
the Client.
Bai Salam (Advanced purchase)
Meaning:
The terms Bai and Salam have been derived from Arabic words. The words Bai means sale
and purchase and the word Salam means Advance. Bai-Salam means advance sale and
purchase.
Definition:
It is a sale in which an advance payment is made by the buyer, but the delivery is delayed to an agreed
date. In the Bai-Salam, a financial transaction happens in advance in cash as a price of commodity
whose delivery will be in a future date. It means deferred is the commodity sold (debt in kind) and
price of the commodity described is to be aid immediately in advance.
The Bai-Salam sales serve the interests of both parties:
1. The seller- gets in advance the money he wants in exchange of his obligation to deliver the
commodity later. He benefit from the Salam sale by covering his financial needs whether they are
personal expenses for productive activity.
2. The purchaser-heretic is the financing bank. The bank gets the commodity it is planning to trade on
in the time it decides Because the commodity becomes the liability of the seller who meet his
obligation. The bank will also benefit from the cheap prices for usually salam sale is cheaper than a
cash sale. This way the bank will be secured against the fluctuations of prices.
The bank can sell on parallel salam commodity in the same kind as it has previously purchased on
first salam without making one contract depend on the other. The bank also has the option of waiting
to receive the commodity and then sell it for cash or deferred payment.


Important feature:
Bai-Salam is a mode of finance allowed by Islamic Shariah in which commodity or product can be
sold without having the said commodity or product either in existence or physical possession of the
seller. If the commodities are ready for sale Bai-Salam is not allowed in Shariah. Then the sale may
be done either in Bai-Murabaha or Bai-Muajjal mode of finance.
Istisnaa:
Definition:
Istisna'a sale is a contracting which the price is paid in advance at the time of contract and the object
of sales manufactured and delivered later A manufacturer, artist or craftsman may take orders, with or
without advance payment, to make articles himself or hire labor to do so.
The majority of the jurists consider Istisna's as one of the divisions of Salam, Therefore, It is
subsumed under the definition of Salam, But the Hanafie school of jurisprudence makes Istisna'a as an
independent and distinct contract, The jurists of the Hanafie school have given various definitions to
Istisna'a some of which are "That it is a contract with a manufacturer to make the something" and It is
a contract on a commodity on liability with the provision of work" The purchasers called Mustasnia
contractor and the seller is called "sania" maker manufacturer and the thing is called 'masnooa'
manufactured, built, made.
4.6.2 Share Mechanism
Mudaraba
Definition:
It refers to a contact between two parties in which one party supplies capital to the other party for the
carrying on of some trade on the condition that the resulting profits be distributed in a mutually agreed
proportion while all loss is borne by the provider of the capital. Mudarabah is also known as Qirad
and Muqaradah
Mudaraba is a contract of those who have capital with those who have expertise Where the first party
provides capital and the other party provides the expertise with the purpose of earring "halal"
(Lawful) profit which will be devised between them in ration agreed upon. This mode serves the
business interest of the capital owner and the mudharib (agent).
The capital owner may not have the opportunity or the experience to make turn over capital and trade
with it. On the other hand, the agent (the Mubarib)

May not have the adequate capital to put to materialize his experience, such lackings of both parties
bring them into a contract of Mudarabah. It had certain steps to be followed. The following is the
steps of the Mudarabah contract.
Musharaka (Partnership)
Meaning and Definition:
The word Musharaka" has been derived from Arabic words Sharikat" or Shirkat". In Arabic
Sharikat and Shirkat means partnership or sharing. Thus the word "Musharaka" means a partnership
between two or more persons or institutions.
Musharaka means a partnership established between two or more persons or institutions for purpose
of a commercial venture participated both in the capital and management where the profit may be
shared between the partners as per agreed upon ratio and the loss, if any is to be borne by the partners
at per capital equity ratio.

In this case of Investment, "Musharaka" meaning a partnership between the Bank and the Client for a
particular business in which both the Bank and the Client provide capital at an agreed upon ratio and
manage the business jointly. Share the profit as per agreed upon ratio and bear the loss, if any in
proportion to their respective equity.
Bank may move itself with the selected Client for conducting any Shariah permissible business under
Musharaka mode.
Features of Musharaka:
Bank and client both supply capital unequally/equally.
Profit is divided as per agreement and actual loss is divided as per equity.
Client will maintain all accounts properly bank or its agent may verify or audit it.
Banks can advice the client in such a business in respect of the businesses.
All partners can participate in the management of the business and can work for it.
The liability of the partner is normally unlimited. Therefore, all the liabilities shall be borne
proportionately by all the partners.



4.6.3 Ijara Mechanism
Hire Purchase Sirkarul Meelk (HPSM): HPSM is a combination of three Inv mechanisms:
i. Sirkatul Meelk (SM)
ii. Leasing (H: Hiring)
iii. Bai(P: purchase)
Inv item or asset to be build/ purchased, must be capable to generate rent. It is widely practice by the
bank in real estate, transport, industrial project finance etc.
SM (Sirkatul Meelk- Partnership): It is a contract of partnership in ownership of an asset having
capability to produce service/ rent through purchasing/ building the inv item/ asset by deploing equal/
unequal capital by the partner.
H (Hiring): One partner (Hirer) hires the part/ share of asset of other partner (Hiree) against
payment of rent there against to the hiree in installment basis.
P (purchase): One partner (Hirer:Inv client) promise to purchase the share of other partner
(Hiree:Bank) against payment of share value of hiree part by part for acquiring ultimate/ 100% owner
of the subject asset at the end of the contract period.










5.1. Year Wise Deposits & growth rate of deposit of Islami Bank Bangladesh Limited:

Year 2009 2010 2011 2012 2013
Amount (TK in
Millions)
202115 244292 291,935 341853 417844
Gtowrh wore )%( 20.45 % 20.87 % 19.5 % 17.10 % 22.23 %
Table 5.1: Amount of Deposit and Deposite growth rate of IBBL
source: Annual Report of IBBL (2009-2013)

Figure 5.1: Year wise Amount of Deposit of IBBL

Figure 5.2: Year wise Deposit Growth Rate of IBBL

Interpretation: There is an increasing trend of deposit of IBBL. Ftom rhe obove chotr we con see
rhor rhe lowesr deposir wos TK 2,02,115 millon in 2009 ond rhe highesr omounr wos Tk 4,17,844
million in 2013. This increasing trend of deposit was mainly due to expansion of branches and better
customer services. Howetvet, The gtowrh tore of deposir of IBBL wete flucruoring.


202115
244292
291935
341853
417844
0
200000
400000
600000
2009 2010 2011 2012 2013 (
I
n

M
i
l
l
i
o
n

T
A
K
A
)

Deposits
Trend of Deposits
20.45%
20.87%
19.50%
17.10%
22.23%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2009 2010 2011 2012 2013
Growth Rate of Year Wise Deposit
G
r
o
w
t
h

R
a
t
e

I
n

P
e
r
c
e
n
t
a
g
e

Years


5.2: Year Wise Investment to Deposit Ratio Analysis:
Invesrmenr ro deposir torio= )Torol Invesrmenr / Torol Deposir( * 100
Investment to Deposit Ratio:

Invesrmenr ro deposir torio meosutes rhe potrion of deposir used fot invesrmenr in loon ptoducrs.The
mote rhe torio rhe mote rhe bonk is using irs deposir os invesrmenr.
reot worio
2009 89.08 %
2010 87.85 %
2011 90.17 %
2012 87.29 %
2013 85.18 %

Table 5.2 : Investment to Deposit Ratio of IBBL
Source: Annual Report of IBBL (2009-2013)



Figure 5.3: Investment to Deposit Ratio of IBBL
Interpretation: The graph shows that investment to deposit torio hos flucurored ovet rhe yeots.
Howevet, ofret 2011 rhe torio hos decteosed ovet rhe yeots. In rhe gtoph we hove seen rhor rhe torio
hos decteosed ftom 90.17% in 2011 ro 85.18% in 2013. This meons IBBL is decteosing rhe tore of
Invesrmenr ovet irs deposirs. As o tesulr ir teroins mote obiliry ro sorisfy irs clienrs demond. Ir is
teolly o good indicorion fot rhe Bonk.

89.08%
87.85%
90.17%
87.29%
85.18%
82.00%
83.00%
84.00%
85.00%
86.00%
87.00%
88.00%
89.00%
90.00%
91.00%
2009 2010 2011 2012 2013
Investment to Deposit Ratio
Investment to Deposit
Ratio

5.3 Year Wise Investment & Growth Rate:

Year 2009 2010 2011 2012 2013
Amount(TK in Millions) 1,80,054 2,14,616

2,63,225 3,05,841 3,72,921
Gtowrh wore )%( 24.24 % 19.20 %

22.65 % 16.19 % 21.93 %
Table: 5.3: Year Wise Investments
source: Annual Report of IBBL (2009-2013)

Figure-5.4: Year Wise Investments of IBBL

Figure- 5.5 : Investment Growth Rate of IBBL

Interpretation: The graph shows that Investment during the year 2009 to 2013 has increased over
the years. The investment has increased from taka in Millions 180054 ro 3 , 72,921 On the other hand
from the second graph we can see that its growth rate was increasing from the year 2012 to 2013.

180054
214616
263225
305841
372921
0
100000
200000
300000
400000
2009 2010 2011 2012 2013
Trend of Investment
Trend of Investment
24.24%
19.20%
22.65%
16.19%
21.93%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2009 2010 2011 2012 2013
Growth Rate Investment
Growth Rate Investment


5.4. Modes Wise Investment in 2013:

Mode Amounr in Million Toko % of rorol invesrmenr
Mutoboho 2,21,632 59.43 %
Musotoko 13,719 3.68 %
Boi - molom 4,532 1.22 %
HSmM 96,056 25.76 %
Boi - Muojjol 18,295 4.91 %
Bill Sutchosed & Nogoriorion 9,531 2.56 %
duotd 9,156 2.46 %
Mudaraba 0 0.00%

Table: 5.4 Year Wise Trend of Mode Wise Investment in 2013
Source: Annual Report (2013)

Figure-5.6: Mode Wise Investment of IBBL in 2013 (in Million Taka and Percentage)
Interpretation: From the above graph we can see that in rhe yeot 2013, IBBL invesred rheit
moximum potrion in Boi Mutoboho mode )59%( which is omounr of TK 2, 21,632 million rhor
meons sole fot which poymenr is mode or o furute fixed dore ot wirhin o fixed petiod in short, it is o
sole on ctedir. The second moximum potrion of invesrmenr is in HSmM mode which omounr in TK
96,056 million & in petcenroge is 26%. The bonk invesr in orhet modes or lowet petcenroge. The
lowesr potrion wos invesred in Boi- molom or 1%.
2,21,632
59%
13,719
4%
4,532
1%
96,056
26%
18,295
5%
9,531
3%
9,156
2%
Mudaraba, -
, 0%
Mode Wise Investment in 2013
Murabaha
Musaraka
Bai-Salam
HPSM
Bai-Muajjal
Bill Purchased &
Negotiation
Quard
Mudaraba

5.5. Trend of Mode Wise Investment from 2009 to 2013:

5.5.1.1 Investment in Bai Murabaha:

Year 2009 2010 2011 2012 2013
Investment in Murabaha (Million tk.) 96,2,17 117180 146135 177136 221632
Percentage of Total Investment 53.44% 54.60% 55.52% 57.92% 59.43%
Table: 5.5 Year Wise Investment in Bai Murabaha
Source: Annual Report (2009-2013)


Figure-5.7: Year Wise Investment in Bai Murabaha (Million Tk)


Figure-5.8 Percentage of Investment in Murabaha

Interpretation: The graph shows an upward trend in investment under Murabaha. The investment
under Murabaha has increased over the years. The Murabaha investment as a percentage of total
investment has also increased over the years. The IBBL invested 53.44% of total investment under
Murabaha in 2009 and in 2013 it was 59.43%.
96217
117180
146135
177136
221632
0
50000
100000
150000
200000
250000
2009 2010 2011 2012 2013
Investment in Bai Murabaha
Investment in Bai Murabaha
53.44%
54.60%
55.52%
57.92%
59.43%
50.00%
52.00%
54.00%
56.00%
58.00%
60.00%
2009 2010 2011 2012 2013
Investment in Bai Murabaha
Investment in Bai Murabaha

5.5.1.2 Investment in HPSM:

Year 2009 2010 2011 2012 2013
Investment in HPSM (Million tk.) 63159 73871 80093 89070 96056
Percentage of Total Investment 35.08% 34.42% 30.42% 29.12% 25.76%
Table: 5.6 Year Wise Investment in HPSM
Source: Annual Report (2009-2013)

Figure-5.9 Year Wise Investment in HPSM (Million tk.)

Figure-5.10: Percentage of Investment in HPSM

Interpretation: The graph shows an upward trend in investment under HPSM but the Percentage of
investment in HPSM of total investment has decreased. The IBBL invested 35.08% of total
investment under HPSM in 2009 and 25.7% in 2013.



63159
73871
80093
89070
96056
0
20000
40000
60000
80000
100000
120000
2009 2010 2011 2012 2013
Investment in HPSM
Investment in HPSM
35.08%
34.42%
30.42%
29.12%
25.76%
0.00%
10.00%
20.00%
30.00%
40.00%
2009 2010 2011 2012 2013
Percentage of Investment in HPSM
Trend of Percentage of Total
Investment in HPSM

5.5.1.3 Investment in Bai Mujjal:

Year 2009 2010 2011 2012 2013
Investment in Mujjal (Million tk.) 6550 7318 12393 15912 18296
Percentage of Total Investment 3.64% 3.41% 4.71% 5.20% 4.91%
Table: 5.7: Year Wise Investment in Bai Mujjal
Source: Annual Report (2009-2013)

Figure-5.11: Amount of Investment in Bai Mujjal

Figure-5.12: Percentage of Investment in Bai Mujjal

Interpretation: The graph shows that there is an increasing trend in investment under Bai Mujjal
but the Percentage of Investment in Bai Mujjal of total investment is fluctuating over the years. The
Bai Mujjal investment as a percentage of total investment has also fluctuated over the years. The
IBBL invested 3.64% of total investment under Bai Mujjal in 2009 and in 2013 it was 4.91%.

6550
7318
12393
15912
18295
0
5000
10000
15000
20000
2009 2010 2011 2012 2013
(
I
n

m
i
l
l
i
o
n

T
a
k
a
)

Year
Investment in Bai Mujjal
Trend of Investment in Bai
Mujjal
3.64%
3.41%
4.71%
5.20%
4.91%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2009 2010 2011 2012 2013
Percentage of Investment in Bai Mujjal
Trend of Percentage of Total
Investment in Bai Mujjal

5.5.1.4 Investment in Bill Purchase & Nego:

Year 2009 2010 2011 2012 2013
Investment in Bill Purchase & Nego
(Million tk.)
10223 11289 5141 2744 9531
Percentage of Total Investment 5.68% 5.26% 1.95% 0.91% 2.56%
Table: 5.8: Year Wise Investment in Bill Purchase & Nego
Source: Annual Report (2009-2013)

Figure-5.13: Amount of Investment in Bill Purchase & Nego

Figure-5.14: Percentage of Investment in Bill Purchase & Nego

Interpretation: The graph shows a fluctuating trend in investment under Bill Purchase & Nego. The
investment under Bill Purchase & Nego has decreased from 2009 to 2012. But as a percentage of total
investment in the year 2013 it has been increased from 0.91% to 2.56%.


10223
11289
5141
2744
9531
0
5000
10000
15000
2009 2010 2011 2012 2013
(
I
n

m
i
l
l
i
o
n

T
a
k
a
)

Year
Investment in Bill Purchase & Nego
Trend of Investment in Bill
Purchase & Nego
5.68%
5.26%
1.95%
0.91%
2.56%
0.00%
2.00%
4.00%
6.00%
2009 2010 2011 2012 2013
Percentage of Investment in Bill Purchase &
Nego
Trend of Percentage of Total
Investment in Bill Purchase
& Nego

5.5.1.5 Investment in Quard E Hasana:

Year 2009 2010 2011 2012 2013
Investment in Quard E Hasana
(Million tk.)
2151 2833 2095 5614 9156
Percentage of Total Investment 1.19 1.32% 0.80% 1.83% 2.46%
Table: 5.9 Year Wise Investment in Quard E Hasana
Source: Annual Report (2009-2013)

Figure-5.15: Amount of Investment in Quard E Hasana

Figure-5.16 : Percentage of Investment in Quard E Hasana

Interpretation: The graph shows fluctuating trend in investment under Quard E Hasana. The
investment under Quard E Hasana has fluctuated over the years. However the Quard E Hasana
investment as a percentage of total investment has increased 2012 to 2013 years. The IBBL as a
percentage invested 1.19% of total investment under Quard E Hasana in 2009 and in 2013 it was
2.46%.
2151
2833
2095
5614
9156
0
5000
10000
2009 2010 2011 2012 2013
(
I
n

m
i
l
l
i
o
n

T
a
k
a
)

Year
Investment in Quard E Hasana
Trend of Investment in
Quard E Hasana
1.19%
1.32%
0.80%
1.83%
2.46%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
2009 2010 2011 2012 2013
Percentage of Investment in Quard E Hasana
Trend of Percentage of Total
Investment in Quard E
Hasana

5.5.1.6 Investment in Bai Salam:

Year 2009 2010 2011 2012 2013
Investment in Bai Salam (Million
tk.)
1719 2082 3624 3528 4532
Percentage of Total Investment 0.95% 0.97% 1.38% 1.15% 1.22%
Table: 5.10: Year Wise Investment in Bai Salam
Source: Annual Report (2009-2013)

Figure-5.17: Amount of Investment in Bai Salam

Figure-5.18: Percentage of Investment in Bai Salam

Interpretation: The graph shows upward trend in investment under Bai Salam. The Investment
under Bai Salam has increased over the years. The Bai Salam investment as a percentage of total
investment has decreased 2012 year. The IBBL invested 0.95% of total investment under Bai Salam
in 2009 and in 2013 it was 1.22%.


1719
2082
3624
3528
4532
0
1000
2000
3000
4000
5000
2009 2010 2011 2012 2013
(
I
n

m
i
l
l
i
o
n

T
a
k
a
)

Year
Investment in Bai Salam
Trend of Investment in Bai
Salam
0.95%
0.97%
1.38%
1.15%
1.22%
0.00%
0.50%
1.00%
1.50%
2009 2010 2011 2012 2013
Percentage of Total Investment in Bai Salam
Trend of Percentage of Total
Investment in Bai Salam

5.5.1.7 Investment in Mudaraba:

Year 2009 2010 2011 2012 2013
Investment in Mudaraba (Million tk.) - 0 1500 2266 -
Percentage of Total Investment - 0.00% 0.57% 0.74% 0.00%
Table: 5.11: Year Wise Investment in Mudaraba
Source: Annual Report (2009-2013)

Figure-5.19: Amount of Investment in Mudaraba

Figure-5.20: Percentage of Investment in Mudaraba

Interpretation: The graph shows an upward trend in investment under Mudaraba. The investment
under Mudaraba investment was 0% from 2009 to 2010. The Mudaraba investment as a percentage of
total investment has fluctuated from 2011 to 2013 .The IBBL invested 0.57% of total investment
under Mudaraba has increased in 2011 and in 2012 it was 0.74%. But 2013 IBBLs Percentage in
Investment in Mudaraba was 0.00%.



0 0
1500
2266
0
0
1000
2000
3000
2009 2010 2011 2012 2013
(
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)

Year
Investment in Mudaraba
Trend of Investment in
Mudaraba
0.00% 0.00%
0.57%
0.74%
0.00% 0.00%
0.20%
0.40%
0.60%
0.80%
2009 2010 2011 2012 2013
Percentage of Total Investment in Mudaraba
Trend of Percentage of Total
Investment in Mudaraba

5.5.1.8 Investment in Musharaka:

Year 2009 2010 2011 2012 2013
Investment in Musharaka (Million
tk.)
35 43 12244 9571 13719
Percentage of Total Investment 0.02% 0.02% 4.65% 3.13% 3.68%
Table: 5.12: Year Wise Investment in Musharaka
Source: Annual Report (2009-2013)

Figure5.21: Amount of Investment in Musharaka

Figure-5.22: Percentage of Investment in Musharaka

Interpretation: The graph shows an upward trend in investment under Musharaka. The graph
shows fluctuating trend in investment under Musharaka. The investment under Musharaka was 0% in
2009. However; the Musharaka investment as a percentage of total investment has fluctuated from
2010 to 2013.Investment in Musharaka mode was 0.02%and in 2013 it was 3.68%.

35 43
12244
9571
13719
0
5000
10000
15000
2009 2010 2011 2012 2013
(
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)

Year
Investment in Musharaka
Trend of Investment in
Musharaka
0.02% 0.02%
4.65%
3.13%
3.68%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2009 2010 2011 2012 2013
Percentage of Investment in Musharaka
Trend of Percentage of Total
Investment in Musharaka

5.6 Sector Wise Investment in 2013:

Sector Industry Commerce Real
Estate
Agriculture Transport SME
Amount (TK in
Millions)
108930 44488 23231 20992 6887 168393
In percentage 29.21% 11.26% 5.46% 5.78% 1.90% 46.39%
Table: 5.13: Sector Wise Investment in 2013
Source: Annual Report (2013)


Figure-5.23: mecrot Wise Invesrmenr of IBBL in 2013 )in Million Toko ond Setcenroge(

Interpretation: From above graph we can see that in 2013,IBBL invesred rheit moximum omounr in
rhe secrot of mME TK 1,68,393 million which is 45% of rorol invesrmenr ond compotorively vety poot
invesrmenr in weol Esrore,Agticulrute & Ttonspotr Tk 23,231 million)6%(, Tk 20,992 million)6%( &
TK 6,887 million )2%( tespecrively.




108,930
29%
44,488
12%
23,231
6%
20,992
6%
6,887
2%
168,393
45%
Sector Wise Investment in 2013
Industrial
Commercial
Real Estate
Agriculture
Transport
SME

5.6.1. Trend of some sector wise investment of IBBL:

5.6.1.1. Industry Investment:

Year 2009 2010 2011 2012 2013
Investment in Industry (Million tk.) 99233 101020 113979 122270 108930
Percentage of Total Investment 55.11% 47.07% 43.30% 39.98% 29.21%
Table: 5.14: Year Wise Trend of some Industry investment of IBBL
Source: Annual Report (2009-2013)

Figure-5.24: Amount of Investment in Industry

Figure-5.25: Percentage of Investment in Industry

Interpretation: The graph shows an upward trend in investment in Industry. The Industry
investment has increased over the years. However, an investment in Industry as percentage of total
investment has decreased over the years. The investment in Industry as percentage of total investment
has decreased from 55.11% in 2009 to 29.21% in 2013.
99233
101020
113979
122270
108930
0
20000
40000
60000
80000
100000
120000
140000
2009 2010 2011 2012 2013
(
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)

Investment in Industry
Trend of Investment in
Industry
55.11%
47.07%
43.30%
39.98%
29.21%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2009 2010 2011 2012 2013
Percentage of Total Investment in Industry
Trend of percentage of Total
Investment in Industry

5.6.1.2 Commerce Investment:

Year 2009 2010 2011 2012 2013
Investment in Commerce (Million tk.) 51332 37502 46142 38234 44448
Percentage of Total Investment 28.51% 17.47% 17.53% 12.50% 11.26%
Table: 5.15: Year Wise Commerce Investment
Source: Annual Report (2009-2013)

Figure-5.26: Amount of Investment in Commerce

Figure-5.27: Percentage of Investment in Commerce

Interpretation: The graph shows that the investment in commerce has fluctuated over the years.
However, the investment in commerce as percentage of total investment has decreased over the years.
The investment in commerce as percentage of total investment has decreased from 28.51% in 2009 to
11.26% in 2013.


51332
37502
46142
38234
44448
0
10000
20000
30000
40000
50000
60000
2009 2010 2011 2012 2013
I
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m
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T
a
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a

Year
Investment in Commerce
Trend of Investment in
Commerce
28.51%
17.47% 17.53%
12.50%
11.26%
0.00%
10.00%
20.00%
30.00%
2009 2010 2011 2012 2013
Percentage of Total Investment in Commerce
Trend of Percentage of Total
Investment in Commerce

5.6.1.3 Real Estate Investment:

Year 2009 2010 2011 2012 2013
Investment in Real Estate (Million tk.) 10172 8649 11336 16966 23231
Percentage of Total Investment 5.65% 4.03% 4.31% 5.55% 5.46%
Table: 5.16: Year Wise Real Estate Investment
Source: Annual Report (2009-2013)

Figure-5.28: Amount of Investment in Real Estate

Figure-5.29: Percentage of Investment in Real Estate

Interpretation: The graph shows a downward trend investment in Real Estate .The Real Estate
investment decreased over the years .The investment in Real Estate as percentage of total investment
has fluctuated over the years. The investment in Real Estate as percentage of total investment has
decreased from 5.65% in 2009 to 5.46% in 2013. Economy was not good that time so it was
decreasing trend.

10172 8649
11336
169966
23231
0
50000
100000
150000
200000
2009 2010 2011 2012 2013
I
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m
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a
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a

Year
Investment in Real Estate
Trend of Investment in
Real Estate
5.65%
4.03%
4.31%
5.55%
5.46%
0.00%
2.00%
4.00%
6.00%
2009 2010 2011 2012 2013
Percentage of Total Investment in Real Estate
Trend of Percentage of Total
Investment in Real Estate

5.6.1.4. Agriculture Investment:

Year 2009 2010 2011 2012 2013
Investment in Agriculture (Million tk.) 9110 14057 14252 20923 20992
Percentage of Total Investment 5.06% 6.55% 5.41% 6.84% 5.78%
Table: 5.17: Year Wise Agriculture Investment
Source: Annual Report (2009-2013)

Figure-5.30: Amount of Investment of Agriculture

Figure-5.31: Percentage of Investment in Agriculture

Interpretation: The graph shows upward trend investment in Agriculture. The Agriculture
investment increased over the years. However, an investment in Agriculture as percentage of total
investment has fluctuated over the years. The investment in Agriculture as percentage of total
investment has fluctuated from 5.06% in 2009 to 5.78% in 2013.

9110
14057 14252
20923 20992
0
5000
10000
15000
20000
25000
2009 2010 2011 2012 2013
(
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Year
Investment of Agriculture
Trend of Investment in
Agriculture
5.06%
6.55%
5.41%
6.84%
5.78%
0.00%
2.00%
4.00%
6.00%
8.00%
2009 2010 2011 2012 2013
Percentage of Total Investment in Agriculture
Trend of Percentage of Total
Investment in Agriculture

5.6.1.5. Transport Investment:

Year 2009 2010 2011 2012 2013
Investment in Transport (Million tk.) 4082 3520 4583 6457 6887
Percentage of Total Investment 2.27% 1.64% 1.74% 2.11% 1.90%
Table: 5.18: Year Wise Transport Investment
Source: Annual Report of IBBL (2009-2013)

Figure-5.32: Amount of Investment of Transport

Figure-5.33: Percentage of Investment in Transport

Interpretation: The graph shows that the investment in Transport has upward trend over the years.
However, the investment in Transport as percentage of total investment has fluctuated over the years.
The investment in Transport as percentage of total investment has fluctuated from 2.27% in 2009 to
1.90% in 2013.


4082
3520
4583
6457
6887
0
2000
4000
6000
8000
2009 2010 2011 2012 2013
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Year
Investment of Transport
Trend of Investment in
Transport
2.27%
1.64%
1.74%
2.11%
1.90%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2009 2010 2011 2012 2013
Percentage of Investment in Transport
Trend of Percentage of Total
Investment in Transport

5.6.1.6. SME Investment:

Year 2009 2010 2011 2012 2013
Investment in SME (Million tk.) - 49337 72933 100991 168393
Percentage of Total Investment - 22.99% 27.99% 33.02% 46.39%
Table: 5.19: Year Wise SME Investment
Source: Annual Report of IBBL (2009-2013)

Figure-5.34: Amount of Investment of SME

Figure-5.35: Percentage of Investment in SME

Interpretation: The graph shows that the investment in SME has upward trend over the years.
However, the investment in SME as percentage of total investment has increased over the years. The
investment in SME as percentage of total investment has increased from 0.00% in 2009 to 46.39% in
2013. It was resulted from good economic condition.
0
49337
72933
100991
168393
0
50000
100000
150000
200000
2009 2010 2011 2012 2013
(
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Year
Investment of SME
Trend of Investment in SME
0.00%
22.99%
27.99%
33.02%
46.39%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
2009 2010 2011 2012 2013
Percentage of Investment in SME
Trend of Percentage of Total
Investment in SME

5.7. Income from Investment:

Year 2009 2010 2011 2012 2013
Amount (Million tk.) 19543.84 21370.53 24766.26 32019.53 43672.23
Table: 5.20: Year Wise Income from Investment
Source: Annual Report of IBBL (2009-2013)

Figure-5.36: Amount of Income from Investment
Interpretation: The graph shows that the Income from Investment has upward trend over the years.
However, an Income from Investment as Million taka of total Income from Investment has increased
over the years. The Income from Investment as Million taka of total Income from Investment has
increased from 19543.84 in 2009 to 43672.23 in 2013. This indicates the efficiency of the investment
of IBBL.










.

19543.84
21370.53
24766.26
32019.53
43672.23
0
10000
20000
30000
40000
50000
2009 2010 2011 2012 2013
Amount (Million tk.)
Amount (Million tk.)

5.8:Mode wise Income of IBBL in 2013:

5.8.1.1:Investment Income from Murabaha mode:
Year 2009 2010 2011 2012 2013
Investment Income ( in Million Tk )

11,726 11,716 13,436 18,634 25,625
% of rorol Investment Income 62.33 % 57.59 % 57.10 % 61.21 % 63.03 %
Source: Annual Report of IBBL Page-260, (2009-2013)
Table -5.21: Murabaha Total Investment IncomeinMillion Tk and the percentage of Income

Figure-5.37 :Amount of Murabaha Total Investment Income in Million Tk

Figute 5.38 : Mutoboho Torol Investment Income in petcenroge

Interpretation: The graph shows that investment income from Murabaha mode has increased over
the years. The Murabaha investment income has increased from tk.11,726 in 2009 to million
tk.25,625 in 2013. howevet, rhe invesrmenr income ftom Mutoboho mode os o petcenroge rorol
invesrmenr income hos flucruored ovet rhe yeots.
11,726
11,716
13,436
18,634
25,625
-
5,000
10,000
15,000
20,000
25,000
30,000
2009 2010 2011 2012 2013
Investment Income
Income

Years
I
n

M
i
l
l
i
o
n

T
a
k

62.33%
57.59%
57.10%
61.21%
63.03%
54.00%
56.00%
58.00%
60.00%
62.00%
64.00%
2009 2010 2011 2012 2013
Percentage of Investment Income
Income
Year
I
n

P
e
r
c
e
n
t
a
g
e


5.8.1.2: Investment Income from Musaraka :

Year 2009 2010 2011 2012 2013
Investment Income ( in Million Tk ) 322 551 891 1608 1650
% of rorol Investment Income 1.71 % 2.71 % 3.79 % 5.28 % 4.06 %
Source: Annual Report of IBBL (2009-2013)
Toble4 . 22 : Musotoko Torol Investment Income in Million Tk ond rhe petcenroge of Income

Figute 5.39:Amounr of Musotoko Torol Investment IIncome in Million Toko

Figute 5.40 : petcenroge of Musotoko Torol Investment Income

Interpretation: The graph shows that investment income from Musotoko mode has increased over
the years. The Musotoko investment income has increased from million rk. 322 in 2009 to million tk.
1650 in 2013. howevet, rhe invesrmenr income ftom Musotoko mode os o petcenroge rorol invesrmenr
income hos increased ovet rhe yeots.The highesr gtowrh tore of income wos 5.28%.





322
551
891
1,608
1,650
-
500
1,000
1,500
2,000
2009 2010 2011 2012 2013
Investment Income
Income
Year
I
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M
i
l
l
i
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T
a
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a


1.71%
2.71%
3.79%
5.28%
4.06%
0.00%
2.00%
4.00%
6.00%
2009 2010 2011 2012 2013
Percentage of Investment Income
Year
I
n

P
e
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c
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n
t
a
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e


5.8.1.3: Investment Income from Bai-Muajjal:

Year 2009 2010 2011 2012 2013
Investment Income ( in Million Tk ) 947 947 1170 1638 2382
% of rorol Investment Income 5.03 % 4.66 % 4.97 % 5.38 % 5.86 %
Source: Annual Report of IBBL (2009-2013)
Table 5.23: Bai-Muajjal Total Investment Income in Million Tk and the percentage of Income

Figute 5.41: Boi-Muojjol Torol Investment Income in Million Tk

Figute 5.42: Boi-Muojjol Torol Investment Income in petcenroge

Interpretation: The graph shows that investment income from Boi-Muojjol mode has increased
over the years. The Boi-Muojjol investment income has increased from million rk. 947 in 2009 to
million tk. 2382 in 2013. howevet, rhe invesrmenr income ftom Boi-Muojjol mode os o petcenroge
rorol invesrmenr income hos increased ovet rhe yeots or 5.03% ro 5.86%.





947 947
1,170
1,638
2,382
-
1,000
2,000
3,000
2009 2010 2011 2012 2013
Investment Income
Income
Year
I
n

M
i
l
l
i
o
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T
a
k
a


5.03%
4.66%
4.97%
5.38% 5.86%
0.00%
5.00%
10.00%
2009 2010 2011 2012 2013
Percentage of Investment Income
Income
Year
I
n

P
e
r
c
e
n
t
a
g
e


5.8.1.4: Investment Income from HPSM Total:
Year 2009 2010 2011 2012 2013
Investment Income ( in Million Tk ) 5,817 7,129 8,032 8,562 11000
% of rorol Investment Income 30.92 % 35.04 % 34.14 % 28.13 % 27.05 %
Source: Annual Report of IBBL (2009-2013)
Table 5.24: HPSM Total Investment Income in Million Tk and the percentage of Income

Figute 5.43: HSmM Torol Investment Income in Million Tk

Figute 5.44: HSmM Torol Investment Income in Setcenroge

Interpretation: The graph shows that investment income from HSmM mode has increased over the
years. The HSmM investment income has increased from million rk. 5,817 in 2009 to million tk.
11000 in 2013. howevet, rhe invesrmenr income ftom HSmM mode os o petcenroge rorol invesrmenr
income hos decreased ovet rhe yeots bur excepr in 2010.
5,817
7,129
8,032
8,562
11,000
-
5,000
10,000
15,000
2009 2010 2011 2012 2013
Investment Income
Income
Year
I
n

M
i
l
l
i
o
n

T
a
k
a


30.92%
35.04%
34.14%
28.13%
27.05%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2009 2010 2011 2012 2013
Percentage of Investment Income
Income
Year
I
n

P
e
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c
e
n
t
a
g
e


5.9: Classified Investment as a Percentage of Total Investment:

Years 2009 2010 2011 2012 2013
Classified Investment(in Million Tk) 4,311.13 5,063.40 4,655.63 8,292.32 14,212
.80
Total Investment(in Million Tk) 1,80,054 2,14,616 2,63,225 3,05,841 3,72,9
21
Classified Investment as a % of
Total Investment
2.39% 2.36% 1.77% 2.71% 3.81%
Table: 5.25: Year Wise Classified Investment as a Percentage of Total Investment
Source: Annual Report (2009-2013)

Figure-5.45: Amount of Classified Investment

Figure-5.46: Percentage of Classified Investment

Interpretation: The graph shows that the classified investment as percentage of total investment.
Classified investment as percentage of total investment has fluctuated over the years. However, the
classified investment as percentage of total investment increased from 2.39% in 2009 to 3.81%i n
2013. This indicates that recovery performance of IBBL has decreased over the year
4311.13
5063.4
6455.63
8292.32
14212.8
0
5000
10000
15000
2009 2010 2011 2012 2013
Classified Investment
Classified Investment
2.39% 2.36%
1.77%
2.71%
3.81%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2009 2010 2011 2012 2013
Percentage of Classified Investment
Classified Investment

5.10: Bad or Loss as a Percentage of Total Investment:

Years 2009 2010 2011 2012 2013
Bad or Loss (in Million Tk) 2810 2735 3238 4337 10823
Total Investment(in Million Tk) 1,80,054 2,14,616 2,63,225 3,05,841 3,72,9
21
Bad or Loss as a % of Total
Investment
1.56% 1.27% 1.23% 1.42% 2.90%

Table: 5.26: Bad or Loss as a Percentage of Total Investment
Source: Annual Report (2009-2013)

Figure-5.47: Bad or Loss as a Percentage of Total Investment
Interpretation: The above graph shows that the Bad or Loss as a percentage of total Investment
was continuously decreasing during the year 2009 to 2011 which indicates that the bank has
succeeded to prevent its total Investment to become bad or loss during those years but in 2012 to 2013
the bad or Loss as a percentage of classified Loans and advances has increased from 1.42% to 2.90%.

1.56%
1.27% 1.23%
1.42%
2.90%
0.00%
1.00%
2.00%
3.00%
4.00%
2009 2010 2011 2012 2013
Bad or Loss as a Percentage of Total
Investment
Bad or Loss as a Percentage
of Total Investment

5.11: Return on Investment (ROI) of IBBL:

ROI primarily an indicator of managerial efficiency; It indicates how capable management has been
in converting assets into net earnings. Higher the firm`s return on total assets is better. The ROI of
IBBL has given below:
ROI = (Total Investment profit / Total Investment) * 100
Years Return on Investment
(in Percentage)
2009 10.67%
2010 10.40%
2011 10.08%
2012 10.87%
2013 12.21%

Table 5.27: Percentage of Return on Investment
Source: Annual report of IBBL (2009-2013)

Figure 5.48: Percentage of Return on Investment
Interpretation: The above graph shows the return on investment to the total investment from the
year 2009 to 2013. The ROI of IBBL has decreased from 2009 to 2011. After 2011 the return on
investment has gradually increased. However, now the ROI has increased over the last three years. So
this is a good sign for the bank.
10.67%
10.40%
10.08%
10.87%
12.21%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2009 2010 2011 2012 2013
Percentage of Return on Investment

I
n

P
e
r
c
e
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t
a
g
e

Years


5.12 SWOT Analysis:
SWOT analysis is identifying the internal and external factors that are favorable and Unfavorable to
achieve the objective of the bank. From the SWOT analysis we can figure out the ongoing scenario of
IBBL. By analyzing the performance of the bank, we get the following Strengths, Weaknesses,
Opportunities and Threats (SWOT).

Figure 4.6: Dimensions of SWOT.
5.12.1 Strengths:
Strength is Characteristics of the business or term that give it an advantage over in the industry.
Well reputed in the market because of Shariah based banking.
Stable source of funds.
Sound import & export operation
Not engaged in unfair business practice with their consumer.
Executives are highly educated and experienced.
Efficient management practices in the bank.
Bank has many attractive deposit schemes
Good Inter-personal relation among the officers & executives to maintain a corporate
environment.
Good banker relationship to the consumers.
Located in important commercial area with well-furnished and Air-conditioned Bank.


SWOT
Analysis
Internal
Factors
Strengths Weakness
External
Factors
Oppotunities
Threats

5.12.2 Weakness:
Strength is Characteristics that place the firm at a disadvantage relative to others.
Limited number of investment mode.
Limited promotional activities of IBBL
Few advertising specially published and television.
Absence of separate customer information desk.
Need for separate Marketing Department.
ATM service is very poor.
IT & E-Banking Status Does not Match With The Other Banks.

5.12.3 Opportunities:
Opportunities are external chances to make greater sales or profits in the environment.
Scope of Whole Sale Banking with NBFIs.
Increasing awareness of Islamic Banking.
Credit card business.
Foreign remittance are increasing day by day
Islamic banking becoming more reliable to the general people.
By doing social welfare activities it can create a good impact on public mind.

5.12.4 Threats:
Threats are external chances in the environment that could cause trouble for the business.
Many local and foreign aggressive banks are in the market so they need to build more
modernized transaction system.
Different aggressive offers and services of foreign and other local banks.
Entrance of new private commercial banks.
Competitors have more attractive deposit schemes.










6.1: Deposit of IBBL as % of total National Deposit:

Year 2009 2010 2011 2012 2013
National deposit (Billion Taka) 2603.1 3037.8 3858.9 4484.4 5130.3
Deposit of IBBL (TK in Millions) 202115 244292 291,935 341853 417844
Deposit IBBL as % of total
National Deposit
7.76 % 8.04% 7.57 % 7.62 % 8.14 %
Table 6.1: Deposit IBBL as % of total National Deposit
Source: Annual report of IBBL & Bangladesh Bank (2009-2013)

Figure 6.1: Deposit IBBL as % of total National Deposit
Interpretation: The graph shows the deposit of IBBL as percentage of total national deposit has
fluctuated over the year. However, the deposit as percentage of total national deposit has increased
over the years from 7.76% in 2011 to 8.14% in 2013. This indicates that comparative deposit
performance of IBBL has increased over the years.


7.76%
8.04%
7.57%
7.62%
8.14%
7.20%
7.30%
7.40%
7.50%
7.60%
7.70%
7.80%
7.90%
8.00%
8.10%
8.20%
2009 2010 2011 2012 2013
Deposit IBBL as % of total National Deposit
Deposit IBBL as % of total
National Deposit

6.2:Investment of IBBL as % of total Investment:

Year 2009 2010 2011 2012 2013
National (Billion Taka) 1939.9 2439.8 3297.5 3642.6 4743.8
Amount(TK in Millions) 1,80,054 2,14,616 2,63,225 3,05,841 3,72,921
Investment of IBBL as % of
total Investment
9.28 % 8.80 % 7.98 % 8.40 % 7.86 %
Table 6.2: Investment of IBBL as % of total Investment
Source: Annual report of IBBL & Bangladesh Bank (2009-2013)

Figure 6.2: Investment of IBBL as % of total Investment

Interpretation: The graph shows the investment of IBBL as percentage of total national investment
has fluctuated over the years. However, the deposit as percentage of total national investment has
decreased in the years from 9.28% in 2009 to 7.86% in 2013. This indicates that comparative
investment performance of IBBL has decreased over the years. It is not satisfactory position of IBBL
so it should try to increase its investment.



7.00%
7.50%
8.00%
8.50%
9.00%
9.50%
2009 2010 2011 2012 2013
Investment of IBBL as % of total Investment
Investment of IBBL as % of
total Investment

6.3: Comparison of Investment to Deposit Ratio of IBBL & National Investment to
Deposit Ratio:

Year 2009 2010 2011 2012 2013
Industry Average (%) 75 80.3 85.5 79.7 86.7
IBBL (%) 89.08 87.85 90.17 87.29 85.18

Table 6.3: Comparison of Investment to Deposit Ratio of IBBL & National Investment to
Deposit Ratio
Source: Annual report of IBBL & Bangladesh Bank (2009-2013)

Figure 6.3: Comparison of Investment to Deposit Ratio of IBBL & National Investment to Deposit Ratio

Interpretation: The graph shows that investment to deposit ratio of IBBL is higher than industry
average each year of analysis except in 2013. This graph indicates that IBBL uses much of deposit in
invest in comparison with most of the firms in the industry.



75
80.3
85.5
79.7
86.7
89.08
87.85
90.17
87.29
85.18
0
10
20
30
40
50
60
70
80
90
100
2009 2010 2011 2012 2013
Industry Average
IBBL

6.4:Non- performing Investment of IBBL as % of total Investment:

Year 2009 2010 2011 2012 2013
Industry Average 10.8 9.2 7.3 6.1 5.6
NPI OF IBBL 2.39 2.36 1.77 2.71 3.81
Table 6.4: Non- performing Investment of IBBL as % of total Investment
Source: Annual report of IBBL & Bangladesh Bank (2009-2013)

Figure 6.4: Non- performing Investment of IBBL as % of total Investment

Interpretation: The graph shows that NPI ratio of IBBL is lower than industry average over the
each year of analysis. This indicates that recovery performance of IBBL is better than that of the most
of the banks in the banking industry. However, Non- performing investment of IBBL has increased
over the last three years.


10.8
9.2
7.3
6.1
5.6
2.39 2.36
1.77
2.71
3.81
0
2
4
6
8
10
12
2009 2010 2011 2012 2013
Industry Average
IBBL








7.1 Major Findings:
The study, Investment Management of Islami Bank Bangladesh Limited reveals the following major
findings:
The total deposit of IBBL has increased over the years and the deposit of IBBL as percentage of
total national deposit has increased over the years from 7.57% in 2011 to 8.14% in 2013. This
indicates that comparative deposit performance of IBBL has increased over the years.
Investment during the year 2009 to 2013 has increased over the years. The investment has
increased from taka in Millions 1,80,054 to 3,72,921.
In the year 2013, IBBL invested their maximum portion in Bai Murabaha mode (59%) which is
amount of TK 2, 21,632 million that means sale for which payment is made at a future fixed date
or within a fixed period in short, it is a sale on credit. The second maximum portion of investment
is in HPSM mode which amount in TK 96,056 million & in percentage is 26%. The bank invests
in other modes at lower percentage. The lowest portion was invested in Bai- Salam at 1%.
The deposit as percentage of total national investment has decreased in the years from 9.28% in
2009 to 7.86% in 2013. This indicates that comparative investment performance of IBBL has
decreased over the years. It is not satisfactory position of IBBL so it should try to increase its
investment.
The total investment of IBBL has increased over the years but the investment as percentage of
total national investment has decreased over the years from 9.28% in 2009 to 7.86% in
2013.This downward trend of invest is negative sign for the bank.
There is a fluctuating trend in investment to deposit ratio of IBBL. However, the investment to
deposit ratio of IBBL is higher than industry average over each year of analysis except in 2013.
There is a fluctuating trend in investment to deposit ratio of IBBL. However, the investment to
deposit ratio of IBBL is higher than industry average over each year of analysis except in 2013.
The IBBL concentrate more in mudaraba mode and Mudaraba investment as a percentage of total
investment has increased over the years.
There is an increasing trend of investment in agriculture and SME .Bank has invested more in
Real Estate and industrial sector 2013.Though there is an increasing trend in nonperforming
investment of IBBL in recent years, NPL ratio of IBBL is lower than industry average.
This Bank revalues its investment operations within limited number of investment modes and
does not initiate investment modes according to changing diverse needs of people.
Annual income of IBBL is massive comparing to other commercial banks.
ATM service is very poor.
Server is very slow.
This Bank cant invest in all economic sectors which are prohibited by the law of Islam.

7.2 Recommendation:
All things around us are changing at an accelerating rate. Today is not like yesterday and tomorrow
will be different from today. The Islami Bank Bangladesh Limited should adopt some of the industry
best practices that are not practiced currently. These are:
IBBL should increase investment in agricultural sector because Bangladesh is an agricultural
country.
IBBL should initiate different investment modes according to changing / diverse needs of clients
by conducting huge research and study.
Investment power should be decentralized.
Bangladesh is rural base country. So IBBL should increase their investment in rural area.
IBBL should increase its investment in public sector, i. e. the bank should involve profitably in
this sector for the development of the bank as well as the economy.
Bank should take corrective actions to reduce its upward trend of outstanding amount of
investment and careful to take investment decision.
Attempt should be made for an improved information system within the bank and within the
investment clients unit.
Consider offering growth pre-investment and post investment counseling to both potential and
existing investors according to their needs.
Repayment behavior of different types of clients play a important role not only in the successful
implementation of investment plan but also in the cost-benefit analysis for the banks, there is
need to analysis in detail the repayment behavior at micro level. Such a study provides proper
guidance for the banks to be associated with the clients at various stages of utilization of
investment and its repayment.
Investment plan commitment should be included in the budget of each branch of the bank and
progress should be regularly monitored.
The productivity of the bank may be raised by better funds management and portfolio
management improving recycling of funds and developing other income from the business
activities of the bank
It could increase its advertising as well as awareness regarding Islamic investment modes.
The authority of IBBL should introduce more innovative and modern customer service.
Investment should be provided in the SMEs sector for developing entrepreneur investment.
IBBL should try to improve the deposit investment ratio for higher productivity.
IBBL should encourage the people for Mudaraba & Musharaka Investment.

7.3 Conclusion:
Islami Bank Bangladesh Limited (IBBL) is the first bank in the private sector based on the principal
of Islamic Shariah to work with other conventional banks operating in the economic arena of
Bangladesh. As regards the overall investment position of the Islami Bank Bangladesh it may be
concluded that, since the beginning of banking activities the bank has not invested any amount in
any project on the Mudaraba mode of investment. The investment position of the bank since 1983
shows that investment under the Musharaka mode of investment constitutes a very insignificant
percentage of the total investment. The bank invested a major portion of its funds under the
Murabaha & Bai-Muajjal mode of investment. In spite of the fact that the bank invests its fund
towards various sectors of the nations economy still the sector-wise investment position indicates
that the bank concentrates much in investing towards industrial sectors.
While interviewing officers in the investment department it was informed that in order to make
investment under Musharaka mode of investment honest and sincere entrepreneurs required. They
experienced a hard time in many cases while introduced financing under the Musharaka mode.
Once upon a time, most of the people didnt understand interests-free banking system. They never
thought that it is possible to provide banking facilities without interest but in passage of time, now it
is clear that in Islam there as a banking procedure though profit / loss sharing basis. In course of
time problems have reduced but not delaminated. This bank is trying to operate activities according
to Islami Shariah. If the government becomes conscious to solve these problems and the banker
become cordial and cooperative, the problems may be reduced to a greater extent.










Bibliography:
Islami Bank Bangladesh Annual Report 2009
Islami Bank Bangladesh Annual Report 2010
Islami Bank Bangladesh Annual Report 2011
Islami Bank Bangladesh Annual Report 2012
Islami Bank Bangladesh Annual Report 2013
System of Islamic Bank-Md Abdul Mannan
Internship Program Book of IBTRA
Web site :
www.islamibankbd.com
www.bangladesh-bank.org