Mission of IBBL:

 To establish Islami Banking through the introduction of a welfare oriented

banking system.
 To ensure equity and justice in the field of all economic activities.
 To achieve balanced growth and equitable development through diversified
investment operations particularly in the priority sectors and less developed
areas of the country
 To encourage socio-economic uplift and financial services to the low income
community particularly in the rural areas.
 Vision of IBBL:

 To establish and maintain the modern banking techniques, to ensure the

soundness and development of the financial system based on Islamic
Principles.
 To become the strong and efficient organization with highly motivated
professionals.
 To encourage savings in the form of direct investment.
 To encourage investment particularly in projects which are more likely to
lead to higher employment.
 Definition of Islamic Bank

"An Islamic Bank is a financial institution whose statutes, rules and

procedures expressly state its commitment to the principles of Islamic
Shariah and to the banning of the receipt and payment of interest on any of its
operations" - OIC
Dr. Ziauddin Ahmed'- "Islamic Bank is essentially a normative concept and
could be defined as conduct of "banking in consonance with the ethos of
the value system of Islam."
 Introduction :
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 Qur'an
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, 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.

History & Milestone of IBBL:

 In 1974 – Bangladesh signed the charter of Islamic Development Bank (IDB)

 In 1980 – Bangladesh Bank made study on the operations of Islamic Banks abroad
 In 1982 – Islamic Development Bank came forward to participate a joint venture Islamic
Bank in Bangladesh.
 In 1983 – Islami Bank Bangladesh Limited came into being the first Islamic Bank in the
Southeast Asia.
 In 1985 – IPO & Listing in Dhaka Stock Exchange
 In 1991 – Opening of 50th Branch
 In 1997 – Opening of 100th Branch
 In 2004 – Opening of 150th Branch
 In 2007 – Opening of 186th Branch
 In 2008 – Opening of 206th Branch
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 upliftment.
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 system.

Corporate Information

(as on  June 30,  2010)

 Date of Incorporation 13th March 1983
Inauguration of 1st Branch
30th March 1983
(Local office, Dhaka)
Formal Inauguration 12th August 1983
Share of Capital
Local Shareholders 41.77%
Foreign Shareholders 58.23%
Authorized Capital Tk. 10,000.00 million
Paid-up Capital Tk. 7,413.00 million
Deposits Tk. 265,193.00
million
Investments (including Investment in Tk. 255,178.00
Shares) million
Foreign Exchange Business Tk. 277,739.00
million
Number of Branches 212 
Number of SME Service Centres 20
Number of Shareholders 52164
Manpower 9588

Functions
The functions of Islami Bank Bangladesh Limited are as under:

To maintain all types of deposit accounts.

To make investment.
To conduct foreign exchange business.
To extend other banking services.
To conduct social welfare activities through Islami Bank
Foundation.
Achievements :

National and international ratings of IBBL

IBBL's past performances have been evaluated by Bangladesh Bank, several credit
rating agencies home  & abroad and by the local press.
 
International Press
“In the midst of a difficult Banking system known to be plagued by high non-
performing loans (NPLs), one could easily conclude that it would be difficult to find a
bank that is different from norm. However, IBBL provides a refreshing change and is,
thus, a pleasant surprise. Although it does not command the market share as the 4
public sector banks, IBBL, which claims to have little interference in lending from the
government, has nonetheless, managed to find a niche market of its own-says the
‘BANK ATCH’ a New York based international Credit Rating Agency in its January
30, 1998 issue. “As a market leader offering banking services based on the Islamic
rule of Shariah, IBBL's profitability trend has been quite impressive. The Bank's
ability to keep its return on asset (ROA) well above the industry's average, reflected
its resilience to possible shocks in the banking system. Concerns over massive NPLs
and under provisioning are common amongst local banks.  But this seems well
resolved in IBBL. IBBL's good performance and solid capital base have indeed
provided refreshing change found within a banking system saddled and held back by
huge NPLs” the above agency continued to comment in the same issue.
 
National Press 
“It is one of a few local banks according to CAMEL (Capital, Assets, Management,
Earnings & Liquidity) rating made by the Bangladesh Bank. It holds the highest
amount of liquidity among all banks and its ability to keep return on assets at 1.07
percent is well above the banking sector's average of 0.33 percent”- The Financial
Express, Dhaka commented in its issue of May 28,1998.
“The Holiday” in its 29th August, 1997 issue carried out a report under the heading
“Setting a precedence of sound banking” and commented “While the country's
banking system is burdened with bad debt portfolios and also suffers from a liquidity
shortage, the Islami Bank Bangladesh Ltd. (IBBL) has created a unique precedence by
improving its reserve and deposit positions substantially, making handsome profits,
and offering attractive dividends to its share holders and depositors.”
 
 IBBL's World rating
As per Bankers' Almanac (January 2001 edition) published by the Reed Business
Information, Windsor Court, England, IBBL's world Rank is 1771 among 3000 banks
selected by them. This position was 1902 among 4500 selected banks as on January
1999 edition.
IBBL's country Rank is 5 among 39 banks as per ratings made by the above Almanac
on the basis of IBBL's Financial Statements of the year 2001.
 
Award and Prizes: International & National Perspective
IBBL was awarded for several times by international & national organisations. The
Global Finance, a reputed London based quarterly magazine, awarded IBBL as the
best bank of the country for the year 1999 and 2000.
IBBL has got the 2nd prize of National Export Fare for its pavilion of Service
Organisation in 1985.
 

Membership of Different Organization / Chamber

Local:
1. Bangladesh Institution of Bank Management (BIBM)
2. The Institution of Bankers Bangladesh (IBB)
3. Bangladesh Association of Banks (BAB)
4. Bangladesh Foreign Exchange Dealers' Association (BAFEDA)
5. Central Shariah Board for Islamic Banks of Bangladesh
6. International Chamber of Commerce- Bangladesh
 Foreign:
1. International Association of Islamic Banks (IAIB), Jeddah, K.S.A.
2. Accounting and Auditing Organizations for Islamic Financial Institutions
(AAOIFI), Manama, Bahrain.
3. General Council of Islamic Banks & Financial Institutions (GCIBFI), Manama,
Bahrain (IBBL is a member of its Executive Council)
4. Society for Worldwide Inter-bank Financial Telecommunication (SWIFT
 Products & Services:
Al-Wadeeah Current Account

Mudaraba Savings Account

Mudaraba Term Deposit Receipt

Mudaraba Special Notice Account

Mudaraba Special Savings (Pension) Account

Deposit schemes Mudaraba Hajj Savings Account

Mudaraba Savings Bond Scheme

Mudaraba Foreign Currency Deposit Scheme (Savings
)

Mudaraba Waqf Cash Deposit Account

Mudaraba Monthly Profit Deposit Scheme

Mudaraba Muhor Savings Deposit Scheme

Investment Modes Bai- Muajjal

Bai- Murabaha

Hire purchase under Shirkatul Meelk

Mudarabah

Musharaka

Bai- Salam
 Equity and entrepreneurship Fund of Bangladesh Bank

Household Durable Scheme

Housing Investment Scheme

Real State Investment Program

Transport Investment Program

Car Investment Scheme
Special Schemes

Investment Scheme for Doctors

Small Business Investment Scheme

Agriculture Implements Investment Scheme

Micro Industries Investment Scheme

Mirpur Silk Weavers Investment Scheme

Rural Development Scheme 

ATM Services

Locker Service

Special Services
SWIFT

Reuter

Foreign Exchange Business
Branch Network:

IBBL has been operating with 232 branches (including SME/Agriculture

Branches) with the inclusion of (15+10) = 25 new branches and
SME/Agriculture Branches during 2009. In order to facilitate and control the
administrative functions of the branches, IBBL added 1 (one) new zone
(Maymensingh) in 2009 and 1 (one) new Zone (Chittagong North) in January
2010 and thus having 12 zones throughout the country. Among 232
branches 8 branches are included in Dhaka Central Zone, 23 branches in
Dhaka South Zone, 22 branches in Dhaka North Zone, 17 branches in
Chittagong South Zone, 15 branches in Chittagong North Zone, 23 branches
in Bogra Zone, 24 branches in Khulna Zone, 27 branches in Comilla Zone, 20
branches in Sylhet Zone, 18 branches in Barishal Zone, 19 branches in
Rajshahi Zone and 17 branches in Mymensingh Zone. This large branch
network of IBBL is supported by 212 online Branches, 20 off-line
SME/Agriculture Branches through 36 shared ATM, 26 own ATM, 1 Capital
Market Service Centre and alternative delivery channels such as SMS
Banking and Internet Banking.
Market Share:

The banking industry of Bangladesh had reported deposit and investment

(loans & advances) of Tk.3,182.22 billion and Tk.3,052.44 billion
respectively in 2009 against Tk.2,649.65 billion and Tk.2,545.12 billion
respectively in 2008 shared by 47 banks including 4 state owned commercial
banks (SCBs), 4 specialized banks, 9 foreign banks, 23 private commercial
banks, and 7 Islamic banks. Total deposit of IBBL rose to Tk.244.29 billion at
YE2009 from Tk. 202.12 billion at YE2008 registering a growth of 20.87%.
Similarly, total investment increased to Tk. 214.62 billion at YE2009 from
Tk. 180.05 billion at YE2008 representing 19.20% increase. Market share of
IBBL in terms of deposit declined to 7.93% in 2009 from 8.63% in
2008 while market share of the bank in terms of investment (loans &
advances) increased to
PROSPECTS;

The financial sector of Bangladesh is already considered as one of the most

regulated sector compared to other sectors due to various measures taken
by regulatory authority from time to time with a view to making the sector
more productive, need oriented and in line with the developmental pace of
the world. As many as 47 banks are now in operation in a small economy
like Bangladesh. Obviously the financial institutions have been facing tough
competition in grabbing market share to ensure growth and sustainability.
The economy of Bangladesh had gone through a crucial time due to last
year’s global economic melt down whose effects are now being felt in export
oriented Asian countries but to a lesser scale in Bangladesh. Moreover the
country had to face several downside risks including political disruption and
infrastructure constraints, particularly acute power and gas shortage.
However recently world economy has shown slow recovery which ushered in
hope for Bangladesh specially for garment sectors which has not only been
able to maintain the RMG products as per orders to foreign buyers and at
the same time exploring new markets for RMG exports to earn more foreign
exchange for the country. Import bills are also rising to meet domestic
demand. Government is also considering various incentives for RMG export
to compete with foreign competitors specially India, Pakistan and china.
Despite world economic meltdown in 2008 the macro-economy outlook for
the year 2009 remained favorable due to robust performance in industry
sector lifted by export oriented manufacturing, enhanced remittances from
abroad and overall growth in the industrial and service sectors. Industrial
production continues to register strong rise showing steady growth despite
the earlier concerns about the adverse effect on the industrial sector on
account of the ending of MFA quotas. External sectors developments are
encouraging. Export during 2009 increased, inward remittance increased
substantially ultimately Foreign Exchange Reserve stood all time high to
meet import bills for more than 6 months. Further to make the banks capital
base more risk oriented in line with Basel II recommendation, after one year
parallel run, the Bangladesh Bank has finally made it compulsory for all
banks to calculate MCAR (Minimum capital adequacy ratio) on the basis of
Basel II from January 2010 and onward. For improvement of bank operation
the BB has increased capital base, tightened loan classification, issued risk
guide lines along with fresh guideline for improvement of corporate
governance of banks. In the meantime banks including foreign banks have
been encouraged to extend SME loan out of its yearly total loan (investment)
budget. Banks having no branch net work at village level have been
instructed to provide SME loan (investment) through NGOs. Banks were
directed to open SME loan (investment) booths staffed with women guides to
enhance disbursement of SME loan (investment) to women entrepreneurs.
Over and above banks have been advised to lower lending (investment)
rates and service charges/fees in priority economic sectors.
OBSERVATION SUMMARY OF IBBL:

Comforts:
􀂉 Improvement in automation
􀂉 Good asset quality
􀂉 Comfortable liquidity position
􀂉 Significant involvement in non-funded business
􀂉 Strong market share
􀂉 Diversified ownership pattern
􀂉 Wide branch network
􀂉 Pioneer and leader in Islamic banking
Concerns:
􀂉 Fall in financial performance and operating efficiency
􀂉 Significant increase of rescheduled investment
􀂉 Substantial increase of classified investment amount
􀂉 Marginal capital adequacy ratio
􀂉 High large investment exposures
􀂉 Noticeable investment in low yielding government securities
􀂉 High sectoral concentration in risky trade & commerce sector
Opportunities:
􀂉 Investment in SME and Agro based industry
􀂉 Real time online banking
􀂉 Creation of Islamic Money market product
􀂉 Introduction of Tier 3 capital component like Istisna Bond
Challenges:
􀂉 Government pressure to reduce rate of return on investment
􀂉 Maintaining required Capital Adequacy under Basel II framework
􀂉 Business segment wise Capital allocation