INTERNSHIP REPORT

DEPOSITOR BUYING BEHAVIOR -AN ANALYSIS ON SIBL, PRINCIPAL BRANCH

Exam Roll: 020008

INTERNSHIP REPORT

DEPOSITOR BUYING BEHAVIOR -AN ANALYSIS ON SIBL, PRINCIPAL BRANCH

PREPARED FOR:
Chairman Internship Placement Committee

PREPARED BY:
Exam Roll: 020008 Registration No: 18100 4th year, 8th semester Batch No.: 11th, BBA Program Academic Session: 2001-2002

DEPARTMENT OF BUSINESS ADMINISTRATION JAHANGIRNAGAR UNIVERSITY, SAVAR, DHAKA 1342

JANUARY 22, 2007

January 22, 2007

Chairman Internship Placement Committee Department of Business Administration Jahangirnagar University Savar, Dhaka

Subject: Submission of Internship Report

Dear Sir:

I am delighted to submit my internship report styled - Depositor Buying Behavior -An Analysis on SIBL, Principal Branch as part of my BBA degree requirement. I have completed a 12 - week internship at Social Investment Bank, Principal branch, Dilkhusha, Dhaka. I was assigned to do a survey on the depositors of SIBL to find out their preference factors for selecting any banking services to keep their deposits.

I enjoyed working on the report and if you have any quarries related to the report, I will be glad to respond to them.

Sincerely yours,

Exam Roll: 020008 Registration No: 18100 4th year, 8th semester Batch No.: 11th, BBA Program Academic Session: 2001-2002 Department of Business Administration Jahangirnagar University, Dhaka

ACKNOWLEDGEMENT

All praises to the Almighty Allah for giving me the patience and ability to complete my internship program.

Very sincerely, I acknowledge my gratitude and indebtedness to my departmental supervisor, Mr. Kamrul Arefin for his guidance and evocation of ideas for this report. And I am also thankful to all the faculty members and teachers of DBA for equipping me with the knowledge and tools for preparation of such a report.

My heartfelt thanks go to my supervisor at the Social Investment Bank, Mr. Tahirul Islam, Vice President, and Branch Manager, Principal branch, Social Investment Bank Limited, for his valuable support and considerations during my entire tenure of internship.

During my internship and preparing my internship report, I received a very much friendly and wholehearted cooperative attitude from all the staffs and members of the bank. I would like to thank them for their cooperation that helped me to complete my internship and prepare the report. In this connection I would like to mention some names, likely- Mr. Shamsul Alam, FAVP; Mrs. Dina Khurshid, Executive Officer; Ms. Salma Akhter, Officer; and Ms. Afrina, Officer; SIBL, Principal Branch.

My special thanks to Mr. Ataur Rahman, General Manger, Department of Currency Management, and Payment System, Bangladesh Bank, without whose help I could not get the chance of doing internship in Social Investment Bank.

I also express my sincere gratitude to all the people who participated in the survey. All of them were busy clients of the bank. Yet their patience, positive attitude, responses, and suggestions provided valuable inputs in preparation of this report.

Finally, my gratitude is due to my parents and friends for their enthusiastic co-operation and constant encouragement.

TABLE OF CONTENTS
Topic Abbreviation Executive Summary 1.0 Introduction 1.1 Origin of the Report 1.2 Objectives of the Report 1.2.1 Primary Objective 1.2.2 Secondary Objectives 1.3 Methodology 1.4 Limitations 1.5 An Overview of Banking Sector in Bangladesh 1.6 The Genesis of Islamic Banking in Bangladesh 1.7 Role of Bangladesh Bank in Promoting Islamic Banking in Bangladesh 2.0 Organization 2.1 A Snap Shot of the Company 2.2 History of Birth of SIBL 2.3 Mission, Visions and Objectives of SIBL 2.3.1 Mission 2.3.2 Vision 2.3.3Objectives 2.4 Head office & Branch Network 2.5 Organization Structure of SIBL 2.5.1 Management of SIBL 2.5.2 Organization Chart of SIBL 2.5.3 Functional Divisions and Departments 2.8 SWOT Analysis of Social Investment Bank Limited 3.0 Project Part 3.1 Introduction 3.2 Background 3.3 Objectives of the Report 3.4 scope of the Report 3.5 Methodology 3.5.1 Research Design 3.5.2 Sources of Information 3.5.3 Sample Design 3.5.4 Questionnaire Design 3.5.5 Field Work 3.5.6 Analyzing and Reporting of The Findings 3.6 Limitations 3.7 Literature Survey 3.7.1 Consumer Buyer Behavior Page No. v vi 1 1 1 1 1 1 1 1 1 2 3 3 3 3 3 4 4 4 4 4 4 7 7 8 8 8 8 8 9 9 9 9 9 9 9 10 10 10

3.7.2 Model of Depositors Buyer Behavior 3.7.3 Characteristics Affecting Depositors Behavior 3.7.4 Types of Buying- decision Behavior 3.7.5 Buyer Decision Process 3.8 Target market of SIBL 3.9 Banking Services of the Social Investment Bank in Bangladesh 3.9.1Formal banking Services 3.9.1.1 Business/ Corporate Banking of SIBL 3.9.1.2 Consumer Banking 3.9.1.2.1 Deposit Products of SIBL 3.9.1.2.2 Online Banking Services 3.9.1.2.3 ATM & Credit Card Services 3.9.1.2.4 Ancillary Services 3.9.1.3 Correspondent Banking 3.9.1.4 Loan, Advances, and Credit Facilities 3.9.1.5 Foreign Exchange Transaction Services 3.9.2 Non Formal banking Services 3.9.3 Voluntary Banking Services 4.0 Analysis of the Data and Survey Findings 4.1 Importance of Different Factors for Selecting any Banking Services to Keep Deposits 4.2 Types of Return Prefer Most 4.3 Reason for Preferring that Specific Type of Return on Deposit 4.4 Keep Deposit in Another Bank Not, If Get High and Ensured Return 4.5 Whether One Feels Comfortable to Do Transactions in SIBL in its Shariah Culture 4.6 Whether Engaging In Islamic Banking Facilities Will Allow to conform to Shariah or Not 4.7 Level of Interest to Use Shariah Banking Services Than Traditional Banking Services 4.8 How Strictly the Islamic Banks in Bangladesh Following Islamic Shariah Principles to Run Banking Business 4.9 How Strictly SIBL Following Islamic Shariah Principles to Run Banking Business 4.10 Level of Satisfaction About SIBL 4.11 Changes Needed in SIBLs Banking System 4.12 Changes Needed in SIBLs Different Banking Services 4.13 Changes Needed in SIBLs Organization Culture 4.14 Changes Needed in SIBLs Branch number 4.15 Changes Needed in SIBLs Operations Hour 4.16 Changes Needed in SIBLs Service Quality 4.17 Changes Needed in SIBLs Service Charge 4.18 Changes Needed in SIBLs Other Facilities (Like ATM, Online Banking) 4.19 Number of Account Holders in Different Accounts In SIBL (in %) 5.0 Demographic Information Analysis and Survey Findings

10 11 11 12 12 12 12 12 12 13 14 14 14 14 15 15 16 16 17 17 20 20 21 21 22 22 23 23 24 24 25 25 26 26 27 27 28 28 29

5.1 Age 5.2 Gender 5.3 Marital Status 5.4 Educational qualification 5.5 Occupation 5.6 Gross Family Disposable Income (monthly) 5.7 Cross Tab Analysis of the Demographic Information 6.0 Findings at a Glance 7.0 Recommendation and Conclusion 7.1 Recommendations 7.2 Recommendation to SIBL Authority By the Respondents 7.3 Conclusion 8.0 Appended Part 8.1 Tables 8.2 Questionnaire 9.0 Bibliography

29 30 30 31 31 32 32 33 35 35 36 36 37 37 38 40

LIST OF TABLES
Topic Table 1: Sum, Average, and rank of the Factors for selecting any banking services Table 2: Cross tab (type of return* Keep deposit in another bank rather SIBL if get high and ensured return on deposits) Table 3: Cross Tab Analysis of the Demographic Information Table 4: weight of different options in Five Point Likert scale Table 5: Average Calculation example Table 6: value of Different questions answers asked through five point Likert Page No. 19 21 33 37 37 37

LIST OF FIGURE
Topic Figure 1: Organization Chart of SIBL Figure 2: Model of Consumer Buyer Behavior Figure 3: Types of Buying- decision Behavior Figure 4: Buyer Behavior Decision Making Process Figure 5: Importance of Different Factors for Selecting any Banking Services to Keep Deposits Figure 6: Types of Return Prefer Most Figure 7: Keep Deposit in Another Bank Not, If Get High and Ensured Return Figure 8: Whether One Feels Comfortable to Do Transactions in SIBL in its Shariah Culture Figure 9: Whether Engaging In Islamic Banking Facilities Will Allow to conform to Shariah or Not Figure 10: Level of Interest to Use Shariah Banking Services Than Traditional Banking Services Figure 11: How Strictly the Islamic Banks in Bangladesh Following Islamic Shariah Principles to Run Banking Business Figure 12: How Strictly SIBL Following Islamic Shariah Principles to Run Banking Business Figure 13: Level of Satisfaction About SIBL Figure 14: Changes Needed in SIBLs Banking System Figure 15: Changes Needed in SIBLs Different Banking Services Figure 16: Changes Needed in SIBLs Organization Culture Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure 17: Changes Needed in SIBLs Branch number 18: Changes Needed in SIBLs Operations Hour 19: Changes Needed in SIBLs Service Quality 20: Changes Needed in SIBLs Service Charge 21: Changes Needed in SIBLs Other Facilities (Like ATM, Online Banking) 22: Number of Account Holders in Different Accounts In SIBL (in %) 23: Age 24: Gender 25: Marital Status 26: Educational qualification 27: Occupation 28: Gross Family Disposable Income (monthly) Page No. 5 11 11 12 18 20 21 21 22 22 23 23 24 24 25 25 26 26 27 27 28 29 29 30 30 31 31 32

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ABBREVIATIONS
Abbreviations used throughout the report are as follows:

o SIBL o MCB o PCB o NCB o IB o MIB o SWIFT

Social Investment Bank Limited Multinational Commercial Bank Private Commercial Bank Nationalized Commercial Bank Islamic bank Multinational Islamic Bank Society for Worldwide Telecommunication Automated Teller Machine Bangladesh Bank Account Information & Communication Technology Electronic Cash Hire purchase( Participatory Ownership) Limited Authorized Dealer Inter-bank Financial

o ATM o BB o A/C o ICT o E- cash o HPSM

o
i. LTD AD

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EXECUTIVE SUMMARY
Social Investment bank Limited is a fourth Islamic Bank in Bangladesh. It is developing and expanding its branches in the country with innovating products, and banking services, to gain greater acceptance as an effective and efficient means of intermediation and to contribute to the overall wealth creation. To gain greater acceptance, to contribute to overall wealth creation and compete with other conventional banks, the factors that contribute to depositors preference to select SIBL need to be studied. The objectives of the report are: To find out depositors preferences factors to select any bank to keep their deposits, To find out the reasons for preferring some specific factors than other factors to keep deposits, To know SIBLs Depositors perception about SIBL as an Islamic bank, To find out SIBLs depositors belief about using Islamic banking services and their level of interest to use Islamic banking services, To find out SIBLs Depositors level of satisfaction and their expected changes about SIBL, To find out the buyer group of deposit products of SIBL, and to know SIBLs major functions, and its products. The research is a descriptive research and target population is the depositors of SIBL, Dilkhusha Principal Branch, Dhaka. Convenient sampling method used to conduct the study and sample size is 100. Data collected through personal interviewing with structured questionnaire by the researcher himself. Simple tabulation had done for data analysis. Consumer buyer behavior is a system in which the individual consumer surrounded by an immediate and a wider environment that influences his or her goals. These goals are ultimately satisfied by passing through a number of problem-solving stages leading to purchase decisions. Generally people select any banking services to satisfy the need of keeping their deposit, taking loans, and having other ancillary services. To select any banking services to keep deposits, consumers will ideally consider Bank's reputation and image, Availability of wide range of services, Return on deposits, Bank Location and number of branches, Operations hours, Service quality, Service charges, Availability of other facilities (like ATM, online banking etc), type of bank (like MCB, PCB, NCB) etc. There are wide differences between the conventional banking system and Islamic banking system. The main difference is that, profit and loss sharing practice of Islamic banks. So the consumers of conventional banks and consumers of Islamic banks, consider different factors to keep their deposits. Such as: to select any Islamic bank people also consider the Banking system (like Shariah based banking system or Traditional banking system), Organization culture, strictness in following the Shariah law to run the banking system etc. The main findings of the report are: Return on deposit is most important factor for selecting any banking services to keep deposits, then service quality and then operations hour is most important to the respondents; Bank's reputation and image, Ownership type of the bank and other factors are least important factors for selecting any banking services to keep deposits to the respondents; 80% of the respondents said that they prefer ensured return on deposit. Reasons for preferring ensured return on deposit that the respondents said are: It is better to be ensured about the return as it is safe, No risk of having lower amount of deposit, there is no loss in such type of return on deposit. Reasons for preferring unensured return on deposit that the respondents said are: As unensured return on deposit is the main feature of Islamic banking system they prefer this, as business has risk to do loss, depositors should share the risk as this procedure is fair. 60% of the respondents, who said that they prefer ensured return on deposit, said they will keep their deposits in another bank from SIBL if they get high and ensured return on your deposits. But 20% respondents who said that they prefer ensured return on deposit, said will not keep their deposits in another bank from
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SIBL if they get high and ensured return on your deposits. All the respondents said that they feel comfortable to do transactions in SIBL in its Shariah culture. 80% of the respondents said that, they believe that engaging in Islamic banking facilities will allow them to conform to Shariah and most of the respondents are interested to use Shariah banking services than traditional banking services, 70% of the respondents think that, Islamic Banks in Bangladesh following Islamic Shariah principles moderately strictly to run banking business. And 30% of the respondents think that, Islamic Banks in Bangladesh not strictly following Islamic Shariah principles to run banking business, 90% of the respondents think that, SIBL following Islamic Shariah principles moderately strictly to run banking business, most of the respondents are satisfied about SIBL, According to 80% of the respondents, SIBL should strictly follow Shariah based banking system, According to 70% of the respondents SIBL need to introduce more Islamic services, According to 70% of the respondents SIBL should strictly follow Shariah culture, According to 80% of the respondents SIBL need more branches, according to 80% of the respondents operation hour need to be increased, According to all of respondent, SIBL need to improve their service quality, 70% of the respondents said service charge needed to be reduced and According to 90% of the respondent SIBL need to increase other facilities like ATM, online banking.

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1.0 INTRODUCTION
1.1 ORIGIN OF THE REPORT
This report on Depositor Buying Behavior -An Analysis on SIBL, Principal Branch is initiated as part of' the Internship Program which is a BBA Degree requirement of Department of Business Administration, Jahangirnagar University, Dhaka. A 12-week internship at Social Investment Bank Limited, Principal Branch, Dhaka, preceded the preparation of the report. The report topic was selected by the internal supervisor Mr. Kamrul Arefin, Associate professor, Department of Business Administration, Jahangirnagar University and later was approved by external supervisor Mr. Tahirul Islam, SVP and Branch Manager, Principal Branch, Social Investment Bank Limited.

1.2 OBJECTIVES OF THE REPORT

1.2.1 PRIMARY OBJECTIVE
i. To correlate theoretical learning acquired through classroom study with the real life business situation faced as an internee during the Internship period.

1.2.2 SECONDARY OBJECTIVES

The objectives of the organizational part the report are: ii. Name, Location, and Historical background of the SIBL. iii. Mission, Vision, slogan, and objectives of the SIBL. iv. Organizational Structure and description of various functional departments of SIBL. v. SIBLs strengths, weakness, opportunities, and threats.

1.3 METHODOLOGY
For this organization part only secondary data has been used. Secondary data collected from the website of SIBL, Published Journal, newspaper, and the Internet. Data analysis through statistical tools is not done in this objective part.

1.4 LIMITATIONS
i. ii. Insufficient Time Some information that the organization feels confidential for them, unwilling to provide.

1.5 AN OVERVIEW OF BANKING SECTOR IN BANGLADESH

The banking system of Bangladesh is a mixed one, comprising nationalized, private, and foreign commercial banks. The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4 nationalized commercial banks (NCB), 5 government owned specialized banks, 30 domestic private banks, 10 foreign banks and 28 non-bank financial institutions. The financial system also embraces insurance companies, stock exchanges, and co-operative banks. The commercial banking system dominates Bangladesh's financial sector with limited role of NonBank Financial Institutions and the capital market. (Financial System, 2006)

1.6 THE GENESIS OF ISLAMIC BANKING IN BANGLADESH

Islamic banks can provide efficient banking services to the nation if they are supported with appropriate banking laws, and regulations. This will help them introducing PLS modes of operations, which are very much conducive to economic development. It would be better if

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Islamic banks had the opportunity to work as a sole system in an economy. That would provide Islamic banking system to fully utilize its potentials. At birth, Bangladesh inherited an interest based banking system, which was introduced here earlier when the country was a part of British Colony. Since its inception Bangladesh saw a new trend in banking both at home and abroad. Islamic banking was successfully tried in Egypt. During the seventies, Islamic Development Bank (IDB) and a number of Islamic banks at national levels were established in the Islamic world. At home, the Islamic groups were vigorously working for adoption of Islam as the complete code of life. Two professional bodies Islamic Economics Research Bureau (IERB) and Bangladesh Islamic Bankers Association (BIBA) were taking practical steps for imparting training on Islamic Economics and banking to a group of bankers and arranging some national and international seminars/workshops to mobilize local and foreign people and to attract investors to come forward to establish Islamic bank in Bangladesh. Their professional and right-thought activities were streamlined by a number of enthusiastic businessmen in Bangladesh. They concentrated mainly in mobilizing equity capital for the prospective Islamic bank. Due to continuous and dedicated work of the above groups and individuals and active support from the Government, Islamic banking established in early eighties. Now Islamic banks have been operating in Bangladesh for about one and half decade alongside with the traditional banks. Out of over 49 banks only seven banks are Islamic banks. And besides these full-fledged Islamic banks, two conventional banks in the private sector namely the Prime Bank Limited and Dhaka Bank Limited have opened two full-fledged Islamic banking branches and Islamic Banking Counter respectively to deal with the Islamic banking business parallel to their conventional operations. Like any other traditional commercial banks, Islamic banks do mobilize deposits and produce loans. But their mode of operation is based on Shariah, which different from the other traditional commercial banks. However, the seven Islamic banks operating in Bangladesh are: Islami Bank Bangladesh Limited, Al-Arafa Islami Bank Ltd, Social Investment Bank Limited, Oriental Bank Limited, Shahjalal Islami Bank, Bank Al Falah Limited, and EXIM Bank Limited. (Sarkar, 1999)

1.7 ROLE OF BANGLADESH BANK IN PROMOTING ISLAMIC BANKING IN BANGLADESH

Though there is no complete Islamic Banking Act for controlling, guiding and supervising the Islamic banks in Bangladesh, some Islamic banking provisions have already been incorporated in the amended Banking Companies Act, 1991 (Act No. 14 of 1991). Bangladesh Bank did not set up any separate Department at its Head Office to control, guide, and supervise the operation of the Islamic banks. Inspection and supervision of the Islamic banking operations are conducted by the Bangladesh Bank as per the general guidelines framed for the conventional banks. So, ensuring implementation of Shariah principles in the Islamic banks are being conducted by their own Shariah Councils. The role of Bangladesh Bank in controlling, guiding and supervising the Islamic Banks in Bangladesh in accordance with Islamic Shariah is very minimal. In observing the Shariah implementation status of the Islamic banks, Bangladesh Bank examines only the report of the respective banks Shariah Councils. However, the inspectors and supervisors of Bangladesh Bank are not equally familiar with the technicalities of the different operational methodologies of the Islamic banking. This is because of the fact that there is no separate Department to look into this important matter. According to new proposed guidelines formulated by Bangladesh Bank, a commercial bank may form a separate company with Tk 100 crore paid up capital for providing Islamic banking services. The subsidiary company will need to off-load 49 percent of its share while the parent company may own the remaining 51 percent. As for the new Islamic banks, the proposed guidelines state that the sponsors will have to off-load 50 percent of the bank's shares and sponsor directors will not be allowed to own shares worth more than Tk 2.5 crore. It seems that Bangladesh Bank is creating unjustified trouble for the Islamic banks in the country and at the same time strongly discouraging other commercial banks to have separate Islamic, or interest-free windows that can run parallel with conventional windows. Difficult laws could not

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only act as hindrance for the growth of Islamic banks in Bangladesh but for the economic growth of the country as well. (Zahid, 2006)

2.0 ORGANIZATION PART

2.1 A SNAP SHOT OF THE COMPANY
Name of the Company Legal Form Date of Incorporation Date of Commencement Operation Structure : Social Investment Bank Limited. : A Joint Venture of Islamic Bank : 5th July, 1995 : 22nd November, 1995 : Three Sector banking system, Formal SectorCommercial Banking with latest technology; Non-Formal Sector- Family Empowerment Micro-Credit & Micro-enterprise Program and Voluntary Sector- Social Capital Mobilization through Cash Waqf and others. : 15, Dilkhusha C/A, Dhaka-1000 : +880 2 9564764, +880 2 9559241 : +880 2 9568098, +880 2 9564944 : 642425 DBL FX BJ : SOIVBDDH : 24 : sibl@bdonline.com : www.siblbd.com

Principal Branch Telephone Fax Telex SWIFT Code Number of Branches E-mail Web Site

2.2 HISTORY OF BIRTH OF SIBL

Social Investment Bank Limited is a fourth Islamic Bank in Bangladesh. It was incorporated on 5th July, 1995 and launched its banking operations of 22nd November, 1995. The authorized share capital of the bank was Taka 1000.00 million divided into one million shares of Taka1000.00 each. Social Investment Bank limited (SIBL) started its journey with the concept of 21st century Islamic participatory three sector banking, comprising Formal, Non-Formal & Voluntary Sector. While Formal Sector deals in general commercial banking with latest technology as a scheduled bank, Non-Formal Sector deals in Family Empowerment Micro-credit, MicroEnterprise and SMEs financing with a view to poverty reduction and unlock the potentials of the missing middle who had not been properly addressed by the Corporate Banking Sector. Under Voluntary Sector, the bank is doing Welfare-banking through its Cash Waqf Scheme, an innovative financial product for Social Capital mobilization introducing for the first time in the history of banking. Having inspired with the above program, few renowned personalities of the Islamic world namely (i) H.E. Dr. Hamid Al Gabid, Former Secretary General of OIC & Prime Minister of Niger (ii) H.E. Dr. Abdullah Omar Nasseef, Deputy Speaker of Saudi Shoura Council & Ex-Secretary General of Rabeta Al-Islami (iii) H.E. Ahmed M. Salah Jamjoom, Former Commerce Minister of Saudi Government & (iv) Prof. Dr. Ahmad El-Naggar (Egypt) have joined with this noble endeavor to assist the poverty alleviation of Bangladesh.

2.3 MISSION, VISION, SLOGAN, AND OBJECTIVES OF SIBL

2.3.1 Mission of SIBL
To provide high quality financial services with the latest technology. To provide fast, accurate and satisfactory customer service. Balanced & sustainable growth strategy. Optimum return on shareholders' equity.
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Introducing innovative Islamic Banking products. Attract and retain high quality human resources. Empowering real poor families and create local income opportunities. Providing support for social benefit organizations - by way of mobilizing funds and social services.

2.3.2 Vision of SIBL

Reduction of Poverty Level" is its Vision.

2.3.3 Slogan
Working Together for a Caring Society

2.3.4 Objectives of SIBL

To establish a partnership relationship with customers and to eliminate the idea of the debtor-creditor relationship of traditional banks. To establish welfare oriented banking system. To mobilize savings towards productive sectors. To invest on profit and risk sharing basis. To invest to those businesses sectors those are found legal from religious point of view. To accept deposits on profit and loss sharing basis. To create employment opportunities by investing savings towards prospective economic sectors. To extend banking services towards the poor, helpless and low-income group of people in the society in order to uplift of their standard of living. To contribute to establishment of a society by equitable distribution of wealth. To establish justice in trade and commerce in the country. To develop morals among the people and to establish the Shariah in the field of trade and commerce. To render services for the economic development of the nation. To contribute towards establishment of an Islamic Economic System in the Country.

2.4 BRANCH NETWORK OF SIBL

The total number of branches of SIBL is 24. 12 in Dhaka , 4 in Chittagong, 1 in Khulna , 1 in Sylhet, 1 in Rajshahi, 1 in Bogra, 2 in Shirajganj and 2 in Narayanganj.

2.5 ORGANIZATION STRUCTURE OF SIBL

2.5.1 MANAGEMENT OF SIBL
The bank is managed by a 24-member Board of Directors including three foreign directors and its sub-committee. The bank has also an 8-member Shariah Council consisting of Fuqaha, Islamic Economist and lawyer. The Council gives decision on Islamic issues which are followed by the bank. The Executive Committee includes Advisors, Chairman, Vice- Chairman, group of Directors, Managing Director. There is another committee of audit. The Executive Committee approves various proposals brought by the management prior to implementation. All proposals are placed to the committee throw the Managing Director of the Bank. All decisions are executed by two separate divisions: operation and business. A number of people are working under the MD; these people belongs to the second stage of the organizational structure, they are- group of Executive Vice president, number of Senior Vice presidents, then Vice presidents, again Senior Assistant Vice presidents, First Assistant Vice presidents and Assistant Vice presidents. The proposals are
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initiated by the mid level managers and then forwarded to the MD through the Head of Branches or the Head of Divisions.

2.5.2 ORGANIZATION CHART OF SIBL (FIGURE: 1)

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Figure 1: Organization Chart of SIBL

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Note (For Figure 1):

HRD= Human resource department

o Policy & Administration o Disciplinary & Appeal

SIBL TI= SIBL training institute

o Training o Library
BDMD= Business Division and marketing division

o Branches Control and General banking o Marketing and business development

GD= general services Division

o Premises, decoration and deed stock o Printings, stationary and stores o Transport and maintenances
ICTD= information and communication technology division

o Systems and installation o Banking network

FAD= Financial administration division

o Accounts and transaction o Reconciliation and fund management

MIS, P& RD= MIS, planning and Research division

o MIS( management information system) o Planning and research

ID= international division

o Depositors banking o Foreign exchange business operation o Treasury function

LD= law division

o Sanction ( legal action) o Follow up

NF & VBD= non formal & voluntary banking division

o non formal o voluntary banking

IRMD= investment risk management division

o investment approval o investment administration o end use and recovery

CBD= Corporate banking division

o project finance o syndicated finance

ICCD= internal control and compliance division

o audit, inspection o monitoring o compliance

PRD= public relations divisions MDS= managing directors squad MDS= managing directors secretariat CMS= chairmans secretariat

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2.5.3 FUNCTIONAL DIVISIONS AND DEPARTMENTS

SIBL is mainly operated in 3 Functional divisions/ sector: a) Formal Sector- Under this sector 3 departments are mainly operated: iii. General Banking Department iv. Investment Department v. Foreign Exchange Transaction Department b) Non-Formal Sector - Family Empowerment Micro-Credit & Micro-enterprise program are operated under this sector. c) Voluntary Sector - Social Capital mobilization through CASH WAQF and others are operated under this sector. Other departments are: Information & Communication Technology Division, Financial Administration Division, International Division, Business Development & Marketing Division, Audit & Inspection Department, Share Department, Human Resources Division, SIBL Training Institute, Law & Recovery Division, Law Department, Board Audit Cell, MIS, Planning & Research Division, Internal Control & Compliance Division and Investment Risk Management Division.

2.7 SWOT ANALYSIS OF SOCIAL INVESTMENT BANK LIMITED

STRENGTHS Up-to-date Technology. 24 branches all over the country with online banking facilities in 20 branches. Correspondent relationship with almost all major 122 Banks of 109 countries of the world. SWIFT at 9AD Branches. Different types of Islamic Banking Products. Experienced management team. Low employees turn over and satisfied management team. Social marketing practices made a good image to the society. WEAKNESSES Lower customer service quality. Insufficient number of ATM Booth. Inefficient Islamic Investment Risk Analysis and measurement methodology by the employees. Lack of Full-fledged Shariah Audit. Lack of Intention of the Management to be strict with Shariah Guidelines. OPPORTUNITIES o Increased demand of Islamic banking services. o Latent demand of different type of Islamic banking services.

THREATS 1. Lack popularity of PLS mode among the depositors. 2. Increased Competition from fellow Islamic banks and other conventional banks. 3. Declining Profit. 4. Lack of Shariah Manual or Guidelines. 5. Lack of Control and Supervision by the Central bank on the Basis of Islamic Shariah. 6. Economics slowdown and 7. Political Situation of the Country.

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3.0 PROJECT PART

3.1 INTRODUCTION
Buying decision behavior varies product to product as well as man to man. In order for the Islamic banking products or facilities to compete in the competitive banking industries, customer preferences and behavior to use Islamic banking facilities need to be satisfied. As financial intermediaries, one of the most important functions of the commercial banks is to extend finance to trade, commerce, industry, and the sundry borrowers. Such financing requires huge funds. The most important source of this fund is deposits. Deposits are often called the life blood of commercial banks. Modern commercial banking starts with deposits from the public followed by lending or financing trade, commerce, and industry. Given the fact that Banking industries either Islamic way or conventional way being very competitive, depositors satisfactions and preferences and buying behavior are very important in supporting the Islamic banking industries. For keeping deposits the depositors generally consider some factors like: return on deposit, fast and efficient service, banks reputation, and image, and, the speed of transaction, and friendly bank personnel, convenient location. For the Islamic banks some other facts like profit loss sharing, Islamic cultures followed by the bank are also get importance for selecting Islamic bank. Therefore, knowing what are the factors that leads to customer preferences or non-preference to keep deposit in any bank will give a competitive advantage to SIBL in promoting their Islamic banking products or facilities.

3.2 PROBLEM STATEMENT

Social Investment Bank Limited is an Islamic Bank having 24 branches all over the country with different types of banking services and products. It is developing and expanding its branches in the country with innovating products, and banking services, to gain greater acceptance as an effective and efficient means of intermediation and to contribute to the overall wealth creation. To gain greater acceptance, to contribute to overall wealth creation and compete with other conventional banks, the factors that contribute to depositors preference to select SIBL need to be studied.

3.3 OBJECTIVES OF THE REPORT

The objectives of the project part are: To find out depositors preferences factors to select any bank to keep their deposits. To find out the reasons for preferring some specific factors than other factors to keep deposits.
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To know SIBLs Depositors perception about SIBL as an Islamic bank. To find out SIBLs depositors belief about using Islamic banking services and their level of interest to use Islamic banking services. To find out SIBLs Depositors level of satisfaction and their expected changes about SIBL. To find out the buyer group of deposit products of SIBL. To know SIBLs major functions, and its products

3.4 SCOPE OF THE REPORT

The scope of the report is limited among the existing deposit product Depositors of SIBL, principal branch, Dilkhusha, Dhaka.

3.5 METHODOLOGY
3.5.1 RESEARCH DESIGN
The research is descriptive research as because it is designed to describe the characteristics or buying behavior of the population.

3.5.2 SOURCES OF INFORMATION

For this project part both primary and secondary data has been used. Primary data has been collected through a survey, which was done on the depositors of SIBL, principal branch with a structured and disguised questionnaire. And secondary data has been collected from SIBL, books and published journal of SIBL.

3.5.3 SAMPLE DESIGN

i. ii. iii. Target Population: The depositors of SIBL Principal Branch, Dilkhusha, Dhaka. Sampling Frame: The sample frame is the list of account holders in SIBL principal branch, Dilkhusha, Dhaka. The list was collected from the SIBLs office. Sampling Method: Convenient sampling method used to conduct the study. The account holders who have come to the SIBL, principal branch, to do their transactions are interviewed with the structured questionnaire. Sample Size: The number of account holders in SIBL, Principal Branch is 20000. From it, 0.5% is chosen as sample size. The Sample size = 20000* 0.5% = 100

iv.

3.5.4 QUESTIONNAIRE DESIGN

The questionnaire is a structure and disguised questionnaire. Buying behavior is influenced by different factors and characteristics of the Depositors. Here cultural factors were not considered as all the Depositors of SIBL are Muslim and follow Islami and Bangladeshi culture. And social factors were not considered as it would be difficult to analyze and take long time. To analyze the Personal factors, respondents were asked some personal information through multiple response questions. To analyze Psychological factors such as perception, attitude, questions asked through multiple response questions and belief through a five point Likert scale. To evaluate the Depositors preference factors to keep deposit in any bank, in the questionnaire some common factors (that generally people consider to keep deposit) are given to the respondents to evaluate them according the importance to them to select any banking services for keeping their deposits, in a five point Likert scale. To measure the post purchase behavior, Depositors satisfaction level

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about SIBL, asked through 5 point Likert scale. Expectations or wants of the respondents about SIBLs different services are asked through multiple response questions. And there are two open end questions asking the reason for preferring specific type of return on deposit and recommendations by the respondents to SIBL.

3.5.5 FIELD WORK

Data collected through personal interviewing with structured questionnaire by the researcher himself.

3.5.6 ANALYZING AND REPORTING OF THE FINDINGS

For analyzing data Simple tabulation had been done. These data analyzed using the software SPSS 12.0 and MS Excel. Analyzed data represented through pie and bar graphs and some tables are also used to represent the data.. Findings are based on the data analysis. And the core of the report divided into four parts. The first part includes an introduction about Islamic banks in Bangladesh. The second part of the report includes elaborate description about the organization. The third presents a literature survey, an in-depth analysis of the data collected; findings, recommendation and conclusion, and the last part of the report include appended part of the report.

3.6 LIMITATIONS
The duration of the study is very short and analyzing depositor buying behavior and preference is a very complicated process. So the adequate analytical tools for proper evaluation of depositor buying behavior to select SIBLs banking facilities could not be used. For time and cost constraints, the sample size had to be restricted to 100 only. It was very hard to fill up the questionnaires as the A/C holders who come in SIBL to use the banking facilities are very busy by nature. The findings of the survey were based on the SIBLs depositors of principal branch, Dilkhusha, Dhaka City; the results may not reflect the same for other branches of SIBL as well as for other areas of the country. As convenient sampling method used and as it is a non probability sampling method, random sampling error may occur.

3.7 LITERATURE SURVEY

3.7.1 CONSUMER BUYING BEHAVIOR
Consumer buying behavior can be formally defined as: the acts of individuals directly involved in purchasing and using economic goods and services, including the decision making processes that precede and determine the acts of purchasing and using economic goods and services. This is a system in which the individual consumers surrounded by an immediate and a wider environment that influences his or her goals. These goals are ultimately satisfied by passing through a number of problem-solving stages leading to purchase decisions. (Kotler & Armstrong, 2003-2004) The main functions of commercial banks are acceptance of deposits, lending, and investment. And ancillary services include agency services, collection, and payment of cheques, payment on behalf of customers, purchase, and sale of stocks, acting as trustee, opening letter of credit, safe custody, etc. So generally people select any banking services to satisfy the need of keeping their deposit, taking loans, and having other ancillary services. To select any banking services to keep deposits, Depositors will ideally consider Bank's reputation and image, Availability of wide range of services, Return on deposits, Bank Location and number of branches, Operations hours,

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Service quality, Service charges, Availability of other facilities (like ATM, online banking etc), type of bank (like MCB, PCB, NCB) etc. There are wide differences between the conventional banking system and Islamic banking system. The main difference is that, profit and loss sharing practice of Islamic banks. So the Depositors of conventional banks and Depositors of Islamic banks consider different factors to keep their deposits. Such as: to select any Islamic bank people may also consider the Banking system (like Shariah based banking system or Traditional banking system), Organization culture, strictness in following the Shariah law to run the banking system etc. (Hegazy, 1995) So it is imperative for SIBL to understand why people choose which type of banking system, either conventional banking system or interest-free banking system, to satisfy their financial needs.

3.7.2 MODEL OF CONSUMERS BUYING BEHAVIOR

The task of marketing is to identify consumers needs and wants accurately, then to develop products and services that will satisfy them. For marketing to be successful, it is not sufficient to merely discover what customers require, but to find out why it is required. Only by gaining a deep and comprehensive understanding of buyer behavior, marketings goals can be realized. Such an understanding of buyer behavior works to the mutual advantage of the consumers and marketer, allowing the marketer to become better equipped to satisfy the consumers needs efficiently and establish a loyal group of consumers with positive attitudes towards the companys products. The central question for marketer is: how do consumers respond to various marketing efforts that the company might use? The starting point is the stimulus response model of buyer behavior shown below (Figure 2). The figure shows that marketing and other stimuli enter into buyer black box and produce certain responses. The marketer wants to understand how the stimuli are changed into responses inside the consumers black box, which has two parts. First, the buyer characteristics influence how he or she perceives and reacts to stimuli. Second, the buyers decision process itself affects the buyer behavior. (Kotler & Armstrong, 2003-2004) Figure 2: Model of Consumers Buyer Behavior Marketing and Other Stimuli Buyer Black Box Marketing Product Price Place Promotion Other Economic Technological Political Cultural Buyer characteristics Buyer Process decision

Buyer Responses Product choice Brand choice Dealer choice Purchase Timing Purchase amount

3.7.3 CHARACTERISTICS AFFECTING CONSUMERS BUYING BEHAVIOR

Consumers purchases are influenced strongly by cultural, social, personal, and psychological characteristics (Kotler & Armstrong, 2003-2004). Depositors of SIBL are mostly Muslims who follow Islamic culture. Other characteristics like social factors, personal factors of the Depositors are different. Motivation, perception, learning, and belief about Islamic banks strongly influence the depositors to select SIBLs services as it an Islamic bank.

3.7.4 TYPES OF BUYING- DECISION BEHAVIOR

Buying behavior differs greatly for product to product and man to man. There are four type of buying behavior according to the Depositors involvement in purchase and differences found among different brands (Figure 3). (Kotler & Armstrong, 2003-2004)

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Figure 3: Types of Buying- decision Behavior High Involvement Low Involvement

Figure 4: The Buyer Decision Process Significant differences between the brands Few differences between the brands Complex behaviour buyer Variety behaviour Habitual behaviour seeking

Dissonance-reducing behaviour

buying

Selecting banking services generally shows complex buyer behavior as they are highly involved in a purchase services and perceive significant differences among different banking services. But as buying decision behavior also varies man to man, it may be variety seeking behavior as people generally seek different type of banking facilities and do switching from one bank to another when they found significant differences. Or it may be dissonance buying behavior as people generally have post purchase dissatisfaction and change their bank when they perceive another one better.

3.7.5 THE BUYER DECISION PROCESS

Customers go through a five-stage decision-making process in any purchase. This is summarized in the diagram below: (Figure 4). (Kotler & Armstrong, 2003-2004) Different types factors that people consider selecting any bank to keep deposit and to get loans. To select any banking services to keep the deposits, Depositors will ideally search information about return on deposit, operation hour, service quality etc. and evaluate these different factors among different banks and then do their purchase.

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3.8 TARGET MARKET OF SIBL

The target customers of SIBLs different deposit products are: Individuals person (lived in both village and city area, age above 18, both male and female and all social classes people in Bangladesh) Sole proprietorship, Private limited company, Public limited company, Partnership firm Co operative society (Professor. Dr. Mannan, 1995)

3.9 BANKING SERVICES BANGLADESH

OF

THE

SOCIAL INVESTMENT BANK

IN

Social Investment bank offers different type of services to its target customers. To attract depositors it offers wide range of deposit schemes and other banking services. Here all types of banking services of SIBL are discussed:

3.9.1FORMAL BANKING SERVICES OF SIBL

3.9.1.1 CORPORATE BANKING OF SIBL
SIBL offers a full range of tailored advisory, financing, and operational services to its corporate client groups combining trade, treasury, investment, and transactional banking activities in one package. Whether it is project finance, term loan, import or export deal, a working capital requirement or a forward cover for a foreign currency transaction, SIBLs Corporate Banking Managers offers the corporate clients the right solution.

3.9.1.2 CONSUMER BANKING OF SIBL

Consumer banking programme offers a comprehensive range of Islamic banking products and services matching the need of every discerning customer. Transactional accounts, savings schemes, cash Waqf schemes, or loan facilities from SIBL provide its customers a rare service quality.

3.9.1.2.1 DEPOSIT PRODUCTS OF SIBL o

Al Wadiah Current Deposit Scheme: Al Wadiah Current Deposit A/C is opened on proper introduction with minimum initial deposit fixed by the Bank. Al Wadiah Deposit is accepted on Al Wadiah principles which mean Al Amanah with permission to use. According to this principle, Bank can use the fund of the account along with other funds as per Shariah at bank's own risk. Account holder(s) will not share any profit/loss. The Law and regulation of Bangladesh, usual customs and procedures common to banks in Bangladesh including Islamic Banking Principles shall apply to and govern the conduct of account opened with the Bank. Mudaraba Savings Deposit Scheme: To open a Mudaraba Savings Deposit account in SIBL the following rules and regulations are applied: Mudaraba Savings Deposit of one party and on the basis of operation by another party this deposit is taken, by providing Introducer of the account as required by the bank and by depositing a minimum amount any depositor or multiple depositor can open single or joint account. Any educational institute, Club, Association or Social institutes can open this account, the bank may merge amount collected through this deposit and may invest in any Shariah allowed investments and after determining the annual profit/loss the depositor will get his part of profit.
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Mudaraba Monthly Profit Scheme: Under this scheme the depositor will get monthly profit on the deposited amount. The scheme provides monthly profit for service holders who may deposit the pension benefit. For those Bangladeshis working abroad willing to deposit once and provide a fixed amount monthly to family and relative residing in Bangladesh. Hajj Scheme: Hajj is one of the most important bases of Islam. Religious Muslims tends to perform Hajj when they gather financial ability. But they find it difficult to gather the required amount to perform as there is no such systematic way of saving the money. To help the Muslim brothers Social Investment Bank Ltd introduced Hajj/Umrah Scheme. Any Muslim Residing in Bangladesh may open an account under this scheme, and this scheme will be accounted under Mudaraba rules. The account holder will have to enjoy the Profit / Loss of the Banks respective year. Mudaraba Double Benefit Deposit Scheme (MDBDS): The features of the scheme are that A/C holders have to keep deposit in every a fixed definite time such as: 1 month, 6 month etc and after a fixed period he/ she will get double of the principal amount. Any desirous person may open the A/C, with minimum Tk 10,000/- or above. Mudaraba Millionaire Scheme: Most of the people of Bangladesh are the followers of Islam. They are mostly interested to make interest free deposits. Taking these facts into consideration SIBL introduced a monthly installment based "Mudaraba Millionaire Scheme". Tk. 550/-, Tk. 1050/- or Tk. 2050/- is taken as monthly installment under Mudaraba principles of Islami Shariah, Duration of this scheme will be 15, 20 and 25 yrs. Mudaraba Special Savings (Pension) Scheme: Generally people wants save a portion of their income for economic assurance at old ages. Taking the above reasons into account Social Investment Bank Ltd. had introduced monthly installment based "Mudaraba Special Savings (Pension) Scheme". Under this scheme any person can deposit a fixed amount monthly and after maturity the depositor will get a handsome amount with increased profit. The depositor may encash the total amount at a time or can take as monthly pension until a stipulated time. Mudaraba Education Savings Scheme: Education expenditure especially for higher studies is increasing day by day. In many cases children lose the chance of education as their guardians become unable to adjust with the expenditure. But if proper financial planning is adopted earlier then it is easier for the parents to bear the expenses. For these reasons SIBL has introduced "Education Savings Scheme", which is based on Shariah Principles. This scheme would enable the parents to bear child's educational expenses in a planned manner. Any amount of Tk. 25,000/- or multiple is accepted in this scheme. Mudaraba Bashstan Savings Scheme: Housing has become one of the most fundamental needs of human civilization. But most of the people of Bangladesh are lacking to fulfill this basic need. As a follower of Islamic Shariah, Social Investment Bank Ltd focuses forward to help people to fulfill this basic need. The depositor will enjoy earnings from investments under Islami Shariah based Mudaraba rules. As per rules of Islami banking the actual amount may vary from the estimated amount. Mudaraba Term Deposit scheme: Mudaraba Term Deposits are accepted by the bank with a sum of Tk. 5000 or above (multiple of 1000) from individuals (single and joint), firms (proprietorship/partnership), limited companies, autonomous bodies, charitable institutions, association, educational institution, local bodies, trusts, etc, against issuance of non transferable receipts in acknowledgement of MTD account may be opened in the names of minors jointly with their guardians Mudaraba Mohrana Savings Scheme: As every male Muslims has given his wife mohrana after his marriage, SIBL has recently introduced this Scheme; where people can keep their deposit for a certain period with changing profit rate.
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o o

Mudaraba Marriage Savings Scheme: SIBL recently has introduced this savings scheme to make it easier for people to bear the cost marriage ceremony. Mudaraba Foreign Currency Term Deposit Scheme (MFCTD): Bangladeshi nationals residing, working and earning abroad / foreign nationals residing in Bangladesh and also Foreign Firms registered abroad and operating in Bangladesh / Foreign missions and their expatriate employees may open this account. A/C may be opened in US Dollar, Pound Sterling or other eligible currencies at the option of the A/C holder.

3.9.1.2.2 ONLINE BANKING SERVICES OF SIBL

SIBL is providing Online Banking Service to its clients since January 2004 amongst 20 branches of SIBL through which its customers have access to their A/C from another branch. The Bank has deployed this On-Line Banking system through V-Sat communication. The Information & Communication Technology (ICT) Department is closely monitors the online transactions. Online Transactions are executed by the PcBANK2000 integrated banking software through a secured database and worldwide tested V-Sat Communication Link.

3.9.1.2.3 ATM & CREDIT CARD SERVICES OF SIBL

SIBL has introduced E-Cash ATM Debit Card service since June 2004 through E-Cash ATM booths within Dhaka, Chittagong, Sylhet, Rajshahi, and Cox's Bazaar city. Any body, who has a Current/Savings/Short Notice Deposit Account in SIBL in any branch, he/she can apply for E-Cash ATM Debit Card from that branch. Customer can get 24-hour Cash Withdrawal service including holidays and can pay Grameen, Aktel and City Cell mobile phone bill through E-Cash ATM Booth. Now the bank has only 14 ATM booth in Dhaka city and 4 in other cities.

3.9.1.2.4 ANCILLARY SERVICES OF SIBL

Locker Service: Safe locker service is available at its Dhanmondi Branch & Gulshan Branch. Client may keep his/her valuable ornaments, documents etc. into the locker against a nominal yearly fee. Utility Bill Receive: In the formal corporate sector, this Bank would, among others, offers the most up-to date banking services through collection of bills like as gas bill, WASA bill, Bangladesh Telephone & Telegraph bill, and Electric bill.

3.9.1.3 CORRESPONDENT BANKING OF SIBL

It have correspondent relationship with almost all major 122 Banks of 109 countries of the world like Standard Chartered Bank, American Express Bank Limited, HSBC, HBZ Finance, Mashreq Bank PSC, Dresdner Bank AG and with local banks in Pakistan, India, Nepal and Bhutan etc. with whom it had advising, reimbursing and add confirming arrangement.

3.9.1.4 LOAN, ADVANCES, AND CREDIT FACILITIES OF SIBL

SIBL has mainly three types of loan and credit facilities: o Bai-Muazzal: Bai-Muazzal is a contract between Buyer and Seller under which the seller sells certain specific goods ( permissible under Shariah and Law of the country ), to the Buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification of the Buyer. This mode is applicable for working capital financing. SIBL gives this type of loan in four sectors: commercial, house hold, Real estate, and Trust

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receipt where loan is allowed in the form of cash credit against hypothecation of goods & collateral security o HPSM: Hire Purchase (Participatory Ownership) is a Special type of contract which is a synthesis of three contracts: 1. Shirkatul Melk: Shirkat means partnership. Shirkatul Melk means participation in ownership. SIBL and other parties supply equity, purchase an asset; own the same jointly, and share the benefit as per agreement and bear the loss in proportion to their respective equity, the contract is called Shirkatul Melk contract. 2. Ijarah: The term Ijarah has been derived from the Arabic words Ajar and Ujrat which means consideration, return, wages, or rent. This is the exchange value or consideration, return, wages, rent of services of an ASSET. Ijarah has been defined as a contract between two parties, the Hiree and Hirer where the Hirer enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Hiree. It is a hire agreement under which a certain asset is hired out by the Hiree to a Hirer against fixed rent or rentals for a specified period. SIBL act as a hirer. 3. Sale: This is a sale contract between a Buyer and a seller under which the ownership of certain goods or asset is transferred by seller to the buyer against agreed upon price paid / to be paid by the buyer. Here SIBL act as seller who buy the goods as an agent of a party and sold the good to the party at the previously determined price. Thus in Hire Purchase (participatory ownership) mode between SIBL and its clients supply equity in equal or unequal proportion for purchase of an asset like land, building, machinery, transport etc. Purchase the asset with that equity money, own the same jointly; share the benefit as per agreement and bear the loss in proportion to their respective equity. The share, part, or portion of the asset owned by the Bank is hired out to the client partner for a fixed rent per unit of time for a fixed period. Lastly the Bank sells and transfers the ownership of it's share / part / portion to the client against payment of price fixed for that part either gradually part by part or in lump sum within the hired period after the expiry of the hire agreement. (1) Murabaha: Murabaha is a contract between a Buyer and Seller under which the Seller sells certain specific goods permissible under Islamic Shariah and Law, to the Buyer at a cost plus agreed profit payable in cash on any fixed future date in lump sum or by installments. The profit marked-up may be fixed in lump-sum or in percentage of the cost price of the goods. In case of Murabaha SIBL procures the goods as per indent of the customer, retain it in its custody and sell the same part by part or at a time to the client who gave indent for the goods.

3.9.1.5 FOREIGN EXCHANGE TRANSACTION SERVICES OF SIBL

Foreign Exchange Trade of SIBL is dealt with its 9AD branches out of which 4AD branches are in Dhaka and the remaining 5AD are in Chittagong, Khulna, Sylhet, Rajshahi, and Bogra. o Export Finance: To facilitate the import obligation of the Bank as well as considering the requirement of foreign currency of the country it encourage potential exporters to do their export business with them. It provides working capital on their requirement. Presently its export finance is extended for RMG and for non-traditional item that is handled by a number of experienced bankers. It offers competitive exchange rate for foreign currency to our valued exporters. o Import Finance: SIBL also deals in import business and its import business is extended to commercial importers (traders) for import of various Shariah approved items and industrial importers (Users) for import of raw cotton, yarn, clinker, pharmaceutical raw materials, TV parts, Computer parts etc raw materials for their industries. It also provides post import finance.
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o Foreign Remittance: SIBL is playing an important role in the Foreign Remittance

sector also. It has correspondent relationship with almost all major 122 Banks of 109 countries of the world. Visitors of SIBLs website can download its Foreign Currency Current Account (FCCA) Opening Form from the Download Section to open FCCA account to send remittances. SWIFT: SIBL is the member of SWIFT and it has 9AD SWIFT workstations in its 9AD branches. Besides its 24 branches are equipped with online banking. It is trying to keep all the SWIFT workstations under online system. Inward remittances are credited to the beneficiarys account on the same day of receipt if the beneficiary maintains A/C with them or within next 24 hours on receipt of the same from our overseas correspondents. All correspondences of foreign trade both export and imports are communicated through SWIFT. As a result foreign exchange trades become expeditious and instant.

3.9.2 NON FORMAL BANKING SERVICES OF SIBL

Family Empowerment Micro-Credit Program: Family Empowerment Micro-Credit Program is designed to develop the Socio-economic condition of the grass-root people committed to build a caring society by reducing poverty through income generation for small and low-income families, under which financing is provided without collateral. Family empowerment Micro-Credit Program is a group-based lending. Investment is provided for maximum three years @ 10% return per annum at flat rate where maximum ceiling of Investment is Tk.25,000/-. Family Empowerment Micro-Enterprise Program: Family Empowerment MicroEnterprise program is introduced to enhance the Socio-economic condition of the potential entrepreneur, small and medium Businessmen, successful Micro-Credit graduates through income generating activities. Ceiling of investment is from Tk.50, 000/= to Tk.5, 00,000/= @ 10% return per annum at flat rate for maximum three years. Investment up to Tk.50, 000/= is provided without collateral. In case of investment of above Tk.50, 000/= minimum collateral security is required. Family Empowerment Micro-Enterprise Program (SMEs): Considering the potentiality of SMEs sector, SIBL has launched Family Empowerment Micro-enterprise program (SMEs) to fulfill the diversified need of SMEs clients. Investment ceiling under this program is from Tk.2, 50,000/= to Tk.5, 00,000/=@ 14% return per annum for one year on revolving basis. Small, Medium and Micro-Enterprise Development Program jointly with JOBS project, USAID: On the basis of Memorandum of Understanding (MoU) signed in 2001 between Social Investment Bank Ltd. and Job Opportunity and Business Support (JOBS), collaborative efforts are being made to create easy access to business capital for the Small Medium and Micro-Enterprises (SMEs) through enhancing the capacity and performance of the entrepreneurs with available technical assistance from JOBS to be financed through Social Investment Bank Ltd. under Family Empowerment Micro-Credit and MicroEnterprise Program.

3.9.3 VOLUNTARY BANKING SERVICES OF SIBL

Cash Waqf Scheme: SIBL had introduced Cash Waqf Certificate, a new product for the first time in the history of banking in Bangladesh. Cash Waqf provides a unique opportunity for making investment in different religious, educational and social services. Savings made from earning by the well off and the rich people of the society can be utilized in our organized manner. Income earned from these funds will be spent for different purposes like the purposes of the Waqf properties itself. Cash Waqf is an endowment in conformity with Shariah, bank manages the Waqf on behalf of the waquif and Waqfs are done in perpetuity and the A/C is opened in the title given by the waquif. Waquif have the liberty
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to choose the purpose(s) to be served either from the list of 32 purposes identified by the bank, covering (a) family empowerment credits, (b) Human resource development, (c) Health and sanitation and social utility services, or any other purpose(s) permitted by Shariah. Cash Waqf amount earns profit at the highest rate offered by the Bank from time to time. Cash Waqf amounts remain intact and only the profit amount is spent for the purpose(s) specified by the waquif. Unspent profit amounts automatically added to Waqf amount and earn profit to grow over the time. Waquif can also instruct the Bank to spend the entire profit amount for the purpose specified by him/her. Mosque Waqf Property Development Scheme: As a declared corporate policy, the Bank intends to help mosque and Waqf property holders with free consultation & technical support so as to make it economically & socially self-sustained. The bank has completed a small project for development of a mosque property at Uttar Khan, Dhaka. (Social Investment Bank Limited, 2006)

4.0 ANALYSIS OF THE DATA AND SURVEY FINDINGS

The results found after analyzing the data which were collected through interview with the structured questionnaire, are described here:

4.1 IMPORTANCE OF DIFFERENT FACTORS FOR SELECTING ANY BANKING SERVICES TO KEEP DEPOSITS
Respondents were given 12 different factors (that people generally consider to select any bank to keep deposit) to evaluate the factors according to importance to them to select any banking services to keep their deposit. After analyzing the data the following results are found (Figure 5):

o o o o o o o o o o

40% of the respondents evaluate bank reputation and image as very important, 30% evaluate as not important and 30% evaluate as not very important Banking system evaluated as very important by 30% respondents, important as 20%, moderately important by 20%, not important by 30%. Availability of wide range of services evaluated as very important by 20% respondents, important by 10%, moderately important by 50% and not very important by 20% respondents. Return on deposit evaluated as very important by 60% respondents, important by 20%, not important by 10% and not very important by 10% respondents. Organization culture evaluated as important by 20% respondents, moderately important by 70% respondents and not very important by 10% respondents. Bank location and number of branches evaluated as important by 40% respondents, moderately important by 40% respondents and not important by 20% respondents. Operations hour evaluated as very important by 10% respondents, important by 70% respondents and moderately important by 20% respondents. Service quality evaluated as important by 30% respondents, important by 40% respondents and moderately important by 30% respondents Service charge evaluated as very important by 10% respondents, important by 30% respondents, moderately important by 20% respondents, not important by 30% and not very important by 10% respondents. Availability of other facilities (like ATM, online banking etc) evaluated as important by 40% respondents, moderately important by 30% respondents and not important by 30% respondents.

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o o

Ownership type of bank (like MCB, PCB, NCB) evaluated as important by 10% respondents, moderately important by 10% respondents, not important by 40% and not very important by 40% respondents. Other factors evaluated as moderately important by 10% respondents, not important by 20% respondents and not very important by 70% respondents. Figure 5

After calculating the sum and average of the factors, it is found that, Banking system, Return on deposits, Operations hours and Service quality are important factors; Bank's reputation and image, Availability of wide range of services, Organization culture, Bank Location and number of branches, Service charges and Availability of other facilities( like ATM, online banking etc) are moderately important; Ownership type of bank( like MCB, PCB, NCB ) is not important and Other factors is not very important to select any banking services to keep deposit to the respondent. (table 1: Sum, Average, and rank of the Factors for selecting any banking services and example of average calculation are given in appendix, page 47, table 5) Table 1, Sum, Average, and rank of the Factors for selecting any banking services Factors Sum Average Round Importance Rank
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value

Bank's reputation image Banking system

and

290 350 310 410 300 320 390 400 300 310

2.9 3.5 3.1 4.1 3 3.2 3.9 4 3 3.1

3 4 3 4 3 3 4 4 3 3

Moderately Important Important Moderately Important Important Moderately Important Moderately Important Important Important Moderately Important Moderately Important

(accordin g to average) 8 4 6 1 7 5 3 2 7 6

Availability of wide range of services Return on deposits Organization culture Bank Location and number of branches Operations hours Service quality Service charges Availability of other facilities( like ATM, online banking etc) Ownership type of bank( like MCB, PCB, NCB ) Other factors

190 140

1.9 1.4

2 1

Not Important Not very Important

9 10

After calculating the sum and average of the factors, it had been ranked in the following way according to the value of average: ( table 1) i. Return on deposits ii. Service quality iii. Operations hours iv. Banking system v. Bank Location and number of branches vi. Availability of other facilities (like ATM, online banking etc) and Availability of wide range of services vii. Service charges and Organization culture viii. Bank's reputation and image ix. Ownership type of bank (like MCB, PCB, NCB) x. Other factors From the ranking of the factors, it is seen that, return on deposit is the most important factor for selecting any banking services to keep deposits, and then service quality and then operations hour are important to the respondents. Ownership type of the bank and other factors are least important factors for selecting any banking services to keep deposits to the respondents.

4.2 TYPES OF RETURN PREFER MOST

One important characteristic of Islamic banks is that sharing profit and loss with the depositors. So return on deposits in Islamic banks in not ensured and changes with time. Respondents were asked which type of return they prefer most between ensured and unensured return on deposit. 80% of the respondents said that they prefer ensured return on deposit and only 20% said that they
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Figure 6

prefer uninsured return on deposit (Figure 6). Return on deposit is the 1st important factor among 12 factors to select any banking services to keep deposits. (Table 1, page 27)

4.3 REASON FOR PREFERRING THAT SPECIFIC TYPE OF RETURN ON DEPOSIT

Respondent are asked why they prefer that specific type of return. Most of them who prefer ensured return on deposit said the following reasons, which are almost similar. o It is better to be ensured about the return as it is safe o No risk of having lower amount of deposit o There is no loss in such type of return on deposit Respondents who said that they prefer unensured return on deposit has given the following the reasons for preferring uninsured return on deposit, which are almost similar. o As this is the main feature of Islamic banking system they prefer unensured return on deposit. o As business has risk to do loss, depositors should share the risk as this procedure is fair. So most of the respondents dont want to take risk related to their deposits and prefer ensured return on deposits.

4.4 KEEP DEPOSIT IN ANOTHER BANK NOT, IF GET HIGH AND ENSURED RETURN
Respondent are asked whether they will keep deposit in another bank rather SIBL, if they found ensured and high return on their deposit. 60% of the respondents said that yes they would change their bank and 40% said no, they would not change the bank, they will stay in SIBL. (Figure 7) And from the following table (table 1) it can be seen that, 60% respondents (who said that they prefer ensured return on deposit) said they will keep their deposits in another
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Figure 7

bank from SIBL if they get high and ensured return on their deposits. But 20% respondents (who said that they prefer ensured return on deposit) said they will not keep their deposits in another bank from SIBL if they get high and ensured return on their deposits. And 20% respondents, who said that they prefer unensured return on deposit, said they will not keep their deposits in another bank from SIBL if they get high and ensured return on their deposits. Table 2: Cross tab (type of return prefer most* Keep deposit in another bank rather SIBL if get high and ensured return on deposits) Type of Return on deposit prefer most Unensured Ensured return on return on Total deposit deposit Whether one Keep deposit in Yes 60 0 60 another bank from SIBL if one get No 20 20 40 high and ensured return on Total 80 20 100 deposits As most of the respondents prefer ensured return, most of them will change SIBL to keep deposit if the get high and ensured return in another bank.

4.5 WHETHER ONE FEELS COMFORTABLE TO DO TRANSACTIONS IN SIBL IN ITS SHARIAH CULTURE
SIBL follow Shariah based organization culture such as: female employees covered with scarf and coats, azan at prayer time, welcome with salaam etc, which is different from other traditional banks organizational culture. Organization culture or environment has an impact on the consumers on their buying behavior. Certain type of environment makes the Depositors comfortable and influences to do their purchase, and certain type of environment may have negative impact. So Respondents were asked whether they feel comfortable to do transactions
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Figure 8

in SIBL in its Shariah culture to find that whether there is any effect of Islamic organization culture of SIBL on their Depositors. And all the respondents said that they feel comfortable to do transactions in SIBL in its Shariah culture (Figure 8). So we can say that SIBL Shariah culture dont have any negative effect on the Depositors rather it have a positive effect.

4.6 WHETHER ENGAGING IN ISLAMIC BANKING FACILITIES WILL ALLOW TO CONFORM TO SHARIAH OR NOT
Figure 9 Belief is a descriptive thought that a person holds about something. As belief make up product and brand images and affects buying behavior, respondent were asked whether they believe that Engaging in Islamic banking facilities will allow them to conform to Shariah as this kind of belief may influence them to select Islamic banking services. 80% of the respondents said yes, they believe that engaging in Islamic banking facilities will allow them to conform to Shariah. And 20% said no, they dont believe so (Figure 9). So as most of the respondents believe that Engaging in Islamic banking facilities will allow them to conform to Shariah, it obviously positively affects their behavior in selecting Islamic banking services.

4.7 LEVEL OF INTEREST TO USE SHARIAH BANKING SERVICES THAN TRADITIONAL BANKING SERVICES
Respondents were asked how much intersted they are to use shariah banking services than tradinal banking services as to measure their attitude toward Islamic banking. 30% of the respondents said that they are very interested to use shariah banking services than tradional banking services, 40% of respondents said they are intersted and 20% said they are moderatly intrested and 10% said that they are not intersted to use shariah banking services than traditional banking services (Figure 10). So most of the respondent has positive attitude toward islamic banks and are interrested to use islamic banking services than traditional banking services. (page 47, Table 6, row 4, value=4 means interested)
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Figure 10

4.8 HOW STRICTLY THE ISLAMIC BANKS IN BANGLADESH FOLLOWING ISLAMIC SHARIAH PRINCIPLES TO RUN BANKING BUSINESS
To find out the perception about Islamic banks in Bangladesh, respondent were asked what they think, How Strictly the Islamic Banks in Bangladesh following Islamic Shariah principles to run banking business. 70% of the respondents think that, Islamic Banks in Bangladesh following Islamic Shariah principles moderately strictly to run banking business. And 30% of the respondents think that, Islamic Banks in Bangladesh not strictly following Islamic Shariah principles to run banking business (Figure 11). So according to the respondents Islamic banks in Bangladesh following Islamic Shariah principles moderately strictly to ran banking business. (page 47, Table 6, row 1, value=3, means moderately strictly) Figure 11

4.9 HOW STRICTLY SIBL FOLLOWING ISLAMIC SHARIAH PRINCIPLES TO RUN BANKING BUSINESS
Figure 12 To find the perception about SIBL as Islamic bank, respondents were asked what they think, How Strictly the SIBL following Islamic Shariah principles to run banking business. 90% of the respondents think that, SIBL following Islamic Shariah principles moderately strictly to run banking business. And 10% of the respondents think that, SIBL following Islamic Shariah principles strictly to run banking business (Figure 12). So according to the respondents SIBL following Islamic Shariah principles moderately strictly to ran banking business. (page 47, Table 6, row 2, value=3, means moderately strictly)

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4.10 LEVEL OF SATISFACTION ABOUT SIBL

To measure post purchase behavior, respondent were asked to state their level of satisfaction in 5 point Likert scale. 40% of the respondent said that they are very satisfied about SIBL, 10% of the respondent said that they are satisfied about SIBL, 40% of the respondent said that they are moderately satisfied about SIBL and 10% of the respondent said that they are not satisfied about SIBL (Figure 13). So the respondents are moderately satisfied about SIBL. (page 47, Table 6, row 3, value=3, means moderately satisfied) Figure 13

4.11 CHANGES NEEDED IN SIBLS BANKING SYSTEM

Figure 14 Then respondents were asked how SIBL need to have changes in some factors, to increase their satisfaction to use SIBLs services. They were given several factors. About its banking system, according to 80% of the respondents, SIBL need to follow Shariah based banking system strictly. According to 20% of the respondents no change needed about the banking system. (Figure 14)

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4.12 CHANGES NEEDED IN SIBLS DIFFERENT BANKING SERVICES

About different banking services, according to 70% of the respondents SIBL need to introduce more Islamic services, according to 20% of the respondents SIBL need to introduce more services, according to 10% of the respondents SIBL needed no change about there different banking services (Figure 15). It means there is a huge demand of Islamic banking services as well as other type of traditional banking services among its depositors. Figure 15

4.13 CHANGES NEEDED IN SIBLS ORGANIZATION CULTURE

Figure 16 About SIBLs organization culture, according to 70% of the respondents SIBL should strictly follow Shariah culture, and according to 30% of the respondents SIBL needed no changes in their organization culture. (Figure 16)

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4.14 CHANGES NEEDED IN SIBLS BRANCH NUMBER

About SIBLs branch number, according to 80% of the respondents SIBL need more branches and according to 20% of the respondents no change needed. (Figure 17) Figure 17

4.15 CHANGES NEEDED IN SIBLS OPERATIONS HOUR

Figure 18 About SIBLs operations hour, according to 80% of the respondents operation hour need to be increased. Acccording to 20% no change needed about operation hour of SIBL. (Figure 18)

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4.16 CHANGES NEEDED IN SIBLS SERVICE QUALITY

About SIBL service quality, according to all of respondent, SIBL need to improve their service quality. (Figure 19) Figure 19

4.17 CHANGES NEEDED IN SIBLS SERVICE CHARGE

Figure 20 About SIBL service charge, according to 70% of the respondents it needed to be reduced. And according to 30% of the respondents SIBL need no change about their service charge. (Figure 20)

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4.18 CHANGES NEEDED IN SIBLS OTHER FACILITIES (LIKE ATM, ONLINE BANKING)
About SIBLs other facilities, according to 90% of the respondent SIBL need to increase other facilities like ATM, online banking. And according to 10% of the respondents no change needed about other services of SIBL. (Figure 21) Figure 11

4.19 NUMBER OF ACCOUNT HOLDERS IN DIFFERENT ACCOUNTS IN SIBL (IN %)

Am ong all the acc oun t hold ers, 52 % of the acc oun t hold
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ers are saving deposit account holder and 25% are current deposit holders, 11% are term deposit holder and 5.3% are pension scheme holders. Number of Account holders of other accounts is very low. SIBL provide interests on the saving account deposits, term deposit account, and other accounts except current account. As it was found that, return on deposit is the most important factor among different factors for selecting banking services to keep deposits, this may be reason of large number of account holders in savings account and term account. (Figure 22) Figure 22

(Source: SIBL, list of account holders in different accounts)

5.0 DEMOGRAPHIC INFORMATION ANALYSIS

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Respondent were asked some personal information to analyze the personal factors.

Figure 23

5.1 AGE
10% of the respondents age is below 25, 50% of the respondents age is between 25 to 34, 20% of the respondents age is between 45 to 54 and 20% of the respondents age is 55 or above 55 (Figure 23). So most of the respondents are young people and others are middle age people who are using the SIBLs deposit products and other banking services.

5.2 GENDER
80% of the respondents are male and other 20% of the respondents are female (Figure 24). In Bangladesh most of the women are not financially independent and influenced by the male partner in their important purchase decision like banking services. So it may be the reasons why the female respondents ratio is low. And SIBL also need to consider these social factors to develop their deposit products. Figure 24

5.3 MARITAL STATUS

Figure 25
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80% of the respondents are married and 20% of the respondents are single (Figure 25). SIBL need to consider this factor to develop their deposit products, as married and single people have a very different life style. A single person may be willing to take risk but a married person may not be willing to take risk related to his/ her deposits( such as unensured return on deposit, which may give a lower return) as he/ she have the responsibility of his/ her family.

5.4 EDUCATIONAL QUALIFICATION

30% of the respondents have done masters, 30% of the respondents have done bachelor degree, 10% of the respondents have completed higher secondary school, 10% of the respondents have completed secondary school, 10% of the respondents current qualification is below secondary school, and 10% have other type of qualification (Figure 26). So it can be said that all the respondents are literate. Figure 26

5.5 OCCUPATION
Figure 27 40% of the respondents are job holder, 30% of the respondents are businessmen, 10% of the respondents are professionals, 10% of the respondents are house wife, and 10% of the respondents are students (Figure 27). Other than the business
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persons, other type of occupational people may not be willing to take risk related to unensured return on deposits.

5.6 GROSS FAMILY DISPOSABLE INCOME (MONTHLY)

Figure 28 60% of the respondents have gross family disposable income taka 20,000 or below, 20% of the respondents have gross family disposable income between taka 20,001 to taka 40,000, 20% gross family disposable income between taka 40,001 to taka 60,000 (Figure 28). According to the earnings saving habit would differ, SIBL should consider the family disposable income to develop the deposit product.

5.7 CROSS TAB ANALYSIS OF THE DEMOGRAPHIC INFORMATION

Cross tab analysis done on the demographic information found from the survey and it is found that the buyer group of deposit products of SIBL are mostly male (80%), most of them are young people (50%) who are 25 to 34 years old, most of them (60%) have gross family income below or equal to tk. 20000, most of them are job holder(40%) and business man (30%) and among the business man 10% are female, most of them have done bachelor (30%) and masters(30%) , and most of them are married (80%). (Table: 3) Table 3: Cross Tab Analysis of the Demographic Information Gender
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Total

Male Below 25 Age 25-34 45-54 55 or Total Gross family disposable income (monthly) Total Professional Job Holder occupation Student Own business Housewife Total Educational Qualification Below secondary school Secondary school Higher secondary school Bachelor Masters Others Total Marital Status Total Married Single Tk. 20,000 or below Tk. 20,001 - Tk. 40,000 Tk. 40,001 - Tk. 60,000 10 40 10 20 80 40 20 20 80 10 40 10 20 0 80 10 0 10 20 30 10 80 60 20 80

Female 0 10 10 0 20 20 0 0 20 0 0 0 10 10 20 0 10 0 10 0 0 20 20 0 20 10 50 20 20 100 60 20 20 10 10 40 10 30 10 100 10 10 10 30 30 10 10 80 20 100

6.0 FINDINGS AT A GLANCE

3. Return on deposit is the most important factor for selecting any banking services to keep deposits, then service quality and then operations hour is most important to the respondents. Then Banking system, Bank Location and number of branches, Availability of other facilities (like ATM, online banking etc) , Availability of wide range of services, Service charges and Organization culture are the important factors for selecting any banking services. 4. Bank's reputation and image, Ownership type of the bank and other factors are the least important factors for selecting any banking services to keep deposits to the respondents. 5. 80% of the respondents said that they prefer ensured return on deposit and only 20% said that they prefer unensured return on deposit.
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6. Reasons for preferring ensured return on deposit that the respondents said are: It is better to be ensured about the return as it is safe, no risk of having lower amount of deposit, and there is no loss in such type of return on deposit. 7. Reasons for preferring unensured return on deposit that the respondents said are: As unensured return on deposit is the main feature of Islamic banking system they prefer this, and as businesses have risk to do loss, depositors should share the risk as this procedure is fair. 8. 60% respondents, who said that they prefer ensured return on deposit, said that they will keep their deposits in another bank from SIBL if they get high and ensured return on their deposits. But 20% respondents, who said that they prefer ensured return on deposit, said they will not keep their deposits in another bank from SIBL if they get high and ensured return on their deposits. And 20% respondents, who said that they prefer unensured return on deposit, said they will not keep their deposits in another bank from SIBL if they get high and ensured return on their deposits. 9. All the respondents said that they feel comfortable to do transactions in SIBL in its Shariah culture. 10. 80% of the respondents said that, they believe that engaging in Islamic banking facilities will allow them to conform to Shariah. And 20% said that, they dont believe so. 11. 30% of the respondent s said that they are very interested to use shariah banking services than tradional banking services, 40% of respondents said they are intersted and 20% said they are moderatly intrested and 10% said that they are not intersted to use shariah banking services than traditional banking services. 12. 70% of the respondents think that, Islamic Banks in Bangladesh following Islamic Shariah principles moderately strictly to run banking business. And 30% of the respondents think that, Islamic Banks in Bangladesh not strictly following Islamic Shariah principles to run banking business. 13. 90% of the respondents think that, SIBL following Islamic Shariah principles moderately strictly to run banking business. And 10% of the respondents think that, SIBL following Islamic Shariah principles strictly to run banking business. 14. 40% of the respondent said that they are very satisfied about SIBL, 10% of the respondent said that they are satisfied about SIBL, 40% of the respondent said that they are moderately satisfied about SIBL and 10% of the respondent said that they are not satisfied about SIBL. 15. According to 80% of the respondents, SIBL should strictly follow Shariah based banking system. According to 20% of the respondents no change needed about the banking system. 16. According to 70% of the respondents SIBL need to introduce more Islamic services, according to 20% of the respondents SIBL need to introduce more services, according to 10% of the respondents SIBL needed no change about there different banking services. 17. According to 70% of the respondents SIBL should strictly follow Shariah culture, and according to 30% SIBL needed no change in their organization culture. 18. According to 80% of the respondents SIBL need more branches and according to 20% of the respondents no change needed. 19. According to 80% of the respondents operation hour need to increase. Acccording to 20% no change needed about operation hour of SIBL. 20. According to all of respondent, SIBL need to improve their service quality. 21. 70% of the respondents said it needed to be reduced. And according to 30% of the respondents SIBL need no change about their service charge. 22. According to 90% of the respondent SIBL need to increase other facilities like ATM, online banking. And according to 10% of the respondents no change needed about other services of SIBL.

7.0 RECOMMENDATION AND CONCLUSION

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7.1 RECOMMENDATION o As return on deposit is the most important factor for keeping deposits and 80% of the
respondents prefer ensured return deposit but as 80% of the respondents believe that Engaging in Islamic banking facilities will allow them to conform to Shariah, SIBL should immediately give attention in the promotion of the image of as an Islamic bank as PLS based bank by demonstrating to their Depositors that, it is fair for the society, it helps their financial activities in a way that do not contradict the principles of Shariah and enable them to conduct their financial transactions without indulging into Riba (Interest) and will help in establishing a just economic system free from all kinds of exploitation. Strategies have to be carefully devised so that the image of Islamic character as a bank is simultaneously promoted. Pilot schemes in some selected areas should be started to test innovative ideas with profit-loss-sharing modes of financing as a major component. SIBL should clearly demonstrate to their Depositors by their actions that their banking practices are guided by profitability criterion thereby establishing that only Islamic banking practices ensures efficient allocation of resources and provide true market signals through PLS modes. As respondents are moderately satisfied about SIBL, it should have the following changes: As service quality is the second important thing and as all the respondents want improvement in service quality of SIBL, SIBL must improve their service quality. As operation hour is the third important factor for selecting any bank to keep deposit and as 80% of the respondent wanted operations hour to be increased, SIBL should increase their operation hour. As banking system is the fourth important factor for selecting any banking services and as 80% of respondents want SIBL to follow Islamic Shariah, it should follow Shariah system strictly to run their banking business. As bank location and branch number is the next important factor and as 80% of the respondents want more branches of SIBL, it should increase the number of branches. Availability of other facilities (like ATM, online banking etc) and Availability of wide range of services are next important factors. 90% of the respondents want SIBL to increase the facilities of ATM and online banking and 70% of the respondents want more Islamic banking services, so SIBL should increase ATM, online facilities and introduce more Islamic banking services. As Service charge is the 7th important factor and as 70% of the respondents want it to be reduces, SIBL should reduce its service charge. As organization culture is the next important factor and all the respondents said that they feel comfortable to do their transactions SIBL Shariah culture and 70% of them want SIBL to follow Shariah culture more strictly, SIBL should strictly follow Shariah culture. As most of the respondent are interested to use shariah banking services than tradional banking services but most of them said that they will keep their deposit in another bank rather SIBL if they get high and ensured return, so SIBL should take steps to increase the knowlegde of depositors about islamic banking practices and increase awareness that islamic banking practices is good for the sociaty and Bangladeshs economy as a whole. SIBL as an Islamic bank, facing the growing competition either from fellow-Islamic banks or from the conventional banks which have launched Islamic banking practices, it has to adapt its functioning in line with modern business practices, through improvement and expansion of the range of dealing in the banking sector. Thus, it is necessary for SIBL to provide comprehensive banking and investment services to clients and simultaneously to take advantage of modern technological breakthroughs in areas such as electronic communication, computerization etc.

o o o o o

o o o

7.2 RECOMMENDATION TO SIBL AUTHORITY BY THE RESPONDENTS

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To maintain Shariah system to run the banking business, some respondents gave some recommendations to SIBL, like: o SIBL need to be more conscious to follow Shariah rules. o SIBL should introduce more Islamic banking services. o SIBL should introduce alternatives of interests. o Jakat based banking services or Islamic financial instruments should be introduced.

7.3 CONCLUSION
Government should think actively for the promotion of Islamic banking in Bangladesh considering its pro-development role. It should amend existing financial laws, acts, and regulations to create favorable environment conducive to smooth operation of Islamic banks. There seems to be a gap between the ideals and actual practice of Islamic banks in Bangladesh. In their reports, booklets, bulletins and posters there banks express their commitment to striving for establishing a just society free from exploitation. But a little progress has been achieved so far in that direction. There should be a through review of policies that have been pursued by these Islamic banks for about a decade and points of departure have to be identified to redesign thereof action.

8.0 APPENDED PART

8.1 TABLES
Table 4, weight of different options in Five Point Likert scale 5 4 3 2 1 very interested/ strictly/satisfied interested / strictly/satisfied Moderately interested / strictly/satisfied Not interested / strictly/satisfied Not interested / strictly/satisfied

Table 5, Average Calculation example: Bank's reputation and image Importance Not very Important Weight 1 Frequency 30

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Not Important Moderately Important Important Very Important

2 3 4 5

30 0 0 40

Sum=

(1*30)+(2*+30)+(3*0)+(4*0)+(5*40) = Average= 290/n =290/100= 2.9

290

Table 6: value of Different questions answers asked through five point Likert scale Questions How strictly the Islamic banks in Bangladesh following Islamic Shariah principles to run banking business How strictly SIBL following Islamic Shariah principles to run banking business How much satisfied you are about SIBL How much interested to use Shariah banking services than traditional banking services Sum = 70*3+30*2 = 10*4+90*3 =40*5+10*4 +40*3+10*2 =30*5+40*4 +20*3+10*1 Average value =270 270/ 100 310/ 100 380/ 100 380/ 100 =2. 7 =3. 1 =3. 8 =3. 8 Round value =3 Moderately Strictly Moderately Strictly Moderately Satisfied Interested

2 3 4

=310 =380 =380

=3 =3 =4

8.2 QUESTIONNAIRE
Dear Respondent, I am a student of Department of Business Administration, Jahangirnagar University. I am going to conduct a study on SIBLs Depositors. This study is only for use of my academic purpose and the provided information will be treated confidentially. Thank you in advance for your kind cooperation.

Please evaluate the following factors according to the importance to you, for selecting any banking services to keep your deposits. ( please tick) Very Important Important Moderately Important Not Important Not very Important

Factors Bank's reputation and image Banking system( like Shariah based banking system or Traditional banking system)

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Availability of wide range of services Return on deposits Organization culture Bank Location and number of branches Operations hours Service quality Service charges Availability of other facilities( like ATM, online banking etc) type of bank( like MCB, PCB, NCB ) Other factors

o o

Which one you prefer most and why? {Please tick () and explain below}

Unensured return on your deposit (2) Ensured return on your deposit _______________________________________________________________________________ _____________________________________________________________________________ Will you keep your deposit in another bank rather SIBL if you get high and ensured return on your deposits? (1) Yes (2) No Do you feel comfortable to do your transaction in SIBL in its Shariah culture (like female employees covered with scarf and coats, azan at prayer time, welcome with salaam etc)? (1) Yes (2) No Do you believe that, engaging in Islamic banking facilities will allow you to conform to Shariah? (1) Yes (2) No How much interested you are to use Shariah banking services than traditional banking services? {Please tick () in the empty box} Very Interested Interested Moderately Interested Not Interested Not very Interested

How much satisfied you are about SIBL? Very satisfied satisfied Moderately satisfied Not satisfied Not very satisfied

In the following factors how SIBL need to have changes to increase your satisfaction to use SIBLs services? o Banking system Need to follow Shariah based banking system more strictly / Need to follow traditional banking system/ no change needed o Different type of services Need to introduce more Islamic services/ Need to introduce more services/ no change needed

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o Organization culture need to follow Shariah culture strictly / need to follow traditional o o o o o
culture/ no change needed No. of Branches Need to have more branches/ no change needed Operations hours need to increase/ no change needed Service quality need to improve/ no change needed Service charges need to reduce/ no change needed Other facilities (like ATM, online banking etc) need to increase/ no change needed

What do you think, how strictly the Islamic banks in Bangladesh following Islamic Shariah principles to run banking business? {Please tick ()} Very strictly strictly Moderately strictly Not strictly Not very strictly

What do you think, how strictly SIBL following Islamic Shariah principles to run banking business? {Please tick () in the empty box} Very strictly strictly Moderately strictly Not strictly Not very strictly

Would you like to recommend something to SIBL bank authority to make it a truly Islamic bank? (Please recommend briefly) _______________________________________________________________________________ _____________________________________________________________________________ {Please tick () your responses to the following questions} Your Age: or more (1) Below 25 (2) 25-34 (3) 35- 44 (4) 45-5 (5) 55

Your Gender: (1) Male (2) Female Marital status: (1) Married (2) Single What is your last earned educational qualification? (1) No formal education (2) Below secondary school (4) Higher secondary school (5) Bachelor (7) Others (Please specify) ________

(3) Secondary school (6) Masters

Which of the following best describe your current occupation? (1) Professional (Doctors, lawyers, engineers, journalist etc.) (2) Job Holder (3) Police /Army (4) Academic/ educators (5) Student (6) Own business (7) Housewife (8) other (Please specify) _____ Your Gross family disposable income (monthly): (1) Tk. 20,000 or below (2) Tk. 20,001 - Tk. 40,000 (3) Tk. 40,001 - Tk. 60,000 (4) Tk. 60,001 - Tk. 80000 (5) Tk. 80,001 - Tk. 100,000 (6) More than Tk. 100,000 .Thank you for your kind cooperation.

9.0 BIBLIOGRAPHY

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(2006, December). (Social Investment Bank Limited) Retrieved December 10, 2006, from Social Investment Bank Limited: http://www.siblbd.com Financial System. (2006, December). (Bangladesh Bank) Retrieved December 12, 2006, from Bangladesh Bank: http://www.bankladesh-bank.org Hegazy, I. (1995). An empirical comparative study between Islamic and conventional banks selection criteria in Egypt. International Journal of Contemporary Management , 5 (3), 46-61. Kotler, P., & Armstrong, G. (2003-2004). Principles of Marketing (10th ed.). Pearson Education International. Professor. Dr. Mannan, M. (1995, November 22). Target Market. SIBL- Alternative of Traditional Bank and Cooperative Society, A Three Sector Unique Banking Model , 8 (1999), pp. 6-7. Sarkar, A. A. (1999). Islamic Banking in Bangladesh: Performance, Problems & Prospects. International Journal of Islamic Financial Services , 1 No.3, 1. Zahid, Z. (2006, July 21). Why This Hullabaloo Over Islamic banking? Retrieved December 10, 2006, from The daily Star: http://www.thedailystar.net

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