Daffodil International University

ASSIGNMENT

ON

Shahjalal Islami Bank Ltd.

Course Title : Financial Institution & Capital Market

Submitted To:

Professor Rafiqul Islam

Faculty of Business & Economics

Submitted By:

1. Md. Adnan AlamgirId : 102-14-128

2. Md. Atiqur Rahman PatwaryId : 102-14-135

3. Md. Imran HossainId : 101-14-013

4. Md. Faruk Hossain Id : 102-14-134

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Date of Submission : 30.12.2010

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Letter of Transmittal

December 30, 2010

Professor Rafiqul Islam

Faculty of Business and Economics

Daffodil International University, Bangladesh

Subject: Submission of the Assignment report.

Dear Sir,

It is a great pleasure for ours to submit the report on “Sahajalal Islami Bank Ltd”. This report will help us to understand system of organization.

This time we have done a correlation study in a complete form and we have tried our best to complete the study in proper way. It is true that it could have been done in better way if there would not be the limitations.

We hope you will asses our report considering the limitations of the study. Your kind advice will encourage us to do further research in future.

Sincerely yours,

Md. Adnan Alamgir

ID : 102-14-128

Md. Atiqur Rahman Patwary

ID : 102-14-135

Md. Imran Hossain

ID : 101-14-013

Md. Faruk Hossain

ID : 102-14-134

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AcknowledgementAcknowledgement

We are very glad that in spite of many limitations I have completed the report successfully.

Preparing this report, I received cordial and sincere assistance from many concerns.

First of all I wish to thanks the Almighty Allah, the supreme authority of the universe. I am also

quietly and heartily indebted to my parents who always inspire, encourage and support me to

pursue such study.

We express our deep sense of gratitude and sincere appreciation to my respected teacher Professor Rafiqul Islam for his guidance tolerance, sincerity and wholehearted contribution till the ending of my report. We are under his supervision during the assignment duration and preparation of my report.

We are profoundly grateful to the Managing Director of Shahjalal Islami Bank Ltd, for his kind

consideration to our report in this bank. We are very much grateful to him.

We are grateful to Mr.Nahid Anwer & Md. Abu Hasan, First Vice President, and Branch in

charge of Banani Branch for his kind co-operation and assistance to arrange practical

observation. It is our duty to thank all the officials of Shahjalal Islami Bank Ltd, Motijheel

Branch. Specially Mr. Md. Nazmul Hasan(Principal Officer), Mr. Tanzeem Ahmed(Executive

Officer),Mr. Md. Ashraf-us-Salehin(Officer), who co-operate us very sincerely during our

assignment period. Besides, We would like to express our sincere gratitude to Mr. Md. Abul

Kamal(AVP), Shamima Akter(FAVP) for their constant help.

Finally, I would like to convey my gratitude to all my teacher, friends & many other who extend their support to prepare this report.

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Table of ContentTable of Content

PPARTICULARSARTICULARS PPAGEAGE NONO

Executive SummaryExecutive Summary

1.1 Islamic Banking Concepts 07

1.2 Objective of the Study 07

1.3 Methodology of the Study 08

1.3.1 Sources of Data: 08

1.3.2 Analysis of Data : 09

1.3.3 Area of Study : 09

1.4 Scope of the Study 09

1.5 Limitation of the Study 09

2.1 Monetary Policy and Islamic Banking In Bangladesh 09

2.2 Islamic Banking vs. Conventional Banking 10

2.3 Differences between Profit and Interest 11

3.1 Historical Background of SJIBL 12

3.2 Objectives of Shahjalal Isami Bank Ltd 12

3.3 Visions and Mission of SJIBL 13

3.4 Organizational Structure of SJIBL 13

3.5 Management Hierarchy of SJIBL 14

3.6.1 Branches of Shahlalal Islami Bank Ltd 15

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3.6.2 Relationship with Other Bodies 16

3.7 Internal Control and Monitoring 16

3.8 Capital Market Services 16

3.9 Products of SJIBL 17

4.1 Description of Deposits as a Product 17

4.2 New Product tor 2010 22

4.3 Services of SJIBL 22

4.4 Automation in Banking Operation 22

4.5 Operational Activities of SJIBL 23

4.6 General Banking Division 24

5.1 Investment Division 25

5.2 Foreign Exchange Division 25

6.1 Conclusion 27

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Executive SummaryExecutive Summary

Shahjalal Islamin Bank Ltd. is a private commercial bank which is 6th Islamic Shariah based bank in Bangladesh. The Bank started its operation on 10th May 2001, during this period it could improve its image in the society as on Islamic Bank. Now it has 16 Branch in Bangladesh. All branches are situated in the highly commercial areas.

As a new bank, Shahjalal Islamic Bank Is Offering different type of deposit scheme bearing higherst rate orf returns. Mudaraba Deposit Scheme, Monthly income scheme & Millionaire are the most popular offers that are widely accepted by the clients.

SJBL is playing a vital role in developing of the country & putting the national economy competitive with world economy. Developing country like Bangladesh urges a huge amount of investment both in the private & investment public sectors. SJIBL has been providing a lot of assistances regarding this investment process through its investment department. During last 5 yrs. SJIBL has steady growth on investment of the Bank. The total investment to the Bank stood at Tk.20616.60 million in 2007, where it was Tk.15515.79 million in 2006. The performance of the SJIBL as whole is said to be quite standard.

I have tried to incorporate every kinds of relevant information in my report focusing mainly on overall function of SJIBL as a brief such as general banking, investment procedure & Foreign exchange operation. By Analyzing the investment operations of the Bank, I have found some problems ( Limited Number of Branch & Investment Modes, Lack of Promotional Activities for the advertisement of its product & service & training programs for the employees, Insufficient Portfolio due to Limited Operation, Lengthy Loan Sanction Process etc.) , for which I made some recommendation as well. At this moment the bank’s need to expanding geographically , should open up new branches in strategically important places.

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1.1 Islamic Banking Concepts

Islamic Banking is a banking system whose operation is based on Islamic principles ofwhich profit and loss sharing is major feature, ensuring justice and equity in the economy.That is why Islamic banks are often known as profit and loss sharing banks.

The General Secretariat of the Organization of Mamie Conference (OIC) in its Foreign Ministers Conference held in Senegal in 1978 approved the definition of Islamic Bank as"a financial institution whose statutes rules and procedures expressly state its commitment to the principles of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operations".

According to Islamic Banking Act of Malaysia, an Islamic Bank is a "company, which carries on Islamic Banking business, Islamic Banking business means banking business whose aims and operations do not involve any element which u not approved by the religion Islam."

It appears from the above definitions that Islamic banking is systems of financial intermediation that avoids receipt and payment of interest in its transactions and conducts its operations in a way that it helps to achieve the objectives of an Islamic economy. The main objectives of Islamic Banking are:

• To establish participatory banking instead of banking on debtor-creditor relationships

• To invest through different modes permitted under Islamic Shariah.

• To accept deposits on profit - loss sharing basis.

• To extend co-operation to the poor, the helpless and the low - income group for their economic enlistment.

• To play a vital role in human development and employment generation,

• To contribute towards balanced growth and development of the country though investment operations particularly in the less developed areas.

• To contribute in achieving the ultimate goal of Islamic economic system.

1.2 Objective of the Study

The study has been carried out with the following objectives:

• To present an overview of SJIBL.

• To distinguish between Conventional banking and Islamic banking.

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• To explain the different product on SJIBL.

• To identify the problem of the operation of SJIBL.

1.3 Methodology of the Study

For smooth and accurate study everyone has to follow some rules & regulations- During

my study I have followed some methodology to meet the goal of this report, which is

given bellow:

1.3.1 Sources of Data:

Different data and information are required to meet the goal of this report- Those data and

information were collected from various sources, such as, primary and secondary which is

showed below :

Primary Sources :

Primary sources include in depth interviews and face-to-face conversation with officers

and executives of the bank of different divisions. Information and data regarding

Overview of SJIB, interest rates & charges, credit operations, performance measurement

in Lending, credit policies. Loan Agreement etc. were collected from these sources.

Secondary Sources :

Secondary sources of information include -

• Internet and Annual report of SJIBL,

• Investment manual of SJIBL,

• Progress report/ Statement affairs and Bank Rate sheet of the Bank,

• Several kinds of Academic test-book and training sheet.

• Different publications regarding banking functions.

• Prior research reports on various Banks.

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Sample Size : 26(Number of officers 6 & number of customers 20).

Sampling Method : Convenience sampling method has been followed for collecting data.

1.3.2 Analysis of Data :

This is a descriptive report mainly aiming to depict the investment mechanism of Shahjalal Islami Bank Ltd. I have used some statistical tools (average, percentage etc), graphical and tabular presentation mostly with the help of Microsoft Excel to analysis the data.

1.3.3 Area of Study :

There are three main functional areas of the bank. They are General Banking, Investment Area and Foreign Exchange Area. But my project was limited in investment function of SJIBL,

1.4 Scope of the Study

Shahjalal Islami Bank Limited (SJIBL) is now well growing and it's containing twenty- two Branches in Dhaka and outside of the Dhaka. The scope of the study will be limited to the organizational setup, function and operation of the SJIBL especially on Banani Branch but not the entire realm of the SJIBL. This report mainly encompasses Shariah based investment management of SJIBL.

1.5 Limitation of the Study

Banking sector is very sensitive and competitive by its nature. So, data of this report is not available and the interviewees might not disclose accurate facts and figures about foreign exchange and other activities. However I have faced the following problems during the study:

• Time constraints: The duration of my internship Program was only three months. But this three months time is not enough for arranging an internship report in a well recognized.

• Insufficiency of valuable data and information: Due to some legal obligation and business secrecy banks are reluctant to provide data. For this reason, the study limits only on the available published data and certain degree of formal and informal interview.

• Lack of perfect co-operation: The bankers are very busy with their jobs, which lead a little time to consult with them.

2.1 Monetary Policy and Islamic Banking In Bangladesh

The central bank has the sole authority to issue currency and manage the liquidity of the economy. Among others, the objective of the monetary policy is to ensure stability of the value of Taka and regulate the banking system prudently. As a central bank, Bangladesh Bank was not aloof from the ongoing changes in the world financial system. Bangladesh Bank had issued

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license in 1983 for establishment of the first Islamic bank in Bangladesh. The Bangladesh Government had participated in establishing the Bank, by subscribing five percent share in the paid up capital. Considering lack of Islamic financial markets and instruments or products in the country, Bangladesh Bank had granted some preferential provisions for smooth development of Islamic banking in Bangladesh.

Among the preferential provisions, the following are important

1. Islamic banks in Bangladesh have been allowed to maintain their Statutory Liquidity Requirement (SLR) at 10% of the total deposit liabilities while it is 20% for the conventional banks. This provision had facilitated the Islamic banks to hold more liquid funds for more investment and thereby generate more profit.

2. Under indirect monetary policy regime, Islamic banks were allowed to fix up their profit-sharing ratios and mark-ups independently commensurate with their own policy and banking environment. This freedom in fixing PLS ratios and Mark-up rates bad provided scope for the Islamic banks to follow the Shariah principles independently for realizing goals of Islamic Shariah.

2.2 Islamic Banking vs. Conventional Banking

In Islamic Banking accounting the main difference with conventional Banking is that Islamic Banking can’t deal with interest transaction and also con not deal with Haram Business. Point wise differences between Islamic Banking and conventional Banking Particularly in Accounting Transactions are summarized below:

Islamic Banking Conventional Banking

1. Islamic Banking follows Quaran,Sunnah, Ijma and Kias i.e. Shariah in all business transactions including Accounting Entries.

1. Conventional Banking follows man made practice and rule.

2. They can not engage any interest in the transactions/ Harain(prohibited) business.

2. They conduct their Transactions on interest basis and also engage in Haram (prohibited) business.

3. If any interest is including/ entered in the operations of the banks ft should be excluded from the regular income.

3. Interest is their main income.

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4. If any income is earned violating Shariah principles that can’t be included in the income of the bank.

4. They do not follow Sharia rule and regulation.

5. In Musharaka investment, income cannot be accounted for on accrual basis.

5. In conventional banking there is no practice of Musharaka Investment.

6. For delay of investment, in case of Bai -Murabaha and Bai-Muazzal Investment further amount of profit cannot be changed.

6. No such Bai- Muraba and Bai- Muazzal investment in conventional Banks. They charge interest / penal interest for delay inpayment.

7. In case of overdue Investment compensation may be charged if an independent committee decided to impose the compensation.

7. They charge interest / penal interest on overdue investment.

8. Islamic Bank is to pay Zakat on its reserves. 8. They do not pay any Zakat on reserves.

9. Islamic Banks are to pay a certain agreed amount of investment income(agreed in percentage) to the Mdaraba Depositors.

9. They do not pay a certain amount to the depositor from their Investment income, rather they pay fixed rate of interest irrespective of Investment Income.

2.3 Differences between Profit and Interest

Profit Interest

1. It's relation with buying and selling

2. Time and labor is considered

3. It is uncertain and not determined

4. It has risk for losses

5. Profit can determined for one time

6. It is permissible by Shariah (i.e. Halal)

1. It's relation with time and loan

2. Time and labour is not considered

3. It is sure and determined (fixed)

4. It has no risk for losses

5. Interest determined again and again

6. It is not permissible by Shariah (Haram)

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3.1 Historical Background ol SJIBL

Shahjalal Islami Bank Limited is based on Islamic Shariah. SJIBL is named after the name of a saint Hajrat Shahjatal who dedicated his life for the cause of peace in this world and hereafter and served the humanity. It was incorporated as a Public limited company on 1" April, 2001 under companies Act 1994. It started its Banking operation on May 10, 2005 with the 1" branch (main branch) opened at 58, Dilkusha C/A, Dhaka, obtaining the license of Bangladesh Bank, for enlistment of economic condition of its customers as well as to contribute sustainable economic growth and development in trade and industry of the country. During Last five years SJIBL has increased its service coverage by opening new branches at different strategically important locations across the country. The bank has the plain to go for initial public offerings (IPO) of share, which will assist the bank to raise its paid up capital. SJIBL provides a wide range of shariah based commercial banking services. Its corporate head quarter is situated at 10, Dilkusha Commercial Area, Jiban Biroa Bhaban, Dhaka - 1000, Bangladesh. Now it has 16 branches 9 branches are in Dhaka and rest 7 branches are in Chittagong, Sylhet and Gajipur. The sponsors of SJIBL are leading business personalities and renowned industrialist of the country. Alhaj Sajjatuz Jumma is the present and founder chairmen of the bank having business experiences of more than 26 years in the field of electronics, food and education.

Alhaj Sajjatuz Jumma is the present and founder chairmen of the bank having business experiences of more than 26 years in the field of electronics, food and education.

3.2 Objectives of Shahiolol htami Bank Ltd

From time immemorial Banks principally did the functions of moneylenders or "MohaJans" but the functions and scope of modern banking are now-a-days very wide and different. They accept deposits and lend money like their ancestors, nevertheless, their role as catalytic agent of economic development encompassing wide range of services is very important. Business commerce and industries in modem times cannot go without banks. There are people interested to abide by the injunctions of religions in all sphere of life including economic activities. Human being is value oriented and social science is not value-neutral. Shahjalal Islami Bank believes in moral and material development simultaneously. "Interest" or "Usury" has not been appreciated and accepted by "the Tawrat" of prophet Moses, "the Bible" of prophet Jesus and "the Quran" of Hazrat Muhammad (SM). Efforts are there to do banking without interest Shahjalal Islami Bank Limited avoids "interest" in all hs transactions and provides all available modem banking services to its clients and want to contribute in both moral and material development of human being. No sustainable material well being is possible without spiritual development of mankind, Only material well-being should not be the objective of development- Socio-economic justice and brotherhood can be implemented better in a good-fearing society.

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Objectives of Shahjalal Islami Bank include:

• To establish interest-free and welfare oriented banking system.

• To help in poverty alleviation and employment generations.

• To contribute in sustainable economic growth.

3.3 Visions and Mission of SJIBL

Visions of Shahjalal Islami bank Limited are:

• Enhance customers' trust & wealth, quality investment, employees' value and rapid growth in shareholders' equity.

• To provide quality services to customers.

• To set high standards of integrity.

• To extend customers innovation services acquiring state-of-the-art technology blended with Islamic Principles, and being total satisfaction to our clients and employees.

Millions of Shahjalal Islami Bank Limited are:

• To expand Islamic banking through welfare oriented banking system.

• Ensure equity and justice in economic activities.

• Extend financial assistance to poorer section of the people.

• Achieve balance growth and equitable development.

3.4 Organizational Structure of SJIBL

Objectives of Organizational Stmcture and Corporate governance of Shahjalal Islami Bank limited is to establish a strong, customer oriented and transparent Management.

There are five different wings to consist the organizational structure of SJIBL. They are:

• Board of Directors

• Board Committees

• Executive Committee

• Policy Committee

• Management Team14

3.5 Management Hierarchy of SJIBL

Chairman

Board of Director

Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

First Assistant Vice President

Junior Assistant Vice President

Senior Executive Officer

Executive Officer

First Executive Officer

Junior Executive Officer

Assistant Executive Officer

Senior Officer

Trainee Senior Officer

Officer

Trainee Officer

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3.6.1 Branches of Shahlalal Islami Bank Limited

It started its Banking operation on May 10. 2005 with the I'1 branch (main branch) opened at 58, Dilkusha C/A, Dhaka, obtaining the license of Bangladesh Bank. Its corporate head quarter is situated at 10, Dilkusha Commercial Area, Jiban Bima Bhaban,Dhaka - 1000, Bangladesh. After the incorporation, it has created more branches one by one established in various commercial areas of Bangladesh to develop the Economic System Now it has 13 branches 9 branches are in Dhaka and rest 4 branches are in Chittagong, Sylhet and Gajipur.

These branches are:

Name of the Branch Address

SJIBL, Dhaka Main Branch

SJIBL, Dhanmondi Branch

SJIBL, Mhford Branch

SJIBL, Gulshan Branch

SJIBL, Foreign Exchange Branch

SJIBL, Kawaran Bazar Branch

SJIBL, Uttara Branch

SJIBL, Bangshal Branch

SJIBL, Baipal Branch

SJIBL, Agrabad Branch

SJIBL, Khatunganj Branch

SJIBL, Sylhet Branch

SJIBL, Beani Bazar Branch

SJIBL, Dargah Gate Branch

SJibI, Narayanganj Branch

SJIBL, Joidcvpur Chourasta Branch

58. Dilkusha C/A, Motljneel

House » 8/1, Road « 4 -Dhanmondi R/A

173-174, Midford road

House IF 6, Road » 32 Gulsjhan Avbenue

Karim Chamber- 00. Motjjheel C/AT.K. Bhaban-13, Kazi naznj) Islam Avenue

N.2 Centre, plot-5, R-12, 8-8. Utiara ModelTown

215/1. Bangshal Road

Swapneel Tower, Balpa). Dhaka EPZ, Savar104, Agrabad C/A. Chittagong

94-95 Khatunganj, Chittagong

Station Club Building, Bandar Bazar. SylhetCity Centre Bhaban, Beantbszar, Sylhet

297, Amberkhana, Dargah Gate, AirportRoad, Sylhet

Osman Tower. 56/1. S.M- Mateh Road,NarayanganjJoldevpur Chourasta, Gajipur

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3.6.2 Relationship with Other Bodies

Shahjalal Islami Bank has established relationship with the following institutions

• The institute of Banker's Bangladesh (lBB)

• The Bangladesh Foreign exchange Dealers Association (BAFEDA)

• The Bangladesh Association Bank (BAB)

• Central Shariah Board for Islamic Bank of Bangladesh

• Bankers' Club

3.7 Internal Control and Monitoring

The Bank gives utmost importance in supervisor and monitoring of banking activities. The Bank Branches are subject to the following Audit and inspections every year:

• Bangladesh bank Inspection. • Internal Audit and Inspection.

• External Audit and Inspection. • Chairman's Audit and Inspection.

• Audit Committee Audit and Inspection.

During the year 2005 all the Branches have been audited & inspections Have been conducted several times. This has not improved the working norms & procedure but also regularized many lapses irregularities.

3.8 Capital Market Services

Bangladesh economy has been facing great challenges in promoting industrial development and in order to meet these challenges, capital market has a vital role to play. In an effort to promote industrialization and economic development of Bangladesh, Shahjalal Islami Bank commenced its Broker House operation on 24.02.2008 through a separate division named 'Capital Market Services C/A, Dhaka-1000 after getting permission from Securities & Exchange Ltd & Chittagong stock Exchange Ltd. Through the Brokerage House the bank will allow customer to open OB account and get margin facilities to buy & sell of securities listed with the stock Exchanges and other capital market related services as per existing Rules & Regulations of SEC,

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3.9 Products of SJIBL

Shahjalal Islami Bank Limited deals with various types of products for deposit and investment purpose. Under deposit, the Bank generally collect fund from the client. Under investment, it maintains portfolio investment in different sectors- These are shortly given below:

Deposits:

Shahjalal Islami Bank Limited accepts deposits on the basis of Mudaraba in the following types of accounts, and pays profit, like that of dividend in these accounts, except Alwadia Current Account. The relationship between banker and customer is not debtor-creditor relationship. The depositor is a partner in business with SJIBL. Customers' deposit their fund in the following types of Accounts:

• Mudaraba Short Notice Deposit Account • Mudaraba Savings Account

• Mudaraba Term Deposit Account • Al-wada Current Account

• Other Scheme Deposit Accounts

Investments modes:

To provide interest-free Banking SJIBL has adopt the following modes of investment

• Musharaka • ShirkatuI Melk

• Mudaraba • Bi-Salam

• Murabaha • lstisna

• Bai-MuaiJal

4.1 Description of Deposits as a Product

Deposit is the life blood of commercial bank whether conventional or commercial. No commercial bank can be thought of without deposit. Infect commercial bank starts with deposits from public flowed by lending or financing trade, trade commerce and industry.

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Depositors receive interest in a predetermined rate for their deposits make with an interest based banks, where Shahjafal Islami Bank Limited neither pay not receive interest and mobilizes saving of the common people in line with Islamic Shariah.

Deposit can take on a various forms such as:

• Al-wada Current Deposit • Mudaraba Savings Deposit

• Mudaraba Short Notice Deposit • Mudaraba Term Deposit

• Other Scheme Deposit A

Al - Wadiah Current Deposit (ACD):

The term Al - Wadiah Current Deposit means deposit of money allowing somebody to sue it. It is a running and active deposit account. Holder oh such deposit can freely deposit or withdraw money as many times he/she feet’s necessary in any working day. In fact unlimited cheque facility is given to depositor by which any one can withdraw money in his demand without any notice, permission or any penalty. Banks here cat as a accounts of the depositor It has highest level of liquidity. For thiis, bank invests It in high liquid loans. No profit is allowed against this account.

Mudaraba Saving Deposit (MSD):

Mudaraba Saving Deposit (MSD) are intended for individual savers who want to save a part of their incomes for meeting the firture social, economic, educational or religious needs. It aims at encouraging savings of non-trading person(s), institutions), society, etc. by depositing small amount of money in the bank. Profit on MSD is 8%.

Mudaraba Short Notice Deposit (MSND):

It is also a Time Deposit account by which seven (7) days notice is required for With drawal of any sum and profit is paid. The rate of profit for this account is 6.50%. If the withdrawal on demand is desired, it may be paid subject to the forfeiture of profit for the period of notice or the expired of notice.

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Mudaraba Term Deposit Receipt (MTDR):

It is like a fixed deposit in the conventional baking system. In this mode Tk. 1000 or and above can be deposited against client will get non-transferable instrument of equal amount. After the announced yearly profit or loss, if bank felt in loss positing then the depositor bound to incur the loss. Account holder bound to bear any kind of tax or excise duty according to government circular. The expected profit rates of this account are:

Time of Deposit Up to TK- 1 (one) core

1 Month 10.50%

2 Month 11.50%

3 Month 12.55%

6 Month 12.65%

1 Year 13.00%

Other Types of Deposit Scheme:

The Shahjalal Islami Bank Limited (SJIBL) is containing some Deposit Scheme, which are the really profitable for bank and customer bom. The Bank maintains shariah – based transaction with their customer by the different Scheme this are:

• Monthly Deposit Scheme (MDS) • Monthly Income Scheme (MIS)

• Double Profit Mudaraba Saving Scheme (DPMSS) • Millionaire Scheme

• Mudaraba Hay Deposit Scheme • Mudaraba Bibaho Deposit Scheme(new)

• Mudaraba Lac potty Deposit Scheme(new) • Mudaraba Education Savings Scheme.

• Mudaraba Grehayan (Housing) Deposit Scheme. • Mudaraba Small Business Deposit

The schemes immediately after introduction become very popular among the middle class, specially the service holder.

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Monthly Deposit Scheme (MDS):

With this deposit scheme a fixed amount of money is deposited for a period of time. Profit on the deposited amount is compounded at a provisional rate and calculated on yearly basis. The investor can get 80% of his total deposited amount after 2 years.

Period

Installment (Tk.)

Rate 250 500 1000 2000 5000 10000 25000 50000

5 years 11% 20,065 40,125 88,250 1,60,500 4,01,250 8,02,500 20,06,250 40,12,500

8 years 11.10% 38,750 77,500 1,55,000 3,10,000 7,75,000 15,50,000 38,75,000 77,50,000

10years 11.20% 55,500 1,11,000 2,22,000 4,44,000 11,10,000 22,20,000 55,50,000 1,11,00,000

Monthly Income Scheme (MIS):

This scheme is very popular in our country among the people who retired from job and who do not able to do business are generally take this scheme which is comparatively less risky. In this account depositor can deposit minimum of Tk. 100,000/- fixed for 3 years or above for the benefit of TK- 1000 per month.

Period of Scheme Taka Per Month Provisional Rate

3 Years Tk. 1000/- for one Lac 12.00%

Double Profit Mudaraba Savings Scheme (DPMSS):

The Shahjalal Islami Bank Limited gives the facility to the client by the Islamic Shariah Mudaraba rules and regulations. In this scheme depositors have to deposit minimum Tk. l0,000/- for 6 years and after the maturity date accountholder will receive double than his/her deposited amount. Depositor will get 80% investment facility by deposit the deposit receipt. Accountholder are bound to pay any government tax.

Name of Scheme Period of Scheme Provisional Rate

Double Benefit 6 Years 10.75

Triple Benefit 9.5 Years 11.65

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Millionaire Scheme: It maturity date is long than other scheme. Generally this account is designed for children. Here, applicants are the selected people for operating the account on behalf of the accountholder.. Depositor will get 80% loan facility against of deposit money- No cheque book will be issued for this account, but the bank will provide deposit book.

Period of Scheme Installment Per Month

Amount Payable at Maturity

(Provisional)

Rate

12 Years Tk. 3,280.00 Tk. 10 Lac 11.25

15 Years Tk. 2,120.00 Tk. 10 Lac 11.30

20 Years Tk. 1,080.00 Tk. 10 Lac 11.45

25 Years Tk. 575.00 Tk.10 Lac 11.51

Mudaraba Hajj Deposit Scheme:

Any Muslim with a minimum age of 18 years can take the benefit of this product for UK purpose of Hajj. This product also becomes very popular among the old men.

Profit rate Hajj Deposit Scheme are given below:

Scheme Name Rate

Hajj Scheme (1-10 years) 11.25%

Hajj Scheme (10 years above) 11 50%

Terms and condition for Deposit Account:

• In this term, the account holders are bound to pay Tk. 50 for transferred and Tk. 250 as service & closing charge for closing premature deposit account.

• If the account is close before the maturity then profit will be calculate according to savings rate. But for first 1 year no profit will be calculate.

• If a depositor fails to pay consecutive 3 installments then the account will be closed automatically and profit will be calculate as Savings rate.

• In the absence of accountholder, the specified nominee will get the whole benefit. The profit rates of this account are

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4.2 New Product tor 2010

• Mudaraba marriage Scheme • Mudaraba Education scheme

• Mudaraba mohor Scheme • Mudaraba Special term deposits

4.3 Services of SJIBL

Computer services:

Shahjalal Islami Bank is computerized and provides the following services some of these services will be introduced soon.

• Online services • Automated Accounting

• Integrated System • Signature Verification

• Any Branch Banking • ATM Service

• POS. Services • Other Delivery Channel Services

4.4 Automation in Banking Operation:

Local area network (LAN) has already been developed for up gradation of the services in the bank and Wide Area Network (WAN) system is under process of development- In Following arrangement have been made for improved customer service:

On line Banking Services:

The bank has already established Communication infrastructure among the branches and the head office. This will allow all the connected branches to share information. Transaction like telegraphic transfer. Demand Draft and other financial information will be proceed on real time basis with the help of this communication network. Once implemented customers will not require to open accounts at different branches. Customers are given the facility to deposit or withdraw cash or transfer fund from any branch of Shahjalal Islami Bank Limited.

Reuters:

The bank has also established liaison with the facility of REUTERS, through which the bank received regular, latest information about the exchange rate, metal markets information and other price sensitive information to take prompt and correct decision.

SWIFT operations:

S.W.I.F.T's (Society for Worldwide Interbank Financial Telecommunication) portfolio of services and solutions spans the entire financial transaction lifecycle combined with the security

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and reliability of the messaging platforms, the system helps to reduce risks, lower costs and improve delivery to end customers. S.W.I.F-TS is the industry- owned cooperative supplying secure, standardized messaging services and interface software to 7,600 financial institutions in 200 countries. The S.W.I.F.T community includes banks, broker/dealers and investment managers, as well as their market infrastructures in payments, securities, treasury and bade.

Shahjalal Islami Bank Limited is cottimmed to provide fully automated, integrated, "Online banking facilities using state-of-the-art technologies to its clients. To serve modem services, ShahJalal Islami Bank Limbed have joined in the S.W.I-F.TS network and started S.W.LF TS operation from 22 June, 2004, to introduce and explore the products and services worldwide, to get and handle with the prospective customers as well as make correspondence with foreign financial organizations and institutions. Currently S.W.I.F.TS services are available on our 6 branches. Below the Branch Names and BIC codes are given:

Branch Name & Address BIC Code

SJIBL, Dhaka Main Branch SJBLBDOHDMB

SJIBL, Dhanmondi Branch SJBLBDDHDHN

SJIBL, Mitford Branch SJBLBDDHMFB

SJIBL, Gulshan Branch SJBLBDDHGUL

SJIBL, Foreign Exchange Branch SJBLBDDHFEX

SJIBL, Agrabad Branch SJBLBDDHAGB

4.5 Operational Activities of SJIBL

There are mainly three sections or Divisions of Shahjal Islami Bank. These are:

• General Banking Division • Investment Division

• Foreign Exchange Division

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4.6 General Banking Division

There are four sections working together to fulfill the target of the organization.

• Account opening Department • Remittance Department

• Clearing Department • Cash Department

• Accounts Department

4.6.1 Account opening Department:

This department is also names as Customer Service Department. All types' deposit accounts are opened and closed here with necessary documents. Cheque book for Alwada current or Mudaraba savings account also issued here. Some other functions of this department are Issuance of cheque book, T-T and D.D.

4.6.2 Remittance Department :

Local Remittance means sending money from one place to another for the customers. For this service, our country's business sectors are get facility by transfer funds from one place to another. These are:. Demand Draft (DD), Pay Order (PO) and Telegraphic Transfer (TT).

4.6.3 Clearing Department :

On behalf of the customer bank receives their proceeds of instruments such as Drafts, Cheques, and Pay Order. Activities of Clearing Department are classified in two way:

Outward Clearing: The instruments drawn on other banks, within the clearinghouse area, are deposited through our clients are sent for collection is called outward clearing.

Inward Clearing: When we receive cheque drawn on our branches within the clearinghouse area presented by other banks is known as inward clearing.

Outward Bills for Collection (OBC) and Inward Bills for Collection (IBC) (within the clearinghouses area)

4.6.4 Cash Department

Cash department is the most vital department of a bank and it is called blood of a bank. The main function of Cash department is receives & pays cash directly with customer. One of important part of cash department is Vault.

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Vault:

The Vault is maintained by cash in charge with the authorization and cooperation of manager or sub-manager. In the Vault, various important thing like cash money, cheque book. Receive register. Payment register. Balance Book, Security stationary etc are kept. Grill door one keyhole opened by — two keys of two officers and bring out following thing: Cash, Vault register. Enter the amount of cash withdrawal from the vault register.

4.6.5 Accounts Department

Accounts department of Shahjalal Islami Bank Limited is classified into two sections are General Accounting and Investment Accounting. These are shortly described below:

• This department maintains accounting for general and administrative expense, funding operation and fixed assets.

• This department also maintains the method accounting according to generally accepted Accounting standard in conformity with the provision of relevant regulation of Bangladesh.

5.1 Investment Division

It is a section of very crucial functions. The officers are very carefully taken and complete the procedure of investment for the benefit of bank. The functions of this division are-

• Preparing the proposal • Issuance sanction letter

• Disbursing the payment • Prepare and posting voucher

5.2 Foreign Exchange Division

The process of Foreign Exchange is converted one national currency into another and transferred money form one country to another All types of foreign transaction like export/import are held in this division. We consider 'Foreign Exchange' as a subject, then it means all kind of transaction related to Foreign Currency, as well as currency instruments, such as Draft. MT, TT, TC, and Payment Order & Foreign Trade. There are three kinds of Foreign Exchange transaction

• Import • Export

• Remittance

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5.2.1 Import

Import Trade of Bangladesh is controlled under the Import & Export control Act 1950. Authorized Dealer Banks will import the goods into Bangladesh following import policy,public notice, F-E circular & other instructions from competent authorities from time to time. Goods are being imported for personal use. commercial purpose or industrial use.

Letter of Credit

A Letter of Credit is a definite undertaking of the Issuing Banks, to make the payment for the import, on behalf on the importer; in other words, it is a letter of the issuing Bank to the beneficiary, undertaking to effect payment under some agreed conditions. Shahjalal Islami Bank Limned, Banani Branch deals with the following L/C:

• Sight L/C • Sight Local L/C

• Usance L/C • Back to Back L/C

5.2.2 Export Financing

To meet up the cost of the goods to be exported, the exporter may require Bank finance. Besides, he may require finance for go down rent, freight etc, Even after shipment of the goods, exporter may require Bank finance to meet-up his current expenditure up to repatriation of the export proceeds. There are two types of export finance:

• Pre-shipment finance. • Post shipment finance.

5.2.3 Foreign Remittance

Foreign Remittance is classified into two way-Outward Remittance and Inward Remittance.

Inward Foreign Remittance: Inward Foreign Remittance means Remittance received

from foreign countries from abroad.

Outward Remittance: Outward remittance of funds be made by means of T-T., D.D.T.T. etc. the remitter has to deposit money along with the application contains name and address of the payee, name of the currency etc. All outward remittances must cover the transactions approved by the Bangladesh Bank.

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Instruments of Foreign Remittance:

Cash for : Dollar, Pound, France Fr. Riyal or any other currency.

T.C : Travelers Cheque.

FD.D : Foreign Demand Draft.

T.T : Telegraphic Transfer, Cable transfer or swift transfer.

M.T : Mail Transfer.

I.M.O : International Money Order

Cheque : By any person & institution

P.O : Payment Order

6.1 Conclusion :

Interest free banking system is no more a concept. It is now a Reality, a dynamic system, embodying a set of superior banking mechanism. More than 300 Islamic bank & marketed success from this inception in our country in 1983. Shahjalal Islamic Bank Limited has been operating with real & confidence in corporation with other conventional banks. Bringing a new concept in such business sector, which is growing to rapidly in the world, is rally bold step. As a large Islamic commercial bank, Islamic bank took various steps to create employment & socio-economic development for the poor through Islamic shariah. Gaining knowledge of practical & to compare this practical knowledge with theoretical knowledge.

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