General Banking Activities and Financial Performance on Social Islami Bank Limited
  BACKGROUND OF THE STUDY

Bachelor of Business Administration is a specialized course. State University of Bangladesh arranges a four year specialized course to provide some efficient graduates in this business sector of the country. The whole course design is not limited within the theoretical boundary but it also extends to the practical exposure through the internship program. After completion of 4 years in the BBA program of the School of Business and Social Studies, State University of Bangladesh, three months organizational attachment is must. So the preparation and submission of this report is partial requirement for the completion of the Bachelor of Business Administration (BBA).This report is outcome of the three months long internship program conducted in Social Islami Bank Limited (SIBL), one of the reputed private commercial banks of the country .While working operating procedures carried out by the bank were observed and supportive effort with the trainers, bankers & under the guidance of my faculty respective advisor Kazi Ayesha Siddiqua.

This internship program has been prepared on the basis of my practical experience in the general banking. This report will also provide the essential information’s how the private commercial banks contribute for the economic development of the country.

I have tried my best to utilize the opportunity to enrich my knowledge on banking system and incorporate it with the theoretical course.

  OBJECTIVES OF THE STUDY

The objective of the study is to gather practical knowledge on banking system and operation. This internship gives us a chance to co-ordinate with the theoretical knowledge and the practical experience and to evaluate the performance of general banking of Social Islami Bank Limited. The following are of objective for internship in bank:

General Objective

The general objective is to prepare & submit a report on the topic of “General Banking Activities and Financial Performance of Social Islami Bank Limited.”

 Specific Objective

  • To apply theoretical knowledge in the practical field.
  • To be familiar with the banking management system.
  • To have exposure to the functions of general banking section.
  • To analyze the service procedure of SIBL.
  • To familiarize the working hours, values and environment of the bank.
  • To analyze the financing system of the Bank and find out whether the bank needs any improvement.
  • To find out the contribution of private commercial banks for the economic development of the country.
  METHODOLOGY

 Every report is prepared by following a concrete methodology. The success of the report depends on the followed methodology in major portion. My study is performed based on the information extracted from different sources collected by using a specific methodology. All the methodology is mentioned below:

Primary sources

  • Practical desk work
  • Face to face conversation with the officer & client
  • Direct observations

Secondary sources

  • Annual reports of SIBL.
  • Files & Folders
  • Memos & Circulars
  • Daily diary (containing my activities of practical orientation) maintained by me,
  • Various publications on Bank,
  • Websites,
  • Different circulars sent by Head Office and Bangladesh Bank.
RATIONAL OF THE STUDY

 There are three specific sectors in the SIBL. General banking, Investment & Foreign Trade are those. Basically under those sectors SIBL play a vital role of the country.  General banking is one of the profitable sites for the all bank. On the other investment also a strong silt of the SIBL. But SIBL (Social Islami Bank Limited) is most popular for its foreign trade. Besides it have very strong relationship with the foreign customer. SIBL foreign trade policy is huge. Basically most of the customer is made an import & export by the SIBL. So the foreign trade policy is selected by me to submit a internship report up to Social Islami Bank Limited.

 SCOPE OF THE STUDY

 This report has been prepared based on general banking & financial performance. While preparing this report I had a great opportunity to work. And this work experience gives me a idea about in general banking activities & financial performance of SIBL Bank. It enhances my practical knowledge in banking activity and I can be able to communicate with practical and theoretical one.

 LIMITATION

   Due to confidentiality of the data, adequate data were not available.

  Supply of more practical and contemporary data is another shortcoming

  The study may not be done very successfully due to inexperience.

  On our schedule time we could not find the respondent. Because they were busy with their work on that time.

Chapter: 2

Islami Banking Concept

 

Messages

From the Holy Qur’an

 

Bismillahir Rahmanir Raheem

Those who take Riba (usury) will not stand (on the day of resurrection) except like the standing a person beaten by Shaitan (Shatan) leading him to insanity. That is because they say: “Trading is only like Riba (usury)”, whereas Allah has permitted trading and forbidden Riba (usury).So whosoever receives an admonition from his Lord and stops eating Riba (usury) shall not be punished for the past: his case is for Allah (to judge); but whoever returns [to Riba (usury)], such are the dwellers of the fire- they will be abide therein.

                                                                                          −Surah Al-Baquarah, verse-275

Allah will destroy Riba (usury) and will give increase for Sadaqaat (deeds of charity, alms etc.)And Allah likes not the disbelievers, sinners.

                                                                                            −Surah Al-Baquarah, verse-276

O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba [(usury) (from now onward)], if you are (really) believers.

                                                                                           −Surah Al-Baquarah, verse-278

And if you do not do it, then take a notice of war from Allah and His Messenger; but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).

                                                                                            −Surah Al-Baquarah, verse-279

 ISLAMI BANKING CONCEPT

 Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Shariah) and its practical application through the development of Islamic economics. Shariah prohibits the payment or acceptance of interest fees for the lending and accepting of money respectively, (Riba, usury) for specific terms, as well as investing in businesses that provide goods or services considered contrary to its principles (Haraam, forbidden). While these principles were used as the basis for a flourishing economy in earlier times, it is only in the late 20th century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the Muslim community.

 SCENARIO OF ISLAMI BANKING IN BANGLADESH

 In August 1974, Bangladesh signed the Charter of Islamic Development Bank and committed itself to reorganize its economic and financial system as per Islamic Shariah.
In January 1981, Late President addressing the 3rd Islamic Summit Conference held at Makkah and Taif suggested, ”The Islamic countries should develop a separate banking system of their own in order to facilitate their trade and commerce.”

This statement of Late President indicated favorable attitude of the Government of the People’s Republic of Bangladesh towards establishing Islamic banks and financial institutions in the country. Earlier in November 1980, Bangladesh Bank, the country’s Central Bank, sent a representative to study the working of several Islamic banks abroad.

In November 1982, a delegation of IDB visited Bangladesh and showed keen interest to participate in establishing a joint venture Islamic bank in the private sector. They found a lot of work had already been done and Islamic banking was in a ready form for immediate introduction.

Two professional bodies -Islamic Economics Research Bureau (IERB) and Bangladesh Islamic Bankers’ Association (BIBA) made significant contributions towards introduction of Islamic banking in the country. They came forward to provide training on Islamic banking to top bankers and economists to fill-up the vacuum of leadership for the future Islamic banks in Bangladesh.

They also held seminars, symposia and workshops on Islamic economics and banking throughout the country to mobilize public opinion in favor of Islamic banking. Their professional activities were reinforced by a number of Muslim entrepreneurs working under the aegis of the then Muslim Businessmen Society (now reorganized as Industrialist & Businessmen Association).

The body concentrated mainly in mobilizing equity capital for the emerging Islamic bank.

At last, the long drawn struggle to establish an Islamic bank in Bangladesh became a reality and Islami Bank Bangladesh Limited was established in March 1983 in which 19 Bangladeshi national, 4 Bangladeshi institutions and 11 banks, financial institutions and government bodies of the Middle East and Europe Including IDB and two eminent personalities of the Kingdom of Saudi Arabia joined hands to make the dream a reality.
Later, other three Islamic Banks were established in the country.

 OBJECTIVES OF ISLAMIC BANKING

 The objective of Islamic Banking is not only to earn profit but also to do good and welfare to the people. Islam upholds the concept that money, income and property belong to ALLAH and this wealth is to be used for the good of the society. The main objectives of Islamic Banking are as follows:

  1. To conduct interest free banking.
  2. To establish participatory Banking instead of Banking on debtor-creditor relationship.
  3. To invest through different modes permitted under Islamic Shariah.
  4. To accept deposits on profit-loss sharing basis.
  5. To establish welfare oriented Banking System.
  6. To extend operation to the poor, helpless and low income group for their economic up liftmen.
  7. To contribute in achieving the ultimate goal of Islamic economic system.
 COMMON PRACTICES OF ISLAMIC BANKS IN MOBILIZATION OF FUND

The common practices of Islamic banks in the sources of funds may be described as follows:

1.      Current Account

All Islamic banks operate current account on behalf of their client individuals and business firms. These accounts are operated for the safe custody of deposits and for the convenience of customers. There is little different between conventional banks as far the operation of current accounts is concerned. There are two dominant views about current account. One is to treat demand deposit as amnah (trust). A trust deposit is defined by the Jordan Islamic Banks as “cash deposits received by the bank where the bank is authorized to use the deposits at its own risk and responsibility in respect to profit or loss and which are not subject to any conditions for withdrawals or depositing”.

2.      Saving Account

All Islamic banks operate saving accounts. It must be pointed out that any return on capital is Islamically justified only if the capital is employed in such a way that it is expected to a business risk. Savings accounts at Islamic Banks Generally operate as follows:

  1. Savings accounts are opened with the condition that deposits provide the bank with an authorization to invest.
  2. Depositors have the right to deposit and withdraw funds.
  3. The profits in savings accounts are calculated on the minimum balance maintained during the month. Depositors participate in the profits of savings accounts with effect from the beginning of the month following the month in which the deposits are made. Profits are not calculated with effect from the beginning of the month in which a withdrawal is made from the account.
  4. A minimum balance has to be maintained in order to qualify for a share in profit.

 3.      Investment Deposit

Investment deposits are Islamic banks counterparts of term deposits or time deposits in the conventional system. They are also called profit and Loss-Sharing (PLS) Accounts or Participatory Account. However they can be distinguished from traditional fixed term deposits in the following manner:

  1. Fixed term deposits in the conventional system operate on the basis of interest while investment accounts in Islamic banks operate on the basis of profit sharing Instead of promising depositors a predetermined fixed rate of return on their investment the bank tells them only the ratio in which it will share the profits with them.
  2. While fixed term deposit are usually distinguished from each other on the basis of their maturities investment deposits can be distinguished on the basis of maturity as well as on the basis of purposes as it is possible to give special instructions to the bank to invest a particular deposit in a specified project or trade.

 The main distinguishing characteristics of investment deposits can be described as follows:

  1. Deposit holders do not receive any interest. Instead they participate in the share of the profits or losses.
  2. Usually these accounts are opened for a specific period e.g. three months, six month, one year or more.
  3. Generally speaking depositors do not have the right to withdraw from these accounts as is customary in time deposits in conventional banks.

PROFILE OF SOCIAL ISLAMI BANK LIMITED

 BACKGROUND OF THE BANK

Social Islami Bank was founded in 1995 as Social Investment Bank Limited and changed its name to the present one on August 2009.

SIBL has been running its activities through its 74 branches all over the country. It provides Islami banking facilities to its customers under the supervision of a strong jury board. It provides all formal commercial banking services to people.

Formal banking services rendered by SIBL are Deposit Accounts, Deposit Schemes, Investment Banking, Foreign Exchange Trade and other routine jobs.

Mudaraba Savings Deposit, Al Wadiah Current Deposit, Mudaraba Term Deposit and Mudaraba Notice Deposit are the deposit accounts provided by SIBL.

Mudaraba Term deposit is to be opened with a deposit of Tk.5000 minimum from individual, joint farm, Public limited company or Local Government organizations. After maturity, allowed to withdraw the money along with profit as decided by the bank.

Mudarabe Notice Deposit requires a notice period before withdrawal of money.

Ten Deposit schemes are presently in function at SIBL. These are:

  • Mudaraba Monthly profit
  • Hajj Deposit Scheme
  • Mudaraba Millionaire Scheme
  • Mudaraba special Deposit (Pension) scheme
  • Mudaraba Term savings Scheme based on Monthly Deposit
  • Mudaraba Education Savings Scheme
  • Mudaraba Bashastan Savings Scheme
  • Mudaraba double Benefit Deposit Scheme
  • Mudaraba Lakhopoti Deposit Scheme
  • Mudaraba Foreign Currency Term Deposit Scheme

Monthly Profit scheme is targeted to retired persons who can deposit a substantial amount from his service benefits for a fixed period. He would get a monthly profit from it.

Hajj Deposit Scheme is to help people for performing Hajj. A mutually agreed monthly installment is to be deposited and profit earned as per Shariah is added. After maturity client will get the money with total profit to enhance client Hajj program.

Millionaire Scheme is a monthly deposit Scheme to achieve a total of taka 10 lacs along with profit after maturity. The duration of this scheme is 15, 20, and 25 years. Accordingly the installment is decided. The profit is calculated following Shariah.

Special Savings (Pension) Scheme is, as the name implies, for people in job now and desire to have a regular income after retirement. Deposits are made as monthly installments and after maturity client may have the total amount at a time or as a monthly pension.

Term saving is also a monthly deposit scheme.

Educational expenditure is getting higher day by day. Still client must not ignore his/her children’s education. So client would like to build up a fund for future. Mudaraba Education Scheme is the solution.

Mudaraba Bashastan Savings Scheme is meant for solving housing problem. Clients have to deposit an installment of Tk.500 or any multiple of it for a decided duration. After maturity client may expect a good amount to be spent for self home.

Voluntary Banking sector is another field of SIBL’s activity. This field includes Cash Waqf Scheme and Mosque Waqf Property Development Scheme.

Cash Waqf Scheme is designed for investment in the religious, social and educational services. Well off and rich people are supposed to make the investments and in the mean time response is good.

Mosque Waqf Property Development Scheme provides consultation to make mosques and Waqf properties self sufficient and sustainable.

Non Formal Banking area of SIBL offers schemes like Micro Investment Scheme, Micro Enterprise Investment Scheme, Joint Scheme, Development and Rehabilitation Scheme, and Joint Programs with ILO and UNICEF.

Micro Investment is a group based lending program aiming at improvement of the low income people of the society. Maximum amount to invest is Tk. 25000 for each case.

Micro Enterprise Investment Scheme contains three types of schemes. These are Family Empowerment Micro-Enterprise Program, SMES and Small, Medium & Micro Enterprise Development in collaboration with JOBS, USA. All these schemes are prepared to create easy access of small entrepreneurs to business capital.

A rehabilitation program for child labor in garment industries are under taken by SIBL jointly with ILO. This program aims at complete elimination of child labor.

Social Islami Bank Limited is always with modern thinking and up to date technology. It has naturally introduced online banking, ATM service and any branch banking like products. SIBL is prospering along with its clients and partners and contributing to nation as well.

SIBL is a capitalized new generating Bank with an authorized capital and paid up capital of Taka 10000 million in 2011 and also 2987.81575 million respectively as of December 2010.

 Company Profile:

Name of the CompanySocial Islami Bank Limited

 Corporate Office15,Dilkusha C/A. Dhaka-1000Websitewww.siblbd.comAuthorized Capital10000 millionPaid up Capital2987.81575 millionChairmanMr. Md. Anisul HoqueManaging DirectorMr. Muhammad AliCompany SecretaryMahamud HassanType of CompanyPrivate limitedScope of BusinessBanking, capital market operationsIncorporation of the BankJuly 5, 1995Licensed issued for opening first branch; Dilkusha BranchNovember 22, 1995Formal launching of the BankNovember22, 1995Commencement of Business of Dilkusha BranchNovember 22, 1995Listed with Dhaka Stock ExchangeNovember ,2000Listed with Chittagong Stock ExchangeOctober, 2005Publication of ProspectusDecember 30,1984No. of  Branches75

Source: www.siblbd.com

 VISION OF THE BANK

Social Islami Bank Ltd started its journey with the concept of 21st Century Islamic participatory three sector banking model: i) Formal Sector- Commercial Banking with latest technology; ii) Non-Formal Sector – Family Empowerment Micro-Credit & Micro-enterprise program and iii) Voluntary Sector – Social Capital mobilization through CASH WAQF and others. Finally, “Reduction of Poverty Level” is our Vision, which is a prime object as stated in Memorandum of Association of the Bank with the commitment “Working Together for a Caring Society”.

MISSION OF THE BANK
  • High quality financial services the latest technology.
  • Fast, Accurate and Satisfactory customer service.
  • Balanced & sustainable growth strategy.
  • Optimum return on shareholders’ equity.
  • 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.
CORPORATE SOCIAL RESPONSIBILITY OF THE BANK

Social Islami Bank Ltd. has been responding spontaneously to its social commitment as a part of Corporate Social Responsibility (CSR). Welfare activities for the poor, disabled and distressed of Social Islami Bank Ltd. are being done mainly from Cash Waqf Fund, Zakat Fund, Compensation and Doubtful Income. This bank is doing welfare of mankind in various sectors like Health, Education, Rehabilitation and Donation etc. They are also extended financial support to Mosques, Madrashas, Orphanages and Voluntary Social Organizations. Social Islami Bank Ltd. distributed relief to SIDR affected areas and flood affected areas also.

 DIVISION OF SOCIAL ISLAMI BANK LIMITED

Name of the divisions of SIBL is as follows:

  • Information Technology Division
  • Financial Administration Division
  •  International Division
  • Logistic Support Division
  •  Managing Director’s Secretariat
  • Business Development & Marketing Division
  • Audit & Inspection Division
  •  Chairman’s Secretariat
  •  Share Division
  • Board Secretariat
  • Human Resources Division
  • Shariah Board Secretariat
  • SIBL Training Institute
  • SME Banking Division
  • Legal Department
  • Board Audit Cell
  • MIS, Planning & Research Division
  • Internal Control & Compliance Division
  • Investment Risk Management Division
  • Voluntary Banking Division
  • Recovery Department
  • Global Business Division
NETWORK OF THE BRANCHES

 SIBL started its working at 15, Motijheel C/A with a Branch named Motijheel Branch on 22, November 1995 was the first & main Branch of SIBL and has been operating throughout the country. The age of the Bank is only 16 years and during this short period of time, the Bank has established total 74 Branches over the country and made a smooth network inside the country. The number of Branches as Division wise is mentioned in the following table:

Division

No. of Br.

Dhaka Division

26

Chittagong Division

15

Sylhet Division

2

Narayangonj

5

Bogra

2

Khulna Division

2

Rajshahi Division

1

Sirajgonj

3

Noakhali

1

Comilla

1

Chadpur

3

Narsingdi

1

Jessor

3

Bagerhat

1

Satkhira

1

Dinajpur

1

Gaibandha

1

Noagaon

1

Rangpur

1

Pabna

1

Feni

1

Barisal Division

1

Gajipur

1

Total

75

                                          Source: www.siblbd.com

 FUCNTIONS OF SOCIAL ISLAMI BANK LIMITED

Mobilization of idle resources of the country by accepting Deposits from the general public.

Granting Loans and Advances to the individual firms and companies for activating and developing trade, commerce and industries and other productive activities in the country.

To give facilities to the client and shareholders in a systematic way.

Give encouragement to the people for savings.

To increase investment.

To make easy transfer of foreign currency.

To identify consumer’s demand and fulfill their demand by supplying money.

To improve economy by borrowing financial facility.

To assist capital market.

 Management Hierarchy

Source: www.siblbd.com

    The Ownership Pattern

This is a private sector commercial Bank providing comprehensive range of banking services. The bank is owned as follows:

Sponsor/Director 26.5%

Institute 13.48%

Public 60.02%

At present the Bank has an amount of Tk.10000.00 million of Authorized Capital and Tk.2987.81 million of Paid-up Capital

 Human Resource

 There is no alternative to skilled and trained manpower in service Industry. Bearing this in mind the well educated, promising and honest workers are being appointed and trained. Bank has given top priority to develop skilled manpower and introduce them with modern technologies with the purpose of developing quality customer services. The Bank has undertaken program to train up its employees of all strata at its own Training Institute. A highly experienced person was appointed as Director (Training) of the Institute in the year 2001 with the task of formulating various training modules. Steps are being taken to shift the Institute to separate premises for facilitating training activities. Side by side, both inland and foreign training also imparted during the year as usual. A highly experienced, well educated and motivated workforce is playing vital role towards the growth of the Bank deserve appreciation. The total manpower strength of the bank was 1252 as on 31st December, 2010.

 Training Institute

Well educated peoples are needed to achieve the objectives of a firm. With a view to build enthusiastic and skilled work force, Social Islami Bank Training Institute was established in 24th October, 1996 at Shyamoli, Dhaka. Every year the Institute trains sufficient number of employees. By the side of the new employee/officer, it is possible to trained SIBL’s existing employee/officer. There is a library in SIBL. There is about 2thousand books remain in this library. Accounting, Management, Marketing, and Computer related books are in this library. In 2010, 74 employees from the bank got training from BIBM.

 Foreign Correspondents of SIBL

In order to gain maximum advantage from Foreign Exchange related business, the Bank has entered into 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 we have advising, reimbursing and confirming arrangement.

 Overseas Operations of SIBL

 Social Islami Bank has set up joint venture Exchange Company named Gulf Overseas Exchange Co. Ltd, in Oman contributing 25% of its paid up capital. The present paid up capital of the company is Riyal Omani 1, 82,000.00. The Chairman of the company is the ex-minister of the government of Oman. The exchange company, established in 1985, now has three branches in Oman and is being managed fully by officials of SIBL. The company is running in profit. SIBL is also exploring possibilities of opening branches in the Middle East, Switzerland and USA. SIBL has entered into the Management contract with a Kuwati Exchange company to provide management and technical services. SIBL has acquired equity and management of Nepal Arab Bank Ltd. which is the largest and highly profitable Private Commercial Bank in Nepal.

 Product and Service of SIBL

   Mudaraba Term Deposit.

  Mudaraba Savings Deposit.

  Al-Wadia Current Account.

  Mudaraba Notice Deposit.

  Cash Waqf.

  Scheme Deposit

  Mudaraba Hajj Savings Deposit.

  Mudaraba Pension Savings Scheme.

  Subarna Rekha (Woman)

  Subarba Lota (Women)

  Shabuz Shayanna

  Mudaraba Education Saving

  Mudaraba Monthly Profit Scheme

  Mudaraba Monthly Savings Scheme.

  Mudaraba Bashastan Savings Scheme

  Mudaraba Millionaire Scheme

  Mudaraba Lakhopoti Scheme

  Mudaraba Double Benefit Scheme

  Mudaraba Marriage Savings Scheme

  Mudaraba Mohorana Savings Scheme

  Shabuj Chaya Monthly Profit Scheme

  Sukher Thikana Scheme

  Sonali Din

  Sachandey Pratidin

  Samriddir Sopan

  Shapner Shiri

  Shanchita

  ATM Service.

  Locker Service.

  One Line Banking

 Rural Credit Program

Agriculture is the main driving force of economy in Bangladesh. And the whole economic growth of the country depends on the development, modernization and investment of money in this connection. As a non-Government financial institution SIBL has been actively participation in rural credit program in the economic activities for large population of the country since 1992. SIBL has been working intensively in collaboration with Barindra Multipurpose Development Authority by conducting the Rural Credit program particularly in Rajshahi, Naoga, Chapainowabgong, and the northern part of the country in general. In the last 10 years bank has distributed the credit for Tk.69.85million. The recovery of loan in this project is 94%. In 2001 bank has distributed the loan for Tk.7.00million. This is the first program for any private bank. Moreover, SIBL has been participating in Agro Based Industries and Technology Development project Loan financed by USAID since 1996.

OPERATING PERFORMANCE

 Total Operating Income of the Bank as on 31st December 2010 stood at Tk. 2,633,090,142.00 against Tk.1,717,643,034.00 of the previous year. The Bank made an operating profit of Tk.1,638,628,125.00 in 2010 against Tk.1,064,306,005.00 of 2009. A summary of operating result of the Bank as on 31st December 2010 vis-à-vis the position as on 31.12.2009 is shown below:

Operating result of the Bank as on 31st December 2010 (Taka in millions)

Particulars

31.12.201031.12.2009Growth Rate %
Income from Investment3886.183078.9826.22%
Profit paid on Depositors2435.012063.6218.00%
Net Investment Income1451.171015.3642.92%
Commission, Exchange & Other Income1181.92702.2868.30%
Total Operating Income2633.091717.6453.30%
Total Operating Expenses994.46653.3452.21%
Profit Before Provision1638.631064.3053.96%
Provision against Investment & Others501.94337.4248.76%
Profit Before Tax1136.69726.8856.38%
Profit After Tax643.019431.52349.01%

 Chapter: 3

 Bank Operation

 DEPARTMENT OF SOCIAL ISLAMI BANK LIMITED

SIBL is a three sector Islamic bank. Services, which provided by SIBL, are shown below:

FORMAL SECTOR

GENERAL BANKING AREA

Financial institution intermediary that mediates or stands between ultimate borrowers and ultimate lenders is knows as financial institution. Banks perform this function in two ways- taking deposits from various areas in different forms and lending that accumulated amount of money to the potential investors in other different forms. General banking department aids in taking deposits and simultaneously provides some ancillaries services. General banking is the front-side banking service department. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service form bank. On the other hand, there are some customers with who banks are doing its business frequently. SIBL General banking is divided into six sections.

ACCOUNT OPENNING SECTION

Under this section, SIBL officer opens different types of accounts on the request of clients. The procedure of opening account is given below.

Procedure for Opening of Accounts

Before opening of a current or savings account, the following formalities must be completed by the customer:

1. Application for the prescribed form

2. Furnishing photographs

3. Introduction by an account holder

4. Putting specimen signatures in the specimen card

5. Mandate if necessary

After fulfilling the above formalities, SIBL provides the customer a pay-in- slip book and a checkbook.

 Application Form for Current/ Savings Account

Followings are the contents of the application form for opening Savings or Current account in SIBL,-

1)      Type of the Account: Individual/ Joint/ Proprietorship/ Partnership/ Limited Company/ Club/ Society/ Co-operatives

2)      Name of the Applicant(s)

3)      Father’s/ husband’s Name

4)      Present Address

5)      Permanent Address

6)      Number, Date of issue, Date of Expiry & Place of Issue of Passport (if any)

7)      Date of Birth

8)      Nationality

9)      Occupation

10)  Nominee (s)

11)  Special Instruction of Operation of the Account (if any)

12)  Initial Deposit13)

13)  Specimen Signature (s) of the Applicant (s)

14)  Introducer’s Information (Name, Account Number, Specimen Signature)

In case of Join Account

a) Operation instruction of the account

b) Signature (s)

In case of Partnership Account

a)      Partner’s Signature

b)      Partner’s Name ——-

The following formality along with the documents is to be completed before opening an account:

a)      Two copies of photograph of the Account Holder (s) duly attested by the Introducer.

b)      Account to be introduced properly.

c)      Introducer’s signature on Account Opening Form to be verified by an officer under full signature.

d)     Letter of thanks to Account Holder(s) and Introducer to be sent under registered post.

e)      In case of joint account, operational instructions are to be signed by the Join Account Holders.

In case of Club/ Society,-

a)      Up to date list of office bearers.

b)      Certified copy of Resolution for opening and operation of account.

c)      Certified copy of Bye-laws & Regulations/ Constitution.

d)     Copy of Government approval (if registered.)

In case of Co-operative Society/ societies Limited,-

a)      Copy of Bye-law duly certified by the Co-operative officer.

b)      Up to date list of office bearers.

c)      Resolution of the Executive Committee as regards of the account.

d)     Certified copy of Certificate of Registration issued by Registrar, Co-operative Societies.

In case of Non- Government College/School/ Madrasha/ Muktab,-

a)      Up to date list of the Governing Body/ Managing committee.

b)      Copy of resolution of the Governing Body/ Managing Committee.

In case of Trustee Board,-

  1. Prior approval of Head Office of the Bank.
  1. Certified copy of Deed of Trust, up to date list of members of the Trustee Board and Certified copy of the Resolution of Trustee Board to open & operate the account.

In case of Minor’s Account,-

a)      Putting the word “MINOR” after the title of the account.

b)      Recording special instruction of operation of the account.

c)      The account opening form is to be filled in and signed by either of the parents or the legal guardian appointed by the Court of Law & not by the Minor.

In case of Limited Company,-

a)      Certified true copy of the Memorandum & Articles of Association of the company.

b)      Certificate of Incorporation of the company for inspection and return with a duly certified photocopy for bank’s records.

c)      Certificate from the Registrar of the Joint Stock Companies that the company is entitled to commence business (in case of Public limited Co. for inspection and return) along with a duly certified photocopy for Bank’s records.

d)     Latest copy of Balance Sheet.

e)      Extract of Resolution of the Board. General Meeting of the company for opening the account and authorization for its operation duly certified by the Chairman/ Managing Director of the company.

  List of Directors with address (a latest photocopy of the form-xii).

  Authorized signature.

  Name

General conditions of governing Current / Savings Account,-

(a)     Minimum Balance to be maintained in current account Tk. 10,000 /- and in Savings account Tk. 5,000/-

(b)     A suitable instruction by an introducer acceptable to the Bank is required prior to opening an account.

(c)     Recent photographs of the Account openers duly attested by the Introducer must be produced.

(d)    When cheques deposited are payable by other banks or outstation they are available after clearing or collection only, Service charge will be charged @ Tk, 100 /- in current account and Tk 50 /- in Savings account yearly or as charged by the Bank from time to time as and when required.

Provisional profit rate for Savings Account (SB) @ 6.85% (Half years compounding).

Deposits Accepted by SIBL

                   I.            Mudaraba monthly profit deposit scheme

Social Islami Bank Ltd is an Islamic Bank ruled by Islamic Shariah. The bank is operating in Formal, Non-Formal and Voluntary banking sector for alleviating poverty in the Bangladesh. But to reduce poverty in a country like Bangladesh there is no other alternative but increase internal deposit. Increase in deposit will increase investment and new investment will result in more employment. For this reason SIBL have introduced “Mudaraba Monthly Profit Scheme”.

Under this scheme the depositor will get monthly profit on the deposited amount. The reasons for introducing this scheme are as follows:

  1. a.      The scheme provides monthly profit for service holders who may deposit the pension benefit
  2. b.      For those Bangladeshis working abroad willing to deposit once and provide a fixed amount monthly to family and relative residing in Bangladesh
  3. c.       The trust and foundations willing to provide monthly scholarship to students against one time deposit
  4. d.      For the parents who wants to bear educational expenses of their child against deposit

The features of this scheme are as follows:

ü  Tk. 1,00,000/-, 1,10,000/-, 1,20,000/- or 1,25,000/- or any amount multiple can be deposited under this scheme.

ü  The duration of the amount should be for Five years

ü  Profit shall be distributed under this scheme as follows:
a. 1,00,000/- Tk. 900 (net)
b. 1,10,000/- Tk. 1000 (net)
a. 1,20,000/- Tk. 1,100 (net)
b. 1,25,000/- Tk. 1150 (net)

  The payable profit will become due after 1 month of deposit. But the amount will be deposited to account in the last week of the month.

  Generally, a depositor cannot withdraw the amount before 5 years. But, in unavoidable circumstances the depositor can withdraw the amount and in that case.

  The depositor will have to submit the duly filled application form of the scheme.

  The depositor will have to maintain a Mudaraba Savings account in which the profit of the scheme will be deposited.

  In case of change of address the depositor must inform the bank as soon as possible.

  If the scheme is closed before 1 year then no profit will be given.

                II.            Hajj deposit 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 our muslim brothers Social Islami Bank Ltd introduced Hajj/Umrah Scheme.

The basic rules of this scheme are:

  1. a.      This account shall be called as Hajj/Umrah Savings Scheme
  2. b.      Any Muslim Residing in Bangladesh may open an account under this scheme
  3. c.       This scheme will be accounted under Mudaraba rules. The Bank as Mudarib and the account holder will be treated as Sahib-e-Mal. The account holder will have to enjoy the Profit / Loss of the Banks respective year.
  4. d.      The depositor will be provided with a Deposit book and the deposited amount must be written and verified by the Bank’s authorized official. In case of losing the deposit book Tk. 20 has to be deposited for issuing a new one.
  5. e.       In case of change of address the bank must have to be notified as soon as possible.
  6. f.       Provisional profit will be charged on June and December closing. If the account holder is unable to perform the Hajj/Umrah or any other person does not perform instead of the account holder then the corresponding account will be treated as a Mudaraba Savings account and accordingly profit will be distributed.
  7. g.      An introducer must be there to open an account.
  8. h.      Any installment size can be chosen during the opening of the account, which cannot be changed afterwards.
  9. i.        This scheme can be opened in the name of any under-aged people. In such cases the rules relating to open an account for an under-aged person must be followed.
  10. j.        In case of closing the account before maturity profit will be given as per rules of Alwadiah Current account. No profit will be given in case of closing the account before 6 (Six) months.
  11. k.      Monthly installment of the account will be deposited within 10th day of each month. Any advance installment is always appreciable.
  12. l.        If a depositor fails to deposit the installment of one month then in the next month two installments must be deposited in due time. In case of failing of two consecutive installments, prior permission of the Branch incumbent must be taken to deposit all the pending installments.
  13. m.    In case of failing of 3 consecutive installment the account will be automatically changed to savings account.
  14. n.      Money cannot be withdrawn from the Hajj/Umrah account therefore cheque book will not be issued.
  15. o.      After the scheduled time of the scheme if the accumulated amount with profit is less than the amount of total estimated cost to perform Hajj/Umrah then the account holder must deposit the rest amount at a time. If for any reason the account holder cannot perform.
  16. p.      Similarly if the total cost for performing Hajj is less than the accumulated amount the rest will be returned to the account holder.
  17. q.      The account holder while disbursement of total amount must provide adequate proof of identity.
  18. r.       The Bank retains the authority to change, modify, rectify or cancel the rules regarding the scheme and the account holder must abide by the decision.

             III.            Mudaraba millionair scheme

People of Bangladesh are the followers of Islam. They are mostly interested to make interest free deposits. Taking these facts into consideration SIBL a joint venture Islamic bank introduced a monthly installment based “Mudaraba Millionaire Scheme”

Rules and regulations of this scheme:

  1. a.      Tk. 550/-, Tk. 1050/- or Tk. 2050/- is taken as monthly installment under Mudaraba principles of Islami Shariah.
  2. b.      Duration of this scheme will be 15, 20 and 25 yrs. After maturity an estimated amount will become as follows:
DurationMonthly InstallmentEstimated amount after maturity
152050Tk. 10 lac
201050Tk. 10 lac
25550Tk. 10 lac
  1. c.       The amount in the above is an estimated amount and may vary at maturity.
  2. d.      After starting of operation of this scheme size of installment cannot be changed.
  3. e.       Rules of depositing installment:

  Installment must be deposited on or before 15th day of each month. Otherwise the installment will be treated as defaulter.

  In case of 15th day being a govt. holiday installment can be deposited in the next working day.

  Installment can be deposited by cheque also but the clearance date of the cheque will be treated as deposit date.

  The depositor can deposit his/her monthly installment from his/her Savings/ Current/MND account through permanent standing instruction.

  1. f.       Any depositor may open one or more account in the same name in the same branch.
  2. g.      In case of the scheme account is closed before maturity then profit will be applied at the rate of Mudaraba Savings Deposit. But if the account is closed before 6 months no profit will be applied.
  3. h.      80% of the amount deposited can be taken as loan but profit rate decided by the bank must have to be paid by the client.
  4. i.        If a depositor fails to deposit 4 consecutive installments then the account will be closed and profit will applied as per rate of Mudaraba Savings Rate. Profit for the first 06 (Six) months shall not be applied.
  5. j.        The Bank reserves the right to invest the funds received in mudaraba term deposit accounts, in its sole judgment, in any interest-free “Halal” business it deems fit.
  6. k.      In case of change of address or telephone number the depositor must inform the bank immediately. The bank will make correspondence with the depositor by postal service and in case of missing or delay in delivery, the bank will not be liable.
  7. l.        a. After the death of the depositor the legal guardian of immature nominee or the nominee himself can continue the scheme. In this a new agreement must be signed with the bank.

b. After the death of the depositor the nominee by providing adequate prove to the bank.

c. The account is matured before the nominee becoming matured then the legal guardian may encase the amount by providing adequate prove to the bank.

  1. m.    Any Tax, VAT or Excise duty as applicable by Govt. will be deducted from the account.
  2. n.      The bank reserves the right to add or alter any or all the rules governing this scheme and such altered or additional rules shall be immediately thereafter be deemed to be binding on all depositors.

             IV.            Mudaraba special savings (pension) scheme

Generally people wants save a portion of their income for economic assurance at old ages. For this reason a unique kind of savings scheme has to be introduced so that a portion of income can be deposited regularly for a long time span. This enables a person to get quite a considerable amount after maturity.

Taking the above reasons into account Social Islami Bank Ltd, a joint venture Islamic bank have 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.

Intentions and Goal of the scheme:

  To create awareness to deposit among average income people.

  To create a chance for attractive deposit scheme.

  To create an interest free investment.

Eligibility:

  Any Bangladeshi person aged above 18 yrs and having sound mental condition can may open this scheme.

  To open this account there must be a signature of a valued introducer.

  Parents or legal guardians can open this scheme in the name of their under aged children.

Rate of installment

Tk. 100/-, Tk. 200/-, Tk. 300/-, Tk. 400/-, Tk. 500/-, Tk. 1000/-

Profit & Wait age:

The depositors will get a percentage from the shariah-based investments made by the bank.

Duration of the schemeWaitage
5 yrs1.05
10 yrs1.08

The maturity amount may be more or less than the estimated amount.
In case of amount withdrawn before 6 months no profit will be applied.
In case of amount withdrawn before 5 yrs but after 6 months profit will be applied as Mudaraba Savings Rate.

In case of 10 years scheme if the amount withdrawn after 5 yrs then profit will be applied as per MSDPS rate for 5 years and for the rest period profit will be applied as Mudaraba Savings Rate.

After the end of scheme period the depositor may take the matured amount with profit by fixing a monthly take home amount.

After maturity estimated profit will be applied as follows:

Monthly InstallmentEstimated amount after maturity
5 years10 years
100/-8000/-22500/-
200/-16000/-45000/-
300/-24000/-67000/-
400/-32000/-90000/-
500/-40000/-112500/-
1000/-80000/-2,25,000/-

Nominee selection:

The depositor may nominate single or multiple person of hie account. In case of multiple people being nominee then percentage of each nominee must be mentioned.

In case death of the nominee the depositor may change the nominee by providing notice to the bank.

Automatic close of the account:

If the depositor fails to deposit 3 (three) installments consecutively before completion of 5 years of the account then the account will be closed and profit will be applied as per Mudaraba Savings Deposit rate.

Others:

  1. a.      The depositor must deposit the installment by cash or cheque within 15th day of each month. In case of 15th day being govt holiday then the amount can be deposited in the next working day.
  2. b.      In case of clearing cheque is not collected within 15th day then the depositor will be treated as defaulter for that month.
  3. c.       The amount and duration of the scheme will not be changed.
  4. d.      The account can be transferred from one branch to another by a written application mentioning the actual reason of transferring.
  5. e.       The depositor can close the account any time with a service charge of Tk. 25.00.
  6. f.       VAT, TAX as applicable by Govt must be borne by the depositor.
  7. g.      The bank reserves the right to add or alter any or all the rules governing MSDPS and such altered or additional rules shall be immediately thereafter be deemed to be binding on all depositors.

                V.            Mudaraba education saving scheme

Education expenditure especially for higher studies is increasing day by day. In many cases children loses 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 our parents to bear child’s educational expenses in a planned manner.

General Rules & Regulations of Mudaraba Education Savings Scheme:

  1. a.      Any amount of Tk. 25,000/- or multiple is accepted in this scheme.
  2. b.      After maturity the amount can been cashed at a time or can be taken for the next 6 (Six) years of maturity as mentioned in the following table:
  3. c.       The abovementioned maturity amount may differ due to the annual profit rate achieved by the Bank. The depositor will get more or less depending on the profit rate.
  4. d.      For the above mentioned reason the depositor may get more or less amount of monthly allowance also.
  5. e.       The depositor will get a receipt on the deposited amount.
  6. f.       In order to receive the monthly education allowance the depositor will have to submit all the Receipts duly discharged and proper instruction must be provided in writing to nominate a person for receiving the allowance.
  7. g.      The instrument cannot been cashed before maturity. In case of emergency if the depositor wants to en cash before maturity the following rules will be applicable:

  If the instrument is encashed before 7 years then Mudaraba Savings Deposit will be applied on the deposited amount.

  If the amount is en cashed after 7 years then amount will be given as per rules of 7 years scheme and for the rest years Mudaraba Savings Deposit rate will be applied.

  1. h.      a. In case of Death of the depositor the amount payable will be paid to the nominee. If there is no nominee by submitting Succession certificate the amount will be paid to legal successor of the depositor.b. In case of death of the depositor if the nominee wants to take monthly allowance for 6 six years then the instrument must be submitted to bank and should be duly discharged.
  2. i.        To issue a duplicate instrument the rules for issuing duplicate Term deposit will be applicable.
  3. j.        TAX, VAT, Excise Duty as applicable by Government will have to be borne by the depositor.
  4. k.      Bank authority has the authority to change/amend the rules and regulations regarding the scheme as and when required and the depositor must abide by the rules.

             VI.            Mudaraba bashastan savings scheme

Housing has become one of the most fundamental needs of human civilization. But in this early 20th century most of the people of Bangladesh are lacking to fulfill this basic need. As a follower of Islamic Shariah, Social Islami Bank Ltd focuses forward to help people to fulfill this basic need.

Main features of this scheme:

  1. a.      The applicant has to fill the application form duly.
  2. b.      An amount of Tk. 500/-, 1000/-, 1500/-, 2000/- or any amount multiple can be deposited under this scheme.
  3. c.       The depositor will enjoy earnings from investments under Islami Shariah based Mudaraba rules.
  4. d.      As per rules of Islami banking the actual amount may vary from the estimated amount.
  5. e.       In case of failing of 3 (Three) consecutive installments the account will be closed. In such cases profit will be given as per savings account rate, but no profit will be given if the account is closed within 6(Six) months.
  6. f.       The account holder may choose any installment size on account opening, which cannot be changed later.
  7. g.      Installment must be deposited within first 15 day of the month. Any amount deposited as advance installment is always welcome.
  8. h.      The scheme is 15 years long and if the depositor intends to withdraw the amount then profit will be given as per savings rate.
  9. i.        TAX, Yearly excise duty etc applicable on the profit will be borne by the depositor.
  10. j.        In case of change of address the Bank should be notified immediately.
  11. k.      An account in the name of under-aged person can be opened under this scheme.
  12. l.        After successful continuation of the scheme for 5 years the depositor may take up to 80% loan of the deposited amount.
  13. m.    After successful completion house building loan facility from the bank may be considered by the bank authority.
  14. n.      The Bank retains the authority to change, modify, rectify or cancel the rules regarding Bashthan Savings scheme and the account holder must abide by the decision.
  15. o.      Income tax imposed on the earnings from the deposited amount should be deducted from depositors account.

          VII.            Al Wadiah current deposit

  1. a.      ALWADIAH Current Deposit A/C’s are opened on proper introduction with minimum initial deposit fixed by the Bank.
  2. b.      ALWADIAH Deposit is accepted on ALWADIAH 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.
  3. c.       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.
  4. d.      Withdrawal can be made only through cheques issued by the bank.
  5. e.       The A/c. holder(s) shall preserve the cheque book with utmost care so that it might not be lost or stolen. For any misappropriation taken place through any such stolen or lost cheque, the Bank shall not be held responsible.
  6. f.       The depositor shall take back the pay-in-slip after deposit of any money or cheques etc. clearly specifying the number and title of account in the slip. All cheques, DD/PO etc shall be crossed before deposit.
  7. g.      Bankers shall note “Stop payment” of the account holder with due care. Payment of any such cheque, the Bank shall not be held responsible.
  8. h.      Any change in the address of the depositor should be immediately communicated to the bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters, remittances etc sent through Post office and other agents.
  9. i.        Bank makes entry in the account with due care. However, for any wrong entry, the Bank reserves the right for adjustment/correction and no responsibility can be accepted by the bank for any loss caused by the caused by the account holder due to such inadvertent/wrong entry passed by the Banker.
  10. j.        The Bank reserves the right to close any account without notice and alter, add any or all of the rules and such altered/additional rules shall immediately thereafter be deemed to be binding on the account holder.

       VIII.            Mudaraba savings deposit

To open a Mudaraba Savings Deposit account in our Bank the following rules and regulations are applied:

  1. a.      Mudaraba i.e. Deposit of one party and on the basis of operation by another party this deposit is taken.
  2. b.      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.
  3. c.      The bank may merge amount collected through this deposit and may invest in any shariah allowed investments.
  4. d.      After determining the annual profit/loss the depositor will get his part of profit.
  5. e.      In case of balance declining below bank stipulated margin in any month profit shall not be provided for that month.
  6. f.       Any amount can be deposited in any working hour but for applying profit the lowest amount from 6th day till the last day of the month will be taken as the deposit of that month.
  7. g.      Amount must be withdrawn only by bank issued instruments like cheques.
  8. h.      Amount can be withdrawn Twice a week but highest 4 times a month. One fourth of the deposited amount or Tk. 2000/-, the lowest can be withdrawn without notice. If any amount exceeding the above is withdrawn without providing 07 days prior notice then no profit will be applied for that month.
  9. i.        If an account is closed before the declaration of current years profit rate then the depositor will have to take profit as per previous years declared profit rate.
  10. j.       The Bank has the right to deny opening any account or can close down any existing with showing any reason.
  11. k.     The bank operates the client accounts with utmost attention but still if any miscalculation occurs the bank holds the right to make adjustments and rectify the problems. But in this situation if any miscreants occur which is caused by the client the bank will not be hold liable for that.
  12. l.        The Bank may change / amend / rectify any rules and regulations of this account and the client must abide by the rules.
  13. m.   The depositor by will may contribute a minimal percentage to his selected Social Development works.

             IX.            Mudaraba term deposit

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 (propietorship/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, for example :
Received from Mr. X Guardian of Mister/Miss…………………. (Minor)

  1. a.      The mudaraba term deposits are accepted for periods of 12, 24, 36 months. Weightage on the rate of return is given to deposits of longer maturity.
  2. b.      The Bank reserves the right to invest the funds received in mudaraba term deposit accounts, in its sole judgement, in any interest-free “Halal” business it deems fit.
  3. c.       Mudaraba term deposit account holder will share the profit of investment with Social Islami Bank Ltd, at the rate declared by the bank from time to time. Any loss which cannot be covered by the investment loss offsetting reserve will be adjusted from Mudaraba fund and in that case the bank shall not take any remuneration for the service rendered in managing the fund.
  4. d.      The profit earned on Mudaraba Term Deposit account will be credited as determined by the bank as its sole direction on the basis of its net working results at the end of the year, within a reasonable time from the date of the close of the books of accounts of the bank. The banks decision in this respect will be final & binding on the Mudaraba Term depositors. If the Mudaraba Term Deposit account is closed before declaration of profit of current year, the depositor shall accept profit at the rate declared in the preceding year. In that case, both the bank & the depositor will relinquish their claim on difference amount of profit, which may accrue at the close of the year.
  5. e.       The account holder is not allowed to withdraw the amount before maturity date. But on obtaining the Bank’s prior consent the depositor(s) may withdraw the deposit before maturity without any profit i.e. no profit no loss basis.
  6. f.       MTD account holder may withdraw the profit amount annually if he so desires on condition the final adjustment. If needed, will be made at the end of the year. MTD account holder will give an undertaking to that effect.
  7. g.      If the profit amount is not withdrawn it will automatically be added to the principal amount annually and the entire amount will earn profit/loss.
  8. h.      MTDR is not transferable instrument & as such it cannot be endorsed in favor of others.
  9. i.        The MTDR should be preserved properly. In case of loss, the account holder should notify the issuing branch immediately by quickest possible means so that the bank can take care of.
  10. j.        Matured deposit if not encashed within one month of maturity, the deposit shall automatically be renewed for the period it kept before.
  11. k.      Any change in the address of the depositor should be immediately communicated to the bank. No responsibility can be accepted by the bank for delay, non-delivery etc. of letters, remittances etc sent through Post office and other agents.
  12. l.        The bank retains the right of refusing to accept any deposit from any person in MTD account without assigning any reason.
  13. m.    The bank reserves the right to add or alter any or all the rules governing this scheme and such altered or additional rules shall be immediately thereafter be deemed to be binding on all depositors.

Deposit Rate

Mudaraba Term Deposit Receipt (Shacsondo Protidin)
  • 01 Months (Below one Crore)
12.5
  • 12 Months (Below one Crore)
12.5
  • 03 Months (one Crore and above)
12.5
  • 03 Months (Below one Crore)
12.5
  • 02 Months (Below one Crore)
12.5
  • 06 Months (Below one Crore)
12.5
  • 12 Months (one Crore and above)
12.5
  • 06 Months (one Crore and above)
12.5
  • 02 Months (one Crore and above)
12.5
  • 01 Months (one Crore and above)
12.5
Mudaraba Notice Deposit A/C
  • 1 crore to below 25 crore
3.00
  • Below 1 crore
2.75
  • 35 crore to below 50 crore
3.25
  • 50 crore to below 100 crore
3.50
  • 50 crore to above
3.50
Shopner Shiri
  • 2 years (monthly Installment)
3750
  • 3 years (monthly Installment)
2360
  • 5 years (monthly Installment)
1260
  • 10 years (monthly Installment)
470
Mudaraba Savings Deposit3.50

Mudaraba Scheme Deposit

  • Cash Waqf

10.00

  • Mudaraba Hajj Savings Deposit

10.00

  • Mudaraba Monthly Savings Scheme

10.00

  • Mudaraba Bashsthan Savings Scheme

10.00

  • Mudaraba Special Deposit Pension Scheme (General) for 3 Years (Sonali Din)

11.00

  • Mudaraba Monthly Profit Deposit Scheme

12.5

  • Mudaraba Millionaire Savings Scheme

10

  • Mudaraba Education Deposit Scheme

10

  • Mudaraba Lakhopati Deposit Scheme

11

  • Mudaraba Special Deposit Pension Scheme (Garments Worker) for 3 Years (Sonali Din)

11.50

  • Mudaraba Double Benefit Deposit Scheme

12 to 12.25

  • Mudaraba Marriage Savings Scheme

11

  • Mudaraba Mohorana Savings A/C (5 Years)

11

  • Mudaraba Mohorana Savings A/C (10 Years)

11

  • Mudaraba Special Deposit Pension Scheme(General) for 5 Years (Sonali Din)

11.00

  • Mudaraba Special Deposit Pension Scheme(Garments Worker) for 5 Years (Sonali Din)

11.50

  • Mudaraba Special Deposit Pension Scheme(General) for 10 Years (Sonali Din)

11.00

  • Mudaraba Special Deposit Pension Scheme(Garments Worker) for 10 Years (Sonali Din)

11.50

 

Sonali Din

  • Mudaraba Special Deposit Pension Scheme (General) for 3 Years

11

  • Mudaraba Special Deposit Pension Scheme (Garments Worker) for 3 Years

11.5

  • Mudaraba Special Deposit Pension Scheme(General) for 5 Years

11

  • Mudaraba Special Deposit Pension Scheme(Garments Worker)

11.5

  • Mudaraba Special Deposit Pension Scheme(General) for 10 Years

11

  • Mudaraba Special Deposit Pension Scheme(Garments Worker) for 10 Years

11.5Somridar Sophan

  • Mudaraba Double Benefit Deposit Scheme (6 Years)

12.5SUBORNO REKHA

  • SUBORNO REKHA PENSION SCHEMES(3 years)

12.5

  • SUBORNO REKHA PENSION SCHEMES(5 years)

12.5

  • SUBORNO REKHA PENSION SCHEMES(10 years)

12.5SHABUJ SHAYONNAYA

  • SHABUJ SHAYONNAYA PENSION SCHEMES (10 YEARS)

12.5

  • SHABUJ SHAYONNAYA PENSION SCHEMES (5 YEARS)

12.5

  • SHABUJ SHAYONNAYA PENSION SCHEMES (3 YEARS)

12.5SUBORNO LATA

  • SUBORNO LATA DEPOSIT SCHEMES (3 YEARS)

12.5SHABUJ CHAYA

  • SHABUJ CHAYA DEPOSIT SCHEMES (3 YEARS)

12.5

 

BILLS AND CLEARING SECTION

 SIBL foreign exchange branch performs the bill clearing function through Local office. SIBL Local office acts as the agent of all SIBL branches for the clearing house of the Bangladesh Bank. There are two types of cheque which are-

1. Inward clearing cheque

2. Outward clearing cheque.

Inward Cheques:

Inward cheques are those ones drawn the respective branch which have been presented another banks and will be cleared / honored through the clearing house of Bangladesh Bank. For example the cheque drawn on SIBL Local Office Br, then the cheque is called inward cheque of SIBL Local Office Br,

Accounting treatment:

Customer’s A/C

Debit.

SIBL General A/c

Credit

 Outward Cheques:

Outward cheques are those ones drawn on other bank branches which are presented on the concerned branch for collection through clearing house of Bangladesh Bank. These cheques are called outward cheques. For example, the cheque drawn on Mercantile Bank LTD, Kawran Bazar Br has been presented on SIBL Foreign Exchange Br. This cheque is called the outward cheque of SIBL Foreign Exchange. Hence it is said that the cheque which is the inward cheque of one bank is the outward cheque of another bank.

Outward Bills for Collection (OBC)

By OBC, we mean that those cheques drawn on other banks which are not within the same clearing house. Officer gives OBC seal on this type of cheques and later sends a letter to the manager of the branch of the some bank located in the branch on which cheque has been drawn. After collection of that bill branch advises the concerned branch in which cheques has been presented to credit the customer account through Inter Branch Credit Advice (IBCA).In absence of the branch of the same bank, officer sends letter to manager of the bank on which the cheques is drawn. That bank will send pay order in the name of the branch. This is the procedure of OBC mechanism.

 Clearing

The scheduled banks clear the cheques drawn upon one another through the clearinghouse. SIBL is a scheduled Bank. According to the Article 37 (2) of Bangladesh Bank Order, 1972, the banks which are the member of the clearinghouse are called as Scheduled Banks. This is an arrangement by the central bank where every day the representative of the member banks gathers to clear the cheques. The place where the banks meet and settle their dues is called the clearinghouse. The clearinghouse sits for two times a working day. The SIBL Local Office Br sends the instruments through Inter Branch Debit Advice (I.B.D.A). SIBL Local Office acts as an agent in this case. For this, Local Office branch gives the following entries,

SIBL General A/C (Local Office Br) —————Dr.

Customer’s A/C———————————Cr.

If the instrument is dishonored, the instrument is returned to the Local Office branch through I.B.D.A. along with the following entries,

Customer’s A/C—————Dr.

SIBL General A/C——————Cr.

Receiving Cheques for Collection

In SIBL, cheques of its customers are received for collection from other banks. In case of receiving cheques, following points should be checked very carefully-The cheques should not carry a date older than the receiving date for more than 6 months. In that case it will be a ‘stale cheque’ and it will not be allowed for collection. Again the date of the cheque should not be more than 1 day’s forward than the receiving date. a. The amount in figures and words in both sides of the pay-in-slip should be same and it should also be same with the amount mentioned in figures and words in the cheque. b. The name mentioned in the cheque should be some in both sides of the pay-in-slip and it should be the same with the name mentioned in the cheque. c. The cheque must be crossed.

Cheque and Crossing

A “Cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. [According to section-6, Negotiable Instrument Act,1881]. A cheque may be classified into:

a)      An open cheque which can be presented for payment by the holder at the counter of the drawer’s bank.

b)      A crossed cheque which can be paid only through a collecting banker. Crossing cheque: A cheque is said to be crossed when two transverse parallel lines with or without any words are drawn across the face. Crossing may be general, special or restrictive.

 Issuing Cheque Book

Following procedures are maintained by SIBL, Local Office for issuing checkbook.

(a)    Firstly the customer will fill up the check requisition form.

(b)   The leaves of the checkbook under issue are counted to ensure that all the leaves and the blank requisition slip are intact.

(c)    The officer writes A/C number and branch name on all the leaves of the checkbook.

(d)    The name and the A/C number of the customer are than entered in the checkbook register against the particular checkbook series.

(e)    Then the officer sightseer, checkbook, and requisition slip

(f)    Lastly the checkbook is handed over to the customer after taking acknowledgement on requisition slip.

REMITTANCE OF FUNDS

Remittance of funds is ancillary services of SIBL. It aids to remit fund from one place to another place on behalf of its customers as well as non- customers of bank. SIBL has its branches in the major cities of the country and therefore, it serves as one of the best mediums for remittance of funds from one place to another. The main instruments used by SIBL, Local Office Br for remittance of funds.

-Pay Order/ Banker’s check.

-Demand Draft.

-Telegraphic Transfer.

Bank’s cheque/ Pay order

The pay order is an instrument issued by bank, instructing itself a certain amount of money mentioned in the instrument taking amount of money and commission when it is presented in bank. Only the branch of the bank that has issued it will make the payment of pay order. The banker’s cheque must become the branch for payment wherever it is presented.

Issuing of Pay Order

The procedures for issuing a Pay Order are as follows:

1. Deposit money by the customer along with application form.

2. Give necessary entry in the bills payable (Pay Order) register where payee’s name, date, PO no, etc is mentioned.

3. Prepared the instrument.

4. After scrutinizing and approval of the instrument by the authority, it is delivered to customer. Signature of customer is taken on the counterpart.

Cancellation of a Pay Order

If a buyer wants to cancel it, he should submit a letter of instrument in this regard and also return the instrument.

Bank Draft

The person intending to remit the money through a pay order has to deposit the money to be remitted with the commission which the banker charges for its services. The amount of commission depends on the amount to be remitted. On issue of the pay order, the remitter does not remain a party to the instrument

 i) Drawer branch

 ii) Drawee branch

iii) Payee.

This is treated as the current liability of the bank as the banker on the presentation of the instrument should pay the money. The banker event on receiving instructions from the remitter cannot stop the payment of the instrument. Stop payment can be done in the following cases:

i)                    Loss of draft before endorsement: in this case, “Draft reported to be lost, payee’s endorsement requires verification” is marked.

ii)                  Loss of draft after endorsement: In this case, the branch first satisfies itself about the claimant and the endorsement in his favor.

Charges

A commission of 0.15% is taken on the draft value & Tk.50/= is taken as postal charge.

Mail or Telex Transfer (TT)

Telex transfer is another widely used mode for remittances of funds. In case of telex transfer the message for transfer of funds is communicated through tested telex. SIBL generally recovers from the telex charges in addition to the usual service charges.

 Issuing of TT

SIBL follows the following procedures:

i)                    The customer deposits money with SIBL to be sent.

ii)           The customer obtains a cash memo containing TT serial number.

iii)         TT serial number, notifying part name is mentioned in the telex message.

iv)                The Telex Department confirms transmission of the telex.

Accounting entries for TT

Cash A/C, Client’s A/C ———————–Dr.

SIBL General A/C (Local Office branch) —————Cr.

Procedures for the incoming TT

After receiving the telex, it is authenticated by test. TT Serial number is verified by the “TT in-Concern branch” register. The following entries are given in the vouchers,-

SIBL General A/C (Local Office branch) ———————–Dr.

Client’s A/C——————————————Cr.

Tk. 50/= is taken as postal charge. The minimum commission is Tk. 50/= or o.15% of the amount whichever is higher.

 CASH SECTION

The cash section of any branch plays very significant role in general banking department. Because, it deals with most liquid assets The SIBL Local Office Br has an equipped cash section. This section receives cash from depositors and pay cash against cheque, draft, PO, and pay in slip over the counter.

Receiving Cash

Any people who want to deposit money will fill up the deposit slip and give the form along with the money to the cash officer over the counter. The cash officer counts the cash and compares with the figure written in the deposit slip. Then he put his signature on the slip along with the ‘cash received’ seal and records in the cash receive register book against A/C number. At the end of the procedure, the cash officer passes the deposit slip to the counter section for posting purpose and delivers the duplicate slip to the clients.

Account treatment

ParticularsDr./Cr.
Cash A/CDr.
Customer’s A/CCr.

Disbursing Cash

The drawn who wants to receive money against cheque comes to the payment counter and presents his cheque to the officer. He verifies the following information-

a) Date of the cheque

b) Signature of the A/C hold

c) Material alteration

d) Whether the cheque is crossed or not

e) Whether the cheque is endorsed or not

f) Whether the amount in figure and in word correspondent or not

Then he checks the cheque from computer for further verification. Here the following information is checked:

1) Whether there is sufficient balance or not

2) Whether there is stop payment instruction or not

3) Whether there is any legal obstruction (Garnishee Order) or not

After checking everything, if all are in order the cash officer gives amount to the hold and records in the paid register.

Account treatment:

ParticularsDr./Cr.
Customer’s A/CDr.
Cash A/CCr.

The cash section of SIBL deals with all types of negotiable instruments, cash and other instruments and treated as a sensitive section of the bank. It includes the vault which issued as the store of cash instruments. The vault is insured up to Tk. 60 laces. If the cash stock goes beyond this limit, the excess cash is then transferred to Head Office. When the excess cash is transferred to SIBL Head Office. The cash officer issues IBDA.

Account treatment:

SIBL General A/C——————————— Dr.

Cash A/C——————————————– Cr.

When cash is brought from SIBL Head Office then,

Account treatment:

Cash A/C——————————————- Dr.

SIBL General A/C——————————— Cr.

 LOCKER SERVICE

SIBL Local Office Br is providing facility of locker service for the purpose of safeguarding the valuable property of customers. The person or the organization that has any account in bank branch can enjoy this service. They can keep their valuable assets in banker’s custody. Customers have right to look after with a key of their individual locker provided by bank. SIBL maintains the following types of lockers:

—— Large locker.

—— Medium locker.

—— Small locker.

For enjoying this service, clients have to give charge yearly Tk. 1500, Tk. 1250 and Tk.700 for large, medium and small locker respectively.

 CLOSING OF AN ACCOUNT

For two reasons, one can be closed. One is by banker and other is by the customer.

By banker:

If any customer doesn’t maintain any transaction within six years and the A/C balance becomes lower than the minimum balance, banker has the right to close an A/C.

By customer:

If the customer wants to close his A/C, he writes an application to the manager urging him to close his A/C. Different procedures are followed in cash of different types of A/C to close. Fixed deposit A/C is closed after the termination of the period. Closing process for current & savings A/C:

  1.  Receiving customer’s application the officer verifies the balance of the A/C.
  2. He then calculates interest and other charges accumulated on the A/C.
  3. If it bears a credit balance, the officer writes advice voucher. He gives necessary accounting entries post to accounts section.
  4. The balance is returned to the customer. And lastly the A/C is closed.

But in practice, normally the customers don’t close A/C willingly. At times, customers don’t maintain any transaction for long time. Is this situation at first, the A/C becomes dormant and ultimately it is closed by the bank.

Social Islami Bank Limited

 Some are parts:

General Banking Activities and Financial Performance on Social Islami Bank Limited (Part 1)

General Banking Activities and Financial Performance on Social Islami Bank Limited (Part 2)

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