Report on Investment and General Banking - Assignment Point
Report on Investment and General Banking
Subject: Finance | Topics:

An Analysis of Investment & General Banking  of

Islami Bank Bangladesh Limited.

Submitted To:

Department of Business Administration

Northern University Bangladesh

Submitted By:

Ramendra Nath Bhowmik

RMBA-ID NO-02090201961

Department of Business Administration

Northern University Bangladesh

Date of Submission – 19th June 2011

Declaration: 

I do hereby declare that this report entitled “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” Submitted by me to Department of Business Administration Northern University Bangladesh, for the degree of Masters of Business Administration is an original work.

I also declare that it has not been submitted earlier either partly or wholly to any other University or Institution for any Degree, Diploma, Associate-ship, Studentship, Fellowship and other similar title or prizes.

Ramendra Nath Bhowmik

 ID NO-02090201961

 (Major in Finance)

Department of Business Administration

 BONAFIDE CERTIFICATE:

This is to certify that this report entitled “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” submitted to Northern University Bangladesh, in connection with the institute internship program is a bonafide record of work done by Ramendra Nath Bhowmik under my supervision at the IBBL from “19-04-2011 program..” to “ 17-06-2011”.

………………………..                                                      ………………………

Md. Shoriful Islam                                                             Committee Chairman

Senior Lecturer

Department of Business Administration

Northern University, Bangladesh

LETTER OF TRANSMITAL:

June 16, 2011

To,

Md. Shoriful Islam

Sr. Lecturer.

Department of Business Administration

Northern university Bangladesh

Sub: Submission of Internship Report about “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.

Dear Sir,

I am pleased to submitting my internship report as a partial fulfillment of MBA program. I tried my best to present this internship report on according An Analysis of Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” I tried my best to work sincerely to cover all aspects regarding the matter. Through I faced some limitations to prepare the report due to scarcity of organized data , time limitation and not enough knowledge about banking sector,  I have thoroughly enjoyed in preparing this internship report which has contributed significantly to my understanding on the essentials and importance practical knowledge .

I believe that this internship program has enriched both my knowledge and experience. If you have further queries regarding the report, please let me know.

Sincerely yours

Ramendra Nath Bhowmik

 ID NO-02090201961

 (Major in Finance)

Department of Business Administration

ACKNOWLEDGEMENT:

First I would like to thank almighty Allah for blessing me with the ability to write and submit this report. A large number of individuals have contributed directly and indirectly in preparation of this report. I am thankful to all of them for their assistant and encouragement. First, I delicate all the credits to the Northern University Bangladesh.

Special mention must be made t some persons from whom I have received continuous support without which it might not be possible for me to complete the report. Among them Md. Shoriful Islam, Sr. Lecturer of Business Department of Northern University Bangladesh who has spent his valuable time in supervising my study very closely and cordially. I cannot deny his suggestions to apply new indebted to his contribution.

I would like to thanks my gratitude to Md. Yeanur Rahman (Senior Vice President & Manager) of Paltan branch of Islami Bank Bangladesh Limited. I also would like to thank Md. Hedayet Ullah Course Coordinator ofIslami Bank Training and Research Academic of IBBL for this full support and encouragement. I am also grateful to other personnel of this ac ademy. They tried their best to manage their valuable time for me in furnishing information, as well as gave me suggestion to conduct the study.

I also express my thanks and gratitude to the authority of IBBL to allow me to complete my practical orientation at their bank and helped me by providing all sorts of information and financial data for the preparation of this report. I would like to thank all other officers in this branch to help me despite tremendous work pressure. I would very much appreciate and sincerely acknowledge suggestions from friends for improving of this report.

 TABLE OF CONTENT:

ChapterTopicPage Number
Executive summaryi-ii
Chapter-1Introduction
1.1Introduction1
1.2Origin of the report1
1.3Scope of the study1
1.4Objective of the study2
1.5Methodology of the study2
1.5.1Secondary source2
1.5.2Primary source3
1.5.3Limitation of the study3
Chapter-2Profile of the Islami Bank Bangladesh limited
2.1Definition and concept of Islami Bank4
2.2Basic objective of IBBL4
2.3.1Prohibition of interest5
2.3.2Investment based on profit5
2.3.3Investment in Halal business5
2.4Mission of IBBL5
2.5Vision of IBBL6
2.6Characteristics of IBBL6
2.7Funcon of IBBLti6
2.8Corporate information at glance7
Address of the Head office8
2.9Hierarchy Management of IBBL9
3.1Paltan Branch:10
3.2Deposit products of Paltan Branch:10
3.3Investment product of Paltan Branch10-11
3.4Hierarchy management of Paltan Branch12
3.5Address of  the Paltan Branch13
3.6Functional department of Paltan Branch13
4.1Internship Duties & Position14
4.2Duties performed in General Banking14-17
4.3Leaning points from my internship work at different department17-18
5.1Introduction19
5.2Functional Department:19
5.3Modes of investment20
5.4Bai-Mechanism (Trading Mode):20
5.5.1Bai-Murabaha:20-23
5.5.2Bai-Salam:23-24
5.5.3Application of Bai-Salam 24
5.5.4Bai-Istisna’a:24-25
5.5.5Quard25
5.5.6 Share Mechanism26
5.6.1Mudaraba (Share Mechanism):26-27
5.6.2Musharaka (Partnership):27-28
5.7Ijara mechanism (Leasing Mode28
5.7.1Sirkatul Melk:29
5.7.2Ijarah:29-31
5.7.3 Sale:31
5.8.Investment procedure:31
5.8.1Induction of Client:31-32
5.8.2Application:32-33
5.8.3Categorization:33
5.8.4Processing and Appraisal:33-35
5.8.5Sanction:35-36
5.8.6Documentation stage:36
5.8.7Disbursement Stage:37
5.8.8Monitoring and Recovery Stage:37
5.9.1Household Durables Scheme38
5.9.2Housing Investment Scheme:38
5.9.3 Officials of the Defense Forces:38
5.9.4 Real Estate Investment Program:38
5.9.5Transport Investment Scheme:39
5.9.6Car Investment Scheme:39
5.9.7Investment Scheme for Doctors:39
5.9.8Small Business Investment Scheme:39
5.9.9Agriculture Implements Investment Scheme:40
5.9.10 Micro-Industries Investment Scheme:40
5.9.11Rural Development Scheme:40-41
5.10Some Islamic New Investment Products:41-44
6.1Introduction:45
 6.2Functions of General Banking:45
6.3Types of Account:46
6.4General Characteristics of deposit accounts:47
6.4.1Al-wadeeah Current Account(AWCA):47
6.4.2Mudaraba Savings Accounts (MSA)47
6.4.3Mudaraba shart notice47
6.4.4Mudaraba Term Deposit Receipt (MTDR)48
6.4.5Incidental Charge48
6.5General Practice in account opening section49
6.6KYC (know Your Customer)49
6.7Account Opening Register50
6.8Check Book50
6.9Account Closing50
6.10Account Transfer50
6.11Local Remittance51
6.11.1Pay Order (PO)51
6.11.2Demand Draft (DD)51
6.11.3Telegraphic Transfer (TT)52
6.12Clearing and Collection Department53
6.12.1Clearing53
6.12.2Cheque dishonor53
6.13Transfer Delivery53
6.14Debit Advice54
6.15Credit Advice54
6.16OBC54
6.17Cash Section56
6.18Dispatch Section56
6.18.1Inward dispatch56
6.18.2Outward dispatch57
Chapter-7SWOT analysis58
7.1Strengths58
7.2Weaknesses58
7.3Opportunities59
7.4Threats59
7.5Findings about the Islami Bank Bangladesh Limited, Paltan Branch60
Chapter-8Conclusion and Recommendation61-62
8.1Conclusion61
8.2Recommendations62
References63

BBREVIATIONS:

AD                  : Authorized Dealer

ATM               : Automated Teller Machine

AWB               : Air Way Bill

BBL/C                        : Back to Back Letter of Credit

BIBA              : Bangladesh Institute of Bankers Association

BL                   : Bill of Landing

C&F                : Clearing & Forwarding

CCI & E          : Chief Comptroller of Import & Export

CIB                 : Credit Information Bureau

CRF                : Clean Report Finding

CSR                : Corporate Social Responsibility

DP Note          : Demand Promissory Note

EPB                 : Export Promotion Bureau

ERC                : Export Registration Certificate

FCA                : Foreign Currency Account

FDI                 : Foreign Direct Investment

FDBS              : Foreign Documentary Bills for Collection

FSRP               : Financial Sector Reforms Program

HS Code         : Harmonic Symbolized Code

IBBL               : Islami Bank Bangladesh Limited

IBC                 : Inward Bills for Collection

IBCA              :  Inter Branch Credit Advice

IBCT               : Inter Branch Credit Transaction

IBDA              : Inter Branch Debit Advice

IBTRA            : Islami Bank Training & Research Academy

ICC                 : International Chambers of Commerce

IDB                 : Islamic Development Bank

IFC Act           : Import & Export Act

IRC                 : Import Registration Certificate

L/C                  : Letter of Credit

LCAF              : Letter of Credit Authorization Form

TR                   : Trust Receipt

MPI                 : Mura Post Investment

NFCD             :  Non   Resident Foreign Currency Deposit

NRT                : Non- Residence Dollar

OBC                : Outward Bills for Collection

PAD                : Payment Against Document

PRC                : Proceeds Realization Certification

SWIFT            : Society for Worldwide Inter Bank Financial Telecommunication

STD                 : Short Term Deposit

TC                   : Travel Checks

TIN                 : Tax Identification Number

UCPDC          : Uniform Customers & Practices for Documentary Credit

Executive Summery:

As a student of NUB, Internship is an integrate part to accomplish the MBA degree. This report has been prepared on the basis of work experience in Paltan Branch of Islami Bank Bangladesh Limited with the instruction of Mr. Md. Shoriful Islam, Senior Lecturer in NUB. This report focuses my experience in Islami Bank Bangladesh Limited and has provided a clear idea about the activities and operational activities of Islami Bank Bangladesh Limited.

Basically IBBL is an Islamic Bank based on “Islamic Shariah”. It follows the alternative concept of Islamic Banking which represents unique human approach to credit and banking based on profit- oriented economy devoid of interest. In this regard IBBL has introduced a number of income generating programs for the millions of urban and rural poor people. With the objective in view IBBL has formulated a profitable investment option for the rich to invest and for the poor a credit program to earn and live in a better society with greater security and peace.

IBBL is operating in a three-sector banking system. Such as Formal, Non-formal and Voluntary sector. General Banking, Investment and Foreign Exchange are operated under the formal sector. Development and management of waqf and mosque properties, management and inheritance properties and joint venture for management of non-profit foundations, and charitable trusts and organizations are executed under the Voluntary Sector.

Internship functions have been performed in three departments (General Banking, Investment and foreign Exchange). Among the three departments of the bank more emphasize has been given to General Banking activities in order to prepare this report.

Basically report’s findings is cover three major areas, – “An Analysis of General Banking and Investment of Islami Bank Bangladesh Limited.-Special Focus on Paltan Branch.” General Banking provides the foundation of banker customer relationship through opening account. This is the busiest department and the daily transaction of concerned to the customers for drawing of depository money, selling of instruments to them  for remittance purpose, collection of their instruments providing other ancillary services to them and keep customer section busy. Other functions like- offering various types of account, remittance, clearing, cash section function. By these deposits IBBL provides many services to manage the need on customers.

In the case of import-export section IBBL shows better performance than other banks. The import and export business of IBBL has a gradual- increasing tend from 1983. But in order to capture higher market share than the competitors, the policy of IBBL in this regard should be more flexible and competitive than the present.

IBBL is performing well in terms of acquired assets and human resources of higher quality. IBBL will be more effective in our economy by adopting modern financial technology and extending their activities in human and social welfare.

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