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Economic Development of Bangladesh: The Role of IBBL

*Shafiqur Rahman ** Nicholas McDonald


Abstract

This paper presents the role of Islami Bank Bangladesh Limited (IBBL) to the recent economic development in Bangladesh. The study analyses published texts, articles, websites and annual report of IBBL through a content analysis. Key findings of this study manifest the different areas of economic development in Bangladesh by IBBL like generating employment, earning foreign remittance, strengthening rural economy, promoting ecology and green banking, boosting industrialization, developing the SMEs, assisting in foreign trade (import-export), developing the housing sector etc. This study also identifies IBBLs contribution to Corporate Social Responsibility in Bangladesh as well as significant contribution to the national exchequer. This paper contributes to the field of economic development of Bangladesh the role of IBBL behind it, especially where there is a lack of literature in this specific area. Keywords Economic Development, Bangladesh, Islami Bank Bangladesh Limited (IBBL) * Shafiqur Rahman is an MBA Coordinator for International Islamic University Chittagong (Dhaka Campus); Director, Centre for Law Development and Governance, PhD Candidate, Macquarie University, Sydney, Australia. Email: RahmanBangladesh@yahoo.com ** Nicholas McDonald is a Management Consultant in Sydney, Australia. Email: ncmcdonald@optusnet.com.au

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Introduction:

A bank is a financial institution, where people secure their money and use this institution as a source of possible finance. Banking in the form in which it exists nowadays is comparatively of recent origin [1]. Before the advent of modern banking, direct finance, where the owner of capital deals directly with the user of capital, was the customary mode of transference of funds from savers to investors. Nowadays, banks are organizations engaged in any or various functions i.e., receiving, collecting, transferring, paying, lending, investing, dealing, exchanging, and servicing money and claims to money both locally and internationally [2]. Bangladesh is a country suffering from immense social, political, economic and environmental issues and these issues need to be addressed for the overall development of this country. However, the economic development is one of the prime factors, which can resolve many of its current problems. The growth of business sectors and open market economy has created a great opportunity for Bangladesh for its development. The contribution of the banking sector is playing significant role in the development of this country. However, the emergence of Islamic banking in Bangladesh has added a new height in the banking sector. The role of IBBL seems to be magnificently surpassed among all the Banks in Bangladesh during last one decade. Economic Development refers to changes that affect a local economy's capacity to create wealth for local residents [3]. Economic development for Bangladesh can be identified through number of indicators, including GDP growth, poverty issues, employment, healthcare, environment, education, trade and commerce etc. This study clearly identifies that during last 28 years, IBBL has contributed in improving Bangladesh economy through making positive changes to all its economic indicators. The core question addressed by this study was: What role IBBL has been playing towards the economic development in Bangladesh? This study contains a few steps below. Firstly, the introduction of this paper has been placed; secondly, the relevant literature has been reviewed; thirdly, the research context, Bangladesh has been presented; fourthly, the origin and development of Islamic banking and the commencement of IBBLs journey has been briefed; fifthly, key information of IBBL has been included; sixthly, the theoretical framework, under which IBBL operates has been narrated; seventhly, methodological framework of this study and its relevance has been explained; eighthly, the role of IBBL in different business sectors of Bangladesh has been described; ninthly, noted the limitation and finally, summary and conclusion. 2.0 Relevant Literature review:
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Banking system has significant role in the economic development, historically (4). On one hand, banks give the security of savings of the general people; on the other hand, lend money to the entrepreneurs to start a news business or expand an existing business, which ultimately create velocity of money and generation of employment within an economic territory. Modern banking system is involved in numerous financial services activities starting from lending money to exchange money nowadays [5]. The aim of Islamic economics is not only the elimination of interest based transactions and the introduction of the zakah (obligatory contribution to poor by Muslims) system but also the establishment of just and balanced social order free from all kinds of exploitation [6]. Zakah system takes the wealth from the rich according to the guideline of Shariah (Islamic Jurisprudence) and spreads the wealth among the deserving people that helps the society to sustain and grow. The principles of Islamic economics recommend interest-free and equity-based financing through the Islamic banking system. A great scholar on Islamic economics, Ahmad says that elimination of interest does not mean zero-return on capital [7]. Rather, Islam forbids a fixed predetermined return for a certain factor of production i.e. one party having assured return and the whole risk of an entrepreneurship to be shared by others. Instead of interest, Islamic economics introduced profit and loss based banking transaction which spreads the risk between borrower and the banks, which made Islamic banks fundamentally different from the conventional interest based banks. Referring to the existence of Islamic banking amid of conventional banking system and economy, another expert of Islamic banking system, Sarkar expresses that Islamic banking system can provide efficient banking services if they are supported with appropriate banking laws, and regulations [8]. Islamic banks are operating facing immense national and global challenges, when it is making financial transactions, trading or as a working partner. However, when appropriate laws and regulations are persists in a society or at the global level, Islamic banks can manifest its performance well. Two prolific scholars of Islamic finance, Ahmad and Hassan remarks that Islamic banks in Bangladesh came into existence with certain objectives, in line with the philosophy of Islamic banking, that imply a direct and specific responsibility on their part to play an effective role in the socioeconomic development of the country [9]. Islamic banking in Bangladesh effectively following the Islamic philosophy of banking, performing better than the conventional banks in many cases, gained widespread support from the customers and contributing significantly in the socioeconomic development of Bangladesh.
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Defining Economic Development, Pokrant refers to the raising of the productive capacity of a country through the introduction of policies designed to enhance the productivity of land, labour and capital, raise standards of living and reduce or alleviate the poverty of the inhabitants of the country [10]. Though there are a number of definitions of economic development exist, it is generally understood that the standard of living of the citizens can be improved by alleviating poverty through increased productivity. Also Kifle, Olukoshi, Wohlgemuth support this idea that there is a strong relationship between poverty elevation and economic development [11]. A contemporary scholar on Islamic banking Hassan views that the successful launching and operation of Islamic banks in Bangladesh has established that banking with out interest is feasible. He also observes that Islamic banks have brought together many depositors and entrepreneurs under the banking system [12]. It has been found that these depositors and entrepreneurs have got the opportunity to practice Shariah based banking and fulfill their religious obligation. Another scholar on Islamic Banking in Bangladesh, Alam describes the reasons behind the success of IBBL and narrated that in addition of Shariah compliance, senior officials of the Bank also keep a regular contact with customers and bank managers frequently visit them in their places of business. Referring the chief of the Investment Department of the IBBL, Alam also commented that though IBBL initially faced some challenges, but the situation is getting better than before [13]. 3.0 Contextualizing the Proposed Research:

Bangladesh is a country, the research context, where IBBL operates, suffers from immense economic, social and environmental challenges, has been described below. Economic situation of Bangladesh: Bangladesh has been facing severe economic problems. This country has a per capita income of only US$781 [14]. Feeding 160 million people with a piece of land measuring 0.15 million square kilometers is really challenging. Having an annual budget of USD $ 23.37 billion the country is struggling to meet the basic needs for its citizens. However, over the past years, the economic situation of Bangladesh seems to be improving. For example, various steps by the private sector supported by the government has generated USD $36.44 million Foreign Direct Investment in CY 2010 and generated $ 22.93 billion export earning in [15]. Social condition of Bangladesh: This country also suffers from severe social problems. Over two million female workers are employed in Bangladesh is its export oriented garments sector, which is low paid and
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barely their salary meet the day to day expenditure. In Bangladesh, women workers in this garments sector have to survive particularly harsh working condition. Child labour is another major problem in Bangladesh. Among factors contributing to child labour are rapid population growth, adult unemployment, bad working conditions, lack of minimum wages, exploitation of workers, low standard of living, low quality of education, lack of legal provisions and enforcement, low capacity of institutions, gender discrimination, conceptual thinking about childhood, etc. One or more of the above contribute to the large numbers of children working under exploitative or hazardous conditions [16]. Another major social problem is acid attacks on women, mainly due to refusal of marriage proposal and failure to give dowry to the husband. These attacks are increasing at alarming rates as government has failed to prosecute the attackers. Easily available sulphuric acid, which can deeply injure a human face in seconds, has emerged as a weapon nowadays used to disfigure a womans body. Gradual increase of acid attacks suggests that legal provisions and their enforcement are not adequate, nor effective. Social awareness, economic and psychological support, rehabilitation, and strict enforcement of laws are key to combat acid violence in Bangladesh [17]. Drug addiction is increasing in Bangladesh as well. It has been recognized as a social, health and also a political problem, and it needs to be addressed urgently. Bangladesh is a country where 40 percent of the people go to bed hungry every night, where 40 percent of the people are chronically malnourished and stunted. It is a country where too many mothers die in childbirth, where too many infants die before they reach their first birthday [18]. Environmental challenges in Bangladesh: Bangladesh has a number of environmental concerns as well. Bangladesh is the most vulnerable country to climate change impact. Being the largest delta in the world located at the downstream of the second largest river system, the country is subject to a series of climatic events. The probable impacts of global climate change (GCC), particularly sea-level rise and the associated impact on ecosystems and economic loss, adds to the already daunting array of environmental issues. Climate change will change the physiography and demography of Bangladesh. By 2050, 70 million people could be affected annually by floods; 8 million by drought; up to 8% of the low-lying lands may become permanently inundated [19]. Bangladesh has been high risk prone area for last couple of years, for arsenic polluted water due to arsenic release in groundwater from the sediments deposited during the Holocene period. So, supply of safe drinking water remains the most crucial issue in a large area in Bangladesh [20]. In addition to its human caused environmental problems, Bangladesh has been severely affected by natural disasters in last few years. For example, in 1991, nearly 150,000 lives were taken by a cyclone. Hundreds of natural disasters, both large and small, occur each year in Bangladesh [21].
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However, banking sector plays a vital role in Bangladesh economy. Islamic banking system is becoming popular since 1983 over the conventional banks in this country. In addition to the six Islamic banks (shariah based banks) in Bangladesh, almost all the banks (except Janata Bank) are having Islamic banking windows as well as a few foreign banks. Most of the Islamic banks are performing well. Islami Bank Bangladesh Limited is playing leading role in the banking sector for last one decade due to its excellent performance. Due to its outstanding acceptance among the banking consumers (both borrowers and depositors), it is contributing significantly in Bangladesh Economy. The Islamic banking system, specifically the IBBLs contribution to the economy may help improve current situation of the country. 4.0 Origin and development of Islamic Banking System and the commencement of IBBLs journey: Islamic banking refers to a banking activity that is consistent with the principles of the Shari'ah (Islamic jurisprudence) and its practical application through the development of Islamic economics [22]. Islamic banks have the following specialized characteristics: a) to achieve certain philosophical missions of Islamic banking (conforming with Islamic laws, practices and principles; b) to provide credit to those who have the talent and the expertise but unable to provide collateral to the conventional banks; and c) to create harmony in society based on the Islamic concept to achieve economic, financial, and political stability. Dubai Islamic Bank, worlds first fully-fledged Islamic bank, was established in 1975 [23]. In the same year, Islamic Development Bank was established as a follow-up of decision of Conference of Finance Ministers of Muslim Countries [24]. Today, there are 280 Islamic banks in 48 countries, whose total deposits have reached US$400 billion, in addition to 300 conventional banks, which opened branches, windows or provide Islamic financial products. Many conventional banks around the world opened Islamic banking windows. In Australia, both Westpac and National Australia Bank have taken steps to enter into Islamic banking parallel to their conventional system. Islamic banks are based on Profit and Loss Sharing (PLS) system, rather than interest. These banks are socially responsible while giving loans and monitored by expert bankers side by side guided by the Shariah (Islamic law) Board. Islamic banks do not lend money to the tobacco industry, gambling industry, production of goods that damage physical or mental health or harmful to the environment or any product or service industry involve in unethical practices, which has a very close proximity to the SRI (Socially Responsible Investment) of the western world. The first Islamic Bank in Bangladesh, Islamic Bank Bangladesh Limited (IBBL) was established in 1983 and later five more banks have joined in the same journey with the growing demand of shariah based banking system in this country.
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5.0 Overview of Islami Bank Bangladesh Limited (IBBL): Islami Bank Bangladesh Limited, a bank based on Islamic principles and shariah (Islamic law) started its journey with an authorized capital of TK. 500 million (12.5 million US dollars) in 1983. This is one of the first interest free banks in South Asia. The opening of an Islamic bank brought a new era in the history of the countrys financial market. The long cherished desire of many Muslims in the country was realized. Currently this bank has over 10,068 employees, 256 branches with a deposit of taka 32,193 crore (US $4.4 billion) [25]. With the implementation of the expansion program in the year 1997, almost all-important commercial places of the country came under the operational activities of the bank. IBBL is a joint venture multinational bank with equity contributed by the Islamic Development Bank and financial institutions like Al-Raji Company, Kuwait Finance House, Jordan Islamic Bank, Islamic Investment and Exchange Corporation of Qatar, Bahrain Islamic Bank, Islamic Banking System International Holding, S.A, Dubai Islamic Bank and Kuwait Ministry of Awqaf and Islamic Affairs. Two eminent personalities of Saudi Arabia namely Fuad Abdul Hameed Al-Khateeb and Ahmed Salah Jamjoom, were also the sponsors of the Islami Bank Bangladesh Limited. The responsibility for management and formulating policy of the IBBL is vested in the board of directors. As a rule in the Article of Association, a Bangladeshi director is to be elected as the chairman of the company. There is a Management Committee consisting of the most senior executives of the bank. In addition to these committees, a Shariah Council comprising famous Islamic scholars, economists and bankers, supervise the day to day affairs of IBBL from the viewpoint of the Islamic Shariah [26]. 6.0 Theoretical frameworks:

The principle philosophy of Islamic Banking is based on Islamic Shariah, which prohibits interest. The role of Islamic banking is to establish the relationship with client is partnership and the operation followed ProfitLoss System (PLS). Under this principle, no payment is allowed to labor, unless it is applied to work, no reward for capital should be allowed, unless it is exposed to business risk. Considering the above matters, IBBL uses the funds in the following manners: 6.1 Mudaraba (Capital Financing): Capital Trust financing is a contract between at least two parties in which the bank as the investor supplies the entire capital of the business. These two parties work together and share profits and losses. Under
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Murabaha financing the investor is known as Rab-Al-Mal which means the owner of the property and the entrepreneur is called Mudarab, meaning the manager of capital. When the venture ends, the manager of capital i.e. the entrepreneur returns the entire capital to the bank, along with an agreed proportion of profit. If there is any loss, it is born by the bank. 6.2 Musharaka (Partnership): The word Musharaka means a profit sharing joint venture, designed to limited production or commercial activities of long duration. In this case the bank and the customer contribute capital jointly. They also contribute managerial expertise and other essential services at agreed proportions. Profit or losses are shared according to the contract agreed upon. An individual partner does not become liable for the losses caused by others. 6.3 Murabaha (Cost plus profit): The word Murabaha means a cost-plus Profit contract. In this system of financing the bank agrees to purchase for a client who will then reimburse the bank in a stated time period at an agreed upon profit margin. The mark-up price that the bank and the buyer agree to is mainly based on the market price of the commodity. Thus the bank earns a profit without bearing any risk. 6.4 Ijara (Leasing): The word Ijara indicates leasing. In this case, the bank is called lessor and the customer is called lessee who wants to use the assets and pays rent. According to the Western leasing system the lessee pays specific rentals and a fixed rate of interest over a given period for the use of specific assets. But in the Islamic banking system of leasing the risk related to leasing has to be shared between the bank and the lessee, in case of any damage to the leased assets.

6.5 Quard E Hasan (Interest free loan): Quard E Hasan means an interest-free loan given by the Islamic bank to the needy people in a society. The practice of dealing with this sort of investment differs from bank to bank. Quard E Hasan is normally given to the needy people like needy students, small producers, farmers, entrepreneurs and economically weaker sections of the society, who are not in a position to obtain loan or any financial assistance from any other institutional sources.
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Methodological framework - Content Analysis:

For the purpose of this study, Content Analysis has been considered as the most appropriate research method. Content analysis as a method used to record the extent and issues in different contents like relevant materials and documents. To understand the role and contribution of Bangladesh economy effectiveness of the principles, we explored the contents of the annual report - 2010 of IBBL including relevant articles, books, periodicals and websites. Content analysis engages the identification of particular issue within the texts, which can be classified under headings, and then analysed. Conducting a content analysis in the current study involves at least four important steps: choose the documents to analyse, select the categories/ sections within the annual report/policy Manual and relevant documents measuring the reliability of data/information. 8.0 Finding and Analysis: The authors, through a detailed content analysis, found the pieces of information that have been placed below which answers the research question, What role IBBL has been playing towards the economic development in Bangladesh? 8.1 Role Towards Employment Creation: IBBL has significantly contributed it the employment generation in Bangladesh. This bank has employed over 10,000 people directly and a few million indirectly through financing in business including importexport, industrialization, SME financing and Rural development projects. So, it can be apprehended that a few million families are directly and indirectly benefited from IBBL and they are also contributing in the economy as a part of the whole economic system of Bangladesh. According to Rashid, Hasan and Ahmad, Islami Banks along with IBBL is providing satisfactory community service through job creation and ensuring consistency in service provisions [27]. 8.2 Role in Earning Foreign Remittance: Remittances by migrant workers earning sent back from the country of employment to the country of origin, play a vital role in the economies of many labour sending countries [28]. Also remittance help in macroeconomic development process in the home country as the remittance provide significant sources of foreign currency, increase national income, finance imports and contribute to improve the balance of payment situation. Demand for migrant workers remittances to Bangladesh has now increased tremendously. FY 2010-11, remittance inflow to Bangladesh was 82,992 crore taka (US $11.53 billion).
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Because of clients confidents on the performance, remittance of the IBBLs grew at 10% to 21,463 crore (US $2.98 billion) with 28% market share and helping Bangladesh economy to become healthier. 8.3 Role in Strengthening Rural Economy: To make the rural poor people self-reliant, IBBL has initiated Rural Development Scheme. During FY 2010 RDS performance got better than ever, which is operating in around 12,000 villages among more than 5 Lac members of around 21,000 centers of the country and will expand this business to all over the Bangladesh in the coming years [29]. The amount of cumulative disbursement through this Scheme stood at Tk. 3,184 Crore up to December, 2010. Through RDS IBBL operates Humanitarian Assistance Program, Education Program, Capacity Building Program and Health & Medicare Program. A study conducted by Rahman, Jafrullah and Islam analyzed many facets of the RDS and they concludes that IBBLs RDS is a successful project. They also indentified that household income and expenditure of the RDS participants had increased significantly and clients had a positive opinion towards the micro investment program as it improved their overall standards of living [30]. 8.4 Role in Promoting Ecology and Green Banking: Green Bank is simply with social awareness. IBBL insists on going green to help the environment that promote its online banking, Mobile Banking or the idea of socially responsible investment funds for sustainable project finance activities. An important and easy aspect of green banking is online and investment in eco-friendly business projects. A truly green bank will reduce its carbon footprint by building more efficient premises, branches, implementing more efficient operational procedures promoting sustainable banking and increasing their investments in environment-sensitive industries. IBBL Green Banking practices are connected with both internal operation and product ecology. Product ecology is concerned with the impacts of the bank on the environment used by the clients. Green banking engaged in creating socially responsible investment funds and sustainable project finance activities. IBBLs green banking initiative is supported by Hassan and Latif who express that scope for Islamic banks can develop Islamic financial products (such as green product), which contributes to the environment, such as energy efficiency loans or leasing of environmental technology [31].

8.5 Role in the Countrys Industrialization:

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As per Investment Policy of IBBL, top priority has been given towards the Industrial development of the country. The Banks Investment portfolio is gradually being increased towards industrial finance along with commercial investment. IBBL's investment in industrial sector is substantially higher compared with those of other commercial Banks. Total Investment for projects finance together with Working Capital stood at Tk.14,911 crore as on 31st December 2010 as against Tk.11,488 crore as on 31st December 2009 resulting in 29.80% growth. IBBL has invested at a wide range of businesses including in textile & garments, Steel & Engineering, agro based industries, food & beverage, Poultry & hatchery, chemical & petroleum, printing & packaging, plastics & ceramics, hotel & restaurants. A study conducted by Alam observes that the growth rate of investment in the industrial sector is very much significant than many other sectors [32]. 8.6 Role in the Development of SMEs: The role of Small and Medium Enterprises (SMEs) is indispensable for overall economic development of a country particularly for developing countries like Bangladesh. Since this sector is labour intensive with short gestation period, it is capable of increasing national income as well as rapid employment generation; achieving Millennium Development Goals (MDGs) especially eradication of extreme poverty and hunger, gender equality and women empowerment. SME sector has played a vital role in economic development of some prosperous countries of Asia. Our neighboring countries have also given due importance on SME. Terming SME as employment generating machine they stressed on SME development for higher economic growth, narrowing the gap of income inequality and poverty alleviation. Besides the above, SMEs are considered as the driving force for industrialization. Total SME Investment of IBBL reached to Tk. 78,456 crore (US $11 billion) during 2010 which was 37.26% higher compared to Tk. 57,159 crore (US $8 billion) during 2009. Institutional Category-wise SME Investment increased at the end of September, 2010 in state owned banks (+75.66%), Foreign Banks (+53.49%), Private Banks (+31.56%), non-bank FIs (+24.43%) and specialized Banks (+20.06%) as compared to September, 2009. A study by Hamid reveals that IBBL provides an idea about how small entrepreneurs can be developed through an Islamic way [31]. 8.7 Role in International Trade (Import/Export): IBBL plays significant role in the Bangladeshs international trading business. IBBL is helping the economy by providing assistance in importing raw materials on one hand. On the other hand helping the export business and earning foreign currency for Bangladesh.

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Import: During the year 2010 bank opened 46,736 import Letters of Credit for Tk.24,628 crore against 38,717 Letters of Credit for Tk. 16,123 crore in 2009 showing 53% growth in amount. Major items of import consist of raw cotton, yarn, fabrics, capital machinery, fertilizer, metal, motor vehicle, chemicals, edible oil, rice, scrap ship etc. EXPORT: During the year 2010 bank handled 46,699 Export Bills for Tk.14,842 crore as against 44,291 Export Bills for Tk. 10,642 crore in 2009 showing 39.46% growth in amount. Major export financed items are readymade garments, frozen foods & vegetables, jute & jute goods etc. 8.8 Role in Housing Investment scheme: IBBL has taken massive initiative to invest under the Housing Investment Scheme for the eligible citizens major metropolitan cities. With limited income, upper middle class and middle class can take the advantage of this program. This program is popularly known as Hire Purchase under Shirkatul Melk. Investment through this mode is solving accommodation problems in the major cities at the same time contributing to the economy through a wide range of backyard linkage industries including rod, cement, wood, tiles & fittings, equipment (like lifts and generators) as well as employs a large number of construction related staff. 8.9 Contribution to the National Exchequer: IBBL has been able to contribute huge amount to the Government Exchequer as Income Tax out of its profit. IBBL paid the highest tax to the Govt. in the Banking Sector by paying corporate tax Taka 411 crore (US $57 million) in the year 2010 and Taka 325.32 crore (US $45 million) in the year 2009. This revenue income is significant for Bangladesh government compared to its total review income, which is an indicator for the economic development of the country. 8.10 Role in Perfoming Responsibility to the Society (CSR): A study by Rahman, Jahan and McDonald observe that it is a general belief in Bangladesh community that the contribution of Islami Bank Bangladeshi Limited in CSR is very significant among the financial institutions [32]. Islami Bank Bangladesh Ltd. (IBBL) being one of the best corporate citizen of the country, has been discharging its responsibilities to the society in general directly through its banking activities and through its fully owned subsidiary, Islami Bank Foundation, since its inception. The theme of such responsibility has been envisaged in the mission of the Bank since the day of establishment. IBBL renders responsibility towards Shareholders, Employees, Customers, Suppliers, Community and the environment. IBBLs CSR towards the society briefed below:

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Healthcare Program: IBBL provides health care through six fully owned hospitals, 7 community hospitals consisting of 1,021 beds, 561 doctors and 411 staffs. In addition to these hospitals, it has been organizing mobile eye camps and charitable dispensaries. Thousands of patients, especially middle class and lower middle class families take benefits of these hospitals every year. Education Program: IBBL established 01 (one) Medical College, 01 (one) Health Technology Institute and 01 (one) Nursing Training Institute in Rajshahi. IBBL has been operating 06 (six) Technical Institutes- two in Dhaka, one each in Bogra, Sylhet, Khulna and Chittagong. This bank has been operating 01 (one) English medium school, 01 (one) Bangla medium school and 01 (one) girls madrasha in Dhaka with a total number of 2,521 students employing 106 teachers and 49 staffs. Scholarship Program: IBBL provides Scholarship and lump-sum financial assistance for education purpose to the meritorious but poor students under its Scholarship Program. Since inception of the Program 6,459 students received Scholarship/grant for Tk. 60.14 million till 2010. The bank has been providing Scholarship to the very poor students secured GPA 5 in SSC & HSC examinations from the year 2010 under its direct Scholarship program. Sports, Art, Literature & Cultural Program: IBBL sponsors various sports & cultural events every year. During the year 2010, Tk. 10.00 million was donated to Bangladesh Olympic Association for organizing South Asian Olympiad in Dhaka. The Bank contributed Tk. 2.00 million to Bangladesh Association of Banks (BAB) for taking initiatives to encourage the members of Bangladesh National Cricket Team for winning against New Zealand Humanitarian Assistance Program: IBBL always comes forward to assist the victims of natural or social disasters. During the year 2010, the Bank contributed an amount of Tk. 25.00 lac to the Prime Ministers Relief Fund for the victims of Nimtoly Fire Tragedy. Apart from it, consequence upon the tornado, tidal surge and river erosion during the period between September-October 2010 in the coastal areas, the Bank extended relief work directly in the effected areas under the districts Noakhali and Coxs Bazar for an amount of Tk. 3.00 million. 9.0 Limitations:

Though IBBL is playing significant role in developing Bangladesh economy, but all relevant data could not be identified from the relevant industries, who generated businesses from the investment made by IBBL. Authors could do more in-depth study, if they had more time to work on this project.
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10. Summary and conclusion: IBBL is one of the fastest growing and best performing banks in Bangladesh. Because of its excellent teamwork among the top management, staff and clients as well as outstanding banking performance, this bank achieved a secured position in Bangladesh banking sector. IBBL has invested in a wide range of areas that not only reduced the risk of investment, but also providing services to a large number of citizens in the country as well as Bangladeshis working abroad. The above study has portrayed a picture of IBBLs role in the socio-economic development of Bangladesh. If this trend remains continued, IBBLs contribution will impact upon the social and environmental sectors, in addition to the economic well being of the country. This can be inferred from this study that this development of Bangladesh will benefit Bangladesh citizens and their future generations to live a better lifestyle.

References:
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1. AUF Ahmad and Kabir Hasan, Regulation and Performance of Islamic Banking in Bangladesh, Thunderbird International Business Review, Vol. 49, no. 2, pp. 251- 277, 2001 2. C Woelfel, Encyclopedia of Banking and Finance, Columbus, OH: McGraw-Hill Publishing, 1993 3. Matt Kane and Peggy Sand, Economic Development: What Works at the Local Level, Washington DC: National League of Cities, 1988 4. Rondo Cameron, Banking and Economic Development: some lesson of history, Oxford: Oxford University Press, 1972 5. Woelfel, above n 2 6. R.I. Molla et al, Frontiers and Mechanics of Islamic Economics, Sokoto: University of Sokoto Press, 1985 7. K Ahmad, Elemination of Riba: Concepts and Problems, Paper presented at the Elimination of Riba from Economy Conference, Lahor, Pakistan, 1994 8. A.A. Sarkar, Islamic Banking in Bangladesh: Performance, Problems & Prospects, International Journal of Islamic Financial Services, vol. 1, no. 3, 1999 9. AUF Ahmad and Kabir Hasan, Regulation and Performance of Islamic Banking in Bangladesh, Thunderbird International Business Review, Vol. 49, no. 2, pp. 251- 277, 2001 10. Bob Pokrant, Economic Development in Bangladesh: Recent Trends, viewed on 10 August 2011. 11. Henkock Kifle, Adebayo Olukoshi, Lennart Wohlgemuth, A New Partnership for African Development: Issues and Parameters, Stockholm: Gotab, 1997 12. K. Hasan, Islamic Banking in Theory and Practice: The Experience of Bangladesh, Managerial Finance, vol. 25, no. 5, pp. 60-113, 1999 13. M.N. Alam, Islamic Banking in Bangladesh: A case study of IBBL, International Journal of Islamic Financial Services, vol. 1, no.
4, 2000 14. Bangladesh Ministry of Finance 2011, Bangladesh Budget 2010-2011, Bangladesh Government, Dhaka,

viewed 10 August 2011 from http://www.mof.gov.bd/en/index.php?option=com_content&view=article&id=52&Itemid=1 15. Board of Investment, Dhaka, Bangladesh, viewed on 5 August 2011 from http://www.boi.gov.bd/ and Export Promotion Bureau, EPB, Dhaka, Bangladesh, viewed on 6 August 2011from http://www.epb.gov.bd/ 16. ILO, Geneva, viewed on 1 August 2011 from www.ilo.org/public/english/region/asro/newdelhi/ipec/responses/bangladesh/index.htm 17. A.A. Begum, Acid Violence: A Burning Issue of BangladeshIts Medicolegal Aspects, T he American Journal of Forensic Medicine and Pathology, vol. 25, no. 4, pp 321-323, 2004 18. U.S. Department of State, Washington D.C., viewed on 5 August 2011 from http://dhaka.usembassy.gov 19. Ibid, 20. M. Jakariya, M. Rahman, A.M.R. Chowdhury, M. Yunus, A. Bhuiya, M.A. Wahed, P. Bhattacharya, G. Jacks, M. Vahter and L. Person, Corporate Social Responsibility Initiatives Addressing Social Exclusion in Bangladesh, Journal of Health Population and Nutrition, Vol., No. 4, pp. 545-562, 2009 21. M. Dilley, R.C. Chen, U. Deichmann, A.L. Lerner-Lam and M. Arnold M, Natural Disaster Hotspots: A Global Risk Analysis, Washington D.C.: World Bank, 2005 22. Institute of Banking and Insurance, viewed on 6 August 2011, from http://www.islamic-banking.com/ 23. AUF Ahmad and Kabir Hasan, above n 1

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24. Dubai Islamic Bank, viewed on 4 August 2011, from www.dib.ae/en/index.htm 25. Islami Bank Bangladesh Limited, Annual Report 2010, Dhaka 2011 26. Islami Bank Bangladesh Limited, viewed on 10 August 2011, from www.islamibankbd.com 27. Mamun Rashid, Kabir Hassan and AUF Ahmad, Quality Perception of the Customers Towards Domestic Islamic Banks in Bangladesh, Journal of Islamic Economics, Banking and Finance, vol. 5, no. 1, 2009 28. Shivani Puri and Tineke Ritzema, Migrant Worker Remittances, Micro-Finance and the Informal Economy: Prospects and Issues, Working Paper 21, Geneva: ILO, 1999 29. Islami Bank Bangladesh Limited, Annual Report 2010, Dhaka 2011 30. Mizanur Rahman, M. Jafrullah, and ANM Islam, Rural Development Scheme of Islami Bank Bangladesh Limited (IBBL): Assessment and Challenges, IIUM Journal of Economics and Management, vol. 16, no. 2, pp. 139-163, 2008) 31. Abul Hassan and Salma Latif, Corporate Social Responsibility of Islamic Financial Institutions and Businesses: Optimizing Charity Value, Humanomics, vol. 25, no. 3, pp. 177-188, 2009 32. M.N. Alam, Islamic Banking in Bangladesh: A case study of IBBL, International Journal of Islamic Financial Services, vol. 1, no.
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33. MA Hamid, The Role of Islamic Bank in the Development of Small Entrepreneurs, Journal of Islamic Economics and Finance, vol. 1, no. 1, 2005 34. Shafiqur Rahman, Sadia Jahan and Nicholas McDonald, CSR by Islami Bank in healthcare stakeholders perception Bangladesh Journal of Medical Science, vol. 9, no. 4, pp.208-215

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