Chapter-1

INTRODUCTION PART

1.1 Introduction:
As a prerequisite for the completion of the Bachelors of Business Administration
programs from International University of Business Agriculture and Technology. I
started to work as an internee in First Security Islami Bank Ltd. Savar Branch, Savar,
for a period of 3 months from September 28 to December 28, 2014. Basically this
report is based on Practical working experience with the performance appraisal
system of FSIBL (First Security Islami Bank Ltd). After discussion and getting
consent I worked on the report titled Analysis of investment modes of First Security
Islami Bank.
In the internship report I tried my best to focus on the modes of investment of FSIBL.
This report has been generated under the supervision of Anika Khursid. Faculty,
College of Business Administration, International University of Business Agriculture
and Technology.

1.2 Background:
Any kind of business requires loan and bank is the major media of investment. Bank
accumulates the money from people and invests that money to the deficit unit who
need money. In the digital era the role of banks are very wide as well as
comprehensive.
Now a day First Security Islami Bank Ltd is one of the reputed third generation bank
in the growing banking sectors. It plays comprehensive role to develop business
activities as well as economic development of the country through its various
investment activities.
Safety First Security Islami Bank Ltd was incorporated as a company on 29 August
1999 and received approval from Bangladesh Bank (central bank) on September 22,
1999. The bank began as a commercial bank in its first branch on October 25, 1999.
First Security Islami Bank Limited Loan Information, First Security Islami Bank
Limited DPS Information, First Security Islami Bank Limited ATM Card Master Cards
Information, First Security Islami Bank Limited Accounts Information, Internet
Banking.
First Security Islami Bank Ltd began its journey with a vision to develop as a modern
Islami bank and make an effective contribution in the national economy. At the
same time working for a sustainable growth to the confidence of stakeholders
for their money and share away.

1.3 Objective of the Report:

Broad objectives:
The prime objective of this study is to analyze the Investment management of First
Security Islami Bank Limited (FSIBL).

Specific objectives:
With the Broad objectives objective, it helped to fulfil the following specific objectives:

To gain a relationship between theoretical and practical learning situation of

FSIBL

To get an idea about the activities of FSIBL

To focus on First Security Islami Bank Limited analysis investment modes

activities

To know the employee productivity of FSIBL

To understand the need and the objectives of the modes of investment

activities

To identify the formalities maintained for modes of investment by the bank.

To have an idea of transaction processing system

To describe various investment schemes

1.4 Methodology:
Research methodology is a way to systematically solve the research problem. The
research methodology using for find out the solution of research problem. This
research is an analytical research methodology and some extend descriptive
research methodology. In order to make the report more meaningful and presentable
two sources of data and information have been used widely.
Sources of data: There are Two kinds of data:A) Primary Data:

Survey

Conversation with my supervisor and regular employees of the bank.

Face to face conversation with customers.

Take information over telephone from customer.

B) Secondary Data:

Different Location of FSIBL.

Web site of FSIBL.

Annual reports of FSIBL.

1.5 Collection of Data:

Conducting a survey of twenty five customers helped me to collect primary data. The
questionnaire is attached in the report in the Appendix. The survey helped me in
both deriving the information and also explaining the condition of satisfaction of the
customer of the deposit system of FSIBL. Secondary data was collected from
Pervious Internship Report and web site of the FSIBL

1.5.1 Data analysis & Reporting

For data analyses and reporting, Software like Ms Word, Ms Excel, and Ms
PowerPoint has been used.

1.6 Scope of the report:

The main intention of the study is the standard the present investment modes of First
Security Islami Bank Ltd. This important topic FSIBLs organizational overview,
different accounting system and their function. There is scope for further study also. I
got the idea about the banking environment and dealing with customers. It gave me
chance to acquire knowledge from their experience. This report was covering the
details of FSIBL practices about various activities of investment modes. This report
must carry out a specific project, which is assigned by the supervisor. First Security
Islami Bank Ltd is the most popular Islamic bank as based on Islamic shariah.

1.7 Limitations of the Study:

The present study I has some limitations. Because I just learn from book but
practically so it may different. But as an intern it was a great opportunity to me to
know the types of the details about the FSIBL deposit systems, customers concepts,
their opinion, collect some Banks document etc.
However, to complete all of these mentioned above, following limitations were
present:
There are some restrictions on accessing the information that deemed
confidential by concern authority
Sometimes the employees of the bank are busy, so we are to wait.
Lack of published financial data
Time limitation is one of the major limitations in the preparation of this report.
Naturally, a lot of time is required for these types of analysis.
Unavailability of recent data is a constraint.
Lack of Information
Difficulties in data collection
Limitation of experience

Chapter 2
Organizational Part

2.1 Organizational Profile:

The Prophet Muhammad (Sm) himself can trace the origins of Islamic Banking back
to the practice of mudaraba. The Prophet (Sm) was mudarib (agent) for his wife, who
entrusted her capital or merchandise to him for trading and got back the principal
plus an agreed share of the profit. As a reward for his labor (and entrepreneurship),
the Prophet (mudarib) received his share of the same. The mudarib, however, was
not liable for losses resulting from the exigencies of travel or from an unsuccessful
business venture. This form of partnership is called mudaraba. There is another form
of partnership called musharaka, in which the musharik (agent) has a contribution to
the capital and can therefore, claim a higher percentage of profit. As early as in the
seventh century, the tax revenue from Iraq was sent across the desert to Medina in
the form of a mudaraba. Caliph Umar is known to have invested orphans' money in
merchant trading between Medina and Iraq. Musharaka partnerships were practiced
in the north-south trade between Egypt and Jeddah during the eleventh century. As
many as 32 mudaraba contracts were practiced in the 17th century in the Turkish
city of Busra. Mudaraba was in practice in Tunisia, Indonesia, Arabian Peninsula and
India.

2.2 The concept of Modern Islamic Banking:

Modern Islamic banking concepts came from the historical practice of the concept of
a 'three-tier mudaraba.
The first tier, there is the individual, rab-al-mal, who wishes to invest capital.
The second tier, is the mudarib (agent), to whom the rab- al-mal entrusts his capital
by contract and finally.
The third tier, there is the entrepreneur, with whom the mudarib signs a contract,
and to whom the mudarib passes the capital originally entrusted to him by the rab-almal.

2.3 Historical Background of First Security Islami Bank Limited:

First Security Islami Bank Limited (FSIBL) was incorporated in Bangladesh on 29
August 1999 as a banking company under Companies Act 1994 to carry on banking
business. It obtained permission from Bangladesh Bank on 22 September 1999 to
commence its business as a name of First Security Bank Limited which conducted

their banking operation as conventional Banking. After Nine year conventional

banking operation 1st January, 2009 it converted into a full fledged Islamic Bank
rename as First Security Islami Bank Limited. The Bank carries banking activities
through its 117 branches in the country. The commercial banking activities of the
bank encompass a wide range of services including accepting deposits, making
investment, discounting bills, conducting money transfer and foreign exchange
transactions and performing other related services such as safe keeping, collections
and issuing guarantees, acceptances and letter of credit.

2.4 Vision:
To be the premier financial institution in the country providing high quality products
and services backed by latest technology and a team of highly motivated personal to
deliver excellence in Banking.

2.5 Mission:

To contribute the socio-economical development of the country

To attain highest level of satisfaction through extension of services by

dedicated and motivated professional

To maintain continuous growth of market share ensuring quality

To ensure ethics and transparency in all levels

Above all, to add effective contribution to the national economy

2.6 Objective of the Bank:

The objective of the FSIBL is given below:
1. To provide efficient computerized banking system
2. To enhance foreign exchange operation
3. To accept deposits on profit-loss sharing basis
4. To establish a welfare-oriented banking system
5. To play a vital role in human development and employment generation
6. To contribute towards balanced growth and development of the country through
investment operations particularly in the less developed areas.
7. To establish participatory banking instead of banking on debtor-creditor
relationship

2.7 Strategies of FSIBL

Goal of FSIBL is to establish and maintain the modern banking techniques to ensure
the soundness and development if the financial system based on Islamic principles &
to become the strong efficient. Their strategies are as follows:
To promote organizational efficiency by communicating company plans
policies 7 procedures openly to the employees in a timely fashion.
To strive our customers best satisfaction &win their confidence
To manage & operate the bank in the most effective manner
To ensure a congenial working environment
To delivery portfolio both in retail & wholesale market
To identify customers needs & monitor their perceptions towards meeting
those requirements
To train & develop all employees & provide them adequate resources so that
the customers needs reasonably addressed.

2.8 Corporate Social Responsibility (CSR)

First Security Islami Bank Ltd keeps on discharging its corporate social
responsibilitys per part of social entity for the greater interest of the entire society. It
has extended its support to the development of the community through promotions of
sports, culture, educational program, disaster and treatment aids of the distressed
people. First Security Islami Bank Ltd actively participates for promotion of the
sports, religious events etc. Besides the CSR activities that are carried out through
this foundation are:

Scholarship program for brilliant poor student

Helping promotion schemes (Interest free loan)

Helping people affected by natural climates

Beautifications of cities

2.9 Capital and Reserves

IFIC bank has been consistently maintaining the Capital Adequacy Ratio, as
prescribed by Bangladesh Bank. This has been made possible by a policy of building

up both capital and reserves. It started with an authorized and paid up capital of TK.
4600 million and TK. 2300 million respectively in 1983. Authorized and paid up
capital increased to TK. 500 million and TK. 406.39 million respectively in 2005. In
addition to paid up capital, the bank has built up a strong reserve base over the
years. As against TK. 21.20 million only in 1983, reserves and surplus increased to
TK. 809.10 million in 2004. Besides, the bank had 1% General reserve worth TK.
393.31 million as on 31 December, 2005. Now authorized and paid up capital of TK.
1,000 million and TK. 3,400.32 million respectively up to November 2013.

2.10 Branch Network of FSIBL:

Name of Branch

Number of Branch

Dhaka zone

41

Chittagong zone

36

Rajshahi zone

Rangpur zone

2
Khulna zone

21

Barishal zone

Sylhet zone

Total

117

2.11 FSIBL at a Glance:

Name of the Company

First Security Islami Bank Ltd.

Chairman

Alhaj Md. Saiful Alam

Vice Chairman

Alhaj Md. Abdul Maleque

Managing Director

A.A.M. Zakaria

Company Secretary

Abdul Hannan Khan

Legal Status

FSIBL Limited Company

Date of Incorporation

29 August1999

Date of Commencement of Business

29 August 1999

Date of Permission from Bangladesh 22 September 1999

Bank

10

Date of Opening of First Branch

25 October 1999

Registered Office

23,Dilkusha

Commercial

Area,

Dhaka-1000, Bangladesh
Line of Business

Banking

Authorized Capital

Tk.4,600 Million

Paid up Capital

Tk.2,300 Million

Date of consent of IPO

04 June 2008

Phone

9560229 (Hunting),9550334,717102930

Fax

880-02-9561637

E-mail

bcs@fsblbd.com

Webside

www.fsblbd.com

SWIFT

FSEBBDDH

Auditors

Legal Advisor

Tax Consultant

Syful Alam & Shamsul

The Law Counsel

K.M. Hasan& Co.

Co

Barrister & Advocates

Chartered Accountants

Chartered

City Heart (7th Floor)

Home Tower Apartment (8

Accountants

Suit No. 8/8, 67, Naya

th& 9 th )

15, Dilsusha C/A(6th

Paltan,Dhaka-1000

87, New Eskaton Road ,

Level)

Phone: 9349647-8

Dhaka

Dhaka-1000,

Phone: 9351457,9351564

Bangladesh
Phone: 7169487,
9569256

11

Shariah Council of FSIBL

SlNo.
1

Name
Sheikh

Position

Address

Chairman

Baitush Sharaf Complex

(Moulana)

Shah Abdul Jabbar (R) Road

Mohammad

Dhanialapara

Qutubuddin

Chittagong-4100

Mufti Sayeed

Vice

MarkazeEshaete Islam

Ahmed

Chairman

2/2 Darus Salam

Mirpur, Dhaka

Moulana

Member

491, Wireless Railgate

Md.Shamaun Ali

Secretary

Moulana Abdus

Member

Bara Moghbazar.
2/C Green Valley Apartment

Shaheed

493 Moghbazar Wireless Railgate.

Naseem
5

Mr. Mohammad

Member

Lecturer, Department of law,

Azharul Islam

University of Dhaka, Dhaka-1000

12

2.12 Board of Directors:

Chairman-

Mohammad Saiful Alam.

Vice Chairman-

Alhaj Mohammed Abdul Maleque.

Directors:

Ms. Farzana Parveen

Ms. Rahima Khatun
Ms. Shamsad Jahan
Ms. Atiqun Nesa.
Mr.Md. Sharif Hussain.
Mr. A. K. M. Ali Johar.
Mr.Md. Wahidul Alam Seth.
Mr Md. Abu Naim

Managing Director

Mr Md. Jakaria

Board & Company Secretary

Mr Abdul Hannan Khan

13

2.13 Organ gram of FSIBL

Chairman
Board of Directors

Chief Advisor
Managing Director (HRD)

Deputy Managing
Director

Deputy Managing
Director

GSD, CAD, A&I, GB, D&M

ID, IT, Credit, R&D

Executive Vice President/

Company Secretary

Senior Vice President

Senior Vice President

Vice President

Senior Assistant Vice

President
Assistant Vice President
Senior Principle Officer
Principle Officer
Senior Officer
Officer
Junior Officer
Assistant Officer

14

Senior Vice President

2.14 Senior Management:

FSIBL is functioning with professional management team headed by the Managing
Director Mr. A. A. M. Zakaria. Among other senior executives currently two DMD,
One Principle(Training Center), two SEVP, fourteen SVP, eight VP, five FVP, eleven
SAVP, five AVP and three FAVP are discharging their services in progression of the
banks business.
Top management of the bank is supported by human resource strength of 483
executives and officers. For smooth functioning of the Bank, following committees
have been formed: Management committee (MANCO) comprises of senior members
of the management headed by Managing Director of the bank. Asset Liability
Management Committee (ALCO) headed by the Managing Director, is responsible
for balance sheet risk management. The committee participate is the monthly ALCO
meeting and review the liquidity position, review rate of interest on deposit and
lending, and review the ALCO papers on presentation by treasury back office on the
position of profit, deposit, advance, cost analysis, maturity bucket of deposit &
advance, balance sheet, profit and loss account and many other issues relating to
banks business and assets-liability management.
2.15 Internal Control and Compliance:
Operational loss may arise from errors and fraud due to lack of internal Control and
Compliance. FSIBL has separate Internal Control and Compliance division (ICCD)
headed by a Vice President. This Division consists of 3 units, namely:
a)

Audit and Inspection Unit,

b)

Compliance Unit, and

c)

Monitoring Unit.

2.16 Corporate Governance:

Corporate governance is about how corporation is running its operations to achieve
its corporate objectives. Bangladesh Bank (BB) gives emphasis on implementing
corporate governance among the financial institutions and to do that, BB emphasizes
implementation of the guidelines issued by them for improving corporate governance
in banking. Good Corporate Governance practices enhance an entitys corporate
image and market credibility, which attract capital and increase its borrowing power.
These can be reflected in the quality of financial reporting and disclosures; strength

15

of internal control system and internal audit function induction of professionally

competent, independent non-executive Directors on corporate Board; formation of
Audit Committee; delegation of authority to executives and staff; protection of
corporate governance for strengthening organizational strength. With a view to
ensure effective participation and deep interest in the affairs of the company and as
per Articles of Association of the Company and as per Bangladesh Bank Circular No.
16 dated March 24, 2003 the bank has set up the following 2 committees:

2.17 Executive Committee:

FSIBL has constituted 09 members executive committee of the board as per
Bangladesh Bank guidelines to ensure corporate governance in the business of
which managing director of the Bank is Ex-officio Member. The executive committee
of the board is responsible for developing policy and strategy for smooth operations
of business and business development of the bank to ensure maximization of
shareholders wealths protecting other stakeholders interest in the company Mr.
Alhaj Md. Saiful Alam, Chairman of the board of Directors is the Chairman of the
present Executive Committee of the bank. He is very dynamic person and leading
the executive committee of the bank in a very manner.
2.18 Audit Committee:
FSIBL has formulated an audit committee can play an effective role in formulating an
efficient and secured banking system. The Audit Committee has been formed
comprising three members of the Board of Directors. As per corporate governance
guidelines the Chairman of the Audit Committee should have sound knowledge and
expertise in finance & accounting or auditing. Mr. Hamidul Haq, who is also a
Director of the Bank, is Convener of the committee. He is associated in banking field
over long years.
2.19 Human Resources:
Total number of employees stood at 483 as on 31st December 2008. The bank
continued to encourage its employees to receive training and participate in various
seminars and workshop to enrich their professional skills.
Year
No.

of

2004

2005

2006

2007

2008

467

423

318

412

483

Employees

16

2.20 Risk Management:

In view of the global recognition towards need of an effective risk management and
control systems in financial sector, First Security Islami Bank

Bank being

recognizant of the importance of the subject, has prepared and implemented the
following policy guidelines on Risk Management:

Credit Risk Management

Asset Liability Management

Foreign Exchange Risk Management

Internal Control & Compliance

Prevention of Money Laundering

Credit risk management: Credit risk is the risk that customers and other
counterparties will not meet their financial obligations, resulting in the loss of
amounts or gains. Credit risks are the current or prospective risk to earnings and
capital arising from the failure of an obligator to repay principal or interest at the
stipulated time or failure otherwise to perform as agreed. This risk is compounded if
the assigned collateral only partly covers the claims made to the borrower, or if its
value is variable or uncertain. Credit risk arises anytime the bank commits its funds
with the result.

Asset Liabilities management (ALM): Asset Liabilities management (ALM) is one

of the key areas of risk management, which mainly focuses on liquidity, market risk,
and capital management of the Bank. As per the requirement of the Bangladesh
Bank, a committee, assets liability committee (ALCO), comprises of the senior
management to make important decision related to the balance sheet of the Bank. At
FSIBL, ALCO is formed head by the managing director of the bank and meet once in
every month to analysis, review and formulate strategy to manage the balance
sheet.
The Bank managed its assets and liabilities most prudently ensuring optimum
liquidity with full compliances of regulatory requirements. Decisions taken in the
ALCO meetings were duly recorded and action plans were implemented by the
branches/departments to optimize banks financial performances. As a result, the
bank registered substantial growth in all the performance indicators including

17

operating profit in 2009 by minimizing the liquidity interest rate risk and capital
management.

Foreign exchange risk management: Foreign exchange risk represents exposures

we have to changes in the values of current holdings and future cash. Flows
denominated in other currencies. The types of instruments exposed to this risk
include investments in foreign subsidiaries / associates future cash flows in foreign
currencies arising from foreign exchange transactions and various foreign exchange
derivative instruments whose values fluctuate with changing currency exchange
rates or foreign interest rates. Uncertain Credit arises any time the bank commits its
funds with the result that capital or earnings are dependent on a counterpartys
issuers or borrowers performance. As per Bangladesh Bank guidelines has First
Security Islami Bank developed manual on foreign currency risk management. This
manual clearly describes and defined with proper structure of treasury international
division including various exposures on counter-part limit, dealing limit and
settlement limit. Instruments used to mitigate this risk are foreign exchange options
currencies swaps, forwards and deposits. This instruments help insulate us against
losses that may arise due to volatile movements in foreign exchanges rates or
interest rates.

Internal control and compliance

Operational loss may arise from errors and fraud due to lack of internal control and
compliance. Management through internal compliance and division (ICCD) controls
operational procedure of the bank. ICCD undertakes periodical and special audit of
the branches or departments at head office for review of the operation and
compliance of the statutory requirement and improvement of the performance of the
banks through enforcing efficient managerial guards. Such control is duly reflected in
the policy guidelines of the bank. First Security Islami Bank has established
sophisticated organizational structure to exercise strong control culture within the
organization by implementing policy guidelines of internal controls appropriately and
strengthening internal control systems.

Prevention of money laundering: Money laundering risk is defined as the loss of

reputation and expenses incurred as penalty for being negligent in prevention of

18

money laundering. First Security Islami Bank LTD has established Anti Money
Laundering Policy, which provided a guideline to comply with the laws and
regulations of Bangladesh Bank to safeguard the bank from potential compliance,
financial and reputation risk. For mitigating the risks, training is continuously given to
all the category go officers and executives for developing awareness and skill for
identifying suspicious transactions of the accounts to verify suspicious transactions.

Key Figures-November, 2012

Employees: 2504

Customer: 536538

Branches: 92

2.21 Technology:
Since the beginning of its journey as a commercial bank in 1999, First Security Islami
Bank has been giving great emphasis on the adoption of modern technology. It
became the pioneer in the field of automation by introducing computerized branch
banking right in the same year. Subsequently, all the branches were brought under
similar automated platforms with upgraded software applications to offer all the
critical banking features. At present all 93 domestic branches are fully computerized
under networked environment.
Besides, the Bank is also operating fully on-line Automated Teller Machine (ATM)
services under the banner Q-Cash at a number of locations in Dhaka and
Chittagong. The ATM facilities are available to the customers at Q-Cash booth.
Since the importance of Web presence in the Internet is absolutely critical, FSIBL
Web Site www.FSIBLbd.com has long been launched for the convenience of the
customers, where all the activities and information are constantly being posted and
updated. A Central Mailing System is operational at the Head Office to let the
customers have direct electronic access to the selected staff.

2.22 Human Resource Development (HRD):

Human Resources Development is focused on recruitment and in-house training for
both on the job and off the job Bank staff members through the Banks Academy.
First Security Islami Bank Academy the oldest institution in the private sector was

19

conceived of as an in-house training center to take care of the training needs of the
Bank internally.

Academy is fully equipped with a professional library, modern training aids and
professional faculty. Library has about 4941 books on banking, economics,
accounting, management, marketing and other related subjects.

Main training activities consist of in-depth foundation programs for entry level
Management Trainees. Specialized training programs in the areas like general
banking, advance, foreign exchange, marketing and accounts etc. are also
organized by the academy depending on need.
Frequently outreach programs are organized to meet demand for new and
specialized skills.
In addition to conducting courses internally, The Academy also selects candidates
for nomination to various courses conducted by distinguished training organizations
in the country including Bangladesh Bank Training Academy and Bangladesh
Institute

of

Bank

Management.

The Academy also re-designs its courses, programs etc, regularly to meet the
requirement of new skills arising out of various directives, guidelines of the Central
Bank and significant changes in the banking sector from time to time.

2.23 Deposition Section:

The function of the deposit section is very important. It is fully computerized. The
Officer of the deposit section maintains account number of all the customers of the
bank. They are used different code number for different account. By this section a
depositor can know what is the present position of his/her account. The officer
makes three types of transactions such as cash, clearing and transfer.
This section perform the following task

Post all kind of transaction.

Provide on demand report.

Cheque maintenance

20

Preparation of day transaction position

Preparation of closing monthly transaction

2.24 Accounts Section

Accounts department maintains the process of recording classifying, identifying and
Calculation of all transaction. It maintains clean cashbook, supplementary, voucher
register etc. Here also maintains Daily statement, weekly statement, monthly
statement etc. We can know about the total profit or loss from the statement of
affairs. In clean cash book there are records of three different areas namely cash,
clearing and transfer. And here both debit and credit side has to be equal. It is
maintained daily basis. After calculating all of these there will be opening balance
and closing balance. The closing balance of today will be the opening balance of
tomorrow. Finally there will be a great total. In clean cash book there is also the
number of total debit voucher and credit voucher.

2.25 A Brief Profile of Savar branch

I am doing my internship in savar branch of FSIBL. The branch is established in 18
May 2008 at 16/A/3, ring road, Block F Savar. The office floor is nicely inaccurate
that can accommodate good number of customer comfortably.
The branch has efficient human resources that can meet up customers needs.
Otherwise workload is distributed properly. Besides, interpersonal relationship is
remarkable. Most noted strength is customer service.
Everybody performing own works very well. Under all of their efficient handling, the
branch has already been able to introduce itself as one of the best performers
among all other branches of FSIBL.
FSIBL gives interns a good value. They assign some specific jobs that are to be
done which a fixed period of time. With the initiation of good job in FSIBL of savar
branch, they reposed confidence on me and therefore assigned various other jobs
such as accounts opening, clearing and cash department. In fact overall banking
practices were entrusted to me within this short period of three months from
September 28, 2014 to December 28, 2014.

21

2.26 Working Department of Bank:

1. General banking Department

a) Account Opening Department
b) Cash Department
c) Clearing Department
d) Accounts/Remittance Department
2. Investment Department

2.27 Products & Services of FSIBL:

The FSIBL offers different types of services to its customers and day by day they are
expending the area of services. From the very beginning they gave more emphasis
on satisfaction of customers. The Products& Services of the bank as following:
Mudaraba

Monthly

Deposit

Ghoroni

Scheme
Arba

Proyash

Triple Benefit

Prapti

Agrashar

Niramoy

Swadesh

Onkur

Somman

Projonmo

Morjada

Uddipon

Obosor

Alo

Provin

Bondhon

a. Deposit Products
Al-Wadiah Current Deposit
Mudarabah Savings Deposit
Mudarabah Short Term Deposit
Non-resident Foreign Currency Deposit

22

Resident Foreign Currency Deposit

b. Scheme
Mudarabah Monthly Savings Schemes
Mudarabah Monthly Benefit Deposit Schemes
Mudarabah Double Benefit Deposit Schemes

c. Investment / Deployment of Funds

a. Bai-Murabaha (Deferred Lump Sum/ Installment Sale)
b. Bai-Muajjal (Deferred Installment / Lump Sum Sale)
c. Ijara (Leasing)
d. Musharaka (Joint-Venture Profit-Sharing)
e. Mudaraba (Trustee Profit-Sharing)
f. Bai-Salam (Advance Sale and Purchase)
g. Hire-Purchase
h. Direct Investments
i. Post Import Investment
j. Purchase and Negotiation of Export Bills
k. Inland Bills Purchased
l. Murabaha Import Bills
m. Bai-Muajjal Import Bills
n. Pre Shipment Investment
o. Quard-ul-Hasan (Benevolent Investment)

d. Letter of Guarantee:

a. Tender Guarantee
b. Performance Guarantee
c. Guarantee for Sub-Contracts
d. Shipping guarantee
e. Advance Payment guarantee
f. Guarantee in lieu of Security Deposits

23

g. Guarantee for exemption of Customs Duties

e.

Specialized Schemes

f.

Consumer Investment Scheme,

SME Investment Scheme,

Lease Investment Scheme,

Hire Purchase,

Earnest Money Investment Scheme,

Mortgage Investment,

Employees House Building Scheme,

Services

Full Fledged Online Banking

ATM Services

SMS Banking

Lockers

Utility Bills

Ready Cash Card

Western Union Money Transfer

2.28 Operational Area of FSIBL in Savar Branch:

Bank is nothing but an intermediary between lender (surplus unit) and borrowers
(deficit unit). Savings and deposits are the main strength of the banks to provide
loan. And the interest earned from the difference borrowing and lending is the
major portion of banks income. Banks also earn from variety of operation. Branch
banking includes four operational divisions in First Security Islami Bank Limited.
They are:
1. General Banking
2. Loans and advance
2.28.1 General Banking:
General banking is the side where banks offer different alternatives to the clients
to deposit and remit their money. Accounts division is also included in general
banking. To encourage the clients, bank offers different options in front of their
clients. Most of these options are very much similar between the banks, but the

24

customer services and facilities may not be the same. First Security Bank Limited
has variety of services provided to the retail as well as for corporate clients.
General Banking department aids in taking deposits and simultaneously provides
some ancillaries services. 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 bank are doing its business frequently. It is the
department, which provides day-to-day services to the customers. Every day it
receives deposits from the customers and meets their demand for cash by
honouring cheques. It opens new accounts, demit funds, issue bank drafts and
pay orders etc. since bank in confined to provide the service everyday general
banking is also known as retail banking.
The services provided under general banking include the following:

Account opening

Account closing

Cheque book issue

Remittance

Clearing

Crossing

Endorsements

Dispatch

Account opening
Initially all the accounts are opened through deposit money by the customer and
these accounts are called deposit account. Normally a person needs to open an
account to take services from the bank. Without opening an account, one cannot
enjoy variety of services from the bank. Thus, the banking usually begins through
the opening of the account with the bank.
Bank accounts are mainly of three (3) types:
1. Current Deposit Account
2. Saving Bank Account
3. Fixed or Time Deposit

25

There are also some other types of account facilities provided by the bank. These
are:
1)

Short Term Deposit (STD)

2)

Mudarabah Monthly Profit Scheme (MMPS)

3)

Mudarabah Monthly Savings Scheme (MMSS)

4)

MudarabahDouble Deposit Scheme (MDDS)

2.28.1.1 Organ gram of Savar Branch:

Manager/ Branch
In-Charge
Branch In-Charge
Manager Operation/2nd
Man
nd
2 Man

Investment
officer (3)

Clearing
(2)

Remittance
(2)

General Banking

A/C. Opening/
Relationship
Officer (3)

Imam (1)

Accounts
Cash

Cash InCharge (1)

Peon (5)
Cleaner (3)

Trainee Assistant
Cash Officer (4)

Gun Man &Guard (5)

Cash Officer
(1)
Junior Cash
Officer (3)
Source: Banking Department of Savar Branch
Figure2:Organgram of Savar Branch

26

2.28.2 Loans & Advances:

Investment department is the crucial department in any bank. Bank has an obligation
to the client from whose it has collected money as a deposit. Banks are bound to
return that deposited money on the demand. Therefore, it is the prime responsibility
of bank to invest that money in secured way. When a bank provide loan to a
customer, it takes collateral to reduce the risk. Without collateral, a bank cannot feel
secured of that money.

Nature wise loan:

Loan

Funded

Non-funded

Fundamentals of Credit
The word is credit is derived from the Latin word credo meaning I believe. The
term credit may be defined broadly or narrowly. Speaking broadly, credit is finance
made available by on party (lender, seller, or shareholder/owner) to another
(borrower, buyer, corporate or non-corporate firm). More generally the term credit is
used narrowly for debt finance. Credit is simply opposite of debt. Debt is obligation to
make future payment. Credit is the claim to receive the payments. Both are created
in the same act of borrowing and lending.

Investment / Deployment of Funds facilities offered by FSIBL

gradually:

Bai-Murabaha (Deferred Lump Sum/ Installment Sale)

Bai-Muajjal (Deferred Installment / Lump Sum Sale)

27

are given here

Ijara (Leasing)

Musharaka (Joint-Venture Profit-Sharing)

Mudaraba (Trustee Profit-Sharing)

Bai-Salam (Advance Sale and Purchase)

Hire-Purchase

Direct Investments

Post Import Investment

Purchase and Negotiation of Export Bills

Inland Bills Purchased

Murabaha Import Bills

Bai-Muajjal Import Bills

Pre Shipment Investment

Quard-ul-Hasan (Benevolent Investment)

Some Loans Specification are given below:

Consumer Loan:Life is complex as it is. FSIB

makes it easy and comfortable

Getting the Loan:

If you are an adult and employed person and have an
account with FSIB, then you are eligible to apply for the
loan.

Loan Size: / how much Loan you can get?

Maximum Tk.1 Lac.

Loan Period:
12-36 months.

Easy Loan:
No limits for personal needs, needs are endless. Our EASY LOAN is to serve your
personal financial needs. Just walk-in to any of FSIB's branch and avail your EASY

28

LOAN.
Getting the Loan:
If you are an adult person and have an account with us then you can easily apply for
the EASY LOAN.

Loan Size:
Maximum 95% of the face value of FDR.
Maximum 100% of the MIS amount.
Maximum 100% of the principal amount of PSS.
Loan Period:
12-36 months.

Thikana Loan:
A man's home is just not his castle, it's more than an asset, and its an investment for
his future generation. FSIBL's Thikana Loan helping you fined your ADDRESS. Your
life's Satisfaction First.
Getting the Loan:
If you are an adult employed person and have an account with FSIBL, then you are
eligible to apply for the loan.
Loan Size: Maximum Tk. 75 Lac.
Loan Period: Maximum 15 years.

Possession Loan:
For those people running a successful business
from rented premises, FSIB is there to finance you for
POSSESSION LOAN. So your business can have its
own Permanent Address.
Getting the Loan:
If you are a Bangladeshi entrepreneur with only 2 years
of successful business record & having a valid trade
license and also have an account with FSIBL, then you are eligible to apply for this
loan.

29

Loan Size:
Maximum Tk. 5 Lac.

Loan Period:
Maximum 65 years on the date of maturity

2.29 Corporate Culture:

During the last two decades Corporate Culture has become an important theme in
business as an intangible concept which clearly plays a meaningful role in
corporations, affecting employees and organizational operations. This bank is one of
the most disciplined Banks with a distinctive corporate culture. Here they believe in
shared meaning, shared understanding and shared sense making. Their people can
see and understand events, activities, objects and situation in a distinctive way. They
mould their manners and etiquette, character individually to suit the purpose of the
Bank and the needs of the customers who are of paramount importance to them.
The people in the Bank see themselves as a tight knit team/family that believes in
working together for growth.

2.30 Graphical Analysis of Financial Position:

A. Total Capital:
10,400,000,000
10,200,000,000
10,000,000,000
9,800,000,000
9,600,000,000

2014

9,400,000,000

2012

9,200,000,000

2011

9,000,000,000
8,800,000,000
8,600,000,000
8,400,000,000

Figure 3: Total Capital

30

B. Total Asset:
140,000,000,000
120,000,000,000
100,000,000,000
2013

80,000,000,000

2012
60,000,000,000

2011

40,000,000,000
20,000,000,000
0

Figure 4: Total Assets

C. Total Deposit:
120,000,000,000

100,000,000,000

80,000,000,000
2013
60,000,000,000

2012
2011

40,000,000,000

20,000,000,000

Figure 5: Total Deposit

31

D. Total Loan and Advances:

70,000,000,000
60,000,000,000
50,000,000,000
2013

40,000,000,000

2012
30,000,000,000

2011

20,000,000,000
10,000,000,000
0

Figure 6: Total Loan and Advances

E. Profit after tax & provision:

32

1,800,000,000
1,600,000,000
1,400,000,000
1,200,000,000
2013

1,000,000,000

2012
800,000,000

2011

600,000,000
400,000,000
200,000,000
0

Figure 7: Profit after tax & provision

F. Return on Investment (ROI) (%):

9.8
9.6
9.4
2013

9.2

2012
9

2011

8.8
8.6
8.4

Figure 8: Return on Investment

F. Return on Assets(ROA):

33

1.8
1.6
1.4
1.2
2013

2012
0.8

2011

0.6
0.4
0.2
0

Figure 9: Return on Assets

G. Earnings per Share (EPS):

3.8

3.7

3.6
2013
3.5

2012
2011

3.4

3.3

3.2

Figure 10: Earning per Share

34

Chapter 3
Investment Modes Analysis

35

3.1 Investment:
Investment is a process of transformation of capital/money into goods and services
through Purchase and again transformation of goods and services into capital/money
through Sale.
Investment means to lie out of money or fund provided for a legal purpose for a
certain period with a risk of profit or loss. In Islamic banking investment means
utilization of fund or deployment of fund for a special legal purpose on profit/loss
sharing basis for a certain period. Islami bank as per shariah deals goods & services,
not money. Shariah low prohibits speculative trading that involves risk and
uncertainty. Shariah also has forbidden investing in haram business such as
gambling, alcohol etc.

3.2 Investment Divisions:

Investment operation is the vital operation which earn greater share of total revenue.
Well planned and appropriate investment policy frame work is a pre-requisite for
achieving the goal of the Bank i.e. implementation
The special feature of the investment policy of the Bank is to invest on the basis of
profit- loss sharing system in accordance with the tenets and principles of Islamic
Shariah
.
The Salient Features of the Investment Policy are outline below:

1. Observance of the legal investment limit of the bank.

2. Observance of the legal investment limit per client.
3. Optimum utilization of invest able fund.
4. Profitability of the investments.
5. Safety and security of the investments.
6. Investment at minimum possible risk e.g. default risk and liquidity risk etc.
7. Liquidity of investments.
8. Conform to central banks investment restrictions / priority.
9. Performance to short term investments.
10. Performance to the investment for small amount / size.
11. Satisfactory return on investments

36

3.3 Principles of Investment:

The basic principles of Investment are described in this section. The followings are
the general principle to be considered for Investment to customer on a basis
consistent with the global operational objectives and business strategies of the bank:

All Investment extension must comply with the requirements of Banks

Memorandum and Articles of Association, Banking Companies Act 1991 as
amended from time to time / Bangladesh Banks instructions and other
applicable rules and regulations.

Investment facility will be allowed in a manner, which will in no way

compromise with Banks standards of excellence.

The bank shall provide suitable Investment services and products for the
markets in which it operates.

Investments shall normally be Investment from customers deposit and not out
of temporary funds or borrowing from other Banks.

A banker should always adhere to the following principles of Investment to

his customer:
Background,
Purpose of the facility,
Term of facility,
Safety,

Security,

Profitability,
Diversity

3.4 Investment Processing of FSIBL:

Generally, every bank take certain steps to deliver its proposed investment
to the client. However, the process takes deep analysis. Because banks
invest depositors fund, not banks own fund. So each bank should take
strong concentration on investment proposal. However, FSIBL makes its
investment decision through successfully passing the following crucial
steps:

37

Figure 03: Investment Process of FSIBL

Selection of the Client:

This is the first stage of investment process. Here, bank select the client who are
loyal of the bank. It justify according to clients previous financial transaction, Safety,
Background etc. Over all look to the past performance of the client. There are no
document necessary in this stage.

Application Stage:
At this stage, the bank collects necessary information about the prospective client.
Documents that are necessary for getting investment of First Security Islami Bank
Limited are given below:
Attested copy of partnership deed (for partnership business)
Trade license photocopy
Abridge pro forma income statement
Tenders of the proposed assets
Details summary of the sundry debtors and creditors

38

 Attested copy of the memorandum of association and articles of association

for the joint stock company attested copy of the Tax Identification Number
(TIN) including final assessment
Previous three years audited balance sheet ( in case of joint stock company)
Previous three years business transaction statement for the mudaraba
investment

Appraisal Stage:
In this situation, the bank evaluates the client and his or her business. It is the most
important stage. Because on the basis of this stage, bank normally goes for
sanctioning the proposed investment limit. If anything goes wrong here, the Bank
suddenly stop to make payment of investment. However, the following contents are
presented from that appraisal stage:
Company information.
Clients information.
Working capital assessment.
Risk grade.
Owners information.
List of partners.
Insurance coverage.
Audit observation.
Security analysis.
Previous bankers information.
Industry or business analysis.

Sanctioning Stage:
This is the fourth stage of investment process. The bank officially approves
the investment proposed of the respective client. In this case client receives
banks sanction letter. Sanction letter contains the following keys:
Purpose of investment
Period of investment
Rate of return
Securities
Investment limit in million

39

 Mode & amount of investment

Documentation Stage:
In the documentation stage, FSIBL checks the following elements of clients:
Vat certificate
Tax payment certificate
Stock report
Trade License.
Aungykar Nama
Three years net income and business transaction
Performance report of bank
Account statement from of the bank
Particulars

of

the

proposal

Outstanding liability position of the bank

CIB (Credit Information Bureau) report
Disbursement Stage:
The bank decides to pay out money. Here , the client gets his or her desired or
goods. It is to be noted that before disbursement a site plane showing the exact
location of each mortgage property needs to be physically verified.
Monitoring & Recovery Stage:
This is the final stage of the investment process. Before this stage client take money
from the bank. Here, bank try to monitoring and recovery these steps.

3.5 Risk management/Investment Risk Assessment:

A comprehensive and accurate appraisal of the risk in every Investment proposal of
the Bank is mandatory. No proposal can be put on place before approving authority
unless there has been a complete analysis. In order to safeguard Banks Profit over
the entire period of the Investment, a comprehensive view of the capital, capacity,
integrity of the borrower, adequacy, nature of security, compliance with all regulatory
/legal formalities, condition of all documentation and finally a continuous and
constant supervision on the account are called for. It is absolute responsibility of the
Investment Officer / RM to ensure that all the necessary documents are collected

40

before the proposal is placed for approval. Where Investments are granted against
the guarantee of the third party, that guarantor must be subject to the same
Investment assessment as made for the principal borrower.

3.6 Investment Management:

Investment Management is a dynamic field where a certain standard of long-range
planning is needed to allocation the fund in diverse field and to minimize the return
on the invested fund. Continuous supervision, monitoring, and follow-up are highly
required for ensuring the timely repayment and minimizing the default. Actually the
investment portfolio is not only constituted the banks asset structure but also a vital
factor of the banks success. The overall success in investment management
depends on the banks investment policy, portfolio of investment, supervision and
follow-up of the loan and advance. Therefore, while analyzing the investment
management of FSIBL, it is required to analyze its investment policy, investment
procedure and quality of investment portfolio.

3.7 Investment Modes of FSIBL:

The investments modes of FSIBL are set by head office are of the bank and then
followed by selected branches. Thus, effort has been made in this report it reveal the
investment modes of FSIBL. Some popular investment modes of FSIBL are given
below-

a.

Bai-Murabaha

b. Bai-Muajjal
c.

HPSM/ Ijara

d.

Musharaka

e.

Mudaraba

f.

Bai-Salam

g.

Hire-Purchase

h.

Direct Investments

i.

Post Import Investment

j.

Purchase and Negotiation of Export Bills

41

k.

Inland Bills Purchased

l.

Murabaha Import Bills

m.

Bai-Muajjal Import Bills

n.

Pre Shipment Investment

From the above modes Savar Branch operate its investment activities mainlya. Bai-Murabaha
b. Bai-Muajjal
c. HPSM/ Ijara
d. Musharaka
e. Mudaraba
F. Hire purchase

3.7.1 Bai-Murabaha Mode of Investment:

Meaning:
The terms "Bai-Murabaha" have been derived from Arabic words Bai and
Ribhun. The word Bai means purchase and sale and the word Ribhun means an
agreed upon profit. "Bai-Murabaha" means sale on agreed upon profit.
Definition:
Bai-Murabaha may be defined as a contract between a Buyer and a seller
under which the Seller sells certain specific goods permissible under Islamic
Shariah and the Law of the land to the Buyer at a cost plus agreed profit payable in
cash or on any fixed future date in lump sum or by installments. The profit marked-up
may be fixed in lump sum or in percentage of the cost price of the goods.
Types of Murabaha:
In respect of dealing parties Bai--Murabaha may be of two types.
Ordinary Bai-murabaha:
If there are only two parties. The seller and the buyer. where the seller as an ordinary
trader purchases the goods from the market without depending on any order and

42

promise to buy the same from him and sells those to a buyer for cost plus profit.
then the sale is called Ordinary Bai-Murabaha.

Bai-murabaha on Order and Promise:

If there are three parties, the buyer, the seller and the Bank as an intermediary
trader between the buyer and the seller, where the Bank upon receipt of order from
the buyer with specification and a prior outstanding promise to buy the goods from
the Bank, purchases the ordered goods and sells those to the ordering buyer at a
cost plus agreed profit, the sale is called "Bai-Murabaha on Order or
Promise", generally known as Murabaha.

14

This Murabaha upon order and promise is generally used by the Islami Banks,
which undertake the purchase of commodities according to the specification
requested by the Clients and sale on Bai-Murabaha to the one who ordered for the
goods and promised to buy those for its cost price plus a marked-up profit
agreed upon previously by the two parties, the Bank and the Client.

In this Bank, Bai-Murabahais treated as a contract between the Bank and the Client
under which the Bank purchases the Specified goods as per order and specification
of the Client and sells those to the ordering Client at a cost plus agreed upon profit
payable within a fixed future date in lump sum or by fixed Installments.
Thus it is a sale of goods on profit by which ownership of the goods is transferred by
the Bank to the Client but the payment of the sale price (cost plus profit)
The Client is deferred for a fixed period.
It may be noted here that, in case of Bai-Muajjal and Bai-Murabaha, Islamic Bank is
a financier to the Client not in the sense that the Bank finances the purchase of
Goods by the Client, rather it is a financier by deferring the receipt of sale price of
the goods sold by the Bank to the Client.
If the Bank does not purchase the goods or does or does not make any purchase
agreement with seller, but only makes payment of any goods directly purchased
and received by the Client from the seller under Bai-Muajjal/ Bai-Murabaha
Agreement, that will be a remittance of the amount on behalf of the Client, which shall

43

be nothing but a loan to him and any profit on this amount shall be nothing but Interest
(Riba).
Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and
the payment of price of goods by the Bank must be made for and on behalf of the Bank.
If in any way the payment of price of goods is turned into a payment for and on behalf of
the Client or it is paid to the Client any profit on it will be Riba.

Important Features of Bai-Murabaha:

1. It is permissible for the Client to offer an order to purchase by the Bank particular
goods deciding its specification and committing himself to buy the same from
the Bank on Murabaha, i.e. cost plus agreed upon profit.
2.

It is permissible to make the promise binding upon the Client to purchase from
the Bank, that is, he is either to satisfy the promise or to indemnify the
damages caused by breaking the promise without excuse.

3.

It is permissible to take cash/collateral security to guarantee the implementation

of the promise or to indemnify the damages.

4.

It is also permissible to document the debt resulting from Bai-Murabaha by a

Guarantor, or a mortgage, or both like any other debt. Mortgage/ Guarantee/
Cash Security may be obtained prior to the signing of the Agreement or at
the time of signing the Agreement.

5. Stock and availability of goods is a basic condition for signing a Bai-Murabaha

Agreement. Therefore, the Bank must purchase the goods as per specification
of the Client to acquire ownership of the same before signing the BaiMurabaha agreement with the Client.
6.

After purchase of goods the Bank must bear the risk of goods until those
are actually sold and delivered to the Client, i.e., after purchase of the
goods by the Bank and before selling of those on Bai-Murabaha to the Client
buyer. the Bank shall bear the consequences of any damages or
defects, unless there is an agreement with the Client releasing the Bank of
the defects, that means. If the goods are damaged, Bank is liable, if the
goods are defective; (a defect that is not included in the release) the Bank
bears the responsibility.

44

7.

The Bank must deliver the specified Goods to the Client on specified date and
at specified place of delivery as per Contract.

8.

The Bank shall sell the goods at a higher price to earn profit. The cost of
goods sold and profit mark-up therewith shall separately and clearly be
mentioned in the Bai-Murabaha Agreement. The profit mark-up may be
mentioned in lump sum or in percentage of the purchase/cost price of the
goods. But, under no circumstances, the percentage of the profit shall have
any relation with time or expressed in relation with time, such as per month,
per annum etc.

9.

The price once fixed as per agreement and deferred cannot be further

increased.
10

It is permissible for the Bank to authorize any third party to buy and receive the
goods on Bank's behalf. The authorization must be in a separate contract.

Book Keeping and Accounting for Bai-murabaha Mode of Investment:

A) Receipts of cash security
At the time of receiving cash security (which will be subsequently converted to goods
security) the branch shall debit cash or clients current account and credit baimurabaha investment account (security deposit) (commercial /industrial etc.) On
account of m/s..............................................
B) Purchase of goods
At the time of purchase of the goods by the Bank, the Bank shall debit the BaiMurabaha investment account (Commercial/Industrial etc.) on account of M/s.
....................... (Client) for the total purchase price of the goods and credit: PO/IBG
A/C of DD or TT/current account of the seller/supplier/buying agent.

C) Sale and delivery of goods

After execution of Bai-Murabaha Sale Agreement and delivery of the goods to the
client, the branch shall debit investment account of the client for the amount of profit
of the Bank and all other procurement costs.
D) Maintenance of day book, supplementary sheets and clean cash book
All debits and credits to investment account shall first are recorded in day book/
supplementary sheets where form the amount shall be taken to clean cash book and
general ledger.

45

E) Vouchers and investment a/c pay-in-slip

General voucher: debit and credit shall be used for debiting and crediting investment
account respectively. Investment account pay-in-slip shall however be used for
depositing cash, cheque and other instruments into the investment account.

F) Maintenance of investment ledger

Investment ledger combines five accounts viz.: investment account-principal, profit
receivable account, security deposit account, other charges and compensation
charged account. Separate vouchers shall be prepared for these five types of
transactions and recorded in the respective column/account.
Total amount of profit, rate of return (percent per annum) and month-wise profit
calculated on the basis of sanction advice shall be recorded in the columns
earmarked for the purpose on the top right hand corner of investment ledger.

G) Profit receivable a/c:

Total amount of profit on every deal as per sanction advice/agreement (sale pricecost) shall be debited to the respective investment account immediately after delivery
of the goods to the client and shall be credited to the profit receivable account.

On the last working day of each month, amount of profit receivable up to the end of
the month shall be debited to profit receivable account and credited to investment
income account. For this purpose, the branch shall prepare a working sheet
following pro-forma-ledger-wise.

46

3.7.2 Bai-Muajjal Mode of I nvestment:

Meaning:
The terms "Bai" and "Muajjal" have been derived from Arabic words Azal and
Baiyu. The word Baiyu means purchase and sale and the word Azal
means a fixed time or fixed period. "Bai-Muajjal" Means sale for which payment
is made at a future fixed date or within a fixed period. In short, it is a sale on Credit.
Definition:
Bai-Muajjal may be defined as a contract between a Buyer and a seller under
which the Seller sells certain specific goods (permissible under Shariah and
Law of the Country), to the Buyer at an agreed fixed price payable at a certain
fixed future date in lump sum orwithin a fixed period by fixed installments. The
seller may also sell the goods purchased by him as per order and specification of
the Buyer.
In this Bank. Bai-Muajjal is treated as a contract between the Bank and the Client
under which the Bank sells to the Client certain specified goods, purchased as
per order and specification of the Client at an agreed price payable within a fixed
future date in lump sum or by fixed installments.
Thus it is a Credit sale of goods by which ownership of the goods is transferred
by the Bank

to the Client but the payment of sale price by the Client is deferred

for a fixed period.

It may be noted here that in case of Bai-Muajjal and Bai-Murabaha, the Islamic
Bank is a financier to the Client not in the sense that the Bank finances the
purchase of goods by the Client, rather it is a financier by deferring the receipt of
the sale price of goods, it sells to the Client. If the Bank does not purchase the
goods or does not make any purchase agreement with seller, but only makes
payment of any goods directly purchased and received by the Client form the
seller

under

Bai-Muajjal/

Bai-Murabaha

Agreement,

that

will

be

remittance/payment of the amount on behalf of the Client, which shall be nothing

but a loan to the Client and any profit on this amount shall be nothing but Interest.
Therefore, purchase of goods by the Bank should be for and on behalf of the
Bank and the payment of price of goods by the Bank must be made for and on

47

behalf of the Bank. If in any way the payment of price of goods is turned into a
payment for and on behalf of the Client or it is paid to the Client any profit on it will
be Riba.
Important Features of Bai-Muajjal:
1.

It permissible for the Client to offer an order to purchase by the Bank

particular goods deciding its specification and committing himself to buy the
same from the Bank on Bai-Muajjal i.e. deferred payment sale at fixed price.
19

2.

It is permissible to make the promise binding upon the Client to purchase from
the Bank, that is, he is either to satisfy the promise or to indemnify the
damages caused by breaking the promise without excuse.

3.

It is permissible to take cash / collateral security to Guarantee the

Implementation of the promise or to indemnify the damages.

4.

It is also permissible to document the debt resulting from Bai-Muajjal by a

Guarantor, or a mortgage or both like any other debt. Mortgage / Guarantee/
Cash security may be obtained prior to the signing of the Agreement or at the
time of signing the Agreement.

5.

Stock and availability of goods is a basic condition for signing a Bai-Muajjal

Agreement, Therefore, the Bank must purchase the goods as per
specification of the Client to acquire ownership of the same before signing the
Bai-Muajjal Agreement with the Client.

6.

After purchase of goods the Bank must bear the risk of goods until those are
actually delivered to the Client.

7.

The Bank must deliver the specified Goods to the Client on specified date and
at specified place of delivery as per Contract.

8.

The Bank may sell the goods at a higher price than the purchase price to earn

profit.
9.

The price once fixed as per agreement and deferred cannot be further

increased.
10.

The Bank may sell the goods at one agreed price which will include both the
cost price and the profit. Unlike Bai-Murabaha, the Bank may not disclose the
cost price and the profit mark-up separately to the Client.

48

3.7.3 HPSM Mode of Investment:

Hire Purchase:
It is a contract two parties, one is lesser & another is lessee to acquire a rentable
asset by the lesser and for taking the services of the asset by the lessee against
rent and payable the value of the asset to the lesser at a time for getting the
ownership of the asset.

20

Hire Purchase Under Shirakatul Melk (HPSM) Meaning:

HPSM is a synthesis of three contracts. shirkat, ijarah& sales.
Ma i n E l e me nts of HP S M:
A) Wording

: offer & acceptance

B) Contracting parties

: lesser & lessee

C) Subject matter of the contract

: rent & the benefit

Stages of HPSM:
a) Purchase under Joint Ownership
b) Hire and
c) Sale and/or transfer or Ownership to the other partner lessee

Definition:
HPSM is a special type of contract where both the Bank and the Client supply equity in
equal or unequal proportion for purchase of an asset, own the same jointly, share the
benefit as per agreement and bear the loss in proportion to their respective equity.
The share in the asset owned by the Bank is hired out to the Client and eventually the
Bank sells and transfers its ownership to the Client against payment of price as per
agreement.

Some Features of HP S M:
1. The Bank and the client purchase the asset jointly with specified equity
2. Sharing the ownership under HPSM contract.
3. Though ownership is joint, asset may be registered in the name of any one
mentioning in the HPSM agreement.
4. Rent cannot be considered as price or part of price of the Asset.

49

5. In the HPSM agreement, Hire does not sell or Hirer does not purchase the
asset but they promise to sell and purchase the same part by part only.
6. The hire contract become effective from the day on which the Hire transfer
the possession of the asset in good order and assemble condition to the Hirer.
7. As the portion of the Bank is sold and transferred part-by-part, the rent will
be reduced proportionally.
8. Under HPSM agreement bank will act as partner, Hire and at last as a seller and
client will act as partner, as a hirer and lastly as purchaser. The sale and
purchase will be affected by a separate sale contract.
9. Ownership risk will be borne by both the parties proportionally. The Hirer will
maintain the asset with due prudence and shall not be held responsible for the
damage or destruction of the asset without transgression, default or
negligence, otherwise he must be responsible for the same.
10. The Hirer is responsible for keeping the asset in good condition as a trustee.

Rules of HPSM:

Ownership of the asset of both the Hire and the hirer should be recognized as
per law of the land.

The asset(s) to be hired must not be a fungible one (perishable or consumable).

The Hire\ is under obligation to enable the hirer to the benefit from the
asset(s) by putting the possession of the asset(s) at his disposal in useable
condition at the commencement of the hire period.

In a hire contract, the period of hire and the rental to be paid per unit of time be
clearly stated.

It is a condition that the rental falls due from the date of handing over of the
asset to hirer and not from the date of contract or use of the asset.

The hired asset is a trust in the hands of the Hirer. He will maintain the asset(s)
with due produce and shall not be held responsible for the damage or
destruction of the asset without transgression, default or negligence; otherwise

50

he must be responsible for the same.

The Hire / owner bear all the basic costs for repairs & maintenance as per
contract.

The Hirer bears the cost of ordinary routine maintenance.

The hire contract is binding and no one party shall unilaterally resigned except
reasons that abrogate binding contract such as damage or destruction.

If the hired asset is damaged or destructed by the act of Allah and if the Hire
offers a substitute with the same specifications agreed upon in the hire contract
the contract does not terminate.

It is also permissible to sell the hired asset by the Hire to the Hirer during the
tenure of the hire period either part by part or in full at a time.

3.7.4 Musharaka (Joint-Venture Profit-Sharing):

The term refers to financing technique adopted by Islamic Banks. It is an agreement
under which the Islamic bank provides funds which are mingled with the funds of the
business enterprise and others.
All providers of capital are entitled to participate in the management but not
necessarily required to do so. The profit is distributed among the partners in predetermined ratios, while the loss is borne by each partner in proportion to his
contribution.

3.7.5 Mudaraba (Trustee Profit-Sharing):

The word Mudaraba has been derived from the Arabic word Darb/Darbun which
means movement to earn rahmat (munafa) of Allah.Mudaraba is a partnership where
one of the contracting points called the Shahib-al-Maal or the Rabb-ul-Maal (the
financier) provides a specified amount of capital and acts like a sleeping a dormant
partner while the other party, called the Mudarib (entrepreneur), provides the
entrepreneurship and management for caring on any venture, trade, industry or
service with the objectives of earning profits. The Mudarib is in the nature of a

51

trustee as well as an agent of the business. Profit in distributed as per pre agreed
ratio while the loss is entirely borne by the Shahib-al-Maal.

3.8 Other Types of Investment

1. Household Durable Scheme:

For purchase of household articles like furniture, electrical equipment etc.

2. Housing Investment Scheme:

For making arrangement for comfortable accommodation of the fixed income group.

3. Transport Investment Scheme:

Investment is made to existing successful businessman and potential entrepreneurs,
companies and established business house to buy road and water transport like bus,
minibus, and truck. Launch, cargo- vessel, baby taxi, tempo etc. in order to ease the
existing transportation problem.

4. Car Investment Scheme:

This investment is made on easy terms and conditions to officials, business
executives and established professionals in order to enable them to discharge their
duties and responsibilities punctually and efficiently.

5. Investment Scheme for Doctors:

This scheme has been taken up to help unemployed qualified doctors to go for selfemployment and to provide latest medical equipment to specialist doctors.

6. Small Business Investment Scheme:

This scheme has been taken for self- employment of educated unemployed youths
of rural and urban areas and to provide investment to small businessmen and
entrepreneurs.

7. Agricultural Implement Investment Scheme:

52

This scheme has been introduced to provide power tillers, power pumps, shallow
tube wells etc. on easy terms to unemployed youths for self- employment and to the
farmers

8. Rural Development Scheme:

This scheme has been taken up to re-activities se the rural economy and develop
model villages the rural economy and develop model villages through integrated
approach and thereby to create income generating and productive self-employment
opportunities through extension of investment.

9.

Silk weavers Investment Scheme:

This scheme has been taken up to assist the silk weavers of Savar area particularly
in respect of requirement of working capital.

10. Micro- Industries Investment Scheme:

To create wider base for industries as well as to encourage establishment of microindustries in different areas of the country.
3.9 The Objective and Principles of Investment Operation of the FSIBL
The objectives and principles of investment operations of the Banks are:

The investment fund strictly in accordance with the principles of Islamic

Shariah.

To diversifies its portfolio by size of investment, by sectors (public and

private), by economic purpose, by securities and by geographical area
including industrial, commercial and agricultural.

To ensure mutual benefit both for the Bank and the investment client by
professional appraisal of investment proposals, judicious sanction of
investment, close and constant supervision and monitoring therefore.

To make investment keeping the socio-economic requirement of the country

in view.

To increase the number of potential investors by making participatory and

productive investment.

53

To finance various developments schemes for poverty alleviation, income and

employment generation with a view to accelerating sustainable socioeconomic growth and suppliant of the society.

To invest in the form of goods and commodities rather than give out cash
money to the investment clients.

To encourage social suppliant enterprises.

To shun even highly profitable investment in fields forbidden under Islamic

Shariah and is harmful for the society.

The Bank extends investments under the principles of Bai-Marabaha, BaiMuazzal Hire purchase under Shairkatul Meilk and Musharaka. The Bank is
making sincere efforts to go for investment under Mudaraba principle in near
future..

3.10 Analysis of Investment Modes:

In order to analyze the investment activities of FSIBL, trend analysis is used. Trend
of deposit, investment, sector wise investment and trend of other investment related
aspects are analyzed in this study.

Year wise investment of FSIBL

Year

Investment

Amount in Million
Outstanding

Return

amount
2008

25094.65

100%

2009

38725.87

100%

2010

52123.90

100%

2011

69467.32

100%

2012

96304.22

100%

Source: Annual Report of FSIBL 2012

Table 01: Year Wise Investment

54

AMOUNT (IN MILLION)

120000
A 100000
M 80000
O 60000
U 40000
N 20000
T
0

96304.22
69467.32
38725.87

52123.9
AMOUNT (IN MILLION)

25094.65

2008

2009

2010

2011

2012

YEAR

Graph 01: Year Wise Investment of FSIBL(2008-2012)

Comment: FSIBL from 2008 to 2012 the total investment has increased from Tk
25094.65 million to Tk 96304.22 million. Outstanding Tk 2008 to 2012 is 0. Here all
the year return is 100%.

Year wise investment of FSIBL (Savar Branch)

Amount

Million
Year

Investment

Outstanding

Return

Amount
2008

349.11

100%

2009

420.43

100%

2010

536.26

100%

2011

710.48

100%

2012

915.66

100%

Source: Investment department of FSIBL (Savar Branch)

Table 02: Year wise investment (Savar Branch)

55

in

Investment Amount in Milliom

1000
900
800
700
600
500
400
300
200
100
0

915.66
710.48
536.26
349.11

2008

Investment Amount

420.43

2009

2010

2011

2012

Graph 02: Year Wise Investment (Savar Branch)

Comment: The above table shows the trend of total investment of FSIBL-Savar
Branch 2008 to 2012 the total investment has increased from Tk 349.11 to Tk 915.66
million respectively. All the year return was 100%.

2.10.1 Mode Wise Investment of FSIBL (Savar Branch):

FSIBL uses different mode to make its investments. The different modes used by the
FSIBL to make its investment are shown below.
Mode Wise Investment (Savar Branch)

Amount in

Million
SL

Mode of Investment

Investment amount

Percentage
Investment

Bai-murabaha

270.71

30%

Bai-muajjal

149.19

16%

HPSM

370.58

41%

Musharaka

76.28

8%

Others

48.90

5%

915.66

100%

Total

Source: Investment Department of Savar Branch

Table 03: Mode wise investment 2012 (Savar Branch)

56

Of

Investment amount
5%
8%
Bai-murabaha

30%

Bai-muajjal
HPSM
Musharaka
41%

Others

16%

Graph 03: Percentage of Mode wise Investment 2012 (Savar Branch)

Comment:The above pie diagram shows the mode wise investment in 2012 of
FSIBL of Savar Branch. The highest percentage of investment was made in HPSM
mode which is 41% of total investment and 30% of total investment in Baimurabahamode.16%Bai-muajjal of total investment, 5% others mode and only 8%
musharaka of total investment.

2.10.2 Different Mode Wise Investment of FSIBL (Savar Branch):

Bai-Murabaha:
The terms Bai-Murabaha have been derived from Arabic words Bai and
Ribhun. The word Bai means purchase and sale and the word Ribhun
means an agreed upon profit. Bai-Murabaha means sale on agreed upon profit.
Amount in Million
Year

Investment Amount

2010

207.04

2011

251.33

21.39%

2012

270.71

7.71%

Source: Investment Department of Savar Branch

Table 04: Year wise investment of Bai-Murabaha

57

Growth Rate

Trend of Bai -Murabaha

300
250
200

270.71

251.33
207.04

150
100
50
0
2010

2011

2012

Graph 04: Year wise Investment of Bai-Murabaha

29
Growth Rate of Bai-murabaha
25.00%

21.39%

20.00%
15.00%
10.00%

7.71%

5.00%
0.00%
0.00%
2010

2011

2012

Graph 05: Growth Rate of Bai-murabaha

Comment: From 2010 to 2012 the investment in Bai-murabaha mode is increased.

In 2010 the investment in Bai-murabaha was Tk 207.04 million and
increased in Tk 270.71 million.

58

in 2012 it

HPSM:
The mode under which any asset owned by the bank, by creation, acquirement/
or building-up is rented out is called Ijara or leasing. Hire Purchase under
Shirkatul Melk (HPSM) falls in this mode.
Amount in
Million
Year

Amount of investment

Growth Rate

2010

290.31

2011

318.81

9.82%

2012

370.58

16.24%

Source: Investment Department of Savar Branch

Table 05: Year Wise Investment of HPSM

Trend of HPSM
400
350
300
250
200
150

290.31

318.81

370.58

100
50
0
2010

2011

Graph 06: Year wise investment of HPSM

59

2012

Growth Rate of HPSM

18.00%
16.24%

16.00%
14.00%
12.00%
10.00%

9.82%

8.00%
6.00%
4.00%
2.00%
0.00%

0.00%
2010

2011

2012

Graph 07: Growth Rate of HPSM

Comment: From 2010 to 2012 the investment in HPSM mode increased. In 2010
the investment of HPSM was Tk 290.31 million, and 2011 was Tk 318.81 million that
was increased to Tk 370.58 million in 2012. after all, The growth rate of investment is
increasing in this mode.

31

Bai-Muajjal:

The bai-muajjal may be defined as a contract between a buyer and a seller under
which the seller sells certain specific goods, permissible under Shariah and low of
the country to the buyer at an agreed fixed price payable at a certain fixed future
date in lump sum or in fixed installments.
Amount in Million
Year

Amount of Investment

2010

300.23

2011

220.33

(26.61%)

2012

149.19

(32.29%)

Source: Investment Department of Savar Branch

Table 06: Year wise Investment of Bai-muajjal

60

Growth rate

Trend of Bai-mujjal
350

300.23

300
220.33

250
200

149.19

150
100
50
0
2010

2011

2012

Graph 08: Year wise Investment of Bai-muajjal

Growth rate of Bai-mujjal

0.00%

0.00%
2010

2011

2012

-5.00%
-10.00%
-15.00%
-20.00%
-25.00%

-26.61%

-30.00%
-32.29%
-35.00%

Graph 09: Growth Rate of Bai-muajjal

Comment: From the above table and graph it was found that the investment of Baimujjal were decreasing trend. In the year 2010 investment was Tk 300.23 million.
After two year investment decreased and reached Tk 149.10 million, in that time
growth rate of investment is decreasing day by day and reached negative position.

61

Musharaka:
Amount in Million
Year

Amount of Investment

Growth rate

2010

80.02

2011

110.33

37.88%

2012

76.28

(30.86%)

Source: Investment Department of Savar Branch

Table 07: Year wise Investment of Musharaka

Trend of musharaka
110.33

120
100

80.02

76.28

80
60
40
20
0
2010

2011

2012

Graph10: Year wise Investment of Musharaka

Growth rate of musharaka

50.00%
40.00%

37.88%

30.00%
20.00%
10.00%
0.00%
-10.00%

0.00%
2010

2011

2012

-20.00%
-30.00%

-30.86%

-40.00%

62

Graph 11: Growth rate of musharaka

Comment: From the above graph it was found that the investment position of
musharaka of last 3 years were increasing and decreasing trend. In 2011 growth rate
was 37.88% and 2012 growth rate was negative which (30.66%) was. This is not
good position.

2.10.3 Contribution Investment Position of Branch with Bank:

Amount in million
Total
Year

Investment

Savar

Branch Contribution

Investment

Branch of Total
Investment

2008

25094.65

349.11

1.39%

2009

38725.87

420.43

1.09%

2010

52123.90

536.26

1.03%

2011

69467.32

710.48

1.02%

2012

96304.22

915.66

Source: Financial Statement of FSIBL

63

of

0.95%

Table 08: Table shows the amount of investment of Bank and Branch(2008-2012
Contribution of Branch of Total Investment
1.40%

1.39%

1.20%

1.09%

1.03%

1.02%

0.95%

1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
25094.65

38725.87

52123.9

69467.32

96304.22

2008

2009

2010

2011

2012

Graph12: Graph shows the percentage covered by branch.

Comment: This graph represent the comparison between the FSIBL and its one
branch named Savar branch. From the above table and graph it was found that
percentage covered by branch were decreasing trend in the last 5 years. So the
bank should concern about it.

64

Chapter 4

Actual Task Part

Internship job Duty

65

4.1 Internship Job Duties:

First security Islami Bank Ltd. is one of the rapid growing banks in the country.
FSIBL widely conducts business activities with 92 of its branches around the country.
According to the requirements, of course fulfillment I joined in FSIBL, at Savar
Branch as an internee on the date of 28 September 2014. I have worked for three
months with different section under the supervision e professionals under different
department. In the beginning Md Mizanur Rahman, Manager of Savar Branch
selected me in operation banking department under the supervision of Md. Aminul
Islam. Md. Aminul Islam is the Senior Principal Officer of FSIBL at Savar branch, Md.
Aminul Islam was very cooperative in nature and there was immense possibility to
learn.

According to the office rules and regulations I have proceed like a regular employee.
Thats why I had to serve from 10:00am to 6:00pm. After entering into the office I
would sign attendance sheet like other officials, and then sit on assigned section and
there was specific desk for me. Within office hour every employees of relevant
section guided me in order for better improvement.
As an internee I also had some certain responsibilities and duties that had to perform
very
Sincerely. Since initially I was in retail banking department there I had to work as an
assistant of different employee who was working on that relevant department
During internship period I have learned lots of things. Few of them are listed below:

Account Section:
I had to work on account section of FSBIL at Savar Branch. I had to collect
necessary documents from the customers those who came to open account of Savar
Branch, Documents like TIN certificates, Trade license, National ID Card, Photo of
Holder and nominees etc.

66

Update customers information:

My prime job at Savar Branch was to update customers information. Customers who
opened their bank account before 2005, they need to update their information and
also photo, address, transaction profile, National ID no. etc. and I had to collect all
information from the customers.
Fill-up debit card forms:I had to collect debit card requisition from the customers
and filled up necessary papers. After
filled up debit card form I had to send the papers to the card division of head branch.
.
Account opening:
I had to open all types of bank account and collect necessary documents from the
customers.
Account closing:
I had to close all types of bank account when the customers want or over the
maturity the account.
Address change & Name correction of the customers:
My key job was to correct customers name and address if changes necessary. I had
to contact
with customers via phone and had to inform that their address or name have to
correct.
Cheque book issue:
FSIBL provides to types of cheque book they are MICR and Non MICR. I have
learned how those books issued so I did it.

Write down the Dr. and Cr. Voucher:

I wrote their Dr. and Cr. Voucher because of their internal maintain activities.I wrote
those voucher due to customer ignorance.

67

Chapter 5
Project Part

68

5.1 Define the Research Problem/ Topic

The topic of my report is Analysis the Investment Modes of First Security
Islamic Bank Ltd. Based on the topic I have highlighted the different types of
investment instrument of FSIBL. Therefore, the research topic is present position
of Investment Modes of FSIBL. After describing the procedure, it is useful to know
how effective this process is.

5.2 Project Duration:

I have taken 70 days to prepare my report. The activities done within the time line
given below:

Activities

Days

Questionnaire

15 days

Collect Survey Data

20 days

Hypothesis

Formulation 25 days

and Data Analysis

Report Development

15 days

Presentation

5 days

Total Duration

70. days

5.3 Cost & Budgeting:

SN

Description

Amount

Transportation Cost (90 Days * 50 BDT)

4,500 BDT

Cell Communication Cost

500 BDT

Qubee Internet Bill

950 BDT

Printing and Binding Cost

500 BDT

Refreshment Cost

2000 BDT

Others Expenditure

1000 BDT

Total

9,450 BDT

69

5.4 Methodology of the study:

5.4.1 Sources and collection of data

The data of this study has been collected through questionnaire and interview. For
the secondary sources, information has been collected from different journals,
articles, research publications and internet.

5.4.2 Population size:

The population size of the research is based on the clients of any types of Deposits
(Male and Female) of First Security Islamic Bank Ltd. Savar Branch, Savar, Dhaka1230

5.4.3 Sample frame

The sample frame of this study has been consisted of the bank clients, account
holders, and debtors of FISB. The sample frame was derived from FSlBL Savar
branch, Savar. To obtain a probability sample, effort was concentrated for Stratified
Random Sampling procedure for conducting questionnaire survey to general clients
and account holders of FSIBL.

5.4.4 Sample Size:

After preparing the sample frame, requests were made to the Manager In-charge of
Savar Bank Limited, Savar branch for seeking interviews to all bank personnel and
clients of FSIBL. A total of 25 respondents have been conducted, where clients and
account holders of FSIBL, Savar branch, Savar were included.

5.4.5 Analysis of data:

For analysis of data Ms Word, Ms Excel has been used. Raw data will be
transformed by editing and coding. Computerized data processing technique may be
used if the amount of data is huge in amount. In addition, computer program for
graphics or mapping, hypothesis testing analyzing of variance, the mean, median,
the mode standard deviation, confidence interval etc statics tools which may be
required for data analyzing.
.

70

5.5: Developing Hypothesis:

To consistent with study, I have developed some questionnaires. The questionnaires

are as follows:
H1: FSIBL offers smart investment modes.
H2: FSIBL offers lower interest rate than other bank in investment
H3: The employees of FSIBL discuss openly with clients before any investment.
H4: The Investment sanction process of FSIBL is timeless.
H5: The FSIBL keeps proper record when an investment made.
H6: FSIBL uses advertisement on investment for increasing the customers.

5.6 Hypothesis Testing:

Scale

H1

H2

H3

H4

H5

H6

1.Strongly Disagree

2.Disagree

3.Neither Agree nor Disagree

4.Agree

5.Stromgly Agree

12

10

11

11

Total

101

93

92

99

90

104

Avg.

4.04

3.72

3.68

3.96

3.60

4.16

SD

1.18

1.37

1.19

1.15

1.36

.92

T-Test

6.38

4.36

4.92

6.22

3.93

8.74

71

01. H0: FSIBL doesnt offer smart investment modes

HA: FSIBL offers smart investment modes.
I want to test the null hypothesis
HO: = 2.5
HA: 2.5
n = 25
Since the sample size n < 30 so, I may use t - test.
Here

= 4.04
S = 1.18
tcal = ( )/ (s/n) = 6.38 , with df = n-1=25-1=24

The critical value of t with df 24 at = 0.05 level of significance is

t0.025, 24 = 2.064 (for two tailed test)
Since tcal>t0.025, 24.So, the null hypothesis is rejected or not accepted. So at 5% level of
significance, it can be said that FSIBL offers smart investment modes

4%
12%
8%

48%

Strongly disagree
Disagree
Neither agree nor disagree

28%

Agree
Strongly agree

Figure 11: Respondents view FSIBL offers smart investment modes..

72

02. H0: FSIBL does not offer lower interest rate than other bank in investment
HA: FSIBL offers lower interest rate than other bank in investment
I want to test the null hypothesis
HO: = 2.5
HA: 2.5
n = 25
Since the sample size n < 30 so, I may use t - test.
Here

= 3.72
S = 1.37
tcal= ( )/ (s/n) = 4.36 , with df = n-1=25-1=24

The critical value of t with df 24 at = 0.05 level of significance is

t0.025, 24 = 2.064 (for two tailed test)
Since tcal>t0.025, 24.So, the null hypothesis is rejected or not accepted. So at 5% level
of significance, it can be said that FSIBL offers lower interest rate than other bank in
investment

12%
8%

40%

Strongly disagree
16%

Disagree
Neither agree nor disagree
Agree

24%

Strongly agree

Figure 12: Respondents view FSIBL offers lower interest rate than other bank in
investment

73

03. H0: The employees of FSIBL does not discuss openly with clients before any
investment.
HA: The employees of FSIBL discuss openly with clients before any investment.
I want to test the null hypothesis
HO: = 2.5
HA: 2.5
n = 25
Since the sample size n < 30 so, I may use t - test.
Here

= 3.68
S = 1.19
tcal= ( )/ (s/n) = 4.92 , with df = n-1=25-1=24

The critical value of t with df 24 at = 0.05 level of significance is

t0.025, 24 = 2.064 (for two tailed test)
Since tcal>t0.025, 24.So, the null hypothesis is rejected or not accepted. So at 5% level
of significance, it can be said that, the employees of FSIBL discuss openly with
clients before any investment.

4%
16%

32%

Strongly disagree
Disagree
20%

Neither agree nor disagree

Agree

28%

Strongly agree

Figure13: Respondents view the employees of FSIBL discuss openly with clients
before any investment.

74

04.H0: Investment sanction process of FSIBL is not timeless.

HA : Investment sanction process of FSIBL is timeless.
I want to test the null hypothesis
HO: = 2.5
HA: 2.5
n = 25
Since the sample size n < 30 so, I may use t - test.
Here

= 3.96
S = 1.15
tcal= ( )/ (s/n) = 6.22 , with df = n-1=25-1=24

The critical value of t with df 24 at = 0.05 level of significance is

t0.025, 24 = 2.064 (for two tailed test)
Since tcal>t0.025, 24.So, the null hypothesis is rejected or not accepted. So at 5% level
of significance, it can be said that Investment sanction process of FSIBL is timeless.

0%
20%
Strongly disagree

44%

8%

Disagree
Neither agree nor disagree

28%

Agree
Strongly agree

Figure 14: Respondents view Investment sanction process of FSIBL is time lessing.

75

05.H0: The FSIBL does not keep proper record when an investment made.
HA: The FSIBL keeps proper record when an investment made.
I want to test the null hypothesis
HO: = 2.5
HA: 2.5
n = 25
Since the sample size n < 30 so, I may use t - test.
Here

= 3.60
S = 1.36
tcal= ( )/ (s/n) = 3.93 , with df = n-1=25-1=24

The critical value of t with df 24 at = 0.05 level of significance is

t0.025, 24 = 2.064 (for two tailed test)
Since tcal>t0.025, 24.So, the null hypothesis is rejected or not accepted. So at 5% level of
significance, it can be said that The FSIBL keeps proper record when an investment
made.

4%
16%

36%

Strongly disagree
12%

Disagree
Neither agree nor disagree
Agree

24%

Strongly agree

Figure 15: Respondents view The FSIBL keeps proper record when an investment made..

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06.

H0: FSIBL does not use advertisement on investment for increasing the

customers.
HA: FSIBL uses advertisement on investment for increasing the customers.
I want to test the null hypothesis
HO: = 2.5
HA: 2.5
n = 25
Since the sample size n< 30 so, I may use t - test.
Here

= 4.16
S = 0.92
tcal= ( )/ (s/n) = 8.74 , with df = n-1=25-1=24

The critical value of t with df 24 at = 0.05 level of significance is

t0.025, 24 = 2.064 (for two tailed test)
Since tcal > t0.025, 24.So, the null hypothesis is rejected or not accepted. So at 5% level
of significance, it can be said that FSIBL uses advertisement on investment for
increasing the customers.
0%
8%
12%
44%

Strongly disagree
Disagree
Neither agree nor disagree
36%

Agree
Strongly agree

Figure 16: Respondents view FSIBL uses advertisement on investment for

increasing the customers.

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5.7 Finding:

1) FSIBL offers smart investment modes or not. From this study it is revealed that
28% respondents are agree, 48% respondents are strongly agree, 8%
respondents are neither agree nor disagree, 12% respondents are disagree,
4% respondents are strongly disagree So we can say that FSIBL offers smart
investment modes.
2) FSIBL offers lower interest rate than other bank in investment. From this study
it is revealed that 24% respondents are agree, 40% respondents are strongly
agree, 16% respondents are neither agree nor disagree, 8% respondents are
disagree, 12% respondents are strongly disagree. So most of the respondents
identified that FSIBL offers lower interest rate than other bank in investment.

03) The employees of FSIBL discuss openly with clients before any investment.
From this study it is revealed that 36% respondents are agree, 44% respondents are
strongly agree, 12% respondents are neither agree nor disagree, 8% respondents
are disagree, 0% respondent are strongly disagree. So most of the respondent
identify that The employees of FSIBL discuss openly with clients before any
investment.

04) Investment sanction process of FSIBL is timeless or not. From this study it is
revealed that 28% respondents are agree, 44% respondents are strongly agree, 8%
respondents are neither agree nor disagree, 20% respondents are disagree, 0%
respondent are strongly disagree So most of the respondents identified that
Investment sanction process of FSIBL is timeless.

5) The FSIBL keeps proper record when an investment made. From this study it is
revealed that 24% respondents are agree, 36% respondents are strongly agree, 12%
respondents are neither agree nor disagree, 16% respondents are disagree, 4%
respondents are strongly disagree. So most of the respondents have identified that
The FSIBL keeps proper record when an investment made
.
6) FSIBL uses advertisement on investment for increasing the customers. From this
study it is revealed that 28% respondents are agree, 32% respondents are strongly

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agree, 20% respondents are neither agree nor disagree, 16% respondents are
disagree, 4% respondents are strongly disagree

So most of the respondents

identified that FSIBL uses advertisement on investment for increasing the customers.

5.8 Recommendation:
1. FSIBL offers smart investment modes but they can try to update all types of
investment mode and the bank has to improve their investment policy. The
investment of the bank should be more diversified.
2. Their interest rate is good enough for the customers and they should keep it and
try to reduce more.
3. Bank should establish some training program for the employee for the best
performance from the employee.
4. The Investment sanction process of FSIBL is timeless. Which is very good for the
bank, but at the same time they should practice the errorless sanction processing.
5. The FSIBL keeps proper record when an investment made. But at the same time
they should be very careful about the confidential information, which should never be
revel.
6. FSIBL uses advertisement on investment for increasing the customers. But to
attract new young customers and entrepreneurs they should start their promotional
activities targeting young generations.

Other Recommendation:
1. Account opening process should be easier for illiterate customers.
2. The Bank should offer better training programs to their employees about the
special scheme of FSIBL
3.The Bank should increase their loan facility on deposit schemes.
4. Employee behavior with the customers sometimes reaches out of acceptance. In
every month, it is obvious that some customers are raising their voice loudly for
misunderstanding with some employees or such event occurs because of making
delay to provide services.
5. Use of latest technology in banking operation to meet up the customers demand
and service.
6. FSIBL has to increase their ATM booth services across the country.

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7. Provide latest news about their deposit schemes if any changed or modified.

5.9 Conclusion:
First Security Islami Bank Limited is one of the most potential banks in the banking
sector. It has a large portfolio with huge assets to meet up its liabilities and the
management of this bank is equipped with the expert bankers and managers in all
level of management. So it is not an easy job to find out the drawbacks of this
branch. I would rather feel like producing my personal opinion about the ongoing
practices in Savar Branch.
From the beginning, the prime objective of the FSIBL was to increase capitalization,
to maintain disciplined growth and high corporate ethics standard and enhance the
health of the share holders. Its customer service is very much impressive than of
other financial institutions. Their effective strategy, time demand offerings, up to date
rules and regulations to cope with international market and their friendship customer
services easily impress the clients. So, now the FSIBL is in leading position in recent
years is pretty well. Moreover, any laxity in operational ground can considerably be
compensated through the cordial services provided by a staff of talented officers or
employees. The investment process of FSIBL is so unique, thats why they become
highlighted gradually day by day.
Overall, the bank must make a positive attempt to be more outward looking in their
goals and aware of what is happening. They must also emphasize on the domestic
scenario more closely and analyze any certain trends and strategies of their
competitors. The bank must accept any failures and think of them as an objective to
pursue future goals instead of blaming such failures on other factor. By doing
analysis part I understand FSIBL is on right track, if they do their prime objective in
regular basis, in future they go on number one position.

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