Islami Bank Bangladesh Mohd Shamsul Haque

ISLAMI BANK BANGLADESH LIMITED
Islamic Banking Opportunities in Asia:

Focus-Bangladesh
Mohd. Shamsul Haque

Deputy Managing Director
Operations Wing
Islami Bank Bangladesh Limited
Country Information : Bangladesh
150 Million Population

Muslim : 90%
Growth Rate : 1.32%
Density : 990 per Square Km.
Life expectancy : 67 years
Below extreme poverty line : 25%
Per Capita Income : USD 750
Global vis a vis Asian Islamic Banking Scenario
Due to financial crisis World output contracted by 0.80% in 2009 as against

growth of 3.00% in 2008. World trade volume also contracted by 12.30% in
2009 as against growth of 2.80% in 2008. Despite negative growth of world
output and world trade volume there has been continuous growth of Islamic
Banking world wide.
According to an S&P report, assets of the top 500 Islamic Banks expanded
by 28.60% to total $822 billion in 2009, compared to $639 billion in 2008.
Malaysia is recognized as Asia’s Islamic Financial hub by Price Water

House Coopers. At the end of 2009 Malaysia’s Islamic Banking assets
equivalent to $35.20 billion having largest “sukuk” i.e the Islamic equivalent
to bond to $25 billion.
Global vis a vis Asian Islamic Banking Scenario
In Asia, mainly in the Middle Eastern countries, Malaysia, Indonesia,

Thailand, India, Pakistan and Bangladesh Islamic Banking growth is at a
faster rate then the conventional banking.
In Bangladesh there are 7 (seven) full fledged Islami Bank having 496
Branches and 8 (eight) Bangladeshi Conventional Banks and 3 (three)
Foreign Commercial Banks had 21 (twenty one) Islami Banking Branches.
During the recent past 2 (two) conventional banks were converted into full
fledged Islami banks.
Among the above, growth rate of IBBL was 23% as against 20.00 %
conventional banks.
Islamic Banking Opportunities in Asia: Focus-Bangladesh
Objectives :
Despite the growth of Islamic banking along with Traditional banking in
Bangladesh and other parts of the world, there is a debate regarding
whether Islamic banking is any different from the Traditional banking. In
this presentation, in order to clarify misleading concepts about Islamic
banking, it has been sought to achieve several objectives.
First, the savings and investment mobilization mechanisms of both

Islamic and Traditional banks have been analyzed.
Second, a number of apparent similarities that frequently equalize both

banking have been explained, although they are quite different by
nature and in effect.
Islamic Banking Opportunities in Asia : Focus-Bangladesh

Objectives Cont…
Third, the Islamic nature and interpretation of such apparent

similarities between the Islamic and Traditional banking, as premises
of Islamic banking have been explained.
Finally, the
Finally, the trends
trends of
of branch
branch expansion
expansion of
of all
all Islamic
Islamic banks
banks and
and the
the
trends of
trends of Islamic
Islamic banking
banking branch
branch expansion
expansion of
of the
the traditional
traditional banks
banks in
in
Bangladesh have
Bangladesh have been
been analyzed
analyzed to
to examine
examine the
the premises
premises ofof Islamic
Islamic
banking.
banking.
It is
It is hypothesized
hypothesized that
that the
the growth
growth of
of Islamic
Islamic banking
banking system
system is
is gaining
gaining
momentum in
momentum in Bangladesh.
Bangladesh. TheThe results
results indicate
indicate Islamic
Islamic banking
banking aa
promising one
promising one for
for the
the country
country to
to minimize
minimize its
its gap
gap between
between savings
savings and
and
investment.
investment.
What is Islamic Banking ?
An Islamic Bank is a financial institution that operates with the

objective to implement and materialize the economic and financial
principles of Islam in the banking arena.
As per OIC:
“a financial and social institution whose objectives and operations
as well as principles and practices must conform to the principles
of Islamic Shariah (Jurisprudence), and which must avoid the
interest in any of its operations” and “a Company which carries on
Islamic banking business.
Islamic Banking Act 1983 of Malaysia :

Islamic banking business means banking business whose aims and
operations do not involve any element which is not approved by
the religion Islam.”
What make Islamic Banking Different from

Conventional Western banking
No interest (Riba) paid or charged for any transaction or

service to ensure justice, welfare and non-exploitation.
The investments of an Islamic bank must be channeled to

the Islamic Shariah approved (Halal) sectors by Islamic
modes of finance like Mudaraba, Musharaka, Bai-Muajjal,
Bai-Salam, Ijara, Hire Purchase, etc., Based on the sharing
of risk and profit.
Islamic bankers in effect generate “profit and loss”

transactions in which the lender or bank shares in gains or
losses based on the economic viability of the project and
the credit worthiness of the customer.
Principles of Islamic Banking and Finance
Prohibition on interest : The Qur'an forbids the charging of Riba

on money lent. "O You who believe! Fear Allah and give up that
remains of your demand for usury, if you are indeed believers."
Concept of money
In an Islamic system money is primarily and exclusively a measure

of value, a means of exchange and a standard of deferred of
payment. Money has to operate through some real economic activity
or service. It is a facilitator and an intermediary, not an active self-
contained agent in itself.
Principles of Islamic Banking and Finance Cont…

Rules regarding Islamic investment
Any predetermined payment over and above the

actual amount of principal is prohibited.
The lender must share in the profits or losses
arising out of the enterprise for which the money
was lent
Making money from money is not acceptable in
Islam.
Gharar (Uncertainty, Risk or Speculation) is also
prohibited.
Investments should only support practices or
products that are not forbidden or even
discouraged by Islam
Analysis of Savings :
Islamic vs. Traditional banking
Islamic Banks Traditional banks
services Al Wadiah (Trust) Current Current
Mudarabah Savings and Savings and
Term deposits. Fixed Deposits.

Islamic
Islamic Banks
Banks
Islamic banks accept deposits with the condition that the money will be put
to work combined with the skills and management expertise of banks.
The depositor would get back his principal amount together with a share of
profit after the expiry of the contract.
In fact, the depositor agrees to put his money in the bank’s investment account
and to share profits with the bank. In this case, the depositor is the supplier of
capital and the bank is the manager of capital.
The depositor does not earn interest on a fixed rate in Islamic banking system,
but accepts some of the business risks and earns a share of the profit.
The depositor is not guaranteed any pre-determined return on the nominal
value of his deposit like interest-bearing banks, but is treated as a shareholder
of the bank and as such, is entitled to a share of the profits made by the bank.
if the bank incurs losses, the depositor shares in these losses and the value of
his deposit is reduced.
Traditional
Traditional banks
banks
The Traditional bank accepts deposits to supply money to the income

generating activities of entrepreneurs. The major source of funds for
Traditional banks is customer deposit, on which the bank pays fixed
interest rate.
This deposit is a form of debt given to the bank by a bank customer.
The bank has to pay to the depositor the principle as well as interest,
regardless whether the bank makes a profit from the money or not.
In case of a bad loan, the bank has to pay the depositor from its own
resources. The depositor has not shared risk with the bank, but is getting
paid for his debt to the bank
Analysis of Investment Mechanisms :

Lending (Investment) services :
Islamic Banks Traditional banks
Bai-Murabaha Loans
Bai-Muajjal Cash Credits
Ijara Overdrafts
Bai-Salam Purchase or Discount of Bills
Qard Hasana Advances for Hire-purchase
Mudarabaha
Musharakah

Islamic Investment Mechanisms
Islamic banks earn profit either from investment in trading (bai) and leasing
(Ijara) or in production/manufacturing.
As a result, Islamic banks get directly involved in trade and industry, for
which Islamic banks perform functions of both an intermediary and manager.
Lack of expertise to appraise and monitor different types of industries and

long drawn court procedures for recovery of bad loans in case of default by
borrowers make Islamic banks hesitant for long-term Mudaraba or Musahraka
modes of lending.
Consequently, ' bai ' and ‘lease’ modes of investment become dominant forms
of financing by Islamic banks.

Islamic Investment Mechanisms Cont…
Islamic banking is involved indirectly with commodity trading, as a

manager of funds based on the request of the client.
The business relationship between the bank and client on an actual

basis considers every aspect of assurance of profitability, such as credit
risk, liquidity risk, maturity risk and inflation risk.
In case of genuine default, the Islamic bank recovers only principal

without any compensation for bearing risk.
In case of willful default, there is no alternative to the Islamic bank

except demanding compensation for bearing risk. However, Islamic
banks do not account this compensation as part of its income, rather
they distribute these monies to the poor.
Analysis of Trends of Islamic Bank Branch Expansion

1983: Islami Bank Bangladesh Limited, the 1st Islamic Bank in South East
Asia, started its journey with 3 branches.
1987: Al-Baraka Bank Ltd. (Now ICB Islamic Bank Limited) established and
IBBL branch number stood at 18.
1995: Al Arafah Islami Bank Ltd. and Social Investment Bank Ltd. (renamed
as Social Islami Bank Limited) were established.
1998: The number of branches of 4 Islamic Banks stood at 172.
2000: Prime Bank Ltd., a Traditional bank, opened an Islamic branch that
provided a new dimension and set a new example of dual banking
system in the country.
2000: Shamil Bank Bahrain, (Now Bank Al- Falah Ltd.) a foreign Islamic bank
opened its branch in Bangladesh. The number of Islamic bank branches
stood at 194.
Analysis of Trends of Islamic Bank Branch Expansion Cont…
2001: Shahjalal Bank Ltd., a local Islamic bank, was established.

2002: 5 domestic and one foreign Islamic banks’ branches stood at 225.
2003: 5 new domestic Traditional banks namely
i. The Dhaka Bank Ltd.
ii. The South East Bank Ltd.
iii. Premier Bank Ltd.
iv. The City Bank Ltd. and
v. Jamuna Bank Limited opened 9 Islamic bank branches.
Prime Bank Ltd. also opened second Islamic branch in the same year.
Up to the year 2003: The number of branches of 7 Islamic banks stood at 496
and number of Islamic branches of 11 Traditional banks stood 21 i,e, altogether
517 =(496+21) Islamic bank branches were opened in the country.
2004: EXIM Bank Ltd. has migrated all of its conventional banking operation
into Shariah based Islami banking with its 52 branches.
Subsequently four (4) nationalized traditional commercial banks (the largest

banking companies) took initiative to implement Islamic banking system side by
side with their existing one.
2005: Bank Al Falah Limited, a foreign Islamic bank opened its office in
Bangladesh and now its branch number is 5.
In the year 2009, the total number of Islamic banks stood at 8 and the total
number of Islamic bank branches stood at 517 in Bangladesh.
It follows, therefore, the growth of Islamic banking in terms of branch expansion

was observed not only in Islamic banking companies but also in Traditional
banking companies.
The premises of Islamic banking system in Bangladesh have become stronger,

although Islamic-banking system is working side by side with Traditional banking
system.
It is an encouraging experience indicating a promising banking system for other

countries of Asia to minimize their gap between savings and investment.
Analysis of Trends of Islamic Bank Branch Expansion

Year No. of No. of No. of Islamic Year No. of No. of No. of Islamic
Islamic Branches Branches of Islamic Branches of Branches of
Bank of Islamic Traditional Bank Islamic Traditional
Banks banks Banks banks
1983 1 3 1995 4 123
1984 7 1996 137
1985 13 1997 152
1986 18 1998 172 1
1987 2 24 1999 185
1988 37 2000 5 194
1989 58 2001 6 208
1990 71 2002 225
1991 84 2003 242
1992 97 2004 7 258 10
1993 103 2009 8 496 21
1994 111
Regulatory and Supervisory Body :
Securities & Exchange Commission
Central Bank : Bangladesh Bank
Islamic Banks Consultative Forum (IBCF)
Central Shariah Board for Islamic Banks of Bangladesh
.
Central Bank Guidelines for Islamic Banking:

November 2009
Criteria for setting up full-fledged Islamic Bank.

The proposed bank company will be a public limited company and a minimum of 50%
share shall be offered to the public.
All the financial transactions of the banking company shall be conducted based on the
principles of Islamic Shariah.
The banking company, to commence business, shall raise a minimum paid-up capital
of Tk.2.00 billion and shall at all times maintain the required capital adequacy ratio,as
prescribed by the Bangladesh Bank.
Principles of Deposit
Islamic banks. receive deposits under two principles:
i) Al-Wadeeah principle.
ii) Mudaraba principle.
Central Bank Guidelines for Islamic Banking
Investment Principles & Investment Products

Islamic banks do not directly deal in money. They run business with
money. The funds of Islamic banks are mainly invested in the
following modes:
1) Mudaraba
2) Musharaka
3) Bai-Murabaha (Murabaha to the purchase orders)
4) Bai-Muajjal
5) Salam and parallel Salam
6) Istisna and parallel Istisna
7) Ijara
8) Ijarah Muntahia Bittamleek (Hire Purchase)
9) Hire Purchase Musharaka Mutanaqisa (HPMM)
. 10) Direct Investment
11) Investment Auctioning etc.
12) Quard
13) Quard Hassan etc.
Central Bank Guidelines for Islamic Banking
Framework of Rate of Return:
Under Mudaraba principles, profit accrued from investment and

financing are shared between the depositors and the bank based on
pre-agreed profit ratio. Losses, if any, will be borne by the
depositor unless the loss is due to the negligence by the bank in
managing the depositors' funds.
Given this unique relationship where the depositors would have a

direct. financial interest over the bank's income, it is essential to
ensure calculation of rate of return in a fair and equitable manner.
ISLAMIC BANKS CONSULTATIVE FORUM (IBCF)
The problems and issues relating to the growth and development of

Islamic Banking in Bangladesh are discussed and common strategy and
policies are formulated for implementation through this common Forum.
Goals :
• To establish Central Shariah Board for all Islamic Banks in Bangladesh,
Islamic Money Market, Islamic Insurance Company(s),
• Innovation of new financial products
• Embarking in investment through syndication etc.

(CSBIB) is a national Islamic non-profit corporate body of
Islamic banks and Islamic banking branches/windows
operating in Bangladesh.
The main objective of CSBIB is to provide overall cooperation

and assistance to the government, central bank, regulatory
authority and its member banks for tracking right path to
Islamic banking industry under the light of Islamic Shariah.
Islami Bank Bangladesh Limited :

Pioneer in Bangladesh
ISLAMI BANK BANGLADESH LIMITED (IBBL) was

established on 13th March 1983
IBBL is a commercial Bank
IBBL is a scheduled Bank
IBBL is a multinational Bank
IBBL is a joint venture Bank

Mission : Islami Bank Bangladesh Limited
To introduce welfare oriented banking system ensuring equity

and justice in the field of all economic activities
To achieve balanced growth and equitable development

through diversified investment operations
To invest in the priority sectors and less developed areas of

the country
To encourage socio-economic enlistment and sustained

economic growth of the country.
Capital Structure of IBBL
Particulars 2000 2005 2009

Authorized Capital Million US$ 14.50 72.46 144.93
Paid of Capital Million US$ 5 40 90
Equity Million US$ 39 121 343
Foreign Shares 62% 57.08% 58.23%
Local Shares 38% 42.12% 41.77%
Total share holders 7549 17201 52,164
Dividend 25% 25% 20% stock
stock stock & 10% cash
Face value per Share $14.49 $14.49 $1.45
EPS $0.51 $0.71 $0.80
Market price of Shares (Highest) $4.7.9 $ 8.09 $12.90
Equity Structure of IBBL Million US$
% to % to total % to % to
Particulars 2009 RWA Capital 2008 RWA total
Capital
i. Core Capital
a. Paid-up Capital 89.53 3.05% 26.15% 68.87 2.74% 25.59%
b. Share Premium 0.03 0.00% 0.01% 0.03 0.00% 0.01%
c. Statutory Reserve 90.49 3.08% 26.44% 71.60 2.85% 26.60%
d. General Reserve 5.32 0.18% 1.55% 1.74 0.07% 0.65%
e. Dividend Equalization Account 0.46 0.02% 0.14% 0.46 0.02% 0.17%
f. Retained Earnings 26.86 0.91% 7.84% 20.66 0.82% 7.67%
Total Core Capital 212.69 7.24% 62.13% 163.36 6.50% 60.69%
ii. Supplementary Capital
g. General Provision on UC Investment 39.13 1.33% 11.43% 33.56 1.34% 12.47%
h. General Provision on Off Balance Sheet 7.39 0.25% 2.16% 8.27 0.33% 3.07%
Item
i. Assets Revaluation Reserves (50)% 31.26 1.06% 9.13% 16.49 0.66% 6.13%
j. Exchange Equalization Account 0.56 0.02% 0.16% 0.56 0.02% 0.21%
k. Revaluation Reserves of securities 7.81 0.27% 2.28% 3.43 0.14% 1.28%
l. Mudaraba Perpetual Bond 43.48 1.48% 12.70% 43.48 1.73% 16.15%
Total Supplementary Capital 129.63 4.41% 37.87% 105.80 4.22% 39.31%
Total Capital/Equity 342.32 11.65% 100.00% 269.16 10.72% 100.00%
Total Risk Weighted Assets 2938.50 2511.44
Islami Bank Bangladesh Limited : At a glance

Million US$
Particulars 2000 2005 2009 Share to Share to National

Country Total Islamic Rank 2009
Banks
Deposit 466 1562 3540 9% 51%
Investment 398 1408 3272 9% 52%

1st
position in
Import 367 1080 2337 11% 49% Import
Export
Remittance
Export 245 524 1542 12% 40%
&
Operating
Remittance 111 536 2822 28% 85% Profit
Islami Bank Bangladesh Limited : At a glance
Particulars 2009
Deposit account Holder 4,591,463
Investment account Holder 80,471
Total number of branches of IBBL 232
All Bank Branches in Bangladesh 7152
Islamic Banks Branches 497
Conventional Banks Islamic Branches 21
Full-fledged Islamic Bank 8
Foreign Correspondents of IBBL 919
Correspondent Banks of IBBL 295
Mode wise Investment of IBBL

Amount in Million Dollar
Mode 2009 2008

Amount % to Total Amount % to Total
Investment Investment
Bai-Murabaha 1698 54.60% 1394 53.44%
Hire Purchase Under 1071 34.42% 915 35.08%
Sirkatul Melk
Bai-Muazzal 106 3.41% 95 3.64%
Purchase& Negotiation 164 5.26% 148 5.68%
Quard 41 1.32% 31 1.19%
Bai- Salam 30 0.97% 25 0.95%
Musharaka 1 0.02% 1 0.02%
Total 3110 100.00% 2609 100.00%
Economic Purpose-wise Investment of IBBL
Real Estate,
4.23%
Transport,
1.65%
RDS, 1.78%
Trade , 31.87% Other Special
Schemes,
1.18%
Others , 3.43%
AGRICULTUR
INDUSTRY , E & AGRO
52.34% INDUSTRY,
3.53%
Rural Development Scheme (RDS) : At a glance
Particulars May, 2010 National Rank
No of Village 10800
No. of Member 500154
4 th
position
Disbursement (Million US$) 394 Out of
Outstanding (Million US$) 62

1500
MFI
Rate of Recovery 99% of the
Members Savings (Million US$) 23 Country
IBBL’s International Affiliation
Member, Accounting and Auditing Organization for Islamic Financial

Institutions, Bahrain.
Member, General Council for Islamic Banks and Financial Institutions, Bahrain
Member, International Chamber of Commerce, (Bangladesh Chapter)
Member, International Islamic Conciliation and Commercial Arbitration

Centre, UAE
Member, International Islamic Financial Market (IIFM), Bahrain
Member, Islamic Financial Services Board (IFSB), Malaysia

IBBL’s National Affiliation
Member, Bangladesh Institute of Bank Management (BIBM)

Member, The Institute of Bankers, Bangladesh (IBB)
Bangladesh Association of Banks (BAB)
Bangladesh Foreign Exchange Dealers’ Association (BAFEDA)
Central Shariah Board for Islamic Banks In Bangladesh
Islamic Banks’ Consultative Forum (IBCF)
Dhaka Chamber Of Commerce & Industry (DCCI)
Special Features of IBBL’s Performance
IBBL is Recognized as the Best Bank in National and International

Level.
National Best Corporate Award 2007 By Institute of Cost

Management and Accountant Bangladesh.
‘Global Finance’ A New York Based Financial Magazine, Named

IBBL as the Best Bank of the Country for 2009,2008,2007,2005,
2000 & 1999.
‘Bank Watch’ A New York Based International Credit Rating

Agency recognized IBBL as the Market Leader.
Corporate Social Responsibility
Bangladesh Bank issued a circular No. DOS. 01 dated 1 June 2008 regarding
guidelines for mainstreaming Corporate Social Responsibility (CSR) in
banks and financial institutions.
Accounting and Auditing Organization for Islamic Financial Institutions

(AAOIFI) also formulated the same as their Governance Standard No. 7 of
which IBBL is obliged to follow as the member of their charter.
Islami Bank Bangladesh Limited being one of the most important corporate
citizen of the country, has been discharging its responsibilities to the society
in general, both directly through its mainstream operations as well as
indirectly through its fully owned subsidiary ‘Islami Bank Foundation’ since
inception.
As per guidelines of the Central Bank, CSR practices of the Bank are
categorized as follows:
CSR practices within the organization.
Scrutinizing environmental and social impact of the projects financed/to be

financed by the Bank.
Reaching out with financial services to the less fortunate segments of the
community.
Community investment by way of donations.

Islami Bank Medical College

6 Modern Hospitals and 8 Community Hospitals
5 Vocational Institutes named Islami Bank Institute of Technology
Islami Bank Physiotherapy and Disabled Rehabilitation Centre
Distressed Women Rehabilitation Centre
Islami Bank International School and College
Service Centre for vulnerable people
Monorom Islami Bank Crafts & Fashions
Other Activities
Scholarship to the poor and meritorious students
Grant for Medical treatment
Grant for sustenance & marriage
Ratings
Rating Agency : Credit Rating Information and Services Limited (CRISL)

Long-term ‘AA+’
Short-term ‘ST-1’
Basis of Rating: Wide Branch Network,

Strong Market Share,
Stable Customer Deposit Base,
Diversified and Innovative Product Line,
Experienced Management Team,
Contribution to Corporate Social Responsibility,
Good Financial Performance,
Good Asset quality,
Comfortable liquidity position and low cost of fund.
Conclusion
Islamic banks in Bangladesh have become, to an extent, successful

in the field of savings and investment mobilization. As a result, the
growth of Islamic banking in terms of branch expansion was evident
not only in Islamic banking companies but also in Traditional
banking companies.
Islamic banking is growing well in terms of resource mobilization.

These indicate that premises of Islamic banking system in
Bangladesh have become stronger, although Islamic-banking system
is working side by side with Traditional banking system.
The banking system of the country will forward towards Islamic

banking system in future and it is really promising for other
countries.
Recommendation
In order to remove misconception about Islamic banking from the

minds of bankers and customers, there is no alternative to publicity,
research and training of Islamic banking practices. Research should
focus on the development of financial products that conform to
Islamic Sharia, and training should be given to bankers, potential
researchers and bank customers.

Islami Bank Bangladesh Mohd Shamsul Haque

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ISLAMI BANK BANGLADESH LIMITED

Islamic Banking Opportunities in Asia:

Mohd. Shamsul Haque

Country Information : Bangladesh

150 Million Population

Global vis a vis Asian Islamic Banking Scenario

Due to financial crisis World output contracted by 0.80% in 2009 as against

Malaysia is recognized as Asia’s Islamic Financial hub by Price Water

Global vis a vis Asian Islamic Banking Scenario

In Asia, mainly in the Middle Eastern countries, Malaysia, Indonesia,

Islamic Banking Opportunities in Asia: Focus-Bangladesh

First, the savings and investment mobilization mechanisms of both

Second, a number of apparent similarities that frequently equalize both

Islamic Banking Opportunities in Asia : Focus-Bangladesh

Third, the Islamic nature and interpretation of such apparent

What is Islamic Banking ?

An Islamic Bank is a financial institution that operates with the

Islamic Banking Act 1983 of Malaysia :

What make Islamic Banking Different from

No interest (Riba) paid or charged for any transaction or

The investments of an Islamic bank must be channeled to

Islamic bankers in effect generate “profit and loss”

Principles of Islamic Banking and Finance

Prohibition on interest : The Qur'an forbids the charging of Riba

In an Islamic system money is primarily and exclusively a measure

Principles of Islamic Banking and Finance Cont…

Any predetermined payment over and above the

Islamic Banks Traditional banks

services Al Wadiah (Trust) Current Current

Mudarabah Savings and Savings and

Term deposits. Fixed Deposits.

The Traditional bank accepts deposits to supply money to the income

This deposit is a form of debt given to the bank by a bank customer.

Analysis of Investment Mechanisms :

Lending (Investment) services :

Islamic Banks Traditional banks

Bai-Salam Purchase or Discount of Bills

Qard Hasana Advances for Hire-purchase

Analysis of Investment Mechanisms :

Islamic Investment Mechanisms

Lack of expertise to appraise and monitor different types of industries and

Analysis of Investment Mechanisms :

Islamic Investment Mechanisms Cont…

Islamic banking is involved indirectly with commodity trading, as a

The business relationship between the bank and client on an actual

In case of genuine default, the Islamic bank recovers only principal

In case of willful default, there is no alternative to the Islamic bank

Analysis of Trends of Islamic Bank Branch Expansion

1998: The number of branches of 4 Islamic Banks stood at 172.

Analysis of Trends of Islamic Bank Branch Expansion Cont…

2001: Shahjalal Bank Ltd., a local Islamic bank, was established.

Analysis of Trends of Islamic Bank Branch Expansion Cont…

Subsequently four (4) nationalized traditional commercial banks (the largest

Analysis of Trends of Islamic Bank Branch Expansion Cont…

It follows, therefore, the growth of Islamic banking in terms of branch expansion

The premises of Islamic banking system in Bangladesh have become stronger,

It is an encouraging experience indicating a promising banking system for other

Analysis of Trends of Islamic Bank Branch Expansion

Regulatory and Supervisory Body :

Securities & Exchange Commission

Central Bank : Bangladesh Bank

Islamic Banks Consultative Forum (IBCF)

Central Shariah Board for Islamic Banks of Bangladesh