The general banking operation of Shahjalal Islami Bank Limited
Executive Summary Shahjalal Islami Bank Limited is a private commercial bank, which is 6 th Islamic shariah based bank in Bangladesh. The bank started it’s on 10 th May 2001, as a public limited company under companies Act 1994. During this period it could improve its image in the society as an Islamic bank. Now it has 50 branches all over the country. All branches are situated in the highly demanded areas. As a new bank, Shahjala Islami Bank Limited has been competing with other private commercial banks where all the banks are adopting different incentive program to attract the customers, Accordingly SJIBL offering different type of deposit scheme bearing highest rate of return. Mudaraba Deposit Scheme, Monthly Income Scheme, Millionaire Scheme, Double Benefit Scheme etc are the most popular offers that are completed new innovation in the banking sector and widely accepted by the clients. This report focuses and identifies the general banking operation of SJIBL Bangshal Branch. Shahjalal Islami Bank Limited is scheduled commercial Bank registered by the Bangladesh Bank. General Banking is the starting point of all banking activities. General Banking department aids in taking deposits and simultaneously provides some ancillaries services. 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 honoring cheques. It opens new accounts; receive and payment cash; issue bank drafts and pay orders etc, since the bank in confined to provide the service everyday. General banking is also known as retail banking. This bank is committed to conduct all bankig and investment activities on the basis of interest-free profit loss sharing systems. SJIBL follows the rules and regulation prescribed by the Bangladesh Bank for scheduled commercial bank. The functions of the bank cover a wide range of banking and functional activities to individuals, firms, corporate bodies etc.
1.1 Origin of the Report:
Shahjalal Islami Bank Limited (SJIBL) is a place where could learn about banking service in SJIBL. This organization has created a positive image to the customer’s mind by providing better service. As it maintain the speed with the competitive business world, its activities, culture, philosophy and style leads an intern student to be the best at any field of working life. As an intern student got the opportunity to work with this organization for three months and acquire idea about General Banking Service.
1.2 Background of the Study Any academic course of study has a great value when it has practical application in real life. That’s why after completing the BBA course, many students of Northern University Bangladesh joint three months internship program, it is a part of BBA program. There is a gap between the theoretical knowledge and practical knowledge. Our internship program has been launched mainly to bridge the gap. And also internship students become aware of organizational culture. Internship program so called work attachment program an essential for every BBA student because it helps him or her to acquaint with the real life situation. As bank is one of the most important financial intermediaries. So have selected Shahjalal Islami Bank Limited, which is one of the most leading banks of the new bank arena.
1.3 Objective of the Study: There are having two types of objective.
1.3.1 The main objective of the study is: •
To fulfill the requirement for the completion of BBA program.
1.3.2 The Specific objectives of this study are: •
To know about general operational activities of Shahjalal Islami Bank Limited (SJIBL) this is based on Islami Shariah.
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To know the general banking procedures of Shahjalal Islami Bank Limited at Bangshal Branch.
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To know Paper/Documents required for opening & closing of various types of accounts.
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To know Cash receive and payment.
1.4 Scope of Study Shahjalal Islami Bank Limited (SJIBL) is now well grown and it has fifty-one branche’s in Dhaka, Chittagong, Sylhet, Khulna, Rajshahi and Barisal. The scope of the study will be limited to the organizational setup, function and operation of the SJIBL in the Bangladesh. This report mainly encompasses the performance of Shahjalal Islami Bank Limited in General Banking areas. For the purpose of internship program, worked at the Bangshal Branch of SJIBL and this provided the way to get myself familiarized with banking environment. The opportunity to gather experience by working in different departments of the Branch.
1.5 Methodology of the study: In order to make the Report more meaningful and presentable, two sources of data and information have been used widely.
z
PRIMARY PRIMARY DATA DATA
SECONDAR SECONDAR DATA YYDATA
Both primary and secondary data sources were used to generate the report The Primary Sources are as follows: Face-to-face conversation with the respective officers and staffs of the Branch. •
Observation.
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Informal conversation with the clients ∕ officials.
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Practical work exposures from the desks of the Branch covered.
The Secondary Sources of data and information are –
• Annual Report (2008) of SJIBL. • Credit Rating Report on SJIBL-2008. • Periodicals published by Bangladesh Bank. • Various books, articles, compilations etc. regarding Investment Department operations and its credit policies.
• Website of the bank.
1.6. Limitation of the Study I have obtained wholehearted co-operation from employee of SJIBL Bangshal Branch in Dhaka. They were tiring to give me enough information to complete this report properly. But they were not able to give me many documents; on the way of my study because of they were very busy in all day. The tried best to provide the necessary information about General Banking Activities (import) of SJIBL Bangshal Branch in Dhaka. Further more for going to prepare this report faced the following problems that may be terms as the limitation of the study.
2.1 Historical Background of Shahjalal Islami Bank limited: The emergence of Shahjalal Islami Bank Limited was at the juncture of liberalization of global economic activities. The experience of the prosperous economies of the Asian countries and in particular of South Asia has been the driving force and the strategic operational policy option of the bank. The company philosophy - "Committed to cordial Service" has been precisely an essence of the legend of success in the Asian countries. The bank by concentrating on the Islamic banking activities in its area of specialization has achieved good market reputation with efficient customer service. The bank is committed to providing continuous training to its staff to keep them up to date with modern practices in their respective fields of work. Shahjalal Islami Bank limited was incorporated as a public company limited by shares on 1 st day of April 2001 under the Company Act 1994 for carrying out all kinds of banking activities with the authorized capital of Taka 2,000,000,000 divided into 20,000,000 ordinary shares of Taka 100 each. The Bank commenced its operation as interest free shariah based commercial bank on the 10 th May 2001 with the permission of Bangladesh Bank. The name of the bank has been changed from “Shahjalal Bank Limited” to “Shahjalal Islami Bank Limited” on April 18, 2004 with the permission of Bangladesh Bank. The sponsors have subscribed and fully paid for 9,358,250 ordinary shares of Tk. 1000 each amounting to Tk.935, 825,000.00. The Bank now proposes to increase the paid up capital to Tk.1,871,650,000 consisting of 18,716,500 ordinary shares of Tk.100 each by issuing 9,358,250 ordinary shares of Tk.100 each by way of Initial Public Offering (IPO).
2.2 Objectives of Shahjalal Islami Bank: From time immemorial Banks principally did the functions of moneylenders or "Mohajans" but the functions and scope of modern banking are now-a-days very wide and different. They accept deposits and lend money like their ancestors, nevertheless, their role as catalytic agent of economic development encompassing wide range of services is very important. Business commerce and industries in modern times cannot go without banks. There are people interested to abide by the injunctions of religions in all sphere of life including economic activities. Human being is value oriented and social science is not value-neutral. Shahjalal Islami Bank believes in moral and material development simultaneously. "Interest" or "Usury" has not been appreciated and accepted by "the Tawrat" of Prophet Moses, "the Bible" of Prophet Jesus and "the Quran" of Hazrat Muhammad (sm). Efforts are there to do banking without interest Shahjalal Islami Bank Limited avoids "interest" in all its transactions and provides all available modern banking services to its clients and want to contribute in both moral and material development of human being. No sustainable material well being is possible without spiritual development of mankind. Only material well-being should not be the objective of development. Socio-economic justice and brotherhood can be implemented better in a God-fearing society. Other objectives of Shahjalal Islami Bank Limited include: •
To establish interest-free and welfare oriented banking system.
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To help in poverty alleviation and employment generations
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To contribute in sustainable economic growth.
2.3 SJIBL at a glance: •
Principle Activity- Commercial Banking
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Incorporated on- April 01, 2001
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Started Operation on – May 10, 2001
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Paid-up Capital – TK. 1872 million
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Equity – TK. 960.64 million
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Investment – TK. 12,800.53 million
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Share percentage – Sponsor – 50%, Public - 50%
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Number of Branches -30 (2009)
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Type of banking – Islami Banking / Based on Islamic Shariah.
2.4 Vision and Mission Vision: •
To provide quality services to customers.
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To set high standards innovation services acquiring state-of-the-art technology blended with Islamic Principles, and being total satisfaction to our clients and employees.
Mission: • To provide quality services to customers. •
To set high standards of integrity.
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To make quality investment.
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To ensure sustainable growth in business.
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To ensure maximization of Shareholders' wealth.
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To extend our customers innovative services acquiring state-of-the-art technology blended with Islamic principles.
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To ensure human resource development to meet the challenges of the time.
2.5 Nature of Business: The Bank is carrying out commercial, corporate, investment and retail banking related services as follows: • • • • • • •
Corporate Finance Correspondence Banking Documentary Credit Foreign Exchange Guarantees Syndicated Finance Other related Business.
2.6 Organizational Structure: There are different wings to consist the organizational structure of SJIBL. There are-
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Board of Directors.
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Board Committees.
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Executive Committees.
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Policy Committees.
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Management team.
2.7 Organ gram of SJIBL Bangshal Branch: MANAGER Mr. Abdul Aziz
Deputy Manager Mr. Md. Khalilur Rahman
Head of Foreign Trade Mr. Asif Hossain
Head of Investment Mr. Mahmudul Aziz
Mr. Humayan Kabir
Head of Customer Service Mr. Salaluddin Ahemd
Head of Fin & Admin Mr. Md. Redwan
Md. Ibrahim Mr. Jafor
Mr. Kamruzzaman
Mr. Lutful Hoque Mr. Sawkat Ali
Mrs. Tania Ahamed
Mrs. Ruma Parvin
Mr. Ahyamol
Md. Muntasir Mr. Jayed Newaj
Mr. Ajgor Ali
Md. Zakir Hossain Mr. Md. Mustafa (Clearinf)
Head o f Cash Mohammed Hasan
Muhammad Ali
Md. Towhidur Rahman
Nazmul Islam Nuru
Tofazzal Hossain
Fig: 2.1 Organ gram of SJIBL Bangshal Branch. Source: Office Documents.
2.8 Branch Network: Shahjalal Islami Bank Limited has a predominately network of its 50 branches, which are tightly bound with each other are displayed below: Dhaka
1. Ashkona Branch, Dhaka 2. Baipail (Dhaka EPZ) Branch3. Banani Branch 4. Bangshal Branch 5. Barachowna Branch,Tangail 6. Baruakhali Branch, Dhaka 7.Bijoy Nogar Branch 8. College Gate Branch 9. Dhaka Main Branch 10. Dhanmondi Branch 11. Foreign Exchange Branch 12. Gulshan Branch 13. Joydevpur Chowrasta 14. Joypara Branch 15. Kawran Bazar Branch 16. Keranigonj Branch 17. Madhabdi Branch, Norsingdi 18. Mirpur Branch 19. Mitford Branch 20. Motijheel Branch 21. Mymensingh Branch 22. Narayanganj Branch 23. Panthapath Branch 24. Savar Branch 25. Shafipur Branch, Gazipur 26. Shatmasjid Road Branch 27. Uttara Branch 28. Vatara Branch Source: SJIBL web side.
2.9 Computer services:
Chittagong 1. Agrabad Branch 2. Ashugonj Branch, 3. Chawkbazar Branch 4. Comilla Branch 5. Cox's Bazar Branch 6. Jubilee Road Branch 7. Khatunganj Branch 8. Muradpur Branch 9..Nazirhat Branch 10.Ramgonj Branch Rajshahi 1. Bogra Branch 2.Naogaon Branch 3.Rajshahi Branch 4.Saidpur Branch
Sylhet 1.Beanibazar Branch 2.Dargah Gate Branch 3.Goalbazar Branch 4.Moulvibazar Branch 5.Sylhet Branch
Khulna
1. Jessore Branch 2. Kaligonj Branch 3. Khulna Branch
Shajalal Islami Bank is computerized and provider the following services some of these services will be introduced soon. Shahjalal islami Bank Limited introduced a few schemes, which are very popular: 1. Online services 2. Automated Accounting 3. Integrated System 4. Signature Verification 5. Any Branch Banking 6. ATM Services 7. Other Delivery Channel Services (to be implemented).
2.10 SJIBL VISA Card: Card is considered as a new dimension of product resulting from technological development in the banking arena. In line with our affiliation with VISA International for VISA ATMs and POS, the following two product are launched broadening service products of the Bank to the clients: 1. VISA Electron (SJIBL VISA Debit – local) 2. VISA prepaid (SJIBL VISA Prepaid Card)
2.10.1 SJIBL VISA Card Charges: SJIBL provides first year free services at VISA card and 575 tk will deducted from the account at second year.
3. Internship Position: The joined in Shahjalal Islami Bank Limited Bangshal Branch as an intern on the 5 th October 2009. After joining, followed what they do, how they maintain the office, discipline, how they handle the customers, behavior of the employees etc. day by day adjusted with others and started my work. In Shahjalal Islami Bank Limited Bangshal Branch, the people are mostly courteous, friendly in nature and eager to help in spite of the tremendous workload. They helped me as the tried their level best. was tried to maintain the office time. The internship period was three month. Worked in general banking, account opening and accounts department of the bank. In this time was also appointed in the bank recruitment process. In every section, gat a supervisor corrected that. They take care of me and cheeked
work.
If I did any mistake them supervisor corrected that. In this way completed internship
period in the bank. The maximum time spent in internship period in the main branch for the bank employee recruitment process. The really enjoyed this part on internship period. Think that it will help in future career. At the internee period was related with the various types of activities.
3.2 Internship Duties: SJIBL Bangshal Branch has five different Departments. Those are General Banking Department, Foreign Exchange, Credit Department, Customer Services Department, Cash Department. From the beginning of the internship the SJIBL branch manager suggest me to work at General Banking Division. It is the vital part for any internee even employee to know about the banking activities. In day-to-day operation general banking cover the maximum portion of activities. To gather knowledge about the bank’s operations, general banking is fundamental to all. The believe that The learned about the maximum portion of the general banking of SJIBL in this section was mainly related to the bellows. •
Issuance of cheek book.
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Issuance of Demand Draft.
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Passing of vouchers.
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Posting in Register Computer.
Account opening: At the bank, account opening is the fist and important for the bank authorities and the client. Most of the customers who come first time to open an account are not aware about the procedures in that cases helped them to open the account smoothly. In this section was careful about the following •
Mode of operation of different types of accounts.
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KYC and their formalities for opening.
Accounts Department:
All the transaction are the parts of accounting department. Every days activities are done throw the accounting departments. As an internee at the beginning farced some real type of problems. But after some days completed all things perfectly, and also trained other internee to do that. Regularly did the work related to •
Sorting of vouchers.
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Stitching of vouchers.
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Reconciliation with Head office ands other Branch.
Shahjalal Islami bank limited is a commercial bank and it plays a very important role in our economy; in fact it is difficult imaging how our economic system would function efficiently without the help of commercial bank. They are heart of our financial structure since they have the ability, to add to the money supply of the nation thus create additional purchasing power. These characteristics set commercial banks apart from other financial institution. In addition to issuing deposits payable on demand they accept time deposit. By lending and investing these resources and by transferring funds throughout the nation and even between countries, they make possible a more complete utilization of resources of the nation. Although banks create no new wealth, their lending. Investing and related activities facilitate the economic process of production, distribution consumption. There are mainly three sections in SJIBL via General Banking Division, Investment Division and Foreign Exchange Devision. These Divisions have small departments or units under them. At Bangshal
Branch General
Banking activities are also done.
4.1 General Banking General Banking Activities are the primary functions of each and every bank. The first task of the banks is to acquire deposits and then invest it profitable business sectors. Now in acquiring deposits, bank offers various deposit schemes and new services to its valued customers.
Besides mobilizing deposits, General Banking Activities include the
consequent tasks done as per customer’s requirement. Services, Services, like Cheque encashment, Account Opening, Account Transfer, Account Closing, Bills and Remittance etc are giving here. Now a day, General Banking sections are offering multidimensional services to its customers due to its huge competition in the field of banking industry.
There are five individual departments in general banking of Shahjalal Islami Bank Limited at Bangshal Branch, which are as follow:
General Banking Division
Account Opening Department
Remittance Department
Cash Department
Account Department
Fig:4.1: General Banking Division of SJIBL at Bangshal Branch. Source: Office Documents
4.2 Deposit Mobilozation of SJIBL, Bangshal Branch: Bank account is a contractual relationship between a bank and the customers. It is the best way foe a customer to build relationship with the bank. Like interest-based conventional banks, the main function of Shahjalal Islami Bank Limited (SJIBL) is to mobilize saving and provide financial support to the entrepreneurs. Depositors receive interest in a predetermined rate for their deposits with an interests based banks, where SJIBL neither pay not receive interest and mobilizes saving of the common people in line with Islamic Shariah. Same principle of deposit mobilization is followed at Bangshal Branch. Following forms of deposit accounts are available at this branch: •
Al-Wadiah Current Deposit (ACD A/C)
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Mudaraba Saving Deposit (MSD A/C)
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Mudaraba Short Notice Deposit (MSND A/C)
4.2.1 Al-Wadiah Current Deposit (ACD A/C) The words ‘Al – Wadiah’ have been derived from the Arabic word ‘Wada’ ‘young’ which means to keep / to give up / Amanat. As per Shariah. Amanat means to keep something
(goods/ money / others) to any reliable person / institution for safe and secured preservation of the same keeping its ownership unchanged and which will be returned to the owner on demand as it is / in original shape. Shahjalal Islami Bank Limited Bangshal Branch receives deposits in ots Al – Wadia Current Account. It has some similarity with the current account of conventional bank. In the process of opening Al – Wadiah deposited money and earns profit out of their development. Any losses incurred by way of such investment are totally borne by the bank. Thus, the depositors don’t take the risk of losses with Al- Wadiah Current Deposit; they also don’t expect any profit from it. Depositors are provided with cheque book. They can withdraw or deposit any amount as and when they like. Bank may charge a free in the account. Al- Wadiah Deposit is short terms and very uncertain, thus banks have to be very useful in the investment of money from this account.
4.2.2 General Documentation requirements for opening an (ACD) account at Bangshal Branch: a) For an Individual Customer: • •
Copy of the Passport, if available or Employee’s Certificate of Commissioner’s/Chairman’s Certificate or Letter of Introduction by a person accepted to the Bank TIN Certificate, if applicable.
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Two recent passport size photographs duly attested by the Introducer.
b) For Sole Proprietorship: •
Copy of Trade License
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Two recent passport size photograph of the Proprietor/Signatory duly attested by the Introducer.
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Copy of the Passport of the Proprietor/Signatory, if available or Commission’s/Chairman’s Certificate or Letter of Introduction by a acceptable to the Bank.
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TIN certificate.
c) For Partnership: •
Copy of the Partnership Deed of the Firm.
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List of Partnership with their address and phone number.
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Copy of Trade License.
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Extract of Resolution of the Partnership of the Firm for opening the account and authorization for its operation duly certified by the Managing Partner of the Firm.
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Two recent Partnership, Certificate of Registration of the Firm along with duly certified copy of the Partnership Deed.
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Two recent passport size photograph of each Partner/Signatory duly attested by Introducer.
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Copy of the Passport of each Partner/Signatory, if available or Commission’s/Chairman’s Certificate or Letter of Introduction by a person acceptable to the Bank.
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TIN certificate.
the
d) Private & Public Limited Company: •
Certified true copy of the Memorandum and Article of Association of the Company.
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Certified true copy of Certificate of Introducer of Incorporation of the Company.
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Certified true copy Certificate of Commencement of Business of the Company, in case of Public Limited Company.
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Latest list of Directors with address and phone number along with From XII.
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Extracts of the duly adopted Resolution of the Board of Directors of the Company for opening the Account and authorization for its operation duly certified by the Chairmen/Managing Director of the Company.
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Copy of Trade License.
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Two recent passport size photograph of each Signatory duly attested by the Introducer.
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Copy of the passport of each Signatory, if available or Commission’s/Chairman’s Certificate or Letter of Introduction by a person accepted to the Bank.
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TIN Certificate.
4.2.3 Mudaraba Saving Deposit (MSD): The word ‘Mudaraba’ derived from the Arabic word ‘Darb’ / ‘Darbun’ which means movement to earn Rahmat (Munafa) of Allah. Mudaraba is a from of partnership where one of the contracting parties called the ‘Shaheb - al – Mal’ /’Rabbul – Mal’ who provide and act as sleeping partner which other party called the ‘Mudarib’ who manage / use the fund efficiently to earn maximum profit. Mudaraba saving Deposit (MSD) is open by the lower and middle people who wish to sve a part of their incomes to meet their future need intend to earn an income from their savings. It aims at encouraging saving of non-trading persons(s), institution(s), society, etc. by depositing small amount of money in the bank.
a) Restriction on withdrawals and deposit:
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The number of withdrawals over a period of time is limited. Two withdrawals per week are permitted. But more than that no interest will be paid on rest that month. The total amount of one or more withdrawal on any date should not exceed 25% of the in the accounts unless 7 (seven) days advance notice is given. The customer may deposit any amount in the saving bank account subject to a minimum of TK.2000/- in the account.
• •
b) Payment of Profit: Bangshal branch of Shahjalal Islami Bank Limited gave 5.5% profit at 2008 on Mudaraba Saving Deposit.
c) Opening a saving account: For Operating a Mudaraba Saving Deposit account at Bangshal Branch following documentation are required: • Two copies of passport size photographs. • Introductory reference. • Commissioner / Chairman Certificate / Voter ID card / Passport / Driving License. • Minimum 2000 Tk for deposit.
d) General Precautions of opening an MSD Account: After opening an account and before issuing a Cheque book the authorized officer
of the
branch cheeks the account operating form and verifies the following information, which were given by the customers. •
Name of the account holder
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Photos of the account holder.
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Date of opening.
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Types of account.
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Present and permanent address.
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Name of the nominee and their address.
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Initial deposit.
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Specimen signature in the form in the “Specimen signature card”.
4.2.4 Mudaraba Short Notice Deposit (MSND):
As per rule of SJIBL Bangshal Branch also receives term deposit from the clients. The SND account is different from the interest – based banks. It is also a Time Deposit account. The formalities for opening of this account are similar to those required for Al – Wadiah Current Account. The only difference is this that seven (7) days notice is required for withdrawal of any sum and profit is paid. If the withdrawal on demand is desired, it may be paid subject to the for – feature of profit for the period of notice.
4.3 Different Types of Scheme: The Sahjalal Islami Bank Limited, Bangshal branch offers some deposit Scheme, which are the really profitable for bank and customers. The Bank maintains Shariah – based transaction with their customer by different Scheme those are: 1. Monthly Deposit Scheme (MDS). 2. Mudarah Term Deposit Receipt (MTDR). 3. Monthly Income Scheme (MIS). 4. Double Benefit Deposit Scheme (DPDS). 5. Millionare Scheme (MS). 6. Hajj Scheme (MS).
4.3.1 Monthly Deposit Scheme (MDS); Monthly Deposit Scheme also is a one type of fixed account shall be open for fixed period, this account Bank collects specific amount of money for specific time period. Rules and regulation of Monthly Deposit Scheme in SJIBL: (a)
Islami Sharia Mudaraba Principle’s depend on Bank collects TK. 100.00, TK.
250.00, TK. 500.00, TK. 1000.00, TK. 2000.00, TK. 5000.00, TK. 10,000.00, TK. 25,000.00 and TK. 50,000.00 for monthly installment. (b)
This account open for 5 years, 8 years and 10 years. After maturities depend on
waiting including profit depositors will receive: Month Installment
TK. 100
TK. 250
TK. 500
TK. 1,000
TK. 2,000
TK. 5,000
TK. 10,000
TK. 25,000
TK. 50,000
5 Years
8,025
20,065
40,125
80,250
1,60,500
4,01,250
8,02,500
20,06,250
40,12,500
8 Years
15,500
38,750
77,500
1,55,000
3,10,000
7,75,000
15,50,000
38,75,000
77,50,000
10 Years
22,200
55,500
1,11,000
2,22,000
4,44,000
11,10,000
22,20,000
55,50,000
1,11,00,000
Maturity
Fig: 4.2: Monthly Deposit Scheme of SJIBL at Bangshal Branch.
Source: Office Documents.
c) •
Process of giving installment: Within 25th day of the per month pay to installment by Cash/Cheque/giving standing order from deposit account. If fail to pay the installment within fixed time period, then Bank charge a late fee.
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If pay the installment by Cheque, then clearing related all process must be finish 25th
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day of the month.
Depositor has to pay installment from ACD/MSD/MSND accounts by fixed standing order. In that case, TK. 50.00 one time has to pay for fixed standing order and TK. 5.00 for per standing order.
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Bank also receive advance installment. But Bank does not provide any extra profit.
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If fail to pay installment within 25 days, then have to pay late fees (fine) is TK. 25.00. This late fees will have to pay with next month installment.
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Same Bank depositors have to open more than one Monthly Deposit Scheme.
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Before Maturity any time depositors stop this account give to TK. 100.00 closing charge.
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Before 1 year stop to Monthly Deposit Scheme Bank does not provide any profit. But after 1 year before maturity to stop Monthly Deposite Scheme Bank provide profit MSD rate.
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After 2 years this account holder gets 80% investment facilities against this deposited money. For this investment depositors have to pay profit by determine by Bank Rate.
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From this deposit scheme Bank cut VAT by Government direction.
Provisional Profit Rate of Monthly Deposit Scheme in Shahjalal Islami Bank Limited: Scheme Monthly Deposit Scheme (DPS)
Period
Profit Rate
5 Years
8.05%
8 Years
8.20%
10 Years
8.25%
Fig:4.3: Provisional Profit Rate of Monthly Deposit Scheme of SJIBL at Bangshal Branch. Source: Office Documents.
4.3.2
Mudarah Term Deposit Receipt (MTDR).
Mudaraba Term Deposit Reserve is a fixed deposit account shall be open for a fixed period, varying from one month to twelve months and above and are payable at fixed date of maturity. In SJBIL following rules must be follow: •
Islami Soria Mudaraba Principle’s depend on Bank collects at least TK. 10,000.00 in this
•
account and gives a un-transfer money receipt.
This account open for 3 months, 6 months, 12 months or above period. Only Bank determines the profit rate on deposited Mudaraba Cash.
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If withdraw money before one month Bank does not provide any profit on this deposited money. After one month but before maturity period if withdraw money then Bank provide profit by the MSD rate.
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After maturity within 10 (ten) day if depositor does not withdraw money then Bank automatically renew this account same time period.
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Mortgage deposit receipt against depositors can take 80% investment facilities. But depositors have to pay profit against this investment.
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From this deposit account Bank cut VAT by Government direction.
Provisional Profit Rate of MTDR Account in Shahjalal Islami Bank Limited at Bangshal Branch:
Scheme Mudaraba Term Deposit Reserve (FDR)
Period
Profit Rate
03 Month
8.00%
06 Month
8.00%
01 Year (General)
8.00%
Fig:4.4: Provisional Profit Rate of MTDR Account of SJIBL at Bangshal Branch. Source: Office Documents.
4.3.3
Monthly Income Scheme (MIS).
Monthly Income Scheme also is a one type of fixed account shall be open for fixed period, this account open for minimum 3 years and will be provided monthly TK. 1000.00 per lac. Rules and regulation of Monthly Income Scheme in SJIBL: •
Islami Sharia Mudaraba Principle’s depend on Bank collects at least TK. 50,000.00 and
multiple any amount of money in this account and gives a un-
transfer money receipt •
This account collects money for minimum 3 years.
After maturity principle
amount will be back. •
Per TK. 50,000.00 deposit against Bank provide TK. 500.00 per month. Depend on
•
deposit profit change multiply.
Clients open this account any day of the month. Those day clients open this account, after 1 month same branch depositors ACD/MSD account transfer the monthly profit.
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That deposited money Bank accumulates others deposited money, then invest it suitable profitable sector follow by Islami Shariah.
•
It is impossible to break deposit scheme before maturity. If accidentally break this deposit
scheme after 1 year, then Bank provide profit MSD rate. Before 1
year break this deposit scheme Bank does not provide any profit. •
From this deposit scheme Bank cut VAT by Government direction.
Provisional Profit Rate of Monthly Income Scheme in Shahjalal Islami Bank Limited at Bangshal Branch: Scheme Monthly Income Scheme
Period
Profit Rate
(Minimum 3 years & will be provided TK. 1000.00 per lac)
8.50%
Fig:4.5: Provisional Profit Rate of Monthly Income Scheme of SJIBL at Bangshal Branch. Source: Office Documents.
4.3.4 Double Benefit Deposit Scheme (DPDS). Double Profit and Multiple Benefit Mudaraba Saving Scheme also is a one type of fixed account shall be open for fixed period; this account is 6 years and 9 years. After 6 years deposited money will be double and 9.5 years deposited money will be triple.
Rules and regulation of Double Profit and Multiple Benefit Mudaraba Saving Scheme in SJIBL: •
Islami Soria Mudaraba Principle’s depend on Bank collects at least TK. 10,000.00 in this account and gives a un-transfer money receipt.
•
This account opens for 6 years and 8 years. Only Bank determines the profit rate on deposited Mudaraba Cash.
•
If withdraw money before 1(one) years Bank does not provide any profit on this deposited money. After 1(one) month but before maturity period if withdraw money then Bank
•
provide profit by the MSD rate.
Mortgage deposit receipt against depositors can take 80% investment facilities. But depositors have to pay profit against this investment.
•
From this deposit scheme Bank cut VAT by Government direction.
Provisional Profit Rate of Double/Triple Benefit Scheme Account in Shahjalal Islami Bank Limited: Scheme
Period
Profit Rate
Double Benefit Scheme
Yearly rate:8.50%
8.20%
Triple Benefit Scheme
Yearly rate: 8.64%
8.32%
Fig:4.6: Provisional Profit Rate of Double/Triple Benefit Scheme of SJIBL at Bangshal Branch. Source: Office Documents.
4.3.5 Millionare Scheme (MS). Millionaire Scheme also is a one type of fixed account shall be open for fixed period, varying from 12 years, 15 years, 20 years, 25 years and are payable fixed date of maturity. Normally after fixed time of period Bank will pay always TK. 10,00,000.00. Rules and regulation of Millionaire scheme in SJIBL: a)
Islami Soria Mudaraba Principle’s depend on Bank open this account. Deposited
money
Bank mix with other deposited scheme then invest it suitable profitable
sector by Islami b)
Soria.
This account open for 12 years, 15 years, 20 years, 25 years. Depositors have to
deposit money monthly for fixed period then Bank provides after maturity TK
10,00,000.00 including profit. Mention that, after open an account depositor can’t change the maturity periods and installment amounts.
Provisional Profit Rate of Millionaire Scheme Account in Shahjalal Islami Bank Limited: Scheme Millionaire Scheme
Period
Profit
12 Years (Installment TK. 4060.00 per month)
8.25%
15 Years (Installment TK. 2770.00 per month)
8.40%
20 Years (Installment TK. 1585.00 per month)
8.50%
25 Years (Installment TK. 950.00 per month)
8.60%
Fig:4.7: Provisional Profit Rate of Millionaire Scheme Account of SJIBL at Bangshal Branch. Source: Office Documents.
4.3.6 Hajj Scheme: Hajj is compulsory for all who have the ability to attain; at that cause Hajj is important for all Muslim. The Muslim people, but many people have the interest but they have no financial ability. Many people achieve the financial ability but at that time they are physically week. This is why SJIBL created this scheme.
a) Criteria for this scheme: •
Must be age above 18.
•
Account holder must be citizen of the Bangladesh.
•
Account holder must be need the attested photo with introducer.
•
Gradient cam maintains their account for the child.
b) Duration of the scheme: •
This account duration time is 1 year to 25 year.
•
12 monthly schemes within one year.
c) Amount of scheme: Duration (Year) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Monthly scheme 10200 5100 3325 2450 1925 1570 1310 1120 965 840 740 655 585 520 465 420 380 340 310 280 255
Given after duration 129950 137465 142350 148240 154475 160570 166170 172780 178390 183950 190230 196210 202970 207970 213370 220375 227300 231240 239080 244600 251790
22 230 23 210 24 190 25 175 Fig: 4.8: Account Scheme of SJIBL at Bangshal Branch. Source: Office Documents.
256315 263780 268700 278350
4.4 New deposit schemes of Bangshal Branch of SJIBL. •
Mudaraba Lakphoti Deposit Scheme.
•
Mudaraba Education Deposit Scheme.
•
Mudaraba Marriage Deposit Scheme.
•
Mudaraba Mohor Deposit Scheme
•
Special MTDR Scheme.
4.5 Provision profit Rate of deposit of SJIBL Bangshal Branch (year 2008) SL
Deposit Product
1.
Mudaraba Saving
Previous Provisional Rate 4.50%
Revised Provisional Rate 4.50%
Remarks No Change
2. 3.
4. a)
b)
Deposit Mudaraba Short Notice Deposit Mudaraba TermDeposit c) 3 Months d) 6 Months e) 1 years Mudaraba Scheme Deposit Monthly Income Scheme i) 3 years Multiple Benefit Scheme: i) Double Benefit ii) Triple Benefit
c)
SL
d)
Millionaire Scheme i) 12 Years ( TK4060/= per month) ii) 15 Years ( TK 2770/= per month) iii) 20 Years (TK 1585/= per month) iv) 25 Year ( TK 950/= per month) Deposit Product
3.50%
3.50%
8.00% 8.00% 8.00%
8.00% 8.00% 8.00%
No Change
No Change 8.10% ( TK 675 per month per lac)
8.10% ( TK 675 per month per lac)
8.20% ( Will 8.20% ( Will be doubled in 8 be doubled in 8 & 6 years) & 6 years) 8.32 ( Will be 8.32 ( Will be triple in 13 triple in 13 years & 3 years & 3 month) month) No Change 8.25%
8.25%
8.40%
8.40%
8.50%
8.50%
8.60%
8.60%
Previous Provisional Rate
Revised Provisional Rate
Monthly Deposit Scheme
Remarks
No Change
i) 5 Years
8.05%
8.05%
ii) 10 Years
8.20%
8.20%
iii) 15 Years
8.25%
8.25%
e)
Hajj Scheme i) Up to 10 years
No Change 8.25%
8.25%
Fig: 4.9 Provision profit Rate of deposit of SJIBL Bangshal Branch (year 2008) Source: Office Documents.
4.6 Cheque Book Issue: Cheque Book is a material to withdraw money from the bank. It is a very convenient way to transact money from one place to another without any accident. If any one opens an account then she / he will apply for a Cheque book on requisition slip. After verifying the signature of account holder by the officer issues Cheque. Then we will assign numbers to the leaves of the Cheque book and account number in the register book. The account number and branch seal will also be written on every leaf of the Cheque book. Two officers initialize the account number and leaf numbers the issuing officer will also check the register book and initializes it also. Then the Cheque book is delivered to the party after taking the signature on the register book from the party.
4.6.1 Return of Cheque: A Cheque may be returned by the following reason: • • • • • • • • •
Account Closed. Insufficient funds. Payment stopped. Refer to drawer. Drawn against uncollected funds. Alternation requires draw’s full signature. Cheque postdated. Date incomplete / missing. Clearing house stamp missing.
4.7 Pay Order (OP): This is very important instrument of the Bank. Pay Order give the payee the right to claim payment from the issuing bank Unlike Cheque, there is no possibility of dishonoring pay order because before issuing pay order banks takes out the money of the pay order in advance. Pay Order cannot be endorsed or crossed and so it is not negotiable instrument. Pay Order commission is like this:
Service Payment Order (PO)
Particular Issuance
Cancellation
Issuance of Duplication
Rate/Charge effective from 01/05/2005
Upto TK. 1.00 Lac
TK. 50.00
Upto TK. 5.00 Lac
TK. 100.00
Above TK. 5.00 Lac
TK 150.00
Upto TK. 1.00
TK. 25.00
Upto TK. 5.00 Lac
TK. 50.00
Above TK. 5.00 Lac
TK. 100.00
Upto TK. 1.00
TK. 100.00
Upto TK. 5.00 Lac
TK. 150.00
Above TK. 5.00 Lac
TK. 200.00
Fig: 4.10: Pay order commission of SJIBL at Bangshal Branch. .
4.8 Activities of Cash Department: Cash department is the most vital department of a bank and it is call blood of a bank. It is a platform to communicate with customers. Cash department receives and pays cash directly. In the cash department there are following register: •
Vault register.
•
Cash receive register.
•
Cash payment register.
•
Cash balance register.
•
Rough cash balance book.
•
Cash remittance register.
•
Key register.
•
Cash position memo.
There is a procedure of cash in vase-out from the vault. Also a systematic procedure is maintained for receiving cash through different vouchers and payment against different cheques and vouchers.
4.8.1 Cash Receive: Cash is the life of a bank. Different types of from are use for cash deposits for different types of accounts. Cash may be received by following ways: •
Current of saving account pay-in-slip.
•
Credit voucher.
•
Different types of instrument remittance (TT, DD, PO etc.) are received by respective forms.
•
Bills like National Life Insurance Co. Ltd.
•
Share collection.
•
Different types of scheme.
4.8.2 Cash Payment Cash is paid in payment counter against the following instrument: •
Cheques.
•
Cash debit voucher.
•
Pay-in-slip.
•
Pay Order, DD etc.
•
Bank’s expense also paid to outsider through cash debit voucher.
4.8.3 Cash Balance: At the end of the transaction: •
Sum of total received.
•
Sum up total payment.
•
Total receiving + Opening balance – Total payment = Closing balance for that day and opening balance for the next day.
•
Check it with computer sheet.
•
Counting cash.
•
Entry the cash balance register.
4.9 Sorting and Stitching: • Sorting: At the end of the day, the amount of cash has to be sorted out in order to identify the different types of notes, say-500, 100, 50, and 20,10,5 and so on. Hundred pieces of each type note create a packet and ten packets make a bundle. In this way, the cash is actually sorted out.
• Stitching. After sorting out the cash, packets are along with along with a slip bearing the name of the bank and branch total number of notes and the signature of the cash-in-charge. Two round seals are given at both sides of the packet.
Shahjalal Islami Bank Limited
4.10 Comparability Analysis Islami Bank L I of Shahjalal M I T Limited E at Bangshal D BANGSHAL BRANCH, DHAKA Branch. COMMAND AREA OF OUR BRANCH IBBL-1994
NBL-1984
IFIC-1989
F. S-2001
Premier-2005
NCCBL-1994
SJIBL-2005
ISLAMI ISLAMIBANK BANK BANGLADESH BANGLADESHLTD. LTD. BANGSHAL BANGSHALBRANCH BRANCH
NATIONAL NATIONALBANK BANKLTD. LTD. BANGSHAL BANGSHALBRANCH BRANCH
IFIC IFICBANK BANKLTD. LTD. BANGSHAL BANGSHALBRANCH BRANCH
FIRST FIRST SECURITY SECURITY BANK BANKLTD. LTD. BANGSHAL BANGSHALBRANCH BRANCH
PREMIER PREMIERBANK BANKLTD. LTD. BANGSHAL BANGSHALBRANCH BRANCH
3 YEARS OLD
14 YEARS OLD
3 YEARS OLD
7 YEARS OLD
19 YEARS OLD
24 YEARS OLD
14 YEARS OLD
5 I
10 I
15 I
YEARS
20 I
25 I
Bank =
NCC SJIBL NCCBANK BANKLTD. LTD. SJIBL BANGSHAL BANGSHALBRANCH BRANCH BANGSHAL BANGSHALBRANCH BRANCH
Fig:4.11. Comparability Analysis of SJIBL at Bangshal Branch. Source: Office File Documents.
4.11 Yearly Deposit Target & Achievement of SJIBL at Bangshal Branch.
Shahjalal Islami Bank Limited
L
I M I T BANGSHAL BRANCH, DHAKA
E
Yearly Deposit Target & Achievement (Tk. in Crore)
Year
2006
2007
2008
Target
30.00
75.00
110.00
Achievement
39.27
70.38
110.47
2006
Achieved 70.38
20 --
Targe75.00
40 --
Achieved 38.98
60 --
Target 30.00
Target & Achievement
80 --
Achieved 110.47
Target 110.00
100 --
2007 Year
2008
D
Fig:4.12 Yearly Deposit Target & Achievement of SJIBL at Bangshal Branch Source: Office Documents.
4.12 Yearly Investment Target & Achievement of SJIBL at Bangshal Branch.
L
Shahjalal Islami Bank Limited I M I T BANGSHAL BRANCH, DHAKA
E
Yearly Investment Target & Achievement (Tk. in Crore)
Year
2006
2007
2008
Target
35.00
50.00
70.00
Achievement
10.45
42.54
115.67
20 --
2006
Achieved 115.67
Achieved 42.54
2007 Year
Target 70.00
40 --
Achieved 10.45
60 --
Target 50.00
80 -Target 35.00
Target & Achievement
100 --
2008
Fig: 4.13 Yearly Investment Target & Achievement of SJIBL at Bangshal Branch. Source: Office Documents.
4.13 SWOT Analysis of SJIBL, Bangshal Branch: SWOT reveals full meaning of the word as Strength, Weakness, Opportunities and Threats.
D
4.13.1 Strengths: SJIBL Bangshal Breanch has a number of strengths include: • • • • • •
Fully computerized accounts maintenance. Well decorated and air conditioned facilities. Money counting machine for making cash transaction easy and prompt. In SJIBL Bank SWIFT is being used for foreign trade related operations like letter of credit, fund transfer, guarantee, etc with optimum security. SJIBL has a well-diversified pool of human resources, which is composed of people with high academic background. They are always devoted themselves to works for better customer service. SJIBL provide ATM debit card and nonstop banking facilities.
4.13.2 Weaknesses: SJIBL Bangshal Branch has some weaknesses which include: • • • • • •
Dependent on fixed deposits. Absence of an upgraded website. Limited number of employees. Sometimes it seemed to me that charges and other fees are very high compared to other private banks. It frequently creates customer Bangshal branch. SJIBL has no ATM booth in Bangshal Branch. SJIBL has no SME Center in Bangshal Branch.
4.13.3 Opportunities: Opportunities of the SJIBL Bangshal Branch which include: • • • •
Regulatory environment favoring private sector development. SME business. Credit card business. SJIBL Bangshal Branch can introduce mare innovative and modern customer service.
4.13.4 Threats:
Threats of the SJIBL Bangshal Branch which include: • • •
Common attitude of Bangladeshi clients to default. Number of potential competitors in those areas increasing day by day. Competitors in those areas can capture market by offering similar products.
• •
Market pressure for lowering the interest rate. Bangladesh bank sometimes forced some rules and regulation which is not sustainable for SJIBL Bangshal Branch.
Recommendation: •
The branch has to emphasis more on marketing to have more clients.
•
Bangshal Branch must have to requisite chairs.
•
Should increase the number of printers at the branch
•
SJIBL online service should be fast and accurate.
•
Branch staffs should be more cooperative.
•
The website of SJIBL is not good enough. Must of the pages are under construction. The pages should be constructed as soon as possible.
•
Increase the SJIBL ATM booths.
•
Cash department of Bangshal branch should be more secure.
Conclusion: Today’s business is very competitive and complex. To survive in the relate sector the organization need competitive people and has to take some effective policy. Every country must have a plan for important role in economic activities. Bangladesh is no exception of that. Commercial Banks’ financial development and economic developments are closely related. That’s why the private commercial banks; are playing significant role in this regard. Shahjalal Islami Bank Limited is one of the best banks in respect of service, profitability and strength among the private commercial banks; in our country and also to play a catalyst role in the formation of capital market. National Credit and commerce Bank Limited bears a unique history of its own. The bank has set up a new standard in financing in the Industrial, Trade and Foreign Exchange Business. Its various deposit and credit products have also attracted the clients both corporate and individuals who feel comfort in doing business with the bank. Shahjalal Islami Bank Limited is now been called a modern bank that undertakes all its operations at an international standard. Over the years, Shahjalal Islami Bank Limited has built itself as one of the pillars of Bangladesh’s financial sector and is playing a pivotal role in extending the role of the private sector of the economy.
Reference: Books Kotler.
P.K.L,
Marketing
Management.11 th
Edition,
Prentice
Hall,
Inc,
New
Jersy. (1999). Kotler. P & Armstrong, Principle of Marketing, 11 th dition, peurson education, Inc, Singapore (61). (2003). Report /Brochure •
Brochures of Shahjalal Islami Bank Limited of different years.
•
General banking guide book, Published by Shahjalal Islami Bank Ltd, 2007.
•
Hussain Muhammad Mubarak, General Banking – Principles and Application, Soptopodi Publication, 2002.
•
Prospectus of SJIBL, 2008.
•
Training Manuels of General banking, Published by Shajalal Islami Bank Ltd, 2008.
Websites •
Shajalal Islami Bank Limited (2009), All about SJIBL, Retrieved as December 25, 2009, from http:// shahjalalbank.com.bd. Time-10am to 01pm.
•
Shajalal Islami Bank Limited (2009), All about SJIBL, Retrieved as January 05, 2010, from http:// shahjalalbank.com.bd . Time-6 pm to 10 pm.
•
Shahjalal Islami Bank Limited (2009), Annual report 2008-2009, Shahjalal Islami Bank Limited, Dhaka, Banngladesh.
Appendix: Account Related Service: Services Al-Wadiah Current (ACD A/C)
Particulars
Rate/Charges
Minimum Balance Requires
TK. 5000.00
Service Charge
TK. 200.00
Closing of Account
TK. 200.00
Cheque Book Issue
Free
Issue of Cheque Book against lost Cheque Book
Regular Statements
TK. 50.00
Stop Payment of Cheques
TK. 50.00
Standing Instructions
TK. 50.00
All types of Certificates
TK. 100.00 At actual
Minimum Balance Requires
TK. 2000.00
Service Charge
TK. 200.00
Closing of Account
TK. 200.00
Cheque Book Issue
Free
Issue of Cheque Book against lost Cheque Book
Regular Statements
TK. 25.00 Free
Duplicate Statements
TK. 50.00
Stop Payment of Cheques
TK. 50.00
Standing Instructions
TK. 50.00
All types of Certificates
TK. 100.00
Specially printed Cheque Books Mudaraba Short Notice (MSND A/C)
Free
Duplicate Statements
Specially printed Cheque Books Mudaraba Saving (MSD A/C)
TK. 25.00
At actual
Minimum Balance Requires
TK. 5000.00
Service Charge
TK. 200.00
Closing of Account
TK. 200.00
Cheque Book Issue
Free
Issue of Cheque Book against lost Cheque Book
Regular Statements
TK. 25.00 Free
Duplicate Statements
TK. 50.00
Stop Payment of Cheques
TK. 50.00
Standing Instructions
TK. 50.00
All types of Certificates
TK. 100.00
Specially printed Cheque Books
At actual