1

Chapter-1 will cover the followings: 1.1 Prelude 1.2 Background of the Project: 1.3 Nature of the Problem/Statement of the Problem 1.4 Objectives/Purpose of the Study: 1.5 Justification/Rationale of the Study: 1.6 Scope of the Study: 1.7 Limitation of the Study: 1.8 Working (Practical) Definitions of the Concepts, Assumptions, Limitations & Delimitations:

Chapter-1 Introduction
1.1 Prelude In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating Islamic banking system. For them, it was competence, excellence and consistent delivery of reliable service with superior value products based on Islamic Shariah. Lending money is the major part of a bank. The report basically focuses on General Banking & Credit Management of Shahjalal Islami Bank Limited (SJIBL), Gulshan South Avenue Branch. It has been converted to commercial operation in accordance with interest free Islamic Shariah based commercial bank on that day. More over this report will help me to understand the culture of work in a bank. I have mentioned all the things in the report whatever I have learned and have known from my thesis in the Shahjalal Islami Bank Limited, Gulshan South Branch. 1.2 Background of the Project: I have to prepare a report on the "General Banking of Shahjalal Islami Bank Ltd." for the partial fulfillment of the project report of Bachelor of Business Administration Program. In this report I will include function of General Banking, which will easily understandable to the readers. Bank is the heart of the economics and banking is the blood circulation of countrys economic growth. Banks perform a significant role to serve the needs of the society in different sectors, such as: capital formation, large scale of production, industrialization, growth of trade and commerce etc. and banks are contributing a lot of aspect. Shahjalal Islami Bank Bangladesh Limited has already emerged as one of the world wide recognized banks due to its retail product management which are part of general banking according to the principles of Islamic Shariah. Islamic banking is a new diminution of interest free banking where Riba or interest is strictly prohibited. So I have tried to represent their performance and problems and prospects on the ground of general banking. 1.3 Nature of the Problem/Statement of the Problem: Bangladesh is a growing country. Therefore, it needs a healthy economic improvement to reach the shore of utmost development according to the countrys development plan. To meet the objectives, the main fuel is money/equity support, which maximum portion comes from Banking Sector. Banking sectors comprised with two types of Banks, one is private commercial banks & another is govt. banks like Sonali Bank Ltd., Rupapli Bank Ltd. Janata Bank Ltd. etc., among them private commercial banks are the market dominators in the whole money/capital market. Shahjalal Islami

Bank Limited (SJIBL) is one of the private commercial banks of Bangladesh, which has remarkable contribution to develop the financial sector of the Country form its inception as a scheduled commercial bank of Bangladesh Bank (Central Bank). Therefore, we can say SJIBL has so many opportunites to flourish its banking business by providing competitive banking service to its customers for the economic development of the country as a whole. But SJIBL has some limitations to accomplish the venture due to some unavoidable circumstances, such as, lack of expertise, poor money market of the country, lack of remittance from abroad, poor & hazy rules of IMF & Central Bank of Bangladesh, lack of fund of SJIBL to enrich its loan sector etc. In the circumstances stated above, I have chosen General Banking which is most important to enrich its banking business. Though it has a most important & profit generating function, like foreign exchange. But, I want to focus on General Banking & Credit Management considering more common function of a bank. Because, SJIBL is a new & growing bank and it has so many opportunities to climb the ladder of success by improving its General Banking Management services. SJIBL generates its maximum profit from Credit (Loan) Management services and attracts deposits to enrich its liquidity through General Banking services. 1.4 Objectives/Purpose of the Study: The main objective of the report is to fulfill the requirement of MBA Program. For this I had to attach with an organization and I chose Shahjalal Islami Bank Bangladesh Limited (SJIBL). For this I have some practical job related experience with my academic knowledge. The objective of the study may be viewed as: Broad objective Specific objective

1.4.1. Broad Objective: The general objective of this report is to complete the project reportt. As per requirement of MBA program of Prime University, one student needs to work in a business organization for three months to acquire practical knowledge about actual Business operation. 1.4.2. Specific Objective: To present an overview of Shahjalal Islami Bank Limited. A general description of the banking activities of Shahjalal Islami Bank Limited. To submit a brief description about the General Banking .

 To suggest remedial measurement for the improvement of the whole process of the General Banking . 1.5 Justification/Rationale of the Study: Shahjalal Islami Bank Limited (SJIBL) is a growing scheduled commercial bank of Bangladesh Bank (Central Bank). General Banking is the most popular & common functions of any bank & bank earns its maximum profit from the two types of services. Therefore, any lacking/limitation may have in these sectors & bank may earn more by improving the services of the said two sectors. On the above ground it can be justified to perform an project report on General Banking & Credit Management functions of a private commercial bank, if one intends or assigned by the authority. 1.6 Scope of the Study: The report will illustrate a basic reflection about the Shahjalal Islami Bank Limited present condition of the bank in private banking sector, various schemes of SJIBL, interest rate and activities.Since I am working in the Shahjalal Islami Bank Limited, Gulshan,South-Avenue Branch, I get the opportunity to gain knowledge of different part of banking system. 1.7 Limitation of the Study: On the way of my study in Shahjalal Islami Bank Limited, I have faced the following problems; this may be termed as the limitations of the study. The major limitations of this study are given as follows: i. There were some restrictions to have access to the information confidential by I worked only on Gulshan,South-Avenue branch of Shahjalal Islami Bank

concern authority.

ii.

Limited, so I gather knowledge about activities of Head Office only by reading/hearing not in practical way. iii. iv. report. v. The employees of the bank are so much busy so they cannot provide me to give information about the General Banking Department such as different types of loans and advances. Sufficient records, publications regarding customer service were not available Three-month is not sufficient time to gain practical knowledge and prepare a as per requirement.

I have no proper experience to do this kind of report. So, inexperience creates obstacle to follow the systematic and logical research methodology

1.8 Working (Practical) Definitions of the Concepts, Assumptions, Limitations & Delimitations: Islami Bank is a financial institution whose status, rules and procedures expressly state its commitment to the principle of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operation. For millions of Muslims, banks were institution to be avoided. Islam is a religion, which keeps Believers from the tellers window. Their Islamic beliefs prevent them from dealings that involve usury or interest (Riba). Yet Muslim needs banking services as much as anyone and for many purposes: to finance new business ventures, to buy a house, to facilitate capital Investment to undertake trading activities and to offer safe place for saving. Muslims are not averse to legitimate profit as Islam encourages people to use money in Islamic ally legitimate ventures not just to keep their funds idle. However in this fast moving world more than 1400 years after the Prophet (S.A.W) can Muslims find room for the principles of their religion? The answer comes with the fact that a global network of Islamic banks investment house and other financial institution have started to take shape based on the principals of Islamic finance laid down in the Quran and the Prophets traditions some 14 centuries ago. Islamic banking based on the Quranic prohibition of changing interest has moved from a theoretical concept to embrace more than 100 banks operating in 40 countries with multibillion-dollar deposits worldwide. Islamic banking is widely regarded as the fastest growing sector in the Middle Eastern financial services market. Exploding onto the financial scene barely thirty years ago an estimated $US100 billion worth of funds are now managed according to Shariah. The best-known feature of Islamic Banking is the prohibition on interest. The Holy Quran forbids the charging of Riba on money lent. It is important to understand certain principles of Islam that underpin Islamic finance. Muslim scholars accepted the word Riba to mean any fixed or guaranteed interest payment on cash advances or on deposits.

Chapter-2

Chapter-2 will cover the followings: 2.1 Methodology: 2.2 Sources of Data 2.2.1 Primary sources: 2.2.2 Secondary sources: 2.3 Method of Data Collection:

Chapter-2
Methodological Aspect
2.1 Methodology: The report would be based on an exploratory research paper. Here, will be discussed the consumer credit schemes and credit appraisal procedure of Shahjalal Islami Bank Limited and critically analyze the appraisal procedure with the standard one. Through out the report, different type of research method shall be used to find out proper and correct information and also provide a good report. For preparing this thesis report I will basically use my experience from different department of the Shahjalal Islami Bank Limited. And I will also use some official documents provided by the officers. For adding more value to this report I will use some books or lecture specialized on the banking sectors. 2.2 Sources of Data 2.2.1 Primary sources: Observation of banking activities. Fruitful conversation with the in-charge of the General Banking department of

Shahjalal Islami Bank Limited, Gulshan,South Avenue branch. Experiences gained during performing duties for General Banking department. Discussion with officials of Shahjalal Islami Bank Limited.

2.2.2 Secondary sources: Annual reports of Shahjalal Islami Bank Limited. Various documents from General Banking department. Loans and Advances Act. Different websites. Internal Records. Brochures of Shahjalal Islami Bank Limited. Different circulars sent by Head Office and Bangladesh Bank.

Other published documents credit Scheme.

2.3 Method of Data Collection: Data will be collected through both primary and secondary sources: Primary Data Collection Method: The primary data will be collected through face to face or telephonic interview with professional bankers, close meeting with high officials & conversation with employees, etc. Secondary Data Collection Method: The secondary data will be collected by going through the published matters:

Internal

Sources:

Companys

Annual

Report,

Company

web

site

(www.shahjalalbank.com.bd), Company Profile, Product Brochure & Flyers, & Prior Research Report etc. .

External Sources: Books, Magazines, Newspapers, Annual Report of Bangladesh Bank and various web sites of islamic shariah based financial organization, etc.

Chapter-3

Chapter-3 will cover the followings: 3.1 Historical Back Ground of SJIBL: 3.2 Vision of SJIBL 3.3 Mission of SJIBL 3.4 Objectives of SJBL 3.5 Organogram of SJBL 3.6 Administration of SJBL 3.7 Scope of SJBL 3.7.1 Products 3.7.2 Services 3.7.3 Finance 3.7.4 Capital

10

Chapter-3 Organizational Profile

3.1 Historical Back Ground of SJIBL: The Shahjalal Islami Bank Limited a Shariah Based Commercial Bank in Bangladesd was incorporated as a public limited company as on 1st day of April 2001 under the Companies Act. 1994. The Bank started its commercial operation on May 10, 2001. The Bank has made a significant progress within a very short period of its existence and occupied an enviable position among its competitors after achieving remarkable success in all areas of business operation. The authorized capital of the Bank is Tk. 4,000 million and Paid up capital of the Bank stood at Tk. 12,246 million as on 31 December 2008. The total equity (capital and reserves) of the Bank as on December 31, 2008 stood at Tk. 4,069 million. With a view to materialize the dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam, a group of highly successful entrepreneurs conceived an idea of floating a commercial bank styled as Shahjalal Islami Bank Limited which is named after the name of the renowned saint Hajrat Shahjalal (R) who dedicated his life for the cause of peace in this world and hereafter and for the service of humanity. The sponsors are reputed personalities in the field of trade & commerce, industry and finance. The Bank is being managed by a group of highly experienced professionals with diversified experience in finance and banking. The Management of the bank constantly looks after customers satisfaction and believes that a satisfied customer is a great Ambassador. The Bank has already achieved tremendous progress within only eight years. The bank has already ranked as one of the quality service providers & is known for its reputation. Offers the full range of banking services for personal and corporate customers, covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. All activities of the Bank including its products and services are mainly for different economic groups of Bangladesh at home & abroad. Bangladeshi expatriates living abroad in different countries form a strong economic group who contribute greatly towards the economic development of the country.

3.2 Vision of SJIBL

11

To be the unique modern Islami Bank in Bangladesh and to make significant contribution to the national economy and enhance customers trust and wealth, quality investment, employees value and rapid growth in shareholders equity. 3.3 Mission of SJIBL To provide quality services to customers To set high standards of integrity To make quality investment To ensure sustainable growth in business To ensure maximization of shareholders wealth To expand the customers innovative service acquiring state-of the-art technology blended with Islamic principles. To ensure human resource development to meet the challenges of the time.

3.4Objectives of SJIBL: The other objectives of Shahjalal Islami Bank include the followings:

To conduct interest-free and welfare oriented banking business based on Islamic Shariah. To implement and materialize the economic and financial principles of Islam in the banking arena. To contribute in sustainable economic growth. To help in poverty alleviation and employment generations. To remain one of the best banks in Bangladesh in terms of profitability and assets quality. To earn and maintain a 'Strong' CAMEL Rating. To introduce fully automated systems through integration of information technology. To ensure an adequate rate of return on investment. To maintain adequate liquidity to meet maturing obligations and commitments. To play a vital role in human development and employment generation. To develop and retain a quality work force through an effective Human Resources Management System. To ensure optimum utilization of all available resources.

12

To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels.

3.5 Organogram of SJBL

Managing Director (MD)

Deputy Managing Director (DMD) Senior Executive Vice President Executive Vice President (EVP) Senior Vice President (SVP) Vice President (VP) Senior Assistant Vice President Assistant Vice President (AVP)

First Assistant Vice President Junior Assistant Vice President Senior Executive Officer (SEO) Executive Officer (EO)

First Executive Officer (FEO) 13

Junior Executive Officer (JEO) Assistant Executive Officer (AEO) Senior Officer (SO) Officer Junior Officer (JO) Trainee Assistant Officer
3.6 Administration of SJIBL The Board of Directors of our Bank consists of reputed Industrialists and Businessmen who are successful in their respective fields headed by Mr. Sajjatuz Jumma, the Chairman of the Board who is an eminent Industrialist & reputed businessman in Bangladesh and current Chairman of Islamic Banks Consultative Forum (IBCF). The Board generally deals with policy matters relating to management of Business and sets goal for the growth & development of the Bank as a whole, review of the same from time to time and gives necessary guidance to the management. The Bank is managed by a Team of professional Executives and Officials having profound banking knowledge & expertise in different areas of management and operation of Banks. The Team is headed by the immediate past Executive President and CEO of Islami Bank Bangladesh Ltd. (IBBL) for about 7 years. During his Incumbency, IBBL attained a remarkable growth & development. Above all, he had the opportunity to hold the position of Chairman of the Board of Directors of Islami General Insurance Company & then he Joined Shahjalal Islami Bank Ltd on February 25, 2004 as the Managing Director and Chief Executive Officer (CEO) to enrich Islamic Banking methodology in the Country. 3.7 Scope of SJIBL 3.7.1 Products The product lists of Shahjalal Islami Bank Limited are as follows: Deposit Schemes:

Millionaire Scheme

14

Double the Money Scheme Monthly Income Scheme Monthly Deposit Scheme Hajj Scheme Mudaraba Bibaho Scheme (New Product) Mudaraba Cash Waqf Deposit Scheme (New Product) Special Term Deposit Scheme (New Product) Mudaraba Mohor Deposit Scheme (New Product) Mudaraba Shikhkha Deposit Scheme (New Product) Mudaraba Housing Deposit Scheme Mudaraba Lakhopoti Deposit Scheme Mudaraba Small Business Deposit Scheme

Investment Schemes:

Doctors Investment Scheme Education Investment Scheme Executives Investment Scheme Marriage Investment Scheme Overseas Investment Scheme Household Durable Scheme Small Business Investment Scheme Housing Investment Scheme Small Enterpreneurs Investment program Medium Enterpreneurs Investment program Rural Investment Program (RIP) Car Investment Scheme CNG Conversion Investment Scheme

The products list of SJIBL have discussed in detail at the Chapter-4: Learning & observations [4.16.7 of the Chapter-4].

15

3.7.2 Services Shahjalal Islami Bank Limited offers the full range of banking services for personal and corporate customers, covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, real estate to software and is backed by the latest technology. The Bank has a strong Shariah Council consisting of prominent Ulama, Fuquah & Economists who meet periodically to confer decisions on different Shariah issues relating to Banking Operation & to address them and to give necessary guidance to the management on Shariah Principle. Since inception, Bank has been performing in all the sectors i.e. general Banking, Remittance, Import, Export and Investment. All our branches are fully computerized having on line Banking facility for the clients. The services of ShahJalal Islami Bank Limited can be pointed out as follows: Online services Automated Accounting Integrated System Signature Verification Any Branch Banking ATM Services POS Services SMS Push Pull Services Other Delivery Channel Services (to be implemented)

The above stated services of SJIBL have discussed in detail at the Chapter-4: Learning & observations [4.16.8 of the Chapter-4]. 3.7.3 Finance

16

To provide interest-free Banking Shahjalal Islami Bank has adopted the following modes of investment: 1. Musharaka (equity participation on the basis of sharing profit and loss) 2. Mudaraba (sharing of profit and loss in business where one of the partners provides and management and other partner provides capital remaining inactive) 3. Murabaha (buying and selling of commodities goods etc. with profit) 4. Bai-Muajjal (credit sale with profit) 5. Ijara (leasing for rent) 6. Hire purchase or Shirkatul Melk 7. Bi-Salam (purchasing of agricultural products while in production and providing advance oney to the producers) 8. Istisna (purchasing of industrial products while in production and providing advance money to the producers). 9. Quard. The above stated modes of investment have discussed in detail at the Chapter-4: Learning & observations [4.15 of the Chapter-4]. expertise

3.7.4 Capital The authorized capital of the Shahjalal Islami Bank Limited (SJIBL) is Tk. 4,000 million and Paid up capital of the Bank stood at Tk. 12,246 million as on 31 December 2008. The total equity (capital and reserves) of the Bank as on December 31, 2008 stood at Tk. 4,069 million.

3.7.5 Markets By now, the Bank established correspondent Banking relationship with 18 Banks covering their global network of 385 branches/units of International repute at different important locations. It also established accounting relationship with 10 Banks and maintaining 22 NOSTRO Accounts in 8 (eight) major Currencies at different convenient locations.

17

Chapter-4

Chapter-4 will cover the followings: 4.1 Shahjalal Islami Bank at a Glance: 4.2 Strategies of SJIBL: 4.3 Departments of SJIBL 4.4 Branches of SJIBL: 4.5 Activities of the SJIBL College Gate Branch

18

Chapter-4 Learning/Observations
4.1 Shahjalal Islami Bank at a Glance: With a view to materialize the dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam, a group of highly successful entrepreneurs conceived an idea of floating a commercial bank styled as Shahjalal Islami Bank Limited which is named after the name of the renowned saint Hajrat Shahjalal (R) who dedicated his life for the cause of peace in this world and hereafter and for the service of humanity. The sponsors are reputed personalities in the field of trade & commerce, industry and finance. Shahjalal Islami Bank Limited offers the full range of banking services for personal and corporate customers, covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, real estate to software and is backed by the latest technology. The Bank is being managed by a group of highly experienced professionals with diversified experience in finance and banking. The Management of the bank constantly looks after customers satisfaction and believes that a satisfied customer is a great Ambassador. The Bank has already achieved tremendous progress within only eight years. The bank has already ranked as one of the quality service providers & is known for its reputation. Offers the full range of banking services for personal and corporate customers, covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. By now, the Bank established correspondent Banking relationship with 18 Banks covering their global network of 385 branches/units of International repute at different important locations. It also established accounting relationship with 10 Banks and maintaining 22 NOSTRO Accounts in 8 (eight) major Currencies at different convenient locations.

19

The Board of Directors of our Bank consists of reputed Industrialists and Businessmen who are successful in their respective fields headed by Mr. Sajjatuz Jumma, the Chairman of the Board who is an eminent Industrialist & reputed businessman in Bangladesh and current Chairman of Islamic Banks Consultative Forum (IBCF). The Board generally deals with policy matters relating to management of Business and sets goal for the growth & development of the Bank as a whole, review of the same from time to time and gives necessary guidance to the management. The Bank is managed by a Team of professional Executives and Officials having profound banking knowledge & expertise in different areas of management and operation of Banks. The Team is headed by the immediate past Executive President and CEO of Islami Bank Bangladesh Ltd. (IBBL) for about 7 years. During his Incumbency, IBBL attained a remarkable growth & development. Above all, he had the opportunity to hold the position of Chairman of the Board of Directors of Islami General Insurance Company & then he Joined Shahjalal Islami Bank Ltd on February 25, 2004 as the Managing Director and Chief Executive Officer (CEO) to enrich Islamic Banking methodology in the Country. During the short span of time, Shahjalal Islami Bank so far introduced a good number of attractive deposit products to broaden the resource base and also Investment products to deploy the deposit resources so mobilized. Some more schemes covering the deposits, Investments & Services will be introduced gradually in near future suiting to the taste and requirement of the clients. The Bank has a strong Shariah Council consisting of prominent Ulama, Fuquah & Economists who meet periodically to confer decisions on different Shariah issues relating to Banking Operation & to address them and to give necessary guidance to the management on Shariah Principle. Since inception, Bank has been performing in all the sectors i.e. general Banking, Remittance, Import, Export and Investment. All our branches are fully computerized having on line Banking facility for the clients. All activities of the Bank including its products and services are mainly for different economic groups of Bangladesh at home & abroad. Bangladeshi expatriates living abroad in different countries form a strong economic group who contribute greatly towards the economic development of the country. 4.2 Strategies of SJIBL: The strategies of Shahjalal Islami Bank include the followings: To raise capital. To strive for customers best satisfaction and earn their confidence. To manage and operate the Bank in the most effective manner. To identify customers needs and monitor their perception towards meeting those requirements.

20

To review and update policies, procedures and practices to enhance the ability to extend better service to customers. To train and develop all employees and provide them adequate resources so that customers' needs are reasonably addressed. To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to employees in a timely fashion. To cultivate a congenial working environment. To diversify portfolio both in the retail and wholesale markets. To increase direct contact with customers in order to cultivate a closer relationship between the bank and its customers.

4.3 Departments of SJIBL All branches of Shahjalal Islami Bank Limited are divided into three departments: General Banking Department. Foreign Exchange Department. Investment Department.

4.3.1 General Banking Department: General banking department is one of the most important departments of Shahjalal Islami Bank Limited. Basically bank provides the main services to the customer through this department. In general this section of the Shahjalal Islami Bank Limited is divided into five sections. Accounts opening section Cash section Remittance section Bills and clearing section Accounts section

4.3.2 Foreign Exchange Department: Banks play a very important role in effecting foreign exchange transaction of a country. Mainly transactions with overseas countries are in respect of imports; exports and foreign remittance come

21

under the purview of foreign exchange department. Banks are the vital sectors by which such transactions are effected/settled. Central Bank records all sorts of foreign exchange transactions. The other banks dealing with foreign exchange are to report to Bangladesh Bank regularly (viz. daily, monthly, quarterly, yearly etc.). The foreign exchange department consists of three sections. They are: Import section Export section Foreign remittance section

4.3.3 Investment Department:

Banking business consists of borrowing and lending, Bank act as an intermediary between surplus and deficit economic units. Thus a banker is a dealer in money and credit. Banks accept deposit from large number of customers and then lend a major portion of the accumulated money to those who wish to borrow. In this process banks secure reasonable return to the savers, make funds available to the borrowers at a cost and earn a profit after covering the cost of funds. Banks, besides their role of intermediation between savers and borrowers and providing an effective payment mechanism, have been allowed to diversify into many new areas of better paying business activities.

4.4 Branches of SJIBL:

The Bank has 44 branches all over the country with a worldwide network of correspondents. The Bank is going to open more branches in the current fiscal year to expand the network. Name of branches with detail communication and addresses: SL Branch name & contact person Dhaka Zone 1 Dhaka Main Branch 2 Mitford Branch Address 58 Dilkusha C/A, Dhaka-1000. Phone: 02-9570795-8, 9570805; Fax: 02-9556011; E-mail:sblmain@shahjalalbank.com.bd; 173-174, Mitford Road, Dhaka-1100. Phone: 02-7315533, 7313788; Fax: 02-7315534

22

E-mail:sblmford@shahjalalbank.com.bd House # 8/1, Road # 4, Dhanmondi, Dhaka-1205. 3 Dhanmondi Branch Phone: 02-9665766-7; Fax: 02-9665768; E-mail: sbldhan@shahjalalbank.com.bd House # 6, Road # 32, Gulshan, Dhaka-1212. 4 Gulshan Branch Phone: 02-9890520-1, 9893454, 9890322; Fax: 029893008; E-mail: sblgul@shahjalalbank.com.bd Modern Mansion (1st floor), 53 Motijheel C/A, Dhaka5 Foreign Exchange 1000 Phone: 02-7160323-3, 7160330; Fax: 02-7160331; E-mail: sblfex@shahjalalbank.com.bd Khaleque Complex (1st floor), Joydevpur Chowrasta, 6 Joydevpur Chowrasta Branch Gazipur Phone: 02-9262393-4; Fax: 02-9292393 E-mail: sbljcb@shahjalalbank.com.bd T K Bhaban, 13 Kazi Nazrul Islam Avenue, Kawran 7 Kawran Bazar Branch Bazar, Dhaka Phone: 02-9114044, 9122396; Fax: 02-9126604 E-mail: sblkawran@shahjalalbank.com.bd N Z Center, Plot # 5, Road # 12, Sector # 6, Uttara, 8 Uttara Branch Dhaka-1230 Phone: 02-8923586, 02-8932084; Fax: 02-8923586 E-mail: sbluttara@shahjalalbank.com.bd 125/1, Bangshal, Dhaka-1100 9 Bangshal Branch Phone: 02-9552922, Fax: 02-7172910 E-mail: sblbangshal@shahjalalbank.com.bd EPZ Savar, Dhaka. Phone: 02-7702517 E-mail: sblbaipail@shahjalalbank.com.bd Osman Tower (Ground Floor), 56/1 S M Maleh Road, Narayanganj Phone: 02-7635172-3; Fax: 02-7635173 E-mail: sblngonj@shahjalalbank.com.bd Khuda Buksh Foundation (1st floor), Road # 11/A, 12 Satmasjid Road Branch House # 99, Dhanmondi, Dhaka-1209.Phone: 029129848, Fax: 02-9129848 E-mail: sblsmr@shahjalalbank.com.bd

10 Baipail (Dhaka EPZ) Branch

11 Narayanganj Branch

23

Faruq Rupayan Tower;32 Kamal Ataturk Avenue, 13 Banani Branch Dhaka-1212 Phone: 02-8822801, 02-8828740 E-mail: sblbanani@shahjalalbank.com.bd Joypara, Dohar, Dhaka. Phone: 0389-4680014 E-mail: sbljoypara@shahjalalbank.com.bd Karim Chamber, 99 Motijheel C/A, Dhaka-1000 Phone:02-9563156;Fax: 02-9560249; E-mail: sblmjheel@shahjalalbank.com.bd Holding No-230, Senpara, Parbata,Mirpur-10, Dhaka16 Mirpur Branch 1216 Phone: 02-9012045; Fax: 02-9012045 E-mail: sblmirpur@shahjalalbank.com.bd B-71/1 & B-72/1 Bazar Road, Savar, Dhaka 17 Savar Branch Phone: 02-7742894-5; Fax: 02-7742893 E-mail: sblsavar@shahjalalbank.com.bd MTC Allys Center (1st Floor), 40 Bijoynagar, Kakrail, Dhaka 18 Bijoynagar Branch Phone: 02-9335771 Fax: 02-9344867 E-mail: sblbijoy@shahjalalbank.com.bd 311 Progoty Shorany Nawa Nogor, Baridhara Badda, Dhaka 19 Vatara Branch Phone:02-8840199 Fax: 02-8840188 E-mail: sblbhatara@shahjalalbank.com.bd Ma Plaza 1st Floor Shahidnagar, Keranigonj, Dhaka 20 Keranigonj Branch Phone:02-7762293,7762291 Fax:02-7762292 E-mail: sblkerani@shahjalalbank.com.bd Noor Fatema Tower (1st Floor) 21 Mymensingh Branch Holding# 25, Shawdeshi Bazar, Mymensingh E-mail: sblmymensingh@shahjalalbank.com.bd Barachowna Bazar PS:shakhipur Dist. Tangail. 22 Barachowna Branch, Tangail 23 Ashkona Branch Phone:01736-107407 E-mail: sblbarachowna@shahjalalbank.com.bd City Port, 398, Ashkona Bazar Road (Haji Camp),

14 Joypara Branch

15 Motijheel Branch

24

Dhaka. Phone:8956762 E-mail: sblbaskona@shahjalalbank.com.bd Jalpotti Road, Vill-choto Madhabdi, Pauroshava & 24 Madhabdi Branch, Norsingdi P.S.-Madhabdi, Dist: Norsingdi. Phone:9446017 E-mail: sblmadhabdi@shahjalalbank.com.bd A-62 Haji Osman Market, Shafipur Bazar, Kaliakair, Gazipur. 25 Shafipur Branch, Gazipur Phone:01712090243 E-mail: sblshafipur@shahjalalbank.com.bd

4.5 Activities of the SJIBL College Gate Branch 4.5.1 Introduction of SJIBL, Gulshan South Avenue Branch: This branch was established 14th May, 2009 it is situated at the Ground floor of South Avenue Center,Gulshan-1, Dhaka.. The bank is designed under one floor. It has been providing Islamic banking services for the customers of College Gate area. 4.5.2 Objectives: To provide Islamic banking service to the people within the commanding area. To expand business based on Islamic Shariah. To keep position in the competitive market. To contribute in profitability of SJIBL

4.5.3 Department of the Branch: Account opening department Cash department

25

Accounts department Investment department Foreign exchange department Clearing department Remittance department.

4.5.4 Number of Accounts: Application Total Account

AL-Wadiah Current Deposit (ACD) Mudaraba Savings Deposit (MSD) Mudaraba Short Notice Deposit (MSND)

61 265 8

(SND) SDS INV Lakhopoti Dep. Scheme (LDS) Monthly Deposit Scheme (MDS) Millionaire Scheme 12 Yrs (MS12) Millionaire Scheme 15 Yrs (MS15) Millionaire Scheme 20 Yrs (MS20) Millionaire Scheme 25 Yrs MS25 M. Term Deposit Scheme (MTDR) TOTAL Table No. 4

8 6 126 16 256 20 9 5 3 157 932

4.5.5 Statement of Affairs on SJIBL Gulshan South Avenue Branch:

26

Account No. Sundry Deposits 9020824006 9020824009 9020824013 9020824014 9020824021 9020824022 9020824029 9020824030 9020824039 9020824041 9020824042 9020824049 9020824096 Total

Account Name S/D- Tax on Profit of Deposit S/D- Tax on Bills S/D- Excise Duty on Deposits S/D Vat for LC Commission S/D- Margin of LC S/D- Margin of LG S/D- Risk Fund for Ijara S/D- Leased/ Ijara Deposits S/D- Sundry Deposit Stamp S/D- VAT S/D VAT for Banking Service S/D- Sundry Deposit - Others Risk Fund Under HIS

Balance 12,220.00 940.00 2,580.00 176.00 979,950.00 12,04,000.00 47,800.00 2,14,150.00 2,250 264.00 7,252.50 74,840.00 41,000.00 2,587,422.50

Table No. 5

4.5.6 A list of Employees of the SJIBL Gulshan South Avenue Branch: SL. 01 02 03 04 05 05 Designation Senior Assistant Vice President & Manager First Assistant Vice President & Deputy Manager Executive Officer First Executive Officer Assistant Executive Officer Senior Officer Number of Employer 1 1 1 1 2 1

27

06 07 10 Total

Officer Trainee Senior Officer Staff

2 2 1 13

Table No. 6

4.6.7 Products of Shajalal Islami Bank Limited, Gulshan South Avenue Branch:

Deposits:
Shahjalal Islami Bank Limited accepts deposits on the basis of Mudaraba in the following types of accounts, and pays profit, like that of dividend in these accounts, except AL-Wadiah Current Account. The relationship between banker and customer is not debtor-creditor relationship of conventional banks. The depositor is a partner in business with Shajalal Islami Bank Limited. Customers' deposit their fund in the following types of Accounts:

1. Mudaraba Short Notice Deposit Account 2. Mudaraba Savings Account 3. Mudaraba Term Deposit Account 4.Other Scheme Deposit Accounts Average 70% of profit earned by the bank is distributed proportionately among depositors annually. Investments Modes: To provide interest-free Banking Shahjalal Islami Bank has adopted the following modes of investment: 1. Musharaka (equity participation on the basis of sharing profit and loss) 2. Mudaraba (sharing of profit and loss in business where one of the partners provides expertise and management and other partner provides capital remaining inactive)

28

3. Murabaha (buying and selling of commodities goods etc. with profit) 4. Bai-Muajjal (credit sale with profit) 5. Ijara (leasing for rent) 6. Hire purchase or Shirkatul Melk 7. Bi-Salam (purchasing of agricultural products while in production and providing advance oney to the producers) 8. Istisna (purchasing of industrial products while in production and providing advance money to the producers). 9. Quard. Computer Services: Shahjalal Islami Bank is computerized and provides the following services some of these services will be introduced soon. Shahjalal Islami Bank Limited introduced a few schemes, which are very popular: Online services Automated Accounting Integrated System Signature Verification Any Branch Banking ATM Services POS Services SMS Push Pull Services 9. Other Delivery Channel Services (to be implemented)

Deposit Schemes:

Millionaire Scheme Double the Money Scheme Monthly Income Scheme Monthly Deposit Scheme Hajj Scheme Mudaraba Bibaho Scheme (New Product) Mudaraba Cash Waqf Deposit Scheme (New Product) Special Term Deposit Scheme (New Product) Mudaraba Mohor Deposit Scheme (New Product) Mudaraba Shikhkha Deposit Scheme (New Product)

29

Mudaraba Housing Deposit Scheme Mudaraba Lakhopoti Deposit Scheme Mudaraba Small Business Deposit Scheme

4.16.8 Services: 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 products are launched broadening service products of the Bank to the clients: 1. 2. VISA Electron (SJIBL VISA Debit Card - local) VISA Prepaid (SJIBL VISA Prepaid Card)

SJIBL VISA Debit Card:

To a customer, My card, my money concept is used for Debit Card. Any accountholder of SJIBL can apply for a SJIBL VISA Debit Card against his/her Al-Wadiah Current Deposit (AWCD), Mudaraba Savings Deposit (MSD) or Mudaraba Short Notice Deposit (MSND) Account. He/she is fully authorized to enjoy the benefits of cash withdrawal from ATMs, liberty of shopping, dining, paying utility bills and having access account information through SMS, etc. round the clock.

SJIBL VISA Prepaid Card (Local):

SJIBL VISA Prepaid Local Cards are open to the customers even having no account with Shahjalal Islami Bank Limited. Cardholders can have the card against prepayment and have access from anywhere in Bangladesh. SJIBL VISA Prepaid Local Cards are accepted locally at all VISA labeled merchant outlets, ATMs, etc.

SJIBL VISA Prepaid Card (International):

SJIBL VISA Prepaid International Cards are also open to the customers even having no account with Shahjalal Islami Bank Limited. Cardholders can have the card endorsing US Dollar paying against Travel Quota, Exporters Retention Quota or marking Lien of his/her FC Account. SJIBL

30

VISA Prepaid International Cards are accepted world wide at all the VISA labeled merchant outlets, ATMs, etc. SJIBL VISA Prepaid Card (Dual): The Dual Card is a hassle free product, no need to carry two separate plastic cards for local and international card. Now, with one plastic card the Cardholders can enjoy all the benefits and make transactions locally & globally from their Prepaid card account at all the VISA labeled merchant outlets, ATMs, etc. SJIBL VISA Souvenir Card (Gift Card Local): SJIBL Souvenir Card is a very attractive and stylish product. Like a Gift Card, SJIBL Souvenir Card can be used by anyone wishes to. The intending customer may have the card instantly or may customize the card as required. The SJIBL Souvenir Cards are accepted locally at all the VISA labeled merchant outlets, ATMs, etc.

Usage Limit Description Cash withdrawal limit (total) Cash withdrawal limit (amount) Balance checking Mini statement printing PIN change Invalid PIN retry count Card usage limit in ATMs (total) Transaction Limit 4 times per day Tk. 20,000 per day 4 times per day 2 time per day 2 times per day 3 times per day 10 times per day

31

SMS Service:
Welcome to the convenience of accessing your banking needs from anywhere anytime. Shahjalal Islami Bank again fulfilled the demand of time in the era of modern banking technology by introducing the Mobile banking i.e. SMS / Push Pull Service. We offer a range of ways for you to access and manage your money. Mobile Banking is a secured & flexible solution that delivers the banking services to its customers through a range of mobile devices using SMS / Push Pull technology. It provides banking services to the registered clients access to account information and real-time transaction capabilities from the mobile phones at a true Anywhere, Anytime, Anyhow convenience. As a leading private sector bank in Bangladesh the Shahjalal Islami Bank Limited presents the Mobile banking i.e. SMS / Push Pull service. Services:

1. Balance Inquiry 2. Cheque Book Request 3. Cheque Leaf Status 4. FC Rate Information 5. Cheque Stop Payment Instruction 6. Statement Request by Courier/Post 7. Statement request by E-mail 8. Last Three Transaction Statement 9. Help inquiry
10. PIN Change GP Bill Collection: Grameen Phone subscribers availing the service to pay their bills, advances, security deposit and other related charges through all branches of Shahjalal Islami Bank Limited.

Remittance:

Kushiara Western Union

32

Swift Service

WESTERN UNION: Western Union a fast, reliable and convenient way to send a money transfer Western Union Financial Services Inc. U.S.A. is the number one and reliable money transfer company in the world. This modern Electronic Technology based money transfer company has earned world wide reputation in transferring money from one country to another country within the shortest possible time. Shahjalal Islami Bank Limited has set up a Representation Agreement with Western Union Financial Services Inc. U.S.A. Millions of people have confidence on Western Union for sending money to their friends and family. Through Western UnionMoney Transfer Service, Bangladeshi Wage Earners can send money quickly from over 280,000 Western Union Agent Locations in over 200 countries and territories world wide- the worlds largest network of its kind, only by visiting any branches of Shahjalal Islami Bank Limited in Bangladesh. The money sent by your loved ones is very special to you indeed. So, at Western Union, we offer the following benefits:

Reliability: Our customers have benefited from our electronic money transfer for over 150 years. Each transfer can be tracked electronically to make sure that you receive the money your loved one has sent. Speed: When your loved one sends you money, within minutes you can receive it in Bangladesh. Convenience: Bank account is not required! Just go to a Shahjalal Islami Bank Limited branch anywhere in Bangladesh offering Western Union Money Transfer. Thensimply fill a form and collect your money.

33

Shahjalal Islami Bank Limited has 26 such branches all over Bangladesh and Western Union has over 280,000 agent locations across 200 countries and territories.

3 easy steps to receive your money: Your loved ones deposit the money at any Western Union Agent location and get a receipt with MTCN. He/she then informs you about the amount sent (sender name, amount, sending country, receiver name and MTCN). You go to the nearest Shahjalal Islami Bank Branch with a valid identity card. You fill a simple form and receive the money. SWIFT Service: Shahjalal Islami Bank Limited is a member of the society for Worldwide Inter Bank Financial Telecommunication (in abbreviation S.W.I.F.T). SWIFT is the industry-owned co-operative supplying secure, standardized messaging services and interface software to nearly 8,100 financial institutions in 207 countries and territories. SWIFT members include banks, broker-dealers and investment managers. The broader SWIFT community also encompasses corporate as well as market infrastructures in payments, securities, treasury and trade.

Chapter-5 will cover the followings: Chapter-5 5.1 Reliability and Validity of Data 5.2 Chapter wise data processing and Analysis 5.2.1 General Banking: 5.3. Techniques of Analysis 5.4Major Findings of the Study (Based on observations & literature exposure):
34

Chapter-5 Evaluation & Suggestions

5.1 Reliability and Validity of Data All data of the project paper have been collected through primary & secondary sources. Data of primary sources have been collected from professional bankers through telephonic & face to face interviews. Data of secondary sources have been collected from published matters of SJIBL, Bangldesh Bank as well as their websites. Besides, some data have been collected from popular magazines, reports, & websites of reputed islamic shariah based financial organizations.

35

Therefore, it can declare/say with utmost confidence that the data of the project report is reliable for necessary judgment & collected from valid sources. 5.2 Chapter wise data processing and Analysis

5.2.1 General Banking of SJIBL: Financial institution/ intermediary that mediates or stands between ultimate borrowers and ultimate lenders is knows as banking financial institution. Banks perform this function in two ways- taking deposits from various areas in different forms and lending that accumulated amount of money to the potential investors in other different forms. General Banking is the starting point of all the banking operating. 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 honoring 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.

General Banking Section of a branch is designed To serve the general people for saving money To ensure smooth transaction for commercial people and To ensure security of preaches wealth of the clients and also for all other important activities.

5.2.1.1 General Banking Activities:

36

Account opening One cannot be a customer of the bank without opening an account. Account opening is an agreement between the customer and the bank. The form of account opening acts as a contract evidence. So account opening is one of the most important activities of a bank. The rules and regulations for opening of an account can vary according to types of accounts. Types of Accounts One cannot imagine the banking business without deposits. So the most important activity of the commercial bank is to receive the deposits from the customers Shahjalal Islami Bnaks deposits can be divided as follows: 1. AL-Wadiah Current Deposit For private, individuals, merchants, traders, importers and exporters mill and factory overset this type of account is advantageous. The minimum deposit of Tk.5000 for opening of a current account is required with reference. The benefits of current account are as followsStatement of account on monthly basis/any time. Free checkbook Statement by fax on demand Any number of transactions a day.

2. Mudaraba Savings Deposit There is restriction on withdrawals. Frequent withdrawal is prohibited. The saving account is primarily for small-scale savers. The main objective of this A/C is promotion of saving money. Highlights of the Account 7 days notice is required for withdrawal of large amount. Frequent withdrawal is not encouraged. Minimum amount of Tk.2000.00 is required as initial deposit. Normally withdrawal is not allowed more than one time in a week

37

3. Mudaraba Short Notice Deposit (MSTD) The Bank offers more profits in the short-term deposit than savings account. The depositors must keep their money for at least six months to get the profit. Generally it is suitable for various big companies, organizations and govt. departments

4. Mudaraba Term Deposit Receipt (MTDR) When an account of cash is kept in the bank for a fixed period of time these deposits cannot withdraw money from the bank before the maternity of a fixed period. When the depositors open these types of account the banker issue a receipt acknowledging the receipt of money, on deposit account. For three and six and twelve months the rate of interest is 12.5%, 12.75%, and 13% respectively. 5. Monthly income scheme: It is a monthly income scheme that really makes good sense. A sure investment for a steady return. Highlights of the Scheme: Minimum deposit TK, 50,000.00 and profit will be TK, 450.00. Higher monthly income for higher deposit. The scheme is for a 5-year period.

Objectives of the scheme The depositors have to fill up forms for opening this account. The receipt, which is provided by the bank to the customers, is not transferable. The Bank will not provide profit to means if this deposit is withdrawer within one year of opening the account. 6. Mudaraba multiple Deposit scheme

38

Investment leads a country to industrialization. But saving is the main source of investment. Without saving a country cannot build up capital. For this reason saving is called the skeleton of development. This is a nine years deposit, which increases the deposit more than triple. Shahjalal Islami Bank offers mudaraba multiple savings by creating more conscious and encouraging people to save. 7. Hajj Deposit Scheme: Hajj deposit at monthly installment from 1(one) year to 25 (twenty five) years are accepted under the above scheme to enable the account holder to perform hajj out of the accumulated saving with profit. 8. Money Grower Money gradually grows in this account. It is a monthly savings scheme. It secures the future with ease. A small saving today will provide comfort tomorrow. There are several types of Money Grower Scheme which are given bellow: Education Deposit Scheme (EDS) Savings Period and Monthly Installment Rate the savings period is for 10, 15, or 20 years. Monthly installment rate is: M.Inst. Yrs 10 Yrs 15 Yrs 20 Yrs TK.100 TK.250 TK.500 TK.1000 TK.3000 TK.5000

22,158 47,204 92,772

55,395 1,18,01 1 2,31,929

1,10,79 0 2,36,022 4,63,85 8

2,21,580 4,72044 9,27,716

6,64,740 14,16,13 2 27,83,14 8

11,07,900 23,60,220 46,,38,580

Monthly Deposit Scheme (MDS) Savings Period and Monthly Installment Rate the savings period is for 5, 8, or 10 years. Monthly installment rate is:

39

M.Inst. Yrs 5 Yrs 8 Yrs 10 Yrs

TK.1000

TK.2000

TK.5000

TK.10,000

TK.25,000

TK.50,000

80,250 1,55,000 2,22,000

1,60,500 3,10,000 4,44,000

4,01,250 7,75,000 11,10,00 0

8,02,500 15,50,000 22,20,000

20,06,250 38,75,000 55,50,000

40,12,500 77,50,000 1,11,00,000

Millionaire Scheme 12 Yrs (MS12) Savings Period and Monthly Installment Rate the savings period is for 12, 15, 20, or 25 years. Monthly installment rate is:

M.Inst. Yr s 12 Yrs 15 Yrs 20 Yrs 25 Yrs

TK.600.00

TK.1,100.00

TK.2,170.00

TK.3,330.00

10,00,000.00 10,00,000.00 10,00,000.00 10,00,000.00

9. Mohor Deposit Scheme (MSD) Savings Period and Monthly Installment Rate the savings period is for 3, 5, or 8 years. Monthly installment rate is:

M.Inst. Yrs

TK.1000

TK.2000

TK.3000

TK.4,000

TK.5,000

TK.10,000

40

3 Yrs 5 Yrs 8 Yrs

42,743 80,250 1,55,000

85,486 1,60,500 3,10,000

1,28,229 2,40,750 4,65,000

1,70,972 3,21,000 6,20,000

2,12,715 4,01,250 7,75,000

4,27,430 8,02,500 15,50,000

10.Marriage Deposit Scheme (MSD) Savings Period and Monthly Installment Rate the savings period is for 10, 12, 15 or 20 years. Monthly installment rate is: M.Inst. Yrs 10 Yrs 12 Yrs 15 Yrs 20 Yrs TK.250 TK.500 TK.1,000 TK.1,500 TK.2,000

55,395 76,261 1,18,01 1 2,31,929

1,10,790 1,52,522 2,36,022 4,63,858

2,21,580 3,05,044 4,72,044 9,27,716

3,32,370 4,57,566 7,08,066 13,91,57 4

4,43,160 6,10,088 9,44,088 18,55,432

Account Closing: First a customer has to submit an application with his/her signature mentioning that he/she wants to close his/her A/C. Then the signature will be verified by the officer. Customer has to certify by different department (Advance, Foreign Exchange department) of Bank that he/she has no liabilities to the Bank. After that the Customer's A/C is debited and then Bank issues a Pay Order in the name of A/C holder. Account Transfer: Customer has to submit an application mentioning that he/she wants to transfer his/her A/C to his desired Branch and the officer will verify the signature, Customer has to be certified by different department of Bank that he/she has no liabilities to the bank. Then total particulars of A/C holder will prepare and sent to the Customer's desired branch. Liability of Recognizer is secondary and account holder is primary. 5.2.1.2 General Practice at Regarding Accounts, in Account Opening Register:

41

After fulfilling all the requirements for opening account necessary entries are given in the account opening register. There are several registers for several accounts as MSD, ACD, SND, MDS and MTDR etc. Date of opening name of the account holder, nature of business, address, initial deposit, and introduction, and various information's are recorded in that register. New accounts number is given from the list of new numbers provided by the computer department. Cheque Book: Cheque book is issued to the new customer after opening account. Two separate cheque books are given for current and saving accounts. AWCA accounts Cheque book consists 25 and 50 leafs, while MCA account Cheque book has 10 leafs. There is a cheque book issue register in this regard; where Cheque book number, leaf number, date of issue etc. information are kept. All the necessary numbers are the sent to the computer department to give entry in the program. Pay Order (PO): Pay Order an instrument, which is used to remit money with in a city thorough banking channel the instruments are generally safe as most of them are crossed. Clearing: As far safety is concerned customers get crossed check for the transaction. As we know crossed check cannot be encased from the counter rather it has though been collected through banking channel i.e. clearing. A client of SJIBI received a check of another bank, which is located within the clearing range deposit, the checks in account at SJIBL New SJIBL will not the money until the check is honored.

Transfer: Transfer delivery is a Cheque collection procedure among internal branches within the Clearing House. When a Cheque is deposited to another Branch Office, then collecting branch on that date send the Cheque to their Local Office, finally send that Cheque to the respective branch and takes necessary action for honoring Cheque. If the Cheque is dishonored then authorized branch send the Cheque to the local office and Local Office send that Cheque to the collecting branch on the collecting date.

42

Here Clearing house function is not required because transactions occur among the same bank between several branches. Outward Bills for Collection (OBC): Customers deposit cheque, draft etc for collection attaching with their deposit receipt. Instrument within the range of clearing are collected through local clearing house but the other which are outside the clearing range are collected through OBC mechanism. A customer of SJIBL principal branch local office Dhaka is depositing a check of Sonali Bank Cox's-Bazar. New as a collecting bank SJIBL principal branch will perform the following tasks: Received seal on deposit slip. SJIBL local office principal branch crossing indicating them as collecting bank. Endorsement give payees A/C will be credited on realization. Entry on register from where a controlling number is given.

Collecting bank can collect it either by its branches of by the drawer's bank they will forward the bill then to that articulate branch. OBC number will be given on the forwarding letter. Inward Bills for Collection (IBC): In this case bank will work as an agent of the collection bank branch receives a forwarding letter and the bill. Next steps are: Entry in the IBC register, IBC number given. Endorsement given- "our branch endorsement confirmed". The instrument is sent to clearing for collection. Miscellaneous creditor A/C.

5.2.2 Investment Schemes The word comes from the Latin word credo meaning I believe. It is a lenders trust in a persons/firms/companys ability or potential ability to command goods or services of another in return for promise to pay such goods or services at some specified time in the future. The making of loans and advances has always been prominent profitable function of the Bank. Sanctioning credit to customers and others out of the funds at its disposal is one of the principal services of a modern bank. The investment facilities extended by Shahjalal Islami Bank Limited, College Gate Branch can be classified by following ways: 1. Bai-Muajjal (F.O.) Investment Scheme.

43

2. Small Business Investment Scheme. 3. Housing Investment Scheme. 4. Car Purchase Investment Scheme.

5. Household Durable Investment Scheme.

6. Bank Guarantee (Non funded).

SJIBL depository schemes: SJIBL has introduced the following depository schemes for its customers: 1. Monthly Deposit Scheme (MDS). 2. Millionaire Scheme (MS). 3. Multiple Benefit Deposit Scheme (MBDS). 4. Monthly Profit Scheme (MPS/ Monthly Income Scheme (MIS). 5. Mudaraba Term Deposit Scheme (MTDR).

6. Double Benefit Scheme (DBS)

General Terms & Conditions for the Investment Facility: 1. The investment facility will be provided only against SJIBL deposit schemes mentioned above. 2. Depository account holder(s)/ family will only be eligible to avail such facility. 3. In case of Monthly Deposit Scheme (MDS) and Millionaire Scheme (MS), after two years of account opening such facility will be provided. 4. In case of Millionaire Scheme (MS) the investment facility will not be allowed when the account is opened in the name of child/ dependent. 5. In case of Monthly Profit Scheme (MPS)/ Monthly Income Scheme (MIS) monthly profit will be adjusted to the respective investment account. 6. Maximum investment facility will be allowed up to 90% of the principal amount only in every case. 7. In case of renewal / enhancement of the facility. It is to be ensured that the instrument is valid up to the proposed expiry of the facility. 8. In case of renewal, outstanding of the facility should have to be within the approved limit.

44

5.2.2.6 Bank Guarantee A bank guarantee has special significance in the business of banking as a means to ensure safety of funds lent to the customers. In case, the borrower is unable to provide the security of tangible assets, or the value of asset falls below the amount of the loans, and the borrowers personal security is not considered sufficient, an additional security is sought by the banker in the form of a guarantee given by a third party. Nature of the Scheme It is a non-funded investment. The bank does not pay money to the party. The bank only issues a letter of guarantee to the party. Terms and Condition 1. The banks legal advisor must verify all security documents. 2. When the principal debtor defaults in fulfilling this obligation or promise the liability bestow on guarantor. 3. Bank reserves the right to cancel the terms and conditions partly or wholly at its direction without assigning any reason whatsoever. Profit The bank can earn profit by issuing the letter of guarantee by following two ways: The bank get service charge for the letter of guarantee. The bank can invest the security money bills Against imported merchandise Against Trust receipts (T/R) Against Export Bills Purchased / Discounted Against Work order Against other securities.

Non-Funded Facilities: Letter of credit (L/C) Letter of Guarantee (L/C)

45

5.2.3.2 Types of Advance Offered by SJIBL: Secured Advances: a. The following type of secured advances is allowed against tangible securities Loan (General) House Building Loan Other Loans to Staff Cash Credit (Hypothecation) Cash Credit (Pledge) Hire-Purchase Lease Financing Consumers' Credit SOD (Export) SOD (Others) PAD LIM LTR IBP Packing Credit FDBP (Foreign) FDBP (Local) FBP

subject to margin restrictions:

b.

These advances are allowed against the following securities:

46

 Shares of various Companies approved by Head Office from time to time and listed in the Stock Exchange. Term Deposit Receipts issued by any Branch of our Bank. Lien on balance in Savings A/C, Current A/C. and other Savings Schemes Government Promissory Notes. Various Sanchaya Patras Surrender value of Life Insurance Policies. WEDS Assignement of bills againest work orders/supply orders and receivables Stock of goods in trade (Permissible goods only) pledged or hypothecated. Hypothecation of power driven vehicles or watercrafts. Hypothecation of capital Machineries and equipments. Hypothecation of power driven vehicles or watercrafts. Immovable Property. Imported merchandise-pledged or hypothecated. Trust Receipts. Import Bills (PADs) Bills Purchased Scheduled Bank/Insurance Guarantees Export Bills Inland Bills. Personal Guarantee Corporate Guarantee Unsecured Advances: An unsecured or clean Advance is one, which is granted to a constituent without obtaining any security subject to restrictions imposed from time to time by Bangladesh Bank or any competent authority. In such case only charge documents are held. Unsecured advances mean include: i. Clean Overdrafts and ii. Clean Loans.

47

A customer should not ordinarily by permit to overdraw his account without security. However, an unsecured facility may be allowed in exceptional circumstances, only for a short period, with definite repayment arrangement, subject to restrictions imposed by Bangladesh Bank or any other competent authority, with prior approval of Head Office, to a customer on the basis of his personal credit worthiness, standing and reliability. It shall not be granted unless the Sanctioning Authority has full confidence in the ability and reputation of the customer to repay it, on demand, or at its maturity if it is a loan. Definite arrangements for repayment, whether by installments or otherwise, must, as a rule, be made.

5.2.3.3 Procedure of Giving Advance: a. The borrower has to apply to SJIBL for loan by filling up of a specific application form. b. After receiving loan application form, SJIBL sends a letter to Bangladesh Bank for obtaining a report. This report is called CIB (Credit Information Bureau) report. Giving of this report essential. The purpose of this report is to being informed that whether the borrower has taken from any other bank; if `yes', then whether these loans are classified or regular. c. After receiving CIB report, if the bank thinks that the prospective borrower will be a good borrower, then the bank will scrutinize the documents are properly filled up and signed. d. Then comes processing stage. In this stage, the bank will prepare a proposal. A proposal contains all relevant information (e.g. name of the client, type of the loan, amount of the loan, period of giving loan, security, date of application, financial data, etc.) Branch incumbent (Local Office) has the discretionary power to sanction loan (SOD) up to Tk. 25 lac manager has to give attention on the following matters: The interest of the loan must not be less than 13.00% and The borrower must maintain 10% margin.

48

Except this case, the branch manager has to send a proposal to the head office. Head office will prepare a minute and submit it before the executive committee. The minute has to be passed in the executive committee (EC) under certain cases. After passing the minute, it will be sent to the Bangladesh Bank for approval in the following cases: If the proposal limited exceeds 15% of bank's equity. If the proposal limited against cash collateral securities exceeds 25% of the bank's equity. f. After getting the proposal it will again come to the head office. e. After the processing stage, a sanction advice will be prepared in favor of the client. After the sanction advice, bank will collect necessary documents (charge documents). g. After receiving all the documents, the bank will disburse the loan to the borrowers. For withdrawing the loan amount, customer creates a current account and the loan amount is transferred to this account. SWOT Analysis of SJIBL, Gulshan South Avenue Branch: Strength: Fully computerized accounts maintenance. 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. Well decorated and air conditioned facilities. SJIBL has a well-diversified pool of human resources, which is composed of people with high academic background. Also, there is a positive demographic characteristic- most employees are comparatively young in age yet mature in experience. SJIBL provide ATM debit card and nonstop banking facilities. Structural set up and business location is strategic. Wide product line Bank is very alert to preserve the asset quality of the bank. Continuous training both at home and abroad is going on the develop the skill of human resources.

49

Shahjalal Islami Banks assets position is quite satisfactory

Weakness: Dependent on fixed deposits. Limited Market Share. Absence of an ungraded website. Lack of setting arrangement for the waiting customers. Limited branch network. Sometimes it seemed to me that charges and other fees are very high compared to other private banks. It frequently creates customer dissatisfaction. Some officials dealing with retail products have not been as a professional as a private bank does require. Sometimes the Customer Service Officers were so busy that it creates delay to the customer service. And at the end of the day the closing were also delayed. Most of the time there were problem with the ATM machine. In ATM, It sometimes remained out of order, some time out of cash and sometimes customer face the problem of cash and credit capture. Charges of statement or certificates are very high.

Opportunity: Here the opportunity means an area of buyer need or potential interest in which a bank can perform profitably. If the management can use the continuous support properly it can enjoy huge opportunity for improving its growth. Other opportunities are Expansion of new area of investment Credit card business Regulatory environment favoring private sector bank. Technical support to small Scale industries (SSI) in order to enable them to run their enterprises successfully. Threat: SME and Agro based business. Besides, the Bank is to provide full range of commercial banking services.

50

The environmental threat is a challenge posed by an unfavorable trend or development that would lead to deterioration in sales or profit. Banks other threats are as follows Number of potential competitors in home and abroad is increasing day by day. Restless political condition in Bangladesh, such as Strike, Boom blast, etc. threats the prosperity of Bank. Market pressure for lowing Profit rate. The bank must be bound to follow the rules of central Bank.

5.4 Major Findings of the Study (Based on observations & literature exposure): 5.4.1 Major Problems/Findings a. Lack of Segmentation: The Bank has no segmentation to handle different type of customers. They are equally treating of all the customers to provide service. But high status clients seek on extra honor from Bank or institution.

b. Lack of Up to Date Decoration: The Branch is not decorated with ultra modern facility and not so nice to look at. Their furniture's and relevant materials are not so high standard. c. Work Environment is not so suitable: The work environment is noisy and full of crowd sometimes. It is bad for any financial organization and also bad for security. There is no siting arrangement of good no of people. d. Hard Rules & Regulation to Open A/C: The procedures to open an account are full of hard & fast rules and regulations (as per Bangladesh Bank). But compare to other Bank prime bank is not as flexible as they are doing to open A/C or attract customers. e. Customer Objectives:

51

Many customers complain to me to improve and first the service as behavior of the staff as it is a private bank. It should not be like Sonali Bank. Customers require especially quick, accurate service and good behavior from bankers.

f. Lack of Good Cooperation: Every organization has this type of problem. But is should be minimized to faster the service as it is the financial institution and on depends to another to complete a process fully. g. Some Sort of Ego: Some employees of this branch feel always some sort of ego that they are something different. But this is not a symbol of good sign. Ego drive is harmful for team work specially. h. Lengthy Procedures & Process: The scheduled activities of the bank like A/C opening A/C closing and issuing of solvency certificates are delay sometimes due to lack of proper initiates. This tendency is bad for banking good service. CSS maturity and closing require 3 days, which is an image of Govt. Bank. i. Low Interest Rate Cannot Attract Customers: Compare to many others Banks SJIBL offer low interest rate to depositors. So they are not interested to keep there money in low rate of interest. The SJIBL management is only hunting to ward low cost and no cost deposit. j. Customers' Complains: Customer's all complains are related with lengthiness and time consuming of tasks. The small depositor like CSS A/C holder claim to receive money instantly. But it is not possible for slow and lack of cordial interruption of the management. 5.4.2 Recommendations: On the basis of theoretical analysis and practical experience of thesis program. I may suggest the following issues: 1. Provide up to date Technology:

52

The branch should be more technologically rich than present time. Then all manual tasks will be converted into computerized system

2. Information Cell Establishment: Each and every branch should establish an information cell with one/two dump smart executives who will be able to provide all sort of information regarding banking and respective branch. In my question Almost 200 responded are agreed with my proposal. 3. Provide Nice Decoration: Now a day's private Bank is an image building and most nice environment organization. So the decoration should be unique and better than our competitors. 4. Handling Customers Well: I think the staffs of the branch should be trained up how to handle different type of customers. The training should not limit only GB, Credit, and Foreign exchange etc. 5. Behavior Modification of the Employees: Very few employees' behavior should be modified enough to maintain positive attitude toward banks. They should always think it is a private bank and fully service oriented organization. "Customer is the king / Queen" they should remember it almost every time in office or out side the office. 6. Maintain Service Quality: We believe in quality not quantity. Quality is an important phenomenon of service organization always quality should achieve the pick of standard. If quality of service is good then 50% problem will be automatically reduced. 7. Offer Competitive Interest Rate: SJIBL should offer high competitive interest rate to attract depositor to increase the liquidity. Then it will able to deal with call money business in the age of fluting rate of exchange.

53

8. Site Selection of Branch: Management should carefully consider the location to set up a new branch. Because it is a question-which is vital to deal business? Answer is location, location and location.

9. Deposit Mobilization: SJIBL has to increase their deposit mobilization growth. Also other banks have to take necessary action to maintain and improve their deposit mobilization growth rate. 10. Operating Income: For the maximizing the operating income, SJIBL should try to take necessary action to increased the operating income. 11. Reduce Expenditure: Very essential to reduce the expenditure of the SJIBL Bank. SJIBL Bank expenditure is very high other than two banks. 12. Remove Slow Rate of profit: SJIBL Bank profit is increased previous year but grow rate is low. So take necessary steps to increase the profit. 13. Foreign Trade: Foreign trade increase is the essential for the SJIBL Bank. The maximum amount of total earning comes from foreign trade. 14. Performance Increase: SJIBL Bank should increase their performance by engaging efficient decision maker in the managerial level.

15. New Planning:

54

All commercial banks including both nationalized and private should introduce performance planning system for increasing their operational efficiency or purpose the following other recommendation: It should utilize properly idle money, because idle money is one of the major Proper standard should be set by the movement for comparative performance Proper decision should be taken for banking sector which should not be problems of banking sector. measurement. changed rapidly. Proper training should be given in order to create efficient personnel. World Bank's prescription for banking reform programmed should bee analysis before implementing. 16. Proper Autonomy: Private Banks should be give proper autonomy and be kept free from political and other sorts of intervention. Though, autonomy does not mean lack of monitoring by the authority, yet it has advantages of being quick and flexible in implementing different plans and programs. 17. Comparison Commands: In regard to earning per share Dhaka Bank performance is good. SJIBL performance is also good. In regard to cash-deposit ratio is better. Because SJIBL growth rate is gradually In regard to loan-deposit ratio of SJIBL performance is the 9th position in the In regard to Debt-equity ratio SJIBL Bank performance is lower than the other increased. year of 2008. three banks.

55

Chapter-6

Chapter-6 will cover the followings: 6.1 Summery 6.2 Recommendations and 6.3 Conclusion

56

6. Summery, Recommendations and Conclusion:

6.1 Summery of the Finds:

While working on Shahjalal Islami Bank Limited, Gulshan South Avenue Branch, I have attained a newer kind of experience. After collecting and analyzing data I have some findings. These findings are completely my personal view to research work.
Shahjalal Islami Bank Limited has lack of strong supervision for which loans are Shahjalal Islami Bank Limited also hasnt proper monitoring system. In terms of repayment large loan has performed better than small sized loan. This bank started on-line service newly. As a resulted customers are not getting the full Branches are very much enthusiastic to provide more service to the clients. General defaulted.

service by the on-line service. Sometimes they have to face problem with on-line account. Banking Division is an efficient department. They are very much prompt to give decision to their valued client. Head Office Credit committee sits regularly on weekly basis. They never keep any things pending. Lack of good cooperation is identified among the work procedures and among the

employees of the bank, which results in lengthiness and ineffective service. The employees of the bank cannot provide effective and efficient services to the customers because of lack of computer facility. The number of human resources in the Computer section is really insufficient to give The investment of the branch is too low in comparison to the total deposits of the services to huge number of customers. branch.

57

The Bank has given less emphasis on long-term financing. Shahjalal Islami Bank Limited has also shortage of efficient management information

system.

6.2 Recommendations:
I have the practical experience in SJIBL for only three months. Shahjalal Islami Bank Ltd introduces a new dimension of business among the local bank in the financial market of Bangladesh in Retail Product Management. But in the complex business environment and diversified business world these products cannot meet the customer needs. Today, customer classes are vibrant and it is difficult to keep the customers without an appropriately designed and also is not properly market driven. Developing a market driven product management system is essential for any company if the company would like to win the competitive condition and would like to survive in futuristic competitive market setting. In this regard, following specific recommendations are forwarded for the development of product management of Shahjalal Islami Bank Ltd. Officials whom are involved in Customer Services should be trained properly. Because some time they cannot give proper suggestions to the customer queries. Though they try to give their best. Their jobs should be mentioned more frequently They should be made somewhat free from doing business Link between Customer Service Officers and Customer Service Manager should be easier Number of ATM booth can be increased ATM should take good care. Because it has been seen that most of the time they remain out of order or out of cash Relationship between Bank and customer should be increased Charges and fees may be reduced for more customer satisfaction There should be a code of conduct for the SJIBL officials, which should followed

58

College Gate Branch should have token system The website of SJIBL should upgrade regularly Last but not the list, the employees must be motivated when they do something good and creative.

6.3 Conclusion:
Shahjalal Islami Bank Ltd, Gulshan South Avenue branch is one of the most potential Islami banks in the Islami 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 as a new branch. But the branch needs more employees for its substantial growth. I would rather feel like producing my personal opinion about the ongoing practices in College Gate Branch. Shahjalal Islami Bank limited is a leading Private Islami bank in Bangladesh with superior customer bases that are loyal, faithful, worthy towards the bank. The service provided by the young energetic officials of the Shahjalal Islami Bank Limited is very satisfactory. As an Islami bank SJIBL has to follow the rules of Bangladesh bank despite the fact that these rules sometime restrict the foreign business to some extent. During my project in this branch I have found its General Banking and Investment department to be very efficient; therefore this department plays a major role in the overall profitability of the branch and to the Bank as a whole. The Bank's drive towards market leadership as well as quality in choosing business will continue in the coming years although competition is intensified with the opening of more financial institutions. The Bank is optimistic that the volume of business will increase in future through pragmatic and market friendly policies. The Bank shall continue to explore new Branches for Banking. We shall endeavor to adopt customer-oriented policies and introduce new techniques that will help to earn profit and increase greater confidence of the existing/ prospective customers. If Shahjalal Islami Bank Ltd, College Gate Branch adopts professionalism within the frame work of Shariah, they will

59

be able to earn handsome Halal Profit and higher return to the depositors and share holders. Ultimately, public will get more confidence on this type of Banking.

60