Category Archives: Islamic Banking/Finance

IFC, donors help Islamic banks develop collateral-free loans in Bangladesh

http://www.thefinancialexpress-bd.com/2009/07/21/73761.html

IFC, donors help Islamic banks develop collateral-free loans in Bangladesh

FE Report

IFC, a member of the World Bank Group, and its donor partners are working with Islamic banks to help them develop collateral-free loans to increase access to finance of small businesses, said a press release.

SouthAsia Enterprise Development Facility (SEDF), managed by the IFC in partnership with the UK Department for International Development and the Norwegian Agency for Development (NORAD), is training Islamic bank officials to help them develop loan products that comply with Islamic principles.

The products will cater to small businesses that do not own immovable property to provide as collateral but need non-microfinance loans worth Tk 1.0 million ($14,300).

These are limited by the central bank’s mandated prudential limit of Tk 1.0 million (10 lakh) to a single loan applicant without requiring registered mortgage of land as collateral.

The SEDF also organised a five-day workshop on ‘Islamic Banking Product Development’ to help develop the capacity of bankers on advanced aspects of Islamic banking.

Senior managers of Islamic banks and Islamic banking divisions of commercial banks attended the workshop, which continued from July 12 to July 16, 2009.

Bangladesh Bank officials involved in Islamic banking policies and supervision were also present in the programme.

“The demand for Islamic products is very high”, IFC Programme Manager Roger Handberg said.

“With this product, we hope to accelerate small business growth, especially in rural Bangladesh.”

The product is likely to appeal to at least 100,000 small businesses in the first three years if the banks launch and market it well.

The SEDF facilitates the growth of small and medium enterprises (SME) by helping improve their access to finance through a supportive financial infrastructure, financial products development and strengthening of financial institutions, providing quality business services towards strengthening value chains; and helps businesses adapt to the impacts of climate change.

‘Islamic banking a good alternative source of trade finance’

http://www.theindependent-bd.com/details.php?nid=134550

‘Islamic banking a good alternative source of trade finance’

Economic Reporter

President of the Chittagong Chamber of Commerce and Industry (CCCI) M.A. Latif MP said Islamic banking trade finance now-a-days has become very popular because it offers an excellent alternative of financing to the customers particularly to the muslim ones who have reservation against interest based conventional banking system.

“It has been estimated that Islamic banking will have a market value of $ 4 trillion by 2010. It is expected to capture about 40-50 per cent of the total savings of 1.3 billion Muslims worldwide within the next eight to ten years”, M.A. Latif MP made the comments while inaugurating a daylong ICCB workshop on “International Trade Payment: Islamic Trade Finance” at Peninsula Hotel in Chittagong organized for the bankers yesterday. He said trade finance and payment is a very old issue in business. Trade finance plays an important role in facilitating trade transaction between buyers and sellers. It is a form of short term banking facility to help the buyers and or sellers in managing its required cash flow in the short run. For decades banks worldwide have been practicing this conventional method of trade financing until recent years with emergence of the Islamic banking system.

CCCI President said the fundamental difference between the two is in their very concept. Islamic banking or trade finance is profit or loss concerned while the conventional banking system is fixed interest based. In international trade transaction, compliance issues and documentary requirements for Islamic trade finance are quite same of that of conventional banking system except that it operates in accordance with the rules of Shariah, known as fiqh al-Muamalat (Islamic rules on transactions). The Islamic banking industry in Bangladesh also continues to show strong growth since its inception in 1983. At present, out of 48 banks, 6 private commercial banks are operating as full-fledged Islamic banks. Besides 21 branches of 10 conventional banks are engaged in Islamic banking, Latif said.

Islamic banking still almost unhurts by global economic meltdown: ICCB President

http://nation.ittefaq.com/issues/2009/07/18/news0258.htm

Islamic banking still almost unhurts by global economic meltdown: ICCB President

BSS, Dhaka

ICCB President Mahbubur Rahman on Thursday said, the relative stability of Islamic banking institution, in current recession has drawn attention of all concerned.

Even the Vatican said banks should look at the rules of Islamic finance to restore confidence amongst their clients at a time of global economic crisis. Available information says that about US$ 1 trillion of assets are managed according to Islamic investment principles.

ICCB President Mahbubur Rahman made the observation while inaugurating a day-long ICC workshop on “International Trade Payment: Islamic Trade Finance” at the Bangladesh China Friendship Conference Centre organized for the bankers here today, said a release of ICCB.

The topic of Islamic Finance has emerged in recent decades as one of the most important trends in the financial world. There has always been a demand in a number of countries for financial products and services that conform to the Shariah (Islamic law).

With the development of viable Islamic alternatives to conventional finance, Muslims are beginning to find Shariah compliant solutions to their financial needs, Mahbubur Rahman mentioned. The ICCB President said, it is evident that Islamic finance was practiced predominantly in the Muslim world throughout the Middle Ages, fostering trade and business activities. In Spain and the Mediterranean and Baltic States, Islamic merchants became indispensable middlemen for trading activities.

It is claimed that many concepts, techniques, and instruments of Islamic finance were later adopted by European finances and businessmen, he said.

It is estimated that Islamic Banking is growing at a rate of 10-15 percent per year and with signs of consistent future growth. It is understood that Islamic banks have more than 300 institutions spread over 51 countries, plus an additional 250 mutual funds that comply with the Islamic principles, the ICCB President added.

He stated that Islamic banking is now an issue of great interest for many including Western non- Muslims, because the system still remains almost unhurt by the onging global financial crisis. The Islamic banking industry in Bangladesh also continues to show strong growth since its inception in 1980’s.

At present, out of 48 banks, 8 private commercial banks are operating as full- fledged Islamic banks. Besides, 21 branches of 10 conventional banks including 2 foreign banks are engaged in Islamic banking, he mentioned.

Chairman of ICCB Standing Committee on Banking Technique and Practices Mamun Rashid Said, besides its wide geographical scope, the expansion of Islamic finance has also been taking place across the whole spectrum of financial activities, ranging from retail banking to insurance and capital market investments. He observed that the global financial turbulence appears to have had a limited impact on the Islamic finance industry, which has been in an expansionary phase in recent years.

Iqbal Ibrahim Karmally, coordinator of ICC UAE Banking Commission and Head of Trade Finance at Sharjah Islamic Bank who conducted the workshop also spoke at the inaugural session. As many as 63 participants from different banks attended the workshop.

Islami Bank opens SME Service Centre at Muktagachha

http://www.thefinancialexpress-bd.com/search_index.php?page=image&image_id=5055

Islami Bank opens SME Service Centre at Muktagachha

Islami Bank Board of Directors Vice-chairman Zainul Abedin inaugurating as the chief guest the 12th SME Service Centre of the bank at Muktagachha in Mymensingh district.

Islami Bank Board of Directors Vice-chairman Zainul Abedin inaugurating as the chief guest the 12th SME Service Centre of the bank at Muktagachha in Mymensingh district.

FE Report

Islami Bank Bangladesh Limited (IBBL) Sunday opened its 12th SME Service Centre at Muktagachha in Mymensingh district, said a press release.

IBBL Board of Directors Vice-chairman Zainul Abedin inaugurated the SME Service Centre as the chief guest.

Muktagachha Upazila chairman Badar Uddin Ahmed and local municipality Mayor Mansurur Rahman Khan were present as the special guests on the occasion.

Chaired by IBBL Managing Director M Fariduddin Ahmad, the inaugural ceremony was addressed, among others, by its Shari’ah Council member Hasan Mohammad Moinuddin, Senior Vice-president and head of Mymensingh Zone Md Nazrul Islam Khan and In-charge of the SME Service Centre Md Ruhul Amin.

The IBBL has been working for the last 26 years to reach the service of Islamic Banking to the doorsteps of the people of the country, Mr Abedin said.

Demand for opening branches of the bank is increasing from all corners of the country, though the IBBL has already opened branches in all the 64 districts, he said.

“We are trying to flourish small and medium industries by opening SME service centres in those areas, where there is not any branch of the bank yet”, he added.

The IBBL managing director said the bank had continued the leading position in deposit, investment, import, export and remittance.

He called upon the IBBL employees to develop the standard of customer service to make the position of the bank firmer.

Islamic finance expo begins soon

http://nation.ittefaq.com/issues/2009/06/24/news0936.htm

Islamic finance expo begins soon

Business Report

With an objective to promote and popularize fast-growing Islamic financial schemes in the country, the Islamic Finance Expo-2009, an exposition of banking & non-banking financial institutions (NBFIs) having Islamic products and services, is going to be held in the city in August.

Event management firm EventPro in association with Communicare Dot Events, for the first time in the country, will organize the three-day exposition at the Bangladesh-China Friendship Conference Center.

Islamic Finance Award-09 will also be announced in line with the exposition to recognise the top performers among the banks, insurance and leasing companies dealing with Islamic or Shariah-based financial products or services.

Banks and NBFIs having Islamic schemes will be showcasing their Shariah-based products and services in 40 stalls and pavilions to highlight excellence in Islamic financial practices.

Open discussion on different topics related to Islamic finance will take place during the exposition.

IBBL registers phenomenal growths in all areas of business

http://www.thefinancialexpress-bd.com/2009/06/21/70468.html

IBBL registers phenomenal growths in all areas of business

FE Report

Islami Bank Bangladesh Limited (IBBL) has registered phenomenal growths in all areas of business and has been enjoying the status of the largest private commercial bank of the country in terms of deposit, investment and foreign exchange business, said IBBL managing director (MD) M. Fariduddin Ahmad.

“We’ve been handling more than 25 per cent of country’s total foreign remittance,” said Mr. Fariduddin in an interview on the occasion of inauguration of 200th branch of the bank.

The excerpts of the interview are given below:

1. Islami Bank Bangladesh Limited touched the milestone of 200th Branch of the Bank, please let know your feelings

M. Fariduddin Ahmad : Islami Bank Bangladesh Limited launched its banking operations through opening of a Branch at 75 Motijheel Commercial Area, Dhaka on 30.08.1983 with a view to establishing an interest-free banking system. We have reached the milestone of 200th Branches through the inauguration of Fulbaria Branch at Mymensingh. We have covered all the districts of the country including three hill tract districts. This year more 11 Branches will be opened. Considering the importance of Small and Medium Entrepreneurs we opened 10 SME centers last year and another 10 SME Service Centres will be opened in the current year at different places of the country. You know Islami Bank was established in such a challenging moment when the conventional banking system was not ready to welcome a banking system to be run in accordance with Islamic Shari’ah. After completing 26 years of our operations it has been proved that Islamic banking system is the indispensable reality of present day world. We are receiving large number of requests from all over the country to establish Branch of our Bank. We are trying our best for fulfillment of those requests within our limits. We earned highest profit among the banks in the country. Being inspired by our success another 7 (seven) banks are functioning as full pledged Islamic Banks while some local and foreign traditional banks opened branches for Islamic Banking. Now Islami Bank Bangladesh Limited has become the bank of mass people and the people of the country treat this bank as “My Bank”. This bank is the bank for all irrespective of cast, creed and religion. And for the sincere attempts of all people this success was possible. The bank flourished its image at home and abroad. We are committed to our honorable shareholders, valued clients and stakeholders to ensure the establishment of interest free banking system as per Islamic Shari’ah. We are extremely delighted on this occasion. In the same time we congratulate all on the occasion of inaugurating the 200th Branch at Fulbaria in Mymensingh.

2. What do think about the risks in Islamic Financial Institutions in the perspective of recession in World Economy.

M. Fariduddin Ahmad : The financial crisis around the world is mainly responsible subsequent recession in world economy. The causes of crisis identified so far are excessive and imprudent lending by Banks and financial Institutions, inadequate market discipline, unjustified expansion of the size of derivatives, excessive leverage, severe credit crunch, transactions involving speculation & gambling and greed. Islamic Banks and Financial Institutions are not engaged at such type of transactions. Therefore, they are protected from adverse impact of the crisis and facing less risk.

3. Islami Bank Bangladesh Limited maintained its superiority in banking sector in spite of economic recession. What are the facts behind this?

M. Fariduddin Ahmad : Transactions of Islamic Banks and Financial Institutions are backed by assets. Hence no adverse impact was experienced by any Islamic Bank and Financial Institutions around the globe. Besides, the people have greater amount of confidence on Islamic Banks and Financial Institutions.

4. What is the position of your bank regarding deposit, investment and foreign exchange business till May 2009

M. Fariduddin Ahmad : The total deposit of the Bank stood at Tk.214,910 million as on May 31 2009 registering a growth rate of 20%. The total investment stood at Tk.215,270 million registering a growth rate of 18% against corresponding period of the previous year. The total foreign exchange business stood at Tk.179,480 million (import-61,360 million, export-42,970 million and remittance 75,150 million).

5. Islami Bank Bangladesh Limited is handling 25% of total remittance of the country. Explain the reasons.

M. Fariduddin Ahmad : Handling of 25% of total remittance of the country by Islami Bank Bangladesh Limited is an outstanding achievement. We have built up proper capabilities and capacities at all our offices and branches to handle Wage earners’ Remittance. We have established relationship for this purpose with large number of renowned and reputed Banks and exchange houses and posted our own manpower at the places where Wage Earners’ are in large number. At home all our Branches are connected online for handling Wage Earners remittance and our manpower are well trained to provide efficient and quick service to the Wage Earners.

6. Now-a-days different banks are giving emphasis on SME banking. Let us know about the SME banking of IBBL.

M. Fariduddin Ahmad : SME sector is playing vital role in country’s GDP through socio-economic development and employment generation. It is not possible for any country to develop its economy keeping the large number of people out of development program- realizing the fact IBBL opened 10 SME service centers last year and another 10 SME service centres will be opened this year. Giving importance on the SME investment the Bank has already introduced a separate division for SME. IBBL disbursed Tk.38,402 million till March 31 2008 which is 19.01% of total investment. The Bank also arranges training program for the entrepreneurs. The women are given special priority in this sector. Besides, separate investment scheme for the women has also been introduced.

7. What is the contribution of IBBL in national economy?

M. Fariduddin Ahmad : Islami Bank Bangladesh Limited is playing vital role in national economy. The bank is investing in industry, commerce, education, real estate and health sector. IBBL invested almost 55% of total investment in industrial sector. IBBL disbursed more than Tk.20,970 million among 0.6 million people of 11,000 villages under Rural Development Scheme with a view to alleviate poverty from rural areas of the country. IBBL is one of the 10 highest tax payers in the country. IBBL built up quality manpower for banking sector. Islami Bank Bangladesh Limited is a model of Islamic banking in the world.

8. Most of the banks are functioning in city level. What is the position of Islami Bank in the development of rural economy.

M. Fariduddin Ahmad : Most of the people of our country live in the village. No nation can be developed if most of its people remain outside of development-realizing this fact IBBL opened 92 out of 200 Branches in rural areas. Besides, IBBL is trying to alleviate poverty from rural areas. IBBL introduced a special scheme named Rural Development Scheme for the rural people. Under this scheme small investment is allowed without security. Most of the investment clients under this scheme are women. About 600,000 people are the beneficiaries of this scheme.

9. What is the present status of automation in your Bank.?

Islami bank Bangladesh Limited developed the software for banking operations with the help of its own manpower. The Bank is going to set 200 own ATM booths and 500 POS. Now the customers can get the account information through SMS. All the Branches are well equipped with modern technology. Our SPOT Cash service ensures the payment of remittance within a couple of minutes.

Besides, IBBL introduced the following state-of-the-art technologies and services:

Web Portal for corporate clients facilitating them to see their account details over the internet.

Push/pull service for making query about account information and getting results in SMS feedback.

Automated Teller Machines (ATM)- IBBL has already 27 shared ATMs. Within September of the year more 50 own ATMs are going to be set up.

Data Centre (DC)- With 75 Branches, the largest number of Branches connected to Data Center providing smooth services.

Data Recovery Site (DRS): Own Data Recovery Site is going to be set up at the earliest.

One stop service is available in all corporate Branches.

Online facilities are available throughout the country.

10. What corporate social responsibilities are performed by your Bank?

M. Fariduddin Ahmad : IBBL is always aware about social responsibilities. It has a slogan “Pioneer in Welfare Banking”, so IBBL remembers this in all its activities. IBBL is the first in banking sector to introduce social activities. Apart from running the business with a welfare oriented view, the bank is committed to fulfill its corporate social responsibility and as such carrying out different welfare and humanitarian activities through the Islami Bank Foundation. The programs of Islami Bank Foundation are Income Generating Programs, Educational Programs, Health and Medicare Programs, Humanitarian Help Programs, Relief and Rehabilitation Programs etc. Other special schemes are Islami Bank Hospitals, Islami Bank Community Hospital, Islami Bank Medical College, Rajshahi, Monoram Islami Bank Crafts & Fashion, Service Centres, Islami Bank Institute of Technology, Islami Bank International School and College, Distressed Women Rehabilitation Centre, Bangladesh Cultural Centre, Islami Bank Medical College Nursing Institute, Islami Bank Health Technology Institute.

Islami Bank Bangladesh Limited is always aware of helping the poor students. Scholarship programs are implemented by Islami Bank Foundation with a view to encourage education.

Under the beautification program of Dhaka City Corporation, Islami Bank Bangladesh Limited is doing the work to enhance the beauty of the road of Dhaka City Corporation starting from Rajarbagh Traffic Signal to Kamalapur Railway Station by plantation of beautiful plants and trees on Road Island.

Islami bank Bangladesh Limited decided to provide financial support in favor of 4 families of army officials martyred in the incident of BDR Headquarters. Under this each family will be given Tk.40,000/- per month which will continue for 10 years.

11. What are your future plans?

We are very much confident to establish Islamic Banking in this country with the heartiest support of the people of the country. In this regard we are going to take many future plans to enrich the service of this Bank to every door of the people of the country. Our future plans are-

l We like to strengthen the program of eradication of poverty

l We like to enrich our self-estimation through solving unemployment problem.

l We like to shorten the gap between urban & rural life style.

l We want to open branches in less developed areas of the country.

l We like to stretch industrial sector by expanding our industrial investment.

l We like to invest in medium & small industrial sectors through which investment & asset may not be coiled in some of listed people or selected areas.

l We have a plan for developing a ‘Rural Development Organization’ for reaching the farthest corner of the country.

l We have a plan to initiate a ‘Khidmah card’ contesting against conventional ‘Credit Card’ considering Islamic Shariah.

l Expatriate Bangladeshis contribute a lot in the national economy. We are going to initiate new products for them through which they can invest their money after coming back to the country. We think they could apply their capacity in the project financing in home as they depicted in abroad. Thus they may be rehabilitated properly. Moreover they could assist for building up new industrial zone through remitting continuously.

l We dream for roaming all over the world with the assistance of Islami Bank Bangladesh Limited. And as a part of the dream we are planning for opening branches & booths in different parts of the world, specially, in London & Dubai.

l We wish to settle ourselves into the hearts of the people of the country and their cordial utterance should be “Islami Bank, My Bank, Our Bank.”

IBBL deposit marks 20pc growth

http://www.thefinancialexpress-bd.com/2009/06/07/68984.html

IBBL deposit marks 20pc growth

The total deposit of Islami Bank Bangladesh Limited (IBBL) rose to Tk 214.87 billion on 31 May, 2009 showing 20 per cent growth against the same period of last year. The total investment reached at Tk 204.97 billion showing the growth rate of 13 per cent against the same period of last year.

A performance review meeting of executives of head office, zonal heads and selected branch incumbents of the bank held Thursday disclosed the information.

Managing Director of the bank M Fariduddin Ahmad presided over the meeting, said a press release.

The meeting was also told that the bank handled foreign exchange business amounting to Tk 179.25 billion including import of Tk 61.13 billion, export of Tk 42.97 billion and collected remittance of Tk 75.15 billion up to last month.

Deputy managing directors Mohammad Shamsul Haque, Md Habibur Rahman and Md Setaur Rahman also attended the meeting.

Islami Bank will start lending to migrant families

http://www.thefinancialexpress-bd.com/2009/05/13/66358.html

Islami Bank will start lending to migrant families

FE Report

Islami Bank Bangladesh Ltd. (IBBL) will start lending migrant families and returned migrants to tap the potentials of investing the multi-billion dollars of remittance flowing into Bangladesh, officials said Monday.

The country’s biggest private bank, which handled US$1.26 billion remittances in 2008 financial year, will also provide advisory services and entrepreneurship training to potential migrant investors, they said.

“We’ve already opened 10 SME (small and medium enterprises) centres across the country to facilitate investments by migrants and their family members,” a bank official said.

He added, “For us, it is an untapped opportunity. But it is crucial for us to pave the way for their safe investments. I think, we are well-placed to cater to the financing needs of family members of migrants or a returned migrant.”

IBBL accounted for nearly 23 per cent of the total annual remittances that came in trickles in the country.

Officials said the bank, which follows Islamic sharia laws, will be delivering remittances as well as loans for any potential investor with a broader goal of ensuring “productive use” of remittances.

The step is part of a Bangladesh Bank plan to foster investments by individuals linked to overseas migration, thus giving a boost to the rural economy.

Central bank officials involved said already six non-government organisations have started lending out to migrant families located in 14 districts under a project, funded by the UK government.

Bangladesh Bank officials said microfinanciers have already the skilled staff and physical presence in communities through their microenterprise lending experience. Shakti Foundation, Uddipon, ASPADA and SSS are involved in the project.

Led by the central bank, the project will initially be delivered to nearly 2000 migrant families in over a dozen districts such as Dhaka, Chittagong, Noakhali and Munshiganj within this year.

Bangladesh chapter of International Alternative Financial Institutions (INAFI) is implementing the project, partly funded by the Remittance Payment and Partnership (RPP) project.

RPP officials said a number of microlenders have developed capacity to provide services to entrepreneurs including the provision of loans under the microfinance programme.

Microcredit loan sizes tend to be between Tk 5000 and Tk 30,000; while small enterprise loans vary from Tk 30,000 to Tk 300,000.

They said that there are a large number of families where at least one member is working abroad in migrant-populated areas.

“Many families have used their savings or mortgaged or sold land to enable the family members to migrate. And money sent home by them is built up into a substantial amount, typically between Tk 200,000 and Tk 1.0 million. But they find no effective channel to invest,” said Robert Smith, a project official, in a recent interview.

“So this programme will be of critical importance to those who want to see their hard-earned money find avenues of investment,” he added.

Last year, Bangladesh received US$ 9.0 billion in remittances, boosted by record 875,000 overseas jobs.

The country became top 10 remittance recipient nation in the developing world, according to the World Bank.

Islamic banking less risky

http://www.thedailystar.net/newDesign/news-details.php?nid=87068

Interview
Islamic banking less risky
Says top StanChart official

Afaq Khan

Afaq Khan

Sajjadur Rahman

Islamic banking is now an issue of great interest for many, including Western non-Muslims, because the system still remains almost unhurt by the ongoing global financial crisis.

Banks from the US to UK and China to India also prefer such banking.

“Islamic banking operates in real economy. This banking has no room for gambling, speculation, excess leverage, or the greed for windfall profit,” said Afaq Khan, chief executive officer, Islamic Banking of global finance giant Standard Chartered Bank.

Khan who was on a short visit to Dhaka had a conversation Tuesday with The Daily Star at StanChart’s Bangladesh headquarters, on prospects of Islamic banking in Bangladesh.

He joined StanChart in 2003 with a mandate to launch the Islamic business division for the bank. Since then, he has been responsible for the strategic build-up of a global Islamic banking business covering retail, corporate and investment banking with a wider product capabilities and award winning solutions.

Khan thinks the less risk is a major factor that contributes in growing Islamic banking.

“Conventional banking is riskier than Islamic banking because it deals with debt trading and keeps itself in market speculation, which European and American banks experienced,” he noted.

Another interesting feature is Islamic banking remains immune from the recession fallout, as the global financial institutions experienced, especially in the US and Europe.

Demand from the world’s 1.66 billion Muslims for investments compliant with their beliefs is soaring. Assets that go by Islamic law are currently estimated at $900 billion-$1 trillion. The annual growth rate is 15-20 percent.

Khan, who has 20 years of banking experience, believes Bangladesh could be a big market for Islamic banks as over 85 percent of the country’s nearly 150 million people are Muslims.

But he feels the business prospect would depend on diversification of products, services and the adequate training the officials concerned require.

“People here take much interest on the Islamic banking system. Some 99 percent customers prefer such banking,” observed Afaq Khan, who looks after StanChart’s Islamic banking services globally.

“Saadiq” is the brand of this bank’s Islamic banking, which has rolled out around 100 products and solutions relating to consumer and wholesale banking.

An Islamic bank traditionally generates its profits from Sharia-compliant investment activity. This profit is shared back with the bank’s customers at a pre-agreed ratio. An account holder is entitled to a share of these profits according to the funds he holds in his account.

This banking industry in Bangladesh also continues to show strong growth since its inception in 1983.

At present, out of 48 banks, 6 private commercial banks are operating as full-fledged Islamic banks. Besides 21 branches of 10 conventional banks are engaged in Islamic banking, Bangladesh Bank data shows.

Total deposits with Islamic banks and Islamic banking branches of the conventional banks in the country stood at Tk 34,730 crore by the end of June 2008. This deposit accounts for 24.4 percent of the deposits with all private commercial banks and 16.1 percent of the deposits with the total banking system.

Around Tk 34,910 crore is the total investment of the Islamic banks and Islamic banking branches have made, which is 26.8 percent of all private banks and 19.3 percent of the entire banking system.

Afaq Khan said Islamic banking differs from conventional banking, primarily because it does not look to charge or deliver interest.

“None can ‘make money from money’, instead, profit is generated through investment and trading,” Khan told The Daily Star.

The official said this return rate has to match the level of return provided by interest levels of conventional banking.

The global banking giant targets Bangladesh as one of the potential markets for its Islamic financial products and services.

As part of the move, the bank on Tuesday launched a home loan scheme titled “Saadiq Home Finance” in Dhaka.

“We are willing to offer more Islamic banking solutions to Bangladesh customers to cater to their needs,” Khan says.

Kamran Sunjoy Rahman, head of StanChart’s Islamic banking for Bangladesh, said launching more financial solutions to help customers are now under the StanChart’s financial management planning.

Rahman said the bank’s next plan is to launch Shariah-based business account for small and medium enterprises.

“Also, we eye Islamic investment banking,” he added.

Sandeep Bose, head of StanChart’s consumer banking, Bangladesh, Nepal and Sri Lanka, said “Saadiq” is growing faster than the bank’s conventional banking. But he declined to disclose the share of Saadiq in the bank’s total business portfolio.

On Islamic banking training for officials, Afaq Khan said such training is internally arranged.

“Courses are developed on the basis of key Islamic products and wider areas from a structuring, developmental, accounting and pricing viewpoint,” he added.

sajjad@thedailystar.net

StanChart launches Islamic home finance

http://www.thedailystar.net/newDesign/news-details.php?nid=86960

StanChart launches Islamic home finance

Star Business Report

Standard Chartered Bank plans to launch a number of Shariah-based products to strengthen its Islamic banking services in Bangladesh, officials said yesterday.

As part of the move, the bank yesterday rolled out a home loan scheme titled “Saadiq Home Finance” in Dhaka.

“We are willing to offer more Islamic banking solutions to Bangladesh customers to cater to their needs,” Afaq Khan, chief executive officer of Standard Chartered Saadiq, told reporters in a news briefing.

StanChart’s Islamic banking is called “Saadiq”.

“We are committed to bringing new products to Bangladesh. It is one of the few markets where we want to grow,” Khan said.

Kamran Sunjoy Rahman, head of StanChart’s Islamic banking for Bangladesh, said the new Saadiq home finance is part of a series of products to be launched by next year.

“We will roll out more financial solutions to help our customers in their financial management planning,” Rahman said.

He said the bank’s next plan is to launch Shariah-based business account for small and medium enterprises.

“Also, we are planning to launch Islamic investment banking,” he added.

On the new products, Khan said: “Our product strategy has always been a truly customer-centric approach. The launch of new products depends on the customers’ need.”

Standard Chartered Bangladesh has a wide variety of Islamic financial products, such as savings and current accounts, fixed deposit, credit card, personal and auto finance.

Officials said the new Saadiq home finance would provide potential as well as existing homeowners with a variety of choices in property purchases and renovation.

The maximum limit of the loan will be Tk 75 lakh. The scheme will be based on the concept of “Hire-Purchase under Shirkatul Melk”.

In Shirkatul Melk, co-ownership is formed between two or more persons who share the ownership of a tangible asset in an agreed proportion. One of these co-owners undertakes to buy in periodic installment of the proportionate share of the other co-owners until the full ownership of the asset.

Standard Chartered Islamic Banking in Bangladesh was launched in 2004 and has been growing significantly in the last two years.

Sandeep Bose, head of StanChart’s consumer banking in Bangladesh, Nepal and Sri Lanka, was also present at the briefing.

IBBL net profit crosses Tk 2.0b-mark

http://www.thefinancialexpress-bd.com/2009/04/22/64517.html

IBBL net profit crosses Tk 2.0b-mark

FE Report

Islami Bank Bangladesh Ltd (IBBL) has crossed Tk 2.0 billion-mark to earn net profit in a single year among the 30 private commercial banks (PCBs) in the country.

According to the latest audited financial accounts of IBBL, the bank earned Tk 2.674 billion as net profit in the year ended December 31,2008 against Tk 1.427 billion in 2007.

AB Bank Ltd, National Bank Ltd, Pubali Bank Ltd and Prime Bank Ltd bagged the second, third, fourth and fifth positions in earning net profits in 2008 with Tk 2.30 billion, Tk 1.517 billion, Tk 1.515 billion and Tk 1.24 billion respectively.

Started on March 30, 1983, the IBBL is now the largest private commercial bank in Bangladesh.

The IBBL profit before provision in the year ended December 31,2008 was Tk 7.95 billion against Tk 5.16 billion in 2007.

The bank’s paid-up capital rose to Tk 4.75 billion in 2008 from Tk 3.80 billion in 2007.

IBBL first crossed Tk 1.0 billion-mark in earning net profit in 2004.

The bank is going to inaugurate 15 new branches and 10 new SME service centers soon, according to IBBL sources.

As a result the number of IBBL branches will stand at 211 and SME Service Centers at 20.

The total deposit of the bank as on March 31,2009 stood at Tk 206.51 billion showing the growth rate of 19 per cent against the corresponding period of 2008.

The total investment reached at Tk 202.00 billion registering a 15 per cent growth against the corresponding period of 2008.

The bank handled foreign exchange business amounting to Tk.105.33 billion including import of Tk. 35.04 billion, export of Tk 25.71 billion and remittance of Tk.44.58 billion till March 31, 2009.

IBBL to open 15 branches, 10 SME centres soon

http://www.thefinancialexpress-bd.com/2009/04/14/63901.html

IBBL to open 15 branches, 10 SME centres soon

Islami Bank Bangladesh Limited (IBBL) is going to inaugurate 15 new branches and 10 new SME service centres in the country soon, says a press release.

With these the number of branches will stand at 211, and SME service centres at 20.

The branches of IBBL will be set up at Motijheel and Badda in Dhaka city, Sreenagar of Munshiganj, Khagrachari, OR Nizam Road and Raozan of Chittagong, Kotachandpur of Jhenidah, Chandina of Comilla, Matlab of Chandpur, Sundarganj of Gaibandha, Barogola of Bogra, Mohadevpur of Naogaon, Zindabazar of Sylhet, Bhandaria of Pirojpur and Fulbaria of Mymensingh.

The SME service centers will be inaugurated at Sonargaon of Narayanganj, Kalampur of Savar, Baro Darogar Hat of Chittagong, Kahalu of Bogra, Borhanuddin of Bhola, Santahar of Naogaon, Fultala of Khulna, Akhaura of Brahmonbaria, Daudkandi of Comilla and Muktagacha of Mymensingh.

IBBL has been able to hold the leading position in deposit, investment and handling foreign exchange business in private sector banking.

The total deposit reached Tk 206.51 billion on March 31, 2009 showing the growth rate of 19 per cent against the same period of the last year.

The total investment reached Tk 202.00 billion showing the growth rate of 15 per cent against the same period of the last year.

The bank handled foreign exchange business amounting to Tk 105.33 billion through import worth Tk 35.04 billion, export of Tk 25,71 billion and collected remittance of Tk 44.58 billion.

Through the new branches and SME service centres, services of IBBL will reach the rural areas of the country. In the meantime, the bank has started the largest online service through bringing the branches under online network.

IBBL foundation training course for probationary officers ends

http://www.thefinancialexpress-bd.com/2009/04/11/63645.html

IBBL foundation training course for probationary officers ends

FE Report

The concluding ceremony of ‘Foundation Training Course for Probationary Officers’ of Islami Bank Bangladesh Limited (IBBL) was held at the Islami Bank Training and Research Academy (IBTRA) auditorium in the city recently.

IBBL executive committee (EC) Chairman Mominul Islam Patwary was present in the function as the chief guest, said a press release.

Chaired by Executive Vice-President (EVP) and Director General of IBTRA Md Jafar Ullah, the function was attended, among others, by EVP and Director (training) Md Azizur Rahman, senior vice-presidents Mahmood Ahamed and Md Mizanur Rahman, and vice-presidents Md Omar Faruk Khan, Md Saidur Rahman, Md Rokan Uddin and Mohammad Abdullah.

Mr Patwary said Islami banking is now an acceptable and popular banking system to all.

Islami Bank Bangladesh Limited is developing fast and it is the reflection of expectation of the common people of the country, he said.

The bank is achieving a lot of success every year in deposit, investment and profit, he added.

SIBL to open 14 more branches this yr

http://www.thefinancialexpress-bd.com/2009/04/07/63294.html

SIBL to open 14 more branches this yr

Mehdi Musharraf Bhuiyan

Social Investment Bank Limited (SIBL), a private Islamic bank has embarked on its second consecutive year of massive expansion as the second generation private commercial bank is set to open 14 more branches countrywide in 2009.

In addition, the bank is also looking to set up five more SME Centers all around the country during the same time frame, the bank authority informed.

“We have obtained approval for the opening of 14 new branches along with five more SME centers earlier at the beginning of this year and hoping to complete this expansion by the end of 2009,” Abu Sadek Md. Sohel, Additional Managing Director of SIBL told The FE recently.

This sounds rather an ambitious turnaround for the Islamic bank after it was listed as a problem bank in October 2005 against the backdrop of signing Memorandum of Undertaking (MOU) with Bangladesh Bank and its subsequent failure to make good the adjusted capital shortfall, provisional shortfall as well as downsizing the higher percentage of classified investment.

Since then however, it has bounced back significantly by adopting various strategic planning while obtaining approval for issuance of 1:1 rights share offer from Securities and Exchange Commission (SEC) in the mid-2007.

Consequently, the Bank came out of the problem bank list by the end of that year and the succeeding annum of 2008 saw the opening of 4 new branches along with 5 SME centers following three consecutive years of stagnation when no expansion took place.

The upcoming expansion would increase the Bank’s number of branches by one and half times to 42. Currently, it works through 28 branches countrywide, 18 of which is situated in Dhaka metropolis.

“This expansion would begin with the opening of our 29th branch at Mohammadpur in the city by the turn of the next month (May), followed by another addition at the Lohagora of Chittagong at around the same time,” Abu Sadek said.

“Initially, we are opting to establish five to six branches by the end of this June and hopefully all the 14 branches would be operational by September,” Abu Sadek said, adding, “while the five SME centers would take time till November to kick off”.

“Eight of these 14 branches would be situated in the rural areas while three of them would be set up in district towns,” Sadek said. “Out of the remaining three, two of them will be based in Dhaka metropolis and one at the port city of Chittagong,” he added.

“Dhaka, Chittagong, Cox’Bazar, Comilla, Chandpur, Narayanganj and Sattkhira are the districts where these 14 branches will be situated,” he informed.

“However, no decision has been made yet about the possible location of the five new SME centers,” he added.

The expansion came against the backdrop of reviving year for SIBL in 2008 when the bank downsized its Classified Investment to 4.38 percent compared to 4.93 percent in 2007.

The bank made an operating profit of Tk.787.4 million in 2008, a whopping rise of 63.77 percent from the previous year.

Meanwhile, deposit of the bank, listed in the country’s bourses since 2000 grew by 22.65 percent and stood at Tk. 2409.98 million. Investment increased similarly at a rate of 21.35 percent from the previous year to Tk. 19951.30 million.

Paid up capital of SIBL in 2008 rose to Tk 1.30 billion from Tk 1.119 billion in 2007.

IBBL holds leading position in private sector banking

http://www.theindependent-bd.com/details.php?nid=121235

IBBL holds leading position in private sector banking
Economic Reporter

Islami Bank Bangladesh Limited (IBBL) has been able to hold the leading position in deposit, investment and handling foreign exchange business in private sector banking.

The total Deposit reached Tk.20,651 crore on March 31, 2009; showing the growth rate of 19 per cent against the same period of the last year. The total Investment reached Tk.20,200 crore showing the growth rate of 15 per cent against the same period of the last year. The Bank handles foreign exchange business amounting to Tk.10,533 crore including imported of Tk. 3,504 crore, exported of Tk.2,571 crore and collected remittance of Tk 4,458 crore. Islami Bank has kept its supremacy also in this sector.

The information was disclosed in a Performance Review Meeting of the top executives of Head office and Zonal heads of the Bank on April 4 at the Board Room of Islami Bank Tower. Prof. Abu Nasser Muhammad Abduz Zaher, Chairman, Board of Directors of the Bank was present at the meeting as the chief guest while Mominul Islam Patwary, Chairman, Executive Committee of the Bank was present as special guest. Presided over by M. Fariduddin Ahmad, Managing Director of the Bank, the meeting was addressed, among others, by Mohd Shamsul Haque, Mohammad Abdul Mannan, Md. Habibur Rahman and Md. Setaur Rahman, Deputy Managing Directors, Zonal Heads and top executives of the Head Office of the Bank, says a press release.

The meeting disclosed that IBBL has been discharging banking service through its own largest online network across the country. 111 branches out of 196 branches and 10 SME Service centres have already been brought under online service. The Bank has been providing modern banking service through ATM, Spot Cash, SMS Banking, e-IBS, SWIFT, Locker service and payment of utility bills. The Bank has taken initiative to enhance ATM service by setting up 200 more own ATM booths side by side existing 26 ATM booths.