Ibbl Investment Portfolio of

Investment Portfolio of Islami Bank Bangladesh Limited
1.1 Introduction:
Internship program is a partial requirement for the degree of MBA of MIU. Every MBA student is required to learn some practical knowledge within the pre-stipulated period by
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observing the day to day activities of an organization. In this regard my internship program started on 1st January, 2013 at Islami Bank Bangladesh Limited (IBBL). Islamic banks are unconventional and specialized financial institutions that perform most of the standard banking services and investment activities on the basis of profit and loss sharing system conforming to the principles of Islamic Shariah. Out of 56 banking institutions, 8 banks are backed by Islamic mechanism and worldwide accepted Islamic morality and established code of conduct. This paper, however attempts to describe the overall scenario of Islami Bank Bangladesh Limited which is performing beneath the umbrella of Islamic Shariah and approved welfare oriented principles and especially narrate the investment activities of IBBL.
1.2 Importance of Banking in the economics of Bangladesh:

A bank as a matter of fact is just like a heart in the economic structure and the Capital provided by it is like blood in it. As long as blood is in circulation the organs will remain sound and healthy. If the blood is not supplied to any organ then that part would become useless, so if the finance is not provided to agricultural sector or industrial sector, it will be destroyed. Loan facility provided by banks works as an incentive to the producer to increase the production. Many difficulties in the international payments have been overcome and volume of transactions has been increased. The modern economies in the world have developed primarily by making best use of the credit availability in their systems. An efficient banking system must cater to the needs of high end investors by making available high amounts of capital for big projects in the industrial, infrastructure and service sectors. At the same time, the medium and small ventures must also have credit available to them for new investment and expansion of the existing units. If the world was without banks, major part of the worlds population would be out of jobs. The financial sector would have never emerged in the first place. It would be like a human born without a backbone to support the torso. This means a void that would hinder the growth of an economy.
1.3 Objectives of the study:

The objectives of the study are: Following are the main objectives
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To analyze the different modes of investment of IBBL To find out the strength and weakness of different modes of Investment of IBBL.
1.4 Methodology:
Extensive literature survey was made on the topic to successfully complete the study and this helpful me to have an idea about the operations of Islami Banks & other Commercial Banks in Method of data collection: Observation method. Sources of information : used to Primary sources of data: list to Both primary and secondary information sources were complete this report. Direct interview with bank employees on the basis of check gather information regarding various modes of investment operation. Secondary sources of data: Annual report & Website of Islami bank Bangladesh Limited& others documents of the bank, Bangladesh bank circulars and regulations. Methods of Analysis
Analytical Review
:
:
Quantitative method.
Secondary data were tabulated and analyzed.
1.5 Limitation of the study:

There are some limitations of the study. These are given below: The study was limited to one bank Shortage of time for preparing the report was another constraint. Inadequate published information about bank also acted as a limiting factor. Resource constraint was also there. Insufficient information in websites of bank and in adequate database about Islamic banks in Bangladesh Bank hindered the depth of the study. Busy working environment and lack of sufficient well informed officials stood in the way of depth study. Some data could not been collected for confidentiality or secrecy of management
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2.1 Related literature:

Many research works were conducted in the field of Islamic banking. a brief summary of the earlier research works relevant to the concept operation, investment of the Islamic banking systems were found to have been made by some academicians, parishioners etc. in such a context, I summarize below some important and relevant work on traditional banking & Islamic banking.
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Abu Sina (2000), in his Ph. D thesis The Modes of Investment of Islamic Banks and Nationalized Commercial Banks: A Comparative Study stated the objectives to examined the similarities and dissimilarities of the modes, to analyzed the performance of the banks and identified the problems in investment. He shows that the modes of Islamic banks and those of conventional NCBs are completely different in nature. He found that modes of investment used by Islamic banks were more significant for the human welfare and social justice than the modes of investment used by NCBs, which provided material welfare only. He highlighted that the Islamic banks showed better performance than NCBs during 1992-1998. Ahmed babikir, (1989), showed in his Ph. D thesis titled the contribution of Islamic banking to Economic Development: A Case Study of Sudan that the Islamic banks invest in short term (and equity) finance. The researcher also found that there are different factors affecting the role, such as the character and strength of demand for financing productive projects, the attitude of the Islamic banks management, government policies and the structural rigidities characterizing the Sudanese economy. 1. Sina, M. Abu, The Modes of Investment of Islamic Banks and Nationalized Commercial banks: A Comparative Study, Ph.D thesis, Islamic University, Kushtia. 2. Babikir O.Ahmed, The Contribution of Islamic Banking to Economic Development: the case of the Sudan.Ph.d Thesis, University of Durham.U.K. In Abstracts of the Journal of Islamic Social Science, Vol.8, No.1, 1991.
2.2 Definition of Islamic Bank:

The organization of Islamic conference (OIC) defines an Islamic bank as a financial institution whose statutes, rules and procedures expressly state its commitment to the principals of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operation. According Islamic banking Act 1983 of Malaysia Islamic bank is a company, which carries on Islamic banking business. Islamic banking business means banking business whose aims and operations do not involve any element which is not approved by the religion of Islam. It appears from the above definitions that Islamic banking is system of financial intermediation that avoids receipt and payment of interest in its transactions and conducts its operations in a way that it helps achieve the objectives of an Islamic economy. That is why Islamic banks are often known as PLS-banks.
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2.3 Objectives of Islamic Bank:

The objective of Islamic banking is not only to earn profit, but also to do good and welfare to the people. Islam upholds the concept that money, income and property belong to Allah and this wealth is to be used for the good of the society. Islamic banks operate on Islamic principles of profit and loss sharing, strictly avoid interest, which is the root of exploitation and is responsible for large-scale information and unemployment. An Islamic bank is committed to do away with disparity and establish justice in the economy, trade, commerce and industry, build socio-economic infrastructure and create employment opportunities.
2.4.1 RIBA and its basic features are:

The word used by the Quran concerning interest is Riba. The literal meanings of Riba are money increase, increase of anything or increment of anything from its original amount (Maududi 1979, p.84). However, all increases are not considered as Riba in Islam. Money may increase in business activities as well. This increase is not at all considered as Riba. The increase, instead of being prohibited (Haram), is approved (Halal) in Islam. Islam prohibits only those increases that are charged on the loan with a prefixed rate. Muslim scholars equate interest with Riba. In the Shariah, Riba technically refers to the premium that must be paid by the borrower to the lender along with the principal amount as a condition for the loan or for an extension in its maturity (Chapra 1985,p.64). In other words, Riba is the predetermined return on the use of money. In the past there has been dispute about whether Riba refers to interest or usury, but there is now consensus among Muslim scholars that the term covers all forms of interest and not only excessive interest (Khan 1985, p.52).
2.4.2 Basic characteristics of Riba as are:

Origin of riba is loan(Quard or Dayn) Riba is excess over and above the principal loan Riba is charged or paid only as a condition of loan or time and no other recompense, price or exchange value is paid for the excess or Riba Riba is related with time and become double and redouble and multiple with passage of time
Riba is not related with the result of business.
2.4.3 RIBA and Profit

Most of the persons equate Riba with profit. In effect, they are fundamentally different from each other. These misunderstanding will be removed if we look at the differences between Riba and Profit. These differences are highlighted below:
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RIBA
Profit
1. When money is charged, its imposed When money is used in trading its uncertain positive and define results Riba result is profit. 2. By definition, Riba is the premium paid by By definition, profit is the difference the borrower to the lender along with principal between the value of production and the cost amount as a condition for the loan. of production. 3. Riba is detrmined, and hence there is no Profit is post-determined, and hence its uncertainty on the part of either the givers or amount is not known until the activity is the takers of loans. done. 4. Riba cannot be negative, it cant best be very Profit can be positive, zero or even low or zero. negative. 5. From Islamic Shariah point of view, it is From Islamic Shariah point of view, it is Haram. Halal. Table-2.1: Difference between RIBA and Profit
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2.5 The relationship between Banking system and Islam

ISLAM
AQIDAH
SHARIAH
AKHLAQ
IBADAT
MUAMALAT
POLITICAL ACTIVITIES
ECONOMIC ACTIVITIES
SOCIAL ACTIVITIES
BANKING &FINANCIAL ACTIVITIES
Figure-2.1: The Relationship between Banking System and Islam. Source : Arif, M (1982).
Conventional Bank
Bank Bank
Cash
Bank Bank 4. Principle Investment Client Client
1. Loan
3. Good
2.
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Pa yment
Suppli Suppli er er
Islamic Bank
Bank Bank
2. Good
4. Cost plus agreed profit
3. Goods 1. Cash Payment
Bank Bank Client Client
Supplier Supplier
Figure-2.2: Banking Procedures of Islamic & commercial Bank
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ISLAMI BANK BANGLADESH LIMITED 3.1.1 Introduction

Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur'an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. With the active co-operation and participation
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of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh.
3.1.2 The History of Islami Bank Bangladesh Limited (IBBL)

Islami Bank Bangladesh Limited (hereinafter called IBBL) was established on March 13, 1983 as a public limited company under the Companies Act, 1913 (amended in 1994). The bank started commercial operation on March 30, 1983 under the ambit of Banking Companys Ordinance 1962, later on the Banking Companies Act, 1991 as the first interestfree Islamic Shariah based commercial bank. IBBL issued share to the public in 1985 and positioned in the Blue Chip Index of countrys both bourses i.e. DSE20 and CSE30. Its authorized capital and paid up capital is TK. 5,000 million and TK. 3,802 million respectively. IBBL is the first ever issuer of Mudaraba Perpetual Bond in the country worth of Tk. 3,000 million. IBBLs well diversified product line offers a wide range of commercial banking services both asset-based and liability based. It is pioneer in introducing Islamic banking and created a strong brand image by offering wide range of Islamic investments and deposit schemes. The bank was sponsored by Foreign Institutions, local institutions, a group of local businessmen representing various business groups and other important personalities of Middle East and Europe. The corporate Head Office of the Bank is at its own premises at Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka.
3.1.3 Aims and objectives

To conduct interest-free banking To establish participatory banking instead of banking on debtor creditor relationship To invest on profit and risk sharing basis To accept deposits on Mudaraba & Al-Wadeah basis To establish a welfare-oriented banking system To extend co-operation to the poor, the helpless and the low-income group for their economic up liftmen To play a vital role in human development and employment generation To contribute towards balanced growth and development of the country through investment operations particularly in the less developed areas. To contribute in achieving the ultimate goal of Islamic economic system
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3.1.4 Mission
To establish Islamic banking through the introduction of welfare oriented banking and also ensure equity and justice in the field of all economic activities, achieve balanced growth and equitable development through diversified investment operations particularly in the priority sectors and less development areas of the country. To encourage social economic up liftmen and financial services to the low income community particularly in the rural areas.
3.1.5 Vision
The vision of IBBL is to always strive to achieve superior financial performance, be considered a leading Islamic Bank by reputation and performance. To establish and maintain the modern banking techniques, to ensure the soundness and development of the financial system based on Islamic principles and to become the strong and efficient organization with highly motivated professionals, working for the benefit of people, based upon accountability, transparency and integrity in order to ensure stability of financial system. Try to encourage savings in the form of direct investment. Try to encourage investment particularly in projects, which are more likely to lead to higher employment.
3.1.6 Goals and objective of the Bank:

To conduct interest-free banking. To establish participatory banking instead of banking on debtor-creditor relationship To invest through different modes permitted under Islamic Shariah. To accept deposits on profit-loss sharing basis. To establish a welfare-oriented banking system. To extend co-operation to the poor, the helpless and low-income group for their economic development. To play a vital role in human development and employment generation. To contribute towards balanced growth and development of the country through investment operations particularly in the less development areas. To contribute in achieving the ultimate goal of Islamic economic system.
3.1.7 General Banking Functions of IBBL

General banking activities of IBBL includes the following:
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a) b) c) d) e) f) g) h) i) j)
Mobilization of deposits Receipts and payment of cash Handling transfer transaction Operations of clearing house Maintenance of accounts with Bangladesh bank and other Banks. Collection of cheques and bills Issue and payment of Demand Draft, Telegraphic transfer and Payment Order. Executing customers standing instructions. Maintenance of safe deposit lockers Maintenance of internal accounts of the bank.
While doing all the above noted work IBBL issue cheque-book, Deposit account operating form, SS cards, cheque book, ledgers, cash books Deposit account ledgers, preparation statements of accounts and pass book, balance different accounts and calculates profits.
3.1.8 Management of IBBL

Islami Bank Bangladesh limited is being managed by a board of directors comprising foreigners and local. An executive committee is formed by the board of directors for efficient and smooth operation of the Bank. Besides a management committee looks after the affairs of the bank.
Organizational Structure of the Company
Figure-3.1: Organizational Structure of the Company
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3.2 Corporate information: (As on Diary 2013 of IBBL)

Date of Incorporation Starting of 1st Branch(Local office, Dhaka) Formal Inauguration Share of Capital Local Shareholders Foreign Shareholders Authorized Capital Paid-up Capital Deposits Investment Foreign Exchange Business Equity Zones Number of Branches(Including SME/Agriculture Branches) Number of Shareholders Manpower No. of own ATM Booths No. of share ATM Booths 37.76% 62.24% Tk. 20,000.00 million Tk. 12,509.64million Tk. 4,16,109.00 million Tk. 4,14,629.00 million Tk. 648303.00 million Tk. 38,804.00 million 14 276 60,173 12,06 192 1400 Table no.3.02: Corporate Information of IBBL 13th March 1983 30th March 1983 12th August 1983
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4.1 Introduction
Investment is the action of deploying funds with the intention and expectation that they will earn a positive return for the owner (Brokington 1986, p.68). Funds may be invested in either real assets or financial assets. When resources are used for purchasing fixed and current
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assets in a production process or for a trading purpose, then it can be termed as real investment. The establishment of a factory or the purchase of raw materials and machinery for production purposes are examples in point. On the other hand, the purchase of a legal right to receive income in the form of capital gains or dividends would be indicative of financial investments. Specific examples of financial investments are: deposits of money in a bank account, the purchase of Mudaraba Savings Bonds or stock in a company. Ultimately, the savings of investors in financial assets are invested by the respective company into real assets in the form of the expansion of plant and equipment. When money is deposited with an Islamic Bank, the bank, in turn, makes investments in different forms approved by the Islamic Shariah with the intent to earn a profit. Not only a bank, but also an individual or organization can use Islamic modes of investment to earn profits for wealth maximization.
4.2 Investment Objectives of IBBL

The objectives and principles of investment operations of the Banks are: The investment fund strictly in accordance with the principles of Islamic Shariah. To diversifies its portfolio by size of investment, by sectors (public and private), by economic purpose, by securities and by geographical area including industrial, commercial and agricultural. To ensure mutual benefit both for the Bank and the investment client by professional appraisal of investment proposals, judicious sanction of investment, close and constant supervision and monitoring therefore. To make investment keeping the socio-economic requirement of the country in view. To increase the number of potential investors by making participatory and productive investment. To finance various developments schemes for poverty alleviation, income and employment generation with a view to accelerating sustainable socio economic growth and up liftmen of the society. To invest in the form of goods and commodities rather than give out cash money to the investment clients. To encourage social up liftmen enterprises.
To shun even highly profitable investment in fields forbidden under Islamic Shariah and is harmful for the society.
4.3 Investment Functions of IBBL:

IBBL invests its money in various sectors of the economy through different modes and permitted by Shariah and approved by the Bangladesh Bank. The modes of investment are as follows:
Bai- Mechanism A) Bai-Murabaha B) Bai-Muajjal C) Bai-Salam D) Bai-Istisaa E) Bai-Asraf
Share Mechanism A) Mudaraba B) Musharaka Page 16 of 48
Ijara Mechanism A) Hire Purchase Under shirkatul Melk
One by one are discussed below:
4.3.1 Bai-Modes: 4.3.1.1 Bai-Murabaha:

Meaning of Murabaha: The terms "Bai-Murabaha" have been derived from Arabic words Bai and Ribhun. The word 'Bai' means purchase and sale and the word Ribhun means an agreed upon profit. Bai-Murabaha" means sale for an agreed upon profit. Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the buyer at a cost plus an agreed upon profit payable today or on some date in the future in lump-sum or by installments. The profit may be either a fixed sum or based on a percentage of the price of the goods. Types of Murabaha: In respect of dealing parties Bai-Murabaha may be of two types Ordinary Bai-Murabaha, and Bai-Murabaha order on and Promise.
4.3.1.2 Bai-Muajjal (Deferred Sale)

Meaning of Bai-Muajjal: The terms "Bai" and "Muajjal" are derived from the Arabic words 'Bai' and Ajal. The word 'Bai' means purchase and sale and the word 'Ajal' means a fixed time or a fixed period. "Bai-Muajjal" is a sale for which payment is made at a future fixed date or within a fixed period. In short, it is a sale on credit.
4.3.1.3 Bai-Salam:
Meaning of Bai-Salam:
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Bai-Salam is a term used to define a sale in which the buyer makes advance payment, but the delivery is delayed until some time in the future. Usually the seller is an individual or business and the buyer is the bank. The Bai-Salam sales serve the interests of both parties (Ibid). 1. The seller receives advance payment in exchange for the obligation to deliver the commodity at some later date. He benefits from the Salam sale by locking in a price for his commodity, thereby allowing him to cover his financial needs whether they are personal expenses, family expenses or business expenses. 2. The purchaser benefits because he receives delivery of the commodity when it is needed to fulfill some other agreement, without incurring storage costs. Second, a Bai-Salam sale is usually less expensive than a cash sale. Finally a Bai-Salam agreement allows the purchase to lock in a price, thus protecting him from price fluctuation.
4.3.1.4 Istisna'a Sale:

Definition of Istisna'a Sale: The Istisna'a sale is a contract in which the price is paid in advance at the time of the contract and the object of sale is manufactured and delivered later (IDB 1992, p.28). The majority of the jurists consider Istisna'a as one of the divisions of Salam; therefore, it is subsumed under the definition of Salam. The Purchaser is called 'Mustasnia' contractor and the seller is called 'Sania' maker or manufacturer and the thing is called 'Masnooa', manufactured, built, made (ABIIB). Islamic banks can utilize Istisna'a in two ways. 1. It is permissible for the bank to buy a commodity on Istisna'a contract then sell it after receipt for cash or deferred payment. 2. It is also permissible for the bank to enter into a Istisna'a contract in the capacity of seller to those who demand a purchase of a particular commodity and then draw a parallel Istisna'a contract in the capacity of a buyer with another party to manufacture the commodity agreed upon in the first contract.
4.3.2 Ijara Modes

4.3.2.1 HIRE PURCHASE UNDER SHIRKATUL MELK (HPSM):
Hire purchase under shirkatul melk is a special type of contract which has been developed through practice. Actually, it is a synthesis of three contracts: 1. Shirkat 2. Ijarah 3. Sale Sirkatul Melk: Shirkat means partnership. Shirkatul melk means share in ownership. When two or more persons supply equity, purchase an asset, own the same jointly, and share the benefit as per
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agreement and bear the loss in proportion to their respective equity, the contract is called Shirkatul Melk contract. Ijarah: The term Ijarah has been derived from Arabic words Ajr and Ujrat which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of service of an asset. Ijarah has been defined as a contract between two parties, the Hiree and Hirer where the enjoys or reaps a specific service or benefit against a specific consideration or rent from the asset owned by the Hiree.It is a hire agreement under which a certain asset is hired out by the Hiree to a Hirer against fixed rent or rentals for a specified period. Sale: This is a sale contract between a buyer and seller under which the ownership of certain goods or assets is transferred by seller to the buyer against agreed upon price paid/ to be paid by the buyer. Thus, in hire purchase under Shirkatul Melk mode both the bank and the client supply equity in equal or unequal proportion for purchase of an asset like land , building, machinery, transport etc. purchase the asset with that equity money ,own the same jointly, share the benefits as per agreement and bear the loss in proportion to their respective equity. The share, part or proportion of the asset owned by the bank is hired out to the client partner for a fixed rent per unit of time for a fixed period. Lastly, the bank sells and transfer the ownership of its share/ part/portion to the client against payment of price fixed for that part either gradually part by part or in lump sum within the hire period or after the expiry of the hire agreement. Stages of HPSM: HPSM has got three stages: 1. Purchase under joint ownership 2. Hire and 3. Sale and/ transfer of ownership to the other partner hirer.
4.3.2.3 Qard Hasan (Benevolent loans):

Qard Hasan is a contract in which one of the parties (the lender) places into the ownership of the other party (the borrower) a definite parcel of his property, in exchange nothing more than the eventual return of something in the same value of the property loaned. Ausaf Ahmad (1998, p.49) mentioned that since interest on all kinds of loans is prohibited in Islam, a loan that is to be given in accordance with the Islamic principle, has to be, by definition, a benevolent loan (Qard Hasan) i.e. a loan without interest. It has to be granted on the grounds of compassion, i.e. to remove the financial distress caused by the absence of
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sufficient money in the face of dire need. Since banks are profit driven organizations, it would seem that there is not much opportunity for the application of this technique. However, Islamic banks also play a socially useful role. Hence they make provisions to provide Qard Hasan besides engaging in income generating activities.
4.3.3 Share Modes

4.3.3.1 Mudaraba:
Definition of Mudaraba: The term Mudaraba refers to a contract between two parties in which one party supplies capital to the other party for the purpose of engaging in a business activity with the understanding that any profits will be shared in a mutually agreed upon. Losses, on the other hand, are the sole responsibility of the provider of the capital. Mudaraba is also known a Qirad and Muqaradah (Shirazi 1990, p.31).
4.3.3.2 Musharaka (Partnership):

Meaning of Musharaka:
The word Musharaka is derived from the Arabic word Sharikah meaning partnership. Islamic jurists point out that the legality and permissibility of Musharaka is based on the injunctions of the Qura'n, Sunnah, and Ijma (consensus) of the scholars. It may be noted that Islamic banks are inclined to use various forms of Shariakt-al-Inan because of its builtin flexibility. At an Islamic bank, a typical Musharaka transaction may be conducted in the following manner. Types of Musharaka: Musharaka may take two forms: i) Permanent Musharaka and ii) Diminishing Musharaka. Diminishing Musharaka: Diminishing or Digressive Musharaka is a special form of Musharaka, which ultimately culminates in the ownership of the asset or the project by the client. It operates in the following manner. The Bank participates as a financial partner, in full or in part, in a project with a given income forecast. An agreement is signed by the partner and the bank, which stipulates each party's share of the profits. However, the agreement also provides payment of a portion of the net income of the project as repayment of the principal financed by the bank. The partner is entitled to keep the rest. In this way, the bank's share of the equity is progressively reduced and the partner eventually becomes the full owner.
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4.4 Welfare Investment Schemes of Islami Bank Bangladesh Limited:

Islami Bank Bangladesh Limited (IBBL) offer Twelve Welfare Investment Schemes for the Welfare of population of Bangladesh. The Welfare Investment Schemes of IBBL are as Follows: Household Durable Scheme. Investment Scheme for Doctors. Small Business Investment Scheme. Housing Investment Scheme. Transport Investment Scheme. Car Investment Scheme. Rural Development Scheme (RDS). Agriculture Implement Investment Scheme Micro Industries Investment Scheme. Mirpur Silk Weavers Investment Scheme. Industry Investment Scheme. Investment on Real Estate.
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Investment Portfolio of IBBL

5.1 INTRODUCTION: Beloved people of Bangladesh given a space for Islami Bank in the year 1983 with a hope to perform their activities in banking sector in accordance with the rules of Islamic Sharia`h. Islami Bank Bangladesh Limited has not only able to implement that dream of people into the reality but also established their self as a key-player in banking sector of Bangladesh. In some cases IBBL has been playing a leading role as captain in this industry. The Bank has already been able to earn the trust of every section of people of the country, the huge amount of deposit Tk.4,16,035 million of the bank is the indicator of this faith. As a developing partner of country the bank has already invested Tk.3,87,619 million in different sector of economy which is contributing a lot to the growth of GDP. 5.2 GLOBAL ECONOMY: Despite some scattered signs of improvement in recent months, the world economic situation
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and prospects continue to be challenging. After a marked slowdown, the growth of global economic was halfhearted in 2012. Most developed economies are still struggling to overcome the economic sadness originating from the financial crisis. Developed countries, especially in Europe, continue to struggle to break through this vicious circle. 5.3 NATIONAL ECONOMY In the middle of the recession in Euro Zone and deadlock with US fiscal policy, the economy of Bangladesh has passed just concluded year 2012 with mixed experience where successes in Remittance, Ready Made Garments (RMG) and agriculture are lighted with the darkness in sectors like financial mislead, excessive government borrowing and instable power sectors. Deceive in financial sectors particularly Hall-Mark scam, reckless government borrowing from private sectors and frequent accidents and employee dissatisfaction in RMG sector, and instable energy sector (Electricity & Gas) is fading the image of countrys economy. The countrys remittance in Financial Year 2011-12 that has played a vital role to maintain import payment and foreign exchange demand. But it is disappointing for Bangladesh that some promising destinations have shut their door for Bangladeshi workers. Agriculture, the third most important pillar of Bangladesh economy, secured the internal economy. 5.4 BANKING SCENARIO: 5.4.1 Increase in Bad Loan: The immediate past year was a tough year for banking sector. Bad loan has increased by more than Tk.7000 crore to roughly Tk.36,000 crore till September 2012. Adding the amount of Hall-Mark scam overdue stood at around Tk.40,000 crore. Some banks incurred huge losses from the Share market business. Foreign exchange market was highly volatile as value of taka against Dollar ranged from Tk.88 to Tk.79. The contractionary monetary policy played a crucial role to gain the value of Taka. 5.4.2 Liquidity crisis: Severe liquidity or cash crisis has been going on in the banking sector. Banks have become under pressure to get rid of this problem. As immediate solution to crises, banks are increasing their interest rates on deposits. Their deposit management cost is increasing as they are collecting deposits at a high rate. Some of them are increasing their lending rate to cope up with this additional cost. As the interest rate on bank financing is rising, the cost of investment of the entrepreneurs is also increasing. As a result cost of production is rising. The entrepreneurs are avoiding bank financing as their cost of production is increasing. According
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to the bank analysts, the situation in the banking sector is not good at all. 5.4.3 Increase of Profit Rate on Investment: The businessmen have become worried with the increase of the profit rate. The commodity price is getting out of the reach of the mass people. The businessmen are apprehending that the inflation will increase further in the future. The Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) has urged intervention of the Bangladesh Bank on reducing the higher profit rate, keeping the service charges within the tolerable level, and revising the profit rates for the financing in the productive sector. 5.4.4 BBs Policy for Provision and Investment Rescheduling: The new guidelines of Bangladesh Bank for provision and investment rescheduling created the panic in the banking sector in the middle of the year but at the end of the year the central bank revise their guidelines which relax a bit of the bankers.
5.5 ECONOMIC FORECASTING: Slow pace of exports and imports that marked the just concluded year might pose major threats to the economy. Besides, high spread in investment and deposit rate and massive government borrowing from private sectors cut the investment of private sector. The Padma bridge graft allegation, Hall-Mark scam, Destiny fund embezzlement, fire incidence at a RMG unit of Ashulia, and political instability may slower the pace of economic growth. Already USA has expressed that if working environment in RMG sectors in our country not develop they will cut the opportunity of tariff free export (Prothom Alo dated 07.01.2013). In encourage of these obstacles, World Bank has degraded the status of Bangladesh to 5 steps and ranked the country at the bottom of 185 countries in respect of electricity connection. It has huge negative connotation that leads to slower investment. 5.6 OPPORTUNITIES: the time of depreciation of taka.
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In a situation as above investment must be made to profitable productive sectors. Productive export earning manufacturers may be encouraged as a new client by IBBL. Special focus will be given to non-traditional exporters & high value yielding Similarly industries that produce import substitute products will also be benefited at
exporters.
to
As bankers we will have to hunt clients with profitable import substitute projects. Profitable industries that uses local raw material will be given highest priority. In selecting clients, we need to give special attention to projects profitability, ability service financial expenses and resiliency.
5.7 STRATEGIES AND ACTION PLAN FOR 2013:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. To observe strictly the principles of Islamic Shariah in Investment operations. To give preference to Short-term investment to Long-term investment for maintaining a balanced portfolio. To ensure optimum utilization of the Banks investible fund. To look into profitability of Investments. To ensure safety and security of Investments. To enhance capacity and capability of the employees of the Bank to handle investment operations through conveying appropriate training. To arrange training and motivational programs for investment clients and their officials on Islamic Banking. To develop new Entrepreneurs. To induct best of the best investment clients, check migration of good investment clients. To launch dynamic campaign to hunt good investment clients. To engage each and every employee of the Bank to invent good business arena. To be aware of over-financing and under financing and to give prompt decision on investment proposals. To have a clear picture of investment opportunities in the market Size, Sector, Geographical Area, Economic Purpose, Security-wise, density wise and educational level. To obtain proper Primary and Collateral Securities and ensure proper Supervision, Monitoring and Control of Investment. To keep our investment cost minimum to offer competitive and lower rates and facilities to the clients. To give due consideration to high risk, high return and low risk, low return investment proposals. To encourage investment involving less risk weight. To deploy at least 60% of mobilized fund locally by the concerned Branch. To observe strictly the Single Party Exposure Rule. To prefer Syndication for large investment. To give due importance for investment in various development, employment generation & poverty alleviation schemes like Real Estate, Transport, Doctors, RDS, Small Business, HDS, Agricultural Implements etc. To achieve diversification plan of the investment portfolio by Size, Sector, economic purpose and Geographical Area as per 5 Year Investment Policy And Perspective Investment Plan 2012-2016. To give emphasis on national priority sectors like Green Banking projects, financing farmers etc. Explore suitable sector & areas for cluster investment in line with Govt. Agriculture Policy & Bangladesh Bank directive. To fix up individual targets from the beginning of the year for recovery of overdue, classified, rescheduled and written off investment. To give more attention and continuous effort for recovery of instalment
Page 25 of 48
27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41.
overdue against term and rescheduled investment. To take precautionary initiatives to avoid fresh overdue investment. To fix up a time frame for early settlement of top overdue clients. To uphold the existing leadership in the market. To give preference to increase investment up to the size of Tk.500 million and to reduce investment above the size of Tk. 500 million. To discourage investment in Spinning and Textile sector. To encourage investment in export oriented sector. Branch must follow/comply with the terms and conditions of sanction advice before disbursement. To provide due importance to customer orientation. To give preference to make investment in SME To comply strictly the 4 point commitments of investment. To give concentration in consolidation of branch investment. To list missing clients of the branch and take appropriate steps to get back them. To prepare an exit plan with those clients who are not performing well. To arrange early adjustment of investment before maturity and allow applicable rebate to them. To give priority in the following sectors: i. Agro based innovative projects; ii. Environment friendly projects; iii. RMG projects iv. PPP projects through Mudaraba Sukuk or any other suitable mechanism. v. Renewable power projects etc.
Page 26 of 48
5.8 Performance of Investment in 2013:

5.8.A. GENERAL ISSUES
1. General Investment: General Investment stood at Tk.387,619 million in 2012 as against Tk.324,099 million in 2011. Additional investment of Tk.63,520 million has been deployed during the year 2012. Achievement of the target is 106% with 19.60% that was 15.83% in 2011, 22.80% in 2010, 19.16% in 2009 and 24.18% in 2008. Achievement of Ceiling is 106% with 20% growth that was 15.83% in 2011, 22.80% in 2010, 19.16% in 2009 & is
24.18% in 2008 2. Investment Income: Income from General Investment stood at Achievement of Target Tk.41,392 million in 2012, as against Tk.30,868 million in 2011, 110% showing the growth rate of 34% in 2012 that was 22% in 2011, 21% in with 34% growth 2010 and 6% in 2009. The bank achieved the yearly target by 110%. that was 22% in 2011,
21% in 2010 & 6% in 2009 3. Induction of new Investment Clients: During the year 2012, 54297 New Clients inducted 54,297 new Investment clients have been inducted as against 47,733 clients in 2012 as against 47733 in inducted in 2011 that was 35679 in 2010 and 11689 in 2009. Average 2011 induction of new Investment Client is 4525 per month in 2012 as against Monthly average : 3978 Clients in 2011 that was 2981 in 2010 and 974 in 2009. 4525 clients in 212 against 3978 in 2011 4. Shariah Compliance: Doubtful Income due to Shariah lapses has Doubtful Income decreased decreased by 3.65% from 4.50% of 2011 to 0.85% of 2012 which was from 8.66% in 2008. 13.34% in 2006 & 57.07% in 2000. 4.50% in 2011 to 0.85% in 2012
5.8.B. OVERDUE, CLASSIFIED, RESCHEDULED AND WRITTEN OFF INVESTMENT

1. Overdue investment increased by Tk.3176 million during the year Overdue Investment 2012 from Tk.6435 million to Tk. 9611 million representing 2.48% to increased from 1.99% (in 2. total General Investment in 2012 as against 1.99% in 2011. 2011) to 2.48% in 2012. Classified investment increased by Tk.5046 million during the year Classified Investment 2012 from Tk.8292 million to Tk.13338 million representing 3.44% to increased from 2.56% (in 3. total General Investment in 2012 as against 1.99% in 2011. 2011) to 3.44% in 2012. Rescheduled investment decreased by Tk.1342 million during the year Rescheduled Investment 2012 from Tk.32,298 million to Tk. 30,956 million representing 7.99% decreased from 9.97% (in 4. to total General Investment in 2012 as against 9.97% in 2011. 2011) to 7.99% in 2012. Written off investment decreased by Tk.292 million during the year Written off Investment 2012 from Tk.2737 million to Tk3029 million representing 0.78% to decreased from 0.84% (in total General Investment in 2012 as against 0.84% in 2011. 2011) to 0.78% in 2012.
5.8.C.2. ECONOMIC PURPOSE-WISE INVESTMENT
Page 27 of 48
1.
Investment against Agriculture & Agro-based Industry stood at Tk. 22,427 million showing a decrease by Tk. 7,851 million from Tk.30,278 million. Investment in this sector stood at 5.79% showing a decrease by 3.56% from 9.34% of 2011, as against 11.75% allocated in the plan. Now the figure shows near actual position which was shown inflated earlier due to posting of wrong E.P. Code by the branches.
Decreased by 3.56% from 9.34% of 2011 (shown inflated due to wrong posting of E.P. Code by the branches) to 5.79% in 2012. Increased by 5.52% from 43.86% of 2011 to 49.38% in 2012 with 34.64% growth. Decreased by 3.36% from 32.52% of 2011 to 29.16% in 2012 with 7.23% growth. Increased by 0.43% from 5.56% of 2011 to 5.99% in 2012 with 28.95% growth. Decreased by 0.34% from 2.12% of 2011 to 1.78% in 2012 with 0.45% growth. Increased by 0.50% from 2.18% of 2011 to 2.68% in 2012 with 46.96% growth. Decreased by 0.19% from 1.42% of 2011 to 1.23% in 2012 with 3.81% growth.
2.
Industrial Investment stood at 49.38% showing an increase by 5.52% from 43.86% of 2011, as against 40.54% allocated in the plan. In this sector, investment increased by Tk.49,245 million from Tk.142,164 million to Tk.191,409 million. Growth rate recorded at 34.64% as against overall growth of 19.60%. Investment against Trade stood at 29.16% showing a decrease by 3.36% from 32.52% of 2011, as against 32.00% allocated in the plan. In this sector, investment increased by Tk. 7,617 million from Tk. 105,404 million to Tk.113,021 million. Growth rate recorded at 7.23% as against overall growth of 19.60%.
3.
4.
Real Estate Investment stood at 5.99% showing an increase by 0.43% from 5.56% of 2011, as against 6.50% allocated in the plan. In this sector, investment increased by Tk.5,216 million from Tk.18,015 million to Tk.23,231 million. Growth rate recorded at 28.95% as against overall growth of 19.60%. 5. Transport Investment stood at 1.78% showing a decrease by 0.34% from 2.12% of 2011 as against 2.45% allocated in the plan. In this sector, investment increased by Tk.31 million from Tk. 6,856 million to Tk. 6,887 million. Growth rate recorded at 0.45% as against overall growth of 19.60%. 6. RDS Investment stood at 2.68% showing an increase by 0.50% from 2.18% of 2011, as against 2.50% allocated in the plan. In this area investment increased by Tk. 3321 million from Tk.7,072 million to Tk. 10,393 million. Growth rate recorded at 46.96% as against overall growth of 19.60%. 7. Investment under other Special Schemes stood at 1.23% showing a decrease by 0.19% from 1.42% of 2011 as against 2.25% allocated in the plan. In this area, investment increased by Tk. 175 million from Tk. 4,589 million to Tk. 4,764 million. Growth rate recorded at 3.81% as against overall growth of 19.60%.
5.8.C.3. AREA-WISE INVESTMENT
Page 28 of 48
1.
Rural Investment stood at 13.83% showing an increase by 0.90% from 12.93% of 2011, as against 14.50% allocated in the plan. In this area, investment increased by Tk.11684 million from Tk.41,910 million to Tk.53,594 million. Growth rate recorded at 27.88% as against overall growth of 19.60%.
Increased by 0.90% from 12.93% of 2011 to 13.83% in 2012 as against 14.50% in the plan with 27.88% growth. Decreased by 0.90% from 87.07% of 2011 to 86.17% in 2012 with 18.37% growth.
2.
Urban Investment stood at 86.17% showing a decrease by 0.90% from 87.07% of 2011, as against 85.89% allocated in the plan. In this area, investment increased by Tk.51,836 million from Tk.282,189 million to Tk.334,025million. Growth rate recorded at 18.37% as against overall growth of 19.60%.
5.8.C.4. MODE-WISE INVESTMENT PERFORMANCE AT A GLANCE 5 YEARS INVESTMENT
1. Investment under Bai-Mode stood at 65.70% showing an increase by Increased by (Amount in Million Taka) 1.77% from 63.92% of 2011 as against 61.24% allocated in the plan. In 1.77% from Year 2008 2009 2010 2011 2012 SL this area, investment increased by Tk.47,482 million from Tk.207,171 63.92% 7of 2011 to 1 2 4 5 6 8 3 million to Tk.254,653 million. Growth rate recorded at 22.92% as 65.70% in 2012 Economic Purpose-wise Investment against overall growth of 19.60%. with 2.92% Amount 13,175 6,850 18,761 30,278 22,427 growth. 2 8 Agriculture & Agro Industry % to G.Inv. 6.89% 3.01% 9.34% 5.79% 2. Investment under Ijara (HPSM) Mode stood at 25.65% showing a 6.70% Decreased by Amount 2,278 2,788 decrease by 3.53% from 29.18% of 2011 as against3,951 30.85% allocated in 7,150 3.53% 13,059 from a. Agriculture % to G.Inv. 2.07% million 1.00% 0.72% the plan. In this area, investment increased by Tk.4,834 from 2.56% 29.18% 4.03% of 2011 to Tk. 94,574 million to Tk.99,408 million. rate recorded at 11,611 25.65% in 2012 Amount Growth 9,224 4,572 17,219 19,638 b. Agro-based Industry 5.11% as against overall growth of 19.60%. with 5.31%5.11% % to G.Inv. 4.82% 2.01% 4.15% 5.07% growth. Amount 106,302 118,593 136,261 142,164 191,409 2 9 Industry under Share Mode stood at 0.55% showing an increase 3. Investment Increased by % to G.Inv. 55.59% 52.05% 48.70% 43.86% 49.38% by 0.24% from 0.31% of 2011 as against 0.94% allocated in the plan. 0.24% from 0.31% 53,512 from 52,771 74,423 In this area, investment increased byAmount Tk.1,124 million Tk.1019 67,517 of 2011to 0.55% 73,244 in a. Project (HPSM) to G.Inv. 27.98% 18.90% million to Tk.2,142 million. Growth%rate recorded at 110% 23.16% as against24.13% 2012 22.96% with 110% overall growth of 19.60%. growth. Amount 52,790 65,822 68,743 67,741 118,165
b. Working Capital
% to G.Inv. 3 0
27.61% 54,410 28.45% 7,183 3.76% 3,088 1.61% 3,012 1.58% 23 0.01% 1,774 0.93% 191230
28.89% 75,354 33.07% 9,140 4.01% 3,717 1.63% 3,752 1.65% 2,414 1.06% 8,042 3.53% 227863
24.57% 84,883 30.34% 14,599 5.22% 4,872 1.74% 5,110 1.83% 3,468 1.24% 11,861 4.24% 279815
20.90% 105,404 32.52% 18,015 5.56% 6,856 2.12% 7,072 2.18% 4,589 1.42% 9,721 3.00% 324,099
30.49% 113,021 29.16% 23,231 5.99% 6,887 1.78% 10,393 2.68% 4,764 1.23% 15,487 4.00% 387,615
Trade
Amount % to G.Inv.
3 1
Real Estate
Amount % to G.Inv.
3 2
Transport
Amount % to G.Inv.
3 3
RDS
Amount % to G.Inv.
3 4
Other Special Schemes
Amount % to G.Inv.
3 5
Other Investment Total Investment
Amount % to G.Inv.
3 6
5.9.DETAILED ANALYSIS 3 7 Mode wise Investment

a. Bai- Mode b. Ijara Mode
Amount % to G.Inv. Amount % to G.Inv. Amount % to G.Inv. Amount % to G.Inv.
112,766 58.97% 67,107 35.09% 40 0.02%
134,054 58.83% 78,227 34.33% 665 0.29% 22,541 9.89% 227863
167,841 59.98% 85,124 30.42% 4,309 1.54% 21,335 7.62% 279815
207,171 63.92% 94,574 29.18% 1,019 0.31% 21,335 6.58% 324,099
254,653 65.70% 99,408 25.65% 2,142 0.55% 31,415 8.10% 387,615
c. Share Mode d. Others Total Gen. Investment
Page 29 of 48
11,317 5.92% 191230
5.10 Investment Analysis with Graphical Presentation :

5.10.A.1. SHARIAH COMPLIANCE % 4 . 3 1
D oubtful Incom e
% 7 9 . 8 % 6 . 8 % 2 8 . 3 % 0 5 . 4
15.00% 10.00% 5.00% 0.00% Series1
% 2 . 3
2006 13.34%
2007 8.97%
2008 8.66%
2009 3.82%
2010 3.32%
2011 4.50%
2012 0.85%
5.10.A.2. INDUCTION OF NEW INVESTMENT CLIENTS IN 2012

Main Stream Sl. Zone No. of Clients
3
MEIS Per Employee Performance

5
Total No. of Clients

7
No.of Employees
4
No. of Clients
6
% 5 8 . 0
Rank
8
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sylhet Barisal Rangpur Bogra Rajshahi Mymensingh Khulna Noakhali Comilla Ctg. South DNZ Ctg. North DSZ DCZ Corp. Brs. Total
3663 2541 1565 1468 1593 1314 2142 1083 1230 1322 1499 742 1022 696 294 22174
432 484 343 430 488 421 703 366 433 507 675 456 649 699 608 7694
0.71 0.44 0.38 0.28 0.27 0.26 0.25 0.25 0.24 0.22 0.19 0.14 0.13 0.08 0.04 0.24
683 2725 4834 3341 2951 2956 4604 2351 1810 421 2308 726 2413 32123
4346 5266 6399 4809 4544 4270 6746 3434 3040 1743 3807 1468 3435 696 294 54297
6 3 2 4 5 7 1 10 11 12 8 13 9 14 15
5.10.A.3. COMPARISON OF INDUCTION OF NEW INVESTMENT CLIENTS
Page 30 of 48

Summary of New Induction Sl. Year Main Stream MEIS Total Monthly A verage
1 2
2012 2011
22174 25508
32123 22225
54297 47733
4525 3978
During the year 2012, 54297 new Investment clients have been inducted as against 47,733 clients inducted in 2011 that was 35679 in 2010 and 11689 in 2009. Average induction of new Investment Client is 4525 per month in 2012 as against 3978 Clients in 2011 that was 2981 in 2010 and 974 in 2009. 5.10.B. OVERDUE, INVESTMENT CLASSIFIED, RESCHEDULED & WRITTEN OFF
5.10.B.1. TREND OF OVERDUE, CLASSIFIED, RESCHEDULED & WRITTEN OFF INVESTMENT
Trend of Overdue Investment

5.00% 4.00% 3.00% 2.00% 1.00%
(Amountin Million Taka)
3.45% 2.63% 2.35% 2.48% 1.79%

2009 5,648 2.48% 2010 5,008 1.79%
2.48% 1.99%
2,011 6,435 1.99% 2,012 9,611 2.48%
2006 4,155 3.45%
2007 4,043 2.63%
2008 4,494 2.35%
Amount % to Gen. Inv.
Trendof ClassifiedInvestment
5.00% 4.00% 3.00% 2.00% 1.00%
3.14% 2.54% 2.17% 2.12% 2.56% 1.66%

2010 4,656 1.66% 2,011 8,292 2.56%
3.44%
2006 3,898 3.14%
2007 4,426 2.54%
2008 4,311 2.17%
2009 5,063 2.12%
2,012 13,338 3.44%
Page 31 of 48
Trend of Rescheduled Investment

13.00% 10.00%
(Amount in Million Taka)
12.26% 6.63% 5.29%

2006 6,562 5.29%
8.88%
9.97% 7.99%
7.00% 4.00%
4.84%
2007 8,419 4.84% 2008 13,170 6.63% 2009 29,304 12.26% 2010 24,849 8.88% 2,011 32,298 9.97% 2,012 30,956 7.99%
Trend of Written off Investment

3.50% 2.50% 1.50% 0.50%
2.39% 1.75% 1.43% 1.16%

2009 2,765 1.16%
0.91%
2010 2,554 0.91%
0.84%
2,011 2,737 0.84%
0.78%
2,012 3,029 0.78%
2006 2,967 2.39%
2007 3,045 1.75%
2008 2,843 1.43%
Page 32 of 48

5.10.B.2.DETAILED INVESTMENT POSITION OF OVERDUE, CLASSIFIED, RESCHEDULED & WRITTEN OFF
(Amount
Position as Position on as on 31.12.10 31.12.11
3 4
in
Increased/ (decreased) Dec'11 to 31.12.12 8=(7-4)
Million Taka)
Sl.
1
Particulars
2
Target for 2012

5
Position as on 30.11.12
6
Position as on 31.12.12
7
1 Total Gen. Investment 2 Full overdue 3 % of full overdue to Gen. Investment 4 Overdue Invt. which is not classified & not rescheduled 5 % with Gen. investment (4/1) 6 a) Instalment overdue against rescheduled Invt. b) Instalment overdue against HPSM Invt. Total Instalment overdue (6a+6b) 7 a) % agaisnt Gen. Investment (6a/1) b) % against Gen. Invt.(6b/1) % of instalment overdue to Gen. Invt.(7a+7b) 8 Total Overdue including instalment overdue
(2+6a)
279,820 324,099 364,000 375,851 387,619 5,008 1.79% 1,800 0.64% 2,566 267 2,833 0.92% 0.10% 1.01% 7,574 2.71% 4,656 1.66% 2,329 0.83% 5,272 14,312 10,537 24,849 5.11% 3.77% 8.88% 16,993 6.07% 2,554 0.91% 274 6,434 1.99% 3,627 1.12% 3,892 1,240 5,132 1.20% 0.38% 1.58% 10,326 3.19% 8,292 2.56% 4,668 1.44% 7,048 14,715 17,583 32,298 4.54% 5.43% 9.97% 29,502 9.10% 2,737 0.84% 78 9,500 2.61%
-
63,520 3,177 0.49% 898 0.05% 458 612 1,070 -0.08% 0.10% 0.02% 3,635 0.42% 5,046 0.88% 1,812 0.23% 2,490 1,912 (3,254) (1,342) -0.25% -1.73% -1.98% 2,690 -0.80% 292 -0.06% 30.44
14,320 3.81% 7,389

1.97% 4,704 914 5,618 1.25% 0.24% 1.49%
9,611 2.48% 4,525 1.17%

4,350 1,852
6,202 1.12% 0.48% 1.60% 13,961 3.60% 13,338 3.44% 6,480 1.67% 9,538 16,627 14,329 30,956 4.29% 3.70% 7.99% 32,192 8.31%
3,029
19,024 5.06% 21,581 5.74% 12,660 3.37% 13,403

15,101 13,013 28,114 4.02% 3.46% 7.48%
9 % of total overdue to Gen. Investment 10 Total Classified Investment 11 % of classified investment to Gen. Investment 12 Net Classified Investment (Net of provision & suspense amount) 13 % of net classified Invt. to Gen. Investment 14 Provision Requirement
(Un-classified & Classified Invt.)
7,000 1.92%
-
8,180
-
15 a) Rescheduled Investment (profit bearing) b) Rescheduling Invt. (non profit bearing) Total Rescheduled Investment (15a+15b) 16 a) % of Performing Res.Invt. to Gen. Invt. b) % of NP Res.Invt. to Gen. Invt. % of Rescheduled Invt. to Gen. Investment 17 Total non-performing Investment 18 % of non-performing Invt. to Gen. Inv. 19 Amount of Written off Investment 20 % of Written off Invt. to Gen. Investment 21 Cash recovery from Written off Investment
36,848 9.80%
2,950 0.78%
0.78% 108.20
300
86.67
Page 33 of 48
5.10.C. PERFORMANCE IN RESPECT OF PERSPECTIVE INVESTMENT PLAN 2012-2016
5.10.C.1.SIZE-WISE INVESTMENT 5.10.C.1.1. SIZE-WISE INVESTMENT IN COMPARISON WITH PLAN Table-1 (Amount in Million Taka)
Change sa s on 3 1 .1 2 .1 2 Sl. No. Size of Account Position as on 3 1 .1 2 .2 0 1 1 Amount
1 2 3
Plan for 2 0 1 2
Position a s on 3 1 .1 2 .2 0 1 2 Amount
7
Growth
Ove r Pla n
Over actua l as on 31 .1 2 .1 1
%
4
Amount
5
%
6
%
8
Amount
9 (7-3 )
%
1 0 (9 /3 )
Amount
1 1 (8 -6 )
%
1 2 (8 -4 )
1 Up to Tk. 0 .2 0M 2 Tk. 0 .2 0 to 1 .0 0M 3 Tk. 1 .0 0 to 2 .5 0M 4 Tk. 2 .5 0 to 5 M 5 Tk. 5 to 1 0M 6 Tk. 1 0 to 5 0M 7 Tk. 5 0 to 1 0 0M 8 Tk. 1 0 0 to 1 5 0M 9 Tk. 1 5 0 to 3 0 0M 1 0 Tk. 3 0 0 to 5 0 0M 1 1 Tk. 5 0 0 to 7 5 0M 1 2 Tk 7 5 0 to 1 0 0 0 .M 1 3 Above Tk 1 0 0 0M
Total
1 1 ,0 2 5 3 .4 0 % 1 0 ,1 9 5 3 .1 5 % 1 5 ,4 9 9 4 .7 8 % 1 5 ,0 3 4 4 .6 4 % 1 1 ,1 9 4 3 .4 5 % 2 5 ,2 0 3 7 .7 8 % 1 5 ,4 9 1 4 .7 8 % 9 ,2 8 6 2 .8 7 % 2 1 ,0 7 7 6 .5 0 % 1 6 ,3 3 2 5 .0 4 % 1 8 ,1 3 8 5 .6 0 % 1 2 ,8 8 8 3 .9 8 % 1 4 2 ,7 3 7 4 4 .0 4 % 3 2 4 ,0 9 9 1 0 0 %
1 3 ,4 6 8 3 .7 0 % 1 2 ,0 1 2 3 .3 0 % 1 8 ,5 6 4 5 .1 0 % 1 9 ,1 1 0 5 .2 5 % 1 4 ,5 6 0 4 .0 0 % 2 9 ,1 2 0 8 .0 0 % 1 8 ,2 0 0 5 .0 0 % 1 1 ,2 8 4 3 .1 0 % 2 5 ,8 4 4 7 .1 0 % 1 8 ,9 2 8 5 .2 0 % 1 9 ,1 1 0 5 .2 5 % 1 3 ,4 6 8 3 .7 0 % 1 5 0 ,3 3 2 4 1 .3 0 % 3 6 4 ,0 0 0 1 0 0 % 1 3 ,4 6 8 3 .7 0 % 2 5 ,4 8 0 7 .0 0 % 4 4 ,0 4 4 1 2 .1 0 % 6 3 ,1 5 4 1 7 .3 5 % 7 7 ,7 1 4 2 1 .3 5 % 1 0 6 ,8 3 4 2 9 .3 5 % 1 2 5 ,0 3 4 3 4 .3 5 % 1 3 6 ,3 1 8 3 7 .4 5 % 1 6 2 ,1 6 2 4 4 .5 5 % 1 8 1 ,0 9 0 4 9 .7 5 % 1 8 2 ,9 1 0 5 0 .2 5 % 2 0 0 ,2 0 0 5 5 .0 0 % 1 6 3 ,8 0 0 4 5 .0 0 % 2 1 3 ,6 6 8 5 8 .7 0 % 1 5 0 ,3 3 2 4 1 .3 0 %
1 4 ,8 0 1 3 .8 2 % 1 2 ,1 4 4 3 .1 3 % 1 7 ,9 4 0 4 .6 3 % 2 0 ,0 9 3 5 .1 8 % 1 4 ,7 2 6 3 .8 0 % 3 0 ,2 5 1 7 .8 0 % 1 6 ,6 0 6 4 .2 8 % 1 1 ,6 9 2 3 .0 2 % 2 4 ,4 3 2 6 .3 0 % 1 8 ,7 1 4 4 .8 3 % 1 7 ,5 8 2 4 .5 4 % 1 1 ,9 3 7 3 .0 8 % 1 7 6 ,7 0 3 4 5 .5 9 % 3 8 7 ,6 1 9 1 0 0 %
3 ,7 7 6 3 4 .2 5 % 1 ,9 4 9 1 9 .1 1 % 2 ,4 4 1 1 5 .7 5 % 5 ,0 5 9 3 3 .6 5 % 3 ,5 3 2 3 1 .5 5 % 5 ,0 4 8 2 0 .0 3 % 1 ,1 1 5 7 .2 0 % 2 ,4 0 6 2 5 .9 1 % 3 ,3 5 5 1 5 .9 2 % 2 ,3 8 2 1 4 .5 9 % (5 5 6 ) -3 .0 7 % (9 5 1 ) -7 .3 8 % 3 3 ,9 6 6 2 3 .8 0 % 6 3 ,5 2 0 1 9 .6 0 % 3 ,7 7 6 3 4 .2 5 % 5 ,7 2 5 2 6 .9 8 % 8 ,1 6 6 2 2 .2 4 % 1 3 ,2 2 4 2 5 .5 5 % 1 6 ,7 5 6 2 6 .6 2 % 2 1 ,8 0 4 2 4 .7 3 % 2 2 ,9 1 9 2 2 .1 1 % 2 5 ,3 2 5 2 2 .4 3 % 2 8 ,6 7 9 2 1 .4 0 % 3 1 ,0 6 2 2 0 .6 6 % 3 2 ,4 5 8 1 8 .6 8 % 3 0 ,5 0 5 1 8 .1 1 % 3 3 ,0 1 5 2 1 .2 1 % 2 9 ,5 5 4 1 6 .3 0 % 3 3 ,9 6 6 2 3 .8 0 %
0 .1 2 % -0 .1 7 % -0 .4 7 % -0 .0 7 % -0 .2 0 % -0 .2 0 % -0 .7 2 % -0 .0 8 % -0 .8 0 % -0 .3 7 % -0 .7 1 % -0 .6 2 % 4 .2 9 % 0 .1 2 % -0 .0 5 % -0 .5 2 % -0 .5 9 % -0 .7 9 % -0 .9 8 % -1 .7 0 % -1 .7 8 % -2 .5 8 % -2 .9 5 % 2 .9 5 % -3 .6 7 % 3 .6 7 % -4 .2 9 % 4 .2 9 %
0 .4 2 % -0 .0 1 % -0 .1 5 % 0 .5 4 % 0 .3 5 % 0 .0 3 % -0 .5 0 % 0 .1 5 % -0 .2 0 % -0 .2 1 % -1 .0 6 % -0 .9 0 % 1 .5 5 % 0 .4 2 % 0 .4 0 % 0 .2 5 % 0 .7 9 % 1 .1 4 % 1 .1 7 % 0 .6 7 % 0 .8 2 % 0 .6 2 % 0 .4 1 % -0 .4 1 % -0 .6 5 % 0 .6 5 % -1 .5 5 % 1 .5 5 %
Upto Tk. 0 .2 0M Upto Tk. 1 .0 0M Upto Tk. 2 .5 0M Upto Tk. 5 .0 0M Upto Tk. 1 0 .0 0M Upto Tk. 5 0 .0 0M Upto Tk. 1 0 0M Upto Tk. 1 5 0M Upto Tk. 3 0 0M Upto Tk. 5 0 0M Above Tk. 5 0 0M Upto Tk. 7 5 0M Above Tk. 7 5 0M Upto Tk. 1 0 0 0M Above Tk. 1 0 0 0M
1 1 ,0 2 5 3 .4 0 % 2 1 ,2 2 0 6 .5 5 % 3 6 ,7 1 9 1 1 .3 3 % 5 1 ,7 5 3 1 5 .9 7 % 6 2 ,9 4 7 1 9 .4 2 % 8 8 ,1 5 0 2 7 .2 0 % 1 0 3 ,6 4 1 3 1 .9 8 % 1 1 2 ,9 2 7 3 4 .8 4 % 1 3 4 ,0 0 4 4 1 .3 5 % 1 5 0 ,3 3 6 4 6 .3 9 % 1 7 3 ,7 6 3 5 3 .6 1 % 1 6 8 ,4 7 4 5 1 .9 8 % 1 5 5 ,6 2 5 4 8 .0 2 % 1 8 1 ,3 6 2 5 5 .9 6 % 1 4 2 ,7 3 7 4 4 .0 4 %
1 4 ,8 0 1 3 .8 2 % 2 6 ,9 4 5 6 .9 5 % 4 4 ,8 8 5 1 1 .5 8 % 6 4 ,9 7 7 1 6 .7 6 % 7 9 ,7 0 3 2 0 .5 6 % 1 0 9 ,9 5 4 2 8 .3 7 % 1 2 6 ,5 6 0 3 2 .6 5 % 1 3 8 ,2 5 2 3 5 .6 7 % 1 6 2 ,6 8 3 4 1 .9 7 % 1 8 1 ,3 9 8 4 6 .8 0 % 2 0 6 ,2 2 1 5 3 .2 0 % 1 9 8 ,9 7 9 5 1 .3 3 % 1 8 8 ,6 4 0 4 8 .6 7 % 2 1 0 ,9 1 6 5 4 .4 1 % 1 7 6 ,7 0 3 4 5 .5 9 %
As per 5-Year Investment Policy and Perspective Investment Plan 2012-2016, due importance has been given to increase portfolio share of Investment in all sizes up to Tk.100 Million over all sizes above Tk.100 Million. Investment up to Tk.100 Million was targeted to stay at 34.35% by the end of the year 2012. Up to this range our Investment increased by 0.67% from 31.98% as on 31.12.2011 to 32.65% as on 31.12.2012 showing a growth rate of 22.11%.
Page 34 of 48
5.10.C.1.2. SIZE WISE INVESTMENT: BANKING SECTOR & IBBL (as on 30.06.2012)
SL No 1
Size
2
All Ba nks
3
SOBs
4
SBs
5
FBs
6
PCBs
7
IBs
8
IBBL
(3 1 .1 2 .1 2 )
9
1 2
Up to Tk. 5 .0 0M Tk. 5 M to 1 0 0M Up to Tk. 1 0 0 .0 0M
2 5 .9 1 % 3 6 .0 0 % 6 1 .9 1 % 2 5 .0 3 % 1 3 .0 7 % 3 8 .0 9 % 1 0 0 %
2 7 .8 9 % 2 2 .0 7 % 4 9 .9 6 % 2 8 .3 8 % 2 1 .6 6 % 5 0 .0 4 % 1 0 0 %
5 6 .5 0 % 2 5 .7 5 % 8 2 .2 5 % 1 3 .9 9 % 3 .7 6 % 1 7 .7 5 % 1 0 0 %
2 9 .5 3 % 4 3 .7 0 % 7 3 .2 2 % 2 0 .7 5 % 6 .0 2 % 2 6 .7 8 % 1 0 0 %
2 1 .8 8 % 4 0 .8 0 % 6 2 .6 8 % 2 5 .4 4 % 1 1 .8 8 % 3 7 .3 2 % 1 0 0 %
2 5 .4 5 % 4 1 .7 0 % 6 7 .1 5 % 2 1 .7 5 % 1 1 .1 0 % 3 2 .8 5 % 1 0 0 %
1 6 .7 6 % 1 5 .8 9 % 3 2 .6 5 % 1 4 .1 5 % 5 3 .2 0 % 6 7 .3 5 % 1 0 0 %
3 4
Tk. 1 0 0 M to 5 0 0M Above Tk. 5 0 0M Above Tk. 1 0 0M Tota l
[[[[[
Chart-1
A b o v eT k . 5 0 0M 1 1 . 2 2 %
Chart-2
A ll B a n k s
U pt oT k5 M 2 6 . 8 3 %
IB B L
U pt oT k5 M 1 6 . 7 6 %
T k . 1 0 0t o 5 0 0M 2 5 . 1 5 % T k5M t o 1 0 0M 3 6 . 8 0 %
A b o v eT k . 5 0 0M 5 3 . 2 0 % T k . 1 0 0t o 5 0 0M 1 4 . 1 5 %
T k5M t o 1 0 0M 1 5 . 8 9 %
11 All Banks Investment/Advances are concentrated by 61.91% in the sizes up to Tk.100 Million and 38.09% in the sizes above Tk.100 Million. 11 State Owned Banks Investment/Advances are concentrated by 49.96% in the sizes up to Tk.100 Million and 50.04% in the sizes above Tk.100 Million. 11 Specialised Banks Investment/Advances are concentrated by 82.25% in the sizes up to Tk.100 Million and 17.75% in the sizes above Tk.100 Million. 11 Foreign Banks Investment/Advances are concentrated by 73.22% in the sizes up to Tk.100 Million and 26.78% in the sizes above Tk.100 Million. 11 Private Commercial Banks Investment/Advances are concentrated by 62.68% in the sizes up to Tk.100 Million and 37.32% in the sizes above Tk.100 Million.
Page 35 of 48
5.10.C.1.3. SIZE WISE INVESTMENT: IBBLS ACHIEVEMENT SINCE 2009 Table-4

2 0 0 9 Sl.
1
(Amount in Million Taka)

2 0 1 0 Pla n
5
2 0 1 1 Pla n
7
2 0 1 2 Pla n
9
Achie ve me nt Change up to 2012 over 2009

1 1 =(1 0 -4 )
Size of Account Pla n

2 3
Actua l
4
Actua l
6
Actua l
8
Actua l
1 0
1 2 3 4 5 6 7 8 9
Up to Tk. 0.20 M Tk. 0.20 to 1.00 M Tk. 1.00 to 2.50 M Tk. 2.50 to 5 M Tk. 5 to 100 M Tk. 10 0 to 500 M Tk. 50 0 to 750 M Tk 750 to 1000. M A bove Tk 1000 M Total
3.50% 3.50% 5.00% 4.00%
2.75% 2.90% 4.14% 3.14%
4.50% 5.00% 6.00% 5.00%
3.12% 2.99% 4.43% 3.99%
3.70% 4.40% 5.00% 4.80%
3.40% 3.15% 4.78% 4.64%
3.70% 3.30% 5.10% 5.25%
3.82% 3.13% 4.63% 5.18%
1 .0 7 % 0 .2 3 % 0 .4 9 % 2 .0 4 % 1 .7 2 % 0 .1 9 % -1 .6 3 % -2 .2 0 % -1 .9 1 % N/ A
16.00% 14.17% 17.50% 15.30% 16.00% 16.01% 17.00% 15.89% 20.00% 13.96% 18.00% 14.56% 15.00% 14.41% 15.40% 14.15% 7.50% 7.50% 100% 6.17% 5.28% 100% 7.00% 7.00% 100% 5.64% 4.23% 100% 5.50% 4.60% 100% 5.60% 3.98% 100% 5.25% 3.70% 100% 4.54% 3.08% 100%
33.00% 47.50% 30.00% 45.73% 41.00% 44.04% 41.30% 45.59%
2 0 0 9 Sl.
1
2 0 1 0 Pla n
5
2 0 1 1 Pla n
7
2 0 1 2 Pla n
9
Achie ve me nt Change up to 2012 over 2009

1 1 =(1 0 -4 )
Size of Account
2
Pla n
3
Actua l
4
Actua l
6
Actua l
8
Actua l
1 0
1 Up to Tk.5.0 0M 2 Tk. 100 to 750 M 3 Upto Tk. 10 0M 4 Above Tk. 100 M 5 Upto Tk. 50 0M 6 Above Tk. 500 M 7 Upto Tk. 75 0M 8 Above Tk. 750 M 9 Upto Tk. 10 00 M 10 Above Tk. 1000 M
16.00% 27.50% 32.00% 68.00% 52.00% 48.00% 59.50% 40.50% 67.00% 33.00%
12.93% 20.12% 27.10% 72.90% 41.06% 58.94% 47.23% 52.77% 52.50% 47.50%
20.50% 25.00% 38.00% 62.00% 56.00% 44.00% 63.00% 37.00% 70.00% 30.00%
14.53% 20.20% 29.84% 70.16% 44.39% 55.61% 50.03% 49.97% 54.27% 45.73%
17.90 % 20.50 % 33.90 % 66.10 % 48.90 % 51.10 % 54.40 % 45.60 % 59.00 % 41.00 %
15.97% 20.00% 31.98% 68.02% 46.39% 53.61% 51.98% 48.02% 55.96% 44.04%
17.3 5% 20.6 5% 34.3 5% 65.6 5% 49.7 5% 50.2 5% 55.0 0% 45.0 0% 58.7 0% 41.3 0%
16.76% 18.68% 32.65% 67.35% 46.80% 53.20% 51.33% 48.67% 54.41% 45.59%
3 .83% -1.44% 5 .55% -5.55% 5 .74% -5.74% 4 .11% -4.11% 1 .91% -1.91%
Cart-3
S izewiseDiversificationupto2012over2009
2.50% 2.00% 1.50% 1.00% 0.50% 0.00% -0.50% -1.00% -1.50% -2.00% -2.50% Upto 0.20M to T k.0.20M 1.00M 1M to 2.50M 2.50M to5 M 5M to 100M 100M to 500M
2.04% 1.07% 0.23% 0.49%
1.72%
0.19% -1.63%
500M to 750M
-1.91% -2.20%
750M to 1000M Above 1000M
l f r o P t i d e g n a h C %

In respect of size wise investment, our diversification effort has shown an increase in all sizes up to Tk. 500 million and a decrease in all sizes above Tk. 500 million.
Up Tk.500 million 5.74% increased in the portfolio share whereas above Tk. 500 million 5.74% decreased in the portfolio share up to 2012 over 2009. 5.10.C.2. ECONOMIC PURPOSE-WISE INVESTMENT
Page 36 of 48
5.10.C.2.1. ECONOMIC PURPOSE-WISE INVESTMENT IN COMPARISON WITH PLAN
Table-6
Taka)
Sl. No.
1 1
(Amount in Million
Pos ition a s on 3 1 .1 2 .2 0 1 1
Am ount
2 3
Ec onomic Purpos e
Pla n for 2 0 1 2
Am ount
5
Pos ition a s on 3 1 .1 2 .2 0 1 2
Am ount
7
Cha ng e s in 2 0 1 2
Am ount
9
Growth
%
1 1
%
4
%
6
%
8
%
1 0
Ag ricult ure & Agroba s e d Indus try a. A griculture b. A gro-based Industry
3 0 ,2 7 8 13,059 17,219 1 4 2 ,1 6 4 74,423 67,741 1 0 5 ,4 0 4 1 8 ,0 1 5 6 ,8 5 6 7 ,0 7 2 4 ,5 8 9 9 ,7 2 1 3 2 4 ,0 9 9
9 .3 4 % 4.03% 5.31% 4 3 .8 6 % 22.96% 20.90% 3 2 .5 2 % 5 .5 6 % 2 .1 2 % 2 .1 8 % 1 .4 2 % 3 .0 0 % 1 0 0 %
4 2 ,7 7 0 20,020 22,750 1 4 7 ,5 6 6 77,896 69,670 1 1 6 ,4 8 0 2 3 ,6 6 0 8 ,9 1 8 9 ,1 0 0 8 ,1 9 0 7 ,3 1 6 3 6 4 ,0 0 0
1 1 .7 5 % 5.50% 6.25% 4 0 .5 4 % 21.40% 19.14% 3 2 .0 0 % 6 .5 0 % 2 .4 5 % 2 .5 0 % 2 .2 5 % 2 .0 1 % 1 0 0 %
2 2 ,4 2 7 2,788 19,638 1 9 1 ,4 0 9 73,244 118,165 1 1 3 ,0 2 1 2 3 ,2 3 1 6 ,8 8 7 1 0 ,3 9 3 4 ,7 6 4 1 5 ,4 8 7 3 8 7 ,6 1 9
5 .7 9 % 0.72% 5.07% 4 9 .3 8 % 18.90% 30.48% 2 9 .1 6 % 5 .9 9 % 1 .7 8 % 2 .6 8 % 1 .2 3 % 4 .0 0 % 1 0 0 %
-7 ,8 5 1 -10,271 2,420 4 9 ,2 4 5 -1,179 50,424 7 ,6 1 7 5 ,2 1 6 3 1 3 ,3 2 1 1 7 5 5 ,7 6 6 6 3 ,5 2 0
-3 .5 6 % -3.31% -0.25% 5 .5 2 % -4.07% 9.58% -3 .3 6 % 0 .4 3 % -0 .3 4 % 0 .5 0 % -0 .1 9 % 1 .0 0 % 0 %
-2 5 .9 3 % -78.65% 14.05% 3 4 .6 4 % -1.58% 74.44% 7 .2 3 % 2 8 .9 5 % 0 .4 5 % 4 6 .9 6 % 3 .8 1 % 5 9 .3 2 % 1 9 .6 0 %
Indus try a. Industry: HPSM(Project) b. Industry: Working Capital
3 4 5 6 7 8
Tra de Re a l Es ta t e Tra ns port RDS Othe r Sp. Sche m e s Othe rs
Tota l
5.10.C.2.2. MONTH WISE COMPARATIVE POSITION OF EP WISE INVESTMENT

Sl. Economic Purpose Agriculture & Agro Industry Industry Trade Real Estate Transport RDS Other Special Sch. Others
Changes on 2011 over 2010 2.64% -4.83% 2.19% 0.34% 0.37% 0.36% 0.18% -1.24%
Changes over 31 Dec. 2011 Jan.-12

-0.71% 0.43% 0.34% -0.01% -0.01% -0.01% -0.03% 0.00%
Feb.-12
-0.94% 1.22% 0.01% -0.13% 0.01% 0.01% -0.02% -0.16%
Mar.-12
-2.87% 1.78% 1.12% 0.03% 0.01% 0.05% -0.08% -0.04%
Apr.-12
-2.71% 1.90% 1.52% 0.12% 0.01% 0.11% -0.08% -0.88%
May-12
-2.38% 1.30% 0.78% 0.17% -0.04% 0.15% -0.09% 0.11%
Jun-12
-2.14% 0.56% 1.11% 0.33% -0.05% 0.22% -0.09% 0.05%
Jul-12
-2.40% -0.95% 2.44% 0.29% -0.04% 0.23% -0.09% 0.53%
Aug-12
-0.78% -2.50% 2.33% 0.24% -0.12% 0.17% -0.13% 0.78%
Sep-12
-3.14% 2.10% -0.09% 0.25% -0.21% 0.21% -0.16% 1.04%
Oct-12
-3.01% 4.09% -2.55% 0.45% -0.23% 0.36% -0.15% 1.05%
Nov-12
-3.29% 4.62% -2.82% 0.50% -0.27% 0.40% -0.16% 1.03%
Dec-12
-3.56% 5.52% -3.36% 0.43% -0.34% 0.50% -0.19% 1.00%
1 2 3 4 5 6 7 8
E conom icP urposeW iseInvestm entP osition of IBBL

Real Estate, 5.99% Trade, 29.16% Transport, 1.78% RDS, 2.68% Industry, 49.38% Other Schemes,1.23% Others , 4.00% Agric. & Agro Ind., 5.79%
5.10.C.2.3. ECONOMIC PURPOSE WISE INVESTMENT: ACHIEVEMENT SINCE 2009 Table-8 (Amount in Million
Page 37 of 48
Investment Portfolio of Islami Bank Bangladesh Limited Taka)

20 0 9 Sl. Size of Account Actual Amount 1 2 3 6 ,85 0 % 4 3.0 1% 5 5.6 0% Plan 6 1 8 ,7 6 1 2 0 10 Actual Amount % 7 6.7 0% 8 5 .70 % Plan 9 30 ,27 8 2 01 1 Actual Amount % 10 9.3 4% 1 1 7 .10 % Plan 2 01 2 Actual Amount 12 22 ,42 7 % 1 3 5 .7 9 % 14 1 1.7 5% Plan Achievement Change up to 2 01 2 over 2 0 09 1 5
Agriculture & 1 Agro Based Industry 2 Industry 3 Trade 4 Real Estate 5 Transport 6 RDS 7 Other Special Schemes
2.7 8 % -2.66 % -3.91 % 1.9 8 % 0.1 5 % 1.0 3 % 0.1 7 % 0.4 7 % -
1 1 8,5 93 5 2.0 5% 4 9.8 0% 75 ,35 4 3 3.0 7% 3 0.5 0% 9 ,14 0 3 ,71 7 3 ,75 2 2 ,41 4 8 ,04 2 2 2 7,8 63 4.0 1% 1.6 3% 1.6 5% 1.0 6% 3.5 3% 1 00% 6.0 0% 2.0 0% 1.6 0% 1.0 6% 3.4 4% 1 00 %
13 6 ,2 6 1 4 8.7 0% 4 7 .3 0 % 8 4 ,8 8 3 3 0.3 4% 3 1 .0 0 % 1 4 ,5 9 9 4,8 72 5,1 10 3,4 68 1 1 ,8 6 1 27 9 ,8 1 5 5.2 2% 1.7 4% 1.8 3% 1.2 4% 4.2 4% 1 00 % 7 .00 % 2 .50 % 1 .60 % 2 .40 % 2 .50 % 1 0 0%
1 4 2,1 64 4 3.8 6% 45 .10 % 1 0 5,4 04 3 2.5 2% 32 .00 % 18 ,01 5 6 ,85 6 7 ,07 2 4 ,58 9 9 ,72 1 3 2 4,0 99 5.5 6% 2.1 2% 2.1 8% 1.4 2% 3.0 0% 1 00 % 6 .00 % 2 .50 % 2 .00 % 1 .30 % 4 .00 % 10 0 %
1 91 ,40 9 4 9 .3 8 % 4 0.5 4% 1 13 ,02 1 2 9 .1 6 % 3 2.0 0% 23 ,23 1 6 ,8 8 7 10 ,39 3 4 ,7 6 4 15 ,48 7 3 87 ,61 9 5 .9 9 % 1 .7 8 % 2 .6 8 % 1 .2 3 % 4 .0 0 % 1 00 % 6.5 0 % 2.4 5 % 2.5 0 % 2.2 5 % 2.0 1 % 1 00 %
8 Others Total
Chart-4
D iversifiedupto2012S ince2009
4.00% 3.00% 2.00% 1.00% 0.00% -2.00% -3.00% -4.00% -5.00%
& Agro Based Industry -2.66% -3.91% Trade 2.78% 1.98% 1.03% 0.15% Real Estate Transport RDS 0.17% Other Special Schemes 0.47% Others
-1.00% Agriculture Industry
Observations:
i. Investment in Agriculture & Agro-based Industry increased by 2.78% from 3.01% in 2009 to 5.79% in 2012. ii. Industrial Investment decreased by 2.66% from 52.05% in 2009 to 49.38% in 2012. iii. Investment in Trade decreased by 3.91% from 33.07% in 2009 to 29.16% in 2012. iv. Investment in Real Estate increased by 1.98% from 4.01% in 2009 to 5.99% in 2012. v. Investment in Transport increased by 0.15% from 1.63% in 2009 to 1.78% in 2012. vi. Investment in RDS increased by 1.03% from 1.60% in 2009 to 2.68% in 2012.
5.10.C.3 AREA WISE INVESTMENT

Page 38 of 48
Investment Portfolio of Islami Bank Bangladesh Limited 5.10.C.3.1. AREA-WISE INVESTMENT IN COMPARISON WITH PLAN
Taka)
Sl. No Are a Pos it ion a s on 3 1 .1 2 .2 0 1 1 Am ount
1 2 3
(Amount
Cha ng e on 3 1 .1 2 .2 0 1 2 ove r 3 1 .1 2 .2 0 1 1
in
Million
Pla n for 2 0 1 2
Pos ition a s on 3 1 .1 2 .2 0 1 2 Am ount

7
Growth
%
4
Am ount
5
%
6
%
8
Am ount
9
%
10
Am ount
11
%
12
Rural A rea
41,910
12.93%
52,780
14.50%
53,594
13.83%
11,684
0.90%
11,684
27.88%
Urban A re a
282,189
87.07%
311,220
85.50%
334,025
86.17%
51,836
-0.90%
51,836
18.37%
TOTAL
3 2 4 ,0 9 9
1 0 0 %
3 6 4 ,0 0 0
1 0 0 %
3 8 7 ,6 1 9
1 0 0 %
6 3 ,5 2 0
N/A
6 3 ,5 2 0
1 9 .6 0 %
Observation: Rural Investment Increased by 0.90% in 2012 over 2011 showing growth of 27.88% against overall growth of 19.60% of General Investment. 5.10.C.3.2. TREND OF RURAL INVESTMENT OF IBBL SINCE 2008
T ren do fR u ra l In v es tm en t
15.00% 12.00% 9.00% 6.00%
1 2 .9 3 % 1 0 .7 1 % 7 .7 0 % 8 .2 0 %
1 3 .8 3 %
m t s v I . n e G o T %
3.00% 0.00%
2 0 0 8
2 0 0 9
2 0 1 0
2 0 1 1
2 0 1 2
Observation: In the investment portfolio our Rural Investment is 13.83% whereas urban Investment is 86.17%. The given bar chart has shown an increasing trend of our rural Investment from 7.70% in 2008 to 13.83% in 2012 conversely our urban Investment has been decreasing from 92.30% in 2008 to 86.17% in 2012. 5.10.C.3.3. RURAL INVESTMENT: IBBLS ACHIEVEMENT
Cha ng e Rura l Inve s t m e nt
1
2 0 0 9
2 0 1 0
2 0 1 1
2 0 1 2
2 0 1 0
6 = (3 -2 )
2 0 1 1
7 = (4 -3 )
2 0 1 2
8 = (5 -4 )
up t o2 0 1 2 s inc e2 0 0 9
9 = (5 -2 )
Plan A ctual
9 .0 0 % 8 .2 0 %
1 0.00 % 1 0.71 %
12 .0 0 % 12 .9 3 %
14 .5 0% 13 .8 3%
1 .0 0% 2 .5 1%
2.00 % 2.22 %
2 .5 0% 0 .9 0%
5 .50 % 5 .63 %
17% 15% 13% 11% 9% 7%
Rural Investm ent: IBBL

1 4 .5 0 % 1 2 .9 3 % 9 .0 0 % 8 .2 0 %
2 0 09
1 0 .7 1 % 1 0 .0 0 %
2 0 1 0
1 2 .0 0 %
2 0 1 1
1 3 .8 3 %
Plan Actual
2 0 1 2
Rural Investment: As per plan we were supposed to stay at 14.50% by 2012, actually we are staying at 1%. Our Rural Investment has shown an increase of 5.05% up to September 2012 over 2009.
Page 39 of 48
5.10.C.3.4. AREA WISE INVESTMENT: BANKING SECTOR as on 30.06.2012

SL.
1
Area
2
All Banks
3
SOBs
4
SBs
5
FBs
6
PCBs
7
IBs
8
IBBL
(31.12.12)
9
1 Rural 2 Urban Total
7.72% 92.28%
9.47% 90.53%
41.45% 58.55%
0% 100.00%
4.40% 95.60%
4.04% 95.96%
13.83% 86.17%
100%
100%
100%
100%
100%
100%
100%
Rural Investment: BankingSector

50% 40% 30% 20% 10% 0%
% % % 9 .4 7 % 7 .7 2
All Banks
SOBs
SBs
% 0
FBs
PCBs
4 .0 4
% 5 4 . 1
% 0 . 4
IBs
IBBL
Observations: 1. All Banks Investment/Advances are concentrated by 92.28% in the urban area whereas only 7.72% is in the Rural Area. 2. State Owned Banks Investment/Advances are concentrated by 90.53% in the urban area whereas only 9.47% is in the Rural Area. 3. Specialised Banks Investment/Advances are concentrated by 58.55% in the urban area whereas only 41.45% is in the Rural Area. 4. Foreign Banks Investment/Advances are concentrated by 100% in the urban area. 5. Private Commercial Banks Investment/Advances are concentrated by 95.60% in the urban area whereas only 4.40% is in the Rural Area.
5.10.C.4. MODE-WISE INVESTMENT
Page 40 of 48
3 1
.8 3
Investment Portfolio of Islami Bank Bangladesh Limited 5.10.C.4.1. MODE-WISE INVESTMENT IN COMPARISON WITH PLAN
Taka)
Sl. No
1
(Amount
in
Million
Growth %
11
Are a
Position a s on 3 1 .1 2 .2 0 1 1 Amount %
4
Pla n for 2 0 1 2 Amount

5
Position a s on 3 1 .1 2 .2 0 1 2 Amount
7
Cha nge on 3 1 .1 2 .2 0 1 2 ove r 3 1 .1 2 .2 0 1 1 Amount

9
%
6
%
8
%
10=(10-4)
1 Bai-M ode 2
Ijara M ode (HPSM )
207,171 94,574 1,019 15,721 5,614 3 2 4 ,0 9 9
63.92% 29.18% 0.31% 4.85% 1.73% 1 0 0 %
220,890 61.24% 111,262 30.85% 3,401 17,989 7,133 3 6 0 ,6 7 5 0.94% 4.99% 1.98% 1 0 0 %
2 5 4 ,6 5 3 9 9 ,4 0 8 2 ,1 4 2 2 2 ,5 0 2 8 ,9 1 3 3 8 7 ,6 1 9
6 5 .7 0 % 2 5 .6 5 % 0 .5 5 % 5 .8 1 % 2 .3 0 % 1 0 0 %
47,482 4,834 1,124 6,781 3,299 6 3 ,5 2 0
1.77% -3.53% 0.24% 0.95% 0.57%

N/A
22.92% 5.11% 110.33% 43.14% 58.76% 1 9 .6 0 %
3 Share M ode 4
Purchase & Negotiation
5 Quard Total
Mode-wiseInvestment
70% 60% 50% 40% 30% 20% 10% 0%
% 0 7 . 5 6
% 4 2 . 1 6
% 6 . 5 2
% 5 8 . 0 3
% 1 8 . 5
m s e v n I l a T o t %
% 9 . 4
% 0 3 . 2
Bai-Mode Position Plan 65.70% 61.24%
IjaraMode (HPS M) 25.65% 30.85%
% 5 . 0
% 4 9 . 0
S hareMode 0.55% 0.94%
Purchase& Neg otiation 5.81% 4.99%
Quard 2.30% 1.98%
Mode wise investment of IBBL constituted by Bi-Mode 65.70%, Ijara Mode (HPSM) 25.65%, Share Mode 0.55% and others 8.10%. Up to 31.12.2012 over 31.12.2011 our Investment in Bai & Share Mode increased by 1.77% & 0.24% and Ijara mode decreased by 3.53% showing growth of 22.92%, 110.33% & 5.11% respectively. Investment in Share Mode increased due to increase in Mudaraba Foreign Currency Investment and Musharaka General Investment.
Observations As per 5-Years Perspective Investment Plan 2012-2016 we were supposed to stay at Tk.364000 million in our General Investment. By the end of the year 2012 we have been able to exceed the yearly target and stood at Tk.387619 million showing a growth rate of 19.60% over 2011. In the perspective plan our Investment ceiling for 2013 is Tk.425,000 million. However considering our excellent performance, we have taken the plan of Tk.450,000 million in 2013. D. RATING OF CORPORATE INVESTMENT CLIENTS
Background To comply with the International best practices under Basel-II as well as with Bangladesh Banks instructions and Page 41 of 48
% 8 9 . 1
Investment Portfolio of Islami Bank Bangladesh Limited to minimize the Risk Weighted Assets (RWA) for maximizing the Capital Adequacy Ratio (CAR), we are to get our corporate investment clients rated. Ratings are the opinion of rating agencies on the creditworthiness of issuers or issues in terms of their/ its ability and willingness of discharging its obligations in timely manner. In the year 2012, we have a great achievement in investment clients rating which will help us to maintain our Capital Adequacy Ratio (CAR) in expected level Insha-Allah. Rating Position in the year 2011
R a t i n gP o s i t i o n i n2 0 1 1
374
4 0 0 3 0 0 2 0 0 1 0 0 0
s t n e i l C f . o N
Total 522 rating completed in the year 2011. Out of which 374 were fresh rating and 148 were surveillance rating. Total outstanding against 522 clients was Tk.182,122 million which was 77% of corporate investment and 84% of rate able investment. Target of rating for 2012 Total rateable clients are 912 out of which 390 clients (Twenty million and above having good performance) are selected for fresh rating and 522 clients are for surveillance rating. Total outstanding of the 912 clients is Tk.2,08,772 million which is 91% of corporate investment and 93% of rateable investment. It is mentionable that in the last quarter of the year the clients having outstanding at least taka ten million are included in the list for rating. Performance of the year 2012 Total rated clients stand at 928 of which fresh rated clients are 406 and 491 are surveillance rated clients. Total outstanding against there 928 clients are Tk.208,780 million which is 92% of corporate investment and 96% of rateable investment. It is mentionable that rating of 80 fresh investment clients having liability of Tk.7000 million is under process in addition to the above fresh clients. Comparative Performance Rating of investment client was started in since 2009. Only 5 clients were rated in 2009 while 143 fresh clients as well as 5 surveillance
148
F r e s h S u r v e i l l a n c e N o .o f C l i e n t s 3 7 4 1 4 8
Target of Rating -2012

100% 75%
50% 25% 0%
F res h No .o f C lien ts 3 90
S u rv eilla n c e 4 91
P erform a n c eo f th eY ea r-2 0 1 2
600 400
s t n e i l c f . o N
200 0
F re s h No .o f C lien ts 4 0 6
S u rv eilla n c e 4 9 1
Y e a rW is eR a tin gP o s itio n
5 0 0 4 0 0 3 0 0
rating were completed in 2010 and 374 fresh clients and 148 surveillance clients in 2011. In the year 2012 rating of 406 fresh investment clients and 491 surveillance rating have been completed. The total outstanding liability of the total rated 928 clients is Tk. 208,780 million which covers 92% of total corporate clients. It is mentionable that a handsome fresh rating will be completed very soon in addition to 394 clients. Capital Adequacy Ratio As per Bangladesh Banks BRPD Circular No. 10 dated 10.03.2010
2 0 0 1 0 0 0
F re s h S u rv eilla n c e
2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 5 1 4 3 3 7 4 4 0 6 0 5 1 4 8 4 9 1
C a p ita lA d e q u a c yR a tio
1 4 .0 0 %
we have to maintain Minimum Capital Requirement (MCR) equal to 10% to Risk Weighted Assets from 01.07.2011 onwards. As a result of clients rating, our Capital Adequacy Ratio stood at 11.05% in 2010, 13.13% in 2011 and 13.10% as on 30.09.2012.
1 3 .1 0 % 1 1 .0 5 % 1 3 .1 3 %
1 3 .0 0 % 1 2 .0 0 % 1 1 .0 0 % 1 0 .0 0 % 3 1 .1 2 .2 0 1 0 3 1 .1 2 .2 0 1 1 3 0 .0 9 .2 0 1 2
Page 42 of 48
Investment Portfolio of Islami Bank Bangladesh Limited Risk Weighted Asset Lessened through Rating Total rated clients are 928 having outstanding liability of Tk.208,780 million. The total risk weighted asset of the said rated clients stand at Tk. 110,790 million i.e. we have saved risk weighted asset by Tk. 150,185 million which is great achievement.
9 2 8
R a te d C li e n ts R a te d C li e n t s Ou t s ta nd i ng R i s k W e i g h e te d As s e ts R i s k W e i g h e te d As s e tss a v e d
R W Ao fR a t e dC lie n ts
2 0 8 7 8 0 1 5 0 1 8 5 1 1 0 7 9 0
Plan for Rating in 2013 In the year 2013, ten million and above (regular and fresh) investment clients shall be taken into consideration for rating. As a result more coverage of rating of corporate investment will be achieved as well as our Capital Adequacy Ratio (CAR) would be in a more satisfactory level. CONCLUSION Islami Bank Bangladesh Limited is the dominant player in the success history of around three decades of Islamic banking operation in Bangladesh. The Bank, by the grace of almighty Allah and the concerted efforts of all concerned, could prove itself as the most modern, dynamic and popular bank of the country. The policy makers and workforce of the Bank, by their strong commitment and tireless effort, has been able to continue its success in every sphere of banking operations and services. Now it is the time to uphold the flag of the beloved institution. Let us strive for the same. May Allah help us all.
Page 43 of 48
Recommendations
The year-2013 may be a challenging year for the Banking Industry due to world economic crisis and political turmoil before National Election. As a result, there is a possibility of
Page 44 of 48
increasing non-performing investment of the Bank during the current year. To overcome the probable adverse situation following steps/measures should be taken by the Zone/Branch incumbents from the very beginning of the year-2013.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. To keep in touch with the client to ensure that invested fund is not diverted in any way. Shariah lapses to be checked while making any disbursement against the sanction. To review the yearly Business Plan approved by the Head Office on weekly basis to overcome the short comings. To orient/motivate the employees of the Branch to achieve the target of Business Plan set by the Head Office/Zonal Office/Branch. To maintain regular contact with the NPI clients to ensure early recovery of the same. Branches & Zonal Offices Task Forces to be kept vigilant to reduce the non performing Investment of the Bank. To communicate with the investment clients before due date of investment and visit their business establishment frequently to ensure timely recovery. To issue a reminder letter to the investment clients at least 03(three) months ahead of due dates for adjustment within due date invariably. To give emphasis on persuasion/amicable settlement for recovery of non-performing investment rather than litigation process particularly of suit value below Tk.50,000/-. To meet with NPI clients physically in their residence before/after office hour and talk with their wife, children and other relatives. To ensure that no investment account is time barred for negligence of any Officer in the light of Artha Rin Adalat Ain2003. To pursue court cases filed against the clients through panel lawyer as well as branch official(s). Execution of mortgaged after physical scrutiny/verification of documents in accordance with Head Office Instruction Circular No. LAW/2692 dated 17.04.2007. Attending the Court timely, Persuasion of the lawyers, Periodical meeting with the lawyers, Negotiation with the clients. Mediation and Solenamah through the Court. To take appropriate steps for timely disposal of pledged goods, selling out of mortgaged property and if needed waiver facility/rescheduling of liability may be considered with Head Office approval. Investments to be made ensuring proper control of stock and sufficient collateral security with valid title. Investment to be made within the manageable capacity of the branch / branch incumbent. Clients who are reluctant with the Islami Banking system should not be inducted. Opening of big L/cs. to be controlled and branch / clients are to be encouraged to open small & medium sized L/cs. New profitable avenue / sector to be explored for making quality investment. Sitting with big defaulter clients may be arranged at branch / Zonal Office / Head office levels to find out the ways of recovery / regularization.
Page 45 of 48
Conclusion
Banks play a very vital role in the economic development of the country. The popularity of banks is increasing day by day which leads to increase competition as well. Currently 57 Banks are operated in Bangladesh. All the Commercial banks are offering almost the same products and services. But the way they provide the services are different from each other. So people choose their bank according to their satisfaction and need. On the other hand, Banks innovate new products and services to attract their desired customer. Islami Bank Bangladesh Ltd. is one of the fast growing banks in Bangladesh because of its rapid customers satisfaction. The bank is committed to run all its activities as per Islamic Shariah. IBBL through its steady process and continued success has, by now, earned the reputation of being one of the leading private sector banks of the country. Islami Bank Bangladesh Ltd. is also playing an important role in establishing Islamic Economics by combing the economic values with social and moral values. By following the novelty of Islamic Economics the bank is trying to make a balance development between spiritual and material life. Still now hear about 301 Islamic banking and financial institutions in about 49 countries of Asia, Africa, Europe, America and countries like Pakistan, U.K., U.S.A., Germany, Argentina, Denmark, Luxembourg, Switzerland and India have been established. The banking system of Pakistan and Iran was totally remodeled on the basis of Islamic Shariah services. IBBL will be more effective in our economy by launching new financial products to attract deposit as Consumer Credit Scheme, Pension Scheme, and Child Education Scheme and contribute more to develop the living standard of middle class people.
Page 46 of 48
Bibliography
1. Financial Administration Division of IBBL. 2. Annual Managers Conference-2013. 3. Islamic Banking -Habibur Rahman 4. Annual Reports of Islami Bank- 2005-2012 5. www.islamibankbd.com 6. Handout provided by IBTRA 7. Sina, M. Abu, The Modes of Investment of Islamic Banks and Nationalized Commercial banks: A Comparative Study, Ph.D thesis, Islamic University, Kushtia. 8. Babikir O.Ahmed, The Contribution of Islamic Banking to Economic Development: the case of the Sudan.Ph.d Thesis, University of Durham.U.K. In Abstracts of the Journal of Islamic Social Science, Vol.8, No.1, 1991 9. Nasruddin Ahmed, (1999), Working of an Islamic Bank:A Case Study of Islami Bank Bangladesh a paper presented at the seminar on Islamic economics finance, Held in U.K. in May 1999 Jointly Organized by the Islamic Foundation, U.K: The Islamic Development Bank and Loughborough University, Mark filed conference center, U.K. 10. Hamid, M.A (1999), Islamic Banking in Bangladesh: Expectations and realities, A Paper Presented at the International conferences on Islamic Economics in The 21 st Century held in Malaysia from 09 to 12 August 1999, Organized Jointly by International Islamic University Malaysia (IIUM) and Islamic Research and Training Institute (IRTI) of IDB, Malaysia. 11. Ahsan, A.S.M. Fakrul (1988), Islam and Modern Banking System. Thoughts on Economics, Vol.ix, No 1&2 Dhaka: Islamic Economics Research Bureau (IERB) 12. Hossain M. Musharaf, Measurement of Effectiveness of Islami Bank Bangladesh Ltd.The Islamic University Studies, Vol.ii, no. 2 Kustia,:Islamic University 13. Chakma, Pradanendu Bikash, Islam Md. Serajul and Karmaker Shyam Sundar. Managerial performance of Islamic banking: A Critical Review, Journal of Business Studies, Vol. xvi (2) Dhaka University.pp.85-102
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Investment Portfolio of Islami Bank Bangladesh Limited

Investment Portfolio of Islami Bank Bangladesh Limited

1.2 Importance of Banking in the economics of Bangladesh:

1.3 Objectives of the study:

Investment Portfolio of Islami Bank Bangladesh Limited

Secondary data were tabulated and analyzed.

1.5 Limitation of the study:

Investment Portfolio of Islami Bank Bangladesh Limited

2.1 Related literature:

Investment Portfolio of Islami Bank Bangladesh Limited

2.2 Definition of Islamic Bank:

Investment Portfolio of Islami Bank Bangladesh Limited

2.3 Objectives of Islamic Bank:

2.4.1 RIBA and its basic features are:

2.4.2 Basic characteristics of Riba as are:

2.4.3 RIBA and Profit

Investment Portfolio of Islami Bank Bangladesh Limited

Investment Portfolio of Islami Bank Bangladesh Limited

2.5 The relationship between Banking system and Islam

BANKING &FINANCIAL ACTIVITIES

Bank Bank 4. Principle Investment Client Client

Investment Portfolio of Islami Bank Bangladesh Limited

4. Cost plus agreed profit

3. Goods 1. Cash Payment

Bank Bank Client Client

Investment Portfolio of Islami Bank Bangladesh Limited

ISLAMI BANK BANGLADESH LIMITED 3.1.1 Introduction

Investment Portfolio of Islami Bank Bangladesh Limited

3.1.2 The History of Islami Bank Bangladesh Limited (IBBL)

3.1.3 Aims and objectives

Investment Portfolio of Islami Bank Bangladesh Limited

3.1.6 Goals and objective of the Bank:

3.1.7 General Banking Functions of IBBL

Investment Portfolio of Islami Bank Bangladesh Limited

3.1.8 Management of IBBL

Organizational Structure of the Company

Figure-3.1: Organizational Structure of the Company

Investment Portfolio of Islami Bank Bangladesh Limited

3.2 Corporate information: (As on Diary 2013 of IBBL)

Investment Portfolio of Islami Bank Bangladesh Limited

Investment Portfolio of Islami Bank Bangladesh Limited

4.2 Investment Objectives of IBBL

4.3 Investment Functions of IBBL:

Bai- Mechanism A) Bai-Murabaha B) Bai-Muajjal C) Bai-Salam D) Bai-Istisaa E) Bai-Asraf

Share Mechanism A) Mudaraba B) Musharaka Page 16 of 48

Ijara Mechanism A) Hire Purchase Under shirkatul Melk

Investment Portfolio of Islami Bank Bangladesh Limited

One by one are discussed below:

4.3.1 Bai-Modes: 4.3.1.1 Bai-Murabaha:

4.3.1.2 Bai-Muajjal (Deferred Sale)

Investment Portfolio of Islami Bank Bangladesh Limited

4.3.1.4 Istisna'a Sale:

4.3.2 Ijara Modes

Investment Portfolio of Islami Bank Bangladesh Limited

4.3.2.3 Qard Hasan (Benevolent loans):

Investment Portfolio of Islami Bank Bangladesh Limited

4.3.3 Share Modes

4.3.3.2 Musharaka (Partnership):

Investment Portfolio of Islami Bank Bangladesh Limited