Islami Bank Bangladesh Limited

Islami Bank Bangladesh Limited (IBBL) the first interest-free Islamic Shariah based bank in Bangladesh was incorporated on 13 March 1983 as a public limited company under the Companies Act 1913. The bank obtained license from BANGLADESH BANK on 28 March 1983 and started banking operations on 30 March 1983 through its main branch at Dhaka, which was formally inaugurated later, on 12 August 1983. The bank is a joint-venture enterprise of 22 private sponsors of Bangladesh, the government of Bangladesh, Islamic Development Bank, and 13 banks and financial institutions of the Middle Eastern Muslim countries.

In 2020 the amount of the authorized and paid-up capital and reserve fund stood at Tk 20000million, and Tk 16100 million respectively. The bank is listed with both Dhaka and Chittagong Stock Exchange.

IBBL conducts businesses on the principles of Mudaraba, Musharaka, Hire Purchase (under Shirkatul Meelk), Bai-Murabaha, Bai-Muajjl and Bai-Salam. The bank also provides all other commercial banking services to the customers observing the provisions of the Bank Company Act 1991, Bangladesh Bank's directives and the principles of Islamic Shariah. Deposit-mix included Mudaraba savings deposits, Mudaraba special notice deposits, Mudaraba term deposits ranging from 6 months to 36 months, Mudaraba Hajj savings deposits, Mudaraba special savings (pension) deposits and Mudaraba savings bond of 5 and 8 years.

A 21-member board of directors oversees the aggregate business affairs of the bank. The executive president is its chief executive officer. In December 2009, the bank had 373 branches and a total of 18621employees including 14629 officers. There is a 10-member Shariah Council for the bank to ensure the compliance of Islamic rules in all spheres of its banking and financial activities. The investments (lending) of the bank are partnerships, profit sharing, capital in affiliated projects, real estates, housing, transport, agriculture, export-imports, trade and commerce and other economic activities.

Basic Facts and Economic Indicators (In Million Taka)

Indicators	2018	2019	2020
Authorized Capital	20000	20000	20000
Paid up Capital	16100	16100	16100
Reserved Fund	19451	19396	40902.4
Deposits	822573	946813	1179532.4
a) Call Deposits	83289	739284	109030.9
b) Term Deposits	91037	855776	1070501.5
Loans and Advances	805869	898871	1035158
Investment	41610.7	54138	74107.4
Total Asset	997429.6	1141230	1448816.1
Total Income	77596	88161	84862
Total Expenditure	57356.6	67933	70315.9
Foreign Currency Trading	926619	939708	1110128
a) Export	251592	234366	224970
b) Import	399816	399884	419037
c) Remittance	275211	305458	466121
Total Manpower	14698	16807	18621
a) Officers	12043	13404	14629
b) Staff	2655	3403	3992
Correspondent Banks	619	595	610
Total Branches (in numbers)	342	357	373
a) Domestic	342	357	373
b) Overseas	0	0	0
Agriculture Credit
Loan Disbursed	14707	13655	14796
Realised	10301	12673	14001
Industrial Credit
Loan Disbursed	354028	433952	418006
Realsied	320452	371685	374532
Loan Outstanding by Sector
Agriculture and Fisheries and Forestry	12737	13422	14910
Industry	145828	183664	204635
Trade and Commerce	240749	263946	304478
Poverty Reduction	1823	1971	2779
CSR	2813	1031	855.2

Source Government of Bangladesh, Ministry of Finance, Banking and Financial Institution Division, Barshik Protibedon [Annual Report on Banks and Financial Institutions], 2019-20 and 2020-21.

According to CAMEL (Capital, Assets, Management, Earnings and Liquidity) rating made by the Bangladesh Bank the bank holds the highest amount of liquidity. The Global Finance, a reputed London based quarterly magazine awarded IBBL as the best bank of the country for the year 1999 and 2000. In 2019, bank deposits accounted for 7.4 per cent of total banking sector deposits and loans and advances accounted for 8.2 per cent of total banking sector loans and advances. The average interest rate differential between June 2019 based deposits and loans and advances was 2.7 percent. [Muhammad Abdul Mazid]