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]