A Study into the “Non-Formal & Voluntary Banking Services” of SIBL
Chapter-Three: Organizational Profile
3.0 AN OVERVIEW OF THE BANK
SIBL started its operation on the 22nd November in 1995 as a second generation
Islamic bank to close co-operation and assistance of some renowned personalities of
the Islamic world. H.E. Dr. Hamid AL Gabid, former secretary general of OIC & Prime
Minister of Niger, H.E. Dr. Abdullah Omar Nasseef, Deputy Speaker of Saudi Shura
Council & Ex-secretary general of Rabeta Al-Islami, H.E. Ahmed M. Salah Jamjoom,
former commerce minister of Saudi Government, H.E. Prof. Dr. Ahmad EI-Naggar
(Egypt) participated to this noble endeavor as sponsor shareholders. Targeting
poverty, SOCIAL ISLAMI BANK LIMITED is indeed a concept of 21st century
participatory three sector banking model in one: in the formal sector, it works as an
Islamic participatory Commercial Bank with human face approach to credit and
banking on the profit and loss sharing: it is a Non-formal banking with informal
finance and credit package that empowers and humanizes real poor family and
create local income opportunities and discourages internal migration; it is a
Development Bank intended to monetize the voluntary sector and management of
Waqf, Mosque properties and introducing cash Waqf system for the first time in the
history. In the formal corporate sector, this Bank would, among others, offer the most
upto date banking services through opening of various types of deposit and
investment accounts, trade financing, providing letters of guarantee, opening letters
of credit, collection of bills, leasing of equipment and consumers’ durable, hire
purchase and installment sale for capital goods, investment in low-cost housing and
management of real estate, participatory investment in various industrial, agricultural,
transport, educational and health projects and so on.
To enhance the performance of the bank the management adopted strategic plan
that include increase in efficiency, establishment of transparency, efficiency and
accountability in all spheres of banking practices and as a logical consequence of
reform. Establishing Central Trade Processing Unit (CTPU) and Central Remittance
Processing Unit (CRPU) are one of the reform processes that the bank had
undertaken during the year 2010 to serve the client more efficiently and effectively.
SIBL has increased its authorized paid up capital from 4000 million to 10000 million
in the year 2010. The bank also obtained approval for issuance of Right share @ 1:1
at per three times from Securities and Exchange Commission in 2007,2008 and 2011
resulting additional capital of taka 534.56 million added in 2008, 1250.86 million in
2009 and taka 2987.82 million will be added with the paid up capital in 2011. The
year 2010 has ended with a capital surplus of Taka 165.16 million. Having the year
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2009 as a successful return SIBL witnessed a remarkable growth too in different
sectors in the year 2010. The bank has successfully opened 12 new branches and
10 SME service centers throughout the year and such total number of branches have
stood at 64.
3.1 A Brief History of SIBL
24th September 1989: Model of Social Investment Bank Ltd (SIBL)
presented before the president and cabinet at Bhaban by the founder of the
bank. Prof M. M. Mannan.
30th December 1989: Formal application for SIBL made to Bangladesh Bank
(BB).
6th December 1994: Letter of interest for SIBL received from BB.
5th December 1995: Inauguration by the President of the Peoples Republic
of Bangladesh.
Social Islami Bank Limited (SIBL) is a banking company registered under the
companies Act 1994 with its head office 15 Dilkusha C/A, Dhaka-1000. The
Bank started its operation from 22, November 1995. SIBL is a capitalized new
generating Bank with an authorized capital and paid up capital of Taka 585
million in 2005 and also. 585 million respectively as of December
2004.Currently the bank has 42 branches and 10 SME Service Centers. More
branches are planning to be opened soon. The bank undertakes all types of
banking transaction to support the development of trade and commerce in the
country. SIBL services are also available for the entrepreneurs to set up new
ventured and BMRE of industrial units.
To provide clientele services in respect of international trade it has
established wide corresponded banking relationship with local and foreign
banks covering major trade and financial interest home and abroad.
SIBL understands all types of banking transactions to support the
development of trade and commerce of the country. SIBL’s services are also
available for the entrepreneurs to set up new ventures and BMRE of industrial
units.
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3.2 Mission of Bank
High quality financial services with the latest technology.
Fast, Accurate and Satisfactory customer service.
Balanced & sustainable growth strategy.
Optimum return on shareholders' equity.
Introducing innovative Islamic Banking products.
Attract and retain high quality human resources.
Empowering real poor families and create local income
opportunities.
Providing support for social benefit organizations - by way of
mobilizing funds and social services.
3.3 Vision of the Bank
Social Islami Bank Limited started its journey with the concept of 21st
Century Islamic participatory three sector banking model: i) Formal Sector-
Commercial Banking with latest technology; ii) Non-Formal Sector - Family
Empowerment Micro-Credit & Micro-enterprise program and iii) Voluntary
Sector - Social Capital mobilization through CASH WAQF and others. Finally,
"Reduction of Poverty Level" is the Vision of Bank, which is a prime object as
stated in Memorendum of Association of the Bank with the commitment
"Working Together for a Caring Society".
3.4 POSITION OF THE BANK
Social Islami Bank Limited has taken a renewed drive and zeal aiming at
consolidating its business in more focused areas like SME, agro-finance,
remittance and search for alternative delivery channel. Under alternative
delivery channel, ATM, SMS banking, Internet banking and mobile-based
remittance payment systems are gradually introduced to reach the SIBL
services to the doorsteps of the customers. The bank under the newly
planned IT scheme, VISA card both debit and credit are also in operation.
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SIBL, a second-generation bank, operating according to Islami banking
system has now 64 branches. It has also formed two subsidiary companies
namely, SIBL Securities Ltd. and SIBL Investments Ltd.
SIBL has set its strategy to convert all its banking activities from traditional
branch-based banking system to a centralized processing unit (CPU) based
banking, controlled directly from the central point. Meanwhile, bank has
centralized its international trade finance through a focused Centralized Trade
Processing Unit (CTPU) for up gradation of service distribution system in all
the branches irrespective of being an AD or Non-AD branch. As a result,
every SIBL branch has been authorized to facilitate LC clearance to its clients.
The bank also adopted other reform by establishing Central Remittance
Processing Unit (CRPU) in order to serve its clients more efficiently and
effectively. At the other extreme, bank introduced SIBL Visa Islamic Credit
card having four types of card namely Duel Currency Gold, Duel Currency
Classic, Local Currency Gold and Local Currency Classic.
SIBL under its organizational restructuring process introduced a new
organgram as approved by the Board of Directors of the bank. With the
introduction of it, the bank can now achieve the corporate objectives in regard
to better customer focus/performance management/better risk
management/efficiency and productive level increase and accountability and
reward culture.
The bank maintained and achieved strong position in all key access of
operations despite challenges. Capital of the bank was TK. 12.60 crore at the
very inception, and by the year 2010 it increased to TK. 467.86 crore.
Deposits of the bank stood at TK. 4485.08 crore and total assets stood at TK.
5516.85 crore as on 31 December, 2010 which indicated a growth of 41.98%
and 37.99% respectively over the previous year. The bank achieved 37.99%
growth in investment with a total investment portfolio of TK. 3668.03 crore in
2010 compared to TK. 2658.06 crore in 2009. The classified investment was
only 4.76% of total investment. The bank registered an operating profit of TK.
163.86 crore in the year 2010 with remarkable growth of 53.96% compared to
TK. 106.43 crore in 2009.
SIBL has projected its business paln for the year 2011 pronouncing slogun
“the year of image building and consolidation of business”. The bank’s
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professional focus is given on customer’s satisfaction and for this; customer
care desk has already been installed in its 29 key branches. In phases, one
stop service will be introduced for privileged clients/Hon’ble clients/Fast track
clients and women clients.
3.5 Position of the Principal Branch till 31st July 2011
Table-3.0: Position of the Principal Branch since its opening
Liability Amount in Taka Assets Amount in Taka
Total liability 25,49,37,76,075.06 Cash and bank 9,95,67,897.64
balance
Total deposits 15,19,44,71,507.03 Bai-Muajjal 2,08,62,439.04
SME
Total cash waqf 86,38,539.92 Higher 4,16,99,28,358.40
purchase &
S.Melk
(general)
Foreign 3,03,53,836.30 Higher 3,21,418.21
currency purchase &
deposits S.Melk, SME
Profit payable 3,30,94,016.00 Quard 30,44,26,058.21
on bank
deposits
Investment 7,25,90,682.99 Investment to 14,74,32,134.22
income staff
suspense A/C
Murabaha 5,31,316.53 Furniture & 35,82,085.50
(General) Fixture
Bai-Muajjal 4,44,12,293.14 L/C Customers 3,07,91,70,148.05
(General) Liabilities
Bai- 739.00 Letter of 2,15,06,89,563.43
Muajjal(SME) Guarantee
Particulars Amount
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Total Income 64,54,19,760.17
Total Expenditure 38,75,51,772.68
Net Profit 25,78,67,987.49
Total Investment 11,15,57,12,353.60
Total Deposits 15,19,44,71,507.03
Total Assets 25,49,37,76,075.06
Total Liabilities 25,49,37,76,075.06
3.6 Organizational Structure (Organogram)
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3.6 Service provided by the SIBL in accordance of Islamic Shariah
Social Islami Bank Ltd. provides three types of banking services such Formal,
Non-Formal and Voluntary Banking service. The three sectors, various
services provided in accordance of Islamic Shariah and these are mentioned
below:
Formal Banking Sector:
(a) Deposit Account:
Al Wadiah Current Deposit.
Mudaraba Savings Deposit.
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Mudaraba Term Deposit.
(b) Special Saving Scheme:
Mudaraba Monthly Profit.
Hajj Scheme.
Mudaraba Millionaire Scheme.
Mudaraba Special Savings (Pension) Scheme.
Mudaraba Education Savings Scheme.
Mudaraba Double Benefit Deposit Scheme.
(c) Investments:
Bai-Muazzal: (1) Commercial, (2) House Hold, (3) Trust
Receipt.
HPSM-Commercial: (1) Shirkat, (2) Ijarah, and (3) Sale.
Mudaraba-Bill of Exchange
Mudaraba-Post Import
Mudaraba-Commercial
Foreign Exchange Trade: (1) Export Finance, (2) Import
Finance,
(3) Foreign Remittance, (4) SWIFT.
Non-Formal Banking Services:
1. Family Empowerment Micro
Credit Program
2. Family Empowerment Micro
Enterprise Program
3. Small and Medium Enterprise
Voluntary Banking Services:
1. Cash Waqf Certificate Account
2. Corporate Social Responsibility
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