Introduction Islamic Banking in Bangladesh There are currently seven commercial banks operating under Islamic principles. They are: 1. Islami Bank Bangladesh Limited, 2. Al-Arafah Bank Ltd. 3. Social Investment Bank Ltd, 4. Exim Bank Ltd, 5. Shahjalal Islami Bank Ltd. 6. Icb Islamic Bank Ltd 7. First security Islami Bank Ltd. HISTORICAL BACKGROUND First Security Islami Bank Limited (FSIBL) was incorporated in Bangladesh on 29 August 1999as a banking company under Companies Act 1994 to carry on banking business.
It obtained permission from Bangladesh Bank on 22 September 1999 to commence its business. The Bank carries banking activities through its Fifty Three (53) branches in the country. The commercial banking activities of the bank encompass a wide range of services including accepting deposits,making loans, discounting bills, conducting money transfer and foreign exchange transactions,and performing other related services such as safe keeping, collections and issuing guarantees,acceptances and letter of credit. At the beginning, FSIBL started their business with traditional commercial banking services.
However, from 2008 they converted their business to Islamic Banking with Islamic Shariah Act. The FSIBL has played a pioneering role in shaping the future of the Banking industry inBangladesh since its inception. The Bank started in 1999 with 14 branches and now it has 53 branches in Bangladesh and recently the bank introduce an Exchange House in Canada. The Bank also maintains a comprehensive correspondent relationship with top ranking banks. FSIBL has already started their on-line, SMS and ATM banking facilities for their clients. 2. 2 Vision of the Bank Wherever you are, you can Bank with us” is the motto of First Security Islami Bank. FSIBL is prepared to meet the challenge of the 21st century well ahead of time. To cope with the challengeof the new millennium it hired experienced and well-reputed banker of the country from theinception. The bank has efficient and dedicated professional and equipped with modemtechnology to provide the best service in the need of the people and thus to realize its vision. Sothe Bank defamed its Vision: ‘to be the most efficient Islamic Bank in terms of customer service profitability and technology application’
Mission To develop & deliver the most innovative products, manage customer experience, deliver qualityservices that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank 2. 4 Goal of the bank To exceed customer expectations through innovative Islamic financial products & services andestablish a strong presence to recognize shareholder’s expectation and optimize their rewardsthrough dedicated work force. . 5 Special Features of FSIBL • All activities of FSIBL are conducted under a profit/loss based system according toIslamic Shariah to get the nation rid of Usury. • Its investment policies under different modes are fully Shariah compliant and wellmonitored by the board of Shariah Council. • FSIBL has included online banking in its wide range of services. Bangladeshisoftware has been introduced in this feature to promote the local developers. • FSIBL regularly arranges its AGMs (Annual General Meeting).
Whenever neededEGMs (Extraordinary General Meeting) are also arranged. • They believe in providing dedicated services to the clients imbued with Islamic spiritof brotherhood, peace and fraternity. • The bank is committed towards establishing a welfare-oriented banking system tomeet the needs of low income and underprivileged class of people. • The Bank upholds the Islamic values of establishment of a justified economic systemthrough social emancipation and equitable distribution of wealth. •
Following the Islamic traditions, it is assisting in the economic progress of thesocially deprived people; in the creation of employment opportunities and in promotion of rural areas to ensure a balance development of the country. 2. 6 FSIBL’s Inter Division and Branch Coordination All the 53 branches are computerized under distributed server environment. Another few branches are planning to open in near future. FSIBL has already started their on-line, SMS andATM banking facilities for their clients.
FSIBL have set up Wide Area Network through Radio, Fiber-Optics & other availablecommunication media systems to provide any branch banking to their customers. Customer of one branch is now able to deposit and withdraw money at any of our branches. 2. 7 Online Banking FSIBL Online banking application addresses the needs of small, individual and corporateaccount holders of the bank. This application provides a comprehensive range of bankingservices that enable the customer to meet most of their banking requirements over the Net at any branch. . 8 SMS Banking SMS banking is a technology-enabled service offering from banks to its customers, permittingthem to operate selected banking services over their mobile phones using SMS messaging. FirstSecurity Islami Bank Ltd. has officially launched SMS banking service from December 17,2007. 2. 9 Merchant Banking FSIBL’s Merchant Banking Group is strongly positioned to offer perfect financial solutions itsclient’s business. They specialize in the arrangement of various forms of Foreign CurrencyCredits for Corporate.
FSIBL provide the resources, convenience and services to meet its clients’needs by arranging Foreign Currency credits through:• Commercial loans• Syndicated loans Lines of Credit from Foreign Banks and Financial Institutions• FCNR loans• Loans from Export Credit Agencies• Financing of Imports. 2. 10 Product and Services In the memorandum and articles of association of the First Security Islami Bank is revised itsarea of operation is clearly written. The product of FSIBL is targeted to fulfill that aim.
The product and services that are currently available are given below: • Depository Products First Security Islami Bank is now offering 09 depository products for mobilizing the savings of the general people. There are also emphasizing on non-fund business and fee based income. Bid bond/ bid security can be issued at our customer’s request. FSIBL is posed to extend L/C facilities to its importers / exporters through establishment of correspondent relations and Nostro Accounts with leading banks all over the world. • Loan Products
First Security Islami Bank offers a wide range of loan and advance product to the client for financing different purpose that fulfill the requirements of the bank and have good return to theinvestment as well as satisfy the client. • Other Product and Services The bank has its concentration for new product and services development for satisfying itscustomer and increasing its customer base. They prefer now faster service with least cost. For delivering faster service the bank has introduced online banking service. There are other productsand services that FSIBL has introduced.
They are: * Online Banking Services * Locker Services * Utility Bills * ATM services FLUCTUATION OF SHARE PRICE (ONE YEAR) BALANCE SHEET ANALYSYS 3. 1. 5 Types of Investment Facilities The Bank’s Policy is to introduce diversified / new types of Products / Product derivativesalong with usual Banking Products. At present the Bank offers the following facilities: i. Investment / Deployment of Funds: a. Bai-Murabaha (Deferred Lump Sum/ Installment Sale) b. Bai-Muajjal (Deferred Installment / Lump Sum Sale)c. Ijara (Leasing)d. Musharaka (Joint-Venture Profit-Sharing)e.
Mudaraba (Trustee Profit-Sharing)f. Bai-Salam (Advance Sale and Purchase)g. Hire-Purchaseh. Direct Investmentsi. Post Import Investment j. Purchase and Negotiation of Export Billsk. Inland Bills Purchasedl. Murabaha Import Billsm. Bai-Muajjal Import Billsn. Pre Shipment Investmento. Quard-ul-Hasan (Benevolent Investment) KYC Concept The Investment Officers/RM must know their customers and conduct due diligence onnew borrowers, principals and guarantors to ensure such parties are in fact who theyrepresent themselves to be i. e. , Know Your Customer (KYC).
The Banker – Customer relationship would be established first through opening of CD/STD / SB accounts. Proper introduction, photographs of the account holders / signatories, passport, Trade License, Memorandum and Articles of the Company, certificate of incorporation, certificate of commencement of business, List of Directors, resolution, etc. i. e. all the required papers as per Bank’s policy and regulatory requirements are to beobtained at the time of opening of the account. A declaration regarding approximatetransaction to the account is to be obtained during opening of account.
Informationregarding business pattern, nature of business, volume of business etc. is to beascertained. Any suspicious transaction must be timely addressed and brought down tothe notice of the Head Office / Bangladesh Bank as required and also appropriatecorrective measures to be taken as per the direction of Bank Management/BangladeshBank SWOT analysis Strength Diversified ownership pattern Strong market share Good Financial performance Good investment portfolio Comfortable Liquidity position Experienced management team Sound HR development programmes Improvement in automation Wide branch network
Significant involvement in corporate social responsibility Weakness: Unmatched asset versus capital growth Limited delegation of power Limited modern customer service facilities Moderate recovery of rescheduled investments High large investment exposures Initial stage of system based internal control procedures Opportunities: Investment in SME and Agro based industry Real time online banking Credit card in dual currency Creation of Islamic Money market product Introduce above 5 years Islamic bond Threats: Market pressure for increasing the SLR Overall liquidity crisis in money market
Government pressure to reduce investment rate Increase the capital adequacy position Findings * Most of the costumers do not know the regulations of the investment modes. * Shortage of human resources in Investment Section. * Deposit schemes favoring to the customers. * Senior level executives should be more cooperative with the subordinates. * Regarding security service of the bank, account opening and closing system, phone query, cash withdraw and deposit facility, credit profit rate, online banking, external and internal environment are satisfactory to the customers. Most of the customers are service holder and businessman; they like to come to FSIBL because near to residence / office / work place, better service, easier banking procedure. * Employees of the bank are more cooperative with the customers. * Employees of the bank have good knowledge to solve the queries of the customers. * According to the customers opinion more ATM booths needed to be setup in different places. According to the data analysis customers feeling about banking in FSIBL are very satisfied. Recommendations Different types of products and services are available in FSIBL but clients are not concerned about that so advertisement and promotional activities should be increased. * Increasing more deposit schemes under consumer banking. * Providing prompt service in account opening. * Now a day, the online banking service is very much popular in all over the world, so the bank should try to develop in this side. * FSIBL should increase Debit card ; credit card facilities. * SJIBL online service should be fast ; accurate. The website of SJIBL is not good enough; most of the pages are under construction. The page should be constructed as soon as possible. * Should increase the ATM Booths. * More manpower is required to run the business smoothly. * Employee trainings and workshops should be administered in order to give them knowledge and professionalism in customer interactions. They should be taught about how to deal with the problem of customers and problematic situations. * Physical and technological facilities should be increased in evaluating credit proposals. Experienced and expert personnel should be kept within the bank, which will lead to a quality selection of clients * SJIBL should more focus on customer needs. They need to concentrate more on their existing services and product innovation. * A yearly conference with the employees should be arranged where they will exchange their views with the management about different aspects. This will help to increase the efficiency of the employees. * Prompt service should be given to the customers. In this regard arranging job rotation regularly for employees to improve the skills in different types of service.
This will increase the efficiency of the service. * More emphasis should be given on the customers’ complaint. * Informal training can be a way to improve the skills of the employee. Allocating job responsibility to the employees according to their profit. * Try to create a good image to customers through different promotional tools Conclusion First security Islami Bank Limited is one of the leading Islamic sharah based commercial bank in Bangladesh. FSIBL is committed to provide excellent service to its valued customers. The management of FSIBL always gives special efforts to uphold the interest and trust of their customers.
By providing excellence service and special effort First Security Islami Bank has placed itself to a strong position among all the banks. The main focus of FSIBL is to concentrate on the consumer demand, which differentiates FSIBL with other banks. FSIBL has been successfully created a brand image Islamic sharah based in the market and is maintaining a strong position in the market. But still it has some weakness, which can be easily overcome. FSIBL has much more potential to explore the existing market. So, to be the number one forever they have to be very perfect in their business.