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Annual Report 2017

Sustainable growth
Shared prosperity
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Islami Bank Bangladesh Limited
2017 Annual
Report

Annual Report 2017

Sustainable growth
Shared prosperity

Sustainable Growth
Shared Prosperity
Sustainable Development-We mean to meet the needs of the present
without compromising the ability of future generations to meet their own
needs. Keeping in view, we strive to ensure Economic Development,
Social Development as well as Environmental Protection driven by digital
technology.

To this extent, we pay attention to our society and environment instead of


mere growth. To its end in view, we focus on strategic partnership with all
our stakeholders for building shared prosperity.
Islami Bank Bangladesh Limited
Annual 2017
Report

Registered Office:
Islami Bank Bangladesh Limited, Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh, GPO Box No.233;
Phone: PABX (88-02) 9563040, 9560099, 9567161, 9567162; Mobile: 88-01711 435638, 88-01711-435639
FAX: 88-02-9564532, 9568634; SWIFT: IBBLBDDH, e-mail: info@islamibankbd.com; Website: www.islamibankbd.com

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Islami Bank Bangladesh Limited
2017 Annual
Report

THE MESSAGE FROM THE


HOLY QUR’AN

(8-9 )

And they (pious men) feed, for the love of Allah, the poor, the
orphan and the captive. (Saying),"We feed you for the
satisfaction of Allah; no reward do we desire from you, nor
thanks. (Surah Ad-Dahr: 8-9)

(245: )

Who is he that will lend to Allah a goodly loan so that He may


multiply it to him many times? And it is Allah Who decreases
or increases (your livelihood), and unto Him you shall return.
(Surah Al Baqarah: 245)

(261: )

The likeness of those who spend their wealth in the Way of


Allah, is as the likeness of a grain (of corn); it grows seven
ears, and each ear has a hundred grains. Allah gives manifold
increase to whom He pleases. And Allah is All-Sufficient (for
His creatures' needs), All-Knower. (Surah Al Baqarah: 261)

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Islami Bank Bangladesh Limited
Annual 2017
Report

GUIDANCE FROM THE


HADITH

Narrated Sa`d bin Abu Waqqas (R), The Prophet (SAW) came visiting
me while I was (sick) in Mecca. I said, "O Allah's Messenger (SAW)!
May I will all my property (in charity)?" He said, "No." I said, "Then
'One-half?" He said, "No". I said, "One third?" He said: "Yes, one
third, yet even one third is too much. It is better for you to leave your
inheritors wealthy than to leave them poor begging others.
(Sahih Al Bukhari and Sunan An-Nasa'i).

Narrated from Abu Hurayrah (R), He said that the Messenger


of Allah (Peace be upon him) said, "Allah is in the help of a
person, till the person is in the help of his brother (i.e. other person).
(Sahih Muslim)

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Islami Bank Bangladesh Limited
2017 Annual
Report

Letter of Transmittal

All Honourable Members/Shareholders,


Bangladesh Bank,
Registrar of Joint Stock Companies and Firms,
Bangladesh Securities and Exchange Commission,
Dhaka Stock Exchange Limited and
Chittagong Stock Exchange Limited

Subject: ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2017

Dear Sir,

Please find an enclosed copy of the Annual Report along with the audited Financial
Statements including consolidated and separate Balance Sheet as at December 31,
2017 and Profit & Loss Account, Cash Flow Statements and Statement of Changes
in Equity for the year ended December 31, 2017 along with the notes thereon of
Islami Bank Bangladesh Limited and its subsidiaries (Islami Bank Securities Limited
and Islami Bank Capital Management Limited) for your kind perusal and record.

Thank you.
Yours faithfully,

(J Q M Habibullah, FCS)
DMD & Company Secretary

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Islami Bank Bangladesh Limited
Annual 2017
Report

Contents
Company Ethos
Letter of Transmittal 5
Notice of 35th AGM 8
Vision 9
Mission 10
Strategic Objectives 11
Core Values & Commitments 12
Code of Conduct and Ethical Principles 13
01 Company Ethos Awards & Recognitions 14-16
Forward Looking Statement 17
02 Corporate Structure
Future Outlook: Priorities for 2018 18
03 Corporate Governance Chairman’s Message 19-23
Managing Director’s Review 24-31
04 Directors’ Report
Corporate Milestones 32-33
05 Risk Management Sponsors & Placement Holders 34-35

Corporate Structure

Corporate Information 36-37


Corporate Organogram 38
Board and its Committees 39-42
Shari’ah Supervisory Committee 43
Management Committee (MANCOM) 44
Senior Executives 45
Directors’ Profile 46-59

Corporate Governance
Corporate Governance Report 60-84
CEO and CFO’s Declaration to the Board 85
Certificate on Compliance of Corporate
Governance 86
Compliance Status of BSEC Guidelines 87-90
Global Reporting Initiatives Disclosure Indes 91-94

Directors’ Report
Directors’ Report 95-139
- Corporate Profile 98-102
- Financial Review 102
- Business Model 103-105
- Business Review 105-139
Integrated Reporting 140

Risk Management
Report of Risk Management Committee 141-143
Risk Management Report 144-159
Capital Plan 160-161
Disclosure on Risked Based Capital (Basel III) 162-184
Non-Performing Investment Management 185-186
ICT Management 187-191
Green Banking 192-197
Stakeholder and materiality 198-202
Sustainability Report 203-208

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Islami Bank Bangladesh Limited
2017 Annual
Report

Management Report & Commentary

Management Report and Analysis 209-213


Report on Financial Inclusion 213
Products and Services 214-218
Alternative Delivery Services 219-223
Communication and Business Promotion 224-227
Stakeholders’ Information 228-234
Graphical Presentation 235-237
06 Management Report & Commentary Segment Information 238
Horizontal & Vertical Analysis 239
07 Financial Statements
Profitability, Dividends, Performance and
08 Consolidated Financial Statements Liquidity Ratios 240
Statement of Value Added 241-245
09 Financial Statements-IBBL
Financial Calendar 245
Financial Highlights 246
Five Years Performance 247-248
Media Highlights 249
Success Story 250-265
Report of the Shari’ah Supervisory
Committee 266
Audit Committee Report 267-270

Financial Statements
Independent Auditors’ Report 271-273

Consolidated Financial Statements


Consolidated Balance Sheet 276-277
Consolidated Profit and Loss Account 278
Consolidated Cash Flow Statement 279
Consolidated Statement of Changes in Equity 280-281

Financial Statements-IBBL
Balance Sheet 282-283
Profit and Loss Account 284
Cash Flow Statement 285
Statement of Changes in Equity 286-287
Liquidity Statement 288
Notes to the Consolidated Financial
Statements 289-344
Financial Statements-OBU 345-350
Financial Statements-IBSL 351-370
Financial Statements-IBCML 371-378
Standard Disclosure Index 379-381
Bank’s Network 382-383
IBBL ATM & IDM Location 384-392
Glossary of Terms 393-394
Proxy Form & Attendance Slip 395

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Islami Bank Bangladesh Limited
Annual 2017
Report

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Islami Bank Bangladesh Limited
Head Office, Islami Bank Tower
40, Dilkusha Commercial Area, Dhaka.

NOTICE OF THE 35TH ANNUAL GENERAL MEETING


Notice is hereby given that the 35th Annual General Meeting of Islami Bank Bangladesh Limited will be held on Monday,
the 25th June 2018 at 10.00 AM at Kurmitola Golf Club, Dhaka Cantonment, Dhaka for transacting the following business:

AGENDA
01. To receive, consider and adopt the Audited Financial Statements for the year ended 31st December
2017 and Reports of the Directors and Auditors thereon.
02. To approve Dividend for the year ended 31st December 2017.
03. To appoint Auditor(s) and to fix up their remunerations for the year 2018.
04. To elect/re-elect Directors.
All Members are requested to kindly make it convenient to attend the Meeting in time.

By order of the Board of Directors

Dated: Dhaka
25th April, 2018 (J Q M Habibullah, FCS)
DMD & Company Secretary
...................................................................................................................
Notes:
a) Record date is 21.05.2018 i.e. the honorable shareholders whose names will appear in the CDS (Central
Depository System)/Company’s Register on 21.05.2018 will be entitled to get dividend for the Year 2017 against
their shareholdings.

b) A member eligible for attending and voting at the Annual General Meeting may appoint a proxy on his/her behalf.

c) Power of Attorney / Proxy Form must be submitted to the Registered Office or Share & Bond Division (63 Dilkusha
C/A, 5th Floor, Dhaka) of the Company at least 48 (Forty Eight) hours before the Meeting i.e. 10.00 AM on Saturday,
the 23rd June, 2018. Revenue Stamp of Tk.20/- (Taka Twenty) only shall have to be affixed on the Proxy Form.

d) Annual Report, Attendance Slip and Proxy Form along with the Notice will be sent to the honourable shareholders
by post/courier. The honourable shareholders may also collect Proxy Form from the Share & Bond Division of the Company.

e) Directors’ Report and Audited Financial Statements of the Bank for the year ended 31st December 2017 along
with the Auditors’ Report thereon shall be available on Bank’s website: www.islamibankbd.com.

f) Election of Directors will be dealt in terms of Articles of Association of the Company and relevant
rules/laws/circulars in force.

g) Entry is reserved only for members and Proxies / Attorneys. Attendance slip (duly signed) must be submitted to the
Registration Counter at the time of entrance. Registration Counter shall remain open till 11:00 AM.

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Islami Bank Bangladesh Limited
2017 Annual
Report

Vision
Our vision is to always strive to achieve superior financial
performance, be considered a leading Islami Bank by reputation
and performance.

Our goal is to establish and maintain modern banking


techniques, to ensure soundness and development of the
financial system based on Islamic Principles and to become a
strong and efficient organization with highly motivated
professionals, working for the benefit of people, based on
accountability, transparency and integrity to ensure stability of
the financial systems.

We will try to encourage savings in the form of direct investment.


We will also try to encourage investment particularly in projects,
which are more likely to lead to higher employment.

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Islami Bank Bangladesh Limited
Annual 2017
Report

Mission
To establish Islamic Banking through introduction of
a welfare oriented banking system and also ensure
equity and justice in all economic activities, achieve
balanced growth and equitable development
through diversified investment operations particularly
in the priority sectors and less developed areas of
the country.

To encourage the socio-economic development and


financial services to the low-income community
particularly in the rural areas.

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Islami Bank Bangladesh Limited
2017 Annual
Report

Strategic Objectives
The general strategic objectives of IBBL is to consider balanced scorecard methodology and continually adhere the
same through annual reviewing while some specific objectives are mentioned below:
Financial Efficiency
To achieve sustainable growth in all key financial indicators;
To increase bottom line through maximization of income and efficient management of expenditure.
Customer Focus
Develop strategic partnership by addressing their existing and dynamic needs of product and services;
Endeavor to attract customer through delivering need based financial services;
Continuous improvement of product and services for adopting changing need of customer base to retain market share.
Operational Excellence
Increase community outreach through innovation of various marketing channels;
Increase efficiencies through use of virtual technologies for moving towards financial excellence;
Improve internal and external communications through social communication network;
Develop and implement a promotional plan to expedite financial inclusion;
To include unbanked people into banking with Over the Counter banking services.
Human Development
Employ professionals who create success for customers;
To develop the leadership abilities and potential of our team;
To align incentives and staff rewards with performance;
To continually learn and adopt global updated best practices.

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Core Values & Commitments
Adherence with Islamic Shari’ah
Superiority of Islamic Financial System is the centre of our strength.
All deposit and investment products as well as operational ethics are guided by the principles of
Islamic Banking and Shariah.

Welfare Banking
Ensure equity & justice in all economic activities.
Achieve balanced growth and equitable development.
Banking unbanked population through financial inclusion.

Socially Responsible Banking


No investment in socially and environmentally undesirable project.
Expanding investment on need based retail and priority sectors of the country.

Integrity
Act what we believe in.
Respect every relationship.

Commitments
Strict compliance to regulatory requirement.
Care for all stakeholders.
Believe in continuous improvement.

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Islami Bank Bangladesh Limited
2017 Annual
Report

Code of Conduct and


Ethical Principles
Shari’ah foundation of ethics
Avoidance of interest (Riba) in all transactions
Ensuring justice and fairness to all the stakeholders
Righteousness in dealing with the day to day affairs
Ensuring transparency & avoidance of obscurity (Gharar)

Principles of personnel ethics


Trustworthiness in discharging the assigned duties
Dedication in abiding by the rules and regulations
Commitment in making one’s work perfect
Adherence to truth and avoidance of falsehood
Maintaining highest level of honesty and integrity

Rules of ethical conduct


General Code of Conduct of the Bank
Guidelines of National Integrity Strategy
Disciplinary procedures regarding the commission of misconduct

Conduct towards shareholders, managers and fellow employees


Preserving the benefits and interest of the shareholders
Maximizing company profit and manage the same ethically
Providing fair and equal employment opportunity
Ensuring logistic support for employee satisfaction
Providing opportunities for professional development
Adherence to good corporate governance practices
Refraining from any sort of favoritism and biasness
Appreciating the value of individual & team contribution

Rules of conduct towards those who deal with the institution


and related parties
Ensuring prompt & responsive approach to the customer need
Treating the customers fairly and without any prejudice
Ensuring privacy/secrecy of customers/stakeholders information
Updating customer regarding suspicious transaction in his account
Informing the customers regarding all banking product & services
Recognizing the norms, customs, values of the community/society
Treating the external counter-parties professionally and impartially
Avoiding conflict of interest while negotiating with the counter-parties

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Islami Bank Bangladesh Limited
Annual 2017
Report

Awards & Recognitions


South Asian Federation of Accountants (SAFA)
SAFA awarded IBBL the 1st Position in SAARC Anniversary Award for Corporate Governance Disclosures for the
year 2016 and 2012. We were also awarded the 1st position under Private Sector Banks (including Co-operative
Banks) in the Best Presented Annual Reports for the year 2012.

Institute of Chartered Accountants of Bangladesh (ICAB)


ICAB conferred IBBL the 2nd position for good Corporate Governance for the year 2016, 3rd position under Private
Sector Banks (including Co-operative Banks) in the Best Presented Annual Reports for the year 2014. ICAB also
conferred IBBL the 1st position both under Private Sector Banks (including Co-operative Banks) in the Best
Presented Annual Reports and SAARC Anniversary Award for Corporate Governance Disclosures for the year 2012.

Institute of Cost and Management Accountants of Bangladesh (ICMAB)


ICMAB glorified IBBL with 1st Position amongst the Private Commercial Banks in Islamic Operation in ICMAB
National Best Corporate Award – 2016, 2015, 2014, 2013, 2012, 2011, 2010.

The Banker
IBBL, being only Bank in Bangladesh, entered into the World’s Top 1,000 Banks list in 2012. IBBL has made
Bangladesh proud of being among the best 1000 banks in the world, ranked by 'The Banker’. This prestigious
ranking is a clear testimony to IBBL’s stability and strength and its leadership in financial sector of Bangladesh.
Position in terms of key indicators in 2017:

81st in Performance (Profits on Capital)


346th in Return on Asset (ROA)
765th in Size (Assets base)
846th in Soundness (Capital to Assets Ratio) and
941st in Strength of Tier 1 capital.

IBBL won “Bank of the Year Award-2016” conferred by ‘The Banker’, UK’s premier financial magazine of
Financial Times Group, London. The award is regarded as the Oscar in banking industry. The Banker has awarded
this highly recognized global recognition upon Islami Bank Bangladesh Limited after a vigorous analysis of the
performances over the years. IBBL is the only Bangladeshi Bank awarded ever by the The Banker.

Global Finance
The Global Finance, a reputed USA-based Financial Magazine, adjudged IBBL as the best Islamic Financial
Institution of Bangladesh for the years 2008, 2009, 2010, 2011 & 2013.

Bangladesh Bank and SME Foundation


Bangladesh Bank and SME Foundation jointly conferred IBBL the prestigious award - the best ‘Small Entrepreneur
Friendly Bank of the Year’ in 2014 to IBBL considering its contribution to SME financing.

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Islami Bank Bangladesh Limited
2017 Annual
Report

Awards

The Strongest The Strongest SAARC Anniversary Award for Best Islamic Bank
Islamic Retail Bank Islamic Retail Bank Corporate Governance 2017 in Banladesh
in South Asia 2017 in Bangladesh 2017

NRB Remittance Highest Taxpayer in the Arabian Banker Large Taxpayer


Award 2017 (Gold) Banking Sector Award 2017 Award 2017 Unit Award 2017

Bangladesh Bank ICMAB Best The Banker Remittance Gold


Remittance Corporate Award 2016 Award 2016
Award 2016 Award 2016

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Islami Bank Bangladesh Limited
Annual 2017
Report

Other Recognitions

Islami Bank Bangladesh Limited achieved ‘Islamic Retail Banking Awards (IRBA) 2017’ as Strongest Islamic
Retail Bank in South Asian Region conferred by UK-based Financial Intelligence House Cambridge IF Analytica.

IBBL was awarded as the highest taxpayer in the banking sector in 2016-2017 tax year by the Large Taxpayer
Unit (LTU) of the National Board of Revenue.

Islami Bank Bangladesh Limited has been awarded Bangladesh Bank Remittance Award for collecting highest
remittance in the year 2016.

IBBL is the only Bank among top 20 (twenty) VAT payers in Bangladesh in the year 2016.

IBBL received the Asian Banker CEO Leadership Achievement Award-2016 and was recognised as the ‘Best
Managed Bank’ in Bangladesh. The award was given at the Asian Banker Summit held at the JW Marriott Hanoi,
Vietnam.

Gold Medal for outstanding contribution to the foreign remittance services of Bangladesh by Centre for
Non-Resident Bangladeshi in 2016.

IBBL was awarded the ‘Sardar Patel Award’ 2016 for outstanding contribution in Sustainable Economic
Development.

Gold medal as ‘Branding Bangladesh Award’ for its outstanding performance in remittance services last year by
Centre for Non-Resident Bangladeshi in 2014.

Financial Branding Award by Centre for Non Resident Bangladeshis for its outstanding contribution to the
Financial Branding of Bangladesh in abroad in 2014.

Best Brand Award from Bangladesh Brand Forum in 2014.

IBBL was ranked by Bangladesh Bank among top ten banks in Bangladesh for Green banking in 2012 and 1st
position in Climate Risk Fund Utilization activities.

IBBL has received award from VISA International for “Outstanding Achievements in Debit Portfolio Growth” for
the year 2015.

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Islami Bank Bangladesh Limited
2017 Annual
Report

Forward Looking Statement


The Annual Report-2017 of Islami Bank Bangladesh Global unrest in Middle-east countries affecting flow of
Limited has mentioned forward looking statements in its remittances and trade;
different sections. Since there are uncertainties about the
Changes in fiscal, monetary and trade policies;
occurrence of the future events, those should be treated
from that viewpoint in decision making by the users of the Natural catastrophes and political disturbances;
Annual Report. It relates to future events. It often predicts
Changes in consumer behaviors, technologies and
expected future business and financial performance. It commodity price;
contains words such as expect’, ‘anticipate, believe, seek,
will, may, would, presume, assure, hope, so on and so Changes in financial and capital market;
forth. A forward-looking statement naturally addresses
Changes in interest rates and forex rates locally and
matters that are, to certain degrees, uncertain and may internationally;
not happen. In most cases, a forward-looking statement
is made in respect of company’s expected income, Changes in legal and regulatory framework;
earning, business growth, horizontal expansion, cost Changes in Cash Reserve Ratio (CRR) and Statutory
structure, capital structure, dividends etc. Such a Liquidity Reserve (SLR);
statement is made based on some assumptions about
future events which may happen or may not happen. The Withdrawal of incentives given to any sectors.
following major factors that may affect overall business
While these forward-looking statements represent
conditions of the Bank are mentioned below:
our current judgment on what the future holds, they
Changes in national economy, political and financial are subject to risks and uncertainties that could
conditions, changes in the government’s adjustments
cause actual results to differ materially. Since there
and control policies, and regulatory issues, securities
and capital markets behavior including changes in are uncertainties about the occurrence of the future
market liquidity and volatility, global economic downturn events, those should be treated from that viewpoint
including a significant decline in global trade volumes; in decision making by the users of the Annual Report.

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Islami Bank Bangladesh Limited
Annual 2017
Report

Future Outlook-Priorities for 2018


Focus on virtual and over the counter Banking

Shareholders value creation

Balanced Fund Management

Create performance focused culture

Retention of clientele base through building


strategic partnership

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Islami Bank Bangladesh Limited
2017 Annual
Report

Chairman’s Message

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Islami Bank Bangladesh Limited
Annual 2017
Chairman’s Message
Report

In the name of Allah, the Most Gracious, the Most protectionist policy of some advanced economies may
Merciful, and Peace be upon our Prophet Mohammad exert a negative impact on global trade and
(SM), His Companions and Relatives. cross-border investments.

The Bangladesh economy as a whole exhibited a


Esteemed Shareholders,
strong growth pace and stability throughout the year.
Assalamu Alaikum WaRahmatullah
The GDP growth has been more than expected
It gives me immense pleasure to present to you the compared to the previous year. The growth momentum
Annual Report of your beloved Bank IBBL along with was largely concentrated in the industry and service
the Audited Financial Statements for the year ended on sectors, while agricultural activities registered a
31 December 2017, another milestone year with record decelerated growth compared to the growth of the
achievements on multiple fronts. As detailed in the previous fiscal year. The economy of Bangladesh
report, the Bank, by the grace of Almighty Allah, maintained sustained economic growth even in the
maintained to tread the path of continued growth and face of global financial crisis. According to the final
upheld its flagship position in the banking arena of estimate of Bangladesh Bureau of Statistics (BBS), the
Bangladesh. This was possible due to the GDP growth of FY2016-17 stood at 7.28 percent, 0.17
whole-hearted and dedicated efforts of all individual percentage point higher from 7.11 percent of the
across the organization. previous fiscal year. In FY2015-16, per capita GDP was
US$1,385 which rose to US$1,544 in FY2016-17.
Alhamdulillah, 2017 has been a year of another great Likewise, per capita national income increased to
success for the Bank. Together, we have been able to US$1,610 in FY2016-17, US$145 higher than a year
reach several significant milestones and feats during earlier. Gross investment increased to 30.51 percent of
the last year. Despite challenging circumstances, we GDP, 0.86 percentage point higher than the preceding
have performed remarkably towards achievement of fiscal year.
financial, social and environmental goals.
The banking industry was marked with stable credit
The global pickup in activity that started in the second growth. Interest rate on loans and advances fell
half of 2016 gained further momentum in the first half drastically compared to the cost of deposit which in
of 2017. Notable rise in investment, trade and industrial turn squeezed the spread. Excess liquidity and higher
production coupled with enhanced business and Non-performing Loan (NPL) were the major concern for
consumer confidence are supporting the recovery of the banking industry during the year.
world economy. Based on these outcomes
International Monetary Fund (IMF) has predicted an Consistency in Financial Performance
increase in the global economic growth. In the IMF's Against the context mentioned above, IBBL’s
latest World Economic Outlook (WEO), October 2017 performance in different business parameters has been
the global growth has been projected at 3.6 percent for impressive and encouraging. We sealed into new
2017 and 3.7 percent for 2018, which are 0.4 heights in pertinent business parameters. We have
percentage point and 0.5 percentage point higher reached the milestones of Tk.755,000 million in
compared to the growth of 2016. The continued boost Deposit mobilization and Tk.710,000 in investment
in domestic demand in the developed economies, registering 10.81% and 15.30% growth respectively.
favorable financial conditions, strong business and The Return on Equity (ROE) and Return on Asset (ROA)
consumer confidence are expected to play a vital role recorded at 9.63% and 0.55% while Earning per Share
in achieving such growth targets. Significant (EPS) stood at Tk.2.91. Total assets of the Bank rose
improvement in the investment situation, increased to Tk.899,960 million showing a growth of 12.82%
investment in China's infrastructure and housing sector over the previous year. IBBL registered excellent
and revival from the downturn of commodity prices, growth in foreign exchange business through handling
even in partial, are expected to induce growth export business of Tk. 240,026 million, with almost 9%
momentum of emerging and developing economies. market share. On the other hand, the Bank handled
Among the possible risks causing substantial import business of Tk. 385,194 million, marking a
uncertainty in global growth, the somewhat growth of 13% over the previous year securing more

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Chairman’s Message Islami Bank Bangladesh Limited
2017 Annual
Report

than 9% market share. The Bank’s foreign remittance Tk. 117,357.28 million of which, Tk. 14,424.46 million
receipt stood Tk. 233,052 million with 20% market was made in 2017.
share. I heartily congratulate the IBBL family for setting
new benchmarks for itself and for the industry. Customer Base: Inclusion Priority
In 2017, the number of deposit accounts rose to 108.4
Building the Nation Together lac with 5.1 per cent growth over 2016 and the
IBBL has been ceaselessly working to strengthen the number of investment accounts rose to 11.80 lac with
economic base of the country since its inception and 9.30 per cent growth over 2016 which is quite an
thereby contributing to country’s GDP. This Bank impressive escalation.With around 2.4 lac of accounts,
prioritizes its investments into sectors of people’s basic IBBL holds the top position in school banking having
needs, people’s welfare and overall socio-economic 17% market share. Keeping this financial inclusion on
development of the country. Islami Bank pursues a the priority agenda, in 2017, Agent Banking of IBBL
coherent strategy of investing into need-based, started its journey. During this opening year, out of
labor-intensive, productive, import-substituting, and permission for 105 agents from the Central Bank, IBBL
export-oriented sectors and all are carried forth with has opened 30 agent banking outlets. As of December
the national priority coherence for equitable and 2017, those agents opened 1,320 accounts having Tk.
sustainable development. More than 5,000 industrial 34.20 million of deposit.
enterprises of the country are now run by IBBL finance.
Country’s 25% spinning mills are run by Islami Bank Alleviating Poverty through Microfinance
finance. Islami Bank’s contribution in Infrastructure IBBL is working for all strata of the people of
Development and Industrialization, transportation, Bangladesh irrespective of caste, creed, religion and
steel, housing sector is adding new pace in country’s gender making us an ever-caring, ever-cooperative and
economic wheel. More than 2.5 million unemployed ever-trusted banking partner beside them. To eradicate
persons have been added to the productive workforce rural poverty, creating employment in the countryside,
of the country through the mills and factories financed developing agriculture and agro-based enterprise, IBBL
by IBBL. introduced RDS (Rural Development Scheme) in 1995.
This unique rural initiative includes, in addition to
Islami Bank Bangladesh Limited has been attaching
generating rural job opportunities, some basic human
key priority to SME sector. An equitable and
development efforts like creating awareness,
sustainable economic development requires key
enhancement of skills and vocational aptitude, training,
socio-economic priorities like creation of employment,
savings, various income generating activities,
entrepreneur development, mitigating regional disparity,
micro-investment and social security awareness etc.
women’s empowerment, especially, ensuring balanced
For the urban poor, IBBL is equally concerned. In
and equitable social development. Islami Bank is the
2012, IBBL introduced ‘Urban Poor Development
country’s highest financer in Small and Medium
Scheme’ (UPDS) for the urban slum-dwellers. the
Enterprise (SME) sector. Through SME investment, 0.9
number of RDS & UPDS members in IBBL has been
million jobs have been created by IBBL. In SMEs, the
growing at a faster rate in recent times. In 2016 the
outstanding investment of IBBL reached to Tk.
total number of members in RDS and UPDS was 9.90
303,430 million with 18 per cent year-on-year growth
lac with 5.5 per cent growth. In 2017, this number rose
in 2017 against Tk. 257,070 million with 21.7 per cent
to 11.09 lac with 11 per cent growth over 2016 which
growth in 2016.
is quite an impressive appreciation.The microfinance
The Bank works to uphold the dignity of the nation by investment of IBBL has also been growing quite
contributing more in the socio-economic and human steadily in recent times. The total amount of
development initiatives of the country. IBBL was outstanding RDS & UPDS investment of IBBL reached
awarded as the highest taxpayer in the banking sector at Tk. 28,433 million in 2017 with 16.2 per cent
in 2016-2017 Fiscal Year by the Large Taxpayer Unit year-on-year growth.
(LTU) of the National Board of Revenue. Since
inception, the collective contribution of IBBL to the
National Exchequer up to 31st December 2017 was

21
Islami Bank Bangladesh Limited
Annual 2017
Chairman’s Message
Report

Corporate Governance and Accountability As a responsible corporate citizen, IBBL continues to


We are committed to observing the highest standards pursue its CSR and sustainability activities with utmost
of integrity and compliance in all aspects of our work. importance. We remained passionate in serving our
The corporate governance system is designed to customers and at the same time worked constantly to
ensure transparency and accountability at all levels of improve our processes and engagements with society
the Bank. We have got a group of professionally we operate in. Carefully planned, zealously executed
experienced and visionary banking leaders in bank’s and sensitively nurtured, our community development
Board of Directors which enhances the horizons and initiatives have holistic approach. We have espoused
potentials of the bank to the expected level. Good and embarked upon diverse supporting activities
governance, risk management practices, compliance particularly education, poverty alleviation, healthcare,
and ethical values have always been among our national and international sports events and ensuring
corporate goals. We are sincerely committed to comply patronizing environment friendly initiatives for the
with the guidelines, instructions and policies of all greater benefit of present and future generations. When
regulatory authorities including Bangladesh Bank, it comes to reaching out to society and touching the
concerned ministries, Bangladesh Securities and lives of people through our activities, we have chosen,
Exchange Commission (BSEC), Dhaka Stock Exchange among others, education as it is a key in social and
(DSE), and Chittagong Stock Exchange (CSE). All economic development. In 2017, IBBL spent Tk.
banking transactions are also well recorded, verified 1,057.77 million for performing its Corporate Social
and audited by internal and Statutory Auditors including Responsibilities adhering to the principle of people,
Bangladesh Bank and Shariah Supervisory Committee. planet and profit. IBBL so far spent Tk. 6,055.65 million
Strict adherence to shariah principles has always been for millions of beneficiaries.
one of the core values of our banking.
Awards that Inspire Us
Shariah Compliance and Risk Awards and accolades that have come our way are an
Management Culture indication of the distinction that we have achieved in
A strengthened Risk Management culture is imperative banking operations and business practices and give
for a stronger future. In a business environment where credibility to the whole-hearted efforts of our
reputational threats lurk around every corner, a strong employees. You will be delighted to know that IBBL
culture of ethics and compliance is the foundation of a won the ‘Islamic Retail Banking Awards (IRBA) 2017’
robust risk management. We believe in a set of clear as the strongest Islamic retail bank in South Asian
values that, among other things, emphasizes the Region conferred by Cambridge IF Analytica, a
organization’s commitment to legal and regulatory UK-based Financial Intelligence House. This globally
compliance, integrity, and business ethics. Executive recognized award testifies our incessant endeavor to
leadership and senior managers across IBBL maximize the value of stakeholders alongside working
encourage employees and business partners to behave for the retail customers.
legally and ethically, and in accordance with
IBBL, as the only Bangladeshi Bank, has been in the
compliance and policy requirements.As a part of our
World’s Top 1,000 Banks since 2012 by the Banker. In
global compliance initiatives, we have undergone a
2017, IBBL ranked 941st making Bangladesh proud of
rigorous AML remediation process through appointing
being one of the prestigious 1000 banks in the world in
Kroll, globally reputed Organization for AML and Risk
terms of strength of Tier 1 Capital. However, in terms of
Management Consultancy. In 2017, IBBL significantly
performance based on Profits on Capital, IBBL ranks
improved in Shariah compliance aspects. The per cent
81st. This admired ranking is a clear testimony to
of Shariah violation came down to 1.26 per cent from
IBBL’s stability and strength and its leadership in
2.66 per cent in 2016 and 2.69 per cent in 2015.
financial sector of Bangladesh.
People, Planet, and Profit IBBL has also won the SAARC Anniversary Award for
The ethos of socio-economic welfare is in-built in Corporate Governance Disclosure 2016 by SAFA.
IBBL’s corporate philosophy and organizational culture. These awards speak highly of the collective efforts and

22
Chairman’s Message Islami Bank Bangladesh Limited
2017 Annual
Report

dedication of our employees and shall definitely serve role to play in keeping the IBBL flag flying high and
as a morale booster and launch pad for many more. steering it ahead.Through a wide range of branch
network and setting up best-in-class digital services,
The Institute of Cost and Management Accountants of IBBL is building capabilities to offer its customers best
Bangladesh awarded IBBL the ‘ICMAB Best Corporate possible banking services across the country. I am
Award-2016’. IBBL is the only Bank which is one of confident that IBBL will continue to stand tall as a
top 20 (twenty) VAT payers in Bangladesh in the year striking symbol of growth and development in the years
2016. Islami Bank Bangladesh Limited has been to come In Sha Allah.
awarded Bangladesh Bank Remittance Award for
collecting highest remittance in the year 2016. We Remain Grateful
In November 2017, IBBL along with IRTI-IDB, and We strongly believe that IBBL is unrivaled gift from the
CZM, organized an international research workshop on Almighty Allah (SWT). I wish to thank my colleagues on
‘Revival of Waqf for Socio-Economic Development’ the Board of Directors and members of the Shariah
(ROWSED) with the participation from around 11 Supervisory Committee, for their judicious guidance
countries. In that workshop, 28 research papers were and support in charting the road map of the Institution
presented, of them 19 papers were from different for continuous growth and development, thereby
countries of the world including USA, UK, New steering it to greater heights. I am also thankful to each
Zealand, KSA, Malaysia. This was the first international and every shareholder of IBBL for reposing their
workshop in Bangladesh in this kind which has confidence and support to the Company’s
significantly contributed on revival of waqf for management. I would like to offer my sincere thanks
socio-economic development of the country. and gratitude to Bangladesh Bank and other regulatory
authorities for their continuous support and invaluable
Looking Forward guidance. I also like to thank our external auditors for
With every passing year, by the grace of Almighty Allah, carrying out the auditing task professionally and
IBBL has been able to meet the increased expectation advising us for compliance as per the guidelines of
from its stakeholder and mass people. We believe that IFRS and BFRS. In the end, I once again express my
it is the dedication, professionalism and desire to sincere thanks to all the members of IBBL family for
achieve an honored position that drives IBBL to their uncompromising loyalty, relentless hard work and
succeed in this challenging environment. IBBL’s dynamic team spirit to take the Bank forward.
visionary leadership and dynamic workforce remain May Allah accept our entire endeavor and give us the
committed to sustain the success story and shall strive best reward both here and hereafter. Ameen.
to scale new heights of excellence. Whatever we have
achieved could not have happened without the
commitment and hard work of each one of you. On
behalf of the Board of Directors and myself, I take the
opportunity to acknowledge the dedication and
sincerity of each one of you who have had a definite (Professor Md. Nazmul Hassan, Ph.D)
Chairman

23
Islami Bank Bangladesh Limited
Annual 2017
Report

24
Managing Director’s Review Islami Bank Bangladesh Limited
2017 Annual
Report

Managing Director’s Review

25
Islami Bank Bangladesh Limited
Annual 2017
Managing Director’s Review
Report

Honorable shareholders, respected members of the Board As per the estimation of Bangladesh Bureau of Statistics
of Directors and my dear team members of Islami Bank (BBS), GDP growth for the Fiscal Year 2016-17 was 7.28
Bangladesh Limited (IBBL). per cent which was higher than the growth of 7.11 per cent
in the preceding fiscal year (FY). Per capita national income
Assalamu Alaikum Warahmatullah. increased by USD 145 than the previous year and reached
It gives me great pleasure to report the performance of the to USD 1,610. Domestic savings reached 25.33 per cent of
year 2017. It was another remarkable year for our dearest GDP, up by 0.35 percentage point from the previous year.
Bank IBBL. During this year, together we have achieved During the same period, national savings as per cent of
several significant milestones. Despite some challenging GDP slightly declined to 29.64 per cent from 30.77 per
environment prevailed in the global and national banking cent mainly due to the downturn of remittances inflow. On
environment, we have been able to overcome those the other hand, investment increased to 30.51 per cent of
challenges successfully and achieved our goals in the field GDP, up by 0.86 percentage point from the preceding fiscal
of financial, social and environmental perspectives. year.

During the last year we were awarded several national and In FY 2016-17 inflation was 5.44 per cent. It was possible
international recognitions which will obviously be marked to maintain the inflation at this level due to satisfactory
and remembered as the period of achievement in the IBBL domestic production, favorable domestic environment, low
history. In achieving our goals and objectives, we have put budget deficit and prudent monetary policy coupled with
our utmost efforts on all our fields and areas of excellences low fuel and commodity prices in the international markets.
and contributed to the national and socio-economic
development of the country. Total export earning was USD 34,847 million which was
1.72 per cent higher than the previous fiscal year. The total
Global Economy: Continues to Firm-up value of import stood at USD 47,005 million and recorded
In 2017, global economy faced some challenges which a growth of 9.00 per cent. Remittances inflow decreased to
were fueled by the changes in US government. The USD 12,770 million from the previous year’s inflow of USD
changes in the US government have made a radical 14,931 million due to the slowdown of the economy of the
change in the global commitments with other associates Middle East countries emanating from low oil prices and
including the Paris Climate Accord, NAFTA, and TPP. geo-political situation and appreciation of USD against
Besides this, the political turmoil in the Middle Eastern British Pound Sterling and Euro.
countries had impact on the remittance flow in the middle
and lower income countries. Despite these changes, global Global Banking:
economic activity continues to firm up. The health of global systemically important banks (GSIBs)
continues to improve. Balance sheets are stronger
Global output is estimated to have grown by 3.7 per cent in because of improved capital and liquidity buffers, amid
2017, which is 0.5 percentage point higher than 2016. tighter regulation and heightened market scrutiny. Banks
Global growth forecasts for 2018 and 2019 have been representing about $17 trillion in assets, or about one-third
revised upward by 0.2 percentage point to 3.9 per cent.
of the GSIB total, may continue to generate unsustainable
The revision reflects increased global growth momentum
returns, even in 2019. As problems in even a single GSIB
and the expected impact of the recently approved U.S. tax
policy changes. could generate systemic stress, supervisory actions should
remain focused on business model risks and sustainable
Global inflation mostly depends on the movement of price profitability. Meanwhile, supervisors need to monitor rising
level of crude oil in international market. Between August exposure to market and credit risks.
2017 and December 2017 oil prices have risen by about 20
per cent. Markets expect prices to gradually decline over Global Islamic Banking: Expanding
the next 4-5 years. The increase in fuel prices raised Customer Base
headline inflation in advance economies. The positive economic growth of the core market, the
continuous demand from an expanding customer base,
BangladeshEconomy: Growing Consistently and a broader consensus around the need to standardize
Bangladesh economy has been performing quite well over legal structures and Shari’ah interpretation, and the
the last couple of years due to stable political environment, industry's potential contribution to the United Nation's
investor friendly policies and dynamic macroeconomic sustainable development financing goals are likely to help
initiatives of the Government. The country has met all the the industry to progress in the coming years. If targets are
preconditions of graduating from least developed achieved, standardization could put the industry back on
countries to developing countries that reflects global track for stronger growth in the coming years. As per
recognition of country’s economic strength.

26
Managing Director’s Review Islami Bank Bangladesh Limited
2017 Annual
Report

Moody’s, Ernst & Young and Malaysia Islamic Financial In 2017, we have achieved the milestone of Tk. 750,000
Centre predict the size of the market will be worth USD3.4 million deposit base. Total deposit stood at Tk. 755,022
trillion by end 2018. million as on December 31, 2017 registering 11% growth
over previous year. Achievement of target was 99% set by
Banking Industry of Bangladesh: Robust the Board of Directors. Cost free deposit reached at Tk.
Credit Growth amidst Challenges 83,323 million registering 19.81% growth over previous
Banking sector has been contributing a significant role for year and the percentage was 11 of total deposit. We have
ensuring sustainable developed economy of our country. In given more importance on the diversification of our
2017, Banking Industry witnessed domestic investment resource mobilization areas including more focus on
growth of 18.10% and deposit growth of about 11% collecting corporate deposit.

Up to September 2017, liquidity condition of the banking Customer Base: Reaching the Unbanked
system remained adequate, accompanied by stable People
Capital to Risk Weighted Asset Ratio (CRAR). The core objective of IBBL is to strengthen financial
Non-performing Loan (NPL) increased slightly. Gross NPL inclusion. We all know that Financial Inclusion is the
ratio for private commercial banks (PCBs) was the lowest process of ensuring access to appropriate financial
among different bank groups (rising modestly from 5.8 per products and services needed by vulnerable groups such
cent to 6.0 per cent). The overall net NPL including SCBs as weaker sections and low income groups at an
went up 11% from 10.34% of the previous year. affordable cost in a fair and transparent manner by main
stream institutional players. IBBL always is in the position
Domestic Islamic Banking: Growing Faster to include these groups of people into the mainstream
than Conventional Banks financial sector to make them self-reliant by way of
There are 8 full-fledged Islamic banks operating with 1,082 socio-economic development. For successful
branches out of total 9,774 branches of the banking implementation of this objective, we have designed our
industry; in addition, 19 Islamic banking branches of 9 deposit products and services by creating farmers’
conventional commercial banks and 25 Islamic banking account, students’ account, Hajj account, Mohr account
windows of 8 conventional commercial banks are also and Waqf account. In 2017, IBBL touched the clientele
providing Islamic financial services in Bangladesh. At the base of 12.50 million which is 12.5 per cent share of the
end of December 2017, the market share of Islamic banks country’s total customers, 40 per cent share of the islamic
in different parameters are- deposits 23.13% , investment banking of Bangladesh. On the other hand, the growth of
24.75%, remittance 25.07% and number of bank customer base is 7 per cent over the previous year.
branches 11.07%.
Investment: Focusing need
base Investment
IBBL in 2017: Outstanding Performance In case of deployment of fund, IBBL has put its utmost
efforts to diversify the investment portfolio by size, sector,
Continues
economic purpose and geographical location. IBBL got
In 2017, we consolidated our position in the banking
diversified exposure from agriculture to industry, retail to
industry in respect of deposit, investment, operating profit,
corporate and microfinance to SME.
trade financing, alternative delivery services, better asset
quality, reducing non-performing investment, more
During the year 2017, we have achieved Tk. 700,000
financial inclusion of the mass people maintaining and
million Landmark of General Investment. The total general
enhancing the brand image of IBBL. Despite many
investment in IBBL reached at Tk. 710,729 million in 2017,
challenges we achieved outstanding performance in all
registering 15.30 per cent growth over 2016. During 2017,
financial indicators as per the target set by the Board of
it was alleged that the banking industry, as a whole, made
Directors.
aggressive investment which was reflected in the private
sector credit growth of 18.10 per cent. On the contrary,
Deposit: Consolidating the Growth IBBL achieved 15.30 per cent growth in 2017, which was
IBBL always encourages people for savings towards even lower than that of the previous year (15.92% in 2016).
individual welfare as well as socio-economic development. IBBL’s lower investment growth compared to industry
For this purpose, it has been continuously working to raise indicates cautious investment of the bank during the year.
awareness among the people to create the savings habit Again, it indicates that IBBL does not deploy their fund
especially in the remote areas and among the less-advantaged aggressively rather than needs of the clients. We see
population of the country. positive shift in our investment portfolio in reducing

27
Islami Bank Bangladesh Limited Managing Director’s Review
Annual 2017
Report

concentration in big clients. IBBL focused on SME and doubtful income in terms of shariah of the Bank came
Microfinance to promote the rural economy due to attain down to 1.26 per cent in 2017 from 2.66 per cent of the
the United Nation’s Sustainable Development Goals. We previous year.
saw the positive shift of our investment portfolio in Agri &
Agro Industry sector from 13.38% in 2016 to 16% in 2017 We have been trying to bring doubtful income in terms of
and Micro finance increased to 4.06% in 2017 from 3.91% shariah at zero level. Shariah Secretariat has been
in the previous year. strengthened with capable manpower and appropriate
logistics have been provided to conduct off-site audit to
International Trade: Leading the Market enable the Muraqibs to check violation and ensure
Despite Challenges transparency in shari’ah compliance. Awareness for total
International trade and remittance business of IBBL has Shari’ah compliance among the entire workforce and
successfully completed another year in spite of some clients was emphasized throughout the year.
challenges. Import rose to Tk. 385,194 million in 2017 with
growth of 13% over Tk. 339,954 million of 2016 and the During the year 2017, the Shari’ah Secretariat studied
market share of import business in the industry is 9.19% . many issues regarding Shari’ah compliance of the Bank
Export business was Tk. 240,026 million with slightly and prepared working papers/concept papers on various
reduced by 1% over the export business of Tk. 243,647 issues referred by the management to the Shari’ah
million in 2016 and the market share of export business is Secretariat/Shari’ah Supervisory Committee for getting
9.27% . The reason for low achievement is due to fall of Shari’ah views/opinion. The update version of the Book
price of exported items in the international market. Likely, ÔkixÕAvn mycvifvBRwi KwgwUi wm×všÍejxÕ with important decisions
remittance stood at Tk. 233,052 million as against Tk. /fatwas given by the Shari’ah Supervisory Committee has
279,980 million in 2016. The market share of remittance been published in 2017 and two leaflets on ÔBmjvgx e¨vs‡Ki
business was about 20%. The reason for the reduced Kvh©µ‡g kixÕAvn cwicvjbÕ and ÔBmjvgx e¨vswKs I cÖPwjZ e¨vswKs Gi g‡a¨
remittance growth is due to reduced earnings or savings cv_©K¨Õ have been prepared. Total 22 Shari’ah awareness
per migrant worker, small size remittance through alleged programs were held for the clients and employees at the
unofficial channel, economic turmoil in Middle East, Zones and Corporate Branches of the Bank.
appreciation of USD against Great Britain Pound (GBP) and
the EURO currency. Agent Banking: Further Step of Financial
Inclusion
Asset Quality: Always keep the health The structure of the banking industry has been changing
in sound rapidly. Agent banking is such a banking service provided
In 2017, NPL in the national sector was Tk 803,000.00 to the underserved population through engaged agents
million and written-off amount was Tk. 450,000.00 million. who conduct banking transactions on behalf of the bank.
Total national NPL was Tk. 1,253,000.00 million where Under the guidelines of Bangladesh Bank some PCBs
IBBL share was only 2.52%. have already adopted ‘Agent Banking’ strategy which has
made a significant contribution to enhance financial
Our classified investment reduced to 3.59% of total general inclusion across the country.
investment as against 3.83% in 2016 whereas the NPL
position of the industry was 11%. So we deployed all out IBBL inaugurated its Agent Banking operation on 15th July
effort to keep the classified investment within the minimum 2017 by opening 1st outlet at Birulia, Savar, Dhaka. Up-to
level. 31st December 2017, IBBL has opened 30 outlets for
agent banking operation under 09 zones covering 19
districts of the country. For smooth functioning of Agent
Shariah Compliance: Strict Adherence to Banking operation, a series of training courses were
Core Values conducted for the agents, employees of the agents and the
Being a Shariah based bank, IBBL’s focus is not only to designated Bank officials. Agent employees are also
comply Shariah in terms of transaction mechanism but also imparted practical training in the respective controlling
to uphold its spirit and objectives. Shari’ah compliance is branches at least for 03 days. Up to December 2017, a
given the highest priority in IBBL and Shari’ah violation is a total of 07 training courses were conducted for Agent
punishable offence in the Bank. The Muraqibs of Shari’ah Banking operation. Total 1,318 clients opened account
Secretariat conducted Shari’ah Inspection/Audit in all the within a short span of time in different outlets and the
branches (318 branches) of the Bank excluding 14 accumulated deposit was Tk. 34.19 million as on 31st
branches opened in 2017 to ensure Shari’ah compliance in December, 2017.
the Bank. As per Shari’ah Inspection Report 2017, the

28
Managing Director’s Review Islami Bank Bangladesh Limited
2017 Annual
Report

Human Capital: Managing Talent and have been executed from IBBL ATM in 2017. So far, nearly
Strong Corporate Culture 0.25 million clients have registered for taking the iBanking
Human resources are considered as the precious capital services. More than 1.75 million transactions amounting
that plays a vital role in accomplishing the objectives of an Tk. 24,500 million are handled by IBBL iBanking system in
organization. Human Resources Policy of the Bank has 2017. Customer service has been made accessible round
been significantly modified in keeping with the industry best the clock and available by call center.
practices. Specifically, the recruitment as well as promotion
policy of the Bank has undergone holistic modification. The IBBL has implemented full scale mobile banking services
changes include amongst others, the classification of (mCash) like cash in/out, fund transfer, mobile airtime
posts where additional 04 posts of executive i.e. Additional recharge, utility bills payment, salary and tuition fee
Managing Director, Senior Executive Vice President, Senior payment etc. to its customers. IBBL mCash system is
Assistant Vice President and First Assistant Vice President integrated with ROBI, Banglalink, Airtel and Grameen
have been introduced. Moreover, for the first time, a Phone mobile network.
separate ‘Cash Cadre’ with specific career has been
introduced fulfilling the long cherished expectations to this Islamic Banking: Achieving Sustainable
effect. Besides, the selection procedures of the entrants Development
have been modified facilitating to make the overall Sustainable development refers to long term inclusive
environment of the Bank more pluralistic. We brought development in socio-economic and environmental
qualitative change in the training programs in 2017 as well. perspective. Sustainable Development Goals (SDGs), the
During the year, a post named as ‘Chief Marketing Officer successor of Millennium Development Goals (MDGs), was
(CMO)’ has been created under Development Wing for adopted in 2015 by the International community. There are
facilitating the marketing and promotional activities of the 17 global goals set aiming to achieving them by the year
products and services of the bank. Moreover three new 2030, so this is also called ‘The 2030 Agenda’. Bank has
wings namely Board & Company Affairs Wing, Human taken some action plans together with a view to achieving
Resources Wing and Financial Affairs Wing have been the target goals i.e. eradicating poverty, hunger, ensuring
created in order to enhance the efficiency level & good health, quality education, gender equality, clean
co-ordination of the activities of the bank. water, affordable energy, decent work, economic growth,
peace, justice and strong institution and protect the planet.
Intensive professional development program, managerial IBBL started its journey with the objective of rendering
training and specialized training both in home and abroad welfare oriented banking services. As IBBL holds a leading
were conducted to bring excellence among human capital. position in the banking industry of the country, it has the
At present IBBL holds the highest number of professionals opportunity to contribute more in achieving sustainable
with international standard professional degrees like CA, development. For this purpose, a sufficient portion of our
ACCA, CMA, CS, CDCS, CAMS, CERM, CISA & Diploma investment fund is deployed in different sectors such as
in Banking. Crop production, Nursery and commercial production of
flowers & fruits, Agriculture Implement, Live stocks, Poultry,
ICT: Adopting State of the Art Technology Fisheries, Rural Transport, Rural Housing, Bio-gas & solar
IBBL has always been in the way forward in innovating and panel and off-firm. Besides as a part CSR activities, we
providing user friendly latest technologies to its valued have some welfare activities which are provided under our
customers. It has taken initiatives to make the Bank totally microfinance program ‘Rural Development Scheme (RDS)’
IT driven and targeted to achieve full automation. The bank & ‘Urban Poor Development Scheme (UPDS)’.
has established online connectivity to its all branches.
IBBL’s data center is the largest in the Banking sector of Green Banking: People, Planet, and Profit
the country. All types of Electronic Fund Transfer (EFT) and In 2017, IBBL undertook numerous green banking
Alternative Payment Systems i.e. ATM, POS, SMS and initiatives demonstrating its commitment to environmental
internet banking, mobile banking, phone banking is already protection, social justice and human welfare. In the last
incorporated. IBBL boasts to be the only Bank in year, IBBL spent a handsome amount in the areas of green
Bangladesh possessing own developed Centralized Core finance, climate risk fund, and marketing, training and
Banking System, eIBS. capacity building related to green financing. IBBL has taken
initiatives to migrate in compliance with full-fledged Green
IBBL now has 562 ATM booths all over the country. More banking operation. To achieve the milestone of green
than 2.7 million of our existing ATM cardholders can use banking, we have started the re-engineering process of our
IBBL’s own ATMs and as well as all NPSB & VISA enabled system and mode of operation.
ATMs all over the world. More than 25.5 million transactions

29
Islami Bank Bangladesh Limited Managing Director’s Review
Annual 2017
Report

Branding Islamic Banking and IBBL the participation from around 11 countries. In that
The success of Islamic Banking mostly depends on the workshop, 28 research papers were presented, of them 19
awareness of the people about the Islamic Banking papers were from different countries of the world including
concept. For doing so, over the years we have been USA, UK, New Zealand, KSA, Malaysia. This is the first
continuously trying to eliminate misconceptions about international workshop in Bangladesh in this kind which
Islamic banking and present its uniqueness compared to has significantly contributed on revival of waqf for
its conventional counterpart. IBBL played the role as a socio-economic development of the country. In that
catalyst in empowering fellow banks towards promoting seminar research department had played important role in
Islami banking. Through different awareness building organizing and also presented a paper entitled “Revival of
programs, we have been able to build a good market Waqf for Socio-Economic Development (ROWSED)” in
image and leadership in banking industry. It is a continuous 2017. Besides, research department had presented
process of keeping and even enhancing that image within another paper titled ‘An Empirical Study to Assess If
the competitive banking industry. Islamic Banks’ Assets Generate Less Revenue than
Conventional Counterparts’ was presented in the Annual
IBBL has been playing key role in all professional bodies Banking Conference-2017organized by Bangladesh
like Bangladesh Association of Banks (BAB), Central Institute of Bank Management (BIBM).
Shariah Board for Islamic Banks of Bangladesh (CSBIB),
Islamic Banks Consultative Forum (IBCF), Association of CSR: Building the Nation Together
Bankers, Bangladesh (ABB), Bangladesh Foreign In order to comply the regulatory guidelines of the Central
Exchange Dealers’ Association (BAFEDA) and International Bank, since its inception IBBL have been doing CSR
Chamber of Commerce (ICC). activities in different priority areas like education, health,
climate risk fund and other areas. Besides, IBBL have the
Training & Research: Building Capacity for responsibilities to the stakeholders as well as to the
Growth communities in which we work and live. The CSR program
Training is an essential requirement to enrich and expand of IBBL aims at the welfare and well-being of the people of
the knowledge base of the employees. Training programs the earth, the planet itself and all its stakeholders. We take
help to increase productivity, organizational stability and several initiatives in individual and organizational level for
adherence to quality standards. With a view to providing development of the community especially the less
quality training to its employees, IBBL established Islami fortunate segments of the community. We provide support
Bank Training and Research Academy (IBTRA) in 1984. in the field of – education, health, humanitarian & disaster
relief, and sports, arts and culture.
IBTRA conducts foundation training courses for the newly
recruited employees; need based advanced training/ In 2017, IBBL spent Tk.1057.77 million for 1.08 million
workshop for mid-level officials, Executive Development beneficiaries with accumulated spending of Tk. 6,055.65
Programs (EDP) and motivational courses round the year million for 16.07 million beneficiaries from 1983-2017. We
for developing their professional and operational provided Tk. 20.00 million for Ramu cantonment English
knowledge and skills. Besides it has a library with a School, Tk. 10.00 million for Anjuman Mufidul Islam and Tk.
collection of around 10,000 national and international 3.50 million for Marketing Department of Chittagong
books on different issues. University. At present IBBL has been providing scholarship
to the very poor 2,300 students (1,500 in HSC and 800 in
Research is an integral part of IBTRA. Research Graduation level) securing GPA 5.00 in SSC & HSC
department has delivered write-ups on the contemporary examinations.
issues such as comparison between Islamic and
Conventional Microfinance, United Nations Development IBBL has taken several initiatives in individual and
Goals and Islamic Finance, Utilizing Demographic Dividend organizational level for developing health sector of
of Bangladesh to reach Middle Income Countries (MIC), Bangladesh. We contributed Tk. 28.97 million for 116
outsourcing of Financial and Accounting Services in Digital beneficiaries of which Tk. 20.00 million was provided to
World. Holy Family Red Crescent Medical College Hospital in
2017. Sports, Arts & cultural programs make a nation
In November 2017, IBBL along with IRTI-IDB, and CZM, physically and mentally sound and healthy. For this
organized an international research workshop on ‘Revival purpose, IBBL contributed Tk. 32.50 million in this year. We
of Waqf for Socio-Economic Development’ (ROWSED) with have contributed Tk. 138.59 million to 3.92 million
beneficiaries for environmental issues since its inception.

30
Managing Director’s Review Islami Bank Bangladesh Limited
2017 Annual
Report

Awards and Accolades: Inspiration to


Building capacity for optimum growth;
Contribute More
In 2017, we have achieved a remarkable number of Promoting self training and motivations for excel
awards and recognitions which signifies the visionary lence in professionalism;
leadership of the bank management and the Diversifying investment portfolio by size, sector,
wholehearted efforts of our employees. IBBL, the only purpose and geographical areas;
Bank form Bangladesh in The Banker’s ‘The Top 1000
Global Banks’. Now its position is 941st in ranking. Ensuring good governance, improved asset quality;
During the year 2017, IBBL’s were awarded for its Providing technology based services to the customers.
contribution by different National and International
Popularizing m-cash
Organizations, which are mentioned below:
Strengthening agent banking to reach unbanked people.
a) SAARC Anniversary Award for Corporate Governance
by SAFA. Our Gratitude
b) ‘ICAB National Corporate Award for Corporate I would like to take the opportunity to extend our thanks
Governance’ by ICAB. to our valued clients, respected shareholders, patrons
and well wishers from home and abroad for reposing
c) ‘Islamic Retail Banking Awards (IRBA) 2017’ as
their complete confidence and trust on us which has
Strongest Islamic Retail Bank in South Asian Region
been a great source of strength at all times. The
conferred by UK-based financial intelligence house
Management is amply thankful to the Members of the
Cambridge IF Analytica.
Board of Directors for their prudent policy guidelines,
d) ‘Arabian Global Banker Award 2017’ awarded by support and inspiration in achieving the Bank’s
Arabian Bankers Council, an organization working cherished goal. We are also expressing our sincere
under the guideline of World Bank, IMF, IDB, ADB gratitude to Bangladesh Bank and Bangladesh
and ECOSOC. Securities and Exchange Commission for providing us
e) ‘The Highest Taxpayer’ in the banking sector for the with valuable guidance and continuous support. Above
year of 2016-2017. all we are highly grateful for the kind support of the
government in our journey for fulfilling country’s vision
f) ‘Bangladesh Bank Remittance Award’ for collecting
towards making a better Bangladesh. Let us pray to
the highest remittance.
Allah to help and give us strength in the coming years so
g) ICMAB Best Corporate Award. that we can work together with the team IBBL towards
achieving our welfare oriented goals with professional
excellence.
Focus for 2018
In view of the economic and banking scenario of the
country and the expectation of our stakeholders, this
year our focus shall be on-
(Md. Mahbub ul Alam)
Ensuring full Shariah compliance;
Managing Director & CEO
Upholding the core value of the Bank;
Serving the client professionally;
Customizing the confidence of the people;
Extending the network both physical and electronic
in order to facilitatate customers for their day to day
banking transactions easily.
Developing professionalism of all the employees;
Widening the horizon of outlook, achieving interna
tional standard of AML & CFT compliance;

31
Islami Bank Bangladesh Limited
Annual 2017
Report

Corporate Milestones

32
Corporate Milestones Islami Bank Bangladesh Limited
2017 Annual
Report

March 13, 1983 January 4, 2011


Incorporation Launching of Offshore Banking Unit

March 27, 1983 January 7, 2011


Certificate of Commencement of Business 100% Online Banking

March 30, 1983 December 16, 2011


Inauguration of 1st Branch Launching of iBanking

August 12, 1983 October 11, 2012


Formal Inauguration Introduction of IDM

May 1, 1983 December 27, 2012


Formation of Shariah Council Inauguration of mCash service

July 4, 1983 December 27, 2012


Formation of Sadakah Tahbil as a CSR Wing Launching of Call Center

July 2, 1985 December 31, 2012


Listing at Dhaka Stock Exchange Limited Entered into the World’s Top 1,000 Banks list since

March 7, 1996 April 14, 2014


Listing at Chittagong Stock Exchange Limited Witnessed Tk. 500,000 Million Deposit base

June 12, 1997 May 27, 2014


Opening of 100th Branch Launching of Shari’ah based Credit Card-Islami Bank
Khidmah Card
December 29, 2004
Joining/Agreement with CDBL June 31, 2014
4000 VISA logo ATMs covering all over the country
April 2, 2005
In-house Core Banking Software October 16, 2014
Launching of IBBL Travel Card
November 25, 2007
Issuance of Mudaraba Perpetual Bond (MPB) March 18, 2015
Launching of Sheba Ghar
December 31, 2007
1st Position of IBBL in Inward Remittance since September 9, 2015
Opening of 300th Branch
January 1, 2008
Commencement of Brokerage House March 30, 2016
Launching ‘IBBL iSmart’ (mobile apps)
June 21, 2009
Opening of 200th Branch October 18, 2016
Formation of Subsidiary Companies Opening of 500th Own ATM Booth

July 13, 2009 July 15, 2017


IBBL Exchange Singapore Pte. Ltd. Launching Agent Banking Services

March 22, 2010 December 31, 2017


Islami Bank Securities Limited (IBSL) Tk. 750,000 Million Deposit base

April 1, 2010
Islami Bank Capital Management Limited (IBCML)

33
Islami Bank Bangladesh Limited
Annual 2017
Report

Sponsors

34
Sponsors Islami Bank Bangladesh Limited
2017 Annual
Report

Sponsors Placement Holders


Mohammad Abdur Razzaque Laskar (Late) Local
Mofizur Rahman (Late) Abul Quasem

Barrister Tamizul Haque (Late) A. K. Fazlul Haque (Late)

Mohammad Younus (Late) Engr. Muhammad Dawood Khan

Mohammad Shafiuddin Dewan (Late) Baitush Sharaf Foundation Ltd.

Mohammad Bashiruddin (Late)


Foreign
Mohammad Hussain (Late) Islamic Development Bank, Jeddah, K.S.A.

Nashiruddin Ahmed (Late) Kuwait Finance House (K.S.C.), Safat, Kuwait

Muhammad Mosharraf Hossain (Late) Jordan Islamic Bank, Amman, Jordan

Mohammad Malek Minar (Late) Islamic Investment & Exchange Corporation, Doha, Qatar

Zakiuddin Ahmed Bahrain Islamic Bank, Manama, Bahrain

M. A. Rashid Chowdhury Islamic Banking System International Holding S.A., Luxembourg

Engr. Mustafa Anwar Al-Rajhi Company for Currency Exchange & Commerce,
Riyadh, K.S.A. (Presently Al-Rajhi Company for Industry & Trade)
Prof. Mohammad Abdullah
Sheikh Ahmed Salah Jamjoom (Late), Jeddah, K.S.A.
Serajuddowla (Late)
Sheikh Fouad Abdul Hameed Al-Khateeb (Late), Jeddah, K.S.A.
Ibn Sina Trust
Dubai Islamic Bank, Deira, Dubai, U.A.E
Bangladesh Islamic Centre
The Public Institution for Social Security, Safat, Kuwait
Islamic Economics Research Bureau
Ministry of Awqaf and Islamic Affairs,
Mohammad Nuruzzaman (Late) (Presently, Kuwait Awqaf Public Foundation uwait)

Ministry of Justice, Department of Minors Affairs,


(Presently, The Public Authority for Minors Affairs Kuwait)

35
Islami Bank Bangladesh Limited
Annual 2017
Report

Corporate Information

36
Corporate Information Islami Bank Bangladesh Limited
2017 Annual
Report

Name of the Company : Islami Bank Bangladesh Limited


Legal Status : Public Limited Company
C-10589
Company Registration No. : 485
Dated March 13, 1983

Bangladesh Bank License No. : BL/DA/4290/83


eTIN : 376764873732
VAT Registration No./BIN No. : 000000124
Line of Business : Banking
Total Branch : 332
SME/Agriculture Branch : 30
Zone : 16
AD Branch : 58
Offshore banking Unit : 03
ATM Booth (own) : 562
ATM Booth (shared) : 9000+
Instant Deposit Machine (IDM) : 126
Sheba Ghar : 52
Agent Banking Outlet : 30
Employees : 13,760
Directors : 20
Sponsors : 19
Placement Holders : 17
Shareholders : 43,414
MPB holders : 17,367
Local Shareholders : 53.85%
Foreign Shareholders : 46.15%
Foreign Correspondents : 611
Chairman : Professor Md. Nazmul Hassan, Ph.D
Vice Chairman : 1. Yousif Abdullah Al-Rajhi
2. Md. Shahabuddin
Managing Director : Md. Mahbub-ul-Alam
Company Secretary : JQM Habibullah, FCS
Head of Internal Control & Compliance : Mohammad Ali
Chief Financial Officer (Acting) : Md. Rafiqul Islam
Credit Rating Agency : Credit Rating Information and Services Ltd.
Subsidiary Companies : 1. Islami Bank Securities Limited
2. Islami Bank Capital Management Limited
3. IBBL Exchange Singapore Pte. Ltd.
Statutory Auditors : 1. M/s. S.F. Ahmed & Co., Chartered Accountants
2. M/s. Khan Wahab Shafique Rahman & Co., Chartered Accountants
Tax Advisor : M/s. K.M. Hasan & Co., Chartered Accountants
Registered Office : Islami Bank Tower 40, Dilkusha C/A, Dhaka-1000, Bangladesh
Phone : PABX (88-02) 9563040, 9567161, 9567162
Mobile : 88-01711435638-9
FAX : 88-029564532, 9568634
SWIFT : IBBLBDDH
E-mail : info@islamibankbd.com
Website : www.islamibankbd.com

37
Islami Bank Bangladesh Limited
Annual 2017
Report

Corporate Organogram

ISLAMI BANK BANGLADESH LIMITED

Shariah Supervisory
Committee
BOARD OF DIRECTORS
Chairman

Islami Bank Securities Ltd. Islami Bank Executive Audit Risk Management
Islami Bank Capital Management Ltd. Foundation Committee Committee Committee

Managing Director &


Chief Executive Officer

Shari’ah Board &


Secretariat Company Affairs Wing

Management Committee (MANCOM) MD’s Secretariat


Asset Liability Committee (ALCO) Money Laundering & Terrorist
Investment Committee Financing Prevention Division

Corporate Retail International Financial Information & Internal Control & Human Risk Management
Development Operations
Investment Investment Banking Affairs Communication Compliance Resources Wing
Wing Wing
Wing Wing Wing Wing Technology Wing Wing Wing

Zones Corporate
Branches

38
Islami Bank Bangladesh Limited
2017 Annual
Report

Board Members

Chairman Director
Professor Md. Nazmul Hassan, Ph.D
Mr. Md. Mosaddake-Ul-Alam
Vice-Chairman Director
Mr. Yousif Abdullah Al-Rajhi, KSA Mr. Musaid Abdullah A. Al-Rajhi
Mr. Md. Shahabuddin Director
Mr. Syed Abu Asad
Director
Director Dr. Tanveer Ahmad
Professor Dr. Md. Salim Uddin, FCA, FCMA Director
Director
Major General (Retd.) Engr. Abdul Matin Independent Director
Director Dr. Md. Zillur Rahman
Dr. Areef Suleman Independent Director
Director Mr. Helal Ahmed Chowdhury
Professor Dr. Md. Sirajul Karim Independent Director
Director Mr. Shamim Mohammed Afzal
Mr. Md. Syful Islam, FCA, FCMA Independent Director
Director Mr. Mohammed Humayun Kabir, FCA
Mr. Md. Joynal Abedin Independent director
Director Professor Md. Kamal Uddin, Ph.D
Mr. Md. Mizanur Rahman Independent Director
Director
Ex-Officio Director
Professor Dr. Qazi Shahidul Alam Md. Mahbub-ul-Alam
Director Managing Director & CEO

39
Islami Bank Bangladesh Limited
Annual 2017
Executive Committee
Report

Executive Committee
Professor Dr. Md. Salim Uddin, FCA, FCMA
Chairman

Member
Professor Md. Nazmul Hassan, Ph.D
Professor Dr. Md. Sirajul Karim
Mr. Md. Syful Islam, FCA, FCMA
Professor Md. Kamal Uddin, Ph.D
Mr. Md. Joynal Abedin
Dr. Tanveer Ahmad

40
Audit Committee Islami Bank Bangladesh Limited
2017 Annual
Report

Audit Committee
Dr. Md. Zillur Rahman
Chairman

Member
Mr. Md. Shahabuddin
Mr. Mohammed Humayun Kabir, FCA
Mr. Md. Mizanur Rahman
Mr. Md. Mosaddake-Ul-Alam

41
Islami Bank Bangladesh Limited Risk Management Committee
Annual 2017
Report

Risk Management Committee

Chairman Members
Major General (Retd.) Engr. Abdul Matin Mr. Helal Ahmed Chowdhury
Dr. Areef Suleman
Prof. Dr. Md. Sirajul Karim
Mr. Syed Abu Asad

42
Islami Bank Bangladesh Limited
2017 Annual
Report

Shari’ah Supervisory Committee

Chairman Member
Sheikh (Moulana) Mohammad Qutubuddin Muhtaram Abdur Raquib
Chairman Ex-Executive President
Baitush Sharaf Anjuman-E-Ittehad Bangladesh Islami Bank Bangladesh Limited

Mufti Shamsuddin (Zia)


Vice Chairman Mufti, Muhaddis & Head of Academic Affairs
Al Jamea Al Islamiah Patiya, Patiya, Chittagong
Mufti Sayed Ahmad
Head Mufti Dr. Hasan Mohammad Moinuddin
Al Jamiatus Siddikiah Darul Ulum, Associate Professor
(Madrasah-e Furfura), Darussalam, Dhaka Department of Islamic Studies
Asian University of Bangladesh, Uttara, Dhaka

Member Secretary Dr. Mohammad Manzur-E-Elahi


Associate Professor, Department of Islamic Studies,
Professor Dr. Mohammad Abdus Samad National University
Religious Teacher, Religious Attache Office, Dhaka.
Ministry of Islamic Affairs, Kingdom of Saudi Arabia Moulana Mohiuddin Rabbani
Muhtamim, Jamia Islamia Markajul Ulum
Savar, Dhaka & Khatib
Railway Jame Masjid, Fullbaria, Dhaka

Dr. Mohammad Gias Uddin Talukdar


Associate Professor, Department of Arabic
University of Chittagong, Chittagong.

Md. Mozahidul Islam Chowdhury


Associate Professor, Department of Islamic Studies,
Chittagong College, Chittagong

Dr. Muhammad Saifullah


Associate Professor, Department of Islamic Studies.
Asian University of Bangladesh.

Moulana Mohammad Muhibbullahil Baqee


Imam, Baitul Mukarram National Mosque, Dhaka.

43
Islami Bank Bangladesh Limited
Annual 2017
Report

Management Committee (MANCOM)

Chairman Members
Md. Mahbub-ul-Alam Mohammed Monirul Moula
Managing Director & CEO Additional Managing Director and Head of CIW & CRO

Member Secretary Mohammad Ali


Deputy Managing Director and Head of ICCW
JQM Habibullah, FCS
Deputy Managing Director & Company Secretary Abu Reza Md. Yeahia
Deputy Managing Director and CAMLCO & Head of DW

Taher Ahmed Chowdhury


Deputy Managing Director and Head of ICTW & CITO

Md. Abdul Jabbar


Senior Executive Vice President and Head of RIW

Taher Ahmed
Senior Executive Vice President and Head of OW (Current Charge)

Md. Mostafizur Rahman Siddiquee


Senior Executive Vice President and Head of HRW & CHRO

Md. Rafiqul Islam


Senior Vice President, FAW & CFO (Acting)

Mahmudur Rahman
Senior Vice President and Head of IBW (Current Charge)

Kazi Shah Omar Faruk, ACA


Vice President and Head of RMW (Current Charge)

44
Islami Bank Bangladesh Limited
2017 Annual
Report

Senior Executives
Managing Director & CEO Md. Nizamul Hoque Mohammad Sirajul Alam
Md. Mahbub-ul-Alam Salim Anwar Md. Maksudur Rahman
Md. Mahboob Alam Md. Shahidul Islam
Additional Managing Director Abul Faiz Muhammad Kamaluddin Muhammad Golam Rabbani
Mohammed Monirul Moula Jamal Uddin
Senior Vice Presidents Md. Ashraf Ali
Deputy Managing Directors Md. Mizanur Rahman
A.S.M. Rezaul Karim
Mohammad Ali Md. Nayer Azam
Bashir Ahamed
Abu Reza Md. Yeahia Rana Mohammad Raihan
Muhammad Qamrul Bari Imami
JQM Habibullah, FCS Md. Moiz Uddin
AK.M. Shafiar Rahman
Taher Ahmed Chowdhury Md. Khalequzzaman
Md. Shafiul Azam
Abu Sayed Md. Idris
Senior Executive Vice Presidents Md. Abu Sufian
A.K.M. Payer Ahmed
Md. Abdul Jabbar Md. Ruhul Amin
Dr. Muhammad Kamaluddin (Jasim)
Md. Shafiqur Rahman Md. Abdus Salam Md. Samsuddoha
Taher Ahmed Mizanur Rahman Dr. Md. Nurul Islam
Md. Obaidul Haque Abu Noman Md. Siddiqur Rahman Khorshed Ahamed
Md.Omar Faruk Khan Md. Habibur Rahman Rafiq-ul-Alam
Md. Mostafizur Rahman Siddiquee G.M. Mohd. Gias Uddin Quader
Md. Abdullah
Md. Saleh Iqbal
Md. Aminur Rahman Muhammad Zillur Rahman Al-Mahmud
Muhammad Qaisar Ali
Mohammad Sayeedullah Muhammad Zakir Hussain
Dr. Muhammad Solaiman Abdul Gafur Md. Quamrul Islam
Executive Vice Presidents
Md. Abdus Sobhan Md. Nazmul Hoda Shiraji
Md. Shamsul Huda
A.K.M. Shahidul Hoque Khandaker Md. Maznuzzaman
Dr. Mahmood Ahmed
Md. Mahbub-a-Alam Mohd. Ashraful Islam
A. A.M. Habibur Rahman
A.K.M. Kawsar Alam
Md. Kawsar-ul-Alam Md. Mizanur Rahman Bhuiyan
Mir Rahmat Ullah
Abu Naser Mohammed Nazmul Bari M. Zubayer Azam Helali
Farid Ahmad
Md. Mosharraf Hossain A.K.M. Mahbub Morshed
Md. Akhtar Hossain
Md. Shahidullah Ahmed Zubayerul Huq
Shahid Uddin Ahmed
Md. Yeanur Rahman Md. Gakir Hossain
Md. Mizanur Rahman Mizi
Mohammod Ullah Md. Zillur Rahman Patwary
Md. Altaf Hossain Sikder Md. Shehabuddin
Md. Shah Jahan
Md. Motiar Rahman Md. Rafiqul Islam
Mahmudur Rahman Md. Raja Miah
Md. Faizul Kabir
A.T.M. Shahidul Haque Mohammed Shabbir
Mohammad Rokan Uddin
A.K.M. Abu Siddiqui Md. Amir Hossain Bhuian
Md. Siddiqur Rahman
K.M. Munirul Alam Al-Mamoon Md. Anisul Haque
Mohammad Jamal Uddin Mazumder Md. Farid Uddin
Md. Shahidur Rahman Muhammad Nurul Hoq

45
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Directors’ Profile

Professor Md. Nazmul Hassan, Ph.D


Chairman

Professor Md. Nazmul Hassan, Ph.D is the Chairman of career of about forty three years. He worked as
Board of Directors of Islami Bank Bangladesh Limited. Consultant at Cornell University, USA Food System
He represents Armada Spinning Mills Limited as Development research project and served on Ph.D
Director of the Bank. Dr. Hassan started his career as a Committees there. He was also a Visiting professor at
Lecturer in Dhaka University back in 1975. Then he the Royal Agricultural University, Denmark and a
completed his MS and Ph.D. with major in Development Consultant at the International Food Policy Research
Economics and Human Nutrition. There after he was Institute and Academy for Educational Development,
appointed as Professor, Institute of Nutrition and Food Washington DC. USA. In addition he collaborated with
Science, University of Dhaka in 1993 and has now been few more Universities in USA on matters of research,
holding dual appointments at Dhaka and Brown and has over one hundred influential publications in peer
University, USA. He held many important research and reviewed outlets to his credit.
teaching position throughout his long professional

46
Directors’ Profile Islami Bank Bangladesh Limited
2017 Annual
Report

Yousif Abdullah Al-Rajhi Mr. Md. Shahabuddin


Vice Chairman Vice Chairman

Mr. Yousif Abdullah Al-Rajhi is a Vice Chairman of the Md. Shahabuddin is a Vice Chairman of the Board of
Board of Directors of the Bank. He completed his Directors of the Bank. He represents JMC Builders Limited
graduation in Business Administration majoring in in the Board of Directors of Islami Bank Bangladesh
Economics & Political Science from King Saud Limited. He completed his M.Sc. Degree from Rajshahi
University, KSA in 1986. Then he obtained MA degree in University in 1974. Then he obtained L.L.B. Degree from
Rajshahi University in 1975. He is a Heroic Freedom Fighter
Development Administration from Western Michigan
and one of the upholders of Liberation Flag at own district
University, USA in 1991. He also completed Internal
Pabna in the glorious Liberation War, 1971.
Auditor Course, Chain Management & Leadership
Course and Speed Reading and Development Round Mr. Shahabuddin started his career in Judicial Service in
Attendance Certificate Course. 1983 and was District Judge till 2006. He also discharged
his duties as Chairman of Labor Court in 2006, Lawyer of
Bangladesh Supreme Court during 2008-2011 and
Mr. Yousif is General Manager-cum CEO of Al-Rajhi
Commissioner of Anti Corruption Commission during
Company for Industry and Trade, KSA with 30 years of March, 2011 to March, 2016. He successfully performed
work exposure including banking career with Al-Rajhi various important assignments during his service period
Banking and Investment Corporation. He visited various including Member of Judicial Inquiry Committee, Chairman
eastern and western countries of the world and of Judicial Inquiry Commission and a lot more.
participated in many international seminars, symposia
Mr. Shahabuddin visited various countries of the world and
and conferences. participated in many local and international seminars,
symposiam, workshops and conferences on Case
Management and Court Management organized by
Judicial Training Academy (Highest number obtainer), Anti
Corruption Protection and Money Laundering,
Representative of Bangladesh at International Seminar in
Beijing, capital of China, organized by Commonwealth on
Prevailing Law in Bangladesh, etc. He also worked as a
Journalist of Daily Banglar Bani during 1980-1982. He is
also engaged in various social, educational and cultural
organizations of the country.

47
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Department of Accounting, University of Chittagong,


Chittagong, Bangladesh.
He was an Independent Director of The Chittagong
Professor Dr. Md. Salim Uddin, FCA, FCMA Stock Exchange-CSE appointed by the Government.
Director & Chairman, Executive Committee He was also an Independent Director of Premier Bank
Ltd and Director of Rupali Investment Ltd. Lastly, he was
Professor Dr. Md. Salim Uddin, FCA, FCMA is the a Director of Rupali Bank Ltd- a nationalized commercial
director of Islami Bank Bangladesh Limited. He is the bank appointed by the Government. At present, he is
Chairman of the Executive Committee. Dr. Md. Salim Chairman of Bangladesh House Building Finance
Uddin is a Fellow Chartered Accountant (FCA), Fellow Corporation-BHBFC.
Cost & Management Accountant (FCMA), and Certified He has been working as Financial Consultant/Adviser in
Public Finance Accountant (CPFA). As Professional the different organisations since 1993 and gathered vast
Accountant, he is fellow member of three professional experiences in the field of designing accounting system,
accounting bodies which are: (i) the Institute of auditing and assurance practices, project management,
Chartered Accountants of Bangladesh-ICAB (ii) the project financing through debt and equity, business
Institute of Cost and Management Accountants of negotiation and regulatory compliance etc,. Mr. Salim
Bangladesh-ICMAB and (iii) The Chartered Institute of has keen interest in theoretical and applied research. His
Public Finance & Accountancy-CIPFA, UK. He obtained main areas of interest are International Accounting,
his Honours in Commerce and Master in Accounting IAS/IFRS, Forensic Accounting, Creative Accounting
from the University of Chittagong. He was all through a and Capital Market. He has more than sixty research
brilliant student and stood First in the First class of publications at home and abroad in various fields of
M.Com Final examination. He joined in the department Accounting and Finance. He also actively participated
of Accounting of the same University in 1994 as a and presented valuable papers in many national and
lecturer and has been promoted to the posts of international seminars, training programs and
Assistant Professor and Associate Professor and workshops. He attended an extensive training program
Professor in 1996, 2002 and 2010 respectively. In 1999 on IFRS and ISA during July-August, 2008 in the UK
he went to Belgium to study MBA at the University of funded by World Bank jointly organized by Ministry of
Brussels and obtained his MBA degree with the grade of Commerce, Bangladesh and ICAEW, UK.
distinction. He did his Ph.D on “Application of
International Financial Reporting Standards-IFRS in He worked and completed a project on E-Brokerage in
Bangladesh”. Belgium and gathered experience in negotiating interna-
tional business and finalising contract. For the above
Before joining the University of Chittagong, he joined the purposes he widely visited USA, UK, Japan, France,
Government College for a very short time after qualifying Germany, Belgium, Netherlands, Luxembourg, Turkey,
Bangladesh Civil Service-BCS Examination in 1993. Saudi Arabia, UAE, Singapore, Hong Kong, China,
Now he is a faculty member, Professor in the Malaysia, Thailand, India, Nepal.

48
Directors’ Profile Islami Bank Bangladesh Limited
2017 Annual
Report

Major General (Rtd.) Engr. Abdul Matin


Director & Chairman, Risk Management Committee

Major General (Rtd.) Engr. Abdul Matin is the Chairman Technical Staff Course beside other mandatory courses
of Risk Management Committee of Islami Bank and Training. He completed Radar specialization course
Bangladesh Limited as the representative of Paradise from China.
International Limited. He was one of the Principal Staff
He obtained Distinguished Student of Merit Certificate
Officer at Army Head Quarters and served Bangladesh
from College of Electrical and Mechanical Engineers for
Army in different capacities. He was the Chairman of the
outstanding result in Young Officer's Course.
Committee for preparation of specifications of National
Smart Identity Card under the Election Commission of
Bangladesh. He played an important role in policy
making of Bangladesh Election Commission,
Bangladesh Road Transport Authority, Bangladesh
Ordnance Factory, Bangladesh Machine Tools Factory
and Bangladesh University of Professionals and different
national and international institutions. He obtained B.Sc.
(Engineering) degree from Bangladesh University of
Engineering and Technology (BUET) and Masters
Degree on War Studies and Masters Degree in Defense
Studies from National University. He is also a graduate of
Chittagong University.

Major General (Rtd.) Engr. Abdul Matin participated in


mine clearance operation in Kuwait after the gulf war
and received honorary certificate from Kuwait Authority
on successful completion of the operation. He visited
many countries related to Government assignments. He
actively participated in modernizing Bangladesh Army.
He is a fellow of Engineering Institute of Bangladesh. He
completed Armed Forces War Course, Staff Course and

49
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Dr. Md. Zillur Rahman Helal Ahmed Chowdhury


Independent Director & Chairman, Audit Committee Independent Director

Dr. Md. Zillur Rahman is the Chairman of Audit Helal Ahmed Chowdhury is an Independent Director of
Committee and an Independent Director of the Bank. He the Bank. Mr. Chowdhury served Pubali Bank Limited
was Managing Director of Bangladesh Development as Managing Director for around nine years during
Bank and served in different capacities of Janata Bank 2006-2014. He joined Pubali Bank in 1977 as class I
Ltd., Rupali Bank Ltd. and Bangladesh Krishi Bank. He officer through Superior Service Examination and was
was Director of Investment Corporation of Bangladesh, promoted in course to the highest post in the same
Director and Chairman of Audit Committee of bank which is a rare event and record. Under his
Bangladesh Commerce Bank Ltd.. His career began dynamic leadership, Pubali Bank got transformed into
with joining Bangladesh Krishi Bank as Planning and an institutional role model of govt. turned private
Research Officer. He served BIBM and IBB as member commercial bank. A career banker for around four
of Executive Committee. He placed the second position decades, Mr. Chowdhury is working as Supernumerary
in SSC in Commerce under Rajshahi Board, sixth Professor of Bangladesh Institute of Bank Management
position in HSC in Commerce under Rajshahi Board and (BIBM). He received foundation training from the then
excellent result in B. Com (Hon’s) & M. Com from Dhaka BCCI and Sonali Bank, London in 1986-87. He is an
University. He obtained Ph.D in Industrial Credit M.A. and a Diplomaed Associate of IBB. Mr.
Management from Rajshahi University and M.Com in Chowdhury, a widely travelled personality, participated
Management from the University of Dhaka. in different training, seminar and short and long courses
at both home and abroad including Oxford and
Cambridge Universities of UK and UC Berkeley and
Columbia University of USA. He participated at different
trade delegations abroad. He was a former board
member and Vice Chairman of Association of Bankers
Bangladesh (ABB). He is a member of ICC Banking
Commission and worked as a resource person in
different training/seminars abroad. He is engaged with a
number of social organizations at different capacities.

50
Directors’ Profile Islami Bank Bangladesh Limited
2017 Annual
Report

Shamim Mohammed Afzal


Independent Director

Shamim Mohammad Afzal is an Independent Director of Among the important books authored by him are:
Islami Bank Bangladesh Limited nominated by the
Government. He is a Grade-1 BCS (Judicial Cadre) 1. Father of the Nation in promoting and propagating Islam.
officer in National Pay scale-2015 and at present 2. A review of the curriculum of Aliya Madrasah.
holding the position of the Director General of Islamic
3. A Concept Paper for research
Foundation Bangladesh. He started his service as
Assistant Judge at Sylhet in the year 1983 and resumed 4. Crisis of the Muslim Ummah: Way Out
his duty at Gopalgonj, Patuakhali in the same post, Law 5. Origin of Terrorism: Deviated Education of
officer at Housing and Settlement, Senior Asstt. Judge Moududism, Politics and Banking Business.
at Lakshmipur, Sub-Judge at Narshingdi, Additional 6. Deeni Dawah and Contemporary Thought.
District and Sessions Judge at Chittagong, Jessore
District and Sessions Judge at Coxbazar, Dinajpur, More than 50 articles written by him on various issues
Dhaka. Earlier, he discharged his duties as a District and have so far been published in different journals. He very
Sessions Judge in Sylhet from January, 2008 to often participates as guest speaker in various talk
shows on different TV channels.
December 2008. He worked as Legal Officer of Special
Tribunal Court and Ministry of Law. He has completed
his post graduation (LLM) from the Department of Law,
University of Dhaka. Mr. Afzal conducted many
International Seminars, Symposia, and Workshops at
home and abroad. He attended interfaith dialogue in
Vatican City, Turkey, Belgium and Germany. He visited
KSA, Iraq, Palestine, Egypt, Jordan, Iran, Pakistan,
India, UAE, UK, Malaysia, Thailand, China and
Singapore. Mr. Afzal is happily married and father of a
daughter and a son who is a student in the faculty of
Law.

51
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Dr. Areef Suleman Professor Dr. Md. Sirajul Karim


Director Director
Dr. Areef Suleman represents Islamic Development Professor Dr. Md. Sirajul Karim is a Director of Islami
Bank (IDB), Jeddah, KSA in the Board of Directors of Bank Bangladesh Limited as representative of Excel
Islami Bank Bangladesh Ltd. He holds Ph.D in Dyeing and Printing Ltd. He started his career as
Economics and Masters in Business Leadership. chemist in Karnaphuli Paper Mills Ltd., Chandraghona
and then joined as Research Chemist in Pakistan
Dr. Suleman has a distinguished career in formulating & Council of Scientific and Industrial Research and then as
leading the implementation of high level strategies, a Lecturer in Bangladesh Agricultural University,
policies and programmes for the firm through to the Mymensingh in 1971. He was promoted to Professor
global level to design miserable results. and was there till 2009. At present he is the Professor of
Primeasia University, Dhaka. He obtained B.Sc. (Hons),
Dr. Suleman’s career began in post apartheid South M.Sc. (Applied Chemistry) and Ph.D. degree from the
Africa where he was instrumental in developing inclusive University of Dhaka. He obtained Post Doctorate Fellow
growth oriented strategies. Prior to joining the IDB, Dr. from the University of Karlstad, Sweden. He was
Suleman functioned as CEO of a Government Fund to engaged as Guest Scientist and Visiting Professor in
foster innovation in South Africa. He was responsible for different universities including University of Darmstadt,
jointly establishing and managing the consulting farm of Germany, University of Karlstad Sweden and Abo
South Africa’s premier development finance institution Akademy University, Finland. He participated in different
wherein he managed their consulting services on the seminars and training programs both at home and
African continent. abroad. Prof. Karim has written many books including
primary, secondary and tertiary levels. He is an author of
Dr. Suleman is also a Director of Islami Bank Securities two books of poems and a book of short stories. Dr.
Limited. Karim has evaluated a few techniques for pulping and
bleaching in the field of paper science and technology.
He has large number of publications in different journals
at home and abroad.

52
Directors’ Profile Islami Bank Bangladesh Limited
2017 Annual
Report

Md. Syful Islam FCA, FCMA Mohammed Humayun Kabir, FCA


Director Independent Director

Md. Syful Islam, FCA, FCMA, FCEA (UK), FLCCIA (UK) Mohammed Humayun Kabir, FCA is an Independent
is a Director of the Bank as a representative of BLU Director of the Bank. Mr. Kabir, a Facilitator of Alternate
International Limited. He is the Managing Partner of Dispute Resolution (ADR) of National Board of Revenue
UHY Syful Shamsul Alam & Co.; Chartered (NBR), is the Chief Executive Officer of Shinepukur
Accountants; a member firm of UHY International (UK) & Ceramics Limited. He is also currently involved with
Institute of Chartered Accountant of Bangladesh (ICAB) as
a leading chartered accountancy firm of the country. He
a council member; Bangladesh Ceramic Manufacturers &
was director of Bangladesh Telecommunications Ltd.
Exporters Association (BCMEA) as an advisor and
for 5 years. He was the past President of Institute of Federation of Bangladesh Chamber of Commerce &
Chartered Accountants of Bangladesh (2012), Director Industry (FBCCI) as a Chairman / Co-Chairman/Member of
of Rupali Bank Limited (2007-2013), Board Director of its different Committees. Earlier, he was a Director of
International Affairs of South Asian Federation of Sadharan Bima Corporation, Bangladesh Telecommunications
Accountants (SAFA) for the period 2013-2015 and Company Limited, Dhaka Stock Exchange Limited and
Director & Chairman of Audit Committee of Dhaka Stock West Zone Power Distribution Company Ltd. He was also
Exchange Limited (2012). He was also an Active Focal President of ICAB and a member of Bangladesh Employers’
Member of Bangladesh Financial Intelligence Unit (BFIU) Federation Management Committee and Vice-Chairman of
of Bangladesh Bank for 3 years. He has worked in policy Bangladesh jute Goods Association. He served professional
making level in a number of national organizations CA Firm, financial institutions and industries in different
capacities for the last 37 years. He became an Associate
including Khulna Wasa, Cable Shilpo Sangstha etc. He
Member of ICAB in 1984 and Fellow in 1989. He was
has completed B.Com (Hon’s) & M.Com degree from
admitted as a member of Institute of Management
University of Dhaka. He is a fellow member of ICAB, Accountants (IMA) & Institute of Internal Auditors (IIA) of
ICMAB, the Cost Executive Accountants (CEA-UK) and USA in 1992. He studied on International Capital Market at
The London Chamber of Commerce and Industries St. Catherine’s College, Oxford, UK. Mr. Kabir obtained
Accountants -LCCIA (UK). He is a member of B.Com (Hon’s), M.Com degree from the University of
Information Systems Audit and Control Association Dhaka. Mr. Kabir has been recognized five times as a CIP
(ASACA). (Export) in 2007, 2011, 2012, 2013 and 2014 and awarded
Jatiyo Paribesh Padak in 2010 by the Government of
Bangladesh for his outstanding contribution in export trade
and safeguarding the environment.

53
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Professor Md. Kamal Uddin, Ph.D Md. Joynal Abedin


Independent Director Director

Professor Md. Kamal Uddin, PhD is an Independent Director Md. Joynal Abedin is a director of the Bank as representative
of the Bank. He has been serving as “Treasurer” of University of ABC Ventures Limited. He started his career at
of Dhaka since June 2012. Professor Kamal started his career
Bangladesh Krishi Bank as a Probationary Officer in
as Lecturer in the Department of Marketing in 1993 in University
of Dhaka. Now he is a Professor of Department of International 1977. He was Deputy Managing Director of Bangladesh
Business of University of Dhaka. He was a student of Dhaka Krishi Bank and Rupali Bank Limited and served Janata
College and obtained B.Com (Hons.) and M. Com from Bank as General Manager. An associate of Institute of
University of Dhaka. He did M.Econ and PhD in Development Bankers Bangladesh, Md. Joynal Abedin participated in
Economics from Osaka University, Japan. He was Postgraduate different seminars in home and abroad including
Researcher in Kyoto University, Post-doctoral researcher in
Cambridge University and University of Nice. His current
International Conference on Investment Project
research interests include Competition of Telecommunications Management in Turkey. He fought in the liberation war in
and International Capital Movements. Many of his research 1971. He is a researcher on Liberation War Affairs in
papers are published in national and international Journals. He Asiatic Society of Bangladesh. He is life-member of
was elected treasurer of DUTA and other important executive Bangla Academy, Bangladesh Arthoniti Samity, Sir J.C.
bodies of University of Dhaka. Prof. Kamal believes innovative
Bose Foundation and member of Officers Club, Dhaka
persons must have 3Cs- Competency, Commitment and
Character. and General Secretary of Bikrampur Foundation. He
graduated from the University of Dhaka. He is the
Prof. Kamal has been serving as an Independent Expert Author of Muktijudder Diary, Muktijuddey Bikrampur,
Member in Minimum Wage Board of Labor and Employment Muktijudder Prottasha & Prapti, Karmojiboner Smriti,
Ministry of Bangladesh since 2010. He also served as Director Kabirer Muktijuddo and Ujaner Jatri. He edited Akattorer
in the Board of Directors of Bangladesh Biman Airlines for
2014 and 2015. Few of his other involvements are Member of
Srinagar, Kingbodanti Purus Abdul Hakim Bikrampuri
Finance Committee of University Grants Commission (UGC), and Chief Editor of Maa (a collection of mother). He
Member of Finance Committee, University of Dhaka and presented 10 articles in the national seminar of
Member, Governing Body, Dhaka School of Bank Management. Bangladesh Economic Association. He is also the
Prof. Kamal has visited many countries, few are like USA, column writer in the Daily Newspaper. He receives 20
China, Japan, UK, France, Italy, Germany, other EU countries,
awards/padak for social work and research on
Thailand, Malaysia, Vietnam, India, Dubai and participated in
many international seminars, symposiums & conferences. He Liberation War Affairs.
is from Brahmanbaria.

54
Directors’ Profile Islami Bank Bangladesh Limited
2017 Annual
Report

Md. Mizanur Rahman Md. Mosaddake-Ul-Alam


Director Director

Md. Mizanur Rahman is a director of the Bank as Mr. Md. Mosaddake-Ul-Alam, is a Director of Islami Bank
representative of Grand Business Limited. He completed Bangladesh Limited. He is Deputy Managing Director of
his LLB (Hon’s) in 1981 and LLM in 1982 from the Investment Corporation of Bangladesh (ICB). He completed
his M. Com. in Accounting from Dhaka University in 1983.
Department of Law, University of Dhaka. He started
career as Munsif (now Assistant Judge) in 1983. He
Mr. Alam started his career as a Senior Officer in Janata
worked as Deputy Solicitor (Writ) from 1998 to 2000 in Bank Limited in 1985. During his long service career, he
the Ministry of Law, Justice and Parliamentary Affairs. served that organization in different capacities at different
He was promoted as District and Sessions Judge in the times. From August 1985 to November 1994, he worked in
year 2000 & was posted as Judicial Member, Taxes Topkhana Road, Captain Bazar Branch and Regional
Appellate Tribunal Chittagong. He was also posted as Office, Zone-A of Janata Bank Limited as Senior Officer.
Inspector General of Registration, Bangladesh in the After that, he was promoted to Principal Officer and served
the Regional Office, Zone-A and Fakirapool Branch as
Ministry of Law, Justice and Parliamentary Affairs and
Branch Manager of Janata Bank Limited. Mr. Alam got
later on Judge Nari-o-Shishu Nirjatan Daman Tribunal promotion as Senior Principal Officer in 1999 and in that
Dhaka. He was posted as District and Sessions Judge rank, he served the Janata Bank Training Institute, Dhaka
at Sherpur, Rangpur, Sylhet and Jessore. Lastly, he was and Bangladesh Institute of Bank Management, Dhaka as
posted as Member, Labor Appellate Tribunal Dhaka. Faculty Member. During the year 2007 to 2010, he worked
Now he is on retirement and enrolled as an advocate, in the Training Institute, Retail Customer Department and
High Court Division of Supreme Court of Bangladesh. Company Affairs Department of Janata Bank Limited in the
capacity of Assistant General Manager. The management
of the Bank promoted him Deputy General Manager (DGM)
in 2010. Mr. Alam acted as Company Secretary, Company
Affairs Department of Janata Bank Limited as DGM. In
2014, he promoted to General Manager and he worked as
Company Secretary, Compay Affairs Division of Janata
Bank Limited. The Government of the Peoples’ Republic of
Bangladesh promoted him as Deputy Managing Director
on 11 July 2017 and posted to Investment Corporation of
Bangladesh (ICB).

55
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Professor Dr. Qazi Shahidul Alam


Director

Professor Qazi Shahidul Alam is a Director of the Bank at BSMMU, Director, Shaheed Suhrawardy Hospital and
representing Platinum Endevours Limited. Currently, he Director, Medical Education, Directorate General of
is Professor of Orthopedic Surgery at Anwar Khan Health Service.
Modern Medical College, Member of the Senate at
Professor Alam holds the distinction of being General
BSMMU (Bangabandhu Sheikh Mujib Medical University),
Secretary, Dhaka Medical College Students Union,
member of the Governing Board at Sirajul Islam Medical
1972 (first election after independence), Convener,
College, member Trustee Board of the BNSB (Bangladesh
Bangladesh Medical Internee Association, 1973, President,
National Society for Blind) Hospital, Khulna and member
Dhaka Medical College Teachers’ Association,
of the Executive Committee of the BMA (Bangladesh
1991-1994 (2 terms), Secretary General, Bangladesh
Medical Association).
Medical Association, 1994-96, President, Bangladesh
Professor Dr. Alam graduated from Dhaka Medical Orthopedic Society, 1997- 2001 (2 terms), Secretary,
College in 1972. In 1980, he obtained D. Orthopedic PROKRICHI (Professional Association of Engineers,
Surgery from the University of Vienna and Master of Doctors and Agriculturists), 1995-97, Founder President,
Surgery on Orthopedic Surgery in 1985 from the University Postgraduate Doctors’ Society of Bangladesh,
of Dhaka. Subsequently he was made a Fellow of the 1998-2001 and is currently President, Bangladesh
International College of Surgeons USA in Patients Welfare Fund.

1987. He has received advanced training in Orthopedic Bangladesh Medical Association (BMA) through Prime
Surgery at The Johns Hopkins Medical Institutions, Minister Sheikh Hasina, awarded a Gold Medal to
USA, Advanced Training in Tissue Culture and Bone Professor Alam in April 2011 for his devotion and
Banking-- Atomic Energy Commission of Tyaian, China dedication to Medical Service.
through the International Atomic Energy Commission,
Professor Alam is a well travelled person, has presented
and has been a WHO Fellow in Indonesia.
innumerable scientific papers and Chaired Scientific
Professor Alam has served the Government of Bangladesh Sessions at National and International Conferences at
in various capacities at Dhaka Medical College and the home and abroad.
National Institute of Trauma and Rehabilitation and was
Founder Chairman and Professor, Orthopedic Surgery

56
Directors’ Profile Islami Bank Bangladesh Limited
2017 Annual
Report

Mr. Musaid Abdullah A Al-Rajhi Mr. Syed Abu Asad


Director Director

Mr. Musaid Abdullah A Al-Rajhi represents Arabsas Mr. Syed Abu Asad represents Excelsior Impex Company
Travel & Tourist Agency, Kingdom of Saudi Arabia Limited in the Board of Directors of Islami Bank Bangladesh
(K.S.A.) in the Board of Directors of Islami Bank Bangladesh Limited. He completed his M. Com. (Finance) Degree
Limited. He is a Business Graduate from Institute of from Dhaka University in 1980. He is also a Diplomaed
Business Administration, Riadh, K.S.A. in the year 1988. Associate of IBB.
He has long 27 years of working experience during
which he served as Branch Manager at Al-Rajhi Bank, Mr. Abu Asad started his career in Banking Service in
General Manager at Al Rajhi Foam & Plastic Factory Ltd. 1983 in Rupali Bank Limited as Senior Officer and
and General Manager at Afnan Water Factory Ltd. A served as Head of the Branch - many branches of local
talented and successful businessman, presently he runs and overseas. He has also served as General Manager
the Abdullah Abdul Aziz Al Rajhi & Sons Real Estate in Khulna Division, Local Office, Dhaka South and Head
Development Co. being its General Manager since Office, Dhaka. He was promoted to the post of Deputy
2007. He visited various countries of the world and Managing Director and posted at Sonali Bank Limited,
participated in many international seminars, symposia Head Office, Dhaka. Lastly, he was promoted to the
and conferences. post of Managing Director and posted at Rajshahi Krishi
Unnayan Bank.

Mr. Abu Asad visited various countries of the world


participated in many seminars, workshops & training
programmes at home and abroad such as Correspondent
Banking in Thailand, Letter of Credit and UCP-500,
E-Banking Workshop Training, Information Technology
in Banking & Islami Banking and Finance in Pakistan.
He is also engaged in various social, educational and
cultural organizations of the country.

57
Islami Bank Bangladesh Limited
Annual 2017
Directors’ Profile
Report

Dr. Tanveer Ahmad


Director

Dr. Tanveer Ahmad is a Director of the Bank representing


Marsa Food & Beverage Limited. He completed his MBBS
Degree from University of Science & Technology, Chittagong in
2009. Then he obtained MD (Doctor of Medicine) in Cardiology
from Bangabandhu Sheikh Mujib Medical University in 2017.
He founded T A Trading in 2003. Then he joined in New Star
Lab & Diagnostic Centre in 2010 as director and Guest Lecturer
of Psychology Department in 2011 and Medicine Department
in 2012 in the University of Science & Technology, Chittagong
before joining Sir Solimullah Medical College & Hospital as a
post Graduate Fellow. At present he has been working in
United Hospital, first as a Fellow Cardiologist in 2017 and later
on in the Department of Cardiology.

Dr. Tanveer is the owner of T A Trading and Managing Director


of Infinia Knit Fabrics Ltd. & Paradise International Ltd. He
manages and supervises the concerned institutions.

Dr. Tanveer visited various countries of the world and participated


in various seminars and workshops conducted at National and
International level by various local organizations including
Bangladesh Society of Cardiology, Transnational (TNCS), BIT
and Multinationals (MNCs), American College of Cardiology
(ACC) workshops. He also volunteered for the free medical
camp and relief work in various rural areas of Bangladesh. He
is a life time member of Bangladesh Cardiac Society and an
associate member of Bangladesh Intervention Cardiac
Society. He is involved in a number of research studies and his
thesis work on young patients with cardiovascular diseases
was published in Bangladesh Heart Journal. He is also
engaged in various social, educational and cultural organizations
of the country.

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Islami Bank Bangladesh Limited
2017 Annual
Report

customers. He also extended inclusive as well as extensive


services and thereby turned the same into the vital
business hub of the bank.
Mr. Alam deserves admiration for his outstanding
contribution in successfully marketing the specialized
banking products throughout the country. As an expert
in banking, he is actively associated as a member with
different professional bodies including Bangladesh
Foreign Exchange Dealers Association’s (BAFEDA),
Executive Committee as well as Arbitration Committee,
ICC Standing Committee for Banking Technique &
Practice. He holds the position of the Chairman of ‘The
Task Committee of Islamic Banks Consultative Forum’
and a member of its Executive Committee.
Md. Mahbub ul Alam As an experienced and scholarly figure of banking
Managing Director & CEO
sector especially in Islamic Banking, Foreign Trade and
Ex-Officio Director
Investment (Credit) Operations, Mr. Alam is a regular
resource person and panel discussant of various
Md. Mahbub ul Alam has been serving as the Managing academic and training institutions including Bangladesh
Director & CEO of Islami Bank Bangladesh Limited since Institute of Bank Management (BIBM), Bangladesh
February 11, 2018. He embraces a long banking career Bank Training Academy (BBTA), Bangladesh Association
with multidimensional capacities since his joining on of Bankers (BAB), Islamic Banks Consultative Forum
February 05, 1984 in this Bank. (IBCF), Islami Bank Training & Research Academy
During this long successful career, he served as Additional (IBTRA) and training institute of some other banks also.
Managing Director of the bank with the responsibility to He was born in 1956 at Comilla district in Bangladesh in
look after the affairs of Corporate Finance, Investment a noble Muslim family. He obtained Bachelor of
Policy, Asset Management and Credit Risk Management Commerce with Honours in 1980 and Masters of
of the Bank. Previously, Mr. Alam, as the Deputy Managing Commerce (Major in Marketing) in 1982 from the University
Director of the bank, deployed his expertise to diversify of Dhaka. He is a FIT (Finance of International Trade)
the investment portfolio towards achieving the Graduate from Business School of Ireland (BSI) &
cherished objectives of the bank. International Chamber of Commerce (ICC), Paris and
He was also the Head of International Banking Wing of also a Diplomaed Associate of the Institute of Bankers,
the bank and contributed a lot for developing Treasury Bangladesh (DAIBB). Mr. Alam is married to Mrs. Zaman
Products, Trade Finance, Trade Processing, Fund Ara Begum, a senior teacher of Viquarun Nissa Noon
Management, and Centralized Remittance Services as School & College, a reputed educational institution of
well as formulated effective Trade Policies of the bank. the country and the couple is blessed with two
daughters and a son.
As the Incumbent of Nawabpur Road Corporate
Branch, Paltan Branch as well as Local Office, the He attended many international conferences, seminars,
largest operational unit of the bank, Mr. Alam specially training & business development programs in different
focused in improving the Shariah based business strategy, countries viz. USA, UK, Italy, Bahrain, Kuwait, Germany,
ensuring robust business performance and transforming France, Belgium, Sweden, Finland, UAE, Oman, KSA,
the branches into the harbor of potential corporate Qatar, Singapore, Malaysia, Hong Kong, India and Nepal.

59
Islami Bank Bangladesh Limited
Annual 2017
Report

Corporate Governance

Corporate Governance structure of IBBL specifies the Guidelines of Banking Regulations and Policy Department
rights and responsibilities among different stakeholders (BRPD) of Bangladesh Bank and Memorandum &
of the Bank through a set of rules, policies and practices Articles of Association of the Bank. Independent Directors
keeping focus on proper delegation, transparency and have been appointed by the Board as per regulatory
accountability in the organization as a whole. The structure requirement. The Board is comprised of experienced
has been developed in line with the accepted Corporate members from diverse professions like businesses,
Governance practices and guidelines of Bangladesh administration, banking & finance, chartered accountancy,
Bank and Bangladesh Securities and Exchange Com- general management, teaching, physicians, Shari’ah
mission’s (BSEC) notifications in this regard. The Bank experts and engineers which make the Board very
has attached utmost importance in setting up a well-de- effective and balanced in deciding and directing various
fined compliance culture throughout the organization. issues of the Bank.

Board of Directors, Chairman and Board Size


the CEO The Board consists of 20 (twenty) non-executive members
including 05 (five) Independent Directors excluding the
Policy on Appointment of Directors ex-officio Managing Director. The number of Board
The members of the Board of Directors of IBBL are members is within the limit set by Bank Company Act
appointed pursuant to the provision of Companies Act 1991 and BSEC notification on Corporate Governance.
1994, Bank Company Act 1991, Bangladesh Securities
and Exchange Commission (BSEC) Notifications, Selection and Appointment of New Directors
The selection and appointment of new directors and the

60
Corporate Governance Islami Bank Bangladesh Limited
2017 Annual
Report

reappointment of existing Directors are being made in the board except those specifically given to the Board
line with the following obligations and duties: by the Bank Company Act, 1991 and other laws and
1. Frequent assessment of the size and structure of the regulations.
Board and the mix of knowledge, skills, experiences
and perceptions that may be necessary to allow the The Audit Committee
Board to perform its functions. The Audit Committee of the Bank, comprising of 05
(five) Members, has been formed in compliance with
2. Recognizing the capabilities and following the
Bangladesh Bank & BSEC guidelines. The Company
approved procedure to ascertain that an applicant
Secretary acts as the Secretary of the Committee.
designated by the shareholders possesses the same.

The directors are selected by the shareholders in the


The Risk Management Committee
In order to formulate and implement appropriate strategies
Annual General Meeting. Casual vacancy, if any, are
for risk assessment, its control and management, a Risk
filled up by the Board in accordance with the conditions
Management Committee, comprised of 05 (five) mem-
mentioned in the Companies Act and Articles of Association
bers, has been formed. The Committee monitors risk
of the Bank.
management policies & methods and reviews the risk
management process to ensure effective prevention
Retirement and Re-election of Directors
and control measures.
As per Companies Act and Articles of Association of the
Bank, each year one-third of the Directors retire from
Roles and responsibilities of the Risk Management
office and being eligible, may offer themselves for
Committee:
re-election by shareholders at the Annual General Meeting.
In line with the requirement of Bank Company Act,1991 Identification and controlling strategies of risks
and Articles of Association of the Bank, one-third Directors Formulation of organization structure
shall retire in the 35th AGM and they are also eligible for Reviewing and resolving risk management policy
re-election. Information/documents preservation and reporting
Follow-up the implementation of risk management
policy as a whole
Directors’ Profile and Their Representation
in the Board of other Companies
Incorporated in the Directors’ profile.
Non-Executive Director
All the members of the Board of Directors, except the
Managing Director, are non-executive directors.
Formation of Board Committees
The Board has 05 (Five) Independent Directors in
The Board formed an Executive Committee, an Audit
conformity with the corporate governance notification
Committee and a Risk Management Committee. There
and guidelines of regulatory authorities. The Independent
is no committee or sub-committee of the Board other
Directors enjoy full independence in discharging their
than the above mentioned Committees. However, it has
responsibilities and they are well conversant in the field
a Shari’ah Supervisory Committee to look after the
of business and professional areas. The independent
Shari’ah matters and gives suggestions to the management
directors have required qualifications and corporate
on Shari’ah issues.
management/ professional experiences as stipulated in
BSEC notification as well as Bangladesh Bank guidelines.
The Executive Committee
The Executive Committee is comprised of 07 (Seven)
members. The Executive Committee is responsible to
Chairman is Independent of Chief
the Board of Directors. The duties of the Executive
Executive Officer (CEO)
The Chairman is Independent of the CEO. The Chairman
Committee are clearly set forth in writing. The Company
of the Bank is elected by the directors of the Bank and
Secretary acts as the Secretary of the Committee.
the CEO is being appointed by the Board of Directors
upon permission from Bangladesh Bank. The Board of
Roles and Responsibilities of the
Directors has clearly defined the roles and responsibilities
Executive Committee
of the Chairman and the CEO.
The Executive Committee exercises all the powers of

61
Islami Bank Bangladesh Limited
Annual 2017
Corporate Governance
Report

IBBL Managing Director receives Islami Banking Award

ask for investigation into any such affairs and submits


Responsibilities of the Chairman such information or investigation report to the meeting
The responsibilities of the Chairman as defined in the of the Board or the Executive Committee. With the
BRPD Circular No.11 dated 27 October, 2013 of approval of the Board, he takes necessary action there
Bangladesh Bank are fully complied with. The Chairman against in accordance with the set rules through the
of the Board of Directors does not personally possess CEO, if deems necessary. The Chairman enjoys some
the jurisdiction to apply policy making or executive specific benefits from the Bank as stipulated in Bangladesh
authority. He does not participate in or interfere into the Bank guidelines.
administrative or operational and routine affairs of the Bank.
The Chairman conducts on-site inspection of any bank Code of Conduct for the Board of Directors
branch or financing activities under the purview of the The Board of Directors follows a code of conduct adopted
oversight responsibilities of the Board. If needed, he to provide guidance to directors to carry out their duties
calls for any information relating to Bank’s operation or in an honest, responsible and business like manner and

62
Corporate Governance Islami Bank Bangladesh Limited
2017 Annual
Report

within the scope of their authority, as set forth in the and placing implementation status of Bangladesh
laws of the country as well as in the Memorandum and Bank’s observations on various issues. Furthermore, the
Articles of Association of the Bank. performance report of the committees framed by the
Every Director assures annually signing a confirmation Board is also placed in the Board through which the
that they have gone through, have complied with and performance of the Board is regularly evaluated.
will continue to comply with the set of codes approved
by the Board of Directors by BSEC, by Laws and by Annual Evaluation of the CEO’s
Bangladesh Bank. Performance by the Board
The Board of IBBL has the policy of annual evaluation of
Directors’ Report to Shareholders its Managing Director and CEO’s performance. Moreover,
The Directors’ Report of the Bank includes all statements the performance of the CEO is evaluated by the Board
regarding section 1.5 of Bangladesh Securities and through various reports like performance report of the
Exchange Commission notification No. SEC/CMRRCD/2006-158/ Bank, taking status of various assignments given by the
134/ Admin/44, dated 07 August 2012 in the directors’ Board to the CEO and the Management, taking
report prepared under section 184 of the Companies implementation status of Budget which includes the Key
Act, 1994 (Act No. XVIII of 1994). Performance Indicators (KPIs) of the Bank etc.

Independence of Non-Executive Directors Responsibilities and Authorities of the


All the members of the Board of Directors, except the CEO & Managing Director
Managing Director, are non-executive directors. They The CEO & Managing Director of the Bank discharges
are independent in expressing their views and opinions. the responsibilities and exercises the authorities as
The directors are also independent from management follows:
and other relationships of the Bank that could materially
(a) The CEO & MD ensures compliance of the Compa
affect the activities of the Bank. They also adhere to the
nies Act & the Bank Company Act and/or other
corporate governance practices and guidelines.
relevant laws and regulations in discharge of routine
functions of the Bank.
Responsibilities of the Board of Directors
(b) He submits information on violation of any law,
The main responsibility of the Board is to ensure good
rules, regulation including the Bank Company Act,
governance in the Bank Management. The Bank Company
while presenting memos before the Board or the
Act, 1991 gives responsibility to the Board of Directors
committee formed by the Board.
for establishing policies for the bank, for risk management,
(c) He provides all information to Bangladesh Bank on
internal controls, internal audit and compliance and for
the violation if any, of the Bank Company Act,
ensuring their implementation. Keeping in view, the
and/or any other laws, rules and regulations.
Board of Directors exercises business judgment in good
(d) The recruitment and promotion of all staffs of the
faith, in a manner that they reasonably believe to be in
Bank except those in the two tiers below him rest
the best interest of the Bank, while complying with the
on the MD & CEO. He acts in such cases in accor
applicable laws and regulations, the Bank’s Articles of
dance with the approved service rules on the basis
Association and resolutions adopted by the shareholders.
of the human resources policy and sanctioned
manpower planning approved by the Board. The
Annual Appraisal of the Board’s Performance
authority relating to transfer and disciplinary mea
In every Board meeting, the attendance of the Directors
sures against the employees, except those at two
is registered and they actively participate in various
tiers below the MD & CEO is delegated to him,
agenda. The performance of the Board is appraised in
which he applies in accordance with the approved
various ways through submission of the performance of
service rules. Besides, under the purview of the
the bank in the Board meeting periodically, preparation
human resources policy as approved by the board,
and monitoring of budget variances, placing the
he nominates officers for training, skill development
implementation status of the Board’s decisions,
Program etc.
transacting business issues which are within its power

63
Islami Bank Bangladesh Limited
Annual 2017
Corporate Governance
Report

Policy on Training of Directors


As per Bangladesh Bank guidelines, the directors shall Appointment of CFO, Head of Internal
make themselves fully aware of the banking laws and Audit and Company Secretary
other related rules and regulations for performing their The Bank appointed a Chief Financial Officer (CFO), a
duties properly. The policy on training of Directors Head of Internal Audit (Internal Control and Compliance)
includes providing training and updated information on and a Company Secretary (CS) as per guidelines of
all the latest policy guidelines, circulars and Acts issued regulatory authorities. The Board of Directors clearly
by the regulatory/legislative authorities. Sometimes defined the roles, responsibilities and duties of the CFO,
special discussion sessions are arranged with the the Head of Internal Audit, and the CS.
experts. They also attend the programs organised by
various professional bodies at home and abroad on Role of the Company Secretary
technical, professional and corporate governance issues. Company Secretary is responsible for advising the
Board on issues relating to corporate compliance with
Directors’ Knowledge and Expertise in the relevant laws, rules, procedures and regulations
Finance and Accounting affecting the Board and the Bank, as well as best practices
Three Directors in the Board of the Bank are professionally of governance. He is also responsible for advising the
qualified Chartered Accountants. They are well conversant Directors regarding their obligations and duties to
in the field of accounting and finance to provide disclose their interest in securities, disclosure of any
guidance in the matters applicable to accounting and conflict of interest in a transaction involving the Bank,
auditing standards to ensure reliable financial reporting. prohibition on dealing in securities and restrictions on
Other Directors are also well conversant in the field of disclosure of price-sensitive information.
business, administration and their respective
professional areas. Attendance of CFO and Company Secretary
The CFO and the Company Secretary of the Bank
Accountability, Audit and Financial Reporting attend meetings of the Board of Directors, excluding
The Board undertakes responsibilities for preparing and those, which involve consideration of an agenda item
presenting a balanced and comprehensive assessment relating to their personal matters.
of the bank’s operations at the end of the each financial
year through annual Financial Statements and Annual Vision, Mission and Strategy
Report and quarterly and half yearly announcement of The Vision and Mission of the Bank are approved by
financial performance of the bank to the Shareholders. the Board of Directors. These are disclosed in the
The Audit Committee of the Board assists in this respect annual report, bank’s website and other publications.
by scrutinizing the information to be disclosed, and to  Business Objectives are focused and the areas of
ensure accuracy, adequacy, transparency and business are set out to attain vision, mission and
completeness of the disclosed information. strategic objectives.
The Strategies to achieve the Business Objectives
Number of Board Meetings are clearly set out and disclosed in the previous
In 2017, 16 (sixteen) Board meetings were held. A section of this annual report.
detailed disclosure showing number of Board Meetings
held and status of participation of the Directors is given Audit Committee
in the later part of the report. The Board approves the objectives, strategies and overall
business plan of the Bank while the Audit Committee
Directors’ Report on Compliance with Best assists the Board in fulfilling oversight responsibilities.
Practice on Corporate Governance The Audit Committee also assists the Board in ensuring
Status of compliance of corporate governance checklist the financial statements reflect true affairs and ensures a
is included in the Directors’ Report, which is dully good oversight of internal control practices within the
certified by an External Audit firm other than Bank’s bank. The Audit Committee is responsible to the Board
Statutory Auditors. of Directors. The roles of the Audit Committee are clearly

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Corporate Governance Islami Bank Bangladesh Limited
2017 Annual
Report

IBBL Achived Islamic Retail Banking Award 2017

set forth in writing. The Company Secretary acts as the terms of the said Circulars, the Audit Committee plays a
Secretary of the Committee. key role in finalization of the Financial Statements of the
Bank. It also reviews the Internal Control System of the
Appointment and Composition Bank, Internal Audit Reports, External Audit Reports,
Audit Committee of the Bank, comprising of 5 (five) Bangladesh Bank Inspection Reports, Shari’ah Inspection
Members, has been formed in compliance with Bangladesh Reports and provides necessary policy guidelines as
Bank & the Bangladesh Securities & Exchange required. The Committee is empowered to investigate/
Commission (BSEC) guidelines among which 03 (three) question any employee of the Bank. It can also take
are Independent Directors. Other than Company Secretary, External Expert Counsel, if it deems necessary.
members of the Management attend the Committee
Meeting as & when required and on invitation only. Audit Committee Comprises of
Non-Executive Director
Chairman of the Audit Committee All the Members of the Audit Committee are Non-Executive
The Chairman of the Audit Committee is an Independent Directors. No executive of IBBL is eligible to become a
Non-Executive Director and he performs his duties member of the Audit Committee.
independently.

Terms of Reference of Audit Committee


The Audit Committee of IBBL strictly observes the
Terms of Reference of the Committee issued by the
Bangladesh Bank through Guidelines on Internal
Control & Compliance in Banks (2016), BRPD Circular
no. 11 dated 27 October 2013 and BSEC. As per the

65
Islami Bank Bangladesh Limited
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Expertise in Finance, Accounting and Banking judiciary specialized in business, banking and fiscal
Of the members of the Audit Committee, two have laws. Name, qualification & experience of the Members
expertise in Finance & Accounting, other three are from are stated below:

Sl. No. Name Role Qualification/ Experience


1 Dr. Md. Zillur Rahman Chairman Ph.D (Rajshahi University), B. Com (Hons.), M. Com in
Management (University of Dhaka); Ex. Director of Investment
Corporation of Bangladesh, Director and Chairman of
Audit Committee of Bangladesh Commerce Bank; Acted
as Managing Director of Bangladesh Development Bank
Limited and Deputy Managing Director of Janata Bank
Limited & Rupali Bank Limited; Performed as Member of
the Governing Body & Executive Committee of Bangladesh
Institute of Bank Management (BIBM) as well as Member
of the Executive Committee of the Institute of Bankers’
Bangladesh (IBB).
M.Sc., LLB (Rajshahi University); Acted as Commissioner
2 Mr. Md. Shahabuddin Member
of Anti Corruption Commission, Chairman of Labor Court
& District Judge, Member of Judicial Inquiry Committee,
Chairman of Judicial Inquiry Commission etc.

Graduate (LLB), Post Graduate (LLM) (University of


3 Mr. Shamim Mohammed Afzal Member
Dhaka); Director General of Islamic Foundation Bangladesh,
Acted as District & Sessions Judge.

B.Com (Hons), M.Com (University of Dhaka); Senior


4 Mr. Mohammed Humayun Member
Fellow Member of Institute of Chartered Accountants of
Kabir, FCA
Bangladesh (ICAB), Facilitator of Alternate Dispute Resolution
(ADR) of National Board of Revenue (NBR), Chief Executive
Officer of Shinepukur Ceramics Limited; Ex. Director of
Sadharan Bima Corporation, Bangladesh Telecommunications
Company Limited, Dhaka Stock Exchange Limited and
West Zone Power Distribution Company Ltd.; Acted as
President of the ICAB.
Post Graduate (LLM) (University of Dhaka); Acted as
5 Mr. Md. Mizanur Rahman Member
District and Sessions Judge, Deputy Solicitor (Writ) &
Inspector General of Registration, Ministry of Law and
also acted as Judicial Member, Taxes Appellate Tribunal
Chittagong.

*Audit Committee of the Board was reconstituted by the Board of Directors in its 261st meeting held on 17.04.2018 wherein
Mr. Md. Mosaddake-Ul-Alam was included as Member in place of Mr. Shamim Mohammed Afzal.

Access of Head of Audit to the Audit Review and Evaluation of Quarterly


Committee Performance Report
The Head of Audit has the direct access to the Audit The Audit Committee reviews and evaluates the quarterly
Committee. Head of other unit or any other Officer performance including the financial reports and refers
attends the meeting of the Audit Committee, if deems necessary. the same to the Board.

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Meeting of Audit Committee Ensure Independence of External Auditors: The


The Audit Committee conducted 12 (twelve) meetings Committee ensures that the External Auditors
during the year 2017. The attendance status of the perform the Audit with due independence.
meeting is given at the end of this Report. Review of External Auditors’ Findings: The Com
mittee reviews findings of External Auditors,
suggests to take action on each items and neces
Objectives & Activities of the
sary instructions are given to the Management on
Audit Committee the findings of the Auditors.
External Auditors’ Appointment and Reappoint
Review of Internal Control ment: Every year the Audit Committee recommends
The Audit Committee regularly reviews the Internal Appointment/Re-appointment of External Auditors.
Control System of the Bank.
Non-Audit Work: External Auditors are not assigned
It ensures that the Internal Control Systems are well with any non-audit work thus does not arise any
conceived by all concerned and properly adminis room to compromise with their independence.
tered at all levels to the extent that management
implements/carries out its instruction/advice. Selection of Appropriate Accounting Policies
The Committee monitors observance of Internal The issues related to selection of appropriate Accounting
Control Practices at a regular interval. Policies in line with International Accounting Standards
 The Committee also tries to evaluate whether the (IAS) and International Financial Reporting Standards
internal audit functions have been conducted (IFRS) adopted as Bangladesh Accounting Standards
independently from the management. (BAS) and Bangladesh Financial Reporting Standards
(BFRS) respectively by the Institute of Chartered
Role of Audit Committee in Ensuring Accountants of Bangladesh and other Regulatory
Regulatory Compliance Guidelines were discussed in the meeting of Audit
The Audit Committee reviews and examines the financial Committee. The Accounting Policies are annually
statements of the Bank every year to see whether all the reviewed at the time of finalization of Financial Statements.
disclosures & information have been incorporated in the
Financial Statements properly whether the Bank Annual and Interim Financial
followed International Accounting Standards (IAS) and Statements Releases
International Financial Reporting Standards (IFRS) Audit Committee reviews the Annual and Interim Financial
adopted as Bangladesh Accounting Standards (BAS), Statements and recommends the same to the Board for approval.
Bangladesh Financial Reporting Standards (BFRS) by
the Institute of Chartered Accountants of Bangladesh. Reliability on the Management Information
The Committee also examined whether requirements of The Audit Committee ensures that all the information
the Bank Companies Act, the Companies Act, the used for computation of financial disclosures are reliable
Bangladesh Securities and Exchange Commission to the extent that Management submits reliable data.
Rules, the Dhaka and Chittagong Stock Exchange
Rules, Listing Regulations and other Laws and Rules Review Statement of Significant Related
applicable in Bangladesh and Standards issued by the Party Transactions
Accounting and Auditing Organization for Islamic Financial The Audit Committee regularly reviews the statement of
Institutions (AAOIFI), Manama, Bahrain, etc have been significant related party transactions, if any, and reports
followed meticulously in formulation of financial statements to the Board, as appropriate.
of the Bank.
Attendance of the Chairman as well as the
Review of External Audit Functions Members of the Audit Committee in AGM
Effective Coordination of External Audit Functions: The Chairman as well as all the Members of the Audit
Before finalization of the Financial Statements, the Committee attends at the Annual General Meeting of
Committee met with the External Auditors and the Bank.
discussed various issues relating to Financial
Statements.

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Corporate Governance
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Internal Control
The Compliance Division ensures that Bank complies
Directors’ Responsibility to Establish and with all Regulatory requirements while conducting its
Maintain Internal Control day-to-day businesses. They maintain liaison with the
The Board of Directors of IBBL is responsible to establish Regulatory Bodies for any Regulatory changes and
and maintain appropriate system of Internal Control. To notify the same to all concerned. The Division works for
ensure appropriate level of Internal Control System, a ensuring compliance culture in the Bank.
good number of Standard Operating Manuals and
Policy Guidelines have been introduced in line with iii. Monitoring Division: Monitoring Division evaluates/
global best practices and Regulatory Guidelines. Delegation assesses/monitors the operational performance of the
of powers in various businesses, administrative and branches based on the relevant Data/Audit Reports and
financial areas has also been approved by the Board. analyzes those to assess the risk of branches and
submits report to the Management. They help the Audit
Features of Internal Control, Compliance and Inspection Division to formulate Risk Based Audit
and Monitoring System and Inspection Program for the branches.
Internal Control and Compliance Wing (ICCW) of IBBL is
responsible for checking compliance of Internal Control The Monitoring Division also ensures internal check at
System. Any deviation is reported to the top Management, the time of performing different functional areas through
Audit Committee and to the Board and necessary steps different tools like: DCFCL (Departmental Control Functions
are taken to rectify the same. Checklist), QOR (Quarterly Operation Report) and IDCL
(Investment Documentation Checklist) following Bangladesh
As per Bangladesh Bank Guidelines and to strengthen Bank Guidelines. The Audit Committee periodically
the Control and Compliance Mechanism, the Bank has reviews all the issues.
formed Internal Control and Compliance Wing consisting
of three separate Divisions: Review of Adequacy of Internal Control
System
i. Audit & Inspection Division: This Division undertakes The Board of Directors time to time reviews the Internal
the audit and inspection of all operating units like Control System of the Bank and necessary guidances
Divisions/ Departments of Head Office and Branches are provided to improve the system.
including Subsidiaries/ Foundation, based on an Audit
Plan, duly approved by the Audit Committee of the Bank. Control activities and segregation of duties
Control mechanism is an integral part of the daily activities
As per guidelines of Bangladesh Bank, Internal Control of the Bank. An effective internal control system requires
& Compliance Wing of IBBL prepares the quarterly that an appropriate control structure be set up, with
reports on the Audit findings and places the same to the control activities defined at every business level which is
Audit Committee and to the Board for their perusal and ensured in the Bank. The control mechanism include
guidance. top-level reviews, appropriate activity controls for different
departments or divisions, physical controls, checking for
Bank’s Audit Teams conduct Audit & Inspection of all compliance with exposure limits and follow-up on
Branches/SME Branches/Zonal Offices, Wings/ non-compliance, etc.
Divisions/ Departments of Head Office. Heads of 16
Zonal Offices also inspect the branches on quarterly Inspection by Bangladesh Bank
basis. Incumbent/In-charges of branches also conduct Bangladesh Bank conducted the 26th Comprehensive
their Self-Audit during the period on half yearly basis. Inspection of IBBL, Head Office and 42 Branches in
2017. Moreover, Bangladesh Bank Inspection Team
ii. Compliance Division: The Compliance Division conducted inspection on our Head Office & 77 Branches
handles the Regulatory issues of Bangladesh Bank and during the year 2017. Core Risk areas including others
other Regulatory Bodies and submits status of Regulatory i.e. Asset Liability, Investment, Information & Communication
issues on quarterly basis to the Audit Committee.

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Technology and Internal Control & Compliance were Ethics and Compliance
also inspected by the Bangladesh Bank's Inspection IBBL gives due importance to the moral concerns in
Team. order to make the right ethical decisions in every aspect
of operations. IBBL believes that upholding the interest
Internal audit of the customers, employees and regulators is very
1. Audit Committee evaluates the independence status crucial for sustainable growth and development of the
of internal audit from management; country.
2. It reviews the internal audit activities and organiza
tional structure to confirm removal of all hindrances/ Enforcement of corporate code of ethics requires clear
limitations/deficiencies; understanding of the same and active observance by
3. The Committee assesses the efficiency and effec everyone in the bank since the code spells out the
tiveness of the internal audit and expected standards of behaviour and sets the ideal
4. It also assess the consideration of management on operating principles to be followed. Every official is
observations/recommendations given by the internal encouraged at all times to maintain high ethical
auditors after any irregularities detected by them. standards and adequate internal control measures to
guard against the occurrence of any unethical practices
External Audit and irregularities.
In the 34th Annual General Meeting held on 23 May
2017, the Shareholders appointed S. F. Ahmed & Co., Statement of Ethics and Values
Chartered Accountants and Khan Wahab Shafique IBBL has adopted the Core Values, Commitments and
Rahman & Co., Chartered Accountants to audit the Code of Conduct, Ethical Principles and the like which
Financial Statements and Nostro Accounts of the Bank have been clearly spelled out in the earlier section of the
for the year 2017. report.

Statutory Auditors audited 88 Branches and Head Communication of Statement of Ethics


Office as part of the Annual Audit Program, which and Business Practices
covered 80% of the Risk-Weighted Assets of the Bank. The Code of Conduct/Ethics and Business Practices
are approved by the Board of Directors and is circulated
Statutory Auditors also submitted a Management for acknowledgement and meticulous compliance of all
Report. This Report was discussed in the Meeting of employees.
Audit Committee and sent to Bangladesh Bank as per
requirement. The Audit Committee also monitored its Board’s Statement on Ethics and
compliance. Compliance
The Board of Directors of IBBL is committed to ensure
Risk Management the observance of code of conduct as well as ethical
Identification of the Risks standards. It also monitors strict compliance of the same.
Risk Management Wing (RMW) has been set up as per
the guidelines of Bangladesh Bank. The Wing is responsible Effective Anti Corruption and Anti-Fraud
for identification and management of risks faced by the Program
Bank. The details of internal and external risk management IBBL arranges anti-fraud and anti-corruption program
mechanism are included in Risk Management disclosures. as per the guidelines of regulatory authorities to prevent
from occuring any fraud & corruption and all tiers of the
Strategies Adopted to Manage and employees are being constantly trained on these issues.
Mitigate Risk
Number of steps have been taken to manage and Integrity
mitigate risks of the Bank. A detail of the same is includ- The Directors along with the employees of the Bank
ed in Risk Management disclosures. always:

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Islami Bank Bangladesh Limited
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Discharge their duties in keeping with the regulatory Whistle Blowing Policy
requirements and try their level best to win the trust Some organic structures have been evolved to fulfil the
and confidence of the customers through ensuring purpose of the whistle blowing policy of IBBL aiming to
efficient, effective and cordial services. promote the transparency as well as to serve as a channel
Value the sustainability of long-term friendly relation of corporate fraud risk management. The system
ships with the customers, local communities and enables an employee, who has a legitimate concern on
shareholders. an existing or potential wrong-doing, to raise the issues
and bring the same to the notice of competent authority.
National Integrity Strategy Central Complaint Cell has been established and a
The government has formulated ‘National Integrity vigilance team has also been formed to protect the fraud
Strategy’ to bring about good-governance in the state, and error. Risk Management Wing (RMW) also acts as
its institutions as well as in every walks of the society the whistleblower at IBBL.
with a view to establishing a happy, prosperous and
corruption free country. In line with the government’s Remuneration Committee
decision & guidelines of Bangladesh Bank regarding the
matter, the management of IBBL has formed an ‘Ethical Committee Charter
Committee’, fixed ‘focal point’ and drawn an exhaustive Bangladesh Bank guidelines do not permit to form a
action plan to- separate committee of Board on remuneration. As such,
IBBL does not have such type of committee. However,
Develop the efficiency & ethical standard of manpower; the Board of Directors time to time review and evaluate
Ensure effective compliance of existing rules and regulations; the remuneration paid to all level of employees of the
Strengthen e-governance; Bank.
Review the reward & recognition policy for good performers;
Launch awareness program among the stakeholders etc. Compensation
The remuneration is decided by the Board of Directors
Conflict of Interest where all the members are non-executive directors. The
The Bank does not condone any form of conflict of Managing Director, Additional Managing Directors,
interest be it personal, financial or familial interest that Deputy Managing Directors, Head of Human Resources,
can in any way keep the individual refrain from acting in CFO and other related officials work on the issue as per
the best interests of the company or may compromise guidance of the Board.
the interest of the same, its shareholders as well as the
clients. All the employees are required to refrain from Policies on Remuneration
doing any activity, which may result in any conflict or Key policies to decide the remuneration include market
potential conflict of interest. Any actual or potential trend, inflation, job requirement, position in other banks
conflict of interest is reported to the Management as in the same area etc. The detailed remuneration policy
soon as it is recognized for immediate solution of the of the Bank is also described in ‘Market Disclosure of
same. The Company has distinctive procedures to Basel-III.
know the information as to whether a Director has an
actual or potential conflict of interest. Under these Meetings on Remuneration Issues
procedures, members of the Board are required: Several meetings of the executives and related Board
meetings were held to finalize some benefits paid to the
To act in good faith and not to act contrary to the employees during the year 2017.
interest of the company;
 Not to use power for any improper purpose; Remuneration of Directors, Chairman,
To avoid conflicts of interest; Managing Director and Senior Executives
To retain discretion. Honorarium paid to the Chairman and Directors and
others for attending meetings are as follows:

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Internship program for students of different Universites

Board Meeting / Shari’ah Supervisory Committee Human Resources Development


Meeting Tk.8,000.00 Development and management of human resources is
very much vital to ensure sustainable growth and
Executive Committee /Audit Committee/Risk development of an organization. This approach is a
Management Meeting Tk.8,000.00 framework for helping the employees to develop their
personal as well as organizational knowledge, skills and
Managing Director is paid salaries and allowances as abilities by means of extensive improvement process
per approval of the Board and Bangladesh Bank covering systematic training, motivation, coaching,
which is separately disclosed in the Financial counseling, mentoring and the like.
Statements.
 The senior management is remunerated as per Succession Planning
standard pay structure of the bank being approved Efficient succession planning is an integral part for
by the Board of Directors. effective employee management and IBBL possesses a
sound succession plan to carefully avoid the problems
The bank has fully complied with Bangladesh Bank of instant vacuum of the senior/key executives that may
circular and instruction regarding this. take place due to retirement & resignation.
Merit Based Hiring
Human Capital Hiring of committed, dedicated and meritorious human
Human Capital is the set of skills which an employee resources is an integral part to run the organization
acquires on the job through training and experience, and smoothly and efficiently. IBBL generally recruits
which increase the employee's value in the marketplace. heterogeneous workforces having diversified academic
Being a value driven organization, IBBL considers its background and transform them into a homogeneous
employees as the most precious capital that play the one through extensive development process. IBBL is
vital role in materializing the mission, vision, goals and following the Board-approved recruitment policy to
objectives of the bank. ensure hiring of the right person for right position.

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Performance Appraisal System Grievance Management and Counseling


IBBL follows a well-structured performance appraisal All the employees reserve the right to lodge any complaint
system (commonly known as ACR) for evaluating the both internally and externally and the Human Resources
performance of the employees. Effort is going on to Wing ensures full confidentiality of the same. The
introduce a job-based ‘Automated Performance complaints so lodged are handled by the Vigilance
Evaluation (APE)’ process. Squad of the Bank with professional approach. In
addition, a 24-hour hotline number is available to lodge
Promotion, Reward & Motivation any complaint with regard to any type of irregularities at
IBBL follows structured human resources policy in any time, which are accordingly redirected to the
awarding promotion, reward and recognition to its respective department for necessary action.
employees. Every year IBBL awards promotion to the
eligible employees keeping in view the quality of their Bank’s contribution towards the staff
respective job delivery and performance. IBBL is pledge bound to treat all the employees with
dignity and respect. It strives to maintain a comfortable
Training and Development working environment, irrespective of individual rank and
Training is imparted with the objective to ensure status. Competent human resource is essential to
balanced improvement of the employees’ professional ensure sustainable growth and development of any
knowledge & skill, tempered by the spirit of motivation business entity, which can only be achieved by means of
and ethical upbringing. IBBL always strives for improving the skill, efficiency and productivity of the
excellence in improving the moral and professional employees. The bank leaves no stone unturned in
standard of its employees. IBBL provides training to its developing its human resources in all respects to
employees throughout the year in its own training materialize the cherished goals & objectives.
institute as well as in various institutes at home and abroad.
Healthcare, Safety standards and Modern
Career and Developments Working Environment
IBBL has a well-structured career path that plays an IBBL is the pioneer of welfare banking in the country
important role in getting the capacity as well as leadership which constantly endeavors to do something for the
quality of the employees developed in a systematic prosperity and well-being of the citizens as well as of its
process. Leadership is certainly among the strongest employees. A good number of welfare programs aiming
elements fostered by IBBL seeking to demonstrate to employee-welfare, healthcare, safety standards &
leadership both in the industry as well as in the society working environment covering the followings are there in
where it operates. In order to sustain this element of IBBL:
leadership, strong emphasis is placed in developing the
employees through in-house training programmes as Fringe benefit schemes
well as by supporting educational opportunities outside IBBL. Non-refundable financial assistance from Employees’
Benevolent Fund
As a forward-looking organization, IBBL strives to  Non-refundable financial grant from bank’s fund
continuously stimulate its employees to be well  Staff House Building Investment Scheme
acquainted with the state of the art technology in the Staff Household Durables Scheme
relevant fields. In order to create added customer value, Quard against Provident Fund
great emphasis is also placed on improving the employees’ Quard against Benevolent Fund
knowledge and skills through training, development and Leave encashment
informative feedback. IBBL placed due importance on Burial expenses
the training of its managers for development of their Recreation program
leadership qualities. Moreover, the annual meeting with Honorarium for passing Banking Diploma examination
the managers plays a vital role in making sure that the Awarding of scholarships to help educate the
strategy and objectives for each year are clearly meritorious wards of the employees
communicated. Awarding of cash prize and certificate of merit to the

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Corporate Governance Islami Bank Bangladesh Limited
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meritorious wards of bank employees and circulates it to all employees for acknowledgement
Awarding of prize against essay competition and meticulous compliance. All employees are expected
House rent allowance at all times to maintain high ethical standards and
Conveyance allowance adequate internal control measures to guard against the
Medical allowance occurrence of unethical practices and irregularities.
Travelling allowance
Entertainment & Lunch allowance Human Resources Accounting
Doctor’s service for the employees The Bank implements a human resources accounting
Car Investment Scheme system, which helps identify and measure the data
Car maintenance allowance about its human resources. It compiles various types of
House maintenance allowance data about its human resources, namely its human
Mobile phone allowance resource strength (for e.g., the number of employees in
Utilities allowances different positions - executive, officer, sub-staff), total
In order to provide highly sophisticated and encour workforce by age and gender, employee productivity as
aging working environment, all the IBBL offices well as number of employees who received training
including Head Office and Branches are equipped programs. It facilitates in measuring the profitability and
with modern facilities with air conditioning and productivity of Human Resources through evaluating the
generator for power back up. effectiveness of training, placement, welfare and
All of the IBBL offices and Branches are equipped professional development activities.
with fire fighting materials and have multiple exit
points for emergency exit. IBBL- One Family
The Bank developed ‘A-Bank A-Family’ concept since
Corporate Governance, Transparency and its inception and sought to create a work culture that
Ethics sufficiently motivates the staff. The goal of the Bank is to
IBBL is highly committed to the standards of integrity, make its offices/branches as ‘the best place’ to work in
ethics and compliance. IBBL emphasizes on Shari’ah by creating a congenial, healthy, caring and productive
principles to ensure realization of Maqasid al-Shari’ah environment for all levels of staff. Feedback is obtained
and transparency in all its activities. The Bank believes from the line managers with a view to improving the
that upholding the interest of its customers, employees work environment and to providing prompt and
and regulators significantly influence sustainable growth appropriate welfare services. Management always tries
and the country’s development. IBBL adopts the Core to care the family members of its employees through
Values, Commitments and Code of Conduct and Ethical various socio-cultural activities.
Principles which are approved by the Board of Directors

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Human Resource Strength


Category 2017 2016
Executive 578 423
Officer 8,195 8,095
Sub-Staff 2,011 2,086
Sub total 10,784 10,604
Rural Development Scheme (RDS) 2,506 2,583
Others (Temporary) 470 382
Total Manpower 13,760 13,569
Total Branch 332 318
Per Branch Employee (including RDS & others) 37 43
Per Branch Employee (Excluding RDS & others) 28 33

Human Resources Accounting employees into the ‘human assets’ or ‘human capital’
Human resource accounting is the process of identify- that provide future benefits. Towards implementing
ing and measuring the data about human resources Human Resource Accounting standard, IBBL adopts
and communicating the information to the interested transparent disclosure practices regarding its human
parties. Human Resource Division is also involved in resources.
Human Resources Accounting to transform the

Total Workforce by Age distribution


Around 70% of manpower are aged below 40 years which signifies that IBBL is in young, energetic and competent hands.
Age Group Female Male Total
Below 30 110 733 843
30 - 40 447 8077 8524
41 - 50 27 2963 2990
Above 50 8 925 933
Total 592 12,698 *13,290
*Excluding temporary manpower

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Corporate Governance Islami Bank Bangladesh Limited
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Training Programs during 2017


Sl. No. Particulars No. of Programs Persons
1 2 3 4
1 IBTRA 265 12,247
2 BIBM 158 640
3 BBTA 40 72
4 Overseas / Foreign Training 36 68
5 Other Institute 106 306
6 Total 605 13,333

Integrated Reporting
Employer of Choice 2017 2016
Total Employee 13,760 13,569
Percentage of voluntary attrition 0.84 0.98
Number of employee received training 13,333 14,472
Total number of training 605 581
Average training per employee 0.97 1.07
Number of fresh recruited as Officer 10 -
Number of fresh recruited as Probationary Officer 139 -
Number of fresh recruited as Junior Officer 2 -
Number of fresh recruited as Assistant Officer 8 -
Number of fresh recruited as Trainee Assistant Officer 74 -
Number of fresh recruited as Trainee Assistant Officer (Cash) 11 -
Number of fresh graduates recruited as Field Officer, RDS - 132
Number of fresh recruited as Messenger-cum-Guard Grade-II 2 45

Employee Productivity (Amount in million Taka)


Sl. No. Particulars 2017 2016
1 Total deposit per employee 86.06 79.99
2 Total investment per employee 85.34 79.45
3 Total income per employee 7.63 7.23
4 Total expenses per employee 5.71 5.52
5 Profit before provision per employee 1.91 1.71
6 Profit before taxes per employee 1.54 1.21
7 Salary and allowances per employee 1.56 1.50
The figures are for mainstream only

75
Islami Bank Bangladesh Limited
Annual 2017
Corporate Governance
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Corporate Structure Specific Policies undertaken by the Bank


Corporate Structure of IBBL is shown at the begining of IBBL, being a responsible corporation, has taken some
the Annual Report. initiatives in this regard, which has been presented in
Green Banking & Sustainability sections of this Report.
Global Reporting Initiative (GRI)
The Global Reporting Initiative (GRI) is a non-profit orga- Contribution to Environment and Society
nization that promotes economic, environmental and A natural and clean environment, economical use of
social sustainability. GRI provides all companies and resources and respect for people’s health and safety
organizations with a comprehensive sustainability-re- etc. are getting increasingly important. In accordance
porting framework that is widely used around the world. with this, IBBL is continuously working towards reducing
In line with the above, Islami Bank Bangladesh Ltd. has consumption of energy, elimination of use of hazardous
started to incorporate the components of standard substances from its processes and minimizing waste
disclosures in annual report in the broad areas whereas generation. The emphasis is on minimizing paper
applicable for IBBL. The GRI disclosure relevant to IBBL transactions to the extent possible. One of the key
is given at later part of the report. targets for financing manufacturing companies is to
reduce their carbon footprint.
Communication to Shareholders &
Stakeholders Investors Friendly Information
IBBL’s share is a very reliable choice to the investors due
Policy on Communication with to its strong fundamentals in the area of capital adequacy,
Shareholders and Stakeholders profitability, liquidity and market leadership driven by an
IBBL follows specific policy to facilitate effective experienced top Management and dedicated human
communication with the shareholders and stakeholders. resource base. Besides, the return on IBBL’s share is
Share & Bond Division of the Bank maintains communication excellent. IBBL ranked 81st position among the top
with the Shareholders, Bondholders and other related 1000 banks around the globe in terms of profits on
stakeholders. Shareholders and others may contact at capital.
any time to this Department for any sort of information
and query. IBBL provides updated information in its The Bank has also reputation for Shari’ah based banking
website for all the stakeholders of the Bank. management. There is very little fluctuation in the Islami
Banks share price and no rumor is observed in the
Policy on Ensuring Participation of Islami Bank’s share. Therefore, Investors rely greatly on
Shareholders at AGM this share. Goldman Sachs, the leading wealth management
In order to make the AGM more participatory, IBBL institution of the world, has chosen share of IBBL in their
declares the date of AGM well ahead of time, circulate portfolio GSN-11 as the best share in Bangladesh.
Annual Reports and other documents in time, arrange Therefore, the company has invested a good amount of
AGM in a well-known place & convenient time. their investible fund in IBBL share.
Shareholders are allowed to speak in the AGM freely to
give their valuable suggestions. Management Review & Responsibility
Managing Director acts as the Chief Executive Officer
Environmental and Social Obligations (CEO) of the Bank. Bank has approved Organizational
Structure (Organogram) with clear functional separation
Policies and Practices on Social and and segregation of processing/functioning (Front and
Environmental Responsibility Back office) authorities. This ensures core risk management
The issue of climate change is being addressed seriously practice and compliance across the Bank. Bank’s
all over the world. It is identified that Bangladesh being functions and plans also consider various regulatory
a southern delta is under serious threat of natural disaster. limits and restrictions to be risk compliant.
A detailed discussion regarding environment and social
obligation of IBBL is included in the Sustainability Report. Management Committee (MANCOM) is the main body

76
Corporate Governance Islami Bank Bangladesh Limited
2017 Annual
Report

of Management and decision making in the Bank. Director & CEO. The Team works under a specific Terms
Besides, there are Assets and Liability Management of Reference (ToR) being approved by the Board. The
Committee (ALCO) and Risk Management Coordination Team is responsible for preparation of ICAAP document
Committee for designated functions and responsibilities. assessing all the risks and capital charge thereagainst
Above all, the rules, regulations, guidelines, directions before placing the same to the Risk Management
and policies as applicable for the Banking business and Committee and Board for approval and onward
operations govern the Bank. submission to Bangladesh Bank. The team also
formulates strategies for mitigating the risks.
Management Committee (MANCOM)
Management Committee (MANCOM), the apex The Shari’ah Supervisory Committee
management body of the Bank, is comprised of 13 As per Islamic Banking Guidelines issued by Bangladesh
(thirteen) top-level executives having long experiences Bank, IBBL formed an independent Shari’ah Supervisory
and sound knowledge in Islamic banking. The Committee Committee consisting of 12 (twelve) members including
is headed by the Managing Director & CEO of the Bank. experienced and knowledgeable persons in Islamic
The Committee exerts powers as delegated by the Jurisprudence. The Shari’ah Supervisory Committee of
Board and is responsible for implementation of the IBBL gives opinions and guidelines to ensure Shari`ah
policies and guidelines approved by the Board. The compliance in all activities of the Bank particularly in
MANCOM scrutinizes the issues (other than business investment portfolio. The Committee is governed by a
power) thoroughly before placing those to the Executive by-laws approved by the Board of Directors. The
Committee, Audit Committee, Risk Management Committee representatives of the Shari’ah Supervisory Committee
and the Board. The Management Committee critically attend different meetings of the Bank, like Board of
evaluates the performance of the Bank and adopts Directors, Executive Committee, Audit Committee, and
strategic action plan to achieve various targets set by Annual Business Development Meetings and
the Board of Directors. Conferences to give opinions and oversee the activities
of the Bank from Shari`ah perspective. The Committee
Investment Committee (IC) also evaluates performance of the officials in terms of
The Bank formed Investment Committee comprising of their Shari`ah compliance.
08 (eight) senior executives to review and examine all
the investment related proposals and make specific Meeting of Shari’ah Supervisory
recommendations to appropriate business authorities. Committee & Sub Committee
In the year 2017, 09 (nine) meetings of Shari`ah Supervisory
Asset-Liability Committee (ALCO) Committee and 02 (two) meetings of Shari`ah
The Asset & Liability Committee (ALCO) is constituted Sub-Committee were held. Members of Shari`ah
with the senior management of the bank and headed by Supervisory Committee attended 22 (twenty two)
the Managing Director & CEO. The Committee meets at Shari`ah Awareness Programs held at differenct Zones
least once in a month to review economic, market and Corporate branches of the Bank as main discussant.
status, outlook and liquidity position of the bank. ALCO
also assesses pricing of assets and liabilities, maturity Shari’ah Inspection
wise grouping of assets and liabilities, Liquidity Contingency As part of major responsibilities of the Committee, it also
Funding Plan in order to manage the Balance Sheet Risk conducted Shari`ah inspections in 318 branches
in a prudent way, Transfer Pricing, Liquidity Coverage Ratio through Muraqibs during the year 2017 to ensure that
(LCR), Net Stable Funding Ratio (NSFR) etc. the Shari`ah principles are implemented and complied
with, or, on the contrary, to detect if there is any deviation
Supervisory Review Process (SRP) Team or lapse that has taken place in the branches of the Bank.
As per the revised process document of Bangladesh
Bank for SRP-SREP Dialogue on ICAAP under 2nd Regulatory Compliance
Pillar of Basel- III, the Bank has reconstituted the SRP Bank has meticulously been following related guidelines
Team with 10 (ten) members headed by the Managing including submission of Quarterly, Half-yearly and Yearly

77
Islami Bank Bangladesh Limited
Annual 2017
Corporate Governance
Report

financial statements and other statutory reports. Any results, changes in equity and cash flows for the year
significant development in the business is forth-with 2017. In preparing the financial statements, the Bank
disclosed in the form of price sensitive declarations uses appropriate accounting policies, supported by
adhering proper rules/guidelines/directives. Bank also reasonable as well as prudent judgments and estimates
ensures submission of returns to regulatory bodies in full to ensure that all applicable accounting standards have
compliance of the requirements and appropriate disclosures been followed at the time of preparing the financial
ensuring transparency and accountability. Board of statements.
Directors ensures adequate disclosures for the
shareholders and other stakeholders. Relationship of Board of Directors with the
Auditors
Compliance Status of Bangladesh Bank The Board has established transparent and appropriate
Circulars relationships with its external auditors through the Audit
The Bank has fully complied with Bangladesh Bank Committee. The external auditors have an obligation to
circulars, instructions and guidelines regarding Corporate bring any significant lapses/irregularities in the bank’s
Governance. The Bank is governed by the Bangladesh system of internal control and compliance to the attention
Bank’s rules and regulation on various issues of banking of Management, Audit Committee and the Board.
operation. As per BRPD Circular Letter No.11 dated
October 27, 2013 regarding Formation & Responsibilities Relationship of Directors with the
of Board of Directors of a Bank Company, the Bank has Shareholders and Investors
complied with all the instructions including formation of The Board recognizes the importance of timely and
Board of Directors, Independent director, information proper dissemination of information with regard to the
regarding directors, responsibilities of the Board of Bank’s performance and other issues affecting the
Directors, formation of committees from the Board of interests of the shareholders, investors and the general
Directors and training of the Directors. The Bank is also public. One of the most important means of communication
compliant with the BRPD Circular Letter No.18 dated to the Shareholders is the Annual Report, which
October 27, 2013 regarding Appointment and contains comprehensive and sufficient details about the
Responsibilities of the Chief executive officer. financial results, performance and other important
activities of the Bank.
Directors’ Responsibility in Respect of
Audited Financial Statements
The Board of Directors ensures that financial statements
give a true and fair view of the Bank’s state of affairs,

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Corporate Governance Islami Bank Bangladesh Limited
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Report

Credit Rating

Islami Bank Bangladesh Limited AA+ (Long Term)


Rating Reaffirmed ST-1 (Short Term)

IBBL has continuously been maintaining the highest credit rating among the private sector banks of the country. The
description of latest credit rating of the bank is delineated below:

Rating Company Particulars Long-term Short-term Rating Base

AA+ ST-1
(High Safety) (Highest Grade)

Credit Rating Surveillance Bank rated in this category is Highest certainty of timely Audited Financial
Information and Rating adjudged to be of high quality, payment. Short-term Statements up to
Services offer higher safety and have liquidity including internal 31, December
Limited (CRISL) high credit quality. This level of fund generation is very 2016 and other
rating indicates a corporate strong and access to prevailing factors
entity with a sound credit profile alternative sources of funds upto date of
and without significant is outstanding. Safety is Rating.
problems. Risks are modest almost risk free like
and may vary slightly from time Government short-term
to time because of economic obligations
conditions

Date of Declaration of Rating: May 18, 2017


Validity of Rating : May 17, 2018
Outlook: “Stable” (The bank will be able to maintain its good fundamentals in future. CRISL does not foresee any
volatility in the operation of the bank within the rating validity period)

IBBL obtained the “AA+” rating in consideration of the following good fundamentals such as:

Good liquidity
Considerable non-funded business
Strong market position
Good corporate governance
Experienced top management

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Islami Bank Bangladesh Limited
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Corporate Governance
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Directors’ Attendance in the Board, Executive Committee, Audit Committee and


Risk Management Committee Meeting

(During the year 2017)


Executive Risk Management
Board Audit committee
Committee Committee
Sl.
Name of the Directors Position Eligible Attended Eligible Attended Eligible Attended Eligible Attended
No. to to to to
Attend Attend Attend Attend
1 2 3 4 5 6 7 8 9 10 11
1 Mr. Arastoo Khan Chairman 16 16
Mr. Yousif Abdullah Vice-
2 Al-Rajhi, K.S.A. Chairman 16 4
Vice- 6 4
3 Mr. Md. Shahabuddin Chairman 9 9
Major General (Retd.) Director
4 (Engr.) Abdul Matin 16 16 51 43

Dr. Md. Zillur Rahman Independent 12 12 5 5


5 Director 16 16
Mr. Shamim Mohammed Independent 12 4
6 Afzal 16 10 5 4
Director
7 Dr. Areef Suleman Director 16 12 6 2
Professor Md. Nazmul Independent
8 Hassan, Ph.D Director 15 14 31 31 4 3
Mr. Md. Syful Islam, Director
9 16 13 51 45
FCA, FCMA
Mr. Mohammed Humayun Independent
10 16 16 12 11
Kabir, FCA Director
11 Professor Dr. Md. Sirajul 16 16
Karim Director 31 29 6 6 11 11
Mr. Helal Ahmed Independent
12 16 14 6 6
Chowdhury Director
13 Professor Md. Kamal Independent 15 13
Director 31 24
Uddin, Ph.D
14 Mr. Md. Joynal Abedin Director 16 16 50 50 11 11
Mr. Md. Mizanur
15 Rahman Director 16 16 12 12
Professor (Dr.) Qazi Director
16 16 15 20 18
Shahidul Alam
Mr. Borhan Uddin Independent
17 14 12 20 18
Ahmed Director
Mr. Md. Kamal Hossain Director
18 11 10
Gazi
Mr. Md. Mosddake-Ul- Director
19 4 3 1 1
Alam
Mr. Musaid Abdullah A. Director
20 10 0
Al-Rajhi
21 Mr.Syed Abu Asad Director 9 7 27 23
22 Engr. Mustafa Anwar Ex-Chairman 1 1
23 Mr. M. Azizul Huq Ex- Vice- 1 0 1
Chairman 1

24 Professor Syed Ahsanul Independent


Director 7 4 20 19
Alam
Mr. Md. Abdul Mabud, Chairman,
25 RMC 7 5 5 5
P.P.M.
Mr. Md. Abdul Hamid
26 Miah, Managing Ex-Officio 15 15 50 43 12 6 10 6
Director
Director & CEO

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Statement of Shares held by Directors & their Spouses and Minor Children

(As on 31.12.2017)
Percentage of total
Sl.
Name of the Directors Position No. of Shares Paid-up Capital
No. of IBBL
1 2 3 4 5
Armada Spinning Mills Limited
1 Chairman 32,408,339 2.0130%
Repr. by Mr. Arastoo Khan
Yousif Abdullah Al-Rajhi, K.S.A.
S/O- Abdullah Abdul Aziz Al-Rajhi and Abdullah
2 Vice Chairman 122,106,875 7.5843%
Abdul Aziz Al-Rajhi is holding of 7.58% shares of
the total Paid-up Capital of the Bank.
Yousif Abdullah Al-Rajhi, K.S.A. Self 99,935 0.0062%
JMC Builders Ltd. 2.0100%
3 Vice Chairman 32,360,812
Repr. by Mr. Md. Shahabuddin
Paradise International Limited Director
4 32,360,000 2.0099%
Repr. by Major General (Retd.) Engr. Abdul Matin
5 Dr. Md. Zillur Rahman Independent Director - 0.0000%
6 Mr. Shamim Mohammad Afzal Independent Director - 0.0000%
Islamic Development Bank, K.S.A.
7 Director 33,848,625 2.1024%
Repr. by Dr. Areef Suleman
8 Prof. Md. Nazmul Hassan, Ph. D Independent Director - 0.0000%
BLU International Limited
9 Director 32,360,000 2.0099%
Repr. by Mr. Md. Syful Islam, FCA, FCMA
10 Mr. Mohammed Humayun Kabir, FCA Independent Director - 0.0000%
Excel Dyeing & Printing Limited
11 Director 54,693,914 3.3972%
Repr. by Professor Dr. Md. Sirajul Karim
12 Mr. Helal Ahmed Chowdhury Independent Director - 0.0000%
13 Prof. Md. Kamal Uddin, Ph. D Independent Director - 0.0000%
ABC Ventures Limited
14 Director 32,301,030 2.0063%
Repr. by Mr. Md. Joynal Abedin
Grand Business Limited
15 Repr. by Mr. Md. Mizanur Rahman Director 32,547,335 2.0216%
Platinum Endeavors Limited Director
16 Repr. by Professor (Dr.) Qazi Shahidul Alam 32,285,000 2.0053%
Investment Corporation of Bangladesh (ICB)
17 Repr. by Mr. Md. Mosaddake-Ul-Alam Director 44,477,674 2.7626%
Arabsas Travel & Tourist Agency, K.S.A.
18 Director 160,996,668 9.9999%
Repr. by Musaid Abdullah A. Al-Rajhi, K.S.A.
Excelsior Impex Company Limited
19 Director 32,200,334 2.0000%
Repr. by Mr. Syed Abu Asad

20 Mr. Md. Abdul Hamid Miah Managing Director & CEO 11,260 0.0007%

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Islami Bank Bangladesh Limited
Annual 2017
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Statement of Shares held by Directors & their Spouses and Minor Children
(As on 25.04.2018)
Percentage of total
Sl.
Name of the Directors Position No. of Shares Paid-up Capital
No. of IBBL
1 2 3 4 5
Armada Spinning Mills Limited
1 Chairman 32,408,339 2.0130%
Repr. by Prof. Md. Nazmul Hassan, Ph. D
Yousif Abdullah Al-Rajhi, K.S.A.
S/O- Abdullah Abdul Aziz Al-Rajhi and Abdullah Abdul Vice Chairman 122,106,875 7.5843%
2 Aziz Al-Rajhi is holding of 7.58% shares of the total
Paid-up Capital of the Bank.
Yousif Abdullah Al-Rajhi, , K.S.A. Self 99,935 0.0062%
3 JMC Builders Ltd. 32,360,812 2.0100%
Repr. by Mr. Md. Shahabuddin Vice Chairman

Paradise International Limited


4 Repr. by Major General (Retd.) Engr. Abdul Matin Director 32,360,000 2.0099%

Dr. Md. Zillur Rahman - 0.0000%


5 Independent Director

6 Mr. Helal Ahmed Chowdhury Independent Director - 0.0000%

7 Islamic Development Bank, K.S.A. Director 33,848,625 2.1024%


Repr. by Dr. Areef Suleman
8 Mr. Shamim Mohammad Afzal Independent Director - 0.0000%

9 Excel Dyeing & Printing Limited


Director 54,693,914 3.3972%
Repr. by Professor Dr. Md. Sirajul Karim

10 BLU International Limited 32,360,000 2.0099%


Repr. by Mr. Md. Syful Islam, FCA, FCMA Director

Mr. Mohammed Humayun Kabir, FCA Independent Director - 0.0000%


11
12 Prof. Md. Kamal Uddin, Ph. D Independent Director - 0.0000%
ABC Ventures Limited
13 Repr. by Mr. Md. Joynal Abedin Director 32,301,030 2.0063%

Grand Business Limited


14 Director 32,547,335 2.0216%
Repr. by Mr. Md. Mizanur Rahman

Platinum Endeavors Limited


15 Director 32,285,000 2.0053%
Repr. by Professor (Dr.) Qazi Shahidul Alam

Investment Corporation of Bangladesh (ICB)


16 Director 45,724,119 2.8400%
Repr. by Mr. Md. Mosaddake-Ul-Alam

Arabsas Travel & Tourist Agency, K.S.A. Director


17 160,996,668 9.9999%
Repr. by Musaid Abdullah A. Al-Rajhi, K.S.A.

Excelsior Impex Company Limited 32,200,334


18 Repr. by Mr. Syed Abu Asad Director 2.0000%

Marsha Food & Beverage Ltd.


19 Director 32,200,000 2.0000%
Repr. By Dr. Tanveer Ahmad

Mortaza Assets Ltd. Director 52,363,782 3.2524%


20
Repr. By Pro. Dr. Md. Salim Uddin, FCA, FCMA

21 Mr. Md. Mahbub ul Alam Managing Director & CEO 363 0.0000%

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Corporate Governance Islami Bank Bangladesh Limited
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Statement of Shares held by CEO, Company Secretary, CFO,


Head of Internal Audit and their Spouses and Minor Children
(As on 31.12.2017)

Sl. No. of Percentage of total


No. Name Status Shares Paid-up Capital of IBBL

1 2 3 4 5
Managing Director & Chief Executive
1 Mr. Md. Abdul Hamid Miah 11,260 0.0007%
Officer (CEO)

J Q M Habibullah, FCS Deputy Managing Director &


0 0.0000%
Company Secretary
2
W/O. J Q M Habibullah, FCS, Deputy
Mrs. Samima Akhter 0 0.0000%
Managing Director & Company Secretary

Md. Habibur Rahman Deputy Managing Director & Chief


10 0.0000%
Bhuiyan, FCA Financial Officer (CFO)
3
W/O. Deputy Managing Director &
Late Tahmina Rahman 58 0.0000%
Chief Financial Officer (CFO)

Mohammad Ali Deputy Managing Director & Head of Internal 171,844 0.0107%
Control & Compliance Wing (ICCW)
4
W/O. Mohammad Ali,
Mrs. Shahana Afrin Rita 6,514 0.0004%
Deputy Managing Director & Head of ICCW

Statement of Shares held by CEO, Company Secretary, CFO,


Head of Internal Audit and their Spouses and Minor Children
(As on 25.04.2018)

Sl. No. of Percentage of total


No. Name Status Shares Paid-up Capital of IBBL

1 2 3 4 5
Managing Director & Chief Executive
1 Md. Mahbub-ul-Alam 363 0.0000%
Officer (CEO)

J Q M Habibullah, FCS Deputy Managing Director &


0 0.0000%
Company Secretary
2
W/O. J Q M Habibullah, FCS, Deputy
Mrs. Samima Akhter 0 0.0000%
Managing Director & Company Secretary

Senior Vice President & Chief Financial


Md. Rafiqul Islam 0 0.0000%
Officer (CFO)
3
W/O. Senior Vice President & Chief Financial
Mrs. Shama Afroz 0 0.0000%
Officer (CFO)

Deputy Managing Director & Head of Internal 171,844


Mohammad Ali 0.0107%
Control & Compliance Wing (ICCW)
4
Mrs. Shahana Afrin Rita W/O. Mohammad Ali,
Deputy Managing Director & Head of ICCW 6,514 0.0004%

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Islami Bank Bangladesh Limited
Annual 2017
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Statement of Shares held by top 5 (five) Salaried Employees other than the Directors, CEO
Company Secretary, CFO, Head of Internal Audit (ICCW)
(as on 31.12.2017)
Sl. No. of Percentage of total
Name Designation
No. Shares Paid-up Capital of IBBL
1 2 3 4 5

1 Md. Mahbub-ul-Alam Additional Managing Director 363 0.0000%

2 Abdus Sadeque Bhuiyan Deputy Managing Director 750 0.0000%

3 Md. Shamsuzzaman Deputy Managing Director 0 0.0000%

4 Mohammed Monirul Moula Deputy Managing Director 131 0.0000%

5 Abu Reza Md Yeahia Deputy Managing Director 500 0.0000%

Statement of Shares held by top 5 (five) Salaried Employees other than the Directors, CEO
Company Secretary, CFO, Head of Internal Audit (ICCW)
(as on 25.04.2018)
Sl. No. of Percentage of total
Name Designation
No. Shares Paid-up Capital of IBBL
1 2 3 4 5

1 Mohammed Monirul Moula Additional Managing Director 131 0.0000%

2 Abu Reza Md Yeahia Deputy Managing Director 500 0.0000%

3 Taher Ahmed Chowdhury Deputy Managing Director 0 0.0000%

4 Md. Abdul Jabbar Senior Executive Vice President 0 0.0000%

5 Taher Ahmed Senior Executive Vice President 2,770 0.0000%

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25 April, 2018

Board of Directors
Islami Bank Bangladesh Limited
Islami Bank Tower
40, Dilkusha C/A
Dhaka-1000

Subject: CEO and CFO’s Declaration to the Board

In accordance with the notification of Bangladesh Securities and Exchange Commission No. SEC/CMR-
RCD/2006-158/134/Admin/44 dated 07 August 2012, we declare that for the financial year ended 31
December, 2017:

i) We have reviewed the financial statements for the year and that to the best of our Knowledge and belief:

a) These statements do not contain any materially untrue statement or omit any material fact or contain
statements that might be misleading;

b) These statements together present a true and fair view of the company’s affairs and are in compliance
with existing accounting standards and applicable laws;

ii) There are, to the best our knowledge and belief, no transactions entered into by the Bank during the year
which are fraudulent, illegal or violating the Bank’s code of conduct.

Md. Mahbub ul Alam Md. Rafiqul Islam


Managing Director & CEO Chief Financial Officer (Acting)

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Annual 2017
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Corporate Governance Islami Bank Bangladesh Limited
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Report on Compliance of BSEC’s Notifiction for Corporate Governance


(Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August 2012)

Condition Compliance status


Title Not Remarks
No. Complied Complied
1 2 3 4 5
1 Board of Directors
Board’s size: Board members shall not be less than 5 (five) and
1.1 more than 20 (twenty)
1.2 Independent Director
1.2(i) At least one-fifth (1/5) of the total number of directors in the company’s
board shall be independent directors.
1.2(ii) For the purpose of this clause “independent director” means a director:
Independent Directors do not hold any share or hold less than one
1.2(ii)a) percent (1%) shares of the total paid-up capital.
1.2(ii)b) Independent Directors are not connected with the company’s Sponsor
or Director or shareholder who holds one percent (1%) or more shares.
1.2(ii)c) Independent Directors do not have any other relationship, whether pecuniary
or otherwise, with the company or its subsidiary/associated companies;
1.2(ii)d) Independent Directors are not a member, director or officer of any
stock exchange;
1.2(ii)e) Independent Directors are not a Shareholder, Directors or Officers of
any member of stock exchange or an intermediary of the capital market;
Independent Directors are not the partners or executives during the
1.2(ii)f) preceding 3 (three) years of the concerned company’s statutory audit firm;
1.2(ii)g They are not the Independent Directors in more than 3 (three) listed companies;
1.2(ii)h They are not been convicted by a court of competent jurisdiction as a defaulter
in payment of any loan to a bank or a Non-Bank Financial Institution (NBFI);
1.2(ii)i) They have not been convicted for a criminal offence involving moral turpitude.

1.2(iii) The independent director(s) shall be appointed by the Board of Directors and
approved by the shareholders in the Annual General Meeting (AGM).
1.2(iv) The post of independent director(s) cannot remain vacant for more
than 90 (ninety) days.
The Board shall lay down a code of conduct of all Board members and
1.2(v) annual compliance of the code to be recorded.
1.2(vi) The tenure of office of an independent director shall be for a period of 3
(three) years, which may be extended for 1 (one) term only.
1.3 Qualification of Independent Director (ID)
1.3(i) Independent Director shall be knowledgeable individual with integrity
1.3(ii) The Independent Director must have at least 12 (twelve) years of
corporate management/professional experiences.
1.3(iii) In special cases, the above qualifications may be relaxed subject to N/A
prior approval of the Commission.
Separate Chairman and CEO and their clearly defined
1.4 roles and responsibilities.
1.5 Directors’ Report to Shareholders
1.5(i) Industry outlook and possible future developments in the industry.
1.5(ii) Segment-wise or product-wise performance.
1.5(iii) Risks and concerns
1.5(iv) A discussion on Cost of Goods sold, Gross Profit Margin and
Net Profit Margin.
The Bank does
1.5(v) Discussion on continuity of any Extra-Ordinary gain or loss. not have such
gains or loss
1.5(vi) Basis for related party transactions- a statement of all related party
transactions should be disclosed in the annual report.

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Condition Compliance status


Title Not Remarks
No. Complied Complied
1 2 3 4 5
1.5(vii) Utilization of proceeds from public issues, rights issues and/or through
any others instruments.
An explanation if the financial results deteriorate after the company
1.5(viii) goes for Initial Public Offering (IPO), Repeat Public Offering (RPO), N/A
Rights Offer, Direct Listing, etc.
1.5(ix) If significant variance occurs between Quarterly Financial performance
and Annual Financial Statements, the management shall explain about N/A
the variance on their Annual Report.
1.5(x) Remuneration to directors including independent directors.
The financial statements prepared by the management of the issuer
1.5(xi) company present fairly its state of affairs, the result of its operations,
cash flows and changes in equity.
1.5(xii) Proper books of account of the issuer company have been maintained.
Appropriate accounting policies have been consistently applied in
1.5(xiii) preparation of the financial statements and that the accounting
estimates are based on reasonable and prudent judgment.
International Accounting Standards (IAS)/Bangladesh Accounting Standards
(BAS)/International Financial Reporting Standards (IFRS)/Bangladesh Financial
1.5(xiv) Reporting Standards (BFRS), as applicable in Bangladesh, have been followed
in preparation of the financial statements and any departure there-from has
been adequately disclosed.
1.5(xv) The system of internal control is sound in design and has been
effectively implemented and monitored.
There are no significant doubts upon the issuer company's ability to continue
1.5(xvi) as a going concern. If the issuer company is not considered to be a going
concern, the fact along with reasons thereof should be disclosed.
1.5(xvii) Significant deviations from the last year’s operating results of the issuer
company shall be highlighted and the reasons thereof should be explained. N/A
1.5(xviii) Key operating and financial data of at least preceding 5 (five) years shall
be summarized.
If the issuer company has not declared dividend (cash or stock) for the
1.5(xix) year, the reasons thereof shall be given. N/A
1.5(xx) The number of Board meetings held during the year and attendance by
each director shall be disclosed.
The pattern of shareholding shall be reported to disclose the aggregate number of shares
1.5(xxi) (along with name wise details where stated below) held by:-
1.5(xxi)a) Parent/Subsidiary/Associated Companies and other related parties
(name wise details);
Directors, Chief Executive Officer, Company Secretary, Chief Financial
1.5(xxi)b) Officer, Head of Internal Audit and their spouses and minor children
(name wise details);
Executives (top five salaried employees of the company other than
1.5(xxi)c) stated in 1.5 (xxi)b);
1.5(xxi)d) Shareholders holding ten percent (10%) or more votes interest in the
company (name wise details). N/A
In case of the appointment/re-appointment of a director the company shall disclose the following
1.5(xxii) information to the shareholders:
1.5(xxii)a) a brief resume of the director;
1.5(xxii)b) nature of his/her expertise in specific functional areas;
names of companies in which the person also holds the directorship
1.5(xxii)c) and the membership of committees of the board.
2. Chief Financial Officer (CFO), Head of Internal Audit & Company Secretary
2.1 Appointment of CFO, Head of Internal Audit and Company Secretary
and their clearly defined roles, responsibilities and duties.
2.2 Attendance of CFO and the Company Secretary at Board of Directors meeting.
3. Audit Committee
3. (i) The company shall have an Audit Committee as a sub-committee
of the Board of Directors.
The Audit Committee shall assist the Board of Directors in ensuring that the
3. (ii) financial statements reflect true and fair view of the state of affairs of the
company and in ensuring a good monitoring system within the business.

88
Corporate Governance Islami Bank Bangladesh Limited
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Report

Condition Compliance status


Title Not Remarks
No. Complied Complied
1 2 3 4 5
The Audit Committee shall be responsible to the Board of Directors.
3. (iii) The duties of the Audit Committee shall be clearly set forth in writing.
3.1 Constitution of the Audit Committee
3.1(i) The Audit Committee shall be composed of at least 3 (three) members.
3.1(ii) Constitution of Audit Committee with Board Members including one
independent director.
All members of the audit committee should be “financially literate” and
3.1(iii) at least 1(one) member shall have accounting or related financial
management experience.
3.1(iv) Filling of Casual Vacancy in Committee N/A
3.1(v) The Company Secretary shall act as the secretary of the Committee.
3.1(vi) The quorum of the Audit Committee meeting shall not constitute
without at least 1 (one) independent director.
3.2 Chairman of the Audit Committee
3.2(i) Chairman of the Audit Committee shall be an independent director.
Chairman of the Audit Committee shall remain present in
3.2(ii) the Annual General Meeting (AGM).
3.3 Role of Audit Committee
3.3(i) Oversee the financial reporting process.
3.3(ii) Monitor choice of accounting policies and principles.
3.3(iii) Monitor Internal Control Risk management process.
3.3(iv) Oversee hiring and performance of external auditors.
Review along with the management, the annual financial statements
3.3(v) before submission to the board for approval.
3.3(vi) Review along with the management, the quarterly and half yearly
financial statements before submission to the board for approval.
3.3(vii) Review the adequacy of internal audit function.
Review statement of significant related party transactions submitted
3.3(viii) by the management.
3.3(ix) Review Management Letters/ Letter of Internal Control weakness
issued by statutory auditors.
When money is raised through Initial Public Offering (IPO)/Repeat Public
Offering (RPO)/Rights Issue the company shall disclose to the Audit Committee
3.3(x) about the uses/applications of funds by major category (capital expenditure, N/A
sales and marketing expenses, working capital, etc), on a quarterly basis, as a
part of their quarterly declaration of financial results.
3.4 Reporting of the Audit Committee
3.4.1 Reporting to the Board of Directors
3.4.1(i) The Audit Committee shall report on its activities to the Board of Directors.
3.4.1 (ii) The Audit Committee shall immediately report to the Board of Directors on the following findings, if any:
3.4.1(ii)a) report on conflicts of interests;
suspected or presumed fraud or irregularity or material defect in No such
3.4.1(ii)b) the internal control system; events
3.4.1(ii)c) suspected infringement of laws, including securities related laws, occurred.
rules and regulations; Thus not
3.4.1(ii)d) any other matter which shall be disclosed to the Board of reported
Directors immediately.
3.4.2 Reporting of anything having material financial impact to the Commission.
3.5 Reporting to the Shareholders and General Investors
4. External/Statutory Auditors
4.(i) Appraisal or valuation services or fairness opinions.
4.(ii) Financial information systems design and implementation.
4.(iii) Book-keeping or other services related to the accounting records or
financial statements.
4.(iv) Broker-dealer services.
4.(v) Actuarial services.

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Annual 2017
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Condition Compliance status


Title Not Remarks
No. Complied Complied
1 2 3 4 5
4.(vi) Internal audit services.
4.(vii) Any other service that the Audit Committee determines.
No partner or employees of the external audit firms shall possess any
4.(viii) share of the company they audit at least during the tenure of their audit
assignment of that company.
Audit / certification services on compliance of corporate governance as
4.(ix) required under clause (i) of condition No.7
5. Subsidiary Company
Provisions relating to the composition of the Board of Directors of the
5.(i) holding company shall be made applicable to the composition of the
Board of Directors of the subsidiary company.
At least 1 (one) independent director on the Board of Directors of the
5.(ii) holding company shall be a director on the Board of Directors of the
subsidiary company.
5.(iii) The minutes of the Board meeting of the subsidiary company shall be
placed for review at the following Board meeting of the holding company.
5.(iv) The minutes of the respective Board meeting of the holding company shall
state that they have reviewed the affairs of the subsidiary company as well.
The Audit Committee of the holding company shall also review the financial
5.(v) statements, in particular the investments made by the subsidiary company.
6. Duties of Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
They have reviewed financial statements for the year and that to the
6.(i) best of their knowledge and belief :-
These statements do not contain any materially untrue statement or
6.(i)a) omit any material fact or contain statements that might be misleading;
These statements together present a true and fair view of the company’saffairs
6.(i)b) and are in compliance with existing accounting standards and applicable laws.
There are, to the best of knowledge and belief, no transactions entered
6.(ii) into by the company during the year which are fraudulent, illegal or
violation of the company’s code of conduct.
7. Reporting and Compliance of Corporate Governance
The company shall obtain a certificate from a practicing Professional
Accountant/Secretary (Chartered Accountant/Cost and Management
Accountant/Chartered Secretary) regarding compliance of conditions of
Corporate Governance Guidelines of the Commission and shall send the
same to the shareholders along with the Annual Report on a yearly basis.
7 (i)
Explanation: Chartered Accountant means Chartered Accountant as
defined in the Bangladesh Chartered Accountants Order, 1973 (President‘s
Order No.2 of 1973); Cost & Management Accountant means Cost &
Management Accountant as defined in the Cost & Management Accoun-
tants Ordinance, 1977 (Ordinance No. LIII of 1977); Chartered Secretary
means Chartered Secretary as defined in the Chartered Secretaries Act,
2010 (Act No.25 of 2010)
The directors of the company shall state, in accordance with the
7 (ii) Annexure attached, in the directors' report whether the company has
complied with these conditions.

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Corporate Governance Islami Bank Bangladesh Limited
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Report

GLOBAL REPORTING INITIATIVES (GRI) STANDARD DISCLOSURES INDEX

GRI Index No. Description Reported Section Reference Report

General Standard Disclosures


Strategy and Analysis Chairman’s Message,
G4-1 Statement from the most senior decision-maker of the Organization Managing Directors Review

Organisational Profile
G4-3 Name of the Organization Corporate Information

G4-4 Primary Brands, products and services Directors’ Report

G4-5 Location of the Organization’s headquarters Corporate Information

G4-6 Number of countries where the Organization operates and names


of Countries with either major operations or that are specifically N/A
relevant to the sustainability issues covered in the Report.

G4-8 Markets served (including geographic breakdown, Sectors served


and types of customers/beneficiaries) Directors’ Report

G4-9 Scale of the reporting Organization Directors’ Report

G4-10 Total workforce by employment type, employment contract, and


region, broken down by gender Corporate Governance Report

G4-12 Organization’s supply chain Sustainability Report

G4-13 Significant changes during the reporting period regarding size,


Structure or ownership Corporate Governance Report

G4-14 Report whether and how the precautionary approach or


Principle is addressed by the Organization Corporate Governance Report

G4-15 List externally developed economic, environmental and social


Charters, principles, or other initiatives to which the Organization Sustainability Report
Subscribes or which it endorses.

G4-16 List memberships of associations (such as industry associations)


and national or international advocacy Organizations in which the Organization Directors’ Report

Identified Material Aspects and Boundaries


G4-17 Operational structure of the Organization Corporate Organogram
G4-18 Process for defining report content Corporate Organogram

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Islami Bank Bangladesh Limited
Annual 2017
Corporate Governance
Report

GRI Index No. Description Reported Section Reference Report

Stakeholder Engagement
G4-24 List of stakeholder groups engaged by the Organization. Directors’ Report
G4-25 Report the basis for identification and selection of stakeholders Sustainability Report
With whom to engage.
G4-26 Report the Organization’s approach to stakeholder engagement, Stakeholders &
including frequency of engagement by type and by stakeholder group Materiality Report
G4-27 Report key topics and concerns that have been raised through
Stakeholder engagement, and how the Organization has responded to
those key topics and concerns, including through its reporting.

Report Profile
G4-28 Reporting period
G4-29 Most recent previous report Sustainability Report
G4-30 Reporting cycle Management Report &
G4-31 Contact point regarding the report Analysis

Governance
G4-34 Report the governance structure of the Organization, including
Committees of the highest governance body and identify any Sustainability Report and
Committees responsible for decision-making on economic, Corporate Governance Report
Environmental and social impacts

Ethics and Integrity


G4-56 The Organization’s values, principles, standards and norms Sustainability Report and
Of behavior such as codes of conduct and codes of ethics Corporate Governance Report

Specific Standard Disclosures


Category: Economic
Aspect: Economic Performance
G4-EC1 Economic value generated and distributed Management Report &
G4-EC3 Coverage of the Organization’s defined benefit plan obligations Analysis, Notes to the
Financial Statements
G4-EC4 Financial assistance received from Government Corporate Governance Report

Category: Environmental
Aspect: Materials
G4-EN1 Materials used by weight or volume N/A

Aspect: Energy
G4-EN3 Energy consumption within the Organization Green Banking Report
G4-EN7 Reduction in energy requirements of products and services

Aspect: Water
G4-EN8 Total water withdrawal by source Green Banking Report

Aspect: Biodiversity
G4-EN12 Direct and indirect impacts on biodiversity Green Banking Report

Aspect: Effluents and Waste


G4-EN23 Total weight of waste by type and disposal method Green Banking Report
G4-EN27 Mitigation of environmental impacts of products and services Sustainability Report

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Corporate Governance Islami Bank Bangladesh Limited
2017 Annual
Report

GRI Index No. Description Reported Section Reference Report

Aspect: Compliance
G4-EN29 Monetary value of significant fines and total number of
Non-monetary sanctions N/A

Aspect: Supplier Environmental Assessment


G4-EN32 Percentage of new suppliers that were screened using Green Banking Report
Environmental criteria Sustainability Report

Aspect: Environmental Grievance Mechanisms


G4-EN34 Number of grievances about environmental impacts Sustainability Report

Category: Social
Sub Category: Labour Practices and Decent Work
Aspect: Employment
G4-LA1 Total number and rates of new employees hired and employee
turnover by age group, gender and region Corporate Governance Report
G4-LA2 Benefits for full/part time employees
G4-LA3 Return to work and retention rates after parental leave, by gender Sustainability Report

Aspect: Occupational Health and Safety 92


G4-LA5 Joint management-worker health and safety committees Corporate Governance Report
G4-LA6 Type of injuries Sustainability Report

Aspect: Training and Education


G4-LA9 Training details Corporate Governance Report
G4-LA10 Programmes implemented and assistance provided to upgrade
employee skills
G4-LA11 Regular performance and career development review

Aspect: Diversity and Equal Opportunity


G4-LA12 Diversity categories Corporate Governance Report

Aspect: Equal Remuneration for Women and Men Stakeholders & Materiality Report
G4-LA13 Basic salary and remuneration of women to men Corporate Governance Report

Aspect: Labour Practices Grievance Mechanisms


G4-LA16 Grievances about labour practices Corporate Governance Report

Sub Category: Human Rights


Aspect: Non-descrimination
G4-HR3 Incidents of discrimination Stakeholders & Materiality Report

Aspect: Child Labour


G4-HR5 Child labour related to operations and suppliers N/A

Aspect: Human Rights Grievance Mechanisms


G4-HR12 Grievance mechanisms of human rights Corporate Governance Report

Sub Category: Society


Aspect: Local Communities
G4-SO1 Engagement with local community Sustainability Report

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Islami Bank Bangladesh Limited
Annual 2017
Corporate Governance
Report

GRI Index No. Description Reported Section Reference Report

Aspect: Anti-competitive Behaviour


G4-SO7 Number of legal actions pending or completed N/A
Sub Category: Product Responsibility

Aspect: Customer Health and Safety


G4-PR1 Product and service categories for health and safety impacts Directors’ Report
G4-PR2 Non-compliance with regulations and voluntary codes
concerning the health and safety Sustainability Report

Aspect: Customer Privacy


G4-PR8 Complaints received concerning breaches of customer privacy Stakeholders & Materiality Report

Aspect: Compliance
G4-PR9 Monetary value of fines for non-compliance with laws and
regulations concerning products and services N/A

94
Islami Bank Bangladesh Limited
2017 Annual
Report

Directors’ Report

34th Annual General Meeting

The Board of Directors takes the opportunity to with increasing business and consumer confidence. The
welcome you all in the 35th Annual General Meeting of pickup in global growth in 2017 reflects firmer domestic
the Bank and has the pleasure to place the Annual demand growth in US, Euro area, Canada and Japan
Report before you along with the Auditors’ Report and among the advanced economies and China, emerging
Audited Financial Statements of the Bank for the year Europe, and Russia among the emerging market and
ended December 31, 2017. This section of the Annual developing economies. Global inflation rose in 2017,
Report contains a brief overview of the world economy reflecting the continued cyclical recovery in demand and
and banking, Bangladesh economy and banking higher commodity prices. The US consumer price
scenario etc. inflation reached 2.1 per cent in 2017, up from 1.3 per
cent in 2016, and the euro areal inflation reached 1.4 per
Global Economy & Banking cent in 2017. Since the beginning of this fiscal year,
A broad-based pickup in global activities has strength- although non-energy commodity prices rose modestly,
ened its momentum in recent months. Global growth is crude oil prices rose by 35 per cent to over $60 per
estimated to have grown by 3.7 per cent in 2017 and barrel by December 2017 and are expected to remain
the forecast for 2018 has been revised up by 0.2 elevated in 2018.
percentage points to 3.9 per cent supported by higher
investment, trade, and industrial production, coupled

95
Islami Bank Bangladesh Limited
Annual 2017
Board of Directors Report
Report

Banks in emerging markets are now well capitalized and US$14,931.10 million with a deceleration rate of 14.48
well funded and big enough to compete directly against per cent. The slowdown in the economy of the Middle
their western counterparts in the global marketplace. East countries emanating from low oil prices and the
They have greater potential for growth because of the geo-political situation were mainly responsible for the
relatively immature development of their domestic finan- deceleration of remittances inflow. Moreover, apprecia-
cial markets and their rapidly growing economies. tion of USD against British Pound Sterling and Euro
contributed to such reduction of remittances inflows.
The Islamic finance industry continues to be character- However, during the period overseas employment
ized by rapid innovation and growth. The south-east increased considerably by 32.12 per cent from the
Asian markets, in conjunction with the countries of the previous year.
Gulf Cooperation Council (GCC), are at the forefront of
this growth. Islamic finance asset stood around $2.1 The foreign exchange reserve increased to US$33,407
trillion in 2017. Most of these Islamic finance assets (78 million at the end of FY2016-17. During the period
per cent) are held by Islamic banks and most of the exchange rate of Taka against US dollar remained
assets are located in Muslim-majority countries within almost stable.
the 57-member countries of the Organization of Islamic
Cooperation (OIC). The rest takes the form of Sukuk Banking sector indicators reflect a mixed performance
(17%), Islamic investment funds (3%) and Takaful (2%). in 2017. At the end of September 2017, liquidity condi-
The demand for Islamic Finance around the globe is in tion of the banking system remains adequate, accom-
increasing trend and continues to expand to serve a panied by stable Capital to Risk-weighted Asset Ratio
growing population of Muslims as well as conventional, (CRAR). Non-performing loan (NPL) has increased
non-Muslim investors. slightly and provision shortfall position against classified
loan has softened, mostly driven by state owned com-
Bangladesh Economy & Banking mercial banks (SCBs). Gross NPL ratio for private com-
According to the final estimates by Bangladesh Bureau mercial banks (PCBs) is the lowest among different bank
of Statistics (BBS), real Gross Domestic Product (GDP), groups in Sep’17 (rising modestly from 5.8 per cent to
supported by manufacturing and services, grew robust- 6.0 per cent) and provision remains adequate. NPLs in
ly by 7.28 per cent in FY17, outperforming the average SCBs increased to 29.3 per cent in September 2017,
growth of 4.7 per cent for emerging market and devel- reflecting a weaker provisioning. The overall net NPL
oping economies in 2017. Despite some challenges went up by 0.3 percentage points during this quarter.
stemming from flood-related crop losses in the begin- Capital to Risk Weighted Asset Ratio (CRAR) for private
ning of the fiscal year, economic activities remain buoy- commercial banks remains well capitalized and stable in
ant in FY18, underpinned by both domestic and exter- Sep’17. Capital position of SCBs has declined modestly
nal demand. due to higher NPLs. The overall capital position of bank-
ing system has remained stable at end-September 2017.
In FY2016-17 satisfactory growth has been achieved in
revenue receipts. Attaining 91.89 per cent of the revised Private sector credit growth has continued its upward
target, total revenue receipt in FY2016-17 increased by trend in recent years. But deposit growth has moderat-
16.09 per cent to Tk.2,007,850 million over the previous ed reflecting the large subscription of national saving
year outturn. certificates. At the end of September 2017, credit
growth (17.9%) has exceeded deposit growth (10.8%),
In FY2016-17 the country's total exports amounted to led by private commercial banks. Nevertheless, overall
US$34,846.84 million, which was 1.72 per cent higher advance deposit ratio has remained below the maxi-
than the previous year. During the same period the total mum regulatory ceiling. Liquidity condition of the bank-
value of import (c&f) stood at US$47,005.2 million, up ing system remains broadly stable in 2017. Excess
by 9.00 per cent from the previous year. liquidity, the excess of SLR as per cent of total demand
and time liabilities, has moderated in recent months.
Remittances inflow dipped to US$12,769.5 million in
FY2016-17 from the previous year’s inflow of

96
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Islamic Finance in Bangladesh Bangladesh Govt. Islamic Investment Bond (BGIIB),


With a predominantly Muslim population of 160 million introduced by the Ministry of Finance, Government of
in Bangladesh, Islamic finance has been growing faster Bangladesh in 2004, has been playing an important role
attributed to its intrinsic value, uniqueness of distinctive in developing Islamic Money Market. The unit price of
banking, and sustainability aspects. Among 57 sched- the Bond is taka 1 (one) lac having tenure of 6 (six)
uled banks working in the country, 8 full-fledged Islamic months, 1 (one) year or 2 (two) years. The Bond is treat-
banks with 1,082 branches and 15 conventional banks ed as a component of Statutory Liquidity Ratio (SLR).
with their 19 branches and 25 windows have Shariah IBBL is actively involved in buying and redeeming of the
banking operations. Moreover, some six banks are in bond. Now a 3-month bond worth at least Tk.100,000
the process of converting into full-fledged Islamic opera- are available in the market alongside the existing
tion. Most of the Islamic banks have performed better 6-month bond. The issuing banks calculate the profit or
than conventional counterparts in 2017. Market share of loss on the basis of their fixed deposit rates as per
the Islamic banks in deposit increased to 22.79 per cent Islamic banking rules instead of the earlier annual profit
and in investment to 24.22 per cent in September 2017. or loss. The bonds are sold through auction.
In addition to General Index and Blue Chips Index, both
the Stock Markets (Dhaka Stock Exchange and Islamic Banks Consultative Forum (IBCF)
Chittagong Stock Exchange) in Bangladesh have sepa- IBCF, with Islamic Banks and Conventional Banks
rate Shariah Index. Around one third of 293 companies having Islamic Banking Branches as members, was
listed in DSE from different sectors comprise the Shari- established in 1995 for effective interaction, coopera-
ah Index. In 2017, CSE Shariah Index has been revised tion, promotion and furthering the cause of Islamic
on the basis of the performance of the bourse listed banking in Bangladesh. Eight full-fledged Islamic Banks
companies. The new index added 31 new companies in and six Banks having Islamic banking branches are the
the list. A total of 128 companies are now in the list of members of the IBCF. In 2017, the Forum has organized
CSE Shariah Index after the revision. Takaful has been a number of seminars and symposia attended by Islam-
growing steadily in Bangladesh as a Shari’ah-based ic scholars and dignitaries from home and abroad which
segment of the financial products since its inception in contributed to building awareness among stakeholders
1999. At present 78 insurance companies are in opera- and expansion of Islamic banking.
tion of which 32 are life insurance companies and 46 are
non-life or general insurance companies. The asset of Central Shari‘ah Board for Islamic Banks
Takaful Industry has stood at around 17 per cent of the of Bangladesh (CSBIBB)
Insurance Industry in Bangladesh. Out of 34 mutual CSBIBB was established in 2001 to offer Shari‘ah
fund listed with both the Dhaka Stock Exchange and the opinion and assistance to member banks in matters
Chittagong Stock Exchange, 4 are Islamic financial related to harmonization of Islamic banking policies and
institutions. Market capitalization of those funds stood practices. It also promotes knowledge on Islamic Bank-
at around 8 per cent of the total mutual fund market. ing by organizing seminars and conducting training and
research on Islamic Shari‘ah issues. CSBIBB Members
In order to mitigate liquidity crisis of Shari’ah based include seven full-fledged Islamic Banks, eight conven-
banks and financial institutions and for their better man- tional banks having Islamic banking branches, five
agement, Bangladesh Bank introduced Islami Interbank conventional banks having Islamic banking windows
Fund Market (IIFM) in 2012. Under this arrangement, an and one non-bank financial institution. In 2017, the
interested Islamic financial institution can place their Board has organized a number of trainings, workshops,
surplus fund overnight at Bangladesh Bank. Islamic and capacity building programs for Islamic banking
banks and banks having Islamic banking branches and practitioners of the country.
windows may borrow from this fund overnight. Howev-
er, this mechanism is yet to make any breakthrough in
Islamic money market.

97
Islami Bank Bangladesh Limited
Annual 2017
Board of Directors Report
Report

Corporate Profile

Donation to Prime Minister’s Relief Fund

Islami Bank Bangladesh Limited (IBBL) is the pioneer of dream of the people of Bangladesh for conducting their
Islamic Banking in Bangladesh. It was incorporated on banking transactions in accordance with the spirit of
March 13, 1983 as the First Islamic Bank in the Islam.
South-east Asia. IBBL is a Joint Venture Public Limited
Company engaged in commercial banking business IBBL started its function informally on 30 March, 1983.
based on Islamic Shari'ah with 46% of foreign share- The formal inauguration was made on August 12, 1983
holding including Islamic Development Bank (IDB) and and the first branch, Local Office located at 75 Motijheel,
54% local shareholder. It has the largest branch network Dhaka started its full fledged banking operations since
among the Private Sector Banks in Bangladesh. then. IBBL, the highest tax payer & largest private sector
Since inception, Islami Bank Bangladesh Limited has bank in Bangladesh has been enlisted among top thou-
been rendering its banking services by offering diversi- sand banks of the world since 2012, positioning 941st
fied and a wide range of deposit, investment & foreign latest by 2017.
exchange products coupled with technology based
banking devices, which have successfully earned a After passing a long journey of continuous success and
huge clientele base. glory in almost all business indicators, the bank is now
running with Authorized Capital of Tk.20,000 million and
As a true reflection of the inner urge of the people of the Paid up Capital of Tk.16099.91 million. The Corporate
country and to conduct all banking & investment activi- Headquarter of the Bank is located at 40, Dilkusha
ties based on Islamic Shari’ah, IBBL unveiled a new Commercial Area, Dhaka.
horizon and ushered towards realizing a long cherished

98
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Multi-purpose Bank:
IBBL is not purely a commercial bank but a universal or
No. of Employee : 13,760
01 multi-purpose Bank. It is sort of crossbreed of commer-
cial and investment banks, investment trusts and invest-
ment management institutions which would offer a
No. of Branch : 332 variety of services to the customers. Its equity oriented
02 investments don’t allow borrowing short term fund and
lending to long term investments which make it less
crisis-prone compared to conventional banks.
No. of Sheba Ghor : 52
03 Careful Evaluation of Investment Demand:
IBBL is very careful towards evaluation of applications
for equity financing. Generally, the conventional banks
Total Equity : Tk.57,958.08 million make lending after taking collateral to avoid risk as
04 much as possible and don’t bother to go beyond ensur-
ing the security of their principal and interest receipt. But
since Islami Bank has a built-in mechanism of risk
Paid up Capital : Tk.16099.91 million sharing, it cautiously evaluates every financing request.
05
Mass Banking:
For making banking facilities available for maximum
Unique Features: number of people IBBL has been providing mass bank-
Abolition of interest (Riba):
ing instead of class banking. Around 1/5th of our total
Since Riba is prohibited in the Holy Quran, the first
manpower is engaged to serve about 3% of the total
unique / distinguishing feature of IBBL is that its
investment under Rural Development Scheme (RDS).
business functions/operations are completely free of
interest.
Need-based Banking:
In line with following need prioritization in financing, IBBL
Welfare-oriented Banking:
does not work to fulfill the need of few people rather
IBBL started its operation to introduce a welfare-orient-
focuses on the requirement of the real needs of the
ed banking ensuring equity and justice in all of its activi-
common people. Thus, IBBL strives to substitute the
ties. Unlike conventional financial institution, profit or
‘Greed-based Banking’ through establishing
wealth maximization has never been among the prime
‘Need-based Banking’.
objectives of IBBL. We extend our services to individu-
als of all walks of life with strong commitment in
Special Investment Scheme:
advancement and uplifting economically backward
To uplift the socio-economic status of general people,
segments. In other words, IBBL has showed utmost
IBBL has launched several special investment schemes.
adherence to public interest.
The supervision cost of these investments is high which
makes our income lesser compared with other market
Shari’ah Compliance:
participants.
Being a Shariah Compliant Bank, all of our banking
activities are run complying with Shariah principles.
Socially and Environmentally Desirable
Investments:
Focus on ‘Maqasid-al-Shari’ah:
IBBL, by virtue of its adherence to Shari‘ah and its com-
IBBL does not only ensure shari’ah compliance but also
mitment to ensure welfare, does not invest in socially
focuses on Makasid-al-Shari’ah in all of its operational
and environmentally undesirable projects even though
portfolios.
the projects seem to be financially viable and profitable.

99
Islami Bank Bangladesh Limited
Annual 2017
Board of Directors Report
Report

Widening Network to Address Unbanked tion with highest number of rural branches (119 branch-
Population: es) among all the first generation private commercial
IBBL is continuously pursuing for widening its network banks.
by maximizing the opening of new branches to reach
the unbanked and underserved segment of population Moreover, all of our branches are connected through a
of the country. nationwide intranet network to facilitate Online Banking
Services.
Financial Inclusion and Sustainable
Development:
Since its journey, IBBL has been working relentlessly
towards overall development by ensuring financial inclu-
sion, sustainable & inclusive growth as well as
socio-economic development of the country through
introduction of modern & welfare oriented banking prod-
ucts & services including financial literacy programs. Expansion of Branch network:
Catalyst of Development:
Profit and loss sharing is a distinctive characteristic of 332
IBBL which enabled foster closer relations between 318
banks and entrepreneurs. It helps develop financial
304
expertise in non-financial firms and also enables IBBL to
assume the role of technical consultant and financial 251
adviser. Such role of IBBL acts as the catalyst of indus- 169
trialization and development in the country.
116

Network: 90
As a Bank of the mass people, IBBL delivers its banking 49
services to the highest possible number of customers. 13
IBBL is enriched with a vast banking network across the
country by setting up its branches all over the country.
1985 1990 1995 2000 2005 2010 2015 2016 2017

Moreover, Alternative Delivery Channels (ADC) of the


Bank having 562 owned & more than 9,000 shared ATM
booths, 126 IDM, 52 Sheba Ghars & 30 Agent Banking
Outlets have expanded this network up to the doorstep
of the customers.

As a part of gradual expansion of its coverage to the


important commercial places both in urban & rural
areas, during 2017 the Bank has successfully opened
30 Agent Banking Outlets & 14 new branches raising
the total number of branches to 332 from 318 of the
previous year.

Aiming to achieve a balanced development of the coun-


try as well as to uplift the socio economic conditions at
rural areas, IBBL has been conducting banking opera-

*Excluding temporary manpower

100
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Subsidiary Companies ment for clients, Managing Portfolio Investment of any


Islami Bank Securities Limited (IBSL) person or Company by making profitable Investment in
Islami Bank Securities Limited (IBSL) - a subsidiary various avenues etc.
company of Islami Bank Bangladesh Limited - was
incorporated in March 22, 2010 as a Public Limited IBBL Exchange Singapore Pte. Ltd
Company under Companies’ Act, 1994. Authorized IBBL Exchange Singapore Pte. Ltd. has been corporat-
capital and Paid-up capital of the company is ed in Singapore, as a subsidiary of Islami Bank Bangla-
Tk.5,000.00 million and Tk.2,700.00 million respectively. desh Limited for remittance services and things inciden-
IBSL is one of the largest and leading corporate entities tal thereto under the Companies Act, CAP.50 of the
operating in Bangladesh capital market with a view to Republic of Singapore. Till 31 December 2017, no share
carry out business of Stock Broker and Stock Dealer capital of the subsidiary has been paid by its parent
based on Shariah principle. IBSL is involved in invest- company i.e. Islami Bank Bangladesh Limited. There-
ment activities in capital market, besides providing fore, the financial statement of IBBL Exchange Singa-
trading facilities to customers. Moreover, the company pore Pte. Ltd. has not been consolidated with that of the
provides investment facility to its Customers under parent i.e. IBBL.
Musharaka mode as per Margin Rules 1999, Bangla-
desh Securities & Exchange Commission (BSEC) and in Offshore Banking Units
compliance with Shariah Principle. The operations of Off-shore Banking Units (OBU) of the
Bank were commenced on January 4, 2011 as per the
IBSL provides the following services: approval of Bangladesh Bank. The Off-Shore Banking
Trading facilities through Dhaka Stock Exchange and Units (OBU) of the Bank are located at
Chittagong Stock Exchange Head Office Complex Branch, Dhaka
Open BO Account at nominal fee from anywhere Uttara Branch, Dhaka and
home and abroad Agrabad Branch, Chittagong.
 Competitive commission to buy and sale shares
i-Trading facilities from anywhere home and abroad National Membership
Easy IPO participation from home a. Bangladesh Institute of Bank Management (BIBM)
Fund transfer through BEFTN/i-banking. b. The Institute of Bankers Bangladesh (IBB)
Customer service through email/SMS/Phone/Fax, etc. c. Bangladesh Association of Banks(BAB)
Demat and Remat facilities of shares d. Bangladesh Foreign Exchange Dealers’ Association
Full service DP facilities (BAFEDA)
Share transfer facility through link account e. Bangladesh Association of Public Listed Companies
Special service for Non-Resident Bangladeshis (NRBs) (BAPLC)
f. Central Shari’ah Board for Islamic Banks in Bangla
Islami Bank Capital Management Limited desh (CSBIBB)
(IBCML) g. Islamic Banks Consultative Forum (IBCF)
IBCML was incorporated on the 01 April 2010 under h. Dhaka Chamber of Commerce & Industry (DCCI)
the Companies Act 1994 as a Public Limited Company i. Dhaka Stock Exchange Limited (DSE)
with Authorized Capital of Tk. 1,000.00 Million & Paid j. Federation of Bangladesh Chambers of Commerce
Up Capital of Tk. 300.00 Million divided by 3,00,000 and Industry (FBCCI)
(three lac) shares of Tk. 1000/- each. k. Bangladesh Chamber of Industries (BCI)

The main objectives of the company are to carry out the International Membership
business of a Merchant Banking in all its aspects includ- a. Accounting and Auditing Organizations for Islamic
ing Underwriting and/or Management of Issue, Public Financial Institutions (AAOIFI), Manama, Bahrain and
offer of Shares, Stocks, Debentures, Bonds etc. sale or has become member of its Board of Trustees.
purchase of Securities or transfer thereof Fund Manage- b. Islamic Financial Services Board (IFSB), Kuala

101
Islami Bank Bangladesh Limited
Annual 2017
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Lumpur, Malaysia. IBBL’s Equity Investment


c. General Council for Islamic Banks and Financial a. Central Depository Bangladesh Limited (CDBL)
Institutions (CIBAFI), Manama, Bahrain b. Karmasangsthan Bank (Employment Bank)
d. International Islamic Financial Market (IIFM) c. Bangladesh Shipping Corporation (BSC)
Manama, Bahrain d. Bangladesh Aroma Tea Ltd.
e. International Islamic Centre for Reconciliation and e. Financial Institutions and Investors Portfolio Management
Arbitration (IICRA) Company Ltd.
f. International Chamber of Commerce Bangladesh f. Mudaraba Subordinated Debt of First Security Islami
Limited (ICC-Bangladesh) Bank Ltd.
g. American Chamber of Commerce in Bangladesh
(AmCham)

Financial Review
Competitive Positioning and Strategic Quality differentiation: IBBL belongs to among the top
Response quality of service providers; as such there are few banks
Operating in the financial services industry, IBBL is comparable in terms of service quality;
exposed to several risks both internally as well as exter-
nally, some of which are beyond its control. However, in Customer loyalty: Historically, customers of IBBL are
line with more than three decades of rich experience, reasonably loyal. However, strong bondage with the
we have witnessed several industry cycles and hence clientele base has been established through frequent
has developed and fine-tuned a risk identification and client get-together and addressing the client’s specific
mitigation framework that protects us from adverse need to minimize such risk.
risks, enhances operating viability and ensures the
sustainability of our business. Threat of new entrants
A number of new banks has already entered in the finan-
We have provided a detailed analysis of the competitive cial services industry over the last couple of years. The
intensity we face. While operating in Bangladesh’s possibility of new entrants, intensifying competition
dynamic financial services industry, we are responsive further, cannot be ruled out although the new entrants
to minimize the impact of these risks on our business will less likely to affect the operation of IBBL in view of
model, to the extent possible. the strong market image and branding.

Competitive Contention Sensitivity of clients


Number of competitors: The Bangladeshi banking Customers typically enjoys a high power in the equation
industry is marked by high levels of competition with as since big corporates tend to be extremely rate sensitive.
many as 57 banks working in the industry. However, The issue is being addressed by customized handling
due to our strategic positioning of differentiation in the as well as relationship with the clients. The bank is also
industry we have already created a strong market focusing on SME clients to gradually reduce dependen-
position, which has made us immense from adverse cy on large investment clients.
market competition.
Threat of substitute products
Switching cost: The switching cost is low due to a high Low threat is prevailing within the banking industry in
concentration of service providers. The risk is mitigated terms of substitute products. However in some
by strong bondage with clients as well as providing wide segments, there exists a high threat of substitute prod-
variety of products and services. ucts. The issue is handled by continuous research and
development on new and innovative product line.

102
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Business Model of IBBL


IBBL is a matured bank with more than three decades A strong IT infrastructure also results in enhancing
of operation. The bank’s business model has been transparency, helps detect bad accounts early and
structured around meeting customer needs both on the also enables environmental preservation through the
investment and deposit front and meeting their growth optimized use of paper etc.
expectations on the basis of trust and respect.
Product and Business Exposure
The Bank has consistently created value for its stake- The Bank offers a wide range of investment products
holders. Leading the critical anchors of fostering the across corporate and SME clients and for retail
sense of governance and transparency, IBBL presents customers that enable it to meet the tailor-made
integrated reporting of its business model that include requirements of the clients.
inputs, business activities, outputs and outcomes. A  On the deposit side, IBBL offers a wide range of long
brief description of each of these is delineated below: and medium term savings products that enables it to
meet the financial security and liquidity goals of
Inputs consumers.
IBBL enjoys 35 years of experience in the banking  IBBL also operates two wholly-owned subsidiaries
business. (Islami Bank Capital Management Ltd. and Islami
During this long journey, the bank has witnessed Bank Securities Ltd.) that offers a vast range of
several market cycles and created a business model capital market products and solutions.
that is not only resilient but also risk absorbent.
 The Bank’s dedicated human resources base is Business Activities
reflected in the very low turnover rate of its employees. IBBL Group provides financial solutions as a Bank and
capital market solutions through its subsidiaries. IBBL
Resources as a Bank, offers investments across its well-structured
One of the bank’s significant competitive advantages and functional divisions:
comprises of its robust and dedicated human
resource pool. Corporate Investment Division-I: This segment offers
Total human resources of the Bank stood at 13,760 investment to a large number of corporate customers
as on 31.12.2017. across Bangladesh in a variety of industries and sectors.
Constant productivity enhancement programs have The typical investment size categorized under this
resulted in a better output from employees. Continu division is above Taka 1,000 million.
ous training both at home and abroad has excelled
the professional excellence of the human resources Corporate Investment Division-II: It deals with invest-
base of the Bank. ment ranging from Tk. 150 million to Tk. 1,000 million.
The Bank possesses an experienced management
team that is continually appraising and analyzing key SME Investment Division-I: IBBL is the country’s
trends of business. largest SME investment Bank. SME-I deals with invest-
ment size of Tk. 50 million to Tk. 150 million.
Financial Capital
The Bank enjoys a healthy CRR and SLR that are SME Investment Division-II: It deals with investment
much above the limits stipulated by the Bangladesh Bank. below Tk. 50 million.
It has strong eligible capital to address the risk of the Bank.
Retail Consumer & Real Estate Investment Division:
Information Technology The Bank offers retail and consumer financing under this
IBBL possesses a robust in-house IT backbone that segment, thereby meeting the lifestyle requirements of
enhances business sustainability in terms of facilitat its customers.
ing quick decision making.

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Islami Bank Bangladesh Limited
Annual 2017
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Inauguration of Singra Branch

Capital markets: Islami Bank Securities Limited (IBSL) Deposit base have grown by 10.81% in 2017 from
is a fully-owned subsidiary engaged in providing broker- 2016.
age, merchant banking and a wide range of capital
General Investment increased by 15.30% in 2017
market services.
from that of previous year.

Innovation Classified investment to general investment reduced


Towards providing the financial solutions, IBBL nurtures to 3.59% in 2017 from 3.83% in 2016.
its spirit of innovation through its three integral pillars-
People, Product and Processes. IBBL’s unique process External Factors
of recruitment helps to ensure diverse blending of Though we have created an operating model based on
human resource base to serve diverse group of stake- our previous experience, some of the key external
holders. Requirement of clients help to develop required factors that influence our business include the following:
product based on which process is developed.
Prevailing interest/profit rate regime, especially
Outputs governed by policy rates as stipulated by the
The Bank possesses a considerable product line Bangladesh Bank from time to time.
described later in the report.
Political upheavals that impact economic and
consumption demand.
Outcomes
Some of the company’s key financial and non-financial Slowdown in the economy, measured by the Gross
outcomes include the following: Domestic Product (GDP), that might lead to deceler
ation and push back in the investment plans of
Total assets have grown by 12.82% in 2017 from
corporates and other businesses.
2016.

104
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

A general decline in the risk-taking appetite of the customers, by being fair among our competitors and by
country, impacting its entrepreneurial capabilities. being true to our shareholders by contributing to value
creation in their hands.
In summation, at IBBL, our business model is
anchored on the following areas: Business Review
Welfare orientation
IBBL successfully mobilized Tk.755,022 million Deposit
Diversification focused from 10,811,812 Depositors and deployed Tk. 710,729
Financial inclusion driven both in deposit and investment million as General Investment into 806,358 accounts up
to 31st December 2017. In the year 2017, total income
Risk mitigation of the Bank was Tk. 66,939 million and total Expenditure
Customer focused was Tk. 50,134 million resulting in pre-tax profit of
Tk.12,113 million showing 17.61% growth in 2017 as
Balanced and consolidated growth
against 13% growth in 2016. The Board of Directors of
Technologically proactive the Bank has recommended 10% cash Dividend to the
Financially well-capitalized shareholders for the year 2017.

Highly compliant
Environmental friendly
Fresh Deposit: Tk. 73,670 million
IBBL’s sustainable value creation process
With a vision that is anchored on the sustainability of our
01 Growth: 10.81 %

business enterprise, we uphold the highest regard to


our entire stakeholder ecosystem by being honest and
Fresh Investment: Tk. 94,310 million
open to our employees, by being reasonable to our
02 Growth: 15.30 %

Total Income: Tk. 66,939 million


Total Expenditure: Tk. 50,134 million
03 Pre-tax Profit: Tk. 12,113 million

105
Islami Bank Bangladesh Limited
Annual 2017
Board of Directors Report
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Bank of Crore Depositors


Total number of Depositors of IBBL increased to 10,811,812 in 2017 from 10,262,879 of the preceding year, registering
an increase of 548,933 accounts in 2017, with 5% growth over 2016.

12000000 Account Opening Trend


10000000

8000000

10,811,812
10,262,879
9,926,354
6000000

9,587,458
8,538,969

4000000

2000000

0
1 2 3 4 5

Year 2013 2014 2015 2016 2017


No. of Depositors 8,538,96 9,587,45 9,926,35 10,262,8 10,811,8
Account inreased 1,507,67 1,048,48 338,896 336,525 548,933
Growth (%) 21% 12% 4% 3% 5%

Deposit Products
Any financial institution especially a Bank can hardly prosper and compete with other banks effectively without
multidimensional and diversified products. Keeping this in view, IBBL has introduced 25 deposit products so far.
Historical trend of the deposit mobilization shows doubling its deposit base in every 4 years.

Mobilization of Deposits
In the year 2017, total deposit stood at Tk. 755,022 million as against Tk. 681,352 million of the preceding year
registering a growth of Tk.73,670 million, i.e. 10.81% growth.

Deposits Trend (million Tk.)


800000

755,022
700000
681,392
600000 615,359

500000 560,696
473,141
400000

300000

200000

100000

0
2013 2014 2015 2016 2017

106
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Deposit Mix, Growth, Final Rate & Weightage

Sl. Final Rate (%) Deposit (million Taka) Growth Deposit Mix (%)
No. Types of Deposits Weightage 2017 2016 2017 2016 % 2017 2016
1 2 3 4 5 6 7 8 9 10
A Mudaraba Deposits
1 Mudaraba Savings Account (MSA) 0.62 3.80 3.94 257,080 237,089 8.43% 34.05% 34.80%
2 Mudaraba Term Deposits (MTDR General) 233,333 201,545 15.77% 30.90% 29.58%
2.1 36 Months 1.10 6.74 6.98
2.2 24 Months 1.07 6.55 6.79
2.3 12 Months 1.05 6.43 6.67
2.4 06 Months 1.03 6.31 6.54
2.5 03 Months 1.00 6.13 6.35
2.6 01 Month 0.82 5.02 5.21
2.7 Mudaraba Term Deposits-3/6 month (Corporate)
From Tk. 50.00 million to below Tk. 500 million 1.00 7.30%
From Tk. 500.00 million and above 1.03 7.50%
3 Mudaraba Special Savings (Pension) Scheme (MSS) 112,846 106,349 6.11% 14.95% 15.61%
3.1 10 years Term 1.25 7.66 7.94
3.2 5 years Term 1.10 6.74 6.98
4 Mudaraba Monthly Profit Deposits
Scheme (MMPDS) 21,302 22,296 -4.46% 2.82% 3.27%
4.1 5 years Term 1.18 7.23 7.65
4.2 3 years Term 1.10 6.74 6.98
5 Mudaraba Savings Bond (MSB) 15,584 16,745 -6.93% 2.06% 2.46%
5.1 8 years Term 1.25 7.66 7.94
5.2 5 years Term 1.10 6.86 7.11
6 Mudaraba Special Notice Deposits (General) 0.50 3.06 3.17 9,184 8,154 12.64% 1.22% 1.20%
6.1 Mudaraba Special Notice Deposits/Tk. 50.00 Mil ion & above (Corporate) 0.50 4.50 -
7 Mudaraba Hajj Savings (MHS) 2,924 2,497 17.12% 0.39% 0.37%
7.1 Above 10 years Term 1.30 7.96 8.25
7.2 Upto 10 years Term 1.25 7.66 7.94
8 Mudaraba NRB Savings Bond 916 994 -7.88% 0.12% 0.15%
8.1 10 years Term 1.30 7.96 8.25
8.2 5 years Term 1.15 7.04 7.30
9 Mudaraba Farmers Savings (MFS) 0.75 4.59 4.76 1,041 1,024 1.67% 0.14% 0.15%
10 Mudaraba Waqf Cash Deposit 1.35 8.27 8.57 904 749 20.74% 0.12% 0.11%
(MWCD)
11 Mudaraba Muhor Savings (MMS) 606 527 15.00% 0.08% 0.08%
11.1 10 years Term 1.25 7.66 7.94
11.2 5 years Term 1.10 6.74 6.98
12 Students Mudaraba Savings (SMSA) 0.62 3.80 3.94 1,262 1,052 19.97% 0.17% 0.15%
13 Mudaraba Upahar Deposit Shceme 0.62 3.80 3.94 15 14 8.82% 0.00% 0.00%
(MUDS)
14 Mudaraba mCash Deposit Scheme 0.50 3.06 3.17 25 24 7.38% 0.00% 0.00%
15 Mudaraba Industrial Employees 0.62 3.80 3.94 16 67.46% 0.00% 0.00%
Savings 10
16 Mudaraba Foreign Currency 0.75 1.55 1.18 14,609 12,775 14.36% 1.93% 1.87%
Deposits (MFCDA)
17 Mudaraba Perpetual Bond (MPB) 1.25 8.66 8.94
B Cost Free Deposits
18 Al Wadeeah Current Account 41,392 32,247 28.36% 5.48% 4.73%
(AWCA)
19 Bills Payable 4,440 5,524 -19.62% 0.59% 0.81%
20 Cost Free Foreign Currency Deposits 11,147 21,422 -47.97% 1.48% 3.14%
21 Other Cost Free Deposits 26,395 10,316 119.82% 3.50% 1.51%
Total 755,022 681,352 10.27% 100.00% 100.00%

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Islami Bank Bangladesh Limited
Annual 2017
Board of Directors Report
Report

account stood at 14,72,322. Maximum 80% of


Deposit Mix - 2017 outstanding balance is allowed as quard after elapsing
1% Mudaraba Savings Deposit
half of the term.
2% 3%
3% 34% Mudaraba Term Deposit
11% Mudaraba Sepecial Savings Mudaraba Monthly Profit Deposit Scheme
Cost Freet Deposit (MMPDS):
Mudaraba Monthly Profit
Deposit Any individual may open account under this savings
Mudaraba Savings Bonds scheme by depositing a minimum amount of Taka
15%
Mudaraba Special Notice 1,00,000/- and multiple thereof at a time either for 3 or
Deposit
5 years. Monthly provisional profit is given to the
Other Deposit
31% account just after completion of one month from the
date of opening of the account. The profit amount is
adjusted on completion of each accounting year after
declaration of final rate of profit. Maximum 90% quard
Welfare Oriented Deposit Products are allowed against total outstanding balance in this
account.
Mudaraba Waqf Cash Deposit (MWCDA):
Mudaraba Cash Waqf provides a unique opportunity for Mudaraba Muhor Savings (MMSA):
making investment in different religious, educational and This Scheme has been designed for the people particularly
social services. IBBL plays a leading role in introducing the professionals & service holders creating an opportunity
this exclusive product. The objectives of the product are for them to save in monthly instalment basis according
solely welfare of the society. This account may be to their capability for paying muhorana to their wives as
opened with a minimum deposit of Tk. 1,000/- and the well as rectifying their marriage life and protecting the
subsequent deposit by instalments in thousand Taka or human and religious right of the women. This account
in multiple of thousand Taka. Profit of this account is can be opened for monthly instalments of Taka 500/- to
utilized for social and human welfare as per instruction 5,000/- for a period either of 5 or 10 years.
of the account holders. During 2017, we have opened
2,417 MWCD Accounts and at the end of 2017, total Mudaraba NRB Savings Bond (MNSB):
account stood at 29,477. The Non-Resident Bangladeshis (NRBs) & their family
members are eligible to purchase Mudaraba NRB
Mudaraba Hajj Savings (MHSA): Savings Bond in single or joint names. An expatriate
IBBL has introduced monthly instalment based Hajj may purchase Mudaraba NRB Saving Bond in the name
Savings Account for any Muslim. The account may be of his/her minor children as per usual terms & condition
opened for a period from 1 year to 25 years considering applicable to other deposit products. The Mudaraba
the capacity and ease of the accountholder for building NRB Savings Bond denominated Tk. 25,000/-, Tk.
up savings by monthly instalments. During the year, 50,000/-, Tk. 100,000/-, Tk. 200,000/-, Tk. 500,000/-
14,372 MHS Accounts has been opened. and Tk. 10,00,000/- for a period of 5 or 10 years are
available. Service charge, account closing fee and
Mudaraba Special Savings (Pension) account maintenance fee are not realized from this
Scheme (MSSA): account. Maximum 90% quard are allowed against total
It is a simple, attractive & unparallel scheme which outstanding balance in this account.
makes a source of income in future from monthly small
savings. A person acquires the opportunity to build up Students Mudaraba Savings (SMSA):
savings by small monthly instalments for getting an Students of any Educational Institutions are eligible to
attractive amount at the end of a specified time or a open Students Mudaraba Savings Account with
monthly amount for a specific period on the expiry of 5 minimum balance of Tk.100/-. No service charge is
years or 10 years term. The parents or legal guardians realized from this account except excise duty and tax as
are allowed to open this account jointly with a minor. per govt. policy. ATM/VISA Debit Card is free against this
The account can be opened for monthly deposits of Tk. accounts. The account may be continued as Mudaraba
100/- (for RDS) & its multiple amount up to Tk.1000/- Savings Account in their own name when the student
and Tk.1000/-& its multiple amount up-to Tk. 20,000/- becomes adult. In 2017, 25,621 SMS Accounts has
only. In 2017, a total number of 303,204 MSS Accounts been opened which makes total account to 237,180 at
have been opened and at the end of 2017, total the end of 2017.

108
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Power Plant

Mudaraba Farmers Savings (MFSA): of RMG, Leather and Footwear sector, IBBL has
This product is designed to provide banking facilities to launched Mudaraba Industry Employees Saving (MIES)
the unbanked people especially farmers. Only a genuine Account with an initial deposit of Tk.100/-. There is no
farmer can open this account by initial deposit of bar of minimum balance & no charge is realized from
Tk.10/-. Farmers, Association or Co-operative society this account except excise duty and tax as per govt.
of farmers, shall also be eligible to open Mudaraba policy. Charge free ATM/VISA Debit Card is available
Farmers Savings Account (MFSA). This MFSA may be against this account.
opened by the father/mother/legal guardian in favor of a
minor. General Investment
Total General Investment of the Bank increased to Tk.
Mudaraba Upohar Deposit 710,729 million as on 31.12.2017 from Tk. 616,419
Scheme (MUDSA): million as on 31.12.2016 showing an increase of
In our country, on many occasions like Marriage Cere- Tk.94,310 million, i.e. 15.30% growth. The trend of
mony, Aqiqa, Sunnate Khatna, even during Eid festival investment shows near doubling of the figure in 5 years.
people offer Upohar in cash or in other form. The
common practice of giving Upohar/Gift to the
bride/bridegroom or other recipients can comfortably
General Investment (million Tk.)
be served by “Mudaraba Upohar Deposit Scheme”. Any
individual may purchase Upohar Cheque of Tk.500, 800,000

Tk.1000 & Tk.5000 denomination initially under this 700,000 616,419 710,729

scheme from any branch of IBBL as well as can encash 600,000


403,195 463,475
530,195
500,000
the same from any branch of IBBL.
400,000

300,000
Mudaraba Industry Employees 200,000
Savings (MIES): 2013 2014 2015 2016 2017
In order to improve the life standards of the employees

109
Islami Bank Bangladesh Limited
Annual 2017
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Sector-wise General Investment


(Amount in million Taka)
2017 2016
Sl.
No. Sector % to Total % to Total
Amount Amount
Investment Investment
1 2 3 4 5 6
1 Industrial (Excluding SME) 258,867 36.26% 219,377 35.59%
2 Commercial 52,552 7.36% 43,873 7.12%
3 Real Estate 50,626 7.09% 47,972 7.78%
Agriculture (including investment in
4 16,944 2.37% 15,425 2.50%
Fertilizer and Agriculture Implements)
5 Transport 8,374 1.17% 7,592 1.23%
6 SME 290,869 40.75% 244,713 39.70%
7 Others 32,497 5.00% 37,467 6.08%
Total 710,729 100.00% 616,419 100.00%

Mode-wise Investment (Amount in million Taka)


2017 2016
Mode % to Total % to Total
Amount Amount
Investment Investment
1 2 3 4 5
Bai-murabaha 438,281 61.67% 382,176 62.00%
HPSM 161,985 22.79% 139,567 22.64%
Bai Muajjal 60,789 8.55% 54,387 8.82%
Bill Purchased & Negotiation 13,704 1.93% 14,204 2.30%
Quard 19,983 2.81% 14,047 2.28%
Bai- Salam 10,477 1.48% 6,436 1.05%
Mudaraba 5,000 0.70% 5,000 0.81%
Musharaka 510 0.07% 602 0.10%
Total 710,729 100.00% 530,194 100.00%

Mode Wise Investment


Bai-Murabaha

HPSM

61.67% Bai Muajjal


22.79%
Bill Purchased & Negotiation

Quard

Bai-Salam

Mudaraba
8.55%
1.93%
0.07%

2.81%

Musharaka
1.48%
0.70%

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Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Garments Factory

The Five Year Business Plan (2017–2021) of the bank is early stage of the Industry. The bank also financed in the
under implementation. The investment plan has been backward linkage industries. It is mentioning here that,
formulated keeping in view the national economic most of the leading export-oriented garment industries
priorities and diversification of the Investment portfolios of the country initially started their business taking small
by size, sector, geographical area, economic purpose, size investment from IBBL. Gradually they have
securities, administrative divisions and modes. developed their industries into a large one. The
outstanding balance of this sector is 9.80% of total
Investment in Industrial Sector Industry as on 31.12.2017, which was 8.25% on
Industrial development of the country falls under the 31.12.2016.
priority areas of IBBL. The Bank has considerable
amount of investment in the industrial sector. Total Textile
investment for projects finance together with Working A good number of spinning mills, weaving mills, dyeing
Capital stood at Tk.258,867 million as on 31.12.2017 finishing mills of textile sector has been set-up with IBBL
as against Tk. 219,377 million as on 31.12.2016. The Investment. Most of these mills are set-up with brand
Bank has deployed 36.42% of its total investment in new state of the art machines. This contributes
industrial sector out of which export oriented textile and immensely toward value addition in RMG. The outstand-
garment industries. ing balance of this sector is 31.23% of total Industry as
on 31.12.2017, which was 30.30% on 31.12.2016.
Garments
IBBL ventured in financing garment industries in the

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Spinning Mill

Housing name and style “Solar Panel Investment Scheme” has


IBBL has extended investment facility to 21,500 clients been introduced.
by Tk. 50,626 million at individual level and developer
companies which is 7.09% of total investment as on Transport
31.12.2017. At the close of 2016 outstanding in To develop the transport sector, IBBL has disbursed
Housing Investment was Tk.47,972 million which was substantial amount of investment in road, water and air
7.78% of total investment. transport to 1,087 clients and there against present
balance of investment is Tk. 8,374 million which is the
Agro-Based highest among all nationalized and private commercial
For qualitative improvement of agricultural sector and banks of Bangladesh. The investment contributes
procurement of logistics including raw materials for the 1.17% of the bank’s investment. Besides, IBBL financed
agro-based industry, IBBL extended finance to ventures 67 filling/CNG stations.
like Automatic Rice Mills, Flour Mills, Edible Oil Mills,
Jute Mills, Fishery, Poultry & Dairy, Salt, Sugar, Food and Information Technology
Beverage, Cold Storage, Fertilizer, Oil and Electricity IBBL has so far extended investment facilities amounting
from Rice Bran etc. IBBL financed Tk. 97,241 million in to Tk.278 million to 120 clients for producing and
agro-based industries in 2017 which is 13.68% of total Industry. procuring hardware & software. IBBL is also working on
developing new entrepreneurs with innovative ideas to
Electricity & Power go for big investments in this sector.
IBBL has financed 33 power plants of Tk.3,406 million.
The bank has also financed Tk.7,450 million for the Pharmaceuticals & Health Care
production of electric instruments. Moreover, 1,200 To boost up the Pharmaceutical industry, the bank
clients availed investment of Tk.4,044 million for invested Tk. 6,643 million in the country wide among 22
purchasing and procuring electronics goods. Apart from beneficiaries. Besides 129 industries among Hospital,
power plants and electrical goods, we are also working Clinic, Pathological Center have been established by the
on solar power and an investment scheme under the bank finance of Tk.5,239 million.

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Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
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Pharamaceuticals Industry

SME Investments Microfinance, Small and Medium Enterprise that can


Small and Medium Enterprises (SMEs) are the pivotal play in building the nation. By way of illustration, in 2017,
business concerns for the economic and social IBBL disbursed SME investment of Tk. 336,480 million,
developments of any country. As labor intensive 4.41% more than the previous year. During the year,
industry, Cottage, Micro, Small and Medium approximately 8,800 new SME entrepreneurs were
Entrepreneurs (CMSME) are significantly contributing in added to the portfolio. IBBL is holding highest position
creating employment and generating income. They are in financing SMEs among the Banks/FIs in the country
the major driving forces for economic growth both in having 18% market share. At present SME Investment
rural and urban areas in Bangladesh. Since inception, of IBBL creates about more than one million employments
IBBL is relentlessly working for the betterment of the in the country. To expand the unexplored SME Market,
CMSME sector of the country. IBBL has a well-organized IBBL is continuously improving efficiency standards.
and fully functional SME Division equipped with
resourceful manpower and is actively supporting this
industry through its widespread network all over the
country. Based on the requirements of the entrepreneurs, SME Portfolio
both existing and new, IBBL presents innovative products
and services to meet the emerging financial needs of
Disbursement Tk . 336,480 million
the client.
Growth: 4.41%
New Client: 8,800
We feel that a little straight line eventually makes a big
Market Share: 18%
net. Along with Corporate Banking, IBBL always prefer
% of total investment: 40.75
to walk in different avenues keeping in mind the concurrent
socioeconomic development. IBBL value the role of

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Islami Bank Bangladesh Limited
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Ceramic Industry

Women Entrepreneurs Investment developing CMSMEs and has disbursed Tk.12,600


Scheme (WEIS) million in 40 clusters among 8,000 clients in the year
In line with Bangladesh Bank’s guidelines, IBBL has 2017.
started Women Entrepreneur Development Unit (WEDU)
for functioning to deal with the affairs of Women Entrepreneurs. Besides, IBBL provides various Non-Financial Services
Besides this, women entrepreneurs are properly (NFS) to the SMEs. IBBL participates/sponsors in
addressed by IBBL with the diversified investment various meetings, seminars, symposiums, fairs for
scheme named Women Entrepreneur Investment developing SMEs. During this year IBBL participated
Scheme (WEIS). Women Entrepreneurs can enjoy this and organized the following programs:
scheme at a low rate i.e. @ 10% only up to the ceiling of
4.00 million and collateral free investment facility up to Participation in developing SME/CMSMEs:
Tk. 0.50 million. Most of our Branches have disbursed SME Investment Division Participate in various meetings,
minimum 01(one) fresh women entrepreneur to follow seminars, symposiums, fairs for developing CMSMEs.
Bangladesh Bank’s guidelines. In 2017, IBBL has During the year-2017 we have participated in the following
disbursed investment of Tk. 8,490 million and present programs:
outstanding is Tk. 9,090 million among nearly 3,200 Banker- Entrepreneur exchange views & Open
clients. loan/Investment distribution meeting held at Jessore.

Cluster based Investment Approach: Banker- Entrepreneur exchange views & Open
Bangladesh Bank has urged all Banks and NBFIs to loan/Investment distribution meeting held at
adopt a cluster-based approach for financing small and Chittagong.
medium Enterprise (SMEs). IBBL is an active participant Banker- Entrepreneur exchange views & Open
in these sectors and considers that a cluster-based loan/Investment distribution meeting held at Gopalganj.
approach may be more beneficial in dealing with
Participated with IBBL woman entrepreneurs and
well-defined and acknowledge groups. As such IBBL
disbursed one woman in “Women Entrepreneurs
has given importance in Cluster Approach Method for
Conference & Product Exhibition 2017” organized by

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2017 Annual
Report

Shoe Factory

Bangladesh Bank at Bangladesh Mohila Somittee, Year wise IBBL SME Investment
Baily Road, Dhaka on 6 to 11 March-2017.
Participated to find out the problems & remedy for Year wise SME Investment (million Tk.)
350,000
establish Agro based Pineapple Industry produced 303,430
300,000 257,070
at Madhupur in Tangail on 27.04.2017 as lead bank. 250,000 229,950
173,660
Banker- Entrepreneur exchange views & Open 200,000 108,670
150,000 49,337
loan/Investment distribution meeting held at Dinajpur 100,000
22,614

on 04.05.2017 as lead bank. 50,000


 Banker- Entrepreneur exchange views & Open -
2007 2009 2011 2013 2015 2016 2017
loan/Investment distribution meeting held at Kishor
gaonj on 08.07.2017 as lead bank.
Banker- Entrepreneur exchange views & Open IBBL’s SME Exposure to National SME Exposure
loan/Investment distribution meeting held at Noakh
ali on 23.07.2017 as lead bank. IBBL’s SME Exposure to National SME Exposure

Banker- Entrepreneur exchange views & Open


loan/Investment distribution meeting at held at
Comilla on 13.08.2017.
Banker- Entrepreneur exchange views & Open IBBL-18%
loan/Investment distribution meeting at held at
Faridpur on 21.09.2017.
 Banker- Entrepreneur exchange views & Open
National-82%
loan/Investment distribution meeting at held at (Other than IBBL)
Barisal on 25.10.2017 as lead bank.
Banker- Entrepreneur exchange views & Open
loan/Investment distribution meeting at held at
Rajshahi on 11.01.2018 as lead bank.

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Islami Bank Bangladesh Limited
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Re-rolling Mill

CMSME sector plays a noteworthy role in generating Welfare Oriented Investment Schemes
growth and creating employment in a country. The In addition to the usual investment operations, IBBL has
traditional Banks were not keen to provide any investment 16 Special Investment Schemes for different groups of
to this sector. At a time when it was almost impossible people. The schemes as part of bank’s welfare mission
for the SME entrepreneurs to get investment from the aim at fulfilling finance needs of different segments of
banking sector in Bangladesh, IBBL stepped forward to people particularly the under privileged downtrodden
help those unprivileged, unbanked SME entrepreneurs and neglected section of population of the country. To
and continues to provide financial support to them. In improve the living standard of these people some
IBBL, it is playing pivotal role reducing provision (0.25% welfare oriented special investment schemes as under
only in SME instead of 1.00% of General Investment), have been undertaken:
risk weighted assets (75% risk on below Tk.3.00
million), investment diversification, risk mitigation and
employment generation.

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TV Manufacturing Industry

Scheme-wise Investment
(Amount in million Taka)
Sl. No. Name of Scheme 2017 2016 2015 2014 2013
1 2 3 4 5 6 7
i. Rural Development Scheme (RDS) 28,433 24,477 20,799 17,380 13,731
ii. House-hold Durables Scheme 2,122 1,755 1,545 1392 1,048
iii. Investment Scheme for Doctors 35 49 58 55 37
iv. Transport Investment Scheme 8,775 7,962 7,207 6832 7,057
v. Car Investment Scheme 201 212 124 69 75
vi. Small Business Investment Scheme (SBIS) 4,995 4,515 4,094 3817 3,202
vii. Micro-Industries Investment Scheme 9 18 54 22 29
viii. Agricultural Implements Investment Scheme 6,002 4,330 2,929 882 337
ix. Housing Investment Scheme 107 135 166 209 261
x. Housing Investment Program (HIP) 24,724 24,184 23,250 20,780 15,903
xi. Palli Griha Nirman Beniyog Prakalpa (PGNBP) 3,292 3,441 3,260 2,717 2,059
Sub-total 78,695 71,078 63486 54,155 43,739
Total Investment 710,729 616,419 530,194 463,475 403,195
% to total Investment 11.07% 11.53% 11.97% 11.68% 10.85%

Household Durable Investment Scheme investments under this financing scheme.


Low-income people in diverse profession with limited
income are benefited by this scheme. They can Housing Investment Program
purchase household requirement like Refrigerator, TV, Housing Investment plays a vital role in improving
Motor-cycle, Furniture, Ornaments, Computer etc. at standard of living, empowering the middle-income and

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Islami Bank Bangladesh Limited
Annual 2017
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Auto Rice Mill

lower-income groups and thereby promoting equitable Investment Scheme for Doctors
growth in the society. The Scheme not only caters to The scheme has been offered for fresh medical graduates
fulfilling one of the basic needs i.e. shelter but also have intending to set up medical centers. IBBL comes
significant impact on the lives of the dwellers in terms of forward with finance to help procure medical equipment
skills enhancement, income generation, increased or to set up diagnostic laboratory, pharmacy, clinic etc.
security, health, self-confidence and human dignity.
Small Business Investment Scheme
Transport Investment Scheme To give a boost to the small businesspersons and
IBBL has introduced Transport Investment Scheme to entrepreneurs, the Bank has launched the scheme and
improve the existing transportation problem and to it is contributing a lot to generate income and employment
ensure speedy economic growth and development of as well as to develop the standard of life of different
the country IBBL financed Tk. 8,775 million to this segment of low-income people. The Bank provides
sector particularly through expansion of trade, finance of Tk 4,995 million to this sector particularly
commerce and industry. different types of agricultural instruments, equipment for
operating small trade and finance, small shop, light
Car Investment Scheme transport, machinery for small and cottage industry etc.
IBBL has designed the scheme for the mid and high under this scheme.
ranking officials of the government and semi-government
organizations, corporations, executives and directors of Agricultural Implements Investment
big business houses and companies and for persons of Scheme
different professionals groups on easy payment terms The Bank has introduced this scheme keeping in view
and conditions.
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Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Cottage Industry empowering rural women

the people-orientation and welfare objectives of the autonomous institutions, non-resident Bangladeshis
Bank. Under the scheme, power tillers, power pumps, and businesspersons are preferred for this investment.
shallow tube-wells, thresher machines etc. are provided
on easy terms to the unemployed rural youths for Women Entrepreneurs Investment Scheme
self-employment and to farmers to help them augment Islami Bank has always given priority for developing the
production in the agriculture sector. women entrepreneurs. Under 'Women Entrepreneurs
Investment Scheme (WEIS)' IBBL offers lower rate of
Micro-Industries Investment Scheme return i.e. 10% only and collateral free investment up to
Micro Industries investment Scheme aims at creating a Tk.0.50 million with some other flexible terms & conditions
wider base for industries and to encourage establishment to the women entrepreneurs. Up to December 2017,
of micro-industries in different areas of the country by IBBL disbursed Tk. 16,081 million favoring the women
the potential entrepreneurs and to diversify the Bank’s entrepreneurs.
investment portfolio.
NRB Investment Scheme
Rural Housing Investment Scheme IBBL has launched NRB Entrepreneurs Scheme for
To extend housing facility to the rural people living within promoting investment among non-resident Bangladeshi
10 kilometers area of an IBBL branch a scheme named and for encouraging them to remit money through banking
“Palli Griha Nirman Biniyog Prakalpa” has been channel. Expatriates aged between 18 to 60 years or
introduced. Service holders at public, semi-public or their family members who maintain accounts with IBBL
for remitting money are eligible for the investment.

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Cluster Investment Scheme launched a new investment product in the name of


With a view to bringing the unbanked people under Work Order Financing Scheme. Sometimes Bills are not
banking net, fulfilling the function of financial inclusion, released on time, some projects may fail for shortage of
familiarizing welfare activities of the Bank, responding fund allotment. This specialized investment scheme is
timely to changing economic landscape and consolidating used for contractor to mitigate this problem.
the brand image of IBBL as small entrepreneur friendly
bank, IBBL has launched a new investment product in Light Engineering Investment Scheme:
the name & title of "Cluster Investment Scheme". Cluster With a view to penetrating new potential markets,
is a concentration of interrelated industries in a particular diversifying investment for achieving balanced growth
geographical location. In particular, many industries of and sustainable development, expanding bank's
Bangladesh are recognized as models for clusters, scopes for deploying fund in unexplored avenues and
these include automobile parts, jewellery, furniture, shoe after all ensuring technological advancement and
making etc. economic development, IBBL has launched this new
investment product.
Freelancer Investment Scheme:
To promote IT sector of the country, to ensure more Micro-investment activities
employment of the educated young generation and to Islami Bank Bangladesh Limited launched its microfinance
facilitate the sustainable economic development of the program for the rural poor under the name and style of
country, bank has launched a new IT based investment “Rural Development Scheme (RDS)” in the year 1995 to
product namely Freelancer Investment Scheme. address the needs of investment of the agriculture and
rural sector. This is to create opportunity for employment
Rural Transport Investment Scheme' (RTIS) generation and raising income of the rural people with a
This scheme has been launched to develop entrepreneurship view to reduce poverty. In the meantime RDS activities
from low income group e.g. Rickshaw Pullers, Drivers of are being operated in 247 branches of the Bank.
Three Wheeler Auto & Tempo (CNG/Diesel), Mini
Pick-up Van. To supply adequate rural transport, to The Bank launched another microfinance program
mitigate the shortage of transport, IBBL has launched namely “Urban Poor Development Scheme (UPDS)” in
this investment transport based product. May 2012 for extending micro-investment facilities
among the urban poor. At present, the Scheme is being
Work Order Financing Scheme: operated through 24 urban branches under Dhaka,
In order to encourage new entrepreneurs, to enrich and Chittagong and Sylhet metropolitan cities. The bank has
diversify bank's investment portfolio and to enhance brought more than one million poor under the purview of
financial inclusion of the Bank as well as to facilitate banking services in rural and urban areas through the
infrastructural development of the country, the bank has schemes.

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Performance under the schemes at a glance as on 31.12.2017


(Amonut in million Tk.)
Sl. Particulars RDS UPDS Total
01 No. of Branches 247 24 271
02 No. of Employees 2,396 107 2,503
03 No. of Members 1,076,297 32,413 1,108,710
04 No. of Client (members availing investment) 637,083 20,302 657,385
05 Total disbursement 197,524.83 4,420.47 201,945.30
06 Investment Outstanding 27,323.37 1,109.87 28,433.23
07 Overdue 117.69 15.10 132.79
08 Savings 9,083.70 250.01 9,333.71
The detailed performance of both the Schemes are mentioned below:

Inclusion
The eligible segment of people are enrolled as members in the selected villages/areas in groups under different centres.
At present, 1,108,710 members are enjoying financial services under 30,032 centres in 20,653 villages. It may be
mentioned here that ratio of male & female members are 17:83

Expansion of RDS & UPDS in the last 5 years is shown in the following table
Sl. Particulars 2013 2014 Growth 2015 Growth 2016 Growth 2017 Growth
01 Villages 17,104 18,086 6% 18,615 3% 19,418 4% 20,653 6%
02 Centres 26,887 27,874 4% 28,822 3% 28,960 0.50% 30,032 4%
03 Members 836,227 911,470 9% 947,305 4% 999,140 5% 1,108,710 11%

Comparative Position of RDS & UPDS members


1200000

1000000

800000

600000
1,108,710
836,227

911,470

947,305

999,140

400000

200000

0
2013 2014 2015 2016 2017

Savings Program
The members under the Schemes have to deposit a compulsory weekly savings with the Bank at least Tk.50/- per
week, even though they enter into as the member by depositing only Tk.10/-as an initial deposit. Total savings of RDS
& UPDS members was Tk.9,333.71 million as on 31-12-2017.

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RDS and UPDS Deposit in the last 5 years


(Amonut in million Tk.)
Sl. Type of Deposit 2013 2014 Growth 2015 Growth 2016 Growth 2017 Growth
01 MSA-RDS 3,750.86 4,572.49 22% 5,315.64 16% 5,974.73 12% 6,976.12 17%
02 MSS-RDS 780.60 1,154.66 48% 1,617.25 40% 1,977.91 22% 2,357.58 19%
03 Total Savings 4,531.46 5,727.15 26% 6,932.89 21% 7,952.64 15% 9,333.71 17%

Investment Program

Types of investment product


There are 02 types of investment facilities are being provided to the beneficiaries namely (a) Micro Investment
(collateral-free investment maximum Tk.100,000/- for the RDS members) and (b) Micro Enterprise Investment
(Investment with collateral security maximum Tk.500,000/- for the graduated micro-clients and newly inducted local
micro-entrepreneurs). We also extend Quard-al-hasana to the eligible RDS clients for setting up tube-well, sanitary
latrine. Quard-al-hasana is also extended for rehabilitation purposes on account of natural and social disasters up to
Tk.10,000/- .and rehabilitation of the hardcore poor who are not the member of RDS under welfare activities up to
Tk.5,000/-.

Growth of the Client


A comparative position of growth of client under Micro Investment (MI) and Micro Enterprise Investment (MEI) of the
schemes in the last 5 years is shown in the following table:
(Amonut in million Tk.)
Sl. Particulars 2013 2014 Growth 2015 Growth 2016 Growth 2017 Growth
01 MI Clients 472,146 501,559 6% 500,216 (1%) 506,504 1% 573,076 13%
02 MEI Clients 60,089 57,985 (4%) 69,604 20% 76,348 10% 84,309 10%
03 Total Clients 532,235 559,544 5% 569,820 2% 582,852 2% 657,385 13%

Number of MI & MEI clients


700,000
650,000
600,000
550,000
500,000
450,000
532,235

559,544

569,820

582,852

657,385

400,000
350,000
300,000

2013 2014 2015 2016 2017

Growth of investment
Cumulative disbursement among the beneficiaries was Tk. 201,945.30 million up to 2017 out of which outstanding is
Tk.28,433.23 million as on 31.12.2017. A comparative position of growth of investment under micro-investment (MI)
and Micro Enterprise Investment (MEI) of the schemes is shown in the following table:

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(Amonut in million Tk.)


Sl. Particulars 2013 2014 Growth 2015 Growth 2016 Growth 2017 Growth
01 Outstanding (MI) 7,956.89 10,254.76 29% 11,781.60 15% 13,645.88 16% 15,984.98 17%
02 Outstanding (MEI) 5,774.03 7,125.20 23% 9,017.21 27% 10,831.11 20% 12,448.25 15%
03 Total Outstanding 13,730.92 17,379.97 27% 20,798.82 20% 24,476.99 18% 28,433.23 16%
04 % of MI and MEI 42% 41% -- 43% -- 44% -- 44% --

MI & MEI Investment Outstanding Position


30,000
28,433
25,000 24,477
20,799
17,380
20,000
13,731
15,000

10,000

2013 2014 2015 2016 2017

Sector-wise Investment
Investments under the Schemes are extended especially in the agriculture sector. However, a significant investment has
also been extended in different income generating off-farm activities, rural housing & transport. It is viewed that 35%
investment was extended in different sub-sectors of agriculture, 18% in rural housing, 4% in rural transport and 43% in
different off-farm activities.

Sector-wise MI & MFI investment Position

Off-firm activities
18%
Agricultural tools
4%
Crops
4%
43% Live stocks
12% Fisheries

Rural transport
5%
4% Rural Housing

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Graduation Program

Graduation from Micro Investment:


Under the Schemes poor micro investment clients are being cared to be developed gradually. Apart from investment,
they are provided with capacity building training, counseling and other assistance. We assess the graduated clients
considering the following criteria:
The clients who have availed Micro Investment Tk. 1.00 lac and above.
RDS clients who transferred from RDS to MEIS.
Clients who have availed maximum ceiling of MEIS Tk.5.00 lac and already transferred to mainstream by availing
Commercial Investment under SME.

Graduated cumulative clients up to December 2017 is mentioned below:


Sl. Numbers of
Particulars clients
No.
01 The clients who have availed Micro Investment Tk. 1.00 lac and above 53,942
02 RDS clients who transferred to MEIS 8,365
Clients who have availed maximum ceiling of MEIS Tk.5.00 lac and already transferred to
03 mainstream by availing Commercial Investment under SME 5,349

Non-financial (welfare) Programs under the Schemes


Since poverty alleviation needs a combination of financial and non-financial programs. In this perspective, different
non-financial welfare services have been extended under the Schemes from the year 2012 to the areas of
(1) Education, (2) Training, (3) Health, (4) Relief & Rehabilitation and (5) Environment.

Performance of welfare activities at a glance during the Year 2017


(Amount in million Tk.)
Sl.
Description Jan’2017 to Dec’2017 Since inception up to 2017
No.
Beneficiaries Amount Beneficiaries Amount
1 Education Program 51,529 121.55 227,259 376.38
2 Training Program 166,319 25.88 799,559 110.70
3 Health Program 41,269 30.09 230,963 178.88
4 Relief & Rehabilitation Program 2,745 31.50 18,106 132.64
5 Environment Program 6,44,178 24.88 52,52,002 131.09
Grand Total 906,040 233.90 7,527,889 929.69

Details of the Programs are mentioned below:

Education Program
Under Education Program there are three types of activities like (1) Scholarship (for the children of the beneficiaries
secured GPA-5 in the SSC & HSC examination), (2) Academic Award (to the meritorious children of the members from
class I to class IX) and (3) Establishment of pre-primary school, maqtab & adult education centre in the project areas.

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Activities under Education Program during the year December 2017

(Amount in million Tk.)


Activities Number Beneficiary Amount
a. Scholarship -- 2,794 67.58
b. Academic Award -- 30,568 27.44
c. Pre-primary School 359 9,125 15.86
d. Maqtab 351 9,042 10.39
Total 710 51,529 121.27

Training Program
There are three types of training activities under the Program like (a) Skill Development Training (b) Self-employment
Training and (c) Centre Leaders’ Training. Activities under Training Program during the year 2017 at a glance are shown
in the following table:

(Amount in million Tk.)


Activities Number of programs Beneficiary Amount
a. Center Leader Training Program 122 29,695 12.67
b. Skill Development Training 2582 136,361 12.06
c. Self-employment Training 263 263 1.16
Total 2,967 166,319 25.89

Health Program
Under Health Program, there are four types of activities like (1) Installation of Tube-well & Sanitary Latrine, (2) Conducting
medical camps (general, eye & circumcision), (3) Medical Assistance and (4) Assistance to Mother & Neonatal. Activities
under Health Program during the year December 2017 at a glance are shown in the following table:

Activities Number Beneficiary Amount in million (Tk.)


a. Water & Sanitation:
i. Quard for tube-well - 5,533 44.28
ii. Quard for sanitary latrine - 2,472 12.86
Quard Total - 8,005 57.14
b. Medical Assistance:
General medical camp 106 16,599 3.17
Eye Camp 36 3,849 0.95
iii. Circumcision Camp 21 491 0.65
iv. Cash assistance - 724 5.56
Sub-total 163 21,663 10.33
c. Gift to the newborn baby: - 19,606 19.75
Grand Total 49,274 87.22

Relief & Rehabilitation Program


Under the program, 3 types of assistance are being provided to the poor and distressed members like (a) Financial
Assistance to distress clients, (b) Relief & Donations and (c) Rehabilitation Quard. Activities under Relief & Rehabilitation
Program during the year December 2017 at a glance are shown in the following table:

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Activities Beneficiary Amount in million Tk.


a. Financial Asst. For distressed clients 1439 23.92
b. Quard for Rehabilitation:
Of the distressed members -- --
Of the hardcore poor 2,334 11.64
Sub-total 3773 35.56
c. Relief & Donations:
For marriage of sons & daughters of the members 602 4.04
For Burial/funeral purpose of the deceased members 592 1.60
For the disaster victims members (Fire, Cyclone, Flood etc.) 112 1.26
Sub-total 1,306 6.90
Total 5,079 42.46

Environment achieve their target then the rest amount (the amount
The Bank has been observing Plantation Program which is not achieved) must be deposited to Central
during the rainy season almost every year since 2003. Bank and no profit would be provided against this
Each of the RDS members is provided with one sapling amount. Later on, if they disburse more amounts
free of cost and encouraged to implant two others by against their target then the total or proportionate
their own. Since 2003, the Bank has distributed about amount would refund.
62,52,002 saplings. This year we have distributed
644,178 saplings among the RDS members and different Another alternative option is that, if a Bank does not
educational institutions in the working areas with the achieve their target then 3% from the unachieved
cost of Tk. 24.88 million. amount to be deposited to Bangladesh Bank and no
profit would be provided against this amount. Later on,
Agricultural Investment of IBBL if they disburse more amounts against their target then
IBBL has been giving due importance on agricultural/rural the total or proportionate amount would refund. If they
investment from its inception. To make it more convenient, fail to achieve the previous unachieved target with
five Investment Schemes like Agricultural Implements running target within the two consecutive years, that 3%
Investment Scheme (AIIS), Rural Development Scheme of unachieved amount will not be refundable.
(RDS), Micro Enterprise Investment Scheme (MEIS),
Solar Panel Investment Scheme (SPIS) and Fruit Except that,
Gardening Investment Scheme (Falbithi) have been It will affect the Management Component of
introduced in 1992, 1995, 2005, 2011 & 2016 respectively. CAMELS Rating.
Falbithi is our new Agricultural Investment product
specially for Fruit Gardening. Opening of New Branches, AD Branch approval,
opening of Foreign Exchange House in foreign
In every Financial Year (July to June), Bangladesh Bank country, would not be considered if the Agricultural
declared their “Agricultural & Rural Credit Policy and Investment has not achieved.
Program” and they have fixed up a target for Agricultural
and Rural Credit for each Bank. The general instruction The Rate of Return (RR) of Agricultural Investment is
for the Agricultural Investment target in each financial fixed by Bangladesh Bank time to time. At present, the
year is 2.5 per cent against the net investment of the rate of return (RR) of Agricultural Investment is 9% and
Bank on 31st March of previous year. There are some CIB reporting has been relaxed up to Tk. 2.50 lac
controllable measures in this policy i,e if a Bank does not against crops cultivation.

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Handloom Industry

Bangladesh Bank has encouraged all Banks to make Branch to look after the Agricultural Investment in field
investment for cultivation of Pulse, Oil Seed, Spices & level.
Maize @ 4% subsidized rate to motivate the farmers to
cultivate the same for reducing import dependency on More than 100% achievement of BB target
the said specific high value crops. After ending financial In the Financial Year 2016-17, the Bank has disbursed
year subject to adjustment of Principal amount of Tk. 11,652.00 (achievement 119%) million in Agriculture
investment with 4% profit within due date, Bangladesh sector against its target of Tk. 9,800.00 million among
Bank provides 6% profit subsidy to the Bank after 129,612 farmers/investment clients. Besides, under the
conducting a physical inspection. special program of Bangladesh Bank (investment in
cultivation of pulse, oil seed, spices and maize at subsidized
In this connection, we have been giving investment for rate of profit 4%), IBBL has disbursed Tk. 10.24 million
cultivation of Pulse, Oil Seed, Spices & Maize @ 4% against targeted amount of Tk. 10.00 million in the
subsidized profit rate from the Financial Year Financial Year 2016-17. The target of Agricultural Investment
2011-2012. We have achieved 100% disbursement for the current Financial Year 2017-18 is Tk. 11,570.00
target from the FY 2011-2012 to 2016-2017. million and IBBL has already disbursed Tk. 6,754.00
million among 71,259 farmers/investment clients up to
To achieve the Agricultural Investment target, the bank December-2017, which is 117% achievement in its
has posted one official with B.Ag. / M.Ag. degree in proportionate target.
each Zonal Office and designated one official in each

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Financial Year wise Comparative position of Agricultural Investment


(Amount in million Tk.)
Target Disbursement % of Achievement
Fiscal Year National IBBL National IBBL National IBBL
2010-2011 126174 9500 121844 10210 97% 107%
2011-2012 138000 10000 131320 11703 95% 117%
2012-2013 141,300 7,250 146,670 13,074 104% 180%
2013-2014 145,950 7,550 160,368 13,199 110% 175%
2014-2015 155,500 7,900 159,785 9,716 103% 123%
2015-2016 164,000 8500 176,464 11,296 107% 133%
2016-2017 175,500 9,800 209,990 11,652 119% 119%

Sector-wise disbursement under Agricultural Investment of IBBL in the FY2016-17


(July’2016-June’2017)
(Amount in million Tk.)
Sl. No. Sector No of Clients Disbursement
1 Crops 43,312 2,984
2 Fisheries 18,059 2,374
3 Livestock 32,412 3,518
4 Irrigation Equipment 474 20
5 Agricultural Implement 965 62
6 Poverty Alleviation 24,510 1,940
7 Storage 1,976 104
8 Others 7,904 650
Total 129,612 11,652

Sector-wise MI disbursement of Agricultural


Investment from July’ 16 - June 17

Crops
1%
6% 26% Fisheries

Livestock

17% Irrigation Equipment


20%
Agricultural Implement

Poverty Alleviation
1%
0% 30% Storage

Others

Asset Quality
IBBL continues to maintain strong asset quality despite many odds in macroeconomic fundamentals. Investment
facilities are allowed in a manner so that credit expansion goes on ensuring optimum asset quality. Investment facilities
are extended to customers who comply bank’s norms and principles.

Non Performing Investment


IBBL’s position was better than national Non Performing Investment position. Classified investment of the Bank as on
31.12.2017 was Tk. 25,518.61 million which is 3.59% of general investment as against 3.83% at the close of the year 2016.

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IBBL was awarded for outstanding contribution in foreign remitance services

NPI in IBBL (Amount in million BDT)


Sl. No. Particulars 2017 2016
1 2 3 4
1 NPI (NPL) Ratio at IBBL 3.59% 3.83%
2 Industry Average of NPL 11.00% 10.40%
3 Required Provision 31,362.36 26,784.00
4 Provision Maintained 31,362.39 26,787.84
5 Provision Maintained Ratio 100% 100%

Classified Investment trend (million BDT) Classified Investment to General Investment


30,000
25,519 5.00%
25,000 23,602
22,541 4.00%
20,000 22,807
4.92%

3.00%
14,942
4.25%

15,000
3.83%

2.00%
3.71%

10,000
3.59%

5,000 1.00%

- 0.00%
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Trade Business (Import &Export) and Remittance


Foreign trade & remittance business, the largest contributor to profit of IBBL, has completed another year with success
facing huge challenges. Income from international business reached at new height of TK.6,811 million with 22% growth
contributing off-shore banking growth 21%, EDF financing growth 10% and money market growth 14%. Import,
Export & Remittance business stood at Tk.385,194 million, Tk.240,026 million & Tk.233,052 million respectively
resulting total international business to Tk.858,272 million in the year 2017. The comparative figures of international
business (2015-2017) are shown below:

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(Amount in million Taka)

Nature of Achievement Achievement Market Share


Sl. No.
Business in 2016 in 2017 in 2017 (%)

1 2 3 4 5
1 Import 339,954 385,194 9.19%
2 Export 243,647 240,026 9.27%

3 Remittance 279,980 233,052 19.55%


Total 863,581 858,272 9.83%

International Business Trend:

Import
From 2013 to 2017 import business rose from Tk. 285,900.00 million to Tk. 385,194.00 million with growth of 13.31%.
5 (five) years import performance (2013-2017) is shown in the chart. Market share of import business of IBBL stood
at 9.19%.

Import Trend (million Tk.)


Import market share
400000
12.00%
300000
10.00%
8.00%
200000
6.00%
100000 4.00%

0 2.00%
1 2 3 4 5
0.00%
Year 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

(million Tk.) 285,089 316,975 343,668 339,654 385,194 Market Share 9.83% 9.77% 11.13% 10.02% 9.19%

Export
Export business rose to Tk. 240,026.00 million in 2017 from Tk. 205,269.00 million in 2013. The reason for low
achievement is due to fall of price of exported items/commodities in the international market. 5 (five) years Export
performance (2013-2017) is shown in the chart. Market share of export business of IBBL stood at 9.27%.

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Export Trend (million Tk.) Export market share

250,000 10%

240,000 10%

230,000 10%

220,000 10%

210,000 9%

200,000 9%

190,000 9%

120,000 9%
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

(million Tk.) 205,269 222,753 224,236 243,647 240,026 Market Share 10.17% 10.09% 9.70% 10.06% 9.27%

Remittance
Remittance Business rose to Tk.233,052.00 million. The reason for low growth is due to reduced earning/savings per
migrant worker, small size remittance through unofficial channel, economic turmoil in Middle East, depreciation of the
GBP and the EURO against USD etc. 5 (five) years remittance performance (2013-2017) is shown in the chart with
market share which stood at 19.55% in 2017.

Remittance Trend (million Tk.) Remitance market share

350,000 30%

300,000 25%

250,000 20%

200,000 15%

150,000 10%

100,000 5%

50,000 0%
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

(million Tk.) 286,956 308,722 321,066 279,980 233,052 Market Share 26.67% 25.53% 26.37% 26.00% 19.55%

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Off-Shore Banking
In 2013 the amount invested through OBU was Tk. 16,212.00 million (USD197 million) only which rose to Tk. 47,017.00
million (USD 568.50 million) in 2017. 05 (five) years Investment trend of Off-shore Banking (2013-2017) is shown in the
chart.

OBU Investment
50,0000

40,0000

30,0000

20,0000

10,0000

-
2013 2014 2015 2016 2017

(million Tk.) 16,212 15,176 29,164 34,516 47,017

Growth 39% -6% 92% 18% 36%

Centralized Trade Processing Centre (CPC):


Starting journey in 2010 in the name of Foreign Trade Processing Division (FTPD), the Centralized Trade Processing
Centre (CPC) of the Bank has grown in capacity with unique practice, reducing non-compliance risk & litigation,
minimizing cost and thus improving the trade service quality.

Transactions handled from FTPD 2013-2017


2013 2014 2015 2016 2017
SL Name of the Product Growth Growth Growth Growth Growth
No. No. No. No. No.
(%) (%) (%) (%) (%)
1 Cash LC Opening 29672 27.03 35045 18.11 41334 18 44571 8 44584 0

19903 18.68 21982 10.45 24668 12 25228 2 25100 -1


2 Back to Back LC Opening

Cash & BB L/C 15278 20.62 17064 11.69 20896 20 23781 14 26290 11
3 Amendment

4 Document Scrutiny 9342 36.72 11185 19.73 15364 37 15843 3 13959 -12
5 Cash Bills Payment 29802 19.18 37077 24.41 44367 20 47475 7 48778 3
6 BB Bills Payment 18037 24.02 21445 19 22051 3 22535 2 20844 -8
7 Export Bills & Others 61156 24 63373 4 80185 27 80334 1 74690 -7
Total 183190 23.38 207171 13.09 248865 20 259767 4.38 254245 (2.12)

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Overseas Banking Division:


New Relationship Management Application (RMA):
Established new 34 RMA (Relationship Management Application) with global banks in 2017 in following regions:

Sl. No. Region No. of RMA Region wise RMA


established

1 Asia 18 3%
2 Middle East 5
3 Europe 10 29% Asia
4 North America 1 Middle East
Total 34
Europe
53%
North America
15%

New Nostro Accounts:


In 2017, as part of our on-going effort to open new 4 (four) Nostro accounts in different jurisdictions around the globe
as below:

Name of the Bank Currency City Country


Axis Bank ACUD Kolkata India
Banca UBAE SPA EURO Rome Italy
Axis Bank USD Hong Kong Hong Kong
Shanghai Pudong Development Bank RMB Shanghai China

Relationship with Global Banks:


Nostro Accounts Nostro Accounts
No. of RMA Countries with RMA Banks with RMA
in currencies

40 11 610 70 283

New remittance arrangements with Banks and Exchange Houses


IBBL established remittance arrangement with 07 (seven) new Banks/Exchange Houses in 2017 around the world. At
present, the total number of remittance partnering Banks/Exchange Houses of IBBL is 136.

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Remittance Country shares 2017 Remittance Country Shares


KSA
Remittance has been received in 2017 from K.S.A 1% 2% UAE
contributing 33% of total remittance. Other major 3% 3% 2%
8% Malaysia
remittance source countries are USA, UAE, Oman,
7%
Malaysia, Bahrain, Kuwait with contribution of 14%, USA

10%, 9%, 8%, 8% and 7% respectively. 9%


Oman
Kuwait
Bahrain
33%
14% UK
Qater
Top 12 Banks in Bangladesh
8% Korea
in 2017 (million USD) 10%
Singapore
IBBL 2648
South Africa
Agrani 1319

Sonali 1052

Janata 877

DBBL 711 IBBL and its Competitors


Southest 534 IBBL holds the 1st position in remittance business of the
country with a share of 19.55% followed by Agrani,
Uttara 477
Sonali, & Janata Bank with a share of 9.74%, 7.78% &
National 472 6.48% respectively.
Pubali 467

Bank Asia 440

The City 380

NCC 343

Centralized Remittance Services


FRSD is a hub of remittance of Bangladesh which has been managing around 1/5th remittance of Bangladesh which
is contributing in our FC reserve, GDP as well as contributing to the bank for deposit mobilization and profit earning.

Products wise Remittance services rendered from FRSD:


(Amount in million Taka)
Sl. No. Particulars 2013 2014 2015 2016 2017
1 Central Account Credit 133,868 136,624 141,068 132,185 88,367
2 Spot Cash 117,410 149,162 153,570 116,996 93,062
3 BEFTN 21,602 22,175 26,428 30,799 30,470
4 Total amount 272,880 307,961 321,066 279,980 211,899
5 Total transaction (million) 7.78 8.17 8.39 6.70 5.55

Countries contributed remarkable growth in 2017


The following graph shows remarkable growth in South Africa (233.60%), Bahrain (152.60%), Italy (134.81%), Qatar
(28.71%), Jordan (23.67%) & South Korea (16.23%) over 2016.

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Amount in Million USD


200.00

150.00

100.00

50.00

0.00
South Africa Jordan Italy South Africa Qatar Bahrain
2016 17.53 6.35 10.37 23.37 51.25 185.01
2017 58.48 16.04 24.35 30.08 63.38 2150.4

151 Correspondent Banks & Exchange Houses visited IBBL


During the year 2017, total 151 foreign correspondents, international agencies & exchange houses visited our Bank.
The name of major foreign banks, International Agencies and Exchange Houses who visited IBBL are furnished below:

SCB, Mashreq, Commerz AG, ICICI, Axis Bank, Habib AG Zurich, Zurcher Cantonal,
May Bank, ODDO BHF Bank, BFC Bank, ABC Bank, Doha Bank, UBL Bank, IDFC
Bank, RAK Bank, Habib Bank, BOTM, SMBC, Dubai Commercial Bank, Banca
Correspondent Banks UBAE, Abu Dhabi Islamic Bank, UBI Banca, Indusind Bank, Intesa Sanpaolo, Jaiz
Bank, KBC Bank, BCGE Bank, Caixa Bank, EBL Bank, Bybloss Bank,ADCB
Bank,YES Bank, Duetsche Bank, Handelsbanken Bank etc.

Islamic Corporation for the Development of the Private Sector (ICD) of IDB Group,
International Agencies International Development Bank (IDB) itself, International Finance Corporation (IFC),
World Bank Group and Earste Group etc
The major remittance handling Banks & Exchange Houses are Money Gram Payment
System USA, UAE Exchange UAE, Xpress Money UAE, Al Amoudi Excchange KSA,
Exchange Houses IME SDN Berhad Malaysia, Transfast Remittance LLC USA, Prabhu Money Transfer
USA, Ria Financial Services, Al Fardan Ex. UAE, Oman International Exchange, Oman
, Al Ansari Exchange etc.

IBBL paid visit to 32 Banks/Institutions & Deputed Representatives at Abroad


Exchange Houses abroad IBBL has been deputing officials of our bank in different
The delegators of IBBL visited 32 Banks & Exchange exchange houses/banks abroad since 90’s. At present,
Houses to extend correspondent relationship and 21 Representatives are working in four countries.
enhance remittance partnership. The major Banks &
Exchange Houses were Mashreq Bank, ICICI Bank, Nationwide Remittance Promotional
Sumitomo Mitsui Banking Corporation, CIBAFI, Eastern Program
Bank, Sonali Bank, Islamic Development Bank, IFSB, With a view to boost up remittance business, a good
RAK Bank, Asia Express, Oman, Global Exchange, number of marketing initiatives have been taken with
Oman etc. Besides, a three members’ team of our offering of different promotional items with different
senior management visited Jaiz Bank PLC, Abuja, exchange houses to attract and create awareness
Nigeria on November, 2017 to evaluate their Banking among the remitters and beneficiaries. Some promotional
Operation & Control Systems. programs were arranged jointly with following
exchange houses:

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IBBL organized International Workshop on Waqf

12 days long promotional program has been The workshop was inaugurated by Mr. Abdul Hamid,
arranged with Transfast Remittance LLC, USA jointly the Hon'ble President of the People's Republic of
on the occasion of Eid-ul- Fitr and distributed 13,000 Bangladesh, A total number of 27 papers on different
(thirty thousand) pieces Tiffin Box, 04 (four) Smart aspects of waqf were presented in the workshop by
Mobile Phone Set and a LED TV as a mega gift. eminent resource persons from 11 countries namely
16 days long promotional program has been Brunei, Indonesia, Japan, KSA, Malaysia, New Zealand,
arranged with MoneyGram jointly on the occasion Nigeria, Thailand, the United Kingdom, the United
Eid-ul- Fitr & Tk. 20 has been recharged against States and Bangladesh.
each transaction
The workshop covered different areas on Waqf viz.
16 days long promotional program has been
arranged with Xpress Money jointly on the occasion history and background of waqfs, status of waqf in the
Eid-ul-Azha & distributed 14,000 pieces Wall Clock different countries like Nigera, Indonesia, Malaysia and
and 04 deep freezer as mega gift on lottery basis. Bangladesh and came up with valuable recommendations
like creating awareness and popularizing waqf and cash
IBBL organized International Workshop among the people through incorporating the subject in
on Waqf: the educational texts, to explore and utilize the potentials
IBBL with the collaboration of Islamic Research and of waqf in addressing poverty and socio-economic
Training Institute (IRTI), a concern of IDB and Center for development and attaining the Sustainable Development
Zakat Management (CZM) organized a two day long Goals (SDGs) in line with the government’s initiative.
International Research Workshop titled “Revival of Waqf
for Socio-Economic Development (ROWSED 2017)” on Corporate and Financial Reporting:
4-5 November 2017 at Pan Pacific Sonargaon Hotel, The Directors of Islami Bank Bangladesh Limited in
Dhaka, Bangladesh. conformance with the BSEC Notification No. SEC/CMR-

136
Board of Directors Report Islami Bank Bangladesh Limited
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RCD/2006-158/134/Admin/44 dated August 7, 2012; Sustainability reporting:


confirm compliance with the financial reporting Together we are also creating positive impact in respective
framework for the following: communities where IBBL operates. We sincerely strive
The financial statements, prepared by the manage to maintain business processes without degrading or
ment of IBBL make a fair presentation of its activities, endangering natural biotic systems, even our every
operational details and results, cash flow information business activity is eco friendly as we never invest
and changes in equity structure. environmentally hazardous areas/sectors. Furthermore
we focus on strategic partnership with all our stakeholders
Proper books and accounts of the Company have
towards sustainable development for building shared
been maintained.
prosperity. As part of sustainability reporting, IBBL has
Appropriate accounting policies, including Interna disclosed a separate report on GRI including reporting
tional Accounting Standards (IASs)/International checklist thereon in Corporate Governance report.
Finan cial Reporting Standards (IFRSs) as adopted by
Institute of Chartered Accountants of Bangladesh (ICAB) Future outlook: Govt. vision-2021,
as applicable in Bangladesh, have been consistently 2030, 2041:
applied in preparation of the financial statements. There The Sustainable Development Goals (SDGs) are a
is no material changes affecting the financial position of universal call to action to end poverty, protect the planet
the company during the period under review; any and ensure that all people enjoy peace and prosperity.
change or deviation has been adequately disclosed in The SDGs work in the spirit of partnership and pragmatism
the financial statements. to make the right choices now to improve life, in a
Accounting estimates are based on reasonable and sustainable way, for future generations.
prudent judgment.
In taking on SDGs, Bangladesh will have the opportunity
Internal control processes have been properly
to draw strength from being a star performer of the
designed and effectively implemented and monitored.
MDGs wherein the key challenges exists for Bangladesh
No significant doubt exists upon the Company’s for implementing the SDGs as; Integration in the national
ability to continue as a going concern. planning process; Financial and non-financial resources;
Institutional mechanism for implementation and
Corporate Governance Compliance: participation and accountability.
Corporate governance has become firmly entrenched
on the world business scene over the past three Bangladesh is one of the fastest growing economies
decades. Today it is a key component in the operation right now. By 2050, we will be the third fastest growing
of all manner of entities around the globe. Even more economy and are projected to become the 23rd biggest
important is the need for corporate governance to be economy in the world from its current position, as per
effective, not only for business entities but for the economy the latest research of Price water house Coopers (PwC).
as a whole. Sound corporate governance in the Banking Bangladesh, the largest least developed country (LDC)
is the prerequisite for efficient financial market. in terms of population and economic size fulfilled the set
criteria for the first time moving towards LDC to Developing
Status of the compliance of conditions of Corporate country propelled by better health and education, lower
Governance guidelines imposed by the Bangladesh vulnerability and an economic boom. The Committee for
Securities and Exchange Commission’s Notification No. Development Policy (CDP) of UN’s ECOSOC measures
SEC/CMRRCD/2006-158/134/ Admin/44, dated the LDC category on the basis of per capita income, a
August 7, 2012 and subsequent modifications by human assets index and an economic vulnerability
SEC/CMRRCD/2006-158/147/Admin/48 dated July index. A country must exceed thresholds on two of the
21, 2013 and SEC/CMRRCD/2009-193/151/Admin, three criteria at two consecutive triennial reviews to be
dated August 18, 2013, along with a certificate from a considered for graduation. Bangladesh looks likely to be
practicing Chartered Accountant has been provided in the first LDC ever to graduate on the basis of all three
corporate governance report.

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Islami Bank Bangladesh Limited
Annual 2017
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criteria. Bangladesh is on right track to graduate from fund is deployed in different sectors such as Crop
the status of least developed country (LDC) before 2024 production, Nursery and commercial production of
where the country will be under UN observation for six flowers & fruits, Agriculture Implement, Live stocks,
years after meeting the three necessary criteria for being Poultry, Fisheries, Rural Transport, Rural Housing,
elevated to a developing country, according to sources Bio-gas & solar panel and off-firm. Besides as a part
at the Economic Relation Division (ERD). CSR activities, we have some welfare activities which
are provided under our microfinance program ‘Rural
Attainment of the SDGs would require a strong and Development Scheme (RDS)’ & ‘Urban Poor Development
effective institutional mechanism involving all stakeholders Scheme (UPDS). These are very much akin with the
including public representatives across the country, GOAL - 09 (Innovation and Infrastructure) GOAL-10
government and the bureaucracy, private sector, civil (Reduced Inequality), GOAL – 11 (Sustainable Cities and
society, knowledge community, and development Communities) of SDGs. Major Role of IBBL transforming
partners. our Country from LDC to Developing one:
As a leading contributor in the garment exports if the
Factors leading towards Development move continues then IBBL could make a valuable
move to Developing Country: contribution in the GDP.
The economy has developed largely on the basis of Irrespective of caste, creed, religion and gender, IBBL
textile and garment exports. Clothing forms a higher is contributing in Microfinance through its RDS & UPDS
share of exports than in any other country. projects which has been growing faster gradually
Remittances, natural gas, shipbuilding and seafood, leading towards alleviating Poverty.
as well as information communications and pharmaceuticals
Highest tax payers to the government exchequer as
are all emerging sources of foreign exchange and well as one of the highest VAT payers.
economic growth.
We ensure maximum social welfare as well as national
Considerable improvement in the five main components benefits through diversified investment portfolio of the
of the human assets index-infant mortality, maternal Bank by size, sector and geographical location.
mortality, undernourishment, adult schooling and adult
literacy–means that Bangladesh has exceeded the As roadmap towards a developing nation IBBL has
threshold on this index. designed a five years perspective plan wherein priority
has been given to the SME investment to develop
Government of the Peoples’ Republic of Bangladesh entrepreneurship throughout the country.
is very optimistic that Bangladesh would be able to
reach 8% GDP growth in next two years focusing more Vote of Thanks
concentration to less developed area. This will create The Board of Directors expresses its deepest gratitude
huge employment, earnings and market demand which to the Almighty Allah for enabling the bank to achieve
in turn expand the economy with credit demand. steady progress in all aspects of operations during the
year 2017. The Board extends thanks to the Ministry of
Roadmap of IBBL towards developing Finance, the Bangladesh Bank, the Bangladesh
move of Bangladesh to Developing Country: Securities and Exchange Commission, Dhaka Stock
IBBL’s contribution to the economy of Bangladesh Exchange Limited, Chittagong Stock Exchange Limited,
Being a key player in the financial market not only National Board of Revenue, Registrar of Joint Stock
bestows IBBL with the responsibility of its shareholders Companies, Statutory Auditors and the Government
but also to the national economy. IBBL started its Agencies for providing necessary assistance, guidance,
journey with the objective of rendering welfare oriented support and co-operation at various stages of operations
banking services. As IBBL holds a leading position in the of the Bank. With deep sense of gratitude, the Board
banking industry of the country, it has the opportunity to also keeps on record the excellent co-operation,
contribute more in achieving sustainable development. exchange of views and constant support of the Islamic
For this purpose, a sufficient portion of our investment Development Bank (IDB), other national and overseas

138
Board of Directors Report Islami Bank Bangladesh Limited
2017 Annual
Report

Islamic Banks and Financial Institutions. already knotted with the mainstream finance whereby its
future is as risky as any other part of the global financial
The Board appreciates the support and co-operation industry, experts in Islamic finance believe that their way
received from overseas correspondents of the bank all of carrying out finance-related activities has shielded
over the world. The Board particularly likes to record its them from the global credit crisis and hence, the model
appreciation for the Shari‘ah Supervisory Committee stands on its own merit. London, Singapore, Paris and
whose guidance has enabled the bank to conduct its Hongkong the financial heartthrob of the world, are
business complying Islamic Principles. The Board of competing with each other to become centre of
Directors also extends the best compliments to all of its excellence in Islamic finance. Reputed banks like Standard
valued Shareholders, Depositors, Investment Clients, Chartered, HSBC and Citi Bank have already set up
Print and Electronic Media and other stakeholders and Islamic banking subsidiaries that are flourishing.
well-wishers and expresses thanks and gratitude to
them for their valuable support and confidence reposed May Allah, the most Merciful bestow on us courage,
on the bank. dedication, patience and fortitude to serve the cause of
Islam and also of Bangladesh and run the bank as per
Finally, the Board would like to express its great appreciation the vision and mission put forth earlier and tenets of
and thanks to all the officials and staff of the Bank for Islamic Shari’ah. Ameen.
their untiring efforts, leadership and dedication for bringing
about a better performance of the Bank during the year.

In conclusion, notwithstanding the fact that Islamic


banks have been able to shield themselves from the
spillover impact of the global economic recession, no
one can predict the extent to which the Islamic finance's
principles will serve to protect it from the looming Dated, Dhaka (Professor Md. Nazmul Hassan, Ph.D)
financial crisis. Whilst some have pointed out that it is April 25, 2018 Chairman

139
Islami Bank Bangladesh Limited
Annual 2017
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Integrated Reporting
Integrated Reporting that have been carried out within the geographical
Our 2017 Annual Report has been presented as an boundaries of Bangladesh, as IBBL does not have
‘Integrated Report’ with the aim of articulating how operation or subsidiary in other countries. Further, there
IBBL, as an organization, has effectively managed its have not been any significant changes to the scope,
business to deliver consistent value to its stakeholders. boundary and reporting basis since the last reporting
It encompasses the efforts we have undertaken towards date as of December, 31 2016.
contributing to economic progress, environmental
sustainability and social well-being for a better Bangladesh. External Declaration
The bank has obtained external assurance on the
Capacity and Report Periphery following reports in the reporting period under
Integrated Reporting covers the integrated reporting consideraton:
checklist issued by the Institute of Chartered Accountants
of Bangladesh (ICAB). In explaining the Bank operations
and financial performance, financial information so
disclosed has been extracted from the Audited Financial Sl. Description External
Statements for the Financial Year ended 2017 with No. of the Report Assurance
relevant comparative information. The financial statements 1 Financial Statements 1. M/s. S.F. Ahmed & Co.,
are prepared complying with the requirements of: Audit Report Chartered Accountants
2. M/s. Khan Wahab Shafique
Rahman & Co., Chartered
Accountants
Bangladesh Accounting Standards (BASs) and
2 Corporate M/s. K.M. Hasan & Co.,
Bangladesh Financial Reporting Standards (BFRSs), Governance Chartered Accountants
Audit
Bank Company Act 1991 (as amended)
Companies Act 1994;
Securities and Exchange Rules 1987; Comparability
All the information presented in this report is on the
The Income Tax Ordinance 1984;
same basis as the report of 2016 in terms of the entities
Relevant rules & regulations of Bangladesh Bank; covered, the measurement methods applied and time
Other applicable laws and regulations of the land. frames used. The information provided covers all material
matters relating to business strategy, risk and areas of
The disclosure of non-financial information has been critical importance to our stakeholders. The structure of
extracted from internally-maintained records reported the report has been further developed as part of our
for the statement of financial position, unless otherwise continuous focus on improving communication to our
stated that it has been extracted from a reliable source. stakeholders.

To report our corporate governance practices, we have Availability of the Annual Report
drawn reference from the Corporate Governance The hard copy of the Annual Report is sent to all the
Guidelines (CGG) issued by Bangladesh Securities and shareholders, prior to holding the Annual General Meeting,
Exchange Commission BSEC) as well as Bangladesh giving due period of notice. Separately, for the benefit of
Bank directives. all stakeholders, our report has been made available in
the website http://www.islamibankbd.com.
The scope of our Annual Report comprises of activities

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Report of Risk Management


Committee

International Workshop on Liquidity Management

Risk is the chance of happening unexpected event. It is Risk management is now recognized as a great and
the expectation of an organization to achieve its goals essential job in banking sector around the world. Islami
and objectives, create quality assets for its future growth Bank Bangladesh Limited (IBBL) has given the utmost
and sustainability, make profit with continuous positive priority in the risk management arena considering the
growth for maximizing wealth, build sufficient equity and present business and economic scenario of the country
work environment with best reputation for smooth as well as local and international risk factors. As such
operation. Many events like wrong investment, IBBL manages the risk under overall coordination of the
inefficient management of assets and liabilities, control Risk Management Committee (RMC) of the Board.
failure and noncompliance, wrong appraisal of
investment and foreign exchange business, weak In line with the BRPD Circular No - 11 dated 27 October
infrastructure of information technology etc. may 2013 of Bangladesh Bank, IBBL has formed Board level
negatively affect asset quality, profitability, business Risk Management Committee. Present members of the
environment and equity of a bank which ultimately may Risk Management Committee, reconstituted on April
create hazard in national economy. 17, 2018 are as follows:

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Report of Risk Management Committee
Report

Status in the Board Status in the Risk Management


Sl. No. Name of Directors Committee

1 2 3 4

1 Major General (Rtd.) Engr. Abdul Matin Director Chairman

2 Mr. Helal Ahmed Chowdhury Independent Director Member

3 Dr. Areef Suleman Director Member

4 Professor Dr. Md. Sirajul Karim Director Member

5 Mr. Syed Abu Asad Director Member

The Company Secretary acts as the Secretary of the information and reporting of the Management;
Risk Management Committee of the Board as per Monitoring the overall implementation of risk man
regulatory requirement. agement policy of the bank and also examining
whether remedial measures have been taken for
Roles and Responsibilities of RMC minimization of credit risk, market risk and operation
The roles and responsibilities of RMC have been framed al risk of the bank;
in accordance with BRPD Circular and guidelines of
Bangladesh Bank and other best practices in the Reviewing different decisions taken by the different
risk committees formed at management level and
national and international Banking Company. Some
communicating the same to the Board on regular
important roles and responsibilities are highlighted
basis;
below:
Ensuring compliance of different directives/guidelines
as issued by Regulators from time to time.
Formulating and implementing appropriate strategies
for risk assessment and its control. The Committee
reviews the risk management policy of the bank and
Meetings of the Risk Management
modifies/amends the same as per requirement;
Committee
As per Bangladesh Bank’s requirement, banks are
Ensuring suitable organizational structure of the bank required to hold at least 4 meetings in a year and the
for controlling risk, the compliance of risk manage committee can also sit as and when required. 11
ment guidelines relating to Investment Risk, Assets (Eleven) meetings of RMC were held during the year
Liability Management Risk, Foreign Exchange Risk, 2017 having detailed discussions and review session
Internal Control and Compliance Risk, Money with the Chief Risk Officer (CRO) regarding their findings,
Laundering Risk and Information and Communica observations and recommendations on the issues of the
tion Technology Security Risk. The RMC has formed bank that need improvement. The proceedings of the
separate committees at the management level and Risk Management Committee meetings were reported
also monitor their activities; timely and regularly to the Board of Directors as well as
Reviewing the risk management policy and guide Bangladesh Bank to comply with the regulatory
lines of the bank at least once a year, making neces requirement.
sary modifications as per requirement;
Reviewing the system regarding preservation of

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Major areas focused by RMC during the The work process and progress for relocation of
year 2017: Disaster Recovery Site (DRS) and extension of Data
Centre of the Bank, focusing of existing Business
Continuity plan for processing financial transaction
Bank’s Internal Capital Adequacy Assessment
while blackout of main utility , generator, UPS for
Process (ICAAP) and Supervisory Review Process
seven days;
(SRP) report for the year 2016 for onward submis
sion to Bangladesh Bank; The Deposit mobilization through market positioning,
Branding and Agent Banking of IBBL;
Comprehensive Risk Management Report (CRMR),
for the period from December 2016 to June 2017 for The position of non performing investment of the
onward submission of the same to Bangladesh Bank; Bank and the recovery process of the same on
regular basis;
Bangladesh Bank’s report on IBBL’s Comprehensive
Risk Management Rating; The position of assets quality, investment policy and
classified investment of the bank;
Risk Appetite Statement (RAS) of the bank for the
Year-2017; The position of conversion of non-funded investment
into funded investment through facilitating forced
Quarterly Stress Testing Reports for the quarter
investment;
ended December 2016, March 2017, June 2017,
and September 2017; The risk factors of all the new and existing products
of the bank;
Bank's own guidelines of Core Risk Management in
line with the guidelines of Bangladesh Bank; The position of capital planning of the Bank;
The Terms of Reference (ToR) of different core risk The Green Banking performance of the Bank on
committees of IBBL; regular basis.
Activities of Risk Management Coordination Com
The Minutes of the RMC Meetings containing various
mittee (RMCC) and the performance of the same;
suggestions and recommendations of the Management
Investment Portfolio of IBBL on regular basis; were placed to the Board for ratification on a regular
Position of Restructured Investment (Loan) of the basis.
Bank as on quarterly basis;

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Risk Management Report


Risk Management Framework and encountering various types of financial and non-financial
Procedure risks. The trends across the world tell that risk management
Risk is the chance of happening unexpected events that will experience even more sweeping change in the next
affect a bank’s equity, asset quality and profitability. It decade. Taking the worldwide importance into
implies the outcome of an action having an adverse consideration, IBBL gives the highest priority for risk
impact on the bank's capital, earnings or its asset quality management. IBBL operates within internally approved
which may either result in direct loss of earnings and risk appetite and external requirements relating to
erosion of capital or may result in imposition of capital, liquidity and leverage risk.
constraints on the bank’s ability to meet its business
objectives. Thus risk has become an essential part for The Bank continuously monitors and identifies risks. Our
banking to deal with. stability and profitability are determined by how we
manage risk. Significant resources are devoted to this
Risk management is the deliberate acceptance of risk critical function to ensure that it is well articulated, communicated
for profit-making. Its essential functions are to identify, and understood by all employees of the Bank as it is a
assess, monitor and to control the risk profile of the shared responsibility. IBBL’s risk management framework
bank and ultimately to mitigate all sorts of foreseeable is based on the industry standard i.e., the three lines of
risks. A sound risk management system enables its defence model which has been elaborated later on in
managers to take risks knowingly, mitigate risks where this report. It ensures that responsibility for managing
appropriate and strive to prepare for the future. It risk is shared across the Bank for identifying, measuring,
requires informed decisions on the tradeoff between risk monitoring and managing risk at all levels across all
and reward, and uses various financial and other tools types of risks. A strong risk management culture
to maximize risk-adjusted returns within pre-established reinforces the key elements of the risk management
limits. framework which comprise risk governance, risk
appetite and risk management tools.
The prime objective of risk management is to identify &
analyze risks and to manage their consequences that Ultimate responsibility for setting our risk appetite
affect the risk profile. There are six core risk areas statement and for effective management of risk rests
namely: Asset Liability Management Risk, Internal with the Board. Acting within an authority delegated by
Control and Compliance Risk, Foreign Exchange Risk, the Board, the Risk Management Committee has
Investment Risk, Money Laundering Risk and Information responsibility for oversight and review of prudential risks,
& Communication Technology Security Risk. To oversee including but not limited to investment, country
those risks, there are six separate Risk Management cross-border, market, capital, liquidity and funding, and
Committees. operational risks. The Risk Management Committee
also reviews reports on key cyber risks, threats, events,
Apart from those, there exist some other specific risks project updates and the Board’s top risk profile updates
such as concentration risk, country risk, transfer risk, as identified by the Information and Communication
residual risk, settlement risk, profit rate risk, equity Technology Wing.
market risk, liquidity risk, operational risk, compliance
risk, environmental and climate change risk, strategic IBBL reiterates its commitment to establish, maintain
risk, reputation risk and other material risk, which are and upgrade its risk management infrastructure,
also considered in IBBL. systems and procedures in the upcoming days by
maintaining proper co-ordination among all the units of
Now-a-days banking is not merely accepting deposit the bank to safeguard the interest of the depositors,
and making investment, rather it has become an era of employees, shareholders and all other stakeholders.

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Risk Management Philosophy accept risk in the normal course of business, the
Since IBBL is a shariah based bank, it has its own approach is at the core of the Bank’s value creation
philosophy to mitigate risks by observing shariah, local model. Our stability and profitability are determined by
and global rules and regulations. Side by side, it pays how we manage risk. Significant resources are devoted
proper attention to risk management. Following are the to this critical function to ensure that it is well articulated,
key elements of the Bank's risk management philosophy: communicated and understood by all employees of the
Bank as it is a shared responsibility. It is a dynamic and
disciplined function increasing in sophistication and
IBBL is committed to abide by Sharia’h principles in
subject to stringent oversight by regulators and other
all of its operations.
stakeholders.
The Bank duly emphasizes on the needs and priori
ties of its community i.e., depositors, employees, share It is important not only to fulfill regulatory requirements
holders and all other stakeholders. but also to improve financial and operational performance
IBBL considers sound risk management to be the of the bank. Strong and integrated risk management is
foundation of a stable financial institution. essential for the long-term sustainability of the bank’s
business. The comprehensive risk management policies
The Bank continues to adopt a holistic and integrat
and sophisticated risk management processes are
ed approach to risk management and, therefore,
required for systematic identification, measurement,
brings all risks together.
monitoring and controlling of all business risks. Bank’s
Risk management is governed by well-defined overall financial soundness can be measured only by
policies that are clearly communicated across the Bank. adopting a strong risk management process by com-
Since risk management is a shared responsibility, municating concise risk management standards to all
IBBL aims at building a shared perspective on risks concerned officials through adequate policies, directives,
that is grounded in consensus. operating procedures and training programs.
The Bank considers the risk-related issues in all
business aspects and shall continue to strive to Risk Management Objectives
maintain a conservative balance between risk and The Bank has its clear risk management objectives and
revenue considerations. a well-established strategy to address them, through
core risk and capital adequacy related risk management
Risks are reported openly and fully to the appropriate processes and encompasses all the activities that affect
levels once they are identified. its risk profile. At the strategic level, our risk management
All subsidiaries are guided by the principles objectives are to:
enshrined in the risk management policies of the Bank.
Identify the Bank’s significant risks, assess the same,
Risk officers work as allies and thought partners to taking appropriate mitigating steps to ensure
other stakeholders within and outside the Bank, and optimum and sustainable profitability;
are guided in the exercise of their powers by a deep
Formulate the Bank’s risk appetite and ensure that
sense of responsibility, professionalism and respect business profile and plans are consistent with it;
for other parties.
Optimize risk/return decisions by taking them as
IBBL is committed to provide quality services in a closely as possible to the business, while establishing
professional and responsive manner. strong and independent review and challenge structures;

Risk Management Approach Ensure that business growth plans are properly
Our risk management approach ensures that responsibility supported by effective risk infrastructure;
for managing risk is shared across the Bank for identifying, Manage risk profile to ensure that specific financial
measuring, monitoring and managing all types of risks deliverables remain possible under a range of
at all levels. It comprises risk governance, risk appetite adverse business conditions; and
and all other risk management tools as well. As we Help executives to improve the control and co-ordi
nation of risk taking across the business.

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Risk Management Principles & Policies introduced to manage risk are closely monitored on
In IBBL, there are approved policies and procedures an ongoing basis and adjusted to a new risk assess
covering all risk areas of business operations to ensure ment where necessary.
proper addressing of risks and to safeguard there from.
Risk management principles and policies in IBBL are as Risk Management Culture
follows: IBBL adopts at least but not limited to, the following
points to propagate risk culture across the Bank:
The Bank identifies and manages risks inherent in all
of its products, services and activities. It ensures that
the risks of products and activities new to them are The Board and the Management promote a respon
subject to adequate procedures and controls before sible approach to risk.
being introduced or undertaken, and approved in
advance by the Board or its appropriate committee. The responsibility of risk management is fully vested
in the Board of Directors, which in turn delegates this
IBBL develops and utilizes internal risk rating to senior management;
systems in managing all of its risks provided the
rating system is in line with the regulatory instructions The risk management officials enjoy sufficient
professional independence and stature;
and consistent with the nature, size and complexity
of the Bank's activities. The Bank pays close attention to both quantifiable
and unquantifiable risks;
Risk management is carried out in a decentralized
manner; risk management, which is geared towards The Bank’s management ensures that risk and risk
financial resources as well as strategic and opera management awareness is enshrined throughout the
tional planning, is considered a primary responsibility Bank; and
of the CEO, CRO and Risk Management Units of The Bank avoids any business where the associated
different Wings, Divisions and operating units. risks cannot be objectively assessed or managed.
The risk policy is geared in particular towards both
financial and non-financial risks. The Board of Risk Management Framework
Directors of the Bank determines the risk strategy At present banks have become a risk intermediary from
and overall risk appetite and defines accountabilities, its being a financial intermediary. In this era of competition,
reporting structures, documentation and manage banks are exposed to severe competition and hence are
ment of identified risks, and thresholds. compelled to encounter various types of financial and
non-financial risks. Profits are the reward for successful
IBBL establishes and enforces internal controls and
risk taking in business. On the other hand, excessive
other practices to ensure that exceptions to policies,
and poorly managed risk can lead to losses and thus
procedures and limits are reported in a timely manner
endanger the safety of a bank’s depositors. Accordingly,
to the appropriate level of management.
IBBL works to mitigate the risk profile of the bank.
The risk management policy permits risk-taking
authorities along with assigned responsibilities Risk Management Framework is set of rules, regulations,
consistent with the expertise of bank personnel, practices and risk management standards which are
preferably having an in-depth understanding of risk practiced for overall risk management of the bank. In
management principles. line with global and national level risk management
Policy exceptions are properly approved, having framework, IBBL has its own Risk management framework
formal procedures to report how and why exceptions for overall risk management of the Bank. Through
have occurred, and how they have been resolved. disciplined Risk Management Framework we manage
both individual and enterprise-wise risks, with the objectives
IBBL is required to manage and report risks on a
quarterly basis to the Bangladesh Bank in accordance of maximizing risk-adjusted returns while remaining
with the prescribed Key Risk Indicators (KRIs). within our risk appetite limit. The Board of Directors
exercises oversight and provides guidance to an
Bangladesh Bank is to ensure that the measures experienced senior management group who works

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closely with their teams in managing risk.


Understanding the highly specialized nature of manag-
ing risk, decision-making is highly centralized through a
structure of senior risk management committees.

The risk management framework of the Bank is shown as under:


Risk Management
Committee of the
Board
Head of Risk
Co-ordination
Committee Managing Director

Head of Risk
Management
wing

Foreign Asset Liability ICC Risk ICT Risk Money Laundering


Investment Risk
Exchange Risk Management Management Management Risk Management
Management Management
Committee Committee Committee Committee Committee
Committee

Supervisory
Review Process Basel Unit
Team

Three Lines of Defence


The Bank’s risk management framework is based on the three lines of defence model which is the industry standard
and may be represented as follows:

1st Line of Defence


Day to day Risk Management & Management Control
Business Units
Support Functions

2nd Line of Defence


Risk Oversight Policy & Methodology
Board’s Risk Management Committee Risk Management Wing
Chief Risk Officer Operational Risk Management Committee

3rd Line of Defence


Independent Assurance
Audit Committee External Audit
Internal Audit Supervision of Regulators

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Responsibility and accountability for risk management has a strongly disciplined risk governance structure
remain at all levels within the Bank, from the Board, managed by an experienced senior team which enables
down through the organization to each business the continuous support of our clients. We focus on
manager, support functions and risk owner. ensuring risk and compliance work effectively as control
functions to holistically identify and manage risks.
Board’s Oversight on Risk Management
The overall responsibility and oversight of risk management We believe, a healthy risk culture owned collectively by
of the Bank are vested with the Board of Directors. The everyone starting from top to bottom within the Bank is
Board is responsible for approving risk appetite, which essential for successful delivery of our business
is the level of risk the Bank desires to ascertain in quest objectives and to facilitate safe and sustainable growth.
of its business objectives. It regularly overviews the risk An effective risk governance framework requires a vast
exposures and key controls and thereby oversees the communication within the bank about risk, both across
management of the most significant risks. The Board the institution and through reporting to the Board and
monitors the “tone at the top,” our risk culture, and Senior Management.
oversees emerging and strategic risks.
Bank’s Risk Management Committee (RMC) focuses on
In compliance with the law of the land as well as risk governance and provides a forward-looking view of
Bangladesh Bank directives, IBBL formed the Board’s risks and their mitigation. RMC has responsibility for
Risk Management Committee (RMC) long ago, which in oversight and advise the Board on the bank’s risk
turn, is entrusted with the development of the Bank’s appetite, tolerance and strategy, systems of risk
Risk Management Policies and monitoring of due management, internal control and compliance. In
compliance of the same through the Top Executives i.e., carrying out its responsibilities, the RMC is closely
Risk Management Co-ordination Committee (RMCC). supported by the Chief Risk Officer (CRO). The CRO
arranges a top management level meeting namely
The Committee monitors the Bank’s risk profile against RMCC meeting on monthly basis, chaired by the Head
the agreed appetite. Where actual performance differs of Operations. In the RMCC meetings, the top-most
from expectations, the actions are being taken by important risk affairs are discussed and their possible
management and are reviewed to ensure that the RMC mitigative decisions at their level, are taken to
is comfortable with them and guides the management disseminate across the Bank for ultimate execution and
for taking realistic steps. Following are the specific roles if not within their authority, are forwarded to the RMC,
of the Committee: wherein they further discuss and approve, if deem fit.
Approval of Risk Identification and Mitigating Techniques; The RMC, however, also discusses other business
functions on risks within their respective areas of responsibility.
Preparation of Organizational Structure;
Review of Risk Management Policy and Approval; Role of the Risk Management Wing
Maintaining Information and Reporting System; In line with Bangladesh Bank risk management
guidelines, IBBL has restructured its risk management
Supervising the overall risk management policy and
process, which, at management level, is being overseen
Miscellaneous issues like submission of the
by a separate wing namely Risk Management Wing
decisions and recommendations of the committee
(RMW). The RMW plays the following specific roles:
before the Board quarterly, compliance of the
instructions of the regulatory authorities from time to Designing bank’s overall risk management strategy;
time, evaluation report of the internal and external Developing and overseeing implementation of stress tests;
audit reports etc.
Developing, testing, and observing use of models for
measuring and monitoring risk;
Risk Governance at Management Level
A disciplined risk management culture and framework Informing the Board and all Risk Committees about
facilitates oversight and accountability for risks at all the appetite for risk across the bank;
levels of the organization and across all risk types. IBBL Monitoring the risk-taking activities and risk expo

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sures on an on-going basis to ensure that they are in insurance, indemnity, or other pure risk assumptions
line with the Board-approved risk appetite, risk limits or provisions prior to the execution of the contracts;
and corresponding capital or liquidity needs
Establishing an early warning or trigger system for
Communicating views of the Board and Senior breaches of the bank’s risk appetite or limits; and
Management throughout the bank;
Influencing and, when necessary, challenging
Independently monitoring limits, in addition to the material risk decisions of the Bank.
monitoring done by business units;
Establishing risk management policies and procedures; Risk Management Process
Business managers are responsible for maintaining an
Formulating guidelines on the handling of all property acceptable level of internal control commensurate with
and liability claims involving the organization;
the scale and nature of operations, and for identifying
Developing and implementing loss prevention/loss and assessing risks, designing controls and monitoring
retention programs; the effectiveness of these controls. We continue to
Identifying and quantifying bank’s exposures to embed policies and procedures, introduce new
material loss; technology solutions and support the cultural change
needed to effectively manage financial crime risk.
Securing and maintaining adequate loss coverage at
the most reasonable cost;
However, the risk management process is typically
Adopting proper financial protection measures segregated into five steps: establishing the context, risk
through risk transfer, risk avoidance, and risk reten identification, risk analysis, risk evaluation and risk
tion programs; treatment. From each step, there is sufficient option for
Determining the most cost‐effective way to communication, consultation, reporting, monitoring and
construct, refurbish, or improve the loss protection review system. The flow diagram mentioned below
system of any facility leased, rented, purchased, or shows the process in details.
constructed by the bank;
Managing claims for insured and uninsured losses;
Participating on all contract negotiations involving

Establishing the Context


Internal & External Factors
Objectives
Appetite for Risks

Risk Assessment
Communication & Consultation

Risk Identificatikon
Describe the risk
Find Risk Source
Monitor & Review

Potential Consequence

Risk Analysis
Understand the risk
Determine the level of risk

Risk Evaluation
Consider Risk Vs Appetite
Determine Acceptability

Risk Treatment
Treat
Share
Retain
Avoid

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Core Risk Management Basel Accord Implementation


In accordance with the guidelines as prescribed by the In Bangladesh, the Central Bank is well aware to keep
Bangladesh Bank (BB), IBBL exclusively manages 6 (six) the capital of individual Bank as per international
core risks. The Bank has designed and implemented its standard and that is why Bangladesh Bank issued
own Risk Management Guidelines and has formed six Guidelines on Risk Based Capital Adequacy (RBCA) for
core risk management committees for conducting and Banks under Basel III. These guidelines will be able to
evaluating separate meetings at least on monthly basis. make the regulatory requirements more appropriate and
The major concerns of the committees are as follows: will also assist the banks to follow the instructions more
efficiently for smooth implementation of Basel III framework
1. Investment Risk Management Committee: in the banking sector of Bangladesh.
supervises and monitors investment concentration,
investment risk grading, corporate clients rating, non To ensure smooth transition to Basel III, IBBL has made
performing investment, residual risk against invest appropriate arrangements for meeting the minimum
ment, provision against classified investment, Basel III capital ratios, full regulatory adjustments to the
investment mix, asset quality etc. components of capital etc. Consequently, we do believe
that Basel III capital regulations would be fully
2. Foreign Exchange Risk Management
implemented as on January 1, 2019.
Committee: oversees foreign exchange risk,
treasury, net open position, import & export
To implement Basel III guidelines, we have formed
business, dealing room operations, anti-money
committees as under:
laundering aspects in foreign exchange transactions
a) Basel Unit, and
and remittance etc.
b) Supervisory Review Process Team.
3. Information & Communication Technology
Risk Management Committee: monitors and 1) Basel Unit
supervises the risks related to data security, physical Considering the changing global concepts and new
security, network security, disaster recovery, fraud, inclusions in Basel Accords, a Basel Unit has been
forgery, system failure and business continuity etc. formed headed by an Additional Managing Director, to
4. Money Laundering Risk Management implement the action plan of Basel Accords in the Bank,
Committee: looks after the money laundering communicate issues related to Basel implementation, to
activities, STR (Suspicious Transaction Report), CTR attend Quantitative Impact Studies (QIS) and accountability
(Cash Transaction Report), KYC (Know Your for the compliance of Basel Accords etc. Previously
Customer) and TP (Transaction Profile) related formed Stress Testing Committee, to foresee the total
compliances. The committee also supervises and risks and to strengthen the Bank’s capital base, has
monitors the entire transactional activities of the been merged with this unit.
Bank including money laundering aspects involved
with foreign exchange transactions. 2) Supervisory Review Process Team
Banks also face some other risks which varies from
5. Internal Control and Compliance Risk
country to country, business to business. Hence, banks
Management Committee: assesses and
are somewhat independent to identify and assess the
mitigates the risks related to compliance with
additional risks and hence are advised by Bangladesh
regulatory requirements, set rules of the Bank,
Bank to form a Supervisory Review Process (SRP) Team
internal checking system, lapses, fraud, forgeries,
in each Bank. IBBL has formed such a team which is
misappropriation, defalcation, violations of the set
headed by the Managing Director & CEO of the Bank.
rules etc.
This team is entrusted with the responsibility to prepare
6. Asset Liability Management Committee the Internal Capital Adequacy Assessment Process
(ALCO): looks after the asset-liability risk, liquidity (ICAAP) document under pillar-2 of Basel III for onward
risk, Investment Deposit Ratio (IDR), deposit mix, recommendation to RMC and approval from the Board.
investment mix, gap analysis etc. under direct Upon getting approval from the Board the ICAAP documents
guidance of the Managing Director & CEO. are to be submitted to Bangladesh Bank.

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Relationship of Risk Management with Off-site Supervision of Bangladesh Bank on quarterly


Other Units basis.
Risk management activities are directly or indirectly
related with different units of the Bank. The following Implementation of Basel-III
flow diagram shows the relationship in details. Bangladesh Bank vide BRPD Circular No. 18 dated
December 21, 2014 issued Guidelines on Risk Based
Capital Adequacy (Revised Regulatory Capital Frame-
work for Banks in line with Basel-III) wherein a roadmap
for implementing Basel-III framework is mentioned
which is as under:

Board’s RMC

MD & CEO Phases of Basel-III Implementation


Enquiries
Analysis
Business Units Reporting Regulators
Reporting
Risk
Management 15.00%
Wing Risk
Enquiries Summary Rating 2.50%
Auditors Agencies 1.25% 1.875%
Reporting 10.00% 0.625%
4.50% 4.00% 4.00% 4.00%
4.50%
RMCC
RWA Basel Unit & 5.00% 1.00% 1.00% 1.50% 1.50% 1.50%
Stress Testing Report
ICAAP SRP Team 4.50% 4.50% 4.50% 4.50% 4.50%
Basel Unit Recommend
Recommend
Report &

0.00%
Financial Analysis 2015 2016 2017 2018 2019
Budget Operations
Administration Core Risk Reporting
Division Capital Allocation CET-1 Capital Additional-1 Capital T-2 Capital Capital Conservation Buffer
Committees

The diagram shows that Risk Management Wing (RMW)


is directly involved with the total risk management
process of the Bank. The major job of RMW is to
According to the Guidelines on Basel-III, the minimum
integrate the risk issues, risk monitoring and reporting.
requirement of tier-1 capital will be 6% in 2017, 2018
Other units provide relevant data to RMW and it makes
and 2019. Presently IBBL possesses 8.58% tier-I
recommendation on capital allocation, budgeting and
capital which is much higher than the required ratio in
pricing, portfolio structuring, liquidity management,
2017 i.e., 6%.
setting risk appetite, compliance culture etc. based on
the risk reports and Risk Management Papers (RMPs). The Capital Conservation Buffer (CCB) amounting to
1.25%, 1.875% and 2.50% which is to be built by
Risk Management Meeting 2017, 2018 and 2019, respectively; the common equity
The Management Committee (MANCOM) of the Bank tier-I capital including CCB is 7.25% still IBBL is above
has also formed a strong Risk Management Co-ordination the requirement as on 31.12.2017.
Committee (RMCC) comprising heads of all the risk The total Minimum capital requirement including CCB
taking organs of the Bank which is arranged and as per Basel-III is 11.25% in 2017 where IBBL’s Capital
organized by Risk Management Wing. The committee to Risk weighted Assets Ratio (CRAR) as on December
sits at least once in a month or more when necessary. In 2017 is 11.30%.
the meeting of RMCC, all the existing/identified and
foreseeable/potential risks issues are discussed. Therefore, in the context of capital adequacy for
Afterwards, recommendations are made and forwarded implementation of Basel-III, IBBL is in a secured
to the concerned risk taking organs to address, measure position. Moreover, above 98% of the corporate clients
and to take required steps to mitigate the risk factors. All are rated by ECAIs and the rating efficiency is around
the meeting minutes along with all the Risk Management 60% in terms of outstanding exposure and risk weight.
Papers (RMPs) are reported to the Department of

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Risk Management Disclosures optimum level;


Risk Appetite Increasing capital adequacy ratio for adopting
Risk appetite describes the types and quantum of risks Basel-III Capital Accord;
that the bank is prepared to take in executing its strategy
Maintaining adequate capital base for adopting
and sets out the key business initiatives and the likely
Basel-III Capital Accord;
financial effects of those initiatives. It is the maximum
amount and type of risks that the Bank is willing to Improving Asset Quality;
assume in pursuit of its strategy. Increasing profitability, ROA (Return on Asset), ROE
(Return on Equity) and thereby protecting the interest
The Bank’s risk appetite is established by the Board and of the stakeholders;
reviewed when necessary. The Bank’s appetite for risk is
Restructuring and diversification of the investment
governed by the following: portfolio;
Optimization of gap and duration gap between
high-quality risk assets as measured by ratio of assets and liabilities;
non-performing investments to total investments and
maximum average internal risk rating of the invest Reducing RWA through portfolio restructuring;
ment portfolio; Optimum rating of corporate and SME Investment clients;
a diverse investment portfolio to ensure that there Improving the ratio of RWA and total assets;
are no undue concentration concerns taking into Reducing Sharia’h compliance risk to the optimum level;
consideration the business unit, business sector,
country at risk and asset portfolio tenor; Introducing AML compliance project Phase-II by
appointing Kroll, a world-famous ML solution provider, etc.
losses due to operational risk to be constantly
monitored and to be lower than industry averages; Priorities for 2018
financial and prudential ratios to be pegged at levels Improving Asset Quality by reducing Non Performing
more conservative than regulatory requirements Investment;
Investment to Deposit Ratio (IDR), Capital Adequacy,
Deposit Concentration etc.; Maintaining Investment-Deposit Ratio (IDR) at
comfortable level;
the Bank strives to minimize the independent
indicators of excessive risk appetite like overdue Maintaining optimum liquidity;
audit queries, adverse publicity and fines & regulatory Maintaining Liquidity Coverage Ratio (LCR);
penalties; Maintaining Net Stable Funding Ration (NSFR);
The Bank does not compromise its reputation Implementing Disaster Recovery System;
through unethical, illegal, unprofessional conduct or
Implementing Sharia’h Compliance up to the satis
violation of the commandments of Islam; and
factory level;
The Bank has a zero appetite for association with
Diversifying risk by portfolio management of the Bank;
disreputable individuals, entities and activities.
Upholding AML status of the Bank towards Global
Key developments in 2017 standard by implementing the suggestions as given
by Kroll and so on.
Maintaining optimum liquidity;
Maintaining Investment-Deposit Ratio (IDR) and Implementation of Core Risk Management
thereby complying with Regulatory requirement; Guidelines and other specific risks
Maintaining Liquidity Coverage Ratio (LCR) at the
optimum level; Bangladesh Bank has issued six core risk guidelines
and Risk Based Capital Adequacy (RBCA) Guidelines
Maintaining Net Stable Funding Ratio (NSFR) at the
that provide concepts, methods and processes with

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regards to the respective risk areas. IBBL follows those collateral types, client segments and sectors. The
guidelines and also reviews/ updates them on regular Bank’s Investment Risk Management Policy is approved
basis & gets approval from the Board. Bangladesh Bank by the Bank’s Board of Directors, which plays a central
also conducts inspection on implementation of the core and strategic role in managing daily business activities.
risk guidelines of the bank each year. Lastly, Bangladesh The policy defines the criteria that incorporate client
Bank conducted their inspection on 08.10.2017 based selection, due diligence, early alert reporting, tolerable
on the accounts as on 30.06.2017 and mentioned their levels of concentration risk and portfolio monitoring, in
observations in the respective reports. IBBL, being the line with the Bank’s risk appetite. The approach is to
compliant Bank, has immediately taken effective avoid large investment risk on a counterparty or portfolio
initiatives to ensure implementation of all the observations level by applying stringent standards combined with
of the central bank and meanwhile implemented most of the sound collateralization where feasible. The policy is
observations and have communicated to the competent reviewed regularly by the Board of Directors and updated
authority of the central bank well ahead of the deadline. throughout the year to ensure consistency with the
Bank’s business strategy. A monthly Investment Risk
Apart from the above, there are some other specific Management Committee meeting chaired by the Head
risks that are covered by SRP Guidelines and RBCA of Investment Wing drives policy decisions and
Guidelines of Bangladesh Bank. The Risk Management implementation plans.
Wing (RMW) works on assessing and developing
controls for managing these risks. RMW also manages Investment Processing and Approval
those risks, which are, side by side, discussed in different Structure
parts of this report. Since IBBL deals with the largest investment portfolio of
the country amongst the private sector banks, it has
Investment Risk Management specific policies in place for inducting, dealing, processing,
Investment risk is the risk of financial loss if a customer sanctioning, handling overdue and non-performing
or counterparty fails to meet a payment obligation under investments of the Bank. The Board of Directors
a contract as per agreed terms. In many cases, this delegates sanctioning power segregated from the
failure or inability or unwillingness of the borrower to Branch Incumbent up to the Head Office Executive with
repay bank’s dues turns into a default event. different limits as deem fit. The investment approval
procedure is being followed in accordance with the
Financial Stability Department of Bangladesh Bank in its approved policy of the Bank.
Financial Stability Report 2016, Issue 7, June 2017
reveals that the share of Risk Weighted Assets (RWA) The Bank adopts an internal risk grading system and
attributed to credit risk was 87.20 percent of the total incorporates Basel requirements of facility rating and
RWA of the banking industry of the country as at the counterparty rating for evaluation of investment proposals.
end of December 2016. In IBBL perspective, investment The risk grading framework comprises 8 (eight) grades
risk exposure was 88.41% in 2016 and 88.62% in of varying degrees of risk as indicators for the investment
2017. Thus investment risk is the key factor of IBBL’s dealing officers to evaluate and arrive at suitable risk-reward
risk management for determination of capital requirement, trade-offs in their propositions. These risk grades are
profitability, liquidity and many other risk elements reviewed by the Sanctioning Authority before final
involved therein. IBBL handles this risk through a framework approval of the investment. This Investment Risk Grading,
that sets out policies and procedures covering its widely known as IRG, is done internally across the Bank.
measurement and management. There is a clear segregation On the other hand, risk rating is also performed externally
between transaction originators at branch level and through appointing well-recognized external risk rating
sanction approvers at Head Office level. agencies to meet up the requirement of Basel-III.

Investment Risk Management Policy


IBBL manages its investment exposures following the
principle of diversification across products, regions,

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Investment Portfolio and Risk Weighted of financial assets, liabilities and off-balance sheet items
Assets resulting from adverse changes in market variables,
To assess investment risk and to abide by the Risk which could negatively impact the financial condition.
Based Capital Adequacy Guidelines as prescribed by Market risk is evolved from the following four components:
Bangladesh Bank, IBBL follows the standardized Interest rate related instruments,
approach. According to the aforesaid guidelines, the
Foreign exchange position,
risk weight categories are 0%, 20%, 40%, 50%, 60%,
75%, 80%, 100%, 120%, 125% and 150%. Risk weight Equity price, and
wise exposure of the Bank is as under: Commodity price.

Risks derived from interest rate related instruments and


commodity price are irrelevant for IBBL because the
Risk Weight Wise Exposure
0%
Bank does not make any investment over interest rate
20%
5% related instruments or commodities.
20%
24%
15% 40% Market Risk Management System
50% The Bank has its own Market Risk Management
0% 60%
System, which includes Asset Liability Risk Management
(ALM) and Foreign Exchange Risk Management under
75%
10% 9%
core risk management guidelines. The Treasury Division
80% manages market risk covering liquidity, profit rate,
0%
100% foreign exchange and equity price risks with oversight
125%
from Asset-Liability Management Committee (ALCO)
comprising senior executives of the Bank, convened by
35% 150%
the Managing Director & CEO of the Bank. ALCO meets
at least once in a month to monitor and oversee, among
others, the overall market risks.
Portfolio wise Exposure
Particulars 2017 2016 Increase/Decrease Policies and processes for mitigating
Total on Balance Sheet Assets 89,996.13 79,769.96 10,226.17 market risk
Total RWA 51,309.79 46,721.24 4,588.55 IBBL has put its Asset Liability Management policy by
Efficiency in RWA 57.01% 58.57% (1.56 %) setting various risk limits for effective management of
Total Eligible Capital 5,795.87 5,055.65 740.22 market risk and ensuring that the operations are in line
CRAR 11.30% 10.82% 0.48% with bank’s expectation of return to market risk. The
effectiveness of approved policies is monitored on an
Capital Requirement against on-going basis. Forex Open Position limits (Day limit /
Investment Risk Overnight limit), Deal-wise cut-loss limits, Stop-loss
88.62% of the total Risk Weighted Assets (RWA) is limit, Profit / Loss in respect of cross currency trading
against the Investment Risk Exposure. Amongst are properly monitored and exception reporting is regularly
Tk.454,683 million of RWA for investment risk, 93.36% carried out. Holding of equity instruments is monitored
arises from the on Balance Sheet Exposure and the rest regularly so that the investment remains within the limit
of Tk. 30,171 million i.e. 6.64% of RWA arises from the as set by Bangladesh Bank and in the Risk Appetite.
Off Balance Sheet Exposure. Thus the total RWA of Tk. ALCO analyzes market and determinesstrategies for
513,098 million against which Minimum Capital mitigating market risks. Reconciliation of foreign currency
Requirement is Tk. 51,310 million (10% of the RWA). transactions is also carried out regularly.

Market Risk Approach followed for Market Risk


Market risk refers to the risk of losses against fair value IBBL follows Standardized (Rule Based) Approach to

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assess market risk. In such approach, Banks have to Bank’s internal procedure for assessing the specific risk
maintain capital for various market risks separately. situation, ongoing adjustment and further development
IBBL measures impact on profitability and impact on of new methods of risk management and internal
asset prices under market risk through Maturity Gap control, covering external factors as well as risk areas
Analysis, Sensitivity Analysis, VaR, and Mark to Market. which are not taken into account or partially taken into
Capital requirement is the aggregate capital requirement account while calculating Minimum Capital Requirements,
calculated for each of the risk sub-categories. quantifying the risks under pillar 2 of Basel-III, Stress
Testing, Internal Capital Adequacy Assessment process
As discussed earlier, IBBL does not deal with any (ICAAP), setting capital targets that are commensurate
interest related instruments rather it purchases with the Bank’s risk profile and control environment etc.
goods/commodities from the seller and simultaneously As per Bangladesh Bank guidelines, the Bank has
sells the same to the ultimate buyer. On the other hand, formed a Supervisory Review Process Team (SRPT) for
the Bank does not hold the goods/ commodities as adequate supervision of capital functions and risks.
owner of the same at any stage. As such, IBBL has no
exposure under these two components, out of four. Internal Capital Adequacy Assessment
However, in case of equities and foreign exchange Process (ICAAP)
position, the Bank manages them separately. The ICAAP includes regulations of the bank’s own supervisory
Market Risk Exposure of IBBL has been shown in the review of capital positions aiming to reveal whether it
Basel Disclosure part of this report. has prudent risk management and sufficient capital to
cover its risk profile. It ensures that the Bank maintains
Operational Risks an amount of capital for additional risk that was not
Operational Risk is the potential loss arising from breakdown covered in Pillar I of Basel III.
in Bank’s systems & procedures and corporate governance
practices that results in human error, fraud, failure, In May, 2017, IBBL revised its own ICAAP document as
damage of reputation, delay to perform or compromise directed by Bangladesh Bank which is duly approved by
of the Bank’s interest by employees. The policy for the Board. In accordance with the document, IBBL
measuring and managing operational risks is approved identified & assessed the risk areas which the bank
by the Board. The Management Committee (MANCOM), faces in its day to day business and calculated capital
Risk Management Committee (RMC) and Risk Management charge there against. As per the approved ICAAP document,
Wing (RMW) regularly review different aspects of operational IBBL conducts rigorous review on its risk exposure and
risks and suggest for appropriate policies, tools & allocates the required capital for the same which are
techniques to mitigate them. annually being reported to the Central Bank.

Basic Indicator Approach is being used by IBBL for Stress Testing


assessing the Operational Risks. Under this approach, Stress testing is an important risk management tool that
average of the Gross Incomes of last three years is provides an indication of how much capital might be
taken as the determinant for operational Risks. The last needed to absorb losses in different stressed situations.
three years’ average Gross Income of the Bank was Tk. IBBL has a rigorous and comprehensive stress-testing
31,385.72 million. Therefore, the capital charge against program in place.
Operational Risk was Tk. 4,707.86 million (15% of the
average Gross Income) The Bank conducts periodical stress tests and assesses
stress on the capital both giving individual and combined
Supervisory Review Process shocks on different aspects. In case of giving individual
The key principle of the Supervisory Review Process shock; deterioration of performing investment, increase
(SRP) is that banks have a process for assessing overall of NPIs due to default of top large borrowers, negative
capital adequacy in relation to their risk profile and a shift in NPI categories, decrease in FSV of collaterals,
strategy for maintaining their capital at an adequate profit rate, foreign currency appreciation, equity shocks
level. IBBL is committed for continuous improvement of are considered. In case of combined shock; FSV of the

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collateral decreases, NPIs increases, negative shift in diversify its investment portfolio in more potential
NPI categories, profit rates, foreign currency appreciations sectors & areas and distribution of the risk factors.
etc. are considered simultaneously.
Asset-Liability Management Risk
In case of stress testing, the following risk factors are
IBBL has a dedicated committee namely Asset Liability
considered:
Management Committee (ALCO) comprising the
1. Investment Risk top-most Executives of the Bank to make important
decisions related to the risks associated with Balance
i) Increase of NPIs (Overall)
Sheet, Liquidity & Profit Rate of the Bank.
ii) Increase of NPIs due to default of Top large borrowers’ fall in
iii) Forced sale value of mortgaged collateral The ALCO generally meets at least once in every month
iv) Negative shift of NPIs Categories and reviews liquidity requirement, the maturity of Assets
v) Increase of NPIs in particular 2 (two) sectors and Liabilities, Deposit and Investment pricing
2. Profit Rate Risk strategy/transfer pricing, sensitivity of assets and liabilities,
key management indicators and the Liquidity Contingency
i) Simple Sensitivity Analysis
Plan of the Bank. In each meeting, the key points of the
ii) Duration GAP Analysis discussion are minuted and the action points are
3. Exchange Rate Risk
highlighted to ensure implementation. In compliance
4. Equity Price Risk
with the regulatory requirement, the management
5. Liquidity Risk and
6. Value at Risk (VaR) reviews the Asset Liability Management (ALM) Manual
and its components on a regular basis.
Risks of Stress testing are carried out assuming three
different hypothetical scenarios namely: Liquidity Risk
i) Minor level Shocks, In Bangladesh, both interest based and Sharia’h based
ii) Moderate level Shocks, and transactions take place simultaneously and IBBL is
running in such a mixed economy. But Sharia’h based
iii) Major level Shocks.
money market is yet to be flourished and is still in the
way of development. Being the Sharia’h based bank,
The results of Stress Testing of all the quarters of 2017
IBBL cannot lend or borrow money from the conventional
reveal that the Capital to Risk-weighted Asset Ratio
money market. As such, it has to remain always concern
(CRAR) of IBBL remains above 10% for both individual
and vigilant regarding liquidity risk. IBBL continuously
and combined shock at minor level.
monitor the liquidity ratios and periodically conducts
GAP and Duration GAP analysis. As on 31.12.2017, the
Investment Concentration Risk
key liquidity ratios were as under:
The Bangladesh Economy is not still well distributed and
IBBL is functioning under such an economy. Thus IBBL
has to run its activities in accordance with the supply Name of the Ratio Standard Ratio IBBL’s Scenario

and demand rule of the Economy. The Bank is now Cash Reserve Ratio (CRR) 6.50% 9.20%

exposed to some of the specific sectors that are highly Statutory Liquidity Ratio (SLR) 5.50% 9.24%

inviting concentration risk. It has also concentrated its Investment Deposit Ratio (IDR) <90% 87.80%

exposures in some specific regions. Although these


regions are economically important, IBBL has the scope
to come out from such concentration gradually having a
structural perspective plan. IBBL has the scope to

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Contingency Planning Internal Control and Compliance Risk Man-


While it is the Bank’s policy to ensure that it has agement
sufficient liquidity to meet any emergency at times, it is
possible that the Bank may experience liquidity problems IBBL has a separate wing namely Internal Control &
due to both external and internal conditions. Accordingly, Compliance Wing which consists of three Divisions.
the bank has a liquidity contingency plan in place to These are: (i) Audit & Inspection Division (ii) Compliance
overcome such situations. Division, and (iii) Monitoring Division. The divisions are
established to develop sound, sustainable and secured
Measuring Liquidity Risk - Maturity Mis- growth of the Bank.
match Approach
The mismatch approach measures liquidity through the The Audit Committee of the Board reviews the lapses
difference or mismatch between inflows and outflows in identified by the Audit & Inspection Division of the Bank,
various time-bands. Mismatches are measured on a net Bangladesh Bank and other regulators. Appropriate
cumulative basis on the predefined time buckets. actions are then taken as per decisions of the said Committee
Behavioral method is being followed to measure Inflows for protecting the Bank’s interest. Thus Internal Control
and Outflows. & Compliance (ICC) system of IBBL always plays active
role in mitigating ICC risk and contributes in the process
Foreign Exchange Risk Management of maintaining compliance across the Bank.
Foreign Exchange risk is the risk of loss from movements
in cross-currency exchange rates between foreign Money Laundering Risk Management
currencies and from changes in the value of the home or In order to ensure the best corporate governance practices
functional currency against other currencies. The foreign and aiming at protecting the Bank and its Employees,
exchange risks of IBBL are identified, measured, monitored Shareholders, Management and Customers, IBBL is
and controlled by treasury division through treasury front committed to comply with all the applicable Rules of the
office i.e. dealing room, treasury mid office, treasury Anti Money Laundering Act, Anti-Terrorism Act. For
back office and ALM desk. mitigating risks the Bank has formed Central Compliance
Committee (CCC) under the leadership of the Chief Anti
The foreign exchange risks are mitigated through proper Money Laundering Compliance Officer (CAMLCO). IBBL
market analysis, adherence to different dealing limits has also established a separate division namely Money
such as daylight, overnight, stop loss limit, off premises Laundering and Terrorist Financing Prevention Division
dealing limit Management Action Trigger (MAT) and (ML & TFPD) in its organogram. An independent CCC of
counterparty credit/investment limits as proposed by the Bank is performing supervisory and monitoring
treasury mid office and approved by the competent activities on Anti-Money Laundering and Anti Terrorism
authority of the Bank. Current developments on FX Financing. Anti Money Laundering Compliance Units are
market and risk appetite of the Bank are also addressed also functioning under the leadership of the Branch
for minimizing the foreign exchange risk of the Bank. Anti-Money Laundering Compliance Officer (BAMLCO)
and Zonal Anti-Money Laundering Compliance Officer
The dealing room of the Bank performs the deals at Branches and Zonal Offices, respectively, who
independently; the treasury back office checks, independently review the transactions of the accounts
confirms and settles the deal on due time and treasury to verify Suspicious Transaction Report (STR).
mid office monitors the adherence of the limits for better
risk management of FX transactions. All foreign IBBL has introduced uniform Account Opening Forms,
exchange transactions are revalued at weighted KYC (Know Your Customer) profile, and TP (Transaction
average exchange rate as provided by Bangladesh Profile) and CTR (Cash Transactions Report) in the bank
Bank at the end of each month. All Nostro accounts are as per instruction of Bangladesh Bank. To establish
reconciled regularly and also reviewed by the management. fruitful Anti Money Laundering drive at Branch level,
The exchange position of the Bank is maintained at the IBBL introduced ALM rating systems through self
end of the day within the stipulated limit fixed by the assessment report & independent testing procedure as
Bangladesh Bank. per instruction of Bangladesh Bank.

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Information & Communication Technology customer treatment, products and funding and the
Risk Management risk appetite of other risk categories; and
The Bank has adequately addressed Information & 2. External source: Economic, technological, political,
Communication Technology (ICT) Risk which ensures social competitive behaviour.
ICT security functions and operations in a more effective
manner. It is an in-depth exercise and continual Mitigating Strategic Risk
process. The ICT Risk Management works mainly In order to minimize strategic risk, the bank adopts
include minimizing financial and image loss to the the following steps:
institution in all events such as natural disasters,
1. Involvement of all levels of management in formulat
technological failure, human errors etc. The Bank uses
ing strategy
own developed Core Banking Software to perform all
types of transactions including Local/Online/Internet in a 2. Establishment of a robust strategic planning process
secured way. To take care of its core banking system, a 3. Regular reviews on incorporating changes to
separate security module has been incorporated in the strategic environment.
software which manages different roles for different
users. All financial transactions can be tracked for future Corporate Governance Framework
audit purposes. The Bank uses Central Data Centre The Board and the management of IBBL are committed
travelling through network uses encryption and to the long-term success of IBBL as its being a leading
decryption mechanism. Bank in the South Asia and generating stable and
sustainable returns for the shareholders. Fundamental
Strategic Risk to the Banks strategy are the standards of Corporate
It refers to the risk of a potential earnings downside due Governance, in particular those defined by the Central
to revenues and/or costs underperforming plan targets. Bank of Bangladesh (BB) and other guidelines in that
Strategic Risk may arise from poor strategic regard.
decision/positioning, failure to execute strategy or lack
of effective responses to material negative plan deviations The Bank has developed its Corporate Governance
caused by either external or internal factors (including framework to the highest standards as defined by the
macro, financial and idiosyncratic drivers). Strategic regulatory authorities. It is embedded into the
Risk has been defined as part of overall Business Risk. day-to-day business and practices of the Bank and has
evolved to reflect the Bank’s strategy, lessons learnt and
The key aim of Strategic Risk Management is to the global leading practices. The Bank as a whole, along
strengthen the bank´s earnings resilience and protect it with the Board, Senior Management and all employees
against undue earnings volatility to support overall risk are collectively responsible for integrating the Corporate
appetite targets (especially CET 1 ratio and Leverage Governance framework into their daily activities.
Ratio). We aim to achieve this by identifying, assessing,
limiting, mitigating and monitoring key strategic risks. Business Continuity Planning
Currently, the modeling and quantitative measurement A Business Resumption Plan describes how to resume
of Strategic Risk is primarily covered by our internal business after a disruption. A Disaster Recovery Plan
economic capital (EC) framework. In 2018, we will deals with recovering Information Technology (IT) assets
implement a comprehensive framework to manage after a disastrous interruption. Both imply a stoppage in
Strategic Risk. critical operations and are reactive. Recognizing that
some services or products must be continuously delivered
without interruption, there has been a shift from
Sources of Strategic Risk Business Resumption Planning to Business Continuity
There are generally two sources of strategic risk. Planning. A business continuity plan enables critical
These are: services or products to be continually delivered to
1. Internal source: Resource capability and availability, clients. Instead of focusing on resuming a business after
critical operations have ceased, or recovering after a

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disaster, a business continuity plan endeavors to ensure retain its fund providers and dissuade them from
that critical operations continue to be available. withdrawing their funds. Asset Liability Management
Committee (ALCO) of IBBL regularly meets to assess
Being the first and largest Islamic bank in Bangladesh, the fiduciary risk, rate of return risk and displaced
IBBL holds abundant depositors’ account, plenty of commercial risk, if any in IBBL, and recommends
transactions and expatriate customers. It has Data mitigating and encountering the above risks.
center, Disaster Recovery site and Disaster Recovery
system which are well equipped, designed, managed 3. Liquidity Risk for lack of non-structured Islamic
and monitored by Information & Communication Financial Market: Since Islamic Financial Market in
Technology Wing. Bangladesh is not strong enough and there is inadequate
Islamic financial instruments, IBBL has limited scope for
Some Specific Risks for Islamic Banking placement of fund with the desired return from the
Being a Sharia’h based bank, IBBL may also face the market at the time of surplus liquidity and similarly
following specific risks due to its extra-ordinary limited scope in receiving fund complying Sharia’h rules
operations in addition to the usual risks. IBBL remains at the time of liquidity crisis. However, during more than
always vigilant, stringent and proactive to address and three decades of banking operations, IBBL did not face
mitigate the risks: any liquidity crisis since it remains vigilant enough to
address the issue.
1. Fiduciary Risk: Where Mudaraba Depositors’ funds
are commingled with the Bank’s own funds, the Bank 4. Sharia’h Compliance Risk: IBBL is always stringent
shall ensure that the bases for asset, revenue, expense about compliance of Sharia’h rules in all of its operations.
and profit allocations are established, applied and Since IBBL is performing in a mixed economic system
reported in a manner consistent with the Bank’s fiduciary (i.e Islamic and Interest Based economy) of the country,
responsibilities. Sharia’h compliance is the one of the vital factors particularly
for IBBL. The independent Sharia’h Supervisory
2. Displaced Commercial Risk: Banks may be under Committee keeps keen observations on the day to day
market pressure to pay a return that exceeds the rate transactions of the Bank and the Board has sole right to
that has been earned on assets financed by the Mudaraba declare those transactions suspended if they seem to
depositors when the return on assets is under-performing be doubtful.
as compared to the competitors’ rates. In such case,
banks may decide to waive their rights to part or its
entire mudarib share of profits in order to satisfy and

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Capital Plan
Capital Planning is a dynamic and ongoing process of d) Management framework for preserving capital.
incorporating changes in a bank’s strategic focus, risk
tolerance level, business plan, operating environment, Keeping in view of the above, we have devised a proactive
or other factors that materially affect capital adequacy. strategy to maintain adequate capital in line with the risk
Capital planning assists the bank’s policy makers and appetite of the bank. Different components of risk as
management to identify risks, minimize the bank’s overall well as eligible and required capital there against are
risks, set risk tolerance levels and assess strategic regularly reviewed for maintaining targeted ‘Capital to
choices in longer-term planning. Thus, capital planning Risk-weighted Asset Ratio. The role of capital management
is related with risk profile of the bank. The Basel Committee is to ensure that capital levels are adequate with efficient
on Banking Supervision (BCBS), time to time prescribes capital composition.
the capital adequacy requirement to support the risk
profile of the banks. Bangladesh Bank, in line with Basel Management of Capital
III recommendations, also emphasized the capital Our capital management is guided by robust capital
planning in the Revised Guidelines on Risk Based Capital management policies and procedures across the Bank.
Adequacy (RBCA) framework. The Bank’s approach to managing capital is set out in
various frameworks which are approved by the Risk
Strategies for Capital Optimization Management Committee (RMC) and the Board. The key
Capital planning process of IBBL considered both areas of management of capital are:
short-term and long-term capital needs in line with
bank’s overall strategy and planning for prospective a) Capital Management Framework
business growth with a horizon of five years. The following The Capital Management Framework comprises the
strategies are taken for capital optimization of the bank: governance, policies and procedures which set out the
requirements for effective management of capital of the
Downsize high risk portfolios actively; Bank including identification, assessment, monitoring,
managing and reporting of any capital matters to
Allocate capital more effectively by focusing on high
Risk-Adjusted Return on Capital (RAROC) areas; relevant committees such as RMC and the Board. The
holistic capital management framework followed by
Increase returns by better management of NPAs; IBBL is mentioned below:
Increase operational effectiveness;
Enhancement of Capital base through issuance of 1. Strategy & Performance Management:
Tier-2 capital instrument. a) Performance Measures: Set different performance
measures to drive decision-making; embed risk-adjusted
Fundamental components of sound capital performance into decision-making.
planning process
The capital planning process is tailored with the overall b) Risk Appetite: The Risk appetite of the bank is set at
risk, complexity and corporate structure of the Bank. the beginning of the year keeping in view of overall
While the content, extent and depth of the capital business strength.
planning process may vary, we have an effective capital
planning process to address the same in line with the 2. Regulatory Capital:
Basel guideline which include the following: a) Market, Credit and Operational Risk: Respond to
regulatory requirements that have an impact on total
a) Internal control and governance; RWAs of the bank.
b) Capital policy and risk appetite;
c) Forward-looking view; b) Pillar II Requirements: Qualitative and quantitative

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assessment of regarding sufficient capital to continue Risk Appetite of IBBL


operations. Islami Bank Bangladesh Limited has determined Risk
Appetite for possible measurable risk areas. Risk
3. Risk-Based Product Pricing: Appetite expresses the level of risk that IBBL is willing to
a) Reflecting the Riskiness of the Product in business: assume within the risk capacity in order to achieve
We follow structured risk-based pricing for all our business objectives, as defined by a set of minimum
investment products. quantitative metrics and qualitative standards. This Risk
Appetite Statement has been approved the Board of
4. Recovery and Resolution Plans: Directors. It is important because the success of banking
a) Measures for Monitoring Liquidity Distress: Maintain operations, as measured by ‘Return on Equity (ROE)’ or
sufficient liquid assets to retain depositor’s confidence ‘Risk-Adjusted Return on Capital (RAROC)’, is in effect a
and maintain a buffer over regulatory and internal measure of the extent to which the bank has satisfied its
assessment of liquidity requirements. appetite. To design a limit system, bank always considered
the following issues:
b) Capital Contingency Plan: The Capital Contingency
Plan is to ensure robust monitoring of capital position
1. Risk-appetite: Risk-appetite is used considering its
and provides a framework for effective governance and
risk-bearing capacity.
escalation process in the event of capital crisis. The
Capital Contingency Plan also formalizes the basis, 2. Risk-tolerance: Risk tolerances are used by IBBL in
strategies and action plans to restore capital back to risk evaluation in order to determine the treatment
healthy levels in the fastest possible time without affecting needed for acceptable risk.
business plans, assets growth and strategic priorities. 3. Risk-limit: The bank allocates capital limits to
business units considering the regulatory instructions.
c) Strategic Capital Plan: The Capital Plan involves
detailed planning of the Bank’s strategic capital planning Capital Structure
over at short horizon of one year, which is included in IBBL gives due importance on quality of its capital in
the Annual Business Development of the Bank at the order to continue meeting the adequate capital requirement
beginning of the year. In addition, we have capital set by Bangladesh Bank. IBBL historically maintained
planning in line with our perspective business plan for a sound Tier-1 capital base which has the highest loss
time horizon of five years. The plan highlights the capital absorption capability on-going concern basis. In
projections, capital requirements, level of capital and addition to common equity Tier-1 capital, we also maintain
capital mix to support the bank’s prospective business growth. other types of capital instruments under Tier-2 capital in
order to optimize capital mix and reduce overall costs
The purposes and objectives of Capital of capital.
Planning:
The general purpose of the capital planning process is Capital Initiatives
to ensure current capital adequacy and to plan for future IBBL Manages its capital position proactively in order to
capital needs. The general objective of this policy is to meet stringent Basel III capital requirement. In order to
manage the capital position, not only to ensure compliance strengthen its capital base, IBBL issued 7(seven) years
with bank regulations but also to ensure capital adequacy ‘IBBL Mudaraba Redeemable Non-Convertible
for future bank expansion. These efforts will also have Subordinated Bond’ of Tk.5,000 million. In addition to
an impact on other policy decisions and related that, 2nd ‘IBBL Mudaraba Redeemable Non-Convertible
procedures, such as merger and acquisition strategies, Subordinated Bond’ of Tk.7,000 million to be issued by
investment and deposit, asset mix and volume guidelines bank, subject to the approval from Bangladesh Bank
and liquidity planning. and Bangladesh Securities and Exchange Commission
(BSEC) upon getting ‘No Objection Certificate (NOC)’
from Bangladesh Bank.

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Disclosures on Risk Based


Capital (Basel III)
As on 31 December, 2017
The purpose of Market Discipline in Basel III is to establish more transparent and more disciplined financial market so
that stakeholders can assess the position of a Bank regarding holding of assets and to identify the risks relating to the
assets and capital adequacy to meet probable loss of assets. For the said purpose, this “Disclosures on Risk Based
Capital (Basel III)” is made as per Bangladesh Bank’s Guideline.
Scope of Application
Qualitative Disclosures
a) The name of the top corporate entity in the group to Islami Bank Bangladesh Limited
which this guidelines apply: The Consolidated Financial Statements of the bank
include the financial statements of (i) Islami Bank
b) An outline of differences on the basis of consolidation Bangladesh Limited (including Off-Shore Banking
for accounting and regulatory purposes, with a brief Unit (OBU). (ii) Islami Bank Securities Limited (iii)
description of the entities within the group (i) That are Islami Bank Capital Management Limited
fully consolidated; (b) that are given a deduction A brief description of the Bank (Main Operation) and
treatment; and (c) that are neither consolidated nor its subsidiaries are given below:
deducted (e.g. where the investment is risk-weighted).
Islami Bank Bangladesh Limited
Islami Bank Bangladesh Limited was incorporated
on March 13, 1983 as a Public Limited Company
(Banking Company) with limited liability under the
Companies Act 1994 as interest free Islamic Shari’ah
based commercial bank and commenced its operation
on March 30, 1983 with the permission of Bangladesh
Bank. The authorized and paid up capital of the bank
respectively stood at Tk.20,000 million and Tk.
16,099.91 million as on December 31, 2017. Presently
the Bank is operating its business through Head
Office having 332 Branches (including 30 SME/
Agriculture Branches) and 562 own ATM booths all
over Bangladesh. The shares of the Bank are listed
with both the Stock Exchanges of the country, i.e.
Dhaka Stock Exchange Limited and Chittagong Stock
Exchange Limited.
Subsidiary Companies
i) Islami Bank Capital Management Limited
(IBCML)
IBCML is a fully owned subsidiary of IBBL. IBCML
was established in April 2010 under the Companies
Act 1994 as a Public Limited Company with Authorized
Capital of Tk.1,000.00 million & Paid-Up Capital of
Tk.300.00 million. The Company was established as
per Bangladesh Bank Letter No.
BRPD(R-1)717/2010-47 dated 07 February 2010.
The registered Office of IBCML is located at 20,
Dilkusha C/A in Dhaka, Bangladesh.

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ii) Islami Bank Securities Limited (IBSL)


IBSL is also a fully owned subsidiary of IBBL. IBSL
was incorporated in March 2010 as a Public Limited
Company under Companies Act, 1994 with the
objectives to carry out business of Stock Broker &
Dealer in the capital market. The authorized and paid
up capital of the company stood at Tk.5,000 million
and Tk.2,700 million respectively as on December
31, 2017. The overall increase of activities in Brokerage
operation plays an important role in the improvement
of capital market of the country and enhances earning
capability of IBBL through corporate declaration.
iii) Off-shore Banking Unit (OBU)
Off-shore Banking Unit is a separate business unit
governed by the applicable rules & regulations and
guidelines of Bangladesh Bank. IBBL got permission
to operate Off Shore Banking unit in its 3 Branches
under International Banking Wing.

c) Any restrictions, or other major impediments, on


transfer of funds or regulatory capital within the group Not Applicable

Quantitative Disclosures

d) The aggregate amount of capital surplus capital of


insurance subsidieries included in the capital of the Not Applicable
consolidated group.

Capital Structure

Qualitative Disclosures

a) Summary information on the terms and conditions of As per the guidelines of Bangladesh Bank, CET-1
the main features of all capital instruments, especially Capital of IBBL consists of (i) Fully Paid-up Capital, (ii)
in the case of capital instruments eligible for inclusion in Statutory Reserve, (iii) General Reserve (iv) Non-Re-
CET1, Additional Tier-1 or Tier-2 payable Share Premium Account (v) Retained earnings
(vi) Dividend equalization reserve and (vii) Minority
interest in subsidiaries.
Additional Tier-1 consists of Subordinated Debt
(Mudaraba Perpetual Bond) (up to max. 1.5% of the
Total RWA or 33.33% of CET1, whichever is higher).
Tier-2 Capital consists of applicable amount of (i)
General Provision (against Un-classified Investments,
Off-Balance Sheet exposure & Off-Shore Banking
Units)(ii) Assets Revaluation Reserves up to 20%, (iii)
Revaluation Reserve for Securities up to 20% and
(iv) Revaluation Reserve for equity instruments up to
4% (v) All Other Preference Shares.

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Quantitative Disclosures
Sl BDT in million
Particulars
No. Solo Consolidated
A) Tier 1 Capital:
i Fully paid-up-capital (PuC) 16,099.91 16,099.91

ii Statutory Reserve 16,735.47 16,735.47

iii Non-repayable share premium account 1.99 1.99

iv General reserve 6,546.76 6,546.76

v Retained earnings 1,609.99 1,944.90

vi Non-controlling interest in subsidiaries - 0.23

vii Dividend equalization fund 32.00 32.00

viii Non-cumulative irredeemable preference share - -

A. Sub-total (Common Equity Tier-1 Capital) A (i to viii) 41,026.12 41,361.26

B. Additional Tier-1 (AT1) (Mudaraba Perpetual Bond) 3,000.00 3,000.00

C. Total Tier-1 Capital (Going Concern Capital) A+B 44,026.12 44,361.26

i General Provision (Unclassified investment, SMA and off-balance 6,615.87 6,615.87


sheet exposure)

ii Assets revaluation reserves up to 20% 2,299.79 2,299.79

iii Revaluation reservs of securities up to 20% 16.30 16.30

iv All other preference shares

v Subordinated debt (Non-Convertible Subordinated Bond) 5,000.00 5,000.00

D. Total eligible Tier-2 Capital 13,931.96 13,931.96

E. Total eligible capital (Regulatory Capital) (C+D) 57,958.08 58,293.22

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Capital Adequacy
Qualitative Disclosures
a) A summary discussion of the Bank’s approach The Bank has adopted Standardized Approach (SA) to
to assess the adequacy of its capital to support computation of capital charge for investment risk and
current and future activities. market risk, and Basic Indicator Approach (BIA) for
operational risk. Assessment of capital adequacy is
carried out in conjunction with the capital adequacy
reporting to Bangladesh Bank. The Bank has maintained
capital adequacy ratio at 11.50% & 11.30% on the
basis of “Consolidated” and “Solo” respectively as
against the minimum regulatory requirement of 10%
plus Capital Conservation Buffer of 1.25% totaling of
11.25%. Tier-1 capital adequacy ratio under “Consolidated”
basis is 8.75% and “Solo” basis is 8.58% as against
the minimum regulatory requirement of 6.00%. The
Bank’s policy is to manage and maintain strong Capital
Adequacy Ratio through investing high rating grade
investment clients. The Bank maintains adequate
capital that is sufficient to absorb all material risks
associated with the Bank. The Bank also ensures that
the levels of capital comply with regulatory requirements
and satisfy the external rating agencies and other all
stakeholders including depositors.

Qualitaive Disclosures
Sl BDT in million
Particulars
No. Solo Consolidated
a Capital requirements for Investment risk 45,468.30 44,822.49

b Capital requirements for Market risk 1,133.63 1,133.63

c Capital requirements for Operational risk 4,707.86 4,715.07

d Total Capital Requirement (a+b+c) 51,309.79 50,671.19

Capital Conservation Buffer (CCB) 1.25% 1.25%

Capital to Risk-weighted Assets Ratio (CRAR)

Total CRAR 11.30% 11.50%

CET-1 Ratio 8.00% 8.16%

Tier-1 Ratio 8.58% 8.75%

Tier-2 Ratio 2.72% 2.75%

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Investment (Credit) Risk


Qualitative Disclosures
a) The General Qualitative disclosure requirement with respect to credit risk, including:
i) Definitions of past due and impaired As per Bangladesh Bank guidelines, any Investment if
(for accounting purposes): not repaid within the fixed expiry date will be treated as
Past Due/ Overdue.

Bangladesh Bank issued Circulars from time to time for


strengthening Investment (Credit) discipline and brings
provisioning. All Investments/ loans & advances will be
grouped into four (4) categories for the purpose of
classification, namely (a) Continuous Investment/Loan
(b) Demand Investment/Loan (c) Fixed Term
Investment/Loan & (d) Short-term Agricultural & Micro
Investment.

The above Investment (Credit) are classified as


follows:
Continuous and Demand Investment/ loan are
classified as:
'Sub-standard' if it is past due/over due for 3(three)
months or beyond but less than 6 months;
'Doubtful' if it is past due/over due for 6 (six)
months or beyond but less than 9 (nine) months;
'Bad/Loss' if it is past due/over due for 9 months or
beyond from the date of expiry or claim by the
bank or from the date of creation of forced loan.

Fixed Term Investment (Loans), which are


repayable by installment(s) are classified as:
a) In case of any installment(s) or part of installment(s)
of a Fixed Term Loan amounting upto Tk.10.00
Lacs is not repaid within the due date, the amount
of unpaid installment(s) will be termed as ‘past due
or over due installment’. In case of such types of
Fixed Term Loans:
‘Sub-standard' if the amount of 'past due Install
ment is equal to or more than the amount of
installment(s) due within 6 (six) months, the entire
Investment (loan) will be classified as ''Sub-standard'';
'Doubtful’ if the amount of past due installment is
equal to or more than the amount of installment(s)
due within 9 (nine) months, the entire Investment
(loan) will be classified as ''Doubtful";
'Bad/Loss' if the amount of 'defaulted installment'
is equal to or more than the amount of installment(s)
due within 12 (twelve) months, the entire Invest
ment/loan will be classified as ''Bad/Loss''.

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b) In case of any installment(s) or part of install


ment(s) of a Fixed Term Loan amounting more
than Tk.10.00 Lacs is not repaid within the due
date, the amount of unpaid installment(s) will be
termed as ‘past due or over due installment’. In
case of such types of Fixed Term Loans:
‘Sub-standard' if the amount of 'past due Install
ment is equal to or more than the amount of
installment(s) due within 3 (three) months, the entire
Investment (loan) will be classified as ''Sub-standard'';
'Doubtful’ if the amount of past due installment is
equal to or more than the amount of installment(s)
due within 6 (six) months, the entire Investment
(loan) will be classified as ''Doubtful";
'Bad/Loss' if the amount of 'defaulted installment'
is equal to or more than the amount of install
ment(s) due within 09 (nine) months, the entire
Investment/loan will be classified as ''Bad/Loss''.

Short-term Agricultural and Micro-Investment are


classified as:
If not repaid within the due date as stipulated in the
Investment (loan) agreement. If the said irregular
status continues, the Investment (credit) will be classified
as 'Substandard ' after a period of 12 months, as
'Doubtful' after a period of 36 months and as
'Bad/Loss' after a period of 60 months from the stipulated
due date as per Investment (loan) agreement.
A continuous Investment, Demand or a Term Investment
which will remain overdue for a period of 02 (two)
months or more will be put into the Special Mention
Account (SMA).
The Bank follows the specific and general provision
for investment/ loan on the basis of Bangladesh bank
Guidelines issued from time to time.

ii) Description of approaches followed for specific The rate of provision are given below:
and general allowances and statistical method; a) General Provision: The Bank maintains General
Provision in the following way:
(1) @ 0.25% against all unclassified loans of Small and
Medium Enterprise (SME) as defined by the SME &
Special Programmes Department of Bangladesh
Bank from time to time and @ 1% against all unclassified
Investments (other than Investments/loans to Brokerage
House, Merchant Banks, Stock dealers etc., Special
Mention Account as well as SME Financing.)

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(2) @ 5% on the unclassified amount for Consumer


Financing whereas it has to maintain @ 2% on the
unclassified amount for Investments/Loans for
Professionals to set up business under Consumer
Financing Scheme.
(3) @ 2% on the unclassified amount for
Investments/Loans to Brokerage House, Merchant
Banks, Stock dealers, etc.
(4) @ 5% on the outstanding amount of Investments/
loans kept in the 'Special Mention Account'.
(5) @1% on the off-balance sheet exposures. (Provision
will be on the total exposure and amount of cash
margin or value of eligible collateral will not be deducted
while computing Off-balance sheet exposure.)
a) Specific Provision: Banks will maintain provision
at the
following rates in respect of classified Continuous,
Demand and Fixed Term Investments/Loans:
(1) Sub-standard : 20%
(2) Doubtful: 50%
(3) Bad/Loss: 100%
b) Provision for Short-term Agricultural & Micro
Investments:

(1) ‘Unclassified and SMA’ : @ 2.5%


(2) ‘Sub-standard’ and ‘Doubtful’ : @ 5%
(3) 'Bad/Loss' : @ 100%

iii) Decision of the Bank’s Investment (Credit) Risk The Bank has put in place a well-structured Investment/
Management Policy; Credit Risk Management Policy known as Investment
Risk Manual approved by the Board. The Policy document
defines organization structure, role and responsibilities
and, the processes whereby the Investment (Credit)
Risks carried by the Bank can be identified, quantified
and managed within the framework that the Bank
considers consistent with its mandate and risk
tolerance.

Authorities are properly delegated ensuring check and


balance in investment operation at every stage i.e.
screening, assessing risk, identification, management
and mitigation of investment risk as well as monitoring,
supervision and recovery of investments with provision
for Early Warning System and Grading of Investment
clients as Blue, Green, Grey, Yellow, Red and Brick Red.

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Bank has framed Investment Policy, Investment (Credit)


Assessment & Risk Grading, Approval Authority, Internal
Audit Approval Process, Investment (Credit) Administration,
Investment (Credit) Monitoring, Investment (Credit)
Recovery etc. which forms integral part in monitoring of
Investment (Credit) Risk in the Bank. Status of investments
is regularly reported to the Board /Executive Committee
of the Bank.
Quantitative Disclosures
b) Total gross Investment/ Credit Particulars BDT in million
exposures broken down by major
types of Investment modes. Bai-Murabaha 388,277.72
Bai-Muajjal 46,367.48
Hire Purchase under Shirkatul Melk 167,329.18
Bai-Murabaha Import Bills 3,787.07
Baim FC Bills 13,230.76
Musharaka 510.66
Mudaraba Investments 5,000.03
Bai-Salam 10,477.15
Mudaraba Foreign Currency Investments 13,597.10
Quard 19,983.40
Investment in Khidmah Card 171.39
Bill Purchased and Discounted 41,996.99
Total Investments 710,728.93

c) Area wise distribution of Particulars BDT in million


exposures of Investments/credit
In Rural Areas 61,913.62
exposure:
In Urban Areas 648,815.31
Outside Bangladesh -
Total 710,728.93

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d) Division wise distribution of Particulars BDT in million


Investment/credit exposures of the
Dhaka Division 392,449.17
bank:
Chittagong Division 146,451.65
Khulna Division 48,056.95
Rajshahi Division 61,648.76
Barisal Division 10,944.40
Sylhet Division 16,022.99
Rangpur Division 24,333.86
Mymensing Division 10,821.15
Total Investments 710,728.93

e) Major industry type distribution Particulars BDT in million


of exposures of investment/credit: Economic purpose wise investment
Investment to Directors -
Investment to CEO & other Sr. Executives 1,073.40
Trade & Commerce 217,078.12
Real Estate 50,625.56
Transport 8,374.34
Agriculture (including fertilizer & agriculture implements) 16,943.70
Industrial investment* 382,066.39
Others 34,567.42
Total 710,728.93
*Industrial Investment
Textile-Spinning, weaving & dyeing 113,813.51

Garments & garments accessories 32,175.18

Steel, re-rolling & engineering 21,371.75

Agro-based Industry 97,241.99

Food & Beverage 9,433.75

Cements Industry 9,398.33

Pharmaceuticals 6,643.65

Poultry, Poultry feed & Hatchery 2,437.92

Sanitary Wares 191.96

Chemicals, Toiletries & Petrolium 4,996.11

Printing & Packaging 2,134.84

Power (Electricity) 3,406.68

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Ceramic & Bricks 5,880.34


Healthcare (Hospital & Others) 5,239.26
Plastic Industries 2,974.24
Petrol Pump, & CNG Filling Station 599.07
Information Technology 278.14
Hotel & Restaurant 977.72
Other Industries 62,871.95
Total 382,066.39

f) Residual contractual maturity Particulars BDT in million


breakdown of the whole portfolio Repayable on Demand -
excluding Bill purchased and
discounted, broken down by major Up to 1 month 109,462.84
types of investment/credit Over 1 month but not more than 3 months 113,916.12
exposures:
Over 3 months but not more than 1 year 189,463.03
Over 1 year but not more than 5 years 131,478.80
Over 5 years 124,411.15
Total 668,731.94

g) By major industry or counterparty Particulars BDT in million


type Amount of impared Investment/ Special Mention Account (SMA) 28,152.26
loans and if available, past due due
investment/loans provided separately: Sub-Standard (SS) 2,447.00
Doubtful (DF) 1,990.93
Bad & Loss (B/L) 21,080.67
Total 53,670.86

Specific & General Provisions Particulars BDT in million


Specific and General Provision were Unclassified Investments 685,210.32
made on the amount of calssified
and unclassified investments/loans, Classified Investments 25,518.61
Off-Balance Sheet exposure of the Off-Balance Sheet Exposures 169,749.30
bank according to Bangladesh
Total 880,478.23
Bank guidelines:

* Charges for specific allowances Particulars BDT in million


and charge-off as on 31.12.2017: General Provision for Unclassified Investment 4,918.37
Cumulative specific and general
provision as on 31.12.2017 were General Provision for Off-Balance Sheet Exposures 1,697.50
made on the amount of classified Specific Provision for Classified Investment 24,746.52
investment, Unclassified Investment
Total General & Specific Provision 31,362.39
and Off-Balance Sheet Exposures:

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Gross Non-Performing Assets Particulars BDT in million


Movement of Non-Performing Opening Bsalance 23,601.59
Assets (NPAs): Addition 28,932.49
Reduction 27,015.47
Closing Balance 25,518.61

Movement of specific provisions Particulars BDT in million


for NPAs:
Opening Balance 20,553.83
Recovery amount previously written-off 78.27
Provisions made during the period 4,139.66
Fully provided Investment write-off/waived/transferred (25.24)
Closing Balance 24,746.52
Provision made during the period includes provision made against subjective judgement

E) Equities: Banking Book Positions


Qualitative disclosures
a) The general qualitative disclosures requirement with respect to equity risk, including:
Differentiation between holdings on which capital Investment in equity securities are broadly categorized
gains are expected and those taken under other into two parts:
objectives including for relationship and strategic i) Quoted Securities (common or preference share &
reasons; and mutual fund) that are traded in the secondary market
(Trading Book Assets).
ii) Unquoted Securities are categorized as banking
book equity exposures which are further sub-divided
into two groups: unquoted securities which are invested
without any expectation that these will be quoted in
near future i.e. held to maturity (HTM). Securities those
are acquired under private placement or IPO and are
going to be traded in the secondary market after
completing required formalities. Unquoted securities
are valued at cost.

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Discussion of important policies covering the The primary objective is to investment in equity securities
valuation and accounting of equity holdings in the for the purpose of capital gain by selling them in future
banking book. This includes the accounting or held for dividend income. Dividends received from
techniques and valuation methodologies used, these equity securities are accounted for as and when
including key assumptions and practices affecting received and when right to receive is established. Both
valuation as well as significant changes in these Quoted and Un-Quoted equity securities are valued at
practices. cost and necessary provisions are maintained if the
prices fall below the cost price.
As per Bangladesh Bank guidelines, the HFT equity
securities are revaluated once in each week using
marking to market concept and HTM equity securities
are amortized once a year according to Bangladesh
bank guideline.
The HTM equity securities are also revaluated if any,
are reclassified to HFT category with the approval of
Board of Directors.

Sl BDT in million
Quantitative Disclosures
No. Solo Consolidated
Value disclosed in the balance sheet of investments, as well as the
a fair value of those investments, for quoted securities a comparison
to publicly quoted share values where the share price is materially 1,078.11 2,610.51
different from fair value.

b The cumulative realized gains (losses) arising from sales and - -


liquidations in the reporting period.

c Total unrealized gains (losses). 40.68 43.39


d Total latent revaluation gains (losses) - -

Any amounts of the above included in Tier-2 capital. - -

e Capital requirements broken down by appropriate equity groupings, consistent with the bank’s
methodology, as well as the aggregate amounts and the type of equity investments subject to any
supervisory provisions regarding regulatory capital requirements.

Specific Market Risk 105.81 105.81


General Market Risk 105.81 105.81

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F) Profit Rate Risk in the Banking Book


Qualitative Disclosures

a) The general qualitative disclosure requirement Profit rate risk is the risk where changes in market profit
including the nature of Profit Rate Risk in the rates might adversely affect bank's financial condition.
Banking Book (PRRBB) and key assumptions, Changes in profit rates affect both the current earnings
including assumptions regarding investment (earnings perspective) as well as the net worth of the
prepayments and behavior of non-maturity bank (economic value perspective). Re-pricing risk is
deposits, and frequency of PRRBB measurement. often the most apparent source of profit rate risk for a
bank and is often gauged by comparing the volume of
a bank’s assets that mature or re-price within a given
time period with the volume of liabilities that do so.
The short term impact of changes in profit rates is on
the bank’s Net Investment Income (NII). In a longer
term, changes in profit rates impact the cash flows on
the assets, liabilities and off-balance sheet items,
giving rise to a risk to the net worth of the bank arising
out of all re-pricing mismatches and other profit rate
sensitive position.

Quantitative Disclosure`s
BDT in million

Particulars 1-90 days Over 3 Months Over 6 Months Over 9 Months


b) The increase to 6 Months to 9 Months to 12 Months
(decline) in earnings Rate Sensitive Assets 291,456 84,384 48,471 37,333
or economic value
(or relevant measure Rate Sensitive Liabilities 274,259 80,984 47,268 36,230
used by management)
for upward and GAP 17,197 3,400 1,203 1,103
downward rate Cumulative Gap 17,197 20,597 21,800 22,903
shocks according to
m a n a g e m e n t ’s Adjusted profit rate changes (PRC) 1% 1% 1% 1%
method for measuring
PRRBB, broken Quarterly earnings impact (Cum. Gap*PRC) 42.40 50.79 53.75 56.47
down by currency (as
Accumulate earning impact to date 42.40 93.19 146.94 203.41
relevant)

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G) Market Risk
Qualitaive Disclosure

a) i) Views of BOD on trading / investment The Board approves all necessary policies related to
activities market risk, sets various internal limits to monitor and
reviews compliance on a regular basis. The objective of
market risk management is to minimize the impact of
losses on bank’s earnings and shareholders’ equity.

ii) Methods used to measure Market risk The Bank measures impact on profitability and impact
on asset prices under market risk through Maturity
GAP Analysis, Sensitivity Analysis, VaR, and Mark to
Market. Capital requirement under market risk as per
Standardized rule based approach of Basel-III, is the
aggregate capital requirement calculated for each of
the risk sub-categories. For each risk category,
minimum capital requirement is measured in terms of
two separately calculated capital charges for "specific
risk" and "general market risk".

iii) Market Risk Management system The Bank has its own Market Risk Management
System, which includes Asset Liability Risk Management
(ALM) and Foreign Exchange Risk Management under
core risk management guidelines. The Treasury
Division manages market risk covering liquidity, profit
rate, foreign exchange and equity price risks with
oversight from Asset-Liability Management Committee
(ALCO) comprising senior executives of the Bank.
ALCO is chaired by the Managing Director & CEO.
ALCO meets at least once in a month to monitor and
oversee among others the overall market risks.

iv) Policies and processes for mitigating The bank has put its Asset Liability Management policy
market risk by setting various risk limits for effective management
of market risk and ensuring that the operations are in
line with bank’s expectation of return to market risk
through proper Asset Liability Management. The effectiveness
of approved policies is monitored on an on-going
basis. Forex Open Position limits (Day limit / Overnight
limit), Deal-wise cut-loss limits, Stop-loss limit, Profit /
Loss in respect of cross currency trading are properly
monitored and exception reporting is regularly carried
out. Holding of equities is monitored regularly so that
the investment remains within the limit as set by
Bangladesh Bank. Asset Liability Management
Committee (ALCO) analyzes market and determines
strategies for mitigating market risks. Reconciliation of
foreign currency transactions is also carried
out regularly.

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Sl BDT in million
Quantitative Disclosures
No. Solo Consolidated
Capital Requirement for

a Profit (Interest) Rate Risk - -

b Equity Position Risk 211.62 211.62

c Foreign Exchange Risk 922.01 922.01

d Commodity Risk - -

e Total Capital Requirement for Market Risk 1,133.63 1,133.63

H) Operational Risk
Qualitative Disclosures

a) i) Views of BOD on system to reduce Operational risk is the risk of loss or harm resulting from
Operational Risk inadequate or failure of internal processes, people and
systems or from external events.
The policy for measuring and managing operational
risks including internal control & compliance risk is
approved by the Board taking into account relevant
guidelines of Bangladesh Bank. Audit Committee of
the Board directly oversees the activities of Internal
Control & Compliance to protect all operational risks.
As a part of continued surveillance, the Management
Committee (MANCOM), Risk Management Co-ordination
Committee (RMCC), Risk Management Committee
(RMC) of Board and Risk Management Wing (RMW)
regularly review different aspects of operational risks
and suggest to formulate appropriate policies, tools &
techniques for mitigation of operational risk.

ii) Performance gap of executives and staffs IBBL has a policy to provide competitive package and
best working environment to attract and retain the most
talented people available in the industry. It recognizes the
importance of having the right people at right positions
to achieve organizational goals. The learning and
development strategy puts special focus on continuous
professional development to strengthen individuals’
skill set by removing weaknesses to perform the
assigned job with perfection. The strong brand image
of IBBL plays an important role in employee motivation.
As a result, there is no significant performance gap.

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iii) Potential external events No potential external events are expected to expose
the Bank to significant operational risk.

iv) Policies and processes for mitigating The policies for operational risks including internal
operational risk control & compliance risk are approved by the Board
taking into account relevant guidelines of Bangladesh
Bank. The bank has put its policy guidelines on Risk
Based Internal Audit (RBIA) system with a view to
rating the branches. As per provision of RBIA, branches
are rated according to their risk grading/scoring.
Subsequently, Audit Division prepares their audit plan,
procedure and frequency of audit to be conducted on
Branches. All the business units and supporting units
of Head Office primarily identifies operational risk
issues through Departmental Control Function Check
List (DCFCL) and Audit Division regularly reviews the
reports and ensure implementation of the same.
Bank's anti money laundering activities are continuously
monitored by Chief Anti Money Laundering Compliance
Officer (CAMLCO). The activities of Money Laundering
and Terrorist Financing Division (MLTFPD) are devoted
to protect all money laundering and terrorist finance
related activities. Apart from that, there is adequate
check & balance at every stage of operation, authorities
are properly segregated and there is at least dual
control on every transaction to protect against
operational risk.

v) Approach to calculating capital charge for opera- Basic Indicator Approach is being used for calculating
tional risk capital charge for operational risk as of the reporting
date.

Quantitative Disclosures

As per the Risk Based Capital Adequacy Framework, the capital charge for operational risk is equal to 15%
of average positive annual Gross Income of the previous last three years:
In line with the above, the Bank has adopted the Basic Indicator Approach for computing capital to
operation risk.

Sl BDT in million
Capital Requirement
No. Solo Consolidated
a Operational Risk 4,707.86 4,715.07

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I) Liquidity Risk
Qualitative Disclosure

i) Views of BOD on system to reduce liquidity risk The Board approves the significant policies, sets
tolerance limit for various liquidity risk indicators and
risk appetites for liquidity risk management. The BOD
also reviews the related policies and guidelines of
liquidity risk and ensures necessary steps taken by
management to identify, measure, monitor and control
liquidity risk

ii) Methods used to measure Liquidity Risk At a very basic level, liquidity measurement involves
assessing of Bank’s all cash inflows and its all cash
outflows to identify the potential net surplus/(shortfall).
Cash outflows also include funding requirements for off
balance sheet commitments.
IBBL uses two approaches/methods to measure
Liquidity risk.
(a) Time bucket analysis: Time bucket analysis is an
assessment of cash flow mismatches and is done
through preparation of Structural Liquidity Profile of on
balance sheet and off balance sheet exposure. Appropriate
tolerance levels/prudential limits have been stipulated
for mismatches in different time buckets.
(b) Ratio analysis: Under ratio analysis, various ratios
are prescribed with appropriate limits. Several key
liquidity risk indicators are being used to identify,
measure, monitor and control liquidity position on regular
basis. The key liquidity risk indicators are: Statutory
Liquidity Ratio (SLR), Cash Reserve Ratio (CRR),
Investment to Deposit Raito (IDR) Maximum Cumulative
Outflow (MCO), Medium Term Funding Ratio (MTFR),
Liquid Asset to Total Deposit Ratio, Liquid Asset to
Short Term Liabilities, Liquidity Coverage Ratio (LCR),
Net Stable Funding Ratio(NSFR).

iii) Liquidity Risk management system Responsibility of managing liquidity lies with Asset
Liability Committee (ALCO) of the Bank which meets at
least once in every month. Asset and Liability Management
(ALM) desk closely monitors and controls liquidity
requirements on a daily basis by proper coordination of
funding activities. A monthly projection of fund flows is
reviewed in ALCO meeting regularly.
In order to develop comprehensive liquidity risk
management framework, Contingency Funding Plan
(CFP) has been developed which is a set of policies
and procedures that serves as a blueprint for the bank
to meet its funding needs in a timely manner and at a
reasonable cost.

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For day-to-day liquidity risk management, CFP


ensures that the bank is well prepared to respond to an
unexpected problem. In this sense, a CFP is an
extension of ongoing liquidity management and
formalizes the objectives of liquidity management by
ensuring: (i) a reasonable amount of liquid assets are
maintained; (ii) measurement and projection of funding
requirements during various scenarios; and (iii)
management of access to funding sources.
CFP also provides directions for plausible actions in
distress and emergency situations. In case of a sudden
liquidity stress, it is important for the bank to handle the
same in an efficient and organized way to meet its
obligations to the stakeholders. Since, such a situation
requires a spontaneous action, CFP will put the bank in
better position by addressing the liquidity problem
more efficiently and effectively. CFP ensures that bank
management and key staff are ready to respond to any
distress situation.

iv) Policies and processes for mitigating A structural maturity ladder or profile is prepared
Liquidity Risk periodically following the guidelines of the Bangladesh
Bank DOS circular no. 02 dated 29 March 2011.
Maturity ladder of cash inflows and outflows is an
effective tool to determine bank’s liquidity position. It
estimates a bank’s cash inflows and outflows and thus
net deficit or surplus (GAP) both on a day-to-day basis
and over a series of specified times can be estimated.
A bucket wise (e.g. call, 2-7 days, 1 month, 1-3
months, 3-12 months, 1-5 years, over 5 years) maturity
profile of assets and liabilities is prepared to
understand mismatch in every bucket.

Quantitative Disclosure
BDT in million
Particulars
Solo Consolidated
Liquidity Coverage Ratio (LCR) 127.49% 127.49%

Net Stable Funding Ratio (NSFR) 108.47% 108.47%

Stock of High Quality Liquid Assets (HQLA) 111,675 111,675

Total net cash outflows over the next 30 calendar days 87,595 87,595

Available amount of Stable Funding 759,157 759,157

Required amount of Stable Funding 699,848 699,848

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J) Leverage Risk
Qualitative Disclosure

i) Views of BOD on system to reduce excessive The Board approves all policies related to Leverage Ratio. In
leverage order to avoid building-up excessive on-balance sheet and
off-balance sheet leverage in the banking system, a simple,
transparent, non-risk based leverage ratio has been
introduced to constrain leverage in the banking sector.

ii) Policies and processes for mitigating excessive on Guidelines on Risk Based Capital Adequacy (Revised Regulatory
and off-balance sheet leverage Capital Framework for banks in line with Basel III) as provided
by BRPD of Bangladesh Bank is followed by IBBL while
managing excessive on and off-balance sheet leverage of the
bank. As per RBCA Guidelines, leverage ratio is being calculated
as Tier I Capital divided by Total Exposure (on and off-balance
exposures) after related deductions.

iii) Approach for calculating exposure IBBL calculates the regulatory leverage ratio as per the
guideline of Basel III leverage ratio framework as adopted by
Bangladesh Bank where a minimum Tier 1 leverage ratio of
3% has been prescribed both at solo and consolidated level.
IBBL has been maintaining leverage ratio more than
minimum requirement of 3% applicable from 01 January
2015. The regulatory leverage ratio has been calculated
considering the following:
1. Capital Measure: The amount of capital (the numerator)
for the leverage ratio is being calculated as per definition of
Tier 1 capital as specified in Chapter 3 of ‘Guidelines on Risk
Based Capital Adequacy (Revised Regulatory Capital Framework
for banks in line with Basel III’
2. Exposure Measure: General Measurement Principles:
The amount of exposure (the denominator) for the leverage
ratio is being calculated following the accounting measure of
exposure. In order to measure the exposure consistently with
financial accounts, the following are being applied by
the bank:
i. On balance sheet, non-derivative exposures are being
calculated by netting-off of specific provisions and
valuation adjustment.
ii. Physical or financial collateral, guarantee or credit risk
mitigation purchased are not used for reducing on-bal
ance sheet exposure.
iii. No Netting of loans and deposits is done.
On-Balance Sheet Items: Bank has included the accounting
balance sheet item for the purposes of leverage ratio.
Off-Balance sheet Item: Bank has calculated the off-balance
sheet (OBS) items by applying a uniform 100% Credit
Conservation Factor (CCF). For unconditionally cancellable
commitments without prior notice, a CCF of 10% is appalied.

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Quantitative Disclosur
BDT in million
Particulars
Solo Consolidated
Leverage Ratio 4.76% 4.80%

On balance sheet exposure 875,213.01 874,852.38

Off balance sheet exposure 48,907.36 48,907.36

Total exposure 924,120.37 923,759.74

K) Remuneration
Qualitative Disclosures

a) Name, composition and mandate of the main body Board of Directors of the Bank is the main body to
overseeing remuneration. oversee the remuneration. The Board, however, generally
suggest the management to place proposal for revision
of remuneration from time to time.

External consultants whose advice has been sought, Generally, no advice from any external consultant with
the body by which they were commissioned, and in regard to the remuneration process of the bank is
what areas of the remuneration process. sought whatsoever and therefore no commission to
this effect is paid to any agencies.

A description of the scope of the bank’s remuneration The bank does not have any foreign subsidiary; rather
policy (e.g. by regions, business lines), including the it has branches as well as zonal offices throughout the
extent to which it is applicable to foreign subsidiaries country. IBBL follows uniform remuneration policy
and branches which does not change due to the employees working
at diversified geographical locations.

A description of the types of employees considered as No group of employees has been categorized as material
material risk takers and as senior managers, including risk taker as well as senior managers; rather the risks in
the number of employees in each group. different areas of operations of the bank are taken by
the employees concerned as a team.

b) An overview of the key features and objectives of Remuneration policy is based on attracting, retaining
remuneration policy. and motivating the employees to ensure that they
perform in the best interests of the bank and its shareholders
by growing and developing the business.

Whether the remuneration committee reviewed the The remuneration system of the bank has been
firm’s remuneration policy during the past year, and if designed to ensure optimum level of fairness in reward
so, an overview of any changes that were made to the service of the employees in such a way so that
they can satisfactorily manage the basic expenses
concerning their household as well as get sufficient
future benefits on attaining the superannuation. The
key features of the remuneration system are as under:

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In consideration of the nature of works/responsibilities


fixed remuneration has been established for the
employees of a particular grade. However, the fixed
remuneration differs from grade to grade and generally
changes with the promotion/demotion to the
higher/lower grades. The components of the fixed
remuneration are basic pay, house rent, medical as
well as conveyance allowances etc. The basic pay is
increased at a fixed rate every year towards adjustment
of the inflation. Employees may have additional remuneration
by means of getting special increment, promotion for
their extraordinary performance.
Remuneration concerning the future benefits of the
employees is paid in the form of Gratuity, Provident
Fund and Superannuation Fund. The amount of such
remuneration varies in terms of grade, basic pay as
well as service length.
Variable remuneration is paid to the employees in the
form of Incentive Bonus on the basis of the performance
resulting satisfactory annual profit of the bank. The
overall performance of the employees is considered as
the team performance without categorizing any ‘Identified
Staff as Risk Takers’ and Incentive Bonus is allowed to
them in proportion to their respective basic pay.

The remuneration of the bank was not reviewed by the


Board of Directors last year and consequently no
change whatsoever has taken place in the remuneration
process
No segment of the employess has been categorized
A discussion of how the bank ensures that risk and as the ‘risk and compliance employess” and therefore
compliance employees are remunerated no scope is there to seperatly remunerate such type of
independently of the businesses they oversee. comployess for their overseeing the business

c) An overview of the key risks that the bank takes into Basically, the ‘fixed remuneration’ process is being
account when implementing remuneration measures. practiced and in some cases the adjustment of the
losses, so incurred by the bank due to the employees’
non-compliance of different rules & regulations is
compensated from the fixed remuneration as well as
deferred future benefits of the employees concerned
through claw back process as a means of adjustment
of the current and future risk.

An overview of the nature and type of the key The risk of non-adherence to regulatory compliances
measures used to take account of these risks, including as well as violations of different rules and procedures
risks difficult to measure (valued need not be causing significant losses from the side of the employees
disclosed) is taken into consideration while implementing the
remuneration measures.

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A discussion of the ways in which these To avert the risks, the provisions with regard to partial
measures affect remuneration. payment of basic pay as well as non-disbursement of
incentive bonuses and future benefits, claw back
process from the monthly remunerations etc. are
there.
Various disciplinary measures ranging from the
issuance of censure to dismissal from the service for
committing the irregularities is there and such
measures significantly affect the remuneration
process.

A discussion of how the nature and type of these Over the past years, due to committing various types
measures has changed over the past year and of violations, remuneration of the individual employees
reasons for the change , as well as the impact of has been changed but no change affecting the
changes on remuneration. remuneration system has taken place.

d) An overview of main performance metrices for the The individual performance measurement metrics
bank, top-level business lines and individuals. affecting the remuneration is strictly followed. Overall
performance of the employees is considered as the
team result.
Variable remuneration in the form of Incentive Bonus is
allowed to them in proportion to their respective basic
pay, which generally varies in relation with the operating
profit. However, employees may get accelareted
promotion for extraorninary performance as well as
may be awarded demotion for commiting violations
that has a link with the remuneration process.
In some case, due to non-fulfilment of desired criteria
as set by the Board, a portion of incentive bonus to
some employees were not allowed. In some cases the
employee’s commiting lapses and incurring financial
losses, are not allowed the incentive bonus.

e) A discussion of bank’s policy on deferral and vesting To ensure long-term retention of the employees
of variable remuneration and if, the fraction of variable remuneration concerning future benefits has been
remuneration that is deferred differes across employess designed which includes Gratuity, Provident Fund,
or groups of employess, a description of the factors and Superannuation Fund etc.
that determine the fraction and their relative
importance.

f) A discussion of the bank’s policy and criteria for As per the prevailing practice, the incentive bonus, as
adjusting deferred remuneration before vesting and (if variable remuneration, is to be completely paid to the
permitted by national law) after vesting through claw eligible employees and any fraction thereof is not
back arrangements. deferred with regard to the determination of their
relative performance. Once the incentive bonus, as
variable remuneration, is paid it cannot refunded
through claw back arrangement.

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g) An overview of the forms of variable remuneration No different form with regard to payment of variable
offered (i.e. cash, shares and share-linked instruments remuneration is there. The remuneration of the
and other forms) employees is paid in the form of cash.

h) A discussion of the use of the different forms of


variable remuneration and, if the mix of different forms
of variable remuneration differs across employees or Not Applicable.
groups of employees) a description the factors that
determine the mix and their relative importance.

i) Number of meetings held by the main body overseeing


remuneration during the financial year and the Not Applicable.
remuneration paid to its members.
5 (five) Basic Pay as incentive bonus of which 4 (four) Were
j) Number of employess received a variable remuneration given to all employees and 1 (one) was given to employees
award during the financial year. who fulfilled criteria set by the Board of Directors

k) Number and total amount of guaranteed bonuses Not Applicable.


awarded during the fianancial year.

l) Number and total amount of sign-on awards made


Not Applicable.
during the fianancial year

m) Number and total amount of termination payments Not Applicable.


made during the year.

n) Total amount of outstanding deferred remuneration,


Not Applicable.
split into cash, shares and share-linked instruments
and other forms.

o) Total amount of deferred remuneration paid out in Not Applicable.


the financial year

i) Breakdown of the amount of remuneration awards


for the financial year to show
-Fixed and variable Not Applicable.
-deferred and non- deferred
-different forms used (Cash, Shares and
share-linked instruments and other forms).

k) Total amount of outstanding deferred remuneration


and retained remuneration exposed to ex-post explicit Not Applicable.
and/or Implicit adjustments.

l) Total amount of reductions during the financial year Not Applicable.


due to ex post explicit adjustments.

m) Total amount of reductions during the financial year


due to ex-post implicit adjustments. Not Applicable.

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Non-Performing
Investment Management
NPI is always an area of concern for banks. NPI of a required to be kept within a minimum level to ensure
bank is its past due asset from its investment client who optimum operating result.
has not paid off as per agreed upon terms for an
extended period of time. As a result, such assets do not To this end, Bank’s Assets Management Division (AMD)
give any income to the bank. The NPI’s impacts on is dedicated. AMD, based on the approved policy,
banks’ profitability are manifolds such as: strategies and rules, concentrates on off-site supervision
and monitoring of Zones'/ Branches' activities for recovery/
i. Loss of Income from the NPI itself but cost on fund is incurred; collection/ reduction of NPI, up gradation of CL status
from worse to better grade, reduction of provision
ii. Loss of profit in the form of provisioning from hard requirement, processes the proposals for disposal of
earned income from performing investment; mortgage property and filing suit against the stubborn
iii. A net loss on investment not recovered; client, rescheduling/ solenama of the client intending
iv. An increase in costs because of additional manage amicable settlement, waiver (Compensation/ Profit) of
ment time and servicing costs (such as: manpower, genuine sufferer, write offs the long outstanding bad
office space, administrative, utility, paper intensive investment. AMD also prepares reports thereof with due
workflow and abundance of manual tasks required recommendation on timely basis to place before the
to resolve the problem); competent authority and disseminates/ implements
advice/ decisions given by the authority for bringing
v. Additional capital requirement for high-risk weighted assets; efficiency and momentum in the aforementioned affairs
vi. Substantial reduction in bank’s net profitability for the management of NPI. Besides, the following
because of all above; special initiatives are also functioning to strengthen the
vii. Lower Ratings and increase cost of funding; NPI management:

viii. Reduced risk appetite for new Investment;


i. A Central Task Force comprising with the top
ix. Adversely affecting equity valuations; executives at Head Office headed by the Hon’ble
x. Threat of liquidity crisis, which ultimately disrupts Managing Director is functioning, which reviews the
clients’ interests, protecting which is one of the recovery position of NPI through video conferencing
commitments of Maqasid Al- Sharia’h; etc. where all Zonal Heads participate with their perfor
mance and commitment.
Therefore, keeping NPI at the lowest possible level is at
ii. 10 (Ten) Special Monitoring & Supervision Commit
the core of IBBL. For this, the bank’s efforts are always
tees are formed headed by DMDs, and EVPs at
dedicated to devise the effective strategies to follow the
Head Office, among others, for monitoring and
industry’s best practices in this regard both of local and
supervision of NPI and provision reduction.
international.
iii. A Special Coordination Committee has also been
Bad investment has relationship not only with the formed for looking after the activities and perfor
efficiency of the risk assessment procedure but also mance of the above 8 Special Committees.
with some intractable and unforeseen externalities iv. 10 Special Committees place their report on the
beforehand, such as: changing national and international progress of works before the Special Coordination
political and business environment, client’s poor Committee and Central Task Force.
business decision and financial conditions, worsening
the quality and value of collateral security and so on. So, v. Task Force Committees are also formed in every
problem investment is inevitable consequences of Zone/ Branch having NPI, who sit on regular basis at
extending investment. Bank cannot stop making investment Zones /Branches, review the recovery progress of
rather the number and amount of bad investment is NPI and the compliances with the guidance/direction/

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Non-Performing Investment Management
Report

advice of responsible HO Special Committees and also Aligning the Investment Risk Management Process
take new strategies especially for recovery of due with the national and international regulator’s
installments against both regular and reschedule standard to facilitate capacity building of the
investment for keeping them regular. business staff for NPI Management.

Legal Affair Division of the bank, equipped with qualified Enhanced Banks’ Capacity to deal with
law officers coordinates AMD to ensure all legal actions NPIs
as appropriate in timely manner for collection of Bank’s Actually, NPI management as a part of Investment Risk
dues. Management starts at the origination of an investment
client and spreads throughout Relationship, Investment
Introduction of a new squad, to be equipped with the Approval and Administration. Client profiling (evaluation)
skill manpower having required qualification and is the first step. Better data means better Risk Rating.
experiences for solving the problem investment as their Client profiling, combining information/data on financial
regular on-site job, under AMD is also mulling for assets and their financial and consumption behaviors,
gearing up the Risk Management travail. can help to balance a high level of industrialization within
a pre-defined set of actions (policy, procedures and
Key Priorities guidelines) for low-value clients and a bespoken
IBBL identified several key areas for the capacity approach for high-value ones, reducing costs and time
building of the involved officers to make improvements to recovery.
of the NPI management System:
An industrialized approach as above is now being
Recovery of Written off Investment;
recommended with a top emphasis by national and
Amicable settlement especially with the big defaulter international regulators to manage NPIs volumes and
clients including those reporting regular in CIB banks have the opportunity to extract more value than in
following HC stay order, by way of rescheduling/ the past by industrializing the operating model and
Solenanma adopting digital technologies across the value chain.
Recovery/ Regularization of the liability of genuine
sufferer client by way of waiver of partial/ full com At the end of the year 2017, NPI Ratio of the Bank
pensation and/ or profit and/or Rescheduling decreased to 3.61% from previous year’s 3.83%. NPI in
absolute figure stands at Tk. 25291 million in 2017 as
Improving staff skill to deal with NPIs; against Tk. 23601 million in 2016 which is due to the
Speeding up in-court debt recovery; impact of national economy.

186
ICT Management
Towards Ultimate Automation in Banking

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ICT Management
Report

IBBL the country’s largest private bank, has taken monitoring tool for its transaction monitoring.
initiatives to make the Bank totally IT driven and targeted Accordingly IBBL decided to purchase an automated
to achieve full automation. The Bank has established transaction monitoring tool named ‘SAS AML
online connectivity to its all branches having dual Transaction Monitoring Tool’ an US based world leading
connectivity at all major and city branches, which is the transaction monitoring toll to scrutinize AML
largest network amongst all banks in Bangladesh. transactions, fraud detections and regulatory reporting.
IBBL’s data center is the largest in the banking sector of
the country. Establishment of own ATM network of the Management Information System (MIS) for
bank and introduction of different cards like, Salary IBBL
Card, Travel Card, VISA Debit Card, Remittance Card IBBL has built a strong Central MIS for the Bank. It now
and Khidmah Credit Card and existing ATM (debit) Card contains any Agent Level, Branch Level, Zone Level,
make the services of the bank more attractive to the Central Level Data & Information and also contains
customer. All types of Electronic Fund Transfer (EFT) information of ATM, iBanking, SMS Banking, Mobile
and Alternative Payment Systems i.e. ATM, POS, SMS Banking and External Market. Thus IBBL Management
and Internet Banking, Mobile Banking, Phone Banking can observe the current business trend, growth and
are already incorporated in our list of services. All performance of the bank, can get any business analytics
Branches, as well as all Agent Banking Units of IBBL are at any moment from the Central MIS to take prompt
equipped with sophisticated IT systems with state of the decision. Central MIS enabled us to provide current
art IT components which are rarely used in the banking information to the bodies like Ministries, Bangladesh
arena. Bank, World Bank, IFC, IMF, and ADB etc.

EIBS (electronic Integrated Banking IBBL also built a strong Branch MIS like GBMIS,
System) INVMIS, FEXMIS for the branches which contains
IBBL boasts to be the only Bank in Bangladesh Branch Accounts, Daily Transactions, Remittances,
possessing own developed Centralized Core Banking General Ledger (GL) related information for the monitoring
System, eIBS, which is based on open source technologies of Branch Incumbent and as well as branch users.
and most secure database management system,
ORACLE. All banking modules have been fully integrated IBBL also built MIS for Agent Banking Units to observe
in eIBS including three major modules: General Banking Agent wise performance and agent’s contribution to the
(GB), Investment, and Foreign Exchange. Each module bank.
is running at all branches and integrated with
each other. Any Branch Banking
Presently IBBL possesses the largest online banking
An advanced version of RDS/UPDS module of eIBS has network in the country. All branches are under on-line
also been developed by Bank’s own manpower and connectivity via dual connectivity using Fiber Optics and
implemented in all RDS branches of the Bank. Radio Link where “Any Branch Banking” facilities to the
clients are being provided. Both the revenue and
SAS AML Transaction Monitoring Tool number of transactions of online banking of IBBL have
Transaction Monitoring is one of the most important showed positive growth over the past year. For
regular works of the commercial banks which is also example, more than 1,00,000 transactions per day are
directed by the regulators. As IBBL is the most being performed with volume of approx. Tk. 1000 cores
compliant bank in Bangladesh, it has also been using on line remote deposits and withdrawals.
maintaining the same since long with limited scope
since it is not fully automated. As a part of the AML
remediation project, Kroll Associates (S) Pvt. Limited,
USA, a leading provider of AML risk management
solution known as the ‘Wall Street’s Private Eye’, also
suggested IBBL to operate an automated transaction

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NO. of transaction, amount & income

111.295
109.991

103.334

102.555
92.590
120000
Over 12.5 million transactions took place in
100000
2017 registered a growth of 3.90% from last 80000
year was earned Net income over Tk. 420 60000

10.995

12.972

12.714

12.072

12.543
40000

4.241

4.840

4.533

4.560

4.257
million in 2017
20000
0
2013 2014 2015 2016 2017
No of transcation (in thousand) Total Amount (in Million) Income (in lac)

Equipping IBBL workforce holders can use IBBL’s own ATMs as well as all NPSB &
We have achieved the vision of ‘one man one computer’ VISA enabled ATMs all over the world. More than 25.5
for all employees. All working forces (Trainee Assistant million transactions have been executed from IBBL ATM
Officer and above) of the Bank are currently availing in year 2017. IBBL has already joined in NPSB (National
Computer. We have already set up more than seven Payment system Bangladesh) networks of Bangladesh
hundred IP Phones and twenty-five Video Phones. We Bank through which IBBL customers can make
will provide more than five hundred IP Phones in next transaction at all bank’s ATM booths under NPSB.
year. We have already provided email and internet
facility to most of the officials and executives. We have We have already joined with VISA also, world's largest
plan for providing Email and internet facility for the rest retail electronic payment network, as a principal
of officers gradually. Each year ICTW is arranging more member. Shariah based Khidmah Credit Card, Prepaid
than fifty IT related training and workshop for the Card, Travel Card, Salary Card, Hajj Card and
employees of IBBL where more than three thousand Remittance Card services are in live operation. Customers
employees are attending and the productivity of the now can perform full or partial withdrawal of their foreign
employee has tremendously been improving due to remittance amount either from IBBL ATMs or branches
these programs. using the Remittance Card. It paved the way for making
our cards usable at any global outlets (ATMs and/or
ATM and Card Services POS).
From 2001, IBBL started providing ATM service to its
customers from 55 branches through a consortium of 9 IBBL has already purchased state of the art ATM
financial organizations using a 3rd party ATM service software ‘SMARTVista’ for its ATM operation through
provider and from 2009 the Bank is operating its own which IBBL can offer all the ATM, intra-bank and
ATM network with 420 ATM booths and now IBBL has interbank transaction through NPSB, POS, EMV, utility
562 ATM booths all over the country. payments, no card payments etc. services to its
valuable customers.
Now more than 2.7 millions of our existing ATM card-

No of ATM card, transaction & amount


155,015
140,081
133,164

In the year 2017 number of ATM card crossed over 32 180,000


160,000
103,393

million registering 14.32% growth and also ther is a sharp 140,000


growth in transaction amount which is 10.66% more than 120,000
57,913

100,000
previous year. More over 25.50 million transactions have 80,000
17,189

17,132
16,185
12,173

60,000
been executed in 2017 through ATM. IBBL has 562 ATM
6,940

1,958

2,452

2,814

3,216

40,000
952

booths all over the country. 20,000


0
2013 2014 2015 2016 2017
No of card (in thousand) No of Transcations (in thousand) Total Amount (in Million)

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On-line Data Centre (DC) and Disaster iBanking


Recovery Site Through iBanking; valued clients of IBBL and Foreign
IBBL has the country’s largest Data Centre in the Remittance Exchange Houses can check account
Banking sector running on ORACLE EXAData solution details at IBBL’s Web Portal. So far, nearly 0.25 million
in DC, HOT DR & DR site. IBBL has also completed clients have registered for taking the Internet Banking
setting up of Disaster Recovery Site (DRS) as per the services. IBBL iBanking clients can transfer up to 0.5
guideline of Bangladesh Bank as a replication of our million taka daily from one account to other accounts of
existing Data Center. Full-fledged operations of the DRS any branches of IBBL by himself without any interaction
are now going on. with the bank. IBBL clients can also enjoy mobile top up
services, post paid bill payments, utility bill payments
IBBL Online Money Transfer etc. by iBanking services. More than 17.5 lacs transactions
IBBL online Money transfer system is using by the amounting 2450 crore taka are handled by IBBL iBanking
exchange houses for sending spot/instant cash and system in year 2017. IBBL also introduces mobile apps
direct IBBL customer account credited from abroad. iSmart for iBanking users and customers can also send
IBBL employees use this for payout the spot/instant EFT through iBanking service.
cash. At present 135 exchange houses are directly
connected with the system IBBL online money transfer system.
No. of Registered Customer, Transaction & Amount

24,715
22,205
30000

22,442
14,592
Nearly 0.25 million clients have registered till 2017 with 20000
growth of 26% from 2016. More than Tk.14,500 million are
5,042

handled by IBBL iBanking system in 2017. 10000

1,922

1,767

1,792
1,729
1,529

246
177

195
110

151

0
2013 2014 2015 2016 2017
Number of Registered Customer (in thousand) No of Transaction (in thousand) Total amount (in Million)

Mobile Banking Services (mCash) the country. IBBL also developed its own software for
IBBL has implemented full scale mobile banking daily operations of Agent banking.
services(mCash) like cash in/out, fund transfer, mobile
airtime recharge, utility bills payment, salary and tuition SMS Banking
fee payment etc. to its customers.. Through it, IBBL Through SMS push service, remitters and beneficiaries
intends to bring a revolution in banking trends and to of the foreign remittance can automatically receive a
bring the un-banked population under the umbrella of message in their mobile phones once the amount is
Islamic Banking. IBBL mCash system is integrated with credited in their accounts. From the teller if any account
ROBI, BanglaLink, AirTel and Grameen Phone Mobile network. transacts BDT fifty thousand or above an SMS is sent to
clients registered mobile via IBBL SMS PUSH services.
IBBL website Through SMS push-pull service, clients can see their
IBBL has made redical changes in its website latest balance information and last three transactions in
(http://islamibankbd.com). At present IBBL website is their mobiles from anywhere in the world at any time by
more dynamic, informative, and secured. Updated sending SMS to 6969 (for local clients) and
Information related to IBBL and Islami Banking (public +8801714006969 (for international clients). At present
information) is now available at IBBL website. more than 4 millions clients have been registered in SMS
Banking and on an average 30,000 requests are being
Agent Banking processed per day. About 10 million SMS push-pull
IBBL has started Agent Banking Units in year 2017 and notification has been processed by IBBL SMS system in
already inaugurated 30 agent banking outlets all-over year 2017.

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No. of Registered SMS service user


5000000
4,216,010
4000000 3,428,171
In 2017, SMS banking registered user crossed 42 lac. 3000000 2,612,012
2,005,651
Income from SMS banking reached over 110 million. 2000000

1000000

0
2014 2015 2016 2017

BEFTN (Bangladesh Electronic Fund Trans- anyone can enjoy IBBL phone banking or agent base
fer Network) services round the clock. On an average daily, nearly
IBBL is among of the few banks to develop own BEFTN 3000 calls hit on IVR and nearly 1500 Calls are handled
system. As per guidelines of Bangladesh Bank, IBBL by the Contact Center Agents. Till now about 2 millions
customer is able to offer electronic fund transfers to and callers availed agents support from IBBL Contact
from third bank via BEFTN system in addition to its Center since 2013.
conventional banking channels.
BACH (Bangladesh Bank Automated
Establishment of IBBL Contact center Clearing House)
IBBL has established contact Center to provide smart, Clearing of instruments on the same day is now being
appropriate, state of the art support services to the possible due to implementation of BACH. IBBL also use
clients, Branches, and Head Office simultaneously. in-house developed software for this purpose.
Dialing 16259 or from abroad (+880)-2-8331090

No. of Transaction & Amount Growth


20,000.000 2,500,000.00 15%

2,000,000.00 10% 10% 10%


15,000.000
1,500,000.00 49% 5%
10,000.000
1,000,000.00 0%

5,,000.000 500,000.00 -5%

- -10%
0 -11%
2013 2014 2015 2016 2017 2014 2015 2016 2017
(500,000.00) -15%

No of transaction Total Amount (in lac) Income Growth Growth %

In 2017, over 2.70 million transactions amounting Tk.1,853,970 million have been executed having 1.15%
transactional growth from previous year.

Green Banking: green banking, we have started to develop own


IBBL has taken initiative to migrate towards full-fledged software for Green-Banking day to day operations and
green banking operation. To achieve the milestone of MIS reporting.

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Green Banking:
An Approach for Sustainable Banking

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Green Banking means promoting environmental friendly Initiatives taken by the Bank:
practices and reducing carbon footprint from banking
activities. It is also called as ‘ethical banking’ or a Areas of Green Banking
‘sustainable banking’. The Bank uses the state-of-the art technology to
provide various banking services on E-commerce
Green Banking is a process practiced by the banks to platform. These products include i-Banking, Phone
make the earth environmentally appeasing and safe banking, Visa Debit Card, Khidma Credit Card, mCash,
habitable for all of the species on the earth. A Green Call Centre and so on.
Bank considers all the social and environmental/ecological
factors in its normal banking operations with an 1. Green investment
additional agenda towards taking care of the Earth's Green investment implies investment that helps recover
environment / habitats / resources. Green Banking the environmental degradations, prevent deterioration of
involves the tenets of sustainability, ethical investing, the environment and are not harmful to the environment.
conservation and energy efficiency to protect the Green investment includes both direct and indirect
environment and natural resources. green investment.
(i) Direct green investment: Direct green investment
The banking sector is one of the major sources of means investment to the businesses to procure/
financing industrial projects such as steel, paper, purchase/set up green products, establish green indus-
cement, chemicals, fertilizers, power, textiles, etc., try and transform existing traditional ones to environment
which cause maximum carbon emission. Therefore, the friendly ones.
banking sector can play an intermediary role between (ii) Indirect green investment: Indirect Green Investment
economic development and environmental protection, means working capital investment to environment
for promoting environmentally sustainable and socially friendly plants /industry/products to carry out their
responsible investment. “Green banking” refers to the businesses.
banking which conducts its operations in such areas
The total disbursement in green investment in 2016 and
and in such a manner that helps the overall reduction of 2017 were Tk. 90,958 million and Tk. 97,476 million
external carbon emission and internal carbon footprint. respectively, registering 7.16% growth in 2017. The
To aid the reduction of carbon emission, the Bank has following chart presents a brief disbursement scenario
taken the following initiatives: of green investments of the Bank for the year 2016 and
2017:

Green Investment (million Tk.)


100000
80000

The chart shows that, the growth of Direct and 60000


Indirect investment in 2017 was 0.39% and 7.47% 40000
respectively 20000
0
2016 2017 Growth
Green Direct
investment 3869 3884 0.39%

Green Indirect
investment 87089 93592 7%

2. Environmental Risk Management (ERM) (EnvRR) of the investment proposals within the following
The bank, in its business decision considers Environmental applicable investment limits/thresholds:
Risk Management alongside the Investment Risk Man- For Small and Medium Enterprises (SMEs) financing >
agement system and carries Environmental Risk Rating BDT 2.50 million

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For Corporate financing > BDT10 million and change issues, reduction of carbon emission rate,
disaster management (prevention & rehabilitation) etc.
For Real Estate financing > BDT10 million.

The fund may be used as donation as well as


In 2017, 2457 number of investment projects were
investment at reduced rate of return (rate of return is less
rated out of 2,569 applicable investments where as in
than the weighted average cost of fund) for the climate
2016, total 2,198 number of investment projects were
change vulnerable people.
rated out of 2,624 ratable investments.

3. Climate Risk Fund (CRF) The total CRF utilization of 2016 and 2017 were Tk.
Climate change is the most complicated issue that the 359.40 million and Tk. 326.47 million respectively. The
world is facing. Across the globe there have been percentage of CRF in 2017 in relation to the total CSR
continuous endeavors to measure and mitigate the risk activities was 27.69%. It is to be mentioned that, as per
of climate change caused by human activity. Bangladesh Bank requirement, the Bank is to allocate
minimum 10.% of its annual CSR budget as CRF which
As per Bangladesh Bank requirement, CRF as a part of is also treated as a part of bank’s CSR.
CSR is used under environment friendly banking for the
activities related to prevention of environmental pollution The following chart presents a brief scenario of uses of
and degradation, mitigation and adaptation of climate climate risk fund for the year 2016 and 2017:

400.00 Utilization of climate Risk fund (million Tk.)


300.00
The chart shows that the 200.00
Bank decreased its
Climate related CSR 100.00
activities in 2017 in 0.00
relation to the year 2016 Prime Flood Blanket Profiet Sponsoring Tree Total
Ministers Relief distribution foregone a climate plantation
Relief fund summit
2016 245.00 46.30 33.70 8.40 0.10 25.90 359.40
2017 200.25 14.74 78.43 8.16 0.00 24.89 326.47

4. Green training and capacity building all the operational units, and (b) Academic training and
Green banking training and capacity building for the workshops on green banking, environmental & social
employees in the form of (a) Green Events like seminars, risk management were arranged by IBTRA and HRD.
symposiums, discussion meetings etc. are arranged by

Green Banking Training and Capacity Building


The following chart presents a
brief scenario of green bank- 8000
ing training and capacity 6000
building for the year 2016 and 4000
2000
2017. In 2017, the Bank
0
increased its green training No. of training No. of No. of Expenses
programs Employee customer (million Tk.)
and capacity building activi- participants participants
ties in relation to 2016. 2016 595 6498 3300 9
2017 607 6663 3412 10

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5. Green marketing and awareness Advertisements: Advertisements were given in both


development print and electronic media on green banking prod
For the marketing of the Bank’s green products and ucts/issues.
awareness development of the clients and public the
Publications: The Bank published various publica
following steps were undertaken: tions exclusively on green banking products and
issues.
Motivation: Clients were motivated for making their
products, productions & packaging process environ Public Events: The Bank arranged events publicly
ment friendly. on green banking.

Green Marketing and Awareness Development Expenses


The chart shows the Bank’s vigorous
efforts for green marketing and 66.67
awareness development programs.
The growth in 2017 of Green market-
ing and awareness development 22.00
13.20
programs was 66.67% over 2016.

2016 2017 Growth in %

6. In-house environmental management been ungrateful to his Lord.” Surah Bani Israil-26-27.
The Bank manages its in-house activities in environment Different areas of in-house environment management
friendly ways to reduce its own carbon footprint by are given below:
exercising the direction of the Holy Qur’an “And do not
spend wastefully. Do not be a spendthrift because the a. Utility consumptions
spendthrifts are the brethren of Satan and Satan has Responsible usage of utilities is a primary commitment
of the Bank. The following chart

Utility Consumptions
350.00

presents a brief scenario of 300.00


utility consumptions of the Bank 250.00
for the year 2016 & 2017. 200.00
Papers, electricity and gas 150.00
consumptions had negative 100.00
growth, i.e. despite the growth 50.00
of establishments and business 0.00
volume, the workforce used it -50.00
very responsibly. Other cases, Water Paper Electricty Gas Fuel
due to the growth of offices and 2016 15.38 162.30 286.15 7.84 45.34
business, had positive growth. 2017 15.92 154.15 265.20 3.32 46.55
Growth 4% -5% -7% -58% 3%

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Annual 2017
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B. Waste management The Bank attempts to maximize social welfare, reduce


The Bank emphasizes in waste minimization of its any type of environmental degradation and hazards
resources and centrally collects its e-wastes and other through its operational activities and protect the nature.
solid wastes from every operational unit and disposes Moreover, the Bank's core principle is the protection of
centrally through e-tendering that are environment resources for the future generation.
friendly and safe. In 2017, the Bank earned Tk.1.13
million from sale of its e-wastes. 7. Green targets, strategic plan
and budget
C. Renewable energy The Green banking requires annual targets, strategic
The Bank has strong commitment to use renewable plan and budget at the relevant activities duly approved
energy resources in its operations and as such installed by the competent authority.
solar panels at Head Office and 54 other branches. Targets: Each year the Bank is required to determine
a set of green yearly targets.
D. Green travel
IBBL always encourages its employees to undertake Strategic plan: It includes required means of materi
alizing the actions, supervision, monitoring, evaluat
Green travel for personal as well as business travel and
ing the achievement, training/ awareness develop
has the arrangements of hybrid autos and car pooling
ment (with numbers and nature) and promotion
system.
programs.
E. Ethical banking Budget: Necessary budget for pursuing the strategic
The Bank aims to run in such a way that does not have plan and the targets will also be drawn.
any negative impact on either society or the environment.
The principles of the Bank based on Islamic Shari'ah The green banking budget for the year 2017 covering
have a direct impact on how it invests and utilizes its the related areas of green banking activities of the Bank
resources. It does not finance enterprises that deal in is presented in the chart.
morally questionable businesses.

Green Banking Budget, 2018


The quarterly
segmented budgets
120000
of various areas of
green banking show 90000
that indirect green 60000
investments have
30000
the largest budget
followed by direct 0
Qtr-1 Qtr-2 Qtr-3 Qtr-4 Total
green investment.
The green training Direct Green Investment 6402 6667 6737 7262 27068
has the smallest Indirect Green Investment 29100 27700 28100 27300 112200
allocation, i.e. only
Climate Risk Fund 130 50 50 50 280
Tk. 2.46 million.
Green Training 0.615 0.615 0.615 0.615 2.46

Green Marketing 2.25 3.25 3.25 4.25 13

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Priorities for 2018 ing since its very inception. Nowadays it gained a new
The Bank will pursue all the relevant areas of green shape of budget, target and disclosure based on national
banking with the special focus on the following areas of and international demand. We are to go to the optimum
green initiatives in 2017: level in the formal manner. The green banking concepts
and its practices are to be internalized by all the
workforce. So, it is now become imperatives for us to
5.0% of total disbursed funded investments in direct realize and implement the green banking practices to
green investments.
protect the image of the institution as well as to remain
Expansion of i-Banking and ADC products coverage. compliant of the regulatory guidelines.
Use of Video Conferencing instead of physical movement.
Imperatives of Green Banking: Green banking is very
Lesser paper use and use of on net communication. important in mitigating the following risks involving the
E-tendering and E-recruitment. banking sector:

Careful use of paper, water, electricity, gas and other


i) Credit Risk: Due to climate change and global warming,
materials to reduce own carbon footprint as well as cost.
there have been direct as well as indirect costs to banks.
To check the awareness of green banking among It has been observed that due to global warming, there
bank employees, associates and general public. have been extreme weather conditions which affect the
To create more awareness about green banking economic assets financed by the banks, thus leading to
among the general public and consumers and bank high incidence of credit default. Credit risk can also arise
employees. indirectly when banks lead to companies whose
businesses are adversely affected due to changes in
Creating awareness to business people about environmental regulation.
environmental and social responsibility enabling them
to do an environment friendly business practices. ii) Legal risk: Banks, like other business entities, face
To categorize all the transactions based on their legal risk if they do not comply with relevant
environmental and social risk. environmental regulation. They may also face risk of
direct lender liability for cleanup costs or claims for
To conduct environmental and social due diligence.
damages in case they actually take possession of
To monitor the clients’ environmental and social pollution causing assets.
performance.
To manage a client’s non-compliance with the banks iii) Reputation Risk: Due to increase in environmental
environmental and social standards. awareness, banks are more prone to reputation risk, if
their direct or indirect actions are viewed as socially and
Green Banking or environment friendly banking assures environmentally damaging. Reputation risks emerge
sustainable growth of the institutions and the country. It from the financing of environmentally objectionable
contributes quality avenues of the banking. The Bank, projects.
by its morale, exercises the environment friendly bank-

197
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Stakeholder and materiality


Identification of Stakeholder Engagement with Stakeholders
Identification of stakeholders is the key to understand- The first step of Stakeholder Engagement process for
ing the expectations from the company and as such IBBL is to establish the three pronged sustainability
helps pave the pathway towards delivering value and dimension- economic, social and environmental. The
fulfilling those expectations. While shareholders, key stakeholders are hence aligned with these dimensions
customers, suppliers and employees are the prime and sustainable business objectives are identified by
stakeholders; the regulators, local community, and the understanding correlated stakeholder expectations. By
environmentally interested groups complete stakehold- gauging these objectives, IBBL has formulated strategies
er circle of IBBL. through aligning the business model with the value
creation process that targets stakeholders’ expectations.
This is summarized in the table below

Sustainability Key Stakeholders


Dimension Targeted Sustainable Business Objectives How IBBL Addresses this

Economic Shareholders Maximizing shareholder wealth by Being strategically focused, planning well
declaring sound returns annually ahead to counter challenges and identifying
opportunities.
Continuing to uphold sound governance
practices and effective risk management
infrastructure.
Reinforcement of the internal controls and
compliances.
Provide quality product/ service that Spreading the geographical boundaries
Customers
meets absolute needs of customers through opening more branches across the
Careful management of operations country.
so as to protect customer interest Molding existing service suites to cater to
especially for depositors diversified customer requirements.
Continuously innovating in product suite
and operational process to meet customer
requirements in the most efficient manner.

Adhere to proper procurement Rigorously following internal procurement


Suppliers/
regulations while maintaining a good policy and upgrading the policy regularly to
Service
business relationships with the ensure strong control and fair treatment of
Providers
service providers suppliers.

Ensure compliance with all regulatory Putting in place processes, practices and
Regulators
guidelines and directives controls to ensure compliance with applicable
rules and regulations imposed by local and
international laws and regulations.
Maintaining sound relation with regulators.
Always thriving to achieve global best
practices.

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Stakeholder and materiality Islami Bank Bangladesh Limited
2017 Annual
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Sustainability Key Stakeholders


Dimension Targeted Sustainable Business Objectives How IBBL Addresses this

Social Employees Continuously encouraging employees Engaging employees in activities other than
and working towards creating a business as usual, to achieve a balanced
healthy, ethical and supportive work productive environment which is beneficial
environment to both employees and IBBL
Nurturing human capital to ensure Investing in a wide range of training
sustained collaboration with the programs for every member of the human
Company capital to ensure personal and professional
development.

Local Adding value to the society Implementing programs and initiatives


Communities targeted at marginalized communities and
Conducting business without
causing disruptions in the society underprivileged to address the requirement
of society in education/ skills development,
healthcare and overall poverty alleviation
Enhancing financial access to marginalized
population
Most importantly, adding value to the
society by being a good and
transparent corporate citizen.

Environmental Environmentally Conducting business without harming Implementing Green Banking practices and
Interested the environment ensuring compliance through Green
groups/ Reporting to Bangladesh Bank
Non- Holding a rigid control on energy
Government consumption to reduce wastage
Organizations

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Report

In consideration of the above, IBBL has engaged with regulators, management and employees
to identify their references, concerns and expectations from IBBL.

Stakeholders
Engaged Engagement Process Key Issues raised by Stakeholders

Regulators One-on-one Meetings Corporate Governance, Ethics and


Compliance
All local regulations
Anti-corruption measures implemented by
Circular/ directives/ instructions
the organization
issued by Bangladesh Bank,
Bangladesh Securities & Exchange Responsibility of the organization towards
Commission (BSEC) and other the environment and the community
regulatory bodies.

Management Interactions Corporate Governance, Ethics and


Compliance
Anti-corruption measures implemented by
the organization
Financial Performance
Creating an enabling environment for all
IBBL employees
Non-discrimination, Diversity and Equal
Opportunities
Social obligations through capacity
development of the underprivileged and
women empowerment
Environmental obligations through in-house
management, CSR and Green Banking
initiatives
Superior customer experience through
continuous improvement

Employees Interactions Remuneration and Benefits


Career Growth and Development Opportunities
Fair Treatment
Safe and Healthy Work Environment
Work-life Balance
Employee Grievance Management

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2017 Annual
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Addressing the Material Issues:


Category Aspects Material within the Organization Material outside the Organization

Economic Economic Yes N/A


Performance

Procurement
Practices

Environmental Energy Yes N/A


Biodiversity Any negative influence on protected This aspect is material for the
Compliance and/ or high biodiversity areas environment, and for communities
caused by IBBL’s operations may living close to protected and/or high
lead to fines /sanctions/loss of license biodiversity areas.
to operate/ negative publicity.

Category Material within the Organization Material outside the Organization


Social
I. Human Resources Practices
Employment and Occupational Yes N/A
Health and Safety

Training and Education Yes N/A

Diversity and Equal Opportunity Yes Yes


This aspect is material for communities
where IBBL creates job opportunities
through its operations/branch
networks.

Equal Remuneration for Women Yes N/A


and Men
II. Human Rights
Child Labour N/A N/A

Security Practices Yes N/A

Non-discrimination Yes Yes


This aspect is material for communities
where IBBL creates job opportunities
through its branch networks.
III. Society/Local Communities
Local Communities N/A Yes
This aspect is material for local communities
where IBBL has operations or investments
in projects.
Anti-corruption Yes Yes
This aspect is material for IBBL’s
customers and other stakeholders.

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Report

Category Material within the Organization Material outside the Organization

IV. Product Responsibility


Customer Health and Safety N/A Yes
This aspect is material for IBBL’s
customers.
Marketing Communications Yes Yes
This aspect is material for IBBL’s existing
and potential customer groups.

Customer Privacy Yes Yes


Maintaining privacy of Customer This aspect is material for IBBL’s
information is one of the major customers.
priorities of IBBL staff and a
significant part of its employee
Code of Conduct.

IBBL is committed to continually review all corporate IBBL envisions to uphold and realize its sustainable
governance policies and guidelines to ensure transparency business practices best clarified and anchored by its
in its practices and delivery of high standards and quality sustainability positioning statement.
information to its stakeholders.
IBBL is committed to sustainable development by creating
Therefore, through continuous improvements and long-term value-value for our stakeholders, value for the
aiming to attain sustainable business objectives by environment and value for the community.
maintaining communication with all the key stakeholders,

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Sustainability Report

Donation to the ‘Prime Minister’s Relief Fund

As a responsible corporate citizen and one of the classical ‘Profit Maximizing Approach’ where businesses
biggest Islamic Bank of the world, we believe that IBBL are not only responsible to its stakeholders but also to
has a responsibility to our stakeholders as well as to the the society as a whole in a broader inclusive sense. The
communities in which we work and live. Our commitment idea of being a socially responsible company means
is built on a deeply ingrained sense of social doing more than complying with the legal and regulatory
responsibility among our stakeholders, employees, requirements.
customers alike and that we grow stronger by serving
the communities, improving business practices and
individual lives around us.

Why CSR? CSR EXPENDITURE


CSR is seen as a concept in which companies voluntarily In 2017 : Tk. 1,057.70 million
Up to 2017 : Tk. 6,055.65 million
integrate social and environmental concerns into their
business operations and into the interaction with their No. of Beneficiary
stakeholders. As a matter of fact, over the last few In 2017 : 1,077,793
decades, corporations in the developed economics Up to 2017 : 16,069,245
have moved to ‘Social Responsibility Approach’ from

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IBBL awarded scholarships to underprivileged meritorious students

CSR is the built in mechanism of IBBL Our Commitment to Employees


In order to popularize the concept of Islamic Banking, Our people are our capital-no matter what their title or
IBBL has started its charitable activities since inception job function. We strive to make IBBL a great place to
through creation of ``Sadaqah Tahbil``. Thereafter, it was work and build a career. Our employees describe the
done through IBF converting the Sadaqah Tahbil into a workplace as collaborative, where the views of all
fullfledged foundation since May 20, 1991. Further to its employees are taken into consideration. We possess
activities under IBF, IBBL established Corporate Social value-driven culture, where good ideas are recognized
Affairs Department (CSAD) in compliance with the regardless of the level of the employees.
instruction of the Central Bank.
Human Rights
The Triple Bottom Line The Bank is very much conscious about human rights at
The CSR program of IBBL aims at the welfare and every level of its operations. We do not employ workers
well-being of the people of the earth, the planet itself under the legal minimum age, prohibit the use of forced
and all its stakeholders. Keeping that in view of this labour, respect employees rights to join or not to join a
report focuses on triple bottom line: People, Planet and labour union, respect the principles of collective
Profit. The purpose of this Sustainability Report is to bargaining, provide healthy & safe work place. The Bank
provide an account in a single document of IBBL’s does not make any discrimination on the basis of age,
overall contribution to sustainable development of the gender, race or socio-economic background. It limits
country during the year 2017. work to standard accepted hours and denounces any
sort of abuse of its workforce whatsoever.

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IBBL donated to Holy Family Red Crescent Medical College Hospital

Practicing Good Corporate Governance our communities around the country. We take several
We follow a structured and transparent corporate initiatives in individual and organizational level for
governance culture where roles, duties and scope of development of the community especially the less
policy level & management level are well defined and the fortunate segments of the community. We support: (1)
same are followed meticulously to make the organization Education, (2) Health, (3) Humanitarian & Disaster Relief
thriving one and moving towards its goal. and (4) Sports, arts & culture.

Our Commitment to Communities An amount of Tk. 6055.65 million for 16,069,245


IBBL is committed to being a responsible corporate beneficiaries was spent by IBBL from 1983- 2017 in
citizen. We make grants and support volunteerism in all these areas. Out of which Tk. 1057.77 million for
1,077,793 beneficiaries was contributed in 2017.

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Islami Bank Bangladesh Limited

Sector wise CSR expenditure of IBBL from 1983-2017

(Amount in million Tk.)

Humanitarian & Arts, Literature &


Education Health Sports Environment Others Total
Year Disaster Relief Culture
Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary Amount Beneficiary

1983-
217.61 452291 285.34 265197 873.62 6055481 60.83 413622 68.75 187107 - - 61.31 56674 1567.46 7430372
2009

2010 64.06 158,760 67.8 98,787 64.11 721,160 12.00 2 11.22 41,964 7.36 15,240 11.87 655 238.42 1036568

2011 21.79 32,928 56.17 128,925 25.78 128556 248.75 636 7.15 643 0.48 3 50.55 118115 410.67 409806

2012 87.93 597866 83.8 3014 39.75 19230 1.61 144 8.24 11 12.48 493822 75.38 34438 309.19 1148525

2013 140.10 254078 135.26 7,756 71.50 95,255 78.97 7 5.86 21 22.94 592722 21.79 768 476.42 950607

2014 190.16 498768 161.34 7928 89.47 125079 40.2 5 15.21 17 21.12 723673 7.02 51 524.52 1355521
2015 323.90 606320 175.24 8930 226.04 99469 26.60 6 5.12 643 21.42 757558 22.11 33 800.43 1472959
2016 425.95 481644 161 14235 16.84 209 0.00 0 0.12 4 26.39 690251 40.47 751 670.77 1187094
2017 568.46 420566 382.82 12924 28.97 116 21.00 2 11.50 3 26.40 644162 18.62 20 1057.77 1077793
Total 2039.96 3503221 1508.77 547696 1436.08 7244555 489.96 414424 133.17 230413 138.59 3917431 309.12 211505 6055.65 16069245
Sustainability Report
Sustainability Report Islami Bank Bangladesh Limited
2017 Annual
Report

Sector wise CSR Expenditure-2017 Year wise CSR Expenditure


1200 (in million Tk.) 1058
Hum anitarian
3% 1% & Relief
2%
Education
800
4%
800 671
Environment 525
476
54% Health 400
36%
Arts & Culture

Others 0
2013 2014 2015 2016 2017

Education which Tk. 28.97 million for 116 beneficiaries was


From the very beginning, IBBL engaged with promotion contributed in 2017. During the year 2017 we contributed
of education sector of the country. IBBL spent an Tk. 20.00 million to Holy Family Red Crescent Medical
amount of Tk.1508.77 million for 547,696 beneficiaries College Hospital.
from 1983-2017 for this purpose. Out of which Tk.
382.82 million for 12,924 beneficiaries was contributed Humanitarian and Disaster Relief
in 2017. Disasters can strike anywhere. No country, rich or poor,
is immune from risks of accidents and disasters causing
During the year 2017 we contributed Tk. 20.00 million deaths and injuries, destruction and damage to properties
for Ramu Cantonment English School, Tk. 10.00 million and assets; disrupting economic activities and
for Anjuman Mufidul Islam and Tk. 3.50 million for livelihoods of individuals and households.
Marketing Department of Chittagong University.
Over the year, people of this land are fighting with poverty
Scholarship Program and many other natural disasters. Being a corporate
IBBL has been providing scholarship to the very poor citizen of the country, IBBL always stands beside the
2,300 students (1500 in HSC and 800 in Graduation distressed humanity. By devising special deposit products,
level) securing GPA 5 in SSC & HSC examinations under extending financial inclusion and providing financial
its Scholarship program. The Scholarship is provided to assistance, the Bank discharges its responsibilities
the students @ Tk. 2,000/- per month for 2 years for towards the poor and less fortunate segments of the
HSC level with Tk. 3,000/- at a time for purchasing society. Disaster relief program includes winter cloths
Books per year. Tk. 4,500/- (Urban) & Tk. 3,000/- (Rural) distribution, Donation to PM’s relief fund, distribution of
per month for 3 to 5 years for Graduation level with Tk. Tohfa-e-Ramadan, sacrificial meat distribution, rehabilitation
5,000/- at a time for purchasing Books per year. An program etc. An amount of Tk. 2039.96 million for
amount of Tk. 168.90 million was spent for scholarship 3,503,221 vulnerable persons was spent by IBBL from
purpose in 2017. 1983-2017. Out of which Tk. 568.46 million for 420566
beneficiaries was contributed in 2017.
Health Program
Health care is a basic need of all societies. But people Sports, Arts & Cultural Program
are facing here a perilous situation due to hazardous Sports, Arts & cultural programs make a nation
Medicare system of the country. Considering this, IBBL physically and mentally sound and healthy. Engaging
takes several initiatives in individual and organizational with this type of works young people could be able to
level for developing health sector of Bangladesh. IBBL avoid many bad things, as like taking drugs, involving
spent an amount of Tk. 1436.08 million for 7,244,555 forbidden underworld parties, hijacking money from
beneficiaries from 1983-2017 for this purpose. Out of innocent people etc. This is why IBBL sponsors various

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IBBL distributed blankets among the cold affected destitute people

sports & cultural events every year. IBBL encourages 2017 for environmental issues of the country.
sports and cultural activities of its employees. An
amount of Tk. 623.13 million was spent by IBBL from We try to reduce our impact on the planet. We took
1983-2017 for this purpose. Out of which Tk. 32.50 initiatives to reduce carbon emission through installation
million was contributed in 2017. of solar panels, introducing measures for saving electricity,
water, gas and fuel, encouraging double-sided printing,
Environmentalism at IBBL use of scrap/one-side-used papers for note pad etc.
The main theme of environmental responsibility is to We are strict to installation of biomass processing
protect the environment from destruction with a view to plants, waste recycling plants and Effluent Treatment
keeping it healthy for future generation. Recently, the Plants (ETPs) in our financed projects. We also educate
issue of climate change is being considered seriously all and encourage our employees to be sensitive to the
over the world. It is identified that Bangladesh being a environment both inside and outside of the office.
country of southern delta is under serious threat from
natural disaster. IBBL contributed an amount of Tk.
138.59 million to 3,917,431 beneficiaries from 1983-

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Management Report and Analysis

Business Development Conference

Business and Financial Overview Deposit


In spite of having volatile global & national economic At the end of 2017, deposit of the Bank reached to Tk.
situation and regulatory changes in 2017, Islami Bank 755,022 million with an increase of Tk.73,670 million
Bangladesh Limited was able to show consistent registering growth 10.81% over previous year. In 2017,
performance in most of the business areas. It was IBBL’s market share in deposit stood at 8.15%.
possible because of the grace of Al-mighty Allah, Bank’s
massive induction of new customers, modernization of General Investment
payment system, strengthened bank customers Total general investment of the Bank stood at Tk.
relationship, enhanced service quality apart from 710,729 million with an increase of Tk. 94,310 million
complying banking regulations and Shari’ah rules. registering 15.30% growth over 2016. In 2017, the Bank
secured 8.42% market share of investment.
Profit before Tax Investments in corporate, SME, agriculture, housing,
In 2017, the Bank earned highest operating profit in the transportation, rural and urban development are major
country’s banking sector. The profit before tax of the sectors stated as below:
Bank was Tk. 12,113.32 million during 2017. However,
comprising of the income of two subsidiaries of IBBL Corporate Investment
that is IBSL and IBCML, the consolidated profit before Investment products of IBBL are fundamentally welfare
tax in 2017 was Tk. 12,473.12 million.

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oriented and inclusivity-driven to fit to the requirements Housing Investment


of Shari’ah. Shari’ah objectives, while financing under The housing investment of the Bank stood at Tk. 24,831
different modes, are met through diversification of million marking 3.49% of total general investment
investment by size, sector, economic purpose and in 2017.
geographical location. The investment policy of the
Bank has completely stirred integrating the latest Transportation Investment
concepts of inclusive growth, green finance and sustainable Transport Investment of the Bank in 2017 stood at Tk.
growth towards achieving Maqasid-al-Shari’ah. Investment 8,374 million which is 1.18% of the total general
products of IBBL include general investment, trade investment.
finance for domestic and international transactions,
project finance and syndication services, and treasury Foreign Exchange Business
operations. Total foreign exchange business of the Bank stood at
Tk. 858,272 million. The external sector performance on
Micro, Small and Medium Sector three major indicators of IBBL in 2017 is noted below:
Investment
Import: Import business of the Bank in 2017 stood at
MSMEs account for 30% of GDP, 40% of employment,
Tk. 385,194 million marking growth of 13.31% with
80% of industrial jobs and 25% of the total labour force
market share of 9.19%.
in Bangladesh. In 2017, IBBL’s SME exposure was 18%
of the total national SME financing. IBBL’s SME contributes Export: In 2017, the export business of the Bank was
over 40% in the total investment of the Bank. The Bank Tk. 240,026 million and marked (1.49%) growth over
was involved in general and women entrepreneurs’ 2016 with market share of 9.27%.
development in particular by providing training, counseling
Wage Earners’ Remittance: In 2017, the Bank’s total
and other facilities to them in 2017. IBBL sponsored
wage earners’ remittance stood at Tk. 233,052 million
and participated in various programs like road-shows,
making 19.55% market share.
fairs, seminars, symposiums for the development of
MSME sector. In addition to the above areas, treasury, dealing room
etc. are the integral parts of the foreign business of the
Agriculture & Agro based Investment Bank.
Investment in Agriculture and Agro based sector stood
at TK. 97,242 million. Allocation in this sector as on
Information and Communication
December 31, 2017 is 13.68% of the total investment. Technology
Since 2009 IBBL has been operating its own ATM
Rural & Urban Poor Development network and now with 562 own ATM booths and above
Investment
9,000 shared ATMs. In 2017, more than 8 million
The performance of both RDS (Rural Development
transactions have been executed through IBBL ATM.
Scheme) and UPDS (Urban Poor Development
Necessary steps were taken to integrate IBBL with NPS
Scheme) is improving systematically and gradually. In
(National Payment System) network of Bangladesh
2017, RDS investment reached to 3.84% of total
Bank for facilitating access of customers to all banks’
investment whereas UPDS investment stood at 0.16%
ATM booths. In 2013, IBBL launched VISA debit card for
of the total investment. By the end of 2017 the operation
POS and other related transactions facilities of the
of RDS has been spread to 20,653 villages with
customers. Other ICT based products includes online
1,108,710 members through 30,032 centers. Besides,
banking, e-banking, mCash, ATM, SMS banking, Call
24 branches under Dhaka, Chittagong and Sylhet
Center, Phone Banking, e-recruitment, etc. IBBL has
metropolitan cities implemented the Urban Poor Development
launched Hajj prepaid debit card in 2013 to fulfill instant
Scheme (UPDS) in 2017 to alleviate poverty.
cash need of the pilgrims. The Bank has launched VISA
based Khidmah Credit in the year 2014.

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Investors’ Capital Management CSR Activities


IBBL always strives to give high Return on Equity (ROE) IBBL through its various CSR programs is contributing
to shareholders through prudential business decision significantly to develop socio-economic condition of
while deploying their capital. The Bank has also Bangladesh. The Bank spent Tk. 1,057.77 million as
implemented the Revised Guidelines on Risk Based CSR expenditure in various sectors such as disaster
Capital Adequacy for Banks as designed in Basel II. It is management, education, health, sports, art & culture
also in process of implementing Basel-III. Basel-III and environment etc. in 2017. IBBL brought a new
complied Bank now with its Tire 1 capital. The Bank dimension to its CSR operations since 2013 donating
maintained Capital to Risk-weighted Asset Ratio Tk.150 million to Proyash, an institute run under the
(CRAR) above minimum requirement (11.25%) patronization of Bangladesh Army dedicated to the
throughout 2017 and it stood 11.50% (consolidated) as wellbeing of children with special needs and disability.
on December 31, 2017. Thus, IBBL has been exerting CSR in areas of basic
needs such as education and healthcare, particularly for
Operations and Compliance the underprivileged section of population in our society.
The Bank adheres to the highest standards of risk IBBL has made a number of successful cases over time
management and compliance throughout 2017. The through its CSR engagements.
compliance policies of the Bank are formulated following
the standards and policies of national and international Relationship between the entities performance
regulatory and non-regulatory bodies. In 2017 the Bank with the management’s objectives and
properly adopted the regulatory guidelines like Money strategies
Laundering Prevention Act, Anti-Terrorist Act etc. to Management’s objectives are consciously directed
prevent fraud and forgery. toward that effective and efficient achievement of
organizational objectives. On the other hand, manage-
Financial Inclusion ment’s strategy involves formulation and implementation
IBBL kept continuity of sustainable financial inclusion of the major goals and initiatives taken by a company’s
throughout 2017. Welfare and inclusivity oriented top management on behalf of owners, based on
deposit products such as Muhor, Cash Waqf, Hajj, consideration of resources and an assessment of the
Farmers etc. of the Bank highly partake to the development internal and external environments in which the
of economic empowerment of less privileged people of organization competes. Management strategy provides
the society. In 2017, the Bank also reached to the overall direction to the enterprise and involves specifying
unbanked people through various special programs and the organization’s objectives, developing policies and
was able to open 7,356 Farmer accounts, 25,717 plans designed to achieve these objectives, and then
Student accounts, 4,046 Mohor accounts and 2,420 allocating resources to implement the plans. Being a
Cash Waqf accounts. welfare oriented bank, IBBL always strives for highest
standards of equity and distributive justice in the field of
Green Banking all economic activities. The performance of the entity is
The Bank used to emphasize on social, ethical and linked with the Management’s objectives and strategies
environmentally responsible approaches to business in the following manner:
activities. Keeping in view the spirit of Green Banking,
IBBL opened a Green Banking Department and took
effective steps in line with Central Bank’s directives. By
now, the Bank has been able to reduce paper use
substantially through automation and simplification of its
procedures.

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Welfare is a condition of having good health, comfortable living organizational goals.


and pleasant working conditions. Hence, it can be said that
welfare services are those which ensure conditions of having To materialize the spirit of the above, a comprehensive as well
good health, comfortable living and working conditions, which as inclusive development initiative covering various
dimensions is accomplished by Human Resources Wing.
are generally one’s basic needs. Islam views work as the
Apart from the traditional top-down approach of human
primary means of earning and acquiring income and wealth.
development, an initiative is going on to transform every
As such, IBBL has earned reputation to ensure welfare oriented Branch into a Center of Excellence to ensure effective capacity
banking services through its welfare oriented Special Investment building of the employees of every tiers.
Schemes, Cash Waqf Deposit, dynamic Corporate Social
Responsibility, Mobilization of Zakah etc. IBBL is also committed to provide banking services that are
purely based on Islamic Shari’ah, transparent and efficient. It
Financial inclusion has emerged as a tool to achieve inclusive always struggles for achieving the utmost stage of excellence
growth for poverty reduction since 2005, a year that the UN to establish a set of managerial succession and adopt
has declared International Microcredit Year. Studies indicate technological changes to ensure the development of an
that a positive correlation exists between financial development Islamic Bank as a stable financial institution, emerge as a
healthier & stronger bank at the top of the banking sector and
and economic growth. Current development theories suggest
continue to maintain stable positions in all the major business
that greater financial inclusion can have a positive impact on
indicators.
the lives of the poor. IBBL based on its Rural and Urban Poor
Development Schemes as a successful model has a share of
more than 50% of the world Islamic microfinance. Welfare and
Challenges in 2017
inclusivity oriented deposit products such as Muhor, Cash Banking sector in Bangladesh has come across another
Waqf, Hajj, Farmers etc. of the Bank highly partake to the turbulent year facing many odds and pitfalls in the macroeconomic
development of economic empowerment of less privileged fundamentals. The major challenges faced by the banking
people of the society. industry were relatively higher investment (credit) growth
compared to deposit and increasing trend of non-performing
Our efforts continued during the whole year under review to investment (credit) resulting to higher provisioning requirements.
further diversify investment portfolio by size, sector, economic Due to tight liquidity position, average rate of interest (profit) on
purpose & geographical location. Alhamdulillah, we see deposit has increased. The cumulative effects of these put
positive shift in our investment portfolio in reducing concentration pressure on the profitability of the banking sector as a whole.
in big clients. Investment share of top 100 clients to general Being an integral part of the banking industry, IBBL had to face
investment decreased. Percentage of investment up to Tk.100 the challenges. Despite all the challenges, IBBL could close
million to general investment increased. SME investment & the year in a positive note.
rural investment to our general investment also increased.
Outlook for 2018
Investment in thrust sector of the economy of our country falls The economy of Bangladesh, one of the most potential
under the priority areas of IBBL. The Bank has considerable emerging economies of the world, is gradually moving
forwards higher growth regime. IBBL, being one of the leading
amount of investment in the industrial sector. IBBL ventured in
players of this economy, is committed to meeting all the needs
financing garment industries in the early stage of the Industry.
of every family of Bangladesh. IBBL is going to focus more on
The Bank also financed in the backward linkage industries. It inclusivity driven sustainable financing for becoming the ‘Bank
is mentionable here that, most of the leading export-oriented of Choice’ for all. The short and mid-term strategies to achieve
garment industries of the country initially started their business the desired success are as follows:
taking small size investment from IBBL.
Efficient fund management through deploying
Development of human resources is necessary to ensure surplus liquidity in priority sectors with particular
sustainable growth and advancement of an organization. focus on small and medium enterprises.

This approach is a framework for helping the employees Mobilization of low cost deposit be strengthened
develop their personal and organizational knowledge, skills while investment diversification will be made with
and abilities by means of extensive improvement process more focus in service and infrastructure sectors.
covering systematic training, motivation, coaching, counseling,
mentoring and the likes. This is also an initiative to equip & Competitive pricing of Asset and liability products will
assist the staffs to be adequately improved to shoulder be ensured.
optimum workload towards efficient accomplishment of

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Management Report and Analysis Islami Bank Bangladesh Limited
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Vigorous risk management practices and a high level Agent Banking Activities:
of vigilance will be maintained to keep asset quality Islami Bank Bangladesh Limited launched Agent Banking
at standard level. services with a view to reaching banking services to the
door-steps of unbanked people across rural areas. Account
100% compliance will be ensured in all respects opening, mCash account opening, cash receipt & payment,
through both on-site and off-site supervision. foreign remittance payment, fund transfer, utility bill payment,
cheque book requisition, fund transfer, balance inquiry, debit &
Implement a rigorous talent management and
credit card application and investment processing,
industry best human resource development program.
disbursement & recovery facilities are available at Agent
New products will be developed to cater to various Banking Outlets. Up to 2017, total 30 Agent Banking outlets
needs of the client of different strata and add value to have been opened.
the existing products and services.
Students Banking:
Automation process will be strengthened to bring Students are the future of a nation. With a view to encouraging
more customers under virtual banking and upgrade savings & ensuring financial services, the Bank has introduced
services networks. Students Mudaraba Saving Account (SMSA) with minimum
balance of Tk.100/-. The program meantime got good
Steps will be taken to ensure green and sustainable
response from the students with 2.37 lac accounts as on
growth of banking business.
31.12.2017 with more than 16% market share. In 2017, 115
programs were conducted at different Zone/Branches under
Report on Financial Inclusion School Banking Campaign where 25,620 accounts were
Financial inclusion has emerged as a tool to provide access to
opened while 33,190 students attended programs.
financial services to all the people in a fair, transparent and
equitable manner at affordable cost, and address the imperative
need to modify the financial services delivery system to Banking for Farmers:
achieve greater inclusion. To percolate the benefits of In order to ensure smooth economic activities of the country
economic development of Bangladesh to different segments by way of inclusion of unbanked farmers into banking services,
of our society, IBBL has been working relentlessly towards Islami Bank Bangladesh limited has introduced Mudaraba
overall development of the country by ensuring sustainable Farmers Account (MFSA) with minimum balance of Tk.10/-.
development of the mass people of the country as a whole. The Bank has opened 678,448 farmers accounts till 2017.
The initiatives have already been taken for financial inclusion is
depicted below:
Banking for Industry Employees:
In order to improve the living standards of the workers of RMG,
Rural Development Scheme (RDS): leather and footwear sector IBBL has launched Mudaraba
In order to ensure financial inclusion & to facilitate financial
Industry Employees Saving (MIES) with an initial deposit of
empowerment, self employment and raising income of the rural
Tk.100/-. The Bank has opened 4,870 accounts in this sector
people with a view to alleviate poverty, IBBL has been conducting
collateral free micro investment program under Rural Development
till 2017.
Scheme (RDS) among the rural poor people. At present this scheme
has covered about 11.00 lac clients of 20,653 villages of the country Banking for service man under National
where 85% beneficiaries are women. Service Program:
IBBL has been providing banking services to the Service Man
Islami Bank mCash: under National Service Program of Bangladesh Government.
Islami Bank mCash is the Mobile Banking service of Islami The temporary employees under National Service Program are
Bank Bangladesh Limited where the customers of any mobile allowed to open bank account with initial deposit of Tk.50 only.
operators can take the 24 hours of mobile banking services There is no bar of minimum balance & no service charge is
from anywhere of the country without going to any branches. realized from these accounts.
IBBL has been providing mCash service through 173
corporate & 31,023 retail agents throughout the country. Up to
2017, a total of 23,59,938 mCash Accounts have been
opened.

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Products & Services

214
Products & Services Islami Bank Bangladesh Limited
2017 Annual
Report

Deposit Products Investment Products & Schemes


Deposit Products in Local Currency Investment Products
1. Al-Wadeah Current Account (AWCA) 1. Bai-Murabaha

2. Mudaraba Savings Account (MSA) 2. Bai-Muajjal

3. Mudaraba Special Notice Account (MSNA) 3. Bai-Istijrar

4. Mudaraba Special Savings (Pension) Account (MSSA) 4. Bai-Salam


5. Bai-Salam (Pre-shipment)
5. Mudaraba Term Deposit Account (MTDA)
6. Bai-Istisna
6. Mudaraba Savings Bond Account (MSBA)
7. Mudaraba
7. Mudaraba NRB Savings Bond (MNSB)
8. Musharaka
8. Mudaraba Hajj Savings Account (MHSA)
9. Musharaka Documentary Bill (MDB) Inland
9. Mudaraba Waqf Cash Deposit Account (MWCDA)
10. Musharaka Documentary Bill (MDB) in Foreign Currency
10. Mudaraba Monthly Profit Deposit Account (MMPDA)
11. Musharaka Investment in Potato Storage
11. Mudaraba Muhor Savings Account (MMSA)
12. Hire Purchase under Shirkatul Melk (HPSM)
12. Students Mudaraba Savings Account (SMSA)
13. Murabaha Post Import (MPI)
13. Mudaraba Farmers Savings Account (MFSA) 14. Murabaha Import Bills (MIB)
14. Mudaraba Upohar Deposit Scheme (MUDS) 15. Murabaha Import LC
15. Mudaraba Industry Employees Saving Account (MIESA) 16. Murabaha Foreign Currency Investment (MFCI) under EDF
17. Murabaha Foreign Currency Investment (MFCI)
under Balance of MFCD A/C
Deposit products in Foreign Currency
18. Bai-Muajjal Back to Back Bills
1. Mudaraba Foreign Currency Account (MFCA)
19. Bai-as-Sarf (Foreign Documentary Bill: FDB)
2. Mudaraba Exporters’ Retention Quota Account (MERQ)
20. Bai-as-Sarf (Foreign Currency Cheques/Drafts: FCD)
3. Foreign Currency Account (FCA)
4. Foreign Currency Account (ERQ)
Welfare-oriented Investment Schemes
5. Foreign Currency Account of EPZ Enterprise
1. Household Durable Scheme (HDS)
6. Resident Foreign Currency Deposit Account (RFCD)
2. Housing Investment Scheme (HIS)
7. Non-Resident Foreign Currency Account of
Exchange Houses/Banks 3. Real Estate Investment Program (REIP)

8. Non Resident Investors Taka Account (NITA) for 4. Transport Investment Scheme (TIS)
Foreign port-folio Investors. 5. Car Investment Scheme (CIS)
9. Non-Res