An Internship Report On

Islamic Shariah Basis Banking Operation of Dhaka Bank Limited

Islamic Banking Branch

Islamic Shariah Basis Banking Operation of Dhaka Bank Limited

AN INTERNSHIP REPORT ON

SUBMITTED TO:
Ms. Alkona K. Choudhury FAVP Human Resources Division Head Office Dhaka Bank Limited Dhaka

SUBMITTED BY:
Kalyani Sen Roll No.: 451(Sl no:81) MBA 4th Batch Stream HRM Department of ManagementStudies University of Dhaka

Date of Submission: 15 May, 2005

Islamic Banking Branch

Letter of Transmittal
15 May, 2005 Professor Dr. Nazmul Karim Chowdhury Department of Management Studies Faculty of Business Studies University of Dhaka Sub : Submission of Internship Report Dear Sir, It is my pleasure to submit the report on Shariah Based Banking System of Dhaka Bank Limited (Islamic Banking Branch) as a part of my Internship program.

I enjoyed preparing this report, which enriched my practical knowledge of the theoretical concept. I tried to reflect the practical operational aspects of the Bank, which is complementary to the theoretical lessons.
I am very much glad that you have given me the opportunity to prepare this report for you & hope that this report will meet the standards of your judgment. Thanking you. Yours faithfully.

__________ Kalyani Sen Roll No.: 451(Sl no:81) MBA 4th Batch Stream HRM Department of Management Studies University of Dhaka

Acknowledgement
First of all, I express my deep gratitude to God for this infinite grace that allowed me to complete this report as a part of the MBA program. A lot of effort & study has been involved in preparing this report a reality. I take this opportunity to express my gratitude & heartfelt thanks to my honorable teacher Professor Dr. Abu Saleh, Chairman of Department of Management Studies, University of Dhaka, who grant me to do my internship in Dhaka Bank Limited. I also express my deep sense of gratitude reverend teacher & supervisor Professor Dr. Nazmul Karim Chowdhury, Department of Management Studies, DU, for his constant supervision, moral support, valuable instruction & helpful advice during the course of studies & research work. I would like to express my warm gratitude & cordial thanks to my another supervisor, Md. Sirajul Hoque, EVP & Manager of Dhaka Bank Limited Islamic Banking Branch, Md. Wahidur Rahman Chowdhury,AVP & Ms. Syeda Sowkat Ara, Principle officer of Investment Division of DBL IBB, Mr. Salauddin Ahmed, SAVP & Mr. Saiful Karim Chowdhury, AVP of Training Institute of DBL, for their kind prior permission & introducing me to different section where received generous helps. Their direction, critical comments criticism, generous patience greatly helped me in improving the research capability writing skills. It would have been quite impossible to carry on the dissertation & give it a final shape without their encouragement. It is beyond my ability to thanks all of those marvelous people who have contributed for preparation of this report. The name worth mentioning is Ms. Alkona K. Chowdhury, FAVP of HRD of DBL, who allowed me to do my internship in her organization. Finally, I am deeply indebted to my family, teachers & friends whose invaluable support & encouragement have done much to make this report a successful one.

Table of Contents

Executive Summary

PART-A
Islamic Banking Branch

PART-B
Islamic Banking Branch

PART-C
Islamic Banking Branch

PART-D
Islamic Banking Branch

PART-E
Islamic Banking Branch

Findings
I found the following problems to DBL, IBB: The objective of DBL, IBB is to administer every things according to Islamic Shariah but in case of investment by Mudarabah mode the profit is charged earlier though the client may not get profit from his/her but he/she will have to pay the fixed rate of profit which is similar to interest based banking system. There are two & most important investment mechanisms of Islamic Banking system as Mudarabah and Musharakah but DBL, IBB still does not use the Partnership mode i.e. Musharakah but it was mention in the feathers of the bank that investment of the bank is done on the basis of Partnership or Musharakah. The bank is not free from interest because it has to maintain account (Nostro) with foreign banks which are not Islamic Bank. It has also an account with Bangladesh Bank that brings huge amount of interest every year.

Recommendation
Banking is a service oriented marketing. Its business profit depends on its service quality. Thats why the authority always should be aware about their service quality. In our country it is important to make investment in information technology followed by human resources with necessary training and sales and distribution. To provide quality service to the customer it is necessary to have a trained team in the organization or an institution. For this reason the bank should recruit more fresh, bright and energetic persons such as MBA, BBA, MBM etc. professional degree holder. Only one for more branch never fulfill the requirements whole nations that needs more branches . thats why as soon as possible the bank should launch more branches in Dhaka city as well as in other cities of the country. Now a days world is going on very fast. Now most of the banks provide online customer service system. Employees require more training to better understand online banking system . One of the business strategies is promotion. Successful business depends how they can promote their products or services to the customer. In this connection to improve the business status bank should introduce more promotional programs. In general banking department it is necessary to implement modern banking process instead of traditional system. It should be more computerized. Delegation of authority should be made enough to make the speed of providing service fast. Musharakah & Mudarabah mode of investment should be utilized as soon as possible. Though Mudarabah mode is used but its proper utilization is necessary. Employees require more training to better understand the Islamic economy.

Conclusion
Lots of new commercial bank has been established in last few years and these banks have made this banking sector very competitive. So, now banks have to organize their operation and do their operations according to the need of the market. Banking sectors no more depends on a traditional method of banking. In this competitive world this sector has trenched its wings wide enough to cover any kind of financial services anywhere in this world. The major task for banks, to survive in this competitive environment is by managing its assets and liabilities in an efficient way. As an internee student in IBB of DBL, I have truly enjoyed my internship from the learning and experience viewpoint I am confident that three month internship program at Dhaka Bank Limited will definitely help me to realize career in the job market. During the course of my practical orientation I have tried to learn the practical banking to realize my theoretical knowledge, what I have gathered and going to acquire from various courses. It is great pleasure for me to have practical exposure of DBL, because without practical exposure it couldnt be possible for me to compare the theory with practice. Through the departments and sections are covered in the internship program, it is not possible to go to the depth of each activities of branch because of time limitation. So objectives of the internship program have not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objectives of the internship program. As Islamic banking is a new phenomenon on our country, it is important to examine the prospects of Islamic banking branch of DBL. Although one and half year already has passed, the performance of Islamic banking branch is highly attractive. And it is expected that in near future they shall carry forth their proud tradition of excellence in banking. Not only Dhaka Bank opens its Islamic Banking branch, rather many other traditional banks now offer Islamic banking branches like Southeast Bank, Prime Bank, Jamuna Bank, Premier bank and in association with Islamic banking branch there exist Islamic bank like Islamic Bank Bangladesh, Shahajalal Islamic Bank, Exim Bank, Al-Arafah Islamic Bank, Social Investment Bank etc. So Islamic Banking Branch of Dhaka Bank limited requires increasing their service competitively so that they can survive in the market. So in conclusion it can be said that every organization has its positive as well as negatives & in case of DBL existence of the later one is less than the earlier one & as the management is determine to reach the pick of success it seems that in near future the negatives will be eliminated. Ten years is a very short span of time & the organization, which can establish itself as one of the most reputed private commercial Bank in the country within the short period deserves special credit with their able leaders DBL will reach the highest level of success very shortly. I wish the bank all success prosperity in their field.

Bibliography
Prospectus of Dhaka Bank Limited. Annual Report 2004 of Dhaka Bank Limited. Islamic Banking related books. Credit operational Manual of Dhaka Bank Limited. Web site: www.dhakabankltd.info.com Several Newsletters of Dhaka Bank Limited. Several Booklets of Dhaka Bank Limited. Islamic Banking by- Dr. Muhammad Imran Asraf Usmani Islamic Banking by- M. Kabir Hassan Operational Manual of IBB of DBL by- Md. Sirajul Hoque, EVP & Manager of IBB of DBL

Graphs Showing Total Import Investment and Profit of Dhaka Bank Lt. for the Year 2004

Trend of Investment 2004

440000 430000 420000 410000 400000 390000 380000 370000
Ja n Fe b M ar Ap r M ay Se p O ct No v De c Ju Ju l Au

Taka in Thousand

Investment

Month

Trend of Deposit year 2004

1600000 1400000 1200000 1000000 800000 600000 400000 200000 0 Mar Feb Sep May Nov Jan Ju Apr Jul Au Oct Dec Taka in Thousand

Deposit

Month

Trend of Profit 2004

4000 3500 3000 2500 2000 1500 1000 500 0
Ja n Fe b M ar Ap r M ay Se p O ct No v De c Ju Ju l Au

Taka inThousand

Profit

Month

PROFIT & LOSS STATEMENT OF IBB OF DBL FOR THE YEAR-2004_

Month January February March April May June July August September October November December

Income 8486317.29 8433749.08 8918858.00 9169227.61 7630893.11 7340219.49 8669252.53 10428112.10 9106453.04 8786155.96 9832620.12 10643484.00

Expense 6974769.70 6405519.50 6471650.60 5891193.10 5321930.60 5698406.40 6795051.70 8060475.40 6235251.50 5897003.70 6456581.50 7225600.10

Profit (Loss) 1511520.59 2028229.56 2447207.41 3278034.47 2308962.52 1641813.13 1874200.83 2367636.64 2871201.59 2889152.23 3376038.58 3417883.93