Paragraph Index

1. About Exim Bank

2. Islamic Banking is better than Conventional Banking
3. Central Bank
4. CSR
5. RTGS
6. NPSB
7. ADB
8. BRICS Development Bank
9. IDB
10. Green Banking
11. Shariah Board
12. BACH
13. BEFTN
14. BACPS
15. ACU
16. Off-shore Banking
17. T24(CBS)
18. CAMELS rating
19. Customer service
20. Deposit Mix
21. Agent Banking
22. Online marketing
23. Sub-Branch (Banking Booth)
24. Sukuk (Islamic Bond)
25. Al-Wadiah Principle
26. Mudaraba Principle
27. Musharaka
28. Bai-Muazzal
29. Bai-Murabaha
30. Bai-Salam

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 1. About Exim Bank
Export Import Bank of Bangladesh Limited was established in 02, June 1999 under the
leadership of Late Mr. Shahajahan Kabir, Founder Chairman. Mr Nazrul Islam Muzumder
became honorable chairman after the death of the Founder Chairman.
The Bank started its banking operation as a conventional Bank since August 03, 1999 named as
Bengal Export Import Bank Limited (BEXIM) and on 16, December, 1999 it was renamed as
Export Import Bank of Bangladesh Limited (EXIM).

EXIM Bank the first pioneer in the country converted its mode of operation and started its pace
as full fledged Islami Bank since July, 2004. To ensure the proper implementation of Islami
Banking Principles in its operation, the bank framed a strong Shariah Supervisory Committee
consists of 11 (eleven) learned & elite Mufti, well reputed Economists and Bankers of the
country.

The gist of our vision is ‘Together Towards Tomorrow’. From the very beginning of its journey
Exim Bank set a standard in service which made the bank outstanding. Its commitment to the
Quality Management, Good Governance, continuous effort to improve in all sects, excellence in
service as well as CSR activities always been appreciated at home and abroad. In consequence,

Exim Bank achieved several national and international awards. i.e

ICMAB Best Corporate Award 2013,

International "BIZZ Award -2013",
"International Diamond Prize for Excellence in Quality" award,
"World Finance" award.
Achievement of EXIM bank’s are Implementation of the world renowned Core Banking
Software (TEMENOS T24), Conversion from Conventional Banking to Shariah Based Islami
Banking.
Key Note:
 EXIM bank is 3rd generation commercial Bank
 It was established in 1999
 EXIM bank Functioning started 3rd august, 1999
 EXIM bank converted from BEXIM 16th November, 1999
 Founder Chairman of the Board of Director Late Mr. Shahajahan Kabir
 Present Chairman of the Board of Director Mr. Md. Nazrul Islam Mazumder
 Founder Managing Director of Mr. Lakiotullah
 Present Managing Director of Dr. Mohammed Haider Ali Miah
 It’s converted from conventional bank to Islami bank 1st July, 2004 with 26 branches
 No of branches of EXIM Bank are 132
 No of deposit product of EXIM Bank are 76
 No of investment product of EXIM Bank are 48

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 2. Islamic Banking is better than Conventional Banking
The concept of Islamic Banking is a very recent innovation in the Banking world. Recent data
shows that Islamic Banking is becoming very popular in Bangladesh day by day. The
remarkable shifting or conversion of the conventional banks and their branches into the
Islamic lines, signals high acceptance of the islamic banking by the public in general. In this
regard, among other causes, the followings are mentioned:

In Bangladesh, 80 percent of our population is Muslim. Our economy is mostly supported by

conventional banking. Interest is the basis of conventional banking. But it is unconditionally
prohibited in Islam. Therefore, Muslims desire to bank with a shariah based bank by which
they can comply with religious bindings as well as earn rationalized benefit from the same.

Moreover, Islamic banking is not just for Muslims. It aims to lay the foundations of an ethical
and fair financial system. Islamic Banks provide services to everyone irrespective of religious
beliefs, wealth, ethnicity, caste or creed.

It is seen that the Islamic banks are performing better than the conventional banks. Islamic
banks rely on the idea of profit and loss as well as risk-sharing. As regards, people feel risk
free to bank with the Islamic Banks.

As the Islamic Banks meet both banking & ethical expectation, the people of the country have
reposed a great deal of trust & confidence on them.

 Islamic Banking is becoming very popular in Bangladesh day by day based on recent data.
 Conventional banking is based on Interest but it is unconditionally prohibited in Islam.
 Muslims desire to bank with shariah based bank due to Muslim population in our country.
 Muslim can comply with religious bindings as well as earn rationalized benefit from Islamic
Banking.
 Islamic Banking aims to lay the foundations of an ethical and fair financial system.
 Islamic banks rely on the idea of profit and loss as well as risk-sharing.
 People feel risk free to bank with the Islamic Banks.
 Islamic Banks provide services to everyone irrespective of religious beliefs, wealth, society,
class or faith.
 Islamic Banks meet both banking & ethical expectation, the people relax a great deal of
trust & confidence on Islamic Banking.

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 3. Central Bank
To manage the monetary and investment/credit system of Bangladesh to stabilizing domestic
monetary value and maintaining a competitive external par value of the Bangladesh Taka
towards fostering growth and development of country’s productive resources in the best
national interest, the Government of Bangladesh made a law named as ‘The Bangladesh Bank
Order, 1972’ (President’s Order no. 127 of 1972 dated 31.10.1972). As per Clause 3(1) of
Bangladesh Bank Order, 1972. The name of the Central Bank of Bangladesh is called
‘Bangladesh Bank’ which shall be deemed to have taken effect on the 16th day of December,
1971. Functions of Central Bank are:
 Note issue
 Enlistment of Banks
 Bankers’ Bank
 Governments’ Bank
 Clearing House maintenance
 Supervision of the country’s foreign currency
 Lender of last resort to Govt. & Banks
 Advisor to the Govt. on financial matter
 Supervisor of Banks & Financial Institutions
 Research & Statistics
 Formulation & Implementation of monetary policy
 CAMELS rating of Commercial banks.
 Supervision and training for implementation of AML and Anti Terrorism Acts
 Maintain the intrinsic value of Taka currency
 Work as safe-guard or parent of all banks
 Play a vital rule to develop/emphasis a specific sector as per policy of the government
 Control inflation and Interest/profit rate of all banks
 Help govtment to implement policy or strategy for economic development of the country
 Submission of returns
 Audit & Inspection
 Appointment of MD/CEO
 Investment/Credit Control
 Discount rate policy
 Open market operations
 Monitoring of non-performing investment/loans
 Risk Management
 Foreign Exchange Regulation Act

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 4. CSR
CSR stands for corporate social responsibility. EXIM Bank established “EXIM Bank Foundation”
in 2006 to carry out CSR activities.
At least 2% of annual profit of every year is put aside (একপাশে সরিযে রাখা) for the foundation to
conduct Corporate Social Responsibilities (CSR) activities. The mainstream CSR activities that
are carried out through EXIM Bank foundation are:
Healthcare service
A building having 10,000 sft floor space at Kazi Para, Mirpur, Dhaka has been hired to set up
EXIM Bank Hospital. The hospital free checkup and medical assistance for the poor patient.
Scholarship program for brilliant poor student
EXIM Bank Scholarship Programmed, launched in 2006 with 61 poor and meritorious students
selected from different educational institutions of Dhaka. Which have so far assisted about 3000
(app) students successfully completed the education.
Education Promotion Scheme
Under Education Promotion Scheme, quard or investment without profit is provided for poor
and meritorious students to help them bear monthly educational expenditure including
academic expenses, food, accommodation, etc. By 31 December 2008, Tk. 19.7 million was
sanctioned to take care of around 138 poor and meritorious students from a number of reputed
educational institutions like Dhaka University, Chittagong University, Dhaka Medical College,
BUET, Bangladesh Agricultural University, Shahjalal University of Science and Technology etc.
Helping people affected by natural calamities
Another vital area we are dealing with as part of our CSR activities is helping people survive
natural calamities.
Donation to educational institutions to setup computer lab
EXIM Bank donated to Dhaka University and Chittagong University to set up two computer labs
that help the students of those universities acquire ICT knowledge.
Beautification of Dhaka City
EXIM Bank has been sharing a good portion of the mammoth task of beautifying the capital
since 2005.
Key Notes:
 Helping people affected by severe disasters
 Helping people in slum areas
 Renovating burn unit, ICU for DMCH
 EXIM Bank Agricultural University (established in 2012, Chapainawabganj)
 Female Employee’s Interest Protection Policy
 Supporting Formalin Free campaign

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 5. RTGS
RTGS stands for Real Time Gross Settlement to facilitate a fast and secure Interbank Payment
system, Bangladesh Bank introduced the Real Time Gross Settlement (RTGS) system on 29th
October 2015. This system caters for large value transactions between the banks within the
country in real time basis. 7000 online branches of 55 out of 11,000 branch of 57 bank
scheduled banks are currently connected to this service. Using this system, the settlements of
tk.1,00,000 (One Lac) or above between the participating banks are being made instantly.
Although, at present transactions with only local currency is allowed, this system can
accommodate transactions in more than one foreign currencies within Bangladesh and is
expected to launch this utility shortly.

It was implemented with the financial assistance from Asian Development Bank and technical
support from the World Bank. The central RTGS system was developed by the Swedish
company CMA Small Systems AB.

Objective
 Payment System Infrastructure Development
 Establishment of The Real Time Gross Settlement (RTGS) systems for the country
o To settle the inter-bank Local & Forex payments instantly
o Safe, secure and real-time call money market transactions
o Safe, secure and online secondary bond market Transactions.

Facilities/benefits
 Instant settlement of large value interbank transactions
 Safe, secure and instant online payment settlement of the call money market transactions
 Safe, secure and instant online payment settlement for Government Securities and
Secondary Bond market transactions
 Instant payment settlement of the interbank domestic foreign currency transactions
Inward remittances flow will be enhanced

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 6. NPSB
NPSB stands for National Payment Switch Bangladesh. NPSB is an electronic platform, started
its operation on 27 December 2012 with a view to attain interoperability among schedule banks
for card based/online retail transactions. The Bangladesh Bank has introduced National
Payment Switch Bangladesh (NPSB) in order to facilitate interbank electronic payments
originating from different channels like Automated Teller Machines (ATM), Point of Sales (POS),
Internet Banking, Mobile Banking etc.
The main objective of NPSB is to create a common electronic platform for the switches in
Bangladesh. NPSB is a mother switch of all other switches in the country. NPSB will facilitate the
expansion of the card based payment networks substantially and promote e-commerce
throughout the country.
There are 53 Banks operating card business in the country. Among 53 banks 51 banks are
interoperable for ATM transactions through NPSB. That is, a cardholder of any bank from these
51 NPSB member banks can use ATM of all other banks throughout the country. Cardholders
are getting banking services like cash withdrawal, mini statement and balance inquiry for 24/7
from almost all ATMs in the country. As a result, Long queues at cash counter of banks are
decreasing. Moreover, banks yet to install ATM and POS can issue cards to their clients. A
cardholder has to pay 15 taka per transaction (including VAT) for Cash Withdrawal and 5 taka
(including VAT) for each Mini Statement or Balance Inquiry using other Bank's ATM.
48 banks are presently interoperable for POS transactions through NPSB. Cardholders from
those banks can use POS of all NPSB member banks in different merchant outlets for their retail
purchases. The necessity for holding cash is reducing very fast due to large acceptance of cards
at POS of NPSB member banks. Cardholders need not to pay any extra charges for their retail
purchases using other bank's POS under NPSB.

NPSB is also processing Internet Banking Fund Transfer (IBFT) transactions of 6 banks. An
account/card holder of an IBFT member banks can transfer funds (account to account/card and
card to card/account) to other Banks through internet banking. The daily transaction for a
customer will be five times and a total of Tk 2,00,000(two lac). Each transaction will be
maximum Tk. 50,000 (fifty thousand). Banks will ensure two factor authentications for internet
banking to maintain security. Banks can provide services like utility bill payment, credit card bill
payment, installments payment of loan, insurance premium payment etc. to their customers
through internet banking from home or office.
Key Notes:
1. Electronic platform
2. Started its operation on 27 December 2012
3. Card based/online retail transactions
4. To facilitate interbank electronic payments
5. Different channels like Automated Teller Machines (ATM), Point of Sales (POS), Internet
Banking, Mobile Banking.
6. 53 Banks operating card business in the country
7. Among 53 banks 51 banks are interoperable for ATM transactions through NPSB
8. Getting banking services like cash withdrawal, mini statement and balance inquiry for 24/7
9. 48 banks are presently interoperable for POS transactions through NPSB
10. NPSB is also processing Internet Banking Fund Transfer (IBFT) transactions of 6 banks
11. To create a common electronic platform for the switches in Bangladesh
12. To promote e-commerce throughout the country

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 7. ADB
The Asian Development Bank (ADB) is a multilateral development finance institution and a
regional development bank whose mission is to reduce poverty in the Asia Pacific region.
Asian Development Bank established in 1966 which is headquartered in the Ortigas Center
located in the city of Mandaluyong, Metro Manila, Philippines. From 31 members at its
establishment. ADB now has 68 members, of which 49 are from Asia-Pacific and 19 from
outside.
The two largest shareholders of the Asian Development Bank are the United States and Japan.
Although the majority of the Bank's members are from the Asia-Pacific region, the industrialized
nations are also well-represented. ADB has been derives by an inspiration and dedication to
improving lives in Asia and the Pacific.
ADB plays the following functions for countries in the Asia Pacific region:
 Provides loans and equity investments to its Developing Member Countries (DMCs)
 Provides technical assistance for the planning and execution of development projects and
programs and for advisory services
 Promotes and facilitates investment of public and private capital for development
 Assists in coordinating development policies and plans of its DMCs
Key Note:
1. Multilateral development finance institution
2. Regional development bank
3. To reduce poverty in the Asia Pacific region
4. Established in 1966
5. Headquartered in located in the city of Mandaluyong, Metro Manila, Philippines
6. From 31 members at its establishment
7. Now has 68 members, of which 49 are from Asia-Pacific and 19 from outside.
8. Largest shareholders of the Asian Development Bank are the United States and Japan

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 8. BRICS Development Bank
The New Development Bank BRICS (NDB BRICS) formerly referred to as the BRICS
Development Bank, is multilateral development bank operated by the BRICS states (Brazil,
Russia, India, China and South Africa) as an alternative to the existing US-dominated World
Bank and International Monetary Fund.

The Bank is set up to foster greater financial and development cooperation among the five
emerging markets. Together, the four original BRIC countries comprise in 2014 more than 3
billion people or 41.4 percent of the world’s population, cover more than a quarter of the
world’s land area over three continents, and account for more than 25 percent of global GDP.

It will be headquartered in Shanghai, China. Unlike the World Bank, which assigns votes based
on capital share, in the New Development Bank each participant country will be assigned one
vote, and none of the countries will have veto power.

The bank aims to contribute to the development plans established nationally through projects
that are socially, environmentally and economically sustainable. Taking this into account, the
main objectives of the NDB can be summarized as follows:

1. Promote infrastructure and sustainable development projects with a significant

development impact in member countries.
2. Establish an extensive network of global partnerships with other multilateral
development institutions and national development banks.
3. Build a balanced project portfolio giving a proper respect to their geographic location,
financing requirements and other factors.

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 9. IDB

The Islamic Development Bank (IDB) is a multilateral development financing institution located
in Jeddah, Saudi Arabia. It was founded in 1973 by the Finance Ministers at the first
Organization of the Islamic Conference (now called the Organization of Islamic Cooperation).
The bank officially began its activities on 20 October 1975, inspired by King Faisal. There are 57
shareholding member states. Dr Ahmad Mohamed Ali Al Madani is the president of the IDB. The
present membership of the Bank consists of 57 countries.

The basic condition for membership is that the prospective member country should be a
member of the Organisation of Islamic Cooperation (OIC), pay its contribution to the capital of
the Bank and be willing to accept such terms and conditions as may be decided upon by the
IDB Board of Governors. As per the decision of the 38th Annual Meeting of the Board of
Governors, the authorized capital of the IDB was raised to ID 100 billion and its subscribed
capital to ID 50 billion. The Bank continues to receive the highest credit ratings of AAA by major
rating agencies.
Vision of IDB “To be the leader in fostering socio-economic development in member countries
and Muslim communities in non-member countries in conformity with Shariah.” Mission “The
IDB Group is committed to collaboration with our development partners.”
Key Note:
1. Multilateral development financing institution
2. Located in Jeddah, Saudi Arabia
3. Founded in 1973 by the Finance Ministers at the first Organization of the Islamic
Conference(OIC)
4. The present membership of the Bank consists of 57 countries
5. Alleviating poverty
6. Promoting human development
7. Promoting Science and technology
8. Promoting Islamic economics
9. Promoting banking and finance
10. Enhancing cooperation amongst member countries

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 10. Green Banking
Green Banking means:
 To introduce innovative green products
 To save the environment from different hazards and pollution
 Green Banking means maximum utilization of natural resources (God gifted resources) and
minimum dependency on artificial resources which to be produced by polluting environment.
 Green theme for EXIM Bank as “Be Green, Remain Green & patronize Green”

Green Banking is an ethical bank, also known as a social, alternative, civic, or sustainable bank,
is a bank concerned with the social and environmental impacts of its investments and loans.
Ethical banks are part of a larger societal movement toward more social and environmental
responsibility in the financial sector. This movement includes:

 Ethical investment
 Socially responsible investment
 Corporate social responsibility
 Fair trade movement
 Ethical consumerism etc.
Purpose
The specific purposes of green banking are as follows:
 Examine the environmental issues and concerns associated with potential business activities
proposed for financing.
 Identify, evaluate and manage the environmental risk and the associated financial
implications arising from these issues and concerns.
 Enhance the investment risk appraisal process.
 Financing to the companies involved with effective waste management system.
 Minimizing paper works keeping business output unchanged.

Phases of Green Banking

As per Bangladesh Bank BRPD circular, Green Banking activities to be completed by following
three phases:
 Phase-I: to be implemented within December 31, 2011
 Phase-II: to be implemented within December 31, 2012
 Phase-III: to be implemented within December 31, 2013

Green Banking and Banking under Islamic Shariah is not contrary to each other’s rather are
complimentary and supplementary.

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 11. Shariah Board
As per Guideline for conducting Islamic Banking issued by Bangladesh Bank in November 2009
“It will be responsibility of the Board of Directors of the respective banks to ensure that the
activities of the banks and their products are Shariah compliant. That’s why every Islamic bank
contains a standard Shariah Council which is called Shariah Board that is entrusted with
advising, giving directives as to whether all functions of the bank including investment
procedures are being carried out in accordance with Shariah.
The Board may form an independent Shariah supervisory committee with experienced and
knowledgeable persons in Islamic jurisprudence. So, we can say A Sharia Board certifies the
Islamic financial products as being Sharia-compliant. It thereby reviews the related contracts
and provides an opinion about whether those agreements would be permissible under Islamic
law. However, the Board shall be responsible for any lapses/irregularities on the part of the
Shariah Supervisory Committee.

Qualifications:
 Educational qualification
o Kamil/Dawa/Post graduate degree in Islamic related subject & knowledge in Arabic.
 Experience and Exposure
o 3 years teaching experience in Islamic related subject
o 3 years experience as a member of Fatwa board
 Track Record
o Track record in social, economic & financial dealings
 Solvency and financial integrity
o No involvement in any illegal banking activity
o No default payment
 Integrity, honesty and reputation
o No conviction in any criminal financial offence
o No settlement in financial investment
Functions:
 To advise the Bank authority to train up the manpower of the Bank about Islamic Banking.
 To monitor/supervise the functions of the Bank.
 To audit / inspection of branches and submit the report to Board.
 To collect information from other bank & assist accordingly.
 To launch any new product, permission of Shariah council is mandatory.
 To arrange seminar/workshop on Isla mic Banking.
Objects:
 Provide fatwas that certify permissible financial products.
 Undertake Shariah audit to ensure products comply with guidelines.
 Calculate zakat payments.
 Dispose of non-Shariah compliant income or earnings.
 Provide advice to the bank on the distribution of income to shareholders or
depositors/investment account holders.
 Provide guidance to the bank on its wider social role.

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 12. BACH
BACH : The Word ‘BACH’ means Bangladesh Automated Clearing House, the first ever
electronic clearing house of Bangladesh. BACH is a latest version for country’s payment system.
BACH will work it’s two components :
1. Bangladesh Automated Cheque Processing System (BACPS)
2. Bangladesh Electronic Fund Transfer Network (BEFTN)
BACPS Dhaka Clearing House starts its live operation since October 7, 2010. BEFTN has been
started its countrywide “live Operation” on 28th February, 2011.
BACPS process and clear the paper based instruments among all member bank such as:
1. Personal Cheque
2. Government Cheque
3. Business Cheque
4. Non standard payment instrument (NSPI) which include Pay Order, Refund Warrant,
Demand Draft, Dividend Warrant etc.
Standardization of Cheque :
1. Paper (CBS1 Paper)
2. Size (7.5” * 3.5”)
3. Fixed position of areas
4. Image friendly
BEFTN working with countrywide inter-bank fund transfer.
Object of BEFTN is to :
 reduce paper based payment method,
 Maximize speed of payment,
 minimize cost involvement and fraud forgery.
 Which encourage electronic payment method.

A Virtual Private Network (VPN) has been created between the participating commercial banks
and Data Center (DC) & Disaster Recovery Site (DRS) for communicating necessary information
related to BACH. Digital Certificate has been formulated for the first time in Bangladesh for
secured data communication.
Objectives of BACH:
1. Modernize country’s payment system.
2. Reduce / Minimize cost and labor involvement.
3. Maximize speed of payment.
4. Minimize fraud and forgery.

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 13. BEFTN
BEFTN stands for Bangladesh Electronic Fund Transfer Network which facilitate the electronic
exchange of debit and credit transactions among all participating banks.
Participating banks in the EFT Network and the EFT Operator (BEFTN) will be inter- connected
via communication links.
BEFTN is one of the component of BACH. BEFTN has been started its countrywide live
Operation on 28th February, 2011. This Network will operate in a real-time batch processing
mode.

BEFTN facilitates the transmission of payments between the banks electronically, which makes
it faster and efficient means of inter-bank clearing over the existing paper-based system i.e.
BACPS.
 It is able to handle a wide variety of credit transfers such as payroll,
 foreign and domestic remittances,
 social security,
 company dividends,
 retirement,
 expense reimbursement,
 bill payments,
 corporate payments,
 government tax payments,
 social security payments and person to person payments.

The system could handle debit transfers such as mortgage payments, loan payments, insurance
premiums, utility bill payments, government tax payments, government licenses and fees.

Participants of BEFTN:
1. Originator
2. Originating Bank
3. EFT Operator
4. Receiving Bank
5. Receiver
6. Correspondent Bank
Benefit of BEFTN:
1. Lower Costs
2. Higher Volume
3. New Product Opportunities
4. More Payments going through bank.
5. To Increase the efficiency
6. To reduce risk

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 14. BACPS
BACPS stands for Bangladesh Automated Cheque Processing System which has started its Live
Operation on 7th October 2010 in the Dhaka Clearing House area. BACPS is one of the
component of BACH. BACPS operate inward and outward clearing activities.

BACPS uses the Cheque Imaging and Truncation (CIT) technology for electronic presentment
and payment of paper instruments (i.e. cheque, pay order, dividend & refund warrants, etc).
The system supports both intra-regional and interregional clearing and is based on a centralised
processing centre located in Dhaka and in designated clearing regions.

BACPS process and clear the paper based instruments among all member bank such as:
5. Personal Cheque
6. Government Cheque
7. Business Cheque
8. Non standard payment instrument (NSPI) which include Pay Order, Refund Warrant,
Demand Draft, Dividend Warrant etc.
Standardization of Cheque :
5. Paper (CBS1 Paper)
6. Size (7.5” * 3.5”)
7. Fixed position of areas
8. Image friendly
BACPS uses the Cheque Imaging and Truncation (CIT) technology for electronic presentment
and payment of paper instruments.
BACPS are the adoption of new cheque standard with a MICR code line where mentioned
Cheque Serial No,
Routing No,
Account No and
Transaction Code.

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 15. ACU
ACU stands for Asian Clearing Union which is the simplest form of payments arrangement
whereby the members settle payments for inter-regional transactions among the participating
central banks on a multilateral basis. The Asian Clearing Union (ACU), with headquarters in
Tehran, Iran, was established on December 9, 1974.
Member of ACU
India, Bangladesh, Iran, Mayanmar (Burma), Srilanka, Nepal, Pakistan, Bhutan, Maldives.
Functions of ACU:
 To settle the import & export payment
 To expand the use of currency among the member
 To establish financial cooperation
 Providing short term credit facilities for a period of two calendar months
 Only member countries currency used
 Name of the ACU currency
 The name of the ACU currency is Asian Monetary Unit (AMU). The value of one AMU is
equivalent to one US dollar.

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 16. Off-shore Banking
Off shore banking means international banking business involving foreign currency denominated
assets and liabilities and is kept separate from domestic banking business.

An off shore bank is a bank located outside the country of residence of the depositor, typically
in a low tax authority that provides financial & legal advantages. Any banking unit means Off
shore banking unit (OBU).
Features of OBU
 An independent unit of the bank
 Transaction in foreign currency
 Local capital requirement in low
 Profit rate is LIBOR plus 2 to 4%
Types of off-shore banking :
 Paper center
 Functional center
Functions of off-shore banking :
 Deposit taking
 Investment
 Wire & electronic fund transfer
 Fund management
 L/C & trade finance
 Foreign exchange
 Corporate administration
 Trustee services

Advantage
 Greater privacy
 Low / no taxation
 Easy access to deposits
 Protection against local political / financial instability
Disadvantage
 Physical access costly & difficult
 Money laundering, terrorism is available

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 17. T24(CBS)
Core banking solutions are banking applications on a platform enabling a phased, strategic
approach that is intended to allow banks to improve operations, reduce costs, and be prepared
for growth. An overall service-oriented-architecture helps banks reduce the risk that can result
from manual data entry and out-of-date information, increases management information and
review, and avoids the potential disruption to business caused by replacing entire systems.

Core banking solutions is new terminology frequently used in banking circles. The platform
where communication technology and information technology are merged to suit core needs of
banking is known as core banking solutions. Here, computer software is developed to perform
core operations of banking like recording of transactions, profit calculations on loans and
deposits, customer records, balance of payments and withdrawal. This software is installed at
different branches of bank and then interconnected by means of communication lines like
satellite, internet etc. It allows the user (customers) to operate accounts from any branch if it
has installed core banking solutions. This new platform has changed the way banks are
working.
EXIM Bank is using the T24 Islamic Banking Solution of Temenos which is already a recognized
world leader in banking software technology with over 700 installations in over 125 countries,
and more than 40 installations for Islamic Banking.
T24 for Islamic Banking is both Shariah compliant and commercially flexible. Enabling to offer a
true range of the latest competitive Islamic financial products based on the award-winning
success of T24 banking software platform, T24 for Islamic Banking is a single core banking
software system that handles Islamic financial services in tandem with non-Islamic ones.
Temenos T24 is built on open software architecture that uses established technology standards
to support all major banking types. Offering total scalability, T24 supports users and customers
with true non-stop resilience - plus eliminates the need for Close Of Business processing to
deliver a true 24/7 banking capability.
As a result of T24's leading technology credentials, T24 has the flexibility to support the needs
of any bank – from the smallest greenfield operation to the largest multinational. It is this
strength that has given T24 the means to establish an unrivalled track record which is

 Enhancing productivity,
 Increasing efficiency
 Mitigating risk,
 Expanding channels-to-market,
 Lowering costs,
 Improving customer service,
 Optimizing up-sell and cross-sell opportunities,
 Driving growth,
 And boosting profitability.

T24 provides a high performance foundation to manage users, customers, processes, risks,
delivery channels and applications - as well as deploy a full range of banking services across
specialized lines of business. Carrying high volumes based on multiple, secure and scalable
servers, T24 does not limit the number of transactions, users or customers. Having more than
55 offices worldwide, Temenos is providing over 1,500 customer deployments in more than 125
countries across the world. This ensures T24 is able to support any size of financial institution
and all levels of traffic.

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 18. CAMELS rating
CAMELS rating system is a globally accepeted rating system to review overall soundness
of banks and identifies different risk factors that may contribute to turn the bank into a
problem/failed bank. Bangladesh uses this rating to identifiy the problem banks. The CAMELS
rating of each bank is informed by Bangladesh bank to respective Bank.
Infact CAMELS Stand for :
1. Capital Adequacy
2. Asset Quality
3. Management
4. Earnings
5. Liquidity
6. Sensitivity to market risk
The CAMELS rating components uselly taken into consideration by the monetary authorities
have the following weights:
1. Capital Adequacy - 20%
2. Asset Quality - 20%
3. Management - 25%
4. Earnings – 15%
5. Liquidity – 10%
6. Sensitivity to market risk – 10%
The six key performance dimensions as above are to be evaluated on a scale of 1 to 5 in
ascending order:

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 19. Customer service
Customer service is the service provided for the customers by the Bankers to satisfy them and
maximize their positive attitude towards the bank or the products.
Every customer comes to bank with two agenda:
 Customer functional agenda - is satisfied when his problem is identified and deal with
 Customer ego agenda - is satisfied when he feels that he has received adequate
attention
The following parties to be satisfied by the banker
 Customer
 Regulator
 Share holder
 Employee
The ways & means for better customer service
 Access
 Sound Communication
 Good environment
 Courtesy, Smartness
 Motivation
 Quick service
 Trustworthy
 Latest Information technology
 Reliability
 Customers get together
 Recognition
Overcome Customer’s dissatisfaction/Complaint Management
 Listen carefully to what the customer to say and let them finish
 Ask questions in a kind and concerned manner
 Put yourself in their shoes
 Apologize without blaming
 Ask the customer “What would be an acceptable solution to you”
Solve the problem – quickly

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 20. Deposit Mix
Deposit Mix is a Banking terms that refers to the combination of various types of deposits (1.
Current Deposits 2. Savings Deposits and 3. Term Deposits ) and their share in total deposits.
Current deposits are no cost and Savings deposits are low cost funds. Hence, banks prefer to
increase their share in total deposits. Current Account and Savings Account put together are
called “CASA” (Current Account, Savings Account) which is of enormous importance where as of
now CA is no cost and SA is low cost (4%). Normally anything above 40% of CASA is
considered good for any Bank's deposit portfolio. The remaining 60% deposits will be all kinds
of term deposits which as of now carry an interest rate of 6–7.5%.
Thus deposit mix play a very important role in deciding the profitability of Banks.

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 21. Agent Banking
Agent Banking means providing limited scale banking and financial services to the
underserved population through engaged agents under a valid agency agreement, rather than
a teller/ cashier. It is the owner of an outlet who conducts banking transactions on behalf of a
bank. Globally these retailers are being increasingly utilized as important distribution
channels for financial inclusion. Bangladesh Bank has also decided to promote this
complimentary channel to reach to the poor segment of the society as well as existing bank
customer with a range of financial services specially to geographically dispersed
locations.
Agent Banking Services:
 Account Opening (Savings, Current, DPS, Term Deposit)
 Cash Deposit/Cash In
 Cash Withdrawal/Cash Out
 Fund Transfer to any Bank Account
 SME Loan File Initiation
 Agricultural Loan File Initiation
 Retail Loan File Initiation
 Debit/Credit Card Request Processing
Agent Banking are not allowed to provide the following services on behalf of the banks:
 Giving final approval of opening of bank accounts and issuance of bank cards/
cheques.
 Dealing with loan/ financial appraisal.
 Encashment of cheques.
 Dealing in Foreign currency.
The Banks may engage the following persons/ entities as their Agent:
 NGO‐MFI’s regulated by Micro credit Regulatory Authority of Bangladesh.
 Other registered NGOs.
 Cooperative Societies formed and controlled/ supervised under Cooperative Society
Act,2001.
 Post Offices.
 Courier and Mailing Service Companies registered under Ministry of Posts
&Telecommunications .
 Companies registered under ‘The Companies Act, 1994’.
 Agents of Mobile Network Operators.
 Offices of rural and urban local Government institutions.
 Union Information and Service Centre (UISC).
 Educated Individuals capable to handle IT based financial services, agents of insurance
companies, owners of pharmacies, chain shops and petrol pumps/ gas stations.

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 22. Online marketing
Online marketing is a set of tools and methodologies used for promoting products and services
through the internet. Online marketing includes a wider range of marketing elements than
traditional business marketing due to the extra channels and marketing mechanisms available
on the internet. Online marketing is also known as internet marketing, web marketing, e-
marketing, digital marketing and search engine marketing (SEM).
Online Marketing Communication Options are:
 Website
 Search engine optimization
 Online promotions
 Reciprocal linking
 Email marketing
 Social media
 Blogging
 Digital advertising
 Article marketing
 Affiliate programs
 Video/Podcasting
Online marketing can deliver benefits such as:
 Growth in potential
 Reduced expenses
 Elegant communications
 Better control
 Improved customer service
 Competitive advantage
Disadvantages of Online Marketing:
 Fake clicks on the ads done by software-powered websites.
 Hacking of the website is possible, which results in the loss of control over the
messages.
 Lack of tangibility
Nevertheless, the advantages of online marketing supersede its disadvantages. As nowadays
people spend most of their time surfing on the internet, it instigates marketers all around the
world, to advertise their offerings online for broader reach and better results.

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 23. Sub-Branch (Banking Booth)
Bangladesh Bank, as per BRPD circular letter no. 28 dated 27 December 2018. allowing banks
to operate ‘banking booth’ with a view to bringing unbanked and underserved population under
the banking network as social safety net programme of the Government.

But, the word ‘booth’ confused many customers as they related its functions with the function
of ‘ATM booth’. So, the central bank had renamed the ‘banking booth’ as ‘sub-branch’ of the
banks as per BRPD circular letter no. 28 dated 03 December 2019 to eliminate such confusion.

As per the BB’s instructions sub-branch will be running under the following conditions:

• Sub-branch will be regulated under the central bank’s rules and regulations for
providing limited scale services.
• Treated as business development centers of the banks.
• Operated within limited expenditure under the supervision of a nearby full- fledged
branch of a bank.
• At least two officers will be deployed at such sub-branches
• Floor space of sub-branch will be not more than 1,000 square feet.
• List of available services to be displayed to the customer.
• Money laundering risk must be protected as per existing rules.

Transactions at the sub-branches will be carried out on a real time basis and customers will get
instant SMS and printed slip against their transactions.

The sub-branches, however, will not be allowed to carry out any sort of foreign transaction.

Opening hour of the sub-branch will be same as the bank Sub-branch must have Business
Continuity Plan to protect unwanted situation.

To set up such sub-branch, the banks must submit application to the central bank along with
decision of its board of directors.

The central bank, however, preserves the rights to close any such sub-branch without giving
prior notice.

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 24. Sukuk
A sukuk is the Arabic name of Islamic financial certificate, similar to the conventional fixed-
income instruments like bonds. Sukuk become extremely popular since 2000, when the first
sukuk was issued by Malaysia and Bahrain in 2001.
The most important characteristic of Sukuk are asset-based securities, not debt
instruments. Sukuk represent ownership in a tangible asset giving the legal right of
using this asset and enjoying the profits.

The other important characteristic is that the sukuk must be shari’ah compliant. This means
that the assets cannot be involved in activities that are not permissible under jslamic law such
as gambling or the sale of alcohol.

When you sell sukuk, you are selling ownership in the assets backing them.

The different type of Sukuk are bellow :

• Sukuk al mudaraba (sukuk based on equity partnership)

• Sukuk al murabaha (cost plus or deferred payment sukuk)
• Sukuk al-salam (deferred delivery purchase sukuk)
• Sukuk al-ijara (lease-based sukuk)
• Sukuk al musharaka (joint venture sukuk) *
• Sukuk al istisna (Islamic project bond)

Sukuk offers a wide-range of benefits to the economy in terms of liquidity

management, fund-raising, balance sheet management and security utilization. Sukuk
actively traded in the secondary market helps manage liquidity for Islamic financial
institutions.

For instance, a bank with excess liquidity may option to invest in Sukuk.

The Sharia compliant financial structures and products are growing rapidly and
becoming an integral part of the mainstream in Bangladesh economy and changing
the financial landscape.

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 25. Al-Wadiah Principle
Al-Wadiah principle designed by the principle of Islami Shariah wherein the bank is deemed as a
keeper and trustee of funds as Al-Amana (on Trust).
The depositors fund which is deposited with Banks by the depositors with clear permission to
utilize/invest the same is called Al-Wadeeah. Islamic banks receive deposits in Current Accounts
on the basis of this Al-Wadeeah principle. Islamic banks obtain permission from the Al-Wadeeah
depositors to utilize the funds at its own responsibility and the depositors would not share any
profit or loss earned/incurred out of using of these funds by the bank. The banks have to pay
back the deposits received on the principle of Al-Wadeeah on demand of the holders. The
depositors have to pay government taxes and other charges, if any.

 Al-Wadiah means amanat (like Bailment)

 In Al-Wadiah Principle the Bank (Bailee) receives the deposit like amanat and the
depositor (Bailor) authorizes the Bank to use the deposit in Shariah compliant modes at
the risk of Bank
 The Bank is liable to return the deposit to the depositor on demand.
 Usually profit is not allowed against the Al Wadiah deposit

26. Mudaraba Principle

Mudaraba is a partnership of labour and capital, where one partner provides full capital and the
other one manages the business. The capital provider is called Sahib-Al-Maal and the user of
the capital is called Mudarib. As per Shahriah principles, the Mudarib will conduct the business
independently following Shariah principles. The Sahib-Al-Maal may provide advices, if he deems
fit but he can not impose any decision over the Mudarib. Profit, if any, is divisible between the
Sahib-Al-Maal and the Mudarib at a predetermined ratio, while loss, if any, is borne by the
Sahib-Al-Maal. Mudarib can not avail of any salary or remuneration against his labour as a
manager or conductor of the enterprise/business. The deposits, received by Islamic banks
under this principle are called Mudaraba Deposits. Here, the depositors are called Sahib-Al-Maal
and the bank is called Mudarib. The Mudaraba deposits include: i) Mudaraba Savings Deposits
(MSD),
ii) Mudaraba Short Notice Deposits (MSND), Mudaraba Term Deposits (MTD).
Different Islamic banks have developed various deposit schemes on the basis of this Mudaraba.
Features of Mudaraba:
 Must be two parties - Shahib al-maal (Investor) & Mudarib (Who provides skill and labor).
 Shahib al-maal is full responsible for capital
 Mudarib runs the business by providing skill and labor
 Profit is divided as per pre-determined ratio
 Shahib al-maal bears the actual loss
 Shahib al-maal has no right to interfere in business

Mudaraba Al Mutlaqah -The nature of business, time, place & number of business partners
etc are not specific – is called Mudaraba Al Mutlaqah. As per contract, the Mudarib get full right
about the business.

Mudaraba Al Muqayyadah-The nature of business, time, place etc are specific is called
Mudaraba Al Muqqayada. As per contract, the Mudarib has not full right to run the business.

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 Mudaraba Al Mutlaqah Mudaraba Al Maqayyadah
It is unrestricted mudaraba investment It is restricted mudaraba investment
Mudarib get full right about the business Mudarib has not full right to run the business
The nature of business, time, place & number The nature of business, time, place etc are
of business partners etc are not specific specific

27. Musharaka
Musharaka is a partnership between two or more parties in which all the partners contribute
capital, participate in the business and share the profit as per pre-agreed ratio and bear the
loss, if any, as per equity ratio.
Features of Musharaka:

 Mixing of capital (joint ownership)

 Client maintains the business and bank may verify or audit it
 Profit is divided as per pre-agreed ratio
 Actual loss is divided as per equity ratio
 All the partners have rights & responsibilities in the business
Uses/application of Musharaka:
 Project financing
 Import finance
 Short/Medium/long term finance
 SME financing
 Running finance (limited scope)
1. Shirkat-al-Inan 2. Shirkat-al-Mufawada
A partnership of two or more to contribute the An equal partnership between two or more, where
capital and to share the profit between them. each contributes the same capital and to share the
same profit and work between them.
 Capital may be more or less  Profit or loss compulsorily equal to all.
 Profit or loss may be more or less  Social status, experience, education should be
equal.
 Asset & liability should be equal.
3. Shirkat-al-Shanai 4. Shirkat-al-Wazuh
A partnership of two or more to contribute their A partnership of two or more without contributing
capital or skill. the capital.
 All partners should be in same trade/profession  It is a business of honesty & dignity of the
 Social status, experience, education should be partners.
equal  The partners purchase goods on credit and sale
 Profit or loss may be more or less as per in cash
contract  Profit or loss may be more or less as per
contract.

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 28. Bai-Muazzal
Bai-Muazzal is combination of Arabic word Bai&Ajl, where Bai means purchase & sale and
“Ajl” means “fixed time” or “fixed period”.
Bai Muajjal is an investment contract between a bank and a client under which the bank
sells on credit certain goods permissible under Islamic Shariah to the client at an agreed
fixed price payable at a certain fixed future date in lump sum or by fixed installment.

Features of Bai-Muajjal:
 Must be three parties – Bank, Client & seller of goods (vendor)
 Bank sells at a higher price but payment is deferred
 Client bears the risk of goods
 Ownership of goods under client’s control.
 Hypothecation of goods by the bank
 No need to disclose cost of price & profit mark-up
 This is a mode of investment is usually used for working capital finance
requirement of the client.
 The Bank will purchase goods according to the client choice for onward sale to
the client.
 Payment of the sale price is deferred for a fixed period.
 Bank will transfer the ownership and possession of the goods to client before
receipt of sale price.
 Bank will bear the risk of goods after purchase until those are actually delivered
to the client

Bai-Muajjal Products:
•Bai-Muazzal (HYPO)
•Bai-Muazzal (WO)
•Bai-Muazzal (Share)
•Bai-Muazzal (FO)
•Bai-Muazzal (PC)
•Bai-Muazzal (Export)
•BaiMuazzal (LDBP)

29.Bai-Murabaha
Bai-Murabaha is combination of Arabic word Bai&Ribhuh, where Bai means purchase & sale and
“Ribhuh” means agreed upon profit.
Bai-Murabaha is an investment contract between a bank and a client under which the bank sells
certain goods permissible under Islamic shariah to the client at a cost plus agreed profit payable
in cash or on any fixed future date in lump sum or by fixed installment.

Features of Bai-Murabaha
 Must be three parties – Bank, Client & seller of goods (vendor)
 Bank sells at a higher price but spot payment or any future date
 Bank bears the risk until delivery of goods
 Ownership of goods under bank’s control.
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 Pledge of goods by the bank
 Cost of price & profit mark-up are to be disclosed separately
Uses of Bai-Murabaha:
 Land Finance
 Inventory/Equipment Financing
 Consumer goods finance
 House finance
 Tour/Education financing

Bai-Murabaha Products
• Murabaha (Pledge)
• Murabaha Import Bill (MIB)
• Murabaha Post Import (MPI)
• Murabaha Trust Receipt (MTR)

30. Bai-Salam
Bai-Salam is combination of Arabic word Bai & Salam, where Bai means purchase & sale and
“Salam” means advance.
Bai-Salam is an investment contract between a bank and a client under which the bank sells in
advance the certain goods permissible under Islamic Shari’ah to the client at an agreed price
payable on execution and the goods is/are delivered as per specification, size, quality at a
future time in a particular place.
Features of Bai-Salam:
 The goods should be fungible goods.
 Necessary in Bai-Salam that the price is paid in full in advance.
 The contract, once affected, cannot be cancelled
 The time of delivery is part of the sale
 Can be affected on anything whether needs manufacturing or not
 Finance on agricultural sectors
 The seller must deliver the goods at agreed time.
 The price of goods paid in the time of agreement
 There is a written agreement between buyer & seller with specification, size,
quality, quantity , date of delivery, delivery place.

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