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Islami Bank Bangladesh

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Islami Bank Bangladesh PLC.
Company typePublic Limited Company
DSE: ISLAMIBANK
CSE: ISLAMIBANK
IndustryBanking
Financial services
Founded30 March 1983; 41 years ago (1983-03-30)
HeadquartersIslami Bank Tower 40, Dilkusha C/A, Motijheel,
Dhaka - 1000
,
Bangladesh
Area served
Bangladesh & overseas
Key people
Md Obayed Ullah Al Masud(Chairman)[1]
Mohammed Monirul Moula (Managing Director)
Md. Ashraful Haque, FCA (Chief Financial Officer)
J Q M Habibullah, FCS (Company Secretary)
ProductsBanking services, ATM/CRM services, Internet Banking, Payment Gateway, Mobile Banking, Consumer Banking
Corporate Banking
Investment Banking
Foreign Exchange Banking
RevenueIncrease ৳88.74 billion (US$740 million)[2] (2019)
Increase ৳43.79.74 billion (US$370 million)[3] (2019)
Decrease ৳5.48 billion (US$46 million)[4] (2019)
Total assetsIncrease ৳1142.18 billion (US$9.5 billion)[5] (2019)
Total equityIncrease ৳79.80 billion (US$670 million)[6] (2019)
Number of employees
21,000[7]
Websiteislamibankbd.com

Islami Bank Bangladesh PLC. (IBBPLC) (Bengali: ইসলামী ব্যাংক বাংলাদেশ পিএলসি.), more commonly known as Islami Bank, is an Islamic banking company based in Bangladesh. It became incorporated on 13 March 1983 as a public limited company under the Companies Act 1913 and started operation on 30 March, the same year.[8] IBBPLC maintains its own ATM Booths with a country-wide shared ATM network. IBBPLC has been the largest private banking network in Bangladesh.[9] The bank has been listed with both Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd.[8][10]

History

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Bangladesh became a member of the Organisation of Islamic Cooperation (OIC) in February 1974 and signed the charter for Islamic Development Bank in September that year. In April 1978, the 9th conference of OIC foreign ministers recommended for reorganizing the banking system of the member countries to Islamic operations systems gradually. In November 1980, A S M Fakhrul Ahsan, Director (Research) of Bangladesh Bank recommended for commencing Islamic banking operation in Bangladesh. In April 1981, the Ministry of Finance in a letter written to Bangladesh Bank recommended to start separate Islamic banking counters in all branches of the state-owned banks of Bangladesh on an experimental basis and keep separate ledgers for this purpose. In November 1982, a delegation of the Islamic Development Bank visited Dhaka to monitor and evaluate the possibility of a joint venture to establish an Islamic bank in the private sector in Bangladesh and recommended the Islamic Development Bank as an entrepreneur to invest capital in the proposed Islamic bank. As a consequence, Islami Bank Bangladesh Limited, the first shari'ah compliant bank in Bangladesh started operations on 30 March 1983.[11] It was founded by Saudi and Kuwaiti investors who provided 70 per cent of the initial capital.[7][11] It is a public limited company registered under the Indian Companies Act of 1913. IBBL is a joint venture of the government of Bangladesh, 22 businessmen of Bangladesh, Islamic Development Bank, and investment firms and banks from Muslim Middle Eastern countries.[12]

According to The Economist, "Islami Bank was a pioneer in financing Bangladesh's rise as the apparel industry's main production base outside China."[7]

In 2012, United States Senate Permanent Subcommittee on Investigations mentioned possible ties of Islami Bank Bangladesh Limited to terrorism financing through HSBC Bank which the bank denied.[13][14][15][16] The report questioned the banks link to Al Rajhi Bank.[16] Islami Bank hired Dana Contratto and Associates, a lobbying company, for 25 thousand USD per month to lobby for the bank in Washington DC.[17]

In July 2013, Islami Bank had difficulties getting repayment from Ananda Shipyard & Slipways Limited after the company lost 89.4 million USD foreign orders.[18]

Clients of JP Morgan purchased a three percent stake in the Islami Bank in November 2015.[19]

Change of Ownership

In 2017, the bank had a sudden change in its ownership and management structure. The newly appointed Bank management claimed the bank was trying to stem out its "Jamat-e-Islami roots". This sudden change, however, has led the bank to a financial crisis.[20] The change also saw foreign investors reduce their stake in the bank.[11] As of 2017, Islami Bank Bangladesh commands 90% of Islamic-banking assets and deposits in Bangladesh, is the country's biggest private lender overall, has 12 million depositors and a balance-sheet of $10 billion.[7] After the change, the bank changed their recruitment policy to recruit non-Muslims and more women under newly appointed chairman Arastoo Khan.[21] Arastoo Khan replaced Mustafa Anwar.[22]

From January 2019 to March 2019, the defaulted loans of Islami Bank doubled to 69.16 billion BDT.[23] It also rescheduled 600 defaulted loans through securing special approvals of Bangladesh Bank.[23]

In 2022, many media outlets reported that the bank was giving out loans to suspicious businesses without proper verification.[24][25] A 24 year old received a 9 billion BDT loan from Islami Bank Bangladesh Limited a month after he established the company, MediGreen.[25] MediGreen had applied for the loan 14 days after registering.[25] Another company, S.S Straight Line, received 9 billion BDT loans within three weeks of being founded.[25] Marts Business, received a 9 billion BDT loan within one month of registration.[25]

S. Alam Group which has the controlling stake of the bank took 300 billion BDT loans from Islami Bank Bangladesh Limited.[11] The group had taken the loans violating banking rules of Bangladesh.[26] Around same time large amount of deposits were withdrawn from the bank feeding into a liquidity shortage.[27] Bangladesh Bank appointed an observer to the bank and began an investigation into irregular loans worth 72.46 billion BDT.[28][29] In December, Justices Md Nazrul Islam Talukder and Khizir Hayat Lizu of the High Court Division ordered an investigation into the irregular loans at Islami Bank and sought an explanation from S. Alam Group on the 300 billion BDT loan.[30] On 29 December 2022, Islami Bank Bangladesh Limited took 80 billion BDT in emergency loans from Bangladesh Bank.[27][31] Ahsan H. Mansur, Director of Policy Research Institute of Bangladesh, alleged the government officials were aware of the loans scams at the bank involving S. Alam Group.[32]

In January 2023, Bangladesh Securities and Exchange Commission approved Islami Bank Bangladesh Limited to raise 8 billion BDT through issuing bonds.[33] Bangladesh Bank purchased land from Islami Bank near its headquarters for 1.1 billion BDT.[34] In February 2023, Md Shahabuddin, resigned from the board of directors of Islami Bank Bangladesh Limited after being elected President of Bangladesh, a position he held since 2017.[35] An additional managing director and deputy managing director of the bank resigned within a week of each other in April.[36] The bank announced plans to increase confidence of its depositors.[37] Bangladesh Bank report published in its website shows that IBBPLC has spent by far the highest amount on corporate social responsibility in Bangladesh for the year 2022.

Major Shareholders of IBBPLC

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63% shared owned by the above shareholders and 60,000 people of Bangladesh are owners of the rest 37 percent shares.[39]

Awards of IBBPLC

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Global Finance, a reputed US-based quarterly magazine, awarded IBBPLC as the best bank of Bangladesh for the Year 1999, 2000,[8] 2004 and 2005, and the best Islamic financial institution of Bangladesh every year from 2008 to 2013.[40][41][42][43][44][45]

See also about Banks

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References

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  1. ^ "ইসলামী ব্যাংকের চেয়ারম্যান পদে ওবায়েদ উল্লাহ". Kaler Kantho (in Bengali). 23 August 2024. Retrieved 3 September 2024.
  2. ^ "Independent Auditors' Report to The Shareholders of Islami Bank Bangladesh Limited" (PDF). 31 December 2019. Archived from the original (PDF) on 1 December 2022. Retrieved 21 November 2020.
  3. ^ "Independent Auditors' Report to The Shareholders of Islami Bank Bangladesh Limited" (PDF). 31 December 2019. Archived from the original (PDF) on 1 December 2022. Retrieved 21 November 2020.
  4. ^ "Independent Auditors' Report to The Shareholders of Islami Bank Bangladesh Limited" (PDF). 31 December 2019. Archived from the original (PDF) on 1 December 2022. Retrieved 21 November 2020.
  5. ^ "Independent Auditors' Report to The Shareholders of Islami Bank Bangladesh Limited" (PDF). 31 December 2019. Archived from the original (PDF) on 1 December 2022. Retrieved 21 November 2020.
  6. ^ "Independent Auditors' Report to The Shareholders of Islami Bank Bangladesh Limited" (PDF). 31 December 2019. Archived from the original (PDF) on 1 December 2022. Retrieved 21 November 2020.
  7. ^ a b c d e "Islamic banking grows in Bangladesh, no thanks to the authorities". The Economist. 2017-08-24. ISSN 0013-0613. Retrieved 2021-03-19.
  8. ^ a b c Mazid, Muhammad Abdul (2012). "Islami Bank Bangladesh Limited". In Islam, Sirajul; Jamal, Ahmed A. (eds.). Banglapedia: National Encyclopedia of Bangladesh (Second ed.). Asiatic Society of Bangladesh.
  9. ^ "About IBBL:Corporate Information". www.islamibankbd.com. Archived from the original on 12 May 2020. Retrieved 27 July 2016.
  10. ^ "Islami Bank Bangladesh Limited". Bangladesh Institute of Bank Management. Retrieved 27 September 2013.
  11. ^ a b c d Taiyeb, Faiz Ahmad (2022-12-06). "The rise and fall of Islami Bank". The Daily Star (Opinion). Retrieved 2023-04-16.
  12. ^ "Islami Bank Bangladesh Limited". Banglapedia. Retrieved 10 May 2016.
  13. ^ "US panel exposes governance failure at HSBC". The Daily Star. 2012-07-18. Retrieved 2023-04-16.
  14. ^ "Terror financed due to HSBC failure". The Daily Star. 2012-07-18. Retrieved 2023-04-16.
  15. ^ "SIBL, Islami Bank clarify their positions". The Daily Star. 2012-07-19. Retrieved 2023-04-16.
  16. ^ a b "HSBC 'helped Islami Bank to fund al-Qaeda'". bdnews24.com. Retrieved 2023-04-16.
  17. ^ Rahman, Sajjadur (2013-09-12). "Islami Bank appoints US consultant to clear its name". The Daily Star. Retrieved 2023-04-16.
  18. ^ Rahman, Sajjadur (2013-07-29). "Islami Bank stung by shipbuilder". The Daily Star. Retrieved 2023-04-16.
  19. ^ Rahman, Sajjadur (2015-11-23). "JP Morgan clients buy into Islami Bank". The Daily Star. Retrieved 2023-04-16.
  20. ^ মালিকানা বদলের পর ১৫ মাসেই ইসলামী ব্যাংক সংকটে. Prothom Alo (in Bengali). 26 April 2018. Retrieved 2023-01-02.
  21. ^ "Islami Bank to hire people of all religions, more women". The Daily Star. 2017-01-12. Retrieved 2023-04-16.
  22. ^ "Major changes in Islami Bank key positions". The Daily Star. 2017-01-06. Retrieved 2023-04-16.
  23. ^ a b Uddin, AKM Zamir (2019-06-30). "Islami Bank's default loans double in three months". The Daily Star. Retrieved 2023-04-16.
  24. ^ Sakib, Shanaullah. "'Nasty November' for Islami Bank". Prothom Alo. Retrieved 2023-01-02.
  25. ^ a b c d e "How a 24-year-old greenhorn is 'blessed' with a Tk900cr loan". The Business Standard. 2022-11-27. Retrieved 2023-01-02.
  26. ^ Jamal, Eresh Omar (2022-12-04). "Destroying the economy to save the thieves". The Daily Star. Retrieved 2023-04-16.
  27. ^ a b Parvez, Sohel (2023-02-24). "Depositors withdraw Tk 11,426cr from Islamic banks in 3 months". The Daily Star. Retrieved 2023-04-16.
  28. ^ "BB decides to appoint observers at the two Islamic banks". The Daily Star. 2022-12-12. Retrieved 2023-04-16.
  29. ^ Uddin, AKM Zamir (2022-11-29). "TK 7,246CR loans to 9 firms: BB probing 'breach of rules' at Islami Bank". The Daily Star. Retrieved 2023-04-16.
  30. ^ "HC orders probe into 'loan scams' in 3 banks". The Daily Star. 2022-12-04. Retrieved 2023-04-16.
  31. ^ "Islami Bank gets special loan of Tk 80 billion". Prothom Alo. Retrieved 2023-04-16.
  32. ^ Mortoza, Golam (2022-12-06). "Islami Bank's loan scams were not unknown to policymakers". The Daily Star. Retrieved 2023-04-16.
  33. ^ "Islami Bank gets nod to raise Tk 800 crore by issuing bonds". The Daily Star. 2023-01-01. Retrieved 2023-04-16.
  34. ^ "Bangladesh Bank buys Islami Bank's land for Tk 110 crore". The Daily Star. 2023-03-16. Retrieved 2023-04-16.
  35. ^ "President-elect Shahabuddin resigns from Islami Bank's board". The Daily Star. 2023-02-13. Retrieved 2023-04-16.
  36. ^ "Another Islami Bank top official resigns". The Daily Star. 2023-04-05. Retrieved 2023-04-16.
  37. ^ "Islami Bank working to restore depositors' confidence". The Daily Star. 2023-03-30. Retrieved 2023-04-16.
  38. ^ Md Fazlur Rahman. "Islamic banking on a roll". The Daily Star. Archived from the original on 13 December 2013. Retrieved 27 September 2013.
  39. ^ Al Mamun, Firoz (21 February 2013). "Islami Bank guided by economics, not politics". The Daily Sun. Archived from the original on 12 December 2013. Retrieved 27 September 2013.
  40. ^ "US magazine says IBBPLC best Islamic financial institution in Bangladesh". Bangladesh Business News. 16 October 2010. Archived from the original on 8 December 2015. Retrieved 28 November 2015.
  41. ^ "Best Islamic Finance Institutions – 2008". Global Finance. 19 February 2009. Retrieved 28 November 2015.
  42. ^ "Islamic Financial Institutions Awards – 2009". Global Finance. 1 June 2009. Retrieved 28 November 2015.
  43. ^ "Islamic Bank Awards 2011: By Country". Global Finance. 1 June 2011. Retrieved 28 November 2015.
  44. ^ "World's Best Islamic Financial Institutions 2012: Country Awards". Global Finance. 6 June 2012. Retrieved 28 November 2015.
  45. ^ "World's Best Islamic Financial Institutions 2013: Country Winners". Global Finance. 2 June 2013. Retrieved 28 November 2015.
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