Conventional Bank and Islamic Bank

Topics: Bank, Islamic banking, Fractional-reserve banking Pages: 7 (2274 words) Published: May 26, 2013
Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur’an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh. The perception of Islamic banking has been bloomed with its186 branches from the inspiration of building up a society on justice in accordance with basic socio-economic principles of Islam. The difference between Islamic bank and conventional bank is on principles. The functions of this type of bank are completely different. This bank is established on Islamic Shariah and all types of transactions are free from interest. Justified profit is the basis of financial transaction of this bank. This bank is committed to establish socio-economic justice. Islami Bank Bangladesh Limited is the first interest free commercial bank in South-East Asia. The bank got license from Bangladesh Bank as a scheduled commercial bank to conduct banking business and started functioning. The bank has opened 186 branches covering important commercial areas. The bank intends to deliver its services to other areas of the country during next few years. The overall report has seven parts without the preparatory part. The introductory part of the report is the current one and the second part covers the introduction to Islamic Banking.Third part of the report is about the overview of IBBL. Fourth part of the report is about modes of investment & fifth part of the report is about Investment of IBBL.Chapter six  covers the problem findings & recommendations and finally it covers ending summary. Origin of the Report:

Realistic orientation in different organizations is the concluding Project paper requirement of BBA program. This paper is prepared based on an internship program. Department of finance, IIUC, (Dhaka Campus) arranges internship program in attachment with different business organizations for its students after the completion of theoretical courses of program of Bachelor of Business Administration. Each intern must carryout a specific project paper, which is assigned by the supervisor approved by the placement office of Department of BBA. Hence I was selected for the Islami Bank Bangladesh Limited (IBBL) by the placement office and since then have started my realistic orientation program in General Banking, Investment & foreign exchange department at Local Office, Motijheel and have prepared my project paper as it is assigned by my supervisor. The project paper is titled as “Investment Mechanism of IBBL”  Scope of Study:

This research will be done only for academic purpose. It may not be able to meet professional purposes. But it can be used to reveal some truth pictures of IBBL. The scope of this paper is limited to the organizational structure, background, objectives, functions of Islamic General Banking, investment performance & Foreign Exchange of IBBL as a whole. The scope is also limited...
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