Chapter: 03

Methodology,
Responsibilities and Findings

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3.0 Methodology of the report
All the information incorporated in this report has been collected from different sources. To
understand different conceptual matters, I have undergone group discussions, sometimes asked
questionnaires to the responsible officers, took help from the internet and different published
articles in the journals and books have been used.

3.1 Sources of Data:

All the relevant date regarding this study is collected from two sources.

Primary Sources of data: Primary data is data originated for the first time by the researcher
through direct efforts and experience, specifically for the purpose of addressing his research
problem. The data can be collected through various methods like surveys, observations,
physical testing, mailed questionnaires, questionnaire filled and sent by enumerators,
personal interviews, telephonic interviews, focus groups, case studies, etc.

1. Personal interview- face to face conversation and in depth interview with the respective
officers of the branch.

2. Personal observation- observing the procedures of banking activities followed by each

department.

3. Practical work exposure on different areas of the branch.

4. Informal conversation with the client or customers. .

Secondary Sources of data: Secondary data implies second-hand information which is already
collected and recorded by any person other than the user for a purpose, not relating to the current
research problem.
 Annual Report of IBBL
 Manuals of Islami Bank Bangladesh Limited
 Website of Islami Bank Bangladesh Limited
 Relevant books, Research papers
 Files and documents of the branches
 The training instruments of the Bank Islami Bank Training and Research
Academy (IBTRA)

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3.2 Actual task part
In the period of my two months internship program, I got a position and some duties in
Islami Bank Bangladesh Limited New market Branch. My observation and responsibilities
were in General Banking Department such as account opening & different types of DPS or
FDR opening (Deposit Schemes).From 21 st October to 28th November. I worked closely with
MD. Habib Ahmed (Officer), Mokhlasur Rahman (Senior Officer) of IBBL, New market
Branch. On that time I mainly worked in Account Opening section or Customer Service
Department.

3.3 Job responsibilities

There were several responsibilities carried out by me in general banking division of Islami Bank
Bangladesh Limited, New market Branch. Every day I used to start my job at 10:00am and it
ended at 06:00pm. Within this time different types of job were done by me and those are given
below.

Accounts Opening

Account opening is the most important issue in general banking. It is the first phase of
customers who are going to get services from the bank. And I had completed those task
successfully. Before opening of any account it is very important to know the target
customers of the bank. The targeted customers may be individual, partner, joint stock
companies, trustee/clubs/associates and different types of institutions. It is also important to
know why the customer wants to open account at this branch. To reveal customer’s purpose
of opening account is pretty tricky.

Here I briefly described about account opening procedure and also described that what type
of document needed to opening an account, and also fill up those customers account whose
are illiterate. I also provided bank statement of the customers.

IBBL offers different types of account for their target groups. These are as follows:

 Current Account
 Savings Account
 Fixed Term Deposit account (FDR)

 Short Term Deposit (STD/DPS)

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  Opening an account is the first step to be a customer of IBBL and enjoying
different services of it. For depositing and withdrawing money from the Bank
and having other services, an account is mandatory for every individual and

Institutional customer. So my responsibility was to give premium quality

services and attempt to sustain our customer for a long time with Standard.

Closing Account

Customer accounts are closed for many reasons. So I closed accounts with maximum
attention to the customer so that next time when they will think about opening a bank
account, Islami Bank Bangladesh Limited will come to their mind as a preferred choice.

Receive Cheque requisition

A cheque requisition is received from the customer for giving a new cheque book containing
a specific number of pages mentioned by customer. I received the cheque requisitions
throughout the day and sent the list to the head office at the end of the day.

Pay Order Issue

Pay order issue is another type of service of the bank. Pay order has been issued to serve the
customer who wants to send money not in cash rather in cheque. It reduces the cash carrying
risk. I filled up the pay order slip to help out the customers.

3.4 SWOT analysis of IBBL

IBBL has some internal Strengths and Weaknesses as well as they have also some external
opportunities and threats. IBBL should emphasize on SWOT analysis so that they can take
proper decision and achieved the ultimate goal of the organization. As an internee of IBBL
Newmarket Branch, I have tried to analyze their strength, weakness, opportunities and threats.

Strengths:
IBBL Providing customer quality service in consistent manner.
They can provide more investment facility to their clients compared to other Banks for adequate
financial ability. IBBL earned customer loyalty and customers are highly committed to the Bank.

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As most of the people are Muslim in Bangladesh, they are trusted in superior performance of
IBBL as a Sariah based-Islamic Banking. It has already achieved a good will among the clients.
Also it has a research division.

Weakness:

The decision making of the bank is too much centralized. No decision is made without the
authorization of the head office. Islami Bank Bangladesh Ltd. has very limited human resources
compared to its financial activities. Number of ATM Booth is not sufficient compared to their
vast banking operation. As lack of advertising. They don’t telecast any attractive advertisement
in the media. Many of the employees are unskilled and from them, superior performance is
unexpected to survive in the national economy as well as in the world economy.

Opportunities:
As a popular Islami bank in Bangladesh IBBL need to increase their ATM booths facilities.
Emergence of E-banking will open more scope for IBBL. IBBL can introduced more innovative
and modern customer service. Many branches can be opened in local remote area as its high
demand. Many branches can be opened in local remote area as its high demand.

Threats:
The worldwide trend of mergers and acquisition in financial institutions is a problem for IBBL.
As the salary structure of IBBL is lower compared to other banks, young talent and expertise
employees are not showing interest on this side. Frequent devaluation of taka and fluctuation of
foreign exchange rate is causing problem as rules and regulations of Bangladesh Bank is
different form Islamic Banking System, it cases various problems to operate activities according
to the Islamic Sariah. Local competitors are capturing huge market share by offering similar
products.

3.5 Graphical Presentation of Ratio Analysis of IBBL

1. Current Ratio = Current assets / Current Liabilities

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 Current Ratio
0.25
0.21
0.2 0.19 0.19
0.16
0.15 0.13
0.1
0.05
0
2014 2015 2016 2017 2018
Ratio 0.13 0.16 0.19 0.21 0.19
Figure 4.9 : Current Ratio
Interpretation: According to result the current ratio of IBBL was 0.19 in 2018 which indicates
the liquidity of IBBL had not enough ability to pay off its short-term liability.
Others years were same situation.

1. Gross Margin Ratio = (Net Sales – COGS) / Net Sales

Gross Margin Ratio

26.39 %
26.08 %
25.38 % 25.10 %

23.59 %

2014 2015 2016 2017 2018

Ratio 26.39 % 25.38 % 23.59 % 25.10 % 26.08 %

Figure 4.13 : Gross margin ratio

Interpretation: From this result we can say that 26.08% profit margin means for each 1 tk. of
revenue IBBL earns 0.2608 in 2018 which was not bad and every years were almost the same
result.

2. Asset Turnover Ratio = Net Sales / Average Assets

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 Asset Turnover Ratio

0.09
0.08 0.08 0.08
0.07

2014 2015 2016 2017 2018

Ratio 0.09 0.08 0.08 0.07 0.08

Figure 4.11 : Asset Turnover Ratio

Interpretation: According to the debt to equity ratio the results of every year were for IBBL
was good. It indicates that investors invest more than creditors.

3. Fixed Asset Turnover Ratio = Net Sales / Average Fixed Assets

Fixed Asset Turnover Ratio

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5.06
5 4.33
3.95
4 3.64 3.57
3
2
1
0
2014 2015 2016 2017 2018
Ratio 3.64 3.57 3.95 4.33 5.06

Figure 4.12 : Fixed asset turnover ratio Interp

retation: According to the result, IBBL properly uses their asset to generate revenue especially
in year 2018 that the result was highest than the previous years. Which indicates that IBBL
generate 5.06 tk. for each taka invested in fixed assed.

5. Debt to Equity Ratio = Total Liabilities / Total Equity

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 Debt to Equity Ratio
12 11.33
10.72
11
10.09 10.16
10 9.62

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2014 2015 2016 2017 2018
Ratio 9.62 10.09 10.72 11.33 10.16
Figure 4.10 : Debt to equity ratio

Interpretation: According to the debt to equity ratio the results of every year were for IBBL
was good. It indicates that investors invest more than creditors.

6. Return on Assets (ROA) Ratio = Net Income / Average Assets

Return on Assets (ROA) Ratio

0.80%
0.70% 0.67% 0.67 %
0.64%
0.60% 0.59 % 0.55 %
0.50% %
0.40%
0.30
%
0.20
%
0.10 2014 2015 2016 2017 2018
%0.0
0%
Ratio 0.67% 0.67% 0.59% 0.55% 0.64%

Interpretation: It shows that ROA of IBBL is very low. It indicates that IBBL did not better in
managing its resource to generate profits. They need to more concentrate on to make different
way how they can utilize their resource.

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3.6 Findings:

The findings obtained from the study on foreign exchange operations of Islami Bank Bangladesh
Limited are follows:

1. IBBL is playing an important role toward the growth and economic development of
Bangladesh.
2. There are three types of modes of foreign exchange market, which are export section, import
section and foreign remittance. Foreign exchange corporate branch does the foreign exchange
activities vastly.
3. Foreign exchange department has highly adhered with procedures, rules and regulations
provided by Bangladesh bank but most of the cases the officers have no knowledge about
this regulations and acts.
4. Payment procedure of import document sometime takes lengthy process.

5. Back to back LC is one kind of export facility. This is a special nature of credit opened for
improving raw materials and accessories or executing Export.
6. Foreign exchange department is not totally computerized. They use register ledger books for
Margin, PAD, L/C opening etc. That’s why there may be change of misrepresentation.
7. Bank strictly follow some rules and regulations for steps of the opening of L/C which give
more secure transaction.
8. The procedures followed by IBBL for open documentary credit up to settlement is lengthy
and some cases are not as per committed.