Efficiency of conventional and Islamic banks Essay

Consequences and Findingss

The findings suggest no important differences between the overall efficiency of conventional and Muslim Bankss. However, it was noted that, on norm, Bankss are more efficient in utilizing their resources compared to their ability to bring forth grosss and net incomes. The mean bank lost an chance to have 27.9 per centum more gross, given the same sum of resources. Similarly, the mean bank lost the chance to do 20.9 per centum more net incomes using the same degree of inputs. Clearly there is significant room for betterment in cost minimization and gross and net income maximization in both banking systems. The size and age factor did non significantly act upon the efficiency scores in both banking watercourse.

This research is well different from the anterior work in this country in three chief ways. First, it investigates cost, gross, and net income efficiency, whereas old surveies focus on cost, net income, or cost and net income efficiency. Besides, no old surveies have compared conventional and Muslim Bankss. Second, this survey distinguishes differences among large versus little, and old versus new Bankss, which allows more elaborate penetrations on the efficiency issue. Third, the age issue in Islamic Bankss has been addressed, so far undocumented.

The rules and working processs of Islamic Bankss are wholly new and different from the conventional Bankss. There is an inevitable demand for preparation of the employees of the Bankss to point and attune them to the new system of Islami banking. To provide to this demand, Islami Bank preparation and Research Academy ( IBTRA ) was established in 1984, shortly after the origin of the Bank.

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The activity of IBTRA screens both preparation and research on assorted facets of Islamic banking. The Academy developed a rich library of its ain with a hoarded wealth of valuable books on different topics including Islamic economic sciences, banking, comparative doctrines and diaries of place and abroad and research articles and paperss. Employees of the Bank, scholars and research workers have been taking full advantage of the library.

The Academy edited books on “ Readings in Islamic Banking ” and “ Investment Operations ” . It besides edited and published a booklet on “ Investment and Trade Opportunities in Bangladesh. ”

Keeping in position the bing and future preparation demand of the Bank and besides to by and large provide such demands of different Islamic banking & A ; fiscal establishments of the part, the direction of Islami Bank Training and Research Academy has been placed at the disposal of an Academic Council dwelling of 3 Directors of the Board, Management Executives of the Bank, Shariah bookman, renowned academicians and representatives of reputed establishments engaged in the preparation of bank functionaries of the state.

The Academy conducts preparation classs, and workshops. The classs include Islamic Banking, Banking Law and Practice, Investment Operations and Management, Foreign Trade and Foreign Exchange, Shariah Based Audit and Inspection.

Besides, orientation, initiation, foundation and motive classs on different topics are besides conducted round the twelvemonth. In add-on to carry oning regular preparation classs, it arranges seminar on Islamic economic sciences and banking and such other related subjects of current involvement.

Apart from this, an “ Executive Development Program ” has been introduced at the Head Office of the Bank in Dhaka since 1988 for enriching cognition and thought procedure and developing professional accomplishment of the Executives. This plan has proved to be effectual and now being extended outside Dhaka. The Academy conducts internship classs for the pupils of different Departments of assorted Universities of the state.

The Bank introduced one-year award for the best three pupils of the Department of Banking and Finance of Dhaka University who secure 1st category 1st, 2nd and 3rd with ‘Islam! Banking ‘ as particular topic from the twelvemonth 1994.

Besides, a motivational plan has been introduced since 1987 for the clients of the Bank. Client-orientation plan are arranged at different subdivisions for circulating the construct of Islamic economic sciences and banking and to introduce the clients with the operations of Islamic banking system, ‘the Bank, in 1993, co-sponsored a 3-day international Seminar on ‘Islamic Common Market ‘ in which bookmans, economic experts, bankers, industrialists and representatives of trade organic structures of 15 states participated. The Bank, with the coaction of International Association of Islamic Banks ( IAIB ) , organized an International Seminar on Islamic Banking in1985 and another international Seminar on Islamic Banking and insurance in 1989.

Islami Bank Training and Research Academy has introduced Diploma in Islamic Banking since 1998.

2.8 Management and Internal Organization Management of IBBL

Islamic Bank Bangladesh Limited is managed by a 24-member Board. Of the Directors, 8 are aliens and 16 are local. The Board of Directors forms a 9 member Executive Committee for efficient operation of the Bank. Besides, a Management Committee looks after the personal businesss of the Bank.

Management Approach and leading manner

IBB follows take part leading attack. Work achievement is from committed people with mutuality through a common interest in organisation purposed with trust and regard. They are the directors who display in their actions the highest possible dedication both to people and to work. They are the existent term directors ‘ who are able to engage the service demands of the endeavor with the demands of the persons.

Technology at Islam Bank Bangladesh ( ltd. )

With rapid alteration in communicating banking worldwide has experienced a enormous transmutation and it is continually being shaped to accommodate the alterations of industrialisation of the society. Unfortunately, Bangladesh have missed much of the exhilaration and we are virtually incognizant of the betterments in banking services in other developed states.

IBBL has now brought a portion of that development made through improved computing machine and communicating engineering. Clients of IBBL Bank will now bask service quality that is rather upgraded and to some extent unique.

Corporate civilization

Ideology, Values, Beliefs, Philosophy, etc.

They have a standard set of regulations for ethical guidelines. The nucleus thought of it is to “ Make the right thing ” . The right thing may non be obvious at all the clip. They are to took after the community and function them, avoid struggle of involvement whenever possible. The thought at the Citicorp is to construct a congenial ambiance and promote teamwork and advancement jointly.

IBBL as a good corporate citizen abides by a set of nucleus values. Some can be classified as traditional values such as security, trust worthiness, unity and confidentiality. Others are possibly more impermanent. They reflect IBBL Bank Ltd ‘s committedness to its clients to be.

  • Responsive to their demands
  • Flexible in attack
  • Professional in mode
  • Always endeavoring excellence.

The major corporate doctrine of IBBL Bank Ltd. Is to expeditiously pull off the hazard involved and maintain the stableness of the bank to the greatest extent possible.

2.8.1 Shariah Council: Shariah Supervision

Shariah Council of the Bank is playing a critical function in steering and oversing the execution and conformity of Islamic Shariah rules in all activities of the Bank since its really origin. The Council, which enjoys a high position in the construction of the Bank, consists of outstanding ulama, reputed banker, renowned attorney and high economic expert.

Members of the Shariah Council meet often and consider on different issues facing the Bank on Shariah affairs. They besides conduct Shariah review of subdivisions on a regular basis so as to-ensure that the Shariah rules are implemented and complied with meticulously by the subdivisions of the Bank.

Opportunity & A ; menaces of IBBL

Problems and chances of Islamic banking in Bangladesh

Despite enormous popular support dramatic success in footings of mobilisation of sedimentation and distribution of net income Islamic banking in Bangladeshi yet to accomplish the coveted degree of success due to the absence of appropriate legal model for transporting.

Muslim Banking operations in the state. All the government-approved securities in Bangladesh are involvement bearing. Besides, Islamic Money Market in Bangladesh is yet to develop. As a consequence the Islamic Bankss, which are committed to avoid involvement, can non put the allowable portion of their Statutory Liquidity Reserve and Short Term Liquidity in those securities.

Inspire of the present restrictions, Islamic-banking system has enormous potency and chance in Bangladesh. First, the successful launching and needs to an Islamic Money Market in the state. Third Muslim Bankss have brought together many depositors and enterprisers under their crease and coverage. These depositors and enterprisers so long avoided interest-based banking on evidences of spiritual injunctions.

The gradual and successful globalisation of Islamic banking coupled with turning consciousness of the people about its fiscal and societal benefits makes it clear that the following century is traveling to be the century of Islamic banking.