Internship Report on Introducing Islamic Shariah as an investment procedure in banking system

Internship Report on Introducing Islamic Shariah as an investment procedure in banking system problem and prospect in the context of Shahjalal bank limited

Today necessity of Bank as a financial institution is undeniable. Islamic banks can provide efficient banking services to the nation if they are supported with appropriate bankinglaws, and regulations. Loans and Advances is the nerve of a Bank. Banking industry is the most growing sector in the economy of Bangladesh. Both Islamic Bank and interest based conventional banks invest their money to earn profit. But they differ in the manner of operation. The operation of Islamic bank is regulated by Islami principles, while the activities of conventional banks are controlled by general banking rules and regulation. Here I have chosen Shahjalal Bank Limited (SBL). SBL has passed a long way since it is providing services. Already they have earned
a strong positioned in the field of Investment & customer service. To continue to hold the position and be perfect in this sector they will have to keep more and more attention to the customer retention and development.

This Report on Practical Orientation of the Shahjalal Bank Limited contains my practical observation and experience of different desks in the Shahjalal Bank Limited (SBL) Mitford Branch. I have experienced the exercise of Investment Division, General Banking Division, Foreign Exchange Division and accounts Division during my Internship Program although the duration of the program was not sufficient .However, I have interested to prepare Report on “IntroducingIslamic Shariah as an Investment Procedure in Banking System, Problem & prospect in the Context of Shahjalal Bank Limited Mitford Branch.”

The philosophy of Islamic bank is to establish an egalitariansociety based on the principle of social justice and equity. As an integral part of this process Islamic bank has introduced a new procedure of depositmobilization, way of investment, and has set up some example of social welfare activities.

The second half of the twentieth century witnessed a distinctly separate line of thinking on banking. This was institutionalized at the end of third quarter and subsequently emerged as a new system of banking called Islamic Banking or also called Profit-Loss-Sharing Banking (PLS).

The world has now been expe­riencing operation of as many as 250 Islamic banks and financial institu­tions in more than 50 countries, Muslim and non-Muslim. There are religious as well as economic reasons, which have contributed to the emergence of PLS-banking as an alternative to its conventional counterpart.

The very peculiar feature of Islamic bank is its Shariah Council that is completely absent in conventional banks. Besides these the terminology used in different deposit account is of Islamic Terminologies like Al Wadia, Mudaraba etc. This Al Wadia is conducted on the principle of current account maintained by conventional banks and Mudaraba of Islamic bank is nothing more than the concept of savings account of conventional banks. But, still there are some differences like disclosure of using depositor’s money with the full responsibility of Islamic bank. In case of Mudaraba Principle there is a weighting system of profit sharing. Such as they declare higher weight for Mudaraba Bond and Term Deposit Reserve.

In consideration of investment that is in conventional banks loan and advances, Islamic bank also use some special terminology like Musharaka, Mudharaba, Murabaha, Bai Muazzal and Bai Salam. And these all have some specialty. Islamic bank goes for investmet based on some agreed upon profit. But in case of conventional bank there is only the declaration of interest on loan and advances.

In securing loan or investment both Islamic and conventional banks follow almost same procedure like mortgage, lien, hypothecation that is Mudharaba post import or Musharaka under shirkatul milk or Mudaraba trust receipt.
The first Chapter of my Report presents the origin, Objectives, Methods & Limitations of the study.
The Second Chapter, I have discussed Islamic Banking in Bangladesh and the World, History of Islamic Banking System & History of Shahjalal Bank Limited.

Third Chapter, I have discussed Findings of this study such as Investment Procedures of Shahjalal Bank Ltd, Islamic Shariah of SBL, Problems and Prospects.

Fourth Chapter includes some recommendations of this report. These recommendations/suggestions are given from observation, Experience and marketing research viewpoint .