Internship Report On Analysis of Investment Operation Of Social Islami Bank Limited

The report in titled “Analysis of Investment Operation of Social Islami Bank Limited” is prepared to fulfill the partial requirement of BBA program.

The report is divided into eleven chapters. The first chapter is the introductory part where the objective, scope, methodology of the report is described. In the chapter two profile of SIBL is attached where some overview on the mission, vision, performance are presented at a glance.

Besides that a clear sight about Performance of SIBL, SIBL’s Islamic Banking practices, their problems and performances with legislation has been shown in the third chapter. In chapter no. four ratio analyses are presented. Regression analyses on various variables such as investment, equity, deposit etc. are included in the fifth chapter. The next chapter titled “Credit Investigation” one can find the investigation procedure about the project/borrower and way of processing information for investment sanction. An apparent picture of Islamic mode of investment & administration of investment has also been found in this chapter.

In the seventh chapter, it has been found the Overall Investment Management Process of SIBL including classified investment & provision against classified investment, risk grading have been described. On the other hand, some mathematical and graphical presentation about investment under different Islamic modes comparing with other three Islamic Banks has been found in the Distribution of fund & Default management chapter (chapter eight). This chapter also involves classifications of defaults and judgment.

The ninth chapter represents learning summary and findings of this report. At the chapter of SWOT analysis (chapter ten) strength, weakness, opportunities and threats are shown.

Lastly, some recommendations to improve the overall activities of the Bank & about the problems of practicing Islamic Banking in Bangladesh .The recommendations are given in light of conclusion & the findings.

Any institution that accepts deposits of money from public, for the purpose of lending or investment, repays on demand or transfers by checks, draft orders & other means is called a bank. One of the important roles of banking is to deal with transaction of money from surplus unit to deficit units. Banks in all countries work as the repository of money. Bank represents a highly significant and influential sector of business worldwide.

Modern banks play an important part in promoting economic development of a country. Banks provide necessary funds for executing various programs underway in the process of economic development. They collect savings of large masses of people scattered through out the country, which in the absence of banks would have remained ideal and unproductive. These scattered amounts are collected, pooled together and made available to commerce and industry for meeting the requirements. Economy of Bangladesh is in the group of world‘s most underdeveloped economies. One of the reasons may be its underdeveloped banking system. Government as well as different international organizations have also identified that underdeveloped banking system causes some obstacles to the process of economic development. So they have highly recommended for reforming financial sector. Since 1990, Bangladesh Government has taken a lot of financial sector reform measurements for making financial sector as well as banking sector transparent, formulation & implementation of these reform activities has also been participated by different international organization like World Bank, IMF etc.

1.2 Origin of the report:

Practical knowledge makes a man expert in the real life situation. Bachelor of Business Administration (BBA) course requires 90 days attachment with a bank (Social Islami Bank Limited) followed by a report assigned by the supervisor in the organization and endorsed by the faculty advisor. I took the opportunity to do my internship in Social Islami Bank Limited(SIBL). My topic of internship is authorized from the head office of SIBL .My faculty supervisor Mr. Hasibul Alam Chowdhury, lecturer, Department Of Banking, University of Dhaka, also approved the topic and authorized me to prepare this report as part of the fulfillment of internship requirement. The report thus was titled as ‘Analysis of Investment Operation of Social Islami Bank Limited(SIBL).

1.3 Objectives of the Report:
The objective of the study can broadly be classified under two branches as main objectives and specified objectives. Achievements of the specified objectives will automatically lead to the achievement of main objectives and the study has been completed keeping in mind.

1.3.1 Main Objective
The main objective of this report is to fulfill the requirements of BBA Program containing the completion of three months internship program and preparation of internship report accordingly. It also helps to get a clear-cut idea about how SIBL runs & what function it does particularly to manage its credit function.
That is, how an investment or credit proposal is received, how it is processed, how it is analyzed, how decisions regarding the sanction of a particular credit facility are taken etc.

1.3.2 Specific Objectives
The specific objectives of my report are listed as below:
I. To get an overview of the Islamic Banking (Shariah Banking) System of the SIBL.
II. To gain practical experience on different functions of different departments like investment dept. especially from the perspective of Islamic Banking.
III. To know the activities of the Credit/ Investment division of SIBL.
IV. To know how a Credit/ Investment proposal is treated in this division.
V. To learn about the Credit/ Investment analysis process of the division.
VI. To know the decision making process of the Credit/ Investment division.
VII. To measure the effectiveness of the bank in the utilization of available resources.
VIII. To analyze classified investment.
IX. To analyze the year wise performance of the bank in terms of the profitability and find out the strengths, weaknesses, opportunities and threats of the bank

1.4 Rationale of the Study:
The organization part of the report covers the historical background of Social Islami Bank Limited as well as its present status. In this report I discuss about the Investment modes of different full fledge & partial Islamic banks. I will also focus on performance of investment management of Social Islami Bank Limited. For achieving the objective & analyzing the performance of Social Islami Bank Limited I use different ratios, mathematical & statistical terms using financial data of previous years. This study tries to include every important part regarding investment management & performance of SIBL and I believes that this will be helpful for investors as they find financial statements (Balance Sheet, Profit and Loss Account & Cash Flow Statement) and different ratios of previous years. This will also help them for making their investment decision in this bank. This will be also helpful for regulatory bodies for implementing their regulations in this bank & for the up-coming researcher.
At present, world economy & financial system is control by the monetary interest. It has been created many problems in the society. Many peoples have been suffered by this bank interest & some times it destroys the whole national economy. From the ethical side I also describe the historical background of Islamic banking, rules & regulations, religious, socio cultural & economic impact of shariah banking practice. I strongly believes that to establish gracious Islamic economy, financial system should be under shariah system because & it will bring good result for reducing economic difference between rich & poor. It will make a platform for equal distribution of assets among all people. It will create confidence, trustworthiness & reduce the distance among the people of the world. It can be solve the difficulties & problems of international business.

1.5 Methodology of the Report
For collaborating the data and information, collected through primary & secondary sources which contains the past, present and future situation of Islamic banking system in Bangladesh specially Social Islami Bank Ltd. During my study I have followed descriptive research methodology to find out the fact & feature about the investment management of the bank.

1.5.1 Sample Design:
Six full fledge Islamic Banks now are working Bangladesh. Moreover, other commercial banks at least thirteen also start partially Islamic banking. As I working in a single bank, the bank SIBL was taken as sample for the study. However, all Islamic banks & other commercial banks activities have been taken under the purview of the study. So basically four banks (Islamic) is population size of this study.
1.5.2 Sources of Data/ Information:
I have collected information/data from two sources. These are given below: The primary sources:
Ø Face to face conversation to the respective officers and staff of the bank.
Ø Different circular sent by Head Office of SIBL & Bangladesh Bank.
Ø Informal conversation with fellow officials and clients. The secondary sources:
Ø Audited Financial Statements of Social Islami Bank Limited.
Ø Relevant journals & articles available in website.
Ø Published Booklet of Social Islami Bank Ltd.
Ø Study of old files and vouchers.
Ø Four Islamic banks annual report.

1.5.3 Data Analysis
To make this report successful one I will analyze the data as follows:

Ø The analysis of this report is qualitative and quantitative. In qualitative analysis I will covers the investment management under shariah banking system of different Islamic bank & investment practices of SIBL.
Ø In quantitative analysis this I also shown some mathematical analysis for making comparisons among four Islamic banks.
Ø Statistical comparisons among four Islamic banks

1.6 Scope of the Study:
This report has been prepared through extensive discussion with bank employees & with the clients. Prospectus provided by the bank also time of preparing the report, I had a great opportunity to have an in depth knowledge of all the banking activities practiced by the Social Islami Bank Limited.

1.7 Limitations of the Study:
I believe, though it is an analytical & descriptive research study it cannot be 100% freed from flaws. However, here the author would give maximum effort to keep the report at minimum level of mistake or incompletion of research study, & acknowledges the limitation as below:

I. The main constraint of the study is inadequate access to information, which has hampered the scope of analysis required for the study.
II. Limitation of Bank’s policy of not disclosing some data & information for obvious reasons, which could be very much useful. While collecting data, i.e., interviewing the employees, they did not disclose much information for the sake of the confidentiality of the organization.
III. To maintain the organizational confidentiality & due to time limitations many of the aspects can not be discussed elaborately in the report.
IV. Since the bank’s personnel were always very busy under tremendous workload, so they could not be able to extend their cooperation properly.
V. Another problem is that it creates a lot of confusions regarding verification of data in case of interview from more than one person.
VI. Many procedural matters were conducted directly in the operations by the top management level which may also gave some sort of restrictions.
VII. I carried out such a study on Islamic Banking for the first time, so lack of experience is one of the main constrain in the way of meticulous exploration of the study.
VIII. Every organization has their own secrecy that is not revealed to others, so getting relevant papers & documents were strictly prohibited.
IX. Because of large area of operation, author could not collect data from all areas.
X. Moreover it was very difficult to collect the information from various personnel for their job constrain.
XI. Sufficient books, publication, fats & figures are not available.
XII. Entrance to every nock & corner of the Bank was not possible for the author due to security & other corporate obligation.
XIII. Lack of consistent between theoretical & practical experience creates problem in preparing report.
XIV. Like any other research, this report is limited to time & resources & only three months are not enough to cover such wide area of banking function & prepare the study.