Part -01

Introduction
1
1.1 Origin of the Report:
In the age of modern civilization bank is playing its spending role to keep the economic
development wheel moving. The corporation of the bank is needed in every economic activity. In
fact there is hardly any aspect of development activity where state inspired or otherwise where
bank do not have role to play.
Bachelor of Business Administration (BBA program consists of integrated theoretical and
practical method of learning. The internship program is an integral part of BBA. To fulfill this
purpose I was sent to !ocial Islami Bank limited (!IB"# $irpur Branch. %n the basis of working
e&perience for this period I have prepared this report.
As an intern of !ocial Islami Bank "imited I was provided with the topic Investment Activities
of Social Islami an! "imited# various rules and regulations# policies and procedures relation
to different banking activities have also been enumerated here.
1.$ Significance of the Report:
The prime reason of this study is to become familiar with the practical business world and to
attain practical knowledge about the Banking and 'orporate world# which is so much essential for
each and every student to meet the e&treme growing challenges in (ob market. It is also known to
all of us that there is no alternative of practical knowledge and the practical knowledge is much
more durable and useful than the theoretical knowledge. This study will help us to get a true
picture of the practical business world# particularly of banking business and also to attain
practical knowledge on the various spheres of banking business. !o this study is of paramount
importance for each and every student regardless of his)her study area or discipline.
1.% Scope of the Report:
!cope of the report is mainly limited to the analysis of investment activities of !ocial Islami Bank
"imited. In order to conduct study on this main aspect the following aspects also come within the
scope of the study.
An overview of !ocial Islami Bank "imited
*
An analysis of different modes of investment of !IB"
An analysis of sector wise investment of !IB"
!tatus of classified investment
1.& O'(ectives of the Report:
1.&.1 )eneral O'(ective:
The general ob(ective of the report is to analyze the Investment Activities of !ocial Islami Bank
"imited (!IB".
1.&.$ Specific O'(ective:
The specific ob(ectives of the study are given below+
To know the investment procedures of !ocial Islami Bank "imited.
To know about the status of total deposit and investment.
To analyze different mode wise investment of !IB" through trend analysis.
To analyze sector wise investment of !IB" through trend analysis.
To evaluate the classified loan and provision maintained by !IB" against classified loan.
To identify scope of improvement concerning investment activities of !IB".
1.* +ethodolog, of the Report:
In conducting this study the following methodology was adopted in collecting data and
information# preparing the reports.
1.*.1 Research -esign:
This report is analytical in nature which briefly analyzes the ,Investment Activities of !ocial
Islami Bank "imited-. It has been administered by collecting secondary data. Annual report of
!ocial Islami Bank "imited was the ma(or secondary data sources in this regard. This study has
been conducted by collecting data for the period of . years from *//0 to */11.
1.*.$ Sources of -ata:
1
The data are collected from the following sources.
Secondar, Sources:
Annual report of !ocial Islami Bank "imited.
2arious report related to study.
3eb base support from the internet.
1.*.% .ools used for Anal,sis:
In order to analyze the investment activities of !IB"# trend analysis are used and 'omputer
software ($icrosoft 3ord# 4&cel and 5ower5oint are used for reporting purpose. Trend of
deposit# year wise investment# mode and sector wise investment and classified investment are
analyzed here.
1./ "imitation of the Report:
%n the way of my study in !ocial Islami Bank "imited# I have faced the following problems#
which may be termed as the limitation of the study. The ma(or limitations of this study are given
below+
"ack of available information about the business operation of !IB". Because of the
unwillingness of the busy key persons and the employees for this necessary data collection
became hard.
To complete the study# the time was limited by three months. It was really very short time
to know details about an organization like !ocial Islami Bank "imited.
!ufficient records# publications regarding customer service were not available as per
re6uirement.
There were some restrictions to have access to the information confidential by concern
authority.
7
Part -0$
An Overvie0
Of
Social Islami an! "imited
.
$.1 1istorical ac!ground of SI":
Social Investment an! "imited an interest8free !hariah bank in Bangladesh incorporated as a
banking company on . 9uly 1::. under the '%$5A;I4! A'T 1::7 . It commenced banking
operations on ** ;ovember 1::. with an authorized capital of Tk 1#/// million divided into 1
million ordinary shares of T< 1#/// each. The initial paid up capital was Tk 11=.1> million fully
subscribed by its 1= sponsors including 1 Arab nationals. The paid up capital was enhanced
several times and stood at taka *>/ million on 11 ?ecember *///. The bank is listed with the
?haka !tock 4&change. In *///# total liabilities and shareholders e6uity of the bank stood at
taka..# >01.:: million.
$.$ Social Islami 'an! at a glance:
The bank has taken a renewed drive aiming at consolidating its business in more focused areas
covering !$4 and Agro8finance with emphasis on searching for alternative delivery channel
under which !$! banking and mobile based remittance payment systems that are gradually
introduced to disseminate the !IB" services to the doorsteps of the customers. The bank has
already introduced Internet banking and launched some new products to strengthen its business.
The products are !onali ?in# !ommridhir !opan# !onchoy 5rotidin# !wopner !hiri# !hukher
Thikana# !abu( 'hhya# !abu( !hayanho# !ubarnolata# !ubornarekha# !anchaita etc. and @amil
AT$ ?ebit card.
!IB" is a pioneer in introducing on8line banking among all the Islami Banks of the country with
state8of8the8art banking software# which will enable the bank to perform as any branch real time
banking service to the clients.
!IB" has set its strategy to convert all its banking activities from traditional branch8based
banking system to an ideal blending of both centralized processing unit ('5A and effective
operation of branch that based on modern essence of banking.
!IB" is 6uite conscious of its social business responsibilities and is always trying to participate in
various social programs in the country under its '!B portfolio giving special emphasis on health#
>
habitat C education. The bank ensures to provide better integrated idea of formal# informal C
voluntary banking in the same platform. !IB" has its uni6ue feature to mobilize capital through
'A!D 3AEF program.
!IB" lays emphasis on employment generated# environment friendly and green banking based
investment keeping an eye on e6uitable distribution of resources over geographical territory for
sustainable growth of macro economy of the country.
The BankGs continuous effort has been to increase the shareholdersG value# and be valued as a
compliant organization. The 'orporate Hovernance systems in !IB" ensure transparency and
accountability at all levels in conducting business. !IB" in its (ourney towards continuous
e&cellence has changed its brand logo recently. 3e take pride in our new logo.
$.% 2ision of SI":
To be modern Islami bank in Bangladesh and to make significant contribution to the national
economy and enhance customerIs trust C wealth# 6uality# investment# employeesI value and rapid
growth in shareholdersI e6uity.
$.& +ission of SI":
Digh 6uality financial services the latest technology.
Fast# Accurate and !atisfactory customer service.
Balanced C sustainable growth strategy.
%ptimum return on shareholdersG e6uity.
Introducing innovative Islamic Banking products.
Attract and retain high 6uality human resources.
4mpowering real poor families and create local income opportunities.
5roviding support for social benefit organizations 8 by way of mobilizing fund and social
services.
$.* )oal of SI":
To be the best private commercial bank in Bangladesh in terms of efficiency# capital ade6uacy#
asset 6uality# sound management and profitability having strong li6uidity.
$./ O'(ectives of Social Islami an! "imited:
0
The ultimate goal of social Islami Bank limited is to develop a poverty free society#
where every person will eagerly participate in the social economic development
activities.
The create poverty free society by providing human development training and financial
support to the huge idle human resources through engaging them in the innovative
productive development pro(ects cooperatively.
To provide Banking facilities to people who are still remaining outside the Banking
ambit.
!IB" has created a J!ocial FundI# through collecting money from its profit and from the
interested persons# to improve the fate of the destitute people in the society and the Bank
invests thus fund in the different income generating pro(ects according to the Islamic
rules.
$.3 Strategies and Policies of SI":
!ocial Investment Bank "imited operates all its Banking functions by maintaining the
policies and strategies set by the top management of the Bank. These policies and strategies
facilitate the Bank to achieve its corporate ob(ectives. The policies and strategies are+
(1 To operate itIs all activities on Islamic !ystem.
(* To recruit local personal in the respective branches of the Bank so that they can
better communicate with clients and potential customers. In the region where the
branch locates. This will enable the Bank to attract more customers.
(1 To encourage fresher# energetic and self motivated personnel to enter the Bank so
that their efforts will make the Bank dynamic.
(7 To be closer to customers by establishing more branches in both rural and urban
areas# from which will ultimately contribute to the socio8economic development
of Bangladesh.
(. To investment more money in the thrust sector such as real estate# agriculture
sector etc.
(> To grasp all walks of customers especially middle and lower income groups.
=
(0 To determine BankIs market share# the Bank compares its market share with
;ationalized 'ommercial Bank# Islamic Bank and overall Banking industry.
$.4 5ompan, +otto:
The motto of !ocial Islami Bank is ,9ourney Towards 4&cellence-.
$.6 7ature of usiness:
!ocial Islami Bank "imited give varies of product and services for all customers which include
deposit# making loan and advance# discount bill# conducting money transfer# foreign trade
transaction and other relevant activities and services are includes as keeping# collection#
acceptance and letter of credit.
$.10 7ature and "egal status of SI":
;ame of the company !ocial Islami Bank "imited
"egal Form !ocial Islami Bank "imited an interest8free !hariah bank
in Bangladesh incorporated as a banking company on .
9uly 1::. under the companies act 1::7
'ommencement of 'ompany **
nd
;ovember# 1::.
Begistered %ffice 'ity 'entre# 1/1 $oti(heel ')A# ?haka81///
Telephone ;o. ==/8*8/:>1*//11**# :.>*7*:
Fa& ;o. ==/8*8:..:/11# :.>=/:=
3ebsite www.siblbd.com
!3IFT !%I2B??D
48$ail infoKsibl.bd.com
'hairman $r. $d. Anisul Do6ue
$anaging ?irector $r. $uhammed Ali
Auditors !yful !hamsul Alam C 'o
'hartered Accountants# >.)*)1 Bo& 'ulvert Boad
(level8/># 5urana 5altan# 5hone8:.>/11*
Ta& Advisor =0# ;ew 4skaton Boad# ?haka. 5hone8:1.1.>7
;o of Branches 0>
;o of AT$ Booth 17
;o of !$4 'entre 1/
;o of 4mployee 110.
Authorized 'apital 1////.// $illion
5aid up capital >1:1.:* $illion
:
!ource+ Annual Beport of !IB"
Table *.1+ ;ature and "egal status of !IB"
$.11 Organi8ation Structure:
There are different wing to consist the organizational structure of !IB". There are8
Board of ?irector
4&ecutive 'ommittee
Audit 'ommittee
!hariah !upervisory 'ommittee
$anagement Team
'ore ?ecision $anagement 'ommittee
$.1$ Organ gram of the SI":

oard of -irector8 This is a board of director of 1> members in the bank. The board of director
is the ape& body of the bank. It appears like this8
Source: Annual Report of SI"
9igure $.1 oard of -irector
1/
5hairman
5hairman
2ice-5hairman
2ice-5hairman
-irectors
-irectors
+anaging -irector
+anaging -irector
Secretar,
Secretar,
Organ gram of SIBL:
!ources+ Annual Beport of !IB"
Figure *.* %rgan gram of !IB"
11
oard of -irector
!hariah Board !ecretary
!ecretary (S2P: ;2P<
4&ecutive 'ommittee
Audit 'ommittee
+anaging -irector
?eputy $anaging
?irector (Business
?eputy $anaging
?irector (%peration
;2P:
S2P
;2P:
S2P
;2P:
S2P
;2P:
S2P
+IS 9A-
I5.- )S -+- I. 1R-
;2P:S2P ;2P A2P
;FC2B?
2P:A2P
I?
2P
"?
S2P
IB$?
2P
'B?
S2P
I''?
$.1% Organi8ation Structure for ranch:
!ources+ Annual Beport of !IB"
Figure *.1 %rganizational structures for Branch
1*
ranch +anager
Investment Bisk
$anagement
?epartment
(In charge of IB$?
Belationship
$anagement
?epartment
(Belationship $anager
Investment
$onitoring)Becovery
?epartment
Investment
Administration Anit
(In charge of IAA Anit
Approval Anit
(Account %fficer
Belationship
%fficer
?isbursement 'ell
(?isbursement
officer
'ompliance 'ell
('ompliance
%fficer
?ocumentation C
'ustodian 'ell
(?ocumentation
%fficers
$.1& -ivision of Social Islami an! "imited:
Information C 'ommunication Technology
?ivision
Financial Administration ?ivision
International ?ivision
$anaging ?irectorIs !ecretariat
Business ?evelopment C $arketing
?ivision
Audit C Inspection ?ivision
'hairmanGs !ecretariat
!hare ?ivision
Board !ecretariat
Duman Besources ?ivision
!hariah Board !ecretariat
!IB" Training Institute
!$4 Banking ?ivision
"aw C Becovery ?ivision
Board Audit 'ell
$I!# 5lanning C Besearch
?ivision
Internal 'ontrol C 'ompliance
?ivision
Investment Bisk $anagement
?ivision
2oluntary Banking ?ivision
!ource+ Annual Beport of !IB"
Table *.* ?ivision of !ocial Islami Bank "imited
Information .echnolog, -ivision
!ocial Islami Bank "td is the pioneer amongst Islami banks in Bangladesh to introduce online
banking facilities from the year *//1. It has been a rapidly growing bank in Bangladesh and in
the last 1 years the bank has grown to a complete figure of 0> (!eventy !i& branches. As the
bank is e&panding this will add a lot of leverage to its e&isting network of branches C customer
base# and will re6uire the bank to become much more dynamic to pursue its goals.
The Interactive "ayer
The Interactive "ayer
The Application "ayer
The Infrastructure
9inancial Administration -ivision =9A-<
The business forecast C monitoring center of the bank# primarily rests with the overall
responsibilities of !trategic Financial 5lanning C %peration 'ontrol# Budget C Budgetary#
Accounting Administration and $I! $anagement# 'apital 5lanning maintenance C protection#
deep scanning C analyzing of socioeconomic factors to protect the bank from any means of
11
illi6uid mishap at any time and to maintain solvency. To bring the ob(ective of FA? into light#
the division is divided into si& following !ection where all related (obs put together under the
different identical desks for widespread functions and day to day operation of the division+
Section 1-udget > udgetar, 5ontrol
Budget $onitoring C Beporting ?esk
Bill 5rocessing C 2ouching ?esk
4&penditure 5rocessing ?esk
Section $-9inancials > 5ontrols
'orporate Income Ta& C 2AT $anagement ?esk
!alary C employee Benefits ?esk
5rovident Fund# Hratuity# !ocial Insurance Fund %peration# $anagement C
Beporting ?esk
Financial !tatements C Beporting ?esk
!oftware %peration ?esk
Heneral "edger $anagement ?esk
Section %-Reconciliation
Beconciliation related data !orting# 5rocessing C Beporting ?esk
Beconciliation# $onitoring# $anagement C Beporting ?esk
Section &-Ris! +anagement
BA!4"8II C !tress Beporting ?esk
$I! and 'asual Beporting ?esk
A"$ (Asset "iability $anagement ?esk
Section *- Regulator, 5ompliance
Beturn !ubmission ?esk
'ompliance ?esk (regular)casual
17
Section /-5apital +ar!et operations and portfolio +anagement
5ortfolio ?esk
!4'Gs 'ompliance ?esk
International -ivision:
International ?ivision deals with (obs relating to bankGs foreign e&change operations#
correspondent banking arrangement# foreign remittance# ;%!TB% Accounts management# F. 4&.
Beconciliation# %BA !upport !ervice# 4?F !ervice# investment line arrangement and
relationship with BAF4?A# Bangladesh Bank and I'' on F. 4&. and international trade issues.
oard Audit -ivision:
Board Audit 'ell was constituted with a view perform the duties in pursuant to the instruction
given by the Board Audit 'ommittee as per guidelines laid down in Bangladesh Bank BB5?
circular ;o. 1* dated *1.1*./*.
Functional)%perational Activities of the Board Audit ?ivision+
'ompliance position of Internal Audit Beports# 3orking 5lan of the Internal Audit
submitted by Dead %ffice# Internal 'ontrol C 'ompliance ?ivision as well as to ensure
compliance of Bangladesh Bank inspection reports and places the above matters to the
meeting Board Audit 'ommittee.
To place before the Audit 'ommittee# the implementation position of the directives of
Bangladesh Bank of monthly process.
To prepare the summary of the reports the e&ternal auditors during finalization of the half
yearly C yearly accounts C to place the same the meeting Board Audit 'ommittee as
directed by the chairman # Board Audit 'ommittee#
To perform specific (ob while the serious type of irregularities are apprehended in any
Branches as directed by the 'hairman# Board Audit 'ommittee.
Investment Ris! +anagement -ivision:
IB$? is trying its best effort to implement the doctrine of Islam in financial C economic sector
to ensure e6uality C (ustice in trade and industry# alleviation of disparity# establishment of socio
1.
economic infrastructure# income generation and creation of employment as well# poverty
alleviation. Investment comprises a very large portion of Banks total activities.
Investment operation of a Bank is as such of vital importance as the ma(or revenue is generated
from it. As such# Bank has to be proactive in managing investment portfolios in order to
minimize possible losses and earn an acceptable level of return for the shareholders.
.his division is comprises in to follo0ing t0o divisions:
a. Investment Approval
b. Investment Administration
Investment Approval:
Investment deals the approval process of all sorts of corporate and retail investment such as
3orking 'apital Finance# Trade Finance C Term Investment. A dedicated approval team is
working continuously for sound investment and to contribute on the growth of the Banks
business.
Investment Administration:
?espite a prudent investment approval process# investment may become trouble. To minimize
investment losses# Investment Administration process is strengthened and procedures and systems
should be in place that provides an early indication of the deteriorating financial health of a
borrower .Investment Administration consists of of e&perienced and skilled officials and
e&ecutives who are working for maintaining the sound investment portfolio.
ranches 5ontrol and )eneral an!ing -ivision:
Branches control C Heneral Banking ?ivision (B'HB? is headed by one 4&ecutive 2ice
5resident (425 having ade6uate e&perienced and trained manpower to handle and supervise the
works of e&isting 0> branches# moreover# 1/ additional new branches are going to be opened
during the year*/1*. The key ob(ective of the division is to assist branches to implement the
directives of Bangladesh Bank and our Bank relating to general banking works.
1uman Resources -ivision
Duman Besources ?ivision plays a very vital part for any organization. !ocial Islami Bank
"imited has also such a division for planning and development of human resources of the Bank.
The Duman Besources ?ivision of the Bank comprises of the following sections+
DB policy !ection
1>
Becruitment and Appointment !ection
Transfer C posting !ection
4mployee welfare !ection
Training C ?evelopment !ection
?isciplinary Action !ection
$iscellaneous !ection
$.1* Products and Services of Social Islami an! "imited:
!ource+ www.sibl.bd.com
Figure *.7 5roducts and !ervices of !ocial Islami Bank "imited+
10
Products > Services
Products > Services
Services
Services
Products
Products
Investment
5roducts
Investment
5roducts
?eposit
5roducts
?eposit
5roducts
48Banking
48Banking
!IB" 'redit
'ard
!IB" 'redit
'ard
$obile
Banking
$obile
Banking
2isa Islamic
'redit 'ard
2isa Islamic
'redit 'ard
Foreign
Bemittance
Foreign
Bemittance
3estern Anion
3estern Anion
$.1/ -ifferent -epartments of Social Islami an!:
!ource+ www.sibl.bd.com
Figure *.. Branch ?epartment of !ocial Islami Bank "imited+
!ource+ www.sibl.bd.com
Figure *.> Dead %ffice ?epartment of !ocial Islami Bank "imited+
1=
Branch ?epartment
Branch ?epartment
Heneral Banking
Heneral Banking
Foreign
4&change
Foreign
4&change
Investment
Investment
'ash
'ash Accounts
Accounts
Dead %ffice ?epartment
Dead %ffice ?epartment
Heneral
Banking
Heneral
Banking
Foreign
4&change
Foreign
4&change
Investment
Investment
'ash
'ash
Account
s
Account
s
FA?
FA?
DB
?
DB
?
I
T
I
T
!ource+ www.sibl.bd.com
Figure *.0 Investment ?epartment of !ocial Islami Bank "imited+
1:
Investment ?epartment
Islamic mode of
Investment
%peration
Betail
Investment
$onitoring
Becovery
Bisk
%peration
$onitoring
Becovery
Bisk
%peration
$onitoring
Becovery
Bisk
Betail
Investment
Part-0%
.heoretical Aspects
*/
%.1 Investment:
Investment is the purchase of a financial product of other items of value with an e&pectation of
favorable future returns. In general sense# the formation of new and productive capital or in the
form of new construction# plant and e6uipment. Investment generates physical assets.
There are different modes of Investment. They are given below+8
a $usharaka
b $urabaha ('ontract !ale
c Bai8$ua((al (!ales under deferred payment
d Bai8 !alam (Advanced 5urchase
e Bai8 Istisna
f Dire 5urchase under !hirkatul $eelk (D5!$
%.$ +odes of Investment:
3e see some modes of investment. ;ow# I discuss briefly.
a< +ushara!a =Partnership Profit Sharing<:
$usharaka is type of financing mechanism used by Islamic Banks. This mode of finance is
represented by two or more financiers in contributions of e6ual or une6ual ratios of capital to
establish a new pro(ect or to participate in an established one and all partners are entitled to share
the total profits of the venture according to ratio as mutually agreed upon allowing for managerial
skills to be remuneratedL but the losses are shared e&actly in proportion to capital proportion.
'< +ura'aha =5ontract Sale<:
$urabaha is one of the most widely used modes of finance undertaken by the Islamic Banks.
About 0/ to =/ percent of financial operations of the most Islamic Bank belong to this segment. It
is suitable for investment for financing industry# agriculture# trade or any other sectors. It enables
the client) investor to obtain finished goods# raw materials# machinery or e6uipment from the
local market or through import by opening letter of credit under $urabaha commercial.

c< ai-+ua((al:
*1
Bai8$au((al is a contract between Buyer and !eller under which the seller sells certain specific
goods ( permissible under !hariah and "aw of the country to the Buyer at an agreed fi&ed price
payable at a certain fi&ed future date in lump sum or within a fi&ed period by fi&ed installments.

d< ai-Salam =Advance Sale And Purchase<:
Bai8!alam may be defined as a contract between a Buyer and a !eller under which the seller sells
in advance the certain commodities) products permissible under Islamic !hariah to the Buyer at
an agreed price payable on e&ecution of the said contract and the commodities)products are
delivered as per specification# size# 6uality# 6uantity at a future time in a particular place.
e< ai Istisna:
The ma(ority of the (uries consider as one of the division of Bai8 !alam. Therefore# it
should be treated under the definition of Bai8 !alam. But the Danafi !chool Fi6h declares
Istisna an independent and separate contract.
f< 1ire Purchase under Shir!atul +eel!:
Dire purchase !hirkatul $eelk is a special type of contract that has been developed through
practice. !hirkatul $eelk means share in ownership.
%.%-Status of Investment:-
?nclassified:
These are the investment with which the bank is satisfied about their repayment.
5lassified:
These are loans which the bank finds overdue after the due date. The bank used to predefine
policy and procedures later loan becomes classified.
Su'-Standard:
If the loan is not repaid or reschedule within the !$A (!pecial $ention Account period# it
becomes !ub8!tandard loan. In this investment the loan treated as default. The interest treated as
the same thing of investment.
-ou'tful:
If the loan is not repaid or reschedule within the sub8standard period than this loan treated as
?oubtful loan. Interest will be treated as before in this stage.
**
ad-loss: If the loan is not paid on doubtful stage than it treated as a bad8loss. !erious doubts
e&its as to the recovery of such loans.
Part-0&
Investment Activities of Social Islami
an! "imited
*1
&.1 Investment:
Investment is the commitment of a personIs funds to derive future income in the forms of interest#
dividend# premiums# pension benefit or appreciation in the value of their capital. An investment is
the purchase of goods that are not consumed today but are used in the future to create wealth.
&.$ Investment +anagement of Social Islami an!:
Investment $anagement is the process of planning# organizing# monitoring# supervising and
follow8up to their bottom line. In general# investment is the current commitment of dollar for a
period of time in order to derive future payment that will compensate the investor for (1 the time
the funds are committed (* the e&pected rate of profit. Investment management is the dynamic
fields where a standard of long range planning needed to allocation the fund in diverse field and
to minimize the risk and ma&imize the return on invested fund. Therefore# 3hen analyzing the
investment management of social Islami Bank "imited# it is instruct to analyze its investment
policy# procedures and value of investment portfolio.
&.% Investment Polic, of SI":
!IB" will follow !hariah principles strictly while making investment decision# as it is a
!harahi based 'ommercial Bank.
!IB" will follow the principles of participatory economy with a human approach for
investment and banking of interest free basis with a view to empowering the family as the
basic social unit.
The sector) proposal# which have a scope of empowering the family# will get preference.
To promote new entrepreneurs !IB" will go for financing under $urabaha and
$usharaka.
Investment to trade and commerce sector.
Investment to foreign trade (import and e&port.
!IB" will go for investment in following industrial sector considering the national
priority and risk factors+
*7
o 'ottage Industry
o Agro8based# agro processing and agro supportive industries.
o Fish canning# freezing and preservation units
o "eather and leather products.
o 5aper# paper products and printing and Te&tile linkage industries.
&.& Investment Process:
Application stage:
At this stage# the bank will collect necessary information about the perspective client. ?ocuments
that are necessary for getting investment of !IB" are prescribed below+
Trade "icense 5hotocopy.
Attested copy of partnership deed.
5rior three yearsI audited balance sheet.
5rior three yearsI business transactions statement.
Attested copy of $emorandum of Association ($%A and Articles of Association
(A%A for the (oint stock company.
Attested copy of TI;.
?etailed summary of the sundry debtors and creditors.
!ummary of the personal movable and immovable assets.
Appraisal Stage:
At this stage the bank evaluates the client and his)her business. It is the most important stage.
Dowever# the contents are presented below+
'ompanyIs ) 'lient information.
%wnerIs information.
"ist of 5artners)?irectors.
Business ) Industry Analysis.
3orking 'apital Assessment.
Bisk Hrade.
Insurance 'overage.
*.
Audit %bservation and !ecurity Analysis.
Sanctioning Stage:
At this stage# the bank officially approves the investment proposal of the respective client. The
following elements are given below+
Investment limit in million.
$ode and Amount of investment.
5urpose and period of investment.
Bate of Beturn
!ecurity.
-ocumentation Stage:
At this stage# the bank usually analyze the re6uired documents are in order. The following
documents of the client are presented below+
Ta& 5ayment 'ertificate and 2AT certificate.
!tock Beport.
Trade license.
"iability statement of other parties.
Three years net income.
5articulars of the proposal and properties.
'lient Information Beport ('IB.
-is'ursement Stage:
At this stage# bank decides to pay out money. Dere# the client gets his)her desired fund. The
important thing is that the client has to show his)her plan site.
Recover, Stage:
It is the final stage of investment processing of the !ocial Islami Bank Bangladesh "imitedL bank
will contract with the client continuously. If the bank feels that anything is going wrong than it
tries to recover its investment fund from the client.
&.* Investment Principle of Social Islami an!:
Investment principle is the important things of !ocial Islami Bank. In the competitive world# the
entire competitor has to fight strongly with other competitor. 4very business fight for higher
*>
return but return is uncertain. They use different kind of mechanism that would be their main
shield. Dowever# investment principle acts as a fundamental truth or proposition serving as the
foundation for action. There have some principle of !ocial Islami Bank "imited. These are given
below8
!ource+ Annual Beport of !IB"
Figure 7.1 5rinciple of !IB"
1onest,-
The 6uality of the products and service are being honest.
.ransparenc,8
It means that the !IB" give a positive transparent of any items that customer need.
;fficienc,8
The ratio of the useful work performed by a process to the total energy e&pended.
Accounta'ilit,8
*0
5rinciples of !IB"
Donesty
Transparency
Accountability
4fficiency
Beliability
Innovation
Technology
!ecurity
Fle&ibility
It means that e&plicable to the customer. If the customer does not understand the account
they would not to be encouraged to take the services.
Relia'ilit,8
If the banks fail to keeps relation perfectly with their customer than the customer do not
belief the banks. This principle helps to keep relied on the bank.
Innovation8
The main things of this principle are to change something established by introducing new
methods# ideas product and services. ?ay by day !IB" give new product for customer
services.
9le@i'ilit,8
!IB" uses the fle&ibility as capable of bending easily without breaking rules. !IB"
provides varies of product and service with patience.
Securit,8
!IB" is very secure for the customer from other bank. I have already complete internee
program and I heard our past internship student.
.echnolog,8
Technology is the application of scientific knowledge that helps to perform the work very
efficiently. 3ithout technology our company will breakdown or hampered. !IB" bring new
technology day by day.
&./ +odes of Investment of SI":
+usha!ara-
This mode of finance is represented by two or more financiers in contributions of e6ual or
une6ual ratios of capital to establish a new pro(ect or to participate in an established one and all
partners are entitled to share the total profits of the venture according to ratio as mutually agreed
upon allowing for managerial skills to be remuneratedL but the losses are shared e&actly in
proportion to capital proportion.
There are two types of $usharaka contracts+
'onstant (permanent
*=
?ecreasing (diminishing 5articipation.
Important 9eatures:
The bank is not guaranteed a fi&ed return on its participation.
Banks benefits in financing fi&ed assets or working capital or both lie in the profit
sharing scheme between the banks and venture.
5rofits are shared pro8rata with e6uity and are calculated for this purpose# after
allowing for management fees and before depreciation and provisions# as non8cash8
items
+ura'aha-
It is suitable for investment for financing industry# agriculture# trade or any other sectors. It
enables the client) investor to obtain finished goods# raw materials# machinery or e6uipment from
the local market or through import by opening letter of credit under $urabaha. $urabaha is one
kid of sale transaction. Ander this system of investment# a sale transaction is taken place between
client and bank. $urabaha sale is also one kind of absolute sale# which is divided into four kinds
in respect of price. These are given below+
argain Sale: !elling of commodity at a price already agreed upon irrespective of
its purchased price.
.a0lia Sale =respective Sale<: !elling the commodity at purchased price without
any additional or discount.
-iscount Sale: !elling the commodity at a purchased price allowing certain
discount.
+ura'aha Sale: !elling a commodity at a purchased price plus certain profit as
agreed upon. This profit margin may be determined on a percentage of the purchased
price or a lump sum as agrees to. The last three sales are called+ Amana (honesty
!ales-
1ire Purchase under Shir!atul +eel!:
Dire purchase under !hirkatul $eelk is a special type of contract that has been developed through
practice. Actually# it is a composition of three contracts+
*:
Shir!at: !hirkat means partnership. !hirkatul $eelk means share in ownership.
3hen two or more persons supply e6uity# purchase an asset# own the same (ointly
and share the benefit as per agreement and bear the loss in proportion to their
respective e6uity# the contract is called !hirkatul $eelk contract.
I(arah ="easing<: The I(arah financing under Islamic !hariah is akin to the western
concept of leasing. In I(arah financing# Islamic banks finance capital goods to
industrial pro(ect against payment of a rent by installment.
Operational "ease: Ander this system of finance# Islamic Banks hold a number of
various assets to respond to the needs of different customers. These assets have
usually high degree of marketability.
ai-Salam =Advance Sale and Purchase<:
Ander this transaction the cost of commodity is advanced in cash to the seller who agrees to
believer the commodity on a definite due date. The delivery of the commodity sold is deferred but
the payment of the price is immediate.
Important Features+
Bai8!alam is a mode of investment allows by Islamic !hariah in which commodities)
products can be sold without having the said commodities) products either in e&istence or
physical) constructive possession of the seller.
It is permissible to obtain collateral security from the seller client to secured the
investment from any hazards viz.# non8supply) partial supply of commodities) products#
supply of low 6uality commodities) products etc.
It is permissible to obtain mortgage and ) or personal guarantee from a third party as
security before signing of the agreement or at the time of signing the agreement.
The seller client may be made agent of the bank to sell the goods delivered to the bank by
him provided a separate agency agreement is e&ecuted between the bank and the client.
ai-+ua((al:
In bank# Bai8$ua((al is treated as a contract between the bank and the client under which the bank
sells to the client certain specific goods# purchased as per order and specification of the client at
an agreed price payable within a fi&ed future date lump sum or by installment.
ai-Istisna:
1/
It is a contract with a manufacturer to make something and it is a contract on a
commodity on liability with the stipulation of work.
Ander this contract# the first parties agree to contract) manufacturer particular products
and deliver it to second party against a predetermined price. The price may not be
re6uired to pay in advance. It may be paid in installments# or can even be deferred until
the desired product is delivered.
Part -0*
Anal,sis

11
*.1 Anal,sis of Investment activities of Social Islami an! "imited:
In %rder to analyze the investment activities of !IB"# Trend analysis is used. Trend of deposit#
investment# mode wise and sector wise investment# and trend of other investment related aspects
are analyzed in this study.
*.$ Aear Bise -eposit of Social Islami an! "imited:
?eposit is the blood of a bank. Bank 'ollects deposit at lower profit and makes investment at a
higher profit. Therefore in analyzing the investment activities of a bank it is essential to know the
deposit performance of the bank.
0
10000
20000
30000
40000
50000
60000
70000
80000
2007 2008 2009 2010 2011
Deposit

(In Million Taka)

Year
Trend of Deposit from 2007-2011
Trend of Deposit from
2007-2011
!ource+ Annual report of !IB"
Figure ..1 Trend of ?eposit from *//08*/11
1*
Interpretation: The above graph shows an upward trend in total deposit mobilization of social
Islami Bank "imited from *//0 to */11. From *//08*/11 the total deposit of social Islami Bank
was increased. In *//0 the total deposit was 1::.1.1/ million but in */11 it was .1:/=..=
million. It was possible due to the superior customer service delivery at the branch level and
e&pansion of branches in the urban areas.
*.% Investment to -eposit Ratio:
Investment to ?eposit BatioMTotal Investment)Total ?eposit

Table ..18Investment to ?eposit Batio

84.00%
86.00%
88.00%
90.00%
92.00%
94.00%
96.00%
98.00%
2007 2008 2009 2010 2011
Investment to Deposit Ratio

Year
Investment to Deposit Ratio
Invest ment t o Deposit
Ratio
Aear Investment to -eposit Ratio
$003 44.%4C
$004 60.&$C
$006 6/.04C
$010 6$.04C
$011 6&./*C
11
!ource+ Annual Beport of !IB"
Figure ..* Investments to ?eposit Batio
Interpretation: From the figure it is seen that the investment to deposit ratio was fluctuating.
Investment to deposit ratio of !IB" in *//0 was ==.1=N# in *//= was :/.7*N and in *//: was
:>./=N but in */1/ it was decreased at :*./=N. It became increased in */11 at :7.>.N.3e know
that the greater this ratio increase the li6uidity risk of the firm.
*.& Aear Bise Investment of Social Islami an! "imited:
Year Total Investment
(In Million TK)
Grot! Rate
2007 16440.26 7"#$%
200& 19951.30 21"#'%
200( 26580.58 ##"2#%
2010 36680.28 #&"00%
2011 '#(0&"'& )$"(7%
!ource+ Annual report of !IB".
Table ..* Oear wise Investment of !ocial Islami Bank "imited
Figure ..1 Trend of Investment from *//08*/11of !IB"
17
Figure ..7 Trend Hrowth Bate of Investment from *//08*/11
Interpretation: The above graphs show an upward trend of investment and growth rate of
investment of !IB". The amount of investment was 1>77/.*> $illion T< in *//0 and .1:/=..=
$illion T< in */11.This is good sign for the bank# if this investment can be recovered properly.
*.* +ode 0ise Investment Portfolio of SI" in $011:
The !IB" uses different mode to make its investment. The different modes used by the !IB" in
*/11 are showing below.
S" +odes of Investment $011= .a!a in
+illion<
=C<of
Investment
1 $usharaka 1:1.10 /.0*:N
$ $urabaha *=:=.=: ..1=N
% Bai8$uazzal *=>11.:1 .1.11N
& Dire85urchase !irkatul $eelk 11==:.17 **./.N
* Euard 7.*=.*= =.7/N
/ I(arah 1.1.>71 /.*=N
3 %thers ..*:.*= 1/./.N
.otal *%604.*4 100C

!ource+ Annual Beport of !IB"
Table ..1 $ode wise Investment in !ocial Islami Bank "imited
1.
0.73% 5.38%
53.11%
22.05%
8.40%
0.28%
10.05%
Investment *ortfolio of 2011
!s"ara#a
!ra$a"a
%ai-!a&&a'
(ire-)!r*"ase +ir#at!'
ee'#
,!ard
I-ara"
.t"ers
Figure ... Investment 5ortfolios in */11
Interpretation: The above graph shows that investment portfolio of !ocial Islami Bank
"imited in */11. The highest percentage of investment was made in Bai8$uazzal mode and !IB"
invested .1.11N of its total investment in this mode. The !IB" made **./.N of its investment in
Dire 5urchase !irkatul $eelk. $urabaha and Euard mode respectively represent ..1=N and
=.7/N of total investment.
*./ .rend of different modes 0ise investment:
a< +ura'aha+ $urabaha is one of the most well known investments permissible under Islamic
!hariah and widely used by all countries where Islamic systems of banking are functioning.
$urabaha finance combines financial e&perience with business e&perience.
Year +mo,nt of Investment Grot! Rate
200& 2097.67 (7"&2)%
200( 2650.10 2$"##%
2010 2942.14 11"02%
2011 2&(&"&& (1")7)%
Table ..7 Investment of !IB" in $urabaha
1>
!ource+ Annual Beport of !IB"
Figure ..> Investment of !IB" in $urabaha
Figure ..0 Hrowth Bate of Investment of !IB" in $urabaha
Interpretation: Though there is an upward trend in investment in $urabaha mode# growth rate
of investment in this mode is not upward. Hrowth rate in *//= and */11 are negatives though
growth rate were positive in *//: and */1/.
'< +ushara!a: $usharaka is another type of financing mechanism used by Islamic Banks.
This mode of finance is represented by two or more financiers in contributions of e6ual or
une6ual ratios of capital to establish a new pro(ect or to participate in an established one and all
partners.
Year +mo,nt of Investment Grot! Rate
200& 235.42 22"$#%
200( 302.44 2&")$%
2010 335.19 10"&2%
2011 #(#"#7 17"#$%
!ource+ Annual Beport of !IB"
Table ... Investment of !IB" in $usharaka
10
Figure ..= Investment of !IB" in $usharaka
Figure ..: Hrowth rate of Investment of !IB" in $usharaka
Interpretation: The above graphs show the trend of Investment in $usharaka mode and
growth rate of investment in this mode of !ocial Islami Bank "imited from *//=8*/11. There
was an upward trend of investment but growth rate of $usharaka mode was fluctuating. In *//=
the growth rate of this mode was **.>1N and in *//: it was *=.7>N but in */1/ and */11 it was
decreased.
c< ai-+ua88al: Bai8$ua((al is a contract between Buyer and !eller under which the seller sells
certain specific goods ( permissible under !hariah and "aw of the country # to the Buyer at an
agreed fi&ed price payable at a certain fi&ed future date in lump sum or within a fi&ed period by
fi&ed installments.
Year +mo,nt of Investment Grot! Rate
200& 6913.01 2#"1&%
200( 10787.90 '$"0'%
2010 16669.79 ')"'2%
2011 2&$#1"(1 71"7'%
!ource+ Annual Beport of !IB"
1=
Table ..> Investment of !IB" in Bai8$uazzal
[
Figure ..1/ Investment of !IB" in Bai8$ua((al
Figure ..11 Hrowth rate of Investment of !IB" in Bai8$ua((al
Interpretation: The above graphs show the trend of Investment in Bai8$ua((al mode and
growth rate of investment in this mode of !ocial Islami Bank "imited from *//=8*/11. There
was an upward trend of investment but growth rate of Bai8$ua((al mode was fluctuating. In *//=
to *//: the growth rate of this mode was respectively *1.1=N and .>./.N. But in */1/ it was
decreased.
d< 1ire-Purchase under Sir!atul +eel!: Dire purchase under !hirkatul $eelk is a special
type of contract that has been developed through practice
Year +mo,nt of Investment Grot! Rate
200& 5431.47 1'"))%
200( 6542.97 20")$%
2010 7462.75 1)"0'%
2011 11&&("1) '("#1%

!ource+ Annual Beport of !IB"
Table ..0 Investment of !IB" in Dire85urchase under !irkatul $eelk
1:
Figure ..1* Investment of !IB" in D5!$

Figure ..11 Hrowth rate of Investment of !IB" in D5!$
Interpretation: There was an upward trend of investment but growth rate of D5!$ mode was
fluctuating. In *//= to *//: the growth rate of this mode was respectively 1..77N and */.7>N.
But in */1/ it was decreased at 17./.N and it was increased in */11.
7/
e< Duard: Funds advanced by Islamic Bank under Euard Dasana are for humanitarian and
welfare. Dowever# parties differ in this respect. The purpose of these loans is to help the needy
society to become independent as to raise their income and standard of living with the passage of
time.
!ource+ Annual Beport of !IB"
Table ..= Investment of !IB" in Euard
Figure ..17 Investment of !IB" in Euard
Figure ..1. Hrowth Bate of Investment of !IB" in Euard
Year +mo,nt of Investment Grot! Rate
200& $'1"'0 #("2&%
200( 1&07"(' 11"70%
2010 2&2$"0' '$"#1%
2011 )'2&"2& $0"2#%
71
Interpretation: The above graphs show that investment of Euard mode is an upward trend but
its growth rate is fluctuating. In *//0# its growth rate of Euard was 1:.*=N but in *//=# its
growth rate of Euard was 11.0/N.
*.3 Sector Bise Investment Portfolio of SI" in $011:
S" Sector Bise Investment $011
1 'ommercial "ending %$.0$C
$ 4&port Financing 4.$3C
% Douse Building Investment &./&C
& $icro Investment 0.0%C
* !taff investment 1*.&$C
/ Te&tile Industries 6.6&C
3 'onsumer Investment !cheme 3.&3C
4 Food and Allied Industries %.14C
6 Agricultural Industries $.$&C
10 'onstruction Industries %.%1C
11 %ther Investment 1%.&4C
.otal 100C
!ource+ Annual Beport of !IB"
Table ..: !ector 3ise Investment 5ortfolio of !IB"
32.02%
8.27%
4.64%
0.03
15.42%
9.94%
7.47%
3.18%
2.24%
3.31%
13.48%
-e.tor /ise Investment in 2011
/ommer*ia' 0endin1
23port 4inan*in1
(o!se %!i'din1 Investment
i*ro Invest ment
+taff investment
Te3t i'e Ind!st ries
/ons!mer Invest ment +*"eme
4ood and 5''ied Ind!st ries
51ri*!'t!ra' Ind!st ries
/onst r!*tion Ind!stries
.t "er Invest ment
Figure ..1> !ector 3ise Investment 5ortfolio of !ocial Islami Bank "imited
7*
Interpretation: The figure shows that !ocial Islami Bank provides 1*./*N investment in
'ommercial "ending whereas they disburse :.:7N in Te&tile industries# 1..7*N in !taff
investment# and =.*0N in 4&port financing.
*.4 .rend of -ifferent Sector Bise Investment of SI":
a< 5ommercial "ending:
Aear Percentage of .otal Investment
$004 14.00C
$006 $*./$C
$010 $3.3$C
$011 %$.0$C
!ource+ Annual Beport of !IB"
Table ..1/ 'ommercial "ending Investment

Figure ..10 'ommercial "ending of !ocial Islami Bank "imited
Interpretation: The graph shows an increasing trend of investment of !ocial Islami Bank
"imited in 'ommercial "ending. This indicates that !IB" has increased its investment in
commercial lending.
71
'< Staff investment:
Aear Percentage of .otal investment
$004 4./4C
$006 1&.4*C
$010 1$.6/C
$011 1*.&$C
!ource+ Annual Beport of !IB"
Table ..11 !taff Investment of !IB"
Figure ..1= !taff Investment of !ocial Islami Bank "imited
Interpretation: The graph shows that !taff investment of social Islami Bank from *//= to */11
was fluctuating. 5ercentage of staff investment was respectively =.>=N and 17.=.N in *//= and
*//: but in */1/ it was decreased at 1*.:>N.It has increased at 1..7*N in */11.

77
c< 1ouse uilding and 5onstruction Industries:
Aear Percentage of .otal Investment
$004 1%.0%C
$006 1&.&6C
$010 1*.&C
$011 3.6*C
!ource+ Annual Beport of !IB"
Table ..1* Douse Building and 'onstruction Industries of !IB"

Figure ..1: Douse Building and 'onstruction Industries of !ocial Islami Bank
Interpretation: The graph shows that from *//=8*/1/ its investment was increased
from17.7:N to 1..7/N. But in */11 its investment was decreased at 0.:.N. There is a
fluctuating trend of investment of !IB" in Douse Building and 'onstruction.
7.
d< Agricultural and 9ood Industries:
Aear Percentage of .otal Investment
$004 &.04C
$006 *.&$C
$010 /.1$C
$011 1&.%3C
!ource+ Annual Beport of !IB"
P
Table ..11 Agricultural and Food Industries of !IB"
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2008 2009 2010 2011
+0ri.,lt,ral 1 2ood Ind,stries


Year
Investment in +0ri.,lt,ral and 2ood Ind,stries
51ri*!'t !ra' and 4ood
Ind!stries
Figure ..*/ Agricultural and Food Industries of !ocial Islami Bank
Interpretation: This is upward trend of investment in Agricultural and Food Industries of
!IB". The percentage of total investment in Agricultural and Food industries was increased from
*//0 to */11. Bank should try to continue this investment.
7>
*.6 )eographical "ocation-0ise Investment Portfolio of SI" in $011:
Division In Million Taka *er.enta0e
D!aka 37100.28 68.82%
3!itta0on0 11592.34 21.50%
-4l!et 251.25 0.47%
Ra5s!a!i 2814.04 5.22%
K!,lna 1904.80 3.53%
Ran0p,r 245.250 0.45%
6arisal 0.604775 0.001%
Total 53908.58 100.00%
!ource+ Annual Beport of !IB" in */11
Table ..17 Heographical "ocation8wise Investment 5ortfolio of !IB" in */11
68.82%
21.50%
0.47%
5.22%
3.53%
0.45%
0.001%
Geo0rap!i.al 7o.ation-ise Investment
D"a#a
/"it ta1on1
+6'"et
Ra-s"a"i
7"!'na
Ran1p!r
%arisa'
Figure ..*1 Heographical Investment of !IB" in */11
Interpretation: The above figure shows that !ocial Islami Bank "imited distributes a large
portion of fund in ?haka division. In ?haka division the bank invest near about >=.=*N where
bank distributed *1../N in 'hittagong division and ..**N in B?. It has been viewed that only
/.//1N of their geographical credit distribution goes to Barisal and /.7.N in Bangpur.
70
*.10 5lassified Investment:
In $illion Taka
Aear $003 $004 $006 $010 $011
5lassified
Investment
411.06 43%./4 4&4.6& 13&*.*3 $11/.1%
!ource+ Annual Beport of !IB"
Table ..1. 'lassified Investment of !IB"
0
500
1000
1500
2000
2500
2007 2008 2009 2010 2011
3lassified Investement

(In Million Taka)

Year
Year /ise 3lassified Investment
8ear 9ise /'assified
Invest ment
Figure ..** Amount of 'lassified Investment in !ocial Islami Bank
Interpretation: Above graph shows the total classified investment of !ocial Islami Bank
limited from *//= to */11. The graph shows increasing trend of classified investment. This
upward trend of classified investment is not good for the company.
7=
*.11 5lassified Investment as percentage of .otal Investment:
Aear $003 $004 $006 $010 $011
5lassified
Investment
as C of total
investment
&.6%C &.%4C %.16C &.3/C %.6%C
!ource+ Annual Beport of !IB"
Table ..1> 'lassified Investment as N Total Investment of !IB"

0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2007 2008 2009 2010 2011
3lassified Investment


Year
Year /ise 3lassified Investment as % of Total Investment
8ear 9ise /'assified
Invest ment as % of
Tota' Investment

Figure ..*1 'lassified Investments as N of Total Investment in !ocial Islami Bank "imited
Interpretation: From above the graph it is seen that the classified investment as percentage of
total investment !ocial Islami Bank was fluctuating year by year. From *//0 to *//: was
decreased. In */1/# as percentage of classified investment is highest at 7.0>N.This indicates that
the bank has decreased its efficiency in managing its investment# which is unfavorable for the
bank.
7:
*.1$ ad "oss as percentage of 5lassified Investment:
Aear $003 $004 $006 $010 $011
ad "oss
as C
5lassified
investment
1.10C 1.14C $.13C %.00C %./3C
!ource+ Annual Beport of !IB"
Table ..10 Bad "oss as N of 'lassified Investment of !IB"
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
2007 2008 2009 2010 2011
6ad 7oss as % of 3lassified
Investment


Year
Year /ise 6ad 7oss as % of 3lassified Investment
8ear 9ise %ad 0oss as
% of /'assified
Invest ment
Figure ..*7 Bad "oss as N of 'lassified Investment in !ocial Islami Bank "imited
Interpretation: This indicates that the portion of Bad loss out of the classified investment has
increased year by year. This upward trend of Bad "oss as a percentage of classified investment is
not good for the bank. This indicates that BankIs efficiencies in recovering classified investment
has reduced.
./
*.1% Provision against 5lassified Investment of SI":
In $illion Taka
Aear $003 $004 $006 $010 $011
Amount of
Provision
1$/.4*/ $64.$3/ $/6.&%* &43.&6$ /61.6&3
!ource+ Annual Beport of !IB"
Table ..1= 5rovision against 'lassified Investment of !IB"

0
100
200
300
400
500
600
700
800
2007 2008 2009 2010 2011
*rovision +0ainst 3lassified
Investment (Million Taka)

Year
+mo,nt of *rovision +0ainst 3lassified
Investment in -I67
5mo!nt of )rovision
51ainst /'assified
Invest ment i n +I%0
Figure ..*. Amount of 5rovision against 'lassified Investment of !ocial Islami Bank "imited
Interpretation: This is an upward trend in provision against classified investment e&cept in
*//:. In *//= it was T< 1*>.=.> million and it end of */11 it become T< >:1.:70 million. This
is not good for the company.
.1
*.1& Return on Investment:
Aear SI"
$003 1$.%1C
$004 1%.00C
$006 11.0&C
$010 10.00C
$011 1$.00C
!ource+ Annual Beport of !IB"
Table ..1: Beturn on Investment of !IB"
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2007 2008 2009 2010 2011
Ret,rn on Investment


Year
Ret,rn on Investment of -I67
Ret!rn on
Invest ment of +I%0
Figure ..*> Beturn on Investment of !ocial Islami Bank "imited
Interpretation: The above graph shows that of Beturn on Investment of !ocial Islami Bank
from *//0 to */11 have in a fluctuating situation. In *//0 and *//= the return on investment was
respectively 1*.11N and 11.//N# but in *//: and */1/ it has decreased and it has slightly
increased in */11.
.*
Part -0/
9indingsE 5onclusion
And
Recommendation
.1
/.1 +a(or 9indings:
The analysis of investment activities of !ocial Islami Bank "imited reveals the following ma(or
findings.
This is an upward trend in total deposit mobilization of !IB" over the years.
Investment of !ocial Islami bank is increasing year by year. It carries positive sign for the
company if the investment can be recovered properly.
This is an upward trend in investment in $uharaba# $ushkaraha# and Dire85urchase
!irkatul $eelk mode though growth rate of investment in these modes is fluctuating.
This is an increasing trend of investment in 'ommercial "ending# Agricultural and Food
Industries. But investment in $icro sector is very insignificant.
!ocial Islami Bank "imited distributes a large portion of fund in ?haka division. But they
invested very insignificant amount fund in Barisal and Bangpur in */11.
Trend of bad loss as percentage of classified investment in increasing though classified
Investment as percentage of total investment of the bank is fluctuating over the years.
This is an upward trend in provision against classified investment e&cept in *//:.
The return on investment of !ocial Islami Bank "imited from *//:8*/1/ have in a
fluctuated situation.
.7
/.$ 5onclusion:
Banking sector is the chief financial intermediary in a country. It is very challenging institution
and in age of globalization and free trade# the process and the system of running a bank is
changing. !ocial Islami Bank already managed itself with this changing environment. The bank
strategies are clear and concise. Their return is pretty good. If the bank goes this way# one can
e&pect that in near future !ocial Islami Bank may become one of the top performers.
!ocial Islami Bank "td. is a non government commercial bank in Bangladesh# which was started
its business from 1::.. In order to have an insight into how effective it is doing its investment
activities# this study is conducted. The study reveals that there is an upward trend in its deposit#
investment. Dowever there has fluctuating trend in classified investment# provision against
classified investment# return on investment and increasing trend in bad loss as percentage of
classified investment. Therefore# bank should concentrate on recovery process in order to reduce
its bad loss and provision against classified investment.
From the discussion it can be concluded that !ocial Islami Bank playing an important role in the
economic development of the country and it has a prospect to hold a leading position in the
banking sector. It should increase promotional activities to reach to the people easily and it
should perform its investment activities in most effecting manner. Thereby it can play a leading
role in the banking sector in Bangladesh.
..
/.% Recommendation:
The ma(or findings from the analysis investment activities of !IB" re6uire the following
recommendations that may help the !IB" to improve its investment performance and to be a key
member in the banking sector of Bangladesh.
The deposit mobilization of !IB" has increased over the years. Bank should develop new
savings instruments to maintain and improve its deposit mobilization rate.
The Investment of !ocial Islami bank is increasing year by year. Bank should try to
improve this investment trends by enlarging its investment sector giving special attention
to the recovery of loan.

There is an upward trend in investment in Bai8$uazzal# Dire85urchase !irkatul $eelk#
$uharaba# and $ushkaraha. Bank should concentrate on other modes also.
Bank should concentrate more on $icro Finance because most of people are poor. If they
get this opportunity they can easily maintain their livelihood.
!ocial Islami Bank limited is focusing more on ?haka division to provide investment
facilities and bank should continue this investment. Bank should concentrate on other
divisions also to increase their investment.
To reduce the increasing trend in Bad loss as a percentage of classified investment#
proper and effective monitoring system should be developed.
Bank should follow accurate !hariah based policy. In our country# it is 6uite difficult but
they should overcome it.
Bank should strictly follow the principles of sound investment.

.>
i'liograph,
Be'site:
000.infoFsi'l.'d.com
333.!IB"B?.'%$
Articles:
Banking $anuals of !IB".
Annual Report:
Annual Beport of !IB" */11
Annual Beport of !IB" *//=# */1/
.0
Anne&ure
.=