Analysis of Green Banking Activities of Islami Bank Bangladesh

Limited - A Study on Bangshal Branch

Prepared By
Sheikh Mohammad Sagor Ahmmed
ID: BBA 120104467
Email: [email protected]
Department of Business Administration
Northern University Bangladesh

Supervised By
Farhana Rob Shampa
Senior Lecturer in Finance
Department of Business Administration
Northern University Bangladesh

Submitted To:
Department of Business Administration
Northern University Bangladesh

16th January, 2016

Analysis of Green Banking Activities of Islami Bank Bangladesh

Limited - A Study on Bangshal Branch

16th January, 2016

Declaration

I do hereby solemnly declare that the work presented in this dissertation report has been carried
out by me and has not been previously submitted to any other University/College/Organization
for an academic qualification/certificate diploma or degree.
The work I have presented does not breach any existing copyright and no portion of this report is
copied from any work done earlier for a degree or otherwise.
I further undertake to indemnify the department against any loss or damage arising from breach
of the forgoing obligations.

.
Sheikh Mohammad Sagor Ahmmed
ID-BBA 120104467
Major: Finance
E-mail: [email protected]
Department of Business Administration
Northern University Bangladesh

Certificate

This is to certify that this report entitled Analysis of Green Banking Activities of

Islami Bank Bangladesh Limited- A Study on Bangshal Branch submitted to

Northern University Bangladesh, in connection with the institutions internship program
is a bona fide record of work done by Sheikh Mohammad Sagor Ahmmed under my
supervision at the Islami Bank Bangladesh Ltd. from 4th October, 2015 to 30th

November, 2015.

....

..

Supervisor

Professor Mustafa Kamal

Farhana Rob Shampa

Dean

Senior Lecturer in Finance

Faculty of Business

Department of Business Administration

Department of Business Administration

Northern University Bangladesh

Northern University Bangladesh

ii

Internship Certificate

iii

Acknowledgment

At the very beginning, I would like to express my deepest gratitude to the Almighty Allah for
giving me the ability and the strength to finish the task successfully within the scheduled time.
This report Analysis of Green Banking Activities of Islami Bank Bangladesh Limited- A
Study on Bangshal Branch has been prepared to fulfill the requirement of BBA degree. I am
very much fortunate that I have received sincere guidance, supervision and co-operation from
various persons.
I would like to express my heartiest gratitude to my supervisor, Farhana Rob Shampa, Senior
Lecturer in Finance, Department of Business Administration of Northern University Bangladesh,
(NUB), for her continuous guidance, encouragement, and patience, and for giving me the
opportunity to do this work. Her valuable suggestions and strict guidance made it possible
to prepare a well-organized report.
I am also indebted to Mr. A.K.M. Shahidul Haque Khandaker (SVP), Mr. Md. Mijanur Rahman
(AVP), Mr. Md. Jafar Ahmad, Mr. Md. Abdum Nayeem Belal, Mr. Md. Belayet Hossain and all
staff of Islami Bank Bangladesh Limited who kindly spared for me much of their precious time
in giving me support and information. During the internship I was treated so cordially by the
Islami Bank Bangladesh Limited officials and staffs that I feel the office like my second home.
Finally, my deepest gratitude and love to my parents for their support, encouragement, and
endless love.

Sheikh Mohammad Sagor Ahmmed

iv

List of Abbreviations

Short forms

Abbreviations

AD

Authorized Dealer

ADC

Alternative Delivery Channel

ATM

Automated Tailor Machine

AVP

Assistant Vice President

AWCA

Al-Wadiah Current Account

BB

Bangladesh Bank

BACH

Bangladesh Automated Clearing House

BACPS

Bangladesh Automated Cheques and Processing systems

BBTA

Bangladesh Bank Training Academy

BIBM

Bangladesh Institute of Bank Management

CCI&E

Chief controller of Import and Export

CD

Current Deposit

CNG

Compressed Natural Gas

CSR

Corporate Social Responsibility

e-IBS

Electronic Integrated Banking System

ECR

Environmental Conservation Rules

EIA

Environmental Import Assessment

EnvRR

Environmental Risk Rate

ERM

Environmental Risk Management

FDD

Foreign Demand Draft

FKAIP

Fael Khair Agro-Inputs Program

HPSM

Hire Purchase Under Shirkatul Melk

H.S Code

Harmonized Systems Code

IBBL

Islami Bank Bangladesh Limited

i-Banking

Internet Banking
v

IBF

Islami Bank Foundation

IBW

International Banking Wing

IDB

Islami Development Bank

IMP

Import Processing Systems

KYC

Know Your Customer

LC

Letter of Credit

LCAF

Letter of Credit Authorization form

LAN

Local Area Network

MEIS

Micro-Enterprise Investment Scheme

MIS

Management Information Systems

MSA

Mudaraba Savings Account

MSND

Mudaraba Special Notice Deposits

MTDRA

Mudaraba Term Deposit Account

NID

National Identification

POS

Point of sale

RDS

Rural Development Scheme

SBIS

Small Business Investment Scheme

SME

Small and Medium Enterprise

SMSA

Student Mudaraba Savings Account

SWIFT

Society for Worldwide Interbank Financial Telecommunication

TIN

Tax Identification Number

TR

Trust Receipt

VAT

Value Added Tax

vi

Executive Summary
Islami Bank Bangladesh Limited is one of the renowned Banks in Bangladesh because it has
earned tremendous popularity and credibility among people for its better services. It is the only
bank of Bangladesh, which is staying in top-listed one thousand Bank of the world. This report
focuses about various activities of Green Banking activities of Islami Bank Bangladesh Limited.
Green banking is also known as a social, an ethical bank, alternative, civic, or sustainable bank,
is a bank concerned with the social and environmental impacts of its investments and loans. One
of the major economic agents influencing overall industrial activity and economic growth is the
financial institutions such as banking sector. In this report at first I tried to summarize an
overview of IBBL. Then I tried to describe my internship responsibilities and duties. In the main
part of the report, I have described the variety of green banking activities, budget, and major
performance of green banking. I also give some findings of report. In conclusion I describe the
advantages of IBBL to use Green Banking as an instrument to reach the 18 core people of
Bangladesh. Because one of the major economic agents influencing overall industrial activity
and economic growth is the financial institutions such as banking sector. Since banking sector is
one of the major stake holders in the Industrial sector, it can find itself faced with credit risk and
liability risks. Further, environmental impact might affect the quality of assets and also rate of
return of banks in the long-run. Thus the banks should go green and play a pro-active role to take
environmental and ecological aspects as part of their lending principle, which would force
industries to go for mandated investment for environmental management, use of appropriate
technologies and management systems. This report explores the importance of Green Banking,
sites international experiences and highlights important lessons for sustainable banking and
development in Bangladesh. Finally this report tries to draw picture how Sustainable
development can best be achieved by allowing markets to work within an appropriate framework
of cost efficient regulations and economic instruments.

vii

Table of Contents
Topic

Page No.

Declaration

Certificate

ii

Internship Certificate

iii

Acknowledgement

iv

List of Abbreviations

v-vi

Executive Summary

vii
CHAPTER ONE
INTRODUCTION

1.1 Introduction

1.2 Objective of the Study.

1.2.1 Board objective..

1.2.2 Specific Objective..
1.3 Significance of the Study.

2
2
2

1.4 Methodology of the Study...

1.4.1 Primary Sources...

1.4.1 Secondary Sources.
1.5 Scope of the Study...

3
3
4

1.6 Limitation of the Study

CHAPTER TWO
OVERVIW OF THE ORGANIZATION
2.1 Overview of the Organization.........

2.2 Mission of IBBL.

2.3 Vision of IBBL

2.4 Strategic Objectives of IBBL..

2.5 Core Values.

2.6 Commitments...

2.7 IBBL at a Glance.

2.8 Corporate Structure of IBBL..

2.9 IBBL, Bangshal Branch at a Glance

10

2.10 Organ Gram IBBL at Bangshal Branch.

11

CHAPTER THREE
INTERNSHIP POSITION AND DUTIES
3.1 Internship Duties and Responsibilities ...

12

3.1.1 General Banking Department..

3.1.2 Investment Department
3.1.3 Foreign Exchange Department
3.2 Internship Learning Points...

12-13
13-15
15-17
18

CHAPTER FOUR
ANALYSIS AND FINDINGS
4.1 Green Banking of IBBL.

19

4.2 Variety of Green banking Activities of IBBL.

19

4.2.1 Investment Operations..

4.2.2 Internal Operations and Environment...
4.2.3 Adoption of Green Technology
4.2.3.1 Technologies in Internal Operations...
4.2.3.2 Technologies for Better Customer Services
4.2.3.3 Special Technologies..
4.2.4 CSR Activities..
4.2.5 Product and Market Ecology
4.3 Green Budget and Its Utilization

19-21
21
21
21-22
22
22
23
24
24-25

4.4 Major Green Banking Performance Activities of IBBL.

25

4.4.1 Green Investment

4.4.2 In-House Environmental Management...

25-26
27

4.4.2.1 Waste Management.

4.4.2.2 Energy Management...
4.4.2.3 Water Management.
4.4.2.4 Paper Management..
4.4.2.5 Renewable Management.
4.4.2.6 Green Travel...
4.4.2.7 Ethical Banking..
4.4.3 Environmental Risk Management..
4.4.4 Climate Risk fund..
4.4.4.1 Rehabilitation Support
4.4.4.2 Investment Activities Without Any Return
4.4.4.3 Tree Plantation Movement
4.4.4.4 Investment in the Disaster Prone Areas.
4.4.4.5 Exclusive Sponsorship City Beautification
4.4.5 Green Promoting and Marketing
4.4.5.1 Online Banking...
4.4.5.2 Online Advertisements
4.4.5.3 Alternative Delivery Channel.
4.4.5.4 Digitation of Document..
4.4.5.5 Installation of IP Phone......
4.4.6 Green Training and Awareness Programs..
4.4.7 Automation.
4.5 Green Banking Activities of IBBL

27
27
27
28
28
28
28
28-29
29
29
30
30
30
31
31
31
31
31
32
32
32
33
33-34

4.6 Disclosure and Reporting Activities of Green Banking Activities.

34

4.7 2050 Visions for Banking in Bangladesh...

34

4.8 Management Approach...

34

4.9 Green Banking Performance of Bangshal Branch..

35

4.10 Findings.

36

CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion..

37-39

5.2 Recommendation

40

Reference

List of Tables
Table No.

Subject

Page No.

IBBL at a Glance

IBBL, Bangshal Branch at a Glance..

10

Green Investment in 2014..

25-26

Environment Risk Management.

29

Investment Activities without any return...

30

Green Training and Awareness Program...

32

Green Banking Performance of Bangshal Branch.

35

List of Figures
Figure No.

Subject

Page No.

Corporate Structure of IBBL.

Organ Gram IBBL at Bangshal Branch.

11

Investment department..

13

Green Budget and Its Utilization...

25

Climate Risk Fund.

29

Investment in the Disaster Prone...

30

Chapter: One

INTRODUCTION

1.1 Introduction
Bangladesh is one of the largest Muslim countries in the world. The people of this country are
deeply committed to Islamic way of life as enshrined in the Holy Qur'an and the Sunnah.
Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in
accordance with the precepts of Islam. One of the nations leading banking specialists of
uncompromising quality in several world class banking. The leading banking company of
Bangladesh has been making every effort to ensure the effectiveness and safety of the financing
which it makes sure. Islami bank provides the highest quality financing at comfortable facilities
to fulfill the needs of the millions of people of the country.
The establishment of IslamiBank Bangladesh Limited on March 13, 1983, is the true reflection
of this inner urge ofits people, which started functioning with effect from March 30, 1983. This
Bank is thefirst of its kind in Southeast Asia. It is committed to conduct all banking and
investmentactivities on the basis of interest-free profit-loss sharing system. In doing so, it
hasunveiled a new horizon and weheard in a new silver lining of hope towards materializinga
long cherished dream of the people of Bangladesh for doing their banking transactions in line
with what is prescribed by Islam. With the active co-operation and participationof Islamic
Development Bank (IDB) and some other Islamic banks, financial institutions,government
bodies and eminent personalities of the Middle East and the Gulf countries,Islami Bank
Bangladesh Limited has by now earned the unique position of a leadingprivate commercial bank.

1.2 Objective of the Study

1.2.1 Broad Objective
The broad objectives of the Banks green banking are to use resources with responsibility
avoiding waste and giving priority to environment and society.
1.2.2 Specific Objectives
To get enough knowledge about Green Banking activities of IBBL.
To know the green banking and green banking activities of investment in various sectors
of IBBL.
To make some suggestions.

1.3 Significance of the Study

Banks and financial institutions can play a major and decisive role in these global efforts to make
our planet a better place to live in. As major implementers of technology, banks themselves can
adopt green practices and thereby lead the way in this global initiative. Also, product innovation
and leveraging on the use of technology enable banks and their customers today to reduce the
usage of resources such as paper, thereby aiding in environmental protection. Central Bank of
Bangladesh provides a lot of guidelines for making the banks green for environmental
sustainability and environmental protection. As providers of finance, banks can ensure that
businesses adopt environment-friendly practices. So in this context, it is very imperative to study
the initiatives taken by the Bangladeshi banks for promoting the green banking and for
maintaining environmental sustainability.

1.4 Methodology of the Study

The objectivity of any study depends largely on how methodologically it is done. For the purpose
of this report I have used both qualitative and quantitative information to give it aidea about this
topic.
All the information used in this report is from two major sources. These are:
1.4.1 Primary Sources
Oral and informal interview of officers and employees in Islamic bank and personal
observation.
Informal talking with customers.
1.4.2 Secondary Sources
Analyzing the Annual Reports of Islami Bank Bangladesh Limited about Green Banking
2013 and 2014.

Published materials from Bangladesh Bank regarding Green Banking.

Journals /Newspaper articles relating performances of banks on Green Banking.
Files and documents of the branch.

1.5 Scope of the Study

The scope of the study is only limited to provide a fundamental idea on Green Banking at IBBL.
There are many limitations are found in the time of report completing like:
Green banking initiatives is a new topic in Bangladesh and just going on the banking
organizations.
Implementation time of following Green banking by all scheduled banked is not over yet.
Thats why information is not available of banks.
Time is very short. Thats why has no scope details gather knowledge about Green banking
of IBBL.

1.6 Limitation of the Study

Almost every research work has to face some limitations in its completion. Limitations of a study
are those issues that if analyzed could be more helpful for the study. This internship report is not
also out of limitations. For the purpose of acquiring data to prepare this report I faced some
constraints that are listed below:

Lack of Published Materials: No kind of published materials was provided to me during my

internship period. The division only allowed me to review their materials. As a result this report
is in lack of some specific reference papers in the appendix part.

Time Constraint: Covering the entire Green Banking performance of the bank was a difficult
task within the time allowed for the internship program.

Lack of Experience: Preparing a formal document like an internship report requires some prior
experience in this field. I have tried my level best to reduce the distortion or biasness of
information that I have used in this report.

Chapter: Two

OVERVIEW OF THE ORGANIZATION

2.1 Overview of the Organization

Islami Bank Bangladesh Limited (IBBL) was incorporated on 13th March 1983 as a Public
Company with limited liability under the Companies Act. 1913. The Bank started functioning
with effect from 13th March 1983. IBBL is the first private sector Islamic bank in South-east
Asia. The establishment of this Bank ushered a new era in Bangladesh. The Bank is committed
to run all its activities based on Islamic Shariah. IBBL through its steady progress and continued
success has, by now, earned the reputation of being one of the leading private sector banks of the
country.

2.2 Mission of IBBL

To establish Islamic Banking through the introduction of welfare oriented banking

system and also ensure equity and justice in the field of all economic activities.

Achieve balanced growth and equitable development in through diversified investment

operations particularly in the priority sectors and less developed areas of the country.

To encourage socio-economic upliftment and financial services to the loss-income

community particularly in the rural areas.

2.3 Vision of IBBL

Islamic bank vision to always strive to achieve superior financial performance is considered a
leading Islamic bank by reputation and performance. They are:

To establish and maintain the modern banking technology.

To ensure the soundness and development of the financial system based on Islamic
principles.

To become the strong and efficient organization with highly motivated professionals,
working for the benefit of people, based upon accountability, transparency and integrity
in order to ensure the stability of financial systems.

Try to encourage savings in the form of direct investment.

Try to encourage investment particularly in project, which are more likely to lead to
higher employment.
5

2.4 Strategic Objectives of IBBL

To conduct interest free banking.

To ensure customers' satisfaction.

To ensure welfare oriented banking.

To establish a set of managerial succession and adopting technological changes to ensure

successful development of an Islamic Bank as a stable financial institution.

To emerge as a healthier and stronger bank at the top of the banking sector and continue
stable positions in ratings, based on the volume of quality assets.

To ensure diversification by Sector, Size, Economic purpose and geographical location

wise Investment and expansion need based Retail and SME/Women entrepreneur
financing.

To invest in the thrust and priority sectors of the economy.

To strive hard to become an employer of choice and nurturing and developing talent in a
performance-driven culture.

To pay more importance in human resources as well as financial capital.

To ensure lucrative career path, attractive facilities and excellent working environment.

To ensure zero tolerance on negligence in compliance issues both shariah and regulatory
issues.

To train and develop human resources continuously and provide adequate logistics to
satisfy customers need.

To be excellent in serving the cause of least developed community and area.

To motivate team members to take the ownership of every job.

To ensure development of devoted and satisfied human resources.

To encourage sound and pro-active future generation.

To achieve global standard.

To strengthen corporate culture.

To ensure Corporate Social Responsibilities (CSR) through all activities.

To promote using solar energy and green banking culture and ecological balancing.

2.5 Core Values

Trust in Almighty Allah

Adherence to the spirit of Islamic Shariah

Honesty and Integrity

Transparency & Accountability

Welfare Driven

Equity and Justice

Environment Consciousness

Customers Focus and Respect for all Discipline and cooperation

2.6 Commitments

Shariah directives

Regulators

Shareholders

Society

Customers

Employees and

Environment

2.7 IBBL at a Glance

Organization Overview (As on 31th December 2014)
Date of Incorporation

13th March 1983

Inauguration of 1st Branch (Local office, Dhaka)

30th March 1983

Name of Chairman

Prof. Abu Nasser Muhammad Abduz Zaher

Local Shareholders

32.75%

Foreign Shareholders

67.25%

Authorized Capital

Tk. 20,000.00 Million

Paid-up Capital

Tk. 16,099.91Million

Deposit (including Bills Payable)

Tk. 560,696.30Million

Investment(including investment in shares /

Tk. 564,332.00 Million

Securities)
Total Assets (including Contra)

Tk. 765,241.27 Million

Total Assets (excluding Contra)

Tk. 652,422.04 Million

Import

Tk. 316,971.00 Million

Export

Tk.222,753.00Million

Remittance

Tk.308,722.00Million

Number of Correspondent Banks

597

Number of Foreign Correspondents

723

Number of Shareholders

60,857

Number of Employees

13,574

Total Number of Branches

294

Total number of SME Krishi Branches

30

Number of AD Branches

55

No. of Own ATM Booth

450

Credit Ratings

AA+( High Safety)*

ST-1 (Highest Grade)**
Table: 1
Source: IBBl, Annual Report 2014

2.8 Corporate Structure of IBBL

Figure: 1
Source: IBBl, Annual Report 2013

2.9 IBBL, Bangshal Branch at a Glance

Bank Name

Islami Bank Bangladesh Limited

Branch Name

Bangshal Branch

Branch Type

AD

Address

222, Bangshal Road, Dhaka

Established

2 November, 1994

Manager

A.K.M. Shahidul Hoque Khandaker

2nd Officer

Md Mijanur Rahman

No of Department

Human Resource of bank

57

Telephone

02) 9556826

Mobile

01711-1693916

Fax

(02) 9583283

S.W.I.F.T

IBBLBDDH179

E-Mail

[email protected]

Web-site

www.islamibankbd.com

Call Center

16259

Table: 2
Source: IBBL, Bangshal Branch

10

2.10 Organogram IBBL at Bangshal Branch

Figure: 2

Source: IBBL, Bangshal Branch

11

Chapter: Three

INTERNSHIP POSITION AND DUTIES

3.1 Internship Duties and Responsibilities

Internship in IBBL (AD Bangshal Branch), Already I had done. The Branch is located at Puran
Dhaka, (1st Floor), 222, Bangshal Road, Dhaka. This branch is an AD branch of IBBL.During
internship period, it worked on many departments of this bank each are General Banking
Department, Investment Department and Foreign Exchange Department.
3.1.1 General Banking Department
It was assigned for the first time after getting the order of internship program. I had opportunity
this department only for learning 10 Days for Account Opening, Cheques and Payment Order,
General Ledger, Clearing and Transfer, Alternative Delivery Channel (ADC), Locker Service,
and also learning Account Balance checking from MIS software etc.
Everyday this branch Opening many accounts like Al-Wadiah current account, Mudarabah
Savings Account, Student Mudarabah Savings Account, Mudarabah Term Deposit Account:
3/6/12/24/36 Months term. Every day itopens 20 to 30 accounts. They are providing melearning
opportunity very accurately, systematically and centralizing the desk to.

I am doing the

following tasks:
1. Provided the account opening from to the customers.
2. Helped the customer about how to fill up the account opening from.
3. Gave the signature card with account opening from.
4. Filled up the customers transaction profile and know your customer (KYC) form.
5. Added the check list in front of account opening form.
6. Gave the branch seal and signature verified seal of respective areas.
7. Filled up the account closing form, signature changing form, transfer account in branch
wish etc.
8. To learn how to transfer the customer amount of money by payment order.
9. Face to face dealing with customers such as knowing them about their cheques books
status, account balance status.
10. To provide them the cheques books and activate it on software named STELAR.

12

11. To learn general ledger in every days transaction and how to write down the Voucher
(Debit/Credit voucher) in this ledger sheet.
12. To learn the locker services.
13. To learn Check Clearing in Bank wished by BACH Systems.
14. Update the old format account and call the account holder to provide their information.
15. Provide service on phone call such as cheques book status, account balance status etc.
3.1.2 InvestmentDepartment
In investment section it learns different mechanisms of investment. I had also passed this section
only for 10 days. Investment can be made by the Islami Bank under the following modes: BaiMurabaha, Bai-Muajjal, Bai-Salam and Hire purchase under Shirkatul Meelk (HPSM).

Figure: 3
Source: From www.google.com

Basically, they are provided the investment in Bai-Murabaha called like: Bai-MurabahaTR and
Bai-Murabaha.
Bai-Murabaha TR:Bai-Murabaha TRmay be defined as a contract between a buyer and a
seller under which the seller sells certain specific goods permissible under Islamic Shariah and
the Law of the land to the buyer at a cost plus an agreed upon profit payable today or on some
date in the future in lump-sum or by installments. The profit may be either a fixed sum or based
on a percentage of the price of the goods.
13

Bai-Murabaha:"Bai-Murabaha" means sale for an agreed upon profit. Bai-Murabaha may be

defined as a contract between a buyer and a seller under which the seller sells certain specific
goods permissible under Islamic Shariah and the Law of the land to the buyer at a cost plus an
agreed upon profit payable today or on some date in the future in lump-sum or by installments.
Bank only the seller who is buy the goods or products and storage the warehouse and sell the
products to buyer part by part and buyer also pay the amount of money this products. This
mature time computed for only 1 year or 365 Days.
The profit may be either a fixed sum or based on a percentage of the price of the goods. BaiMurabaha agreement
In Investment the following documents are submit by the Clients from investor. This Document
may call Charge Document or Disbursement Document.
Customer may provide:
1. Know the customers details
2. Collect the NID card photocopy, Trade license, T.I.N, VAT certificate, Membership
Certificate etc.
3. Two copies of recent passport size photo.
4. Receipt the customer application form with own organizational pad with attested seal and
signature.
5. Receipt the product sellers Bill and Quotation
6. Receipt anempty cheque or payment order with buyers signature.
7. Personal guarantee of the owner of the property/propriety.
8. Last couple of years buying and selling information, Balance sheet.
9. List of Debtors and Creditors.
10. Store goods information
Bank may provide:
1. Demand Promissory note.
2. Demand Promissory Delivery letter.
3. Letter of Disbursement
14

4. Balance confirmation letter

5. Letter of confirmation letter
6. Bai-Murabaha Agreement
7. Agreement for pledge of goods
8. Letter of Hypothecation
9. Trust Receipt (TR)
10. Letter of Guarantee
11. Letter of Authority
12. Letter of Continuity
13. Letter of Agreement
14. Delivery letter
In investment section I complete the application from and check the necessary documents are
given or not.
3.1.3 Foreign Exchange Department
Lastly, I had passed this section for 10 days; its a great opportunity and also experience for me
which may I concern and learn about Foreign Exchange Department with successfully. It works
same of time in Foreign Exchange section of my internship period. Foreign Exchange
department divided with 3 sections Import, Export & Remittance section. In Import section the
work was completes the LCAF by given information about Performa invoice, Commercial
Invoice and other necessary documents. Foreign Exchange department is highly sensitive sector
in every bank because Bangladesh Bank directly involve in this sector. So every employee is
more conscious about their work.
The following essential terms should be incorporated in the text of L/C at the time of opening it.
In Import & Export documents are collecting from customers for LC Opening- like:
1. Application Form
2. Trade License
3. TIN Certificate
4. VAT Certificate
15

5. Import & Export Registration Certificate from CCI&E

6. Association of Business Membership Certificate
7. No Objection Certificate
Import processing with LC:
1. Collection of documents
2. LC Opening
3. Charge deduction and forward
4. Receive documents of LC and lodgment
5. Pro-forma invoice
6. Insurance covered letter
7. Letter of Credit Authorization form for Commercial or Industrial (LCAF)
8. IMP with Bill of Entry
9. Charge Document
10. Bill of Leading
11. Payment Clause
Export processing with LC:
1. ReceiveExport LC from Tradeware (IBBL Software web link name)
2. Pre Shipment Investment
i.

Back to Back LC

ii.

Bai-Salam: Post shipment

3. Issue Export
4. Send Document to respective bank
5. Post shipment investment
6. Receive FDD/PO and send for collection
7. Realization
My internship program I had worked 10 working days at foreign exchange department. The
following tasks are done by me under foreign exchange department.
1. Made the IMP for filing the Letter of Credit(L/C)
16

2. Gave the seal of authorized person in the L/C file

3. Cut the pro-Forma Invoice and Commercial invoice for making the IMP
4. Added the checklist in front of IMP file
5. In the IMP form I entry the Description the product, H.S Code number, country of origin,
country receiving payment, port of loading, port of discharge, country code, currency,
currency code etc.
6. To collect the foreign remittance from this of types, like_ endorsement, Indantor, agent
Commission, wage earners etc.

17

3.2 Internship Learning Points

It works almost in the all department of this branch except cash and clearance. Tried to learn
general banking activities as such possible & dealt with customers directly. Here it is going to
mention my key points from different sections of division:
1. Account Opening: While worked in this section, have learnt about necessary condition
& documents to open an account and different features of deposit mix of IBBL. It also
observed that most of the people are opening AWCA, MSA, MTDRA, and SMSA.

2. Account closing: From this section, it has learnt the process of closing an account. To
close account, the account holder needs to apply in a form supplied by the bank
mentioning his/her account balance. Then the authorized officer approves the application
and the account is out from the general ledger.

3. Check Issue: If any client need cheque book I put his/her account name and account
number with the mobile phone number in to the register book. I also provide him/her the
cheque book collection date.

4. Investment Section:
i.

How to utilization the deposit of IBBL

ii.

Mortgage formalities at the time of taking loan by the client.

iii.

The procedure of loan sanctioning.

iv.

Risk assessment factors

v.

The steps of investment recovery procedure of IBBL

vi.

How to know your customer (KYC).

5. Foreign Exchange Division: In this division, it opened the file of different clients. It has
learn from these files what papers are necessary for opening L/C. FSIBL frequently gives
opportunity to open Back to Back L/C to its trusted client keeping their master L/C as
line.

18

Chapter: Four

ANALYSIS & FINDINGS

4.1 Green Banking of IBBL

Green Banking is an emerging issue in the present banking arena. It is a kind of welfare banking
for the society. IBBL being a Shariah compliant welfare bank emphasizes on human rights,
green investments and trade, social involvement, ecological impact and animal welfare etc. and
takes various initiatives and steps for performing Green Banking activities.
IBBL ranked among top ten banks in Bangladesh for Green Banking Activities as published in
the Annual Report on Green Banking 2012 by Bangladesh Bank. IBBL was also ranked as 1st in
Climate Risk Fund Utilization activities

IBBL is always enthusiastic in participating and arranging various programs on green banking
and environmental issues. IBBL, as a recognition of its better Green Banking practices, was
selected for presenting a paper for the seminar on Green Banking: Opportunities & Initiatives in
Bangladesh held on 23 January 2014 organized by Bangladesh Bank Training Academy
(BBTA). IBBL was also designated as discussant for the seminar on Green Banking
& Environmental Risk Management held on 21st August 2014 organized by BBTA.

4.2 Variety of Green banking Activities of IBBL

The terms of the Green Banking Policy of Bangladesh Bank (Phase-I), the Green Banking
activities of IBBL has been concentrated in the following region/sectors of its day to day
activities.
Investment Operations
Internal Operations & Environment
CSR activities
Adoption of Green Technology
Product & Market ecology
4.2.1 Investment Operations

The investment policy of IBBL has been prepared not only considering the profit goals
but also considering the following ethical aspects8:

Islamic Sharia'h

Social Desire
19

National Investment,

Finance Plan' Perspective plan etc.

Economic Justice

Environment Protection

Green Banking Policy of Bangladesh Bank Protection of haram/socially undesired goods

production

Preference for investment to lower income group

Product invention by market segmentation

Diversification of investment by giving preference to special/least economic zone

Product invention for preferential sector

Bringing non-earning group of people into earning process etc.

As such, IBBL should extend banking facilities in production or trading of sharia'h approved
goods and services. IBBL should not extend any facilities against any speculative, health
hazardous detrimental products. They should emphasis the investments clients to install water
treatment plants where needed, or effluent treatment plants, or hazardous waste treatment plants
to qualify for investments. They should give high preference to environmental infrastructure
projects like renewable energy plant, clean water supply project, waste-water treatment plant,
Bio-gas plant, bio-.fertilizer plant etc. In addition to environmental infrastructure projects, we
should preference to energy saving and environment friendly product manufacturing projects.
They should give special attention on the following matters at the time of financing. Ensuring
maximum recycling/processing of waste/detrimental by-products;

Environment friendly projects

Brick field (Zig-Zag)

CNG Re-fuelling projects

Energy Savings Bulb Projects

Organic Fertilizer

Jute Project instead of Poly

Tree Plantation etc.

20

Being an ethical bank, we should ensure diversified distribution of the wealth through diversified
and decentralized investment operations and hence in order to reach the banking services to the
poor people of the rural areas. These investment operations create self-employment in the
ruralareas through its agro based Rural Development Scheme (RDS), Micro-Enterprise
Investment Scheme (MEIS) and in the urban areas through Small Business Investment Scheme
(SBIS) and thus will ensure socio-economic uplift of the deprived people, poverty reduction and
employment generation. We should give emphasis to diversify our investment portfolio by size,
sectors, area, economic purpose etc.
4.2.2 Internal Operations and Environment
IBBL will try to be as much conservative as possible in use of resources like fuel, electricity,
paper and even water. They should ensure maximum efficiency while using resources. They
should try to avoid printing and print on both sides of a paper when needed. Reusing envelopes,
folders, Papers clips and using e-mail instead of paper correspondences, ceramic cup/glass
instead of disposable ones, CFL bulbs/tubes instead of the normal ones, scrap papers as
notepads, less fuel consuming cars. IBBL should try to use energy saving bulbs, and ensure that
there is sufficient arrangement for using day light and air circulation.
4.2.3 Adoption of Green Technology
4.2.3.1 Technologies in Internal Operations
IBBL is always pioneer in technology adoption. IBBL has developed an in-house built integrated
banking system namely e-IBS (electronic Integrated Banking System) in between 2001-2004 and
implemented the same covering all of its business aspects like:

Customer information

General Banking

Investment

Foreign Exchange

BASEL-II

Remittance (Foreign & Local)

SWIFT

Internet Banking
21

SMS Banking

Alternative Delivery Channels (Debit Card, Pre-paid Card, Remittance Card, Traveler
Card, Card less Transaction)

Centralize Foreign Trade Processing System (all types of LC, Bills issue & payment.
SWIFT Message generation & conversion)

Bangladesh Automated Cheques Processing System (BACPS)

Rural Development Scheme (RDS)

Credit Card'

Security

Centralization of foreign trade operations for its in-house day to day to business
management and to ensure better & prompt services through acquainting the customers with
automation & paperless banking system.

4.2.3.2 Technologies for Better Customer Services

All of its branches are online. It has introduced SMS & Internet Banking, ATM Services for its
customers. Moreover, it is going to adopt Mobile Banking Service, Point of Sale (POS),
Khidmah (Credit Card), Travelers Card, Automation of all scheduled Telegram, Automation of
all types of statement, implementation of Investment HUB, Document/Content management,
work flow management, data archive etc. to enhance its own efficiency and to facilitate its
customers BL make its customers acquainted with the technology based paperless Banking
system.

4.2.3.3 Special Technologies

IBBL has its own online Data Center, Disaster Recovery Site,
Distributed BACH system, Central MIS system developed by
itself for its own. It is using intranet, own mail server for
internal

communication

instead

of

paper

based

correspondences. Therefore, all the employees should be

acquainted and habituated with the emerging technologies.

22

4.2.4 CSR Activities

CSR activities of the Bank are concentrated in the following points of view:

Responsibility towards shareholders

Responsibility towards employees

Responsibility towards customers

Responsibility towards community

Responsibility towards environment

Responsibility towards suppliers

IBBL has been following the path of sustainability with efficiency and discharging its
responsibility to safe guard shareholders value by complying sharias & law of the land. The
Bank is always aware of continuous development of knowledge of the employees, competencies
and attitude of the employees; comfortable and modern working environment as well as justified
and competitive compensation packages for it employees.
The Bank is enhancing its customer services and adopting modern but green technologies where
needed. IBBL contributes to a great extent in inclusion of the small untapped deposits
andchanneling the same in the regular economic activities through opening account the lowest
initial deposit from Tk. 10/- to Tk. 500 considering the categories of products. IBBL also
designed many investment products for the deprived portion of the people and helps them
fulfilling their basic needs. Moreover, IBBL provides Quard (without any profit/interest) for
sanitation establishment of tube-well to ensure supply of pure drinking water. IBBL established
many hospitals to provide health services to the people at the lowest cost, organizes various
health camps, established many institutions (including technical) to ensure better education for
the people at the lowest cost and through Islami Bank Foundation (IBF).
IBBL also arranges scholarship programs, academic award, tree plantation programs, arranges
training/seminars etc. for women empowerment program, mobilizes charitable fund &,
contributes in relief and rehabilitation, takes measures for mitigating environmental risks for its
community and stakeholders. The Fael Khair Agro-Inputs Program (FKAIP) has been operated
in 23 upazellas under 12 districts. About 52,000 Sidor victim families have been brought under
the program and are provided with quard without any service charge or profit.

23

4.2.5 Product and Market Ecology

IBBL always introduce its product considering the environment affects. Some of the examples of
such products are as under:

Solar Panel Investment Scheme

Agricultural Implements Investment Scheme

Rural Development Investment Scheme

Micro-Enterprise Investment Scheme

Mudarabah Savings Account for Farmers

Mudarabah Savings Account for Students

Women Entrepreneurs' Investment Scheme

Mudarabah Waqf Cash Deposit Account

Small Business Investment Scheme etc.

More emphasis is given on Small and Medium Enterprises instead of large scale industries and
rural areas instead of urban areas to ensure equity, justice, decentralization and balanced growth
of the economy while financing. It also gives emphasis in utilization of the hazardous toxics/by
products that are emitted from the industry and conversion of the same into hygienic products
and thus making those projects as the complete ones. IBBL itself always tries to promote its
products & services through counseling or by electronic media like its websites, television, and
radio etc. rather than using paper based media. It also encourages its customers to promote their
products & services in an environment friendly way.

4.3 Green Budget and Its Utilization

The Budget for Green Banking reflects the Banks commitment towards the Green Banking. In
2014, the Green Investment gothighest allocation. All the main areas of Green Banking Budget
2014 and utilization thereof are below:

24

Figure: 4
Source: IBBl, Annual Report 2014

4.4 Major Green Banking Performance Activities of IBBL

4.4.1 Green Investment
Green Investments implies the financial services to the businesses and projects that help prevent
deterioration of the environment as well as which are not harmful to the environment. The Bank
gives priority in disbursing the environment friendly investments like renewable energy, energy
efficiency, waste management, alternative energy, recycling & recyclable product, green
industry, safety and security of factory, clean water supply etc. Some of these green investments
of 2014 of the Bank are given below:
Green Investmentin 2014
Particulars of Green

Disbursement in 2014

Disbursement in 2013

Growth/decrease (%)

Investments

Number

Number

Number

Amount in
million Tk.

Amount in
million Tk.

Amount in
million Tk.

219

48,352.51

192

39,677.00

14.06%

21.87%

Bio-gas plant

0.89

7.00

0%

-87.29%

Solar Home System

18

131.08

17

117.78

5.88%

11.29%

Bio-fertilizer plant

0.20

2.00

-33.33%

-90%

Projects financed

22

632.87

761.00

175%

-16.84%

Projects financed
having ETP

& Solar Panel trades

having Tunnel Kiln

25

Installation of Zigzag

31

125.97

28

126.90

10.71%

79%

455

2,170.64

149

1,382.00

205.37%

57.07%

2,001.77

500.00

200%

300.35%

12

394.64

981.00

33.33%

-59.77%

11

510.46

198.00

22.22%

157.81%

12

370.05

419.00

140%

-11.68%

29.16

75.00

50%

-61.12%

14

4.12

4.00

366.67%

3%

1.50

0.06

50%

2400%

3930

21.96

3087

15.27

27.31%

43.81%

176.34

111.35

0%

58.37%

441.07

373.86

0%

17.98%

4835

55,368.53

3,530

44,751.22

36.97%

23.73%

kiln
Projects financed
having Zigzag kiln
Waste and hazardous
disposal plant
Waste paper
recycling plant
Waste battery
recycling plant
PET bottle recycling
plant
Financing of LED
bulb production
Safe/Clean Water
Supply Projects
Improved cooking
stove (Bandhu Chula)
Green finance at zero
rate of return
Electricity Generation
from Rice Husk
Rice bran Oil
Production
Total

Table: 3
Source: IBBl, Annual Report 2014

26

4.4.2 In-House Environmental Management

The Bank practices In-house management of its officesgiving utmost importance to the
environment. The Bank hasmade it a regular practice to follow the Green Office Guideof the
Bank in its day-to-day office operations to minimizeand reduce carbon emissions, achieve more
efficient use ofresources and reduction of waste, save energy and money,and help improve their
working environment. The followingsare some of its outcomes:

4.4.2.1 Waste Management

Waste minimization through demand management, reuse and recycling are the preferred methods
of reducing solid waste. Wooden door, ceiling fan, air cooler, generator, aluminum fixed
partition, switch/socket, cable, electric tube, swing door, server room, battery, water filter, table
glass, cheques writer, trunk, signboard, table, tube light shed, chair, type writer, computer,
calculator, exhaust fan, circuit breaker, LAN cable, sofa are some of the e-waste and other solid
waste items of the Bank which are collected from every operational unit and disposed centrally
through e-tendering that are environmentally friendly and safe. The Bank earned Tk. 1.14 million
and Tk. 1.76 million in 2014 and 2013 respectively by selling its e-waste and other wastes.

4.4.2.2 Energy Management

The Bank advises the officials to adopt energy efficient practices. The offices try to ensure
efficient use of gas, fuel and electricity with a view to reduce carbon emission. Energy efficient
equipments like energy bulbs, less sound generators etc. are used in the offices. The Bank also
introduced the system of auto shutdown of electrical equipments.

4.4.2.3 Water Management

The Bank encourages its staff and officers to practice austerity in using water and also does large
borrowers to conserve & recycle water. The Bank used Tk. 10.35 million in 2013 and Tk. 12.32
million in 2014 for the consumption of water in the offices.

27

4.4.2.4 Paper Management

Paper consumption in the offices is managed such a way that contributes saving of paper in the
daily operations of the Bank. Use of scrap/one side used papers for note pad has become usual
practice to the employees. One side used papers are also used in the printing for draft copies of
the office assignments.
4.4.2.5 Renewable Management
The Bank installed Solar panels at Head Office, 32 Branches as a part of its commitment to the
usage of renewable energy resources.

4.4.2.6 Green Travel

IBBL always encourages the officials to undertake Green travel for any business travel, which
reduce environmental impact. In this regard bank use hybrid autos, use public transport and carpooling system.

4.4.2.7 Ethical Banking

The Bank aims to run in such a way that it doesnt have any negative impact on either society or
the environment. The principles of the Bank have direct impact on how it invests and utilizes its
resources. It does not finance enterprises that deal in morally questionable businesses. The Bank
attempts to maximize social welfare, reduce hazards, and protect the nature and any type of
degradation in its operational areas and activities. Moreover, the Banks core principle is the
protection of resources for the future generation.

4.4.3 Environmental Risk Management

The Bank has incorporated Environmental and Climate Change Risk Management as a part of
the existing investment risk assessment methodology integrating environmental risks in the
checklists, audit guidelines and reporting formats. High Environmental Risk Rated (EnvRR)
investment proposals are approved only by the Board stipulating appropriate covenant. The total
number of projects/exposures applicable for EnvRR in 2014 was 2,257.

28

Particulars

Low

Moderate

High

Total

No. ofexposures/ Investments rated

1503

456

72

2031

88,024.79

25,878.15

15,043.92

128,946.86

Amount

disbursed

against

rated

exposures (In million Taka)

Table: 4
Source: IBBL, Annual Report 2014

4.4.4 Climate Risk Fund

The Climate Risk Fund policies of the Bank support projects, programs, and economic activities
in the flood, cyclone, drought, severe cold etc. prone areas of the country as a part of the CSR
expenses. Total expenses in the climate risk related revenues were Tk.125.10 million in 2014.
Projects and other activities which came under the Fund in 2014 are given below:

Climate Risk Fund, 2014

Tree Plantation

20.53

Forgoing Profit

Blanket Distribution

57.26

Flood Relief

35.31

Prime Minister's Relief Fund

10
0

20
40
60
Amount in Million Tk.

80

Figure: 5
Source: IBBL, Annual Report 2014

4.4.4.1 Rehabilitation Support

The Bank donated Tk. 10 million to the Prime MinistersRelief Fund to help and rehabilitate the
flood and river erosion affected people of the country in 2014. The Bank also directly donated
Tk. 35.31 million as the relief work for flood affected people. The Bank also donated blanket
worth Tk. 57.26 million among the severe cold-hit poor people.

29

4.4.4.2 Investment Activities without Any Return

To improve the standard of living of the rural people, IBBLfinances the setting up of tube wells
and sanitary latrines in the rural areas without charging any rate of return against the
investments. The Bank has foregone Tk.3.93 million for improving the living standard of poor
people during 2014. The summary of the welfare activities are given below:

Particulars

Number of Units

Amount in million Tk.

Tube well

3495

19.50

Sanitary Latrine

1493

6.60
Table: 5
Source: IBBL, Annual Report 2014

4.4.4.3 Tree Plantation Movement

The Bank has been observing Plantation Program since2003 in the rainy season under Rural
Development Scheme to conserve the environment. In 2014, the Bank distributed 723,672
saplings of indigenous fruit varieties among 0.82 million RDS members costing TK. 20.53
million against Tk.14.56 million in 2013.
4.4.4.4 Investment in the Disaster Prone Areas
IBBL contributes a significant portion (27.49%) of itsinvestment portfolio in the disaster prone
areas of thecountry. These areas are mostly less developed and needsbased investments, which
IBBL takes as its one of the priorities to support the economic activities of the regions.In case of
any emergency, the Bank utilizes

CSR to continue the economic

activities. The amounts of
investments in the economic
activities of 32 districts
during2014 are presented in the

Investments in the Disaster Prone Areas,

90226
2014

100000

Amount in Million Tk.

its Climate Risk Fund as part of its

80000
60000
40000
20000 14676
0

chart:
Figure: 6
30

13183 14103

26420

Source: IBBL, Annual Report 2014

4.4.4.5 Exclusive Sponsorship City Beautification

Anything beautiful easily attracts of everyone. City beautification is a common phenomenon in
recent days and IBBL significantly adopts various city beautification projects by planting
charming flower plant which helped reduce carbon footprint in the atmosphere.

4.4.5 Green Promoting and Marketing

IBBL Green Marketing and Products initiatives are:
4.4.5.1 Online Banking
Customers can get instant registration for i-Banking (Internet Banking): i-Banking is designed to
implement their commitment to green banking and to enable customers to do banking at their
own convenience without visiting the branches. This i-Banking facility allows the customer to
bank from anywhere, anytime with total security and confidentiality. This is an absolutely free of
service cost.
All branches of the bank are under online network. Clients can now easily deposit, withdraw,
remit fund and check account balances from 294 branches.
4.4.5.2 Online Advertisements
Bank is increasingly focusing on online platforms like Face book, Websites etc. for promotional
activities. All their offers, promotions, news are available on websites that reduce the
dependency on print media. All these Digital initiatives are reducing carbon footprints on day today communication activities.
4.4.5.3 Alternative Delivery Channel
The Bank emphasizes selling products and/or services based on their environmental benefits. A
number of such products and services like ATM debit card, Visa Debit Card, M-cash, i-banking,
i-recharge, Remittance card, SWIFT, Call center, Online banking, SMS banking etc. are being
promoted through vigorous advertisement in both the electronic and the print media. The Green
marketing expenditure of the Bank was Tk. 18.00 million for the year 2014.

31

4.4.5.4 Digitalization of Document

Many of the documents of the bank are converted into softcopy. Books of Accounts are fully
automated & electronic. Lion share of the internal and external communication are done through
authenticated e-mail. All kinds of Foreign Trade Services of the Bank are handled through
Centralized Trade Processing.
Besides, all circulars, notices, memoranda and queries are issued through Intranet.
Employment notices, moreover, are given on website. Online applications are invited and
entertained for fresh recruitment.
4.4.5.5Installation of IP Phone
IBBL installed IP-Phone services at Head Office, Zonal Offices and all AD Branches. As a result
visual communication without physical movement of officials/executives has been facilitated
which help reduce fuel consumption and carbon emission.

4.4.6 Green Training and Awareness Programs

The Bank emphasized the training and awareness programs on green banking to ensure the
reduction of carbon emission from its operational activities. The Bank arranged Green Banking
Training Programs in Dhaka and 13 (thirteen) Zones to revamp the Green Banking practices.
Besides, officials of the Bank attended the Training programs/workshop/ seminars on Green
Banking issues arranged by Bangladesh Bank Training Academy and BIBM this year. Green
Banking Training performances in 2014 are mentioned below:
1

Number of courses/training conducted

288

Participants of employee training programs

7405

Participants of customer awareness programs

3771

Expenditure (Million Taka)

2.91

Table: 6
Source: IBBL, Annual Report 2014
32

4.4.7 Automation
The Bank has huge number of products like deposits, investment, IBW and other services
products which are automated and time savings for the customers. Advanced technologies are
being used to provide prompt and environment friendly customer services.
Various continuous processes have been there to minimize the banks direct operational impact to
environment in Bangladesh:
1. Soft archival of customer documents for electronic access and retrieval is enabling us to
reduce consumption of paper;
2. Majority of internal memos, process notes and records are in electronic form;
3. Internal communications are done through emails.Most of the staff have dedicated email
IDs for office use;
4. Customer communications are being done throughemails, SMS or ATM display instead
of lettercommunication(except for regulatory requirements);
5. Video conferencing with offices has reduced the needfor physical travel with associated
carbon emission;
6. Most of Foreign Trade Services of the Bank are handledthrough Centralized Trade
Processing. Besides, allcirculars, notices, memoranda and queries are issuedthrough
Intranet. Employment notices are given onwebsite and online applications are invited &
entertained;
7. The Centralized Investment Proposal Processing Systemof the Bank has been introduced
for efficient and promptdisposal of the investment proposals and to make thewhole
process of investment system more transparentwhich is running as a Pilot Project.

4.5 Green Banking Activities of IBBL

As

reported

by

banks,

they

are

already

practicing:Use of paper on both sides for internal

consumption;
E-statement for customers instead of paper
statements;
Maximum use of day light for office work;
33

 Use of energy efficient bulbs and other electronic equipments

Conversion of Banks vehicles (pool) into CNG.
Online Activities:
Intensive use of online banking and internal communication system to provide better &
greater banking services to clients.

4.6 Disclosure and Reporting Activities of Green Banking Activities

IBBL has been regularly reporting its green Banking activities/initiatives to the Bangladesh Bank
on quarterly basis since 2015. In view of highlighting their Green Banking activities/initiatives
and creating awareness amongst the stakeholders, a separate section has been incorporated in
their Annual Report, Website and other internal publications

4.7 2050 Visions for Banking in Bangladesh

According to BBs Green Banking statement IBBL envision Bangladesh as a mature
advancedeconomy in 2050, with levels of
human development and technological
advancement sufficient to place her
among leading Asian nations in terms of
financial prosperity as well as social and
environmental responsibility.

4.8 Management Approach

The Bank recognizes the environmental hazards caused by consumption of resources and release
of waste from own business activities and aim to protect the environment through resource
recycling as well as efficient use of energy and resources. They are committed to continually
minimize their operational environmental impacts, by monitoring environmental performance;
setting improvement targets; and by implementing and evaluating environmental management
program that save energy and water, manage waste, recycle materials, reduce business trips, and
promote green procurement and provide wide range of e-banking services.

34

4.9 Green Banking Performance of Bangshal Branch

Information About Branch
Total number of clients of Bangshal clients

68476

Total Number of Mobile Banking service User

417

Total number of LC (Import-export) Transactions of Bangshal Branch

1500

Total Number of ATM/ VISA Debit card User of Bangshal branch

3493

Financial Information of Bangshal Branch (IBBL)

As on 30th November, 2015
Amount in Million (TK.)
Amount of Average Daily transaction of Bangshal branch

215.00

Amount of Average Daily transaction of Bangshal branch By using ATM cards

0.50

Amount of Average Daily online transaction of Bangshal branch

2.80

Amount of Average Daily transaction of Bangshal br. By using Mobile banking

0.050

Deposits

Investment

Foreign Exchange &

Remittance

Mudaraba Savings Deposits

368.57

Mudaraba Special Notice Deposit

43.00

Mudaraba Waqf Deposit

1.33

Other Mudaraba Deposits

890.46

Total Mudaraba Deposit

1,303.36

Cost Free Deposits

644.37

Total deposits

1,947.73

Investment in Business Sector

5,243.63

Classified Investment

765.95

Investment Income

291.63

Total Investment Income

136.84

Import

4,523.01

Export

3,914.82

Remittance

250.63

Total Foreign Exchange in Business

8,688.46

Commission, Exchange & Other Income

59.56

Table:7
Source: IBBl, Bangshal Branch
35

4.10 Findings
The report findings about green banking policy of Bangshal branch of IBBL and IBBL are given
below:
1. A big portion of Bangshal Branchs investment is invested transport sectors, which is one
of the main contributors to pollute Dhaka City & Bangshal Branch has a great scope to do
green banking.
2. They have very good performance in ATM service, online service, and internet service.
3. Maximum numbers of Bangshal Branch Employees are aware about Green Banking.
4. Before investing in any project they only consider on what Department of Environment
of Bangladesh gave certificate or not; and do the applicant have adequate mortgage
property or project is environment friendly or not.
5. Branch recently introduce bank charge for checking the bank balance print copy and
there is no bank charge for checking balances through mobile banking or internet
banking.

36

Chapter: Five

CONCLUSION & RECOMMENDATIONS

5.1 Conclusion
Green is good for you and the planet. And banks big and small are increasingly offering green
loans, sustainable certificates of deposit and paperless checking rewards that dish out discounts
and fee breaks. The result: more green in your pocket. Green banking isn't just for tree huggers
anymore. It's becoming mainstream as a way to make, save and lend money. "Customers want to
make a difference in the environment".

The easiest way for you to bank green is to start using the online banking services that are
available. Benefits of online banking include less paperwork, more mail and less driving to
branch offices, which all have a positive impact on the environment. Interestingly, online
banking can also increase the efficiency and profitability of a bank. A bank can lower their own
costs that result from paper overload and bulk mailing fees as more customers use online
banking.

Banks can do much more to help the environment than just promote online banking. A truly
green bank will reduce their carbon footprint by building more efficient branches, implementing
energy-efficient operational procedures, offering transportation services for their employees,
promoting sustainable banking and increasing their lending in environment-sensitive industries.
Banks can also support eco-friendly groups and raise money for local environment initiatives.

In a rapidly changing market economy where globalization of markets has intensified the
competition, the industries and firms are vulnerable to stringent public policies, severe law suits
or consumer boycotts. This would affect the banks and financial institutions to recover their
return from investment. Thus, the banks should play a pro-active role to take environmental and
ecological aspects as part of their lending principle which would force industries to go for
mandated investment for environmental management, use of appropriate technologies and
management systems. As per the above discussion, we can say that customers are becoming
aware about various environmental issues and the hazardous effects of rapid industrialization, it
is necessary for organizations to attain sustainable competitive advantage by creating ecofriendly products. Banks can protect themselves as a socially and ethically oriented organization
37

by disbursement of loans merely to those organizations, which has environmental concerns.

However, this can decelerate the economic and industrial growth but human race cannot afford
the fast pace of growth at the cost of environmental depletion. Green Banking if implemented
sincerely will act as an effective for the polluting industries that give a pass by to the other
institutional regulatory mechanisms. There has not been much initiative in this regard by the
banks and other financial institutions in Bangladesh though they play an active role in
Bangladeshs emerging economy. The banking and financial sector should be made to work for
sustainable development. As far as green banking in concerned, Bangladesh's banks and
financial institutions are running behind time. Very negligent numbers of commercial banks in
our country have introduced green banking correct but also in a short range.
The number of green banks should be increased because the future prospect of green banking is
very bright in our country for the following reasons:
The banks are encouraged to be green by Bangladesh bank,
Recently the government made the companies mandatory to use solar plants to save

electricity.
Government has taken initiatives to digitize the banking transactions introducing online

banking which encourage the paperless banking.

The commercial banks will be subsidized by Bangladesh bank if they start practicing

green banking and so on. It is time Bangladesh to take some major steps to gradually
adhere to the Green banking principles-guidelines that use environment sensitive
parameters apart from financial, to fund projects for sustainable development of the
country.
Banks and business in Bangladesh passed a critical year, surfing through an unprecedented
climate both at home and abroad in 2015. Amid challenges, the banking industry witnessed a
major change, deregulation in some major areas including the interest and exchange rate in the
outgoing year. Soaring inflation, record bank borrowing by the government, sliding foreign
investment, aid and remittances, a bearish stock market and lack of infrastructure were the main
barriers at the local level that left the banks in tight spot. A shift in imports form food grains to
fuel oils and fertilizers also affected banks business in the outgoing year. However the liquidity
crisis was the most discussed issue in 2015. In the international front, ongoing sovereign debt
crisis in Europe, which is a major destination for Bangladeshs exports, and the troubled US
38

economy, also hit local businesses. IBBL has a great reputation for welfare banking in the
industry, thats why IBBL has an acceptance among the clients. The market is very competitive
and thats why, we think that green banking can be an effective instrument for keeping present
image to long term. Being the largest private sector commercial bank and having the maximum
stake-holders, IBBL has the ample scope for promoting the awareness about environment
friendly activities and it is utilizing the scope for disseminating awareness amongst the masses
accordingly to keep the globe eligible for habitation.

Islami bank needs to be made fully aware their clients of the environmental and social guidelines
to which banks worldwide are agreeing to as far as green banking is concerned, Islami Bank
Bangladesh Limited is far behind their counterparts from developed countries. If Islami bank
desire to enter global markets, it is important that they recognize their environmental and social
responsibilities.

In addition to mitigating risks, green banking opens up new markets and avenues for product
differentiation. The survival of the banking industry is inversely proportional to the level of
global warming. Therefore, for sustainable banking, Bangladesh banks should adopt green
banking as a business model without any further delay.

39

5.2 Recommendation
Bank should keep following aspects in mind while financing any projects:
1. Investing in environmental projects (recycling, farming, technology, waste etc.) for
example reduced-rate of interest on loans to homeowners who install a solar energy
system
2. Providing option for customers to invest in environmentally friendly banking products
3. Investing in resources that combine ecological concerns and social concerns.
4. The report should be evaluated on the basis of potential negative and positive
environmental effects and then compared with the without report situation. There
should be an Environmental Impact Assessment (EIA) of each report recommending
the measures needed to prevent, minimize and mitigate the environmental negative
impact before financing the projects.
5. The bank should assess the sensitive issues like vulnerable groups; involuntary
displacement etc. and projects should be evaluated in terms of environmentally
important areas including wetlands, forests, grasslands and other natural habitats.
6. IBBL need to evaluate the value of real property and the potential environmental
liability associated with the real property. Therefore, the banks should have right to
inspect the property or to have an environmental audit performed through the life of the
loan.
7. Banks also need to monitor post transaction for the ideal environmental risk
management program during the project implementation and operation. There should
be physical inspections of production, resources, training and support, environmental
liability, audit programs etc.
8. The next round of evaluation includes loan structuring, credit approval, and credit
review and loan management. Further banks have annual audits, quarterly
environmental compliance certificate from the independent third party and also from
the government.

40

References
Iqbal KabirMohon,(2014), Islami Economics and Banking, (15th Edition), Jerin Publishers.
Dhaka,Bangladesh, PP: 274-284
Islami Bank Bangladesh Limited, 2013-2014, Annual Report 2013-2014 Islami Bank
Bangladesh Limited, Dhaka, Bangladesh
Islami Bank Bangladesh limited Variety of green banking activities of IBBL viewed on
December 05, 2015, <http://www.scribd.com/doc/Green-Banking-Emerging-Demand-of-IslamiBank-Bangladesh-Limited,>
Islami Bank Bangladesh Limited, Overview of the Organization, viewed on December 01,
2015, <www.islamibankbd.com/home/overview-of-ibbl.html,>
Mohammad Abdul Mannan (2015), Islami Bank Management, (6th Edition), Dhaka,
Bangladesh, PP: 113-125
Major Green Banking Performance Activities of IBBL, Disclosure of Islami bank Bangladesh
limited, viewed on December 02, 2015, <www.islamibankbd.com/./IBBL and Disclosure,>