INTERNSHIP REPORT

ON

DIFFERENCE BETWEEN SHARIAH BASED BANKING &

CONVENTIONAL BANKING OF EXIM BANK

1
 Uttara University

Submitted to:

Soeb Md. ShoayebNoman

Assistant Professor &Coordinator BBA Program
Department of Business Administration
Uttara University

Submitted by:

Abdullah Al-Mamun
Bachelor of Business Administration
M-21531111066
Batch & Section: 38thB

Date of Submission: 14dce ,2019

2
 Letter of Transmittal

14Dce, 2019
The Supervisor
Soeb Md. ShoayebNoman
Assistant Professor & Coordinator BBA Program
Department of Business Administration
Uttara University
Subject: Submission of Internship Report .

Dear Sir,

With due respect, I am submitting my Internship report on the topic titled “Difference Between
Shariah based banking & Conventional banking on EXIM Bank” as a partial fulfillment of
my BBA Program. It is my pleasure to inform you that The report contains about shariah based
banking and conventional banking of EXIM Bank ltd, Joydebpur Branch, where I worked as an
intern for three months.
Due to time constraints, I have tried as much as possible to avoid giving any vague
information.If such arises I am prepared to clarify them.

Therefore, I sincerely hope that you will appreciate my effort.

Sincerely yours,

____________
Abdullah Al-Mamun

M-21531111066
Batch & Section: 38th B

Department of Business Administration,

Uttara University

3
 Student’s Declaration

I am Abdullah Al-Mamun student of Uttara University hereby declare that the internship project
work entitled ‘Difference between shariah based banking & conventional banking of Exim
bank.’ submitted to Uttara University as a part of my BBA curriculum is a report of an original
work done by me under the supervision of Soeb Md. ShoayebNoman (Assistant Professor &
Coordinator BBA, Uttara University).

This report has not been previously submitted for any purpose like examination, journal etc.

_____________
Abdullah Al-Mamun

M-21531111066
Batch & Section: 38th B
Department of Business Administration
Uttara University

4
 Supervisor’s Declarations

14Dce,2019

Abdullah Al-Mamun

id – M21531111066
Department of Business Administration
Uttara University
Subject: Supervisor’s declarations.
Dear student,
I, amSoeb Md. ShoayebNoman certify that Abdullah Al-Mamun, Id- M-21531111066, Batch-
38 , Major- Accounting Information System was assigned by the Department of Business
Administration, Uttara University under my supervision to fulfill his internship report. He joined
Exim bank Ltd. to complete his three months of internship. His internship topic is ‘Difference
between the shariah based banking & Conventional banking’. I’d also like to thank Exim bank
Ltd for giving him the opportunity to complete his internship at their organization. This
internship report is prepared under my supervision and has not been submitted to anywhere for
any other purpose.

I hope this study and experiences that he gathered will help him in building up his career.

__________________

Soeb Md. ShoayebNoman

Assistant Professor & Coordinator BBA Program
Department of Business Administration
Uttara University

5
 Acknowledgement
At first I would like to express my gratitude to almighty Allah who has given me the opportunity
to go through the total process of internship and to write a report in this regard.

I would like to mention some people with due respect and honor who assisted me, without any
hesitation to complete my Internship report within the due time. Therefore, I would like to thank
them a lot all from the bottom of my hearts. In this procedure, at first, I would like to thank my
faculty supervisor Soeb Md.ShoayebNoman (assistant professor & coordinator
bbaprogram,DBA) ,sir for him kind effort to supervise me on the right direction to accomplish
my internship goal.

Most importantly I would like to give my thanks to honorable Mstshoruviakter(Trainee

assistant officer) madam&Md. Bonieaminsir (p.o& operation manager), who were always
helpful and ready to guide to the right path if I’ve faced any difficulties during the period of my
internship.

I’d also like to thanks kamal Hossain mojumder sir( assistant vice president &
manager)&Humaionkabir ( accounts officer) sir who helped me accomplish my tasks given
during the internship period and for helping on collecting data for this report.

I was closely attached with them during my internship period. Without their help this project
would have been difficult to complete.

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Contents
1.1 Introduction: ................................................................................................................................... 11
1.2 Broad objective: .............................................................................................................................. 11
1.3 Specific objective: ............................................................................................................................ 11
1.4 Limitations:...................................................................................................................................... 12
2.1 EXIM BANK OVERVIWE: ............................................................................................................ 14
2.2 Organization structure of EXIM Bank (Head office) : - ...................................................................... 16
2.3 Vision and Mission: ......................................................................................................................... 17
2.4 Corporate culture: ........................................................................................................................... 17
2.5 Awards and Achievement: ............................................................................................................... 18
2.6 Financial analysis :- .......................................................................................................................... 19
2.6.1 Return on asset (ROA): .............................................................................................................. 19
2.6.2 Return on Equity: ...................................................................................................................... 20
3.1 Data collection method.................................................................................................................... 23
3.2 Data sources method :- .................................................................................................................... 23
3.2.1Primary sources ......................................................................................................................... 23
3.2.2Secondary sources ..................................................................................................................... 23
3.3 Data Processing :- ............................................................................................................................ 24
4.1 What is bank ? ................................................................................................................................. 27
4.2 Types of banks in Bangladesh :- ....................................................................................................... 27
4.2.1 Public banks : ........................................................................................................................... 27
List of Bangladesh public banks : ........................................................................................................ 28
4.2.2 Specialized banks :- .................................................................................................................. 28
List of Bangladesh specialized banks :- .................................................................................................. 28
4.2.3 Privet banks :- ........................................................................................................................... 28
List of Bangladesh privet banks :- .......................................................................................................... 29
(Incorporated in Bangladesh excluding Islamic Banks): ...................................................................... 29
(Islamic banks) :- ................................................................................................................................... 30
4.2.4 Foreign Banks :- ........................................................................................................................... 30
Foreign banks list in Bangladesh :- ........................................................................................................ 30
4.3 Conventional banking :- ................................................................................................................... 33

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4.4 Roll of Conventional banking system :-........................................................................................... 33
4.5 Products of conventional banking :- ................................................................................................. 33
4.6 Shariah Based Banking :- .................................................................................................................. 38
4. 7 Role of shariah based banking :-...................................................................................................... 38
4.7 List of banks name shariah based banking in Bangladesh :- .............................................................. 40
4.9 Comparative study between shariah based banking and conventional banking :- ............................... 43
5.1 Conclusions :- .................................................................................................................................. 46
5.2 Recommendations :- ........................................................................................................................ 46
6.1 Internship Experience :- ................................................................................................................... 48
6.2 Linkage between educational program and internship ..................................................................... 48
6.3 The type of work I accomplished...................................................................................................... 48
Reference :- ........................................................................................................................................... 49

8
 Executive summery

The internship report has been prepared on “difference between Shariah based banking and conventional
banking”. As Exim bank was a conventional bank later become a Shariah based bank , it is easy to me to
find the difference between the Shariah based banking and conventional banking . The conventional
banking is very dependent upon the interest in every view of banking. While the shariah based banking
is totally against the interest in every view of banking. The shariah based banking and conventional
banking, have very difference, which is mainly in products. Products are offering just like the interest
banks offers credit cards, debit cards, loans on interest, leasing on interest. But the shariah based
banking offer different products which are totally on the Islamic halal rules Murabaha, Ijara, Ijarah-wal-
iqtina, Musharakah,Musawamah, Istisna’a, BaiMuajjal etc. so these products are totally different from
that of conventional banking.

9
 Chapter-1
Introduction

10
1.1 Introduction:
“Islamic banking, also known as non-interest banking, is a banking system that is based on the principles
of Islamic or Sharia law and guided by Islamic economics. Two fundamental principles of Islamic
banking are the sharing of profit and loss, and the prohibition of the collection and payment of interest
by lenders and investors. Islamic law prohibits collecting interest or "riba."”

Conventional Banks (CBs) borrow money from depositors at a low interest rate and lend them to
borrowers at a high interest rate. In contrast, interest is forbidden in Islam and therefore
Islamic banks enter into profit-sharing arrangements with both depositors and borrowers.

Exim bank was incorporated on 02 june 1999 as a public limited company under the banking companies
1994 and started operation on 03 august 1999. Exim bank is one of the best Islamic bank in Bangladesh
committed to conduct all banking activities under Islamic bank shariah principle since its conversion on
04/07/2004 from conventional banking to “shariah based Islamic bank “.

This report focuses on the difference between Islamic banking and conventional banking. There are
several Islamic banks in Bangladesh. For specific and detailed analysis and comparison for this report I
choose EXIM bank Bangladesh LTD which was a conventional bank at past now become an Islamic
bank.

1.2 Broad objective:shariah based bankingdifference between conventional bankingreport on

Exim bank.To find out how shariah based banking of exim bank is different from conventional banking.

1.3 Specific objective:

 To understanding the banking sectorof Bangladesh.
 To know about the conventional banking
 To know about theShariah Based banking
 To make Comparative study about the differences between Shariah Based Banking and Conventional

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1.4 Limitations:
The limitations of the study are as follows:

1.Shortage of time: Three months is not enough to understand all banking proses and activities

2. Insufficient data: It was disable to gather some wished for information due to confidentially.

3.CoustomerInformation: Some customers are not compatible with questions asked to them,
therefore gave obscure information.

4.Busy working environment: The officials had some times been unable to provide information
because of their huge routine
work

12
 Chapter-2
Company Profile

13
2.1 EXIM BANK OVERVIWE:
Export Import Bank of Bangladesh Limited was established in the year 1999 under the leadership of
Late Mr. Shahjahan Kabir, Founder Chairman who had a long dream of floating a commercial bank
which would contribute to the socio-economic development of our country. He had a long experience as
a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the
founder chairman to materialize his dream. Indeed, all of them proved themselves in their respective
business as most successful star with their endeavor, intelligence, hardworking and talent
entrepreneurship. Among them, Mr. Nazrul Islam Mazumder who is an illuminated business tycon in the
Garments business in Bangladesh became the Honorable Chairman after the demise of the honorable
founder chairman. He is also the chairman of Bangladesh Association of Banks (BAB). Under his
leadership, BAB has emerged as an effective forum for exchanging views on problems being faced by
the banking sector of Bangladesh and for formulating common policy guidelines in addressing such
problems.

The Bank starts functioning from 3rd August, 1999 with its name as Bengal Export Import Bank
Limited. On 16th November 1999, it was renamed as Export Import Bank of Bangladesh Limited with
Mr. Alamgir Kabir as the Founder Advisor and Mr. Mohammad Lakiotullah as the Founder Managing
Director respectively. Both of them have long experience in the financial sector of our country. By their
pragmatic decision and management directives in the operational activities, this bank has earned a
secured and distinctive position in the banking industry in terms of performance, growth, and excellent
management. Under the leadership of Mr. Lakiotullah, the Bank has migrated all of its conventional
banking operation into Shariah Based Islami Banking in the year July 2004.

In the year 2006, Mr. KaziMasihur Rahman became the Managing Director of the bank when Mr.
Lakiotullah left the bank after completion of his successful 7 years as MD. Mr. Kazi served in the bank
for next five years. Under his leadership, the bank has been placed on a state of the art centralized IT
platform with two modern data centers where world renowned core banking software TEMENOS T24 is
running along with some alternate delivery channels like ATMs and SMS banking.

14
On 25th August, 2011, Mr. Md. Fariduddin Ahmed has joined in the bank as Managing Director. With
his long banking experience, EXIM Bank become fully compliant Bank with adequate capital and good
asset quality. After retirement from Managing Director, he has been continuing his service for EXIM
Bank as Advisor since 27th July 2012.

Dr. Mohammed Haider Ali Miah succeeded Mr. Fariduddin Ahmed on July 25, 2012 and has created a
new dimension in EXIM history becoming the first ever in-house Managing director and CEO of the
Bank. Under his far-sighted leadership, EXIM Bank has not only achieved uppermost level of
performance in almost each arena of its activities but also gained confidence to place itself as one of the
dynamic banks through delivering transparent and standard banking services to the customers in a
compliant manner.

15
2.2 Organization structure of EXIM Bank (Head office) :-

CEO
Managing Director(M.D)

Deputy Mananging Director(D.M.D)

Senior Executive Vice Precident

Executive Vice Precident(E.V.P)

Senior Vice Precident(S.V.P)

Vice Precident(V.P)

Senior Asst. Vice Precident(S.A.V.P)

Asst. Vice Precident(A.V.P)

Senior Principle Officer

Principle Officer

Executive Officer

Officer

Asst.Officer/ Asst. Cash Officer

trainee officer

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2.3Vision and Mission:

Vision:The gist of our vision is "Together Towards Tomorrow". Export Import Bank of Bangladesh Limited
(Exim Bank) believes in togetherness with its customers, in its march on the road to growth and progress
with service. To achieve the desired goal, there will be constant pursuit of excellence in compliance with the
Islamic Shariah. We believe the advantages of Islamic economy can best be extended to the people with a
technology-driven modern banking system that upholds the Islamic values, and Exim Bank envisages
making itself a perfect instance of that kind. The Bank’s strategic plans and networking will strengthen its
competitive edge over others in rapidly changing competitive environment. Its personalized quality services
to the customers with trend of constant improvement will be the cornerstone to achieve our operational
success.

Mission:

 Extracting the full benefit of Islamic banking system for its customers.
 Providing with quality financial services especially in Foreign Trade.
 Maintaining and upgrading a technology-based professional banking environment
 Maintenance of corporate and business ethics and transparency at all levels
 Sound capital Base
 Ensure sustainable growth for the honorable stakeholders
 Fulfillment of corporate social commitments, and
 Above all, to add to the national economy

2.4 Corporate culture:

Organizational culture is considered as an essential component of business corporations as it has
the ability to bind organizational members together. The culture and values of our bank have
been proved as a source of competitive advantage for us and are acting as a key component to
establish the relationship between the bank and our employees and , in turn , between our
employees and our customers. Our culture and values also encourage customers and employees
to join us and stay with us.

17
EXIM Bank has also been able to improve organizational performance via improving the
performance of individual contributors and also recognizes existing talents to fill up the higher
vacancies within the organization or place them in the right position, wherein the best use of
their abilities can be ensured. Our culture promotes sharing of common goal which ensures
harmonious relationship in the working environment.

2.5 Awards and Achievement:

Awards:

From the very beginning of its journey Exim Bank set a standard in service which made the bank
outstanding. Its commitment to the Quality Management, Good Governance, continuous effort to improve in
all sects, excellence in service as well as CSR activities always been appreciated at home and abroad. In
consequence, Exim Bank achieved several national and international awards.

 ICMAB best corporate award 2013

 International “BIZZ Awaed-2013”
 “International diamond prize for excellence in Quality” award
 “World Finance” award

Achievement:

 First private sector bank to open exchange house in UK

 Implementation of the world renowned core banking software( TEMENOS T24)
 Conversion from conventional banking to shariah based islami bankingData collection

18
2.6 Financial analysis :-
2.6.1 Return on asset (ROA):
The Return on Assets ratio is an important profitability ratio because it measures the efficiency
with which the bank is managing its investment in assets and using them to generate profit.
ROA Formula:
𝑅𝑒𝑡𝑢𝑟𝑛𝑜𝑛𝐴𝑠𝑠𝑒𝑡 = (Net profit after tax / Total Asset) × 100

Year 2014 2015 2016 2017 2018

Net profit after Taxes 2,465.68 2,086.55 3,039.76 3,298.43 2,332.52
Total asset 232,833.89 265,148.42 291,133.91 333,892.61 371,510.07
Return on Asset
(in %) 1.15 0.84 1.09 1.06 0.66
Source: Annual report of Exim Bank Ltd. (2014-2018)

Return on Equity

11.78 12.19
11.34

8.68 8.35

2014 2015 2016 2017 2018

Figure 09: Return on Assets of Exim Bank Ltd.

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Interpretation:Here, from 2014 to 2018Exim Bank shows a declining trend in ROA. in 2015 its
decrease from 2014 and in 2016 its increase again from 2015. In 2017 its not change deeply. In
2018 it decreased in 0.66%.

2.6.2 Return on Equity:

This ratio indicates how profitable a company is by comparing its net income to its average
shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders
earned for their investment in the company.
The Formula of ROE:
Return on equity = (Net profit after tax / total shareholder equity) × 100
Year 2014 2015 2016 2017 2018
Net profit after Taxes 2,465.68 2,086.55 3,039.76 3,298.43 2,332.52
Total shareholders’ equity 22,977.06 25,122.42 26,467.75 27,650.37 28,216.30
Return on Equity (in %) 11.34 8.68 11.78 12.19 8.35
Source: Annual report of Exim Bank Ltd. (2014-2018)

Return on Equity

11.78 12.19
11.34

8.68 8.35

2014 2015 2016 2017 2018

Figure 10: Return on Equity of Exim Bank Ltd.

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Interpretation:In this graph we can ROE is increasing every year from 2014 to 2018. Then
suddenly it started to decrease and became 8.68% in 2015 after that 8.35% in 2018. The reason
behind the decreasing ROE is growing number of NLP in bank and political influence.

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 Chapter-3
Data Collection and Processing

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3.1 Data collection method

Relevant data for this report has been collected primarily by direct investigation of different
records, papers. Documents operational process and different personnel. No structured
questionnaire has been used. Information regarding office activities of the bank has been
collected through consulting and discussion with bank personnel.

3.2Data sources method :-

Both primary and secondary source of data are used to complete this study. These two
sources are explained below :

3.2.1Primary sources
To collect primary data, I’ve taken some steps:

 Face to face conversation with the bank officers and staffs

 Conversation with the bank clients

 Different manuals of EXIM Bank Ltd.

 Different notices of EXIM Bank Ltd.

3.2.2Secondary sources
I’ve also taken some information from secondary sources, as_

 Annual report of EXIM Bank Ltd.

 Different papers of EXIM Bank Ltd.

 Files and documents of the branch

 Unpublished data

23
3.3 Data Processing :-
To process the data, I took help of several software’s like Microsoft Excel, Snipping tools etc. To
process the raw data into information I had to go record data regularly in my note book and find
the linkage of data every day.

24
 Chapter-4
Discussion on the study objectives

25
 Objective-1

To understanding the banking sector of Bangladesh.

26
4.1 What is bank ?
A financial intermediary accepting deposits and granting loans , offers the widest menu of
services of any financial institution . Bank is a actually a financial institution which actually
receives money from to surplus unit and lends that money to the deficit unit of the society. The
word of banks comes from the frence word banquet, Italian word banca, German word banc. All
of this word means bench or counter. Benches were used as desks by Florentine bankers, Who
used to make their transactions covered by green tablecloths. Another possible origin may be
from Sanskrit words “byaya”(expense) and “onka” (calculation) =byaya +onka.

4.2 Types of banks in Bangladesh :-

1. Public banks
2. Specialized banks
3. Privet banks
4. Foreign banks

4.2.1 Public banks :

Public Bank is a chartered depository bank in which public funds are deposited. A Public Bank is
owned by a government unit—a state, county, city, or tribe—and mandated to serve a public mission
that reflects the values and needs of the public that it represents. According to Ellen Brown, public
ownership of a bank is distinct from socialism in that the latter is government ownership of the means
of production, whereas public banking involves government oversight of the credit and debit system that
facilitates economic exchange, including that of free markets.

Bangladesh public banks works in some instruction of central bank under.Public banks come in a variety
of models. A public bank might be capitalized through an initial investment by the country, as well as
through tax and fee revenue. A public bank, like a private bank, can take tax revenues and other
government income as deposits, create money in the form of bank credit, and lend at very low interest
rates. Where private banks are committed by their business model to take advantage of low interest rates
by charging higher rates to borrowers, a public bank has no shareholders to pay, and so can pass the low
rates onto borrowers such as public agencies, local businesses, residents, and students. At the same time
because much of a public bank’s funding comes from state deposits that would otherwise earn more
from a private bank, there is a hidden subsidy that acts as a transfer from taxpayers to borrowers.

27
List of Bangladesh public banks :
1. Agrani Bank Limited.
2. Janata Bank Limited.
3. Rupali Bank Limited.
4. Sonali Bank Limited.
5. Bank of Small Industries and Commerce Bangladesh Ltd.
6. Bangladesh Development Bank Limited.

4.2.2 Specialized banks :-

Specialized Banks are banks which concentrate mainly on financing specialized economic and social
activities. Specialized activities may be small and cottage industries financing. Financing the rural asset
less and landless people etc.

List of Bangladesh specialized banks :-

1. Bangladesh Krishi Bank.
2. RajshahiKrishiUnnayan Bank.
3. Bangladesh Development Bank Limited

4.2.3 Privet banks :-

Private banking is banking, investment and other financial services provided by banks to high-net-worth
individuals (HNWIs) with high levels of income or sizable assets. Private banking forms a more
exclusive (for the especially affluent) subset of wealth management . The term private bank refers to
customer service rendered on a more personal basis than in mass-market retail banking , usually via
dedicated bank advisers. It does not refer to a privet banks, which is a non-incorporated banking
institution. Private banking is the way banking originated. privet bank develop the country growth and
financial environment.

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List of Bangladesh privet banks :-
(Incorporated in Bangladesh excluding Islamic Banks):
1. AB Bank Ltd.
2. National Bank Ltd.
3. The City Bank Ltd.
4. International Finance Investment and Commerce Bank Ltd.
5. United Commercial Bank Ltd.
6. Pubali Bank Ltd.
7. Uttara Bank Ltd.
8. Eastern Bank Ltd.
9. Prime Bank Ltd.
10. National Credit and Commerce Bank Ltd.
11. Southeast Bank Ltd.
12. Dhaka Bank Ltd.
13. Dutch Bangla Bank Ltd.
14. Mercantile Bank Ltd.
15. Standard Bank Ltd.
16. One Bank Ltd.
17. Bangladesh Commerce Bank Ltd.
18. Mutual Trust Bank Ltd.
19. Premier Bank Ltd.
20. Bank Asia Ltd.
21. Trust Bank Ltd.
22. Jamuna Bank Ltd.
23. BRAC Bank Ltd.
24. NRB Commercial Bank Ltd.
25. South Bangla Agriculture and Commerce Bank Ltd.
26. Meghna Bank Ltd.
27. Midland Bank Ltd.
28. The Farmers Bank Ltd.
29. NRB Bank Ltd

29
 30. Modhumoti Bank Ltd.
31. NRB Global Bank Ltd

(Islamic banks) :-
1. EXIM Bank Ltd.
2. Islami Bank Bangladesh Ltd.
3. ICB Islamic Bank Ltd.
4. Al-ArafahIslami Bank Ltd
5. Social Islami Bank Ltd
6. First Security Islami Bank Ltd.
7. ShahjalalIslami Bank Ltd.
8. Union Bank Ltd.

4.2.4 Foreign Banks :-

A foreign bank with the obligation of following the regulations of both its home and its host countries.
Loan limits for these banks are based on the capital of the parent bank, thus allowing foreign banks to
provide more loans than other subsidiary banks.This banks are working looks like a privet bank.
Bangladesh privet banks and foreign banks working system as look like a same. But Bangladesh privet
bank owners are Bengali citizen that’s why this privet banks are Bangladesh property . But foreign
banks are working different countryes. But this banks main branch other stay .

Foreign banks list in Bangladesh :-

1. Standard Chartered Bank
2. State Bank of India
3. Habib Bank Ltd.
4. Citi Bank, N.A.
5. Commercial Bank of Ceylon Ltd.
6. National Bank of Pakistan
7. Woori Bank

30
8. The Hong Kong & Shanghai Banking Corporation Ltd.
9. Bank Al-Falah Ltd.

31
 Objective -2

To know About The Conventional Banking

32
4.3 Conventional banking :-
Conventional Banks (CBs) borrow money from depositors at a low interest rate and lend them to
borrowers at a high interest rate. In contrast, interest is forbidden in Islam and therefore
Islamic banks enter into profit-sharing arrangements with both depositors and borrowers.

Conventional banking is based on principle that the more you have, the more you can get. In other
words, if you have little or nothing , you get nothing, as a result, more than half the population of the
world is deprive of the financial services of the conventional banks.

4.4 Roll of Conventional banking system :-

conventional banks are following some activates :-

processing of payments by way of telegraphic transfer , internet banking or other means issuing
bank drafts and checks , accepting money on term deposit , lending money by overdraft ,
installment loan , or other means providing documentary and standby letter of credit ,guarantees ,
exposures . safekeeping of documents and other items in safe deposit boxes, sales, distribution,
or brokerage , with or with out advice, of insurance, unit trusts , and similar financial products as
a financial supermarket.

Cash management and treasury , merchant banking and private equity financing traditionally ,
large conventional banks also underway in bonds , and make markets in currency , interest rates ,
and credit-related securities , but today large conventional banks usually have an investment
bank arm that is involved in the mentioned activities.

4.5 Products of conventional banking :-

1. Transactional accounts
2. Saving accounts
3. Certificate of deposit
4. Credit card
5. Debit card
6. Mortgage loan
7. Unsecured debt (personal loan)

33
 8. Loan

 Transactional Account :-

A transactional accounts is deposit account held at a bank or other financial institution, for the
purpose ofsecurely and providing frequent access to funds on demand , through a variety of
different channels. Transactional accounts are mean neither for earning interest nor for the
purpose of saving but for convenience of the business or personal.

 Savings accounts :-

Saving accounts are maintained by retail financial institutions that pay interest but can’t be used directly
as money in narrow sense of medium of exchange . these accounts let customers set aside a portion their
liquid assets while earning a monetary returen.

 Certificate of deposit :-

A certificate of deposit (CD) is time deposit, a financial I product commonly offered to consumers in the
united states by banks , thrift institutions , and credit unions. CDs are similar to savings accounts in that
they are insured and thus virtually risk free; they are money in the bank.

 Credit Card :-

Credit card is small plastic card issued to users as a system of payment. It allows its holder to buy
goods and services based on the holders promise to pay for these goods and services. The issuer of
the card creates a revolving account and grants a line of credit to the consumer from which the user
can borrow money for payment to a merchant.

 Debit card :-

A debit card is a plastic card that provides the cardholder electronic access to his or her bank accounts at
a financial institution. Some cards have a value with which a payment is to be made, while most relay a

34
message to the cardholder’s bank to withdraw funds from a designated accounts in favor of the payee’s
designated bank accounts.

 Mortgage loan :-

The word mortgage is a law French term meaning either “death contract” meaning that the pledge ends
(dies) when the obligation is to be fulfill or the property taken through foreclosure. A mortgage loan is a
loan secured by real property using mortgage note, which evidence the existence of the loan and the
encumbrance of that realty through the granting of mortgage.

 Unsecured DEBT (personal loan) :-

Personal loan refers to any type of debt or general obligation that was not collateralized by a lien on
specific assets of the borrower in the case of bankruptcy or liquidation or failure to meet the terms for
repayment. In some legal systems , unsecured creditors who are also indebted to the insolvent to the
insolvent debtor are able to set-off the debts .

 Loan :-

A loan is a type of debt. Like all debt instruments , a loan entails the redistribution of financial assets
over time, between the lender and borrow . In a loan , the borrower initially receives or borrows an
amount of money , called the principal , from the lender , and is obligated to pay or reply an equal
amount of money to lender later.

List of Banks name conventional banking in Bangladesh :-

1. Ab bank limited
2. Bangladesh commerce bank limited
3. Bank Asia limited
4. BRAC Bank limited
5. City bank limited
6. Community Bank limited
7. Dhaka Bank limitet
8. Dutuch- Bangla Bank limited

35
9. Eastern Bank limited
10. IFIC Bank limited
11. Jamuna Bank limited
12. Meghna Bank limited
13. Mercantile Bank limited
14. Midland Bank limited
15. Modhumoti Bank limited
16. Mutual Trust Bank limited
17. National bank limited
18. National credit & commerce Bank limited
19. NRB Bank limited
20. NRB commercial Bank limited
21. NRB Global Bank limited
22. One bank limited
23. Padma bank limited
24. premier Bank limited
25. Prime Bank limted
26. Pubali Bank limited
27. Shimanto bank limited
28. South Bangla Agriculture and commerce bank limited
29. Trust bank limited
30. United commercial bank limited
31. Uttara bank limited

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 Objective-3

To Know About TheShariah Based Banking

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4.6Shariah Based Banking :-
“Islamic banking, also known as non-interest banking, is a banking system that is based on the principles
of Islamic or Sharia law and guided by Islamic economics. Two fundamental principles of Islamic
banking are the sharing of profit and loss, and the prohibition of the collection and payment of interest
by lenders and investors. Islamic law prohibits collecting interest or "riba."”

4.7 Role of shariah based banking :-

Since this system of banking is grounded is Islamic principles, all the undertaking of the banks follow
Islamic morals. Therefore, it could be said that financial transactions within Islamic law banking are a
culturally distinct from of ethical investing Islamic bank, formed in 1975.

Shariah based banking refers to system of banking activities that’s consistent with shariah law principles
and guided by Islamic economic . In particular ,shariah law prohibits usury, the collection , and payment
of interest commonly called riba. In addition shariah law prohibits investing in business that are
considered unlawful .

4.8 Products of shariah based banking :-

1. Murabaha
2. Ijarah
3. Ijarah-Wal-Iqtina
4. Musharakah
5. Musawamah
6. Istisna’a
7. Bai Muajjal
8. Mudaraba
9. Bal Salam

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  MURABAHA :-

Literally , it means a sale on mutually agreed profit. Technically, it is a contract of sale in which the
seller declares his cost and profit. Shariah based banks have adopted this as a mode of financing. As a
financing . It is involve a request by the client to the bank to purchase certain goods for him. The bank
does that for that for a definite profit over the cost, which is stipulated in advance.

 IJARAH :-

Ijara is a contract of a known proposed usufruct against a specified and lawful return or consideration
for the service or return for the benefit proposed to be taken , or for the work proposed to be expended.
In other words ,Ijara is the transfer of usufruct for a consideration which is rent in case of hiring of
assets and wage in case of hiring of persons.

 IJARA-WAL-IQTINA :-

A contract under which an Shariah based banks provides equipment , building , or other assets to the
client against an agreed rental together with a unilateral undertaking by the bank or the client that at the
end of the lease period, the ownership in the asset would be transferred to the lessee. The undertaking or
the promise does not become an integral part of the lease contract to make it condition.

 MUSHARAKAH :-

Musharakah means a relationship established under a contract by the mutual co;nsent of the parties for
sharing of profits and losses in the joint business . it is an agreement under which the Shariah based
banks provides funds , which are mixed with the funds of the business enterprise and others. All
providers of capital are entitled participate in management , but not necessarily to do so.

 MUSAWAMAH :-

Musawamah is a general and regular kind of sale in which price of the commodity tobe traded is
bargained between seller and buyer without any reference to the price paid incurred by the former. Thus
, it is different from murabaha in respect of pricing formula . unlike MURABAHA , SELLER IN
Musawamah is not obliged to his cost. Bothe the parties negotiate one the price.

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  ISTISNA’A :-

IT is a contractual agreement for manufacturing goods and commodities , allowing cash payment in
advance and future delivey or future payment. Istisna’a can be used for providing the facility of
financing the manufacture of house , plants , projects ETC.

 BAL MUAJJAL :-

It means a credit sale .a financing adopted by Shariah based banks takes the form of MuarbahaMuajjal.
It is a contract in which the banks earns a profits margin on his purchase price and allow the buyer to
pay the price of the commodity and the margin of profit is mutually agreed.

 MUDARABA :-

A from of partnership where one party provides the funds while the other provides expertis and
management. The latter is referred to as the Mudarib. Any profits accrued are share between the two
parties on pre – agreed basis, while loss is borne only by the provider of the capital.

 BAI SALAM :-

Salam means a contract in which advance payment is made for goods to be delivered later on .the seller
undertakes to supply some specific goods to the buyer at the future date in exchange of an advance price
fully paid at the time of contract. It is necessary that the quality of the commodity intended to be
purchased be fully specified leaving no ambiguity leading to dispute.

4.7 List of banks name shariah based banking in Bangladesh :-

1. EXIM Bank Ltd.
2. Islami Bank Bangladesh Ltd.
3. ICB Islamic Bank Ltd.
4. Al-ArafahIslami Bank Ltd
5. Social Islami Bank Ltd
6. First Security Islami Bank Ltd.

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7. ShahjalalIslami Bank Ltd.
8. Union Bank Ltd.

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 Objective – 4

To make Comparative study about the differences between Shariah

Based Banking and Conventional

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 4.9Comparative study between shariah based banking and conventional banking :-

Shariah laws are the tenets of Islamic banking .as such , the comparison with of the conventional is not
exactly like-to-like. Conventional banking was built upon the fundamentals of debtor – creditor
relationship with interest being the price of credit and reflecting the opportunity cost of money. Money
is a commodity some what. Financial relationship is Islam is generally participatory in nature. The
principles of Musharakah, Mudarabah, and contractual transaction . Islamic Banks and conventional banks
don’t have that much of differences in their mode of operations and other banking service. In additional, risk
and reward relationship is guided by the socio-economic principles.

Shariah based Banking Conventional Banking

1.The functional and operating modes of Shariah
based banks are based on the principles of Islamic
Shariah.
2.It also aims at maximizing profit but subject to
Shariah restrictions.
3.It promotes risk sharing between provider of capital
and the user of funds.
4.Participation in partnership business is the fundeman- 4.Lending money and getting it back with compounding
tal function of the Shariah based banks. Embedded
know your costumer orientation.
5.In modern Shariah based banking system, it has
Become one of the service –oriented functions of the
1.The functional and operating modes of conventional
Banks are based on fully manmade principle’s.
2.Unrestricted profit maximization illustrated by
derivatives trading.
3.The investor/lender is guaranteed of a predetermined
rate of interest or returns.
Interest is the fundamental function of conventional
Banks. Money is commodity and the motivation.
5.It does not deal with Zakat

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Shariah based banks to be a Zakat collection center
And they also pay out their zakat
6.Shariah based banks have no provision to charge any 6.It can charge additional money in case of defaulters.
Extra money from the defaulters except for compensat
-ion .rebates early settlement at the banks discretion.
7.Due important to the public interest. Its ultimate aim 7.Often banks interest becoming forefront. It makes no
isto ensure growth with equity. Effort to ensure growth with equity.
8.For the Shariah based banks, It must be based on a 8.For interest based commercial banks ,borrowing from
Islamic approved underlying transaction. the money market is relatively Easier.
9.The status of shariah based banking relation to it 9.Relationship is often defined as that of creditor-
Scientists that of partners , investors and trader , buyer Debtor.
And seller.
10.This banks profit and loss, the Islamic banks pay 10.This banks loans are fixed, its gives little importance
greater attention to developing project appraisal. To developing expertise in project appraisal.
11. Main objective of Islamic Banks is to bring equity 11. Objective of conventional banks is to maximize profit
and fairness in the human society. of the business.
12.Islamic banks tend to decrease income discrimination 12.Conventional Banks look to keep the money market
and improve financial position of the less fortunate, by steady.
sharing of profit.

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 Chapter-5

Conclusions & Recommendation

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5.1 Conclusions :-

The Shariah based banks seem to be engaged in frontal competition with conventional bank for which
they are ill suited. Whereas the conventional banks have strategically diversified by operating Islamic
product windows, in which case, shari’s-compliant is a longer a product differentiator ; the shariah based
banks are ethically precluded from adopting similar strategy. The summary of the findings of this study
is that conventional banks out perform their Islamic counterpart although Shariah based banks seem
more cost-effective. The Shariah based banks are liquid in comparison with the conventional banks in
terms of the loan to deposit ratio.One Theother hand, the conventional banks are liquid using the cash
investment to deposit ratio. The greater ratio of loan to asset ratio the shariah based banks indicates
grater illiquidity. The efficiency ratios performance of both banks are different.

5.2 Recommendations :-

1. The Exim banks are more efficient than conventional banks and higher capitalization ratio.
2. Exim bank is trying to increase Bank’s investment under Mudaraba&Musharaka modes.
3. Though the loan system is good in Exim bank but Investment approval policy it tough. It is
difficult to get loans from Exim bank.
4. Customers who failed to give reference for opening an account for them the bank should be
flexible.
5. Exim bank is appointed customer service officer in all branches so that customers can get
information easily
6. In the total banking system is it necessary to implement modern banking process instead of
traditional system. This bank change some programs and update ATM booths.

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 Chapter -6

Internship Experience

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6.1 Internship Experience :-
I worked at Exim bank Ltd. only for three months but I am lucky enough to learn a lot of things
in this short period of time. I did not know what the duties of a banks officers. They gave me
different types of works to do. I worked in tanning officers , some time I help them other
assistant manager and second manager etc. I am not only learned these but I also learn the
banking process and practically works .

6.2 Linkage between educational program and internship

As I have worked three months in Exim bank Ltd, I was to know how to work bank officer in
the organization. I also get to know that the Islamic process of Exim bank Ltd. The best thing is
that for working practically I have been able to have a profound knowledge over the
compensation. I came to know different between Shariah based banking and conventional
bankingand I know that how to Exim bank work in Islamic law under. which I can relate with
my academic knowledge. Exim bank Ltd. tries to give a fair policy for which the satisfaction
level of employee is not so high but they are not dissatisfied. Finally it is to mention that I was
able to relate all my academic AIS knowledge with the real environment which is I think will be
highly helpful for my future career.

6.3 The type of work I accomplished

I worked at tanning officer in bank . There I learned
 Rules of thebank .
 How to fill up customer forms.
 How to take customers.
 How to works in bank environment.
 How to took officer and discipline maintains.

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Reference :-
Anual report 0f Exim Bank. (2018). Dhaka. (https://www.eximbankbd.com/)

Detragiache, A. D.-K. ( January 18, 2015). Monitoring Banking Sector Fragility:A Multivariate Logit
Approach. San Francisco: University of California. Retrieved from http://wber.oxfordjournals.org

Madura, J. (2017-2018). International Financial Management (11 Edition ed.). Florida: South Western
CENGAGE learning. Retrieved Nov 6, 2019

Rose, P. S. (2018-2019). Commercial Bank Management. Taxas, America: McGraw-Hill Higher Education.
Retrieved Nov 5, 2019

slideshare. (2019, nov 5). Retrieved from slideshare: https://www.linkedin.com/help/slideshare?lang=en

wikipedia .com (https://en.wikipedia.org/wiki/Exim_Bank_(Bangladesh))

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