Presented by

Md. Fariduddin Ahmed

Advisor
Export Import Bank of Bangladesh Limited
Former
Managing Director & Chief Executive Officer
Export Import Bank of Bangladesh Limited
Islami Bank Bangladesh Limited
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Mudaraba Perpetual Bond (MPB) of Islamic Bank

Bangladesh Ltd.
Purposes and Objectives:
 To raise fund to meet the capital adequacy ratio.
 To enhance the ability to make investment by increasing the
CAR.
 To play pioneering role in creating a Islamic bond market in
the country.
 To create investment avenues for the prospective investors of
the capital market.
 To reduce the cost fund & thereby enhance the benefit of the
stakeholders.
 To avoid repeated issuance of right shares and bonus shares
for equity raising.
 To utilize the raised fund in the prospective/profitable sectors.
Prepared by Forkan Uddin Mahmood
2
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Major Features of the Issue:

Name of the Issuer: Islamic Bank Bangladesh Ltd.
Size of the Issue: Taka 3,000 Million
Taka 1,500 Million (Private Placement – 20.08.2007 to 02.09.2007,
subscribed 2.27 times more)
Taka 1,500 Million (Public Offer – 12.09.2007 to 18.09.2007,
subscribed 2.16 times more)
Principles of distribution of profit:
MPB carries 1.25 weightage for distribution of profit, not less
than 65% of the income generated by deployment of MPB Fund
is distributed to Bondholders.
An additional rate of profit equivalent to 10% of the rate of
dividend declared by the IBBL every year.
No portion of dividend is distributed to the MPB holders.

Prepared by Forkan Uddin Mahmood

3
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Major Features of the Issue (Contd...)

Payment of Profit:
Profit is paid to the Bondholders within 60 days after
approval of accounts of IBBL by the shareholders of IBBL in the
AGM for the relevant year and profit is non-cumulative. Record
date of MPB is the same as the record date of AGM of the
shareholders of IBBL.
Term: Perpetual
Unit Price: Taka 1,000
Market Lot: 5 unit of MPB amounting to Taka 5,000
Credit Rating: Rated A+ by Credit Rating Information
and Services Limited (CRISL).
Trustee: Investment Corporation of Bangladesh (ICB)
Manager to the Issue: ICB Capital Management Limited.

Prepared by Forkan Uddin Mahmood

4
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Special Feature:
MPB is treated as one of the components of Mudaraba Fund
and is governed by the rules and principles of utilization and
distribution of profit of such funds.

Regulatory Approval:
Bangladesh Bank and Securities and Exchange Commission
have approved the MPB.

Approval of the shareholders of IBBL:

The shareholders of IBBL have approved for issuance of MPB
for Taka 3,000 Million in their Extra-ordinary General
Meeting held on 23.02.2007.

Prepared by Forkan Uddin Mahmood

5
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Obligation of the Issuer (IBBL):

MPB of Taka 3,000 Million is secured by montage of fixed
assets of equal value of IBBL in favor of the Trustee.
Trustee is entitled to remuneration of Taka 1.5 Million per
year.
IBBL maintains proper account and submit to the Trustee
the annual Statement of Accounts.
Any unforeseen event is required to be informed to the
Trustee by the Issuer
In addition to the mortgage of fixed assets, IBBL provided
corporate guarantee to the Trustee.

Prepared by Forkan Uddin Mahmood

6
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Transferability:
Listed in the Dhaka & Chittagong Stock Exchanges.

Lock in Provision:
There is no lock-in provision for the investors of the MPB.

Prepared by Forkan Uddin Mahmood

7
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Rights of the Investors:

MPB as a Mudaraba instruments gets priority over the
shareholders in respect of getting profit and also refund of
principal in case of liquidation of the Issuer Bank.
MPB is subordinated to the depositors in respect of
payment of both profit and refund of principal.
MPB is not entitled to enjoy any rights and privilege as
enjoyed by the shareholders except statutory requirements.

Prepared by Forkan Uddin Mahmood

8
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Claim of the Bondholders:

The claim of the bondholders will come in the form of the
securities provided by the issuer and the securities thereby
constituted shall (subject as hereinafter provided) become
enforceable in any of the following events:
If the Issuer is in default in the payment of any income,
which ought to be paid in accordance with the terms and
conditions, prescribed by the Information Memorandum of
Mudaraba Perpetual Bond (MPB).
If the Issuer ceases to carry on its business, or threatens to
do so without the consent of the bondholders and the
Trustee.
If a Court order is made or a special resolution passed for
winding up of the Issuer Bank.
Prepared by Forkan Uddin Mahmood
9
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Claim of the Bondholders (Contd…)

If the Issuer defaults on the performance or observance of
any of covenants, conditions or provisions binding upon IBBL
for issuance of Mudaraba Perpetual Bond (MPB) and the
Issuer fails to perform fully or rectify the breach of any
covenants, conditions or provisions within 30 (thirty) days
from the receipt of a written notice from the trustee requiring
it to do so.
If the Issuer stops payment or has ceased or is unable to
make the payments and it appears to the Trustee that the
further pursuance by the Issuer of its business will endanger
the security hereby created.

Prepared by Forkan Uddin Mahmood

10
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Bondholders Meeting:
The Issuer, if it considers necessary, may call a meeting of
the Bond Holders at any time.
The Trustee may call a meeting of the Bondholders on the
following grounds:
The Securities and Exchange Commission has ordered to
call such a meeting in the interest of the Bondholders.
On requisition from majority i.e. more than 50% of the
Bondholders to call such a meeting but not more than once
in a year.

Prepared by Forkan Uddin Mahmood

11
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Power of Bondholders’ Meeting:

Without prejudice to any of the powers conferred upon on the
Trustee under any of the provisions of the Trust Deed a meeting of
Bondholders shall, inter-alia, have the following power exercisable
in the manner hereafter:
Power to sanction any compromise or arrangement proposed
between the company and the Bondholders.
Power to assent to any modification of the provisions contained in
the Trust Deed which shall be proposed or agreed to by the
Trustee and the Company and to authorize the Trustee to concur
in and execute a supplemental Trust Deed or deed embodying
any such modification.
Power to remove the existing Trustee and to appoint a new
Trustee of Trustees of the Trust.
Prepared by Forkan Uddin Mahmood
12
 Mudaraba Perpetual Bond (MPB) of Islamic Bank Bangladesh Ltd.

Profitability and Return on MPB of the last 3 years:

Sl. Particulars 2009 2010 2011

Profit on Mudaraba Savings Bond
1 9.35% 8.85% 10.00%
(8 years) at 1.25 weightage
2 Dividend Declared 30.00% 35.00% 32.00%
3 10% rate of Dividend 3.00% 3.50% 3.20%
4 Rate of profit on MPB (1+3) 12.35% 12.35% 13.20%
Based on Final rate of
5 Remarks
Profit.

Prepared by Forkan Uddin Mahmood

13
 Bangladesh Government Islamic Investment Bond (BGIIB).

Bangladesh Government Islamic Investment Bond

(BGIIB)
Introduced by the Government of the Peoples Republic of
Bangladesh on September 02, 2004.

Who can buy the Bond?

Bangladeshi individuals or Institutions who are agreeable
to accept Profit/Loss according to Islamic Shariah.
Non-resident Bangladeshis also can buy the Bond with the
amount available to the credit of their non-resident Foreign
currency accounts.

Prepared by Forkan Uddin Mahmood

14
 Bangladesh Government Islamic Investment Bond (BGIIB).

Feature of the BGIIB:

The Bond is issued at Taka 1,00,000 or its multiple for 6, 12
& 24 months terms.
It is transferable among the eligible buyers.
Acceptable as Security against investment/financial facility.
Acceptable as Statutory Liquidity Reserve (SLR) by the
Bangladesh Bank (Central Bank of Bangladesh).
Profit
is paid on maturity with the amount of principal after
deducting prescribed service charges.

Prepared by Forkan Uddin Mahmood

15
 Bangladesh Government Islamic Investment Bond (BGIIB).

Issuing Office & Processes of Issue:

BangladeshBank (Central Bank of Bangladesh) on behalf of
the Government of the Peoples Republic of Bangladesh.
Intending Buyers have to apply to Bangladesh Bank on
prescribed Form.
Bangladesh Bank maintains a special Bond Funds Account
in the name of the Government for accounting purpose.

Prepared by Forkan Uddin Mahmood

16
 Bangladesh Government Islamic Investment Bond (BGIIB).

Investment of BGIIB Fund:

Islamic Banks & Islamic Financial Institutions can obtain
fund from the BGIIB Fund account against mortgage of
unencumbered Securities like Bills and acceptances.
The Fund utilizing Islamic banks/ Financial Institution pay
profit to the Bond Fund at the rate applicable on their
Mudaraba Savings Account on monthly basis at provisional
rate adjustable within 31st March each year at final rate.
The intending Users of the Bond Fund have to apply to
Bangladesh Bank on prescribed Form.
Nominee:
The buyers of the BGIIB can appoint nominee.

Prepared by Forkan Uddin Mahmood

17
 Islami Interbank Fund Market (IIFM)

Islami Interbank Fund Market (IIFM)

Introduced by the Bangladesh Bank (Central Bank of
Bangladesh) on and from December 27, 2011.
Islamic Banks, Islamic Financial Institutions and the Islamic
Branches of the conventional Banks can transfer their surplus
Fund to the IIFM Fund on daily basis and the Banks who are in
need of overnight Fund can obtain fund from the IIFM Fund.
Islami Bond Fund is the custodian of the Fund.
All transactions are based on Mudaraba Principles of Islamic
Shariah.
Subject to availability, IIFM provides funds to the needy Banks
on the basis of profit sharing ratio of term deposit of the User
Banks.
Tenure 1 day (overnight).

Prepared by Forkan Uddin Mahmood

18
Allah Hafez

19