2. Global Islamic Finance Sector
global Islamic financial asset decomposed into various sectors (2019)
3. Bangladesh
Government
Bangladesh Bank
Central Sharia’ah Board
For Islamic Bank of Bangladesh
Islamic Bank Consultive Forum
SSB OF Oslamic Bank
Islamic Bank of Bangladesh
Bangladesh Islamic Bankers Association
Islamic Economic Research Bureau
Demand of the Islamic Banks Among General Public
Shari`ah Governance Mechanism of Bangladesh
Ullah, Md. Hafij & Hassan, M. Kabir & Khanam, Ruma. (2017). Shari’ah Governance Practices in Bangladesh.
5. Modes of Financing by Aviva Finance Ltd
Inception
Aviva Finance Limited (former
Reliance Finance Limited) began its
journey in March 1996 a Public
Limited Company under license
from Bangladesh Bank
Sources of Finance
Mudaraba term deposit
Scheme deposit
Other deposit
Objective
To provide innovative financial
services & render prompt and cost-
effective financial services with
distinctive customer service
6. MTDR
Mudaraba Term Deposit Receipt (MTDR),
a profit bearing a/c, offering returns by
depositing money for fixed period of time
( Mudaraba concept)
A minimum amount of Tk.20000/- for the
period of 3, 6, 12, 24 months and a
maximum of 60 months can be deposited
EWDS
Quick Saving Deposit Scheme (QSDS)
A minimum amount of Tk.50000/-
for the period of 24, 30 & 36 months
and with a monthly deposit of BDT.
500 to 25k @ prevailing provisional
profit rate to withdraw profit on
maturity
Excise duty and income tax are
applicable
QSDS
Easy Way Deposit Scheme (EWDS)
A minimum amount of Tk.1000/- for the
period of 24, 30, 36, 48 & 60 months
and with deposit of BDT. 1000 (min) @
prevailing provisional profit rate to
withdraw profit on maturity
One can deposit any amount and any
time but not less than BDT. 1000
Modes of Financing by Aviva Finance Ltd
7. MCWD
Mudaraba Cash Waqf Deposit, governed
by the Mudaraba Principles of Islami
Shariah
The Waqif (depositor) under this scheme
shall get maximum 65% of investment
income or the percentage as the FI
decides from time to time
MMDS*
Mudaraba Marriage Deposit Scheme
Account for saving up for marriage,
Any customer to open account in the
name of his wife for monthly
installment of Tk. 1,000/-, Tk. 2000/-,
Tk. 3,000/-, Tk. 4,000/- and Tk.
5,000/- only in 3 years to 10 years
terms
MMDS
Mudaraba Mohor Deposit Scheme,
Fard for a husband to pay Muhorana to
his wife
Husband to open account in the name
of his wife for monthly installment of
Tk. 1,000/-, Tk. 2000/-, Tk. 3,000/-, Tk.
4,000/- and Tk. 5,000/- only in 3 years
to 10 years terms
Modes of Financing by Aviva Finance Ltd
8. MHDS
Mudaraba Hajj Deposit Scheme, to build-
up deposit in Hajj Saving Account
required for meeting Hajj expenses
Duration of period from 3 to 10 years for
building up savings by monthly
installments.
Mudaraba Deposit Pension Scheme
of 3-year to 10-year term may be
opened for monthly deposits of Tk.
1000.00 and Multiple of thousand up
to Tk. 20,000.00 only
At maturity, the account holder will
be paid his deposited amount with
profit earned.
MDPS
Modes of Financing by Aviva Finance Ltd
9. Modes of Financing by Islamic Finance & Investment Ltd. (IFIL)
Inception
Islamic Finance and Investment
Limited (IFIL), incorporated in
Bangladesh on February 27, 2001
as a Public Limited Company under
the Companies Act, 1994.
Objective
To be a leader in Financial arena of
Bangladesh with Islamic values.
To build a strong and dynamic
institution to make a viable
alternative to conventional system.
Sources of Finance
Mudaraba Term deposit
Lease deposit
Deposit under shemes
10. MTD
Mudaraba Term Deposit,
Mudaraba Term Deposit Muhsinath
(Monthly Profit)
Mudaraba Term Deposit Senior-Citizen
Mudaraba Term Deposit Ash-Shifa
Mudaraba Lakhopoti/ Kotipoti Deposit Scheme-terminal amount on maturity
shall be BDT 100k/ 1crore
Mudaraba Millionaire Deposit Scheme-monthly deposit scheme giving benefits
to get millions of money on maturity (5-25 years)
Mudaraba At Faal Deposit Scheme-Deposit Scheme within the age of 6 to 18
years
Mudaraba Double Money
Mudaraba Triple Money
Mudaraba Assan Deposit Scheme-any amount can be deposited at any time for a
daily basis profit
UNIQUE
Modes of Financing by Islamic Finance & Investment Ltd. (IFIL)
*Categorization Based on purposes
11. EDUCATION
Mudaraba Hajj Deposit Scheme
Mudaraba Cash Waqf Deposit Scheme
Mudaraba Mohor Savings Scheme
Mudaraba Pension fund for DPS
Mudaraba Pension Deposit Scheme
SIMILAR
Modes of Financing by Islamic Finance & Investment Ltd. (IFIL)
Mudaraba Special Deposit Scheme
Mudaraba Higher Education & Marriage
Saving Scheme
Mudaraba Education Savings Scheme
12. Modes of Financing by Hajj Finance Co. Ltd.
Inception
officially opened for business on
July 2nd, 2007 under license from
Bangladesh Bank in accordance
with the Financial Institution Act of
1993
Objective
To provide Bangladeshis access to
savings options and make the Hajj
easier for them
To make an effort to continuously
enhance services through
innovation, technological
application, and quality control.
Sources of Finance
Mudaraba hajj term deposits
Mudaraba term deposits
Al wadiah hajj deposits
Lease deposits
13. SIMILAR
Mudaraba Term Deposit
Mudaraba Savings Account
Mudaraba Monthly Savings Account
Mudaraba Monthly Hajj Scheme (MMHS)
Mudaraba Double Benefit Scheme (7
years)
Monthly Profit Withdrawal-Profit is
determined based on the daily
closing balance (in the name of the
institution, the individual, or both)
UNIQUE
Modes of Financing by Hajj Finance Co. Ltd.
22. shariah compliant vs non-compliant NBFIs
Close-End Shariah Compliant Mutual Funds
SL. Name of the Company Sub.Open Date Amount (Tk.Crore)
1 CAPM IBBL Islamic Mutual Fund Dec 10,2017 80
2 SEML IBBL Shariah Fund. Dec 11,2016 100
3 AIBL 1st Islamic Mutual Fund Nov 21,2010 100
4 IFIL Islamic Mutual Fund -1 Sep 26,2010 100
23. shariah compliant vs non-compliant NBFIs
Open-End Shariah Compliant Mutual Funds
SL. Name of the Company Sub.Open Date Initial Target (Tk.Crore)
1 EDGE Al-Amin Shariah Consumer Fund Jul 18,2022 25
2 UCB TAQWA GROWTH FUND Feb 13,2022 35
3 HFAML Shariah Unit Fund Jan 09,2022 25
4 CAPITEC-IBBL Shariah Unit Fund Jul 01,2020 25
5 IDLC Asset Management Shariah Fund Aug 25,2019 50
6 CAPITEC Padma P.F. Shariah Unit Fund Aug 08,2018 10
7 Credence First Shariah Unit Fund Feb 04,2018 10
8 LankaBangla Al-Arafah Shariah Unit Fund Jan 28,2018 50
9 ICB AMCL Islamic Unit Fund May 17,2015 20
24. Sources/Suppliers of Funds
Sponsor
Unit Certificates for 100%
of the Sponsor’s
contribution subject to a
lock-in period of 1 (one)
year from the date of
listing in the Stock
Exchange(s) and 1/10th
of the Sponsor’s
contribution only shall be
subject to a lock-in period
of full time of the Fund.
Resident Bangladeshis
No lock-in period
Pre-IPO Placement
All Pre-IPO Placement will
be in 1 year lock-in period
from the date of listing of
the Fund.
NRBs
Non-Resident Bangladeshis
No lock-in period
Reserved for Mutual Funds
No lock-in period
26. Close Funds Performance Record: Shariah vs non-Shariah
AIBL 1st Islamic Mutual Fund
1 Month 3 Month 6 Month YTD 1 Year 3 Year 5 Year Since Inception
AIBL1STIMF 0.10% -0.90% -3.20% -2.70% 0.40% 6.80% 5.60% 5.20%
Benchmark -0.90% -3.90% -9.70% -6.60% -4.30% 6.90% 1.70% -1.80%
Comparison with DSES since inception
Fund performance history
27. LR GLOBAL Bangladesh Mutual Fund One
Close Funds Performance Record: Shariah vs non-Shariah
1 Month 3 Month 6 Month YTD 1 Year 3 Year 5 Year Since Inception
LRGLOBMF1 -0.40% -2.10% -4.80% -4.30% -2.30% 6.60% 4.90% 6.00%
Benchmark -0.90% -3.90% -9.70% -6.60% -4.30% 6.90% 1.70% 0.70%
Fund performance history
Comparison with DSES since inception
28. Open Funds Performance Record: Shariah vs non-Shariah
21.4%
68.5%
4.6%
36.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
LankaBangla Al-Arafah Shariah Unit Fund LankaBangla 1st Balanced Unit Fund
Open-End Fund: Shariah vs Non-Shariah
30. Challenges for NBFIs
01
03
05
07
02
04
06
08
The lack of skilled
human resources
Convincing
customer
A weak legal
framework
The uses of
technology
Assumption of
Customers’ preference
Representation of
transparency
Product
diversification
Central Bank’s
Step
31. Future Prospects
Demand for Islamic financial
institutions are is rising
Ample growth potential Digitalization of
products and services
Youth are taking initiatives IDLC & others have sought
permission to start Shariah
based window
33. Policy Recommendations
Adequate training to
improve analytical &
professional standard
The management should
review their systems,
policies, processes and
product prices in line
with their competitors
and the changing market
reality
dedicated regulatory
framework to ensure
Islamic financial
institutions & the
products
A research &
development cell for
deposit analysis and
innovative financial
engineering
Creation of a central
Shariah board and
the development of
rules and products in
accordance with
global best practices
35. 1. Alpha Islami Life Insurance Co. Ltd.
2. Prime Islami Life Insurance Limited
3. Fareast Islami Life Insurance Co. Ltd.
4. Padma Islami Life Insurance Co. Ltd.
5. Islami Commercial Insurance Company
Limited
6. Islami Insurance Bangladesh Limited
7. Takaful Islami Insurance Limited.
8. Trust Islami Life Insurance Co. Ltd.
Insurance companies
Shariah Compliant NBFIs in Bangladesh
Listed in previous slides*
Islamic Mutual Funds
1.Islamic Finance &
Investment Limited
2.Hajj Finance Company
Limited
3.Aviva Finance Limited
Other FIs
36. Shariah Compliant NBFIs in Bangladesh
A-1
The major difference between banks and FIs are as follows: (Source:
Bangladesh Bank)
1. FIs cannot issue cheques, pay-orders or demand drafts.
2. FIs cannot receive demand deposits,
3. FIs cannot be involved in foreign exchange financing,
4. FIs can conduct their business operations with diversified financing
modes like syndicated financing, bridge financing, lease financing,
securitization instruments, private placement of equity etc.
37. Shariah Compliant NBFIs in Bangladesh
2019-20 2020-21 2021-22
Aggregate Savings as %
of GDP
27.08% 25.34% 21.56%
A-2
A-3
Source: Hajj costs in Bangladesh high among neighbors (TBS, 2022)
