OBU and UPAS implied for IBBL, Buyers Credit and Supplier credit

Off Shore Banking business in Bangladesh took off in 1985 in line with Bangladesh Bank policy guideline 1985. Off Shore Banking operations of Islami Bank Bangladesh Limited started in 2011 .The list of OBUs of IBBL and date of starting operations are as follows:

Sl No.	Name of OBU
1	Head Office Complex Branch, Dhaka
2	Agrabad Branch, Chittagong
3	Uttara Branch, Dhaka

   Products of Off-shore Banking 

Banks Fund and Capital

Banks Fund:

Bank’s Fund means those money based on which a bank operates its business.

it is of two kinds: 1. Capital/ Shareholders Equity (Owners Capital & insider liabilities) 2. Liabilities of Bank (Outsider’s Liability)

Components of core capital/ Tier one  as per BASEL III for more of Capital Adequacy

Basel II

Basel II: International Standards/ Principals of Banking Regulation: Implemented in Bangladesh on 1^st  January , 2010  ( Car 10% or 400 crore on 1^st July 2011)

Pillar I:

Minimum Capital Requirement :

i)                    Investment/ Credit Risk ( Standardized Approach based on External assessment of Investment exposure risk weights by Rating Agency) 

ii)                Operational Risk (Risk of loss resulting from operations done on Basic Indicator Approach -15% of average gross income of last 3 years)

iii)                Market Risk: Standardised Approach, =Rate of return risk, Equity price risk, Exchange rate, commodity Price risk=(VAR)

Interest related Verses in the Holy Quran

Riba: Interest

 Interest is any predetermined excess which is paid or received with the passage of time on principal of loan as a condition of loan and for which no counter value is paid or received and which is not related with the usage and result of loan.

Riba is of two kinds: Riba Nasia, related with loan and time as in defination

  Riba, Fadal, related with goods for exchanging hand to hand.

There are  verses regarding Riba in 4 Suras.
Sera Rome: 39
Sura Nisa-160 to 161
Surah Al Imran--130
Sura Bakara--275-81

Financial Market of Bangladesh

 A place where individuals are involved in any kind of financial transaction refers to the financial market. The financial market is a platform where buyers and sellers are involved in the sale and purchase of financial products like shares, mutual funds, bonds and so on.

Let us go through the various types of financial market:

Kinds of financial market

The financial market can be categorized based on three things:

 Based on issuing :  

A.       primary market and

B.      B. Secondary market

 Based on duration:  

 A.       money market and

B.      B. capital market

 based on trading

 A.      first organized market for listed securities and

B.      second OTC market  where trading is done for only non-listed securities 

Note: For a detailed understanding of the Financial System of Bangladesh, Please visit 

Merchant bank and Obu

Some major activities of Merchant Bank in Bangladesh:

Securities and Exchange Commission (SEC) originates a regulation in 1996 on merchant banking activities specifically- “SEC (Merchant banker and Portfolio Manager) Regulation,1996”. As per regulations, a merchant bank is allowed to perform four types of activities: