In recent years, some of the banks have started full Islamic banking. But a question remains as to how suitable or ideal this method is for Islamic banking.
Student Information
Internship Information
Internship Outcomes
- Student’s Contribution to the company
- Benefits to the students
- Problems and difficulties faced during internship
- Recommendations
Unfortunately, there is no honorarium of any kind provided by Mutual Trust Bank Ltd to the interns. If the bank is not willing to offer any honorarium, they should at least provide the necessary devices and tools required for the interns as per their duties and responsibilities.
Overview of the company
Management Practices
Leadership style
HR planning process
The company also arranges necessary grooming sessions for the underperforming employees after the performance interview. Students must visit the Banglamotor branch during their training, regardless of where their job or position is located.
Marketing Practices
Target Customer & Positioning
Instructors for the sessions are either selected by MTBL senior management or sometimes instructors from other organizations are hired. 8 Another notable example may be that Mutual Trust Bank, apart from its conventional banking, has also opened an Islamic Banking Division in 2020, in order to meet the need of Islamic Banking and Sharia financing products for Muslims. practitioner.
New Product Development & Competitive practices
Industry & Competitive Analysis
Industry Competitive Analysis
The threat of new entrants will certainly be present in the market for any type of business. Therefore, it is safe to assume that the threat of new entrants to the market is quite high for MTB Yaqeen. Because Islamic banks are generally run on a partnership basis, which will be discussed in detail in the third chapter.
The sellers and the company help MTB Yaqeen by offering their products at an affordable price. MTB Yaqeen always tries to offer its financial products to customers at an affordable rate. This Islamic bank distributes its profit in the form of ISR, which complies with Sharia.
From my on-site supervisor, I understand that MTB Yaqeen considers the 'Islamic City' and.
SWOT Analysis for competitive advantage
According to data from the website named 'top in Bangladesh', it is stated that MTBL is ranked 12th according to the analysis of 2022. So it is very crucial for this bank to try to be more competitive in terms of their offered products, organizational culture and many more which will be discussed in the next subsection. Although MTBL offers its employees a better compensation and benefits, the growth opportunity for the employees is low.
The brand management is not up to par compared to its competitors, placing the bank in 12th position in my opinion. When it comes to scouting a potential market, this bank has always been quick to take to the new skies. As Islamic banking is an emerging sector for Bangladesh, it is natural for the new entrants to enter the market.
Be it retail, corporate or mobile banking, MTBL needs to be more proactive to mitigate potential threats in the near future.
Recommendation
Introduction
Definition & Purpose of Islamic Banking
Islamic banking is a financial system whose rules, principles, policies are in accordance with Islamic law or commonly known as Sharia. In general, it talks about the sharing of risk and profit between the parties and the execution of justice in transactions. Most often, some form of business activity, asset, product or service is associated with the transaction.
Of course, he will need money to buy all the products and take the machines as a lease. Now an Islamic bank will take the initiative to supply a certain part of its need for the material. Let us assume that the Islamic bank provides a few tons of metal bars as a help to mr.
Rahim has to pay back the current price of that given amount of sticks after a certain period of time.
Literature Review
Let us assume that the Islamic bank supplies few tons of metallic bars to help Mr. Rahim pay back the current price of the given quantity of bars after a certain period. 14 Another study states that the Central Bank of Malaysia promotes risk sharing and conducts Islamic banking based on the Mudarabah principle by using exchange-based contracts instead of equity-based contracts. It also states that customers also require to develop a deep sense of integrity and awareness of incurring loss or reduction in profit based on the company from time to time.
Objective
Research Methodology
Documents provided by my field supervisors have been thoroughly researched and evaluated before I selected the knowledge and data for this study. Thus, I have attempted to conduct qualitative research based on information and data collected from various online and offline sources.
Shari’ah Guideline for Deposit
Brief overview of Mudarabah Principle
Mudarabah application in the context of Bangladesh
Mudarabah Profit Distribution Method
Because of this possibility of loss, the bank sometimes cannot repay if it has suffered any loss. Weighting is a method of profit distribution in which each financial service (commonly called a product by banks and financial institutions) is given a certain number as a weight. Let's assume that the bank's share of the profit is 30% and that all customers would gain profit from the remaining 70%.
Step 2: In order to pay out 70% of the profit among all customers, differentiation is created by weighting the different deposit products of the banks. Some of the differences between the two methods of profit sharing are written below:- Weighted Income Sharing Ratio (ISR) 1) In weighted system, the customer receives .. a fixed temporary interest rate for the deposit scheme from the bank irrespective of the income of the bank. Because the fluctuation of income makes it very difficult to calculate the actual rate on a monthly basis.
Therefore, the income of the past months can be displayed so that the customer can assess a likely rate.
Deposits products of MTB Yaqeen
Document conforming to the source of fund, where required as per MTB Policy All documents to be obtained as per MTB customer acceptance policy. Term Deposit is an investment account where the customer/depositor invests a fixed sum of money for a certain period of time. Recurring Deposit accounts are that type of term deposit where the customer can a fixed sum of money at a fixed interval.
This means that the investor invests a certain amount of money every month within a pre-agreed period. The Bank may charge a penalty or take other action for premature cash withdrawal as per the instructions of the provincial law and Bangladesh Bank, as this is considered a breach of contract. Yaqeen Term Deposit offered by Mutual Trust Bank Limited is undoubtedly a Shariah compliant Mudarabah term deposit.
Here, the depositor invests a fixed amount of money for a term of office and is expected to receive a rate of profit around the indicative rate declared by MTB.
Shari’ah Principle for Investment
Murabahah
26 advance promise to buy the product from the Islamic Bank for the cost price plus the noted profit. In this case, the customer is called the 'purchaser' in the eyes of the Shari'ah, as he/she orders the Islamic bank to purchase the product for him/her. Transparency must be maintained between the bank and the customer regarding the actual purchase price of the product and the additional expenses associated with making the purchase.
Allah the Exalted said in the Qur'an: "There is no crime in you if you seek the bounty of your Lord," (Suratul Baqarah: 198). Islamic scholars generally agree that the term "reward" here refers to profit.
Bai Salam
Musharakah
Products under Murabahah in MTB Yaqeen
So I apologize in advance for the percentage of plagiarism, as artificial intelligence software will not understand the difference between the features of these two products, which are evaluated based on numerical numbers, not language. At the time of financing, the age of the property must be no more than 20 years and financing at the end of the financing period. For other salaried individuals, the minimum work experience is BDT 30,000 and for self-employed/business owners/business owners, the minimum income must be BDT 40,000.
Findings & Analysis
Impact on ISR in the above two phenomena
Based on this table, we will compare and contrast the two phenomena, namely the change of the ISR of a group of customers and the effect of introducing a new product into the ISR system. Since the method of calculating the ISR has already been described in , we will not repeat the same explanation again here, but rather dive into the analysis of those phenomena. But it should be noted that we consider the deposit types in column A as customer groups.
In ISR Table-2, we can see that the customer's share (column E) of Yaqeen Savings Account and 1-Yr Yaqeen Term Deposit has been increased to 80% and 90% respectively. We can therefore say with certainty that ISR provides flexibility in relation to changes in the relationship between the customer and the bank, so that the other products are not affected. In the third table we have added another group of customers named 'Hajj Deposit' with customer:bank ratio of 90:10 respectively.
So it is safe to conclude that an Islamic bank in ISR can make as many products as it wants, but the rate of the previous group of customers will remain unchanged.
Impact on Weightage based on the two phenomena
In the second table in the weighting system, we have changed the weight value of the first two deposit products named 'Savings accounts' and '1-year term deposit'. Therefore, the total weighted mortgage products for these two customer groups have changed from 70 and 160 to 75 and 170 respectively. Here it is that this change in weighting of two customer groups has affected all customer groups.
If we look at columns G and H, we see that the 'distributable financed income' and. In this third weight system table, we have introduced a new product to the system called. But after the introduction of the new product, we can see that this is the case with all previous products.
But if this phenomenon affects the profit rate of previous products, then it is safe to assume that old customers will welcome their decrease in return on investment as a depositor.
Recommendations
Conclusion