Professional Documents
Culture Documents
a. Establishment
The idea of establishing an international financial institution for Muslim counties was
discussed in the late 1960s by the Organization of Islamic Conference (OIC) Working
papers were circulated and proposals made. but no concerted action was taken until the first
meeting of the Finance Ministers of the Islamic countries held in Jeddaha 1393H
(December, 1973). The second conference of finance ministers held in August 1974
adopted the Articles of Agreements establishing the Bank. The Bank began functioning on
15 Shawal 1395H (20th October 1975).
b. Objectives
The establishment of the Islamic Development Bank was aimed at contributing to
economic development and social progress of its member countries by reinforcing
economic co-operation among them, assisting in the development of Islamic
economics, banking and finance, and promoting the economic and social welfare of
Muslim communities in non-member countries. In order to realize the above objectives, the
IDB is empowered by its Articles of Agreement to engage in the following activities.
The Accounting Standards for Islamic Banks are prepared by the 'Accounting and
Auditing Organization for Islamic Financial Institutions (AAOIFI)', which was
established in accordance with the agreements signed by Islamic Financial Institutions on
26 February 1990 in Algiers during the meeting of Islamic Banks and Financial
Institutions. AAOIFI was registered on 27 March 1991 in the state of Bahrain as an
international autonomous non profit making corporate body.
i. Develop the accounting, auditing and banking practices thought relating to the activities
of Islamic Financial Institutions.
ii. Disseminate the accounting and auditing thought relating to the activities of Islamic
Financial Institutions and it;, applications through training, seminars, publication of
periodical newsletters, preparation of research and other means.
iii. Prepare, promulgate and interpret accounting and auditing standards for Islamic
Financial Institutions in order to hannonize the accounting practices adopted by these
institutions in the preparation of their financial statements as well as to hatmonize the
auditing procedures adopted in auditing the financial statements prepared by Islamic
Financial Institutions.
iv. Review and amend the accounting the auditing standards for Islamic Financial
Institutions to cope with developments in the accounting and the auditing thought and
practices.
v. Prepare, issue, review and adjust the statements and guidelines on the banking,
investment and insurance practices of the Islamic Financial Institutions.
vi. Approach the concerned regulatory bodies, Islamic Financial Institutions, other
financial institutions that otTer Islamic Financial Services, and accounting and auditing
firms in order to implement the accounting and auditing standards, as well as the
statements and guidelines on the banking, investment and insurance practices of Islamic
Financial Institutions that are published by AAOIFI.
During the year 2004, Ministry of Finance, Government of the Peoples Republic of Bangladesh
introduced Bangladesh Government Islamic Investment Bond (Islamic Bond) (BGIIB).
1. Name of the Bond: Bangladesh Government Islamic Investment Bond (Islamic Bond)
(BGIIB).
2. Purchaser of Bond: Islamic Banks & Islamic Financial Institutions.
(a) Institutions and individuals resident in Bangladesh agreeing to accept Islamic
Shariah based on profit and loss sharing under these rules shall be eligible for
purchase.
(b) A non-resident Bangladesh Nationals agreeing to accept returns on the basis on
profit and loss sharing under these rules shall be eligible, subject to the purchase
being made with funds from a non-resident foreign currency account in the name
of the purchaser with a Bank in Bangladesh.
i. Shariah Principle:
The MPB will be issued under the Mudaraba Principles of Islami Shariah. The
Bank will act as Mudarib of the MPB holders.
ii. Nature:
The MPB will be treated as “Tier-2 Capital (Supplimentary Capital)” upto 30%
of the Core Capital of the Bank.
iii. Volume of MPB: Total Volume of MPB will be Tk. 3,000.00 million.
iv. Type:
MPB will be irredeemable and non-convertible duly fullfilling the requirement of
Securities & Exchange Commission and the Bangladesh Bank.
v. Tradability:
MPB will be listed in the Stock Exchanges of the Country for trading.
vii. Status:
MPB will be treated as on of the components of Mudaraba Fund and shall be
governed by the rules and principles of utilization and distribution of profit of
such funds as in vogue in IBBL and shall be subject to change, revision &
modification from time to time.
The total amount of profit to be paid to the MPB holders as described above is to
be debited to Profit Paid on Deposit (PPD) / Profit Paid on Perpetual Bond
(PPPB). This profit will thus be an expenditure of the Bank chareable to pre-tax
profit.
x. Income Tax:
For Income Tax benefit, we have already applied to National Board of Revenue
(NBR) and waiting for their reply / approval.
xi. Trustee:
Investment Corporation of Bangladesh (ICB) has been appointed as trustee of the
MPB.