ANNUAL

REPORT
2020

Going everywhere with all financial services at affordable cost in

easiest manner has always been our priority aiming at ensuring
financial inclusion, sustainable growth and equitable
development.
The Banking industry has witnessed exciting progress with
integration of finance and technology (Fintech) seeking
automation in use & delivery of financial services. The ongoing
pandemic has once again made the industry become
tech-friendly for optimizing people's need and continuing
economic progress.
At IBBL, we believe in maximizing welfare through exploring
avenues of service delivery while reaching to millions we serve
and the society we work for.
 Registered Office
Islami Bank Bangladesh Limited
Islami Bank Tower
40, Dilkusha Commercial Area
Dhaka-1000, Bangladesh
GPO Box No.23

Phone : PABX (88-02-) 9563040,

9560099, 9567161, 9567162
Mobile : 88-01711-435638-9
FAX : 88-02-9564532, 9568634
SWIFT : IBBLBDDH

E-mail : info@islamibankbd.com
Web-site: www.islamibankbd.com
 Message from the
HOLY QUR’AN

He is the One who has made the earth subjugated for you, so walk on its
shoulders, and eat out of His provision, and to Him is the Resurrection.
(Surah Al-Mulk : 15)

Surely, Allah commands you to deliver trusts to those entitled to them, and that,
when you judge between people, judge with justice. Surely, excellent is the
exhortation Allah gives you. Surely, Allah is All-hearing All-Seeing.
(Surah An Nisa : 58)

And We bestowed dignity on the children of ‘Adam and provided them with rides
on the land and in the sea, and provided them with a variety of good things and
made them much superior to many of those whom We have created.
(Surah Al-Isra : 70)

ANNUAL
REPORT
2020
Guidance from the
HADITH

( )
Narrated Ma'mar bin 'Abdullah (RA): Allah's Messenger (SAW) said: "None
withholds goods till the price rises but a sinner."
(Sahih Muslim)

Narrated 'Amr bin Shu'aib on his father's authority from his grandfather (RA):
"Allah's Messenger (SAW) said: "The condition of a loan combined with a sale is not
lawful, now two conditions relating to one transaction, nor the profit arising from
something which is not in one's charge, nor selling what is not in your possession."
(Sunan An Nasai)

Narrated from Jabir bin 'Abdullah, Allah’s Messenger (SAW) said: "May Allah
have mercy on a person who is lenient when he sells, lenient when he buys, and
lenient when he asks for payment."
(Sahih Bukhari, Tirmidhi)

ANNUAL
REPORT
2020
 CONTENTS
Company Ethos
Letter of Transmittal 8
Corporate Governance 107-150
Corporate Governance Report 107-131
Notice of 38th AGM 9 Dividend Distribution Policy 132-133
Vision 10 CEO and CFO’s Declaration to the Board 134
Mission 11 Certificate on Compliance of Corporate Governance 135
Strategic Objectives 12 Compliance Status of BSEC Guidelines 136-144
8-39

Core Values & Commitments 13 Global Reporting Initiatives Disclosure Index 145
Code of Conduct and Ethical Principles 14 Integrated Reporting 146-150
Awards & Accolades 15-17

151-196
Forward Looking Statement 18-19
Chairman & Message 20-27 Risk Management
Managing Directors Review 28-34 Report of Risk Management Committee 151-154
Corporate Milestones 35-37 Risk Management Report 155-162
Sponsors & Placement Holders 38-39 Capital Plan 163
Disclosure on Risked Based Capital (Basel III) 164-183
Non-Performing Investment Management 184
Corporate Structure ICT Management 185-187
Corporate Information 41 Green Banking 188-190
40-74

Corporate Organogram 42-43 Stakeholder and Materiality 191-194

Board and its Committees 44-48 Sustainability Report 195-196
Shariah Supervisory Committee 49
Management Committee (MANCOM) 50
Senior Executives 51-52
Directors Profile 53-74

Directors’ Report
75-106

Directors’ Report 75-78

Corporate Profile 79-82
Financial Review 82-83
Business Model 83-85
Business Review 85-106

ANNUAL
REPORT
2020
 Management Report and Commentary Financial Statements-IBBL 261-329
Management Report and Analysis 197-200 Balance Sheet 261-262
Report on Financial Inclusion 201 Profit and Loss Account 263
Publication: Products and Services 202-205 Cash Flow Statement 264
Brand Management and Public Relations 206-209 Statement of Changes in Equity 265-266
Stakeholders’ Information 210-214 Liquidity Statement 267
Graphical Presentation 215-218 Notes to the Consolidated Financial Statements 268-329
197-248

Segment Information 219

Horizontal & Vertical Analysis 220
Financial Statements
Profitability, Dividends, Performance and Liquidity Ratios 221
Statement of Value Added 222
IBBL Subsidiaries & OBU 330-383
Integrated Reporting 223-225 Financial Statements - OBU 330-336
Financial Calendar 226 Financial Statements - IBSL 337-359
Financial Highlights 227 Financial Statements - IBCML 360-374
Five Years Performance 228-230
Media Highlights 231 Standard Disclosure Index 375-377
Success Story 232-243 Bank’s Network 378-380
Report of the Shari’ah Supervisory Committee 244 Glossary 381-382
Audit Committee Report 245-248 Proxy Form & Attendance Slip 383

Reports & Financial Statements

256-260 249-374

Independent Auditors’ Report 249-253

Financial Statements - IBBL 254-329
Financial Statements -OBU 330-336
Financial Statements -IBSL 337-359
Financial Statements- IBCML 360-374

Consolidated Financial Statements

Consolidated Balance Sheet 255-256
Consolidated Profit & Loss Account 257
Consolidated Cash Flow Statement 258
Consolidated Statement of Changes in Equity 259-260

ANNUAL
REPORT
2020
 Letter of Transmittal
All Honourable Members/Shareholders,
Bangladesh Bank,
Registrar of Joint Stock Companies and Firms,
Bangladesh Securities and Exchange Commission,
Dhaka Stock Exchange Limited and
Chattogram Stock Exchange Limited

Subject: ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2020

Dear Sir,

Please find an enclosed copy of the Annual Report along with the audited Financial Statements including consolidated
and separate Balance Sheet as at December 31, 2020 and Income Statements, Cash Flow Statements and Statement of
Changes in Equity for the year ended December 31, 2020 along with the notes thereon of Islami Bank Bangladesh
Limited and its subsidiaries (Islami Bank Securities Limited and Islami Bank Capital Management Limited) for your
kind perusal and record.

Thank you
Yours faithfully,

(J Q M Habibullah, FCS)
DMD & Company Secretary

ANNUAL
08 REPORT
2020
 Bmjvgx e¨vsK evsjv‡`k wjwg‡UW
Islami Bank Bangladesh Limited
Head Office, Islami Bank Tower
40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh
NOTICE OF THE 38th ANNUAL GENERAL MEETING
Notice is hereby given that the 38th Annual General Meeting of Islami Bank Bangladesh Limited will be held on Sunday, the 27th June,
2021 at 11.30 A.M. through Digital Platform for transacting the following businesses:

AGENDA
Ordinary Business:

1) To receive, consider and adopt the Audited Financial Statements for the year ended 31st December, 2020 along with Reports of the
Directors and Auditors thereon.
2) To approve Dividend for the year ended 31st December, 2020.
3) To appoint Auditor(s) and to fix up their remuneration for the Year 2021.
4) To elect / re-elect Directors.
5) To appoint Professional for the certification on Corporate Governance Code for the Year 2021 and fixation of their remuneration.

Special Business:

6) To consider and if thought fit, to pass the following resolution as a Special Resolution:
“RESOLVED THAT the proposal for issuance of Contingent-Convertible, BASEL III compliant IBBL 2nd Perpetual Mudaraba
Bond of Tk. 800.00 Crore (Taka Eight Hundred Crore) only, on such terms and conditions including the price, coupon, etc., as may
be determined by the Board of Directors (or any other person so authorized by the Board of Directors) based on the prevailing
market condition, with the feature of conditional conversion of the bond into Common Equity/Shares if the bank's consolidated
CET-1 falls below Bangladesh Bank's requirement (presently 4.50% of total risk-weighted assets) and stays below that level for three
(03) consecutive quarters be and is hereby approved subject to permission from regulatory authorities."
All Members are requested to make it convenient to attend the Meeting in time.
By order of the Board of Directors
Dated: Dhaka
27th April, 2021
(J Q M Habibullah, FCS)
Notes: DMD & Company Secretary
a) Record date shall be on 20th May, 2021 i.e. the honourable shareholders whose name will appear in the CDS (Central Depository
System) / Company’s Register on the 20th May, 2021 will be eligible to attend & vote at the Annual General Meeting and be entitled
to get dividend for the Year 2020 against their shareholdings.
b) Pursuant to the Bangladesh Securities and Exchange Commission's (BSEC) Order No.SEC/SRMIC/04-231/932 dated 24 March
2020, the AGM will be virtual meeting of the Members, which will be conducted via live webcast by using Digital Platform.
c) Link for joining in AGM through Digital Platform and details login process will be notified to the respective email address. Full
login / participation process for the Digital Platform meeting will also be available in the Bank's website : www.islamibankbd.com.
d) A member eligible for attending and voting at the Annual General Meeting may appoint a proxy on his / her behalf. Power of
Attorney / Proxy Form must be submitted to the Registered Office or Share & Bond Division (63 Dilkusha C/A, 5th Floor, Dhaka)
of the Company at least 48 (Forty Eight) hours before the Meeting i.e. 11.30 A.M. on Friday the 25th June, 2021. Revenue Stamp
of Tk.20/- (Taka Twenty) only shall have to be affixed on the Proxy Form.
e) As per Bangladesh Securities and Exchange Commission (BSEC) Gazette Notification No.BSEC/ CMRRCD/2006-158/208/admin/81,
dated 20th June, 2018, soft copy of Annual Report along with the Attendance Slip, Proxy Form and the Notice will be forwarded to all
the members at their respective email addresses available in their beneficiary owner (BO) accounts as per CDBL record. Shareholder
may collect the printed copy of the Annual Report from the Registered Office or Share & Bond Division (63, Dilkusha C/A, 5th Floor,
Dhaka) if required in writing beforehand. Soft copy of Annual Report for the Year 2020 shall be available on Bank’s website:
www.islamibankbd.com.
f) Election of Directors will be dealt in terms of Articles of Association of the Company and relevant rules/laws/circulars in force.

ANNUAL
REPORT 09
2020
 VISION
Our vision is to always strive to achieve superior financial
performance, be considered a leading Islami Bank by reputation and
performance.

Our goal is to establish and maintain modern banking techniques, to

ensure soundness and development of the financial system based on
Islamic Principles and to become a strong and efficient organization
with highly motivated professionals, working for the benefit of people,
based on accountability, transparency and integrity to ensure stability
of the financial systems.

We will try to encourage savings in the form of direct investment. We

will also try to encourage investment particularly in projects, which
are more likely to lead to higher employment.

ANNUAL
10 REPORT
2020
 MISSION
To establish Islamic Banking through introduction of a welfare oriented banking system and
also ensure equity and justice in all economic activities, achieve balanced growth and equitable
development through diversified investment operations particularly in the priority sectors and
less developed areas of the country.

To encourage the socio-economic development and financial services to the low-income

community particularly in the rural areas.

ANNUAL
REPORT 11
2020
 Strategic Objectives
The general strategic objectives of IBBL are to consider balanced scorecard methodology and continually adhere to the
same through annual reviewing while some specific objectives are mentioned below:

Financial Efficiency
Achieve sustainable growth in all key financial indicators;
Increase bottom line through maximization of income and efficient management of expenditure.

Customer Focus
Develop strategic partnership through addressing existing and potential needs of product and services;
Endeavor to attract customer through delivering need based financial services;
Continuous improvement of product and services for adopting changing need of customer base to retain market share.

Operational Excellence
Include unbanked people into banking net with Over the Counter banking services;
Increase efficiencies through use of virtual technologies for moving towards of financial excellence;
Increase community outreach through innovation of various marketing channels;
Improve internal and external communications through social communication network;
Develop and implement a promotional plan to expedite financial inclusion;

Human Development
Employ professionals who create success for customers;
Develop the leadership abilities and potential of our team;
Align incentives and staff rewards with performance;
Continually learn and adopt global updated best practices.

ANNUAL
12 REPORT
2020
Core Values & Commitments
Adherence to Islamic Shari’ah
Islamic Financial System is the source of all strength and inspirations.
Principles of deposit, investment and operational ethics are guided by Islamic Financial System.
Ensuring Halal income for the depositors and shareholders.
Abstaining from financing in any area deemed to have been Haram

Welfare Banking
Ensuring justice and fairness in all economic activities.
Achieving balanced growth and equitable development.
Inclusion of the unbanked population in the banking channel.

Socially Responsible Banking

Abstaining from financing in any socially and environmentally undesirable project.
Expanding investment to foster the need-based retail and priority sectors.
Promoting the green initiative in minimizing the carbon imitation.

Integrity
Performing in accordance with the rules and regulations.
Protecting the rightsand privileges of the stakeholders.
Maintaining equilibrium between the words and action

Commitments
Strict compliance to all regulatory requirements.
Optimum care and courtesy to all stakeholders.
Efforts in ensuring continuous quality improvement.
Satisfying clients through effective service delivery.

ANNUAL
REPORT 13
2020
 Code of Conduct and Ethical Principles
Shari’ah foundation of ethics
Avoidance of interest (Riba) in all financial transactions
Ensuring welfare and justice to all the stakeholders
Righteousness in dealing with the day to day affairs
Ensuring transparency & avoidance of obscurity (Gharar)

Principles of personnel ethics

Trustworthiness in discharging the assigned duties
Dedication in abiding by the rules and regulations
Commitment in making actions pure and perfect
Adherence to the truth and avoidance of falsehood
Discharging the responsibilities with honesty and integrity

Rules of ethical conduct

General Code of Conduct of the Bank
Guidelines of National Integrity Strategy
Disciplinary procedures to deal with the violations

Conduct towards shareholders, managers and fellow employees

Preserving the benefits and interest of the shareholders
Maximizing company profit and managing the same ethically
Providing fair and equal employment opportunity
Ensuring gender equality in the workplace
Eliminations of all sorts of gender discriminations
Ensuring logistic support for employee satisfaction
Providing opportunities for professional development
Adherence to good corporate governance practices
Refraining from any sort of favoritism and biasness
Appreciating the value of individual & team contribution

Rules of conduct towards those who deal with the institution and related parties
Ensuring prompt & responsive approach to the customer needs
Treating the customers fairly and without any prejudice
Ensuring privacy/secrecy of customers/stakeholders information
Updating the customers regarding suspicious transactions in his account
Informing the customers regarding all banking products & services
Acknowledging the norms, customs, values of the community/society
Treating the external counter-parties professionally and impartially
Avoiding conflict of interest while negotiating with the counter-parties

ANNUAL
14 REPORT
2020
AWARDS & ACCOLADES
IBBL has positioned itself as the only bank of Bangladesh within World’s Top 1000 Banks as declared by UK based
financial intelligence magazine “The Banker”. IBBL ranking improves from 943rd position in 2019 to 904th
position in 2020.
IBBL has been honored with “World’s Best Islamic Bank CIBAFI Award 2019” by The General Council for Islamic
Banks and Financial Institutions.
IBBL has achieved “National Gold Award-2019” conferred by Institute of Chartered Secretaries of Bangladesh
(ICSB) for corporate governance excellence in Islamic Banking Companies category
IBBL has achieved “20th ICAB National Award” for best presented annual reports 2019’ under the category of
Corporate Governance. This is the 9th time in a row since 2010 for excellent performance in Shariah based
banking services.
IBBL has achieved the “ICMAB Best Corporate Award 2019” in the category of private commercial bank (Islami
operation). This is the 10th time in a row since 2010 for excellent performance in shari’ah based banking services.
IBBL received the “Islamic Retail Banking Leadership Award 2019 & The Strongest Retail Bank in Asia 2019” and
was also awarded the ‘Most Innovative Islamic Retail Bank in Bangladesh 2019’ Conferred by UK-based
Financial intelligence house Cambridge IF Analytica.
IBBL achieved the ‘Excellence in Product Innovation’ and ‘Excellence in Prepaid Card business’ awards for
2019-2020 conferred by World’s largest electronic fund transfer network VISA.
IBBL was declared as Triple A rated private bank with the highest rating of AAA since 2018 to 2020.
IBBL has received `Gold Remittance Award 2019` for collecting highest remittance in the year-2019 conferred by
the Centre for NRB
IBBL was awarded as the one of the Highest Taxpayer in the Banking sector by the National Board of Revenue,
Government of the Peoples Republic of Bangladesh.
IBBL received “Bangladesh Bank Remittance Award 2019 & 2018 for mobilizing highest remittance.
IBBL is honored with “The Best Islamic Bank in Bangladesh 2018” conferred by the Islamic Finance Malayasia
IBBL achieved “The Strongest Bank in Bangladesh 2018 Award” by the Asian Banker.

ANNUAL
REPORT 15
2020
 AWARDS

ICMAB
GOLD AWARD

ICAB NATIONAL
AWARD for Best
Presented
Annual Reports

ICSB NATIONAL
GOLD AWARD

'`Excellence in
Product Innovation''
and
''Excellence in Prepaid
Card Business''
Award

TAX CARD
AWARD 2020

Tax Card
Award
2019-2020

ANNUAL
16 REPORT
2020
 CIBAFI Award

Bangladesh Cricket
League (BCL)
RUNNER-UP
2019-2020

Bangladesh Bank
Remittance
Award

The Banker
Recognition
2020
2020

Tax Card Award

Strongest
Islamic Retail
Bank in Asia

IRBA Most
Innovative Islamic
Retail Bank in
Bangladesh

ANNUAL
REPORT 17
2020
FORWARD LOOKING
STATEMENT
 Forward Looking Statement
The Annual Report-2020 of Islami Bank Bangladesh Limited has stated forward-looking statements in its different parts. Forward
looking is someone or something with an eye to the future and a focus on what is coming. It often predicts expected future business and
financial performance. It contains words such as expect’, ‘anticipate, believe, seek, will, may, would, presume, assure, hope, so on and so
forth. A forward-looking statement naturally addresses matters that are, to certain degrees, uncertain and may not happen. In most
cases, a forward-looking statement been made in respect of company’s expected income, earning, business growth, horizontal
expansion, cost structure, capital structure, dividends etc. Such a statement was made based on some assumptions about future events,
which may happen or may not happen. The following major factors that may affect overall business conditions of the Bank are
mentioned below:

Changes in national economy, political and financial conditions, changes in the government’s adjustments and control policies, and
regulatory issues, securities and capital markets behavior including changes in market liquidity and volatility, global economic
downturn including a significant decline in global trade volumes;
Global unrest in Middle-east countries affecting flow of remittances and trade;
Changes in fiscal, monetary and trade policies;
Natural catastrophes and political disturbances;
Changes in lifestyle and economic activities due to COVID-19
Changes in consumer behaviors, technologies and commodity price;
Changes in financial and capital market;
Changes in interest rates and forex rates locally and internationally;
Changes in legal and regulatory framework;
Changes in Cash Reserve Ratio (CRR) and Statutory Liquidity Reserve (SLR);
Withdrawal of incentives given to any sectors.

While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and
uncertainties that could cause actual results to differ materially. Since there are uncertainties about the occurrence of the future events,
those should be treated from that viewpoint in decision making by the users of the Annual Report.

ANNUAL
REPORT 19
2020
 CHAIRMAN’S
MESSAGE

ANNUAL
20 REPORT
2020
ANNUAL
REPORT 21
2020

In the name of Allah, the Most Gracious, the Most Merciful and
peace be upon our Prophet Mohammad & His Companions;
Respected Shareholders,
Assalamu AlaikumWaRahmatullah
We are to present the Bank’s Annual Report 2020 amid the
mounting human toll and global economic fallout intensified by
the COVID-19 pandemic. The ongoing pandemic has triggered
the deepest economic recession in nearly a century, threatening
health, disrupting economic activity, and hurting well-being
and jobs. The IMF described the global decline as the worst
since the Great Depression of the 1930s.It said the pandemic
had plunged the world into a "crisis like no other". It is under
this circumstance that we present the Bank’s annual report 2020
for your perusal.
Islami Bank Bangladesh Limited (IBBL) was established in 1983
and it is about to complete its 38th birth day in 2021. The
foundation of this first Islamic Bank of South and South-East
Asia was laid in 1974 by the Father of the Nation Bangabandhu
Sheikh Mujibur Rahman and his Government by signing in the
IDB Charter (1974). This has now turned into the country’s
largest shariah compliant private sector Bank providing
shariah-based financial products and innovative
technology-based banking solutions. We express our deep
gratitude and highest tribute to him and his successors specially
to his daughter Her Excellency Prime Minister Sheikh Hasina at
a time when the country is celebrating its Golden Jubilee
coinciding with the centennial birthday of the Father of the
Nation Bangabandhu Sheikh Mujibur Rahman.
On the occasion of the 38th year of establishment of the Bank,
our guiding philosophy has been set to be ‘Financial Inclusion:
Small Savings & Accelerated Development’ with emphasis on
government’s “Vision 2021” in creating value for shareholders.
IBBL Team is committed to be by its valued customers and
stakeholders in the crisis of both economic recession and the
ongoing COVID pandemic. Our employees have shown
immense resilience and willingness to serve the customers, with
about all of the branches being functional during the lockdown
along with an enormous ATM/CRM and Agent network. We
further accelerated our digital delivery with an array of new
offerings to ensure uninterrupted services to our customers. In
these challenging times, we remain committed to participating
in the growth of the economy by providing highest stimulus
fund. In the process, we will also strive to emerge stronger as an
institution. We thank our stakeholders for the faith that they
have placed in us and look forward to their continued support.
It gives us great pleasure to place before you the contemporary
economic context and highlights of the Bank’s performance
2020.
ANNUAL
22 REPORT
2020
Chairman’s Message
World Economy
The coronavirus brought the most dramatic societal disruption
and economic collapse in peacetime memory. According to the
United Nations World Economic Situation and Prospects
(WESP) mid-2020 report, 'World faces worst recession since
Great Depression' in the 1930s and the global economy is
projected to contract sharply by 3.2 percent this year (2020).
The global economy is also expected to lose nearly $8.5 trillion
in output over the next two years due to the devastating
COVID-19 pandemic, wiping out nearly all gains of the
previous four years. The sharp economic contraction comes on
top of anemic economic forecasts of only 2.1 percent at the start
of the year. The “world shrink at the fastest pace in decades”, the
International Monetary Fund (IMF) unfolds.
The WESP report estimates that GDP growth in developed
economies is expected to contract by 5.0 percent in 2020, while
the output of developing countries will shrink by 0.7 percent. A
modest, 3.4% growth barely enough to make up for the lost
output is expected in 2021. World trade is forecast to contract by
nearly 15 percent in 2020 amid sharply reduced global demand
and disruptions in global supply chains. Nearly 90 percent of the
world economy has been under some form of lockdown,
disrupting supply chains, depressing consumer demand and
putting millions out of work.
IMF made similar projections. The IMF’s estimate of the global
economy growing at 3 percent in 2020 is an outcome “far worse”
than the 2009 global financial crises. Economies such as the US,
Japan, the UK, Germany, France, Italy and Spain are expected to
contract this year by 5 to 9 percent. Advanced economies have
been hit harder, and together they are expected to grow by 6
percent in 2020. Emerging markets and developing economies
are expected to contract by 1 percent. If China is excluded from
this pool of countries, the growth rate for 2020 is expected to be
2.2 percent.
The pandemic is exacerbating poverty and inequality.
According to the United Nations World Economic Situation
and Prospects (WESP) mid-2020 report, the pandemic will
likely cause an estimated 34.3 million people to fall below the
extreme poverty line in 2020, with 56% of this increase
occurring in African countries. An additional 130 million
people may join to the ranks of people living in extreme poverty
by 2030, dealing a huge blow to global efforts for eradicating
extreme poverty and hunger. The pandemic, which is
disproportionately hurting low-skilled, low-wage jobs, while
leaving higher-skilled jobs less affected will further widen
income inequality within and between countries.
Chairman’s Message
Most developing economies saddled with chronic fiscal deficits
and already high levels of public debt are finding it very hard to
implement sufficiently large fiscal packages, which have thus far
averaged less than 1% of their GDP. Falling exports and growth
are rapidly undermining the debt sustainability of many
developing countries, particularly those that are heavily
dependent on commodities, tourism revenues or remittances.
Growing debt distress poses an enormous challenge to these
countries, further constraining their ability to implement
much-needed stimulus measures.
Facing an unprecedented health, social and economic crisis,
governments across the world have rolled out large fiscal
stimulus measures equivalent to an estimated 10 percent of
GDP to combat the pandemic and minimize its livelihood
impacts. However, the depth and severity of the crisis
foreshadows a slow and painful recovery.
National Economy
Bangladesh has an impressive track record for growth and
development, aspiring to be a middle-income country by its 50th
birthday. It has made remarkable progress in poverty reduction,
supported by sustained economic growth. It has been among the
fastest growing economies in the world over the past decade,
because of its demographic dividend, strong ready-made
garment (RMG) exports, and stable macroeconomic conditions.
As a result, Bangladesh reached lower-middle-income status in
2015 and is on track to graduate from the UN’s Least Developed
Countries (LDC) list in 2026. Poverty declined from 44 percent
in 1991 to 15 percent in 2016, based on the international poverty
line of $1.90 a day (using 2011 Purchasing Power Parity exchange
rate). Moreover, human development outcomes improved along
many dimensions.
The COVID-19 pandemic impacted Bangladesh profoundly
and the economic impact has been felt in three main avenues:
first, a drop in domestic economic activity, after the shutdown
announced on March 26 (now gradually being lifted and
re-imposed); the second is a decline in exports of ready-made
garments, which represent more than 80 percent of
Bangladesh’s exports and have been strongly impacted (overall
exports fell by 83 percent year-on-year in April). Finally, there
has been a fall in remittances from Bangladeshis living mostly in
Middle Eastern countries, affected not just by the pandemic but
also by the decline in oil prices. World Bank estimates have
projected that total remittances by migrant workers from
Bangladesh will fall to $14 billion for 2020 around a 25%
decrease from the previous year. Figures released by Bangladesh
Bank show that year-on-year remittances for the month fell by
25%, indicating that the World Bank’s projection is,
unfortunately, likely to hold true. The drop in these payments,
which have traditionally averaged between $300 and $600 a
month, will represent a significant loss to millions of household
incomes in Bangladesh. International remittances normally
represent around 7% of Bangladesh’s GDP and therefore the
economic importance of the more than 10 million migrants
from Bangladesh who sent close to $18 billion in 2019 cannot be
overstated.
The net export (2020) growth was negative 47.0 % which worth
USD 4202 million due to pandemic hit from the corresponding
period. Foreign direct investment to Bangladesh dropped last
fiscal year, the first decline in seven years, because of the
slowdown in business. The twelve-month average general
inflation was 5.73 percent in 2020 and this was 2.50% higher
than the previous year. In 2020, export and import amounted to
USD 19.23 and USD 27.27 billion respectively and they were
53% and 50% lower than the previous fiscal year. Against this
backdrop GDP growth of Bangladesh in FY2019-20 declined to
5.24% from 8.2% in the previous fiscal with lockdown related to
Covid-19 impairing economic activity in the last quarter
(Oct-Dec'20). In addition to the impact on health, GDP growth
and poverty the pandemic may also have long term economic
implications as a result of reduced female labor force
participation, learning losses, and heightened financial sector
vulnerabilities. Looking ahead the outlook of the global
economy economists forecasted that this year Bangladesh and
the world is likely to experience a deep-rooted recession.
The extent of the impact of the pandemic will depend on the
duration of the crisis and the mitigation measures taken. The
Bangladesh government has acted quickly with public health
directives, stimulus package, and scaled-up social protection
programs to help detect, prevent, and respond to the
COVID-19 outbreak and protect the people. The Government is
committed to tackle the pandemic, accelerate recovery, and
build resilience.
Challenges Ahead
Resolving longer term structural challenges could accelerate the
post-COVID-19 recovery. Reform priorities include a
diversification of exports beyond the RMG sector, deepening
the financial sector, improving urbanization, and strengthening
public governance. Addressing infrastructure gaps would
accelerate growth and reduce spatial disparities in opportunities
across regions and within cities. Human capital development
remains a priority as well. While Bangladesh’s ranking on the
Human Capital Index is higher than the South Asian average, it
is below the levels observed in comparator countries.
Addressing vulnerability to climate risks would support the
resilience of economic development to future shocks. Pivoting
towards green growth could support the sustainability of
development outcomes for the next generation. With the right
policies and timely action, Bangladesh can accelerate its
recovery from the economic downturn and continue to
progress towards upper-middle income status.
ANNUAL
REPORT 23
2020

Digitization and Technology Adoption
The ongoing pandemic demonstrated the importance of
digitization and technology adoption. Work from home using
Zoom app, digital solutions to banking (fintech) and
remittances, artificial intelligence, machine learning and
e-commerce have immensely been popularized by the
pandemic. The digitization will continue to rule all sectors of
the economy including finance and business. We are to take
lessons for future to keep the economy moving.
The opportunity of transitioning individuals and their families
to digital solutions such as mobile phone apps or fintech cannot
be realized by providers alone. A coordinated effort can be made
between public-sector institutions, customers (meaning
Investment clients, depositors etc.) and remittance services
providers in order to help them open bank accounts, and to
improve access to digital solutions to all kinds of business
transactions. This will be cost effective and profit sensitive.
Banks and mobile money providers should be encouraged to
come forward to adopt digital solution to meet all daily
financial, business and banking needs.
Neo-Normal Economy
The COVID-19 pandemic still spreading across the world and
caseloads reaching record levels in many economies, the global
outlook will remain heavily dependent on the pandemic’s
evolution. Turning the tide of the pandemic in the near term
will be challenging, requiring voluntary social distancing on the
part of households and the imposition of a variety of pandemic
management measures by governments. The widespread
deployment of effective vaccines will play a key role in halting
the pandemic’s progression and is also expected to strengthen
economic activity by raising confidence and improving
financial market conditions despite that the global economy is
growing again after a 4.3% contraction in 2020. To support
economic recovery, authorities also need to facilitate a
re-investment cycle aimed at sustainable growth that is less
dependent on government debt.
The economic damage caused by the COVID-19 pandemic is
largely driven by a fall in demand, meaning that there are not
consumers to purchase the goods and services available in the
global economy. Despite the clear danger that the global
economy is in, there are also reasons to be hopeful that this
worst-case scenario can be avoided. Governments have learned
from previous crises that the effects of a demand-driven
recession can be countered with government spending.
Consequently, many governments are increasing their
provision of monetary welfare to citizens, and ensuring
businesses have access to the funds needed to keep their staff
employed throughout the pandemic. In addition, the specific
nature of this crisis means that some sectors may benefit, such as
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2020
Chairman’s Message
e-commerce, food retail, and the healthcare industry providing
at least some economic growth to offset the damage. Finally,
there is the fact that the crisis may have a clear end date when all
restrictions on movement can be lifted (for example, when all
people are vaccinated). Taken together, this means it is at least
possible the global economy could experience a sharp rebound
once the pandemic is over. There are still many variables that
could affect such an economic recovery for example, a reduced
supply of goods and services to meet lower demand could create
mid-term shortages and price increases but there are some
reasons to think that, with the right mix of appropriate
government responses and luck, some of the more apocalyptic
predictions may not come to pass.
History We Have Made
As with the previous decades, IBBL continued to sustain its
growth. In the reporting year, bank reached new milestones in
most of the key business indicators. In deposit mobilization, the
bank crossed Tk. 1.16 trillion; first time in history of Bangladesh
that a private commercial Bank crossed one trillion deposits
mostly by retail depositors. This has registered a growth of
24.65% over the previous year. Investment (General) peaked to
Tk. 1,035 billion, an all-time high, recording 15.16% growth.
The Return on Equity (ROE) and Return on Asset (ROA)
recorded at 7.34% and 0.35%, respectively and the Earning per
Share (EPS) stood at Tk. 2.81,Total assets of the Bank rose to
Tk.1,417 billion marking a growth of 24.12 percent higher than
the previous year. In 2020, the export and import business of
IBBL was Tk. 225 and 419 billion respectively. The Bank’s
foreign inward remittance receipts rose to Tk. 486 billion, and
this was 59.17% higher than the previous year. About
one-fourth of the country’s total inward foreign remittance is
mobilized by IBBL. These achievements were possible all
because of the customers’ and shareholders’ faith on us and the
commitment of IBBL team in the pursuit of their work.
Building the Nation Together
Bangladesh economy has been witnessing the adverse
consequences of Covid-19 pandemic since early 2020 and this is
being manifested by key macroeconomic and sectoral
performance indicators. Although, in terms of Gross Domestic
Product (GDP), Bangladesh is one among the few south Asian
countries demonstrating positive growth rates in 2020 there are
reasons for concerns as the country moves towards the end of
FY21. IBBL always extends its cooperation and generously
comes forward to help people and businesses whenever the
nation faces any crisis including natural calamity. Accordingly,
IBBL prioritized investing into sectors that concern people’s
basic needs and these centers around industrialization, exports,
social welfare, poverty alleviation, agriculture, women
empowerment etc. during the ongoing pandemic. In addition,
Chairman’s Message
we would continue to perform well in all avenues of Corporate,
Medium, Small Enterprise, Commercial and Consumer
segments to improve return to our shareholders. We already
have provided the highest stimulus fund to pandemic affected
SME business during the period under report in line with
Government decision. IBBL pursues an integrated strategy of
investing into need-based, labor-intensive, productive,
import-substituting, and export-oriented sectors. The Bank also
works to uphold the dignity of the nation by contributing more
in the socio-economic and human development initiatives of
the country.
Fintech and digitalization are shaping the future of financial
services industry to a completely new dimension. To keep pace
with the fast-paced changes in banking technology, we have
been focusing on efficient technology and innovations. IBBL
has always been at the forefront in embracing digitization of
banking services and processes. With an aim of making banking
available on all digital platforms and devices, we have invested
heavily on digitization of services. Digitization has helped
improving customer experience in connectivity in a
comprehensive manner. This year IBBL has worked on
strengthening Bank’s risk management, especially operational
and compliance risk. Bank’s strong investment discipline has
enabled us to perform well even in this volatile situation of
country’s financial system. To enhance Bank’s risk management
capabilities, we are investing in people, technology,
infrastructure, and IT security. We are the pioneer of having
own software and security system in Banking industry of
Bangladesh. We always strive for sustainable and client-led
revenue growth by deepening our relationships with and
understanding of customers and roping in new ones in target
segments. As an initiative to reach previously unreached
customers in our financial framework, IBBL is expanding its
network through agent banking and sub-branches.
COVID 19 Implications for Banks & IBBL
For banks in particular, the pandemic generates multifaceted
crises, mostly through increases in default rates. This is likely to
be worse in developing economies with poor financial market
structures.
Bangladesh’s banking sector already has a high level of
non-performing loans (NPLs) and the pandemic is likely to
worsen the situation. Using a state-designed stress testing
model and data from 30 DSE listed Commercial Banks, Bipasha
Barua and Suborna Barua have recently estimated the impacts
of the COVID-19 pandemic from three perspectives-
risk-weighted asset value, capital adequacy, and operating
income (profit/interest income) under different NPL shock
scenarios. The shock range is defined based on the banking
sector’s exposure to the RMG & textiles and SMEs (the two
biggest pandemic victims).
The study suggests that all banks are likely to see a fall in
risk-weighted asset values, capital adequacy ratios, and
operating income at the individual bank and sectoral levels
under considerations. The decline will be disproportionately
greater for larger NPL shocks and for larger Banks for the three
model estimates and they are likely to be more vulnerable. The
study findings further suggest that a 10% NPL shock could force
capital adequacy of all banks to go below the minimum
BASELIII requirement and a shock of 13% or more will force
sectoral CAR down to zero or negative. This is possible with just
over 3–5% loss in RMG export orders. Given that the value of
the cancelled RMG export orders are already three times larger
than the sectors’ total outstanding loan taken from the banking
sector and that overall economic recovery remains uncertain,
NPL shocks could realistically be well over 10%. If this persists,
it may trigger bank-runs and systemic banking sector crises.
This calls for an immediate, phase-wise, and innovation-driven
policy measures with a long-term approach to prevent an
imminent banking sector crisis in Bangladesh. The findings
could be considered as a warning sign for other emerging
businesses where banks have high lending exposure to
COVID-19-sensitive sectors and traditionally suffer from poor
asset quality, high rates of NPLs, and weaker policy and
regulatory frameworks. The paper sends a clear message to
IBBL as the largest private sector Bank of Bangladesh. IBBL
should be extra careful and find ways to avert financial and
capital stress on bank on account of the COVID and take
appropriate measures to minimize the negative COVID-19
impacts on its investments and business.
The other challenge for Commercial Banks in general in
Bangladesh and IBBL in particular is the rapid technology
adoption. IBBL is very open to change and has a very strong
capability to adopt to newer technologies. IBBL should try to
accomplish all its customer needs using all its digital solutions
(cellfin, m-cash & other digital solutions) through its 6000
outlets (meaning Bank branches, agents, sub-branches and
ATM/CRM outlets) under the ongoing pandemic and beyond
in a cost effective ways. This consolidation will benefit both the
customers and the Bank.
Inclusion of Unbanked People
In 2020, IBBL has touched the cliental base of 13.84 million with
8.05% growth over 2019. For serving the unbanked population
of the country, IBBL started its Agent Banking operation in July
2017. At present the number of IBBL agent outlets stands at
2,273 nationwide. This timely inclusive banking has already
demonstrated a remarkable growth in financial inclusion of the
Bank. Bangladesh Bank (BB), the country’s central bank, vide its
circular (BRPD-28, dated 27 December, 2018) also allowed
Banks to set up ‘banking booth’ of scheduled banks and then
converted them into ‘sub-branch’ one year later
(December,2019) to improve financial inclusion of the country’s
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REPORT 25
2020

unbanked people. A new value is added to our banking services
through the installation of such banking operations and
services over the country. At present the number of IBBL
Sub-Branches is 162.
IBBL Microfinance: A Proven Tool for Poverty
Alleviation
Since inception, IBBL has been working for every group of
people irrespective of caste, religion or gender. To eradicate
rural poverty through employment generation, agriculture and
setting up agro-based industries, IBBL introduced ‘Rural
Development Scheme’ (RDS) in 1995.This unique rural
initiative includes, in addition to generating rural job
opportunities, some basic human development skills like skill
enhancement in cottage industries, home food production,
vocational aptitude, training, savings, various income
generating activities, micro-investment and awareness on social
security etc. The bank is equally concerned for economic
upliftment of the urban poor. In 2012, IBBL introduced ‘Urban
Poor Development Scheme’ (UPDS) for the urban
slum-dwellers. In 2020 IBBL’S RDS and UPDS covered total
25,842 urban sites and rural villages. The number of RDS and
UPDS members in IBBL has been growing at a faster rate since
its inception. In 2020, the total RDS and UPDS members
increased to 1,323,705 and this is unique in the context of
commercial banking in Bangladesh. The outstanding micro
finance investment of RDS and UPDS reached at TK.37,767
million in 2020 and this is 15% higher compared to the previous
year. It is to be noted that loan recovery rates under this
programs are quite impressive (98.81%).
Corporate Governance and Code of Conduct
Being the pioneer of Shariah based banking in the South and
Southeast Asia, IBBL is always committed to adopting highest
corporate governance standards for attaining its operational
goals. At IBBL, Corporate Governance is aimed at increasing
the shareholders’ value by being efficient, transparent,
professional and accountable to all its stakeholders, the society
and the environment as well. IBBL complies with the guidelines
regarding composition of the Board of Directors, all its
Committees, terms of the Office of the Directors as well as
competency and eligibility of the Directors as outlined by the
Bangladesh Bank, the Companies Act, 1994 and the Bank
Company Act, 1991 (Amended up to 2018). The Bank has also
implemented the requirements of the Corporate Governance
Code of the Bangladesh Securities and Exchange Commission.
Pursuant to that, the compliance status of the Bank has been
reported in this Annual Report for information of the Members,
stakeholders and all statutory and market regulations.
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2020
Chairman’s Message
Risk Management and Sariah Compliance
Complying with the principles of Shari’ah as enshrined in the
Holy Quran and the Sunnah of the Prophet (peace be upon
him) is the essence and raison d’être of IBBL. A sound and
effective Shari’ah compliance framework is thus critically
important to give confidence to the general public about
Shari’ah conformity of the IBBL’s products and services.
Endeavors continue to ensure that the operations of IBBL
remain in conformity with the rules and principles of Shari’ah.
Accordingly, it has been issuing regulations, instructions and
guidelines on Shari’ah compliance since the inception. The
objective of risk management in IBBL is not to prohibit or
prevent risk taking activity, but to ensure that the risks are
consciously taken with full knowledge, clear purpose and
practice of Risk Management culture and understanding so that
it can be measured and managed properly. IBBL believes in not
ignoring the risks or believing they can be passed off also. So,
the objectives have been set accordingly. The objective of the
Bank is to maximize shareholder’s wealth by increasing bank
business activities. As part of our global compliance initiatives,
we have undergone a rigorous Anti-Money Laundering (AML)
remediation process through appointing Kroll, a globally
reputed organization for AML and Risk Management
Consultancy. In 2020, IBBL significantly improved its Sariah
compliance. The percent of Sariah violation was 1.10% in 2020.
Social Responsibility
IBBL passionately believe that a better society is fundamental
precondition for a better business environment. As such, CSR is
viewed as one of the core corporate values of the Bank. As we all
know, United Nations set seventeen goals popularity known as
Sustainable Development Goals, (such as No Poverty, Zero
Hunger, Good Wealth and Well Being, Quality Education,
Clean Water and Sanitation, Affordable and Clean Energy,
Decent Work and Economic Growth, Industry Innovation and
Infrastructure, Reduced Inequality, Sustainable Cities and
Communities, Responsible consumption and production,
Climate Action, Life below water, Life on land, Peace justice and
strong Institution, Partnership for the Goals ) to improve the
quality of life of people. In line with SDG, IBBL spent over
TK.855 million for performing CSR activities adhering to the
principle of people, planet among 413,665 beneficiaries during
the period under report. Among them 3,072 students were
awarded scholarships/stipends amounting TK.136 million in
2020 to pursue higher studies at different levels.
Recognition as Driving Force
Awards and accolades reflect our achievements in banking
operations and business. As previous, IBBL won several
national and global awards and recognitions including the
second highest taxpayer award by the NBR in 2020. IBBL is the
Chairman’s Message

only Bangladeshi bank listed in the prestigious list of world’s using new technologies and a relentlessly customer first ethos.
tops ‘1000’ banks. This has been ranked as the world top 1000 We are passing through a difficult time, (in terms of both
best bank list for over the past eight consecutive years by the UK economic recession and health pandemic) and we will have to
based magazine: ‘The Banker’. IBBL’s ranking improved from stand by not only for our customers but also for our
943rd position in 2019 to 904th position in 2020. This bank has communities. We are committed to strengthening communities
also been awarded the “MasterCard Excellence award 2020. As through our social responsibility and philanthropic initiatives.
recognition of people’s bank; we have also been recognized as On behalf of the Board, management and employees, we remain
one of the best compliant banks on AML & CFT issue by BFIU. grateful to the Government of the Peoples Republic of
IBBL has achieved the 'Excellence in Product Innovation and Bangladesh and its competent Prime Minister Her Excellency
Excellence in Prepaid Card Business' awards conferred by VISA Sheikh Hasina for creating congenial and stable socio-economic
in 2020. We have also been honored with Gold Award of environment for doing business. I want to thank shareholders
ICMAB Best Corporate Award in the category of Private and the members of the Sariah Supervisory Committee for their
Commercial Bank (Islamic Operation). efforts to guide us to be on the right track. I would like to offer
my sincere gratitude to Bangladesh Bank (BB) and other
Looking Forward regulatory authorities for their support and invaluable guidance
and for their continued trust on the Bank. I would also like to
Performance of Bangladesh economy in 2021 largely depends thank our external auditors for carrying out the auditing
on handling of certain issues concerning export, remittances, professionally and advising us for compliance as per the set
private sector investment, employment generation and revenue guidelines. Finally, once again I want to express my sincere
generation and most importantly how we manage the revival thanks to all the members of IBBL family for moving the Bank
efforts from the crisis of COVID-19 pandemic. Implementation forward. I am confident Allah accepts all our endeavors and give
of 9% Rate of Return (except credit cards) effective from April us the best reward in here and the hereafter.
2020 is expected to affect liquidity and profitability of banking
industry. Moreover, a longer lasting and more intensive Ameen.
coronavirus outbreak may weaken world economic prospects
considerably which has affected remittance flow very positively
in 2020. Performance of Bangladesh economy in 2021 will also
depend on economic recovery of Eurozone and US economy
from this crisis. Growth is real only when it is sustainable and
serves the long-term interest of stakeholders. We are committed
to our mission of enabling growth and progress and will (Mohammad Nazmul Hassan)
continue to be true to our values as we serve our clients. In 2021 Chairman
we will continue to focus on control and risk management to
ensure IBBL’s position as the strongest and stable institution as
we have been for last couple of years. We have delivered
consistent shareholder returns and built a strong capital
position to grow sustainably. Whatever we have achieved could
not have happened without the commitment and hard work of
each of you. On behalf of the Board of Directors, I take the
privilege to acknowledge your productive hard work. Through
a wide range of branch network and setting up best-in-class
digital services, IBBL will also continue offering the best
possible banking services across the country. I am confident
that we will continue as a striking symbol of growth and
development in the years to come InshaAllah.

We Remain Obliged
IBBL has to trail a long arduous journey of closed to four
decades and is good at navigating pressures of highly uncertain
economic environment. It is now well positioned with a strong
capital base, superior corporate governance, a disciplined
approach to risk. It is focused on growing its retail franchise

ANNUAL
REPORT 27
2020
 MANAGING DIRECTOR’S
MESSAGE

ANNUAL
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2020
ANNUAL
REPORT 29
2020

Honorable shareholders, distinguished members of the Board
and dear stakeholders.
Assalamu Alaikum Wa Rahmatullah
All praises are due to Allah, the Most High, Exalted in Might
and the Most Merciful.
Islami Bank Bangladesh Ltd. has completed 38 years of its noble
journey towards excellence and sustainability. We always strive
towards our best efforts to take our beloved institution to new
height of accomplishment and aspiration. By the grace of
Almighty Allah (SWT), IBBL has been blessed with outstanding
success over the years and already touched glorious heights in
all areas of operations overcoming challenges and grasping the
opportunities. I feel honored and am pleased to present the
performance and achievements of the Bank for the year 2020.
The unprecedented impact of COVID-19 pandemic last year
has slowed down global and macro economic progress
marginalized business profitability and shrunk opportunity of
international trade that ultimately affected the health of the total
banking sector. In the backdrop of the global and national
challenges, we have been able to achieve our targets in key
business areas, diversifying products & alternative delivery
services while solidifying Bank’s position in the country’s
financial sector. Despite the hurdles, IBBL has recorded
noteworthy developments and milestone achievements in the
financial of 2020.
Global Economy
Immediately after a good start in 2020, global economy suffered
an enormous shock leading to the lowest growth in decades due
to the COVID-19 pandemic. The pandemic left negative
impacts on the economic activities in the year than anticipated.
It is supposed to further result in contractions across the
emerging market and developing economies. Thereby the
global economy contracted sharply by 3.50% in 2020. This
represents the deepest global recession since the Second World
War. As the global economy is struggling to climb out of the
depths of crisis, the recovery is projected to be more gradual
than anticipation. Amid exceptional uncertainty, the global
economy is projected to grow 5.5% in 2021 and 4.2% in 2022 as
estimated by IMF. Besides, unequal economic development,
global poverty, degradation of the environment and warming
remain as the major economic challenges of the year.
National Economy
Bangladesh recorded one of the fastest growth rates in the world
in the last few years on the wheel of an economic performance.
Its stable economic growth and global integration into the
ANNUAL
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2020
Managing Director’s Message
global economy has made it a model for economic
development. It has a good record of reduction in the poverty
and social inequalities. Due to the outbreak of the pandemic,
unprecedented contractions have occurred in merchandise
exports and industrial production. As a result, like most other
emerging economies, Bangladesh has been affected and had to
tackle health care, sustainable export, saving SME and
attracting more FDIs to achieve the expected GDP growth.
Growth has now regained momentum in the current fiscal year
as the external sector strengthens and supportive fiscal and
monetary stimulus measures have been taken by the
Government. According to the World Bank, Bangladesh
economy is likely to grow 3.6% in the current fiscal year as
exports and consumptions would continue to recover in the
coming days.
Domestic Banking Sector
Like all other wings of economy, domestic banking sector has
suffered a lot due to COVID-19. NPL/NPI of the banking sector
is expected to rise to a new level as the credit worthiness of the
investment clients may be deteriorated and repayment of
investment may be hampered. To overcome the impact of
pandemic situation, Government has declared different
stimulus packages most of which is funded by the banking
sector. To increase liquidity of the Bank, Bangladesh Bank has
increased the cap of IDR, reduced the CRR (Cash Reserve
Requirement), lowered Repo Rate and opened the door to
purchase T-Bill from Banks. Due to the supportive policies of
the government, the banking sector could maintain adequate
liquidity to address stimulus packages. However, there was an
unprecedented fall in the operating income of Banks due to
reduction in lending rate and fall in ancillary business in the
year.
Islamic Banking Sector
Consistent with the worldwide expansion of Islamic banking,
Bangladesh has experienced phenomenal growth in Islamic
banking meeting the hope and aspirations of the country’s
people through the system. Since the start of IBBL in 1983,
Islamic banking industry has recorded noteworthy
performance and at present occupies about twenty five percent
market share of the entire banking in Bangladesh. The inherent
strength, welfare orientation as well as profit loss sharing
banking system contributed the substantial growth of Shariah
based banking of the country. As a result Islami Banking system
has drawn the attention of the mass people in Bangladesh.
Presently 10 full fledged Islamic Banks and 23 Conventional
banks with their branches or windows offer shariah compliant
financial services. Mentionable that, recently two conventional
banks have been converted into full fledged Islami Bank.
Managing Director’s Message
IBBL-Pioneer Islamic Bank in Bangladesh
Being established as the first Shariah-based Bank in South-East
Asia, Islami Bank Bangladesh Limited (IBBL) has opened up
need based, socially-responsive and development-focused
banking in an unique corporate culture. As a part of welfare
orientation, IBBL introduced a diversified and wide range of
deposit, investment and foreign exchange products coupled
with techno based banking services to people of all strata of the
society. IBBL works for people of the society irrespective of
caste, creed or religion, gender and political standing presenting
itself as the “Bank for all”.
A Sustainable Banking Institution
Since its inception, IBBL has been relentlessly working for
overall development by way of ensuring financial inclusion,
inclusive growth as well as sustainable socio economic
development of the country through introduction of modern &
welfare oriented banking products and services. For
sustainability, we have ensured technological advancements in
banking that are reducing the cost of serving the people and
opening up a potentially significant growth opportunity for all.
We are heading forward with our innovative financial services,
products and instruments for the poor, the deprived and the
distressed in fulfilling the commitment to the people as well as
to the society.
Core Banking Operations and Performance
in 2020
In 2020, we have further strengthened our position in the
banking industry in respect of deposit, investment, operating
profit, trade financing, alternative delivery services, reducing
non performing Investment as well as keeping the image of the
bank at the top. Despite the pandemic of COVID-19 and many
other challenges in 2020, we have achieved outstanding
performance in most of the financial indicators. The Bank also
contributed significantly to the socio-economic development of
the country in general and the pandemic- stricken mass people,
in particular.
Deposit: Resource mobilization to unparallel height
By the mercy of Almighty Allah (SWT), IBBL made a history by
crossing Trillion taka deposit base as the one and only private
bank in the country on June 30, 2020. In Dec, 2020 Bank’s total
deposit reached at TK. 1,179,476 million with the growth of
24.65% over the previous year. Fresh deposit of Tk. 233,259
million was mobilized breaking previous records of deposit
mobilization in a single year. Cost Free deposit increased by TK.
20,146 million with growth of 24.02% during the year under
review.
Investment: Focusing need based deployment
IBBL makes investment within the Shariah framework not
merely focusing on profit maximization but for carrying out the
responsibility of social and economic wellbeing. In addition to
the investment in trade, commerce and industry, it makes
investment in Small and Medium Enterprises, Micro Finance,
Green Projects, various income generating sectors and social
welfare oriented schemes and programs aiming at economic
wellbeing of people from all walks of life. Though COVID-19
pandemic caused a massive disruption in economy and
business, we tried our best to deploy investable fund at
maximum level. Total general investment of the bank in 2020
was increased by 15.16% over 2019. Total General Investment
also crossed 1 trillion taka landmark closing with TK. 1,035,288
million in December-2020 against that of Tk. 899,013 million of
the previous year. To meet up the recent economic crisis arisen
from the Covid-19 pandemic IBBL was bestowed with the
highest responsibility to ensure and implement stimulus
packages announced by the Government and Bangladesh Bank.
IBBL has disbursed almost the entire portion of the allocated
amount upto December 2020 to recovery of the economy
during the Pandemic situation.
International Trade: Consolidating market share
with compliance
The foreign exchange business of the bank has long been a
success story that placed IBBL atop of country’s Banking. IBBL
has attained substantial market share in Import, Export &
Remittance that grew substantially over the years. Compared to
2019, import business rose from Tk. 399,884 million to Tk.
419,046 million with a growth of 4.79% over the past year.
Market share of import business of IBBL stood at 11% with an
increase of 2.00% from 2019. In 2020, Export business of IBBL
was Tk. 224,970 million securing market share of around 8%.
Foreign Remittance rose to Tk. 486,274 million with a growth
of 59.17% with the increase of market share by 5.72% compared
to the year 2019 that stood at 25% in 2020. IBBL performed all
time high remittance procurement of USD 6.34 billion during
2020.
Operating Performance
Performance and profitability of the Banking Industry have
severely been affected by the unprecedented COVID-19 and
other economic downtrend during the year 2020. Single digit
profit rate had also an impact on Banks profitability as the
spread squeezed to a narrower position than past years. Despite
we could manage to earn profit after tax of Tk 4,521 million
during 2020 compared to Tk. 5328 of the previous year.
Consequently the Earning Per Share (EPS) of the bank stood at
Tk 2.81 in 2020 against Tk 3.31of the previous year.
ANNUAL
REPORT 31
2020

Treasury Operations: Optimizing profitability despite
volatility
With dynamism in risk and liquidity management, optimum
utilization of fund, efficient market analysis, effective
management of alternative placement in both money market
and foreign exchange market, the treasury operations of our
bank demonstrated excellent performance in 2020. We earned
exchange income of Tk. 2,227 million in 2020. Total income of
the treasury increased by 7.49% over 2019. OBU of IBBL is
performing very well as investment growth was 60% in 2020
over the last year. Operating Profit in OBU marked considerable
growth of 200%. IBBL plays an important role in stabilizing the
inter-bank market as well as boosting up foreign currencies
reserve of the country.
Asset Quality: Always keeps the health in sound
IBBL continues to maintain good asset quality despite many
odds in macroeconomic fundamentals. Investment facilities are
allowed in a manner so that investment expansion goes on
ensuring optimum asset quality. Thereby IBBL has been able to
keep the non-performing investment lower than the industry
average. Bank’s classified investment to total general investment
decreased to 3.48% in 2020 from 3.82% in 2019.
Shari’ah Compliance: Strict adherence to core values
Strict adherence to Shari`ah principles in the banking
operations is the priority of IBBL. Conducting Shari`ah audit
(off-site & onsite) to check violation and ensure transparency in
Shari`ah compliance is one of the unique features of IBBL
corporate culture. The doubtful income as observed by Shari’ah
Audit of the Bank slightly increased to 1.10% in 2020 from 0.80
% of the previous year, and we hope to bring it down to Zero
level. Due to COVID-19 pandemic, many doubtful deals were
not possible to be adjusted immediately by the clients for which
the doubtful income for the year 2020 has slightly increased
compared to the previous year. In 2020, IBBL has organized 35
Shariah awareness programs across the country that were
attended by 11000 employees from different level.
RDS: Welfare oriented banking
Islami Bank Bangladesh Ltd., the pioneer Islamic bank in the
South East Asia has been running its Rural Development
Scheme since 1995 through disbursement of micro credit.
Currently Rural Development Scheme (RDS) is in operation at
282 branches and Urban Poor Development Scheme (UPDS) at
24 branches, i.e in total 306 branches covering 64 districts, 490
Upazillas and 25,842 villages of the country. At present, total
number of existing member under the Scheme is 1,323,705 out
of whom 92% are female. Since inception of RDS, our initiatives
have been fully dedicated to create economic, social &
environmental development and well being of the distressed
people especially in rural areas.
ANNUAL
32 REPORT
2020
Managing Director’s Message
AML & CFT Environment: Towards global standard
As a part of Islamic philosophy, IBBL is committed to maintain
international standard in preventing corruption, bribery, cyber
crime as well as money laundering & terrorist financing. IBBL
as the first Bangladeshi Bank has engaged USA based world
renowned consultancy organization Kroll Advisory Solutions
for AML remediation of the Bank in addition to the deployment
of Accuity for Screening and SAS for Transaction Monitoring.
Besides IBBL has already partnered with Election Commission
web-link for verification of NID and introduced central
on-boarding system & e-KYC through the core banking system.
To strengthen AML & CFT compliance, a dedicated team
consisting of 27 CAMS is working at branch and head office
level.
Agent Banking: Special delivery channel towards
financial inclusion
In line with sustainable development goal, IBBL Agent Banking
has demonstrated a steady growth in financial inclusion by
extending bank’s reach further & faster and thus proved itself as
very efficient alternative service delivery channel. Starting from
December 2017, this channel reached the landmark of 2,273
outlets (2152 outlets are in rural areas) by opening 1261 new
outlets in 2020. This geographical coverage shows that the Bank
is promoting financial inclusion in the rural areas as aimed in
the guidelines of agent banking. The number of accounts and
accumulated deposit by this channel stood 13.02 lac & Tk.
4,945.00 crore as on 31.12.2020 which were 4.57 lac & Tk.1,610
crore respectively in 2019. Besides, inward foreign remittances
for Tk. 22,224 crore was distributed in 2020 as against Tk.2,422
crore in 2019 scoring the growth 818%. Agent outlets did a
commendable job for country’s economy with continuing their
services to the customers during lockdown period of Covid-19
pandemic.
Human Resources Management
In the pandemic situation, entire human resources of the Bank
actively played positive role as per directives of World Health
Organization (WHO), the Government as well as Bangladesh
Bank. During the period, various measures like information of
quick response team, special committee for caring &
supervision; rationing of workforce & implementation of roster
duty; payment of special incentive allowance; facilitating the
telemedicine; supplying of medical equipment; reimbursement
of treatment cost etc. were adopted. With regard to the regular
functions such as recruitment, placement, transfer, welfare,
disciplinary procedure etc. were taken for facing the situations.
The meetings of different committees were arranged virtually
ensuring optimum customer satisfaction.
Managing Director’s Message
Information Technology: Towards door step services
IBBL remains ahead in providing IT based services to meet up
the growing customer demand like internet banking, mobile
banking, SMS Banking, agent banking etc. A Card
Management and Payment System project has already been
initiated in a fully automated system for seamless real time
financial transaction through card and merchant POS across
the country and over the globe. The Smart Vista has a real-time
integration with VISA, MasterCard and NPSB (National
Payment Switch Bangladesh) so that our card holders may have
freedom to use their own card anytime and anywhere over the
world for any sort of financial services. A Chips based Card
Production Machine along with personalization system has
already been deployed for EMV card production.
Alternative Delivery Channel: Services everywhere
In line with the nation’s dream of Digital Bangladesh, IBBL has
developed and upgraded its product and services to match the
requirement of a true digital bank. Since June 2020, IBBL newly
installed 1082 ATM & CRM totaling our ATM/CRM 1752 in
live operation while another 318 are in the process of going live.
We targeted 5000 ATM/CRM in live operation. The worldwide
pandemic COVID 19 has slowed down the pace in installing
our targeted ATM/CRM. Very recently IBBL has inaugurated
the latest mobile banking Apps CellFin, an Omni-channel
platform of IBBL for all types of digital services and
transactions.
Dedication to Build a Better Bangladesh
The country aspires to become a developing nation by 2021,
achieve the Sustainable Development Goals (SDGs) by 2030
and be a developed one by 2041. The aspiration demands
priorities on creation of employment, entrepreneur
development, mitigating regional disparity, women
empowerment through entrepreneurship development, and
most importantly, ensuring balanced and equitable social
justice and development. Keeping the country’s socio-economic
development in view, IBBL invested Tk246,842 million being
the highest financer in SME sector in Bangladesh in 2020.
Digitalization will be the catalyst for our desired growth and
development. Thereby we have planned for some steps forwards
in line with the dream of a digital Bangladesh where everyone
will be able to get most of the banking services through digital
channels.
Green Banking: Saving Planet, Saving People
To ensure protection against environmental degradation,
Islamic banks have extended their co-operation with the green
banking initiatives. IBBL prefers financing in environmental
infrastructure such as renewable energy project, clean water
supply project, waste water treatment plant, solid and
hazardous waste disposal plant, bio gas and bio-fertilizer plant
to contribute to Green Banking. IBBL works for serving our
society and the country from many probable disasters keeping
the environment congenial for our next generation. IBBL
attempts to reduce any type of environmental degradation and
hazards through its operational activities and protect the nature.
Moreover, the Bank’s core principle is the protection of
resources for the future generation. We have disbursed Tk.
20,463 million in green finance (investment) in 2020.
Corporate Social Responsibility: Serve the deprived people
Since inception, IBBL has been contributing to serve the
distressed people, improvement of education, extending health
and Medicare facilities, promoting art, culture, literature,
science, technology and sports, creating facilities for productive
self employment through human resources development, help
to humanitarian and disaster management, relief and
rehabilitation, environment and climate risk fund. In 2019 IBBL
spent Tk. 1,031.15 million among 430,358 beneficiaries and in
2020 Tk. 855.24 million for 413,665 beneficiaries under
different sectors. The total accumulated CSR expenditure made
by the bank stood at Tk. 10,755.11 million from 1983 to 2020
among 17.19 million of beneficiaries in different sectors.
Looking forward
In the digital world, Fintech is playing a pivotal role in Banking
services and thus is growing faster. After the outbreak of
COVID-19, the process has got special acceleration. Digital
financial services have made today’s banking cheaper, faster and
efficient helping in reduction of cost of services, access to higher
number of people, increasing resilience, reducing the need for
face to face interactions and keeping services open around the
clock. Keeping the scenario in view, our slogan for the year 2021
is determined as “Going Everywhere, Exploring Fintech”.
Awards and Accolades: Inspiration to contribute more
IBBL has positioned as the only bank of Bangladesh within
World’s top 1000 banks as declared by UK based financial
intelligence magazine “The Banker”. In the ranking, IBBL
position was 960th in 2018, 943rd in 2019 and 904th in 2020.
Besides, IBBL has received a number of awards and
appreciations from a number of reputed organizations in
recognition to its success in governance, efforts on compliance,
service exposure and overall contribution. Some of them are
follows:
“World’s Best Islamic Bank CIBAFI award 2019- CIBAFI,
Bank of the year” declared by Council for Islamic Banks and
Financial Institutions (CIBAFI).
ANNUAL
REPORT 33
2020
 Managing Director’s Message

“National Gold Award-2019” conferred by Institute of
Chartered Secretaries of Bangladesh (ICSB) for corporate
governance excellence in Islamic Banking Companies
category.
“20th ICAB National Award” for best presented annual
reports 2019’ under the category of Corporate Governance
for the 9th time in a row since 2010 for excellent
performance in Shariah based banking services.
ICMAB Best Corporate Award 2019 in the category of
Private Commercial Bank (Islamic Operation) for the 10th
time in a row since 2010 for excellent performance in
Shariah based banking services.
Islamic Retail Banking Leadership Award 2019 by
Cambridge IFA, UK.
Exchange and Chittagong Stock Exchange and other regulators
for their continuous support and cooperation. We also express
our sincere gratefulness to our August Board, Executive
Committee, Audit Committee, Risk Management Committee,
Shariah Supervisory Committee for their valuable guidance,
entire co-operation and timely suggestions. We are also grateful
to our respected shareholders, valued customers and all other
stakeholders for their continuous trust and confidence on the
Bank. Finally, I thank my colleagues for their persistent effort
and commitment. We do hope to take our beloved institution to
other new heights of success and glory healing the great shock
of pandemic gradually, strengthening our efforts for the best,
exploring the new avenues of fintech services, utilizing the key
drivers of growth and potentialities in the post COVID new
normal scenario. May Allah (SWT) be always with us with His
favor and blessings in the coming days.

Strongest Islamic Retail Bank in Asia 2019 by Cambridge Ameen.

IFA, UK.

Strongest Islamic Retail Bank in Bangladesh 2019 by

Cambridge IFA, UK.

IRBA Most Innovative Islamic Retail Bank in Bangladesh

2019 by Cambridge IFA, UK.
(Mohammed Monirul Moula)
Managing Director & CEO
IBBL declared as Triple A rated private bank with the
highest rating of AAA since 2018 to 2020.

Gold Remittance Award 2019 for highest remittance

collection by Center for NRB etc.

Highest Taxpayer Award in the Banking sector in the

2018-2019 tax year by National Board of Revenue.

Bangladesh Bank Remittance Award 2018 and 2019 for

mobilizing highest remittance.

Best Islamic Bank in Bangladesh 2018 conferred by Islamic

Finance News Malaysia.

The Strongest Bank in Bangladesh 2018 Award by the Asian

Banker.

‘Excellence in Product Innovation’ and ‘Excellence in

Prepaid Card business’ awards for 2019-2020 conferred by
World’s largest electronic fund transfer network VISA.

Concluding Words
With the rich legacy, IBBL has been the role model of welfare
oriented banking and made so many success stories in the last
decades. We convey our sincere gratitude to the Ministry of
Finance, National Board of Revenue, Bangladesh Bank,
Bangladesh Securities and Exchange Commission, Dhaka Stock

ANNUAL
34 REPORT
2020
CORPORATE
MILESTONE
 Corporate Milestone

Incorporation 1983 In-house Core Banking Software 2005

(13 March 1983) (02 April 2005)

Certificate of 1st Position of IBBL in

Commencement of Business 1983 Inward Remittance since 2007
(27 March 1983) (1 January 2007)

Inauguration of 1st Branch 1983 Opening of 200th Branch 2009

(30 March 1983) (21 June 2009)

Formation of Shariah Council 1983 Islami Bank Securities Limited (IBSL) 2010
(01 May 1983) (22 March 2010)

Formation of Sadakah Tahbil Islami Bank Capital

as a CSR Wing 1983 Management Limited (IBCML) 2010
(04 July 1983) (01 April 2010)

Formal Inauguration 1983 Launching of Offshore Banking Unit 2011

(12 August 1983) (04 January 2011)

Listing at Dhaka
1985 100% Online Banking 2011
Stock Exchange Limited
(07 January 2011)
(02 July 1985)

Listing at Chattogram
1996 Launching of iBanking 2011
Stock Exchange Limited
(16 December 2011)
(07 March 1996)

Opening of 100th Branch 1997 Introduction of IDM 2012

(12 June 1997) (11 October 2012)

Joining/Agreement with CDBL Inauguration of mCash service

2004 2012
(29 December 2004) (27 December 2012)

ANNUAL
36 REPORT
2020
Corporate Milestone

Launching of Call Center 2012 Opening of 500th Agent Banking outlet 2019
(27 December 2012) (08 July 2019)

Entered into the World’s Top 1,000

2012 Launching of CRM 2019
Banks list since
(08 September 2019)
(31 December 2012)

Witnessed Tk.500,000 million

2014 Opening First Sub-branch 2019
deposit base
(15 September 2019)
(14 April 2014)

Launching of Shari’ah based Credit

2014 Opening of 350th Branch 2019
Card–Islami Bank Khidmah Card
(11 November 2019)
(27 May 2014)

Opening of 1000th Agent

Launching of Sheba Ghar 2015 2019
Banking outlet
(18 March 2015)
(31 December 2019)

Opening of 300th Branch 2015 TK. 1 Trillion Deposit 2020

(09 September 2015) (30 June 2020)

Launching ‘IBBL iSmart’ (mobile apps) Opening of 100th Sub-branch

2016 2020
(30 March 2016) (27 September 2020)

Opening of 1500th Agent

Opening of 500th Own ATM Booth 2016 Banking outlet 2020
(18 October 2016) (27 September 2020)

Launching Agent Banking Services 2017 Launching of Cellfin App 2020

(15 July 2017) (30 November 2020)

Opening of 2000th Agent

Opening of 100th Agent Banking outlet 2018 2020
Banking outlet
(10 May 2018)
(13 December 2020)

ANNUAL
REPORT 37
2020
 Sponsors & Placement Holders

Sponsors
Mohammad Abdur Razzaque Laskar (Late)

Mofizur Rahman (Late)

Barrister Tamizul Haque (Late)

Mohammad Younus (Late)

Mohammad Shafiuddin Dewan (Late)

Mohammad Bashiruddin (Late)

Mohammad Hussain (Late)

Nashiruddin Ahmed (Late)

Muhammad Mosharraf Hossain (Late)

Mohammad Malek Minar (Late)

Zakiuddin Ahmed

M. A. Rashid Chowdhury

Engr. Mustafa Anwar

Prof. Mohammad Abdullah

Serajuddowla (Late)

Ibn Sina Trust

Bangladesh Islamic Centre

Islamic Economics Research Bureau

Mohammad Nuruzzaman (Late)

ANNUAL
38 REPORT
2020
Sponsors & Placement Holders

Placement Holders
LOCAL
Abul Quasem (Late)

A. K. Fazlul Haque (Late)

Engr. Muhammad Dawood Khan

Baitush Sharaf Foundation Ltd.

FOREIGN

Islamic Development Bank, Jeddah, K.S.A.

Kuwait Finance House (K.S.C.), Safat, Kuwait

Jordan Islamic Bank, Amman, Jordan

Islamic Investment & Exchange Corporation, Doha, Qatar

Bahrain Islamic Bank, Manama, Bahrain

Islamic Banking System International Holding, S.A., Luxembourg

Al-Rajhi Company for Currency Exchange & Commerce, Riyadh, K.S.A.

(Presently Al-Rajhi Company for Industry & Trade)

Sheikh Ahmed Salah Jamjoom (Late), Jeddah, K.S.A.

Sheikh Fouad Abdul Hameed Al-Khateeb (Late), Jeddah, K.S.A.

Dubai Islamic Bank, Deira, Dubai, U.A.E

The Public Institution for Social Security, Safat, Kuwait

Ministry of Awqaf and Islamic Affairs, Kuwait

(Presently, Kuwait Awqaf Public Foundation)

Ministry of Justice, Department of Minors Affairs, Kuwait

(Presently, The Public Authority for Minors Affairs)

ANNUAL
REPORT 39
2020
CORPORATE STRUCTURE
Corporate structure
Name of the Company : ISLAMI BANK BANGLADESH LIMITED
Legal Status : Public Limited Company
Company Registration No. : C-10589, Dated March 13, 1983
485
Bangladesh Bank License No. : BL/DA/4290/83
eTIN : 376764873732
VAT Registration No./BIN No. : 000000124-0002
Line of Business : Banking
Total Branch : 373
Sub Branch : 162
SME/Agriculture Branch : 30
Zone : 16
AD Branch : 61
Offshore banking Unit : 03
ATM Booth (own) & CRM : 1752
ATM Booth (shared) : 12,000+
Instant Deposit Machine (IDM) : 126
Sheba Ghar : 47
Agent Banking Outlet : 2273
Employees : 18,621
Directors : 20
Sponsors : 19
Placement holders : 17
Shareholders : 33,869
MPB holders : 13,974
Local Shareholders : 57.38%
Foreign Shareholders : 42.62%
Foreign Correspondents : 610
Chairman : Mohammad Nazmul Hassan
Vice Chairmen : Yousif Abdullah A AlRajhi
Mohammed Shahabuddin
Managing Director : Mohammed Monirul Moula
Company Secretary : JQM Habibullah, FCS
Head of Internal Control & Compliance : AAM Habibur Rahman
Chief Financial Officer : Md. Ashraful Haque, FCA
Credit Rating Agency : Alpha Credit Rating Ltd.
Subsidiary Companies : 1. Islami Bank Securities Limited
2. Islami Bank Capital Management Limited
3. IBBL Exchange Singapore Pte. Ltd.
Statutory Auditors : 1. M/s. Hoda Vasi Chowdhury & Co.
Chartered Accountants
2. M/s. A.Qasem & Co.
Chartered Accountants
Tax Advisor : M/s. K.M. Hasan & Co.
Chartered Accountants
Registered Office : 40, Dilkusha C/A, Dhaka-1000, Bangladesh
Phone : PABX (88-02) 9563040, 9567161, 9567162
Mobile : 88-01711435638-9
FAX : 88-029564532, 9568634
SWIFT : IBBLBDDH
E-mail : info@islamibankbd.com
Website : www.islamibankbd.com

ANNUAL
REPORT 41
2020
 ORGANOGRAM

Shariah Supervisory Committee BOARD OF DIRECTORS

Chairman

Islami Bank Foundation (IBF)

Shariah Secretariat MANAGING DIRECTOR & CEO

MD’s Secretariat

Islami Bank Training & Human Resources Wing Internal Control &
Zones CAMLCO Research Academy Compliance Wing
(IBTRA) (SEVP/EVP/SVP)
(SEVP/EVP) (SEVP/EVP/SVP)

1. HR Administration Div. 1.Audit & Inspection Div.

2. HR Policy & Discipline Div. 2.Compliance Div.
3. HR Welfare & Service 3.Monitoring Div.
Delivery Div.

Additional
Managing Director

Deputy Managing Deputy Managing

Director Director

Corporate Investment 1. Corporate Investment Div.-I International Trade 1. Foreign Trade Operations Div.
Wing-1 2. Sustainable Finance Div Wing-1 2. Foreign Trade Processing Div.
(SEVP/EVP/SVP) 3. Syndicate Finance Deptt. (SEVP/EVP/SVP) 3. Off-shore Banking Division

Corporate Investment International Services 1. Overseas Banking Div.

1. Corporate Investment Div.-II
Wing-II 2. Investment Administration Div. Wing 2. Foreign Remittance Services Div.
(SEVP/EVP/SVP) (SEVP/EVP/SVP) 3. Financial Institutions Div.

1. Legal Affairs Div.

Retail Investment 1. SME Investment Div.-I Investment
2. Investment Monitoring Div.
Wing-I 2. SME Investment Div.-II Management Wing
(SEVP/EVP/SVP) (Proposed) 3. Investment Control Div.
4. Investment Recovery Div.

Retail Investment 1. Retail, Consumer & Real

Wing-II Estate Investment Div. Treasury & Fund
(SEVP/EVP/SVP) 2. Rural Development Div. Management Div.
3. Agriculture Inv. Div.

ANNUAL
42 REPORT
2020
 Audit Commitee Executive Commitee Risk Management
Commitee

Management Committee Asset Liability Committee Committee for Recruitment

(MANCOM) (ALCO) & Promotion (CRP)

Deputy Managing
Director
1. Board Secretariat Div.
1. Islami Bank Securities Ltd. Board & Company Affairs Wing 2. Share & Bond Div.
2. Islami Bank Capital Mgt. Ltd. (SEVP/EVP/SVP) 3. Corporate Governance Div.
4. Protocol Services Deptt.
5. Security Custodian Services Deptt.

1. SRP-Coordination (Desk)
Risk Management Wing
Corporate Branches (SEVP/EVP/SVP) 2. Asset Liability Risk Management (Desk)
3. Anti Money Laundering Risk
Management (Desk)
4. Credit Risk Management (Desk)
5. FEX Risk Management (Desk)
6. Internal Control & Operational Risk
Management (Desk)
7. ICT Risk Management (Desk)
8. Stress Testing (Desk)
9. Assessment of Capital under Basel (Desk)
Additional
Managing Director

Deputy Managing Deputy Managing

Director Director

1. Branches Control Div.

2. Common Services Div. Information & 1. Software Div.
Operations Wing 3. Engineering Div. Communication 2. Infrastructure Management Div.
3. Implementation & Operations Mgt. Div.
(SEVP/EVP/SVP) Technology Wing 4. Management Information System (MIS) Div.
4. Payment & Settlement Div.
(SEVP/EVP/SVP) 5. Information Security & Risk Mgt. Div.
6. Safety & Security Deptt.
7. Procurement of Computer Hardware
& Accessories Deptt. (PCHAD)
1. Financial Inclusion and Channel Mgt. Div.
Alternative Banking 2. Digital Services Division
3. ATM Management Div.
Wing (Proposed) 4. System Management Div.
(SEVP/EVP/SVP) 5. Settlement & Dispute Mgt. Div.
6. Card Division
Development Wing 1. Business Promotion & Marketing Div. 7. Contact Centre Deptt.
(SEVP/EVP/SVP) 2. Public Relations Div.
3. Agent Banking & Sub Branch Div. Money Laundering &
Terrorist Financing
Prevention Division
Financial
Administration
Division

ANNUAL
REPORT 43
2020
BOARD AND ITS COMMITTEES
Board and its Committees

Board of Directors
Chairman Independent Directors
Mohammad Nazmul Hassan Mohammad Solaiman
Vice-Chairmen Md Kamal Uddin
Yousif Abdullah A AlRajhi Dr Mohammad Saleh Jahur
Mohammed Shahabuddin Md Fashiul Alam

Directors Ex-Officio Director

Md Salim Uddin Mohammed Monirul Moula
Abdul Matin Company Secretary
Areef Suleman
JQM Habibullah, FCS
Mohammad Sirajul Karim Deputy Managing Director & Company Secretary
Mohammad Joynal Abedin
Dr Qazi Shahidul Alam
Musaid Abdullah A AlRajhi
Syed Abu Asad
Tanveer Ahmad
Mohammad Quamrul Hasan
Khurshid Ul Alam
Mohammed Nasir Uddin FCMA
Mohammad Zakir Hossain

ANNUAL
REPORT 45
2020
 Board and its Committees

Executive Committee
Chairman
Md Salim Uddin
Members
Yousif Abdullah A AlRajhi
Tanveer Ahmad
Mohammad Quamrul Hasan
Syed Abu Asad
Dr Mohammad Saleh Jahur
Md Fashiul Alam

ANNUAL
46 REPORT
2020
Board and its Committees

Audit Committee
Chairman
Mohammad Solaiman
Members
Mohammed Shahabuddin
Dr Qazi Shahidul Alam
Khurshid Ul Alam
Mohammed Nasir Uddin FCMA

ANNUAL
REPORT 47
2020
 Board and its Committees

Risk Management Committee

Chairman
Abdul Matin
Members
Areef Suleman
Mohammad Sirajul Karim
Mohammad Joynal Abedin
Mohammad Zakir Hossain

ANNUAL
48 REPORT
2020
Shari’ah Supervisory Committee
Chairman
Professor Dr. Mohammad Gias Uddin Talukder
Professor, Department Of Arabic
University of Chattogram, Bangladesh
Vice Chairmen
Mufti Sayed Ahmad
Head Mufti Al Jamiatus Siddikiah Darul Ulum,
(Madrasah-e Furfura), Darus-salam, Mirpur, Dhaka
Member Secretary
Professor Dr. Mohammad Abdus Samad
Teacher, Religious attache, Embassy of Saudi Arabia in
Dhaka
Member Additional Secretary
Dr. Md. Ruhul Amin Rabbani
Assistant Professor, Deparment of Islamic Studies,
Asian University of Bangladesh
Members
Abdur Raquib
Ex-Executive President
Islami Bank Bangladesh Limited
Dr. Hasan Mohammad Moinuddin
Associate Professor
Department of Islamic Studies
Asian University of Bangladesh, Uttara, Dhaka
Dr. Mohammad Manzur-E-Elahi
Associate Professor, Department of Islamic Studies
National University , Gazipur
Moulana Mohiuddin Rabbani
Muhtamim, Jamia Islamia Markajul Ulum Savar,
Dhaka& Khatib, Railway Jame Masjid, Fullbaria, Dhaka
Professor Md. Mozahidul Islam Chowdhury
Vice Principal, Chattogram College, Chattogram
Dr. Muhammad Saifullah
Associate Professor, Department of Islamic Studies
Asian University of Bangladesh.
Moulana Mohammad Muhibbullahil Baqee
Imam, Baitul Mukarram National Mosque, Dhaka.
Muhtaram Mohammad Harunar Rashid
Lecturer, Department of Arabic
Islamic Arabic University Dhaka.
ANNUAL
REPORT 49
2020
 Management Committee

Chairman Members
Mohammed Monirul Moula Mohammad Qaisar Ali, Additional Managing Director-I
Managing Director & CEO Md. Omar Faruk Khan, Additional Managing Director-II
Member Secretary Abu Reza Md. Yeahia, Deputy Managing Director
Taher Ahmed Chowdhury, Deputy Managing Director
J Q M Habibullah, FCS
Deputy Managing Director A.A.M. Habibur Rahman, Deputy Managing Director
Md. Mosharraf Hossain, Deputy Managing Director
Mohammad Ali, Chief Risk Officer (CRO)
Head of Retail Investment Wing-I
Head of Human Resources Wing
Head of International Services Wing
Head of Investment Management Wing
Head of Corporate Investment Wing-II
Head of Financial Administration Division/ CFO
Head of Corporate Investment Wing-I

ANNUAL
50 REPORT
2020
DIRECTORS’ REPORT

The Board of the Directors of Islami Bank Bangladesh Limited is
delighted to welcome you all to the 38th Annual General Meeting
of the Bank. It is a privilege for us to present the Directors’
Report along with the Audited Financial Statements of the Bank
for the year ended 31st December 2020 and the Auditors’ Report
thereon before you. The Board has reviewed the financial
statements in order to ensure effective financial control,
transparency and accuracy. The Board also likes to take the
opportunity to highlight the operational performance of the
Bank briefly during the year 2020 in the context of the domestic
and international economic and banking scenario.
World Economy
The world economy witnessed negative growth of 4.9 per cent in
2020 compared to a 2.9 per cent declination from the year 2019.
Unemployment rate rose to 5.2 per cent globally. Both emerging
and developing market economies as well as the advanced
economies slowed down in 2020. While weak external demand
dragged down the Euro zone growth, tight monetary conditions
and domestic policy uncertainty in developing countries
contributed to slow growth momentum. Of the economic giant,
China experienced its slowest growth amidst the weakest
domestic demand and trade skirmish with the US. Despite that,
China is the only major economy to grow 2.3 percent during the
pandemic. Global trade also experienced a setback with goods
and services trade growth below 1 percent, with exports and
imports of emerging markets being sharply hit. Meanwhile,
supportive monetary policies diminished trade tensions, and
nascent signs of stabilization of the global economy provided
necessary support to financial markets this year. Stimulus
packages provided by the government to sustain economic
breakdown were noticeable in 2020. US congress confirmed
USD 900 billion aids to bounce back its economy, and Japan
unveils USD 708 billion while the banks of the UK pumped USD
100 billion to fight post-pandemic stresses. However, the
financial volatility has significantly increased since March 2020
after the spread of the Covid-19 pandemic. Decline in asset and
commodity prices and drop in the equity market has reached
unprecedented levels. Oil prices dropped by 20 per cent since
lockdown were executed worldwide. Moreover, uncertainty
around the prospect of production cuts keeps oil prices under
pressure.
Bangladesh Economy
Against this backdrop, the GDP growth of Bangladesh in
FY2019-20 had to moderate to 5.24 percent, with lockdown
related to Covid-19 impairing economic activity. GDP growth in
Bangladesh was 8.20 per cent in 2019-20 as against 5.24 percent
in the previous fiscal. The per capita GDP increased from USD
1,909 to 2,064, respectively, from the corresponding financial
ANNUAL
76 REPORT
2020
Directors’ Report
year. Wage earner remittance grew by 18.60 per cent, reaching a
record of USD 12,945 million in 2020. Foreign exchange reserve
has broken the records of all time and stood 43.17 billion at the
end of December 2020, which was USD 32.69 billion at the end
of December 2019, resulting in staggering growth of 32.05
percent. National export declined 28.61 per cent, whereas
Bangladesh Bank (BB) import data shows a 12 percent sharp fall
from the previous year. General inflation (12 months average)
stood at 5.69 percent in December 2020, which was 5.59 percent
in December 2019. The deposit amount stood at BDT. 1,290,472
crore in December 2020, with a growth of 13.5 percent over last
year. The advance/investment amount stood at BDT. 1,122,843
crore growing at 9.05 percent over 2019.
Global and Domestic Banking Scenario
The banking industry’s collective response to the pandemic thus
far has been notable. It was no easy feat to go fully virtual and
execute an untested operating model in a matter of weeks.
Despite some hiccups, many banking operations were executed
smoothly. Customers were served, employees were productive,
and regulators were reassured. Banks effectively deployed
fintech that demonstrated unprecedented agility and resilience.
More importantly, banks played a crucial part in stabilizing the
economy and transmitting government stimulus and relief
programs in the United States, Canada, the United Kingdom,
Japan, and many European countries, among others. Banks’
healthy capital levels before the pandemic also helped mitigate
the negative impacts from the crisis and should pave the way for
the global economy to thrive in the future.
For the banking industry, the economic consequences of the
pandemic are not on the same scale as those during the Global
Financial Crisis (GFC) of 2008–10, but they are still notable. In
addition to the financial fallout, COVID-19 is reshaping the
global banking industry on a number of dimensions, ushering in
a new competitive landscape, stifling growth in some traditional
product areas, prompting a new wave of innovation, recasting
the role of branches, and of course, accelerating digitization in
almost every sphere of banking and capital markets.
The total bank deposit figure stood at BDT. 1,290,472 crore on
Dec’2020 with 13.5 percent growth over 2019 while advance
figure raised to BDT.1,122,843 with 9.05 percent growth over the
previous year. Earlier, the growth was 10.4 percent over 2018.
Increasing idle money may toll upon the health of Banks.
Banks in Bangladesh were already struggling with a challenging
environment before Pre Covid situation. The pandemic is
worsening the impact of recent policy measures creating an
ill-timed double whammy from lending/deposit rate cap and
legacy high NPLs/NPIs. The banking sector saw a BDT 88,283
Directors’ Report
crore classified loans, which is 8.06 percent of the total
outstanding as on December 31, 2020. Bangladesh Bank
suspended reporting of default loans from January 2020 to help
businesses tide over the corona virus pandemic. The shock range
is defined based on the banking sector’s exposure to the two
sectors RMG & textiles and SMEs that are the biggest victim of
the pandemic. If this happens and persists, it may trigger
bank-runs and systemic banking sector crises. Overall, findings
call for immediate, phase-wise, and innovation-driven policy
measures with a long-term approach to prevent an imminent
banking sector crisis in Bangladesh.
Global and Domestic Islamic Banking Scenario
Being characterized as the finance industry running based on
Shariah principles and its finances backed by tangible assets, the
Islamic Finance Industry is growing moderately after due to
strong investments in the Halal Sectors, infrastructure, and
Sukuk bonds. The total worth of the Islamic Financial Service
Institute (IFSI) has further crossed USD 2 trillion on the back of
significant improvement across three sectors of Islamic banking,
the Islamic capital market, and Takaful. Islamic Finance growth
was resilient, and growth recorded 22 percent during the
pandemic. There is also an improvement in the resilience of the
IFSI based on satisfactory financial stability indicators and
37th Annual General Meeting
compliance with most international regulatory requirements,
especially when compared to conventional banks in most
jurisdictions with a significant presence of Islamic finance as
well as in the United States and the European Union. The Gulf
Cooperation Council (GCC) region remained the engine of
growth for the Islamic banking sector.
The Islamic capital markets are the second most significant
component of the Islamic finance sector, where Sukūk are major
contributors. First time in the history of Bangladesh, the Central
Bank has invited for an investment of BDT.4, 000 crore on ‘Izra
Sukuk’- shariah-based bond, and the response was
overwhelming. The participators placed demands BDT15,153
crore against bond value which indicates its acceptance in
corporate sectors as well as individuals in Bangladesh. Total
deposits in the Islamic banking sector reached BDT 3,269,223
million at the end of December 2020, which increased by BDT
466,944 million (16.66 %) compared to the same period of the
last year. Total Investment of the Islamic banking sector stood at
BDT 2,940,936 million at the end of December 2020, which
went up by BDT 100,831 million with 8.09 percent compared to
the end of the same period of the last year, respectively. At the
end of December 2020, the Investment-Deposit ratio stood at 90
percent, which was 94 percent at the end of December 2019.
Total remittances mobilized by the Islamic banking sector stood
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 Directors’ Report

at BDT 597,481million during 2020, which went up by 34.13
percent compared to the end of the same period of the last year.
The number of branches of the Islamic banking sector, including
Islamic branches/windows of conventional commercial banks,
reached 1,528 at the end of December 2020, which was 1,380 at
the end of December 2019.
Global Economic Outlook
After an estimated 3.5 percent contraction in 2020, the global
economy is projected to grow 5.5 percent in 2021 and 4.2
percent in 2022. The estimate for 2020 is 0.9 percentage points
higher than projected in the October World Economic Outlook
(WEO) forecast. This reflects the stronger than expected
recovery on averages across regions in the second half of the
year. The 2021 growth forecast is revised up 0.3 percentage
point, reflecting additional policy support in a few large
economies and expectations of a vaccine-powered
strengthening of activity later in the year, which outweigh the
drag on near-term momentum due to rising infections.
Recovery paths vary within the group, with the US and Japan
projected to regain end-2019 activity levels in the second half of
2021, while in the euro area and the United Kingdom, activity is
expected to remain below end-2019 levels into 2022.The 2021
forecast for the United States has revised up to two percentage
points relative to the October 2020 WEO projection, reflecting
carryover from the strong momentum in the second half of 2020
and additional support from the December 2020 fiscal package.
Similarly, the 0.8 percentage point upward revision to Japan’s
2021 forecast is large because of the additional boost from the
fiscal measures introduced at the end of 2020.
declined to 7.2 percent from 8.2 percent in 2020.The general
government gross debt remained relatively low in 2019 and 2020
at 35.8 percent and 39.6 per cent of GDP, respectively - as a result
of a tight fiscal policy. Nonetheless, the tax base is narrow owing
to several exemptions, weighing on public revenue. The public
debt ratio to GDP is consequently anticipated to increase to 41.9
percent by 2021 and 42.3 percent by 2022. A new VAT law was
introduced at the start of the fiscal year 2019-20 to increase tax
income; however, its impact has been limited since the launch.
VAT collection grew only by 1.8 percent in July-October 2019,
the slowest growth rate in recent years according to the National
Board of Revenue. Inflation moderated to 5.5 percent in 2019
and 5.73 percent in 2020 and is expected to remain stable in
2021 (5.9%) and in 2022 (5.5%) despite the COVID-19
pandemic. The current account deficit was estimated to have
narrowed to (-) 1.5 per cent of GDP in 2020 and was forecasted
to reach (-) 2.8 per cent in 2021 and (-) 1.4 per cent in 2022.
Looking ahead at the outlook of the global economy, economists
forecasted that this year world is likely to experience a
deep-rooted recession. But the opposite scenario is projected for
Bangladesh’s Economy. As per Bangladesh Bank, the economy is
likely to witness a bounce back in 2021 with targeted GDP
growth of 7.4 percent. Bangladesh is one of the most vulnerable
countries in the world to climate change, with extreme weather
events estimated to have caused a loss of around 1.8 percent of
GDP in the past few decades. The country has taken measures to
promote green financing and is seeking grants from the
international community, notably via the Green Climate Fund.

Emerging markets and developing economies are also projected

to trace diverging recovery paths. Considerable differentiation is
expected between China, where effective containment
measures, a forceful public investment response, and central
bank liquidity support have facilitated a strong recovery, and
other economies. Oil exporters and tourism-based economies
within the group face particularly difficult prospects considering
the expected slow normalization of cross-border travel and the
subdued outlook for oil prices. As noted in the October 2020
WEO, the pandemic is expected to reverse the progress made in
poverty reduction across the past two decades. Close to 90
million people are likely to fall below the extreme poverty
threshold during 2020–21.

Bangladesh Economic Outlook

Earlier the forecast data of World Bank (WB) Bangladesh’s GDP
growth would be 2 percent in FY2019-20; against that prediction,
overall GDP growth was 5.24 percent. Again FY 2021-22 GDP
growths is projected at 3.4 percent, while the target GDP was

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Directors’ Report
Corporate Profile
Islami Bank Bangladesh Limited (IBBL) is the pioneer of Islamic
Banking in Bangladesh. It was incorporated on March 13, 1983
as the First Islamic Bank in the South-east Asia. IBBL is a Joint
Venture Public Limited Company engaged in commercial
banking business based on Islamic Shari'ah with 42.62% of
foreign shareholding including Islamic Development Bank
(IDB) and 57.38% local shareholders. It has a large branch
network among the Private Sector Banks in Bangladesh.
Since inception, Islami Bank Bangladesh Limited has been
rendering its banking services by offering diversified and a wide
range of deposit, investment & foreign exchange products
coupled with technology based banking devices, which has
successfully earned a huge clientele base.
As a true reflection of the inner urge of the people of the country
and to conduct all banking & investment activities based on
Islamic Shari’ah, IBBL unveiled a new horizon and ushered
towards realizing a long cherished dream of the people of
Bangladesh for conducting their banking transactions in
accordance with the spirit of Islam.
IBBL started its commercial operation on 30 March, 1983. The
formal inauguration was made on August 12, 1983 with full
fledged operation of the first branch, Local Office located at 75
Motijheel, Dhaka. IBBL, the highest tax payer & largest private
sector bank in Bangladesh has been enlisted among top
Blanket Donation to the Prime Minister’s Relief Fund
thousand banks of the world since 2012, positioning 9043th
latest by 2020. After passing a long journey of continuous
success and glory in almost all business indicators, the bank is
now running with Authorized Capital of Tk.20,000 million and
Paid up Capital of Tk.16,099.91 million. The Corporate
Headquarter of the Bank is located at 40, Dilkusha Commercial
Area, Dhaka.
Unique Features:
Prohibition of Interest (Riba):
As Riba is prohibited in the Holy Quran, the most unique
feature of IBBL is that its business functions/operations are
completely free from interest.
Welfare-oriented Banking:
IBBL is the precursor of introducing welfare-oriented banking
system by ensuring equity and justice in all of its activities.
Unlike conventional financial institutions, profit or wealth
maximization has never been among the prime objectives of
IBBL. The Bank extends its services to individuals of all walks of
life with strong commitment in advancement and uplifting
economically disadvantaged segments. In other words, IBBL has
showed utmost adherence to public interest leading towards
economic emancipation of the country, which is one of the core
values of our independence.
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Shari’ah Compliance:
Shariah Compliance is not just empty words. All of our banking
activities are Shariah Compliant & IBBL practically ensures
100% Shari’ah in daily banking operations.
Focus on ‘Maqasid-al-Shari’ah:
IBBL not merely ensures shari’ah compliance but also focuses on
Makasid-al-Shari’ah in all of its operational portfolios.
Versatile Bank:
IBBL is not purely a commercial bank but a universal or
multi-purpose Bank. It is a sort of crossbreed of Commercial
and Investment Banks, investment trusts and investment
management institutions which usually offers a variety of
services to the customers. Its equity oriented investments don’t
allow borrowing short term fund and lending to long term
investments which make it less crisis-prone compared to
conventional banks in Bangladesh.
Careful Evaluation of Investment Demand:
IBBL is found to be deliberately careful in evaluating
applications for equity financing. Generally, the conventional
banks make lending after taking collaterals to avoid risk as much
as possible and don’t bother to go beyond ensuring the security
of their principal and interest receipt. Unlike commercial banks,
IBBL being able to maintain a built-in mechanism of risk
sharing as such it cautiously evaluates each and every
investment.
Mass Banking:
In order to make banking facilities available for maximum
number of people, IBBL appears to have been providing mass
banking instead of class banking. Around 1/7th of our total
manpower is engaged to serve about 3.72% of the total
investment under Rural Development Scheme (RDS).
Need-based Banking:
In line with following prioritization of need in financing, IBBL
seldom works to fulfil the need of few people rather focuses on
the requirement of the real needs of the common people. Thus,
IBBL strives to substitute the ‘Greed-based Banking’ through
establishing ‘Need-based Banking’.
Special Investment Scheme:
To elevate the socio-economic status of general people, IBBL has
launched several special investment schemes. The supervision
cost of these investments is high which makes our income less
compared with other market participants.
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Socially and Environmentally Desirable
Investments:
IBBL, by virtue of its adherence to Shari’ah and its commitment
to ensure welfare, does not invest in socially and
environmentally undesirable projects even though the projects
seem to be financially viable and profitable.
Widening Network to Address Unbanked
Population:
IBBL is continuously pursuing for widening its network by
maximizing the opening of new branches to reach the unbanked
and underserved segment of population of the country.
Financial Inclusion and Sustainable
Development:
Since its journey, IBBL has been working tirelessly for overall
development by way of ensuring financial inclusion, sustainable
& inclusive growth as well as socio-economic development of
the country through introduction of modern & welfare oriented
banking products & services including financial literacy
programs.
Network:
As a Bank of the mass people, IBBL delivers its banking services
to the highest possible number of customers. IBBL is enriched
with a vast banking network across the country by setting up its
branches all over the country. Moreover, Alternative Delivery
Channels (ADC) of the Bank having 1752 owned & more than
12,000+ shared ATM booths, 126 IDM, 47 Sheba Ghars & 2273
Agent Banking Outlets have expanded this network up to the
doorstep of the customers.
As a part of gradual expansion of its coverage to the important
commercial places both in urban & rural areas, during 2020 the
Bank has successfully opened 707 agent banking outlets & 16
new branches raising the total number of branches to 373 from
357 of the previous year.
Aiming to achieving a balanced development of the country as
well as uplifting socio economic conditions at rural areas, IBBL
conducts banking operation with highest number of rural
branches (126 branches) among the first generation private
commercial banks. Moreover, all of our branches are connected
through a nationwide intranet network to facilitate Online
Banking Services.
Directors’ Report
Subsidiary Companies
Islami Bank Securities Limited (IBSL)
Islami Bank Securities Limited (IBSL) - a subsidiary company of
Islami Bank Bangladesh Limited - was incorporated March 22,
2010 as a Public Limited Company under Companies’ Act, 1994.
Authorized capital and Paid-up capital of the company is Tk.5,
000.00 million and Tk.2, 700.00 million respectively. IBSL is one of
the largest and leading corporate entities operating in Bangladesh
capital market with a view to carry out business of Stock Broker
and Stock Dealer based on Shariah principle. IBSL is involved in
investment activities in capital market, besides providing trading
facilities to customers. Moreover, the company provides
investment facility to its Customers under Musharaka mode as per
Margin Rules 1999, Bangladesh Securities & Exchange
Commission (BSEC) and in compliance with Shariah Principle.
IBSL provides the following services:
Trading facilities through Dhaka Stock Exchange and
Chattogram Stock Exchange;
Open BO Account at nominal fee from anywhere home
and abroad;
Competitive commission to buy and sale shares;
i-Trading facilities from anywhere at home and abroad;
Easy IPO participation from home;
Fund transfer through BEFTN/i-banking;
Customer service through email/SMS/Phone/Fax, etc;
Demat and Remat facilities of shares;
Full service DP facilities;
Share transfer facility through link account;
Special service for Non-Resident Bangladeshis (NRBs)
Skill and trained manpower for share trading and
customer service.
Islami Bank Capital Management Limited
(IBCML)
Islami Bank Capital Management Limited (IBCML) was
incorporated on the 01 April 2010 under the Companies Act
1994 as a Public Limited Company with Authorized Capital of
Tk. 1,000.00 million &Paid-Up Capital of Tk. 300.00 million
divided by 3,00,000 (three lac) ordinary shares of Tk. 1,000/-
each. The Company has obtained Merchant Banker Registration
Certificate No. MB-95/2019 dated March 31, 2019 from
Bangladesh Securities and Exchange Commission and started its
merchant banking business from 30th September 2019 and
obtained Depository Participant (DP) License on 3rd July, 2020.
The main objectives of the company are achieving long term
capital appreciation by means of judicious investing in the
capital market, delivering superior quality of services to all the
investors, tailoring the need-bases services for the client through
conducting an in-depth study, generating superior returns for
the clients by designing and delivering innovative investment
products, acquiring the quality to outperform in delivering the
results beyond the expectation and providing solutions to
business problems through exploring innovative ideas and
opportunities. Core Activities of IBCML includes Issue
Management Services, Underwriting, Portfolio Management
Services, and Corporate Advisory Services.
IBBL Exchange Singapore Pte. Ltd
IBBL Exchange Singapore Pte. Ltd. has been corporated in
Singapore, as a subsidiary of Islami Bank Bangladesh Limited for
remittance services and things incidental thereto under the
Companies Act, CAP.50 of the Republic of Singapore. Till 31
December 2019, no share capital of the subsidiary has been paid
by its parent company i.e. Islami Bank Bangladesh Limited.
Therefore, the financial statement of IBBL Exchange Singapore
Pte. Ltd. has not been consolidated with that of the parent i.e.
IBBL.
Offshore Banking Units
The operations of Off-shore Banking Units (OBU) of the Bank
were commenced on January 4, 2011 as per the approval of
Bangladesh Bank. The Off-Shore Banking Units (OBU) of the
Bank are located at
Head Office Complex Branch, Dhaka
Uttara Branch, Dhaka and
Agrabad Branch, Chattogram.
National Membership
a. Bangladesh Institute of Bank Management (BIBM)
b. The Institute of Bankers Bangladesh (IBB)
c. Bangladesh Association of Banks(BAB)
d. Bangladesh Foreign Exchange Dealers’ Association
(BAFEDA)
e. Bangladesh Association of Public Listed Companies
(BAPLC)
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IBBL received Gold Award of ICMAB Best Corporate Award, 2019
f. Central Shari’ah Board for Islamic Banks in Bangladesh
(CSBIBB)
g. Islamic Banks Consultative Forum (IBCF)
h. Dhaka Chamber of Commerce & Industry (DCCI)
i. Dhaka Stock Exchange Limited (DSE)
j. Federation of Bangladesh Chambers of Commerce and
Industry (FBCCI)
k. Bangladesh Chamber of Industries (BCI)
International Membership
a. Accounting and Auditing Organizations for Islamic Financial
Institutions (AAOIFI), Manama, Bahrain and has become
member of its Board of Trustees.
b. Islamic Financial Services Board (IFSB), Kuala Lumpur,
Malaysia.
c. General Council for Islamic Banks and Financial Institutions
(CIBAFI), Manama, Bahrain
d. International Islamic Financial Market (IIFM) Manama,
Bahrain
e. International Islamic Centre for Reconciliation and
Arbitration (IICRA)
f. International Chamber of Commerce Bangladesh Limited
(ICC-Bangladesh)
g. American Chamber of Commerce in Bangladesh (AmCham)
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IBBL’S Equity Investment
a. Central Depository Bangladesh Limited (CDBL)
b. Karmasangsthan Bank (Employment Bank)
c. Bangladesh Shipping Corporation (BSC)
d. Bangladesh Aroma Tea Ltd.
e. Financial Institutions and Investors Portfolio Management
Company Ltd.
f. Mudaraba Subordinated Debts of Private Islami Banks
g. Sponsorship in Mutual Funds.
Financial Review
Competitive Positioning and Strategic Response
Operating in the financial services industry, IBBL is exposed to
several risks both internally as well as externally, some of which
are beyond its control. However, in line with more than three
decades of rich experience, we have witnessed several industry
cycles and hence have developed and fine-tuned risk
identification and mitigation framework that protects us from
adverse risks, enhances operating viability and ensures the
sustainability of our business.
We have provided a detailed analysis of the competitive intensity
that we face. While operating in Bangladesh’s dynamic financial
services industry, we are responsive to minimize the impact of
these risks on our business model to the extent possible.
Directors’ Report
Competitive Contention
Number of competitors: The Bangladeshi banking industry
is marked by high levels of competition with as many as 60
schedule banks working in the industry. However, due to our
strategic positioning of differentiation in the industry we
have already created a strong market position, which has
made us immune from adverse market competition.
Switching cost: The switching cost is very low due to a high
concentration of service providers. The risk is mitigated by
strong bondage with clients as well as providing wide variety
of products and services.
Quality differentiation: IBBL belongs to among the top
quality of service providers as such there are few banks
comparable in terms of service quality;
Customer loyalty: Historically, customers of IBBL are
reasonably loyal. However, strong bondage with the clientele
base has been established through frequent client
get-together and addressing the client’s specific need to
minimize such risk.
Technological Adoption: IBBL develops different new
financial technologies based services like Cellfin, Fintech etc.
to ensure smooth and reliable services to customers.
Threat of new entrants
A number of new banks have already entered in the financial
services industry over the last couple of years. The possibility of
new entrants, intensifying competition further, cannot be ruled
out although the new entrants will less likely to affect the
operation of the Banks in view of the strong market image and
branding.
Sensitivity of clients
Customers typically enjoys a high power in the equation since
big corporate tend to be extremely rate sensitive. The issue is
being addressed by customized handling as well as relationship
with the clients. The bank is also focusing on SMEs clients to
gradually reduce dependency on large investment clients.
Threat of substitute products
Low threat is prevailing within the banking industry in terms of
substitute products. However in some segments, there exists a
high threat of substitute products. The issue is handled by
continuous research and development on new and innovative
product line.
Business Model
IBBL is a matured bank with more than three decades of
operation. The bank’s business model has been structured
around meeting customer needs both on the investment and
deposit front and meeting their growth expectations on the basis
of trust and respect.
The Bank has consistently created value for its stakeholders.
Leading the critical anchors of fostering the sense of governance
and transparency, IBBL presents integrated reporting of its
business model that include inputs, business activities, outputs
and outcomes. A brief description of each of these is delineated
below.
Inputs
IBBL enjoys 38 years of experience in the banking business.
During this long journey, the bank has witnessed several
market cycles and created a business model that is not only
resilient but also risk absorbent.
The Bank’s dedicated human resources base is reflected in the
very low turnover rate of its employees.
Resources
One of the bank’s significant competitive advantages
comprises of its robust and dedicated human resource pool.
Constant productivity enhancement programs have resulted
in a better output from employees. Continuous training both
at home and abroad has excelled the professional excellence
of the human resources base of the Bank.
The Bank possesses an experienced management team that is
continually appraising and analyzing key trends of business.
Financial Capital
The Bank enjoys a healthy CRR and SLR that are much above
the limits stipulated by the Bangladesh Bank.
It has strong eligible capital to address the risk of the Bank.
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Information Technology
IBBL possesses a robust in-house IT backbone that enhances
business sustainability in terms of facilitating quick decision
making.
A strong IT infrastructure also results in enhancing
transparency, helps detect bad accounts early and also
enables environmental preservation through the optimized
use of paper etc.
Product and Business Exposure
The Bank offers a wide range of investment products across
corporate and SME clients and for retail customers that
enable it to meet the tailor-made requirements of the clients.
On the deposit side, IBBL offers a wide range of long and
medium term savings products that enables it to meet the
financial security and liquidity goals of consumers.
IBBL also operates two wholly-owned subsidiaries (Islami
Bank Capital Management Ltd. and Islami Bank Securities
Ltd.) that offer a vast range of capital market products and
solutions.
Business Activities
IBBL Group provides financial solutions as a Bank and
capital market solutions through its subsidiaries. IBBL as a
Bank offers investments across its well-structured and
functional divisions:
Corporate Investment Division-I: This segment offers
investment to a large number of corporate customers across
Bangladesh in a variety of industries and sectors. The typical
investment size categorized under this division is above Taka
1,000 million.
Corporate Investment Division-II: It deals with investment
ranging from Tk. 150 million to Tk. 1,000 million.
SME Investment Division-I: IBBL is the country’s largest
SME investment Bank. SME-I deals with investment size of
Tk. 50 million to Tk. 150 million.
SME Investment Division-II: It deals with investment below
Tk. 50 million.
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Retail Consumer & Real Estate Investment Division: The
Bank offers retail and consumer financing under this
segment, thereby meeting the lifestyle requirements of its
customers.
Capital Markets: Islami Bank Securities Limited (IBSL) is a
fully-owned subsidiary engaged in providing brokerage,
merchant banking and a wide range of capital market
services.
Innovation
Towards providing the financial solutions, IBBL nurtures its
spirit of innovation through its three integral pillars- People,
Product and Processes. IBBL’s unique process of recruitment
helps to ensure diverse blending of human resource base to
serve diverse group of stakeholders. Requirement of clients help
to develop required product based on which process is
developed.
Outputs
The Bank possesses a considerable product line described later
in the report.
Outcomes
Some of the company’s key financial and non-financial
outcomes include the following:
Total assets have grown by 24.12% in 2020 from 2019.
Deposit has grown by 24.65% in 2020 from 2019.
General Investment increased by 15.16% in 2020 from that of
previous year.
Classified investment to general investment reduced to
3.41% in 2020 from 3.82% in 2019.
External Factors
Though we have created an operating model based on our
previous experience, some of the key external factors that
influence our business include the following:
Prevailing interest/profit rate regime, especially governed by
policy rates as stipulated by the Bangladesh Bank from time
to time.
Political upheavals that impact economic and consumption
demand.
Directors’ Report

IBBL received ICAB National Award for Best Presented Annual Reports, 2019

Slowdown in the economy due to COVID -19 post impact,

measured by the Gross Domestic Product (GDP), that might
lead to push back in the Deposit and the investment plans of
corporate and other businesses.
A general decline in the risk-taking appetite of the country,
impacting its entrepreneurial capabilities.
In summation, at IBBL, our business model
is anchored on the following areas:
Welfare orientation
Business Review
IBBL mobilized Tk. 1179,476 million Deposits from
13,843,053 Depositors and deployed Tk. 1,035,288 million
as General Investment into 835,426 accounts up to 31st
December 2020. In the year 2020, total income of the Bank
was Tk.84,493.38 million and total Expenditure was
Tk.73,804.30 million resulting in pre-tax profit of
Tk.10,689.09 million. The Board of Directors of the Bank
has recommended 10% cash Dividend to the shareholders
for the year 2020.

Diversification focused Confidence of Crore Depositors

Financial inclusion driven both in deposit and investment
Total number of Depositors of IBBL stood at 13,843,053 as
Risk mitigation on 31.12 2020. Account opening performance of IBBL in last
05 (five) years is as under
Customer focused

Balanced and consolidated growth

Technologically proactive

Financially well-capitalized

Highly compliant

Environmental friendly

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 Directors’ Report

Account opening trend from 2016 to 2020

2500

2000

1500

1000

500

0
1 2 3 4 5
Year 2016 2017 2018 2019 2020
Growth (%) 3.39% 5.35% 5.20% 12.63% 8.05%
Account increased 336,525 548,933 562,607 1,436,848 1,031,786
No. of Depositors 10,262,879 10,811,812 11,374,419 12,811,267 13,843,053

Fresh Deposit: Tk 233,259 million Fresh Investment: Tk. 136,274million

Growth: 24.65% Growth: 15.16%

Deposit Products Mobilization of Deposits

Any financial institution especially a Bank can hardly prosper Total deposits of the Bank in 2020 rose to Tk. 1,179,476
and compete with other banks effectively without million from Tk. 946,217 million in 2020 showing an overall
multidimensional and diversified products. Keeping this in increase of 24.65% and the management have achieved 115%
view, IBBL has introduced 28 Deposit products so far. of Board target. Deposit Achievement is shown in the Graph.

Deposit: Target, Achievement & % of Achievement

In million TK.

(2016-2020)
1400000 120%
1200000 115%
1000000
110%
800000
105%
600000
100%
400000
200000 95%
0 90%
2016 2017 2018 2019 2020
Acheivement 681,352 755,039 822,917 946,217 1,179,476
Target 690,000 760,000 820,000 930,000 1,030,000
% Achievement 98.75% 99.35% 100.36% 102.00% 115.00%

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Deposit Mix, Growth, Final Rate & Weightage

Sl. Types of Deposits Weightage Final Rate (%) Deposit (million Taka) Growth Deposit Mix (%)
No. 2020 2019 2020 2019 % 2020 2019
1 2 3 4 5 6 7 8 9 10
A Mudaraba Deposits
1 Mudaraba Savings Account 0.62 3.41 3.16 387,306 309,222 25.25% 32.84% 32.66%
(MSA)
2 Mudaraba Term Deposits 431,775 335,626 28.65% 36.61% 35.85%
(MTDR)
2.1 36 Months 1.10 6.05 7.37
2.2 24 Months 1.07 5.89 7.17
2.3 12 Months 1.05 5.78 7.04
2.4 300 days 5.75
2.5 200 days 5.72
2.6 06 Months 1.03 5.67 6.90
2.7 100 days 5.56
2.8 03 Months 1.00 5.50 6.70
2.9 01 Month 0.82 4.51 5.50
3 Mudaraba Special Savings 141,288 130,088 8.61% 11.98% 13.74%
(Pension) Scheme (MSS)
3.1 10 years Term 1.25 6.88 8.38
3.2 5 years Term 1.10 6.05 7.37
3.3 3 years Term 1.08 5.94 7.24
4 Mudaraba Monthly Profit 38,545 26,033 48.06% 3.27% 2.75%
Deposits Scheme(MMPDS)
4.1 5 years Term 1.18 6.50 7.91
4.2 3 years Term 1.10 6.05 7.37
5 Mudaraba Savings Bond 13,360 13,417 -0.42% 1.13% 1.42%
5.1 8 years Term 1.25 6.88 8.38
5.2 5 years Term 1.10 6.16 7.51
6 Mudaraba Special Notice 0.50 2.75 3.35 15,869 13,243 19.83% 1.35% 1.40%
Deposits (MSND)
7 Mudaraba Hajj Savings (MHS) 4,502 3,919 14.88% 0.38% 0.41%
7.1 Above 10 years Term 1.30 7.16 8.71
7.2 Upto 10 years Term 1.25 6.88 8.38
8 Mudaraba NRB Savings Bond 789 806 -2.11% 0.07% 0.09%
8.1 10 years Term 1.30 7.16 8.71
8.2 5 years Term 1.15 6.33 7.71
9 Mudaraba Farmers Savings 0.75 4.13 5.03 1810 1,422 27.29% 0.15% 0.15%
10 Mudaraba Waqf Cash Deposit 1.35 7.43 9.05 1,437 1,331 7.96% 0.12% 0.14%
11 Mudaraba Muhor Savings 764 687 11.21% 0.06% 0.07%
11.1 10 years Term 1.25 6.88 8.38
11.2 5 years Term 1.10 6.05 7.37
12 Mudaraba Bibaho Savings -
12.1 5 years Term 1.10 6.05
12.2 3 years Term 1.08 5.94
13 Mudaraba Priority Savings 0.95 5.23 -
14 Students Mudaraba Savings 0.62 3.41 4.16 3,366 2,321 45.02% 0.29% 0.25%
15 Mudaraba Upahar Deposit 0.62 3.41 4.16 19 16 18.75% 0.00% 0.002%
Shceme (MUDS)
16 Mudaraba mCash Deposit 0.50 2.75 3.35 - -
Scheme
17 Mudaraba Industrial 0.62 3.41 4.16 268 151 77.48% 0.02% 0.02%
Employees Savings
18 Mudaraba Foreign Currency 0.75 1.92 29,402 17,495 68.06% 2.49% 1.84%
Deposits (MFCDA)
19 Mudaraba Payroll Account 0.90 3.41 4.16 - -
(MPA)
20 Mudaraba Perpetual Bond 1.25 7.88 9.38
(MPB)
21 Mudaraba subordinate Bond 5.67 6.90
B Cost Free Deposits
22 Al Wadeeah Current Account 54,074 42,374 27.61% 4.58% 4.48%
(AWCA)
23 Bills Payable 4,960 6,648 -25.39% 0.42% 0.70%
24 Cost Free Foreign Currency 14,936 7,187 107.82% 1.27% 0.76%
Deposits
25 Other Cost Free Deposits 35,006 34,232 2.26% 2.97% 3.67%
Total 1,179,476 946,217 24.65% 100.00% 100.00%

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period from 1 year to 25 years considering the capacity and ease

Mudaraba Savings
1% 1%
Deposit
3% 4% Mudaraba
9%
Term Deposit
12% 33%
Mudaraba Special
Savings
37%
Cost free Deposit
Mudaraba Monthly
Profit Deposit
Mudaraba Saving
Bond
Mudaraba Special
Notice Deposit
Other Deposits
Welfare Oriented Deposit Products
Islami Bank Bangladesh Limited was established with a vision
that it will try to establish Islamic Banking through the
introduction of a welfare oriented banking system and also
ensure equity and justice in the field of all economic activities,
achieve balanced growth and equitable development through
diversified investment operations particularly in the priority
sectors and less developed areas of the country.
In accordance with the vision, IBBL has introduced some
unique deposit products which are already become popular in
the banking industry. The welfare oriented deposit products of
IBBL are described in the following:
01. Mudaraba Waqf Cash Deposit
Account(MWCDA)
Mudaraba Cash Waqf provides a unique opportunity for
making investment in different religious, educational and social
services. IBBL plays a leading role in introducing this exclusive
product. The objectives of the product are solely welfare of the
society. This account may be opened at a time with a minimum
deposit of Tk. 1,000/- and the subsequent deposit by
instalments in thousand Taka or in multiple of thousand Taka.
Profit of this account is utilized for social and human welfare as
per instruction of the account holders. During 2020, we have
opened 587 MWCD Account and at the end of 2020, total
account stood at 75,360.
02. Mudaraba Hajj Savings Account (MHSA)
IBBL has introduced monthly instalment based Hajj Savings
Account for any Muslim. The account may be opened for a
of the account holder for building up savings by monthly
instalments. During the year 9,840 MHS Accounts have been
opened and at the end of 2020, total account stood at 58511.
03. Mudaraba Special Savings (Pension)
Scheme Account (MSSA)
It is a simple, attractive & unparallel scheme which makes a
source of income in future from monthly small savings. At
person acquires the opportunity to build up savings by small
monthly instalments for getting an attractive amount at the end
of a specified time or a monthly amount for a specific period on
the expiry of 3 years or 5 years or 10 years term. The parents or
legal guardians are allowed to open this account jointly with a
minor. The account can be opened for monthly deposits of Tk.
100/- (for RDS) & its multiple amount up to Tk.1,000/- and
Tk.1,000/- & its multiple amount up-to Tk. 20,000/- only. In
2020, a total number of 436,380 MSS Accounts have been
opened and at the end of 2020 total accounts stood at 1763407.
Maximum 80% of outstanding balance is allowed as quard after
elapsing half of the term.
04. Mudaraba Monthly Profit Deposit
Scheme (MMPDS)
Any individual may open account under this savings scheme by
depositing a minimum amount of Taka 100,000/- and multiple
thereof at a time either for 3 or 5 years. Monthly provisional
profit is given to the account just after completion of one month
from the date of opening of the account. The profit amount is
adjusted on completion of each accounting year after
declaration of final rate of profit. In 2020, a total number of
20,303 MMPDS Accounts has been opened and at the end of
2020, total account stood at 49360. Maximum 90% quard are
allowed against total outstanding balance in this account.
05. Mudaraba Muhor Savings Account
(MMSA)
This Scheme has been designed for the people particularly the
professionals & service holders opening up an opportunity for
them to save in monthly instalment basis according to their
capability for paying muhorana to their wives as well as
rectifying their marriage life and protecting the human right of
the women. This account can be opened for monthly
instalments of Taka 500/- to 5,000/- for a period either of 5 or 10
years. In 2020, a total number of 1690 MMSS Accounts have
been opened, total account stood at 16667.

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06. Mudaraba NRB Savings Bond (MNSB)
The Non-Resident Bangladeshis (NRBs) & their family
members are eligible to purchase Mudaraba NRB Savings Bond
in single or joint names. An expatriate may purchase Mudaraba
NRB Saving Bond in the name of his/her minor children as per
usual terms & condition applicable to other deposit products.
The Mudaraba NRB Savings Bond denominated Tk. 25,000/-,
50,000/-, 100,000/- 200,000/-, 500,000/- and 1,000,000/- for a
period of 5 or 10 years are available. Service charge, account
closing fee and account maintenance fee are not realized from
this account. In 2020, a total number of 34 MNSB Accounts has
been opened and at the end of 2020 total account stood at 901.
Maximum 90% quard are allowed against total outstanding
balance in this account.
07. Students Mudaraba Savings Account
(SMSA)
Students of any Educational Institutions are eligible to open
Students Mudaraba Savings Account with minimum balance of
Tk.100/-. No service charge is realized from this account except
excise duty and tax as per govt. policy. ATM/VISA Debit Card is
free against the accounts. The account may be continued as
Mudaraba Savings Account in their own name when the student
becomes adult. In 2020, a total number of 226,675 SMSA
Accounts has been opened and at the end of 2020, total account
stood at 641,423.
08. Mudaraba Farmers Savings Account
(MFSA)
This product is designed to provide banking facilities to the
unbanked people especially farmers. Only a genuine farmer can
open this account by initial deposit of Tk.10/-. Farmers,
Association or Co-operative society of farmers, shall also be
eligible to open Mudaraba Farmers Savings Account (MFSA).
This MFSA may be opened by the father/mother/legal guardian
in favor of a minor. In 2020, a total number of 53,325 MFS
Accounts have been opened and at the end of 2020, total
accounts stood at 513,271.
09. Mudaraba Upohar Deposit Scheme
Account (MUDSA)
In our country, on many occasions like Marriage Ceremony,
Aqiqa, Sunnate Khatna, even during Eid festival people offer
Upohar in cash or in other form. The common practice of giving
Upohar/Gift to the bride/bridegroom or other recipients can
comfortably be served by “Mudaraba Upohar Deposit Scheme”.
Any individual may purchase Upohar Cheque of Tk.500,
Tk.1,000 & Tk.5,000 denomination initially under this scheme
from any branch of IBBL as well as can encash the same from
any branch of IBBL.
10. Mudaraba Industry Employees Savings
(MIES)
In order to improve the life standards of the employees of RMG,
Leather and Footwear sector, IBBL has launched Mudaraba
Industry Employees Saving (MIES) Account with an initial
deposit of Tk.100/-. There is no bar of minimum balance & no
charge is realized from this account except excise duty and tax as
per govt. policy. Charge free ATM/VISA Debit Card is available
against this account.
11. Account for Street Children & Working
Children
As a part of better financial inclusion and to ensure financial
services for all, IBBL has already taken initiatives to introduce
account for Street Children & Working Children.
12. Mudaraba Payroll Account
IBBL has launched a new deposit product titled ‘Mudaraba
Payroll Account’ as the centerpiece of Employee Banking Value
Pack. The product will provide one-stop solutions for the
multinational corporate / medium to large local organizations
so as to offer their employees a wide range of Shari’ah Compliant
personal banking
solution starting from a Salary Account to Credit Cards and
other personal investment schemes.
13. Mudaraba Bibaho Savings Account
To attract parents and younger generation having plans to start
a family in near or distant future, “Mudaraba Bibaho Savings
Account (MBSA)” has been introduced to strengthen the
deposit portfolio of IBBL through deposit of small amount
monthly at affordable capacity of the customers. Any adult
Person being mentally sound can open the account as per rules
of the bank and the law of the land. Account holder is entitled
for getting an attractive amount on the expiry of 3 or 5 years
term. The account can be opened by monthly deposit of Tk.500
& its multiple amounts up to Tk. 50,000.
ANNUAL
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Spinning Mill

General Investment
Total General Investments of the bank as on 31st December 2020 stood at Tk. 1,035,287 million as against Tk.899,013 million on 31st
December 2019 despite COVID-19 pandemic challenge on the banking sector since the beginning of the year. The investments
increased by Tk.136,274 million recording 15.16% growth in 2020 over the previous year. The trend of general investment (last
5-years) is shown in the following graph:

Trend of General Investment: (Amount in million Taka)

Trend of General Investment:

1,200,000
1,035,287
1,000,000 899,013
805,760
800,000 710,729
616,422
600,000
400,000
200,000
-
2016 2017 2018 2019 2020
Amount 616,422 710,729 805,760 899,013 1,035,287

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Growth of General Investment:

Growth of General Investment
18.00%
16.00% 13.37%
14.00% 16.26% 11.57% 15.16%
12.00% 15.30%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2016 2017 2018 2019 2020
Growth 16.26% 15.30% 13.37% 11.57% 15.16%

Sector-wise Investment Position (Amount in million Tk.)

2020 2019
SL Sector Amount % to Total % to Total
Amount
Outstanding Investment Investment
1 Industrial 562,743 54.36% 493,102 54.85%
2 Trade & Commerce 304,478 29.41% 263,946 29.36%
3 Real Estate 65,914 6.37% 60,402 6.72%
4 Consumer 39,116 3.78% 36,998 4.12%
5 Agriculture 29,541 2.85% 25,518 2.84%
6 Transport 8,192 0.79% 7,292 0.80%
7 Construction 5,474 0.53% 4,290 0.48%
8 Others 19,829 1.91% 7,525 1.31%
Total 1,035,287 100.00% 899,013 100.00%

0.79% Industrial 131% Industrial

2.85% 1.91% 2.84% 0.80% 0.48%
0.53%
3.78%
Trade & Commerce 4.12% Trade & Commerce
6.37%
Real Estate Real Estate
6.72%
Consumer Consumer

Agriculture Agriculture
54.36% 54.85%
29.41% 29.36%
Transport Transport

Construction Construction

Others Others
Sector wise Investment-2020 Sector wise Investment-2019

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Knit Composite Industry

Mode-wise Investment:
(Amount in Million Taka)
% to Total % to Total
Investment Mode 31.12.2020 31.12.2019
Investment Investment
Bai-Murabaha 621,217 60.00% 544,352 60.55%
HPSM 214,846 20.75% 202,152 22.49%
Bai-Muajjal 78,464 7.58% 69,701 7.75%
Quard 44,567 4.30% 35,509 3.73%
Bai-Salam 15,525 1.50% 11,247 1.25%
Bills Purchase & Neg. 55,477 5.36% 32,764 3.64%
Mudaraba 4,800 0.46% 4,700 0.52%
Musharaka 391 0.05% 588 0.07%
Grand Total 1,035,287 100.00% 899,013 100.00%

2% Mode wise Investment-2020 1% Mode wise Investement-2019

5% 0% 0% 0% 4% 0% 0% 0%
4% 4%
Bai-Murabaha
Bai-Murabaha
HPSM 8%
8% HPSM
Bai-Muajjal
Bai-Muajjal
Quard Quard

21% Bills Purchase & Neg.

22% Bills Purchase & Neg.
Bai-Salam Bai-Salam
60% 61% Mudaraba
Mudaraba
Musharaka Musharaka
Islamic Credit (Khidmah)
Islamic Credit (Khidmah)

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Denim Industry

Division wise Investment position (Amount in Million Taka)

SL No Position as on 2020 Position as on 2019
Division Amount % Amount %
1 Dhaka 530,950 51.29 461,164 51.30
2 Chittagong 290,458 28.06 236,169 26.27
3 Rajshahi 81,647 7.89 71,517 7.96
4 Khulna 59,952 5.79 61,280 6.82
5 Rangpur 31,092 3.00 30,099 3.35
6 Sylhet 15,300 1.48 15,177 1.69
7 Barishal 13,893 1.34 12,091 1.34
8 Mymensingh 11,995 1.15 11,516 1.27
Total 1,035,287 100.00 899,013 100.00

1.34%
3.00% 1.48% 1.34% 1.15%
Dhaka 3.35% 1.69% 1.28% Dhaka
5.79% Chattogram 6.82% Chattogram
Rajshahi Rajshahi

Khulna Khulna
7.89% 7.96%
51.29% Rangpur Rangpur
51.30% Sylhet
Sylhet
28.06% 26.27% Barishal
Barishal
Mymensingh
Mymensingh

Division wise Investment-2020 Division wise Investment-2020

ANNUAL
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Ceramics Production Industry

The Five Year Business Plan (2017–2021) of the bank is under implementation. The investment plan has been formulated keeping in
view the national economic priorities and diversification of the Investment portfolios by size, sector, geographical area, economic
purpose, securities, administrative divisions and modes.

Investment in Industrial Sector

Industrial development of the country has always been the priority of IBBL. The Bank has deployed 54.36% of its total investment in
industrial sector including export oriented textile and garment industries. Total investment in industrial sector stood at Tk.562, 743
million as on 31st December 2020 as against Tk.493,102 million as on 31st December 2019.

Industrial Sub-Sector wise Investment (Amount in Million in Tk.)

Sl % of total % of total
Industrial Sub -Sector 2020 2019
No. Industrial Inv. Industrial Inv.
1 Textile 138,030 24.53% 126,466 25.65%
2 Service industries 52,052 9.25% 44,289 8.58%
3 RMG 53,861 9.57% 43,728 8.87%
4 Cement and ceramic industries 27,291 4.85% 26,376 5.35%
5 Chemical, fertilizer, etc. 20,622 3.66% 17,687 3.59%
6 Ship building industries 7,941 1.41% 7,944 1.61%
7 Food and allied industries 12,909 2.29% 11,473 2.33%
8 Pharmaceutical industries 5,394 0.96% 6,284 1.27%
9 Ship breaking industries 6,092 1.08% 6,075 1.23%
10 Power and gas 7,426 1.32% 4,493 0.91%
Other manufacturing or extractive
11 148,827 26.45% 130,010 26.37%
industries
12 Others 82,329 14.63% 68,277 13.84%
Total 562,743 100.00% 493,102 100.00%
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Ready-made Garments
IBBL was the pioneer in financing garment industries in the
early Eighty’s. Later on, IBBL also financed in the backward
linkage industries. Most of the leading export-oriented garment
industries of the country received finance from private sector
especially from IBBL. At the end of December 2020, the
outstanding investment in this sector is Tk.53,861 million
9.57% of total Industrial investment which was 8.87% in
December 2019.
Textile
A good number of spinning mills, weaving mills,
dyeing-finishing mills of textile sector have been established
with the Investment of IBBL. As on 31.12.2020, the outstanding
balance of this sector is 24.53% of total Industrial investment
which was 25.65% in December 2019.
Housing & Construction
IBBL has provided Housing facility to 28,120 clients with
financing of Tk.71,388 million at individual level and Real
Estate developers which is 6.90% of Bank’s total Investment in
December 2020. The same was Tk.64, 692 million & 7.20% of
Bank’s total Investment in 2019.
Agro-Based Industry
Being primarily an agrorian economy, the agriculture sector
poses enormous potential for the development and growth of
the agro-based industry in Bangladesh. IBBL also financing to
Ready-made Garments Industry
sectors like Automatic Rice Mills, Flour Mills, Edible Oil Mills,
Jute Mills, Fishery, Poultry & Dairy, Salt, Sugar, Food and
Beverage, Cold Storage, Fertilizer, Oil and Rice Bran etc. IBBL
financed Tk.203,019 million in agro-based industries which is
20.02% of total Investment of the Bank.
Electricity & Power
IBBL has financed 10 power plants with an amount of Tk.7,381
million. The bank has also financed for production of electric
instruments. Apart from power plants and electrical goods, we
are also working on solar power and an investment scheme
under the name and style “Solar Panel Investment Scheme” has
been introduced.
Transport
To develop country’s communication system IBBL has made
investment in road, water and air transport of Tk.8,192 million
that contributes the highest among the banks of Bangladesh
specially Tk.3,225 million for public buses. Besides, IBBL
financed 69 Filling/CNG stations against which present balance
of investment is Tk.1, 731 million.
Information Technology
IBBL has extended finance amounting of Tk.222 million for
producing and procuring hardware & software. IBBL is also
working on developing new entrepreneurs with innovative ideas
to go for big investments in this sector.
ANNUAL
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Steel Sector
For infrastructure development IBBL has financed Tk.52,272
million in the Metal sector specially Iron, Steel and others which
is 5.15% of total investment of the Bank in 2020. At the end of
2019, the Outstanding in this sector was Tk.35,387 million
which was 3.94% of Bank’s total Investment.
Pharmaceuticals & Health Care
To strengthen Medicare facilities & develop health sector IBBL
invested Tk. 5,394 million in 14 Pharmaceutical industries.
Besides these industries IBBL financed of Tk.4,834 million
among Hospital, clinic, Pathological center through-out the
country.
Implementation of Stimulus Package:
To revive economic activity of the country, to ensure
continuation of job of the workers and to maintain the
competitiveness of the entrepreneurs in the backdrop of
possible economic impact of Novel Corona Virus (COVID-19
pandemic), Government of the Peoples’ Republic of Bangladesh
declared various financial stimulus packages including
Tk.4,00,000 million for large sector industrial and service sector
enterprises under BRPD Circular 08/2020, Tk.2,00,000 million
for CMSME sector clients under SMESPD Circular 01/2020.
IBBL was allowed to provide stimulus facility to its clients to the
tune of Tk. 30,080 million for large sector/corporate clients &
Tk.20,000 million for CMSME sector clients. Besides, IBBL has
also executed Participation Agreement with Bangladesh Bank to
avail refinance facility under these packages.
Moreover, Bangladesh Bank has launched Refinance Scheme of
Tk.50, 000 million for agriculture sector vide ACD Circular
01/2020. IBBL has allowed to avail refinance facility of Tk.4, 000
million and executed Participation Agreement with Bangladesh
Bank in this regard.
Impact of Covid-19 pandemic:
The economic shock caused by Covid-19 pandemic was
transformed into banking instability right from the beginning of
the year 2020 as banking sector is the prime mover of the
economy. It directly affects volume of export order,
industrialization and import of capital machinery, industrial
raw material etc decreased significantly. As a result, bank’s
import business, post import investment volume decreased.
Besides, trade sector also affected badly by the pandemic
impact. All of these caused poor turnover of investment limit
and bank could not earn investment and non investment
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income at desired level. To overcome the affect, the clients were
allowed payment deferral facility without downgrading the
classification status. As a result, major change in repayment
culture was observed.Timely recovery of bank’s dues including
dues under financial stimulus packages, management of
non-performing investment and maintaining the investment
growth will be the major challenges to overcome the affect of
Covid-19 in upcoming year.
Welfare Oriented Investment Schemes:
In addition to the usual investment operations, IBBL has 16
Special Investment Schemes for different groups of people. The
schemes as part of bank’s welfare mission aim at fulfilling
finance needs of different segments of people particularly the
under privileged downtrodden and neglected section of
population of the country. To improve the living standard of
these people some welfare oriented special investment schemes
as under have been undertaken:
1. Household Durable Investment Scheme
2. Housing Investment Program
3. Transport Investment Scheme
4. Car Investment Scheme
5. Investment Scheme for Doctors
6. Small Business Investment Scheme
7. Agricultural Implements Investment Scheme
8. Micro-Industries Investment Scheme
9. Rural Housing Investment Scheme
10. Women Entrepreneurs Investment Scheme
11. NRB Investment Scheme
12. Cluster Investment Scheme
13. Freelancer Investment Scheme
14. Rural Transport Investment Scheme' (RTIS)
15. Work Order Financing Scheme
16. Light Engineering Investment Scheme
Directors’ Report

Pharmaceutical Industry

Scheme -wise Investment Outstanding (Amount in million Taka)

2020 2019
Outstanding % to Gen. Outstanding % to Gen.
SL Special Scheme
% to Sp. Investment % to Sp. Investment
Amount Amount
Schemes Schemes
1 RDS 37,754 25.54 3.72 32,722 24.12 3.63
2 HIP (Ex -REIP) 24,468 16.55 2.41 24,708 18.22 2.74
3 SHBIS 25,592 17.31 2.52 25,527 18.82 2.83
4 WEIS 21,339 14.44 2.10 16,441 12.12 1.82
5 Transport (TIS) 7,986 5.40 0.79 8,435 6.22 0.94
6 RE (Developers) 15,275 10.33 1.51 12,423 9.16 1.38
7 AIIS 6,555 4.43 0.65 6,475 4.77 0.72
8 SBIS 3,963 2.68 0.39 3,978 2.93 0.44
9 PGNBP (Palli Griha) 2,018 1.37 0.20 2,357 1.74 0.26
10 HDS 1,743 1.18 0.17 1,461 1.08 0.16
11 SHDS 950 0.64 0.09 938 0.69 0.10
12 CIS 106 0.07 0.01 94 0.07 0.01
13 HBIS 57 0.04 0.01 60 0.04 0.01
14 ISD 14 0.01 0.00 16 0.01 0.00
15 MIIS 1 0.00 0.00 3 0.00 0.00
Total 147,821 100.00 14.57 135,639 100.00 15.04

ANNUAL
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Product launching ceremony of women entrepreneur
SME Investments
Cottage, Micro, Small and Medium Enterprises (CMSMEs) are
the pivotal business concerns for the economic and social
developments of any country. As labor intensive industry,
CMSMEs are significantly contributing in creating employment
and generating income. They are major driving forces for
economic growth both in urban and rural areas in Bangladesh.
Since inception, IBBL's diversified investment under CMSME,
particularly in the priority and thrust sectors and less developed
areas of the country contributes a lot in socio-economic
development and financial services to the low income
community particularly in the rural areas. It has 2(two) well
organized and fully functional SME Investment Divisions which
are actively supporting this industry through its widespread
network all over the country.
In 2020, IBBL disbursed SME Investment of Tk.179,672.30
million. During the year 2,545 new entrepreneurs were added to
the portfolio with disbursement of Tk.4, 110.20 million. IBBL is
holding the highest position in financing CMSMEs among the
Bank/FIs in the country having 10% market share with
outstanding exposure of Tk.246,841.90 million. CMSME
investment of IBBL, so far created more than one million
employments in the country. To expand the unexplored
CMSME market, IBBL is continuously improving its efficiency
standards.
Stimulus Package under SME
The COVID-19 pandemic is causing an unprecedented
disruption to the global economy as well as Bangladesh
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economy. The resultant socio-economic impact is being
transmitted through different channels. To recoup the economic
downtrend and to save the low income people; government
stepped out some projects as well as stimulus package declared
to save the business community.The Government declared
Tk.200,000 million stimulus package to revive economic
activities of CMSME sector, to keep employment intact and to
maintain competency of entrepreneurs under CMSME to
combat the effect of COVID-19 pandemic. Beside this,
Tk.50,000 million also declared for agriculture sector with fully
refinance facility for providing working capital in some
agricultural sector like Horticulture (Seasonal fruits and flower
cultivation), Poultry, Dairy, Fisheries and Livestock as well as
providing working capital in favour of the agri-enterpreneurs;
who are involved in selling agri-products directly purchasing
from the farmers/producers.
As a development partner and Shari'ah based bank, IBBL is
actively participating in disbursement of stimulus package
declared by the Government. Central Bank has allotted
Tk.20,000 million for CMSME sector and Tk.4,000 million for
agricultural sector. Upto December 2020, IBBL disbursed
Tk.14,809.00 million among 3,705 CMSME clients and
Tk.2,687.65 million among 10,141 clients in Agricultural sector.
The rest amount will be disbursed within stipulated period i.e
March 2021. IBBL is the highest contributor in disbursement of
stimulus package. IBBL also signed an agreement with Central
Bank under Credit Guarantee Scheme (CGS) for disbursement
of stimulus without collateral under CMSME.
Directors’ Report

Micro & Agricultural Investment Activities Under RDS & UPDS

Micro Investment Activities
Islami Bank Bangladesh Limited launched its microfinance
program for the rural poor under the name “Rural
Development Scheme (RDS)” in 1995 to address the needs of
investment of the agriculture and rural sector. This is to create
opportunity for employment generation and raising income of
the rural people with a view to reducing poverty. In the
meantime, 282 branches of the Bank have been operating RDS
activities in 64 districts of the country.
The Bank launched another microfinance program namely
“Urban Poor Development Scheme (UPDS)” in May 2012 for
extending micro-investment facilities among the urban poor.
At present, the Scheme is being operated through 24 urban
branches under Dhaka, Chattogram & Sylhet metropolitan
cities. Thus RDS & UPDS are running in 306 branches of IBBL.

Performance under the Schemes at a glance (Amount in million Taka)

Performance of RDS & UPDS
Sl Particulars Increase/ Increase/
2018 2019 Growth 2020 Growth
Decrease Decrease
1 Designated Branches 272 295 23 8% 306 11 4%
2 Village 21, 992 24,626 2,634 12% 25,842 1,216 5%
3 Member 1,108,283 1,253,512 145,229 13% 1,323,705 70,193 6%
4 Client 625,532 687,234 61,702 10% 707,490 20,256 3%
Cumulative
5 236,423.80 278,660.02 42,236.22 18% 320,833.33 42,173.31 15%
Disbursement
Investment
6 29,436.27 32,722.02 3,285.75 11% 37,766.98 5,044.96 15%
Outstanding
7 Amount of Overdue 166.84 209.75 42.91 26% 449.77 240.02 114%
8 Amount of Classified 224.79 221.35 (3.44) (2%) 179.66 (41.69) (19%)
9 % of recovery 99. 43 % 99.36 % (0.07 %) - 98.81% (0.55) (0.01%)
10 Savings 10,464.90 11,852.25 1,387.35 13% 12,653.05 800.80 7%
11 No. Of RDS
Employees 2,479 2,795 316 13% 2,724 (71) (3%)

The detailed performances of both Schemes are mentioned below:

1. Inclusion
At present 1,323,705 members are enjoying financial services under 33,619 centres in 25,842 villages. It
may be mentioned here that the ratio of male & female members is 8:92.

Expansion of RDS & UPDS in the last 5 years is shown in the following table

Sl. Particulars 2016 2017 Growth 2018 Growth 2019 Growth 2020 Growth
01 Villages 19,418 20,653 6% 21,992 6% 24,626 12% 25,842 5%
02 Centres 28,960 30,032 4% 30,112 0% 33,059 10% 33,619 2%
03 Members 999,140 1,108,710 11% 1,108,283 0% 1,253,512 13% 1323,705 6%

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Comparative Position of Member 1,323,705

1,400,000 1,253,512
1,108,710 1,108,283
1,200,000 999,140
1,000,000
800,000
600,000
400,000
200,000
0
2016 2017 2018 2019 2020

2. Savings Program
The members under the Schemes have to deposit a compulsory
weekly savings with the Bank at least Tk.50/- per week, even
3. Investment Program
There are 02 types of investment facilities are being provided to
the beneficiaries namely (a) Micro-investment: Collateral-free
investment maximum Tk.100,000/- for the RDS members and
(b) Micro-Enterprise Investment: Investment with collateral
security maximum Tk.500,000/-for the graduated micro-clients
and newly inducted local Micro-Entrepreneurs. We also extend
Quard-al-Hasana to the eligible RDS clients for setting up
though they enter into as the member by depositing only
Tk.10/-as an initial deposit. Total savings of RDS & UPDS
members was Tk.12, 653.05 million in 2020.
Quard-al-Hasana is also provided for rehabilitation purposes on
account of natural and social disasters. Cumulative
disbursement among the beneficiaries was Tk.320, 833.33
million up to 2020 out of which outstanding was Tk.37, 766.98
million.

Year-wise investment outstanding in graph (Last 5 Years) (Amount in million TK.)

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Cable Production Factory

Sector-wise Investment
Investments under the Schemes are provided especially in the
agriculture sector. However, a significant investment has also
been extended in different income generating off-farm
activities, rural housing & transport. It is viewed that 38%
investment was extended in different sub-sectors of agriculture,
15% in rural housing, 4% in rural transport and 43% in different
off-farm activities.

4. Non-financial (welfare) Programs under the Schemes

Since poverty alleviation needs a combination of financial and non-financial programs. In this perspective, different non-financial
welfare services have been extended under the Schemes from the year 2012 to the areas of (1) Education, (2) Training, (3) Health, (4)
Relief & Rehabilitation and (5) Environment.
Performance of welfare activities at a glance during the Year 2020 (Amount in million Taka)
Sl. January to December, 2020 Cumulative (2012-Dec.2020)
Description
No Beneficiaries Amount Beneficiaries Amount
1 Education Program 64,716 134.30 404,820 709.61
2 Training Program 11,494 1.14 1,030,863 148.90
3 Health Program 20,142 23.17 317,764 265.02
Relief & Rehabilitation
66,930 95.28 92,398 320.38
4 Program
5 Environment
638,182 30.74 8,195,517 214.76
Program
Grand Total 801,464 284.63 10,041,362 1,658.67

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Dairy Farm

Agricultural Investment Activities

Islami Bank Bangladesh Limited has been giving due In the Financial Year 2019-20, the Bank has disbursed
importance on agricultural/rural investment sector in Tk.14,301.00 million in agriculture sector among 110,747
Bangladesh from its inception. To make it more convenient, Five farmers. Besides, under the special program of Bangladesh Bank
Investment Schemes like Agricultural Implements Investment for investment in cultivation of pulse, oil seed, spices & maize at
Scheme (AIIS), Rural Development Scheme (RDS), Micro subsidized at the rate of profit 4%, IBBL has disbursed an
Enterprise Investment Scheme (MEIS), Solar Panel Investment amount of Tk. 29.43 million in the Financial Year 2019-20.
Scheme (SPIS) and Fruit Gardening Investment Scheme
(Falbithi) have been introduced in 1992, 1995, 2005, 2011 &
2016 respectively. Fruit Gardening Investment Scheme
(Falbithi) is our new Agricultural Investment product especially
for Fruit cultivation.

Sector-wise disbursement under Agricultural Investment in the FY 2020-21 (Amount in million Taka)

Sl. No. Sector No of Clients Disbursement

1 Crops 19,249 1,977.61
2 Fisheries 7,595 1,763.48
3 Livestock 15,807 2,683.38
4 Irrigation Equipment 199 16.31
5 Agricultural Implement 459 42.68
6 Poverty Alleviation 10,494 1,213.04
7 Storage 1,237 151.82
8 Others 4,652 698.72
Total 59,692 8,547.04

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Agricultural Investment under Stimulus

Package in COVID-19 situation
Bangladesh Bank has introduced a Scheme for extending
Agricultural Investment in crops sectors throughout the
country at 4% concessional rate to deal with the crisis caused by
the outbreak of Novel Corona Virus-19”. Bangladesh Bank also
introduced a Refinance Scheme for Tk. 5,000 crore for the
farmers of the country to overcome the affects of COVID-19
crisis. Bangladesh Bank allocated Tk. 400 core for IBBL to
disburse favoring the farmers in the non crops sectors like
Dairy, Poultry, Fisheries, and Livestock & Horticulture.

A summary position of the Disbursement up to December 2020 (Amount in million Taka)

Non crops
Crops 4% concessional
( Dairy, Poultry, profit rate
(Cereal crops, Cash Total
Sl Fisheries, Live (Pulse, oilseed,
Particulars crops, Tuber crops
No stocks & Spices & Maize)
& Vegetables)
Horticulture)
Client Amount Client Amount Client Amount Client Amount
1 Sanctioned 16,833 1,217.20 12,443 2,223.20 329 29.50 29,605 3,469.90
2 Disbursed 16,833 1,217.20 9,614 1,603.50 329 29.50 26,776 2,850.20

Trade Business (Import &Export) and Remittance

In 2020, IBBL did import business for Tk.419, 046.00 million remittances business for Tk.486, 274.00 million with a growth of
with a growth of 4.79% & retaining market share of 11.00%. 59.17% in total remittance & market share stood at 25.00% .The
Export business stood at Tk. 224,970.00 million in 2020 comparative figures of international business (2019-2020) are
withMarket share of 8.00%. IBBL mobilized shown below:

Import/ Export/ Remittance (Amount in Million Taka)

SL. Nature of Achievement in Achievement in IBBL IBBL’s Market Share
No Business 2019 2020 Growth (%)
1 2 3 4 5 6
1 Import 399,884 419,046 4.79% 11.00%
2 Export 234,443 224,970 (4.04%) 8.00%
3 Remittance 305,514 486,274 59.17%* 25.00%
Total 939,841 1,130,290 20.26

Import
Import business rose to Tk.419, 046.00 million in 2020 from Tk.399, 884 million in 2019 with a growth of 4.79%. The market share
of import business of IBBL stood at 11.00%. Last 05 (five) years import performance (2016-2020) is shown in the chart.

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Import Trend 2016 - 2020

Volumme in million TK.

450000 16%
400000 14%
350000 12%
300000 10%
250000 8%
200000 6%
150000 4%
100000 2%
50000 0%
0 -2%
2016 2017 2018 2019 2020
Voulume 339,954 385,194 399,816 399,884 419,046
Share 10% 9% 9% 9% 10%
Growth -1% 13% 4% 0% 5%

Export:
Export business decreased to Tk. 224,970.00 million in 2020 from Tk. 234,443 million in 2019. The market share of IBBL in export
business stood at 8.00%. Last 05 (five) years export performance (2016-2020) is shown in the chart

Export Trend 2016 - 2020

Volumme in million TK.

255000 12%
250000 10%
245000 8%
240000 6%
4%
235000
2%
230000
0%
225000 -2%
220000 -4%
215000 -6%
210000 -8%
2016 2017 2018 2019 2020
Voulume 243,647 240,026 251,592 234,443 224,970
Share 10.06% 9.27% 9% 8% 8%
Growth 9.00% -1.49% 5% -7% -4%

Remittance:
Remittance is considered one of the fundamental indicators of our national economy. IBBL also conferred the highest level of
attention on remittance collection through banking channels considering its contributing role to the economy. Alike to previous
years, we are being 1st in remittance collection by routing almost one-fourth of the remittance through our bank with 25% market
share. Our inward remittance volume sharply rose to Tk. 486,274.00 million in 2020 from Tk. 305,514 million in 2019 with a
growth of 59.17%. Last 5 (five) years remittance performance (2016-2020) is shown in the chart.

279,980 233,052 275,212 305,514 486,274

24.00% 19.55% 21.16% 19.28% 23.38%
-13.00% -16.76% 18.09% 10.80% 59.17%

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Directors’ Report
Off-Shore Banking
In 2020 the amount invested through OBU was Tk. 58,015
Million (USD 684 million) which was Tk.33,689 million in
2019. The growth in 2020 over 2019 was 72.21%.
Corporate and Financial Reporting
The Directors of Islami Bank Bangladesh Limited in
conformance with the BSEC Notification No.
SEC/CMRRCD/2006-158/208/Admin/81 dated 20 June 2018;
confirm compliance with the financial reporting framework for
the following:
The financial statements, prepared by the management of
IBBL make a fair presentation of its activities, operational details
and results, cash flow information and changes in equity
structure.
Proper books and accounts of the Company have been
maintained.
Appropriate accounting policies, including International
Accounting Standards (IASs)/International Financial Reporting
Standards (IFRSs), have been consistently applied in
preparation of the financial statements. There is no material
changes affecting the financial position of the company during
the period under review; any change or deviation has been
adequately disclosed in the financial statements.
Accounting estimates are based on reasonable and prudent
judgment.
Internal control processes have been properly designed and
effectively implemented and monitored.
No significant doubt exists upon the Company’s ability to
continue as a going concern.
Corporate Governance Compliance
Corporate governance has become firmly entrenched on the
world business scene over the past three decades. Today it is a
key component in the operation of all manner of entities around
the globe. Even more important is the need for corporate
governance to be effective, not only for business entities but also
for the economy as a whole. Sound corporate governance in the
Banking is the prerequisite for efficient financial market.
Status of the compliance of conditions of Corporate Governance
guidelines imposed by the Bangladesh Securities and Exchange
Commission’s Notification No. SEC/CMRRCD/2006-158/207/Admin/80
dated 3 June 2018, along with a certificate from a practicing Chartered
Accountant has been provided in corporate governance report.
Sustainability Reporting
Together we are also creating positive impact in respective
communities where IBBL operates. We sincerely strive to
maintain business processes without degrading or endangering
natural biotic systems, even our every business activity is eco
friendly as we never invest environmentally hazardous
areas/sectors. Furthermore we focus on exploring fintech
through going everywhere with all financial services for
ensuring financial inclusion, sustainable growth and equitable
development of our stakeholders. As part of sustainability
reporting, IBBL has disclosed a separate report on GRI
including reporting checklist thereon in Corporate Governance
report.
Future Outlook
Performance of Bangladesh economy in 2021 largely depends
on handling of certain issues concerning export, remittances,
private sector investment, employment generation and revenue
generation and most importantly how we manage the revival
efforts from the crisis of COVID-19 pandemic. Implementation
of 9% Rate of Return (except credit cards) effective from April
2020 is expected to affect liquidity and profitability of banking
industry. Moreover, a longer lasting and more intensive
coronavirus outbreak may weaken world economic prospects
considerably which has affected remittance flow very positively
in 2020. Performance of Bangladesh economy in 2021 will also
depend on economic recovery of Eurozone and US economy
from this crisis. Growth is real only when it is sustainable and
serves the long-term interest of stakeholders. We are committed
to our mission of enabling growth and progress and will
continue to be true to our values as we serve our clients. In 2021
we will continue to focus on control and risk management to
ensure IBBL’s position as the strongest and stable institution as
we have been last couple of years. We have delivered consistent
shareholder returns and built a strong capital position to grow
sustainably. Whatever we have achieved could not have
happened without the commitment and hard work of each of
you. On behalf of the Board of Directors, I take the privilege to
acknowledge your productive hard work. Through a wide
range of branch network and setting up best-in-class digital
services, IBBL will also continue offering the best possible
banking services across the country. I am confident that we will
continue as a striking symbol of growth and development in the
years to come InshaAllah.
Vote of Thanks
The Board of Directors expresses its deepest gratitude to the
Almighty Allah for enabling the bank to achieve steady progress
in all aspects of operations during the year 2020. The Board
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extends thanks to the Ministry of Finance, the Bangladesh

Bank, the Bangladesh Securities and Exchange Commission,
Dhaka Stock Exchange Limited, Chattogram Stock Exchange
Limited, National Board of Revenue, Registrar of Joint Stock
Companies, Statutory Auditors and the Government Agencies
for providing necessary assistance, guidance, support and
co-operation at various stages of operations of the Bank. With
deep sense of gratitude, the Board also keeps on record the
excellent co-operation, exchange of views and constant support
of the Islamic Development Bank (IDB), other national and
overseas Islamic Banks and Financial Institutions.

The Board appreciates the support and co-operation received

from overseas correspondents of the bank all over the world.
The Board particularly likes to record its appreciation for the
Shari‘ah Supervisory Committee whose guidance has enabled
the bank to conduct its business complying Islamic Principles.

The Board of Directors also extends the best compliments to all

of its valued Shareholders, Depositors, Investment Clients, Print
and Electronic Media and other stakeholders and well-wishers
and expresses thanks and gratitude to them for their valuable
support and confidence reposed on the bank. Finally, the Board
would like to express its great appreciation and thanks to all the
officials and staff of the Bank for their untiring efforts,
leadership and dedication for bringing about a better
performance of the Bank during the year.

In conclusion, notwithstanding the fact that Islamic banks have

been able to shield themselves from the spillover impact of the
global economic recession due to COVID-19 , no one can
predict the extent to which the Islamic finance's principles will
serve to protect it from the looming financial crisis. Whilst some
have pointed out that it is already knotted with the mainstream
finance whereby its future is as risky as any other part of the
global financial industry, Experts in Islamic finance believe that
their way of carrying out finance-related activities has shielded
them from the global crisis and hence, the model stands on its
own merit.

May Allah, the most Merciful bestow on us courage, dedication,

patience and fortitude to serve the cause of Islam and also of
Bangladesh and run the bank as per the vision and mission put
forth earlier and tenets of Islamic Shari’ah.
Ameen.

Dated, Dhaka (Mohammad Nazmul Hassan)

April 27, 2021 Chairman

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CORPORATE
GOVERNANCE
 Corporate Governance

Annual Business Development Conference

Corporate Governance structure of IBBL specifies the objective Board Size

of providing strategic direction, ensuring that goals are
achieved, ascertaining that risk is managed appropriately and The Board of Directors consists of 20 (twenty) non-executive
verifying that reasons are utilized responsibly. Governance is members including 04 (four) Independent Directors excluding
evolve through the leadership and organizational structure and the ex-officio Managing Director. The number of Board
process that ensure the enterprise sustains and extends members is within the limit set by Bank Company Act 1991
Strategies and objectives focusing transparency, accountability (amended upto 2018) and BSEC notification on Corporate
and delegation of authority. The corporate governance has been Governance.
aligned in line with the accepted corporate governance practice
and guidelines of Bangladesh Bank and Bangladesh Securities Selection and Appointment of New Directors
and Exchange Commission’s Notification. The Bank has
deployed utmost importance in setting up a well defined The selection and appointment of new directors and the
compliance culture throughout the organization. reappointment of existing Directors are being made in line with
the following obligations and duties:
Board of Directors, Chairman and the CEO
1. Frequent assessment of the size and structure of the Board
Appointment of Directors and the mix of knowledge, skills, experiences and perceptions
that may be necessary to allow the Board to perform its
The members of the Board of Directors of IBBL are appointed
functions.
pursuant to the provision of Companies Act 1994, Bank Company
Act 1991, Bangladesh Securities and Exchange Commission
2. Recognizing the capabilities and following the approved
(BSEC) Notifications, Guidelines of Banking Regulations and
procedure to ascertain that an applicant designated by the
Policy Department (BRPD) of Bangladesh Bank and Memorandum
shareholders possesses the same.
& Articles of Association of the Bank. Independent Directors have
been appointed by the Board as per regulatory requirement. The
The directors are selected by the shareholders in the Annual
Board is comprised of experienced members from diverse
General Meeting. Casual vacancy, if any, is filled up by the Board
professions like businesses, administration, banking & finance,
in accordance with the conditions mentioned in the Companies
chartered accountancy, general management, teaching, physicians,
Act and Articles of Association of the Bank.
Shari’ah experts and engineers which make the Board very effective
and balanced in deciding and directing various issues of the Bank.

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Corporate Governance
Discussion on Birth Anniversary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman
Retirement and Re-election of Directors
As per Companies Act and Articles of Association of the Bank,
each year one-third of the Directors retire from office and being
eligible, may offer themselves for re-election by shareholders at
the Annual General Meeting. In line with the requirement of
Bank Company Act and Articles of Association of the Bank,
one-third Directors shall retire in the 38th AGM and they are
also eligible for reelection.
Directors’ Profile and Their Representation
in the Board of other Companies
Incorporated in the Directors’ profile
Formation of different Committees of the
Board
The Board formed an Executive Committee, an Audit
Committee and a Risk Management Committee. There is no
committee or sub-committee of the Board other than the above
mentioned Committees. However, IBBL has a Shari’ah
Supervisory Committee to look after the Shari’ah affiars and
gives suggestions to the management on Shari’ah issues.
The Executive Committee
The Executive Committee is comprised of 07 (Seven) members
of the Board. The Executive Committee is responsible to the
Board of Directors. The duties of the Executive Committee are
clearly set forth in writing. The Company Secretary acts as the
secretary of the Committee.
Roles and Responsibilities of the Executive
Committee
The Executive Committee exercises all the powers of the board
except those specifically given to the Board by the Bank
Company Act, 1991 and other laws and regulations.
The Audit Committee
The Audit Committee of the Bank, comprising of 05 (five)
Members, has been formed in compliance with Bangladesh
Bank & BSEC guidelines. The Company Secretary acts as the
secretary of the Committee.
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Inauguration of Cellfin
The Risk Management Committee
In order to formulate and implement appropriate strategies to
identify and assess risk, its control and management, a Risk
Management Committee, comprised of 05 (five) members, has
been formed. The Committee monitors risk management
policies & methods and reviews the risk management process to
ensure effective prevention and control measures.
Non-Executive Director
All the members of the Board of Directors, except the
ManagingDirector, are non-executive directors. The Board has
04 (four) Independent Directors in conformity with the
corporate governance notification and guidelines of regulatory
authorities. The Independent Directors enjoy full independence
in discharging their responsibilities and they are well conversant
in the field of business and professional areas. The independent
directors have required qualifications and corporate
management/ professional experiences as stipulated in BSEC
notification as well as Bangladesh Bank guidelines.
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Corporate Governance
Responsibilities of the Chairman of the
Board
The responsibilities of the Chairman as defined in the BRPD
Circular No.11 dated 27 October, 2013 of Bangladesh Bank are
fully complied with. The Chairman of the Board of Directors
does not personally possess the jurisdiction to apply policy
making or executive authority. He does not participate in or
interfere into the administrative or operational and routine
affairs of the Bank. The Chairman conducts on-site inspection of
any bank branch or financing activities under the purview of the
oversight responsibilities of the Board. If needed, he calls for any
information relating to Bank’s operation or ask for investigation
into any such affairs and submits such information or
investigation report to the meeting of the Board or the Executive
Committee. With the approval of the Board, he takes necessary
actions there against in accordance with the set rules through
the CEO, if deems necessary. The Chairman enjoys some specific
benefits from the Bank as stipulated in Bangladesh Bank
guidelines. management/ professional experiences as stipulated
in BSEC notification as well as Bangladesh Bank guidelines.
Chairman is Independent from the Chief
Executive Officer (CEO)
The Chairman is independent from the CEO. The Chairman of
the Bank is elected by the directors of the Bank and the CEO is
Corporate Governance
being appointed by the Board of Directors upon permission
from Bangladesh Bank. The Board of Directors has clearly
defined the roles and responsibilities of the Chairman and the
CEO.
Code of Conduct for the Board of Directors
The Board of Directors follows a code of conduct adopted to
provide guidance to directors to carry out their duties in an
honest, responsible and professional manner and within the
scope of their authority, as set forth in the laws of the country as
well as in the Memorandum and Articles of Association of the
Bank. Every Director assures annually signing a confirmation
that they have gone through, have complied with and will
continue to comply with the set of codes approved by the Board
of Directors by BSEC, by Laws and by Bangladesh Bank.
Directors’ Report to Shareholders
All statements regarding section 1.5 of Bangladesh Securities and Exchange
Commission notification No. BSEC/CMRRCD/2006-158/207/Admin/80,
dated 03 June 2018 includes in the directors’ report prepared under
section 184 of the Companies Act, 1994 (Act No. XVIII of 1994).
Independence of Non-Executive Directors
All the members of the Board of Directors, except the Managing
Director, are non-executive directors. They are independent in
Inauguration of Digital Banking Fair
expressing their views and opinions. The directors are also
independent from management and other relationships of the
Bank that could materially affect the activities of the Bank. They
also adhere to the corporate governance practices and
guidelines.
Responsibilities of the Board of Directors
The main responsibility of the Board is to ensure good
governance in the managing affairs of the Bank. The Bank
Company Act, 1991 gives responsibility to the Board of
Directors for establishing policies for the bank, for risk
management, internal controls, internal audit & compliance and
for ensuring their implementation. Keeping in view, the Board of
Directors exercises business judgment in good faith, in a manner
that they reasonably believe to be in the best interest of the Bank,
while complying with the applicable laws and regulations, the
Bank’s Articles of Association and resolutions adopted by the
shareholders.
Annual Appraisal of the Board’s Performance
In every Board meeting, the attendance of the Directors is
registered and they actively participate in various agenda. The
performance of the Board is appraised in various ways through
submission of the performance of the bank in the Board meeting
periodically, preparation and monitoring of budget variances,
placing the implementation status of the Board’s decisions,
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Inauguration of Sub Branch
transacting business issues which are within its power and
placing implementation status of Bangladesh Bank’s
observations on various issues. Furthermore, the performance
report of the committees framed by the Board is also placed in
the Board through which the performance of the Board is
regularly evaluated.
Annual Evaluation of the CEO’s Performance
by the Board
The Board of IBBL has the policy of annual evaluation of its
Managing Director and CEO’s performance. Moreover, the
performance of the CEO is evaluated by the Board through
various reports like performance report of the Bank, taking
status of various assignments given by the Board to the CEO and
the Management, taking implementation status of Budget which
includes the Key Performance Indicators (KPIs) of the Bank etc.
Responsibilities and Authorities of the CEO
& Managing Director
The CEO & Managing Director of the Bank discharges the
responsibilities and exercises the authorities as follows:
(a) The CEO & MD ensures compliance of the Companies Act &
the Bank Company Act and/or other relevant laws and
regulations in discharging routine functions of the Bank.
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Corporate Governance
(b) He submits information on violation of any law, rules,
regulation including the Bank Company Act, while presenting
memos before the Board or the committee formed by the Board.
(c) He provides all information to Bangladesh Bank on the
violation, if any of the Bank Company Act, and/or any other
laws, rules and regulations.
(d) The recruitment and promotion of all staffs of the Bank
except those in the two tiers below him rest on the MD & CEO.
He acts in such cases in accordance with the approved service
rules on the basis of the human resources policy and sanctioned
manpower planning approved by the Board. The authority
relating to transfer and disciplinary measures against the
employees, except those at two tiers below the MD & CEO is
delegated to him, which he applies in accordance with the
approved service rules. Besides, under the purview of the human
resources policy as approved by the board, he nominates officers
for training, skill development Program etc.
Policy on Training of Directors
As per Bangladesh Bank guidelines, the directors shall make
themselves fully aware of the banking laws and other related
rules and regulations for performing their duties properly. The
policy on training of Directors includes providing training and
Corporate Governance
updated information on all the latest policy guidelines, circulars
and acts issued by the regulatory/legislative authorities. Sometimes
special discussion sessions are to be arranged with the experts.
They also attend the programs organized by various professional
bodies at home and abroad on technical, professional and
corporate governance issues.
Directors’ Knowledge and Expertise in
Finance and Accounting
Two Directors in the Board of the Bank are professionally qualified
Chartered Accountants and one is qualified Cost Management
Accountant. They are well conversant in the field of accounting and
finance to provide guidance in the matters applicable to accounting
and auditing standards to ensure reliable financial reporting. Other
Directors are also well conversant in the field of business,
administration and their respective professional areas.
Accountability on Auditing and Financial
Reporting
The Board undertakes responsibilities for preparing and presenting
a balanced and comprehensive assessment of the bank’s operations
at the end of the each financial year through Annual Financial
Statements, Annual Report and Quarterly Announcement of
Financial Performance of the Bank to the Shareholders. The Audit
Committee of the Board assists in this respect by scrutinizing the
information to be disclosed, and to ensure accuracy, adequacy,
transparency and completeness of the disclosed information.
Crest awarded to the Best Manager 2020
Number of Board Meetings
In 2020, 11 (eleven) Board meetings were held. A detailed
disclosure showing number of Board Meetings held and status of
participation of the Directors is given in the later part of the
report.
Directors’ Report on Compliance with
Best Practice on Corporate Governance
Status of compliance of corporate governance checklist is
included in the Directors’ Report, which is dully certified by an
External Audit firm other than Bank’s Statutory Auditors.
Appointment of CFO, Head of Internal
Audit and Company Secretary
The Bank appointed a Chief Financial Officer (CFO), a Head of
Internal Audit (Internal Control and Compliance) and a
Company Secretary (CS) from different individuals who do not
hold any executive position in any other company at the same
time as per guidelines of regulatory authorities. The Board of
Directors clearly defined the roles, responsibilities and duties of
the CFO, the Head of Internal Audit and the CS.
Role of the Company Secretary
Company Secretary is responsible for advising the Board on
issues relating to corporate compliance with the relevant laws,
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IBBL was awarded for the Contribution in SME Women Entrepreneur Development
rules, procedures and regulations affecting the Board and the
Bank, as well as best practices of governance. He is also
responsible for advising the Directors regarding their
obligations and duties to disclose their interest in securities,
disclosure of any conflict of interest in a transaction involving
the Bank, prohibition on dealing in securities and restrictions on
disclosure of price-sensitive information.
Attendance of CFO and Company Secretary
The Company Secretary, Chief Financial Officer (CFO), Head of
Internal Audit (Internal Control and Compliance) of the Bank
attend meetings of the Board of Directors, excluding those,
which involve consideration of an agenda item relating to their
personal matters.
Vision, Mission and Strategy
The Vision and Mission of the Bank are approved by the
Board of Directors. These are disclosed in the annual report,
bank’s website and other publications.
Business Objectives are focused and the areas of business are
set out to attain vision, mission and strategic objectives.
The Strategies to achieve the Business Objectives are clearly
set out and disclosed in the previous section of this annual
report.
Audit Committee
The Board approves the objectives, strategies and overall
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Corporate Governance
business plan of the Bank while the Audit Committee assists the
Board in fulfilling oversight responsibilities. The Audit
Committee also assists the Board in ensuring the financial
statements reflect true affairs and ensures a good oversight of
internal control practices within the bank. The Audit Committee
is responsible to the Board of Directors. The roles of the Audit
Committee are clearly set forth in writing. The Company
Secretary acts as the Secretary of the Committee.
Appointment and Composition
Audit Committee of the Bank, comprising of 05 (five) members
among which 01 (one) is Independent Director, has been
formed in compliance with Bangladesh Bank and the
Bangladesh Securities & Exchange Commission (BSEC)
guidelines. Other than Company Secretary, members of the
Management attend the Committee Meeting as & when
required and on invitation only. A detailed report of the Audit
Committee is included in this annual report.
Chairman of the Audit Committee
The Chairman of the Audit Committee is an Independent
Non-Executive Director and he performs his duties
independently.
Functional responsibilities of Audit Committee
The Audit Committee of IBBL strictly observes the Terms of
Reference of the Committee issued by the Bangladesh Bank
through Guidelines on Internal Control & Compliance in Banks
Corporate Governance

IBBL received National Gold Award for Corporate Governance Excellence

(2016), BRPD Circular No. 11 dated 27 October 2013 and

corporate governance guidelines issued by BSEC. As per the
terms of the said Circulars, the Audit Committee plays a key role
in finalization of the Financial Statements of the Bank. It also
reviews the Internal Control System of the Bank, Internal Audit
Reports, External Audit Reports, Bangladesh Bank Inspection
Reports, Shari’ah Inspection Reports and provides necessary
policy guidelines as and when required. The Committee is
empowered to investigate/question any employee of the Bank. It
can also take External Expert Counsel, if deems necessary.

Audit Committee Comprises of Non-Executive

Director
All the members of the Audit Committee are Non-Executive
Directors. No executive of IBBL is eligible to become a member
of the Audit Committee.

Expertise of the Audit Committee members

All the members of the audit Committee are qualified and have
many years of vast experience in Banking & financial
institutions. They have high level of expertise in the respective
areas. Name, qualification & experience of the members are
stated below:

ANNUAL
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 Corporate Governance

Sl.
Name Role Qualification/ Experience
No

Commerce Graduate under Chittagong University, Qualified as

1 Mohammad Solaiman
Chartered Accountant from the Institute of Chartered Accountant
Bangladesh (ICAB), a fellow member of ICAB, started career as
public accountant & then joined Government service as
Accountant Member of Taxes Appellate Tribunal (Ex-Officio
Chairman Joint Secretary), subsequently promoted to the post of President
(Ex-Officio Additional Secretary),the top position of Taxes
Appellate Tribunal, Internal Resources Division (IRD), Ministry
of Finance, Govt. of Bangladesh, after retirement, started
practices in the relevant field as public accountant under the
name & style M. Solaiman & Co, Chartered Accountants.

M.Sc., LLB (Rajshahi University); acted as Commissioner of

2 Anti Corruption Commission, Chairman of Labor Court &
Mohammed Shahabuddin Member
District Judge, Member of Judicial Inquiry Committee,
Chairman of Judicial Inquiry Commission etc.

B.A (Hons.) & M.A in Economics (Dhaka University &

3 Khurshid Ul Alam
University of New England, New South Wales, Australia); Ex.
Executive Director of Bangladesh Bank, DMD of Pubali Bank
Member Limited, acted as Managing Director of Security Printing Press
(BD) Ltd, served as Chairman of the Audit Committee and
Member of Risk Management Committee of Pubali Bank Ltd,
is a Life Member of Bangladesh Economic Association.

M.Com in Accounting from Dhaka University, CIMA Adv Dip

MA (UK) and CMA & FCMA (ICMAB); Group General
Mohammed Nasir Uddin FCMA Member Manager and Chief of Finance & Accounts of Bay Group. Has a
4
long career in Sunman Group, Monno Group of Industries,
MEB Group, Saad Musa Group, S.A Group, Opex & Sinha
Textile Group etc. in different capacities .

Graduatuion (Dhaka Medical College), D. Orthopedic Surgery

5 Dr Qazi Shahidul Alam
(University of Vienna) and Master of Surgery on Orthopedic
Surgery (University of Dhaka); A Fellow of the International
College of Surgeons USA, has been WHO Fellow in Indonesia, is
the Chairman of the Governing Body of the Uttara Adhunik Medical
College, Vice Chairman of IBF, Chairman in the Governing Body of
Islami Bank Medical College of Rajshahi, Chairman of the Hospital
Committee of IBF, Professor of Orthopedic Surgery at Anwar Khan
Modern Medical College, Member of the Senate at Bangabandhu
Sheikh Mujib Medical University, member of the Governing Board
Member at Sirajul Islam Medical College, member Trustee Board of the
BNSB Hospital in Khulna and member of the EC of the BMA
Professor, Ex. Founder Chairman and Professor, Orthopedic Surgery
at BSMMU, Director, Shaheed Suhrawardy Hospital and Director,
Medical Education, Directorate General of Health Service,
Convener, Bangladesh Medical Internee Association, President,
DMC Teachers’ Association, Secretary General, Bangladesh
Medical Association, President, Bangladesh Orthopedic Society,
Secretary, PROKRICHI, Founder President, Postgraduate Doctors’
Society of Bangladesh and currently President, Bangladesh Patients
Welfare Fund.

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Corporate Governance
Access of Head of Audit to the Audit
Committee
The Head of Audit has the direct access to the Audit Committee.
Head of other unit or any other Officer attends the meeting of
the Audit Committee, if deems necessary.
Review and Evaluation of Quarterly
Performance Report
The Audit Committee reviews and evaluates the quarterly
performance including the financial reports and refers the same
to the Board.
Meeting of Audit Committee
During the year 2020, the Audit Committee of the Bank
conducted 09 (nine) meetings. Proceedings of the meetings
were reported timely & regularly to the Board of Directors as
well as Bangladesh Bank to comply the Bangladesh Bank DOS
Circular Letter no.07 dated 24.04.2011.
Objectives & Activities of the Audit
Committee
Reviewing and Assessing Internal Control
The Audit Committee regularly reviews the Internal Control
System of the Bank. It ensures that the Internal Control Systems
IBBL received Highest Taxpayer Award in Local Banks
are well conceived by all concerned and properly administered
at all levels to the extent that management implements/carries
out its instruction/advice. The Committee monitors observance
of Internal Control Practices at a regular interval. The
Committee also tries to evaluate whether the internal audit
functions have been conducted independently from the
management.
Role of Audit Committee in Ensuring
Regulatory Compliance
The Audit Committee reviews and examines the financial
statements of the Bank every year to see whether all the
disclosures & information have been incorporated in the
Financial Statements properly, whether the Bank followed
International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS) adopted as Bangladesh
Accounting Standards (BAS), Bangladesh Financial Reporting
Standards (BFRS) by the Institute of Chartered Accountants of
Bangladesh. The Committee also examined whether
requirements of the Bank Companies Act, the Companies Act,
the Bangladesh Securities and Exchange Commission Rules, the
Dhaka and Chattogram Stock Exchange Rules, listing
Regulations and other Laws and Rules applicable in Bangladesh
and Standards issued by the Accounting and Auditing
Organization for Islamic Financial Institutions (AAOIFI),
Manama, Bahrain, etc have been followed meticulously in
formulation of financial statements of the Bank.
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Inauguration of IBBL Stall at SME Fair
Review of External Audit Functions
Effective Coordination of External Audit Functions: Before
finalization of the Financial Statements, the Committee met with
the External Auditors and discussed various issues relating to
Financial Statements.
Ensure Independence of External Auditors: The Committee
ensures that the External Auditors perform the Audit with due
independence.
Review of External Auditors’ Findings: The Committee
reviews findings of External Auditors, suggests taking action on
each items and necessary instructions are given to the
Management on the findings of the Auditors.
External Auditors’ Appointment and Reappointment: Every
year the Audit Committee recommends
appointment/reappointment of External Auditors.
Non-Audit Work: External Auditors are not assigned with
any non-audit work thus does not arise any room to
compromise with their independence.
Selection of Appropriate Accounting Policies
The issues related to selection of appropriate Accounting
Policies in line with International Accounting Standards (IAS)
and International Financial Reporting Standards (IFRS) adopted
as Bangladesh Accounting Standards (BAS) and Bangladesh
Financial Reporting Standards (BFRS) respectively by the
ANNUAL
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Corporate Governance
Institute of Chartered Accountants of Bangladesh and other
Regulatory Guidelines were discussed in the meeting of Audit
Committee. The Accounting Policies are annually reviewed at
the time of finalization of Financial Statements.
Annual and Interim Financial Statements
Releases
Audit Committee reviews the Annual and Interim Financial
Statements and recommends the same to the Board for approval.
Reliability on the Management Information
The Audit Committee ensures that all the information used for
computation of financial disclosures are reliable to the extent
that Management submits reliable data.
Review Statement of Significant Related
Party Transactions
The Audit Committee regularly reviews the statement of
significant related party transactions, if any and reports to the
Board, as appropriate.
Attendance of the Chairman as well as the
Members of the Audit Committee in AGM
The Chairman as well as all the Members of the Audit
Committee attends at the Annual General Meeting of the Bank.
Corporate Governance
Internal Control
Directors' Responsibilities to Establish and
Maintain Internal Control
A system of strong Internal Control can help to achieve the goals
and objectives of a Bank. Internal Control is a process
established by the Board of Directors, Senior Management and
all level of personnel to create a compliance culture. To ensure
appropriate level of Internal Control System a good number of
standard operating manuals and policy guidelines have been
introduced in the line with global best practices and regulatory
guidelines. Delegations of powers in various businesses,
administrative and financial areas have also been approved by
the Board.
Review of Adequacy of Internal Control
System
Internal Control is a process rather than a structure. It is an
integral part of business activities. Internal control process
effected by Board of Directors, Management and other
personnel of different departments or divisions of the Bank,
designed to provide reasonable assurance regarding
achievement of objectives relating to operations, reporting and
compliance with applicable laws, regulations and internal
policies. The Board of Directors time to time reviews the
Internal Control System of the Bank and necessary guidance is
provided to improve the system.
Inauguration of IBBL Stall at US Trade Show, 2020
Control system and allocation of duties &
responsibilities
Control mechanism is an integral part of the daily activities of
the Bank. An effective internal control system requires that an
appropriate control structure be set up with control activities
defined at every business level which is ensured in the Bank. The
control mechanism include top-level reviews, appropriate
activity controls for different departments or divisions, physical
controls, checking for compliance with exposure limits and
follow-up on non-compliance, etc.
Inspection by Bangladesh Bank
Bangladesh Bank conducted the 28th Comprehensive
Inspection on Head Office and Branches in 2020, findings of
which are yet to be discussed in the Board Meeting. Moreover
Bangladesh Bank Inspection Team conducted various types of
inspections/visits (Comprehensive, SME, F.Ex & Surprise Visit)
on 38 Branches in this year. Core Risk areas including others
were also inspected by the Bangladesh Bank's Inspection Team.
Findings of the inspections were discussed in the Meetings of
Audit Committee as well as in the Meetings of the Board. The
Board unanimously expressed their determination to strictly
follow the rules & regulations provided by all regulatory
concerns to become one of the best complied Banks.
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Inauguration of Information Security Operations Center
Internal Audit
Monitor/evaluate whether internal audit functions are truly
independent.
Review the activities, structure and style of conduct of
internal audit functions to ensure that no unjustified restrictions
or limitations are imposed.
Review and assess the annual internal audit plan.
Review the efficiency and effectiveness of internal audit
functions.
Review and ensure that appropriate recommendations made
by internal auditors to remove irregularities, if any, are duly
acted upon by concerned personnel in running the affairs of the
Bank.
External Audit
In the 37th Annual General Meeting held on 20 August, 2020,
the Shareholders appointed M/s. Hoda Vasi Chowdhury & Co.,
Chartered Accountants and A Quasem & Co., Chartered
Accountants to audit the Financial Statements and Nostro
Accounts of the Bank for the year 2020. Statutory Auditors
audited 72 Branches and Head Office as part of the Annual Audit
Program, which covered 80% of the Risk-Weighted Assets of the
Bank. Statutory Auditors also submitted a Management Report.
This Report was discussed in the Meeting of Audit Committee
and sent to Bangladesh Bank as per requirement. The Audit
Committee also monitored its compliance.
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Corporate Governance
Risk Management
Identification of the Risks
Risk Management Wing (RMW) has been set up as per the
guidelines of Bangladesh Bank. The Wing is responsible for
identification and management of risks faced by the Bank. The
details of internal and external risk management mechanism are
included in Risk Management disclosures.
Strategies Adopted to Manage and
Mitigate Risk
Number of steps has been taken to manage and mitigate risks of
the Bank. A detail of the same is included in Risk Management
disclosures.
Ethics and Compliance
IBBL gives due importance to the ethical values in every aspect
of operations for preserving the interest of all the stakeholders
towards sustainable growth and development of the country.
Enforcement of corporate code of ethics requires clear
understanding of the same and active observance by everyone in
the bank since the code spells out the expected standards of
behaviour and sets the ideal operating principles to be followed.
Every official is encouraged at all times to maintain high ethical
standards and adequate internal control measures to guard
against the occurrence of any unethical practices and
irregularities.
Corporate Governance
Compliance, on the other hand, means conforming to the
specified rules, policy, standard guidelines etc. Regulatory
compliance describes the goals that the organization should
aspire to achieve. IBBL is always pledge bound to ensure
effective compliance of all the regulatory compliance.
Statement of Ethics and Values
IBBL has adopted the Core Values, Commitments and Code of
Conduct, Ethical Principles and the likes which have been
clearly spelled out in the earlier section of the report.
Communication of Statement of Ethics
and Business Practices
The Code of Conduct/Ethics and Business Practices are time to
time approved and appreciated by the Board of Directors and are
circulated for acknowledgement and meticulous compliance of
all the employees.
Board’s Statement on Ethics and Compliance
The Board of Directors is committed to ensure the observance of
code of conduct as well as ethical standards. It also monitors
strict compliance of the same.
Effective Anti Corruption and Anti-Fraud
Program
IBBL arranges anti-fraud and anti-corruption program as per
the guidelines of regulatory authorities to help prevent the
Inauguration of Sub-Branch
occurrence of any fraud & corruption and all tiers of the
employees are being constantly trained on these issues.
Integrity
To ensure integrity, the Directors along with the employees of
IBBL always discharge their duties in keeping with the
regulatory requirements and try their level best to win the trust
and confidence of the customers through ensuring efficient,
effective and cordial services.
National Integrity Strategy
The government has formulated ‘National Integrity Strategy’ to
bring about good-governance in the state, its institutions as well
as in every walks of the society with a view to establishing a
happy, prosperous and corruption free country. In line with the
government’s decision & guidelines of Bangladesh Bank
regarding the matter, the management of IBBL has formed an
‘Ethical Committee’, fixed ‘focal point’ and drawn an exhaustive
action plan.
Conflict of Interest
All the employees are required to refrain from doing any activity,
which may result in conflict or potential conflict of interest. Any
actual or potential conflict of interest is reported to the
Management as soon as it is recognized for immediate solution
of the same. The Company has distinctive procedures to know
the information as to whether a Director has an actual or
potential conflict of interest. Under these procedures, members
of the Board are required:
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To act in good faith and not to act contrary to the interest of
the company;
Not to use power for any improper purpose;
Whistle Blowing Policy
Some organic structures have been evolved to fulfil the purpose
of the whistle blowing policy of IBBL aiming to promote the
transparency as well as to serve as a channel of corporate fraud
risk management. The system enables an employee, who has a
legitimate concern on an existing or potential wrong-doing, to
raise the issues and bring the same to the notice of competent
authority. Central Complaint Cell has been established to
protect the fraud and error. Risk Management Wing (RMW)
also acts as the whistleblower at IBBL.
REMUNERATION COMMITTEE
Committee Charter
Bangladesh Bank guidelines do not permit to form a separate
committee of Board on remuneration. As such, IBBL does not
have such type of committee. However, the Board of Directors
time to time review and evaluate the remuneration paid to all
level of employees of the Bank.
Compensation
Compensation to the employees is decided by the Board of
Directors where all the members are non-executive directors.
The Managing Director, Additional Managing Directors,
Deputy Managing Directors, Head of Human Resources, CFO
and other related officials work on the issue as per guidance of
the Board.
Policies on Remuneration
Key policies to decide the remuneration include market trend,
inflation, job requirement, position of other banks in the same
area etc. The detailed remuneration policy of the Bank is also
described in ‘Market Disclosure of Basel-III.
Meetings on Remuneration Issues
Meetings of the executives as well as meeting of related Board
meetings are held time to time to see the status of the
remunerations that are being paid to the employees in line with
the peer banks.
Remuneration of Directors, Chairman,
Managing Director and Senior Executives
Honorarium paid to the Chairman and Directors and others for
attending meetings as per BB circular.
ANNUAL
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Corporate Governance
Managing Director is paid salaries and allowances as per
approval of the Board as well as Bangladesh Bank which is
separately disclosed in the Financial Statements.
The senior management is remunerated as per standard pay
structure of the bank being approved by the Board of Directors.
Human Capital
Human Capital is an intangible asset or quality not listed and
company's balance sheet. It can be classified as the economic
value of a workers experience and skills. This includes education
training intelligence and skills. Health and other things
employees value such as loyalty and punctuality. Being a value
driven organization, IBBL considers its employees as the most
precious capital that play the vital role in materializing the
mission, vision, goals and objectives of the bank.
Human Resources Development
Development and management of human resources is very
much vital to ensure sustainable growth and development of an
organization. This approach is a framework for helping the
employees to develop their personal as well as organizational
knowledge, skills and abilities by means of extensive
improvement process covering systematic training, motivation,
coaching, counseling, mentoring and the likes.
Succession Planning
Efficient succession planning is an integral part for effective
employee management and IBBL has got a sound succession
plan to carefully avoid the problems of instant vacuum of the
senior/key executives that may take place due to retirement,
resignation and termination etc.
Merit Based Hiring
Hiring of committed, dedicated and meritorious human
resources is an integral part to run the organization smoothly
and efficiently. IBBL generally recruits heterogeneous
workforces having diversified academic background and
transform them into a homogeneous one through extensive
training and development process. IBBL is following the
Board-approved recruitment policy to ensure hiring of the right
person for right position.
Promotion, Reward & Motivation
IBBL follows structured human resources policy in awarding
promotion, reward and recognition to its employees. Promotion
cannot be claimed as a matter of right. It is awarded to those who
deserve. Every year IBBL awards promotion to the eligible
employees keeping in view the quality of their respective job
delivery, performance and potentiality.

Discussed the Bangladesh Bank inspection reports on the
Branches and Head Office and advised the management to
rectify all lapses and to comply with Bangladesh Bank’s
instructions & circulars meticulously;
Assessed reports relating to fraud, forgery, deficiencies or
other similar issues in internal control detected by internal and
external auditors and inspectors of the regulatory authority
and placed it before the Board after reviewing whether
necessary corrective measures have been taken by the
management;
Reviewed the Self-Assessment of Anti Fraud Internal
Control on half yearly basis for onward submission to
Bangladesh Bank in compliance with DOS Circular Letter No.
10 dated 09.05.2017;
Approved the Audit (Risk Based, Internal, RDS/UPDS, IS,
Concurrent) Calendar for the year 2021 and advised the
management to carry out the audit program meticulously;
Reviewed the activities of the internal audit and the
organizational structure and ensuring that no unjustified
restriction or limitation hinders the internal audit process and
examined the efficiency and effectiveness of internal audit
functions;
Examined whether the findings and recommendations
made by the internal auditors & external auditors are duly
considered by the management or not;
Reviewed the financial statements to ensure that the same
are in full compliance with the Acts, Rules and the Accounting
Standards (IAS/IFRS);
Analyzed the financial involvement against the
objections/observations raised in the internal, external &
Bangladesh Bank Audit/Inspection reports.
Advised the management to complete all the
documentation formalities carefully and retain each and every
document properly;
Analyzed the deposit trend of the bank and advised the
management to exert best effort for mobilizing the deposit in
order to support the business growth of the bank;
Reviewed the reports on overdue, classified, rescheduled &
written off investment and other non-performing assets and
advised the Management to increase the recovery therefrom &
to take proper steps so that no new investment become
classified;
Advised the management to ensure full Shariah compliance
in all areas of business;
Audit Committee Report
Reviewed whether the laws and regulations framed by the
regulatory authorities (central Bank and other bodies) and
internal regulations approved by the Board are being complied
with;
Evaluated the status of large investment clients on regular
basis;
Evaluated the certificate on the effectiveness of Internal
Control Policy, Practice & Procedure of the bank;
Appraised the implementation status of Circulars/Circular
Letters issued by Regulatory bodies (Bangladesh Bank &
others);
Reviewed the Annual Heath Report of the Bank for the year
2019;
Assessed the Quarterly Operations Report (QOR) of all
Branches on quarterly basis;
Appraised the Nostro Account Reconciliation position.
Statutory Auditors’ Appointment
The Audit Committee recommended to the Board for
appointing Statutory Auditors in the Annual General Meeting
for the year 2020.
Interim Financial Reports of 2020
The Audit Committee reviewed and recommended the
quarterly & half yearly Financial Statements to the Board and
ensured that authentic and reliable Financial Information have
been incorporated in preparing those Financial Statements and
in other interim reports.
Review of Financial Statements of 2020
The Audit Committee, reviewed and examined the Annual
Financial Statements of the Bank to confirm whether all the
required disclosures and information have been incorporated
in the Financial Statements and whether the Bank followed
International Accounting Standards (IAS) and International
Financial Reporting Standards (IFRS), Bank Company Act
1991(as amended up to 2013), Bangladesh Bank Guidelines,
Companies Act 1994, the Bangladesh Securities and Exchange
Commission Rules 1987 and other laws and rules applicable in
Bangladesh. The Committee also examined whether the
Standards issued by the Accounting and Auditing
Organization for Islamic Financial Institutions (AAOIFI),
Bahrain have been followed in formulation of Financial
Statements of Bank. The Committee recommended the
Financial Statements of 2020 for consideration of the Board.
ANNUAL
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 Audit Committee Report

Meeting with the Statutory Auditors

The Committee met with the Statutory Auditors for
finalization of financial statements. It properly addressed the
issues mentioned in the Management Letter for taking
appropriate action by the Management.

Acknowledgment
The Committee expressed its profound thanks and gratitude to
the Members of the Board, Management, Auditors and the
Regulatory Authorities, in particular, Bangladesh Bank, the
observer of Bangladesh Bank and the Bangladesh Securities
and Exchange Commission for their excellent support while
performing its coveted duties and responsibilities.

Mohammad Solaiman
Chairman
Audit Committee

ANNUAL
248 REPORT
2020
INDEPENDENT
AUDITORS’ REPORT
 Independent Auditors’ Report
To the Shareholders of
Islami Bank Bangladesh Limited
Report on the audit of the consolidated and separate financial statements
Opinion
We have audited the consolidated financial statements of Islami Bank Bangladesh Limited and its subsidiaries (the “Group”) as well as the separate
financial statements of Islami Bank Bangladesh Limited (the “Bank”), which comprise the consolidated and separate balance sheets as at 31 December
2020 and the consolidated and separate profit and loss accounts, consolidated and separate statements of changes in equity and consolidated and
separate cash flow statements for the year then ended, and notes to the consolidated and separate financial statements, including a summary of
significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements of the Group and separate financial statements of the Bank give a true and fair view
of the consolidated financial position of the Group and the separate financial position of the Bank as at 31 December 2020, and of its consolidated and
separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial
Reporting Standards (IFRSs) as explained in note 2 and 3 and comply with the Bank Companies Act, 1991 (as amended up to date), the Companies
Act, 1994, the Rules and Regulations issued by the Bangladesh Bank, the Rules and Regulations issued by the Bangladesh Securities & Exchange
Commission (BSEC) and other applicable Laws and Regulations.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further
described in the Auditors’ Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are
independent of the Group and the Bank in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code), Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank, and we have fulfilled our other ethical
responsibilities in accordance with the IESBA Code and the Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the consolidated and separate financial
statements for 2020. These matters were addressed in the context of the audit of the consolidated and separate financial statements, and in forming the
Auditors’ opinion thereon, and we do not provide a separate opinion on these matters. For each matter below our description of how our audit
addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the consolidated and separate financial statements
section of our report, including in relation to these matters.

Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatements of the
consolidated and separate financial statements. These results of our audit procedures, including the procedures performed to address the matters
below, provide the basis for our audit opinion on the accompanying consolidated and separate financial statements.
Description of key audit matters Our response to key audit matters
Measurement of provision for investments
The process for estimating the provision for investments We tested the design and operating effectiveness of key controls focusing on the
portfolio associated with credit risk is significant and following:
complex. • Credit appraisal, investments disbursement procedures, monitoring and
provisioning process;
For the individual analysis for large exposure, provisions • Identification of loss events, including early warning and default warning
calculation considers the estimates of future business indicators; and
performance and the market value of collateral provided for • Reviewed quarterly Classification of Investments;
credit transactions. Our substantive procedures in relation to the provision for investments portfolio
comprised the following:
For the collective analysis of exposure on portfolio basis, • Reviewed the adequacy of the general and specific provisions in line with related
provision calculation and reporting are manually processed Bangladesh Bank guidelines;
that deals with voluminous databases, assumptions and • Assessed the methodologies on which the provision amounts are based,
estimates. recalculated the provisions and tested the completeness and accuracy of the
At year end the Group reported total gross Investments of underlying information;
BDT 1,030,588 million (2019: BDT 894,223 million) and • Evaluated the appropriateness and presentation of disclosures against relevant
provision for investments of BDT 46,552 million (2019: BDT accounting standards and Bangladesh Bank guidelines.
42,112 million). • Finally, compared the amount of provision requirement as determined by
Bangladesh Bank inspection team to the actual amount of provision maintained.
See note no. 11 and 17 to the financial statements

ANNUAL
250 REPORT
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Independent Auditors’ Report
Description of key audit matters
Implementation of IFRS 16 Leases
IFRS 16 modifies the accounting treatment of operating leases
at inception, with the recognition of a right of use (ROU) on
the leased asset and of a liability for the lease payments over the
lease contract term. With respect to operating leases of
premises used by the Bank, at inception of the lease, the lessor
receives a right of using the premises, in exchange of a lease
debt, using an implicit discount rate.
Our key audit matter was focused on all leasing arrangements
within the scope of IFRS 16 are identified and appropriately
included in the calculation of the transitional impact and
specific assumptions applied to determine the discount rates
for lease are inappropriate.
See note no. 12, 17, 38 to the financial statements
Impairment assessment of unquoted investments
In the absence of a quoted price in an active market, the fair
value of unquoted shares and bonds, especially any
impairment is calculated using valuation techniques which
may take into consideration direct or indirect unobservable
market data and hence require an elevated level of judgment.
See note no. 10 to the financial statements
IT systems and controls
Our audit procedures have a focus on IT systems and controls due
to the pervasive nature and complexity of the IT environment, the
large volume of transactions processed in numerous locations
daily and the reliance on automated and IT dependent manual
controls.
Our areas of audit focus included user access management,
developer access to the production environment and changes to
the IT environment. These are keys to ensuring IT dependent and
application-based controls are operating effectively.
Legal and regulatory matters
We focused on this area because the Bank and its subsidiaries (the
“Group”) operates in a legal and regulatory environment that is
exposed to significant litigation and similar risks arising from
disputes and regulatory proceedings. Such matters are subject to
many uncertainties and the outcome may be difficult to predict.
These uncertainties inherently affect the amount and timing of
potential outflows with respect to the provisions which have been
established and other contingent liabilities.
Overall, the legal provision represents the Group’s and the Bank’s
best estimate for existing legal matters that have a probable and
estimable impact on the Group’s financial position.
Our response to key audit matters
In responding to the identified key audit matter, we completed the following audit
procedures:
Assessed the design and implementation of key controls pertaining to the
determination of the IFRS 16 Leases impact on the financial statements of the
Bank;
Assessed the appropriateness of the discount rates applied in determining lease
liabilities;
Verified the accuracy of the underlying lease data by agreeing to original contract
and checked the accuracy of the IFRS 16 calculations through recalculation of the
expected IFRS 16 adjustment; and
Assessed whether the disclosures within the financial statements are appropriate
in light of the requirements of IFRS.
We have assessed the processes and controls put in place by the Company to
ensure all major investment decisions are undertaken through a proper due
diligence process.
We tested a sample of investments valuation as at 31 December 2020 and
compared our results to the recorded value.
Finally, we assessed the appropriateness and presentation of disclosures against
relevant accounting standards and Bangladesh Bank guidelines.
We tested the design and operating effectiveness of the Bank’s IT access controls
over the information systems that are critical to financial reporting. We tested IT
general controls (logical access, changes management and aspects of IT
operational controls). This included testing that requests for access to systems
were appropriately reviewed and authorized. We tested the Bank’s periodic
review of access rights and reviewed requests of changes to systems for
appropriate approval and authorization. We considered the control environment
relating to various interfaces, configuration and other application layer controls
identified as key to our audit.
We obtained an understanding, evaluated the design and tested the operational
effectiveness of the Bank’s key controls over the legal provision and contingencies
process.
We enquired to those charged with governance to obtain their view on the status
of all significant litigation and regulatory matters.
We enquired of the Bank’s internal legal counsel for all significant litigation and
regulatory matters and inspected internal notes and reports.
We assessed the methodologies on which the provision amounts are based,
recalculated the provisions, and tested the completeness and accuracy of the
underlying information.
We also assessed the Bank’s provisions and contingent liabilities disclosure.
ANNUAL
REPORT 251
2020
 Independent Auditors’ Report

Other information
Management is responsible for the other information. The other information comprises all of the information in the Annual Report other than the
consolidated and separate financial statements and our Auditors’ report thereon. The Annual Report is expected to be made available to us after the
date of this Auditors’ report.

Our opinion on the consolidated and separate financial statements does not cover other information and we do not express any form of assurance
conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Responsibilities of management and those charged with governance for the consolidated and separate financial
statements and internal controls
Management is responsible for the preparation and fair presentation of the consolidated financial statements of the Group and also separate financial
statements of the Bank in accordance with IFRSs as explained in note 2 and 3, and for such internal control as management determines is necessary to
enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. The
Bank Companies Act, 1991 and the Bangladesh Bank Regulations require the Management to ensure effective internal audit, internal control and risk
management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of anti-fraud internal controls and
report to Bangladesh Bank on instances of fraud and forgeries.

In preparing the consolidated and separate financial statements, management is responsible for assessing the Group’s and the Bank’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Group and the Bank or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s and the Bank’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated and separate financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an Auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated and separate financial statements

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Bank’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors’ report to the
related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our Auditors’ report. However, future events or conditions may cause
the Group and the Bank to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and
whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.

ANNUAL
252 REPORT
2020
Independent Auditors’ Report

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.

Report on other Legal and Regulatory Requirements

In accordance with the Companies Act, 1994, the Securities and Exchange Rules 1987, the Bank Companies Act, 1991 and the rules and regulations
issued by Bangladesh Bank, we also report that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our
audit and made due verification thereof;
(ii) to the extent noted during the course of our audit work performed on the basis stated under the Auditors’ Responsibility section in forming
the above opinion on the consolidated financial statements and considering the reports of the Management to Bangladesh Bank on anti-fraud
internal controls and instances of fraud and forgeries as stated under the Management’s Responsibility for the financial statements and
internal control:

(a) internal audit, internal control and risk management arrangements of the Group as disclosed in the financial statements appeared to be
materially adequate;

(b) nothing has come to our attention regarding material instances of forgery or irregularity or administrative error and exception or
anything detrimental committed by employees of the Group and its related entities {other than matters disclosed in these financial
statements};

(iii) Consolidated financial statements of the Bank include two subsidiaries, namely Islami Bank Securities Limited and Islami Bank Capital
Management Limited reflect total assets of BDT 1,417,622 million as at 31 December 2020 and total operating income of BDT 40,299 million
for the year ended 31 December 2020. The results of these subsidiaries have been properly reflected in the Group’s consolidated financial
statements;

(iv) in our opinion, proper books of account as required by law have been kept by the Group and the Bank so far as it appeared from our
examination of those books;

(v) the records and statements submitted by the branches have been properly maintained and consolidated in the financial statements;

(vi) the consolidated balance sheet and consolidated profit and loss account together with the annexed notes dealt with by the report are in
agreement with the books of account and returns;

(vii) the expenditures incurred were for the purpose of the Bank’s business for the year;

(viii) the consolidated financial statements have been drawn up in conformity with prevailing rules, regulations and accounting standards as well
as related guidance issued by Bangladesh Bank;

(ix) adequate provisions have been made for advance and other assets as per DBI letter no: DBI-4/42(7)/2020-346 which are in our opinion,
doubtful of recovery;
(x) the information and explanations required by us have been received and found satisfactory;

(xi) we have reviewed over 80% of the risk weighted assets of the Bank and spent over 9,800 person hours; and

(xii) Capital to Risk-weighted Asset Ratio (CRAR) as required by Bangladesh Bank has been maintained adequately during the year.

Place of issue: Dhaka Hoda Vasi Chowdhury & Co A. Qasem & Co.
Date of issue: 27 April 2021 Chartered Accountants Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Partner Partner
Enrolment no. 137 Enrolment no. 912
DVC No. 2104280137AS204484 DVC No. 2104270912AS141003
ANNUAL
REPORT 253
2020
FINANCIAL STATEMENTS
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Balance Sheet
As at 31 December 2020
31.12.2020 31.12.2019
Particulars Notes
Taka Taka
Property and Assets

Cash in hand 7(a) 213,784,344,840 75,853,653,790

Cash in hand (including foreign currency) 7(a)(i) 18,747,321,125 15,024,007,850
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 7(a)(ii) 195,037,023,715 60,829,645,940

Balance with other banks & financial institutions 8(a) 66,433,733,141 91,425,373,838
In Bangladesh 8(a)(i) 49,886,043,162 71,323,380,899
Outside Bangladesh 8(a)(ii) 16,547,689,979 20,101,992,939

Placement with banks & other financial institutions 9.0 - -

Investments in shares & securities 10(a) 74,419,952,242 54,098,466,625

Government 10(a)(i) 56,103,358,581 40,111,029,770
Others 10(a)(ii) 18,316,593,661 13,987,436,855

Investments 1,030,587,882,333 894,223,206,248

General investments etc. 11.1(a) 975,111,103,912 861,458,730,969
Bills purchased & discounted 11.2(a) 55,476,778,421 32,764,475,279

Fixed assets including premises 12(a) 17,828,047,378 16,199,274,493

Other assets 13(a) 14,568,145,658 10,381,912,393

Non - banking assets - -

Total property and assets 1,417,622,105,592 1,142,181,887,387

Liabilities and Capital

Liabilities

Placement from banks & other financial institutions 14(a) 44,469,318,312 28,849,020,000

Deposits & other accounts 15(a) 1,178,656,793,037 945,833,525,017

Mudaraba savings deposits 392,705,381,804 313,110,479,503
Mudaraba term deposits 431,074,103,835 335,259,771,889
Other mudaraba deposits 245,966,464,269 207,026,042,105
Al- wadeeah current and other deposit accounts 103,950,642,503 83,789,287,905
Bills payable 4,960,200,626 6,647,943,615

Mudaraba bond 16.0 26,000,000,000 21,000,000,000

Mudaraba perpetual bond 3,000,000,000 3,000,000,000
Mudaraba redeemable subordinated bond 16.1 23,000,000,000 18,000,000,000

Other liabilities 17(a) 104,280,862,799 85,444,546,111

Deferred tax liabilities 18(a) 1,605,186,622 1,680,571,950

Total liabilities 1,355,012,160,770 1,082,807,663,078

Capital/shareholders' equity 62,609,944,823 59,374,224,309

Paid - up capital 19.2 16,099,906,680 16,099,906,680
Statutory reserve 21.0 19,735,466,258 18,735,466,258
Other reserves 22.0 24,167,518,265 22,206,310,080
Retained earnings 40(a) 2,606,778,640 2,332,280,365
Non-controlling interest 40(b) 274,980 260,926
Total liabilities & shareholders' equity 1,417,622,105,592 1,142,181,887,387

ANNUAL
REPORT 255
2020
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Balance Sheet
As at 31 December 2020
31.12.2020 31.12.2019
Particulars Notes
Taka Taka
Off-balance sheet items
Contingent liabilities

Acceptances & endorsements - -

Letters of guarantee 23.0 30,293,446,219 34,566,514,299
Irrevocable letters of credit (including back to back bills) 128,591,841,263 113,823,281,324
Bills for collection 49,194,701,777 26,285,503,243
Other contingent liabilities 8,174,045 959,400
Total 208,088,163,304 174,676,258,266

Other commitments

Documentary credits, short term and trade related transactions - -

Forward assets purchased and forward deposits placed - -
Undrawn note issuance, revolving and underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -

Total off-balance sheet items including contingent liabilities 208,088,163,304 174,676,258,266

The annexed notes form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

This is the consolidated balance sheet referred to in our separate report of even date.

Hoda Vasi Chowdhury & Co. A. Qasem & Co.

Chartered Accountants Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Enrolment no: 137 Enrolment no: 912
DVC No: 2104280137AS204484 DVC No: 2104270912AS141003

Dhaka; 27 April 2021

ANNUAL
256 REPORT
2020
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Profit & Loss Account
For the year ended 31 December 2020
31.12.2020 31.12.2019
Particulars Notes
Taka Taka
Operating income
Investment income 24(a) 74,173,020,245 75,612,499,933
Profit paid on mudaraba deposits 25(a) (44,769,787,223) (44,927,564,177)
Net investment income 29,403,233,022 30,684,935,756
Income from investments in shares & securities 26(a) 2,228,472,251 1,809,246,731
Commission, exchange & brokerage income 27(a) 4,741,303,927 6,194,591,221
Other operating income 28(a) 3,925,923,356 5,102,524,416
Total operating income 40,298,932,555 43,791,298,124

Operating expenses
Salary & allowances 29(a) 16,617,387,626 15,123,405,576
Rent, taxes, insurances, electricity etc. 30(a) 1,238,044,237 1,519,647,957
Legal expenses 31(a) 10,186,955 16,823,524
Postage, stamps and telecommunication etc. 32(a) 75,182,076 59,116,769
Stationery, printing and advertisement etc. 33(a) 257,185,786 256,174,010
Chief executive's salary & fees 34.0 14,320,000 14,320,000
Directors' fees & expenses 35(a) 7,075,815 20,657,363
Shari'ah supervisory committee's fees & expenses 36.0 2,187,874 3,147,721
Auditors' fees 37(a) 3,599,500 4,509,500
Depreciation and repair to bank's assets 38(a) 1,491,001,398 969,566,980
Zakat expenses 17.8 817,497,629 719,191,449
Other expenses 39(a) 4,438,932,451 2,621,818,723
Total operating expenses 24,972,601,348 21,328,379,572
Profit/ (loss) before provision 15,326,331,207 22,462,918,552
Provision for investments & off- balance sheet exposures 17.1.4 4,407,811,852 7,335,195,972
Provision for diminution in value of investments in shares 17.2(a) (540,713,755) 654,521,588
Other provisions 17.4 365,868,381 63,580,044
Total provision 4,232,966,478 8,053,297,604

Total profit/(loss) before taxes 11,093,364,729 14,409,620,948

Provision for taxation for the period 6,297,844,342 8,928,979,426

Current tax 17.7(a) 6,340,160,339 8,902,530,645

Deferred tax 18(b) (42,315,997) 26,448,781
Net profit/ (loss) after tax 4,795,520,387 5,480,641,522
Net profit after tax attributable to: 4,795,520,387 5,480,641,522
Equity holders of IBBL 4,795,506,333 5,480,630,861
Non-controlling interest 40(b) 14,054 10,661

Retained earnings from previous year 2,332,280,365 2,180,043,654

Add: Net profit after tax (attributable to equity holders of IBBL) 4,795,506,333 5,480,630,861
Add: Excess depreciation on revalued amount of building transferred from assets revaluation reserve to retained earnings 22.2 89,615,729 91,913,571
Profit available for appropriation 7,217,402,427 7,752,588,086

Appropriation: 7,217,402,427 7,752,588,086

Statutory reserve 21.0 1,000,000,000 1,000,000,000
General reserve 22.1 2,000,633,119 2,810,317,053
Dividend (previous year) 40.0 1,609,990,668 1,609,990,668
Retained earnings 40(a) 2,606,778,640 2,332,280,365

Consolidated earnings per share 42(a) 2.98 3.40

The annexed notes form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

This is the consolidated profit & loss account referred to in our separate report of even date. A. Qasem & Co.
Hoda Vasi Chowdhury & Co. Chartered Accountants
Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Enrolment no: 137 Enrolment no: 912
Dhaka; 27 April 2021 DVC No: 2104280137AS204484 DVC No: 2104270912AS141003

ANNUAL
REPORT 257
2020
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Cash Flow Statement
For the year ended 31 December 2020
2020 2019
Particulars Notes
Taka Taka
Cash flows from operating activities
Investment income 67,173,020,245 68,216,045,165
Profit paid on mudaraba deposits (46,410,487,873) (41,388,448,320)
Income/ dividend receipt from investments in shares & securities 2,298,539,043 881,761,005
Fees & commission receipt in cash 4,741,303,927 6,194,591,221
Recovery from written off investments 114,501,741 82,128,286
Payments to employees (16,426,171,108) (15,874,015,278)
Cash payments to suppliers (334,206,411) (376,966,397)
Income tax paid (6,668,335,889) (7,231,569,815)
Receipts from other operating activities 4,423,663,837 5,143,694,109
Payments for other operating activities (5,743,871,352) (4,207,654,831)
(i) Operating profit before changes in operating assets 3,167,956,159 11,439,565,145

Changes in operating assets and liabilities

Increase/(decrease) of statutory deposits - -
(Increase)/decrease of net trading securities (126,856,928) (4,870,064)
(Increase)/decrease of placement to other banks - -
(Increase)/decrease of investments to customers (131,574,676,085) (88,463,230,032)
(Increase)/decrease of other assets (4,235,240,052) (783,846,900)
Increase/(decrease) of placement from other banks 15,620,298,312 (8,965,340,564)
Increase/(decrease) of deposits from other banks 32,613,503 84,265,490
Increase/(decrease) of deposits received from customers 232,405,138,571 123,249,581,562
Increase/(decrease) of other liabilities account of customers - -
Increase/(decrease) of trading liabilities - -
Increase/(decrease) of other liabilities 17,444,381,121 10,230,339,659
(ii) Cash flows from operating assets and liabilities 129,565,658,442 35,346,899,151
Net cash flows from operating activities (A)=(i+ii) 132,733,614,601 46,786,464,296

Cash flows from investing activities

Proceeds from sale of securities/BGIIB/Sukuk (13,567,446,404) (8,689,414,296)
Payment for purchase of securities/BGIIB/Sukuk (6,749,618,542) (4,450,954,914)
Placement to Islamic Refinance Fund Account - -
Payment for purchase of securities/membership - -
Purchase/sale of property, plants & equipments (2,879,255,129) (1,615,835,762)
Purchase/sale of subsidiaries - -
Net Cash flows from investing activities (B) (23,196,320,075) (14,756,204,972)

Cash flows from financing activities

Receipts from issue of debt instruments 6,000,000,000 6,000,000,000
Payment for redemption of debt instruments (1,000,000,000) -
Receipts from issuing ordinary share/ right share - -
Dividend paid in cash (1,609,990,668) (1,609,990,668)
Net cash flows from financing activities (C) 3,390,009,332 4,390,009,332

Net increase/(decrease) in cash (A+B+C) 112,927,303,857 36,420,268,656

Add/(less): effects of exchange rate changes on cash & cash equivalent 11,746,496 (4,153,635)
Add: cash & cash equivalents at beginning of the year 167,279,027,628 130,862,912,607
Cash & cash equivalents at the end of the year 45(a) 280,218,077,981 167,279,027,628

The annexed notes form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

This is the consolidated cash flow statement referred to in our separate report of even date.
Hoda Vasi Chowdhury & Co. A. Qasem & Co.
Chartered Accountants Chartered Accountants

Showkat Hossain, FCA

Enrolment no: 137 Mohammed Hamidul Islam, FCA
DVC No: 2104280137AS204484 Enrolment no: 912
DVC No: 2104270912AS141003
Dhaka; 27 April 2021

ANNUAL
258 REPORT
2020
 Islami Bank Bangladesh Limited and its Subsidiaries
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
(Amount in Taka)
Assets Revaluation
Share Statutory General/ other Retained Non-controlling
Particulars Paid-up capital revaluation reserve of Total
premium reserve reserves (*) earnings interest
reserve securities
1 2 3 4 5 6 7 8 9 10(2+3+4+5+6+7+8+9)
Balance as at 01 January 2020 16,099,906,680 1,989,633 18,735,466,258 12,955,128,557 9,181,915,090 67,276,800 2,332,280,365 260,926 59,374,224,309
Deferred tax on revaluation surplus - - - - - (537,600) - - (537,600)
Deferred tax impact on excess depreciation - - - - 33,605,899 - 33,605,899
Depreciation adjustment on revalued fixed assets - - - - (89,615,729) - 89,615,729 - -
Surplus/ (deficit) on account of revaluation - - - - - 5,376,000 - - 5,376,000
Currency translation differences - - - 11,746,496 - - - 11,746,495
Net gain and losses not recognized in the income statement - - - - - - - - -
Net profit for the period - - - - - - 4,795,506,333 14,054 4,795,520,387
Transfer to (from) reserve - - 1,000,000,000 2,000,633,119 - - (3,000,633,119) - -
Dividend: - - - - - - -
Bonus shares - - - - - - - - -
Cash dividend - - - - - - (1,609,990,668) - (1,609,990,668)
Issue of share capital - - - - - - - - -
Total shareholders' equity as on 31 December 2020 16,099,906,680 1,989,633 19,735,466,258 14,967,508,172 9,125,905,260 72,115,200 2,606,778,640 274,980 62,609,944,823
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
Add: Mudaraba redeemable subordinated bond - - - - - - - - 23,000,000,000
Add: General provision for unclassified investments and off- balance sheet items (Note-3.14.7) - - - 11,820,648,293 - - - - 11,820,648,293
Less: Excess Tier-II Capital - - - - - - - - (1,864,556,479)
Adjustment for intangible assets - - - (214,558,302) - - - - (214,558,302)
Adjustment for currency translation differences - - - (18,376,319) - - - (18,376,319)
Less: Assets revaluation reserve (Note-3.14.4) - - - - (9,125,905,260) - - - (9,125,905,260)
Less: Revaluation reserve of securities (Note-3.14.5) - - - - (72,115,200) - - (72,115,200)
Total equity as on 31 December 2020 16,099,906,680 1,989,633 19,735,466,258 26,555,221,844 - - 2,606,778,640 274,980 89,135,081,556

(*)Note : General / other reserves

Particulars 01.01.2020 01.01.2019
General reserve 12,916,498,734 10,106,181,681
Dividend equalization account 32,000,000 32,000,000
Currency translation differences 6,629,823 10,783,458

2020
REPORT
ANNUAL
Total 12,955,128,557 10,148,965,139

259
 260
Islami Bank Bangladesh Limited and its Subsidiaries

2020
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019

REPORT
ANNUAL
(Amount in Taka)
Assets Revaluation
Share Statutory General/ other Retained Non-controlling
Particulars Paid-up capital revaluation reserve of Total
premium reserve reserves (*) earnings interest
reserve securities
1 2 3 4 5 6 7 8 9 10(2+3+4+5+6+7+8+9)
Balance as at 01 January 2019 16,099,906,680 1,989,633 17,735,466,258 10,148,965,139 9,239,361,072 60,624,000 2,180,043,654 250,265 55,466,606,701
Deferred tax on revaluation surplus - - - - - (739,200) - - (739,200)
Deferred tax impact on excess depreciation - - - - 34,467,589 - - - 34,467,589
Depreciation adjustment on revalued fixed assets - - - - (91,913,571) - 91,913,571 - -
Surplus/ (deficit) on account of revaluation - - - - - 7,392,000 - - 7,392,000
Currency translation differences - - - (4,153,635) - - - (4,153,635)
Net gain and losses not recognized in the income statement - - - - - - - - -
Net profit for the period - - - - - - 5,480,630,861 10,661 5,480,641,522
Transfer to (from) reserve - - 1,000,000,000 2,810,317,053 - - (3,810,317,053) - -
Dividend: - - - - - - -
Bonus shares - - - - - - - - -
Cash dividend - - - - - - (1,609,990,668) - (1,609,990,668)
Issue of share capital - - - - - - - - -
Total shareholders' equity as on 31 December 2019 16,099,906,680 1,989,633 18,735,466,258 12,955,128,557 9,181,915,090 67,276,800 2,332,280,365 260,926 59,374,224,309
Add: Mudaraba perpetual bond - - - - - - - - 3,000,000,000
Add: Mudaraba redeemable subordinated bond - - - - - - - - 18,000,000,000
Add: General provision for unclassified investments and - - - 8,858,401,318 - - - - 8,858,401,318
off- balance sheet items (Note-3.14.7)
Adjustment for intangible assets - - - (174,551,449) - - - - (174,551,449)
Adjustment for currency translation differences - - - (6,629,823) - - - - (6,629,823)
Less: Assets revaluation reserve (Note-3.14.4) - - - - (9,181,915,090) - - - (9,181,915,090)
Less: Revaluation reserve of securities (Note-3.14.5) - - - - - (67,276,800) - - (67,276,800)
Total equity as on 31 December 2019 16,099,906,680 1,989,633 18,735,466,258 21,632,348,603 - - 2,332,280,365 260,926 79,802,252,465

Chairman Director Director Managing Director & CEO

This is the consolidated statement of changes in equity referred to in our separate report of even date.
Hoda Vasi Chowdhury & Co. A. Qasem & Co.
Chartered Accountants Chartered Accountants

Showkat Hossain, FCA

Enrolment no: 137 Mohammed Hamidul Islam, FCA
DVC No: 2104280137AS204484 Enrolment no: 912
Dhaka; 27 April 2021 DVC No: 2104270912AS141003
 Islami Bank Bangladesh Limited
Balance Sheet
As at 31 December 2020
31.12.2020 31.12.2019
Particulars Notes
Taka Taka

Property and Assets

Cash in hand 7.0 213,784,327,061 75,853,433,326

Cash in hand (including foreign currency) 7.1 18,747,303,346 15,023,787,386
Balance with Bangladesh Bank & its agent bank(s) (including foreigncurrency) 7.2 195,037,023,715 60,829,645,940

Balance with other banks & financial institutions 8.0 61,432,799,230 86,136,492,545
In Bangladesh 8.i 44,885,109,251 66,034,499,606
Outside Bangladesh 8.ii 16,547,689,979 20,101,992,939

Placement with banks & other financial institutions 9.0 - -

Investments in shares & securities 10.0 74,107,431,899 54,137,642,576

Government 10.1 56,103,358,581 40,111,029,770
Others 10.2 18,004,073,318 14,026,612,806

Investments 11.0 1,035,287,882,333 899,013,206,248

General investments etc. 11.1 979,811,103,912 866,248,730,969
Bills purchased & discounted 11.2 55,476,778,421 32,764,475,279

Fixed assets including premises 12.0 17,809,898,730 16,186,646,562

Other assets 13.0 14,406,161,840 10,165,550,110

Non - banking assets - -

Total property and assets 1,416,828,501,093 1,141,492,971,367

Liabilities and Capital

Liabilities

Placement from banks & other financial institutions 14.0 44,469,318,312 28,849,020,000

Deposits & other accounts 15.0 1,179,476,476,597 946,216,966,209

Mudaraba savings deposits 15.1 392,750,096,373 313,114,645,635
Mudaraba term deposits 431,774,827,124 335,626,192,223
Other mudaraba deposits 15.2 245,976,592,728 207,034,165,684
Al- wadeeah current and other deposit accounts 15.3 104,014,759,747 83,794,019,052
Bills payable 15.4 4,960,200,626 6,647,943,615

Mudaraba bond 16.0 26,000,000,000 21,000,000,000

Mudaraba perpetual bond 3,000,000,000 3,000,000,000
Mudaraba redeemable subordinated bond 16.1 23,000,000,000 18,000,000,000

Other liabilities 17.0 103,661,938,774 85,092,336,112

Deferred tax liabilities 18.0 1,607,885,540 1,682,975,360

Total liabilities 1,355,215,619,223 1,082,841,297,681

Capital/ shareholders' equity 61,612,881,871 58,651,673,686

Paid - up capital 19.2 16,099,906,680 16,099,906,680
Statutory reserve 21.0 19,735,466,258 18,735,466,258
Other reserves 22.0 24,167,518,265 22,206,310,080
Retained Earnings 40.0 1,609,990,668 1,609,990,668
Total liabilities & shareholders' equity 1,416,828,501,093 1,141,492,971,367

ANNUAL
REPORT 261
2020
 Islami Bank Bangladesh Limited
Balance Sheet
As at 31 December 2020
31.12.2020 31.12.2019
Particulars Notes
Taka Taka
Off-balance sheet items
Contingent liabilities

Acceptances & endorsements - -

Letters of guarantee 23.0 30,293,446,219 34,566,514,299
Irrevocable letters of credit (including back to back bills) 128,591,841,263 113,823,281,324
Bills for collection 49,194,701,777 26,285,503,243
Other contingent liabilities 8,174,045 959,400
Total 208,088,163,304 174,676,258,266

Other commitments

Documentary credits, short term and trade related transactions - -

Forward assets purchased and forward deposits placed - -
Undrawn note issuance, revolving and underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -

Total off-balance sheet items including contingent liabilities 208,088,163,304 174,676,258,266

The annexed notes form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

This is the balance sheet referred to in our separate report of even date.

Hoda Vasi Chowdhury & Co. A. Qasem & Co.

Chartered Accountants Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Enrolment no: 137 Enrolment no: 912
DVC No: 2104280137AS204484 DVC No: 2104270912AS141003

Dhaka; 27 April 2021

ANNUAL
262 REPORT
2020
 Islami Bank Bangladesh Limited
Profit & Loss Account
For the year ended 31 December 2020
2020 2019
Particulars Notes
Taka Taka
Operating income
Investment income 24.0 74,305,334,714 75,748,836,764
Profit paid on mudaraba deposits 25.0 (44,787,005,760) (44,941,325,781)
Net investment income 29,518,328,954 30,807,510,983

Income from investments in shares & securities 26.0 1,992,608,470 1,626,837,630

Commission, exchange & brokerage income 27.0 4,720,903,804 6,177,483,389
Other operating income 28.0 3,474,540,005 4,577,955,123
Total operating income 39,706,381,232 43,189,787,125

Operating expenses
Salary & allowances 29.0 16,576,577,017 15,091,747,421
Rent, taxes, insurances, electricity etc. 30.0 1,232,312,541 1,513,496,044
Legal expenses 31.0 9,873,909 16,823,524
Postage, stamps and telecommunication etc. 32.0 74,842,508 58,934,588
Stationery, printing and advertisement etc. 33.0 256,441,158 255,760,614
Chief executive's salary & fees 34.0 14,320,000 14,320,000
Directors' fees & expenses 35.0 6,207,975 19,818,963
Shari'ah supervisory committee's fees & expenses 36.0 2,187,874 3,147,721
Auditors' fees 37.0 3,450,000 4,360,000
Depreciation and repair to bank's assets 38.0 1,486,354,465 966,181,093
Zakat expenses 17.8 817,497,629 719,191,449
Other expenses 39.0 4,428,094,762 2,612,392,077
Total operating expenses 24,908,159,839 21,276,173,494
Profit/ (loss) before provision 14,798,221,393 21,913,613,631
Provision for investments & off- balance sheet exposures 17.1.4 4,407,811,852 7,335,195,972
Provision for diminution in value of investments in shares 17.2 (664,550,012) 415,085,114
Other provisions 17.4 365,868,381 63,580,044
Total provision 4,109,130,221 7,813,861,130
Total profit/(loss) before taxes 10,689,091,172 14,099,752,501
Provision for taxation for the period 6,168,083,114 8,771,358,351
Current tax 17.7.1 6,210,104,635 8,744,910,665
Deferred tax expense/(income) 18.0 (42,021,521) 26,447,686
Net profit/(loss) after tax 4,521,008,058 5,328,394,150
Retained earnings from previous year 1,609,990,668 1,609,990,668
Add: Net profit after tax 4,521,008,058 5,328,394,150
Add: Excess depreciation on revalued amount of building transferred from assets 22.2 89,615,729 91,913,571
revaluation reserve to retained earnings
Profit available for appropriation 6,220,614,455 7,030,298,389
Appropriation: 6,220,614,455 7,030,298,389
21.0 1,000,000,000 1,000,000,000
Statutory reserve 22.1 2,000,633,119 2,810,317,053
General reserve 40.0 1,609,990,668 1,609,990,668
Dividend (previous year) 40.0 1,609,990,668 1,609,990,668
Retained earnings
42.0 2.81 3.31
Earnings per share (EPS)
The annexed notes form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

This is the profit & loss account referred to in our separate report of even date.
Hoda Vasi Chowdhury & Co. A. Qasem & Co.
Chartered Accountants Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Enrolment no: 137 Enrolment no: 912
DVC No: 2104280137AS204484 DVC No: 2104270912AS141003
Dhaka; 27 April 2021
ANNUAL
REPORT 263
2020
 Islami Bank Bangladesh Limited
Cash Flow Statement
For the year ended 31 December 2020
2020 2019
Particulars Notes
Taka Taka
Cash flows from operating activities
Investment income 67,305,334,714 68,352,381,996
Profit paid on mudaraba deposits (46,427,706,410) (41,402,209,924)
Income/ dividend receipt from investments in shares & securities 2,077,194,030 699,631,725
Fees & commission receipt in cash 4,720,903,804 6,177,483,389
Recovery from written off investments 114,501,741 82,128,286
Payments to employees (16,393,543,303) (15,843,682,501)
Cash payments to suppliers (333,689,921) (376,553,001)
Income tax paid (6,519,324,018) (7,078,331,739)
Receipts from other operating activities 3,956,501,836 4,618,809,908
Payments for other operating activities (5,715,961,189) (4,189,545,726)
(i) Operating profit before changes in operating assets 2,784,211,283 11,040,112,413

Changes in operating assets and liabilities

Increase/(decrease) of statutory deposits - -
(Increase)/decrease of net trading securities - -
(Increase)/decrease of placement to other banks - -
(Increase)/decrease of investments to customers (136,274,676,085) (93,253,230,032)
(Increase)/decrease of other assets (4,240,611,730) (791,900,171)
Increase/(decrease) of placement from other banks 15,620,298,312 (8,965,340,564)
Increase/(decrease) of deposits from other banks 33,580,303 84,269,990
Increase/(decrease) of deposits received from customers 233,225,930,085 123,634,130,708
Increase/(decrease) of other liabilities account of customers - -
Increase/(decrease) of trading liabilities - -
Increase/(decrease) of other liabilities 21,516,635,682 14,650,031,112
(ii) Cash flows from operating assets and liabilities 129,881,156,567 35,357,961,043
Net cash flows from operating activities (A)=(i+ii) 132,665,367,850 46,398,073,456

Cash flows from investing activities

Proceeds from sale of securities/BGIIB/Sukuk (19,969,789,323) (12,526,987,918)
Payment for purchase of securities/BGIIB/Sukuk - -
Placement to Islamic Refinance Fund Account - -
Payment for purchase of securities/membership - -
Purchase/sale of property, plants & equipments (2,870,133,934) (1,605,920,192)
Purchase/sale of subsidiaries - -
Net cash flows from investing activities (B) (22,839,923,257) (14,132,908,110)

Cash flows from financing activities

Receipts from issue of debt instruments 6,000,000,000 6,000,000,000
Payment for redemption of debt instruments (1,000,000,000) -
Receipts from issuing ordinary share/ right share - -
Dividend paid in cash (1,609,990,668) (1,609,990,668)
Net cash flows from financing activities (C) 3,390,009,332 4,390,009,332
Net increase/(decrease) in cash (A+B+C) 113,215,453,925 36,655,174,678
Add/(Less): effects of exchange rate changes on cash & cash equivalent 11,746,496 (4,153,635)
Add: cash & cash equivalents at beginning of the year 161,989,925,871 125,338,904,828
Cash & cash equivalents at the end of the year 45.0 275,217,126,291 161,989,925,871

The annexed notes form an integral part of these financial statements.

Chairman Director Director Managing Director & CEO

This is the cash flow statement referred to in our separate report of even date.
Hoda Vasi Chowdhury & Co. A. Qasem & Co.
Chartered Accountants Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Enrolment no: 137 Enrolment no: 912
DVC No: 2104280137AS204484 DVC No: 2104270912AS141003
Dhaka; 27 April 2021

ANNUAL
264 REPORT
2020
 Islami Bank Bangladesh Limited
Statement of Changes in Equity
For the year ended 31 December 2020
(Amount in Taka)
Assets Revaluation
Share Statutory General/ other revaluation reserve of Retained
Particulars Paid-up capital Total
premium reserve reserves (*) reserve securities earnings

1 2 3 4 5 6 7 8 9 (2+3+ 4+5+6+7+ 8)
Balance as at 01 January 2020 16,099,906,680 1,989,633 18,735,466,258 12,955,128,557 9,181,915,090 67,276,800 1,609,990,668 58,651,673,686
Deferred tax on revaluation surplus - - - - - (537,600) - (537,600)
Deferred tax impact on excess depreciation - - - - 33,605,899 - - 33,605,899
Depreciation adjustment on revalued fixed assets - - - - (89,615,729) - 89,615,729 -
Surplus/ (deficit) on account of revaluation - - - - - 5,376,000 - 5,376,000
Currency translation differences - - - 11,746,496 - - - 11,746,495
Net gain and losses not recognized in the income statement - - - - - - - -
Net profit for the period - - - - - - 4,521,008,058 4,521,008,058
Transfer to (from) reserve - - 1,000,000,000 2,000,633,119 - - (3,000,633,119) -
Dividend: -
Bonus shares - - - - - - - -
Cash dividend - - - - - (1,609,990,668) (1,609,990,668)
Issue of share capital - - - - - - - -
Total shareholders' equity as on 31 December 2020 16,099,906,680 1,989,633 19,735,466,258 14,967,508,172 9,125,905,260 72,115,200 1,609,990,668 61,612,881,871
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
Add: Mudaraba redeemable subordinated bond - - - - - - - 23,000,000,000
Add: General provision for unclassified investments and off- balance sheet items (Note-3.14.7) - - - 11,820,648,293 - - - 11,820,648,293
Less: Excess Tier-II Capital - - - - - - - (2,749,850,344)
Adjustment for intangible assets - - (214,558,302) - - - (214,558,302)
Adjustment for currency translation differences - - - (18,376,319) - - - (18,376,319)
Less: Assets revaluation reserve (Note-3.14.4) - - - - (9,125,905,260) - - (9,125,905,260)
Less: Revaluation reserve of securities (Note-3.14.5) - - - - - (72,115,200) - (72,115,200)
Total equity as on 31 December 2020 16,099,906,680 1,989,633 19,735,466,258 26,555,221,844 - - 1,609,990,668 87,252,724,739

(*)Note : General / other reserves

Particulars 01.01.2020 01.01.2019

General reserve 12,916,498,734 10,106,181,681
Dividend equalization account 32,000,000 32,000,000
Currency translation differences 6,629,823 10,783,458
Total 12,955,128,557 10,148,965,139

2020
REPORT
ANNUAL
265
 266
Islami Bank Bangladesh Limited

2020
Statement of Changes in Equity
For the year ended 31 December 2019

REPORT
ANNUAL
(Amount in Taka)
Assets Revaluation
Share Statutory General/ other Retained
Particulars Paid-up capital revaluation reserve of Total
premium reserve reserves (*) earnings
reserve securities
1 2 3 4 5 6 7 8 9 (2+3+ 4+5+6+7+ 8)
Balance as at 01 January 2019 16,099,906,680 1,989,633 17,735,466,258 10,148,965,139 9,239,361,072 60,624,000 1,609,990,668 54,896,303,450
Deferred tax on revaluation surplus - - - - - (739,200) - (739,200)
Deferred tax impact on excess depreciation - - - - 34,467,589 - - 34,467,589
Depreciation adjustment on revalued fixed assets - - - - (91,913,571) - 91,913,571 -
Surplus/ (deficit) on account of revaluation - - - - - 7,392,000 - 7,392,000
Currency translation differences - - - (4,153,635) - - - (4,153,635)
Net gain and losses not recognized in the income statement - - - - - - - -
Net profit for the period - - - - - - 5,328,394,150 5,328,394,150
Transfer to (from) reserve - - 1,000,000,000 2,810,317,053 - - (3,810,317,053) -
Dividend: -
Bonus shares - - - - - - - -
Cash dividend - - - - - (1,609,990,668) (1,609,990,668)
Issue of share capital - - - - - - - -
Total shareholders' equity as on 31 December 2019 16,099,906,680 1,989,633 18,735,466,258 12,955,128,557 9,181,915,090 67,276,800 1,609,990,668 58,651,673,686
Add: Mudaraba perpetual bond - - - - - - - 3,000,000,000
Add: Mudaraba redeemable subordinated bond - - - - - - - 18,000,000,000
Add: General provision for unclassified investments - - - 8,858,401,318 - - - 8,858,401,318
and off- balance sheet items (Note-3.14.7)
Adjustment for intangible assets (174,551,449) (174,551,449)
Adjustment for currency translation differences - - - (6,629,823) - - - (6,629,823)
Less: Assets revaluation reserve (Note-3.14.4) - - - - (9,181,915,090) - - (9,181,915,090)
Less: Revaluation reserve of securities (Note-3.14.5) - - - - - (67,276,800) - (67,276,800)
Total equity as on 31 December 2019 16,099,906,680 1,989,633 18,735,466,258 21,632,348,603 - - 1,609,990,668 79,079,701,842

Chairman Director Director Managing Director & CEO

This is the statement of changes in equity referred to in our separate report of even date.
Hoda Vasi Chowdhury & Co. A. Qasem & Co.
Chartered Accountants Chartered Accountants

Showkat Hossain, FCA Mohammed Hamidul Islam, FCA

Enrolment no: 137 Enrolment no: 912
DVC No: 2104280137AS204484 DVC No: 2104270912AS141003
Dhaka; 27 April 2021
 Islami Bank Bangladesh Limited
Liquidity Statement
Assets & Liabilities Analysis
As at 31 December 2020
(Amount in Taka)
More than 5
Particulars Up to 1 Month 1 - 3 Months 3 - 12 Months 1 - 5 years Total 31.12.2020 Total 31.12.2019
years
7=(2 + 3 + 4 + 5+ 6)
1 2 3 4 5 6 8

ASSETS
Cash in hand 169,338,011,061 - - - 44,446,316,000 213,784,327,061 75,853,433,326
Balance with other banks & financial institutions (Note-8.2) 35,607,755,634 24,275,022,345 1,550,021,251 - - 61,432,799,230 86,136,492,545
Placement with Banks & other Financial Institutions - - - - - - -
Investments (in shares & securities) (Note-10.4) 2,377,616,738 974,513,861 773,800,000 6,211,605,650 63,769,895,650 74,107,431,899 54,137,642,576
General investments etc. (Note-11.1.1) 132,274,413,831 220,457,356,994 274,347,564,022 253,770,911,266 98,960,857,799 979,811,103,912 866,248,730,969
Bills purchased & discounted (Note-11.2.1) 18,307,336,788 17,752,569,095 19,416,872,538 - - 55,476,778,421 32,764,475,279
Fixed assets including premises (land & building), furniture - - 765,845,654 2,983,514,657 14,060,538,419 17,809,898,730 16,186,646,562
and fixtures (Note-12.3)
Other assets (Note-13.1) 1,753,163,297 5,713,069,864 1,975,073,871 4,765,162,984 199,691,824 14,406,161,840 10,165,550,110
Non - banking assets - - - - - - -
Total Assets 359,658,297,349 269,172,532,159 298,829,177,337 267,731,194,557 221,437,299,692 1,416,828,501,093 1,141,492,971,367
LIABILITIES
Placement from banks & other financial institutions 9,709,645,800 22,294,025,160 12,465,647,352 - - 44,469,318,312 28,849,020,000
Deposits (Note-15.5) 211,065,765,237 228,824,879,530 348,084,820,359 256,448,863,067 135,052,148,404 1,179,476,597 946,291,525,243
Other accounts - - - - - - -
Provision & other liabilities (Note-17.10) 2,082,619,318 10,413,096,591 8,330,477,273 8,671,154,294 74,164,591,298 103,661,938,774 85,017,777,078
Deferred tax liability/(assets) - - - - 1,607,885,540 1,607,885,540 1,682,975,360
Mudaraba perpetual bond - - - - 3,000,000,000 3,000,000,000 3,000,000,000
Mudaraba redeemable subordinated bond - - 2,400,000,000 17,000,000,000 3,600,000,000 23,000,000,000 18,000,000,000
Total Liabilities 222,858,030,355 261,532,001,281 371,280,944,984 282,120,017,361 217,424,625,242 1,355,215,619,223 1,082,841,297,681
Net Liquidity Gap 136,800,266,994 7,640,530,879 (72,451,767,647) (14,388,822,804) 4,012,674,451 61,612,881,871 58,651,673,686

Chairman Director Director Managing Director & CEO

This is the liquidity statement referred to in our separate report of even date.
Hoda Vasi Chowdhury & Co. A. Qasem & Co.
Chartered Accountants Chartered Accountants

2020
REPORT
ANNUAL
Showkat Hossain, FCA Mohammed Hamidul Islam, FCA
Enrolment no: 137 Enrolment no: 912
DVC No: 2104280137AS204484 DVC No: 2104270912AS141003

267
Dhaka; 27 April 2021
 Islami Bank Bangladesh Limited and its Subsidiaries
Notes to the financial statements
As at and for the year ended 31 December 2020
1.0 The Bank and its activities

1.1 Introduction
Islami Bank Bangladesh Limited [IBBL] (hereinafter referred to as "the Bank") was established as a public limited banking company in Bangladesh in
1983 as the first Shari’ah based scheduled commercial bank in the South East Asia. Naturally, its modus operandi is substantially different from those of
other conventional commercial banks. The Bank conducts its business on the Shari'ah principles of Mudaraba, Musharaka, Bai-Murabaha, Bai-Muajjal,
Hire Purchase under Shirkatul Melk, Bai-Salam, Bai-as-Sarf and Ujarah etc. There is a Shari'ah Supervisory Committee in the Bank which ensures that
the activities of the Bank are being conducted on the precepts of Islam.

The shares of the Bank are listed with both Dhaka Stock Exchange (DSE) Limited and Chittagong Stock Exchange (CSE) Limited. The Bank carries out
its business activities through its Head Office in Dhaka, 16 Zonal Offices, 373 Branches including 61 Authorised Dealer (AD) Branches, 162 Sub
Branches, 2,273 Agent Banking Outlets and 3 Off-shore Banking Units (OBUs) in Bangladesh. The Principal place of business is the Registered Office of
the Bank situated at Islami Bank Tower, 40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh. These financial statements as at and for the year
ended 31 December 2020 include the consolidated and separate financial statements of the Bank. The consolidated financial statements comprise the
financial statements of the Bank and its subsidiaries (mentioned in Note - 1.4, together referred to as "the Companies"). The current number of
employees are 18,621 (2019: 16,807).

1.2 Nature of business/ Principal activities of the Bank

1.2.1 Commercial banking services

All kinds of commercial banking services are provided by the Bank to the customers following the principles of Islamic Shari’ah, the provisions of the
Bank Companies Act, 1991 as amended, Bangladesh Bank’s directives and directives of other regulatory authorities.

1.2.2 Islamic micro-finance

Islamic micro-finance represents micro-finance of the Islamic finance industry. Under Islamic micro-finance, major focus is given on improvement of
living standard of poor people. The projects are closely monitored so that the members are really benefited. The Bank provides this services under the
umbrella of Rural Development Scheme (RDS) and Urban Poor Development Scheme (UPDS).

1.2.3 Mobile financial services -"mCash"

The bank has launched mobile financial services on 27 December 2012 under the name "Islami Bank mCash" as per Bangladesh Bank approval
(reference no. DCMPS/PSD/37/(W)/2012-321 dated 14 June 2012). Islami Bank mCash offers different services through Mobile phone that include
deposit and withdrawal of cash money, fund transfer from one account to another, receiving remittance from abroad, knowing account balance and
mini-statement, giving and receiving salary, mobile recharge and payment of utility bill, merchant bill payment etc.

1.3 Off-shore banking unit (OBU)

Bangladesh Bank has approved the operation of Off-Shore Banking Unit (OBU) of Islami Bank Bangladesh Limited located at Head Office Complex
Branch- Dhaka, Uttara Branch-Dhaka and Agrabad Branch-Chittagong through letter no. BRPD (P-3)744(111)/2010-1032 dated 28 March, 2010. The
Bank commenced the operation of its Off-shore Banking Unit from 08.02.2011 at Head Office Complex Branch, Dhaka, from 27.09.2011 at Agrabad
Branch, Chittagong and from 01.06.2015 at Uttara Branch, Dhaka. Due to having different functional currency (Note 2.4), the operation of OBU has
been considered as "foreign operation" and accordingly relevant financial reporting standards have been applied consistently that mentioned in note
3.15.3. The financial statements of the OBU are included in the separate financial statements of the Bank and eventually in the consolidated financial
statements. The separate financial statements of OBU are shown in the functional currency (i.e. USD) as well as the presentation currency i.e. BDT of
the Bank (i.e. BDT) in Annexure - F.

1.4 Subsidiaries of the Bank

1.4.1 Islami Bank Securities Limited (IBSL)

"As per Bangladesh Securities and Exchange Commission's (BSEC) Letter No. SEC/Reg/CSE/MB/2009/444 dated 20.12.2009 and approval of
Bangladesh Bank through Letter No. BRPD (R-1)717/2010-47 dated 07.02.2010; the Bank established a subsidiary Company named "Islami Bank
Securities Limited" to operate stock broker and stock dealer activities."

The share capital of Islami Bank Securities Ltd. is Tk. 2,700,000,000/- divided into 2,700,000 shares of Tk.1,000/ each out of which share capital of the
bank is Tk.2,699,856,000/- divided into 2,699,856 shares of Tk.1,000/- each which represent 99.995% of total share of the subsidiary company.

IBSL was incorporated on 22.03.2010 and date of commencement of business was 23.05.2010. Required capital was transferred to IBSL on 25.05.2010
which is operating business under the license issued by the Bangladesh Securities & Exchange Commission (BSEC). As a stock broker, IBSL acts as an
agent in the purchase and sale of Shari’ah approved listed securities and realizes commission on transactions in accordance with approved commission
schedule.

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1.4.2 Islami Bank Capital Management Limited (IBCML)
"As per Bangladesh Bank BRPD Circular No. 12 dated 14.10.2009 and approval of Bangladesh Bank through Letter No. BRPD (R-1)717/2010-47 dated
07.02.2010, the Bank established another subsidiary Company named ""Islami Bank Capital Management Limited"" to operate portfolio management,
underwriting, issue management etc."

The share capital of Islami Bank Capital Management Ltd. is Tk.300,000,000/- divided into 300,000 shares of Tk.1,000/- each, out of which share capital
of the bank is Tk.299,993,000/- divided into 299,993 shares of Tk.1,000/- each which represent 99.998% of total share of the subsidiary Company. The
company has obtained Merchant Banker Registration Certificate on 31.03.2019 from Bangladesh Securities & Exchange Commission (BSEC) to operate
the activities of Issue Manager/Underwriting/Portfolio manager.

1.4.3 IBBL Exchange Singapore Pte. Ltd.

‘IBBL Exchange Singapore Pte. Ltd.’ has been incorporated in Singapore, as a subsidiary of Islami Bank Bangladesh Limited for remittance services and
things incidental thereto under the Companies Act, CAP. 50 of the Republic of Singapore. Till 31 December 2020, no share capital of the subsidiary has
been paid by its parent company i.e. Islami Bank Bangladesh Limited. Therefore, the financial statements of IBBL Exchange Singapore Pte. Ltd has not
been prepared and accordingly not consolidated with that of the parent i.e. the bank.

2.0 Basis of preparation of financial statements

2.1 Reporting framework and compliance thereof

The Bank and its subsidiaries are being operated in strict compliance with the rules of Islamic Shari’ah. The financial statements (consolidated &
separate) have been prepared in accordance with the guidelines of Islamic banking issued by Bangladesh Bank through BRPD Circular No. 15 dated
09.11.2009 . The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) is formed and it is
yet to issue financial reporting standards for public interest entities such as banks hence International Financial Reporting Standards (IFRS) as
approved by the Institute of Chartered Accountants of Bangladesh (ICAB) are still applicable. Accordingly, the financial statements of the Bank
continue to be prepared in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Bank Company Act 1991
as amended, the rules and regulations issued by Bangladesh Bank (BB), the Companies Act 1994, the Securities and Exchange Rules, 1987, Standards
issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), as a member of that organization. Where the
reporting guidelines issued by Bangladesh Bank and Bank Companies Act differ with those of IFRS, the requirements of the Bank Company Act 1991,
and provisions and circulars issued by Bangladesh Bank shall prevail. As such the Bank has departed from those requirements of IFRSs in order to
comply with the rules and regulations of Bangladesh Bank which are disclosed below:

I. Presentation of financial statements

"IFRS
As per IAS-1 ""Presentation of Financial Statements"", financial statements shall comprise statement of financial position, statement of profit or loss and
other comprehensive income, statement of changes in equity, statement of cash flows, notes to the financial statements comprising summary of
accounting policies and other explanatory information and retrospective restatement of items in the earlier financial statement, where applicable.
Furthermore, IAS-1 states that, an entity shall present its current and non-current assets and liabilities, as separate classifications in its statement of
financial position."

"Bangladesh Bank
The financial statements and certain disclosures therein are presented in a prescribed format (i.e. balance sheet, profit and loss account, cash flows
statement, statement of changes in equity, liquidity statement) in accordance with the guidelines of the ‘First Schedule’ (section 38) of the Bank
Companies Act 1991 as amended and BRPD circular no. 15 dated 09 November, 2009 and other subsequent guidelines of BB. In the prescribed format
of BB there is no component of other comprehensive income and accordingly the elements of other comprehensive income and the tax thereon (if any)
is recognized directly in the statement of changes in equity. The assets and liabilities are presented in accordance with the prescribed format of BB and
accordingly not classified as current and non-current classification as required by IAS-1."

II. Other Comprehensive Income

IFRS
As per IAS-1 "Other Comprehensive Income (OCI)" is a component of of financial statements or the elements of OCI are to be included in a single
Other Comprehensive Income (OCI).
"Bangladesh Bank
Bangladesh Bank has issued templates for financial statements which will strictly be followed by all banks. The templates of financial statements issued
by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to be included in a
single Other Comprehensive Income (OCI) Statement. As such the Bank does not prepare the Other Comprehensive Income statement. However,
elements of OCI, if any, are shown in the statement of changes in equity."

III. Disclosure of Appropriation of Profit

IFRS
IFRS do not require appropriation of profit to be shown on the face of the statement of comprehensive income.
Bangladesh Bank
As per BRPD circular no. 14, dated 25 June 2003 and BRPD 15 dated 09 November 2009, an appropriation of profit should be disclosed on the face of
profit and Loss Account.

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 IV. Investments in shares and securities
IFRS
As per requirements of IFRS-9 "Financial Instruments", investment in shares and securities are generally classified either at fair value through profit or
loss or at fair value through other comprehensive income and measured initally at its fair value plus transaction costs that are directly attributable to the
acquisition of the financial asset . However in the case of financial assets classified and measured at fair value through profit or loss, transactions costs
are immediately recognised in profit or loss. Change in the fair value of shares and securities measured at fair value through profit or loss is recognised
in the statement of profit or loss and changes in the fair value of shares and securities measured at fair value through other comprehensive income is
recognised in the other comprehensive income and are never reclassified to pofit or loss.

Bangladesh Bank
As per BRPD circular no. 14 dated 25 June 2003, investments in shares and securities are classified under held to maturity (HTM) or held for trading
(HFT) “and measured at cost. Transaction costs that are directly attributable to the acquisition added to the initial fair value except for financial assets
classified as HFT where they should be recognised in profit or loss.

After initial recognition, HFT govt. securities are measured according to DOS circular no. 05 dated 26 May 2008 and DOS circular no. 05 dated 28
January 2009, where amortization loss is charged to profit and loss account, mark-to-market loss on revaluation is charged to profit and loss account,
but any unrealized gain on such revaluation is recognized in revaluation reserve account. HTM govt. securities are measured at amortized cost and
increase/decrease related to amortization is recognized in equity.

As per BRPD circular no. 14 dated 25 June 2003 and DOS circular No.4 dated 24 November 2011, investments in quoted and unquoted shares are
revalued at the year-end at market price and at Book Value of last audited balance sheet respectively. As such, provision is made against the diminution
in value of investments considering netting off gain /loss. Investment in mutual fund (open-end) is revalued at lower of cost and higher of (market
value and 95% of NAV) as per instruction of DOS circular no. 03 dated 12 March 2015 closed end mutual fund is revalued at lower of cost and higher of
(market value and 85% of NAV) as per DOS circular no. 10 dated 28 June 2015. As such, provision is made for any loss arising from diminution in
value of investments (portfolio basis); otherwise investments are recognized at costs.

V. Provision for investments

IFRS
As per IFRS 9 an entity shall recognise an impairment allowance on loans and advances based on expected credit losses. At each reporting date, an
entity shall measure the impairment allowance for loans and advances at an amount equal to the lifetime expected credit losses if the credit risk on
these loans and advances has increased significantly since initial recognition. For those loans and advances for which the credit risk has not increased
significantly since initial recognition, an entity shall measure the impairment allowance at an amount equal to 12 month expected credit losses.

Bangladesh Bank
As per BRPD circular No.14 dated 23 September 2012, BRPD circular No. 19 dated 27 December 2012, BRPD circular No. 05 dated 29 May 2013,
BRPD circular No. 16 dated 18 November 2014 and a BRPD Circular No.01 dated 20 February 2018 general provision at 0.25% to 5% under different
categories of unclassified investments (good/standard investments) has to be maintained regardless of objective evidence of impairment. Also provision
for sub-standard, doubtful and bad & loss investments have to be provided at 20%, 50% and 100% respectively (except short-term agricultural and
micro-credits where 1% for all unclassified investment (irregular & regular) 5% for sub-standard and doubtful investments and 100% for bad & loss
investments) depending on the duration of overdue.

VI. Provision for Off-balance sheet items

IFRS
There is no concept of off-balance sheet items in any IFRS; hence there is no requirement for making provision or disclosure of off-balance sheet items
on the face of the statement of financial position.

Bangladesh Bank
As per BRPD circular No.14 dated 25 June 2003 and BRPD circular no- 15 dated 09 November 2009, off balance sheet items (e.g. Letter of credit, Letter
of guarantee, Bills for collection etc.) must be disclosed separately on the face of the balance sheet. Furthermore, as per BRPD Circular No.14 dated 23
September 2012, BRPD Circular No.19 dated 27 December 2012, BRPD Circular No.7 dated 21 June 2018 and BRPD Circular No.13 dated 18 October
2018 a general provision at 1% is required to be provided for all off-balance sheet exposures except Bills for Collection received by the bank on behalf of
its customers and issued guarantees. Mentionable that Provision against guarantees issued by Bank is to be kept in different rates @ nill, 0.50%, 0.75% &
01% considering the BB rating grade equivelance of the bank providing the counter guarantee.

VII. Recognition of investment income in suspense

IFRS
Investment to customers (loans and receivables) are generally classified at amortized cost as per IFRS 9 "Financial Instruments" and investment income
is recognised by using the effective interest rate method over the term of the investment. Once an investment is impaired, the entity shall apply the
effective interest rate to the amortised cost of these investments.

Bangladesh Bank
As per BRPD circular no. 14 dated 23 September 2012, once an investment is classified, investment income on such investment are not allowed to be
recognised as income, rather the corresponding amount needs to be credited to an investment income in suspense account, which is presented as
liability in the balance sheet.

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VIII. Financial instruments – presentation and disclosure
In several cases Bangladesh Bank guidelines categorise, recognise, measure and present financial instruments differently from those prescribed in IFRS
9. As such full disclosure and presentation requirements of IFRS 7 and IAS 32 cannot be made in the financial statements.

IX. Financial guarantees

IFRS
As per IFRS-9, financial guarantees are contracts that require an entity to make specified payments to reimburse the holder for a loss it incurs because a
specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantee liabilities are recognised
initially at their fair value, and the initial fair value is amortised over the life of the financial guarantee. The financial guarantee liability is subsequently
carried at the higher of this amortised amount and the present value of any expected payment when a payment under the guarantee has become
probable. Financial guarantees are included within other liabilities.

Bangladesh Bank
As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, financial guarantees such as letter of credit, letter of guarantee will be
treated as off-balance sheet items.

X. Balance with Bangladesh Bank: (Cash Reserve Requirement)

IFRS
Balance with Bangladesh Bank that are required to be kept as part of cash reserve requirement, should be treated as other asset as it is not available for
use in day to day operations as per IAS-7 "Statement of Cash Flows"

Bangladesh Bank
Balance with Bangladesh Bank is treated as cash and cash equivalents.

XI. Cash flow statement

IFRS
The Cash flow statement can be prepared using either the direct method or the indirect method. The presentation is selected to present these cash flows
in a manner that is most appropriate for the business or industry. The method selected is applied consistently.

Bangladesh Bank
As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, cash flow statement is to be prepared following a mixture of direct and
indirect methods.

XII. Non-banking asset

IFRS
No indication of Non-banking asset is found in any IFRS.

Bangladesh Bank
As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, there must exist a face item named Non-banking asset.

XIII. Presentation of intangible asset

IFRS
An intangible asset must be identified and recognised, and the disclosure must be given as per IAS-38 "Intangible Assets."

Bangladesh Bank
There is no regulation for intangible assets in BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009.

XIV. Off-balance sheet items

IFRS
As per IFRS, there is no requirement for disclosure of off-balance sheet items on the face of the balance sheet.

Bangladesh Bank
As per BRPD circular no. 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, off balance sheet items (e.g. Letter of credit, Letter of
guarantee etc.) must be disclosed separately on the face of the balance sheet.

XV. Investments net off provision

IFRS
Investments should be presented net off provision.

Bangladesh Bank
As per BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009, provision on investments are presented separately as liability and can not
be netted off against investments.

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 XVI. Revenue
As per IFRS 15, revenue should be recognized on accrual basis but due to the unique nature of Islamic Banks, income from investment under
Mudaraba, Musharaka, Bai-Salam, Bai-as-Sarf and Ujarah modes (Khidmah Card) is accounted for on realization basis as per AAOIFI and Bangladesh
Bank guidelines.

XVII. Charges on tax on retained earnings, reserve, surplus as per Income tax ordinance (ITO) 1984
As per section 16(G) of the income tax ordinance 1984, Listed companies should disclose proposed dividend in the balance sheet as "among to be
distributed as dividend". However there is no provision for this in BRPD 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009 and IFRS also
restricts to disclose such presentation in the balance sheet.

2.2 Measurement of elements in the financial statements

Measurement is the process of determining the monetary amounts at which the elements of the financial statements are to be recognized and carried in
the financial statements. The measurement basis adopted by the Bank is historical cost except for land, building and few of the financial assets which
are stated in accordance with the policies mentioned in the respective notes.

2.3 Basis of consolidation

The group financial statements include the financial statements of the Bank and its subsidiaries that it controls. The Bank prepares consolidated
financial statements using uniform accounting policies for similar transactions and other events in similar circumstances. Consolidation of an investee
shall begin from the date the investor obtains control of the investee and cease when the investor loses control of the investee.

The Bank presents non-controlling interests in the consolidated statement of financial position (Balance Sheet) within equity, separately from the
equity of the owners of the Bank. Changes in the Bank ownership interest in a subsidiary that do not result in losing control of the subsidiary are equity
transactions (i.e. transactions with owners in their capacity as owners).

2.3.1 Consolidation procedures

 combining like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its subsidiaries.
 offsetting (eliminating) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary.
 eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between entities of the group
(profits or losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets [property, plant & equipment],
are eliminated in full). Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements.

2.3.2 Investment in subsidiaries in the Bank separate financial statements

"When the Bank prepares separate financial statements, it accounts for investments in subsidiaries at cost."

2.4 Functional and presentation currency

The consolidated and separate financial statements of the Bank are presented in Bangladeshi Taka which is the functional currency of the Bank and its
subsidiaries except for Off-shore Banking Unit (OBU) where the functional currency is US Dollar (USD). All financial information presented in Taka
(BDT) has been rounded to the nearest integer, except otherwise indicated.

2.5 Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses, and disclosure requirements for contingent assets and liabilities during
and at the date of the financial statements.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions of accounting
estimates are recognized in the period in which the estimate is revised and in any future periods affected .

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant
effect on the amounts recognized in the financial statements include depreciation, amortization, impairment, post employment benefits liabilities,
accruals, taxation and provision.

2.6 Comparative information and rearrangement thereof

Comparative figures have been re-arranged wherever considered necessary to ensure better comparability with the current period without causing any
impact on the profit and value of assets and liabilities as reported in the financial statements.

2.7 Going concern

When preparing financial statements, management makes an assessment of the Bank's ability to continue as a going concern. The Bank prepares
financial statements on a going concern basis.

2.8 Accrual basis of accounting

The Bank prepares its financial statements, except for cash flow information, using the accrual basis of accounting. Since the accrual basis of accounting
is used, the Bank recognizes items as assets, liabilities, equity, income (except the items mentioned in note-XII) and expenses (the elements of financial
statements) when they satisfy the definitions and recognition criteria for those elements in the Framework.

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2.9 Materiality and aggregation
The Bank presents separately each material class of similar items. The Bank presents separately items of a dissimilar nature or function unless they are
immaterial. Financial statements result from processing large numbers of transactions or other events that are aggregated into classes according to their nature or
function.

2.10 Offsetting
The Bank does not offset assets and liabilities or income and expenses, unless required or permitted by BB guidelines or IFRS.

2.11 Reporting period

These financial statements of the Bank and its subsidiaries cover one calendar year from 01 January 2020 to 31 December 2020.

2.12 Authorization of the financial statements for issue

The consolidated financial statements and the separate financial statements of the Bank were reviewed by the Audit Committee of the Board in its 521st meeting
on 27 April 2021 have been authorized for issue by the Board of Directors on same date.

2.13 Cash flow statement

Cash Flow Statement is prepared in accordance with IAS-7 "Statement of Cash Flows" as well as the guidelines for islamic banking issued by Bangladesh Bank
through BRPD Circular No. 15 dated 09.11.2009 and BRPD Circular No.14 dated 25.06.2003. The Statement shows the structure of changes in cash and cash
equivalents during the year.

2.14 Statement of changes in equity

Statement of Changes in Equity has been prepared in accordance with IAS-1 "Presentation of Financial Statements" as well as the guidelines for islamic banking
issued by Bangladesh Bank through BRPD Circular No. 15 dated 09.11.2009 and BRPD Circular No.14 dated 25.06.2003.

2.15 Liquidity statement

Liquidity Statement has been prepared based on the residual/remaining maturity of assets and liabilities as on 31 December 2020 as per the guidelines for islamic
banking issued by Bangladesh Bank through BRPD Circular No. 15 dated 09.11.2009 and BRPD Circular No.14 dated 25.06.2003 as follows:

i) Balance with other banks and financial institutions, etc. are on the basis of their respective maturity term;
ii) Investments in shares & securities are on the basis of their respective maturity;
iii) General investments are on the basis of their recovery/repayment schedule;
iv) Fixed assets [property, plant & equipment] are on the basis of their useful lives;
v) Other assets are on the basis of their realization/amortization;
vi) Deposits and other accounts are on the basis of their maturity and payments;
vii) Provisions and other liabilities are on the basis of their adjustment/settlement;
viii) Due to perpetual in nature/maturity, Mudaraba Perpetual Bond (MPB) is reported under maturity more than 5 (five) years.
ix) Mudaraba Redeemable Subordinated Bond is reported under maturity within 1 (one) year for Tk. 240 (Two hundred forty) crore, 1 (one) to 5 (five) years
for Tk. 1,700 (one thousand seven hundred) crore and more than 5 (five) years for Tk. 360 (three hundred sixty) crore.

2.16 Changes in accounting policies

The Bank changes its accounting policy only if the change is required by IFRS or Bangladesh Bank Guidelines or results in the financial statements providing
reliable and more relevant information about the effects of transactions, other events or conditions on the Bank’s financial position, financial performance or
cash flows. Changes in accounting policies is to be made through retrospective application by adjusting opening balance of each affected components of equity
i.e. as if new policy has always been applied.

2.16.1 IFRS-16: Lease

In January 2016, the International Accounting Standards Board (IASB) issued IFRS-16. IFRS-16 replaces IAS-17, IFRIC 4, SIC 15 and SIC 27 which sets out the
principles for recognition, measurement, presentation and disclosure of leases which is effective from annual reporting periods beginning on or after 01 January
2019. IBBL has applied IFRS-16 Leases for the first time with the date of initial application of 01 January 2019. As IFRS-16 supersedes IAS-17 Lease, the bank has
made recognition, measurement and disclosure in the financial statements-2020 both as Lessee and Lessor as per IFRS-16.

Bank as lessee:
The bank assesses at initiation of a contract whether the contract is, or contains a lease. That is, if the contract conveys the right to control the use of an identified
asset for a period of time in exchange of consideration, then the bank consider the contract as a lease contract. The bank as a lessee applies a single recognition
and measurement approach for all leases, except for short-term leases, or, and lease of low value of assets. The bank recognizes lease liabilities to make lease
payment and right-of-use assets representing the right to use the underlying assets. If tenor of a lease contract does not exceed twelve months from the date of
initiation/application, the bank considers the lease period as short term in line with the recognition threshold of ROU assets as per FA policy of the bank. The
Bank determine incremental borrowing rate to calculate the ROU assets and depreciate the asset over the useful life by straight line method. The right-of-use
asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Bank, an estimate of any costs
to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives
received).
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is premeasured to reflect any reassessment or
modification, or if there are changes in in-substance fixed payments. The Bank has elected to account for short-term leases and leases of low-value assets using
the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or
loss on a straight-line basis over the lease term.On the statement of financial position, right-of-use assets have been included in property, plant and equipment
and lease liabilities have been included other liabilities.

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 Right-of-use assets (ROU):
The bank recognises the right-of-use (ROU) assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). ROU
assets are measured at cost less any accumulated depreciation and impairment of losses and adjusted for any measurement of lease liabilities. The cost of
ROU assets includes the amount of lease liabilities recognised, initial direct cost incurred, and lease payment made at or before the commencement
date less any lease incentives received. Right-of-use assets are depreciated on a straight line basis over the lease term, or remaining period of the lease
term.

The bank assessed all lease contracts live in 2020 and recognised as ROU of assets of all leases, except short term and low value of assets as guided by
Banks’ own policy set as per IAS-16 and IFRS-16. As leases under IFRS-16 has been first time adopted by the bank, the bank has followed modified
retrospective approach of adoption with the date of initial application of 01 January 2020. Therefore, the bank considered a cut-off date beginning of the
year 2019 and reassessed unadjusted advance payment and remaining lease period of each contract, and recognised those in the financial statements for
the year ended 31 December 2020 without giving retrospective impact in earlier presentation. The ROU assets are presented in the Note 12.1 of these
financial statements.

Lease Liabilities (Bank as a lessee):

At the commencement of the lease, the bank recognises lease liabilities measured at the present value of lease payments to be made over the lease term.
The lease payments include fixed and variable lease payment (less any adjustment for initial payment), and amount is expected to be paid under
residual value of guarantees.

In 2020, the bank reassessed all lease payment of existing contracts for remaining period considering a cut-off date i.e. 01 January 2020. The lease
liabilities are presented in the Note 17.0 of these financial statements.

Bank as a lessor:
Leases where the bank does not transfer substantially all of the risk and benefit of ownership of any asset are classified as operating assets. Rental
income is recorded as earned based on the contractual term of the lease. However, the Bank did not hold any such assets in 2020.

Recognition of consideration made under contract in exchange of use of rental premises/assets:

As per IFRS 16, when consideration is made by the bank under contract in exchange of use of rental premises or assets for a period not exceeding a
period of twelve months, and or, the present value of the obligation plus initial payment under contract does not exceed the threshold limit of the bank,
and substantially all the risk and benefit of ownership of those rental premises/assets does not transfer to the bank, then the bank considers the
payment (other than advance payment) as rental expense under IFRS 15 Revenue from contracts with customers.

Therefore, in 2020, IBBL recognised those payments against contracts that do not qualify as lease item under IFRS-16 as rental expense which is
presented in Note 30.0 of the financial statements for the year ended 31 December 2020.

Particulars Amount in Tk.

Depreciation charge for right-of-use (ROU) assets by class of underlying asset 418,099,764
Finance charge on lease liabilities 109,797,779
Total cash outflows 385,733,833
Additions to right-of-use assets 1,928,173,303
Carrying amount of right of use assets at the end of the reporting period 1,906,084,535
Lease obligation on ROU assets as at end of the reporting period 1,677,862,245

2.17 Changes in accounting estimates

Estimates arise because of uncertainties inherent within them, judgment is required but this does not undermine reliability. Effect of changes of
accounting estimates is included in profit or loss account.

3.0 Summary of significant accounting policies

Accounting policies are determined by applying the relevant guidelines of Bangladesh Bank as well as the relevant IFRS. Where there is no available
guidelines of BB and IFRS, management uses its judgment in developing and applying an accounting policy that results in information that is relevant
and reliable. The Bank selects and applies its accounting policies for a period consistently for similar transactions, other events and conditions, unless
IFRS or Bangladesh Bank guidelines specifically requires or permits categorization of items for which different policies may be appropriate. The
accounting policies set out below have been applied consistently in all material respects to all periods presented in these consolidated financial
statements:

3.1 Cash and cash equivalents

Cash and cash equivalents include notes and coins in hand and at ATM, balances held with Bangladesh Bank and its agent bank, balance with other
banks and financial institutions which are not ordinarily susceptible to change in value.

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3.2 Investment in shares and securities
Investment in shares and securities (other than Investment in Bangladesh Government Islamic Investment Bond) are initially recognised at cost and
subsequently measured and accounted for depending on their classification criteria as either held to maturity or held for trading. Transaction costs that are
directly attributable to the acquisition added to the initial cost except for the investment classified as held for trading where they should be recognised in profit or
loss.

Investments in quoted and unquoted shares are revalued at the year-end at market price and at net assets value (NAV) of last audited balance sheet respectively.
As such, provision is made against the diminution in value of investments netting off gain /loss arises from the market of the securities.

Investment in mutual fund is revalued is mentioned in Note-3.2.3. As such, provision is made for any loss arising from diminution in value of investments
(portfolio basis).

Investment in Government securities (other than investment in Bangladesh Shipping Corporation) are measured both initially and subsequently at cost as the
Bank is not allowed to invest in interest bearing government securities like T-bond, T-bill etc. So the instructions and circulars related to the recognition and
measurement of those instruments are not applicable for the Bank.

Investment in Bangladesh Shipping Corporation was initially recognized at cost. Transaction costs directly attributable to the acquisition added to the cost. After
initial recognition investments are measured at the year end market price and change in the market price is recognized in equity under the head revaluation
surplus.

Investment in subordinated bond is measured both initially and subsequently at cost.

3.2.1 Held to Maturity (HTM)

Investments which are intended to be held till maturity are classified as ‘Held to Maturity’ (HTM). These are measured at amortized cost at each year end by
taking into account any discount or premium on acquisition. Premiums are amortized and discounts are accredited, using the effective or historical yield. Any
increase in value of such investments is booked to equity but decrease to profit and loss account.

3.2.2 Held for Trading (HFT)

These are investments primarily held for selling or trading. After initial recognition, investments are marked to market and any decrease in the present value is
recognized in the Profit and Loss Account and any increase is booked to Revaluation Reserve Account through Profit and Loss Account as per DOS Circular no.
05 dated 28 January 2009.

3.2.3 Investment- Initial recognition and subsequent measurement

Initial
Investment class Measurement after initial recognition Recording of Changes
Recognition
Govt. treasury Cost Cost None
securities- BGIIB
Debenture/Bond Cost Cost None
Shares (Quoted) Cost Lower of cost or market value (overall portfolio) Loss (net off gain) to profit and loss account
but no unrealized gain booking.
Shares (Unquoted) Cost Lower of cost or Net Asset Value (NAV) of last audited Loss to profit and loss account but no
financial statements unrealized gain booking.
Mutual fund (Open-end) Cost If, average cost price (CP) >NAVCMP * 0.95, then required Loss (net) to profit and loss account but no
provision per unit will be (RP) = CP -NAVCMP * 0.95. unrealized gain booking.
Mutual fund (Close-end) Cost If CP> Market Value (MV) or CP> NAVCMP * 0.85, then Loss (net) to profit and loss account but no
required provision (RP) per unit will be: (i) In case of unrealized gain booking.
MV≥ NAVCMP * 0.85, then RP= CP –MV or (ii) In case
of MV< NAVCMP * 0.85, then RP =CP- NAVCMP * 0.85

3.3 Investments
Investments are recognized at gross amount on the date on which they are originated. After initial recognition investments are stated in the Balance Sheet net off
profit receivable and unearned income. However, provision for investments are not net-off with investments.
Profit Receivable – the amount of unexpired portion of profit charged on Bai-Murabaha investment at the time of sale of goods/ services to customer/ client.
Unearned Income - the amount of unrealized portion of profit/ value addition of fixed assets [property, plant & equipment] under Hire Purchase Under
Shirkatul Melk (HPSM) investment for gestation period.

3.4 Fixed assets [Property, plant & equipment and intangibles]

3.4.1 Property, plant and equipment

3.4.1.1 Recognition
The cost of an item of property, plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits will flow to the Bank and  
the cost of the item can be measured reliably.

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 3.4.1.2 Measurement at recognition
An item of property, plant and equipment that qualifies for recognition as an asset is measured at its cost. The cost of an item of property, plant and
equipment is the cash price equivalent at the recognition date. The cost of a self-constructed asset is determined using the same principles as for an
acquired asset.

3.4.1.3 Elements of costs and subsequent costs

Cost includes purchase price (including import duties and non-refundable purchase taxes), directly attributable costs to bringing the asset to the location
and condition necessary for it to be capable of operating in the manner intended by the management and the initial estimate of the cost of dismantling
and removing the item and restoring the site on which it is located. Costs of day to day servicing (repairs and maintenance) are recognized as expenditure
as incurred. Replacement parts are capitalized, provided the original cost of the items they replace is derecognized.

3.4.1.4 Measurement of property, plant & equipment after recognition

Cost model
After recognition as an asset, an item of property, plant and equipment shall be carried at its cost less any accumulated depreciation and any accumulated
impairment losses.

Revaluation model
The revaluation model requires an asset, after initial recognition, to be measured at a revalued amount, which is its fair value less subsequent accumulated
depreciation and impairment accumulated losses.

Where an asset’s carrying amount is increased as a result of a revaluation, the increase is recognized in equity under the heading of revaluation surplus.
However, the increase is recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or
loss.

Where an asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognized in profit or loss. However, the decrease is recognized
in equity to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognized in equity reduces the
amount accumulated under the heading of revaluation surplus.

The revaluation surplus included in equity in respect of an item of property, plant and equipment is transferred directly to retained earnings when the
asset is derecognized. However, some of the surplus is transferred as the asset is used by the Bank. In such a case, the amount of the surplus transferred
would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost.

3.4.1.5 Derecognition of property, plant and equipment

The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its
use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is included as other income in profit or loss
when the item is derecognized.

3.4.1.6 Asset retirement obligations (ARO)

Asset retirement obligations (ARO) are recognized when there is a legal or constructive obligation as a result of past event for dismantling and removing
an item of property, plant and equipment and restoring the site on which the item is located and it is probable that an outflow of resources will be
required to settle the obligation, and a reliable estimate of the amount of obligation can be made. A corresponding amount equivalent to the provision is
also recognized as part of the cost of the related property, plant and equipment. The amount recognized is the estimated cost of decommissioning,
discounted to its present value. Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with prospectively by
recording an adjustment to the provision, and a corresponding adjustment to property, plant and equipment. The periodic unwinding of the discount is
recognized in the statement of profit or loss as a finance cost as it occurs.

3.4.1.7 Depreciation
The depreciation charge for each period is recognized in profit or loss unless it is included in the carrying amount of another asset. Depreciation of an
asset begins when it is installed and available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner
intended by management. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is
derecognized. The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ from previous
estimates, the change(s) shall be accounted for as a change in an accounting estimate.

Depreciation is calculated based on the cost/revalued amount of items of fixed assets [property, plant & equipment] less their estimated residual values
using either of straight-line method (SLM) or reducing balance method (RBM) over their estimated useful lives and recognized in profit and loss. Land is
not depreciated. Rates of depreciation considering the useful life of respective assets are as follows:

Items Method Rates

Building Reducing balance 2.50%
Furniture and fixtures -Do- 10.00%
Mechanical appliances -Do- 20.00%
ATM -Do- 10%-25%
Books -Do- 30.00%
Motor vehicles Straight-line 16.67% - 20.00%
Computers -Do- 25.00%

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3.4.2 Capital work in progress
Fixed assets that is being under construction/acquisition is accounted for as capital work in progress until construction/acquisition is completed and
measured at cost. The work in progress is transferred to cost of that fixed assets when the construction is completed and it becomes available for use.

3.4.3 Intangible assets

3.4.3.1 Recognition
The recognition of an item as an intangible asset requires the Bank to demonstrate that the item meets the definition of an intangible asset and the
recognition criteria. An intangible asset is recognized as an asset if, and only if, it is probable that expected future economic benefits that are
attributable to the asset will flow to the Bank and the cost of the item can be measured reliably.

3.4.3.2 Measurement
An intangible asset is measured at cost less any accumulated amortizations and any accumulated impairment losses. Subsequent expenditures are
likely to maintain the expected future economic benefits embodied in an existing intangible asset rather than meet the definition of an intangible
asset and the recognition criteria. Therefore, expenditure incurred after the initial recognition of an acquired intangible asset or after completion of
an internally generated intangible asset is usually recognized in profit or loss as incurred. The rates used for amortizing intangible assets is 25.00%.

3.4.3.3 Amortization
The depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life. Amortization begin
when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by
management. Amortization ceases at the earlier of the date that the asset is classified as held for sale and the date that the asset is derecognized. An
intangible asset with an indefinite useful life is not amortized.

3.5 Impairment of Fixed assets [property, plant & equipment and intangibles]

Recognizing and measuring impairment loss

Where the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.
That reduction is an impairment loss. An impairment loss on a non-revalued asset is recognized in profit or loss. However, an impairment loss on a
revalued asset is recognized directly in equity to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that
same asset. Such an impairment loss on a revalued asset reduces the revaluation surplus for that asset.

The Bank assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the
Bank estimates the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, the Bank tests an intangible asset
with an indefinite useful life or an intangible asset not yet available for use for impairment annually.

3.6 Other assets

Other assets include all other financial assets, other income receivable, advance against expenses etc.

3.7 Non-banking assets

Non-banking assets are acquired on account of the failure of a client to repay the investment in time after receiving the decree from the court
regarding the right and title of the mortgaged property.

3.8 Placement from banks and other financial institutions

Placement from banks and other financial institutions are stated in the financial statement at principal amount of the outstanding balance.

3.9 Deposits and other accounts

Deposit and other accounts include Al Wadeeah current deposit as well as savings, term and other Mudaraba deposits. Deposits by customers and
banks are recognized when the Bank enters into contractual agreements with the counterparties. These items are brought to Financial Statements at
the gross value of the outstanding balance.

3.10 Subordinated bond- Mudaraba Perpetual Bond (MPB)

Mudaraba Perpetual Bond (MPB) was issued by the Bank under the mudaraba principles of Islamic Shari’ah as per approval of Bangladesh Bank
Letter No. BRPD (P-1)661/14(a)/2006-1437 dated 07.05.2006 and Bangladesh Securities and Exchange Commission Letter No.
SEC/CI/CPLC-118/2006/385 & SEC/CI/RPO-01/2007/386 both dated 10.06.2007. The Investment Corporation of Bangladesh (ICB) is the Trustee of
the MPB. The MPB is listed with Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange Ltd. and trading of the same started from 25 November
2007. It is treated as a component of Additional Tier-I Capital (AT-I). The instrument subordinated to the claims of other creditors and depositors. In
the case of liquidation the subordinated debtholders would be paid just before paying to the shareholders assuming there are assets to distribute after
all other liabilities and debts have been paid. The Mudaraba Perpetual Bond (MPB) is perpetual in nature i.e. infinite maturity. Profit paid against
Mudaraba Perpetual Bond is the final profit rate of 8 (eight) years Mudaraba Savings Bond and an additional amount equivalent to 10.00% of the rate
of dividend declared for the respective year.

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 3.10.1 Mudaraba Redeemable Subordinated Bonds
In addition to previously issued 03 (three) Mudaraba Redeemable Non-convertible Subordinated Bonds (1st bond of Tk. 5,000 million in 2017 and
2nd bond of Tk. 7,000 million in 2018, 1st Tranche of Tk. 6,000 million of 3rd Bond in 2019), IBBL has issued another Tier-2 bond of Tk. 6,000
million on 15 December, 2020 which is named as 2nd Tranche Issue of BDT 6,000 million of IBBL 3rd Mudaraba Redeemable Non-convertible
Subordinated Bond as per approval of Bangladesh Securities and Exchange Commission Vide Letter No. BSEC/CI/DS-111/2019/282 dated
December 02, 2020 and NOC from Bangladesh Bank Vide Letter No. BRPD (BFIS)661/14b(p)/2020-9515 dated 09 November, 2020. The rate of
profit (coupon rate/expenditure) of 2nd Tranche issue of 3rd bond is calculated on the average of most recent month's published highest profit rates
of Mudaraba Term Deposit in 6 months tenor of all Islami Banks in Bangladesh to be applied semi-annually for Benchmark Profit Rate fixation plus
additional 2.00% (indicative/ provisional) per annum on the outstanding balance of the bond from pre-tax profit/ operating income of the Bank. The
profit rates of banks are collected from “Announced Interest Rate Chart of the Scheduled Banks (Deposit Rate)” published by Bangladesh Bank in its
website.

3.10.2 Usage of Mudaraba Redeemable Subordinated Bond

The fund has been used to extend the investment facility to the existing clients and to extend investment facility to the new clients in different sectors
for sustainable business growth.

3.11 Provisions

3.11.1 Provision for investments

Provision for investments is made on the basis of quarter-end review by the management and instructions contained in BRPD Circular no. 14 dated
23 September 2012, BRPD Circular no. 04 dated 29 January 2015, BRPD Circular no. 08 dated 02 August 2015, BRPD Circular No.12, dated 20
August, 2017, BRPD Circular No. 12 dated 20 August, 2017, BRPD Circular No. 01 dated 20 February, 2018, BRPD Circular No. 01 dated 20
February, 2018, BRPD circular no. 03 dated 21 April 2019, BRPD circular no. 07 dated 19 March 2020 and BRPD circular no. 56 dated 10 December
2020 Details are given below:

Classification/Percentage (%) of provision requirement

Particulars 2020 2019
UC SMA SS DF BL UC SMA SS DF BL
Small and Medium Enterprise (SME) Financing 0.25% 0.25% 5% 20% 100% 0.25% 0.25% 20% 50% 100%
Investment for Housing Finance 1% 1% 20% 50% 100% 1% 1% 20% 50% 100%
Consumer Investment for Professionals 2% 2% 20% 50% 100% 2% 2% 20% 50% 100%
Other than Investment for Housing Finance & Professionals 2% 2% 20% 50% 100% 5% 5% 20% 50% 100%
All Other (Except Short-term Agricultural and Micro-Credits) 1% 1% 20% 50% 100% 1% 1% 20% 50% 100%
Short-term Agricultural and Micro-Credits 1% 5% 100% 1% 5% 100%
Investment to Stock Dealers & Stock Broker 2% 20% 50% 100% 2% 20% 50% 100%

3.11.2 Provision for diminution of value of shares and securities

Provision for diminution of value of shares and mutual funds, placed under other liability, has been made on portfolio basis (gain/loss net off)
following DOS circular No. 04 dated 24 November 2011, DOS circular no. 03 dated 12 March 2015 and DOS circular no. 10 dated 28 June 2015
respectively. Details are stated in Note 17.2 of these financial statements.

3.11.3 Provision for off-balance sheet exposures

In compliance with BRPD circular no. 14 dated 23 September 2012, BRPD Circular No.7 dated 21 June 2018 and BRPD Circular No.13 dated 18
October 2018 the Bank has been maintaining provision against off-balance sheet exposures (mainly contingent assets/liabilities) Note-2.1.VI.

3.11.4 Provision for other assets

Provision for other assets is made as per the instructions made in the BRPD circular No. 14 dated 25 June 2001 and other instructions made by
Bangladesh Bank. (Note- 17.3.1).

3.11.5 Provision for nostro accounts

Provision for unsettled transactions in nostro accounts is made as per FEPD circular no. FEPD (FEMO) / 01/2005-677 dated 13 September 2005 of
Foreign Exchange Policy Department (FEPD) of Bangladesh Bank. On the reporting date, the Bank has no unsettled transactions outstanding for
more than 3 months and no provision has been made in this regard.

3.11.6 Other provisions, accruals and contingencies

3.11.6.1 Recognition of provisions, accruals and contingencies

A provision is recognized when the Bank has a present obligation (legal or constructive) as a result of a past event; it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation; a reliable estimate can be made of the amount of the obligation.
Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the
supplier, including amount due to employees.

Contingent liabilities are not recognized in the financial statements. Disclosure on contingent liabilities has been made on the face of balance sheet
under 'Off-balance Sheet Items' as per BRPD circular No. 14 dated 25 June 2003 and BRPD 15 dated 09 November 2009.

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3.11.6.2 Measurement of provision
The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting
period.

3.11.6.3 Changes and uses of provisions

Provisions is reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow
of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.  A provision is used only for
expenditures for which the provision was originally recognized. Only expenditures that relate to the original provision are set against it. Setting
expenditures against a provision that was originally recognized for another purpose would conceal the impact of two different events.

3.12 Post employment benefits

The Bank provides various long-term and short-term benefits to the employees under different schemes. Details of the benefits plans are given
below:

3.12.1 Defined contribution plan

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions to a separate entity and has no legal
or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plan are recognized as personnel expense
in profit or loss in the periods during which related services are rendered by employees. The Bank maintains one funded defined contribution plan
for its employees - Provident fund.

3.12.1.1 Provident fund

The Provident Fund is for the regular and confirmed employees who works for a minimum period of 5(five) years at the Bank and it came into force
with effect from 1st day of March 1986. The fund receives contributions @ 10% of the basic pay both from employees and employer.

3.12.2 Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Bank’s net obligation in respect of defined
benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service
in the current and prior periods. The Bank has two funded defined benefit plans - Gratuity fund and Superannuation fund.

3.12.2.1 Gratuity fund

The Gratuity Fund for the regular and confirmed employees of the Bank was established on 01 March 1986. The employees who served at least 7
(seven) years, served for minimum 12 (twelve) years & served for 20 (twenty) years at the Bank are entitled to get gratuity equivalent to 1(one)
month's basic pay, 1.5 (one and a half) months’ basic pay & entitled to get 2 (two) months’ basic pay respectively for each completed years of service
and fraction thereof. Adequate contributions have been made as per the recommendation of actuarial valuation report during the year.

3.12.2.2 Superannuation fund

The Fund came into force with effect from the 19 June, 2008. It was established for financial help to the members of the Bank Employees’
Superannuation Fund and their families in case of retirement, death, physical disability of employee while in service or of any incidence of like
nature acceptable to the Board of Trustees and retirement from the service.

3.12.3 Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is
recognized for the amount expected to be paid if the Companies has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be estimated reliably.

3.12.4 Other employee benefits

Other employee benefits include which are not included in short-term employee benefits, post-employment benefits and other termination
benefits.

3.12.4.1 Benevolent fund

The Benevolent Fund for the regular and confirmed employees of the Bank was established in the year 1986. This Fund is mainly used for payment
of scholarship to the meritorious students among the children of the Bank’s officers and sub-staff, to allow short term quard/grant to meet some
unexpected and specific needs of the staff of the Bank like accident, clinical treatment, marriage ceremony of the employees and their dependents
etc. The Bank contributed Tk.15.00 million to the fund during the year 2020.

3.12.5 Workers' Profit Participation Fund (WPPF)

As per Bangladesh Labour Act, 2006 as amended in 2013 all companies fall within the scope of WPPF (which includes Bank) are required to
provide 5% of its profit before charging such expense to their eligible employees within the stipulated time. The Bank obtained opinion from its
legal advisor regarding this issue which stated that the Bank is not required to make provision for WPPF as the provision of Bangladesh Labour Act
2006 as amended contradicts with that of the Bank Companies Act 1991. As such consistent with widely accepted industry practice as well lawyer
opinion the Bank did not make any provision during the year for WPPF.

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 3.13 Taxation
The tax expense for the period comprises current tax and deferred tax. Tax is recognized in the income statement, except in the case it relates to items
recognized directly in equity. In this case, the tax is also recognized directly in equity.

3.13.1 Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date and
any adjustment to the tax payable in respect of previous years. Provision for current income tax has been made on taxable income of the Bank as per
following rates:

Type of income 2020 2019

Business income 37.50% 37.50%
Capital gain 10% to 15% 10% to 15%
Other Income (Dividend income) 20.00% 20.00%

3.13.2 Deferred tax

Principle of recognition
Deferred tax is recognized as income or an expense amount within the tax charge, and included in the net profit or loss for the period. Deferred tax
relating to items dealt with directly in equity is recognized directly in equity.

Recognition of taxable temporary difference

A deferred tax liability is recognized for all taxable differences, except to the extent that the deferred tax liability arises from the initial recognition of
goodwill; or the initial recognition of an asset or liability in a transaction which is not a business combination; and at the time of the transaction,
affects neither accounting profit nor taxable profit (tax loss).

Recognition of deductible temporary difference

A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against
which the deductible temporary difference can be utilized, unless the deferred tax asset arises from the initial recognition of an asset or liability in a
transaction that is not a business combination; and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Measurement
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax on revaluation

The revaluation does not affect taxable profits in the period of revaluation and consequently, the tax base of the asset is not adjusted. Hence a
temporary difference arises. An upward revaluation will therefore give rise to a deferred tax liability. IBBL recognizes the underlying revaluation
directly in equity, so the deferred tax thereon is also recognized as part of tax relating to equity. IBBL transfers each year from revaluation surplus to
retained earnings an amount equal to the difference between the depreciation based on the cost of that asset. The amount transferred is net off any
related deferred tax.

3.14 Share capital and reserves

3.14.1 Capital
Authorized Capital
Authorized Capital is the maximum amount of share capital that the Bank is authorized to raise as per its Memorandum and Articles of Association.

Paid-up Capital
Paid-up Capital represents total amount of shareholders’ capital that has been paid in full by the shareholders. Shareholders are entitled to receive
dividend as approved from time to time in the Annual General Meeting.

3.14.2 Share Premium

Share premium arose from sale of some un-subscribed Right Share for the year 1996 at above the par value and can be utilized as per section 57 of
the Companies Act, 1994.

3.14.3 Statutory reserve

As per section 24 of the Bank Companies Act, 1991 as amended, at least 20% of the net profit before tax is transferred to statutory reserve each year
until the cumulative balance of the reserve equal to the paid-up capital.

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3.14.4 Assets revaluation reserve
This represents the difference between the book value and the re-valued amount of premises (Land and Building) of the Bank as assessed by
professional valuers in the year 2000, 2002, 2003, 2004, 2005, 2006, 2009 and 2012 which were reviewed by the then statutory auditors. To calculate
Capital to Risk Weighted Assets Ratio (CRAR), 50% of the same was considered as a component of supplementary capital as per Bangladesh Bank
BRPD Circular No. 24 dated 03 August 2010 up to 2014. However, as per BRPD circular 18 dated December 21, 2014, the revaluation reserve for
Fixed assets [property, plant & equipment]already have been deducted from Tier-2 capital with a phase in manner from 2015 to 2019.

3.14.5 Revaluation reserve of securities

Investment in shares of Bangladesh Shipping Corporation qualified for Statutory Liquidity Reserve (SLR) as per Bangladesh Bank Letter No. BCD
(P)744(23)(II)/1030 dated 08.11.1983, BRPD Circular No.15 dated 31.10.2005, DOS Circular Letter No.10 dated 11.09.2006, BRPD Circular No.03
dated 12.03.2008 and DOS Circular Letter No.05 dated 26.05.2008. The shares have been revalued as on 30.12.2017 on the basis of closing market
price of Dhaka Stock Exchange Limited (DSE). The surplus is credited to Revaluation Reserve on securities account and 50% of the revaluation
reserve upto 2014 has been taken as a component of Supplementary Capital as per Bangladesh Bank BRPD Circular No. 24 dated 03 August 2010.
and shown in the Statement of Changes in Equity as per Bangladesh Bank guidelines up to 2014. As per BRPD circular 18 dated December 21, 2014,
the revaluation reserve for securities has been deducted from Tier-2 capital from 2015 to 2019.

3.14.6 Non-controlling interest

Non-controlling interest is the equity in the subsidiaries that is not attributable, directly or indirectly to the parent. The Bank attributes the profit or
loss and each component of equity to the owners of the parent and to the non-controlling interests. When the proportion of the equity held by
non-controlling interests changes, the Bank adjusts the carrying amounts of the controlling and non-controlling interests to reflect the changes in
their relative interests in the subsidiaries.

The Bank presents non-controlling interests in the consolidated statement of financial position (Balance Sheet) within equity, separately from the
equity of the owners of the Bank. Changes in the Bank ownership interest in a subsidiary that do not result in losing control of the subsidiary are
equity transactions (i.e. transactions with owners in their capacity as owners).

3.14.7 Regulatory capital in line with Basel-III

Till December 2014, as per Revised Regulatory Capital Framework in line with Basel III, full amount of general provision for unclassified
investments and off-balance sheet items & Mudaraba Subordinated Bond as capital gone-concern. However, as per Guidelines on Risk Based Capital
Adequacy (Revised Regulatory Capital Framework for Banks in line with Basel-III), BRPD No.18, dated 21 December 2014, Assets Revaluation
Reserve and Revaluation Reserve of Securities has gradually been deducted in a transitional arrangement starting from January 2015 to December
2019 (20% each year). Accordingly regulatory capital for the period has been calculated complying with all of these changes as per Revised
Regulatory Capital Framework for Banks in line with Basel-III.

3.15 Foreign currency transactions

3.15.1 Initial recognition

A foreign currency transaction is recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot
exchange rate between the functional currency and the foreign currency at the date of the transaction.

3.15.2 Subsequent measurement

A foreign currency transaction may give rise to assets or liabilities that are denominated in a foreign currency. These assets and liabilities is translated
into the Bank's functional currency at each reporting date. However, translation depends on whether the assets or liabilities are monetary or
non-monetary items:

Monetary items
Foreign currency monetary items outstanding at the end of the reporting date are translated using the closing rate. The difference between this
amount and the previous carrying amount in functional currency is an exchange gain or loss. Exchange differences arising on the settlement of
monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period
or in previous financial statements is recognized in profit or loss in the period in which they arise.

Non-monetary items
Non-monetary items carried at historic cost are translated using the exchange rate at the date of the transaction when the asset arose (historical rate).
They are not subsequently retranslated in the individual financial statements of the Bank. Non-monetary items carried at fair value are translated
using the exchange rate at the date when the fair value was determined.

When a gain or loss on a non-monetary item is recognized in equity, any exchange component of that gain or loss is recognized in equity. Conversely,
when a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or
loss.

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 3.15.3 Translation of foreign currency financial statement
The assets and liabilities of foreign operations (Note- 1.3) are translated into presentation currency in the current statement of financial position
using the closing rate at the reporting date. The income and expenses of foreign operations are translated at spot exchange rates at the date of
transactions as long as practicable; otherwise average rate of exchange has been used. Foreign currency differences arising on translation are
recognized in equity under the head translation reserve.

3.16 Income

3.16.1 Investment income

Income from general investments is accounted for on accrual basis except for investments under Musharaka, Mudaraba, Bai-Salam, Bai-as-Sarf and
Ujarah (Khidmah Card) modes of Investment where the investment income is accounted for on realization basis. The Bank does not charge any rent
during the gestation period of investment against Hire Purchase under Shirkatul Melk (HPSM) mode of investment but it fixes the sale price of the
assets at a higher level in such a way to cover its expected rate of return. Such income is recognized on realization basis.

Profit/Rent/Compensation accrued on classified investments are suspended and accounted for as per circulars issued by Bangladesh Bank in this
regard from time to time. At the time of recovery or regularization of those investments the related income which was suspended and shown as a
liability is taken as investment income (except compensation) as per circulars issued by Bangladesh Bank. As a result, all the transferred amount to
investment income from suspense during the year has already been included in the investment income of the Bank.

Profit on deposits with other banks & financial institutions is accounted for on accrual basis.

3.16.2 Sharing of investment income

In case of investment, Mudaraba fund gets preference over cost free fund. The investment income earned through deployment of Mudaraba Fund is
shared by the Bank and the Mudaraba depositors at the pre-agreed ratio.

3.16.3 Income from investment in Bangladesh Government Islamic Investment Bond (BGIIB)
Profit from investment in Bangladesh Government Islamic Investment Bond (BGIIB) is accounted for on an accrual basis.

3.16.4 Income from investment in subordinated bond

Profit from investment in subordinated bond is accounted for on an accrual basis.

3.16.5 Fees, commission and exchange income

Fees, commission and exchange income on services provided by the Bank are recognized as and when the related services are rendered. Commission
charged to customers on letter of credit and letter of guarantee are credited to Income at the time of effecting the transactions.

3.16.6 Dividend income

Dividend income from investments is accounted for when the right to receive income is established.

3.17 Expenses
3.17.1 Management and other expenses
Expenses incurred by the Bank are recognized on an accrual basis.

3.17.2 Profit paid on deposits

As per agreement between the Mudaraba depositors and the Bank in line with Mudaraba Principle, the Mudaraba depositors are entitled to get
minimum 65% of the investment income earned through deployment of Mudaraba Fund as per weightage assigned to each type of Mudaraba
deposit. In the year 2020, the Bank paid 65% of Investment Income earned through deployment of Mudaraba Fund. Mudaraba Depositors do not
share any income derived from various banking services where their fund is not involved and any income derived from Investing Bank’s Equity and
other Cost Free Fund. Al-Wadeeah Depositors do not share any income of the Bank. Profit is paid/provided to Mudaraba Deposit accounts at
provisional rate on half-yearly/yearly/anniversary basis considering overall projected growth, performance and profitability of the Bank during the
year. Final Rates of profit of any accounting year are declared after finalization of Shari’ah Inspection report and certifying the Investment Income of
the Bank by the statutory auditors.

3.17.3 Zakat
Zakat is paid by the Bank at the rate of 2.58% (instead of 2.50% as the Bank maintains its financial statements following Gregorian Year) and
calculated on the closing balances of Share Premium, Statutory Reserve, General Reserve and Dividend Equalization Accounts. Zakat is charged in
the Profit & Loss Account of the Bank as per “Guidelines for Islamic Banking” issued by Bangladesh Bank through BRPD Circular No. 15 dated
09.11.2009. Zakat on Paid up Capital and Deposits is not paid by the Bank, since it is the responsibility of the Shareholders and Depositors
respectively.

3.18 Dividend payments

Final dividend is recognized when it is approved by the shareholders in Annual General Meeting (AGM). The proposed dividend for the year 2020,
therefore, has not been recognized as a liability however disclosed in the balance sheet in accordance with IAS-10 "Events after the Reporting
Period". Dividend payable to the Bank’s shareholders is recognized as a liability and deducted from the shareholders’ equity in the period in which
the shareholders’ right to receive the dividend is established.

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3.19 Revenue, gains, expenses & losses prohibited by Shari’ah
Income (doubtful, compensation & other earnings) which is prohibited by shari'ah are not being included in the distributable income of the Bank.

3.19.1 Doubtful income

Doubtful income which is prohibited by Shari'ah due to lapses in compliance of Shari'ah principles for investment as per Shari’ah Supervisory
Committee report is included in the investment income of the Bank and appropriate amount of corporate tax is provided on it accordingly on these
whole amount whether realized or not. It is not distributed to either depositors or shareholders of the Bank rather the amount net off corporate tax is
transferred to an account titled ""Doubtful income account' under other liabilities of the Bank (Note-17.3.2). Only realized amount of doubtful
income (on which corporate tax has already been paid due to inclusion in investment income) is then expended for charitable purposes.

From the year 2014, the Bank has decided to introduce a separate account for doubtful income after providing corporate income tax. Accordingly,
net off corporate tax amount of doubtful income has been transferred to "doubtful income account" as a charge in profit & loss account under other
provisions (Note 17.3.2).

3.19.2 Compensation
Bank charges compensation on overdue investments under Bai-modes. The amount of compensation is not included in investment income rather
kept separately under other liabilities (Note-17.5) titled as " compensation account"Applicable tax on the amount is provided/paid from those
account. Realized amount of compensation on which corporate tax has already been provided are expended for charitable purposes.

3.19.3 Other earnings

Interest received from the balances held with foreign banks and from foreign currency clearing account with Bangladesh Bank are not credited to
income, since it is not permissible as per Shari’ah. These are expended for charitable purposes after payment of corporate income tax thereon.

3.20 Inter-branch transactions

Transactions with regard to inter-branches and units are reconciled regularly and efforts are taken to minimize the unreconciled entries at the end of
the year.

3.21 Earnings per share (EPS)

Measurement
Basic EPS
The Bank calculates basic earnings per share amounts for profit or loss attributable to ordinary equity holders of the parent entity. Basic earnings per
share is calculated by dividing profit or loss attributable to ordinary equity holders of the parent entity (the numerator) by the weighted average
number of ordinary shares outstanding (the denominator) during the period.

Diluted EPS
The Bank calculates diluted earnings per share amounts for profit or loss attributable to ordinary equity holders of the parent entity. For the purpose
of calculating diluted earnings per share, the Bank adjusts profit or loss attributable to ordinary equity holders of the parent entity, and the weighted
average number of shares outstanding, for the effects of all dilutive potential ordinary shares. Dilution of EPS is not applicable for these financial
statements as there was no dilutive potential ordinary shares during the relevant periods. Hence no Diluted EPS has been calculated. Consolidated
basic EPS has also been calculated and presented in the same manner.

Presentation
The Bank presents basic and diluted earnings per in the statement of profit or loss. The Bank presents basic and diluted earnings per share with equal
prominence for all periods presented. The Bank presents basic and diluted earnings per share, even if the amounts are negative (i.e. a loss per share)."

3.22 Segment reporting

An operating segment is a component of the Bank that engages in business activities from which it may earn revenues and incur expenses and whose
operating results are regularly reviewed by the Bank's chief operating decision maker to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete financial information is available. The Bank reports separately information about each
operating segment that has been identified as an operating segment and exceeds the quantitative thresholds.

Quantitative thresholds
The Bank reports separately information about an operating segment that meets any of the following quantitative thresholds:
 Its reported revenue, including both external customers and inter segment , is 10 percent or more of the combined revenue, internal and
external, of all operating segments.
 The absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount, of (i) the combined reported profit of
all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss.
 Its assets are 10 percent or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if Management
believes that information about the segment would be useful to users of the financial statements.

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 3.23 Events after the reporting period
All material events after the reporting period that provide additional information about the Companies'/Bank's position at the balance sheet date are
reflected in the financial statements as per IAS-10 "Events after the Reporting Period". Events after the reporting period that are not adjusting events
are disclosed in the notes when material (Note - 41.0).

All other material events after the reporting period have been considered and appropriate adjustments/disclosures have been made in the financial
statements as per IAS-10 "Events after the reporting period".

Board's recommendation for dividend distribution is a common item presented in the Note 41.0.

3.24 Risk management

The Bank Companies Act, 1991 as amended and the Bangladesh Bank Regulations require the Management to ensure effective internal audit,
internal control and risk management functions of the Bank. The Management is also required to make a self-assessment on the effectiveness of
anti-fraud internal controls and report to Bangladesh Bank on instances of fraud and forgeries.

The risk of a bank is defined as the possibility of losses, financial or otherwise. The Risk Management of the Bank covers 6 (six) Core Risk Areas of
Banking industry i.e. Investment (Credit) Risk , Foreign Exchange Risk, Asset-Liability Management Risk, Prevention of Money Laundering Risk,
Internal Control & Compliance Risk and Information & Communication Technology Risk. The risk management procedures in the core risk areas
have been devised in line with the core risk management guidelines of Bangladesh Bank. All the Risk Management Guidelines are periodically
reviewed by the Bank and Bangladesh Bank periodically inspects the implementation status of these guidelines and as per the reports of Bangladesh
Bank, the Bank is well compliant in Core Risk Management activities.

In line with instruction of Bangladesh Bank, the Bank formed a Risk Management Wing (RMW) to formulate risk assessment and management
policies, methodologies, guidelines and procedures for risk identification, risk measurement, risk monitoring, deciding acceptable level of risk and
risk controlling. Risk management function involves identification, assessing, taking mitigating steps, preparing Risk Management Paper (RMP),
conducting monthly risk management meeting, stress testing and reporting the competent authority from time to time. It also reports to Bangladesh
Bank on quarterly basis along with the RMP, minutes of the monthly meeting and all other required supporting papers. Moreover, in compliance
with the “Bank Companies Act 1991 as amended”, Section 15 (Kha) and BRPD Circular No. 11 dated 27 October, 2013 of Bangladesh Bank, the Bank
has constituted a Risk Management Committee comprising of 5 (five) directors from the Board to formulate risk management policies, procedures
and oversee the risk management activities of the Bank.

The prime objective of the Risk Management is that the Bank takes well calculative Business Risk Policy for safeguarding the Bank’s capital, its
financial resources and profitability from various risks. In this context, the Bank implemented all the guidelines of Bangladesh Bank as under:

3.24.1 Internal Control and Compliance

Operational loss may arise from errors and fraud due to lack of internal control and compliance. With a view to overcome such lapses and
verification of asset quality, ensure quality of customer service, overall security arrangement, operational efficiency and compliance of regulatory
issues as guided through different circulars, manuals from Head Office and other regulatory bodies. Bank organizes its management through Internal
Control & Compliance Wing (ICCW) which consists of three Divisions namely (I) Audit & Inspection Division, (II) Compliance Division and (III)
Monitoring Division.

I. Audit & Inspection Division

Internal Audit & Inspection Division undertakes periodical and special audit of Branches, Divisions and Departments of Head Office of the Bank, its
subsidiaries and Foundation to review operational effectiveness and internal & external compliance requirements. The Bank has introduced Risk
Based Internal Audit of the branches. The Audit Committee of the Board subsequently reviews the lapses identified by Audit and Inspection
Division. The Audit Committee also reviews Bangladesh Bank Inspection Reports and other issues indicated in the guidelines prescribed by
Bangladesh Bank. Necessary steps/measures are taken on the basis of observations & suggestions of the Committee.

The Audit & Inspection Division conducts investigations against complaints received from customers, anonymous persons, management & others
and submits the reports to the competent authority. Periodical Inspection reports of Zonal Heads, Shari’ah Inspections & Branch Manager’s self
Audit are also reviewed by the Division regularly and necessary guidance and suggestions are given with continuous follow-up there against.

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II. Compliance Division
The Compliance Division handles the ‘regulatory issues of Bangladesh Bank as well as other regulatory bodies’ and submits ‘status report on
regulatory compliance’ quarterly to the Audit Committee as per BRPD Circular No.12 dated 23.12.2002.

The Compliance Division ensures that the Bank complies with all regulatory requirements while conducting its day to day business. The Compliance
Division maintains liaison with the regulatory bodies for any regulatory changes and notify the same to all concerned.

III. Monitoring Division

This Division performs the following:
i) Assesses the risk of the functional areas of the Branches described in the Departmental Control Function Checklist (DCFCL) and determines the
frequency of Audit/Inspection under risk based approach of the branches based on the gravity of risks involved.
ii) Monitors the Internal Control Functions through the Quarterly Operations Report (QOR) and other mechanisms.
iii) Checks the completion/execution of Investment Documentation.

3.24.2 Foreign Exchange Risk Management

Foreign Exchange Risk is the current or prospective risk to earnings and capital arising from adverse movements in currency exchange rates. The
Bank is exposed to profit rate risk and settlement risk on account of its foreign exchange business. Foreign Exchange business includes trading of
foreign currencies relating to import, export, remittances and other ancillary services. The Bank is dealing with a substantial volume of foreign trade
and remittance business of the country which exposes the Bank to foreign exchange risk. The Bank has adopted foreign exchange risk manual
through which the foreign exchange operations are dealt with.

Foreign Exchange risks are measured and monitored by the Treasury Division. Treasury Division consists of separate Front Office, Back Office and
Mid Office. The Treasury Front Office (Dealing Room) independently performs the deals and the Treasury Back Office is responsible for verification
of the deals and passing of their entries in the books of account.

The Foreign Exchange Risk is minimized through proper market analysis, real time pricing of Foreign Exchange, fixation of different market related
limits (daylight, overnight, stop loss and management action trigger) and counter parties credit limits set by the management and ensure adherence
to the limits by the Treasury Front Office. All Foreign Exchange transactions are revalued at weighted average exchange rate as provided by
Bangladesh Bank at the end of each month. All Nostro Accounts are reconciled regularly and outstanding entries are reviewed by the management
for its settlement/recompilation. The open position maintained by the Bank at the end of the day remains within the stipulated limit prescribed by
the Bangladesh Bank.

3.24.3 Investment (Credit) Risk Management

Investment (Credit) risk is one of the major risks faced by the Bank. This can be described as potential loss arising from the failure of counter party to
perform as per contractual agreement with the Bank. The failure may result from unwillingness or inability of the counter party in discharging his /
her financial obligation. Therefore, Bank’s Investment (Credit) Risk Management activities have been designed to address all these issues. The Bank
has designed its own operational manuals for each modes and products. It has also designed its own investment risk management guideline which is
compatible with the regulatory guideline and Islamic modes of finance. There is a dedicated committee namely "Investment Risk Management
Committee" which periodically reviews the operational manuals and risk management guidelines and ensures compliance of the same.

3.24.4 Asset Liability Management

The Asset Liability Committee (ALCO) of the Bank monitors balance sheet risk, liquidity risks, investment deposit ratio (IDR), deposit mix,
investment mix, gap analysis etc. under the leadership of MD & CEO of the Bank. Asset Liability Committee (ALCO) reviews liquidity requirement
of the Bank, the maturity of assets and liabilities, deposit and investment pricing strategy, sensitivity of assets and liabilities, management
indicators/ratios and the liquidity contingency plan. The primary objective of the ALCO is Liquidity management, Fund management and
Assets-Liabilities matching. The committee also monitors and averts significant volatility in Net Investment Income (NII), investment value and
exchange earnings.

3.24.5 Prevention of Money Laundering

Money Laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in prevention of money laundering.
For mitigating the risks, Islami Bank Bangladesh Limited has formed 10 (ten) members Central Compliance Committee (CCC) under the leadership
of a senior Deputy Managing Director of the Bank as the Chief Anti Money Laundering Compliance Officer (CAMLCO) at Head Office. Apart from
that, Branch Compliance Units (BCU) and Zone Compliance Units (ZCU) are also functioning under the leadership of Branch Anti Money
Laundering Compliance Officer (BAMLCO) at branch level and Zone Anti Money Laundering Compliance Officer (ZAMLCO) at Zonal Offices.

The Bank has introduced a comprehensive AML Policy namely "POLICY AND GUIDELINES FOR PREVENTION OF MONEY LUANDERING
AND TERRORIST FINANCING RISK MANAGEMENT" under the light of local Laws, Rules & Regulations as well as international best AML
practices duly approved by the Board of Directors, IBBL.

As per approved Policy, IBBL has been conducting many time-befitting programs to prevent Money Laundering & Terrorist Financing which include
among others (a) Central Customer On-boarding, (b) Electronic Know Your Customer (e-KYC), (c) KYC Remediation including all Legacy
Accounts, (d) Automated Transaction Monitoring and filing of Suspicious Transaction Report (STR)/Suspicious Activity Report (SAR) to
Bangladesh Financial Intelligence Unit (BFIU), (e) Electronic Record Keeping, (f) Building of employee awareness and skill on prevention of Money
Laundering & Terrorist Financing round the year through training-seminar-symposium, workshop held both home and abroad, (g) Maintaining
Self-Assessment Report by every branch, (h) Conducting Independent Testing by the Internal Auditors of the Bank to assess the correctness and
accuracy of the activities of the branches on AML & CFT as instructed by BFIU, the local AML & CFT regulator of Bangladesh and so on.

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 3.24.6 Information and Communication Technology Risk Management
The Bank has adequately addressed Information and Communication Technology (ICT) Risk Management. It is an in-depth exercise and continual
process. The ICT Risk Management exercise mainly includes minimizing financial and image loss to the institution in all events such as natural
disasters, technological failures, human errors etc. The Bank uses own developed Core Banking Software to perform all types of transactions
including local/ online/ internet in a secured way. To take care of its core banking system, a separate security module has been incorporated in the
software which manages different roles/privileges for different users. All financial transactions can be tracked for future audit purposes.

The Bank uses Central Data Centre to replicate transactions in branches in case of data failure or inconsistencies. Data travelling through network
uses encryption and decryption mechanism.

In line with the Bangladesh Bank directives, the Bank has approved its own ICT policies for its operations and services. Under these policy
guidelines, a security policy has also been worked out. To abide by and adhere to what is laid down in the policy; the implementation has been made
through Active Directory Services (ADS), Password Policy, Kerberos Policy, Audit Policy, Group Policy, User Rights, Permission Policy etc. In order
to secure network resources from public network, the Bank has introduced Virtual Private Network (VPN), Access Control List (ACL), IP filtering
and TCP/UDP service blocking through router and firewall devices. It has already centralized the administrative control to access the network,
mailing system and internet. The Bank has introduced Business Continuity Plan (BCP) for its entire network and trained the officials to cope up with
any contingencies.

3.24.7 Internal audit

Internal Audit is used as an important element to ensure good governance of the Bank. Internal Audit activity of the Bank is effective and it provides
senior management with a number of important services. These include detecting and preventing fraud, testing internal control, and monitoring
compliance with own policies & procedures, applicable rules & regulations, instructions/ guidelines of regulatory authority etc.

During the year 2020, Audit & inspection Division of Internal Control & Compliance Wing conducted inspection on all of the Branches/ Divisions of
Head Office of the Bank and submitted reports presenting the findings of the audits/ inspections. Necessary control measures and corrective actions
have been taken on the suggestions or observations made in these reports. The reports or key points of the reports have also been discussed in the
meetings of the Audit Committee of the Board and necessary steps have been taken according to the decision of the said Committee for correct
functioning of Internal Controls & Compliance.

3.24.8 Fraud and forgeries

Fraud means willful or criminal deception intended to result in financial or personal gain. It will never be possible to eliminate all fraud and no
system is completely fraud proof, since many fraudsters are able to bypass control systems put in place. The Bank continuously pays attention to
implement and improve the anti-fraud internal controls for prevention of fraud and forgery. The Bank assesses /evaluates the effectiveness of its
Anti-Fraud Internal Control measures on quarterly basis as per the items/ areas mentioned in the prescribed checklist of Bangladesh Bank. During
the year 2020, no fraud has been detected by the Bank.

3.25 Credit rating report

Alpha Credit Rating Limited was engaged by the Bank for the purpose of rating the Bank since 2017 as per Bangladesh Bank BRPD Circular No.06
dated 5 July 2006. Alpha assigned AAA (Triple A) rating in the long term (indicates exceptionally strong capacity) and ST-1 in the short term
(highest certainty of timely repayment) to the Bank based on the financials up to 31 December 2019.

3.26 Regulatory and legal compliance

Among others, the Bank complied with the requirements of the following circular, rules and regulations:
a) The Bank Companies Act, 1991 as amended
b) The Companies Act, 1994
c) BRPD Circular No. 14 dated 25.06.2003 and “Guidelines for Islamic Banking” issued by Bangladesh Bank through BRPD Circular No. 15 dated
09.11.2009
d) Other circulars, rules and regulations issued by Bangladesh Bank from time to time
e) The Securities and Exchange Rules, 1987
f) The Securities and Exchange Ordinance, 1969
g) The Securities and Exchange Commission Act, 1993
h) Income Tax Ordinance, 1984 as amended
i) Value Added Tax and Supplementary Duty Act, 2012
j) Standards issued by AAOIFI
k) The Stamp Act-1899
l) The Customs Act-1969
m) The Money Laundering Prevention Act, 2012
n) The Anti Terrorism Act, 2009 (Amendment 2013) etc.

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4.0 Compliance with Financial Reporting Standards as applicable in Bangladesh
The Companies/Bank complied, as per Para 12 of Securities & Exchange Rule 1987, with the following International Financial Reporting Standards
(IFRSs) and International Accounting Standards (IASs) as adopted by The Institute of Chartered Accountants of Bangladesh (ICAB) in preparing the
financial statements of the Bank subject to departure described in note - 2.1, where we have followed Bangladesh Bank guidelines:

Sl. No. IFRS No. IFRS Title Compliance Status

1 1 First-time adoption of International Financial Reporting Standards Not Applicable
2 2 Share-based Payment Not Applicable
3 3 Business Combinations Not Applicable
4 4 Insurance Contracts Not Applicable
5 5 Non-current Assets Held for Sale and Discontinued Operations Not Applicable
6 6 Exploration for and Evaluation of Mineral Resources Not Applicable
7 7 Financial Instruments: Disclosures Complied
8 8 Operating Segments Complied
9 9 Financial Instruments Complied
10 10 Consolidated Financial Statements Complied
11 11 Joint Arrangements Not Applicable
12 12 Disclosure of Interests in other Entities Complied
13 13 Fair Value Measurement Complied
14 14 Regulatory deferral accounts Not Applicable
15 15 Revenue from contracts with customers Complied
16 16 Lease Complied

Sl. No. IAS No. IAS Title Compliance Status

1 1 Presentation of Financial Statements Complied
2 2 Inventories Not Applicable
3 7 Statement of Cash Flows Complied
4 8 Accounting Policies, Changes in Accounting Estimates and Errors Complied
5 10 Events after the Reporting Period Complied
6 12 Income Taxes Complied
7 16 Property, Plant & Equipment Complied
8 19 Employee Benefits Complied
9 20 Accounting for Government Grants and Disclosure of Government Assistance Not Applicable
10 21 The Effects of Changes in Foreign Exchange Rates Complied
11 23 Borrowing Costs Not Applicable
12 24 Related Party Disclosures Complied
13 26 Not Applicable
14 27 Separate Financial Statements Complied
15 28 Investments in Associates and Joint Ventures Not Applicable
16 29 Not Applicable
17 32 Financial Instruments: Presentation Complied
18 33 Earnings Per Share Complied
19 34 Interim Financial Reporting * Complied
20 36 Impairment of Assets Complied
21 37 Provisions, Contingent Liabilities and Contingent Assets Complied
22 38 Intangible Assets Complied
23 39 Financial Instruments: Recognition and Measurement Complied
24 40 Investment Property Not Applicable
25 41 Agriculture Not Applicable

(*) Complied while the quarterly and half-yearly interim financial reports were prepared during the year as per regulations of Bangladesh Securities and
Exchange Commission (BSEC).

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 5.0 Audit committee
The Audit Committee of the Board was duly formed by the Board of Directors of the Bank in accordance with BRPD circular No.11, dated 27 October
2013 of Bangladesh Bank. Pursuant to the BSEC notification no. BSEC/CMRRCD/2006-158/207/Admin/80, dated 03 June 2018, on Corporate
Governance, the current committee is constituted with the following 5 (five) members of the Board:

Status with the

Sl. No. Name of the Member Status with the Bank Remarks
Committee
1 Mohammad Solaiman Independent Director Chairman B.Com, FCA
2 Mohammed Shahabuddin Vice-Chairman Member Msc. & LLB
3 Dr Qazi Shahidul Alam Director Member MBBS, MS, FICS
4 Khurshid Ul Alam Director Member B. A (Hon’s) & MA in Economics
5 Mohammed Nasir Uddin FCMA Director Member M. Com in Accounting, FCMA

04 (four) meetings were held for reviewing the Financial Statements out of total 09 (nine) meetings held in the year 2020. The Audit Committee
reviewed the Financial Statements of 2020 on 27 April 2021.

6.0 Related party disclosures

As per IAS-24 “Related Party Disclosures”, a related party is a person or entity that is related to the entity (i.e. IBBL) that is preparing its financial
statements. Related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of
whether a price is charged as per IAS-24.

Related Parties include the Bank's Directors, key management personnel, associates, companies under common directorship etc. as per IAS-24
“Related Party Disclosures”. All transactions involving related parties arising in the normal course of business are conducted at arm’s length at normal
commercial rates on the same terms and conditions as third party transactions using valuation modes, as admissible.

6.1 Lending policy for transactions with Bank related person/related parties
Transactions with Bank related person/related parties including Directors are made as per rules and regulations of the Bank Company Act, 1991 as
amended and as per circulars issued by Bangladesh Bank time to time including the following general rules:
i) Terms & conditions for financial transaction with bank related person/related parties will not be easier than other persons i.e. other investment
clients.
ii) Prior approval from the majority of Board of Directors shall be required for all financial transactions with bank related person/related parties.
iii) The Bank shall not allow funded facilities exceeding 10% of Tier-I capital to the Bank related persons/related parties; real investment facilities shall
be considered deducting encashable securities from funded investment.
6.2 The Name of Directors along with all related Firms/ Companies/ Institutions/ Parties: As at 31.12.2020

Sl. Name of the related Firms/ Companies/ Institutions/

Name of the Directors
No
1 Mohammad Nazmul Hassan
2 Yousif Abdullah A AlRajhi
3 Mohammed Shahabuddin
4 Md Salim Uddin
5 Mohammad Solaiman
6 Abdul Matin
7 Areef Suleman
8 Mohammad Sirajul Karim
9 Md Kamal Uddin
10 Mohammad Joynal Abedin
11 Dr Qazi Shahidul Alam
Status with the Bank Remarks
Parties etc.
Armada Spinning Mills Limited, Former Professor,
Chairman
Institute of Nutrition and Food Science, University of Dhaka.
General Manager of Al-Rajhi Co. for Industry & Trade Foreign Director
Vice-Chairman
JMC Builders Limited, Commissioner (Ex) Anti
Vice-Chairman
Corruption Commission
Chairman Mortaza Assets Limited, Professor, Department of
Executive Committee Accounting, University of Chittagong, Chattogram
Public Accountant, M Solaiman & Co., Chartered Independent Director
Chairman Accountants; Ex President, Taxes Appellate
Audit Committee Tribunal, Internal Resource Division, Ministry of
Finance, Govt. of Bangladesh
Chairman Risk Management Paradise International Ltd.
Committee
Director Islamic Development Bank Foreign Director
Excel Dyeing & Printing Ltd., Professor, Primeasia
Director
University, Banani, Dhaka
Professor, Department of International Business, Independent Director
Director
University of Dhaka.
ABC Ventures Limited, Ex Deputy Managing
Director
Director, Bangladesh Krishi Bank
Platinum Endevours Ltd.
Director

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 Sl. Name of the related Firms/ Companies/ Institutions/
Name of the Directors Status with the Bank Remarks
No Parties etc.
12 Musaid Abdullah A AlRajhi Arabsas Travel & Tourist Agency, K.S.A., GM, Foreign Director
Director Abdullah Abdul Aziz Al Rajhi & Sons Real Estate
Development Co., K.S.A.
13 Syed Abu Asad Excelsior Impex Company Limited, Ex Managing
Director
Director, Rajshahi Krishi Unnayan Bank
14 Tanveer Ahmad Marsa Food & Beverage Limited , Managing Director,
Director
15 Mohammad Quamrul Hasan Grand Business Limited, Ex Managing Director &
Director
CEO, Jamuna Oil Co. Ltd., Chattogram
16 Dr Mohammad Saleh Jahur Professor of Accounting and Finance, University of Independent Director
Director
Chittagong, Chittagong, Bangladesh
17 Md Fashiul Alam Ex Vice Chancellor, Feni University & Dean, faculty Independent Director
Director
of Business Studies, Port City International University
18 Khurshid Ul Alam Lionhead Business Resources Ltd. & Ex Independent
Director and Chairman of Audit Committee, Pubali
Director
Bank Limited, Ex DMD, Pubali Bank Limited and Ex
Executive Director, Bangladesh Bank
19 Mohammed Nasir Uddin BLU International Limited & Group GM (Chief of
Director
FCMA Finance & Accounts) – Bay Group, Dhaka
20 Mohammad Zakir Hossain Deputy Managing Director, Investment Corporation
Director
of Bangladesh
21 Md. Mahbub-ul-Alam Managing Director & CEO Islami Bank Bangladesh Limited

6.3 Related party balances and transactions

6.3.1 Related party balances
a) Nature and type of balances and transactions of related parties (Directors) of the Bank are as follows: Amount in Taka
Name of the Relationship Realised
Name Outstanding Disbursement/ Outstanding Provision Particulars
SL. Account/ of the Director during
of the Purpose balance as on charged during balance as on required & of value of
No. Firm/Trust with the Firm/ Position the year
Director 01.01.2019 the year 2019 31.12.2019 maintained securities
etc. Trust etc. 2019
1 2 3 4 5 6 7 8 9 10=7+8-9 11 12

Nill

Total - - - - -

(b) Other type of balances of related parties of the Bank are as follows:
Amount in Taka
SL. Name of the related Nature of Closing balance
Nature of transactions
No. parties relationship 31.12.2020 31.12.2019
1 Islami Bank Parent- subsidiary Investment in share capital by IBBL 2,699,856,000 2,699,796,000
Securities Limited Bank balance 44,714,569 8,594,822
(IBSL) MTDR balance 429,960,000 229,914,000
Quard balance - 90,000,000
Profit receivable 4,036,945 1,410,411
Mudaraba investment 4,700,000,000 4,700,000,000
Accounts payable 1,934,171 590,024
Bank charge payable - -
Dividend payable - -
2 Islami Bank Capital Parent- subsidiary Investment in share capital by IBBL 299,993,000 299,993,000
Management Limited Bank balance 10,332,271 8,123,579
(IBCML MTDR balance 270,763,288 136,506,334
Dividend payable - -

ANNUAL
REPORT 289
2020
 6.3.2 Related party transactions
Nature and type of related party transactions of the Bank during the year 2020 are as follows:
Amount in Taka

SL. Name of the related

Nature of relationship Nature of transaction 2020
No. party

Deposit to Savings account maintained with IBBL 1,845,988,228

Withdraw from Savings account maintained with IBBL 1,805,440,554

Bank charge paid to IBBL 4,189

Islami Bank
1 Securities Limited Parent- Subsidiary Payment against office rent 392,251
(IBSL)
Tax deduction at source against MTDR 913,751
Profit paid on investment against MTDR 8,012,759

Profit withdrawn against MTDR 8,012,759

Chief Executive Short-term employee benefits (Salary and allowance) 2,945,928

2 Key Management Personnel
Officer

Payment of interim dividend to IBBL -

Islami Bank Capital
3 Management Limited Parent- Subsidiary Profit against MTDR 9,183,112
(IBCML)
Profit against MSND 22,666

4 Directors of the Bank Director Fees, TA/DA/hotel fare and other expenses 8,894,890

6.4 Other related party disclosures

1. There was no contracts of significance wherein a director has interests subsisted at any time during the year or at the end of the year.
2. Investment to related parties is effected as per requirement of section 27 of Bank Company Act, 1991 as amended.
3. Share issued to Directors and Executives without consideration or exercisable at discount is Nil.
4. Other disclosures are not applicable as required by BRPD Circular No. 14 dated 25 June, 2003 and BRPD Circular No. 15 dated 09 November, 2009.

ANNUAL
290 REPORT
2020
 31.12.2020 31.12.2019
Taka Taka
7.0 Cash in hand
Cash in hand (including foreign currency) (Note. 7.1) 18,747,303,346 15,023,787,386
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) (Note. 7.2) 195,037,023,715 60,829,645,940
Total 213,784,327,061 75,853,433,326

7.1 Cash in hand (including foreign currency)

In local currency 18,593,381,057 14,978,101,375
In foreign currency 153,922,289 45,686,011
Total 18,747,303,346 15,023,787,386

7.2 Balance with Bangladesh Bank & its agent bank(s) (including foreign currency)
(a) Balance with Bangladesh Bank
In local currency 189,469,886,735 57,411,702,281
In foreign currency 2,887,250,623 829,388,094
Sub-total 192,357,137,358 58,241,090,375

(b) Balance with Sonali Bank Ltd. (as agent of Bangladesh Bank)
In local currency 2,679,886,356 2,588,555,565
In foreign currency - -
Sub-total 2,679,886,356 2,588,555,565
Total (a+b) 195,037,023,715 60,829,645,940

7.3 Cash Reserve Requirement (CRR) & Statutory Liquidity Ratio (SLR)
Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with the Section 25 & 33 of
the Bank Company Act, 1991 as amended and the Instruction of Bangladesh Bank Order 1972, Article 36, clause (1).

7.3.1 Cash Reserve Requirement (CRR)

The Cash Reserve Requirement (CRR) of the Bank was 4.00% of average total demand and time liabilities on bi-weekly basis with a provision of
minimum 3.50% on daily basis as per Bangladesh Bank MPD Circular No. 03 dated 09 April 2019. The cash reserve maintained by the Bank was in
excess of the statutory requirement throughout the year.

Position of Cash Reserve Requirement (CRR)

Required CRR (4.00% of average total time and demand liabilities including 2.00% of OBU) 44,446,316,000 51,116,652,000
Actual reserve held with Bangladesh Bank in local currency (Note 7.2) * 189,441,886,735 57,383,702,281
Excess/(shortfall) 144,995,570,735 6,267,050,281
* Lien against TT discounting facilities of Tk. 28,000,000 has not been considered as CRR.

7.3.2 Statutory Liquidity Ratio (SLR)

The requirement of Statutory Liquidity Ratio (SLR) of the Bank was 5.50% on daily basis excluding CRR wherein the excess CRR amount shall be
included while calculating SLR from 01.02.2014 as per DOS Circular No. 01 dated 19 January 2014. The reserve maintained by the Bank was in excess
of the statutory requirement throughout the year.

Position of Statutory Liquidity Ratio (SLR)

Required Reserve (5.50% of average total time and demand liabilities including OBU) 61,615,960,000 51,116,652,000
Actual reserve maintained (Note- 7.3.2.1) 222,482,478,438 63,974,145,232
Excess/(shortfall) 160,866,518,438 12,857,493,232

7.3.2.1 Components of Statutory Liquidity Ratio (SLR)

Cash in hand including foreign currency (Note- 7.1) 18,747,303,346 15,023,787,386
Excess CRR amount (Note- 7.3.1) 144,995,570,735 6,267,050,281
Balance with Sonali Bank as Agent Bank of BB (Note- 7.2.b) 2,679,886,356 2,588,555,565
Balance with Islamic Refinance Fund A/c (Note- 9) - -

Unencumbered approved securities :

Bangladesh Shipping Corporation (Note -10.1) 100,128,000 94,752,000
Bangladesh Government Islamic Investment Bond (Note -10.1) 52,000,000,000 40,000,000,000
Bangladesh Government Sukuk Bond (Islamic Bond) 3,959,590,000 -
Total 222,482,478,438 63,974,145,232

ANNUAL
REPORT 291
2020
 31.12.2020 31.12.2019
Taka Taka
7(a) Consolidated cash in hand

7(a)(i) Cash in hand (including foreign currency)

Islami Bank Bangladesh Limited 18,747,303,346 15,023,787,386
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited 17,779 220,464
Sub total 18,747,321,125 15,024,007,850

7(a)(ii) Balance with Bangladesh Bank & its agent bank(s) (including foreign currency)
Islami Bank Bangladesh Limited 195,037,023,715 60,829,645,940
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Sub total (ii) 195,037,023,715 60,829,645,940
Total (i+ii) 213,784,344,840 75,853,653,790

8.0 Balance with other banks & financial institutions

8.i In Bangladesh

In current account 834,137,848 1,281,518,298

OBU's balance with treasury division, IBBL (Note-2.0 _OBU) 152,561,168 824,047,444
In Mudaraba savings & MTDR account with other islamic banks/financial institutions 44,050,971,403 64,752,981,308
Sub total 45,037,670,420 66,858,547,050
Less: OBU's balance with treasury division, IBBL 152,561,168 824,047,444
Sub total (i) 44,885,109,251 66,034,499,606

8.ii Outside Bangladesh (Note 8.1)

In current account 16,547,689,979 20,101,992,939
In Mudaraba savings & MTDR account with other islamic banks/financial institutions - -
Sub total (ii) 16,547,689,979 20,101,992,939
Grand total (i+ii) 61,432,799,230 86,136,492,545

8.1 Currency-wise amount and exchange rate of Balance with other banks & financial institutions outside Bangladesh

Foreign currency Amount in F.C Exchange rate 31.12.2020 31.12.2019

US Dollar 173,825,460.39 84.80 14,740,468,571 19,010,118,521
Great Britain Pound (GBP) 723,587.63 114.45 82,812,144 39,403,552
Saudi Riyal 3,905,139.19 22.60 88,242,868 53,074,048
EURO 6,365,287.39 103.87 661,175,132 475,569,349
YEN 15,156,775.00 0.82 12,411,883 2,945,086
Canadian Dollar 102,354.55 66.17 6,772,555 709,753
Swiss Franc 98,138.38 95.87 9,408,899 3,893,218
Singapore Dollar 723,268.42 63.88 46,205,714 66,373,566
China Currency (CNY) 101,059.44 12.98 1,312,085 1,220,808
ACU Dollar 10,346,045.17 84.80 877,348,769 331,170,218
AED 922,722.03 23.33 21,531,359 117,514,820
Total 16,547,689,979 20,101,992,939

8.2 Maturity - wise classification balance with other banks & financial institutions
Repayable on demand 27,000,065,655 28,061,492,545
With a residual maturity of
Up to 1 Month 8,607,689,979 6,850,000,000
Over 1 month but not more than 3 months 24,275,022,345 49,555,000,000
Over 3 months but not more than 1 year 1,550,021,251 1,670,000,000
Over 1 year but not more than 5 years - -
More than 5 years - -
Total 61,432,799,230 86,136,492,545

ANNUAL
292 REPORT
2020
 31.12.2020 31.12.2019
Taka Taka
8(a) Consolidated Balance with other banks & financial institutions
8(a)(i) In Bangladesh
Islami Bank Bangladesh Limited 44,885,109,251 66,034,499,606
Islami Bank Securities Limited 5,448,527,092 5,297,980,139
Islami Bank Capital Management Limited 371,095,559 374,629,913
Inter-company balances (818,688,740) (383,728,759)
Sub-total (i) 49,886,043,162 71,323,380,899
8(a)(ii) Outside Bangladesh
Islami Bank Bangladesh Limited 16,547,689,979 20,101,992,939
Islami Bank Securities Limited - -
Islami Bank Capital Management Limited - -
Sub-total (ii) 16,547,689,979 20,101,992,939
Total (i+ii) 66,433,733,141 91,425,373,838
9.0 Placement with banks & other financial institutions
Placement to OBU by Treasury Division, IBBL (Note-6.0 _OBU) 15,554,797,835 8,904,413,666
Placement to AD Branches for MDB in FC by OBU (Note-3.0 _OBU) 3,217,847,934 4,495,813,854
Placement to Islamic Refinance Fund Account (*) - -
18,772,645,769 13,400,227,520
Less: Placement to OBU by Treasury Division, IBBL 15,554,797,835 8,904,413,666
Less: Placement to AD Branches for MDB in FC by OBU 3,217,847,934 4,495,813,854
Total - -
10.0 Investments in shares & securities
As at December 2020
Particulars No. of share as Face Value/
at 31 Dec. 2020 Average cost Total Cost price Market Value Un-realized gain/Loss Remarks
10.1 Government
Bangladesh Shipping Corporation 2,240,000 44.70 100,128,000 100,128,000 - Quoted
MPETROLEUM 40,000 225.24 9,009,645 7,920,000 (1,089,645) Quoted
BSCCL 139,128 131.92 18,353,166 23,109,161 4,755,995 Quoted
Karmasangsthan Bank 100,000 100.00 10,000,000 10,000,000 - Un-Quoted
Central Depository Bangladesh Ltd. 2,284,721 2.75 6,277,770 6,277,770 - Un-Quoted
Bangladesh Government Sukuk Bond 395,959 9,999.99 3,959,590,000 3,959,590,000 - Un-Quoted
(Islamic Bond)
Bangladesh Government Islamic 10 5,200,000,000 52,000,000,000 52,000,000,000 - Un-Quoted
Investment Bond (Islamic Bond)
Sub Total Government 5,199,818 56,103,358,581 56,107,024,931 3,666,350
10.2 Other than Government
i) Subsidiary Companies
Islami Bank Securities Limited 2,699,796 1,000.00 2,699,796,000 2,699,796,000 - Un-Quoted
Islami Bank Capital Management Ltd. 299,993 1,000.00 299,993,000 299,993,000 - Un-Quoted
Sub total (i) 2,999,789 2,999,789,000 2,999,789,000 -
ii) Mutual Funds
SEML IBBL Shari'ah Fund 50,000,000 10.00 500,000,000 520,000,000 20,000,000 Quoted
UFS-IBBL Shari'ah Unit Fund 50,000,000 10.00 500,000,000 471,500,000 (28,500,000) Un-Quoted
CAPM IBBL Shari'ah Fund 49,500,000 10.00 495,000,000 1,123,650,000 628,650,000 Quoted
NAM IBBL Islamic Mutual Fund 10,651,731 9.99 106,399,998 94,587,371 (11,812,627) Un-Quoted
AT Capital Shari'ah Unit Fund 5,010,020 9.98 50,000,000 52,755,511 2,755,511 Un-Quoted
Capitec Padma PFS Unit Fund 10,000,000 10.00 100,000,000 96,300,000 (3,700,000) Un-Quoted
UFS-Padma Life Ialami Unit Fund 15,000,000 10.00 150,000,000 149,400,000 (600,000) Un-Quoted
Capitec IBBL Shariah Unit Fund 3,750,000 10.00 37,500,000 37,500,000 - Un-Quoted
Sub Total (ii) 193,911,751 1,938,899,998 2,545,692,882 606,792,884
iii) Foreign Share
APIF of IsDB 983,211 1,000.00 983,211,300 983,211,300 - Un-Quoted
Sub Total (iii) 983,211 983,211,300 983,211,300 -
iv) Subordinated Debt
Mudaraba Subordinated Debt of 960 1,000,000 960,000,000 960,000,000 - Un-Quoted
Social Islami Bank Ltd. (1st)
Mudaraba Subordinated Debt of 400 250,000 100,000,000 100,000,000 - Un-Quoted
Social Islami Bank Ltd. (1st)
Mudaraba Subordinated Debt Social 2,000,000 2,000,000,000 2,000,000,000 - Un-Quoted
Islami Bank Ltd. (2nd) 1,000
Mudaraba Subordinated Debt of First 325 10,000,000 3,250,000,000 3,250,000,000 - Un-Quoted
Security Islami Bank Ltd. (3rd)
SIBL Mudaraba Perpetual Boad 150,000 10,000 1,500,000,000 1,500,000,000 - Un-Quoted
FSIBL Mudaraba Perpetual Boad 180,000 10,000 1,800,000,000 1,800,000,000 - Un-Quoted
Mudaraba Subordinated Debt of Union Bank Ltd. 100 10,000,000 1,000,000,000 1,000,000,000 - Un-Quoted
Sub Total (iv) 332,785 10,610,000,000 10,610,000,000 -

ANNUAL
REPORT 293
2020
 As at December 2020
Particulars No. of share as Face Value/
at 31 Dec. 2020 Average cost Total Cost price Market Value Un-realized gain/Loss Remarks

v) Others
MSF Assets Management Ltd 500,000 10.00 5,000,000 5,000,000 - Un-Quoted
Bangladesh Aroma Tea Co 1,570 100.00 157,000 - (157,000) De-listed
ACMELAB 814,167 101.13 82,338,788 60,818,275 (21,520,513) Quoted
ACTIVEFINE 875,000 33.57 29,372,442 14,787,500 (14,584,942) Quoted
APEXFOOT 22,161 353.78 7,840,046 4,882,068 (2,957,978) Quoted
ACI 31,684 362.63 11,489,511 7,794,264 (3,695,247) Quoted
AFC AGRO 432,630 38.21 16,530,864 7,354,710 (9,176,154) Quoted
ADVENT 385,000 26.22 10,093,001 8,778,000 (1,315,001) Quoted
APOLOISPAT 583,250 13.62 7,944,812 3,791,125 (4,153,687) Quoted
ALARABANK 279,125 20.39 5,691,713 6,196,575 504,862 Quoted
AGNISYSL 200,000 20.43 4,086,445 3,780,000 (306,445) Quoted
BBS 998,617 36.76 36,705,047 17,475,798 (19,229,249) Quoted
BBSCABLES 102,850 89.65 9,220,701 5,636,180 (3,584,521) Quoted
BSRMSTEEL 323,334 91.55 29,600,989 13,741,695 (15,859,294) Quoted
BATASHOE 9,600 1,278.82 12,276,674 6,745,920 (5,530,754) Quoted
BEACONPHAR 120,000 78.13 9,375,925 9,408,000 32,075 Quoted
BXPHARMA 20,000 146.21 2,924,107 3,810,000 885,893 Quoted
BPML 10,807 80.00 864,560 479,831 (384,729) Quoted
CONFIDCEM 179,000 133.59 23,913,252 21,712,700 (2,200,552) Quoted
DOREENPOWER 156,356 67.13 10,496,930 9,537,716 (959,214) Quoted
DAFODILCOM 10,000 73.30 733,028 738,000 4,972 Quoted
ESQUIRENIT 41,780 45.00 1,880,100 1,098,814 (781,286) Quoted
GP 468,591 349.39 163,722,032 162,647,936 (1,074,096) Quoted
ETL 384,615 11.10 4,270,925 3,153,843 (1,117,082) Quoted
GENNEXT 1,391,500 10.03 13,952,950 5,426,850 (8,526,100) Quoted
GENEXIL 280,000 60.93 17,059,628 15,400,000 (1,659,628) Quoted
IFADAUTOS 537,132 87.50 46,997,200 25,352,630 (21,644,570) Quoted
ITC 5,729 34.42 197,219 183,901 (13,318) Quoted
MARICO 6,369 2,029.50 12,925,901 13,622,017 696,116 Quoted
HEIDELBCEM 77,148 555.17 42,830,127 11,541,341 (31,288,786) Quoted
EXIMBANK 1,750,000 13.01 22,764,658 20,650,000 (2,114,658) Quoted
LHBL 505,000 75.71 38,234,690 24,139,000 (14,095,690) Quoted
LINDEBD 37,151 1,430.28 53,136,260 47,594,146 (5,542,114) Quoted
MJLBD 419,508 106.69 44,757,105 32,260,165 (12,496,940) Quoted
MHSML 382,347 26.52 10,139,609 5,620,501 (4,519,108) Quoted
NAVANACNG 54,022 56.29 3,040,665 2,004,216 (1,036,449) Quoted
OLYMPIC 232,233 264.97 61,535,209 44,379,726 (17,155,483) Quoted
PTL 296,951 61.07 18,134,003 15,738,403 (2,395,600) Quoted
QUASEMIND 459,441 58.84 27,031,794 21,134,286 (5,897,508) Quoted
QUEENSOUTH 173,460 36.10 6,261,451 4,457,922 (1,803,529) Quoted
ROBI 271,254 10.00 2,712,540 8,083,369 5,370,829 Quoted
RUNNERAUTO 5,735,100 42.86 245,790,000 291,916,590 46,126,590 Quoted
SQURPHARMA 702,538 195.68 137,474,340 154,207,091 16,732,751 Quoted
SHASHADNIM 122,475 49.22 6,027,932 2,645,460 (3,382,472) Quoted
IBP 222,360 29.73 6,610,288 4,247,076 (2,363,212) Quoted
SINGERBD 163,765 176.63 28,926,099 28,757,134 (168,965) Quoted
SAPORTL 212,160 49.71 10,546,418 6,576,960 (3,969,458) Quoted
SPCL 244,326 116.05 28,353,492 17,909,096 (10,444,396) Quoted
SAIFPOWER 90,368 30.02 2,713,166 1,626,624 (1,086,542) Quoted
SUMITPOWER 1,182,393 42.86 50,681,377 45,995,088 (4,686,289) Quoted
SQUARETEXT 100,000 54.86 5,486,392 2,980,000 (2,506,392) Quoted
SILVAPHL 500,010 20.97 10,485,047 9,150,183 (1,334,864) Quoted
RINGSHINE 233,531 8.61 2,010,600 1,494,598 (516,002) Quoted
TALLUSPIN 244,528 15.58 3,809,976 1,100,376 (2,709,600) Quoted
UPGDCL 87,500 285.92 25,017,992 23,056,250 (1,961,742) Quoted
Sub total (v) 23,670,436 1,472,173,020 1,268,619,949 (203,553,070)
Sub total Other than Government (i- v) 221,897,972 18,004,073,318 18,407,313,131 403,239,814
Total (10.1+10.2) 227,097,791 74,107,431,899 74,514,338,062 406,906,164

ANNUAL
294 REPORT
2020
 Islami Bank Capital Management Limited
Notes to the Financial Statements
As at and for the year ended 31 December 2020
1. Establishment and status of Islami Bank Capital Management Limited

1.1 Company Profile

Islami Bank Capital Management Ltd. (IBCML) was incorporated on 01 April, 2010 under the Companies Act, 1994 as a Public Limited Company. It is
a subsidiary company of Islami Bank Bangladesh Limited. Islami Bank Bangladesh Limited holds all the shares of the company except 7 shares which are
held by 7 individuals. IBCML has been established as per Bangladesh Bank letter # BRPD (R-1) 717/2010-47 dated 7 February 2010. The registered office
of the company is situated at 63 Dilkusha C/A (5th Floor), Dhaka-1000. The Company obtained license from Bangladesh Securities and Exchange
Commission (BSEC) vide its Registration Certificate No. MB/95/2019 on 31.03.2019 to carry out its merchant banking operations.

1.2 Nature of Business

The principal activities of the company are to carry on business of Merchant Banking in all its aspects including Management of issue, public offer of
shares, stocks, debentures, bonds, etc.; sale or purchase of securities or transfer thereof; fund management for clients, underwriting of shares, stocks,
debentures, bonds, etc.; managing portfolio investments of any person or company by investment in various avenues, etc. The Company starts its
merchant banking business on 30.09.2019. Bangladesh Securities and Exchange Commission (BSEC) has issued the Depository Participants (DP) license
in favour of IBCML in July, 2020.

2. Basis of Preperation, Presentation and Disclosures of Financial Statements

2.1 Statement of Compliance

The Financial Statements have been prepared in compliance with the requirement of the International Financial Reporting Standards (IFRS) which also
cover International Accounting Standards (IASs), the companies Act 1994, Bangladesh Securities and Exchange ( Merchant Banker and Portfolio
Manager ) Rules 1996 and other applicable Laws and Regulations.

2.2 Basis of Measurements

These Financial Statements have been prepared on accrual basis of accounting following going concern concept under historical cost convention.

2.3 Functional and presentation currency

These financial statements are prepared in Bangladesh Taka (Taka/Tk.), which is the company’s functional currency. All financial information presented
in Taka has been rounded off to the nearest integer.

2.4 Use of estimates and judgments

Preparing the interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of Assets, Liabilities, Income and Expenses. Actual results may differ from these estimates.

2.5 Applicable accounting standards

The following IASs and IFRSs are applicable for the financial statements for the year ended under review:

IAS - 1 Presentation of Financial Statements

IAS - 7 Statements of Cash Flows
IAS - 8 Accounting Policies, Changes in Accounting Estimates and Errors
IFRS - 9 Financial Instruments
IAS - 12 Income Taxes
IFRS - 15 Revenue from Contracts with Customers
IFRS - 16 Leases
IAS - 24 Related Party Disclosures
IAS - 37 Provisions, Contingent Liabilities and Contingent Assets

2.6 Comparative Information and rearrangement thereof

Comparative figures have been re-arranged whenever considered necessary to ensure better comparability with the current period without causing any
impact on the profit and value of assets and liabilities as reported in the financial statement

2.7 Changes in accounting policies

The Company changes its accounting policy only if the change is required by IFRS or results in the financial statements providing reliable and more
relevant information about the effects of transactions, other events or conditions on the Company’s financial position, financial performance or cash
flows. Changes in accounting policies is to be made through retrospective application by adjusting opening balance of each affected components of equity
i.e. as if new policy has always been applied.

ANNUAL
REPORT 367
2020
 2.7.1 IFRS-16: Lease
In January 2016, the International Accounting Standards Board (IASB) issued IFRS-16. IFRS-16 replaces IAS-17, IFRIC 4, SIC 15 and SIC 27 which sets
out the principles for recognition, measurement, presentation and disclosure of leases which is effective from annual reporting periods beginning on or
after 1 January 2019. IBCML has applied IFRS-16 Leases for the first time with the date of 01 January 2020. As IFRS-16 supersedes IAS-17 Lease, the
company has made recognition, measurement and disclosure in the financial statements-2020 as Lessee as per IFRS-16.

Company as lessee:
The Company assesses at initiation of a contract whether the contract is, or contains a lease. That is, if the contract conveys the right to control the use of
an identified asset for a period of time in exchange of consideration, then the Company consider the contract as a lease contract. The Company recognizes
lease liabilities to make lease payment and right-of-use assets representing the right to use the underlying assets. The right-of-use asset is measured at
cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to
dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives
received). Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest/finance cost. On the statement of
financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been included in non-current
liabilities.

Right-of-Use assets (ROU):

The Company recognises the right-of-use assets (RoU) from the date of 1st January 2020 of the lease. ROU assets are measured at cost less any
accumulated depreciation and impairment of losses and adjusted for any measurement of lease liabilities. The cost of ROU assets includes the amount of
lease liabilities recognised, initial direct cost incurred, and lease payment made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight line basis over the lease term.The Company assessed its lease contract live in 2020 and recognised as RoU
of assets as guided by Holding Company’s’ policy set as per IAS-16 and IFRS-16. The RoU assets are presented in the Note 4 of these financial statements.

Lease Liabilities
The company recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease liabilities are presented
under the title of non-current liabilities

2.8 Reporting period

The accounting period of the company covers 12 (Twelve) months from 1st January to 31 December, 2020.

3. Significant accounting Policies

3.1 Basis of accounting

The specific accounting policies selected and applied by the company’s directors for significant transactions and events that have material effect within
the framework of IAS-1 “Presentation of Financial Statements”, in preparation and presentation of financial statements have been consistently applied
throughout the period and were also consistent with those used in earlier years.For a proper understanding of the financial statements, these accounting
policies are set out below in one place as prescribed by the IAS-1 “Presentation of Financial Statements”. The recommendations of IAS-1 relating the
format of financial statements were also taken into full consideration for fair presentation.

3.2 Consistency
The accounting policies and methods of computation used in preparation of financial statements for the period ended 31 December, 2020 are consistent
with those policies and methods adopted in preparing the financial statements for the year ended 31 December, 2019.

3.3 Statement of cash flows

The statement of cash flows is prepared using the indirect method as stipulated in International Accounting Standard (IAS) -7 “Statement of Cash Flows”.

3.4 Investment in Shares

Investment in quoted shares are initially recognised at cost plus transaction costs that are directly attributable to the acquisition of the shares. After initial
recognistion, investment in quoted shares has been revalued at cost at reporting date. However, adequate provision has made if market value consider as
down trend of the reported cost but no unrealised gain is recognised in the profit and loss account.

3.5 Property, Plant and Equipment

All Property, Plant and Equipment are stated at cost, together with any incidental expenses of acquisition less accumulated depreciation as per IAS -16 "
Property, Plant and Equipment".
Depreciation on fixed asset begins when it is installed and available for use. The rates and methods used are as follows:
Category of Assets Rate (%) of Dep./Discounting Rate Method of Depreciation
Furniture & Fixture 10% Reducing Balance
Mechanical appliances 20% - Do-
Computer 25% Straight Line
Right of Use (ROU)* 5% -
*Incase of Right of Use (ROU) depriciation is charged on the basis of IFRS-16.

ANNUAL
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3.6 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank and term deposits that are readily convertible to a known amount of cash and that are
subject to an insignificant risk of change in value.

3.7 General
The figures appearing in these Financial Statements have been rounded off to the nearest integer.

3.8 Profit on bank deposits

Profit on bank deposits has been recognized as per accrual basis.

3.9 Income Tax

Current Tax:
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date and any
adjustment to the tax payable in respect of previous years. Provision for current income tax has been made on taxable income of the Company as per
following

Type of income 2020 2019

Business income 37.50% 37.50%
Capital gain 10.00% 10.00%
Other Income (Dividend income) 20.00% 20.00%

Deferred Tax:
Principle of recognition
Deferred tax is recognized as income or an expense amount within the tax charge, and included in the net profit or loss for the period.

Recognition of deductible temporary difference

A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the
deductible temporary difference can be utilized, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not
a business combination; and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Recognition of taxable temporary difference

A deferred tax liability is recognized for all taxable differences, except to the extent that the deferred tax liability arises from the initial recognition of goodwill;
or the initial recognition of an asset or liability in a transaction which is not a business combination; and at the time of the transaction, affects neither accounting
profit nor taxable profit (tax loss).

Measurement
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

ANNUAL
REPORT 369
2020
 Islami Bank Capital Management Limited
Notes to the Financial Statements
As at and for the year ended 31 December, 2020

2020 2019
Particulars
Taka Taka

4 Property, Plant & Equipments

Cost (a):
Land & Building - -
Furniture & Fixture 2,051,868 1,561,633
Mechanical Appliances 993,625 536,400
Computer 810,751 204,422
Motor Vehicles - -
Books & Others - -
Right of Use (ROU) asset for lease obligation 2,172,671 -
6,028,915 2,302,455
Accumulated Depreciation (b):
Land & Building - -
Furniture & Fixture 173,429 18,302
Mechanical appliances 143,790 9,035
Computer 164,069 8,821
Motor Vehicles - -
Books & Others - -
Right of Use (ROU) asset for lease obligation 814,752 -
1,296,040 36,158
Written Down Value (a-b) 4,732,875 2,266,297
A schedule of Property, Plant & Equipments is given at Annexure-A

5 Deferred Tax Assets

Carrying amount - 2,266,296
Tax base - 2,269,050
Deductible Temporary Difference (DTD) - 2,754
Deferred Tax Assets @ 37.5% of DTD - 1,032

6 Advance income tax

Opening balance 96,698,747 86,035,655
Add: Deducted at source during the year 3,656,177 3,527,660
From Fixed/Savings Deposits 3,536,997 3,527,660
From Dividend 119,180 -

Add: Paid through challan during the period 8,729,785 7,135,432

109,084,709 96,698,747
Less Adjustment during the year (63,769,960) -
Closing balance 45,314,749 96,698,747

7 Accrued profit on bank deposits

Islami Bank Bangladesh Limited 2,758,269 2,938,357
Union Bank Ltd. 764,384 6,451,027
First Security Islami Bank Ltd. 576,986 2,874,520
4,099,639 12,263,904
8 Advance, deposit & prepayments
Advance : Software Development 727,000 -
Advance : Website Design & Development 39,800 -
Security Deposit (CDBL) 200,000 -
Security Deposit (T & T ) 4,500 4,500
971,300 4,500

ANNUAL
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 2020 2019
Particulars
Taka Taka
9 Cash & cash equivalents
Cash in hand 17,779 220,464
Cash at bank (Note - 9.1) 371,095,559 374,629,913
371,113,338 374,850,377
9.1 Cash at bank
Union Bank Ltd (MTDR) 50,000,000 150,000,000
First Security Islami Bank Ltd (MTDR) 40,000,000 80,000,000
Islami Bank Bangladesh Ltd (MTDR) 270,763,288 136,506,334
Islami Bank Bangladesh Ltd (MSND- 000094) 10,127,839 8,123,579
Islami Bank Bangladesh Ltd (MSND- 014313) 155 -
Islami Bank Bangladesh Ltd (MSND- 014515) 155 -
Islami Bank Bangladesh Ltd (MSND- 014616) 155 -
Islami Bank Bangladesh Ltd (MSND- 014414) 155 -
Islami Bank Bangladesh Ltd (AWCA- 009449) 203,812 -
371,095,559 374,629,913
10 Share capital
Authorized capital
1,000,000 Ordinary shares @ Tk. 1,000 each 1,000,000,000 1,000,000,000
Issued, subscribed and paid up capital
300,000 Ordinary shares @ Tk.1,000 each fully paid up 300,000,000 300,000,000
Details of shareholders are as under:

No. of shares as No. of shares as Taka Taka

Name of the shareholders at 31.12.2020 at 31.12.2019 31.12.2020 31.12.2019
Islamic Bank Bangladesh Limited 299,993 299,993 299,993,000 299,993,000
Mr. Mohammad Abdul Mannan 1 1 1,000 1,000
Mr. Md. Qaisar Ali 1 1 1,000 1,000
Mr. Md. Omar Faruk Khan 1 1 1,000 1,000
Mr. Md. Saleh Iqbal 1 1 1,000 1,000
Mr. Md. Mosharraf Hossain 1 1 1,000 1,000
Mr. Md. Altaf Hossain 1 1 1,000 1,000
Mr. Md. Ashraful Haque 1 1 1,000 1,000
Total 300,000 300,000 300,000,000 300,000,000

11 Deferred Tax Liabilities

Carrying amount 4,732,875 -
Tax base 4,638,441 -
Deductible Temporary Difference (DTD) 94,434 -
Deferred Tax Liability @ 37.5% of DTD 35,413 -
Adjustment With Deferred Tax Assets (Opening Balance) (1,032) -
Net Deferred Tax Liabilities 34,381 -

12 Accounts payable
Audit Fees 57,500 57,500
Incentive Bonous 601,100 -
Office Expenses (Printing & Stationery) 93,000 41,553
Office Rent - 166,880
Professional Fees 30,000 -
Security Deposit Payable 29,012 -
Payable Against Exp - Wages 7,996 -
Payable Against Exp -Telephone (Office) 6,000 -
Payable Against Expenditure- CDBL Monthly Bill 500 -
Income Tax Payable 44,977 36,593
Value Added Tax (VAT) Payable 64,978 110,627
935,063 413,153

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 2020 2019
Particulars
Taka Taka

13 Provisions for diminution of investment in shares

Opening Balance 74,753 -
Add: Provision made during the period 1,400,000 74,753
Closing Balance 1,474,753 74,753

14 Provision for income tax (Current Tax)

Opening Balance 101,468,199 89,946,189
Add: Provision made during the period * 7,504,622 11,522,010
Less: Adjustment during the year ** (63,769,960) -
Closing Balance 45,202,861 101,468,199

* Total amount of Tk. 7,504,622/- is made provision during the year. Out of which Tk. 6,758,993/- is made against the income from business of the
company. Remaining amount of Tk. 745,629/- is provided as prior years adjustment related with Accounting Year 2010 corresponding Assessment Year
2011-12 for Tk. 281,721/-, Accounting Year 2011 corresponding Assessment Year 2012-13 for Tk. 411,311/- and Accounting Year 2014 corresponding
Assessment Year 2015-16 for Tk. 52,597/-.

** The pending issues related with Income Tax Assessment of the company for the year 2010 to 2014 have already been completed and we have paid all
dues in this regard. Adjustment is made for an amount of Tk. 63,769,960/- which is the actual Tax demand amount of Income Tax authority and paid by
the company to the Govt. Exchequer. The amount was earlier accounted for as Advance Income Tax in the Assets side and as Provision for Income Tax
in Liabilities side of the company's Financial Statements.

15 Income from Investment in shares

Capital gain/(loss) from investment in shares 13,922,868 279,821
Dividend income 595,900 -
14,518,768 279,821
16 Other operating income
Profit earned on bank deposits:
First Security Islami Bank Ltd. 6,310,365 9,630,914
Union Bank Ltd. 11,920,545 13,555,993
Islami Bank Bangladesh Limited 9,160,446 7,307,007
Islami Bank Bangladesh Limited (MSND -94) 22,666 54,871
27,414,022 30,548,785
17 Bank charge
Account Maintenance Fee
Bank Charge - Instrument Clearing, Cheque Book Issue etc. 4,128 920
11,235 395
18 Dividend Payable 15,363 1,315
Opening Balance
Add: Dividend declared - -
Less: Dividend paid during the period - -
Closing Balance - -
- -

19 Related Party Transactions - Disclosure under the IAS-24 (Related Party Disclosure):
Islami Bank Bangladesh Limited (IBBL) is the banker of the company, and also hold 99.99% equity shares. Besides this, the company maintained a MTDR
accounts of Tk. 10.00 crore with IBBL's Farmgate Branch, Tk. 15.00 crore with IBBL's Foreign Exchange Corporate Branch and 2.00 Crore with VIP
Road Branch. The company also maintained a Mudaraba Investment accounts of Tk. 10.00 crore with IBBL's Foreign Exchange Corporate Branch.
The annexed notes 1 to 18 form an integral part of these financial statements.

Professor Md. Kamal Uddin , Ph.D Md. Joynal Abedin Mohammad Abdur Rahim, FCA
Chairman Director Managing Director & CEO

Dhaka
March 22, 2021

ANNUAL
372 REPORT
2020
 Islami Bank Capital Management Limited
Schedule of Property, Plant & Equipments
As at and for the year ended 31 December, 2020 Annexure - A
Amount in Taka

Cost Depreciation/Amortization Written Down Value

Name of Fixed Assets Addition Adjustment Charged Adjustment

Balance as at Total as at Balance as at Total as at As at As at
during the during the during the during the
01.01.2020 31.12.2020 01.01.20 31.12.2020 31.12.2020 31.12.2019
Year Year Year Year
1 2 3 4 5 (2+3-4) 6 7 8 9 (6+7-8) 10 11
A. Tangible Assets - -
- -
Land & Building - - - - - - - - - -
Furniture & Fixture 1,561,633 490,235 - 2,051,868 18,302 155,127 - 173,429 1,878,439 1,543,331
Mechanical appliances 536,400 457,225 - 993,625 9,035 134,755 - 143,790 849,835 527,365
Computer 204,422 606,329 - 810,751 8,821 155,248 - 164,069 646,682 195,601
Motor Vehicles - - - - - - - - - -
Books & Others - - - - - - - - - -
Right of Use (ROU) asset for lease obligation - 2,172,671 - 2,172,671 - 814,752 - 814,752 1,357,919 -
Total 2,302,455 3,726,460 - 6,028,915 36,158 1,259,882 - 1,296,040 4,732,875 2,266,297
B. Intangible Assets
Software - - - - - - - - -
Total 2,302,455 3,726,460 - 6,028,915 36,158 1,259,882 - 1,296,040 4,732,875 2,266,297

2020
REPORT
ANNUAL
373
 Islami Bank Capital Management Limited
Schedule of Investment & Calculation of Provision
Annexure - B
For the year ended 31 December 2020
Amount in Taka

Holding No. Average Purchase Closing Market Value as on Unrealised

Particulars Remarks
of share Rate Price Rate 31 Dec. 2020 Gain / (Loss)
1 2 3 4 5 6 7(6-4) 8
The ACME Laboratories Limited 60,000 79.15 4,748,714 74.70 4,482,000 (266,714)
Al-Arafah Islami Bank Ltd. 250,000 22.40 5,598,799 22.20 5,550,000 (48,799)
Baraka Power Limited 20,000 26.62 532,328 25.70 514,000 (18,328)
BBS Cables Limited 124,300 59.88 7,443,395 54.80 6,811,640 (631,755)
Berger Paints Bangladesh Ltd. 1,257 1,385.77 1,741,912 1,429.50 1,796,882 54,970
Bangladesh Export Import Company Ltd. 60,000 47.48 2,848,804 57.00 3,420,000 571,196
Beximco Pharmaceuticals Ltd. 20,000 159.38 3,187,548 190.50 3,810,000 622,452
Confidence Cement Ltd. 15,000 119.61 1,794,176 121.30 1,819,500 25,324
Doreen Power Generations and Systems Limited 500 56.85 28,423 61.00 30,500 2,077
Export Import (Exim) Bank of Bangladesh Limited 200,000 11.92 2,384,948 11.80 2,360,000 (24,948)
First Security Islami Bank Limited 500,000 9.06 4,528,994 9.00 4,500,000 (28,994)
Fu Wang Food Ltd. 100,000 15.64 1,563,900 15.70 1,570,000 6,100
Golden Harvest Agro Industries Ltd. 350,000 21.63 7,572,199 16.70 5,845,000 (1,727,199)
Grameenphone Ltd. 25,000 338.00 8,450,021 347.10 8,677,500 227,479
The IBN SINA Pharmaceutical Industry Ltd. 4,240 248.77 1,054,771 244.00 1,034,560 (20,211) Quoted
Khulna Power Company Limited 10,000 47.17 471,676 45.30 453,000 (18,676)
LafargeHolcim Bangladesh Limited 75,000 41.88 3,140,697 47.80 3,585,000 444,303
Nahee Aluminum Composite Panel Ltd. 128,400 58.41 7,499,409 47.10 6,047,640 (1,451,769)
National Feed Mill Limited 100,000 24.11 2,411,013 22.60 2,260,000 (151,013)
National Tubes Limited 70,000 124.10 8,687,215 103.30 7,231,000 (1,456,215)
Orion Pharma Ltd. 100,000 55.16 5,515,849 54.70 5,470,000 (45,849)
Paramount Textile Limited 62,507 55.46 3,466,707 53.00 3,312,871 (153,836)
Ring Shine Textiles Limited 65,997 8.61 568,207 6.40 422,381 (145,826)
Robi Axiata Limited 271,253 10.00 2,712,530 29.80 8,083,339 5,370,809
Saiham Textile Mills Ltd. 20,000 25.78 515,542 24.50 490,000 (25,542)
Shahjalal Islami Bank Ltd. 100,000 21.62 2,162,208 22.90 2,290,000 127,792
Social Islami Bank Limited 4,500 13.65 61,422 13.00 58,500 (2,922)
Silva Pharmaceuticals Limited 250,000 21.44 5,360,093 18.30 4,575,000 (785,093)
Square Pharmaceuticals Ltd. 50,000 200.16 10,007,926 219.50 10,975,000 967,074
Standard Bank Limited 330,000 8.13 2,683,783 8.30 2,739,000 55,217
United Power Generation & Distribution Company Ltd. 11,000 286.96 3,156,551 263.50 2,898,500 (258,051)
Total 111,899,759 113,112,813 1,213,053

ANNUAL
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2020
Standard Disclosure Index
Disclosure checklist to the key sections of the Annual Report 2020
Items Ref. Page No.
Corporate Objectives, Values & Structure
• Vision and Mission 10,11
• Overall strategic objectives 12
• Core values and code of conduct / ethical principles 13, 14
• Profile of the Company 41,79-82
• Director’s profiles and their representation on Board of other companies & Organization Chart 45-48, 54-74, 129-131
Management Report / Commentary and analysis including Director’s Report / Chairman’s Review/CEO’s Review etc.
• A general review of the performance of the company 21-34, 75-106, 250-267
• Description of the performance of the various activities / products / segments of the company and its group companies 21-34, 75-106, 250-274
during the period under review
• A brief summary of the Business and other Risks facing the organization and steps taken to effectively manage such risks 110, 152-183
• A general review of the future prospects/outlook 27, 33-34 ,200
• Information on how the company contributed to its responsibilities towards the staff (including health & safety) 122-125
• Information on company's contribution to the national exchequer & to the economy 223-224
Sustainability Reporting
• Social responsibility initiatives (CSR) 195-196
• Environment related initiatives 125, 189-190
• Environment & Social Obligations 125, 189-190
• Integrated Reporting 146-150
Appropriateness of Disclosure of Accounting policies and General Disclosures
• Disclosures of adequate accounting policies relevant to assets, liabilities, income and expenditure, cash flows, etc. in line 268-323
with applicable financial reporting standards
• Any Specific accounting policies 273-274
• Impairment of Assets 309
• Changes in accounting policies / Changes in accounting estimates 273-274
• Accounting policy on subsidiaries 272, 290
Segment Information
• Comprehensive segment related information bifurcating segment revenue, segment results and segment capital employed 90-98, 216-221, 327
• Availability of information regarding different segments and units of the entity as well as non-segmental entities/units 216-230
Segment analysis of
• Segment Revenue
• Segment Results
• Turnover
• Operating profit
• Carrying amount of net segment assets
Financial Statements (Including Formats)
• Disclosures of all contingencies and commitments 256, 262, 316
• Comprehensive Related party disclosures 288-290
• Disclosures of remuneration & facilities provided to directors & CEO 319
• Statement of Financial Position / Balance Sheet and relevant schedules 255-267, 324-328
• Income Statement / Profit and Loss Account and relevant schedules 257, 262, 328
• Statement of Changes in Equity / Reserves & Surplus schedule 255, 260-261, 265
• Disclosure of type of share capital 210-211, 280
• Statement of Cash Flow 258, 264

ANNUAL
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2020
 Items Ref. Page No.
• Consolidated Financial Statement (CFS) 255-260
• Extent of compliance with the core IAS/IFRS or equivalent National Standards 287
• Disclosures / contents of notes to accounts 268-323
Information about Corporate Governance
• Board of Directors, Chairman and CEO 54-74
• Audit Committee (composition, role, meetings, attendance, etc), Internal Control & Risk Management 47, 114-121, 129, 152-163
• Ethics And Compliance 120
• Remuneration and other Committees of Board 45-48, 122
• Human Capital 122-125
• Communication To Shareholders & Stakeholders 125, 210-214
- Information available on website 213
- Other information 228-230
• Management Review and Responsibility 198-233
• Disclosure by Board of Directors or Audit Committee on evaluation of quarterly reports 226
• Any other investor friendly information 125-126, 198-233
Risk Management & Control Environment
• Description of the Risk Management Framework 152-163, 284-285
• Risk Mitigation Methodology
• Disclosure of Risk Reporting
Stakeholders Information
• Distribution of shareholding (Number of shares as well as category wise, e.g Promoter group, FII etc) 210
• Shares held by Directors/Executives and relatives of Directors/Executives 130-131
• Redressal of investors complaints 214
Graphical/ Pictorial Data
• Earnings per Share
• Net Assets
• Stock Performance 216-230
• Shareholders’ Funds
• Return on Shareholders Fund
Horizontal/Vertical Analysis including following
Operating Performance (Income Statement)
• Total Revenue 216-221, 262
• Operating profit
• Profit Before Tax
• Profit after Tax
• EPS
Statement of Financial Position (Balance Sheet)
• Shareholders Fund
• Property Plant & Equipment 220, 261
• Net Current Assets
• Long Term Liabilities/Current Liabilities
Profitability / Dividends / Performance and Liquidity Ratios
• Net Interest income Ratio 228-2301
• Profit before provisions and Tax
• Price earning ratio
• Capital Addequacy Ratio
• Return on Capital Employed
• Debt Equity Ratio

ANNUAL
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Items Ref. Page No.
Statement of Value Added and Its Distribution
• Government as Taxes 224
• Shareholders as dividend
• Employees as bonus/remuneration
• Retained by the entity
• Market share information of the Company’s product/services
• Economic value added
Additional Disclosures
• Human Resource Accounting 123
• Any other good additional disclosures (Independence certification e.g. GNV /GRI) 145
Specific Areas for Banking Sector
Disclosure of Ratings given by various rating agencies for the Bank and for its Instruments issued by /of Bank. For eg. FD, 128, 214-215
CD, Tier I perpetual Bonds
Details of Advances/investment portfolio Classification wise as per the direction issued by the central bank of the
respective countries 90-94, 298-300
Disclosure for Non Performing assets
• Movements in NPA
• Sector-wise breakup of NPA
• Movement of Provisions made against NPA
• Details of accounts restructured as per regulatory guidelines 184, 217, 267, 300, 307-308
Maturity Pattern of Key Assets and Liabilities (ALM)
Classification and valuation of investments as per regulatory guidelines/Accounting Standards
Business Ratio/Information
• Statutory Liquidity Reserve (Ratio) 230, 291
• Net interest income as a percentage of working funds / Operating cost - Efficiency ratio 230
• Return on Average Asset 227, 230
• Cost / Income ratio 230
• Net Asset Value Per Share 227, 230
• Profit per employee 125
• Capital Adequacy ratio 167, 228
• Operating profit as a percentage of working funds 230
• Cash Reserve Ratio / Liquid Asset ratio 230
• Dividend Cover ratio 228-230
• Gross Non-Performing assets to gross advances/Non-Performing Loans (Assets) to Total Loans (Assets) 227-230
• Details of credit concentration / Sector vise exposures 90-94, 297-300
• The break-up of ‘Provisions and contingencies’ included in the Profit and Loss Account 307-308
• Disclosure under regulatory guidelines 136-144, 275
• Details of Non-Statutory investment portfolio 295-300
• Disclosure in respect of assets given on operating & finance lease 273-274
• Disclosures for derivative investments
• Bank's Network : List of Centers or Branches 378-380

ANNUAL
REPORT 377
2020
 Zonal Offices Dhaka South Zone 68 Sonargaon Janapath Road Branch,
01 Dhaka Central Zone 25 Agargaon Branch, Dhaka 69 Tongi Branch, Gazipur
02 Dhaka South Zone 26 Ati Bazar Branch, Dhaka 70 Zirani Bazar (SME/Krishi) Branch,
03 Dhaka North Zone 27 Bandura (SME/Krishi) Branch, Dhaka East Zone
04 Dhaka East Zone 28 Dholaikhal Branch, Dhaka 71 Araihazar Branch, Narayanganj
05 Chattogram North Zone 29 Dohar Branch, Dhaka 72 Banasree Branch, Dhaka
06 Chattogram South Zone 30 Gandaria Branch, Dhaka 73 Basabo Branch, Dhaka
07 Bogura Zone 31 Islampur Branch, Dhaka 74 Bhulta Branch, Narayanganj
08 Khulna Zone 32 Kamrangir Char Branch, Dhaka 75 Donia Branch, Dhaka
09 Cumilla Zone 33 Lalbagh Branch, Dhaka 76 Fatulla Branch, Narayanganj
10 Sylhet Zone 34 Mohammadpur Krishi Market Br. 77 Gazipur Chowrasta Branch,
11 Rajshahi Zone 35 Munshigonj Branch, Munshiganj 78 Gazipur Sadar Branch, Gazipur
12 Barishal Zone 36 Nawab Ganj Branch, Dhaka 79 Jatrabari Branch, Dhaka
13 Mymensingh Zone 37 Nimtola Branch, Munshiganj 80 Kanchpur Branch, Narayanganj
81 Kapasia Branch, Gazipur
14 Noakhali Zone 38 Pantha Path Branch, Dhaka
82 Khilgaon Branch, Dhaka
15 Rangpur Zone 39 Sadarghat Branch, Dhaka
83 Konabari Branch, Gazipur
16 Dhaka Central Zone 40 Shyampur Branch, Dhaka
84 Madhabdi Branch, Narsingdi
List of Branches 41 Sreenagar Branch, Munshiganj
85 Mawna Chowrasta Branch,
42 Tongbari Branch, Munshiganj
86 Monohardi Branch, Narsingdi
Corporate Branches 43 Wiseghat Branch, Dhaka 87 Narayanganj Branch,
01 Agrabad Corporate Branch 44 Zinzira Branch, Dhaka 88 Narsingdi Branch, Narsingdi
02 Foreign Exchange Branch Dhaka North Zone 89 Nitaiganj Branch, Narayanganj
03 Gulshan Corporate Branch 45 Amin Bazar Branch, Dhaka 90 Palash Branch, Narsingdi
04 Head Office Complex Branch 46 Ashulia Branch, Dhaka 91 Riapura Branch, Dhaka
05 Khatungonj Corporate Branch 47 Badda Branch, Dhaka 92 Sonargaon (SME/Krishi) Branch, Narayanganj
06 Local Office, Dhaka 48 Banani Branch, Dhaka Chattogram North Zone
07 Nawabpur Road Branch 49 Baridhara Branch, Dhaka 93. Agrabad Commercial Area Br.
08 Ramna Corporate Branch 50 Bangla Motor Branch,Dhaka 94. Bandartila Branch, Chattogram
Dhaka Central Zone 51 Board Bazar Branch, Gazipur 95. Baraiyarhat Branch, Chattogram
09 Bangshal Branch, Dhaka 52 Cantonment Branch, Dhaka 96. Barodarogarhat (SME/Krishi) Br.
10 Chawk Mugaltuly Branch, Dhaka 53 College Gate Branch, Gazipur 97. CDA Avenue Branch,
11 Dhanmondi Branch, Dhaka 54 Dhaka EPZ Branch, Dhaka 98. Chowdhury Hat Branch,
12 Elephant Road Branch, Dhaka 55 Haji Camp Branch, Dhaka 99. Dewanhat Branch, Chattogram
13 Farmgate Branch, Dhaka 56 Hemayetpur Branch, Dhaka 100 Fatikchhari Branch, Chattogram
14 Gulshan Circle-1 Branch, Dhaka 57 Kalampur (SME/Krishi) Branch, Dhaka 101 Halishahar Branch, Chattogram
15 Kawran Bazar Branch, Dhaka 58 Manikganj Branch, Manikganj 102 Hathazari Branch, Chattogram
16 Mirpur Branch, Dhaka 59 Mirpur-1 Branch, Dhaka 103 Jubilee Road Branch, Chattogram
17 Motijheel Branch, Dhaka 60 Moghbazar Branch, Dhaka 104 Kadamtoli Branch, Chattogram
18 Mouchak Branch, Dhaka 61 Mohakhali Branch, Dhaka 105 Khulshi Branch, Chattogram
19 New Market Branch, Dhaka 62 Nikunja Branch, Dhaka 106 Khagrachari Branch, Khagrachari
20 Mirpur Women Branch, Dhaka 63 Pallabi Branch, Dhaka 107 Mirersharai (SME/Krishi) Br.
21 Paltan Branch, Dhaka 64 Rampura Branch, Dhaka 108 Nazirhat Branch, Chattogram
22 Shyamoli Branch, Dhaka 65 Savar Branch, Dhaka 109 Nazumeah Hat Branch,
23 Uttara Branch, Dhaka 66 Shibaloy Branch, Manikganj 110 O.R. Nizam Road Branch,
24 VIP Road Branch, Dhaka 67 Singair Branch, Manikgonj 111 Oxygen Moor Branch,

ANNUAL
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112 Panchlaish Branch, Chattogram 157 Joypurhat Branch, Joypurhat 200 Burichong (SME/Krishi) Branch,
113 Pahartali Branch, Chattogram 158 Kahalu (SME/Krishi) Branch, 201 Chandina Branch, Cumilla
114 Patenga Branch, Chattogram 159 Kalai Branch, Joypurhat 202 Chandpur Branch, Chandpur
115 Rangamati Branch, Rangamati 160 Kalibazar Branch, Gaibandha 203 Chauddagram Branch, Cumilla
116 Raozan Branch, Chattogram 161 Mohastangor (SME/Krishi) Br. 204 Companiganj Branch, Cumilla
117 Rangunia Branch, Chattogram 162 Nandigram (SME/Krishi) Br. 205 Cumilla Branch, Cumilla
118 Sandwip Branch, Chattogram 163 Naogaon Branch, Naogaon 206 Cumilla Cantonment Branch,
119 Sitakunda Branch, Chattogram 164 Panchbibi Branch, Joypurhat 207 Cumilla Chawkbazar Branch,
120 Station Road Branch, Chattogram 165 Salanga Branch, Sirajganj 208 Daudkandi(SME/Krishi) Branch,
Chattogram South Zone 166 Shahjadpur Branch, Sirajgonj 209 Faridganj Branch, Chandpur
121 Anderkilla Branch, Chattogram 167 Shantahar (SME/Krishi) Branch, 210 Gouripur Branch, Cumilla
122 Anwara Branch, Chattogram 168 Sirajganj Branch, Sirajganj 211 Hajiganj Branch, Chandpur
123 Bahaddarhat Branch, Chattogram 169 Sonatola Branch, Bogura 212 Kosba Branch, Brahmanbaria
124 Bakalia Branch, Chattogram 170 Ullapara Branch, Sirajganj 213 Laksham Branch, Cumilla
125 Bandarban Branch, Bandarban Khulna Zone 214 Matlab Branch, Chandpur
126 Banshkhali Branch, Chattogram 171 Bagerhat Branch, Bagerhat 215 Nabinagar Branch, Brahmanbaria
127 Boalkhali Branch, Chattogram 216 Nangalkoat Branch, Cumilla
172 Bhanga (SME/ Krishi) Branch, Faridpur
128 Chaktai Branch, Chattogram 217
173 Boalmari Branch, Faridpur Paduar Bazar Bishwa Road Branch, Cumilla
129 Chandanaish Branch, Chattogram
174 Boro Bazar Branch, Khulna 218 Sachar Branch, Chandpur
130 Chawk Bazar Branch, Chattogram
131 Chakaria Branch, Cox's Bazar 175 Daulatpur Branch, Khulna Sylhet Zone
132 Courtbazar (SME/Krishi) Branch, 176 Dumuria Branch, Khulna 219 Amberkhana Branch, Sylhet
Cox's Bazar 177 Fakirhat Branch, Bagerhat 220 Baralekha Branch, Moulvi Bazar
133 Cox's Bazar Branch, Cox's Bazar 178 Faridpur Branch, Faridpur 221 Beani Bazar Branch, Sylhet
134 Dohazari Branch, Chattogram 179 Fultala Bazar (SME/Krishi) Branch, Khulna 222 Biswanath Branch, Sylhet
135 Eidgah Branch, Cox's Bazar 180 Gopalganj Branch, Gopalganj 223 Chhatak Branch, Sunamganj
136 Gunagori Branch, Chattogram 181 Kalaroa Branch, Satkhira 224 Dakshin Surma Branch, Sylhet
137 Kalurghat Branch, Chattogram
182 Kaliganj Branch, Satkhira 225 Goalabazar Branch, Sylhet
138 Karnafuli Branch, Chattogram
183 KDA Avenue Branch, Khulna 226 Golapganj Branch, Sylhet
139 Keranihat Branch, Chattogram
140 Lama Branch, Bandarban 184 Khulna Branch, Khulna 227 Habiganj Branch, Habiganj
141 Link Road Branch, Cox's Bazar 185 Mongla Branch, Bagerhat 228 Jagannathpur Branch, Sunamganj
142 Lohagara Branch, Chattogram 186 Morelgonj Branch, Bagerhat 229 Kanaighat Branch, Sylhet
143 Moheshkhali Branch, Cox's Bazar 187 Mukmusudpur Branch, Gopalganj 230 Kulaura Branch, Moulvi Bazar
144 Patiya Branch, Chattogram 188 Paikgacha Branch, Khulna 231 Laldighirpar Branch, Sylhet
145 Pekua Branch, Cox's Bazar 189 Pirojpur Branch, Pirojpur 232 Moulvi Bazar Branch, Moulvi Bazar
146 Ramu Branch, Cox's Bazar 190 Sarankhola Branch, Bagerhat 233 Nabiganj (SME/ Krishi) Branch, Habiganj
147 Satkania Branch, Chattogram 191 Satkhira Branch, Satkhira 234 Shahporan Branch, Sylhet
148 Teknaf Branch, Cox's Bazar 192 Shyamnagar Branch, Satkhira 235 Shayestaganj (SME/ Krishi) Branch, Habiganj
149 Terribazar Branch, Chattogram 193 Tungipara Branch, Gopalganj 236 Sree Mangal Branch, Moulvi Bazar
Bogura Zone
Cumilla Zone 237 Sunamganj Branch, Sunamganj
150 Barogola Branch, Bogura
194 Akhaura (SME/Krishi) Branch, 238 Sylhet Branch, Sylhet
151 Belkuchi Branch, Sirajganj
152 Bogura Branch, Bogura 195 Ashuganj Branch, Brahmanbaria 239 Zindabazar Branch, Sylhet
153 Dupchanchia Branch, Bogura 196 Brahhmanbaria Branch, Rajshahi Zone
154 Gaibandha Branch, Gaibandha 197 Banchharampur Branch, 240 Baneswar Branch, Rajshahi
155 Gobindagonj Branch, Gaibandha 198 Bangodda Bazar Branch, Cumilla 241 Bhawaniganj Branch, Rajshahi
156 Highway Branch, Bogura 199 Barura Branch, Cumilla 242 Bera Branch, Pabna

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 243 Chanchkoir Branch, Natore Mymensingh Zone Rangpur Zone
244 Chapai Nawabganj Branch, 288 Alenga (SME/Krishi) Branch, 331 Bhurungamari Branch, Kurigram
245 Chatmohar Branch, Pabna 289 Bakshiganj Branch, Jamalpur 332 Birampur Branch, Dinajpur
246 Godagari Branch, Rajshahi 290 Bhairab Branch, Kishoreganj 333 Birganj Branch, Dinajpur
247 Ishwardi Branch, Pabna 291 Bhaluka Branch, Mymensingh 334 Debiganj Branch Panchagarh
248 Kashinatpur Branch, Pabna 292 Fulbaria Branch, Mymensingh 335 Dhap Branch, Rangpur
249 Keshorehat (SME/Krishi) Br. 293 Jamalpur Branch, Jamalpur 336 Dinajpur Branch, Dinajpur
250 Manda Branch, Naogaon 294 Kishoreganj Branch, Kishoreganj 337 Jaldhaka Branch, Nilphamari
251 Mohadebpur Branch, Naogaon 295 Kotiadi Branch, Kishoreganj 338 Kurigram Branch, Kurigram
252 Natore Branch, Natore 296 Mirzapur Branch, Tangail 339 Lalmonirhat Branch, Lalmonirhat
253 Nazipur Branch, Naogaon 297 Modhupur Branch, Tangail 340 Nilphamari Branch, Nilphamari
254 New Market Branch, Rajshahi 298 Muktagacha (SME/Krishi) Branch, Mymensingh 341 Panchagarh Branch, Panchagarh
255 Pabna Branch, Pabna 299 Mymensingh Branch, 342 Patgram (SME/Krishi) Branch,
256 Rajshahi Branch, Rajshahi 300 Netrokona Branch, Netrokona 343 Pirgonj Branch, Rangpur
257 Rohanpur Branch, Chapai 301 Nalitabari Branch, Sherpur 344 Rangpur Branch, Rangpur
258 Santhia Branch, Pabna 302 Phulpur Branch, Mymensingh 345 Ranisankail Branch, Thakurgaon
259 Sapahar Branch, Naogaon 303 Roumari Branch, Kurigram 346 Saidpur Branch, Nilphamari
260 Shibganj Branch, Chapai 304 Sherpur Branch, Sherpur 347 Setabganj Branch, Dinajpur
261 Singra Branch, Natore 305 Tangail Branch, Tangail 348 Sundarganj Branch, Gaibandha
262 Sujanagar (SME/Krishi) Branch, 306 Tarakandi Branch, Jamalpur 349 Thakurgaon Branch, Thakurgaon
Barishal Zone 307 Trishal Branch, Mymensingh Jashore Zone
263 Bakerganj Branch, Barishal 308 Hossainpur Branch, Kishoreganj 350 Alamdanga Branch,Chuadanga
264 Barguna Branch, Barguna Noakhali Zone 351 Benapole Branch, Jashore
265 Barishal Branch, Barishal 309 Bank Road Branch, Noakhali 352 Bheramara Branch, Kushtia
266 Bhandaria Branch, Pirojpur 310 Bashurhat Branch, Noakhali 353 Chowgachha Branch, Jashore
267 Bhola Branch, Bhola 311 Chandraganj Branch, Laxmipur 354 Chuadanga Branch, Chuadanga
268 Borhanuddin (SME/Krishi) Br. 312 Chaprashirhat (SME/Krishi) Branch, Noakhali 355 Dak Bangla (SME/Krishi) Br.
269 Charfashion Branch, Bhola 313 Chatkhil Branch, Noakhali 356 Jashore Branch, Jashore
270 Chormuguria (SME/Krishi) Br. 314 Chhagalnaiya Branch, Feni 357 Jhenaidah Branch, Jhenaidah
271 Damodya Branch, Shariatpur
315 Chowmuhani Branch, Noakhali 358 Jhikorgachha Branch, Jashore
272 Hatkhola Chawkbazar Branch,
316 College Road Branch, Feni 359 Jibon Nagar (SME/Krishi) Branch, Chuadanga
273 Jhalakathi Branch, Jhalakathi
317 Dagonbhuiyan Branch, Feni 360 Kaliganj Branch, Jhenaidah
274 Kalapara Branch, Patuakhali
318 Feni Branch, Feni 361 Keshabpur Branch, Jashore
275 Kalkini Branch, Madaripur
319 Hajirhat Branch, Laxmipur 362 Kotchandpur Branch, Jhenaidah
276 Lalmohan Branch, Bhola
277 Madaripur Branch, Madaripur 320 Laxmipur Branch, Laxmipur 363 Kumarkhali Branch, Kushtia
278 Matbaria Branch, Pirojpur 321 Maijdee Court Branch, Noakhali 364 Kushtia Branch, Kushtia
279 Miarhat Branch, Pirojpur 322 Mandari Bazar Branch, Laxmipur 365 Langalbandh Branch, Magura
280 Muladi Branch, Barishal 323 Parshuram (SME/ Krishi) Branch, Feni 366 Lohagara Branch, Narail
281 Naria Branch, Shariatpur 324 Raipur Branch, Laxmipur 367 Magura Branch, Magura
282 Patuakhali Branch, Patuakhali 325 Ramganj Branch, Laxmipur 368 Meherpur Branch, Meherpur
283 Rajapur Branch, Jhalakathi 326 Senbag Branch, Noakhali 369 Narail Branch, Narail
284 Shariatpur Branch, Shariatpur 327 Sonagazi Branch, Feni 370 Noapara Branch, Jashore
285 Takerhat Branch, Madaripur 328 Sonaimuri Branch, Noakhali 371 Pangsha Branch, Rajbari
286 Torki Branch, Barishal 329 Sonapur Branch, Noakhali 372 Poradah Branch, Kushtia
287 Wazirpur Branch, Barishal 330 Subarnachar Branch, Noakhali 373 Rajbari Branch, Rajbari

The detail address of the Branch is available at our website www.islamibankbd.com

ANNUAL
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 Glossary
AAOIFI Accounting and Auditing Organization for CSBIBB Central Shariah Board for Islamic Banks of
Islamic Financial Institutions Bangladesh
AD Authorized Dealer CSE Chattogram Stock Exchange
ADB Asian Development Bank CTR Cash Transaction Report
ADC Alternative Delivery Channel DAIBB Diplomaed Associate of the Institute of
AGM Annual General Meeting Bankers, Bangladesh
ALCO Asset Liability Committee DC Data Center
ATM Automated Teller Machine DCFCL Departmental Control Function Check List
BAB Bangladesh Association of Banks DOS Department of Offsite Supervision
BACH Bangladesh Automated Clearing House DRS Disaster Recovery Site
BACPS Bangladesh Automated Cheque Processing System DSE Dhaka Stock Exchange Ltd
BAFEDA Bangladesh Foreign Exchange Dealers Association EFT Electronic Fund Transfer
BAS Bangladesh Accounting Standards eIBS Electronic Integrated Banking System
BB Bangladesh Bank EPS Earnings Per Share
BBTA Bangladesh Bank Training Academy ETP Effluent Treatment Plants
BCP Business Continuity Plan EU European Union
BDT Bangladeshi Taka EVA Economic Value Added
BEFTN Bangladesh Electronic Fund Transfer Network FCB Foreign Commercial Bank
BFIU Bangladesh Financial Intelligence Unit FIs Financial Institutions
BFRS Bangladesh Financial Reporting Standards FY Financial Year
BIBM Bangladesh Institute of Bank Management CIBAFI General Council for Islamic Banks and
BO Beneficiary Owners Financial Institutions
BRPD Banking Regulation & Policy Department GDP Gross Domestic Product
BSA Bangladesh Standards on Auditing GOB Government of Bangladesh
BSEC Bangladesh Security and Exchange Commission GRI Global Reporting Initiative
CAMLCO Chief Anti Money Laundering Compliance Officer HDS Household Durables Scheme
CAR Capital Adequacy Ratio HFT Held for Trading
CDBL Central Depository Bangladesh Limited HPSM Hire Purchase under Shirkatul Melk
CEO Chief Executive Officer HR Human Resources
CFO Chief Financial Officer HTM Held to Maturity
CGG Corporate Governance Guidelines IAS International Accounting Standards
CIPPS Centralized Investment Proposal Processing System IBB Institute of Bankers, Bangladesh
CIB Credit Information Bureau IBBL Islami Bank Bangladesh Limited
CNG Compressed Natural Gas IBIT Islami Bank Institute of Technology
CPI Consumer Price Index IBCF Islamic Banks Consultative Forum
CRAR Capital Adequacy Assessment Ratio IBCA Inter Branch Credit Advice
CRISL Credit Rating Information and Services Limited IBDA Inter Branch Debit Advice
CRO Chief Risk Officer IBP Inland Bill Purchase
CRR Cash Reserve Requirement IBF Islami Bank Foundation
CSR Corporate Social Responsibility IBTRA Islami Bank Training & Research Academy

ANNUAL
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 Glossary
ICAB Institute of Chartered Accountants of Bangladesh SME Small & Medium Enterprise
ICMAB Institute of Cost and Management Accountants SMS Short Message Service
of Bangladesh SMA Special Mention Account
IC&CW Internal Control & Compliance Wing SOB State Owned Banks
ICB Investment Corporation of Bangladesh SRP Supervisory Review Process
ICT Information and Communication Technology STR Suspicious Transaction Report
ICTIC Information and Communication Technology SWIFT Society for Worldwide Inter-Bank Financial
Implementation Committee Tele-communication
IDB Islamic Development Bank TA Traveling Allowance
IFRS International Financial Reporting Standards TOR Terms of Reference
IIRC International Integrated Reporting Council VAT Value Added Tax
IPO Initial Public Offering WAN Wide Area Network
IRG Investment Risk Grading WEIS Women Entrepreneur Investment Scheme
LC Letter of Credit
MCR Minimum Capital Requirement
MEIS Micro Enterprise Investment Scheme
MICR Magnetic Ink Character Recognition
MIS Management Information System
MPB Mudaraba Perpetual Bond
NAV Net Asset Value
NOC No Objection Certificate
NPI Non-performing Investment
NPL Non-performing Loan
NRD Non Resident Dollar account
OBU Offshore Banking Unit
PCB Private Commercial Banks
POS Point of Sales
PPD Profit Paid on Deposits
PV Present Value
RDS Rural Development Scheme
R&D Research and Development
RMG Readymade Garments
ROA Return on Assets
ROE Return on Equity
ROI Return on Investment
RTGS Real Time Gross Settlement
RWA Risk Weighted Assets
SAFA South Asian Federation of Accountants
SEC Securities and Exchange Commission
SLR Statutory Liquidity Ratio

ANNUAL
382 REPORT
2020
 Bmjvgx e¨vsK evsjv‡`k wjwg‡UW

Islami Bank Bangladesh Limited

40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh
PROXY FORM
I/we__________________________________________________________________ being a member(s) of Islami Bank Bangladesh
Limited do hereby appoint Janab________________________________________________________________________________of
____________________________________________________________________ as my / our Proxy to attend and vote on behalf of
me / us at the 38th Annual General Meeting of the Company to be held on Sunday, the 27th June, 2021 at 11.30 A.M. through Digital
Platform and at any adjournment thereof.
As witness my/our hand this __________ day of ____________ 2021.

Folio No. : _______ BO ID No.:

Revenue Stamp for

Tk. 20.00 (twenty) only

___________________________ ____________ ____________ ______________________

Signature of the Proxy/ Attorney No. of Share(s) Revenue Stamp Signature of the Member
with date with date
N.B.: This Form of Proxy, duly signed (as recorded with the bank), stamped and completed must be submitted to the Registered Office
or Share & Bond Division (63 Dilkusha C/A, 5th Floor, Dhaka) of the Company at least 48 (Forty Eight) hours before the Meeting
i.e. 11.30 A.M. on Friday the 25th June, 2021 at 11.30 A.M.

Bmjvgx e¨vsK evsjv‡`k wjwg‡UW

Islami Bank Bangladesh Limited

40, Dilkusha Commercial Area, Dhaka-1000, Bangladesh
The 38th Annual General Meeting held on Sunday, the 27th June, 2021
ATTENDANCE SLIP
I do hereby submit the Attendance slip in connection with the 38th Annual General Meeting of Islami Bank Bangladesh Limited held today Sunday, the
27th June, 2021 at 11.30 A.M. through Digital Platform.

Folio No. : _______ BO ID No.:

No. of Share(s)

Full Name of the Member / Attorney / Proxy : _________________________________________Signature with date

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2020