ISLAMI BANK BANGLADESH LTD

INTERNATIONAL BANKING WING

FOREX TREASURY DIVISION
(DEALING ROOM)
HEAD OFFICE, DHAKA

E.C Memo:
Date: April 08, 2009

Re: Proposal for approval of Inter-Bank Money Market Placement limit(s) to other Islamic
Banks/Branches & Islamic Financial Institutions for efficient management of Bank’s
Funds.

Islami Bank Bangladesh Limited started its integrated Treasury operation from June 1,2009 for
efficient management of portfolio & surplus funds of the BankDue to integration,Treasury activities
has extended to foreign exchange ,Money Market & Money market securities markets.Iner-Bank
Market are the forefront of Financial markets and are the first to signal of any changes in the
money supply and the resultant liquidity in the system.n order to smooth operation of Money
Market operation, we need to allow limit to the Other Islamic banks/Financial institutions and the
Conventional Banks having Islamic Banking Branch. Interbank Money market is used for
deployment of surplus funds and also to raise short-term funds to bridge the gaps in the Cash flow
of the bank maturity of funds generally not exceeding one year.

Present Islamic Money Market Scenario:

IBBL MM Position

To have a money market discipline for sound management of liquidity,the following guidelines may
be established:
MM products :In order to deployment or raising funds,The market have the following available
products.
Short-term :
Mudarabaha Short Notice

Mudarabaha Saving

Term Ssructure
Mudarabaha Term not exceeding One Year

Inter-Bank Money Market management:

Liquidity Management: For maintaining sound liquidity position, and effective use of surplus
liquidity, the placement support as 2nd tier of reserve asets.Treasury invests its surplus cash in Iter-
Bank Money market after meeting CRR ,SLR and present and expected internal
requirements.Banks can invest its surplus funds considering its expected outflows.At present bank
runs liquidity surplus of TK……… and enjoying a limit of Tk. As approved by Board.The Treasury
can invest maximum amunt of Investable surplus funds to the Inter-Bank market in different tenor
so that it can call back as and when necessary to support CRR depending on Banks Projected
requirements of Funds, Non core deposit, Market condition and market opertunity.

1. Limits for Local Counter-Parties: In Inter-Bank Market, Banks only do carry

Counterparty risk..for effective use of surplus liquidity, e may allow limits to the
following Banks……..

b. Full fledged Islamic Banks Rating Paid up Proposed

Capital Limits
CAMELS CRISL
01. Al Arafa Islami Bank Ltd C ST-

02. Social Inv. Bank Ltd C ST-

A-
03. EXIM Bank Limited C
04. Shajahal Islami Bank Limited A
05. The First Security Bank C
06. ICB Islamic Bank E

06 Islamic Banking No of Banks’ Rating Bank’s Assets Proposed

. Branches OF IB Paid up of IB Limit
Conventional BankS Branc Capital Branche
hes s
CAMEL CRISL
S
HSBC 01 A
Standard Chartered 01 B
Bank
02 The City Bank Ltd 01 C
.
03 AB Bank Ltd 01 B
.
04 Dhaka Bank Ltd 01 B
.
06 Prime Bank Ltd 01 B
.
08 Jamuna Bank Ltd 02 B
.
 09 Premier Bank Ltd 01 B
.
10 Bank Aisa Ltd 02 B
.
12 Standard Bank Limited
.
15 Southeast Bank Ltd 05 B
.
Trust Bank B

Form of Limits:We may extend credit lines in the following for to utilize the banks
surplus liquidity:

Short Term Notice

MSA

MTDR

b. Discretionary Power /Approval Authority: A budget of Taka 5000.00 million approved

by board to place funds inter-Bank Market.We may however consider our non core
deposit( Al-wadiah and 9% of MSA) to place the Market which may act as 2nd tier of
Reserve/liquid assets to be supported in case of liquidity stressed. In order to instant
utilization of market opertunity,we may propose the following :

Discretionary Power
Treasury 10% of Approved Limit
DMD 25% of approved Limit
MD 100 % of approved limit

C. Shariah Approval: Once in a Year: We may propose the followings:

1. In case of Full fledged Islamic Bank, Our Shariah Council may give their
considered once in a Year.
2. In case of Conventional Banks having Islamic Banking Branch, the approval will be
on case to case basis.

Securities Market:
Treasury invests primarily in BGIIB to comply with the BBK requirements of the Bank that is SLR
under mudaraba principle.HTM Bonds can be taken money by lien it.

a. Bangladesh Bank As per requirements

Reporting Inetr-Bank Money Market Position:

Local MM Positions…..Daily

CRR & SLR ……Daily

ALCO-------Monthly

EC….Monthly

.ii Limits for Overseas Counterparties

Sl Name of Counterparties Existing Limit in Limit in million USD

million USD
01 Scotia Bank,Hongkong 5.00 5.00
02. Commerz bank ,Frankfurt, 10.00 10.00
Germany
03. Mashreq Bank,U.A.E 10.00 5.00
04. ICICI , India 3.00 3.00
05. Citi Bank N.A , Singapore - 5.00

I11. Split of Limits into different Currencies

Limits as approved to be splited among different currency pair(s) by the Head of treasury in
consultation with Head of International Banking Wing & Managing Director considering the dealing
capabilities of the dealer(s).Besides, The Treasury Back & Mid Office should ensure that all the
deals are done within the prescribed limits. If the limit is exceeded, it should be promptly reported
to the Deputy Managing Director, IBW and Managing Director for their approval from him.

The issue is now placed before the Executive Committee for their kind perusal and approval. If
agreed, the following resolution may be adopted:

“Resolved that the proposal for fixation of foreign Exchange market risk , counter party credit
risk related limit and after hour dealing allowance for the dealers as envisaged in the memo
is perused and hereby approved with advice the management to ensure proper management
of F.C fund “

(Md. Fariduddin Ahmed)

Managing Director

ISLAMI BANK BANGLADESH LTD

INTERNATIONAL BANKING WING
TREASURY & FUND MANAGEMENT DIVISION
(DEALING ROOM)
HEAD OFFICE, DHAKA
01. Counterparty Credit Risk Limit:

To perform deals (Buying and selling of foreign currency) and minimize the counter party
risk with other bank at home and abroad
the following limit may be fixed up :

.i. Limits for Local Counter-Parties

Sl Name of Counterparties Existing Limit in Proposed Limit in

million USD Million
USD(including Fx
trading)
a. Bangladesh Bank 10.00 As per requirement
b. Foreign Bank
01. Citibank Na,Dhaka 10.00 10.00
02. HSBC Bank 10.00 10.00
03. Standard Chartered bank 20.00 20.00
04. Commercial Bank of Cylon 3.00 3.00
05. National Bank of Pakistan 1.00 1.00
06. Bank al Falah 1.00 2.00
07. Habib Bank 1.00 1.00
c. Nationalized Commercial Bank
01. Sonali Bank Ltd 10.00 10.00
02. Janata Bank Ltd 8.00 10.00
03. Agrani Bank Ltd 8.00 10.00
04. Rupali Bank Ltd 2.00 5.00
d. Specialilzed Commercial
Bank
01. Bangladesh Krishi Bank 3.00 3.00
02. Bangladesh Shilpa Bank 2.00 2.00
03. BASIC BANK Ltd 3.00 3.00
e. Private commercial Bank
01. Uttara Bank Ltd 8.00 5.00
 02. NCC Bank Ltd 3.00 3.00
03. National Bank Ltd 2.00 3.00
04. IFIC 2.00 2.00
05. The City Bank Ltd 2.50 3.00
06. AB Bank Ltd 2.00 5.00
07. Pubali Bank Ltd 3.00 3.00
08. Eastern Bank Ltd 3.00 5.00
09. Dhaka Bank Ltd 3.00 4.00
10. Al Arafa Islami Bank Ltd 3.00 3.00
11. Dutch Bangla Ltd 3.00 2.00
12. Prime Bank Ltd 4.00 5.00
13. Social Inv. Bank Ltd 3.00 2.00
14. Mercantile Bank Ltd 3.00 3.00
15. Jamuna Bank Ltd 3.00 2.00
16. Premier Bank Ltd 3.00 2.00
17. Bank Aisa Ltd 4.00 4.00
18. EXIM Bank Limited 4.00 4.00
19. The Trust Bank Limited 3.00 2.00
02. One Bank Limited 2.00 1.00
12. Standard Bank Limited 2.00 2.00
22. Mutual Trust Bank Limited 2.00 2.00
23. Shajahal Islami Bank 2.00 2.00
Limited
24. UCBL 3.00 2.00
25. The First Security Bank 2.00 1.00
27 BRAC Bank Ltd. 2.00 2.00
28. Southeast Bank Ltd 4.00 4.00

.ii Limits for Overseas Counterparties

Sl Name of Counterparties Existing Limit in Limit in million USD

million USD
01 Scotia Bank,Hongkong 5.00 5.00
02. Commerz bank ,Frankfurt, 10.00 10.00
Germany
03. Mashreq Bank,U.A.E 10.00 5.00
04. ICICI , India 3.00 3.00
05. Citi Bank N.A , Singapore - 5.00

I11. Split of Limits into different Currencies

Limits as approved to be splited among different currency pair(s) by the Head of treasury in
consultation with Head of International Banking Wing & Managing Director considering the dealing
capabilities of the dealer(s).Besides, The Treasury Back & Mid Office should ensure that all the
deals are done within the prescribed limits. If the limit is exceeded, it should be promptly reported
to the Deputy Managing Director, IBW and Managing Director for their approval from him.

(Mohammad Masud)
Asstt. Vice President