Savings play an important role in capital formation, income-generation and creation of employment opportunities and contribute towards the increase in wealth of the individual and nation through profitable investment.

The people generally try to save a portion of their income with a view to protecting themselves from future financial hardship and also to enhance their earnings for their own benefit and the benefit of their family and the nation as a whole. Bangladeshi wage earners living abroad and the retired service holders desire to invest their earnings and retirement benefits in safe and profitable investment schemes. Many a people, however, cannot deploy their fund in business for various reasons. The people of Bangladesh are deeply religious and committed to Islamic way of life and determined to conduct their economic activities in accordance with the tenets of Islamic Shariah. Naturally they want to avoid interest in transaction and business which is forbidden by Islam.

Islam encourages savings, which is the prerequisite for any sustainable economic development. The saying of Holy Prophet (PBUH) is that poverty leads to unbelief and therefore, people have been encouraged to save a portion of their earnings to protect themselves from future financial setback. Islam emphasises in the cycling of surplus capital by investing such funds in productive economic activities that will pave the way for employment, development and progress.

The people of Bangladesh reluctantly invest in interest bearing schemes. The religious Muslims, however, avoid such investments and the idle funds are mostly being consumed to meet the avoidable family demands. Thus the major portion of savings remain out of the production process. Islami Bank Bangladesh Limited, has therefore, introduced the savings deposit accounts viz. Mudaraba Savings Account, Mudaraba Term Deposit Account, Mudaraba Hajj Savings Account, Mudaraba Special Notice Account and Mudaraba Special Savings (Pension) Scheme as per Islamic Shariah. Mudarabah Special Savings (Pension) Account has also been introduced recently. Islami Bank Bangladesh Limited, being encouraged by the success of the Mudaraba deposit accounts has, therefore, introduced yet another savings scheme namely "Mudaraba Savings Bond Scheme".

Objectives

• To offer investment opportunity to the people and institutions who do not like to keep their savings and funds in interest bearing deposit accounts or invest in interest bearing schemes.

• To facilitate deposit and investment of funds of the wage earners and retirement benefits of the service holders.

• To encourage savings by offering a safe and profitable investment outlet through sharing of a portion of the profit out of investment of their deposited money as per Islamic Shariah.

• To extend the Bank's Schemes for mobilisation of savings, generation of income, creation of employment and enhancement of wealth of the individual and the nation through profitable investment of these savings as per Islamic Shariah.

• To encourage participation of the people in Islamic banking system and development of the economy in line with the principle of Islamic Shariah.

  Eligibility

• Person(s) aged 18 years and above shall be eligible to purchase Mudaraba Savings Bond(s) in single name or in joint names.

• Educational Institutions, Clubs, Associations and other non-trading and non-profit Socio-economic Institutions shall also be eligible to purchase Bond(s) in the name of the Institutions.

• Guardian(s) shall be allowed to purchase Bond(s) jointly with a minor mentioning the age of the minor. Payment against such Bond(s) shall be made on the basis of joint signature after the minor attains majority.

• Father/Mother/Legal Guardian shall be eligible to purchase these Bonds on behalf of one or two minors mentioning the name and age of the minor(s) and also instructions regarding payment encashment.

Denomination

Mudaraba Savings Bond shall be available in Tk. 1,000.00, Tk. 5,000.00, Tk. 10,000.00, Tk. 25,000.00, Tk. 50,000.00, Tk. 1,00,000.00, Tk. 5,00,000.00 and Tk. 10,00,000.00 denominations. 

Purchase Ceiling

Purchase ceiling of Mudaraba Savings Bond is minimum Tk. 1,000.00. Any amount of Bonds can be purchased subject to availability.

Purchase Procedure

Eligible purchaser(s) shall be entitled to purchase Mudaraba Savings Bonds in single or in joint names or in the name of Institutions from the Branch of the Bank. The purchaser(s) shall have to apply in prescribed form of the Bank and fulfil the terms and conditions in this respect.

Period of Maturity

        5 (five) years
        8 (eight) years.

Profit Sharing & Weightage

The Bondholders shall share income derived from investment i.e. income from the use of the funds in economic activities permitted by Islamic Shariah. This includes profit, dividend, capital gains, rent and any other income derived from investment
 Bondholders shall get minimum 65% of the income derived from the deployment of Mudaraba fund in the investment during any accounting year according to their proportion in the total investment applying the following weightages:

Type of Bonds                                                                        Weightage

8 years Mudaraba Savings Bond          :                                       1.25
5 years Mudaraba Savings Bond          :                                       1.10

Benefits of full weightage shall be given if encashed on maturity. In cases of premature encashment weightage shall be relatively lower as below:

Encashment

For encashment of Mudaraba Savings Bonds, the Bondholder(s) or their nominee(s) [in case of death of the purchaser(s)] shall have to present the Bond(s) and the related papers in original duly discharged as per rules, to the Branch of the Bank where from the Bonds were purchased. The concerned Branch shall verify the signatures and other particulars and if found in order, then make payment with profit to be calculated on the basis of period covered at the time of encashment.

Other Benefits

• Mudaraba Savings Bonds can be purchased in single name or joint names and there shall be provisions for nominating nominee(s).

• Photographs shall not be required with application for purchase of the Bonds.

• Mudaraba Savings Bond shall be acceptable as security.

• If original Bonds are lost or damaged due to theft, fire etc. there shall be arrangement for issuance of duplicate Bonds after due verification.

• Mudaraba Savings Bond holders alongwith other Mudaraba depositors shall get preference in the matter of investment of their deposits over the Bank's equity and other cost free funds.

• Income derived from the investments during the accounting year shall at first be allocated to the Mudaraba deposits and cost free funds (including Bank's equity) according to their proportion in the total investment as per principles of distribution of profit to Mudaraba depositors.

Other Terms & Conditions

• Deposits against Mudaraba Savings Bond shall be accepted strictly on Mudaraba principles of Islamic Shariah and accordingly the deposits so received shall also be invested as per Islamic Shariah.

• The depositors must preserve the Bonds properly and carefully. In case of loss or damage of the Bonds, the depositors must inform the Bank immediately for taking necessary precautions. If the depositors fail to inform the Bank about the loss, the Bank shall not be responsible for any withdrawal of money against the Bonds through fraudulent means.

• Nomination can be cancelled at any time and the depositors can nominate new nominee. Nomination shall be cancelled automatically if the nominee dies before maturity of the Bonds. Nominee shall be entitled to the benefits only after the death of the depositors. Mudaraba Savings Bonds purchased in joint names shall be encashed under joint signatures if there is no instructions, the legal heirs of any joint depositors shall get their share as per law in case of death of any of the joint depositors.

• Mudaraba Savings Bond holders shall not share any income derived from different services of the Bank where the use of fund is not involved. Similarly, the Bondholders shall also not share any income derived from the investment of Bank's equity and cost-free fund.

• Profits of any accounting year shall be declared after certifying the accounts of the Bank by the auditors appointed by the shareholders in the Annual General Meeting.

• If the Bonds are encashed before finalisation of the annual accounts of the Bank, profits shall be paid on the basis of provisional rate. Afterwards if it is found on finalisation of accounts that the profits are more or less than the provisional rate, neither the Bank nor the concerned depositors shall have any claim.

• Profits shall be calculated on the basis of weightage pertaining to the particular Bond.

• No profit shall be paid if any Mudaraba Savings Bond is encashed before expiry of one year. If any Bond is encashed after one year but before the maturity date, profit shall be paid at reduced rates applicable to the period covered.

• No profit shall be paid for the period after maturity of the Bond, if not encashed on maturity.

• The Bondholders shall have to communicate to the Bank, if there is any change of their address.

• The Bank reserves the right to change, amend, modify or cancel any rules, terms and conditions of the scheme.