Say in 2011 a bank earned profit amounting Tk. 257,15.91 Lac against deposit of Tk. 3151,08.81 Lac. Calculation of the percentage may be defined as under:
Against Tk. 3151,08.81 Lac deposit, we earned profit of Tk. 257,15.91 Lac
” 100 ”
If we distribute profit to all category depositors @ 8.16%, It will not:
a) Logical
b) Rational
c) Justified
On the other hand it is not possible for the Bank to invest particular category of deposit to particular category of investment, like:
a) Deposit of MSB A/C’s to Cement Industries.
b) Deposit of MSTD A/C’s to Iron Industries.
c) Deposit of MTDR A/C’s to Garments Industries.
d) Etc.
To make logical, rational, justified Islami Bank management introduced weightage system:
It is known to us that we are obtaining deposit on Al-Wadia & Mudaraba Principle. In Al-Wadia deposit we are not giving any profit and in Mudaraba deposit we are giving profit at lest 65% amount of investment income.
Here three important points are lying/hidden:
a) At least
b) 65%
c) Investment Income
Distribution of Weightage
Sl. No. Name of Deposit Weightage
01 Mudaraba Term Deposit
a) 01 month 0.83
b) 03 months 0.88
c) 06 months 0.92
d) 12 months 0.96
e) 24 months 0.96
f) 36 months 0.96
02 Mudaraba Savings Deposit 0.75
03 Mudaraba STD 0.62
04 Steady Money 1.15
05 Super Savings 1.17
06 Multiplus Savings 1.17
07 Money Grower
a) 05 years 1.16
b) 08 years 1.17
c) 10 years 1.18
d) 12 years 1.19
08 Education Savings 1.14
09 Hajj Deposit 1.10
10 Smart Saver 1.17
Share of Mudaraba Depositors on Gross Investment Income, 2006
(Figure in thousand)
01) % of cost bearing deposit to total deposit
% of cost free deposit to total deposit Ratio of cost bearing deposit to cost free deposit
02) Gross Investment Income 392 95 46
03) Share of Cost Free Fund (18%) 70 73 18
04) Share on Mudaraba Deposits on Gross Investment Income (82%)
i.e. 82% of distributable income (82% of Sl. No. 2) 322 22 28
05) Less: 35% Management Fee (35% of Sl. No. 4)) 112 77 80
06) 65% of distributable profit for Mudaraba Depositors (4-5) 209 44 48
(Figure in thousand)
Sl. No. Name of Deposit Total yearly Average Balance Weightage Weighted balance Share of distributable profit Percentage
1 2 3 4 5 (3X4) 6 7
01 Mudaraba Term Deposit
a) 01 month 34 86 46 0.83 289376 23889 6.85%
b) 03 months 464 62 35 0.88 4088687 337540 7.26%
c) 06 months 162 20 20 0.92 1492258 123193 7.60%
d) 12 months 928 10 74 0.96 8909831 735549 7.93%
e) 24 months 25 28 82 0.96 242767 20042 7.93%
f) 36 months 54 62 55 0.96 524405 43292 7.93%
02 Mudaraba Savings Deposit 111 92 74 0.75 839456 69301 6.19%
03 Mudaraba STD 90 00 68 0.62 558042 46069 5.12%
04 Steady Money 194 23 05 1.15 2233651 184398 9.49%
05 Super Savings 273 43 57 1.17 3199198 264109 9.66%
06 Multiplus Savings 24 00 80 1.17 280894 23189 9.66%
07 Money Grower
a) 05 years 36 90 49 1.16 428097 35341 9.58%
b) 08 years 23 30 02 1.17 272612 22505 9.66%
c) 10 years 47 16 11 1.18 556501 45942 9.74%
d) 12 years 120 95 89 1.19 1439411 118830 9.82%
08 Education Savings 56 46 1.14 6436 531 9.41%
09 Hajj Deposit 4 35 1.10 479 40 9.09%
10 Smart Saver 71 06 1.17 8314 686 9.66%
Total 9a) 25929634 9b) 25370415 9c) 2094448.02
01) Individual Weighted balance (col.5)) = Individual yearly average balance X Weightage (col.3 X col.4)
02) Individual Share of distribution (col.6) = Total distributable profit X Individual weighted balance (col.9c X col.5)
Grand total weighted balance (col.9b)
03) Percentage (col.7) = Individual share of distributable fund X 100 (col.6 X 100)
Individual total yearly average balance (col.3)
Against Tk. 3151,08.81 Lac deposit, we earned profit of Tk. 257,15.91 Lac
” 100 ”
If we distribute profit to all category depositors @ 8.16%, It will not:
a) Logical
b) Rational
c) Justified
On the other hand it is not possible for the Bank to invest particular category of deposit to particular category of investment, like:
a) Deposit of MSB A/C’s to Cement Industries.
b) Deposit of MSTD A/C’s to Iron Industries.
c) Deposit of MTDR A/C’s to Garments Industries.
d) Etc.
To make logical, rational, justified Islami Bank management introduced weightage system:
It is known to us that we are obtaining deposit on Al-Wadia & Mudaraba Principle. In Al-Wadia deposit we are not giving any profit and in Mudaraba deposit we are giving profit at lest 65% amount of investment income.
Here three important points are lying/hidden:
a) At least
b) 65%
c) Investment Income
Distribution of Weightage
Sl. No. Name of Deposit Weightage
01 Mudaraba Term Deposit
a) 01 month 0.83
b) 03 months 0.88
c) 06 months 0.92
d) 12 months 0.96
e) 24 months 0.96
f) 36 months 0.96
02 Mudaraba Savings Deposit 0.75
03 Mudaraba STD 0.62
04 Steady Money 1.15
05 Super Savings 1.17
06 Multiplus Savings 1.17
07 Money Grower
a) 05 years 1.16
b) 08 years 1.17
c) 10 years 1.18
d) 12 years 1.19
08 Education Savings 1.14
09 Hajj Deposit 1.10
10 Smart Saver 1.17
Share of Mudaraba Depositors on Gross Investment Income, 2006
(Figure in thousand)
01) % of cost bearing deposit to total deposit
% of cost free deposit to total deposit Ratio of cost bearing deposit to cost free deposit
02) Gross Investment Income 392 95 46
03) Share of Cost Free Fund (18%) 70 73 18
04) Share on Mudaraba Deposits on Gross Investment Income (82%)
i.e. 82% of distributable income (82% of Sl. No. 2) 322 22 28
05) Less: 35% Management Fee (35% of Sl. No. 4)) 112 77 80
06) 65% of distributable profit for Mudaraba Depositors (4-5) 209 44 48
(Figure in thousand)
Sl. No. Name of Deposit Total yearly Average Balance Weightage Weighted balance Share of distributable profit Percentage
1 2 3 4 5 (3X4) 6 7
01 Mudaraba Term Deposit
a) 01 month 34 86 46 0.83 289376 23889 6.85%
b) 03 months 464 62 35 0.88 4088687 337540 7.26%
c) 06 months 162 20 20 0.92 1492258 123193 7.60%
d) 12 months 928 10 74 0.96 8909831 735549 7.93%
e) 24 months 25 28 82 0.96 242767 20042 7.93%
f) 36 months 54 62 55 0.96 524405 43292 7.93%
02 Mudaraba Savings Deposit 111 92 74 0.75 839456 69301 6.19%
03 Mudaraba STD 90 00 68 0.62 558042 46069 5.12%
04 Steady Money 194 23 05 1.15 2233651 184398 9.49%
05 Super Savings 273 43 57 1.17 3199198 264109 9.66%
06 Multiplus Savings 24 00 80 1.17 280894 23189 9.66%
07 Money Grower
a) 05 years 36 90 49 1.16 428097 35341 9.58%
b) 08 years 23 30 02 1.17 272612 22505 9.66%
c) 10 years 47 16 11 1.18 556501 45942 9.74%
d) 12 years 120 95 89 1.19 1439411 118830 9.82%
08 Education Savings 56 46 1.14 6436 531 9.41%
09 Hajj Deposit 4 35 1.10 479 40 9.09%
10 Smart Saver 71 06 1.17 8314 686 9.66%
Total 9a) 25929634 9b) 25370415 9c) 2094448.02
01) Individual Weighted balance (col.5)) = Individual yearly average balance X Weightage (col.3 X col.4)
02) Individual Share of distribution (col.6) = Total distributable profit X Individual weighted balance (col.9c X col.5)
Grand total weighted balance (col.9b)
03) Percentage (col.7) = Individual share of distributable fund X 100 (col.6 X 100)
Individual total yearly average balance (col.3)
what i don't understand is the way the bank calculates the wheightage?
ReplyDeleteI understood that the bank calculates the wheightage according to the deposits importance, risk etc, but my question is HOW does the bank calculate the weightage?
Can you please give an example? How did the bank calculated the weightage 0.83 for the Mudaraba term deposit for 1 month???
how do you get the wightage i.e..83, .88 etc, secondly where is the column 9c , I have seen 7 column there..how did you get column 9 ...plz make it more clear...............
ReplyDelete