Non-Bank Financial Institutions &

IDLC Finance Limited

Prepared for Prepared by
Hasan A. Mamun Mohammad Hasanur Rahaman
Lecturer, School of Business Mamunur Rashid
North South University. Swapan kumar Sarkar
Md. Moniruzzaman Rubel
Sabrina Humayan Upoma



Course: FIN 433
Section: 2
Date: 13
th
April, 2014


Executive summary:

The main purpose of this report was to know about the different activities or function,
services and the financial condition of IDLC Finance Limited. Moreover we also include the
overall condition of Non- Bank Financial Institution in Bangladesh. We have provided our best
effort to include relevant information and analysis to make the report complete and
comprehensive. This was an exciting, very useful practical exercise and we are using the
information, compiling and producing them in report format. For preparing this report, we have
analyzed different secondary reports. After completing this report we find out services that
provided by NBFI and also know the rules and regulation they followed and their financial
position. The major part of the report is to find out the overall situation of IDLC. We find that
their main aim is to focus on quality growth, superior customer experience and sustainable
business practices. Although they initially started with Lease Financing as Their core product,
IDLC has grown to become the largest multi-product Non-Bank Financial Institution of
Bangladesh, with almost equal focus in Corporate, Retail and SME sectors. Moreover we also
find that IDLC is highly respected by their clients, peers, employees and regulators for their
strong corporate governance, statutory compliance, high ethical standards, a progressive and
enabling working environment, and strong commitment to environmental and social
development.



Contents
The Concept of Non-Bank Financial Institution ....................................................... 1
Product and Services Provided by NBFI ................................................................... 2
NBFIs in Bangladesh ................................................................................................. 4
Profile of IDLC .......................................................................................................... 8
Board of Directors ....................................................................................................10
Management Committee .......................................................................................12
Strategic objectives for 2013-14: .............................................................................14
Subsidiaries of IDLC: ..............................................................................................14
Services of IDLC .....................................................................................................15
Corporate division: ...............................................................................................17
Consumer Division ...............................................................................................19
SME Division........................................................................................................20
Roles that IDLC playing in financial market ...........................................................21
Sources of Funds ......................................................................................................23
Deposit Schemes ......................................................................................................24
Additional activities of IDLC ..................................................................................34
Performance evaluation............................................................................................36
Conclusion ...............................................................................................................39



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The Concept of Non-Bank Financial Institution
A non-bank financial institution is a financial institution that does not have a full banking
license or is not supervised by a national or international regulatory agency. According to World
Bank data and research, a non-bank financial institution (NBFI) is a financial institution that
does not have a full banking license and cannot accept deposits from the public. However,
NBFIs do facilitate alternative financial services, such as investment (both collective and
individual), risk pooling, financial consulting, brokering, money transmission, and check
cashing. NBFIs are a source of consumer credit (along with licensed banks).
The definition provided by Bangladesh Bank encompasses only leasing and finance companies.
But there are a number of other financial institutions that are also called NBFI. The matter of fact
is that all insurance companies, merchant banks and securities houses are NBFIs.
The first non-bank financial institution was a fire insurance company established in 1680
in London named Phoenix Assurance or Phoenix Fire Office. Industrial Promotion and
Development Company (IPDC) was the first private sector NBFI in Bangladesh, which started
its operation in 1981.
Is This Concept Viable?
By specializing in certain products and services non-bank financial institution (NBFIs)
acts as a supplement bank. While banks may offer a set of financial services as a package deal,
NBFIs unbundle these services, tailoring their services to particular groups. Additionally,
individual NBFIs may specialize in a particular sector, gaining an informational advantage. By
this unbundling, targeting, and specializing, NBFIs promote competition within the financial
services industry.
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Having a multi-faceted financial system, which includes non-bank financial institutions, can
protect economies from financial shocks and recover from those shocks. NBFIs provide multiple
alternatives to transform an economy's savings into capital investment, which act as backup
facilities should the primary form of intermediation, fail.
Product and Services Provided by NBFI
The competition among NBFIs is increasing over the years, which is forcing them to
diversify to a wider range of products and services and to provide innovative investment
solutions. The product and services provided by NBFIs can be categorized as under:
1. Accepting Deposit
As it has been said deposit products of NBFIs are usually of two types.
Term Loan: As NBFIs are not allowed to maintain checking account the main deposit product is
of term loan. Maturities of these loans vary from one to five years. However maturity other than
this is also available for many NBFIs.
Deposit Pension Scheme: under this scheme deposits are accepted on a periodic basis with
equal installment. The future value is payable at the end of the period in a lump sum.
2. Financing contains-
Lease financing: Leasing facilitates the use of a fixed asset without owning it in exchange of a
series of periodic payments. There are different types of leasing that a financial institution can
provide. NBFIs usually provide capital lease, operating lease, leveraged lease, and sale and lease
back, synthetic lease, etc.
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Home loan and real estate financing: House loan and real estate financing is extended for
purchase, construction, renovation and extension of apartment & house, purchase of office space
for professionals, purchase and construction of commercial building, real-estate development for
construction of apartment project.
Bridge Finance: Bridge finance fills the gap between the need of fund and availability of fund in
the near future. It is extended in anticipation of immediate long term financing such as public
issue, private placement, loan syndication, etc.

3. Merchant Banking includes-
Issue Management: The Issue Management group is capable of devising innovative solution to
corporate clients for raising capital - debt and equity through private and public placement from
the market suiting the unique needs and constraints of the clients.
Underwriting: Underwriting refers to the guarantee by the underwriters that in the event of
under-subscription; the underwriter will take up the under-subscribed amount on pro-rata basis
upon payment of price of that option. It is done by a group of underwriters.
Portfolio Management: Merchant banks offer small investors to open investors account with
merchant banks and provide support for the purchase and sale of shares for the clients. Clients
shall have absolute discretionary power to make investment decisions.
Corporate Advising: Through corporate advising, the merchant bank helps the issuer analyze its
financing needs and suggest various ways to raise needed funds and terms and timing of issue.

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4. Securities services
Brokerage services: members of stock exchanges are allowed to provide brokerage services for
Trade Execution, Pre -IPO private placement.
CDBL services as full service depository participant (DP): Apart from the brokerage services,
securities services also provide the services like BO (Beneficial Owner) accounts opening and
maintenance, Dematerialization, Re-materialization, Transfers, Lending and borrowing, etc

NBFIs in Bangladesh
Rules and Regulations: NBFIs were incorporated in Bangladesh under the then Companies Act,
1913 and were being regulated by the provisions contained in Chapter V of the Bangladesh Bank
Order, 1972. Currently NBFIs have been given licenses and regulated under the Financial
Institution Act, 1993. There are 31 NBFIs licensed under this act. Presently, out of 31 NBFIs, 3
are Government-owned, 10 are joint venture and the rest 18 are locally private-owned.
Meanwhile, the branch network increased to 170 as on 30 June 2013.






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Table: Structure of NBFIs

Investment Pattern of NBFIs: NBFIs are investing in different sectors of the economy, but
their investments are mostly concentrated in the industrial sector. In June 2013, NBFIs
investment in different sectors is shown in the chart.

Assets, Liabilities and Deposits of NBFIs: Asset, liabilities and Deposits of NBFIs from 2007
to 2013 are shown below in the table.

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Table: Asset, Liabilities and deposits of NBFIs

Earnings and Profitability of NBFIs: Among various measures of earnings and profitability,
the best and widely used indicator is Return on Assets (ROA) which is supplemented by Return
on Equity (ROE). ROA and ROE of all the NBFIs from 2007 to 2013 are given below.
Table: Profitability of NBFIs

Benefits of NBFIs in our Economy when we have so many Commercial Bank: The non-
Banking Financial Institutions (NBFIs) run in parallel to the traditional deposit taking
commercial banks. But they have a distinct importance in the economic growth besides bank.
They are given below.
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Mobilization of Resources: NBFIs convert savings into investment to mobilize resources of an
economy. This mobilization of resource eliminate if not, lessens the intra-regional income and
asset distribution inequalities. If NBFIs are not present in the financial system the useful
application of savings into investment might remain a dream. One striking aspect of NBFIs is
that they are usually development-oriented and not merely profit-maximizing organizations.
Provision of Long-term Credit: Commercial banks are reluctant to sanction long-term credit to
commerce and industry. This is primarily due to maturity-mismatch i.e. they are holding short-
term repayable deposits which are not comparable to long-term credit. This is where NBFIs
come into action. The large scale manicuring sector and mega infrastructure projects are largely
dependent on the availability of credit from NBFIs which fosters economic development. Unlike
commercial banks, they finance corporations through equity participation also, which is a unique
feature of NBFIs.
Employment Generation: Employment generation is one of the prime objectives of any
macroeconomic policy. To achieve full employment in the economy; governments allocate huge
amounts to be disbursed through NBFIs to private sector. This inflow of funds from public sector
to private sector via NBFIs spawns business activities thus minimizing unemployment rate.
Financial Markets Development: NBFI underwrite public issues of corporations. They provide
much needed capital to new start-ups through venture capital. They are the source of liquidity in
these markets.

Specialized Credit: Some NBFIs are dedicated to a particular sector. Provision of funds to the
sectors like housing, agriculture, industry and SMEs are carried out through these. They act as a
conduit of transferring public capital to private sector.
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Profile of IDLC



















Name of the Company IDLC Finance Limited
Founded 1985
Industry Type Non-Banking Finance Institution
Head office Bays Galleria (1st Floor)
57 Gulshan Avenue, Dhaka 1212
Subsidiaries IDLC Securities Limited
IDLC Investment Limited
CEO and Managing Director Selim R.F. Hussain
Branches 26
Employees 642
Products and Services Financial instruments
Website http://www.idlc.com

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IDLC is of the largest NBFI. It established in Bangladesh in 1985 through the
collaboration of International Finance Corporation (IFC), German Investment and Development
Company (DEG), the City Bank Limited, IPDC of Bangladesh Limited, and Sadharan Bima
Corporation. As the company evolved, initial foreign shareholding of 49% was gradually
withdrawn and the last foreign shareholding was bought out by local sponsors in 2009. Although
they initially started with Lease Financing as Their core product, IDLC has grown to become the
largest multi-product Non-Bank Financial Institution of Bangladesh, with almost equal focus in
Corporate, Retail and SME sectors.

Moreover, IDLC has a significant presence in the Capital Markets. IDLC has established
two wholly owned subsidiaries, IDLC Securities Limited and IDLC Investment Limited to
provide customers with security brokerage solutions. IDLC is highly respected by their clients,
peers, employees and regulators for their strong corporate governance, statutory compliance,
high ethical standards, a progressive and enabling working environment, and strong commitment
to environmental and social development. They continue to play a pioneering role in introducing
and popularizing a variety of financial instruments suiting ever-changing requirements of its fast-
growing clients. They are continuously expanding their presence to ensure the best quality of
service to their clients at all times.

Mission Statement: We will be the best financial brand in the country
Vision Statement: We will focus on quality growth, superior customer experience and
sustainable business practices.
Goal: Long term maximization of Stakeholders value
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Board of Directors


Anwarul Huq, Chairman
Chairman & CEO


Rubel Aziz Farooq Sobhan Aziz Al-Kaiser
Director Independent Director Director




Meherun Haque Hossain Mehmood K. Mahmood Sattar
Director Director Director



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Md. Kamrul Hassan Md. Rezaul Karim Alhaj Akram Hussain (Humayun)
Director Director Director


Syed Abu Naser Bukhtear Ahmed Selim R.F. Hussain
Director CEO & Managing Director
























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Management Committee


Selim R.F. Hussain
CEO & Managing Director



H.M. Ziaul Hoque Khan Asif Saad Bin Shams M. Jamal Uddin
Deputy Managing Director General Manager and General Manager and
Head of Credit and Collection Head of Corporate and
Structured Finance


Mir Tariquzzaman Zahid Ibne Hai Bilquis Jahan
General Manager and General Manager and Deputy General Manager
Chief Technology Officer Head of SME Division and Head of Human Resources




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Irteza A. Khan M. Ataur Rahman Chowdhury Mustaq Ahammed
Deputy General Manager & Assistant General Manager and Assistant General Manager
Head of Consumer Division Head of Operations and Head of Internal
Control and Compliance



Md. Moniruzzaman Md. Saifuddin
Managing Director Managing Director
IDLC Investments Limited IDLC Securities Limited








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Strategic objectives for 2013-14:










Subsidiaries of IDLC:
IDLC Securities Limited
IDLC Securities Limited, a fully-owned subsidiary of IDLC, offers full-fledged
international standard brokerage services for both their retail and institutional clients. It has seats
on both Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. It is also a
Depository Participant (DP) of Central Depository Bangladesh Limited (CDBL).


Grow and develop Their talent pool
Fully leverage new core banking platform
Optimize distribution points
Grow and diversify funding sources
Grow sales and service capabilities in Consumer Division
Aggressively grow SME portfolio
Focus on top-tier clients in Corporate
Consolidate capital market operations and enhance capabilities
Embrace internationally accepted corporate governance and sustainable
business practices.

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IDLC Investments Limited
IDLC formed a separate subsidiary on May 19, 2010 in the name of IDLC Investments
Limited, in order to transfer its existing merchant banking activities to the newly formed entity.
They have started its operations from August 16, 2011 to offer merchant banking services to both
their individual and institutional clients.

Highlights of the company in 2013:

Loans Taka
loans and Advances 40,941 million
Home loan 4,421 million
SME loans 10,392 million

Even in a tough economic environment, revenue per branch rose 25.32% in
2013.

Services of IDLC
To ensure steady and long term growth as well as to sharpen its competitive edge in a changing
and challenging business environment, IDLC always endeavors to diversify into other financial
services which have long term prospects. The products and services are as follows

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Corporate
Division
Corporate Finance
Structured Finance
Consumer
Division
Deposit schems
Home loan
Car loan
Personal Loan
Registra loan
SME Division
Small Enterprise Finance
Medium Enterprise Finance
Women Entrepreneur Loan
Commercial Vehicle Loan
Supplier Finance
JICA-SME Loan
Products and Services of IDLC
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Corporate division:
1. Corporate finance: IDLC provide services the financial activities that related to running
a corporation. They have extensive knowledge, expertise and experience to offer a range
of financial solutions in response to the needs of a broad spectrum of clientele,
comprising of local and multinational corporate houses in Bangladesh.
Lease Financing: Asset backed financing against industrial machinery,
commercial equipments, office equipments, generators, vehicles, vessels, engines,
etc.
Term Loan Financing:
Term loan: IDLC provide long term loan to the different corporation for meeting
various regular capital/fixed expenditures like balancing of production line,
expansion of capacity and space, etc.
Bridge Financing: For meeting the funding requirements of the borrower for any
interim period and usually for shorter term.
Long Term Finance for Real Estate Developers: Financing to developers for
meeting the capital expenditures/construction costs of any specific real estate
project, for both residential and commercial purposes.

Working Capital Financing: IDLC offering working capital financing to assist
companies in carrying out day-to-day business operations.

Project Financing: They finance for setting up of a new unit as addition to the
existing product line and capacity, a new concern of an existing group, a new
Joint Venture project of an existing company, etc.
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Specialized Products:
Refinancing of Existing Liabilities: They provide money for matching the
repayments with cash flows, allowing some more time for repayment and they are
releasing working capital limits refinancing of existing good quality liabilities is
made.
Arranging Special Funds: They are also arranged money for large corporate
houses through special funds from local and international development agencies,
central Banks, Government agencies, etc.

2. Structured Finance
Structured Finance refers to the process of designing and managing complex financial
transactions to meet the unique financial needs of large corporate clients that cant be
matched by conventional financial products.
Fund-Raising: Structured Finance Department is equipped with the knowledge,
expertise and network to offer customized fund-raising services in a variety of
modes, such as foreign currency loan and syndication.
Advisory Services: They provide advises to their corporate clients such as,
Feasibility study: They are analyzing demand-supply scenario, target market,
competition, regulatory issues, technology and skills requirement, environmental
aspects etc.
Merger & Acquisition: Companies can engage in merger and acquisition
activities for a multitude of strategic and tactical reasons, but essentially to
achieve synergy by combining complementary resources.
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Securitization of Assets: They create a unique financial instrument by combining
a number of individual assets into a security. By subsequently selling off different
tiers of such repackaged debt instrument to the investors, the company gains
access to larger funding to finance its expansion projects.

Consumer Division
1. Deposit schemes: IDLC Finance Limited offers a wide range of term deposit products to
meet both your personal and professional needs.
Flexible Term Deposit Package: There is a flexibility of Consumer to choose the time
of the deposit. Short term deposit 3 to 12 month and the loan term deposit from 13 to 60
months. There is also 500 days deposit schemes.
Regular earner deposit: The return will be based on specific amount of money not the
percentage. It can be monthly or yearly based on the depositors preferences.
2. Home loan: They offer clients the most convenient home loan facility and they sanction
the loan within the shortest possible time, and also before starting construction of the
building or purchase of the apartment. The maximum time is 20 years.

3. Car loan: They also provide loan to clients for buying a car. The maximum time for this
type of loan is 5 years. For this loan client has to earn at least TK.40, 000 monthly for
service holder, for small and medium business person and landlords TK. 50,000 and for
corporate service holder is TK. 75,000.
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4. Registraloan: It is a secured loan facility for property buyers and possession-holders for
securing ownership of apartment, commercial space and land. It is offered against the
mortgage of real estate ownership, this facility will help you manage the registration cost
of the property.
5. Personal Loan: They provide personal loan to the clients to meet their different personal
expenses such as, Purchase of consumer durables, Meeting financial liabilities, marriage,
education or medical treatment.
SME Division
1. Small Enterprise Finance: IDLC offers financing facilities to small-scale enterprises
for carrying out their trading, manufacturing or service business.
2. Medium Enterprise Finance: SME-Mid segment offers mid and longer term
financial solutions. Their portfolio comprises of various Limited, Partnership and
Proprietorship concerns from a wide range of prospective business sectors.
3. Women Entrepreneur Loan: This offered to small and medium business enterprises
operated by women entrepreneurs for meeting working capital requirements and/or
purchasing fixed assets.
4. Commercial Vehicle Loan: "Commercial Vehicle Loan" is a lease facility for the
purpose of vehicle purchase for commercial use. The includes these kinds of vehicles
such as Mini Truck, Truck, Covered Van, Pickup Van, Cargo, Crane and other heavy
commercial vehicle.
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5. Supplier Finance: It is short-term facility enables the suppliers/service providers to
realize the maximum that portion of the payment will get soon after the delivery has
been made to the buyer.
JICA-SME Loan: SME Loan by JICA is a loan facility under the two-step fund, provided by
Japan International Cooperation Agency (JICA) offered to small and medium business
enterprises of Bangladesh.
Roles that IDLC playing in financial market
1. Investment Banking: IDLC has a significant contribution to asset financing to capital
market in Bangladesh. In 1998, the Security Exchange commission (SEC) allowed it to
carry out investment banking. It started its operation as a investment bank through Issue
management, Issue underwriting, bridge financing and other related services since 2002.
IDLC provides comprehensive non discretionary portfolio management services
including trades execution and margin loan under its investment account called Financial
Market Invest since early of 2005. Up to September 2011, its clients number crossed
5600 boundaries. Recently it has introduced its newest innovation of portfolio
management Manage Cap a BDA (Brokers Discretionary Account) type account
service.
2. Underwriting New Issues: IDLC Finance Limited started its underwriting functions
with the IPO of Premier Leasing in 2005 and the size was BDT 2,775,000. In 2005 total
underwriting was only BDT 110,225,000, whereas in 2009 it stood in 408,000,000. Total
underwriting by IDLC is BDT 932,725,000 and only in 2009 it maintains almost 44% of
its total underwriting. It is a big contribution to the market.
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3. Brokerage Services: IDLC helps in trade execution in Dhaka and Chittagong Stock
Exchange Limited. They have dedicated and skilled sales representative who will take
opportunities for trading through different financial instrument. It also help clients to
open Beneficial owner (BO)account and properly maintain it. Moreover, IDLC facilitates
dematerialization- The move from physical certificates to electronic book keeping.
Actual stock certificates are slowly being removed and retired from circulation in
exchange for electronic recording to the Center Depository of Bangladesh (CDBL) part
of the company register.

4. Internet Trading: IDLC provide internet trading facilities through three medium. Those
are described below-
a) Call Center: Interested person can call 9556661 to access their Call Center facilities.
They have professional associates will assist clients executing their trades efficiently.
b) I-trade: One can excess his/her portfolio or portfolios to manage from online
c) M-trade: By using a Java application, clients can access their portfolios they manage
in their mobile phone and enter buy/sell order from that application.
5. Portfolio Management: IDLC Investments Limited facilitates investors with two major
discretionary investment accounts MAXCAP and Cap Invest to help them for properly
managing their portfolio.
a) MAXCAP- It is a personalized discretionary investment account designed for high
net worth clients, both individuals and institutions. Portfolio Manager, will follow a
disciplined investment process and structured approach to build clients portfolio,
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tailored to their specific needs and constraints. Minimum investment amount is 5 lac
for individual and 10 lac for corporate. There is a 2.5 % management fee, 0.35 %
settlement fees and TK. 500 is documentation fees.
b) CAP Investment- It is an Investor's Discretionary Account that provides margin loan
facilities to the investors. Minimum investment amount is TK. 1 million but not
exceeding Taka 80 Million. Less than 1 million investments have to pay 0.5 percent
more management fees. Documentation fees is TK. 500 and management fees is 1 %
for above 1 million and 1.5 % for below 1 million. Interest rate is 16.25 charged
quarterly for above 3 million and 16.50 % for below 3 million.

Sources of Funds
1) Borrowings loan from other banks, financial institutions and agents: This kind of
borrowing includes several types of loan like; short-term and call loans that means the
lender may force the borrower to repay at any time. Unsecured long-term loan that also
called 'signature loans' because the institution has nothing but your signature and they
can't take possession of your house, car, or other belongings and secured long-term loans
Secured loans are covered by first equitable mortgage of all present and future
immovable properties and by floating charges on movable assets of the Company ranking
pari-passu(with an equal step) among the lenders. In 2013 total borrowing from this
sector was Tk.8,707,892,450
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2) Term deposits: This represents deposits received from institutions and individuals for a
period not less than three months period. During 2013 total term deposits were Tk.
29,163,880,082.
3) Paid-up capital: Another source of fund is paid-up capital from share holder who have
completely paid for the purchased share. IDLC has a paid-up capital of Tk.1,608,750,000
in 2013.
4) During 2013 IDLC has gather share premium of Tk.3,750,000 which been also used as
a fund of the company.
5) IDLC have borrowed Tk.625,900,000from different affiliated companies
Tk.625,900,000

Deposit Schemes
IDLC Finance Limited offers a wide range of Term Deposit Products to meet both your personal
and professional needs.
Minimum Deposit Amount and Tenor Taka:
50,000 only for a minimum period of 6 months

IDLC Regular Term Deposits:


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Flexible Term Deposit Package
Term Interest Rate
3-6 months 11.00%
7 -12 months 11.00%
13 months 11.00%
14 months 11.00%
15 months 11.00%
2 Years 11.00%
3, 4 & 5 Years 11.00%



IDLC 500 Days Term Deposit
Term Interest Rate
500 Days 11.00%

IDLC Double Money DepositTerm
6 Years

IDLC Triple Money Deposit Term
9 years 10 months

Regular Earner Package:
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IDLC Monthly Earner Deposit
Term
Individual
Interest Amount per Month /
Lac
Institution
Interest Amount per Month /
Lac
1 Year BDT 917 BDT 917
2 Year BDT 917 BDT 917
3,4 & 5 Year BDT 917 BDT 917


IDLC Quarterly Earner Deposit

Term
Individual
Interest Amount per Month /
Lac
Institution
Interest Amount per Month /
Lac

1 Year BDT 2,775 BDT 2,775
2 Year BDT 2,775 BDT 2,775
3,4 & 5 Year BDT 2,775 BDT 2,775

Bank Deposit Interest rate Initial Maturity Period
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payment
AB Bank
Limited

Fixed Deposit
(Time
Deposits)

6%-10% 5,00,00,000 to
100,00,00,000
& Above

1 (One) Month, 3 month, 6
month, 1 year, 2 year

Savings
Deposits

6% - 8%

50, 00, 00,000
to Above 100,
00, 00,000

_______

SND (Special
Notice
Deposit)
4%- 8%

1, 00, 00,000 to
Above 100, 00,
00,000
_______

City bank
Limited

City
Ichchapurun
(Fixed )

1Year 7.50%,
2Years 7.75%,
3Years 8.00%,
5Years 8.50%

_______ __________




City Projonmo
(Any Purpose



5 Years 8.50%,
10Years 8.75%,




_______




_________
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Loan)

15 Years 8.75%,
20Years 8.75%




City
Shomridhdhi
(Savings
Account)


3 Years 8.50%,
5 Years 8.50%,
7 Years8.50%,
10 Years 8.50%

0
Prime Bank
Limited
Education
Savings
Scheme

Maturity Amount:
Tk. 80,000
Tk. 50,000/-

5 years


House
Building
Deposit
Scheme
(Monthly
deposit)
___________ Tk.10 lac. 5/7/10 years.

Monthly
Benefit
Tk. 800 per Tk. 25,000 5 years
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Deposit
Scheme
(Monthly
deposit)
1,00,000 per Month

Prime
Millionaire
Scheme
Maturity Amount:
Tk.10 lac.

12,810/-
monthly
5 years
















Short Term
Deposit











Below Tk.1crore
3.00%, Tk.1crore &
above but below
Tk.25 crore 4.00%
- Tk. 25.00 crore &
above but below Tk.
50.00 crore 5.00%,
- Tk. 50.00 crore &
above but below Tk.
100.00 crore
5.00%., - Tk. 100.00
crore & above 5.


BDT 50,000.
Tk. 50.00 lac




























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Standard
Chartered
Bank




Fixed Deposit



_______

one month to Five years.





Monthly
Savings
Schemes

Maturity Amount:
53,018

BDT. 10,000 36 months

NFCD
Account

Minimum USD
1000 or GBP
500 (for
individual
Bangladeshis),
Minimum of
USD 25,000 or
equivalent GBP
(for others).

Fund has to be present for Minimum
1 month.

One Bank
Limited
Fixed Deposit

9% _______ FDR (3 Months & above but less
than 6 months),FDR (6 Months &
above but less than 1 year), FDR (1
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year & above)

Short Term
Deposits
4.00% ( below 1
crore ), 5.50% (
below 25 crore ),
7.00% ( below 50
crore ),7.25% (
below 100 crore ),
7.50% ( above 100
crore )

_________ _______


Flexibility of tenors: IDLC is offering flexible time length for the depositor. The depositor can
deposit Tk. 50,000 within 6 months. It is reducing pressure for the depositor to deposit the
money in every month. They can deposit the amount whenever they want within 6 months after
opening their account at IDLC. It does not matter when depositor deposit their money, they will
get the interest at the rate of 11% annually.

Competitive interest rates: IDLC is offering an attractive interest rate of 11% annually against
the deposit. Prime Bank Limited & Brac Bank Limited has some attractive deposit schemes with
lots of terms & Conditions. However, IDLC is good option for short-term investment. If a short-
term investor wants to invest then he will easily go for IDLC after watching the schemes at a
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glance rather than a bank. IDLC have some attractive double money deposit & triple money
deposit scheme.

Less requirement of Establishment or Account Opening Fees: In banks, there are many
formalities & around Tk.2000 is needed to open an account. This process takes time if the
depositor forgot to take the information, which was needed, by the bank. This process is time
consuming & the depositor has to pay fees to open an account. In IDLC, there are less
formalities & no fees needed to open an account.

Quick Loan facility against Deposit: In banks, if the depositor wants to take a loan they have to
put something as collateral against the loan. If the depositor wants to take a loan from IDLC,
they can easily get it against their deposit. However, this type of loan has higher credit risk but
IDLC is providing this after measuring the creditworthiness of the depositor. They do not need
any collateral.

Countrywide branch network: IDLC has branches all over the country, which can help their
customer anywhere in the country whenever they want.

Online Account Service: Banks charge specific amount fees to provide online account services.
The amount will be deducted automatically from the depositors account after the service. On the
other hand, IDLC is doing online account services with free of cost.

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Online Fund Transfer Facility: Banks are charging a specific amount of money after every
transaction. The amount will be deducted from depositors account. IDLC charging no fees for
online fund transfer.

Auto-renewal facility: IDLC is offering flexible auto renewal facility for the depositor.
Depositor can withdraw the principal amount without interest & principal amount with interest.







0
5000
10000
15000
20000
25000
2008 2009 2010 2011 2012
D
e
p
o
s
i
t

Year
Growth In Deposit Portfolio
In Million BDT
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Additional activities of IDLC
1. Green Finance Projects
a) Tunnel Kiln: IDLC Finance Limited as part of its 'Green Financing' initiatives has
arranged a syndication loan facility of BDT 390.51 million to set up an energy efficient
Tunnel Kiln brick project in Gazipur by promoting the newer Energy Efficient Brick
Kiln (EEKs) technologies that facilitate thermally insulated chamber. The amount has
been raised in participation with different banks/FIs where IDLCs participation is BDT
100 million. The project will generate 30 million bricks per annum. The Tunnel Kiln
technology is one of the most efficient technologies available in this sector which will
ensure low carbon emission and qualify the project for carbon credits. IDLC Finance
Limited is keen to invest in such and other clean development mechanisms (CDM)
projects which have a positive contribution for the environment.
b) Zigzag Brick Kiln: IDLC financed BDT 15.21 million to a modern and environment
friendly brick manufacturing concern in Natore. Total cost of the project was around
BDT 130 million. The factory has production capacity of around 60,000 bricks per day.
The environment friendly technology used in the factory will save a lot of carbon
emission. In this regard, the client has signed an Emission Reduction Transfer Agreement
with IIDFC for selling carbon credit via UNDP.
c) Biogas Plant: IDLC financed BDT 3 million to an Organic Compost Project in Bogra.
Through the project, two organic fertilizers, Vermin Compost and Tricho Compost are
produced. The byproduct of Tricho compost is Tricho litter, which is also an eco friendly
organic fertilizer. With the financing support of IDLC, a laboratory has been set up for
nursing Derma, the very basic element for producing Tricho compost.
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d) Effluent treatment plants: IDLC has put strong focus on financing effluent treatment
plants (ETPs). The adverse effect of liquid wastes from dyes and chemicals, created by
many factories can be completely eliminated through ETPs; IDLC has disbursed a total
of BDT 26 million for setting up effluent treatment plants in three RMG factories in
Narayanganj and Narsingdi.
e) Solar home system: IDLC disbursed loans amounting to a total of BDT 4.5 million for
two companies based in Dhaka. Both the companies import solar panels and accessories
required to install solar panels. One of the companies also sell solar energy efficient
Table Fans. The products are certified by IDCOL, and mostly supplied to primary dealers
and partner organizations of IDCOL.
2. Research: IDLC encourages and uphold discipline in investment through rigorous
research in the investment area. Their Research coverage includes but not limited to listed
companies, sector and economy of Bangladesh. They have qualified and dedicated
professionals research team of four persons who provide insightful opinion regarding
different covered areas to facilitate people investment decision. Their footprint reached
at global village through information hubs like Bloomberg along with frequent
publications in local media
3. CSR Activities:
a) The very first step to address factors that effects climate change and environmental
degradation is mass awareness creation. In continuation of the environmental awareness
campaign across schools, IDLC conducts 2014s session at Rajuk Uttara School &
College and Azampur Government Primary School, Uttara, Dhaka. They believe that
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children are the best medium for such awareness creation considering their natural ability
to learn fast and reflect on their learning.
b) IDLC has sponsored 15 specially challenged children from SEID Trust for one year.
SEID Trust is a voluntary non-government organization working for the rights and social
inclusion of underprivileged children with physical and mental disabilities, including
autism.
c) In 2013 IDLC runs a project named Skills Development and Sustainable Livelihood
which has generated permanent employment for 20 marginal people from the most
impoverished regions of North Bengal. The project provides 3-month training to marginal
people from North Bengal targeting employment in RMG sector as machine operators.
Fareast Knitting and Dyeing Industries Limited, one of IDLCs corporate clients, is
providing employment to these people.
Performance evaluation
Performance evaluation helps us to know how well or bad the firm is performing in its business.
For details view IDLC shows their performance evaluation in mainly three categories. Those are
described below-
a) Financial Performance (Taka in millions)
Particulars 2009 2010 2011 2012 2013 Growth
Lease and Term loans disbursed 3,750 4,345 8,517 12,304 16,895 37.32%
Housing finance disbursement 1,839 2,121 2,586 2,736 4,421 61.61%
Short term finance portfolio 317 468 821 581 604 3.84%
Lease Finance 4,383 4,107 4,547 5,479 6,358 16.04%
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Real estate finance assets 4,789 5,605 6,979 8,262 11,170 35.19%
Total assets 21,565 25,353 29,519 35,748 48,535 35.77%
Long term liabilities 18,792 21,746 25,299 30,987 42,884 38.40%
Term deposit balance 9,780 12,373 16,828 22,008 29,164 32.51%
Net current assets 3,645 4,172 3,676 2,797 2,682 -4.10%

From financial performance analysis we can say that IDLC has a significant growth in housing
finance, lease and terms loan and then real estate finance consecutively. Though the total asset of
IDLC has a growth of 35.77%, the net current asset of the last year has decreased by 4.10% due
to increase in long term liabilities over the year.
b) Operational Performance:
(Taka in millions)
Particulars 2009 2010 2011 2012 2013 Growth
Operational income 1,497 2,186 2,043 1,955 2,574 31.64%
Operational expenses 440 673 672 822 1,022 24.36%
Financial expenses 1,619 1,818 2,359 3,088 4,127 33.67%
Profit before tax 1,273 1,394 913 1,033 1,406 36.18%
Net profit after tax 469 806 804 589 811 37.65%
Average effective tax rate (%) 48.66 42.20 41.57 42.94 42.32 -0.62

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While considering Operational performance we will notice that the net profit after tax has
increased by 37.65% over the last year as a result of high operational income and reduction in tax
rate.
c) Financial Ratio:
(Taka in millions)
Particulars 2009 2010 2011 2012 2013 Growth
Debt equity ratio (Times) 10.65 8.65 8.16 8.38 9.50 13.36%
Financial expenses coverage ratio (Times) 1.79 1.77 1.39 1.33 1.34 0.47%
Current ratio (Times) 1.04:1 1.39:1 1.31:1 1.21:1 1.14:1 -5.78%
Return on total assets (%) 2.44 3.43 2.93 1.81 1.92 0.12
Nonperforming loan ratio (%) 3.43 2.84 2.32 2.09 1.63 -0.46
Return on shareholders equity (%) 28.65 35.99 27.51 16.76 19.24 2.48
Earnings per share* 2.91 5.01 5.00 3.66 5.04 37.65%
* Prior years number of shares have been adjusted to reflect Bonus share issued in 2012.
Negative current ratio of financial ratio table tell us that the current liabilities of IDLCs is
increasing more quickly than current asset of the company and the company are not capable of
covering its current liabilities through current assets. On the other hand, the rate of earning per
share has increased by 37.65% in the last year though the company has adjusted bonus share of
2012

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Conclusion
Over the last three years, IDLC has consistently grown both client deposits and loans at a
significantly faster pace than the average of the countrys banking and FI industry. This growth
strategy will continue as we further leverage new technology and processes while refining their
product focus. They plan to grow their branch network to cover much more of the country every
year and intend to diversify into new products, sectors and geographies. They have almost
trebled our financing in the SME, Consumer and Corporate client segments in the last four years
and will continue this growth rate - expecting to reach an asset base of Taka 100,000 million or
USD 1.25 million by 2017.


References
1. Nasrin, R. And Islam, T. (2014), Equity on IDLC Finance.
http://www.ilslbd.com/research_reports/Equity%20Note%20on%20IDLC%20Finance%2
0Limited.pdf.
2. Products and services (2014). http://www.idlc.com/producta_services.php.
3. Dhaka Stock Exchange (2014), Company Information, Available:
http://www.dsebd.org/displayCompany.php
4. Annual report of IDLC 2013,2012,2011.Available from: www.idlc.com
5. Sustainability report 2013, 2012, 2011. Available from: www.idlc.com