Weightage: Meaning & Factors.

01. Weightage : Weightage means preference of one product in

comparison to other product. On the other hand we

can say weightage means giving the value of the

specific or particular matter / subject higher or lesser

than that of / in comparison to similar one.

02. Factors of Weightage :

i) The more risk, the more weightage.

ii) The longer the period, more the risk.

iii) More the uses of Bank’s facility, less the weightage.

iv) Less the Uses of Bank’s facility, more the benefit weightage.

v) Moral Dimension / Ethical values

02. Weightage of Different Products : Weightage.

Types of A/C.

i) AWCA Tk.100 = 0

ii) SND Tk.1.00 = 0.55

III) MSA Tk.1.00 = 0.75

iv) MTDR (36Month) Tk.100 = 1.00

v) Mudarabah Hajj deposit = 1.30 (Up to 10 Years)

Tk.100 above 10 years = 1.35 (Above to 10

Years)

vi) MSS Tk.100 = 1.10 (5 years)

= 1.30 (10 years)

Islamic Financial System

Commercial Banking under Islamic Framework

13.00 Distribution of Profit to Mudaraba Depositors:

The Principles of calculation and distribution of profit to Mudaraba

Depositors generally followed by different Islami Banks are as under:

13.01. Mudaraba Depositors share income derived from investment of their fund.

13.02. Mudaraba Depositors do not share any income derived from miscellaneous

banking services where use of their fund is not involved, such as commission,

exchange, service charges and other fees realized by the Bank.

13.03. Mudaraba Deposits get priority in the matters of investment over Bank’s

equity and other cost free funds.

13.04. The gross income derived from investments during the accounting year is, at

first, allocated to Mudaraba Deposits and Equity & cost-free-funds according

to their proportion in the total investment.

Islamic Financial System

Commercial Banking under Islamic Framework

13.05. The share of gross investment income of Mudaraba Deposits as worked out in

terms of principle shown against serial No 10.04 is distributed as under:

a) Bank retains a preagreed portion (say 20%) as management

fee for managing the investment.

b) Bank retains another preagreed portion (say 15%) for off-

setting investment loss or with a view to maintaining a

general level of return of Mudaraba Deposits.

c) The remaining portion (say 65%) is distributed to Mudaraba Depositors

applying weightages.

13.06. Let us suppose that an Islami Bank applies the following weightages to

Mudaraba Deposits.

a) Mudaraba Hajj Savings Deposit 110%

b) Mudaraba Term Deposits 36 Months 100%

24 “ 98%

12 “ 96%

06 “ 92%

03 “ 88%

c) Mudaraba Savings 75%

d) Mudaraba Short Notive 55%

Islamic Financial System

Commercial Banking under Islamic Framework

13.07. On the basis of the above principles, let us work out the rates of profit using

the information and figures given below:

a) Total Investment Tk. 1000b) Total Investment Income Tk. 150c) Total fund employedi) Banks equity and Al-Wadeeah Deposits Tk. 200ii) Mudaraba Deposit will be Tk. 800

Tk. 1000

Therefore the share of investment income of

Mudaraba Depowit will be (1501000x800)

120.00

Less:

a) 20% Management Fee Tk. 24.00b) 15% Loss Off-setting Reserve Tk. 18.00

Tk. 42.00 Distributable Investment Income Tk. 78.00

Sl. No.

Type of Mudaraba Deposit

Yearly Product

Weightage % Weighted Product

Share of Distributable

Profit

Rate of Profit

1 2 3 4 5 6 71 Mudaraba Hajj

Savings120 110 132.00 14.05 11.71%

2 Mudaraba Term Deposit36 Months 100 100 100.00 10.64 10.64%24 Months 110 98 107.80 11.48 10.44%12 Months 80 96 76.80 8.18 10.22%06 Months 125 92 115.00 12.24 9.79%03 Months 95 88 83.60 8.90 9.37%

3 Mudaraba Savings 120 75 90.00 9.58 7.98%4 Mudaraba Short

Notice50 55 27.50 2.93 5.86%

TOTAL 800 732.70 78.00