The Role of Rural Development Scheme (RDS) of Islami Bank Bangladesh Limited in Developing Social Justice in the Economy of Bangladesh

Abstract

Socio-economic development of a country can truly be measured by ensuring social justice. It requires the expansion of development facilities equally in urban and rural areas. In this urbanized society, the rural areas are lagging behind in every field of development, and the rural development has become a challenge for every country like Bangladesh having huge population living in village areas. Islami Bank Bangladesh Limited (IBBL), has been playing an important role in developing social justice by creating economic opportunities for the rural population. The bank established a Shari’ah based Microfinance program named Rural Development Scheme (RDS) in 1995 with the objective of alleviating rural poverty by providing micro-investment to the agricultural and rural sectors. Presently, the scheme is being implemented in around 18,810 villages. Some 940,989 members of around 28,740 centers, of whom 79% are female, are involved in this scheme. For this investment, RDS adds a flat 12.5% profit rate on the purchasing prices and provides a rebate of 2.5% for timely payment, while the CM institutions charge between 15 to 22% interest. The scheme has also been contributing to the moral and ethical development of the rural people. This paper is aimed at assessing the activities of RDS program with a view to analyzing its role in the development of social justice in the economy of Bangladesh. The study has been designed to identify the problems and prospects of the program and thus recommend the ways to improve the program.

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