Internship Report Internship Report

On On
General Banking, Investment Mode & Foreign
Exchange Activities o Al!Araah Islami Bank "imited#



1

Internship Report Internship Report
On On
General Banking, Investment Mode & Foreign Exchange Activities o
Al!Araah Islami Bank "imited $AIB"%#
&'pervised ()*
Professor M. Mokarrom Hossain
Department of Business Administration
Faculty Of Business & Economics
Daffodil International Uniersity
+repared B)*
Md. !aiful Islam
Id" #$#%##%#&'(
Batc)" *+t)
Ma,or in Accountin-
Department of Business Administration
Faculty of Business & Economics
Daffodil International Uniersity
Date of Submission: 24.06.2013
2
Ackno,ledgement

.)e successful accomplis)ment of t)is report is t)e outcome of t)e contri/ution of a num/er of
people to 0)om I am -rateful and t)anked t)em from t)e ery deep of my )eart. At t)e
/e-innin-1 I 0ould like to e2press my sincere -ratefulness to Almi-)ty Alla) for ena/lin- me to
prepare t)is term report in complete form.
I 0ould like to e2press my special -ratitude to my )onora/le superisor +ro- M- Mokarrom
.ossain Faculty of Business & Economics for proidin- me muc) needed su--estions to prepare
t)is report. His inspiration1 kind direction )elped me in /uildin- coura-e and confidence to face
t)e practical situations.
I e2press my sincere inde/tedness to 3as)im A)med 4)o0d)ury1 Assistant ice president Al!
Araah Islami Bank limitedMoti/heel 0orporate Branch1 for )is kind co%operation and
-uidance. .)e mem/ers of Al!Araah Islami Bank "imited mana-ement 0ere ery co%operatie
and )elpful. .)ey )elped me /y proidin- arious data1 -uidance and direction.
.)anks to all t)ose persons 0)o )elped /y proidin- information and t)eir necessary materials.
3
Letter of Transmittal
3une *&1*$#5
.o
Professor M. Mokarrom Hossain
Department of Business Administration
Faculty of Business & Economics
Daffodil International Uniersity
&'(/ect* &'(mission o Internship Report-
!ir1
It is a -reat pleasure to su/mit my interns)ip report on General Banking, Investment Mode &
Foreign Exchange Activities o Al!Araah Islami Bank "imited#-
.)e 0)ole report is /ased on my academic kno0led-e of BBA pro-ram and practical e2perience
-ained durin- interns)ip. I tried my /est to prepare t)e report. If any furt)er clarification re6uired
re-ardin- my report1 I 0ill -ratefully respond to any clarification re6uired.
Finally1 I 0ould like to t)ank you for kind -uidance and )elp. I )ope and pray t)at you 0ould /e
kind enou-) to accept t)e report and o/li-e t)ere/y.
!incerely 7ours
Md- &ai'l Islam
ID" #$#%##%#&'(
BBA *+
t)
Batc)
Ma,or in Acco'nting
4
Letter of Acceptance
This is to certify Md. Saiful Islam ID: 101-11-1467 has reared this i!ter!shi
reort e!titled General Banking, Investment Mode & oreign
!"c#ange Activities of Al$Arafa# Islami Bank Limited %AIBL&' i!
Moti"eel #ororate $ra!ch i!% u!der my suer&isio! ' (uida!ce% I do here $y
aro&e the style ' co!te!t of this i!ter!shi reort. This is for the artial
ful)llme!t of four year (raduatio! de(ree of **+ i! Ma"or-+ccou!ti!( of
Da,odil I!ter!atio!al -!i&ersity.
I .ish his e&er success i! life.
/////////////////....
(rof) M) Mokarrom *ossain
Interns#ip Supervisor
0aculty of *usi!ess ' 1co!omics
Deartme!t of **+
Da,odil I!ter!atio!al -!i&ersity
2
1E0"ARA2IO3
I solemnly declare t)at t)is dissertation is t)e outcome of ori-inal pro,ect 0ork 0ritten in
my o0n 8an-ua-e and it is not t)e replica of any ot)er student. It )as /een su/mitted for
t)e partial fulfillment of t)e re6uirements of t)e de-ree of Bac)elor of Business
Administration 9BBA: under t)e -uidance of )onora/le superisor1 Professor M.
Mokarrom Hossain1 Faculty of Business& Economics1 Daffodil International Uniersity1
Ban-lades). It )as not /een su/mitted to any ot)er Uniersity or Institution for any
de-ree.
;;;;;;;;;;.
Md. !aiful Islam
ID" #$#%##%#&'(
Department of Business Administration
Faculty of Business & Economics
Daffodil International Uniersity
6
Exec'tive &'mmar)
.)is report is a com/ination of t)ree mont) Interns)ip pro-ram 0it) Al%Arafa) Islami Bank
8imited 9AIB8:. Bank is t)e most important institution in a country. .)e t)en President of t)e
People<s =epu/lic of Ban-lades) 3ustice A)sanuddin 4)o0d)ury inau-urated t)e /ank formally
on %%%%%%%1 #>>+ /ut t)e first /ranc) at &?1 %%%%%%%%1 D)aka started commercial operation on Marc)
*51 #>>+. .)e *nd Branc) 0as opened on ##t) May #>>+ at %%%%%%%%%%%%%%%%%%%
.)e title of t)e report is t)e General Banking, Investment Mode & Foreign Exchange
Activities o Al!Araah Islami Bank "imited#- .)is report is concerned 0it) t)e ealuation and
analysis of t)e -eneral /ankin- of AIB8. .)e purpose of interns)ip is to meet t)e re6uirement of
BBA pro-ram and -ain practical kno0led-e /y understandin- t)e corporate culture. .)e report
started 0it) t)e introductory remarks and su/se6uently summari@es t)e profile of Al%Arafa)
Islami Bank 8imited1 t)eoretical aspects1 analysis and findin-s1 ma,or findin-s in t)e -eneral
/ankin- of AIB81 and t)e closin- part consists conclusion and recommendations.
.)e introduction part of t)is report emp)asi@es t)e /ack-round1 o/,ectie1 scope1 met)odolo-y1
data analysis and limitations of t)e report. .)e report is descriptie in nature. Oerie0 of AIB8
includes O/,ectie1 /usiness policy1 function1 and s)are)oldin- structure1 /oard of directors1
mana-ement committee and continued actiities of AIB8.
.)eoretical aspect of t)is report is -eneral /ankin- of AIB8. Analysis and findin-s part I )ae
analy@ed t)e -eneral /ankin- of AIB8 on t)e /asis of my e2perience and o/seration 90)ic) I
)ae -ot t)rou-) my interns)ip pro-ram from AIB8:.
Usually1 t)e -eneral /ankin- system is ery len-t)y in AIB8. All t)e process -oes t)rou-)
internal meetin-s and lon- discussion. I made some recommendations on -eneral /ankin- of
AIB8.
7
+#apter
no Particulars
(age
no
(A,-$. (A,-$.
Prefatory part
-itle page 1
Dedication 2
Ackno/ledgement 3
Letter of -ransmittal 4
Declaration 2
!"ecutive Summar0 6
-able of +ontent 1$..
(A,-$2
Report Body
+#apter$3ne4 Introduction +#apter$3ne4 Introduction
.2$.5
.) Introduction of t#e report 12
1.1 3rigin of t#e report 13
3
-ABL! 3
+36-!6-
1.2 3b7ective of t#e Stud0 14
1.3 Met#odolog0 8sed 14
1.4.1 Aspects of Anal0sis 14
1.4.2 +riteria of Anal0sis 12
1.4.3 Met#odolog0 of Data Anal0sis 12
1.4.4 Data +ollecting Met#od 16
1.4.2 ,eliabilit0 of +ollecting Data 16
1.2 -0pes of Stud0 17
1.6 Limitations of t#e Stud0 17
1.7 ,eport Design 13
2)
+#apter$ -/o4 +#apter$ -/o4 (ro9le of Al$Arafa# Islami Bank (ro9le of Al$Arafa# Islami Bank
Limited Limited
2:$;<
2.1 Introduction 20
2.2 Management Bod0 24
2.3 Deposits 30
2.4 Liabilit0 (urc#ase b0 t#e AIBL 30
2.2 3=ce Automation 32
2.6 *uman ,esource Department 33
2.7 +orporate Social ,esponsibilit0 34
;)
+#apter$ -#ree4 General Banking Activities +#apter$ -#ree4 General Banking Activities
;>$?@
3.1 -ransaction 37
3.2.1 +as# transaction 37
3.2.1.1 +as# receipt 37
4
3.2.1.2 +as# pa0ment 33
3.2.2 +learing -ransaction 33
3.2.2.1 In/ard clearing 33
3.2.2.2 3ut/ard clearing 33
3.2.2.3 -ransferring -ransaction 34
3.3 3pening Account 34
3.4 ,emittance of und Section 42
?
+#apter$ our 4 Investment Mode of AIBL +#apter$ our 4 Investment Mode of AIBL
?5$<<
4.1 Accept (roposal 20
4.2 Aerif0ing +ustomer 20
4.3 Lease inance 20
4.4 acilities of Lease 21
4.2 Items of Leasing 21
4.6 ,estricted Business 21
4.7 Loan +eiling 21
4.3 (urpose 22
4.4 Mode of inance 22
4.10 Loan ,ene/al 22
4.11 (ro9t ,ate %Interest& 22
4.12 (enal Interest 23
4.13 Securities 23
4.14 (eriod of Loan 23
10
4.12 Mode of Investment 24
4.16 Sector /ise Investment 24
<
+#apter$ ive4 -o !valuate -#e oreign +#apter$ ive4 -o !valuate -#e oreign
!"c#ange Activities 3f !"c#ange Activities 3f
Al$Arafa# Islami Bank Limited Al$Arafa# Islami Bank Limited
<>$1;
2.1 Import inancing 26
2.2 !"port inancing 62
2.3 Back to Back LB+ 64
2.4 lo/ +#art of !"port 70
2.2 ,emittance 71
>)
+#apter$ Si"4 SC3- Anal0sis +#apter$ Si"4 SC3- Anal0sis
1?$1>
6.1 Strengt#s of AIBL 74
6.2 Ceaknesses of AIBL 74
6.3 3pportunities of AIBL 72
6.4 -#reats of AIBL Ma7or 76
1)
+#apter$Seven4 Ma7or indings, +#apter$Seven4 Ma7or indings,
,ecommendation & +onclusion ,ecommendation & +onclusion
11$@2
7.1 Ma7or indings 77
7.2 ,ecommendation 74
7.3 +onclusion 32
(A,-$;
Appended Part
11
A) Bibliograp#0 33
B) Appendi" 34
0hapter!4
Introduction Introduction
4- Introd'ction o the report
12
Bank is a /usiness or-ani@ation like all ot)er /usiness institutions1 /anks ma,or o/,ectie
is also to earn profit. It is mentiona/le t)at /anks do not sell ready -oods like ot)er
products. But definitely a /ank is a serice sellin- institution. .)e serice of a /ank is
concerned as its product. !o1 many people say t)at a /ank is t)at kind of /usiness
institution 0)ose profit earnin- 0ill /e impossi/le /y sellin- more f its products irtual
6uality is not ensured. Bank is a financial institution t)at collects societyAs surplus cas)
and -ies a part of t)at as loan to t)e inestors for earnin- profit. !o1 /ank is a
intermediary institution t)at makes relations)ip /et0een t)e o0ner of surplus sain-s and
t)e inestor of deficit capital. .)ere are many types of /anks in Ban-lades) and t)eir
actiities can /e different /ut t)e main -oal is to earn profit. !ince1 I )ae selected Al%
Arafa) Islami Bank 8imited to continue my interns)ip pro-ram so I )ae muc)
concerned on t)is sector. AIB8 is a lar-est Islamic !)aria) /ank in Banlades) and I
0orked on t)e Islamic /ankin- actiities in Ban-lades). .)e definition of Islamic /ank
approed /y t)e Beneral !ecretarial of t)e OI4 is stated in t)e follo0in- manner. CAn
Islamic /ank is a financial institution 0)ose status1 rules and procedures e2pressly state
commitment to t)e principles of Islamic !)aria) and to t)e /annin- of t)e receipt and
payment of interest on any of its operations. .)e prospectie role to /e played /y an
Islamic /ank t)erein opines t)at Cit is t)erefore1 natural and1 indeed1 imperatie for an
Islamic /ank incorporate in its functions and practices commercial inestment and social
actiities1 an institution desi-n to promote t)e ciili@ed mission of an Islamic economy.D
Islamic /ankin- is essentially a normatie concept and could /e define conduct of
/ankin- in consonance 0ill t)e et)os of t)e alue system of Islam. It appears from t)e
A/oe definitions t)at Islamic /ankin- is a system of financial intermediation t)at aoids
receipt and payment of interest in its transactions and conductin- operations in a 0ay t)at
it )elps ac)iein- t)e o/,ecties of an Islamic economy. Alternatiely1 t)is is a /ankin-
system 0)ose operation is /ased on Islamic principle transactions of 0)ic) profit and
loss s)arin- 9P8!: is a ma,or feature ensurin- ,ustice e6uity in an economy. .)atAs 0)y
Islamic /anks are often kno0n as P8!%/anks.
4-4 Origin o the Report
13
As a serice or-ani@ation a /ankAs performance depends on t)e customer alue and
satisfaction. Because a /ank can ac)iee a /etter position if it fulfills t)e customer needs
and demands. !o customer satisfaction is t)e most important part of a /ank to reac) t)e
acme position. A /ank arran-es all of its actiities for proidin- t)e customer
re6uirements. By fulfillin- customerAs re6uirements a /ank can surie in t)e /ankin-
enironment alon- 0it) enou-) profit. Bank is t)e or-ani@ation t)at makes money /y
utili@in- money and t)at money comes from t)e user of t)e /ank. !o it depends on t)eir
proper utili@ation of money1 secured inestment policy and ri-)t and ,ust /ankin-
actiities. Al% Arafa) Islami Bank 8imited is a /it different from ot)er commercial /anks1
/ecause it follo0s Islami !)aria) of its /ankin- operations.
As an intern 0it) Finance /ack-round I decided 0it) t)e permission of my official and
academic superisors to prepare my report on oerall /ankin- practices of AIB8. .)is
report is /ased on an interns)ip pro-ram in attac)ment 0it) its Bac)elor of Business
Administration 9BBA:. Eac) intern must carry a specific pro,ect1 0)ic) is assi-ned /y t)e
concerned or-ani@ation and approed /y t)e interns)ip and placement aut)ority.
4onse6uently a report /ased on t)e pro,ect is to /e su/mitted to t)e respectie aut)ority.
4-5 O(/ective o the st'd)
.)ere are t0o types of o/,ectie t)at fulfillin- t)e study. .)ese are -eneral and specific
o/,ecties.
General o(/ective*
.)e -eneral o/,ectie of t)e report is to kno0 a/out t)e oerie0 of Al% Arafa) Islami
Bank 8imited1 mana-ement system and marketin- actiities as a priate commercial /ank
as 0ell as its formation1 and its functional1 operational1 and financial aspects.
&peciic o(/ectives*
14
.o -ain practical idea a/out Beneral /ankin- system of AIB8.
.o ealuate t)e inestment mode of AIB8.
.o study t)e forei-n e2c)an-e actiities of AIB8.
.o su--est some possi/le recommendations to oercome t)e pro/lems for t)e
smoot) operation and improement of t)e /ank.
4-6 Methodolog) 7sed
It re6uired t0o sources of information" %
+rimar)* Interie0 0it) clients & Bankers1 o/seration1 5%mont) 0ork e2perience 0it)
different diisional in c)ar-e and su--estion of many e2ecuties.
&econdar)* Annual reports of AIB81 Instruction circular of Head Office1 Broc)ures of
different Banks1 Ee0s Paper & Ma-a@ine re-ardin- Bankin- issues1 !eminar papers and
so on.
4-8-4 Aspects o Anal)sis
.)is report )as /een prepared on Can oerie0 of Al%Arafa) Islami Bank 8imitedD. .o
prepare t)is I )ae focused on t)e -eneral /ankin- actiities1 inestment actiities1
forei-n e2c)an-e actiities and oerall all diisional actiities of AIB8. !ince I )ae
0orked in t)e AIB8 as an internee t)atAs 0)y I )ae some kno0led-e a/out t)e /ankin-
enironment and policy of AIB8. I )ae 0orked eery desk for -at)erin- t)e kno0led-e
and practically do t)ose. !o I )ae prepared my report /ased on my practically
e2perienced and included eery tasks. As an employee point of ie0 I )ae prepared my
report. I )ae tried to s)o0 t)e present scenario of AIB8. .o descri/e t)e /ankin-
actiities I )ae used present status of t)e /ank. As a /anker perspectie I )ae -at)ered
past and present information and distin-uis)ed it from ot)er commercial /anks.
12
4-8-5 0riteria o Anal)sis
All t)e tasks and information re6uired in preparin- t)is report )ae /een collected from
t)e Moti,)eel 4orporate Branc) and Head office of AIB8. .)e scope of t)e
or-ani@ational part coers t)e or-ani@ational structure1 /ack-round1 and o/,ecties1
functional1 departmental and Business performance of AIB8 as a 0)ole and t)e main part
coers forei-n e2c)an-e department of AIB8. Especially it focuses on Islamic /ankin- of
AIB8. .)e scope of t)e or-ani@ational part emp)asi@es on -eneral /ankin- system and it
also si-nifies t)e inestment and oerall forei-n e2c)an-e function of AIB8.
4-8-6 Methodolog) o data Anal)sis
!ince t)is is a descriptie report1 so I )ae tried to descri/e t)e eery components of and
facilities of AIB8. In t)is report I )ae included -eneral /ankin- performance1 inestment
and forei-n e2c)an-e actiities. All of past and present actiities of AIB81 I )ae
descri/ed in t)is report. .o prepare our assi-nment I )ae collected data from primary and
secondary sources. I )ae collected primary data from Interie0 0it) clients & Bankers1
o/seration1 5%mont) 0ork e2perience 0it) different diisional in c)ar-e and su--estion of many
e2ecuties. .)en I )ae collected secondary data t)rou-) internet and /ooks. F)en I 0as a/le to
collect all information relatin- my report t)en I analy@ed t)e data and inesti-ated all data and
information. I e2plained all of related data in t)e analysis part 0)ere I )ae used -rap) and
descri/ed all t)in-s consecutiely. After t)at I )ae tried to compare /et0een t)e AIB8
/ankin- actiities and ot)er commercial /ankin- actiities. After comparin- I )ae
identified some dra0/acks of AIB8 and I illustrated some recommendations to sole
t)ese pro/lems. Finally I )ae tried to make conclusion of my report.
4-8-8 1ata collecting method
.o prepare t)e report1 t)ere are many data and information )as /een used. All information
)as /een collected from primary and secondary sources.
16
+rimar) inormation* For t)e or-ani@ationGpart1 t)e data )as /een collected from t)e
articles1 annual report1 /ooks and rest of t)e part of information )as /een collected from
t)e /ank1 and day to day 0orkin- e2perience )elps to -at)er t)e re6uired information.
&econdar) Inormation* .o prepare t)e report1 I )ae -at)ered more information from
t)e secondary sources. I )ae searc)ed t)e different /anks 0e/ sites as 0ell as lo- in to
t)e Ban-lades) Bank 0e/ site 9000.al%arafa)islami/ank.com &
000./an-lades)/ank.com:. But1 most of t)e information I )ae collected from t)e Al%
Arafa) Islami Bank 8td 0e/site. And ot)er data t)at I )ae collected t)rou-) from /ooks1
ma-a@ines1 ne0spapers etc.
4-8-9 Relia(ilit) o collecting data
All of information t)at )as /een used to prepare my report is real and alid. Because1 all
information )as /een collected from t)e annual report1 /ankAs 0e/ site1 and AIB8
/ankin- policy report. .)e information of t)is report is true /ecause ma2imum actiities I
)ae seen 0)eneer I 0orked at t)e /ank. .)e data and information of t)is report are
totally aut)entic and free of discrepancies. I )ae used suc) information t)at information
does not make any comple2ities /e)ind t)e /ankin- operations.
4-9 2)pes o st'd)
.)e topic of t)is report is Coerall actiities of AIB8D and in t)is report I )ae ,ust
introduced t)e real /ankin- practice of AIB8 and t)e /ankin- enironment. I )ae
descri/ed t)e oerall /ankin- strate-y1 products1 policy1 forei-n e2c)an-e procedures.
And I tried to familiari@e t)e /ankAs /usiness operations. !o t)e type of my study is
e2ploratie study. And lastly I )ae dra0n a comparison /et0een ot)er Islamic /ankin-
practice and AIB8 /ankin- practice. In t)is sense t)e report )as /een deeloped as
e2ploratie type.
17
4-: "imitations o the &t'd)
An o/,ectie of t)e practical orientation pro-ram is to )ae practical e2posure for t)e
students. My tenure 0as for t)irteen 0eeks only1 0)ic) 0as some)o0 not sufficient.
After 0orkin- 0)ole day in t)e office it 0as ery difficult1 it 0as not impossi/le to study
a-ain t)e t)eoretical aspects of /ankin-. On t)e ot)er )and to prepare my interns)ip
report I )ae some limitations as follo0s"
.o collect data and information1 it is a common tendency of any departments to
keep /ack t)eir department data and information.
Unaaila/ility to re6uired pu/lis)ed documents.
8ack of my e2perience and efficiency to prepare t)e standard report.
I o/sered t)at some persons are al0ays /usy in AIB8H t)ey are not a/le to teac)
us arious aspects.
.)e main )indrance /e)ind preparin- t)is report 0as time. .)e tenure of t)e
Interns)ip pro-ram is only t)ree mont)s. !ince 4redit department )as a ast 0ork
area1 it is not possi/le to -o t)rou-) in dept) 0it)in t)is s)ort span of time.
!ometimes t)e information 0as found to /e contradictory and inaccurate.
.)e collected information needed to /e studied more
4-; Report design
.)e report desi-n or lay out is -ien 0it) a fi-ure in /elo0"
0hapter <4* Introd'ction*
In t)e introduction part of t)is report t)e follo0in- t)in-s are included and t)ese are"
Introduction of t)e report1 Ori-in of t)e =eport1 O/,ectie of t)e study1 Met)odolo-y Used
1 Aspects of Analysis1 4riteria of Analysis1 Met)odolo-y of data Analysis1 Data collectin-
met)od1 =elia/ility of collectin- data1 .ypes of study1 8imitations of t)e !tudy etc.
13
0hapter!<5* +roile o Al Araah islami (ank "imited*
.)is is a part 0)ic) is ery important for t)is report /ecause t)is report is prepared on t)e
/asis of Al% Arafa) Islami Bank 8imited and its oerall /ankin- actiities. In t)is c)apter
t)e follo0in- information )as posted. .)ese are" AIB8 profile1 ision1 mission1 -oal of
t)e /ank1 commitments1 present states1 features1 mana-ement /ody1 )ierarc)y1 s)aria)
/oard and 4!= of t)e /ank etc.
0hapter!<6* General Banking Activites*
In t)e -eneral /ankin- c)apter1 t)e follo0in- information )as /een included. .)ese are"
Account openin- !ection1 Bills and clearin- section1 =emittance section1 Deposit section1
4as) sectionAs tasks. Ho0 to make account1 operate1 clearin-1 process of pay orderI
Demand draftI ..1 Accounts actiities1 closin- actiities etc in details.
0hapter!<8* Investment mode o AIB"*
In t)e inestment section t)e follo0in- t)in-s )ae included" inestment mode1 policy1
types of inestment1 policy of inestment1 criteria of inestment1 present scenario of t)e
inestment of t)e AIB81 )o0 to -ain t)e inestment from t)e /ank etc.
0hapter!<9* 2o eval'ate the oreign exchange activities o AIB"*
Forei-n e2c)an-e is t)e si-nificant sector of Al% Arafa) Islami Bank 8imited. In t)is
report t)e follo0in- t)in-s )ae /een included from forei-n e2c)an-e tasks. .)ese are"
import & e2port policy1 import process1 current states of import1 e2port policy1 current
states of e2port and all ot)er forei-n e2c)an-e as 0ell as 8I 4 related actiities.
0hapter!<:* &=O2 Anal)sis o AIB"*
14
.)is 4)apter is mostly focused on stren-t)s of t)e /anks1 0eakness of t)e /anks1
opportunity of t)e /ank1 t)reats of t)e /ank etc. All of pro/lems and prospects are /ein-
disclosed in t)is section.
0hapter!<;* Ma/or Findings, Recommendation & 0oncl'sion*
In t)is section all of findin-s t)at )ae -ot from t)e report /een posted. All of positie
and ne-atie information and findin- )ae /een si-ned in t)is section and descri/ed it
/riefly.
0hapter!5
+roile o Al ! Araah islami (ank "imited
5-4 Introduction
20
Islam proides us a complete lifestyle. Main o/,ectie of Islamic lifestyle is to /e
successful /ot) in our mortal and immortal life. .)erefore in eery aspect of our life 0e
s)ould follo0 t)e doctrine of Al%Jur<an and lifestyle of Ha@rat Mu)ammad 9!m.: for our
supreme success. Al%Arafa) Islami Bank started its ,ourney in #>>+ 0it) t)e said
principles in mind and to introduce a modern /ankin- system /ased on Al%JurAan and
!unna).
A -roup of esta/lis)ed1 dedicated and pious personalities of Ban-lades) are t)e arc)itects
and directors of t)e Bank. Amon- t)em a noted Islamic sc)olar1 economist1 0riter and e2%
/ureaucrat of Ban-lades) -oernment Mr. A.K.M !)amsul Alam is t)e founder c)airman
of t)e /ank. His pro-ressie leaders)ip and continuous inspiration proided a /oost for
t)e /ank in -ettin- a foot)old in t)e financial market of Ban-lades). A -roup of *$
dedicated and noted Islamic personalities of Ban-lades) are t)e mem/er of Board of
Directors of t)e /ank. .)ey are also noted for t)eir /usiness acumen. Al%Arafa) Islami
Bank 8td. )as (? /rac)es and a total of #(## employees 9upto Decem/er *$#$:. Its
aut)ori@ed capital is .aka +$$$ millions and t)e paid%up capital is .aka &'((.*? millions.
Fisdom of t)e directors1 Islamic /ankers and t)e 0is) of Almi-)ty Alla) make Al%Arafa)
Islami Bank 8td. most modern and a leadin- /ank in Ban-lades).
.)e e6uity of t)e /ank stood at .k. >'&(.&+ million as on 5# Decem/er *$#$1 t)e
manpo0er 0as #(## and t)e num/er of s)are)olders 0as &>15?'. It )as ac)ieed a
continuous profit and declared a -ood diidend oer t)e years. Hi-) 6uality customer
serice t)rou-) t)e inte-ration of modern tec)nolo-y and ne0 products is t)e tool of t)e
/ank to ac)iee success. .)e /ank )as a dierse array of carefully tailored products and
serices to satisfy customer needs. .)e Bank is committed to contri/ute si-nificantly to
t)e national economy. It )as made a positie contri/ution to0ards t)e socio economic
deelopment of t)e country 0it) (? /ranc)es of 0)ic) *# is AD t)rou-)out t)e country.
21
>ision
.o /e a pioneer in Islami Bankin- in Ban-lades) and contri/ute si-nificantly to t)e
-ro0t) of t)e national economy.
Mission
Ac)iein- t)e satisfaction of Almi-)ty Alla) /ot) )ere &
)ereafter.
Proliferation of !)aria) Based Bankin- Practices.
Juality financial serices adoptin- t)e latest tec)nolo-y.
Fast and efficient customer serice.
Maintainin- )i-) standard of /usiness et)ics.
Balanced -ro0t).
!teady & competitie return on s)are)olders< e6uity.
Innoatie /ankin- at a competitie price.
Attract and retain 6uality )uman resources.
E2tendin- competitie compensation packa-es to t)e
employees.
Firm commitment to t)e -ro0t) of national economy.
Inolin- more in Micro and !ME financin-.
Goal o the (ank
.)e motto of t)e Al%Arafa) Islami Bank 8td is to e2plore a ne0 )ori@on of innoatie
modern /ankin- creatin- an automated and computeri@ed enironment proidin- one
stop serice and prepare itself to face t)e ne0 c)allen-es of -lo/ali@ation and *$
t)
century.
0ommitments
22
Ours is a customer focused modern Islamic Bankin- sound
and steady -ro0t) in /ot) mo/ili@in- deposit and makin-
6uality Inestment to keep our position as a leadin- Islami
/ank in Ban-lades).
.o delier financial serices 0it) t)e touc) of our )eart to
retail1 small and medium scale enterprises1 as 0ell as
corporate clients t)rou-) our /ranc)es across t)e country.
Our /usiness initiaties are desi-ned to matc) t)e c)an-in-
trade & industrial needs of t)e clients.
3o, present some data on the (ank (elo,*
$In million taka%
23
Particulars *$$& *$$+ *$$' *$$( *$$?
Aut)ori@ed 4apital #$$$.$$ #$$$.$$ *+$$.$$ *+$$.$$ *+$$.$$
Paid up 4apital +?'.>> '((.>& ?+&.*$ ##+5.#? #5?5.?#
=esere Fund &??.$$ +&*.** ?5+.>? #$>#.>+ >$+.55
!)are)olders E6uity >+(.*' #**$.#' #'>$.#? *$5(.+$ *($+.(&
Deposit #$#$?.*? ##'&5.'' #'((+.5& *5$$>.#5 *>'>$.#*
Inestment ?#+$.#' ##&(&.&# #(&*5.#> **>$'.5( *>(*5.(>
Import >55(.&> #*'5#.'$ #??*.#& *($&*.(* 5*'?+.#5
E2port 5'5>.5& &>5*.>$ >#&.*( #*(#&.># *$#('.'&
.otal Income ##*$.?+ #&+*.'? *#(*.&? *>++.'# &5?(.*'
.otal E2penditure ((#.>' >$&.&? #*$*.(# *#>>.&5 *?+>.#'
Profit /efore .a2 5&?.?> +&?.*$ ?++.&( (+'.#? #+*?.$>
Profit after .a2 #+?.(' *'*.>$ &($.$* 5&(.5# ''?.*&
Income .a2 #+(.$$ *#+.#$ 5?+.&+ *5+.+5 +>$.''
.otal Assets #*?(&.'# #+55'.?> *#5'?.#( 5$#?*.5* 5>#+?.&&
Fi2ed Assets #>+.#( *$?.$$ *#+.## 55&.&? 5>'.('
Earnin- per s)are
9.aka:
*'5.'? 5?(.?$ ++$.*& 5$.#* &?.*>
Profit Earnin- =atio &.?>
Diidend per s)are #+.+L *'.$$L 5+L *$L 5$L
Bonus
Eo. of !)are)olders +5(> +&$* &&?( #*$#5 #$''&
Eum/er of
Employees
?$5 ((# >#* #$55 #$?$
Eum/er of Branc)es &$ &# &' &' +$
Manpo0er per *$ #> *$ *5
24
Branc)
2a(le* 6-4 some data o AIB"
5-5 Management Bod)*
.)e mana-ement of t)e /ank is ested in a *& mem/er /oard of directors1 0)o oersee
t)e affairs of t)e /ank t)rou-) a mana-in- director1 t)e c)ief e2ecutie officer of t)e
/ank1 in Decem/er *$$$1 t)e /ank )ad a total of '**employees1 includin- its e2ecuties
and it )ad 5+ /ranc)es 95$ ur/an and + rural:. But in *$## t)e num/er of /ranc)es is (?
and employees a/out 5$$$. .)e re-istered )ead office of t)e /ank is at Moti,)eel1 D)aka.
Management o Managing 1irector
22
Ekram'l .o?'e
Mana-in- Director
Md- Rai?'l Islam
Deputy Mana-in-
Director
@hondoker
3a)eem'l @a(ir
Deputy Mana-in-
Director
Md MoaAAel
.ossain
Deputy Mana-in-
Director
Fig're!6-4* Management (od) o AIB"
26
Board o 1irectors
!8 Eame !tatus 0it) t)e Bank
# 3/. Al%Ha,, Badiur =a)man
4)airman
* !arker Mo)ammad !)ameem
I6/al
Mice 4)airman
5 Al)a,, Md. Harun%ar%=as)id
N)an
Director
& Al)a,, Ea@mul A)san N)aled
Director
+ Al)a,, A/dul Malek Molla) Director
' Al)a,, Hafe@ Md. Enayetulla) Director
( Al)a,, A/dul Moktadir Director
? Al)a,, A)amedul Ha6ue Director
27
> Al)a,, A/dus !amad Director
#$ Al)a,, A/u Easer Mo)ammad
7ea)ea
Director
## Al)a,, A/dus !alam Director
#*
Al)a,, Eia@ A)med
Director
#5 Md. As)ik Hossain Director
#& !a/rina Fara) A)med Director
#+ Mo)ammed Emadur =a)man Director
#' Md. =afi6ul Islam Director
#( An0ar Hossain Director
#? Dr. Momta@ Uddin A)med Director
#> 3/. Ekramul Ho6ue E2%Officio Director
*$ Bri-adier Beneral M A Malek
9=etd:
Director
2a(le6-5 Board o 1irectors "ist
"ist o 0hairman o the Exec'tive 0ommittee $E-0%
23
!.8. Eame Desi-nation
#. Al%Ha,, A. K. M !amsul Alam 4)airman
*. Al%Ha,, Md. Ano0ar Hossain 4)airman
5. Al%Ha,, Hafe@ Md. Enayetulla) 4)airman
&. Al%Ha,, Md. An0ar Hossain 4)airman
+. Dr. Ba)auddin Mo)ammad 7ousuf 4)airman
'. A.K.M. !)amsul Alam 4)airman
(. Al%Ha,, Hafe@ Md. Enayetulla) 4)airman
2a(le* 6-6 "ist o 0hairmen
.)e mana-ement /ody of AIB8 is c)an-ed after four year 0it) dra0in- a annual
meetin-. Once t)e mana-ement /ody is c)an-ed t)e ne0 /ody )as taken t)e ne0 steps to
improe t)e /ankin- system. But t)e main intention of t)is /ody is to meet up t)e ision
of t)e /ank to continue t)e mission and o/,ecties. F)en t)e c)an-ed of mana-ement
team t)e ne0 /ody 0ant to restart t)eir o0n style to maintain t)e /ankin- scenario.
5-6 1eposits*
24
.)e total deposit of t)e /ank 0as .k. &$1('&1*#51>5$ at t)e end of Marc) in *$##1 of
0)ic) -eneral deposit 0as .k. &1?>$1$(?15(>. In t)e year *$$?1 t)e amount 0as .k.
*'1'?+1&&&1#(( and t)e -eneral deposit 0as .k. 51'('15#+1?>$.
5-8 "ia(ilit) +'rchase () the AIB"
Investment
At t)e end of t)e year *$$>1 t)e amount of inestment of t)e /ank 0as .k. #(&*5.#>
million in comparison to .k.##&(&.&# million of t)e year *$$+. .)e amount of
inestment )as increased +>&?.(? million taka 0it)in t)is period1 0)ic) is around
+#.?&L. .)e /ank e2tends inestments to t)e clients under t)e follo0in- modes of
inestment under Islamic !)aria)"
Mura/a)a *. Bai%Mua@@alBai%!alamHire 5.Purc)ase &.!)erkatul MelkMudara/a
+.Mus)araka '.Juard (.!pecial Inestment ?. Bai Istisna >. Mura/a)a Post
import.
M'ra(aha
Mura/a)a mode of finance means purc)ase of commodities as per re6uest of t)e client
permissi/le /y !)aria) and sale t)ereof 0it) profit to t)e client i.e. cost plus sale of a
commodity to t)e inestment client. .)e commodity is procured at t)e instance of t)e
inestment client from a t)ird partyI firm. Purc)ase price and profit are disclosed to t)e
client. Boods are kept under /ankAs custody as security and t)e client lifts t)e same
-radually or at a time on payment of sale price of t)e commodity.
Bai!M'aAAal
30
Bai% Mua@@el means cost plus sale of t)e commodity on deferred payment /asis a-ainst
ade6uate collateral. .)e commodity is procured at t)e instance of t)e inestment client
from a t)ird party as pert firm a-reement /et0een t)e client and t)e /ank sale price
9/ankAs dues: is paid /y t)e client 0it)in stipulated period of time. After )ain-
possession of t)e -oods1 t)e /ank deliers t)e same to t)e client on credit 0)ic) is
re6uired to /e paid at a specified future date 9ad,ust proportionately: 0it) t)e pro-ress of
sale of -oods 0it)in t)e -ien period.
Bi! &alam $Advance &ale%
Under t)is mode1 t)e /ank /uys t)e -oods from t)e producerIsupplier on payment in
adance after ensurin- a firm contract and t)e -oods are delieredI supplied to t)e /ank
at a future specified date. In t)e contract of Bai O!alam 6uantity1 6uality1 s)ape1 si@e1
price1 and time of deliery of t)e -oods are clearly specified.
.ire p'rchase &herkat'l Melk
Dura/le items1 like e)icle1 mac)inery1 e6uipment1 etc are purc)ased on e6uity
participation /y /ot) t)e /ank and t)e client and t)e same is )anded oer to t)e
inestment client or rental /asis enterin- in to an a-reement 0it) t)e client t)at principal
amount s)all /e paid 0it)in a certain period of time /y installments. =ent is to /e pad on
t)e principal outstandin- till t)e o0ners)ip is transferred to t)e client on payment of t)e
entire principle amount.
Al! Araah Islami Bank "imited oers ollo,ing categories o .+&M*
Entire capital is proided /y t)e /ank a-ainst firm assurance of t)e entrepreneur t)at )e
0ill mana-e t)e /usiness properly and efficiently. .)e entrepreneur mana-es t)e /usiness
as mana-er. Profit is s)ared to t)e /ank and entrepreneur as per a-reed ration 0)ile t)e
31
loss1 if any1 is /orne /y t)e /ank alone. Bank can superise suc) inestment if and 0)en
desiredI re6uired /ut cannot participate in t)e mana-ement of t)e /usiness.
Industrial
4ommercial
.ransport
DDI!
!!BI
HP!M =eal !tate
!taff House Buildin- Inestment
HP!M 4ar 9For e2ecutie only:
M'sharaka
4apital is proided /y /ot) /ank and inestment client on t)e /asis of !)irkatul Innan
principle of Islamic !)aria) Partners)ip. Profit is s)ared as per a-reed ratio and e6uity
ratio. .)e /ank superises t)e utili@ation of inestment and participates in decision
makin-.
B'ard
.)e /ank also allo0s 6uard in ery special cases on o/tainin- proper security. !erice
c)ar-e e6ual to cost of fund is recoered on Juard amount.
5-9 Oice A'tomation
Bankin- operations of t)e /ranc)es )ae /een computeri@ed minimi@e cost and risks and
to optimi@e /enefits and increase oerall efficiency for improed serices. .)e /ank is
capa/le of -eneratin- t)e releant financial statement at t)e end of t)e day. .)e /ank )as
recently installed =euters !creen for smoot) operation of forei-n currency dealin-s. .)e
32
/ank )as also )osted a 0e/ pa-e of its o0n to take a place in t)e Forld Fide Fe/. .)e
/ank is -oin- to introduce credit card soon.
5-: .'man Reso'rce 1epartment
In todayAs competitie /usiness enironment only t)e 6uality of )uman resources makes
t)e difference. .)e /ankAs commitment to attract t)e /est persons to 0ork for it and t)0
adoption of t)e latest information tec)nolo-ies is reflected in t)e efforts of t)e /ank in t)e
deelopment of its )uman resources. In t)e faces of todays -lo/al competition /ank
enisa-es to deelop )i-)ly motiated 0orkforce and to e6uip t)em 0it) latest skills and
tec)nolo-ies. A -ood 0orkin- enironment promotes a )i-) leel of loyalty and
commitment1 deotion and dedication on t)e part of t)e employees.
Al% Arafa) islami Bank )as a trainin- centre to deelop its employees. Al%Arafa) Islami
Bank sends num/er of officers to Ban-lades) institute of /ank mana-ement and ot)er
trainin-s institutes for speciali@ed trainin- on arious aspects of /ankin-. .)e /ank )as
set up a trainin- institute for proidin- trainin- facilities of its e2ecutie officers. .)e
trainin- institute )as already conducted a num/er of courses. A num/er of officers )ae
/een sent for forei-n trainin-. Al O Arafa) Islami Bank /eliees in professional
e2cellence and considers its 0orkin- force as its most alua/le assets and t)e /asis of its
efficiency and stren-t).
33
5-; 0orporate &ocial Responsi(ilities
Al!Araah Islami Bank Fo'ndation
.)e Bank )as a Foundation launc)in- p)ilant)ropic actiities. Al%Arafa) En-lis)
Medium Madrasa) and Al%Arafa) Islami Bank 8i/rary are ma,or t0o 0in-s for launc)in-
p)ilant)ropic actiities.
Al!Araah English Medi'm Madrasah
Al%Arafa) En-lis) Medium Madrasa) )as /een esta/lis)ed /y t)e Al%Arafa) Bank
Foundation 0it) a ie0 to /uildin- ne2t -eneration accordin- to t)e ideals of peace and
e6uality of Islam and to esta/lis)in- /ankin- and ot)er aspects of life in t)e 0ay of Islam.
.)e prime aim of t)is madrasa) is to contri/ute to0ards /uildin- )uman resource and in
t)e /roader sense to ensure )uman 0elfare. Fit) t)e ie0 Al%Arafa) Islami Bank
Foundation )as esta/lis)ed an En-lis) medium madrasa) at D)anmondi in #>>>. !uc)
institution upto O leel of its kind is for t)e first time in Ban-lades).
Al!Araah Islami Bank "i(rar)
8i/rary is t)e carrier & reseroir of kno0led-e. Al%Arafa) Islami Bank )as s)o0n t)at
ot)er t)an -eneratin- profit1 it can also contri/ute si-nificantly in t)e field of proidin-
-ood source of kno0led-e /y esta/lis)in- a pu/lic li/rary at 5*1 .opk)ana =oad1
4)itta-on- B)a/an 9#st floor:1 D)aka1 t)us stren-t)enin- social deelopment. It is
situated in a sound1 )ealt)y surroundin-s. It )ar/ors *51$$$ /ooks of reference for t)e
researc)ers1 students1 professionals1 /ankers1 p)ysicians1 en-ineers1 politicians1 0riters or
34
,ournalists1 een for t)e kids. It is open to all from t)e year *$$$ and 0ell located &
accessi/le to eery/ody. It procured some e2ceptional collection of /ooks on reli-ion1
economics1 /ankin-1 computer science1 /usiness administration1 sociolo-y1 En-lis) &
Ara/ic lan-ua-e and ,uenile literature in Ban-la1 En-lis)1 Urdu & Ara/ic1 0)ic) are
ery rare.
0hapter!6
General Banking Activities
32
Bank is not)in- /ut an intermediary /et0een lender 9surplus unit: and /orro0er 9deficit
unit:. !ain-s and deposits are t)e main stren-tr) of t)e /anks to proide loan. And t)e
interest earned from t)e difference /orro0in- and lendin- is t)e ma,or portion of /anks
income. Banks also earns from ariety of operation. Branc) /ankin- includes four
operational diisions in Al%Arafa) Islami Bank 8imited.
Beneral /ankin- is t)e front side /ankin- serice department. It proides t)ose customers
0)o come fre6uently and t)ose customers 0)o come one time in /ankin- for en,oyin-
ancillary serices. In some -eneral /ankin- actiities1 t)ese are no relation /et0een
/anker and customers 0it) 0)o /ank are doin- its /usiness fre6uently. Al%Arafa) Islami
Bank 8imitedAs -eneral /ankin- is diided into fie sectors. .)ese are"
Account openin- !ection
Bills and clearin- section
=emittance section
Deposit section
4as) section
Initially all t)e accounts are opened t)rou-) deposit money /y t)e customer and t)ese
accounts are called deposit account. Eormally a person needs to open an account to take
serices from t)e /ank. Fit)out openin- an account1 one cannot en,oy ariety of serices
from t)e /ank. .)us1 t)e /ankin- usually /e-ins t)rou-) t)e openin- of t)e account 0it)
t)e /ank.
6-4 2ransaction
.ransaction is a financial eent1 0)ic) c)an-es t)e financial position of a company.
.)ere are t)ree types of transaction t)at is performed /y t)e Al%rafa) Islami Bank
8imited.
36
4as) transaction
.ransferrin- transaction
4learin- transaction
6-5-4 0ash transaction
4as) department is a sensitie and important place of /ank. 4as) receiin- and cas)
payment is t)e first and important duty. A /ank s)ould mem/er t)at t)e ima-e of a /ank
is dependent on cas) officer of t)e /ank. If t)e cas) officer is not smart1 outstandin- and
)andsome person1 t)en it is meant t)is does not care for its customers.
6-5-4-4 0ash receipt
=eceiin- cas) officer s)ould dra0 )is attention to aoid from t)ese types of notes 0)en
)e Is)e taken money from t)e customers.
Mutilated note
Mismatc)ed note
For-ed note
Incorrect note
Burn note
6-5-4-5 0ash pa)ment
.)e officer s)ould enou-) care 0)en )eIs)e makes payment of a c)e6ue. !ome of t)e
important c)eckpoints are -ien /elo0"
Amount of t)e c)e6ue
F)o is t)e dra0 of t)e c)e6ue
37
Merifyin- t)e si-nature
Posted and cas) paid sale on t)e c)e6ue
Eame of t)e /ranc)
Is it a fraud c)e6ueP
After payment1 t)e c)e6ue t)e officer s)ould maintainInoted account num/er1 name of t)e
dra01 and 0it)dra0al amount in a re-ister /ook.
6-5-5 0learing 2ransaction
4learin- transaction is of t0o types one is clearin- anot)er is out0ard clearin-.
6-5-5-4 In,ard clearing
F)en any client of any /ank -ies c)e6ue to t)e creditors1 t)e creditor -enerally -ies
deposit to t)eir respectie /ank account for collection. .)en t)e /anks 0ill send t)ose
c)e6ues to Ban-lades) /ank. .)e Ban-lades) /ank t)en sends t)is types of c)e6ues to
/t)eir respectie /ank main /ranc) t)is type of transaction is called in0ard clearin-.
6-5-5-5 O't,ard clearing
F)en t)e /ank -ets different types of c)e6ues of different /anks from t)eir client for
collection1 t)ey t)en send c)e6ues to t)eir main /ranc). .)e main /ranc) t)en sends
t)ose c)e6ues to /an-lads) Bank. .)e Ban-lades) Bank sends t)ose to t)e respectie
/anks.
6-5-6 2ranserring 2ransaction
33
.ransferrin- .ransaction is t)e type of transaction in 0)ic) money is not p)ysically
moed. But it is moed from one account to anot)er t)rou-) de/it and credit ouc)er.
6-6 Opening Acco'nt
.)e money deposited 0it) t)e /anker is not )eld /y )im in trust /ut as )is de/ts to t)e
depositors and t)e relations)ip t)at e2ists /et0een t)e /anker and t)e depositor is strictly
t)at of de/tor and creditor. .)e /anker /ecomes t)e o0ner of t)e money and is free to
utili@e t)e same in any 0ay )e c)ooses an is /ound at t)e place 0)ere t)e deposits are
maintained to make repayment t)ereof /y an e6ual amount on demand1 at notice or at t)e
end of t)e specified period 0it) or 0it)out interest dependin- on t)e nature of t)e
deposits.
.)e deposits are accepted /y t)e /anker t)rou-) current and sain-s accounts1 0)ic) is
0it)dra0 a/le /y c)e6ues. .)e depositors are repaya/le on demander ot)er0ise and
0it)dra0 a/le /y c)e6ues1 draft1 and order of ot)er0ise.
Al OArafa) Islami Bank 8imited keeps t)e deposits on t)e form of different account. 8ike
Al% Fadia) current Deposit
Mudara/a !ain- Deposit
!)ort Eotice Deposit
Mudara/a .erms Deposit =eceipt
Mudara/a Inestment .erms Deposit
Mudara/a Fi2ed Deposit =eceipts
Mudara/a Profit Paya/le .erms Deposits
Mudara/a Mont)ly Ha,, Deposit
Mudara/a .erms Ha,, Deposit
Mudara/a Dou/le !c)eme
Mudara/a Notipoti !c)eme.
34
6-6-4 =ho can open an acco'ntC
.)ese a/oe accounts may /e open /y%%%
Indiidual
Partners)ip
4lu/1 !ocieties1 .rusts etc
3oint enture
Proprietors)ip
Priate 8imited 4ompany
Pu/lic 8imited 4ompany
6-6-5 3ecessar) doc'ments to open an acco'nt
F)en a customerI or-ani@ationI companyI firmI societyI clu/I etc. 0ant to open /ank
account )eI s)e )ae to filled a /ank prescri/ed form and )ae to attac)ed t)eir
or-ani@ationAs documents are as follo0s.
+roprietorship
.rade 8icense
P)oto-rap)
.e2 certificate 9not mandatory:
Birt) 4ertificate
Or-ani@ationAs seal1 etc
+artnership
.rade 8icense
P)oto-rap)
Partners)ip Deed
.e2 certificate
Or-ani@ationA seal1 etc
40
+rivate "imited 0ompan)
.rade 8icense
P)oto-rap) of Directors
4ertificate copy of Memorandum and Articles of Association
4ertificate of Incorporation
8ist of Directors as per return of ,oint stock company 0it) si-nature
=esolution for openin- account 0it) t)e /ank
!i-nature and seal. etc
After o/seration of all t)e formalitiesI documents mentioned a/oe1 t)e applicant is
re6uired to deposit minimum .k for openin- a sain-s account and .k for openin- a
current account. .)is is called initial deposit. As soon as t)is money is deposited1 t)e
/ank opens an account in t)e name of t)e applicant. It s)ould /e noted t)at t)e
permission of t)e component aut)ority for openin- of an account is a must. .)e /anker
t)en supplies t)e follo0in- /ooks to t)e customer to operate t)e accounts.
Deposit /ook
A c)e6ue /ook
6-8 Remittance o F'nd &ection
=emittance of fund is ancillary serices of AIB8 like ot)er commercial Banks. It aids to
remit fund from one place to anot)er place on /e)alf of its customers as 0ell as non%
41
customer of /ank. AIB8 )as its /ranc)es in t)e ma,or cities of t)e country and t)erefore1
its serice one of t)e /est mediums for remittance of funds from one place to anot)er.
.)e main instruments used /y AIB8 principle /ranc) for remittance of funds.
Pay order
Demand Draft
.ele-rap)ic .ransfer
6-8-4 1emand 1rat*
A /ank draft is an unconditional order issued /y one /ranc) of a /ank on its /ranc) to pay
a certain sum of money to t)e named person or order on demand. Hence1 a /ank draft is
al0ays paya/le on demand it is also kno0n as demand draft.
Essential eat're o 1emand 1rat*
It is dra0n /y one office of a /ank upon some ot)er office of t)e same /ank.
It is paya/le on demand.
Its payment is to /e made to t)e person 0)ose name is mentioned or accordin- to
)is order.
In ot)er 0ords1 it cannot /e made paya/le to t)e /earer.
6-8-4-4 Iss'es o 1emand 1rat
.)e person intendin- to remit t)e funds t)ou-) a /ank draft )as to deposit t)e money to
/e remitted to-et)er 0it) t)e commission1 0)ic) t)e /anker c)ar-es of its serices. .)e
amount of commission depends on t)e account to /e remitted. On receipt of t)e re6uired
amounts alon- 0it) due filled in prescri/ed form1 t)e /anker issues a draft and )and oer
it to t)e purc)aser.
42
6-8-4-5 +a)ment o 1emand 1rat
If t)e draft is not crossed1 t)e payee can dra0 t)e amount in cas) upon presentation of t)e
same to t)e dra0 /ranc) 0it) satisfactory eidence of )is identify or can dra0 t)e money
/y depositin- to )is account t)ere of any ot)er /ank. .)e draft /ein- paya/le to certain
particular person or order t)e /anker must satisfy )imself as to t)e title of t)e person
presentin- it for receiin- t)e payment. .)e /anker is disc)ar-ed from lia/ility only
payment in due course.
6-8-4-6 1ishonor o 1emand 1rat
Eormally a /ank cannot refuse to make t)e payment of a draft1 as it is )is o0n o/li-ation
to pay unless t)e presented draft is a for-ed one or t)ere is dou/le as to t)e identity of t)e
person presentin- it for payment. He cannot also refuse to make t)e payment of a draft of
t)e plea of non%receipt of t)e relatie adice from t)e issuin- office.
6-8-4-8 "oss o 1rat
If t)e issuin- /ranc)es reported a/out loss1 t)eft or dama-es of any draft it must promptly
inform t)e matter to t)e dra0ee /ranc) and re6uest to stop payment order suc) draft.
Bein- reported /y t)e issuin- /ranc)1 t)e dra0ee /ranc) 0ill note it to -uard it sell
a-ainst t)e fundament encasement of t)e lost draft. .)is is essential so t)at t)e /anker is
not )eld responsi/le for makin- payment ot)er0ise t)an in due course.
6-8-5 2elegraphic 2ranser
.ele-rap)ic transfer1 it may /ranc) telep)one or tele2. .ransfer means fundI money
transfer from one /ranc) to anot)er /ranc) not in same area. !ometimes t)e remitter of
43
t)e funds re6uires t)e money to /e aaila/le to t)e payee immediately. In t)at case1 t)e
/anker is
re6uested /y )im to remit t)e funds tele-rap)ically. .)e /ank passes .... /y a secret
code1 0)ic) input /y t)e BB in c)ar-e and /ranc) Mana-er. But at present ... is /ein-
isolated /ecause of online /ankin- system of AIB8. .)e online /ankin- system reduces
t)e demand of .ele-rap)ic .ransfer. In D)aka diision t)e online fee is #$$L free /ut
outside t)e D)aka t)e rate is free up to #.$$ lac taka.

2he charges o 2-2
4ommission #L /ut not less t)an .k. #$
.ele2 .k. 5$9fi2ed:
!undry Mat .k.#$
6-8-5-5 Mail 2ranser Advice
F)ere t)e remitter desires t)e /anker to remit t)e funds to t)e payee instead of
purc)asin- a draft )imself1 t)e /anker does it t)rou-) a Mail .ransfer Adice. .)e payee
must )ae an account 0it) t)e payin- office as t)e amount remitted in suc) a manner1 is
meant for credit to t)e payeeAs account and not for cas) payment.
2he charges o M-2-A*
4ommission #L /ut not less t)an .k. #$
44
Mailin- 4ost .k. 5$ 9fi2ed:
6-8-6 +a) Order
Unlike an M. or .. t)e /ankerAs payment order is meant for makin- payment of t)e
/ankerAs o0n or of t)e customerAs dues locally and not for affectin- any remittance to an
outstation. In a sense1 t)e payment order is used for makin- a remittance to t)e local
creditor.
.)e post are in t)e form of receipts1 0)ic) are re6uired to /e disc)ar-ed /y t)e
/eneficiaries1 0)ere applica/le on reenue stamps of appropriate alue1 a-ainst payment
in cas) or t)rou-) an account. .)e PO is not a ne-otia/le instrument and cannot /e
endorsed or crossed like a /ankerAs draft.
6-8-8 0he?'e
A c)e6ue is a 0ritten order to t)e /ank -ien /y an account )older to pay money from )is
account. A c)e6ue is usually on t)e printed form supplied /y t)e /ank to t)eir account
)older.
+arties to a che?'e*
1ra,er* A person 0)o orders t)e /ank to pay money from )is account.
1ra,ee* A person 0)ic) pays t)e account of t)e c)e6ue.
+a)ee* A person 0)o receies )is amount of t)e c)e6ue.
42
6-8-8-4 =hen Banker makes pa)ment o a 0he?'e
#. .)e c)e6ue s)ould /e 0ritten in t)e /ankAs supplied printed c)e6ue form.
*. .)e c)e6ue s)ould /e presented for payment only to t)e /ranc) of )is /ank on 0)ic) it
dra0
5. .)e c)e6ue s)ould /e su/mitted 0it) a date.
&. t)e amount in 0ords and fi-ure must /e same.
+. .)e account )older si-ns t)e sc)eme.
'. .)ere s)ould /e sufficient /alanceI funds in t)e account of )is customer to meet t)e
c)e6ue.
6-8-8-5 =hen (anker ma) re'se pa)ment o a che?'e
F)et)er t)e c)e6ue is post dated.
F)et)er t)e c)e6ue is out of dated.
F)et)er t)e fund is insufficient.
F)et)er dra0er does not si-n t)e c)e6ue.
On receipt of customers stop payment instruction.
On receipt of a notice of a customerAs deat).
On receipt of a notice of customerAs insanity.
6-8-8-6 Ans,er generall) given in case o dishonored che?'e
=efer to dra0erH
Eot arran-e forH
E2ceeds arran-edH
Endorsement irre-ularH
46
Dra0er deceasedH
Fords and fi-ure differsH
Dra0erAs si-nature differsH
Payment stop /y t)e dra0erH
4)e6ue is mutilatedH
4)e6ue is out of dateI post dated re6uires realiationH
4rossed c)e6ue please present t)rou-) a /ank.
6-8-8-8 +'nishment o Bo'ncing o che?'e
If t)e dra0er is found -uilty of a criminal offence under section #5? )e 0ould /e
punis)ed 0it) a imprisonment of one year of a fine to t)e e2tent of t0ice t)e amount of
t)e c)e6ue dis)onor or /ot).
A clearin- )ouse is suc) a type of )ouse 0)ere all mem/ers /ank settled t)eir inter/ank
transactions t)rou-) t)eir Ban-lades) account. As t)e central /ank1 Ban-lades) Bank is
t)e leader of clearin- )ouse in Ban-lades). .)ere are +5 mem/ers /ank in Ban-lades) u
8-8-9 Acco'nt 1ivision
Account department is a department 0it) 0)ic) cas) and eery department is related. It
records t)e profit and loss account and statement of assets and lia/ilities /y applyin-
CBolden =ulesD of /ook keepin- i.e. BAAP. .)e functions of it are t)eoretical /ased.
AIB8 principle Branc) records its accounts daily1 0eekly1 and mont)ly eery records.
8-8-9-4 General Acco'nt
47
.)e account t)at is to /e maintained 0it) HIO of AIB8 for t)e purpose of settlement of
inter%/ranc) transactions. Benerally AI4 is an important one 0)ic) )as to /e maintained
/y eac) /ranc) of AIB8. Indeed Beneral AI4 is a record of ori-inatin- and respondin-
transactions amon- inter%/ranc)es of t)e same /ank. All types of assets and lia/ilities of
one /ranc) 0it) anot)er one are settled t)rou-) t)is account.
8-8-9-5 Extract
E2tract is a statement of all ori-inatin- and respondin- transactions amon- inter%
/ranc)es de/it and credit adice. At t)e end of t)e day1 all t)e de/it and credit adices of
different department come to account department. It makes e2tract in li-)t of all adices.
8-8-9-6 1e(it >o'cher
For makin- cas) payment like entertainment1 coneyance1 and account department 0rites
a de/it ouc)er. Amount is 0it)dra0n t)rou-) cas) section /y presentin- de/it ouc)er.
0hapter! 8
Investment mode o AIB"
43
One of t)e core functions of commercial /anks is to create t)e claim a-ainst indiidual
/orro0er or real t)e purpose of sanctionin- credit /ank -rants loan in t)e form of
different securities. By t)e primary security 0e mean t)e financial claim of )older a-ainst
t)e real sector of economy. In /ankin- t)e sector t)e financial claim of /ank a-ainst
issuer called inestors1 /orro0ers1 and difficult units. .)is core function of a /ank is
performed /y t)e credit department of t)e /ank. In t)is case t)e relations)ip of /ank and
customers is t)at of t)e creditors and de/tor.
.ypes of loan and adances offered /y AIB8"
!ecured Oerdraft 9!OD:
8oan 9Beneral:
House Buildin- 8oan 9!taff:
Demand 8oan
.ransport 8oan
Industrial 8oan
House Buildin- 8oan 9Beneral:
.ransport 8oan 9staff:
4as) 4redit 9Hypot)ecation:
Past Due Bills
8oan A-ainst .rust =eceipt 98.=:
8-4 Accept +roposal
Before su/mit a proposal t)e customer s)ould run a current account for minimum 5
mont)s and ma2imum ' mont)s to satisfy t)e /ank t)at )is flo0 of money transaction is
44
le-al. After runnin- t)e current account1 )e can su/mit t)e proposal for loan to t)e
mana-er. .)e proposal also includes t)e documents of )is mort-a-e property.
8-5 >eri)ing 0'stomers
Mana-er 0ill -ie t)e documents of Mort-a-e properties1 .rade license etc to t)e
inestment officer t)en erify t)e documents. Mana-er1 Assistant Mana-er1 Inestment
Officer 0ill isit customerAs property to make a alue of mort-a-e property.
Mana-er also -ies t)e documents of property to t)e adocate for le-al adice and t)e
aluation of t)e property. Adocate 0ill erify t)e documents of mort-a-e property. In
addition1 adocate -ies a le-al opinion of t)e property. .)en mana-er1 Assistant
Mana-er1 Inestment Officer 0ill ad,ust t)e opinion of adocates 0it) t)eir o0n opinion
a/out t)e alue of mort-a-e property. 4ustomers -et loan a/out +$L of t)e mort-a-e
property. .)e /ank takes #'L profit from t)is loan.
8-6 "ease Finance
AIB8 offered 8ease finance facilities to its alued clients 0it) a ie0 to facilitate clients
to ac6uire e6uipments and mac)ineries 0it)out inestin- any fund in spite of playin-
fi2ed lease rentals. Fi2ed fe0er rentals can /e tailored /ot) in terms of amount and timin-
to t)e profit and cas) flo0 position of t)e lease )older. At t)e end of t)e lease contract t)e
lease assets /ack to t)e clients 0it) a nominal and depreciated alue.
8-8 Facilities o "ease
Free t)e capital tied in capital e2penditureH
20
8easin- allo0s utili@in- t)e capital else0)ere to -eneral )i-)er profits it also
reduce cas) out flo0H
.)e e6uipment t)at leased does not appear on clients /alance s)eets1 clients
financial ratios improeH
.o aoid /ud-etary constraints in capital e2penditureH
8ease rentals are treated as reenue e2penditure and are entirely deduct a/le for
ta2 purpose. .)is proides a -reater ta2 /enefit in comparison to /orro0in-.
8-9 Items o "easing
Any cate-ory of e6uipment and Mac)ineryH
Office automation e6uipmentsH
Medical .reatment dia-nosisH
Me)icles for transportation etc.
8-: Restricted B'siness
Production1 Marketin-1 .radin- of alco)olic1 narcotic and ot)er into2icatin- dru-
of li6uorH
Production and tradin- of any item /anned /y t)e -oernmentH
Any actiity not permitted /y t)e la0 of t)e land.
8-; "oan 0eiling
For small enterprise" Ma2imum tk. +$1 $$1$$$.$$.
8-D +'rpose
21
Forkin- 4apitalH
4apital Mac)ineryH
Deliery ManI transport for /usiness purposesH
=e%furnis)in- officeI Business premises.
8-E Mode o Finance
4as) 4redit 9HypoI pled-e:H
Hire purc)aseI 8ease FinanceH
.erm 8oan.
8-4< "oan Rene,al
!uccessie loans depend on track record of preious loan. Usually1 repayment /e)aior
and e2pansion of /usiness /y t)e /orro0er are t)e main consideration rene0al and
en)ancement of t)e loan amount.
8-44 +roit Rate $interest%
Ban-lades) Bank declares t)e interest rate 0ill /e >L or a/oe to place any loan /y t)e
commercial /anks. Eo0 AIB8 offers t)e /ank rate is #'L to sanction any loan /ut t)e
rate differs from Inestment to inestment. And t)e rate may ups and do0n 0it) t)e
/anker customers relations)ip and sanctioned limit.
8-45 +enal Interest
22
If any /orro0er fails to ad,ust loan 0it)in alidity period or to repay consecutie $*
9t0o: installments penal interest $.*+L per mont) s)all /e c)ar-ed on t)e defaulted
amount.
8-46 &ec'rities
It is superisory credit sc)eme. .an-i/le security in t)e form of mort-a-e may not /e
aaila/le in all t)e cases. !o mort-a-e 0ill not /e mandatory. !ecurity 0ill /e stipulated
on a case to /asic as under 9one or seeral of t)e follo0in-:"
=e-istered mort-a-e of land and /uildin-H
Mort-a-eI assi-nment of possession ri-)tH
Assi-nment of security money adance rent if anyH
Assi-nment of .rade =eceia/le not older t)an >$ daysH
Hypot)ecation of mac)inery1 e6uipment1 e)icles1 stock%in%trade1 ra0 materials1
0ork%in%pro-ress and finis)ed -oodsH
Personal Buarantee from persons accepta/le to t)e /ankH
Post dated c)e6uesH
8ien on depositsI sain- certificatesI financial o/li-ationsH
Any ot)er securities to /e demand suita/le /y t)e /ank dependin- on t)e situation
like Insurance Buarantee1 4orporate Buarantee1 Assi-nment of 4ontract1 !ecurity
Money etc.
8-48 period o "oan
In case of continuous 8oan" One 9#: year.
In case of .erm 8oan" Ma2imum Fie 9+: years.
If t)e repayment sc)edule e2ists t)e period of loan is t0o types. #. !)ort term &
*. 8on- term.
&hort 2erm* if t)e repayment sc)edule e2ists t)e duration of s)ort term loan is /et0een
$ to + years.
23
"ong 2erm* if t)e repayment sc)edule e2ists t)e duration of lon- term loan is more t)an
+ years.
8-49 Mode o Investment
In case of continuous loan credit turnoer in t)e account must /e e6ual to t)e limit
in a 6uarter and full ad,ustment 0it)in t)e alidity periodH
In case of term loan1 t)e loan s)ould /e repaid /y mont)ly installments t)rou-)
post%date c)e6ues as per amorti@ationH
8-4: Ind'str)F &ector ,ise Investment
$2ho'sand in Amo'nt%
IndustryI !ector
0ise
*$$( *$$? *$$> *$#$
A-riculture1
Fis)in- and
Forestry
#(1#*&1#'>.$$ **15+'1?>+.$$ *?1'+51+>?.$$ 5*1&+$1$*+.$$
Industry #.$&>.>#>1&?>.$$ 51*5?1&+'1*5?.$$ #1'>$1(#?1(*$.$$ 51(?>1(#?1&?+.$$
4onstruction #1$+>1&((1*&(.$$ #1(#$1+'>1+*?.$$ #1$+>15>+15+5.$$ #1?>$15>+1#+*.$$
Fater 0orks
!erices
% % % %
.ransport &
4ommunication
#&>1#'(1'+'.$$ +*51'*+1'5>.$$ ??(1*5'1&*$.$$ #1$$$1*&+1?+$.$$
!tora-e ++1+?+1(&(.$$ #$*1'?'1+*5.$$ >&+1>'>1?*'.$$ >?>1>$$1?+?.$$
.rade Finance ?1'#*1>$*1(5?.$$ ##1*'*1>5?1$>>$.$$ #(1'**15?>1>$$.$$ #?1*5*1&+$1&+$1*$$.$$
24
Miscellaneous +5$1*5&1>?+.$$ +'*1++'1?&?.$$ '(*1$$&1##&.$$ ?(&1#&*1**#.$$
.otal 44,8;8,845,<64-< 4;,856,4DE,;:4-<< 55,E<:,6:;,E6<-<< 54,584,<5;,6<5,;E4-<<
2a(le!9-4 &ector ,ise Investment 5<<;!5<4<

0hapter!9
2o Eval'ate 2he Foreign Exchange Activities O
AIB"
22
One of t)e lar-est /usinesses carried out /y t)e commercial /ank is forei-n tradin-. .)e
trade amon- arious countries falls for close link /et0een t)e parties dealin- in trade.
.)e situation calls for e2pertise in t)e field of forei-n operations. Forei-n e2c)an-e
department of Al% Arafa) Islami Bank is one of t)e most important departments of all
departments. .)is department )andles arious types of actiities /y t)ree separate
sections"
Import !ection
E2port !ection
Forei-n =emittance !ection
9-4 Import Financing
Import means /rin-in- merc)andise to country from any place rest of t)e 0orld. .0o
t)in-s mainly inole 0it) import of merc)andiseH /rin-in- of commodities p)ysically
into t)e country any makin- payment to0ards t)e cost of t)e merc)andise and serices
connected 0it) its dispatc) to t)e importer.
9-4-4 +roced're or o(taining IR0 $Import Registration 0ertiicate%
.o perform t)e import /usiness re-istration 0it) t)e licensin- aut)ority of t)e area is an
ur-ent t)rou-) pu/lic notice t)e 4)ief 4ontroller of Imports and E2port inites
applications usually for =e-istration of importers. For -ettin- t)is re-istration t)e
follo0in- papersI documents are re6uired for su/mission to 44I&E 94)ief 4ontroller of
Import and E2port: or area office of 44I&E for import re-istration certificate"
Application form.
Eational 4ertificate.
Income .a2 =e-istration 4ertificate.
.rade 8icense from t)e Municipal or t)e 8ocal Aut)ority.
26
Mem/ers)ip 4ertificate.
Partners)ip 4ertificate 9for Partners)ip concern:.
4ertificate of =e-istration 0it) t)e re-ister of 3oint !tock 4ompany.
Memorandum of Association in case of limited 4ompany.
Bank 4ertificate.
O0ners)ip documents or rent receipts of t)e place of /usiness.
Ori-inal 4opy of .reasury 4)allan /ein- payment of re-istration fees.
Ot)er documents prescri/ed in t)e import policy.
9-4-5- 0lassiication o Importer
Importers are t)ose 0)o are aut)ori@ed /y t)e import .rade 4ontrol Aut)ority t)at is
44I&E for import of -oods essential for consumption or for production purposes.
.)ere are mainly t)ree types of importer"
4ommercial Importer
Industrial Importer
Importer under Fa-e Earner !c)eme 9FE!:.
4- 0ommercial Importer*
It means an importer re-istered under t)e importers1 e2porters and indenture re-istration
order #>?# 0)o import -oods for sale.
*. Ind'strial Importers*
F)en issued to an industrial consumer1 -ies t)e items of import as ra0 materials and
packin- materials and spare parts1 t)e alue of entitlement and I.4 classification.
6- Importers 'nder =E&*
27
It means re-istered importers 0)o import only under t)e FE!. FE! importers can /e
importin- all permissi/le items as declared /y t)e import policy and notification. Besides
all re-istered commercial and industrial importer also can import under FE!.
Other Importers are as ollo,s*
8ease Financin- Import.
Boernment !ector Importer.
Importer under Bonded Fare% House !ystem.
Import /y Actual Users.
Import /y E.P.K.
9-4-6 Import FormalitiesF +roced'res
For conductin- 0orld trade documentary credit or letter of credit is an essential
implement. It is important for t)e /eneficiary of a documentary credit to kno0 t)at
payment 0ill /e made only if t)e documents are in a/solute conformity 0it) t)e re6uired
terms and t)at t)e /ank )as to decide on t)e /asis of t)e documents alone. An importer
desires to )ae an import 8I4 limit must )ae apply to t)e desi-nated /ank in prescri/ed
forms for sanction of mar-in1 8I4 limit etc.
9-4-8 1einition o "etter o 0redit
8I4 means 8etter of 4redit or Documentary credit. As per Uniform 4ustoms and Practice
for Documentary 4redits 9U4PD4: meanin- of credit as under"
Article 3o- 5 o 70+10- For purpose of t)ese articles t)e e2pressions CDocumentary
4reditD and C!tand /y letter of 4reditD mean any arran-ement )o0eer named or
descri/ed1 0)ere/y a /ank 9 t)e issuin- /ank: actin- at t)e re6uest and on t)e instructions
of a customer 9 t)e applicant: or on its o0n /e)alf.
23
Is to make a payment to or to t)e order of a t)ird party 9 t)e Beneficiary: or is to
accept and pay /ills of e2c)an-e9Draft: dra0n /y t)e /eneficiaryH or
Aut)ori@es anot)er /ank to effect suc) payment or to accept and pay suc) /ills of
e2c)an-e 9Draft:H or
Aut)ori@es anot)er /ank to ne-otiate1 a-ainst stipulated documents proide t)at
t)e terms and conditions of t)e credit are complied 0it).
Benerally1 a 8etter of 4redit is a conditional Bank undertakin- of payment. In ot)er
0ords 8I4 is a letter from t)e importer Bankers to t)e E2porter t)at t)e /ills if dra0n as
per terms and conditions are complied 0it) 0ill /e )onored on presentation.
9-4-9 0lassiication o "F0
Marious types of 8etter of credits are performed /y t)e AIB8. .)ese are follo0s"
=eoca/le 8I4.
Irreoca/le 8I4.
4onfirmed 8I4.
.ransfera/le 8I4.
Diisi/le 8I4.
Back to Back 8I4.
=eolin- 8I4.
=estricted 8I4.
=ed 4lause 8I4.
Breen 4lause 8I4.
Fit) =esource 8I4.
Fit)out =esource 8I4.
+arties to a "etter o 0redit
24
As per terms and conditions of t)e 8I41 t)e seller is re6uired to /e routed t)rou-) some
intermediary /anks in order to -et )is claim. !o1 0e see t)at t)ere are a num/er of parties
inoled in an 8I4. t)e inoled parties to a 8I4 are as follo0s"
Importer F B')er* !eller 0)o applies for openin- a 8etter of 4redit.
ExporterF &ellerFBeneiciar)* it is t)e /ank on 0)ic) t)e /ill 0ill /e dra0n 9As
per condition of t)e credit:. Usually it is t)e issuin- /ank.
OpeningF Iss'ing Bank* it is t)e /ank 0)ic) opensI issues a 8etter of 4redit on
/e)alf of t)e importer.
AdvisingF 3oti)ing Bank* it is t)e /ank t)rou-) 0)ic) t)e 8etter of 4redit is
adised to e2porters. .)e /ank is actually situated in e2porterAs country. It may
also assume t)e role of confirmin- and or ne-otiatin- /ank dependin- upon t)e
condition of t)e credit.
0onirming Bank $or Add 0onirming "F0%* it is t)e /ank 0)ic) adds its
confirmation to t)e credit and it is done at t)e re6uest of issuin- /ank. 4onfirmin-
/ank may or may not /e adisin- /ank.
ExporterGs Bank i-e- 3egotiating Bank* it is t)e /ank 0)ic) ne-otiates t)e /ill
and pays t)e amount of t)e /eneficiary. .)e adisin- /ank and t)e ne-otiatin-
/ank may or may not /e t)e same. !ometimes it can also /e confirmin- /ank.
Reim('rsing Bank or +a)ing Bank* It is t)e /ank1 0)ic) 0ould reim/urse t)e
ne-otiatin- /ank after -ettin- payment instruction from issuin- t)e /ank.

+roced're or Opening "F0
An importer desires to )ae an import 8I4 limit must )ae apply to t)e desi-nated /ank
in prescri/ed forms for sanction of mar-in1 8I4 limit etc.
For 8etter of 4redit limit follo0in- information are to /e furnis)ed /y t)e applicant"
.)e full Particulars of t)e Bank Account.
.ypes of Business 9Proprietors)ip1 Partners)ip1 8imited 4o.: in case of 8td.
4ompany Balance s)eet of last t)ree years and t)e names of directors.
60
Historical Back-round.
Amount of limit re6uired.
Boods to /e imported.
!ecurity to /e offered.
=e% Payment !c)edule of a source of fund.
Ot)er lia/ilities of t)e customer 0it) t)e /ank.
!tatements of Assets and 8ia/ilities.
Accounts Position.
.rade 8icense and Import =e-istration Eum/er 0it) rene0al date.
.erms of Payment" F)et)er t)e import documents 0ould /e retired a-ainst
payment on receipt or a-ainst acceptance or 0)et)er post import finance is
re6uired in t)e form of MPII 8.= etc.
On receipt of a/oe particulars t)e import section of t)e /ank 0ill prepare credit report of
t)e concerned importer t)e report s)ould /e collected from t)e preious /anker of t)e
party also.
Bank ,ill s'ppl) the ollo,ing paperF doc'mentations (eore opening o the "F0*
8I 4 Application Form.
I4A Form.
IMP Form.
Mura/a)a A-reement.
.)e a/oe papers must /e completed duly filled and si-ned /y t)e party and erified t)e
si-nature.
2he ollo,ing papers are re?'ired to open the "F0 in the AIB"*
Import =e-istration 4ertificate 9it is taken from 44I&E:.
Eational Identification Eum/er.
.a2 Identification Eum/er.
Malue Added .a2
Malid .rade 8icense.
61
=ecent P)oto-rap).
Misitin- 4ard.
Blank Pad.
4)ar-e Documents.
Blank 4)e6ue.
Eo O/,ection 4ertificate from ot)er Bank.
Undertakin- for 4IB.
Bio data for 4IB.
Mem/ers)ip 4ertificate.
If t)e all documents are clear and /anker identifies t)at t)e customer is out of risk free
t)en t)e Banker may open 8I4
Acco'nting +roced're or Opening "F0
.)e follo0in- accountin- system is follo0ed in t)e documentary creditors. .)e re-ister
s)all /e posted immediately on receipt or approal from t)e Mana-er to open a 8I4. t)is
re-ister s)all control t)e num/ers of t)e 8I4.
Entries are to /e passed"
Dr. PartyAs AI4
4r. Mar-in AI4
4r. 4ommission AI4
4r. Printin- & !upplies AI4
4r. !tamp AI4
4r. Mat AI4
9-4-E0'rrenc) >o'chers
1r- Assets as per 4ontra 98I4 FE!: at a ;;;;.;B.4. sellin- rate
62
0r- 8ia/ility as per c contra 98I4 FE!: at a ;;;....B.4. sellin- rate
1r- F.4. Deposit 9FE! fund )eld AI4: at a ;;;;Eormal rate
0r- F.4. Deposit AI4 9FE! 8I4 coer: at a ;;;;Eormal rate
9-4-4<2aka >o'cher
1r- PartyAs AI4 94urrent AI4:
0r- !undry Deposit 9!ecurity Deposit 8I4 FE! AI4:
0r- .ele2 =ecoery AI4 9at t)e 8I4 is transmitted /y tele2 or ca/le:
0r- 4ommission 9As per Ban-lades) Bank 4ircular:
0r- P & . AI4
0r- Mura/a)a Import 8I4 Q B. 4. !ellin-
0r- FE! Find Purc)ase AI4
0r- Profit =eceia/le AI4 FE!
0r- Profit =eceia/le AI4 9mont)ly credited /y daily product /asis:
0r- Inestment Income AI4
"F0 Amendment
Amendment of Irreoca/le 8etter of 4redit is not permissi/le 0it)out t)e ,oint consent of
t)e entire patron inoled in documentary credit operation.
+a)ment and pa)ments 1oc'ments o Import "F0
63
F)en all t)e documents are prepared and t)e importer /ank sends to t)e BeneficiaryAs
/ank1 t)e /eneficiary 0ill s)ip t)e products into t)e !)ip1 Air or .ruck etc. And t)e
/eneficiary 0ill send t)e necessary documents to t)e importerAs /ank.
.)e documents are to /e -ien in to t)e customer"
Forei-n BankAs For0ardin- 8etter
Bill of E2c)an-e
4ertificate of !)ipment
Bill of 8adin-
4ertificate of ori-in
4ommercial Inoice
4lean =eport for Findin-s 94=F:
After -ettin- all documents1 t)e importer /ank makes a file to place t)e custom office to
s)ip out t)e products. .)e Applicant takes t)e follo0in- documents from t)e /anks for
clearin- t)e products from t)e custom"
Bill of E2c)an-e ;;;;;;;;;;;; ;;;# 4opy.
4ommercial Inoice;;;;;;;;;;; ;;;* 4opies
Bill of 8adin- ;;;;;;;;;;;; ;;;;.* 4opies
4ertificate of Ori-in;;;;;;;;;;;;; ;# 4opy
4ertificate of !)ipment;;;;;;;;; ;; ;...# 4opy
4lean =eport for Findin-s;;;;;;;;;; ;;# 4opy
Pro% Forma Inoice;;;;;;;;;;;;;;;.# 4opy
!0ift Ackno0led-ment;;;;;;;;;;;;;.# 4opy
Insurance 4oera-e Form;;;;;;;;;;; ;# 4opy
84AF Duplicate ;;;;;;;;;;;; ;;;.# 4opy
After -ettin- all documents and proide t)e customers1 t)en /anks s)ould )ae to
payment t)e Import Bill 0it)in + days after acceptance t)e documents t)ou-) t)e
importer did not yet pay t)e lia/ility of t)e AIB8 for import.
9-5 Export Financing
64
Ban-lades)i e2port )as a lar-e 6uantity of -oods and serices to forei-n )ouse)olds.
=eadymade te2tile -arments 9/ot) knitted and 0oen:1 ,ute1 3ute made products1 fro@en
!)rimps1 tea are t)e main -oods t)at Ban-lades)i e2porters e2ports to forei-n countries.
Barments sector is t)e lar-est sector t)at e2ports t)e lion s)are of t)e countryAs e2port.
Ban-lades) e2ports most of its readymade -arments products to U.!.A and European
4ommunity 9E4: countries. E2port means our carryin- of anyt)in- from one country to
anot)er for sale 0it) t)e stipulated period for to earn forei-n e2c)an-eH make faora/le
/alance of payment position and sta/ili@e marketa/ility.
9-5-4 =hat is Export "F0C
.)e 8I4 a-ainst 0)ic) t)e -oods and serices are e2ported is called e2port 8I4. .)e
forei-n 8I4s are e2port 8I4s. .)e e2port 8I4 is placed for sellin- t)e -oods from o0ner
to t)e /uyer. It )elps sold out t)e products. Forei-n 8I4 may /e inside or outside t)e
Ban-lades).
9-5-5 Formalities or Export "F0
.)ere are a num/er of formalities 0)ic) an e2porter )as to fulfill /efore and after
s)ipment of -oods. .)ese formalities or procedures are enumerated as follo0s"
9-5-6 O(taining Export Registration 0ertiicate*
Eo E2porter is allo0ed to e2port any commodity permissi/le for e2port from
Ban-lades) unless )e is re-istered 0it) 4)ief 4ontroller of Imports and E2ports
944I&E: and )olds alid E2port =e-istration 4ertificate 9E=4:.
9-5-8 &ec'ring the Order
62
After -ettin- E=41 t)e E2porter may proceed to secure t)e e2port order. He can do t)is
/y contractin- t)e /uyers directly t)rou-) correspondence.
9-5-9 O(taining EH+*
After )ain- t)e re-istration1 t)e E2porter applies to AIB8 0it) t)e .rade 8icense1 E=4
and t)e 4ertificate from t)e concerned Boernment Or-ani@ation to -et ERP. If t)e /ank
is satisfied1 an ERP is issued to t)e E2porter.
9-5-: &igning o the 0ontract
After communicatin- 0it) /uyer t)e e2porter )as to -et contracted for e2porta/le items
from Ban-lades) detailin- commodity1 6uantity1 price1 s)ipment1 insurance and mark1
inspection1 ar/itration etc.
9-5-; Receiving the "etter o 0redit
After -ettin- contract for sale1 e2porter s)ould ask t)e /uyer for 8etter of 4redit clearly
statin- terms and conditions of e2port and payment.
9-5-D +roc'ring Materials
After makin- t)e deal and on )ain- t)e 8I4 opened in )is faor1 t)e ne2t step for t)e
e2porter is to set a/out t)e task of procurin- or manufacturin- t)e contracted
merc)andise.
9-5-E Endorsement on EH+
66
Before t)e e2porter 0it) t)e customs or postal aut)orities lod-es t)e e2port forms1 t)ey
s)ould -et all t)e copies endorsed /y AIB8. Before s)ipment E2porter su/mits t)e ERP
form 0it) commercial inoice. .)en AIB8 officer c)ecks it properly1 if satisfied1 certifies
t)e ERP. Fit)out it e2porter cannot make s)ipment. .)e customer must declare all e2port
-oods on t)e ERP issued /y t)e aut)ori@ed dealers.
9-5-4< &hipment o goods
E2porter makes a s)ipment accordin- to t)e terms and conditions of 8I4.
+resentation o export doc'ments or negotiation* After s)ipment1 e2porter su/mits
t)e follo0in- documents to t)e AIB8 for ne-otiation.
Bill of E2c)an-e or Draft
Bill of 8adin-
4ommercial Inoice
Insurance PolicyI 4ertificate
4ertificate of Ori-in
Inspection 4ertificate
4onsular Inoice
Packin- 8ist
Juality 4ontrol 4ertificate
P)oto.
Examination o 1oc'ment
Banks deal 0it) documents only not 0it) commodity. As t)e ne-otiatin- /ank is -iin-
t)e alue /efore repatriation of t)e e2port proceeds It is adisa/le to scrutini@e and
e2amine eac) and eery document 0it) -reat care 0)et)er any discrepancy 9s: is
o/sered in t)e documents.
3egotiation o the Export 1oc'ments
67
Ee-otiation stands for payment of alue to t)e e2porter a-ainst t)e documents stipulated
in t)e 8I4. if documents are in order1 AIB8 purc)ases 9ne-otiates: t)e same on t)e /asis
of /anker O customer relations)ip. .)is is kno0n as Forei-n Documentary Bill Purc)ase
9FDBP:. If t)e /ank is not satisfied 0it) t)e documents su/mitted to t)e AIB8 -ies t)e
e2porter reasona/le time to remoe t)e discrepancies or sends t)e documents to 8I4
openin- /ank for collection. .)is is kno0n as Forei-n Documentary Bill for 4ollection
9FDB4:.
&ettlement o "ocal Bills
.)e settlement of local /ills is done in t)e follo0in- 0ays"%
.)e customer su/mits t)e 8I4 to AIB8 alon- 0it) t)e documents to ne-otiate.
!B8 official scrutini@es t)e documents to ensure t)e conformity 0it) t)e terms
and conditions.
.)e documents are t)en for0arded to t)e 8I4 openin- /ank.
.)e 8I4 issuin- /anks -ie t)e acceptance and for0ard an acceptance letter.
Payment is -ien to t)e customer on eit)er /y collection /asis or /y purc)asin-
t)e documents.
Mode o +a)ment o Export Bill 'nder "F0
As per U4P'$$1 *$$( reision t)ere are four types of credit. .)ese are as follo0s"
!i-)t payment
Deferred payment
By acceptance
Ee-otiation
a- &ight +a)ment 0redit*
63
In a si-)t payment credit1 t)e /ank pays t)e stipulated sum immediately a-ainst t)e
e2porterAs presentation of t)e documents.
(- 1eerred +a)ment 0redit*
In deferred payment1 t)e /ank a-rees to pay on a specified future date or eent1 after
presentation of t)e e2port documents.
c- Acceptance 0redit*
In acceptance credit1 t)e e2porter presents a /ill of e2c)an-e paya/le to )im and dra0n at
t)e a-reed tenor 9t)at is1 on a specified future date or eent: on t)e /ank t)at is to accept
it. .)e /ank si-ns its acceptance on t)e /ill and returns it to t)e e2porter. .)e e2porter
t)en can represent it for payment on maturity. Alternatiely )e can discount it in order to
o/tain immediate payment.
d- 3egotiation 0redit*
In ne-otiation credit1 t)e e2porter )as to present a /ill of e2c)an-e paya/le to )im in
addition to ot)er documents t)at t)e /ank ne-otiates.
9-6-4 Back!to!(ack "F0
A Back% to% /ack mec)anism inoles t0o separate 8I4. one is master E2port 8I4 and
anot)er is Back%to%/ack 8I4. on t)e stren-t) of Master e2port 8I4 /ank issues Back%to%
/ack 8I4. Back%to%/ack 8I4 is commonly kno0n as /uyin- 8I4. on t)e contrary1 Master
e2port 8I4 is kno0n as !ellin- 8I4.
9-6-5 Feat'res o Back! to Back "F0
Import re-istration certificate & e2port re-istration certificate.
8I4 application and 84A form
Perform Inoice or Indent
64
Insurance Policy
IMP form
Bonded 0are)ouse license
Juota allocation letter from E2port Processin- Bureau 9EPB:
9-6-6 +a)ments 'nder Back!to!(ack "F0
Payment at maturity out of e2port proceeds. In case of e2port failure or non%reali@ation of
e2port proceeds1 forced loan i.e. )as to /e created in order to settle t)e Back% to%Back 8I4
payment.
9-8- Flo, 0hart or Export
Boods ready for s)ipment.
Inspection of t)e -oods from t)e competent aut)ority as per 8I4.
Prepared inoice and packin- list and essel /ookin- particulars.
Papers to /e sent to 4& F a-ent for s)ipment.
4& F a-ent 0ill do t)e custom formalities i.e. not)in-Ientry. 4)eckin- t)e -oods
as per inoice & packin- list inspection list etc.
4& F a-ent 0ill take permission for s)ipment I Hanoer t)e -oods to s)ippin-
-oods co.
After completion of all customs formalities t)e nominatin- s)ippin- company
receied t)e -oods for sailI loads in t)e s)ip and issued a receipt 0)ic) is kno0n
as mates receipt.
4&F A-ent )ands oer t)e s)ippin- receipt to t)e e2porter or t)ey can take t)e
ori-inal BI8 in payment of frei-)t and ot)er e2penditure etc.
E2porter may dispatc) t)e s)ipment adice to t)e importer directly to t)e importer
as per 8I4 terms.
70
4 & F A-ent receipts t)e ori-inal BI8 from t)e relatie !)ippin- 4ompany and
dispatc)es )e same to t)e /ank for ne-ation of receies t)e 9e2porter: from t)e
s)ippin- co directly.
E2porter spits t)e all ori-inal and duplicate sets of document to t)e openin- /ank
for deliers of from t)e part.
Openin- /ank lod-ed t)e documents and make payment to t)e ne-otiation /ank
AI4 terms.
9-9 Remittance
=emittance means transfer of fund. If 0e pronunciation of t)e 0ord C=emittanceD 0e
understand transfer of fund t)rou-) a Bank from one place to anot)er place 0)ic) may
/e e2ecuted to t)e country or /et0een t0o countries. =emittance 0)ic) is affected 0it)in
t)e country is called 8ocal =emittance and 0)ic) is affected /et0een t0o countries is
called Forei-n =emittance. =emittance plays a ital role in t)e deelopment of t)e
country. Fit)out effect of remittance no country can deelop )erself. Ban-lades) is ric)
enou-) in respect of )uman resources. !o In0ard =emittance )as -reat importance in our
country.
9-:-4 Opening o Foreign 0'rrenc) Acco'nt
Accounts are p)enomena t)rou-) 0)ic) transaction is routed. All /ankin- transactions
are settled t)rou-) accounts. !o AI4 is essential for settin- our day transactions. Forei-n
currency AI4 )as a -reat important on oerall forei-n e2c)an-e. Only t)e aut)ori@ed
dealer /ranc)es can open F.4.AI4 0it)out prior permission of Ban-lades) Bank. Forei-n
AI4 is opened /y Ban-lades)i nationals serin- and earnin- a/road i.e. )ain- income
71
from sources from ot)er t)an Ban-lades). .o open an F4ADI F4AP AI4 t)e formalities
mentioned /elo0 are to /e o/sered"
Openin- Forms i.e. Application1 !i-nature 4ard1 Eomination Form if any1 to /e
duly filled in and si-ned /y t)e applicant and t)e nominee.
Ori-inal Passport to /e su/mitted for erification and p)otocopy of first seen
pa-es to /e su/mitted for preseration.
Passport p)oto-rap) of /ot) AI4 )older and t)e nominee are to /e su/mitted
p)oto-rap)s of nominee to /e attested /y t)e AI4 )older & AI4 )older p)otoAs to
/e attested /y t)e aut)ori@ed officers of t)e /ank.
!erice contract in En-lis) or Ben-ali person to /e su/mitted 0it) t)e AI4
Openin- Form.
If t)e intendin- person desire to open AI4 from a/road t)e necessary papers are to
/e sent duly attested /y t)e aut)ori@ed official of Ban-lades) Em/assy 0orkin-
t)ere. All si-natures are /y same as t)at of passport. It may /e mentioned t)at no
initial fund is re6uired at t)e time of openin- of t)e forei-n currency account.
9-:-5 F0A1 $EH+% AF0
F4AD AI4 E2port is opened /y t)e e2ports only (.+L FOB alue. =eali@ed amount is
deposited in t)is account and t)e fund is used for t)e proportion of /usiness. Esta/lis) of
/usiness1 payment of credit card /ill1 e2port fair to attend t)e seminar and of purc)ase of
mac)inery and spare parts.
9-:-6 +rivate Foreign 0'rrenc)
Priate Forei-n currency AI4 is opened /y t)e Alien 0)o sere in Ban-lades) Forei-n
mission1 Forei-n EBO and Forei-n 4onsultation Firm. P)oto-rap)1 p)otocopy of
passport1 0ork permit1 EBO permission etc are to /e su/mitted to open t)e AI4.
72
9-:-8 0onverti(le 2aka $02% AF0
.)e priate Forei-n 4urrency Account )olders are to open conerti/le taka account. .)e
entire funds of t)e PF4 AI4 are to /e routed t)rou-) t)e related 4onerti/le .aka
Account.
9-:-9 In,ard Remittance
.)e remittances 0)ic) are receied from a/road and paid to t)e /eneficiary are In0ard
=emittance. In0ard remittance is mainly receied in U! Dollar1 Pound !terlin- and .aka
4urrency. Mery fe0 remittances in miscellaneous currencies are also receied.
9-:-: O't,ard Remittance
.)e remittance in forei-n currency 0)ic) is affected from our country to a/road is called
out0ard remittance. Form remitterAs point of ie0 is called out0ard =emittance and from
payeeAs point of ie0 is called In0ard =emittance.
:-:-; Remittance Financing For last Five Iears
$Million in 2aka%
7ear *$$+ *$$' *$$( *$$? *$$> *$#$
=emittance #?+.+ *5*.> *>* &++.' >$$.> ##&*
Fig're :-6 Remittance &cenerio
0hapter!:
73
&=O2 Anal)sis o AIB"
:-4 &trength o AIB"
.)e internal stren-t)s of Al% Arafa) Islami Bank 8imited are as follo0s"
All actiities of t)e /ank are conducted accordin- to Islamic !)aria) 0)ere profit
is t)e le-al alternatie to interest.
Usin- up to date soft0are in all t)e su/section of forei-n e2c)an-e section t)at
0ill reduce time and la/or of employee.
!killed manpo0er and efficient employees are /ein- inoled in /usy su/section
of t)is section to meet t)e clientAs satisfaction.
.)e total deposit of t)e /ank 0as .N.#'((+.55 million at 5#
st
Decem/er *$$>. At
t)e same time in t)e last year *$$?1 t)e amount of total deposits 0as ##'&5.''
million taka. In t)is area t)e -ro0t) rate is &&.$(L. so deposit is a -ood stren-t)
of AIB8.
All modern /ankin- facilities are aaila/le practicin- of t)is /ank.
AIB8 is not only seekin- profit /ut also lookin- into t)e customer serice.
:-5 =eakness o AIB"
AIB8 is one of a ne0 -eneration /ank. Upon esta/lis)ed of t)ese /anks total
num/er of /ank stands in our more t)an fifty. In addition to t)at a )u-e num/er of
financial institution 0orkin- /esides commercial /anks of our country. As suc)
t)eir /usiness is /ecomin- more and more ital 0eakness of AIB8 /ecause our
financial market is not e2pandin- in comparison 0it) t)e esta/lis)ment of ne0
/anks.
In anot)er 0eakness of t)e ne0 -enerations /anks are /ranc) net0ork 0)ic) are
ery smaller in num/er t)rou-) t)ey are spreadin- ery s)arply. But t)is
74
0eakness 0ill /e come up in t)e span of time and t)e aut)ority is ery serious to
sole t)is 0eakness.
=isk Mana-ement system is not stron-. .)e /ank )as already e2posed to a ariety
of risks t)e most important of 0)ic) are credit risk1 market risk1 li6uidity risk.
I. Diision is not stron- /ecause /ank put due importance to utili@ation of
tec)nolo-y%/ased serice to t)e customers. In line 0it) t)is1 I. Diision of t)e
/ank is en-a-ed in desi-nin- arious !oft0areAs to facilitate serices. .)rou-)
t)is diision a num/er of Branc)es )ae already /een /rou-)t under on%line
/ankin- and some ot)er /ranc)es 0ill also /e /rou-)t under t)is um/rella soon.
8i6uidity risk is t)e risk t)at t)e /ank in una/le to meet payments o/li-ations and
arious potential payment o/li-ation as and 0)en t)ese fall due 0it)out incurrin-
unaccepta/le losses. AIB8 is not out of t)is 0eakness.
8ack of enou-) 6ualified1 sensitie and supportie employees in t)e /ankin-
enironment.
:-6 Opport'nit) o AIB"
Faora/le /usiness climate for commercial /anks in t)e country in comparison
0it) ot)er /usiness.
Hi-) findin- cost for lendin- is -reat opportunity for t)e /ank. Due to lack of
poor performance of E4BAs in our country t)ou-) t)ey are -ra//in- an )u-e
deposits from t)e market1 P4BAs are fulfillin- t)e )i-) demand of t)e financial
marketin- lendin- money to0ards deficit sources in.
Hi-) rate of interest. !o P4BAs are makin- 0ell done in re-ards of lendin- and
/esides deposit collection from t)e market. Boernment /anks are not a/le to
fulfil market demand and t)is opportunity is takin- /y t)e P4Bs.
Anot)er mentiona/le opportunity of t)e P4BAs is )i-) -rades of serices in
re-ards of customer serice. Besides t)e E4BAs serice is ery poor and so muc)
traditional. As a result of 0)ic) it )as easily ac)ieed pu/lic respond easily
creatin- t)eir positie approac) day /y day.
72
:-8 2hreats o AIB"
.)is is a t)reat for Al% Arafa) Islami Bank 8imited /ecause t)e financial market
stren-t) of our country is not so stron-. As suc) to recoer t)e lendin- money is a
-reat t)reat. Because in our countryAs /usiness c)ain like ot)er countries is
dependa/le eac) ot)er. !o1 if t)e monetary flo0 faces any o/stacle it )ampers t)e
runnin- of t)e full c)ain. As a result recoery face a -reat t)reat for commercial
/anks and AIB8 is not out of t)is t)reat.
.)ere are almost *$ ne0 commercial /anks are 0aitin- to enter t)e /ankin-
industry in Ban-lades) as a result t)e competition 0ill /e ery stipper in /ankin-
industry in Ban-lades).
Anot)er ma,or o/stacle for /anks is its classified loan. .)rou-) t)is picture is not
ne0 for t)is particular /ank it is e2ists to all commercial /anks t)rou-)out t)e
0orld. But in our country t)is /ad culture created /y t)e E4BAs and its impacts
comin- to t)e P4Bs also. But oer ie0in- t)e /anks performance 0e found t)at
it is still in safe side in comparison 0it) ot)ers /ut in s)ould /e careful to
oercome t)is result.
It is t)e order of t)e day to delier prompt serice to t)e customers takin-
assistance of modern facilities. Fe )ae reco-ni@ed t)is and taken all possi/le
steps to introduce tec)nolo-y%/ased /askin- serice to t)e customers. It is a
-reatest t)reat for AIB8.
Fe reco-ni@e t)at /ankAs are not mere profit earnin- institutions rat)er t)ey )ae
-reat responsi/ility to0ards t)e society in 0)ic) t)ey are operatin-. In t)is
respect1 I am )appy t)at our /ank )as /een a/le to make its presence felt in t)e
national leel. A num/er of seminars )ae /een arran-ed under its auspices on t)e
topics of economic and social aspects 0)ic) proided a 0ay of lookin- at t)e
picture from different perspecties.
0hapter!;
Ma/or Findings, Recommendation & 0oncl'sion
76
;-4 Ma/or Findings
From t)e report analysis I )ae found seeral t)in-s. .)ese are -ien"
.)e num/er of e2porter and importer 0)o operate t)rou-) t)is /ank is not enou-)
to ac)iee t)e -oal. If t)e /ank 0ants to increase t)eir total forei-n /usiness t)en
t)ey s)ould increase total e2port1 import and remittance. !o t)ey need increase
e2porter and importer.
Al%Arafa) Islami Bank 8imited operates forei-n /usiness t)rou-) *( /ranc)es
t)at are not sufficient to competition in t)e market. !o t)ey s)ould take necessary
steps to increase forei-n e2c)an-e department in ot)er /ranc).
.)ey )ae not sufficient efficient employees to operate different departments in
t)e /ank. !o t)ey s)ould increase efficient employees in different department.
!taff meetin- and departmental meetin-s at t)e /ranc) leel does not )eld or ery
fe0 0)ic) is ery essential to deelop serice 6uality as 0ell as pro/lem solin-.
But t)is practice is ery fe0. !o it may create ma,or pro/lem in future.
P4 Bank is not modern and compre)ensie /ankin- soft0are. It does not proide
ade6uate support on proidin- t)e serices. It is not user friendly and
mana-ement s)ould consider replacin- t)e P4 Bank system /y a more
compre)ensie /ankin- system.
.)e /ank is operated t)rou-) (?/ranc)es t)at are ery fe0. !o little num/er of
/ranc)es is a /arrier to improe /ank -ro0t).
A.M /oot) serice is an online popular serice. .)e /ankAs online serice is ery
poor. !o if t)ey 0ant to surie in competition market t)ey s)ould introduce
online serice as early as possi/le.
.ec)nolo-y t)at AIB8 is usin- for t)eir /ankin- system is not up to dated. Eo0
t)ere is some international /ank in Ban-lades)1 t)ey are ery fast and ery up
dated. AIB8 is losin- t)eir clients /ecause of lack of tec)nolo-y.
77
.)ere is a -ap /et0een t)e customers and /ankers. 4ustomers are una0are a/out
t)e moral of Islamic Bankin- !ystem. !ometimes t)ey are not familiar 0it) t)e
rules of Islamic Bankin-.
.)e mana-ement of AIB8 takes no risk 0)en t)ey -ie loans to t)eir clients.
.)ey are ery slo0 in decision% makin-. .)ey sometimes fail to take t)e current
opportunities for t)is slo0 decision makin- process.
.)e Al% Arafa) Islami Bank is too muc) centrali@ed. For eac) and eery 0ork
/ranc) office )as to -et permission from t)e )ead office. .)e Head office ti-)tly
controls eac) and eery /ranc) office. .)is dependency on )ead office causes
slo0 do0n t)eir actiities.
Adertisin- and promotion are t)e 0eak points of Al% Arafa) Islami Bank
8imited. AIB8 does not )ae any effectie marketin- actiities. Ot)er /anks )ae
/etter marketin- strate-y.
In Islamic Bankin- !ystem 8oan is ery len-t)y process. But it is len-t)ier in
AIB81 /ecause /ranc) mana-ers do not )ae t)e po0er to -ie loan. For eery
loan1 mana-ers )ae to send proposal to )ead office. Mana-ement does not 0ant
to take any risk.
AIB8 does not -ie any personal loan1 /ecause it is a-ainst t)e rules of Islamic
Bankin- !ystem. Ho0eer personal loan is ery popular in ot)er /anks /ecause
t)e rate of interest is ery )i-) for personal loan.
Most of t)e times1 t)e clients do not repay t)e loan in time. Ho0eer t)e /ank )as
no ri-)t to take interest for e2tra time1 /ecause interest is not allo0ed in Islamic
Bankin- !ystem. .)ey ,ust take t)e amount t)at is mentioned in contract.
Inestment ration in respect of deposit is ery lo0 in AIB8. AIB8 is not a/le to
take t)e risk ri-)t no0 like ot)er /anks. .)e mana-ement of AIB8 does not risk in
inestment.
AIB8 does not inest in Hotel /usiness. But t)is /usiness )as )i-) rate of returns.
AIB8 mostly inest is purc)ase and sales /usiness. .)ey also inest in =eal Estate
Business.
!ome international and local sain-s /onds -ie )i-) rate of returns. AIB8 does
not /uy t)ese /ecause it is a-ainst t)e rules of Islamic Bankin- !ystem.
73
Mana-er of any /ranc) of AIB8 does not )ae t)e po0er of -iin- any loan to t)e
clients 0it)out t)e permission of Head office. Ho0eer in ot)er /anks mana-er
)ae t)e po0er to -ie small loans.
Interest rate on deposit is muc) )i-)er t)an /anks1 0)ic) increase t)eir cost of
fund and it diminis) t)e opportunity to proide loan at a lo0er interest rate. It
makes )i-) demand on s)ort%term deposit and mana-ers t)ese lia/ilities 0it) loan
t)ey mi-)t need to /orro0 from 4all Mooney Market.
;-5 Recommendation
From t)e analysis 0e )ae seeral t)in-s find t)at iolate t)e true /ankin- system. AIB8
is t)e leadin- profit and -ro0t) oriented /ankin- in Ban-lades). And day /y day t)e
profita/ility as 0ell as /ankin- actiities are /ein- increased and t)e /ankin- system is
muc) updated to meet t)e fast /ankin-. In *$$>1 AIB8 )as started t)e online /ankin-
facilities for t)e e2istin- customer and potential customers. In *$#$1 it 0as t)e leadin-
-ro0t) oriented commercial /ank in Ban-lades). But t)e /ank )as seeral pro/lems t)at
0e find out in my analysis. .)ese pro/lems create more /arriers for makin- t)e /est /ank
in Ban-lades). .o deelop t)e /ankin- strate-y1 policy and oerall /ankin- enironment1
t)e follo0in- recommendations are as follo0s"
.)e num/er of e2porter and importer 0)o operate t)rou-) t)is /ank is not enou-)
to ac)iee t)e -oal. !o AIB8 s)ould offer more facilities to attract t)em to t)eir
client.
In addition 0it) t)e present serices t)ey s)ould include more serices. It is /adly
needed to proide more serices to t)e customer in order to compete in t)e
market.
Bankin- is serice oriented marketin-. Its /usiness profit depends on its serice
6uality. .)atAs 0)y t)e aut)ority s)ould al0ays /e a0are t)e serice 6uality.
74
Forei-n E2c)an-e department s)ould /e fully computeri@ed t)at t)e e2c)an-e
process 0ould /e conenient for /ot) t)e /ankers and t)e clients.
.)e /ank s)ould increase t)eir num/er of /ranc)es and forei-n e2c)an-e
department in ot)er /ranc). Because t)ey cannot compete in t)e market for t)eir
fe0 num/er forei-n e2c)an-e department.
Bank s)ould offer more facilities to t)e customers suc) as credit card1 isa card1
A.M mac)ine etc to surie in t)e competition.
On%line /ankin- s)ould /e introduced for /etter customer serices and to
eliminate risk of sendin- documents ia post and risk of loss. It also increases
6uick fund transfer and /etter satisfaction from customer.
Proper%Bankin- !oft0are s)ould /e used to -et /est /enefit from t)is department.
!taff meetin-s and departmental meetin-s at t)e /ranc) leel must /e increased to
deelop serice 6uality as 0ell as pro/lem solin-.
Payment to t)e 0orkforce s)ould /e suc) t)at 0ill encoura-e t)e employees to
0ork more. =emuneration packa-e must /e impressie and inconsistent 0it)
0ork performance.
.)e /ank s)ould -ie an a--ressie adertisement campai-n to /uild up a stron-
ima-e and reputation t)e potential customers.
AIB8 s)ould use t)e latest /ankin- tec)nolo-y to proide /etter serices to t)e
customers. It 0ill also attract t)e customerAs of international /anks.
AIB8 s)ould pursue adertisin- campai-n in order to /uild a stron- ima-e amon-
t)e people. .)ey s)ould carry out a--ressie marketin- campai-n to attract
clients.
AIB8 s)ould offer different types of loans to t)eir o0n staffs immediately after
confirmin- t)eir ,o/. .)is loan 0ill influence t)em for /etter performance. .)e
interest rate on t)is loan must /e less t)an ot)er /anks interest rate.
.)e mana-ement s)ould take immediate decision to take t)e current
opportunities.
Attitudes of t)e employee 0ill not remain sta/le if some /enefits are not
e2tended.
30
AIB8 s)ould increase t)e ratio of inestment. Eo0 t)ey s)ould take risk 0)en
t)ey -ie loans to t)eir clients1 /ecause t)ere is a lot of idle money in t)eir eery
/ranc).
.)e mana-ement of AIB8 s)ould -ie t)eir employees more increments in salary.
In addition1 pro/ationary period s)ould decrease. It 0ould motiate t)e staff to
perform 0ell in t)e or-ani@ation.
.)e dependency of Head Office in eery step s)ould /e 0aied. .)ey s)ould
permit t)e /ranc)es to 0ork independently.
Mana-ers of AIB8 s)ould )ae t)e po0er of -iin- small loans to t)e clients. It
is ery important for t)e /anks to increase t)e inestment.
In Islamic /ankin- system loan is ery len-t)y process. AIB8 s)ould take steps to
minimi@e t)e process of loan system. Because customers donAt like len-t)y
process.
AIB8 can pursue a diersified strate-y in e2pandin- its current line of /usiness.
.)e mana-ement can consider options of startin- merc)ant /ankin- for
minimi@in- t)e risk and -ettin- more return t)ey s)ould prepare portfolio
mana-ement.
AIB8 s)ould look on to recruit t)e efficient and )i-)ly 6ualified employees to run
t)eir /usiness operation and aoids nepotism in recruitment session.
If t)ese recommendations can fulfill1 t)e 0)ole /ankin- process 0ill /e smoot) and t)e
potential as 0ell as e2istin- customers may -et /etter serice from t)e /ank. And t)e
/ank 0ill /e t)e /est /ank in Ban-lades) 0it)in a small period of time.
;-6 0oncl'sion
!uccess in t)e /ankin- /usiness lar-ely depends on effectie lendin- and adance forei-n
e2c)an-e facilities. 8ess t)e amount of loan losses1 t)e more t)e income 0ill /e from
31
credit operations. Beside t)is successful forei-n e2c)an-e actiities can proide more
profit to t)e /ank and also create a positie ima-e of t)e country in t)e international
trade. .)ou-) t)ere are some dra0/acks in t)e forei-n e2c)an-e department of Al%
Arafa) Islami Bank1 /ut modern /ankin- tec)nolo-y1 e6uipment1 policy and employee
and employer sincerity may lead to increase profit. 8ike ot)er commercial /anks1 AIB8
s)ould )ae to look on to t)e customer satisfaction. And t)is satisfaction leads to t)e /ank
as a /est /ankin- enironment in Ban-lades).
I 0as aut)ori@ed to prepare a report on COerall Bankin- Actiities of AIB8D for partial
fulfillment of my course re6uirement. I c)oose Al%Arafa) Islami Bank 8imited1 Moti,)eel
4orporate Branc) due to conenient 0)ere I 0orked as an intern for t)ree%mont) period.
.)is report )as /een prepared /ased on my practical e2perience on t)e day%to%day
/ankin- actiities. .)is is a -reat e2perience for me to )ae e2posure in t)e practical
field. And all t)e actiities t)at I o/sered and prepare t)is report and recommend t)e
pro/lems.
!o if t)e Al% Arafa) Islami Bank 8imited takes some action re-ardin- my
recommendation stated in t)is report1 /ank may its position in t)e lon- run.

Bi(liograph)
Dr. A.= N)an1 CBank Mana-ementD1 First Edition1 *$$?%*$$>1
Decent Book Pu/licationH P%#%51 P%+'%'*.
32
Peter !. =ose1 C4ommercial Bank Mana-ementD 5
rd
Edition1 Ir0in1
U!A1 #>>#.
Inestment diision of Al% Arafa) Islami Bank 8imited
Annual =eport of AIB8%*$$?1 *$$>1 *$#$
Annual =eport of Ban-lades) Bank.
000.al%arafa)islami/ank.com
000.islami/ankin-.com./d
Appendi"
$ Audited Annual ,eport of AIBL for 2::5, 2:.: &
2:..)
33
$ Duestionnaire for t#e clients)
$ ive 0ears Income statement and Balance s#eets)
34