Professional Documents
Culture Documents
REPORT
ON
GENERAL BANKING
OF
Submitted to:
Submitted by:
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TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION OF THE REPORT
1.1
Introduction
1.2
Objectives Of The Study
1.3
Scope Of The Study
1.4
Methodology Of The Study
1.5
Limitation Of The Study
1
2
2
3
3
4
4
4
5
5
7
32
33
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35
36
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Time is the first limitation as the duration of the program was of 10(ten) Days
only.
As the officers are very busy with their daily work, they could provide very
little time.
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It appears from the above definitions that Islamic banking is systems of financial
intermediation that avoids receipt and payment of interest in its transactions and conducts
its operations in a way that it helps to achieve the objectives of an Islamic economy.
Between
Islamic
&
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Date of Registration
Opening Company
1st Branch
Registered Office
Chairman
Managing Director
Company Secretary
Authorized Capital
Paid-up Capital
Local
Partnership
of 100%
Capital
Equity
Tk.16,091.17 million
Deposit
Tk.140,980.55 Million
Investment
Tk.125,715.39 Million
Board of Directors
23
110
2387
58,466
Number of Branches
Number of Employees
Number of Shareholders
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the country are the sponsors of the Bank. 100% of paid up capital is being owned by
indigenous shareholders.
The bank is committed to contribute significantly to the national economy. It has made a
position contribution towards the socio-economic development of the country with 53
branches of which 17 is AD throughout the country.
Mission
Balanced growth.
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Commitments
Ours is a customer focused modern Islamic Banking sound and steady growth in both
mobilizing deposit and making quality Investment to keep our position as a leading Islami
bank in Bangladesh.
To deliver financial services with the touch of our heart to retail, small and medium scale
enterprises, as well as corporate clients through our branches across the country.
Our business initiatives are designed to match the changing trade & industrial needs of the
clients.
Accounts opening
Issuance of Cheque Book
Issuance of Payment Order
Issuance of T.T
Issuance of D.D
Issuance of Online Transfer
Handling transfer transaction
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Registration of voucher.
Posting of voucher in the ledger.
Preparation of unadjusted trial balance
Preparation of adjustments (accrual of expenses and income)
Preparation of adjusted trial balance
Maintenance of accounts with Bangladesh bank & other banks
ii) Investment Accounting: The company maintains its books of account based on the
operating method of accounting according to Generally Accepted Accounting Standards in
conformity with one the provision of relevant regulations of Bangladesh Bank.
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Investment Division
Functions of investment divisions are:
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some customers with who bank are doing its business frequently. It is an important
department for all banks because it provides day-to-day service to the customers. Front
Desk is the important for general banking. Customers give their deposits and meet their
demand for cash by honoring cheques. Besides this a customer opens new accounts, remit
funds, issues bank drafts and pay orders etc.
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Minimum TK. 2000 balances must always be maintained all the time.
Types of current account that are provided by the bank are as follows:
Current Account for Individual.
Joint Current Account.
Proprietorship Current Account.
In case of opening a proprietorship current account, a copy of the valid trade license and
personal TIN must be submitted.
Limited Company current Account
To open a limited company current account, the requirements are the followings:
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Commissioner certificate
Two copy passport size photo of client.
One copy nominees photo
Sign of introducer is verified
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Step 1
An Introducer who has an account in the bank is required to open account. Officials of
the bank concerned with account opening will be contacted for the purpose of opening
account
Step 2
Mentioning what type of account is desired to be opened to the officials and taking the
particular form
Step 3
Step 4
Step 5
Step 6
Account is opened and a cheque book and a deposit book are given.
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Allah has permitted trade and forbidden interest (verse 275 of sura Al-baraka). And as
such Al-Arafah Islami Bank Limited operates with the objectives and commitment to
implement the economic and financial principles of Islam in banking arena blending
Islamic values and modern technologies with a view to achieve complete success in this
world and hereafter
employees.
To expand Islamic banking through welfare oriented banking system.
Ensure equity and justice in economic activities.
Extend financial assistance to poorer section of the people, and
Achieve balanced growth & equitable development.
The primary objective of Al-Arafah Islami Bank Ltd is to promote, foster and develop the
application of Islamic principles, law and tradition to the transaction of financial, banking
and related business affairs and to promote investment companies, enterprise and concerns
which shall themselves be engaged in business as are acceptable and consistent with
Islamic Principles, law and tradition. But the objectives of Al-Arafah Islami Bank Limited
in the context of its role in the economy are as follows:
To
Shariah
To contribute towards economic development and prosperity within the principles
of Islamic justice.
To facilitate efficient allocation of resources.
offer
contemporary
financial
services
in
conformity
with
Islamic
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Limited Company
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Chairman/Managing Director.
Certificate of incorporation.
Certificate of Commencement (In case of Private limited
company).
Certified (joint stock) true copy of the Memorandum and Article of
Association of the Company duly attested by Chairman or
Managing Director.
List of directors along with designation & specimen signature.
Latest certified copy of Form - xii (to be certified by register of
Closing of an account
The closing of an account may happen,
A customer may close his/her account any time by submitting an application to the
branch. The customer should be asked to draw the final check for the amount standing to
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the credit of his/her account less the amount of closing an other incidental charge and
surrender the unused cheque leaves. The account should be debited for the account
closing charge etc. and the authorized officer of the bank should destroy unused check.
In case of joint account the application for closing the account should be signed by the
joint account holders. The fee for closing of an account is TK.230 and Tk550 for savings
and current account respectively.
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These schemes have been introduced to provide an opportunity to people for safe deposits.
Under this scheme double scheme (DBDS) duration is 11 years 2 months interest rate is
7%, triple scheme (TBDS) duration is 18 years 1 month interest rate is 7%.
Lakhopoti Scheme
Savings helps capital formation. Lakhopoti scheme has been introduced with a view to
encourage saving habit amount the people. Under this scheme depositing monthly
installment of only TK. 2500 for 3 years/ TK. 1430 for 5 years/ TK. 800 for 8years/
Tk.600 for 10 years/ Tk.455 for 12 years one can cash on maturity a sum of TK 100000.
Millionaire Scheme
Under this scheme depositing monthly installment of only TK. 2020 for 20 years/ TK.
3245 for 15 years/ TK. 4530 for 12years/TK. 5850 for 10years/ Tk.9300 for 7 years/
Tk.11500 for 6 years/ Tk.14240 for 5 years/ Tk.18100 for 4 years/ Tk.25000 for 3 years
one can cash on maturity a sum of TK 1000000.
Kotipoti Scheme
Under this scheme depositing monthly installment of only TK. 20150 for 20 years/ TK.
25230 for 18 years/TK.32440 for 15 years/TK.42600 for 12 years/TK. 58475 for
10years/TK. 93100 for 7years/ Tk.114700 for 6 years/ Tk.142100 for 5 years/ Tk.180950
for 4 years/ Tk.249800 for 3 years one can cash on maturity a sum of TK 10000000.
Monthly Hajj Deposit
Hajj deposit at monthly installment from 1 (one) year to 20(twenty) years are accepted
under the above scheme to enable the account holder to perform Hajj out of the
accumulated saving with profit.
Onetime Hajj Deposit
Under the above scheme, fixed amount of Hajj deposits are accepted from the clients for
particular term and as per rules profit is accumulated thereon per year in this regard. Under
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the scheme, the guardians may also open Hajj account to enable their successors to
perform Hajj. Highest amount of profit is paid in the above types of deposit by the bank.
Savings Investment Deposit
Deposit under the scheme is accepted by monthly installment and after expiry of the term.
Double amount of such savings is given as investment in feasible sectors by the bank as
per choice of the depositors without any collateral security. Any one by saving under the
scheme can take business venture on utilization the amount saved under the scheme.
Mudaraba Pension Benefit Deposit Scheme (PTD)
It has 2 and 3 yearly schemes. It will give a 12.6% profit on the amount of deposit. It is tax
exempted.
Cash Section
All sorts of transaction considering cash are taken in to care in the cash department. Cash
is deposited in the name of concern in the Bank and disbursed to the client by the
department.
The functions of a cash department are described below
1)Functions of cash department
Cash Payment
Cash Receipt
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Step a)
Step b) Verification of the following by the cash officer in the computer section
Step c)
Date of cheque (it is presented within month from issue date) issued from the
branch amounts in figure and sentence written does not differ signature of the drawer does
not differ cheque is not torn or damage.
Step d)
Step e)
Remittance section
The major function of commercial Banks is mobilization of fund other then these banks
provide ancillary services to its clients. Clients need to remit money from one place to
another for their business or purposes. Banks fulfill this need of customers by means of
remittance service. Money can be remitted domestically or internationally which knew as
local remittance and foreign remittance respectively.
The main instruments used by AIBL of remittance of funds are
1.
2.
3.
4.
PO (pay Order)
DD (Demand Draft)
(TT)Telegraphic Transfer
MoneyGram
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Total amount of PO
Commission
Tk.1to 10000
TK. 10.00
TK.20.00
TK. 30.00
TK. 50.00
Telegraphic Transfer
Telegraphic transfer is one of the fastest means of transferring money from one branch to
another from one to another. The TT issuing bank instructs its counterpart by tested telex
message regarding remittance of money. No instrument is given for TT unless both parties
have account, as money is transferred.
Charges for issuing TT
Telephone charge Tk.307
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Services charge
Tk. 1 to Tk.10000
=> Tk.107
Above Tk.10000
MoneyGram
AIBL uses MoneyGram to take the remittance sent from abroad. The rate at which this
service is provided is only known to the Head office.
Clearing Section
Cheques, Pay Order (P O), and Demand Draft (DD) Collection from other banks on behalf
of its customer is a basic function of a Clearing Department. Clearing is a system by which a
bank can collect customers fund from one bank to another through clearing house.
Clearing House is a place where the representatives of different banks get together to
receive and deliver Cheques with another banks. Normally, Bangladesh Bank performs the
Clearing House in Dhaka, Chittagong, Rajshahi, Khulna & Bogra. Where there is no
branch of Bangladesh Bank, Sonali bank arranges this function. Previously Everyday
clearing house took in a place in Bangladesh Bank once in the morning called morning
house (1st house) another in the evening called return house (2nd house).But now with the
modern online system the process has been computerized and there is no need to go in
those two houses.
Types of Clearing
Inward Clearing: The Cheque or instruments of Al Arafah Islami Bank Ltd that are
submitted to other banks for collections of money of bills are called inward clearing.
Outward Clearing: The Cheque or instruments of other banks that are submitted to the Al
Arafah Islami Bank Ltd for collection is called outward clearing.
Dispatch Section
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In dispatch section, the main job is keep record on inward and outward document. If any
document came into bank for various purposes from different organization or bank head
office or another branch but also if any document ,application go outward from bank these
all the record are included in dispatch section (examples: document letter of credit, joining
application , a/c reopening, A/c closing, letters from other organizations etc.).
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WEAKNESS
Wide Image.
Enthusiastic employee.
High deposit.
Excellent Management.
High commitment of customer.
AIBL banks has strong non-interest
earning base.
Qualified & experienced human
resource.
Satisfactory Environment.
Wide product line.
OPPORTUNITIES
THREATS
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accounts
Preparing form of different deposit scheme and account
Inspecting the form boxes and making form as per need
Filling up the important unfilled terms on a form
Filling the used, closed and pending forms
Finding and delivering cheque books
Giving guidelines to fully fill a deposit scheme or account opening form
Informing clients about account balance and transaction
Delivering ATM cards
When any customer comes to open an account, the banker should demand everything
necessary to open that account. But in many cases, accounts are opened without those.
When a joint stock company comes to open an account if the company happens to be
an existing one, the banker should demand copies of the balance sheet and profit
&loss account, which will reflect the financial growth of the company and its
soundness. But in practice companies and the bankers as well don't even bother
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Officers of the bank are mostly competent. AIBL provides training but the facility isnt
sufficient especially for the lower level officers.
The bank offers very few service charges which is very good for the customers.
They are connected through telecommunication network for providing any branch
banking services to the customer.
Like most of the private banks, AIBL also imposes a target deposit for collection
upon its employees. Every employee has to go out for the purpose of deposit
collection, which they call "development purpose". It is an effective method no question
about it, since many banks of our country rely on this method. But sometime affect
negatively and cause job dissatisfaction. Officers of the desk, where workload is very
high, hardly get the chance to go out for development purpose and always feel that
their duties for the organization would not be evaluated unless they can show a good
amount of deposit collection against their name.
The cash counters are congested which hamper day to day teller activities and action
become delayed.
Recently offering locker service has become popular among banks. But AIBL does not
provide it. It can provide different online banking services like transferring money from
one account to another account or collecting bank statements using internet by the
customers themselves. But after starting, they have closed the aforementioned services.
All the services offered by the bank are similar and lying face down to limitation by
its competitors. Long established services may ease to satisfy fully the changing
needs of the customers.
In the client assessment, it was exposed that clients are very price-conscious. Price
plays both an economic and physiological role in the banking sector. Especially
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customers of Al- Arafah Islami Bank who comes from largely middle class income
groups are likely to be very price responsive.
AIBL has not got a strong marketing policy. Very few initiatives have been taken to
be known among public through advertisement.
Though AIBL using banking software named ABABIL but it is not highly
appreciated by the employees.
AIBL does not have enough ATM booths like other banks use to have which is great
problem for the customers.
4.4 Recommendation
With a view to ensure exciting services and opening up the new window of
progression as well as uplift, I would like to present the Al-Arafah Islami Bank Ltd.
with several recommendations like:
Online service should expand in more meaningful way to cover all the
functions of bank which will accelerate the international trade as well as
economic development;
All the branches of AIBL should have the facilities of the foreign
exchange
Branches should have the required autonomy in order to customized its
services to the local needs
All SWIFT Workstations should bring under the facilities of online
network.
Currency exchange rate should be competitive and it should fix with due
local consideration.
L/C margin should also be as competitive as possible.
Foreign Exchange Department should well equipped with required
human resources
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4.5 Conclusion
Islamic Financial Institution like AIBL is in their infancy as compared to conventional
institutions. Conventional institutions have reached the present status after centuries of
evolution based on their innovation in meeting customers needs. For this purpose these
conventional institutions spent substantial sums on research and development. Islamic
Banking movement emerged in a very competitive environment. Their survival hinges
very much on maintaining depositors confidence after effective support by Islamic
investors of financial institutions require that depositors funds be rewarded with good
returns.
Al-Arafah Islami Bank Ltd. has introduced a new dimension in the field of
innovative and benevolent banking in our country. The bank has successfully made a
positive contribution to the economy of Bangladesh with in very short period of time. Its
profit is gradually increasing. It plays a great role in collecting scattered Deposit, Loan
settlement and International Trade etc. The Bank ensures quality services to the customers.
On the other hand it is facing several competitions from other key players like Islami Bank
Bangladesh Ltd., Prime Bank Ltd., Social Investment Bank Ltd., Mercantile Bank Ltd.,
and Shahjalal Bank Ltd. To face that competition the bank should think to start new
services and to take different types of marketing strategy to get more customers in this
competition market of banking.