“Internship Report”

On

Al-Arafah Islami Bank Limited

Laldigir Par Branch”

Topic
General Banking of AIBL
 Internship Report
On
General Banking of Al-Arafah Islami Bank limited
Laldigir Par Branch, Sylhet

Under Supervision of:

Md. Afsarul Islam
Senior Lecturer
Department of Business Administration
Metropolitan University, Sylhet.

Prepared By:
Mukidur Rahman Chowdhury
ID: 143-116-010
BBA Program
Batch: 35th
(Major in Finance)
Department of Business Administration
Metropolitan University, Sylhet.

Date of Submission: 10th June, 2020

 Letter of Transmittal
10th June, 2020

To
Md. Afsarul Islam
Senior Lecturer
Department of Business Administration
Metropolitan University, Sylhet.

Subject: Letter of Transmittal

Dear Sir,
I hope you will be pleased to know that I have completed my Internship in Al-Arafah Islami Bank
in General Banking Department. It gives me immense pleasure to complete my Internship
successfully and submit this report on the analysis. I have conducted during my internship period.
At every segment of making this report, I tried to enhance my knowledge about the system or work
flow of Al-Arafah Islami Bank Ltd. This report will try to give the picture of my efforts and ability.

It would be very kind of you for examine my report work and give me further suggestions and
enhanced my clarification due to future prospects.

Sincerely yours

……………………
Mukidur Rahman Chowdhury
ID: 143-116-010
BBA Program
(Major in Finance)
Metropolitan University, Sylhet.
Date: 10th June, 2020

Certificate Of The Supervisor

I hereby certify that Mukidur Rahman Chowdhury, Bearing ID NO :143-116-010, Batch 31st
(Major in Finance, Department of Business Administration, Metropolitan University, Sylhet. has
successfully completed his Internship Report entitled “General Banking Activities of Al-Arafah
Islami Bank Ltd.”. He works under my guidelines and Supervision. His internship placement was
at Al-Arafah Islami Bank Ltd. Laldigir Par Branch, Sylhet. I am pleased to state that Mukidur
Rahman Chowdhury worked hard in preparing this report and he has been able to present a good
picture of the concerned organization.

I wish him every success in life

…………………………………………..
Md. Afsarul Islam
Senior Lecturer
Department of Business Administration,
Metropolitan University, Sylhet.
 Table of Content
Chapter 1: Introduction
SN Particular Page
1.1 Background of The Study 2
1.2 Origin of Study 2
1.3 Objective of The Report 3
1.4 Scope of The Study 3
1.5 Significance of The Study 3
1.6 Limitations 4
Chapter 2: Overview of Banking History
2.1 History of World Banking 6
2.2 History of Banking Industry In Bangladesh 6
2.3 Meaning of Bank 6
2.4 Evalution of Bank or Banking 7
2.5 Brief Overview of Banks In Bangladesh 8
2.6 Concepts of Islamic Banking 8
2.7 Objectives of Islamic Banking 9
2.8 Characteristics / Features of A Bank 9
2.9 Functions of Bank 10
2.10 Type of Banks 10
2.11 Principles of A Bank 11
2.12 List of Bank In Bangladesh 11
Chapter 3: Overview of Al-Arafah Islami Bank Limited
3.1 Overview of The Al-Arafah Islami Bank Limited 15
3.2 Organizational Overview of AIBL, Lalgidir Par Branch 15
3.3 Vision of The Al-Arafah Islami Bank Limited 15
3.4 Mission of The Al-Arafah Islami Bank Limited 15
3.5 Strategic Objectives of AIBL 16
3.6 Values of The Al-Arafah Islami Bank Limited 16
3.7 Organizational Structures of AIBL 17
3.8 Board of Directors 17
3.9 Value Added Statement of AIBL-2018 18
3.10 Economic Value Added Statement 18
3.11 Market Value Added Statement 19
3.12 Market Value Addition 19
3.13 Pattern of Shareholding 19
3.14 Corporate Information 20
3.15 Departments of The Al-Arafah Islami Bank Limited 20
3.16 Products of The Al-Arafah Islami Bank Limited 20
3.17 Services of AIBL 22
3.18 Depsoit Products of Islamic Banking 22
3.19 Others Product of AIBL 22
3.20 International Services 23
3.21 Policy of Small and Medium Enterprise (SME) Scheme of AIBL 23
 Chapter 4: General Banking Activities of AIBL
4.1 Description of Task I Have Completed During Internship Period 26
4.2 General Banking Activities Of The Al-Arafah Islami Bank Limited 26
4.3 Accounts Openning, Customer Care and Help Desk 27
4.4 Opening Current Deposit Account 27
4.5 Opening Saving Deposit Account 29
4.6 Opening Short Term Deposit Account 30
4.7 Opening Fixed Deposit Account 31
4.8 Monthly Saving Scheme 32
4.9 Bills & Clearing Section 33
4.10 Data Entry And Work In Credit Department 33
4.11 Foreign Remittance 33
4.12 Account Section 33
4.13 Receiving Cheques For Collection 34
4.14 Issuing Cheque Book 34
Chapter 5: Application of Knowledge Gained During BBA Program
5.1 Application of Knowledge Gained During BBA Program to Accomplish 36
Each Task
Chapter 6: Financial Practices of Al-Arafah Islami Bank
6.1 Saving Account 41
6.2 Current Account 41
6.3 Fixed Account 41
6.4 Investment 42
Chapter 6: Findings, Recommendations and Conlcusion
6.1 Findings 44
6.2 Recommendations 45
6.3 Conclusion 46
Acronyms 47
Bibliography 48
 CHAPTER ONE
INTRODUCTION

1
1.1 Background of the Study
All the nationalized and public banks operating in our country play an important role in our
national and international economy. Now Private Commercial banks in our country are facing an
increasing competition because of the entrance of lot of competitors in this large sector. As private
banks are increasing gradually, some nationalized banks are being privatized by the Government
and the competition has increased more than it was before, those banks which are more customers
oriented and will give additional deposit opportunity with attractive interest rate and credit facility
to customers will be able to survive and make profits in future. So to sustain the reputation of any
bank, customers’ contentment will have to be increased. Customer service is directly related with
general banking activities and credit facilities of any bank. That is why this report has made an
endeavor to inform the management of AIBL of their existing General Banking activities and
Credit facilities are satisfactory or not and recommend thereby if necessary.
1.2 Origin of the Report
Internship is the vital and basic requirement of the entire business study program in all of business
study institutes. Because it is the practical implication of the theoretical knowledge which we have
taught in our business subjects to gain further knowledge and experience about professional
business activities. It equips us with the necessary knowledge skill and values of business culture
which are basic requirement of the business professional and which also can helps to
professionally.
As a part of the Bachelor of Business Administration (BBA) course requirement, it is a 12 weeks
long internship program to introduce the students with the real-life business administration. I took
the internship with AL-Arafah Islami Bank Limited which stands a prominent name in banking
industry.
Topic of the internship report is general banking activities of AIBL. Before assigning the topic my
supervisor and I discussed about the topic. And with her suggestion I decided to prepare an
internship report on this topic. From the 14th July 2019, I have joined in AL-Arafah Islami Bank
Limited at Laldigir Par branch, which is situated between the Laldigir Par .
Being an intern, the main challenge was to translate the theoretical concepts into real life
experience. The 90 days of internship program and the study have following purpose:
▪ To get organize detail knowledge on the job responsibility.
▪ To compare the real scenario with the lessons learned at Metropolitan University.
▪ To experience the real business world.
▪ To fulfill the requirement of BBA program.
This report originated as an academic requirement of BBA Program of Metropolitan University
(MU). After completion of the program period a student must submit the report on the assigned
topic to the department.

2
1.3 Objective of the Report
The public sector as well as the private sector bank has undergone a sea-change over the years.
The change is more evident in the case of public sector Bank that is forced to match steps with
private sector Bank to cope up with the emerging competition. This has meant a total attitudinal
change for the employees. The main function of the bank starts from the general banking section.
So, employees of the GB section must be efficient enough to manage every situation arise in the
GB section. This has not been simple and has put new pressures and realities in front of the bank
employees iced with a huge pile of inconsistencies. Bank Officers from GB section have perhaps
felt the maximum heat. On one side they are expected to monitor administer and manage the
clerical staff and on the other hand to be the spokesperson of the management. This paradox in the
changed circumstances plus the challenge to counter their own problems has put them in an
unenviable position. This research study was undertaken with the following two objectives:
(a) Broad Objective
▪ To complete the internship program and submit a report. As per requirement of BBA
program of Metropolitan University Bangladesh, one student needs to work in a
business organization for three months to acquire practical knowledge about actual
Business operation.
▪ To draw out the whole picture of General Banking of Al-Arafah Islami Bank Limited
(b) Specific Objective
▪ To present an overview of AIBL.
▪ To know about the operational activities of AIBL, those are based on Islami Shariah.
▪ To gain practical idea about General banking system of AIBL.
▪ To analyze total procedure of AIBL in general banking.
▪ To suggest some possible recommendations to overcome the problems for the smooth
operation and improvement of the bank.
1.4 Scope of the Report
The study report is prepared in term of the three months of internship program. I got the
opportunity to work as an intern in Al-Arafah Islami Bank Limited at amberkhana branch. So I
decided to make an internship report about “General Banking Activities of AIBL”. But the report
is prepared based only Laldigir Par branch’s general banking activities.
1.5 Significance of the Report
Internship report is an important part requirement of BBA program of Metropolitan University.
As the parties, education institution and organization sustainability benefit from such program.
Recognizing the importance of practical experience, Metropolitan University has introduced a
three months practical exposure as a part of the curriculum of BBA program. Internship program
is the significant idea of learning, which gives us clear view of corporate operation. And it may
also give us the real corporate atmosphere for work before we get introduce to the real job.

3
1.6 Limitations of the Report
On the way of my study in Al-Arafah Islami Bank Limited, I faced the following problems, which
may be termed as the limitations of the study. The major limitations of this study are given as
follows:
▪ There were some restrictions to have access to the information confidential by concern
authority.
▪ The report is conducted within a very short time frame.
▪ Only Laldigir Par branch considered to analyze the GB activities.
▪ Sufficient records, publications regarding customer service were not available as per
requirement.
▪ Three-month is not sufficient time to gain practical knowledge and prepare a report.
▪ The employees of the bank are so much busy so they cannot provide me to give
information.

4
 CHAPTER TWO
OVERVIEW OF BANKING
HISTORY

5
2.1 History of World Banking
The history of banking refers to the development of banks and banking throughout history, with
banking defined by contemporary sources as an organization which provides facilities for
acceptance of deposits and provision of loans.
The history begins with the first prototype banks of merchants of world, which made grain loans
to farmers and traders who carried goods between cities. This began around 2000 BC in Assyria
and Babylonia. Later, in ancient Greece and during the Roman Empire, lenders based in temples
made loans and added two important innovations: they accepted deposits and changed money.
Archaeology from this period in ancient China and India also shows evidence of money lending
activity.
Many histories position the crucial historical development of a banking system to medieval and
Renaissance Italy and particularly the affluent cities of Florence, Venice and Genoa. The Bardi
and Peruzzi Families dominated banking in 14th century Florence, establishing branches in many
other parts of Europe. The most famous Italian bank was the Medici bank, established by Giovanni
Medici in 1397. The oldest bank still in existence is Banca Monte dei Paschi di Siena,
headquartered in Siena, Italy, which has been operating continuously since 1472.
The development of banking spread from northern Italy throughout the Holy Roman Empire, and
in the 15th and 16th century to northern Europe. This was followed by a number of important
innovations that took place in Amsterdam during the Dutch Republic in the 17th century, and in
London in the 18th century. During the 20th century, developments in telecommunications and
computing caused major changes to banks' operations and let banks dramatically increase in size
and geographic spread. The financial crisis of 2007–2008 caused many bank failures, including
some of the world's largest banks, and provoked much debate about bank regulation.
2.2 History of Banking Industry in Bangladesh
After independence the Government of Peoples Republic of Bangladesh was formally to cover the
charge of the administration of the territory now constitute Bangladesh. In an attempt to
rehabilitate the war-devastated banking of Bangladesh, the government promulgated a law called
Bangladesh Bank (temporary) Order, 1971 (Acting President’s Order No.2 of 1971). By this Order,
the State Bank of Pakistan was declared to be deemed as Bangladesh Bank and offices, branches
and assets of said State Bank was declared to be deemed as offices, branches and assets of
Bangladesh Bank. On that date there existed 14 scheduled banks with about 3042 branches all over
the country.
2.3 Meaning of Bank
Banks are financial intermediaries that collect money from surplus-spending individual and
institutions, and loan this fund to the deficit spending individuals and institution. On the other, a
financial intermediary that offers the widest range of financial services-especially credit, savings,
and payment services- and performs the widest range of financial functions of any business firm
in the economy.

6
According to SR Seyers, "A bank is a financial intermediary, deals in loans and debts”.
Finally, a bank is any offering deposit subject to withdrawal on demand and making loans
of a commercial or business nature.
2.4 Evaluation of Bank or Banking
Banking began with the first prototype banks of merchants of the ancient world, which made grain
loans to farmers and traders who carried goods between cities. This began around 2000 BC in
Assyria and Babylonia. Later, in ancient Greece and during the Roman Empire, lenders based in
temples made loans and added two important innovations: they accepted deposits and changed
money. Archaeology from this period in ancient China and India also shows evidence of money
lending activity.
The origins of modern banking can be traced to medieval and early Renaissance Italy, to the rich
cities in the north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi 3families
dominated banking in 14th-century Florence, establishing branches in many other parts of Europe.
One of the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici
in 1397. The earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was
founded in 1407 at Genoa, Italy.
Modern banking practices, including fractional reserve banking and the issue of banknotes,
emerged in the 17th and 18th centuries. Merchants started to store their gold with the goldsmiths
of London, who possessed private vaults, and charged a fee for that service. In exchange for each
deposit of precious metal, the goldsmiths issued receipts certifying the quantity and purity of the
metal they held as a bailee; these receipts could not be assigned; only the original depositor could
collect the stored goods.
Gradually the goldsmiths began to lend the money out on behalf of the depositor, which led to the
development of modern banking practices; promissory notes (which evolved into banknotes) were
issued for money deposited as a loan to the goldsmith. The goldsmith paid interest on these
deposits. Since the promissory notes were payable on demand, and the loans to the goldsmith's
customers were repayable over a longer time period, this was an early form of fractional reserve
banking. The promissory notes developed into an assignable instrument which could circulate as
a safe and convenient form of money backed by the goldsmith's promise to pay, allowing
goldsmiths to advance loans with little risk of default. Thus, the goldsmiths of London became the
forerunners of banking by creating new money based on credit.
The Bank of England was the first to begin the permanent issue of banknotes, in 1695. The Royal
Bank of Scotland established the first overdraft facility in 1728. By the beginning of the 19th
century a bankers' clearing house was established in London to allow multiple banks to clear
transactions. The Rothschilds pioneered international finance on a large scale, financing the
purchase of the Suez canal for the British government.

7
2.5 Brief Overview of Banks in Bangladesh
There exist various types of Banks in Bangladesh. Each bank has its own principles and polices.
They can be classified among various aspects. Functionally they are:-

❖ Central Banks: It is the top controlling bank of a country. It functions as controller of credit,
issuing currency and notes. Bangladesh Bank is the central Bank.
❖ Commercial banks: The bank which essentially meant for providing short term credit to trade
and industry is known commercial bank. It includes:
o Nationalized commercial: Owned by the government. Example: Sonali Bank.
o Private commercial: Owned by individual or groups apart from government. Example:
BRAC, DBBL
o Foreign commercial: Owned by foreign individual or groups. Example: HSBC, Standard
Chartered
o Islamic Commercial: Operated by the principles of Islamic Shariah. Example: SJIBL,
SIBL, IBBL
o Specialized Development Bank: These banks concentrate on financing specialized
economic and social sectors (small and cottage industries, landless people etc.) Example:
BASIC, BKB, PROGOTI
2.6 Concepts of Islamic Banking
Islamic Banking refers to that system of banking activities related to the principles of Shariah
(Islamic rulings). The practical application of Islamic Banking is related to the development of
Islamic economies. The purpose of the Islamic Banking is same as the conventional banking
system except the operation according to the rules of Shariah known as Fiqh al-Muamalat (Islamic
rules on transactions). The origin of Islamic Banking can be traced back to the very birth of Islam
when our Prophet himself acted as an agent for his wife’s trading operations. Islamic partnerships
(Mudarabah) dominated the business world for centuries. So the concept of Islamic Banking is not
new. Rather, it is coming from centuries ago. The principle source of the Shariah is the Quran
followed by the recorded sayings and actions of Prophet Muhammad (PBUH) - the Hadith. Islamic

8
Banking deals with interest free financial structure. As Islamic economy is a complete system of
social and economic justice, it deals with property rights, the incentive system, and the allocation
of resources, economic freedom, decision making and the proper role of government. According
to the Quran “God has permitted trade, but forbidden riba (interest)” (2:275). Again, according to
the Quran ……”Allah will destroy Riba (usuary) and will give increase for Sadaqaat and Allah
likes not the disbelievers, sinners…..”. So, it is only the fixed, predetermined, return on savings or
transactions that is forbidden, not an uncertain rate of return, such as the making of profit.
2.7 Objectives of Islamic Banking
An Islamic Bank is a financial institution that operates with the objective to implement and
materialize the economic and financial principles of Islam in the banking area.
The main objectives of Islamic Banking are:
▪ To conduct interest – free banking.
▪ To establish participatory banking instead of banking on debtor – creditor relationship.
▪ To invest through different modes permitted under Islamic Shariah.
▪ To accept deposits on profit – loss sharing basis.
▪ To establish welfare oriented banking system.
▪ To extend co-operation to the poor, the helpless and the low – income group for their
economic enlistment.
▪ To play a vital role in human development and employment generation.
▪ To contribute towards balanced growth and development of the country through investment
operations particularly in the less developed areas.
▪ To contribute in achieving the ultimate goal of Islamic economic system.
2.8 Characteristics / Features of a Bank
▪ Dealing in Money: Bank is a financial institution which deals with other people's money
i.e. money given by depositors.
▪ Individual / Firm / Company: A bank may be a person, firm or a company. A banking
company means a company which is in the business of banking.
▪ Acceptance of Deposit: A bank accepts money from the people in the form of deposits
which are usually repayable on demand or after the expiry of a fixed period. It gives safety
to the deposits of its customers. It also acts as a custodian of funds of its customers.
▪ Giving Advances: A bank lends out money in the form of loans to those who require it for
different purposes.
▪ Payment and Withdrawal: A bank provides easy payment and withdrawal facility to its
customers in the form of cheques and drafts; it also brings bank money in circulation. This
money is in the form of cheques, drafts, etc.
▪ Agency and Utility Services: A bank provides various banking facilities to its customers.
They include general utility services and agency services.
▪ Profit and Service Orientation: A bank is a profit seeking institution having service oriented
approach.

9
 ▪ Ever increasing Functions: Banking is an evolutionary concept. There is continuous
expansion and diversification as regards the functions, services and activities of a bank.
▪ Connecting Link: A bank acts as a connecting link between borrowers and lenders of
money. Banks collect money from those who have surplus money and give the same to
those who are in need of money.
▪ Banking Business: A bank's main activity should be to do business of banking which
should not be subsidiary to any other.
2.9 Functions of Bank
The functions of Bank can be categorized into the following categories:

Functions of Bank

General Functions Agency Services General Utility

• Receiving deposits. • Collection & • Money transfer.

• Giving loan. payment of money. • Supplying modern
• Investment. • Purchase and sale technology
• Creating medium of shares and services.
of exchange. securities. • Extra time
• Creation of loan • Function as trustee. services.
deposit. • Work as • Supplying
• Discounting of underwriter. information.
bills. • Representative of • Advising.
• Helping central central bank. • Issue of solvency
bank. • Safe custody of certificate.
• Assistance in money and wealth.
foreign exchange

Figure: Functions of Bank

2.10 Type of the Bank

My discussion of the types of banks, they can be classified into many types on the basis of their
functions, ownership, reducible etc. They are:
▪ Central Bank: The Central Bank is the organization of Government. It undertakes the major
financial operation of Government. Central Bank is the supreme monetary institution which is
the apex of the monetary and banking structure of a country.

10
▪ Commercial Bank: Commercial Bank is an institution which deals with money and credit. It
accepts deposits from the public, makes the fund available to those who need them, and helps
in the remittance of money from one place to another.
According to Professor Roger, “The bank which deals with money and money’s worth a view
to earning profit is known as Commercial Bank”
Commercial Bank is basically a business organization that accepts money, makes loans and
advances and thus other ancillary business.
▪ Industrial Banks: These banks are also termed as investment banks. They meet the financial
needs of the industries, generally medium term and long term. They play a significant role in
the development of industries in the country. Examples of such kinds of banks may be BSRS
- Bangladesh Shilpo Rin Sangstha.
▪ Agricultural Banks: These banks meet the financial needs in the agriculture sector of a country.
Examples of this kind can be: Grameen Bank, Bangladesh Krishi Bank. The agriculture banks
fall in the leading of specialized bank.
2.11 Principles of a Bank
Bank follows some principles in order to ensure smooth running of banking services. Among them
the key principles are:-
▪ Principles of liquidity: To meet the day to day needs bank keep certain amount of money in
their vaults, it's known as the principles of liquidity
▪ Principles of profitability: Like all kinds of business organization, the main motive of bank is
to earn profit
▪ Principles of safety: This principle states that, bank will not provide loan to those sectors from
which they can't be able to return back the loaned amount.
▪ Principles of solvency: Bank must be in solvent position
▪ Principles of economy: Bank will do almost all its work by the least cost method
▪ Principles of secrecy: Bank will not expose its clients information to other
▪ Principles of location: Bank will do business on those particulars areas, where they can run
their business easily
▪ Principles of modernization: To cope with the modern technology, bank will adopt various
modern technologies.
2.12 List of Bank in Bangladesh:
▪ Nationalized Commercial Banks (NCBs)
1. Sonali Bank Ltd.
2. Rupali Bank Ltd.
3. Agrani Bank Ltd.
4. Janata Bank Ltd.
▪ Local Private Commercial Banks (PCBs)
1. Prime Bank Ltd.
2. Standard Bank Ltd.
3. National Bank Ltd.

11
 4. The City Bank Ltd.
5. United Commercial Bank Ltd.
6. Arab Bangladesh Bank Ltd.
7. IFIC Bank Ltd.
8. Islami bank Bangladesh Ltd.
9. Al Baraka Bank Bangladesh Ltd.
10. Eastern Bank Ltd.
11. National Credit & Commerce Bank Ltd.
12. South East Bank Ltd.
13. Dhaka Bank Ltd.
14. Pubali Bank Ltd.
15. Al-Arafah Islami Bank Ltd.
16. Social Investment Bank Ltd.
17. Dutch-Bangla Bank Ltd.
18. Mercantile Bank Ltd.
19. One Bank Ltd.
20. EXIM Bank Ltd.
21. Bangladesh Commerce Bank Ltd.
22. Mutual Trust Bank Ltd.
23. First Security Bank Ltd.
24. The Premier Bank Ltd.
25. Bank Asia Ltd.
26. Jamuna Bank Ltd.
27. The Trust Bank Ltd.
28. Shah Jalal Bank Limited (Based on Islamic Shariah) Ltd.
29. NRBC Bank Ltd.
30. Brack Bank Ltd.
31. Union Bank Ltd.
32. Uttara Bank Ltd.
33. Modhumoti Bank Ltd.
▪ Islami Banks
1. Al-Arafah Islami Bank Limited
2. Export Import Bank of Bangladesh Limited (EXIM Bank)
3. First Security Islami Bank Limited
4. ICB Islamic Bank Limited
5. Islami Bank Bangladesh Limited
6. Shahjalal Islami Bank Limited
7. Social Islami Bank Limited
8. Union Bank Limited
▪ Foreign Banks
1. American Express Bank Ltd.
2. Standard Chartered Grindlays Bank
3. Habib Bank Ltd

12
 4. State Bank Of India Ltd.
5. Credit Agricole Indosuez (The Bank) Ltd
6. National Bank of Pakistan Ltd.
7. Muslim Commercial Bank Ltd.
8. City Bank NA Ltd.
9. Hanvit Bank Ltd.
10. HSBC Ltd.
11. Standard Chartered Bank Ltd.
12. Commercial Bank of Ceylon
▪ Development Banks
1. Bangladesh Krishi Bank Ltd.
2. Rajshahi Krishi Unnayan Bank Ltd.
3. Bangladesh Development Bank Corporation Ltd.
4. Bank of Small Industries & Commerce Bangladesh Ltd.

13
 CHAPTER THREE
OVERVIEW OF AL-
ARAFAH ISLAMI BANK

14
3.1 Overview of the Al-Arafah Islami Bank Limited
The Al-Arafah Islami Bank Limited is a sharia compliant bank in Bangladesh founded on 27
September 1995, under Companies Act.1994. Bangladesh Bank, the central bank of Bangladesh,
issued banking license on 27 September 1995 under Banking Companies Act.1991. The Head
Office of the Al-Arafah Islami Bank Limited is located at Motijheel, Dhaka; one of the fast
growing commercial and business areas of Dhaka city. Bangladesh economy has been
experiencing a rapid growth since the '90s. Industrial and agricultural development, international
trade, inflow of expatriate Bangladeshi workers' remittance, local and foreign investments in
construction, communication, power, food processing and service enterprises ushered in an era of
economic activities. The Bank was incorporated as a public limited company under the Companies
Act. 1994. The Bank started its commercial operation on 27 September 1995 with an authorized
capital of Tk. 1,000 million and paid up capital of Tk. 222 million. The Bank has 80 branches and
a wide network of correspondents all over the world. The Bank has launched Online Banking
services (i-Banking), joined a countrywide shared ATM network and has introduced a co-branded
credit card. A process is also underway to provide e-business facility to the bank's client through
Online and Home banking solutions.
3.2 Organizational Overview of AIBL, Laldigir Par branch
Al-Arafah Islami Bank Limited Laldigir Par Branch started on 29th December, 2009. It was
originally situated Laldigir Par, Sylhet which was very visible to people entering Sylhet and also
it had a lot of potential customers surrounding that area. Any other information about history was
unobtainable as all the employees have changed since then. Al-Arafah Islami Bank Limited is the
preferred choice in banking for friendly and personalized services, cutting edge technology,
tailored solutions for business needs, global reach in trade and commerce and high yield on
investments. The currently 2nd Manager and Principal Officer Mr. Khabab Chowdhury tried heart
and soul to maximize the profit as well as wealth. Other officers are also very much cordial to
provide customer service and branch development.
3.3 Vision of the Al-Arafah Islami Bank Limited
The bank has clear vision towards its ultimate destiny-to be the best amongst the top financial
institutions
3.4 Mission of the Al-Arafah Islami Bank Limited
The mission of the bank is-
▪ To be most caring and customer friendly provider of financial service, creating opportunities
for more people in more places.
▪ To ensure stability and sound growth whilst enhancing the value of shareholders investments.
▪ To aggressively adopt technology at all levels of operations and to improve efficiency and
reduce cost per transaction.
▪ To ensure a high level of transparency and ethical standards in all business transected by the
bank.

15
▪ To provide congenial atmosphere which will attract competent work force who will be proud
and eager to work for the bank.
▪ To be socially responsible and strive to uplift the equality of the life by making effective
contribution for social development.
3.5 Strategic Objectives of AIBL
▪ Their objectives are to conduct transparent and high-quality business operation based on
market mechanism within the legal and social framework.
▪ Their greatest concerns are to provide their customers continually efficient, innovative and
high-quality products with excellent delivery system and slogan with “Service First”
▪ Build a strong deposit base.
▪ Promote the well-being of the employees and raise their morale.
▪ Strengthen corporate identity and values.
▪ Fulfillment of their responsibility to the government by paying taxes and abiding by other rules.
▪ Bring the entire system under a very advanced IT platform.
▪ Enhancing savings tendency of the people by offering attractive and lucrative new savings
scheme.
▪ Financing the foreign trade of the country both Export and Import.
▪ Enhancing the mobilization of savings both from urban and rural area.
3.6 Values of Al-Arafah Islami Bank Limited
▪ Service first
▪ Easier banking
▪ Better relationship
▪ Assured confidentiality
▪ Good corporate governance
▪ Corporate citizenships

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3.7 Organizational Structure of AIBL

3.8 Board of Directors

Name Position
Mr. Alhajj Abdus Samad Chairman
Mr. Alhajj Abdus Salam Vice Chairman
Mr. Alhajj Badiur Rahman Director
Mr Alhajj Md. Harun-ar-Rashid Khan Director
Mr. Alhajj Nazmul Ahsan Khaled Director
Mrs. Alhajj Abdul Malek Mollah Director
Mr. Alhajj Ahamedul Haque Director
Mr. Alhajj Abu Naser Mohammad Yeahea Director
Mr. Alhajj Md. Liakat Ali Chowdhury Director
Mr. Alhajj Niaz Ahmed Director
Mr. Janab Md. Amir Uddin PPM Independent Director
Mr. Janab Khalid Rahman Independent Director
Mr. Janab Md Habibur Rahman Managing Director

17
3.9 Value Added Statemnet Of AIBL- 2019

Distribution of Value Addition

3.10 Economic Value Added Statement

18
3.11 Market Value Added Statement

3.12 Market Value Addition

❖ Total value of share outstanding : 994,306,428(946,958,503)*

❖ Market value per share : BDT 15.90 (14.70)*
Previous Year’s figures in brackets
3.13 Pattern of Shareholding
➢ Shares held by Directors (Status of 31st December, 2018)

19
3.14 Corporate Information
Name of the Company: The Al-Arafah Islami Bank Limited
Registered Name of the Company: The Al-Arafah Islami Bank Limited
Registered Office
Al-Arafah Islami Bank Limited.
36, Dilkusha(6-9 Floor) C/A, Dhaka-1000, Bangladesh
PABX : +880-2-7123255-7, 9568007, 9569353
Fax : + 880-2-9569351
SWIFT : ALARBDDH
Category: Commercial
Type: Private
Origin: Local
E-mail : info@al-arafahbank.com
Website : www.al-arafahbank.com
Corporate Website: www.al-arafahbank.com
3.15 Departments of Al-Arafah Islami Bank Limited
➢ Human Resources Division
➢ Personal banking Division
➢ Treasury Division
➢ Information Technology Division
➢ Credit Division
➢ Operation Division
➢ Finance & Accounts Division
➢ Audit & Risk Management Division
3.16 Products of the Al-Arafah Islami Bank Limited
▪ Fixed Deposit: Our Fixed Deposit (FDR) is meant for those investors who want to deposit a
lump sum of money for a fixed time period; say for a minimum period of 30 days to 1 year and
above, thereby earning a higher rate of interest in return. The prevailing rates of interest are
shown below:

20
▪ Current Account: Our Current Account is probably the most useful Bank Account you will
ever have for daily transaction. It is a non-interest bearing cheque account. It will save you the
hassle of carrying around cash every month.
▪ Savings Account: We offer competitive interest rate (6.00% P.a) on our Savings Account. In
addition, all account holders will get Debit Card and ATM facility for 24 hour banking
convenience.
▪ Double Benefit Scheme: Under this scheme, any deposit becomes double after 6 years. It
accepts deposit in multiples of Tk. 10,000. The instrument is not transferable and renewable.
In case of premature encashment after 3 months, benefits may be allowed on the deposit
amount at prevailing savings rate. Loan facility may be allowed up to 80% of deposit against
lien/pledge on such instrument at bank's prescribed rates.

▪ Monthly Income Scheme: Your savings are precious! Let your investment generate a regular
monthly income for you. Deposit a certain amount at the opening and earn monthly profit till
the tenure completes. You will get back principal amount on maturity.
▪ Monthly Savings Scheme: A regular savings pays off when you really need it. Save small
amount in your account each month and let your savings grow with time through our Monthly
Savings Scheme.
▪ Education Savings Scheme: Do not compromise with the future of your children. Why not
start saving from now to meet the educational expense of your children in future? This scheme
has been designed to secure future educational expenses of your children.
▪ Personal Loan: Our Personal Loan is any purpose loan for you. The purpose could be anything
valid from buying household appliances to emergency medical needs. Some of these could be:
Purchase of Electronic goods, House/Office Renovation, Marriages in the family, Advance
Rent Payments, Travel Expenses and Payment of Taxes etc. This product is best suited for
salaried executives who are working as confirmed employees in established organizations.
▪ Consumer Credit Scheme: We have introduced Consumer Credit Scheme to extend credit
facilities to limited and fixed income group to improve their standard of living. The loan is
repayable in easy equal monthly installments (EMI) stretching from 12 to 60 installments.
▪ Housing Loan: Realizing the importance of having one's own place to live, we have
introduced Housing Loan at a competitive interest rate. We provide this loan for both
residential and commercial purposes.
▪ Small & Medium Entrepreneur (SME) Finance: Bangladesh, as a developing country, has
been trying for its overall economic growth. The development of small and medium enterprises
would be the key element in this regard. Recognizing this fact, we have strongly started to
finance SMEs. Our SME products are- Project Finance, Working Capital Finance, Lease
Finance/Hire Purchase, Work Order Finance, etc.
▪ Student Credit Programmed: We are proud to introduce a credit scheme which is being first
of its kind whereby the meritorious students in the country shall enjoy credit facility in each
month to defray educational expenses. The loan is to be disbursed in a lump sum amount or as
monthly installments basis where necessary. Parents/ guardian may apply along with estimate
21
 of education expense in a prescribed form to any branches of the Bank duly recommended by
the Head of the Department or Head of the Education Institution.
3.17 Services of AIBL
❖ Islamic Banking Operation
Islamic Banking system has now-a-days becomes a reality all over the world. It is widely
accepted and liked not only by the Muslims but also Non Muslims.
You can get Islamic Banking Services from any Branches of the Bank through “Islamic
Banking Help Desk” as exist at every conventional Branch.
3.18 Deposit Products of Islamic Banking
✓ Al-Wadiah Current Account
✓ Mudaraba Savings Account (MSA)
✓ Mudaraba Term Deposit Receipt (MTDR)
✓ Mudaraba Special Notice Deposit Account (MSNDA)
✓ Mudaraba Monthly Savings Scheme (MMSS)
✓ Mudaraba Monthly Income Scheme (MMIS)
✓ Mudaraba Education Savings Scheme (MESS)
✓ Mudaraba Special Deposit Scheme (MSDS)
✓ Mudaraba Double Benefit Scheme (MDBS)
3.19 Others Product of AIBL
➢ Evening Banking Service
A unique service of Al-Arafah Islami Bank Limited for receiving cash and documents beyond
transaction hours till 8 o' clock in the evening. This service is attractive for those like shopkeepers
who accumulate cash as sales proceeds in the afternoon when counters of Bank Branches usually
remain closed. The service is available at selective branches of our Bank.
➢ Remittance Service
Our Remittance Payment procedure is very safe, simple and fast. The Bank has signed a good
number of long term deals with a group of well-connected remittance partners across the globe
such as Money Gram, Dolex and Xpress Money Services etc. We have developed our own
remittance distribution .
➢ SME Service Centre
In order to facilitate the investors of Small and Medium Enterprise, Al-Arafah Islami Bank has
opened several SME Service Centers at different locations – Banani SME Centre – Plot No. 76/A
(1st Floor), Road No. 11, Banani, Dhaka. Bangla Bazar SME Centre – 42, Bangla Bazar, Ward
No. 73, Sutrapur, Shadarghat, Dhaka. Kawran Bazar SME Centre – Progoti RPR Centre, 20-21,
Kawran Bazar, Dhaka. Tel; 8189404. Mohammadpur SME Centre – 1/4, Block E, Shat Masjit
Road, Mohammadpur Bus Stand, Ward No. 46, Dhaka. Tel: 9101929.

22
 ➢ SMS Banking Service
Check your Bank Account Balance, while you are stuck in traffic. Stop Cheque Payment from the
airport. Request for your Account Statement while watching TV. Check Last Three Transactions
of your account at the restaurant. All these and more are possible through our SMS Banking
Service.
➢ VISA card
This card can be used to withdraw cash in the local currency from over 1 million VISA ATMs and
shop at over 27 million merchant establishments accepting VISA Flag cards from the country they
are traveling to. The card is sold from Al-Arafah Islami Bank branches and Card Division.
➢ Debit Card
We are offering VISA Debit Card Service as well as own Automated Teller Machine (ATM)
facility to electronically debit money from your account. In addition to our own ATM Booth, you
can also use VISA Debit Card in other Bank ATM where VISA Card is accepted.
3.20 International Services
Advance Payment Bonds for infrastructure projects in Bangladesh, participating in tenders The
International Division is looking after Correspondent Banking Relationships, Treasury Back
Office and International Trade Settlement. In order to smooth global operation of international
business we have correspondent banking relationship with 430 foreign banks around the globe and
maintain 19 Nostro accounts in 9 currencies to service our customers. Bank is providing the facility
of Letters of Credit, handling of Import Bills, issue of Shipping Guarantees, acceptance of Bills.
Advising of Export Letters of Credit, Confirmation of Letters of Credit, and Assistance in
preparation of Export documents, Negotiation of Letters of Credit.
3.21 Policy of Small & Medium Enterprise (SME) Scheme of AIBL
Bangladesh is a high densely populated and one of the poorest countries of the world. Per capita
income of our country is $ 385 (app). Job opportunity is very scanty. Unemployment rate is
approximately 45% and population below poverty line is 36%. So, it is a prime issue for the nation
to generate income through creation of job opportunity & employment. It is not easy to create job
opportunity at large scale. As a financial institution, we can increase self-employment through
financial support.
There are many small and medium entrepreneurs in our country who have innovative ideas, spirit
and potentiality to do something productive for local consumers as well as export abroad. The Al-
Arafah Islami Bank Limited is committed to play positive role in the socio-economic development
of the country. So, we can introduce Small & Medium Enterprise (SME) Credit Scheme to
contribute our effort in the socio-economic development of our country
The Major features of the Policy of SME Credit Scheme will be as follows
➢ To provide credit facilities to the small and medium size entrepreneurs located in Urban &
Sub-urban areas and easily accessible by our Branches.

23
➢ To flow credit for creation of employment and generation of income on a sustainable basis
through development of small & medium enterprises.
➢ To assist potential entrepreneurs to improve their living standard.
➢ To reduce dependence on money lenders.
➢ To make self-reliant small and medium enterprises.
➢ To develop savings habit and making social contact with banking facilities.

24
 CHAPTER FOUR
GENERAL BANKING
ACTIVITIES OF AIBL

25
4.1 Description of tasks I have completed During Internship Period
General banking provides the foundation of banker customer relationship through opening
account. This is the most busy department and the daily transaction of concerned to the customers
for drawing or depository money, Selling of instruments, collection of their instruments providing
other additional services to them and keep customer section busy. Officers of this dept should
possess the required behaviors for optimum satisfaction of the customers. The Bank provides
different type of accounts and special type of savings scheme under general Banking.
This practical orientation is necessary for the development and preparation of a person in the job
world. The things that I have learned at Al-Arafah Islami Bank are:
➢ Meaning of responsibility
➢ Necessity of commitment
➢ Punctuality and regularity is very important
➢ Ability to interact with different sorts of people
Al-Arafah Islami Bank has a prepared internship program for internees. Although it is rarely
followed, it served as a guide for me. I was rotated across all 4 different departments in the past 3
months.
4.2 General Banking Activities of AIBL (Laldigir Par Branch)
General banking department performs the core functions of bank, operates day-to-day transactions
of banking operation. Every day it receives deposits from customers and meets their demand for
cash. It opens new accounts, remits customer’s money from one place to another through issuing
bank draft, pay order, telegraphic transfer, collects all bill like Local cheque collection, Inward bill
collection and outward bill collection for customers. Since bank is bound to provide these services
every day. General banking is also known as retail banking. General banking department performs
the majority functions of a bank. It is the core department of any bank. The principle of profit/loss
distributing in mudaraba is called loss bearing and profit shearing. In this mode client is called
Saheb-Al-Maal and bank called Mudarib. Under this agreement profit distribution under agreed
ratio and loss (if any) will be bear by Saheb Al Mall. The bank distributes minimum 65% of its
investment -income earned through deployment of Mudaraba Deposits among the mudaraba
depositors.
The General Banking (GB) department of Ambarkhana Branch composed of:-
➢ Account opening, Customer care & help desk
➢ Clearing & Bills section
➢ Local & Foreign Remittance section
➢ Accounts section
➢ Cash section
➢ Locker Service

26
4.3 Account opening, Customer care & Help desk
To establish a banker and customer relationship account opening is the first step. Opening of an
account binds the Banker and customer into contractual relationship. But selection of customer for
opening an account is very crucial for a Bank. Indeed, fraud and forgery of all kinds start by
opening account. So, the Bank takes extremely cautious measure in its selection of customers. The
following works are done by this section-
4.4 Opening Current Deposit Account
If client wants to open Current Deposit Account, then I tell them what papers or document they
need for this account. I helped to fulfill the following requirement of
Current Deposit Account______
➢ Filled up application form stating about the name and address of the firm.
➢ Trade License.
➢ Two copies of photographs.
➢ Endorsement of an a/c holder of the same branch. (For partnership companies).
➢ Undertaking / declaration about the partnership is taken by the bank in a white paper (for
proprietorship firm)
Then need client’s personal information_______
Name
Father’s Name
Mother’s Name
Husband’s/Wife’s Name
Date of Birth
Sex
Occupation
National ID Number
Present and Permanent Address
Mandate in Writing
Declaration of Nominee
Communication/ mobile phone
Specimen Signature

27
General Documentation requires for opening (ACD)
a) For an Individual Customer
• Copy the passport, if available or Employer’s Certificate or Commissioner’s Certificate or Letter
of Introduction by a person accepted to the Bank.
• TIN Certificate, if applicable.
• Two recent passport size photographs duly attested by the Introducer.
b) For Sole Proprietorship
• Copy of Trade License.
• Two recent passport size photographs of the proprietor/Signatory duly attested by the Introducer.
• Copy of the passport the proprietor/Signatory, if available Commissioner’s/ Chairman’s
Certificate or Letter of Introduction by a person accepted to the Bank.
• TIN certificate.
c) For Partnership
• Copy of Partnership Deed of the Firm.
• List of Partners with their address and phone number.
• Copy of Trade License.
• Extract of Resolution of the Partners of the Firm for opening the account and authorization for
its operation duly certified by the managing Partner of the Firm.
• For Registered Partnership, Certificate of Registration of the Firm along with duly certified copy
of the Partnership Deed.
• Two recent passport size photographs of each Partner/Signatory duly attested by the Introducer.
• Copy of Passport of each Partner/Signatory, if available or Commissioner’s/ Chairman’s
Certificate or Letter of Introduction by a person acceptable to the Bank.
• TIN Certificate.
d) Private & Public Limited Company
• Certified true copy of the Memorandum and Article Association of the Company.
• Certified true copy of Certificate of Incorporation of the Company.
• Certificate true copy of Certificate of Commencement of Business of the Company in case of
Public Limited Company.
• Latest list of Directors with address and phone number along with Form.

28
• Extracts of duly adopted Resolution of the Board of Directors of the Company for opening the
Account and authorization for its operation duly certified by the Chairman/Managing Director of
the Company.
• Copy of Trade License.
• Two recent size photographs of each signatory duly attested by the introducer.
• Copy of the passport of each signatory, if available or Commissioner’s/ Chairman’s
• Certificate or Letter of Introduction by a person acceptable to the Bank.
• TIN Certificate.
4.5 Opening Saving Deposit Account
Then if client wants to open Saving Deposit Account, then I tells them what papers or document
they need for this account and I also helped them by knowing saving rate which is 6 percent.
I helped to fulfill the following requirement of Saving Deposit Account______
Name
Father’s Name
Mother’s Name
Husband’s/Wife’s Name
Date of Birth
Gender
Occupation
National ID Number
Present and Permanent Address
Mandate in Writing
Declaration of Nominee
Communication/ mobile phone
Specimen Signature
Two copies of passport size photograph
Initial deposit of Tk. 500/1000

29
4.6 Opening Short term Deposit Account
Then if client wants to open Short term Deposit Account it’s also called Special Notice Deposit
(SND), and then I tell them what papers or document they need for this account. Short term Deposit
Account rates-----------
Special Notice Deposit (SND) A/C --Below Tk 1 (one) Crore: 6.00%
Special Notice Deposit (SND) A/C --Tk 1 Crore and above but below 25 Crore: 6.50%
Special Notice Deposit (SND) A/C --Tk 25 Crore and above but below 50 Crore: 7.50%
Special Notice Deposit (SND) A/C --Tk 50 Crore and above but below 100 Crore: 8.00%
Special Notice Deposit (SND) A/C --Tk 100 Crore and above: 11.00%
I helped to fulfill the following requirement of Short term Deposit Account___
Name
Father’s Name
Mother’s Name
Husband’s/Wife’s Name
Date of Birth
Gender
Occupation
National ID Number
Present and Permanent Address
Mandate in Writing
Declaration of Nominee
Communication/ mobile phone
Specimen Signature
Two copies of passport size photograph

30
4.7 Opening Fixed Deposit Account
Fixed Deposit Account forms are same as the account opening forms. Then if client wants to open
Fixed Deposit Account, then I tells them what papers or documents are needed for this account.
Then I let him know the interest rate of Fixed Deposit.

I helped to fulfill the following requirement of Fixed Deposit Account______

Name
Father’s Name
Mother’s Name
Husband’s/Wife’s Name
Date of Birth
Gender
Occupation
National ID Number
Present and Permanent Address
Mandate in Writing
Declaration of Nominee
Communication/ mobile phone
Specimen Signature
Two copies of passport size photograph

31
4.8 Monthly Saving Scheme
Then if client wants to open Monthly Saving Scheme, then I tell them what papers or document
they need for this account. I helped them by scheme rate.
Monthly Saving Scheme Rate :

The following Information are need of Monthly Saving Scheme ______

Name
Father’s Name
Mother’s Name
Husband’s/Wife’s Name
Date of Birth
Gender
Occupation
National ID Number
Present Address
Permanent Address
Mandate in Writing

32
 Declaration of Nominee
Communication/ mobile phone
Specimen Signature
Two copies of passport size photograph
Tax Identification Number
4.9 Bills & Clearing Section
As a service oriented organization, a bank has to perform some extra services on behalf of his
customer. The main function of this section is to collect instruments on behalf of his customers
through Bangladesh Bank clearing house. Outside Bank clearing (OBC), inter branch clearing
(IBC). And their also take transfer Electricity bills & Telephone bills. Here I did work for 10 days.
Upon the receipt of the instruments this section examines the followings
Whether the paying bank within Sylhet City
Whether the paying bank outside Sylhet
4.10 Data Entry and Work in Credit Department
In the credit section my job was to help the individuals who come to receive their loan from the
bank. There were various types of loan with various facilities. For taking loan there was one kind
of forms and for the others there was another kind of forms. I helped the customers to fill up those
forms. Except these I make data entry of those loan received. In this section I did work for 10 days
4.11 Foreign Remittance
As an intern I am so lucky because I got chance for work this section. It was totally software based
working system and Internet based working system. In this section I did work for 15 days. In this
section I did work with many different types of foreign remittances. When a client comes at first I
ask which remittance comes your. After that I want he’s/she’s Digit Number or Reference Number
or PIN Number. After that I enter the web address or Email; address. And I put the number and I
check all information and after that I click pay out. Money Gram, Xpres Money, Western Union.
4.12 Account Section
In this section I work for only 5 days. Because this very sensitive section of bank. If anyone makes
any mistake it will be harmful for bank and all people. This is the most confidential department of
a bank. Recording all kind of transaction of the branch, confirming their accuracy and preparing
statements are the main job of this dept. Now a day under computerized banking system, the job
of accounts dept. becomes very easy. Now the computer directly prepares the clean cash statement
and the supplement tarry Statements on party ledger vouchers. The account also manually doses
other works as for extra security. The function of the accounts dept. can be divided into two parts:
Daily Function, Periodical Function. Daily Functions Accounts Section:
Posting the a/c to a/c transfer transaction in transfer register,

33
 Preparation of supplementary statement
Computer posting of different transactions that occur in a day the account officer
Examines whether cash book has agreed or not.
4.13 Receiving Cheques for Collection
I worked in this department only one weak. In AIBL, cheques of its customers are received for
collection from other banks. In case of receiving cheques, following points should be checked very
carefully-
The cheques should not carry a date older than the receiving date for more than 6 months.
In that case it will be a ‘stale cheque’ and it will not be allowed for collection. Again the date of
the cheque should not be more than 1 day’s forward than the receiving date.
The amount in figures and words in both sides of the pay-in-slip should be same and it
should also be same with the amount mentioned in figures and words in the cheque.
The name mentioned in the cheque should be some in both sides of the pay-in-slip and it
should be the same with the name mentioned in the cheque.
The cheque must be crossed.
4.14 Issuing Cheque Book
Following procedures are maintained by AIBL, Local Office for issuing checkbook. And I worked
this department only 5 days.
Firstly the customer will fill up the check requisition form. The leaves of the checkbook under
issue are counted to ensure that all the leaves and the blank requisition slip are intact. The officer
writes A/C number and branch name on all the leaves of the checkbook. The name and the A/C
number of the customer are than entered in the checkbook register against the particular checkbook
series. Then the officer sightseer, checkbook, and requisition slip lastly the checkbook is handed
over to the customer after taking acknowledgement on requisition slip. A cover file containing the
requisition slip is effectively preserved as vouchers. If any defect is noticed by the ledger keeper,
he makes a remark to that effect on the requisition slip I worked in this department only one weak.
In AIBL, cheques of its customers are received for collection from other banks. In case of receiving
cheques, following points should be checked very carefully-
The cheques should not carry a date older than the receiving date for more than 6 months.
In that case it will be a ‘stale cheque’ and it will not be allowed for collection. Again the date of
the cheque should not be more than 1 day’s forward than the receiving date.
The amount in figures and words in both sides of the pay-in-slip should be same and it
should also be same with the amount mentioned in figures and words in the cheque.
The name mentioned in the cheque should be some in both sides of the pay-in-slip and it
should be the same with the name mentioned in the cheque.

34
 CHAPTER FIVE
AAPLICATION OF
KNOWLEDGE GAINED
DURING BBA PROGRAM

35
5. Application of Knowledge Gained During BBA Program to Accomplish Each Task
I am a student of Bachelor of Business Administration (BBA). This program contains 12terms
including internship. 1st to 11th terms deal with educational activities, and 12th term requires
internship.
As a business student, I learned many things from my BBA program; gained a variety of
knowledge through the class lectures, text books, assignment, presentation, viva, exams etc. While
conducting my internship in AIBL. Some of this knowledge was very helpful which I applied in
my internship. During my internship I found this knowledge is very essential for practical
professional life.
The 1st thing that I learned from BBA program and used in my internship is Double Entry system.
We know, in the double-entry accounting system, each accounting entry records related pairs of
financial transactions for asset, liability, income, expense, or capital accounts. Recording of a debit
amount to one account and an equal credit amount to another account results in total debits being
equal to total credits. Almost all the institutions maintain their accounts by using this concept. I
knew about it from text book, class lecture. But I practically applied it during my internship in Al-
Arafah Islami Bank Limited.
“Principles of Finance”

This course introduces me the world of modern finance, especially to the financial operations of a
business. It helps me to understand the concepts of time value of money, basic asset valuation, risk
and return, capital budgeting and financing decisions. It also boost me to understand clearly about
how financial ratios effect in the performance of an organization. This course helps me to value
bonds and stocks, estimate asset returns according to their risk characteristics and identify capital
projects that maximize shareholder's wealth using a wide range of analytical tools. It also assists
to develop a good understanding on how firms finance their capital expenditure.
‘Financial Management’

It provides me the overall financial management and its importance, its applications in business,
their relationship with the business environment and the role and functions of chief financial
officer. It also introduces financial planning, and objectives, and its benefits, and the types of areas
and stages of financial planning, and the factors that help the success of financial planning. This
course is the prerequisite course of Principles of Finance. So, I have learned again the time value
of money and its relationship to the objectives of financial management, rationale for using the
time value of money, and simple and compound interest and how to calculate it, and also
understand the present value of the future payments.
“Introduction to Banking”
This is a course on the economics of money, banking and financial markets. The course provides
me an introduction to the role of money, financial markets, financial institutions and monetary
policy in the economy, thus providing a solid foundation for further study or employment in the

36
financial services industry. This course provides me the comprehensive understanding about
CAMEL rating that clarify to me how it actually works.
“E-Banking”

During my major period, this course helps me to understand fundamental concepts behind modern
e-banking and mobile banking technologies. It defines the diverse knowledge of e-banking in
domestic and outside of the country. It gives me to opportunity the capability of implementing e-
banking in practical decision and making in banking profession. It also widen the ability to think
creatively and analyze banking threats and future IT prospect.
“Financial Analysis and Control”

The course provides me with a framework for analyzing a firm’s past performance, estimating its
future performance, and valuing its equity during my major period. The course integrates key
concepts from accounting, finance, economics, and business strategy and applies them to financial
decision--making. The course focuses on teaching you to interpret numbers in the financial
statements. This course enables me with the ability to generate reasonably accurate forecasts of a
firm's future financial performance, including revenues, earnings, asset balances and free cash
flows.

“Financial Markets and Institution”

This course mainly focuses on economic sector of a country. It taught me about bond, stock,
interest rate and its impact on economy, how demand and supply increases or decreases gradually.
It also explains key concept such as financial claim, financial intermediation and financial market.
It helps me to understand about calculating bond, stock, yield and discount math.
“Banking Law and Practice”
This course provides me with practical legal knowledge of general business law issues. It also
discusses rich fund of contemporary knowledge, time tested principles, basic concepts, emerging
ideas, evolving theories. Latest technique, ever changing procedures and practices in the field of
law.
“Business Environment”

The word “Environment” refers to the aspects of surroundings. Therefore, Business Environment
may be defined as a set of conditions – Social, Legal, Economical, Political or Institutional that
are uncontrollable in nature and affects the functioning of organization. When we studied this
subject I learnt about Technological environment, Political environment, Social-Cultural and
Global environment etc.
“Public Finance”

This course demonstrate to understand the nature and scope of public finance. It provide me
knowledge about the roles of government to control the private and public sectors, the functions
of government in the economic sections, the basic services of the government to its citizens such
as defense, maintenance of law and order, protection of life and property. It also helps me to gain

37
knowledge about the basic social services of the government of the people, e.g. education, medical
care and social security. After successfully completing this course, I am familiar with the
mechanism of government’s income sources and expenditures, demonstrate with the taxation
process, familiar with the sources and uses of public debt.
“Rural and Micro Finance”
A relatively new branch of financial services, microfinance aims to promote self-sufficiency and
economic development among people who don't have access to the traditional financial sector.
After completing this course in my major period, I got the theory how those institution lends small
loans without the strict requirements of traditional lenders. Recipients are usually the poor, but
they also include people who are not poor but who lack the credit standing to borrow money to
start or grow a business.

38
39
 CHAPTER SIX
FINANCIAL PRACTICES
OF AL-ARAFAH ISLAMI
BANK

40
6. Financial Practices of Al-Arafah Islami Bank
During my internship period in Al-Arafah Islami Bank, Laldigir Par Branch, I worked several
departments as like job rotation process. In that time, I was able to learn some specific banking
terms that are considered as financial activities performed by AIBL bank in their working days. It
helped me to understand how it works during the process. I have discussed some core financial
term in the following that I worked on it during my internship period:
6.1 Savings Account
A savings account is an interest-bearing deposit account held at a bank or other financial institution
that provides a modest interest rate. In Islamic finance, mudaraba is a trust financing contract.
Mudaraba may be conducted between investment account holders as fund providers and the
Islamic bank as a mudarib. In Shariah based Islami bank, this account is considered as Mudaraba
Savings Account where the clients is the Shaheb-Al Mal and the Bank is Mudarib. The client can
deposit money amount of Tk.1000 initially. This account will be operated as Mudaraba principle.
The profit rate of this account is 4%.
6.2 Current Account
Current Account is an account with a bank from which money may be withdrawn without notice,
typically an active account catering for frequent deposits and withdrawals by cheque. In Islamic
banking, it is called Al-Wadia Current Account. Al-Wadiah Current Account follows the Principle
of Islami Shariah wherein the bank is deemed as a keeper and trustee of funds as Al-Amana (on
Trust). This deposit that operates by taking permission from depositors would be taken to use their
fund according to Shariah Principle and depositors would not receive any kind of profit.
6.3 Fixed Deposit
The deposit is the lifeblood for the commercial banks. The core business of commercial banks is
accepting deposits and investing fund and it’s the main stream of revenue of commercial banking.
There are different types of deposit scheme that are offered by AIBL bank to their clients. The
profit rate of deposits scheme are varied based on the time frame of schemes. In Mudaraba Term
Deposit Scheme, it has different provisional profit rate. These are given below:

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6.4 Investment
As a 3rd generation leading commercial bank operating under Islamic Shariah, AIBL bank
provides/deals in a variety of banking services including wide range of deposit and investment
products, foreign exchange, remittance and other ancillary services with the support of most
sophisticated/modern IT and professional management. The investment portfolio of the bank
comprises of diversified areas with all nationally identified thirst sectors/areas of business and
industry. The bank has given utmost importance/efforts to park and maintain quality assets and is
committed to retain good customers through congenial customer relationship management and
financial counseling considering the customers as a real business partners.

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 CHAPTER SEVEN
FINDINGS,
RECOMMENDATION AND
CONCLUSION

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7.1 Findings
During my internship at AIBL, Laldigir Par branch, I found some positive and negative side
regarding their general banking activities. These are mentioned below:
✓ AIBL’s property and assets is increasing year by year.
✓ Investment shows increasing trend.
✓ AIBL’s loans and advances is also increasing trend.
✓ Deposits and other account of AIBL shows increasing trend.
✓ AIBL’s total liabilities and share holder’s equity is increasing year by year.
✓ AIBL’s operating expenses is increasing year by year.
✓ AIBL’s net interest income is increasing year by year.
✓ Total operating income of AIBL shows increasing trend.
✓ AIBL’s net profit is increasing year by year.
✓ AIBL’s operating expenses to net interest income ratio was very poor.
✓ Return on Assets (ROA) of AIBL was not superior.
✓ AIBL’s market value per share is decreasing year by year.
✓ Insufficient usage of modern facility like communication technology.
✓ Little application of modern technology such as computer and internet.
✓ Poor condition of balance of payment.
✓ Lack of enthusiastic scheme for exporter and importer.
✓ Absence of attractive remuneration package.
✓ Cash payment procedure is traditional.
✓ Does not provide devotion on the advertisement.
✓ Update old accounts with less documents in hand.
✓ Network of corresponded banks is poor.
✓ Non-cooperation of government bodies.
✓ Lack of fair entrepreneur class.
✓ Knowledge of entrepreneur regarding foreign trade policy is limited.

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7.2 Recommendations
The negative sides of AIBL that I have mentioned in findings, based on that I would like to
recommend some aspect that can be supportive for AIBL Management to get some pioneering
ideas for the probable solutions of the identified problems to ensure better progress to Al-Arafah
Islami Bank in future, some necessary steps are recommended bellow on the basis of collected
data, observation, expert staffs’ opinion and my knowledge and judgment.
The information related to customer should be available to the branch.
They should develop Islamic Banking Training Center (IBTC).
Through providing better service they should increase their reliability to minimize their problem
of inadequate track record.
Branch should introduce a smoother function to deal with the customers.
Adding a fully computerized general banking system to satisfy the customers by providing faster
service.
Establishing a networking system inside the branches to transfer data within a short period.
Cancel the introducer system to collect more deposit through the new account which will result
satisfying the customer.
Upgrading the general banking conveniences rather than the conventional banking system for
easier understanding.
Setting up sophisticated technology and formulating appropriate programs to develop the
captioned activities.
The bank ought to deliberate the customer criticize when they rise any problematic.
The Bank must deliver rapid client service to escape haphazardness.
The Bank should increase their staff according to customer demand.
As soon as possible the bank should launch more branches in Sylhet city as well as in other
cities of the country.
There has no facility of working out for intern students. They can introduce workspace or
seminar for short term period training for an intern that will enrich the recital and knowledge of
the intern students.
Every branch should have their capability about the power system and internet connectivity for
diminishing the service down time.

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7.3 Conclusion
The finding in this report cannot be taken as a conclusion and it will wrong to end here with such
results. Because this study actually gives a simple picture and leaves room for further study in
different areas of banking functions such as product of banks, productivity analysis, Data
Environment analysis, CAMELS rating and more. Banking sector is the chief financial
intermediary in a country. It is a very challenging institution and in the age of globalization and
free trade, the process and the system of running a Bank is changing. AIBL already managed itself
with this changing environment. The company strategies are clear and concise. The return is
attractive for the bank. If the Bank goes this way, one can expect that in near future Al-Arafah
Islami Bank may become one of the top performers. From the discussion it can be concluded that
Al-Arafah Islami Bank Limited playing an important role in the economic development of the
country and it has a prospect future to have a very good position in the Banking sector. To do this
it should increase promotional activities to reach to the people easily as well as Al-Arafah Islami
Bank Limited focus on major banking activities that may increase the bank ranking and financial
performance position comparing with other banks. Such information assists the management of
this bank in creating appropriate financial strategies for attaining the required planned financial
performance. The study provides bank managers with understanding of activities that would
improve their bank’s financial performance and foreign exchange operation. The results of this
study imply that it might be necessary for the management of Al-Arafah Islami Bank Limited to
take all required decisions by consistently observing key financial ratios, horizontal (trend)
analysis among various elements and foreign exchange operation to enhance their position in the
banking industry.

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Acronyms:
A/C = Account.
AD = Authorized dealer.
B/L = Bill of landing.
BOE = Bill of exchange.
DD = Demand Draft.
CIB = Credit Information Bureau..
L/C = Letter of Credit.
PO = Payment Order.
TIN = Tax Identification Number.
STD = Short Term Deposit
FDR = Fixed Deposit Receipt.
CC = Cash Credit.
PAD = Payment against Document.
SOD = Secured Overdraft.
CA = Current Account.
NPV = Net Present Value.
IRR = Internal Rate of Return.
GDP = Growth Domestic Product.
GNP = Growth National Product.

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Bibliography
A. Book References
Debnath, Business of Banking, 2008;
Debnath, D. R. (2004). Business of Banking (Vol. 12). (R. Debnath, Ed.) Dhaka.
Hamid, M. A. (2011). Banking and Insurance (Vol. 08). Dhaka, Banglaedsh: Mortri Press.
Khan, D. (2009). Bank Management (Vol. 123). (S. Ahmed, Ed.) Dhaka: Bondu Printing Press.
Oxford Dictionary of Business (2003), New Edition, Oxford University Press, Great Clarendon
Street, Oxford ox2 6dr, Oxford, New York.
Oxford Dictionary of Finance and Banking (2010), Fourth Edition, Oxford University Press, Great
Clarendon Street, Oxford ox2 6dr, Oxford, New York.
Oxford Learner Pocket Dictionary, (2006), Fifth Edition, Oxford University Press, Great
Clarendon Street, Oxford ox2 6dr, Oxford, New York.
B. Website
1. Asses At http:// /www.al-arafahbank.com.bd
2. Asses At http:// www.wikepedia.com At 4pm 10-january-2016
3. Asses at http://www.businessdictionary.com/definition/bank.html at 8.43pm.05-01-2016
4. Asses at http://www.investopedia.com/terms/b/bank.asp at 9.40pm.08-01-2016
C. Publications
• Annual Report 2018 of Al-Arafah Islami Bank.

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