1

Bismillah Hir Rahman Nir Raheem.

General banking activities

ON
Al-Arafah Islami Bank Ltd,
Anowara Branch, Chittagong.
(This Internship Report is submitted for the partial fulfilment of the Degree of
bachelor of Social Science in Economics & Banking)
Prepared by:
MD. Shahariar Tayeb
ID NO: EB-171094
Program: BSS (Hon’s)
Semester: Autumn 2020
Internship Duration:
Date of Submission:

Department of Economics & Banking

Faculty of Social Science
International Islamic University Chittagong
 2

General Banking Activities

ON
Al-Arafah Islami Bank Ltd.
Anowara Branch, Chittagong.
(This Internship Report is submitted for the partial fulfilment of the Degree of
bachelor of Social Science in Economics & Banking)
Prepared by:
MD. Shahariar Tayeb
ID NO: EB-171094
Program: BSS (Hon’s)
Semester: Spring 2019
Supervised by
Monir Aammed
Associate Professor
Department of Economics & Banking
International Islamic University, Chittagong
Internship Duration:
Date of Submission:

……………………….
Signature of Supervisor

Department of Economics & Banking

Faculty of Social Science
International Islamic University Chittagong
 3

Letter of submission
Date:
The convener
Internship and thesis committee
Department of economics & Banking
International Islamic University Chittagong
Subject: submission of internship report on “General banking activities on Al-
Arafah Islami Bank LTD.”
Dear Sir,
This is my honour to submit internship report on the subject “general Banking
activities of Al-Arafah Islami bank ltd, Anwara Branch, Chittagong.” It is a
great opportunity for me to acquire practical knowledge and experience on
banking activities. It gives me immense pleasure to complete my internship
successfully and submit this report on the analysis that I have conducted during
my internship period. At every segment of making this report, I try to enhance
my knowledge about the system 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.
Your support in this regard will be highly appreciated
Sincerely yours,
MD. Shahariar Tayeb
EB-171094
B.S.S program
International Islamic University Chittagong.
 4

ACKNOWLEDGEMENT
Education involves not only reading books and doing excise but also
acquiring knowledge through doing something practically. This
report has designed only for considering that objective. In this period
of time, I enjoyed warm co-operation from every person in the bank
location.
I am deeply indebted to my faculty supervisor Monir Ahmed
Department of economics & banking (IIUC) for his whole hearted
supervision during my Organization attachment period. I am also
grateful to my Organizational supervisor MD Kamal Uddin officer of
AIBL Anwar branch Chittagong and my colleague who helped me by
providing information instructions. I am also grateful to all staffs for
their valuable co-operation, guidance, direction and continues support
throughout the internship period. I was closely attached with them
during my internship tenure.
At last, my sincere Apology to the readers for my conceptual and
printing mistake if there is any.
Md. Shahariar Tayeb
ID EB-171094
 5

Executive summary
Bank provides means and mechanisms of transferring commend over
resources those who have an excess of income over expenditure to
those who can make use of the same for adding to the volume of
productive capital. The bank provides them with the safety, liquidity
and profitability of savings.
Al-Arafah Islamic bank limited is scheduled commercial bank
registered by the Bangladesh Bank. The functions of the bank cover a
wide range of banking and functional activities to individuals firms,
corporate bodies and other multinational agencies.
The main objective of study is to give an overview of AIBL and
identify the strength, weakness and critical risk factor of this bank.
Data collected for the study in two different modes namely primary
and secondary. Face to face conversation with the respective officer
of the branch was the main mode to collect primary data and for
secondary data various publications and related body are observed.
The main limitation of the study was short time limit and
authenticated data insufficiency.
Officer of the bank are capable. Even through many of them simply
know the working procedure of what they are doing but don’t know
the philosophy behind doing those.
The report represents the three month working experience and this
report all about general banking activities of AIBL. My overall
experience had been fascinating and I believe internship period at Al-
Arafat Islamic bank ltd, will definitely help me a lot in building my
future career.
 6

TABLE OF CONTENT

Particulars page

Letter of Transmittal

Acknowledgement

Executive summary

CHAPTER ONE

Page:

1.1 Introduction 2

1.2 Scope of the Study

1.3 Methodology
4
1.4 Time to period of the study

1.5 Source of Data collection

1.6 The main objective of the study

1.7 limitation

CHAPTER TWO
 7

2.1 Historical Background of Al-Arafah Islami Bank Limited (AIBL) 14

2.2 Company Profile 15

2.3 Vision 15

2.4 Mission 15
2.5 Value 15

2.6 commitments’

2.7 Management of AIBL 15,16

2.8.1 Corporate Division/Department 16

2.8.2 Corporate Division 16
2.9 Ex Officio Director 17
2.10 Risk Management Committee 17
2.11 Audit Committee 17
2.12 Executive Committee 17
2.13 Sariah Supervisory Committee 17
2.14 Operational Details 18
2.15 SWOT Analysis of AIBL
2.16. Section and their Function 19
2.17.General Banking Division 19
2.18.1 (a) Customer Service 19
2.18.2 (b) Cash Department 19
2.18.3 (c) Accounts Department 20
2.19 Investment Division 21
2.20 Last five years Financial summary
8
 9

CHAPTER THREE
3.1 What is General Banking? 22
3.1.1 General Banking Section 22
3.1.2 Structure of Anowara branch 22
3.2.1 Account Opening 23
3.2.2 Deposit Product of AIBL 23
3.2.3 Fixed Deposit 23
3.2.4 Modarabad Term Deposit 23
3.2.5 Closing Account 24
3.3 Cheque 25
3.3.1 Receive Cheque Requisition 25
3.3.2 Pay order Issue 25
3.3.3 Issuing Cheque Books 25
3.4 Remittance section 26
3.5 Cash section 27
3.5.1 Cash Receive Section 27
3.5.2 Cash Distribution Section 27
3.6 Electronic section 28
3.7 Online Transaction 29
3.8 Types of Clearing 30

CHAPTER FOUR
 10

4.1 Job Part 26

4.2 Job Responsibilities 26
4.3 Account Opening 26
4.4 Closing Accounts 27
4.5 Receive Cheque Requisition 27
4.6 Pay Order Issue 27
4.7 Issuing Cheque Books 27
4.8 Inform Clients 28
4.9 Providing Client Statement 28
 11

CHAPTER FIVE

5.1 Analysis and Findings 29

5.1.1 Division of General Banking 29

5.1.2 Account Opening Section 29, 30

5.2 Account Opening Procedure 30

5.2.1 Documents Required for Opening Account 31

5.2.2 Proprietorship Account 32

5.2.3 Limited Company 32

5.3 Closing of an Account 32, 33

5.4 Cash Department 34

5.5 Local Remittance 34

5.6 Type of Remittance 34

5.7 Clearing Department 35

5.8 Clearing House 35

5.9 Types of Clearing 35

5.10 Online Transaction 35

5.11 Financial Highlights 36, 37

5.13 SWOT Analysis in AIBL 38, 39

 12

CHAPTER SIX
Findings 40
Recommendation 41
Conclusion 42
Bibliography 43
 13

Chapter-1
 14

Introduction
1.1 Introduction:
Banking system occupies an important place in a nation's economy
because of its intermediary role; I ensures allocation and reallocation
of resources and keeps up the momentum of economic activities. A
banking institution is indispensable in a modern society. It plays a
crucial role in the economic development of a country and forms the
core at the money market of any country. In a developing country like
Bangladesh the banking system as a whole has a vital role to play in
the progress of economic Development. The overall purpose of
banking is to collect money from surplus unit and transfer it to the
deficit unit. The subject of my report is "General Banking Activities
of Al-Arafah Islami Bank Limited: A Special Concern on Anowara
Branch". So my focus is mainly on General banking of AIBL. It is a
partial requirement to take a taste of real life challenge conducted by
the intern. Only a lot of the ethical knowledge will be little important
unless it is applicable in the practical life. So we reed proper
important unless I is applicable in the practical life. That's why we
need proper application of our knowledge to get some benefit from
our theoretical knowledge to make it more fruitful. Any academic
course of the study has a great value when it has practical application
in real life. When we engage ourselves in such field to make proper
use of our knowledge in our practical life only, then we come to know
about the benefit of the theoretical knowledge. My Internship time
period was during this period I have worked closely with the
employees of Al-Arafah Islami Bank Ltd, Anowara Branch
Chittagong.

1.2 Scope of the study:

 15

In my report I have highlighted the various steps of general banking

of the AIBL. I have also discussed about the background of the sector,
market structure, risk management factor etc. with the bank
personnel. Before that, a brief overview of the AIBL has been given
to understand its operations and activities. So the scope of the report
covers the comprehensive knowledge on the organization of AIBL. I
have tried to analysis and evaluate of general banking performance
based on adequate information contained in documents and interviews
of banking officers.

1.3 Methodology:

The methodology of the report is stated below, which was

appropriately exercise in achieving the above stated.

1.4 Time period of the study:

For the full-filament of the desire purpose following working days are
spend to various department of Al Arafat Islamic bank ltd, Anowara
branch Chittagong.
The information was collected from both primary and secondary
sources of data. The report is descriptive in nature. The study requires
various types’ information of present policies, procedures and
methods of General Banking Operation. It is an important part of
report.

1. Primary Sources of Data

 16

 Face to face conversation with clients and customers.

 Face to face conversation of the officers.
 Exposure on different.
 Desk of the bank.
 Personal observation.
 Expert's opinion

2. Secondary Sources of Data:

 Annual report of Al-Arafat Islamic Bank Limited.

 Website of Al-Arafat Islamic Bank Limited and other sample
bank.
 Fie study.
 Statement of affairs.
 Handbook and online articles.

1.5 The Main Objective of the report:

 17

The main objective of the study is to provide an overview of the

“Measuring performance of General banking System of Islamic bank
limited” a study on Anwara branch with fulfilling the requirement of the
BSS Program. However the objective behind this study is something
broader. Objectives of the report are summarized in the following
manner: The main objective of the study is to develop the practical
banking activities and also relate with. However the objective behind this
study is something broader. Objectives of the report are summarized in
the following manner:

 To Know the products and services of general banking of Islamic Bank

LTD
 To be familiar with the operations of general banking actives
 To measure the performance of general bank activities of Islamic bank
Ltd
 To learn about General system of the banking sector.
 To assert the strength and weakness of general baking of Islamic bank

1.6 Limitation: on the way to my study. I have faced the

problems that are given below could be turned as the
limitation/short coming of the study.
 Short time period.
 Data insufficiency.
 Lack of records.
 Incomplete and obscure data & Unwillingness of key person.
 18

Chapter-2

2.1 Historical Background of Al-Arafat Islamic Bank Limited (AIBL)

Islamic ideology encourages us to succeed in life here & hereafter. To
achieve this success we must follow the way dictated by the Holy
Quran and the path shown by Prophet Mohammad (SAAS). With this
goal in view Al-Arafah Islami Bank Ltd was established (registered)
as a public limited company.

Date of Registration: 18 June, 1995

1st Branch: Motijheel Branch, Dhaka

Opening Ceremony: 27 September, 1995
Authorized Capital: 15,000.00 Million
Paid-up Capital: 9, 943.06 Million
Local Partnership of Capital 100%
Equity 22,520.68 Million
Number of Branches 154
Deposit 244,806.26 Million
Investment 235,905.23 Million
Number of Employees 3,446
Number of Shareholders 30,386
The bank leads its business on the standards of Modarabad, Bai-
muzzle, and enlists buy exchanges affirmed by Bangladesh Bank.
Normally, its modes and activities are significantly not the same as
 19

those of other regular business bank. There is a Sariah gathering in the

banks who keeps up steady watchfulness to guarantee that the
exercises of the bank are being directed on the statutes of Islam. The
Sariah council consists of prominent Ullman, reputed bankers,
renowned lawyers and eminent economist.

2.2 Company Profile: With the objective of achieving success

here & hereafter by pursuing the way directed by Allah and the path
shown by His Prophet Mohammad (SAAS), Al Arafah Islami Bank
Ltd was established (registered) as a private limited company on 18
June 1995. The inaugural ceremony took place on 27 September
1995, The authorized capital of the Bank is Tk. 15000.00 million and
the paid up capital is Tk. 10440.22 million as on 31.12.2018,
Renowned Islamic Scholars and plus businessmen of the country are
the sponsors of the Bank. 100% of paid up capital is being owned by
indigenous shareholders. The equity of the bank stood at Tk. 2348.32
crore as on 31 December 2018, the manpower was 3682 as on 31
December 2018 and the number of shareholders was 25793 as on 31
December 2018. It has achieved a continuous profit and declared a
good dividend over the years, High quality customer service through
the integration of modern technology and new products is the tool of
the bank to achieve success, and the bank has a diverse array of
carefully tailored products and services to satisfy customer needs. The
Bank is committed to contribute significantly to the national
economy. It has made a positive contribution towards the socio
economic development of the country with 182 branches of which 25
is AD throughout the country.
 20

Vision:
 To be a pioneer in Islamic Banking in Bangladesh and
contribute significantly to the growth of the national economy.
Mission:
 Achieving the satisfaction of Almighty Allah both here & hereafter.
 Proliferation of Sariah Based Banking Practices.
 Quality financial services adopting the latest technology.
 Fast and efficient customer service.
 Maintaining high standard of business ethics.
 Balanced growth.
 Steady & competitive return on shareholders' equity. Innovative banking
at a competitive price.
 Attract and retain quality human resources.
 Extending competitive compensation packages to the employees.
 Firm commitment to the growth of national economy.
 Involving more in Micro and SME financing.
Commitments:
1 Ours bank 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 Islamic bank in Bangladesh.
2 To deliver financial services with the touch of our heart to detail, small and
medium scale enterprises, as well as corporate clients through our branches
across the country.
3 Our business initiatives are designed to match the changing trade &
industrial needs of the clients. Swift a CASA E Customer Rights a AIBL
Magazine O Financial Fake Note le 2020 Manage & Maintain by ICT
Division, Al-Arafat Islamic Bank Limited.

2.7 Management of AIBL:

A fourteen member Board of Directors are responsible for the strategic
planning and overall policy guidelines of the bank. Further, there is an
Executive Committee of the board of dispose of urgent business proposals. The
executive Committee is assembled by nine members. Besides, there is a tree
member Audit Committee in the board to oversee compliance of major
 21

regulatory and operational issues. There is an another eight member of Shariah

Council to accelerate, monitor, control, supervise and maintain the modes of
Islamic Banking System. Key issues are managed by a Management Committee
headed by the CEO and Managing Director to facilitate rapid decisions.

The board’s Role:

The fatwa and Shariah Supervision Board oversee the application of different
aspects of Shariah in the bank. It also ensures that all the transactions are in
strict compliance with the right of contradict (Fatwa) any violating procedures,
if they are found. The Board of Directors is obligated to obey the fatwas,
irrespective of whether a unanimous or a majority consensus secured the
decision (Clause of the Bank’s Memorandum & Articles of Association).

2.2.3 Corporate Division/Department:

Al-Arafat Islamic Bank is one of the most disciplined Banks with a distinctive
corporate culture. Here we believe in shared meaning, shared understanding and
shared sense making. AIBL’s people can see and understand events, activities,
objects and situation in a distinctive way. The corporate culture they have a
place has not been forced it has rather been accomplished through their
corporate direct. The Bank achievement has been conceivable as a result of the
capable initiative devoted and conferred administrations given by all levels of
administration and staff which all conceivable due to a decent and quality full
corporate culture.

Corporate Division:
The whole corporate section actually leaded by the board of directors. Al-hajj
Abdul Salam is the chairman of board of directors and Al-hajj Abdul Salam is
the vice chairman of board of directors. Al-hajj Salim Rahman is the chairman
of Executive Committee and Hafez Al-hajj Md. Enamel Ulla vice-chairman of
Executive committee. JB Badiur Rahman is the chairman of Risk Management
Committee. JB Mahabubul Alam is the chairman of Audit committee
 22

Corporate Culture:
Al-Arafah Islami bank is one of the most disciplines banks with a distinctive
corporate culture based on Islami Shariah. Here they believe shared meaning,
shared understanding and shared sense making. The people in this bank can see
and understand events, activities, objects and situation in a distinctive way.
They mould their manners and etiquette, character individually to suit the
purpose of the bank. The people of the bank see themselves as a tight knit team
because they believe in working together for growth.

2.2.4 ex Official Director:

Managing Director: Farman Chowdhury. The branches are controlled by
managing directors. MD provides a guideline how to work and all branches
abounded to follow that guideline.

2.2.5 Risk Management Committee:

The Committee shall assist relevant work of the Board of Directors to validate
the type of strategies, policies, procedures and internal control process of risk
management of the Bank, and supervise and appraise the risk management
department and relevant senior management on risk management.

2.2.6 Audit committee:

The corporate culture they have a place has not been forced it has rather been
accomplished through their corporate direct. The Bank achievement has been
conceivable in light of the capable administration devoted and conferred
administrations given by all levels of administration and staff which all
conceivable due to a decent and quality full corporate culture.
2.2.7 Executive Committee:
Executive committee coordinates all bank activities. They ensure that bank
activities accord by following their budget and plan.

2.2.8 Sariah Supervisory Committee:

The Fatwa & Sariah Supervision Board of committee oversees the application
of different aspects of Sariah in the Bank. It also give the surety that all
transactions are in strict compliance with the right of contradicting (fatwa) any
violating procedures, if found with proper evidence.
 23

2.3 Operational Details:

Excutive vice
president

senior vice
president

vice president

Assistant viice
president
Managing director
Chairman senior principle
officer

principal officer

senior officer

junior officer

Assistant officer
 24

2.4 SWOT Analysis in AIBL:

Every organization is composed of some internal strengths and weaknesses and

also has some external opportunities and threats in its whole life cycle.
 25

Strengths:

 AIBL provides its customer excellent and consistent quality is every

service.
 It is financially a sound company.
 It utilizes state of the art technology to ensure consistent quality and
operation.
 It gives its works drive a brilliant work environment.
 AIBL as of now accomplished a positive attitude among the customer.
 AIBL has research and preparing division.

Weaknesses:
 Lack of human resource in certain area.
 Inadequate IT infrastructure.
 Inadequate delegation of power.
 The bank has limited ATM service.
 Officers have limited experience and not enough trained.
 Marketing policy is not well setup
Opportunities:
 Development of on line keeping money will open
more degree for AIBL -AIBL can introduce more
innovative and modern customer service.
 Many branches can be opened in local remote area as
its high demand.
 AIBL can recruit experienced, efficient and
knowledgeable officers and staffs as it offers good
working environment.
 Relationship management.
Threats:
 Worldwide trend of mergers and acquisition in financial institutions is
causing problems.
 Frequency taka devaluation and foreign exchange rate fluctuation is
causing problem.
 lots of new banks are coming in the scenario with new service.
 Some other banks also follow the Islamic banking policy.
 Similar types of retail banking products.
 26

 Certain Bangladesh Bank’s rules and regulations.

2.5 Sections and Their Functions:

There are mainly two sections in AIBL, via, General Banking Division
Investment Division and Foreign Exchange Division. These Divisions have
small department or units under them. The details of the important sections and
subsections are described below.

2.5.1 General Banking Division:

There are certain three sections working together to fulfil the target of the
company.
(a) Customer Service (b) Cash Department (c) Accounts Department.

2.5.1(A) Customer Service:

Different functions of customer service are:

 Accounts opening.
 Issuance of Cheque Book.
 Issuance of Payment Order.
 Issuance of Online Transfer.
 Handling transfer transaction.
 Operation of clearing house.
 Executing customer standing instructions
2.5.2(b) Cash Department:
Different functions of cash department are:
 27

 Receiving money from the investors.

 Payment of money to the customer as requested.
 Checking all zones of store slip whether it is plainly composed or not.
 Verifying the instalments check when to pay the cash to the customer.
 Cash register must be maintained by the Cash Officer.
 Maintenance of daily cash balance.
 Preparation of monthly cash balance.

2.5.3 (c) Accounts Department:

Accounting of AIBL can be broadly classified in the following two groups:

i) General Accounting.
ii) Investment Accounting.

i) General Accounting:
General Accounting includes accounting for-general and administrative
expense, funding operation and fixed assets.

Activities of accounting subsection includes

 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 organization keeps up its books of record in light of the working strategy
for bookkeeping as per Generally Accepted Accounting Standards in similarity
with one the arrangement of significant controls of Bangladesh Bank.

 Collection of receipts i.e. rental, profit.

 Control of collection i.e. maintain cheque register.
 Reporting of information regarding rental collection i.e. cash collection
statement.
 Acknowledgement to the Account holder i.e. –statement of accounts.
 28

 Preparation of overdue statement i.e.-overdue statement for BOD.

 Activities regarding delinquent charge i.e.-billing.
 Treatment of irregular investment Account.
 Investment Division; Functions of investment divisions are:
1. Preparing the proposal.
2. Issuance of sanction letter.
3. Disbursing the payment.
4. Prepare & posting voucher.

2.20 Table of Financial Performance of five years (2008 – 2012)

Particulars 2016 2017 2018 2019 2020 Growth

(%)

Authorized 2500.00 5000.00 5000.00 10000.00 10000.00 100.00

Capital

Paid up 1383.81 1798.95 4677.28 5893.37 7130.98 21.00

Capital

Reserve Fund 905.33 1223.18 1779.08 2437.43 4079.63 67.37

Shareholder’s 2705.74 3564.73 9790.36 11989.11 14050.69 17.20

Equity

Deposits 29690.12 38355.50 53882.96 82186.98 118683.39 44.41

Investment 27742.57 36134.08 53582.96 77714.95 106650.42 37.23

Import 32,685.13 34,074.80 55,934.10 76,112.10 71,931.70 (5.49)

 
Export 20,176.64 23546.10 32,042.40 52,202.10 58,476.60 12.02
 29

Total Income 2955.61 4387.26 5490.60 5123.00 6522.00 25.15

Total 2199.43 2859.17 3928.27 1468.00 2119.00 37.39
Expenditure
Profit before 1258.89 1589.24 2852.47 3946.62 3944.10 (0.06)
Tax
Profit after 668.23 858.99 1959.04 2198.75 1945.40 11.52
Tax
Tax 235.53 590.66 660.57 1519.00 1726.00 11.84
Total Assets 37177.22 48515.79 74005.01 106768.18 149320.36 39.85
Fixed Assets 396.76 466.30 655.39 968.13 2394.62 147.34
Earnings per 3.72 2.00 4.14 2.49 2.69 (14.70)
Share
Dividend Per 30.00 30.00 26.00 21.00 17.00 (19.05)
Share (%)
 30

Chapter 3

3.1 General Banking:

3.1.1 Bank:
A bank is a monetary foundation and a money related mediator that
acknowledges stores and channels those stores into loaning exercises, either
specifically or through capital markets. A bank associates clients that have
capital shortfalls to clients with capital surpluses.
As a result of their fundamental status inside the cash related system and the
economy all around, banks are significantly coordinated in numerous countries.
Most banks work under a framework known as fragmentary save keeping
money where they hold just a little save of the assets kept and loan out the rest
for benefit.

3.1.2 General banking:

General banking department is the main of all banking activities. This is the
busiest and critical division of a branch, since stores are prepared, money
exchanges are made; clearing, settlement and bookkeeping exercises are done
here.
 31

Financial institution/ intermediary that mediates or stands between ultimate

borrowers and ultimate lenders is knows as banking financial institution. Banks
perform this function in two ways- taking deposits from various areas in
different forms and lending that accumulated amount of money to the potential
investors in other different forms.
General keeping money is the front-side managing an account benefit division.
It gives those clients who come often and those clients who come one time in
keeping money for getting a charge out of auxiliary administrations. In some
broad saving money exercises, there is no connection amongst investor and
clients who will take just a single administration shape bank. On the other hand,
there are 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 one of the important for general banking.
Customers give their deposits and meet their demand for cash by honouring
cheques.

3.1.3 General Banking Sections:

There are various sections in this department, which are as follows: -

 Cash Section
 Accounts Opening Section
 Cheque Clearing Section
 Remittance Section

3.2.1 Accounts Opening Section:

On the other hand account opening is the gateway for clients to enter into
business with bank. It is the establishment of broker client relationship this is a
standout amongst the most imperative areas of a branch, on the grounds that by
 32

opening records bank prepares reserves for speculation. Different guidelines and
directions are kept up and different reports are taken while opening a record. A
customer can open different types of accounts through this department. Such as:

1. Al-Wadena Current Deposit

2. Mudaraba Savings Account

3. Short Notice Deposit

5.1 na&y"i" on the

a"i" of
uantitative of
"e&ected ank
5.1.1 Bank <i"e
depo"it on 214
 33

Al-Wadena Current Deposit

Demand deposit account is purely based on current account. There is no
restriction on withdrawing money from the account. It is basically justified
when funds are to be collected and money is to be paid at frequent interval.
Some Important Points are as follows-

 Minimum opening deposit of TK. 2000/- is required;

 There is no withdrawal limit.
 No profit is given upon the deposited money;
 Minimum Tk.2000 balances must always maintain all the time.

3.2.2 Account Opening Procedure:

Step 1 Account is opened and cheques book and pay —in- slip book is
given.

Step 2 Receiving filled up application in banks prescribed from

mentioning what type of account is desired to be opened.

Step 3 • The from is filled up by the applicant himself/ herself

• Two copies of passport size and one copy stamp size
photographs from individual are taken and one copy
photographs of nominee is taken; in case of firms
photographs of all partners are taken
• Application must submit required documents
Step 4 Authorized officer accepts the application.

Step 5 Minimum balance is deposited - only cash is accepted.

 34

Documents Required for Opening Account Individual/ Joint

Account:
 Introduction of the record.
 Two photos of the signatories appropriately confirmed by the introducer.
 Identity (duplicate of NID/visa/Birth Certificate).
 Joint Declaration Form (For joint a/c as it were).
 Employee's history.
 Nominee's photo and NID/visa/Birth Certificate.
 Any Bill Copy (Electric/Wasa)

3.2.2 Deposit Product of AIBL:

 Mudaraba Savings Deposits (MSD).
 Mudaraba Short notice deposits (MSND).
 Al- Wada Current Account (CD).

3.2.3 Fixed deposits:

36 Months 24 Months 12 Months 06 months 3 months

Fixed deposit are a high-enthusiasm yielding Term store offered by banks.

The most mainstream type of Term stores are Fixed Deposits, while
different types of term Deposits are Recurring Deposit and Flexi Fixed
Deposits.
 35

3.2.3 Mudaraba Term Deposit:

 Monthly Hajj Deposit Monthly.

 Instalments Term Deposit.
 Monthly Profit Based Deposit.
 Monthly Savings Investment.
 Marriage Saving Investment Schemes.
 Pensioners Deposit Scheme.
 Cash WAQF.
 Kotipati Deposit Scheme.
 Millionaire Deposit Scheme.
 Double Benefit Scheme.
 Triple benefit scheme monthly

Mudaraba Savings Account

This deposit is primarily for small-scale savers. Hence, there is a restriction on
withdrawals in a month. Heavy withdrawals are permitted only against prior
notice.

Short Notice Deposit

Normally various big companies, organizations, Government Departments keep
money in SND-account. Frequent withdrawal is discouraged. The deposit
should be kept for at least seven days to get profit. The profit t offered for SND
is less than that of savings deposit profit is calculated based on daily minimum
product and paid two times in a year.
 36

3.2.5 Closing Accounts:

However, customer accounts are closed for many reasons. So if I closed
accounts with maximum attention to the customer so that next time when they
will think about opening a bank account, Al Arafat Islamic Bank Limited will
come to their mind as a preferred choice.
The closing of an account may happen:
 If the customer is desirous to close the account,
 If the Al- Arafat Islamic Bank finds that the account is inoperative for a
long duration.
 If the court of Arafat Islamic Bank issues garnishee order.
 A client may close his/her record whenever by presenting an application
to the branch. The client ought to be approached to draw the last check
for the sum remaining to the credit of his/her record less the measure of
shutting another coincidental charge and surrender the unused check
clears out.
 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 holder.

3.3 Cheques:
Cheques are those type of bill of exchange which were developed the way to
make payments without the necessary to carry large amounts of money. While
paper money evolved from promissory notes, another form of negotiable
instrument, similar to cheques in that they were originally a written order to pay
the given amount to whoever had it in their possession.

Technically, a cheque is a negotiable instrument instructing a financial

institution to pay a specific amount of a specific currency from a specified
transactional account held in the drawer's name with that institution. Both the
drawer and payee may be natural persons or legal entities.
 37

3.3.1 Receive Cheque Requisition:

A check demand is gotten from the client for giving another check book
containing a particular number of pages specified by client. I got the check
demands for the duration of the day and sent the rundown to the head office
toward the day's end.

3.3.2 Pay Order Issue:

Pay order has been issued to serve the customer who wants send money not in
cash rather in cheque. It reduces the cash carrying risk. I filled up the pay order
slip to help out the customers.

Total amount of PO Commission Vat

Up to Tk. 1,00,000 Tk. 15.00 Tk3.00

Tk. 1,00,001-Tk. 5,00,000 Tk.25.00 Tk. 4.00

Tk. 5, 00,001 -Tk.

10,00,000 Tk. 50.00 Tk. 8.00

Tk. 10,00001 and Above Tk. 100.00 Tk. 15.00

3.3.3 Issuing Cheque Books:

Cheque register are designed and was signed by account holder before issuing
the cheque book. Minimum five working days was needed to issue a new
cheque book. Many steps were followed while issuing cheque book.

3.3.4 Inform Clients:

Getting the proper reacquisition form our clients we needed one week to
deliver. I informed our clients through phone when cheque books were reached
in our branch.
 38

3.4 Remittance of Fund Section:

Sending money from one place to another through some charges is called
Remittance. To pay or receive money of customers in the form of Remittance
from one place to another, from one person to another inside and outside the
national boundary is an earning source of every bank. Islampur Branch of Al-
Arafah Islami Bank operates both the foreign and local remittance to serve its
customers. In addition, this service is an important part of country’s payment
system. Through this service, people can transfer their funds from one country
to another country very quickly.

Foreign remittance:

Foreign remittance is to send money of customers from one place to another,

from one person to another person outside the national boundary. Through
Islampur Branch of Al-Arafah Islami Bank, it can able to serve the customers
by receiving and paying their incoming foreign remittance in the form of local
currency. Foreign remittance is received by the bank via some internationally
authorized agents. There are two medium of agents for foreign remittance at
Islampur Branch of Al-Arafah Islami Bank. Those are given below:

Moneygram

  Eldorado

Local remittance:

Sending money of customers in the form of remittance from one place to

another, from one person to another inside and outside the national boundary is
another earning source of every bank. Islampur Branch of Al-Arafah Islami
Bank operates the local and foreign remittance to serve the customers. In
addition, this is the important part of country’s payment system. Through this
service people can transfer their funds from one place to another very quickly.
There are several techniques for collecting local and foreign remittance. Those
are given below:

The main instruments used by AIBL Principle Branch for remittance of funds.

1. Pay order/ Bankers Cheek

2. Demand Draft
3. Telegraphic Transfer
 39

3.4.1 Types of Remittance:

 Between banks and non-banks client.
 Between banks in a similar nation.
 Between banks in the diverse focuses.
 Between banks and national bank in a similar nation.
 Between national bank of various clients.

3.5 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;

Cash Payment 1. Cash payment is made only against cheque.

2. This is the unique function of the banking system

which is known as “payment on demand”

3. It makes payment only against its printed valid

cheque.

Cash Receipt 1. It receives deposits from the depositors in form of

cash.

2. So it is the “Mobilization Unit” of the banking

system.

3. It collects money only its receipts forms.

 40

Table: Functions of cash department

3.6 Electronic funds transfer:

The term Electronic funds transfer (EFT) means electronic exchange or transfer
of money from one account to another, either within a single financial
institution or across multiple institutions, through computer-based systems.
The term covers a number of different concepts:
 Cardholder-initiated transactions, where a cardholder makes use of a
payment card.
 Direct deposit payroll payments for a business to its employees, possibly
via a payroll service bureau.
 Direct debit payments, sometimes called electronic checks, for which a
business debits the consumer's bank accounts for payment for goods or
services.
 Electronic bill payments in online banking, which may be delivered by
EFT or paper check Transactions involving stored value of electronic
money, possibly in a private currency.
 Wire transfer via an international banking network (carries a higher fee in
North America).
 Electronic Benefit Transfer
 41

Electronic Products:
 Real Time On-Line any branch banking.
 24-hours ATM.
 Debit Card.
 Credit Card
 Telephone Banking.
 SMS Banking.
 Internet Banking.
 SMS Banking.
 Agent Banking.
 RTGS

3.7 Online Transaction:

Online transaction is totally computer based. Clients of any branch of AIBL can
draw money from any branch of AIBL. This is a superior service for the clients
of AIBL than others. The online charge is Tk.50 from Tk.50001 to 200,000 and
less than that is free. Customers have to pay 15% VAT on online
commission/charge. From 200,000 to above the fee is 100.

3.8 Clearing Department:

The amount of Cheques, Pay Order (P O) Collection from other banks on behalf
of its customer is a basic function of a Clearing Department. Clearing is a
framework by which a bank can gather clients finance starting with one bank
then onto the next 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, and Khulna & Bogura. Where there is no
branch of Bangladesh Bank, Sonali bank arranges this function.
 42

3.8.1 Types of Clearing:

Outward Clearing
When the branches of a bank receive cheques from its customers drawn on the
other banks within the local clearing zone for collection through clearing house,
it is Outward Clearing.

Inward Clearing

When the banks receive cheque drawn on them from other banks in the clearing
house, it is Inward Clearing.

Types of clearing house

There are two types of clearing house. Those are:
1. Same Day Clearing House.
2. Normal Clearing House:

Same day clearing is for the high value cheques which amount is 5lac and more.
The time of same day clearing for inward is 10 am to 1:45 pm and for outward
the time is 10 am to 11.40 am.
 43

Chapter 4
87

Shovon
5.1 na&y"i" on the
a"i" of
uantitative of
"e&ected ank
4.1 Job Part
4.1.1 Actual Task Part:
In the period of my three months internship program, I got a position and some
duties in Al Arafah Islami Bank Limited, Anowara Branch. My observation and
responsibilities were in
General Banking Department like opening & different types of DPS or FDR
opening (Deposit Schemes), fill up the Account Opining Form. I worked with
 44

Mr. Kamal uddin Officer of Al Arafah Islami Bank Limited, Anowara Branch
who manages the front desk. On that time, I mainly worked in Customer
Service Department & observed the rules and regulations of Deposit Schemes
and the procedure which they followed in the Deposit Section.

4.2 Job responsibilities:

There were several responsibilities carried out by me in general banking
division of Al Arafah Islami Bank Limited (Anowara branch). Every day I used
to start my job at 10:00am and it ended at 05:00pm. Within this time different
types of job were done by me and those are given below.

Chapter-5
5.1 Analysis on the basis of quantitative of selected bank

5.1.1 Bank wise deposit of 2019

Particular Amount(In million in Taka)

Islami bank Bangladesh 560669.30

 45

limited(IBBL)

Social islami bank limited (SIBL) 124535.01

Al arafah islami bank limited(AIBL) 166851.17

Bank wise deposit on 2019

2019
560696.3
600000

500000

400000 2014

300000
166851.17
200000 124535.01

100000

0
IBBL SIBL AIBL

Interpretation:
#bove graph shows that the
total amount of deposit of
IBB+ is higher than 2IB+ and
#IB+
 46

because of the epansion

of branches over the country
and delivery of superior
customer service.
!otal deposit of IBB+ is C3
%.'3 and 2IB+ is $C'C.3$
and #IB+ is $&C$.$E
Interpretation:
#bove graph shows that the
total amount of deposit of
IBB+ is higher than 2IB+ and
#IB+
because of the epansion
of branches over the country
and delivery of superior
customer service.
 47

!otal deposit of IBB+ is C3

%.'3 and 2IB+ is $C'C.3$
and #IB+ is $&C$.$E
Interpretation:

Above graph shows that the total amount of deposit of IBBL is higher than
SIBL and AIBL. Because of expansion of branches over the country and
delivery of superior customer service . Total desposit of IBBL is 560669.30,
And SIBL is 124535.01 and AIBL is 166851.17.

5.1.2 Initial Deposit To Open Current And Savings Accounts:

Particular IBBL SIBL AIBl

Current Account 1000 2000 5000

Savings Account 500 500 2000

Initial Deposit To Open Current And Savings Account

 48

5000
5000
4500
4000
3500
3000
Current
2500 2000 2000 Savings
2000
1500 1000
1000 500 500
500
0
IBBL SIBL AIBL

Interpretation

The initial amount to open a current account of IBBL is less than the other two
banks SIBL and AIBL, On the other hand the initial amount to open a savings
account in IBBL and SIBL is similar of Taka 500, Whereas AIBL’s initial
amount to open a savings account is higher than other two banks.
 49

5.11Financial Highlights:
1. Gross profit margin:

Net profit margin

0.18
0.16
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0

2016 2017 2018 2019 2020

The Gross profit margin of AIBL has change rapidly from 2016 to 2020.
In 2016 their gross profit margin was 0.12 and in 2020 gross profit margin
has speedily amplified 0.08. That is a good sign of development of this
bank.

2. Return of Asset:
Return of Assets
0.014
0.012
0.01
0.008
0.006
0.004
0.002
0
 50

2016 2017 2018 2019 2020

The return on asset ratio of AIBL has increased 0.011 in 2016 to 2020 year.
This is an actually good sign for AIBL because it shows that AIBL has
generated less income than by utilizing more amount of asset.

3. Return on equity:

Return of Equity

0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0

2016 2017 2018 2019 2020

ROE of this bank was lower in year 2015 (0.02) than year 2017(0.14) &
2018(0.1). At next Year in 2019 that was also increased this was 0.16. Return
on equity increased that is not good sign of investors.

Operating Profit of Al-Arafah Islami Bank:

 51

From the graph we can see that every year except 2010 Operating Profit of
Bank is BDT
3,223.27 million. In 2017 the Operating Profit of Al-Arafah Islami Bank was
BDT 6,955.77 Million and in 2019 it was 7,860.62 Million.

Chapter 6
Findings:
 52

Some of the findings are described below:

 Officer of the bank are equipped. Despite the fact that huge numbers of
them just know the working methodology of what they are doing
however don't have the foggiest idea about the reasoning behind doing
those.
 AIBL do forces an objective store for accumulation upon its
representatives. Each worker needs to go out with the end goal of store
accumulation, which they call "improvement reason". It is a viable
technique no inquiry concerning it, since numerous banks of our nation
depend on this strategy. Officers of the work area, where workload is
high, scarcely find the opportunity to go out for improvement reason and
dependably feel that their obligations for the association would not be
assessed except if they can demonstrate a decent measure of store
gathering against their name.
 The cash counters are congested which hamper day to day teller activities
and action become delayed.
 AIBL provides training but the facility isn’t sufficient especially for the
lower level officers.
 Problems are faced at the ATM booth due to poor network.

Recommendation:
On the basis of observation, SWOT analysis, Ratio analysis, and employee’s
comments I have some recommendations for Al-Arafah Bank Limited to
capture more market share and to make the inward condition more dynamic. I
trust these suggestions would assist them with competing with their rivals. Al-
Arafah Bank Limited has the Islamic rules and regulations. So I think they
 53

should follow those rules and regulations for their future betterment. Al-Arafah
Islami Bank Limited does not have enough advertisements for their products, so
Al-Arafah Islami Limited needs greater commercial to advance their items. AL-
Arafah Islami Bank Limited sets aside more opportunity for CIB report and
provoke benefit than alternate banks. So AIBL ought to do this sort of
employment inside a brief timeframe.
As per earnest observation some suggestions for the improvement of the
situations are given below:

 According to open another record AIBL must require continuously and

productive reports from new customers. It would be particularly valuable
both Bank and the customers.
 General working condition ought to be moved forward.
 The frame ought to be exact with the quality data to the purposes of the
customer rather pointless data.
 To recruit sufficient skilled manpower because the bank employees
should communicate properly with customers about their deposit and
other schemes.
 If the intrigued customers have legitimate documentation in support of
his/her character at that point there ought to be probation for staying away
from introducer.
 Proper preparing ought to be given to all representatives on customary
premise.
 They should deal with every one of the customers legitimate
administrations.
 They require precise process in real money counter to give client well and
quick offices.

Conclusion:
Islam is the most peaceful religion known throughout the world. Though the
concept of Islamic Banking is no longer new thing in the world. At present there
are six Islamic Banks working in our country. As I have completed my
internship at AI Arafah Islami Bank Limited . Al-Arafah Islami Bank Limited
intends to play a primary role in the financial activities of the country through
adjusted administration, imaginative practices, energetic progress and efficient
organization it has made an unmistakable stamp in the region of private keeping
 54

money division at this point. Through an imaginative credit policy, it is also

decisively occupied in the improvement of business, trade, and production.
Al-Arafah Islami Bank Limited maintains flow of funds from depositors to
investors. In doing so, this bank need to collect deposit from the depositors and
then distribute those as loan to the investors. Besides, this bank provide
assistance in international trade, money transfer, collection and payment of
utility and other bills, etc. all of which are fully customer oriented. On the other
hand promising individual representative development and improvement, the
bank likewise offers push to recognize and hold the human recourses who give
can conceivably be the successors of mission basic parts. The bank perceives
that movement masterminding and organization is basic to the continued with
advance. So the bank reliably reviews various levelled, divisional and bunch
capacity gaps to perceive, make and hold the successor in a propitious method
to meet solicitations without limits.