The author is an intern of the previously mentioned program and the concerned organization is AIBL

The author is an intern of the previously mentioned program and the concerned organization is AIBL,

Introduction:

1.2 Background:

Bank and financial institution play an important role in financial inter mediation and thereby contribute to the overall growth in the economy. At present the financial system in Bangladesh consists of the central bank, nationalized commercial/specialized banks, private banks, foreign banks and other non-bank financial institution. This report is based on one commercial Bank that is the Al-Arafah Islami Bank Ltd.

1.4 Scope of the report

The scope of the organizational part covers the organizational structure, background, and objectives, functions, departmental and Business performance of AIBL as a whole and the main part covers foreign exchange department of AIBL.

1.5 Importance of the study

· To identify the problem of AIBL.

· To achieve practical knowledge of banking side of AIBL.

· To observe interrelated activities of general banking of AIBL.

· To gain practical knowledge about over all banking system & especially general banking and foreign exchange sector.

1.6 Objective of the Report:

The first objective of writing the report is fulfilling the partial requirements of the BBA program. In this report, I have attempted to give on overview of Al-Arafah Islami Bank Limited in general. Also in the major part, shown the practical approach of Foreign Exchange. Some following objectives of the report are as shown.

· To gain or achieve the practical Idea of banking System of AIBL.

· To observe the economic condition of AIBL

· To explain the general banking activities of AIBL.

· To explain the activities of foreign exchange of AIBL

· To identify the problems of AIBL prevailing in its banking system

· To suggest some possible recommendations to overcome the problems.

1.7 Methodology of the study:

In order to make the report more meaningful and presentable two sources of data and information have been used widely

‘’The primary sources’’ which are as follows Face-to-face conversation with the Executives and officers of Bank.

1. Informal conversation with the client.
2. Practical work exposures from the different desks of the various departments of the Branch covered.
3. Relevant file study as provided by the officer’s concerned.

‘’The Secondary Sources’’ of data and information are:

1. Annual Report of Al-Arafah Islami Bank Ltd.
2. Periodicals published by Bangladesh Bank.
3. Various books, articles, compilations etc. Regarding general banking functions.

Data Collection Method:

Secondary:

For the organization, part information has been collected through different published articles, journal.

Primary:

Formal questionnaire for data collection is not used. Information is collected through informal discussions with Relationship managers & respective Unit heads.

Tools used for analysis:

Ratio analysis tools: Using tools of ratio analysis are given bellow:

Net Working Capital = Current Assets – Current Liabilities

Current Ratio = Current Assets / Current Liabilities

Debt to Equity Ratio = Total debt / Shareholder’s Equity

Debt to Total Assets = Total debt / Total assets

ROE= Total Return /Total Equity

ROA= Total Return/Total Assets

Interest Coverage Ratio = EBIT/ Interest

Trend analysis tools:

Particulars	2002	2003	2004	2005	2006
Reserve Fund	155.43	231.89	488.96	542.22	835.98
Deposit	7163.00	8643.27	10108.28	11643.66	16775.33
Investment	6403.60	7571.54	8150.16	11474.41	17423.19
Profit after Tax and Provision	5071	127.06	154.76	262.90	470.02
Total Assets	8759.33	10886.82	12874.61	15336.89	21368.16
Earning per Share	312.42	251.10	263.67	387.80	550.24
Branch Growth Rate	40	40	40	41	46
Import	5162.51	7698.29	9337.49	12631.6	18821.4
Export	1894.77	3075.52	3639.34	4932.9	9142.7
Remittance	185.5	232.9	292.00	455.6	900.9

Population: All the branches of Al-Arafah Islami Bank Ltd. exist in Bangladesh.

Sample: Motijheel Branch of Al-Arafah Islami Bank Ltd. Observation period three months.

1.8 Limitation

Objective of the practical orientation program is to have practical exposure for the students. The tenure was for twelve weeks only, which was somehow not sufficient. After working whole day in the office it way very much difficult, it not impossible to study again the theoretical aspects of banking. On the other hand to prepare an internship report faced some limitations as follows.

· To collect data and information, it is a common tendency of any departments to keep back their departmental data and information.

· Unavailability to required published documents.

· Lack of experience and efficiency to prepare the standard report.

· I observed that unskilled persons are available in AIBL; they are not able to teach us various aspects.

CHAPTER TWO

Biography of AIBL

2.1 Status of the Bank:

Al-Arafah Islami Bank Ltd was established in 1995 under the companies Act, 1994 as a banking Company with limited Liability by shares. It is an interest frees Shariah bank of Bangladesh rendering all types of commercial banking service under the regulation of Bank Companies Act, 1991. The Bank conducts its business on the principles of Musaraka, Bai-Murabaha, Bai-muazzal and Fire Purchase transactions approved by Bangladesh Bank. Naturally its modes and operations are substantially different from those of other conventional commercial banks. There is a Shariah Council in the bank who maintains constant vigilance to ensure that the activities of the bank are being conducted on the precepts of Islam. The Shariah Council consists of prominent Ulema, reputed Bankers, renowned Lawyers and eminent Economist.

2.2 Vision of AIBL:

To become a leading banking institution and to play a pivotal role in the development of the country.

2.3 Mission of AIBL:

· 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 a welfare-oriented banking system.

2.3 Goal of the Bank:

The motto of the Al-Arafah Islami Bank Ltd is to explore a new horizon of innovative modern banking creating an automated and computerized environment providing one stop service and prepare itself to face the new challenges of globalization and 12^th century.

One of the main objectives of the bank is to be a provider of high products and services to cater to the needs of its corporate clients and provides a comprehensive range of financial services to national and multinational companies.

The growing technological revaluation in the bank is not so-distant future. We have already introduced Swift, Online Banking.

Board of Directors

SL	Name	Status with the Bank
01	Al-hajj Md. Anower Hossain	Chairman
02	Dr. Bahauddin Mohammad Yousuf	Vice- Chairman
03	Al-hajj A.Z.M Shamsul Alam	Director
04	Al-hajj Haroon-ar-Rashid Khan	Director
05	Al-hajj Nazmul Ahsan Khaled	Director
06	Al-hajj Ahmed Ali	Director
07	Al-hajj Abdul Malek Mollah	Director
08	Al-hajj Dr. D.M. Amanul Haque	Director
09	Al-hajj Mohammad Haroon	Director
10	Al-hajj Badsha Meah	Director
11	Al-hajj hafez Md. Enayetullah	Director
12	Al-hajj Kazi Md. Mofizur Rahman	Director
13	Al-hajj Mir Ahmed Sawdager	Director
14	Al-hajj Mohammad Yahya	Director
15	Al-hajj Badiur Rahman	Director
16	Al-hajj Mohammad Mahtabur Rahman	Director
17	Al-hajj Abdul Muktadir	Director
18	Al-hajj Kazi Abu Kausar	Director
19	Al-hajj Md. Fazlur Rahman	Director
20	Al-hajj Ahamedul Haque	Director
21	Al-hajj Abdus Samad	Director
22	Al-hajj Kh. Mesbahuddin Ahmed	Director from the general share holders group.
23	Al-hajj Mohd. Seraj-ud-dowla	Director from the general share holders group
24	M.A. Samad Sheikh	Ex-Officio

List of Chairman of the Executive Committee (E.C)

SL.NO	Name	Designation on
01	Al-hajj A.Z.M Shamsul Alam	Chairman
02	Al-hajj Md. Anowar Hossain	Chairman
03	Al-hajj Hafez Md. Enayetullah	Chairman
04	Al-hajj Md.Anowar Hossain	Chairman
05	Dr. Bahauddin Mohd. Yousuf	Chairman
06	Al-hajj A.Z.M.Shamsul Alam	Chairman
07	Al-hajj Hafez Md. Enayetullah	Chairman

Source – Annual Report of AIBL.

List of Chairman of the Shariah Council:

SL. No	Name	Designation
01	Shaikhul Hadith Moulana Azizul Haque	Chairman
02	Mufti Abdur Rahman	Chairman
03	Moulana Md. Aminul Islam	Chairman

Source – Memorandum and Articles of AIBL

			Manpower Position of AIBL
	Managing Director					Tea Boy

Assistant Officer

Senior Vice President

			Probationary Officer

			Officer

	Principle Officer				Senior Officer

Source – Service Rule of AIBL

2.5 Management System of AIBL:

The management team of the Bank consists of high motivated, well educated and high skilled and dynamic executives who have been contributing substantially in the continued growth and progress of the bank. The management is ably supported and assisted by well motivated and experienced officers and members of staff.

2.6 Financial Highlights of the company:

(In million taka)

Particulars	2004	2005	2006
Authorized Capital	1000.00	1000.00	2500.00
Paid up Capital	586.99	677.94	854.20
Reserve Fund	488.00	542.22	835.98
Shareholders Equity	957.26	1220.16	1690.18
Deposit	10108.28	11643.66	16775.34
Investment	8150.16	11474.41	17423.19
Import	9337.49	12631.60	1882.14
Export	3639.34	4932.90	914.27
Total Income	1120.85	1452.68	2172.48
Total Expenditure	771.96	904.48	1202.71
Profit before Tax	348.89	548.20	855.47
Profit after Tax	158.76	262.90	470.02
Income Tax	157.00	215.10	385.45
Total Assets	12874.61	15336.89	21368.17
Fixed Assets	195.17	208.00	215.11
Earning per share (Taka)	263.68	387.80	550.24
Profit Earning Ratio			4.89
Dividend per share	15.5%	26.00%	35%
No. of Shareholders	5379	5402	4487
Number of Employees	803	771	912
Number of Branches	40	41	46
Manpower per Branch	20	19	20

2.7 Feature of AIBL:

• All activities of the bank are conducted according to Islamic shariah where profit is the legal alternative to interest.
• The banks investment policy follows different modes approved by Islamic shareah based on Quaran & Sunnah.
• The bank is committed towards establishing welfare oriented banking system, economic upliftment of the law- income group of people, create employment opportunities.
• According to the needs and demands of the society and the country as a whole the bank invests money to different halal business. The bank participates in different activities aiming at creating jobs, implementing development projects taken by the government and developing infrastructure.

• The bank is committed to establish an economic system through social justice and equal distribution of wealth. It is committed to bring about changes in the underdeveloped rural areas for ensuring balanced socio economic development of the country through micro credit program, according to mudaraba system, the depositors are the partners of the investment income of the bank. During the period under review, 70% of the investment income has been distributed among the mudaraba depositors.
• To render improved services to the clients imbued with Islamic spirit of brotherhood, peace and fraternity and by developing an institutional cohesion.
• The bank is contributing to economic and philanthropic activities side by side. Al-Arafah English Medium Madrasah and AIBL Library are among mention worthy.

2.8 International Trade:

At the year of 2005, the bank experienced satisfactory growth in the International trade. At the end of 2004, the total amount of International Trade (export, import and Remittance) was 13268.83 million taka; which has increased at 35.81% to reach 18020.10 million taka in 2005. The total export of the bank was 3639.34 million taka in 2004, which has increased at 35.54 %

Growth rate to reach 4932.90 million taka in 2005, whereas the national growth was 15.70% during the same period. Similarly the amount of import has increased from 9337.49 million taka of 2004 to 12631.60 million taka in 2005, experiencing a growth rate of 35.27%. Last year the amount of remittance through the bank was 292.00 million taka, which grows to 455.60 million taka in the current year.

2.9 Correspondent Banking Relationship:

The main aim of Al-Arafah Islami Bank Ltd is to increase its foreign exchange business and in this connection we are doing international banking with all major banks of the world. At present we are maintaining correspondent banking relationship with 20 major reputed banks of the world.

2.10 Foreign exchange risk Management:

Foreign exchange risk is defined as the potential change in earnings arising due to change in market prices. International Division independently conducts the transactions and passing of their entries in books of accounts. All foreign exchange transactions are revalued at Mark-to Market rate as determined by Bangladesh Bank at the month-end. All Nostrum accounts are reconciled on monthly basis and outstanding entry beyond 30 days is reviewed by the Management for its settlement.

2.11 Nature of Business:

All kinds of commercial banking services are provided by the bank to the customers following the provisions of Banking Companies Act, 1991, Bangladesh bank’s directives and the principles of Islamic Shariah.

2.12 Capital Adequacy:

The Bangladesh Bank has fixed the ratio of capital adequacy against Risk-Weighted Assets at 9.00% in place of 8% in the month of September 2002. In 2002, the amount of total equity of the bank was 41.57 Crore taka, which stood at TK.85.56 Crore in the year 2003 and Taka 104.27 Crore in the year 2004. This year it stood at taka 130.56 Crore. At 31 December 2005, the capital adequacy ratio of the bank is 12.16 % against 14.56% at the same period of 2004.

2.13 Authorized and Paid Up Capital:

The Bank Company Act 1991 which amended in March 2003 includes a provision of raising the capital to a new level of TK.100 Crore for the commercial banks within March 2005. In compliance with the new provision, the bank has raised its capital from TK.41.56 crore in the year 2002 to TK.85.56 crore in 2003 by issuing a right share against each of the existing share in the year 2003 and declared 16% bonus dividend from the profit of the year 2003. The bank again declared 15.50% bonus dividend from the profit 2004. As a result the paid up capital of the stood at TK.67.79 Crore as at 31^st December 2005.Bank declared 26.00% Bonus dividend for the year 2005. As a result the paid up capital of the Bank stood at taka 85.42 crore as at 31^st December 2006.

2.14 Deposits

The total deposit of the bank was TK.16775.33 million at 31^st December 2006, of which bank deposit was 611.72 million taka and general deposit was 16163.61 million taka. At the same time in the last year 2005, the amount of total deposits was 11643.66 million taka. In this area the growth rate is 44.07%.

2.15 Activities of shariah council for the year-2006:

Shariah council consists of 6 members specialized in Fiqhul Muamalat as guideline given by Bangladesh bank to ensure whether all banking operations are transacted in accordance with Islami shariah i.e. Quran, Sunnah, Ijma and Iztihad.

Shariah council has managed, by the grace of almighty Allah, to contribute a lot to run all the business activities of the bank according to shariah guidelines., honorable members of the shariah council sit in 7 meetings in the year 2006 to discuss the matters placed before them by the board and management of the bank to give directive and suggestions in the field of shariah principles, shariah council advised everybody concerned to comply shariah requirements and render all out effort to increase the standard of service rendered to the standard of service rendered to the standard of service rendered to the clients.

Muraqibs of the council have visited all the 46 branches of the bank over the year to observe the shariah compliance, give necessary instructions on the spot and submitted report to the council. They have also submitted corrective measures to rectify the laws in implementing shariah guidelines into the banking operations and placed those to the bank management for further follow up. Besides, compensation received from different branches, interest received from correspondence bank of Nostro a/c as well as doubtful income amounting to Tk.14052662 advised to set aside from bank total halal income.

2.17 Mode of liability purchase of AIBL:

Investment:

At the end of the year 2006, the amount of investment of the bank was Tk.17423.19 million in comparison to tk.11474.41 million of the last year 2005. The amount of investment has increased 5948.78 million taka within this period, which is around 5184%. The bank extends investments to the clients under the following modes of investment under Islamic Shariah:

· Murabaha

Bai-Muazzal

Bai-Salam

Hire Purchase (HPSM)

Mudaraba

Musharaka

Qard

Special Investment

· Murabaha:

Murabaha mode of finance means purchase of commodities as per request of the client permissible by Sharia and sale thereof with profit to the client i.e. cost plus sale of a commodity to the investment client. The commodity is procured at the instance of the investment client from a third party/firm. Purchase price and profit are disclosed to the client. Goods are kept under bank’s custody as security and the client lifts the same gradually or at a time on payment of sale price of the commodity.

· Bai-Muazzal:

Bai-Muazzal means cost plus sale of the commodity on deferred payment basis against adequate collateral. The commodity is procured at the instance of the investment client from a third party as per firm agreement between the client and the bank and sale price( bank’s dues) is paid by the client within stipulated period of time. After having possession of the goods, the bank delivers the same to the client on credit which is required to be paid at a specified future date (adjust proportionately) with the progress of sale of goods within the given period.

· Bai-Salam (Advance Sale):

Under this mode, the bank buys the goods from the producer/supplier on payment in advance after entering a firm contract and the goods are delivered/ supplied to the bank at a future specified date. In the contract of Bai- Salam quantity, quality, shape, size, price and time of delivery of the goods are clearly specified.

· Hire Purchase Sherkatul Melk (HPSM):

Durable items, like vehicle, machinery, equipment, etc., are purchased on equity participation by both the bank and the client and the same is handed over to the investment client on rental basis entering into an agreement with the client that principal amount shell be paid within a certain period of time by installments. Rent is to be paid on the principal outstanding till the ownership is transferred to the client on payment of the entire principal amount.

· Al-Arafah Islami Bank ltd. offers following categories of HPSM:

Entire capital is provided by the bank against firm assurances of the entrepreneur that he will manage the business properly and efficiently. The entrepreneur manages the business as Manager. Profit is shared to the bank and entrepreneur as per agreed ration while the loss, if any, is borne by the bank alone. Bank can supervise such investment if and when desired/ required but cannot participate in the management of the business.

· Industrial

· Commercial

· Transport

· DDIS

· SSBI

· HPSM Real State

· Staff House Building Investment

· HPSM Car (for executives of AIBL)

· Musharaka:

Capital is provided by both bank and investment client on the basis of Shirkatul Innan principal of Islamic Shariah Partnership. Profit is shared as per agreed ratio and equity ratio. The bank supervises the utilization of investment and participates in decision making.

· Quard

The bank also allows Qard in very special cases on obtaining proper security. Service charge equal to cost of fund is recovered on Qard amount.

2.18 Grameen & Small Investment Scheme:

An Investment product ‘’Grameen and Small Investment’’ is in operation. The objective of this project is to introduce Shariah based banking system in rural and village area, creating employment through financing to low income group build up savings attitude improvement of living standard of rural low income mass people, creating opportunity to carry out Islamic lifestyle by way of alleviating poverty and at the same time to make other financially established by investing in small introduced in two branches of AIBL i.e. Gallai, Comilla and Ruposhpur, Srimongol. There is a plan to expand this project gradually in other rural branches.

Within the scope of Grameen and Small Investment scheme, investment has been made in the following sectors:

1. Fisheries
2. Poultry Rearing
3. Cattle Rearing
4. Goat Rearing
5. Beef Fattening /Poultry Firm
6. Processing of Muree
7. Processing of sweets
8. Stationery business
9. Vegetables business
10. Tailoring business
11. Cultivation of Betle leaf
12. Work of Bamboo and Cane
13. Cultivation of Principle
14. Cultivation of Lemon
15. Processing of Crockery’s
16. Purchasing of Rickshaw
17. Small business i.e. Paddy, Rice, Grocery
18. Medicine shop and Shoe Stores
19. Library business

Leading Product

1. Consumer Savings Scheme
2. Hire Purchase
3. Rural Credit Scheme
4. Trade Finance
5. Working Capital Program
6. Special Credit Scheme on RMG
7. Project Finance
8. Finance For Agro Processing Industry

CHAPTER THREE

Theoretical Background/ Literary Review

3.0 Introduction:

Bank is nothing but an intermediary between lender (surplus unit) and borrower (deficit unit). Savings and deposits are the main strength of the banks to provide loan. And the interest earned from the difference borrowing and lending is the major portion of banks income. Banks also earns from variety of operation. Branch banking includes four operational divisions in Al-Arafah Islami Bank Limited. They are:

1. General Banking
2. Accounts Division
3. Loan And Advance
4. Foreign Exchange

3.1 General Banking:

General banking is the front side banking service department. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, these are no relation between banker and customers with who bank are doing its business frequently. Al-Arafah Islami Bank Ltd General Banking is divided into five sectors.

1. Account opening section
2. Bills and clearing Section
3. Remittance Section
4. Deposit Section
5. Cash Section

Initially all the accounts are opened through deposit money by the customer and these accounts are called deposit account. Normally a person needs to open an account to take services from the bank. Without opening an account, one cannot enjoy variety of services from the bank. Thus, the banking usually begins through the opening of the account with the bank.

Bank accounts are mainly of three (3) types:

1. Current Deposit Account
2. Saving Bank Account
3. Fixed or Time Deposit

There are also some other types of account facilities provided by the bank. These are:

a. AIBL Special Savings Scheme

b. AIBL Regular Deposit Program

c. Mudaraba Lakhopati Savings Scheme

d. Mudaraba Millennium Savings Scheme

e. Mudaraba Katipoti Savings Scheme

1. Current Deposit Account:

A current account is a running and active account, which may be operated upon any number of times during a working day. It is purely demand deposit account because the bank is bound to pay the amount to the accountholder on demand at any time within the banking hour. There is no restriction on the number and the amount of withdrawals from a current account. Generally the minimum amount to be deposited initially is tk. 1000/- for opening a current account.

2. Saving Bank Account:

A saving account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future need and intend to earn an income from their savings, it encourages savings of non-trading persons, institutions, society and clubs etc. The deposits are mostly small amounts. Frequently withdrawals are not allowed.

Other Types of Deposit Accounts:

There are also some other types of account facilities provided by the bank. These are:

a. AIBL Special Savings Scheme

b. AIBL Regular Deposit Program

c. Mudaraba Lakhopati Savings Scheme

d. Mudaraba Millennium Savings Scheme

e. Mudaraba Katipoti Savings Scheme

AIBL Special Savings Scheme:

This scheme is well known in the market as a well named Deposit Pension Scheme in other banks. If a client deposit an amount of fixed on the monthly basis often a few years i.e. 5 and 10 years he gets amount at a time. The bank offers approx 12% interest for this scheme particulars of which as follows:

SL NO	Amount to be Deported	Total Amount After 5 Years	Total Amount After 5 Years	Rate of Interest
01	500.00	40,500.00	1,14,000.00	11%
02	1000.00	81,000.00	2,28,000.00	12%
03	2000.00	1,62,000.00	4,56,000.00	-do-
04	5000.00	Cumulative Basic		-do-

AIBL Regular Deposit Program:

RDP is a special services plan that follows to save a monthly basic and get a handsome amount at maturity. RDP account gives you the convenience of saving regularly in time with cherished dream RDP in the right solution

To open RDP account all you need is to be over 18 Years of age and a Bangladesh citizen you can open a RDP account within 10 days of the month by filling up a prescribed account opening form at any branch of AIBL.

Term of AIBL Regular Deposit Program:

You need to open a RDP account for 3 or 5 Years i.e. 36 and 60 equal monthly deposits respectively.

Minimum and Maximum Monthly Deposit Amount:

Under the RDP you can chose between a minimum monthly deposit amount of TK.300 and maximum amount of TK.1000

Monthly Deposit Amount and Receivable after 3/5 Years:

SL NO	Installment Amount	Matured Value 3 Years	Matured Value 5 Years
01	300.00	12,500.00	22,800.00
02	500.00	20,900.00	38,000.00
03	1,000.00	41,800.00	76,000.00
04	2,000.00	83,600.00	1,52,000.00
05	2,500.00	1,04,500.00	1,90,000.00
06	5,000.00	2,09,000.00	3,80,000.00
07	10,000.00	4,18,000.00	7,60,000.00

Mudaraba Lakhopati Savings Scheme:

In this scheme if a parson Deposit an amount for a period of 3 Years, 5 Years, 8 Years, and 12 Years he will get interest for the Deposit on the monthly basis in the following rate:

Year of Account	Monthly Installment Amount	Total Taka
3 Years	2,375.00	1,00,000.00
5 Years	1,275.00	1,00,000.00
8 Years	670.00	1,00,000.00
10 Years	460.00	1,00.000.00
12 Years	335.00	1,00,000.00

Mudaraba Millennium Savings Scheme:

Year of Account	Monthly Installment Amount	Total Taka
3 Years	23,950.00	10.00 Lack
4 Years	16,950.00	10.00 Lack
5 Years	12,750.00	10.00 Lack
6 Years	9,950.00	10.00 Lack
7 Years	8,000.00	10.00 Lack
10 Years	4,600.00	10.00 Lack
12 Years	3,345.00	10.00 Lack
15 Years	2,170.00	10.00 Lack
20 Years	1,150.00	10.00 Lack

Mudaraba Katipoti Savings Scheme:

Year of Account	Monthly Installment Amount	Total Taka
3 Years	2,39,500.00	1.00 Kati
4 Years	1,69,500.00	1.00 Kati
5 Years	1,27,500.00	1.00 Kati
6 Years	99,500.00	1.00 Kati
7 Years	80,000.00	1.00 Kati
10 Years	46,000.00	1.00 Kati
12 Years	33,450.00	1.00 Kati
15 Years	21,845.00	1.00 Kati
18 Years	14,330.00	1.00 Kati
20 Years	11,100.00	1.00 Kati

Features and Regulations of the Program:

1. Deposit range is from 10,000 thousand to 25,000 Lacs.
2. Term of Deposit 6 Years 6 months
3. Double plus amount will be paid after completion of the 6 years 6 months term
4. Income Tax may be deducted as imported by the government on the interest amount at the time of maturity/ Payment.

• Remittance of Fund Section:

Remittance of fund is ancillary services of ABIL like other commercial Banks. It aids to remit fund from one place to another place on behalf of its customers as well as non-customer of bank. AIBL has its branches in the major cities of the country and therefore, it service one of the best mediums for remittance of funds from one place to another.

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

1. Pay order/ Bankers Cheek
2. Demand Draft
3. Telegraphic Transfer

Pay Order (P.O.):

In the prescribed from the purchaser instruct the issuing branch to pay a specified sum of money to the payee preferably by crediting his account or in cash by the same branch.

Demand Draft (D.D):

1. The demand draft is a written order by one branch of a bank upon another branch of the same bank to pay a certain sum of money to or to the order of a specified person
2. A draft is always an order and never a bearer instrument
3. It is a negotiable instrument like a cheque i.e. it can be crossed, endorsed, collected, and paid in due course like a chaque
4. D.D. may be issued to any person and it can also be issued in favor of a firm, company or local authority on written request duly signed by the individual or the representative.

Telegraphic Transfer (T.T.):

It is an instruction duly tested convey by telex/fax/telegram/telephone/express/mail etc. to the drawee for paying a certain sum of money to a specified person.

• Fixed Deposit Section:

Fixed deposit is one which is repayable after the expiry of a predetermined of a predetermined period fixed by him. The period varies from 3 months, 6 month, 1 year and 3 year. These deposits are not repayable on demand but they are withdrawing able subject to a period of notice. Hence it is a popularly known as ‘’Time Deposit’’ or ‘’Time Liabilities’’ Normally the money on a fixed deposit is not repayable before the expiry of a fixed period.

• Cash Section:

The cash section of any branch plays very significant role in general banking department because it deals with most liquid assets. The principle branch has an equipped cash section with modern electronic machinery with fully computerized environment and gives one stop counter service. This section services cash from depositors and pay cash against chaques, draft, P.O and play in slip over the counter.

3.2 Account Division:

Account department is a department with which cash and every department is related. It records the profit and loss A/C and statement of assets and liabilities by applying ‘’Golden Rules’’ of book-keeping i.e. GAAP. The functions of it are theoretical based. AIBL Principle Branch records its accounts daily, weekly, and monthly every record.

General Account:

The account that is to be maintained with H/O of AIBL for the purpose of settlement of inter-branch transactions. General A/C is an important one which has to be maintained by each branch of AIBL.

Indeed general A/C is a record of originating and responding transactions among inter-branches of the same bank. All types of assets and liabilities of one branch with another one are settled through this account. Branch can know how much liable with H/O the branch is. The debit and credit balance shows assets and liabilities of the respective branch.

Following are the journal entries under AIBL general account:

1. OBC paid by original branch (AIBL Principle Office) to responding branch (say, AIBL Dhanmondi) through Inter-Branch Credit Advice.

a. For original branch (Principle Branch)

Party’s A/C———————Dr.

AIBL General A/C—————–Cr.

b. For responding branch (Dhanmondi)

AIBL General A/C————Dr

Party’s A/C————————-Cr.

2. O/W (outward) clearing chaques lodged through IBDA (Inter-branch debit advice).

a. For original branch (Principle Branch)

AIBL General A/C—————Dr.

Part’s A/C—————————–Cr.

b. For responding branch (Dhanmondi)

Other Bank A/C——————-Dr.

AIBL General A/C———————Cr.

3. Inward clearing chaques paid by original branch (AIBL Principle Office) to responding branch (say AIBL Dhanmondi) through IBCA (Inter-branch credit advice)
4. TT (Telegraphic Transfer)

a. For original branch (Principle Branch)

Party’s A/C———————Dr.

AIBL General A/C—————–Cr.

b. For responding branch (Dhanmondi)

AIBL General A/C—————-Dr.

Party’s A/C—————————–Cr.

5. TT (Telex transfer) original by AIBL (Principle Branch) to other branch of AIBL when party is not A/C holder (through IBCA).

a. For original branch (Dhanmondi Branch)

Party’s A/C————————-Dr.

AIBL General A/C———————Cr.

b. For responding branch (Dhanmondi)

AIBL General A/C—————–Dr.

Party’s A/C——————————Cr.

6. Cash received from AIBL Principle office (through IBCA)

a. For original branch (Principle office)

Cash A/C—————————-Dr.

AIBL General A/C———————Cr.

b. For responding branch (principle office)

AIBL General A/C—————–Dr.

Party’s A/C (Principle Branch) ——-Cr.

Extract:

Extract is a statement of all originating and responding transactions among inter-branches through inter branches debit and credit advice. At the end of the day, all the debit and credit advices of different department come to accounts department. It makes extract in light of all advices.

Debit Voucher:

For making cash payment like entertainment, conveyance, and account department writes a debit voucher. Amount is withdrawn through cash section by presenting debit voucher.

3.3 Credit Department:

One of the core functions of commercial banks is to create the claim against individual borrower or real the purpose of sanctioning credit bank grants loan in the form of different securities. By the primary security we mean the financial claim of holder against the real sector of economy. In banking the sector the financial claim of bank against issuer called investors, borrowers and difficult units. This core function of a bank is performed by the credit department of the bank. In this case the relationship of bank and customers is that of the creditors and debtor.

Type of loans and Advances offered by AIBL

1. Secured Overdraft (SOD)
2. Loan (General)
3. House Building Loan (Staff)
4. Demand Loan
5. Transport Loan
6. Industrial Credit
7. House Building Loan (General)
8. Transport Loan (Staff)
9. Cash Credit (Hypothecation)
10. Past Due Bills
11. Loan against Trust Receipt (LTR)

Lease Finance:

AIBL offered Lease finance facilities to its valued clients with a view to facilitate clients to acquire equipments and machineries without investing any fund in spite of playing fixed lease rentals. Fixed fewer rentals can be tailored both in terms of amount and timing to the profit and cash flow position of the Lease-Holder. At the end of the lease contract the lease assets back to the clients with a nominal and depreciated value.

Facilities of Lease:

1. Free the Capital tied in capital expenditure
2. Leasing allows utilizing the capital elsewhere to general higher profits it also reduce cash out flow
3. The equipment that leased does not appear on clients balance sheet, clients financial ratios improve
4. To avoid budgetary constraints in capital expenditure
5. Lease rentals are treated as revenue expenditure and are entirely deduct able for tax purpose. This provides a greater tax benefit in comparison to borrowing

Item of Leasing:

1. Any category of equipment and Machinery
2. Office automation equipments
3. Medical Treatment diagnosis
4. Vehicles for transportation etc.

Restricted Business:

1. Production, Marketing, Trading of alcoholic, narcotic and other intoxicating drug of liquor
2. Production and Trading of any item banned by the Government
3. Any ac