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Internship Report 2020
Internship Report 2020
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, Anowara Branch,
Chittagong.” It is a great opportunity for me to acquire practical
knowledge and experience on banking activities. It gives me
immense pleasure to compelet 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,
Amzad hosen
EB-163004
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 MR Amzad Hossain
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 anowara, 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.
Amzad hosen
ID EB-163004.
7
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 islami 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-
Arafah islami bank ltd, will definitely help me a lot in building my
future career.
8
TABLE OF CONTENT
Particulars page
Letter of Transmittal
Acknowledgement
Executive summary
CHAPTER ONE
Page
1.1 Introduction
1.3 Methodology
1.7 limitation
CHAPTER TWO
2.1 Historical Background of Al-Arafah Islami Bank Limited (AIBL) 14
Vision 15
Mission 15
Value 15,16
9
Commitments 16
2.2.2 Corporate Division/Department 16
2.2.3 Corporate Division 16
2.2.4 Ex Officio Director 17
2.2.5 Risk Management Committee 17
2.2.6 Audit Committee 17
2.2.7 Executive Committee 17
2.2.8 Shariah Supervisory Committee 17
2.3 Operational Details 18
2.4 Section and their Function 19
2.4.1 General Banking Division 19
2.4.1 (a) Customer Service 19
2.4.1 (b) Cash Department 19
2.4.1 (c) Accounts Department 20
2.5 Investment Division 21
10
CHAPTER THREE
3.1 Applied Framework 22
3.1.1 Bank 22
3.1.2 General Banking 22
3.2 GB Section 23
3.3 Electronic Fund Transfer 23
3.4 Automated Clearing House 23
3.5 Cheque 24
3.6 Deposit Product of AIBL 24
3.7 Fixed Deposit 24
3.8 Mudaraba Term Deposit 25
3.9 Electronic Products 25
CHAPTER FOUR
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
5.12 Findings 38
CHAPTER SIX
Recommendation 41
Conclusion 42
Bibliography 43
13
Chapter-1
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:
14
1.3 Methodology:
Broad Objective;
Chapter-2
Vision:
To be a pioneer in Islami 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 Shariah Based Banking Practices.
Quality financial services adopting the latest technology.
Fast and efficient customerservice.
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:
Ours bank is a customer focused modern Islamic Banking sound and
steady growth in bothmobilizing deposit and making quality Investment
to keep our position as a leading Islami bank in Bangladesh.
To deliver financial services with the touch of our heart to detail, small
and medium scale enterprises, as well as corporate clients through our
branches across thecountry.
Our business initiatives are designed to match the changing trade &
industrial needs of the clients. Swift A CASA E Customer Rights a AIBL
19
Corporate Division:
The whole corporate section actually leaded by the board of directors. Alhajj
Abdus Samad Labu is the chairman of board of directors and Alhajj Abdus
Salam is the vice chairman of board of directors.Alhajj Salim Rahman is the
chairman of Executive Committee and Hafez Alhajj md. Enayet ullah vice-
chairman of Executive committee. JB Badiur Rahman is the chairman of Risk
Management Committee. Jb.Mahabubul Alam is the chairman of Audit
committee.
2.3Operational Details:
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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
2.4.1 (b) Cash Department:
Different functions of cash department are:
i) General Accounting.
ii) Investment Accounting.
i) General Accounting:
General Accounting includes accounting for-general and administrative
expense, funding operation and fixed assets.
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.
Chapter 3
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.
3.1.3GB Sections:
There are various sections in this department, which are as follows: -
Cash Section
Accounts Opening Section
Cheque Clearing Section
Remittance Section
3.5 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.
Chapter 4
himself. Al Arafah Islami Bank Limited offers different types of account for
their target groups.
Chapter-5
32
Step 1 A Current holder of the bank. Authorities of the bank not beneath
the rank of an Assistant officer. A respectable individual of the
territory surely understood to the Manager/Sub Manager of the
Branch concerned.
Step 2 Receiving filled up application in bank's prescribed from
mentioning what type of account is desired to be opened.
Step 6 Account is opened and cheques book and pay —in- slip book is
given.
Table: Account Opening Procedure
Certificate of fuse.
Certificate of Commencement (in the event of Public restricted
organization).
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.
5.4 Cash Department:
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;
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.
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.
5.11Financial Highlights:
1. Gross profit margin:
0.02
0
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
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:
40
Return of Equity
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
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.
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.
5.12 Findings:
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.
Strengths:
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.
Certain Bangladesh Bank’s rules and regulations.
44
Chapter 6
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
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:
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
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.