Report on Al-Arafah Islami Bank Ltd

1.1 Origin of the Report

Al-Arafa Islami Bank Limited is a place where I could learn the business dealings. This organization has created a positive image to the customer mind by providing better service. This Bank has introduced some odern Islamic Banking !cheme that has high market demand. As it maintain the pace with the competitive business world" its activities" culture" philosophy and style leads an intern student to be the best at any field of working life. #ith this view" during my internship I was assigned to $ilkusha branch" Al-Arafah Islami Bank Ltd" with other activities I specially tried to observe the overall banking procedure and function of this branch.

1.2 Background

%inancial institution and banks play an important role in financial inter mediation and thereby contribute to the overall growth in the economy. &resently 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 or AIBL.

1.3 Ob ecti!e

The primary ob(ective of writing the report is fulfilling the partial re)uirements of the BBA program. In this report" I*ve attempted to give an overview of Al-Arafah Islami Bank Limited in general. Also in the ma(or part" I have shown the practical approach of %oreign +,change. !ome following ob(ectives of the report are as shown To present an overview of Al-Arafah Bank Ltd. To present the current situation of $ilkusha branch. To show Islamic banking background of this era as well as of this country. To present Islamic perspective of credit. To show present condition of investment.
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 To gain or achieve the practical Idea of banking !ystem of AIBL To observe the economic condition of AIBL To e,plain the general banking activities of AIBL. To e,plain the activities of foreign e,change of AIBL

To identify the problems of AIBL prevailing in its banking system To suggest some possible recommendations to overcome the problems.

1." #ethodolog$

To complete this report I*ve followed a systematic study which include working" inspecting and talking to the e,ecutives at different levels of the organization to know the present scenario of the banking practice. To facilitate make the report more meaningful and presentable two sources of data and information have been used widely-

The primary sources which are as follows .nceremonious conversation with the client. /ealistic work e,posures from the different desks of the various departments of the Branch covered. /elevant file study as provided by the officer*s concerned. %ace to face conversation with the +,ecutives and officers of bank. The Secondary Sources of data and information are as follows Annual /eport of Al-Arafah Islami Bank Ltd. &eriodicals published by Bangladesh Bank 0arious books" articles" compilations etc" regarding general banking functions. #ebsites. !tatement affairs.

1.% Limitation

The report is accompanied with the following limitations Access to data regarding different performance indicators of Al-Arafah Islami bank Ltd. The report is mainly based on the secondary data which published by different organization as annually" half-yearly" monthly" weekly and daily. Time constraints are additional limitations of this report. $ue to some legal obligation and business secrecy banks are reluctant to provide data. %or this reason" the study limits only on the available published data and certain degree of informal interview. The bankers are very busy with their (obs which lead a little time to consult with. %inally" some recent data which were needed to enrich this report but the unwillingness of the e,ecutives of the bank due to confidentiality was made my report limited to data content.

1.& 'cope of the Report

This report will cover an organizational overview of Al-Arafah Islami Bank Limited.it will give a wide view of different stages of operational procedure of Al-Arafah Islami Bank Limited" starting from the investment application to investment disbursement and the comparison between standard and e,isting credit appraisal system of a Bank. Then the report covers %oreign e,change operation and 1eneral Banking as an Islamic Bank.

2.1 (efinition of Islamic Banking

Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law 2!hariah3 and its practical application through the development of Islamic economics. !hariah prohibits the payment of fees for the renting of money 2/iba" usury3 for specific terms" as well as investing in businesses that provide goods or services considered contrary to its principles 24araam" forbidden3. #hile these principles were used as the basis for a flourishing economy in earlier times" it is only in the late 56th
3

century that a number of Islamic banks were formed to apply these principles to private or semi-private commercial institutions within the uslim community.

The #orld Islamic Banking 7onference held annually in Bahrain since 899: is the uni)ue platform internationally recognized as the largest and most significant gathering of Islamic banking and finance leaders in the world.

According to Islamic Banking Act of alaysia" an Islamic bank is a ;company" which carries on Islamic banking business" Islamic banking business means banking business whose aims and operations don*t involve any element which is not approved by the religion Islam.< $r. =iauddin Ahmed says" ;Islamic banking is essentially a normative concept and could be defined as conduct off banking in consonance with the ethos of the value system of Islam.<

It appears from the above definitions that Islamic banking is systems of financial intermediation that avoids receipts and payments of interest in its transactions and conduct its operations in a way that it helps achieve the ob(ectives of an Islamic economy. Alternatively" this is a banking system whose operation is based on Islamic principles of transactions of which profit and loss sharing is ma(or feature" ensuring (ustice and e)uity in the economy. That is why Islamic banks are often known as profit and loss sharing banks.

2.2 )heoretical *oncept of Islamic Banking

7onventional banking is essentially based on debtor-creditor relationship between depositors and the bank in the one hand and between the borrowers and the bank on the interest is considered as the price of credit" reflecting the opportunity cost of money. Islam" on the other hand" considers loan to be given or taken" free of charge" to meet contingency and that the creditor should not lake any advantage of the borrower. The money is lent out on the basis of interest" more often it happens that it leads to some kind of in(ustice. The first Islamic principle underlying such kinds of transactions is that ;deal not un(ustly and ye shall not be dealt with un(ustly<. 4ence" commercial banking in an Islamic framework is not based on debtor-creditor relationship. The second principle regarding financial transactions in Islam is that there should not be any reward without risk-taking. This principle is applicable both to labor and capital. As no payment is allowed to labor unless it is applied to work" no reward for capital should be allowed unless it is e,posed to business risks.
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Thus" financial intermediation in an Islamic framework has been visualized on the basis of the above principles. 7onse)uently financial relationships in Islam have been participatory in nature. !everal theorists suggest that commercial banking in an interest-free system should be organized on the principle of profit and loss sharing. The institution of interest is thus replaced by a principle of participation in profit and loss. That means" a fi,ed rate of interest is replaced by a variable rate of return based on real economic activities. The distinct characteristics which provide Islamic banking with its main points of departure from the traditional interest-based commercial banking system are- 2a3 the Islamic banking system is essentially a profit and loss sharing system and not merely an interest-free 2/iba3 banking system> and 2b3 investment 2loans and advances in conventional sense3 under this system of banking must serve simultaneously both the interest of the investor and those of the local community. The financial relationship as pointed above is referred to in Islamic (urisprudence as Mudarabah.

2.3 (istinguishing +eatures of Islamic Banking An Islamic bank has several distinctive features as compared to its conventional counterpart. !i, essential differences as below I. Abolition of Interest ,Riba-. !ince /iba is prohibited in the 4oly ?uran and interest in all its form being akin to /iba as" confirmed by %ukaha and uslim economists with rare e,ceptions" the first distinguishing feature of an Islamic bank must be that it is interest-free" while the abolition of /iba would be the first and essential difference between the conventional interest-based commercial banks and Islamic banks" if would not the constitute the only difference between them. The nature" outlook and operations of an Islamic bank would have to undergo a complete transaction. II. Adherence to /ublic Interest. Activity of commercial banks being primarily based on the use of public funds" public interest rather than individual or group interest will be served by Islamic commercial banks. The Islamic banks should use all deposits" which come from the public for serving public interest and realizing the relevant socio-economic goals of Islam. They should play a goaloriented rather than merely a profit-ma,imizing role and should ad(ust themselves to the different needs of the Islamic economy. III. #ulti-/urpose Bank. Another substantial distinguishing feature is that Islamic banks will be universal or multi-purpose banks and not purely commercial banks. These banks are conceived to be a crossbreed of commercial and investment banks" investment trusts and investment management institutions and would offer a variety of services to their customers. A substantial part of their financing would be for specific pro(ects or ventures. Their e)uity-oriented investments could not permit them to borrow short and lend long. This should
5

tend to make them less crisis-prone compared to their capitalist counterparts. !ince the overnight" call loan or very short-term inter-bank market may be available to them only to a limited e,tent" they may have to make a greater effort to match the maturity of their liabilities with the maturity of their assets. I0. #ore *areful 0!aluation of In!estment (emand. Another very important feature of an Islamic bank is its very careful attitude towards evaluation of applications for e)uity oriented financing. It is customary that conventional banks evaluate applications" considers collateral and avoids risks as far as possible. Their main concern does not go beyond ensuring the security of their principle and interest receipts. !ince the Islamic bank has in built mechanism of risk-sharing" it would need to be careful more careful. It adds a healthy dimension in the whole lending business and eliminates a whole range of undesirable lending practices. 0. 1ork as *atal$st of (e!elopment. &rofit-Loss-!haring being a distinctive characteristic of an Islamic bank" if fosters closer relations between banks and 0I. 0ntrepreneurs. It helps develop financial e,pertise in non-financial firms also enables the banks to assume the role technical consultants and financial advisors and act as catalysts in the process of industrialization and development. The bank would take care of all the responsible and agreed financial needs of their clients thus relieving them of the need to run around for funds to overcome their normal li)uidity shortages. 2." *on!entional Banking 2s Islamic Banking 7onventional banking is based on the debtor-creditor relationship between the depositors and the bank on the one hand" and between the borrowers and the bank on the other. Interest is considered to be the price of credit" reflecting the opportunity cost of money. Islamic Banking" on the other hand" considers a loan to be given or taken" free of charge" to meet any contingency. Thus in Islamic Banking" the creditor should not take advantage of the borrower. #hen money is lent out on the basis of interest" more often it happens that it leads to some kind of in(ustice. The first Islamic principle underlying such kinds of transactions is that ;deal not un(ustly" and he shall not be dealt with un(ustly<. 4ence" commercial banking in an Islamic framework is not based on the debtor-creditor relationship. The second principle regarding financial transactions in Islam is that there should not be any reward without taking a risk. This principle is applicable to both labor and capital. As no payment is allowed for labor" unless it is applied to work" there is no reward for capital unless it is e,posed to business risk. Therefore" financial intermediation in an Islamic framework has been developed on the basis of the above two principles. 7onse)uently financial relationships in Islam have been participatory in nature. !everal theorists suggest that commercial banking in an interest-free system should be organized on the principle of profit and loss sharing. The institution of
6

interest is thus replaced by a principle of participation in profit and loss. That means a fi,ed rate of interest is replaced by a variable rate of return based on real economic activities. The distinct characteristics" which provide Islamic banking with its main points of departure from the traditional interest-based commercial banking system" area. The Islamic banking system is essentially a profit and loss sharing system and not merely an interest 2/iba3 banking system> and b. Investment 2loans and advances in the 7onventional sense3 under this system of banking must serve simultaneously both the benefit to the investor and the benefit of the local community as well. The financial relationship as pointed out above is referred to in Islamic (urisprudence as udaraba. 2.% (istinction bet3een the *on!entional 4 Islamic Banking

*on!entional Banking

Islamic Banking

8. The functions and operating modes of 8. The functions and operating modes of conventional banks are based on Islamic banks are based on the principles manmade principles. of Islamic Shariah. 5. The investor is assured of a 5. In contrast" it promotes risk sharing predetermined rate of interest. between provider of capital and the user of funds. @. It aims at ma,imizing profit without @. It also aims at ma,imizing profit but any restriction. sub(ect to Shariah restrictions. :. It does not deal with Zakat. :. Islamic banks collect and distribute Zakat.

A. Leading money and getting it back A. &articipation in partnership business is with interest is the fundamental function the fundamental function of the Islamic of the conventional banks. banks. B. Its scope of activities is narrower B. Its scope of activities is wider when when compared with an Islamic bank. compared with a conventional bank. It is" in effect" a multi-purpose institution. C. It can charge additional money in C. The Islamic banks have no provision to case of defaulters. charge any e,tra money from the defaulters. D. In it very often" bank*s own interest D. It gives due importance to the public becomes prominent. It makes no effort interest. Its ultimate aim is to ensure
7

to ensure growth with e)uity.

growth with e)uity.

9. %or interest-based commercial banks" 9. %or the Islamic banks" it is borrowing from the money market is comparatively difficult to borrow money relatively easier. from the money market. 86. !ince income from the advances is fi,ed" it gives little importance to developing e,pertise in pro(ect appraisal and evaluations. 86. !ince it shares profit and loss" the Islamic banks pay greater attention to developing pro(ect appraisal and evaluations.

88. The conventional banks give greater 88. The Islamic banks" on the other hand" emphasis on credit-worthiness of the give greater emphasis on the viability of clients. the pro(ects. 85. The status of a conventional bank" in 85. The status of Islamic bank in relation relation to its clients" is that of creditor to its clients is that of partners" investors and debtors. and trader. 8@. A conventional bank guarantee all its deposits. has to 8@. !trictly speaking" and Islamic bank cannot do that.

3.1 Background of the Organi5ation

Islam provides us a complete lifestyle. ain ob(ective of Islamic lifestyle is to be successful both in our mortal and immortal life. Therefore in every aspect of our life we should follow the doctrine of Al-?ur*an and lifestyle of 6a5rat #uhammad ,'m.- for our supreme success. Al-Arafah Islami Bank started its (ourney in 177% with the said principles in mind and to introduce a modern banking system based on Al-?ur*an and !unnah. Al-Arafah Islami Bank incorporated in Bangladesh as a banking company in 899A with limited liability by shares. It started business on 5C !eptember of that year with an authorized capital of Tk 8"666 million. At inception" its paid up capital was Tk 868.56 million divided into 868"566 ordinary shares of Tk 8"666 each. 5@ sponsors of the bank subscribed the total issued capital. In 5666" the paid up capital of the bank increased to Tk 5A@ million" of which Tk 85B.A6 million were paid by the promoters'sponsors and Tk 85B.A6 million by the general public. The bank is listed in the two of the country and has offered 85B"666 shares for subscription and trading by the public. Al-Arafah Bank is an interest-free Shariah bank and its modus operandi is substantially different from those of regular commercial banks. The bank however" renders all types of commercial banking services under the regulation of the Bank 7ompanies Act 8998. It conducts its business on the principles of musharaka, BaiMurabaha, bai-muajjal and hire purchase transactions. A !hariah 7ouncil of the bank
8

maintains constant vigilance to ensure that the activities of the bank are being conducted according to the precepts of Islam. A group of established" dedicated and pious personalities of Bangladesh are the architects and directors of the Bank. Among them a noted Islamic scholar" economist" writer and e,bureaucrat of Bangladesh government r. A.=. !hamsul Alam is the founder chairman of the bank. 4is progressive leadership and continuous inspiration provided a boost for the bank in getting a foothold in the financial market of Bangladesh A group of 8@ dedicated and noted Islamic personalities of Bangladesh are the member of Board of $irectors of the bank. They are also noted for their business acumen. Al-Arafah Islami Bank Ltd. has "& branches and a total of 86@@ employees 2as of $ecember 566D3. Its authori5ed capital is )aka 2%88 millions and the paid-up capital is )aka 11%3.19 millions. #isdom of the directors" Islamic bankers and the wish of Almight$ Allah make Al-Arafah Islami Bank Ltd. most modern and a leading bank in Bangladesh.

3.2 2ision

To be the pioneer bank in the banking arena of Bangladesh under the Shariah guidelines and contribute significantly to the national economy.

3.3 #ission

To launch a welfare-oriented banking system. To invest through different modes that is acceptable under Islamic !hariah. To allow customer deposits on profit-loss sharing basis. To perform interest free banking. To found participatory banking instead of banking on debtor creditor relationship. To display team spirit and professionalism. To provide high )uality financial services in e,port and import trade. To maintain corporate and business ethics.
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3." :oal and Ob ecti!e of AIBL

The ma,im of the Al-Arafah Islami Bank Ltd 2AIBL3 is to discover a new horizon of innovative contemporary banking creating an automated and computerized environment providing one stop service and prepare itself to countenance the new challenges of globalization and 85th century. Ene of the main ob(ectives 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-outlying future. It has previously introduced !wift" Enline Banking.

3.% 'pecial features of the AIBL

As an Islami bank" we are singular in every positive aspect. #e provide a bunch of state-ofart banking services within the wide bracket of Shariah. #e are uni)ue with our products" strict with our principle and uncompromising with our honesty. 4ere are some special features of us that make us notable in Islami banking sector. All activities of AIBL are conducted under a profit'loss based system according to Islamic !hariah to get the nation rid of .sury. Its investment policies under different modes are fully !hariah compliant and well monitored by the board of !hariah 7ouncil. $uring the year 566C" C6F of the investment income has been distributed among the udaraba depositors. In 566D" AIBL has included online banking in its wide range of services. Bangladeshi software has been introduced in this feature to promote the local developers. AIBL regularly arranges its A1 s 2Annual 1eneral eeting3. #henever needed +1 s 2+,traordinary 1eneral eeting3 are also arranged. #e regularly pay dividend to our valued shareholders. %or the year of 566C" we declared 56F bonus dividend to our shareholders. #e believe in providing dedicated services to the clients imbued with Islamic spirit of brotherhood" peace and fraternity. The bank is committed towards establishing a welfare-oriented banking system to meet the needs of low income and underprivileged class of people.
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 The Bank upholds the Islamic values of establishment of a (ustified economic system through social emancipation and e)uitable distribution of wealth. %ollowing the Islamic traditions" it is assisting in the economic progress of the socially deprived people> in the creation of employment opportunities and in promotion of rural areas to ensure a balance development of the country. The Bank believes in social and philanthropic activities and has established AIBL +nglish edium adrasha and AIBL Library. ore endeavors will inshallah follow in future.

3.& *orrespondent Banking Relationship

The main aim of Al-Arafah Islami Bank Ltd is to increase its foreign e,change business and in this connection we are doing international banking with all ma(or banks of the world. At present we are maintaining correspondent banking relationship with 56 ma(or reputed banks of the world.

3.; +oreign e<change risk #anagement

%oreign e,change risk is defined as the potential change in earnings arising due to change in market prices. International $ivision independently conducts the transactions and passing of their entries in books of accounts. All foreign e,change transactions are revalued at ark-to arket rate as determined by Bangladesh Bank at the month-end. All Gostrum accounts are reconciled on monthly basis and outstanding entry beyond @6 days is reviewed by the anagement for its settlement.

3.9 *apital Ade=uac$

The Bangladesh Bank has fi,ed the ratio of capital ade)uacy against /isk-#eighted Assets at 9.66F in place of DF in the month of !eptember 5665. In 5665" the amount of total e)uity of the bank was :8.AC 7rore taka" which stood at TH.DA.AB 7rore in the year 566@ and Taka 86:.5C 7rore in the year 566:. This year it stood at taka 8@6.AB 7rore. At @8 $ecember 566A" the capital ade)uacy ratio of the bank is 85.8B F against 8:.ABF at the same period of 566:.

3.7 Authori5ed and /aid >p *apital

The Bank 7ompany Act 8998 which amended in arch 566: includes a provision of raising the capital to a new level of TH.866 7rore for the commercial banks within arch
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566B. In compliance with the new provision" the bank has raised its capital from TH.:8.AB crore in the year 566@ to TH.DA.AB crore in 566: by issuing a right share against each of the e,isting share in the year 566: and declared 8BF bonus dividend from the profit of the year 566:. The bank again declared 8A.A6F bonus dividend from the profit 566A. As a result the paid up capital of the stood at TH.BC.C9 7rore as at @8 st $ecember 566B.Bank declared 5B.66F Bonus dividend for the year 566B. As a result the paid up capital of the Bank stood at taka DA.:5 crore as at @8st $ecember 566C.

3.18 (eposits

The total deposit of the bank was TH. 5@669.8@million at @8 st $ecember 566D" of which bank deposit was B88.C5 million taka and general deposit was 8B8B@.B8 million taka. At the same time in the year 566C" the amount of total deposits was 8BCCA.@: million taka. In this area the growth rate is ::.6CF.

3.11 Acti!ities of Shariah council for the $ear-2889

!hariah council consists of B members specialized in %i)hul uamalat as guideline given by Bangladesh bank to ensure whether all banking operations are transacted in accordance with Islami Shariah i.e. ?uran" !unnah" I(ma and Iztihad. !hariah council has managed" by the grace of almighty Allah" to contribute a lot to run all the business activities of the bank according to !hariah guidelines." honorable members of the Shariah council sit in C meetings in the year 566D 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 re)uirements 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. #ura=ibs of the council have visited all the A6 branches of the bank over the year to observe the !hariah 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 ?ostro a@c as well as doubtful income amounting to Tk.8:6A5BB5 advised to set aside from bank total halal income.
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The auditors continuously review the Bank*s transactional procedures to ensure adherence to the framework created by the %atwa I !hariah supervision Board. The !hariah auditors submit periodic reports to the !hariah supervisor so as to monitor and maintain !hariah compliance.

3.12 /roducts of AIBL as an Islamic bank

The AIBL 2Al-Arafah Islami Bank Ltd3 offers their customers general banking facilities" which ensures the safety of their money. following are the ways through which banks collects their deposits from the clientsA. Al-#A$IA 7.//+GT $+&E!IT 27$3 B. 7. $. .$A/ABA !4E/T GETI7+ $+&E!IT 2 !$3 .$A/ABA !A0IG1! $+&E!IT .$A/ABA T+/ $+&E!IT 2 T$3

+. $+&E!IT .G$+/ ET4+/ !74+ +! %. 1. 4. EGT4LJ &/E%IT BA!+$ T+/ $+&E!IT 2&T$3 $+&E!IT 2IT$3

EGT4LJ IG!TALL +GT BA!+$ T+/

EGT4LJ IG!TALL +GT BA!+$ 4AKK $+&E!IT 2 4$3

I. EG+TI + 4AKK $+&E!IT 2T4$3 K. A//IA1+ I IG0+!T +GT $+&E!IT 2 I!3

H. AL-A/A%A4 !A0IG1! BEG$ 2A!B3 L. %E/+I1G 7.//+G7J $+&E!IT 2%7$3 . &+G!IEG $+&E!IT !74+ + 2&$!3
N.

7A!4 #A?%A $+&E!IT !74+ + 27#$3 .$A/ABA ILLIEGAI/+ $+&E!IT !74+ +

E. &. ?.

.$A/ABA $E.BL+ $+&E!IT !74+ + .$A/ABA LA7&ETI $+&E!IT !74+ +

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/.

.$A/ABA HETI&ETI $+&E!IT !74+ +

A. Al-1A(IA *>RR0?) (0/O'I) ,*(-.

Al-Arafah Islami bank Limited receives deposits in their Al-Wadiah current account. .sually business people runs Al-Wadiah current account. In Al-Wadiah current account customers can deposit and withdraw money" whenever they want. In this account" there is no restriction of withdrawing money. But in Al-Wadiah current account customers do not get any profit. Bank with take some money as service charge. AIBL position regarding AL-#A$IA 7.//+GT $+&E!IT as on @6 Kune" 566D is shown below/articulars Total $eposit AL-#A$IA current deposit 7ontribution of current deposit to total deposit Amount 5B"BDA":::"8CC @"55C":6B"C59 85.69F

B. #>(ARABA '6OR) ?O)I*0 (0/O'I) ,#'(-.

udaraba !hort Gotice $eposit account is similar like Al-Wadiah current account. In udaraba !hort Gotice $eposit account customers can deposit and withdraw money any time whenever they want. But there is a restriction in withdrawing money. They have to inform the manager if they want to withdraw big amount. Like udaraba !avings $eposit account the customer*s get profit here. This profit is given every year at a predefined rate of last year. AIBL position regarding 566D is shown below.$A/ABA !4E/T GETI7+ $+&E!IT 2 !$3 as on @6 Kune" /articulars Total $eposit .$A/ABA !4E/T GETI7+ $+&E!IT 2 !$3 7ontribution of current deposit to total deposit Amount 5B"BDA":::"8CC DC6"6B8"@8@ @.5BF
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*. #>(ARABA 'A2I?:' (0/O'I). Al-Arafah Islami bank Limited also receives deposits by udaraba !avings $eposit. 1eneral people run this accounts. In udaraba !avings $eposit account customers can deposit money any time whenever they want. But they cannot withdraw money whenever they want" there is some restriction. 7ustomers can withdraw money two times in a week and ten times in a month. But if they want to withdraw any big amount they have to give notice to the manager. If bank earn any profits the depositors will get at a predetermined percentage and the bank retains the residual amount as its profit.

AIBL position regarding below-

.$A/ABA !A0IG1! $+&E!IT as on @6 Kune" 566D is shown

/articulars Total $eposit .$A/ABA !A0IG1! $+&E!IT 7ontribution of current deposit to total deposit

Amount 5B"BDA":::"8CC @"9DC"5@C"86A 8:.9AF

(. #>(ARABA )0R# (0/O'I) ,#)(-.

Interest-based banks receive different kinds of Term $eposits from the depositors. The deposits are generally for @ months" B months" 9 months" one year" 5 years" or @ years" and the bank pays a stated interest rate on each of these deposits" which varies depending on the term. In general" the bank pays a higher rate of interest the longer the term of the deposit and lower rates for shorter time periods. In addition" a higher rate of interest is generally paid on term deposits than on saving deposits. $epositors are not generally allowed to withdraw money from a term deposit until the term matures. &remature withdrawal may result in penalties in e,cess of the interest earned" resulting in a negative return. Ence a time deposit matures" the depositor may wish to reinvest for a new term.

AIBL position regarding shown below-

.$A/ABA T+/

$+&E!IT 2 T$3 as on @6 Kune" 566D is

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/articulars Total $eposit .$A/ABA T+/ $+&E!IT 2 T$3

Amount 5B"BDA":::"8CC 8@"CC9"D@8"C98 A8.B:F

7ontribution of current deposit to total deposit

AIBL 'pecial 'a!ings 'cheme. This scheme is well known in the market as a well named $eposit &ension !cheme in other banks. If a client deposit an amount of fi,ed on the monthly basis often a few years i.e. A and 86 years he gets amount at a time. The bank offers appro, 85F interest for this scheme particulars of which as follows-

'L ?O 68 65 6@ 6:

Amount to be (eported A66.66 8666.66 5666.66 A666.66

)otal Amount After % Aears :6"A66.66 D8"666.66 8"B5"666.66 7umulative Basic

)otal Amount After % Aears 8"8:"666.66 5"5D"666.66 :"AB"666.66

Rate of Interest 88F 85F -do-do-

#onthl$ /rofit Based )erm (eposit ,/)(-.

.nder the above scheme" deposit of tk.8.66 lac and multiple thereof are accepted for a term of A 2five3 years and the bank gave profit thereon tk. DDA per month per lac and proportionately on the rest amount of deposit under the category during the year under review. The aforesaid rate shall" however" be ad(ustable at the close of calendar year on finalization of accounts.
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#onthl$ 6a (eposit.

4a(( deposit at monthly installment from 8 2one3 year to 56 2twenty3 years are accepted under the above scheme to enable the account holder to perform ha(( out of the accumulated saving with profit.

'a!ings In!estment (eposit ,#6(-.

$eposit under the scheme is accepted by monthly installment and after e,piry of the term> double amount of such savings is given as investment in feasible sectors by the bank as per choice of the depositors without any collateral security. Any one by saving under the scheme can take business venture on utilization the amount saved under the scheme as well as availing bank investment.

Al-Arafah 'a!ings Bond.

.nder this scheme" the bank has introduced saving bonds for Tk. 86"666'-" Tk. 5A"666'- and Tk. 866"666'- for @" A and D years. After the completion of the tenure the deposited money may increase by 8.A or even double.

AIBL Regular (eposit /rogram. /$& is a special services plan that follows to save a monthly basic and get a handsome amount at maturity. /$& account gives you the convenience of saving regularly in time with cherished dream /$& in the right solution To open /$& account all you need is to be over 8D Jears of age and a Bangladesh citizen you can open a /$& account within 86 days of the month by filling up a prescribed account opening form at any branch of AIBL. )erm of AIBL Regular (eposit /rogram. Jou need to open a /$& account for @ or A Jears i.e. @B and B6 e)ual monthly deposits respectively.
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#inimum and #a<imum #onthl$ (eposit Amount. .nder the /$& you can chose between a minimum monthly deposit amount of TH.@66 and ma,imum amount of TH.8666.

:rameen 4 'mall In!estment 'cheme.

AIBL has introduced a new investment pro(ect as grameen and small investment. The ob(ective of this pro(ect is to introduced !hariah based banking system in rural and village area" creating employment through financing in 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 financially establish career men'women by investing in small investment pro(ects. Initially" this scheme is introduced in two branches of AIBL i.e. 1allai" 7omilla and /uposhpur" !rimongol. There is a plan to e,pand gradually this pro(ect in other rural branches. Thus" within the scope of grameen and small investment scheme" the following sectors have been invested-

8. %isheries 5. &oultry @. 7attle :. 1oat A. 7ow B. &oultry %inn C. &reparing uree

l6.0egetables business 88. 7ultivation of bettle leaf 85. Tailoring business 8@. #ork of bamboo and cane 8:. 7ultivation of pineapple 8A. +arthen ware 8B.&urchasing rickshaw 8C.7ultivation of lemon

D. &reparing sweets

9. 7osmetics items 8D. !mall business i.e. rice" paddy" grocery" medicine shop" cloth shop" shoe business" library" etc.

.nder this method" after getting the demand and the giving assurance of credit
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payment by the customer" bank takes the authority to purchase the specific goods on behalf of its customer and after that sells them to that customer. L In this case bank obviously has to purchase the goods from a third party and has to keep them under its authority for an instance. After that" a sale agreement is accomplished between the bank and the customer. L 4ere" goods are firstly delivered to the customer and payment is made on a specific future time. It is clear that in this method" goods are reached under the authority before payment is done. L In this method" bank is not liable to inform about the buying price and the amount of profit respectively to the customer. The only tiling mat is mentioned to that client is the selling price of those goods. L If the customer fails to pay the payment of the goods on a specific time and therefore if that customer takes some e,tra time to pay it fully" then in that sort of case" bank can not charge any more profit due to that overtime period.

3.1" #anagement of AIBL

anagement is the process of planning" leading and controlling the work of organizations members and of using all available organizational resources to reach stated organizational goals. The strength of a bank depends on the strength of its management team. Al-Arafah Islami Bank Ltd. is proud to have a team of highly motivated" well-educated and e,perienced e,ecutives who have been contributing substantially to the continued progress of the bank. The management is ably supported and assisted by well motivated and e,perienced officers and members of staff.

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3.1% 6uman Resource (epartment of AIBL

In today*s aggressive business environment" only the )uality of human recourses makes the difference. The bank*s assurance to attract the best persons to work for it and the adoption of the latest information technologies is reflected in the efforts of the bank in the in the development of its human resources. In the faces of today*s global competition Bank envisages to develop highly motivated workforce and to e)uip them with latest skills and technologies. A good working environment promotes a high level of faithfulness and assurance" devotion and dedication on the part of the employees.

Al-Arafah Islami Bank has a training centre to develop its employees. Al-Arafah Islami Bank sent number of officers to Bangladesh institute of Bank anagement and other training institutes for specialized training on various aspects of banking. The bank has set up a Training institute for providing training facilities of its e,ecutive*s officers. The training institute has already conducted a number of courses. A number of officers have been sent for foreign training. Al-Arafah Islami Bank believes in professional e,cellence and considers its working force as its most valuable assets and the basis of its competence and power.

3.19 (ilkusha branch of Al-Arafah Islami bank Ltd. ,AIBL-

The :5nd branch of AIBL is the $ilkusha> this branch is situated in @B" $ilkusha 7'A" $haka. This branch is inaugurated at 8Ath $ecember" 566A> the manager of this branch is d. Gazmus !aadat. 4e also got the position of A0& of AIBL. This branch has also got :6 efficient and responsible employees. Although this branch has past only three years" it has created positive image not only to the AIBL but also among the customer. The management of this branch always tries to provide better service to its customer and behave well with them. Basically" this branch*s ma(or portion of customers is corporate.

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3.28 Banking acti!ities of AIBL

Bank performs as an intermediary between lender 2surplus unit3 and borrower 2deficit unit3. !avings and deposits are the core strength of the banks to provide loan. And the interest earned from the difference borrowing and lending is the ma(or portion of banks income. Banks also earns from variety of operation. There are mainly three departments e,ist in AIBL" $ilkusha Branch. These are as follows-

:eneral Banking ,:B-. Loan and Ad!ance@ *redit (i!ision. +oreign 0<change.

".1 :eneral Banking

Among the four departments of a bank" 1eneral Banking $epartment is most important $epartment. The 1eneral Banking $epartment serves their client by Epening different types of account" by providing the facilities 7ash Transaction" Transferring Transaction" 7learing Transaction" &ay Erder" TT" $$ and /emittance money from one branch to other branches. 1eneral banking is the front side banking service department. It provides those customers who come fre)uently and those customers who come one time in banking for en(oying ancillary services. 1eneral Banking is divided into several sectors. These sectors are as follows-

.!.!" Account openin#, .!.$" %he&ue clearin# Section .!.'" (emittance Section .!. " )eposit and %ash Section

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".1.1 Account opening

The banking activities usually begin through the opening of the account with the bank by their clients. Bank always selects their customers very carefully because the success of the bank depends on their customers. !o this section takes e,treme caution in selecting its customer base.

There are several steps to open the account. The steps are shown by the table-

!tep 8 !tep 5

/eceiving filled up application in bank*s prescribed form mentioning what type of account is desired to be opened. The form is filled up by the applicant himself'herself. Two copies of passport size photographs from individuals are taken. Applicants must submit re)uired documents. Introducer*s signatures and accounts number M verified by legal officer Authorized officer accepts the application. Account is opened and a cha)ue book and &ay-in-slip book is given.

!tep @ !tep :

?ecessar$ documents to open an account. !pecial caution or the documents from the account opener of the following types/roprietorship Trade license &hotograph /artnership

Trade license &hotograph &artnership $eed /ri!ate Limited

Trade license
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&hotograph of $irectors 7ertificate copy of emorandum and Articles of Association 7ertificate of incorporation List of $irectors as per return of (oint stock company with signature /esolution for opening account with the bank.

".1.3 Remittance 'ection /emittance 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 noncustomer of bank. AIBL has its branches in the ma(or 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 &rinciple Branch for remittance of funds. &ay order' Bankers 7he)ue $emand $raft Telegraphic Transfer

/a$ Order ,/.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.
(emand (aft ,(.(.-.

A bank draft is an unconditional order issued by one branch of a bank on its branch to pay a certain sum of money to the named person or order on demand. 4ence" a bank draft is always payable on demand it is also known as demand draft. 0ssential features of (emand (raft.

It is drawn by one office of a bank upon some other office of the same bank It is payable on demand Its payment is to be made to the person whose name is mentioned or according to his order In other words" it cannot be made payable to the bearer
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Issues of (emand (raft. The person intending to remit the funds though a bank draft has to deposit the money to be remitted together with the commission" which the banker charges of its services. The amount of commission depends on the account to be remitted. En receipt of the re)uired amounts along with due filled in prescribed form" the banker issues a draft and hand over it to the purchaser. /a$ment of (emand (raft. If the draft is not crossed" the payee can draw the amount in cash upon presentation of the same to the draw branch with satisfactory evidence of his identify or can draw the money by depositing to his account there of any other bank. The draft being payable to certain particular person or order the banker must satisfy himself as to the title of the person presenting it for receiving the payment. The banker is discharged from liability only payment in due course. (ishonor of (emand (raft. Gormally a banker cannot refuse to make the payment to make the payment of a draft" as it is his own obligation to pay unless the presented draft is a forged one or there is double as to the identity of the person presenting it for payment. 4e cannot also refuse to make the payment of a draft of the plea of non-receipt of the relative advice from the issuing office. Loss of (raft. If the issuing branches reported about loss" theft or damages of any draft it must promptly inform the matter to the $rawee branch and re)uest to stop payment order such draft. Being reported by the issuing branch" the $rawee branch will note it to guard it sell against the fraudulent encasement of the lost draft. This is essential so that the banker is not held responsible for making payment otherwise than in due course.

)elegraphic )ransfer ,).)-. Telegraphic transfer" it may branch telephone or tele,. Transfer means fund'money transfer from one branch to another branch not in same area.

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!ometimes the remitter of the funds re)uires the money to be available to the payee immediately. In that case" the banker is re)uested by him to remit the funds telegraphically. The Bank passes T. T by a secret code" which input by the 1B in charge and branch anager. )he charges of ).).

7ommission 8F but not less than Tele, !undry 0AT #ail )ransfer Ad!ice.

Tk. 86 Tk.@62fi,ed3 Tk.86F

#here the remitter desires the banker to remit the funds to the payee instead of purchasing a draft himself" the banker does it through a the payee*s account and not for cash payment. )he charges of #.).A. 7ommission 8F but not less than ailing cost Tk. 86 Tk.@62fi,ed3 ail Transfer Advice. The payee must have an account with the paying office as the amount remitted in such a manner" is meant for credit to

".1."- (eposit and *ash 'ection (eposit 'ection. %i,ed deposit is one which is repayable after the e,piry of a predetermined of a predetermined period fi,ed by him where as normal deposit may be independent. The period varies from @ months" B month" 8 year and @ year. These deposits are not repayable on demand but they are withdrawing able sub(ect to a period of notice. 4ence it is a popularly know as N*Time $eposit** or N*Time Liabilities** Gormally the money on a fi,ed deposit is not repayable before the e,piry of a fi,ed period. *ash 'ection.
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The cash section of any branch plays very significant role in general banking department because it deals with most li)uid assets. The principle branch has an e)uipped 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 cha)ues" draft" &.E and play in slip over the counter.

*ash pa$ment is made onl$ against *he=ue )his is the uni=ue function of the banking s$stem 3hich is kno3n as Bpa$ment on demandC *ash /a$ment It makes pa$ment onl$ against its printed !alid *he=ue.

It recei!es deposits from the depositors in form of cash. *ash Receipt 'o it is the Bmobili5ation unitC of the banking s$stem. It collects mone$ onl$ its receipts forms.

%.1 In!estment and Ad!ance@ *redit (i!ision

Ene 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
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credit department of the bank. In this case the relationship of bank and customers is that of the creditors and debtor. Type of Investment and Advances offered by AIBLa3 b3 c3 d3 e3 f3 g3 h3 i3 (3 k3 !ecured Everdraft 2!E$3 Loan 21eneral3 4ouse Building Loan 2!taff3 $emand Loan Transport Loan Industrial 7redit 4ouse Building Loan 21eneral3 Transport Loan 2!taff3 7ash 7redit 24ypothecation3 &ast $ue Bills Loan against Trust /eceipt 2LT/3

%.2 In!estment products of AIBL

A. BAI-M*A++AL
#eaning of Bai-#ua al. Bai-Muajjal means credit sale of goods by the bank to the customer. !uch contracts provide for a margin of profit or mark-up to the bank as mutually agreed upon by the buyer 2client3 and the seller 2bank3. 1oods are kept at the disposal of the customer'buyer and the sale price can be paid either in lump sum or in installments. The Bai-Muajjal may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods" permissible under !hariah and law of the country" to the buyer at an agreed fi,ed price payable at a certain fi,ed future date in lump sum or in fi,ed installments.

Important +eatures of Bai-#ua al.

It is permissible and in most cases" the client will approach the bank with an offer to purchase a specific good through a Bai-Muajjal agreement. It is permissible to make the promise binding upon the client to purchase the goods from the bank. In other words" the client is re)uired to
27

either satisfy the promise or to indemnify the bank for damages caused by breaking the promise without e,cuse. It is permissible to take cash'collateral security to guarantee the implementation of the promise or to indemnify the bank for damages caused by non-payment. It is also permissible to document the debt resulting from Bai-Muajjal by a 1uarantor" or a mortgage or both" like any other debt. ortgage'1uarantee'7ash security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement. !tock and availability of goods is a basic condition for signing a Bai-Muajjal Agreement. Therefore" the bank must purchase the goods in accordance with the specifications of the client" prior to signing the Bai-Muajjal Agreement with the client. All goods purchased on behalf of a Bai-Muajjal agreement are the responsibility of the bank until they are delivered to the client. The bank must deliver the goods to the client at the time and place specified in the contract. The bank may sell the goods at a higher price than the purchase price to earn profit. The price is fi,ed at the time of the agreement and cannot be altered. The bank is not re)uired to disclose the profit made on the transaction.

'ome Obser!ations.

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This type of financing by the bank is considered more risky than the other Islamic modes of investment previously discussed. Therefore" the application'proposal for Bai-Muajjal investment must be reviewed very carefully to ensure the client can ultimately make payment. . The following steps may be taken to ensure the Bai-Muajjal Investment is a good proposition for the bankThe bank may meet with the prospective client regarding his investment needs and business e,perience prior to an application 'proposal is submitted.

The bank may review the client*s past performance and other financing arrangements he may have had with the bank in the past.

The bank may review its current investment policy regarding this type of financing arrangement to ensure the proposal meets bank guidelines.

B. BAI-M*(ABA,A
#eaning of #urabaha. The terms Bai-Murabaha" means sale for an agreed upon profit. Bai-Murabaha may be defined as a contract between a buyer and a seller under which the seller sells certain specific goods permissible under Islamic Shariah and the Law of the land to the buyer at a cost plus an agreed upon profit payable today or on some date in the future in lump-sum or by installments. The profit either may be a fi,ed sum or based on a percentage of the price of the goods. )$pes of #urabaha. In respect of dealing parties Bai-Murabaha may be of two types

Erdinary Bai-Murabaha and Bai-Murabaha Erder on and &romise.

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Ordinar$ Bai-Murabaha is a direct transaction between a buyer and a seller. 4ere" the seller is an ordinary trader who purchases goods from the market in the hope of selling these goods to another party for a profit. In this case" the seller undertakes the entire risk of his capital investment in the goods purchased. #hether or not he earns a profit depends on his ability to find a buyer for the merchandise he has ac)uired. Bai-Murabaha Erder on and &romise involves three parties - the buyer" the seller and the bank. .nder this arrangement" the bank acts as an intermediary trader between the buyer and the seller. In other words" upon receipt of an order and agreement to purchase a certain product from the buyer" the bank will purchase the product from the seller to fulfill the order. Important +eatures of #urabaha.

A client can make an offer to purchase particular goods from the bank for a specified agreed upon price" including the cost of the goods plus a profit. A client can make the promise to purchase from the bank" that is" he is either to satisfy the promise or to indemnify any losses incurred from the breaking the promise without e,cuse. It is permissible to take cash'collateral security to guarantee the implementation of the promise or to indemnify any losses that may result. $ocumentation of the debt resulting from BaiMurabaha by a 1uarantor" or a mortgage" or both like any other debt is permissible. ortgage'1uarantee'7ash !ecurity may be obtained prior to the signing of the Agreement or at the time of signing the Agreement. !tock and availability of goods is a basic condition for signing a Bai-Murabaha Agreement. Therefore" the bank must purchase the goods in accordance with the specifications of the client" thereby taking ownership of the goods before signing the Bai-Murabaha agreement with the client. .pon ac)uiring the goods" the bank assumes the risk of ownership. In other words" the bank is responsible for damages" defects" and 'or spoilage to the merchandise until such time that it is actually delivered to the buyer. The bank must deliver the goods to the client at the date" time" and place specified in the contract.
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The bank sells the goods at a price above the cost to obtain a profit. The sale price that is charged by the bank is agreed upon in the Bai- urabaha. The profit can be stated in terms of a flat dollar amount or on a percentage of the purchase price. If a percentage is used" the percentage shall never be e,pressed in terms of time" in order to avoid confusion that the price is a form of interest 2/iba3" which is not allowed. The price agreed to in the agreement is binding on both parties.

It is permissible for the bank to contract with a third party to buy and receive the goods on its behalf. This agreement must be a separate contract.

'teps in Bai-#urabaha. +irst 'tep. The client submits a proposal regarding his re)uirements of the bank. The client sends a proposal with the specifications of the commodity to be ac)uired from the bank. The proposal also indicates details regarding the date" time and place of delivery as well as price and form of payment information. The bank responds by sending a counter proposal either accepting the buyer*s price or stipulating a different price. 'econd 'tep. The client promises to buy the commodity from the bank on a Bai-Murabaha basis" for the stipulated price. The bank accepts the order and establishes the terms and conditions of the transaction. )hird 'tep- The bank informs the client 2ultimate buyer3 of its approval of the agreement to purchase. The bank may pay for the goods immediately or in accordance with the agreement. The seller e,presses its approval to the sale and sends the invoice2s3. +ourth 'tep. The Bank authorizes the client or its nominee to receive the commodity. And the seller sends the commodity to the place of delivery agreed upon. The client undertakes the receipt of the commodity in its capacity as legal representative and notifies the bank of the e,ecution of the pro,y.

Application of Bai-#urabaha. Murabaha is the most fre)uently used form of finance in Islamic banking throughout the world. It is suitable for financing the different investment activities of customers with regard
31

to the manufacturing of finished goods" procurement of raw materials" machinery" and other re)uired plant and e)uipment purchases.

%. M*S,A(A-A

#eaning of #usharaka. The word usharaka is derived from the Arabic word !harikah meaning partnership. In AlArafah Islami Bank" a typical usharaka transaction may be conducted in the following manner. Ene" two or more entrepreneurs approach an Islamic bank to re)uest the financing re)uired for a pro(ect. The bank" along with other partners" provides the necessary capital for the pro(ect. All partners" including the bank" have the right to participate in the pro(ect. They can also waive this right. The profits are to be distributed according to an agreed ratio" which need not be the same as the capital proportion. 4owever" losses are shared in e,actly the same proportion in which the different partners have provided the finance for the pro(ect. )$pes of #usharaka. In respect of dealing parties Musharaka may take two forms

&ermanent Musharaka and $iminishing Musharaka.

/ermanent #usharaka. In this case" the bank participates in the e)uity of a company and receives an annual share of the profits on a pre-rate basis. The period of termination of the contract is not specified. This financing techni)ue is also referred to as continued Musharaka. The contributions of the partners under this mode may be e)ual or une)ual percentages of capital for the purpose of establishing a new income-generating pro(ect or to participate in an e,isting one. In this arrangement" each participant owns a permanent share in the capital structure and receives his share of the profits accordingly. This type of a partnership is intended to continue until the company is dissolved. 4owever" one can e,it the partnership by selling his share of the capital to another investor.

(iminishing #usharaka.
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$iminishing or $igressive Musharaka is a special form of Musharaka" which ultimately culminates in the ownership of the asset or the pro(ect by the client. It operates in the following manner. The Bank participates as a financial partner" in full or in part" in a pro(ect with a given income forecast. An agreement is signed by the partner and the bank" which stipulates each partyOs share of the profits. 4owever" the agreement also provides payment of a portion of the net income of the pro(ect as repayment of the principal financed by the bank. The partner is entitled to keep the rest. In this way" the bankOs share of the e)uity is progressively reduced and the partner eventually becomes the full owner. #hen the bank enters into a $iminishing Musharaka its intention is not to stay in the partnership until the company is dissolved. In this type of partnership" the bank agrees to accept payment on an installment basis or in one lump sum" an amount necessary to buy the bank*s partnership interest. In this way" as the bank receives payments over and above its share in partnership profits" it*s partnership interest reduces until it is completely bought out of the partnership. *oncluding Remark. %inancing through a usharaka partnership is investment-based. The capital provider has full control in the management of the business. In addition" he shares proportionately in both the profits and losses of the business. Therefore" the rate of return is uncertain and can be either positive or negative. The cost of capital is also uncertain and there e,ists perfect correlation between the relationship of cost of capital and rate of return on capital.

). M*)A(ABA
(efinition of #udaraba. The term Mudaraba refers to a contract between two parties in which one party supplies capital to the other party for the purpose of engaging in a business activity with the understanding that any profits will be shared in a mutually agreed upon. Losses" on the other hand" are the sole responsibility of the provider of the capital. Mudaraba is a contract of those who have capital with those who have e,pertise" where the first party provides capital and the other party provides the e,pertise with the purpose of earning 4alal 2lawful3 profit which will be shared in a mutually agreed upon proportion.

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This type of business venture serves the interest of the capital owner and the 2agent3.

udarib

The capital owner may not have the ability or the e,perience to run a profitable business. En the other hand" the agent 2the udarib3 may not have ade)uate capital to invest in a business or pro(ect. Therefore" by entering into a contract of Mudaraba each party compliments one another" allowing a business venture to be financed. The following are the steps of the Mudaraba contract.

'teps in #udaraba. The bank provides the capital as a capital owner. The udarib provides the effort and e,pertise for the investment of capital in e,change for a share in profit that is agreed upon by both parties. One-)he Results of Mudaraba. The two parties calculate the earnings and divide the profits at the end of Mudaraba. This can be done periodically in accordance with the terms of the agreement" sub(ect to the legal rules that apply. )3o-/a$ment of Mudaraba *apital. The bank recovers the Mudaraba capital it contributed before dividing the profits between the two parties because the profit is considered collateral for the capital. )hree-(istribution of 3ealth resulting from Mudaraba. In the event a loss occurs" the capital owner 2the bank3 is responsible for the entire loss. In the event of profits" they are divided between the two parties in accordance with the agreement between them" sub(ect to the capital being recovered first.

*oncluding Remark. It is an investment-based form of financing. The provider of capital in Mudaraba has no role in the management of the capital. 4owever" he has to bear the risk of capital loss as well as the opportunity cost of capital for the entire period of the contract. The rate of return is )uite uncertain and the cost of capital is also uncertain. 4ence" there is a perfect correlation between cost of capital and rare of return on capital.

.. BAI-SALAM
#eaning of Bai-'alam. Bai-Salam is a term used to define a sale in which the buyer makes advance payment" but the delivery is delayed until some time in the future. .sually the seller is an individual or business and the buyer is the bank.
34

The Bai-Salam sales serve the interests of both parties

The seller receives advance payment in e,change for the obligation to deliver the commodity at some later date. 4e benefits from the BaiSalam sale by locking in a price for his commodity" thereby allowing him to cover his financial needs whether they are personal e,penses" family e,penses or business e,penses. The purchaser benefits because he receives delivery of the commodity when it is needed to fulfill some other agreement" without incurring storage costs. !econd" a Bai-Salam sale is usually less e,pensive than a cash sale. %inally a Bai-Salam agreement allows the purchase to lock in a price" thus protecting him from price fluctuation. 'teps in Bai-'alam. One-*ash sale or 'ale on *redit. The bank pays the agreed upon price at the time of the contracts inception. The seller agrees to the delivery of the commodity some specified date in the future. )3o-(eli!er$ and Receipt of the *ommodit$ on the 'pecific due (ate. There are several options for delivery available to the bank a. The bank may receive the commodity and resell it to another party for cash or credit. b. The bank may authorize the seller to find another buyer for the commodity. c. The bank may direct the seller to deliver the commodity directly to a third party with whom the bank has entered into another agreement. )hree-)he 'ale *ontract. The bank agrees to sell the commodity for cash or a deferred price" which is higher than the Bai-Salam purchase price. The buyer agrees to purchase and to pay the price according to the agreement. Application of Bai-'alam. Bai-Salam sales are fre)uently used to finance the agricultural industry. Banks advance cash to farmers today for delivery of the crop during the harvest season. Thus banks provide farmers with the capital necessary to finance the cost of producing a crop. Bai-Salam sale are also used to finance commercial and industrial activities. Ence again the bank advances cash to businesses necessary to finance the cost of production" operations and e,penses in e,change for future delivery of the end product. In the meantime" the bank is able to market the product to other customers at lucrative prices. In addition" the Bai-Salam sale is used by banks to finance craftsmen and small producers" by supplying them with the capital necessary to finance the inputs to production in e,change for the future delivery of products at some future date.

35

Thus as has been demonstrated" the Bai-Salam sale is useful in providing financing for a variety of clients" including farmers" industrialists" contractors and traders. The proceeds in a Bai-Salam sale may be used to cover the finance of operation costs and capital costs. *oncluding Remark. The Bai-Salam agreement is a combination of debt and trading. The capital provider has no control over the management of capital provided. 4owever the capital provider takes all of the risk as profits cannot be determined until the commodity is delivered and the final sale price is determined. In addition the capital provider incurs the opportunity cost associated with the capital outlay. Like the other three previously discussed modes of finance there is no certain rate of return. In addition the cost of capital is uncertain e,-ante. Also" there is no correlation in the relationship of cost of capital and rate of return on capital.

/. I+A(A,
#eaning of I arah. According to Islamic !hariah" I(arah is a contract between two parties M the lessor and the lessee" where the lessees 24irer or usta(ir3 have the right to en(oy'reap a specific benefit against a specified consideration'rent'wages from the lessor M the owner 2 ua((ir3. 0lements of I arah. According the ma(ority of %u)aha" there are three general and si, detailed elements of I(arahThe #ording- This includes offer and acceptance 7ontracting &arties- This includes a lessor" the owner of the property" and a lessee" the party that benefits from the use of the property. !ub(ect atter of the 7ontract- This includes the rent and the benefit. The Lessor 2 u((ir3- The individual or organization who leases out'rents out the property or service is called the lessor. The Lessee- 2 usta(ir3- The individual or organization who hires'takes the lease of the property or service against the consideration rent'wages'remuneration is called the lessee 2 usta(ir3. The Benefit 2 aa(ur3- The benefit that is leased'rented out is called the benefit 2 aa(ur3. The rent 2.(rat3- The consideration either in monetary terms or in )uantity of goods fi,ed to be paid against the benefit of the goods or service is called the rent or .(rat.

0. ,I(.-1*(%,AS.

4ire-&urchase under !hirkatul synthesis of three contracts-

elk has been developed through practice. Actually" it is a

36

'hirkat I arah and 'ale.

(efinition of 'hirkatul #elk. N!hirkat* means partnership. !hirkatul elk means share in ownership. #hen two or more persons supply e)uity" purchase an asset and own the same (ointly and share the benefit as per agreement and loss in proportion to their respective e)uity" the contact is called !hirkatul elk. In the case of 4ire &urchase under !hirkatul elk" Islamic banks purchase assets to be leased out" (ointly with client under e)uity participation" own the same and share benefit (ointly until the full ownership is transferred to the client. (efinition of I ara The term NI(ara* has been defined as a contract between two parties" the lessor and the lessee" where the lessee en(oys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the lessor. It is a lease agreement under which a certain asset is leased out by the lessor or to a lessee against specific rent or rental for a fi,ed period. (efinition of 'ale *ontract This is a contract between a buyer and a seller under which the ownership of certain goods or asset is transferred by the seller to the buyer against agreed upon price paid by the buyer. In the case of 4ire &urchase under !hirkatul elk" the lessor bank sells or transfers its title to the asset under a sale contract on payment of sale price. 'tages of 6ire /urchase under 'hirkatul #elk. 4ire &urchase under !hirkatul

elk Agreement has got three stages&urchase of asset under (oint ownership of the 4ire" and !ale and transfer of ownership by the lessor to the

lessor and the lessee.

other partner - lessee.

Important +eatures. In case of 4ire &urchase under !hirkatul elk transaction" the asset or property involved is (ointly purchased by the lessor and the lessee with specified e)uity participation. In which the amount of e)uity and share in

37

ownership of the asset of each partner are clearly mentioned. .nder this agreement" the lessor and the lessee become co-owners of the asset under transaction in proportion to their respective e)uity. In 4ire &urchase under !hirkatul elk Agreement" the e,act ownership of both the lessor and lessee must be recognized. 4owever" if the partners wish and agree the asset purchased may be registered in the name of any one of them or in the name of any third party clearly mentioning the same in the 4ire &urchase !hirkatul elk Agreement.

The share of the purchased asset owned by the lessor is put at the disposal possession of the lessee keeping the ownership with him for a fi,ed period under a hire agreement in which the amount of rent per unit of time and the benefit for which rent to be paid along with all other agreed upon stipulations are clearly stated. .nder this agreement the lessee becomes the owner of the benefit of the asset not of the asset itself" in accordance with the specific provisions of the contract that entitles the lessor the rentals.

As the ownership of leased portion of asset lies with the lessor and rent is paid by the lessee against the specific benefit" the rent is not considered as price or part of price of the asset.

In the 4ire &urchase under !hirkatul elk agreement the Lessor does not sell or the lessee does not purchase the asset but the lessor promise to sell the asset to the lessee only if the lessee pays the cost price'e)uity price of the asset as fi,ed and as per stipulations on which the lessee also gives undertakings.

The promise to transfer legal title by the lessor and undertakings given by the lessee to purchase the ownership of leased asset upon payment part by part as per stipulations are affected only when it is actually done by a separate sale contract.

!hirkatul elk contract is effected from the day the e)ually of both parties deposited and the asset is purchase and continues up to the day on which the full title of lessor is transferred to the lessee.

The hire contract becomes effective from the day on which the lessor transfers the possession of the leased asset in good order and

38

usable condition" so that the lessee may make use of the same as per provisions of the agreement. 4ire &urchase under !hirkatul elk are binding contracts" and the parties to it - the bank and the client - are committed to meet their obligations in accordance with the relevant agreement.

.nder this agreement" the bank acts as a partner" as a lessor and at last as a seller> on the other hand the client acts as partner" as a lessee and lastly as purchaser.

.nder this agreement the role of lessee is one of a trustee" the leased asset being a trust in his hands- he will manage" in favor of the interest of thee lessor at his own cost the e,act sub(ect of lessee" e,cept in cases of emergencies and acts of Allah.

The lessee is responsible for keeping the leased asset 2s3 in good condition throughout the whole period of lease" and if the asset is damaged or defrayed due to transgressions default or negligence of the lessee" he shall be responsible to compensate for that.

The lessee cannot without obtaining prior written permission of the bank make changes in the e,act item of lease" and or remove it from its place of installation" and transfer it to another location.

In a hire purchase under !hirkatul elk agreement" any stipulation may be made" provided it is not against the nature and re)uirements of the contract itself" nor does it violate the Lessee laws of Islam" and is also acceptable to both parties.

4ire purchase under !hirkatul elk facilities may be for medium-term and long-term period" which may be utilized for the e,pansion of production and services. as well as housing activities. The duration of hire purchase under !hirkatul elk contract shall not e,ceed the useful life of the sub(ect asset of the transaction. The bank should not normally enter into a 4ire &urchase under !hirkatul elk transaction for items with useful life of less than two years.

39

4ire &urchase under !hirkatul elk transaction facilitates the client 2lessee3 to get benefit from the lease asset in e,change of rental and also to become full owner of the asset by purchasing it.

4ire &urchase under !hirkatul elk ode is a combination of three contacts. All rules governing the lease contract should be applicable in this mode also. oreover" the rules for usharaka and sale contracts will also apply to this.

,. 2A() ,ASA3

#eaning of DAR( 6A'A?. Qard Hasan is a contract in which one of the parties 2the lender3 places into the ownership of the other party 2the borrower3 a definite parcel of his property" in e,change nothing more than the eventual return of something in the same value of the property loaned. Interest on all kinds of loans is prohibited in Islam" so a loan that is to be given in accordance with the Islamic principle" has to be" a benevolent loan 2Qard Hasan3 i.e. a loan without interest. It has to be granted on the grounds of compassion" i.e. to remove the financial distress caused by the absence of sufficient money in the face of dire need. !ince banks are profit driven organizations" it would seem that there is not much opportunity for the application of this techni)ue. 4owever" Islamic banks also play a socially useful role. 4ence they make provisions to provide Qard Hasan besides engaging in income generating activities.

Accept /roposal.

Before submit a proposal the customer should run a current account for minimum @ months and ma,imum B months to satisfy the bank that his flow of money transaction is legal. After running the current account" he can submit the proposal for loan to the manager. The proposal also includes the documents of his mortgage property.

2erif$ing *ustomers.

40

anager will give the documents of

ortgage properties" Trade license etc to the investment

officer. Investment officer then verify the documents. anager" Assistant anager" Investment officer will visit customers property to make a

value of mortgage property. anager also gives the documents of property to the advocate for legal advice and the valuation of the property. Advocate will verify the documents of mortgage property. In addition" advocate gives a legal opinion of the property. Than anager" Assistant anager" Investment officer will ad(ust the opinion of advocates

with their own opinion about the value of mortgage property. 7ustomer*s get loan about A6F of the mortgage property. The bank takes 8:Finterest from this loan. Lease +inance. AIBL offered Lease finance facilities to its valued clients with a view to facilitate clients to ac)uire e)uipments and machineries without investing any fund in spite of playing fi,ed lease rentals. %i,ed fewer rentals can be tailored both in terms of amount and timing to the profit and cash flow position of the Lease-4older. At the end of the lease contract the lease assets back to the clients with a nominal and depreciated value. +acilities of Lease. 8. %ree the 7apital tied in capital e,penditure 5. Leasing allows utilizing the capital elsewhere to general higher profits it also reduce cash out flow @. The e)uipment that leased does not appear on clients balance sheet" clients financial ratios improve :. To avoid budgetary constraints in capital e,penditure A. Lease rentals are treated as revenue e,penditure and are entirely deduct able for ta, purpose. Item of Leasing. 8. Any category of e)uipment and 5. Effice automation e)uipments
41

achinery

@.

edical Treatment diagnosis

:. 0ehicles for transportation etc Restricted Business. 8. &roduction" li)uor 5. &roduction and Trading of any item banned by the 1overnment @. Any activity not permissible by the law of the land Loan *eiling. 8. %or small enterprise /urpose. #orking 7apital 7apital machinery $elivery 0an' Transport for business purpose /e-furnishing office'Business &remises a,imum TH.A6"66"666'arketing" Trading of alcoholic" narcotic and other into,icating drug of

#ode of +inance. 7ash 7redit 24ypo'&ledge3 4ire &urchase' Lease %inance Term Loan

Loan Rene3al. !uccessive loans depend on track record of previous loan. .sually" repayment behavior and e,pansion of business by the borrower are the main consideration renewal and enhancement of the loan amount. Interest. 9 F above Bank /ate &resently 8:F 2changeable3

/enal Interest. If any borrower fails to ad(ust loan within validity period or to repay consecutive 65 2two3 installments penal interest 6.5AF per month shall be charged on the defaulted amount.
42

'ecurities. It is supervisory credit scheme. Tangible security in the form of mortgage may not be available in all the cases. !o mortgages will not be mandatory. !ecurity will be stipulated on a case to basic as under 2one or several of the following3 a. /egistered mortgage of land and building. b. ortgage'assignment of possession right c. Assignment of security money advance rent if any d. Assignment of Trade /eceivable not older than 96 days e. 4ypothecation of machinery" e)uipment" vehicles" stock-in-trade" raw materials" work-in-process and finished goods. f. &ersonal 1uarantee from persons acceptable to the Bank. g. &ost dated cha)ues h. Lien on deposits'saving certificates'financial obligations i. Any other securities to be demand suitable by the Bank depending on the situation like Insurance 1uarantee" 7orporate 1uarantee" Assignment of 7ontract" !ecurity oney etc /eriod of Loan. a. In case of continuous Loan- 68 2Ene 3 year b. In case of Term Loan#ode of Repa$ment. a. In case of continuous loan credit turnover in the account must be e)ual to the limit in a )uarter and full ad(ustment within the validity period. b. In case of term loan" the loan should be repaid by monthly installments through postdate cha)ues as per amortization scheduled. !ale proceeds should be deposited in the account regularly. a,imum 6A 2five3 years.

&.1 Introduction Ene of the largest businesses carried out by the commercial bank is foreign trading. The trade among various countries falls for close link between the parties dealing in trade. The situation calls for e,pertise in the field of foreign operations. %oreign e,change department of Al43

Arafah Islami Bank is one of the most important departments of all departments. This department handles various types of activities by three separate sectionsa3 b3 c3 Import section +,port section. %oreign remittance section.

&.2 Import +inancing Import means bringing merchandise to country from any place rest of the world. Two things mainly involves with import of merchandise> bringing of commodities physically into the country any making payment towards the cost of the merchandise and services connected with its dispatch to the importer.

/rocedure for obtaining IR* ,Import Registration *ertificate-. To perform the import business registration with the licensing authority of the area is an urgent. Through public notice the chief controller of Imports and +,ports invites applications usually for registration of importers. %or getting this registration the following papers' documents are re)uired for submission to 77II+ 27hief 7ontroller of Import and +,port3 or area office of 77I I+ for import registration certificate8. Application form 5. Gationality certificate @. Income ta, registration certificate :. Trade License from the municipal or the local authority A. embership 7ertificate B. partnership 7ertificate 2for partnership concern3 C. 7ertificate of /egistration with the registrar of (oint stock 7ompany. D. emorandum of Association in case of limited 7ompany. 9. Bank 7ertificate. 86. Ewnership documents or rent receipts of the place of business. 88. Eriginal 7opy of Treasury 7hallan being payment of registration fees.
44

85. Ether documents prescribed in the import policy.

%ees shall be paid in Bangladesh Bank or in the 1overnment Treasury or in !honali Bank under the 4ead ;:5 Trade I 7ommerce fees realized under Import and +,port 7ontrol Act" 89A6<.

&.3 *lassification of Importer. Importers are those who are authorized by the import Trade 7ontrol Authority that is 77II + for import of goods essential for consumption or for production purposes.

)here are mainl$ three t$pes of Importer. 8. 5. @. 7ommercial Importer Industrial Importer. Importer under #age +arner !cheme. 210'3

,1- *ommercial Importer. It means an importer registered under the importers" e,porters and indenture registration order 1791 who import goods for sale.

,2- Industrial Importers. #hen issued to an industrial consumer" gives the items of import as raw materials and packing materials and spare parts" the value of entitlement and IT7 classification.

45

,3- Importers under 10'. It means registered importers who import only under the #+!. #+! importers can be importing all permissible items as declared by the import policy and notification. Besides all registered commercial and industrial importer also can import under #+!.

Other Importers are as follo3s. Lease %inancing Import. 1ovt. !ector Importer. Import under Bonded #are-4ouse !ystem. Import by Actual .sers. Import by +.&.=. Import +ormalities@/rocedures. %or conducting world trade documentary credit or letter of credit is an essential implement. It is important for the beneficiary of a documentary credit to know that payment will be made only if the documents are in absolute conformity with the re)uired terms and that the bank has to decide on the basis of the documents alone. An importer desires to have an import L'7 limit must have apply to the designated bank in prescribed forms for sanction of margin" L'7 limit etc.

&." (efinition of Letter of *redit L'7 means Letter of 7redit or $ocumentary credit. As per .niform 7ustoms and &ractice for $ocumentary 7redits 2.7&$73 meaning of credit as underArticle ?o. 2 of >*/(*. %or purpose of these articles the e,pressions ;$ocumentary 7redit< and ;stand by Letter of 7redit< mean any arrangement however named or described" whereby a bank 2the ;Issuing Bank<3 acting at the re)uest and on the instructions of a customer 2the ;Applicant<3 or on its won behalf. i- Is to make a payment to or to the order of a third party 2 the ;Beneficiary< 3 or is to accept and pay bills of e,change P$raft3 2s3Q drawn by the Beneficiary.
46

E/ ii- Authorizes another bank to effect such payment or to accept and pay such bills of e,change P$raft 2s3Q E/. iii- Authorizes another bank to negotiate" against stipulated document 2s3 terms and conditions of the 7redit are complied with. provide that the

1enerally" a Letter of 7redit is a conditional Bank undertaking of payment. In other words L@* is a letter from the Importer Bankers to the e,porter that the bills if drawn as per terms and conditions are complied with will be honored on presentation.

&.% *lassification of L@* 0arious types of Letter of 7redit are as follows /evocable L'7. Irrevocable L'7. 7onfirmed L'7. Transferable L'7. $ivisible L'7. Back to Back L'7. /evolving L'7. /estricted L'7 /ed clause L'7. 1reen 7lause L'7 #ith /ecourse #ithout /ecourse

/arties to a Letter of *redit.

47

As per terms and conditions of the L'7" the seller is re)uired to be routed through some intermediary banks in order to get his claim. !o" we see that there are a number of parties involved in a L'7. The involved parties to a L'7 are as underImporter @ Bu$er. !eller who applies for opening an L'7. 0<porter @ 'eller @ Beneficiar$. It is the bank on which the bill will be drawn 2As per condition of the credit3. .sually it is the issuing bank.

Opening @ issuing Bank. It-is the bank which opens'issues a L'7 on behalf of the importer. Ad!ising @ notif$ing Bank. It is the bank through which the L'7 is advised to the e,porters. This bank is actually situated in e,porter*s country. It may also assume the role of confirming and ' or negotiating bank depending upon the condition of the credit. *onfirming Bank ,for Add confirming L@*-. It is the bank" which adds its confirmation to the credit and it" is done at the re)uest of issuing bank. 7onfirming bank may or may not be advising bank. 0<porterEs Bank i.e. negotiating Bank. It is the bank" which negotiates the bill and pays the amount of the beneficiary. The advising bank and the negotiating bank may or may not be the same. !ometimes it can also be confirming bank. Reimbursing Bank or pa$ing Bank. It is the bank" which would reimburse the negotiating instructions from issuing bank. /rocedure for Opening L@*.
48

bank after getting payment -

An importer desirous to have an import L'7 limit must have apply to the designated bank in prescribed forms for sanction of margin" L'7 limit etc. %or Letter of 7redit limit following information are to be furnished by the applicant.

The full particulars of bank account. Types of business 2 &roprietorship" &artnership" Limited 7o. 3 in case of Ltd. 7o. Balance sheet of last @ 2three3 years and the names of directors. 4istorical background. Amount of limit re)uired. 1oods to be imported. !ecurity to be offered. /e-payment schedules a source of fund. Ether liabilities of the customer with the bank. !tatements of Assets and liabilities. Account position 2Balance3. Trade License and import registration number with renewal date. Terms of payment- #hether the import documents would be retired against payment on receipt or against acceptance or whether post import finance is re)uired in the form of &I ' LT/ etc.

En receipt of above particulars the import section of the bank will prepare credit report of the concerned importer the report should be collected from the previous banker of the party also.

Bank 3ill suppl$ the follo3ing paper@documents before opening of the L@*. 2a3 L'7. application form 2b3 I7A form. 2c3 I & from. 2d3 urabaha Agreement. The above paper must be completed duly filled and signed by the party and verified the signature.
49

Accounting /rocedure for Opening L@*. The following accounting system is followed in documentary creditors. The register shall be posted immediately on receipt or approval form the shall control the numbers of the L'7. +ntries are to be passed(r. *r. *r. &arty*s A@c. 7ommission A@c. & I T A'c. anager to open a L'7. This register

*urrenc$ 2ouchers. (r. Assets as per 7ontra 2L'7 #+!3 *r. Liability as per contra 2L'7 #+!3 (r. %.7. $eposit 2#+! fund held A'c3 *r. %.7. $eposit A'c 2#+! L'7 cover3 2If is purchased %und at the time of opening L'73 )aka 2oucher. (r. &artyOs A'c 27urrent A'c3. *r. !undry $eposit 2!ecurity dep. L'7 #+! A'c3. *r. Tele, recovery A'c 2at the L'7 is transmitted by tele, or cable3. *r. 7ommission ,As per Bangladesh Bank 7ircular3. *r. & I T A'c. (r. urabaha Import L'7 R B.7 selling.
50

at B.7. !elling F at national rate F

*r. #+! %ind purchase A'c. *r. &rofit /eceivable A'c #+!. (r. &rofit /eceivable A'c 2monthly credited by daily product basis3. *r. Investment Income A'c. L@* Amendment. Amendment of irrevocable latter of credit is not permissible without the (oint consent of the entire patron involved in documentary credit operation. )ime 0<tension. A written application from the opener of L'7 and signature of the opener is verified. A relevant license ' L7A ' &ermanent of the loan ' Barter must remain valid unto that period the e,tension is sought. Increase of L'7 amount may be done provided the L7A covers the increase in amount. L'7 amount can be decreased provided the relevant indent is amended accordingly and with the consent of the beneficiary

Import +inancing +or )he last )hree Aears. 2 illion In Taka3 &articulars Import Jear 566B 85B@8.B6 Jear 566C 8DD5.:6 Jear 566D 5C6:5.C5

&.& 0<port +inancing Bangladesh e,ports a large )uantity of goods and services to foreign households. /eadymade te,tile garments 2both knitted and woven3" Kute" Kute-made products" frozen shrimps" tea are the main goods that Bangladeshi e,porters e,ports to foreign countries. 1arments sector is the largest sector that e,ports the lion share of the countryOs e,port. Bangladesh e,ports most of its readymade garments products to ..!.A and +uropean 7ommunity 2+73 countries. 0<port means our carrying of any thing from one country to another for sale with the
51

stipulated period for to earn foreign e,change> make favorable balance of payment position I stabilize marketability.

1hat Is 0<port L@ *. The L'7 against which the goods and services are e,ported is called e,port L'7. The foreign L'7s are e,port L'7s.

+ormalities for 0<port L@*. There are a number of formalities" which an e,porter has to fulfill before and after shipment of goods. These formalities or procedures are enumerated as follows-

Obtaining 0<port Registration *ertificate 0R*.

Go e,porter is allowed to e,port any commodity permissible for e,port from Bangladesh unless he is registered with 7hief 7ontroller of Imports and +,ports 277I I +3 and holds valid +,port /egistration 7ertificate 2+/73. After applying to the 77II+ in the prescribed from along with the necessary papers" concerned offices of the 7hief 7ontroller of Imports and +,ports issues +/7. Ence registered" e,porters are to make renewal of +/7 every year

'ecuring the order. After getting +/7, the e,porter may proceed to secure the e,port order. 4e can do this by contracting the buyers directly through correspondence. Obtaining 0G/. After having the registration" the e,porter applies to AIBL with the trade license" +/7 and the 7ertificate from the concerned 1overnment Erganization to get +S&. If the bank is satisfied" an +S& is issued to the e,porter.
52

'igning of the contract. After communicating with buyer the e,porter has to get contracted for e,porting e,portable items from Bangladesh detailing commodity" )uantity" price" shipment" insurance and mark" inspection" arbitration etc. Recei!ing the Letter of *redit. After getting contract for sale" e,porter should ask the buyer for Letter of 7redit clearly stating terms and conditions of e,port and payment. /rocuring the materials. After making the deal and on having the L'7 opened in his favor" the ne,t step for the e,porter is to set about the task of procuring or manufacturing the contracted merchandise. 0ndorsement on 0G/. Before the e,porter with the customs or postal authorities lodges the e,port forms" they should get all the copies endorsed by AIBL. Before shipment" e,porter submits +S&. form with commercial invoice. Then AIBL officer checks it properly" if satisfied" certifies the +S&. #ithout it e,porter cannot make shipment. The customer must declare all e,port goods on the +S& issued by the authorized dealers

'hipment of goods. +,porter makes shipment according to the terms and condition of L'7. a. /resentation of e<port documents for negotiation. After shipment" e,porter submits the following documents to AIBL for negotiation. Bill of +,change or $raft> Bill of Lading Invoice Insurance &olicy'7ertificate 7ertificate of origin Inspection 7ertificate
53

7onsular Invoice &acking List ?uality 7ontrol 7ertificate 1.!.&. certificate &hoto

0<amination of (ocument. Banks deal e,amine with documents only" not with commodity. As the negotiating bank is

giving the value before repatriation of the e,port proceeds it is advisable to scrutinize and each and every document with great care whether any discrepancy2s3 is observed in the documents. The bankers are to ascertain that the documents are strictly as per the terms of L'7 Before negotiation of the e,port bill. Bank officers assigned for e,amining the e,port documents may use a checklist for their convenience.

?egotiation of e<port documents. Gegotiation stands for payment of value to the e,porter against the documents stipulated in the LT7. If documents are in order" AIBL purchases 2negotiates3 the same on the basis of banker- customer relationship. This is known as %oreign $ocumentary Bill &urchase 2%$B&3.If the bank is not satisfied with the documents submitted to AIBL gives the e,porter reasonable time to remove the discrepancies or sends the documents to L'7 opening bank for collection. This is known as %oreign $ocumentary Bill for 7ollection 2%$B73. 'ettlement of Local Bills. The settlement of local bills is done in the following ways" The customer submits the L'7 to AIBL along with the documents to negotiate !BL official scrutinizes the documents to ensure the conformity with the terms and conditions. The documents are then forwarded to the L'7 opening bank. The L'7 issuing banks gives the acceptance and forwards an acceptance letter.
54

&ayment is given to the customer on either by collection basis or by purchasing the document.

#ode of /a$ment of 0<port Bill under L@*. As per .7& A66" 899@ revision there are four types of credit. These are as followsa. !ight payment b. $eferred payment c. By acceptance d. Gegotiation

a. 'ight /a$ment *redit. In a !ight &ayment 7redit" the bank pays the stipulated sum immediately against the e,porterOs presentation of the documents. b. (eferred pa$ment *redit. In deferred payment" the bank agrees to pay on a specified future date or event" after presentation of the e,port documents.

c. Acceptance credit. In acceptance credit" the e,porter presents a bill of e,change payable to him and drawn at the agreed tenor 2that is" on a specified future date or event3 on the bank that is to accept it. The bank signs its acceptance on the bill and returns it to the e,porter. The e,porter can then represent it for payment on maturity. Alternatively he can discount" it in order to obtain immediate payment. d. ?egotiation *redit. In Gegotiation credit" the e,porter has to present a bill of e,change payable to him in addition to other documents that the bank negotiates. &.; Back-to-back L@*
55

A Back-to-Back mechanism involves two separate L'7s. Ene is master +,port L'7 and another is Back-to-Back L'7. En the strength of +,port L'7 is known as !elling L'7 &.9 +eatures of Back-to-Back L@* Is an Import L'7 to procure goods 'raw materials for further &rocessingU Is opened based on +,port L'7. It is a kind of +,port %inance. +,port L'7 is at !ight but back to Back L'7 is at .sance. Go margin is re)uired to open Back to back L'7 aster +,port L'7 bank issues Back-toaster Back L'7. Back-to-Back L'7 is commonly known as Buying L'7. En the contrary"

/apers Re=uired Opening Back-to-Back L@*. Import registration certificate I e,port registration certificate L'7 application and L7A form &roforma invoice or indent Insurance policy I & form Bonded warehouse license ?uota allocation letter from e,port processing Bureau 2+&B3 /a$ments under back-to-back L@*. Back L'7 payment. &ayment at maturity out of e,ports proceeds. In case of e,port failure or non-realization'short

realization of e,port proceeds" forced loan i.e. has to be created in order to settle the Back-to-

&.7 +lo3 *hart for 0<port.

56

1oods ready for shipment. Inspection of the goods from the competent authority as per L@*. &repared invoice and packing list and vessel booking particulars. &apers to be sent to * 4 + agent for shipment. * 4 + agent will do the custom formalities i.e. Goting ' entry. 7hecking the goods as per invoice I packing list inspection report etc. * 4 + agent will take permission for shipment ' 4anover the goods to shipping co. After completion of all customs formalities the nominating shipping co received the goods for sail' loads in the ship and issued a receipt which is known as mates receipt. * 4 + Agent hands over the shipping receipt to the e,porter or they can take the original B@L in payment of freight and other e,penditure etc. +,porter may dispatch the shipment advice to the importer directly as per L@* terms. * 4 + Agent recipes the original B@L from the relative shipping co and dispatches he same to the bank for negation of receives the 2e,porter3 from the shipping co directly. +,porter spits the all original and duplicate sets of document to the bank for negotiation. After negotiation bank should dispatch the documents to the opening bank for delivers of from the part. Epining bank lodged the documents and make payment to the negotiation bank A @c terms.

0<port +inancing +or Last )hree Aears. 2 illion in Taka3 &articulars +,port Jear 566B :9@5.96 Jear 566C 98:5.C6 Jear 566D 85C8:.98

57

&.18 Remittance. /emittance means transfer of fund. If we pronunciation of the word V/emittanceV we under stand transfer of fund through a Bank from one place to another place which may be e,ecuted the country or between two countries. /emittance which is effected within the country is called Local /emittance and which is effected between two countries is called %oreign /emittance. /emittance plays a vital role in the development of the country. #ithout effect of remittance no country can develop herself. Bangladesh is rich enough in respect of human resources. !o Inward /emittance has great importance in our country.

&.11 Opening of +oreign *urrenc$ A@*.. Accounts are phenomena through which transaction is routed. All banking transactions are settled through Accounts. !o A'7. is essential for setting our day transactions %oreign 7urrency A'7. has a great important on overall %oreign +,change. Enly the Authorized $ealer Branches can open %.7. A'7 .without prior permission of Bangladesh Bank %.7. A'7. is opened by Bangladeshi nationals serving and earning abroad i.e. having Income from sources other than Bangladesh. To open an %7A$'%7A& A'7 the formalities mentioned below are to be observed-

8. Epening forms i.e. Application" !ignature 7ard" nomination form if any" to be duly filled in and signed by the applicant and the nominee. 5. Eriginal passport to be submitted for verification and &hotocopy of 8st seven pages to be submitted for preservation. @. &assport photographs of both A'7 holder and the nominee are to be submitted &hoto graphs of Gominee to be attested by the A'7 holder I A'7 holderOs photo be attested by the authored by the authorized office of the Band.

58

:.

!ervice contract in +nglish or Bengali person to be submitted with the A'7 Epening form.

A. If the intending person desire to open A'7 from abroad the necessary papers are to be sent duly attested by the authorized official of Bangladesh +mbassy working there. All signatures are by same as that of &assport. It may be mentioned that no initial fund is re)uired at the time of opening of the %oreign 7urrency account.

+*A( ,+G/- A@*. %A7$ A'7 +,port is opened by the e,ports only C.AF %EB valueU /ealized amount is deposited in this account and the fund is used for the promotion of business. +stablish of business" &ayment of credit card bill" +,port fair" to attend the seminar and of purchase of achinery and !pare parts. /ri!ate +oreign *urrenc$ ,/+*- A@*. &rivate %oreign 7urrency A'7 is opened by the Alien who serve in Bangladesh %oreign mission" %oreign G1E and %oreign consultation firm. &hotograph" photocopy of passport" work permit" G1E permission etc" are to be submitted to open the A'7.

*on!ertible )aka ,*)- A@*. The private %oreign 7urrency Account holders are to open 7onvertible taka Account. The entire funds of the &%7 A'7 are to be routed through the related convertible taka Account.

In3ard Remittance. The remittances" which are received from abroad and paid to the beneficiary" are Inward /emittance. In ward remittance are mainly received in .! $ollar" pound sterling and Taka 7urrency. 0ery few remittances in miscellaneous currencies are also received.

Out3ard Remittance.
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The /emittance in %oreign 7urrency which is effected from our country to abroad is called outward remittance. %orm remitterOs point of view is called outward /emittance and from payeeOs point of view is called Inward /emittance.

Interpretation. The above graphical presentation shows comparison imports between Al-Arafah Islami Bank Ltd 2AIBL3 and the Islami Bank Bangladesh Ltd 2IBBL3. The trend of import business of the IBBL is increasing from 566: to 566D on the other hand AIBL also increasing but they are now standing in initial point. The growth of AIBL in 566C to 566D was Tk.B8D9.D and the growth of IBBL in 566C to 566D was Tk.D8CC million. !o the growth of AIBL is lower than IBBL. They are not comparing with IBBL because they have a few levels of branches and few branches level of foreign business.

Interpretation. The above graphical presentation shows comparison e,ports between AIBL and the Islami Bank Bangladesh Ltd 2IBBL3. The trend of e,port business of the IBBL and AIBL is increasing and e,periencing from 566: to 566D. The growth of AIBL in 566C to 566D was Tk.:569.D and the growth of IBBL in 566C to 566D was Tk.A8@ million. !o the growth of e,port business of AIBL is higher than IBBL in 566D. !o they should continue their increasing.

Interpretation. The above graphical presentation shows comparison remittance between Al-Arafah Islami Bank Ltd 2AIBL3 and the Islami Bank Bangladesh Ltd 2IBBL3. The trend of remittance
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business of the IBBL is increasing that is very higher than AIBL. Because AIBL can not take leading point of remittance business through only :B braches. !o they should take necessary steps.

Interpretation

The above graphical presentation shows comparison total foreign business between AlArafah Islami Bank Ltd 2AIBL3 and the Islami Bank Bangladesh Ltd 2IBBL3. The total foreign business of IBBL and AIBL is increasing continuously but total foreign business of IBBL is higher then AIBL because AIBL operate total foreign business through 56 branches that are fewer then IBBL. !o they should increase there foreign e,change branches.

;.1 '1O) Anal$sis

;.1.1 *ore strength of Islamic bankF Al-Arafah Islami Bank as 3ell

The followings are the core strength of Islamic bank for which it is now considered to be the emerging sector for success In accordance with Islamic Shariah" all actions of the bank are conducted where profit is the legal substitute to interest. The total deposit of the bank was TH. 2&F&9%F"""F1;;million at @8st $ecember 566D. At the same time in the year 566C" the amount of total deposits was 23F887F129F29;million taka. In this area the growth rate is DB.55F. !o deposit is a good strength of AIBL. +,perienced manpower and efficient employees are being involved in busy subsection of this section to meet the client*s satisfaction. Ene of the core strength of Islamic bank is that it distributes a significant amount of profit that they earn by investing different areas. En the other hand" in case of conventional banking they provide a fi,ed amount of return which is called ;/IBA< or Interest that may not be consistent with the profit positioning of bank*s operations. !o" in case of conventional banking" they either sacrifice by bearing losses or deprived the depositors by not paying them the part of profit.
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 Islamic bank collect deposits by Murabaha mode whereas they invest by Musharaka mode that increase the intimacy with the bank and with the depositor. Islamic bank works to the development the socio-economic and value system of the people that is not seen in case of conventional banking. Islamic bank doesn*t incur losses as it provides the return under the scientific process whereas the conventional banks provide interest though they incur losses that ultimately reduce the deposit of the client. Islamic bank invest in the human welfare sector. !o" Islamic bank practices mainly welfare banking. These banks invest only those sectors where human welfare can be ensured. Therefore" it can be said that the benefits that the Islamic banks has it significant which give the new era t the banking sector around the world as well as the Al-Arafah Islami Bank Ltd.

;.1.2 #a or 3eakness of Islamic BankingF Al-Arafah Islami Bank as 3ell

Islamic banking is guided by some principles but it has some weakness" some of the ma(or weaknesses are discussed in below &rofit and loss sharing 2&L!3 dominates the theoretical literature on Islamic finance. Broadly &L! is a contractual agreement between two or more transacting parties" which allows them to pool their resources to invest in a pro(ect to share in profit and loss. ost Islamic economists contend that &L! based on two ma(or modes of financing" namely Mudaraba and Musharaka" is desirable in an Islamic conte,t wherein reward sharing is related to risk sharing between transacting parties. Almost all theoretical models of Islamic banking are either based on Mudaraba or Musharaka or both" but now actual practice of Islamic banking is far from these models. Gearly" all Islamic banks" investment companies and investment fund offers trade and pro(ect finance on mark-up @" commissioned manufacturing" or on leasing bases. &L! features marginally in the practice of Islamic banking and finance.. Islamic bank deposited 86F cash amount against the Bangladesh Bank 2BB3 re)uirement of !L/ and 7//" on which the Islamic banks has no chance to earn profit. En the other hand the conventional banks deposited only :F of 7// on without profit basis. %rom the observation it will be clear that Islamic banks are not getting any profit on BF on cash deposits. /isk anagement system is not strong. The bank has already e,posed to a variety of risks the most important of which are credit risk" market risk and li)uidity risk.
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Li)uidity risk is the risk that the Bank in unable to meet payments obligations and potential payment obligation as and when these fall due without incurring unacceptable losses. AIBL is not out of this weakness.

IT $ivision is not strong because bank put due importance to utilization of technology-based service to the customers. In line with this" IT $ivision of the Bank is engaged in designing various !oftware*s to facilitate services. Through this $ivision a number of Branches have already been brought under En-Line Banking and some other Branches will also be brought under this umbrella soon.

;.1.3 'ome opportunit$ of AIBL

!ome opportunity of AIBL may be as follows /ate of interest is so high. Therefore" &7B*s are making well done in regards of lending and besides deposit collection from the market. 1ovt. Banks are not able to fulfill market demand and this opportunity is taking by the &7Bs. %inding cost is far above the ground for lending is great opportunity for the bank. By reason of lack of poor performance of G7B*s in our country though they are grabbing an huge deposits from the market" &7B*s are fulfilling the high demand of the financial marketing lending money towards deficit sources. 7omplimentary business climate for commercial banks in the country in comparison with other business. The concern of new banks is very crucial point. Anybody or organization cannot easily establish a commercial collecting paid-up capital and govt. is fully retracted in regards of giving permission to commercial bank in the country. In addition" in our country there are no closing rules for commercial banks. 7onse)uently of which as an e,isting commercial banks AIBL have a great opportunity and potential for its favorable business opportunity. An additional mentionable opportunity of the &7B*s is high grades of services in regards of customer service. #hatOs more the G7B*s service is very poor and so much traditional. Therefore of which it has easily achieved public respond easily creating their positive approach gradually. ;.1." )hreats of AIBL

!ome threats that may face in conducting Islamic banking by AIBL are-

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 The financial market strength of our country is not well-built. By itself to recover the lending money is a great threat. !ince in our country*s business chain like other countries is dependable each other. As a result" if the monetary flow faces any obstacle it hampers the running of full chains. 7onse)uently recovery face a great threat for commercial banks and AIBL is in boundary of this threat. An additional ma(or hindrance for banks is its classified loan. Through this picture is not new for this particular bank it is e,ists to all commercial banks throughout the world. But in our country this bad culture created by the G7Bs and its impacts comes to the &7Bs also. But over viewing the bank*s performance we found that it is still in safe side in comparison with others but in should be careful to overcome this threat. 7orporate 1overnance establishes specific responsibility to ensure accountability and fairness in functions of the company and also to comply with the re)uirements of regulatory agencies> care has been taken to improve 7orporate 1overnance. As part of this AIBL should now follow the corporate governance principles. 7orporate 1overnance establishes specific responsibility to ensure accountability and fairness in functions of the company and also to comply with the re)uirements of regulatory agencies> care has been taken to improve 7orporate. As part of this AIBL should now follow the corporate governance principles. /eviewing this !#ET analysis from time to time would help evaluate the bank*s position. It would help the management in comparing their strengths of the past with those of the present and to what e,tent the management has been able to overcome the weaknesses.

9.1 /roblem identification

any of these problems are affecting healthy growth of the sector and eating up the potentials the economy as well. a(or problems of the banking sector are as follows .nderstanding 7ustomer I Banker- There is a gap between the customers and bankers. 7ustomers are unaware about the moral of Islamic Banking !ystem. !ometimes they are not familiar with the rules of Islamic Banking. Lack of !tate-of-art- Technology that AIBL is using for their banking system is not up dated. Gow there is some international bank in Bangladesh" they are very fast and very up dated. AIBL is losing their clients because of lack of technology. anagement &roblem- The management of AIBL takes no risk when they give loans to their clients. They are very slow in decision-making. They sometimes fail to take the current opportunities for this slow decision making process. 7entralization- The Al-Arafah Islami Bank is too much centralized. %or each and every work branch office has to get permission from the head office. The head office
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tightly controls each and every branch office. This dependency on head office causes slow down their activities. Advertising and &romotion- Advertising and promotion are the weak points of AlArafah Islami Bank Limited. AIBL does not have any effective marketing activities. Ether banks have better marketing strategy. +mployee*s $issatisfaction- Lack of promotion and longer probationary period are the main causes of dissatisfaction among the employees. Late increment in salary is another cause of dissatisfaction. Lengthy Investment process- In Islamic Banking !ystem Loan is very lengthy process. But it is lengthier in AIBL" because branch managers do not have the power to give loan. %or every loan" managers have to send proposal to head office. anagement does not want to take any risk. Lack of &ersonal Loan- AIBL does not give any personal loan" because it is against the rules of Islamic Banking !ystem. 4owever" personal loan is very popular in other banks" because the rate of interest is very high for personal loan. Loan /ecovery !ystem- ost of the times" the clients do not repay the loan in time. 4owever" the bank has no right to take interest for e,tra time" because interest is not allowed in Islamic Banking !ystem. They (ust take the amount that is mentioned in contract. Investment /atio is Low- Investment ratio in respect of deposit is very low in AIBL. AIBL is not able to take the risk right now like other banks. The management of AIBL does not risk in investment. AIBL Invests in 4alal Business- AIBL does not invest in 4otel business. But this business has high rate of returns. AIBL mostly invest is purchase and sales business. They also invest in /eal-+state business. L7 for 4alal &roducts- AIBL does not open L7 for the products like +nergy $rinks" 7$" 07$" and $0$. 4owever" other banks make high profit by opening these types of L7 recently. $oes Got Buy !avings Bonds- !ome international and local savings bonds give high rate of returns. AIBL does not buy these because it is against the rules of Islamic Banking !ystem. anager*s &ower- anager of any branch of AIBL does not have the power of giving any loan to the clients without the permission of 4ead Effice. 4owever" in other banks manager have the power to give small loans.

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4ouse Building Loan- AIBL" irpur Branch now stops giving 4ouse Building Loan. 4owever" in irpur there are a lot of customer*s of 4ouse Building Loan. In addition" the recovery from 4ouse Building Loan is very easy. Go Locker !ervices- AIBL" irpur branch does not provide any locker service to its customer. !o they are losing some valuable customers. &roblems in loan repayment process- The client has to repay the money in the particular branch from where he'she take the loan. !ometimes customers fail to repay the installment. If customers have the facilities to repay the loan in any branch it will be better for them. A$ Branch License- AIBL" irpur branch does not have A$ license. %or this reason" they have to depend on other A$ branches of AIBL for international trade dealing. %or that reason" they are losing e,pected customers. 4igh Interest on Loan- Interest rate on deposit is much higher than other banks" which increase their cost of fund and it diminish the opportunity to provide loan at a lower interest rate. It makes high demand on short-term deposit and manages these liabilities with loan they might need to borrow from call money market. !taff Loans- AIBL offers loan to its own staffs after a long period of (ob. 4owever" the rate is higher where other banks give loan to their staffs at a chief rate. Therefore" staffs lose concentration in work.

9.2 Recommendation of O!erall Banking '$stem of AIBL

I. Ene of the most important limitations is that it has no much of advertisement of its Islamic banking operations. It can gain dual benefit of attracting deposit and credit. Therefore" AIBL should give a mass advertisement mentioning the different offerings like B/A7 Bank" !tandard 7hartered bank and 4!B7 and other local bank is doing. II. AIBL should use the latest banking technology to provide better services to the customers. It will also attract the customer*s of international banks. III. AIBL should pursue advertising campaign in order to build a strong image among the people. They should carry out aggressive marketing campaign to attract clients.

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I0. AIBL should offer different types of loans to their own staffs immediately after confirming their (ob. This loan will influence them for better performance. The interest rate on this loan must be less than other banks interest rate. 0. AIBL should increase the ratio of investment. Gow they should take risk when they give loans to their clients" because there is a lot of idle money in their every branch. 0I. The management of AIBL should give their employees more increments in salary. In addition" probationary period should decrease. It would motivate the staff to perform well in the organization. 0II. The dependency on 4ead Effice in every step should be waived. They should permit the branches to work independently. 0III. anagers of AIBL should have the power of giving small loans to the clients. It is very important for the banks to increase the investment.

IS. In Islamic Banking !ystem loan is very lengthy process. AIBL should take steps to minimize the process of loan system. Because 7ustomers dislike lengthy process.

S. AIBL can pursue a diversified strategy in e,panding its current line of business. The management can consider options of starting merchant banking for minimizing the risk and getting more return" they should prepare portfolio management. SI. The client has to repay the money in the particular branch from where he'she got the loan. That is way" whenever a customer wants to repay the installment in time. 7ommunication problem sometimes force him'her to become defaulter. If the AIBL allows the clients to repay money at any branches she'he wants" it will be better for them. SII. The 4uman resource management of the bank is done as it is done by the conventional banks. The banks should made a collaborate effort to improve the ways of human resource management.

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SIII. Bank should offer more facilities to the customers such as credit card" visa card" AT machine etc to survive in the competition. SI0. Al-Arafah Bank Ltd 2AIBL3 should introduce more female employees. S0. En-line banking should be introduced for better customer services and to eliminate risk of sending document via post and risk of loss. It also increases )uick fund transfer and better satisfaction from customer. S0I. The management should take immediate decision to take the current opportunities.
S0II. &ayment to the workforce should be such that will encourage the employees to work more. /emuneration package must be impressive and inconsistent with work performance.

9.3 *onclusion
The AIBL has been trying to operate its business successfully in Bangladesh since 899A. AIBL has already developed an image of goodwill among its clientele by offering its e,cellent services. The success has resulted from dedication" commitment and dynamic leadership of its management over the periods. $uring the short span of time of its operation" the bank has successfully grabbed a position as progressive and dynamic financial institution in the country. If the bank goes this way" it is e,pected that in the near future AIBL may become one of the top performers in the banking sector. The bank should take necessary actions for increasing their investment and maintaining this deposit figure in future. As a new branch" $ilkusha Branch of AIBL has been able to maintain its recovery position in sector wise credit financing is up to the satisfactory level. At least AIBL should give more emphasis on this sector to ac)uire more profit.

Bibliograph$

A. Books" &eriodicals I Kournals Banks and legal environments by $r. /. $ev Gath" page no-86@
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An application of Islamic banking principles to Amela !apcanin.

icrofinance by /ahul $humale and +dition3" #illiam B" cbey" onica

4uman /esource anagement" Low &rice +dition 2Ath #enther" Heith $avis.

!trategic 4uman /esource &lanning" Gew +dition" Henneth K. Belcourt.

1upta" H.G> Lease %inancing- 7oncept and &ractice" Bikash &ublishing 4ouse" Gew $elhi" India" 899@.
Anu, Mahmood 1998. Inside Bangladesh E onom!. "u#lished #! BIBM, 63 Ne$ Es%a&on, and 'ha%a(1000. "" 9(21. Annual )e*o+&s o, Al( A+a,ah Islami Ban% -&d..AIB-/

Bangladesh Bank 7ircular .7&-B66' .niform 7ustom and &ractice.2Latest +dition3

B. #ebsites

www.al-arafahbank.com. www.bangladeshbank.com. www.wikipedia.org.

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