An Internship Report On Investment Management Analysis of Al-Arafah Islami Bank Ltd.

An Internship Report On
Investment Management Analysis of Al-Arafah Islami Bank Ltd.
By
Md. Mahfuz Hasan
ID: 22
Reg: 244009
Batch: 48th
(B), Session: 2014-15
Major: Accounting
Department of Business Administration
Faculty of Business Studies
Dhaka International University
For
Under supervision of
Ms. S. M. Kalbin Salema
Lecturer
Date of Submission: 11.05.2019

An Internship Report On
Investment Management Analysis of Al-Arafah Islami Bank Ltd.
For the partial fulfillment of the BBA Program and Internship Paper With defense
By
Md. Mahfuz Hasan
ID: 22
Reg: 244009
Batch: 48th
(B), Session: 2014-15
Major: Accounting
For
Under supervision of
Lecturer
Date of Submission: 11.05.2019

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Letter of Transmittal
May 11, 2019
Lecturer
Sub: Submission of Internship Report on “Investment Management Analysis of Al-
Arafah Islami Bank Limited”
Dear Madam,
It is a great pleasure for me that, I have the opportunity to submit internship
report titled “Investment Management Analysis of Al-Arafah Islami Bank Limited”
As per partial fulfillment of the requirements for the Bachelor of Business
Administration degree, I have completed the internship from Al-Arafah Islami Bank
Limited.
I have gathered all the facts that I could within this short period & have tried my level
best to exert all the things as much presentable as possible. Despite of limitations, I
sincerely hope that my report will meet the requirements that you set for me.
For further query please do contact with me.
Yours faithfully
Md. Mahfuz Hasan
Batch: 48th
(B)
Roll no: 22
Reg no: 244009
B.B.A. (Major in Accounting)

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Supervisor Authentication
This is certify that Md. Mahfuz Hasan, Roll no: 22, Registration no. 244009
prepared the report entitled the “Investment Management Analysis of Al-Arafah
Islami Bank Limited” for partial fulfillment of requirements of the Degree of
Bachelor Of Business Administration (with specialization in Accounting Major) of
Dhaka International University.
The report has been carried out under my guidance and to the best of my knowledge is
record of the genuine work undertaken by him.
……………………….
Lecturer

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Declaration of Authenticity
I hereby declare that the internship report on “Investment Management Analysis of
Al-Arafah Islami Bank Limited” includes the results of my own works, pursued
under the supervision of Ms. S. M. Kalbin Salema, Lecturer Department of Business
Administration of Dhaka International University. Further affirmthat the work
presented in this internship report is original and no part or whole of this report has
been submitted to, in any from, any other Unvarsity or Institution for any degree or
any other purpose.
……………………
Md. Mahfuz Hasan
Batch: 48th
(B)
Roll no: 22
Reg no: 244009
Session: 2014-15
B.B.A. (Major in AIS)

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Acknowledgements
It is high time for me to express my deepest gratitude and humble submission to the
Almighty Allah but for whose support I would not be able to complete a huge task of
preparing this internship Report within the scheduled time.
I am very much grateful to my Supervisor Ms. S. M. Kalbin Salema, Lecturer of
BBA program give me guideline to prepare this report. She helped me a lot to
choose the topic and help me to think different way to make the report. Without his
proper guideline it may be very difficult to prepare this report.
I am very much grateful to Md. Mujahid Husain, (FAVP) Manager, to assign me
as internship in this reputed Bank. I am also indebted to all of the officers and
employees of the Mirpur Branch who extended their wholehearted cooperation.
I must mention the wonderful working environment and group commitment of this bank
that has enabled me a lot deal to do and observe the Investment activities during my
internship period of three months.

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TABLE OF CONTENTS
Chapter Sl. No Contents Page
Executive Summery xi
Chapter-
One
Introduction 1-4
1.1
1.2
1.3
1.4
1.5
1.6
Origin Of The Report
Background of the report
Objectives
Scope of the report
Data sources
Limitation
2
2
3
3
3-4
4
Chapter-
Two
Organizational Overview 5-16
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.11.1
2.12
2.13
2.14
2.15
Organizational Overview
Background of Al-Arafah Islami Bank Limited
Vision
Mission
Commitments
Objective of AIBL
AIBL Contribute in the country’s economy
Features of AIBL
Core Values
Distinguishing Features of conventional & AIBL
Corporate Information
Auditor Information
Corporate Structure of AIBL
AIBL Product and Services
Financial highlights of AIBL
SWOT Analysis of AIBL
6
6
7
7
7
8
8-9
9-10
10
10
11
11
12
13-14
15
15-16
Chapter-
Three Investment Management 17-45

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3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.10.1
3.11
3.12
3.13
3.14
3.14.1
3.14.2
3.15
3.15.1
3.15.2
3.15.3
3.15.4
3.16
3.16.1
3.16.2
3.17
3.17.1
3.17.2
3.17.3
3.18
3.19
3.19.1
Definition of investment
Introduction of Investment Department
Investment Policy of AIBL
Investment Objective of AIBL
Investment strategies of AIBL
Importance of Investment
Investment activities of AIBL
Principles of Investment of AIBL
Sources of Fund
Primary Source
Secondary Sources
AIBL Investment Sectors
Investment Modes of AIBL
Investment product in AIBL
Share Mechanism
Mudaraba
Musharaka
Bai-Mechanism
Bai-Murabaha
Bai-Muajjal
Bai-Salam
Bai- Istisna
Ijara Mechanis
Hire Purchase
Hire Purchase under Shirkatul Melk
Investment Processing of AIBL
Application Stage
Appraisal Stage
Sanction Stage
Limit of Investment
Documents needed for preparing investment
proposal
Proposal Analysis
18
18
18-19
19
20-21
21
22
22
22-23
23
23-24
24-25
25
26
26
26-27
27
27
27-29
29
29-30
30
31
31
31
32
32-33
33-34
34-35
35
35
35-36

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3.19.2
3.20
3.20.1
3.20.2
3.20.3
3.20.4
3.21
Terms and Conditions Applied
Cause of over dues
General Causes of over dues
Causes of over dues of Murabaha
Investment Causes of over dues of Bai-Mujjal
Investment
Causes of dues Hire purchase under Shirkatul
Melk Investment
Monitoring and Recovery stage
36
37
37-39
39-40
41
41-42
42-45
Chapter-
Four
Analysis of Investment
Performance
46-58
4.1
4.2
4.3
4.3.1
4.4
4.4.1
4.4.2
4.4.3
4.5
4.5.1
4.6
4.6.1
4.7
4.7.1
4.7.2
4.7.3
Year Wise Investment & Growth Rate of
Investment of AIBL
Graphical Chart of last five year Investment of
AIBL
Growth rate of investment is given below
Graphical expression of growth rate of
investment
Year wise Deposits and Growth Rate of Deposit
of AIBL
Graphical Chart of last five years Deposits of
AIBL
Growth rate of deposit is given below
Graphical expression of growth rate of deposit
Year Wise Investment to Deposits Ratio
Analysis
Graphical Expression of Investment to Deposits
Ratio Analysis:
Mode wise investment of AIBL in 2017
Here, Mode wise Investment of AIBL is shown
by a Pie-chart
Trade of Mode wise Investment
Investment in Bai-Murabaha
Investment in Bai-Muajjal
Investment in Bai-Salam
47
47
48
48
48
49
49
50
50
51
51
52
52
52-53
53-54
54-55

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4.7.4
4.7.5
4.8
Investment in Mudaraba
Investment in Musharaka
Finding
55-56
56-57
57-58
Chapter-
Five
Conclusions & Recommendations 59-61
5.1
5.2
Conclusion
Recommendations
60
60-61
References 62
List of the Table
SL.No Title Of the table Page
Table-1 Distinguishing Features of conventional
& AIBL
10
Table-2 Corporate Information of AIBL 11
Table-3 Auditor Information of AIBL 11
Table-4 Financial highlights of AIBL 15
Table-5 Year Wise Investment 47
Table-6 Growth rate of investment 48
Table-7 Deposits Rate 48
Table-8 Growth rate of deposit 49
Table-9 Investment to Deposit ratio 50
Table-10 Mode wise investment of AIBL 51
Table-11 Investment in Bai-Murabaha 52
Table-12 Investment in Bai-Muajjal 53
Table-13 Investment in Bai-Salam 54
Table-14 Investment in Mudaraba 55
Table-15 Investment in Musharaka 56

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List of the Chart
SL.No Title Of the Chart Page
Chart-1 Corporate Structure of AIBL 12
Chart-2 Investment Modes of AIBL 25
Chart-3 Year Wise Investment 47
Chart-4 Growth rate of investment 48
Chart-5 Deposits Rate 49
Chart-6 Growth rate of deposit 50
Chart-7 Investment to Deposit ratio 51
Chart-8 Mode wise investment of AIBL 52
Chart-9 Investment in Bai-Murabaha 53
Chart-10 Investment in Bai-Muajjal 54
Chart-11 Investment in Bai-Salam 55
Chart-12 Investment in Mudaraba 56
Chart-13 Investment in Musharaka 57

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Abbreviation
AIBL Al-Arafah Islami Bank Ltd
FAVP First Assistant Vice President
MMIS Investment Schemes in Masque and Madrasa
OIC Organization of Islamic Conference
AGM Annual General Meeting
EGM Extraordinary General Meeting
A/C Account
CD Current Deposit
MSD Mudaraba Savings Deposit
MTDR Mudaraba Term Deposit Account
ITD Mudaraba Monthly Installment Term
Deposit
HPSM Hire Purchase under Shirkatul Melk
MDB Musharaka Documentary Bill
CRR Cash Reserve Ratio
SLR Statutory Liquidity Ratio
GSIS Village and Small Investment Schemes
SEIS Small Enterprise Investment Schemes
CIS Consumer Investment Schemes
SEIS Small Enterprise Investment Scheme
MIS Mosjid-Madrasha Investment Scheme

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Executive Summary
The first chapter shows different aspects of the report like a brief introduction, origin
of the report, statement of the Issue, objectives, significance, methodology &
limitations of the study. Second chapter shows a brief company overview. In this
section different important data about Al-Arafah Islami Bank Limited is provided.
Background, vision, mission, commitments, special features, product line,
organogram of AIBL and some other necessary company related information is
provided in this chapter.
The third chapter is about literature review. In this chapter I described the investment
management policy, department, objectives, strategies, importance, under Islami
Sharia.
The fourth chapter is the most important chapter of this report. Chapter 4 describes
investment management Analysis & performance of AIBL showed current investment
position of the bank and some previous records. I also described Sharia concept about
investment of the bank. There is a detailed description about their investment products
so that their managing strategy could be understood more clearly.
Finally, in the last chapter I stated some recommendations for the
improvement of the bank and then the conclusion has been made.

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Chapter One :
Introduction

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1.1 Origin of the report
For Bachelor of Business Administration (BBA) student only theoretical knowledge is
not enough for handling the real life situation. It is a great opportunity for the student
to know about the real business operations through the internship program. This
report is prepared for fulfilling a practical requirement of both BBA and the internship
program. On this regard I have been posted in Al-Arafah Islami Bank Limited
(AIBL), Mirpur branch immediately after completion of BBA course for Three (3)
months duration internship program and have been advised by the honorable
management to submit my practical learning in written from at different phases.
Al-Arafah Islami Bankis a financial institution whose status, rules and procedures
expressly state its commitment to the principle of Islamic Shariah. Consequently Al-
Arafah Islami Bank operates on Islamic principles of profit and loss sharing, strictly
avoiding interest, which is the root of all exploitation & is responsible for large scale
inflation and unemployment. In this report, I undertake microscopic analysis mainly
on “Investment Management Analysis of Al-Arafah Islami Bank Limited”.
1.2 Background of the report
This internship report has been preparing under the internship program, an
indispensable part of the Bachelor of Business Administration (BBA) program. For
the internship purpose, I have chosen Al-Arafah Islami Bank Limited, which has
some special mission and vision to establish an interest free banking in the country. I
have selected the topic “Investment Management Analysis of Al-Arafah Islami Bank
Limited”. The dissertation repot is an integral part of the BBA program of the
university. It is obligatory to undertake such task by the students who desire to
complete and successfully end-up their BBA degree. This also provides an
opportunity to the students to minimize the gap between theoretical and practical
knowledge. Students are required to work on a specific topic based on their theoretical
and practical knowledge acquired during the period of the internship program and
then submit it to respective authority. This is why I have prepared this report.

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1.3 Objectives
The main objective can be divided into two aspects and these are:
 Broad Objective: The primary objective of this report is to evaluate the
investment management performance of Al-Arafah Islami Bank Limited.
 Specific Objectives: The other objectives include:
 To understand the different investment activities of AIBL.
 To familiarize with the various investment schemes.
 To understand the investment policy of AIBL.
 To analyze the investment activities of AIBL.
 To make recommendation on the basis of the findings.
1.4 Scope of the report
The scope of the study includes problems and prospects of investment of Al-Arafah
Islami Bank Limited. In this report, I have focused on all the qualitative which include
profiles of AIBL, investment modes like Bai mode, profile and loss sharing, different
schemes of the investment such as household durable schemes, housing investment
schemes. Due to successful completion of the part of the report have the opportunity
to discuss regarding following issues:
 To obtain practical experiences about modes of investment by involving in
such type of program.
 To find the bridge between academic study and real practices in organization.
 To build professional career in the banking sector as well as any financial
institution.
1.5 Data Sources
This is an explanatory type of report that has undertaken insights and understanding
about overall investment operations of Al-Arafah Islami Bank Limited. This report is
prepared on the basis of secondary data. The relevant data information was collected
through direct interview of the personal engaged in various departments of Al-Arafah
Islami Bank Limited.

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 Secondary Sources of Data: Most of the information used in this report
has been collected from:
 Annual Report of AIBL from 2014 to 2017.
 Manuals of investment of IBL.
 Collection data from websites.
 Different Book.
 Web pages.
1.6 Limitations
Any research work needs high degree of investment regarding collection of
information, creation of database, literature review and analysis of data. While doing
so, many limitations arise even though I always put my best effort to avoid them. In
conducting the present study, the following limitations have been faced-
 Only 12 weeks were not sufficient to collect and understand all the activities
related to banking.
 In the research areas, the authorities could not express to us accurate data
easily for the reason of their confidentiality.
 The executives of the bank could not give adequate time because of their
work.
 All the interpretation and conclusion about the result is based on the analyst
own perspective.

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Chapter Two:
Organizational
Overview

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2.1 Definition of Islamic Bank
Islamic Banking is a banking activity that is consistent with the principals of Islamic
Shari’ah and its practical application through the development of Islamic economics.
As such, a more correct term for Islamic Banking is Shari’ah compliant finance.
The organization of Islamic conference (OIC) defined an Islamic Bank as “A financial
institution, whose statues, rules and procedures expressly state its commitment to the
principals of Islamic Shari’ah and to the banking of the receipt and payment of
interest on any of its operations”.
2.2 Background of Al-Arafah Islami Bank Limited
With the objective of achieving success here and hereafter by pursuing the way Allah
and path shown by His Rasul (SM), Al-Arafah Islami Bank Limited was established
(registered) as a private limited company on 18 June 1995. The inaugural ceremony
took place on 27 September 1995. Its Head Office is located at Ai-Arafah Tower, 63,
Purana Paltan, Dhaka-1000, Bangladesh.
Being one of the biggest Muslim nations Bangladesh individuals are especially
careful about the Islamic way of the life. Con-currently the bank is operating with an
authorized capital 15000.00 Million and paid-up capital 9469.58 Million. The bank is
mainly guidance and well balanced control Islamic scholars and experienced and
educated businessman makes sure that the bank is running according to the Islamic
Shari’ah.
The equity of the bank stood at TK 1923.61 million as on 31 December 2015, the
manpower was 3683 as on 27 December 2018 and the number of shareholders was
25792 as on 27 December 2018. It has achieved a continuous profit and declared a
good divided over the years. High quality customer service though the integration of
modern technology and new products is the tool of the bank to achieve success. The
bank has a diverse array of carefully tailored products and services to satisfy customer
needs.
The bank is committed to contribute significantly to the national economy. It has
made a positive contribution towards the socio economic development of the county
with 168 branches of which 25 is AD throughout the county.

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2.3 Vision
To be a pioneer in Islami Banking in Bangladesh and contribute significantly to the
growth of the national economy
2.4 Mission
 Achieving the satisfaction of Almighty Allah both here & hereafter
 Proliferation of Shari’ah Based Banking Practices.
 Quality financial services adopting the latest technology.
 Fast and efficient customer service.
 Maintaining high standard of business ethics.
 Balanced growth.
 Steady & competitive return on shareholders’ equity.
 Innovative banking at a competitive price.
 Attract and retain quality human resources.
 Extending competitive compensation packages to the employees.
 Firm commitment to the growth of national economy.
 Involving more in Micro and SME financing.
2.5 Commitments
 AIBL is a customer focused modern Islamic Bank, sound and steady growth in
both mobilizing deposit and making quality investment to keep their position
as a leading Islami bank in Bangladesh
 To deliver financial services to retail, small and medium scale enterprises, as
well as corporate clients through branches across the country.
 AIBL’s business initiatives are designed to match the changing trade &
industrial needs of the clients.

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2.6 Objective of AIBL
The objectives of Al-Arafah Islami Bank Limited are not only to earn profit but also
to do good welfare to the people. The main objectives of AIBL are listed below:
 Al-Arafah Islami Bank Limited believes in its uncompromising commitment
to fulfill its customer needs and satisfaction and to become their first its
customer choice in banking. The bank is committed to run all its activities as
per Islamic Shari’ah. AIBL, its steady progress and continued success has
earned lots of reputation that made AIBL is one of the leading Private Banks
of the country.
 Its aims are to introduce a welfare-oriented banking system and also establish equity
and justifies in the field of all economic activities.
 Investment is made through different mode permitted under Islamic Shari’ah
 All the activities of AIBL are conducted on interest-free system according to Islamic
Shari’ah.
 It plays a vital role in human resource development and employment-generation,
particularly for the unemployed youths.
 Investment income of bank is shared with the Mudaraba depositors according to
ensure a reasonably fair rate of return on their depositors.
 Its aims are to achieve balanced growth & development of the country through
investment operation, particularly in the less development areas.
 It extends co-operative to the poor, helpless and low income group of people for their
economic enlistment particularly in rural areas.
2.7 AIBL Contribute in the country’s economy
AIBL is always highly focused to the development of the Economy through following
process.
 Generation of work sectors around the country
 Aiding the small and big industries with easy financial solutions.
 Encouraging depositors to deposit by providing security of the fund.
 Flourish Export Import by aiding the exporters and importers through various
services

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 Encourage small scale savings
 Encourage Charity
 Provides quality financial services
 Gather small funds and use them in engaging big development sector.
 Facilitating easy transfer of money.
 Encourage poor people to contribute in national economy giving financial
help.
2.8 Features of AIBL
As an Islami bank, AIBL are singular in every positive aspect. AIBL provide a bunch
of state-of-art banking services within the wide bracket of shariah. AIBL are unique
with their products, strict with their principal and uncompromising with their honesty.
Some of AIBL special features that make us notable in Islamic banking sector are as
follows:
 All activities of AIBL are conducted under a profit/loss based system
according to Islamic Shariah to get the nation rid of Usury.
 Its investment policies under different modes are fully Shariah compliant and
well monitored by the board of Shariah Council.
 During the year 2007, 70% of the investment income has been distributed
among the Mudaraba depositors.
 In 2008, 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 AGMs (Annual General Meeting). Whenever
needed EGMs (Extraordinary General Meeting) are also arranged.
 We regularly pay dividend to our valued shareholders. For the year of 2013,
we declared 13.50% bonus dividend to our shareholders.
 We 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.
 The Bank upholds the Islamic values of establishment of a justified economic
system through social emancipation and equitable distribution of wealth.

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 Following 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 English Medium Madrasha and AIBL Library. More endeavors will
inshallah follow in future.
2.9 Core values
 Trust in Almighty Allah
 Adherence to the spirit of Islamic Shari’ah
 Highest standard of Honesty & Integrity
 Transparency & Accountability
 Welfare Banking
 Equity & Justice
 Environmental Consciousness.
2.10 Distinguishing Features of conventional & AIBL
Conventional Banks Al-Arafah Islami Bank Limited
The functions and opening modes of
conventional banks are based on man-
made principles.
The functions and opening modes of
AIBL is based on Islamic Shari’ah.
The interest is assured of a
predetermined rate of interest.
In contrast, it promotes risk sharing
between provider of capital (investor)
and the user of funds (entrepreneur).
It aims at minimizing profit without any
restriction.
It also aims at minimizing profit but
subject to shariah restrictions.
It does not deal with Zakat. In the modern AIBL system, it has
become one of the service-oriented
functions of the AIBL to collect and
distribute Zakat.
Its scope of activities is narrower when
compared with AIBL.
Its scope of activities is wide when
compared with a conventional bank.
Table -1 : Distinguishing Features of conventional & AIBL

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2.11 Corporate Information
Date of Registration 18 June, 1995
1st
Branch Motijheel Branch, Dhaka
Opening Ceremony 27 September, 1995
Chairman Alhajj Abdus Samad Labu
Vice Chairman Alhajj Abdus Salam
Local Partnership of Capital 100%
Equity 22,520.68 Million
Authorized Capital 15,000.00 Million
Deposit 244,806.26 Million
Investment 235,905.23 Million
Paid-up Capital 9, 943.06 Million
Number of Shareholders 30,386
Number of Branches 168
Rural Branches 91
City Branches 77
Table-2 : Corporate Information of AIBL
2.11.1 Auditor Information
Auditors
HODA VASI CHOWDHURY & CO. RAHMAN MOSTAFA ALAM & CO.
Chartered Accountants Chartered Accountants
BTMC Bhaban (8th Level) Paramount Heights (7th Floor D2,C1 &
A)
7-9 Kawran Bazar C/A
Dhaka- 1000
65/2/1 Box Culvert Road
PuranaPolton , Dhaka- 1000
Table-3 : Auditor Information of AIBL

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2.12 Corporate Structure of AIBL
Chairman
Vice Chairman
Board of Directors
Managing Director
Deputy Managing
Director
Top Management
Senior Executive
Vice President
Executive Vice
President
Senior
Vice President
Consultant
First Vice president
Assistant Vice
president
Executive Level
Management
Senior Executive
Officer
Executive Officer
Senior Officer
Mid- Level
Management
Management
Trainee Officer
Junior Officer
Assistant Officer
Trainee Assistant
Junior Level
Management
Chart-1 Corporate Structure of AIBL

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2.13 AIBL Product and Services
AIBL successfully marked its products designed to fulfill the various socio-economic
strata. Attractive features of the products have given a distinctive image among the
private banks. The bank has been continuous endeavor to offer new products and
services. As a commercial bank, they provide all traditional banking services, which
are:
 General Banking Department
 Foreign Exchange Department
 Investment Department
General Banking Department:
 Receipt and payment cash.
 Mobilization of deposits.
 Handling transfer transactions.
 Operations of clearing houses.
 Maintenance of accounts with Bangladesh Bank and other banks.
 Collection of cheque and bill.
Deposit Products:
 Al-Wadesh Current Deposit (CD).
 Mudaraba Savings Deposit (MSD).
 Mudaraba Spcial Savings Deposit.
 Mudaraba Term Deposit Account (MTDR).
 Mudaraba Monthly Installment Term Deposit (ITD).
 Mudaraba Kotipoti Deposit Scheme.
Investment Products and Scheme:
 Bai-Murabaha
 Bai-Muajjal
 Bai-Salam
 Mudaraba
 Musharaka
 Hire Purchase under Shirkatul Melk (HPSM).

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 Musharaka Documentary Bill (MDB) in Foreign Currency.
Remittance Services:
 Payment of Spot Cash Remittances
 Central Crediting Account
Alternative Delivery Service:
Al-Arafah Islami Bank Limited, the biggest commercial Bank in the country, has
introduced a good number of technology based smart products by the various
Alternative Delivery Channels (ADC) to render quick, easy and customized banking
services to the customers. Through using these products and services, the customers
can avail necessary banking facilities round the clock. The ADC facilities of the bank
are given below:
A. ATM/ VISA Debit Card: To save the customers from hazards of carrying
cash and to ensure availability of cash in need, the bank has introduced
ATM/VISA supported debit card. By using this card, the customers can
withdraw cash up to TK. 50,000/- (Fifty Thousand) from all VISA and
National Payment Switch Bangladesh (NPSB) ATM booths throughout the
country. The clients can also purchase products through VISA Debit Card up
to TK. 50,000/- Major features are:
1. No issuance fee (free of charge for the 1st
year).
2. 24 hour cash withdrawal from ATM booth.
3. Alternative to cash for shopping through POS.
4. Hotel and Hospital booking, Bus, Train and Air ticketing
B. i-Banking: To enjoy banking service by a finger click, the bank is providing
internet banking services to the customers.
Major features of i-Banking are:
1. Anytime banking from anywhere of the world.
2. Account Balance Inquiry.
3. i-transfer at the lowest fees.

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2.14 Financial highlights of AIBL
SL. No Particulars 2016 2017
1 Investment Income 18,830.15 20,491.03
2 Profit paid on Deposit 9,957.73 11,784.20
3 Paid up Capita 9,943.06 9,943.06
4 Authorized Capital 15,000.00 15,000.00
5 Deposits 199,703.92 944,806.26
6 Investment 196,519.38 235,905.23
7 Shareholders’ Equity 21,337.48 22,520.68
8 Fixed Assets 3,240.18 3,260.38
9 Net Profit Margin% 4.60 3.87
10 Investment /Deposit Ratio 88.50 89.95
11 Return on Equity (ROE)% 15.70 14.07
12 Return on Assets (ROA)% 1.23 0.99
13 Cost of fund % 7.92 7.50
14 Cost/Income ratio in
operating business (%)
35.60 43.28
15 Number of Employees 3,070 3,446
16 Number of Shareholders 36,695 30,386
Table-4 : Financial highlights of AIBL
2.15 SWOT Analysis of AIBL
Strengths.
 AIBL feels responsible for providing its customer quality service in consistent
manner.
 AIBL has good financial backup.
 It uses the latest technology to operate its daily transactions.
 AIBL has good working environment for both staffs and client
 AIBL holds a good reputation in the banking markets.

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 AIBL maintains a costly R&D sector for better offers and schemes.
Weaknesses:
 AIBL has a gap of well-trained staffs.
 AIBL don’t have enough promotional campaigns like other banks.
 Staffs feels they are paid less compared to other banks
 Staff management schedule is week.
Opportunities:
 Demand for Islami bank is increasing day by day.
 Modern technologies are getting handy.
 Increase of investors in the country.
Threats:
 Other commercial banks are also opening Islami branches.
 Inflation affects are hampering profits of bank.
 The rates of profit reduced due use of 9% profit quota.
 Other banks has far better technology to service their customers.

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Chapter Three:
Investment
Management

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3.1 Definition of investment
An investment is an asset or item that s purchased with the hope that it will generate
income or will appreciate in the future. In an economic sense, an investment is the
purchase of goods that are not consumed today but are used in the future to create
wealth. In finance, an investment is a monetary asset purchased with the idea that the
asset will provide income in the future or will be sold at a higher price for a profit.
3.2 Introduction of Investment Department
Al-Arafah Islami bank of modern times. It is by far responsible for satisfying
customers with quality financial services/products and to aid GDP growth of’ the
country by developing business & boost industrialization, raising export and
import. This creating enormous employment scope and help reduce
unemployment, poverty thus raise standard of living of people and develop an
overall socio-economic structure of the country.
In achieving such noble objective investment department of the bank is of shares
equal responsibility and importance as a vital part of the total revenue of the bank
is generated from it along with maximum risk. The failure of a commercial bank
is when the investment mechanism fails assets. Therefore investment department
not only features dominant position in the asset structure, it is undoubtedly
responsible for the success of the bank also, above all this investment policy and
control guidelines of the bank has been prepared which is subject to amendment,
revision, readjustment and refinement from time to time as may be warranted by
the change of circumstances due to passage of time to suite the requirement of the
bank.
3.3 Investment Policy of AIBL
Investment operation of a Bank is extremely vital because the greatest share of
total revenue is generated from it, most risk is targeted in it and therefore the
existence of a Bank largely depends on well management of its Investment
mechanism. For economical readying of mobilized resources in profitable, safe
and liquid sector a sound, well-defined and acceptable Investment Policy is
important.

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One of the vital feature of the investment policy of the bank is to invest on the
basis of profit-loss sharing system in accordance with the principles of Islami
Shariah. Profit generation is the solo motive, the objective behind this investment
scheme the bank emphasis in actively participating in social good according to
the Quran and Sunnah.
In order to implement the Investment Policy adopted by the Bank a 7-year long
term Plan has been drawn-up for year between 1995 to 2002and put into effect.
Then another 5-year investment plan has been taken for the year 2003 to 2008
and put into effect. These plans aim at diversify the investment by size sector
geographical area, economic purpose and securities to bring in phases all sectors
of the economy and all types of economic groups of the society within the fold of
Bank’s investment operations
3.4 Investment Objective of AIBL
The objectives and principles of investment operations of the Banks are:
 The funded investments are strictly in maintained with the principles of
Islam.
 To diversify investment portfolio according to investment, sectors
(public and private), economy, geography and industrial and
agricultural.
 Practice mutual benefit mechanism both for the Bank and the
investment client by keeping the socioeconomic requirement of the
country in view.
 Increase the number of potential investors by making profitable and
productive investment.
 Take various developments mechanisms for alleviating poverty,
increase income and employment generation.
 Invest in the form of goods and commodities rather than give out cash
money to the clients for business
 Encourage social enterprises that work for the betterment of the
society.

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3.5 Investment strategies of AIBL
Risk within the investments and come on that are reticulate. Associate investment
policy that emphasizes a high come should settle for comparatively high risk.
Conversely, associate investment policy that may tolerate solely bit of risk should
be ready to simply accept a comparatively low come.
As such, it's very troublesome whether or not to pick out a high come port-folio
on high risk or low risk port-folio with a coffee come. Nevertheless, considering
all aspects following pointers shall be followed as strategy for banks investments
 If two port-folios have an equivalent risk however completely different
returns, the port- folio having higher come shall be most preferred.
 If the 2 port-folios have constant expected returns, however completely
different degrees of risk, the port-folio with lower risk shall get
preference. If one port-folio has each the next come and a lower risk
than another, the first portfolio shall be preferred.
 Keeping seeable the risk issue, the bank shall maintain flexibility in
determination of rate of come on investments on case to case basis in
thought of the risk part concerned within the several investments.
 Emphasis is given for enlargement and strengthening small scale
industries and rural industries. This vastly potential industrial sub-
sector shall produce employment opportunities to rural and semi-urban
population and shall have positive contribution working and financial
gain generation and poverty alleviation of the low-income cluster.
 Investment facilities shall be extended for institution and enlargement
of export orienting forward I back ward linkage and import substitute
industries.
 The bank requires retaining 10% of its total deposit liability as
Statutory Liquidity Ratio (SLR) including 4% Cash Reserve Ratio
(CRR) with the Central Bank. The bank may go for investments up to
90% of its total deposit. The perspective investment plan is being

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formulated quantifying the allocation of investments size-wise, sector-
wise, and geographical area-wise, economic purpose-wise, security-
wise and mode-wise keeping in view 20% projected growth of deposit
each year.
 Taking into consideration the broad objectives of the bank, national
priority, socio- economic need, growth level of the economy, and the
investments port-folio of the bank may gradually be diversified and
allocated in term of size, sector, geographical area, economic purpose,
security and mode.
 Safety, security, profitability and liquidity of Bank’s investments.
 Each branch invests, at least 50% of its deposits locally.
 Enhance of extending limit of good investment clients.
 Adaptation of modern technology.
So, banks investment policy, investment planning and investment budgeting, till
situation changes / improves, shall aim at promotion of quality general
investment.
3.6 Importance of Investment
 Investment plays a vitalrole in national economy in the following ways-
 It provides working capital for industrialization
 It helps to create employment opportunities
 Investment controls almost all kinds of production activities of the country
 It brings social equity
 Cash generation occurs for its successful performance
 Business cycle can run well only by the help of lending system
 Economic stabilization
 Raise standard of living

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3.7 Investment activities of AIBL
Investment is the action of deploying funds with the intension and expectation
that they will earn a positive return for the owner. Funds may be invested in
either real assets or financial assets. When resources are used for purchasing
fixed and current assets in a production process or for a trading purpose, then it
can be termed as real investment. Specific Examples of financial investments are:
Deposits of money in a bank account, the purchase of Mudaraba savings bonds or
stock in a company. Since Islam condemns hoarding savings and a 2.5 percent
annual tax (ZAKAT) is imposed on saving, the owner of excess Savings, if he is
unable to invest in real assets, has no option but to invest his savings in financial
assets.
3.8 Principles of Investment of AIBL
The Principles of investment operations of the bank are:
 To invest fund strictly in accordance with the principals of Shariah.
 To ensure mutual benefit both for the bank and the investment client
by professional appraisal of investment proposals, judicious sanction
of investment, close and constant supervision and monitoring thereof.
 To make investments keeping the social-economic requirement of the
country in view.
 To increase the number of potential investor by main participatory and
productive investment.
 To finance various development schemes for poverty alleviation,
income and employment generation with a view to an accelerating
sustainable social- economic growth of the society.
 To invest in the form of goods and commodities rather than giving out
cash money to the investment clients.
Any Investment on products or services that causes bad effect to human is
strictly prohibited like alcohol production cigarette manufacturing etc.
3.9 Sources of Fund
Al –Arafah Islami Bank limited, in general collects fund from reserves, and funds
rose through borrowings from IBG account. The main part of their operational

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funds is however, Derived from the different categories of deposits accepted on
the Islamic principles of Al-Wadiah (safe custodianship) and Mudaraba (trust
Financing). AIBL, Mirpur-1 Branch has opportunity to collect fund in two ways
such as ‘Primary’ and ‘Secondary’ sources. These are discussed under
3.10 Primary Source
 Reserves
The central bank enquires that every Islamic bank shall maintain reserve fund.
Before any dividend is declared AIBL shall transfer to the reserve fund out net
profits of each year after due provision has been made for Zakat and: in
percentage of the net profits in order build up adequate reserves
 Liquid Asset
AIBL is further required to keep at all times minimum amount of liquid asset
against its deposit liabilities expressed as certain percentage of the despoils, as
may be, preserved from time to time notice in writing by the central bank.
 Borrowing from IBG
To tide over temporary liquidity shortages AIBL, as member banks are tit1d to
borrow from the central bank, as the lender of last resort.
 Inter-Bank borrowing
AIBL has established interest -free fund arrangements with local and foreign
banks on the basis of reciprocity. Normally, under prior arrangement, the Islamic
banks keep surplus funds with selected banks.
3.10.1 Secondary Sources
1. Mobilization of Deposits
The main function of AIBL is to mobilize savings and provide financial support
to the entrepreneurs. Islamic banking is a response to such exigencies. It
mobilizes savings of the common people in line with Islamic Shariah. Techniques
employed by Islamic banks for saving mobilization are as Follows:

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2. AL-Wadiah Account
AIBL banks receive deposits in their Al-Wadiah account. This account is similar
to the demand deposit account of deposit account. In addition, depositors may
withdraw all or a part of the funds deposited in this account without restriction.
The term Al-Wadiah means deposit of money allowing somebody to claim the
funds in the account, the bank as trustee preserves and safe keeps the funds
deposited.
3. General Mudaraba Account
The account of AIBL is different from the checking account of an interest based
bank. Mudarabais a form of business contract where one party supplies money
and the other manages the business by investing labor and time. Profits generated
contract. However, in this arrangement, the financier is solely responsible for any
loss that may beincurred
1. Term Mudaraba Account Islami banks receive different kinds of mudaraba
The deposits are generally for 3 months, 6 months, 12months, 24 months, and 36
months
2. Special Mudaraba Account
When AIBL receives a Mudaraba deposit for’ investment in some specific
business, sector or project, the deposit is ca1kj a “Special Mudaraba Deposit”.
AIBL provides some special scheme for theirclient.
3.11 AIBL Investment Sectors
1. Investment inAgricultural Sector
2. Investment inIndustrial Sector
3. Investment inBusinessSector
4. Investment inForeign Trade
5. Investment inConstruction and Housing
6. Investment inTransportation Sector
7. HirePurchase SirkatulMelk (HPSM)
8. InvestmentSchemes inMosque and Madraba (MMIS)

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9. Villageand SmallInvestmentSchemes (GSIS)
10.Small EnterpriseInvestment Schemes (SEIS)
11.Consumer Investment Schemes(CIS)
12.Rural or Agriculture Investment Sector
3.12 Investment Modes of AIBL
When money is deposited in the AIBL, the bank, in turn, makes investments in
different forms approved by the Islamic Shariah with the intention to earn a profit.
Not only a bank, but also an individual or organization can use Islamic modes of
investment to earn profits for wealth maximization. Some popular modes of
investment of AIBL’s are discussed below.
Ijara
Modes of Investment
Share Mechanism Bai- Mechansm Ijara Mechanism
Mudarab
a
Musharak
a
H.P.S.M
Bai- Murabaha Bai-Muajjal Bai-Istisna
Chart-2
Bai-Salam
Investment Modes of AIBL

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3.13 Investment product in AIBL
1. Bai-Mudaraba
2. Bai-Musharaka
3. Bai-Murabaha (C.C Pledge)
4. Bai-Muajjal (Commercial & Real State)
5. Bai-Salam
6. Bai-Istisna
7. Bai-IjaraBill
8. Bai-Murabaha (Trust Receipt)
9. Hire Purchase Sirkatul Melk (Real State)
10. Hire Purchase Sirkatul Melk (HPSM)
11.Consumer Investment Scheme(CIS)
12.Small Enterprise Investment Scheme(SEIS)
13.Mosjid-Madrasha Investment Scheme(MIS)
14.Agriculture &Rural Small Investment Scheme etc.
3.14 Share Mechanism
3.14.1 Mudaraba
It is a form of partnership where one party provides the fund while the other
provide the expertise, labor and the letter referred to at the Mudaraba, any profits
accrued are shared between the two parties on a pre-agreed basis, while capital
loss in exclusively born by the partner providing the capital.
Important Features:
 Bank supplies capital as Sahib- al -Mall and client invest if in the business with
his experience.
 Administration and management are maintained by client.
 Profits is parted as per agreement.

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 Bank bears the actual loss alone.
Client cannot perform another investment for that specific business without the
permission of the Bank
3.14.2 Musharaka
The term Shirkat and Musbaraka have been taken from Arabic words “Shairkah”
and “Sharika.” The word shirkah means a partnership between more than one
partners. Thus the word “Musharaka” and “Shirkat” means a partnership
established between two or more partners for purpose of a commercial venture
participate both in the capital and management where the profit may be shared
between the partners as per agreed upon. Basic human need, Al-Arafah Islami
Bank Limited is committed to contribute to this end to provide a peaceful and
happy
Important Features:
 The investment client has to run and manage the business.
 The bank should take part in the policy and decision making as well as
analyzing the operations of the business. The bank may if want to give
suitable personal(s) to run the manager the business and to keep
records of accounts and of the business property.
 As the investment client shall manage the enterprise, the bank may
more share of profit to him than that of his proportion capital
contribution.
 Loss, if any, shall be divided equally to both on the basis of capital ratio.
3.15 Bai-Mechanism
3.15.1 Bai-Murabaha
The terms “Bai” and “Murabahaa” have been derived from Arabic words. “Bai”
means purchase and sale and the word Murabaha means in cash” Bal-Murabaha
means sale for which payment is in cash or in future fixed date or within a fixed
period, in short, it is a sale on cash.

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Definition
Bai-Murabaha may be defined as a contract between a buyer and a seller under
which the seller sells a specific amount of commodity to the buyer at a cost plus
agreed profit which will be payable in cash on any fixed date in total or in
installments.
Features of Bai-Muraabaha
 A client can make an offer to purchase particular goods from the bank
for a specific agreed price. Including the cost of the goods plus an
amount of profit.
 A client can make the promise to purchase from the bank, he is either to
satisfy the promise or to indemnify any losses incurred from the
breaking the promise without excuse.
 It is allowed to take cash or equivalent security to guarantee to keep the
promise or to suffer any losses if occur.
 Documentation of the debt resulting from Bai-Murabaha by a
Guarantor, or a mortgage, or both like any other bank debt isallowed
Types of Murabaha
In respect of dealing parties Bal-Murabaha are of two types.
Ordinary Bai-Murabaha
When there are only two parties, the seller and the purchaser, where the seller as
an ordinary trader purchases the goods from the market without depending on
any order and promise to buy the same from him and sells those to a buyer for
cost plus profit, then the sale is called Ordinary Bai-Murabaha.
Bai-Murabaha on Order and Promise
This is when there are three parties, the buyer, the seller and the Bank as an
intermediary trader between the buyer and the seller, where the Bank upon
receipt order from the buyer with specification and a prior outstanding promise to

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buy the goods from the Rank, purchases the ordered goods and sells those to the
ordering buyer at a cost plus agreed profit, the sale is called “Bai-Murabaha on
Order or Promise”, generally known as Murabaha.
This Murabaha upon order and promise is generally used by the Islami Banks,
which undertake the purchase of commodities according to the specification
requested by the Clients and sale on Bal-Murabaha to the one who ordered for the
goods and promised to buy those for its cost price plus a marked-up profit agreed
upon previously by the two parties, the Bank and the Clients.
3.15.2 Bai-Muajjal
The terms “Bai” and “Muajjal” have been taken from Arabic words Ajal and Bai.
The word Bai stands for purchase and sale and the word Ajal is a fixed time or a
fixed period” Bai-Muajjal means sale for which payment is made on a date fixed
earlier or within a fixed period of time. In short, it is a sale on credit.
Definition
Bai-Muajjal can be termed as a deal between a purchaser and a seller following
which the seller sells specific goods), to the buyer at an agreed price payable on
an agreed future date in total or within a fixed period in installments. The seller
may also sell the goods purchased by him as per order and specification of the
Buyer.
Features of Bai-Muajjal
 The client goes to the bank with a deal to purchase a specific good by
the Bai-Muajjal agreement.
 The client must have to give security to guarantee for payment on a
later date.
 If the bank wishes it may sell the goods at higher price to earn more
profit.
 The bank is not liable to show the profit made on transactions.
3.15.3 Bai-Salam
“Bai” and “Salam” are the terms that have been taken from Arabic words Bai and

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Salam. The word “Bai” means “sale and purchase” and the word Salam means
“Advance”. “Bal-Salam” means Advance Sale and Purchase.
Definition
Under this mode Bank will executive purchase contract with the client and make
advance payment against purchase of product, which is under process of
production. Bai-Salam contract will be executed after making any investment
showing price, quality, quantity, time, place and mode of delivery. The profit is
to be negotiated. The payment as the price of the goods is made at the time of
Agreement on the spot and the delivery of the goods is deferred.
Features of Bai-Salam
 Normally, Industrial and agricultural products are bought or sold in
advance under Bai- Salam mode.
 It is allowed to obtain equal security from the seller client to secure the
investment.
 It is allowed to obtain mortgage from third party as security before the
signing of the agreement or during the agreement
3.15.4 Bai- Istisna
Istisna is the word that has been borrowed from the word” Istisna” which stands
for industry or Manufacturing enterprise. Istisna means to goods manufactured by
placing orders to a manufacturer.
Definition
Istisna is a deal between a manufacturer/seller and a buyer under which the
manufacturer/seller sells specific product(s) after having manufactured,
permissible under Islamic Shariah and Law of the Country after haying
manufactured at an agreed price payable in advance or by instilments within a
fixed period or on/within a fixed future date on the basis of the Order placed by
the buyer.

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3.16 Ijara Mechanis
Ijara means lease, rent or wage. Generally, the Ijara concept refers to
selling the benefit of use or service for a fixed price or wage. Under
this concept, the Bank makes available to the customer the use of
service of assets/equipment such as plant, office automation, motor
vehicle for a fixed period and price.
3.16.1 Hire Purchase
The term ijara has been derived from the Arabic works Ajarah and Ujrut which
means consideration, return, wages or rent. This is really the exchange value or
consideration, return, wages, rent of service of an Asset. Ijara has been defined as
a contract between two parties, the Hire and Hirer where the Hirer enjoys or
reaps a specific service on benefit against a specified consideration or rent from
the asset owned by the Hire. It is a hire agreement under which a certain asset is
hired out by the Hire to a Hirer against fixed rent or rentals for a specified period.
3.16.2 Hire Purchase under Shirkatul Melk
Hire purchase under shirkatul Melk is a special type of contract which has been
developed through practice. Actually, it is a synthesis of three contracts: Shirkat,
Ijarah and sale. Shirkat means partnership. Shirkatul Melk means share an
ownership. When two or more persons supply equity, purchase an asset, own the
same jointly, and share the benefit as per agreement and bear the loss in
proportion to their respective equity, the contract is called Shirkatul contract.
Stages of Hire Purchase under Shirkatul Melk
Thus Hire Purchase under Shirkatul Melk Agreement has got three stages:
 Purchase under joint ownership.
 Hire and
 Sale and /or transfer of ownership to the other partner Hirer.

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3.17 Investment Processing of AIBL
Generally, a bank takes certain steps to deliver its proposed investment to the client.
But the process takes deep analysis. Because banks invest depositors fund are not
bank’s own fund. If the bank fails to meet depositors demand, then it must collapse.
So each, bank should take strong concentration on investment proposal. However, Al-
Arafah Islami Bank (AIBL) makes its investment decision through successfully
passing the following crucial steps-
Here, investment taker (client) approaches to any of the branch of Al-Arafah Islami
Bank Bangladesh Limited (AIBL). Then he talks with the manager or respective
officer (investment). Secondly, bank considers five C’s of the client. After successful
completion of the discussion between the client and the bank, bank selects the client
for its proposed investment. It is to be noted that the client/ customer must agree with
the bank’s rules & regulations before availing investment.
Generally, bank analyses the following five C’s of the client-
1. Character
2. Capacity
3. Capital
4. Collateral
5. Condition
3.17.1 Application Stage
At this stage, the bank will collect necessary information about the prospective client.
For this reason, bank informs the prospective client to provide and or fill duly
respective information which is crucial for the initial of investment proposal.
Generally, here, all the required documents for taking investment have to prepare by
the client himself. Documents that are necessary for getting investment of AIBL are
prescribed below-
 Trade License photocopy (for proprietorship)
 Abridged pro forma income statement
 Attested copy of partnership deed (for partnership business)

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 Prior three (03) years` audited balance sheet (for Joint Stock Company)
 Prior three (03) years` business transaction statement for the Musharaka
/Mudaraba investment
 Abridged proof income statement for the Musharaka / Mudaraba investment
 Attested copy of the Memorandum (MOA) & Articles of Association (AOA)
for the joint stock company
 Attested copy of the Tax Identification Number (TIN) including final
assessment
 Detailed summary of the sundry debtors and creditors (including both time &
schedule)
 Summary of the personal movable & immovable assets, and others
3.17.2 Appraisal Stage
At this stage, the bank evaluates the client and his/ her business. It is the most
important stage. Because, on the basis of this stage, bank usually goes for sanctioning
the proposed investment limit or proposal. If anything goes wrong here, the bank
suddenly stops to make payment of investment. In order to appraise the client, AIBL
provides a standard F- 167B from (Appraisal report) to the client for gathering all the
information. However, the following contents are presented from that appraisal
report-
 Company’s or client’s information
 Owner’s information
 List of partners
 Purpose of investment/ facilities
 Details of proposed facilities/ investment
 Break up of present outstanding
 Other liabilities of the client
 Previous banker’s information
 Details of sister/ allied concerns
 Allied deposits as on

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 Business/ industry analysis
 Relationship analysis
 Asset- liability position of the client as per audited balance
sheet
 Working capital assessment
 Risk grade
 Particulars of the go down for storing mpi/ murabaha goods
 Insurance coverage
 Audit observation
 Security analysis
3.17.3 Sanction Stage
As this stage, the bank officially approves the investment
proposal of the respective client. In this case client receives
bank’s sanction letter. Al-Arafah Islami Bank (AIBL) sanction
letter contains the following elements-
 Investment Limit in Million
 Mode & amount of Investment
 Purpose of investment
 Period of Investment
 Rate of Return
 Securities:
- Primary- Stock of goods in the primary security
- LC/ Bills- Related Documents
- Murabaha Post Investment (MPI)/ Bai
Murabaha- Pledge of MPI/ Bai- Murabaha
goods
- MPI/ Bai Murabaha- TR: Lien on goods to be
released
- Cash/ Goods-
- Bai Murabaha- 25% cash security on cost price
to be subsequently converted to goods security

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- TR (Trust Receipt) - Without cash security
- Collateral- Immovable properties
3.18 Limit of Investment
Investment is offered to the extent of single borrower exposure limit as fixed by the
Bangladesh Bank from timeto time.
3.19 Documents needed for preparing investment proposal
 Application for investment facility (Organization pad)
 Trade License
 IRC for importer
 ERC for Exporter
 Membership Certificate of Chamber of Commerce
 TIN (Tax Identification Number)Certificate
 VAT registration certificate
 Bank Account Statement
 Account Statement from others Bank
 Stock Valuation Report
 Account receivables
 Account payables
 Particulars of the Properties
 Others Assets Statement
 CIB (Credit Information Bureau) Report
3.19.1 Proposal Analysis
The project proposal; is analyzed and decision about the project should be taken. The
investment department is responsible for the analysis, after preliminary appraisal of the
investment project the final approval is obtained from the manager. If the proposal is

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beyond the capacity of the manager then it is sent to head office, then head office
makes memo for the placement to managing board of directors as per delegation of
business power. The delegation of business power is also assigned to employees as per
their designation. And finally the head office decision is sent to branch authority as
sanction advice or regret letter.
3.19.2 Terms and Conditions Applied
 The disbursement will be made after Completion of all documentation and
other formalities after fullsatisfaction of the branch.
 Any drawing beyond the sanction limit willnot be allowed under any circumstances.
 The disbursement willbe allowed under the principle of Shariah
 The client will have provide an undertaking to the effect that the client does
not have any overdue/non performing liability with any other
Bank(s)/Financial Institution(s) in the name of client’s company or in the name
of client’s sister/allied concern(s).
 The client willhave to route all of his/her business through the Bank gradually.
 All legal fees, Insurance Premium and other relate cost(s) must be carried by the
client.
 Balance Confirmation Certificate must be submitted to the Bank regularly as
30
th
June and 31
th
December of each calendar year.
 The Stock Valuation Report/Statement to be submitted to the Bank on Yearly
basis.
 The client shall have to deposit the proceeds of the of the goods towards
adjustment of the related investment account(s) with the branch immediately
after sale irrespective of the due date of payment of the investment.
 The client will not avail any sort(s) of investment facility from any other
branch of this Bank without prior written permission from the Bank.
 In the event of client failure to make full payment of sale on the due date,
compensation shall be recovered from client as per Bank’s rule as mentioned
earlier.
 Any change of address of the client must be notified to the branch
immediately after change of the same.
 Daily sale proceeds/income of the project shall have to be deposited in
client’s current account with the branch.

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3.20 Couse of over dues
Irregular/over-due investment in a bank increases at a faster rate and the same
ultimately jeopardize the interest of the bank. In this connection we append below
the causes of irregular and over-due investment for immediate attention of the
concerned officials so that the trend in this regard can be arrested.
3.20.1 General Causes of over dues:
1. Selection of the client:
While selecting investment clients Branches do not give due weighted average in this
regard. As such clients having bad track record are also inducted for allowing
investment. Selecting of client should always be made strictly on the basis of criteria
given in short asunder:
 The client should be an honest man of active habit with firm commitment.
His honesty and integrity must be undisputed.
 He must be a good businessman having sufficient experience in the related
line of trade. He should also have good track record of repaying bank investment.
 He must organize his own capital in the business and capacity to bear the loss
as well as to run the business. He must have foresight for producing future
market conditions.
 He should deal in such commodities which have social utilities and Sharia
permissibility.
2. Violation of Discretionary Power:
Investments are often allowed violating Discretionary Power of the Branch Manager
which ultimately results in irregularities. Under no circumstances Discretionary
Power should be exceeded. In case any investment is allowed due to exigencies of
circumstances beyond Discretionary Power with prior permission of Head Office
over telephone that should be got confirmed in witting and formal approval be
obtained without delay.

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3. Command Area:
The client must have business establishment within bank’s command area.
Sometimes branches make investment in remote place beyond the command area of
the branch. As result branch cannot ensure effective supervision and control over the
investment. Therefore, while making investment branches should ascertain that the
business establishment of the investment client is within the command area or within
reasonable distance for ensuring easy and effective supervision and control as well as
constant follow- up for timely recover of investment.
4. Net Worth of the party
The net worth of the party must be ascertained properly. Nevertheless, the
investment is in business, cash flow and liquidity position are also to be ascertained.
In fact bank takes decision for making investment among others on the net-worth of
the party. If the net-worth is not ascertained properly bank interest may be
jeopardized subsequently.
5. Market report & Confidential report:
Market report and bank’s confidential report are not obtained. The means and
standing of the party as well as performance with the previous/present banker is to
be obtained checked and verified
6. Cash Flow:
Party’s own investment in business both in cash should be properly ascertained. In
addition cash flow and outflow in business should also be examined by referring to
statement of account.
7. Proper Purchase and sale:
Proper purchase and sale of goods must be done correctly and possession of
commodity shall be obtained. In this connection price, quantity and quality must be
properly ascertained. Purchase memo/cash memo, shall be obtained in the name of
bank.

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8. Proper documentation:
Disbursements of investments are made before completing documentation
formalities obtaining proper securities. Proper charge documents in the respect of
collateral securities relating to property offered as collateral must be obtained.
Original title deeds of mortgaged property, via deeds, C.S., S.A., R.S. / B.S. and
mutation parch up-to-date rent receipt, non-encumbrances certificate with charge fee
receipt, Memorandum of deposit of title deeds, affidavit must be obtained.
Legal opinion on the title deed shall also be obtained. Registered mortgage of
property shall be obtained on execution of deeds drafted by legal advisor.
3.20.2 Causes of over dues of Murabaha Investment:
 Quality and Quantity: The quality and quality of Murabaha goods are to be
properly verified and checked at the time of purchase and storing. The
Murabaha goods should also be verified at regular interval to ensure that the
quality is not deteriorating. While receiving the goods in the go down, the
officers concerned should verify the quality and quality and ensure receipt of
the goods in good condition.
 Over Pricing: Goods should be purchased at the whole sale market price.
Over pricing should always be avoided avert possible shortfall. The price
trend of the commodities for the last one year should be kept in view and
accordingly percentage of cash security should be fixed-up so that bank’s
interest is not jeopardized due to fluctuation.
 Slow Moving Items: Murabaha investment against slow moving or obsolete
or hazardous or less demandable items should always be avoided.
 Control and Supervision of Go down: Overnight watch and ward
arrangement of go down are to be made. Sometimes Go down staffs are
utilized for office works of the branch which should be avoided Go down
staff must be deployed in Go down for proper control and supervision of
Murabaha stock.

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 Inspection: Authorized officials must inspect the Go down at-lest once in a
month and certificate in this regard must be kept in branch record. The duties
and responsibilities of Go down staffs must be spelt out in clear terms.
Branch must also ensure that the Go down staff are discharging their duties
properly.
 Excess Delivery: Excess delivery and delivery without receiving payment
result in unadjusted shortfall which is a gross irregularity and tantamount to
defalcation. Therefore, it must be ensured that excess delivery without
receiving payment does not occur.
 Handling of the Keys of Storehouse: Sometimes keys of the storehouse are
not properly handled and the same is delivered to the party. This is not only a
great lapse but also fraught with great risk. Under no circumstances
storehouse keys should be handed over to the party or any unauthorized person
other than the bank’s officials.
 Storing of Goods: Very often Murabaha goods are stored haphazardly and
piled-up position. As a result the actual position of goods cannot be
ascertained. Goods must be stored in countable manner with due care so that
the quality and quantity can be determined at anytime.
 Bank Signboard: Bank signboard is not displayed in and outside the
Murabaha store house which must be invariably displayed.
 Stack Card: Stack card should be displayed with up to-date information on
each consignment for easy counting and identification.
 Delivery Order: Delivery order should be issued properly field in with
necessary posting in stock and delivery register.
 Insurance: Comprehensive insurance covering value of entire stock + 10%
above the cost should be obtained from enlisted insurance company.

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3.20.3 Causes of over dues of Bai-Mujjal Investment
 Party Must Have Shop: Bai- muajjal investment should not be allowed to
anyone who does not have own shop. The shop must be visited by the
responsible official to ascertain hisoverall business position.
 Assessment of Investment Need: Since Bai- muajjal investment amount to
cash loan therefore, the need of Bai- muajjal investment shall be carefully
determined. Investment should not be more than 30% of own investment of the
client.
 Supervision: Bank’s officials must pay regular visit to the shop of the
investment clients so that, the investment client feel oblige to make regular
transaction in current account as well as repay investment in time.
 Stock in Business: Stocks in business are not verified by obtaining stock
report at regular intervals. Monthly stock-report should invariably to obtain from
the clients.
 Insurance: Insurance shall have to be obtained covering risk of fire and other
accident as well, on hypothecated stock which many branches don’t obtain.
 Follow-up: Follow-up and frequent contact before due date and constant
persuasion on or before due date are to be made by the branches for timely
adjustment and to over dues.
3.20.4 Causes of dues Hire purchase under Shirkatul Melk Investment:
 Obtain of Equity: Equity as per norms and practice is not being recovered
before disbursement of Hire purchase investment. Proper and adequate
equity should invariably be obtained by collateral security for the rest amount.
 Model and Make: Machinery and vehicle of recent model and make shall
have to be procured. Before procuring machinery and vehicle, its technical
feasibility must have to be ascertained. From the experience it is observed
that unless machinery and vehicle, is found technically viable the investment
client cannot repay the loan as per schedule. In case of vehicle it must be get
registered in bank’s name only and insurance cover note, road permit, tax
token must be obtained in bank’s name.

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 Supervision: The vehicle/machinery must be inspected at least once in a
month so that, the same cannot be shifted elsewhere/another route/place without
bank’s knowledge.
3.21 Monitoring and Recovery stage
At this final stage of investment processing of the Al-Arafah Islami Bank Limited
(AIBL), Bank will contact with the client repeatedly, for example- Bank can obtain
Yearly stock report from the client in case of micro investment. Here the Bank will
keep his eye on over the investment taker. If needed Bank will physically verify the
client’s operation, also if Bank feels that anything is going wrong then it tries to recover
its investment fund from the client.
Procedure to be followed for Recovery of Irregular/Overdue Investment and
Time Barred Investment
To regularize/recover irregular and over dues investment in order to overcome the
situation all concerned should take to the following procedures for recovery of
aforesaid investments. In this regard a brief definition of irregular/stuck-up/overdue
investment is also given.
Irregular Investment:
An investment is said to be irregular when regular repayment is not made as per
schedule of repayment, improper documentation leads to non-repayment and value
of security falls down/security becomes obsolete or security available does not patch
the investment outstanding.
Stuck-up investment:
An investment is said to be stuck-up when repayment is stopped as a result of closing
of bossiness, death of investment client and for any other unforeseen circumstances
regarding the investment client unable to pay.

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Over dues investment:
An investment is said to be over dues when repayment does not come within the
period of investment or expiry of the limit and in case of bills repayment is not
received on due date and procedure to be followed for recovery above investments is
given bellow:
Connecting with the client in writing and meeting personally:
In order to timely recovery of investment, supervision at all stage shall be ensured.
This will include supervision from the date of disbursement to total repayment. In
case repayment as per schedule, the manager should personally enquire about the
causes of non-repayment. If he or she convinced that the difficulty is temporary in
nature and is likely to overcome shortly he should discuss the situation with the
investment clients and obtain reasonable definite repayment schedule under intimation
to head office.
Apart from the above as and when any investment becomes irregular or stuck- up or
likely to be over dues, the branch manager apart from contacting the borrower in
writing should also consult discuss with the investment client about his or her
difficulties in regular repayment. If necessary the manager will give suggestion in
consultation with head office for overcoming the difficult situation. He will
personally pursue in such a manner with the investment client so that investment can
be realized without hindering good relationship with the investment clients.
Sending Resume of Investment to Head Office:
Branch manager will send the resume of investment with mentioning therein the
latest position of investment, security, and irregularities occurred (if any) and the
efforts made in the meantime for regularization of the investment as well as suggesting
future action.
 Issuance of Registered Notice: If persuasion does not bring any fruitful result
manager will issue a final registered demand notice impressing upon the client
concerned to repay within 15 days-time from the date of receipt of the letter with
acknowledgement due.

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 Legal Notice to be issued: If the client does not come forward to repay within
a reasonable period, legal notice is to be served through panel lawyer of the
bank with copy endorsed to head office. The reaction of legal notice is also to
be brought to the knowledge of head office with comments of the branch manager
for further instructions.
 Suit to be filed: If filing of suit is allowed by head office the same should
filed against the debtor/client concerned and the guarantor if any under civil
procedure code 9 for specific performance to be deemed as branch of
contract. In case the investment is not covered by collateral security suit is be
filed with attachment of assets before judgment.
 Disposal of Murabaha Stock: In case where the investment is secured by
promise of stock it should be mentioned in the registered notice that in case
the party fails to lift Murabaha goods on making repayment, the bank shall
dispose of the same by inviting open tender through national/local daily.
 Inviting Tender for Disposal of Stock: In spite of the above if the client does
not come forward to lift the goods, tender notice shall be published in one
daily or national daily newspaper on obtaining head office approval. The
goods shall be delivered to the height tender on obtaining head office
approval and money suit as the case may shall be filed for short fall (if any).
For minimizing the cost of advertisement, tender/sale notice of several
Clients shall be published through one tender/sale notice.
Criminal Suit for Recovery of Vehicle/Machineries:
In case of hire purchase investment, criminal suit under section 406/420 read with
section No.98or 100 CRPC for breach of contract as well as issuance of search
warrant for recovery of immovable or moveable that is transport or machineries shall
be filed in case the investment client fails to the installment as per schedule and also
do not surrender the assets. After taking possession of the assets, the same shall be
sold by inviting tender and money suit under section No.9 of the civil procedure
code for specific performance to be deemed as branch of contract if not backed by
mortgage of property or mortgage suit for realization of money by selling the
mortgaged property wherein mortgagor also can purchase the auctioned prop arty
under civil procedure code

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CivilPrison in Case Asset of Judgment Debtor:
It may be maintained that in case no assets is found for execution of decree civil
prison of the judgment debtor may be executed under order 21 rule 37 of civil code.
It may be mentioned that under this order and rule the judge can accord 6 month jail
to the judgment debtor and have to bear the cost of food of the prisoner at
government rate.
Limitation is for three years if debt is not backed by mortgage of property and twelve
years if backed by mortgaged property:
If the bank’s investment is not backed by any mortgage of immovable property it
becomes time barred after 3(three) years from the date of initiation. In case of
investment secured by mortgage of property the limitation for filling suit is 12 years
from the date of initiation.
Computation of limitation if debt is acknowledged in writing or by signing the
deposit pay-in-slip:
Provided further that before expiry of the above period if the investment client
acknowledge in writing signed by himself or by his duly authorized agent or any
payment made by respective borrower by deposit slip signed by him or his
authorized agent, a fresh period of limitation shall be computed from the time and
date when acknowledgement of debt is signed him authorized agent or part payment
of debt is made by him under his signature or his authorized agent.

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Chapter Four
Analysis of Investment
Performance

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4.1 Year Wise Investment & Growth Rate of Investment of AIBL
Here, last five year of investment of AIBL is given below
Year Amount of Investment
2013 125,715
2014 146,740
2015 162,503
2016 196,519
2017 235,905
Source: Annual report of AIBL
Table-5 : Year Wise Investment
4.2 Graphical Chart of last five year Investment of AIBL
Chart-3 : Year Wise Investment
Interpretation: The graph shows that the amount of investment increased over the
years. The amount was TK. 17,966 million in 2013 and TK. 20,491 million in 2017.
125,715
146,740
162,503
196,519
235,905
0
50,000
100,000
150,000
200,000
250,000
2013 2014 2015 2016 2017
Last Five Years Investment of AIBL

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4.3 Growth rate of investment is given below:
Year Growth Rate of
Investment
2013 12%
2014 17%
2015 11%
2016 21%
2017 20%
Table-6: Growth rate of investment
4.3.1 Graphical expression of growth rate of investment:
Chart-4: Growth rate of investment
4.4 Year wise Deposits and Growth Rate of Deposit of AIBL
Here, last years of deposits and growth rate of deposit of AIBL is given below:
Year Amount of Deposit
(TK in Millions)
2013 140,980
2014 166,851
2015 169,887
2016 199,703
2017 244,806
Source: Annual report of AIBL
Table-7: Deposits Rate
0%
5%
10%
15%
20%
25%
2013 2014 2015 2016 2017
Last Five Years Growth Rate of Investment

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4.4.1 Graphical Chart of last five years Deposits of AIBL
Chart-5: Deposits Rate
Interpretation: Above graph shows that the year wise deposit of AIBL has been
increasing. From the above chart, we can see that the highest amount was TK. 244806
million in 2017 and in 2013 the deposit was lowest Tk. 140980 million. This
increasing trend of deposit is mainly due to expansion of branches and better
customer services.
4.4.2 Growth rate of deposit is given below
Year Growth rate of
deposit
2013 12%
2014 18%
2015 2%
2016 18%
2017 23%
Table-8: Growth rate of deposit
140,980
166,851 169,887
199,703
244,806
0
50,000
100,000
150,000
200,000
250,000
300,000
2013 2014 2015 2016 2017
Last Five Year Deposits of AIBL

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4.4.3 Graphical expression of growth rate of deposit
Chart-6: Growth rate of deposit
4.5 Year Wise Investment to Deposits Ratio Analysis
Investment to Deposit ration measures the portion of deposit used for investment in
loan products. The more the ratio the more the bank is using its deposit as an
investment.
Investment to Deposit ratio: (Total investment/Total Deposit)*100
Year Total
Investment
Total
Deposit
Investment to
Deposit Ratio
2013 125,715 140,980 89%
2014 146,740 166,851 88%
2015 162,503 169,887 96%
2016 196,519 199,703 98%
2017 235,905 244,806 96%
Table-9: Investment to Deposit ratio
12%
18%
2%
18%
23%
0%
5%
10%
15%
20%
25%
2013 2014 2015 2016 2017
Last Five Years Growth Rate of Deposit

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4.5.1 Graphical Expression of Investment to Deposits Ratio Analysis:
Chart-7: Investment to Deposit ratio
Interpretation: The above figure shows that investment to deposit ratio of AIBL is
fluctuating over the years. So it can be said that AIBL was more efficient in
converting their deposits into investment in recent years.
4.6 Mode wise investment of AIBL in 2017
Here mode wise investment performance of AIBL in 2017 is given below:
SL
No
Mode Amount (in Million)
1 Bai-Murabaha 68,487
2 Bai-Muajjal 54,113
3 Mudaraba 87,943
4 Musharaka 11,789
5 Bai-Salam 13,573
6 Total 235,905
Table-10: Mode wise investment of AIBL
89%
88%
96%
98%
96%
82%
84%
86%
88%
90%
92%
94%
96%
98%
100%
2013 2014 2015 2016 2017
Investment to Deposit Ratio

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4.6.1 Here, Mode wise Investment of AIBL is shown by a Pie-chart:
Chart-8: Mode wise investment of AIBL
4.7 Trade of Mode wise Investment
4.7.1 Investment in Bai-Murabaha:
Yea
r
Total Investment
Under all Modes
Investment in Bai-
Murabaha
Investment in
Bai-Murabaha
as percentage
of total
investment
2015 162,503 44,865 28%
2016 196,519 51,907 26%
2017 235,905 68,487 29%
Table-11: Investment in Bai-Murabaha
87,943
68,587
54,113
11,789
13573
Mode wise Investment
Mudaraba
Bai-Murabaha
Bai-Majjal
Musharaka
Bai-Salam

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Chart-9: Investment in Bai-Murabaha
Interpretation: During the year 2015, AIBL invested in Bai-Murabaha mode 28%.
Subsequently in the following year in 2016, bank minimized investment in this mode.
But in the next year in 2017, bank increased investment in this mode 28%
4.7.2 Investment in Bai-Muajjal:
Year Total Investment
Under all Modes
Investment in
Bai-Muajjal
Investment in
Bai-Muajjal as
percentage of
total investment
2015 162,503 38,102 23%
2016 196,519 43,210 22%
2017 235,905 54,113 23%
Table-12: Investment in Bai-Muajjal
28%
26%
28%
25%
26%
26%
27%
27%
28%
28%
29%
2015 2016 2017
Investment in Bai-Murabaha Ratio

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Chart-10: Investment in Bai-Muajjal
Interpretation: The above graph shows the amount of investment in Bai-Muajjal.
From 2015 to 2017, the amount of investment was fluctuated. In 2015, it was tk
38,102 Million and in 2017 it was tk 54,113 Million.
During the year 2015, AIBL invested in Bai-Muajjal mode 23%. Subsequently in the
following year in 2016, bank minimized investment in this mode. But in the next year
in 2017, bank increased investment in this mode 23%.
4.7.3 Investment in Bai-Salam:
Under all Modes
Investment in
Bai-Salam
Investment in
Bai-Salam as
percentage of
total investment
2015 162,503 10,098 6.2%
2016 196,519 11,709 5.9%
2017 235,905 13,573 5.7%
Table-13: Investment in Bai-Salam
23%
22%
23%
22%
22%
23%
23%
24%
2015 2016 2017
Investment in Bai-Muajjal
Ratio

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Chart-11: Investment in Bai-Salam
Interpretation: The above graph shows the amount of investment in Bai-Salam.
From 2015 to 2017, the amount of investment was increased. In 2015, it was tk
10,098 Million and in 2017 it was Taka 13,573 Million.
During the year 2015, AIBL invested in Bai-Salam mode 6.20%. But in the next year
in 2017, bank decreased investment in this mode 5.70%.
4.7.4 Investment in Mudaraba:
Under all Modes
Investment in
Mudaraba
Investment in
Mudaraba as
percentage of
total investment
2015 162,503 51,230 32%
2016 196,519 65,809 33%
2017 235,905 87,943 37%
Table-14: Investment in Mudaraba
6.20%
5.90%
5.70%
5.40%
5.50%
5.60%
5.70%
5.80%
5.90%
6.00%
6.10%
6.20%
6.30%
2015 2016 2017
Investment in Bai-Salam Ratio

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Chart-12: Investment in Mudaraba
Interpretation: The above graph shows the amount of investment in Mudaraba. From
2015 to 2017, the amount of investment was increased. In 2015, it was taka 51,230
Million and in 2017 it was taka 87,943 Million.
During the year 2015, AIBL invested in Mudaraba mode 32%. In the next year in
2017, bank increased investment in this mode 37%.
4.7.5 Investment in Musharaka:
Under all Modes
Investment in
Musharaka
Investment in
Musharaka as
percentage of
total investment
2015 162,503 8,701 5%
2016 196,519 10,980 5%
2017 235,905 11,789 4%
Table-15: Investment in Musharaka
32%
33%
37%
29%
30%
31%
32%
33%
34%
35%
36%
37%
38%
2015 2016 2017
Investment in Mudaraba Ratio

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Chart-13: Investment in Musharaka
Interpretation: The above graph shows the amount of investment in Musahraka.
From 2015 to 2017, the amount of investment was fluctuated. In 2015, it was taka
8,701 Million and in 2017 it was taka 11,789 Million.
During the year 2015, AIBL invested in Musharaka mode 5%. In the next year in
2017, bank decreased investment in this mode 4%.
4.8 Findings
AIBL is one of the most popular Islami bank in Bangladesh, who focused on modern
Islamic banking system. AIBL always want make sure about its position in the
industry by mobilizing its deposit and making quality investment. During my
internship I got some findings about the bank which are given below:-
 AIBL lack quality human resources in investment department, as a result their
disbursement process takes time.
 AIBL lacks different modes of investment at all the branch because not all the
branches are allowed to give investment under Mudaraba and Musharaka
mode.
 Among different modes AIBL heavily preferred Bai-Muajjal mode of
investment, about 23% of their total investment are made under this mode in
2017.
 AIBL investment recovery rate fluctuated over the year.
5% 5%
4%
0%
1%
2%
3%
4%
5%
6%
2015 2016 2017
Investment in Musharaka
Ratio

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 In 2016 AIBL lacks Quard, Bai-Salam, Musharaka mode of investment
compare to IBBL which shows weakness in AIBL investment strategies &
policy.
 AIBL lacks investment all the 8 divisions of Bangladesh and among the
divisions AIBL only preferred Dhaka 78% of their total investment are made
in Dhaka. While other Islami banks such as IBBL spread their investment in
all over Bangladesh.
 AIBL investment income is increasing over the year but compare to IBBL
which is not significant.
 AIBL didn’t encourage women entrepreneur for investment.
 AIBL investment policy is not effective in the entire sector and AIBL didn’t
implement its investment policy while investing in different sectors.

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Chapter Five:
Conclusions
&
Recommendations

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5.1 Conclusion
 Banking industry in Bangladesh is highly competitive; everybody wants to
increase their market share by providing various services to the customers.
As a result banks need to develop an effective business strategy as well as
policy in order to make their position higher in the industry. AIBL is no
different of that. The management of AIBL always tries to maintain a
steady growth by delivering their banking services across the country. As
part of a Corporate Social Responsibility, it is playing a remarkable role to
help the distressed people of the society in different welfare relative
activities.
 This report analyzes the mode wise investment of AIBL at Mirpur branch.
This report also analyzes the effectiveness of investment policy of AIBL
and found that AIBL investment policy is not effective in many sector.
The bank lack investment in all over Bangladesh. Classified investment of
the bank increases over the year. So in order to be successful bank
management should take care of this problem as well as it should make
attractive investment scheme for the customers.
 They focus on delighted, prompt and personalized services being rendered
to their customers. They believe in developing strong interpersonal
relationship with each other. They are really happy that they are given
enough emphasis to empower poor families to create income opportunity
by providing financial support to make them self-reliant. They consider
their services no less important towards improvement of the flat of
deserving people in the society.
5.2 Recommendations
Islamic banking in Bangladesh is getting popular day by day and customers want
diversified product and services from the bank. In order to be successful in the
banking industry AIBL should follow the trends. Based on my findings here are
some recommendations that are given below:

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 AIBL should hired quality human resource in the investment department.
 AIBL should introduce Mudaraba and Musharaka mode of investment at
all the branches. It should focus all the mode of investment not just Bai-
Muajjal. Because customer wants diversified products .AIBL should
follow current trend in order to be successful in the banking industry.
 AIBL recovery unit should be more active because their classified
investment increases over the year. AIBL investment strategies and policy
need to be modify as well in order made their investment attractive to the
customer.
 AIBL need to improve its infrastructure quality as well as internal
networking system in order to provide quality service to the customer.
 AIBL need to modify its accounting opening from so that customer feel
easy to fulfill the form

62 | P a g e
References
Annual report of Al-Arahaf Islami Bank Ltd. 2013, 2014, 2015, 2016, 2017
Web Site of Al-Arahaf Islami Bank Ltd. www.al-arafahbank.com
Web Site of Bangladesh Bank www.bangladesh-bank.org

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