Page 1

Study on Account Opening and Closing Procedure of Al-Arafah Islami Bank Limited

Introduction 1.3. Significance of the Study: Bank is the symbol of financial stability of a country. It is an institute which is responsible for safeguarding the financial stability of any country. In modern age the role of banks is very wide as well as comprehensive. Any kinds of business small or big, inside or outside the country directly or indirectly involved with the bank. Especially in foreign trade and foreign exchange operations are quite impossible to imagine without the help of bank. Bank is main media of foreign business. Now a day AIBL is one of the leading private commercial bank of Bangladesh and it plays comprehensive role to develop business activities as well as the economic development of the country. 1.4. Objectives of the Study: Objectives are two types: 1. General Objectives 2. Specific Objectives 1.4.1. General Objectives: To fulfills the requirements to the BBA program. 1.4.2. Specific Objectives: The prime objectives of the study are to know the overall activities and comparative operational performance of AIBL, Dhanmondi Branch though different aspects of the banking sector and its effectiveness in this regard. The specific objectives of the study are given below: •

To gather comprehensive knowledge on accounts opening procedures of AIBL.

To gather comprehensive knowledge on accounts closing procedures of AIBL.

To get an overall idea of banking from bank’s point of view.

To suggest some policy measure for improving of Dhanmondi Branch

To provide some suggestions and recommendations on the basic of findings of the study.

1.5 Scope of the study: The scope of the organization part covers the organizational structure, background and objectives, functional, department and business performance of AIBL as a whole and the main pare covers operational scenario of AIBL. In my internship program in hear; try to learn the function of all departments. During the Internship, every employees of AIBL tries to make me understand very nicely and I think that now I may be able to handle to manage a department’s activities of an Islamic Bank in our country. 1.6 Methodology of the study: Methodology includes direct observation, face to face discussion with employees of different department, study of files, circulars and practical work. However, this report is basically qualitative in nature. In all the cases depending of the requirements both primary & secondary data have been collected from different sources. 1.6.1 Sources of information: Have collected data from the two unique sources; one is primary sources and another is secondary sources. o


Primary sources of data: •

Face to face interview with the bank officers and stuffs of the branch.

Face to face conversation with clients visited the branch.

Discussing with my supervisor and manager.

Practical work experience in the different desk of the department of the branch.

In-depth study of selected cases.

Secondary sources of data: •

Annual Report of the AIBL.

Different voucher of the AIBL.

Website of the AIBL.

Several books and periodicals related to the banking sector.

Varies documentary file of AIBL.

Prior research report.

1.8 Rationale of the study:

Banking is one the major sources of any economy. It plays a vital and crucial role to enrich the economy of any country. In Bangladesh, it has a large contribution to strengthen the economy of the country. With this study I’ve enlarged my knowledge especially in financial sectors. I’ve gathered many information regarding the bank’s General banking operation and others as well. So it is very rational to study on banking sector and recommend for sound operation of the bank. Hope this study and recommendation will be helpful for playing effective role for the economic development of our country. 1.7 Limitations of the study: Although have enjoyed full co-operation from employees of JBL and they also gave me much time to prepare this report properly in the way of my study, have faced some difficulties, which can be termed as limitations. They are as follows:•

I have worked only on general banking sector but sometime worked investment & foreign exchange sector in this bank. I have gathered enough knowledge on this sector, where I could not attend. So could not acquire satisfactory knowledge on banking sector.

Within such a short period of time, it was not possible for me to study everything about AlArafah Islami Bank, Dhanmondi Branch.

The employees of AIBL remains so much busy with their own work that it is quit tough to provide time for making the concept clear in a particular area.

Time constraints impede me to make in depth study.

In many case, up to date information was not published.

Relevant paper and documents were not available sufficiently which can my writing this paper.

I had to base on secondary data for preparing this report.

Websites are not so updated.

Organizational Overview 2.1 Historical background of AIBL: Islamic ideology encourages us to succeed in life here& hereafter. To achieve this success we must follow the way dictated by the HOLY QURAN and the path shown by Rasul (SM). With this goal in view AL Arafah Islami Bank Ltd was established (registered) as a public limited company on 18 June 1995. The inaugural ceremony took place on 27 September 1995. The authorized capital of the Bank is TK.2500.00 million and the paid up capital TK.1153 million. Some very renowned Islamic personalities and pious businessmen of the country are the sponsors of the bank. The total paid up

capital was invested locally. The Bank is committed to contribute significantly in the national economy. It has made a positive contribution towards the towards the socio economic development of the country by opening 46 branches on which 16 authorized dealer (AD) throughout the country. The equity of the bank stood at TK.2037 million Crore as on 31 December 2007, the manpower are 1033 and number of shareholders are 12013. The Bank conducts its business on the principles of Musaraka, Bai-muazzal, and hire purchase transactions approved by Bangladesh Bank. Naturally, its modes and operations are substantially different from those of other conventional commercial Bank. There is a Shariah council in the Banks who maintains constant vigilance to ensure that the activates of the bank are being conducted on the precepts of Islam. The Shariah council consists of prominent Ulema, reputed, Bankers, renowned lawyers and eminent Economist. The year 2010 is the 15 th year of operation since Bank’s inception in 1995. To achieve the desired goal, it has intention to pursuit of excellence at all stages with a climate of continuous improvement. During the year 2010 the bank participated in CSR activities by financial assistance in different areas like education, training, healthcare, sports, natural disaster etc. 2.2 Vision of AIBL: To be a pioneer in Islami Banking in Bangladesh and contribute significantly to the growth of the national economy. 2.3 Mission of AIBL: •

Achieving the satisfaction of Almighty Allah both here & hereafter.

Proliferation of Shariah Based Banking Practices.

Quality financial services adopting the latest technology.

Fast and efficient customer service, balanced growth.

Steady & competitive return on shareholders' equity.

Innovative banking at a competitive price.

Extending competitive compensation packages to the employees.

Firm commitment to the growth of national economy.

Involving more in Micro and SME financing.

2.4 Special features of AIBL: As an Islami bank, we are singular in every positive aspect. We provide a bunch of state-of-art banking services within the wide bracket of shariah. We are unique with our products, strict with our principle and uncompromising with our honesty. Some of our special features that make us notable in Islami banking sector are as follows:


All activities of AIBL are conducted under an 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.


We regularly pay dividend to our valued shareholders. For the year of 2008, we declared 30% 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 believes in social and philanthropic activities and has established AIBL English Medium Madrasha and AIBL Library. More endeavors will inshallah follow in future.

2.5 Commitments of AIBL: •

Ours is a customer focused modern Islamic Banking making sound and Steady growth in both mobilizing deposit and making quality Investment. To keep our position as a leading Islami Bank in Bangladesh.

To deliver financial services with the touch of our heart to retail, small and medium scale enterprises, as well as corporate clients through our branches across the country.

Our business initiatives are designed to match the changing trade & industrial needs of the clients

2.6 Organization Structure of AIBL: Designations are in ascending order:

Top Management

Executive Level Management

Mid Level Management

Chairman Vic Chairman Board of Directors Executive Committee Managing Director Additional Managing Director Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President Senior Assistant Vice President First Assistant Vice President Assistant Vice President Senior Principal Officer

Principal Officer

Junior Level Management

Senior Officer Probationary Officer Junior Officer Assistant Officer

Top-level Management: Typically consist of board of directors, president, vice-president, chief executive officers, etc. These individuals are mainly responsible for controlling and overseeing all the departments in the organization. They develop goals, strategic plans, and policies for the company, as well as make many decisions on the direction of the business. Executive-level Management: These personnel typically consist of general managers, branch managers, and department managers. These individuals are mainly responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. Some of their functions are as follows: •

Defining and monitoring group-level performance indicators.

Diagnosing and resolving problems within and among work groups.

Designing and implementing reward systems that support cooperative behavior.

Middle-level Management: Typically consist of supervisors, section officers, foreman, etc. These individuals focus more on the controlling and direction of management functions. For instance, they assign tasks and jobs to employees, guide and supervise employees on day-to-day activities, look after the quantity and quality of the production of the company, make recommendations, suggestions, and communicate employee problems to the higher level above, etc. •

Basic supervision.


Performance feedback.

Registered Name

:Al-Arafah Islami Bank Limited

Date of Registration

:18 June 1995

1st Branch

:Motijheel Branch, Dhaka

2.7 Corporate information of AIBL:

Opening Ceremony

: 27 September, 1995

Head office

: Peoples Insurance Building 36, Dilkusha Commercial Area (6th - 9th Floor), Dhaka-1000 Tel: PABX: 9567885, 9567819 9569353, 9568007 9560198, 7123255-7 Fax: 880-2-9569351

• •

Official Logo Chairman

: :Badiur Rahman

Managing Director

:Ekramul Hoque

Company Secretary

: Md. Mofazzal Hossain

Number of Branches


Number of Employees

Authorized Capital

Paid-up Capital

Local Partnership of Capital

: 100%


: 9,647.45 Million

2.8 Performance at a Glance of AIBL:

1,711 : 5,000.00 Million :4,677.28 Million


: 53,582.96 Million

Number of Shareholders


Services provided


: Deposit Scheme, Credit Facility and Foreign Exchange Services :Member of SWIFT, online Banking , Ababil based Computer system : ALARBDDH



Website :


 Technology used

[NB: Information as per last Annual Report 2010] AIBL is one of the new entrants of the 3 rd generation banks having only 78 branches currently. At the Particulars













854.20 536.00

1,153.18 653.00

1,383.81 905.33

1,798.95 1,223.18

4,677.28 1,746.42

160.00 42.78



















Fixed Assets Total Assets Total Income Total Expenditure Import Export Total Capital Dividend per Share Number of Branches Number of Employees

215.10 21,368.16 2172.48 1202.71 18,821.40 9,142.70 1,830.65

334.48 30,182.32 2955.61 2199.43 27,042.72 12,714.91 2,245.13

396.76 37,177.22 4393.15 2859.16 32,685.13 20,176.64 3,049.34

466.30 48,515.79 5305.64 3575.81 34,074.80 23,546.10 4,065.96

655.39 74,005.01 7522.25 4462.30 55,934.10 32,042.40 10,512.81

40.55 52.54 96.42 89.20 64.15 36.08 158.56






















Authorized Capital Paid up Capital Reserve Funds Shareholders' Equity

Number of Shareholders


38.11 48.29

32.02 333.90

end of current year, the number of depositors stood at taka 52,973.97 million. At the end of total numbers investors are taka 53,582.96million.The bank has earned Tk. 7522.25million and incurred an expense of Tk.4462.30 million in the current year. At the end of the year the profit before tax has stood Tk. 2,689.15million. Financial Statements and Graphs

Last Five Years Position at a Glance (Data Source: AIBL Annual report-2010) (Figure in Million) 2.9 Branches of AIBL: The Bank has 78 branches of the six divisions in the county. Al-Arafah Islami Bank Limited (AIBL) to contribute in our economic development and they properly service the people of the country. All the branches are equipped with computers in addition to modern facilities, logistics and professionally competent manpower. The following Division number of Branches& Location map of Al-Arafah Islami Bank Limited (AIBL) such as: Divison Dhaka Chittagong Rajshahi

Number of branch 39 16 6

Divison Khulna Barishal Sylhet

Number of branch 6 4 7

Figure: Branch Map About The Branch 2.10 About Dhanmondi branch: •

Year of Establishment: 1999, 15th December.

Name of the Manager: 1st Md.Tariqul Amin 2nd Motahar Uddin Ahmed

Number of Employees: 23

Address of the Branch: Ahmed Tower ( Sat Masjid Road ) House#54/1, Road#4/A Dhanmondi, Dhaka1209 Tel: 8610913, 8652930 Fax: 9613444.

2.11 Environment of the branch:

The environment of the branch is very much standard and comfortable with air cooler system. The interior decoration inside the branch is very much attractive and organized. Manager has a special room with well furnished. 2.12 Different Departments of the branch:


General Banking

Foreign Exchange


Cash Import


Account Bai Muajjal

Bai Murabaha


Remittance 2.13 Behavior of the employee: The behavior of the employee is very much co-operative. They are very much helpful with their customers and clients. Customer service is the most priority to the employees. If any problem is occurred in any operation of the bank or with the customer, then the manager take initiatives to solve the problem. The manager is very much active in the branch. All time he maintains strict observation throughout the branch. 2.14 Present Management Hierarchy of the branch:

Assistant Vice President& Manager Senior Principle Officer & 2nd Manager Principle Officer Senior Executive Officer

Management Trainee Officer Executive Officer Officer 2.15 Classification of bank products:


Miscellaneous Deposits


Time demand

Fund oriented

International banking L/C, Foreign currency

Consultancy Tax, consultancy, Marcent banking project, Counseling, Investment counseling

Self-custody, Sale of drafts, standing instruction, Trusteeship.etc.

Non-fund oriented

Guarantees Terms loans, Letter of credit. Clean loans, Bills discounting, Pre shipment, Post shipment, Lines of Figure: - Structure of Bank Product credit- Secured, 2.16 Services of Al-Arafah Islami Bank Ltd: unsecured, The importance of mobilizations of savings for the economic development Overdraft. of our country can hardly be over emphasized. We considered savings and deposits as lifeblood of the bank. More the deposit, greater is the strength of the bank. The bank intends to launch various new savings scheme with prospect of higher return duly supported by a well-orchestrated system of customer services. The bank would cater to the credit needs of individuals as well as corporate clients. Initial it will emphasize on trade finance, which would be short term and self-liquidating in nature. Considering the importance of foreign trade in our national life, financing and handling of export & import business and also handling of foreign remittance business would be given top most priority. Moreover the bank operate all of its activities

under the rules and regulations of Islamic Shariah.The services provided by the Al-Arafah Islami Bank Ltd. is given bellow: -

Bank services

General banking


Different accounts open, issues of DD. TT. PO, Clearing, FD, Different Scheme etc.

SOD General Loan, House building loan, Lease finance, Hire purchase, CC hypo, Staff loan, CCS etc.

Foreign exchange Export Import Remittance

Figure: various services provided by Al-Arafah Islami Bank 2.17 Total scenario of the branch: (Source of data collection date-19-07-11) Particulars


Total Deposit


General Deposit


No. Deposit of Accounts


Bills Payable


Total Investment


No. of Investment Accounts


Cash in Hand


Bank Guarantee


L/C Liabilities


Total Export


Total Import






Net Profit


Foreign Remittance


Classified Investment


Profit Receivable on investment


3.1 Introduction: Now going to discuss the work that was performed. 3.2 INTENSHIP POSITION: •

I have worked as an Internship in Al-Arafah Islami Bank LTD, Dhanmondi branch from 2nd May to 31st July.

3.3 DUTIES: •

For three months

May 2 to Jun 3 SL NO

Duty Schedule


Introducing with the employees of AIBL


Dhanmondi branch. Accounts opening procedure-

Time Period 1 day

 What types of account  How to open an account  How to manage an account

3 week

 Different change to account 03

Collect information about AIBL product and


services. How to closed an account

Jun 2 to July 3

3 day 5 day


Duty Schedule

Time Period

Cheek requisition from customer and give


cheek to customer. Cheek book receipt from the main branch and


this book are entry the cheek book register

1 week

1 week

book. 03

Write Voucher Cover

2 days

How to prepare a pay order, collecting and


delivered pay order. General Banking Section



1 week 1 week


July 2 to August 3


Duty Schedule

Time Period


Clearing section

1 week


Providing customer services

1 week


Investment Department

1 week


Foreign Exchange Department

1 week

4.1 Account opening: Account of a person with the bank builds relationship between the Bank and Customers. By opening an account both creates a contractual relationship. However, Selection of a customer for opening an account is very crucial for a Bank. Al-Arafah Islami Bank Limited is very severe and fair in choosing its customers and follows the criteria set by Bangladesh. 4.2 Different types of AIBL Account: Sl. No. 01 02

Deposits Al-wadiah current Deposit (CD). Mudaraba Savings Deposit (MSD).

03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Monthly Installment Based Term Deposit (ITD). Mudaraba Lakhpoti Deposit Scheme (LDS). Mudaraba Kotipoti Deposit Scheme (MKDS). Mudaraba Millionaire Deposit Scheme (MDS). Monthly Profit Based Deposit (PTD). Monthly Installment Based Hajj Deposit (MHD). One Time Hajj Deposit (THD). Marriage &Investment Deposit (MIS). Al-Arafah Savings Bond (ASB). Foreign Currency Deposit (FCD). Pension Deposit Scheme (PDS). Cash Waqfa Deposit Scheme (CWS) Mudaraba Short Notice Deposit (SND). Mudaraba Term Deposit (MTD). Mudaraba Double Deposit Scheme (DDS)

4.3 Account Opening procedure in a flow chart:

Applicant fills up the relevant application form

Account Opening Account is ready to make transactions

Issuance of Cheque Book

4.4 The contents of the application form: i)

Name of the Account


Name of the applicant


Father’s Name


Mother’s Name


Present Address/ Permanent Address





The Specimen Signature Card is filled up by the Applicant

Introducer information and Signature

The authorized officer scrutinizes the introduction and verifies the signature and relevant documents.

Issuance of deposit slip and initial deposit is made.


Contact Info


Special instruction for operation of the account


Nominee’s information

xii) Specimen Signature


Introducer information

xiii) Initial amount of deposit

4.5 Know your customers (KYC) and its application & utility: Know Your Customers (KYC) form is used by the Bank to know the nature of the customers and classified the customers according to their transactions profile and risk level. KYC form is filled by the Bank. In this form the customers has different risk score respective their business or occupation which is set up by the Central Bank of Bangladesh. The details of the business and sources of fund are also mentioned in this form. KYC form makes sure that the customer has submitted proper and valid Identification Documents. And the number probable transaction (deposit & withdrawal) through cash, cheque or On-line and Inward –outward Remittance are also documented in this part of the Application Form. KYC is the instrument used for detecting a money launderer. 4.6 Categorization of Account Holders of AIBL: As per the Bank’s existing policies Branches may open accounts of the following categories of depositors which are mentioned here: •

Individual Account

Joint Account

Proprietary Account

Partnership Firms Account

Privet Limited Companies Account

Public Limited Companies Account

Joint Venture

Clubs/Association/ Societies Account

Trust Account


Non-Government Organizations(NGOs)

Minor Account

4.7 Discuss about various type of Accounts: 4.7.1 Al-wadiah current Deposit (CD): Features of Al-Wadiah Current Deposit: One of the most significant sources of deposits is the Al-wadiah current Deposit (CD). It has some similarity with the current account of other conventional bank. It refers deposit of money allowing

somebody to sue it. Al-Wadiah Current Deposit is accepted on Al-Wadiah principles which mean al Amanah with demission to use. According to this principle AIBL can use the fund of the account along with other funds as per Shariah at bank own risk. Profit ratio: Al-Wadiah Current Deposit Profit ratio is 0%. Minimum Balance: Al-Wadiah Current Deposit A/C is opened on proper introduction with minimum initial deposit fixed by the bank .Minimum balance to be maintained in Al-Wadiah Current Deposit tk 2000. Rules & Regulation The following restriction Al-wadiah current Deposit: •

A Current Deposit Account may be opened by individual, firm, company and club, association, body corporate etc.

Funds in the Current Deposit Account is payable on demand.

No interest is payable on balances of Current Deposit Accounts.

Minimum balance to be maintained in the account is Tk.1,000/-

Customer willing to open Current Deposit Account shall fill up the Account Opening Form (AOF) applicable to him/ her and Specimen Signature Card (SS Card). The customer will sign in the space provided under “Yours faithfully” and on the specimen signature cards.

Bank at its discretion may close any account with prior notice to the account holder.

The introducer must be account holder of CD of Al-Arafah Islami Bank Bangladesh Ltd.

The introducer must be attested photograph.

4.7.2 Mudaraba Savings Deposit (MSD): Features Mudaraba Savings of Deposit Mudaraba Savings Deposit is the deposit of one party and on the basis of operation by another party this deposit is taken.Usually, this type of account is opened by the middle or lower class people who wish to save a pert of their incomes to meet the future needs. It encourages the non trading person’s to deposit a small amount of money. Profit ratio: Mudaraba Savings Deposit Profit ratio is 4%. Minimum Balance: Mudaraba Savings Deposit A/C is opened on proper introduction with minimum initial deposit tk 600 fixed by the bank .Minimum balance to be maintained in Mudaraba Savings Deposit tk 100 only Rules & Regulation: The following restriction mudaraba savings deposit: •

Savings Bank Account may be opened in the name of adult individual who are mentally sound and also jointly in the names of two or more persons payable to either or both or all of them or to the survivor or survivors.

Savings Bank Account may be opened in the name of a minor also.

Saving Bank Account may be opened in the names of clubs, societies, association and similar institutions and even by government and semi-government offices.

Interest at the rates fixed by Head Office from time to time is applied half-yearly on the balances held on daily product basis.

4.7.3 Monthly Profit Based Term Deposit Scheme (MPTD): •

An exciting scheme to get monthly profit based on term deposit.

An effective saving plan for individual/company and non-resident Bangladeshis to invest.

Any amount of Tk. 1 (one) lac or its multiple may be deposited in this scheme.

If necessary, the deposit may be cashed before maturity at a profit rate on Mudaraba Savings Deposit.

The scheme will have a minimum duration of 5 years.

There will be Tk.937.50 estimated profit for each Tk.1,00,000/- of deposit.

Tax will be applicable on the deposited amount along with profit according to the country law.

4.7.4 Monthly Installment Based Term Deposit (ITD): It is a type of deposit scheme that is also available in the conventional. But the basic difference with the Islami bank is that, total deposited money which is the clients is not fixed. It depends on whether the bank earns profit or loss from that money. The following Restriction Monthly Installment Based Term Deposit (ITD): •

Installments can be deposited in any working day of the month. Even advance installment may be deposited.

Profit will be calculated on daily basis upon your deposit.

To make it more attractive deposited amount will be weighted 1.05, which is 0.05 percent higher than 3 years term deposit.

Duration of the deposit will be 5, 8, 10 or 12 years along with installment amount of either Tk. 200/-, 300/-, 500/-, 1000/-, 1500/- , 2000/-, 3000/-, 4000/- and 5000/-

Any person above 18 can open this magnificent scheme. Even an ITD can be opened on behalf of a minor!

This worthwhile scheme will make your deposit to grow in the following ratio:


5 years

8 years

10 years


Gross return (Deposit + Profit) at maturity (Projected)

12 years














































4.7.5 Mudaraba Lakhpoti Deposit Scheme (LDS): •

One can select the maturity period from 3, 5, 8, 10 or 12 years.

This eye catching scheme is lucrative because it will accumulate profit on your deposit in a daily-stay basis with a weight age 0.05 more than that of a 2 years deposit.

A single person can open more than one account in the same branch.

Tax will be applicable on the deposited amount along with profit according to the country law.

Monthly installment can be deposited on any working day from any branch.


Monthly Deposit

Estimated return after maturity

3 years



5 years



8 years



10 years



12 years



4.7.6 Mudaraba Pension Deposit Scheme (MPDS): •

An unparallel scheme to make your small savings turn into a line of income in future.

You can decide the size of monthly deposit from Tk.500/-, Tk.1,000/- Tk.2,000/- Tk.3,000/Tk.4,000/- Tk.5,000/- Tk.6,000/- Tk.7,000/- Tk.8,000/- Tk.9,000/- Tk.10,000/- .

Besides choosing favorable installment size, you also can select any maturity period from either 5, 10 or 15 years.

Your deposited amount will earn profit on daily-stay basis. This particular scheme has profit with the weight age of 1.05, which is 0.05 more than that of a 3 years deposit.

Tax will be applicable on the deposited amount along with profit according to the country law.

4.7.7 Mudaraba Kotipoti Deposit Scheme (MKDS):

With the help of Kotipoti scheme, your savings will rise to a mammoth amount of 10 million taka.

Any person above 18 can open this magnificent scheme. Even an MKDS can be opened on behalf of a minor!

The main attraction of this Mudaraba-based scheme is that, profit will be accumulated on your deposit in a daily-stay basis. In this scheme, profit will be given with a weight age of 1.05, which is 0.05 more than that of a 3 years deposit.

Monthly installment can be deposited on any working day from any branch. Advance deposit is also possible.

Tax will be applicable on the deposited amount along with profit according to the country law.

This scheme comes with an exciting investment facility. One can take advantage of 80% of his/her deposit as investment.

Period of Deposit

Monthly Installment

Expected return after maturity period

3 Years


1 Crore

4 Years


1 Crore

5 Years


1 Crore

6 Years


1 Crore

7 Years


1 Crore

10 Years


1 Crore

12 Years


1 Crore

15 Years


1 Crore

18 Years


1 Crore

20 Years


1 Crore

4.7.8 Mudaraba Millionaire Deposit Scheme (MDS): •

With this excellent scheme your deposit will increase to million taka!

The size of monthly installment may be 23,950/- 16,950/- 12,750/- 9,950/- 8,000/- 4,600/3,345/- 2,170/- 1,150/- taka.

The main attraction of this Mudaraba-based scheme is that, profit will be accumulated on your deposit in a daily-stay basis. To make it a more important scheme it will have a weight age of 1.05, which is 0.05 more than that of a 3 years deposit.

Monthly installment can be deposited on any working day from any branch. Advance deposit is also possible.

This scheme comes with exciting investment facility. One can take advantage of 80% of his/her deposit as investment facility.

Tax will be applicable on the deposited amount along with profit according to the country law.


Monthly Deposit

Estimated return after maturity period

3 Years


10 Lacs (1 Million)

4 Years


10 Lacs

5 Years


10 Lacs

6 Years


10 Lacs

7 Years


10 Lacs

10 Years


10 Lacs

12 Years


10 Lacs

15 Years


10 Lacs

20 Years


10 Lacs

4.7.9 Mudaraba Double Deposit Scheme (DDS): •

A fabulous fixed deposit scheme operated strictly by the rules of Islamic Shariah.

Any person above 18 can open this magnificent scheme. Even an MDBDS can be opened on behalf of a minor!

Any person can open this scheme in his/her own/joint name, any business organization, educational institution, govt. or non govt. organization, NGO, semi govt. or cooperative organizations can open account and deposit their savings in this scheme to get higher profit.

In this Mudaraba based scheme one can deposit Tk.10, 000/- or it’s multiple.

Under this scheme with life of 6 years, your deposit will earn profit in an incremental ratio. That's why within just 6 years of time your deposit will be doubled in return.

Tax will be applicable on the deposited amount along with profit according to the country law.

This convenient scheme comes with an exciting investment facility. One can take advantage of 80% of his/her deposit as investment loan.

4.7.10 Mudaraba Term Deposit Receipt (MTDR/FDR): •

Fixed Deposit is neither transferable nor negotiable.

Fixed Deposit Account may be opened by individuals, firms, companies, corporate body etc.

Fixed Deposit average 1, 3,6,12 month interest rate 12% of profit.

Rate of interest payable to Fixed Deposit Accounts shall be approved/ advised by Head Office from time to time.

FDR may be encased before maturity on written request of the depositor. For payment of interest, branch shall follow Head Office instruction in this regard from time to time.

Extra care shall be taken in case duplicate FDR is proposed for lien to any bank.

The signature of the depositor is to be admitted by authorized officer both in AOF and S.S. Card.The AOF will be retained in file and the S.S. Card shall be kept in S.S. Card Box under custody of the concerned authorized officer.

4.7.11 Marriage &Investment Deposit (MIS): •

This exciting scheme is for those who want to take steps well in ahead of accomplishing the event of marriage in future.

Any matured person of any profession with sound mental health can open an account in this scheme. Even account can be opened in the name of a minor with the guidance of proper guardian.

You can select any installment size from Tk.250/-, Tk.500/- or Tk.1,000/- and make your scheme more desirable.

The main attraction of the scheme is that, profit will be accumulated on your deposit in a daily-stay basis with a weightage of 0.98 rate.

This fabulous scheme comes with exciting investment facility. One can take advantage of Tk.30, 000/- or double of his/her deposit (whichever is less) as investment.

Tax will be applicable on the deposited amount along with profit according to the country law. Period

Monthly Installment

3 Years

5 Years

8 Years

Total deposit along with profit after maturity (Estimated).













4.8 Profits (%) of Different Deposits:

Type of Deposits

Profit (%)

Mudaraba Saving Deposit (MSD)


Al-wadiah current Deposit (CD).


And others account are same


4.9 Documents Required For Opening An Accounts:  General requirement for all Accounts: o

Advice of New Account (in duplicate).


02 (two) copies passport sized photographs of Account holder and one copy nominee’s photograph/Attested.


Signature’s of account holder’s, introducer, etc.admitted/verified.


National Id/ Voter Id/ Valid Passport of both Account holder and Nominee’s


Transaction Profile (Not applicable for Special Scheme and Fixed Deposit).


Know Your Customer (KYC) Profile.


Deposit Slip.


Cheque Book requisition slip (for MSD, CD only).

 Proprietorship Account (additional requirement): •

Copy of Trade License.

Proprietorship Rubber Stamp against all signatures of the proprietor.

Specimen Signature Card.

TIN certificate.

 Partnership Firms Account (additional requirement): •

Copy of Partnership Deed.

List of partners with their addresses.

Specimen Signature Card.

Copy of Trade License.

Partnership Rubber Stamp against all signatures of partners operating the accounts.

Partnership letter

TIN certificate.

 Limited Company (additional requirement) •

Copy of Trade License.

Specimen Signature Card.

Two copies Photographs and identification document of

1. All of the directors will be responsible for the operation of the account 2. All the authorized signature for the account 3. All holder of power of attorney to operate the account 4. The beneficial owner of the account True copy of the memorandum and Articles of the Company duly certified by Registrar of Joint Stock Company (RJSC).

Certified true copy of the incorporation of the Company.

Certified true copy of the Board of Directors of the company for opening bank account which should be consistent with the Articles of Association.

Certificate of Commencement of business of the RJSC.

List of Directors with address along with form 10-12.

TIN certificate.

VAT certificate.

 Clubs/Association/ Societies/ Charitable institution/ Trust/ Account (Additional requirement): •

Certified true copy of the Constitution/By-laws/Trust/Deed/Memorandum and Articles Association.

Specimen Signature Card.

Certificate of the Registration of the Association/Club/Charity/Trust/Society (certified photocopy to be retained by Bank and original to be returned after authentication).











Association/Club/Charity/Trust/Society with their address. •

List of Directors with address.

Certified true copy of resolution of the Governing Body/Executive Committee of the Association/Club/Charity/Trust/ which should be consistent with the Articles of Association.

4.10 Maintenance of Account Opening Forms (AOF): After completing all the formalities and verification of the documents of an account. While AIBL open an account it maintains a serial number of the account and AOF are filed in respective file. The AOF are classified according to the type of account and the serial number is written on the cover of the file. A proper maintenance of the Account Opening Forms helps the authorized officer to sort out or find the AOF in a legitimate of time. 4.11 Maintenance of specimen signature cards: When Specimen Signature Cards are scanned it should be maintain and stored in a proper way, so that the Bank should find it for the future use in case of emergency. After scanning the Specimen Signature Card are bundled according to their serial number and stored in the file.

4.12 Balance Inquiries: The account holder may enquire about his/her balance in the account. The client may be advised to fill and sign the Balance Requisition Slip (BRS) or to produce the Letter of Authority (LOA) duly signed by the account holder. Such as balance inquiries process:•

By using Ababil Software Go to balance inquiries  Account number  Ok

4.13 Letter of thanks AIBL: Sends a thanks letter to its clients every year for maintaining the account and transactions with the bank throughout the year. This kind of letter helps to keep the bankcustomer relationship warm 4.14 Cheque book for new account When all the formalities of the Account opening is furnished including the initial deposit then the issues a Cheque on upon the request of the Account Holder. The account holder fills up a cheque book requisition slip and signed it mentioning the number of leaf requested. After that authorized officer verifies the signature and post the request in the computer. Generally AIBL takes 05 (five) working days (or less depends on customer demand) to provide the cheque book. While providing the cheque book details of the cheque book is entered by the officer in the cheque issue register and number of cheque leaf is posted in the computer. The authorized officer then verifies the received signature of the client in the register with the signature card in the PC bank software and if the signature matches then new cheque book is provided to account holder. 4.15 Transfer of an account to another Branch: Sometimes the customer wants to transfer his account to another branch due to various reasons. AlArafah Islami Bank, Dhanmondi Branch, also gives this kind of facility to the customer. In this case, they will have to submit an application to the branch manager stating the reasons. The officer verifies the signature and finds out the balance of the account holder. The holder also submits the rest check leaves along with the application. Then the officer issues an inter Branch Credit Advice (IBCA) to that branch and a debit voucher with the balance of deposit in that account. He also sends the account opening form and specimen signature card to that new branch. The new branch officer verifies the customer signature with account opening form supplied to him. The amount mentioned in the (IBCA) considered as the initial deposit of the new branch. 4.16 Account closing procedures: To close an account, party may be requested to send an application along with the unused leaves of the cheque book issued to him. After receiving the application the signature of the account holder shall be verified and the number of unused Cheque leaves should be noted. Befor the account is close the manager will approve the application and closing charge being the incidental charge should be debited to the account. AIBL offers different types of DPS schemes for their customers. Maturity of these schemes starts from five years, so there are many depositors who can not fulfill their installment payment and want to close their account before maturity. This account closing task is being done in this section. If the customers close their account before maturity then they get the profit just like the Mudaraba Savings Account and a closing charge of Taka. 150 is cut from the total balance. Other

depository accounts except MTDR are also being closed from this section. This is not a manual process; this closing task is done by using ABABIL software. Process of account closing by using Ababil ---------•

Go to Account  Close  Deposit Account

Enter the profit, Tax and closing charge ( Tk. 150.00) amount.

Enter pay order number/ savings account number/ Appropriate GL account to transfer the net payable amount.

Finally Save.

5.1 Analysis:

Source: Annual Report-2010. Three Months Observation of different type of deposits: Table 1: Three month deposit by Al-Wadia Current Deposit at Dhanmondi Branch: Month




No. of A/C Holder








Al-Wadia Current Deposit 30,000 24,000




20,000 15,000


10,000 5,000 0 May




Source: Three Months Statement of Al-Wadia Current Account in Dhanmondi Branch Comments: This graph indicates that, here last three months trend of Dhanmondi Branch of this account has been shown. From May to July its growth was upward because the main reason of this account up date when traders or company sold more products, banks trend become upward.

Analysis & Findings Table 2: Three month deposit by Mudaraba Savings Deposit at Dhanmondi Branch: Month




No. of A/C Holder








Mudaraba Saving Deposit 33,000


35,000 30,000 25,000

25,200 21,000

20,000 15,000 10,000 5,000 0 May




Source: Three Months Statement of Mudaraba Savings Deposit in Dhanmondi Branch Comments: From the above graph, we can say that, Mudaraba Savings Deposit is increasing in May to July because in this account opening charge is lower than other bank, profit rate is higher than other bank and branch emphasize on this account.

Table 3: Three month deposit by Mudaraba Trem Deposit at Dhanmondi Branch: Month




No. of A/C Holder








Mudaraba Trem Deposit 12,000,000



10,000,000 8,000,000 5,500,000

6,000,000 4,000,000 2,000,000


0 May




Source: Three Months Statement of Mudaraba Trem Deposit in Dhanmondi Branch

Comments: From the above graph, we can say that, Mudaraba Trem Deposit is increasing month to month because in this term deposit profit is high than other bank & people can open this account in various segment. Table 4: Three month deposit by Other Mudaraba Deposit at Dhanmondi Branch:





No. of A/C Holder









Other Mudaraba Deposit 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

39,000 33,000 25,000





Source: Three Months Statement of Other Mudaraba Deposit in Dhanmondi Branch Comments: This graph shows that, Other Mudaraba Deposit is increasing May to July because this is an excellent scheme to get the profit & people are more interested to open this deposit account. 5.2 Findings of study: During the internship in Al-Arafah Islami Bank I have find out some points by screening the whole study which is expressed as major findings. I have analyzed the data sincerely and carefully and have tired to identify appropriate findings. More ever, conversations with the AIBL Bank officials were very significant for these findings.

Positive: •

Physical environment of Al-Arafah Islami Bank, Dhanmondi Branch is good

Al-Arafah Islami Bank, Dhanmondi branch is located in good area.

Documents are properly maintained.

Core management term strong.

It is online customer services.

Its deposits rate is high comparing its foundation age.

The bank can introduce Islami debit & credit cards for its clients as soon as possible.

Al-Arafah Islami Bank has an interactive corporate culture. The working environment is very friendly, interactive and communicate provides as a great motivation factor among the potential customer.

It has high commitment of customer, qualified and experienced Human Resource.

All employees are very friendly & co-operated.

Negative •

Lack of motivation among the workers.

AIBL does not provide ATM card services.

AIBL not sufficient number of women employees.

AIBL should concentrate in increasing its profit earning capacity.

AIBL should not sufficient skilled manpower.

Its marketing strategy is not well designed.

Websites are not so updated.

Insufficient training program for the employees.

Number of Branches is not satisfactory for customer.

5.3 Learning: It is highly recommended that if the banks and banking sector works properly it will bring the good fortune for our country by expanding the financial activities. Al-Arafah Islami Bank becomes more effective and maintain global standard to be an excellent banking service provider in Bangladesh and in the world. In our country there are many banks particularly the esteemed private sector banks, and elite business firms provide this. In this done my internship of Al-Arafah Islami Bank Ltd, Dhanmondi Branch really I feel proud. I think it will provide me an extra benefit in my near future. If I wanna analysis my leanings in my three months period internship, one thing is clear that I only achieve & discover myself in every moment. I know that the person who graduates today and stops learning tomorrow is uneducated the day after. So I always try to know new things & try my level best to cross my own boundaries. Now I point out some learning from my successful internship. 1. Get familiar with different types of Deposit Scheme opening of AIBL. Such as: a) Al-wadiah current Deposit (CD). b) Mudaraba Savings Deposit (MSD). c) Mudaraba Lakhpoti Deposit Scheme (LDS). d) Monthly Installment Based Term Deposit (ITD). e) Mudaraba Kotipoti Deposit Scheme (MKDS). f) Mudaraba Millionaire Deposit Scheme (MDS). g) Monthly Profit Based Deposit (PTD). h) Monthly Installment Based Hajj Deposit (MHD). i)

One Time Hajj Deposit (THD).


Marriage &Investment Deposit (MIS).

k) Al-Arafah Savings Bond (ASB). l)

Foreign Currency Deposit (FCD).

m) Pension Deposit Scheme (PDS). n) Mudaraba Double Deposit Scheme (DDS) o) Mudaraba Short Notice Deposit (SND). 2. I am very familiarity about formal or organization behavior. 3. Well known in schedule work of AIBL. 4. The product & service of AIBL. 5. The general banking policy of AIBL. 6. The clearing section procedure of AIBL. 7. How to write PO/DD/TT & the process to give posting? 8. How to maintain account form and posting account opening book? 9. How to maintain closed an account? 10. How to maintain Cheek requisition from customer and give cheek to customer? 11. How to maintain Cheek book receipt from the main branch and this book is entry the cheek book register book? 12. All vouchers are mach to computer recorded copy. 13. I also got a biggest support from my supervisor of the bank that how I become self –motivated, honest, hardworking, dedicated, and enthusiastic with a commitment of quality performance with high standards of professionalism. Over all in one word can say that this internship is not only training for but also a stair of future career which will help to build up flourishing career next to future and brings ambition in lime light. Recommendation & Conclusion 6.1 Recommendation Al-Arafah Islami Bank Limited (AIBL) is one the leading banking institute in Bangladesh. To recommend Al -Arafah Islami Bank Limited (AIBL) is quite difficult thing for me as an internee. The following recommendations are given below: •

AIBL should increase skilled manpower to do its financial activities more efficiently.

Dhanmondi Branch should set up more CC camera in the branch to more control of manager in the branch.

The authority of AIBL should introduce more innovative and modern customer services.

Websites are not so updated, but I am advice you’re day to day new updated for websites.

Dhanmondi branch should improve his efficiency to control the every department.

AIBL should concentrate in increasing its profit earning capacity.

Number of Branches are not satisfactory, AIBL have to give more emphasize on increasing number of Branches.

AIBL should try to attend different type of target customers.

The training courses of Islamic banking should cover the modern subjects and issues and the training should emphasis on Quran and Sunnah.

The bank should go aggressive advertising and promotional activities to get a broad geographic coverage.

AIBL should appoint a sufficient number of women employees to deal women customer to understand their needs and thus create demand for banking.

The bank can introduce Islami debit & credit cards for its clients as soon as possible.

Foreign exchange (import & export) should be fully computerized and reduce paper based work to make it more smooth and faster.

AIBL should utilize the “Internship program” as one kind of promotional policy to encourage its present and potential clients/customers. Because young generations are the vital aspects of the economy.

Conclusion Today the banking service is very competitive. From the practical materialization of customer dealing procedure during the whole period of my practical orientation in Al-Arafah-Islami Bank limited I have reached a firm and concrete conclusion in a very confident way. I believe that my realization will be in harmony with most of the banking thinkers. It is quite evident that to build up an effective and efficient banking system to the highest desire level, computerized transaction is must. AIBL is bank which operates its according to Quran and Sunnah. Its banking activities based on profit & loss sharing. It does not create any illegal pressure on clients. It is committed to provide high quality financial services/products to contribute to the growth of G.D.P of the country through stimulating trade and commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, poverty alleviation, raising standard of living of limited income group and overall sustainable socio-economic development of the country. The is not so far when it will be in a position to overcome the existing constraints and it may be expected that by establishing a network over the country and by increasing resources this bank will be able to play a considerable role in the portfolio of development of financing. It has many several types of accounts. So, now a day it is very much easy for people to conduct their financial activities accounting to the Islamic rule and regulations. Now people can deposit their

money to the bank and get profit from the deposited money. They can also withdraw money from their account. From the learning and experience point of view I can say that I really enjoyed my internship at AlArafah-Islami Bank limited. from the very first day. I am confident that this 03 months internship program at Al-Arafah-Islami Bank limited. Will definitely help me to realize my further carrier in the job market.

Study on account opening and closing procedure of al arafah islami bank limited  

Any kinds of business small or big, inside or outside the country directly or indirectly involved with the bank. Especially in foreign trade...

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