Internship Report On “General Banking, Investment Mode & Foreign Exchange Activities of Al-Arafah Islami Bank Limited”

5/20/2018 Internship Report On General Banking, Investment Mode & Foreign Exchange Activities of Al-Arafah Islami Bank Limited

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Internship ReportInternship Report

On On

General Banking, Investment Mode & Foreign

Exchange Activities o Al!Araah Islami Bank "imited#

1


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Internship Report Internship Report

OnOn

General Banking, Investment Mode & Foreign Exchange Activities o

Al!Araah Islami Bank "imited $AIB"%#

'pervised ()*

Professor M. Mokarrom Hossain

Department of Business Administration

Faculty Of Business & Economics

Daffodil International Uniersity

+repared B)*

Md. !aiful Islam

Id" #$#%##%#'(

Batc)" *+t)

Ma,or in Accountin-


Faculty of Business & Economics


Date of Submission: 24.06.2013

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Acknoledgement

)e successful accomplis)ment of t)is report is t)e outcome of t)e contri/ution of a num/er of

people to 0)om I am -rateful and t)anked t)em from t)e ery deep of my )eart. At t)e

/e-innin-1 I 0ould like to e2press my sincere -ratefulness to Almi-)ty Alla) for ena/lin- me to

prepare t)is term report in complete form.

I 0ould like to e2press my special -ratitude to my )onora/le superisor +ro- M- Mokarrom

.ossainFaculty of Business & Economics for proidin- me muc) needed su--estions to prepare

t)is report. His inspiration1 kind direction )elped me in /uildin- coura-e and confidence to face

t)e practical situations.

I e2press my sincere inde/tedness to 3as)im A)med 4)o0d)ury1 Assistant ice president Al!

Araah Islami Bank limitedMoti/heel 0orporate Branch1 for )is kind co%operation and

-uidance. )e mem/ers of Al!Araah Islami Bank "imitedmana-ement 0ere ery co%operatie

and )elpful. )ey )elped me /y proidin- arious data1 -uidance and direction.

)anks to all t)ose persons 0)o )elped /y proidin- information and t)eir necessary materials.

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Letter of Transmittal

3une *1*$#5

o

Professor M. Mokarrom Hossain




'(/ect* '(mission o Internship Report-

!ir1

It is a -reat pleasure to su/mit my interns)ip report on General Banking, Investment Mode &

Foreign Exchange Activities o Al!Araah Islami Bank "imited#-

)e 0)ole report is /ased on my academic kno0led-e of BBA pro-ram and practical e2perience

-ained durin- interns)ip. I tried my /est to prepare t)e report. If any furt)er clarification re6uired

re-ardin- my report1 I 0ill -ratefully respond to any clarification re6uired.

Finally1 I 0ould like to t)ank you for kind -uidance and )elp. I )ope and pray t)at you 0ould /e

kind enou-) to accept t)e report and o/li-e t)ere/y.

!incerely 7ours

Md- ai'l IslamID" #$#%##%#'(

BBA *+t)Batc)

Ma,or in Acco'nting

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Letter of Acceptance

This is to certify Md. Saiful Islam ID: 101-11-1467 has reared this i!ter!shi

reort e!titled GeneralBanking, Investment Mode & oreign

!"c#ange Activities of Al$Arafa# Islami Bank Limited %AIBL'i!

Moti"eel #ororate $ra!ch i!% u!der my suer&isio! ' (uida!ce% I do here $y

aro&e the style ' co!te!t of this i!ter!shi reort. This is for the artial

ful)llme!t of four year (raduatio! de(ree of **+ i! Ma"or-+ccou!ti!( of

Da,odil I!ter!atio!al !i&ersity.

I ish his e&er success i! life.

/////////////////....

(rof) M) Mokarrom *ossain

Interns#ip Supervisor

aculty of *usi!ess ' co!omics

Deartme!t of **+

Da,odil I!ter!atio!al !i&ersity


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1E0"ARA2IO3

I solemnly declare t)at t)is dissertation is t)e outcome of ori-inal pro,ect 0ork 0ritten in

my o0n 8an-ua-e and it is not t)e replica of any ot)er student. It )as /een su/mitted for

t)e partial fulfillment of t)e re6uirements of t)e de-ree of Bac)elor of Business

Administration 9BBA: under t)e -uidance of )onora/le superisor1 Professor M.Mokarrom Hossain1Faculty of Business& Economics1 Daffodil International Uniersity1

Ban-lades). It )as not /een su/mitted to any ot)er Uniersity or Institution for any

de-ree.

;;;;;;;;;;.

Md. !aiful Islam

ID" #$#%##%#'(




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Exec'tive 'mmar)

)is report is a com/ination of t)ree mont) Interns)ip pro-ram 0it) Al%Arafa) Islami Bank

8imited 9AIB8:. Bank is t)e most important institution in a country. )e t)en President of t)e

People>+ /ut t)e first /ranc) at ?1 %%%%%%%%1 D)aka started commercial operation on Marc)

*51 #>>+. )e *nd Branc) 0as opened on ##t) May #>>+ at %%%%%%%%%%%%%%%%%%%

)e title of t)e report is t)e General Banking, Investment Mode & Foreign Exchange

Activities o Al!Araah Islami Bank "imited#- )is report is concerned 0it) t)e ealuation and

analysis of t)e -eneral /ankin- of AIB8. )e purpose of interns)ip is to meet t)e re6uirement of

BBA pro-ram and -ain practical kno0led-e /y understandin- t)e corporate culture. )e report

started 0it) t)e introductory remarks and su/se6uently summari@es t)e profile of Al%Arafa)

Islami Bank 8imited1 t)eoretical aspects1 analysis and findin-s1 ma,or findin-s in t)e -eneral

/ankin- of AIB81 and t)e closin- part consists conclusion and recommendations.

)e introduction part of t)is report emp)asi@es t)e /ack-round1 o/,ectie1 scope1 met)odolo-y1

data analysis and limitations of t)e report. )e report is descriptie in nature. Oerie0 of AIB8

includes O/,ectie1 /usiness policy1 function1 and s)are)oldin- structure1 /oard of directors1

mana-ement committee and continued actiities of AIB8.

)eoretical aspect of t)is report is -eneral /ankin- of AIB8. Analysis and findin-s part I )ae

analy@ed t)e -eneral /ankin- of AIB8 on t)e /asis of my e2perience and o/seration 90)ic) I

)ae -ot t)rou-) my interns)ip pro-ram from AIB8:.

Usually1 t)e -eneral /ankin- system is ery len-t)y in AIB8. All t)e process -oes t)rou-)

internal meetin-s and lon- discussion. I made some recommendations on -eneral /ankin- of

AIB8.

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+#apter

no Particulars (ag

no

(A-$.(A-$.

Prefatory part

-itle page 1

Dedication 2

Ackno/ledgement 3

Letter of -ransmittal 4

Declaration

!"ecutive Summar0 6

-able of +ontent 1$..

(A-$2

Report Body

+#apter$3ne4 Introduction+#apter$3ne4 Introduction .2$.5

.) Introduction of t#e report 12

1.1 3rigin of t#e report 13

-ABL! 3

+36-!6-


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1.2 3b7ective of t#e Stud0 14

1.3 Met#odolog0 8sed 14

1.4.1 Aspects of Anal0sis 14

1.4.2 +riteria of Anal0sis 1

1.4.3 Met#odolog0 of Data Anal0sis 1

1.4.4 Data +ollecting Met#od 16

1.4. eliabilit0 of +ollecting Data 16

1. -0pes of Stud0 17

1.6 Limitations of t#e Stud0 17

1.7 eport Design 1

2) +#apter$ -/o4+#apter$ -/o4(ro9le of Al$Arafa# Islami Bank(ro9le of Al$Arafa# Islami Bank

LimitedLimited

2:$;$?@

3.1 -ransaction 37

3.2.1 +as# transaction 37

3.2.1.1 +as# receipt 37


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3.2.1.2 +as# pa0ment 3

3.2.2 +learing -ransaction 3

3.2.2.1 In/ard clearing 3

3.2.2.2 3ut/ard clearing 3

3.2.2.3 -ransferring -ransaction 3

3.3 3pening Account 3

3.4 emittance of und Section 42

? +#apter$ our 4 Investment Mode of AIBL+#apter$ our 4 Investment Mode of AIBL ?5$


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4.1 Mode of Investment 4

4.16 Sector /ise Investment 4

< +#apter$ ive4 -o !valuate -#e oreign+#apter$ ive4 -o !valuate -#e oreign

!"c#ange Activities 3f!"c#ange Activities 3f

Al$Arafa# Islami Bank LimitedAl$Arafa# Islami Bank Limited

$1;

.1 Import inancing 6

.2 !"port inancing 6

.3 Back to Back L+ 6

.4 lo/ +#art of !"port 70

. emittance 71

>) +#apter$ Si"4 SC3- Anal0sis+#apter$ Si"4 SC3- Anal0sis 1?$1>

6.1 Strengt#s of AIBL 74

6.2 Ceaknesses of AIBL 74

6.3 3pportunities of AIBL 7

6.4 -#reats of AIBL Ma7or 76

1) +#apter$Seven4 Ma7or indings,+#apter$Seven4 Ma7or indings,

ecommendation & +onclusionecommendation & +onclusion

11$@2

7.1 Ma7or indings 77

7.2 ecommendation 7

7.3 +onclusion 2

(A-$;

Appended Part

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A) Bibliograp#0 3

B) Appendi" 4

0hapter!4

IntroductionIntroduction

4- Introd'ction o the report

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Bank is a /usiness or-ani@ation like all ot)er /usiness institutions1 /anks ma,or o/,ectie

is also to earn profit. It is mentiona/le t)at /anks do not sell ready -oods like ot)er

products. But definitely a /ank is a serice sellin- institution. )e serice of a /ank is

concerned as its product. !o1 many people say t)at a /ank is t)at kind of /usiness

institution 0)ose profit earnin- 0ill /e impossi/le /y sellin- more f its products irtual

6uality is not ensured. Bank is a financial institution t)at collects societys surplus cas)

and -ies a part of t)at as loan to t)e inestors for earnin- profit. !o1 /ank is a

intermediary institution t)at makes relations)ip /et0een t)e o0ner of surplus sain-s and

t)e inestor of deficit capital. )ere are many types of /anks in Ban-lades) and t)eir

actiities can /e different /ut t)e main -oal is to earn profit. !ince1 I )ae selected Al%

Arafa) Islami Bank 8imited to continue my interns)ip pro-ram so I )ae muc)

concerned on t)is sector. AIB8 is a lar-est Islamic !)aria) /ank in Banlades) and I

0orked on t)e Islamic /ankin- actiities in Ban-lades). )e definition of Islamic /ank

approed /y t)e eneral !ecretarial of t)e OI4 is stated in t)e follo0in- manner. CAn

Islamic /ank is a financial institution 0)ose status1 rules and procedures e2pressly state

commitment to t)e principles of Islamic !)aria) and to t)e /annin- of t)e receipt and

payment of interest on any of its operations. )e prospectie role to /e played /y an

Islamic /ank t)erein opines t)at Cit is t)erefore1 natural and1 indeed1 imperatie for an

Islamic /ank incorporate in its functions and practices commercial inestment and socialactiities1 an institution desi-n to promote t)e ciili@ed mission of an Islamic economy.

Islamic /ankin- is essentially a normatie concept and could /e define conduct of

/ankin- in consonance 0ill t)e et)os of t)e alue system of Islam. It appears from t)e

A/oe definitions t)at Islamic /ankin- is a system of financial intermediation t)at aoids

receipt and payment of interest in its transactions and conductin- operations in a 0ay t)at

it )elps ac)iein- t)e o/,ecties of an Islamic economy. Alternatiely1 t)is is a /ankin-

system 0)ose operation is /ased on Islamic principle transactions of 0)ic) profit andloss s)arin- 9P8!: is a ma,or feature ensurin- ,ustice e6uity in an economy. )ats 0)y

Islamic /anks are often kno0n as P8!%/anks.

4-4 Origin o the Report

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As a serice or-ani@ation a /anks performance depends on t)e customer alue and

satisfaction. Because a /ank can ac)iee a /etter position if it fulfills t)e customer needs

and demands. !o customer satisfaction is t)e most important part of a /ank to reac) t)e

acme position. A /ank arran-es all of its actiities for proidin- t)e customer

re6uirements. By fulfillin- customers re6uirements a /ank can surie in t)e /ankin-

enironment alon- 0it) enou-) profit. Bank is t)e or-ani@ation t)at makes money /y

utili@in- money and t)at money comes from t)e user of t)e /ank. !o it depends on t)eir

proper utili@ation of money1 secured inestment policy and ri-)t and ,ust /ankin-

actiities. Al% Arafa) Islami Bank 8imited is a /it different from ot)er commercial /anks1

/ecause it follo0s Islami !)aria) of its /ankin- operations.

As an intern 0it) Finance /ack-round I decided 0it) t)e permission of my official and

academic superisors to prepare my report on oerall /ankin- practices of AIB8. )is

report is /ased on an interns)ip pro-ram in attac)ment 0it) its Bac)elor of Business

Administration 9BBA:. Eac) intern must carry a specific pro,ect1 0)ic) is assi-ned /y t)e

concerned or-ani@ation and approed /y t)e interns)ip and placement aut)ority.

4onse6uently a report /ased on t)e pro,ect is to /e su/mitted to t)e respectie aut)ority.

4-5 O(/ective o the st'd)

)ere are t0o types of o/,ectie t)at fulfillin- t)e study. )ese are -eneral and specific

o/,ecties.

General o(/ective*

)e -eneral o/,ectie of t)e report is to kno0 a/out t)e oerie0 of Al% Arafa) Islami

Bank 8imited1 mana-ement system and marketin- actiities as a priate commercial /ankas 0ell as its formation1 and its functional1 operational1 and financial aspects.

peciic o(/ectives*

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o -ain practical idea a/out eneral /ankin- system of AIB8.

o ealuate t)e inestment mode of AIB8.

o study t)e forei-n e2c)an-e actiities of AIB8.

o su--est some possi/le recommendations to oercome t)e pro/lems for t)e

smoot) operation and improement of t)e /ank.

4-6 Methodolog) 7sed

It re6uired t0o sources of information" %

+rimar)*Interie0 0it) clients & Bankers1 o/seration1 5%mont) 0ork e2perience 0it)

different diisional in c)ar-e and su--estion of many e2ecuties.

econdar)*Annual reports of AIB81 Instruction circular of Head Office1 Broc)ures ofdifferent Banks1 e0s Paper & Ma-a@ine re-ardin- Bankin- issues1 !eminar papers and

so on.

4-8-4 Aspects o Anal)sis

)is report )as /een prepared on Can oerie0 of Al%Arafa) Islami Bank 8imited. o

prepare t)is I )ae focused on t)e -eneral /ankin- actiities1 inestment actiities1

forei-n e2c)an-e actiities and oerall all diisional actiities of AIB8. !ince I )ae

0orked in t)e AIB8 as an internee t)ats 0)y I )ae some kno0led-e a/out t)e /ankin-

enironment and policy of AIB8. I )ae 0orked eery desk for -at)erin- t)e kno0led-e

and practically do t)ose. !o I )ae prepared my report /ased on my practically

e2perienced and included eery tasks. As an employee point of ie0 I )ae prepared my

report. I )ae tried to s)o0 t)e present scenario of AIB8. o descri/e t)e /ankin-

actiities I )ae used present status of t)e /ank. As a /anker perspectie I )ae -at)ered

past and present information and distin-uis)ed it from ot)er commercial /anks.

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4-8-5 0riteria o Anal)sis

All t)e tasks and information re6uired in preparin- t)is report )ae /een collected from

t)e Moti,)eel 4orporate Branc) and Head office of AIB8. )e scope of t)e

or-ani@ational part coers t)e or-ani@ational structure1 /ack-round1 and o/,ecties1

functional1 departmental and Business performance of AIB8 as a 0)ole and t)e main part

coers forei-n e2c)an-e department of AIB8. Especially it focuses on Islamic /ankin- of

AIB8. )e scope of t)e or-ani@ational part emp)asi@es on -eneral /ankin- system and it

also si-nifies t)e inestment and oerall forei-n e2c)an-e function of AIB8.

4-8-6 Methodolog) o data Anal)sis

!ince t)is is a descriptie report1 so I )ae tried to descri/e t)e eery components of and

facilities of AIB8. In t)is report I )ae included -eneral /ankin- performance1 inestment

and forei-n e2c)an-e actiities. All of past and present actiities of AIB81 I )ae

descri/ed in t)is report.o prepare our assi-nment I )ae collected data from primary and

secondary sources. I )ae collected primary data from Interie0 0it) clients & Bankers1

o/seration1 5%mont) 0ork e2perience 0it) different diisional in c)ar-e and su--estion of many

e2ecuties. )en I )ae collected secondary data t)rou-) internet and /ooks. )en I 0as a/le tocollect all information relatin- my report t)en I analy@ed t)e data and inesti-ated all data and

information. I e2plained all of related data in t)e analysis part 0)ere I )ae used -rap) and

descri/ed all t)in-s consecutiely. After t)at I )ae tried to compare /et0een t)e AIB8

/ankin- actiities and ot)er commercial /ankin- actiities. After comparin- I )ae

identified some dra0/acks of AIB8 and I illustrated some recommendations to sole

t)ese pro/lems. Finally I )ae tried to make conclusion of my report.

4-8-8 1ata collecting method

o prepare t)e report1 t)ere are many data and information )as /een used. All information

)as /een collected from primary and secondary sources.

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+rimar) inormation*For t)e or-ani@ationGpart1 t)e data )as /een collected from t)e

articles1 annual report1 /ooks and rest of t)e part of information )as /een collected from

t)e /ank1 and day to day 0orkin- e2perience )elps to -at)er t)e re6uired information.

econdar) Inormation*o prepare t)e report1 I )ae -at)ered more information from

t)e secondary sources. I )ae searc)ed t)e different /anks 0e/ sites as 0ell as lo- in to

t)e Ban-lades) Bank 0e/ site 9000.al%arafa)islami/ank.com &

000./an-lades)/ank.com:. But1 most of t)e information I )ae collected from t)e Al%

Arafa) Islami Bank 8td 0e/site. And ot)er data t)at I )ae collected t)rou-) from /ooks1

ma-a@ines1 ne0spapers etc.

4-8-9 Relia(ilit) o collecting data

All of information t)at )as /een used to prepare my report is real and alid. Because1 all

information )as /een collected from t)e annual report1 /anks 0e/ site1 and AIB8

/ankin- policy report. )e information of t)is report is true /ecause ma2imum actiities I

)ae seen 0)eneer I 0orked at t)e /ank. )e data and information of t)is report are

totally aut)entic and free of discrepancies. I )ae used suc) information t)at information

does not make any comple2ities /e)ind t)e /ankin- operations.

4-9 2)pes o st'd)

)e topic of t)is report is Coerall actiities of AIB8 and in t)is report I )ae ,ust

introduced t)e real /ankin- practice of AIB8 and t)e /ankin- enironment. I )ae

descri/ed t)e oerall /ankin- strate-y1 products1 policy1 forei-n e2c)an-e procedures.

And I tried to familiari@e t)e /anks /usiness operations. !o t)e type of my study is

e2ploratie study. And lastly I )ae dra0n a comparison /et0een ot)er Islamic /ankin-

practice and AIB8 /ankin- practice. In t)is sense t)e report )as /een deeloped as

e2ploratie type.

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http://www.al-arafahislamibank.com/http://www.bangladeshbank.com/http://www.bangladeshbank.com/http://www.al-arafahislamibank.com/


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4-: "imitations o the t'd)

An o/,ectie of t)e practical orientation pro-ram is to )ae practical e2posure for t)e

students. My tenure 0as for t)irteen 0eeks only1 0)ic) 0as some)o0 not sufficient.

After 0orkin- 0)ole day in t)e office it 0as ery difficult1 it 0as not impossi/le to study

a-ain t)e t)eoretical aspects of /ankin-. On t)e ot)er )and to prepare my interns)ip

report I )ae some limitations as follo0s"

o collect data and information1 it is a common tendency of any departments to

keep /ack t)eir department data and information.

Unaaila/ility to re6uired pu/lis)ed documents.

8ack of my e2perience and efficiency to prepare t)e standard report.

I o/sered t)at some persons are al0ays /usy in AIB8 t)ey are not a/le to teac)

us arious aspects.

)e main )indrance /e)ind preparin- t)is report 0as time. )e tenure of t)e

Interns)ip pro-ram is only t)ree mont)s. !ince 4redit department )as a ast 0ork

area1 it is not possi/le to -o t)rou-) in dept) 0it)in t)is s)ort span of time.

!ometimes t)e information 0as found to /e contradictory and inaccurate.

)e collected information needed to /e studied more

4-; Report design

)e report desi-n or lay out is -ien 0it) a fi-ure in /elo0"

0hapter


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0hapter!


20/84

)is 4)apter is mostly focused on stren-t)s of t)e /anks1 0eakness of t)e /anks1

opportunity of t)e /ank1 t)reats of t)e /ank etc. All of pro/lems and prospects are /ein-

disclosed in t)is section.

0hapter!


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Islam proides us a complete lifestyle. Main o/,ectie of Islamic lifestyle is to /e

successful /ot) in our mortal and immortal life. )erefore in eery aspect of our life 0e

s)ould follo0 t)e doctrine of Al%Jur>+ 0it) t)e said

principles in mind and to introduce a modern /ankin- system /ased on Al%Juran and

!unna).

A -roup of esta/lis)ed1 dedicated and pious personalities of Ban-lades) are t)e arc)itects

and directors of t)e Bank. Amon- t)em a noted Islamic sc)olar1 economist1 0riter and e2%

/ureaucrat of Ban-lades) -oernment Mr. A.K.M !)amsul Alam is t)e founder c)airman

of t)e /ank. His pro-ressie leaders)ip and continuous inspiration proided a /oost for

t)e /ank in -ettin- a foot)old in t)e financial market of Ban-lades). A -roup of *$

dedicated and noted Islamic personalities of Ban-lades) are t)e mem/er of Board of

Directors of t)e /ank. )ey are also noted for t)eir /usiness acumen. Al%Arafa) Islami

Bank 8td. )as (? /rac)es and a total of #(## employees 9upto Decem/er *$#$:. Its

aut)ori@ed capital is aka +$$$ millions and t)e paid%up capital is aka '((.*? millions.

isdom of t)e directors1 Islamic /ankers and t)e 0is) of Almi-)ty Alla) make Al%Arafa)

Islami Bank 8td. most modern and a leadin- /ank in Ban-lades).

)e e6uity of t)e /ank stood at k. >'(.+ million as on 5# Decem/er *$#$1 t)e

manpo0er 0as #(## and t)e num/er of s)are)olders 0as >15?'. It )as ac)ieed a

continuous profit and declared a -ood diidend oer t)e years. Hi-) 6uality customer

serice t)rou-) t)e inte-ration of modern tec)nolo-y and ne0 products is t)e tool of t)e

/ank to ac)iee success. )e /ank )as a dierse array of carefully tailored products and

serices to satisfy customer needs. )e Bank is committed to contri/ute si-nificantly to

t)e national economy. It )as made a positie contri/ution to0ards t)e socio economic

deelopment of t)e country 0it) (? /ranc)es of 0)ic) *# is AD t)rou-)out t)e country.

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>ision

o /e a pioneer in Islami Bankin- in Ban-lades) and contri/ute si-nificantly to t)e

-ro0t) of t)e national economy.

Mission

Ac)iein- t)e satisfaction of Almi-)ty Alla) /ot) )ere &

)ereafter.

Proliferation of !)aria) Based Bankin- Practices.

Juality financial serices adoptin- t)e latest tec)nolo-y.

Fast and efficient customer serice.

Maintainin- )i-) standard of /usiness et)ics.

Balanced -ro0t).

!teady & competitie return on s)are)olders< e6uity.

Innoatie /ankin- at a competitie price.

Attract and retain 6uality )uman resources.

E2tendin- competitie compensation packa-es to t)e

employees.

Firm commitment to t)e -ro0t) of national economy.

Inolin- more in Micro and !ME financin-.

Goal o the (ank

)e motto of t)e Al%Arafa) Islami Bank 8td is to e2plore a ne0 )ori@on of innoatie

modern /ankin- creatin- an automated and computeri@ed enironment proidin- one

stop serice and prepare itself to face t)e ne0 c)allen-es of -lo/ali@ation and *$t)

century.

0ommitments

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Ours is a customer focused modern Islamic Bankin- sound

and steady -ro0t) in /ot) mo/ili@in- deposit and makin-

6uality Inestment to keep our position as a leadin- Islami

/ank in Ban-lades).

o delier financial serices 0it) t)e touc) of our )eart to

retail1 small and medium scale enterprises1 as 0ell as

corporate clients t)rou-) our /ranc)es across t)e country.

Our /usiness initiaties are desi-ned to matc) t)e c)an-in-

trade & industrial needs of t)e clients.

3o present some data on the (ank (elo*

$In million taka%

23


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Particulars *$$ *$$+ *$$' *$$( *$$?

Aut)ori@ed 4apital #$$$.$$ #$$$.$$ *+$$.$$ *+$$.$$ *+$$.$$

Paid up 4apital +?'.>> '((.> ?+.*$ ##+5.#? #5?5.?#

=esere Fund ??.$$ +*.** ?5+.>? #$>#.>+ >$+.55

!)are)olders E6uity >+(.*' #**$.#' #'>$.#? *$5(.+$ *($+.(

Deposit #$#$?.*? ##'5.'' #'((+.5 *5$$>.#5 *>'>$.#*

Inestment ?#+$.#' ##(.# #(*5.#> **>$'.5( *>(*5.(>

Import >55(.> #*'5#.'$ #??*.# *($*.(* 5*'?+.#5

E2port 5'5>.5 >5*.>$ >#.*( #*(#.># *$#('.'

otal Income ##*$.?+ #+*.'? *#(*.? *>++.'# 5?(.*'

otal E2penditure ((#.>' >$.? #*$*.(# *#>>.5 *?+>.#'

Profit /efore a2 5?.?> +?.*$ ?++.( (+'.#? #+*?.$>

Profit after a2 #+?.(' *'*.>$ ($.$* 5(.5# ''?.*

Income a2 #+(.$$ *#+.#$ 5?+.+ *5+.+5 +>$.''

otal Assets #*?(.'# #+55'.?> *#5'?.#( 5$#?*.5* 5>#+?.

Fi2ed Assets #>+.#( *$?.$$ *#+.## 55.? 5>'.('

Earnin- per s)are

9aka:*'5.'? 5?(.?$ ++$.* 5$.#* ?.*>

Profit Earnin- =atio .?>

Diidend per s)are #+.+L *'.$$L 5+L *$L 5$L

Bonus

o. of !)are)olders +5(> +$* ?( #*$#5 #$''

um/er of

Employees?$5 ((# >#* #$55 #$?$

um/er of Branc)es $ # ' ' +$

Manpo0er per *$ #> *$ *5

24


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Branc)

2a(le* 6-4 some data o AIB"

5-5 Management Bod)*

)e mana-ement of t)e /ank is ested in a * mem/er /oard of directors1 0)o oersee

t)e affairs of t)e /ank t)rou-) a mana-in- director1 t)e c)ief e2ecutie officer of t)e

/ank1 in Decem/er *$$$1 t)e /ank )ad a total of '**employees1 includin- its e2ecuties

and it )ad 5+ /ranc)es 95$ ur/an and + rural:. But in *$## t)e num/er of /ranc)es is (?

and employees a/out 5$$$. )e re-istered )ead office of t)e /ank is at Moti,)eel1 D)aka.

Management o Managing 1irector

2


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Ekram'l .o?'e

Mana-in- Director

Md- Rai?'l Islam

Deputy Mana-in-Director

@hondoker

3a)eem'l @a(ir

Deputy Mana-in-

Director

Md Moael

.ossain

Deputy Mana-in-

Director

Fig're!6-4* Management (od) o AIB"

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Board o 1irectors

!8 ame !tatus 0it) t)e Bank

# 3/. Al%Ha,, Badiur =a)man

4)airman

* !arker Mo)ammad !)ameem

I6/al

ice 4)airman

5 Al)a,, Md. Harun%ar%=as)id

N)an Director

Al)a,, a@mul A)san N)aled

Director

+ Al)a,, A/dul Malek Molla) Director

' Al)a,, Hafe@ Md. Enayetulla) Director

( Al)a,, A/dul Moktadir Director

? Al)a,, A)amedul Ha6ue Director

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> Al)a,, A/dus !amad Director

#$ Al)a,, A/u aser Mo)ammad

7ea)ea

Director

## Al)a,, A/dus !alam Director

#*

Al)a,, ia@ A)med

Director

#5 Md. As)ik Hossain Director

# !a/rina Fara) A)med Director

#+ Mo)ammed Emadur =a)man Director

#' Md. =afi6ul Islam Director

#( An0ar Hossain Director

#?Dr. Momta@ Uddin A)med Director

#> 3/. Ekramul Ho6ue E2%Officio Director

*$ Bri-adier eneral M A Malek

9=etd:

Director

2a(le6-5 Board o 1irectors "ist

"ist o 0hairman o the Exec'tive 0ommittee $E-0%

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!.8. ame Desi-nation

#. Al%Ha,, A. K. M !amsul Alam 4)airman

*. Al%Ha,, Md. Ano0ar Hossain 4)airman

5. Al%Ha,, Hafe@ Md. Enayetulla) 4)airman

. Al%Ha,, Md. An0ar Hossain 4)airman

+. Dr. Ba)auddin Mo)ammad 7ousuf 4)airman

'. A.K.M. !)amsul Alam 4)airman

(. Al%Ha,, Hafe@ Md. Enayetulla) 4)airman

2a(le* 6-6 "ist o 0hairmen

)e mana-ement /ody of AIB8 is c)an-ed after four year 0it) dra0in- a annual

meetin-. Once t)e mana-ement /ody is c)an-ed t)e ne0 /ody )as taken t)e ne0 steps to

improe t)e /ankin- system. But t)e main intention of t)is /ody is to meet up t)e ision

of t)e /ank to continue t)e mission and o/,ecties. )en t)e c)an-ed of mana-ement

team t)e ne0 /ody 0ant to restart t)eir o0n style to maintain t)e /ankin- scenario.

5-6 1eposits*

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)e total deposit of t)e /ank 0as k. $1('1*#51>5$ at t)e end of Marc) in *$##1 of

0)ic) -eneral deposit 0as k. 1?>$1$(?15(>. In t)e year *$$?1 t)e amount 0as k.

*'1'?+11#(( and t)e -eneral deposit 0as k. 51'('15#+1?>$.

5-8 "ia(ilit) +'rchase () the AIB"

Investment

At t)e end of t)e year *$$>1 t)e amount of inestment of t)e /ank 0as k. #(*5.#>

million in comparison to k.##(.# million of t)e year *$$+. )e amount of

inestment )as increased +>?.(? million taka 0it)in t)is period1 0)ic) is around+#.?L. )e /ank e2tends inestments to t)e clients under t)e follo0in- modes of

inestment under Islamic !)aria)"

Mura/a)a *. Bai%Mua@@alBai%!alamHire 5.Purc)ase .!)erkatul MelkMudara/a

+.Mus)araka '.Juard (.!pecial Inestment ?. Bai Istisna >. Mura/a)a Post

import.

M'ra(aha

Mura/a)a mode of finance means purc)ase of commodities as per re6uest of t)e client

permissi/le /y !)aria) and sale t)ereof 0it) profit to t)e client i.e. cost plus sale of a

commodity to t)e inestment client. )e commodity is procured at t)e instance of t)e

inestment client from a t)ird party firm. Purc)ase price and profit are disclosed to t)e

client. oods are kept under /anks custody as security and t)e client lifts t)e same

-radually or at a time on payment of sale price of t)e commodity.

Bai!M'aal

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Bai% Mua@@el means cost plus sale of t)e commodity on deferred payment /asis a-ainst

ade6uate collateral. )e commodity is procured at t)e instance of t)e inestment client

from a t)ird party as pert firm a-reement /et0een t)e client and t)e /ank sale price

9/anks dues: is paid /y t)e client 0it)in stipulated period of time. After )ain-

possession of t)e -oods1 t)e /ank deliers t)e same to t)e client on credit 0)ic) is

re6uired to /e paid at a specified future date 9ad,ust proportionately: 0it) t)e pro-ress of

sale of -oods 0it)in t)e -ien period.

Bi! alam $Advance ale%

Under t)is mode1 t)e /ank /uys t)e -oods from t)e producersupplier on payment inadance after ensurin- a firm contract and t)e -oods are deliered supplied to t)e /ank

at a future specified date. In t)e contract of Bai !alam 6uantity1 6uality1 s)ape1 si@e1

price1 and time of deliery of t)e -oods are clearly specified.

.ire p'rchase herkat'l Melk

Dura/le items1 like e)icle1 mac)inery1 e6uipment1 etc are purc)ased on e6uity

participation /y /ot) t)e /ank and t)e client and t)e same is )anded oer to t)e

inestment client or rental /asis enterin- in to an a-reement 0it) t)e client t)at principal

amount s)all /e paid 0it)in a certain period of time /y installments. =ent is to /e pad on

t)e principal outstandin- till t)e o0ners)ip is transferred to t)e client on payment of t)e

entire principle amount.

Al! Araah Islami Bank "imited oers olloing categories o .+M*

Entire capital is proided /y t)e /ank a-ainst firm assurance of t)e entrepreneur t)at )e

0ill mana-e t)e /usiness properly and efficiently. )e entrepreneur mana-es t)e /usiness

as mana-er. Profit is s)ared to t)e /ank and entrepreneur as per a-reed ration 0)ile t)e

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loss1 if any1 is /orne /y t)e /ank alone. Bank can superise suc) inestment if and 0)en

desired re6uired /ut cannot participate in t)e mana-ement of t)e /usiness.

Industrial

4ommercial

ransport

DDI!

!!BI

HP!M =eal !tate

!taff House Buildin- Inestment

HP!M 4ar 9For e2ecutie only:

M'sharaka

4apital is proided /y /ot) /ank and inestment client on t)e /asis of !)irkatul Innan

principle of Islamic !)aria) Partners)ip. Profit is s)ared as per a-reed ratio and e6uity

ratio. )e /ank superises t)e utili@ation of inestment and participates in decision

makin-.

'ard

)e /ank also allo0s 6uard in ery special cases on o/tainin- proper security. !erice

c)ar-e e6ual to cost of fund is recoered on Juard amount.

5-9 Oice A'tomation

Bankin- operations of t)e /ranc)es )ae /een computeri@ed minimi@e cost and risks and

to optimi@e /enefits and increase oerall efficiency for improed serices. )e /ank is

capa/le of -eneratin- t)e releant financial statement at t)e end of t)e day. )e /ank )as

recently installed =euters !creen for smoot) operation of forei-n currency dealin-s. )e

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/ank )as also )osted a 0e/ pa-e of its o0n to take a place in t)e orld ide e/. )e

/ank is -oin- to introduce credit card soon.

5-: .'man Reso'rce 1epartment

In todays competitie /usiness enironment only t)e 6uality of )uman resources makes

t)e difference. )e /anks commitment to attract t)e /est persons to 0ork for it and t)0

adoption of t)e latest information tec)nolo-ies is reflected in t)e efforts of t)e /ank in t)e

deelopment of its )uman resources. In t)e faces of todays -lo/al competition /ank

enisa-es to deelop )i-)ly motiated 0orkforce and to e6uip t)em 0it) latest skills and

tec)nolo-ies. A -ood 0orkin- enironment promotes a )i-) leel of loyalty and

commitment1 deotion and dedication on t)e part of t)e employees.

Al% Arafa) islami Bank )as a trainin- centre to deelop its employees. Al%Arafa) Islami

Bank sends num/er of officers to Ban-lades) institute of /ank mana-ement and ot)er

trainin-s institutes for speciali@ed trainin- on arious aspects of /ankin-. )e /ank )as

set up a trainin- institute for proidin- trainin- facilities of its e2ecutie officers. )e

trainin- institute )as already conducted a num/er of courses. A num/er of officers )ae

/een sent for forei-n trainin-. Al Arafa) Islami Bank /eliees in professional

e2cellence and considers its 0orkin- force as its most alua/le assets and t)e /asis of its

efficiency and stren-t).

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5-; 0orporate ocial Responsi(ilities

Al!Araah Islami Bank Fo'ndation

)e Bank )as a Foundation launc)in- p)ilant)ropic actiities. Al%Arafa) En-lis)

Medium Madrasa) and Al%Arafa) Islami Bank 8i/rary are ma,or t0o 0in-s for launc)in-

p)ilant)ropic actiities.

Al!Araah English Medi'm Madrasah

Al%Arafa) En-lis) Medium Madrasa) )as /een esta/lis)ed /y t)e Al%Arafa) Bank

Foundation 0it) a ie0 to /uildin- ne2t -eneration accordin- to t)e ideals of peace and

e6uality of Islam and to esta/lis)in- /ankin- and ot)er aspects of life in t)e 0ay of Islam.

)e prime aim of t)is madrasa) is to contri/ute to0ards /uildin- )uman resource and in

t)e /roader sense to ensure )uman 0elfare. it) t)e ie0 Al%Arafa) Islami Bank

Foundation )as esta/lis)ed an En-lis) medium madrasa) at D)anmondi in #>>>. !uc)

institution upto O leel of its kind is for t)e first time in Ban-lades).

Al!Araah Islami Bank "i(rar)

8i/rary is t)e carrier & reseroir of kno0led-e. Al%Arafa) Islami Bank )as s)o0n t)at

ot)er t)an -eneratin- profit1 it can also contri/ute si-nificantly in t)e field of proidin-

-ood source of kno0led-e /y esta/lis)in- a pu/lic li/rary at 5*1 opk)ana =oad1

4)itta-on- B)a/an 9#st floor:1 D)aka1 t)us stren-t)enin- social deelopment. It is

situated in a sound1 )ealt)y surroundin-s. It )ar/ors *51$$$ /ooks of reference for t)e

researc)ers1 students1 professionals1 /ankers1 p)ysicians1 en-ineers1 politicians1 0riters or

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,ournalists1 een for t)e kids. It is open to all from t)e year *$$$ and 0ell located &

accessi/le to eery/ody. It procured some e2ceptional collection of /ooks on reli-ion1

economics1 /ankin-1 computer science1 /usiness administration1 sociolo-y1 En-lis) &

Ara/ic lan-ua-e and ,uenile literature in Ban-la1 En-lis)1 Urdu & Ara/ic1 0)ic) are

ery rare.

0hapter!6

General Banking Activities

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Bank is not)in- /ut an intermediary /et0een lender 9surplus unit: and /orro0er 9deficit

unit:. !ain-s and deposits are t)e main stren-tr) of t)e /anks to proide loan. And t)e

interest earned from t)e difference /orro0in- and lendin- is t)e ma,or portion of /anks

income. Banks also earns from ariety of operation. Branc) /ankin- includes four

operational diisions in Al%Arafa) Islami Bank 8imited.

eneral /ankin- is t)e front side /ankin- serice department. It proides t)ose customers

0)o come fre6uently and t)ose customers 0)o come one time in /ankin- for en,oyin-

ancillary serices. In some -eneral /ankin- actiities1 t)ese are no relation /et0een

/anker and customers 0it) 0)o /ank are doin- its /usiness fre6uently. Al%Arafa) Islami

Bank 8imiteds -eneral /ankin- is diided into fie sectors. )ese are"

Account openin- !ection

Bills and clearin- section

=emittance section

Deposit section

4as) section

Initially all t)e accounts are opened t)rou-) deposit money /y t)e customer and t)ese

accounts are called deposit account. ormally a person needs to open an account to take

serices from t)e /ank. it)out openin- an account1 one cannot en,oy ariety of serices

from t)e /ank. )us1 t)e /ankin- usually /e-ins t)rou-) t)e openin- of t)e account 0it)

t)e /ank.

6-4 2ransaction

ransaction is a financial eent1 0)ic) c)an-es t)e financial position of a company.

)ere are t)ree types of transaction t)at is performed /y t)e Al%rafa) Islami Bank

8imited.

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4as) transaction

ransferrin- transaction

4learin- transaction

6-5-4 0ash transaction

4as) department is a sensitie and important place of /ank. 4as) receiin- and cas)

payment is t)e first and important duty. A /ank s)ould mem/er t)at t)e ima-e of a /ank

is dependent on cas) officer of t)e /ank. If t)e cas) officer is not smart1 outstandin- and

)andsome person1 t)en it is meant t)is does not care for its customers.

6-5-4-4 0ash receipt

=eceiin- cas) officer s)ould dra0 )is attention to aoid from t)ese types of notes 0)en

)e s)e taken money from t)e customers.

Mutilated note

Mismatc)ed note

For-ed note

Incorrect note

Burn note

6-5-4-5 0ash pa)ment

)e officer s)ould enou-) care 0)en )es)e makes payment of a c)e6ue. !ome of t)e

important c)eckpoints are -ien /elo0"

Amount of t)e c)e6ue

)o is t)e dra0 of t)e c)e6ue

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erifyin- t)e si-nature

Posted and cas) paid sale on t)e c)e6ue

ame of t)e /ranc)

Is it a fraud c)e6ue

After payment1 t)e c)e6ue t)e officer s)ould maintainnoted account num/er1 name of t)e

dra01 and 0it)dra0al amount in a re-ister /ook.

6-5-5 0learing 2ransaction

4learin- transaction is of t0o types one is clearin- anot)er is out0ard clearin-.

6-5-5-4 Inard clearing

)en any client of any /ank -ies c)e6ue to t)e creditors1 t)e creditor -enerally -ies

deposit to t)eir respectie /ank account for collection. )en t)e /anks 0ill send t)ose

c)e6ues to Ban-lades) /ank. )e Ban-lades) /ank t)en sends t)is types of c)e6ues to

/t)eir respectie /ank main /ranc) t)is type of transaction is called in0ard clearin-.

6-5-5-5 O'tard clearing

)en t)e /ank -ets different types of c)e6ues of different /anks from t)eir client for

collection1 t)ey t)en send c)e6ues to t)eir main /ranc). )e main /ranc) t)en sends

t)ose c)e6ues to /an-lads) Bank. )e Ban-lades) Bank sends t)ose to t)e respectie

/anks.

6-5-6 2ranserring 2ransaction

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ransferrin- ransaction is t)e type of transaction in 0)ic) money is not p)ysically

moed. But it is moed from one account to anot)er t)rou-) de/it and credit ouc)er.

6-6 Opening Acco'nt

)e money deposited 0it) t)e /anker is not )eld /y )im in trust /ut as )is de/ts to t)e

depositors and t)e relations)ip t)at e2ists /et0een t)e /anker and t)e depositor is strictly

t)at of de/tor and creditor. )e /anker /ecomes t)e o0ner of t)e money and is free to

utili@e t)e same in any 0ay )e c)ooses an is /ound at t)e place 0)ere t)e deposits are

maintained to make repayment t)ereof /y an e6ual amount on demand1 at notice or at t)e

end of t)e specified period 0it) or 0it)out interest dependin- on t)e nature of t)e

deposits.

)e deposits are accepted /y t)e /anker t)rou-) current and sain-s accounts1 0)ic) is

0it)dra0 a/le /y c)e6ues. )e depositors are repaya/le on demander ot)er0ise and

0it)dra0 a/le /y c)e6ues1 draft1 and order of ot)er0ise.

Al Arafa) Islami Bank 8imited keeps t)e deposits on t)e form of different account. 8ike

Al% adia) current Deposit

Mudara/a !ain- Deposit

!)ort otice Deposit

Mudara/a erms Deposit =eceipt

Mudara/a Inestment erms Deposit

Mudara/a Fi2ed Deposit =eceipts

Mudara/a Profit Paya/le erms Deposits

Mudara/a Mont)ly Ha,, Deposit Mudara/a erms Ha,, Deposit

Mudara/a Dou/le !c)eme

Mudara/a Notipoti !c)eme.

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6-6-4 =ho can open an acco'ntC

)ese a/oe accounts may /e open /y%%%

Indiidual

Partners)ip

4lu/1 !ocieties1 rusts etc

3oint enture

Proprietors)ip

Priate 8imited 4ompany

Pu/lic 8imited 4ompany

6-6-5 3ecessar) doc'ments to open an acco'nt

)en a customer or-ani@ation company firm society clu/ etc. 0ant to open /ank

account )e s)e )ae to filled a /ank prescri/ed form and )ae to attac)ed t)eir

or-ani@ations documents are as follo0s.

+roprietorship

rade 8icense

P)oto-rap)

e2 certificate 9not mandatory:

Birt) 4ertificate

Or-ani@ations seal1 etc

+artnership

rade 8icense

P)oto-rap)

Partners)ip Deed

e2 certificate

Or-ani@ation seal1 etc

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+rivate "imited 0ompan)

rade 8icense

P)oto-rap) of Directors

4ertificate copy of Memorandum and Articles of Association

4ertificate of Incorporation

8ist of Directors as per return of ,oint stock company 0it) si-nature

=esolution for openin- account 0it) t)e /ank

!i-nature and seal. etc

After o/seration of all t)e formalities documents mentioned a/oe1 t)e applicant is

re6uired to deposit minimum k for openin- a sain-s account and k for openin- a

current account. )is is called initial deposit. As soon as t)is money is deposited1 t)e

/ank opens an account in t)e name of t)e applicant. It s)ould /e noted t)at t)e

permission of t)e component aut)ority for openin- of an account is a must. )e /anker

t)en supplies t)e follo0in- /ooks to t)e customer to operate t)e accounts.

Deposit /ook

A c)e6ue /ook

6-8 Remittance o F'nd ection

=emittance of fund is ancillary serices of AIB8 like ot)er commercial Banks. It aids to

remit fund from one place to anot)er place on /e)alf of its customers as 0ell as non%

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customer of /ank. AIB8 )as its /ranc)es in t)e ma,or cities of t)e country and t)erefore1

its serice one of t)e /est mediums for remittance of funds from one place to anot)er.

)e main instruments used /y AIB8 principle /ranc) for remittance of funds.

Pay order

Demand Draft

ele-rap)ic ransfer

6-8-4 1emand 1rat*

A /ank draft is an unconditional order issued /y one /ranc) of a /ank on its /ranc) to pay

a certain sum of money to t)e named person or order on demand. Hence1 a /ank draft is

al0ays paya/le on demand it is also kno0n as demand draft.

Essential eat're o 1emand 1rat*

It is dra0n /y one office of a /ank upon some ot)er office of t)e same /ank.

It is paya/le on demand.

Its payment is to /e made to t)e person 0)ose name is mentioned or accordin- to

)is order.

In ot)er 0ords1 it cannot /e made paya/le to t)e /earer.

6-8-4-4 Iss'es o 1emand 1rat

)e person intendin- to remit t)e funds t)ou-) a /ank draft )as to deposit t)e money to

/e remitted to-et)er 0it) t)e commission1 0)ic) t)e /anker c)ar-es of its serices. )e

amount of commission depends on t)e account to /e remitted. On receipt of t)e re6uired

amounts alon- 0it) due filled in prescri/ed form1 t)e /anker issues a draft and )and oer

it to t)e purc)aser.

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6-8-4-5 +a)ment o 1emand 1rat

If t)e draft is not crossed1 t)e payee can dra0 t)e amount in cas) upon presentation of t)e

same to t)e dra0 /ranc) 0it) satisfactory eidence of )is identify or can dra0 t)e money

/y depositin- to )is account t)ere of any ot)er /ank. )e draft /ein- paya/le to certain

particular person or order t)e /anker must satisfy )imself as to t)e title of t)e person

presentin- it for receiin- t)e payment. )e /anker is disc)ar-ed from lia/ility only

payment in due course.

6-8-4-6 1ishonor o 1emand 1rat

ormally a /ank cannot refuse to make t)e payment of a draft1 as it is )is o0n o/li-ation

to pay unless t)e presented draft is a for-ed one or t)ere is dou/le as to t)e identity of t)e

person presentin- it for payment. He cannot also refuse to make t)e payment of a draft of

t)e plea of non%receipt of t)e relatie adice from t)e issuin- office.

6-8-4-8 "oss o 1rat

If t)e issuin- /ranc)es reported a/out loss1 t)eft or dama-es of any draft it must promptly

inform t)e matter to t)e dra0ee /ranc) and re6uest to stop payment order suc) draft.

Bein- reported /y t)e issuin- /ranc)1 t)e dra0ee /ranc) 0ill note it to -uard it sell

a-ainst t)e fundament encasement of t)e lost draft. )is is essential so t)at t)e /anker is

not )eld responsi/le for makin- payment ot)er0ise t)an in due course.

6-8-5 2elegraphic 2ranser

ele-rap)ic transfer1 it may /ranc) telep)one or tele2. ransfer means fund money

transfer from one /ranc) to anot)er /ranc) not in same area. !ometimes t)e remitter of

43


44/84

t)e funds re6uires t)e money to /e aaila/le to t)e payee immediately. In t)at case1 t)e

/anker is

re6uested /y )im to remit t)e funds tele-rap)ically. )e /ank passes .. /y a secret

code1 0)ic) input /y t)e B in c)ar-e and /ranc) Mana-er. But at present . is /ein-

isolated /ecause of online /ankin- system of AIB8. )e online /ankin- system reduces

t)e demand of ele-rap)ic ransfer. In D)aka diision t)e online fee is #$$L free /ut

outside t)e D)aka t)e rate is free up to #.$$ lac taka.

2he charges o 2-2

4ommission #L /ut not less t)an k. #$

ele2 k. 5$9fi2ed:

!undry at k.#$

6-8-5-5 Mail 2ranser Advice

)ere t)e remitter desires t)e /anker to remit t)e funds to t)e payee instead of

purc)asin- a draft )imself1 t)e /anker does it t)rou-) a Mail ransfer Adice. )e payee

must )ae an account 0it) t)e payin- office as t)e amount remitted in suc) a manner1 is

meant for credit to t)e payees account and not for cas) payment.

2he charges o M-2-A*

4ommission #L /ut not less t)an k. #$

44


45/84

Mailin- 4ost k. 5$ 9fi2ed:

6-8-6 +a) Order

Unlike an M or t)e /ankers payment order is meant for makin- payment of t)e

/ankers o0n or of t)e customers dues locally and not for affectin- any remittance to an

outstation. In a sense1 t)e payment order is used for makin- a remittance to t)e local

creditor.

)e post are in t)e form of receipts1 0)ic) are re6uired to /e disc)ar-ed /y t)e

/eneficiaries1 0)ere applica/le on reenue stamps of appropriate alue1 a-ainst payment

in cas) or t)rou-) an account. )e PO is not a ne-otia/le instrument and cannot /e

endorsed or crossed like a /ankers draft.

6-8-8 0he?'e

A c)e6ue is a 0ritten order to t)e /ank -ien /y an account )older to pay money from )is

account. A c)e6ue is usually on t)e printed form supplied /y t)e /ank to t)eir account

)older.

+arties to a che?'e*

1raer* A person 0)o orders t)e /ank to pay money from )is account.

1raee*A person 0)ic) pays t)e account of t)e c)e6ue.

+a)ee*A person 0)o receies )is amount of t)e c)e6ue.

4


46/84

6-8-8-4 =hen Banker makes pa)ment o a 0he?'e

#. )e c)e6ue s)ould /e 0ritten in t)e /anks supplied printed c)e6ue form.

*. )e c)e6ue s)ould /e presented for payment only to t)e /ranc) of )is /ank on 0)ic) it

dra0

5. )e c)e6ue s)ould /e su/mitted 0it) a date.

. t)e amount in 0ords and fi-ure must /e same.

+. )e account )older si-ns t)e sc)eme.

'. )ere s)ould /e sufficient /alance funds in t)e account of )is customer to meet t)e

c)e6ue.

6-8-8-5 =hen (anker ma) re'se pa)ment o a che?'e

)et)er t)e c)e6ue is post dated.

)et)er t)e c)e6ue is out of dated.

)et)er t)e fund is insufficient.

)et)er dra0er does not si-n t)e c)e6ue.

On receipt of customers stop payment instruction.

On receipt of a notice of a customers deat).

On receipt of a notice of customers insanity.

6-8-8-6 Anser generall) given in case o dishonored che?'e

=efer to dra0er

ot arran-e for

E2ceeds arran-ed

Endorsement irre-ular

46


47/84

Dra0er deceased

ords and fi-ure differs

Dra0ers si-nature differs

Payment stop /y t)e dra0er

4)e6ue is mutilated

4)e6ue is out of date post dated re6uires realiation

4rossed c)e6ue please present t)rou-) a /ank.

6-8-8-8 +'nishment o Bo'ncing o che?'e

If t)e dra0er is found -uilty of a criminal offence under section #5? )e 0ould /e

punis)ed 0it) a imprisonment of one year of a fine to t)e e2tent of t0ice t)e amount of

t)e c)e6ue dis)onor or /ot).

A clearin- )ouse is suc) a type of )ouse 0)ere all mem/ers /ank settled t)eir inter/ank

transactions t)rou-) t)eir Ban-lades) account. As t)e central /ank1 Ban-lades) Bank is

t)e leader of clearin- )ouse in Ban-lades). )ere are +5 mem/ers /ank in Ban-lades) u

8-8-9 Acco'nt 1ivision

Account department is a department 0it) 0)ic) cas) and eery department is related. It

records t)e profit and loss account and statement of assets and lia/ilities /y applyin-

Colden =ules of /ook keepin- i.e. AAP. )e functions of it are t)eoretical /ased.

AIB8 principle Branc) records its accounts daily1 0eekly1 and mont)ly eery records.

8-8-9-4 General Acco'nt

47


48/84

)e account t)at is to /e maintained 0it) HO of AIB8 for t)e purpose of settlement of

inter%/ranc) transactions. enerally A4 is an important one 0)ic) )as to /e maintained

/y eac) /ranc) of AIB8. Indeed eneral A4 is a record of ori-inatin- and respondin-

transactions amon- inter%/ranc)es of t)e same /ank. All types of assets and lia/ilities of

one /ranc) 0it) anot)er one are settled t)rou-) t)is account.

8-8-9-5 Extract

E2tract is a statement of all ori-inatin- and respondin- transactions amon- inter%

/ranc)es de/it and credit adice. At t)e end of t)e day1 all t)e de/it and credit adices of

different department come to account department. It makes e2tract in li-)t of all adices.

8-8-9-6 1e(it >o'cher

For makin- cas) payment like entertainment1 coneyance1 and account department 0rites

a de/it ouc)er. Amount is 0it)dra0n t)rou-) cas) section /y presentin- de/it ouc)er.

0hapter! 8

Investment mode o AIB"

4


49/84

One of t)e core functions of commercial /anks is to create t)e claim a-ainst indiidual

/orro0er or real t)e purpose of sanctionin- credit /ank -rants loan in t)e form of

different securities. By t)e primary security 0e mean t)e financial claim of )older a-ainst

t)e real sector of economy. In /ankin- t)e sector t)e financial claim of /ank a-ainst

issuer called inestors1 /orro0ers1 and difficult units. )is core function of a /ank is

performed /y t)e credit department of t)e /ank. In t)is case t)e relations)ip of /ank and

customers is t)at of t)e creditors and de/tor.

ypes of loan and adances offered /y AIB8"

!ecured Oerdraft 9!OD:

8oan 9eneral:

House Buildin- 8oan 9!taff:

Demand 8oan

ransport 8oan

Industrial 8oan

House Buildin- 8oan 9eneral: ransport 8oan 9staff:

4as) 4redit 9Hypot)ecation:

Past Due Bills

8oan A-ainst rust =eceipt 98=:

8-4 Accept +roposal

Before su/mit a proposal t)e customer s)ould run a current account for minimum 5

mont)s and ma2imum ' mont)s to satisfy t)e /ank t)at )is flo0 of money transaction is

4


50/84

le-al. After runnin- t)e current account1 )e can su/mit t)e proposal for loan to t)e

mana-er. )e proposal also includes t)e documents of )is mort-a-e property.

8-5 >eri)ing 0'stomers

Mana-er 0ill -ie t)e documents of Mort-a-e properties1 rade license etc to t)e

inestment officer t)en erify t)e documents. Mana-er1 Assistant Mana-er1 Inestment

Officer 0ill isit customers property to make a alue of mort-a-e property.

Mana-er also -ies t)e documents of property to t)e adocate for le-al adice and t)e

aluation of t)e property. Adocate 0ill erify t)e documents of mort-a-e property. In

addition1 adocate -ies a le-al opinion of t)e property. )en mana-er1 Assistant

Mana-er1 Inestment Officer 0ill ad,ust t)e opinion of adocates 0it) t)eir o0n opinion

a/out t)e alue of mort-a-e property. 4ustomers -et loan a/out +$L of t)e mort-a-e

property. )e /ank takes #'L profit from t)is loan.

8-6 "ease Finance

AIB8 offered 8ease finance facilities to its alued clients 0it) a ie0 to facilitate clients

to ac6uire e6uipments and mac)ineries 0it)out inestin- any fund in spite of playin-

fi2ed lease rentals. Fi2ed fe0er rentals can /e tailored /ot) in terms of amount and timin-

to t)e profit and cas) flo0 position of t)e lease )older. At t)e end of t)e lease contract t)e

lease assets /ack to t)e clients 0it) a nominal and depreciated alue.

8-8 Facilities o "ease

Free t)e capital tied in capital e2penditure

0


51/84

8easin- allo0s utili@in- t)e capital else0)ere to -eneral )i-)er profits it also

reduce cas) out flo0

)e e6uipment t)at leased does not appear on clients /alance s)eets1 clients

financial ratios improe

o aoid /ud-etary constraints in capital e2penditure

8ease rentals are treated as reenue e2penditure and are entirely deduct a/le for

ta2 purpose. )is proides a -reater ta2 /enefit in comparison to /orro0in-.

8-9 Items o "easing

Any cate-ory of e6uipment and Mac)inery

Office automation e6uipments

Medical reatment dia-nosis

e)icles for transportation etc.

8-: Restricted B'siness

Production1 Marketin-1 radin- of alco)olic1 narcotic and ot)er into2icatin- dru-

of li6uor

Production and tradin- of any item /anned /y t)e -oernment

Any actiity not permitted /y t)e la0 of t)e land.

8-; "oan 0eiling

For small enterprise" Ma2imum tk. +$1 $$1$$$.$$.

8-D +'rpose

1


52/84

orkin- 4apital

4apital Mac)inery

Deliery an transport for /usiness purposes

=e%furnis)in- office Business premises.

8- Mode o Finance

4as) 4redit 9Hypo pled-e:

Hire purc)ase 8ease Finance

erm 8oan.

8-4< "oan Reneal

!uccessie loans depend on track record of preious loan. Usually1 repayment /e)aior

and e2pansion of /usiness /y t)e /orro0er are t)e main consideration rene0al and

en)ancement of t)e loan amount.

8-44 +roit Rate $interest%

Ban-lades) Bank declares t)e interest rate 0ill /e >L or a/oe to place any loan /y t)e

commercial /anks. o0 AIB8 offers t)e /ank rate is #'L to sanction any loan /ut t)e

rate differs from Inestment to inestment. And t)e rate may ups and do0n 0it) t)e

/anker customers relations)ip and sanctioned limit.

8-45 +enal Interest

2


53/84

If any /orro0er fails to ad,ust loan 0it)in alidity period or to repay consecutie $*

9t0o: installments penal interest $.*+L per mont) s)all /e c)ar-ed on t)e defaulted

amount.

8-46 ec'rities

It is superisory credit sc)eme. an-i/le security in t)e form of mort-a-e may not /e

aaila/le in all t)e cases. !o mort-a-e 0ill not /e mandatory. !ecurity 0ill /e stipulated

on a case to /asic as under 9one or seeral of t)e follo0in-:"

=e-istered mort-a-e of land and /uildin-

Mort-a-e assi-nment of possession ri-)t

Assi-nment of security money adance rent if any

Assi-nment of rade =eceia/le not older t)an >$ days

Hypot)ecation of mac)inery1 e6uipment1 e)icles1 stock%in%trade1 ra0 materials1

0ork%in%pro-ress and finis)ed -oods

Personal uarantee from persons accepta/le to t)e /ank

Post dated c)e6ues

8ien on deposits sain- certificates financial o/li-ations

Any ot)er securities to /e demand suita/le /y t)e /ank dependin- on t)e situation

like Insurance uarantee1 4orporate uarantee1 Assi-nment of 4ontract1 !ecurity

Money etc.

8-48 period o "oan

In case of continuous 8oan" One 9#: year. In case of erm 8oan" Ma2imum Fie 9+: years.

If t)e repayment sc)edule e2ists t)e period of loan is t0o types. #. !)ort term &

*. 8on- term.

hort 2erm*if t)e repayment sc)edule e2ists t)e duration of s)ort term loan is /et0een

$ to + years.

3


54/84

"ong 2erm*if t)e repayment sc)edule e2ists t)e duration of lon- term loan is more t)an

+ years.

8-49 Mode o Investment

In case of continuous loan credit turnoer in t)e account must /e e6ual to t)e limit

in a 6uarter and full ad,ustment 0it)in t)e alidity period

In case of term loan1 t)e loan s)ould /e repaid /y mont)ly installments t)rou-)

post%date c)e6ues as per amorti@ation

8-4: Ind'str) ector ise Investment

$2ho'sand in Amo'nt%

Industry !ector

0ise

*$$( *$$? *$$> *$#$

A-riculture1

Fis)in- and

Forestry

#(1#*1#'>.$$ **15+'1?>+.$$ *?1'+51+>?.$$ 5*1+$1$*+.$$

Industry #.$>.>#>1?>.$$ 51*5?1+'1*5?.$$ #1'>$1(#?1(*$.$$ 51(?>1(#?1?+.$$

4onstruction #1$+>1((1*(.$$ #1(#$1+'>1+*?.$$ #1$+>15>+15+5.$$ #1?>$15>+1#+*.$$

ater 0orks

!erices

% % % %

ransport &

4ommunication

#>1#'(1'+'.$$ +*51'*+1'5>.$$ ??(1*5'1*$.$$ #1$$$1*+1?+$.$$

!tora-e ++1+?+1((.$$ #$*1'?'1+*5.$$ >+1>'>1?*'.$$ >?>1>$$1?+?.$$

rade Finance ?1'#*1>$*1(5?.$$ ##1*'*1>5?1$>>$.$$ #(1'**15?>1>$$.$$ #?1*5*1+$1+$1

4


55/84

Miscellaneous +5$1*51>?+.$$ +'*1++'1??.$$ '(*1$$1##.$$ ?(1#*1**#.$$

otal 44,8;8,845,


56/84

One of t)e lar-est /usinesses carried out /y t)e commercial /ank is forei-n tradin-. )e

trade amon- arious countries falls for close link /et0een t)e parties dealin- in trade.

)e situation calls for e2pertise in t)e field of forei-n operations. Forei-n e2c)an-e

department of Al% Arafa) Islami Bank is one of t)e most important departments of all

departments. )is department )andles arious types of actiities /y t)ree separate

sections"

Import !ection

E2port !ection

Forei-n =emittance !ection

9-4 Import Financing

Import means /rin-in- merc)andise to country from any place rest of t)e 0orld. 0o

t)in-s mainly inole 0it) import of merc)andise /rin-in- of commodities p)ysically

into t)e country any makin- payment to0ards t)e cost of t)e merc)andise and serices

connected 0it) its dispatc) to t)e importer.

9-4-4 +roced're or o(taining IR0 $Import Registration 0ertiicate%

o perform t)e import /usiness re-istration 0it) t)e licensin- aut)ority of t)e area is an

ur-ent t)rou-) pu/lic notice t)e 4)ief 4ontroller of Imports and E2port inites

applications usually for =e-istration of importers. For -ettin- t)is re-istration t)e

follo0in- papers documents are re6uired for su/mission to 44I&E 94)ief 4ontroller of

Import and E2port: or area office of 44I&E for import re-istration certificate"

Application form.

ational 4ertificate.

Income a2 =e-istration 4ertificate.

rade 8icense from t)e Municipal or t)e 8ocal Aut)ority.

6


57/84

Mem/ers)ip 4ertificate.

Partners)ip 4ertificate 9for Partners)ip concern:.

4ertificate of =e-istration 0it) t)e re-ister of 3oint !tock 4ompany.

Memorandum of Association in case of limited 4ompany.

Bank 4ertificate.

O0ners)ip documents or rent receipts of t)e place of /usiness.

Ori-inal 4opy of reasury 4)allan /ein- payment of re-istration fees.

Ot)er documents prescri/ed in t)e import policy.

9-4-5- 0lassiication o Importer

Importers are t)ose 0)o are aut)ori@ed /y t)e import rade 4ontrol Aut)ority t)at is

44I&E for import of -oods essential for consumption or for production purposes.

)ere are mainly t)ree types of importer"

4ommercial Importer

Industrial Importer

Importer under a-e Earner !c)eme 9E!:.

4- 0ommercial Importer*

It means an importer re-istered under t)e importers1 e2porters and indenture re-istration

order #>?# 0)o import -oods for sale.

*. Ind'strial Importers*

)en issued to an industrial consumer1 -ies t)e items of import as ra0 materials and

packin- materials and spare parts1 t)e alue of entitlement and I4 classification.

6- Importers 'nder =E*

7


58/84

It means re-istered importers 0)o import only under t)e E!. E! importers can /e

importin- all permissi/le items as declared /y t)e import policy and notification. Besides

all re-istered commercial and industrial importer also can import under E!.

Other Importers are as ollos*

8ease Financin- Import.

oernment !ector Importer.

Importer under Bonded are% House !ystem.

Import /y Actual Users.

Import /y E.P.K.

9-4-6 Import Formalities +roced'res

For conductin- 0orld trade documentary credit or letter of credit is an essential

implement. It is important for t)e /eneficiary of a documentary credit to kno0 t)at

payment 0ill /e made only if t)e documents are in a/solute conformity 0it) t)e re6uired

terms and t)at t)e /ank )as to decide on t)e /asis of t)e documents alone. An importer

desires to )ae an import 84 limit must )ae apply to t)e desi-nated /ank in prescri/ed

forms for sanction of mar-in1 84 limit etc.

9-4-8 1einition o "etter o 0redit

84 means 8etter of 4redit or Documentary credit. As per Uniform 4ustoms and Practice

for Documentary 4redits 9U4PD4: meanin- of credit as under"

Article 3o- 5 o 70+10-For purpose of t)ese articles t)e e2pressions CDocumentary

4redit and C!tand /y letter of 4redit mean any arran-ement )o0eer named or

descri/ed1 0)ere/y a /ank 9 t)e issuin- /ank: actin- at t)e re6uest and on t)e instructions

of a customer 9 t)e applicant: or on its o0n /e)alf.


59/84

Is to make a payment to or to t)e order of a t)ird party 9 t)e Beneficiary: or is to

accept and pay /ills of e2c)an-e9Draft: dra0n /y t)e /eneficiary or

Aut)ori@es anot)er /ank to effect suc) payment or to accept and pay suc) /ills of

e2c)an-e 9Draft: or

Aut)ori@es anot)er /ank to ne-otiate1 a-ainst stipulated documents proide t)at

t)e terms and conditions of t)e credit are complied 0it).

enerally1 a 8etter of 4redit is a conditional Bank undertakin- of payment. In ot)er

0ords 84 is a letter from t)e importer Bankers to t)e E2porter t)at t)e /ills if dra0n as

per terms and conditions are complied 0it) 0ill /e )onored on presentation.

9-4-9 0lassiication o "0

arious types of 8etter of credits are performed /y t)e AIB8. )ese are follo0s"

=eoca/le 84.

Irreoca/le 84.

4onfirmed 84.

ransfera/le 84.

Diisi/le 84. Back to Back 84.

=eolin- 84.

=estricted 84.

=ed 4lause 84.

reen 4lause 84.

it) =esource 84.

it)out =esource 84.

+arties to a "etter o 0redit


60/84

As per terms and conditions of t)e 841 t)e seller is re6uired to /e routed t)rou-) some

intermediary /anks in order to -et )is claim. !o1 0e see t)at t)ere are a num/er of parties

inoled in an 84. t)e inoled parties to a 84 are as follo0s"

Importer B')er*!eller 0)o applies for openin- a 8etter of 4redit.

Exporter ellerBeneiciar)*it is t)e /ank on 0)ic) t)e /ill 0ill /e dra0n 9As

per condition of t)e credit:. Usually it is t)e issuin- /ank.

Opening Iss'ing Bank*it is t)e /ank 0)ic) opens issues a 8etter of 4redit on

/e)alf of t)e importer.

Advising 3oti)ing Bank*it is t)e /ank t)rou-) 0)ic) t)e 8etter of 4redit is

adised to e2porters. )e /ank is actually situated in e2porters country. It may

also assume t)e role of confirmin- and or ne-otiatin- /ank dependin- upon t)e

condition of t)e credit.

0onirming Bank $or Add 0onirming "0%* it is t)e /ank 0)ic) adds its

confirmation to t)e credit and it is done at t)e re6uest of issuin- /ank. 4onfirmin-

/ank may or may not /e adisin- /ank.

Exporters Bank i-e- 3egotiating Bank*it is t)e /ank 0)ic) ne-otiates t)e /ill

and pays t)e amount of t)e /eneficiary. )e adisin- /ank and t)e ne-otiatin-

/ank may or may not /e t)e same. !ometimes it can also /e confirmin- /ank.

Reim('rsing Bank or +a)ing Bank*It is t)e /ank1 0)ic) 0ould reim/urse t)e

ne-otiatin- /ank after -ettin- payment instruction from issuin- t)e /ank.

+roced're or Opening "0

An importer desires to )ae an import 84 limit must )ae apply to t)e desi-nated /ank

in prescri/ed forms for sanction of mar-in1 84 limit etc.

For 8etter of 4redit limit follo0in- information are to /e furnis)ed /y t)e applicant"

)e full Particulars of t)e Bank Account.

ypes of Business 9Proprietors)ip1 Partners)ip1 8imited 4o.: in case of 8td.

4ompany Balance s)eet of last t)ree years and t)e names of directors.

60


61/84

Historical Back-round.

Amount of limit re6uired.

oods to /e imported.

!ecurity to /e offered.

=e% Payment !c)edule of a source of fund.

Ot)er lia/ilities of t)e customer 0it) t)e /ank.

!tatements of Assets and 8ia/ilities.

Accounts Position.

rade 8icense and Import =e-istration um/er 0it) rene0al date.

erms of Payment" )et)er t)e import documents 0ould /e retired a-ainst

payment on receipt or a-ainst acceptance or 0)et)er post import finance is

re6uired in t)e form of MPI 8= etc.

On receipt of a/oe particulars t)e import section of t)e /ank 0ill prepare credit report of

t)e concerned importer t)e report s)ould /e collected from t)e preious /anker of t)e

party also.

Bank ill s'ppl) the olloing paper doc'mentations (eore opening o the "0*

8 4 Application Form.

I4A Form.

IMP Form.

Mura/a)a A-reement.

)e a/oe papers must /e completed duly filled and si-ned /y t)e party and erified t)e

si-nature.

2he olloing papers are re?'ired to open the "0 in the AIB"*

Import =e-istration 4ertificate 9it is taken from 44I&E:.

ational Identification um/er.

a2 Identification um/er.

alue Added a2

alid rade 8icense.

61


62/84

=ecent P)oto-rap).

isitin- 4ard.

Blank Pad.

4)ar-e Documents.

Blank 4)e6ue.

o O/,ection 4ertificate from ot)er Bank.

Undertakin- for 4IB.

Bio data for 4IB.

Mem/ers)ip 4ertificate.

If t)e all documents are clear and /anker identifies t)at t)e customer is out of risk free

t)en t)e Banker may open 84

Acco'nting +roced're or Opening "0

)e follo0in- accountin- system is follo0ed in t)e documentary creditors. )e re-ister

s)all /e posted immediately on receipt or approal from t)e Mana-er to open a 84. t)is

re-ister s)all control t)e num/ers of t)e 84.

Entries are to /e passed"

Dr. Partys A4

4r. Mar-in A4

4r. 4ommission A4

4r. Printin- & !upplies A4

4r. !tamp A4

4r. at A4

9-4-0'rrenc) >o'chers

1r-Assets as per 4ontra 984 E!: at a ;;;;.;B.4. sellin- rate

62


63/84

0r-8ia/ility as per c contra 984 E!: at a ;;;....B.4. sellin- rate

1r-F.4. Deposit 9E! fund )eld A4: at a ;;;;ormal rate

0r-F.4. Deposit A4 9E! 84 coer: at a ;;;;ormal rate

9-4-4o'cher

1r- Partys A4 94urrent A4:

0r-!undry Deposit 9!ecurity Deposit 84 E! A4:

0r-ele2 =ecoery A4 9at t)e 84 is transmitted /y tele2 or ca/le:

0r-4ommission 9As per Ban-lades) Bank 4ircular:

0r-P & A4

0r-Mura/a)a Import 84 Q B. 4. !ellin-

0r-E! Find Purc)ase A4

0r-Profit =eceia/le A4 E!

0r-Profit =eceia/le A4 9mont)ly credited /y daily product /asis:

0r-Inestment Income A4

"0 Amendment

Amendment of Irreoca/le 8etter of 4redit is not permissi/le 0it)out t)e ,oint consent of

t)e entire patron inoled in documentary credit operation.

+a)ment and pa)ments 1oc'ments o Import "0

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)en all t)e documents are prepared and t)e importer /ank sends to t)e Beneficiarys

/ank1 t)e /eneficiary 0ill s)ip t)e products into t)e !)ip1 Air or ruck etc. And t)e

/eneficiary 0ill send t)e necessary documents to t)e importers /ank.

)e documents are to /e -ien in to t)e customer"

Forei-n Banks For0ardin- 8etter

Bill of E2c)an-e

4ertificate of !)ipment

Bill of 8adin-

4ertificate of ori-in

4ommercial Inoice

4lean =eport for Findin-s 94=F:

After -ettin- all documents1 t)e importer /ank makes a file to place t)e custom office to

s)ip out t)e products. )e Applicant takes t)e follo0in- documents from t)e /anks for

clearin- t)e products from t)e custom"

Bill of E2c)an-e ;;;;;;;;;;;; ;;;# 4opy.

4ommercial Inoice;;;;;;;;;;; ;;;* 4opies

Bill of 8adin- ;;;;;;;;;;;; ;;;;.* 4opies

4ertificate of Ori-in;;;;;;;;;;;;; ;# 4opy

4ertificate of !)ipment;;;;;;;;; ;; ;...# 4opy

4lean =eport for Findin-s;;;;;;;;;; ;;# 4opy

Pro% Forma Inoice;;;;;;;;;;;;;;;.# 4opy

!0ift Ackno0led-ment;;;;;;;;;;;;;.# 4opy

Insurance 4oera-e Form;;;;;;;;;;; ;# 4opy

84AF Duplicate ;;;;;;;;;;;; ;;;.# 4opy

After -ettin- all documents and proide t)e customers1 t)en /anks s)ould )ae topayment t)e Import Bill 0it)in + days after acceptance t)e documents t)ou-) t)e

importer did not yet pay t)e lia/ility of t)e AIB8 for import.

9-5 Export Financing

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Ban-lades)i e2port )as a lar-e 6uantity of -oods and serices to forei-n )ouse)olds.

=eadymade te2tile -arments 9/ot) knitted and 0oen:1 ,ute1 3ute made products1 fro@en

!)rimps1 tea are t)e main -oods t)at Ban-lades)i e2porters e2ports to forei-n countries.

arments sector is t)e lar-est sector t)at e2ports t)e lion s)are of t)e countrys e2port.

Ban-lades) e2ports most of its readymade -arments products to U.!.A and European

4ommunity 9E4: countries. E2port means our carryin- of anyt)in- from one country to

anot)er for sale 0it) t)e stipulated period for to earn forei-n e2c)an-e make faora/le

/alance of payment position and sta/ili@e marketa/ility.

9-5-4 =hat is Export "0C

)e 84 a-ainst 0)ic) t)e -oods and serices are e2ported is called e2port 84. )e

forei-n 84s are e2port 84s. )e e2port 84 is placed for sellin- t)e -oods from o0ner

to t)e /uyer. It )elps sold out t)e products. Forei-n 84 may /e inside or outside t)e

Ban-lades).

9-5-5 Formalities or Export "0

)ere are a num/er of formalities 0)ic) an e2porter )as to fulfill /efore and after

s)ipment of -oods. )ese formalities or procedures are enumerated as follo0s"

9-5-6 O(taining Export Registration 0ertiicate*

o E2porter is allo0ed to e2port any commodity permissi/le for e2port from

Ban-lades) unless )e is re-istered 0it) 4)ief 4ontroller of Imports and E2ports

944I&E: and )olds alid E2port =e-istration 4ertificate 9E=4:.

9-5-8 ec'ring the Order

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After -ettin- E=41 t)e E2porter may proceed to secure t)e e2port order. He can do t)is

/y contractin- t)e /uyers directly t)rou-) correspondence.

9-5-9 O(taining EH+*

After )ain- t)e re-istration1 t)e E2porter applies to AIB8 0it) t)e rade 8icense1 E=4

and t)e 4ertificate from t)e concerned oernment Or-ani@ation to -et ERP. If t)e /ank

is satisfied1 an ERP is issued to t)e E2porter.

9-5-: igning o the 0ontract

After communicatin- 0it) /uyer t)e e2porter )as to -et contracted for e2porta/le items

from Ban-lades) detailin- commodity1 6uantity1 price1 s)ipment1 insurance and mark1

inspection1 ar/itration etc.

9-5-; Receiving the "etter o 0redit

After -ettin- contract for sale1 e2porter s)ould ask t)e /uyer for 8etter of 4redit clearly

statin- terms and conditions of e2port and payment.

9-5-D +roc'ring Materials

After makin- t)e deal and on )ain- t)e 84 opened in )is faor1 t)e ne2t step for t)e

e2porter is to set a/out t)e task of procurin- or manufacturin- t)e contractedmerc)andise.

9-5- Endorsement on EH+

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Before t)e e2porter 0it) t)e customs or postal aut)orities lod-es t)e e2port forms1 t)ey

s)ould -et all t)e copies endorsed /y AIB8. Before s)ipment E2porter su/mits t)e ERP

form 0it) commercial inoice. )en AIB8 officer c)ecks it properly1 if satisfied1 certifies

t)e ERP. it)out it e2porter cannot make s)ipment. )e customer must declare all e2port

-oods on t)e ERP issued /y t)e aut)ori@ed dealers.

9-5-4< hipment o goods

E2porter makes a s)ipment accordin- to t)e terms and conditions of 84.

+resentation o export doc'ments or negotiation*After s)ipment1 e2porter su/mits

t)e follo0in- documents to t)e AIB8 for ne-otiation.

Bill of E2c)an-e or Draft

Bill of 8adin-

4ommercial Inoice

Insurance Policy 4ertificate

4ertificate of Ori-in

Inspection 4ertificate

4onsular Inoice

Packin- 8ist

Juality 4ontrol 4ertificate

P)oto.

Examination o 1oc'ment

Banks deal 0it) documents only not 0it) commodity. As t)e ne-otiatin- /ank is -iin-

t)e alue /efore repatriation of t)e e2port proceeds It is adisa/le to scrutini@e and

e2amine eac) and eery document 0it) -reat care 0)et)er any discrepancy 9s: is

o/sered in t)e documents.

3egotiation o the Export 1oc'ments

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e-otiation stands for payment of alue to t)e e2porter a-ainst t)e documents stipulated

in t)e 84. if documents are in order1 AIB8 purc)ases 9ne-otiates: t)e same on t)e /asis

of /anker customer relations)ip. )is is kno0n as Forei-n Documentary Bill Purc)ase

9FDBP:. If t)e /ank is not satisfied 0it) t)e documents su/mitted to t)e AIB8 -ies t)e

e2porter reasona/le time to remoe t)e discrepancies or sends t)e documents to 84

openin- /ank for collection. )is is kno0n as Forei-n Documentary Bill for 4ollection

9FDB4:.

ettlement o "ocal Bills

)e settlement of local /ills is done in t)e follo0in- 0ays"%

)e customer su/mits t)e 84 to AIB8 alon- 0it) t)e documents to ne-otiate.

!B8 official scrutini@es t)e documents to ensure t)e conformity 0it) t)e terms

and conditions.

)e documents are t)en for0arded to t)e 84 openin- /ank.

)e 84 issuin- /anks -ie t)e acceptance and for0ard an acceptance letter.

Payment is -ien to t)e customer on eit)er /y collection /asis or /y purc)asin-

t)e documents.

Mode o +a)ment o Export Bill 'nder "0

As per U4P'$$1 *$$( reision t)ere are four types of credit. )ese are as follo0s"

!i-)t payment

Deferred payment

By acceptance

e-otiation

a- ight +a)ment 0redit*

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In a si-)t payment credit1 t)e /ank pays t)e stipulated sum immediately a-ainst t)e

e2porters presentation of t)e documents.

(- 1eerred +a)ment 0redit*

In deferred payment1 t)e /ank a-rees to pay on a specified future date or eent1 after

presentation of t)e e2port documents.

c- Acceptance 0redit*

In acceptance credit1 t)e e2porter presents a /ill of e2c)an-e paya/le to )im and dra0n at

t)e a-reed tenor 9t)at is1 on a specified future date or eent: on t)e /ank t)at is to accept

it. )e /ank si-ns its acceptance on t)e /ill and returns it to t)e e2porter. )e e2porter

t)en can represent it for payment on maturity. Alternatiely )e can discount it in order to

o/tain immediate payment.

d- 3egotiation 0redit*

In ne-otiation credit1 t)e e2porter )as to present a /ill of e2c)an-e paya/le to )im in

addition to ot)er documents t)at t)e /ank ne-otiates.

9-6-4 Back!to!(ack "0

A Back% to% /ack mec)anism inoles t0o separate 84. one is master E2port 84 and

anot)er is Back%to%/ack 84. on t)e stren-t) of Master e2port 84 /ank issues Back%to%

/ack 84. Back%to%/ack 84 is commonly kno0n as /uyin- 84. on t)e contrary1 Master

e2port 84 is kno0n as !ellin- 84.

9-6-5 Feat'res o Back! to Back "0

Import re-istration certificate & e2port re-istration certificate.

84 application and 84A form

Perform Inoice or Indent

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Insurance Policy

IMP form

Bonded 0are)ouse license

Juota allocation letter from E2port Processin- Bureau 9EPB:

9-6-6 +a)ments 'nder Back!to!(ack "0

Payment at maturity out of e2port proceeds. In case of