1.

1 Background of the Study:

The internship program is a part of the Bachelor Business Administration (BBA) degree that provides the job

experience. In the period of my internship I was placed at Al-Arafah Islami Bank Limited (AIBL), Motijheel

branch, Dhaka, for three months duration. This internship program provides me a lots of experience and

knowledge in several areas of Banking Sector. During the first few week I get experienced to the working

environment of Al-Arafah Islami Bank Limited. As the internship continued, I not only learned about the banking

activities but also gathered some practical knowledge. This internship program provides me the valuable

professional and industry-oriented practical knowledge and experience to fulfill the academic requirements.

1.2 Objectives of the Report:

 To analyze the daily activities of the bank and to introduce the different product and services of Al-

Arafah Islami Bank Limited

 To analysis SWOT of AIBL to know the bank’s strength, weakness, opportunity, threats.

 To analysis porter’s five forces model to know competition in the banking industry.

 To analysis BCG Matrix of AIBL, that we know the AIBL’s product performance depending upon their

market growth rate and relative market share.

 To analyze the Ratio of the bank to evaluate the performance

 To introduce of account opening procedure

1.3 Scope of the Report:

A Bank has different products, different services and different customers. Different departments of a bank

perform different activities. However, scope of the study is limited within a specific area on an organization

that is Al-Arafah Islami Bank, motijheel branch. Again it was prepared on the basis of data and information

gathered from the Al-Arafah Islami Bank, motijheel branch limited. The study report is related to the

activities and services performed by General Banking and cover Foreign exchange operation as an Islami

Bank.
1.4. Methodology of the study:

 Primary sources of data:

 Face to face conversation with the respective officer of the branch.

 Face to face conversation with the clients.
 Conversation with bank employees.

 Secondary sources of Data:

 Annual Reports of the Al-Arafah Islami Bank Ltd

 Various files, balance sheet and various documents
 Web site: https://www.al-arafahbank.com

1.5 Limitations of the Report:

The present study was not out of limitations. But as an internee student it was a great opportunity for me to know

the banking activities. Limitation of time was one of the most important factors in this report. Due to time

limitation many important think could not discussed in this report. The officers were very busy with their regular

activities it creates a little problem to collect details information from them.

About of Al-Arafah Islami Bank

Al-Arafah Islami Bank Ltd is one of the largest and most popular Islamic Bank in Bangladesh. The bank started

their journey on 18 June 1995 as a private limited company. All activities of AIBL are directed according to

Islamic Shariah where profit is given to the client. The Main objective of AIBL is Islamic life style is to be

successful both in our mortal and immortal life. In case of AIBL profit is legal alternative to interest. Al-arafah

Islami Bank Limited has been signed a partnership with Millennium Information Solution Limited. Al-Arafah

Islami Bank Limited provides commercial and consumer banking, trade finance, and other related custody and

clearing services in Bangladesh. The authorized capital of the Bank is Tk.15000.00 million and the paid up

capital is Tk. 8343.24 million as on 31.12.2015. Renowned Islamic Scholars and pious businessmen of the

country are the sponsors of the Bank. 100% of paid up capital is being owned by indigenous shareholders.

Porter’s five process model of Al-Arafah Islami Bank

Base Low/High Opportunity/Threats Position

Bargaining power of Medium Threats Unfavorable

Buyer’s

Bargaining power of High Threats unfavorable

Suppliers
Threat of new Low Opportunity Favorable

Entrants
Threat of Substitutes High Threats Unfavorable

Threat of Rivals High Threats Unfavorable

Bargaining power of Buyer’s:

Bank has two types of buyer in banking one is individual customer and another is corporate customer. The

bargaining power of industry customer is high because the AIBL has an opportunity, when customer deposited

there in AIBL that is so low rather than the other bank. If compares with the nearest Bank they provide 9% profit

in deposit scheme where AIBL gives only 6%. But the customers have no power to set the interest rate as well

as the banking regulation. The Bank always set the interest rate and charges. Now in terms of corporate customer

the bargaining power is also low in banking industry but they can bargain about the limitation of investment

amount because corporate customers are those who have a large amount of deposit in the bank and they took a

high amount of loan from the bank by exercising their bargaining power in this scenario the buyer act as a

customer and supplier as the same time.

Bargaining power of Suppliers:

The central Bank (Bangladesh Bank) is the main supplier for any banking activities. Bangladesh Bank has total

control over the banking industry. A little change in interest by the central bank can have tremendous effect on

the whole industry.

Threat of new Entrants:

Threats of new entrants are low in Bangladesh banking industry. Entering the Banking industry is regulated and

expensive in Bangladesh. It is difficult to start a bank with large capital, govemment licensing and Bangladesh

bank regulations. There are 59 scheduled banks in Bangladesh who operate under full control and supervision of

Bangladesh Bank (Bangladesh Bank). To start a bank we also need political support because of the political

instability of the country. There are some others factor that come under consideration when determining of new

entrants such as Brand loyalty.

Threat of Substitutes:
Thereat of substitute is medium in banking industry. AIBL’s substitute is held in two ways; either Islami Bank to

Islami Bank or Islami to conventional. There has 35 non-banking financial institutions in Bangladesh they all

offer different types of products to their customer with a competitive price or substitutes (like consumer

companies offering financing option). Some non-financial institutes are Lanka Bangla Finance limited, IDLC

Finance Limited, MIDAS Finance Limited, Investment Corporation of Bangladesh, Uttra Finance and investment

Limited are more popular than some banks in Bangladesh. For Islami Bank to Islami Bank, Bank has the huge

option for customer to fulfill the demand.

Threat of Rivals:

In banking industry competition between existing banks is very high, the competitors are string with new product

with suitable area. Every Bank wants to increase their market share by offering various products and service to

the customers. AIBL rivals are IBBL, Social Islami Bank, EXIM Bank, Prime Bank, FSIBL. Bangladesh has 8

ISLAMI banks in who offer similar products and service.

Chapter 3
Branches of Al-Arafah Islami Bank

Al-hamdulillah, during the year 2017, 154 branches including 14 new branches were inspected under the Shariah

Supervisory Secretariat by the Shariah Secretary & Muraqibs.

Division Number of branches

Dhaka 69
Chittagong 40
Sylhet 7
Khulna 12
Rajshahi 8
Barisal 11
Rangpur 5
Mymensing 2

Competitors

The main competitor of AILB is Islami Bank Bangladesh Ltd, Exim Bank, Prime Bank.

AIBL Products and Services

a. General Banking:

 Current Account
 Saving A/C
 STD (Short Term Deposit) A/C
 Fixed Deposit Account
 1 Months Fixed Deposit
 3 Months Fixed Deposit
 6 Months Fixed Deposit
 12 Months Fixed Deposit
 Monthly Installment Term Deposit (ITD)
 Foreign Currency A/C
b. Foreign Exchange:

 Letter of Credit Issue

 Letter of Credit Advise
  Foreign Documentary Bill Purchase (FDBP)
 Foreign Documentary Bill Collection (FDBC)
 Bill of Negotiation
 Foreign Remittance
c. Services of the Bank:

 ATM Card Service

 Online Banking
 Lookers Service
d. Products of AIBL:

 Cash management
 Wire transfer
 Automated clearinghouse (ACH) transaction
 Bill presentment and payment
 Balance inquiry
 Funds transfer
 Downloading transaction information
 Loan applications
 Investment activity
 Other value-added services

BCG Growth Share Matrix:

The Boston Consulting Group (BGC) growth share matrix is a tools that uses graphical representations of a company’s
products and services. To create a BCG matrix, businesses gather market-share and growth-rate data on their business
units or products.
 High Low

Stars Question Marks

High
 Mudaraba Term  Current Account
Deposit  Monthly Installment
 Investment in
Foreign Trade Term Deposit
Business Growth Rate
 Saving Account

Low Cash Cows Dogs

 ATM Card  monthly hajji Relative position

deposit
(Market Share)  Remittance  Agent banking

Star:

Stars are high growth, high market share. Stars are the leaders in business they generate more cash because of

their growth rate is high. The AIBL’s product is Mudaraba Term Deposit, Investment in Foreign Trade, Saving

Account are in the star position.

Question Marks:

Question Marks are the high growth and low market share. Every business start as an question marks position.

Investment should be high for question marks. In AIBL in the question marks position are Current Account,

Monthly Installment Term Deposit

Cash Cows:

Cash cows are the low growth and high market share. They generate more cash than they consume. They extract

the profit by investing as little cash as possible. As I seen that AIBL ATM Card, Remittance in the cash cows

position.
Dogs:

Dogs are low growth and low market share. Dogs do not have potential to bring in much cash. As I seen that

monthly hajji deposit, Agent banking are the dogs position in AIBL.

SWOT Analysis

Strengths Weaknesses
 Islamic Sharia basis  Weak risk management system
 Strong goodwill  Unskilled employee
 Large number of branches  Inadequate IT infrastructure
 Excellent customer service  Lack of human recourses
 Better deposit growth rate  Less number of ATM booths
 Opportunities Threats
 Use of modern technology  Banking regulation
 Customer service  High tax rate
 Internet Banking  Increasing Competition
 Market Penetration  Lack of Awareness
 Social activities  High employee turnover
 Expansion of branches
 Foreign exchange activities

Strength

All activities of AIBL are directed according to Islamic Sharia where profit is given to the client. AIBL has wide

image. It already earned customer loyalty; the customers of AIBL are highly committed to the Bank. AIBL has

wide network of branches in all over Bangladesh. Currently the bank has 154 branches in 7 divisions of

Bangladesh. AIBL get excellent service and employee have well connection with people. 7The total deposit of

bank was 199,703.92 million 31th December 2016. At the same time in the year 2018, the amount of total

deposits was 244,806.26 million taka. The growth rate is 22.58%.

Weakness

The AIBL have some weak point. Risk management system is not strong. The bank has exposed risk, which are

credit risk, market risk, and liquidity risk. AIBL also have lack in employee’s skill, because they are not

arranging the training program that related bank activities. . Their IT section is very weak. AIBL lack human

recourses in the GB and Remittance department as a result customer feel irritated during the rush hour. The main

weak point of the Bank is they have limited number of ATM card and booths facility.

Opportunity
AIBL opportunity is it uses modern technology. AIBL use software that named ABABIL reached 9th position in

global ranking for Islamic Banking Software. AIBL always try to improve their customers services using

different away and different product at Motijheel branch and they also increases branch at needed area.AIBL

respond positively in every sphere of social activities. They are delivering innovative solution to their valued

customer and in the same way they are also helping different social CSR activities like as Health Sector-10.80

Education Sector-8.10,Disaster Management-2.60, Cultural Activities-0.90, Environment- 1.70, Others-1.7The

total deposit of bank was 199,703.92 million 31th December 2016. They have good prospect of more export

import business at motijheel, because it commercial area.

Threats

AIBL has some threats; the threats are Certain Bangladesh Bank’s rules and regulations. They have rules and

regulation for Islamic banking. Government of Bangladesh can impose high tax on banking activities; it is

difficult for bank to fulfill the tax. It has increased competition for the market for public deposit and also

Some other banks also follow the Islamic banking policy. Islamic bank use similar types of product that is

threat for AIBL. In some cases customers are not aware of Islamic Banking system, they dose not properly

know the Islamic banking system, products and also the banking service.

1.Current Ratio:

Current ratio measures the ability to pay current liabilities of an organization through its current asset. Current

ratio is considered as better when it is greater than 1.

Year Current asset Current liability result

2015 11,142,926,670 4,700,779,301 2.37
2016 12,985,571,886 6,031,977,484 2.15
2017 11,621,076,177 7,509,581,082 1.55
 current Ratio
2.5

1.5 current Ratio

0.5

0
2015 year 2016 year 2017 year

Comment of Current Ratio:

According to the result of the current ratio of AIBL was 2.37 in the year 2015, 2.15 in 2016 and1.55 in 2017.

It means that the bank had following current assets in against of 1 tk liability. The current ratio growth of

AIBL is not good. Because in 2015 to 2017 the current ratio was decreased which not well for bank? Because

it proves that AIBL is decreasing the ability to pay off its current liability with its current assets. The higher

current ratio is better for the organization as it helps to prevent getting default culture.

2. Profit

profit margin
30.00%

25.00%

20.00%
profit margin
15.00%

10.00%

5.00%

0.00%
2015 year 2016 year 2017 year