“Evaluation Of Non- Performing Investment: A Study On

Al Arafah Islami Bank Limited, Mymensingh Branch”

 International University of Business Agriculture and Technology
Practicum Report

on

“Evaluation Of Non- Performing Investment: A Study On Al Arafah Islami Bank

Limited, Mymensingh Branch”

Submitted to:

Prof. Dr. Khair Jahan Sogra

Professor & Dean

College of Business Administration (CBA)

Submitted by:

Sabbir Khan Riad

ID: 17102208

Course Code: BUS 490

Program: BBA

Date of Submission: 28th February 2021

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 LETTER OF TRANSMITTAL

28th Feb, 2021

To

Prof. Dr. Khair Jahan Sogra

Professor & Dean,

College of Business Administration (CBA)

IUBAT-International University of Business Agriculture and Technology 4 Embankment

Drive Road, Sector-10, Uttara Model Town, Dhaka-1230

Subject: Application for submission of my practicum report.

Dear Ma’am,

With respect to you informing that, it is my great pleasure that today I am submitting my
practicum report on “Evaluation Of Non- Performing Investment: A Study On Al
Arafah Islami Bank Limited, Mymensingh branch” .The main goal of preparing this
practicum report is to “access in-depth knowledge and, analyze a study on non- performing
investment in Al Arafah Islami Bank Limited”. I tried from my heart and soul to do it in an
acceptable way. Now I need the permission of you to present it.

So, I am requesting you humbly to give me the permission to present my full practicum
report and pave the way smoother to my academic career and oblige thereby.

Yours Sincerely,

…………………
Sabbir Khan Riad
ID # 17102208
Program: BBA

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 ACKNOWLEDGEMENT

First, I would like to show gratitude to the Almighty God.

My special gratitude to our Late Prof. Dr. M Alimullah Miyan, who was the pioneer of non
government Universities in Bangladesh; who had broken the long-standing monopoly in
higher education through facilitating the establishment of a non-government University in the
country. Thus, he tried to concrete way for knowledge generation and dissemination
enlargement access to higher education to more border strata of the society. And I would like
to express my heartiest gratitude to our Vice-Chancellor Prof. Dr. AbdurRab. Again, I would
like to express my heartiest gratitude to our Dean, Prof. Dr. Khair Jahan Sogra& our
Coordinator MozaffarAlam Chowdhury.

Next, I would like to convey my gratitude to Al-arafah islami Bank Ltd, Mymensingh Branch
where I have completed my internship program as required as a course curriculum to prepare
this report.

I have acquired experience from Al-arafah Islami Bank Ltd. at Mymensingh Branch that truly
amplified my level of competency during my working period. It would not have been
possible for me to complete this internship successfully without the help of Md. Anwar
Hossain ( Operation Manager). Then, I would like to say thanks to Araz Ali (Principal
Officer) and Md. Farhad Hossain (Officer) for their helping hand and guideline, which give
me the strength to prepare this report. I want to give special thanks to the entire employee of
Al-arafahIslami Bank Ltd, Mymensingh Branch.

After that, I would like to express my gratitude to Mr. Abdullah Al Yousuf Khan, Assistant
Professor (BBA Program), College of Business Administration who guided me to bring the
real outcome into the report, without them it was not possible to prepare this report such a
good way.

All I have gratitude and respect from the bottom of my heart for them.

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 STUDENT’S DECLARATION

I am Sabbir Khan Riad, a student (Major in Finance and Banking) of Bachelor of Business
Administration (BBA), under the College of Business Administration (CBA) at IUBAT -
International University of Business Agriculture and Technology declaring that this
practicum report on the topic of “Evaluation Of Non- Performing Investment: A Study
On Al Arafah Islami Bank Limited, Mymensingh branch”at Mymensingh Branch have
only been prepared for the fulfillment of the course of BUS 490 Practicum as the partial
requirement of the Bachelor of Business Administration (BBA).

I hereby declare that this report has been solely prepared by me under my supervisor
guideline and to the best of my knowledge. It contains no materials previously published or
written by any other person which have been accepted for the degree or diploma at IUBAT or
any other educational institution, except the quotations and reference which have been duly
acknowledged. It has not been prepared for any another purpose, reward, or presentation.

………………..

Sabbir Khan Riad

ID # 17102208

Program: BBA

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 SUPERVISOR’S DECLARATION

This is to certify that Sabbir Khan Riad, a student (Major in Finance and Banking) of BBA
program of IUBAT - International University of Business Agriculture and Technology
bearing ID: 17102208 have successfully completed the internship report on “Evaluation Of
Non- Performing Investment: A Study On Al Arafah Islami Bank Limited,
Mymensingh branch”. In this regard, he practically worked in Al-ArafahIslami Bank
Limited at Mymensingh Branch under my supervision and instruction.

This report supports the topic title and fulfills the entire requirements. I instructed him to
prepare this report.

Hereby, I accept the report as the successful completion of the internship program.

………………….

Abdullah Al Yousuf Khan

Assistant Professor

College of Business Administration – CBA

International University of Business Agriculture and Technology—IUBAT University

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 Table of Contents

LETTER OF TRANSMITTAL .................................................................................................. i

ACKNOWLEDGEMENT .........................................................................................................ii
STUDENT’S DECLARATION .............................................................................................. iii
SUPERVISOR’S DECLARATION ......................................................................................... iv
List of Tables ......................................................................................................................... viii
List of Figures ........................................................................................................................... ix
List of Abbreviations ................................................................................................................. x
EXECUTIVE SUMMARY ...................................................................................................... xi
Chapter 1: Introduction .............................................................................................................. 1
Background of the study ............................................................................................................ 2
1.1Introduction: .......................................................................................................................... 2
1.2 Research Objective: ............................................................................................................. 3
1.2.1 Broad Objectives ............................................................................................................... 3
1.2.2 Specific Objectives ........................................................................................................... 3
1.3 Scope of the Study ............................................................................................................... 3
1.4 Limitations of the study ....................................................................................................... 3
1.5 Ethical consideration ............................................................................................................ 3
Chapter 2: Organizational Part................................................................................................... 5
2.1 Background of Al-Arafah Islami Bank Limited (AIBL) .............................................. 6
2.2Mission.............................................................................................................................. 7
2.3Vision ................................................................................................................................ 7
2.4 Corporate Information of AIBL ....................................................................................... 8
2.5 Corporate Governance of AIBL.................................................................................. 10
2.6 Product and Services of Al-Arafah Islami Bank Limited .............................................. 11
2.6.1 Deposits Product ..................................................................................................... 11
2.6.2 Investment products ............................................................................................. 11
2.6.3 Foreign Trade .......................................................................................................... 11
2.7 Micro Small & Medium Enterprise (MSME) Banking ................................................. 12
2.7.1 Other services......................................................................................................... 12
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 2.8 Board of Directors.......................................................................................................... 13
2.9 Hierarchy of Al-Arafah Bank Limited ........................................................................... 14
2.10 Competitors .................................................................................................................. 15
2.11External Environmental Analysis ................................................................................. 16
2.11.1 Porter’s five forces .................................................................................................... 16
2.12 Internal Environment Analysis .................................................................................... 18
Chapter 3: Department and Work Assignment ........................................................................ 27
3.1 My Experience at Al-arafah islami Bank Limited ......................................................... 28
3.2 Department ..................................................................................................................... 28
3.3 Departmental activities .................................................................................................. 28
3.4 Departmental Goal ......................................................................................................... 28
3.5 Departmental Achievement ........................................................................................... 28
3.6 Working Hours............................................................................................................... 28
3.7 Structure and Manpower of AIBL,Mymensingh Branch .............................................. 29
3.8 Tasks and duties performed ........................................................................................... 30
3.9Lessons learned from the practicum ............................................................................... 30
3.9.1 Primary Learnings ................................................................................................... 30
3.9.2 Secondary Learnings ............................................................................................... 30
3.10 Problems Faced during Internship ............................................................................... 31
Chapter 4: Research Part .......................................................................................................... 32
4.1 Background of the problem ............................................................................................... 33
4.2 Problem Statement ............................................................................................................. 33
4.3 Literature review ................................................................................................................ 33
4.4 Research Methodology ................................................................................................. 34
4.4.1 Research Approach ................................................................................................. 34
4.4.2 Types of research .................................................................................................. 34
4.4.3 Data Collection ....................................................................................................... 35
4.5 Budget Information ........................................................................................................ 35
4.6 Project Timeline ............................................................................................................. 36
4.7 Total Population ........................................................................................................ 36
4.8 Sample Frame ................................................................................................................ 36
4.9 Sample Size.................................................................................................................... 36

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 4.10 Sampling Technique ................................................................................................ 36
4.12 Research Instrument................................................................................................. 37
4.13Hypothesis analysis ....................................................................................................... 37
4.14Hypothesis scale............................................................................................................ 37
4.15Hypothesis analysis for AIBL ....................................................................................... 38
4.15.1 Hypothesis Development ...................................................................................... 38
4.15.2 Hypothesis Testing................................................................................................ 39
4.15.3 Statistical Test and Hypothesis Analysis .............................................................. 39
4.16 Findings........................................................................................................................ 46
4.17 Recommendation ......................................................................................................... 47
4.18 Conclusion ................................................................................................................... 47
Chapter 5: Appendix Part......................................................................................................... 48
5.1 References ...................................................................................................................... 49

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 List of Tables
TABLE 1: CORPORATE INFORMATION OF AIBL........................................................................... 9
TABLE 2: CORPORATE GOVERNANCE OF AIBL......................................................................... 10
TABLE 3: CURRENT RATIO OF AIBL ......................................................................................... 19
TABLE 4: QUICK RATIO OF AIBL.............................................................................................. 20
TABLE 5: ROA OF AIBL ........................................................................................................... 21
TABLE 6: ROE OF AIBL ........................................................................................................... 22
TABLE 7: NET PROFIT MARGIN OF AIBL ................................................................................... 23
TABLE 8: EPS OF AIBL ............................................................................................................ 24
TABLE 9: RETURN ON INVESTMENT OF AIBL ........................................................................... 25
TABLE 10: PROJECT TIMELINE .................................................................................................. 36
TABLE 11: HYPOTHESIS SCALE ................................................................................................. 37
TABLE 12: HYPOTHESIS ANALYSIS FOR AIBL ........................................................................... 38
TABLE 13: HYPOTHESIS TESTING .............................................................................................. 39

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 List of Figures
FIGURE 1: HIERARCHY OF MANAGEMENT IN AIBL ................................................................... 14
FIGURE 2: PORTER’S FIVE FORCES MODEL ................................................................................. 16
FIGURE 3: CURRENT RATIO OF AIBL ........................................................................................ 20
FIGURE 4 : QUICK RATIO OF AIBL............................................................................................ 21
FIGURE 5 : ROA OF AIBL ........................................................................................................ 22
FIGURE 6: RETURN ON EQUITY OF AIBL .................................................................................. 23
FIGURE 7 : NET PROFIT MARGIN OF AIBL ................................................................................ 24
FIGURE 8: EARNING PER SHARE OF AIBL ................................................................................. 25
FIGURE 9: RETURN ON INVESTMENT OF AIBL .......................................................................... 26
FIGURE 10: STRUCTURE AND MANPOWER OF AIBL,MYMENSINGH BRANCH ........................... 29
FIGURE 11: HYPOTHESIS 1 ......................................................................................................... 40
FIGURE 12; HYPOTHESIS 2 ......................................................................................................... 42
FIGURE 13: HYPOTHESIS 3 ........................................................................................................ 43
FIGURE 14: HYPOTHESIS 4 ......................................................................................................... 44
FIGURE 15: HYPOTHESIS 5 ........................................................................................................ 46

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 List of Abbreviations

AIBL - Al-Arafah Islami Bank Limited

NPL - Non- performing Investment

ROA - Return on Assets

ROE - Return on Equity

EPS - Earnings per Share

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 EXECUTIVE SUMMARY

Non Performing Investment started at the early stage of banking history of Bangladesh.
During 1980s and 1990s, Privatization and liberalization of banking sector could not control
Non performing Investment or Non-Performing Loan. The main causes of non-performing
investment for bank (fluctuation of interest rate, monitoring problem, inefficient
management, Diversion of investment). The main causes of non-performing investment for
clients (illiterate client, size of the organization, nepotism etc.).

For this non performing investment bank faces different types of problem, like (negative
relationship between non performing investment and performance efficiency, money cycling
problem, interest earnings getting stopped, affects of opening Letter of Credit (LC)).

There are some way to minimize non performing investment like (to know the background of
borrower, to know the geographical area of the borrower, recruit experienced worker for loan
department etc.). The problem of non-repayment could have been minimized if there were
sound and effective legal recovery mechanism.

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Chapter 1: Introduction

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Background of the study

1.1Introduction:
In order to be an efficient economic system financial system should be transparent and
accountable. Banking industry as a life blood of economic system should be efficient.
Bank performance is satisfactory when banks can satisfy the customers with minimum risk
and maximum return. Poor performance of banking industry has a consequence on both the
economy of a particular country and in the world economy,(Khan and Senhadji, 2001).

I am a student of Bachelor of Business Administration (BBA). I have to conduct a practical

orientation in any organization for fulfilling the requirement of the 3 months Internship
Program. The main purpose is to expose the student to real world situation. This report is
done as a partial requirement of internship program for BBA students. As a student of BBA,
with the partial fulfillment of the course requirement, I was assigned to pursue internship on
“A Study on Non- Performing Loan” in Al Arafah Islami Bank Limited in Mymensingh
branch.

Nonperforming investments (“NPIs”) refers to those financial assets from which banks no
longer receive installment payments as scheduled. This study will help to determine the
actual amount of non-performing investments (NPIs) of Al-Arafah Islami Bank Limited in
Mymensingh Branch. This study also determines the causes and consequences of non-
performing investments (NPIs) in this bank. By proper analysis and documentation, this study
will find out the way to rescue from this bad practice of this bank. For conducting this
research, I will collect the primary data and secondary data relating to financial position and
policies from Al- Arafah Islami Bank Limited.

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1.2 Research Objective:

1.2.1 Broad Objectives

The general objective of the study was to find the cause of NPL of AL-Arafah Islami Bank Ltd,
Mymensingh Branch and clear understanding of the present condition of the the NPLs of –Arafah Islami
Bank Ltd.

1.2.2 Specific Objectives

• To gain theoretical understanding about Non-performing Investment.
• To discuss the channel by which factors affect the NPL ratio.
• To discuss the implications of these findings from a theoretical and practical perspective.

1.3 Scope of the Study

The research will concentrate on the Non performing investment of Al-Arafah Islami Bank Limited. This
report also describes about the bank, its history, and non performing investment situation, the cause and
consequences of non-performing investment, and how to reduce or minimize this crisis.

1.4 Limitations of the study

Despite the best efforts, there was some limitation that works as a barrier to study.

• The main constraints of the study are insufficiency of information, which was required for the
study. There is huge information about the bank but the bank official was unable to provide all
sorts of information due to security issue and other corporate obligations.
• Bankers do not express the accurate data easily for the reason of their confidentiality.
• Employees of the bank are very busy. So they do not have much time to share information.

1.5 Ethical consideration

Considering moral part of research, secretly of their given data has been kept up entirely to guarantee
security. Other than in particular I have guaranteed the full mystery of the data that I have gathered for my
examination during my entry level position working period in Al Arafah Islami Bank Ltd. Past the reality,
utilization of any auxiliary information from any sources has been recognized with fitting references

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(Harvard referencing). Thus, the moral parts of my exploration have been pursued entirely for my
examination.

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Chapter 2: Organizational Part

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2.1 Background of Al-Arafah Islami Bank Limited (AIBL)

Al Arafah Islami Bank of Bangladesh Limited is a second-generation private commercial bank in the
country with commendable operating performance. It provides a wide range of commercial banking
services. Al-Arafah Islami Bank Limited started its operation on 18 June, 1995 as a scheduled commercial
bank as per rules and regulations of Bangladesh Bank. It renders all types of commercial banking
operations to its customers within the preview of the Bank Companies Act, 1991 and in line with the
directives and policy guidelines laid down by Bangladesh Bank. At present, Al-ArafahIslami Bank has
made substantial headway in terms of business growth, profitability and establishing its image as one of
the leading private sector Bank.

The bank is blessed with a well-designed management structure with clearly defined responsibility. The
Shariah Council comprising leading Islamic Scholars of the country well versed in Shariah in the bank
which is entrusted with the responsibility to ensure that the activities are conducted on the precepts of
Islam. The bank adheres to Shariah based best business practices at all times within a complex legal and
regulatory environment.

Bank has achieved success among its peer group within a short span of time with its professional and
dedicated team of management having long experience, commendable knowledge and expertise in
convention with modern banking with all its resources, the management of the bank firmly believes that
the Bank would be able to encounter problems that may arise both at micro and macro economic levels.

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2.2Mission
✓ Achieving the satisfaction of Almighty Allah both here and hereafter.
✓ Proliferation of Shariah Based banking Practices.
✓ Quality financial services adopting the latest technology.
✓ Fast and efficient customer service.
✓ Maintaining high standard of business ethics.
✓ Balanced growth.
✓ Steady and competitive return on shareholders equity.
✓ Innovative banking at a competitive price.
✓ Attract and retain quality human resources.

2.3Vision

To be a pioneer in Islami Banking in Bangladesh and contribute significantly to the growth of

the national economy.

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2.4 Corporate Information of AIBL

Name of the Al-Arafah Islami Bank Limited

Company

Logo

Type Public Limited Company

Industry Banking Financial Services

Founded 1995

Registered Its registered office located at level-15, Al-Arafah

Office Tower 63, PuranaPaltan, Dhaka – 1000

Headquarters Dhaka, Bangladesh

Key People Alhajj Abdus Samad(chairman)

Farman R Chowdhury (managing director)

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Products ATM services
Banking Services
Consumer Banking
Corporate Banking
Investment Banking
La-Riba Islamic Credit Card

Central PABX +88-02-44850005

FAX +88-02-44850005

SWIFT ALARBDDH

E-mail info@aibl.com.bd

AIBL 24/7 Contact Center 16434 ( From Mobile )

09611016434 ( Any Local /

Abroad )

Website www.al-arafahbank.com /
www.aibl.con.bd

Number of employees 3070

Table 1: Corporate Information of AIBL

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2.5 Corporate Governance of AIBL

Chairman AlhajjAbdusSamad

Vice-Chairman AlhajjAbdus Salam

Directors AlhajjBadiur Rahman

AlhajjNazmul Ahsan Khaled
Alhajj Abdul MalekMollah
Alhajj Hafez Md. Enayetullah
Alhajj M Emadur Rahman
AlhajjAhamedulHaque
Alhajj Abu Naser Mohammad
Yeahea
Engr. Kh. Mesbahuddin Ahmed
AlhajjNiaz Ahmed
Alhajj Md. Harun-ar-Rashid Khan
Md. Ashik Hossain
AlhajjBadshaMeah
Jb. Anwar Hossain
Md. Liakat Ali Chowdhury
Salim Rahman
Khalid Rahim

Managing Director Md. Habibur Rahman

Company Secretary Jb. Md. Mofazzal Hossain

Table 2: Corporate Governance of AIBL

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2.6 Product and Services of Al-Arafah Islami Bank Limited

2.6.1 Deposits Product

✓ Mudaraba Short Notice Deposit (MSND)

✓ Mudaraba Savings Deposit (MSD)
✓ Mudaraba Term Deposit (MTD)
✓ Monthly Profit Based Term Deposit (PTD)
✓ Monthly Installment Based Term Deposit (ITD)
✓ Al – Arafah Monthly Hajj Deposit (MHD)
✓ Savings Investment Scheme (MIS)]
✓ Al-Arafah Savings Bond (ASB)
✓ Pension Deposit Scheme (PDS)
✓ Mudaraba Pension Deposit Scheme (MPDS)
✓ Mudaraba Double Benefit Deposit Scheme (MDBDS)
✓ Mudaraba Kotipoti Deposit Scheme (MKDS)

2.6.2 Investment products

✓ Investment in Industrial Sector

✓ Investment in Agricultural Sector
✓ Investment in Business Sector
✓ Investment in Foreign Trade
✓ Investment in Construction and Housing
✓ Investment in Transportation Sector
✓ Hire Purchase (HPSM)
✓ Investment Schemes in Masque and Madrasa (MMIS)
✓ Village and Small Investment Schemes (GSIS)
✓ Small Enterprise Investment Schemes (SEIS)

2.6.3 Foreign Trade

✓ Export

✓ Import

✓ Remittance

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2.7 Micro Small & Medium Enterprise (MSME) Banking

Micro Small & Medium Enterprise (MSME) plays an important role in the economic
growth and development of a country. MSME works as the platform for job creation,
income generation, and development of forward and backward industrial linkages. MSMEs
occupied a unique position in the economy of Bangladesh.

✓ Al-Arafah uddog
✓ Al-Arafah uthsob
✓ Al-Arafah unnayan
✓ Al-Arafah punji
✓ Al-Arafah sonirbhar
✓ Al-Arafah khamerbari
✓ Al-Arafah solar energy

2.7.1 Other services

✓ ATM Card
✓ Locker Service
✓ Utility Bill/Tuition Fee Collection
✓ Mobile Banking

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2.8 Board of Directors

AlhajjAbdusSamadAlhajj Mohammad AbdusSalamAlhajjNazmul Ahsan

Chairman Vice Chairman Director

AlhajjKhandakarAlhajj Mohammed Haroon AlhajjLiakat Ali Chowdhury

Director DirectorDirector

Alhajj Salim RahmanAlhajj Md. Anowar HossainAlhajj Abdul MalekMollah

Chairman, Executive Committee Director Director

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2.9 Hierarchy of Al-Arafah Bank Limited

Figure 1: Hierarchy of management in AIBL

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2.10 Competitors

• First Security Islami Bank Ltd. (FSIBL)

• Sahajalal Islami Bank Ltd.
• Nationl Credit & Commerce Bank Ltd.
• Dutch-Bangla Bank Ltd.
• Uttara Bank Ltd.
• Eastern Bank Ltd.
• United Commercial Bank.
• Sonali Bank Ltd.
• International Finance Investment & Commerce Bank Ltd.
• Mutual Trust Bank Ltd.
• Pubali Bank Ltd.
• Southeast Bank Ltd.
• Social Islami Bank Ltd.

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2.11External Environmental Analysis

2.11.1 Porter’s five forces

Porter’s Five Forces Model of competitive analysis is a widely used approach for developing
strategies in many industries. In the banking industry, the competition level among the different
public and private banks are seen. There are many private commercial banks, state owned
banks, Islamic commercial private banks, foreign commercial banks and other non-scheduled
banks that makes a huge competition in this banking sector. Five forces of Porter’s Model that
have the effect on the operations of Al-Arafah Islami Bank Bank Limited are as follows:

Figure 2: Porter’s five forces model

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1. Threats of new entrants

The threats are new entrants are low in Bangladesh banking industry. In Bangladesh if anyone wants to
start a bank he/she will need 400 corer taka. It is difficult to start a bank with this large capital, so we can
assume that the threat of new entry is low because the starting capital is too large. So we can assume that
threat of new entrants is low in banking industry.

2. Bargaining power of buyers

There are two types of buyer in banking industry one is individual customer and anther is corporate
customer. In terms of individual customer the bargaining power is low in banking industry because the
customers have no power to set the interest rate as well as the banking regulation. 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. That is why bank
maintain a good relationship with their corporate customer . But we can say that bargaining of buyer is
low in banking industry.

3. Bargaining power of suppliers

In terms of individual supplier the bargaining power is low because the central bank of Bangladesh
imposes rules and regulation for the depository institution and bank are controlled by their parent branch.
In this scenario individual depositor are those who depositor are those who deposit lower amount of taka
to the banks and banks enjoy the most of the profits by setting the low interest rate.

4. Threat of substitutes

Threat of substitutes is moderate in banking industry. 35 non banking financial institution some of them
are giving loan to the customer with lower interest rate and the process of taking loan is easy compare to
many government bank in Bangladesh in this case its expected that customer will move to the substituted
products. So in conclusion we can said that threat of substitute is very high in banking industry.

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5. Industry rivalry

Now there are 56 conventional and 8 islami banks in Bangladesh who offer similar products and service.
Most importantly they all targeted the big corporate which makes competition very high. In 2014 Islami
banking achieves 14 percent of the market share and the schedule bank achieves 86 percent of the market
this tells us about the competition among Islami banks and conventional banks in Bangladesh.

2.12 Internal Environment Analysis

SWOT analysis of AIBL:

Strengths:

Capital adequacy ratio:As per Bangladesh financial institution requirement bank has to keep capital
adequacy ratio 10.62%. AIBL keep an average CAR ratio of 14.4% over the year.

Banking Software:AIBL use software program named ABABIL reached 9throle in world ranking for
Islamic Banking Software.

Goodwill:AIBL already earned client loyalty. The clients of AIBL are incredibly committed to the Bank.

Weakness:

Centralized Management:The most important decisions in AIBL are making by using the top authority
barring counseling with the decrease stage managers.

Lack of human recourses:AIBL lack human recourses in the GB and Remittance branch as a endresult
customer feel irritated all through the rush hour.

Operating system:AIBL nevertheless the usage of home windows 10 in most of their computers.

Opportunities:

Customer service:AIBL can improve its client service in accordance with Islamic Shariah. It can
introduce greater revolutionary way of Islamic banking in Bangladesh.

Increasing Number of ATM booth:As a famous Islami financial institution in Bangladesh AIBL
nevertheless lacks number of ATM booths though it has robust demand by way of the customers.

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Internet Banking:As an emergence of internet in Bangladesh AIBL can introduce e-banking to its
customer, which will create greater scope to the bank.

Market Penetration:AIBL can penetrate new market through assorted merchandise and offerings in
accordance with Islami Shariah.

Threats:

Banking regulation:The central bank of Bangladesh has no nicely established Islami banking regulation.

High tax rate: Government of Bangladesh can impose excessive tax on banking activities.

Increasing Competition: As a worthwhile enterprise it attracts new rivals so in banking enterprise

opposition is increased between present and new comer competitor. Because anybody choose to expanded
their market share.

Lack of Awareness:In some cases customers are now not aware of Islami Banking system.

2.13 Ratio Analysis with Five years Performance of AIBL

1. Current ratio:
Current Assets
Current Ratio =
Current Liabilities

Table 3: Current Ratio of AIBL

Current ratio 2015 2016 2017 2018 2019

1.21 1.26 1.23 1.28 1.24

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 Current Ratio
Current Ratio

1.28
1.26
1.24
1.23
1.21

2015 2016 2017 2018 2019

Figure 3: Current ratio of AIBL

Comment: From the above graphical representation, we can see that the trend of current ratio was very
much unfavorable from the year of 2015, 2017, and 2019. As a result, the bank is losing liquidity to meet
its short term financial obligations over the year. So, AIBL should take necessary steps to overcome the
liquidity problem as soon as possible.

2.Quick ratio:

Quick Ratio= (Current Assets- Stocks)/ Current Liabilities

Table 4: Quick Ratio of AIBL

Quick Ratio 2015 2016 2017 2018 2019

1.15 1.21 1.19 1.27 1.25

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 Quick Ratio
Quick Ratio

1.27
1.21 1.25
1.15 1.19

2015
2016
2017
2018
2019

Figure 4 : Quick Ratio of AIBL

Comment: The trend of Quick Ratio is good enough for AIBL. AIBL continues to retain more cash
instruments to satisfy its customers immediately for the year 2015-19.

2. Return on Assets (ROA)

Net income
Return On assets(ROA) = ∗ 100
Total assets

Table 5: ROA of AIBL

Year 2015 2016 2017 2018 2019

Return on Assets 1.08% 1.23% 0.99% 0.98% 0.96%

(ROA)

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 Return on Asset
Return on Asset

1.08% 1.23%
0.99%
0.98%
0.96%

2015
2016
2017
2018
2019

Figure 5:
ROA of AIBL

Comment: In this line chart we can see that organization has the Rerun on Asset 1.26% in 2016 which
decreases gradually. In 2019 their Rerun on Asset was 0.96% that means they are getting 0.96 taka by
utilizing 100 taka which is very low for the organization. As their Rerun on Asset decreasing day by day
this is not good sign for the organization. So, they need to be careful about it.

4. Return on Equity (ROE)

Net income
Return On Equity(ROE) = ∗ 100
Total Equity

Table 6: ROE of AIBL

Year 2015 2016 2017 2018 2019

Return on Equity (ROE) 12.82% 15.70% 14.07% 15.30% 15.08%

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 Return on Equity
Return on Equity

15.70% 15.77% 15.16%

14.07%
12.82%

2015 2016 2017 2018 2019

Figure 6: Return on Equity of AIBL

Comment: From this chart we can see that the Return on Equity is gradually fluctuate from 2015 to 2017.
In 2015 organization has the Return on Equity 14.15% & in 2019 their Return on Equity is 15.16%.

5. Net Profit Margin

Net income
Net Profit Margin = ∗ 100
Sales

Table 7: Net profit margin of AIBL

Year 2015 2016 2017 2018 2019

Net Profit Margin 4.91% 4.60% 3.87% 4.75% 3.95%

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 Net Profit Margin
Net Profit Margin

4.91% 4.75%
4.60%
3.87% 3.95%

2015 2016 2017 2018 2019

Figure 7: Net Profit Margin of AIBL

Comment:The net profit margin of Bank Asia is showing an up and down trend over these years. In 2015
the net profit margin had increased incredibly because of effective management, low cost structure and
strong pricing strategies. In 2017 it dropped down drastically to 3.87% In 2018 it increased a bit but again
it declined slightly to 4.75% And 3.95% From 2018 And 2019 which indicates, they were unable to
convert their each taka of revenues into profit.

6.Earnings per Share (EPS)

Net Income − Dividends on Preferred Stock
Erning per Share =
Average Outstanding Shares

Table 8: EPS of AIBL

Year 2015 2016 2017 2018 2019

Earnings Per Share 2.25 3.07 3.15 3.25 3.37
(EPS)

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 Earnings Per Share

2.25
3.37
2015
2016
3.07 2017
2018
3.25 2019

3.15

Figure 8: Earning per Share of AIBL

Comment: Earnings per share, also called net income per share, is a market prospect ratio that measures
the amount of net income earned per share of stock outstanding. We can see that the EPS in 2019 is 3.37
which are higher than previous year at AIBL and it is good for the organization.

7. Return on Investment:

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡
Return on Investment = ∗ 100
Total Investment

Table 9: Return on Investment of AIBL

Return on 2015 2016 2017 2018 2019

investment
1.51% 1.70% 1.34% 1.80% 1.45%

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 Return on investment
Return on investment

1.8
1.7
1.51 1.45
1.34

2015 2016 2017 2018 2019

Figure 9: Return on investment of AIBL

Comment:The graph represent that the Return on Investment of AIBL fluctuate from 2015 to 2017. After
Three years it was increasing in 2018 but in year 2019it fluctuated. And this is not good sign for the
organization. So, they need to be careful about it.

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Chapter 3: Department and Work Assignment

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3.1 My Experience at Al-arafah islami Bank Limited

I have done my internship in Al-Arafah Islami Bank. I think it was a great experience for me because
in this internship I achieved a lot of practical knowledge and performance knowledge

I have completed my internship program from A-Arafah Islami Bank Limited in

Mymensingh,Branch.I worked under his supervision.I have worked there in the General Banking
Department under the supervision of Md Anwar Hossain, First Assistant Vice President and Operation
Manager.He was very supportive in nature and helped me a lot to learn. I found myself as a regular
employee. That’s why I had to serve from 10 am to 6 pm. I worked there as responsible and punctual
person.

3.2 Department

I have worked in General Banking Department.

3.3 Departmental activities

The main tasks of general banking department are opening bank account, providing Cheque books,
ATM card, pay order, voucher posting and more.

3.4 Departmental Goal

As I am an intern for their organization, they did not give me any specific departmental goal. But they
gave me a goal of convincing the clients to open school banking account for their school going
children as much as I can.

3.5 Departmental Achievement

As an intern it was a bit difficult goal for me to achieve. But I hardly convinced 6 clients who have
school going children to open school banking account for them.

3.6 Working Hours

Sunday - Wednesday 10am - 06pm

Thursday 10am - 02pm
Friday - Saturday Close

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3.7 Structure and Manpower of AIBL,Mymensingh Branch

Figure 10: Structure and Manpower of AIBL,Mymensingh Branch

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3.8 Tasks and duties performed

• Opening Bank Accounts: Opening bank account is the most important part of a
bank.During my internship period I have helped a lot of people to open their bank
account by providing the information. I have also helped the people by filling out
their forms. I have opened 50 Savings accounts, 33 DPS accounts, 21 FDR accounts,
9 Current accounts and26 School banking accounts during my internship period.
• Registering Cheque Books: I have registered the Cheque books of each requisition
datein the register book which were came from the head office.
• Delivering Cheque Books: I have called those customers whose Cheque books have
arrived from the head office for collecting them and by keeping their records and
signature on the register book.
• Delivering ATM Cards: I have called the customers for collecting their ATM card
and delivered ATM cards to them. I have also kept the records.
• Writing Pay orders: I have written a lot of pay orders to provide different people or
organizations.
• Writing Deposit Vouchers: I have written lots of deposit vouchers for those people
who cannot read and write.

3.9Lessons learned from the practicum

During my Internship period, I have learnt many primary and secondary things. They are
given below.

3.9.1 Primary Learnings

• Gained in depth knowledge about the retail banking

• Learnt about the daily activities about general banking department
• Learnt the basics about overall banking.

3.9.2 Secondary Learnings

• Learnt about the organization culture and how to adjust in this culture.
• How to behave properly with office colleagues.
• How to communicate with the customers.
• Time management.

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3.10 Problems Faced during Internship

Although it was a great experience, but I have faced some problems. As it was my 1st time on
a professional workplace, I was a little bit nervous. It was a bit tough for me to adjust on that
environment. But after going one week, the situation has changed and it felt much more
easierfor me.

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Chapter 4: Research Part

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4.1 Background of the problem
In 2018 their non performing investment rate is 3.56%, and 2019 their non – performing
investment rate rapidly increased and the rate was 6.18%. The causes of this problem are
client’s problem (Diversify of Loan, Illiteracy of clients etc.) and bank’s problem (interest
rate, nepotism etc.).If the bank recover this type of causes they can reduce this problem.

4.2 Problem Statement

The problem statement is Non - performing Investment rate of Al-Arafah Islami Bank
Limited has been increased in last two years.

4.3 Literature review

The loan default has always been an issue of grave concern for both lenders and policy
makers (Saba et al., 2012). The opportunity cost for provisioning of NPLs is quite extreme,
Zhu et al. (2014) deployed shadow price to measure the opportunity cost and concluded that
they immensely lessen efficiency of the banking sector. In fact, NPLs mark the beginning of
banking or financial crisis (Kumar & Woo, 2015). Another aspect of non-performing
loan is that bulk of it is related to SMEs (Greenidge & Grosvenor, 2010). Ekanayake and
Azeez (2015)intend thatthe level of NPLs can be ascribed to both macroeconomic
environment and banks’ specific aspects. They further suggest that larger banks incur
lesser loan defaults as compared to smaller banks, and NPLs has negative relationship
with the GDP growth rate of GDP and inflation. Beck, Jakubik and Piloiu (2013)
conducted econometric analysis of the novel panel data from 75 countries and shows
that real GDP growth, lending mark-up rate and exchange rate significantly affect
NPLs. Macroeconomic factors such as GDP growth, unemployment, and inflation are
significant explanatory variables of NPLs (Greenidge and Grosvenor, 2010; Klein, 2013;
Louzis, Vouldis and Metaxas, 2012; Makri et al., 2014; Saba et al., 2012), and bank-level
factors, for example size, quality of thebank’s management, and lending policy, are also
important determinants of NPLs (Greenidge and Grosvenor, 2010; Klein, 2013; Louziset al.,
2012). Shimizu (2011) witnessed that relationship gaps between SMEs and small lending
institutions results in bank default. Moreover, loan classification is found to be

33 | P a g e
associated with NPLs; business loans rate changes with GDP growth rate, consumer
loans changes with lending rates, except mortgages which do not change regardless of change
in macro-economic indicators(Louzis et al., 2012). Another interesting macroeconomic
aspect of NPLs, Ramiz et al. (2016) coupled NPLs with political system of a country by
conducting an empirical investigation of the banking sector, and suggests that NPLs of
overall banking industry of Pakistan are strongly related to its political environment,
and proposes that political interference and stability.

4.4 Research Methodology

Research Methodology is used to determine how this research will be completed. It is helpful
for readers that they understand the purpose of report. “Methodology is the philosophical
framework within which the research is conducted or the foundation upon which the research
is based” (Brown, 2006). Research Methodology chapter of a research describes research
methods, approaches and designs in detail highlighting those used throughout the study. I
have described it below by part by part:

4.4.1 Research Approach

In my research I have used deductive research approach. A deductive approach is concerned

with “developing a hypothesis (or hypotheses) based on existing theory, and then designing a
research strategy to test the hypothesis”. Deductive approach can be explained by the means
of hypotheses, which can be derived from the propositions of the theory. In other words,
deductive approach is concerned with deducting conclusions from premises or propositions.
Deduction begins with an expected pattern “that is tested against observations, whereas
induction begins with observations and seeks to find a pattern within them”. That’s why I
think deductive research approach is the best suitable for my research. This research showed
how investment become non-performing investment and why so happened.

4.4.2 Types of research

This is an exploratory type of research, might involve a literature search or conducting focus
group interviews. The exploration of new phenomena in this way may help the researcher’s

34 | P a g e
need for better understanding, may test the feasibility of a more extensive study, or determine
the best methods to be used in a subsequent study.

4.4.3 Data Collection

• Primary Data: Primary data have been collected by face to face interview with
supervisor, branch manager, investment in charge, executive officers, officers,
customers and others.

• Secondary Data:

✓ Annual report of Al- Arafah Islami Bank Limited.

✓ Official website of Al- Arafah Islami Bank Limited.
✓ Bangladesh Bank Website
✓ .Related journal article from the internet.

4.5 Budget Information

Table 11: Budget Information

Particular Amount

Transport 1000

Printing 300

Binding 150

Others 200

Total 1650

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4.6 Project Timeline

Gantt chart 1: Project Timeline

Weeks 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th
Work
Topic Selection

Introduction Part

Organization Part

Data Collection

Topic Part

Research Part

Combining All

Revision and correction

4.7 Total Population

In this research, total population size is 250.

4.8 Sample Frame

The branch officials ( Mymensimgh, Netrokona ) of Al-arafah Islami Bank limited.

4.9 Sample Size

From this 250 target population , 29 respondents are selected by using convenient sampling
method.

4.10 Sampling Technique

Researcher has selected convenience sampling technique for this research.A convenience
sample is a type of non-probability sampling method where the sample is taken from a group
of people easy to contact or to reach.

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4.11 Contact Method:

Questionnaire Survey method

4.12 Research Instrument

✓ Questionnaire with structure question.
✓ Microsoft word
✓ Microsoft Excel.

4.13Hypothesis analysis

In statistical analysis, we have to make decisions about the hypothesis. These decisions
include deciding if we should accept the null hypothesis or if we should reject the null
hypothesis. Every test in hypothesis testing produces the significance value for that particular
test. In Hypothesis testing, if the significance value of the test is greater than the
predetermined significance level, then we accept the null hypothesis. If the significance value
is less than the predetermined value, then we should reject the null hypothesis

4.14Hypothesis scale

Table 12: Hypothesis scale

Opinion Weighted

Strongly Disagree 1

Disagree 2

Neutral 3

Agree 4

Strongly Agree 5

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4.15Hypothesis analysis for AIBL

Table 13: Hypothesis analysis for AIBL

Independent Variable Dependent Variable

Fluctuation of interest rate

Due date of repayment

Inefficient Management Non Performing Investment

Illiterate Debtor

Communication gap with borrower

4.15.1 Hypothesis Development

1.HA: Fluctuation of interest rate affects Non Performing Investment

HO: Fluctuation of interest rate does not affect Non Performing Investment

2.HA: Due date of repayment affects Non Performing Investment

HO: Due date of repayment does not affect Non Performing Investment

3.HA: Inefficient Management affects Non Performing Investment

HO: Inefficient Management does not affect Non Performing Investment

4. HA: Illiterate Debtor affects Non Performing Investment

HO: Illiterate Debtor does not affect Non Performing Investment

5. HA: Communication gap with borrower affects Non Performing Investment

HO: Communication gap with borrower does not affect Non Performing Investment

38 | P a g e
4.15.2 Hypothesis Testing

Table 14: Hypothesis Testing

Likert Scale H1 H2 H3 H4 H5

Strongly Disagree 3 0 0 6 1

Disagree 5 2 2 7 4

Neutral 7 5 5 4 5

Agree 8 15 8 6 8

Strongly Disagree 6 7 14 6 11

Total Respondents 29 29 29 29 29

Total Weight 15 15 15 15 15

Average 3.36 3.96 4.46 3.03 3.86

Standard Deviation 1.27 0.83 0.97 1.46 1.17

T-test value 1.5 6.4 8.58 0.11 4.09

Result Null Alternative Alternative Null Alternative

Hypothesis is Hypothesis is Hypothesis is Hypothesis Hypothesis
Accepted Accepted Accepted is Accepted is Accepted

4.15.3 Statistical Test and Hypothesis Analysis

4.15.3.1 Hypothesis 1

HO: Fluctuation of interest rate does not affect Non Performing Investment

HA: Fluctuation of interest rate affects Non Performing Investment

HO: 𝜇 =3
HA : ≠ 3

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n = 29

Average = 3.36

Variance = 1.63

Standard Deviation = 1.27

T-cal=(𝑋 ̅ − 𝜇)/(𝑆/√𝑛)

= (3.36 − 3)/(1.27/√29)

= 1.5

Critical value:

Critical Value at 5% level of significance is T(tab) 0.05=2.120

Decision:At 5% level of significance, the value of T in T- distribution table is 0.05 = 2.120

and the calculated value is T-cal = 1.50 which is within the acceptable region. Here the Null
hypothesis is accepted because T-cal< T (tab). So at 5% level of significance, it can be said
that, Fluctuation of interest rate does not affect Non-performing Investment

Hypothesis 1

10%
24%
16%
Strongly Disagree
Disagree
Neutral
26% 24% Agree
Strongly Agree

Figure 11: hypothesis 1

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4.15.3.2 Hypothesis 2

HO: Due date of repayment does not affect Non Performing Investment

HA: Due date of repayment affects Non Performing Investment

HO: 𝜇 =3
HA : ≠ 3

n = 29

Average = 3.96

Variance = 0.69

Standard Deviation = 0.83

T-cal=(𝑋 ̅ − 𝜇)/(𝑆/√𝑛)

= (3.96 − 3)/(0.83 /√29)

= 6.40

Critical value:

Critical Value at 5% level of significance is T(tab) 0.05=2.120

Decision:At5% level of significance, the value of TinT-distribution tableis0.05=2.120 and

the calculated value is T-cal = 6.40 which is not within the acceptable region. Here the Null
hypothesis is reject and alternative hypothesis is accepted because T-cal>T (tab). So at 5%
level of significance, it can be said that, Due date of repayment affects Non Performing
Investment.

41 | P a g e
 Hypothesis 2
0%
6%
27% 17%
Strongly Disagree
Disagree
Neutral
Agree
50% Strongly Agree

Figure 12; hypothesis 2

4.15.3.3 Hypothesis 3

HO: Inefficient Management does not affect Non Performing Investment

HA: Inefficient Management affects Non Performing Investment

HO: 𝜇 =3
HA : ≠ 3

n = 29

Average = 4.46

Variance = 0.96

Standard Deviation = 0.97

T-cal=(𝑋 ̅ − 𝜇)/(𝑆/√𝑛)

=(4.46 − 3)/(0.97/√29)

= 8.58

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Critical value:

Critical Value at 5% level of significance is T(tab) 0.05=2.120

Decision:At5% level of significance the value of TinT distribution tableis0.05=2.120 and the
calculated value is T-cal = 8.58 which is not within the acceptable region. Here the Null
hypothesis is reject and alternative hypothesis is accepted because T-cal>T (tab). So at 5%
level of significance, it can be said that, Inefficient Management affects Non Performing
Investment.

Hypothesis 3
0%
6%
17%
Strongly Disagree
50%
Disagree
Neutral
27% Agree
Strongly Agree

Figure 13: Hypothesis 3

4.15.3.4 Hypothesis 4

HO: Illiterate Debtor does not affect Non Performing Investment

HA: Illiterate Debtor affects Non Performing Investment

HO: 𝜇 =3
HA : ≠ 3

n = 29

Average = 3.03

43 | P a g e
Variance = 2.16

Standard Deviation = 1.46

T-cal=(𝑋 ̅ − 𝜇)/(𝑆/√𝑛)

=(3.03 − 3)/(1.46/√29)

= 0.11

Critical value:

Critical Value at 5% level of significance is T(tab) 0.05=2.120

Decision:At5% level of significance, the value of TInT-distribution tableis0.05=2.120 and

the calculated value is T-cal = 8.58 which is within the acceptable region. Here the Null
hypothesis is accepted because T-cal<T (tab). So at 5% level of significance, it can be said
that, Illiterate Debtor does not affect Non Performing Investment.

Hypothesis 4

23% 20%

Strongly Disagree
Disagree
20% 24% Neutral
Agree
13% Strongly Agree

Figure 14: hypothesis 4

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4.15.3.5 Hypothesis 5

HO: Communication gap with borrower does not affect Non Performing Investment

HA: Communication gap with borrower affects Non Performing Investment

HO: 𝜇 =3
HA : ≠ 3

n = 29

Average = 3.86

Variance = 1.38

Standard Deviation = 1.17

T-cal=(𝑋 ̅ − 𝜇)/(𝑆/√𝑛)

=(3.86 − 3)/(1.17/√29)

= 4.09

Critical value:

Critical Value at 5% level of significance is T(tab) 0.05=2.120

Decision:At5% level of significance, the value of TinT-distribution tableis0.05=2.120 and

the calculated value is T-cal = 4.09 which is within the acceptable region. Here the Null
hypothesis is accepted because T-cal>T (tab). So at 5% level of significance, it can be said
that, Communication gap with borrower affects Non Performing Investment.

45 | P a g e
 Hypothesis 5
3%

11%
42% Strogly Disagree
17%
Disagree
Neutral
Agree
27%
Strongly Agree

Figure 15: Hypothesis 5

4.16 Findings

H1: In this hypothesis 16% of respondent are disagreed, 10% are strongly disagreed, 24%
respondents are strongly agreed and 26% are agreed, 24% are neither agreed nor disagreed.
So we can say that, fluctuation of interest rate does not affect Non-performing Investment.

H2: In this hypothesis 6% of respondent are disagreed, 0% are strongly disagreed, 27%
respondents are strongly agreed and 50% are agreed, 17% are neither agreed nor disagreed.
So we can say that, maturity of loan does not affect Non- performing Investment.

H3: In this hypothesis 6% of respondent are disagreed, 0% are strongly disagreed, 50%
respondents are strongly agreed and 27% are agreed, 17% are neither agreed nor disagreed.
So we can say that, monitoring Problem affect Non- performing Investment.

H4: In this hypothesis 24% of respondent are disagreed, 20% are strongly disagreed, 23%
respondents are strongly agreed and 20% are agreed, 13% are neither agreed nor disagreed.
So we can say that, inefficient Management affect Non- performing Investment.

H5: In this hypothesis 11% of respondent are disagreed, 3% are strongly disagreed,
42%respondents are strongly agreed and 27% are agreed, 17% are neither agreed nor
disagreed. So we can say that, fund Diversion does not increase Non- performing Investment.

46 | P a g e
4.17 Recommendation

• Maximum customers think that invest rate is the factor of non-performing investment.
But fluctuation of interest rate does not affect non performing investment. So, AIBL
should grant loan for customers, without any investment rate problem
• Inefficient Management affect Non- performing Investment. So AIBL should recruit
active and efficient management team for decrease the rate of non-performing
investment, and reduce this problem consequences.
• Illiterate Debtor does not affect Non- performing Investment. So AIBL should
investment of business, but sometimes these illiterate debtor does not understand
about this investment and create some problems, so bank should be careful about this
factor.

4.18 Conclusion
Banking sector of Bangladesh is characterized by low profitability and inadequate capital
base because lacking of adequate controlling and there are many banks in Bangladesh. Banks
revenue comes from spread (Lending rate – borrowing rate).However, there is huge
competition among banks. The crux of the problem lies in the ignorance of borrower and
diversion of investment of non-performing investments over a long period. We have had a
two-decade long experience in dealing with the NPIs problem and much is known about the
causes and remedies of the problem. Al- Arafah Islami Bank Limited is the second largest
Islamic banks in Bangladesh.

That is why it has to provide huge Investments and advances rather others. It is expected that
the bank generates much profit relative to others Islamic banks. Nevertheless, due to Al-
Arafah Islami Bank Limited has been experiencing a loss from the very beginning.

The study reveals the dissatisfactory performance of Al- Arafah Islami Bank Limited. This
happens because of the unusual practice of the laws, rules and regulations, some types of
courts like Money loan Court

47 | P a g e
Chapter 5: Appendix Part

48 | P a g e
5.1 References

1.Al-arafah Islami Bank Limited, Annual Report.( 2015).Retrieved JAN14 2021 From

https://www.al-arafahbank.com/AIBL-Annual-Report-15-Big.pdf

2. Al-arafah Islami Bank Limited, Annual Report.( 2016) .Retrieved JAN16 2021 From

https://www.al-arafahbank.com/AIBL_AR_2016.pdf

3. Al-arafah Islami Bank Limited, Annual Report.( 2017) .Retrieved JAN 22 2021 From
https://www.al-arafahbank.com/AIBL%20Annual%20Report-2017.pdf

4. Al-arafah Islami Bank Limited, Annual Report.( 2018) .Retrieved Feb 12 2021 From

https://islamicmarkets.com/publications/al-arafah-islami-bank-annual-report-2018

5. Al-arafah Islami Bank Limited, Annual Report.( 2019) .Retrieved Feb 22 2021 From

https://www.al-arafahbank.com/agm-contain-2020/1_Annual_Report-2019_18-08-2020.pdf

6.Saba, I., Kouser, R., & Azeem, M. (2012). Determinants of Non-Performing Loans: Case of
US Banking Sector. The Romanian Economic Journal, Year XV, 44.

7.Kumar, M., and J. Woo. (2010). “Public Debt and Growth.” Working Paper 10/174,
International Monetary Fund, Washington.

8.Louzis, D. P., Vouldis, A. T., & Metaxas, V. L. (2012). Macroeconomic and bank-specific
determinants of nonperforming loans in Greece: A comparative study of mortgage, business
and consumer loan portfolios. Journal of Banking & Finance, 36(4), 1012-1027.

9.Greenidge, K. and Grosvenor, T. (2010). Forecasting non-performing loans in Barbados.

Journal of Business, Finance and Economics in Emerging Economies, 5, 80-107

10.Makri, V., Tsagkanos, A., &Bellas, A. (2014). Determinants of non-performing loans: The
case of Eurozone. Panoeconomicus, 61(2), 193-206

49 | P a g e
5.2Appendix:

Questionnaire Survey:

Dear Sir/Madam,

I am Sabbir Khan Riad, student of IUBAT University (International University of

Agriculture and Technology). My program is BBA (Major in Finance). I am doing my
internship in Al-arafah Islami bank Ltd, in Mymensingh Branch, which is part of my
practicum where my topic is“Evaluation Of Non- Performing Investment: A Study On
Al Arafah Islami Bank Limited, Mymensingh branch” I need your co-operation for
fulfillment of my report. Please rank the level of satisfaction regarding the duration and rules
and regulations of the Following:

(Please rate the following questions at the scale of 1 to 5)

Name: -----------------------------------------------------

Age: 21-30 31-40 41-50 51- 60 61-70

Sex: Male Female

(Please tick marks as your desired answer)

1) Fluctuation of interest rate affects Non Performing Investment

Strongly Disagree

Disagree

Either Agree or Disagree

Agree

Strongly Agree

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2) Due date of repayment affects Non Performing Investment

Strongly Disagree

Disagree

Either Agree or Disagree

Agree

Strongly Agree

3) Inefficient Management affects Non Performing Investment

Strongly Disagree

Disagree

Either Agree or Disagree

Agree

Strongly Agree

4) Illiterate Debtor affects Non Performing Investment

Strongly Disagree

Disagree

Either Agree or Disagree

Agree

Strongly Agree

5) Communication gap with borrower affects Non Performing Investment

Strongly Disagree

Disagree

Either Agree or Disagree

Agree

Strongly Agree

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Picture 1: My intern Certificate

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