Chapter: 01

Introduction

1 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Introduction

1.1 Introduction:

In modern age foreign remittance is a buzz word for all developing countries. Because it
is just not a part of the income of nations, it is a power which developments run
smoothly. Without remittance developments never are imagined by any developing
countries. Because inflow of remittance not only ensures development but also ensure
the reduction of poverty. Now-a-days remittance has kept the economy of Bangladesh
more dynamic.

The main source of our national income are foreign direct investment, foreign loans and
grants and foreign remittance which are earned by working labors in abroad and
exporting goods in foreign countries. We received remittance from different developed
countries that have positive role on the socio-economic development of our country.

The survey of current foreign remittance in Bangladesh reveals the fact that it requires
rapid modification and adaption to keep harmony with the world economy business.
Foreign Remittance opens up some other salient aspects such as increased foreign trade
and foreign investment. It becomes more obvious by observing the increased number of
customs in some modern banks while others losing them.

In the context of Bangladesh, a country of more than 140 million people, it is to realize
that there is no other opinion for us than to join the current trend. Otherwise it is almost
impossible to bring any sort of fruitful achievement for the country.

Internship is a part of the BBA program of the department of Business Administration of

Metro University. Here, one report is necessary to justify our work in internship. The
department assigned the report. The titled of the report is Foreign Remittance of
Activities Al-Arafah Islami Bank Ltd. A Study on Laldighirpar Branch.

2 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

1.2 Origin of the Study:

Remittances are playing an increasing large role in the economies of many countries,
contributing to economic growth and to live livelihoods of needy people (though
generally not the poorest of the poor). As remittance receives often have a higher
propensity to own a bank account, remittances promote access to financial services for
the sender and recipient, an essential aspect of leveraging remittances to promote
economic development. Foreign remittance is the latest banking technology and the most
rapidly diffused banking technology throughout the world.

Now, in a world, which is becoming increasingly open as a result of the internet, Foreign
Remittance has been gaining ground around the globe. This offers banking institution a
new frontier of opportunities and challenges, the government of Bangladesh provided the
legal framework for domestic to offer the online banking services. After study in this
area I have got the overall scenario of the countrys foreign remittance and the obstacles
on the way of ramification. This study enhances my experience about foreign remittance
in Bangladesh which will help in my future career or life. It is hoped that the study will
be able to contribute greatly to the literature of foreign remittance into Bangladesh. The
identification of major problems and assertive recommendations will have much effect in
the policy formulations of Al-Arafah Islami Bank authority as well as banking sector of
our country.

1.3 Objective of the Study:

The main objective of this study is to examine the present scenario of remittance in Al-
Arafah Islami Bank Ltd. The objectives of the Study are listed below:

To explore the flow of foreign remittance into Bangladesh

To highlight the impact of foreign remittance into the bank.
To know the problems of foreign remittance.
To provide suggestion for solving these problems.
To be familiar with the remittance payment system

3 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 To attain the broad objective following specific objectives were pursed:
To make a perfect knowledge about remittance policy of Bangladesh
To determine the satisfaction level of remittance with the present condition
To get the idea about the function of all international countries remittance
system
To know the rules and regulation related with remittance
To examine the way to overcome the remedy related with remittance transfer
process
To examine the earnings of remittance compared to total earning in different
sectors
To know the future prospects of remittance all over the world
To know about the nature of remittance in different countries
To compare remittance inflows and outflows of one countrys with the other
countries
To know present condition of remittance in Bangladesh
To understand the need of remittance utilization in perspective of Bangladesh
To understand the macroeconomic determinants of remittance
Providing a snapshot of channel, trend and pattern of remittance in Bangladesh.

1.4 Scope of the Study:

The study covers the Al-Arafah Islami Bank Ltd. Laldighirpar Branch Sylhet. As we
know, the Al-Arafah Islami Bank Ltd is one of the first generation banks in
Bangladesh. The scope of the study is especially quiet wide as this report has covered the
banking activities that Laldighirpar Branch performs such as account opening, cash,
clearing or transfer transaction, Investment, export and import and so on. Moreover, the
report emphasizes on foreign remittance activities of Al-Arafah Islami Bank Ltd.
Laldighirpar Branch. After getting knowledge about these activities an analysis is made
on the findings. This substance presented in this study may not be applicable outside
AIBL of Bangladesh and will not be used anywhere except department of Business
Administration, Metropolitan University of Bangladesh.

4 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

1.5 Methodology:

Methodology is an important part of the study. It is designed in such a way so that it

correspondent to achieve objectives of the study. The data used to prepare this report has
been collected from both primary source that has been collected formal and interviews
and secondary source that has been collected from annual reports, articles and online
which together provide more comprehensive information.

I have collected by interviewing five officers and one manager of Al-Arafah Islami
Bank Ltd. Laldighirpar Branch on the basis of open end questions. And I have tried to
get the full view of Al-Arafah Islami Bank Ltd rural development scheme Laldighirpar
Branch. I have conducted with 25 customers. I asked them some informal and open end
questions. From the information given by the employees and customers of the bank, and
from my personal observations and judgment I have developed some findings and
recommendations on Al-Arafah Islami Bank Ltd Laldighirpar Branch.

During the time of prepare this report I was able to gather the necessary information and
data in both of two sources.

Sources are

1. Primary and

2. Secondary

These are shown elaborately

1. Primary Sources of data:

Face to face conversation with the bank officers & staffs.

Worked with every employee.
Conversation with the clients.

2. Secondary Sources of data:

Manual of the Al-Arafah Islami Bank Ltd.

Files and documents of the branch.
Annual reports of Al-Arafah Islami Bank Ltd.
Different papers of Al-Arafah Islami Bank.
Bangladesh Bank Guidelines.
Different reference books of the library, journals, websites.

5 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

1.6 Limitations of the Study:

As I am an internee of Al-Arafah Islami Bank Ltd Laldighirpar Branch, So it is a legal

binding on my part to be abided by the strict confidentiality policy of the bank. However,
during the study period I have tried my best to collect all necessary information the
report properly. The study is great importance and requires huge work. To conduct this
study I had to face some limitation these are as follows:
The study is confined to the Al-Arafah Islami Bank Ltd Laldighirpar Branch.
As I am newcomer, there is a lack of previous experience in this time.
Some essential data could not be gathered because of confidentiality concerns.
In many cases, up to date data information is not published.
I faced lots of some problems in preparing the report.
Time frame for the report was very limited. The report was done with three
month.
Sometime the officers of AIBL were very busy. For that reason the officers did
not co-operate me.
Another limitation of this report is Banks policy of not disclosing some data and
information for obvious reason, which could be very much helpful.
Lack availability of sufficient data.

6 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Chapter: 02
Banking Industry of Bangladesh

7 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Banking Industry of Bangladesh

2.1 Definition of Bank:

The Jews in Jerusalem introduced a kind of banking in the form of money lending before
the birth of Christ. The word Bank was probably derived from the word bench as
during ancient time Jews used to do money -lending business sitting on long benches.
First modern banking was introduced in 1668 in Stockholm as Savings Pis Bank which
opened up a new era of banking activities throughout the European Mainland.
In the South Asian region, early banking system was introduced by the Afghan traders
popularly known as Kabuliwallas. Muslim businessmen from Kabul, Afghanistan came
to India and started money lending business in exchange of interest sometime in 1312
A.D. They were known as Kabuliwallas

Banks have influenced economies and politics for centuries. Historically, the primary
purpose of a bank was to provide loans to trading companies. Banks provided funds to
allow businesses to purchase inventory, and collected those funds back with interest
when the goods were sold. For centuries, the banking industry only dealt with
businesses, not consumers. Banking services have expanded to include services directed
at individuals, and risk in these much smaller transactions are pooled.

The name bank derives from the Italian word banco desk/bench, used during the
Renaissance by Florentines bankers, who used to make their transactions above a desk
covered by a green tablecloth. However, there are traces of banking activity even in
ancient times. In fact, the word traces its origins back to the Ancient Roman Empire,
where moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu, from which the words banco and bank are
derived. As a moneychanger, the merchant at the bancu did not so much invest money as
merely convert the foreign currency into the only legal tender in Romethat of the
Imperial Mint.

2.2 Definition of Banker:

A banker is responsible for establishing and maintaining positive customer

relationships, planning and delivering effective sales strategies and monitoring the

8 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

progress of new and existing financial products. Bankers may work as managers
in high street branches providing operational support on a day-to day basis, or in
more specialized posts in corporate or commercial departments at area, regional or head
offices.

2.3 Definition of Banking:

Banking is the process through which an institution, most often owned by the
government, Provides financial services. They include collecting deposits, landing
money and issuing debit and credit cards. Banking is the process of performing the
activities of a Bank.

2.4 Law of Banking:

Banking law is based on a contractual analysis of the relationship between the bank and
the customer. The definition of bank is given above, and the definition of customer is
any person for whom the bank agrees to conduct an account.

The law implies rights and obligations into this relationship as follows:

The bank account balance is the financial position between the bank and the
customer, when the account is in credit, the bank owes the balance to the
customer, when the account is overdrawn, and the customer owes the balance to
the bank.
The bank engages to pay the customers cheques up to the amount standing to the
credit of the customers account, plus any agreed overdraft limit.
The bank may not pay from the customers account without a mandate from the
customer, e.g. a cheque drawn by the customer.
The bank engages to promptly collect the cheques deposited to the customers
account as the customers agent, and to credit the proceeds to the customers
account.
Right to combine the customers accounts, since each account is just an aspect of
the same credit relationship.
The bank has a lien on cheques deposited to the customers account, to the extent
that the customer is indebted to the bank.

9 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 The bank must not disclose the details of the transactions going through the
customers account unless the customer consents, there is a public duty to
disclose, the banks interests require it, or under compulsion of law.

2.5 Banking in Bangladeshi Perspective:

Banking is the backbone of the national economy. All sorts of economic & financial
activities revolve round the axis of the bank. As the industry produces goods &
commodities, so does the banks create & control the money market & promotes the
formation of the capital. From the point of view banking a technical profession can be
termed as industry. Services to its customers are the products of the banking industry
besides being a pivotal factor in promoting capital formation in the country. As all
economic & fiscal activities revolve round this important industry, the role of banking
can hardly be over emphasized.

Circumstances being such, it becomes imperative to find out the role of banks now
playing in the country & analyze its operational aspects so as to ascertain the importance
of this fragile financial sector & its overall impact on the national economy. To do this a
thorough study as to its distribution, expansion & contribution is essential to
comprehend its past, present & future bearings for the growth & development of the
banking sector of the country.

In global context, the role of banks is far reaching & more penetrating in the economic &
fiscal discipline, trade, commerce, industry, export & import et5c all are carried through
the banks. Banks are the only media through which the international trade & commerce
are being carried out .Moreover the entire credit transaction, both national &
international is done through the banks.

2.6 Features of a Bank:

The features of a bank are given below:-

Bank is a financial institution which deals with other peoples money i.e. money given
by depositors.

A bank accepts money from the people in the form of deposits which are usually
repayable on demand or after the expiry of a fixed period.

10 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

A bank provides easy payment and withdrawal facility to its customers in the form of
cheques and drafts.

A bank works as an agent for its customer and provides utility services.

Banks make loans to consumers, businesses and organizations. Loans represent fund that
are extended by the bank to the creditor who agrees to pay the fund back, with interest,
over a specified time period.

Banks are operated with the objective of making a profit. Their fee structure and interest
rate is designed with the intention of making money for owners and shareholders.

A bank acts as a connecting link between borrowers and lenders of money. Bank collects
money from those who have surplus money and give to those who are in need of money.

2.7. Functions of a Bank:

The function of Bank can be categorized into the following categories:-

Figure: function of Bank

2.8 History of banking industry in Bangladesh:

After independence the government of People s Republic of Bangladesh was formally

to cover The charge of administration of the territory now constitute Bangladesh. In an

11 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

attempt to rehabilitate the war-devastated banking of Bangladesh, the government
promulgated a law called Bangladesh Bank (temporary order, 1971 (Acting presidents
order No.2 of 1971). By This order, the state bank of Pakistan was declared to be
deemed as offices, branches and Assets of Bangladesh Bank. On that date there existed
14 scheduled banks with about 3042 branches all over the country.

After the independence, banking industry in Bangladesh started its journey with 6
nationalized commercialized Banks, 2 State owned specialized Banks and 3 Foreign
Banks. In the 1980s Banking Industry achieved significant expansion with the entrance
of Private Banks.Now ,Banks in Bangladesh are primarily of two types:

Scheduled Banks
Non- Scheduled Banks
Scheduled Banks:

The banks which get license to operate under Bank Company Act, 1991 (Amended in
2003) are Termed as Scheduled Banks. Banks which are included in the list of central
Banks are termed as Scheduled Banks.

Non- Scheduled Banks:

The banks which are established for special and definite objective and operate under the
acts that are enacted for meeting up those objectives, are termed as Non-scheduled
Banks. These Banks cannot perform all functions of scheduled Banks

2.9 History of Islami Bank in Bangladesh:

Establishment of Islamic Development Bank (IDB) by the OIC member states in the year
1975 has been proved to be a breakthrough in the expansion of Islamic Shariah based
finance and specially banking throughout the world. As a founder member of IDB, the
Government of Bangladesh also had the commitment to establish Islamic banks which
was reflected in different steps taken by the governments of the country. The OIC
members consented to the proposals to introduce Islamic economy and banking in their
respective countries held in the foreign ministers conferences in 1978 and 1980 in
Dakar and Islamabad respectively. In the year 1981, OIC in its 3rd summit held in
Makkah approved the proposition submitted by Bangladesh to introduce separate
banking system following Islamic ideology. As per decision, the GOB sent

12 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

representatives to the Middle Eastern countries to learn the existing banking systems in
those countries.
In the private sector, the Islamic Economics Research Bureau (IERB) was the first
organization that took active initiative in this regard. They arranged a national seminar
on Islamic Economics and Banking in the year 1979 and inspired by the discussion and
the papers presented in the seminars, some local bankers formed Islami Bank Working
Group. The IERB again arranged an international seminar in 1980. After the seminar,
Dhaka based Muslim Businessman Society (later renamed as Industrialist and
Businessmen Association) under the leadership of renowned industrialist Abdur
Razzaque Lasker, took initiative to establish an Islamic bank and applied to the
government for permission. At this stage, the GOB provided necessary permission in the
year 1983 and at last Islami Bank Bangladesh was registered under Company Act in
which 19 Bangladeshi national, 4 Bangladeshi institutions and 11 banks, financial
institutions and government bodies of the Middle East and Europe including IDB and
two eminent personalities of the Kingdom of Saudi Arabia joined hands to make the
dream a reality.
In that way, AL Arafah Islami Bank Ltd was established (registered) as a private limited
company on 18 June 1995. The inaugural ceremony took place on 27 September 1995.

2.10 Banks of Bangladesh at a glance:

1. Central Bank

2. State-owned commercial Banks

3. Private commercial Banks

4. Specialized Banks

a) schedule specialized Banks

b) Non- Scheduled Specialized Banks
c) Micro-Finance Organizations ( Semi formal)
d) Co-Operative Banks

5. Non-Banking Financial institutions

a) merchant Banking companies

13 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 b) .housing development finance companies
c) Stock Exchange
d) Insurance Companies

6. Other banks:

a. Retail Bank
b. Unit Bank
c. Branch Bank
d. chain Banking
e. group Banking

2.10.1. Central Bank:

The central bank is the organ of the government that performs the major financial
operations Of the government, monitors and controls the functions of commercial Bank
for the economic Development of a country. every country of the world has a central
bank. according to the pursuant to Bangladesh Bank Order-1972, the Government of
Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central
bank of the country, and named it Bangladesh Bank with rerespective effect from 16
December 1971.

2.10.2. State-owned Commercial Banks:

State owned Banks are functioning as nationalist. Among the state owned Banks, six
are Commercial and two are specialized. Here is the list:

State-owned Commercial Banks:

1. Sonali Bank Limited

2. Janata Bank Limited
3. Agrani Bank Limited
4. Rupali Bank Limited
5. Basic Bank Limited

Bangladesh Development Bank Limited

14 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

2.10.3. Private commercial Banks:

1. AB Bank Limited

2. Bangladesh Commerce Bank Limited

3. Bank Asia Limited

4 .BRAC Bank Limited

5. City Bank Limited

6. Dhaka Bank Limited

7. Dutch Bangla Bank Limited

8. Eastern Bank Limited

9. IFIC Bank Limited

10. Jamuna Bank Limited

11.meghna Bank Limited

12.Mercantile Bank Limited

13. Midland Bank Limited

14. Modhumoti Bank Limited

15. Mutual Trust Bank Limited

16. National Bank limited

17. NCC Bank Limited

18. NRB Bank Limited

19.NRB Commercial Bank Limited

20. NRB Global Bank Limited

21. One Bank Limited

22. Premier Bank Limited

15 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

23. Prime Bank Limited

24. Pubali Bank Limited

25. South Bangla Agriculture and commerce Bank Limited

26. Southeast Bank Limited

27. Standard Bank Limited

28. The Farmers Bank Limited

29. Trust Bank Bangladesh Limited

30. United Commercial Bank Limited

31. Uttara Bank Limited

Islamic Commercial Banks in Bangladesh:

There are eight Islamic Commercial Banks currently operating in Bangladesh. These
are:

1. Islami Bank Bangladesh Limited

2. Al- Arafah Islami Bank Limited
3. Export import Bank of Bangladesh Limited
4. Social Islami Bank limited
5. Shahjalal Islami Bank Limited
6. First security islami Bank Limited
7. Union Bank Limited
8. ICB Islamic Bank Limited

Foreign Commercial Banks:

There are nine foreign commercial Banks currently operating in Bangladesh. These are:

1. Bank AL-Falah Limited

2. City Bank NA
3. commercial Bank of Ceylon
4. Habib Bank Limited

16 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 5. HSBC (The Hong Kong and Shanghai Banking Corporation Ltd)
6. National Bank of Pakistan
7. Standard Charted bank
8. State Bank of India
9. Woori Bank

2.11. Non-Banking Financial Institutions:

1. Agrani SME Financing Company Limited

2. Bangladesh Finance and Investment Company Limited

3. Bangladesh Industrial Finance Company Limited

4. Bangladesh Infrastructure Finance Fund Limited

5. Bay Leasing And Investment Limited

6. CAPM Venture Capital and Finance Limited

7.Delta Brac Housing Finance Corporation Limited

8.Far-east Finance & investment Limited

9. FAS finance & Investment Limited

10. First Finance Limited

11. GSP Finance Company (Bangladesh) Limited

12.Hajj Finance Company Limited

13. IDLC Finance Limited

14. Industrial and Infrastructure Development Finance Company Limited

15. Industrial Promotion and development Company of Bangladesh Limited

16. Infrastructure Development Company Limited

17. International Leasing and Financial Services Limited

18. Islamic Finance and investment Limited

17 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

19. Lanka Bangla Finance Limited

20. Meridian Finance and Investment Limited

21. MIDAS Financing Limited

22. National Finance Limited

18 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Chapter: 03
Overview of Al-Arafah Islami Bank Limited

19 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Overview of Al-Arafah Islami Bank Limited
3.1 Background of Al-Arafah Islami Bank Limited:
With the objective of achieving success here & hereafter by pursuing the way directed
by Allah and the path shown by His Rasul (SM), Al Arafah Islami Bank Ltd was
established (registered) as a private limited company on 18 June 1995. The inaugural
ceremony took place on 27 September 1995. The authorized capital of the Bank is
Tk.5000.00 million and the paid up capital is Tk. 5677.28 million as on 31.12.2016.
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. The equity of
the bank stood at Tk. 10247.45 million as on 31 December 2016, the manpower was
1719 and the number of shareholders was 53,386. It has achieved a continuous profit and
declared a good dividend over the years. High quality customer service through the
integration of modern technology and new products is the tool of the bank to achieve
success. The bank has a diverse array of carefully tailored products and services to
satisfy customer needs. The Bank is committed to contribute significantly to the national
economy. It has made a positive contribution towards the socio economic development
of the country with 78 branches of which 21 is AD throughout the country.
3.2 AIBL at a Glance:
Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be
successful both in our mortal and immortal life. Therefore in every aspect of our life we
should follow the doctrine of Al-Qur'an and lifestyle of Hazrat Muhammad (Sm.) for our
supreme success. Islami Banking System is becoming more and more attractive day by
day to peoples irrespective of nations, religious, colors and species. More than 300
Banks & financial institutions are serving Islami banking throughout the world. At
present in our country 8 fully fledged Islamic Banks are working successfully. And other
traditional banks have Islami Banking Wings conducting Shariah based banking
activities. Recent Development of Bangladesh Government Islamic Investment Bond
(BGIIB) is the milestone for shariah based banking practices in Bangladesh. Al-
ArafahIslami Bank started its journey in 1995 with the said principles in mind and to
introduce a modern banking system based on Al-Quran and Sunnah.
A group of established, dedicated and pious personalities of Bangladesh are the
architects and directors of the Bank. Among them a noted Islamic scholar, economist,
writer and ex-bureaucrat of Bangladesh government Mr. A. Z. M Shamsul Alam is the

20 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

founder chairman of the bank. His progressive leadership and continuous inspiration
provided a boost for the bank in getting a foothold in the financial market of Bangladesh.
A group of 20 dedicated and noted Islamic personalities of Bangladesh are the member
of Board of Directors of the bank. They are also noted for their business acumen. Al-
ArafahIslami Bank Ltd. has 132 branches (up to December 2016) and a total of 2849
employees (up to December 2016). Its authorized capital is Taka 16000 million and the
paid-up capital is Taka 9469.58 million as on 31 December 2016.Wisdom of the
directors, Islamic bankers and the wish of Almighty Allah make Al- Arafah Islami Bank
Ltd. most modern and a leading bank in Bangladesh.

3.3 Objectives of AIBL:

3.3.1 Primary Objectives

The primary objective of establishing Islamic Bank all over the world is to promote,
foster and develop the application of Islamic principles in the business sector. More
specifically, the objectives of Islamic bank when viewed in the context of its role in the
economy are listed as following:

To offer contemporary financial services in conformity with Islamic Shariah.

To contribute towards economic development and prosperity within the
principles of Islamic justice.
Optimum allocation of scarce financial resources and
To help ensure equitable distribution of income.

3.3.2 Strategic Objectives

To ensure customers satisfaction.

To ensure welfare oriented banking.
To establish a set of managerial succession and adopting technological changes
to ensure successful development of an Islamic Bank as a stable financial
institution.
To prioritize the clients welfare.
To ensure diversification by Sector, Size, Economic purpose & Geographical
location wise Investment and expansion need based Retail and SME/Women
entrepreneur financing.
To invest in the thrust and priority sectors of the economy.

21 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 To train and develop human resources continuously & provide adequate logistics
to satisfy customers need.
To be excellent in serving the cause of least developed community and area.
To motivate team members to take the ownership of every job.
To ensure development of devoted and satisfied human resources.
To encourage sound and pro-active future generation.
To achieve global understand.
To strengthen corporate culture.
To ensure Corporate Social Responsibilities (CSR) through all activities.

3.4 Corporate Objectives of AIBL:

All the activities of AIBL are conducted on interest-free system according to

Islamic shariah.

Investment is made through different modes permitted under Islamic Shariah.

Investment-income of the bank is shared with the Mudaraba depositors according

to a ratio to ensure a reasonably fair rate of return on their deposits.

Its aims are to introduce a welfare-Oriented Banking system and also to

established equity and justice in the field of all economic activities.

Its extends co-operation to the poor, helpless and low-income group of the people
for their economic enlistment particularly in the rural areas.

It plays a vital role in human resources development and employment-generation,

particularly for the unemployed youths.

Its aim is to achieve balanced growth and development of the country through
investment operations, particularly in the less development areas.

3.5 Vision of AIBL:

To be a pioneer in Islamic Banking in Bangladesh and contribute significantly to

the growth of the national economy.

22 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

3.6 Mission of AIBL:
Achieving the satisfaction of Almighty Allah both here & hereafter
Proliferation of Shariah Based Banking Practices
Quality financial services adopting the latest technology
Fast and efficient customer service
Maintaining high standard of business ethics
Balanced growth
Steady & competitive return on shareholders' equity
Innovative banking at a competitive price
Attract and retain quality human resources
Extending competitive compensation packages to the employees
Firm commitment to the growth of national economy
Involving more in Micro and SME financing

23 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

3.7 Organization Structure of AIBL:

Managing Director

Deputy Managing Director

Executive Vice President

Senior Vice President

Vice President

Assistant Vice President

First Assistant Vice President

Senior Principal Officer

Principal Officer

Senior Executive Officer

Professional Executive Officer

Executive Officer

Professional Officer

Probationary Assistant Officer

Officer

Trainee Officer

24 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

3.8 Schemes of AIBL:
1. Current Account
2. Mudaraba Saving Account
3. Mudaraba Term Deposit Receipt Account.

4. Short Term Deposit

5. Installment Term Deposit.

Mudaraba Kotipoti Scheme

Mudaraba Millionaire Scheme

Mudaraba Lckhpoti Scheme

6. Double Deposit Scheme.

7. Hajj Deposit Scheme

8. Small Investment Scheme.

Allah has permitted trade and forbidden interest (verse 275 of sura Al-baraka).
And as such Al-Arafah Islami Bank Limited operates with the objectives and
commitment to implement the economic and financial principles of Islam in banking
arena blending Islamic values and modern technologies with a view to achieve
complete success in this world and hereafter.

To provide quality service to our customers.

To set high standard of Integrity.

To extend our customers innovation services acquiring state-of-the-art

technology blended with Islamic principles, and bring total satisfaction to our clients
and employees. to expand Islamic banking through welfare oriented banking
system.

Ensure equity and justice in economic activities.

Extend financial assistance to poorer section of the people, and

Achieve balanced growth & equitable development.

To offer contemporary financial services in conformity with Islamic Shariah.

To contribute towards economic development and prosperity within the

principles of Islamic justice.

To facilitate efficient allocation of resources.

To help achieving stability in the economy.

25 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

3.9 Services Provided By AIBL:

The important of mobilization of savings for the economic development of our country
can hardly be over emphasized .We considered savings and deposits as lifeblood of the
bank. More the deposit, greater is the strength of the bank. The bank intends to launch
various new savings scheme with prospect of higher return duly supported by a well
orchestrated system of customer services. The bank would cater to the credit needs of
individuals as well as corporate clients. Initial it will emphasize on trade finance, which
would be short term and self-liquidating in nature. Considering the importance of foreign
trade in our national life, financing and handling of export & import business and also
handling of foreign remittance business would be given top most priority. Moreover the
bank operates all of its activities under the rules and regulation of Islamic Shariah. The
services provided by the Al-Arafah Islami Bank Ltd. Is given bellow:-

3.10 Sections and Their Functions:

There are mainly two sections in AIBL, General Banking Division Investment Division.
These Divisions have small department or units under them. The details of the important
sections and subsections are described below.

3.10.1 General Banking Division There are certain three sections working together to fulfill
the target of the company.

(A) Customer Service

(B) Cash Department

(C) Accounts Department

A. Customer Service Different functions of customer service are:

Accounts opening

Issuance of Cheque Book

Issuance of Payment Order

Issuance of T.T

Issuance of D.D

Issuance of Online Transfer

Handling transfer transaction

Operation of clearing house

executing customer standing instructions

B. Cash Department Different functions of cash department are:

26 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Receiving cash from the depositors.

Payment of cash to the client as demanded.

Checking all areas of deposit slip whether it is clearly written or not (name, account
no, amount)

Verifying the payment cheque when to pay the money to the clients whether the
information is available or not like dale, amount, account no etc.

All the received and payment money must be written down in the receipt & payment
register along with account no.

Cash register must be maintained by the Cash Officer.

Maintenance of daily cash balance.

Preparation of monthly cash balance.

C. Accounts Department Accounting of AIBL can be broadly classified in the

following two groups:

I) General Accounting

I I) Investment Accounting

I) General Accounting General Accounting includes accounting for-general and

administrative expense, funding operation and fixed assets.
Activities of accounting subsection includes:
Registration of voucher.
Posting of voucher in the ledger.
Preparation of unadjusted trial balance.
Preparation of adjustments (accrual of expenses and income).
Preparation of adjusted trial balance.
Maintenance of accounts with Bangladesh bank & other banks.
I I) Investment accounting: The Company maintains its books of account based on the
operating method of accounting according to Generally Accepted Accounting Standards in
conformity with one the provision of relevant regulations of Bangladesh Bank.

27 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Collection of receipts i.e. rental, profit
Control of collection i.e. maintains cheque register.
Reporting of information regarding rental collection i.e. cash collection
statement.
Acknowledgement to the Account holder i.e. statement of accounts.
Preparation of overdue statement i.e-overdue statement for BOD.
Activities regarding delinquent charge i.e.-billing.
Treatment of irregular investment Account.
3.11 Automated Clearing House:

Automated Clearing House (ACH) is an electronic network for financial transactions in

the United States. ACH processes large volumes of credit and debit transactions in
batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH
direct debit transfers include consumer payments on insurance premiums, mortgage
loans, and other kinds of bills. Debit transfers also include new applications such as the
point-of-purchase (POP) check conversion pilot program sponsored by NACHA-The
Electronic Payments Association. Both the government and the commercial sectors use
ACH payments. Businesses increasingly use ACH online to have customers pay, rather
than via credit or debit cards.
Cheques:
Cheques are a type of bill of exchange and were developed as a way to make payments
without the need to carry large amounts of money. While paper money evolved from
promissory notes, another form of negotiable instrument, similar to cheques in that they
were originally a written order to pay the given amount to whoever had it in their
possession (the "bearer"). Technically, a cheque is a negotiable instrument instructing a
financial institution to pay a specific amount of a specific currency from a specified
transactional account held in the drawer's name with that institution. Both the drawer and
payee may be natural persons or legal entities. Specifically, cheques are order
instruments, and are not in general payable simply to the bearer (as bearer instruments
are) but must be paid to the payee. In some countries, such as the US, the payee may
endorse the cheque, allowing them to specify a third party to whom it should be paid.

28 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

3.12 Electronic funds transfer:
Electronic funds transfer (EFT) is the electronic exchange or transfer of money from one
account to another, either within a single financial institution or across multiple institutions,
through computer-based systems. The term covers a number of different concepts:

Cardholder-initiated transactions, where a cardholder makes use of a payment card

Direct deposit payroll payments for a business to its employees, possibly via a
payroll service bureau

Direct debit payments, sometimes called electronic checks, for which a business
debits the consumer's bank accounts for payment for goods or services

Electronic bill payment in online banking, which may be delivered by EFT or paper
check

Transactions involving stored value of electronic money, possibly in a private

currency

Wire transfer via an international banking network (carries a higher fee in North
America)

Electronic Benefit Transfer

3.13 Products and Services Provided by AIBL:

AIBL
products and services

Depost Investment Foreign ATM Locker

MSME
Schemes Schemes Trade services services

Figure 2C: Products & Services of AIBL

AIBL products and services has four important types, they are:

Deposit schemes
Investment schemes
Foreign Trade (Import, Export, Remittance)

29 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 MSME (Micro,Small and Medium Enterprise)
ATM Services
Locker Services

3.14 Short Notice Deposit (SND):

Bank accepts such kind of deposit, which is withdrawal at notice of seven to Twenty
nine days, and thirty days and over with profit. The account is maintained like that of a
Mudaraba savings account.
Sundry & other deposits
Sundry & other deposits are also treated to be accept under Al-Wadia Principle.Al Arafa
Islami Bank Limited do maintain various term deposit account and deposit scheme
Hajj account deposit
Hajj deposits at monthly installment for any period from 1(one) year to 20(twenty) years
are accepted under the above scheme to enable the account holder to perform Hajj .
One Time Hajj deposit
For once time a certain amount of money can be deposited from 1(one) year to
25(twenty-five) years under the one time Hajj scheme to perform Hajj at the maturity
period.
Installment Term Deposit (ITD)
According to Mudaraba rules this deposit is accepted. The main attraction is its profit is
calculated on daily deposited amount. Under this scheme a form has to be filled. One
parson can have more than one ITD account in same branch Its sustain for:
The schemes of Mudaraba Milliner Deposit Scheme (MMDS) accounts are:

Name of Scheme Maturity Monthly Receivable

Periods Installment Amount

MMDS 3 years 23950.00 10.00(Lac)

4 years 16950.00 10.00(Lac)

5 years 12750.00 10.00(Lac)

6 years 9950.00 10.00(Lac)

7 years 8000.00 10.00(Lac)

10 years 4600.00 10.00(Lac)

12 years 3345.00 10.00(Lac)

15 years 2170.00 10.00(Lac)

20 years 1150.00 10.00(Lac)

30 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Mudaraba Lakhopoti Deposit Scheme (MLDS) account are:

Name of Scheme Maturity Periods Monthly Installment Receivable

Amount

MLDS 3 years 2375.00 1.00(Lac)

5 years 1275.00 1.00(Lac)

8years 670.00 1.00(Lac)

10 years 460.00 1.00(Lac)

12 years 335.00 1.00(Lac)

Mudaraba Term Deposit (MTDR)

Multiple of 1.00 Lac & over in multiples of that are accepted for 3or 5 years and the
bank give profit of Tk.969for each month on per Lac and rest amount are adjusted with
deposit. There are several type of deposit is known as Mudaraba Term Deposit They
have also Mudaraba Kotipoti Deposit Scheme and Mudaraba Double Deposit Scheme of
various periodic.

31 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Under AIBL Products and Services Islami Bank Bangladesh Ltd. has below
categories:

Deposit Investment
Schemes Schemes

Al Wadiah Current Deposit (CD)

Investment in Agricultural Sector

Mudaraba Short Notice Deposit (SND)

Investment in Industrial Sector
Mudaraba Savings Deposit (MSD)

Mudaraba Term Deposit (MTDR) Investment in Business Sector

Monthly Profit Based Term Deposit
(PTD)
Investment in Foreign Trade
Monthly Installment Based TermDeposit
(ITD)
Al-Arafah Monthly Hajj Deposit
Investment in Construction and Housing
(MHD)
Monthly Installment Based Marriage
Savings Investment Schemes (MIS)
Investment in Transportation Sector
Al-Arafah Savings Bond (ASB)

Foreign Currency Deposit (FCD) Hire Purchase (HPSM)

Pension Deposit Scheme (PDS)

Investment Schemes in Masque and
Mudaraba Lakhpoti Deposit Scheme Madrasa (MMIS)
(LDS)
Mudaraba Millionaire Deposit Scheme Village and Small Investment Schemes
(MDS) (GSIS)
Mudaraba (Special) Pension Deposit
Scheme (MSPDS) Small Enterprise Investment Schemes
Mudaraba Kotipoti Deposit Scheme (SEIS)
(MKDS)
Mudaraba Double Benefit Deposit Scheme Consumer Investment Schemes (CIS)
(MDBDS)

Figure 2D: Deposit Schemes & Investment Schemes of AIBL

32 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Chapter: 04
Foreign Remittance Activities of AIBL

33 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Foreign Remittance Activities of AIBL
4.1 Definition of Foreign Remittance:
A remittance is a transfer of money by a foreign worker to an individual in his or her
home country. Money sent home by migrants competes with international aid s one of
the largest financial inflows to developing countries. Foreign remittance can be defined
as the purchase and sale of freely convertible foreign currencies as admissible under
exchange control regulations of the country. A looser translation is the sending of the
money home while working in a foreign country. Thousands of people are currently
working and living in a country that is not their home, and sending funds regularly back
to their families in their home country.

4.2 Meaning of Foreign Exchange:

Foreign Exchange means exchange foreign currency between two countries. If we
consider Foreign Exchange as a subject, then it means all kind of transactions related
to foreign currency. In other wards foreign exchange deals with foreign financial
transactions. H.E Evict defined Foreign Exchange as the means and methods by which
rights to wealth expressed in the currency of one country are converted into right to
wealth in terms of the currency of another country.
4.3 Bank Remittance:

When money is sending from one place to another place for the customer is another
important service of banks. In addition, this service is an important part of countrys
payment system .For this service, people; especially business persons can transfer funds
from one place to another place very quickly. There are four Kinds of techniques for
remitting money from one place to another place. These are:

1) Demand Draft (DD)

2) Telegraphic Transfer (TT)
3) Telephone Transfer (TT)
4) Pay Order (PO)

1. DD (Demand Draft):
A Demand Draft (DD) is an instrument containing an order by the issuing branch upon
another branch known as drawee branch, to pay a certain sum of money to the payee.
Commission for Demand Draft (DD) is 0.1% of the principal amount and Vat .15% of the
commission amount and telex charge is Tk. 50.00.

34 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 2. TT (Telegraphic Transfer):

Issuing branches request another branch to pay specified money to the specific payee on
demand by Telegraphic/ Telephone.

The basic three types of local remittances are discussed below:

Points Pay Order Demand Draft TT

Explanation Pay order gives the Demand draft is an Issuing branch
payee the right to order of issuing requests another
claim payment from bank on another branch to pay
the issuing bank. branch of the same specified money to
bank to pay the specified payee
specified sum of on demand by
money to payee on telegraph/ telephone.
demand.
Payment From Payment from Payment from Payment from
issuing branch only. ordered branch. ordered branch.
Generally Used to Within the clearing Outside clearing Anywhere in the
Remit Fund house area of issuing area of issuing country.
branch. branch. Payee can
also be the purchase.
Payment Process of Payment is made 1. Confirm that the 1. Confirm issuing
the Paying Bank through clearing. DD is not forged branch. 2. Confirm
one. 2. Confirm with payee A/C 3.
sent advice. 3. Confirm amount 4.
Check the Test Make payment 5.
Code 4. Make Receive advice
payment.

Charge Only commission Commission +Telex Commission

charge +Telephone.

3. Pay orders:
Are the safest way of making payments, as they are drawn on the bank issuing them. So
there is no scope of forgery. A pay order is issued only within the members of the
Bangladesh bank clearing house (Dhaka Metro). It can be issued in favor of a customer
holding an account, by debiting his account and crediting bills payable liability A/C. The
account payees submit the pay order in their specific banks. The banks then send the pay
order to the clearing house where these are received by the respecting issuing banks. The
issuing banks verify the pay order, which are then send back to the respecting banks and
payment made by debiting the payable account.

Telegraphic and Telephone Transfer (TT) are almost the same, both are them are known
as TT in short.

35 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.4 Local Remittance:

Local Remittance is another significant part of the general Banking. The bank receives and
transfers various types of bills through the remittance within the country. The bank charges
commission on the basis of bill amount.

4.5. Types of Remittance:

Between banks and non banks customer

Between banks in the same country
Between banks in the different centers.
Between banks and central bank in the same country
Between central bank of different customers.

4.6. Functions of Foreign Exchange Department:

Foreign exchange department performs many functions to facilitate the foreign exchange
transactions. These functions are:

Facilitating import trade

Facilitating export trade

Provide funded and non-funded credit facility

Maintaining foreign currency accounts

Selling of foreign currency bonds

The foreign exchange department consists of mainly two sections- L/C operations and
foreign
Remittance, which perform all the functions mentioned above.

Foreign exchange
Department

L/C operations Foreign Remittance

Import Export
operation operations Foreign Inward Outward
Current A/C Remittan Remittan
ce ce
36 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
4.7. Regulation for the foreign exchange division:

Foreign Exchange transactions are being controlled by the following rules and
regulations:

Foreign Exchange act 1047.

Bangladesh bank issues Foreign Exchange Circular from time to time to control
the export, import and remittance operation.

Ministries of commerce issues export and import policies giving basic formalities
for import and export.

Sometimes CCI issues public notices for any kind of change in Foreign Exchange
transaction.

Bangladesh bank published two volumes in 1996. These comprise the complete
instructions to be followed by the authorized dealers in transactions related to Foreign
Exchange.(Bangladesh Bank, 2012)

4.8. Types of Foreign Remittance:

In broad sense foreign remittance includes all sale and purchase of foreign currencies on
account of import, export, travel and other purpose. However specifically foreign
remittance means sale and purchase of foreign currencies for the purpose other than
export and import. There are two types of remittance:

Outward remittance
Inward remittance

Foreign
Remittance

Inward Outward
Foreign Foreign
Remittance Remittance

37 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Foreign outward remittance: The sending country, where the wage earner
islocated. The sender uses a bank or foreign exchange company to send money
toforeign country. Many of the receiving banks have established remittance
relationshipwith currency houses and banks in other countries to better facilitate
the flow ofremittances into the country.

Outward remittance may be made for following purposes-

Travel.
Medical treatment.
Education purpose.
Attending seminar.
Balance amount of F.C account.
Profit of foreign companies.
Technical assistance.
New exporters up to USD 6000/- for business promotion.
F.C. remittance can be made for fare, exhibition from export retention quota.

Foreign Inward Remittance: The receiving country where the beneficiary
resides.The bank receives the money that has been sent from the sending person
in thecountry in which the money has been earned.There is no restriction on
inward remittances by Bangladesh bank other than the prescribedformalities to be
complied with by the exporters and other recipients. The authorized dealercan
freely purchase foreign currencies.
4.9 Foreign Inward remittance and modes of inward remittance:

Inward Remittance: The remittance which enters into our country from
anothercountry. The inward remittance may be follows-
Exports Proceeds
Wages earners
Investment
Grand
Aids
UN peace keeping
Commission/Service Charges
38 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
 Fees
Tourisms
Business Development/Fair

Modes of foreign Inward Remittance

T.T-Telegraphic Transfer
M.T-Mail Transfer
D.D- Demand Draft
T.C- Travelers cheque
P.O- Pay order
Besides this, foreign inward remittance also includes remittances on account of
export,purchase of T.C, foreign currency notes and coins, Cheques issued on foreign
banks in favorsof beneficiaries in Bangladesh etc.
1. T.T: Cable or telex instruction of payment is called as Telegraphic Transfer,
where foreign bank issues a T.T in a favor of someone in Bangladesh. It credits the
amount, received from the remitter to the NOSTRO A/C of its correspondent bank on
receipt of the T.T; the paying bank in Bangladesh will make payment of the proceeds of
the T.T in foreign currency o in equivalent Bangladeshi Taka to the beneficiary.
2. M.T: M.T is an instrument issued by a remitting bank to the paying bank
advising in writing to make payment of certain amount to specific beneficiary.
3. D.D: A demand draft is negotiable instrument issued by drawn on other bank
with the instruction to pay a certain amount to the beneficiary on demand.
4. T.C: It is an instrument issued by a Banks/Companys payable to the
purchaser on presentation.
5. P.O: A payable order is written under issued by a branch of bank, to pay a
certain sum of money to specific person or bank. It may be said as to be a bankers
chequeasit issued by a bank and payable by itself.

4.10 Foreign outward remittance and modes of outward remittance:

Outward remittance-The remittance which goes out from our country to
another country, in other words the term outward Remittance means sales of
foreign exchange in any form and includes not only remittances by MT, TT,
Draft etc.

39 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Butalso sale of Travelers Cheques, Traveler Letters of credit, Foreign currency
notesetc. The outward remittance may be as follows:
Import payment
Treatment
Education
Tours
Commission/Fees/Service Charges
Business Development

Modes of foreign outward remittance

The foreign outward remittance can be of following types:
Foreign Tele-graphic Transfer (FTT)
Foreign Demand Draft (FDD)
Foreign outward bill for collection (FOBC)
The Details are as follows:
Foreign Tele-Graphic Transfer: The transfer procedure is same as for local TT.
Thecustomer either pays cash or gets his account debit. Since all the arrangements are
throughmain office. Bank sends credit advice to Head office, which gives credit to the
correspondentbank in that particular bank, ultimately giving credit to required/designed
bank and account.For ITT, Head office account is debited and credit is given to the
beneficiary account,
If beneficiary does not have account with BAL, then M-form is required to fill in
statingpurpose of remittances.
Foreign Demand Draft: FDD is also an instrument to transfer fund from one country
toanother. The customer can make payments in three modes:
Debits to foreign currency account
Foreign currency (cash)
PKR (M-form is to be filled in)
Foreign outwards bills for collection:When customer deposits foreign cheque/travels
cheques to bank Alfallah, it becomes. The banksliability to collect it and is than seen to
the bank of expected country and payment is made afterconfirmation, the foreign bill is
sent for correction first and then payment to beneficiary is made. It iscommonly
presented through clearing.

40 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.11. Remittance performance and process of AIBL:
Our 10 expatriates are a source of pride for Bangladesh. They represent us abroad by
building our image. They also spread the richness of our cultures across the globe. In that
sense, they are the ambassadors of goodwill for Bangladesh. The foreign exchange they
send home is the second largest source of much needed foreign exchange for our
economic development. In fact, if we adjust import costs against export earnings of the
garments sector which brings highest amount of foreign exchange to the national
economy, remittance will figure as the single largest source of foreign exchange for
Bangladesh.

AIBL Bank Limited is continuously striving to build its remittance business by rendering
quality services through a network of reputed banks and exchange houses around the
globe along with an extensive network in the country to deliver money to the
beneficiaries in the safest form and quickest possible time.

4.12. Features of AIBL Remittance Services:

No service charge from beneficiaries in Bangladesh
Instant Cash Withdrawal facility from any branches of Southeast Bank
Confidentiality of transactions
Instant credit to beneficiaries accounts with Southeast Bank;
Same day cash withdrawal facility from the branches of One Bank, Mutual Trust
Bank,Jamuna Bank, Al-Arafah Islami Bank, BRAC Bank, Bank Asia, Shahjalal
Islami Bank, Mercantile Bank and First Security Islami Bank
Same day cash payment facility from 600 outlets of reputed NGOs (RDRS,
Society for Social Services - SSS and Jagorani Chakra Foundation - JCF)
Direct communication with both Sender and Receiver for solving queries relating
to cash payment/account deposit (if any)
Disbursement of foreign remittance through ATM booths using My

41 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 4.13. AIBL Bank Remittance report:

Year Remittance (million taka)

2016 50,890

2015 38,433

2014 35,447

2013 30,669

2012 20,905

Table: Remittance from 2012 to 2016 (Source: AIBL Bank Limited, 2012)

4.14. Foreign Remittance collection statement of AIBL Bank Ltd. (Corporate Branch):

(In Million Taka)

Month 2013 2014 2015 2016

January 182.80 142.20 189.10 158.40

February 131.00 115.30 150.00 133.20

March 157.60 193.30 250.00 142.40

April 117.80 250.00 131.80 166.20

May 250.00 150.00 123.40 180.20

June 175.70 193.40 196.40 191.40

July 152.00 221.40 122.80 184.30

August 210.00 119.80 182.90 156.30

September 214.90 145.10 148.60 213.00

October 281.40 179.30 194.70 166.40

November 212.40 157.10 113.60 151.00

December 257.60 123.50 200.30 160.50

Total 2342.20 1990.40 2013.60 2003.30

(In Million
Taka)

42 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.15. Foreign Trade:

At the end of 2010, the total Foreign Exchange Portfolio (Import, Export & Remittances)
was TK. 92,408.40 Million showing a growth of 52.86% of this Bank in compare with
the corresponding year. The total export of the Bank was TK. 23,546.10 million in 2009,
which was increased by 36.08% to TK. 32,042.40 in 2010. Similarly, the amount of
import has increased from TK. 34,074.80 million in 2009 to TK. 55,934.10 million in
2010 experiencing a growth of 64.15%.
The Inward foreign remittance business of the Bank recorded a tremendous growth rate
of 56.48% from TK. 2,832.28 million to TK. 4,431.90 million in comparison with last
year due to starting live dealing by Treasury & delivery of quality services to the clients.

4.16. Purpose of foreign remittance:

Family maintenance
Treatment
Educational Fees
Business development
Marriage Expenses
Air tickets or visa processing for wage earners
Hajj performance Expense
Gift and donation
Land purchase
Construction of house building or commercial complex
Buying of flat or apartment
Purchase of plot from real estate company
Sending installment against flat or plot booked at housing fair in London. New york etc.
Buying of USD dollar investment or premium bonds

4.17. Foreign Remittance and its Impact in the Social-Economic Development of

Bangladesh:
Totally the contribution of foreign remittance rising of living standard can not be
described so easily. So the importance of foreign remittance in the economy of
Bangladesh is widely recognized and requires little reiteration.

43 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Impact on the GNP:
Increase in foreign remittance also increases the national income. As the national income
increase the consumption of goods by the country people also increase. So, production of
goods by the different organizations increases as well. It increases our countrys GNP.

Impact of remittance on consumption:

As the remittance increase the consumption of goods by the country people also
increase.

Increase savings:
Foreign remittance that comes from different developed countries is increasing the level
of our savings. The remittance received by our country people is saving in different
banks by making long term or short term deposit.

Increase capital:
Remittance received from different developed countries which is saving in different
banks a big source of capital. This huge amount of money is investing is different project
by the bank.

Impact of remittance on investment:

Foreign remittance is increasing the investment of our country. The remittance is using
for small and big investment in different project, establishing firm or industry, small or
big shop which increases the proper utilization of money.

Increase employment:
As the investment increase, the employments of our country also increase. The people of
our country are getting jobs in different project, firm or industries.

Impact of remittance on import:

It has a bad impact on our economy. By increasing remittance, it also increases
consumption of foreign product. It increasing the import of foreign product day by day
as well, Peoples have enough money to buy foreign product, although government is
trying to save our domestic companies by implementing necessary rules and regulation.

44 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.18. Process of Foreign Remittance:
Fund transfer from one country to another country goes through a process which is
known asremitting process. AIBLhas 146 Domestic branches. The bank has Nostro
Account with a foreign bank Standard Charted Bank, New York. Bangladeshi
expatriates are sending foreign remittances to their local beneficiary, through that
account.

Al-ArafahIslami Standard Chartered

Bank Ltd. Bank NY

Beneficiary Remitter

Now, the Bangladeshi expatriates will contact with Standard Charted Bank to
remit fund to Bangladesh.
Then Standard Charted Bank will credit the NOSTRO A/C of NBL and send
the message through SWIFT.
Next the local banks Head Office international division will receive telex
message and the TFMD will record the advice and generate the advice letter to
the respective branch of the bank.
The branch will first decode the test, verify signature and check the account
number and name of the beneficiary.
After full satisfaction, the branch transfers the amount to the account of
thebeneficiary and intimates the beneficiary accordingly.
But sometimes the complexity arises, if the foreign Bank has no NOSTRO A/C
in which country where the expatriates want to remit fund. Then the Foreign
Bank has to take help of a third bank who has NOSTRO A/C with intended
Bank.

45 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.19. Importance of foreign Remittance:
Generally, remittances are monies transferred from one individual to
another.
International remittance are transfers of funds by foreign workers-remitters-who are
livingand working in developed countries typically to their families who are still living
in theirhome countries. Examples include Middle Easterners living in Europe, Latin
Americans in the United States, and Koreans or Filipinos in Japan. Although the use
remittance fund varies from country to country, the recipients of remittances commonly
rely on them for living costs, education, and investments.

Remittance have increased significantly and become a major source of

income for developing countries.
The topic of remittance has become a popular one in the international financial
community indecent years as both the rate and volume of remittances have increased
exponentially. Gathering accurate data on international remittances has been very
difficult for a number of reasons, including the fact that a good portion of the transfers is
made on formal basis.

Some official statistics do exist, however and they present in 2006, the word bank
reported the remittances grew to approximately 206 billion dollar others put the figure at
298 billion. These flows have led analysts to conclude that the growth of remittances has
exceeded private capital flows and official development assistance to developing
countries. Moreover, remittances are a reliable source of foreign capital; in the 1990s
they were the least volatile source of foreign exchange.

4.20. Remittance management Software:

The system was designed with features to support corporations which require multi-
currency, multi-country operations. The following features can be used at remote
locations to collect remittances for foreign destinations.
4.21. Remittance Software Features:
Remitter information
Beneficiary information
OFAC list compliance
Agent management

46 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Exchange house management
Head office management
Branch office management
Cover fund management
Remittance distribution
Real time transaction
Checker & Maker
Anti-money laundering facility & transfer list check
Various exchange house data input & data distribution facility
Range wise commission
Bank wise exchange rate
Auto feedback facility
Multicurrency conversation
Instant remittance check
Bangladesh & abroad country compliance
SMS facility(Remitter & Beneficiary)
Online access and control
Scheduled processing-Facilities day-to-day operations
Automated stop payments
Risk management

4.22. Special Features of Remittance Software:

Commission can be setup separately in cash pay and account pay

Exchange rate can be separately setup for own bank and other bank
Transaction verification can be done in both the exchange house and Head office
Application and Beneficiary information will be checked each transaction
OSFI/OFAC checking facility
Application document preservation

47 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.23. Impacts of Foreign Remittance:

4.23.1 Positive Impacts on Development:

One positive aspect of international remittances is that they represent a flow of
income for families in the developing world who might not otherwise receive
assistance. Whether it is because of their location or social status, the majority of
remittance receivers are the invisible poor.
Remittances also help to foster a sense of financial democracy. The availability
of remitted funds may also indirectly help the communities within developing
nations where the money is spent.
Remittances are also a stable form of external finance, and, unlike other forms of
private capital inflows, remittances remain stable and often increase during times
of economic hardship.
It is usually held that the amount of money remitted is inversely related to the
strength of the receiver's national economy. That is, remittances increase sharply
following economic crises.
Remittances, therefore, provide a safety net during sudden economic downturns,
financial crises, and unexpected short-falls.
The impact of remittances may be even more pronounced in countries
experiencing warfare or unrest.
Moreover, when displaced refugees come to have financial or political leverage
in their new countries, they may be able to indirectly or directly mount pressure
against their home country in order to promote peace and stability.

4.23.2 Negative Aspects and Potential Drawbacks:

When the immigrants continuously remit funds to their home countries, the
potential exists for the receiving community to become dependent upon those
remittances. An abrupt halt in the flow of remittances in such a case can be
devastating.
Another potential drawback informs the debate as to whether remittance
transfers, asa whole, increase or decrease inequality between the haves and the
have-nots.

48 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.24. Remittance Services in the Banking Sectors:
Among different services rendered by a commercial bank to its customers, remittance
facilities are very important and popular to the customer. Remittance means sending of
money from one place to another. Money order, telegraphic money order through
telegraph/post office is the common method of sending fund.
Bank also provides this facility to its customers by means of receiving money at one
branch of the bank and arranging for payment in another branch within/outside the
country. This facility is extended to its customers to enable them to avoid risk arising out
if theft, loss etc. A Remittance is an important service provided by banks to customers as
well as non-customers. Since it is not agree service it is a source of income for the bank.
Parties involve in remittances Four parties involved in remittance:-
Remitter
Remit tee
Issuing Bank/ Institution
Paying Bank

Remitter:-
One who initiates, or requests for a remittance. The remitter comes to the issuing or
originating branch, asks for a remittance to be made, and deposits the money to be
remitted. The bank charges him a commission for this service. He may or may not be the
branchs customer.

Remit tee:-
A Remit tee is also called the beneficiary, or the payee. The person in whose name the
remittance is made. A remit tee is also the one who receive the payment.

Issuing Bank/ Institution:-

Issuing bank or institution is the bank or institution that sends or affects the remittance
through demand drafts, telegraphic transfers, or mail transfers.

Paying Bank/ Institution:-

Paying Bank also knows as the drawer branch. The branch in which the instruments were
drawn has to make the payment (usually located in a different city country)

49 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd


In industrialized countries, the remitter is often more educated than the general
population of her home country, and has immigrated to accept an employment
opportunity or follow an educational pursuit.
Lack of transparency.

4.25. Mode of Foreign Remittance Services:

A remittance is money sent from one person to another in any form generally to another
country. The Bank provides this facility in various ways. The customer can choose any
mode of remittance depending on the time available for sending the remittance. Given
below is theist of the common remittance options.
Mode of Remittance Normal Time Taken

Instant Transfer Instantaneously

Online remittance 1 to 5 days depending on the mode of online remittance chosen

Speed remittance Within 1 day

SWIFT 1 to 3 days depending on the location of beneficiary branch

Draft / Cashers Cheque 7 days to 28 days

International Money Order 7 days to 28 days

Foreign Currency Cheque 7 days to 28 days

4.26. Foreign Remittance Activities of Al-Arafah Islami Bank Ltd. Ladighirpar

Branch Sylhet.

4.26.1 World Wide Exchange House:

The Western Union
The Company is a financial services and communications company based in the United
States. Its North American headquarters is in Meridian, Colorado, though the postal
designation of nearby Englewood is used in its mailing address. Up until it discontinued
the service in 2006, Western Union was the best-known U.S. Company in the business of

50 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

exchanging telegrams. Western Union has several divisions, with products such as
person-to person money transfer, money orders, business payments and commercial
services. They offered standard "Cablegrams", as well as more cheerful products such as
Candy grams, Dolly grams, and Melody grams. Western Union, as an industrialized
monopoly, dominated the telegraph industry in the late 19th century. It was the first
communications empire and set a pattern for American-style communications businesses
as they are known today.

Money Gram International Inc.

Money Gram is a money transfer company based in the United States with its
headquarters in Dallas, Texas. It has operation centers in St. Louis Park, Minnesota and
Brooklyn Center, Minnesota, a call center in Lakewood, Colorado, and regional and
local offices around the world. Money Gram businesses are divided into two categories,
consisting of Global Funds Transfers and Financial Paper Products. The company
services individuals and businesses through a network of agents and financial institution
customers.

Samba Financial Group

Samba is one of the regions largest and most acclaimed financial services groups with
an unrivalled reputation for world class financial solutions comparable with the best in
the world. Since inception, Samba has been leading the industry in innovation with a
long list of industry firsts, playing a major role in the modern transformation of banking
in Saudi Arabia. Indeed, their world class services, market-leading products and superior
technology have made them one of the most successful financial services brands and the
most internationally acclaimed bank in Saudi Arabia and even the Middle East.

Xpress Money Services Ltd

Xpress Money is one of the fastest growing money transfer brands in the world with
thriving presence across 5 continents. Established in 1999 in the United Kingdom, the
brand has grown by leaps and bounds and has spread its geographical presence across
150 countries in over a decade. Working with some of the largest banks and non-banking
financial companies, Xpress Money has been able to establish one of the largest
remittance networks in the industry. Present across 170,000 locations currently, Xpress
Money is focused on rapid expansion to the far corners of the globe.
51 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
Secure, simple and Safe, Xpress Money is not just about international money transfers.
Its away to make your dreams come true!

Instant Cash
Instant cash provides a state of the art electronic Money Transfer System. Developed for
the masses across the globe, Instant Cash charges the competitive fees for remittances
and is backed by the latest technology for reliability. The product is monitored and
serviced by our dedicated customer service professionals to deliver a fast and reliable
service. How to Pick Up a Money Transfer Money can only be received in person, just
visit our branch or an agent.

Present the ICTC Number Instant Cash Transfer Code. Tell sender's name and country
the money was sent from with amount that was sent. Show your identification card to the
agent. Sign the receipt that the Agent gives you. The Agent will give you the money that
was sent to you.

Ez Remit
Ez Remit launched in June 2003 is the money transfer product of BFC Exchange
Limited, in the United Kingdom and was established to provide a remittance service to
growing expatriate communities. It offers by the minute money transfer facilities across
the globe. In2009, along with Bahrain Financing Company and Bahrain Exchange
Company Kuwait, BFC Exchange Limited formerly named Ez Remit Limited, came
under the major stakeholders of the parent company - Bank Alkhair Formerly known as
Unicorn Investment Bank. Today EzRemit provides remittance services in over 30
countries with more than 40,000 agent locations.

4.27. Key Obligations for Foreign Remittance Services:

Identity and verify the customers
Obtain information on customers requesting electronic fund transfers
Monitor customers transactions
Maintain proper customers records
Report transactions to the Financial Intelligence Unit

52 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Implement appropriate internal controls and systems to protect bank from being
used for money laundering and terrorist financing purposes.
The bank must undertake specific procedures to identify customers with whom
the bank has an on-going business relationship.
Identification and Verification of a Customer's Signature.
Identification and Verification of Occasional Transactions.
Obtain complete information on customers requesting electronic fund transfers
When dealing with electronic fund transfers, the bank must obtain accurate and
complete information about the customer requesting to transfer funds or the
originator of the transfer.

4.28. Foreign Remittance Earned by Al-Arafah Islami Bank Ltd. Laldighirpar

Branch:
Remittance plays a significant role for any economy. It helps the poverty level in
Bangladesh. It also accounts for about 66 percent of the countrys foreign currency
reserves, providing Bangladesh with a strong and stable external position Bangladesh.
Foreign remittance Amount at AIBL is following, 2014-2017 (Jan-June): In Amount.

Year 2014 2015 2016 2017 (Jan-

June)
Amount(in Taka) 214154227 193686201 213996839 128060223
(Source Bank Officer) Table 4.28: Foreign Remittance Amount at AIBL,

53 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 250000000

200000000

150000000

100000000

50000000

0
year 2014 2015 2016 2017 (Jan-June)

Figure 4.28: Foreign Remittance Amount atAl-Arafah Islami Bank Ltd. Laldighirpar
Branch.

Interpretation: From the above table we can clear that AIBL gained highest
remittance from 2014 up to the inflow is 214154227 taka. It is also observed that
due to political crisis on 2015 the rate of remittance was downward. In this time
the amount of remittance was 193686201 taka. It plays a negative sign for our
economy.
4.29 Total income received from Foreign Remittance by Al-Arafah Islami Bank
Ltd.Laldighirpar Branch in 2016.

Month Amount (In Taka)

January 20000
February 35000
March 48000
April 55000
May 75000
June 100000
July 150000
August 110000
September 130000
October 113000
November 120000

54 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 December 115000

Total income received from Foreign Remittance in 2016 (BDT)

160000
140000
120000
100000
80000
60000
40000
20000
0

Interpretation The bar chart represents the Total income received from Foreign
Remittanceby.Al-Arafah Islami Bank Ltd. Laldighirpar Branch in 2016. Though it
started form the lowest level in January, it gradually increased until the june,2016. Then
in August it again decreased. Between July and September the foreign Remittance
Received by Al-Arafah Islami Bank Ltd.Laldighirpar Branch dramatically increased.
After July the income received are not consistent .

4.30 Inward Remittance during the month of Jan-June 2017 in AIBL:

Month Taka
January 13826437
February 13383750
March 19231623
April 17381606
May 30167409
June 24069443
Table 4.30: Inward Remittance during the month of Jan-June 2017 in AIBL

55 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 35
30
25
20
15
10
5
0
Jan Feb March April May June
Inward Remittance during
138264371338375019231623173816063016740924069443
the month of Jan-June

Figure 4.30: Inward Remittance during the month of Jan-June 2017 in AIBL

Interpretation: From the above table we can see that Al-Arafah Islami Bank Ltd.
Laldighirpar Branch gained highest remittance in the month of May 30167409 taka. It
observes that due to public holyday on the month June there was fall in the earning of
remittance.

4.31 Comparison AIBL Remittance with other Banks in the month of June 2017:

(Million USD)
Bank June-16
AIBL 20 57
Bank Asia Ltd. 53 70
Dutch Bangla Bank Ltd. 67 11
Islami Bank Bangladesh Ltd. 343 92
National Bank Ltd. 63 61
Pubali Bank Ltd. 52 12
Uttara Bank Ltd. 48 38
Table 4.31: Comparison AIBL remittance with other Banks

56 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Uttara Bank AIBL Bank Asia Ltd
Ltd Pubali 3% 8%
8% Bank Ltd
8%
Dutch Bangla
Bank Ltd
National Bank 10%
Ltd
10%

Islami Bank
Bangladesh Ltd
53%

Figure 4.31: Comparison of Earning Foreign remittance in AIBL and other Banks

Interpretation: In the month of June we can see that, AIBL (USD 20.57 million) is
the7th position in our country receiving remittance, which is 3 percent of total remittance
received. There is 1st position Islami Bank Bangladesh Ltd. USD 343.92 million (53
percent). Dutch Bangla Bank Ltd. USD 67.11 million (10 percent) which gained 2nd
position in earning remittance.

3.32 Remittance by Expatriate Bangladeshis:

Foreign employment and remittance sent by the Bangladeshi expatriates have immense
contribution to the economic development of Bangladesh through lowering
unemployment, poverty alleviation and swelling up foreign exchange reserve.
Remittance is the main source of foreign finance for developing countries s like
Bangladesh with limited internal resources and foreign capital.

Year In Crore Taka % Increase

2001 11590 - 79

2002 16484 - 53 37 68

2003 18484 - 53 11 58

2004 21285 - 95 11 95

57 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

2005 27304 - 33 19 38

2006 38366 56 28 94

2007 45739 86 19 89

2008 63109 15 37 14

2009 73998 00 18 98

2010 76500 00 2 61

2011 77500 00 1 29

2012 79400 00 2 39

2013 82055 00 3 24

2014 83100 00 1 28

2015 105365 00 2 68

4.32: (Source: Bangladesh Bank) Table Remittance Sent by Expatriate

58 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 120

100

80

60

40

20

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Remittance sent by Expatriate 1159116485184852128627304383674574063109739987650077500794008205583100105365

Figure 4.32: Remittance Sent by Expatriate

Interpretation: The Kingdom of Saudi Arabia is the largest source of remittance as non-
residents Bangladeshis living there sent $2.694 billion from the kingdom in 11 months
(until May) of the 2015-16 fiscal year. Bangladesh received a total of $7.729 billion
from all eight countries in the Middle-East. The data show Bangladesh received third
highest remittance of $2.212 billion from the USA until May in the fiscal year of 2015-
16 while Malaysia, with $1.204 billion.

59 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.33 Highest remittance earning countries position all over the world in 2016 is given
below:

Top 10 Countries 2016 (Billion USD)

India 7 2
China 6 3
Philippines 2 9
Mexico 2 5
France 2 4
Nigeria 2 0
Egypt 2 0
Pakistan 2 0
Germany 1 7
Bangladesh 1 5
4.33 Top ten remittance earning countries in 2016

80

70

60

50

40

30

20

10

0
Philippi German Banglad
India China Mexico France Nigeria Egypt Pakistan
nes y esh
billion usd 72 63 29 25 24 20 20 20 17 15

Figure 4.33: Top Ten Remittance Earning Countries in 2015

60 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Interpretation: As per view of the paper Migration and Development Brief of World
Bank April 26, 2016, Bangladesh is the 10th Position during 2015 among worlds top ten
remittance earner countries and 3rd position in South Asian region. India is the worlds
top most remittance earner and China attained the 2nd position.

Percentage of Yearly Most Inward Companies

30%

25%

20%

15%

10%

5%

0%
Western Express Money RIA Instant Placid Others
Union Mony Gram Fxonline Cash Exppress

Interpretation: The above chart represents the yearly most inward remittance
companies. In the chart horizontal axis represents the company name and vertical axis
represents the percentage of inward remittance. In the chart it is shown that Placid
Express and Express money send more money than others company. And these
companies based on UK, Spain and USA. Middle East country like Saudi Arabia,
Kuwait, Abudabi, use Placid Express and Express money in most times.

3.34 Yearly Presentation of most inward Remittance Country:

In the above table show that the most common inward remittance country and their
average Percentage. In our city most people live in abroad and most of the people
depend on foreign income.

61 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Inward Remittance Country
35%
30%
25%
20%
15%
10%
5%
0%
U.S.A U.K Soudi Kuwait Italy Australia Other's
Arabia

Inward Remittance

Interpretation: The chat represents the most inward countries in yearly. In the chart
horizontal axis represents the country name and vertical axis represents the percentage of
the inward remittance. The chart shows that inward remittance was high in UK and
USA, most remittance is come from these countries. On the other hand Italy also sends
15% remittance on average.

62 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Chapter: 05

Learning Knowledge of Internship

63 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Learning Knowledge of Internship
5.1 Definition of Internship:

Internship is a process to achieve practical knowledge about some theoretical lesson. Its
most important aspect is to acquire knowledge about the real position. As a practical
subject, Management needs some practical knowledge. Accounting information system
of Business studies includes an internship programs for its Bachelor of Business Administration
(BBA) programs. According to Polin Efro (1977).
Social Research is such a scientific effort which tries to discover new information
through some rational and organized system, which tries to examine the reliability of
former information, and which tries to make to new theories, systems and conceptions to
understand and Explain a human attitude.
Practical work is achieved to fulfill our knowledge. In practical work, we can realize
some problems and possible determinants of their solution.

5.2 Importance of Internship:

Goods and services are produced for the purpose of using in daily life. Similarly,
Theoretical knowledge is acquired for the purpose of applying in the practical life. The
propensity of application of theoretical knowledge in practical life successfully
internship program is absolutely necessary because theoretical knowledge will be fruitful
if it can be applied in the practical life. When we can implement the theoretical
knowledge practically, we can say the knowledge is successful; otherwise the achieved
knowledge is valueless. Internship program is the way of implementing the theoretical
knowledge practically. However, the importance of internship may be described in the
following ways:

As internship program is the practical implementation of the theoretical

knowledge, it helps to increase the quality and effectiveness of the trainer.
We can only know the problems of an organization in directly through theoretical
knowledge, but we can know the nature of the problems, problems of the various
departments, methods of solving the problems through the practical training. So it
is very important to identify the problems and eradicate the problems.
The trend of all activities is an organization becomes growing through practical
training.

64 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 To Innovate new technique of management.
To realize the present condition of the institution.
To make policy for development of the organization.
It mentally prepares for their professions.
Internship program acts as a bridge between theoretical knowledge and
managerial practice. Internship acts as a guideline during the service period.
By internship program students can understand limitations, shortages
and practicability of their knowledge and thereby can take necessary action
for removing these limitation and shortages.

5.3 Internship experience:

This report has been done as per the requirement for successful completion of the
Internship program. Exposure to the business world and acquiring practical work
experience was the primary objective of this report. I was attached with Al- Arafah
Islamic Bank Ltd at its Laldhigirpar Branch for my internship. Through internship I got
the basic idea about the corporate culture and practices. It was a great experience. 01
May 2017 to 31 August 2017 these three month journey of my internship with Al- Arafa
Islamic Bank Limited was very delightful. I enjoyed a lot. All the stuffs of the bank are
very friendly and helpful. I was very lucky to get chance to experience in different
departments within these three months. Those are described below:

5.3.1 Remittance Desk

The Fifth department I worked was Remittance desk. I was there from 02 July to 31th
July. My in charge was Ishtihak Ahmed Chowdury (RSO) is also there to help me to
understand my job. I found remittance Desk a little difficult. My job was to attain and
help the clients directly. Money sent home by migrants competes with international aid s
one of the largest financial inflows to developing countries. Foreign remittance can be
defined as the purchase and sale of freely convertible foreign currencies as admissible
under exchange control regulations of the country. A looser translation is the sending of
the money home while working in a foreign country. Thousands of people are currently
working and living in a country that is not their home, and sending funds regularly back
to their families in their home country.

65 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

5.3.2 Clearing

May 18th to 31st I was also appointed in clearing department. My in charge was Hayeth
Allah Chowdhury (SCSO), and Raqibul Hassan (Officer) in clearing department cheque
from other banks transaction happens. My job was to entry those transactions in a
register and at the end of the day sum up the amount and check with the automated
amount from computer. The amount must be same.

5.3.3 Cash Department:

I was in cash department from .1ST June to 15th June. My in charge was Salman Mahmud
(Officer). There were also some other stuff working in cash are Samsuddin (Assistant
Officer), and Abdal Ahmed Chowdhury (OPM).My duty in cash was to entry cheque and
deposits slips amount and number in registers and give the serial number to the cheque
and deposit slip according the register entry number. There were two register one is to
entry the cheque number and amount. Another register is for entering deposit slips
number. Cheques are entered in debit register because with cheque bank gives money to
customer which is debit and deposit slips are entered in credit register because with
using deposit slip customer deposit money to bank which is earning for bank and that is
why it is credited. At the end of the day I had to sum up register individually and check
them with automated amount get through the computer. The amount must be same other
wise it will be revised thoroughly and correct the mistake. Another job I did there is
sorting the cheque according the prefix of the account number. I had to also sort out the
Demand Payable Slip (DPS) according their type. There are three types of DPS; 3yrs,
5yrs and 8 yrs. 1 to 10 of every month are considered as DPS hour. Everyone becomes
so busy. I got two days of DPS hour and understand what actually happens. Those days I
had to enter lots of cheques, Deposit slips and sort a huge amount of DPS.I also entry the
IPO Share items. I work this in PC.

5.3.4 Accounts Department:

Accounts Department is under General banking. 18th June to 29th June I worked in
accounts. Within that period of time my in charge were changed two times because of
their transfer. So I get the chance to work with two in charge. In accounts first I got

66 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Ripon Ahmed (CSO), she was also my onsite supervisor. Raqibul Hassan (Officer) was
my in charge. My main job in accounts is sorting the voucher. After voucher sorting me
had to attach them with related supplementary. Voucher is actually proved of the
transaction. There are various types of voucher and they are categorized by different
number. Which I had to separate and sort group wise. Supplementary is the automated
list of all transactions. Each of the transaction has related voucher. My job was to attach
them according the number and check the amount of transaction. In voucher and
supplementary the amount will be same. Otherwise there must be some problem which
will be identified and revised. After attaching next job was balancing. Balancing means
doing sum and ensuring that debit and credit is equal. Next step is to make a cover page
which is a brown color hard paper. Then prepare it for binding in an organized format. It
is prepared for binding and I did another job was entry the amount date wise in a
register.
5.3.5 Front Desk:

The first department I worked was front desk. I was there from 2nd May to 17th May. My
in charge was Ripon Ahmed (CSO) is also there to help me to understand my job. I
found Front Desk a little difficult. My job was to attain and help the clients directly. I
had to help clients by providing information, helping to fill up Account opening, DPS
opening, MSS opening, DBDS opening, SBDS opening, FDR opening, MBS opening,
SSS opening forms etc.

67 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Chapter: 06

Academic Knowledge Gained During BBA Program

68 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Academic Knowledge Gained During BBA Program

As a student of business department; I learned many things from my BBA program;

gained a verity of knowledge through the class lectures; text book; assignment;
presentation; viva; exams etc. while conducting my internship in Social Islami Bank
Limited some of this knowledge was very essential for practical professional life.

6.1 Principles of Management:

In this course I learned about different management principles (e.g. planning; organizing;
leading; controlling). Having a firm grasp of the principles helped me to analyze the
issues managers face maintaining the chain of command; evaluate managers responses
and determine alternative courses of action.

6.2 Banking and Insurance:

From the course Banking and Insurance; I learned about various types of account;
such as savings deposit account; fixed deposit account; current deposit account etc. when
I joined in internship and worked in Account Opening section; I applied my academic
knowledge acquired from BBA program. I also new about the loan and advance from the
course Banking and Insurance.

6.3 Principle of Economics:

The theory of supply and demand is an organizing principle for explaining how prices
coordinate the amounts produced and consumed. The law of demand states that in
general price and quantity demanded in a given market is inversely related. That is the
higher the price of a product the less of it people would be prepared to buy of it (other
things unchanged). As the prices of a commodity falls; consumers move toward it from
relatively more expensive goods (the substitute effect).

6.4 Organizational Behavior:

This course helped me on developing an understanding of practical implications of

various theories of human behavior at work. Specific things I learned include leadership;
motivation; teamwork; different personality issues etc. This course helped me in
identifying the various personality traits through observation and dealing in a proper and
appropriate manner with them work as a team member; self development etc.

6.5 Marketing:

In BBA program; I have completed two courses named Principles of Marketing &
Marketing Management. These two courses teach me how to behave with
customer/client that I performed in my internship. I provided necessary information to
the customer/client according to their query via phone.

69 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

6.6 Principles of Finance:

Principles of Finance are most important subject for BBA student. I learned from this
subject annuity, debt ratio, find out the ratios etc.

6.7 Business Communication:

Business Communication is a term that can be defined as the contact between the people
within the organization for the intention of carrying out the business activities. It is used
to promote a product, service or organization as well as pass on information within a
business or work as an official statement from a company. Business communication is
nothing but the communication between the people within the organization for carrying
out the business activities. From this course, I have learned the various types of
applications, how to prepare different types of reports, memos, letters, agenda, etc.
Therefore, this course helped me to communicate with different type of people in the
organizational and helped in writing application for internship.

6.8 Business Research:

This course helped me much in preparing this report. I learned many factors of preparing
a report from this course like selecting the appropriate courses for data collection, for the
purpose, collecting primary and secondary data, taking interviews, the structure of
different kinds of report etc. As we conducted a practical research work in this course, so
I got huge knowledge about writing a report. Therefore, this course has been too helpful
for me to writing a report.

6.9 Principles of Accounting:

I completed the course named Principles of Accounting, which is my major subject. In

accounting course, I broadly understood the accounting system and procedure of any
organization. When I joining in a company, these course help me a lot. From this course
I have understand the basic terms of accounting such as debit, credit, journal, ledger, trail
balance, double entry system, financial statements, valuation and allocation etc, I found
various types of statement which was basically I learned from my academic course.

6.10 Other Courses:

I also gained knowledge from the course Introduction to Business, English Language 1
& 2, which is very helpful to learned English. Business Math 1 & 2 from the subject that
we have to study well. In every situation, we need math. This subject is necessary for all.

70 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Chapter: 07
SWOT Analysis & Concluding Remarks

71 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 SWOT Analysis & Concluding Remarks

7.1 SWOT Analysis:

The SWOT analysis comprises of the organizations internal strength and weaknesses
and external opportunities and threats. SWOT analysis gives an organization an insight
of what they can do in future and how they can compete with their existing competitors.
This tool is very important to identify the current position of the organization relative to
others, who are playing in the same field and also used in the strategic analysis of the
organization.
Strengths of Al-ArafahIslami Bank Ltd. Laldighirpar Branch.

In Bangladesh AIBL has wide range of customer base and is operating efficiently in this
country. AIBL has a bulk of qualified, experienced and dedicated human resources.
AIBL has the reputation of being the provider of good quality services to its potential
customers, AIBL recently providing ATM facility to the customers. This is will make a
great strength of AIBL. Other strengths are bellows:
Service is served as first in first out basis.
Experienced top management thats why the officer always gets guidelines from
the management when they face any difficulties.
Providing online Banking Service.
Highly Skilled and Motivated Workforce.
Huge Number of Loyal Clients.
Weaknesses of Al-Arafah Islami Bank Ltd. Laldighirpar Branch.
Every email are sent late by the Head office, after almost 12.00 PM. Due to late
arrival the customers have to wait for long time or they return without talking
their money, who come from village or long distance place or who have urgent
need for money they have to suffer for it.
Sometimes network create problem, so in that time they cannot pay the money of
online money transfer companies like Western union, Xpress money etc.
Weaknesses in the infrastructure that is used to provide remittance service.
Existing system is time consuming for both officer and customer.
Lack of communication between different levels of management.

72 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Opportunities of Al-Arafah Islami Bank Ltd.Laldighirpar Branch.
Expanding brand image of the worldwide through providing foreign remittance
service.
Country wide network.
As Sylhet is a potential Metropolitan city; there is a opportunity of industrial
advance.
Threats of Al-Arafah Islami Bank Ltd.Laldighirpar Branch.
Competitors are coming with full preparation so competition is increasing day by
day.
Lack of customer confidence.
Governments regulations and regulatory has been increased.
Most of the branches are located on divisional city.
Lack of modern banking facilities creating threat for it.

7.2. Findings:
The project work has enriched my knowledge a lot. To have a clear picture about the
foreign remittance activities, personal observation and conversation with the employees
of the organization were conducted. While working, I always tried to keep my eyes and
ears in knowledge as best as possible about the dealing of the officials with the clients.
My observation found the finding:
Al-Arafah Islami Bank Ltd. Lalighirpar Branc hearned its highest remittance in
2014. It gained highest remittance in the month of May 2017 BDT 30167409. It
observes that due to public holyday on the month June there was fall in the earning
of remittance.
It gained 7th position among other banks in receiving foreign remittance from
different countries. This is a positive sign for the bank.
This Banks plays a great role in sending money to various rural areas through its
countrywide network. Sending money through AIBL is an easy and inexpensive
process.
A strong position in international Banking a great link with various foreign
exchange companies makes the process of collecting the foreign remittance
easier to this bank.

73 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Modern Technology equipment such computer is not sufficient in foreign
remittance department. Sometimes officers are facing network problem so that
they couldnt serve their customer that time.
Sometimes client face some difficulties in filling up the application form and
documentation while collecting money from the branch in AIBL remittance
division.
Here is lack of employee in AIBL Laldighirpar Branch, So that they facing
problem to serve their client.
Sometimes insufficient fund from product of AIBL remittance creates problem
for the customer to collect their money.
The bank does not use any promotional tools for attracting the customer to use its
foreign exchange and remittance services and others.

7.3 Recommendations:
The bank management needs to have a clear operational efficiency and must through
analyze the scopes for further development in order to retain and attract new customers
towards any particular branch of a bank. Therefore, it is vital for the commercial banks
to closely monitor their performance level, which comprises the functional units, that
provides services to its clients. To make better position in the industry banks need to
expand some activities and should give emphasis on some field and need to introduce
new and diversified financial products to provide wider option to customers.
Without having an effective customer base, it becomes difficult for any bank to compete
and sustain in the competitive market for the banking services. Before drawing the end I
would like to offer the following suggestions for bringing improvements at AIBL:
Based on the finding some progression can be recommended in future. The
recommendations are given below:

AIBL should be developed technological Skills of its employees. It should

establish its own networking system between its branches so that they can
exchange their information faster and efficiently.
AIBL should locate their branches in the important places of the rural area so that
most people will know about the Foreign Remittance Service of AIBL.
Fund sufficiency and server correctness is required while providing services to
the clients of Non Residential Bangladeshi Remittance.

74 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Branch should intensify its quality of client service. Customer services must be
made dynamic and prompt.
In collecting remittance, documentation must be easier for helping the clients for
collecting money.
The software in General Banking as well as foreign remittance should be
upgrade.
Bank may create a department of telephone call services from where customers
can get the necessary information about foreign remittance.
Government and the different official channels should make them concern that
channels are more easy and safe to send money from abroad.
It is suggested that the bank can enrich its interest banking services with more
resources and IT specialist.
It is essential for AIBL to arrange more training and workshop programs
regarding foreign remittance Activities.
The bank should give more attention on promotion and campaign activities.
The HRD should look into the matter that the branches are well staffed with the
right people in the right position.
The bank should adopt more technological devices to provide better services.

7.4 Conclusions:
Al-Arafha Islami Bank Limited is one of the most successful institutions of economic
infrastructure ofthe country. Banking service is extremely important in a free market
economy. Foreign Remittance system services as a control device and helps to achieve
organizational goal. So, foreign remittance is the most important factor for the
improvement of the banking service and organizational development. Foreign
Remittance is the second largest source of foreign currency of the country. Foreign
remittance deals with collection of currency, proper motivation system, performance
appraisal method etc. According to analysis and finding there are many training program
for the improvement of the customer satisfaction and organization. But the feedback and
evaluation of the training program is poor. If foreign remittance takes proper steps about
it and it will be fruitful for the organization.

75 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Reference

Instruction Book of Al-Arafah Islami Bank Ltd.

Annual report of Al-Arafah Islami Bank Ltd. (2013-2016)
Bangladesh Bank Annual Report 2016
Dr. R. R. Paul, Money Banking and International Trade (3rd Edition)
De Bryn, T and Kudus U. Dynamic of Remittance Utilization in Bangladesh
Foreign Remittance Activities of, Internship Report, B Al-Arafah Islami Bank
Ltd. BRAC University.
Hoggson, N. F. (1926) Banking Through the Ages, New York, Dodd, Mead &
Company.
Goldthwaite, R. A. (1995) Banks, Places and Entrepreneurs in Renaissance
Florence, Aldershot, Hampshire, Great Britain, Variorum

Websites
www.foreignremittance.com
www.Bangaldesh Bank.com
www.aiblbd.com
www.businessdictonary.com/defination/foreign-remittance.html
www.investopedia.com/remittance
https://en.wikipedia.org/wiki/foreignment_remittance

76 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

2.5 Background of Al-Arafah Islami Bank Limited:
With the objective of achieving success here & hereafter by pursuing the way directed
by Allah and the path shown by His Rasul (SM), Al Arafah Islami Bank Ltd was
established (registered) as a private limited company on 18 June 1995. The inaugural
ceremony took place on 27 September 1995. The authorized capital of the Bank is
Tk.5000.00 million and the paid up capital is Tk. 5677.28 million as on 31.12.2016.
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. The equity of
the bank stood at Tk. 10247.45 million as on 31 December 2016, the manpower was
1719 and the number of shareholders was 53,386. It has achieved a continuous profit and
declared a good dividend over the years. High quality customer service through the
integration of modern technology and new products is the tool of the bank to achieve
success. The bank has a diverse array of carefully tailored products and services to
satisfy customer needs. The Bank is committed to contribute significantly to the national

77 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

economy. It has made a positive contribution towards the socio economic development
of the country with 78 branches of which 21 is AD throughout the country.
2.6 AIBL at a Glance:
Islam provides us a complete lifestyle. Main objective of Islamic lifestyle is to be
successful both in our mortal and immortal life. Therefore in every aspect of our life we
should follow the doctrine of Al-Qur'an and lifestyle of Hazrat Muhammad (Sm.) for our
supreme success. Islami Banking System is becoming more and more attractive day by
day to peoples irrespective of nations, religious, colors and species. More than 300
Banks & financial institutions are serving Islami banking throughout the world. At
present in our country 8 fully fledged Islamic Banks are working successfully. And other
traditional banks have Islami Banking Wings conducting Shariah based banking
activities. Recent Development of Bangladesh Government Islamic Investment Bond
(BGIIB) is the milestone for shariah based banking practices in Bangladesh. Al-
ArafahIslami Bank started its journey in 1995 with the said principles in mind and to
introduce a modern banking system based on Al-Quran and Sunnah.
A group of established, dedicated and pious personalities of Bangladesh are the
architects and directors of the Bank. Among them a noted Islamic scholar, economist,
writer and ex-bureaucrat of Bangladesh government Mr. A. Z. M Shamsul Alam is the
founder chairman of the bank. His progressive leadership and continuous inspiration
provided a boost for the bank in getting a foothold in the financial market of Bangladesh.
A group of 20 dedicated and noted Islamic personalities of Bangladesh are the member
of Board of Directors of the bank. They are also noted for their business acumen. Al-
ArafahIslami Bank Ltd. has 132 branches (up to December 2016) and a total of 2849
employees (up to December 2016). Its authorized capital is Taka 16000 million and the
paid-up capital is Taka 9469.58 million as on 31 December 2016.Wisdom of the
directors, Islamic bankers and the wish of Almighty Allah make Al- Arafah Islami Bank
Ltd. most modern and a leading bank in Bangladesh.

2.7 Vision:

To be a pioneer in Islamic Banking in Bangladesh and contribute significantly to

the growth of the national economy.

2.8 Mission:
78 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
 Achieving the satisfaction of Almighty Allah both here & hereafter
Proliferation of Shariah Based Banking Practices
Quality financial services adopting the latest technology
Fast and efficient customer service
Maintaining high standard of business ethics
Balanced growth
Steady & competitive return on shareholders' equity
Innovative banking at a competitive price
Attract and retain quality human resources
Extending competitive compensation packages to the employees
Firm commitment to the growth of national economy
Involving more in Micro and SME financing

2.9 Commitments:
AIBL is a customer focused modern Islamic Bank, sound and steady growth in
both mobilizing deposit and making quality investment to keep their position as a
leading Islami bank in Bangladesh.
To deliver financial services to retail, small and medium scale enterprises, as well
as corporate clients through branches across the country.
AIBLs business initiatives are designed to match the changing trade & industrial
needs of the clients.
2.10 Schemes of AIBL:
1. Current Account
2. Mudaraba Saving Account
3. Mudaraba Term Deposit Receipt Account.

4. Short Term Deposit

5. Installment Term Deposit.

Mudaraba Kotipoti Scheme Mudaraba Millionaire Scheme Mudaraba

Lckhpoti Scheme

6. Double Deposit Scheme.

7. Hajj Deposit Scheme

8. Small Investment Scheme.

79 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Allah has permitted trade and forbidden interest (verse 275 of sura Al-baraka).
And as such Al-Arafah Islami Bank Limited operates with the objectives and
commitment to implement the economic and financial principles of Islam in banking
arena blending Islamic values and modern technologies with a view to achieve
complete success in this world and hereafter.

To provide quality service to our customers.

To set high standard of Integrity.

To extend our customers innovation services acquiring state-of-the-art

technology blended with Islamic principles, and bring total satisfaction to our
clients and employees. to expand Islamic banking through welfare oriented
banking system.

Ensure equity and justice in economic activities.

Extend financial assistance to poorer section of the people, and

Achieve balanced growth & equitable development.

80 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

The primary objective of Al-Arafah Islami Bank Ltd is to promote, foster and develop the
application of Islamic principles, law and tradition to the transaction of financial, banking
and related business affairs and to promote investment companies, enterprise and concerns
which shall themselves be engaged in business as are acceptable and consistent with Islamic
Principles, law and tradition. But the objectives of Al-Arafah Islami Bank Limited in the
context of its role in the economy are as follows:

1. To offer contemporary financial services in conformity with Islamic Shariah.

2. To contribute towards economic development and prosperity within the principles

of Islamic justice.

3. To facilitate efficient allocation of resources.

4. To help achieving stability in the economy.

2.11 Organization Structure of AIBL:

Managing Director

Deputy Managing Director

Executive Vice
President
Executive Vice
President
President
Senior Vice President
Vice President
Assistant Vice President
First Assistant Vice President
Senior Principal Officer
Principal Officer
Senior Executive Officer
Professional Executive Officer
Executive Officer
Professional Officer
Probationary Assistant Officer
Officer
Trainee Officer

81 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

2.8 Objectives of AIBL:
2.8.1 Primary Objectives
The primary objective of establishing Islamic Bank all over the world is to promote,
foster and develop the application of Islamic principles in the business sector. More
specifically, the objectives of Islamic bank when viewed in the context of its role in the
economy are listed as following:

To offer contemporary financial services in conformity with Islamic Shariah.

To contribute towards economic development and prosperity within the
principles of Islamic justice.
Optimum allocation of scarce financial resources and
To help ensure equitable distribution of income.

2.8.2 Strategic Objectives

To ensure customers satisfaction.

To ensure welfare oriented banking.
To establish a set of managerial succession and adopting technological changes
to ensure successful development of an Islamic Bank as a stable financial
institution.
To prioritize the clients welfare.
To ensure diversification by Sector, Size, Economic purpose & Geographical
location wise Investment and expansion need based Retail and SME/Women
entrepreneur financing.
To invest in the thrust and priority sectors of the economy.
To train and develop human resources continuously & provide adequate logistics
to satisfy customers need.
To be excellent in serving the cause of least developed community and area.
To motivate team members to take the ownership of every job.
To ensure development of devoted and satisfied human resources.
To encourage sound and pro-active future generation.
To achieve global understand.
To strengthen corporate culture.
To ensure Corporate Social Responsibilities (CSR) through all activities.

82 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

2.10 Corporate Culture:

The bank has a friendly work environment which is not usual in other commercial banks.
However the efficiency of the employees & strict corporate protocol is not present in the
bank .The people in the bank see themselves as a tight knit team/family that believes in
working together for growth. The Corporate culture has developed has not been
imposed; it has rather been achieved through their Corporate conduct.

2.11 Corporate Objectives of AIBL:

All the activities of AIBL are conducted on interest-free system according to

Islamic shariah.

Investment is made through different modes permitted under Islamic Shariah.

Investment-income of the bank is shared with the Mudaraba depositors according

to a ratio to ensure a reasonably fair rate of return on their deposits.

Its aims are to introduce a welfare-Oriented Banking system and also to

established equity and justice in the field of all economic activities.

Its extends co-operation to the poor, helpless and low-income group of the people
for their economic enlistment particularly in the rural areas.

It plays a vital role in human resources development and employment-generation,

particularly for the unemployed youths.

Its aim is to achieve balanced growth and development of the country through
investment operations, particularly in the less development areas.

83 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Conceptual Framework

3.1 Bank:
A bank is a financial institution and a financial intermediary that accepts deposits and
channels those deposits into lending activities, either directly or through capital markets.
A bank connects customers that have capital deficits to customers with capital surpluses.

Due to their critical status within the financial system and the economy generally, banks
are highly regulated in most countries. Most banks operate under a system known as
fractional reserve banking where they hold only a small reserve of the funds deposited
and lend out the rest for profit. They are generally subject to minimum capital
requirements which are based on an international set of capital standards, known as the
Basel Accords.
3.1 Services Provided By AIBL:

The important of mobilization of savings for the economic development of our country
can hardly be over emphasized .We considered savings and deposits as lifeblood of the
bank. More the deposit, greater is the strength of the bank. The bank intends to launch
various new savings scheme with prospect of higher return duly supported by a well
orchestrated system of customer services. The bank would cater to the credit needs of
individuals as well as corporate clients. Initial it will emphasize on trade finance, which
would be short term and self-liquidating in nature. Considering the importance of foreign
trade in our national life, financing and handling of export & import business and also
handling of foreign remittance business would be given top most priority. Moreover the
bank operates all of its activities under the rules and regulation of Islamic Shariah. The
services provided by the Al-Arafah Islami Bank Ltd. Is given bellow:-

3.12 Sections and Their Functions:

There are mainly two sections in AIBL, General Banking Division Investment Division.
These Divisions have small department or units under them. The details of the important
sections and subsections are described below.

84 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

3.12.1 General Banking Division There are certain three sections working together to fulfill
the target of the company.

(a) Customer Service

(b) Cash Department

(c) Accounts Department

D. Customer Service Different functions of customer service are:

Accounts opening

Issuance of Cheque Book

Issuance of Payment Order

Issuance of T.T

Issuance of D.D

Issuance of Online Transfer

Handling transfer transaction

Operation of clearing house

executing customer standing instructions

E. Cash Department Different functions of cash department are:

Receiving cash from the depositors.

Payment of cash to the client as demanded.

Checking all areas of deposit slip whether it is clearly written or not (name,
account no, amount)

Verifying the payment cheque when to pay the money to the clients whether
the information is available or not like dale, amount, account no etc.

All the received and payment money must be written down in the receipt &
payment register along with account no.

Cash register must be maintained by the Cash Officer.

Maintenance of daily cash balance.

Preparation of monthly cash balance.

F. Accounts Department Accounting of AIBL can be broadly classified in the

following two groups:

I) General Accounting

85 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 I I) Investment Accounting

I) General Accounting General Accounting includes accounting for-general and

administrative expense, funding operation and fixed assets.
Activities of accounting subsection includes:
Registration of voucher.
Posting of voucher in the ledger.
Preparation of unadjusted trial balance.
Preparation of adjustments (accrual of expenses and income).
Preparation of adjusted trial balance.
Maintenance of accounts with Bangladesh bank & other banks.
I I) Investment accounting: The Company maintains its books of account based on the
operating method of accounting according to Generally Accepted Accounting Standards in
conformity with one the provision of relevant regulations of Bangladesh Bank.

Collection of receipts i.e. rental, profit

Control of collection i.e. maintains cheque register.
Reporting of information regarding rental collection i.e. cash collection
statement.
Acknowledgement to the Account holder i.e. statement of accounts.
Preparation of overdue statement i.e-overdue statement for BOD.
Activities regarding delinquent charge i.e.-billing.
Treatment of irregular investment Account.
3.7 Automated Clearing House:

Automated Clearing House (ACH) is an electronic network for financial transactions in

the United States. ACH processes large volumes of credit and debit transactions in
batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH
direct debit transfers include consumer payments on insurance premiums, mortgage
loans, and other kinds of bills. Debit transfers also include new applications such as the
point-of-purchase (POP) check conversion pilot program sponsored by NACHA-The
Electronic Payments Association. Both the government and the commercial sectors use
ACH payments. Businesses increasingly use ACH online to have customers pay, rather
than via credit or debit cards.
3.8 Cheques:

86 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Cheques are a type of bill of exchange and were developed as a way to make payments
without the need to carry large amounts of money. While paper money evolved from
promissory notes, another form of negotiable instrument, similar to cheques in that they
were originally a written order to pay the given amount to whoever had it in their
possession (the "bearer"). Technically, a cheque is a negotiable instrument instructing a
financial institution to pay a specific amount of a specific currency from a specified
transactional account held in the drawer's name with that institution. Both the drawer and
payee may be natural persons or legal entities. Specifically, cheques are order
instruments, and are not in general payable simply to the bearer (as bearer instruments
are) but must be paid to the payee. In some countries, such as the US, the payee may
endorse the cheque, allowing them to specify a third party to whom it should be paid.
3.6 Electronic funds transfer:
Electronic funds transfer (EFT) is the electronic exchange or transfer of money from one
account to another, either within a single financial institution or across multiple institutions,
through computer-based systems. The term covers a number of different concepts:

Cardholder-initiated transactions, where a cardholder makes use of a payment card

Direct deposit payroll payments for a business to its employees, possibly via a
payroll service bureau

Direct debit payments, sometimes called electronic checks, for which a business
debits the consumer's bank accounts for payment for goods or services

Electronic bill payment in online banking, which may be delivered by EFT or paper
check

Transactions involving stored value of electronic money, possibly in a private

currency

Wire transfer via an international banking network (carries a higher fee in North
America)

Electronic Benefit Transfer

3.12 Products and Services Provided by AIBL

87 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 AIBL
products and services

Depost Investment Foreign ATM Locker

MSME
Schemes Schemes Trade services services

Figure 2C: Products & Services of AIBL

AIBL products and services has four important types, they are:

Deposit schemes
Investment schemes
Foreign Trade (Import, Export, Remittance)
MSME (Micro,Small and Medium Enterprise)
ATM Services
Locker Services

3.4 Short Notice Deposit (SND):

Bank accepts such kind of deposit, which is withdrawal at notice of seven to Twenty
nine days, and thirty days and over with profit. The account is maintained like that of a
Mudaraba savings account.
Sundry & other deposits
Sundry & other deposits are also treated to be accept under Al-Wadia Principle.Al Arafa
Islami Bank Limited do maintain various term deposit account and deposit scheme
Hajj account deposit
Hajj deposits at monthly installment for any period from 1(one) year to 20(twenty) years
are accepted under the above scheme to enable the account holder to perform Hajj .
One Time Hajj deposit
For once time a certain amount of money can be deposited from 1(one) year to
25(twenty-five) years under the one time Hajj scheme to perform Hajj at the maturity
period.
nstallment Term Deposit (ITD)
According to Mudaraba rules this deposit is accepted. The main attraction is its profit is
calculated on daily deposited amount. Under this scheme a form has to be filled. One
parson can have more than one ITD account in same branch Its sustain for:

88 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

The schemes of Mudaraba Milliner Deposit Scheme (MMDS)
accounts are:
Name of Scheme Maturity Monthly Receivable

Periods Installment Amount

MMDS 3 years 23950.00 10.00(Lac)

4 years 16950.00 10.00(Lac)

5 years 12750.00 10.00(Lac)

6 years 9950.00 10.00(Lac)

7 years 8000.00 10.00(Lac)

10 years 4600.00 10.00(Lac)

12 years 3345.00 10.00(Lac)

15 years 2170.00 10.00(Lac)

20 years 1150.00 10.00(Lac)

89 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Mudaraba Lakhopoti Deposit Scheme (MLDS) account are

Name of Scheme Maturity Periods Monthly Installment Receivable

Amount

MLDS 3 years 2375.00 1.00(Lac)

5 years 1275.00 1.00(Lac)

8years 670.00 1.00(Lac)

10 years 460.00 1.00(Lac)

12 years 335.00 1.00(Lac)

Mudaraba Term Deposit (MTDR)

Multiple of 1.00 Lac & over in multiples of that are accepted for 3or 5 years and the bank give profit of Tk.969for each
month on per Lac and rest amount are adjusted with deposit. There are several type of deposit is known as Mudaraba
Term Deposit
They have also Mudaraba Kotipoti Deposit Scheme and Mudaraba Double Deposit

Scheme of various periodic.

90 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Under AIBL Products and Services Islami Bank Bangladesh Ltd. has below
categories:

Deposit Investment
Schemes Schemes

Al Wadiah Current Deposit (CD)

Investment in Agricultural Sector

Mudaraba Short Notice Deposit (SND)

Investment in Industrial Sector
Mudaraba Savings Deposit (MSD)

Mudaraba Term Deposit (MTDR) Investment in Business Sector

Monthly Profit Based Term Deposit
(PTD)
Investment in Foreign Trade
Monthly Installment Based TermDeposit
(ITD)
Al-Arafah Monthly Hajj Deposit
Investment in Construction and Housing
(MHD)
Monthly Installment Based Marriage
Savings Investment Schemes (MIS)
Investment in Transportation Sector
Al-Arafah Savings Bond (ASB)

Foreign Currency Deposit (FCD) Hire Purchase (HPSM)

Pension Deposit Scheme (PDS)

Investment Schemes in Masque and
Mudaraba Lakhpoti Deposit Scheme Madrasa (MMIS)
(LDS)
Mudaraba Millionaire Deposit Scheme Village and Small Investment Schemes
(MDS) (GSIS)
Mudaraba (Special) Pension Deposit
Scheme (MSPDS) Small Enterprise Investment Schemes
Mudaraba Kotipoti Deposit Scheme (SEIS)
(MKDS)
Mudaraba Double Benefit Deposit Scheme Consumer Investment Schemes (CIS)
(MDBDS)

Figure 2D: Deposit Schemes & Investment Schemes of AIBL

91 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Foreign Remittance of AIBL
4.1 Definition of Foreign Remittance:
A remittance is a transfer of money by a foreign worker to an individual in his or her
home country. Money sent home by migrants competes with international aid s one of
the largest financial inflows to developing countries. Foreign remittance can be defined
as the purchase and sale of freely convertible foreign currencies as admissible under
exchange control regulations of the country. A looser translation is the sending of the
money home while working in a foreign country. Thousands of people are currently
working and living in a country that is not their home, and sending funds regularly back
to their families in their home country.

4.2 Meaning of Foreign Exchange:

Foreign Exchange means exchange foreign currency between two countries. If we
consider Foreign Exchange as a subject, then it means all kind of transactions related
to foreign currency. In other wards foreign exchange deals with foreign financial
transactions. H.E Evict defined Foreign Exchange as the means and methods by which
rights to wealth expressed in the currency of one country are converted into right to
wealth in terms of the currency of another country.
4.3 Bank Remittance:

When money is sending from one place to another place for the customer is another
important service of banks. In addition, this service is an important part of countrys
payment system .For this service, people; especially business persons can transfer funds
from one place to another place very quickly. There are four Kinds of techniques for
remitting money from one place to another place. These are:

5) Demand Draft (DD)

6) Telegraphic Transfer (TT)
7) Telephone Transfer (TT)
8) Pay Order (PO)

7 DD (Demand Draft):
A Demand Draft (DD) is an instrument containing an order by the issuing branch upon
another branch known as drawee branch, to pay a certain sum of money to the payee.
Commission for Demand Draft (DD) is 0.1% of the principal amount and Vat .15% of the
commission amount and telex charge is Tk. 50.00.

92 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 8 TT (Telegraphic Transfer):

Issuing branches request another branch to pay specified money to the specific payee on
demand by Telegraphic/ Telephone.

The basic three types of local remittances are discussed below:

Points Pay Order Demand Draft TT

Explanation Pay order gives the Demand draft is an Issuing branch
payee the right to order of issuing requests another
claim payment from bank on another branch to pay
the issuing bank. branch of the same specified money to
bank to pay the specified payee
specified sum of on demand by
money to payee on telegraph/ telephone.
demand.
Payment From Payment from Payment from Payment from
issuing branch only. ordered branch. ordered branch.
Generally Used to Within the clearing Outside clearing Anywhere in the
Remit Fund house area of issuing area of issuing country.
branch. branch. Payee can
also be the purchase.
Payment Process of Payment is made 1. Confirm that the 1. Confirm issuing
the Paying Bank through clearing. DD is not forged branch. 2. Confirm
one. 2. Confirm with payee A/C 3.
sent advice. 3. Confirm amount 4.
Check the Test Make payment 5.
Code 4. Make Receive advice
payment.
Charge Only commission Commission +Telex Commission
charge +Telephone.

9 Pay orders:
Are the safest way of making payments, as they are drawn on the bank issuing them. So
there is no scope of forgery. A pay order is issued only within the members of the
Bangladesh bank clearing house (Dhaka Metro). It can be issued in favor of a customer
holding an account, by debiting his account and crediting bills payable liability A/C. The
account payees submit the pay order in their specific banks. The banks then send the pay
order to the clearing house where these are received by the respecting issuing banks. The
issuing banks verify the pay order, which are then send back to the respecting banks and
payment made by debiting the payable account.

Telegraphic and Telephone Transfer (TT) are almost the same, both are them are known
as TT in short.

4.4 Local Remittance:

93 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Local Remittance is another significant part of the general Banking. The bank receives and
transfers various types of bills through the remittance within the country. The bank charges
commission on the basis of bill amount.

4.5. Types of Remittance:

Between banks and non banks customer

Between banks in the same country
Between banks in the different centers.
Between banks and central bank in the same country
Between central bank of different customers.

4.6. Functions of Foreign Exchange Department:

Foreign exchange department performs many functions to facilitate the foreign exchange
transactions. These functions are:

Facilitating import trade

Facilitating export trade

Provide funded and non-funded credit facility

Maintaining foreign currency accounts

Selling of foreign currency bonds

The foreign exchange department consists of mainly two sections- L/C operations and
foreign
Remittance, which perform all the functions mentioned above.

Foreign exchange
Department

L/C operations Foreign Remittance

Import Export
operation operations Foreign Inward Outward
Current A/C Remittan Remittan
94 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
ce ce
4.7. Regulation for the foreign exchange division:

Foreign Exchange transactions are being controlled by the following rules and
regulations:

Foreign Exchange act 1047.

Bangladesh bank issues Foreign Exchange Circular from time to time to

control the export, import and remittance operation.

Ministries of commerce issues export and import policies giving basic

formalities for import and export.

Sometimes CCI issues public notices for any kind of change in Foreign
Exchange transaction.

Bangladesh bank published two volumes in 1996. These comprise the

complete instructions to be followed by the authorized dealers in
transactions related to Foreign Exchange.(Bangladesh Bank, 2012)

4.8. Types of Foreign Remittance:

In broad sense foreign remittance includes all sale and purchase of foreign currencies on
account of import, export, travel and other purpose. However specifically foreign
remittance means sale and purchase of foreign currencies for the purpose other than
export and import. There are two types of remittance:
Outward remittance
Inward remittance

Foreign
Remittance

Inward Outward
Foreign Foreign
Remittance Remittance
95 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
 Foreign outward remittance: The sending country, where the wage earner
islocated. The sender uses a bank or foreign exchange company to send money
toforeign country. Many of the receiving banks have established remittance
relationshipwith currency houses and banks in other countries to better facilitate
the flow ofremittances into the country.

Outward remittance may be made for following purposes-

Travel.
Medical treatment.
Education purpose.
Attending seminar.
Balance amount of F.C account.
Profit of foreign companies.
Technical assistance.
New exporters up to USD 6000/- for business promotion.
F.C. remittance can be made for fare, exhibition from export retention quota.

Foreign Inward Remittance: The receiving country where the beneficiary
resides.The bank receives the money that has been sent from the sending person
in thecountry in which the money has been earned.There is no restriction on
inward remittances by Bangladesh bank other than the prescribedformalities to be
complied with by the exporters and other recipients. The authorized dealercan
freely purchase foreign currencies.
4.9 Foreign Inward remittance and modes of inward remittance:

Inward Remittance: The remittance which enters into our country from
anothercountry. The inward remittance may be follows-
Exports Proceeds
Wages earners
Investment
Grand
96 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
 Aids
UN peace keeping
Commission/Service Charges
Fees
Tourisms
Business Development/Fair

Modes of foreign Inward Remittance

T.T-Telegraphic Transfer
M.T-Mail Transfer
D.D- Demand Draft
T.C- Travelers cheque
P.O- Pay order
Besides this, foreign inward remittance also includes remittances on account of
export,purchase of T.C, foreign currency notes and coins, Cheques issued on foreign
banks in favorsof beneficiaries in Bangladesh etc.
1. T.T: Cable or telex instruction of payment is called as Telegraphic Transfer,
where foreign bank issues a T.T in a favor of someone in Bangladesh. It credits the
amount, received from the remitter to the NOSTRO A/C of its correspondent bank on
receipt of the T.T; the paying bank in Bangladesh will make payment of the proceeds of
the T.T in foreign currency o in equivalent Bangladeshi Taka to the beneficiary.
2. M.T: M.T is an instrument issued by a remitting bank to the paying bank
advising in writing to make payment of certain amount to specific beneficiary.
3. D.D: A demand draft is negotiable instrument issued by drawn on other bank
with the instruction to pay a certain amount to the beneficiary on demand.
4. T.C: It is an instrument issued by a Banks/Companys payable to the
purchaser on presentation.
5. P.O: A payable order is written under issued by a branch of bank, to pay a
certain sum of money to specific person or bank. It may be said as to be a bankers
chequeasit issued by a bank and payable by itself.

4.10 Foreign outward remittance and modes of outward remittance:

97 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Outward remittance-The remittance which goes out from our country to
another country, in other words the term outward Remittance means sales of
foreign exchange in any form and includes not only remittances by MT, TT,
Draft etc.
Butalso sale of Travelers Cheques, Traveler Letters of credit, Foreign currency
notesetc. The outward remittance may be as follows:
Import payment
Treatment
Education
Tours
Commission/Fees/Service Charges
Business Development

Modes of foreign outward remittance

The foreign outward remittance can be of following types:
Foreign Tele-graphic Transfer (FTT)
Foreign Demand Draft (FDD)
Foreign outward bill for collection (FOBC)
The Details are as follows:
Foreign Tele-Graphic Transfer: The transfer procedure is same as for local TT.
Thecustomer either pays cash or gets his account debit. Since all the arrangements are
throughmain office. Bank sends credit advice to Head office, which gives credit to the
correspondentbank in that particular bank, ultimately giving credit to required/designed
bank and account.For ITT, Head office account is debited and credit is given to the
beneficiary account,
If beneficiary does not have account with BAL, then M-form is required to fill in
statingpurpose of remittances.
Foreign Demand Draft: FDD is also an instrument to transfer fund from one
country toanother. The customer can make payments in three modes:
Debits to foreign currency account
Foreign currency (cash)
PKR (M-form is to be filled in)

98 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Foreign outwards bills for collection:When customer deposits foreign
cheque/travels cheques to bank Alfallah, it becomes. The banksliability to collect it and
is than seen to the bank of expected country and payment is made afterconfirmation, the
foreign bill is sent for correction first and then payment to beneficiary is made. It
iscommonly presented through clearing.

4.11. Remittance performance and process of AIBL:

Our 10 expatriates are a source of pride for Bangladesh. They represent us abroad by
building our image. They also spread the richness of our cultures across the globe. In that
sense, they are the ambassadors of goodwill for Bangladesh. The foreign exchange they
send home is the second largest source of much needed foreign exchange for our
economic development. In fact, if we adjust import costs against export earnings of the
garments sector which brings highest amount of foreign exchange to the national
economy, remittance will figure as the single largest source of foreign exchange for
Bangladesh.

AIBL Bank Limited is continuously striving to build its remittance business by rendering
quality services through a network of reputed banks and exchange houses around the
globe along with an extensive network in the country to deliver money to the
beneficiaries in the safest form and quickest possible time.

4.12. Features of AIBL Remittance Services:

No service charge from beneficiaries in Bangladesh
Instant Cash Withdrawal facility from any branches of Southeast Bank
Confidentiality of transactions
Instant credit to beneficiaries accounts with Southeast Bank;
Same day cash withdrawal facility from the branches of One Bank, Mutual Trust
Bank,Jamuna Bank, Al-Arafah Islami Bank, BRAC Bank, Bank Asia, Shahjalal
Islami Bank, Mercantile Bank and First Security Islami Bank
Same day cash payment facility from 600 outlets of reputed NGOs (RDRS,
Society for Social Services - SSS and Jagorani Chakra Foundation - JCF)
Direct communication with both Sender and Receiver for solving queries relating
to cash payment/account deposit (if any)
Disbursement of foreign remittance through ATM booths using My

99 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 4.13. AIBL Bank Remittance report:

Year Remittance (million taka)

2016 50,890

2015 38,433

2014 35,447

2013 30,669

2012 20,905

Table: Remittance from 2012 to 2016 (Source: AIBL Bank Limited, 2012)

4.14. Foreign Remittance collection statement of AIBL Bank Ltd. (Corporate

Branch):

(In Million Taka)

Month 2013 2014 2015 2016

January 182.80 142.20 189.10 158.40

February 131.00 115.30 150.00 133.20

March 157.60 193.30 250.00 142.40

April 117.80 250.00 131.80 166.20

May 250.00 150.00 123.40 180.20

June 175.70 193.40 196.40 191.40

July 152.00 221.40 122.80 184.30

August 210.00 119.80 182.90 156.30

September 214.90 145.10 148.60 213.00

October 281.40 179.30 194.70 166.40

100 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

November 212.40 157.10 113.60 151.00

December 257.60 123.50 200.30 160.50

Total 2342.20 1990.40 2013.60 2003.30

(In Million
Taka)

4.15. Foreign Trade:

At the end of 2010, the total Foreign Exchange Portfolio (Import, Export & Remittances)
was TK. 92,408.40 Million showing a growth of 52.86% of this Bank in compare with
the corresponding year. The total export of the Bank was TK. 23,546.10 million in 2009,
which was increased by 36.08% to TK. 32,042.40 in 2010. Similarly, the amount of
import has increased from TK. 34,074.80 million in 2009 to TK. 55,934.10 million in
2010 experiencing a growth of 64.15%.
The Inward foreign remittance business of the Bank recorded a tremendous growth rate
of 56.48% from TK. 2,832.28 million to TK. 4,431.90 million in comparison with last
year due to starting live dealing by Treasury & delivery of quality services to the clients.

4.16. Purpose of foreign remittance:

Family maintenance
Treatment
Educational Fees
Business development
Marriage Expenses
Air tickets or visa processing for wage earners
Hajj performance Expense
Gift and donation
Land purchase
Construction of house building or commercial complex
Buying of flat or apartment
Purchase of plot from real estate company
Sending installment against flat or plot booked at housing fair in London. New york etc.
Buying of USD dollar investment or premium bonds

101 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.17. Foreign Remittance and its Impact in the Social-Economic Development of
Bangladesh:
Totally the contribution of foreign remittance rising of living standard can not be
described so easily. So the importance of foreign remittance in the economy of
Bangladesh is widely recognized and requires little reiteration.

Impact on the GNP:

Increase in foreign remittance also increases the national income. As the national income
increase the consumption of goods by the country people also increase. So, production of
goods by the different organizations increases as well. It increases our countrys GNP.

Impact of remittance on consumption:

As the remittance increase the consumption of goods by the country people also
increase.

Increase savings:
Foreign remittance that comes from different developed countries is increasing the level
of our savings. The remittance received by our country people is saving in different
banks by making long term or short term deposit.

Increase capital:
Remittance received from different developed countries which is saving in different
banks a big source of capital. This huge amount of money is investing is different project
by the bank.

Impact of remittance on investment:

Foreign remittance is increasing the investment of our country. The remittance is using
for small and big investment in different project, establishing firm or industry, small or
big shop which increases the proper utilization of money.

Increase employment:
As the investment increase, the employments of our country also increase. The people of
our country are getting jobs in different project, firm or industries.

Impact of remittance on import:

102 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

It has a bad impact on our economy. By increasing remittance, it also increases
consumption of foreign product. It increasing the import of foreign product day by day
as well, Peoples have enough money to buy foreign product, although government is
trying to save our domestic companies by implementing necessary rules and regulation.

4.18. Process of Foreign Remittance:

Fund transfer from one country to another country goes through a process which is
known asremitting process. AIBLhas 146 Domestic branches. The bank has
NostroAccount with a foreign bank Standard Charted Bank, New York. Bangladeshi
expatriates are sending foreign remittances to their local beneficiary, through that
account.

Al-ArafahIslami Standard Chartered

Bank Ltd. Bank NY

Beneficiary Remitter

Now, the Bangladeshi expatriates will contact with Standard Charted Bank to
remit fund to Bangladesh.
Then Standard Charted Bank will credit the NOSTRO A/C of NBL and send
the message through SWIFT.
Next the local banks Head Office international division will receive telex
message and the TFMD will record the advice and generate the advice letter to
the respective branch of the bank.
The branch will first decode the test, verify signature and check the account
number and name of the beneficiary.
After full satisfaction, the branch transfers the amount to the account of
thebeneficiary and intimates the beneficiary accordingly.

103 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 But sometimes the complexity arises, if the foreign Bank has no NOSTRO A/C
in which country where the expatriates want to remit fund. Then the Foreign
Bank has to take help of a third bank who has NOSTRO A/C with intended
Bank.

4.19. Importance of foreign Remittance:

Generally, remittances are monies transferred from one individual to
another.
International remittance are transfers of funds by foreign workers-remitters-who are
livingand working in developed countries typically to their families who are still living
in theirhome countries. Examples include Middle Easterners living in Europe, Latin
Americans in the United States, and Koreans or Filipinos in Japan. Although the use
remittance fund varies from country to country, the recipients of remittances commonly
rely on them for living costs, education, and investments.

Remittance have increased significantly and become a major source of

income for developing countries.
The topic of remittance has become a popular one in the international financial
community indecent years as both the rate and volume of remittances have increased
exponentially. Gathering accurate data on international remittances has been very
difficult for a number of reasons, including the fact that a good portion of the transfers is
made on formal basis.

Some official statistics do exist, however and they present in 2006, the word bank
reported the remittances grew to approximately 206 billion dollar others put the figure at
298 billion. These flows have led analysts to conclude that the growth of remittances has
exceeded private capital flows and official development assistance to developing
countries. Moreover, remittances are a reliable source of foreign capital; in the 1990s
they were the least volatile source of foreign exchange.

4.20. Remittance management Software:

The system was designed with features to support corporations which require multi-
currency, multi-country operations. The following features can be used at remote
locations to collect remittances for foreign destinations.

104 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.21. Remittance Software Features:
Remitter information
Beneficiary information
OFAC list compliance
Agent management
Exchange house management
Head office management
Branch office management
Cover fund management
Remittance distribution
Real time transaction
Checker & Maker
Anti-money laundering facility & transfer list check
Various exchange house data input & data distribution facility
Range wise commission
Bank wise exchange rate
Auto feedback facility
Multicurrency conversation
Instant remittance check
Bangladesh & abroad country compliance
SMS facility(Remitter & Beneficiary)
Online access and control
Scheduled processing-Facilities day-to-day operations
Automated stop payments
Risk management

4.21. Special Features of Remittance Software:

Commission can be setup separately in cash pay and account pay

Exchange rate can be separately setup for own bank and other bank
Transaction verification can be done in both the exchange house and Head office
Application and Beneficiary information will be checked each transaction
OSFI/OFAC checking facility

105 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Application document preservation

4.22. Impacts of Foreign Remittance:

4.22.1 Positive Impacts on Development:

One positive aspect of international remittances is that they represent a flow of
income for families in the developing world who might not otherwise receive
assistance. Whether it is because of their location or social status, the majority of
remittance receivers are the invisible poor.
Remittances also help to foster a sense of financial democracy. The availability
of remitted funds may also indirectly help the communities within developing
nations where the money is spent.
Remittances are also a stable form of external finance, and, unlike other forms of
private capital inflows, remittances remain stable and often increase during times
of economic hardship.
It is usually held that the amount of money remitted is inversely related to the
strength of the receiver's national economy. That is, remittances increase sharply
following economic crises.
Remittances, therefore, provide a safety net during sudden economic downturns,
financial crises, and unexpected short-falls.
The impact of remittances may be even more pronounced in countries
experiencing warfare or unrest.
Moreover, when displaced refugees come to have financial or political leverage
in their new countries, they may be able to indirectly or directly mount pressure
against their home country in order to promote peace and stability.

4.22.2 Negative Aspects and Potential Drawbacks:

When the immigrants continuously remit funds to their home countries, the
potential exists for the receiving community to become dependent upon those
remittances. An abrupt halt in the flow of remittances in such a case can be
devastating.

106 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Another potential drawback informs the debate as to whether remittance
transfers, asa whole, increase or decrease inequality between the haves and the
have-nots.

4.23. Remittance Services in the Banking Sectors:

Among different services rendered by a commercial bank to its customers, remittance
facilities are very important and popular to the customer. Remittance means sending of
money from one place to another. Money order, telegraphic money order through
telegraph/post office is the common method of sending fund.
Bank also provides this facility to its customers by means of receiving money at one
branch of the bank and arranging for payment in another branch within/outside the
country. This facility is extended to its customers to enable them to avoid risk arising out
if theft, loss etc. A Remittance is an important service provided by banks to customers as
well as non-customers. Since it is not agree service it is a source of income for the bank.
Parties involve in remittances Four parties involved in remittance:-
Remitter
Remit tee
Issuing Bank/ Institution
Paying Bank

Remitter:-
One who initiates, or requests for a remittance. The remitter comes to the issuing or
originating branch, asks for a remittance to be made, and deposits the money to be
remitted. The bank charges him a commission for this service. He may or may not be the
branchs customer.

Remit tee:-
A Remit tee is also called the beneficiary, or the payee. The person in whose name the
remittance is made. A remit tee is also the one who receive the payment.

Issuing Bank/ Institution:-

107 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Issuing bank or institution is the bank or institution that sends or affects the remittance
through demand drafts, telegraphic transfers, or mail transfers.

Paying Bank/ Institution:-

Paying Bank also knows as the drawer branch. The branch in which the instruments were
drawn has to make the payment (usually located in a different city country)

In industrialized countries, the remitter is often more educated than the general
population of her home country, and has immigrated to accept an employment
opportunity or follow an educational pursuit.
Lack of transparency.

4.24. Mode of Foreign Remittance Services:

A remittance is money sent from one person to another in any form generally to another
country. The Bank provides this facility in various ways. The customer can choose any
mode of remittance depending on the time available for sending the remittance. Given
below is theist of the common remittance options.
Mode of Remittance Normal Time Taken
Instant Transfer Instantaneously
Online remittance 1 to 5 days depending on the mode of online remittance chosen
Speed remittance Within 1 day
SWIFT 1 to 3 days depending on the location of beneficiary branch
Draft / Cashers Cheque 7 days to 28 days
International Money Order 7 days to 28 days
Foreign Currency Cheque 7 days to 28 days

4.25. Foreign Remittance Activities of Al-Arafah Islami Bank Ltd. Ladighirpar

Branch Sylhet.

4.25.1 World Wide Exchange House:

The Western Union

108 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

The Company is a financial services and communications company based in the United
States. Its North American headquarters is in Meridian, Colorado, though the postal
designation of nearby Englewood is used in its mailing address. Up until it discontinued
the service in 2006, Western Union was the best-known U.S. Company in the business of
exchanging telegrams. Western Union has several divisions, with products such as
person-to person money transfer, money orders, business payments and commercial
services. They offered standard "Cablegrams", as well as more cheerful products such as
Candy grams, Dolly grams, and Melody grams. Western Union, as an industrialized
monopoly, dominated the telegraph industry in the late 19th century. It was the first
communications empire and set a pattern for American-style communications businesses
as they are known today.

Money Gram International Inc.

Money Gram is a money transfer company based in the United States with its
headquarters in Dallas, Texas. It has operation centers in St. Louis Park, Minnesota and
Brooklyn Center, Minnesota, a call center in Lakewood, Colorado, and regional and
local offices around the world. Money Gram businesses are divided into two categories,
consisting of Global Funds Transfers and Financial Paper Products. The company
services individuals and businesses through a network of agents and financial institution
customers.

Samba Financial Group

Samba is one of the regions largest and most acclaimed financial services groups with
an unrivalled reputation for world class financial solutions comparable with the best in
the world. Since inception, Samba has been leading the industry in innovation with a
long list of industry firsts, playing a major role in the modern transformation of banking
in Saudi Arabia. Indeed, their world class services, market-leading products and superior
technology have made them one of the most successful financial services brands and the
most internationally acclaimed bank in Saudi Arabia and even the Middle East.

Xpress Money Services Ltd

Xpress Money is one of the fastest growing money transfer brands in the world with
thriving presence across 5 continents. Established in 1999 in the United Kingdom, the
brand has grown by leaps and bounds and has spread its geographical presence across
109 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd
150 countries in over a decade. Working with some of the largest banks and non-banking
financial companies, Xpress Money has been able to establish one of the largest
remittance networks in the industry. Present across 170,000 locations currently, Xpress
Money is focused on rapid expansion to the far corners of the globe.
Secure, simple and Safe, Xpress Money is not just about international money transfers.
Its away to make your dreams come true!

Instant Cash
Instant cash provides a state of the art electronic Money Transfer System. Developed for
the masses across the globe, Instant Cash charges the competitive fees for remittances
and is backed by the latest technology for reliability. The product is monitored and
serviced by our dedicated customer service professionals to deliver a fast and reliable
service. How to Pick Up a Money Transfer Money can only be received in person, just
visit our branch or an agent.

Present the ICTC Number Instant Cash Transfer Code. Tell sender's name and country
the money was sent from with amount that was sent. Show your identification card to the
agent. Sign the receipt that the Agent gives you. The Agent will give you the money that
was sent to you.

Ez Remit
Ez Remit launched in June 2003 is the money transfer product of BFC Exchange
Limited, in the United Kingdom and was established to provide a remittance service to
growing expatriate communities. It offers by the minute money transfer facilities across
the globe. In2009, along with Bahrain Financing Company and Bahrain Exchange
Company Kuwait, BFC Exchange Limited formerly named Ez Remit Limited, came
under the major stakeholders of the parent company - Bank Alkhair Formerly known as
Unicorn Investment Bank. Today EzRemit provides remittance services in over 30
countries with more than 40,000 agent locations.

4.26. Key Obligations for Foreign Remittance Services:

Identity and verify the customers
Obtain information on customers requesting electronic fund transfers

110 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Monitor customers transactions
Maintain proper customers records
Report transactions to the Financial Intelligence Unit
Implement appropriate internal controls and systems to protect bank from being
used for money laundering and terrorist financing purposes.
The bank must undertake specific procedures to identify customers with whom
the bank has an on-going business relationship.
Identification and Verification of a Customer's Signature.
Identification and Verification of Occasional Transactions.
Obtain complete information on customers requesting electronic fund transfers
When dealing with electronic fund transfers, the bank must obtain accurate and
complete information about the customer requesting to transfer funds or the
originator of the transfer.

4.27. Foreign Remittance Earned by Al-Arafah Islami Bank Ltd. Laldighirpar

Branch:
Remittance plays a significant role for any economy. It helps the poverty level in
Bangladesh. It also accounts for about 66 percent of the countrys foreign currency
reserves, providing Bangladesh with a strong and stable external position Bangladesh.
Foreign remittance Amount at AIBL is following, 2014-2017 (Jan-June): In Amount

Year 2014 2015 2016 2017 (Jan-

June)
Amount(in Taka) 214154227 193686201 213996839 128060223

(Source Bank Officer) Table 4.1: Foreign Remittance Amount at AIBL,

111 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 250000000

200000000

150000000

100000000

50000000

0
year 2014 2015 2016 2017 (Jan-June)

Figure 4.1: Foreign Remittance Amount atAl-Arafah Islami Bank Ltd. Laldighirpar
Branch.

Interpretation: From the above table we can clear that AIBL gained highest
remittance from 2014 up to the inflow is 214154227 taka. It is also observed that
due to political crisis on 2015 the rate of remittance was downward. In this time
the amount of remittance was 193686201 taka. It plays a negative sign for our
economy.

4.2 Total income received from Foreign Remittance by Al-Arafah Islami Bank
Ltd.Laldighirpar Branch in 2016.

Month Amount (In Taka)

January 20000
February 35000
March 48000
April 55000
May 75000
June 100000
July 150000
August 110000

112 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 September 130000
October 113000
November 120000
December 115000

Total income received from Foreign Remittance in 2016 (BDT)

160000

140000

120000

100000

80000

60000

40000

20000

Interpretation The bar chart represents the Total income received from Foreign
Remittanceby.Al-Arafah Islami Bank Ltd. Laldighirpar Branch in 2016. Though it
started form the lowest level in January, it gradually increased until the june,2016. Then
in August it again decreased. Between July and September the foreign Remittance
Received by Al-Arafah Islami Bank Ltd.Laldighirpar Branch dramatically increased.
After July the income received are not consistent .

4.3 Inward Remittance during the month of Jan-June 2017 in AIBL

113 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Table 4.3: Inward Remittance during the month of Jan-June 2017 in AIBL
Month Taka
January 13826437
February 13383750
March 19231623
April 17381606
May 30167409
June 24069443
(Source: Bank Officer)

35

30

25

20

15

10

0
Jan Feb March April May June
Inward Remittance during the
13826437 13383750 19231623 17381606 30167409 24069443
month of Jan-June

Figure 4.3: Inward Remittance during the month of Jan-June 2017 in AIBL

Interpretation: From the above table we can see that Al-Arafah Islami Bank
Ltd.Laldighirpar Branch gained highest remittance in the month of May 30167409 taka.
It observes that due to public holyday on the month June there was fall in the earning of
remittance.

4.4Comparison AIBL Remittance with other Banks in the month of June 2017

Table 4.4: Comparison AIBL remittance with other Banks

114 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 (Million USD)
Bank June-16
AIBL 20 57
Bank Asia Ltd. 53 70
Dutch Bangla Bank Ltd. 67 11
Islami Bank Bangladesh Ltd. 343 92
National Bank Ltd. 63 61
Pubali Bank Ltd. 52 12
Uttara Bank Ltd. 48 38

(Source: Bangladesh Bank)

AIBL Uttara
3% Bank Ltd Bank Asia Ltd
Pubali Bank Ltd 8% 8%
8%
Dutch Bangla
Bank Ltd
National Bank 10%
Ltd
10%

Islami Bank
Bangladesh Ltd
53%

Figure 4.4: Comparison of Earning Foreign remittance in AIBL and other Banks

Interpretation: In the month of June we can see that, AIBL (USD 20.57 million) is
the7th position in our country receiving remittance, which is 3 percent of total remittance
received. There is 1st position Islami Bank Bangladesh Ltd. USD 343.92 million (53
percent). Dutch Bangla Bank Ltd. USD 67.11 million (10 percent) which gained 2nd
position in earning remittance.

4.5 Remittance by Expatriate Bangladeshis

115 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Foreign employment and remittance sent by the Bangladeshi expatriates have immense
contribution to the economic development of Bangladesh through lowering
unemployment, poverty alleviation and swelling up foreign exchange reserve.
Remittance is the main source of foreign finance for developing countries s like
Bangladesh with limited internal resources and foreign capital.

Table 4.5: Remittance Sent by Expatriate

Year In Crore Taka % Increase

2001 11590 - 79

2002 16484 - 53 37 68

2003 18484 - 53 11 58

2004 21285 - 95 11 95

2005 27304 - 33 19 38

2006 38366 56 28 94

Y e a r I n C r o r e T a k a % I n c r e a s e

2 0 0 1 1 1 5 9 0 . 7 9

2 0 0 2 1 6 4 8 4 . 5 3 3 7 . 6 8

2 0 0 3 1 8 4 8 4 . 5 3 1 1 . 5 8

2 0 0 4 2 1 2 8 5 . 9 5 1 1 . 9 5

2 0 0 5 2 7 3 0 4 . 3 3 1 9 . 3 8

2 0 0 6 3 8 3 6 6 . 5 6 2 8 . 9 4

116 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 2 0 0 7 4 5 7 3 9 . 8 6 1 9 . 8 9

2 0 0 8 6 3 1 0 9 . 1 5 3 7 . 1 4

2 0 0 9 7 3 9 9 8 . 0 0 1 8 . 9 8

2 0 1 0 7 6 5 0 0 . 0 0 2 . 6 1

2 0 1 1 7 7 5 0 0 . 0 0 1 . 2 9

2 0 1 2 7 9 4 0 0 . 0 0 2 . 3 9

2 0 1 3 8 2 0 5 5 . 0 0 3 . 2 4

2 0 1 4 8 3 1 0 0 . 0 0 1 . 2 8

2 0 1 5 1 0 5 3 6 5 . 0 0 2 6 . 8

(Source: Bangladesh Bank)

120

100

80

60

40

20

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Remittance sent by Expatriate 11590.816484.518484.5 21286 27304.338366.645739.963109.2 73998 76500 77500 79400 82055 83100 105365

117 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 Figure 4.5: Remittance Sent by Expatriate

Interpretation: The Kingdom of Saudi Arabia is the largest source of remittance as non-
residents Bangladeshis living there sent $2.694 billion from the kingdom in 11 months
(until May) of the 2015-16 fiscal year. Bangladesh received a total of $7.729 billion
from all eight countries in the Middle-East. The data show Bangladesh received third
highest remittance of $2.212 billion from the USA until May in the fiscal year of 2015-
16 while Malaysia, with $1.204 billion.

4.6 Top ten remittance earning countries in 2016

Highest remittance earning countries position all over the world in 2016 is given below:

Table 4.6: Top Ten Remittance Earning Countries in 2016

Top 10 Countries 2016 (Billion USD)

I n d i a 7 2

C h i n a 6 3

P h i l i p p i n e s 2 9

M e x i c o 2 5

F r a n c e 2 4

N i g e r i a 2 0

E g y p t 2 0

P a k i s t a n 2 0

G e r m a n y 1 7

B a n g l a d e s h 1 5

(Source: World Bank)

118 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 80

70

60

50

40

30

20

10

0
Philippine Banglades
India China Mexico France Nigeria Egypt Pakistan Germany
s h
billion usd 72 63 29 25 24 20 20 20 17 15

Figure 4.6: Top Ten Remittance Earning Countries in 2015

Interpretation: As per view of the paper Migration and Development Brief of World
Bank April 26, 2016, Bangladesh is the 10th Position during 2015 among worlds top ten
remittance earner countries and 3rd position in South Asian region. India is the worlds
top most remittance earner and China attained the 2nd position.

4.7 Yearly Presentation of Foreign Remittance according to Company

119 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

C o m p a n y N a m e Inward Yearly Percentage

W e s t e r n U n i o n 3 %

E x p r e s s M o n e y 1 5 %

M o n e y G r a m 1 0 %

R I A F x o n l i n e 9 %

I n s t a n t C a s h 5 %

P l a c i d E x p r e s s 3 0 %

O t h e r s 2 8 %

Figure 4.7: Percentage of Yearly Most Inward Companies

Percentage of Yearly Most Inward Companies

30%

25%

20%

15%

10%

5%

0%
Western Express Money RIA Instant Placid Others
Union Mony Gram Fxonline Cash Exppress

Interpretation: The above chart represents the yearly most inward remittance
companies. Inthe chart horizontal axis represents the company name and vertical axis
represents thepercentage of inward remittance. In the chart it is shown that Placid
Express and Express money send more money than others company. And these
companies based on UK, Spain andUSA. Middle East country like Saudi Arabia,
Kuwait, Abudabi, use Placid Express and Express money in most times.

120 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

4.8 Yearly Presentation of most inward Remittance Country:

Most Inward Remittance Country Inward Yearly Percentage

U . S . A 2 0 %

U . K 3 0 %

S o u d i A r a b i a 1 0 %

K u w a i t 5 %

I t a l y 1 5 %

A u s t r a l i a 1 0 %

O t h e r s 1 0 %

In the above table show that the most common inward remittance country and their
averagePercentage. In our city most people live in abroad and most of the people depend
on foreignincome.

Figure4.8: Most Inward Remittance Countries

Inward Remittance Country

35%

30%

25%

20%

15%

10%

5%

0%
U.S.A U.K Soudi Arabia Kuwait Italy Australia Other's

Inward Remittance Country

Interpretation: The chat represents the most inward countries in yearly. In the
charthorizontal axis represents the country name and vertical axis represents the

121 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

percentage of theinward remittance. The chart shows that inward remittance was high in
UK and USA, mostremittance is come from these countries. On the other hand Italy also
sends 15% remittanceon average.

Chapter 05

5.1 SWOT Analysis:

The SWOT analysis comprises of the organizations internal strength and weaknesses
andexternal opportunities and threats. SWOT analysis gives an organization an insight of
whatthey can do in future and how they can compete with their existing competitors.
This tool isvery important to identify the current position of the organization relative to
others, who areplaying in the same field and also used in the strategic analysis of the
organization.

Strengths of Al-ArafahIslami Bank Ltd.Laldighirpar Branch.

In Bangladesh AIBL has wide range of customer base and is operating efficiently in this
country. AIBL has a bulk of qualified, experienced and dedicated human resources.
AIBL has the reputation of being the provider of good quality services to its potential
customers, AIBL recently providing ATM facility to the customers. This is will make a
great strength of AIBL. Other strengths are bellows:
Service is served as first in first out basis.
Experienced top management thats why the officer always gets guidelines from
the management when they face any difficulties.
Providing online Banking Service.
Highly Skilled and Motivated Workforce.
Huge Number of Loyal Clients.
Weaknesses of Al-Arafah Islami Bank Ltd.Laldighirpar Branch.

Every email are sent late by the Head office, after almost 12.00 PM. Due to late
arrival the customers have to wait for long time or they return without talking

122 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 their money, who come from village or long distance place or who have urgent
need for money they have to suffer for it.
Sometimes network create problem, so in that time they cannot pay the money of
online money transfer companies like Western union, Xpress money etc.
Weaknesses in the infrastructure that is used to provide remittance service.
Existing system is time consuming for both officer and customer.
Lack of communication between different levels of management.

Opportunities of Al-Arafah Islami Bank Ltd.Laldighirpar Branch.

Expanding brand image of the worldwide through providing foreign remittance

service.
Country wide network.
As Sylhet is a potential Metropolitan city; there is a opportunity of industrial
advance.
Threats of Al-Arafah Islami Bank Ltd.Laldighirpar Branch.

Competitors are coming with full preparation so competition is increasingday by

day.
Lack of customer confidence.
Governments regulations and regulatory has been increased.
Most of the branches are located on divisional city.
Lack of modern banking facilities creating threat for it.

5.2 Findings
The project work has enriched my knowledge a lot. To have a clear picture about the
foreign remittance activities, personal observation and conversation with the employees
of the organization were conducted. While working, I always tried to keep my eyes and
ears in knowledge as best as possible about the dealing of the officials with the clients.
My observation found the finding:
Al-Arafah Islami Bank Ltd.Lalighirpar Branc hearned its highest remittance in
2014. It gained highest remittance in the month of May 2017 BDT 30167409. It
observes that due to public holyday on the month June there was fall in the
earning of remittance.

123 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 It gained 7th position among other banks in receiving foreign remittance from
different countries.This is a positive sign for the bank.
This Banks plays a great role in sending money to various rural areas through its
countrywide network.Sending money through AIBL is an easy and inexpensive
process.
A strong position in international Banking a great link with various foreign
exchange companies makes the process of collecting the foreign remittance
easier to this bank.
Modern Technology equipment such computer is not sufficient in foreign
remittance department.Sometimes officers are facing network problem so that
they couldnt serve there customer that time.
Sometimes client face some difficulties in filling up the application form and
documentation while collecting money from the branch in AIBL remittance
division.
Here is lack of employee in AIBL Laldighirpar Branch, So that they facing
problem to serve there client.
Sometimes insufficient fund from product of AIBL remittance creates problem
for the customer to collect their money.
The bank does not use any promotional tools for attracting the customer to use its
foreign exchange and remittance services and others.

5.3 Problems of Foreign Remittance management:

AIBL facing shortage of employee in their branches.
Network is not available for sometimes, so in that time they cannot pay the money
ofonline money transfer companies like- Western Union, Money Gram etc.
Weaknesses in the infrastructure that is used to provide remittance service.
Existing system is time consuming for both officer and customer.
Lack of communication between different levels of management.
There is no desk for handling customer complains.
No long term plan for managing remittance.
If the server fails to work even day then it creates problem to come foreign
remittancefrom head office to branch.

124 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Payment orders have to written, thus not paying attention towards customers during
abusy hour. And there may be mistake in issuing pay order so that customer cannot
getmoney in their account on time.

Learning Knowledge of Internship

5.1 Definition of Internship

Internship is a process to achieve practical knowledge about some theoretical

lesson. Its most important aspect is to acquire knowledge about the real position.
As a practical subject, Management needs some practical knowledge. Accounting
information system of Business studies includes an internship programs for its Bachelor of
Business Administration (BBA) programs. According to Polin Efro (1977).
Social Research is such a scientific effort which tries to discover new information
through some rational and organized system, which tries to examine the reliability
of former information, and which tries to make to new theories, systems and
conceptions to understand and Explain a human attitude.
Practical work is achieved to fulfill our knowledge. In practical work, we can realize
some problems and possible determinants of their solution.

5.2 Importance of Internship

Goods and services are produced for the purpose of using in daily life. Similarly,
Theoretical knowledge is acquired for the purpose of applying in the practical life.
The propensity of application of theoretical knowledge in practical life successfully
internship program is absolutely necessary because theoretical knowledge will be
fruitful if it can be applied in the practical life. When we can implement the
theoretical knowledge practically, we can say the knowledge is successful;
otherwise the achieved knowledge is valueless. Internship program is the way of
implementing the theoretical knowledge practically. However, the importance of
internship may be described in the following ways:

125 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

 As internship program is the practical implementation of the theoretical
knowledge, it helps to increase the quality and effectiveness of the trainer.
We can only know the problems of an organization in directly through
theoretical knowledge, but we can know the nature of the problems, problems of the
various departments, methods of solving the problems through the practical
training. So it is very important to identify the problems and eradicate the
problems.
The trend of all activities is an organization becomes growing
through practical training.
To Innovate new technique of management.
To realize the present condition of the institution.
To make policy for development of the organization.
It mentally prepares for their professions.
Internship program acts as a bridge between theoretical knowledge and
managerial practice. Internship acts as a guideline during the service period.
By internship program students can understand limitations, shortages
and practicability of their knowledge and thereby can take necessary action
for removing these limitation and shortages.

5.3 Internship experience

This report has been done as per the requirement for successful completion of the
Internship program. Exposure to the business world and acquiring practical work
experience was the primary objective of this report. I was attached with Al- Arafa
Islamic Bank Ltd at its Laldhigirpar Branch for my internship. Through internship I
got the basic idea about the corporate culture and practices. It was a great
experience. 01 May 2017 to 31 August 2017 these three month journey of my
internship with Al- Arafa Islamic Bank Limited was very delightful. I enjoyed a lot.
All the stuffs of the bank are very friendly and helpful. I was very lucky to get
chance to experience in different departments within these three months. Those
are described below:

126 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

5.3.1 Front Desk

The first department I worked was front desk. I was there from 1st October to 24th
October & November 1st to November 20th. My in charge was Menakhsy Acharjee
(Assistant Officer) is also there to help me to understand my job. I found Front Desk
a little difficult. My job was to attain and help the clients directly. I had to help
clients by providing information, helping to fill up Account opening, DPS opening,
MSS opening, DBDS opening, SBDS opening, FDR opening, MBS opening, SSS
opening forms etc.

5.3.2 Clearing

October 1st to October 24th & November 1st to November 20th I was also appointed
in clearing department. My in charge was Abul Basar (Training assistant Officer),
and Raqibul Hassan (Officer) in clearing department cheque from other banks
transaction happens. My job was to entry those transactions in a register and at the
end of the day sum up the amount and check with the automated amount from
computer. The amount must be same.

5.3.3 Cash Department:

I was in cash department from 25th October to 30th October & 20th December to 27th
December. My in charge was Salman Mahmud (Officer). There were also some other
stuff working in cash are Monika Rani Acharjee (Assistant Officer), and Khandakar
Manjur Ahmed Chowdhury (Trainee Assistant Officer).My duty in cash was to entry
cheque and deposits slips amount and number in registers and give the serial
number to the cheque and deposit slip according the register entry number. There
were two register one is to entry the cheque number and amount. Another register
is for entering deposit slips number. Cheques are entered in debit register because
with cheque bank gives money to customer which is debit and deposit slips are
entered in credit register because with using deposit slip customer deposit money
to bank which is earning for bank and that is why it is credited. At the end of the
day I had to sum up register individually and check them with automated amount
get through the computer. The amount must be same other wise it will be revised
thoroughly and correct the mistake. Another job I did there is sorting the cheque
according the prefix of the account number. I had to also sort out the Demand

127 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Payable Slip (DPS) according their type. There are three types of DPS; 3yrs, 5yrs
and 8 yrs. 1 to 10 of every month are considered as DPS hour. Everyone becomes so
busy. I got two days of DPS hour and understand what actually happens. Those days
I had to enter lots of cheques, Deposit slips and sort a huge amount of DPS.I also
entry the IPO Share items. I work this in PC.

5.3.4 Accounts Department:

Accounts Department is under General banking. 21st November to 19th December &
27th December to 31st December I worked in accounts. Within that period of time
my in charge were changed two times because of their transfer. So I get the chance
to work with two in charge. In accounts first I got Farhana Haque (Principle
Officer), she was also my onsite supervisor. Raqibul Hassan (Officer) was my in
charge. My main job in accounts is sorting the voucher. After voucher sorting me
had to attach them with related supplementary. Voucher is actually proved of the
transaction. There are various types of voucher and they are categorized by
different number. Which I had to separate and sort group wise. Supplementary is
the automated list of all transactions. Each of the transaction has related voucher.
My job was to attach them according the number and check the amount of
transaction. In voucher and supplementary the amount will be same. Otherwise
there must be some problem which will be identified and revised. After attaching
next job was balancing. Balancing means doing sum and ensuring that debit and
credit is equal. Next step is to make a cover page which is a brown color hard paper.
Then prepare it for binding in an organized format. It is prepared for binding and I
did another job was entry the amount date wise in a register.

5.1 Recommendations:
The bank management needs to have a clear operational efficiency and must through
analyzethe scopes for further development in order to retain and attract new customers
towards anyparticular branch of a bank. Therefore, it is vital for the commercial banks to
closely monitortheir performance level, which comprises the functional units, that
provides services to itsclients. To make better position in the industry banks need to

128 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

expand some activities andshould give emphasis on some field and need to introduce
new and diversified financialproducts to provide wider option to customers.
Without having an effective customer base, itbecomes difficult for any bank to compete
and sustain in the competitive market for thebanking services. Before drawing the end I
would like to offer the following suggestions forbringing improvements at AIBL:
Based on the finding some progression can be recommended in future. The
recommendations are given below:

AIBL should be developed technological Skills of its employees. It should

establish its own networking system between its branches so that they can
exchange their information faster and efficiently.
AIBL should locate their branches in the important places of the rural area so that
most people will know about the Foreign Remittance Service of AIBL.
Fund sufficiency and server correctness is required while providing services to
the clients of Non Residential Bangladeshi Remittance.
Branch should intensify its quality of client service. Customer services must be
made dynamic and prompt.
In collecting remittance, documentation must be easier for helping the clients for
collecting money.
The software in General Banking as well as foreign remittance should be
upgrade.
Bank may create a department of telephone call services from where customers
can get the necessary information about foreign remittance.
Government and the different official channels should make them concern that
channels are more easy and safe to send money from abroad.
It is suggested that the bank can enrich its interest banking services with more
resources and IT specialist.
It is essential for AIBL to arrange more training and workshop programs
regarding foreign remittance Activities.
The bank should give more attention on promotion and campaign activities.
The HRD should look into the matter that the branches are well staffed with the
right people in the right position.
The bank should adopt more technological devices to provide better services.

129 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

5.2 Conclusions:
Al-Arafha Islami Bank Limited is one of the most successful institutions of economic
infrastructure ofthe country. Banking service is extremely important in a free market
economy. ForeignRemittance system services as a control device and helps to achieve
organizational goal. So,foreign remittance is the most important factor for the
improvement of the banking serviceand organizational development. Foreign Remittance
is the second largest source of foreigncurrency of the country. Foreign remittance deals
with collection of currency, propermotivation system, performance appraisal method etc.
According to analysis and findingthere are many training program for the improvement
of the customer satisfaction andorganization. But the feedback and evaluation of the
training program is poor. If foreignremittance takes proper steps about it and it will be
fruitful for the organization.

130 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd

Reference

Instruction Book of Al-Arafah Islami Bank Ltd.

Annual report of Al-Arafah Islami Bank Ltd. (2013-2016)
Bangladesh Bank Annual Report 2015
Dr. R. R. Paul, Money Banking and International Trade (3rd Edition)
De Bryn, T and Kudus U. Dynamic of Remittance Utilization in Bangladesh
Foreign Remittance Activities of ,Internship Report, B Al-Arafah Islami Bank
Ltd.BRAC University.
Hoggson, N. F. (1926) Banking Through the Ages, New York, Dodd, Mead &
Company.
Goldthwaite, R. A. (1995) Banks, Places and Entrepreneurs in Renaissance
Florence, Aldershot, Hampshire, Great Britain, Variorum

Websites

www.foreignremittance.com
www.Bangaldesh Bank.com
www.aiblbd.com
www.businessdictonary.com/defination/foreign-remittance.html
www.investopedia.com/remittance
https://en.wikipedia.org/wiki/foreignment_remittance

131 | P a g e Foreign Remittance Activities of Al-Arafah Islami Bank Ltd