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Chapter One

Introduction











1.1 Introduction

Banking system occupies an important place in a nation's economy. A banking
institution is indispensable in a modern society. Financial institutions are very
much essential for the overall development of a country. Especially banks play an
important role in the field of promotion of capital, encouragement of
entrepreneurship, generation of employment opportunities etc. Market economy or
free economy is widely used-concept about the present economy of Bangladesh.
The country adopted the concept in the late seventies with the privatization of
significant number of enterprises. The practices of free market economy started
from the eighties with the changing of the world economy. A number of initiatives
were taken from the nineties to increase the competition and efficiency in money
market, relaxation of unwanted rules and regulations, improvement of loan related
law and other situations and improve the financial base of the banks of the country.
In recent times the banking sector over the world has been undergoing a lot of
changes due to deregulation, technological innovation, globalization etc. Banking
sector in Bangladesh is lagging behind in adopting these changes.

1.2 Origin of the report

The internship program is required course for the students who are completing
BBA from the Department of Business Administration in the faculty of business
studies of Leading University, Sylhet. It is a 4 credit hour program with duration of
four months. Students who have completed all the required courses are eligible for
this program. In the internship program I was attached to the Al-Arafah Islami
Bank Limited for three months. During this period I have learned how the
organization works and how it manages its credit.
1.3 Rationale of the Study
This report is on the basis of the course requirement of BBA Program in the
Department of Business Administration of Leading University, Sylhet. Theoretical
knowledge will be little important unless it is applicable in practical aspects. As
some practical experience is required after the completion of BBA program from
as part of course requirement, I was assigned to the Al-Arafah Islami Bank Ltd-
Amberkhana Branch for 65 working days from 14
th
June 2014 to 14
th
August 2014.

The report is prepared on the basis of 60 days practical experience at Al-Arafah
Islami Bank Ltd (AI BL) that helped a lot to learn about the practical situation of a
financial institution and implement theoretical knowledge in corporate work
environment.
For a country like Bangladesh the foreign exchange activities are major indicators
of national economy. To observe & realize the movement of foreign exchange I
choose the banks foreign exchange department for my internship paper with my
supervisors consent. I tried here to analyze elaborately the facts related to foreign
exchange activities.
1.4 Methodologies

To meet the objectives of the study Ive applied various qualitative &
quantitative techniques like statistical tools & software and other relevant
methods. Formal and oral discussion, direct observation, questioning
clients and printed papers of the bank were found useful.

1.5 Source of Data
This study is mainly based on secondary data available from the various relevant
journals, annual reports of Al-Arafah Islami Bank Ltd, publications of other
relevant institutions. However the bank was a tough source of data as they lack of a
useful website & some excuse of confidentiality.

Primary sources of data:
Face to face conversation with the bank officers & staffs.
Conversation with the clients.
Different' manuals of AIBL

Secondary sources of data:
Procedure manual published by the Al-Arafah Islami Bank Ltd.
Files and documents of the branch.
Annual reports of Al-Arafah Islami Bank Limited
Different papers of Al-Arafah Islami Bank.

1.6 Objective of the Study

General Objective:
To get practical exposure to corporate culture
To understand the system and methodology adopted in conducting day to
day banking by AIBL
To get an overall idea of banking from bankers point of view.

Specific Objective:
To observe the foreign exchange operation of AIBL and their services
review the techniques used by the bank to make it lucrative.
An analysis and discussion of foreign exchange services of the bank.
To evaluate of the present performance of the bank regarding foreign
exchange.
To search the problems of this branch of AIBL
Determining the drawbacks of the existing foreign exchange system.
Recommending some guidelines to improve the effectiveness of
foreign exchange services.

1.7 Limitation of the Study
The study was thorough & systematic but there were some problems which can be
the limiting factors of the significance of the study:
The financial statements were up to 203, recent data were not
published yet.
Within such a short period of time, it was not possible for me to study
everything about Al-Arafah Islami Bank, New Elephant Road Branch.
The officers are so much busy that they cannot properly co-operate
with me, which is a problem.
Banks policy of not disclosing some data and information for obvious
reason, which could be very much useful.
Sometimes the officials were reluctant to give proper information
regarding their activities because they felt hesitation and ambiguity to
give data and information.
Lack of personal knowledge and experience.
Lack of a useful website of the bank