Al-Arafah Islami Bank Limited

Al-Arafah Islami Bank Limited an interest-free Islamic Shariah Bank, started its activities on 27 September 1995. A Shariah Council of the bank maintains constant vigilance to ensure that the activities of the bank are being conducted according to the precepts of Islam. The bank renders banking services under the Bank Companies Act 1991. The management of the bank is vested in a 13-member board of directors. The managing director of the bank is its chief executive officer. The registered head office of the bank is at Motijheel, Dhaka.

Basic Facts and Economic Indicators (In Million Taka).

Indicators	2004	2005	2006	2007	2008	2009
Indicators	2004	2005	2006	2007	2008	2009
Authorized Capital	1000	1000	2500	2500	2500	5000
Paid up Capital	587	678	854	1153	1384	1799
Reserved Fund	488	542	836	884	839	2299
Deposits	10108	11644	16775	23009	31470	38355
a) Call Deposits	4811	2539	2979	2266	3460	4589
b) Term Deposits	5297	9105	13796	20743	28010	33766
Loans and Advance	8150	11474	17423	19214	29723	36134
Investment	-	-	-	87	88	1502
Total Asset	12850	15337	21368	30182	39158	50577
Total Income	1121	1453	2172	2955	4414	5281
Total Expenditure	809	904	1203	2199	2841	3532
Foreign Currency Trading	13068	18019	28865	41599	55533	60452
a) Export	3639	4931	9143	12714	20176	23556
b) Import	9137	12632	18821	27042	32685	34074
c) Remittance	292	465	901	1843	2672	2832
Total Manpower	802	771	912	1036	1077	1296
a) Officers	723	45	866	957	994	1197
b) Staff	79	726	46	79	83	99
Correspondent Banks	-	15	15	17	17	19
Total Branches (in numbers)	40	41	46	46	50	60
a) Domestic	40	41	46	46	50	60
b) Overseas	-	-	-	-	-	-
Agriculture Credit
a) Loan Disbursed	8	13	15	19	16	21
b) realised	9	10	14	18	13	17
Industrial Credit
a) Loan Disbursed	550	699	2180	2171	1654	2134
b) Realsied	792	474	1242	1233	1032	1332
Loan Outstanding by Sector
a) Agriculture and Fisheries	1	3	2	16	353	588
b) Industry	384	851	785	2000	5116	13884
c) Trade and Commerce	6251	7502	1012	12320	16612	13425
d) Poverty Reduction	4	10	23	54	10	16

Source Government of Bangladesh, Ministry of Finance, Banking and Financial Institution Division, Bank o Arthik Prothisthan Samuher Karjaboli [Annual Report on Banks and Financial Institutions], 2004-05 to 2009-10.

Al-Arafah Islami Bank invests all of its surplus funds on the basis of the trade mode of financing ensuring buying and selling of halal commodities and on a profit and loss sharing basis. A fixed percentage of income derived from investment of mudaraba deposits is distributed to the mudaraba deposit holders. The investment of the bank is supervised strictly so that no investment becomes overdue with consequential loss of investment income. Its modes of investments are: (a) mudaraba finance - purchase and sale of commodities as per requests by clients permissible under shariah regulations; (b) bai-muajjal - cost plus sale of the commodity on deferred payment basis against adequate collateral; (c) bai-salam (advance sale) - buying of goods from producers/suppliers on payment in advance after entering into a firm contract and receipt of their delivery at a future specified date; (d) ijara bil-bai (hire purchase Shirkatul Meelk) - purchase of durable items on equity participation by both the bank and the client and handing them over to the client on installment sale rental basis; (e) mudaraba - entire capital provided by the bank against firm assurance of the entrepreneur that he will manage the business properly and efficiently as manager and the profits derived from the investment will be shared in accordance with the agreement between the bank and the client; and (f) musharaka - capital is provided by the bank and the investment client on the basis of partnership, in which profit is shared in agreed ratio and the loss is shared on equity ratio. The Bank in performing its social and philanthropic activities, has established AIBL English Medium Madrasah and AIBL Library in 1991. [Muhammad Abdul Mazid]