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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
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]