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The comparison between overall financial system of aibl and one bank ltd.

Report On
The comparison between overall financial system of aibl and one bank ltd.

Money and Banking


SUBMITTED TO:

Tahmina Akhter
Faculty of Business Administration EASTERN UNIVERSITY

SUBMITTED BY: Md. Aowlad Hossain Mir Md. Omar Faruk Lynette Sraboni Das Md. Mahabudul Hassan Sayed Muntaser Rahman Submission date: 07.02.2012 ID: 081200166 ID: 063200057 ID: 073200036 ID: 081200197 ID: 111200083

Letter of Transmittal
7th February, 2012 Tahmina Akhter Faculty of Business Administration

Subject: application for report submission.

Dear Madam, It gives us the huge pleasure in presenting the report on The comparison between overall financial system of AIBL and One Bank Limited. You assigned us to prepare report on this topic, as a part of, Money and Banking course requirement. We have tried our level best to fulfill the requirements of this course and tried to follow your class lectures & instruction while preparing this report.

This report contains Banking activities under One Bank Limited and Al arfah Islamic Bank Limited issued and there have some recommendations. We sincerely expect that this report will meet your approval and evaluation would demonstrate our ability to prepare formal report. We would be pleased to answer any query you think necessary as when need. Sincerely yours, Md. Aowlad Hossain Mir ID: 081200166 Md. Omar Faruk ID: 063200057 Lynette Sraboni Das ID: 073200036 Md. Mahabudul hassan ID: 081200197 Sayed Muntaser Rahman ID: 111200083 .

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Acknowledgement
At first we would like to thank all mighty Allah that he gives us the ability to complete this report properly. We would like to also thank to our honorable teacher because of her guide line .Without her guideline, help and incur rage it is totally impossible to prepare this report successfully. We would like to also thank to Tahmina Akhter. He friendly attitude help us to collect the information which is related to report. We would like to also thank to our friends and Bank employee, staffs who help us to visit Bank because without their participating it is unbelievable to make it as soon as possible.

Executive summary
Banks perform various roles in the economy. First, they ameliorate the information problems between investors and borrowers by monitoring the latter and ensuring a proper use of the depositors funds. Second, they provide intertemporal smoothing of risk that cannot be diversified at a given point in time as well as insurance to depositors against unexpected consumption shocks. Because of the maturity mismatch between their assets and liabilities, however, banks are subject to the possibility of runs and systemic risk. Third, banks contribute to the growth of the economy. Fourth, they perform an important role in corporate governance. The relative importance of the different roles of banks varies substantially across countries and times but, banks are always critical to the financial system. In this report we have try to find out the differences between AIBL and ONE Bank Limited. What are their difference deposit schemes, what are the loan practices, how they deal with foreign exchange division, their SME banking systematic. We have hardly tried to make this report full of information that shows an overall comparison and also differences between these two banks. We have tried to find out the overall differences and also comparison between Al-Arafah Islamic Bank and One Bank Limited.

Table of contents

Table of contents

Page No:

1. Introduction07 1.1. Origin of the Report..07 1.2. Objectives of the report.....07 1.3. Scope of the report ....................................................................................08 1.4. Methodology..........08 1.5. Limitation.......08 2. Literature Review....09-10 3. Company Overview.....11 4. Body of the report....12-36 5. Findings of the report..37 6. Recommendation.....38 7. Conclusion....39 8. References.........40

1.0 Introduction

Banks perform various roles in the economy. In this report we have try to find out the differences between AIBL and ONE Bank Limited. What are their difference deposit schemes, what are the loan practices, how they deal with foreign exchange division, their SME banking systematic. We have hardly tried to make this report full of information that shows an overall comparison and also differences between these two banks. We have tried to find out the overall differences and also comparison between Al Arafah Islamic Bank and One Bank Limited. Understanding the many roles that banks play in the financial system is one of the fundamental issues in theoretical economics and finance. The efficiency of the process through which savings are channeled into productive activities is crucial for growth and general welfare. Banks are one part of this process.

1.2 Origin of the Report

As the requirements of Money and Banking course we have to prepare this research paper under close supervision of Tahmina Akter, Lecturer, Faculty of Business Administration, Eastern University. The topic of my report is The comparison between overall financial system of AIBL and ONE Bank ltd.

1.3 Objectives of the report

Broad Objective : To identifying the overall comparison between the financial system of AIBL and One Bank Limited.

Specific objective To identify the deposit schemes of AIBL and ONE Bank Limited; To explore the card division of AIBL and ONE Bank Limited; To discover the SME Banking of AIBL and ONE Bank Limited; To discuss the overall financial system of AIBL and ONE Bank Limited; Compare the overall banking system of AIBL and ONE Bank Limited;

1.4 Scope of the report

We work on a specific Bank named One Bank LTD situated in Dhonmondi Road number 8 in Dhaka city.

1.5 Methodology

We have used both primary and secondary source for the report. As a primary source we have take interveiw of AIBL and OBL employees. As a secondary source we have go through the website of AIBL and OBL, some journals, annual reports and brocures as well.

1.6 Limitation

With great happiness we made our report within some limitations and overcome it almost. For prepare this report we faced some barrier. We have no enough experience about this kind of report writing. The report topic is totally new and innovative to us. So to do this report complete it was impossible us to talk with all bottom level employee One bank. We have taken information banking activities. Our some limitations are as follows: . Lack of proper information Lack of proper accessibility Shortage of knowledge Limitation of time The cost was another limitation of our report.

2.0 Literature Review


Understanding the many roles that banks play in the financial system is one of the fundamental issues in theoretical economics and finance. The efficiency of the process through which savings are channeled into productive activities is crucial for growth and general welfare. Banks are one part of this process. An overview of the functioning of a financial system. Lenders of funds are primarily households and firms. These lenders can supply funds to the ultimate borrowers, who are mainly firms, governments and households, in two ways. The first is through financial markets, which consist of money markets, bond markets and equity markets. The second is through banks and other financial intermediaries such as money market funds, mutual funds, insurance companies and pension funds. One of the most important functions of the financial system is to share risk and it is often argued that financial markets are well suited to achieve this aim. If both direct holdings of equities and indirect holdings in insurance companies and mutual funds are taken account of, a large amount of household assets is held in equity and only a small amount in banks in the US and UK. In both countries households are exposed to substantial amounts of risk through their holdings of equities. At the other extreme, households in Japan are shielded from risk because they ultimately hold a majority of their assets in banks and very little in equities. Although not as safe as in Japan, households asset holdings in the Euro area are much safer than in the US and UK. They point out that traditional financial theory has little to say about hedging no diversifiable Risks. It assumes that the set of assets is given and focuses on the efficient sharing of these risks through exchange. For example, the standard diversification argument requires individuals to exchange assets so that each investor holds a relatively small amount of any one risk. Risks will also be traded so that more risk-averse people bear less risk than people who are more risk tolerant. This kind of risk sharing is termed cross-sectional risk sharing, because it is achieved through exchanges of risk among individuals at a given point in time. However, importantly, these strategies do not eliminate macroeconomic shocks that affect all assets in a similar way. Departing from the traditional approach, Allen and Gale focus on the intertemporal smoothing of risks that cannot be diversified at a given point in time. They argue that such risks can be averaged over time in a way that reduces their impact on individual welfare.

Through intertemporal smoothing by banks. This involves banks building up reserves when the returns on the banks assets are high and running them down when they are low. The banks can thus pay a relatively constant amount each period and do not impose very much risk on depositors. The authors show that the incentives for engaging in intertemporal smoothing are very different in market-based financial systems. Incomplete financial markets, on the one hand, may not allow effective intertemporal smoothing. Banks perform an important role in terms of maturity transformation. They collect demandable deposits and raise funds in the short term capital markets and invest them in longterm assets. This maturity mismatch allows them to offer risk sharing to depositors but also exposes them to the possibility that all depositors withdraw their money early. Runs can involve the withdrawal of funds by depositors (retail runs) or the drying up of liquidity in the short term capital markets (wholesale runs). The importance of equity ownership by financial institutions in Japan and Germany, and the lack of a strong market for corporate control in these countries have led to the suggestion that the agency problem in these countries is solved by banks acting as outside monitors for large corporations. In Japan, this system of monitoring is known as the main bank system. The characteristics of this system are the long-term relationship between a bank and its client firm, the holding of both debt and equity by the bank, and the active intervention of the bank should its client become financially distressed. It has been widely argued that this main bank relationship ensures the bank acts as delegated monitor and helps to overcome the agency problem between managers and the firm. However, the empirical evidence on the effectiveness of the main bank system is mixed.

There is a growing literature that analyzes the advantages and disadvantages of relationships in banking If on the one hand, close and durable relationships provide better access to firms and ameliorate some of the information problems characterizing lending relationships, on the other hand, they also involve inefficiencies related to the hold-up and the soft-budget constraint problems. The hold-up problem refers to the possibility that a relationship bank uses the superior private information it possesses about the firm to extract rents, thus distorting entrepreneurial incentives and causing inefficient investment choices.

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3.00 Company overview


Al-Arafah Islami Bank Ltd: 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. 4677.28 million as on 31.12.2010. 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. 9647.45 million as on 31 December 2010, the manpower was 1711 and the number of shareholders was 49,386. 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.

One Bank Limited: ONE Bank Limited provides various commercial banking product and services in Bangladesh. Its retail banking products include deposits, such as Pensave, Edusave, MarrySave, one-two-three, school banking, monthly money maker, and corporate deposit scheme; loan products consisting of home, car, student, consumer, doctors, professional, and agri loans; and credit and ATM cards. The companys corporate banking products comprise corporate deposit and corporate salary accounts; and trade, project, and infrastructure finance. It also offers various products and services, including working capital finance and project finance for small and medium enterprises. In addition, the company provides advisory services to retail customers, and small and medium enterprises; locker services; and on-line banking service. It has a network of 50 branches and 19 ATMs. The company was founded in 1999 and is headquartered in Dhaka, Bangladesh.

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4.0 Body of the Report Overall financial performance of AIBL:


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

4.2 AIBL Deposit

Al Wadiah Current Deposit (CD) Mudaraba Short Notice Deposit (SND) Mudaraba Savings Deposit (MSD) Mudaraba Term Deposit (MTDR) Monthly Profit Based Term Deposit (PTD) Monthly Installment Based Term Deposit (ITD) Al-Arafah Monthly Hajj Deposit (MHD) Al-Arafah Termed Hajj Deposit (THD)

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Monthly Installment Based Marriage Savings Investment Scheme (MIS) Al-Arafah Savings Bond (ASB) Foreign Currency Deposit (FCD) Pension Deposit Scheme (PDS) Cash Waqf Deposit Scheme (CWD) Mudaraba Lakhpoti Deposit Scheme (LDS) Mudaraba Millionaire Deposit Scheme (MDS) Mudaraba (Special) Pension Deposit Scheme (MSPDS) Mudaraba Kotipoti Deposit Scheme (MKDS) Mudaraba Double Benefit Deposit Scheme (MDBDS)

4.2.1 Monthly Profit Based Term Deposit Scheme (MPTD)

An exciting scheme to get monthly profit based on term deposit.

An effective saving plan for individual/company and non-resident Bangladeshis to invest.

Any amount of Tk. 1 (one) lac or its multiple may be deposited in this scheme.

If necessary, the deposit may be cashed before maturity at a profit rate on Mudaraba Savings Deposit.

The scheme will have a minimum duration of 5 years.

Profit will be given just from the first working day of the next month from the starting of the scheme.

There will be Tk.937.50 estimated profit for each Tk.1,00,000/- of deposit.

Tax will be applicable on the deposited amount along with profit according to the country

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4.2.2 Foreign Trade

Foreign Trade is one of the pioneer business activities of the bank conducted by and routed through the International Division. International Division of AIBL has been functioning successfully having a good number of skilled officials headed by Senior Vice President who has a long experience in this business line.

In order to accelarate/promote the Foreign Exchange business of the bank , man powerof this Division has been exerting their all out efforts in establishing Correspondent Banking Relationship with world reputed bank , in hunting corpororate clients to boost up Import & Export business by rendering their best and skilled services.

International Division has been giving utmost importance to the functioning of treasury operation i.e dealing as it has always been considered as an important avenue for generating income of the bank . Besides, ID has continuing its utmost efforts to establish the remmitance arrangements with the world renowned companies to bring the wage earners remmittance from the Bangladeshi nationals in abroad to contribute in widening the national revenue of the country for increasing remittance.As a result significant result has been made in the Foreign Trade.

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4.2.3 Monthly Installment Based Term Deposit (ITD)

An exciting chance to save monthly a certain amount and get attractive return along with profit after tenure.

Deposit can be made by convenient monthly installment depending on your income.

Installments can be deposited in any working day of the month. Even advance installment may be deposited.

Profit will be calculated on daily basis upon your deposit.

To make it more attractive deposited amount will be weighted 1.05, which is 0.05 percent higher than 3 years term deposit.

Duration of the deposit will be 5, 8, 10 or 12 years along with installment amount of either Tk. 200/-, 300/-, 500/-, 1000/-

Any person above 18 can open this magnificent scheme. Even an ITD can be opened on behalf of a minor!

This worthwhile scheme will make your deposit to grow in the following ratio:

4.2.4 Al-Arafah Monthly Hajj Deposit (MHD)

Al-Arafah Islami Bank Limited has introduced a Monthly installment based Hajj Deposit for the middle class pious Muslims.

In this scheme, your sacred wish for pilgrimage will be fulfilled with relatively smaller monthly deposits.

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One can open only one Hajj account in his/her name which will be operated by the rules of Mudaraba.

One can prepare for the Hajj within one to twenty years and accordingly he/she can select the amount of monthly installment from the following chart.

The main attraction of the scheme is the profit based on daily stay of your deposit. In fact it holds 0.06 more weightage than a 3 years deposit.

In the year 2012 the estimated expenditure for Hajj is Tk.2,55,500/- and for the upcoming years it has been gradually incremented in the rate of 5%.

A variety of maturity period and installment size will give you the option to make it your own affordable scheme.

If the depositor wants to go for Hajj before maturity period, he/she can amend the residual amount with the deposit and fulfill his/her holy wish.

4.2.5 Monthly Installment Based Marriage Investment Scheme (MIS)

This exciting scheme is for those who want to take steps well in ahead of accomplishing the event of marriage in future.

Any matured person of any profession with sound mental health can open an account in this scheme. Even account can be opened in the name of a minor with the guidance of proper guardian.

You can select any installment size from Tk.250/-, Tk.500/- or Tk.1,000/- and make your scheme more desirable.

The main attraction of the scheme is that, profit will be accumulated on your deposit

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in a daily-stay basis with a weightage of 0.98 rate.

4.2.6 Mudaraba Millionaire Deposit Scheme (MMDS)

With this excellent scheme your deposit will increase to million taka!

The size of monthly installment may be 24400/-17530/-13500/-10800/-8800/-5400/4100/-2870/-1700/- taka.

The main attraction of this Mudaraba-based scheme is that, profit will be accumulated on your deposit in a daily-stay basis. To make it a more important scheme it will have a weightage of 1.05, which is 0.05 more than that of a 3 years deposit.

Monthly installment can be deposited on any working day from any branch. One can even give standing order to make payment of the installment from his savings account maintained with the branch. Advance deposit is also possible.

This scheme comes with exciting investment facility. One can take advantage of 80% of his/her deposit as investment facility.

Tax will be applicable on the deposited amount along with profit according to the country law.

4.2.7 Mudaraba (Special) Pension Deposit Scheme (MSPDS)

An unparallel scheme to make your small savings turn into a line of income in future.

In this simple but attractive scheme, your savings will be accumulated in monthly installments. Then in the future it will be source of your monthly income.

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You can decide the size of monthly deposit from Tk.500/-, Tk.1,000/- or any multiple of Tk.1,000/-.

Besides choosing favorable installment size, you also can select any maturity period from either 5, 10 or 15 years.

Your deposited amount will earn profit on daily-stay basis. This particular scheme has profit with the weightage of 1.05, which is 0.05 more than that of a 3 years deposit.

4.2.8 Mudaraba Kotipoti Deposit Scheme (MKDS)

With the help of Kotipoti scheme, your savings will rise to a mammoth amount of 10 million taka.

Various installment amounts along with different maturity periods are available in this scheme, which will definitely match your requirement.

Any person above 18 can open this magnificent scheme. Even an MKDS can be opened on behalf of a minor!

The main attraction of this Mudaraba-based scheme is that, profit will be accumulated on your deposit in a daily-stay basis. In this scheme, profit will be given with a weightage of 1.05, which is 0.05 more than that of a 3 years deposit.

Monthly installment can be deposited on any working day from any branch. One can even give standing order to make payment of the installment from his savings account maintained with the branch. Advance deposit is also possible.

Tax will be applicable on the deposited amount along with profit according to the country law.

This scheme comes with an exciting investment facility. One can take advantage of

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4.2.9 Mudaraba Double Benefit Deposit Scheme (MDBDS) A fabulous fixed deposit scheme operated strictly by the rules of Islamic Shariah.

80% of his/her deposit as investment. Any person above 18 can open this magnificent scheme. Even an MDBDS can be opened on behalf of a minor! Any person can open this scheme in his/her own/joint name, any business organization, educational institution, govt. or non govt. organization, NGO, semi govt. or cooperative organizations can open account and deposit their savings in this scheme to get higher profit.

In this Mudaraba based scheme one can deposit Tk.10,000/- or its multiple.

Under this scheme with life of 6 years, your deposit will earn profit in an incremental ratio. That's why within just 6 years of time your deposit will be doubled in return.

Tax will be applicable on the deposited amount along with profit according to the country law.

This convenient scheme comes with an exciting investment facility. One can take advantage of 80% of his/her deposit as investment loan.

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4.2.10 Al-Arafah Termed Hajj Deposit (THD)

For the people who hold the holy desire to go for the Hajj with an onetime deposit along with bank's given profit there on, Al-Arafah Termed Hajj Deposit has been introduced.

After maturity, onetime deposit will meet up the expenses of Hajj.

One can prepare for the Hajj within five to twenty five years and he/she can deposit the required amount accordingly.

Initial amount will be deposited under the procedure of Mudaraba. The main attraction of the scheme is that, profit will be accumulated on the deposit in a daily-stay basis. In fact it holds 0.10 more weightage than on 3 years deposit.

This scheme can be opened with own name, or in the name of any predecessors or close relatives.

After opening this Hajj account, if someone cannot go for pilgrimage for any unavoidable reason or dies, the provision of "Badla Hajj" can be given.

If the Hajj account is opened in the name of other person, and that person fails to go for pilgrimage for any unavoidable reason or dies, the arrangement of "Badla Hajj" must be done. Under no circumstances the deposited amount will be withdrawn.

After maturity, if the deposited amount along with accumulated profit is less than the Hajj expenditure on that particular year, the depositor can make up the residual amount at once and go for pilgrimage.

A separate form has to be filled up to open Termed Hajj deposit.

Under this scheme one can open an account in the name of a minor or a child too.

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Tax will be applicable on the deposited amount along with profit according to the country Foreign Trade :

Foreign Trade is one of the pioneer business activities of the bank conducted by and routed through the International Division. International Division of AIBL has been functioning successfully having a good number of skilled officials headed by Senior Vice President who has a long experience in this business line.

In order to accelarate/promote the Foreign Exchange business of the bank , man powerof this Division has been exerting their all out efforts in establishing Correspondent Banking Relationship with world reputed bank , in hunting corpororate clients to boost up Import & Export business by rendering their best and skilled services.

International Division has been giving utmost importance to the functioning of treasury operation i.e dealing as it has always been considered as an important avenue for generating income of the bank . Besides, ID has continuing its utmost efforts to establish the remmitance arrangements with the world renowned companies to bring the wage earners remmittance from the Bangladeshi nationals in abroad to contribute in widening the national revenue of the country for increasing remittance.As a result significant result has been made in the Foreign Trade.

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4.2.12 SME Banking Small and Medium Enterprise (SME) is playing a significant role to the growth of overall GDP of the country. Of all industrial productions, a huge part stems from SME. In order to boost up the small and medium enterprises of the country, Bangladesh Bank has recently advised the commercial banks to enhance the flow of investment and offered directives and policies to supervise and monitor this sector.

Purpose of SME Banking:


To facilitate small and medium level entrepreneurs

To boost up the small business in the country

To facilitate the growth of agro-industries

To create employment

To broaden the base of Islamic Banking in the society

To encourage women entrepreneurs

Modes of SME Banking

Working Capital Investment

Bai-Muajjal

Murabaha / Murabaha TR

MPI / MPI- TR

Mudaraba

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Musharaka

Fixed Capital Investment

HPSM (Equity required)

Mudaraba

Musharaka

Rate of Profit/ Rent

Working Capital Investment : 16% (On Reducing Balance Method)

Fixed Capital Investment : 15% (On Reducing Balance Method)

As SME has emerged as a thrust sector, Al-Arafah Islami Bank Ltd. also considers it important to extend and enhance finance for the same. Keeping this idea in the forefront, the bank has prepared an integrated policies, methods and procedures for SME investment.

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Eligibility
Permanent resident of Bangladesh

The age must range between 25 years to 60 years

Physically fit and capable of working hard

Capable of reading & writing

Capable of managing his / her business successfully

Sufficient Infra-structure and skilled personnel

At least 02 (two) years experience in the applied business

Having Transparent CIB Report

Valid Licenses, such as- Trade License, VAT registration, TIN, NOC from Environment Department (where applicable)

Other terms and conditions stipulated by the bank

Securities Against Investment


Personal guarantee of spouse/parents/other family members.

In case of limited companies, guarantees of all directors other than nominated directors shall be obtained.

Registered mortgage of immovable properties with registered Power of Attorney (for 2 lac and above).

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Third party personal guarantee (at least one).

Post dated cheques for each installment and one undated cheque for full investment value including full mark-up profit.

Hypothecation on the inventory, receivables, advance payments, plant and machinery.

Bank may relax the security for investment amount up to 2 lac for the growth of SME investment.

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4.3 Overall financial performance of One Bank Limited:


4.3.1 PRODUCT DEPOSIT Pensave scheme Pensave: is a specially designed scheme for the socially conscious citizens. This special saving scheme will provide the financial security during your retirement days. Pensave is a secured future of your years ahead. Rules: One copy of attested passport size photograph of Applicant. One copy of passport size photograph of each of the Nominees should be submitted. The Account should be opened within the first 10 days of any month. The Account cannot be opened in joint names. The Depositor cannot change the installment size or tenor after deposit of the first installment. A person can open more than one Account of similar/different installment size(s).

Withdrawal Terms: If the deposited amount is withdrawn within one year, no interest will be paid. If the deposited amount is withdrawn after one year but before the end of tenor, interest will be given at the prevailing Savings Interest Rate. On completion of the tenor, the entire payables will be paid to the Depositor after one month from the date of last monthly installment deposited.

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Edusave scheme Education is getting more and more expensive day by day. Hence Edusave is a far-sighted scheme that bridges your dream and reality. Edusave can support your expenditure for higher study at home or abroad. Rules: One copy of attested passport size photograph of Applicant. One copy of passport size photograph of each of the Nominees should be submitted. The Account should be opened within the first 10 days of any month. The Account cannot be opened in joint names. The Depositor cannot change the installment size or tenor after deposit of the first installment. A person can open more than one Account of similar/different installment size(s).

Withdrawal Terms: If the deposited amount is withdrawn within one year, no interest will be paid. If the deposited amount is withdrawn after one year but before the end of tenor, interest will be given at the prevailings Savings Interest Rate. On completion of the tenor, the entire payables will be paid to the Depositor after one month from the date of last monthly installment deposited.

Marry save scheme Marry save is a marriage scheme brought to you by ONE Bank Limited. The scheme is equally attractive to parents and our younger generation having plans to start a family in near or distant future. Marrysave can relieve your worries at the time of marriage by financing a part of the expenditure involved. Marrysave can also support starting up a new family in a new home by funding the costs.

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Rules: One copy of attested passport size photograph of Applicant. One copy of passport size photograph of each of the Nominees should be submitted. The Account should be opened within the first 10 days of any month. The Account cannot be opened in joint names. The Depositor cannot change the installment size or tenor after deposit of the first installment. A person can open more than one Account of similar/different installment size(s).

Withdrawal Terms: If the deposited amount is withdrawn within one year, no interest will be paid. If the deposited amount is withdrawn after one year but before the end of tenor, interest will be given at the prevailings Savings Interest Rate. On completion of the tenor, the entire payables will be paid to the Depositor after one month from the date of last monthly installment deposited.

One-Two-Three scheme ONE 2 3 Scheme is a lucrative offer from ONE Bank Limited making your deposits grow by folds over a certain period of time. ONE 2 3 Scheme requires a fixed deposit of Tk.5,000/ or its multiple for your chosen tenor.

Rules: One copy of attested passport size photograph of Applicant. One copy of passport size photograph of each of the Nominees should be submitted.

Deposit Receipt: A ONE-2-3 Deposit Receipt will be issued at the time of opening the account

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In case of loss or damage of the Deposit Receipt, at the request of Depositor(s), the bank may issue a Duplicate Receipt. Rules pertaining to Issuance of Duplicate Receipt will then apply

Pre-mature Encashment:

Deposit may be withdrawn at any point in time, in case of emergency.

Credit facility: Depositor(s) can avail Loan/Overdraft facility against pledge of Deposit Receipt up to 90% of the deposit upon fulfillment of terms and conditions applicable for Loans & Advances extended by the Bank. If the Depositor expires after availing a Loan/Overdraft, Nominees/Heirs will be paid the balance amount after making full adjustment of Loan/Overdraft including accrued interest and other charges, if any.

School banking scheme

School banking is a special product designed by OBL only for the students with a vision to inculcate savings habit and familiarize young generations with banking transactions fixed deposit of Tk.5,000/ or its multiple for your chosen tenor. The product is a savings account in nature named "Student Savings Account (Minor)" with full of ease.

Features of the product: Daily Interest: Interest will be calculated on daily balance and credited to the account on half yearly basis.

No Charges: There will be no charges and no minimum balance requirement to maintain the account.

ATM Card: Each account holder will receive an ATM Card at free of cost and no fees on renewal will be required. 29

Special Kit: Each account holder will be warmly greeted with a special attractive kit containing a pen, a notebook, a deposit book and ATM card holder.

Reward: Reward comes with every century. Monthly highest depositor will be rewarded with attractive gift voucher subject to opening of 100 accounts of the school.

Banking at School: Arrangement may be made with the school authority that OBL officials would be present in the school premises, at a prearranged time, to enable the students to deposit money to their bank account even at school premises, in addition to the bank branches.

Rules: A specially designed simple Account Opening Form will be available at the school or at any nearby OBL branches. Photograph duly attested by the institution authority/bank official/any person acceptable to OBL. Guardian must give consent to open the account in the Account Opening Form. Opening Deposit as minimum as Tk.500/-

Future plan:

OBL has plan to make arrangement with the school authority so that students/guardians can deposit the required school fees at any OBL branches suitable for them or through Student Savings Account.

Monthly Money Maker scheme

Monthly Money Maker Scheme is a special type of Fixed Deposit Account which provides the applicant with monthly interest accrued from the Fixed Deposit to the applicant's savings/current account. The key features of this product are: Deposit Amount: In multiples of Tk.50,000.00 (Taka Fifty Thousand Only). Initial Deposit Date: Any day of the month.

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Interest Due: One month after the initial deposit date, the interest will be credited to the savings/current account. Tenure: 5 Years Rate of Interest: 12% (simple) Savings Account: Clients must have or open a savings/current account through which initial deposit will be collected.

4.3.2 Corporate Deposit Scheme

Product Category: Monthly Deposit Amount: Client Category: Deposit Frequency: Interest Rate: Tenure: TDS:

Recurring Deposit Tk.10,00,000 (Taka Ten Lacs Only) Corporate (NOT for individuals) Monthly 9.5% 5, 8 & 10 years Tax on interest earned is applicable at the rate prevailing at the time of maturity.

Loan product:

Difference between Retail Loan and SME Loan Retail Loan Requirement Loan Amount No Trade License SME Loan Trade License

Max: Tk.50,00,000 at a time or in a cumulated amount. However, availability of loan amount is dependent on the type of security to be facilitated by the loan applicant. Security Description Unsecured (Additional supporting PG) Loan Amount Up to Tk.3,00,000

PG, Hypothecation of Goods / Items to be Up to Tk.10,00,000 Purchased PG, Hypothecation of Goods / Items to be Up to Tk.50,00,000

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Purchased, FDR and/or any other cash collateral other than PDC and UDC Interest Rate Loan Tenure Processing Fee Penalty Interest 18% 12 60 months 1% of approved loan amount or Tk.1,000 whichever is higher 3% on past due amount or Tk.250 whichever is higher

Early Settlement Partial Settlement

Flat 1% of outstanding loan amount or Tk.500 whichever is higher 1% of outstanding amount to be added to the partial pre payment amount or Tk.500 whichever is higher. At least 25% of outstanding amount to be partially adjusted. Additional loan can be availed. However, total loan exposure not to exceed Tk.50,00,000 cumulative. 1 PG of spouse. If spouse not available then PG of another Doctor + 1 PG of a renowned Doctor or colleague who is a Doctor.

Additional Loan Personal Guarantor

4.3.3 Corporate Banking


Corporate Deposit Account

The Corporate Deposit Accounts provide depositors with one of the most flexible and competitive range of options currently available in the marketplace.

Key features of the Corporate Deposit Account range include: Competitive rates Interest paid on a monthly basis Instant access - At all times subject to our Terms and Conditions Fixed-term - Options available as per our Daily Rates sheet Foreign exchange facilities

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Corporate Salary Account

The Corporate Salary Accounts are designed to offer payroll solutions for our client companies through a 24 x 7 environment. We leverage on our extensive network of distribution channels spread across all our branches.

Benefits to Employers: Efficient salary disbursal Transfer salaries/reimbursements directly from your current account with OBL to your employee's accounts Single-instruction salary credit - Same day salary credits for all companies having Corporate Account with OBL Dedicated Relationship Manager at major locations to understand your financial needs

Benefits to Employees: No minimum balance criteria Unparalleled Access - Anywhere banking facility through our network of Branches, ATMs and Internet banking facility (available soon) Your salary account cheques payable locally at all OBL locations

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4.3.4 Finances

Trade Finance(Letter of Credit) Project Finance Infrastructure Finance

4.3.5 SME Services of One Bank

Objectives: To assist SMEs (Industry/Trading/Service) access to finance. To meet the need for Financing SMEs towards overall growth of the economy & employment. To expand bank's exposure in SME Segment. To make self-reliant SMEs and to habituate them in banking.

Purpose and Tenure: Working Capital Finance (up to 03 years ) - Short and Mid Term Working capital finance. - Business Expansion on current product line. - Avail funds against secured investment. Project Finance (up to 05 years ) - Purchase vehicles to be used in business (e.g. covered van, pick-up van). - Purchase machines to increase production. - Office/Business premises renovation. - Purchase office equipment. - Purchase expensive medical equipments for clinic or hospital. - Avail funds against secured investment.

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Repayment Opportunity: Overdraft with quarterly reduction of limit or EMI basis for Working Capital Finance. Project finance (term loan) on EMI basis. The minimum and maximum loan amount for SMEs is Tk 2 Lacs and Tk 50 Lacs.

Security Requirement: Financing up to Tk 10 Lacs is allowed against hypothecation and personal guarantees. Financing up to Tk 50 Lacs is allowed against hypothecation and registered mortgage over immovable properties - for all groups.personal guarantees. Financing up to Tk 15.00 Lacs is allowed against hypothecation and personal guarantees for Women Entrepreneurs.

Eligibility of applicant : Ideally a sole proprietorship concern. Age of the applicant has to be within 25-52 years and Bangladeshi citizen. Business established for minimum 02 years (03 years for women entrepreneurs). Monthly sales turnover is more than Tk 6 lacs (for urban areas) and Tk 3 lacs (for rural areas). Operating in a rented / owned premises for a minimum period of 2 years. SMEs having total assets (excluding land & building) between Tk 50,000/- to Tk 1 Crore. Taxpaying business firm. Having good financial track record.

Eligibility of Guarantor: Age has to be 25-52 years. Reputed business man or professional having sufficient income to repay the entire loan. Executive/departmental head of large corporate body or multinational companies. Taxpaying individual, etc.

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Documents required: Trade License current and 02 years old. Photograph, business card, passport/National ID/driving license of applicant. Current utility bill of business house and residence of the applicant. TIN certificate of the applicant. Bank account statement if any. Sanction Letter or statement of loan account of active loans. Stock, Receivables and sales statement, etc. Any other valid document reflects stability in the business.

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5.0 Findings

AIBL has more than 11 investment services; AIBL has more than 17 deposit schemes; AIBL has monthly profit based investment service; AIBL has monthly installment based investment service; AIBL has a very advanced foreign trade service; AIBL has a special scheme that is monthly Hajj Deposit; Other than that they have marriage schemes, pension schemes etc; In their SME plan they have a SME service for their customers; One Bank Limited has different types of deposit schemes; They have Pensave scheme and that is a specially designed scheme for the socially conscious citizens. This special saving scheme will provide the financial security during your retirement days.

They have Edusave scheme because Education is getting more and more expensive day by day. Hence Edusave is a far-sighted scheme that bridges your dream and reality.

One Bank has Marry save scheme that is a marriage scheme brought to you by ONE Bank Limited. The scheme is equally attractive to parents and our younger generation having plans to start a family in near or distant future.

They have ONE 2 3 Scheme that is a lucrative offer from ONE Bank Limited making your deposits grow by folds over a certain period of time. One bank has a very special scheme that is School banking scheme that is a special product designed by OBL only for the students with a vision to inculcate savings habit and familiarize young generations with banking transactions fixed deposit of Tk.5,000/ or its multiple for your chosen tenor.

They have corporate deposit scheme; Other than that they have various types of loans like- car loan; consumer loan; student loan; doctors loan; professional loan; agri loan etc. One bank also has credit card system.

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6.0 Recommendation
AIBL should improve their card Division; They should improve their SME plan system; They should increase their schemes for the general customers; They should also have to improve their installment based service; One Bank should improve their card division; They should emphasis on their different deposit schemes They should expand their foreign exchange section; They should develop their loan section as well.

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7.0 Conclusion:
We have covered the overall financial system of both banks. Banks act as delegated monitors and ensure that firms use the resources allocated to them effectively. They also play an important role in sharing risk in the economy by diversifying and smoothing fluctuations over time. These are positive aspects of the roles banks play. However, the fixed nature of the claims they issue can cause fragility in the financial system. Banks play an important role in providing funds for firms and helping them and the economy to grow. They are also important for corporate Governance. We have tried to find out the overall differences and also comparison between Al Arafah Islamic Bank and One Bank Limited. Understanding the many roles that banks play in the financial system is one of the fundamental issues in theoretical economics and finance. The efficiency of the process through which savings are channeled into productive activities is crucial for growth and general welfare. Banks are one part of this process.

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8.0 References:

Retrieved from 30 January from Google website: http://www.al-arafahbank.com/ Retrieved from 30 January from Google website: http://www.al-arafahbank.com/profile.php Retrieved from 30 January from Google website: http://www.al-arafahbank.com/Deposit.php Retrieved from 30 January from Google website: http://www.al-arafahbank.com/Investment.php Retrieved from 30 January from Google website: http://www.al-arafahbank.com/sme.php Retrieved from 30 January from Google website: http://www.onebankbd.com/ Retrieved from 30 January from Google website: http://www.onebankbd.com/pensave.php Retrieved from 30 January from Google website: http://www.onebankbd.com/sme.php Retrieved from 30 January from Google website: http://www.onebankbd.com/about-obl.php Retrieved from 1 February from Google website: http://fic.wharton.upenn.edu/fic/papers/08/0819.pdf

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