HRM practices in Banking

Sector: A case study on

Al-Arafah Islami Bank Ltd.
 Internship Report on

HRM practices in Banking

Sector: A case study on
Al-Arafah Islami Bank Ltd.

Submitted to:

Ms. Shammi Akter

Lecturer
Stamford University Bangladesh
Dhanmondi, Dhaka.

Submitted by:

Tareq Siddiquee (ID# BBA02707900)

2
 Letter of Transmittal

Date: May 14, 2009

Ms. Shammi Akter

Lecturer
Stamford University Bangladesh
Dhanmondi, Dhaka.

Dear Madam,

It gives me immense pleasure to present the internship report, on HRM practices in

Banking Sector: A case study on Al-Arafah Islami Bank Ltd. which was assigned to
me to learn practical knowledge as partial fulfillment of the requirement for the
Degree of BBA from Stamford University Bangladesh.

It is really providential for me to have the opportunity to prepare this report under
your guidance. This assignment was an extremely valuable experience for me. During
my internship period I had the opportunity to link my classroom (theoretical)
knowledge with practical situation. I have enjoyed every phase of this study and
consider this as an opportunity to gain valuable real life experience beyond the
academic confinement. I also had devoted myself to fulfill the requirements of
internship placement. I have tried my level best to present an overview of the
organization and my practical experience in this report.

Now, with good pleasure I hereby submit my internship report and I hope that you
would be kind enough to evaluate my performance with respect to the depth and
quality of this report. If you desire, I will be glade to provide any clarification and
explanation regarding this report.

Best regards,

Sincerely yours

Tareq Siddiquee
ID NO. BBA 02707900
Stamford University Bangladesh

3
 Internship Declaration

This is to notify that this report titled HRM practices in banking sector: A case study
on Al-Arafah Islami Bank Ltd. has been prepared as a part of my internship
formalities. It is an obligatory part of our BBA program to submit an internship report.
Moreover, I was inspired and instructed by my Supervisor Ms. Shammi Akter, HR
manager & other Bank employees for submitting a report of this kind. In this regard, I
like to mention that this report has not been prepared for any other purpose like
presentation, reproduce or investigation for any other authorities.

Tareq Siddiquee
ID NO. BBA 02707900
Stamford University Bangladesh

4
 CERTIFICATE

This is to certify that Tareq Siddiquee, ID no.02707900 student of Stamford

University Bangladesh of BBA program has completed the internee report titled HRM
practices in banking sector: A case study on Al-Arafah Islami Bank Ltd. successfully
under my supervision.

I wish her every success in life.

Supervisor

Ms. Shammi Akter

Lecturer
Stamford University Bangladesh
Dhanmondi, Dhaka.

5
 Preface

Bank is very old institution that is contributing toward the development of any
economy and is treated as an important service industry in modern world. Now a day
the function of bank is not limited to with in the same geographical limit of any
country. Due to globalization and free market economy, this industry is facing several
competitions in any country and implementation of WTO will further increase
competition. The overall performance of bank does not only depend upon the banking
industry itself but also on the performance of economy where it is operating. The
banking sector is one of the major service sectors in Bangladesh economy. There are
several types of Banks, which differ in the number of services they provide and the
clientele they serve. Although some of the differences between these types of banks
have lessened as they begin to expand the range of products and services they offer,
there are still key distinguishing traits.

The discussing report is the terminal formalities of the internship program for the
degree Bachelor of Business Administration which is compact professional program
other than specialized. This report has prepared as per academic requirements of after
the successful completion of three-month internship in Al-Arafah Islami Bank
Limited.

The main objective of the internship program was to introduce myself where related
practical field to implement the theoretical knowledge in profession life, which I have
done in my four years degree. The internship program acts at a way to work the
theory and practical together.

In this regard, I felt glad while preparing the report on the General Banking
Department and Human Resource Department as well as feel pleasure to submit this
report to the proper authorities. As creator of this report, I tried level best together all
sorts of related information need for this to be effective and meaningful.

However, after all this as a human being I believe, everyone is not beyond of
limitations in some aspects and also some minor mistakes such as syntax error or
typing mistake. Please pardon me for thats mistake and clarify these for my further
information on those matters.

Tareq Siddiquee
ID NO. BBA 02707900
Stamford University Bangladesh

6
 Acknowledgement

This report HRM practices in banking sector: A case study on Al-Arafah Islami Bank
Ltd. is an outcome of the extension of help, advice, suggestion and guidance of a
number of people without whom it would remain incomplete.

At first I want to express my Sukriah to Almighty Allah for giving me power and
knowledge to perform the task and to write the report.

I am grateful to Mr. Nazmus Sadat, Manager of Al-Arafah Islami Bank Bangladesh

Ltd. of Dilkusha branch for giving me the excellent opportunity to do my practical
orientation in his branch.

I would also like to thank Mr. Touhid Siddiquee, Manager of Al-Arafah Islami Bank
Bangladesh Ltd. Narayangonj branch for providing me necessary information of the
bank to complete my report. Moreover thanks to all the employees of AIBL especially
Mr. Rafiqul Islam, Mr. Mejbahuddin and Mr. Mojibur Rahman for their continuous
guidance and co-operation to complete the report.

My especial thanks to Ms. Shammi Akter, lecturer of Stamford University Bangladesh,

for his valuable guidance and instruction in accomplishing this report.

Finally I tried to give my best to complete this report. I must say I am fresh in the
banking sector and this few days are not enough to complete such a report. So there
might be some mistake or error due to my limited aptitude and time constraint. In this
regard, I do believe to get a kind consideration from everyone.

7
 Executive Summary

"Ahllahhul Bai-E-Wa Harramahu Riba"--Allah has permitted trade and forbidden

usury, having all Islamic banks has been established to reject usury. AIBL has
recognized in 1995 as an Islamic bank out of five Islamic banks in Bangladesh at that
time.

It has become essential for every person to have some idea on the bank and banking
procedure. By an internship program in bank students can obtain practical knowledge,
which helps to know real life situations, helping them to launch a career with some
practical experience. This report on Human Resource Department of Al-Arafah
Islami Bank Ltd has prepared as a requirement to fulfill of BBA program. This report
covers mainly the activities the overall role of HR manager in AIBL and how they
play their role is presented. Human resource managers perform an identifiable set of
activities that affect and influence the people who work in an organization. These
activities include HR planning, job analysis, recruitment, selection, placement,
training and development, performance appraisal, compensation systems, and
discipline.

To prepare this report I have to made face to face interview with HR Manager and HR
Officer of AIBL. I have also conducted an interview session on few employees of Al-
Arafah Islami Bank Ltd. The bank follows Computerized Banking System. The Bank
is operating their activities with the help of 1091 employees and 50 branches through
out the country with online banking facility. Al-Arafah Islami Bank Ltd. has formed a
training center to make effective and efficient employees, which is in their head office
at Topkhana Road, Purana Paltan Dhaka. Al-Arafah Islami Bank established
correspondent relationship with more than 200 branches of 30 banks in different cities
of the world.

The HRD of this bank has formed with 14 employees & 8 staffs. HR department Al-
Arafah Islami Bank Ltd. does not involves directly in strategic planning. The HRD
collect information from both internal and external environments. Al-Arafah Islami
Bank Ltd. checks the current employee by their number (ACR form) and the
performance & skills. The Bank always takes a look of current job market. In
planning, it follows the top-down approach. As the Bank recruit highly qualified and
experienced applicant they prefer to recruit mid-level and upper level employees
internally. The Bank follows Multi Hurdle Approach for selecting the applicants.
Training program is a regular basis program of the Bank. Every year the bank spends
a lot for the training of employees. Al-Arafah Islami Bank uses both formal and
informal processes to do performance appraisal. The bank provides compensation &
benefits on the basis of employees performance and ranking. Every employee of
AIBL is to follow all the rules and regulation provided by the bank. They have a
service rules book to maintain discipline within the bank. Their future plan to be one
of the top 10 banks of Bangladesh within next ten years.

8
 Table of Contents

A. Prefatory Part:
Title 02
Letter of transmittal 03
Internship Declaration 04
Certificate 05
Preface 06
Acknowledgement 07
Executive summery 08
Table of contents 09

B. Report Proper

Chapter One: Introduction

Origin of the report 12
Topic of the report 12
Objective of the report 12
Sources of Information 12
Scope of the report 13
Limitations of the report 13

Chapter Two: Overview of the Islamic Banking

Definitions of Islamic Banking 15
Conventional Banking & Islamic Banking 15
Difference Between Conventional Banking & Islamic Banking 16

Chapter Three: An Overview of AIBL

Status of the Bank 19
Vision of AIBL 19
Mission of AIBL 19
Goal of AIBL 19
Organogram of AIBL 24
Management System 24
Financial Highlights 25
Location of Branches of AIBL 25
Features of the AIBL 26
Foreign Correspondents and Agent 26
Nature of Business 26
Training Center 26
Divisions of AIBL

Chapter Four: Human Resource Department of AIBL

9
 General Concepts 28
Objectives of HRM 28
Basic Principles Practiced 29

Chapter Five: Human Resource Planning

Collect Information 31
Forecast Demand 31
Forecast Supply 31
Plan & Conduct Needed Program 32
Feedback on Planning 32

Chapter Six: Job Analysis

Job Description 34
Job Specification 34
Evaluation 34

Chapter Seven: Recruitment

Process of Recruitment 36
Recruiting Goals & Priorities 36
Recruiting Philosophy 37
Sources of Recruitment 37
Methods of External Recruitment 37

Chapter Eight: Selection

Selection Process 39
Interview Process 39
Selection of Executives 40

Chapter Nine: Human Resource Development & Training

Reasons for Training 42
Method of Training 42

Chapter Ten: Performance Appraisal

Formal 45
Informal 45
System of Performance Appraisal 45
Function of Performance Appraisal 46
Methods of Performance Appraisal 46

Chapter Eleven: Compensation

Compensation Package 48
Individual Incentives 48
Benefits 49
Chapter Twelve: Discipline
Service Rules Book 51
Progressive Disciplinary Action 52
C. Appended Part

10
 Findings 54
Recommendation 55
Conclusion 55
Bibliography 56

Chapter-1
Introduction

1.1 Origin of the report

1.2Topic of the report
1.3 Objectives
1.4 Sources of Information
1.5 Scope of the Report
1.6 Limitations

11
1.1 Origin of the Report:
In todays world only academic education does not make a student perfect to become
competitive with the out side world. So internship is highly needed to gain
idea, knowledge and experience.

Stamford University Bangladesh is one of the reputed private university of

Bangladesh has designed the curriculum of the BBA course such a way in which
international graduates will be produced. To complete the total credit hour one student
need to take complete internship programs from commercial organization. From this
internship program students get the opportunity to learn facing the real business
world.

Al-Arafah Islami Bank Limited is a place where I could learn the business dealings.
This organization has created a positive image to the customer mind by providing
better service. This Bank has introduced some Modern Islamic Banking Scheme that
has high market demand. As it maintains the pace with the competitive business
world, its activities, culture, philosophy and style leads an intern student to be the best
at any field of working life. As an intern student, I have got the opportunity to work
with this organization for three months and acquire idea about real business world.

1.2 Topic of the Report:

To write a report it is necessary to select a topic. A well-defined topic reflects what is
going on to be discussed through out the report. The topic that has been assigned by
my internship teacher is Overall HRM Practice of Al-Arafah Islami Bank Ltd. The
report has discussed how the bank operates its HRM activities.

1.3 Objectives of the Report:

The broad objective of the report is to co-ordinate classroom knowledge with practical
situation. Specific objectives of the report are:
To fulfill the course requirement of BBA program.
To acquire practical knowledge about HRM practices in banking sector.
To have practical exposure in banking environment that will help a lot of to
understand the future work life.
To analyze HRM practices in AIBL with classroom (theoretical) knowledge.
To recommend for improvement to existing HR policy of AIBL.

1.4. Sources of the Information:

a) Primary sources:
Primary sources are original works of research or raw data without interpretation or
pronouncements that represent an official opinion or position. From the primary
source I came to know all the fundamental ideas about the company.

Firstly I have interviewed the Human Resources Development Manager Mr. Mazharul
Islam and another HRD Officer of AIBL. Mainly I discussed with them verbally and

12
they gave us a company profile and an annual report of the company. I have collected
all the relevant information from there.

b) Secondary Sources:

Secondary sources are interpretation of the primary information. From the secondary
source I came to know the details about the company.
I have also collected information from the annual report, brochure,
prospectus, leaflet etc of AIBL.
For preparing this report I discussed our honorable internship instructor.
To prepare this report we also used various books on Human Resources
Management.

1.5 Scope of the Report:

The scope of the report is limited to AIBL. The whole report covers the organizational
structure, Background of the bank, objectives functions, departments, units and
business performance, activities of AIBL, the main part HRM practice in AIBL. The
scope of the study may be stated as under:

The study would help top management in planning and decision making of
HRM activities.
The study would aware the top management to take corrective and appropriate
measure timely to improve the companys HRM and other performance.
The study would help management in identifying the key areas of weakness
and strength.
The study would also help the shareholders as a guide to companys present
and future position.

1.6 Limitations of the report:

While preparing the report obstacles that I faced in collecting information are the
following.
There was a lack of adequate primary and secondary information.
Company did not give me the real information, which was needed to explore
the current market scenario of the company. For their restriction they provide
me approximate information.
When I have prepared the report that was the time of the Auditing. The
manager from whom I have collected information was very busy with the
audit team of Bangladesh Bank.
Although I have obtained wholehearted cooperation from the employees, they
could not manage enough time to deal with my report.
The obstruct is time itself. Due to time limit, the scope and dimension of the
study has been curtailed.
Sufficient books, publications, facts and figures are not available; these
constraints narrowed the scope of accurate analysis.

13
 Chapter-2:
Overview of Islamic Banking
System

2.1 Definitions of Islamic Banking

2.2 Conventional Banking & Islamic Banking
2.3 Difference between Conventional Banking &
Islamic Banking

14
2.1 What is Islamic Banking?
Islamic banking has been defined in a number of ways. The definition of Islamic
bank, as approved by the General Secretariat of the OIC, is stated in the following
manner.

An Islamic bank is a financial institution whose status, rules and procedures

expressly state its commitment to the principle of Islamic Shariah and to the
banning of the receipt and payment of interest on any of its operations.

Shawki Ismail Shehta viewing the concept from the perspective of an Islamic
economy. The prospective role to be played by an Islamic bank therein opines:

It is, therefore, natural and, indeed, imperative for an Islamic bank to incorporate
in its functions and practices commercial investment and social activities, as an
institution designed to promote the civilized mission of an Islamic economy.

Zia Uddin Ahmed says, Islamic banking is essentially a normative concept and
could be defined as conduct of banking in consonance with the ethos of the value
system of Islam.

It appears from the above definitions that Islamic banking is systems of financial
intermediation that avoids receipt and payment of interest in its transactions and
conducts its operations in a way that it helps achieve the objectives of an Islamic
economy. Alternatively, this is a banking system whose operation is based on Islamic
principles of transactions of which profit and loss sharing (PLS) is a major feature,
ensuring justice and equity in the economy. That is why Islamic banks are often
known as PLS-banks.

2.2 Conventional Banking VS Islamic Banking

Conventional banking is essentially based on the debtor-creditor relationship between
the depositors and the bank on the one hand, and between the borrowers and the bank
on the other. Interest is considered to be the price of credit, reflecting the opportunity
cost of money.

Islamic Banking, on the other hand, considers a loan to be given or taken, free of
charge, to meet any contingency. Thus in Islamic Banking, the creditor should not
take advantage of the borrower. When money is lent out on the basis of interest, more
often it happens that it leads to some kind of injustice. The first Islamic principle
underlying such kinds of transactions is that deal not unjustly, and he shall not be
dealt with unjustly. Hence, commercial banking in an Islamic framework is not
based on the debtor-creditor relationship.

15
The second principle regarding financial transactions in Islam is that there should not
be any reward without taking a risk. This principle is applicable to both labor and
capital. As no payment is allowed for labor, unless it is applied to work, there is no
reward for capital unless it is exposed to business risk.

Thus, financial intermediation in an Islamic framework has been developed on the

basis of the above two principles. Consequently financial relationships in Islam have
been participatory in nature. Several theorists suggest that commercial banking in an
interest-free system should be organized on the principle of profit and loss sharing.
The institution of interest is thus replaced by a principle of participation in profit and
loss. That means a fixed rate of interest is replaced by a variable rate of return based
on real economic activities.

The distinct characteristics, which provide Islamic banking with its main points of
departure from the traditional interest-based commercial banking system, are:

a. The Islamic banking system is essentially a profit and loss sharing system and
not merely an interest (Riba) banking system; and

b. Investment (loans and advances in the Conventional sense) under this system
of banking must serve simultaneously both the benefit to the investor and the
benefit of the local community as well. The financial relationship as pointed
out above is referred to in Islamic jurisprudence as Mudaraba.

2.3 Distinction Between the Conventional & Islamic Banking

The distinction features of the conventional banking and Islamic banking are shown in
terms of a box diagram as shown below:

Conventional Banking Islamic Banking

1. The functions and operating modes of 1. The functions and operating modes of
conventional banks are based on Islamic banks are based on the principles
manmade principles. of Islamic Shariah.
2. The investor is assured of a 2. In contrast, it promotes risk sharing
predetermined rate of interest. between provider of capital and the user
of funds.
3. It aims at maximizing profit without 3. It also aims at maximizing profit but
any restriction. subject to Shariah restrictions.
4. It does not deal with Zakat. 4. Islamic banks collect and distribute
Zakat.
5. Leading money and getting it back 5. Participation in partnership business is
with interest is the fundamental function the fundamental function of the Islamic
of the conventional banks. banks.

16
6. Its scope of activities is narrower when 6. Its scope of activities is wider when
compared with an Islamic bank. compared with a conventional bank. It is,
in effect, a multi-purpose institution.
7. It can charge additional money in case 7. The Islamic banks have no provision to
of defaulters. charge any extra money from defaulters.
8. In it very often, banks own interest 8. It gives due importance to the public
becomes prominent. It makes no effort to interest. Its ultimate aim is to ensure
ensure growth with equity growth with equity.
9. For interest-based commercial banks, 9. For the Islamic banks, it is
borrowing from the money market is comparatively difficult to borrow money
relatively easier. from the money market.
10. Since income from the advances is 10. Since it shares profit and loss, the
fixed, it gives little importance to Islamic banks pay greater attention to
developing expertise in project appraisal developing project appraisal and
and evaluations. evaluations.
11. The conventional banks give greater 11. The Islamic banks, on the other hand,
emphasis on credit-worthiness of the give greater emphasis on the viability of
clients. the projects.
12. The status of a conventional bank, in 12. The status of Islamic bank in relation
relation to its clients, is that of creditor to its clients is that of partners, investors
and debtors. and trader.
13. A conventional bank has to guarantee 13. Strictly speaking, and Islamic bank
all its deposits cannot do that.

17
 Chapter-3
An Overview of AIBL

3.1 Status of the Bank

3.2 Vision of the Bank,
3.3 Mission of the Bank &
3.4 Goal of the Bank
3.5 Organogram of AIBL
3.6 Management System
3.7 Financial Highlights
3.8 Branches of AIBL
3.9 Features of the AIBL
3.10 Foreign Correspondents and Agent
3.11 Nature of Business

18
 3.12 Training Center
3.13 Divisions of AIBL

3.1 Status of the Bank:

Al-Arafah Islami Bank Ltd was established in 1995 under the companies Act, 1994 as
a banking Company with limited Liability by shares. It is an interest frees Shariah
bank of Bangladesh rendering all types of commercial banking service under the
regulation of Bank Companies Act, 1991. The Bank conducts its business on the
principles of Musaraka, Bai-Murabaha, Bai-muazzal and Fire Purchase transactions
approved by Bangladesh Bank. Naturally its modes and operations are substantially
different from those of other conventional commercial banks. There is a Shariah
Council in the bank who maintains constant vigilance to ensure that the activities of
the bank are being conducted on the precepts of Islam. The Shariah Council consists
of prominent Ulema, reputed Bankers, renowned Lawyers and eminent Economist.

3.2 Vision of AIBL:

To become a leading banking institution and to play a pivotal role in the development
of the country.

3.3 Mission of AIBL:

To conduct interest free banking.
To establish participatory banking instead of banking on debtor creditor
relationship.
To invest through different modes permitted under Islamic Shariah.
To accept deposits on profit-loss sharing basis.
To establish a welfare-oriented banking system.

3.4 Goal of the Bank:

The motto of the Al-Arafah Islami Bank Ltd is to explore a new horizon of innovative
modern banking creating an automated and computerized environment providing one
stop service and prepare itself to face the new challenges of globalization and 12 th
century.

One of the main objectives of the bank is to be a provider of high products and
services to cater to the needs of its corporate clients and provides a comprehensive
range of financial services to national and multinational companies. The growing
technological revaluation in the bank is not so-distant future. We have already
introduced Swift, Online Banking.

19
3.5 Organogram of AIBL:

Executives: Executive Vice President:

20
 Md. Abdus Samad Sheikh A.S.M Monjurul Alam
Managing Director

Md. Mofazzal Hossain

A.T.M. Harun-ur-Rashid Chowdhury

Additional Managing Director

Rafiul Alam

Ihsanul Aziz

Deputy Managing Director

Md. Abdul Jalil Miah

Senior Vice President

Md. Emdadul hoque A.N.M. Abdus Shahid Md. Rezaur Rahman

21
Md. Mominul Haque Bhuiyan
Yakub Mohammad Fruque

Md. Atiqur Rahman
A.W.Shamsuzzuha
A.N.M. Mofidul Islam
Mohammed Ali
Md. Nazmus Saadat
Nazir Ahamed Chowdhury
Vice President
Kh. Enayat Hossain Md. Abul Hossain
Manir Ahamed Nasrul Huq Chowdhury
Muhammad Nadim Hadi Ferdous Ahmed
Muhammad Mahmoodul Hoque Syed Masodul Bari
Nd. Abdur Rahim Duary Md. Shamsul Alam
Md. Manjur Hasan

Assistant Vice President

Mohd. Ziaul Karim Chowdhury
Hasan Mahmud
Md. Aminul Islam Bhuiyan
Mohammad Yahya
Md. Husain Ahamad Faruqui
Md. Majibur Rahman
Md. Abur Rashid
Muhammad Abu Taher Md. Mahbub Alam
S.M. Jamal Uddin Iqbal Hossain Ahamed
Harun-ur-Rashid Md. Abul Quasem
Md. Abdullah Al- Mamun A.K.M. Amzad Hossain
S.M. Nazibul Islam Md. Habib Ullah
Md. Fazlur Rahman Kazi Md. Selim
Md. Showkat Islam Mbed Ahmed Khan

Board of Directors

SL Name Status with the Bank

01 Al-hajj Badiur Rahman Chairman

02 Al-hajj Mir Ahmed Sawdager Vice- Chairman

03 Al-hajj Haroon-ar-Rashid Khan Director

04 Al-hajj Ahmed Ali Director

05 Al-hajj Nazmul Ahsan Khaled Director

06 Al-hajj Abdul Malek Mollah Director

07 Al-hajj Hafez Md. Enayetullah Director

08 Al-hajj Kazi Md. Mofizur Rahman Director

09 Al-hajj Abdul Muktadir Director

10 Al-hajj Ahamedul Haque Director

22
 11 Al-Hajj Abdus Samad Director

12 Al-Hajj Engr. Kh. Mesbahuddin Ahmed Director

Ex- Officio Director

Al-hajj M.A. Samad Sheikh Managing Director

Company Secretary

Md. Mofazzal Hossain

List of Chairman of the Executive Committee (E.C)

SL. Name Designation Duration

NO
01 Al-hajj A.Z.M Shamsul Alam Chairman 18.11.1995-04.02.01
02 Al-hajj Md. Anowar Hossain Chairman 05.02.2001-11.02.01
03 Al-hajj Hafez Md. Enayetullah Chairman 12.02.2001-31.03.02
04 Al-hajj Md.Anowar Hossain Chairman 01.04.02-11.10.02
05 Dr. Bahauddin Mohd. Yousuf Chairman 12.10.02-11.10.03
06 Al-hajj A.Z.M.Shamsul Alam Chairman 12.10.03-23.07.05
07 Al-hajj Hafez Md. Enayetullah Chairman 24.07.05-18.01.2008
08 Al-Hajj Abdus Samad Chairman 19.01.2008-Till Date

Source AIBL Note Book 2008

Shariah Board
Sl.No. Name Designation Address Telephone No

01 Maolana Md Siddiqur Rahman Chairman

Janab Moulana Abu Sayeed Muhammad Ex-Director of 9551902

02 Member
Omar Ali Islamic Foundation BD
Chief Mufti
8114980
03 Janab Mufti Muinul Islam Member Darul Ifta wal Ershed Al
Markazul Islami, Dhaka
Director & Chairman
9569354
04 Janab Al-Hajj AZM Shamsul Alam Member Council Audit Committee
01819-240128
of AIBL.
Chairman
9569354
05 Janab Al-Hajj Md. Anowar Hossain Member Board of Directors
01711-527930
Al-Arafah Islami Bank Ltd.

23
 Secretary In
06 Md. Abdur Rahim Khan
charge

Manpower Position of AIBL

Managing Director

Additional Managing Director

Tea Boy
Deputy Managing Director

MCG
Executive Vice President

Senior Vice President Assistant Officer

Vice President Junior Officer

Assistant Vice President Probationary Officer

24
 Senior Principle Officer Officer

Principle Officer Senior Officer

Source - Service Rule of AIBL

3.6 Management System of AIBL:

The management team of the Bank consists of high motivated, well educated and high
skilled and dynamic executives who have been contributing substantially in the
continued growth and progress of the bank. The management is ably supported and
assisted by well motivated and experienced officers and members of staff.

3.7 Financial Highlights of the company:

(In million taka)

Particulars 2004 2005 2006 2007
Authorized Capital 1000.00 1000.00 2500.00 2500.00
Paid up Capital 586.99 677.94 854.20 1153.18
Reserve Fund 488.00 542.22 835.98 1091.95
Shareholders Equity 957.26 1220.16 1690.18 2037.50
Deposit 10108.28 11643.66 16775.34 23009.13
Investment 8150.16 11474.41 17423.19 22906.37
Import 9337.49 12631.60 1882.14 27042.72
Export 3639.34 4932.90 914.27 12714.91
Total Income 1120.85 1452.68 2172.48 2955.61
Total Expenditure 771.96 904.48 1202.71 2199.43
Profit before Tax 348.89 548.20 855.47 756.18
Profit after Tax 158.76 262.90 470.02 347.31
Income Tax 157.00 215.10 385.45 235.53
Total Assets 12874.61 15336.89 21368.17 30182.32
Fixed Assets 195.17 208.00 215.11 334.48
Earning per share (Taka) 263.68 387.80 550.24 30.12
Profit Earning Ratio 4.89

25
Dividend per share 15.5% 26.00% 35% 20%

Bonus.
No. of Shareholders 5379 5402 4487 12013
Number of Employees 803 771 912 1033
Number of Branches 40 41 46 46
Manpower per Branch 20 19 20

3.8 Location of Branches of AIBL:

3.9 Feature of AIBL:

All activities of the bank are conducted according to Islamic shariah where
profit is the legal alternative to interest.

26
 The banks investment policy follows different modes approved by Islamic
shareah based on Quaran & Sunnah.
The bank is committed towards establishing welfare oriented banking system,
economic upliftment of the law- income group of people, create employment
opportunities.
According to the needs and demands of the society and the country as a whole
the bank invests money to different halal business. The bank participates in
different activities aiming at creating jobs, implementing development projects
taken by the government and developing infrastructure.
The bank is committed to establish an economic system through social justice
and equal distribution of wealth. It is committed to bring about changes in the
underdeveloped rural areas for ensuring balanced socio economic
development of the country through micro credit program, according to
mudaraba system; the depositors are the partners of the investment income of
the bank. During the period under review, 70% of the investment income has
been distributed among the mudaraba depositors.
To render improved services to the clients imbued with Islamic spirit of
brotherhood, peace and fraternity and by developing an institutional cohesion.
The bank is contributing to economic and philanthropic activities side by side.
Al-Arafah English Medium Madrasah and AIBL Library are among mention
worthy.

3.10 Foreign Correspondents and Agent:

Al-Arafah Islami Bank Ltd. established correspondent relationship with more than
200 branches of 30 banks in different cities of the world. The bank opened Dollar,
Pound, Euro, Yen, CHF, Acu-Dollar Accounts with famous banks of the world with a
view to rendering prompt services to their valued clients dealing in Export, import etc.

3.11 Nature of Business:

All kinds of commercial banking services are provided by the bank to the customers
following the provisions of Banking Companies Act, 1991, Bangladesh banks
directives and the principles of Islamic Shariah.

3.12 Training Center:

Al-Arafah Islami Bank Ltd. has formed a training center to make effective and
efficient employees, which is situated at Topkhana Road. The teachers of IBA, Dhaka
University, teacher of BIBM, Executive of AIBL & experienced bankers ( Home &
Abroad) give lecture & take classes in that training center.

3.13 Divisions of AIBL:

General Banking Division.

Human Resources Division.

27
 Investment Division.
Investment Administration & Recovery Division.
SME & Capital Market Services Division.
Shariah Division.
Share Division.
International Division.
Finance & Accounts Division.
Audit & Inspection Division.
Development & Marketing Division.
Research & Planning Division.
Information Technology Division.
Establishment Division.
Internal Control & Compliance Division.
Law Division.

Chapter-4
Human Resource Department of
AIBL

28
4.1 General Concepts
4.2 Objectives of HRM
4.3 Basic Principles Practiced

4.1 General Concepts:

Human Resource Management (HRM) is to refer to the philosophy, policies,
procedures and practices related to the management of people within an organization.

In todays competitive business environment, only the quality of human resource

makes the difference. The bank is committed to attract the best person to work for it
and the adoption of the latest information technologies is reflected in the efforts of the
bank in development of human resources. The bank believes in professional
excellence and considers its working force as the most valuable asset and the basis of
efficiency and strength.

HR department of Al-Arafah Islami Bank Ltd. does not involve directly in strategic
planning. Mainly the Board of Directors plans it. HR provides information to help
them to take necessary decision. But HRD does a separate planning for their internal
work.
The total process of HRM at AIBL includes
HR planning & forecasting
Job & work design
Staffing/recruitment & selection
Training & development
Performance appraisal & review
Compensation & reward

29
 Employee protection & representation
Organization Improvement

4.2 Objectives of HRM:

The objectives of HRM in AIBL can be described as follows-
To hire the right person for the job offered by the bank.
To reduce employee turnover on the basis of job available.
To motivate people to perform at high effort levels.
Not to waste time with useless interviews.
To remove unfair labor practices within banking environment.
To maintain a high morale & better human relations inside the organizations.
To maintain the organizational peace
To attract competent people and retain them in the organization
To recognize and satisfy individual needs.

4.3 Basic Principles Practiced:

Treat people with respect and dignity;
Treat people with adults;
Deal with people as complete individuals;
Teat all employees with justice;
Provide people with opportunities for growth and development;
Make people feel that they are most valuable asset for the organization;
Rewards should be earned, not given;
Not to underestimate the potentials;
Provide people with all relevant information.

At present Mr. Mazharul Islam, Senior Principal Officer of AIBL is acting the
Incharge of HR division. This department consists of 14 employees & 8 staffs. The
total number of employees at AIBL is 1091.

30
 Chapter-5
Human Resource Planning

31
 5.1 Collect Information
5.2 Forecast Demand
5.3 Forecast Supply
5.4 Plan & Conduct Needed Program
5.5 Feedback on Planning

5.1Collect Information:

The HRD of Al-Arafah Islami Bank Ltd. collects information from both internal and
external environments-

5.1.1 Internal Environment:

The Board of Directors of Al-Arafah Islami Bank Ltd. does the business
strategy and business planning that is carried out by HR department.
Al-Arafah Islami Bank Ltd. checks the current employee by their number
(ACR form) and the performance & skills.

5.1.2 External Environment:

Al-Arafah Islami Bank Ltd. always tries to keep up to date information about
the current economical condition of the country.
Al-Arafah Islami Bank Ltd. is not a well-equipped bank, but they have already
established fully computerized banking system and going to introduce online
banking soon.

5.2 Forecast Demand:

HRD estimates how many employees they need and the board of directors &
HR Manager takes the decisions. They do not take help of experts from
outside.

32
 In planning, Al-Arafah Islami Bank Ltd. follows the top-down approach.

5.3 Forecast Supply:

The Human Resource Department of Al-Arafah Islami Bank Ltd. forecasts their
supply of current human resource from two sources-
a) Internal Sources
b) External Sources

a) Internal Sources:
Almost about 85% of mid levels to top-level managers are employed internally.
They only consider the skilled and experienced employees for forecasting. For
make it easier they normally follow skill inventory system to get the most accurate
information. They have the most newly introduces idea known as HRIS.
b) External Sources:
If Al-Arafah Islami Bank Ltd. does not find right people for the right post from
inside their bank then they go for external sources. They offer employees who are
qualified and experienced. They try to focuses on the unemployment rate and the
conditions of labor market which may tight or loose.

5.4 Plan and Conduct Needed Program:

Al-Arafah Islami Bank Ltd. has sufficient employees that are required to meet their
needs. They have shortage of employee as they need according to their organization.
To overcome the shortage of employee they follow the following techniques -
Recruit new full time employees.
Offer incentives for postponing retirement.
Rehire trained employees.

5.5 Feedback on Planning:

Most of the time Al-Arafah Islami Bank Ltd. is successful in planning because they
always try to gather correct information. For human resource planning first they
identifies their needs to meet the fulfillment of human resource planning and to do it
effectively, sometimes they increase or decrease work force size, change their skill
and take necessary steps.

33
 Chapter-6
Job Analysis

34
6.1 Job Description
6.2 Job Specification
6.3 Evaluation

35
6.1 Job Description:

Job description must be presented in a manner such that the essential functions of the
job can be readily identified and communicated to people who are not familiar with
the job. The bank describes a different job for a different officer. To evaluate a
candidate they prepare such types of office order for a Marketing Executive.

Job title: Marketing Executive

Education: Masters / MBA in Marketing
Physical condition: Physically sound and ability to work hard.
Experience: 5 years work experience

6.2 Job Specifications:

The specific skills, knowledge, abilities, and other physical & mental characteristics
those are necessary to perform a job. AIBL uses the office order for the incumbent to
complete employees task successfully. Here is the office order for an Assistant Vice
President of Al-Arafah Islami Bank Ltd.

Supervise the activities of a branch.

Authorization all types of transecting voucher.
Supervising of opening and closing all deposit accounts.
Checking of all records, office files, and ledger.

6.3 Evaluation:

Al-Arafah Islami Bank Ltd. evaluates the job by using job analysis process. They
have considered job evaluation as an important part of job analysis to make the
compensation program simple and easy for the bank and employees.

36
 Chapter-7
Recruitment

7.1 Process of Recruitment

7.2 Recruiting Goals & Priorities
7.3 Recruiting Philosophy
7.4 Sources of Recruitment
7.5 Methods of External Recruitment

37
7. Recruitment
If Al-Arafah Islami Bank Ltd. Ltd. plans to introduce new branches or services then
they go for recruitment. They also recruit employee if any post vacant within the
bank.
7.1 Process of Recruitment:
When the vacancy occurs the department sends a requisition form to HR Department.
The HR manager asks for the qualifications and other information. On the basis of
given information the HR manager plans his strategy and write a memo to the Board
of Directors. If they give the PRC approval then Al-Arafah Islami Bank Ltd. gives
advertisement in Newspaper.
Recruitment Process of Al-Arafah Islami Bank Ltd. is the following-

Vacant / New Position Occurs

HRD is informed

Prepare memo

Send to board of Directors

Approved by the Board

Newspaper Advertisement

Generate Application Pool

7.2 Recruiting Goals and Priorities:

Al-Arafah Islami Bank Ltd. Ltd. has some goals and priorities that they considers
while recruiting-
Al-Arafah Islami Bank Ltd. tries to attracts large pool of applicants
Al-Arafah Islami Bank Ltd. attracts highly qualified applicants
Al-Arafah Islami Bank Ltd. tries to attract those applicants who are willing to
accept offer.
Al-Arafah Islami Bank Ltd. always tries to fill their vacant post as soon as
possible.

38
 7.3 Recruiting Philosophy:
Al-Arafah Islami Bank Ltd. Ltd. follows some philosophy while perform recruiting
process-
They recruit from both internal and external sources.
They have commitment to diversity.
They provide marketing orientation to candidates.
They follow ethics in recruiting.

7.4 Sources of Recruitment:

The HR department of Al-Arafah Islami Bank Ltd. Limited follows two ways to
recruit new employees. They are:
a) Internal recruitment
b) External recruitment
a) Internal Recruitment:
As Al-Arafah Islami Bank Ltd. recruit highly qualified and experienced applicant they
prefer to recruit mid-level and upper level employees internally. When any post
vacant they search for right people for the right place with in the organization. Their
Human Resources Department maintains Human Resources Information System
(HRIS) for internal recruitment so they can fill up vacancy by a person of known
quality. They also use internal recruitment as a motivational tool for the employees.
While recruiting employees internally the bank often experiences ripple effect that is
when a vacancy is filled internally in the mean time another vacancy occurs.
b) External Recruitment:
If Al-Arafah Islami Bank Ltd. cannot fill the vacancy internally or cannot find right
people for the right post with their organization then they go for external recruiting.
Some times if they need very experienced person for their upper levels then they think
about external recruitment. There are also some reasons why Al-Arafah Islami Bank
Ltd. prefer external recruitment-
To over come ripple effect with the bank.
When they need new ideas and viewpoints
To avoid riffle effect within the bank.

7.5 Methods of external Recruiting:

External Recruiting is used to attract a large pool of applicant. To recruit externally
Al-Arafah Islami Bank Ltd. follows the following method-
Newspaper Advertisement:
The bank spending heavily in ads because recruitment ads have a large audience of
whom only 10-20% is actually looking for jobs. The rest 80% are happily employed.
If those 80-90% remember the job and the organization when they want to change
their job and results in mouth-to-mouth hiring. Therefore the bank target 100% rather
than 10-20%. Al-Arafah Islami Bank Ltd. Ltd. does not use any blind advertisement
to newspaper. They clearly mention the job description to their advertisement. They
usually place their recruiting advertisement to national dailies and business
magazines.

39
 Chapter-8
Selection

8.1 Selection Process

8.2 Interview Process
8.3 Selection of Executives

40
8. Selection

Al-Arafah Islami Bank Ltd. follows a specific strategy for selecting new employees.
The human recourse department made this strategy. At the entry level of new
employee the selection team considers education, experience and qualification of the
candidates. This procedure begins after evaluating the applications.

8.1 Selection Process:

Al-Arafah Islami Bank Ltd. follows Multi Hurdle Approach for selecting the
applicants. The selection process of AIBL is the following-

Matching Bio-Data

Written Test

Interview

Reference

Selected

Al-Arafah Islami Bank Ltd. selects applicants from their Bio-Data.

After selecting applicant, Al-Arafah Islami Bank Ltd. takes a written test.
Experts of BIBM and IUB prepare the questionnaire of written test.
After that applicant are to face interview
Board of directors and the HR manager takes the interview.
Then they check the reference and select applicant.

8.2 Interview Process

Al-Arafah Islami Bank Ltd. follows unstructured interview of the candidates.

A committee conducts the interview. It consists of five members-three from
the Board of Directors, the Managing Director and the Head of the HRD.
In interview, the committee is not only emphasizing on the response of the
questions but also observes how they respond, their attitudes, behavior,
smartness and appearance.
On the above components the members of committee give a number to each
candidate. Then they make an average number of all candidates, and select the
desired employee.

41
 8.3 Selection of Executive:

Mainly the Board of Directors selects the top executive of Al-Arafah Islami Bank Ltd.
Some times the shareholders give their opinion in the Annual General Meeting for
selecting top executives. The mid level executives are selected internally by their
better performance and experience. Some executives are selected externally but their
ratio is low.

42
Chapter-9: Human Resource
Development & Training

9.1 Reasons for Training

9.2 Method of Training

43
9. Human Resource Development & Training:

Training program is a regular basis program of Al-Arafah Islami Bank Ltd. It is done
for both lower level and mid level management. Every year the bank spends a lot for
the training of employees. The amount is not fixed; it depends according to their
demand. Some times it is used as the motivational tool with in the bank.

9.1 Reasons for Training:

To orient the hires to organization
To teach them how to perform initial assignment.
To improve current performance of employees
To prepare employees for future promotion or upcoming changes.
To introduce employees with the new technology, if the bank going to
use it.

9.2 Methods of Training:

Al-Arafah Islami Bank Ltd. Ltd. follows
On The Job Training
Off The Job Training

9.2.1 On The Job Training:

Al-Arafah Islami Bank Ltd. provides on the job training for the new recruited
employees. It is basically training for one year. During the training period the
employees do not get any specific position. Every employee has to move round the
desks. In this training Al-Arafah Islami Bank Ltd. provides a training program
smellier Job Rotation system. Al-Arafah Islami Bank Ltd. gives more importance in
this training phase. In this training the new employees get a practical experience.
According to the Job Rotation, the trainee has to expand more time in Central
Accounts Returns Department. It is about 10 weeks. Then they give importance to
other departments.

9.2.2 Off The Job Training:

Al-Arafah Islami Bank Ltd. arranges a training program when they recruit new
employees. They train their employees to their own training center which is at
Topkhana Road, Purana Paltan, Dhaka. Here they provide formal training program.
All the employees have to do it. This program is conducted by following ways-

During the training period teachers of Institute of Business Administration

(IBA) and Bangladesh Institute of Bank Management (BIBM) teaches the
employee. They come as Guest teachers. They give lecture related to banking
subjects.

Sometimes AIBL provides off the job training to motivate the employees.
They send employees to abroad for training. Employees who work for a long

44
 period of time with the bank and very loyal to the organization gets the benefit
of being trained in oversees.
Sometimes AIBL sends their employees for training to various multinational
banks within the country.

Employees of Al-Arafah Islami Bank Ltd. are satisfied with their training program
but some of them think that they need a well-decorated large training center.

45
 Chapter-10: Performance
Appraisal

10.1 Formal Process of Performance Appraisal

10.2 Informal Process of Performance Appraisal
10.3 System of Performance Appraisal
10.4 Function of Performance Appraisal
10.5 Methods of Performance Appraisal

46
10. Performance Appraisal
Al-Arafah Islami Bank Ltd. does not consider Performance Appraisal as punishment
tool. They actually do it to review the employees performance through out the year
and to have a basic idea about each branch. Al-Arafah Islami Bank Ltd. uses both
formal and informal processes to do performance appraisal.

10.1 Formal

Al-Arafah Islami Bank Ltd. uses some written instruments or paper. ACR is a kind of
form by which the bank can evaluate all types of employee performances. The bank
normally uses two types of form one for officers and the other one are for executive
level. All superior evaluates his/her subordinates.

10.2 Informal:

Sometimes the bank use informal evaluation of the employees. Every superior gives
verbal information about his subordinates based on the superiors information the
management measure Performance Appraisal.

10.3 System of Performance Appraisal of AIBL:

HRD of Al-Arafah Islami Bank Ltd. sends the performance appraisal form to each
department and branch at the end of the year.

The reporting officer measures each officers performance like knowledge in

banking, decision-making ability, analytical ability, personality etc.
Then the reporting officer summarizes the whole performance of that officer.
He identifies employees strengths and weakness.
The reporting officer then gives an overall performance rating. He categorizes
the officer as-
Outstanding
Good
Average
Below average.
The reporting officer comments for that specific employee that, whether he
can be promoted or not ready for the promotion or recommended for Annual
Grade Increment. The reporting officer can be recommended for another job if
he thinks that the current job is not suitable for that person.
After that, the branch or department returns the form to the HRD. HRD then
assess the officers qualification and ability.
From above mentioned criteria we find that Al-Arafah Islami Bank Ltd.
measure performance on the basis of trait, behavior and result.

47
10.4 Function of Performance Appraisal:

HRD of Al-Arafah Islami Bank Ltd. uses Performance Appraisal for two purposes-
a) Development Uses
b) Administrative Uses

10.5 Methods of Performance Appraisal:

Al-Arafah Islami Bank Ltd. follows Subjective Method to measure performance

appraisal.

Subjective Method:
The bank compares all employees performance from best to worst.
The bank has logbook for every individual employee. They use latest
computerized database software to keep all the records of an employee.
The bank follows a standard method to identify the duties, qualities and
responsibilities.
The bank use checklist, which helps to decide for promotion of an employee.
Finally the bank uses the most popular method known as management by
objectives.

48
Chapter-11: Compensation

11.1 Compensation Package

11.2 Individual Incentives
11.3 Benefits

49
11. Compensation
Normally Al-Arafah Islami Bank Ltd. provides three benefits or incentives in a year
without monthly salary. Among them there are two festival bonuses and one incentive
based on ACR form. Sometimes they give promotion, increment (based on target
sales) and enhance salary. All incentives are paid individually and they do not provide
any group incentives. Al-Arafah Islami Bank Ltd. provides compensation & benefits
on the basis of employees performance and ranking.

11.1 Compensation Package:

In Al-Arafah Islami Bank Ltd. there are mainly four levels of employees-
1. Executive Level: AVP to DMD
2. Officer Level: AO to SPO
3. Lower Level: Driver, MCG, Security guard, cleaner, and Electrician etc.

The three level compensation package of Al-Arafah Islami Bank Ltd.:

Compensation Executive Level Officer Level Lower Level
Package (Grade-1) (Driver)
(DMD)

Basic Salary TK. 25000 TK. 14000 TK. 3200

Medical Allow: TK. 500
House Rent Allow: TK.12000 TK. 5000 TK. 1000
Convenience Allow: TK. 300
House Main. Allow: TK. 10000 TK. 4000
Utility Allow: TK. 5000 TK. 2500
Washing Allow: TK. 200
Tech. Allow: TK. 400
Total 52,000 25,500 5,600
Yearly two festival bonuses are applicable for all employees.

Beside these AIBL gives some benefits to different employee levels. Such as-
AIBL provides car only for Managing Directors.
AIBL gives the risk allowance to general officer (Cash).
If any employee becomes sick and if he/she admitted to hospital AIBL give
financial assistance.

11.2 Individual Incentives:

AIBL provides individual incentives every year. Some of them are-

a) Bonus: AIBL provides bonus twice in a year. The amount of bonus is basic salary
of one month.
b) Profit Incentives: The organization gives profit incentives for earning better profit.

50
c) House Loan: AIBL sanctions house loan among the employees. But the employee
must have to have at least 5 years experience of working with AIBL. The amount of
loan depends on the rank the employee is currently occupying.
d) Increment: AIBL provides increment to employees if they can fulfill their target
sales.

11.3 Benefits:

Al-Arafah Islami Bank Ltd. offers some benefits to the employee which are-

11.3.1 Compensation for Time:

Govt. Holidays: All the employees of AIBL avail Govt. Holidays.

Privileged Leave: An employee has 33 days Privileged leave in a year.
Compulsary Leave: 15 days yearly.
Causal Leave: 15 days yearly but an employee can take 3 days in a row.
Special Leave: AIBL keeps 120 days as earn leave in the employees
account.

11.3.2 Protection Program:

Retirement Policy: According to the service rule of AIBL, employee has to

retired at the age of 58 years. At the time of retirement, employee gets the
following benefits.
Leave Preparatory to Retirement (LPR): Three months with all benefits and
salary.
Provident Fund: 10% of the basic salary and the same amount are deposited by
AIBL.
Gratuity: 24 months on the last basic

**All most all employees of Al-Arafah Islami Bank Ltd. are satisfied with the
compensation process of the bank and the bank always tries to make their employee
satisfied. But some of the employees think that their basic salary is bit lower
compared to other well-reputed banks.

51
 Chapter-12
Discipline

12.1 Service Rule Book

12.2 Progressive Disciplinary Action

52
12. Discipline
Discipline is the management action taken to enforce organizational standards. Every
organization should follow some discipline. AIBL follows some discipline to run their
operation.

12.1 Service Rules Book:

AIBL has Service Rule Book of its own. Every branch keeps a copy of that book.
Some of the important rules quoted below.
Every employee of AIBL is to follow the following rules and regulation provided by
the bank-
Every employee shall continue to remain in service as full-time staff of the
bank shall not remain absent or leave office without prior permission of the
competent authority.
Every employee shall serve the bank honestly, sincerely, diligently and with
utmost dedication and he must sub-ordinate all personal interest to interest of
the bank. He shall serve the bank to the best of his skill and ability and in all
respect confirm to the rules and regulations of the bank.
Every employee shall maintain strictest secrecy of the affairs of the bank and
also the affairs of the customers account and shall not communicate directly or
indirectly to press, public or any of agencies any information for document
which will come to his knowledge and possession in the ordinary of course of
his official duty or assignment unless otherwise directed.

No employee of the bank shall-

Enter into any speculative transformation of dealing in shares, securities or

otherwise whatsoever.
Engage him in gambling, racing or wagering contracts.
Engage him in any kind of business whatsoever. If anyone or his relative
(Father/ brother/sister/sons/daughter) have any interest in any loan account
shall be declared to board.
Participate in any political and subversive activities.
Accept any gifts or present from any customer or prospective customers of the
bank or the relative.
Remain absent from duty without obtaining sanction of leave.
Engage him in any kind of office of profit and business.
Act as agent of insurance company or business firm directly or indirectly.
Borrow money from any customer or any person having dealing with the Bank
Make personal representation to any Director, Managing Director or Chairman
directly. Any kind of representation must be routed through proper channel.
Make any attempt to influence any director in any manner on Bank affairs.
Issue any guarantee, indemnity, surety bond or any other certificate involving
directly or indirectly banks interest in personal or official capacity without
prior permission or beyond the delegated power.

53
 Make any advance to customers in contravention of credit restrictions imposed
by Head Office or Bangladesh Bank in excess of his authority.
Make nay advance or contribution for political purposes.
Leave office even after usual office hour without competing daily balancing of
account of specified work for the day.
Invest money in the business of the banks clients.

12.2 Progressive Disciplinary Action:

If any employee breaks the rule of AIBL, then the organization takes the
disciplinary action.
They take the action according to the Service Rule Book.
If anyone complains against any employee of AIBL then they send an inquiry
team.
If the inquiry team finds that the employee is guilty then they give an oral or
written reprimand. And also keep a record in employees personal file.

54
Chapter-13
Findings,
Recommendation,
Conclusion, &
Bibliography

13.1 FINDINGS
13.2 RECOMMENDATION:
13.3 CONCLUSION

55
13.1 FINDINGS:

Al-Arafah Islami Bank Ltd.s HRD employees are not expert enough.
They properly analyze what behaviors, abilities, knowledge and equipment are
required to perform the job.
They clearly identify the essential functions to perform a job.
They provide a written narrative describing the activities performed on the job.
The organization does not outline specific skills, knowledge, abilities and other
physical & personal characteristics that are necessary to perform a job.
Their selection, training and promotion procedure are not well structured and
not even applied properly.
They do not provide any down-to-earth presentation of both formal & informal
aspects of the job.
HRD is not much concerned about the employees.
The organization recruits employees from both within the organization &
outside the organization.
Their training center is small enough.
The employees are not satisfied with the training process.
They analyze job precisely before recruiting an employee.
They provide job description.
The organization does not specify the job properly.
Their selection, training and promotion procedure are haphazard.
They are not providing any Realistic Job Preview (RJP) to the employees
HRD is not taking proper care of the working people.
The organization follows both external and internal ways to recruit employees
They promote or transfer employees to perform internal recruitment, which is
motivating for current employees, and training & socialization time is reduced.
Sometimes ripple effect occurs when they recruit employees internally.
They generally recruit employees externally for lower level jobs.
They use unstructured interview tool in selection process.
They do not follow assessment center approach
The organization does not assess need for training.
They provide both On the Job and Off the Job training to impart new
knowledge.
They evaluate employee training.

56
13.2 RECOMMENDATION:

Al-Arafah Islami Bank Ltd. may recruit HRD employees having HR

background so that they will make working people more productive and
satisfied.
The organizations strategic plan and business plan must be sound.
The organization must specify characteristics that are necessary to perform a
job.
Selection, training and promotion procedure must be well structured and
applied properly.
Realistic Job Preview (RJP) must be provided to the employees to get rid of
early turnovers and other crucial aspects related to job.
HRDs main focus must be on employees rather than anything else.
They must take necessary steps to avoid ripple effect.
Al-Arafah Islami Bank Ltd. may go for employment agencies or campus
recruitment to recruit employees externally.
They recruit employees externally for the junior officer and provisional
officer, which can be discouraging & demotivating to current employees.
For decision-making in selection the company may follow a combination of
all approaches to get a hybrid approach, which is very effective.
They may use semi-structured interview tool known as cone approach in
selection process, which is far better than the one they use.
They must follow assessment canter approach for selecting managers, which
can predict both long & short-term success and advancement in management
position.
They must get a larger training center.
Training process must be satisfactory for the employees.
Al-Arafah Islami Bank Ltd. trains almost all the employees, which is a very
good sign of success.
The organization must assess need for training to refrain from uselessly
spending money for problems for which training is not the answer.
As a large organization they have must have both formal & informal methods
of performance appraisal (PA) and performance feedback (PF).

13.3 CONCLUSION

AIBL has been trying to operate its business successfully in Bangladesh since 1995.
AIBL has already developed an image of goodwill among its clientele by offering its
excellent services. The success has resulted from dedication, commitment and
dynamic leadership of its management over the periods.

Success in the banking business largely depends on an effective and efficient Human
Resource Department. To be more effective and efficient of HRD performance Al-
Arafah Islami Bank Ltd. should recruit HRD employees having HR background. If

57
the bank goes this way, it is expected that in the near future AIBL may become one of
the top performers in the banking sector.

BIBLIOGRAPHY

1. Books:

Human Resources and Personnel Management /William B. Werther, Jr., &

Keith Davis.--- 5th edition; Irwin/McGraw-Hill, Inc. United states, 1996.

Human Resource Management / Gary Dessler--Seventh Edition.

2. Documents of AIBL:

Diary of Al-Arafah Islami Bank Ltd.-2009

Service Rule Book of Al-Arafah Islami Bank Ltd.

The Annual Report of AIBL.-2007

The Annual Report of AIBL.-2005

Different prospectus of Al-Arafah Islami Bank Ltd.

3. Interviews of AIBL Employees:

4. Web Site:
http://www.al-arafahbank.com

58