Training and Development

Activities of

Al-Arafah Islami Bank Ltd.

Internship Report on

Training and Development Activities of

Al-Arafah Islami Bank Ltd.

Submitted to:

Ms. Chowdhury Shegufta Afrin Assistant Professor,

Department of Business Administration, Stamford University Bangladesh,

Siddeswari, Dhaka.

Submitted by:

Tareq SiddiqueeBatch: 41st

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Major: HRM ID# MBA 042111260

Date of Submission:

19th December 2010

Letter of Transmittal

19th December 2010Ms. Chowdhury Shegufta AfrinAssistant Professor,Department of Business Administration, Stamford University Bangladesh,Siddeswari, Dhaka.

Dear Madam,

It gives me immense pleasure to present the internship report, on “Training and Development Activities of Al-Arafah Islami Bank Ltd.” which was assigned to me to learn practical knowledge as partial fulfillment of the requirement for the Degree of MBA 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 yoursTareq SiddiqueeID NO. MBA 04111260Stamford University Bangladesh

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Internship Declaration

This is to notify that this report titled “Training and Development Activities of Al-Arafah Islami Bank Ltd.” has been prepared as a part of my internship formalities. It is an obligatory part of our MBA program to submit an internship report. Moreover, I was inspired and instructed by my Supervisor Ms. Chowdhury Shegufta Afrin, AIBL’s Narayangonj Branch’s 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 SiddiqueeID NO. MBA 04111260Stamford University Bangladesh

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Supervisor’s Declaration

This is to certify that Tareq Siddiquee, ID No. MBA 04111260 student of Stamford University Bangladesh of MBA program has completed the internship report titled “Training and Development Activities of Al-Arafah Islami Bank Ltd.” successfully under my supervision.

I wish him every success in life.

………………………………………..Ms. Chowdhury Shegufta AfrinAssistant Professor,Department of Business AdministrationStamford University BangladeshSiddeswari, Dhaka.

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Acknowledgement

This report “Training and Development Activities of 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.Touhid Siddique, Manager of Al-Arafah Islami Bank Bangladesh Ltd. of Narayangonj Branch for giving me the excellent opportunity to do my practical orientation in his branch.

I would also like to thank Mr. Mahabubul Amin, SPO and Second Officer, Md. Yusuf Sharif SPO and Mr. Saifuddin Sikdar SPO for providing me necessary information, continuous guidance and co-operation to complete the report.

My especial thanks to Ms. Chowdhury Shegufta Afrin, lecturer of Stamford University Bangladesh, for her 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.

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Table of Contents

A. Prefatory Part: Page

Title 02 Letter of Transmittal 03 Internship Declaration 04 Supervisor’s Declaration 05 Acknowledgement 06 Table of contents 07 Executive summery 09

B. Report Proper

Chapter One: Introduction

Origin of the report 11 Background of the report 11 Objective of the report 11 Scope of the report 12 Rationality of the report 12 Methodology of the report 12 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 Al-Arafah Islami Bank Ltd. (AIBL)

Profile of AIBL 17 Vision of AIBL 17 Mission of AIBL 17 Commitment of AIBL 17 Goal of AIBL 18 Organogram of AIBL 18 Management System 23 Location of Branches of AIBL 23 Features of the AIBL 23 Products & Services of AIBL 24 SME Banking 24 Foreign Trade, Correspondents and Agent 25 Features of AIBL Training & Research Center 26 Divisions of AIBL 26 Financial Highlights 27

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Chapter Four: Human Resource Management & Training & Development (T&D) Activities: A Theoretical Review

Definition of HRM 29 Activities of HRM 29 Objectives of HRM 29 About Training and Development (T&D) 29 Difference between Training and Development 30 Aims/Objectives of T&D 30 How Organizations Benefits by T&D? 30 Conceptual Framework for Training Management 31 Typical Topics of Employee Training 32 Different Training Methods 33

Chapter Five: HR Department of AIBL & Its T&D Activities

HR Division of AIBL 38 T&D Activities of AIBL 38 Types of T&D Activities at AIBL 39 Different T&D Activities/Workshops/Seminars of AIBL 39 Methods of T&D Activities of AIBL 40

Chapter Six: Survey & Analysis

Survey & Analysis 42

Chapter Seven: SWOT Analysis of Training &Research Academy and T & D Activities of AIBL

SWOT Analysis 51

Chapter Eight: Findings, Recommendations & Conclusion

Findings 54 Recommendation 54 Conclusion 56

C. Appended Part:

Bibliography 57 Appendix 58

Executive Summary

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Training is widely considered as an important tool for enhancing a person’s Knowledge, Skills and Attitude (KSA). It is the process of assisting a person for developing his efficiency and effectiveness at work by improving and updating his professional knowledge, by developing skills relevant to his work and growing appropriate behavior and attitude towards work and people. Training is, therefore, an effective tool for Human Resource Development as well as for achieving the goals of an organization.

To fulfill the MBA degree every student has to complete internship program at any organization which helps a student to launch a career with some practical experience. This report on “Training and Development Activities of Al-Arafah Islami Bank Ltd.” has been prepared as a requirement to fulfill of MBA program.

This report has been divided into eight chapters, which are further divided into some more parts. In the first chapter, I have briefly discussed about the origin, background, objective, scope, methodology rationality, and limitations of the report. In the second chapter overview of Islamic Banking has been described with showing differences between Islamic Banking and Conventional Banking. The third chapter is about profile of Al-Arafah Islami Bank with its mission, vision, profile, organizational structure, management style, features, departments etc. In the fourth chapter a theoretical overview of HRM and Training & Development (T&D) activities has been mentioned. A brief summary about HR department & its Training & Development (T&D) activities has been mentioned in the fifth chapter. The analysis of the survey has been shown in chapter six. I have done the SWOT Analysis in chapter seven. Finally some findings, recommendations and conclusion have been given in the chapter eight.

Al-Arafah Islami Bank Limited (AIBL) is a Shariah-based interest-free banking system. Its features and functional procedures are quite distinctive than that of the conventional banking system. To satisfy the objectives of the Islamic banking and to face the challenge of the next century, the job of AIBL is becoming more complicated and more technical day by day. So, the personnel of AIBL require special KSA, which can be developed through proper training. Obviously, that a large number of properly trained employees would result in increased output and reduced costs, further resulting in maximum utilization of human resources, which will ultimately benefit the entire nation.

For this reason AIBL establishes its own Training and Research Academy at Topkhana Road, Dhaka. The training academy of the Bank has providing training regularly to its employees. Orientation and skill development courses are conducted regularly. Special attention is paid to on-the-job training on the basis of job rotation plan. Besides, the officers and employees periodically attend seminars and symposiums organized by the Bank and other bodies. Lower rate of employee turnover make it evident that employees are very much satisfied with their current positions.

Hence the institution should be large, technologically more updated and richer in library materials. Its branches may be establishes on the divisional wise. Regular research on how to easy the banking operations should be done. If these T&D activities can be maintain properly, certainly the employees will be more competitive and AIBL will be ahead among all banks of Bangladesh.

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Chapter 1:Introduction

1.1 Origin of the Report:

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In today’s 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 MBA 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 Background of the Report:

To complete the total credit hour of MBA one student needs to complete internship programs from any commercial organization and the student has to submit a report on his internship tasks.

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 Ms. Chowdhury Shegufta Afrin, lecturer of Stamford University Bangladesh is “Training and Development Activities of Al-Arafah Islami Bank Ltd.” The report has discussed how the bank operates its Training and Development activities to its employees.

In my major courses I got overall details about the activities of a HR Department of an organization. Among these tasks of HRD, providing Training and Development activities to its employees is one of the major tasks. I have prepared this report by the help of those courses as well as by the help of my practical experiences & Knowledge during the time of internship at Al-Arafah Islami Bank ltd. at Narayangonj branch.

1.3 Objectives of the Report:

The prime objectives of preparing this report is to get practical knowledge of which can help me to bridge the gap between my lectures or bookish knowledge with the actual practices of Training and Development activities in a particular organization.

Specific objectives of the report are: To fulfill the course requirement of MBA program. To acquire practical knowledge about HRM practices especially about T&D activities of banking

sector that will help a lot of to understand the future work life. To find out the tools and techniques used at AIBL to asses the need for giving training to the

employees. To analyze and compare T&D practices in AIBL with classroom (theoretical) knowledge. To recommend for improvement to existing Training and Development policy of AIBL.

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1.4 Scope of the Study:

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, HR activities and the main part of the report is about Training and Development activities of AIBL. The scope of the study may be stated as under:

The study would help the top management in planning and decision making of effective T&D activities in order to make its employee more skilled and qualified for the appropriate job tasks.

The study would aware the top management to take corrective and appropriate measure timely to improve the company’s HRM and other performance.

The study would help management in identifying the key areas of weakness and strength of T&D activities.

The study would also help the shareholders as a guideline to predict company’s probable present and future position through understanding T&D activities and employees motivation situation.

1.5 Rationality of the Study:

Rationally for several reasons I have chosen this topic for my internship report: In modern day good business becoming more tough due to huge competition in the market, so

due to reviving in the market and for making good profit effective T&D activities are very important for an organization as these makes its employees more skillful, competitive and perfect for the appointed job responsibility which directly effects on the good performance of the organization.

Again due to effective T&D activities the job knowledge, skills and attitudes increases at all level of the organization

Organization gets more effective decision making and problem solving Helps keep costs down in many areas, e.g., production, personnel, administration etc. Again there is a positive co-relation between an organization’s investment on T&D activities

and its productivity by resulting more productivity, handling conflict, adjust to change, better labor-management relationship, promotion of the employee etc.

1.6 Methodology of the Study:

Methodology of this study includes my internship working experience, face-to-face discussion with officers, study of files, other reports, and practical work. It also includes visiting to the training institution of the AIBL, Questionnaire development and taking interview according to that questionnaire. In preparing the report, both primary and secondary sources have been used.a) Primary sources:From the primary source I came to know all the fundamental ideas about the training and development activities of AIBL.

For collecting primary data, I arranged an interview session of the manager and officers of AIBL, Narayangonj Branch directly with a developed Questionnaire and took interview according to that questionnaire.

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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.

I also searched information from the web address of AIBL and have collected some information from that.

For preparing this report I discussed our honorable internship instructor. To prepare this report we also used various books on Human Resources Management.

c) Data Analysis & Presentation:I have conducted a survey on the employees of the AIBL, Narayangonj Branch. Total sample size was 15. The survey was done by three pages questionnaire of twenty four questions about Training and Development activities of AIBL.

After completing the survey I did the analysis of the questionnaire by Simple descriptive statistical analysis using Microsoft Office Excel 2007 showing data on graph, pie chart, bar chart etc.

1.7 Limitations of the Study:

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. 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. AIBL’s website is in under construction, so information isn’t available there and I failed to collect

necessary information for my report purpose.

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CHAPTER 2:

Overview of Islamic Banking System

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:

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“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 and 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.

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 Banking & Islamic Banking

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

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Conventional Banking Islamic Banking

1. The functions and operating modes of conventional banks are based on manmade principles.

1. The functions and operating modes of Islamic banks are based on the principles of Islamic Shariah.

2. The investor is assured of a predetermined rate of interest.

2. In contrast, it promotes risk sharing between provider of capital and the user of funds.

3. It aims at maximizing profit without any restriction. 3. It also aims at maximizing profit but 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 with interest is the fundamental function of the conventional banks.

5. Participation in partnership business is the fundamental function of the Islamic banks.

6. Its scope of activities is narrower when compared with an Islamic bank.

6. Its scope of activities is wider when compared with a conventional bank. It is, in effect, a multi-purpose institution.

7. It can charge additional money in case of defaulters. 7. The Islamic banks have no provision to charge any extra money from defaulters.

8. In it very often, bank’s own interest becomes prominent. It makes no effort to ensure growth with equity.

8. It gives due importance to the public interest. Its ultimate aim is to ensure growth with equity.

9. For interest-based commercial banks, borrowing from the money market is relatively easier.

9. For the Islamic banks, it is comparatively difficult to borrow money from the money market.

10. Since income from the advances is fixed, it gives little importance to developing expertise in project appraisal and evaluations.

10. Since it shares profit and loss, the Islamic banks pay greater attention to developing project appraisal and evaluations.

11. The conventional banks give greater emphasis on credit-worthiness of the clients.

11. The Islamic banks, on the other hand, give greater emphasis on the viability of the projects.

12. The status of a conventional bank, in relation to its clients, is that of creditor and debtors.

12. The status of Islamic bank in relation to its clients is that of partners, investors and trader.

13. A conventional bank has to guarantee all its deposits. 13. Strictly speaking, and Islamic bank cannot do that.

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Chapter 3:Overview of

3.1 Historical Background of 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.2500.00 million and the paid up capital is Tk. 1153.18 million as on 31.12.2007. 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. 2037.50 million as on 31 December 2007, the manpower was 1033 and the number of shareholders was 12013. It has achieved a continuous profit and declared a good dividend over the years. High quality customer service through the integration of modern technology

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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 47 branches of which 17 is AD throughout the country.

3.2 Vision To be a pioneer in Islami Banking in Bangladesh and contribute significantly to the growth of the national economy.

3.3 Mission Achieving the satisfaction of Almighty Allah both here & hereafter. Proliferation of Shariah Based Banking Practices.Quality financial services adopting the latest technology.Fast and efficient customer service.Maintaining high standard of business ethics.Balanced growth.Steady & competitive return on shareholders' equity.Innovative banking at a competitive price.Attract and retain quality human resources.Extending competitive compensation packages to the employees.Firm commitment to the growth of national economy.Involving more in Micro and SME financing.

3.4 Commitments:

Ours is a customer focused modern Islamic Banking sound and steady growth in both mobilizing deposit and making quality Investment to keep our position as a leading Islami bank in Bangladesh. To deliver financial services with the touch of our heart to retail, small and medium scale enterprises, as well as corporate clients through our branches across the country. Our business initiatives are designed to match the changing trade & industrial needs of the clients.

3.5 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 12th 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.

3.6 Organogram of AIBL:

Executives Executive Vice President:

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Ekramul HoqueManaging Director

A.T.M. Harun-ur-Rashid ChowdhuryAdditional Managing Director

 

Ihsanul Aziz

Deputy Managing Director

 

 

A.S.M Monjurul Alam

Md. Mofazzal Hossain

Rafiul Alam

 

Md. Abdul Jalil Miah

 Senior Vice President

 

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

Md. Mominul Haque Bhuiyan Yakub Mohammad Fruque

 

Vice President  

Md. Atiqur Rahman Kh. Enayat Hossain Md. Abul HossainA.W.Shamsuzzuha Manir Ahamed Nasrul Huq Chowdhury

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A.N.M. Mofidul Islam Muhammad Nadim Hadi Ferdous AhmedMohammed Ali Muhammad Mahmoodul Hoque Syed Masodul BariMd. Nazmus Saadat Nd. Abdur Rahim Duary Md. Shamsul AlamNazir Ahamed Chowdhury Md. Manjur Hasan

 

Assistant Vice President  

Mohd. Ziaul Karim Chowdhury Muhammad Abu Taher Md. Mahbub AlamHasan Mahmud S.M. Jamal Uddin Iqbal Hossain AhamedMd. Aminul Islam Bhuiyan Harun-ur-Rashid Md. Abul QuasemMohammad Yahya Md. Abdullah Al- Mamun A.K.M. Amzad HossainMd. Husain Ahamad Faruqui S.M. Nazibul Islam Md. Habib UllahMd. Majibur Rahman Md. Fazlur Rahman Kazi Md. SelimMd. Abur Rashid 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

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

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Md. Mofazzal Hossain

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

SL. No Name Designation Duration01 Al-hajj A.Z.M Shamsul Alam Chairman 18.11.95-04.02.0102 Al-hajj Md. Anowar Hossain Chairman 05.02.01-11.02.0103 Al-hajj Hafez Md. Enayetullah Chairman 12.02.01-31.03.0204 Al-hajj Md.Anowar Hossain Chairman 01.04.02-11.10.0205 Dr. Bahauddin Mohd. Yousuf Chairman 12.10.02-11.10.0306 Al-hajj A.Z.M.Shamsul Alam Chairman 12.10.03-23.07.0507 Al-hajj Hafez Md. Enayetullah Chairman 24.07.05-18.01.0808 Al-Hajj Abdus Samad Chairman 19.01.08-31.07.1009 Al-Hajj Ekramul Hoque Chairman 01.08.2010-Till Date

Source: AIBL Note Book 2009

Shariah Board

SL.No. Name Designation Address Telephone No

01 Maolana Md Siddiqur Rahman Chairman

02 Janab Moulana Abu Sayeed Muhammad Omar Ali Member Ex-Director,

Islamic Foundation BD. 9551902

03 Janab Mufti Muinul Islam MemberChief Mufti,

Darul Ifta wal Ershed Al Markazul Islami, Dhaka.

8114980

04 Janab Al-Hajj AZM Shamsul Alam MemberDirector & Chairman,

Council Audit Committee of Al-Arafah Islami Bank Ltd.

9569354 01819-240128

05 Janab Al-Hajj Md. Anowar Hossain MemberChairman,

Board of Directors, Al-Arafah Islami Bank Ltd.

9569354 01711-527930

06 Md. Abdur Rahim Khan Secretary In charge

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Source: Service Rule of AIBL

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Manpower Position of AIBL

Managing Director

Tea Boy Additional Managing Director

MCG Deputy Managing Director

Assistant OfficerExecutive Vice President

Senior Vice President Junior Officer

Vice President Probationary Officer

Assistant Vice President Officer

First Assistant Vice President Senior Officer

Senior Principle Officer Principle Officer

3.7 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.

3.8 Location of Branches of AIBL: More Than 60 Branches over the Country

+

3.9 Feature of AIBL:

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

AIBL’s investment policy follows different modes approved by Islamic Shariah based. The bank is committed towards establishing welfare oriented banking system, economic up

liftmen 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 AIBL invests

money to different halal business. AIBL participates in different activities aiming at creating jobs, implementing development projects taken by the govt. and developing infrastructure.

AIBL 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.

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3.10 Products & Services of AIBL:

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

3.11 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.

As SME has emerged as a thrust sector, AIBL 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.

Purpose: Eligibility: 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

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

Modes:

Working Capital Investment Fixed Capital Investment Bai-Muajjal Murabaha / Murabaha TR MPI / MPI- TR

HPSM (Equity required) Mudaraba Musharaka

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Mudaraba Musharaka

Rate of Profit/Rent

Working Capital Investment: Fixed Capital Investment:16% (On Reducing Balance Method) 15% (On Reducing Balance Method)

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/above). Third party personal guarantees (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.

3.12 Foreign Trade, Correspondents and Agent:

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

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

ID 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 remittance arrangements with the world renowned companies to bring the wage earners remittance 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.

AIBL established correspondent relationship with more than 200 branches of 30 banks in different cities of the world. It opened Dollar, Pound, Euro, Yen, CHF Accounts with famous banks of the world with a view to rendering prompt services to their valued clients dealing in Export, import etc. 3.13 Features of AIBL Training & Research Academy:

The Bank’s human resource policy is to recruit and build up quality manpower having skill and professional expertise. In implementation of the human resource development strategy, the Bank established its own training institute as “Al-Arafah Islami Bank Ltd. Training & Research Academy” at Topkhana Road, Purana Paltan, Dhaka with the vision to build up professionals with technical, human and conceptual skills.

Its main features are:

A modern training institute.

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It is situated in the center of Dhaka city.

All kinds of employee trainings are providing here.

Well decorated & Air conditioned classrooms.

Have library facilities, internet benefit etc.

Three major types of training are provided to the employee, these are: Ideological, Theoretical & Practical Training.

The Institute is focused to ensure a formal platform where employees can exchange their ideas, update their knowledge base, and open up their eyes to the complexities of banking world.

3.14 Divisions of AIBL:

General Banking Division. Human Resources Division. 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.

3.15 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

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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 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

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Chapter-4:

Human Resource Management and Training & Development Activities:

A Theoretical Review

4.1 Definition of HRM:

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

4.2 Activities of HRM:

HR planning & forecasting

Job & work design

Staffing/recruitment & selection

Training & Development

Performance appraisal & review

Compensation & reward

Employee protection & representation

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Organization Improvement

4.3 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.

4.4 About Training and Development Activities:

In simple terms, training and development refers to the imparting of specific skills, abilities and knowledge to an employee.

A formal definition of training & development is… “It is any attempt to improve current or future employee performance by increasing an employee’s ability to perform through learning, usually by changing the employee’s attitude or increasing his or her skills and knowledge.” The need for training & development is determined by the employee’s performance deficiency, computed as follows:

Training & Development Need = Standard performance – Actual performance.

4.5 Difference between Training and Development Activities of an Organization:

No. Training Activities Development Activities

1. Training refers to the process of imparting specific skills.

Development refers to the learning opportunities designed to help employees grow.

2. Training mainly provides to the new employees of an organization

Development activities mainly provides to the existing and experienced employees.

3. Training activities are short time activities. Development activities are long term activities.4. Training provides for present tasks

activities.Development activities provides for both present and future tasks.

4.6 Aims/Objectives of Training & Development:

The fundamental aim of training is to help the organization achieve its purpose by adding value to its key resource – the people it employs. Training means investing in the people to enable them to perform better and to empower them to make the best use of their natural abilities.

The particular objectives of training are to:

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Develop the competences of employees and improve their performance; Help people to grow within the organization in order that, as far as possible, its future needs for

human resource can be met from within; Reduce the learning time for employees starting in new jobs on appointment, transfers,

promotion and ensure that they become fully competent as quickly and economically as possible.

4.7 How Training Benefits both the Organization and the employees:

Leads to improved profitability and/or more positive attitudes towards profit orientation. Improves the job knowledge and skills at all levels of the organization Improves the morale of the workforce Helps people identify with organizational goals Helps create a better corporate image Fosters authenticity, openness and trust Improves relationship between boss and subordinate, Improves Labor-management relations Aids in organizational development learns from the trainee Helps prepare guidelines for work Aids in understanding and carrying out organizational policies. Provides information for future needs in all areas of the organization Organization gets more effective decision-making and problem-solving skills Aids in development for promotion from within Aids in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that

successful workers and managers usually display Aids in increasing productivity and/or quality of work Helps keep costs down in many areas, e.g. production, personnel, administration, etc. Develops a sense of responsibility to the organization for being competent and knowledgeable Reduces outside consulting costs by utilizing competent internal consultation Stimulates preventive management as opposed to putting out fires Eliminates suboptimal behavior (such as hiding tools) Creates an appropriate climate for growth, communication Aids in improving organizational communication Helps employees adjust to change Aids in handling conflict, thereby helping to prevent stress and tension. Benefits to the Individual Which in Turn Ultimately Should Benefit the Organization: Helps the individual in making better decisions and effective problem solving Aids in encouraging and achieving self-development and self-confidence Helps a person handle stress, tension, frustration and conflict Provides information for improving leadership, knowledge, communication skills and attitudes Increases job satisfaction and recognition Moves a person towards personal goals while improving interactive skills

Develops a sense of growth in learning Helps a person develop speaking and listening skills; also writing skills when exercises are

required. Helps eliminate fear in attempting new tasks

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Benefits in Personnel and Human Relations, Intra-group & Inter-group Relations and Policy Implementation:

Improves communication between groups and individuals: Aids in orientation for new employee and those taking new jobs through transfer or promotion Provides information on other government laws and administrative policies Improves interpersonal skills. Improves morale Builds cohesiveness in groups Provides a good climate for learning, growth, and co-ordination Makes the organization a better place to work and live

Training & Development offers competitive advantage to a firm by removing performancedeficiencies; making employees stay long; minimized accidents, scraps and damage; andmeeting future employee needs.

4.8 Conceptual Framework for Training ManagementTraining is provided to the employees of an organization in order to achieve the goals of the organization. Thus, for any management training exercise, the goals and objectives of the organization must be taken into consideration. In fact, management of training gets its direction from the organizational goal set by the management at a macro level. This implies that the first thing that comes into consideration for training management is the organizational goals and objectives. Organizational goal setting is followed by the formulation of a training plan based on a training needs assessment. Once a plan is in place, management has to execute the plan. At this stage training is provided to the trainees on a needs assessment basis. The training institutes conduct workshops and seminars. The final process of a training management system can be illustrated by the following figure:

Figure: Training Management System.

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4.9 Typical Topics of Employee Training1. Communications: The increasing diversity of today's workforce brings a wide variety of

languages and customs.2. Computer skills: Computer skills are becoming a necessity for conducting administrative and

office tasks.3. Customer service: Increased competition in today's global marketplace makes it critical that

employees understand and meet the needs of customers.4. Diversity: Diversity training usually includes explanation about how people have different

perspectives and views, and includes techniques to value diversity5. Ethics: Today's society has increasing expectations about corporate social responsibility. Also,

today's diverse workforce brings a wide variety of values and morals to the workplace.6. Human relations: The increased stresses of today's workplace can include misunderstandings

and conflict. Training can people to get along in the workplace.7. Quality initiatives: Initiatives such as Total Quality Management, Quality Circles,

benchmarking, etc., require basic training about quality concepts, guidelines and standards for quality, etc.

8. Safety: Safety training is critical where working with heavy equipment, hazardous chemicals, repetitive activities, etc., but can also be useful with practical advice for avoiding assaults, etc.

9. Sexual harassment: Sexual harassment training usually includes careful description of the organization's policies about sexual harassment, especially about what are inappropriate behaviors.

4.10 Different Training Methods:

There are many different ways to train.

a) Common group training methods include:

Lecture

A lecture is the method learners often most commonly associate with college and secondary education. Yet, it is also considered one of the least effective methods to use for adult learners. In this method, one person (the trainer) does all of the talking. He or she may use handouts, visual aids, question/answer, or posters to support the lecture. Communication is primarily one-way: from the instructor to the learner.

Pros: Less time is needed for the trainer to prepare than other methods. It provides a lot of information quickly when it is less important that the trainees retain a lot of details.

Cons: Does not actively involve trainees in training process. The trainees forget much information if it is presented only orally.

Demonstration

Demonstration is effective for basic skills training. The trainer shows trainees how to do something and provides an opportunity for trainees to perform the task being demonstrated.

Pros: This method emphasizes the trainee involvement. It engages several senses: seeing, hearing, feeling, touching.

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Cons: It requires a great deal of trainer preparation and planning. There also needs to be an adequate space for the training to take place. If the trainer is not skilled in the task being taught, poor work habits can be learned by the trainee.

Seminar

Seminars often combine several group methods: lectures, discussions, conferences, demonstrations.

Pros: Group members are involved in the training. The trainer can use many group methods as part of the seminar activity.

Cons: Planning is time-consuming. The trainer must have skill in conducting a seminar. More time is needed to conduct a seminar than is needed for many other methods.

Conference

The conference training method is a good problem-solving approach. A group considers a specific problem or issue and they work to reach agreement on statements or solutions.

Pros: There is a lot of trainee participation. The trainees build consensus and the trainer can use several methods (lecture, panel, and seminar) to keep sessions interesting.

Cons: It can be difficult to control a group. Opinions generated at the conference may differ from the manager¡¦s ideas, causing conflict.

Panel

A panel provides several points of view on a topic to seek alternatives to a situation. Panel members may have differing views but they must also have objective concerns for the purpose of the training. This is an excellent method for using outside resource people.

Pros: Trainees often find it interesting to hear different points of view. The process invites employees to share their opinions and they are challenged to consider alternatives.

Cons: It requires a great deal of preparation. The results of the method can be difficult to evaluate.

Role Playing

During a role play, the trainees assume roles and act out situations connected to the learning concepts. It is good for customer service and sales training.

Pros: Trainees can learn possible results of certain behaviors in a classroom situation. They get an opportunity to practice people skills. It is possible to experiment with many different approaches to a situation without alienating any actual customers.

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Cons: A lot of time is spent making a single point. Trainers must be skilled and creative in helping the class learn from the situation. In some role play situations, only a few people get to practice while others watch.

Case Studies

A case study is a description of a real or imagined situation which contains information that trainees can use to analyze what has occurred and why. The trainees recommend solutions based on the content provided.

Pros: A case study can present a real-life situation which lets trainees consider what they would do. It can present a wide variety of skills in which applying knowledge is important.

Cons: Cases can be difficult to write and time-consuming to discuss. The trainer must be creative and very skilled at leading discussions, making points, and keeping trainees on track.

Simulations

Trainees participate in a reality-based, interactive activity where they imitate actions required on the job. It is a useful technique for skills development.

Pros: Training becomes more reality-based, as trainees are actively involved in the learning process. It directly applies to jobs performed after training. Simulations involve yet another learning style, increasing the chance that trainees will retain what they have learned.

Cons: Simulations are time-consuming. The trainer must be very skilled and make sure that trainees practice the skills correctly. Only perfect practice makes perfect.

Projects

Projects require the trainees to do something on the job which improves the business as well as helps them learn about the topic of training. It might involve participation on a team, the creation of a database, or the forming of a new process. The type of project will vary by business and the skill level of the trainee.

Pros: This is a good training activity for experienced employees. Projects can be chosen which help solve problems or otherwise improve the operation. Trainees get first-hand experience in the topic of the training. Little time is needed to prepare the training experience.

Cons: Without proper introduction to the project and its purpose, trainees may think they are doing somebody else¡¦s work. Also, if they do not have an interest in the project or there is no immediate impact on their own jobs, it will be difficult to obtain and maintain their interest.

b) Common individual training methods include:

Self-discovery

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Trainees discover the competencies on their own using such techniques as guided exercises, books, and research.

Pros: Trainees are able to choose the learning style that works the best for them. They are able to move at their own pace and have a great deal of ownership over their learning.

Cons: Trainees can easily get side-tracked and may move slower than the trainer desires. It is also more difficult to measure the employee¡¦s progress.

Movies/videos/computer-based training

Content for the training experience comes primarily from a videotape or computer-based program.

Pros: It is easy to provide this training and the trainer can follow-up with questions and discussion. It is also easy to assure that the same information is presented to each trainee.

Cons: It is expensive to develop. Most trainers choosing this option must purchase the training from an outside vendor, making the content less specific to their needs.

On-the-job training

This is the most common method of training. The trainee is placed on the job and the manager or mentor shows the trainee how to do the job. To be successful, the training should be done according to a structured program that uses task lists, job breakdowns, and performance standards as a lesson plan.

Pros: The training can be made extremely specific to the employee's needs. It is highly practical and reality-based. It also helps the employee establish important relationships with his or her supervisor or mentor.

Cons: Training is not standardized for employees. There is often a tendency to have a person learn by doing the job, providing no real training.

Mentoring

A mentor can tutor others in their learning. Mentors help employees solve problems both through training them in skills and through modeling effective attitudes and behaviors. This system is sometimes known as a buddy system.

Pros: It can take place before, during, or after a shift. It gives the trainee individual attention and immediate feedback. It also helps the trainee get information regarding the business culture and organizational structure.

Cons: Training can be interrupted if the mentor moves on. If a properly trained mentor is not chosen, the trainee can pick up bad habits.

When choosing from among these methods, the trainer must decide which one best suits the trainees, the environment, and the investments available. Many trainers will choose to combine methods or vary them. Others will select a single method that works best for them and never vary.

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Chapter-5:

HRM Department of AIBL & Its Training & Development Activities

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5.1. Human Resources Division of AIBL:

Al-Arafah Islami Bank believes that consistently strong performance of the Bank is the result of the team of committed, knowledgeable and dedicated employees who are focused on achieving the excellence. According to the HR professionals working for the HR Division-- “Human resources is the most valuable asset for the Bank.” The Bank is committed to recruiting high-caliber employees and providing them with the motivation, training, working environment and compensation package they need to perform at the highest level.

The Human Resource Division of the Bank is generally formed by one Assistant Vice President, five experience officers (maximum) and 1 clerk. The Head or Chief of the Department is Assistant Vice President, he is liable to Managing Director for his duties and action and other members of this division are responsible to him. Assistant Vice President supervises, co-ordinates all Human Resource functions; make report to his higher authorities about the human resources of the Bank. Sometimes he visits the all branches physically. All managers of different branches send the respective branch’s human resource report to the Assistant Vice President or Chief of HRD. At present Mr. Mazharul Islam, Assistant Vice President (AVP) of AIBL is acting the in charge of HR division.

5.2 Training & Development Activities of AIBL:

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 Bank gives utmost importance for making continuous investment in Research and Development (R&D) and Training to achieve operational efficiency in the competitive global banking scenario. The Bank’s human resource policy is to recruit and build up quality manpower having skill and professional expertise. In implementation of the human resource development strategy, the Bank established its own training institute as “Al-Arafah Islami Bank Ltd. Training & Research Academy” at Topkhana Road, Purana Paltan, Dhaka with the vision to build up professionals with technical, human and conceptual skills.

The Institute is focused to ensure a formal platform where employees can exchange their ideas, update their knowledge base, and open up their eyes to the complexities of banking world. The Bank always acknowledged the valuable contribution made by its employees for the continuous superb achievement

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every year. The improvement in cost income ratio and better per employee performance indicate the efficiency, productivity of the employee.

The Bank created a sense of community among the employees by encouraging communication with each other in the Management Committee Meeting and across the department and the divisions. This discussion helped the employee to learn each other’s jobs and roles and develop an understanding about the Bank as a whole.

During the year 2009, the Al-Arafah Islami Bank Ltd Training Institute arranged a total of 27 training courses, workshops, seminars, and induction programs with 654 participants. The objectives of designing all training programs are to bridge the gap between present level of competence and the required level of competence.

Al-Arafah Islami Bank Limited has mentioned that “Since Islamic banking is different in many respects than that of conventional system of banking, the officers are, therefore, required to attain thorough knowledge about the Islamic banking system in order to explain the same to the clients properly. Therefore, effective training program for the officers are being undertaken. Side by side, on-the-job training is also being imparted specially for the new employees. The Board of Directors is aware that the objectives of the Bank might be defeated if the officers don’t practice the Islamic rituals in their daily life. Therefore, all officers are being motivated to be practicing Muslim in their daily life apart from saying prayer in Jamaat. It may be mentioned that every branch has hours at the time of prayer. Nevertheless Dars-e-Quran and Hadith is also being held after Asar-Prayer everyday”.

5.3 Types of Training & Development Activities at AIBL:

Training and Development activities at AIBL may be of three types: (i) Ideological (ii) Theoretical and (iii) Practical.

Ideological training & Development activities may be related with the Holy Quran and Sunnah and Shariah issues on banking. The practical training may conducted through discussions and exercises on banking issues in a classroom setting. In addition, some training may be administered while the employee is on the job, to allow the employee to learn Islamic banking through practice.

The Theoretical training & Development activities may equip an employee with Islamic knowledge and values, which is considered to be essential for Islamic banking. Theoretical training may provide a conceptual clarity on the understanding of Islamic banking.

The Practical training & Development activities of Islamic banking provide the skills and art necessary to perform a job. An employee should have all types of training in order to best prepare him to perform his job requirements.

5.4 Different Training Courses/Workshops/Seminars of AIBL’s T&D Institute:

Serial no Subject1. Training Courses a. Foundation Training

b. Islamic Economics and Banking

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c. Islamic Banking and Insuranced. Credit Operation and Managemente. International Trade and Financef. Audit and Inspectiong. Customer Servicesh. Banking Law and Practicesi. Information Technologyj. Managing Core Riskk. SME, Micro & Agricultural Investment

2.Workshops/Seminars/Induction Programs

a. Credit Risk Gradingb. Documentation/Legal aspects in loan sanction and disbursementd. Prevention of Money Launderinge. Standard Operating Proceduref. Basel II Capital Accordg. Credit Card Operationh. Retail Bankingi. Relationship Bankingj. Foreign remittance-rules and proceduresj. Induction Program

Furthermore, AIBL needs to be careful to tailor the training session to the specific employee’s needs. Training should be designed to address the needs of senior management all the way down to the line workers in order to be most productive.

Islamic banking needs morally sound customers for its smooth operation. Islamic value oriented customers are essential for growth in Islamic banking. Therefore, value oriented customers training may be another main area of training for Islamic banks.

5.5 Methods of T&D activities of AIBL:

Al-Arafah Islami Bank Ltd. Ltd. follows –

Internal Job Training & Development External Job Training & Development Distance Learning

5.5.1 Internal Job Training & Development:

a) 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 similar 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

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Accounts Returns Department”. It is about 10 weeks. Then they give importance to other departments.

b) 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.

5.5.2 External Job Training & Development:

a) Other Educational & Training Institute: Sometimes AIBL sends their employees for training to various educational and training institute like- Institute of Business Administration (IBA) and Bangladesh Institute of Bank Management (BIBM), BD Jobs Training Institute etc.

b) Sending to other banks: Job related courses, seminars, workshops and conferences developed and Group Training and Management Development courses arranged at various local & multinational banks within the country where AIBL sends its employees.

c) Overseas Training: Sometimes AIBL provides off the job training to motivate the employees. They send employees to abroad for training to India, Malaysia, Dubai etc. Employees who work for a long period of time with the bank and very loyal to the organization get the benefit of being trained in overseas.

5.5.3 Distance Learning:

AIBL is planning to start Web-based and multimedia self-study programs available through its Internet and multimedia Learning Centers located in its T&D Institutes.

5.5.4 Resident Management Trainee Program (RMT Program)

The Resident Management Trainee program (RMT) aims to select a group of high potential executive trainees and provide them training and development opportunities. The RMT program gives potential executives effective and systematic training to acquire an excellent understanding of the commercial operations and business functions.

The RMT program ensures that successful applicants, with the right training, will have the ability and potential to reach the highest level of management within AIBL Bangladesh, and possibly beyond.

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Chapter-6:

Analysis & Discussion

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Analysis of Training & Development Activities of Al-Arafah Islami Bank Ltd. has been done on the basis of the following criteria:

Attending Formal Training and Development (T&D) sessions of the employees

A questionnaire was selected to find out whether targeted employees already attended any T&D Activities or not? The study shows that 100% of the respondents have already attend in different T&D activities provided by AIBL.

Figure 1: Attending Formal Training & Development Program by the Employees.

Training Participated by Individuals

One of the main objectives of the study was to find out the approximate amount of training experienced by individuals. The study shows that 14% of the employees participated less 2 training programs which are followed by 2 to 5 trainings (40%). Again the study also shows that 40% employees attended more than 7 training sessions.

Table 1 & Figure 2: Training Participated by Individuals

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Number of Training Percentage0-1 time 14%2-5 times 40%6-7 times 6%

More 40%Total 100%

Purposes of training program of AIBL

Six priorities have been selected for training programs of AIBL. These priorities are Knowledge and skill development, Career development, Improve productivity, Reduce cost, Create awareness. Figure 3 shows the priorities of training program of AIBL.

Table 2: Purposes of training program of AIBL

Factors %Knowledge and skill development 87%Career development 54%Improve productivity 47%Reduce cost 40%Create awareness 34%

Figure 3: Purposes of training program of AIBL

How Training & Development Benefit the Employees?

The respondent explains their opinion following way:a) Enables decision making capabilityb) Customer service improvementc) Assessments of the clientsd) Recovery from customers has been increasede) Desk skills increasesf) Knowledge & skill developmentg) Productivity increasesh) Creating more awarenessi) Increasing IT skillj) Learning Behavioral conceptk) Knowing about Islamic Economyl) Career development

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One executive writes-----“It benefits me by providing appropriate body of knowledge as well as by identifying area where I need improvements. It also helps us to share our superiority of knowledge with other training attendants.”

Tools and Techniques Used at AIBL to Asses the Training and Development Program

One of the objectives of the study was to find out the tools and techniques used at AIBL to asses the need for giving training to the employees. The finding of this objective has been shown below:

Table 3: Need Assessment of Training and Development Program

Factor Presence/ UseNeed analysis YesPerformance appraisal YesDepartmental recommendation YesService history report NoIndividual’s need Yes

Evaluation System of the Employees after Attending Training & Development

Employees are evaluated after the training session about their learning capability by following- Written test, Interview & Monitoring working performance on the job.

Regular Assessments of Training Need

From the study it was found that 85% employees believe that the HRD of AIBL assesses the employee training need regularly. Rests 15% don’t believe such.

Priorities of Training & Development Programs (Employees)

Four priorities have been selected for training programs of AIBL. These priorities are Senior Employees, Junior Employees, New Employees, and Based on requirement etc. Table 4 and Figure 4 show the priorities of training and development program of AIBL.

Table 4 & Figure 4: Priorities of Training & Development Programs

Factors PercentageSenior Employees 47%Junior Employees 53%New Employees 60%Based on requirement 80%

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Availability of Training for Good Performance

The question was whether employees think trainings which they get are available for their good performance. The result of the study was following:

Table 5 & Figure 5: Availability of Training for Good Performance

Organizational Capability to Understand Training Needs

The question was whether employees think that HRD of AIBL understands the training needs for all employees. The result of the study was following:

Table 6 & Figure 6: Organizational Capability to Understand Training Needs

IT Training on AIBL’s Operating Software “ABABIL”

65% respondent of the sample already got the training on the software ABABIL, rest of yet didn’t have the training which was shown by following Table 7 & Figure 7.

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Factors Frequency Percentage

Strongly Agree 4 27%Agree 11 73%Neutral 0 0%Disagree 0 0%Strongly Disagree 0 0%

Total 15 100%

Factors Frequency Percentage

Strongly Agree

6 40%

Agree 7 46%Neutral 1 7%Disagree 1 7%Strongly Disagree

0 0%

Total 15 100%

Table 7 & Figure 7: IT Training on AIBL’s Operating Software “ABABIL”

Receiving Behavioral Training

Among different professional and unprofessional training Behavioral Training is an important training for employees. AIBL also provides its employees such training.

Table 8 & Figure 8: Percentage of Receiving Behavioral Training

Types of Training

The study also aims to find out different types of training programs conducted by the AIBL and the result has been sshown by Table 9.

Types of Training Programs Yes/NoIn-house training YesExternal training YesOverseas training Yes

Table 9: Types of Training

Types of Trainer

Different types of trainer train the employees of AIBL. The Table 10 shows that:

Types of Trainer Yes/NoInternal YesExternal YesForeign Yes

Table 10: Types of TrainerDifferent Training Methods

One of the objectives of the study was to find out different training method used by the trainers of AIBL T&R Institute. Table 12 indicates the result of this objective.

Table 11: Different Training Methods

Training Methods Yes/NoLecture Discussion Yes

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IT Training Frequency PercentageYes 8 65%No 7 35%

Total 15 100%

Behavioral Training

Frequency Percentage

Yes 6 40%No 9 60%Total 15 100%

Demonstration YesSeminar NoComputer based training YesCase studies YesRole playing NoMovies/ Videos YesBehavior Modeling NoOn-the-job training Yes

Priorities of Training & Development Programs (Job Related)

Training always provided either present job tasks or targeting for future job development. From the study it was found that AIBL’s training target is mainly for future development.

Figure 9: Priorities of Training & Development Programs (Job Related)

Priority of Training & Development (Employee Development)

Seven priorities have been selected for training programs of AIBL. These priorities are: employees’ motivation, technological knows how, customer service, upgrading employees’ skills, employees need, employees’ behavior, orientation. Figure 10 shows the priorities of training of AIBL.

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Figure 10: Priority of Training & Development (Employee Development)

Respondents’ Overall Evaluation about Trainers (based on some specific factors)

A grade sheet & some specific criterion have been mentioned in the questionnaire sheet for giving an overall grade of the trainers by the employees of AIBL under whom they did different training & development programs. The criterion & specific factors are:

Grade Marking EvaluationA+ 91%-100% OutstandingA 81%-90% Very GoodA- 71%-80% GoodB 60%-70% AcceptableB- Above 50% Average

15 Respondents’ response was following (highest % grading shown on violet bold color):

A+ A A- B B-1. Trainers did a good job of stating the objectives at the beginning of

training.27% 73%

2. Trainers made good use of visual aids (multimedia, projector, white board) when making presentation.

40% 34% 26%

3. Trainers were good at keeping everyone interested in the topics. 13% 40% 47%4. Trainers encouraged questions and participation from trainees. 26% 40% 13% 20%5. Trainers made sure everyone understood the concepts before moving on

to the next topic.7% 47% 33% 13%

6. Trainers summarized important concepts before moving to the next module.

13% 54% 26% 7%

The study shows that among six factors got highest four grading A, one highest grading on A+ and A-. So on average trainers’ performance was ‘Very Good’. Again employees also gave the same ranking to the trainers on their personal opinion. Table 11 & Figure 11 shows that:

Evaluation Frequency PercentageOutstanding 3 20%Very Good 8 54%

Good 4 26%Acceptable 0 0%

Average 0 0%

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Table 12 & Figure 11: Overall Evaluation about Trainers

Respondents’ Overall Opinion About AIBL’s T&R Institute:

The study shows that among seven factors of T&R Institute of AIBL, highest five factors got OK, one factor is Quite OK for its suitable location, but most thinking factors for the management is the institution’s Internet facility which is very poor which is marked by the 67% respondents’ opinion.

Respondents’ responses was following (highest % checking shown on red bold color):

QUITE OK OK NOT AT ALLa. Suitable location to go there 54% 46%b. Large, well equipped Classroom 20% 47% 33%c. Modern T&D Institute 33% 47% 20%d. The training materials 7% 93%e. Trainer selection 26% 74%f. Internet benefits 33% 67%g. Library benefits 40% 67% 20%

Table 13: Employees Opinion about AIBL’s T&R Institute

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Chapter-7:

SWOT Analysis of Training & Research Academy and T & D Activities of AIBL

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STRENGTHS:

An exclusive Islamic bank and one of the largest Islamic Bank in Bangladesh

Strong growth.

Have own Training Institute.

The T&R Institution is situated at the center of Dhaka.

Trainers’ selection is quite well.

AIBL has its own good professionals who are very much capable to provide good training.

Officers are sending regularly to the institution for training for their good performance as well as for achieving target.

Shariah board of renowned scholars who always train regularly to the employees about Islamic banking & economy.

Healthy training & working environment.

Branch Wide On the job training opportunities.

Foreign trainers of different international foreign banks always give training.

WEAKNESSES:

Their training center is small enough. Modern educational and training life is

becoming technological and internet based day by day, but in the T&R institute of AIBL these facilities are very limited & poor.

Libraries books are not enough as well as latest writer’s books are not available.

Don’t have enough facilities like modern T&R Institute, like--residence benefits which is very important for the officers who comes from outside of Dhaka.

International financial journals, magazines, bulletins are not available.

Researches are not done although its name is Training and Research Academy.

Don’t have divisional branches of T&R Academy although the bank is countrywide.

Website has not yet completed and there haven’t any information about T&D activities.

OPPORTUNITIES: The T&R Academy can be large by huge investment

and establishing in the name of University School of Social Economics and Management.

Increase branch’s network of T&R Academy within the country by division wise.

May merge or link up with other Islamic Banks Training Centers in order to make a large & modern training academy.

Should do more research in order to make banking system and operations more easily & technologically upgraded for both its employees as well as for the customers.

May start online learning system or e-learning system

Distance learning system should have to start as early as possible especially for the officers who work outside the Dhaka Branches.

Foreign trainers should be more. Overseas training should be more.

THREATS: New competitors setting up their Islamic

banking sections and they have the training infrastructure, skill, ability, resources & attitude to capture the market more than the Al-Arafah Islami Bank.

Some officers reporting that some trainers are not well behaved at all which leads useless training & learning as well as poor working performance.

Others banks are doing research on how to make easy banking operations and they are getting success on that while AIBL haven’t any concentration on such types of research.

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Chapter-8:

Findings, Recommendations &

Conclusion

8.1 Findings:

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AIBL is a good prospective bank of Bangladesh. Its overall banking performance is good but not outstanding like other competitive modern banks like- HSBC, Dutch Bangla Bank, SCB, BRAC Bank, Dhaka Bank etc. due to its old format of operations of banking systems.

Even AIBL’s HR & Marketing Division is also not well structured. But recently due to facing huge competition in the market the management compelled to give concentration on these departments especially providing training to its employees in order to make them competitive & skilled by T&R Academy. Personally I have found some findings of HR department and T&R Academy which has been mentioned below-------

HRD’s officers don’t have HR educational background. HRD’s selection, training and promotion procedure are not well structured, haphazard and not

even applied properly. HRD is not taking proper care of the working people. AIBL’s training center is not too much modern and not large. Internet benefits in the training center are very poor and it should be improve. Some employees are not satisfied with the training process and by some trainers’ behavior. The organization does not assess need for training regularly. Trainers’ selection is quite well. AIBL has its own good professionals who are very much capable to provide good training. They provide both On the Job and Off the Job training to impart new knowledge. They evaluate employee training. Researches are not done at AIBL and it should start immediately.

8.2 Recommendations:

A. For HR Department:

The Bank should always concern about the world’s latest human resource management Practices. HR officers should be sent to abroad for participating in training courses, seminars and work shops.

To retain and attract quality employees the bank should always try to follow competitive strategy in case of employee benefits, working conditions, and other motivational approaches.

The higher authority of the bank should always try to make a fair evaluation of employees’ performance. They should develop the procedures of evaluation each and every year in accordance with the demand.

The bank can also start campus recruiting that could bring a yield of highly educated graduates for the entry-level the organization could arrange seminars in the top business schools across our country. Also the company should facilitate online Curriculum Vitae-posting system that is very much effective practice used by the top business organizations over the world.

The higher authority of the bank should always concern about the fairness of recruitment and selection. Without having efficient, energetic, enthusiastic people an organization can’t achieve its ultimate goal. A good placement can’t be without having good employee.

The human resource department should place the right people in the right position. For this reason they first attempt to find out the human need of the bank in various department, different

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branches and different positions. The HR division should always careful in constructing different work group.

B. For Training & Research Academy:

a. Trainer:

More external reputed trainer should be included Trainers should be friendlier. Selection should be more appropriate about who is needs training Needs foreign trainer More skilled trainer needs More experienced banker, professional bodies’ member like- BIBM, MBM, etc and

foreign trainer needs.

b. Training Materials:

Training Materials should be regularly updated Training Materials should supply before starting training session More modern training materials should be added Training materials should be more rich Needs more modern technical instrument More journals, books, magazines about banking needs.

c. Training Courses:

May be taken spot training at sub-registry and land-office for investment purpose More IT related training Overseas training at different famous T&D Institute Banking terms related training Investment on loan training More on the job training or Branch wise training.

d. T&R Institution:

T&R institution must provide available & speedy internet facility as well as reputed international journals to help employees update themselves.

Must be larger, modernized, well equipped classrooms. T&R institution should be larger than now. T&R intuition should have residential facilities for its all employees, especially who comes from

outside of Dhaka.

8.3 Conclusion:

At present there is no such organization in the world that is free from problem and challenges. Every concern has to strive and struggle a lot to be more profitable and to get more competitive edge. The management of Al-Arafah Islami Bank is taking strategic steps to enable the bank to emerge as a strong and progressive institution. It is continuing to make efforts to refine its products, services and operations to make the bank more compatible. Providing regular training and development activities to the employees and making them competitive is such type of effort.

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Most of the officers of the AIBL are well qualified with good educational backgrounds. Training academy of the Bank has providing training regularly to these employees to make them competitive & strong on their performance. Hence, I hope its strong manpower intelligence and strong training and research activities will make it one of the most rising Islami Bank in this region. Finally, I believe my research, findings & recommendations will help AIBL at least in some way to decorate a new format of its training, development & research activities for achieving its goal.

1. Books:

Human Resources and Personnel Management /William B. Werther, Jr., & Keith Davis.--- 5 th

edition; Irwin/McGraw-Hill, Inc. United states, 2006.

Human Resource Management / Gary Dessler--Seventh Edition.

2. Documents of AIBL:

Diary of Al-Arafah Islami Bank Ltd.-2010

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Bibliography

Service Rule Book of Al-Arafah Islami Bank Ltd.

The Annual Report of AIBL.-2008

The Annual Report of AIBL.-2007

Different prospectus of Al-Arafah Islami Bank Ltd.

Al-Arafah Islami Bank Limited (1995): Memorandum and Articles of Association of al-Arafah Islamic Bank Limited.

3. Interviews of AIBL Employees:

4. Web Site:

http://www.al-arafahbank.com

Wikipedia, the free encyclopedia.mht

Survey Questionnaires on Effectiveness of Training & Development Activities of Al-Arafah Islami Bank Ltd.

Name of the Organization: ……………………………………………………………………………………………..

Name of the Employee: …………………………………………………………….................................................

Designation: ………………………………………………………………………………..........................................

1) Have you attended any Training and Development (T&D) sessions for your appointed job responsibilities?

A. Yes B. No

2) If yes, how many times have you attended in the T&D session provided by AIBL?

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APPENDIX: SURVEY QUESTIONNAIRE

A. 0-1 time B. 2-5 times C. 5-7 times D. More

3) What are the purposes of training program of your organization?

A. Knowledge and skill development B. Career development C. Improve productivity D. Reduce costE. Create awareness

4) How does it benefit you?

Answer: a)b) c) d) e) f) g) h)

5) How do you assess training and development need in your organization?

A. Need analysis B. Performance appraisal C. Departmental recommendation E. Service history report F. Individual’s need

6) How are you evaluated after the training session about your learning capability?

A. By written test B. By interview C. Monitoring working performance on the job D. All of the above

7) Does your organization assess the training need on a regular basis?

A. Yes B. No

8) To whom the training is given more in your organization?

A. Senior Employees B. Junior Employees C. New Employees D. Based on requirement E. All of the above

9) Do you believe the training which AIBL provides is ‘well enough’ for your good performance?

A. Strongly Agree B. Agree C. Neutral D. Disagree E. Strongly Disagree10) Do you think that your organization understands the training needs for all employees?

A. Strongly Agree B. Agree C. Neutral D. Disagree E. Strongly Disagree

11) Have you got any IT training on AIBL’s operating software “ABABIL”?

A. Yes B. No

12) Have you attended any behavioral training arranged by T&D Institute?

A. Yes I’ve attended B. No I haven’t attended but I think it’s important. C. No and I think it’s not necessary.

13) Does your organization have a centralized training area or department?

A. Yes B. No

14) Most of the time, Training in your organization is provided for-

A. Current Job B. Future Development

15) What is the priority of the training of your organization?

A. Employees motivation B. Technological know how C. Customer service D. Upgrading employees skillE. Employees need F. Employees behavior G. Orientation

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16) What types of training do you usually organize for your employees?

A. In-house training B. External training C. Overseas training

17) Types of your trainer------

A. Internal B. External C. Internal and External of home country D. Internal & External of home and foreign country

18) Are they well qualified and have a sound background?

A. All of them B. Most of them C. Some of them D. Very few of them

19) Give an overall evaluation about trainers:

Total no. of training & trainers:

A+ =91%-100% =OutstandingA =81%-90% = Very GoodA- =71%-80% = GoodB =60%-70% = AcceptableB- =Above 50% = Average

A+ A A- B B-1. Trainers did a good job of stating the objectives at the beginning of training.2. Trainers made good use of visual aids (multimedia, projector, white board) when

making presentation.3. Trainers were good at keeping everyone interested in the topics.4. Trainers encouraged questions and participation from trainees.5. Trainers made sure everyone understood the concepts before moving on to the

next topic.6. Trainers summarized important concepts before moving to the next module.7. Overall how would you rate these trainers? (Check one)

Poor: Adequate: Average: Good: Excellent:

20) What training methods does your organization usually use?

A. Lecture Discussion B. Demonstration C. Seminar D. Computer based training E. Case studies F. Role playing G. Movies/ Videos H. Behavior Modeling I. On-the-job training

21) Your opinion about AIBL’s T&D Institute---------

QUITE OK OK NOT AT ALLa. Suitable location to go thereb. Large, well equipped Classroomc. Modern T&D Instituted. The training materialse. Trainer selectionf. Internet benefitsg. Library benefits

22) Have you send to any other training institution for training by AIBL?

#Yes #No

23) What other trainings you think that AIBL may start for making its employee more professional and skilled?

Answer:

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24) Your personal suggestion about AIBL’s T&D system-------

e. Trainer:

f. Training Materials:

g. T&D Institution:

………………………………… Signature of the Respondent

Thank you, for your valuable support, time and co-operation. All the data that you have provided is strictly confidential and will be use only in research purpose.

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