In the words of banking, deposit means to put money into a bank account on some terms and conditions. Deposit is nothing but a financial claim. Actually it's a piece of paper evidencing a claim against an issuer (i.e., a bank) for whom it is a financial liability. For the holder, it is a financial asset. Today deposit is the principal liability for any bank.
Deposits are the foundation upon which Al-Arafah Islami Bank Limited thrives and grows. They are a unique item on AIBL,S balance sheet that distinguishes it from other types of business firms. The ability of AIBL,S management and staff to attract checking and savings accounts from businesses and consumers is an important measure of the bank’s acceptance by the public. Deposits provide most of the material for bank making investments and, thus, represent the ultimate source of bank profits and growth. Deposits generate cash revenues, and it is out of the excess cash reserves AIBL holds that new investments are created. Important indicators of management effectiveness in any bank are whether or not deposited funds have been raised at the lowest possible cost and whether enough deposits are available to fund those investments the bank wishes to make. Both the cost and amount of deposits Al-Arafah Islami Bank Ltd. can sell to the public are heavily influenced by the pricing schedules and competitive maneuverings of scores of bank. Innovation, in the form of new deposit products, services delivery methods, and pricing schemes, is rampant in banking today. Bankers who fail to stay abreast of changes in their competitors deposit pricing and marketing programs stand to lose both customers and profits.
4.3: How is deposit collected?
Al-Arafah Islami Bank Limited receives deposits money from its clients on the basis of participation in profit and loss. Deposits received on the basis of sharing in profit and loss shall be invested or employed, at the absolute discretion of the Al-Arafah Islami Bank Limited, only in transactions or business the return on which does not accrue to the AIBL by the way of interest. The main contributing factor in the emergence of a Profit-Loss-Sharing (PLS) banking system is the prohibition of riba (or interest) in the holy Quran. The basic intention behind establishing Al-Arafah
Islami Bank Limited was the desire of Muslims entrepreneurs to reorganize their financial activities to complement the principles of the Shariah and enable them to conduct their financial transactions without including in, riba. Deposit plans designed to attract customer funds today come in 19 flavors and more, each plan having features intended to closely match individual and corporation needs for saving money and for making payments for goods and services. In collecting deposits Al-Arafah Islami Bank Ltd. follows mudaraba method. Two ways Al-Arafah Islami Bank Ltd. collects deposits:
AL-WADIA METHOD
MUDARABA METHOD
4.4: What are the types of deposit?
Al-Arafah Islami Bank Ltd is a depository institution selling deposit product. The number and range of deposit services offered by AIBL is impressive indeed. Various deposit products are given bellow-
SL No.
Types of Deposit
01.
i) Mudaraba Term Deposit-36 Months
ii) Mudaraba Term Deposit-24 Months
iii) Mudaraba Term Deposit-12 Months
iv) Mudaraba Term Deposit-6 Months
v) Mudaraba Term Deposit-3 Months
02.
Mudaraba Savings Deposit
03.
Mudaraba short notice Deposit
04.
Mudaraba Monthly Hajj Deposit
05.
Mudaraba Monthly Installment Term Deposit
06.
Mudaraba Monthly Profit Based Term Deposit
07.
Monthly Savings Investment(SID)
08.
One time Hajj Deposit
09.
(a) Al-Arafah Savings Bond (3 years)
(b) Al-Arafah Savings Bond (5 years)
(c) Al-Arafah Savings Bond (8 years)
10.
Marriage Saving Investment Scheme (MSIS)
11.
Pensioners deposit scheme
12.
Special Saving (Pension) Scheme
13.
Cash WAQF
14.
Lakhopati Deposit Scheme
15.
Kotipati Deposit Scheme
16.
Millionaire Deposit Scheme
17.
Double Benefit Scheme
18.
Mudaraba Triple Benefit Deposit Scheme
19.
Probashi Kallyan Deposit Pension Scheme
4.5: Provisional Rate of Return on Deposit:
No actual profit rate can be determined upfront, otherwise it will be considered as riba. If profit is guaranteed then it is considered as riba. Typically, in order to attract public attention to invest in mudaraba accounts, AIBL will make known their "Indicative rate of return". The public must not be confused with the rate and misjudge it as a similar to the conventional interest rate (which is fixed from the beginning ).Firstly, we must understand that the rate is only analytical and prediction based, which is normally in accordance with the bank's previous performance. Hence, the bank is not obliged to pay out the profit based on the indicative rate, but the effective rate or the actual rate of return at the time of maturity, will determine the actual amount of profit which will be distributed to the investors. Secondly, the indicative rate is dissimilar to the interest rate as the conventional bank is obliged to pay out exactly as advertised (whether the bank makes a profit or makes no difference). Also, all money which is placed in the conventional accounts is based on loans, where as funds which are put into an Islamic account are based on the Mudaraba investment contract, which is approved by Shariah. Provisional profit rate is highlighted by the Islamic bank to gain public confidence.
4.6: Competitive Returns on Deposit Schemes:
Monies must be rewarded. The Principles of Shariah require banks and financial institutions to be structured on an interest-free basis; this does not mean that such institutions are charitable concerns. As long as a person advancing money expects to share in the profits earned (or losses incurred) by the party, a stipulated proportion of profit is legitimate. Different types of deposits carry different amount of returns or rewards. People deposit money in Islamic banks in the hope of earning profit. The rate of returns on deposits largely depends on the returns on the investments made by the Islamic banks themselves. Unlike conventional banking whereby depositors will get a fixed return regardless of how the banks perform, depositors in Islamic Banking will earn higher returns when the returns on the investments made by the Islamic Banks are higher, because of the profit sharing ratio and vice versa. One must bear in mind that the prohibition of interest in Islam does not mean that savings will not be rewarded. It also does not mean that the cost of financing would be zero. Instead of using the rate of interest to mobilize savings, Al-Arafah Islami Bank Limited mobilizes funds on the basis of profit sharing or risk sharing with the depositors. During the year under review, Al-Arafah Islami Bank Ltd. paid the following provisional rates of profit to its depositors which are highly competitive:
SL No.
Types of Deposit
Profit rate for the year 2008
01.
i) Mudaraba Term Deposit-36 Months
9.50%
ii) Mudaraba Term Deposit-24 Months
9.50%
iii) Mudaraba Term Deposit-12 Months
9.50%
iv) Mudaraba Term Deposit-6 Months
9.25%
v) Mudaraba Term Deposit-3 Months
9.00%
02.
Mudaraba Savings Deposit
4.00%
03.
Mudaraba short notice Deposit
3.00%
04.
Mudaraba Monthly Hajj Deposit
10.25%
05.
Mudaraba Monthly Installment Term Deposit
10.25%
06.
Mudaraba Monthly Profit Based Term Deposit
10.25%
07.
Mudaraba Lakhopati Deposit Scheme
10.25%
08.
Mudaraba Kotipati Deposit Scheme
10.25%
09.
Mudaraba Millionaire Deposit Scheme
10.25%
10.
Mudaraba Double Benefit Scheme
12.25%
4.7: Allocation of distributable profit:
The investment income (except exchange and commission income) is shared between depositors and the bank @ 70: 30.
4.8: The Problem with interest:
Perhaps the most far-reaching and controversial aspect of Islamic economics in terms of its implications from a western perspective is the prohibition of interest (riba). Financial systems based in Islamic tenets are dedicated to the elimination of the payment and receipt of interest in all forms. It is this prohibition that makes Islamic banks and other financial institutions different in principle from their western counterparts. Both the Holy Qur'an and sunnah treat interest as an act of exploitation and injustices and such it is inconsistent with Islamic notions of fairness and property rights. Thus, there is no place for the institution of interest in the Islamic order.
4.9: Risk Sharing:
Because interest is prohibited, suppliers of funds become investors instead of creditors. The provider of the financial capital and the entrepreneur share business risks in return for shares of the profits. The Financier is known as 'Rab-ul-maal' and the Bank as 'mudarib'.
4.10: Money as "Potential" capital:
Money is treated as "potential" capital--that is, it becomes actual capital only when it joins hands with other resources to undertake a productive activity. Islam recognizes the time value of money, but only when it acts as capital, not when it is "potential" capital.
4.11: Performance Measurement of Deposit Schemes: A Study on Al-Arafah Islami Bank Limited, Khulna Branch:
Islamic banking has become today an undeniable reality. the number of Islamic banks is ever increasing. Now Islamic Banks with huge amount of capital are being established. Conventional banks are operating Islamic Wings or Islamic subsidiaries for the operations of Islamic banking. Even the non-Muslim financial institutions are entering the field and trying to compete each other to attract as many Muslims customers as they can.
It seems that the size of Islamic banking will be multiplied during the next decade and the operations of Islamic banks are expected to cover a large area of financial transactions of the World. But before the Islamic financial institutions expand their business, they should evaluate their performance. Every new system has to learn from the experience of the past to revise its activities and to analyse its deficiencies in a realistic manner. Unless we analyse our merits and demerits we can not expect to advance towards our total success. It is in this perspective that we should seek to analyse the operations of Islamic banks in the light of Shariah and to high light what they have achieved and what they have missed.
Islamic banks have made a great breakthrough in the present banking system by establising Islamic financial institutions meant to follow Shariah. It was a Cherished dream of the Muslim Ummah to have an interest-free economy, but the concept of Islamic banking was merely a theory discussed in report, having no practical example. It was the Islamic banks & financial institution which translated the theory into practice and presented a living and practical example for the theoretical concept in an environment where it was claimed that no financial institution can work without interest. It was indeed a courageous step on the part of the Islamic banks to come to forward with a firm resolution that all transations involving interest. The AIBL has completed the first 14 years of its operation. It should be possible now to indicate the broad trends of its operations in the light of the bank's diverse functions and powers. The main functions of the bank are to participate in equity capital and to invest in productive projects and enterprises.
Performance:
The term performance means how well an institution serves. The aim of the study is to see how well Al-Arafah Islami Bank Ltd. performs to render financial services to its customers. In order to examine the performance of Al-Arafah Islami Bank Limited, the volume of profit and the numbers of customers have been taken into consideration i.e., here performance has been measured in terms of customer & in terms of profit . The performance of Al- Arafah Islami Bank Ltd. measured is given below :
4.11.1: Mudaraba Term deposit(MTD):
Al-Arafah Islami Bank Ltd. finances money from customers through Mudaraba term deposit. It receives term deposit for a minimum period of 3 months to 3 years on the princiaples of Mudaraba. Mudaraba term deposit an investment contract where the depositor provides the capital for investment and the bank using skill and experience does the investment. Bank invests the money, earns pofit, and shares it with the depositor as per predetermined Mudaraba ratio agreed upon at the time of the contract. According to Mudaraba rules, profit is to be shared as per agreement and loss is solely borne by the depositor. When the term is over, the Mudaraba term depositors if they like, can again deposit their money under a new contract. No cheque book is issued against any term Mudaraba Deposits. The basic difference between the Mudaraba savings deposits account and term Mudaraba deposit account is the question of specificity of the duration and weighted followed for calculation of profit.
performance Measurement of all MTD in terms of customer & in terms of profift :
3 Months MTD
Year
Accounts opened
Accounts closed
Accounts continued
2007
170
45
125
2008
289
82
207
2009
684
392
294
Source: Desk Report
684 - 289
289
289 - 170
170In 2008 = = 70% (Growth rate of opened Accounts in year 2007)
In 2009 = = 136.68% (Growth rate of opened Accounts in year 2008).
The accounting record of the Al-Arafah Islami Bank Ltd. shows that the Bank had succeeded in increasing the number of 3 months MTD depositor. The number of depositors rose 289 in December 2008 from 170 as on December 2006. In the year 2009, the Bank was able to collect 684 depositors which showing 136.68% growth over the year 2008.
Profit paid on 3 Months MTD
Year
Tk.
2007
2,521,413
2008
4,311,581
2009
9,557,254
Source: Desk Report
4,311,581 - 2,521,413
2,521,413
9,557,254 - 4,311,581
4,311,581
In 2008 = = 71% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 122 % (Perfomance Measurement in terms of profit in year 2009).
During the year 2008, the Bank paid a profit of Tk. 4,311,581 compared to Tk. 2,521,413 in year 2007, considerable increase of 71% over the previous year. Total profit of the 3 months MTD increased to Tk. 9,557,254 in the year 2009 compared to Tk. 4,311,581 in the last fiscal, representing a growth of 122% over the year 2008.
6 Months MTD
Year
Accounts opened
Accounts closed
Accounts continued
2007
103
15
88
2008
127
39
88
2009
141
87
54
Source: Desk Report
127 - 103
103
141- 127
127In 2008 = = 23.31% (Growth rate of opened Accounts in year 2008)
In 2009 = = 11.02% (Growth rate of opened Accounts in year 2009).
The depositors under 6 Months term in 2007 was 103, while the number rose to 127 in 2008, registering an increase of 23.31% within 1 year. The Deposits that expected by the Bank under the 6 Months term was 141. The number increased from 2008 to 2009 approximately 11.02%.
Profit paid on 6 Months MTDR
Year
Tk.
2007
1,975,646
2008
2,509,071
2009
3,324,418
Source: Desk Report
2,509,071- 1,975,646
1,975,646
3,324,418- 2,509,071
2,509,071
In 2008 = = 27% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 32.5 % (Perfomance Measurement in terms of profit in year 2009).
The total profit figure of the 6 Months MTD in the year 2008 was Tk. 2,509,071 which indicates a growth of 27% over the year 2007. In the year 2009 the profit figure of the 6 Months MTD was Tk. 3,324,418. It can be observed that the profit amount increased by 32.5% over the year 2008.
12 Months MTD
Year
Accounts opened
Accounts closed
Accounts continued
2007
289
29
260
2008
384
74
310
2009
418
217
210
Source: Desk Report
384 - 289
289
418- 384
384In 2008 = = 32.87% (Growth rate of opened Accounts in year 2008)
In 2009 = = 8.85% (Growth rate of opened Accounts in year 2009).
According the data available as of December, 2008, the bank's depsitors incresed to 384 from 289 in the year 2007 registering an increase of 95 depositors i.e., 32.87 percent. In the year 2009, the total number of depositors rose to 418 from 384 in the preceding year registering an increase of 8.85 percent.
Profit paid on 12 Months MTDR
Year
Tk.
2007
12,345,257
2008
16,403,387
2009
19,989,181
Source: Desk Report
16,403,387- 12,345,257
12,345,257
19,989,181- 16,403,387
16,403,387
In 2008 = = 32.87% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 21.86 % (Perfomance Measurement in terms of profit in year 2009).
The Bank distributed Taka 16,403,387 as profit among depositors in the year 2008. It shows a good progress with an increse of 32.87 percent over the year 2006. In the year 2009, the Bank has paid Taka 19,989,181 to the 12 Months MTD depositors. It indicats 21.86 percent growth over the year 2008.
24 Months MTD
Year
Accounts opened
Accounts closed
Accounts continued
2007
-
-
-
2008
-
2
-
2009
3
5
-
Source: Desk Report
In the year 2007 & 2008, no accounts were opened but 2 accounts were closed in year 2008. in the year 2009, 3 accounts were opened and 5 accounts were closed.
Profit paid on 24 Months MTDR
Year
Tk.
2007
112,375
2008
122,147
2009
119,781
Source: Desk Report
119,78181 - 122,147
122,147
122,147 - 112,375
112,375In 2008 = = 8.7% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = - 1.94% (Perfomance Measurement in terms of profit in year 2009).
The profit stood at Taka 122,147 in YE-2008 & Taka 112,375 in YE-2007, representing the growth rate of - 1.94% in YE- 2009 and 8.7% in YE 2008.
36 Months MTD
Year
Accounts opened
Accounts closed
Accounts continued
2007
13
4
9
2008
14
23
-
2009
6
50
-
Source: Desk Report
6- 14
14In 2008 = = 7.69% (Growth rate of opened Accounts in year 2008)
In 2009 = = -57.14% (Growth rate of opened Accounts in year 2009).
The number of customer for 36 Months MTD increased from 2007 to 2008 by 7.69%. The number of 36 Months MTD depositors reduced drastically in the year 2009, registering a 57.14% fall compare to 2008.
Profit paid on 36 Months MTD
Year
Tk.
2007
1,000,689
2008
1,130,435
2009
2,680,868
Source: Desk Report
1,130,435 - 1,000,689
1,000,689
2,680,868 - 1,130,435
1,130,435In 2008 = = 12.97% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 137% (Perfomance Measurement in terms of profit in year 2009).
The profit paid on 36 Months MTD accounts was Taka 1,130,435 in YE- 2008. So the amount of profit has been increased from 2007 to 2008 nearly 12.97 percent. The volume of profit increased by Taka 1,550,433 or 137% from 2008 to 2009.
4.11.2: Mudaraba Savings Deposit(MSD) :
In savings account, depositors are guaranteed that their amounts will be refunded in full on demand, but however, they are not participating in a business risk. So, savings depositors are not Islamically entitled to any return. In case some portion of the profits generated from the use of savings depoists are given to the depositors, it is absolutely at the discretion of the banks and it should be treated as gift.
Mudaraba savings Deposit(MSD)
Year
Accounts opened
Accounts closed
Accounts continued
2007
380
20
360
2008
423
13
410
2009
466
63
403
Source: Annual Report
423 - 380
380
466- 423
1423In 2008 = = 11.32% (Growth rate of opened Accounts in year 2008)
In 2009 = = 10.17% (Growth rate of opened Accounts in year 2009).
AIBL's saving accounts continue to enjoy a positive double digits growth annualy. The number of MSD customers has increased to 423 on 31st December 2008 from 380 in YE- 2007. The number of customers stood 466 in YE 2009. It indicates 10.17% growth over the year 2008.
Profit paid on MSD
Year
Tk.
2007
1,368,046
2008
1,874,035
2009
2,342,544
Source: Annual Report
1,874,035- 1,368,046
1,368,046
2,342,544- 1,874,035
1,874,035In 2008 = = 37% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 25% (Perfomance Measurement in terms of profit in year 2009).
The Bank has achieved a good progress with regard to increase its profit position during the recent years. It is seen that the total profit under MSD incresed to Tk. 1,874,035 in 2008 from Tk. 1,368,046 in 2007. The profit increased nearly 37% in year 2008. AIBL also experienced an increase in its MSD profit volume from 2008 to 2009. The Bank has paid profit Tk. 468,509 more in year 2009.
4.11.3: Monthly Installment Term Depoist(MTD):
AIBL has intrduced Monthly Installment Term deposit (MITD) that allows customer to save on a monthly basis and get a handsome return upon maturity. The prime objective of this scheme is to encourage the people to develop their habit of saving. Actually MITD is a series of equal payments or receipts made after equal time interval.
5 years ITD
Year
Accounts opened
Accounts closed
Accounts continued
2007
97
5
92
2008
165
-
165
2009
428
103
325
Source: Desk Report
165 - 97
97
428 - 165 165In 2008 = = 70% (Growth rate of opened Accounts in year 2008)
In 2009 = = 159% (Growth rate of opened Accounts in year 2009).
The number of 5 years ITD showed a record increase in 2008 & 2009. As of 31st December 2008, total number of customer reached to 165 from 97 in year 2007 representing growth of 70%. As on 31st December 2009 the bank's total 5 years ITD customer stood at 428 comparing to 165 in ye 2008.
Profit paid on 5 years ITD
Year
Tk.
2007
547,529
2008
787,239
2009
1,068,555
Source: Desk Report
787,239 - 547,529
547,529
1,068,555- 787,239
787,239In 2008 = = 43.78% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 35.73% (Perfomance Measurement in terms of profit in year 2009).
The bank experienced a remarkable increase in the year 2008 & 2009. The Total profit paid in 2008 was Tk. 787,239 & the growth rate compare to the year 2008 was 43.78%. The bank,s total profit for 5 years ITD was increased to Tk. 1,068,555 as on 31st December 2009 which is 35.73% higher than previous year's total profit i.e., Tk. 787,239.
8 years ITD
Year
Accounts opened
Accounts closed
Accounts continued
2007
20
3
17
2008
30
-
30
2009
95
11
84
Source: Desk Report
30 - 20
20
95 - 30
30In 2008 = = 50% (Growth rate of opened Accounts in year 2008)
In 2009 = = 216.67% (Growth rate of opened Accounts in year 2009)
During the year 2007, the number of 8 years ITD customer was 20 which grew to 30 in the year 2008. So, 50% growth is achieved in year 2007. The number of 8 years ITD depositors have been increased by 216.67 percent in 2009-08.
Profit paid on 8 years ITD
Year
Tk.
2007
205,236
2008
267,556
2009
425,534
Source: Desk Report
425,534 - 267,556
267,556In 2008 = = 30.37% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 59.04% (Perfomance Measurement in terms of profit in year 2009).
The profit of 8 years ITD has been incresed from Tk. 205,236 to Tk. 267,556, experiencing a growth of 30.37% in the year 2008. At the end of 2009, the profit of 8 years ITD stood at Tk. 425,534 which is 59.04% higher than that of Tk. 267,556.
10 years ITD
Year
Accounts opened
Accounts closed
Accounts continued
2007
247
18
229
2008
301
-
301
2009
474
97
377
301 - 247
247Source: Desk Report
474 - 301
301In 2008 = = 21.86% (Growth rate of opened Accounts in year 2008)
In 2009 = = 57.48% (Growth rate of opened Accounts in year 2009)
The record shows that growth rate of 10 years ITD account from 2007 to 2008 is 21.86%. In the year 2009, a record of a 57.47% growth rate has been achieved.
Profit paid on 10 years ITD
Year
Tk.
2007
1,420,143
2008
1,725,345
2009
2,289,293
Source: Desk Report
1,725,345 - 1,420,143
1,420,143
2,289,293 - 1,725,345
1,725,345In 2008 = = 21.49% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 32.69% (Perfomance Measurement in terms of profit in year 2009).
The total profit figure of the 10 years ITD in the year 2007 was Tk. 1,420,143 which grew to Tk. 1,725,345 in the year 2008. This represents a 21.49% increase over the year 2007. The profit figure has been increased to 32.69% in YE 2009 as aganist 21.49% in YE 2008.
12 years ITD
Year
Accounts opened
Accounts closed
Accounts continued
2007
89
6
83
2008
129
-
129
2009
219
47
172
Source: Desk Report
129 - 89
89
219 - 129
129In 2008 = = 44.95% (Growth rate of opened Accounts in year 2008)
In 2009 = = 69.77% (Growth rate of opened Accounts in year 2009)
The time deposit account under the 12 years term increased from 89 customers in 2007 to 129 customer in 2008, registering an increase of 40 customer within the one year. The number of 12 years ITD customer rised from 2008 to 2009 by 69.77%. So, the deposit position of the AIBL showed a favorable tendency every year.
Profit paid on 12 years ITD
Year
Tk.
2007
779,893
2008
1,130,406
2009
1,570,008
Source: Desk Report
1,130,406 - 779,893
779,893
1,570,008 - 1,130,406
1,130,406In 2008 = = 44.94% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 38.89% (Perfomance Measurement in terms of profit in year 2009).
We can determine that profit of 12 years ITD increased from 2007 to 2008 approximately 44.94%. The profit figure increased noticeably in YE 2009 over the previous year, which is evaluated in terms of profit i.e., 38.89%.
4.11.4: Lakhopati Deposit Scheme(LDS):
AIBL has introduced "Lakhopati Scheme" which has flexibility in term of maturity and monthly installment as per affordable capacity. Under this deposit scheme, equal amount of money is deposited in every month for a certain period of time. This is a series of equal payments made after equal time interval. The scheme may be of 5(five) different terms; 3 or 5 or 8 or 10 or 12 years. Accounts under this scheme may be opened for monthly deposits of Tk. 2,375/-, Tk. 1,275/-, Tk. 670/-, Tk. 460/- and Tk. 335/- only. The deposit will be received on Mudaraba principle. After the maturity of the deposit account the depositor will receive one lakh Taka at a time.
3 years LDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
53
5
48
2008
84
7
77
2009
68
35
33
Source: Annual Report
84 - 53
53
68 - 84
84In 2008 = = 58.49% (Growth rate of opened Accounts in year 2008)
In 2009 = = -19.00% (Growth rate of opened Accounts in year 2009)
The 3 years LDS shows an increase in 2007 and a decrease in 2009. The number of depositors i.e., 84 was higher than that of the previous year's i.e., 53. It shows 58.49% growth over the year 2007. But in the year 2009 the number of depositors decreased by 19%.
Profit paid on 3 years LDS
Year
Tk.
2007
206,769
2008
319,826
2009
239,562
Source: Annual Report
319,826 - 206,769
206,769
239,562 - 319,826
319,826In 2008 = = 54.68% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = -25.00% (Perfomance Measurement in terms of profit in year 2009)
AIBL experienced a mixed experience in 2008 & 2009. The profit paid on 3 years LDS has stood at Tk. 319,826 as on 31st December 2008 as against Tk. 206,769 in year 2007, showing an increse by 54.68%. AIBL experienced a decrease in its 3 years LDS profit from 2008 to 2009. The profit decreased nearly 25% in 2009.
5 years LDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
140
12
128
2008
172
16
156
2009
132
29
103
Source: Annual Report
172 - 140
140
132 - 172
172In 2008 = = 22.86% (Growth rate of opened Accounts in year 2008)
In 2009 = = -23.26% (Growth rate of opened Accounts in year 2009)
The number of Lakhopati depositors under 5 years terms increased from 140 in 2006 to 172 in 2008 differencing an increse of 22.86%. On the other hand, the number of Lakhopati depositors under 5 years terms decreased by 23.26% in the year 2009.
Profit paid on 5 years LDS
Year
Tk.
2007
263,273
2008
297,127
2009
339,146
Source: Annual Report
297,127 - 263,273
263,273
339,146 - 297,127
297,127In 2008 = = 12.86% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 14.14% (Perfomance Measurement in terms of profit in year 2009)
Record shows that the profit figure increased to Tk. 297,127 in the year 2008 from Tk. 263,273 in the year 2007, registering an increase of Tk. 33,854 within one year. The figure in 2009 also shows an increse of Tk. 42,019.
8 years LDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
111
12
99
2008
140
8
132
2009
108
31
77
140 - 111
111Source: Annual Report
108 - 140
140In 20078= = 26.13% (Growth rate of opened Accounts in year 2008)
In 2009 = = - 22.86% (Growth rate of opened Accounts in year 2009)
The number of customers of 8 years LDS up by 26.13% from 2007 to 2008. The opposite situation is occured in the year 2009. In this year the customer of 8 years LDS reduced by 22.86%.
Profit paid on 8 years LDS
Year
Tk.
2007
184,723
2008
229,832
2009
377,221
Source: Annual Report
377,221 - 229,832
229,832
229,832 - 184,723
184,723In 2008 = = 24.42% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 64.13% (Perfomance in Measurement terms of profit in year 2009).
The profit of 8 years LDS was Tk. 184,723 in year 2007 which grew to Tk. 229,832 in year 2008. this means that 24.42% growth is achieved in year 2008. Again, the profit of 8 years LDS was Tk. 229,832 in the year 2008 which grew to Tk. 377,221 in year 2009. This means that 64.13% growth is achieved in year 2009.
10 years LDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
183
13
170
2008
251
15
236
2009
142
36
106
Source: Annual report
251 - 183
183
142 - 251
251In 2008 = = 37.16% (Growth rate of opened Accounts in year 2008)
In 2009 = = - 43.43% (Growth rate of opened Accounts in year 2009)
The number of customer of 251 was higher than that of the previous year at 183. So, 37.16 percent positive growth is achieved in 2008 from 2007. The number of customer for the year 2007- 2008 was 251 which reduced by 43.43% in the year 2009 from 2008.
Profit paid on 10 years LDS
Year
Tk.
2007
117,249
2008
137,346
2009
169,003
137,346 - 117,249
117,249Source: Annual Report
169,003 - 137,346
137,346In 2008 = = 17.14% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 23.05% (Perfomance Measurement in terms of profit in year 2009).
The profit paid on 10 years LDS accounts was Tk. 137,346 during the year 2008, recorded a growth of 17.14% over the the year 2007. At the end of 2009, AIBL achieved a growth of 23.05%
12 years LDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
227
32
195
2008
304
22
282
2009
173
49
124
Source: Annual Report
304 - 227
227
173 - 304
304In 2008 = = 33.92% (Growth rate of opened Accounts in year 2008)
In 2009 = = - 43.09% (Growth rate of opened Accounts in year 2009)
The total number of 12 years LDS customers amounted to 304 compared to 227, showing an increase of 33.92% in 2008-07. The number of customer has been decreased from 304 to 173, showing a reduction of 43.09 percent.
Profit paid on 12 years lDS
Year
Tk.
2007
111,323
2008
128,627
2009
144,698
Source: Annual Report
128,627 - 111,323
111,323
144,698 - 128,627
128,627In 2008 = = 15.54% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 12.49% (Perfomance Measurement in terms of profit in year 2009).
The profit for the 2008 was Tk. 128,627 up from Tk. 111,323. So, profit of 12 years LDS improved from 2007 to 2008 approximately 15.54%. The profit paid on 12 years LDS was Tk. 144,698 in year 2009 which registered a growth of 12.49% over the previous year 2008.
4.11.5: Kotipati Deposit Scheme(KDS):
Under this scheme depositors will deposit Tk. 2,29,500/- or 1,69,500/- or 1,27,500/- or 99,500/- or 80,000/- or 46,000/- or 33,450/- or 21,485/- or 14,330/- or 11,100/- per month for 3 or 4 or 5 or 6 or 7 or 10 or 12 or 15 or 18 or 20 years term respectively and shall get a possible Taka of one crore on maturity.
12 years KDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
-
-
-
2008
4
-
4
2009
1
-
1
Source: Desk Report
4 - 0
0
4 - 1
1In 2008 = = 100.00% (Growth rate of opened Accounts in year 2008)
In 2009 = = 300.00% (Growth rate of opened Accounts in year 2009)
We can see that 4 accounts were opened in the year 2008 and 1 account was opened in the year 2009. No account was opened in the year 2007.
Profit paid on 12 years kDS
Year
Tk.
2007
193,633
2008
207,535
2009
230,602
Source: Desk Report
207,535 - 193,633
193,633
230,602- 207,535
207,535In 2008 = = 7.18% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 11.11% (Perfomance Measurement in terms of profit in year 2009)
Again we can observe that the profit of 12 years KDS started increasing from the year 2007. It is seen that the profit figure increased to Tk. 207,535 in 2008 from Tk. 193,633 in 2007, showing a growth of 7.18%. At the end of 2008, 11.11 percent growth is achieved.
4.11.6: Millionaire Deposit Scheme(MDS):
This scheme is very attaractive for the people with limited income. Under this scheme one can make deposit of Tk. 23,950/- or 16,950/- or 12,750/- or 9,950/- or 8,000/- or 4,600/- or 3,345/- or 2,170/- or 1,150/- per month for 3 or 4 or 5 or 6 or 7 or 10 or 12 or 15 or 20 years term respectively. At the end of the term he/she can get a possible sum of Tk. 1.00 (one) million i.e., Tk. 10(ten) lac at a time.
10 years MDS
Year
Accounts opened
Accounts closed
Accounts continued
2007
17
-
17
2008
24
-
24
2009
25
4
21
Source: Desk Report
24 - 17
17
25 - 24
24In 2008 = = 41.18% (Growth rate of opened Accounts in year 2008)
In 2009 = = 4.17% (Growth rate of opened Accounts in year 2009).
The record shows that the growth rate of customer for 10 years MDS from 2007 to 2008 is 41.18 percent. The number of customer increased by 4.17% at the end of 2009.
Profit paid on 10 years mDS
Year
Tk.
2007
137,323
2008
148,263
2009
157,844
Source: Desk Report
148,263 - 137,323
137,323
157,844 - 148,263
148,263In 2008 = = 7.97% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 6.46% (Perfomance Measurement in terms of profit in year 2009).
The profit paid on 10 years MDS has stood at Tk. 148,263 as against Tk. 137,323 at 31st December 2007. In the year 2008, the bank has experienced a growth of 7.97%. The profit figure increased to Tk. 157,844 from Tk. 148,263, showing an increase of 6.46% from 2008 to 2009.
4.11.7: Double Benefit Scheme(DBS):
Under this scheme, one can deposit a certain single amount of money for a six year period. After six years, the deposit amount will probably be doubled.
6 years DBS
Year
Accounts opened
Accounts closed
Accounts continued
2007
1
-
1
2008
2
1
1
2009
117
18
99
Source: Annual Report
2 - 1
1
117 - 2
2In 2008 = = 100.00% (Growth rate of opened Accounts in year 2008)
In 2009 = = 5750.00% (Growth rate of opened Accounts in year 2009).
The bank had succeed in attacting much deposits in 2009. There was a high growth rate in DBS in the year 2008-2009. We can see that 100% growth is achieved from 2007 to 2008. We can see that 5750% growth is achived from 2008 to 2009.
Profit paid on 6 years DBS
Year
Tk.
2007
1,944,750
2008
2,400,926
2009
3,039,147
2,400,926 - 1,944,750
1,944,750Source: Annual Report
3,039,147 - 2,400,926
2,400,926In 2008 = = 23.5% (Perfomance Measurement in terms of profit in year 2008).
In 2009 = = 27 % (Perfomance Measurement in terms of profit in year 2009).
The Bank had paid profit Tk. 2,400,926 in 2008 which was 23.5% higher than that of 2007. The bank had paid much profit to the DBS depositors in year 2009 which was Tk. 3,039,147, representing an increase of 27% over the year 2008.
Al-Arafah Islami Bank Ltd.
Total Deposits, 2004 - 2008
December 31
2008 (Taka)
2007 (Taka)
2006 (Taka)
2005 (Taka)
2004 (Taka)
29,690,121,157
23,009,128,287
16,775,335,248
11,643,657,492
10,108,280,000
Source: Desk Report
11,643,657,492 - 10,108,280,000
10,108,280,000
16,775,335,248 - 11,643,657,492
11,643,657,492AIBL's Deposit Growth in 2005 = = 15.1893051241%
23,009,128,287 - 16,775,335,248
16,775,335,248AIBL's Deposit Growth in 2006 = = 44.0727302355%
29,690,121,157 - 23,009,128,287
23,009,128,287AIBL's Deposit Growth in 2007 = = 37.1604677155%
AIBL's Deposit Growth in 2008 = = 29.0362711123%
Interpretation :
In the recent years Al-Arafah Islami Bank Limited had succeeded in attracting increased deposit. The total deposit figure rose to Taka 11,643,657,492 in December 2005 from Taka 10,108,280,000 as on December 2004, registering an increase of Taka 1,535,377,492. The total deposit has stood at Tk. 16,775,335,248 in year 2006 against Tk. 11,643,657,492 at 31st December 2005. In this year, the bank experienced a growth of 44.0727302355%. The total deposit of the bank has increased from 16,775,335,248 taka of 2006 to 23,009,128,287 taka in 2007, experiencing a growth of 37.1604677155%. The total deposit of the bank was Tk. 29,690,121,157 at 31st Deecember 2008 as against Tk. 23,009,128,287 at 31st December 2007 recording a growh of 29.0362711123%.
Al-Arafah Islami Bank Ltd.
Total Profit Paid on Deposit, 2004 - 2008
December 31
2008 (Taka)
2007 (Taka)
2006 (Taka)
2005 (Taka)
2004 (Taka)
2,220,465,915
1,628,628,877
819,714,448
550,797,453
506,890,000
Source: Desk Report
550,797,453 - 506,890,000
506,890,000
819,714,448 - 550,797,453
550,797,453AIBL's Profit paid Growth in 2005 = = 8.66212649687%
1,628,628,877 - 819,714,448
819,714,448AIBL's Profit paid Growth in 2006 = = 48.8232096091%
2,220,465,915 - 1,628,628,877
1,628,628,877AIBL's Profit paid Growth in 2007 = = 98.6824657017%
AIBL's Profit paid Growth in 2008 = = 36.3395888626%
Interpretation :
The bank has paid a profit of Tk. 550,797,453 at 31st December 2005 as against Tk. 506,890,000 at December 2004 recording a growth of 8.66212649687%. The bank has paid a profit Tk. 819,714,448 during the year 2006. The profit payment of the bank during the year 2005 was 550,797,453 and the thus the bank has attained positive growth of 48.822096091% of respect of profit payment. At the end of 2007, the profit paid on deposit was 1,628,628,877 Taka showing a record growth of 98.6824657017%. The Bank has paid the depositors Tk. 2,220,465,915 which is 63.4030428895% of the investment income and 77.661329145% of the total expenditure for the year 2008. It indicates 36.3395888626% growth over the year 2007.
Al-Arafah Islami Bank Ltd.
Total Deposits, 2004 - 2008
December 31
Year
Taka in Million
2004
10,108.28
2005
11,643.66
2006
16,775.34
2007
23,009.13
2008
29,690.12
Graph-1: Total Deposits, 2004-2008
Al-Arafah Islami Bank Ltd.
Total Profit Paid on Deposit, 2004 - 2008
December 31
Year
Taka in Million
2004
506.89
2005
550.80
2006
819.71
2007
1,628.63
2008
2,220.47
2004
2005
2006
2007
2008
506.89
550.8
819.71
1,628.63
2,220.47
Graph-2: Total Profit Paid on Deposit, 2004-2008
Al-Arafah Islami Bank Ltd.
Deposit Mix 2008
December 31
Products
Taka in Million
Al Wadia current Account
3521.04
Mudaraba savings Deposit
4213.97
Mudaraba Short Notice Deposit
781.85
Mudaraba Term Deposit
15669.88
Mudaraba Special Deposit
5105.95
Bills Payable
397.43
Total
29690.12
Deposit Mix %
12%
14%
3%
53%
17%
1%
Mudaraba savings
deposit
Mudaraba short notice
deposit
Mudaraba term deposit
Mudaraba special
deposit
Bills payable
Al wadia current account
Graph-3: Deposit Mix 2008
