Investment methods and risk management of Al-Arafah Islami Bank Limited

Abstract

This internship report, titled “Investment Methods and Investment Risk Management (CRM) of Al-Arafah Islami Bank PLC,” has been prepared as a partial fulfillment of the requirements for the Bachelor of Business Administration (BBA) program at Brac University. The primary objective of this report is to analyze the Investment Risk management practices of Al-Arafah Islami Bank PLC and evaluate how effectively the bank identifies, assesses, and mitigates Investment-related risks in its financing operations. The study is based on both primary observations during the internship period and secondary data collected from the bank’s annual reports, policy guidelines, and relevant literature. Throughout the internship, practical exposure was gained by observing the bank’s Investment procedures, including borrower assessment, documentation verification, collateral evaluation, Investment approval processes, disbursement practices, and postdisbursement monitoring systems. The report examines the existing Investment management framework of the bank, focusing on its Investment/Credit risk grading system, risk mitigation tools, recovery strategies, and compliance with Bangladesh Bank regulations and Shariah principles. The findings reveal that, although the bank maintains a structured Investment/Investment/Investment/Credit Risk Management system, challenges such as increasing non-performing loans, inadequate customer documentation, and external economic pressures can affect the effectiveness of its risk management efforts. To address these challenges, the report recommends enhancing Investment/Credit assessment tools, adopting more advanced monitoring mechanisms, strengthening client screening procedures, improving staff training, and ensuring strict adherence to regulatory guidelines.