Al-Arafah Islami Bank Limited (AIBL) organised a discussion on hajj with the members of the Hajj Agencies Association of Bangladesh (HAAB) Thursday in the capital. Al-Arafah Managing Director and CEO Farman R Chowdhury was present at the program as chief guest. Md Shafiqur Rahman, deputy managing director of the bank, presided over the discussion. Read: Islami Bank remittance clients to get motorcycles Al-Arafah deputy managing directors Shabbir Ahmed, Md Mahmudur Rahman, Abed Ahmed Khan, Abdullah Al Mamun and Md Fazlur Rahman Chowdhury and HAAB officials were also present. Al-Arafah Islami Bank was set up as a private limited company on June 18, 1995.

Some private sector banks in Bangladesh are in deep crisis because of lack of adequate liquidity and are being forced to borrow money from state-owned Sonali Bank at a 9 percent interest rate to stay afloat. Islami Bank, Al-Arafah Islami Bank and National Bank are borrowing money from Sonali Bank at a 9 percent interest rate, which is the highest commercial lending rate at present. Economists and banking sector insiders say that it means the sector is passing through a hard time due to higher non-performing loans, lack of good governance and serious corruption in the management of the respective banks. They say at present the call money rate is between 6-7 percent while banks are borrowing at 9 percent rate, which proves the crisis has mounted in these banks. They also say the troubled banks have no other options, but to borrow money. Also read: 5 held for spreading rumors on social media about Islami Bank, S Alam group Both such borrowing and lending are very risky considering the ability of investment of these banks, they say. BRAC Bank Chairman Dr Ahsan H Mansur told UNB that some banks have lost their customers’ trust due to their mismanagement. “As a result, people have withdrawn money from those banks,” he said. Giving an example he said that the deposit of BRAC Bank increased by 33 percent in the last quarter while the deposit volumes of many banks decreased. Also read: Scam-hit Islami Bank earns operational profit in 2022, Basic Bank reports loss Usually, banks charge a higher interest rate to lend to other banks while considering it risky, he said. On 13 December 2022, the Sonali Bank’s Board of Directors approved the investment of Tk200 crore in fund placement in favour of Islami Bank Bangladesh Limited and Tk75 crore in favour of Al-Arafah Islami Bank Limited at a 9 percent lending rate for a period of 90 days. On the same day, the bank's Board also agreed to the proposal to extend the term of the Tk150 crore loans to National Bank for another six months at 9 percent interest subject to payment of the previous interest. It is a normal practice that when a bank faces a liquidity crisis it borrows from another bank via the interbank money market. Read More: 60% bank sub-branches must be outside city corporations, municipal areas: Bangladesh Bank But the liquidity situation in three private sector banks is so critical that they are forced to borrow from another bank at the highest commercial lending rate. According to the Bangladesh Bank's guidelines, banks can charge a maximum of 9 percent interest on all types of loans other than consumer loans such as auto loans and personal loans, in which case the highest lending rate ceiling is 12 percent. Professor Dr Abul Barakat told UNB that any short-term borrowing at such a rate is not harmful, but it could create trouble while getting such loans will be lingering. He said banks sometimes face a liquidity crisis, then it is required to borrow to meet the instant crisis. But a 9 percent lending rate for banks is high. Read More: Bangladesh Bank expects first instalment of $4.5 b IMF loan to arrive by next month: Spokesman “Then how much a bank would have to charge against any commercial loans,” he asked. Sector insiders say corruption and lack of good governance are the main reasons behind such a crisis. Some questioned the role and the ability of the central bank of Bangladesh to regulate commercial banks that fail to check corruption.

The Chattogram Zonal Office of Al-Arafah Islami Bank Sunday held a day-long workshop titled "Preventing Money Laundering and Terrorist Financing" in the port city. Farman R Chowdhury, managing director and chief executive officer of Al-Arafah Islami Bank, inaugurated the workshop as chief guest. Mohammad Azam, senior executive vice-president and head of Al-Arafah Islami Bank Chattogram Zone, presided over the workshop. Read: MetLife brings all-in-one insurance solution Thirty-seven managers of the Agrabad branch, 37 other branches of the bank's Chattogram Zone and 11 in-charges of sub-branches participated in the programme. Farman asked the participants to strictly follow all the guidelines of the Bangladesh Bank and the Bangladesh Financial Intelligence Unit while monitoring each and every transaction to prevent money laundering and terrorist financing.