The Masraf Al Rayan Bank - Assignment Example

The Masraf Alrayan Bank During the internship period, I joined the Masraf Alrayan bank in order to work with them and at the same time learn from them. I was sent to the credit analysis department which is composed of four analysts and I was directed to work with each of the analysts for a week so that I would learn from each of them. During my first week at the bank, I worked with Shayma who I one of the analysts in the bank and the following report describes what I learned from her. I was able to know the kind of products that the bank offers to its customers who are individuals, companies and organizations. I learnt about the Murabaha where the bank sells an asset at a pre agreed cost and profit after purchasing an item either will full payment or on a deferred basis. The bank benefits from the profit earned and the seller of the property also benefits since the selling takes place in a shorter time. Another product of the bank is the good Murabaha and the vehicle Murabaha whereby the bank takes responsibility of selling goods or a vehicle at an agreed cost with the seller who is a client of the bank. Immediately after the sale takes place, the bank deducts their agreed profit% and gives the rest amount to the seller(Hammonds, 2007). I learnt about the letter of credit (L/C) which is a method of payment whereby the two parties have ample protection. The bank writes to an exporter on behalf of an importer who is their client and it verifies and guarantees payment. The bank also offers financial protection to its customers through construction surety bonds such as bid bonds and performance bonds. Through these finical protections, the client of the bank is able to evaluate a construction company. Surety and bid bonds have a slight difference but in both, the construction company agrees to pay the bank a certain amount which the client is given in case the contractor fails to complete the project. The bank also offers payment guarantee as a service to their customers and return they charge a pre-agreed % on the recovered debt. The client of the bank, who in such a case is the person demanding payment, approaches the bank and provides details of the debt agreement with the debtor and leaves the task of demanding the payment to the bank. The bank also offers a service called Mudaraba which is basically an agreement between the bank and their client. In this service, the bank provides finance for a certain project which is proposed by the client who in turn provides the technical knowhow of carrying out the venture. The venture must be profit oriented and both parties share the profit in agreed percentages. I was introduced to Ijara which is a leasing agreement whereby the lessee is permitted to use an asset belonging to the lessor for an agreed period without owning the property. It is basically an asset finance whereby a person is allowed to use property without owning it. The bank also offers an asset finance they refer to as Ijarah Muntahia-bi-tamleek which is basically a kind of a lease whereby the lease ends up owning the property. In this kind of lease, the lessee attains full ownership of the property after full payment of the agreed amount (Dillman, 2006). The bank offers a service called Musharaka whereby they form a partnership with their client to invest in certain venture. In this kind of partnership, both parties (client and the bank) contribute to the capital of the venture financially either equally or as agreed. The capital contributed could be used to venture into a new business or an existing one but must be profit oriented. The Masraf Alrayan bank also offers a service called the Istisna’a whereby the come into agreement with a client on purchasing a certain commodity. The bank now becomes the seller of the product and it negotiates with the producer in such a way that the product is delivered at a specified time for a specified price. The client is able to get the goods they need in time and a favorable price and the bank benefits by charging some amount on their client (Hammonds, 2007). The client of the bank can either pay for the products immediately or at a specific future date depending on the terms and conditions agreed upon. I was able to understand how operations are carried out through the help of the analyst. A client willing to get finances approaches the relationships manager who forwards the request to the credit analysis desk for analysis. The relations manager must request the client to provide their financial statements and a copy their Identifications documents as well as a Security for the credit. The identification documents are important in knowing exactly who the person is and the financial statements are used to gauge the financial position of the client. After analyzing, the request is taken to the credit risk department who are in charge of approving or denying the request depending on the accounts of the client and the security they are providing. I was able to access the Credit Bureau which is an important tool to any financial organization. The Credit Bureau provides details about companies and shows their financial positions. The bank used this program which is offered by the central bank to gauge the financial position of a company and also learn about their positives and negatives. Through this program, the credit risk department is able to determine whether or whether not to offer the credit to a company. After learning all the requirements for credit allocation, I was shown the credit application forms which companies or individuals willing to get credit form the bank fill. The credit application contained all the details of the client and hence the bank is in a position to tack down their clients in case they fail to repay credit allocated to them. In conclusion, I was able to learn the work flow process in the department and the basic requirement required by a client in order to get credit form the bank. I was able to fully understand the requirements that a client willing to get credit from the bank must submit. After fully understanding the requirements and the workflow process, I interacted with the credit bureau which gauges the financial position of a company and is the overall determinant of whether to give or deny a loan. Appendix 3: Internship Student Weekly Report Template Internship weekly report Qatar University Max Grade: 10 Points College of Business and Economics Summer 20xx Instructor: Dr. ______________ Name: ___________ Student ID:________________ Training Completed: (1 points) Work Flow process: I was able to understand the flow of work in the department through the help of the analyst. A client willing to get finances approaches the relationships manager who forwards the request to the credit analysis desk for analysis. Credit Application: The relations manager must request the client to provide their financial statements and a copy their Identifications documents as well as a Security for the credit. The identification documents are important in knowing exactly who the person is and the financial statements are used to gauge the financial position of the client. After analyzing, the request is taken to the credit risk department who are in charge of approving or denying the request depending on the accounts of the client and the security they are providing. New Skills Learning (1 points) I was able to know the kind of products that the bank offers to its customers who are individuals, companies and organizations. I learnt about the Murabaha where the bank sells an asset at a pre agreed cost and profit after purchasing an item either will full payment or on a deferred basis. The bank benefits from the profit earned and the seller of the property also benefits since the selling takes place in a shorter time(Hammonds, 2007). Another product of the bank is the good Murabaha and the vehicle Murabaha whereby the bank takes responsibility of selling goods or a vehicle at an agreed cost with the seller who is a client of the bank. Immediately after the sale takes place, the bank deducts their agreed profit% and gives the rest amount to the seller(Hammonds, 2007). I learnt about the letter of credit (L/C) which is a method of payment whereby the two parties have ample protection. The bank writes to an exporter on behalf of an importer who is their client and it verifies and guarantees payment. The bank also offers financial protection to its customers through construction surety bonds such as bid bonds and performance bonds. Through these finical protections, the client of the bank is able to evaluate a construction company. Surety and bid bonds have a slight difference but in both, the construction company agrees to pay the bank a certain amount which the client is given in case the contractor fails to complete the project. The bank also offers payment guarantee as a service to their customers and return they charge a pre-agreed % on the recovered debt. The client of the bank, who in such a case is the person demanding payment, approaches the bank and provides details of the debt agreement with the debtor and leaves the task of demanding the payment to the bank. The bank also offers a service called Mudaraba which is basically an agreement between the bank and their client. In this service, the bank provides finance for a certain project which is proposed by the client who in turn provides the technical knowhow of carrying out the venture. The venture must be profit oriented and both parties share the profit in agreed percentages. I was introduced to Ijara which is a leasing agreement whereby the lessee is permitted to use an asset belonging to the lessor for an agreed period without owning the property. It is basically an asset finance whereby a person is allowed to use property without owning it. The bank also offers an asset finance they refer to as Ijarah Muntahia-bi-tamleek which is basically a kind of a lease whereby the lease ends up owning the property. In this kind of lease, the lessee attains full ownership of the property after full payment of the agreed amount (Dillman, 2006). The bank offers a service called Musharaka whereby they form a partnership with their client to invest in certain venture. In this kind of partnership, both parties (client and the bank) contribute to the capital of the venture financially either equally or as agreed. The capital contributed could be used to venture into a new business or an existing one but must be profit oriented. The Masraf Alrayan bank also offers a service called the Istisna’a whereby the come into agreement with a client on purchasing a certain commodity. The bank now becomes the seller of the product and it negotiates with the producer in such a way that the product is delivered at a specified time for a specified price. The client is able to get the goods they need in time and a favorable price and the bank benefits by charging some amount on their client (Hammonds, 2007). The client of the bank can either pay for the products immediately or at a specific future date depending on the terms and conditions agreed upon. Trouble Shooting Skills (2 points) In last 30 hours, demonstrate your trouble shooting skills, list at least three problems that you faced and how did you solve them in the corresponding tables Problems Encountered How problem was solved 1. Difficulties to attend in Ramadan Due to the work schedule, I was not able to attend the Ramadan but I devoted the lunch break for prayers 2. Understanding banking sector At first I did not fully understand the procedure but with the help of questions which I asked the analyst I was able to understand the sector 3. Relating with the customers The customers were very inquisitive and I Would get angry at times but the analyst was of good help since she insisted that the Customers are always right and hence I stopped getting angry. Field Supervisor’s Feedback (2 points) In last 30 hours, list what appreciation you received from your field supervisor and also what criticism (suggestions to improve your skill) you received from field supervisor. You should list at least three items in each table Compliments Criticism/ Suggestion 1. I am a first learner 1. I should improve on customer relations 2. I have good educational background of the banking sector 3. I am self-motivated Work Environment Assessment (2 points) Merits Demerits 1. The analyst were very helpful 1. The people working there have a lot of duties and more workers should be employed 2. The Bank is large and has many operations 3. The workers are treated kindly Student’s Contribution to Organization (1 point) List at least three (to max 5) contributions that made to your internship workplace. In last 30 hours 1. I was able to attend to customers who were making enquiries either in relation to credit or to other sectors of the bank. 2. I assisted the credit analysts in evaluating the financial positions of the clients 3. I was involved in keeping record of the details in every credit transaction 4. With the help of the Credit Bureau I was able to gauge the financial positions of companies that were requesting for funds 5. With the assistance of the analyst, I was able to determine which clients were worth being allocated the credit and those that were not worth. Summary of Learning and Benefits Achieved (1 point) I was able to learn the work flow process in the department and the basic requirement required by a client in order to get credit form the bank. I was able to fully understand the requirements that a client willing to get credit from the bank must submit. After fully understanding the requirements and the workflow process, I interacted with the credit bureau which gauges the financial position of a company and is the overall determinant of whether to give or deny a loan. References Dillman, R. J.(2006). The lease manual: A practical guide to negotiating office, retail, and industrial leases. Chicago, Ill: Section of Real Property, Probate and Trust Law, ABA. Hammonds, H. (2007). Money: Banking. North Mankato: Smart Apple Media. Read More