Afghanistan International Bank

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A

PROJECT REPORT

ON

AIB

AFGHANISTAN INTERNATIONAL BANK

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AIB Profile

Afghanistan International Bank

Headquarters: Shahr-e-Naw, Haji Yaqoob SquareShahabudin Watt, KabulAfghanistan

Phone: +93 (0) 20 255 0 255CEO: Mr. Khalilullah Sediq

Employees: 616Website:http://www.aib.af

Afghanistan International Bank is a leading commercial Bank in Afghanistan. AIB was founded in 2004 at the instigation of threeAfghani groups and supported by Asian Development Bank. AIB shareholders include:

- Asian Development Bank (ADB), a multilateral development finance institution.- Afghan Investment Partners Corporation, a leading investment company in Afghanistan.- Horizon Associates LLC, an investment company of the Mohib Group; a substantial commodities trader in the region.- Wilton Holidngs Ltd., part of the Rahmat Group, active in both Pakistan and Afghanistan focusing on the production oftextiles, fruit processing and trading operations.

The shareholders major objective from the inception of the Bank has been to assist in developing the Afghan economy and toconduct business in accordance with international governance standards.Today the board of directors has seven members three of whom are independent, with hands off approach to the banks day to dayoperations. Independent directors of the Bank include:

Mr. Ronald Stride - Previously Managing Partner for Booz Allen and Hamilton AsiaMs. Veronica John - CEO of an Emerging Markets Private Equity Fund (Singapore)

AIB has 31 branches (Three planned to open in 2013, bringing the total to 34) giving it presence in all main business areascovering, north-south-east-west of the country. AIB has a customer base of over 89,880. AIBs business units comprises of

Corporate, Retail, E-Banking (POS, ATM, Mobile Banking, Internet Banking) and Treasury services.The Bank offers a variety of products and services under the Retail Banking such as Current Accounts, Saving Accounts, TermDeposits, Payroll Services, International Maestro Debit Cards, MasterCard WebSurfer Cards, MasterCard Credit Card, PaymentServices and Internet Banking Services.AIB also pays special attention to its corporate customers through its Corporate Banking Services, which comprises of an array ofcustomized banking solutions tailor-made according to the needs of its corporate customers in Afghanistan. These services includeCash Management, Trade Finance, Loans, Foreign Exchange and Treasury services. For more information on products and

services

Corporate Governance has been and continues to be a major focus for AIB. As part of its investment in strong governance, AIB isenhancing its AML monitoring system that is compliant with the international standards.AIBs strategy is to build a sustainable foundation based on prudent growth and risk management, while adhering to the highestlevel of corporate governance. AIBs growth strategy is evident in its 2011 year end results.

December 31, 2011 Actual results show:

- Capital Adequacy Ratio of 22%- Equity to Asset Ratio of 6.5%- ROA of 1.43%

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- ROE of 21.9%- NPLs Net less then 1.19%- Liquidity of assets 85.57%

AIB believes these ratios to be the strongest among local Afghan banks with the highest CAMEL rating among private bankinginstitutions.

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Afghanistan International Bank AIB which commenced operation on March 2004 is the first private bank in thecountry promoted by multilateral development finance institutions and some of the prominent business houses ofthe country headquartered at Kabul, the capital city of Afghanistan.

Within eighth years of commencing business the Bank has grown rapidly with thirty onebranches and five cashoutlets throughout the country. The bank has planned to open three more branches inside Kabul city and inprovinces this year.

AIB MasterCard WebSurfer Card!

AIB WebSurfer Card is a preprinted or personalized card that allows you to securely browse and shop on theinternet. You can charge your WebSurfer Card with amount as low as USD15.

The launching of AIB WebSurfer Card is in accordance with world wide standards to offer superior productsand services to meet the increasing aspirations of its sophisticated customers. Below are the other banking

products and services:

Corporate Lending AIB Profile SME Financing Career in AIB Current Account News Room Trade Finance ATM Locations

Internet Banking Branch Locations Cash Management Application Forms Saving Account Money GramMasterCard

WebSurfer

POS TerminalsInternational Maestro

Debit Card

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Corporate Lending

AIB is fully geared to meet the changing economic challenges present in Afghanistan. We are ever striving to build meaningfulrelationships with our customers and become partners in their growth and progress by acting as financial advisors as well asfinanciers. Our Corporate Institutional Banking (CIB) Group offers a wide range of corporate lending solutions and extends bothshort and long term financing facilities designed to fulfill the individual need of each corporate customer.

Credit Facilities:

> Bridge Loans

> Term Loans

> Overdraft

> Trade Finance

> Cash and Management Services

BRIDGE LOANS

This financing product is available to bridge your current cash requirements by anticipating future payments under a contract.

TERM LOANS

Term loans are offered for short and long term capital investment e.g. buying new machinery and equipment for your businesspurpose.

OVERDRAFT:

An overdraft can help you manage your cash flow with greater ease. It essentially provides working capital to fund your businessoperational needs to an agreed amount.

This flexible line of credit is designated to provide you with extra cash to cover seasonal or unexpected expenses. As you only payinterest on the money you use, you can save on interest costs relative to a standard business loan.

Key Features:

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> Convenient, flexible working capital finance

> Within an agreed overdraft limit, finance is available without restriction. You can overdraw to suit your requirements and repayoverdrawn balances as soon as you have the funds. You are not tied to specific dates for drawdown or repayment.

> Minimizes costs: Pay the interest charges only on the funds you use for as long as you have them, while the interest marginlinked to the Banks base cost of funds means that you are obtaining your finance at a minimum cost.

> Interest based on a variable rate, which is calculated daily and charged monthly on the amount used.

> Better manage seasonal cash flow demands.

There are times when your business has less predictable business expensesan overdraft is an ideal source of temporary funding.

The maximum term is 12 months but the facility can be renewed prior to expiry.

>Cash Flow Management, You can bridge the gap between your receivables for sales made and your payables for purchases ofsupplies or materials, therefore providing useful short-term, revolving funding.

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Cash Management

Afghanistan International Bank's Cash Management Services offer a full range of receivables and payables servicesto meet your complex cash management needs. Payments received from your dealers / distributors and made to yoursuppliers are efficiently processed to optimize your cash flow position and to ensure the effective management of yourbusiness' operations.

Cash Management Services are a new entrant in the in Afghanistan Banking Scenario. Cash Management Services(CMS) are a mechanism to efficiently manage cash flow in order to reduce risks, minimize costs and maximize profits.

We have carved our CMS products to be the best products in Afghanistan. Four Branches are under the system atpresent.

Benefits to Clients:> Quick cash at hand> Planning of Cash flow> Single point inquiry for all queries.> Services charges are competitive and negotiable according to volume of business.

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Trade Finance

Easy to use and quick to pick up!

AIB has established a strong presence globally in Trade Financing through its correspondent banks. The Bank hasconveniently maintained relationships with major banks in the international financial market and continues to developnew ones wherever needed. Our Trade Finance services include a full range of import, export and guaranteeproducts, thus offering tailor-made solution to fit the individual need of each customer.

AIB Continues to be the number one bank active in Trade Finance in Afghanistan. The economic activities inAfghanistan have seen an increase in trade activities and correspondingly our expertise in imports, exports andguarantees have been supportive.

AIB provides a wide variety of products to help finance Afghanistans rapidly expanding international trade. Our tradefinance solutions help our clients prudently conduct both domestic and international trade. AIB handles import andexport letters of credits and a variety of guarantees.

Our Trade Finance services include the following:

Letter of Credit:It is a firm undertaking by a bank, on behalf of an importer, to pay the exporter value of the goods within a specifiedtime, provided the exporter presents appropriate documents to the bank as required by the Letter of Credit (LC).

Intended Usage:Corporate, Business and Personal Sector customers involved inimport/export trade.

Features: LC issued by importers bank Credit terms and currency of payment may be negotiated Credit may be confirmed by a bank in the exporter's country Known payment date and revenue LC can provide for payment at sight or tenor(deferred payment, say 30, 60, 90 days or more) Customer instructs own bank to issue LC and also to specify terms Credit terms, price and currency of payment may be negotiable

BenefitsTo the Importer:

Able to control terms and reduce risk Can predict cash flow and price goods accurately Is in a better position to negotiate for better terms Can obtain extended credit by having tenor LCs Opening of Import Letter of Credits (sight/usance) with or without adding confirmation. Handling of Import Bills on collection basis Providing of Finance against import merchandize. Credit reports on overseas suppliers.

To the Exporter: Payment assured without affecting own bank limits Enhanced competitiveness Predicted cash flow

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Exporter may save costs of other credit insurance Access to local help and advice Country risk eliminated by an accepting bank in exporters country

Bank Guarantees (Bid Bonds, Performance Bonds, and Advance Payment Guarantees):

A Bank Bond/Guarantee is a written undertaking, either conditional or unconditional, issued by the Bank at the requestof our client to guarantee his obligations to a third party/beneficiary.

The most commonly used types of bonds are Bid/Tender, Performance Bonds, AdvancePayment Bonds and Retention Bonds.

How it works:Should our client not comply with his obligations under the contract, leading to a claim underthe Bond/Guarantee, then AIB will make financial recompense in accordance with the terms of the Bond/Guarantee.Under the bond, the beneficiary is indemnified for a stated amount against presentation of a written demand and/orany other documents called for by the guarantee, evidencing that the client has failed to fulfill his/her obligations underthe underlying transaction.

Key Features and Benefits Specialist support for contracts Helps the development of business

Could help to minimize costs Could help to minimize risk Available in local or freely traded currencyIt is common for buyers to insist on the provision of a bond or guarantee from a seller as a standardrequirement tosecure the terms of a contract. Our bonds, guarantees and indemnities normally specify a sum of money which mustbe paid on demand, provided that the terms and conditions are met.

Improves Trading Opportunities:Knowing that we can fulfill your bonds and guarantees requirements on your behalf could enable you to tender forbusiness that you may previously have considered out of your reach.

Normally, bonds and guarantees can be issued in the currency of your overseas buyer, which can make yourproposition more attractive to the buyer and potentially help you to negotiate improved contract terms.

Flexible:The format and wording of bonds and guarantees can be drafted, within certain criteria, to suit the particular requirements of boththe buyer and the seller involved in the contract.

Helps Minimize Costs:We offer a range of bonds and guarantees so you can fulfill all your bonding requirements from one source without thetime-consuming and costly process of having to liaise with a number of different suppliers.

Attractive Features and Benefits: Most competitive interest rates in the market Finance can be availed in AFN, US$ and EURO Letter of Credit issuance to a wide range of destinations

Transmission of LC via Swift Network Confirmation by Commerzbank Germany or the Asian Development Bank upon request Reduces the risk of losing title to the goods before receiving payment Improves cash flow control Payment of any value may be collected in any freely traded currency. Payment can be received immediately on presentation of the documents or on an agreed future datedCustomer needs that may be satisfied by this product: To trade overseas and receive payment for exports To retain some control of exports until payment or acceptance of future payment is obtained To control cash flow To manage foreign currency exposureRelated Products and Services Foreign currency accounts

Foreign exchange services Export trade finance Trade information services International payment and collection services Advice on overseas trade

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Salary Account

Payroll Services

Where Money Works, for you and Your Employee!Find out about the specialty of AIBs Salary Account!

A special product tailored specifically to suit the needs of employees of Corporates, Firms and other organizations. It

significantly enhances the value of their salary through a package of facilities offered to you.

All that is needed for the organization is to operate its corporate salary account with the Bank.

Afghanistan International Banks Salary Account is a benefit-rich account for employers and employees.

As an organization you can opt for our salary accounts to enable easy disbursements of salaries and enjoy numerousother benefits too.

With AIB Salary Accounts your employees will enjoy the convenience of:- Having international debit card with unlimited Cirrus ATM access around the world.- 24 hours I-Banking.

Here you can be benefited from AIBs salary accounts in more than one way:- Reduce your paperwork- Zero balance account- Saves remittance costs.- Employees receive instant credit of salaries.- Multi-branch, Multi-city banking convenience.- No restrictions on number of transactions in the account.

Besides all of the above, employees will automatically become AIBs account holders with special benefits andprivileges of banking, Investment advisory and much more...

Charges:

- Monthly internal salary transfer charges for the employer would be $5 only (negotiable)- For international salary or any other transfers the charges would be $0.20 only

Target Customers:- Salaried individuals

Apply Now:All you would require to do is to send AIB an official request letter along with number of your employees. Whereas, you will be given the payroll software, for entering details along with the salary of each employee and send

AIB the soft and hard copy of the payroll report once.

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Fixed Term Deposit

Fixed Afghani Deposit Account:This account lets you save a fixed amount of money, for a fixed period of one month, three months, and six months ata fixed interest rate.

Benefits:- Attractive Interest: We strive to make our interest rates competitive and attractive, to benefit you.

- Affordable Deposit Amounts: You can open an account by minimum deposit of AFN50,000.

- Automatic Renewal: Upon maturity, your deposit is automatically renewed for the same tenure at a new market interestrate unless you instruct otherwise.

Requirements:- You must be at least 18 years old.- The minimum initial deposit is AFN50,000.

Apply Now: Visit any AIB Branch now with your Tazkera/**Passport & two passport size photos to open a fixed deposit account.

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SME Financing

Small and Medium Enterprise (SME) unit of AIB is geared towards catering to the banking requirements of small tomedium businesses in a timely and therefore cost effective manner. All the branches of AIB are equipped to speedilyattend incoming financing requests from SMEs. A team of highly trained SME Credit Officers is now working underinternational best practices to help SME increase their income through targeted borrowing. We help our customersgrow from strength to strength by acting as their bankers and financial advisors.

Types of SME Facilities Available:

Over draft Facility Term Loan Facility

Benefits and Uses of SME Product: Increase income Improve facilities Purchase Equipment Purchase inventory

Acceptable Use of Loan Proceeds Equipment purchases/ Investment Capital Needs. Machinery Purchase Fixed Assets Financing

Inventory/Raw materials for growth or a new line of business Working Capital for Production, inventory or Trade Finance.

Credit Terms & Conditions: AFN 1,500,000AFN 15,000,000 (or eqvt. USD/EUR) Term Loan Facility Overdraft Facility

Pre-Requisites JAWAZ from MOC/AISA Business Profile/ Fact Sheet Financial Information Invoices/Bills/Purchase & Sales Orders (if any), etc.

Collateral & Security Equitable Mortgage over residual/ commercial properties. Pledge of stocks/ Inventories Hypothecation of Stocks/ Inventories 1st charge over Fixed/ Current Assets

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Current Account

Here you are with AIB offering you a denominated chequeing facility account that doesnt pay interest and allowsunlimited transactions to business concerns, entrepreneurs, and self-employed professionals.

Benefits: Regular Statements: You may get a detailed bank statement of all your transactions any time you want.

Cheque book Facility: On request, you can receive a Cheque book which is not only convenient for you, but also safer

then carrying cash money.

Debit Card Convenience: A current account holder is offered with Debit Card which lets you access your bank accountanytime, anywhere! It gives you access to cash from over 900,000 Cirrus ATMs and lets you pay for your PIN-based

purchases at over 10 million Maestro retail outlets worldwide.

Self Service banking facilities: Save time and do your banking at our ATMs, check and transfer from your account viaInternet banking 24 hours a day.

Target Customers: Individuals for single account. More than one individual for joint accounts. Partnership Concerns

Private and public limited liabilities. Co-operative organizations. Executors and administrators. NGOs and Agencies and Foreign Embassies.

Point Out:- The minimum initial deposit is AFN5,000 for individual accounts and AFN25,000 for Corporate.- You must be at least 18 years old.

Apply Now: Visit any AIB Branch now with your Tazkera/**Passport & two passport size photos to open a current account. **Expired Passport is not acceptable.

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Fixed Deposit Account

This account lets you save a fixed amount of money, for a fixed period of one month, three months, and six months at a fixedinterest rate.

Benefits:- Attractive Interest: We strive to make our interest rates competitive and attractive, to benefit you.- Affordable Deposit Amounts: You can open an account by minimum deposit of AFN50,000.- Automatic Renewal: Upon maturity, your deposit is automatically renewed for the same tenure at a new market interest rate

unless you instruct otherwise.

Requirements:- You must be at least 18 years old.- The minimum initial deposit is AFN50,000.

Apply Now: Visit any AIB Branch now with your Tazkera/**Passport & two passport size photos to open a fixed deposit account.

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Fund Transfers

Through our international correspondent banking relationships we provide direct and indirect foreign currencyremittance facility around the world.

Afghanistan International Banks Fund Transfer system is one of the easiest offline methods of sending/receivingmoney to/from your family and friends universally. No matter where they are in the world.

Fund Transfer System, to your local bank, allows you to remit money from your local bank to any bank account

existing any where locally or internationally.

All you need to do is to walk over to your local bank branch and instruct them to debit the specified amount from youraccount with the correspondent bank (see correspondent bank list) within the full details of the beneficiary accountand the sum of the amount to be remitted.

The fund transfer will be processed in 24 banking hours after the Bank has received the funds into its account. Ittypically takes 24-48 banking hours for the funds to reach the beneficiary account from the time you place the requestwith your bank.

AIB bank provides this service to all; however, it charges you for the transfer applying competitive market rates.

Benefits:

Fast Money Transfers via SWIFT

No limits! On the amount that can be remitted.

Competitive Exchange Rates

Your Beneficiary doesnt need to have bank account with AIB

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Foreign Exchange

AIBs clients have the facility to convert their foreign currencies into the local currency and vise versa, within a goodsecurity provision.

You are able to transfer any specified amount of money from your one account to another having different currencieswithin lower exchange rate application. Besides, AIB provides the facility of withdrawing cash from your account withina different currency by applying low exchange rate.

You have the facility of exchanging foreign currencies, e.g. USD, EUR to local currency and vise-versa even you donthave account with AIB.

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Money Taxi (inside Kabul)

Millions of dollars!Thousands of customers!

Our best trained and experienced security officers follow disciplined security procedures ensuring that our customersare relieved from the responsibility of having to bank their money with all the inherent risks involved in this importanttask. Cash Handling Services are performed with modern armored vehicles around Kabul city.

Coverage: Our armored vehicles transport thousands of dollars in cash each and every day in Kabul city.

AIBs Money Taxi or Cash in Transit services deliver tangible benefits that help your bus iness succeed.

Lower exposure to risk: With AIB's CiT Services, you can make your place of business a less attractive target forcriminals by removing excess cash and limiting your exposure to internal and external theft.

Increased productivity: When you're not transporting cash or dealing with security issues, you're free to focus onwhat really matters-your business. And, with the heightened sense of security that comes with AIB's CiT service, youremployees will feel safer so they are less stressed and better able to do their jobs.

Cost savings: When you outsource secure cash transportation to AIB, you reduce your reliance on expensive, in-house risk management processes and the additional training required to prepare employees to deal with securityissues.

Greater peace of mind: Cash handling endangers your employees, your customers and your business. But with AIB,you can sleep better at night knowing you've transferred that risk and the liability associated with cash transportationto the most trusted name in the business.

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MoneyGram

(INERNATIONAL MONEY TRANSFER)

Now you can send/receive money from AIB branches in Kabul and provinces to more than 1,25000 MoneyGram agent locationsin over 170 countries without opening a bank account in 10 minutes.

The fast, safe and convenient way to send and receive money worldwide.

Secure, easy, reliable international money transfers. No need for a bank account for sender or receiver.

Fast:With MoneyGram your money can be transferred from almost any country in the world, and will be available to collect in 10minutes.*

Safe:The MoneyGram service is used around the world because it is a reliable and trusted way to send / receive money worldwide.Each transaction is protected by MoneyGrams highly secured system ensuring a quick payout and only to the right person.

Convenient:More than 125,000 MoneyGram agent locations in over 170 countries offering the best service and convenient hours of

operations; electronically connected to ensure that your money is transferred within minutes*.

MoneyGram locations inside Afghanistan:

MoneyGram is available at any AIB (Afghanistan International Bank) branch in Kabul and 5 major cities of Afghanistan. For more informationplease call: +93 (0) 20 255 0 255 or visitwww.aib.af

Sending and receiving a MoneyGram transfer is so easy, all it takes is these simple steps:

To send money:

Fill in a simple send form and show ID if required. Hand over the amount you wish to transfer and the send (service) fee.** Youll be given a transaction reference number.

Give the reference number to the person receiving the money and in just 10 minutes its available to collect.*

To receive money:

Get your reference number from sender. Visit the nearest MoneyGram agent location. Fill in a simple receive form and show ID if required. The money will be paid to you immediately.

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Internet banking

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Branches

Kabul City__________________________________

AIB Head Office

Shahr-e-Naw, Haji Yaqoob Square, AIB Kolola Pushta BranchShahabudin Watt, P.O.Box No. 2074 Near to Gule Surkh Square,

Kabul, Afghanistan Kolola Pushta,Tel: +93 (0) 20 255 0 255 Kabul, AfghanistanFax: +93 (0) 20 255 0 256 Tel: +93 (0) 793 33 43 33

AIB Microrayan Branch AIB Shahr-e-Naw BranchMasood Square, Ansary Square,

Behind Block # 101, Microrayan No.2 Kabul, AfghanistanTel: +93 (0) 799 80 11 11 Tel: +93 (0) 799 80 99 99

AIB Sarai Shahzada Branch Mirwais Maidan BranchShop # 150, Second Floor Selo Street, Ariana Kabul Hotel Building

Kabul, Afghanistan Kabul, Afghanistan

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Tel: +93 (0) 794 10 12 13 Tel: +93(0) 793 77 71 11

AIB Khair Khana Branch AIB Taimani BranchLycee Mariam, Khair Khana 3r Street, Taimani Project

Kabul, Afghanistan Kabul, AfghanistanTel: +93 (0) 793 33 33 31 Tel: +93 (0) 794 45 55 44

AIB Khair Khana Second Branch AIB Jad-e-Maiwand Branch

Shahrak Gulkhana, 1st Part Khair Khana Second Part of Jad-e-Maiwand, Saraji StreetKabul Afghanistan Kabul AfghanistanTel: +93 (0) 793 45 45 42 Tel: +93 (0) 793 45 45 43

AIB Kart-e-Naw Branch AIB Park ha-e-Sanati BranchSecond Street of Kart-e-Naw Park ha-e-Sanati, 9th District

Kabul Afghanistan Kabul AfghanistanTel: +93 (0) 793 45 45 41 Tel: +93 (0) 793 45 45 44

Green VillageStratex Hospitality Green Village

KAIA Gate-3, Off of Jalalabad Road,KabulAfghanistan

Dasht-e-Barchi BranchSecond Floor of Bahare Sabz Market

Pule Khoshk, Shahid Mazari SteetKabul-Afghanistan

Kart-e-Se BranchOpposit of Ariana TV StationDarul Amaan Road, Kart-e-Se

KabulAfghanistan

Pule Bagh-e-Omomi BranchSecond Floor Of Zar Negar Hotel

Mohammad Jan Khan WattKabulAfghanistan

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Online Banking

WebBank - Personal Online Banking At AIB , we know running a business means being fast,flexible and available at all times , Therefore , AIB designedInternet Banking to put you in the driver seat and manage your banking business anytime and anywhere . The InternetBanking provides you a fast , easy and very secure way to manage your finance , without coming to the bank!

WebBank Features

Monitor checking, savings or credit line account activity Transfer funds between accounts Transfer funds between banks Perform online account research

Getting Started

Ready to enroll? Enrollment for WebBank is fast and easy. In minutes you can have access to your accountinformation via the Internet.