1.1 ORIGIN OF THE REPORT
Reporting means the written presentation of the evidence and findings of a research. After completion of the internship program report submission is essential. The report is based on a topic that can satisfy both organization and my academic institution.
Internship is the last part of my MBA course. Being a MBA student internship and report submission is essential for me. Without completion of internship and submission of report I cannot be able to complete my MBA course.
This report is submitted to my internship supervisor, Jamshed Uz Zaman Northern University of Bangladesh, after completion of the three months internship program in the EXIM Bank Limited (Narayanganj Branch).
I have assigned a topic “Banking Efficiency of EXIM Bank Ltd and the EXIM Bank Authority gave me the opportunity to work at the Narayanganj Branch for three months on the topic.
1.2 BACKGROUND OF THE REPORT
In the later 19th century, Finance was a part of the Economics. But due to the globalization and more expansion of international trade, Finance plays the major role for the economic development. The development of a modern economy would not have been possible without the use of money. Bank is an important and essential financial institution for the necessity of the use of money and the protection of the money.
Due to the globalization and technological innovation, banking business has become competitive. To cope up with this, Bankers should have professional knowledge as well as technical basic. As a MBA student whose are major in Finance, Bank is the most appropriate field to gather the experience. With a view to supply skilled personals in banking arena, Northern University has undertaking the Internship training program for MBA students. As a part of the MBA program, I have to send EXIM Bank Ltd, Narayanganj Branch for having practical exposure in the Bank for three months internship program.
1.3 OBJECTIVE OF THE REPORT
The main objective of practical orientation is to get a clear-cut idea about Bank, how it runs and what functions it does i.e. to be acquainted with practical everyday functions of Banking Business. Along with the main objective other objectives of Report are —
1. To apply theoretical knowledge with practical situation.
2. To understand the real management situation and to gather practical knowledge.
3. To familiar with Banking environment, clients, working hours, values, conditions
And other things related to Bank.
4. To analyze the financing system of the Bank and to have greater contribution towards country’s economy.
5. To determine the factors that influences the choice of a Bank by the customers.
6. To identify the problems faced by the customers and the Bankers.
7. To examine the profitability and productivity of the Bank.
8. To acquire knowledge about the everyday Banking operation of EXIM Bank.
1.4 REASON FOR THE REPORT
Bankers are the most important part for the economy. They play a vital role in the economic development of the country. They keep the wheel of the economy for moving forward. So, efficient and qualified persons are needed for doing such development. To build up potential future Banker MBA program can help a lot. For this Finance can play a special role for making potential Bankers. Internship program can also help them to be acquainted with day-to-day affairs of such people.
1.5 SCOPE OF THE REPORT
There is a certain boundary to cover this report. To achieve the objective of the report, i.e. through knowledge about the organizational functions and its management, it is not possible to cover each and every activity performed in the organization. The report has covered only the general overview of the organization.
Moreover the company itself and financial institutions have got some confident information which are not possible to disclose publicly, so those data am information had to be ignored for this report.
1.6 METHODOLOGY OF THE REPORT
For making any report or statistical survey most of the data should be taken that reflect actual situation. For my report I have collected various types of primary and secondary data while I was performing my job. I have collected various data from various sources, by interviewing the respective officers and from journals published by the authority i.e. Annual Reports, Prospectus, Brochures, and different Policies and so on. I have also collected data from their Training Institution’s papers those are supplied to the trainee.
In a disciplined way I can say that the Report input were collected from two sources —
(I) Practical deskwork.
(ii) Face to face conversation with the officers.
(iii) Face to face conversation with the clients.
(i) Annual Report of EXIM Bank.
(ii) Brochures of EXIM Bank
(iii) Prospectus of EXIM Bank.
(iv) Policies of EXIM Bank.
(v) Published or unpublished or personally collected data from Officers,
Narayanganj Branch and Head Office of EXIM Bank.
1.7 LIMITATIONS OF THE REPORT
I have encountered some problems —
1. Time constraint was major drawback in the report. The duration of the Report was
Only three months.
2. The Report was limited by the size of sample.
3. Some essential data could not be gathered because of confidentiality concerns.
4. Many procedural matters were conducted directly in the operations by the top
Management level, which may also, gave sort of restrictions.
2.1 DEFINITION OF BANK
“A Bank is an establishment which trades in money, an establishment for deposit, custody and issue of money and also for granting loans, discounting bills and facilitating transmission of remittances from one place to another.”
“A Bank performs an essential distributive task, service or acts as an intermediary between borrowers and lenders. In a sense, how ever, a bank can be considered the heart of a complex financial structure.”
—–American Institute of Banking
2.2 DEFINITION OF BANKING
“Banking is the business of a banker, the keeping or management of a bank.”
——Oxford English Dictionary
“Banking means the accepting, for the purpose of lending or investment of deposits or money from the public, repayable on demand or otherwise, and withdrawn able by cheque, draft order or other wise.”
——Indian banking regulation act 1949
2.3 WHO IS A BANKER
The term banker had till lately not been defined in Bangladesh by statute. In England, even up to this time, for the meaning and implication of the term ‘banking’, one has to look into the conventions and legal decisions. It should be stated that it is not easy to define banking because of the manifold services rendered by a modern banker.
“Banking means the accepting, for the purpose of lending or investment of deposits or money from the public, repayable on demand or otherwise, and withdrawn able by cheque, draft order or other wise. Banking company means any company which transacts.”
From the above definition, it is clear that if any institution fulfils the following conditions, it will satisfy the definition of a banking company:
1. Accepting of deposit from the public, repayable on demand or otherwise, the deposits may be of different types, current, savings, fixed, etc. and on various terms and conditions.
2. Such deposits must be withdrawn able by cheques, drafts, orders or other wise.
3. Any money accepted as deposits must be for the purpose of lending or investment.
2.4 HISTORY OF BANKING
Banking sector of Bangladesh entered into a new era when all the commercial banks and financial institutions were nationalized after the liberation of Bangladesh as an independent nation. Six Nationalized commercial banks (NCB) were established taking over the assets and liabilities of the private commercial banks with the spirit of establishing a socialist economic framework functioning in the then East Pakistan. But in the year 1982-83, the national economic philosophy was liberalized and the Govt. felt the necessity of private sector participation in all the sectors of economy including banking sector. As an outcome of Governments overall privatization policy, it allowed the establishment of commercial banks in the private sector in order to ensure a constructive and meaningful participation in economic growth and to develop competition between the private and public sector commercial banks. In response to Government’s decision, a number of private banks came into being in the private sector. The Govt. has also disinvested two public sectors viz. Uttara Bank and Public Bank into private sector is also underway.
2.5 TYPES OF BANK
Banks’ activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to High Net Worth Individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits.
Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as Lender of last resort in event of a crisis.
And its subsidiaries in tax-havens offer offshore banking services to customers in other countries. Other large financial institutions are similarly diversified and engage in multiple activities. In Europe and Asia, big banks are much diversified groups that, among other services, also distribute insurance, hence the term banc assurance is the term used to describe the sale of insurance products in a bank.
Types of retail banks:
• Commercial bank: the term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term “commercial bank” to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.
• Community Banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners
• Community development banks: regulated banks that provide financial services and credit to under-served markets or populations.
• Postal savings banks: savings banks associated with national postal systems.
• Private Banks: manage the assets of high net worth individuals.
• Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.
• Savings bank: in Europe, savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative, while in others socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralized distribution network, providing local and regional outreach and by their socially responsible approach to business and society.
• Building societies and Landesbanks: conduct retail banking.
• Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
• Islamic banks: Banks that transact according to Islamic principles.
Types of investment banks:
• Investment banks “underwrite” (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital markets activities such as mergers and acquisitions.
• Merchant banks were traditionally banks which engaged in trade financing. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies.
Universal banks, more commonly known as a financial services company, engage in several of these activities. For example, First Bank (a very large bank) is involved in commercial and retail lending, same corporate entity.
Other types of banks:
Islamic banking: Islamic banks adhere to the concepts of Islamic law. Islamic banking revolves around several well established concepts which are based on Islamic canons. Since the concept of interest is forbidden in Islam, all banking activities must avoid interest. Instead of interest, the bank earns profit (mark-up) and fees on financing facilities that it extends to the customers.
2.6 COMMERCIAL BANKS IN BANGLADESH
Some commercial bank which operated their activities in Bangladesh is discussed as bellow:
STANDARD CHARTERD BANK
Standard Chartered Bank started its business in Bangladesh in 1948, opening its first branch in the port city of Chittagong. The bank increasingly invested in people, technology and premises as its business grew in relation to the country’s thriving economy. At present the bank has 6 offices in Dhaka Chittagong and Sylhet, including the country’s only offshore banking unit inside the Dhaka Export Processing Zone at Savar.
Extensive knowledge of the market and essential expertise in a wide range of financial services underline our strength to build business opportunities for corporate and institutional clients at home and abroad. Continuous upgrading of technology and control systems has enabled the bank of offer new services, which include unique ATMs and Phonebanking.
Standard Chartered’s services in Bangladesh, ranges from Personal & Corporate Banking to Institutional Banking, Treasury and Custodial services.
ONE Bank Limited was incorporated in May, 1999 With the Registrar of Joint Stock Companies under the Companies Act. 1994, as a commercial bank in the private sector.
The Bank is pledge-bound to serve the customers and the community with utmost dedication. The prime focus is on efficiency, transparency, precision and motivation with the spirit and conviction to excel as ONE BANK in both value & image.
The name ‘ONE Bank’ is derived from the insight and long nourished feelings of the promoters to reach out to the people of all walks of life and progress together towards prosperity in a spirit of oneness.
Dutch-Bangla Bank Limited (the Bank) is a scheduled commercial bank. The Bank was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.
DBBL- a Bangladesh European private joint venture scheduled commercial bank commenced formal operation from June 3, 1996. The head office of the Bank is located at Senakalyan Bhaban (4th floor),195, Motijheel C/A, Dhaka, Bangladesh. The Bank commenced its banking business with one branch on 4 July 1996.
EXIM Bank Limited was established in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. In deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman.
This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management. The authorized capital and paid up capital of the bank are Tk. 1000.00 million & TK 313.87 million respectively.
The bank has migrated all of its conventional banking operation into Shariah based Islami banking since July/2004.
Trust Bank Limited is one of the leading private commercial bank having a spread network of 35 branches across Bangladesh and plans to open few more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2008.
The bank, sponsored by the Army Welfare Trust (AWT), is first of its kind in the country. With a wide range of modern corporate and consumer financial products Trust Bank has been operating in Bangladesh since 1999 and has achieved public confidence as a sound and stable bank.
In 2001, the bank introduced automated branch banking system to increase efficiency and improve customer service. In the year 2005, the bank moved one step further and introduced ATM services for its customers.
Since bank’s business volume increased over the years and the demands of the customers enlarged in manifold, our technology has been upgraded to manage the growth of the bank & meet the demands of our customers.
In January 2007, Trust Bank successfully launched Online Banking Services which facilitate Any Branch Banking, ATM Banking, Phone Banking, SMS Banking, & Internet Banking to all customers. Customers can now deposit or withdraw money from any Branch of Trust Bank nationwide without needing to open multiple accounts in multiple Branches.
Via Online Services and Visa Electron (Debit Card), ATMs now allow customers to retrieve 24×7 hours Account information such as account balance checkup through mini-statements and cash withdrawals.
Trust Bank is about to introduce Visa Credit Cards to serve it’s existing and potential valued customers. Credits cards can now be used at shops & restaurants all around Bangladesh and even internationally.
Trust Bank is a customer oriented financial institution. It remains dedicated to meet up with the ever growing expectations of the customer because at Trust Bank, customer is always at the center.
3.1 OVERVIEW OF THE EXIM BANK
EXIM Bank Ltd is the name implies a newly formed commercial Bank but is the 1st” of its kind in Bangladesh. It has been incorporated in Dhaka, EX1M Bank as a public limited company and its Head Office of the Bank is located at Printers Buildings, 5, Rajuk Avenue, Motijheel Commercial Area, Dhaka-1000.
In the world of consumerism the business organization of the world strive for the consumers satisfaction as a number one business strategy whatever may be the product of the organization, either service or non service. Service is the product of Bank. There is a saying that customer service starts rights right from the stairs of the Bank building. The guard at the door is first person represents of the Bank, receives a customer with wishes in smiling face.
3.2 HISTORICAL BACKGROUND OF THE EXIM BANK
EXIM Bank Ltd. was incorporated under the Companies Act 1994, on the 2nd June 1999. EXIM Bank Ltd. believes in togetherness with its customers, in its march on the road to growth and progress with service. As a commercial Bank we will do all traditional Banking, business including introduction of a wide rang of savings and credit products, retail Banking and ancillary services with the support of modem technology and professional skills.
The Export Import Bank of Bangladesh Ltd. commenced formal commercial Banking operatic from 3rd August 1999 with the permission of Bangladesh Bank. The sponsors of the Bank are leading business personalities and reputed industrialists.
The Bank has a sound capital base; its Authorized Capital is Tk. 1000.00 Million while its Initial Paid up Capital is Tk. 225.00 Million subscribed by the sponsors. To solidify its capital by further the paid up capital will rise to Tk. 450.00 Million within a reasonable period by pub offering of shares of the Company. The Bank will be immensely benefited further more from the able leadership of the Chairman and the valuable advice and guidance the advisor.
Considering the inherent desire of the religious Muslims of Bangladesh, EXIM Bank Ltd. has been decided to convert the entire conventional system of the Bank into Islami Banking with effect from 1st July 2004.
Originally the name of the Bank was BEXIM Bank of Bangladesh Ltd. Later the management BEXIM Bank of Bangladesh Ltd. changes the name of the Bank to EXIM Bank Ltd. because the case lodged by BEXIMCO Group of Industries.
The Board of Directors wants to carry out in the management all of this service industry’s administration and credit portfolio independent without any undue influence from out side. The board will formulate policy and give policy directives to the Management Transparency
and accountability will be strictly ensured at all levels of the Bank. The Bank will operate with integrity, competence and farsightedness abiding by all principles
And provisions laid down the Bank Company Act, 1991, the guidelines of Bangladesh
3.3 OBJECTIVE OF THE EXIM BANK.
Bangladesh is now an integral part of global market. As such there is an urgent requirement for Bangladesh to place the traditional Banking practices in harness with the global trades of a free market economy by following international Banking customs, practices and standards. Today clients of a Bank in Bangladesh are exposed as well as international markets. They have to stay update with their practice and standards to meet the demands of achieving harmony in the high standards of a free economy. Hence, by getting into both corporate and retail Banking and rapid innovation and networking the Bank believes that it can accomplish its goals.
EXIM Bank fully appreciates the importance and implication of the rapidly emerging competition in the Banking and finance sector of Bangladesh. It intends financing its customer Suited to his or her place in the market. In this regards EX1M Bank emphasizes in its employment the software aspects of human resource capability. It also emphasizes competence among its Banking professional to cater to varied customer requirements to the modem time.
The core objectives are:-
To carry on, Transact, undertake and conduct the business of Banking in all its branches and to transact and do all matters and things incidental there to in Bangladesh and abroad.
To receive, borrow or raise money on deposits, loan or otherwise, upon such terms as the Company may approve and to hive guarantees and indemnities in respect of all debts and contracts.
To establish welfare oriented Banking systems.
To play a vital role in human development and employment generation.
To invest money in such manner as may from time to time be thought proper.
To carry on the business of buying and selling bullion, gold and other valuable assets
3.4 STRATEGIES OF THE EXIM BANK
The business of Banking consists of borrowing and lending. As in other businesses, operation must be based on capital, but Banks employ comparatively little of their own capital in relation to the total volume of their transactions. The purpose of capital and reserve accounts is primarily providing an ultimate cover against losses on loans and investments.
Final strategy :
Introduction of online Banking services, ATM cards, etc. is something that the Bank looks forward to introducing as soon as possible because of the current demand in the market place. Hence rapid innovation is definitely a key strategy of this Bank.
3.5 MISSION VISION & PHILOSOPHY OF THE EXIM BANK
Every financial institution want earn at least a reasonable profit for its long term survival and also want to obtain a sustainable position in the Banking sector in the country.
In keeping this in mind, EXIM Bank’s corporate Missions are-
To provide high quality financial services in export and import trade.
To provide excellent quality Customer service.
To maintain Corporate and business ethics.
To become a trusted repository of customers’ money and their financial advisor.
To make our stock superior and rewarding to the customers/share holders.
To display team spirit and professionalism.
To have a Sound Capital Base.
Create wealth for the shareholders.
To provide standard financial services.
To build a sustainable
Respectable financial institution
To be a leading Commercial Bank
Local Bank Global Network.
Together Toward Tomorrow
3.6 CORPORATE CULTURE OF EXIM BANK
This bank is one of the most disciplined Banks with a distinctive corporate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our corporate conduct.
3.7 HIERARCHY OF THE EXIM BANK
Deputy Managing Director
Senior Executive Vice President
Executive Vice President
Senior Vice President
Senior Assistant Vice President
Assistant Vice President
Senior Principal Officer
Management Trainee Officer
Trainee Assistant Officer
3.8 LIST OF SHAREHOLDERS
BOARD OF DIRECTOR’S OF EXIM BANK
Name Of the Directors
|1.||Mr. Md. Nazrul Islam Mazumder(Chairman, Board and Executive Committee)|
|2.||Mr. Mohammad Abdullah|
|3.||Alhaj Md. Nurul Amin|
|4.||Mr. Md. Faiz Ullah|
|5.||Mrs. Nasima Akhter|
|6.||Mr. Mohammed Shahidullah|
|7.||Mr. A.K.M. Nurul Fazal Bulbul(Chairman of Audit Committee)|
|8.||Mr. Zubayer Kabir|
|9.||Mr. Md. Habibullah|
|10.||Mr. Abdullah Al-Zahir Shapan|
|11.||Mr. Anjan Kumar Saha|
|12.||Mr. Md. Abdul Mannan|
LIST OF OTHER SPONSOR’S OF EXIM BANK
|Sl. No.||Name Of the Sponsor Shareholders|
|1.||Mr. Md. Abdullah|
|2.||Mrs. Nasreen Islam|
|3.||Mr.Md. Mazakat Harun|
|4.||Mrs. Asma Begum|
|5.||Mr.Md. Fahim Zaman Pathan|
|6.||Mr. Meer Joynal Abedin|
|7.||Mrs. Hasina Akhter|
|8.||Mr.Md. Nurul Amin|
|9.||Mrs. Rabeya khatoon|
|10.||Mrs. Nahida Akter|
|11.||Mrs. Mahmuda Begum|
|12.||Mr. Abdullah Al-Mamun|
|13.||Mrs. Sabira Sultana|
|14.||Mr. Mhammed Shahidullah|
|15.||Mrs. Momtaj Begum|
|16.||Mrs. Rubina Shahid|
|17.||Mr.Md. Saiful Alam|
|Mohammed LakiotullahManaging Director|
3.9 BRANCHES OF THE EXIM BANK
|Name of The Branches|
|1.||Motijheel||SharifMansion, 56-57 Motijheel C/A, Dhaka-1000||03-08-1999|
|2.||Panthapath||19/2, West Panthapath, North Dhanmondi, Dhaka||02-12-1999|
|3.||Agrabad||6, Agrabad C/A (Mawla Chamber), Chittagong.||01-02-2000|
|4.||Khatungonj||UnionSquareBuilding1078, Ramjoy Mohajan Lane Khatungonj, Chittagong.||07-09-2000|
|5.||Gazipur Chowrasta||Nasir Super Market, (1st Floor),Chandano, Gazipur.||21-11-2000|
|6.||Imamganj||HajiAbdulKaderMansion,139,Chawk Mugaltoll, Imamganj, Lalbagh, Dhaka.||07-12-2000|
|7.||Gulshan||75, Gulshan Avenue, Dhaka.||10-12-2000|
|8.||Sonaimuri||Mohammadia Super Market, Sonaimuri Bazar, Sonaimuri, Noakhali.||21-04-2001|
|9.||Sylhet||Al-Hamra Shopping City, Zinda Bazar, Sylhet||03-06-2001|
|10.||Nawabpur||198/1, Nawabpur Road, Dhaka-1100||10-06-2001|
|11.||Narayanganj||14/1, S.M. Maleh Road, Tanbazar, Narayanganj||03-01-2002|
|12.||Shimrail||Al-Haj A. Rahman Super Market & Shopping Tower, Chittagong Road Chowrasta, Siddirganj, Narayanganj.||11-03-2002|
|13.||Rajuk Avenue||Rajuk Avenue, 9, DIT Avenue,Dhaka.||07-07-2002|
|14.||New Eskaton||27/1, New Eskaton Road, Dhaka.||12-08-2002|
|15.||Uttara||House#61/A, Road#7, Sector#4,UttaraModelTown, Dhaka.||10-10-2002|
|16.||Laksham||Doulatgonj Bazar, Laksham, Comolla.||22-12-2002|
|17.||Mirpur||SreorshyTower, Plot#7, Main Road-3, Rokeya Sarani, 10 No Crossing Mirpur, Dhaka.||16-06-2003|
|18.||Jubilee Road||63-64 Jubilee Road, Enyet Bazar, Chittagong.||07-09-2003|
|19.||Elephant Road||218,Elephant Road, Bata Signal, Dhaka.||27-12-2003|
|20.||Mawna Chowrasta||KitabAliPlaza, Sreepur, Gazipur.||18-08-2004|
|21.||Bogura||SheikhMansion, Borogola, Bogura||29-09-2004|
|22.||Jessore||37 M. K. Road, Jessore||02-12-2004|
|23.||Malibagh||484, D.I.T Road Malibag, Dhaka-1217||27-12-2004|
4.1 ACCOUNTS OPENING
Introduction in Bank Account
There are certain formalities to be observed and conditions to be fulfilled before an account can be opened. In fact, opening of an account amounts to entering into a contract. viz. a legally binding agreement between the customer and the banker. To every contract, there must be at least two parties. In opening an account, the customer proposes to the banker to open an account and the banker accepts the proposals. The contract thus entered into between the customer and the banker is legally binding on both. Before opening a current account the banker should take certain precautions. The banker should ask the proposed customer to fill in the account opening form and state his profession or trade and address. The banker may also enquire as to the purpose of his account. The banker may ask him to get and introduction from a person know to the bank.
The relationship between the banker and the introducer is a one of good faith. Ordinarily, he has no legal responsibility to the bank in introducing a customer. However, if the introducer knowingly establishes incorrect identity of a person, he may be held liable. It is presumed that the introducer, who is one of the bank’s good customers or is known to the bank, will not pay false with it or do anything deliberately against the bank’s interest.
Who can introduce
Someone known to the bank, preferably one of his own customers or a person of standing in the locality can introduce the proposed account holder.
Bank’s agent, accountant or any officer, or a member of the cash staff who has been in the service of the bank for some years may introduce the proposed customer, provided his knowledge of the person introduced is intimate and sufficient.
EXIM Bank provides its services toward various parties such as-
• Private limited company
• Public limited company
• Association, Clubs, Societies, Trusts etc.
Account of individual (single name):
The individual should fill in the account opening from giving particulars such as his full name, address, occupation, telephone number, and his specimen signature. No special instructions regarding operation on the account need be taken, since he is the only person to operate on the account. He may, however, authorize another person to operate and for that purpose give a mandate or power or attorney in favor of that person.
Different mode of operation:
• Either or survivor
• Jointly or survivor
• Former or survivor
• Any of us or any of the survivor of us or the last survivor
• Any one of us or the survivors or survivor
A partnership is the relation between person who have agreed to share Sometimes, the banker is approached with a request to open an account through that is a person holding a power of attorney for the purpose. The banker does not normally agree to such a request since he has no source of
Verifying the validity of the power of attorney as on the date of the request. It is possible that the principal has revoked the power of attorney or is dead.
A sole proprietorship concern is a business carried on by individual owner in his own name or a trade name. It is usual in such cases to take a declaration from the sole proprietor that no person other than himself has any interest in the business as a proprietor or otherwise and he as the sole proprietor will personally be liable for all dealings and obligation in the name of business.
In the case of proprietorship concern, the special instructions should cover the style of the account and the name of the person who will operate upon the account as sole proprietorship.
Be a joint account, we mean the account of two or more persons who are not partners. In a joint account, it is important to get clear written instruction as to: (a) the mode of withdrawal and (b) payment of the balance in the event of death of one or more of the joint customers. When a joint account is open, it is advisable to get all parties concern to state in writing the names of the persons who would operate on the account and get their signatures to signify their consent. Unless this is done it is not safe to honor cheque without the signature of all the parties.
In respect of joint accounts of individuals, the special instructions should be obtained to cover the points as to:
• Who will generally operate upon the account and sign the cheques drawn on the account.
• Whether the balance is payable to the survivor or any of the survivors or survivors jointly (when the account is in more than two names) in the event of death of either/any of the account holders.
• To whom will the securities, if any, be deliverable.
These special instructions must be initialed by all the joint account holders to signify their consent.
The profits of a business carried on by all or any of them acting for all. The losses have to be similarly shared unless there is a contract to their contrary.
The special instructions in case of such funds cover the style of the account and the names of the partners; also the partner or partner who will operate in the name of firm. Normally, partnership accounts are operated upon by any one of the partners. The accounts with restrictive operations, where
One or more partners will not operate account, are not usually opened. In special cases, however, opening of such accounts may be considered and any indemnity taken to be protects the interest of the banker.
Private and public limited companies:
A company means a company formed and registered under the companies act. 1956 or an existing company formed and registered under any of the previous companies law. It is an association of persons called numbers but has an existence a part form the members. The members may die or become in solvent and excepting where the minimum prescribed under the act (seven in the case of public limited company and two in the case of
Private limited company) is affected, the company will continue. The company is a legal person that is an artificial person created by law. The company cannot carry on any business, which is not permitted by law.
There are several types of companies:
• Companies limited by shares.
• Companies limited by guarantee
• Unlimited companies
Association, Clubs, Societies, Trusts etc:
An association or a clubs has no legal entity unless in corporate as a company under the companies act, 1956 or registered under any other act. Therefore, the banker have to exercise great care in handling proposal for opening account of such associations and clubs, say, started for the purpose of sports, recreation, promotion of fine arts, education, etc. difficulties arise as these association have no legal entity and their members cannot be held personally liable for the commitments of these bodies. Accounts of this type should therefore, be opened only for reliable and respectable and clubs.
These parties get the opportunity to maintain different types of accounts according to their need. Generally businessmen, Contractors hold one type of account where as the general people or service holders hold other types of account, sometimes both may maintain the same account.
According to the category of parties, accounts can be classified into three main parts:
• Current account (C/A)
• Savings account (S/B)
• Short term deposit (STD)
A brief explanation of these accounts is given below:
Account Parties Deposit Withdrawn
Current Account Businessmen, contractors etc As many times as possible Frequent
Savings account Service holders etc Do Twice in a week
Short term deposit Businessmen (only valuable customer) Do Frequent
For any of the above accounts to be opened, the party must follow 2 things:
• An introducer who must be of current account in case of opening a current account and he may be either of current account or of savings account in case of opening a savings account.
• An initial deposit of amount minimum Tk. 500.
Clearing means such a technique through which bankers can arrange of receipt or payment on mutually issued cheques or bills.
Clearing house is an office or a room where bankers gather to meet up their mutual receipt-payment through a special technique.
How the clearing is accomplished:
In Dhaka, Bangladesh bank performs the clearing house activities of clearing. A cheque or bill should be crossed, sealed of “clearing house” with the clearing date (the next day of sealing) and endorsed by the authorized officer. Then cheques or bills are sent to the corporate branch of the bank. In the next day, those are sent to the clearing house. Then representatives from the listed banks submit their receipt statements along with cheques or bills. They prepare an aggregated statement of debit-credit through exchanging mutual statements. Thus, clearing house arrange of meeting up the debit-credit balance of each bank by examining the statement.
It is indicated that each branch of a listed bank prepares a statement of its own receivable cheques, bills and sends to the head office. The head office of the bank prepares an aggregated statement by accumulating all receivable statements from branches. Then representative from each bank keeps a copy of statement at its own specific desk in the clearing house. Thus the listed banks transfer their “out- clearing” and accept their “in-clearing” statements. Then they find out their credit and debit balance by differing their out-clearing & in-clearing figures.
EXIM Bank Ltd, Narayangonj branch maintains 3 types of remittance, which are:
• Payment order
• Telegraphic transfer
• Demand draft
The Narayangonj Branch allows its account holders or outsiders to send money or pay to outside branches of EXIM Bank of Dhaka through cheque or cash payment. Money is sent by using telephone or telex machine. The drawer must have an account in the sent bank. A test number is used for this transfer where the drawer must know about it.
It is similar to the telegraphic transfer except using a demand note for transferring money from branch to branch of EXIM Bank.
It is a non-negotiable credit document. It is generally used as an alternative of money. It can also be used as security of the loan. A bank issues the pay-order in term of a specified fee to safely exchange of money. For transferring money, pay-order can be used as cheques where client of other banks can easily credit through clearing the pay-order.
SWOT Analysis is an important tool for evaluating the companies Strength, Weakness, Opportunities, & Threats. It helps the organization to identify how to evaluate its performance & scan the macro environmental, which in turn would help the organization to navigate in the turbulent ocean of completion.
1. Tope Management:
The top management of the Bank is an essential strength for the EXIM Bank Ltd. and contributed heavily towards the growth & development of the Bank. The top management officials all have had reputed of Banking experience, skill & proficiency.
EXIM Bank Ltd. Has created standing in the banking industry of the country chiefly among the new comers. EXIM Bank Ltd. Has already has already established a film grip in the Banking sector having tremendous growth in the profits & deposits within a phase of five years.
3.Modern facilities & computer:
From the very beginning of EXIM Bank Ltd. tried to furnish their surrounding with modern equipment & facilities. From speedy services to the customer. EXIM Bank Ltd. has installed money-counting machine in teller counter. The Bank has computerized banking operations under the software called PC bank. More over customers EXIM Bank Ltd. in equipped with Telex, Fax, or SWIFT facilities.
4.. Stirring Branches:
From the formative stage, EXIM Bank tried to furnish their branch by impressive style. This well decorated branch gets attention of the potential customers; this is one king of positioning strategy.
5.Interactive corporate culture:
The corporate culture of EXIM Bank is very much interactive compare to other local organization. This interactive environment encourages the employees to work attentively. This interactive environment encourages the employees to work attentively. Since the banking job is routine work oriented, EXIM Bank friendly, interactive & lovely environment boosts up the work capacity of the employees higher qualified.
1. Advertising & Promotion:
Advertising & promotion is the one of the weak point of EXIM Bank. EXIM Bank does not have any effective truck for aggressive marketing activities. This lacking pushes the bank far behind from the other competitor.
2. Disguised Employment:
Reference appointment is very much effective in EXIM Bank. Because of this, there are many people who are only drawing salaries at the end of the month but making a minimum contribution towards the organization. In addition, this related to the problem of reference appointment. On the other hand, officers work hand but are not appreciate accordingly. Those frustrated officers leaving the bank to other bank.
3. Limitation of Information System (PC BANK):
PC BANK is not comprehensive banking software. It is desirable that a more comprehensive banking system replace PC BANK system.
4. Law Remuneration Package:
At the entry level & mid level officers experience considerable low remuneration package than DBL & PBL. This low pay structure does not attract potential MBA & BBA; they are interested to join other banks instead of joining EXIM Bank. Heavily depends on head office for decision making.
1. The Contemporary Banks:
The contemporary banks of EXIM Bank like Dhaka Bank, Prime Bank, Dutch-Bangla Bank, IFIC Bank are its major rivals. They are carrying out aggressive campaign to attract lucrative corporate clients as well as major deposits. EXIM Bank should remain vigilant about the steps taken by these banks, as there will turn affect EXIM Bank strategies.
2. Multinational Banks:
The rapid expansion Multinational bank poses a potential threat to the new PCB’s. Due to the booming energy sector, more foreign banks are expected to operate in Bangladesh. Moreover, they already existing foreign banks such, as Standard Chartered in new pursing an aggressive branch expansion strategy. Since the foreign banks tremendous financial strength, it will pose a threat to local banks to a certain extent in terms of grabbing the lucrative clients.
3. Upcoming Pharmaceuticals:
The upcoming private local banks can also pose threats to the PCB’s. It is the expected that in the next few years more local private banks emerge. If that happens the intensity of competition will rise further & banks will have to develop strategies to compete against an on slaughter of foreign banks.
4. Default Risks:
The default risks of all terms of loan have to be minimizing in order to sustain in the financial market. Because default risk leads the organization towards to bankrupted. EXIM Bank has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem if not elimination.
5. Default Culture
Default Culture is very much familiar in our country. For a bank is very harmful. EXIM Bank has not faced seriously yet. However the banks grow older it may be ill with this situation.
6.1 MY EXPERIENCE
For the fulfillment of the purpose of having some practical knowledge & be familiar to the office environment I spent my days various departments in EXIM BANK at Tanbazar Branch, Narayanganj. There I have worked three months as an internship. In this period I was under SAVP (M. Sakhawat Hossain), in charge of general banking department. He helps me a lot in learning different general banking activities. In general banking sector there was few departments like: Dispatch, Pay order (PO), Demand Draft (DD), Telephone Transfer (TT) & account opening.
In general banking section I handled following activities:
1. Give entries to Pay Order Issue Register
2. Write down the pay order in main pay order block.
3. Balance between pay order issue & payment in every week.
4. Handling daily dispatch. Give entry to inward & outward register, which letters are send off & send out.
5. Give entries in IBCA Received & Issue Register.
6. Also handling daily transfers register & gives entries to transfer register tn terms of daily transaction basis.
7. Also handling Demand Draft (DD), Telephone Transfer (TT) & give entries in their respective registers.
8. Help in Monthly Savings Scheme or DPS account opening.
9. Also direct answering the different quarries of customers.
10. Helps in issuing Cheque book. & give entries to Chaque book register in terms of different accounts.
6.2 Findings & Recommendations
Every study have some specific findings, my reports is not exception to this. In my study I want to show overview of EXIM Bank & evaluated the performances, as I worked three months as an intern so I had that opportunity to look closely EXIM Banks positive & negative thinks. In this study I had found that EXIM Banks overall performance is significant. EXIM Bank has a strong growing base in Bangladesh.
Its position in terms of capital, deposits, cash position, investments, advances, total assets, net profit etc, is always showing an increasing trend. In this report I had also found its sound management that is efficiency regarding both financial & operational management. EXIM Bank is playing role as a model in the banking industry in its operation period in Bangladesh. But I have found still there are some areas where the bank still got the scopes to improve their performances. Some specific findings are mentioned below.
General Banking Department:
In general banking department they follow the traditional banking system. The entire general banking procedures are not fully computerized. Therefore, some processes for example collecting money from the deposit take a long time to perform.
Lack of variety is also a drawback of the general banking area of the EXIM Bank ltd. The bank provides only some traditional limited services to its client. Consequently the bank is falling behind in competition.
There are not using Database Networking in information Technology (IT) Department. So they have transfer data from branch to branch & branch to head office by using Floppy disk & sure it is not good system.
In case of opening an account, some big parties are come to open accents in reference with the high officials of the bank. They do not submit all papers that required for opening an account & in future they do not feel any urge to submit there papers but already they become accounts holders. I think in this case the authority is violating the rule.
According to some clients opinion introducer is one of the problems to open an account. If a person who is new of the city wants to open account, it is a problem for him/her to arrange introducer of SB or CD accounts holder.
Encoding & decoding process of test number consumer most of the time of the officer who works in the desk. However, a simple computer program could do the same if the desk were computerizing.
Banking is a service oriented marketing organization. Its business profit depends on its service quality. That’s why the authority should be aware about their service quality. Though EXIM Bank provides quality service to its customer but it has some weakness in overall performance. TO wipe out this weakness I have made the following suggested solution.
Establishing Employee Training Institute:
Training is never ending process. EXIM Bank does not have its training institute. The bank authority takes help of Bangladesh Institute of Bank Management (BIBM) to train their employee that is sufficient for the bank. Therefore bank always has to maintain the schedule & course of BIBM. The establishment of own training institute will enable the employee of the bank to provide better services to the customer. Currently the branches do not have the qualified system operators. Rather ordinary persons have been appointed in this position & they learn the job in trail & error process.
Increase Promotional Activities:
EXIM Bank should pursue an aggressive advertising campaign in order to build up a strong image & reputation among the potential customers. It must give the idea of maintaining a low profit in the market. Rather it should come in to the limelight through an aggressive marketing campaign such as advertisement in newspaper & magazine, more billboard & neon signs, publicity message & promotional campaigns. EXIM Bank can also pursue promotional campaigns with its customers particularly the corporate clients in order to build up a stronger rapport with them. Advertisement to be made in Newspaper, Journal, Magazine, TV etc. TV advertisement is also a major method for attracting the potential customers. The bank can sponsor sports event of the country.
Rearrange Recruitment Process:
Recruitment should be in a systematic & effective process that can make sure that the right people are in the right place. Now as the bank is expanding, it must focus on attracting, getting & retaining qualified personnel for filling up the positions. It rather then getting is worth spending more or attracting qualified human resources the wrong people in the wrong position.
Eliminate Reference Appointment Tendency:
EXIM Bank management & particularly the board of directors must change the system of appointing people by giving their reference. It has been deeply observes that most of the reference appointees are not up to the standard & have a poor performance. For the good future of the bank & make future strengthening the banks quality of workforce reference appointment should be stopped immediately.
Up Gradation of service quality:
Compare to other competitor & multinational banks EXIN Bank failed to provide better services to its customers. The service is worst in the general banking division where the retail customers are not getting the service properly. The management has to take special care & steps to improve this situation. People of this area should more skilled & well trained.
Restructuring Remuneration Package:
The present compensation package at EXIM Bank is not very special & not capable to attract quality personal to fill its position. Many skilled & developed officers of the bank are depressed with their compensation package. The foreign banks pay almost double & other private banks have a higher scale than EXIM Bank it is high that the management should consider revising the remuneration in order to attract quality human resource.
Advance banking software:
PC banking software is not sufficient software that can help the bank to provide speedy services to customer & internal uses. Therefore, the concerned authorities should consider replacing the PC bank system with more advanced banking software.
Sufficient books on banking & finance & other necessary journals are not available in the bank. The bank authority should enrich its collection in order to keep all necessary reference available to the employees as needed. This step will able to make employees knowledge on banking different critics & current events.
Appointing a Relationship Manager:
EXIM Bank should start appointing a relationship manager (who will deal with individual customer & try to solve their problems) in their all branches.
To seize the market leading position EXIM Bank should be innovative. They should always think about the present time & the requirement of the situation. They have always implemented modern technologies & facilities. In terms of modern technologies & services hey are far behind from other competitor.
EXIM Bank should offer credit card & automated teller machines (ATM) card introduced as soon as possible because of its prevailing demand of the customer & the customer is now transferring in the technology based.
The purpose of the report was to do an evaluation of the General Banking & Foreign Exchange Operation with the EXIM bank limited and scope for its improvement. As a Narayanganj branch face a tremendous pressure with the customer and the department’s officials try to handle the customer carefully.
The total deposit in the banking sector reached Tk. 15,242.97 million on December 31, 2003 as against Tk. 9,945.23 million on December 31, 2002, which registered an increase of 53%.
The total Assets in the banking sector reached Tk. 17,888.66 million on December 31, 2003 as against Tk. 11,374.70 million on December 31, 2002, which registered an increase of 57.27%.
The total volume of import business handled by the Bank during the year 2003 was Tk. 19,260.01 million compared to Tk. 13,152.50 million in 2002 registering an increase of 46.44 %. The total volume of export handled by the Bank during 2003 was Taka 15,124.60 million compared to Taka 10,088.30 Million in 2002 registering an increase of 49.92%.
In Narayanganj Branch, the total imports during the year 2004 is Tk. 696.109 million compared to Taka 509.776 million in 2003 registering an increase of 36.55%. The total Exports during the year 2004 is Tk. 113.154 million compared to Taka 39.02 million in 2003 registering an increase of 189.99%.
The Foreign Exchange Operation of EXIM Bank Limited apart from the conventional procedure makes the Bank capable to be a good Bank in Bangladesh. Its earnings from interest indicate its fitness to survive and other achievement is the sign of its longevity. Growth of the bank is very dynamic. It has been able to achieve appreciable progress in all areas of its operation during the year 2003 earned a profit before tax Taka 478.51 million compared to Taka 338.02 million in 2002 registering a growth of 41.56 % over the profit of the previous year.
(Tk. In million )
Particulars 2000 2001 2002 2003
Profit before Tax 80.22 244.25 388.02 478.51
Profit after Tax 48.14 158.06 201.42 254.79
Net Interest Income 58.79 100.01 203.88 274.77
In Narayanganj Branch, the total Profits during the year 2004 is Tk. 8114302 compared to Tk 3760132 in 2003 registering an increase of 115.80%.
(Amount in Tk.)
Particulars 2003 2004
Profit 3760132 8114302
Although EXIM bank is yet to be fully automated the bank has adequate technology to meet its present requirement and it proceeding aggressively to enhance its technology level. Many products are introduced in the market in recent days and more innovative and diversified products are in the offering. The products are well received by the market, which is evident from the growth pattern of those products. The bank has also introduced various welfare schemes for its employees with a view to retain its trained and experienced human resources on longer term basis and to create a sense of belongingness. The bank management believes that lower employee turn out ratio will improve productivity of the banking future.