Performance Evaluation of Dutch Bangla Bank Limited

The vital objective of this report is to analysis Performance Evaluation of Dutch Bangla Bank Limited. Other objectives of this reports are to measure the overall performance of DBBL, to apply the critical knowledge in the practical field, to make a bridge between the theories and practical procedures of banking day-to-day operations, to gain practical knowledge by working in different desks of Local office branch of DBBL, to observe the working environment in commercial banks, to study existing banker-customer relationship, to know the overall functioning of DBBL and to have some practical exposures that will be helpful for my future career.

 

OBJECTIVES OF THE RESEARCH

The initial objective of this report is to obey with the requirement of the DBBL. But the objectives is not limited with in above, behind this study is something broader. Objectives of the study are summarized in the following manner:

  • To measure the overall performance of DBBL.
  • To apply the critical knowledge in the practical field.
  • To make a bridge between the theories and practical procedures of banking day-to-day operations.
  • To gain practical knowledge by working in different desks of Local office branch of DBBL.
  • To observe the working environment in commercial banks.
  • To study existing banker-customer relationship.
  • To know the overall functioning of DBBL.
  • To have some practical exposures that will be helpful for my future career.

 

RETTROSPECT OF DBBL

Dutch-Bangla Bank Limited (the Bank, DBBL) is a scheduled joint venture commercial bank between local Bangladeshi parties spearheaded by M Sahabuddin Ahmed (Founder & Chairman) and the Dutch company FMO. DBBL 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 the Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited.

DBBL commenced formal operation from June 3, 1996. The head office of the Bank is located at Sena Kalyan Bhaban (4th floor),195, Motijheel C/A, Dhaka, Bangladesh. The Bank commenced its banking business with one branch on 4 July 1996.

The bank is often colloquially referred to as “DBBL”, “Dutch Bangla” and “Dutch Bangla Bank”.

After instability and frequent management changes in its initial years, DBBL overcame these obstacles to establish itself as a market leader. It has grown its reputation through social work rather than profits. The bank’s conservative nature, long-term strategies, hefty social donations and technology investments have always led to modest but steady profits.

Due to investor confidence, DBBL share prices has steadily climbed in value. In January 2008, DBBL share prices reached Tk. 9,450 .00 in the Dhaka Stock Exchange, setting the record for the highest stock price in the history of Bangladesh. It is also one of the few banks that does not participate in merchant banking (which can lead to sporadic growth). DBBL has branded itself as a trusted bank through its banking practices and social commitments.

Dutch Bangla Bank is the first and only local bank in Bangladesh to have an automated banking system. The bank has spent over Tk. 1 Billion in automation upgrades (first bank in Bangladesh to do so). This automation took place in 2003 whereby services of the bank were available uniformly though any branch, ATM and internet. Banking was a paper based until DBBL, with its wide local network, delivered banking automation and modern banking services to the masses. This effectively introduced the ‘plastic money’ concept into the Bangladeshi society.

 

CAPITAL

The bank started with an authorized capital of Tk.400.00 million in 1996 and as on 31st December 2009 paid up capital stood at Tk. 1,500 million. The total capital stood at Tk.5,899.79 million as on 31st December 2009, which was Tk. 4,587.48 million as on 31st December 2008. In 2009 Capital surplus Tk. 808.44 million which was Tk. 376.10 million

Analysis of capital structure:

Capital structure of DBBL has changed from year to year. The components of the capital structure are paid-up capital; proposed issue of dividend, share premium, statutory reserve, proposed cash dividend, retained earnings and other reserve

Authorized and paid up capital of DBBL:

Authorized Capital (TK) In MillionYearPaid Up Capital (Tk) In Million
400.002005202.14
400.002006202.14
400.002007202.14
1000.0020081000.00
4000.0020094000.00

Components of capital structure and correspondent contributions:

Figures of different components of the capital structure for the year 2006 and 2007 are shown below.

Tk in million

Components  of capital structure20082009
Paid-up capital10001500
Proposed issue of bonus share……..500
Share premium11.0711.07
Statutory reserve355802
Other reserves………
Proposed cash dividend95.53………
Retained earnings34165
Total1400.07

(100%)

2992.81

(100%)

In the annual report of the year 2009, capital structure did not contain any value for the component of proposed issue of bonus share, but in the annual report of the year 2009, it was mentioned that proposed issue of bonus share was 500 million taka. On the other hand proposed cash dividend did not contain any value in 2009, which was 95.53 in 2008.

 

COMMERCIAL BANKING

Commercial banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here.

Since bank is confined to provide the services everyday, commercial banking is also known as ‘retail banking’. In DBBL Principal Branch, the following departments are under general banking section:

  • Account opening section
  • Deposit  section
  • Cash    section
  • Remittance  section
  • Clearing section
  • Accounts  section

 

ACCOUNT OPENING SECTION:

Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as:

  • Current account.
  • Savings (SB) account.
  • Short Term Deposit (STD)

 

Types of Accounts with Terms and Conditions

Current Account:

Current account is purely a demand deposit account. There is no restriction on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval.

Some Important Points are as follows-

  • Minimum opening deposit of TK.2000/- is required;
  • There is no withdrawal limit.
  • No interest is given upon the deposited money;
  • Minimum Tk.1000/= balance must always maintain all the time;

Savings (SB) Account:

This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice. Some Important Points are as follows-

  • Minimum opening deposit of Tk.2000/= is required;
  • Minimum Tk. 1000/= balance must always maintain all the time;
  • Withdrawal amount should not be more than 1/4th of the total balance at a time and limit twice in a month.
  • If withdrawal amount exceed 1/4th of the total balance at a time no interest is given upon the deposited money for that month.

Proprietorship account:

  • Attested copy of valid Trade license
  • attested copy of passport of the proprietor
  • Company seal and Tin certificate

Partnership account:

  • Partnership letter.
  • Copy of notarized partnership deed certified by all partners or registered partnership deed of join stock companies and firms duly certified by the register of join stock companies and firms.
  • Partnership Resolution signed by all the partners to open account with DBBL indicating type of account and mode of operation.

Club / societies account:

  • Certified copy of registration Certificate
  • Certified copy charter /Bye laws and regulation/Constitution of the relevant organization.
  • Copy resolution of managing committee/Executive committee for opening account with DBBL and operation of account-duty certified by chairmen /secretary.
  • List of members of the managing committee /Executive committee- duty certified by chairmen /secretary.

Private /public limited company account:

  • Memorandum and articles of association duly certified by the register of join stock companies and firms.
  • Certificate of incorporation duly certified by the register of join stock companies and firms.
  • Board resolution duly certified by the Chairman/Sectary of the company.
  • Form XII and schedule X duly certified by the register of join stock companies and firms.
  • Certificate of commencement of business duly certified by the register of join stock companies and firms.

Non-Govt. School/College/University/Madrasa/Muktab:

  • Certified copy of Registration certificate.
  • Copy resolution of managing committee/Executive committee for opening account with DBBL and operation of account-duty certified by chairmen /secretary.
  • List of members of the managing committee /Executive committee- duty certified by a Gazette officer.

Sector Corporation:

  • Certified by relevant Presidential order/ Act of Parliament establishing the corporation.
  • Resolution of board of directors /competent authority to open account with DBBL.
  • Certified list of Board of Directors.

 

DEPOSIT SECTION

Deposit is the lifeblood of a bank. From the history and origin of the banking system we know that deposit collection is the main function of a bank.

Accepting deposits:

The deposits that are accepted by DBBL like other banks may be classified in to,—

    • Demand Deposits
    • Time Deposits

Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. DBBL accepts demand deposits through the opening of,-

  • current account
  • Savings account
  • Call deposits from the fellow bankers

 

Time deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit. DBBL accepts time deposits through Fixed Deposit Receipt (FDR), Short Term Deposit (STD) and Bearer Certificate Deposit (BCD) etc.

While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arises a contract between the two. This contract will be valid one only when both the parties are competent to enter into contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, DBBL   officials remain very much careful about the competency of the customers.

CASH SECTION:

Banks, as a financial institution, accept surplus money from the people as deposit and give them opportunity to withdraw the same by cheque, etc. But among the banking activities, cash department play an important role. It does the main function of a commercial bank i.e. receiving the deposit and paying the cash on demand. As this department deals directly with the customers, the reputation of the bank depends much on it. The functions of a cash department are described bellow:

Functions of Cash Department:

Cash Payment
  • Cash payment is made only against cheque
  • This is the unique function of the banking system which is known as “payment on demand”
  • It makes payment only against its printed valid Cheque
Cash Receipt
  • It receives deposits from the depositors in form of cash
  • So it is the “mobilization unit” of the banking system
  • It collects money only its receipts forms

 

Cash packing:

After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

Allocation of currency:

Before starting the banking hour all tellers give    requisition of money through “Teller cash proof sheet”. The  head teller writes  the number of  the  packet  denomination wise in “Reserve  sheet”  at  the  end of the   day, all the  notes  remained  are  recorded  in  the  sheet.

 

LOCAL REMITTANCE

Carrying cash money is troublesome and risky. That’s why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers.

Types of remittance:

  • Between banks and non banks customer
  • Between banks in the same country
  • Between banks in the different centers.
  • Between banks and central bank in the same country

The main instruments used by the DBBL of remittance of funds are

  • Payment order ( PO)
  • Demand Draft ( DD)
  • Telegraphic Transfer (TT)

So the basic three types of local remittances are discussed below:

PointsPay OrderDemand DraftTT
ExplanationPay Order gives the payee the right to claim payment from the issuing bankDemand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand.Issuing branch requests another branch to pay specified money to the specific payee on demand by Telegraph /Telephone
Payment fromPayment from issuing branch onlyPayment from ordered branchPayment from ordered branch
Generally used to Remit fundWithin   the clearinghouse area of issuing branch.Outside the clearinghouse area of issuing branch. Payee can also be the purchaser.Anywhere in the country
Payment Process of the paying bankPayment is made   through clearingConfirm that the DD is not forged one.

2.Confirm with sent advice

3.Check the ‘Test Code’

4.Make payment

1.Confirm issuing branch

2.Confirm Payee A/C

3.Confirm amount

4.Make payment

5.Receive advice

ChargeOnly commissionCommission + telex chargeCommission     +

Telephone

Payment of interest: It is usually paid on maturity of the fixed deposit. DBBL calculates interest at each maturity date and provision is made on that “miscellaneous creditor expenditure payable accounts” is debited for the accrued interest.

Encashment of FDR: In case of premature FDR< DBBL is not bound to accept surrender of the deposit before its maturity date. In order to deter such a tendency the interest on such a fixed deposit is made cut a certain percentage less the agreed rate. Normally savings bank deposit is allowed.

Loss of FDR:  In case of lost of FDR the customer is asked to record a GD (general diary) in the nearest police station. After that the customer has to furnish an Indemnity Bond to DBBL a duplicate FDR is then issued to the customer by the bank.

 

CLEARING SECTION

The amount of Cheques, Pay Order (P.O), and Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer is a basic function of a Clearing Department.

Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house.

Clearing House:

Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks.

Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, and Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali bank arranges this function.

 

Types of Clearing:

Outward Clearing: When the Branches of a Bank receive cheque from its customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing.

Inward Clearing: When the Banks receive cheque drawn on them from other Banks in the Clearing House, it is Inward Clearing.

Types of clearing house:

There are two type of clearing house: Those are

      • Normal clearing house
      • Same day clearing house

Normal clearing house:

  • 1st house: 1st house normally stands at 10 a.m. to 11a.m
  • 2nd house: 2nd house normally stands after 3 p.m. and it is known as return house.

Same day clearing house:

  • 1st house: 1st house normally stands at 11 a.m. to 12 p.m
  •  2nd house: 2nd house normally stands after 2 p.m. and it is known as return house.

 

ACCOUNTS SECTION

Bills   Collection:

In modern banking the mechanism has become complex as far as smooth transaction and safety is concerned. Customer does pay and receive bill from their counterpart as a result of transaction. Commercial bank’s duty is to collect bills on behalf of their customer.

Types of Bills for Collection

  • Outward Bills for Collection (OBC).
  • Inward Bills for Collection (IBC).

Outward Bills for Collection (OBC)

OBC means Outward Bills for Collection .OBC exists with different branches of different banks outside the local clearing house. Normally two types of OBC:

  • OBC with different branches of other banks
  • OBC with different branches of the same bank

Procedure of OBC:

  • Entry in the OBC register.
  • Put OBC number in the cheque.
  • “Crossing seal” on the left corner of the cheque & “payees account will be credited on realization “seal on the back of the cheque with signature of the concerned officer.
  • Despatch the OBC cheque with forwarding.
  • Reserve the photocopy of the cheque, carbon copy of the forwarding and deposit slip of the cheque in the OBC file.

Inward bills for collection (IBC)

When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill.

 

LOANS & ADVANCES

This is the survival unit of the bank because until and unless the success of this department is attained, the survival is a question to every bank. If this section does not properly work the bank it may become bankrupt. This is important because this is the earning unit of the bank. Banks are accepting deposits from the depositors in condition of providing profit to them as well as safe keeping their profit. Now the question may gradually arise how the bank will provide profit to the clients and the simple answer is – Investments & Advance.

Why the bank provides Investment to the Borrowers?

  • To earn profit from the borrowers and give the depositors profit.
  • To accelerate economic development by providing different industrial as well as agricultural Investment.
  • To create employment by providing industrial Investments.
  • To pay the employees as well as meeting the profit groups.

 

Lending principle

The Principle of lending is a collection of certain accepted time tested standards, which ensure the proper use of Investment fund in a profitable way and its timely recovery. Different authors describe different principles for sound lending.S

  1. Safety
  2. Security
  3. Liquidity
  4. Adequate yield
  5. Diversity

 

Types of Investments and Investment

The different types of Investments and Investment that DBBL offers are as follows:

  1. Secured Overdraft (SOD)
  2. Investment against Imported Merchandise (LIM)
  3. Investment against Trust Receipt (LTR)
  4. Payment Against Document (PAD)
  5. House Building Investment
  6. House Building Investment (staff)

Secured Overdraft (SOD):

It is a continue advance facility. By this agreement, the banker allows his customer to overdraft his current account up to his credit limits sanctioned by the bank. The profit is charged on the amount, which he withdraws, not on the sanctioned amount. DBBL sanctions SOD against different security.

SOD (general):

Advance allowed to individual/ firms against financial obligation (i.e. lien on FDR/PSP/BSP/ insurance policy share etc.) This may or may not be a continuous Credit.

SOD (others):

Investment allowed against assignment of work order or execution of contractual works falls under this head. This advance is generally allowed for a definite period and specific purpose i.e. it is not a continuous credit. It falls under the category “others”

LIM (Investment against Imported Merchandise):

Investment allowed for retirement of shipping documents and release of goods imported through L/C taking effective control over the goods by pledge in go downs under Banks lock & key fall under this type of advance. This is also a temporary advance connected with import, which is known as post‑import financing, falls under the category “commercial lending”.

LTR (Investment against trust receipt):

Advance allowed for retirement of shipping documents, release of goods imported through L/C falls under trust with the arrangement that sale proceed should be deposited to liquidate within a given period. This is also a temporary advance connected with import, which is known as post‑import financing, falls under the category “commercial lending”.

PAD (payment against document):

Payment made by the Bank against lodgment of shipping documents of goods imported through L/C falls under this head. It is an interim advance connected with import and is generally liquidated against payments usually made by the party for retirement of the documents for release of imported goods from the customer’s authority. It falls under the category “commercial Bank”.

House building Investment (General):

Investments allowed to individual/ enterprise construction of house (residential or commercial) fall under this of advance. The amount is repayable by monthly installment within a specified period, Investment is known as Investment (HBL‑GEN).

 

Collateral:

The land and the construction on the land are normally given as collateral. It may changes: –

The documents to be obtained­:DP note.

  1. Letter of disbursement
  2. Letter of installment.
  3. Letter of guarantee.
  4. Letter of under taking.
  5. Letter of agreement.
  6. Irrevocable general power of attorney.
  7. Memorandum of deposit of title deed.
  8. Any other documents if considered

House building Investments (staff):

Investments allowed to the Bank employees for purchase/construction of house shall be known as Staff Investment (HBFC‑STAFF).

Term Investment:

DBBL considers the Investments, which are sanctioned for more than one year as term Investment. Under this facility, an enterprise is financed from the starting to its finishing, i.e. from installation to its production.

Investment (general):

Short term and long term Investments allowed to individual/ firms / industries for a specific purpose but a definite period and generally repayable by the installments fall under this head. These types of lending are mainly allowed to accommodate financing under the categories.

Bank guarantee:

The bank is very often requested by his customer to issue guarantees on their behalf to a third party – committing to make an unconditional payment of certain amount of money to the third party, if the customer (on whose behalf it gives guarantee) becomes liable, or creates any loss or damage to the third party.

Export cash credit (ECC):

Financial accommodation allowed to customer for exports of goods falls under this head is categorized as “Export Credit “. The Investment must be liquidated out of export proceeds within 180 days.

Cash Credit (Hypothecation)

The mortgage of movable property for securing Investment is called hypothecation. Hypothecation is a legal transaction whereby goods are made available to the lending banker as security for a debt without transferring either the property in the goods or either possession. The banker has only equitable charge on stocks, which practically means nothing. Since the goods always remain in the physical possession of the borrower, there is much risk to the bank. So, it is granted to parties of undoubted means with the highest integrity.

 

The formalities for Opening cash credit:

The intending cash credit holder should submit the nd being fulfill properly:

  1. Stock report, Rent receipt.
  2. Trade license.
  3. Up to date income tax clearing certificate.
  4. Charge documents
  5. Letter of continuity
  6. Letter of arrangement
  7. DP (Demand promissory) note.
  8. Letter of guarantee.
  9. Letter lien.
  10. Limit sanctions advice.

 

LENDING AUTHORITY

As sure proper and orderly conduct of the business of the Bank, the Board of Directors’ will empower the Managing Director and other Executives of the Bank to lend up certain amount under certain terms and conditions at their discretion. The lending officer is broadly categorized as follows:

  • Managing Director
  • Deputy Managing Director
  • Executive vice President asstt.
  • Senior vice President
  • Vice President
  • Senior asstt. Vice President
  • vice President.

 

SECURITIES

To make the Investment secured, charging sufficient security on the credit facilities is very important. The banker cannot afford to take the risk of non-recovery of the money lent. DBBL charges the following two types of security, –

Primary security: These are the security taken by the ownership of the items for which bank provides the facility.

Collateral security: Collateral securities refer to the securities deposited by the third party to secure the advance for the borrower in narrow sense. In wider sense, it denotes any type of security on which the bank has a personal right of action on the debtor in respect of the advance.

 

MODES OF CHARGING SECURITY

There are different modes of charging the bank exercises security:

PLEDGE

Pledge is the bailment of the goods as security for payment of a debt or performance of a promise. A pledge may be in respect of goods including stocks and share as well as documents of title to goods such as railway receipt, bills of lading, dock warrants etc. duly endorsed in bank’s favor.

HYPOTHECATION

In case of hypothecation the possession and the ownership of the goods both rest the borrower. The borrower to the banker creates an equitable charge on the security. The borrower does this by executing a document known as Agreement of Hypothecation in favor of the lending bank.

LIEN

Lien is the right of the banker to retain the goods of the borrower until the Investment is repaid. The bankers’ lien is general lien. A banker can retain all securities in his possession till all claims against the concern person are satisfied.

MORTGAGE

According to section (58) of the Transfer of Property Act,1882 mortgage is the ‘’transfer of an profit in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of Investment, existing or future debt or the performance of an engagement which may give rise to a pecuniary liability”. In this case the mortgagor dose not transfer the ownership of the specific immovable property to the mortgagee only transfers some of his rights as an owner. The banker exercises the equitable mortgage.

CREDIT DISBURSEMENT

Having completely and accurately prepared the necessary Investment documents, the Investment officer ready to disburse the Investment to the borrower’s Investment account. After disbursement, the Investment needs to be monitored to ensure whether the terms and conditions of the Investment fulfilled by both bank and client or not.

 

SWOT ANALYSIS

SWOT analysis is the detailed study of an organization’s exposure and potential in perspective of its strength, weakness, opportunity and threat. This facilitates the organization to make their existing line of performance and also foresee the future to improve their performance in comparison to their competitors. As though this tool, an organization can also study its current position, it can also be considered as an important tool for making changes in the strategic management of the organization.

Strengths:

  1. DBBL Limited has already established a favorable reputation in the banking industry of the country. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth in the profits and deposits sector.
  2. DBBL has provided its banking service with a top leadership and   management  position. The Board of Directors headed by its Chairman Mr. Abul Hasnat and Md. Rashidul Islam is a skilled person in business world.
  3. DBBL Limited has already achieved a high growth rate accompanied by an impressive profit growth rate in 2007. The number of deposits and the loans and advances are also increasing rapidly.
  4. DBBL has an interactive corporate culture. The working environment is very friendly, interactive and informal. And, there are no hidden barriers or boundaries while communicate between the superior and the employees. This corporate culture provides as a great motivation factor among the employees.
  5. DBBL has the reputation of being the provider of good quality services too its, potential customers.

 Weakness:

  1. The main important thing is that the bank has no clear mission statement and strategic plan. The banks not have any long-term strategies of whether it wants to focus on retail banking or become a corporate bank. The path of the future should be determined now with a strong feasible strategic plan.
  2. Some of the job in DBBL has no growth or advancement path. So lack of motivation exists in persons filling those positions. This is a weakness of DBBL that it is having a group of unsatisfied employees.
  3. In terms of promotional sector, DBBL has to more emphasize on that. They have to follow aggressive marketing campaign.

Opportunity:

  1. In order to reduce the business risk, DBBL has to expand their business portfolio. The management can consider options of starting merchant banking or diversify into leasing and insurance sector.
  2. The activity in the secondary financial market has direct impact on the primary financial market. Banks operate in the primary financial market. Investment in the secondary market governs the national economic activity. Activity in the national economy controls the business of the bank.
  3. Opportunity in retail banking lies in the fact that the country’s increased population is gradually learning to adopt consumer finance. The bulk of our population is middle class. Different types of retail lending products have great appeal to this class. So a wide variety of retail lending products has a very large and easily pregnable market.
  4. A large number of private banks coming into the market in the recent time. In this competitive environment DBBL must expand its product line to enhance its sustainable competitive advantage. In that product line, they can introduce the ATM to compete with the local and the foreign bank. They can introduce credit card and debit card system for their potential customer.
  5. In addition of those things, DBBL can introduce special corporate scheme for the corporate customer or officer who have an income level higher from the service holder. At the same time, they can introduce scheme or loan for various service holders. And the scheme should be separate according to the professions, such as engineers, lawyers, doctors etc.

Threats:

  1. All sustain multinational banks and upcoming foreign, private banks posse’s enormous threats to DBBL.If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against an on slough of foreign the banks.
  2. 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 bankrupt. DBBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem if not elimination.
  3. The low compensation package of the employees from mid level to lower level position threats the employee motivation. As a result, good quality employees leave the organization and it effects the organization as a whole.

 

Remarks on Fundamental Analysis

  • Investment capital: DBBL investment capital was taka 400 million when the started bank at the 2003.In the running year (2010) invested by taka 4,000 million.
  • Commercial Banking: Commercial banking and lending policy is the more impressive between other commercial bank. The commercial bank maintain the cash and credit section. Wherever maintain the loan sanction. Also provide to the other clearing functions as it is like any other commercial bank.
  • Functional Area: Maintain all types of deposit A/C and making investment to conduct foreign exchange business. It is best for swift and faster banking services.
  • Commercial loan: This bank lend to the clients in the year of 2008 and 2009 tk. 41698.32 and tk.48410.99 million. Which was huge from other commercial banks loan.
  • Foreign Exchange Business and PBL: Income From nine branches foreign exchange portfolio is 25% in the year of 2009.It is attractive remarkable sector of DBBL. Moreover, the percentage is highly increases Foreign Exchange Business and PBL.
  • CSR Activities : Social service responsibility activities work for continuous when the peoples fallen to the natural disasters(earth-quake, sunami, cyclone, flooded and cold affected areas)
  • Brand Sponsor of the Club: DBBL is the brand sponsor of Kalabagan Cricket Academy. Infect, the bank should support to making new cricketers for the next generation.
  • Rewarding to the Poor and Scholar Students: This bank making generation fast for leading in world. Every year rewarded certificate, crest and stipend to the scholar. Also Should have sponsor to the travel & tours for the their mind refreshment. That’s why it is example of the others commercial.
  • Tree Plantation: The city mayor of Dhaka declared by green dhaka green city .DBBL join with the slogan for the tree plantation project in the urban & rural areas in Bangladesh.
  • Health Care: Recently the DBBL given the financial support for the cancer treatment and health care development in the BSMMU.
  • Deposit: Deposits by the both year tk. 51575.67 and 67788.53(year 2008 and 2009).
  • Investment: Investment capital by both year in 2008 and 2009 tk.1,000 million and tk.1500 million.

 

Remarks on Research findings

  • As a new department, HUMAN RESOURCES DEPARTMENT is a tall organization. The organizational hierarchy is not well designed like flat organization.
  • The working environment is not congenial & appropriate. The working desk provides sound pollution. It looks like a hall room.
  • Recruitment and selection process is a time consuming and lengthy process.
  • The modern technology is not used in the recruitment and selection process. The backdated methods are using for selection until today.
  • The record keeping system is also backdated, not followed computerized system properly.
  • For nomination of foreign training, the authority sometimes practices nepotism. The bank does not follow the systematic process for trainee nomination.
  • Delayed government order and postponed the training program by ministry must create negative impact towards the employees motivation and also destroy the lucrative training opportunities for the employees of Bangladesh bank.
  • Bangladesh Business and Trade Association and Bangladesh Institute of Bank Management are providing dynamic contribution to train the employees of Bangladesh Bank.
  • The employees of outside of head office deprive of foreign training facilities only 10 to 15 percent employees can get the opportunities of foreign training.
  • BB is an autonomous body but practices the govt. pay scale for compensation, but not pay on the basis of market price and cost of living. But the pension policy and the payment of pension to the employees are very fair and transparent.
  • The transfer and promotion process is fair but the promotion is not faster.
  • Loan facilities are very attractive to the employees of Bangladesh bank.
  • Medical /accommodation facilities are almost eligible in the context of our country. But the quantities of accommodation system and medical facilities are not fulfilling the demand of the employees.
  • Extra productivity will not provide extra financial benefit, only give ‘thank you’
  • PMS is better than ACR. But it is very difficult to implement PMS at the present situation because it provides the following problems.
  • Goal setting problem and adoptability problems by the employees
  • Lack of sufficient knowledge of the employees about PMS
  • Lack of sufficient facilities for PMS implementation
  • Not possible to eliminate 100% nepotism
  • There is no policy to build up harmonious relationship among the employees. The employees cannot protest the injustice of the authority because the pure trade union is absent there.
  • CBSP project is inventing various new systems and policies for acceleration of managerial activities in the Bangladesh bank.
  • From my point of view, there is an excess manpower than requirement for the organization.
  • Finally, HR department of Bangladesh bank is trying to do better human resource practice in term of exchanging views and ideas from foreign central banks.

 

RECOMENDATIONS

Commercial Banking Department:

  • If the enter Commercial Banking system is fully computerized then they satisfy the customer by provide fast service.
  • If they establish networking system with their branches then it can easily transfer data within short time.
  • If they cancel the introducer system then they can collect more deposit through new account and it also satisfied the customer.

Loan and Advance Department:

  1. Try to avoid giving loan the political person who had bad reputation of loan repaying.
  2. Evaluate the securities value properly to avoid the risk of loan recovery. The punishment system should be established to discourage the unlawful activities of employee.
  3. Bangladesh Bank should more active to provide CIB report.

 

CONCLUSION

As a Thesis report of DBBL. I have truly enjoying my internship from the learning and experience viewpoint. I am confident that this thesis program at DBBL will definitely help me to realize my further carrier in the job market.

As there are lots of local and foreign banks in Bangladesh the DBBL is promising commercial Bank among them. In this competitive market DBBL has to compete not only the others commercial banks but also with the public Bank. DBBL is more capable of contributing towards economic development as compared with other bank. DBBL invested more funds in export and import business. It is obvious that the right thinking of this bank including establishing a successful network over the country and increasing resources will be able to play a considerable role in the portfolio of development. Success in the banking business largely depends on effective lending. Less the amount of loan losses, the more the income will be from Credit operations the more will be the profit of the DBBL Limited and here lays the success of Credit Financing.