Main objective of this report is to analysis and discuss on Retail Banking Management of EXIM Bank Limited Satmasjid Road Branch. Other objectives are to describe the major retail services offered by EXIM Bank. Finally identify problems related to retail banking operations and make some recommendations to overcome the problems. Because of retail banking the banking process is becoming faster, easier and the banking arena becoming wider.
The study has been carried out with the following objectives.
- To describe retail banking operations of EXIM Bank Ltd.
- To mention the major retail services offered by EXIM Bank Ltd.
- To identify problems related to retail banking operations of EXIM Bank, Satmasjid Road Branch.
- To make some recommendations to overcome the problems.
Historical Background of EXIM Bank Ltd.
EXIM Bank Ltd. was established under the rules and regulations of Bangladesh Bank and the Bank companies act. 1991, on the 3rd August 1999 with the leadership of later Mr. Shahjan Kabir, founder chairman. He had a long experience as a good banker. Among them Mr. Nazrul Islam Mazumder became the honorable chairman aft4er the demise of the honorable.
From this inception EXIM Bank Bangladesh Ltd. was known as BEXIM Bank Ltd., which stands for Bangladesh Export Import Bank Limited. But some legal constraints the bank renamed as EXIM Bank Ltd. which means Export Import Bank Bangladesh Limited. The bank starts it’s functioning from the 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 financial sector of our country. By this 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. In 2008 the authorized capital and paid up capital of the bank are Tk. 3500.00 million and Tk. 2677.75 million respectively.
Vision & Mission of EXIM Bank
“Together Towards Tomorrow” is the vision of Exim bank. Exim bank believes in togetherness with its customers, in its march on the road to growth and progress with service. To achieve the desired goal, there will be pursuit of excellence at all stage with a climate of continuous improvement, because, in EXIM Bank, they believe, the line of excellence is never ending. Bank’s strategic plans and networking will strengthen its competitive environment. Its personalized quality services to the customers with the trend of cornerstone to achieve their operational success.
The EXIM Bank has chalked out the following corporate objectives in order to ensure smooth achievement of its goals-
- To be the most caring and customer friendly and service oriented bank
- To create a technology based most efficient banking environment for its customers
- To ensure ethics and transparency in all levels
- To ensure sustainable growth and establish full value to the honorable stakeholders and
- Above all, to add effective contribution to the national economy
Management of EXIM Bank
For any financial and non-financial organization Management is the most valuable and important resources of any kind of organization. In addition, a well-organize management provides the organization to reach its ultimate goal. Management means planning, organizing, staffing, directing and controlling of all financial and non-financial resources of an organization. Different aspects of management practice in EXIM Bank are discussed below.
EXIM Bank has done its planning within the purview of the corporate plan. The overall planning approach of EXIM Bank is Top-down. Each branch can plan according to the goal imposed by the corporate level. It doesn’t plan independently. And, EXIM Bank has a planning division. This department is mainly responsible for the overall planning.
EXIM Bank is organized as per the existing business locations. It has twenty-eight branches, each of which is a separate entity. Each unit is responsible for its own performance and a senior Vice President (SVP) followed by Managers each. He is directly responsible for performance of their unit. Within each branch, it is organized functionally.
The recruitment of EXIM Bank is done in two ways. One as a “probationary officer” for the management program and it has probation period of one year. Another one is non-management level as “Trainee Officer” Probationary officer is recruited in officer category and their career path is headed towards different managerial jobs.
- Directing and controlling
The management approach in EXIM Bank is top-down or authoritative. Information just seeks through lower management layer. Works are designed in such a way that can not leave without clearing the tasks as he is assigned for a day. Setting Management in all office is done in way that the superior can monitor the subordinate can all time. Budgeting, rewarding, punishing etc. are also practiced as control mechanism.
- Human resource Practices in EXIM Bank
Employees are the core resources of any organization. Without them, one cannot run their organization. And, human resource is concerned with the growth and development of people toward higher level of competency, creativity and fulfillment. It help employees become better more responsible person and then it tries to create a climate in which they contribute to the limits of their improved abilities. It assumes that expanded capabilities and opportunities for people will lead directly to improvements in operating effectiveness. Essentially, the human resource approach means that people achieve better result.
The set-vice rule of EXIM Bank states the recruitment policy of the bank. In general the board of directors determines the recruitment policy of bank from time to time. The minimum entry level qualification for any official position other than supportive management is a Bachelors degree. However, informally the management prefers a minimum master’s degree for the appointed of probationary officers in the Executive officer position. The recruitment for entry level positions begins with a formal written test which is conducted and supervised by the Institute of Business Administration, University of Dhaka. After successful completion of the written test, a personal interview is conducted for the successful candidates by a panel of experts comprising of renowned and prominent bankers of the country.
Bank Service Policies
Customer Service Banking:
“Customer Service Banking is the aggregate of functions, directed at providing services to satisfy customers’ financial (and other related) needs and wants, more effectively and efficiently than the competitors keeping in view the organizational objectives of the bank”
This definition highlights the following points:
- Banks provide service-with all the characteristics discussed earlier, being associated with them.
- Aim is to satisfy customer has needs and wants.
- The needs and wants of the customer are financial in nature, and some may be even incidental to or related to the main function.
- The competitive element, efficiency and effectiveness are major factors in the process.
- Organizational objectives are still the driving force.
Channels of Distribution of Banks
The channels of distribution in financial services perform a number of key functions, as follows:
- Sale and offer of services and products, as well as advising customers.
- Contract and liaison with advertising and public relations agencies to assist in designing more effective advertising/promotional campaigns.
- Gathering of information necessary for planning marketing activities, strategy decisions and product development.
Functions of the EXIM Bank
- The main task of the EXIM Bank is to accept deposited from various customers through various accounts.
- Provides loans on easy terms and condition.
- It creates deposit.
- The Bank invest it fund in to profitable sector.
- It transfers money by Demand Draft (DD), Pay Order (PO), On-line and Telegraphic Transfer etc.
- The Bank is doing the transaction of bill exchange, cheque etc. on behalf of the clients.
- EXIM Bank assists in the foreign exchange by issuing letter of credit.
- It brings the increasing power of the dimension of transaction.
- Above all, EXIM Bank helps the businessmen financially by giving discount facility for bill of exchange and by providing the facility of letter of Guarantee.
Conversion in to Islami Banking
In the Extra Ordinary General Meeting held on December 28, 2003 and obtaining confirmation form the honorable High Court Division of Bangladesh Supreme Court, their bank had been converted into a full-fledged Islami Bank based on Shariah from traditional interest based banking and at the grace of Almighty Allah they started functioning as an Islami Bank with effect from 1st July 2004 with the approval of Bangladesh Bank. Before conversion, they put option to all of bank-valued customers through news media in addition to personal contract with them to accept the decision taken by them. It’s a great pleasure that every body gladly accepted the conversion with appreciation.
Corporate Culture of EXIM Bank Limited
The bank is one of the most distinctive corporate cultures. There they lived in shared meaning, shared understanding and shared sense making. People can see and understand events activities objects and situation in distinctive way. They maintained their manners etiquette, character individually to suit the purpose of the bank and the needs of the customers who are of paramount importance to them. The people in the bank see themselves as a tight team/family that believed in working together for growth.
Social Commitment of EXIM Bank Limited
The purpose of banking business is, obvious; to earn profit, but the promoters and the equity holders are aware of their commitment to their society to which they belong. A chunk of the profit is kept aside and/or spends for socio economic development through trustee and in patronization of art, culture and sports of the country. The institution wants to make a substantive contribution to the society where it operates, to the extent of its separable resources.
EXIM Bank Foundation and CSR Activities
At least 2% of our annual profit of every year is put aside for the foundation to conduct Corporate Social Responsibilities(CSR) activities. The mainstream CSR activities that are carried out through this foundation are:
- Healthcare service.
- Scholarship program for brilliant poor student.
- Education Promotion Scheme (Interest free loan).
- Helping people affected by natural calamities.
- Helping people in slum areas.
- Donation to educational institutions to setup computer lab.
- Beautification of Dhaka City.
A 5 storied building having 10,000 sft floor space at 840 Kazi Para, Rokeya Sarani,Mirpur, Dhaka-1216 has been hired to set up Exim Bank Hospital. The decoration of this hospital is going on in full swing. A doctor has been recruited who is working as a resident director of the hospital. Other doctors and hospital staffs have been in the process of selection through recruitment notice already published in the national dailies. They will be appointed as soon as the decoration of the hospital is complete.
Scholarship program for brilliant poor student
This is a stipend package for poor and meritorious a student that takes care of the beneficiaries throughout their student life. EXIM Bank Scholarship Programme, launched in 2006 with 61 poor and meritorious students selected from different reputed educational institutions of Dhaka City including Govt. Laboratory High School, Viqarunnissa Noon School and College, Dhaka University, BUET, Dhaka Medical College, etc. enrolled as many as 1000 students from around 150 reputed educational institutions across the country by 31 December 2008. They are enrolled in the this programme to be taken care of for their whole educational life subject to their fulfilment of the eligibility criteria that include satisfactory academic results, non-involvement in student politics, financial insolvency etc. So far Tk. 19.3 million has been disbursed as scholarship under this programme.
Education Promotion Scheme (Interest free loan)
Under Education Promotion Scheme, quard or interest-free loan is provided for poor and meritorious students to help them bear monthly educational expenditure including academic expenses, food, accommodation, etc. The quard is disbursed to the selected students in monthly installments till their accomplishing the master degree. Under this programme the students are required to repay the amount (only the principal amount) in long-term monthly installments after they have joined a confirmed job accomplishing their education properly. By 31 December 2008, Tk. 19.7 million was sanctioned to take care of around 138 poor and meritorious students from a number of reputed educational institutions like Dhaka University, Chittagong University, Dhaka Medical College, BUET, Bangladesh Agricultural University, Shahjalal University of Science and Technology etc.
Helping people affected by natural calamities
Another vital area we are dealing with as part of our CSR activities is helping people survive natural calamities. Under this welfare programme, EXIM Bank provides relief in cash and kind for flood, fire or cyclone victims and cold-stricken people. The aim of these CSR activities is to help the target group overcome their provisional handicap and contribute to the socio-economic growth as soon as possible.
Helping people in slum areas
Besides natural calamities, fire breaks out sometimes in slum areas that guts the shanties and renders the affected people very helpless. In that situation, we help the victims fight against the hard days and return to normal life.
Donation to educational institutions to setup computer lab
We have donated to Dhaka University and Chittagong University to set up two computer labs that help the students of those universities acquire ICT knowledge. This will certainly help the students to be ready to take the challenges of this information society.
Beautification of Dhaka City
In response to the call of the Dhaka City Corporation, EXIM Bank has been sharing a good portion of the mammoth task of beautifying the capital since 2005. To make the capital a modern city enriched with adequate urban amenities, EXIM Bank always joins hands with the government.
Achievements of EXIM Bank Limited
First private sector bank to open exchange house in UK
In order to ensure delivery of smooth and most reliable remittance services to NRBs living and working in UK, Export Import Bank of Bangladesh Limited (Exim Bank) has started operation of its wholly owned subsidiary “EXIM Exchange Company (UK) Ltd”. on 30th June 2009 in London, United Kingdom, one of the oldest destinations for the expatriate Bangladeshis. It is the first exchange house owned by a Bangladeshi private bank.
Bangladesh Bank Governor Dr. Atiur Rahman inaugurated the exchange house as the Chief Guest, while H.E. Dr. M. Sayeedur Rahman Khan, Honorable High Commissioner, Government of the People’s Republic of Bangladesh, was present in the program as special guest. Chairman of EXIM Bank and Director of EXIM Exchange Company (UK) Ltd. Mr. Md Nazrul Islam Mazumder presided over the program.
Deputy High Commissioner Mr. Allamah Siddique, Director of EXIM Bank Mr. Muhammed Nurul Fazal Bulbul, Mrs Nasrin Islam, Mr. Abdullah-Al-Zahir Swapan, Mr. Md. Shahidullah, Managing Director of EXIM Bank Mr. Kazi Masihur Rahman and local elites were also present in the opening ceremony.
With the opening of EXIM Exchange, the Bangladeshi expatriates will now be able to send remittances to their family members back home within shortest possible time through online transfer to all the branches of EXIM Bank. EXIM Exchange Company (UK) Ltd is located at the Universal House of Wentworth Street London, which is a very convenient location for the Bangladeshi community and business houses. Unlike any other exchange company operating in UK, as EXIM Exchange is completely owned and Supervised by EXIM Bank under the approval of Bangladesh Bank and UK regulators, it is expected to be the most reliable and trusted Exchange House for the NRBs.
Implementation of the world renowned Core Banking Software (TEMENOS T24)
In order to provide IT enabled products and services to our valued customers, bank has implemented a world renowned shariah based centralized core banking software named TEMENOS T24. This software is capable enough to provide all sorts of electronic banking services to the valued customers through various electronic delivery channels.
Conversion from Conventional Banking to Shariah Based Islami Banking
It is a great pleasure that by the grace of Almighty Allah, we have migrated at a time all the branches from its conventional banking operation into Shariah based Islami banking operation without any trouble. Lot of uncertainties and adversities were there into this migration process. The officers and executives of our bank motivated the valued customers by counseling and persuasion in light with the spirit of Islam especially for the non-Muslim customers. Our IT division has done the excellent job of converting and fitting the conventional business processes into the processes based on Shariah. It has been made possible by following a systematic procedure of migration under the leadership of honorable Managing Director.
Overall Performance of EXIM Bank
GROWTH OF EXIM BANK: Figure in Crore
|6||Investment ( Shares on Bonds)||154.30||163.30||223.33||245.77||289.40|
|7||Foreign Exchange Business||4931.24||7294.00||9617.51||11790.01||15643.46|
|a) Import Business||2678.10||4143.20||4959.67||6139.94||7854.05|
|b) Export Business||2241.84||3128.50||4623.46||5579.04||7646.56|
|9||Loan as a % of total Deposit||101.33%||91.97%||93.18%||96.75%||93.14%|
|10||No. of Foreign Corresponden||200||222||246||246||278|
|11||Number of Employees||768||934||1020||1104||1312|
|12||Number of Branches||28||28||30||35||42|
|13||Return on Assets||1.57%||1.65%||1.73%||2.00%||1.83%|
Meaning of Retail Banking
Retail banking is where the banks are directly involved in carrying out transactions with customers rather than with other banks, corporations or financial institutions. It is most typically associated with high street banks where customers will come into the bank and meet face to face with bank employees to discuss or make transactions relating to current and savings accounts, mortgages, credit cards and loans and, these days, also investment banking activities too which has broadened the scope for people who are looking to pursue a career within the retail banking centre. Retail banking also encompasses online banking as well.
Retail banking refers to banking in which banking institutions execute transactions directly with consumers, rather than corporations or other banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth.
During the year 1989, a student Sanjeev “Sunny” Mishra, at Bradley University wrote a paper on Retail Banking for his graduate course work taught by Dr. Aaron Buchko.
In that paper, he simply created the physical model for Retail Banks and defined them as small neighborhood bank branches that were staffed with minimal staff to carry out the basic banking functions similar to a community banks. He defined this new model, the costs associated with it and the justifications for the various banking operations that these retail branches need to perform in order to remain profitable and to be able to add value to their parent commercial or community banks.
Important Goals for Retail Banking
Important goals for retail banking:
- Improve customers’ impression of the bank when they walk through the front door.
- Better, organize, present and explain the quality products and services the bank has to offer.
- Raise the efficiency of achieving all this.
- Retain the knowledge generated by these processes and executions.
- Educate and train the front line staff on how to manage their branches.
Different Products of EXIM Bank
As a commercial bank Exim Bank do all traditional Banking business including the wide range of savings and credit scheme products, retail banking and ancillary services with the support of modern technology and professional Excellency. However, their focus is, for obvious reason, on export and import trade handling and the development of entrepreneurship and patronization of private sectors.
DIFFERENT PRODUCTS OF EXIM BANK:
- Plastic Card Products.
- Deposit Products
- Investment Products
- Remittance Service.
- L/C (Import & Export) Products.
- Other Products.
Plastic Card Products of EXIM Bank
VISA Islamic Card
Exim Bank Ltd has started commercial operation of fully Shariah based VISA Islamic Card (Local, International & Dual Currency) under the principle of Bai-Murabaha. This is the first Islamic electronic product for any Islamic bank in Bangladesh.
The Salient Features of the card are-
- First Shariah Based Islamic Card by any Islami Bank in Bangladesh.
- Lowest Profit Rate in the Card Market
- Simple Profit Rate
- No Hidden Charge
- Dual Currency Facility in One Card
- Free Supplementary Card
- 24 Hours Customer Service
- Auto Debit Payment Facility
- Worldwide Acceptance
- Instant card message service in mobile
CRAD FEES & OTHER CHARGES
Card Fees & Other Charges:
|8.3333% of total outstanding amount or Tk. 500.00 which ever is higher.|
|50% of Assigned Investment Limit|
|Local||International / Dual|
Investment Products of EXIM Bank
Investment / Finance products:
- Corporate Finance
- Industrial Finance
- Project Finance
- Syndicate Investment
- Mode of Investment
- Bai Muazzal
- Izara Bil Baia
- Wazirat Bil Wakala
- Local Documentary Bill Purchased
- Foreign Documentary Bill Purchased
- From UK through Exim Exchange Company (UK) Ltd.
- Cilenco Fast Cash.
- Western Union Money Transfer.
- ELDDORADO Money Transfer
Export & Import Business
Import business is considered as an important segment of foreign exchange business. During the year, the bank opened 16339 import letters of credits and the import volume stood at Tk. 26781.80 million with a growth of 39.05% comparison with previous year.
The growth of the export business has significantly been increase by 48.22%.It stood at Tk. 26781.80 as of December 31, 2008 against Tk. 19260.10 million of the previous year.
The major problems identified are as follows:
- The bank has only four ATM stations, which is very insignificant compared with other banks.
- They have no provision of any debit card service.
- The bank does not have adequate retail products like marriage loan, car loan and education loan.
- They have no corporate sales people engaging in direct marketing.
- Their account opening procedure is lengthy and time consuming.
- They have limited number of logistics support like computer with efficient operator, air-condition etc.
- Their executives are not skilled enough to mobilize deposit schemes.
- They should setup more ATM booths for customers’ convenient service.
- The bank should introduce debit card service.
- They should provide various types of retail service like marriage loan, car loan and education loan etc.
- The bank can engage corporate sales people in direct marketing.
- Their account opening procedure should be more convenient, understandable and client friendly.
- Their management should provide logistics support adequately.
- The bank should develop on-line banking facilities in every sector.
- They should provide different type of sponsorship to increase promotional activities.
- The bank should increase its customer service such as phone banking, 24 hours online banking etc
Export Import Bank of Bangladesh Limited is a new generation bank. It is committed to provide high quality financial services/products to contribute to the growth of GDP of the country through stimulating trade and commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, poverty alleviation, raising standard of living of limited income group and overall sustainable socio-economic development of the country.
Though it is a new bank, EXIM Bank makes a strong position through its various activities. Its number of clients, amount of deposit and investment money increases day by day. This bank already has shown impressive performance in investment.
Customers are more or less satisfied with the present services of the bank. Now bank should think to start new services and take different types of marketing strategy to get more customers in this competition market of banking.
At last, it can be said that, EXIM Bank Ltd. is growing fast and its contribution in our economy is considerable. I hope that EXIM Bank will wide its services by expanding its branch allover the country.