Bank With Rupali Bank Limited.

Executive Summary

Rupali Bank Ltd. (RBL) was constituted with the merger of 3 (three) erstwhile commercial banks i.e. Muslim Commercial Bank Ltd., Australasia Bank Ltd. And Standard Bank Ltd. Which operated in the then Pakistan on March 26, 1972 under the Bangladesh Banks (Nationalization) order 1972 (P.O. NO. 26 of 1972), with all their assets, benefits, rights, powers, authorities, privileges, liabilities, borrowings and obligations. Rupali Bank worked as a nationalized commercial Bank till December13, 1986. Rupali Bank Ltd. Emerged as the largest Public Limited Banking Company of the country on December 14, 1986. Rupali Bank Ltd. Operates through 492 branches. It is linked to its foreign correspondents all over the world. The Corporate Head Office of the bank is located at DHAKA with one local office (main branch), four corporate branches at Dhaka, one in Chittagong and twenty-five zonal offices all over the country. The Board Of directors is composed of eight members headed by a chairman and the directors comprise representatives from both public and private sectors and shareholders. The Bank is headed by the Managing Director (Chief executive) who is a reputed professional Banker. The Bank has an authorized capital of TK. 7000 million with a paid up capital of TK. 1250 million. GOB owns 93.11% of its share while the private share constitutes only 06.89%.

As an Intern, I had the opportunity to do the different types of tasks under Rupali Bank Limited. During the internship period, I have used my observations and gained experiences about various banking functions and day-today operations. Rupali Bank Limited provides different types of services to its customer’s like-

  • Foreign exchange.
  • General banking etc.

I segmented my report into ten chapters. First covers the introduction about the report, second chapter covers the organizational overview of Rupali Bank Limited. Third chapter consists of Financial Analysis of Rupali Bank Limited. Fourth chapter is for the loan and advances by Rupali Bank Limited; Fifth chapter includes general banking of Rupali Bank Limited, Sixth chapter is for credit facility of Rupali Bank Limited and remaining chapter consists of Risk management, Conclusion and recommendations. This report will provide a view regarding the products and performance of the Sonali Bank Limited.

1.1 INTENTS OF THE STUDY:

This study is intended for providing me invaluable practical knowledge about banking operation system in Bangladesh. The prime objective of the study is to examine the performance of Rupali Bank Ltd.

However, the specific objectives are the followings:

  •   To accomplish the partial requisite of BBA Program and to achieve of good judgment with theoretical base.
  •   To have a revelation on the banking environment of Bangladesh.
  •   To review the consumer banking services and operating system of Rupali Bank Limited.
  •   To evaluate the factors affecting performance of the bank.
  •   To suggest the better ways of enhancing the performance of the bank.
  •   To know how Bank fixes profit rate and distribute/ allocate the profit.
  •   To make myself more confident and active in future to finger my job.

1.2 ORIGIN OF THE REPORT

The BBA program of DhakaCityCollege is designed with an excellent combination of theoretical and practical aspects. Internship provides the students to link up their theoretical knowledge into practical fields. After the completion of the course requirement for the BBA program, students are sent to various organizations where they are assigned to one or more task to get three months practical experience. During this program, supervisor guides each student one from the university and the other from the organization. In this connection, I was assigned to Rupali bank Bangladesh Ltd. Local office for my practical orientation.

At the end of the program, the internships are required to place the accomplishments and findings of the project through the writing of the internship report covering the relevant topics

1.3 JUSTIFICATION OF THE STUDY

Internship Program is a mandatory program for all students of B.B.A under NationalUniversity. Practical orientation is a positive development in professional area. Recognizing the importance of practical experience, Department of Business Administration has introduced a one to three months practical exposure as a part of the curriculum of Bachelor of Business Administration.

For the completion of this internship program I have chosen a bank named “Rupali Bank Limited” and my internship report is based on “Over all performance of Rupali Bank Limited”. I have prepared this report under Md. Shahinur Sobhan, Assistant Professor, Department of Business Administration, DhakaCityCollege. In the study period, mainly student gain theoretical knowledge but now a day, in the job market there is no substitute of practical work experience. Therefore, before getting into job, students should have some real world experience in the major field of study on the career choice that interest him/her.

1.4 OBJECTIVES OF THE STUDY

The objective of the study is to gather practice of all knowledge regarding business sector and operations. Theory classes of B.B.A provide us theories regarding business sector and practical orientation gives us the chance of view those systems and their operations. More precisely we can identify those objectives:

To gather the practical experience base on the theoretical knowledge.

  • To gather the practical experience base on the theoretical knowledge.
  • To habituated with the corporate environment and culture.
  • To serve the function of overall banker customer relationship.
  • To observe the function of general banking system.
  • To evaluate the financial performance of Sonali Bank Limited.
  • To observe the function of merchant banking operations.
  • To understand and analyze the financial strength of Sonali Bank Limited.
  • To observe the function of foreign exchange department.
  • To learn and acquainted to fulfill the academic purpose.

1.5 SCOPE OF THE STUDY

As I was an intern, my scope was limited and restricted for some purpose. I haveaintained some official formality for the collection of data of my report. This study will give a clear idea about the overall performance of Rupali Bank Limited as well as the different section of different products and services of Rupali Bank Limited.

1.6 LIMITATIONS OF THE STUDY

During the study, I have faced the following limitations:

  •   Three months time is not enough for such an extensive study. It is very difficult to collect all the required information in such a short period.
  •   Another limitation of this report is Bank’s policy of not disclosing some data and information for obvious reason, which could be very much useful.
  •   The bankers are very busy with their jobs, which lead a little time to consult with.
  •   Due to some legal obligation and business secrecy banks are reluctant to provide data. For this reason, the study limits only on the available published data and certain degree of formal and informal interview.
  •   In case of performance analysis secondary data are used.
  •   This is my first experience on job, so there may arise some faults though I have tried my level best.

1.7 METHODOLOGY OF THE STUDY

SOURCES OF DATA

In order to make the report more meaningful, presentable, a complete one and to meet the goal of this report different data and information are required. Those data and information were collected from various sources, such as, primary and secondary which is showed below:

The “Primary Sources” are as follows:

1)      Practical desk work.

2)      Face-to-face conversation with the respective officers and staffs of the local office.

3)      Relevant file study as provided by the officers concerned.

4)     Facing some practical situation related with the day to day banking activities.

The “Secondary Sources” of data and information are:

1)       Annual Report of Rupali Bank Bangladesh Limited

2)       File study.

3)       Various books, articles, compilations etc. regarding centralization process.

4)       Different ‘Procedure Manual’.

5)        Brochures

6)       Bangladesh Bank Annual report

7)       Newspapers

8)       Internet

9)       Several kinds of Academic test-book.

10)   Different publications regarding banking functions and Remittances operation

2.1 BACKGROUND

Rupali Bank Ltd. (RBL) was constituted with the merger of 3 (three) erstwhile commercial banks i.e. Muslim Commercial Bank Ltd., Australasia Bank Ltd. And Standard Bank Ltd. Which operated in the then Pakistan on March 26, 1972 under the Bangladesh Banks (Nationalization) order 1972 (P.O. NO. 26 of 1972), with all their assets, benefits, rights, powers, authorities, privileges, liabilities, borrowings and obligations. Rupali Bank worked as a nationalized commercial Bank till December13, 1986. Rupali Bank Ltd. Emerged as the largest Public Limited Banking Company of the country on December 14, 1986. Rupali Bank Ltd. Operates through 492 branches. It is linked to its foreign correspondents all over the world. The Corporate Head Office of the bank is located at DHAKA with one local office (main branch), four corporate branches at Dhaka, one in Chittagong and twenty-five zonal offices all over the country. The Board Of directors is composed of eight members headed by a chairman and the directors comprise representatives from both public and private sectors and shareholders. The Bank is headed by the Managing Director (Chief executive) who is a reputed professional Banker. The Bank has an authorized capital of TK. 7000 million with a paid up capital of TK. 1250 million. GOB owns 93.11% of its share while the private share constitutes only 06.89%.

2.2 COMPANY PROFILE

Name of the Company: Rupali Bank Limited
Chairman: Dr. Ahmed Al- Kabir
CEO and Managing Director: Mr. M. Farid Uddin
Legal Status: Public Limited Company
Registered Office: 34, Dilkusha Commercial Area, Dhaka-1000, Bangladesh
Authorized Capital: Taka 700.00 crore
Paid-up Capital: Taka 125.00 crore
Number of Employee:
Number of Branches: 492
Phone-PABX: 9551525, 9551624, 9551625
FAX: 88-02-9564148
SWIFT: RUPBBDDH
Website: www.rupalibank.org
E-mail: rblhocom@bdcom.com

rblhoid@bdcom.com

2.3 RUPALI BANK LIMITED-At A Glance-

SL.

Particulars

31-12-2009

June’09

Target’10

June’10

01.

Equity

Authorized Capital

700.00

700.00

700.00

Paid up Capital

125.00

125.00

125.00

Share Deposit A/C

7.50

7.50

7.50

Reserve Fund

336.94

358.08

336.94

Capital Shortfall

1250.27

1316.82

1194.69

02

Deposits

Total Deposits

7368.24

7764.32

8902.00

8410.22

(a) Current Deposit

717.21

1096.29

850.10

(b) Savings Deposit

2945.04

2806.74

3111.08

(c) STD

816.74

878.06

1111.18

(d) Fixed & Term Deposit

2453.03

2293.75

2824.35

(e) Other Deposit

436.22

689.48

513.51

03

Interest Suspense

263.43

276.64

257.73

04

Investments

1430.30

1307.25

1565.00

1450.32

05

Loans & Advances

Loans & Advances

5234.42

4907.18

6670.00

5656.74

Fresh Disbursement

SME Disbursement

Non-funded Loans

2858.41

2925.38

6757.16

06

Classified Loans & Recovery

Classified Loans (CL)

1094.41

1232.65

1199.04

% of Classified Loans

20.91%

25.12%

21.20%

Recovery of Classified Loans

531.01

368.66

27.84

Recovery By Cash

61.64

28.21

250.00

21.72

Recovery By Adjustment/ Reschedule

469.37

340.45

6.12

07

Write Off Loans

Write Off (during the year)

Recovery of Write Off Loans

35.35

27.35

43.00

15.93

08

Provision for Loans

Required Provision

678.45

763.21

Provision Maintained

852.69

852.69

852.69

Provision (Shortfall)/ Excess

174.24

89.48

09

Foreign Exchange Business

Import

1953.68

733.71

4330.00

4440.51

Export

752.71

318.06

1485.00

353.49

Remittances (Foreign)

2228.76

1077.44

2683.00

975.75

10

Profit & Loss

Operating Profit/ Loss

209.88

104.59

300.00

106.05

Accumulated Loss

1208.67

1228.89

1208.67

11

Commission Income

Income From Local Remittance

10.63

15.00

5.02

12

Costing of Fund

Cost of Deposit

4.52%

4.40%

4.86%

Cost of Fund

7.20%

7.00%

7.79%

13

Staff Position

No. of Officers

3148

3161

3086

No. of Staffs

1381

1405

1350

14

Profit/ Loss Branches

Profit Branches

434

415

412

Loss Branches

58

77

80

2.4 NUMBER OF EMPLOYEES

SL NO.NAME OF DESIGNATIONNUMBER

01

Managing Director

1

02

Deputy Managing Director

1

03

General Manager

3

04

Deputy General Manager

46

05

Assistant General Manager

78

06

Senior Principal Officer

372

07

Principal Officer

465

08

Senior Officer

547

09

Senior Officer (Cash)

0

10

Officer

1412

11

Officer (Cash)

161

Total

3086

12

Drafts man (Junior Officer)

1

13

Junior Officer

53+8

14

A.C Officer grade-1

3+1

15

Junior Officer (cash)

187

16

A.C Officer grade-1 (cash)

17

17

A.C Officer grade-2

2+25

18

A.C Officer grade-2 (cash)

15

Total

312

19

Driver

77

20

Care taker

360

21

M.L.S.S.

130

22

M.L.S.S. (peon)

36

23

Care taker (Guard)

360

24

Guard

13

25

Liftman

10

26

Electrician

3

27

Plumber

3

28

Others

46

Total

1038

2.5 DEPOSIT:

The total deposit of the bank has stood at TK. 7391.28 crore as on 31 December 2009 recording an increase of Tk 362.52 crore from Tk 7028.76 crore as on 31 December, 2008 through earnest efforts of high executives, as well as officers and staff of all levels in severe competitive circumstances in the banking sector at present. The rate of increase of deposit becomes 5.16 percent. Efforts for procurement of deposits have been made in different times during the year by organizing some special programmers. Besides this, emphasis is laid to procure no-cost and low-cost deposit keeping the matter of earning profit in view.

2.6 LOAN AND ADVANCES:

As on 31 December 2009 the total loans and advances of the bank has increased by Tk.331.42 crore to Tk. 5234.42 crore as compared to Tk. 4903.00 crore on 31 December, 2008 and the rate of increase was 6.76 percent. In accordance with the “Prudential Guideline for Consumer Financing and small enterprise Financing” as of Bangladesh Bank, financing in 3 (three) projects named Personal Loan, Professional Loan & Small Enterprise Financing has been continued also during the year in question. Besides this, in order to augment the credit flow in rural areas, the activities of lending to the NGOs under the Bank –NGO Linkage credit program have been started.

In 2008, the amount and rate of classified loans were Tk. 1534.24 crore and 31.29 percent respectively. But with the recovery of Tk. 439.83 crore, the amount of classified loans has reduced at Tk. 1094.41 crore, the rate of recovery being 20.91 percent. The success of recovery of classified loans is the outcome of incessant efforts of the officers and staff of all levels of the bank. As on 31 December, 2009 the amount of sector-wise classified loans was Tk. 306.54 crore and that of unclassified loans was Tk. 1227.86 crore i.e. total amount of classified and unclassified loans has stood at Tk. 1534.40 crore.

2.7 INVESTMENT:

The total investment of the bank was Tk. 1254.57 crore in 2008. it has increased by Tk. 175.73 crore to Tk. 1430.30 crore, the rate of increase being 14.01 percent. Investment has been encouraged in order to enhance the profit of the bank.

2.8 CALL MONEY AND FDR HELD IN OTHER BANKS:

The amount of invested money in money market was Tk. 447.47 crore in 2008. It has stood at Tk. 555.41 crore showing an increase of Tk. 107.94 crore in 2009. Such investment comprises Tk. 331.25 crore as FDR in different banks and Tk. 224.16 crore in call money.

2.9 PROFIT:

The bank has earned operating profit Tk. 209.87 crore in 2009, being Tk. 95.36 crore higher than the preceding year. But the bank sincerely expresses its regret for not being able to pay dividend to the esteemed shareholders this year due to previous accumulated loss according to the provision of the Banking Companies act.

2.10 FOREIGN EXCHANGE BUSINESS:

In spite of widespread economic recession throughout the world, Rupali Bank Ltd. Has been proceeding hopefully in foreign exchange business. The bank has made import business for tk. 2519.41 crore in 2009 with an increase of Tk. 449.13 crore from Tk. 2070.28 crore of 2008, the rate of increase being 21.69 percent. The main items of import were industrial raw materials, food items, vehicles, petroleum products, cotton, yarn and different consumer items. The volume of export business has increased by Tk. 35.65 crore to Tk. 745.81 crore this year as compared to Tk. 710.16 crore of the preceding year, the rate of increase being 5.02 percent. As to export business, leather and jute sectors have contributed much to bank performance. The foreign remittance has been elevated to Tk. 2231.19 crore in 2009 from Tk. 2164.28 crore of 2008 showing an increase of Tk. 66.91 crore, the rate of increase being 3.09 percent. The Foreign Exchange Dealing Room of Rupali Bank has made an earning of $0.207 million with an increase of $0.049 million in 2009 from $0.158 million of the last year by handling 1320 speculative deals. The rate of increase of such earning is 31.01 percent. International Division earned Tk. 12.92 crore in 2008; whereas in 2009 it has earned Tk. 23.88 crore with increased earning of Tk. 10.96 crore, the rate of earning being 84.83 percent. At the end of the year in question the number of overseas correspondents including exchange companies raises at 184. The number of NOSTRO accounts abroad is 34 and the number of exchange companies under Drawing Arrangement is 22 among which exchange companies issuing draft in Bangladesh taka are 15 and the number of exchange companies under EFT is 7.

2.11 RURAL DEVELOPMENT PROGRAM:

The activities of disbursement of credit like fishery loan, shrimp cultivation loan, goat/ sheep rearing loan, poultry loan, dairy loan, beef fattening loan, loan against corp. storage in godown, poverty alleviation and socio-economic loan, small loan, micro credit for the handicapped and the tree plantation loan are in operation under Rural Credit Division for socio-economic development of the country undef the policy pursued by the government. As the volume of agriculture / rural credit disbursement did not reach the expectation level for shortage of manpower at field levels and in order to deliver the agriculture/ rural credit to the hands of the farmers easily as per directives of the Ministry Of Finance and Bangladesh Bank, Bank-NGO Linkage Credit Programme was initiated in 2008.

Agriculture/Rural credit amounting to Tk. 60.58 crore out of allocated amount of Tk. 120.000 crore under annual agriculture/ rural credit program together with Bank-NGO linkage program through approval of the Board has been disbursed in 2009. The outstanding amount of agriculture/ rural credit as on 31-12-2009 is Tk. 120.88 crore.

A program named youth/farmer credit program has been made operative in order to disburse credit against bank account to those farmers who have obtained “Agriculture inputs and Assistance card” and have bank accounts or will open accounts in the bank with a view to assisting in their agricultural works. A preliminary allocation for Tk. 10.00 crore has been made to disburse credit under the above programme during the current year.

2.12 OTHER BANKING ACTIVITIES:

74 branches of our bank are engaged in works relating to the payment of portion of salaries afforded by the government to the teachers and employees of registered non-government educational institutions including teachers of non-government educational institutional, 98 branches relating to the payment of scholarship and stipends to the girl students at primary and secondary levels and 69 branches relating to the payment of stipends to the girl students at primary and higher secondary level. In addition to those, almost all the branches of Rupali Bank are engaged in work relating to the payment of pension bill to the retired government, civil and military personnel and the receipt of utility bills such as PDB, DESA, REB, WASA, GAS & Telephone etc. including other service-related work of the government (such as receipt of Municipal Tax and Land Development Tax, purchase and sale of Prize Bonds, receipt of Hajj money etc).

2.13 HUMAN RESOURCES:

As compared to the preceding year the number of manpower has increased by 260 during the year 2009 in question. As on 31-12-2009 the total number of manpower has stood at4529 with 3148 officers and 1381 members of staff. During the year in question, 377 employees are on LPR, 10 employees have resigned, 356 persons have newly joined in the post-officer, 168 have joined in the post-officer (cash), 118 persons have joined in the post- senior officer, 1 (one) person has joined in the post- Programmer (PO) and $ persons have joined in the post- System Analysis (SPO). That means, in total, 647 persons have joined as officer in various posts.

2.14 LEGAL ACTIVITIES:

As regards the recovery of default loans, the number of the suits such as original suits under trial, execution suits, appeal/ others and suits in Bankruptcy Court field by the Bank stood at 4570 with an involvement of Tk. 1603.29 crore. The number of the suits in which the certificates issued for possession and enjoyment of the mortgaged property by the court is 501 involving Tk. 82.03 crore; the suits field against the bank were 156 involving Tk. 327.93 crore; the IRO suits 110; the suits disposed of 294 involving Tk. 222.28 crore. The suits newly filed 42 involving Tk. 89.18 crore and the recovery through suits amounts to Tk. 222.28 crore. The number of lawyers conducting the suits in Dhaka Metropolitan area is 110 and in other areas 236. Besides these, the number of writs arising from Artha Rin Adalat Act, 2003 pending for disposal is 304 at the end of the year in question.

2.15 RUPALI BANK TRAINING INSTITUTE:

Since 2009, as many as 602 officers were imparted training by Rupali Bank Training Institute through 24 courses/ workshops including 10 foundation courses to the newly joined probationary officers throughout the month and the course relating to Fake Note Detection, BACH program, Money Laundering Prevention Act, Core Risk, Foreign Exchange and Computer. As many as 105 trainees have participated in 43 courses in BIBM. In addition to this, 18 trainees took part in 12 courses conducted by Bangladesh Bank and other institutions outside.

2.16 COMPUTER OPERATION AND APPLICATION OF INFORMATION TECHNOLOGY:

Extensive activities on computer technology and their implementation have been undertaken by this bank during the year in question. Till 2009, the number of computerized branches stood at 145. The work relating to change of old computers in previously computerized 31 branches is in progress. Remittance and EFT System have been modernized and arrangement for Money Transfer through Western Union in 71 branches has been made operative. On-line Banking with foreign Exchange Branches at Dhaka and Agrabad Branch of Chittagong has been introduced. The vendor institution has started preliminary activities to introduce On-Line banking operation on test basis in 10 more branches of the bank. The information of 25 Divisions of Head Office are being publicized through Bank’s own website (www.rupalibank.org). In order to expedite the flow of information 10 Internet of 64 kbps (shared line) and 10 Internet line of 256 kbps (dedicated line) have been installed in Head Office. The supply and installation of necessary hardware and software including communication link with Bangladesh Bank have been made. SIT (System Integrity Test) with Bangladesh Bank is in completion and prepared to operate in live at any time as per instruction of Bangladesh bank.

2.17 CORPORATE SOCIAL RESPONSIBILITY:

Rupali Bank Limited (RBL) has been rending various services for attaining greater social goals and objectives. In this process, we aim to the development of the society as a whole and fulfillment of corporate social obligation in particular. To reinforce CSR activities, the bank has undertaken fresh initiatives in  line with Bangladesh Bank guidelines in the areas of social service, empowerment of poor, sports & culture, banking for the disadvantaged group, disaster & relief activities.

2.18 SOCIAL SERVICES:

RBL has been rendering social services as per laid down guidelines of the Government. The bank has been disbursing pension of Govt. employees, monthly salary of teachers, govt. and semi govt. officials without charges.

2.19 EMPOWERMENT OF POOR:

RBL has been providing wholesale credit facilities to different micro credit institution who are in turn lending amongst the poor people in different Income Generating Activities (IGA).

2.20 BANKING SERVICE FOR THE DISADVANTAGED GROUPS:

With 492 branches all over Bangladesh RBL could reach the banking services to the disadvantaged group with the aim to encourage them mobilization of their hard earned saving and creation of investment opportunities for them.

2.21 DISASTER RELIEF:

Rupali Bank Ltd always beside the helpless people at the times of natural calamities and extends helping hands to the sufferers. RBL donated Tk. 15.00 Lac to help the victims of cyclone ‘Ayla’ to the relief fund of the Prime Minister.

2.22 GEOGRAPHICAL LOCATION WISE SEGMENTS REPORT

PARTICULARS

For the year ended December 31, 2009

Branches of the Banking entity and Operations in line         with Geographical Segments

DhakaChittagongKhulnaRajshahiSylhetBarisalTotal
No. Of Branch141112531114035492
Interest Income on Loans & Advances118.9311.8144.9765.9132.2923.97497.85
Interest Paid on deposits & Borrowings150.871.9824.339.7818.1718.87323.88
Net Interest Income-31.9139.8320.6726.1514.125.1173.97
Investment Income155.9155.9
Commission, Exchange & Brokerage19.0915.396.627.4510.7210.9270.19
Other Operating Income0.140.110.020.020.29
Total Operating income143.23155.3327.3133.6224.8416.02400.35
Allocated Expenses65.2452.2920.6628.4314.079.79190.48
Operating Profit (loss)77.99103.046.655.1910.776.23209.87
% of Profit (loss)37.16%49.10%3.17%2.47%5.13%2.97%100%

2.23 SEGMENT REPORT BY NATURE OF OPERATION

Nature Of OperationDecember 31, 2009
 AmountIn %
Operating Income from Banking Operation563.1877.76
Operating Income from Treasury Operation161.0522.24
Total Operating Income724.23100%

3.1 POSITION OF BANK AT A GLANCE FOR THE LAST 5 YEARS

Sl no.

Description

2005

2006

2007

2008

2009

1

Authorized capital

700.00

700.00

700.00

700.00

700.00

2

Paid up Capital

125.00

125.00

125.00

125.00

125.00

3

Share Deposit A/C

35.24

35.24

35.24

35.24

35.24

4

Reserve Fund

91.31

99.41

113.38

315.00

310.00

5

Dormant liabilities to Government of Bangladesh

232.28

232.28

6

Deposits

6687.05

6783.21

7244.61

7028.05

7391.28

7

Advances

4492.07

4570.95

4708.03

4903.00

5234.42

8

Investments

1290.28

1206.82

1409.06

1254.57

1430.30

9

Gross Income

475.87

483.847

490.09

584.97

724.23

10

Gross Expenditure

394.79

458.37

452.93

470.46

514.36

11

Net Profit/ Loss

81.08

25.47

37.16

114.51

209.87

12

Foreign Exchange Business

611.75

696.00

639.88

710.16

752.71

13

Number of Employees

Totl

2165.39

3204

1804

5008

1484.00

3006

1747

4753

1985.67

2749

1681

4430

2070.28

2830

1439

4269

1953.68

 

3148

1381

4529

14

No. of Zonal Office

25

25

25

25

25

15

No. of Corporate Branches

6

7

7

7

7

16

(Including Local Office)

 

17

No. of Foreign Correspondents

No. of Branches

(A)  Domestic

(B)   Overseas

Total

160

492

1

493

160

492

0

492

160

492

0

492

160

492

0

492

160

 

 

492

0

492

18

No. of Share Holders

5023

5199

5358

5396

5150

3.2 CHALLENGE OF THE BANK

  •   Although there was an approved manpower numbering 7809 in different grades, 4529 officers/ staff are working in practice, keeping 3280 manpower deficit.
  •   Among the existing manpower, a large portion of new officers were working at branch level without completing the Foundation Course on banking affairs and among the old officers, a good number of them did not have proper training on various matters such as preparation of loan proposals, opening of L/Cs, operations of Foreign Remittance activities etc. as a consequence of which the banking activities in different divisions were being operated with least capacity/ proficiency.
  •   The activities relating to implementation of BASEL-II and its reporting in accordance with the mandatory instruction of Bangladesh Bank are being hampered due to failure of turning the manpower into efficient one for lack of proper training.
  •   Due to mismanagement in postings and transfers, deficit in manpower existed in some of the branches/ divisions while redundancy of the same was visible in some other branches/ divisions, as a consequence of which equitable distribution of work could not be made possible.
  •   The sphere of business was limited for having a small number of banking products. Procrastination in the approval of the project.
  •   The Bank was being administrated without setting any long term goal because of absence of creative and research-oriented activities and weak marketing system.
  •   There existed such situations as having non-performing loan for a colossal amount, the tangle of the suits piled up for remaining pending over years for realization of loans, a substantial amount of loans and advances had been made without interest (about Tk. 583.74 crore) and blocked with nominal interest (Tk. 473.14 crore).
  •   There was no nice plan contemplating modern banking and more application of modern information technology.
  •   Procrastination in making decision in all respects is all respects is acting as impediment in attracting new potential customers.
  •   In the absence of any long-term plan on the bank’s overall management framework, the bank sustains a loss in all respects

3.3 FUTURE PLAN

  •   Change of bank’s sign board, holding of motivational meeting with the officers/ staff of all classes, arrangement of discussion meeting zone-wise and topic-wise are mentionable among the measure which the Board has taken in order to develop overall image of the bank, bring about changes in morale and in though and perception of the officers/ staff of all classes and restore confidence among the customers.
  •   To accomplish the process of appointment of 1032 officers/ senior officers on completion of final selection test by August / September, 2010 and thereby the existing manpower crisis will be migrated to a great extent.
  •   To adopt effective measure in realizing the default loans of public and private sectors as well as to dispose of a considerable number of suits through bilateral discussion in order to put an end to accumulated loss as enhance the capital and the management authority has already been empowered for the same.
  •   To take initiative to convert goodwill into Intangible Asset which will be materialized very soon. An initiative has been taken to realize money due from the government.
  •   To introduce more products with a view to increasing loans, deposits and foreign remittances, particularly, introduction of new Product name RMES (Rupali Monthly Earning Scheme) and also carry on activities regarding signing of agreement with BRAC Bank as to use of Eldorado Software in respect of remittance and use of Omnibus Software to render ATM, Pos services etc. under On-Line banking Networking as well as its implementation thereafter which are under process.
  •   To bring 128 branches in 2010 and 364 branches in 2011 under computerization and On-Line Banking for modernization and automation of the bank.
  •  To start activities for constructing multistoried Building in Dhaka, Chittagong, Mymensingh, Sylhet and Comilla with a view to best utilization of the bank’s own properties in more profitable manner.
  •   To launch a number of programs under Corporate Social Responsibilities (CSR) and adopt innovation strategies in respect of marketing including participation in and arrangement of Road Show in order to enhance the image of the bank.
  •   To activate the ineffective AD branches as well as procure the licenses of AD branches for the new potential branches from Bangladesh Bank with a view to expanding foreign exchange transactions.
  •   To arrange for employment to the vast unemployed masses giving top priority to SME sector in loan-giving activities of the bank.
  •   To adopt Rapid Management Review in assessment of accurate volume of manpower together with appointment of efficient and experienced consultants division-wise to boost up the work efficiency in different divisions. An attempt has been made to recast the present framework through a consultant team consisting of 3 members for modernization of the overall framework of the bank.
  •   To impart improved training to about 1000 officers in a year on banking Foundation Course, SME and Foreign Exchange and arrange posting of them as well as arrange for more accordance with the instruction of Bangladesh Bank aiming at human resources development through augmenting the work efficiency and inspiration of the employees. We are grateful for assistance of the various institutions including BIBM, Bangladesh Krishi Bank, BRAC Bank, Standard Chartered Bank, PINNACLE Executive Training Institute in this regard.
  •   To endeavor to develop comprehensive database on the overall activities of the bank including introduction of MIS system centrally in order to facilitate quick procurement and supply of information to the need of the higher authority.
  •   To develop a Social Banking for the amelioration of the particular vast masses through intensive monitoring, co-operation and partnership arrangement with other non-government banks and NGOs.
  •   Bangladesh Bank has already accorded its approval to form a subsidiary company for introducing Merchant Banking activities.
  •   Basic changes are needed in overall management in respect of procurement of deposit as well as disbursement and recovery of loans. For this purpose, evaluation activities will be introduced by determining goal and expectation at all stages.

3.4 COMMON-SIZE STATEMENT (BALANCE SHEET)

PROPERTY AND ASSETS

TAKA

%

Cash5,286,406,8326.0361
Cash in hand (Including Foreign Currencies)1,370,642,1121.5650
Balance with Bangladesh bank & Sonali Bank

(including Foreign currencies)

3,915,764,720404711
Balance With Other Bank’s & Financial Institutions4,182,145.0048
In  Bangladesh
Outside Bangladesh4,182,145.0048
Money at Call on Short Notice5,554,100,0006.3417
Investments14,303,004,40416.3313
Government13,633,834,44915.5673
Others669,169,955.7641
Loan & advances52,344,171,19059.7672
Loans, cash Credits, Overdrafts etc.50,078,178,04657.1799
Bill discounted and Purchased2,265,993,1442.5873
Premises and Fixed Assets2,332,537,9802.6633
Other Assets7,755,650,0328.8555
Non-Banking Assets
Total Assets87,580,052,583100
Capital & Liabilities  
Liabilities  
Borrowing from other banks and financial Institutions and agents16,468,821.0177
Deposits and Other accounts  
Current Deposit and other accounts19,042,377,93320.4401
Savings deposits29,450,363,67031.6121
Fixed deposits24,496,404,55226.2944
Bills Payable923,634,239.9914
Other Liabilities19,232,576,34420.6443
Total Liabilities93,161,825,559100
Capital & Share holders Equity  
Paid up Capital1,250,000,0001.4273
Share Money Deposit74,953,800.08558
Reserve against Receipts of net asset value of Karachi Branch335,562,500.3831
Statutory reserve1,250,231,0611.4275
Other reserves3,594,213,8934.1039
Balance of Profit and Loss Account(12,086,734,230) 
Total shareholders Equity(5,581,772,976) 
Total Liabilities & Share holders equity87,580,052,583100

4.1 GENERAL BANKING:

It is most important side of the bank. Bank is nothing but a middleman between lenders (surplus unit) and borrowers (deficit unit). To provide loan, a bank needs a huge amount of money from the depositors. General banking is the side where banks offer different alternatives to the clients to deposit and remit their money. To encourage the clients, bank offers different options in front of their clients. Most of these options are very much similar between the banks, but the customer services and facilities may not be the same. Every Branch of Every Bank has to maintain the General Banking department. It takes Care of lot of important banking activities mainly collecting the deposits from customers. Rupali Bank Limited, Local Office gas all the required sections of General Banking.

I worked there from 10/05/2010 to 10/08/2010. I not only learnt the practical activity but also helped them to perform their daily affairs.

The Local Office is equipped with the following sections of general banking:

  • Account Opening
  • Clearing
  • Remittance
  • Others

4.2 Account Opening Section:

The relationship between the banker and the customer begins with the opening of an account by the customer. Initially all the accounts are opened with a deposit money by the customer and hence these accounts are called deposit account. Usually a person needs to open an account to take services from it. Without opening an account, one can get only a few services from the bank. So the banking begins actually by the opening of an account with a bank.

Formalities maintained for Opening an account:

 Application on the Prescribed  Form

The person willing to open a current account with the bank has to make application in the prescribed form. This form must be properly filled up and signed by the applicants.

Introduction to the Applicant

The applicant also required to furnish in the application form the names of the referees from whom the banker may make inquires regarding the character, integrity and respectability of the applicants. In most cases the introduction is done by the customer of the bank or some other person knows to the bank by signing on the application form with his/ her account number (if any).

Specimen signature

Every customer is required to supply to his banker with one or more specimens of his/ her signature. These signatures are taken on cards, which are preserved by the banker, and his signature of the account holder on the cheques is compared with the Specimen signatures.

Opening and operating the account

After the above formalities are over, the banker opens an account in the name of applicant. Generally the minimum amount to be deposited initially is tk 1000/- for opening a current account. Then the bank provides the customer with:

A pay slip/ deposit book

With a view of facilitate the receipt of credit items paid in by a customer, the bank will provide him/ her pay in slip either loose or in a book forms. The customer has to fill up the pay in slip at the time of depositing the money with the bank. The cashier with his/ her initial and stamps will return the counter foil to the customer on the receipt of the money.

Cheque Book

To facilitate withdrawals and payments to their parties by the customer, the bank will also provide a cheque book to the customer. But it is noted that to get a cheque book, the customer has to dully fill up the cheque requisition slip to the banker.

Formalities maintained for closing an account

The customer may inform the bank in writing of his/ her intension to close the account.

  The customer has to apply to the branch in charge for closing the account. Then the in charge will remark on the account closing application for closing the account.

  By drawing a cheque of the whole amount and a nil balance confirmation to be taken from the account holder.

  Recover the unused cheque leaves and enter into the “Broken cheque book register”

  Remove the account opening form, specimen signature card and all other papers relating to the closed account.

  Remarks of account closing at the ledger folio should be authenticated by the manage or supervising officials.

  The banker may itself ask the customer to close the account when the banker finds that the account is not been operated for a long lime.

  It the account is not operated upon for 6 months then the banker will try to do the bilateral communication with the account holder. But if the banker does not get any response from the account holder then the account becomes “dormant” account.

  If the is not the operated upon for 2 years then the account becomes “inoperative” account.

  A new register for unclaimed deposit account will be maintained called “unclaimed deposit account”.

  For withdrawal at any amount from that account, permission from head office or controlling office wins is required.

Generally, there are three types of accounts in our country’s banking system.

  1. Current account or Demand Deposit (CD Account)
  2. Savings Deposit (SB Account)
  3. Fixed or Time Deposit (FDR)
  4. Other Types of Deposit

1.Current Account

Current account is purely demand deposit account because the bank is bound to pay the amount to the account holder on demand at any time. It is running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number and the amount of withdrawals from a current account. The special characteristics of a current account are as follows:

  The primary objective of  is to serve big customers such as businessmen, joint stock companies, private limited companies, public limited companies etc. from the risk of handling cash by themselves.

  The cost of providing current account facilities is considerable to the bank since they undertake to make payments and collects the bills, drafts, cheques for any number of times in a particular day. The bank therefore does not pay any interest on current deposit while on the other hand some banks charge for incidental charges on such account.

  For opening of a current account minimum deposit of taka 1000/= is required. Introductory reference is also required for opening of such account.

Documentations

Proprietorship

    • Up-to-date copy of trade license
    • Introducer of a CD account holder
    • Two copies of passport size photographs of account holder
    • Seal
    • TIN
    • VAT certificate

B. Partnership

    • Up-to-date copy of trade license
    • Introducer of a CD account holder
    • Two copies of passport size photographs of account holder
    • Photocopy of partnership Deed, notarized by Notary Public
    • Account agreement (MF-06) and letter of partnership (MF-07)
    • Seal
    • TIN
    • VAT certificate

     C. Private Limited Company

    • Up-to-date copy of trade license
    • Two copies of passport size photographs of account holder
  • Certified copy of Memorandum and Articles of Association signed and sealed by the managing Director.
  • Photocopy of the certified of Incorporation
  • List of directors as per return of joint stock company with signature
  • Seal of each operating persons
  • Particulars of Directors
  • Resolution for opening account with the bank

     D. Public Limited Company

  • Up-to-date copy of trade license
  • Two copies of passport size photographs of account holder
  • Certified copy of Memorandum and Articles of Association signed and sealed by the managing Director.
  • Photocopy of the certified of Incorporation
  • Seal of each operating persons
  • Particulars of Directors
  • Resolution for opening account with the bank
  • Certificate of commencement of business
  • List of directors as per return of joint stock Company with signature.

      E. Societies, clubs, Associations etc

  • Up-to-date copy of trade license
  • Registration from the concerned authority
  • By laws/ rules and regulations duly signed and sealed by chairman
  • Resolution for opening account with the bank
  • Introducer of a CD account holder
  • Seal of each operating persons

2. Fixed Deposit Receipts (FDR)

These are the deposits, which are made with the bank for fixed period specified in advance. It is purely a time deposit account. The bank doesn’t maintain cash reserves against these deposits and therefore the bank offers higher rates of interest on such deposits. At present the rate of interest for fixed deposit Receipt (FDR) in the Rupali Bank Limited is 6.5%

3. Savings Account

A savings account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future need and intend to earn an income from their savings. It aims to encouraging savings of non trading persons, institutions, society and clubs etc. by depositing small amount of money in the bank. Both the elements of time and demand deposit are present in this account.

Documentations:

  • Two copies of passport size photographs of account holder
  • Photograph of the nominee
  • Introducers reference
  • Employer certificate

4. Other types of Deposit Accounts

(a) Short term deposit

It is also a time deposit account. The formalities for opening of this account are to those required for current account. The only difference is that 7 days notice is inquired for withdrawal of any sum and interest is paid.

(b)Savings schemes

To attract depositors and encourage saving Rupali Bank Limited introduced various schemes.

Monthly Savings Scheme

Objectives

  •   Building the habit of savings
  •   Attract small savers
  •   Saving for rainy days
  •   Ensure regular income flow

Mode

  •   Monthly installments of various sizes for a Fixed deposit

Benefits

Lump sum returns after various terms of period

  •   Monthly Benefit Scheme

Objectives

  •   Help the retired persons for investing their retirement benefits
  •   Create investment opportunities for non resident Bangladeshi
  •   Explore investment opportunities for school, college, university etc

Mode

  •   Deposit a fixed amount of money, say tk. 50000 or it’s multiply for five years.

Benefits

  •   A fixed amount of money in every month for five years
  •   Double deposit scheme

Objectives

  •   Gives maximum profit
  •   Help in meeting specific needs like education, marriage etc

Mode

  •   Deposit a fixed amount of money, say tk. 50000 or it’s multiply for 7 years

Benefits

  •   After seven years deposited amount will be double.

Payment of RDS

Monthly PaymentAmount Received after 05yearsAmount Received after 10years
Principal amountInterestPrincipal         + InterestPrincipal amountInterestPrincipal         + Interest

500/-

30,000/-

5773/-

35,773/-

60,000/-

25,860/-

85,860/-

1000/-

60,000/-

11,547/-

71,547/-

1,20,000/-

51,721/-

1,71,721/-

1500/-

90,000/-

17,321/-

1,07,321/-

1,80,000/-

77,582/-

2,57,582/-

2000/-

1,20,000/-

23,095/-

1,43,095/-

2,40,000/-

1,03,442/-

3,43,442/-

3000/-

1,80,000/-

34,642/-

2,14,642/-

3,60,000/-

1,55,164/-

5,15,164/-

5000/-

3,00,000/-

57,738/-

3,57,738/-

6,00,000/-

2,58,607/-

8,58,607/-

4.3 Clearing House:

Clearing house is an assembly of the locally operating scheduled banks for exchange of cheques, drafts, pay orders and other demand instruments drawn on each other and received from their respective customers for collection. The house meets at the appointed hour on all working days under the supervision of two central bank officers or its agent as the case may be, and works within the regulations framed therefore on the basis of prevailing banking practices. In Bangladesh, clearing house sites at Bangladesh Bank where there is no office of the Bangladesh Bank, sonali Bank acts as agent of Bangladesh Bank.

There are mainly two types of banking systems Bangladesh, such as:

  • Internal clearing or inter branch clearing or inward clearing
  • External clearing or inter banks clearing or outward clearing.

4.4 Other Parts of General Banking

Crossing

Crossing cheque is written across the face of the cheque within two parallel lines. This practice becomes common even outside of clearing house, as an element of safety.

Normally two types of cheque used in bank. Such as:

I.      Open cheque: A cheque, which capable of being paid over the counter in cash is known as open cheque.

II.      Crossed cheque: A cheque, which can only paid to the banker for crediting the proceeds to the amount of its payee.

Purpose of crossing

I.      To avoid possible loss that may occur by open cheques getting into the hand of wrong parties.

II.      Crossing is a direction to the paying bank to pay the money generally to a bank or a particular bank, so that

III.      It can be easily traced out for whose use the money was received.

Forms of crossing

I.      General crossing

II.      Not negotiable

III.      And company and co.

IV.      Not transferable

V.      Special crossing

Endorsement

An endorsement is the mode of negotiating, a negotiable instrument. According to the section 15 of the Negotiation Instruments Act, 1881, an endorsement is “when the maker or holder of a negotiable instrument sign the same, otherwise then as such maker, for the purpose of negotiation, on the back of face thereof or on a slip of paper annexed there to……he is said to endorse the same and is called the endorser.”

Dispatch

Dispatch includes all correspondence, letter, statements and returns and telegrams. This dispatch is also known as Mail. Dispatch is primarily divided into two categories:

 I.      Inward: It means what are receives from the outside.

II.      Outward: It means what are sent to the outside.

This dispatch also divided into:-

(a)    Ordinary.

(b)   Registered and

(c)    Local.

Every correspondence should have an office copy and one additional copy is also retained in the Master file of the office.

4.5 INTEREST RATES:

SL No.

Types of Deposit

Interest Rate per annum

1.

Savings Deposit

4.50%

2.

Short Notice Deposit

3.50%

3.

Time Deposits
 

a)

3 months & above but less than 6 months

b)

6 months & above but less than 1 year

c)

1 year & above but less than 2 years

d)

2 years & above but less than 3 years

7.50%

7.75%

8.00%

8.50%

4.

Deposit From foreign Remittance

6.00%

5.

Rupali Bank Deposit Pension-Scheme 2

6.50%

5.1 TYPES OF LOAN AND ADVANCES:

The bank’s Loans & Advances portfolio also indicates an impressive growth. The growth rate of RBL, June 2010 is

Mainly two types of Loans

I.      Funded (Demand or consumer loan)          II.      Non funded (L/C, Bank Guarantee, Tender etc.)

A lot of types of Funded Loans and Advances are available in The Branch of the Rupali Bank.

  1. Cash Credit Hypothecation
  2. Over Draft
  3. Term Loan

a)      More than 5 years

b)      Less than 5 years

c)      With in 1 year

  1. Demand Loan

a)      Loan against DPS.

b)      Loan against other security

c)      Loan against consumer credit.

d)     Staff loan (PO)

  1. Bank Guarantee
  2. Floor loan
  3. PC (Packing Credit)
  4. Export development fund (EDF)
  5. Letter of Credit
  6. Payment against documents (Import & Export)
  7. LATR (loan against trust received)
  8. HouseBuilding

a)      Commercial

b)      General

c)      Staff

  1. Lease Finance

5.2 Loan Sanction for the Client

Process is following

  • Application for by Client in rough format than built-in format
  • Received
  • Verification (Normal than physical)
  • For heavy Loan, Branch has to submit CIB and Proposal to Head Office and Bangladesh Bank for permission
  • Approved loan application/ Reject the proposal
  • Collect security
  • Give new account and permission to withdraw the loan money.

5.3 Loans & Advances is permitted on the Basis of-

1.Lien

2.Mortgage

1. LIEN:

Lien is permitted against the Following

  • DPS= Deposit Pension Scheme
  • FDR= Fixed Deposit Receipt
  • PSE= Protirakha Sanchoy Patra

Lien (VALUE) must be higher than the value of Loans. 80% of Lien documents (VALUE) is permitted for the Loans & Advances. The position of Lien Documents must be under the hand of Bank.

Here, Interest Rate of Loans: 14%

2. Mortgage:

  • Land
  • Building
  • Shop

Mortgage value must be higher than the value of Loans. 50% of Mortgage Documents (value) is permitted for the Loans & Advances. The position of Mortgage Documents need not to be under the hand of Bank only legal papers are necessary to be under the hand of Bank.

Here, Interest Rate of Loans: 13%

To get Loans & Advance for the individual client against DPS (Deposit Pension Scheme), FDR (Fixed Deposit Receipt), MBDR (Monthly Benefit Deposit Receipt), DBDR (Double Benefit Deposit Receipt), PSP (Protirakha Sanchoy Patra) etc in favor 3rd party the papers followings are needed-

  • Letter of Agreement
  • Letter of Authority
  • Demand Promissory Note
  • Balance Confirmation Slip
  • Letter of Lien and authority for advances of third party’s against Fixed Deposits/ Call Deposits/ Special Deposits or Margin Deposits
  • Letter of Continuity
  • Memorandum of Deposit of Securities

6.1 FORGIN EXCHANGE

In any international trade the buyers and sellers are of different countries. None of them know each other nor about their business integrity and credit worthiness. Various regulations prevailing in their respective countries about foreign trade are also unknown to them. Thus, the buyer wants to be assured of goods and the seller to be assured of payment. In such a situation commercial Banks assure these things simultaneously by opening Letter of Credit guaranteeing payment to seller and goods to buyers. By opening Letter of Credit on behalf of a buyer and in favor of a seller, Commercial banks undertake to made payment to a seller subject to submission of documents drawn in strict compliance with the terms of the Letter of Credit giving title to goods to the buyer.

International trade constitutes the main stream of business activities of Rupali Bank Limited. We offer a full range of finance and services namely, issue, advice and conformation of documentary credit; offering and arranging forward exchange rate, pre shipment and post-shipment finance, negotiation and purchase of export bills, discounting bill of exchange, collection of bills, inward and outward remittance etc.

I worked there from 18.07.2010 to 02.08.2010. I have learned the activities of foreign exchange department and help them to perform their daily affairs. I have observed the followings———–

Main task of the department-

  1. Import Business
  2. Export Business
  3. Foreign Correspondents

Functions of Foreign Exchange

  •   Letter of Credit (L/C) is opened here.
  •   Foreign Pay Order
  •   Prepare statement and report for Head Office and Bangladesh Bank.
  •   Exchange foreign currency
  •   Payment and collection of L/C money in favor of Client.

Letter of Credit

Documentary letter of credit is an arrangement whereby a bank acting at the request and in accordance with the instructions of a customer is to make payment to or to the order of a beneficiary or is to pay accept or negotiate bills exchange drawn by the beneficiary against stipulated  documents and compliance with stipulated terms and conditions.

The form of the Letter Of Credit varies from Bank to Bank. All the parties to a Letter of Credit must have the same understanding about the terms and conditions used in the credit. The international Chamber of Commerce has formulated the “Uniform Customs and Practice for Documentary Credits” to avoid the scope for ambiguities and differences in interpretation of terms of the credit.

Types of L/C

There are two type of L/C, which is-

  1.  Master L/C
  2. Back to Back L/C

Master L/C is two types-

  1. Import L/C to import any goods, the client has to open a foreign or local import L/C. Bank charges some commission for opening L/c.
  2. Export L/C- Bank receive some foreign L/C for exporting goods in favor of client. Bank collect money for the client.

Back to Back L/C- To cover a master L/C (Export), some time Back to Back L/C is needed. Two types-

  1. Local- Collect goods from inland
  2. Foreign- Collect goods from foreign country.

Documents required for opening L/C:

If any importer want to import something which are legal, and he has all importer documents (IRN, TIN,  VAT and CURREN A/C), then he go to the bank to open L/C to import, if Bank want to open L/C, then the importer must follow the conditions:

  •   Request letter to open L/C
  •   Proforma invoice or indent (accepted by the importer)
  •   LCAF (letter of credit authorization form)
  •   IMP (import) form
  •   Insurance cover note.

Request letter

Importer writes a request letter to the bank to open a L/C

Proforma invoice

The beneficiary gave this document, and the importer accepted that, in this document have the rate of the goods, total amount, and quantity of the goods which quantity was import, the quantity was fixed in this invoice because before given this document to the importer they are negotiate between them.

LCAF

Means Letter of Credit authorization form, In this Form importer must signed and in this form importer IRC number must have.

IMP form

This form was use because every end of month bank submits some statement to the Bangladesh Bank, and the statement was given in this form. This form importer must sign.

Insurance cover note:

Before opening L/C importer must submit the insurance cover note with cash money receipt to the bank, without insurance cover note, bank can not open any L/C.

6.2 REMITTANCE:

Sending money from one place to other places for the customer’s in another important service of banks and this service is an important part of countries payment system. For this service, people specially businessmen transfer funds from one place to another very quickly. There are various types of remitting money, such as:

1.Pay Order (PO)

The pay order is used for making a remittance to the local creditor. Pay Order gives the payee the right to claim payment from the issuing bank. It can be en-cashed from issuing bank only. Unlike cheque, there is no possibility of dishonoring pay order because before issuing pay order bank takes out the money of the pay order in advance. Pay Order can not be endorsed or crossed and so it is not negotiable instrument.

2.Demand Draft (DD)

Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to the payee on demand that is the named person or order of the demand. It is generally issued when customer wants to remit money in any place, which is out side of the clearing-house area of issuing branch. Payee can be purchaser himself or another mentioned in the DD. It is a negotiable instrument and it can be crossed or not.

3.Telegraphic or Telephonic Transfer (TT)

This method transfers money to one place to another place by telegraphic message. The sender branch will request another branch to pay required money to the required payee on demand. Generally for such kind of transfer payee should have account with the paying bank. Otherwise it is very difficult for the paying bank to recognize the exact payee.

When sending money is urgent then the bank uses telephone for remittance. This service is only provided for valued customers, who is very reliable and with which banks have long standing relationship.

4. Mail Transfer Advice (MTA)

Where the remitter desires the banker to remit the funds to the payee instead of purchasing a draft himself the banker does it through a mail transfer advice. The payee must have an account with the paying office as the amount remitted in such a manner is meant for credit to the payee’s account and not for cash payment. It is the least used technique for transferring fund. Where there is no telex machine or telephone line then this method is used.

7.1 CREDIT FACILITIES:

General Credit Line and Programme

  • Rupali Bank Ltd. extends credit facility to almost every sector of the country’s economic activities.
  • Main focus of Rupali Bank Credit programme is on financing trade and commerce, business and industry having productive purpose.
  • Credit facilities are also offered to international trade and business, export and import.
  • Credit Programme of the Bank also covers development of rural economic activities like agriculture and livestock, diary and poultry, fishing and hatchery etc.
  • Loan is provided to thrust sectors declared by the government at a concessional terms.
  • Lending programmes are operated as per guideline of Bangladesh Bank (the central bank of the country) through an effective lending policy and procedure of the Bank.
  • Lending policy of the Bank ensures quick processing, sanctioning and disbursement of loan in all viable sectors.

7.2 Rural credit program:

Bangladesh is mainly a land of agriculture. A vast majority of our people lives in the rural areas and their main source of income is agriculture and agro-business. To produce agricultural output, promote agro-business, facilitate agro-based services, create and sustain employment opportunities, Rupali Bank Ltd. is disbursing agricultural loan/rural credit through its 401 branches all over the country. :: Sectors of Financing:: Rupali Bank Ltd. extends credit to the following rural sectors:

1.Fishery.
2.Livestock.
3.Shrimp Culture.
4.Poverty Alleviation Programme.
5.Micro-credit.
6.Agricultural product processing and marketing.

7.3 INVESTMENT BANKING

Rupali Bank Ltd. presently roaming in the following areas of investment:.

i)    Bangladesh Government Securities/Bonds.

ii)   Treasury Bills.

iii)  Grameen Bank Bonds.

iv)   Debentures of government and semi-government organizations & Public Limited Companies.

v)    Shares of listed companies.

7.4 INDUSTRIAL FINANCING:

In order to support the development of industrial sector of the country through active participation of private and direct foreign investment, Rupali bank Ltd. has taken appropriate programmes as per Industrial Policy of the Government. The loan portfolio of the Bank includes sizeable investment of fund towards development of thrust industrial sectors like Textile, Jute, Leather, Leather goods, Frozen and semi cooked Shrimps, Footwear, Knit Garments and other small and medium enterprises.

Rupali Bank Ltd. is participating in joint venture finance and consortium finance for setting up large-scale projects. The Bank lays special emphasis on agro-based and IT related industries.

7.5 UTILITY SERVICES:

Rupali Bank Ltd. offers some special services to customers in addition to its normal banking operation. Collection of various utility bills is one of them. Under this service, the Bank benefited Customer by collecting their various utility bills like Telephone bill, Water & Sewerage bill, Electricity bill etc free of charges.

Collection of Bills:

1. Telephone bill of Bangladesh Telephone & Telegraph Board (BTTB).

2. Water & Sewerage bill of Water and Sewerage Authority (WASA).

3. Electricity bill of Power Development Board (PDB),

4.  Rural Electrification Board (REB) etc.

8.1 RISK MANAGEMENT

The risk of Rupali Bank Limited have been defined as the possibility of losses, financial or otherwise. The risk Management of the bank covers 5 (five) crore Risk Areas of Banking i.e; Credit Risk Management, Foreign exchange Risk Management, asset liability Management, Prevention of Money Laundering and establishment of  Internal control and compliance. The prime objective of the risk management is that the bank takes well calculative business risks while safe guarding the Banks capital, its financial resources and profitability from various risks. In this context, the bank has implemented various steps as per the guidelines of Bangladesh bank.

8.2 CREDIT RISK MANAGEMENT

Credit Risk is one of the prime risks of the Bank. It indicates the potential loss arising from contractual failure of the borrower with the Bank. The failure may be resulted from unwillingness of the borrower or due to decline of the financial conditions. Therefore, Bank’s Credit Risk Management activities have been designed to address all these issues.

On the basis of Bangladesh Bank’s Credit Risk Management (CRM) policies, Rupali Bank has formulated a Manual of Credit Risk Management policies which have been approved by Bank’s Board of Directors already in force. These help to bring the credit operation of the Bank to the level of international standard.

The organizational structure of Bank’s Head Office has been designed in line with CRM guidelines. The duties of the officers/ executives, working in credit areas, have been segregated for smooth functioning. Credit approval administration, monitoring and recovery function function have segregated and functioning accordingly. Credit risk Management activities ensure maintaining asset quality, assessing risks in lending to particular customer, sanctioning credit, formulating policy/ strategy for lending operation, etc.

QUALITATIVE DISCLOSURE REGARDING CREDIT RISK:

Credit risk is the risk of Financial Loss. If a customer or counterparty fails to meet his payment obligation under a contract. RBL has standards, policies, and procedures dedicated to controlling and monitoring credit risk.

The standardized approach is applied for risk weighting of exposure as per directive of Bangladesh bank. It requires bank’s to use risk assessments prepared by External Credit Assessment Institutions (ECAIs) to determine the risk weightings applied to rated counterparties. RBL has taken step for rating of its exposures.

RBL’s credit policy is based on the customer’s need to operating business and also on security, earning capacity of recipient, the business repayment ability to mitigate, and follows conservative approach in valuation of collateral. The principal collateral types are as follows:

Lien of financial Instruments, Mortgage over immovable properties, Charges over business assets such  as stock and debtors.

Special attention is given to problem loans and appropriate action is initiated to protect the Bank’s interest on a timely basis. The objective of credit risk management is to minimize the probable losses and analysis to maintain credit risk exposure within acceptable limits.

Bank also looks after Loan Review Mechanism and also helps in ensuring credit compliance with the post sanction/ procedure laid down by the Bank from time to time. Maximum counterparty/ group exposure are limited to the extent of maximum ceiling of the Bank’s capital based as stipulated by Bangladesh Bank.

Past dues and impaired exposures are defined in accordance with the relevant Bangladesh Bank regulation

8.3 FOREIGN EXCHANGE RISK MANAGEMENT:

The risk of foreign exchange transaction has been streamlined to earn a potential gain through the Treasury Department i.e. Fund Management Division which is run by a group of structured manpower. Although the global economic scenario was very much alarming because of the crises in all economic phenomena, still the bank has faced it prudently leading to higher profit compared with the previous record of the bank. It has become possible by Treasury Department through optimum use of open position limit fixed by Bangladesh Bank with a view to generating maximum revenue.

There is active participation in inter bank exchange market, the foreign exchange risk of the Bank is minimal as majority of the transaction are carried out on behalf of the customer’s requirement of various trade finance & remittance activities. The bank did not conduct any speculative deal in foreign currency for the year. To minimize any potential loss arising from currency fluctuation, the Bank does not conduct cross currency activates to consolidate its currency position into a single foreign currency by converting its inflow of various currencies due to customer’s export activities and remittances from abroad.

In compliance with the Bangladesh bank Guidelines, Rupali Bank Ltd. Has prepared Foreign Exchange Risk Management Manual covering the Foreign Exchange Risk and Policy related with Foreign Exchange dealings. As per terms and conditions of the Manual Treasury Front Office and Mid Office have been established under separate management.

8.4 BASEL-2 IMPLEMENTATION

Rupali Bank has arranged a good number of workshops on BASEL-2. The BASEL committee on banking supervision has issued a proposal relating to banking laws and policies. The aim of BASEL-2 is to maintain an international standard in formulating the policy of the banking control and assess how much capital is required to be kept in reserve in order to face financial and operational risks encountered by the banks. The seconders of BASEL-2 believe that such a policy of an international standard may help stave off the collapse of any large bank or a great many banks in multifarious problems of international financial system. In fact, BASEL-2 endeavors to accomplish this by determining necessary matters of high risk and capital management.

DISCLOSURE UNDER BASEL-2

The following detailed qualitative disclosure are provided in accordance with Bangladesh Bank rules and Regulations on risk based capital adequacy under BASEL-2 issued through circular on 31 December 2008 and its revised circular no. 10 dated 10-03-2010 regarding partial modification of Minimum Capital Requirements. The purpose of these requirements is to meet the capital adequacy requirements and the pillar II supervisory review process. These disclosure are intended for stake holders to access key information about the Bank’s espouser to various risks and to provided a consists & understandable framework for easy comparison among peer banks operating in the market. The Bank is following the disclosure requirements set.

The major highlights of the Bangladesh bank regulations are:

  • To maintain capital adequacy ratio (CAR) at a minimum of 8% of risk weighted assets.
  • To adopt the standardized approach for credit risk for implementing BASEL-II
  • To adopt standardized approach for market risk and basis indicator approach for operational risk, and to submit returns to Bangladesh Bank on a quarterly basis.

8.5 ASSET-LIABILITY MANAGEMENT

ASSET AND Liability management is one of key essentials of managing a Bank’s balance sheet efficiently. In line with the ongoing reform and modernization program, Rupali Bank Limited has retooled its ALM to deliver modern, dynamic, vibrant & futuristic process through the adoption of international best recognized practice.

Considering all risk factors Rupali Bank Ltd. Has established an effective ALM process for assigning, analyzing and reviewing various kinds of risk exposures arising from the composition and dynamics of the balance sheet. Asset Liability Committee (ALCOM) of the Bank regularly reviewing these risk exposures and advised for both the opportunities and threats to its liquidity and balance sheet positions as well as positions of maturing assets and liquidity contingency plan. The bank maintained its liquidity at satisfactory level to meet the requirements of all types of customers.

8.6 EARNING PER SHARE:

Basic earnings per share has been calculated in accordance with BAS 33 “Earning Per Share” which has been shown on the face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average number of shares outstanding during the year.

8.7 STATEMENT OF RISK WEIGHTED ASSETS:

PARTICULARSTOTAL ASSET0% RWA20% RWA50% RWA100% RWA

Cash in Hand

137.06

137.06

Cash at Bank

382.19

382.19

FDR

185.41

22.41

163.00

Money at Call on Short notice

370.00

370.00

Foreign Currency balances held

9.80

9.80

Export and other foreign bills

39.44

39.44

Foreign investment

36.33

36.33

Import and Inland Bills

187.17

0.01

187.16

Loan & Advances

5007.82

475.30

22.51

542.95

3967.06

Investment

1393.97

1358.41

9.02

26.54

Inter branch Adjustments

100.95

100.95

Other Assets (net)

907.87

220.32

687.55

Off balance sheet items

672.96

672.96

Total

9430.97

2856.13

194.53

1512.00

4869.31

Total Risk weighted Assets

5663.22

38.91

756.00

4868.31

Required capital

566.32

3.89

75.60

486.83

9.1 Findings:

As a commercial bank and the agent of Bangladesh Bank Rupali Bank to do various types of work without thinking about the profit. For this reason we have seen that in some cases bank has doing loss, but this loss we directly cannot say that bank failing loss this is happening only for helping the nation.

On the other hand we have seen that the bank profit increasing rate is poor but increasing. The bank is highly liquid and earns much profit on owner’s equity. Bank’s operating efficiency is good. EPS is increasing  every year. Earning spread is also increasing.

So after all we can say that as a nationalized bank commercial bank Rupali Bank Limited is a bank earning better.

9.2 Recommendations:

  •   The Top management of Rupali Bank Limited should be more effective to the employee then current situation. Because they should take care the branch level employee’s benefits, opportunities etc.
  •   The bank has highly skilled employee in the branch level. But the bank should be able to utilize these employees at appropriate way to take out the bank’s output.
  •   The website design is need to improve. Therefore, the website should be changed and can put more information about the bank. The existing design cannot capture the customer’s attention.
  •   The cheque’s design is poor. The good looking cheque design can motivate the customer.
  •   The human resource division can be more effective. Because this human resource department should think about the employee benefit much.
  •   In the training institute, the training process should be used latest technology to provide to the trainee. The bank should give training about the office package, basic idea on computer and internet.
  •   The higher management should be more effective about the employee, to take right strategy, right decision making.
  •   In the branch level employee is working so many extra time, so management should provide some extra incentives to motivate the employee.
  •   On-line banking is coming soon so the responsible employee should be trained effectively.
  •   The training evaluation process and form is to be more modernized.
  •  Infrastructure should be modernized.

10. Conclusion:

As a bank Rupali Bank Limited has to do a lot of things for the betterment of the country. The Bank is strongly positioned in the market and with its core strengths it can match shareholders’ expectations and thus raise their wealth in future through ethical banking and best pricing. Thus, it has to take initiative so that it can fulfill the desire of the govt. as well as people. It will enhance more public services and build up working teams to provide the best services to its valuable customers. It must be run in organized way and discipline must be ensured in all sphere of its performance. Efficient export team, import team and remittance team must be formed and perform duties properly. More training, computerization, data collection, market analysis and swiftness in servicing are essentially required. To do these the recommended suggestions can be used. Although it is theoretical suggestions, it is not valueless. It has great impact on the banking business and other sectors of the economy. For this, govt. help is essential and it is expected that govt. will broaden its hand for implementing the recommendations for the welfare of the people of Bangladesh.