The word “Banking” has been defined to mean the accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise, withdraw able by cheque, draft, and order or otherwise. The term “Banker” includes any person acting as a one who has an account with a banker or for whom a banker habitually undertakes to act as such. So account is a contract between a Bank and customer. On the basis of accounts the banker customer relationships build up.
The term banking has also been defined as:
USA: Act of Congress defines Banking “As the Business of dealing in Credit “Japan: Act of 1927 in Japan defines bank as “Institutions, which carry on operations of given as well as receiving credit”
From the above definitions we find three major functions of a Bank-
- Taking Deposit
- Extending Loans & Advances
- Foreign Exchange Business
Deposits are often called the lifeblood of commercial banks. No commercial banks can be thought of without deposits. In fact modern commercial banking starts with deposits from the public followed by lending or financing trade, commerce and trade. Deposits are treated as:
- Deposits as the major source of fund
- Deposit as basis of lending
- Deposit as source of income
- Deposit and credit creation
Under the umbrella of Foreign exchange business there are three main functions as follows:
- Export Business
- Import Business
- Foreign remittance
So in simple words, Banking means taking deposit, extending loan and advances and doing foreign exchange business in order to attain profit & contribute to GDP.
Form the above discussion we can say that Bank as a financial intermediaries collects deposit form surplus areas and provides loans and advances to deficit areas (where needed) and also engaged itself in foreign exchange business, the sum-up of all these activities is known as Banking.
Credit is an arrangement whereby bank acting at the request and on the instructions of a customer or on its own behalf to make a payment to or to the order of a third party or is to accept and pay bills of exchange drawn by the beneficiary. In an economy banks play the role of an intermediary that channels resources from the surplus group to the deficit group. So obviously one of the core functions of Commercial banks is to sanction Credit facility to its customers as per requirement UTTARA BANK LTD. Bank’s Mission is to actively participate in the growth and expansion of our national economy by providing Credit to variable customers in most efficient way of delivery and at a competitive price.
Risk is inherent in all aspects of a commercial operation; however for Banks and financial institutions, credit risk is an essential factor that needs to be managed. Credit risk is the possibility that a borrower or counter party may fail to meet its obligations in accordance with agreed terms. Credit risk, therefore, arises from the bank’s dealings with or lending to corporate, individuals and other banks or financial institutions.
In general, a banking system aggregates a high number of low value deposits to fund enterprises with a smaller number of high value loans. This intermediation through a well functioning bank helps to achieve some economic benefits for the depositors, the borrowers and above all — the economy. The Bank must allocate loans effectively for achieving these broad objectives of the Economy. While identifying profitable enterprises, the Bank in fact identifies risks of the borrower and business in order to allow loan in the context of its risk–return profile. In other words, Banks are in the business of risk taking; as such risk management is viewed as a core function of banking.
Background of the Study:
Business world is becoming very much complex day by day. Without sufficient practical experience business becomes difficult and in some cases impossible. The whole world is moving because of business relation. Business plays a very important role in developing economy of a country. So, in the business world, practical experience is regarded as a media through whom we have an acquaintance with the real world. Through this report an individual can expect to have a good knowledge and understanding on the various methods of operation performed by Uttara Bank Limited particularly in the area of Financial Institutional Services. From the last three months of the bank’s disbursement, everything is tried to include in precise form. I have tried my level best to put more emphasis on the welcome pack and its recovery process. Although, it was not the topic of my internship programs. This report is to be used only for the academic purpose. I have collected all the necessary and relevant data from various primary, secondary and tertiary sources. After eight week long hard labor, it has become possible for me to make the report comprehensive and factual. The data is truly and strictly confidential and no one can use its components in full or partial. I would like to give thanks to everyone who has helped and encouraged me in the process of preparing this report.
I was authorized to prepare a report on Overall Banking Operation of Uttara Bank Limited and performance evaluation of Uttara bank ltd. for partial fulfillment of my course requirement. I went to UBL in “Fakirapul Branch”, where I worked as an intern from 15 June 2011 to 14 September 2011. This report has been prepared based on my practical experience on the day-to-day banking activities and collected information from Bank and under close supervision of my internal guide teacher as well as course teacher Md. Nur Alam Siddik.
Objective of the study:
The general objective of this report is to complete the internship program and submit a report. As per requirement of MBA program of StamfordUniversity, one student needs to work in a business organization for three months to acquire practical knowledge about actual Business operation. The primary purpose of this study report is to get an idea about the “Overall Banking Operation of Uttara Bank Ltd”, a first generation bank of the country and make an industry analysis on the banking sector of Bangladesh
The objectives of the study are as follows:
- To identify the pattern of the different types of schemes, its features and reasons for discontinuation of some lucrative schemes with launching of some new scheme with special features,
- To evaluate the contribution of Scheme deposits in total collection of remittance.
- To evaluate of the total performance in UBL then other bank
The general objective of the report is….
- To know about the management system of Uttara Bank Limited as a largest corporate bank in the country, its formation, and its functional and financial aspects.
- To identify how to deals third bank payment
- To know detail of overall banking system of Uttara Bank Limited
- To know the important criteria required for the attainment of UBL.
- To make a comparison on GB department in Uttara Bank and other private sector Banks.
- To assess the overall performance of the bank’s UBL to other private banks.
- To justify the extent of the use of Finance in UBL system.
To apply theoretical knowledge in the practical field
Rationale of the study:
Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In recent times the banking sector over the world has been undergoing a lot of changes due to deregulation, technological innovation, globalization etc. Bangladesh banking sector is lagging for behind in adopting these changes. To thrive well in this changing environment, not only development of appropriate infrastructure is necessary but also infusion of professionalism in to banking service is essential. The Banking sector is one of the highly regulated sectors in our country. It is governed by the rules and regulation of Central Bank of the country i.e. Bangladesh Bank and Security and Exchange Commission. The bank companies are forced to the best accounting practices. It strictly follows International Accounting Standard (IAS) norms. It publishes the financial statement every year getting it duly audited by recognized audit firms. Every bank of our country has a division named Financial Administration Division (FAD) which takes care of the accounting issues of the Bank. Most of the personnel who lead these divisions are of accounting background. Among the accounting based FAD personnel who know the banking operation better can contribute more in the banks.
Career in Banking has become very lucrative over the last few years considering the work environment and remuneration package. As a student of Accounting, I cherish to be a banker and that is why I had chosen a banking organization for my internship. I chose Uttara Bank Limited because it has a good reputation in the banking community.
It help me a lot to know many banking operations practically which could not be learnt by reading books only. I believe, it will help me to become a banker.
Exploratory research has been conducted for gathering better information that will give a better understanding on various information in GB sector, how to communicate other bank ,how to communicate customer and other bank employee, all are gathering knowledge about this sector of GB . Both primary and secondary sources of data collection procedure have been used in the report. Primary data has been collected mainly through the writer’s observation of the approval process and monitoring techniques, informal interviews of executives, officers and employees of Uttara Bank Limited.
Sources of Data Collection:
To make the Report more meaningful and presentable, two sources of data and information have been used widely such as…
Both primary and secondary data sources were used to generate this report.
The Primary sources are follows:
Primary data are measurements observed and recorded as part of an original study. When the data required for a particular study can be found neither in the internal records of the enterprise, nor in published sources, may it become necessary to collect original data. For the completion of this report, the primary sources of data are-
* Face-to-face conversation with the respective officers and staffs of Uttara Bank and other banks.
* Informal conversation with the clients.
* Practical work exposures from the different desks of the departments of the Branch.
* Study of the relevant files as instructed as instructed by the officers concerned
* Experts’ opinion and comments,
The Secondary sources and data are follows:
The data which has already been collected by others, such data are called Secondary data. For this internship report, the secondary data are collected from the below sources-
* Annual reports of Uttara Bank and other Banks.
* Training materials available at the BIBM library,
* Various books articles, compilations etc. regarding marketing of financial products are informed below:
* Published of different products,
* Office circular and other published papers,
* Website of the UBL; www.Uttarabank.com
Financial statement Analysis:
It expresses the relationship among selected items of financial statement data. I have computed the profitability and solvency ratio of the year 2006 to 2010.As a result changes in the financial relationship and significant trends can be innovated.
Time series Analysis:
The first step in making estimates for the future consists of gathering information from the past data. In this connection, one usually deals with statistical data, which are collected, observed or recorded, at successive is of time. Such data are generally referred as Time Series data.
The paper will be aimed at depicting the various thinking about banking business in Uttara Bank Limited then other bank. The data gathered from both primary and secondary sources has been arranged orderly to get a clear picture of the bank’s various system of banking and the other banks. The study will include both qualitative and quantitative analysis of consumer credit procedures and monitoring tools. Based on the observational information I shall also try to evaluate and analyze the problems involved way of banking system of business.
Series Data for Straight Line Trend:
The straight line trend is represented by the equation-
Yc = a +bX;
Yc =The trend (computed) values to distinguish them from the actual Y values,
a= The Y intercept on the value of the Y variable when X=0,
b= Slope of the line or the amount of change in Y variable.
By using the straight line trend, I have calculated the profit after tax of Uttara Bank Ltd. for year 2010. The time series data for this analysis are given below-
Profit after tax (Million Tk.)
The statistical tool with the help of which we are in a position to estimate (on predict) the unknown value of one variable from known value of another variable is called regression. With help of regression analysis, we are in a position to find out the average probable change in one variable given in a certain amount of change in another.
Data for Regression Analysis:
The second regression analysis is drawn on total amount of scheme deposits, total
number of employees and number of branches. Here-
Amount of scheme deposits = Y; dependent variable,
Number of employees = X1; Independent variable,
Number of branches = X2, Independent variable.
So, the regression equation of Y on X1 and X2 for the regression line will be-
Y = a + b1X1 + b2X2
Y = Total amount of scheme deposits,
a = The intercept (constant),
b1= Slope of line, change in scheme deposits for change in no. of employee,
b2= Slope of line, change in scheme deposits for change in no, of branches,
X1= No. of employees,
X2 = No of branches
Brochures of Uttara Bank Limited.
Uttara Bank Annual Report 2010, 09, 08,07,06.
Terms & Condition Published by Uttara Bank Limited.
Credit Guidelines of Uttara Bank Limited.
Statement of Affairs, Prepared by accounts section.
Guideline for banking system of published by Bangladesh Bank.
Previous Orientation paper.
On Credit Managements in Banks: Published by BIBM
On International Trade & Finance: Published by BIBM
On Banking Theory and Practice: Published by BIB
Limitations of the study:
Since the paper is concerned with the comparison of GB department of Uttara Bank Limited with other private banks, different private commercial bands, such as, Eastern Bank Limited, Unitated Commercial Bank Limited, Dhaka Bank Limited, HSBC, and Bank Asia Ltd are mainly deal to this sector of GB. A lot of information could not obtain because the banks were not interested to disclose their information, policy, and data to maintain their secrecy. I had to depend on the websites of the respective banks for much information.
On the way of my study in Uttara Bank Limited, I have faced the following problems, which may be termed as the limitations of the study. The major limitations of this study are given as follows:
- Deficiencies in data required for the study.
- Field practice varies with the standard practice that also created problem.
- Time provided for conducting the study is another important constraint.
- The employees in Uttara Bank Limited are so much busy in their responsible fields; they could hardly provide little time to discuss with them.
- The total report like “Over all banking and Performance Evaluation of Uttara Bank Limited” is vast and not possible to make it over a night. So it is the hard task to prove all the information on that necessary segment which might make report more resourceful and out standing. I couldn’t prepare the report as the best of my capability because much information could not gathered for the recourses of confidentially. During the Banking hour there were many customers who has to be served time offered per customer was not adequate to ask about their satisfactory and dissatisfactory level in connection with scheme related transactions which might have helped to focus in more detail.
- Management Information Systems is a very wide spectrum. However the branch does not even have a separate MIS division. I could not therefore focus on MIS practices on local banks, as there is not much to deal with.
- In case of performance analysis secondary data are used.
- There were some restrictions to have access to the information confidential by concern authority.
- Sufficient records, publications regarding customer service were not available as per requirement.
- Three-month is not sufficient time to gain practical knowledge and prepare a report.
- The employees of the bank are so much busy so they cannot provide me to give information about the General Banking Department such as different types of loans and advances.
- I have no proper experience to do this kind of report. So, inexperience creates obstacle to follow the systematic and logical research methodology.
Uttara Bank Limited UBL is a private commercial Bank in Bangladesh. Uttara Bank-one of the largest and oldest private-sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. 201 branches at home and other more affiliates worldwide create efficient networking. Uttara Bank is a bank that serves both clients and country.
UBL, started the project of seven days assured payment scheme to serve quickly the foreign remittance sender On the other hand, it has achieved the membership of Society for Worldwide international Financial ‘Telecommunication (SWIFT) to accurate the international business and banking activities.
During 28th January 1965, The Eastern Banking Corporation inaugurated its operation in East Pakistan as commercial bank. After 6 months of its inauguration it has got the status of Schedule Bank. It was the first Bengali Owned Commercial Bank. After liberation the Eastern Banking Corporation was changed by name as Uttara Bank Ltd. During 1972 it was taken under national ownership. At that time it’s paid up capital was 69.13 crore and profit figure was 42lac. During September 1983 it was privatized under privatization act. At that time this deposit was 231.03 crore and profit figure was 5.06 up to 2003 its number of branches stands to 198 and it’s paid up capital was 100 million. 95% of its share holder is public and rest of share holds by Government. There are some different year’s deposits, loan, & advances and net profit has been given below.
|Year||Deposit||Loan & Advances (Tk. In cr.)||Net profit (Tk. In Cr.)|
|December 31, 1972||69.13||60.57||.42|
|December 31, 1983||231.03||226.56||5.06|
|December 31, 2001||2594.25||2333.18||120.00|
The all branches are computerized which has been possible by local (within the organization) computerized analyst. The place, where electricity is not available they are maintaining their activities by generator. And that’s why has got access to enter in the instant Global Economy. For reaching immigrant/non-imrnigranls, sending money to the recipients as welt as to invest this money in lucrative sector UBL has established.
1. Non-residence Foreign Currency Deposit (NFCD)
2. Foreign Current Account Deposit (FCAD)
3. Wage Earners Development Bond (WFBD)
4. Home (HRC)
5. Wage Earners Investment (WEIC)
Historical Background of Uttara Bank Ltd:
Uttara Bank Ltd. has been a nationalized bank in the name of Uttara Bank under the Bangladesh Bank (Nationalization) order 1972, formally known as Eastern Banking Corporation Limited.
*Uttara Bank ltd. started functioning from 28.01.1965
*Consequent upon the amendment of Bangladesh Bank (Nationalization) order 1972
*Uttara Bank ltd. converted into Uttara Bank ltd. as a public limited company in the year 1983 and obtained business commencement certificate on 21.08.1983.
*Uttara Bank ltd. floated its shares in the year 1984.
*Uttara Bank ltd. has 207 branches all over Bangladesh
*The bank is listed in the Dhaka Stock Exchange Ltd. and also in Chittagong Dhaka Stock Exchange Ltd.
*It publicly quoted company for trading of its shears.
*The registered office of the Bank is located in 47, Bir Uttom Shahid Ashfaq-us-samad Road (90, Motijheel Commercial Area), P.O. Box No. 217 & 818 Dhaka-1000, Bangladesh.
Uttara Bank is one of the largest and oldest private-sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. 207 branches at home and 600 affiliates worldwide create efficient networking and reach capability. Uttara is a bank that serves both clients and country.
UBL is one of the largest private banks in Bangladesh.
It operates through 207 fully computerized branches ensuring best possible and fastest services to its valued clients.
The bank has more than 600 foreign correspondents worldwide.
Total number of employees nearly 3600.
The Board of Directors consists of 15 members.
The bank is headed by the Managing Director who is the Chief Executive Officer.
The Head Office is located at Bank’s own 18-storied building at Motijheel, the commercial center of the capital, Dhaka.
Uttara Bank Ltd Networks:
The Head Office is located at Bank’s own 18-storied building at Motijheel, the commercial center of the capital, Dhaka.
|Corporate Offices ( Corporate Branch & Local Office )|
|Total Branches ( Including Corporate Branch & Local Office )|
|Authorized Dealer Branches|
|Treasury & Dealing Room|
To become a leading banking institution which play a pivotal role in the development of the country.
i) Continuous improvement in our business policies.
ii) Cost reduction integration of the technology at all level.
Uttara Bank ltd. has 207 branches all over Bangladesh. Fakirapul Branch is one of them. Like other branch it’s operate several department. They are like
- General Banking
- Loan and Advance, And
- Foreign exchange
In this branch operation is mostly covered by the computer system. By the use of computer here operate is like Clearing, E-mail, Money Laundering, Clean Cash and all types of letter/ application and other related works with computer.
Through there are a little bit work of foreign exchange, but FDD, LC,SC,LSC,DD,MT,TT are doing here.
Corporate Governance is the system by which business companies are directed and controlled. Since its inception, Uttara Bank has actively and fully adhered to the principle of sound corporate governance. Fairness, Transparency Accountability and Responsibility are the minimum standard of acceptable corporate behavior today. Uttara Bank Limited continues to ensure the compliance of corporate Governance as per Securities and Exchange Commission rules and regulations. Corporate governance establishes specific responsibility and ensures accountability.
Corporate Social Responsibility:
The basic driver of CSR consists of values that have taken place within businesses where they not only feel responsible for creation of wealth but also for social and environmental well being. Uttara Bank Ltd. considers socially responsible activities as an important part of its culture, identity and business practice. We have a deep commitment, loyalty and a high sense of responsibility to our nation and its people. Uttara Bank Ltd. conforms to all of the astringent regulations issued by the Government and the Bangladesh Bank. As per of our corporate social responsibility, Bank contributes greatly to the nourishment of the country’s all types of calamities, arts, culture and sports.
Vision/Mission, Strategies Statement:
The bank has some mission to achieve the organizational goals. Some of them are as follows-
- The bank looks forward with excitement and a commitment to bring greater benefits to customers.
- Uttara Bank Limited provides high quality financial services to strengthen the well-being and success of individual, industries and business communities.
- Its aim to ensure their competitive advantages by upgrading banking technology and information system.
- UBL intends to play more important role in the economic development of Bangladesh and its financial relations with the west of the world by interlinking both modernistic and international operations.
- The bank intends to meet the needs of their clients and enhance their profitability by creating corporate market.
- The Bank has remained dynamic in its continued efforts to improve & increase core competence & service efficiency by constantly upgrading product quality, service standards, protocol and their effective participation making use of state of the art technology.
- The bank creates wealth for the shareholders
- The bank believes in strong capitalization.
- Its maintain high standard of corporate and business ethics.
- UBL extend highest quality of services, which attracts the customers to choose them first.
To manage and operate the Bank in the most efficient manner to enhance financial performance and to control cost of fund
To strive for customer satisfaction through quality control and delivery of timely services
To identify customers’ credit and other banking needs and monitor their perception towards our performance in meeting those requirements.
To review and update policies, procedures and practices to enhance the ability to extend better service to customers
To train and develop all employees and provide them adequate resources so that customers’ needs can be reasonably addressed.
To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to employees in a timely fashion.
To cultivate a working environment that fosters positive motivation for improved performance
To diversify portfolio both in the retail and wholesale market
To increase direct contact with customers in order to cultivate a closer relationship between the bank and its customers
Capital and Reserve:
The Authorized Capital of the Bank increased from Tk 1,000.0 million to Tk. 1,600.00 million during the year 2008. But the bank has already got approval from Bangladesh Bank to raise its Authorized Capital from Tk. 1,600.00 million to Tk. 3,200.00 million. The paid up capital of the Bank has been increased to Tk.798.7 million from Tk.399.3 million due to declaration of 100% bonus share in 2008. The total number of shares was 79, 86,592. The Government of the People’s Republic of Bangladesh, five Banks and fifty two financial institutions held total 6, 31,400 shares worth Tk. 631, 40,000.00 and remaining 27,170 private Shareholders held total 73, 55,192 shares worth Tk. 73, 55, 19,200.00. The total equity of shareholders of the Bank at the end of the year 2008 stood Tk. 3,688.8 million and in 2007 stood Tk. 2,453.5 million.
The Reserve Fund increase to Tk 2,890.2 million during the year by registering 40.70 percent increase over last years tk. 2,054.2.
Milestones in the development of the organization:
To be a dynamic leader in the financial market in innovating new products as to the needs of the society.
To earn positive economic value addition (EVA) each year to come.
To top the list in respect of cost efficiency of all the commercial Banks.
To become one of the best financial institutions in Bangladesh economy participating in the most significant segments of business market that we serve
This year simultaneously for development and achievements of continuous growth rate in all the areas of banking operations. The bank has successfully been marching ahead with its prime business objective by earning Achievements were possible because of his service excellence of management with support from a very resourceful and- skilled workforce who are rendering efficient and specialized services.
Organogram of UBL:
Human Resource Development (HRD):
Take good care of your employees; employees will take good care of the organization” UBL believes in this maxim to its core. The employees are considered as the most valued resources and are the local point of all its activities. As a service industry, UBL is constantly trying to improve its human resources where performance excellence is always encouraged by reward and recognition. In addition, a number of well thought policies were formulated for the welfare of its employees, in the form of UBL Superannuating Fund, UBL employee’s house building loan scheme, car leasing scheme, for employees
Human Resources and Training:
Skilled and motivated staff plays a vital role in achieving top performance. Knowledge and skill development is a continuous process and to keep our employees abreast of the latest developments in the banking sector, the Bank continuous to organize various training programmers and workshops.
The Bank’s own Training Institute is nicely decorated and equipped with the sophisticated instrument has been striving to bring about a qualitative change and improvement in human resources of the bank by imparting continuous different training throughout the whole year. Guest speaker specialized in banking participate in each training program of the bank excluding highly educated faculty members of the institute. Besides, a number of executives and officers were sent to various training institution including Bangladesh Institute of Bank Management (BIBM), and abroad for higher training.
The total manpower of the bank in different grades as on 31.12.2009 was under:
|1.Executives (Assistant General Manager & Above)|
There are two types of marketing division. These are:
It refers to various kinds of loan and advances. This division maintains communication with corporate clients gives incentive to take loan from UBL and approaches them to borrow from UBL in profitable projects.
This refers to marketing for collecting funds through buying of depository products from large depositors. The division communicates to the persons or organization having excess fund of deposit, informs them about the attractive features of the depository products and convince them to invest in UBL in various deposit scheme.
Credit Risk Management Division:
Central Accounts Division:
Internal Control and Compliance Division:
This division operates and keeps the record of all transactions, assets, liabilities of UBL by using integrated software. Though the technology of UBL is so advanced, the computer division tries to provide the following functions:
- Supply and installation of computer as per requirement
- Design software to support accounts operation
- Train the officers and employees about the operation of different software
- Updating the software if there is any lagging in its operation.
- Using more update software
- Different sector have used different software like,
Research and development Division:
This division is maintained to do the research and development work to innovate new products and services as well as to improve existing products and services. Uttara Bank always thinking customer satisfaction that way provides better services then other bank.
Committees and Group Division:
Uttara Bank is on of the largest corporate bank in the country with current business models that heavily encourages and supports the growth of the bank. The subordinates are given chance to participate in the goal and objective setting of the bank. In this regard, there are some committees functioning in the bank. These are:
In this case, the committee members are drawn from the Board of Directors. The committee reviews the principles, policies, rules and gives a decision which later requires the approval of the Board.
This committee consists of the members of the Board. To approve the matters beyond the delegation of the board, this committee exercises the power delegated by the Board from time to time.
This committee consists of the Managing Directors and Head Office Executives. They discuss about the progress and improvement on the guidelines regarding deposit, loans, gives different ideas, decision regarding various issues.
This division is responsible for monitoring and supervising the foreign exchange dealings of the bank. It performs the following functions:
- Making guidelines and frameworks for foreign dealings complying the rules of Bangladesh Bank
- Circulating instructions of Bangladesh Bank
- Maintaining correspondence with foreign banks and exchange houses with which it has exchange arrangement
- Maintaining NOSTRO accounts with banks in abroad
- Fixing and sending foreign exchange rates to Authorized Dealer (AD) branches and Bangladesh Bank.
HIERARCHY OF UTTARA BANK LTD
Deputy Managing Director
Asst. Managing Director
Deputy General Manager
Asst. General Manager
Senior Principal Officer
Senior Officer Grade -1
Officer Grade -2
Sources of UBL funds:
Uttara Bank ltd. perform the functions of mobilization funds (deposit) from one group of people for the purpose of lending or investment of the same to other group of people, (of course, after maintaining the required liquidity provisions) and thus achieve a reasonable amount of profit after meeting the cost of fund administration.
- Paid-up capital: Paid-up capital of a commercial bank is the long term funds contribution to bank primarily by its owners, subsequently contributed by public against their share of the bank. It is the bank’s last line of defense against failure.
- Reserves: Reserves are created out of the profit every year. Every commercial bank is under compulsion, required to set a part o its profit as reserve known as statutory reserve. Banks also create reserve for bad and doubtful debts etc. these reserves provide protection to depositors in getting refund of certain portion of their deposits when bank faces the danger of liquidation.
- Retained earnings: Undistributed portion of profit, which may also be employed as fund.
- Deposit: It is the main source of banks fund. It is the life blood of a bank that enables the bank to lend or interest with a view to earn profit. It helps maintain liquidity of a commercial bank.
- Call money: A bank can borrower from other banks in order to meet its liquidity short fall for a short period of time, as the same is refundable at call.
- Borrowing from central bank: Central bank is the lender of the last resort so the banking system. A bank can approach central bank for temporary assistance, but a bank can not seek assistance on a continual basis.
Commercial banks are exposed to various risks. The management of Uttara Bank Limited is fully cognizance to the importance of various risk involved in the banking business. Risk management are the critical factors in banking. Bangladesh Bank has identified 05 (five) core risks of management of the bank and has provided necessary guidelines for prevention there from. The five core risks are:
- Credit Risk Management.
- Asset Liability Management.
- Foreign Exchange Risk Management.
- Prevention of Money laundering.
- Internal Control and Compliance.
Effective risk management is indispensable for smooth commercial operation in all spheres of business. So Uttara Bank Limited has implemented the following risk management system prepared in line with guidelines of Bangladesh Bank to prevent relevant risks.
- Credit Risk Management: Credit risk is defined as a risk that a borrower may be a loan default due to his failure to meet obligation to the Bank when loan or repayment installment thereof becomes due.
- Asset Liability Management: As per Bangladesh bank guidelines the Bank formed Assets Liability Committee with combination of following members:
- Managing Directors & CEO
- Additional Managing Director
- Deputy Managing Director
- Head of Treasure
- Head of MIS & Computer Department
- Head of Marketing Department
- Head of Central Accounts
- Foreign Exchange Risk Management: Foreign Exchange Risk arises from adverse movement of exchange rate of the foreign currencies in possession of the Bank which may affect the profit of the Bank.
- Prevention of Money laundering: In order to prevent and control illegal hundi, unauthorized transfer of money aboard and money laundering, the Bank has taken various steps. The Bank continued its anti money laundering campaign through training programmed.
- Internal Control and Compliance: The Bank has taken various steps for ensuring internal control and compliance as per directives and guidelines of Bangladesh Bank for managing core risks in banking with a view to conducting banking business more effectively and efficiently.
Branches of Uttara Bank Ltd:
|Authorized Dealer Branches|
|Treasury & Dealing Room|
|Man Powe Man Power|
Financial Position of the Branch (June-10)
From when I started here as an internship I expired that this branch is always over crowed with a lot of customers. This has promoted me to find out the financial position of the branch. Here I was able to extract the following data regarding the branch.
|Current account G/L Balance (30.06.09)|
|Cash Credit account G/L Balance (29.06.09)|
Profit of the Branch:
The Profits of the branch starting from January’10 to June’10 are given below:
The profit of this branch is Tk.852359, 432825, 496232, 470211,466010 and 2990506 in the month of January, February, March, April, May and June respectively.
FIGURE: Total Profit of the Branch
Interpretation: From the graph it is easily understand that the profit of the branch is going high which is very good for the total organization. Because they are always provide profit for the total organization means Uttara bank limited.
FIGURE: Total Income of Total Inflow
Interpretation: It is found that the Total income is like Tk. 1203504,781413, Tk. 935575, Tk. 1058725, Tk. 1043861, and Tk.3631896 in the month of January, February, March, April, May and June respectively. From the chart it is said that the total income of UBL Fakirapul branch is growing up since from January to June. The branch shows good performance by them.
FIGURE: Total Expense
Interpretation: Total expense of Fakirapul Branch is Tk. 351145, Tk. 348588, Tk. 439343, Tk. 588514, 577851 and Tk. 641389 in the month of January, February, March, April and May respectively. The expense is decrease in May from the previous month which is shown a good responsibility by the branch.
Performance of Uttara Bank Ltd:
Uttara Bank’s operation has achieved the confidence of its customer with sound fundamentals in respect of deposit accumulation; loans & Advance, Import & Export business, remittance business and profitability. As a result the bank has been able to earn remarkable profit in business. Overall performance of Uttara Bank Limited has been improved for maintaining effective and constructive principle of Bangladesh Bank.
Cash in stood at TK 1,341.4 million in 2009 which is lower than that of the previous year and the same amounted to TK 1,585.5 million in 2008.
The Authorized Capital of the Bank remained at tk 1600.00 to Tk.3200.00 million during the year 2009. The paid up capital of the Bank has been increased to TK 1597.4 million from TK 798.7 million due to declaration of 100% bonus share for 2009. The total number of shareholders was 15973184. The Government of the Peoples Republic of Bangladesh, eighteen Banks and fifty two financial institutions held total 676397 sahares worth Tk. 67639700.00 and remaining 42499 private shareholders held total 15,296,787 shares worth Tk. 1,529,678,700.00. The total equity of shareholders of the Bank at end of the year 2009 stood at Tk.6,206.9 million and in 2008 stood at Tk. 3688.8 million.
The reserve fund of the bank increased to TK 4,609.6 million during the year by registering 59.49 percent increase over last years Tk. 2,890.2 million.
FIGURE: Authorized capital, Paid-up-Capital, Reserved fund & other Reserves
As per guidelines of Bangladesh Bank, the Bank adopted BIS (Bank for International Settlement) risk adjusted capital standerd to measure capital adequacy. Capital adequacy indicates the equity base with respect to risk weighted assets derived from both on and off balance sheet activities of the bank.. At the end of the year 2009, the actual capital of the bank stood at Tk 5,829.0 million against required capital of Tk 3,688.2 million on the basis of tier-1 and tier -2 showing surplus capital of Tk 2,140.8 million. Risk weighted assets increased by Tk 2,677.8 million and stood at Tk 36,882.4 million in 2009 mainly due to increase in loans and advances.. The capital adequacy rate of the Bank stood at 15.91 percent against required 10.0 percent as fixed by Bangladesh bank, which is indicative of the sound capital base of the bank.
The Bank’s principle source of fund was deposit. The Bank deposit stood at Tk 59,387.3 million as on December, 2009 compared to Tk 50,817.0 million in 2008, thus recording 16.87 % growth. Competitive interest rates, attractive deposit products, deposit mobilization efforts of the Bank and confidence reposed by the customer in the Bank contributed to the notable growth in deposit. The Bank evolved a number of attractive deposit scheme to cater to the requirement of small and medium savers.
The total investment during the year 2009 were mostly in government Securities which stood at TK 22,344.1 million as against TK 11,091.8 million making a growth of 101.44 percent over the last year. The Uttara Bank Limited is primary dealer of Government securities. The Bank as a primary dealer is purchase the unsold Bond/ Bill which are put to auction in order to keep underwriting commitment. As a result the investment in Bond and Treasury bill increased. Besides one of the investment activities of the Bank was maintenance of statutory Liquidity Reserve which mainly comprise Government Treasury Bond and Treasury bill of different terms, National prize Bond, Government Approved Debenture and ICB shares. The Bank invested total Tk. 22,502.5 million in 2009 as compared to TK 11,188.8 million of the previous year.
Investment in treasury bonds and others securities:
Utilization of surplus fund was a major function of Treasury Department. Due to decline of surplus fund against previous year the entire Investment of the Bank stood at Tk. 22,502.5 million at the close of the year 2009. Mentionable that Bank has been able to increase Loans and Advance in Small Business as well as different sector by reducing investment.
Bank was maintenance of “Statutory Liquidity reserve” which generally compromise of Govt. Treasury Bills and Bonds (HTM) of various tenures, National Prize Bonds and
Govt. approved Debenture. The shares of Govt. Securities were amounted to Tk. 22,344.1 million in total Investment, which was 11,091.8 million in the previous year.
Head wise position of Bank’s invested Fund at the end of the Year 2009 is given below
|Head of Investment||(Taka in million)|
|Treasury Bills and Bonds|
Approved Debenture (in purchase price)
Share & Debenture of ICB sponsored companies
Prize Bond 22,182.9
1. Eastern Bank Ltd. 104.0
2. Karmo sangsthan Bank 10.0
3. ICB (Approved) 31.8
4. CDBL 1.0
5. Other Companies 4.3
Uttara Bank at a Glance:
Sponsored by some dynamic and reputed entrepreneurs and eminent industrialist of the country and also participated by the government, Uttara Bank Ltd. started its operation in mid 1983 and has since been able to establish one of the largest networks of 207 branches as on 31 December 2008 among the first generation banks in the private sector.
The bank has in its management a combination of highly skilled and eminent bankers of the country of varied experience and expertise. The management team of the bank is successfully led by Mr. Samsudin Ahmed managing director. He is a renowned and a dynamic banker with more than three decades of banking experience to his credit. The management is ably supported and assisted by qualified executives and officers.
|Reserve fund and other reserves|
|Classified loans and advances|
|Total off balance sheet exposures|
|BIS Capital Measures|
|Required Provision off balance sheet exposure|
|Income per share|
|Market value per share|
|Price earning ratio|
|Book value per share|
|Operating performance Ratio|
|Total Advance/ Class. Advance|
|Total Adv. Class. Advance|
|Income from equity|
|Income from Assets|
|Number of shareholders|
|Number of Branches|
|Number of Employees|
|Human Resources Development|
Profit and Loss Account:
UTTARA BANK LIMITED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2009
|Interest paid on deposits, borrowings etc.|
|Net Interest Income||1,883,766,884||1,121,081,427|
|Income from Investment.|
|Commission,Exchange and Brokerage|
|Other Operating Income|
|Total operating income||4,007,665,446||3,143,915,374|
|Salary and allowances.|
|Rent, taxes,insurance,electricity etc.|
|Managing Director’s salary & allowances and fees|
|Directors’ fees and expenses|
|Repair, maintenance and depreciation|
|of Bank’s property|
|Total operating expenses||1,807,336,918||1,677,679,817|
|Add: Profit on sale of fixed asset|
|Profit before provision|
|Provision for loans & advances|
|Provision for off balance sheet exposures|
|Provision for outstanding unreconciled entries|
|Transfer to gratuity fund|
|Transfer to benevolent fund|
|Profit before tax||2,098,118,172||1,143,735,557|
|Provision for Tax||959,600,000||734,200,000|
|Profit after tax|
|Retained surplus brought forward|
|Profit available for appropriation||1,141,714,894||432,526,322|
|Issue of bonus share|
|Earning per share (EPS)|
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