Today Bangladesh stands on the juncture of economic emancipation. The stage is set for rapid growth and development in every sector of the economy. The Banking sector is also experiencing significant changes. ‘Professionalism’ is the key word for success nowadays and in the years to come only those Banks which have a total commitment to this sector will thrive. IFIC Bank Ltd. is determined to play a leading role in the development of the Banking sector in the twenty-first century. As the BBA program is a terminal degree, it is required to have an internship program for a period of three months on a reputable organization where I can gain practical experiences what I learned at my theoretical classes. I was keen to have my internship program at banking sector that is why I joined IFIC Bank Ltd. Nawabpur Branch as an internee for three months. They give me the opportunity to gain practical knowledge and I work on Foreign Exchange. I also worked for some days in the General Banking System. I have arranged my internship report on banking activities. My aspiration is to endow the readers of this report with knowledge, tools and impeding, necessary to succeed in a Banking environment that is becoming increasingly and inevitably global. Banking sector now-a-days plays an important role to develop the economy of a country, especially developing country. It is worthless to say how much important the banking sector to run the wheel of a country’s economy.
Foreign exchange department plays significant roles through providing different services for the customers. Letters of credit is the key player in the foreign exchange business. With the globalization of economies, international trade has become quite competitive. Timely payment for exports and quicker delivery of goods is, therefore, a pre-requisite for successful international trade operations. To ensure this purpose, IFIC Bank Limited transmits L/C through SWIFT (Society for Worldwide Interbank Financial Telecommunication) to the advising bank. IFIC Bank Limited is providing different sorts of L/C services like L/C opening, Lodgment, BLC (bills under letter of credit), Back to back LC etc. Foreign exchange department also provide foreign remittance, traveler’s cheque, foreign demand draft, endorsement of US$ in passport etc. Throughout the report I made my every effort to be as current and up-to-date as possible in the presentation of theories, concepts and examples.
Historical Background of IFIC Bank Ltd.
International Finance Investment and Commerce Bank Limited “IFIC Bank” came in to existence in 1976 as a joint venture between the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company within the country and setting up joint venture banks/financial Institutions abroad. IFIC was incorporated as a public limited company with an authorized capital of Tk. 20 core and paid up capital of Tk.10 core. IFIC commenced its operation on February 28, 1977 with a Subscribed capital of Tk.5 core, contributed by leading private sector entrepreneurs in the country. The Government held 49 percent shares and the rest 51 percent were held by the sponsors and general public.
But, in 1983 when the Government allowed banks in the private sector IFIC was converted into a full-fledged commercial bank. The Investment Company has transformed into banking company In June 13, 1983 and started activities from June 24, 1983 through Its Motijheel Branch.
At the very beginning the 60 percent share are owned by private entrepreneur and 40 percent are owned by Govt. at the end of 1984 the authorized capital was 10 core and the paid up capital was 7crore 15 lacs Taka only.
Annual report as on 1983. the ownership of non Govt. sector is included-
1. Mr. Jahurul Islam, Chairman.
2. Salman F. Rahman, Vice-Chairman.
3. A.M. Aga Usuf.
4. Syed. Mohsen Ali.
5. Mr. Ahmadul Kabir. Owner of “Dainic Shangbad”.
Milestones in the development of IFIC Bank Ltd.
- 1976- Established as an Investment and Finance Company under arrangement of joint venture with the govt. of Bangladesh.
- 1980- Commenced operation in Foreign Exchange Business in a limited scale.
- 1982- Obtained permission from the Govt. to operate as a commercial bank. Set up a its first overseas joint venture (Bank of Maldives Limited) in the Republic of Maldives (IFIC’s share in Bank of Maldives Limited was subsequently sold to Maldives Govt. in 1992)
- 1983- Commenced operation as a full-fledged commercial bank in Bangladesh.
- 1985- Set up a joint venture Exchange Company in the Sultanate of Oman, titled Oman Bangladesh Exchange Company (subsequently renamed as Oman International Exchange, LLC).
- 1987- Set up its first overseas branch in Pakistan at Karachi.
- 1993- Set up its second overseas branch in Pakistan at Lahore.
- 1994- Set up its first joint venture in Nepal for banking operation, titled Nepal Bangladesh Bank Ltd.
- 1999- Set up its second joint venture in nepal for lease financing, titled nepalBangladesh Finance and leasing Co. Ltd. (which was merged with NBBL in 2007)
- Overseas Branches in Pakistan amalgamated with NDLC, to establish a joint venture bank: NDLC-IFIC Bank Ltd., subsequently renamed as NIB Bank Ltd.
- 2005-Acquired MISYS solution for real time on-line banking application. Core Risk Management implemented.
- 2006-Corporate Branding introduced. Visa Principal and Plus (Issuer and Require) Program Participant Membership obtained.
- 2008-Observing 25th Anniversary of Customer Satisfaction.
- 2012-150 Branches offering Real Time On-line banking facility.
Joint Ventures in Abroad
Bank of Maldives Limited
IFIC is the first among the banks in the private sector to have operations abroad. In 1983, the bank set up a joint venture bank in Maldives known as ‘Bank of Maldives Limited’ (BML) at the request of the Government of the Republic of Maldives. This is the only national bank in that country having branches throughout that country. IFIC Bank managed the affairs of BML from 1983 to 1992. IFIC Bank sold its shares in 1992 to the Government of the Republic of Maldives and handed over the Management of BML to Maldives Government.
NIB Bank Ltd. Pakistan:
IFIC Bank had two branches in Pakistan, one in Karachi and the other in Lahore. Karachi Branch was opened on 26th April 1987, while Lahore Branch was opened on 23rd December 1993.
To meet the Minimum Capital Requirement (MCR) of the State Bank of Pakistan, the overseas branches in Pakistan have been amalgamated with a reputed leasing company in Pakistan named National Development Leasing Corporation Ltd. Therefore, the existence of our above overseas branches has ceased on 2nd October 2003 and a new joint venture bank entitled NDLC – IFIC Bank Ltd. emerged in Pakistan on 3rd October 2003. The Bank was subsequently renamed as NIB Bank Ltd. IFIC Bank presently holds 7.31% equity in the Bank.
Nepal Bangladesh Bank Ltd. (NB Bank)
Nepal Bangladesh Bank Ltd. (NB Bank), a joint venture commercial bank between IFIC Bank Ltd. and Nepal nationals, started operation with effect from June 06, 1994 in Nepal with 50% equity from IFIC Bank Ltd.
The Bank has so far opened 17 (seventeen) branches at different important locations in Nepal. IFIC Bank presently holds 25% shares in NB Bank.
Nepal Bangladesh Finance and Leasing Limited (NB Finance):
NepalBangladesh Finance and Leasing Co. Ltd. (subsequently renamed as Nepal Bangladesh Finance and Leasing Ltd.), another joint venture leasing company between IFIC Bank Ltd. and Nepali Nationals, started its operation on April 18, 1999 in Nepal. IFIC Bank presently holds 15% share in the company.
Oman International Exchange LLC (OIE)
Oman International Exchange LLC (OIE), a joint venture between IFIC Bank Limited and Oman nationals, was established in 1985 to facilitate remittance by Bangladeshi wage earners in Oman. IFIC Bank holds 25% shares, and the balance 75% is held by the Omani sponsors. The exchange company has a network of 10 branches covering all the major cities/towns of Oman. The operations of the branches are fully computerized having online system.
The affairs and business of the company is run and managed by the Bank under a Management Contract.
Missions and Vision of IFIC Bank Limited
The mission of IFIC Bank Ltd. is to provide service to clients with the help of a skilled and dedicated workforce whose creative talents, innovative action and competitive edge make our position unique in giving quality service to all institutions and individuals that we care for.
IFIC Bank Ltd. is committed to the welfare and economic prosperity of the people and the community, for we derive from them our inspiration and drive for onward progress to prosperity. In an intensely competitive and complex financial and business environment, it particularly focuses on growth and profitability of concerned.
Objectives of the Bank
The objectives of the bank are to promote joint participation of Government and private sponsors to establish joint venture banks, financial companies, branches and affiliates abroad to satisfy their customers.
It conveys its objective via their motto: “You’re Satisfaction First”
- To establish, maintain, carry on, transact, undertake and conduct all types of banking, financial, investment and trust-business in Bangladesh and abroad.
- Ø To form, establish and organize any bank, company, institution or organization, singly and/or in joint-collaboration for partnership with any individual, company, financial institution, bank, organization, or any Government and/or Government agency for- the purpose of carrying on banking, financial, investment and trust business and/or any other business as provided hereafter.
- Ø To carry on any business relating to Wage Earner’s Scheme as may be allowed by Bangladesh Bank from time to time including maintaining of Foreign Currency Accounts and any other matter related thereto. To contract or negotiate all kinds of loan, and or assistance, private or public, from any source, local or foreign, and to take all such steps as may be required to complete such deals.
- To form, promote, organize, assist, participate or aid in forming, promoting or organizing any company, bank, syndicate, consortium, and institute or any holding or subsidiary company in Bangladesh or abroad for the purpose of undertaking any banking, financial, investment or trust business.
- To take part in the formation, management, supervision or control of the business or operations of any company or undertaking and for that purpose to render technical, managerial and administrative services and act as administrator, manager and secretary.
- To purchase, or otherwise acquire, undertake, the whole or any part of or any interest in the business, goodwill, property, contract, agreement, right, private assets and liabilities of any other company, bank, corporation, partnership, body person or persons carrying on, or having ceased to carry on, any business which the company is authorized to carry on, upon such terms and may be deemed expedient.
- To encourage, sponsor and facilitate participation of private capital in financial, industrial or commercial investments, shares and securities and in particular by providing finance in the form of long, medium or short term loans or share participation by way of subscription to the promoter shares or underwriting support or bridge finance loans and/or by any manner.
IFIC Bank Ltd. mainly follows top down approach to take necessary decisions for the company. Basically they follow the centralize strategy where the Head Office of the Bank control and monitor all the activities of its branches. In case of marketing strategy they basically depend on ‘word of mouth’ as they are already well reputed for its long-term service in the banking industry.
Products and Services of IFIC bank Ltd.
IFIC Bank Ltd. offers various products and services. The bank has highly qualified professional staffs that have the capacity to manage and meet all the requirements of the bank. Every account is assigned to an account manager who personally takes care of it and is available for discussion and inquiries, whether on writes, telephones or calls. Let’s gives the diagram of product and service.
Deposit Product Loan and Loan Schemes
|Deposit Product||Loan schemes|
|Current Deposit Account (CD)||Secured over draft (SOD) General|
|Saving Deposit (SB)||HouseBuilding Loan (Staff)|
|Short Term Deposit Account (STD)||Term Loan (Industrial)|
|Fixed Deposit Receipt (FDR)||Consumer credit Scheme (CCS)|
|Pension Saving Scheme (PSS)||Easy Loan (Means secured personal loan to meet personal financial requirement)|
|Monthly Income Scheme (MIS)||Consumer Durable Loan|
|Special Account||Education Loan|
|Thikana or HouseBuilding Loan|
Table 1.0: IFIC Bank Deposit Product and Loan
Capital Structure of IFIC Bank Ltd.
|SL||Capital structure||Amount TK.|
|1||Initial Authorization capital||100 million|
|1-A||Authorized capital enhanced in 2011||1,900 million|
|2||Initial paid-up capital in 2011||1,541 million|
|2-A||The total equity of sponsors Directorsand statutory reserves||45,729.47 million|
|3||Through (Issuance of IPO Officer)||3197 million|
Table 1.1: Capital structure of IFIC Bank Ltd.
|Sl No.||Particulars||Taka in million|
|01||Paid up capital||1341.43||670.72||406.39||40.64|
|06||Total Loan and Advances||33018.39||28361.46||25490.66||2169.49|
|07||Total Contingent Liabilities and Commitment||20536.26||19422.59||16521.41||1310.18|
|08||Credit Deposit Ratio||91.48%||94.85%||89.06%||96.40%|
|09||Percentage of Classified Loan Against Total loan and Advances||5.92%||8.11%||5.64%||9.66%|
|10||Profit After Tax and Provision||657.31||964.93||253.83||8.23|
|11||Amount of classified Loan during the year||1953.07||2299.90||1437.39||209.47|
|12||Provision kept Against Classified Loans||651.85||984.02||970.77||119.51|
|14||Cost of Fund||6.12%||6.58%||6.35%||6.12%|
|15||Interest Earning Assets||39806.29||35520.23||30940.57||2565.64|
|16||Non- Interest Earning Assets||5931.20||4393.92||5139.91||454.47|
|17||Return of Investment (ROI)||13.59%||13.56%||9.11%||6.83%|
|18||Return of Assets (ROA)||1.44%||2.42%||0.70%||0.27%|
|19||Income from Investment||691.44||569.53||301.93||20.28|
|20||Earnings per Share||49.00||143.87||62.46||20.24|
|21||Income per Share||411.98||774.77||149.56||36.80|
|22||Price Per Ratio (Times)||24.26||16.13||15.23||28.30|
Table 1.2: Financial Highlight
|Name of the company||Auditors|
|International Finance Investment and Commerce Bank Limited (IFIC)||Howladar Yunus and Co.Chartered Accountants|
IFIC Bank Ltd.was incorporated in Bangladesh and registered with the Registrar of Joint Stock Companies and Firms as a public Company limited by shares.
Adil and Associates
|Company Registration Number|
4967,Date October 08,1976
|Credit Rating Agency|
Credit Rating Information and Service Ltd.
|Name of the Chairman|
Mohammad Lutfar Rahman
|Paid up Capital|
|Name of Managing Director|
Listed with Dhaka Stock Exchange Ltd.(DSE) and Chittagong Stock Exchange Ltd.(CSE in 1986 and 1995 respectively.
|Name of CFO|
|Name of Company Secretary|
|No. of Employees|
|Tax payer Identification number (Tin)|
|VAT Registration Number – 9021077014||No.ofSMEServiceCenter -2|
BSB Bhaban (17th ,18th and 19th floor)8 Rajuk Avenue,Dhaka –1000
Tel:9563020-29,Fax:9562015,Telex:632404 IFICH BJSwift:IFIC BD
BSB Bhban(10th floor)
8 Rajuk Avenue,Dhaka – 1000
hotline number : 9563020
Table 1.3: Corporate Information
Since the beginning of its journey as a commercial bank in 1983, IFIC Bank Ltd. has been giving great emphasis on the adoption of modern technology. It became the pioneer in the field of automation by introducing computerized branch banking right in the same year. Subsequently, all the branches were brought under similar automated platforms with upgraded software applications to offer all the critical banking features. At present all 65 domestic branches are fully computerized under networked environment.
The Bank has taken up a new project with Misys International Banking System Inc. (UK) to further upgrade its banking operation to state-of-art world class on-line banking solutions to provide faster and even more convenient centralized services to the clients.
Besides, the Bank is also operating fully on-line Automated Teller Machine (ATM) services under the banner Q-Cash at a number of locations in Dhaka and Chittagong. The ATM facilities are available to the customers at Q-Cash booth.
Since the importance of Web presence in the Internet is absolutely critical, IFIC Web Site www.ificbankbd.com has long been launched for the convenience of the customers, where all the activities and information are constantly being posted and updated. A Central Mailing System is operational at the Head Office to let the customers have direct electronic access to the selected staff.
Information Technology Structure
Present information technology structure of IFIC Bank:
- Computer System
- Computerized Services
- Computerized Branches: All Branches are computerized throughout the country.
- Banking Software: It was past when 7 LAN Branches are using BexiBank 4000+ and rests of the 35 Branches are using BexiBank 3000+ for their daily Banking Transaction. Now They are using “MAYSIS” a much Upgraded and Well Managed Software.
- Operating System: Most of our Branches, which are using BexiBank 4000+, are operating their Computer System in DOS (Disk Operating System). Branches, which are operating in LAN environment, are using Windows 2000, Winxp or Novell NetWare operating system.
- Central Backup System: Presently Information Technology and Computer Division of Head Office is maintaining an Office Central Backup System for all the Computerized Branches and Division of Head Office of our Bank.
- Tele Banking (Computerized Phone Banking): Our Banking has implemented Computerized Phone Banking technology in 4 Branches (i.e. Motijheel, Federation, Dhanmondi and Gulshan).
- SWIFT Network: Presently our International Division of Head Office is operating their Foreign Trade related transaction through SWIFT Network.
- Electronic Mail: Six main Branches has (i.e. Motijheel, Federation, Gulshan, Dhanmondi, Narayanganj and Agrabad) are using Email facility for international and internal correspondence. In future all AD Branches will be brought under Email facility.
- Home Banking: Our Bank is currently engaged in implementing this new service for Bank’s high net-worth selected business clients.
In view of the global recognition towards need of an effective risk management and control systems in financial sector, IFIC Bank Ltd.being cognizant of the importance of the subject, has prepared and implemented the following policy guidelines on Risk Management:
• Credit Risk Management
• Asset Liability Management
• Foreign Exchange Risk Management
• Internal Control and Compliance
• Prevention of Money Laundering
The thirteen members of the Board of Directors are responsible for the strategic planning and overall policy guidelines of the Bank. Further, there is an Executive Committee of the Board to dispose of urgent business proposals.
Besides, there is an Audit Committee in the Board to oversee compliance of major regulatory and operational issues.
The CEO and Managing Director, Deputy Managing Director and Head of Divisions are responsible for achieving business goals and overseeing the day to day operation.
The CEO and Managing Director are assisted by a Senior Management Group consisting of Deputy Managing Director and Head of Divisions who supervise operation of various Divisions centrally and co-ordinates operation of branches.
Key issues are managed by a Management Committee headed by the CEO and Managing Director. This facilitates rapid decisions.
There is an Asset Liability Committee comprising member of the Senior Executives headed by CEO and Managing Director to look into all operational functions and Risk Management of the Bank.
Board of Directors of IFIC Bank Ltd.
Table 1.4: Board of Directors of IFI C Bank Ltd
|MANAGING DIRECTOR (MD)|
|DEPUTY MANAGING DIRECTOR (DMD)|
|SENIOR EXECUTIVE VICE PRESIDENT (SEVP)|
|EXECUTIVE VICE PRESIDENT (EVP)|
|SENIOR VICE PRESIDENT (SVP)|
|FIRST VICE PRESIDENT (FVP)|
|VICE PRESIDENT (VP)|
|SENIOR ASSISTANT VICE PRESIDENT (SAVP)|
|FIRST ASSISTANT VICE PRESIDENT (FSAVP)|
|ASSISTANT VICE PRESIDENT (AVP)|
|SENIOR STAFF OFFICER (SSO)|
|STAFF OFFICER (SO)|
|GRADE ONE OFFICER (GR-1)|
|GRADE TWO OFFICER (GR-2)|
Chart:Organ gram of Head Office, IFIC Bank Ltd.
Leading Issues of IFIC Bank Ltd.
- Shifting of Managerial attention from Traditional mode of Financing to:
- Consumer Financing,
- Small Enterprise Financing,
- Trade Financing, and
- Other Short Term financing
- Re-profiling of existing Credit Portfolio.
- Mobilizing low cost fund/ change of Deposit mix.
- Recovery of Non Performing Loan.
- Ensuring Asset Quality.
- Efficient Fund Management.
Distribution of Branches
The bank covers by its activities all the important trading and commercial centers of the country. As on April, 2012 it had 150 branches within Bangladesh. All the branches are equipped with computers in addition to modern facilities, logistics and professionally competent manpower.