“foreign remittance activities and financial performance of national bank limited

“Foreign

Remittance Activities and Financial Performance of National Bank Limited

Executive Summary Throughout the analysis of report tried to provide an extensive view of the remittance and its overall impact on economy at a macro level and doing so with the help of office administration and various articles from different e-sources bring up the channelization of remittance, the impact of it and as well as its future improvisation to our economy. The tried

to provide information in such a way which in one hand relate remittance with its macro effect and on the other hand at a specific level where National Bank Ltd playing its role in such development of utilization of remittance in our country.

Remittance generates remarkable benefits for the home country economy in terms of macro and microeconomic impacts. The remitters, most of whom were once unemployed in the home country, are now getting employed in the host country, and on the other hand, the inward remittance is causing employment generation domestically by reinforcing national savings, capital accumulation and investment. Over and above the employment aspect, many other key macroeconomic variables in Bangladesh such as growth, poverty reduction, social security, BOP situation have proven to be significantly positively related to remittances It is strongly opined in the Global Economic Prospects (GEP 2006, WB) 2006 that remittances have given rise to a decline in the poverty headcount ratio by 6 percentage points in Bangladesh during 1990-2006.

With the analysis of macroeconomic model it was found that remittances have a strong positive impact on GNP, a positive impact on consumption, investment and imports, but the largest impact is on private consumption while the smallest on investment and imports.

Recent boost in remittances has been attributed to the efforts to encourage remittances through official channel by adoption of measures such as opening of new exchange houses in source countries, expansion of drawing arrangements, setting an annual remittance threshold, close monitoring and supervision of banks, speeding up of delivery to the beneficiaries and more importantly, surveillance measures under the Money Laundering Prevention Act. It is pertain to mention that a large amount of Bangladeshis around 6.4 million is working and living worldwide and sending their hard earned money to his or her dear ones regularly.

Though some portion of remittance has been channeling through unofficial means like Hundi, the Bangladeshi Government has taken various measures and implanted money laundering act to combat such illegal activity. The inward foreign remittance will substantially be increased if, remittance through unofficial channels are combated.

According to the economical statistics published by Bangladesh Bank, it seems remittance inflow to Bangladesh has been gradually increased in last 20 years. Between 90s and onward till starting of 21st century remittance inflow was reported at a steady rate. After 2001 remittance inflow to our country was increasing and up to 2008-2009 a record amount of 10 million USD remittance inflows was recorded.

While considering this inflow pattern, found that due to global recession in world economy in the year 2009-2010 there is a drastic fall in the inflow amount `of remittance. Though our country was not at the verge of facing the recessional effect of world economy but certainly it is facing the after effect. Because by analyzing the data it was found that whereas a 20% growth rate was achieved in year 2008-09, a decline of 80% was recorded in year 2009-2010.

In the conclusion tried to provide some key points which might be implemented for increasing the rate of utilization of remittance. Such as in order to increase the flow of remittance through formal official channels, banks should be made more efficient and

attractive so that Bangladeshi’s communities abroad send money through these institutions.

This, in turn, requires making the Bangladeshi Banks adequately computerized, cost effective and flexible in order to compete with other banks and money exchange bureaus. Meeting the challenge with other banks also entails flexibility in determining the exchange rate, with a guideline from the Bangladesh Bank indicating the broad range to be followed.

Again In order to facilitate flow of remittance through the official channels and productive use of this scarce resource, government, particularly BMET, financial institutions and recruiting agencies should help create enabling environment for labor migration. Because the last truth is whatever the steps the Government or Banks takes to increase the flow of remittance but ultimately it is the number of skilled worker working in abroad will determine the flow of remittance in our country.

1.1 Introduction of the Report In today’s world, a bank performs several general banking activities in line with its different internal departments. All the departments which are providing Foreign Remittance services are very much important while dealing with customers. Bank earns its operating profit through functional activities of Foreign Remittance. That is why; Foreign Remittance activities does mean a lot for a bank. If a bank can figure out its outstanding performance in foreign remittance banking through satisfying its customer then it is possible for that particular bank to gain competitive advantage from the market.

National Bank Limited performs several general banking activities through its existing branches throughout the country. In most of the branches there are deposit section, loan and advances section, accounts section, foreign exchange section cash section and foreign remittance section. NBL performs its different types of day to day general banking activities with the help of these sections. The tried

best to learn several activities while doing

internship in National Bank Limited by working in Foreign Remittance banking.

This study is done to evaluate the foreign remittance activities of NBL. Findings of this study may benefit the organization itself to take strategic decision on its future plan to enhance the foreign remittance performance of the bank. This study contains a lot of learning materials that gained through internship, thus think that the result and recommendation of this study will be very much helpful for the maintenance of operational activities under foreign remittance division.

The report is on “Foreign Remittance Activities and Financial Performance of National Bank Limited”. Studied on this topic because was assigned to know about all the activities under the foreign remittance wing of the branch. In the organization part, have presented the company in details so that the report presents the whole company, its activities, goals and

objectives and its commitment towards the society. In the learning part it is been discussed that what studied while worked in the bank. The discussed the departmental activities that have observed while working. The presented all the functions of each department. The presented the details view of activities of the foreign remittance department of the bank.

Actually, set some well-defined objectives for study on this topic. Then following some specific methodology and analysis method have worked out some findings of the study and recommended for the problems that had identified in study. Finally, have concluded with some comments on how it much be better performing bank in near future and how it can contribute towards the economic development of the country.

For globalization and the financial needs and transaction rapidly banking sector are emerge to meet up the challenges of modern days. The banking activities operated to satisfy customer needs with modern trends the bank needs efficient executives. To keep pace with the trend, banks need executives with modem knowledge. The course practical orientation in Banks is an indispensable part of the BBA program. Under this course the students are sent to gather practical knowledge about banks and others organization environment and activities. This practical knowledge and environment build up a working attitude, responsibility, sincerity and norms to build up a future career to the Present world is changing rapidly to face the challenge of competitive free market students. The students also have to submit a report on practical orientation in institution.

1.2 Origin of the Study Through the internship in Elephant Road Branch of National Bank Limited I tried to bridge the gap between the theoretical knowledge and real life experience as part of Bachelor of Business Administration (BBA) program. This Internship report has been designed to have a practical experience through the theoretical understanding.

This Internship is essential for every student of Business Administration which helps the students to know the real life situation of corporate life. That is why; a student takes the Internship program at the end of the BBA program as the requirement to Bachelors degree.

This Internship report titled “Foreign Remittnce Activities and Financial Performance of National Bank Limited� is prepared to fulfill the degree requirement of BBA program. In this regard I had been assigned in Elephant Road branch of National Bank Limited just immediately after the completion of the course requirement of the program. been supervised there by the management of the bank to gather information which was necessary to prepare my report.

1.3 Objectives of the Study The start work with some specified objectives. The objectives act as a bridge between the starting point and the goal of the study. The report on "Foreign Remittance Activities and Financial Performance of National Bank Ltd." has been written as a partial requirement for obtaining the Degree of Bachelor of Business Administration. The basic objective of the report is to be acquainted with the practical aspects of the dealings of the National Bank Ltd. Thus the report has been prepared for serving the academic purposes only, and not for taking decisions by the National Bank's Management or any other organization. However, have an objective regarding why started work on such topic. The main objective is to evaluate and analysis of “Foreign Remittance activities and Financial Performance of National Bank Ltd." 1.3.1 General Objective To have a specific idea about the foreign remittance activities of NBL and to scrutinize its financial and operational performance of NBL in today’s banking industry of Bangladesh.

1.3.2 Specific Objectives 1. To be familiar with the history and operations of NBL in Bangladesh.

2. To figure out the operational performance of NBL in recent years. To work out positive and negative aspects of general banking activities of NBL. 3. To gather knowledge about the function of different sections under foreign remittance activities.

4. To understand the financial status of the bank 5. To find out the sector in which NBL provides credit

1.4 Rationale of the Study Private Banks have of course a vital role in promoting and accelerating the economic development process as per the demand of time through the implementation of finance for industrial and agricultural project, domestic and foreign trade and allocating the fund to various off-farm employment and self-employment generation projects. Focusing the light and considering the every pros and cons on available statistical data it has been apparently accepted that National Bank continued to register its steady progress in the field of deposits, advances, foreign exchange and foreign remittance business. In view of the sluggish nature of

the economic activities over the years the deposit performance of National Bank Ltd is more or less satisfactory. The National Bank gain maximum advantages for foreign exchange and remittance related business, the National Bank policy is aimed at the integrated operation of all it outlet at home and abroad.

The low rate of economic growth, high rate of unemployment, illiteracy, growth rate of population, low rate of recovery etc. are the impediment factor of economic development of a country.

Inspired of the above obligations rather in a most favorable situation National Bank Ltd have been flourishing efficient and endeavoring to the maximum of efficiency of its capacity to catch up with slow growing development of our country.

1.5 Scope of the Study National Bank Ltd. is one of the largest private commercial bank, which provides its services through almost 122 branches all over in Bangladesh. This bank is a reputed and leading one in our banking sector for its performance. The assigned to learn practical knowledge from National Bank Ltd, Elephant Road Branch. The covered all departments during the period in my practical orientation and

try to portrait the area of organizational overview,

performance of general banking, foreign remittance activities and finance, credit management, conclusion and recommendation.

1.6 Methodology Of the Study The report has been prepared mainly based on secondary data, famishing by the National Bank officials have also been incorporated in the report wherever it was considered necessary to maintain the singleness and lucidity of the report. This report has been prepared on the basis of experience gathered during the period of three months internship. Personal experience gained by visiting different desks during internship period. The collected data are taken from various sources which are mentioned in the below

1.6.1 Data Collection Method 1.

Face to face conversation

2.

Observation of activities of different departments

1.6.2 Data Sources •

Primary Sources 1. Practical experience of banking.

2. Conversation, exchange of ideas and views with senior officials of bank.

3. Training, workshop and seminar.

4.

•

Related files, books study provided by the officers concerned.

Secondary Sources: The major parts of information are collected from the secondary such as: •

Annual report and Audit report of National Bank Ltd.

•

Office files and Documents

•

Study related book and journals.

•

Web site.

Discussion with Concerned Person: As study related current data are not available, had to discuss with concern persons for getting up to data information.

1.6.3 Sample frame The completed paperwork having face-to-face conversation with 2 (Two) officials in the branch. All the officials are in the in-charge of their respective sections in the branch. As have done a framework of study with these people within my branch that means within the sample size of the study, it can be mentioned that the sample frame of my study is five.

1.6.4 Population Size All the Branches of NBL located in everywhere in Bangladesh has been taken into consideration as population.

1.6.5 Sample Size National Bank Limited, Elephant Road Branch taken as a sample size 1.6.6 Sampling Technique I have implemented Simple Random Sampling Technique by choosing representative of total population as sample for this study. have observed activities of each and every department of

selected sample and then analyzed those activities from point of view. While observing chose some employees and then made face-to-face conversation with them.

1.6.7 Data Analysis Method The used different charts and diagrams such as Pie-chart and Bar Diagram for the analysis of data that are collected from different sources and have also used ratio analysis and financial and operational information of the Bank to evaluate its performance and to compare its performance with other banks.

1.7 Limitations of the Study: It may agree to by the readers of the report that of such a report especially to enrich with empirical findings, wherever necessary, is a time to consuming matter. As the report prepared with a short span of time, the report could not be made comprehensive and conclusive.

Mainly the report could be made descriptive. Some usual constraints did face during the course of investigation.

These are as follows: •

The main limitation of the study is availability of literature and data and in many cases the up-to date information is not yet published. Even the Annual Report of 2010 is not yet published.

•

Time constraints impede me to make in depth study.

•

Entrance to every corner of the bank was not possible to me.

•

Relevant paper and documents were not available sufficiently which can my writing this paper.

•

I had to base on secondary data for preparing this report.

2.1. Banking History of Bangladesh Bangladesh is a developing country. Banking sectors place a pivotal role in the economic development of the country. The importance of bank as a significant institution of economic development fro a country can hardly be overemphasized. Banking system of a country can well be said as a barometer of its economic prosperity. Well-developed banking system is indispensable for modern trade and commerce. Banks not only, now-a day act as custodian of public money but also are indispensable as vital agent for maintenance of sound financial position of a government. Bangladesh bank acts as a central bank for our country and it

controls, supervises, and looks after the private scheduled banks as well as the nationalized banks formed by amalgamating the business of the twelve banks doing business in Bangladesh before liberation as per schedule given below: Authorized

Paidup

New Bank

Capital

Capital

The National Bank of Pakistan.The Bank

Sonali Bank

(Lacs) 500

(Lacs) 200

of Behawalpur Ltd. The Premier Bank Ltd. The Habib Bank

Agrani Bank

500

100

Ltd. The Commerce Bank Ltd. The United Bank Ltd. The Union Bank

Janata Bank

500

100

Ltd. The Muslim Commercial Bank Ltd. The

Rupali Bank

500

100

Standard Bank Ltd. The Austrasia Bank Ltd. The Estem

Pubali Bank

500

100

Mercentile Bank Ltd. The Estem Banking Corporation Ltd.

Uttara Bank

500

100

Existing Bank

The banking system at independence consisted of two branch offices of the former State Bank of Pakistan and seventeen large commercial banks, two of which were controlled by Bangladeshi interests and three by foreigners other than West Pakistanis. There were fourteen smaller commercial banks. Virtually all banking services were concentrated in urban areas.

The newly independent government immediately designated the Dhaka branch of the State Bank of Pakistan as the central bank and renamed it the Bangladesh Bank. The bank was responsible for regulating currency, controlling credit and monetary policy, and administering exchange control and the official foreign exchange reserves. The Bangladesh government initially nationalized the entire domestic banking system and proceeded to reorganize and rename the various banks. Foreign-owned banks were permitted to continue doing business in Bangladesh. The insurance business was also nationalized and became a source of potential investment funds. Cooperative credit systems and postal savings offices handled service to small individual and rural accounts. The new banking system succeeded in establishing reasonably efficient procedures for managing credit and foreign exchange. The primary function of the credit system throughout the 1970s was to finance trade and the public sector, which together absorbed 75 percent of total advances.

After the liberation of Bangladesh the twelve Banking companies who were doing business in Bangladesh, were nationalized by the Government of People's Republic of Bangladesh under president's order no. 26 of 1972 entitled "The Bangladesh Bank (Nationalizations) order, 1972" on 26 March, 1972.

During 1983 Bangladesh Govt. allowed the private sector to sector to operate banking business. Now Banks are formed and operate under banking co. act 1991. At present there are 52 Banks operating their business in Bangladesh.

2.2. Relevant Laws/Acts for Bank /Financial Institutions: The following Law, Acts and Order are guiding Banks and Financial Institutionsoperating in Bangladesh: 1. The Artha Rin Adalat Act-1990 2. The Bangladesh Bank Order-1972 3. The Banker's Books Evidence Act-1891 4. The Banking Companies-Act-1991 5. The Bankruptcy Act-1997 6. The Bangladesh Bank (Nationalism) Order-1972 7. The Bill of Exchange Act-1882 8. The Companies Act-1994 9. The Contract Act-1872 10. The Co-operative Societies Act-1940 11. The Insurance Act-1938 12. The Pre-Shipment Inspection order-1999 13. The Partnership Act-1932 14. The Securities and Exchange commission Act-1993 15. The Foreign Exchange Regulation Act-1947 16. The Bangladesh Export Processing Zones Authority Act-1980 17. The Export Policy-1997-2002 18. The Guidelines for Foreign Exchange Transaction-1996 (Bangladesh Bank) 19. The Import Policy order-1997-2002 20. The Uniform Customs and Practice for Documentary credits (1993 revision, ICC) publication-500) etc.

2.3 Present Situation of E-Banking and Online Banking In Bangladesh, the expansion of e-banking is beset with several infrastructural, institutional, and regulatory constraints such as inadequate availability of reliable and secure telecommunication infrastructure, absence of a backbone network connecting the whole country, poor ICT penetration in the banking sector, lack of skilled manpower and training facilities, absence of supportive policies, guidelines, rules and regulations relating to etransactions and the like. Despite the constraints, efforts by the Bangladesh Bank in modernizing the country's payment system and commitment by the government in building ‘Digital Bangladesh’ have brought competition among the scheduled banks to improve banking services and rapidly adopt e-banking on a wider scale. This note provides a critical overview on development of e-banking in Bangladesh and future prospects for better understanding the issue that includes concept of e-banking, present status of scheduled banks in adopting e-banking services, and prospects of e-banking in Bangladesh on the basis of current trend in developing the ICT infrastructure in the country.

Despite huge demand from the business community as well as the retail customers particularly the urban customers, electronic banking (e-banking) in Bangladesh is still at a budding state due mainly to a number of constraints such as unavailability of a backbone network connecting the whole country; inadequacy of reliable and secure information infrastructure especially telecommunication infrastructure; sluggish ICT penetration in banking sector; insufficient legal and regulatory support for adopting e-banking and so on.

In Bangladesh, telephone connectivity is inadequate, cost of PCs are still beyond purchasing capacity of most people, internet connection is costly, IT literacy is yet to reach satisfactory level, banking sector lacks skilled IT personnel, and huge investment requirement for establishing technology based banking services are prime drawbacks. In this backdrop, with high potential of e-banking, Bangladesh Bank and the scheduled banks together need to come forward with necessary initiatives for successful introduction of e-banking in Bangladesh.

2.3.1 Present Status of E-Banking E-banking at per international standard is yet to develop in Bangladesh. At present, several private commercial banks (PCBs) and foreign commercial banks (FCBs) offer limited services of tele banking, internet banking, and online banking facilities working within the branches of individual bank in a closed network environment. As a part of stepping towards e-banking, the FCBs have played the pioneering role with adoption of modern technology in

retail banking during the early 1990s whereas the state-owned commercial banks (SCBs) and PCBs came forward with such services in a limited scale during the late 1990s. Moreover, the banking industry as a whole, except for the four specialized banks (SBs), rushed to offer technology based banking services during the middle of the current decade. The existing form of e-banking that satisfies customer demand in banking activities electronically throughout the world are PC banking or PC home banking that include online banking, internet banking, mobile banking, and tele banking.

2.3.1.1 PC Banking or PC Home Banking: PC banking refers to use of personal computer in banking activities while under PC home banking customers use their personal computers at home or locations outside bank branches to access accounts for transactions by subscribing to and dialing into the banks' Internet proprietary software system using password. PC banking or PC home banking may be categorized into two types such as online banking and Internet banking.

2.3.1.2 Online Banking: Transactions in online banking are performed within closed network for which the customer use specialized software provided by the respective bank. International standard online banking facilities are expanding in Bangladesh. At present, 29 scheduled banks offer any branch banking facilities through their respective bank online network that provides facilities like transaction through any branch under the respective bank online network; payment against pay order or pay order encashment, demand draft encashment, opening or redemption of FDR from any branch of the same bank; remote fund transfer, cash withdrawal, cash deposit, account statement, clearing and balance enquiry within branches of the same bank; and L/C opening, loan repayment facility to and from any branch of respective bank under its own online network. Inter-bank transactions or transaction between inter bank branches are yet to expand. Under the modernization program of the National Payment and Settlement System, Bangladesh Automated Clearing House (which includes Bangladesh Automated Cheque Processing System and Bangladesh Electronic Fund Transfer Network) is scheduled to come into effect from September 2009 followed by implementation of online banking at per international standard in near future.

2.3.1.3 Internet Banking: Internet banking refers to the use of internet as a remote delivery channel for banking services which permits the customer to conduct transactions from any terminal with access to the internet. It is the WWW through which banks can reach their customers directly with no

intermediaries. Internet banking in true sense is still absent in Bangladesh. Only 7 out of 48 banks are providing some banking services via internet that include account balance enquiry, 4 fund transfer among accounts of the same customer, opening or modifying term deposit account, cheque book or pay order request, exchange rate or interest rate enquiry, bills payment, account summary, account details, account activity, standing instructions, loan repayment, loan information, statement request, ,cheque status enquiry, stop payment cheque, refill prepaid card, password change, L/C application, bank guarantee application, lost card (debit/credit) reporting, pay credit card dues, view credit card statement, or check balance.

The core banking activities like fund transfer to third party, cross border transactions and so on are still uncovered by internet banking offered by the scheduled banks in Bangladesh.

2.3.1.4 Tele Banking: Tele banking refers to the services provided through phone that requires the customers to dial a particular telephone number to have access to an account which provides several options of services. Despite huge potential, tele banking services have not been widened enough in daily banking activities in Bangladesh. Only four banks so far provide a few options of tele banking services such as detail account information, balance inquiry, information about products or services, ATM card activation, cheque book related service, bills payment, credit card service and so on. Funds transfer between current, savings and credit card account, stock exchange transactions etc are still inaccessible through tele banking in Bangladesh.

2.3.1.5 Mobile Banking: Mobile banking (also known as M-banking or SMS banking) is a term used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone. Mobile banking is most often performed via SMS or the Mobile Internet but can also use special programs called clients downloaded to the mobile device. The standard package of activities that mobile banking covers are: mini-statements and checking of account history; alerts on account activity or passing of set thresholds; monitoring of term deposits; access to loan statements; access to card statements; mutual funds/equity statements; insurance policy management; pension plan management; status on cheque, stop payment on cheque; ordering check books; balance checking in the account; recent transactions; due date of payment (functionality for stop, change and deleting of payments); PIN provision, change of PIN and reminder over the internet; blocking of (lost/stolen) cards; domestic and international fund transfers; micro-payment handling; mobile recharging; commercial payment processing; bill payment processing; peer to peer payments; withdrawal at banking agent;3 and deposit at

banking agent. Despite huge prospects, only a few banks adopted mobile banking in Bangladesh during the last year.

Conclusions and Policy Recommendations: A well functioning e-banking network is dependent on availability of a backbone network connecting the whole country; reliable and secure information infrastructure including telecommunication infrastructure; ICT penetration in the banking sector; skilled operational personnel; and legal and regulatory framework. The government, Bangladesh Bank and scheduled banks are related to these issues. Therefore, both individual and joint efforts are needed to overcome the constraints in promoting e-banking in the country.

In respect to technology adoption, the PCBs and FCBs have attained greater success relative to other bank categories but their coverage is concentrated mainly in urban and semi-urban areas. The rural parts of Bangladesh still remain outside of their services. Since the SCBs and SBs have branches throughout the country including the rural areas, penetration of technology in banking activities of these two categories of banks are crucial to wider spread of e banking services. For the purpose, the management of these banks might allocate a part of their yearly profit for ICT penetration in banking activities and human resources development supported by fixed targets. In addition, several steps may be contemplated in order to accelerate the adoption of e-banking.

Internet penetration is a key factor for the growth of e-banking. Christiansen (2001) reports that the take off phase of Internet banking needs at least 30 percent Internet usage among the population. Moreover, since Internet penetration alone is not adequate for online banking expansion, the government may provide subsidy for surfing cost, organize training facilities with private partnership, widen multiple access facilities like web, telephone, ATM etc., and initiate motivation programs for the users and the target population. Moreover, adequate legal framework and security are essential for flourishing internet banking.

3.1. History of the National Bank Ltd: Bangladesh economy has been experiencing a rapid growth since the 90s. Industrial and agricultural development, international trade, inflow of expatriate Bangladeshi workers' remittance local and foreign investments in construction, communication, power, food processing and service enterprises ushered in an era of economic activities. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to canalize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country

grouped together to responded to this need and established National Bank Limited in the year 1983.

National Bank Limited was established on 23rd March 1983 with authorized capital TK. 100 million and paid up capital of TK. 80 million was subscribed by the sponsors/directors and TK. 4 million was subscribed to the government. Remaining TK. 36 million has been fully subscribed by the public. The management of the Bank is vested in a board of directors consisting of 21 members including the managing director of the Bank. Managing directors is the chief executive of the Bank. The Bank carries of deposits, investment of funds, financing of trades, businessmen, industrialists, importers and exporters etc. The National Bank Limited opened new branches eight during 1983, raising the total number branches 122 in 2009, total number of employees of the Bank was 242 in 1983 and increased to 2960 in 2009, and during the short periods of its operation the Bank has made notable progress in various activities.

NBL determined to bring back the long forgotten taste of banking services and flavors. NBL want to serve each one promptly and with a sense of dedication and dignity. The then President of the People's Republic of Bangladesh Justice Ahsanuddin Chowdhury in angulated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started commercial operation on March 23, 1983. The 2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong. At present; NBL has been carrying on business through its 122 branches spread all over the country. Besides, the Bank has drawing arrangement with 415 correspondents in 75 countries of the world as well as with 32 overseas Exchange Companies. NBL was the first domestic bank to establish agency arrangement with the world famous Western Union in order to facilitate quick and safe remittance of the valuable foreign exchanges earned by the expatriate Bangladeshi nationals.

NBL was also the first among domestic banks to introduce international Master Card in Bangladesh. In the meantime, NBL has also introduced the Visa Card and Power Card. The Bank has in its use the latest information technology services of SWIFT and REUTERS.NBL has been continuing its small credit programmed for disbursement of collateral free agricultural loans among the poor farmers of Barindra area in Rajshahi district for improving their lot. Alongside banking activities, NBL is actively involved in sports and games as well as in various Socio-Cultural activities. The Bank established extensive drawing arrangement network with Banks and Exchange Companies located in important countries of the world.

Expatriates Bangladeshi wage earners residing in those countries can now easily remit their hard-earned money to the country with confidence, safety and speed. The number of

workforce of NBL stood at 2239, which include 1689 officers and executives’ and 550 staff.

Now NBL is on line to establish trade and communication with the NBL International banking companies of the world.

As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency "Western Union". It has a full time arrangement for speedy transfer of money all over the world.

Transparency and accountability of a financial institution is reflected in its Annual Report containing its Balance Sheet and Profit and Loss Account. In recognition of this, NBL was awarded Crest in 1999 and 2000, and Certificate of Appreciation by the Institute of Chartered Accountants of Bangladesh.

With a strong sense in all business areas commercial banking, NBL could foresee tremendous growth in home in homebound remittance form Bangladesh expatriates in USA and UK, Middle East and different countries of the world. Consecutively NBL established a unique money remittance system with Western Union of USA for inbound and outbound remittance.

National Bank Limited is one of the leading private commercial bank having a spread network of 122 branches across Bangladesh and plans to open few more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2010.

National Bank Limited has been licensed by the Government of Bangladesh as a Scheduled commercial bank in the private sector in pursuance of the policy of liberalization of banking and financial services and facilities in Bangladesh. In view of the above, the Bank within a period of 26 years of its operation achieved a remarkable success and met up capital adequacy requirement of Bangladesh Bank.

National Bank Ltd is one of the leading banks which introduced first Credit Card in Bangladesh. Our technology has been upgraded to manage the growth of the bank and meet the demands of our customers. ATMs now allow customers to retrieve 24/7 hours cash withdrawals. National Bank Limited is a customer oriented financial institution. It remains dedicated to meet up with the ever growing expectations of the customer because at National Bank, customer is always at the center.

National Bank Limited has its prosperous past, glorious present, prospective future and under processing projects and activities. Established as the first private sector Bank fully owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain. The member of the board of directors is creative businessman and leading industrialist of the country. To keep pace with time and in harmony with national and international economic activities and for rendering all modern

services, NBL, as financial branches with computer network in accordance with the competitive commercial demand of time. Moreover, considering its forth-coming future the institution automated all its infrastructure of the Bank has been rearranging Keeping the target in mind NBL has taken preparation to open new branches by the year 2007. The emergence of National Bank Limited in the private sector is an important event in the Banking arena of Bangladesh. When the nation was in the grip of severe recession, Govt. took the farsighted decision to allow in the private sector to revive the economy of the country.

3.2 Corporate Information TABLE : 1 CORPORATE INFORMATION

Incorporation of the Bank

15.03.1983

Certificate of commencement of Business

20.03.1983

Licensed issued by Bangladesh Bank

22.02.1983

Licensed issued by Bangladesh Bank for opening the First branch, Dilkusha Branch

22.03.1983

Formal Lunching of the Bank

23.031983

Commencement of Business of Dilkusha Branch

23.03.1983

Listed with Dhaka Stock Exchange

20.12.1984

Publication of prospectus

30.12.1984

Date of first public subscription (IPO)

14.01.1985

Trading of shares in DSE

21.04.1985

Association with Gulf exchange Pte Ltd

26.11.1985

Signing in agreement with Western Union Money Transfer

16.05.1993

Listed with Chittagong Stock exchange

06.11.1995

Trading of Shares in CSE

06.11.1995

Listed with CDBL

29.09.2004

Inauguration of Balaka Exchange Pte Ltd

08.07.2007

Registration Certificate as Stock Broker

24.10.2007

(Source: National Bank Limited annual Report, 2009)

3.3 Vision of National Bank Limited Ensuring highest standard of clientele services through best application of latest information technology making due contribution to the national economy and establishing ourselves firmly at home and abroad as a front ranking bank of the country are our cherished vision.

3.4 Mission of National Bank Limited Efforts for expansion of our activities at home and abroad by adding new dimensions to our banking services are being continued unabated. Alongside, we are also putting highest priority in ensuring transparency, account ability, improved clientele service as well as to our commitment to serve the society through which we want to get closer and closer to the people of all strata. Winning an everlasting seat in the hearts of the people as a caring companion in uplifting the national economic standard through continuous up gradation and diversification of our clientele services in line with national and international requirements is the desired goal we want to reach.

3.5. Objectives of National Bank Limited •

Bringing modern Banking facilities to the doorstep of general public through diversification of Banking services, thereby arousing saving propensity among the people.

•

Foreign a cordial, deep-rooted and firm banker-customer relationship by dispensing prompt and improved clientele services.

•

Taking part in the development of the national economy through productive deployment of the Bank’s resources as well as patronizing different social activities.

•

Connecting clients to modern banking practices by the best application of improved information technology, so that they get encouraged to continue and feel proud of banking with NBL.

•

Ensuring highest use of the professional workforce through enhancement of their aptitude and competence.

•

Responding to the need of the time by participating in syndicated large loan financing with like-minded Bank’s of the country, thereby expanding the area of investment of the Bank.

•

Elevating the image of the Bank at home and abroad by sustained expansion of its activities.

3.6. Business Goal To patronize, sponsor and encourage games and sports, entertainment and other socioeconomic activities, alongside providing the best services to the clients.

3.7. Line of Business of NBL •

Investment Banking (Capital Market Operation In DSE and CSE)

•

Lease Finance

•

Investment In Government and provide Security

•

International Trade Finance (Import, Export)

•

Foreign Exchange Dealing (Currency Dealing, Remittance)

•

Money Market Operations (Call Money Market)

•

Corporate Finance

•

Syndication

•

SME Banking

•

Personal Banking (Auto Loan, Vocational Loan, Personal Loan)Housing Finance

•

Transport Loans

•

Remittance Operations

3.8. Branches of NBL

NBL which was started at Dilkusha Branch on March 23rd, 1983 was the first and major private commercial Bank in Bangladesh operating throughout the country as well as the age of the Bank is only 18 years. During this period it has established total 76 branches over the country and made a smooth network in side the country as well as throughout the world. working Branch, that is Elephant Road Branch is established in 1985. Recently the bank establish its new branch named Rifles Square Branch in Rifles Square market, 80 Pilkhana, Dhanmondi, Dhaka in June, 2010. And was physically present there in the branch opening day. The number of Branches as territory wise is mentioned in the table-

Area-wise Branches Division Area

Number of Branches

Dhaka Area

48

Chittagong Area

29

Rajshahi Area

16

Khulna Area

08

Sylhet Area

16

Barisal Area

05

Total Branches

122

4.1 General Banking General banking is the starting point of the banking operation. It is the department which provides day-to-day services to the customers. Main functions of general banking department are the following:

GENERAL BANKING Account Opening and Closing Section Remittance Collection Section Bills and Clearing Cash Section Account Section

(Source: National Bank Limited)

4.1.1 Account Opening and Closing The relationship between banker and customers begins with the opening of an account by the customer. Opening accounts binds the banker and customers into contractual relationship. But selection of customer for opening an account is very crucial for a bank. In fact, fraud and forgery for all kinds start by opening an account. So bank should take extreme caution in this section. A customer can open different types of accounts through this department.

There are some requirements that have to be completed for opening an account.

4.1.1.1 Savings Account {Individuals/ Joint} : Savings account (SB) is meant for the people of the lower and middle classes who wish to save part of their incomes to meet their future needs and intended to earn to an income from their savings. For opening of this type of accounts following requirements are necessary:

When a person will do this A/C, the important things are necessary.

1. Two copies of photographs attested by the introducer.

2. An introducer of National bank Bangladesh Ltd. Introducer must have the SB account holder.

3. Photocopy of passport/Chairman Certificate/Attested of First Class Officer/Voter ID Card.

4. Two copies of photographs.

5. KYC (Know Your Customer) form.

6. For joint accounts, signatures of all the account holders are necessary.

The interest rate on deposits are being revised with effect from 01.08.2009 Types of Deposit Savings Bank Deposit (SB) Short Term Deposit (STD): Less Than Tk. 1.00 crore Tk. 1.00 crore and above but less than Tk. 5.00 crore Tk. 5.00 crore and above but less than Tk. 10.00 crore Above Tk. 10.00 crore Bank to Bank

Deposit Rates 6.00% 8.00% 8.25% 8.50% 9.25% 9.50%

Source: National Bank Ltd, Interest Rate 2009)

4.1.1.2 Current Account Current account is the account where the account holders can make numerous transactions with in working day. There is no restriction on the number and the amount of withdrawals from the current account with in availability of funds. As the banker is under the obligation to repay this deposit on demand, no interest is paid in this account. Generally current account is opened for businessmen and traders for easy transaction. But a person can open a current account for special purpose. The following documents are required to open these types of accounts: Company Account:

A separate account opening form is used for limited company. There are two kinds of limited company public limited company and private limited company. The bank always takes precautions for opening this type of accounts. Several documents are submitted by the client, which should be checked carefully by the bank to legally in a safe position. The following documents are required to open this type of accounts: 1. Common Individual of S/A. 2. Trade license.

3. Memorandum or articles of association.

4. Certificate in Corporation.

5. Regulation of full board with signature.

6. List of Directors.

7. Organizations seal.

8. Certificate of commencement.

9. STD (Short term Deposits).

10. Requirement same as individual A/C. 11. STD (Public and Private) 12. Requirement same as Public and private A/C. 4.1.1.3 Fixed Deposit Revenue {FDR} FDR is one kinds of fixed deposit scheme. Normally it can be fixed for 01 Month, 03 month, 06 month and 12 month. Its interest rate is higher than normal account.

The required document for FDR is as follows: •

PP size photos (account holder)

•

One PP size photo (nominees)

•

Photocopy of national ID card.

The interest rate on deposits is being revised with effect from 18/11/2008.

Types of Deposit (FDR) 01 Month

Deposit Rates 7.00%

03 Month

11.75 %

06 Month

12.50%

12 Month 13.00 % (Source: National Bank annual Report, 2009) No.

Monthly Deposit Amount

3 Years @ 9%

5 Years @ 9.25%

8 Years @ 9.00%

(Taka) 01.

500/-

20,627/-

37,896/-

70,849/-

02.

1000/-

41,255/-

75,791/-

1,41,697/-

03.

2000/-

82,510/-

1,51,583/-

2,83,394/-

04.

3000/-

1,23,765/-

2,27,378/-

4,25,091/-

05.

4000/-

1,65,020/-

3,03,166/-

5,66,788/-

06.

5000/-

2,06,274/-

3,78,957/-

7,08,485/-

07.

10000/-

4,12,549/-

7,57,914/-

14,16,970/-

4.1.1.4

Monthly Saving Scheme (NMSS) : (Source: National Bank Ltd. Report, 2009)

Monthly saving scheme is an account where people deposit money for a fixed period of time at a fixed interest and withdraw money at once. Different types of amount and interest rate are given by the bank to generate client’s savings

4.2 Remittance Sector The commercial Bank Remittance facilities to its customer is to enable them top avoid risk rising out of profit or loss in cash carrying cash money to one place to another or making payment to someone in another places. Banks take this risk remit the fund on behalf of the customers to save them from any awkward happening through the network of their branches and ensure payment to the beneficiary.

4.3 Bills and Clearing Section According to the article 37(2) OF Bangladesh Bank order, 1972, the banks which are the number of clearinghouse are called as schedule banks. The schedule banks clear the cheque drawn upon one another through the clearinghouse. This is an agreement by the central bank where every day the representative of the member banks gather to clearing the cheque. Banks for credit of the proceeds to the customer’s account accept cheque and other similar instruments. The bank receives many such instruments during the day form account holders.

Many of these instruments are drawn payable at other banks.

The department in the branch that involves in clearing cheque is known as clearing department. The function of this department is – o Preparation of clearing Outward and Inward Lodgment and record maintenance of the same. o Batch posting as when required.

The procedures are as follows.

The collecting instrument will be received with a credit voucher and customer part of the credit voucher will be returned with a received seal. The collecting cheque will be crossed specially.

An entry has to be given in the outward clearing register along with clearing seal. The cheque has to be sent in National Bank Ltd Local Office and Local Office will clear clearinghouse of Bangladesh Bank.

But when the cheque is drawn for collection form other branch of National Bank Ltd, within the range of it clearing area then it no need to go the clearinghouse Bangladesh Bank. This type of cheque can be collected through inward clearinghouse of National Bank Ltd itself. At the time of sending instruction of outward clearing the following account procedure has to be done.

Essential things for clearing the instrument: There are three Essential things for clearing the instrument: •

Crossing seal.

•

Endorsement seal.

•

Clearing seal.

4.4 Cash Section Cash section is a very sensitive organ in a branch and is handling with extra care. Operation of these section beings at the beginning of the banking hour. Cash officer being his transaction with taking money form the vault, known as the opening cash balance. Vault is kept in a much secured room. Keys to the room under control of the cash officer and branch in charge. The amount of opening cash balances entry into the cash register. After transaction of whole day, the surplus money remain in the cash counter is put back in the vault and

known as the closing balance. The maximum amount of money that the branch can kept in its vault is only TK. 1, 50, 00,000/- according to the permission of the Bangladesh Bank and relative insurance policy. Money is received and paid in this section.

4.4.1 Cash Receipt •

At first the depositor fills the deposit slip. There are two types of deposit slip in this branch. One for saving account and another for current account.

•

After filling the required deposit slip, depositor the money.

•

Officer at the cash counter receives the money, count it, enter the amount of money in the scroll register kept at the counter, seal the deposit slip and sign on it with date.

•

Then this slip is passed to another officer who enters the scroll number given by the cash counter in his register along with the amount of the money, signs the slip and kept the bank’s part of the slip. Other part is given to the depositor.

•

At the end of the day entries of the both of the register are cross cheque used with the register kept at the cash counter to see whether the transaction is correct or not.

4.4.2 Cash Payment •

When a person comes to the bank to cash a cheque he first gives in to if the account have sufficient fund in the computer in charge will post it into the computer.

•

There are two computer desks. One for saving account and other for current account. So cheque is deposited at respective computer desk. If the cheque is not dishonor the bearer will get a token as to show that he is the true owner of the cheque while receding the money form cash counter.

•

This cheque is then sent to the concern officer. The concerned officer verifies the cheque.

•

The officer first checks carefully it has any kind of fraudulent activity. He also check the date of the cheque amount in word in figure and signature of the drawer in the face of the cheque and back side of the cheque. In cash of barer cheque will also put a signature at the back side.

•

The officer then put his initial beside the bearer signature. Officer will also sign it on its face. Will write down the amount by red pen will put on a scroll number from his scroll register.

•

After this primary procedure the cheque will sent to the cash counter. If it is a bearer cheque then bearer is ask again to sign on the back of the instrument which is also match with the bearer signature.

•

If everything is found alright the cash officer will then enter the scroll number in his registers and will pay the money to the bearer or drawer.

Dishonor of Cheque •

Insufficient fund.

•

Payment stopped by drawer.

•

Alteration required drawer signature.

•

Effect not clear in the cheque.

•

Exceed arrangement in the cheque.

•

Full cover not received.

•

Payee’s endorsement irregular.

•

Drawer signature different and required.

•

Cheque is post dated.

•

Crossed cheque must be presented through a bank.

•

Clearing stamp must be required cancellation.

•

Cheque crossed “Accounts pay only”.

•

Collecting bank discharge irregular.

•

No advice.

•

Pay order by the treasury officer required.

•

Cheque is mutilated.

4.5 Deposit Section The function of the deposit section is very important. It is fully computerized. The Officer of the deposit section maintains account number of all the customers of the bank. They are used different code number for different account. By this section a depositor can know what is the present position of his/her account. The officer makes three types of transactions such as cash, clearing and transfer. This section performs the following task: •

•

Post all kind of transaction •

Provide on demand report.

•

Cheque maintenance.

•

Preparation of day transaction position.

•

Preparation of closing monthly transaction.

Closing Accounts •

If the customer is willing to close his account.

•

Death of the customer.

•

Customer’s insanity and insolvency.

•

If the branch finds any reasonable ground for closing the account.

•

If there is any notice issued by the Court on the bank branch close the account.

In order to close the account, the checkbook is to be returned to the branch. Required charges are realized from the account and the remaining balance is then paid to the customer.

Necessary entries are posted to the “A/C Closing Register” and in the computer as well. In case of joint account the application for closing the account should be signed by the joint account holder. The fee for the closing an account is TK. 200 for SB, CD, and STD account.

4.6 Account Section Accounts department maintains the process of recording classifying, identifying and Calculation of all transaction. It maintains clean cash book, supplementary, voucher register etc. Here also maintains Daily statement, weekly statement, monthly statement etc. We can know about the total profit or loss from the statement of affairs. In clean cash book there are

records of three different areas namely cash, clearing and transfer. And here both debit and credit side has to be equal. It is maintained daily basis. After calculating all of these there will be opening balance and closing balance. The closing balance of today will be the opening balance of tomorrow. Finally there will be a great total. In clean cash book there is also the number of total debit voucher and credit voucher.

4.7 Loans and Advance Section National Bank Ltd. Introduced Consumer Credit Scheme for its customer approved by the Board of Directors of the Bank with the following loan products: 1. General Loan 2. House Building Loan Staff(EHBL) 3. House Building Loan (general) 4. Secured Overdraft (SOD) 5. Cash Credit (CC) 6. Packing Credit 7. Car Loan (Staff) 8. Consumer credit Sceme (General) 9. ADV. AGN. Credit Card 10. Small and Medium Enterprise (SME) 11. NBL Housing Loan 12. NBL Small Business Loan 13. Lease Financing etc There are some other loan considering the market demand and investment opportunities in Consumer business NBL has formulated the following 4 (Four) products for National Bank Limited. The Four products loans are given below.

•

Auto Loan.

•

Consumer Durable Loan.

•

Secured Personal Loan.

In Loans and Advance Department I did a Case Study On Lease Financing of Trisha Fashion

4.7.1 : Case Study ; Lease Financing of Trisha Fashion : Trisha Fashion is a garments knitting Industry whose Propreitor is MR. MD. Feroz Ahmed.

For their knitting purpose they need 2 Embroydary Machine : 1. Tajin Machine 2. SWF Machine For buying those two machine, Trish Fashion made a lease financing with National Bank Ltd, Elephant Road Branch which Value is TK 60 lac. Besides, Trisha Fashion is containing A Cash Credit (CC) loan with NBL which is TK 35 lac in limit The lease distribution of TK 60 lac of Trisha Fashion is : Lease Amount

TK 50,00,000

Down Payment Total

TK 10,00,000 TK 60,00,000

The Mortgase of this Lease Financingis a six storied Building in Mirpur which is 1840 sq ft in each floor. The total is (1840*6)=11040 sq ft.

Calculation of Mortgage Value: Particulars Land 4.95Dec @19,39,000 Building 11040 sq ft @1200 Total Distress Value (10% off) Forced Sale value of Mortgage

Amount Taka 95,98,050 1,32,48,000 2,28,46,050 22,84,605 2,05,61,445

So the Trisha Fashion got the Lease Amount of TK 60 lac

4.8 Job Rotation :

Lease Period

60 Monthh

Interest Rate 14% P.A. Lease

Rental

(Monthly)

TK

1,16,341 Application fee TK 500 Service Charge TK 7500 As an internee work in National Bank Ltd. for three months. During internee period work in the various department. To gather my knowledge about the general banking sector divided my internee period that work every department of the bank. The Job Rotation period during intern period are as follows

Table : 2 : Job Rotation Departments

Duration

Date

General Banking

1 Month

12/05/10 - 12/06/10

Advances

15 Days

13/06/10 - 27/06/10

Foreign Exchange

15 Days

28/06/09 - 12/07/09

Remittance

1 Month

12/07/10 - 12/08/10

Financial Performance of NBL The overall performance of NBL is remarkable. For mentioning the performance of the bank it is showed the immediate last five years performance of the following tables and the total particulates are arranged in the tables and graphs:

5.1 Assets of NBL The total assets of the Bank grew up by 27.53 percent that is TK 92,084 million in 2009 where it was Tk.72,205 million in 2008. The significant increase in assets was achieve due to rise in loans and advances, investments, money at call, short notices, cash and balances with other banks and financial institutions etc. Cash in hand and Balance with Bangladesh Bank is TK 5,660 million and Balance with other Bank is TK 1,890 million at the end of December 2008. The deposits growth increases the balance with Bangladesh Bank and its agent for maintaining the cash requirement (CRR).

(Illustration: 1 Assets of NBL) (Assets of NBL)

5.2 Liabilities of NBL Total liabilities increased by 25.86 percent to TK 83,168.02 millon as of 31 December, 2009, This was mainly due to increase in customers deposits and keeping provision for income tax, gratuity and loan loss etc,

(Illustration : 2 Liabilities of NBL) Source: National Bank Annual Report, 2009

5.2.1 Borrowings from Others Bank (Illustration: 3) The borrowings from other banks financial instituations and agent increased by 82.85 percent in 2009 over the last year. Borrowing from Bangladesh Bank under the head of Export Development Fund (EDF) was the prime contributory factor for the growth.

(Illustration: 3 Borrowings from Others Bank) Source: National Bank Annual Report, 2009

5.2.2 Other Liabilities

Other liabilities increased by tk.1, 324.60 million due to current tax liability and for making provision for loan loss. Provision for income tax was tk.1, 310 million in 2009 compared to tk.796.99 million in the previous year.

5.3. Deposits of NBL The deposit base of the bank registered a growth of 27.66 percent in the reporting year over the last year and stood at TK 76,838.64 million. Expansion of branch network, competitive interest rate and innovative deposit products contributed to the growth.

(Illustration : 4 Deposits of NBL) Source: National Bank Annual Report, 2009

5.4 Operating and Net Profit National Bank Limited generated an operating profit of TK. 3,397.70 million in 2009 which was Tk. 3123.82 million in 2008 registration a growth of 8.77 percent. Net profit after tax grew by 36.45 percent to Tk. 2,070.47 million in 2009 after making provision for loan loss and income tax for Tk.200.00 million and Tk. 1,150.00 million respectively.

(Illustration : 5 Profit of NBL) Source: National Bank Annual Report, 2009

5.4.1 Income Interest Income increased by 34.95 percent from Tk.5, 787.90 million in 2008 to 6,821.48 million in 2009 due to growth of advances. The average yield on advances was 12.94 percent in the reporting year while it was 12.13 percent in the previous year.

The income from investment declined sharply by 15.55 percent to Tk.937.70 million in 2009 from Tk.1, 110.40 million in 2008. Commission and exchange earnings increase by 20.57 percent from Tk.1, 254.20 million in 2008 to Tk.1, 512.10 million in 2009.

5.4.2 Expense Overall increase of deposits pushed up the interest expense by 26.87 percent from Tk.2,174 million in 2008 to Tk.3,118 million in 2009. Salary and allowances increased by 11.98 percent due to early increment and for new appointments. Rent and Taxes, insurance premium utility charges etc increased by Tk.18.70 million during 2009.Total operating expense was Tk.2,174 million in 2008.

5.4.3 Capital Stock Dividend of 55 percent was declared for the year 2007 which increased the paid-up capital of the bank from Tk.1, 208.21 million to Tk.1, 872.72 million in 2008 while in 2008 while its authorized capital was Tk.2, 450 million. The reserve enhanced by Tk.565.60 million in 2008 after maintaining 20 percent pre-tax profit. The total equity of shareholders of the bank stood at TK.6, 126.30 million at the end of the year 2008.

Core Capital (Tier-1)

2009 Million

2008 Million

Paid-Up-Capital

2,846.50

1,872.72

Statutory Reserve

2,418.40

1,778.88

Retained Earning

1,567.20

975.13

General Reserves

497.70

632.72

Provision for unclassified loans

959.90

784.91

Exchange Equalization Accounts

41.40

41.37

Other reserve

793.40

433.41

Total Capital

9124.50

6,519.14

Total risk Weighted Assets

1,05,986.20

48,562.76

Core Capital (Tier-2)

Source: National Bank Annual Report 2009

5.4.4 Capital Management NBL. has a consistent dividend policy. In line with that Stock Dividend of 52 percent was declared for the year 2008 which strengthened paid-up capital base and it stood at Tk.2,846.53 million 2009 against authorized capital of 7,450.00 million. The statutory reserve enhanced by 35.95 percent to Tk.2,418.37 million in 2009 after transferring 20 percent on pre-tax

(Illustration : 6 Capital of NBL) Source: National Bank Annual Report, 2009

On Core Capital

Required 2009 5.00%

2008 5.00%

Actual 2009 2008 10.89% 10.83%

On Supplementary Capital On Total Capital

5.00% 10..0%

5.00% 10.00%

2.67% 13.56%

2.59% 13.42%

Source: National Bank Annual Report 2009

(Illstration : 7 Capital Adequacy Ratio of NBL) Source: National Bank Annual Report 2009 Capital Management of the Bank is to maintain an adequate capital base to support the projected business and regulatory requirement. NBL always maintain a prudent balance between Tier- 1 and Tier-2 capital. The Bank has maintained overall capital adequacy at 13.56 percent in 2009 of which 10.89 percent and 2.67 percent as Tier-1 and Tier-2 capital respectively against Bangladesh Bank's requirement of 10 percent.

5.4.5 Treasury Treasury is the key point of the Bank to manage the liquidity in both local and foreign currency by ensuring maintenance of CRR, SLR and Exchanges position of the bank. They are also assigned for measuring monitoring and controlling deposit advance ratio, The daily average investment of the treasury in local currency was Tk 10,629.10 million in the form of Call Lending, Term Lending, Reverse Report, Debentures and Govt. Securities.

The yield was 1.17 percent higher than previous year. Like previous year, inflow of foreign currency of the current year was higher than the previous year. Treasury was actively participated in inter bank market, both in local and foreign currency

( Illustration : 8 Investments of NBL) Source: National Bank Annual Report, 2009

The Treasury of the Bank handled an inflow of USD 1, 181.07 million and outflow of USD 1, 193.33 million with a growth of 33 and 37 percent respectively. The growth of income from Foreign Exchange stands 14.69 percent over the previous year.

5.5. Loans and Advances National Bank Limited designed to increase its loans and advances despite the current wave of global recession registering a growth of 36.16 percent with a total loans and advances portfolio of Tk.49, 665.1 million in 2009 compared to 2008. The growth was due to injecting significant amount of fund in new ventures of syndicate loan, Project loan, lease finance, SME, Agri loan, etc. as usual growth in foreign trade. ( Illustration: 8 Loans and advance of NBL) Source: National Bank Annual Report, 2009

NBL was cautious in the latter half of the year when the global economy started to melt down into a possible recession. Financing trade and commerce remained a strong focus on multidimensional industries in textile, telecommunication and pharmaceuticals sectors. To uplift the base for further export growth financing on RMG sector was given extensive support.

5.5.1 Classified Loans and Advances One of the top most priorities of the bank is to realize the classified loans and advances. The amount of classified loans was Tk.2, 729.32 million as on 31.12.08 showing an increase of 65.30 percent where it was Tk.1, 651.1 million in 2007. Though few loans and advances were turned into non-performing due to some external political and economic factors, the bank has been able to contain its volume within a tolerable level of 5.50 percent of the total advances by exerting all out efforts. During the year under review, the bank recovered classified Loans and advances and written off Loans for Tk.236.4 million and Tk.153.4 million respectively.

(Illustration: 10 Non Performing Loan of NBL)

Source: National Bank Annual Report, 2008

5.6 Foreign Trade As in the previous years, National Bank was keenly active in international trade during the year 2008 and financing of export import trade mobilization of wage-earners remittances from abroad etc. Besides the Bank expanded its external business by undertaking export bill negotiations realization of export proceeds foreign remittance etc.

5.6.1 Imports The Bank opened a total number of 24,385 LCs amounting USD 1,117.61 million in import trade in 2009. The main commodities were scrap vessels, rice, wheat, edible oil, capital machinery, petroleum products, fabrics and accessories and other consumer items.

5.6.2. Exports The Bank has been nursing the export finance with special emphasis since its inception. In 2009 it handled 18,761 export 2009 it handled 18,761 export documents valuing USD 559.78 million with a growth of 5.41 percent over the last year. Export finances were made mainly to readymade garments, knitwear, frozen food and fish, tanned leather, handicraft, tea etc.

( Illustration:11 Export and Import)

5.7 Foreign Remittance In 2008 foreign remittance brought into the country through NBL was YSD 582.47 million showing an increase of USD 179.90 million over the previous year which registered an attractive growth of 45 percent. This growth was possible due to introduction of different instant payment products and technology including extending SWIFT, online EFT etc and further efforts are being made for more speedy payments.

(Illustration: 12 Remittance of NBL) Source: National Bank Annual Report, 2009

To make the service available at the nearest point of the beneficiaries, NBL entered into a deal with ASA a leading NGO of the country for speedy payment of inward foreign remittances from its 3,000 outlets throughout the country in addition to our branches.

6.1.1 Introduction: Flow of workers’ remittances in Bangladesh exhibited a continuously increasing trend over the last 30 years in both absolute and relative terms. While total remittance to Bangladesh was only USD 24 million in 1976, the amount stood at USD 9689.26 million in 2008.

Bangladesh was the 10th largest recipient of remittances among the developing countries considering the average for the period 1990 to 2005 (IFS, October 2007). It ranked 14th among all of the remittance-recipient countries in terms of the amount of remittances received in 2005 (Global Economic Prospects, GEP 2006, WB). Flow of worker’s remittances in Bangladesh reached new heights at the end of fiscal year, FY07 as the remittance-GDP ratio jumped to 9.4 percent from 7.7 percent in FY06. Average remittances relative to imports and exports increased to 38 and 49 percent respectively during FY02FY07 period from 22 and 31 percent respectively in FY97-FY01 period.

Remittance generates remarkable benefits for the home country economy in terms of macro and microeconomic impacts. The remitters, most of whom were once unemployed in the home country, are now getting employed in the host country, and on the other hand, the inward remittance is causing employment generation domestically by reinforcing national savings, capital accumulation and investment. Over and above the employment aspect, many other key macroeconomic variables in Bangladesh such as growth, poverty reduction, social security, BOP situation have proven to be significantly positively related to remittances It is strongly opined in the Global Economic Prospects (GEP 2006, WB) 2006 that remittances have given rise to a decline in the poverty headcount ratio by 6 percentage points in Bangladesh during 1990-2006.

6.1.2 Means of Transferring Remittances: Migrant workers generally transfer their remittances either through formal or informal channels. The former refers to the official Wage Earner’s Scheme (WES) and to all recorded foreign exchange transactions. It includes principally demand drafts, Telegraphic transfers and postal orders, channeled through banks or post offices. The prominent informal mode is the Hundi system - a method that bypasses the banking system to transfer money or goods through friends, relatives or trusted agents. In other words, informal channels refer to various means and ways of sending remittances in cash or kind into Bangladesh with no official approval or record. These clandestine flows do not appear in government statistics nor do they figure in government policy making.

1

6.1.2.1 Formal channels:

1.2.1.1 Demand draft: The sender in the host country takes out a demand draft from a bank or from an exchange house and sends it to the receiving party in Bangladesh through regular postal services or other means. The bank or the exchange houses in the destination country charges a commission, which varies from bank to bank, for their service. So, the transaction cost of the sender is the service charge plus the postal expenses. The receiving party upon receipts of the draft deposits it in the local bank where he/she has an account. The local bank with clearance from the foreign exchange branch in the head office makes payment to the holder of the draft.

The time required to liquidate the money depends on this clearing process. If the draft is made from a bank on an average it takes about 14 days to liquidate the money. But if the draft is made from an exchange house, and the Bangladeshi bank had arrangements with the exchange house payment is made instantly.

6.1.2.2 Informal channels: Informal transfer can be broadly classified into two types: cash and kind.

1.2.2.1 Transfer in cash: (i) Cash/ Traveler's cheque: Migrants or their friends and relatives bring foreign exchange without declaring it to the appropriate authority. This can be in the form of cash or traveler’s cheque. This foreign exchange can either be sold to black market dealers in foreign exchange or kept for personal use.

1

(ii) Hundi system: The main method of informally transferring money into Bangladesh is through the use of the Hundi system. The Hundi operator/agent is, in

fact, an illegal foreign exchange dealer. The sender gives the Hundi operator in a foreign country the currency of that country or dollars or pounds or any acceptable currency by the operator while his relatives or agents in Bangladesh receive an equivalent amount of money in Taka. The agent in Bangladesh is contacted by telephone, fax or e-mail by the Hundi agent in the host country and the sub-agent pays the money to the relative of the sender. The Hundi rate is usually 1-2% higher than the official exchange rate. Even if the Hundi and WES rate is the same, the migrant still saves money by not paying commission charges etc.

The Hundi agent in the host country or in Bangladesh does not charge a commission. But they make a profit by selling dollars in the kerb market at a higher rate than the rate paid.

Smuggling seems to be closely linked to Hundi business. A Bangladeshi businessman cum smuggler may need dollars and is willing to pay more than the official rate. He pays the Taka here and receives the equivalent dollar amount in UAE or Singapore, buys goods/machinery, brings these back, sells them in the local market and makes a profit. Thus remittance money eventually arrives in Bangladesh in the form of smuggled goods.

1.2.2.2 Transfer in kind: 1. Under Baggage Rules, Bangladeshis are allowed to bring about consumer durables, gold, electronics items, etc. for personal use. Many migrants subsequently sell most of these consumer goods for Taka, even though this is prohibited.

2. Gold and consumer durables are transferred to Bangladesh through different Seaports and Airports.

6.1.3 Trends and Patterns of Remittances in Bangladesh: 6.1.3.1 Historical trend: In Bangladesh Bank’s Annual Report 2003-04 it is opined that the recent boost in remittances has been attributed to the efforts to encourage remittances through official channel by adoption of measures such as opening of new exchange houses in source countries, expansion of drawing arrangements, setting an annual remittance threshold, close monitoring and supervision of banks, speeding up of delivery to the beneficiaries and more importantly, surveillance measures under the Money Laundering Prevention Act.

Resilience of remittance: As demonstrated in Figure-2, remittance has proved to be the most stable and resilient amongst the external sources of income. It is categorically seen from the figure that while export, net FDI and foreign aid display unstable movement, remittances have maintained a relatively stable uptrend in spite of frequent economic shocks.

Figure : Remittances: the Most Stable Source of External Income

6.1.4 Importance of remittance vis-Ă -vis other macroeconomic variables: An interesting way of analyzing the dynamics of remittances is to examine the trend lines of remittances as a share of key macroeconomic variables such as export, import, GDP, Annual Development Program (ADP) etc. The figures as presented by Table-2 provide an idea about the relative importance of remittances relative to the key macroeconomic variables and the variation of this importance over time. According to the table, remittances in Bangladesh as a percentage of most key macroeconomic variables showed upward trend during the period from FY95 to FY06. Most importantly, the remittance-GDP ratio touched 7.75 percent mark in FY06 as compared to 3.5 percent in FY97. Over all, upward tendency of the share testify to the popular view that remittances are gradually providing more and more important contribution in our GDP over time.

Table : 3 Remittances as Percentage of Key Macroeconomic Variables Remittances as Percentage of Key Macroeconomic Variables Year

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

Remittances/Tax revenue Remittances/ ADP

45.0

46.0

52.0

57.0

52.0

66.0

71.0

70.0

74.0

87.0

57.0

63.0

66.0

63.0

63.0

115.0

118.0

Remittances/ Domestic savings Remittances/ Domestic investment Remittances/ Export

22.0

20.0

21.0

23.0

22.0

102.

0 29.0

32.0

31.0

126. 186.0 0 32.0 38.0

17.0

16.0

17.0

18.0

17.0

23.0

25.0

25.0

26.0

31.0

33.0

29.0

32.0

34.0

29.0

42.0

47.0

45.0

45.0

46.0

Remittances/ Import

21.0

20.0

21.0

26.0

22.0

32.0

35.0

34.0

32.0

36.0

Remittances/ Trade deficit Remittances/ Reserve Remittances/ GDP

54.0

65.0

63.0

94.0

3.73

105.

0 122.

0 4.14

87.0

89.0

112.0

3.49

3.46

Remittances/FDI

92.2

Remittances/ Foreign aid

100.

0

138.

0 124.

0 5.90

145.

0 125.

0 6.17

117.0 167.0

144.

0 4.01

141.

0 158.

0 5.26

61.3

86.1

51.0

34.2

64.0

81.4

48.1

124.

0

137.

0

200.

0

193.

0

122.

2 353.

0

116.0

116.0

131. 138.0 0 6.37 7.75 71.3

306. 388.0 0

Source: Constructed on the basis of data from various issues of Economic Trends, Bangladesh Bank Annual Report and Bangladesh Economic Review.

Source pattern: Table-3 based on quinquennial data, gives an indication of the region-wise dynamics of remittances. As shown in the table, Middle-East region continues to maintain the lion’s share (70 percent or above throughout except FY06) of remittances to Bangladesh with a slight downtrend since 1995-2000. The recent increase in health in ROW share and a fall in Middle-East share can be partly explained by a shift in migration towards countries like USA, Canada, UK, Germany, Italy, Japan, Malaysia, Singapore etc. This change in the pattern of migration has been brought about mainly by two intentions of the migrants: higher education and higher income. Apart from the migration surge, greater scrutiny by immigration and finance authorities especially in the USA and Europe after the 9/11 tragedy seems to be responsible for increasing share of ROW in remittances. Besides, remittances from Iraq, a middle-eastern country, have been nil since 1991-92, which contributed somewhat to the decreasing/increasing share of middle-east/ROW region.

Region-wise Remittances (%) Area Middle-East ROW Total

1880-85 72 28 100

1985-90 70 30 100

1990-95 75 25 100

1995-2000 74 26 100

2000-06 73 27 100

2006-07 66 34 100

Source: Constructed on the basis of data from various issues of Economic Trends Another important feature of source pattern of remittance is that the Kingdom of Saudi Arabia (K.S.A.) dominates the remittance flow among the Middle-East region. As figure-4 depicts, in FY06, K.S.A. took the lead with 53 percent contribution in our remittances coming from Middle-East followed by U.A.E and Kuwait with comparatively with lower contribution of 18 and 16 percent respectively. In the case of ROW, key contributions are made by U.S.A and U.K. It is seen from Figure 4 that U.S.A captured the highest, 46 percent,

and U.K. remained just behind it with a significant 34 percent contribution in the year 200506.

Figure : Remittance from Middle East in FY06 Figure : Remittance from ROW in FY06

Considering all countries together it is found that again K.S.A. is the largest provider of remittances to Bangladesh. Figure-5 demonstrates the relative share of source countries in the remittance basket in FY06. According to this Chart, K.S.A had a sizeable 35 percent share as compared to the countries like U.S.A, U.A.E, Kuwait and U.K contributing 16, 12, 12 and 10 percent respectively.

6.1.5 Macro-Economic Impact - An Econometric Analysis: An attempt is made in this section to determine the impact of workers’ remittances on the economy of Bangladesh and highlight the possible repercussions of the change in inflow of remittances using the standard Keynesian macroeconomic model.

The structural equations estimated (using 3SLS techniques) is summarized below.

1.

2.

3.

4.

5.

6.

Where, Y= National Income.

C=Private Consumption I=Total Investment G=Government Expenditure =Remittance. = Export M= Import

The first equation states that consumption expenditure depends on disposable income (Yd), where the autonomous consumption expenditure and c is is the marginal propensity to consume out of disposable income (Yd).

Equation 2 describes a private investment function in terms of national income (GNP) where I0 is autonomously determined and ‘b’ is the marginal propensity to invest.

Equation 3 describes an import function in terms of GNP where M 0 is autonomous and m measures marginal propensity to import.

Equation 4 is the tax function where is autonomous tax and t is the marginal propensity to tax out of national income.

The last two equations are identities.

The model includes six endogenous variables: 1. Private consumption (C).

2. Private investment (I).

3. Import (M).

4. Tax revenue (T).

5. Disposable income (Yd).

6. GNP (Y).

And three exogenous variables: 1. Govt. Expenditure (G).

2. Remittance (REM).

3. Export (Ex).

Note: Here I used the model which is calculated by the author of the article that I used for my purpose. Here it is to be noted that I do not calculate the equation myself because for do so I need to use 3SLS or three stage linear survey software which was unavailable. Here the data used by the author was 1977-1999, which is now not updated in such calculation. But to understand the general impact of remittance I remain the result as it was.

6.1.5.1 Findings: The estimated consumption function is

C = 226.1 + .944 YD. The estimated equation shows that the marginal propensity to consume in response to disposable income is positive and is 0.94. This implies if disposable income increases by 1 unit, say, 1 Taka, 94 Paisa is spent on consumption. The intercept is 226.1, which indicates the level of consumption when disposable income is zero.

The estimated Investment Function is I = -239.68 + 0.123Y. The regression coefficient measures the marginal propensity to invest out of income.

According to the estimated regression equation the marginal propensity to invest is positive with a magnitude of 0.123, which implies as national income increases by one Taka, investment increases by 0.12 Taka.

The estimated Import Function is M = -379.24 + .260 Y. The marginal propensity to import out of national income is positive and is 0.26. This implies if national income increases by one Taka, the import bill rises by 0.26 Taka.

The estimated tax function is T = -91.74 + .101 Y The response of tax to the change in national income is positive as expected and is .

10. This implies that if national income increases by 1 Taka, the tax revenue also increases by .10 Taka 6.1.5.2 Impact of Remittances on GNP:

Using the relevant estimated parameters from structural equations into the formula in equation (2), the multiplier is estimated at 3.33. This indicates that an increase in remittance by one million Taka would result in an increase in national income by 3.33 million Taka. We know that the remittance multiplier depends positively on the marginal propensity to consume and invest and negatively on marginal propensity to import.

Thus, government policy should aim at increasing the marginal propensity to spend on domestic products and discourage expenditures on imported products in order to maximize the positive impact of remittances on national income.

6.1.5.3 Impact of Remittances on Consumption: The multiplier effect of remittances on consumption is calculated as 2.826. This multiplier is used to calculate the proportion of private consumption expenditure induced by the flow of remittances over time. The induced component is measured by the value of remittances multiplied by 2.826. We estimate that remittance-induced consumption gradually increased over the years from 1972 onwards, declining temporarily in 1984 and 1990.

6.1.5.4 Impact of Remittances on Investment: The multiplier effect of remittances on investment spending is estimated at 0.409. Remittance induced private investment is measured through a similar process adopted earlier to calculate remittance induced private consumption expenditures and the trend exhibited is also quite similar.

The multiplier effect of a Taka increase in remittances on imports estimated at .865. As is observed remittance-induced imports are showing a declining trend in recent years, reaching its lowest level in 1995-96, since 1980. In all equations the coefficients had the correct signs. There was no auto-correlation in the reduced form equations. The coefficients were statistically significant and the model has an overall high value of adjusted R 2. Our results thus indicate that remittances have a strong positive impact on GNP, a positive impact on consumption, investment and imports, but the largest impact is on private consumption while the smallest on investment and imports.

6.1.6 Problems Associated with Remittance Transfer: In transferring remittance money to Bangladesh, migrant workers from abroad faced the following problems.

Delay in enchasing cheque

Most of the migrant workers transfer their remittances through Hundi. Because, encashing a demand draft takes on an average two weeks while Hundi pays instantly. So, 25%, 34% and 46% of the migrant workers in England, Saudi Arabia and Malaysia respectively reported about this problem.

High commission/taxes compared to informal channels The transaction cost for the sender of remittances is the service charge of formal institutions plus the postal expenses while, on the other hand, sending through Hundi enables the sender to get 1-2 per cent higher rate than the official exchange rate avoiding commission and postal charges therein. So, 80%, 79% and 82% of the mentioned respondents in the present study reported that commission and taxes/levy on remittance transfer in official process were relatively higher.

Lack of awareness about formal channels There were many migrant workers who did not know the complex official procedure of remittance transfer. The illiterate as well as lower educated persons even higher educated persons sometimes avoided official channel because of its procedural complexity. About 10%, 31% and 43% of the selected migrants reported about such problem.

6.2. Remittance Department Remittance means transmission/transfer of money from one place to another. Local remittance represents remittance that takes place within the territory of a country. Banks have a wide network of Branches all over the country and offer various types of remittance facilities to the public/customer/client etc.

Virtually there are main works of remittance department there are as follows: 1. Transfer of funds through Demand Draft (DD), Telegraphic Transfer (TT), and Mail Transfer (MT).

2. Issuance of Pay Order (PO), pay slips (PS), Security Deposit (SD), Bearing Certificate Deposit (BCD) etc.

3. Local Bills for Collection (LBC), Outward Bills Collection (OBC).

4. Collections of Cheques, Drafts and presenting them to clearing house.

5.

Maintenance of FDR.

6.2.1. Foreign Remittance These activates are needed: 1. Activities related to L/C opening.

2. Receiving documents from Exporters Bank.

3. Perform all activities for retirement of document for collecting the importing goods.

The main functions of the Exports are: 1. Getting the L/C Documents from Foreign Importers Bank.

2. Gives this L/C to Exporter.

3. Advising the L/C. 4. Opening the Bank-to-Bank L/C. 5. Collection and distribution of the payment of Bank to Bank.

6. When after shipment of goods the exporter submits all documents as per as L/C, this Department scrutinizes those Documents and sent to the Importers Bank.

In 2008 foreign remittance brought into the country through NBL was YSD 582.47 million showing an increase of USD 179.90 million over the previous year which registered an attractive growth of 45 percent. This growth was possible due to introduction of different instant payment products and technology including extending SWIFT, online EFT etc and further efforts are being made for more speedy payments.

(Remittance of NBL) Source: National Bank Annual Report, 2009

6.2.2 Foreign Exchange: The main functions of Foreign Exchange Department are: 1. Deals with inward foreign Remittance.

2. Dealing of Travel Checks.

3. Transfer money and currency through Western Union.

4. Transfer fund through draft, Telegraphic Transfer, Mail Transfer etc.

5. Foreign Bills collection.

6. Foreign Bills purchase and discount.

6.2.3 Western Union It is used for foreign dealings. For this 10 ID’s are necessary. They are: 1. Passport (not expired).

2. Driving License.

3. Ration Card.

4. Voter ID. 5. Pan Card.

6. Refugee Card.

7. Student ID (Nationalized University and College).

8. Bank Passport (NBL).

9. Army Card.

10. Post office loyalty card, Govt. employee ID card, local (W/C) ID Card.

All ID are valid only if they have a photograph and the ID verifies the person’s signature.

6.2.4. Remittance Sector The commercial Bank Remittance facilities to its customer is to enable them top avoid risk rising out of profit or loss in cash carrying cash money to one place to another or making payment to someone in another places. Banks take this risk remit the fund on behalf of the customers to save them from any awkward happening through the network of their branches and ensure payment to the beneficiary in exchange of a little bit benefit known as commission. There are four mode of remitting money from one place to another.

Local Remittance Electronic Fund Transfer (MT) Pay Order (PO) Telegraphic transfer (TT) Demand Draft (DD)

(Source: National Bank Limited) 6.2.4.1 Pay Order Issue (PO) Following procedure is maintained for the issuance of pay order (PO): •

Customer is given a PO form.

•

After filling the form carefully, the customer is pays the money in cashor cheque.

•

The concerned teller then issue PO on its specific block. This block has three

parts, one for bank and another two for customer. “A/C payee” crossing its sealed on all PO issued by the bank. The teller then writes down the name and address of the beneficiary on the main part of the PO block. In other two part name and address of the customer is written.

•

The teller gives an entry to the registry book and maintains the same number

of PO block.

•

Two authorized officer signed the PO block.

•

At the end customer is provided with the two parts of the PO block after

signing of the backs of bank’s part.

6.2.4.2 Demand Draft Issue (DD) •

Customer is supplied with DD form.

•

Customer fill up the form, which includes the name of the drawer, name of the payee, amount of money to be sent, commission, name of the drawer branch, signature and address of the drawer.

•

The customer may pay in cash or by cheque from his accounts (if any).

•

After the money is paid and the form is sealed and signed accordingly it is given to the DD issuing desk.

•

Upon block have two parts one for bank and another for customer.

•

Bank part contains issuing date, drawer’s name, payee’s name and some of the money and name of the drawer branch.

After finishing all the required information entry of the DD is given in the DD issuing register and at the same time bank issues a DD confirmation slip is entered into the DD

advice issue register and a number is put on the confirmation slip form the same register.

Later the bank mails this advice to the drawer branch.

6.2.4.3 Telegraphic Transfer (TT) In this process the sender’s bank send a SWIFT message to the receiver’s bank. The SWIFT message received by the head office international division then the head office transfers the message to the respective branches. After getting Message by the respective branches, the bank credited the beneficiary’s account. A beneficiary must have an account to receive the money.

Since the SWIFT message can be transfer from bank to bank, no exchange house can participate in this process. Exchange can take the advantage of the process with the help of a correspondent bank.

Some features of (TT) are given below 1. Since SWIFT has been used in the transaction process it is very much a secured.

2. Sending and receiving time is very much minimum.

3. The process is also hassle free. The remittance directly deposited to the beneficiary’s account.

4. The process is frequently used.

Foreign Remittance Process Diagram: Sender A Sender B Sender C Exchange House/Banks Foreign A/C of NBL in Foreign Country’s Bank National Bank L LTDA/C

Disbursement of Remittance Instant Cash To NBL Counter Beneficiaries Bank A/C credit PO/DD/MT/TT Sending Foreign Currency

$ SWIFT Receiving Message

Consignment Query and Feedback A/C

Figure: Process of Inward Remittance Transfer

6.2.4.4. Electronic Fund Transfer (EFT) Electronic fund transfer refers to the computer-based systems used to perform financial transactions electronically. Electronic fund transfer getting more popular in these days due to quickness of its operation. NBL is giving this service to the beneficiaries through Western Union money transfer, xpress money (UAE exchange center), samba speed cash (samba financial group), instant cash (wall street LLC.), Balaka Exchange, GIT etc. Here ‘Western Table : 4 Trend of Remittance inflow in Bangladesh (Year Wise) Remittances Growth Remittances Growth Year (in Taka) rate (in USD) rate 1990-1991 27256.2 763.91 1991-1992 32414.5 0.18925 849.66 0.11225 1992-1993 36970.4 0.14055 944.57 0.1117 1993-1994 43549 0.17794 1088.72 0.15261 1994-1995 48144.7 0.10553 1197.63 0.10003 1995-1996 49704 0.03239 1217.06 0.01622 1996-1997 63000.4 0.26751 1475.42 0.21228 1997-1998 69346 0.10072 1525.43 0.0339 1998-1999 81977.8 0.18216 1705.74 0.1182 1999-2000 98070.3 0.1963 1949.32 0.1428 2000-2001 101700.1 0.03701 1882.1 -0.0345 2001-2002 143770.3 0.41367 2501.13 0.3289 2002-2003 177288.2 0.23314 3061.97 0.22423 2003-2004 198698 0.12076 3371.97 0.10124 2004-2005 236469.7 0.1901 3848.29 0.14126 2005-2006 322756.8 0.3649 4802.41 0.24793 2006-2007 412985.29 0.27956 5998.47 0.24905 2007-2008 542951.4 0.3147 7914.78 0.31947 2008-2009 666758.5 0.22803 9689.26 0.2242 2009-2010* 124897 -0.8127 1821.55 -0.812 Avg. Growth 14% 10% Rate Source Data: Bangladesh Bank Economic Data Union is more frequently used. Beneficiaries do not need to maintain an account to get the money. For example, to receive money from the western union beneficiaries have to fill up a form where the beneficiary has to write a 10 digit number that is called MTCN number. A beneficiary has to show a photo ID to the bank to get the money.

•

Some features of EFT A. Electronic fund transfer is a very fast service.

B. It requires some formalities, as beneficiary does not need to maintain an account with the bank.

C. The use of EFT is increasing very fast.

D. Sometimes it may not be secured.

6.3.1 Analysis of Inward Remittance Trend: (Illustration: 13 Inward Remittances Trend)

Country wise Wage Earners Remittance Inflows (Yearly) USD in millions Country Bahrain Kuwait Oman Qatar K.S.A. U.A.E. Libya Iran Sub total Australia Hongkong Italy Malaysia Singapore U.K. U.S.A. Germany Japan

2004-2005 67.18 406.8 131.32 136.41 1510.46 442.24 0.27 0.52

2005-2006 61.29 454.38 153 161.43 1562.21 512.64 0.16 1.68

2006-2007 79.96 680.7 196.47 233.17 1734.7 804.84 2.61 2.36

2007-2008 138.2 863.73 220.64 289.79 2324.23 1135.14 0.36 3.24

2008-2009 157.43 970.75 290.06 343.36 2859.09 1754.92 1.25 3.28

2009-2010 29.31 163.72 54.95 62.83 548.55 312.26 0.42 0.89

2695.2 7.15 5.63 41.38 25.51 47.69 375.77 557.31 10.1 15.99

2906.79 8.89 5.37 78.43 19.05 61.32 517.39 701.37 10.95 8.71

3734.81 11.34 6.15 149.65 11.84 80.24 886.9 930.33 14.91 10.17

4975.33 13.11 8.1 214.46 92.44 130.11 896.13 1380.08 26.87 16.29

6380.14 6.78 9.09 186.9 282.22 165.13 789.65 1575.22 19.32 14.12

1172.93 1.26 1.76 46.32 82.66 32.9 145.04 248.94 3.57 2.44

S.Korea Others Sub total Total

18.41 48.15

16.4 92.56

17.08 125.05

19.69 142.17

18.33 242.36

4.33 78.38

1153.09 3848.29

1520.44 4427.23

2243.66 5978.47

2939.45 7914.78

3309.12 9689.26

647.6 1820.53

According to the economical statistics published by Bangladesh Bank, it seems remittance inflow to Bangladesh has been gradually increased in last 20 years. Between 90s and onward till starting of 21st century remittance inflow was reported at a steady rate. After 2001 remittance inflow tour country was increasing and up to 2008-2009 a record amount of 10 million USD remittance inflows was recorded.

6.3.2 Analysis of Country wise Wage Earners Remittance Inflows: Table : 5 Country wise Wage Earners Remittance Inflows (Yearly) After one eleven incident there was a chance of facing a decline in the remittance inflow but it was not happened. Because if we consider the above table we will see inflow from Middle East countries are twice larger than of summation of remittance inflow from Asian and European countries and this trend was carried forward from 90s to till this year. But due to the after affect of global economic fall down Bangladesh is faci9ng a major decline in the remittance inflow. as countries like Malaysia in Asia and U.A.E in Middle East are facing such impact and now sending so many wage earners to Bangladesh. More over due to mall practices in sending wage earners in those countries are also consider as a reason for low rate of employment in foreign countries. And this results in low inflow of remittance. In last year more than 20% fallout was recorded.

6.3.3 Comparative Analysis: Table : 6 Industry Comparison

Bank

MTBL

Dhaka Bank

Industry Comparison Bank Asia SIBL

National Bank LTD

Industry

April may June July August Avg.

6.22 6.323 7.609 7.783 7.79 7.145

6.67 9.143 9.86 7.89 8.344 8.3814

10.39 17.082 16.615 17.36 16.569 15.6032

3.84 4.736 4.617 4.939 5.047 4.636

9.94 12.149 11.163 12.294 11.542 11.4176

7.412 9.8866 9.9728 10.0532 9.8584 9.4366

(Illustration : 14 : Industry Average)

Now form my analysis found that National Bank LTD positioned itself on above the industry average line which is a great achievement in this year. Unlike other bank National Bank is showing a smooth growth rate of remittance inflow and only in few years of operation it positioned itself as a Bank of Performance among the expatriates Bangladeshis who feel safe and sound while sending remittance to their love ones in Bangladesh. Now the reason behind this success can be point out in some key points like 1.

Strong Management

2.

Quality Service

3. Wide area of Coverage 4. Customer Orientation 5. Proper Feedback Facility 6. Technological Advancement 7. Futuristic decision making 6.3.4 Analysis of NBL�s Foreign Exchange Performance: Table : 7 Trend of NBL Foreign Exchange performance (In Million Taka) Year 2005 2006 2007 2008 2009

Trend of NBL Foreign Exchange performance ( Taka In Million) Export Growth Import Growth Remittance 21,344.1 31,648.20 13,618.20 28,019.2 31.3% 42,458.50 34.1% 21,353.90 31824.00 13.6% 62,759.00 48% 27560.80 36284.44 14% 78,226.32 24.6% 39877.80 38,398.85 5.8% 77,539.77 (0.88%) 44381.50

(Illustration : 15 :Trend of NBL�s Foreign Exchange Performance)

Growth 56.8% 29% 44.7% 11.29

Despite the political unrest and labor turmoil, export amount stood at 38,398.85 Million Taka at the end of FY2009, registering a respectable growth of 5.8% percent over that of FY2008.

Import payments during FY2009 stood 77,539.77 million Taka registering a negative growth of 0.88% percent compared FY2008.

During the year 2009 the bank signed money transfer agreement with overseas exchange companies. As a result, remittance flow has increased significantly. In the year 2009 total amount of the flow of remittance was Tk. 44,381.50 million as against Tk. 39,877.40 in 2008 registering an increase of 11.29%.

6.3.5 Growth Analysis of National Bank’s Remittance : Table : 8 Income of NBL's Remittance Income of NBL Remittance (Taka In Million) 2005 2006 2007 2008 Year Income 13,618.20 21,353.90 27,560.80 39,877.80 Growth Rate 0 56.8% 29% 44.7%

2009 44,381.50 11.29%

(Illustration : 16 : Income of NBL Remittance) The Bank has been continuing to extend special importance to foreign remittance from the very beginning of its establishment. With this view, we have started business in inward foreign remittance with overseas remittance exchange house companies by establishing Drawing Agreement. As a result income from remittance rises to TK 4438.50 million from TK 13618.20 million in year 2005 to year 2009.

6.3.6 Forecasting Future Income: Table : 9 Income Projection of NBL Remittance Operations Income of NBL Remittance (Taka In Million) Year 2009 2010 2011 2012 Income 44,381.50 55,476.86 69,346.08 86,682.6 Growth Rate 25% 25% 25% 25%

2013 1,08,353.25 25%

As for calculating remittance earning is not directly related with any micro economic variable and is dependent on macroeconomic conditions, that means if economical condition in host countries are favorable, than remittance inflow will be generated, and as for The Bank the income is generated from the commission earning so as quantity of remittance increases so do the income . But for simplicity and in need of forecasting consider a 25% growth in

remittance earnings. As a consequence in end of year 2013 NBL may achieve TK 1,08,353 million remittance income.

( Illustration : 17 : Income Projection)

6.3.7 Number of Drawing Agreement: Table : 10 Number of Drawing Agreement Trend Number of Drawing Agreements Year 2005 2006 2007 2008 2009 40 Drawing Agreement 16 20 22 37

(Illustration : 18 : Drawing Arrangements) Number of Drawing agreement has a significant impact on remittance inflow thus in remittance income, because the more no of drawing agreement is signed between exchange house and the Banks the more the remittance inflow will be received. And this is evident form NBL’s income and no of Drawing agreement trend.

6.3.8 NBL’s Online E-Cash/ATM Service NBL has been started ATM service last two years ago. NBL with the collaboration of eight other local and Foreign Banks commercial launching from October 11, 2001. The ATM Card enables to save their valued customers from any kind of predicament in emergency situation and consuming formalities. NBL ATM Card gives the distinguished clients the opportunity to withdraw cash at any time, even in holidays, 24 hours a day, and 7 days a week.

ATM machine have been installed in 18 points in Dhaka city and other countries like Sylhet, and Chittagong. It is worth mentioning here that ATM will not only provide drawing facility but also give opportunity to the clients to pay utility bills like telephone bills etc. NBL hope that ATM will help a great deal to improve client service. National Bank Ltd. has 75 online branches for their online faster business transaction. According to their online business transaction clients can deposit and withdraw their money from any online branch. NBL has 9 ATM booths of their own and authorized ATM booth of another private Bank from where clients can withdraw their money.

6.3.9 NBL Credit/ Debit Card 6.3.9.1 Credit Card Although STANDARD CHARTERD GRINDLAYS BANK first introduced the local Master Card in our country; NBL is the pioneer of International Master Card in Bangladesh. Now NBL is running their Credit Card Business of Bangladesh with the Master Card both in local and International market. In 1997, Master Card captured 35% of Credit Card throughout the world; however present market analysis reflects that a large number of people, whose average income range is above TK. 10000 per month, are using the Credit Card. The Credit Card Division is continuing their all-possible efforts for the participation in the global sign Master Card program and the number of users of Credit Card has been increasing day by day.

National Bank Limited is the pioneer in introducing credit cards amongst the local banks and the financial institutions way back a decade. Banks firstly introduce the master cards in 1997 and also introduced VISA card in 2003. Now the bank is issuing and acquiring world’s most popular brands of credit cards commonly known as Master Card and VISA card. The bank has a cliental of its credit card across the country covering the class of elites, VIPs, CIPs and also the middle class. mobile phone roaming facility; to popular the credit bank has significantly reduced the different fees and charged over the recent times.

Credit Card comes in both local and international forms, giving the client power to buy all over the World. Now enjoy the conveniences and advantages of Credit Card as you step into the new millennium.

Through its Credit Card. National Bank Limited has not only initiated a new scheme but also brought a new life style concept in Bangladesh. Now the dangers and the worries of carrying cash money are memories of the past.

NBL Credit Card is accepted in many merchant outlet around the world. Our wide range of merchants include hotels, restaurants, airlines, and travel agents, shopping malls and departmental stores, hospitals and diagnostic centers, jewelers, electronics and computer shops and many more.

Dual Currency Card Facility.

Lowest Rate of Interest.

Lowest Card Fees. Special Discount of Card Fee condition applicable.

You can transfer 80% amount of your Local Card Limit to any NBL A/c or have Pay Order Facility.

No Excess Limit Charge.

No Hidden Charges.

6.3.9.2 Debit card: Banks introduced debit card namely NBL VISA power card in 2006, a product free from the burden of loans and interest. TO get a power card none requires having any account with NBL. Bedsides’, bank has taken initiative for expansion of ATM services countrywide and with the introduction of on-line services customer will have easy excess to other techno based banking facilities. Meanwhile instant notification or transaction through SMS has been added to the feature of power card Bank’s income from card business was TK.120.4 million in 2008 showing an increase of tk.19.2 million than that of previous year.

ATM Location Branch Location District Satmasjid Road 761 , Satmashjid Road , Dhanmondi, Dhaka Uttara Hossain Tower , Next to over Bridge, Dhaka

Dilkusha 48, Dilkusha C/A, Dhaka Gulshan 97/1 , Gulshan Avenue, Dhaka Malibagh 474, Malibagh, DIT Road, Dhaka Karwan Bazar BTMC Bhavan, Karawan Bazar, Dhaka Mymensingh 29/1 , durgabari Road, Mymensingh Bogra Baragola bazaar, Bogra Dhaka University Administritive Building, Dhaka

6.3.9.3 Overseas Operations Now a days it is needless to mentioned that homebound foreign remittance is significantly contributing in building foreign exchange reserve of the country. Realizing the prospects of the sector, the bank since its inception is gradually establishing its network where concentration of Bangladeshi expatriates is higher with the time NBL are earn the confidence and trust of the Bangladeshi wage earners and successfully handling a sizable volume of remittance, which is increasing day by day. There are some kinds of overseas operation of NBL which is provided for the customers.

NBL has been conducting their operation directly through their own respective office and acquiring equity and management with Foreign Banks in the following foreign countries: Singapore, Oman, Nepal, and Myanmar. As in the past, NBL continued to develop its foreign correspondent network. It is the mentionable here in the last 2002 a number of Banks have been sold to or merger with other banks, as a result of globally.

Western Union Financial Services int’l NBL opened up the way to introduce Western Union Financial services int’l in Bangladesh through an Agency agreement in 1993/ Western Union is a global in money transfer services,

with a history of service dating back for more than 150 years and presently have agent over 3,20,000 worldwide.

During 2008 the bank received substantial amount of foreign exchange through Western Union with a growth of 21 percent compared to the previous year.

Western Union Money Transfer is a very familiar name in the world of money transfer for sending speedy money from one country to another country.

The Bank has made an arrangement with Western Union Remittance services, which has over 127 years, experience for speedy remittance of money with more than 140 countries. Joining with this Western Union, NBL has introduced Bangladesh to the faster track of money remittance. Now money transfer between Bangladesh and any other part of the Globe is safer and faster than over before.

This simple transfer system, being on line, eliminated the complex process and makes it easy and convenient for both sender and receiver. Though NBL-Western Union Money Transfer Service, ones money will reach its destination within a few minutes. Bank has ultra modern technology and worldwide network.

Drawing Arrangements Beside fully or partially Exchange companies, the bank presently has an extensive network of drawing arrangements with 40 exchange companies located in 13 countries namely Kuwait, Oman, Qatar, Bahrain, Saudi Arabia, UAE, Malaysia, Singapore, UK, Italy etc.

Exchange Housed by NBL Oman: NBL invested 25 percent in gulf overseas exchange company LLC (GOEC) a joint venture exchange company in Oman, operating since November 1985 under management of the bank having 5 branches in the potential location of that country.

Singapore: Balaka exchange company ltd Singapore went into operation in September in 1999under the management of NBL to boots u its activities. National Bank acquired 100 percent ownership of Balaka in July 2007. Remittance of USD 22.09 million receive through Balaka Exchange by NBL. Malaysia: NBL money company Transfer Company fully owned a subsidiary company of National Bank is going to start operation in Malaysia by May 2009. All necessary steps are

taken in home of Malaysia. It will open a new horizon in remittance business of the Bank in Bangladesh.

Myanmar: A representative office was established in Yangon, Myanmar in October in 1996 and must obtain permission from the government of Bangladesh to handle border trade with Myanmar.

Table : 11 Country wise list of Exchange Houses having Drawing Agreement with National Bank Ltd.

1

Bahrain

Dalil Exchange

2

K.S.A

Alamodi Exchange Company

3

K.S.A

Alrajhi Bank

4

K.S.A

Bank Al Bilad

5

K.S.A

6

KuwaitAl-Moosa Exchange Company WLL

7

KuwaitBahrain Exchange Company. WLL

8

Kuwait

Dollarco Exchange Company Ltd

9

Kuwait

Kuwait Asian International Exchange Co. WLL

10

Kuwait

Kuwait Asian International Exchange Co. WLL

11

Kuwait

Security Exchange Company WLL

12

Malaysia

Bank Simpanan Nasional

13

Malaysia

NBL Money Transfer Sdn Bhd

14

OmanGulf

Overseas Exchange Co. LLC

15

Qatar

Al Fardan Exchange Company LLC

SAMBA

Financial Group

NBL Own Exchange Houses 1

Singapore

NBL Money Transfer Pte Ltd., Singapore

2

Malaysia

NBL Money Transfer Sdn Bhd, Malaysia

Balaka Exchange Pte Ltd, Singapore Balance Sheet As on 31st December 2009

Table : 12 Particulars

2009 SGD

2008 SGD

Assets

Fixed Assets Plant And Equipment Current Assets Deposits and prepayment Fixed Deposit Cash in hand and at bank Total assets

95,170

111,181

17,500 100,000 1,071,286 1,188,786

11,323 634,808 646,131

1,283,956

757,312

300,000 395,542 695,542

300,000 95,225 395.225

12,100

11,646

540,299 8,650 27,365 576,314

335,204 4,300 10,937 350,441 757,312

Equity And Liabilities

Capital and Reserves Issued Share Capital Retained Point Non-current Liabilities Deferred Tax Liabilities Current Liabilities Amount Due to Customers Accured Operating Expenses Provision For Taxation Total Equity And Liabilities

1,283,956

NBL Money Transfer SDN.BHD. Balance Sheet As on 31st December 2009 Table : 13 Particulars Property, Plant And Equipment Current Assets Deposits Cash and Bank balances Current Liabilities Sundry Payables and Accruals Amount Owing to Director Amount Owing to Holding Company Net Current Assets (Liabilities) Financed By Share Capital

2009 RM 413,775

2008 RM -

77,000 137,142 214,142

100 100

58,258 134,193 192,415 21,691

600 4,138 4,738 (4,638)

435,466

(4,638)

600,000\

100

Accumulated Losses Shareholder’s Fund/(Capital deviancy)

(164,534)

(4,738)

435,466

(4,638)

Table : 14 List of branches authorized by Bangladesh Bank (Central Bank) to deal in Foreign Remittance and International trade: 01.

Agrabad

branch

11.

Imamganj

branch

21.

Malibagh

branch

02.

Bangshal

branch

12.

Islampur Road branch

22.

Naogaon

branch

03.

Barishal

branch

13.

Jessore

branch

23.

Northbrook

04.

Bogra

branch

14.

Jubilee

branch

24.

Narayanganj

branch

05.

Babubazar

15.

Joypurhat

branch

25.

Pabna

branch

06.

Chaktai

16.

Khulna

branch

26.

Rajshahi

branch\

07.

Chapainawabganj

17.

Khatunganj

branch

27.

Rangpur

branch

08.

Dilkusha

branch

18.

Kawranbazar

branch

28.

Sylhet

branch

09.

Elephant

branch

19.

Mohakhali

branch

29.

Satkhira

branch

10.

Foreign Exchange branch

20.

Motijheel branch

30.

Sk. Mujib Road branch

branch branch

Road

Road

Hall

Road

6.3.10 Monthly Income Sources from Remittance department Getting help from Mr. Rahnur Islam, Principal Officer and In charge of Foreign Remittance Department, National Bank Ltd, Elephant Road Branch, I got all the remittance related data for preparing this part of my report. After his inspection I made a format of monthly fixed income of remittance department. That is given below: Table: 15 Monthly Income Sources from Remittance Department Particulars

Amounts Taka

8. Income from US Dollar ($) Endorsement per passport  Sundry Account

250

 Miscellenious Charge

100 350 9. Per US$ gain from Endorsement 1 10. Per US$ gain from International Credit Card 1 Bill 11. Per US$ gain from Foreign TT

0.005

12. Gain from Quick Payment •

Per payment of Western Union

•

Per payment of Samba, X-press money, GIT, Balaka etc

Total

200 xxx 552.005+xxx

6.3.11 Guideline to future growth: With a view to growth of remittance bank has plan to explore green areas of expatriates Bangladeshis /Remittance all over the world and to establish new relationship with overseas Banks/Exchange houses. Besides the Banks have plan to provide dedicated and quality services to the beneficiaries as well as their remitters at home and abroad. The bank will establish its subsidiary institutions abroad for providing better exchange rates and services to the Bangladeshis expatriates for enhancing substantial home bound remittance.

It is pertain to mention that a large amount of Bangladeshis around 6.4 million is working and living worldwide and sending their hard earned money to his or her dear ones regularly.

Though some portion of remittance has been channeling through unofficial means like Hundi, The Bangladeshi Government has taken various measures and implanted money laundering act to combat such illegal activity. The inward foreign remittance will substantially be increased if, remittance through unofficial channel are combated.

Every fiscal year inward foreign remittance is continuously breaking the past records. And if Govt. can ensure regular employment of skilled and unskilled worker to the host countries inward foreign remittance will certainly increase in the upcoming years.

6.3.12 Overcoming the Barriers: Form the inception of the National Bank LTD; it is striving to increase the flow of remittance to keep the contribution in the country’s economy and to meet up their internal demand in foreign trade business. Despite of some limitation at present National Bank LTD has 122 branches all over the country covering a satisfactory area for creating a proper channel of remittance.

To overcome the barriers of smooth flow of remittance the following initiative will be taken

•

Increase no of drawing agreement.

•

Introducing electronic remittance cared system or RPC

•

Digitalizing the fund transfer process

•

Increasing the network coverage

•

Drawing agreement with local NGOs

Introduction: The CAMEL ratings or Camels rating is a US supervisory rating of the bank's overall condition used to classify the nation’s fewer than 8,000 banks. This rating is based on financial statements of the bank and on-site examination by regulators like the Fed, the OCC and FDIC. The scale is from 1 to 5 with 1 being strongest and 5 being weakest. These ratings are not released to the public but only to the top management of the banking company to prevent a bank run on a bank which has a bad CAMEL rating.

•

It is being used by the United States government in response to the global financial crisis of 2008 to help it decide which banks to provide special help for and which to not as part of its capitalization program authorized by the Emergency Economic Stabilization Act of 2008.

•

Credit unions in the United States use the similar CAMEL rating system.

•

The components of a bank's condition that are assessed:

•

(C) Capital adequacy,

•

(A) Asset quality,

•

(M) Management,

•

(E) Earnings,

•

(L) Liquidity

7.1 The capital requirement: Capital adequacy is a bank regulation, which sets a framework on how banks and depository institutions must handle their capital. The categorization of assets and capital is highly standardized so that it can be risk weighted . Internationally, the Basel Committee on Banking Supervision housed at the Bank for International Settlements influence each country's banking capital requirements. In 1988, the Committee decided to introduce a capital measurement system commonly referred to as the Basel Accord. This framework is now

being replaced by a new and significantly more complex capital adequacy framework commonly known as Basel II. While Basel II significantly alters the calculation of the risk weights, it leaves alone the calculation of the capital. The capital ratio is the percentage of a bank's capital to its risk-weighted assets. Weights are defined by risk-sensitivity ratios whose calculation is dictated under the relevant Accord.

To be adequately capitalized under federal bank regulatory agency definitions, a bank holding company must have a Tier 1 capital ratio of at least 4%, a combined Tier 1 and Tier 2 capital ratio of at least 8%, and a leverage ratio of at least 4%, and not be subject to a directive, order, or written agreement to meet and maintain specific capital levels.

Elements of Capital Requirements : 1.

Regulatory Capital •

Tier 1 Capital

•

Tier 2 (Supplementary) Capital

•

Undisclosed Reserves

•

Revaluation Reserves

•

General Provisions

•

Subordinated Term Debt

2.

Different International Implementations

3.

Common Capital Ratios

Common capital ratios •

Tier 1 capital ratio = Tier 1 capital / Risk-adjusted assets >=6%

•

Total capital (Tier 1 and Tier 2) ratio = Total capital (Tier 1 and Tier 2) / Risk-adjusted assets >=10%

•

Leverage ratio = Tier 1 capital / Average total consolidated assets >=5%

•

Common stockholders’ equity ratio = Common stockholders’ equity / Balance sheet asset

Capital Adequacy of National Bank Ltd (NBL) is given below :

Particulars

Amount In Million

Amount of regulatory capital to meet unforseen Capital: • Amount to meet credit risk • Amount to meet market risk • Amount to meet operational risk Some additional/(deficit) capital over MCR Maintained by the banks

8625.60 1213.40 759.70 (1474)

Table : 16 The capital Condition

Particulars Tier-1 (Core Capital) Paid up Capital Statutory reserve General Reserve Retained earnings as per profit and loss account Tier-II (Supplementary Capital) General Provision against UC loan General Provision against Off-B/S items Exchange equalization account Other reserve (50% of other reserve)

A. Total Capital B. Total Risk Weighted Assets C. Required Capital based on Risk Weighted Assets (10% of B)

D. Surplus/(Deficiency)(A-C)

2009 Taka

2008

2,846,536,300 2,418,373,220 497,723,327 1,567,288,545 7,329,921,392

1,872,721,293 1,778,874,037 632,723,327 975,132,271 5,259,450,928

689,400,000 270,510,048 41,371,514 793,421,071 1,794,702,633 9,124,624,025 67,281,912,300 6,728,191,230

564,400,000 220,510,048 41,371,514 433,407,905 1,259,689,467 6,519,140,395

2,396,432,795

1,662,864,125

Taka

48,562,762,700 4,856,276,270

The Capital adequacy Ratio :

On Core Capital On Supplementary Capital On Total Capital

Required 2009 5.00% 5.00% 10..0%

2008 5.00% 5.00% 10.00%

Actual 2009 2008 10.89% 10.83% 2.67% 2.59% 13.56% 13.42%

7.2 Asset quality: It is related to the left-hand side of the bank balance sheet. Bank managers are concerned with the quality of their loans since that provides earnings for the bank. Loan quality and asset quality are two terms with basically the same meaning.

Government bonds and T-bills are considered as good quality loans whereas junk bonds, corporate credits to low credit score firms etc. are bad quality loans. A bad quality loan has a higher probability of becoming a non-performing loan with no return. The ratio of nonperforming loans in Japan is expected to be as high as 25% of the overall bank assets.

Bank management components are: 1. Asset management 2. Liquidity management 3. Liability management 4. Capital adequacy management 5. Risk management Table : 17 The Asset Quality Of National Bank Ltd (NBL) : Particulars Classified, unclassified, doubtful and bad loans and advances Unclassified Standard Special Mention Accounts Classified Sub-standard Doubtful Bad/Loss

2009 Taka

2008 Taka

60,435,368,154 646,633,000 61,082,001,154

46,958,518,783 977,228,000 47,935,746,783

1,329,925,000 104,252,000 2,446,134,000 3,880,331,000 64,962,312,154

475,097,000 102,365,000 2,151,866,000 2,729,328,000 50,665,074,783

7.3 Management: Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources.

Because organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This

view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manage others Management can also refer to the person or people who perform the act(s) of management.

Historical development Difficulties arise in tracing the history of management. Some see it as a late modern conceptualization. On those terms it cannot have a pre-modern history, only harbingers .

Others, however, detect management-like-thought back to Sumerian traders and to the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to face the issues of management systematically. However, innovations such as the spread of Arabic numerals (5th to 15th centuries) and the codification of double-entry book-keeping (1494) provided tools for management assessment, planning and control.

In NBL, the Board of Directors has been conceived as the sources of all power headed by its Chairman. It is a legislative body of the Bank. Board can delegate its power and authority to professionals but cannot delegate, relinquish or avoid their responsibilities.

So we can see that the top management of NBL is full of so much experience person in banking sector and they can eligible enough to fulfill the top-level management duties.

In NBL, The Board delegates its functional responsibilities of the professional management team headed by managing Director. He is an ex-officio of the Board of Directors and has to take the full load of carrying out of the guidelines, rules and regulations and Directors given by the Board of Directors time to time and provide all vital information to this Board for their knowledge and effective decision-making.

The Year Wise number of employee and per employee income of NBL is given below :

Year 2009 2008 2007 2006 2005 2004

Number of Per Employee Income Employee (Annually) In Taka 2,960 36,000 2,737 33,200 2,432 30,507 2,270 28,110 2,183 25,409 2,133 24,800

The Graphical Presentation ig given below:

40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0

3-D Column 1 3-D Column 2 3-D Column 3

2009

2008

2007

2006

2005

2004

( Illustration : 19 Year wise per Employee Income)

7.4. Income or Earnings Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings received... in a given period of time. For firms, income generally refers to net-profit: what remains of revenue after expenses have been subtracted. In the field of public economics, it may refer to the accumulation of both monetary and non-monetary consumption ability, the former being used as a proxy for total income.

Economic definitions In economics, factor income is the flow of revenue accruing to a person or nation from labor services and from ownership of land and capital.

In consumer theory 'income' is another name for the "budget constraint," an amount Y to be spent on different goods x and y in quantities x and y at prices Px and Py. The basic equation for this is This equation implies two things. First buying one more unit of good x implies buying less units of good y. So, is the relative price of a unit of x as to the number of units given up in y.

Second, if the price of x falls for a fixed Y, then its relative price falls. The usual hypothesis is that the quantity demanded of x would increase at the lower price, the law of demand. The generalization to more than two goods consists of modelling y as a composite good.

The theoretical generalization to more than one period is a multi-period wealth and income constraint. For example the same person can gain more productive skills or acquire more productive income-earning assets to earn a higher income. In the multi-period case, something might also happen to the economy beyond the control of the individual to reduce (or increase) the flow of income. Changing measured income and its relation to consumption over time might be modeled accordingly, such as in the permanent income hypothesis.

Various income of NBL in 2009 is shown below (Amounts in million)

Interest Investment Commission Others

6,821.48

Besides, some other income of NBL

Particulars Return on Investment (ROI) Return on Assets (ROA) Earnings per Share (Taka) Net Income per Share (Taka) Price Earnings Ratio (Times)

2009 Million 16.57% 2.52% 72.74 72.74 8.88

2008 Million 12.20% 2.36% 53.31% 53.31% 19.03

7.5 Market liquidity In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value. Money, or cash on hand, is the most liquid asset. An act of exchange of a less liquid asset with a more liquid asset is called liquidation. Liquidity also refers both to a business's ability to meet its payment obligations, in terms of possessing sufficient liquid assets, and to such assets themselves.

In Banking In banking, liquidity is the ability to meet obligations when they come due without incurring unacceptable losses. Managing liquidity is a daily process requiring bankers to monitor and project cash flows to ensure adequate liquidity is maintained. Maintaining a balance between short-term assets and short-term liabilities is critical. For an individual bank, clients' deposits are its primary liabilities, whereas reserves and loans are its primary assets . The investment portfolio represents a smaller portion of assets, and serves as the primary source of liquidity.

Investment securities can be liquidated to satisfy deposit withdrawals and increased loan demand. Banks have several additional options for generating liquidity, such as selling loans, borrowing from other banks, borrowing from a central bank, such as the US Federal Reserve bank, and raising additional capital. In a worst case scenario, depositors may demand their funds when the bank is unable to generate adequate cash without incurring substantial financial losses. In severe cases, this may result in a bank run. Most banks are subject to legally-mandated requirements intended to help banks avoid a liquidity crisis.

Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) of NBL : Cash Reserve Requirement and Statutory Liquidity Ratio have been calculated and maintained in accordance with section 33 of Bank Companies Act, 1991 and as per BRPD circular no. 11 and 12, dated August 25, 2005 and DOS circular no. 6 dated October 05, 2005.

The Cash Reserve Requirement on the Bank’s time and demand liabilities at the rate of 5% has been calculated and maintained with Bangladesh Bank in current account and 18% Statutory Liquidity Ratio, including CRR, on the same liabilities has also been maintained in the form of cash held, Bangladesh Bank balance, Sonali Bank balance (agent bank), TT in transit and unencumbered approved securities. Both the reserve maintained by the bank are in excess of the statutory requirements, as shown below :

Table : 19 Liquidity Condition :

a) Cash Reserve Requirement Particulars Average Time and Demand (excluding inter bank deposits)

2009 (Taka)

2008 (Taka)

Liabilities

Required Reserve (5% of average time and demand liabilities) Actual Average maintained Surplus/ (Shortage)

71,195,537,000

55,770,238,000

3,559,776,850 3,590,548,000

2,788,511,900 2,803,176,000

30,771,150

14,664,100

b) Statutory Liquidity Ratio Particulars Average Time and Demand (excluding inter bank deposits)

2009 (Taka)

2008 (Taka)

Liabilities

Required Reserve (18% of average time and demand liabilities) Actual Average maintained (includongCRR) Surplus/ (Shortage)

71,195,537,000

55,770,238,000

12,815,196,660 14,415,892,023

2,788,511,900 11,342,724,000

1,600,695,363

1,304,081,160

c) Composition of CRR and SLR maintained Particulars 2009 (Taka) 2008 (Taka) Cash held 1,284,280,000 1,039,980,000 Balance with Bangladesh Bank 3,854,677,000 3,055,752,000 Balance with Sonali Bank 582,702,02 499,019,000 TT in Transit Unencumbered approved securities (HTM) 8,694,233,000 6,747,973,000

Surplus/ (Shortage) • As per Annual Report 2009

1,600,695,363

1,304,081,160

Liquidity Statement : As at 31st December 2009 (Figure in BDT) Table : 20 Liquidity Statement Particulars Not more than 1-3 month 3-12 1 month term term month term Assets

1-5 years Above 5- Total term years term

Cash in hand Balance with BB and agent Balance with other bank Money at call and short Investments Loans and Advances Fixed Assets Other Assets Non-banking assets Total Assets

1,290,177,054 5,553,512,827 1,919,750,009 1,359,800,000 276,548,223 2,571,369,000 26,401,403 333,886,810 13,331,445,326

295,821,685 821,213,870 6,428,422,500 52,802,806 667,409,160 8,265,670,020

200,000,000 2,433,641,609 23,499,478,750 237,612,627 739,089,567 27,109,822,552

74,800,000 1004,424,171 27,813,652,000 1,203,447,457 384,788,241 30,481,111,869

7,779,376,404 4,649,389,904 295,300,371 12,724,066679

1,290,177,0 5,553,512,8 2,490,371,6 1,359,800,0 12,315,204,2 64,962,312,1 1,815,564,6 1,740,385,5 384,788,2 91,912,116,4

315,909,987 12,327,012,687 409,713,507 13,052,636,181

231,819,974 6,789,670,173 828,671,700 7,850,161,847

843,189,886 23,763,845,604 1,758,041,643 26,365,077,133

30,624,351,651 1,751,983,422 32,376,335,073

3,309,771,165 41,371,514 3,351,142,679

1,390,919,8 76,814,651,2 4,789,781,7 82,995,352,9

278,809,145

415,508,174

744,745,419

(1,895,223,204)

9,372,924,000

8,916,763,5

Liabilities Borrowing from Bank Deposits and accounts Other liabilities Total Liabilities

other other

Net Liquidity Gap

8.1 SWOT Analysis 8.1.1 Strengths 1. National Bank Limited has nationwide image of providing quality service. It provides excellent and prompt services with higher degree of secrecy to corporate and mass level of customers.

2. It has an excellent management team and disciplined workforce.

3. NBL abides by a set of core values that reflects high commitment to customer: •

Responsive to customers’ needs.

•

Flexible in approach

•

Professional in manner

•

Strive for service excellence.

4. A group of qualified experienced, dedicated and well-trained personnel employing the best effort to accomplish the organizational objective.

5. String network throughout the country and correspondent relationship with almost all international and local banks operating in Bangladesh created a good accessibility and relationship with people.

8.1.2 Weakness 1. Most to the employees are not properly trained.

2. The appropriate employees are not in the appropriate position.

3. Online Banking quality and service is poor than the other private bank.

4. ATM both are very few.

8.1.3 Opportunity I. Attractive salary package for the employees so they are well motivated.

2. Bonus is given for more than one time in a year this is another reason of the employee satisfaction.

3. Promotion system of National Bank is perfectly structure for the employee inspiration.

Generally promotion has been every three years after.

4. Incentives are given to the employee from profit.

5. Rewards are offered to the employees who are able to arrange handsome amount of deposit.

8.1.4 Threat I. Some foreign and private banks are coming threat to National Bank Ltd. At present in retail banking Standard Chartered Bank and in business banking American Express Bank, Hong Kong Shanghai Banking Corporation. CITY Bank N.A, IFIC Bank. BRAC Bank are rival of National bank Ltd. Also some private banks like Dutch Bangla Bank, Eastern Bank, Prime Bank, Bank Asia, Dhaka Bank Ltd. etc. are becoming the new competitions for the bank and will be creating a competitive pressure on National Bank Ltd. 2. Bangladesh bank provides some rules and regulations for all banking institutions. Whether the rules and regulations suit the organization or not, it must obey these that sometimes impose barriers on daily normal operation.

8.2 Evaluation of Overall Services Of NBL (Elephant Road Branch) from the Customers’ Point of view :

During Internship period in National Bank (Elephant Road Branch.), have asked different types of customers regarding the overall services of the bank. These interpretation of these data (at a glance) are given below: Subject of asking questions: 1. Image of the National Bank Limited to the customers 2. Bank's relation with customers 3. Investment facility provided by the bank.

4. Interior Decoration of NBL, Elephant Road Branch 5. ATM facility of National Bank Limited 6. Money transfer facilities under foreign remittance department of NBL, Elephant Road Branch 7. The service quality of National Bank Limited, Elephant Road Branch

Total number of sample is 100 in every subject.

In this table all the attributes are having specific points.

The table ratings are as follows: ExcellentGood FairPoor-

4 3 2 1

1 Illustration : 20 Image of the National Bank Limited to the customers SL.NO

PARAMETERS

NO. OF RESPONDENTS

PERCENTAGE

1 2 3 4

EXCELLENT GOOD FAIR POOR

88 10 02 0

88 % 10 % 02 % 0%

Source: Survey of Primary Data CALCULATION: Total points

= 88*4+12*3+2*2+0*1=3 86

The weighted average is 386/10=38.6 Interpretation of the data: When asked what you think about the image of the NBL to the customers, 88% told it is excellent, 10% told it is good, 2% told it is fair.

2 ATM facility of National Bank Limited SL.NO

PARAMETERS

1 2 3 4

EXCELLENT GOOD FAIR POOR

NO. OF PERCENTAGE RESPONDENTS 2 13 36 49

Source: Survey of Primary Data CALCULATION: Total points

= 2*4+13*3+36*2+49*1=168

The weighted average is168/10=16.8 Interpretation of the data:

2% 13% 36 % 49 %

In the point of ATM facility of National Bank Limited as answer of this question, 2% of the customers told that it is excellent, 13% told it is good, 36% of the customers told that it is fair and last 49%told that it is poor.

ATM facility of National Bank Limited 2% 13% 36% 49% 0% 10% 20% 30% 40% 50% 60% Excellent Good Fair Poor

NO. Of Responds Percentage

3 Money transfer facilities under foreign remittance of NBL, Elephant Road Branch.

SL.NO 1 2 3 4

PARAMETERS

NO. OF

PERCENTAGE

EXCELLENT GOOD FAIR POOR

RESPONDENTS 1 47 49 3

01 % 47 % 49 % 3%

Source: Survey of Primary Data CALCULATION: Total points

= 01*4+47*3+49*2+3*1=246

The weighted average is 246/10=24.6 Interpretation of the data: When asked what you think about the Interior Decoration of the NBL, Gulshan Branch to the customers, 1% told it is excellent, 47% told it is good, 49% told it is fair and last 3% told that it is poor.

Western money transfer facilities of the NBL, Elaphant Road Branch.

NO. Of Responds

4

The service quality of National Bank Limited, Elephant Road Branch.

SL.NO 1 2 3 4

PARAMETERS NO. OF RESPONDENTS EXCELLENT 17 GOOD 39 FAIR 25 POOR 19

PERCENTAGE 17 % 39 % 25 % 19 %

Source: Survey of Primary Data CALCULATION: Total points

= 17*4+39*3+25*2+19*1=254

The weighted average is 254/10=25.4 Interpretation of the data: In the point of the service quality, 17% of the customers told that it is excellent, 25% told it is good, 39% of the customers told that it is fair and last 19%told that it is poor.

The service quality of National Bank Limited, Elephant Road Branch.

NO. Of Responds

9.1 Findings: •

Remittance generates remarkable benefits for the home country’s economy in terms of macro and microeconomic impacts.

•

Recent boost in remittances has been attributed to the efforts to encourage remittances through official channel by adoption of measures such as opening of new exchange houses in source countries, expansion of drawing arrangements, setting an annual remittance threshold, close monitoring and supervision of banks, speeding up of delivery to the beneficiaries and more importantly, surveillance measures under the Money Laundering Prevention Act.

•

With the analysis of macroeconomic model it was found that remittances have a strong positive impact on GNP, a positive impact on consumption, investment and imports, but the largest impact is on private consumption while the smallest on investment and imports.

•

After one eleven incident there was a chance of facing a decline in the remittance inflow but it was not happened. Because if we consider the data we will see inflow from Middle East countries are twice larger than of summation of remittance inflow from Asian and European countries and this trend was carried forward from 90s to till this year. But due to the after affect of global economic fall down Bangladesh is facing a major decline in the remittance inflow. As countries like Malaysia in Asia and U.A.E in Middle East are facing such impact and now sending so many wage earners to Bangladesh which ultimately reducing the flow of remittance.

•

More over due to mall practices in sending wage earners in those countries are also consider as a reason for low rate of employment in foreign countries. And this results in low inflow of remittance. In last year more than 20% fallout was recorded.

•

National Bank LTD positioned itself on above the industry average line which is a great achievement in this year. Unlike other bank National Bank is showing a smooth growth rate of remittance inflow and only in 3 years of operation it has positioned itself as a Bank of Trust among the expatriates Bangladeshis who feel safe and sound while sending remittance to their love ones at home.

9.2 Recommendations: Remittances are one of the major sources of the foreign currency earning of Bangladesh.

Remittances play a significant role for the balance of payment as well as economic development of the country. The government and also donor communities have given proper emphasis for boosting remittances flow. Recently Department for International Development (DFID) of UK government has proposed for funding a project to increase the official channels of remittances flow in Bangladesh. Although the government has undertaken several initiatives to increase remittances flow, but still there is something more to do. Moreover, Bangladesh is role model and considered as pioneer in Microfinance. Many Microfinance Institutes (MFIs) and Non-Government Organizations (NGOs) are operating in Bangladesh.

But still this remittance sector is untapped by them. The following recommendations can be helpful for harnessing remittances for the economic development of Bangladesh: •

Popularizing Migration through Proper Channel

In order to facilitate flow of remittance through the official channels and productive use of this scarce resource, government, particularly BMET, financial institutions and recruiting agencies should help create enabling environment for labor migration. To this end measures should be taken for dissemination of information pertaining to existing facilities and opportunities in remitting money through official channels (for sending money, investing in savings instruments or in other productive areas). The government agencies and recruiting

agencies could engage in motivational work through the pre- departure orientation programs.

Likewise,

the

non-governmental

organizations

can

incorporate

dissemination of reliable information on migration in their existing training and awareness programs.

•

Develop new foreign policy:

The government should develop new foreign policy and assigned a professional person at each diplomatic mission office abroad to explore the potentials of manpower export in that country and properly lobby with different concerned persons of that country. At present although the government has a post of labor attaché in diplomatic mission of some countries, but still it is insignificant.

•

Utilization of Remittances in productive investment:

The government as well as private sectors specially the MFIs/NGOs can come forward in this regard. At present one NGO is playing role of transferring remittances.

But the MFIs/NGOs need to do more beyond transfer. The government should eliminate regulatory constraint of transferring remittance for MFIs/NGOs. The government as well as MFIs/NGOs can provide Business Development Services to the remittances recipient families to start and operate an enterprise. If the government makes the regulation flexible regarding savings and credit products of MFIs/NGOs, then the MFIs/NGOs can develop appropriate savings, credit and insurance products for remittance recipient families. The Government can also establish Investment Company to channel more capital through MFIs/NGOs to the remittance recipient families which are operating enterprise.  Creating Enabling environment to invest Remittances in Capital Market: Moreover, the government can make easy access to the capital market for the remittance recipient families. Although at present there is a provision for quota of foreign investors or non- resident Bangladeshis during Initial Public Offering(IPO) of issuing shares, but this process is so critical that most of the time this quota doesn’t fulfilled. The government should make this quota system of issuing IPO also

applicable for the families of the non-resident Bangladeshis, so that they can invest in the capital market. •

Reorienting the Banking Sector:

In order to increase the flow of remittance through formal official channels, banks should be made more efficient and attractive so that Bangladesh communities abroad send money through these institutions. This, in turn, requires making the Bangladeshi banks adequately computerized, cost effective and flexible in order to compete with other banks and money exchange bureaus. Meeting the challenge with other banks also entails flexibility in determining the exchange rate, with a guideline from the Bangladesh Bank indicating the broad range to be followed.

Conclusion The National Bank Limited is a very recent bank in the banking business area. It was incorporated on March23, 1983 in Bangladesh as a Public limited Company under company Act, 1994. So within this short time the bank already get the popularity in the people. When this bank starts its operation, their first target customer was the army person, but with the demand of general people the bank is also doing business with the general people.

During the three months internship program at National Bank Ltd (Elephant Road Branch), almost all the desks have been observed more or less. This internship program, in first, has been arranged for gaining knowledge of practical banking and to compare this practical knowledge with theoretical knowledge. Comparing practical knowledge with theoretical involves identification of weakness in the branch activities and making recommendations for solving the weakness identified. Though all departments and sections are covered in the internship program, it is not possible to go to the depth of each activities of branch because of time limitation. So, the objectives of this internship program have not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objectives the internship program.

During the internship, it is found that the branch provides all the conventional banking services as well as some specialized financing activities to the economy. The branch also provides money transfer from abroad in the collaboration of “Western Union Money Transfer� in a very convenient way. Thus by providing these various services. National Bank

Ltd (Elephant Road Branch), is playing an important role in the banking system and in the payment system of Bangladesh.

The bank is spreading its operation through all over the Bangladesh. Recently this bank has almost 112 branches in all over the Bangladesh. So very recent it will increase their branches to meet up the people demand.

In its lending operations, the Bank has learnt a lot from its past experiences. Hopefully the NBL is able to improve in all its areas especially in the lending operations. The EWS department has brought a colorful variation from the year 2009, which will be surely reflected in their 2010’s annual Report. In the comparison with the other commercial banks, we see that the NBL is badly away from other bank. But in some cases the NBL performs the best with the comparison to the other banks. It happened only for the cause of lacking in experiences. With the passes of time the NBL will be able to maintain same success in all its credit areas like other bank. We hope that this bank will compete with the first class bank of Bangladesh very soon.

Bibliography

(n.d.). Retrieved from A GOOGLE web site: http://www.google.com (n.d.). Retrieved from National Bank Limited Web Site: http://www.nblbd.com (n.d.). Retrieved from A Bangladesh Bank web Site: http://bangladesh-bank.org (2009). Annual Report Of National Bank Ltd. Dhaka: Authority of National Bank.

Bruyn, T. D. (2006 (Forum on "Remittances and Expatriates; Development in Bangladesh").

Dynamics of Remittance Utilization in Bangladesh. New York: Golden Tulip.

M. Sayeedul Haque, M. A. Channel of Remittance-A Micro Level Study. Mymensingh.

Mr. Rahnur Islam, P. O. (2010, July 14). Activities of Foreign Remittance Department. (M. T. Hossain, Interviewer) Shubhashish Barua, M. A. (2007). Determinants of Workers' Remittances in Bangladesh:An Empirical Study. Dhaka: Policy Analysis Unit (PAU), Bangladesh Bank.