Internship main report on dhaka bank ltd anando

Evaluation of Retail Banking In Dhaka Bank Limited

INTRODUCTION: All over the world the measurement of Banking has been changing rapidly due to Deregulation, Technological improvement and Globalization. Banking in Bangladesh has to keep pace with the global change. Now Banks must compete in the market place both with local institution as well as retail banking ones. To survive and prosper in such a competitive banking world, two important requirements are Development of appropriate financial communications by the central bank and Development of "professionalism" in the sense of developing an appropriate manpower structure and its expertise and experience. To introduce skilled Banker, only theoretical knowledge in the field of banking studies is not sufficient. An academic course of the study has a great value when it has useful application in real life situation. So, I need proper application of my knowledge to get some benefit from my theoretical knowledge and make it more tactful. For this I engaged myself in such fields to make proper use of my theoretical knowledge in my practical life situation. Such all application is made possible through internship. When theoretical knowledge is obtained from a course of study at only the half way of the subject matter then Internship implies on other the full application of the methods and procedures through rich acquired of subject matter can be forcefully applied in my day to day life situation. Such a procedure of useful application is known as internship.

BACKGROUND OF THE STUDY The Internship program of BBA students of the Faculty of Business Studies, Bangladesh University of Business & Technology (BUBT), is an integral part of the BBA program. After completion of the program period a student must submit the report on the assigned topic to the Supervisor and the department. Four (4) credit hours for this internship program out of 124

credit hours of the program. The program is of three months duration. I was assigned to Dhaka Bank Limited to complete the program. During this period I worked with the employees of the organization. In consulting with the supervisor of the program I have selected a topic “Evaluation of Retail Banking In Dhaka Bank Limited”.

SIGNIFICANCE OF THE STUDY: Theoretical knowledge is not enough for a business student. Because, there must be a gap between theoretical knowledge and practical field. Our internship program has been launched mainly to bridge this gap.

This research proposes to investigate the Retail Banking Division of Dhaka Bank Limited. The objective of the bank is to become a highly professional and profitable bank to contribute to the economic development of the country. The Bank aims to continue expanding Branch network to reach wide spectrum of customers across the country and serve by offering products and services backed by latest technologies.

The bank was able to establish confidence in the minds of the customers regarding maintaining adequate liquidity to meet up the borrowers’ requirement. At the same time, the bank was able to remain profitable in terms of interest income and also maintaining a higher spread. Also lending rate is being decreased under the policy guidelines of Bangladesh Bank and the bank has to adopt necessary strategy to maintain its profitability from the loan portfolio. The purpose of Dhaka Bank Ltd. is not only to grant credit but also to develop the country through industrialization by selecting correct project and provides assistance in different way to implement successfully of selected project.

SCOPE OF THE STUDY: The study would focus on the following areas of Dhaka Bank Limited.

■ Credit appraisal system of Dhaka Bank Limited.

■ Procedure for different credit facilities.

■ Portfolio (of Loan or advances) management of Dhaka Bank Limited.

■ Organization structures and responsibilities of management.

Each of the above areas would be critically analyzed in order to determine the efficiency of DBL’s Credit appraisal and Management system.

OBJECTIVE OF THE STUDY: Broad objective of the Report

The broad objective of this project is to prepare the Internship report on selected topic “Evaluation of Retail Banking In Dhaka Bank Limited”.

Short objective of the Report The project has been directed by the following objectives: o To analysis the pros and cons of the conventional ideas about credit operation of a Bank. o To have better orientation on credit management activities specially credit policy and practices, credit appraisal, credit-processing steps, credit management, financing in various sector and recovery, loan classification method and practices of Dhaka Bank Limited (DBL). o To compare the existing credit policy of Dhaka bank limited with that of best practices guideline given by Bangladesh Bank, the central bank of Bangladesh. o To identify and suggest scopes of improvement in credit management of DBL. o To get an overall idea about the performance of Dhaka Bank Limited. o Exploring the granting procedure of credit cards. The focus will be on risk assessment.

o Exploring and analyzing the attributes of credit defaulters. Some statistical tools will be used for this analysis.

METHODOLOGY The report is prepared on the basis of credit program of Dhaka Bank Limited. Different files, statements and manual have helped me preparing this report. The subject matter of this report is based on primary and secondary sources of data and information: I. Type of Research: This is briefly revealing the retail banking activities of the Dhaka Bank Limited (DBL).

II. Sources of Data: All the necessary information to prepare this report are collected form both primary and secondary sources of data.

Primary Source: It includes the fresh or completely new data sources collected for a specified purpose, such as ----• Direct interview & Conversation.

• Expert opinion • Official records • Practical work experience.

• Different files and documents study.

• Group Discussion • Discussion with my supervisor.

Secondary Source: It includes sources of existing/published data, such as -------•

Books

•

Articles

•

brochures

•

Annual Report

•

Leaflets

•

Net browsing

III. Tools used for data collection: I have used following tools to gather our necessary data or information (both the primary & Secondary) •

Primary Data: All the necessary primary data are collected by using the following

methods or tools -

•



Observation while working in different desks



Informal discussion with professionals



Informal and oral interview.

Secondary Data: I have used following tools to gather our necessary secondary data

Brochures of Dhaka Bank Limited



Annual Report (2006-08) of Dhaka Bank Limited



Guidelines of different manual of Dhaka Bank Limited.



Deferent types of documents of Dhaka Bank Limited



Leaflets of Dhaka Bank Limited.



Net browsing

• Analysis & reporting: Descriptive analysis such as ‘SWOT analysis of Dhaka Bank’, analysis of the ‘whole operation of Dhaka Bank’ are significantly described here. Different tools are used to analyze the gathered data and different types of computer software are used for reporting the gathered information from the analysis, such as – Microsoft Word, Microsoft Excel, and Microsoft Power Point.

LIMITATIONS OF THE STUDY: Although I have obtained whole hearted Co-operation from employee of DBL Staffs but They were extremely busy. So they were not able to give much time as they and I would 1ike.

Besides, total duration of internship is not sufficient to give me more than a superficial idea of

the working of the various departments I was rotated through. On the way of my study, I have faced the following problems which may be termed as the Limitation/short coming of the study. These are as follows: -a) The main constraint of the study was insufficiency information which is required for the study. b) Since the Bank personnel are very busy with their activities, as a result they failed to cooperate with me to complete this report. c) The major problem of the study was shorter time period. For an analytical purpose, sufficient time is required. But I was not given sufficient time to prepare such as in-depth study. d) Such a study was carried out by me for the first time. So, in-experience is one of the main factors that constituted the limitation of the study.

Also that:  The problem of Load shedding.  Unavailability of adequate date information from the website.

However every possible measurement was taken to minimize the above mentioned limitations and to make the study effective and fruitful.

Overview of Dhaka Bank Limited 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 channelize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country grouped together to responded to this need and established Dhaka Bank Limited in the year 1995.

The Bank was incorporated as a public limited company under the Companies Act. 1994. The Bank started its commercial operation on July 05, 1995 with an authorized capital of Tk. 1,000 million and paid up capital of Tk. 100 million. The paid up capital of the Bank stood at Tk

1,934,252,875 as on June 30, 2008. The total equity (capital and reserves) of the Bank as on June 30, 2008 stood at Tk 3,424,609,016.

The Bank has 44 branches, 2 SME Service Centers, 1 Business Center, 2 Offshore Banking Units across the country and a wide network of correspondents all over the world. The Bank has plans to open more branches in the current fiscal year to expand the network.

The Bank offers the full range of banking and investment services for personal and corporate customers, backed by the latest technology and a team of highly motivated officers and staff.

In our effort to provide Excellence in Banking services, the Bank has launched Online Banking service, joined a countrywide shared ATM network and has introduced a co-branded credit card. A process is also underway to provide e-business facility to the bank's clientele through Online and Home banking solutions.

Dhaka Bank Ltd. is the preferred choice in banking for friendly and personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments.

Mission of the Dhaka Bank Limited To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking.

Vision of the Dhaka Bank Limited At Dhaka Bank, we draw our inspiration from the distant stars. Our team is committed to assure a standard that makes every banking transaction a pleasurable experience. Our endeavour is to offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments.

Goal of the Dhaka Bank Limited Our people, products and processes are aligned to meet the demand of our discerning customers. Our goal is to achieve a distinction like the luminaries in the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision – Excellence in Banking.

Objective of the Dhaka Bank Limited: •

Enhancing savings tendency of the people by offering attractive and lucrative new savings scheme.

•

Encouraging and motivating the new entrepreneurs to establish industries and business in line with development of national economy.

• Financing the foreign trade of the country both Export and Import.

• Enhancing the mobilization of savings both from urban and rural area.

Values of the Dhaka Bank Limited: • Customer Focus.

• Integrity, • Teamwork.

• Respect for the Individual, • Quality.

• Responsible Citizenship.

Organizational Structure of Dhaka Bank Ltd: There are three different wings to consist the organizational structure of PBL. They are:  Board Directors  Executive Committee  Audit Committee  Management Committee Board of Directors: Chairman Vice Chairman Directors Managing Director

Company Secretary

Auditors Legal Advisor

[ Advisor

Executive Committee:

Chairman Vice Chairman Member

Audit Committee: Chairman

Member Managing Director

Management Committee: Deputy Managing Director In-Charge, SME Unit Head of Credit Operations & Change Management Public Relations Officer Company Secretary In-Charge, Retail Banking Division Head of Operations Division Division Head of Audit & Internal Control Head of Capital Market Services Division Management Head of Credit In-Charge, SME Unit Management Head of Human Resources Public Relations Officer In-Charge, Retail Banking Division In-Charge, InformationDivision Technology Division Head of Capital Market Services In-Charge, Treasury Division Head of Finance & Accounts Division Division Management Global Transaction Services Division

Managing Managing Director Director (MD) (MD)

Deputy Deputy Managing Managing Director Director (DMD) (DMD)

Senior Senior Executive Executive Vice Vice President President (SEVP) (SEVP)

Executive Executive Vice Vice President President (EVP) (EVP)

Senior Senior Vice Vice President President (SVP) (SVP)

Hierarchy of Dhaka Bank Ltd:

Vice Vice President President (VP) (VP)

Senior Senior Assistant Assistant Vice Vice President President (SAVP) (SAVP)

Assistant Assistant Vice Vice President President (AVP) (AVP) Senior Senior Principal Principal Officer Officer (SPO) (SPO)

Principal Principal Officer Officer (PO) (PO)

Senior Senior Officer Officer (SO) (SO)

Management Management Trainee Trainee Officer Officer (MTO) (MTO)

Officer Officer

PRODUCTS & SERVICES Corporate Banking: Securitization of Assets A powerful and effective means of generating funds for a certain category of institutions, Securitization of Assets is still in its infancy in The need however for such a service is great and there is a lot of support from multilateral financial institutions, such as the World Bank and the Asian Development Bank, for such activities to be developed further in this country.

Dhaka Bank intends to take up this challenge and play a significant role in ensuring that Securitization of Assets becomes a normal part of the range of financial instruments available for organizations who can count on a steady, but piecemeal, flow of revenue and want to translate this stream into cash resources with which to carry out further lending activities to new customers. Some practical issues still need to be settled such as those concerning pricing, or the legal framework, but it is expected that, as Dhaka Bank and other institutions pursue more such securitization activities these will be resolved.

Finance & Advisory Services Given the needs of its large and varied base of corporate clients Dhaka Bank will be positioning itself to provide investment banking advisory services. These could cover awhole spectrum of activities such as Guidance on means of raising finance from the local Stock markets, Mergers and Acquisitions, Valuations, Reconstructions of Distressed companies and other expert knowledge based advice. By this means Dhaka Bank hopes to play the role of strategic counselor to blue-chip Bangladesh companies and then move from the level of advice to possible implementation of solutions to complex financing problems that may arise from time to time. This would be an extra service that would complement the normal financing activities that Dhaka Bank already offers to corporate business houses.

Syndication of Funds There has been a surge in the number of syndication deals closed in the last few years. 2004 was an exceptionally good year for syndicated deals for the local commercial banks also for the foreign banks. The total number of syndications in 2004 exceeded 10 totaling over Tk. 10 billion. This rise in the number of syndications can be primarily attributed to the prudential lending guidelines of the Bangladesh Bank. A commercial bank may provide funded facilities up to a maximum of 25% of its equity. Due to this reason, projects with sizeable costs need to approach more than one bank for their debt requirements and therefore the demand for

syndications exist. Credit risk diversification has led many international companies to introduce credit derivatives that are actively being traded. Securitization of assets is one such credit risk derivative that allows financial institutions to diversify their portfolios.

At Dhaka Bank Limited, the Syndications and Structured Finance unit was setup on October 30, 2004. This unit successfully closed two syndicated deals in the first and second quarters of 2004. The Syndications and Structured Finance team as a business unit soon followed up by closing another deal totaling Tk 2.10 billion for a large local corporate. The year (2004) being the first full year of operation for the team ended on a high note as we were able to close three syndicated deals as the Lead Bank, two deals as the Co-Arranger and several other deals as a participant.

Retail Banking In the year 2007, Dhaka Bank Ltd. has signed MOU with 8 (eight) renowned car dealers namely: Haq's Bay, Car House Ltd., The Sylhet Car, Car Port, Legend Car, Nippon Auto Trading, M/s.

Kabir Enterprise and Capital Motors. The MOU empowers car buyers to avail DBL Car Loan at a reduced rate of 15%. This MOU will be valid for two years. Dhaka Bank will continue the MOU signing campaign with other renowned car dealers in and around Dhaka and Chittagong.

Deposit Double is a time specified deposit scheme for individual clients where the deposited money will be doubled in 6 years.

Deposit Pension Scheme Dhaka Bank is well poised to be the leading Retail Banking business amongst the local private banks. Bank's conscious efforts in brand building, introducing and supporting new packaged products, developing PB organization along with non-traditional delivery channels have resulted in good brand awareness amongst its chosen target markets Installment based savings schemes are a major category of saving instruments amongst mid to upper middle-income urban population.

Income Unlimited The management of Dhaka Bank Limited is pleased to launch Special Deposit Scheme, a new liability product on May 04, 2005.

Product Name Special Deposit Scheme Product Features Excel Account Has been tailored in the manner of having both asset and liability characteristics blended into a single product for salaried individuals employed in any institution. On virtue of this product, prospective clients receive a credit interest based on the credit balance available in the account. The clients will also be required to pay the bank OD interest if the balance of the account becomes overdraft.

Salary Account Dhaka Bank has launched a special package of savings account for employees belonging to institutions with which Dhaka Bank has a corporate agreement. With this package salaried employees of these institutions enjoy interest on a daily balance. The key features of the Salary Account are: * Interest to be calculated on a daily balance basis * No Periodic Service Charge * ATM Card Facility * Credit Card Facility * On-line Banking Facility * Internet & SMS Banking Facility Gift Cheque Dhaka Bank has recently refurbished its Gift Cheque. The features of the gift cheque are as follows: * Can be en cashed at any branch even if the en cashing branch is not the issuing branch of the instrument. * Interest will be applicable only if the instrument is en cashed after three months from the date of issue in the following manner: •

No Interest if en cashed before three months from the date of issue.

•

6% if en cashed after three months and before twelve months from the date of issue.

•

7.25% if en cashed after twelve months from the date of issue.

* The gift cheque may be en cashed using either of the two modes, (a) cash or (b) Fund Transfer. Encashment of gift cheque is not allowed over clearing. * No service charge is applicable * Dhaka Bank Limited issues gift cheques in three denominations of Tk.100, Tk.500 and Tk.1000 Personal Loan As part of establishing a Retail Banking franchise of Dhaka Bank Limited, the bank has successfully launched Personal Loan. The product is a term financing facility to individuals to aid them in their purchases of consumer durables or services. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equated monthly installment) across the facility period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 48 months.

Car Loan Car Loan is a term financing facility to individuals to aid them in their pursuit of has a car of their dream. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equal monthly installment) across the facility period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 60 months. In case of brand new cars the loan tenure will be maximum 72 months.

Home Loan The product is a term financing facility to individuals to aid them in their purchases of apartment or house or construction of house. The facility will become affordable to the clients as the repayment is done through fixed installment as commonly known as EMI (equal monthly installment) across the facility period. Depending on the size of the loan, the maximum period of the loan would be 180 months (15 years).

Islamic Banking Dhaka Bank Limited offers Shariah based Islamic Banking Services to its clients. The bank opened its First Islamic Banking Branch on July 02, 2003 at Motijheel Commercial Area, Dhaka.

The second Islamic Banking branch of the bank commenced its operation at Agrabad

Commercial Area, Chittagong on May 22, 2004.Dhaka Bank Limited is a provider of on line banking services and any of its clients may avail Islamic Banking services through any of the branches of the bank across the country.

Dhaka Bank Islamic Banking Branches offer fully Shariah based, Interest free, Profit-Loss Sharing Banking Services. Dhaka Bank Shariah Council is closely monitoring its activities. Besides, Dhaka Bank is an active member of Islamic Banking Consultative Forum, Dhaka and Central Shariah Board of Bangladesh.

Our valued clients may have the following accounts with our Islamic Banking Branches 01.Al-Wadeeah Current Account.

02.Mudaraba Savings Account.

03.Mudaraba Term Deposit Account.

04.Mudaraba Special Notice Account.

05.Mudaraba Hajj Savings Account.

06.Mudaraba Pension Scheme Account.

07.Mudaraba Special Deposit Scheme Account.

08.Mudaraba Foreign Currency Deposit Account.

Dhaka Bank Limited Islamic Banking Branches offer the following products 01.Mudaraba Purchase Order.

02.Bai Muazzal Industrial.

03.Bai Muazzal Others.

04.Mudaraba Post Import Trust Receipt.

05.Mudaraba Term Financing Industrial.

06.Mudaraba Term Financing Others.

07.Sirkatul Milk.

08.Ijara Transport.

09.Ijara Machinery & Equipment.

10.Quard.

Besides, selling of Payment Order, Demand Draft, Bank Guarantee and other banking services are available in Dhaka Bank Limited Islamic Banking Services Capital Market Services Capital Market Operation besides investment in Treasury Bills, Prize Bonds and other Government Securities constitute the investment basket of Dhaka Bank Limited.

Interest rate cut on bank deposits and government savings instruments has contributed to significant surge on the stock markets in the second half of 2004, which creates opportunities for the Bank in terms of capital market operations. The Bank is a member of Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. The investment portfolio of the Bank made up of Government Securities and Shares and Debentures of different listed companies stood at Tk. 3,078 million as of December 31, 2004 indexing a 50% increase over Tk. 2,046 million in the previous year. Income from investment stood at Tk. 146 million in 2004 registering a 10% growth over the previous year.

SME Since inception, the Dhaka Bank has held socio-economic development in high esteem and was among the first to recognize the potentials of SMEs. Recognizing the SME segment’s value additions and employment generation capabilities quite early, the Bank has pioneered SME financing in Bangladesh in 2003, focusing on stimulating the manufacturing sector and actively promoting trading and service businesses.

ATM Card Services Cash Withdrawals – up to Tk.1 Lac per day Utility payments – AKTEL, BanglaLink, GP, CityCell, TeleTalk Mobile phone bills etc.

Multi-account access Fund Transfers Mini Statements

PIN change Credit Card Services Reasons for Preferring Dhaka Bank VISA Credit Card Substitute of Cash- Zero Cash Handling ensures Security Wide Range of Local & International Products (Classic, Gold) Hassle Free Documentation No Joining or Processing Fee Flexible Credit Limit Enhancement Based on Usage & Regular Payment Flexible Payment through Cash, Cheque or Dhaka Bank account debit Auto Debit Payment facilities for DBL account holders Auto Renewal of card before expiry date Competitive Fees & Charges Supplementary Cards for dear ones Separate Limits for Supplementary Cards Cash Advance facility upto 50% of Credit Limit Dedicated Sales Team and Customer Service Desk at your service International Card against RFCD account & ERQ International Card- Accepted Worldwide for Purchase & Cash Withdrawals Locker Services You could use the locker facility of Dhaka Bank Limited and thus have the option of covering your valuables against any unfortunate incident.

We offer security to our locker service as afforded to the Bank's own property

at a very competitive

price.

We would be at your service from Saturday through Thur sday from 9:00 am to 4:00 pm.

Lockers are available at Gulshan, Banani, Dhanmondi, Uttara, CDA Avenue & Cox's Bazar Branch.

The products and services offered from this department include:

* Online fund transfer between Dhaka and any branch of DBL over the country * Efficient collection mechanisms at different outstation points * Innovative and competitive deposit products * Prompt distribution of inward remittance at competitive rates * Mobile banking.

Other Departments Human Resource Department (HRD) This department is very essential and important department for every organization. This is the place where the employees get the opportunity to get trained and all other human resource related services are dealt. This department is not directly involved with Bank business but working with those persons who directly & indirectly involved with Bank business. The major responsibility of HRD is employee’s recruitment, posting, transfer, increment, Bonus, provident fund, confirmation, training, hire & fire and so on. Welfare of all departmental employees is on HRD. Therefore, HRD should be judicious, compassionate and rewarding to all employees.

The major responsibilities of HR are as follows: •

Employee recruitment

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Posting

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Transfer

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Increment

•

Established yearly performance bonus

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Provident fund

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Confirmation

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Training

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Travel policy

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Telephone policy

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Hospitalization

Card Division DBL is the first domestic commercial bank in Bangladesh to introduce Visa Electronic and Visa Credit Card at the same time. DBL is also the only bank in Bangladesh to introduce Visa ATM Acquirer along with POS Acquire, which opened the opportunity for all the Visa Cardholders (domestic and international) to use the ATMs. PROFILE OF DHAKA BANK TRAINING INSTITUTE Human resources development through training is the most essential part for organizational growth since it enriches knowledge, skill and professional expertise. The utter need for professional development of employees of Dhaka Bank Limited has always been duly recognized by the Board of Directors and the Management of the Bank.

The approval for establishment of a training institute in the name of Dhaka Bank Training Institute was given in the Executive Committee Meeting held on December 07, 1999. Initially in June 2000, the basic infrastructure for a non-residential Training Institute was set in the first floor of Adamjee Court, 115-120, Motijheel Commercial area, Dhaka. This was in fact a shared premise with Dhaka Bank Limited, Local Office. Decision was made to shift the Training Institute to a bigger space considering the broader dimension of training and increased volume of activities. In September 2001, DBTI was shifted to the previous premises of a three-storied building at House 02, Road 12, Sector 01, Uttara Model Town, Dhaka 1230.

In January 2004, DBTI was again relocated to the present premises of Sara Tower (3 rd Floor), 11/A Toyenbee Circular Road, Motijheel C.A., Dhaka 1000 with a total office space of about 4,000 sq. ft.

Dhaka Bank Training Institute is committed to develop the human resources, the main driving force of the Bank through structured modular training programmers. With a view to achieve professional excellence in Banking, DBTI conducts various courses, workshops, executive development programmes mainly for officers and executives of the Bank.

Since inception in June 2000 till October 2006, DBTI provided training to as many as 4,202 participants through 176 different training programmers. There were 17 Foundation Training Courses for the newly recruited Probationary Officers, Assistant Officers and Junior Officers covering areas like General banking, Credit & International Trade. Various training courses of long duration were conducted on International Trade, Finance & Foreign Exchange, Credit Management, Banking Laws & Practice, Lending Risk Analysis, General Banking & Cash Management, Marketing Strategy of Banking Products, Computer Usage, Computer Software and Application, Islamic Banking & Finance etc.

Dhaka Bank Training Institute has also conducted various workshops on SWIFT, UNIX Operating system and Banking Software PCBank/M, Clearing House Procedure – NIKASH, Uniform Customs and Practice for Documentary Credit (UCPDC), Uniform Rules for Collection (URC), Uniform Rules for Bank-to-Bank Reimbursement (URR), Any-Branch Banking, Credit Card Marketing, Revised Procedures of Loan Classification and Provisioning and Credit Information Bureau (CIB) Reporting, Prevention of Money Laundering, Irregularities & Malpractices in Banks and Risk Management, Reconstruction of Financial Statements & Credit Scoring System, Preparation of Credit Proposals and Documentation, Aretha Rin Adalat Ain 2003, Managing Core Risks (Credit Risk, Foreign Exchange Risk, Internal Control & Compliance Risk, Asset Liability Management Risk and Money Laundering Risk) in Banking, Marketing of Retail Banking Products, Insurance in Banking Business, etc.

Management, it was decided that the DBTI Team would visit all the Branches to conduct Workshop on the subjects. The purpose was to cover all Officers of the Bank to have attended the Workshop as desired by the Central Bank.

A profile of Dhaka Bank Official name : Legal frorm

Dhaka Bank Limited A public limited company incorporated in Bangladesh on 6th April 1995 under the Companies Act, 1994 & listed in Dhaka Stock Exchange Ltd & Chittagong Stocki Ltd.

Date of commencement

July 5, 1995

Registered qffice Telephone Telefex Swift code: e-mail Web page Auditors Tax consultant Managing director Company secretary

Biman bhaban, 1st flr, 100, Motijheel C/A, Dhaka-1000 9554514, 9571006-10 9556584 DHBLBDDH Dhakabank@bdonline.com www.dhakabank.info ATA HAN & CO, Chartered Accountants Howlader, Youns & Co, Chartered Accountants Shahed Noman Arham Masudul Huq

Academics & logistics: Besides Vice President of DBTI and internal resource persons, DBTI invites experienced and knowledgeable external resource persons from Ministries, Bangladesh Bank, Bangladesh Institute of Bank Management, Universities and other relevant organizations to deliver lecture and conduct practical sessions.

The Institute has a large classroom, which can accommodate more than 50 participants. DBTI has its own computer lab; in which computer and information technology related training programmers are conducted throughout the year. The computer laboratory has arrangement for on-line training with test server connected directly from the main server at our IT Division.

To impart IT & Software training smoothly, the Institute & IT Division jointly arranges programmers using LAN with computers of IT Division & DBTI. The Bank installed core Banking Software Flex cube acquired from I-flex, Bangalore, India. According to I-flex Annual Report 2001-02, they provided software & services to 345 financial institutions across 84 countries.

Flex cube, the product software of I-flex, is a world class integrated banking software with a full

suite of core, corporate, trade finance, treasury and general ledger modules. It provides truly real time on-line anywhere anyway banking service through Branches ATMs, Internet banking, SWIFT, telephone banking and mobile phone banking. That requires us to be prepared for thorough & vigorous training for all relevant Executives & Desk Officers.

Sufficiently furnished & properly equipped, DBTI can smoothly organize training with easy arrangement for classroom logistics, multimedia and overhead projector. Group Discussion, exams, newspaper corner, lunch & snacks rooms are also there with comfortable arrangements.

Besides internal resource persons, DBTI invites experienced and knowledgeable external resource persons from Ministries, Bangladesh Bank, Bangladesh Institute of Bank Management, Universities and other relevant organizations to deliver lecture and conduct practical sessions.

Training Consultancy/Tie-up/Partnership As a complete Training Institute we train not only employees of our Bank, other fellows of the Banking fraternity are also trained here. So far we have arranged training courses (either solely for other Banks or jointly in the Courses attended by mainly our employees) for employees of Social Investment Bank Limited, Bank Asia, Premier Bank etc.

DBTI, in a bid to work in partnership and as a respectful gesture towards Human Resources Development in an interactive way of expanding relationship, conducted Foundation Training Course for the Bankers for 40 Probationary Officers of Jamuna Bank Limited, a fellow Private Commercial Bank in 2004. It may be mentioned that while charging for conducting such Course, we considered only variable cost elements being guided by the idea of cementing the bondage among Banking Fraternity.

Internally, we tie-up with our Retail Banking Division to arrange pre-launch trainings involving sales peoples of companies who will be marketing our new Banking products. We also train the Direct Sales Agents working with Marketing Companies like Market Access Limited etc. for selling our products. Areas for collaboration included training and technical assistance on Information Technology, Marketing, Human Resources Development and Credit Management.

SEDF is a multi-donor funded programme, promoted by the International Finance Corporation

(IFC) and managed by the SME Department of the World Bank Group. As per the MOU, the Bank will participate in the following collective programmers: •

Corporate governance workshop

•

Industry analysis

•

Reconstruction of financial statements and credit scoring

•

Credit risk and lending to SME sector

•

Managing problem loans and debt recovery

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Asset and liability management

•

Lease financing

•

Islamic banking and finance

•

Marketing of financial services to SMEs

•

Customer service (satisfaction survey, service measurement and benchmarking)

•

Leadership and change management

•

Loan syndications

Preparation of Course Plan While designing & formulating a Course, we gather General Information regarding the course, fix target group and code of conduct for them to follow. Thereafter we talk to Head Office & the Management. The programme is drawn within the policy given by the Board of Directors. While making a list of programmes/courses to hold over a certain period, in addition to basic/core Banking Courses we include need-based programmes as well. We have already conducted several Training Need Assessments in this connection.

The Session Schedule is prepared setting topics & classes in proper order. Appropriate Speakers for the topics are selected from the Faculty Members, if any, of our Institute and Bankers/Experts on the subject in our Bank, fellow Banks, Universities, Government Secretariat and other places.

The Vice President calls periodical staff meetings to discuss policy issues, current development in relevant fields and also common matters like housekeeping, library upkeep, logistic support, progress in arrangement of present & ensuing programmes etc.

We interact with the Training Institutes of different fellow Banks & other Institutes including Bangladesh Institute of Bank Management (BIBM) for curriculum development. We also seek suggestions from the Management in such matters.

Retail Banking Practice of Loan and Advances Consumer Credit Scheme: DBL has devised and introduced Consumer Credit Scheme to extend credit facility to the limited and fixed income group to improve their standard of living. Under this scheme the bank finances their purchase their consumer durable viz. Air Conditioner, freeze, TV, Washing Machine, Private Car, Jewelry etc. The individual repay the loan in easy monthly installment.

Objective of the consumer Credit: •

To extend credit facility to the limited income group.

•

To develop standard of living of middle and upper middle class.

•

To participate in the socio economic development in the country.

Credit available for: •

Individual such as confirmed officers/ executives of Government/Semi Government organizations

•

Autonomous bodies,

•

Corporations, multinational companies, local renowned companies

•

Banks, insurance companies

•

Teachers of educational institutions

•

Officers of armed force, member of professional bodies and

•

Other self employed persons.

•

Vehicles:

•

Car

• • •

Microbus Small jeeps Motorcycle etc.

•

Intangibles:

• • • •

Medical Expenses Holydays and Marriage Education

•

Others:

• • •

Home repair Redecoration and Renovation Jewelry

Limit: Through the bank gives the consumer loans, but it has got some limitations.

Procedure for availing the credit facility : Minimum loan amount Minimum loan amount Minimum loan amount Minimum loan amount

:Tk.25,000/- and :Tk.5, 00,000/- (for Personal Loan - unsecured). :Tk.20, 00,000/- (for Auto Loan - unsecured).

Tk.35, 00,000/- (for Home Loan - unsecured).

Debt equity ratio: Equity in the form of margin shall be at least 15% of the value of the item (except for vehicle).

For vehicle, it will be at least 30%. The client/borrowers before disbursement of the loan will deposit the amount if equity.

Repayment Arrangement: •

Equal monthly Installments for both principal and interest, covering the period of the loan.

•

Installments to be paid within the 30th of each month.

Securities and Documentation: •

Personal guarantee (for all product specification).

•

Cash collateral (for secured overdraft / loans).

•

Charge documents. Cycle registration shall be in the joint names of the bank and the borrower.

Authority for approval: Branch Managers jointly with Sub-Manager / Relationship Official For exceptional cases - the Senior Executive Vice President (Corporate Banking) and the Senior Executive Vice President (Credit) or Managing Director.

Monitoring: The members of the Consumer Banking Department review the position of all the Branches and monitor each and every account. Letters, reminders or even phone calls are made to any Branch which fails to realize the installments timely. The Branches are given time limit to reduce the overdue liabilities or face the consequence of having to lose their discretionary power of disbursing further Consumer Loans.

UNSECURED LOANS Personal Loan As part of establishing a Retail Banking franchise of Dhaka Bank Limited, the bank has successfully launched Personal Loan. The product is a term financing facility to individuals to aid them in their purchases of consumer durables or services. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equated monthly installment) across the facility period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 48 months.

The target market for personal loan will mainly comprise of following category – Salaried employees Of institutions in the Dhaka, Chittagong and Sylhet markets.

Professionals

who are self employed and have at-least 3 years of independent practice in the area of profession.

Businessmen who are permanent residents of Dhaka, Chittagong and Sylhet metropolis with at least 3 years of continued operation in the line of business?

Restrictions and client eligibility Loans are restricted to Bangladeshi nationals falling in the categories mentioned below The minimum age for any borrower will be 25 years and the maximum age 52 years with a minimum verified Gross Family Monthly Income of BDT 10,000.

Salaried employees

Permanent salaried employees with at-least 12 months of confirmed service with the present employer.

Work station in Dhaka, Chittagong, Sylhet and where Dhaka Bank operates University graduates

Professionals

Doctors,

Dentists,

Engineers,

Chartered

Accountants,

Architects who are members of their professional institutes.

Practice and location in Dhaka, Chittagong, Sylhet and where Dhaka Bank operates.

At-least 3 years of continued practice in the respective profession in Dhaka or Chittagong.

Businessmen

Continued operation of the enterprise of at-least years in the present line of business.

Membership of the trade association.

A resident of Dhaka, Chittagong, Sylhet and where Dhaka Bank operates for at least 5 continuous years.

Car Loan Car Loan is a term financing facility to individuals to aid them in their pursuit of has a car of their dream. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equal monthly installment) across the facility

period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 60 months. In case of brand new cars the loan tenure will be maximum 72 months.

Targeted market The target market for personal loan will mainly comprise of following category a. Salaried employees of institutions in cities where Dhaka Bank Operates. b. Professionals who are self employed and have at-least 3 years of independent practice in the area of profession. c. Businessmen who are permanent residents of Dhaka, Chittagong, Sylhet metropolis and where Dhaka Bank Operates with at least 3 years of continued operation in the line of business.

Restrictions and client eligibility 1. Loans are restricted to Bangladeshi nationals falling in the categories mentioned below.

The minimum age for any borrower is 25 years and the maximum age is 52 years with a minimum verified Gross Family Monthly Income of BDT 45,000.

Salaried employees

Professionals

Businessmen

Permanent salaried employees with at-least 12 months of confirmed service with the present employer.

Work station in Dhaka, Chittagong, Sylhet and where Dhaka Bank operates University graduates Doctors, Dentists, Engineers, Chartered Accountants, Architects who are members of their professional institutes.

Practice and location in Dhaka, Chittagong, Sylhet and where Dhaka Bank operates.

At-least 3 years of continued practice in the respective profession in Dhaka or Chittagong.

Continued operation of the enterprise of at-least 3 years in the present line of business.

Membership of the trade association.

A resident of Dhaka, Chittagong, Sylhet and where Dhaka Bank operates for at least 5 continuous years.

Asset Operation Department 1. Pre-Disbursement Activities Tasks Carried Out by the Risk Assessment Before Approval:

o Applications and other formants are checked to ensure that they are properly filled in, sealed and signed. o Applications are also checked to ensure that the applicants fulfill all criteria in line with the EC approved policy. o Applicants are checked with ‘Defaulting Borrowers Database’ of Personal Banking Division to ensure that they are not defaulters with DBL. o Applicants are also checked with ‘Defaulting Borrowers Database’ of other banks to ensure that they are not defaulters with others. o Perfect applications are forwarded to third party agent for neutral and quick verification. o All information in the verification report is checked with application to ensure maximum accuracy. o Supporting documents (viz. document of identification, salary certificate, trade license, partnership deed, COI, MOA, utility bill, lease deed agreement etc. ) are checked to ensure that they are provided in line requirements for the EC approved policy. o Information in supporting documents is also checked to ensure that they are exactly in accordance with the application. o Bank Statements are verified with concerned banks to ensure that nobody approaches for PB facility with forged financial document. o Bank Statements are verified with concerned banks to ensure that the accounts have very little or no history of check returns. o Bank Statements are used to identify different loan installments with other banks. This is done with a view to determine the nearest possible financial obligation of the applicants per months. o Bank statements are also used to calculate the applicants average monthly turnover/deposits. This is done with a view to make rough estimation about monthly gross income of the applicants.

Affidavit For any mismatch of client names in documents (Halafnama of TK 50 Stamp paper) Rental deed

•

Client’s Name and business address

•

Rental deed validity minimum 6 months after disbursement

•

Signature of Tenant, Owner (in all pages) and witnesses.

• Trade License •

Client’s Name and business name

•

Business address and type of business

•

Related regulatory authority license

•

Validity of the license minimum 6 months after disbursement.

Registered Mortgage In case of the loan files where registered mortgage is a requirement, AOD checks the following land documentation: o Original Title deed for the entire mortgaged property. o Bia Deeds/ Duplicate of Bia Deeds to support the Title Deed. o Mutation of the Mortgaged Property by the concerned AC Land o Original Khatians I. Revisional Survey (R.S) - most important one II. Bangladesh Survey (B.S) –if done and issued III. State Acquisition (S.A) & Catetal Survey (C.S) – If there

o

Up to Date Duplicate Carbon Receipt for the property after mutation.

o

Non Encumbrance Certificate issued by the Sub-Registrar’s Office for the past 12 years.

o

Up to date Rental Receipt for the property.

o

Mortgage deed between AB Bank Limited and the enterprise.

o

Notarized Memorandum of Deposit of Title Deeds.

o

Legal Opinion

o

Power of Attorney in Favour of AB Bank Ltd

o

If the business is situated in land owned by Parents/ Siblings/ Spouse –

I. Mortgage given by third party (For Registered Mortgage) II. MDTD sign by all land owner (For Equitable Mortgage) III. PG or NOC (Non objection certificate by third party) IV. Ward commissioner’s (warission) certificate in case of clients parent’s death If any documentation deficiency is found, the concerned CRO, ZO is informed for resolving the deficiency. After checking the required fees submission for Loan Documentation, the application is sent for Insurance Premium Checking.

Insurance Premium Checking Risk issues while checking Loan Documentation: •

No Fluid or overwriting should be there

•

Missing of seal and sign (Check all Pages)

•

Missing of Signature verification by CRO

•

Lack of witness CRO and Guarantor

•

Missing of any clause of charge documents

•

Missing Guarantors sign in Guarantee page

•

Mismatch in Client’s Name, Business Name, Addresses and business type

•

Incomplete documentation for registered mortgaged property

•

Validity of licenses and deeds

•

Bank’s name, client’s name, seal, signature and number of undated cheques

Besides, some particular licenses are required for categorized enterprises, like: •

Drug license (Medicine Business)

•

BSTI (Food Business)

•

Diesel / LP gas / Petrol (Fire license from Directorate of explosives)

•

Saw Mill (Permission from District Forest Department)

•

Pesticide (Permission from Agricultural Extension Department)

1.3 Loan Sanction

Client’s information & Loan details is matched with the Credit approval then loan is sanctioned & a Loan Sanction Number is auto generated 1.4 CIB Obtaining Process Credit Information Bureau (CIB) of Bangladesh bank has a central database for all the lenders of Bangladesh. It contains the total credit history of a client and act as the most dependable source to analyze the credit worthiness of a prospective client. Obtaining the CIB clearance is a precondition of fund disbursement and all type of Retail, SME and corporate loan require CIB report before disbursement. For some retail unsecured assets, BBL obtains post-facto CIB clearance. However, in most cases AOD obtains the CIB for a client before disbursement of fund.

To obtain a CIB report, AOD fills up the following Bangladesh bank prescribed forms for each loan application: I. Inquiry Form: CIB – 1A:

For each individual/ institution

II. Inquiry Form: CIB – 2A:

Owner information if borrower is institution

III. Inquiry Form: CIB – 3A:

Group/ related business information of borrower

IV. CIB Undertaking form “KA”: For each individual/proprietor/director/partner These forms are filled up by the business units and sent to the CIB segment of AOD. CIB segment maintains a central database for all the CIB inquiry forms. Each form is registered under a Head Office serial number and a Branch/ Unit office serial number. Therefore AOD prepares a forwarding letter with reference to 20 such inquiry forms, and sent them to Credit Information Bureau of BB once in a day.

Usually the CIB reports are received within 7-10 working days.

After receiving the reports from BB, AOD prepares a summary of the report and put that as reference in the loan file along with the photocopy of the CIB inquiry forms, undertaking and copy of the original CIB report.

For any mistakes made in the forms, writing wrong spelling, incomplete name of individuals or institutions, CIB report may show error as mismatch exists there. Those CIB inquiry forms require to be sent again correcting the facts. CIB reports are usually updated quarterly and halfyearly. Therefore most updated CIB reports are required to be obtained and CIB report is also require for the same client for repeat loan.

All forms need to be supported by the Applicant’s Undertaking and all the forms are signed by designated officers of the business division; e.g.

•

Relationship manager for Corporate Application

•

Sales Manager for Retail Application

CIB is a regulatory requirement for Loan Documentation.

2. Disbursement Activities Documentation Check List

Branch/Unit Office

Other Bank’s Lien Confirmation (For Secured Loans/ Secure OD)

Lien Confirmation on Down Payment (For Auto Loan/ Now Loan/ Secured Loan)

PO Voucher (for Auto Loan/ Now Loan and Corporate)

Transaction Report: Voucher Printing 2.1. Process Flow for Loan Disbursement

Preparation of purchase order (For Auto Loan/ Now Loan)

Entry in FINACLE

Voucher Posting

Disbursement Voucher

Documentation checking before sanction and Activation

Loan Activation

Lien Confirmation

Sanction and Repayment schedule setup

Charge collection voucher

2.2. Loan Disbursement After the loan documents are checked by AOD, complete and OK files are sent for disbursement.

All the files in AOD have a checklist attached and the officers who check the documents initial the files and approve them for disbursement clearance. Disbursement process for retail, SME and corporate are different as discussed below:

Client ID is created in the AOD and details customer information are filled in client information module. Repeat applicants have the same client ID but a new Loan Account number. After the client ID creation, a list of clients is created where the following information are entered: •

Client ID

•

Name of the business

•

Bank information (Rupali, Agrani, Janata, Pubali, City, BKB, and BBL)

•

Accounts information (Branch, A/C No.)

•

Approved Loan amount

•

Unit Office & CRO information

•

Disbursement date (As per the Loan application)

The senior officers check this file and after loan account activation, disbursement is made to clients’ link account, which is mentioned in loan application. Disbursement process flow is: Opened Loan A/C

BBL Central Nostro A/C in that Bank

BBL mother A/C for that Unit Office

Client’s Link A/C

Loan Account Opening and Activation Using the “Loan Advance Module” of MYSIS, AOD opens a new “Loan Account” for a specific SME loan application and link the “Customer ID No.” and “Link Account information (Which is in JB, AB, RB, PBL, BKB, CBL and BBL)”. All SME unit offices have a “mother account” in any of the 6 banks mentioned above. A client has to open the “Link Account” in that branch of the Bank.

Before fund Disbursement AOD checks whether the voucher for fee received from the respective unit office and payment voucher from client’s link account for loan processing fee, documentation fee along with VAT and data verification charges against the loan are received with the loan application. The loan applicants also pay Insurance Premium along with other fees. After opening the loan account, the officer authorized to sanction a loan “Sanctions” the approved amount and a “Repayment Schedule” is prepared. After the Sanctioning, the Loan is then “Activated” by the authorized officer. After the activation of the loan account, details of the securities provided for this facility, are entered in MYSIS. When the loan account is

activated a disbursement instruction is sent to the central “NOSTRO Account” of the respective Bank (Any of the 6 banks). After the disbursement, AOD fill up the security and guarantors’ information in MYSIS. 3. Post-Disbursement Activities 3.1. Repayment Schedule Sent to Business Unit 3.2. Loan details MIS entry 3.3. Loan files sent to Central Archive 4. Recovery Activities 4.1. Internal Process for Loan Repayment •

Manual activities I. Receive & print SMS/ Fax for installment deposits (SME) II. Check SMS data in MYSIS & resolve problems III. Post recovery checking with unit office/ branch statement IV. Repayment schedule checking V. Inter branch Account- Other Bank’s Cheque clearing (for corporate)

SWOT Analysis of Dhaka Bank Limited: SWOT is an acronym for the internal strength and weakness of a firm and the environmental Opportunity and Threat facing that firm. So if we consider Dhaka Bank as a business firm and analyze its strength, weakness, opportunity and threat the scenario will be as follows: Strength •

Well Management Team.

•

Energetic as well as smart team work.

•

Both formal and informal communication network within the organization.

•

Usage of e-commerce relevant banking software such as Oracle.

•

Established customer relationship management.

•

Membership

with

SWIFT

(Society

for

Worldwide

Telecommunication).

•

Strong financial position.

•

Online banking service.

•

Excellent monitoring and supervision.

Weakness •

Lack of proper motivation, training and job rotation.

•

Lack of experienced employees in junior level management.

•

Lack of ATM services.

Inter-bank

Financial

•

Tendency to leave the bank in quest of flexible environment.

•

Complexity in informal network.

Opportunity

•

Expanded market.

•

Growth of sales volume.

•

Change in political environment.

•

Launching own ATM card services.

Threats •

Different service of FCB’s (Phone Banking/ Home Banking).

•

Daily basis interest on deposit offered by HSBC

•

Entrance of new PCB’s

Retail Banking: Overall Service Procedure Of all the functions of a modern bank lending is the most important. About 80% of the revenue of the commercial banks comes form interest and discount, that is to say, income derived from loans and advances including bills discount and bills purchase. Loans and advances comprises a large portion of bank’s total assets and form the backbone of the bank’s structure. The strength of a bank is thus primarily judged by the soundness of its loans and advances. A wise and prudent policy in regard to loans and advances is considered an important factor inspiring considered in the depositors and prospective customer of a bank.

Loan advances not only play an important part in gross earnings of banks, but also promote the economic development of the country.

OVERALL CREDIT POLICY OF DHAKA BANK LIMITED: Lending being the most important function of commercial bank, every bank should have own credit policy. Credit policy generally aims at (a) creating healthy loan assets to ensure goods interest earning for the bank

(b) ensuring ultimate safety through judicious selection of based on its salability.

The credit policy of Dhaka Bank Limited has been formulated of the plan of “ALL NEWS LOANS TO BE GOODS LOANS” The plan was formed on the basis of the following objectives: •

To maximize the profit of the bank by making sound lending;

•

To deliver credit to viable borrowing at a reasonable cost;

•

To provide satisfactory return on investment;

•

To assist the social and economic development of the country;

•

To deliver general banking services to the public and credit to viable borrowers at a reasonable cost.

PROCEDURES OF SANCTIONING CREDIT: Loan Application: Branch will obtain loan Application from the customer on bank’s prescribed form. The form must be signed by proprietor/partners/directors (as in the case may be) signature of the application to be verified in conformity with account opening form.

It is to be ensured that the columns of the application form are properly filled in, particulars and information furnished are completed and correct. All required documents /papers mentioned in the application form are submitted.

Branch will outright reject the proposals which are restricted by Bangladesh Bank and in conflict with Head Office guidelines. Branch in-charge /credit in-charge will have will have to visit the business site of the customer. Verify the particulars furnished in the application and ascertain customers honestly, integrity and business dealing, through other sources also. They will also see the turnover/transactions of the account.

Branch will obtain credit report of borrower and its sister concerns from the credit information Bureau of Bangladesh Bank. They may also obtain credit report from local banks and financial and credit institutions.

Branch will have to prepare appraisal report for all credit proposals. In appraising advance proposal, Branch Manager must follow the general principles of good lending i.e. a) Safety b) Liquidity c) Purpose d) Profitability

e) Security f) National Interest After obtaining clean credit report and satisfied regarding land, building, and other assets/properties to be mortgaged or hypothecated and prima-facie genuineness and correctness by scrutinizing the documents, title deeds and other relevant papers and if the sanctioning of loan is within the discretionary power of the branch, they will issue the sanction letter in duplicate incorporating all terms and conditions to the customer with an endorsement of a copy of letter to Head Office. If the limit is beyond the Manager’s power they will forward the proposal to Head Office giving specific comments and recommendation for approval.

Lending risk is to be analyzed as per prescribed format supplied by Bangladesh Bank. LRA is to be forwarded along with the proposal. On receipt of Head Office approval, Branch will issue sanction advice in duplicate to the customer and obtain one copy format eh customer duly accepted. This copy should be preserved with security documents.

If the customer accepted the terms and conditions, documentation formalities are to be completed before disbursement.

Findings: Retail Banking: Perspective of Dhaka Bank The Changing Face of Retail Banking Changing Consumers Demographics:  Increasingly affluent, with bulging middle class  The youngest population in the world  Increasing literacy levels  Higher adaptability to technology  Urbanization is a continuing trend  Increasing "consumption" mindset in Bangladesh

Retail credit growth driven by…

Changing demographic profile:  Upper income segments in top 7 cities grew at CAGR of over 25%  60% of the population estimated to be under 35 years Low penetration:  Retail credit at 7-8% of GDP  Rapid growth in target segments & under penetration of finance  35%y-o-y growth in home sales; penetration of finance at about 65% Increasing availability:  Entry of banks has led to increased competition and coverage  Increasing use of technology has further enhanced reach and accessibility Competitive differentiators  The potential is hue  But, they need to create a sustainable profitable core proposition

Competitive differentiators to create a sustainable and profitable core proposition:  Operating costs  Credit quality  Customer service Building the differentiators 1. Decentralization: • Sales • Service 2. Centralization: • Transaction Processing Reduction in operating costs, using o Economies of scale o Scalable technology •

Credit policy and monitoring Skill based competencies Centralized credit policies Separation of credit from sales Fraud, valuation of property, legal documentation etc separate

Best practices of benchmark industry – Retailers

 Managing footfalls to maximize returns per square foot  One-stop shopping zone to manage customer needs and effective cross sell  Shelf space and layout management  ‘Multi product packaging’- special offers to recognize customers who are giving more business

Best practices of benchmark industry – Food Retailing  Work practices transplanted throughout a huge network of global outlets and franchises  Each food item at each outlet tastes the same  Customer feels confident walking into any outlet - knows what to expect

Best practices of benchmark industry – Airlines and Hospitality ● Uniformly courteous and helpful response from the front line staff ● Ability to identify special customer segments and handle them separately ● Using regular customer feedback programs for identification of action areas

Loan Approved, Rejected and Declined Chart based on four years:

120 100 Car Loan Personal Others Rejected Decline

80 60 40 20 0

2008

2007

2006

2005

Problems of Retail Banking in Dhaka Bank •

Lack of employees: this is a major problem that is there is a big shortage of employee in retail banking division in Dhaka Bank Ltd. For this reason the total operation cannot be operated timely and frequently.

•

Proper training are not imported to the sales team elaborately.. For that employees do many mistakes when they submitted the proposals of Loan.

•

Network of corresponded bank’s are very poor. There have some limitations in the whole networking system of the retail Banking.

• • •

Shortage of skilled manpower in retail banking division. So during the working hour the employee cannot provide proper attention to the customer that enhances customer dissatisfaction.

It is a leading bank of Bangladesh but it has no attractive appearance in office environment.

Absence of attractive remuneration package and motivation for the employees.

Recommendations From the above discussions Consumers value the quality of the services of the banks to take up services. And the service businesses like these are very much sensitive that a single customer needs to know full and true information before taking the service facility. Like other products a single customer can not change his or her decision frequently. On the other hand if customers get better service form the particular service organization then they will use to it and will do word of mouth advertise on behalf of the organization. So, banks need to improve their performance, make the service easier for the customers, provide information of their own that separate them form others and make sure they are competitive enough with the other companies in the industry.

In order to get competitive advantage & to deliver quality service, top management should try to modify the services. For the improvement of the service the following measures should be taken: •

Customer’s Convenience: For customer’s convenience, DBL should provide more personnel to deliver faster services to their honorable customer.

•

Human Development: Development of human resources should be ensured to increase efficiency in work.

•

Communication System: Ensure proper communication system and maintenance of files & machineries should modernize.

•

Interest: More interest should be paid on deposit account so that customers are convinced to deposit their money in bank.

•

Strategy: Effective strategies must be undertaken against defaulter.

•

Managerial Functions: DBL must have to follow the management functions (from planning to control) strictly in all of their business activities and also operation the bank.

•

Financial Analysis: Branch should have a separate section to analyze the financial statement for fining its liquidity, profitability & ownership ratios.

•

Strict Rules for arrival and departure for the employee: Management should strict about the arrival and departure time for the employees.

•

Job Rotation: In DBL job rotation is fully absent job rotation is very important to make the entire employee efficient for all departments.

•

To attract more clients Dhaka bank ltd has to create a new marketing strategy which will increase the total export-import business

Some other important factor that should be focused on the development process: •

Time consumed at service level should be minimized at optimum level.

•

Evaluate customer’s needs from their perspective and explain logically the shortcomings.

•

Improve office atmosphere to give customers better feeling.

•

Use of effective MIS.

•

To deliver quality service top management should try to mitigate the gap between customer’s expectation & employee’s perception.

•

A dynamic debt recovery cell should be formed by the authority.

•

All the branches of the city should provided a particular target per month.

•

Sales officers should be provide well training about DBL Credit Marketing.

Sales team should have a specific target of per month.

Conclusion

In future, banks need to equip themselves with internal capabilities and build efficient and viable business models to create the advantage of new opportunities available into a long term sustainable competitive advantage. Banks today cannot restrict their learnings to the best practices followed in the industry but they need to look at other benchmark industries to derive learning on various important business parameters There is a quantity of nationalized banks operating their activities in Bangladesh. The DBL is the largest of them. For the future planning and the successful operation in achieving in its’ DBL goal in this current aggressive environment this report can be a guideline.

From the sensible point of view I can declare boldly that I really have enjoyed my internship at DBL from the first day. Moreover, this internship program which is mandatory for my MBA program, although short-time clearly has helped my further thinking about my career.

Bank always contribute towards the economic development of a country. DBL, compared with other banks are contributing more by investing most of their funds in successful projects leading to increase in production. It is clear that right thinking of this bank including establishing a successful network over the country and increasing resources will be able to play a considerable role in the portfolio of development financing in the developing country like ours.

DBL continues to participate its’ leading role in socio-economic development of the country as a companion of Independent Bangladesh. Besides its’ established function such as deposit mobilization, deployment of fund in trade, commerce, industry, agriculture, import & export business, outward and inward discharge as an agent of Bangladesh Bank of DBL has emerged as the establish of performance key role in the country.

Changing retail banking scenario: (1) Significant change in demographic profile, (2) Huge market potential, (3) Increasingly challenging business environment, (4) Competitive tools are different – need to redefine delivery models and business processes.

In future, banks need to equip themselves with internal capabilities and build efficient and viable business models to create the advantage of new opportunities available into a long term sustainable competitive advantage.

BIBLIOGRAPHY: Primary Data

I) Official records of Dhaka Bank Ltd. II) Face to face Conversation.

III) Data collection by own supervision Secondary Data i) Annual report of Dhaka Bank Ltd. ii) Working Papers. iii) Office Files. iv) Selected Books. v) Printed Forms. vi) Published & Unpublished Documents. vii) Website.