REMITTANCE OPERATIONS OF COMMERCIAL BANK OF CEYLON PLC by lawjuris

“REMITTANCE OPERATIONS OF COMMERCIAL BANK OF CEYLON PLC”.

FIRST PART The prologue Objectives of the study **General objective T gain practical job experience and view the application of theoretical knowledge in the real life. **Project objective • • • • • • •

The objectives of the study are highlighted as follows: This internship report intends to cover a comprehensive analysis of Commercial Bank of Ceylon Limited. The report is aimed at studying and understanding the various products offered by the Commercial Bank of Ceylon (CBC) to its clients as well as the several activities carried out to achieve the departmental objectives. To determine the factors that influences the choice of a bank by customers. To determine the level of satisfaction regarding various bank-services from the viewpoint of customers. Finding problems in the processes of the Customer Service Department and providing possible solutions is another objective of the report. To provide a brief introduction of Student Remittance.

Scope of the Report This internship report covers all the activities provided by the Commercial Bank of Ceylon Limited, Gulshan Booth such as Account opening, Payment procedure of TT, Procedure of outward remittance (incoming remittance, student service, corporate service etc) Cheque book issuing procedure, ATM service, Internet Banking etc. Besides this, finding problems in the total process and provide possible solutions for Commercial Bank of Ceylon Limited will be another scope of the report. The project limits itself to understanding and analyzing the whole activities of Commercial Bank of Ceylon (CBC), this report is limited because of feasibility and time considerations. Instead, a performance analysis of the activities of CBC was carried out to determine the progress made since Commercial Bank of Ceylon Limited’s inception and the potential it holds for the years to come. Methodology of the Report Methodology is very important to get the relevant data or information from any organization. Without proper methodology, no one can collect relevant information. And without correct and proper information, it is impossible to prepare an effective report. To collect the relevant information, I adopted the following methods: Primary source of data • • •

Web site browsing Face to face meeting with Commercial Bank of Ceylon Ltd. employees Face to face conversation to the customer on Random Basis.

Secondary Source of Data • • • •

Consult the book of Bangladesh Bank Guidelines. Commercial Bank of Ceylon Limited’s Financial Statement. Different product brochures of Commercial Bank of Ceylon Limited. Help from internees who have completed internship with Commercial Bank of Ceylon Ltd.

Limitations of the Report This report may have some incompleteness due to some of the limitations I encountered while completing it, they are mentioned below: • • • 2

One major limitation was the time constraint. Due to time restriction, the Project is concentrated on data collection as much as possible Some essential data could not be gathered because of confidentiality concerns.

• • • •

Another limitation was that the data gathered could not be verified for accuracy. Lack of adequate information of banking institution for preparing this report. So this report is based on only publicly available information Lack of experience has also acted as constrains for the exploration of the topic. Extensive analysis of all the finance and banking concept is not possible due to enlarge and diversification of the topic. As I was the only one person, this report seriously suffered manpower constrains for a vast research.

SECOND PART Breakdown of commercial bank of Ceylon limited Introduction Contemplated as the best bank in Sri Lanka by magazines like Global Finance, The Banker, Business Today, etc. for several consecutive years, Commercial Bank of Ceylon commenced its operation in Bangladesh in 2003 by acquiring the Bangladesh operations of Credit Agricole lndosuez (CAI). Thus, Commercial Bank of Ceylon Ltd. started with 2 branches in Dhaka and Chittagong and the 2 booths in Gulshan and Sonargaon. Commercial Bank of Ceylon Ltd.: An Overview Commercial Bank of Ceylon Limited is a Sri Lankan bank with its head office at "Commercial House"; 21 Bristol Street; P.O. Box 856; Colombo 1; Sri Lanka. It’s a public limited liability company incorporated in Sri Lanka on June 25, 1969, under the Companies Ordinance and quoted in the Colombo Stock Exchange in March 1970. It’s a licensed commercial bank under the Banking Act of Sri Lanka. Apart from Sri Lanka, it operates in Bangladesh and contemplating exploring into the Indian banking sector as well. In Bangladesh, it started its operation by taking over the Bangladesh operations of Credit Agricole lndosuez (CAI). The event marked the first ever acquisition of a multinational bank by a Sri Lankan bank. In Sri Lanka, Commercial Bank of Ceylon Ltd. is known as the largest and fully networked banking service provider. The bank enjoys the reputation of having an unrivalled employment of information technology and a very reliable ATM network around the country.

It has been adjudicated the best bank in Sri Lanka by magazines like Global Finance, The Banker, Business Today, etc. for several consecutive years at a row. Business today named Commercial Bank of Ceylon Ltd. as the No. 1 Company in Sri Lanka in 2001. It has also receives several awards for its annual reports and human resource management. Besides, Commercial Bank of Ceylon Ltd. was awarded the Corporate Social Responsibility Awards in 2003 and 2004. It has also received a rating of AA+ from Fitch Ratings Lanka Ltd. Several times.

A Brief History of Commercial Bank of Ceylon Ltd. The journey started in 1920 when The Eastern Bank Ltd. opened a branch office at Chatham Street, Colombo. In 1939, The Branch Office of the Eastern Bank, situated at Chatham Street, was shifted to the previous Commercial Bank, City Office premises, situated at 57, Sir Baron Jayathilake Mawatha. The Chartered Bank acquired the share capital of Eastern Bank Ltd. in 1957. Finally, in 1969, The Commercial Bank of Ceylon Limited was duly incorporated in Sri Lanka, then Ceylon, with Eastern Bank holding 40% of its equity. It was incorporated in Sri Lanka on June 25, 1969, under the Companies Ordinance and quoted in the Colombo Stock Exchange in March 1970. The following table summarizes Commercial Bank of Ceylon Ltd.â&#x20AC;&#x2122;s journey1920 : The Eastern Bank Ltd. opened a branch office at Chatham Street, Colombo 1939 : The Branch Office of the Eastern Bank, situated at Chatham Street, was shifted to the previous Commercial Bank, City Office premises, situated at 57, Sir Baron Jayathilake Mawatha. 1957 : The share capital of Eastern Bank Ltd. was acquired by the Chartered Bank. 1969 : The Commercial Bank of Ceylon Limited was duly incorporated in Sri Lanka (then Ceylon) with Eastern Bank holding 40% of its equity. The business of the Colombo branch of the Eastern Bank was acquired by the Commercial Bank of Ceylon Limited. 1971 : The Business of the Eastern Bank Ltd. was taken over by the Chartered Bank. 1972 : Two new Branches were opened at Galewela and Matale. 1973 : A new branch was opened at Matara. The Business of the Galle, Jaffna and Kandy branches of the Mercantile Bank Ltd. was acquired by the Bank. 4

1974 : Two new branches were opened at Wellawatte and Kollupitya. 1975 : The Chartered Bank transferred its business to Standard Chartered Bank. A new branch was opened at Kotahena 1980 : The Bank promoted a property development company, namely Commercial Development Company Ltd., to construct a Headquarters building for the Bank. The Bank enjoyed 40% equity participation in this company. 1984 : The Headquarters of the Bank was shifted to "Commercial House" , 21 Bristol Street, Colombo 1, bringing the operations of Head Office to a centralised location. The Bank embarked on a computerisation programme which would progressively cover the entire branch network. A new branch was opened at Hingurakgoda. 1985 : The Foreign Department of the Bank was elevated to the status of a fullyfledged branch. This move completed the reorganisation process whereby three independent offices representing City Office, Foreign Branch and Head Office were created, segregating the different operations. 1988 : A new branch was opened at Maharagama. An associate Leasing Company , Commercial Leasing Ltd., was formed 1990 : Three new branches were opened at Borella and Kegalle. Automated Teller Machines were installed at the Foreign, Borella, Nugegoda, Kotahena and Kollupitiya branches. 1992 : Seven new branches were opened at Pettah, Battaramulla, Mutwal, Wennappuwa, Koggala, Embilipitiya and Galle. The Bank sponsored Fund Management Company; Commercial Fund Management (Pvt.) Ltd. was formed for the purpose of operating unit trusts. The Bank enjoyed 50% equity participation in this company. 1993 : International Comprehensive Banking System (ICBS) was introduced linking nine metropolitan branches. Three new branches were opened at Kanadana, Maradana and Akuressa. An Automated Teller Machine was installed at Wellawatte Branch 1994 : Three new branches were opened at Minuwangoda, Keyzer Street, Panadura and they were linked to the International Comprehensive Banking System. ATMs were installed at City Office, Minuwangoda, Keyzer Street, Panadura, Maradana and Battaramulla Branches. Religious ceremonies were held and a special bonus of one month's salary was paid to mark the 25 th anniversary of the Bank 1995 : Two new branches linked to the ICBS were opened at Aluthgama and Kaduwela. The existing branches at Kurunegala, Mutwal and Pettah were linked to the ICBS.

ATMS' were installed at Aluthgama, Kaduwela, Kurunegala, Mutwal and Pettah branches. 1996 : Five new branches with ICBS linkage were opened at Old Moor Street, Katugastota, Nuwara-Eliya, Chilaw and Gampaha. The existing branches at Galle City, Matara, Negombo, Matale and Katunayake(FTZ) were also linked to the ICBS. ATMs were installed in these branches except in Katunayake (FTZ). The bank increased the Shareholding in Commercial Development Company Ltd., to 94.55% through a share swap 1997 : Eight new branches were opened at Ratmalana, Kirullapone, Union Place, Colombo 7, Ratnapura, Kuliyapitiya, Badulla and Anuradhapura. The existing branches at Kandy, Kandana, Maharagama, Hikkaduwa, Wennappuwa, and Kegalle were also linked to the ICBS. Automated Teller Machines were installed in these branches and in Katunayake (FTZ) branch 1998 : 365 day branch at Colombo 7 Branch was opened. Sophisticated Online Banking System which permits clients to conduct a variety of banking transactions through their personal telephone, personal computer or laptop was installed. All branches except Jaffna were linked to the ICBS. 1999 : Banking and supermarketing were combined by opening the first "MiniCom" at the Staple Street Cargills Food City outlet. Rated as the Best Bank in Sri Lanka by Global Finance. 2000 : Launched internet Banking. 5 new branches, 4 Customer Service Points and 2 MiniCom outlets were opened. Rated as the Best Bank for the second consecutive year. 2001 : Launched internet Banking. 5 new branches, 4 Customer Service Points and 2 MiniCom outlets were opened. Rated as the Best Bank for the second consecutive year. 2002 : Selected as the No.1 Corporate in Sri Lanka by "Business Today" Magazine. Rated as the Best Bank in Sri Lanka by "Global Finance" for the fourth consecutive year. Selected as the Bank of the Year by "The Banker" Magazine for the second consecutive year. Fitch Ratings Lanka Ltd. upholds the SL AA+ rating in their annual review. Winner of the overall National Award for HRM - 2002. South Asian Federation of Accountants (SAFA) ranks the Bank's Annual Report for 2001 to be the first in the Financial Sector. 2003 : Rated as the Best Bank in Sri Lanka by "Global Finance" for the fifth consecutive year. Selected as the Bank of the Year by "The Banker" Magazine for the third consecutive year. Fitch Ratings Lanka Ltd. upholds the SL AA+ rating in their annual review. SAFA rates Annual Report 2002 as the Best Presented Accounts of the Financial Sector. The Institute of Chartered Accountants of Sri Lanka (ICASL) ranks the Annual Report 2001 of the Bank as the Overall Winner, the Winner of 6

the Financial Sector and Winner of Corporate Governance Disclosure Award. The operations of Credit Agricole Indosuez in Bangladesh is taken over. The first service point at Arpico Super Centre was opened at Dehiwela. 2004 : Rated as the Best Bank in Sri Lanka by "Global Finance" for the sixth consecutive year. Selected as the Bank of the Year by "The Banker" Magazine for the fourth consecutive year. Fitch Ratings Lanka Ltd. upholds the AA+ (sri) rating in their annual review. SAFA rates Annual Reports 2002 and 2003 as the Best Presented Accounts of the Financial Sector. The ICASL ranks the Annual Reports 2002 and 2003 of the Bank as follows: Award Overall Banking Sector Corporate Governance Discloser Corporate Social Responsibility

2003 Winner Winner Joint 1st Runner Up Joint 1st Runner Up

2002 Winner Winner Winner Joint 1st Runner Up

Overall HRM winner in the Large Service Sector and winner - most innovative HR Practices. Commercial Bank Social Responsibility Trust was set up in September. An introduction to the private sector banking industry in Bangladesh Banks and financial institutions play an important part role in financial intermediation and thereby contribute to the overall growth in the economy. At present, the financial system in Bangladesh consists of the central bank, nationalized bank/specialized bank, foreign banks and other non-bank financial institutions. In this section, a review is presented in a general fashion on the gradual evolution of private sector banks in Bangladesh and an evaluation is done on their comparative position via other types of banks and their future roles in years to come. Name of the Selected Scheduled Banks of the Country Nationalized/ Government Controlled Banks: I.

National Commercial Banks (NCBs) 1. Sonali Bank 2. Janata Bank 3. Agrani Bank 4. Rupali Bank Limited*

II.

Specialized National Banks (5) 1. Bangladesh Krishi Bank 2. Bangladesh Shilpa Bank 3. Rajshahi Krishi Unnayan Bank 4. Bangladesh Shilpa Rin Sangstha 5. Bank of Small Industries and Commerce Bangladesh Limited

III.

Private Commercial Banks (PCBs) 1. Pubali Bank Limited 2. Uttara Bank Limited 3. Arab Bangladesh Bank Limited 4. International Finance Investment and Commerce Bank Limited 5. Islami Bank Bangladesh Limited 6. National Bank Limited 7. The City Bank Limited 8. United Commercial Bank Limited 9. Al-Baraka Bank Bangladesh Limited 10. Eastern Bank Limited 11. The oriental bank Limited 12. Al Arafa Islami Bank 13. Prime Bank Limited 14. Southeast Bank Limited 15. Dhaka Bank Limited 16. NCC Bank Limited 17. Social Investment Bank 18. Mutual trust Bank 19. Standard Bank Limited 20. One Bank Limited 21. Bank Asia Limited 22. Mercantile Bank 23. Export Import Bank 24. Bangladesh Commerce Bank Limited 25. BRAC Bank Limited

26. Faysal Islamic Bank 27. First Security Bank Limited 28. Jamuna Bank Limited 29. Premier Bank Limited 30. Shahjalal Bank Limited 31. The Trust Bank Limited Foreign Commercial Banks

IV.

1. American Express Bank Limited 2. Standard Chartered Bank Limited 3. Hong-Kong Shanghai Banking Corporation (HSBC) 4. Citi Corp Inc. 5. Commercial bank of Ceylon Ltd. 6. Bank Al-Falah V.

Joint-Venture Commercial Bank (S) 1. Dutch Bangla Bank Limited Others

VI.

1. Ansar VDP Unnayan Bank 2. Bangladesh Samabai Bank Ltd. (BSBL) 3. Grameen Bank 4. Karmasansthan Bank Bank Deposit Mobilization Since independence, deposit mobilization in Bangladesh has grown significantly thanks to the phenomenal growth of private banks and NGOs offering limited banking services in the rural areas. Figure: Deposit growth trends

Key Areas of Operations Some major areas where Commercial Bank of Ceylon Ltd. specializes as a bank are stated below: Corporate Banking This division, with its expertise in Trade Finance, Corporate Finance, Project Financing, Leasing, Factoring, Working Capital Financing and related services caters mainly to the banking needs of the multinational corporate clients and large to medium size domestic corporate customers. The division comprises of the Foreign Branch, the Off-shore Banking Center and the Bangladesh Operations. Loans and advances portfolio of the Corporate Banking Division and the Bangladesh Operations grew by 27.80% and 58.43% respectively. Commercial Bank of Ceylon Ltd. was also able to get back most of the business lost during the early days of acquisition in Bangladesh. Its growth, in Bangladesh, is expected to improve further with the proposed opening of new branches and introduction of innovative products. The portfolio of the Maldivian corporate grew by 73.59% even though the bank doesnâ&#x20AC;&#x2122;t have a presence there. The bankâ&#x20AC;&#x2122;s leasing operations registered a staggering growth of 54.02%. On the other hand, the non-performing loans ratio was brought down to 5.34% as at 31 st December 2004 from 7.63% a year earlier.

Personal Banking The Personal Banking Division is responsible for the operation of the network of delivery channels that caters mainly to the banking needs of personal customers and small and medium enterprises. The total network of delivery channels of Commercial Bank of Ceylon Ltd. in Sri Lanka comprised of 107 branches, 6 customer service points, 9 Mini Comes, 3 service points and 187 ATMs by the end of 2004. Up until now, it has 3 branches and 2 booths in Bangladesh. Regional Offices, Priority Banking Center and the issuance of credit cards under franchise from Master Card International- all played pivotal roles in aiding this division to perform smoothly. The division channeled funds mobilized in excess of its lending requirements to the Corporate Banking division and the Treasury. Thus, it made low cost funds available to those two divisions. Treasury The responsibilities of the Treasury included management of liquidity and exposure to market risk, mobilization of resources from domestic as well as international institutions and banks. In 2004, the focus of trading operations was active, broad-based market-making in key markets including government securities and foreign exchange markets. Commercial Bank of Ceylon Ltd. also concentrated on the delivery of market solutions to corporate clients in various areas such as foreign exchange and fixed income securities. CBC Achievements Commercial Bank of Ceylon Ltd. has won several awards in both Sri Lanka and Bangladesh. In Sri Lanka Best Bank In 2004, The Global Finance Magazine adjudged Commercial Bank of Ceylon Limited as The Best Bank in Sri Lanka for the 7th Consecutive Year. The bank was first adjudicated the best in 1999. Thereafter, it has won the award for seven years at a row. The criteria for choosing Commercial Bank of Ceylon Ltd. as the best bank included growth in assets,

profitability, capital strengths, strategic relationships, customer service, competitive pricing and innovative products. Bank of the Year From 2001 to 2004, in every successive year, Commercial Bank of Ceylon Limited won the ‘Bank of the Year’ award from ‘The Banker’ Magazine. It was adjudged "The Bank of the year" for the Year 2004 for the fourth successive time by "The Banker" Magazine. No. 1 Company Business today magazine ranked Commercial Bank the No. 1 performer among Sri Lanka’s corporate sector for the year 2001. the bank was at the 4 th place in last year’s ranking. According to Business Today "What a year was for Commercial Bank the number 1 in the Business today Top 10 list it strengthen its position as Sri Lanka's best managed bank. So far Commercial Bank has been quicker to master the technology and deliver services in the most consumer friendly way. Commercial Bank last year was ranked number 4 and therefore its movement to the top of the list is a credit to its unassuming management team. Commercial Bank unlike any other bank in the top 10 has a well-balanced loan portfolio and a client base and that has contributed to the banks strong financial performance. Commercial Bank enjoys an unrivalled reputation among banks for its IT powers and ever reliable ATM network around the Country." AA+ from Fitch Ratings Lanka Limited Commercial Bank of Ceylon Limited received a rating of AA+ from Fitch Ratings Lanka Ltd. for its Implied Long Term Unsecured Senior Debt in March 2005. FRL also affirmed the AA(sri) rating assigned to Commercial bank of Ceylon Ltd.'s subordinated debentures and the AA-(sri) rating assigned to Commercial bank of Ceylon Ltd.'s redeemable preference shares. AA + (sri) rating denotes a very low expectation of credit risk. It indicates very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. Award for Annual Report Commercial bank of Ceylon Ltd. received several awards starting from 2000 to 2003 from several organizations for its annual reports. The awards include Edmond J Cooray 12

Trophy for the Best Banking Sector Annual Report, Cyril Gardiner Memorial Trophy for the Best Overall Report, Good Corporate Governance Disclosures Award, and Award for the best presented accounts in the Financial Sector, Corporate Social Responsibility award, etc. Awards for Human Resource Management The bank received the Overall National HRM Award in 2003 and 2002. It also received the National HRM Award for Most Innovative HR Practice in 2003. These awards prove the high degree of professionalism maintained by the Bank, in the management and development of its people, as well as the level of excellence of its human resource systems and procedures. These are recognition of its proactive, employee friendly policies as well. Commercial Bank of Ceylon Ltd. has made significant investments to provide its people with a conducive & motivating work environment, with accent on continuous learning and improvement. Corporate Social Responsibility Award In 2004, Commercial Bank of Ceylon Limited was the joint first runner up in the Corporate Social Responsibility award organised by the Institute of Chartered Accountants of Sri Lanka. It was the second runner up in the Inaugural Corporate Social Responsibility award organised by the Institute of Chartered Accountants of Sri Lanka, in 2003. In Bangladesh AA from CRISL Commercial bank of Ceylon Ltd. received a rating of â&#x20AC;&#x2DC;AAâ&#x20AC;&#x2122; from Credit Rating Information Services Ltd. (CRISL). It was the highest ever rating for any financial institution in Bangladesh.

Best Foreign Bank rated by Industry Magazine Commercial bank of Ceylon Ltd. commenced its operation only in late 2003. But, it seemed, its comparatively short presence here was no bar for it for outperforming its peer

group. In 2004, it was adjudged the Best Foreign Bank operating in Bangladesh by Industry magazine. Arthakantha Business Award 2004 In 2004, Commercial bank of Ceylon Ltd. also received the Arthakantha Business Award. Commercial Bank of Ceylon Ltd. in Bangladesh Commercial Bank of Ceylon Ltd. took over the Bangladeshi operation of Credit Asgricole Indosuez, consisting of two branches in Dhaka and Chittagong and two booths in Gulshan and Sonargaon, on 6 November 2003. That marked the first acquisition of a foreign bank by a Sri Lankan bank. The bank was officially inaugurated on 10th December 2003. CAI Bangladesh commenced operations in Bangladesh in 1981 as Banque lndosuez. Thereafter, it merged with Credit Agricole, another leading French Bank to become Credit Agricole lndosuez Bangladesh and was the second largest foreign bank here. CAI's disposal of Bangladeshi operations was a part of the Bank's global repositioning strategy. Commercial Bank of Ceylon Ltd. is a rather new bank in the banking scenario of Bangladesh. Its operation is also limited in terms of its number of branches here. Apart from these two branches and two booths acquired from CAI, Commercial Bank of Ceylon Ltd. has another branch at Dhanmondi that had been opened recently. However, Commercial Bank of Ceylon Ltd. has a very aggressive expansion plan for the near future. Itâ&#x20AC;&#x2122;s under consideration that the booth at Gulshan be made a branch. On the other hand, the booth in Sonargaon is already under an expansion program. A branch might be opened in Sylhet soon. Another new branch at Uttara is in the pipeline. Its ATM network will be expanded, too. Commercial Bank of Ceylon, while continuing CAI's strategy wishes to further extend the reach and range of services in Bangladesh. Over a period, it would strengthen the retail banking side as well, for which Commercial Bank of Ceylon Ltd. has made its name in Sri Lanka. Back in Sri Lanka, Commercial Bank of Ceylon Ltd. is known as the largest and fully networked banking service provider. The bank enjoys the reputation of having an unrivalled employment of information technology and a very reliable ATM network around the country. Itâ&#x20AC;&#x2122;s worth mentioning here that Commercial Bank of Ceylon Ltd. won several

international awards as the best bank in Sri Lanka. Only time will tell if it can continue with its legacy in Bangladesh, too. Commercial Bank of Ceylon Ltd. Bangladesh under probe Mission “To deliver optimum value to our customers, employees, shareholders and the nation” is the mission statement of Commercial Bank of Ceylon Ltd... Thus, it’s concerned with the nation, too, along with its stakeholders. Besides, its concern for value creation is also praiseworthy from the perspective of even an onlooker. Its vision also proclaims its dedication for its level best performance. Its vision is “To be THE LEADER in the financial industry in Sri Lanka, having a visible presence in the region by the year 2010.” One of its prime future targets is consolidation and growth in the corporate banking sector. At the same time, it also wants to diversify into personal banking as well. Commercial Bank of Ceylon Ltd. wants to focus on contributing to the Bangladesh economy at corporate as well as personal banking level which is totally in line with its mission. And while doing so it intends to differentiate itself from its competitors by its superior service. Commercial Bank of Ceylon Ltd. wants to see it as a growth oriented regional bank with a vision to be a strong south Asian regional player. It emphasizes its responsibilities as a corporate citizen and ensures high ethical standards in overall conducts. Moreover, it wants to be the market leader in introduction of products and services. And in achieving its goals, it relies on its well-trained and knowledgeable work force. In Sri Lanka, Commercial Bank of Ceylon became the Overall Winner of the ‘National HRM Award-2002’, at the first ever National HRM Awards Convention. The bank not only concentrates on upgrading the knowledge of its workforce but also developing loyalty, among its employees, to the organization. Capital & Reserve The reserve ratio constitutes of two parts- the cash reserve ratio and the statutory liquidity ratio. The cash reserve has to be maintained in cash. And the CRR is 4% at present. On the other hand, the statutory liquidity reserve can be maintained by securities, such as the Treasury bill, along with cash. At present, the SLR is 12%.

Commercial Bank of Ceylon Led’s paid-up capital is BDT 1,000,000,000. As of 31 December 2005, its cash in hand (including foreign currencies) was BDT 34,233,366. Capital Base Paid up Capital:

BDT 1,000,000,000

Mission Statement To deliver optimum value to •

Customers

•

Employees

•

Shareholders and

•

The nation

Vision “To be THE LEADER in the financial industry in Sri Lanka, having a visible presence in the region by the year 2010.” Slogan Our Interest is in You! Future Targets Consolidation and growth in corporate banking Diversification into personal banking, targeting ambitious growth in this sector with the help of new products. Focus on contributing to the Bangladesh economy at corporate as well as personal banking level. Differentiating itself in the market by its superior service. Values A growth oriented regional bank with a vision to be a strong south Asian regional player. 16

As a responsible corporate citizen, emphasis given on high ethical standards in overall conducts. The bank has a clean loan book and high profitability ratios. A well-trained knowledgeable workforce Being the market leader in introduction of product and service. Developing loyalty to the organization. Workforce The total number of employees of Commercial Bank of Ceylon in Bangladesh is around 128 at present. Branches Commercial Bank of Ceylon started its operation only in 2003 after acquiring Credit Agricole Indosuez. Consequently, Commercial Bank of Ceylon Ltd. began its operation with the branches and booths owned by CAI, which included 2 branches in Dhaka and Chittagong and 2 booths in Gulshan and Sonargaon. Thereafter, Commercial Bank of Ceylon Ltd. has opened up another branch in Dhanmondi recently. Its network is still very limited in terms of its number of branches here and this inadequate presence continues to be a drawback for the bank. However, the bank looks forward to setting up more branches, in the near future, to ensure a strong presence in Bangladesh.

CBC Bangladesh Operations Dhaka Operations

Chittagong Operations

Motijheel Branch Mirpur Branch Uttara Branch

Dhanmondi Branch Sonargaon Branch

Chittagong Branch

Sylhet Operaitons Sylhet Branch

Management Information System From the beginning of its journey in 2003 Commercial Bank of Ceylon has been laying great emphasis on the use of improved technology. It has started its banking in Bangladesh with online operation system... Commercial Bank of Ceylon Ltd. operates through a very sophisticated and in-depth computer system called ICBS. All data regarding all departments are integrated client wise. Different sub-menu and software Make friendly and optimum use by its employees and on-line user. As a result the bank is able to give the services of international standards. Commercial Bank of Ceylon Ltd. Bangladesh is connected through VSAT with Colombo, Head Office. In Bangladesh it operates through VSAT, DDN and Lease line. The chart below is showing their connectivity.

Commercial Bank of Ceylon Uttara Branch

Commercial Bank of Ceylon Limited Gulshan Booth

Commercial Bank of Ceylon Limited Head Office, Colombo

Commercial Bank of Ceylon Limited Motijheel, Head Office Dhaka

Commercial Bank of Ceylon Limited Chittagong Office Commercial Bank of Ceylon Limited Sonargaon Booth

Commercial Bank of Ceylon Sylhet Branch

Commercial Bank of Ceylon Limited Gulshan Booth

Commercial Bank of Ceylon Limited Dhanmondi Branch Office

Lease Line DDN Link Connectivity V Sat Link Connectivity Corporate Information: BANGLADESH OPERATIONS Corporate Branch and Head Office: Commercial Bank of Ceylon PLC, Hadi Mansion, 2 Dilkusha C/A, Dhaka- 1000. Telephone : +8802-7114125 Fax

: 9565707, 9566574

Swift code, Bangladesh: CCEYBDDH E-mail: email@combankbd.com The softwareâ&#x20AC;&#x2122;s used by Commercial Bank of Ceylon Ltd. are: ICBS (International Comprehensive Banking System) This is the core software of the bank. All the banking transactions can be done through it. It enables new models to add in the system. AS 400 Based on Colombo, the software is the database of ICBS. It is used for opening accounts and any account related information can be obtained through it. Lotus Notes IBM developed this software and Commercial Bank of Ceylon Ltd. is licensed user of it. It is basically a e-mail software with a maximum limit of 25 mb. If the limit is exceeded then mails are transferred to local mail software. Outsider mail is scanned through virus scanner before enable the employees to open it. SWIFT (Society for Worldwide Interbank Financial Telecommunication)

It is universally accepted banking software used by many banks all over the world. Unlike Telex and Fax, it is a better and authenticated media. Here for every transaction message format is different. ABT (Alliant Branch Network) It is a teller based network. This is interfaced with AS400.It has online mode and offline mode. All the transactions are done through it. Eximbills This module is dedicated for Trade finance activities. At the end of the day IT department uploads data into AS400. SRP (Salary Remittance Package) By using this software commercial bank enables its corporate customers to make online payments such as salaries, overtime, commission etc. Through it client can make the payment to staff by forwarding a data diskette to the bank. As this is totally online process staffs can withdraw money from the nearest ATM. Correspondent Relationship The Bank established correspondent relationships with a number of foreign banks. The bank has set up letter of credit on behalf of its valued customers using its correspondents as advising and reimbursing Banks. The Bank maintains a need based correspondent relationship policy, which is gradually expanding. The number of Foreign Correspondents is 23. Their names are as follows:

1 2 3 4 5 6 20

Country Toronto, Canada Zurich, Switzerland Germany France Paris, France London, Great Britain

Name of the Bank Canadian Imperial Bank of Commerce Union Bank of Switzerland AG AMEX Frankfurt Am Main De Credit Commercial De France Credit Lyonnais HSBC Bank PLC

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Hong Kong 2Japan Sweden Singapore Mumbai, India New York, USA Mumbai, India New York, USA Sydney, Australia Colombo, Srilanka Karachi, Pakistan Denmark Wellington, New Zealand Seoul, Korea New York, USA Germany New York, USA

Standard Chartered Bank Bank of Tokyo Mitsubishi Ltd. Svenska Handelbanken Stockholm United Overseas Bank Limited Credit Agricole Indosuez Standard Chartered Bank ICICI Bank Limited Citibank N.A. Citibank Limited Commercial Bank of Ceylon Limited Standard Chartered Bank Nordea Bank Denmark A/S Bank of New Zealand Kookmin Bank Wachovia Bank N.A. Commerzbank AG. Frankfurt Am Main Citibank N.A. (Offshore Banking)

Map: Presence of Commercial Bank of Ceylonâ&#x20AC;&#x2122;s Correspondent Banks

Departments of Commercial Bank of Ceylon Ltd. Departmentation helps to ensure efficiency and specialization in an organization. Itâ&#x20AC;&#x2122;s, especially, pivotal when it comes to large organizations. If it were not for departmentation, the limitation on the number of subordinates that can be directly managed would have

restricted the size of the organizations. Grouping activities and people into departments makes it feasible to expand organizations. The following departments help Commercial Bank of Ceylon Ltd. run efficientlyCustomer Service This department deals with the regular transactions. The cash section accepts deposits, receives/pays cash and deals with the clearinghouse. The remittance section deals with fixed deposit, draft, pay order, telegrafic transfer, account opening, retail foreign currency trade, etc. Trade Finance This department deals with letter of credits for both import & export purposes. Its responsibilities also include bank guarantees. Corporate Banking This department, with its expertise in Trade Finance, Corporate Finance, Project Financing, Leasing, Factoring, Working Capital Financing and related services caters mainly to the banking needs of the multinational corporate clients and large to medium size domestic corporate customers. ForEx and Treasury The responsibilities of the department include management of liquidity and exposure to market risk, mobilization of resources from domestic as well as international institutions and banks. Human Resources Department The HRD is responsible for recruiting, training and retaining the workforce of Commercial Bank of Ceylon Ltd. It also deals with their compensation package. The department keeps track of the employees in order to evaluate their performance. Administration

This department manages all the administrative chores related to the regular upkeep of Commercial Bank of Ceylon Ltd.. Moreover, its responsibilities include taking care of all the rental agreements, insurance, advertisement, notice publishing, etc. Credit Department The credit department looks after all the risk related issues of the bank and measures credit risk. This department provides the customers with the loan and keeps track of it to make sure the loan would be repaid. Accounts Department This department is liable for preparing the financial statements and report Commercial Bank of Ceylon Ltd.â&#x20AC;&#x2122;s financial performance during a period. It also prepares and manages the budget.

Information System Department Commercial Bank of Ceylon Ltd.â&#x20AC;&#x2122;s Bangladesh operation is linked via satellite to Colombo. This department looks after that. It also handles the bankâ&#x20AC;&#x2122;s IT based functions. Audit and Compliance Internal auditing is the prime activity of this department. Periodically, this department audits the financial statements and makes sure that the Bangladesh Bank guidelines are properly followed. This department also assists the external auditors. Personal Banking Division The Personal Banking Division is responsible for the operation of the network of delivery channels which caters mainly to the banking needs of personal customers and small and medium enterprises. Risk

This department deals with measurement of risk of different organizations, projects and individuals and determining if a loan facility can be extended and if the return is fair enough for assuming the risk. Human Resources Management of Commercial Bank of Ceylon Ltd. Commercial Bank of Ceylon Limited became the Overall Winner of the â&#x20AC;&#x2DC;National HRM Award-2002â&#x20AC;&#x2122;, at the first ever National HRM Awards Convention held in Sri Lanka. The competition was jointly, organized by the Institute of Personnel Management Sri Lanka, Post Graduate Institute of Management and Association of Human Resource Management Professionals. About 47 companies including several blue chips, multinationals took part in the second and final round of that competition. This award signifies the high degree of professionalism maintained by the Bank, in the management and development of its people, as well as the level of excellence of its HRM /HRD systems and procedures. Further, this National HRM Award is recognition of its proactive, employee friendly policies as well. In Sri Lanka, the Bank has a well-equipped Staff Development Center which caters not only to the internal staff, but also to several other banking and mercantile institutions as well. In November 2002, the Bank signed a Memorandum of Understanding with Asian Institute of Technology (AIT) Bangkok to bring high quality programs within easy reach. It initiated a new partnership with the National University of Singapore. It has also just signed a deal with the Indian Institute of Banking and Finance. Commercial Bank, has consistently maintained that people factor has always been one of its most critical contributory factors which paved the way to reach great heights. In this context, it has made significant investments to provide its people with a conducive & motivating work environment, with accent on continuous learning and improvement. It concentrates on continuously improving its human resources by benchmarking against international standards, in order to become a world-class organization. Product and Services of Commercial Bank of Ceylon: Commercial Bank of Ceylon has very wide range of products and services. They are operating both Srilanka and Bangladesh in some time but some of their products are not 24

some or differ in Srilanka and Bangladesh. The product and services that are currently available are given below: PRODUCTS 1. Generic Products Regular Savings Account With the regular savings account, one has the option of savings through a monthly interest paying account or a half yearly interest paying account at attractive interest rate and interest is calculated on daily balance basis. The documents needed to open a savings account are• Specimen Signature Card duly completed. • Two photographs of the account holder(s) / authorized signatory(ies) to be attested by the introducer • Copy of valid passport of account holder(s) and authorized signatory (ies) or identification letter / card from employer or Certificate from Ward Commissioner / citizen identification from Chairman, duly attested. • Letter from Organization, where applicable • Nominee form duly completed. Here the customer can have a cheque book, monthly statements and CAT card which enable him/her to carryout variety of ATM transactions such as cash withdrawals, cash deposits(in selected branches), balance enquiry, mini statements etc. 24 hours of the day. Current Account

•

A Commercial Bank’s Current account gives you the convenience of managing your day-to-day transactions

•

It is an essential tool for the efficient operation of your business.

•

Issue cheques to effect the day-to-day payments and to collect proceeds of cheque and cash received by you.

•

Ability to operate it through Internet.

•

Handling your payments, remittances, funds transfer, standing orders, settlement of utility bills etc.

•

Ability to obtain Overdraft facilities

Opening a Current Account • Specimen Signature Card duly completed.

2 Photographs of the Account holder(s) / Authorized Signatory(ies) to be attested by the introducer • Copy of valid passport of Account holder(s) and Authorized Signatory (ies) or identification letter / card from employee or Certificate from Ward Commissioner / citizen identification from Chairman, duly attested. • Letter from Organization where applicable. • Nominee form duly completed Unique features of Current Account • Ability to operate your Commercial Bank Current Account from any of our Branches in the country. • Ability to access and operate your account from any of our ATMs in Bangladesh as well as the ATMs of Standard Chartered Bank (SCB) and Dutch Bangla Bank Limited (DBBL) and also from anywhere in the world through internet banking facility.] • Accountholders receive the full face value of all local cheques they deposit in their accounts, regardless of the issuing bank. • Speedy realization of all cheques collected and issued. Proceeds of the Commercial Bank cheques drawn on any branch deposited will be available the same day. •

Short Term Deposit Account (STD) It is a penalty free, instant access account, which gives competitive rate of interest. Special features offer in this account are • Sweep facility available • Interest on daily balance • Special rate offered over 100 million • Interest paid yearly The documents needed to open a STD account are\ • Specimen signature card duly completed. • 2 photographs of the account holder(s) / authorised signatory(ies) to be attested by the introducer • Copy of valid passport of account holder(s) and authorised signatory (ies) or identification letter card from Employer or Certificate from Ward Commissioner / citizen identification from Chairman, duly attested. • Letter from Organization, where applicable • Nominee form duly completed. Dollarsmart Non Resident Bangladeshis or foreigners in Bangladesh can avail this foreign currency term deposit in US dollars. Dollarsmart is a high interest paying foreign currency (USD) account that pays interest in US dollars for a period of 3, 6 or 12 months. The interest can also be converted to BDT if required. Time (Fixed) Deposit

Fixed Deposit is a time deposit, which offers attractive rates of interest. Interest can be credited automatically to an account of the customer’s choice. The fixed deposit has terms ranging: • 3 months, • 6 months, • 1 year ( Monthly / Annual interest ), • 2 years ( Monthly / Annual interest ), • 3 years ( Monthly / Annual interest ) and • 5 years (High5FD) The documents needed to open fixed deposit account are• Duly filled up application form (available at our website) • Photograph of the account holder • Copy of valid passport of Account holder(s) and Authorized Signatory (ies) or identification letter / card from employee or Certificate from Ward Commissioner / citizen identification from Chairman, duly attested. • Nominee form duly filled up Money market Account Do you wonder what to do with short term funds in your hands, which you may require at any moment..? Do you long for an opportunity to earn high interest from your funds while enjoying the flexibility to withdraw whenever you want and deposit whenever you have, part or full..?? Individuals, Proprietorship and Partnership firms, Limited liability Companies, Associations, Clubs, NGO’s etc. can open MMA. It gives you high return on short-term investment and chance to earn maximum on your deposit with us. Features: • Earn High returns from your idle funds • Interest is computed on daily balances and credited monthly • The interest rate applicable for each month is fixed on the first working day of the month. • The guaranteed minimum interest rate applicable is equivalent to 1 year STD rate, in case the inter Bank Call Money market rate falls below STD rates • A real time online Internet Banking facility • Monthly Bank statements dispatched to designated address without any charges. • Minimum balance to be maintained is BDT 100,000.

Dream Planner’s Savings Account (DPS) DPS is a Deposit Pension Savings Account, which guarantees attractive return on your hard earned monthly deposits at the end of a guaranteed period. Relax and watch your monthly deposit grow. Features:

• • •

Deposit amounts: You can choose an affordable monthly deposit amount from BDT 1000, 2000, 3000, 5000 or 7000. Period Options: 3, 5 or 7 years. What you will get (Excluding any Govt. Taxes): Monthly Deposit BDT 1000 BDT 2000 BDT 3000 BDT 5000 BDT 7000

• • •

In 3 Years 39,662 79,325 118,988 198,314 277,639

In 5 Years 70,065 140,131 210,197 350,328 490,459

In 7 Years 103,624 207,250 310,875 518,125 725,375

Flexibility: deposit any day of the month at any of our Branch or simply give a standing instruction from your other accounts. Emergency: you may encash prematurely any time. If deposit is withdrawn 6 months after opening, interest will be paid at normal savings rate. Loan: You may avail loan up to 80% of principal amount of the deposit after 2 years of opening your account.

Shamriddhi Shamriddhi is an innovative Tiered Savings Account specially formulated to offer higher returns for higher balances. A deposit of Tk. 100,000 is all you need to give your savings a boost with Shamriddhi. Interests grow in tandem with the balance. Combine all your scattered savings into Shamriddhi and reap elevated returns. Features: • Interests grows up to 2% above savings rate • Interest is calculated on daily balance and credited every 6 months. • Withdraw money at your convenience • Avail free internet banking facilities • Obtain Credit facilities against the balance Balance Range

Rate of Interest

100,001 - 500,000

0.5% above normal savings (5%)

500,001 - 1,000,000

1% above normal savings (

1,000,000 - 2,000,000

1.5% above normal savings

Above 2,000,000

2% above normal savings

Minimum Deposit TK. 50,000 Bonus Savings Account (BSA) Bonus Savings Account is a unique combination of the best of Fixed and Savings schemes, specially designed to give our customers the advantages present in both schemes and disadvantages of none. 28

Features: • Flexibility of a savings account- A BSA can be operated like a normal savings account. • High returns of a fixed deposit- With BSA you can earn an additional 50% bonus on the interest if your number of withdrawals do not exceed two in every six months. • Interest is calculated on daily balance and credited every six months. • Even if more than two withdrawals are made interest will be given at a rate applicable to a standard savings account. • Avail one of the best Internet Banking facilities from the comfort of your home or office. High5FD High5FD is a unique High return Five year Fixed Deposit Account. This account provides a stable and high return of 12% on your investment even during volatile market conditions. Features: • High5FD provides pre mature withdrawal options to meet your unforeseen cash flow requirements. • High5FD provides convenient pre mature withdrawal options with interest benefits on the following basis up to the date of withdrawal:

•

Tenure

Interest Rate

Up to First 10 months

'Monthly Interest Savings' rate

Second 10 months

8.00%

Third 10 months

9.00%

Fourth 10 months

10.00%

Fifth 10 months

11.00%

Sixth 10 months

12.00%

You can also avail Loan/OD facilities up to 85 % of the High5FD at very competitive interest rate. • High5FD is the ideal investment for depositors who target a stable return from their deposits without getting affected by the short term interest volatility in the market. • This deposit is well suited for a fund manager to secure a stable, high income in the medium term, by hedging against market fluctuations. DotCom, Teen Saver’s Account DotCom is a unique savings account introduced by Commercial Bank for children of 12 – 18 years of age. DotCom helps teenagers to save, get more from their savings, have their own Bank account and introduces them to basic banking knowledge from early age. With Commercial Bank’s DotCom Account the teenagers of today feel more Features: DotCom Account holders will get • A Fancy ATM Card (with withdrawal limits) for Free!! • 2% higher Interest than others on Savings • Exciting DotCom Gifts

2. SME loan Probriddhi Probriddhi is a medium term loan facility for small and medium enterprise borrowers or self employed professionals to meet their capital requirements. Features: • For small and medium enterprises (SME) and self-employed professionals • A term loan with a period up to 60 months • Up to 200% of the fixed deposit held with the Commercial Bank of Ceylon PLC. Subject to a minimum of BDT 2 lacs and maximum of BDT 2 crore. • Interest rates guaranteed to interest you • Easy to avail • Quick disbursement • The entire probriddhi loan is to be repaid in equal monthly installments • Available in all our Branches in Bangladesh. TradeCom Provide assistance to SME customers for meeting their trade finance requirements at the most convenient way. Features: • Eligibility Criteria - Age should be within 21 to 55 years. In case of limited liability company or partnership concern, the key person should be within the above age range and successfully engaged in the import / export business during the last two years. • Products to be imported / exported - All goods and merchandise acceptable to the Bank. • L/C limit up to BDT 20 million. • Same day delivery of L/C is ensured. • LTR / STL facility for a maximum period of 3 months up to 100% of L/C amount, if required. • STL up to 10% of L/C for duty payment, if required. • Most competitive and attractive rates for opening L/C. • No amendment charges for L/C (except for change in amount & foreign bank charges). • No confirmation charges for L/C for import from Hong Kong and China. • Most competitive and attractive interest rates for Short Term Loan and LTR facilities. • Security - A minimum of 25% of L/C limit to be held in a Deposit account with the bank, hypothecation of stocks with due insurance coverage, personal Guarantee (s), monthly deposits build up and any other securities as may be decided by the bank. • Availability - All Branches & Booths of the Bank. Auto Loan Auto Loan of CBC paves the way to acquire your dream car in the easiest way. 30

Features: • You should be within 21 to 55 years of age. • You should be a confirmed service holder or self employed professional or businessman having minimum two years of service length or business experience. • Your minimum monthly income should be BDT 40,000 in case of service holder and BDT 30,000 in case of self employed professional or businessman with sufficient proof of income. • Loan amount up to 80% of car value subject to a maximum of BDT 2,000,000 • Loan period-Not exceeding 60 months, to be repaid in equal monthly installments • Most competitive and attractive interest rate • Available at All Branches of CBC in Bangladesh. SERVICES ATM/CBC Visa Debit Card Be a proud owner of CBC Visa Debit Card. View the screen in Bangla, enjoy 24 hours banking and many more benefits from our ATM machines. Now you have the added convenience of using our card in any of the Dutch Bangla Bank’s ATM machines at totally free of CHARGE as well as for SHOPPING OR DINNING wherever Visa cards are accepted. Features: • 24 hours banking • Operate in Bangla or English • Balance inquiry • Print mini statement • Transfer funds (Your accounts have to be linked through ATM) • Draw as low as BDT 100. Internet Banking (Commercial Bank Online) With Commercial Bank of Ceylon’s Internet banking, your bank is as far as your PC. Attend to all your personal Banking needs from the comfort of your home or office through our Internet Banking Services 24 hours a day, 365 days a year! State of the art Internet security controls are employed to give you maximum protection, safeguard the confidentiality of customer information. Features: • Balance Inquiry • Account History for 5 years • Request for cheque book • Setting up of Standing orders • Print your own bank statement • Status of deposited cheques • Option to download account historical data

• •

Payment of Grameen Phone bills Opening of L/Cs

Holiday Banking Open to all customers of our Bank on all holidays (excluding government holidays) from 9.30 a.m to 12.30 p.m. at the Dhanmondi branch BEPZA Complex, 19/D, Road No. 6, Dhanmondi. SERVICES AVAILABLE AT THE HOLIDAY BANKING CENTRE, DHANMONDI BRANCH • Withdrawals from your Bank Account and Encashment of Personal Cheques • Deposits to your Current, Savings, NFCD and RFCD Bank Accounts • Opening of Current, Savings, Fixed, Money Market, NFCD and RFCD Accounts Student Remittance Service (Relies Your Dreams) Experience the ease and convenience of Transferring money for your child's educational expenses abroad. Our Student Remittance Services go a long way in assisting Bangladeshi students pursuing Undergraduate, Graduate and Postgraduate courses abroad. We personally care that money is transferred in time and in a safe manner. Features: • Easy & Simple procedures • Fast Money Transfers - Wire transfer of payment through SWIFT in 13 different currencies - Quick and Safe • Expert advice in filing of documents • CBC maintains a specialized and exclusive department equipped by experienced officers of the Bank • Application processing fee of CBC is the lowest amongst the multinational Banks in Bangladesh • No Hidden Charges TradeFinance (The professional service in International Trade & Guarantee) Commercial Bank of Ceylon brings to you the assurance of gaining maximum benefits in the best interests of your business through a team of experienced and seasoned professionals in Trade Finance Services. CBC trade finance services are specially designed to help develop, expand and diversify your business in the following ways: For the IMPORT TRADE • Establishment of Letter of Credit expeditiously. • Issue/Advise of Letter of Credit on the same day by SWIFT • Accessibility of our bank through COMBANK ONLINE (Internet Banking) to open your L/C from your home/office. • Speedy information on the status report of beneficiaries / suppliers etc. For the EXPORT TRADE • Payment / Negotiation of bills drawn under L/C. • Purchase/ Discount / Collection of Export Bills, status report of buyers. 32

•

Prompt advice of L/C, amendments and transfer of L/C received from an array of well spread correspondents • Purchase/Collection of Foreign Cheques, Draft, Travellers Cheques • Well established systems and procedures for monitoring and follow-up payments etc. • Automated Deposit Machine Good news for our Customers!!!!!!!! From now CBC customer can also deposit their money through Automated Deposit Machine at Mirpur (Dhaka) and Chalibandar (Sylhet) off-site ATM along with the withdrawal facilities. Features: • 24 hours banking • Deposit Cash / Cheque* • Pay your Aktel & Grameen phone bills* Financial Performance of Commercial Bank of Ceylon Ltd. Commercial Bank of Ceylon is a comparatively new bank in the banking scenario of Bangladesh. It started its operation only in late 2003 after acquiring the Bangladesh operations of Credit Agricole Indosuez. However, that should be no bar for a high-flyer like Commercial Bank of Ceylon Ltd. considering its performance in Sri Lanka. Having already proved its efficiency in Sri Lanka, where it’s virtually unrivalled and deemed the best by many, it’s only a matter of time before it establishes itself as one of the leading banks here. HIGHLIGHTS OF FINANCIAL ACTIVITIES [CONSOLIDATED]

Particulars

2004

2003

Paid-up capital

1,000,000,

2 3 4 5 6 7

Total capital for the purpose of CAR

000 000 1,446,823, 1,225,547,

Capital adequacy ratio (CAR) Capital surplus

395 30.50% 446,823,3

289 42.95% 255,547,28

Total assets

6,983,203,

6,138,074,

Total deposits

983 695 5,042,445, 3,894,225,

Total loans and advances

667 049 4,465,826, 2,916,210,

Total contingent liabilities & commitments

015 077 4,442,771, 3,731,217,

9 1

Credit-deposit ratio (%) Ratio of classified loans against total loans &

689 88.56% 0.02%

advances (%) 1 Profit after tax and provision

446 74.88% 2.27%

186,276,1

18,043,583

06 1

Loans classified during the year

735,000

66,165,131

Provision kept against classified loans

735,000

66,165,131

2 3 1

during the year Provision surplus/ (deficit)

4 1

Cost of fund

5.85%

5.14%

Interest earning assets

5,705,274,

5,288,709,

5 6

000 000 1,277,929, 849,365,69

Non-interest earning assets

983 Return on investment (ROI) Net interest 4.16%

7 8 1

earnings/Interest earnings assets Return on assets (ROA)

Income from investment

5 4.41%

4.71%

4.69%

99,894,30

17,596,026

9 0

8 2

Earnings per share

N/A

Net income per share

N/A

Price earnings ratio

N/A

1 2 3 Profit The domestic banking unit of Commercial Bank of Ceylon clocked a total operating income of Tk. 510,785,427 for the year ended 31 December 2004. Its profit before taxation stood at Tk. 308,097,967 and its profit after taxation was Tk. 185,903,130.

Capital Commercial Bank of Ceylon Ltd.â&#x20AC;&#x2122;s paid-up capital is Tk.1, 000,000,000. The retained earnings were Tk. 370,247,718 in the year 2004. Total shareholderâ&#x20AC;&#x2122;s equity clocked Tk. 1,370,247,718 as on 31 December 2004. Its capital adequacy ratio stood at 30.50% that exceeds the stipulated requirements for the banks in Bangladesh. Deposits As of 31 December 2004, Deposits and other accounts of the bank stood at Tk. 4,932,773,812. Below is an autopsy of this amount-

Interest Rate paid to different Deposit liabilities Application Serial 1 2 3 4

5 3 4

Savings Account (Half Yearly Interest) Savings Account (Monthly Interest) Bonus Savings (Half Yearly Interest) STD (Standard) -General Customers -Insurance Companies -Specialized Customers: Airlines, Embassies, Shipping Lines, Freight Forwards, Ship- Breakers, Iron & Steel Materials Manufacturer, Telecommunications Cement, Food & Beverages, Commodities FDR for 3 months FDR for 6 months FDR for 1 year

Up-to Tk. 2 Million 5.00%

Tk. Million above 5.00%

4.75%

5.00%

5.00% 6.50% 4.50% 8.00%

10.00% 10.25% 10.50%

2 &

5 6

FDR for 2 year FDR for 3 year

10.50% 10.50%

Highlights of the Bank's Activities Inauguration of Dhanmondi Branch in BEPZA Building. Launching of Money Market Account for the first time in Bangladesh. Introduction of Dream Planner Savings. The only bank in the country operating in holidays through Holiday Banking. ATM facility with Bangla Screen. Sponsored football matches with Chinese Community and Saudi Embassy. Helped in arranging a football match with Ecole Francaise – a French School. Participated in All University Fair held in Hotel Sheraton for the purpose of student remittance.

Social Responsibility of CBC Corporate Social Responsibility is an integral part of CBC Culture. Through different projects we hope to contribute to the community, but our main focus is to help millions of Underprivileged children in Bangladesh. CBC has always been active in social responsibility projects since the beginning. Donated to Bangladesh Army Relief Fund Commercial Bank of Ceylon donated BDT 10, 00,000/- to Bangladeshi Army Relief Fund for Sidr Victims on 3rd January 2008. Donated to Chief Adviser’s Relief Fund Commercial Bank of Ceylon donated BDT 1.5 million to the Flood Relief Fund of Chief Adviser on 6th September 2007. CBC helps Sidr affected people Combank Sports and Recreation Club on behalf of CBC donated 500 blankets and some cloths to the Sidr affected people to the Relief Fund of Prothom Alo recently as a part of CSR. CBC distributed the donated items in the presence of Chief Operating Officer Mr. S. Prabagar, Head of Customer Service Mr. Asiful Haque and The Senior Sub-Editor of Daily Prothom Alo Mr. Sydul Jaman Rowsan. Donations for Prime Minister’s Flood Relief fund

Bangladesh was affected by devastating flood in 2004. The government was seeking local and foreign assistance to help the people affected by flood. Commercial Bank was one of the donors of the Prime Minister’s Flood Relief fund and donated a sum of BDT 1.5 Million on the 9th of August 2004.

Stationary and books to children affected by floods Besides donation to Prime Minister’s Floor Relief fund we distributed stationary and books to poor children affected by floods. Donate BDT 3, 50,000 to Protibondhi Foundation Bangladesh Protibonddhi Foundation commenced construction of a school at Savar for the disable and poor children. Commercial Bank of Ceylon supported the noble cause and contribute by donating BDT 3, 50,000 on June, 2004. Provide Relief to Victimize People at Chittagong The Staff of Commercial Bank of Ceylon, Chittagong arranged to provide relief materials to the victims of Flood and Landslide at Chittagong on 16th June 2007 Training to other Bankers As a responsible corporate citizen with a duty to disseminate knowledge and experience amongst the community of bankers, our professional bankers have conducted many a useful training programs to otherbanks, including the Bangladesh Bank and customers. A few of them are: • “Basics of Financial Engineering and Derivatives” to Bangladesh Bank Officials on 2nd October, 2005. • Provisions of overseas training to a Bangladesh Bank official under “2007 Sri Lanka Foreign Exchange Association / ACI Australia Dealing Simulation Program” in Sri Lanka. • Practical Training for the newly recruited Assistant Director of Bangladesh Bank for two months from 1st January’06 and for one month from 20th May’07. The Trainee Officers was provided with training on all operational, treasury and trade financial areas of our bank. CBC Treasury Team including Mr. Prins Perera, Mr. Karar Zubair and Mr. Chiranta Caldera conducted a training program on 4th August’07 for the officials of Islami Bank Bangladesh Limited (IBBL) on “Foreign Exchange Derivatives” which was well accepted by the management & staffs of IBBL Art exhibitions CBC at CBC value art as art portrays nation’s culture. In this tradition CBC has participated in Alliance Francaise art exhibition and photography exhibition by sponsoring their T-shirts on 28th January, 2005. Donation to Islamia Eye Hospital Commercial Bank of Ceylon Limited (CBC) donated a sum of BDT1.5 million to Islamia Eye Hospital for the completion of the Children’s Eye Care Unit. The hospital provides modern, efficient and cost effective eye care services to under privileged children in Bangladesh.

The Cheque for BDT 1.5 million was handed over by Mr. S Renganathan, the Country Manager of CBC to Ms. Zaheda Ispahani, the Advisor of Islamia Eye Hospital on 30th Dec, 2006. Donation to Bangladesh Thalassaemia Hospital Bangladesh Thalassaemia Hospital is a unique healthcare institution which is meant for providing one stop medial services to the thalassaemia patients and Commercial bank of Ceylon helped their noble cause by donating blood bags.

THIRD PART Remittance Department of CBC (Commercial Bank of Ceylon) Remittance is a very important and sensitive part of a country. Bank is the only institution which has a very important role in remittance to foreign or local. Generally Bangladesh Bank (BBK) takes care of all remittance guidelines for the local and foreign. All local and foreign banks in Bangladesh actually they work as an agent of Bangladesh Bank. Bangladesh Bank provides guidelines for all banks for every transaction, especially for the remittance department. Several banks might have different software but they all follow same guidelines. If any of these banks did not follow Bangladesh Bankâ&#x20AC;&#x2122;s guideline properly their license could be canceled. Bangladesh Bank is very alert in the case of transferring fund to any foreign country. The main instruments used for remittance of funds from one place to another are: 1. Telegraphic Transfer (TT) 2. Demand Draft (DD) 3. Bank Drafts 4. Travelers Cheques. (TC) 1. Telegraphic Transfer (TT) It involves sending advice of transfer by the bank to the branch of a correspondent bank through telegraphic message. Where the money is required to be sent urgently, telegraphic transfer may be requested by the sender. He is required to pay the cost of telegram and other expenses.

2. Demand Drafts (DD) Demand Draft is an order to pay money, drawn by the bank upon the correspondent bank for a sum of money payable to order on demand. A draft cannot be drawn payable to bearer of a named payee or payable to bearer. Issuance of demand draft While issuing demand draft an official must be confirmed about the branch where the DD is to be issued or drawn as asked by the applicant. Application on banks prescribed from for DD is obtained from the applicant duty filled and signed by them. Applicant will be asked to deposit the amount of DD and exchange/commission computed correctly at the prescribed rate. On receipt of cash voucher, DD will be issued and record to DD issue register filling the appropriate columns. 3. Bank Draft Bank Draft is the way of paying one Bank to Another Bank through some advice where, one bank is requested to pay a person in the place of them. It is time consuming process. 5. Travelerâ&#x20AC;&#x2122;s Cheque (TC) Travelerâ&#x20AC;&#x2122;s Cheque is an international Cheque system where you can transform this cheque in the any country of the world. Generally it is very useful when you need money urgently in foreign country. Local Remittance Payment/Pay Order (PO) A pay order is a written unconditional order, to pay a certain sum of money, to a specified person or to his order. In other words, it can be said as the banker cheque. It is payable at the bank branch wherefrom it is issued. The drawer & the drawee is the same bank/branch. In whose favor, the pay order is issued is called the payee (i.e. the beneficiary). It is used to transfer money from one person to another, where payment through cheque in not acceptable to someone. Sometimes, Banks also use pay orders for settlement of payments of their own. Banks payment order is an instrument which contains an order for payment to the paid to effect local payment whether on behalf of the bank or its constituents. In the beginning stage, PO was issued only to effect local payment of Banks own obligations. But at present it

is also issued to the customers, whom they can, purchases to deposit as secondary money or earnest money. The bank payment order is in the form of receipts and issued by joint signature of two officials. It ensures payment to the payee as the money deposited by the purchaser of PO is kept in the banks own account named “Payment Order Account”. Payment of the instrument to be made from the branch it has been issued. It is not transferred and therefore it can only be paid to: 1.

The payee in identification.

The payee’s banker, who should certify that the amount would be

credited to payee’s account. 3.

The payee must authenticate a person holding the letter of authority

from the payee whose signature is on it. 4.

The client in whose request the PO was issued, surrenders the original

PO to the bank.

Pay Order Issue

Procedure:

Filling up P.O. application i.e., Form G 9

Signature verify by the

By transfer

By cash paymen

Receive the cheque and confirm the acceptability of the cheque i.e. whether

Cash receive by the officer and signed and sealed

If honored debit the amount in the client’s personal account 40 and signed & sealed by the officer in the voucher

Posting in the Pay Order issue Module and pass entries in the PO register

Preparation of the Pay Order, putting

Issue to the client and signature is received on

Foreign Remittance Foreign Remittance includes inward remittance and outward remittance. Inward Remittance The term â&#x20AC;&#x153;Inward Remittancesâ&#x20AC;? includes not only remittance by TT, and Drafts but also purchases of bills, purchases of drafts under Travelers Letters of Credit and purchases of Travelers cheques. Followings are the instrument of Inward Remittance: TT DD TC Purchase Cash Dollar Purchase The ADâ&#x20AC;&#x2122;s may freely purchase foreign currencies or raise debits to non-resident Taka Accounts or the respective bank branches and correspondents. Remittances equivalent to US$ 2000 and above should be reported on Form C attached to the appropriate schedule. However, declaration on Form C by the beneficiary is not required against remittances sent by Bangladesh Nationals working abroad. The purpose of remittances should be clearly stated on the Form C.

Outward Remittance Most outward remittances are approved by the ADs, on behalf of the Bangladesh bank following declaration of Taka as convertible for current accounts payments from March 1994. Only a few remittances of special nature require Bangladesh Bankâ&#x20AC;&#x2122;s prior approval. Outward remittance is done in the following manner: TT DD TC Sale Cash Dollar Sale Student remittance All remittances from Bangladesh to a foreign country or local currency credited to nonresident Taka accounts of foreign banks or convertible Taka account constitute outward remittances of foreign exchange. ADs must exercise utmost caution to ensure that foreign currencies remitted or released by them are used only for the purposes for which they are released, they should also maintain proper records for submission of returns to Bangladesh Bank as also for the latterâ&#x20AC;&#x2122;s inspection from time to time. Bank Draft Most common method of remitting money from one place to another is through Bank Drafts. A bank draft is an order by one bank to the correspondent bank to pay a specified sum of money to the person named therein or to his order. A bank draft is issued for consideration received in advance. The purchaser of the draft is charged a commission for rendering this service. The purchaser sends the draft to the payee at the destination for the purpose of encashment at the drawee bank. Cancellation of Draft Before the draft is delivered to the payee, the purchaser can cancel the draft by a formal written letter. And instruct the bank not to pay the amount to anyone else. Issue of Duplicate Demand Draft Duplicate drafts may be issued in lieu of originals reported lost only after observing necessary formalities. 42

Bank Draft Issue Procedure

Filling up Bank Draft application or

Receive cash or transfer cheque

Authorized officer verifies the signature

If the receiving currency from the client and sending currency of the Then in the draft block name of the account holder, account number, favoring Entry is passed on the Bank Draft Register. Bank draft is prepared and protector is Bank Draft is given to the customer and his Figure:

Bank

Draft

Issue

Procedure. Telegraphic Transfer through SWIFT Telegraphic transfers are by far the quickest method of transferring funds from one place to another. The remitting branch sends a telegraphic message to the other end, to pay

a certain sum of money to a named payee. Such a message is sent through SWIFT. Access to it is allowed only to authorize officers. The receiving branch, after thoroughly checking the SWIFT message, acts on it. TT Issue Procedure Filling up Swift application or Form G 9 by the client Filling of TT application by the client

Receive cash / transfer cheque

Authorized officer verifies the signature

If the receiving currency from the client and sending currency of the Entry is given to the Outgoing Remittance Register. Message is Every transaction should be Figure: TT (Telegraphic Transfer) Issue procedure. Student Remittance Commercial Bank of Ceylon Limited releases foreign exchange to the Bangladesh nationals going abroad for higher studies, subject to fulfillment of certain requirements of Bangladesh Bank. Student remittance is allowed for regular course of studies: 44

Undergraduate Graduate Post – graduate In recognized foreign educational institutions, in any foreign country. It is the proper way of remitting money for the students as per Bangladesh Foreign Exchange Guideline. Documents / Papers Required to Open Student File (Original + Photo copy): 1. Letter issued by the Foreign Educational Institution offering the Admission. 2. All the Educational Certificates in support of the examination already passed. 3. Estimate / Invoice / Demand Note issued by the Foreign Educational Institution For tuition fees and other charges. 4. Estimated living cost per year. 5. Refund Policy in case of advance payment (Before getting Visa). 6. Bank’s information (Bank Name, A/C number, SWIFT Code) for sending money through TT or DD. 7. Valid Bangladeshi Passport of the Student. 8. Any other papers as may be required to justify the application (IELTS Result etc.). 9. Require local guardian’s signature. Documents Required Opening Student Account: 1. Two copies of Passport Size Photographs of the Student, two copies of passport size photographs of Guardian and one copy of photograph of the Nominee. 2. Nationality identification of all three persons mentioned above (Passport photocopy, Voter ID, TIN Certificate) 3. Minimum initial deposit is required for opening an account BDT 6000.00

For Student’s File opening Charges: Minimum Balance with the Savings Account BDT = 3,500.00 Student file–opening fees VAT 15 % Draft (DD) charges / Commission VAT 15 % SWIFT (TT) charges / Commission VAT

15 %

BDT = 4,500.00 BDT = 675.00 BDT = 500.00 BDT = 75.00 BDT = 1,500.00 BDT = 225.00

Correspondence (Foreign) Bank Charge Correspondence (Foreign) Bank Charge

BDT = 2,500.00 (in case of SWIFT and the beneficiary country is UK) BDT = 1,000.00 (in case of SWIFT and the beneficiary country is Australia)

Renewal of Student File: 1. 2. 3. 4.

New Estimate for Current academic year (Tuition fee & Living expenses) Grade report for first year (Up to Date) Application for renewal Total renewal charge BDT: (4,500.00 + VAT BDT 675.00)

Renewal of the Remittance permit after it expires every year Renewal of the Student Permit is done by Commercial Bank of Ceylon Limited on production of: Request letter for renewal of the expired Student Permit, produced by the local guardian/nominee of the student in his absence in Bangladesh. Student’s Annual Progress Report or Transcript Demand letter from the Educational Institution for deposit of next year’s Tuition Fees and other relevant charges payable to Educational Institution. Salient Features of Student Remittance Commercial Bank of Ceylon Limited maintains a specialized and exclusive department equipped by experienced officers of the bank. Commercial Bank of Ceylon Limited provides free consultation to the interested students and their guardians. Application processing fee is the lowest amongst the multinational banks in Bangladesh. Wire transfer of quick and safe payment through SWIFT.

•

Remittance can be possible in 13 different currencies.

•

Clearing & Collection

Collection For safety and security people use financial instruments (bills) like DD, PO, and Cheque etc. on behalf of their customers. The techniques that the bank uses for these financial instruments are clearing, send for collection (SC) and Local Short Credit (LSC). When the bill is within the range of local clearinghouse it is sent for collection through clearinghouse. But if the bill is out of the clearinghouse range then it is collected by SC [Commonly known as Outward Bill for Collection (OBC)] and when the bank collects bill, as an agent of the collection bank the system is known as LSC [commonly known as Inward Bill for Collection (IBC)]. Outward Bill Collection

Client deposits cheque for collection of different clearing zones

Bank receives the cheque and the deposit slip. Confirms whether it is duly signed.

Crossing seal is put on the left corner of the Cheque

Sent the cheque to Principal Office for Customer liability Dr The Principal Office collects the bill through clearing

Bankers Liability Dr Customerâ&#x20AC;&#x2122;s

Figure: Clearing Process. Clearing As a cheque, payment order or bill comes from a bank within the range of local clearinghouse then it is sent for collection through clearinghouse. The cheque may be crossed or not. If a customer of Commercial Bank of Ceylon Limited deposits a cheque of another bank, which is within clearing area, then Commercial Bank of Ceylon Limited will credit his account and collect it (cheque). Though the amount is credited in the customerâ&#x20AC;&#x2122;s account but he will not get the money until the cheque is honored. Collection procedure for clearing The cheque is first deposited through a received seal with the help of a deposit slip. The collection bank gives a crossing with Commercial Bank of Ceylon Limited. It indicates that the mentioned bank is the collection bank. Entry for outward clearing is put in the system... The cheque is then sending to Commercial Bank of Ceylon Limited Head Office along with other cheque (if any). Two sets of vouchers are prepared for this purpose. If the cheque is on other branch of Commercial Bank of Ceylon Limited with in same clearing area then it is collected through inward clearinghouse of Commercial Bank of Ceylon Limited. Tasks of Clearing

Inward Clearing Check

Outward Clearing Check

Inward Collection Check

Outward Collection Check

Cash/Cheque Management system of CBC Cash department is very sensitive department because the officers of this department deal with cash. They have take extra care during the dealing whether to receive money or give it to the customer. Following responsibilities are charged to the official of the cash department: Holds the key of cash safe.

2.Open the cash safe before commencement of business along with other officers holding the keys. 3. Supervises the carrying of cash to the cash department from volt. 4.

Delivers cash to the paying cashiers.

Supervises receipt and payment of cash.

6.Receives cash from Head office and acknowledges, where necessary. 7.Will check the receiving tellers and paying tellerâ&#x20AC;&#x2122;s receipt/payment position and will collect cash from them. 8.Writes the cash Balance book/reports and cash position memo and sign them. 9.Investigates and informs the manager about excess or shortage of cash, if any. 10.Gets books/reports and cash checked by the manager or Authorized officer. 11. Supervises the custody of cash and books/reports in the safe. 12.Will ensure adequate security measures for the cash department.

Flow Chart showing Cash Payment against Cheque Receipt of cheque by the officer through deposit slip

Cheque the adequacy of the clientâ&#x20AC;&#x2122;s balance, date of cheque, signature, amount of cheque in wards and figures of the cheque

Input stage – System

Customer A/C Dr (By the amount of

Write the amount on the back of the cheque and on the front, cash payment and signature verify seal is put

Finally bearer of the cheque will

Cash Receive Procedure

Receive cash through Deposit Counting and verification Deposit Slip is sealed by ‘Cash Receive’ seal,

Posting

Documents/Register used in the Cash Department

Customer A/C Cr

•

Volt Register: Kept at volt to record the cash position in the Volt.

•

Cash Balance Register: To record receive and payment in counter.

•

Petty Cash Register: To record the petty transactions of the bank.

Cash Transactions Commercial Bank of Ceylon Limited has Teller System for the convenience of their account holders in all its branches. Under this system the time taken in payment is considerably reduced. Under traditional system, when a cheque is presented for payment, it passes through a number of persons e.g. the ledger keeper, accountant, cashier, etc. which takes time. Teller system does away with the aforesaid time consuming procedure. Under teller system, a cashier is designated as “Teller” who makes payments of cheques up to specified amounts immediately on presentation of cheque by the payee. Because of risk of payment to a wrong person, Teller system is usually adopted for small payments say, up to Tk. 100,000.00. Cash Receipt All cash receipt vouchers shall be received by the Teller, checked with cash tendered and posted in the respective Accounts. The Teller shall mention receiving serial on the vouchers and put his signature and also “Cash Received” stamp on it. The authorized official shall also sign the receipt vouchers where necessary and return to the Teller. Process Flow Chart: Receiving of Cash Teller receives cash with the paying-in-slip duly filled up and signed by the depositor. Scrutinizes the particulars appear on both sides of the paying-in-slip. Counts Cash. (denomination wise)

Separates inferior Notes i.e. non-issuable, burn, torn and mutilated notes, if any Writes denomination on the back of the voucher part of the (Banks part) paying-in-slip Examines whether the total amount of cash agrees with the amount written on the paying-in-slip. Teller gives full signature on both parts of the paying-in-slip. Enters the particulars of deposits in the computer generated Tellers Sheets Submits the paying-in-slip to the officer in charge, Cash Department, along with the statement evidencing posting of deposits in the respective accounts. Officer in charge, Cash Department scrutinizes the paying-in-slip and puts his full signature on the paying-in-slip. Affixes Cash Received stamp on both parts of the paying-in-slip by the Teller. Separates the voucher part from the paying-in-slip. Return the counterfoil to the depositors.

Cash Payments While received cheque for payments across the counter shall be asked to sign on the back of the cheque by the person presenting the cheque. After checking carefully the cheque number, date, amount both in words and figures, the drawers authority and signature, stop payment instruction, if any, the endorsements and the available balance or drawing power, the Teller will post the cheque in the respective account and will put his signature on the cheque and payment shall be made if the amount is within the delegated power of the Teller after due cancellation of the cheque. If the amount of the cheque is beyond the delegated power of the teller, pass on the cheque to authorized officials for 52

checking and cancellation. The passing officials shall send the cheque to the Teller after checking and cancellation for payment if the cheque is found otherwise in order. Process Flow Chart: Cash Payment of Cheques Teller accepts the cheque from Customers. Scrutinizes the particulars of the cheque Tallies the printed number of the cheque with that of cheque series in record. Posts the particulars of the cheque in the concerned A/C of the customers after verifying drawers signature, balance in the A/C. Marks posting with the initial. Submit the cheque to officer in charge of Cash Department. Officer Cash Department scrutinizes the cheque over Tk. 100,000 and supervises the posting. He passes the cheque giving his full signature on the face of the cheque and sends it to the Teller. Teller obtains another signature of the payee on the back of the cheque to compare it with the one obtained while submitting the cheque. If the signature agrees with the previous one he counts the cash and writes denomination on the back of the cheque. Teller pays cash to the customer.

FORTH PART The Performance of commercial bank of Ceylon ltd comparing to few other banks Industry Analysis Industry analysis builds on customer & competitor analyses to make more strategic judgment about a market & its dynamics. One primary objective of industry analysis is to determine the attractiveness of a market to current and potential participants. A second objective of a market analysis is to understand the dynamism of the market. The need is to identify the key emerging factors, trends & threats, opportunities & strategic uncertainties that can guide information gathering & analysis. Porterâ&#x20AC;&#x2122;s approach can be applied to an industry, but it can also be applied to a market or sub-market within the industry. The basic idea is that the attractiveness of an industry or market as measured by the long-term return investment of the average firm depends largely on five factors. A complete understanding of the competitive area helps to guide strategy design & implementation. Rivalry Among Existing Competitors The rivalry among the competitors and the growth in the industry depends upon the intensity of competition. A high amount of competition is observed in the banking sector of Bangladesh. Banks compete against the banks with their low cost of operation and syndication. Commercial Bank of Ceylon Limited just started its operation in Bangladesh as a multinational bank; it is already facing the syndication. There are other international and local banks that also take part in the competition and are aggressive in nature. This high intensity of competition makes companies difficult to sustain in the long run. Threat Of New Entrants The next force highlights the possibility of new competitors entering the market. Existing firms may try to discourage new competition by aggressive expansion and other types of entry barriers. The banking sector of Bangladesh seriously faces the threat of new entrants. 54

However the threat comes from two directions. The first threat comes with the arrival of the multinational banks and their branch expansion particularly due to the booming energy sector. Secondly, the continuous entry of local banks with lower cost structure also poses a severe threat to this industry. In the context of Commercial Bank of Ceylon Limited, the various new and upcoming banks pose a significant threat, being new entrants in the banking sector of Bangladesh. But Commercial Bank of Ceylon Limited is aware of these potential competitors. So it is trying to expand countrywide to make the sector unattractive and to create entry barriers. Threat Of Substitute Products This force considers the potential impact of substitutes. New products that satisfy the same customer needs are important sources of competition including alternative

Figure: Porterâ&#x20AC;&#x2122;s Five Forces Model for Banking Industry in Bangladesh

Products in the definition of product market structure identify substitute forms of competition. Commercial Bank of Ceylon Limited continuously faces the threat of various substitute products launched by its strong competitors in the market place. For example, the launch of DPS by Dhaka Bank poses a strong threat on Dream Planner Savings of Commercial Bank of Ceylon Limited where it should launch an even better product. Moreover the various consumer credit schemes offered by various local banks with lower interest rates and cost also poses a strong threat on Commercial Bank of Ceylon Limitedâ&#x20AC;&#x2122;s products. Again the lower service charges at other local banks also discourage a wide group of customers to hold account in Commercial Bank of Ceylon Limited. So these are some of threats posed by substitute products in the market place. Bargaining Power Of Suppliers The fourth force is the power of suppliers that may have impact on the producers in an industry. Companies may pursue vertical integration strategies to reduce the bargaining power of suppliers. In the context of Commercial Bank of Ceylon Limited, suppliers are those customers and organizations that provide financing to the firm via depository schemes. If the cost of financing rises, then Commercial Bank of Ceylon Limited will have to increase the interest rate that it charges to its customer in order to remain in the business. This may result in severe customer dissatisfaction and as a result poor profitability. Commercial Bank of Ceylon Limited is aware of this devastating situation. Bargaining Power Of Buyers Finally, buyers may use their purchasing power to influence the producers or service providers. Understanding which organizations have power and influence in the distribution channel provides important insight into the structure of competition. 56

In the banking sector of Bangladesh, customers have a strong bargaining power since there are a large number of commercial banks providing similar services. Customers have a wide range of options in deciding where to bank. They can either go for the multinationals or turn to new local banks for getting quality service. Others may also consider the national banks for large credit facilities. Therefore, in order to attract banks have to pursue the customers with attractive interest rates and provide them with tailor made customized services. Commercial Bank of Ceylon Limited has its own policies to carry out its operations and employees follow those rules to deal with the customers. But too much rigidity of the prevailing policies in dealing with the clients may under cut its client base as well as profitability. To overcome this worst scenario â&#x20AC;&#x201C; a positive and personalized approach to the needs of customer - has become Commercial Bank of Ceylon Limitedâ&#x20AC;&#x2122;s motto. Exploring the external and internal environment of Commercial Bank of Ceylon Limited (SWOT Analysis)

Strength Weakness Opportunity Threat

The SWOT analysis comprises of the organizationâ&#x20AC;&#x2122;s internal strength and weaknesses and external opportunities and threats. SWOT analysis gives an organization an insight of what they can do in the future and how they can compete with their existing competitors. This tool is very important to identify the current position of the organization relative to

others, who are playing in the same field and also using the strategic analysis of the organization.

Strengths Superior Quality Commercial Bank of Ceylon Limited provides its customers excellent and consistent quality in every service. It gives highest priority that customer is totally satisfied. Dynamism Commercial Bank of Ceylon Limited draws its strength from the adaptability and dynamism it possesses. It has quickly adapted the world-class standard in terms of banking services within its operation of not more than 2 years. Commercial Bank of Ceylon Limited has also adapted state of the art technology to connect the world for better communication to integrate facilities. Financial Strength Commercial Bank of Ceylon Limited is a financially sound company. It is awarded AA rating by the Credit Rating Information Services Ltd. (CRISL). This is by far the highest rating awarded to any bank by rating agency. Efficient Management All the levels of the management are solely directed to maintain a culture for the betterment of quality of service and development of a corporate brand image in the market through organization wide team approach and open communication system. State of the Art Technology Commercial Bank of Ceylon Limited utilizes state-of-the-art technology to ensure consistent quality and operation. The proof of that can be found in its branches, they are equipped with SWIFT. This facility will be introduced in every branch very shortly. Expertise One of the key-contributing factors behind the success of Commercial Bank of Ceylon Limited is its employees who are highly trained and most competent in their own field. Commercial Bank of Ceylon Limited provides their employees training both in-house and out side job.

In-House Utility Commercial Bank of Ceylon Limited is free from dependence from the ever-disruptive power supply of our public sources. The company generates the required power through generator fed on diesel when power supply is disrupted. Excellent Working Environment Commercial Bank of Ceylon Limited provides its workforce an excellent place to work in. Total complex has been centrally conditioned. It is renovating the interior decoration with the exquisite choice of soothing colors and blend of artistic that is comparable to any multinational bank. Introduction of Product and Services In 2003, Commercial Bank of Ceylon Limited started its operation in Bangladesh. But within a short period of time is has already adopted with environment of the country. It has introduced products like Money Market for the first time in Bangladesh. Weaknesses Limited Workforce Commercial Bank of Ceylon Limited has very limited human resources compared to its financial activities. There are few people to perform most of the tasks. As a result many of the employees are burdened with extra workloads and works late hours without any overtime facilities. This might cause high employee turnover that will prove too costly to avoid. Inadequate Deposit As Commercial Bank of Ceylon Limited is comparatively new bank in Bangladesh, it is faced with deposit limitation than its competitors. Proper marketing initiative from the management can easily make its products available and thus increase its client base as well as deposit status. Fewer Branches Commercial Bank of Ceylon Limited has fewer branches than its multinational and domestic competitors. Such as Standard Chartered Bank has 18 branches and Uttara Bank Limited has 198 branches and 12 regional offices whereas it is consists of only 3 branches and two booths.

Centralize System Commercial Bank of Ceylon Limited is more hierarchy-driven compared to other multinational banks. The organization needs to achieve flat-management structure Opportunities Vast Market The population of Bangladesh is continuously increasing at a rate of 7.3% per annum. The countryâ&#x20AC;&#x2122;s growing population is gradually and increasingly learning adaptation of consumer finance. As the bulk of our population is middle class, different types of products have very large and easily approachable market. Huge Consumer Base Bangladesh has a huge consumer base maintaining several accounts. So Commercial Bank of Ceylon Limited has the opportunity to keep these customers by reducing its current fees and charges and positioning attractively in middle class segment. Government Support As it is becoming one of the vital sources of employment, Government of Bangladesh has rendered its full support to the banking sector. Such government concern will facilitate and support the long-term vision of Commercial Bank of Ceylon Limited.

Threats Frequent Currency Devaluation Frequent Taka devaluation and foreign exchange rate fluctuations and particularly Southeast Asian currency crisis adversely affects the business globally. Emergence of Competitors Due to the existence of unnerved demand in financial sector, it is expected that more financial institutions will be introduced in the industry very shortly. And lots of new banks

are coming in the scenario with new services. Commercial Bank of Ceylon Limited should always be prepared for the competition in the coming years. A Comparison with other Multinational Banks Savings Account Product Features Minimum Account Balance Time taken to delivery Cheque book Calculation of Interest and Payment

Relationship Fee

Restriction on number of withdrawals

Commercial Standard Bank of Ceylon Chartered Bank Limited BDT 25,000 Monthly average balance of 100,000 1 working With ATM day after card cheque opening book is account provided instantly Interest is Interest is calculated on calculated on daily balance average from BDT monthly 25,000 and balance and above and paid paid half yearly half yearly or monthly None BDT 500 half yearly

HSBC BDT 50,000

Citi N A BDT 150,000

2 working 2 days after working days opening after account opening account Interest is Interest calculated on is calculated daily balance on average from BDT monthly 50,000 and balance and above and paid paid half half yearly yearly

BDT 300 per quarter if average total of asset and liability accounts is below BDT 50,000 No Monthly No restrictions on interest is restrictions on withdrawals or forfeited if withdrawals or upper interest customer upper interest limit withdraws or limit issue cheque/ transfer more than 1/10th of balance or writes more

BDT 200 monthly, if balance falls below 150,000 even for one day Interest can be earned if the balance is BDT 150,000 or above. BDT 300 per withdrawal if more than 5 withdrawals

Ledger Fee A/Commerci al Bank of Ceylon Ltd. Closing Fee Fee for closing of A/C within 3 months of opening Phone Banking ATM

than 2 cheques a week, without 7 days prior notice 500 No fee

BDT annually

are made in a month

BDT 200

BDT 300

BDT 1,000 annually BDT 500

BDT 500 (less than 6 months)

BDT 500

Free

N/A

N/A Total

ATM

Total

ATM

No fee

Total ATM

04 Annual ATM charge Card replacement fee / lost card fee Counter Cheque Inter city transaction

Inter Banking

21 11 None (BDT BDT 150 Free 300 once in issuing) BDT 300 per BDT 300 per BDT 150 card card Free

BDT 50

BDT 200

Free

Applicable

Free

None

BDT annually

1500

Total ATM 1 Free BDT 300 per card 1st 5 transactions free then there is a charge of BDT 300 -

Fixed Deposit Account

Product Features Product Name 62

Commercial Bank of Ceylon Limited FDR Monthly Interest Bearing

Standard Chartered Bank Fixed EZEE FDR Deposit

HSBC Time Deposit

Citi N A Monthly Interest Bearing

Fixed Deposit

Minimu m Balance Interest Cycle

Tenure

Condition for premature encashment

Fixed Deposit BDT BDT BDT BDT 50,000 50,000 100,000 100,000 Interest Interest is Interest is Interest is is paid paid on a paid on paid at on monthly maturity quarterly maturit basis intervals y 3, 6, 12 1, 2 and 3 3, 6, 12 3, 6, 12 months years months months and 1, 2, and 2, 3 and 2, 3 3 years years years If withdrawal is No interest if made before 6 withdrawn in 1 month months, interest is and savings account paid at savings rate interest rate if and after 6 months, 3 withdrawn before months FDR rate is maturity applicable

Time Deposit BDT BDT BDT 100,000 500,000 250,000 Interest is Interest is Interest is paid on paid on a paid on maturity monthly maturity basis 1, 3, 6, 12 1 and months years

2 3, 6, 12 months and 2, 3 years No interest if No withdrawn in 1 month interest if and savings account withdrawn interest rate if in 1 withdrawn before month maturity and savings account interest rate if withdrawn before maturity

LAST PART RECOMMENDATIONS AND CONCLUSION Recommendations Considering all the findings and analyzing all the data the following recommendations are made, which will benefit both Commercial Bank of Ceylon Limited and its customers.

Foremost Recommendations •

From the customers’ suggestions I have also found that it is very needed

increase the proper allocation of manpower that can improve the service quality. •

The number of telephone should increase so that customers can call at

daytime. Telephone busy related troubles should be decreased. •

The authority should minimize the problem of call waiting duration so

that the overall customers’ satisfaction increases. •

All employees should be given the basic knowledge of how every

section/department works. So that anyone can represent the work of other while there is rush. •

Only understanding the customer problem will not highly satisfy them

unless individual attention and care are provided. Proper individual

attention

and care can make the customer highly satisfied. •

The service providers should keep it in mind that all kinds of customers

deserve to get the services. •

Regarding students remittance (in Gulshan Booth), there should be another

separate section and more employees, so that the service provided would be more facilitate and quick. Other Recommendations There should be more sitting arrangements. Interior decoration should be changed to make the work place enjoyable. The responsibilities of every person must be clearly specified. •

Interaction and co-operation among the employees need to improve.

•

The work should be more bend to computerized than manual works. The bank should provide all their employees more effective training regarding client handling and service. More skilled and competent personnel should be recruited and they should be properly nurtured. Establishment of performance based salary system. Strengthening the electronic banking services.

Continue launching new products and services to meet the diversified needs of customers. •

The bank can provide small gift such as pen, key ring, and paperweight to the customer who transacts most.

•

The advertisement for the products could be done in a more attractive way i.e. the bank can use the Television to display the advertisement of the Products.

•

Officers alone cannot keep the work updated; the proper attention and equal contribution of higher authorities are required to keep the work updated.

At the very end of the ‘internship program’ working three months, it can be expected that these above recommendations will help to rearranging some infrastructures, which will support the large customers based service of Gulshan Booth, Commercial Bank of Ceylon Limited

Conclusion Today banking is a growing sector; somehow everybody of the society is dependent on banking. Commercial Banks are great monetary institutions, important to the general welfare of the economy more than many other financial institutions. Though Commercial Bank of Ceylon Limited is comparatively new in the market of Bangladesh still it is regarded as a reliable bank and the growing number of its customers indicates its acceptance among clients. It has only six years of banking in Bangladesh. Now is fighting for the future expansion as it done in Srilanka. In today’s competitive market it survives nicely, it was started with the vision of “To be the Bank of Excellence in Service and Commitments” it has kept their words. CBC is now growing with the word’s modern technologies and systems. As a foreign Bank it will grow as a multinational in future, and operate almost all countries of the world

Bibliography 1. Commercial Bank of Ceylon Limited. Annual Report

2. Bangladesh Bank Guidelines 3. The Financial Express 4. The Daily Star 5. www.combankbd.com 6. Google