Internship Report on Evaluation of Customer services Quality of Prime Bank Limited

2.11 ASSETS AND LIABILITY:

Prime Bank Limited ensures its available funds to meet obligation of maintaining Statutory Liquidity Ratio (SLR) and investments of liquid assets in a profitable manner. On 31^st December 2003, the liquid asset was Tk. 4584.45 million & the ratio of liquid asset to total asset was 18.92%.

2.12 CONSUMER CREDIT

Prime Bank Limited had a pioneer role in providing necessary finance to the fixed income group for buying items that are necessary for raising the quality of living. Over a period, other banks and financial institutions had copied the model of Prime Bank. The Bank had continued its focus on that market segment and future liberalized it policy for providing computers for home level usage, in particular for students. The bank recently had a successful consumer credit fair at Sheraton Hotel in Dhaka city.

2.13 LOANS & ADVANCES

With a view to improving the quality and soundness of loan portfolio, credit risk management methods were updated in 2003. The bank is now applying a new system of credit risk management and lending procedures by sticker separation of responsibilities between risk assessments and lending decisions and monitors its exposure to particular sectors of economy on an ongoing basis. At the end of March 2005, total loans and advances amounted to Tk. 23219.67 million up by 40.79% compared to the 16492.22 million in 2003.

2.14 SMALL BUSINESS ENTERPRISE

The Bank has all along encourages small and Medium Enterprise (SME). Agriculture and IT sectors both got priority from the Bank in line with national interest. The bank had also extended projects under syndicated financing arrangement with banks and financial institutions.

2.15 TRADE FINANCE:

Prime Bank Limited had all along put strong emphasis in trade services related areas and enlarged its capacity building to handle growing business volume. It has also strengthened support functions so that the Bank can be relatively an important player among the private sector banks in this area. Consequently, it has produced steady stream of revenues despite downturn in international trade.

2.16  AUTOMATION IN BANKING OPERATION:

Technology integration for automation of business process and procedures is an integral part of modern consumer service. Since the very beginning, Prime Bank Limited has made conscious effort for induction and up gradation of information technology at various levels to gain competitive edge over the others. Process of selecting top quality banking software was in an advanced stage and the Bank had already short-listed three solution form internationally reputed firms. Prime Bank Limited needed high performance, scaleable online banking software so that customer services were rendered more efficiently and new products were deployed with little loss of time

3.0 Organizational structure of Prime Bank

3.1 Organogram of Prime Bank’s Head Office

3.2 Hierarchy of Prime Bank Limited

4.0 FUNCTIONAL STRUCTURE

4.1 ASSETS AND LIABILITY COMMITTEE:

The management of Bank’s asset and liability is managed by ALCO at Head Office. The committee general maps the Strategy for liquidity management, reduction of interest rate risk, market risk and maturity gap. In addition, ALCO provides the Bank continued access to different funds including inter bank funds so that liquidity risk is low. The pricing policy for the different kinds of liability and assets is also determined in this committee.

4.2 GENERAL SERVICE DIVISION (GSD)                    

Functions of GSD are classified as Establishment and General Banking.

ESTABLISHMENT:
Its main function related to procurement and supply of all tangible goods to the Branches of PBL. This includes:

• · Every tangible function of Branch Opening such as making lese agreement, interior decoration, etc.
• · Print all security papers and Bank Stationeries, forms and registers and distribute them to the branches
• · Import/ Procurement of various kinds of security papers
• · Purchase and distributions of all kinds of Bank’s Future and furniture and
  fixture
• · Receives demand for car/vehicles, telephone etc. from the branches, division and sub divisions, and arranges purchase and delivery of them to the person/branch concerned
• · Install and maintenance of different facilities in the different Branches.

4.3 GENERAL BANKING:

This sections issues power of attorney to the officers of the bank and maintains general correspondence with Bangladesh Bank and other Bank.

4.4 FUNCTIONAL ADMINISTRATIVE DIVISION (FAD)

Financial Administration Division deals mainly with the account side of the PBL.

4.5 HEAD OFFICE ACCOUNTS:

It deals with all the Head Office transactions with banks and its branches and al these are controlled under the following heads:

• · Income, Expenditure positioning: All income and expenditures are maintained and posted with this head.
• · Cash Section: Cash sanction generally handles cash expenditure for office operations and miscellaneous payments.
• · Bills Section: This section is responsible only for inland bills.
• · Salary and Wages of the Employees: Salary and the Wages of the head office executive’s officers and employees are given form this department.
• · Maintenance of the Employee Provided Fund: Here employee’s PF accounts are maintained.

4.6 CONSOLIDATION OF BRANCH’S ACCOUNT:

All branches periodically send their income and expenditure, i.e. profit and loss accounts and head office make the consolidated statement of income and expenditure of PBL. This division also prepares different monthly, quarterly and half ­yearly statement and submits to Bangladesh Bank .It also analyzes and prepares financial statement for the management

4.7 CREDIT DIVISION:

The main function of this division is managing Prime Banks Credit Portfolio. Other major functions are follows:

• · Receiving Credit proposals from Branches
• · Appraisal of the credit proposals with recommendation
• · Get approved form competent authority
• · Preparing sanction letters and sending them to the branches
• · Monitoring and follow-up of the loans and advances provided by the bank.
• · Set-up prices for credits and ensures effecting of them
• · Obtaining CIB Report and NOC for large loan proposals’ from Bangladesh Bank
• · Preparing various statements for owned submission to Bangladesh Bank.

4.8 INTERNATIONAL DIVISION

This is the division that monitors and supervises the foreign exchange dealing of the banks. It makes the guidelines and frameworks for foreign dealings in compliance with rules and regulations prevailing in Bangladesh and abroad. It circulates the instructions Bangladesh Bank regarding dealing in foreign exchange. It maintains correspondences with foreign corresponding banks and exchange houses with which it has exchange arrangements/international trade. It maintains NOSTRO account with bank in abroad. It monitors the open position to keep it squared as per the instructions of Bangladesh Bank. It collects various statement/information form Authorized Dealer (AD) Branches, prepares consolidated statement for onward submission to Bangladesh Bank. Each and everyday it fixes the foreign rates and send these to AD Branches and Bangladesh Bank. It takes part in foreign dealing with other banks at home and abroad.

4.9 TREASURY OPERATING DIVISION:

This division performs the works of money market operation. They borrow lend money on call basis.

4.10 COMPUTER/IT DIVISION:

Prime Bank Limited operates and keeps records of all its transactions, assets and liabilities in computer by using integrated software to maintain Client Ledger and General Ledger. The main function of this division is:

• Supply and installation of computer in different desks as per requirements;
• · Designing software to support the accounts operation;
• · Updating software if there is any lagging in the software;
• · Improvisation of software to get best possible output of that;
• · Train the concern executives and officers regarding the operation of newly developed software;
• · Hardware and software trouble shooting;
• · Provides up to dated CD’s of online account to the branches;
• · Provides routine check-up of computers of different branches.

4.11 PUBLIC RELATION DIVISION:

The public relation division routine functions are:

• · Arrangement for publishing advertisements in the Newspaper and other media.
• · Inviting concerned one year of may occasion

4.12 MARKETING DIVISION:

This division involves two types of marketing.

• Asset Marketing:

Marketing of asset refers to making of various kinds of loans and advances. In order to perform this job they maintain communication with respective corporate clients, apprise them the incentive of taking loan from Prime Bank Limited and finally approaches them to borrow form Prime Bank Limited In profitable projects.

• Liability Marketing:

It refers to marketing for collecting fund through buying of depositary products from the prospective large depositors. The marketing people communicate to the persons/organizations that have excess fund to deposit or invest. Inform them the opportunities attractive features of depository products of Prime Bank Limited and request them to invest in Prime Bank Limited in various deposit schemes.

4.13 HUMAN RESOURCE DIVISION:

This division performs the activities related with administration and personnel. The main functions of the HRD are:

• · Selection and recruitment of new personnel
• · Prepare all formalities regarding appointment and joining of the successful candidates
• · Appropriate placement of the manpower.
• · Details with transfer, promotion and leave of the personnel
• · Training and Development of Human resources
• · Taking disciplinary actions when necessary
• · Keeping records and personal file for every employee
• · Taking measures for welfare of the employees
• · Arrange workshop, seminar etc. for the development of the employees

4.14 MONITORING AND INSPECTION DIVISION

The division works directly under the control of the Managing Director. This division is responsible to arrange periodical internal audit in each branch, to conduct special audit and to follow-up and monitor the bank’s overall activities.

4.15 CREDIT CARD DIVISION

Prime Bank Limited obtained the membership of Master Card International in 1999. A separate division has been assigned to look after the operations of credit card. The principal duties of the division are to making of credit card to the potential buyers, issuing cards upon their request and providing prompt services that are required by the card holders. Currently Prime Bank Limited offers four types of cards that are Local Service Card, International Silver Card, Local Gold Card, and International Gold Card.

4.16 MERCHANT BANKING AND INVESTMENT DIVISION

Prime Bank Limited has been accorded license for carrying out operating as a Merchant Banker and Portfolio Manager by the Securities and Exchange Commission. This division deals with the activities related with the above. It is to be mentioned hare Prime Bank Limited is expected to start operation in the areas of issues management, underwriting and portfolio management. During the year 2002 Merchant Banking and Investment Division took advantage of marginal price and by selling stocks form own portfolio, the Bank earned a capital gain of Tk. 1.57 million during the year under review. Besides a sum of Tk. 1.31 million was received as dividend income on the shares held in Bank’s portfolio. Total income from capital market operation of the Bank in 2002 was Tk. 2.88 million.

4.17 BOARD A ND COMPANY SECURITY DIVISION:    The main function of this division is:· Conducting meeting of the Board of Director Dealing with the issuance as required by Companies Act.

4.18 COMMITTEES AND GROUP DIVISION PROCESS:

The decision making process of the Bank involves the both democratic and consultative. Subordinates are given chance to participate in the goal determination of the Bank. They are given with responsibility too. There are three committees functioning in the Bank that are Policy Committee, Executive Committee and Management Committee.

• Policy Committee:

Committee members are drawn form the Board of Directors. The committee reviews all meters relating to principals, policies, rules etc. Decision taken by the policy committee reviews all the members relating to principles, polices, rules, etc. Decision taken by the policy committee requires approval of the Board.

• Executive Committee:

The executive Committee consists of the members of the Board of Directors. This committee exercises the power as delegated by the Board form time to time and approves all matters beyond the delegation of the Board.

• Management Committee:

The Management Committee consists of the Managing Directors and Head Office Executives. They discuss about the progress on portfolio functions, guidelines regarding deposits, lending, and different ideas and planning, gives decision/permission regarding various issues.

4.19 RESEARCH AND DEVELOPMENT DIVISION:

Research and Development is maintaining a separate division of Research and Development to innovate new products and services, to improve existing products and services.

5.0 Functions of the Branch

All Branches of Prime Bank Limited are divided into three Departments.

• General Banking Division
• Foreign Exchange Division
• Credit Division

5.1 General Banking Division:

General Banking is the most significant department for any commercial bank. This department is designed to serve the general people is saving money, smoothing transactions for commercial people and ensure security of the precious wealth of the client. The working procedures of general banking of regulatory system and interest/profit rate are not same.

General Banking is fully computerized. All transactions are maintained in computer. Computer maintains Daily clean cash report, daily General ledger of General banking.

General banking may be termed as retail banking. PBL function of General Banking are divided into 05 sections-

• Accounts opening Department,
• Clearing and bills department,
• Remittance Department.
• Cash department
• Accounts department.

5.1.1 Accounts opening Department:

Account opening department is important department of Genera! Banking for the deposit. This department invites people to open A/C to be a client to taking service provided by the Bank. Relation between customer and a Banker starts with open in an account. There arc various types of account.

• Current Account

There is no interest against this account and a depositor can withdraw money several times in a week, even, in a day also. PBL provides current A/C facilities where any, individual, joint, Proprietorship, Partnership, Limited company, Club, Societies, Trusts etc. can open or operate current A/C by own name with the bank.

• Savings Account

This account has an attractive interest for the depositors. Interest of this account is 6.00%. An account holder can with draw money twice a week from his respective account. If anyone withdraws money more then twice a week, he/she will not get any interest of the month. It can be operated by individually or jointly.

• Short-term Deposit

The deposits held in this A/C shall be payable on short notice. This account has an attractive interest for depositors. Interest of this account is 6.00%. One can operate this account.

• Foreign Currency Account

Foreign currency A/C is opened in favor of the people who are living in abroad as service holder.

Other accounts are Fixed Deposit account, Convertible taka account, Non-Resident taka account, Deposit pension Scheme etc. Due to not having the permission conducting directly foreign exchange transaction  Motijhell Branch don’t offer’s this type of account yet.

• Opening of an Account:

The banker must keep on his record the particulars of each account holder and his introducer namely, full name, address, Occupation, Specimen signature etc. The particulars are essential for identification of the account holders individually so that the banker can discharge his obligations to every one correctly and to the extent due. Opening of an account is nothing but signing a contact by the parties. To open an account, a bank has to perform some activities. It is per formed by account opening department. The following papers/ Documents are required to submit in ease of opening the under mentioned accounts.

• Individual/ Joint

If the customer is an individual person, the general procedure and requirements are applicable for him. No special instruction required, Since he/ she is the only person to operate on his/her account. However, he/she may authorized any person to operate on his/her behalf and for that purpose he/she has to give a mandate or power to attorney in favor of that person. The documentary requirements for opening an account for an account for an individual/Joint person are: –

1.    Two Copies of passport size photograph of the account holder(s) person(s)who will operate the Account duly attested by the introducer.

• Proprietorship firm

a)   Two copies of photograph who will operate the Account, ii)      Certified copy of valid trade license.

• Partnership firm

a) Two copies of photograph that will operate the A/C.

b) Certified copy valid trade license.

c) Certified copy of partnership deed duly signed by all partners,

d) Partnership A/C Agreement (Draft-enclosed).

• Limited Company

a) Two copies of photographs that will operate the A/C.

b) Certified copy of Memorandum & Articles of Association.

c) Certified copy of certification of incorporation.

d) Certified copy of Certificate of commencement of Business (Public Ltd. Company)

e) List of Directors.

f) Certified copy of Resolution of (he Board of Directors for opening and operation of the Account (Draft-enclosed).

• Club/ Society /School/ College

a) Two copies of photograph that will operate the Account,

b) Certified copy of Bylaws & Regulations /Constitution.

c) Certified copy of memorandum & Articles of Association,

d) Certified copy Resolution of Committee for opening the account.

e) List of Managing Committee / Governing Body / Office Bearers.

• Trust

a) Two copies of photograph that will operate A/C.

b) Up-to-date list of Members of the Trustee Board.

c) Certified copy of Deed of Trust.

• Different types of Accounts

The different classes of customers discussed above can open different kinds of deposit accounts. All the deposit accounts have different features & phenomenon.

• Demand deposit: These are the chequeable deposits that is withdrawal able without notice.
• Time deposit: These deposit are not repayable a demand. These are payable after the duration of a certain period that ordinarily varies three months to five years. Rate of interest on these deposits is usually high.

DEPOSIT RATE:

FDR Rates:

5.1.2. Clearing and Bills Department

The main function of this department is to collect instruments on behalf of its customers as agent through clearing House or ODC (outward Bill collection ) and to make payment against the account payee instrument drawn upon that branch , received from clearing house or through IBC ( inward bill collection). This department receives all kinds of account payee instrument from its customer for collection. The instruments are Cheques, Draft, Dividend warrant, etc. If the instrument is drawn upon any bank which is a number of clearinghouse of that area. The Bank collect it through clearing house and if any instrument is drawn upon any bank which is situated out of its clearing or of any branch of the receiving bank, the bank collects it through OBC.

Clearing department receives instruments for two purposes: For collection and for payment purposes from its customer, clearinghouse, and other banks and from other branches of the same bank. According to the above criterion, the instruments, which are received by this department, be classified as under.

• Clearing Instrument:

The instruments which are to be collected or paid through clearing house are called clearing instruments. These instruments are grouped under two heads:

1) Inward clearing instruments

2) Outward clearing instrument.

1) Inward clearing instruments:

The instruments which are subject to collection through clearing house are called inward clearing instrument The instrument that are drawn upon any bank branch with in the clearing are in clouded in this group. These instruments are received from the customers of the bank. They deposit (he instrument in their account.

2) Outward clearing instrument:

The instruments which are received from clearing house for payment purpose in called outward clearing instruments. These instruments are drawn upon PBL’s Branch and deposited in a bank that is situated in the clearing area and also member of the clearing house.

• Inter Branch Instruments:

These instruments are also of two types: –

1) OBC Instrument.

2) IBC Instrument

1) OBC instruments:

The instruments, which are given to any Branch of the prime Bank for collection purpose is called, inter Branch OBC instrument. The operational steps are alike ad receiving for collection purposes against inter Bank OBC. However, here the issuing Bank send one debit advice to the other Branch to debit the payers account of the instruments is honored.

2) IBC instruments:

The instruments, which are received from any Branch of the prime Bank for payment purpose, are grouped under this head. The operational steps are almost same as paying against inter Bank IBC instruments except only one stop. In this case, instead of issuing DD the paying ranch sends a credit advice to the collecting Branch to credit the payee’s account if the instrument is honored.

• Internal Transfer instrument:

The instrument received drawn upon PBL’s Branch by one of is customer and the payee is also its customer, are grouped under this class. In this case, the bank acts both as collecting bank and paying bank.

5.1.3 Remittance Department

The bank gives their customers the facility to remit funds from one place to another. The people who are not customers can also enjoy this facility. In our country banks have a wide network of branches all over the country and remit funds from are place to another through this network. The instruments, which are and to remit funds, are demand draft telegraphic transfer and mail transfer. Now a days very few banks use mail transfer.

• Demand draft (D.D)

Demand draft is the most popular instrument of remitting fund. It is an order to pay money drawn by are Branch of a bank upon another Branch or the same bank for a particular sum of money which is payable to order on demand. A draft cannot be drawn payable to bearer. It is always drawn payable to the order of a named payee.

• Telegraphic Transfer (T.T):

It is the quickest method of remitting fund from one place to another. In this procedure no instrument is sent to the paying Branch. Only message is sent over telephone or telex and the paying Branch makes payment after getting message. Both the Branches during the transaction use a confidential test number.

5.1.4 Cash department

The cash department of a Bank is one of the most sensitive departments. The responsibility of the officers of this department is incredible. Two main function of this department are:

v  To receive cash &

v  To payment cash.

Receiving cash is considered as a liability for the Bank. The Bank is liable to pay its clients, whether he wants to with draw cash from his account. So cash is credited in the bank’s General account and debited in the client’s account. On the other hand whenever cash is payment the Bank’s general A/C is debited as it credited accordingly. All transaction of cash department is posted in computer. There are checking machine in the cash departments to promote the function effectively.

5.1.5 Accounts department

This department recording all kinds of transactions of the Branch, confirming their accuracy and preparing statements are the main function of this department. Now a days under computerized Banking system the job of accounts department became very easy. In computerized account department of PEL, the clean cash statement and supplementary statement on the computer directly prepares party ledger vouchers. The accountant needs not to prepare these manually. The functions of the accounts department can be divided into two parts:

• Daily functions and
• Periodical functions.

6.0 Product, Price, Place & Promotion

In this section, the product and services offered by Prime Bank Ltd. Along with the price is briefly discussed. Besides that, the place of the bank and promotional activities the bank conducts in order to attract consumers are also discussed. These four P’s (Product, Price, Place & Promotion) of Prime Bank Ltd. will depicts how well they are to compete with its competitors.

6.1 Product & Price

The success of the company depends exclusively on the products and services it offers with a reasonable price compared to the competitors. IT is the main source to attract consumers. Banks are operating in the service industry and their business would become successful only they can offer quality services to the customers within an affordable price. The products and services of Prime Bank Limited and the price related to those are as follows:

6.1.1 Deposit Products:

The savings rate in Bangladesh is one of the lowest in the world rate of domestic savings; the rate is 17.78% only. To improve this situation banks are offering attractive savings schemes so that customers are interested in saving money in the bank. The banks are also offering reasonable interest rate on the deposits to attract consumers to save more money for meet their future obligations.

Some major products of Prime Bank Ltd. deposit schemes are as follows:

• CONTRIBUTORY SAVINGS SCHEME (CSS):

This is a savings scheme in which a person gets the opportunity to build up savings by contributing monthly installments and receives an attractive fixed amount at the end of a specified term. It is designed to help the fixed income group of people to save money and to build up funds to improve their quality of life or meet future obligations. The minimum size of monthly installment is Taka 500, 1000, 2000 and onwards with a maximum of taka 25000/- with term of 5 years. PBL pays 10.50% interest on this saving scheme.

• Monthly Benefit Deposit Scheme:

This scheme provides depositors to get a fixed amount of profit every month without interrupting the principal amount for 5 (five) years. The scheme is for minimum Tk 1,00,000/- (one lac) for 5 years with a profit @ Tk 888.33/- & net taxes @ Tk 8.00/- per month.

• Double Benefit Scheme:

This scheme offers depositors to double his/her money with time duration of 7 years. This scheme starts with a minimum of Tk 1,00,000/- to Tk 25,00,000/- with a time frame of 7 years.

• Lakhopati Deposit Scheme:

Prime Bank newly introduces this scheme with great response from the people. This is a savings scheme in which a person gets the opportunity to build up savings by contributing monthly installments and receives an attractive fixed amount at the end of a specified term. It is designed to help the fixed income group of people to save money and to build up funds to improve their quality of life or meet future obligations. The minimum size of monthly installment is Taka 250, 500, 1285, 2400 with the corresponding time frame of 15 years, 10 years, 5 years and 3 years. PBL pays 10.50% interest on this saving scheme.

• Special Deposit Scheme

This is a deposit scheme where an instrument is issued for the full amount payable after a specified period against deposit of a certain amount. The scheme is specially designed to provide for children education, marriage and old age security. It will create good opportunities for attractive investment of provident fund, trust fund, reserve fund / Security fund of institutions and organization. It will also provide opportunities for the wage earners towards profitable investment of their funds.

The salient feature of the scheme are given below:

1. Deposit of Tk. 10000.00 and multiples therefore shall acceptable under the scheme.
2. An instrument shall be issued for 5 years and above up to 10 years term.
3. 3.      Bank will issue order instrument payable to a particular person, organization, firm etc. for an amount payable at maturity as written on the face of the instrument as per the following table:

Amount payable with profit at maturity will vary proportionately as per above table according to the size of initial deposit amount.

• Education Savings Scheme (ESS):

This scheme provided by PBL gives a unique opportunity to the parents to make a future provision for the education expense of their children when they would enter into educational industries, out of the benefit of a small amount of savings with the bank. PBL offers 12.50% of interest rate on this scheme.

• Savings Account:

The bank has savings where the clients can enjoy 6.00% interest rate by maintaining some transaction limitations. The limitations are the client cannot draw more than two cheques in a week period, if they draw they will be excluded from the interest of that month.

• DEPOSIT PRODUCTS:

v Current Account Deposits

v Savings Bank Deposit

v Fixed Deposit

v Remitted Foreign Currency Deposit

v Contributory Savings Scheme

v Monthly Benefit Deposit Scheme

v Education Savings Scheme

v Special Term Deposit Scheme

• Other services:

Prime Bank Limited also offers other accounts regarding the remittance section. These are Foreign Currency Deposit Account, Non Resident Taka Account, Non Resident Currency Deposit Account and Multi Currency account. These accounts also provide attractive interest rates.

Among the deposit products, most of them are not effective anymore because of the huge deposit of the bank, which carries a higher cost.

• OTHER PRODUCTS AND SERVICES:

v Online Banking Service

v SWIFT Service

v Letter of Credit Delivery Service

v Locker Service

6.1.2 Loan Product:

There are several loan products offered by Prime Bank Ltd. The loan and advances is mainly of two types, General Loan and Consumer Credit Scheme. The general loans includes both industrial and individual loan. Popular loan products are briefly discussed below:

• General Loan Schemes:

This type of loan is classified into individual and industrial loans. In case of industrial loan, there are again four types, short-term loan, term loans, import finance and export finance. According to the maturity, the loans can be classified as short-term, medium term and long term loan as well.

• Consumer Credit Scheme (CCS):

In order to provide financial assistance to the limited income group of people, this scheme is beneficiary. The limited income group of people can raise their standard of living by accruing domestic durable products, for example, TV, freezer, computer, motor vehicle etc. The amount of credit determined in such a manner that the monthly installment does not exceed 50% of the disposable income of the customer. Generally the time period of this CCS loan are two years times with an interest rate of 15%; but in cases it can be changed in the interest of the bank.

• Lease Financing:

It is one of the convenient long-term sources of acquiring capital machinery and equipment, where a client is given the opportunity to have a right to use an asset, for an agreed period of time against the payment of rent. The major advantage it has is to use an asset without buying it. It is suitable for the firms who want to acquire capital machine, equipment, automobiles, etc. The lessee has to pay monthly rental in advance starting from the date of execution till the end of lease term.

• Small and Medium Enterprise:

It is a scheme offered by PBL to provide credit facilities to small and medium size entrepreneurs located in the urban and sub-urban areas to encourage new and educated young entrepreneurs to undertake productive ventures, to assist them to take part in the economic activities etc. The loan ceiling is taka 2.5 lac for small enterprise; and taka 75 lac for medium enterprise. Interest rate charged is around 15%.

• House Building Loan Scheme:

These loans are allowed to individuals or enterprises for construction of house or business premises. The amount is repayable by monthly installments within a specific period of time. It is known as house building loan-general. For the bank employees, loans are allowed to purchase or construction of house known as house building loan-staff.

• Hire Purchase:

Hire purchase is a type of installment credit under which the Hire Purchase agrees to take the goods on hire at a stated rental, which is inclusive of the repayment of Principal as well as interest for adjustment of the loan within a specified period.

• Advance against Share:

In order to contribute to the development of the Capital Market of the country, Prime Bank Limited extends credit facilities against pledge of shares to individuals as well as to the Member of Dhaka Stock Exchange (DSE) & Chittagong Stock Exchange (CSE).

• LOAN PRODUCTS:

v General Loan Scheme

v Consumer Credit Scheme

v Hire Purchase

v Lease Finance

v HouseBuilding Loan / Apartment Loan Scheme

v Advance against Shares

v Credit Card

6.2 Place:

The location of the organization plays a significant role in how the organization is performing. Before setting a location, the organization should consider some important factors in mind, especially the accessibility of the location, target market, transportation facility, business prospects etc.

In case of Prime Bank Ltd. the Head Office is located in the commercial area. This is very suitable place for business and also has a good transportation facility. The whole area is business oriented to capture the target market. Lots of industries and organization are located in the commercial area, so it is not too hard to attract clients. So the head office of the bank has a unique location to welcome more and more people to enjoy the better service of Prime bank Limited.

Motijhell Branch is Located at the middle of the  Motijhell  Just after the four-road connection of Green road of Dhaka city. This area also offers many business houses, specially furniture stores, apartment builders, engineering consortiums, IT service providers, Hospitals, Universities, big shopping markets and lots of Higher and Middle higher income group of people. Especially the branch offers both motor and rickshaw communication to it’s clients which is very convenient for their banking. More over, there are only few reputed banks competing in this area; so it is easy to attract more potential clients to the branch. Also this new branch has a modern decoration that people take pleasure doing banking transactions. So, the place selection of the Prime Bank Limited,  Motijhell Branch is quite successful.

6.3 Promotion:

A broad range of products with attractive price and suitable location is not enough for a business to survive. It is very important to make the people aware about the existence and operation of the organization. This is why promotion activity is vital. Prime Bank Ltd. is engaged in carious kinds of promotional activities. From time to time PBL sponsors sports tournament in national level. The bank advertises on newspapers, TV, Billboards, etc. It is also participates in social activities, for example the bank donates big fund to meet the natural calamities like flood, cyclone and draught. PBL encourages CNG conversion to the motor vehicle under direct supervision of USAID aiming at making Dhaka city as “Green Dhaka, Clean Dhaka” by the year 2007. These promotions are contributing the society for a better tomorrow; creating great ties between the consumers and the bank.

7.0 SWOT Analysis:

SWOT analysis enables an organization to have a comprehensive insight about its current position in the industry compared to the competitors. It provides the organization a scope to strategically improve its position in the market. Here, the internal strength and weakness of Prime Bank Limited as well as the external opportunities and threats are discussed.

7.1 Strength:

• Capital Adequacy:

Prime Bank Ltd. is maintaining a strong capital base. By the end of 31 December 2009, capital adequacy ratio of the bank was 14.71% that is well above the stipulated requirements of 9%.  The bank had a target to have tk. 1000 million of capital fund by the year 2010, whereas it already reached capital fund of almost tk. 2000 million by 2003, positioning the bank as one of the strong capital based bank of Bangladesh. The bank has now also increased its authorized capital to 4000 million to its expansion programs.

• Customer Service:

PBL has a very good relationship with its customers. The bank believes in maintaining personal relationship with the clients. One of the major goals of the bank is to build long term relationship with the customer and to create value for them. To maintain this relationship, PBL sometimes waiver high charges for those valued clients who are linked with the bank for a long period of time. The bank recently has approximately more than 1,54,000 clients, highest in the private sector commercial banks of our country.

• Liquidity Position:

Liquidity position is a major criterion to measure a bank’s strength. By the end 2009 PBL has a liquid assets of Tk. 74,852 million, the ratio of liquid assets to total was 18%. So, the liquidity risk of the bank is low and makes its position stronger.

• Ø Efficient Administration

Prime Bank Ltd. had an efficient administration. The work is done in a timely and systematic manner for which the efficient administration is responsible. There is close relationship between the employees and management though the chain of command is maintained strictly. Overall, there is a good balance between the administration and the employees.

• Quality of Assets:

The asset of PBL is of very high quality. The major portion of this asset is loan and advances. The default rate is less than 2.00% whereas the average default rate in Bangladesh is 30%. This proves that the credit risk of PBL is very low.

7.2 Weakness

• Technology:

One of the major weaknesses of Prime Bank Ltd. is the technology used by the bank. With the change of time, technological advancement is essential to survive in the competition. Hence, PBL is lagging far behind in this area. Most of the branches are not well equipped. There are not enough computers, telephones and faxes machine in the branches which often slower the pace of work. PBL is the pioneer of on banking in Bangladesh but unfortunately enough that this facility is lagging behind in the present scenario of banking as others offer more sophisticated online banking.

• Remunerations:

The pay scale of the employees in PBL is not competitive compared to other private banks of Bangladesh. The employees of the PBL get compensation of around 40% of what other private banks, for example Dhaka Bank, Southeast Bank etc. offer to their employees. This creates dissatisfaction among the employees that carries the risk of rise in employee turnover rate. It also create job switch tendency among the PBL employees.

• Ø Promotion:

When an employee gets a promotion to the next level, he/she gets more compensation. PBL is regular in giving promotion, but the employees get late effect of this promotion. Often there is a long gap, for example a six month gap in getting the effect.

• Training:

PBL has its own training institute PBTI (Prime Bank Training Institute) to strengthen the capabilities of human resources. However, it is not always possible to give through training. Especially, there is a lack of specific training for specific jobs. As a result, the employee has to learn things from the job by doing it practically

7.3 Opportunity

• ATM Facility:

Currently Prime Bank Ltd. does not have ATM facility. Many other leading competitors have ATM service that provides 24 Hours limited cash transaction to their clients. This service is highly preferred by the clients, as they have to wait less time in ATM booth. So, PBL has good opportunity to install ATM service to meet the greater service demand of consumers.

• Branch Expansion:

Prime Bank is growing quickly all over the country. Besides expanding in the urban areas, PBL has prospects to open more branches in sub-urban areas, which will eventually enhance the government effort at receiving rural economy as well as reaching more people by better service.

• Training Facility:

Prime Bank Training institute (PBTI) is supporting the bank by offering in house training courses, workshops and seminars. As the bank has its own training institute to enhance the capability of human resources, PBL can use this opportunity to train their employees in specific areas and create specialized and expert people for the bank.

• Banking Software:

Prime Bank is still lagging behind in upgrading their software system. The bank has the prospect to select high quality banking software which will make the banking operations easier and smooth as providing quality service is one of the major goals of Prime Bank Limited.

7.4 Threats

• Level of Competition:

Competition is always a major threat for any organization. In recent years, the number of private bank is increasing. These banks always pose a threat for others by coming up with new product line, innovative technology, quality services, etc. thus the level of competition rises and creates threat for prime bank limited.

• Technological Advancement:

With time, technology is getting advanced and most of the private banks are upgrading their operating system to survive in the industry. PBL is lagging behind in this department and still mostly dependent on manual work rather than technology. Advancement of technology is posing great threat for PBL.

• Compensation Package:

Compared to other private banks of Bangladesh, the compensation of PBL is not so attractive. Though the employee of PBL gets fair financial and other benefits, the base pay is not sufficient. This poses a lot of threat on the employees of switching to other banks from PBL.

• Political Unrest:

The political unrest as well as the law and order situation of Bangladesh is always a threat for banking industry. Especially, the events of recent years, the corruption level of our country, the poor infrastructure are affecting the national economy. The current economic situation is very likely to get worse further. In this case, the whole banking industry is facing a big threat.

8.0             PEST ANALYSIS

Every organization operates in a larger macro environment of forces that shape opportunities and pose threats to the company. The four major forces, that is, Political, Economic, Social and Technological forces that affect the banks and the banking industry as a whole are discussed below.

8.1 POLITICAL FROCES

The political forces include laws, government agencies and pressure groups that influence and limit various organizations and individuals in a given society. There are lots of rules and regulations created by the government for several reasons, first of all to protect companies from each other, to protect consumers from unfair business practices and to protect the interest of the society.

Political forces heavily affect the banking industry. The political situation is not stable in this country. Whenever a new Government comes, there is a change in interest rates of deposit, loans, etc. The tax situation is affected. There are new policies regarding Export, Import and other activities that might affect the industry negatively. For example, Bangladesh Bank has directed other banks to reduce lending price to encourage industrialization. The SLR has been reduced from 16% to 12%. This has created a serious threat for the lending business of the banks. In another case, the corporate income tax has been increased from 43% to 45% that affected the profit of the banking industry.

8.2 Economic forces

Economic forces are the factors the affect the consumer buying power and spending patterns, Some countries have subsistence economies where the consumers consume most of their own agricultural and industrial output. At the other extreme there are industrial economies that constitute rich markets for many different kinds of goods.

Banking industry is directly related to the economic factors, especially the consumer spending and savings pattern. Spending is very deeply related to income. As family income rises, the percentage spent on food declines, percentage spent on housing remains almost constant and savings increase. That means with a strong economy in the country, the banking industry can expect the customers to deposit more.

If we look at the Bangladesh Economy, it performed fair enough mainly due to contribution in the agriculture sector. The real GDP grew by 5.3 in 2003 compared to 4.4% in 22. There was growth in all the sectors, 3.3% in agriculture, 7.7% in industry, decline in the domestic credit to public sector by 4%, there was in increase in the pro ate sector by 14.9%.

There had been much change in the banking sector due to economic forces. The industry witnessed changes that stabilized wide swings in the cal money market. Bangladesh Bank introduced long dated government bonds distributed by primary dealers. These bondholders can borrow by pledging these instruments. On May 31, 2003, Bangladesh pre-announced rate band for transaction with banks. There is excess liquidity in the banking sector as a whole but investors are discouraged to invest due to lack of security. Because of this reason, the banking industry might have a back push.

8.3   SOCIAL FORCES

These are the forces related of society’s basic values, perceptions, preferences and behavior. People grow up in a particular society that shapes their basic belief and behavior pattern. These forces affect the survival and success of an industry.

As banking industry is a service-based industry, it mainly deals with the people coming from various demography of a society. There are differences in the size, density, location, age, gender, race, occupation and other statistics of the human population. As a result, their perception and behavior patterns also vary. So it is a difficult task to deal with different target markets and to handle the social forces. For example, in many societies, there is no culture or trend to save money. In those societies, they’re in no culture or trend to save money. In those societies, it is hard for the banks to operate. Some religious societies might be against the banking business as it gets profit from the interest rates. There could be a behavior pattern among a group of people who are not risk takers. They might not take the risk of investing though they have surplus money. These social phenomenon’s have great impact on the banking industry as a whole.

8.4 TECHNOLOGICL FORCES

It is a common saying that today’s world is a world of technology and only those will survive who can be up-to-date with the technology. Technological forces are those that create new advancement, create innovative products and market opportunities. Technology has released wonders as well as blunders. The attitude of the people depends on whether people are more impressed with its wonders or its blunders.

Like any other industry, technology has deep impact in the banking industry. Using technology, banking has become fast, smooth, less risky and easier, the credit card, banking soft wares has made banking operation much easier. At the same time these technologies pose threat to those competitors who are still left behind. Technology givers and extra advantage to the banks to be ahead of time, so, technological forces might really rule the banking industry real soon.

To operate in the macro economic environment, the banking industry should be careful about these forces and by getting acquainted with these forces, the industry would be able to make it a strength rather than take is as a threat.

9.0 CAMEL FRAMEWORK

CAMEL framework is used widely to determine the performance in banking sector. This involves evaluation of bank under five criteria. After analyzing the position and performance of each category, a bank is ranked. Till the year 2001, Prime Bank Ltd. has been categorized as no.1 rated bank under Capital, Asset, Management, Earnings and Liquidity (CAMEL) rating by Bangladesh Bank and rated as a strong bank. Though the bank came down to 6^th place in recent years, still it is among the first category of the banks in Bangladesh.

9.1 CAPITAL Adequacies

Capital adequacy provides a safety net of depositors and other providers of loan finance against losses that the bank might occur. The banking industry is required to maintain a minimum capital adequacy ratio around 9%. Though the foreign banks are having a capital adequacy ratio above 15% on average, the private banks are also doing well with an average ratio of 10%.

Among these private banks, Prime Bank Ltd. is maintaining a strong capital base with a capital adequacy ratio of 10.88% in 2008. Though this ratio is lower than the previous years (17.5% in 2001 and 12.44 in 2002), the bank is maintaining its capital adequacy position above the industry average. The bank had a target to have Tk. 1000 million of capital fund by the year 2010, whereas it already reached capital fund of almost Tk. 2000 million by 2003, positioning the bank as one of the strong capital based bank of Bangladesh.

9.2             ASSET QUALITY

In order to encourage depositors to deposit money in the bank, it is required for the banks to have good asset quality. That means, the bank should not have too much of bad debts from its borrowers. The asset quality of a bank depends on certain ratio, for example, the net provision of loan losses to total loan, sector wise loan distribution, ratio of classified loan to total loans, etc.

The asset of Prime Bank Ltd. is of good quality. The provision for loan losses to total loan ratio was only 1.39% in 2008. It was below 1% in the previous years. In case of sector wise loan distribution, commercial lending had the highest of 30.46% of the loan and large and medium industries had 21.29% of loan. Agriculture sector was not that much significant for PBL , cause the returns on these loans are lower and risk is higher. In case of classified loan, PBL is maintaining a good position. The ratio of classified loloans to total loans is less than 2%. The default rate of loans is around 1% where the industry average of default rate is around 30%. This proves that Prime Bank Ltd. is able to maintain good quality assets.

9.3 MANAGEMENT EFFICIENCY

Since all banks fall under the service industry thus most of their operations and functions require more involvement of its employees. Therefore, it is very important for banks to have an efficient management body. Sound management is the most important pre-requisite for the strength and growth of any financial institution. It is difficult to draw any conclusion regarding management soundness on the basis of monetary indicators, as characteristics of good management are rather qualitative in nature. Nevertheless, the performance of the management should be reflected in the overall financial strength and capability of the bank, therefore the total operating expense to total operating revenue ratio, the employee productivity ratio, are generally used to measure management soundness, for example a high and increasing expenditure to income ratio could be interpreted as operating inefficiency that could be due to flaws in management.

In Prime Bank Ltd., the management is quite efficient. The operating efficiency ratio was 37.10% in 2003. this ratio is slightly increased from the previous years (31.27% in 2001and 37.48% in 2002). The operating expense to total expense ratio was 29354% in 2003 and 29.82% in 2002. So the management is operating quite smoothly.

9.4 EARNINGS & PROFTABILITY

ROA (Return on Asset), ROE (return of Equity) and LNIM (Net Interest Margin) are widely used indicators that measure the profitability and earnings of a bank. A strong earnings and profitability profile of a bank reflects its ability to support present and future operations. More specifically, this determines the capacity to absorb losses by building an adeq1uate capital base, finance its expansion and pay adequate dividends to its shareholders.

The earnings and profitability ratios of Prime Bank Ltd. are falling from the previous year; however, it is still high comparing to the other banks of the industry. The ROA of PBL was 1.55% in 2003 (2.086% in 2002 and 3.069 in 2001). The other private banks in the industry are having around 1 to 2% of ROA. In case of ROE, PBL had 21.07% in 2003 whereas most of the other private banks have ROE of 20 to 25%. On the other hand, PBL had a Net Interest Margin of 3.10% in 2003 that is fairly appreciable. It is possible to conclude that in case of earnings, the performance of PBL is average.

9.5 LIQUIDITY

Liquidity is a measure of how quickly the bank can meet its financial obligations. Shortfall of cash may drag down the bank to borrow at a huge rate. At the same time the excess liquid asset will keep banks away from earning enough. Therefore banks make a trade-off to maximize return while minimizing risks. Banks try to keep this part of the asset as low as possible so that they meet the Central Bank requirement and make a safeguard against liquidity shortfall and at the same time try to take all the opportunity of the investment and earning with its assets.

By the end of 2009, PBL had liquid assets of Tk. 4584.45 million; the ratio of liquid asset to total asset was 18%. So, the liquidity risk of the bank is low and it makes its position stronger.

In conclusion, it can be said that, Prime Bank Ltd. is performing well enough in CAMEL framework. However, the bank should keep in mind that, its performance under CAMEL framework has been diminishing from the previous years that pushed it down to the 6^th position from no. 1 position. Though the bank is still performing fairly and maintaining 1^st position at the rating.

9.0             QUESTIONER FINDINGS & INTERPRETATION

Evaluation of Customer Service quality of Prime Bank Ltd. In Case of Motijheel  Branch

Dear Sir/Madam,

Thank you for fill in the questionnaire. The answer you provide will keep strictly confidential. Your response will be used only for academic purposes.

Gender:       Male       Female   Age:      Below 30       31-40        41-50        51-60

61+

Education Level:         SSC       HSC       Graduation      Post Graduation

Monthly Average Income:      20,000 or Less         21,000 – 30,000      31,000 – 40,000

41,000 – 50,000      51,000 – 60,000        61,000 +0

1. What is your opinion about the banking environment of Prime Bank Ltd.?

2. Employees are always ready to help or cooperate the customers. Do you agree?

3. How do the employees behave with the customers?

4. Do you think customers are getting more facilities here in comparison with other       banks?

1. Do you think Prime Bank Ltd. is using modern technical equipment?

6.  Do Prime Bank needs to improve service like ATM  machines, Credit card etc.?

1. Do you think prompt service in the cash section required?

1. Do you think Prime Bank should open more branches in DhakaCity as well as the other cities of the countries?

11.0 Comparison of Prime Bank Limited with other   Competitive commercial Bank

In this case I have selected Standard Chartered Bank as this bank have a better perception of the consumers as better and fast service providing bank. The comparison are shown below:

12.0 RECOMMENDATIONS

As per earnest observation some suggestions for the improvements of the situation are given below:

q    To attract more clients Prime Bank Ltd.  needs to create a new marketing strategy, which will increases the total export import business.

q    Banking is a service-oriented marketing. Its business profit depends on its service quality. That’s why the authority always should be aware about their service quality.

q    Bank should offer more facilities to the customers such as ATM machine service.

q    Now a day’s world is going very fast. Now most of the banks open online customer service system. So in order to compete in the world marketing they should adopt real time online banking system in every branch.

q    Effective and efficient initiatives are necessary to cover the default loans.

q    Attractive incentive package for the exporter will help to increase the export and according it will diminish the balance of payment gap of Prime Bank ltd.

q    Long-term training very much required for the foreign exchange official.

q    Computerized banking system and latest communication devised are the most important elements for this century. So, for the sound and stable operation, PRIME BANK LTD.  has no alternative but the modernization.

q    As soon as possible the bank should state more branches in Dhaka city as well as other cities of the country.

q    In general banking department it is necessary to implement modern banking process instead of traditional system. It should be more computerized.

q    Data based networking is the most modern technology to transfer data form branch to branch or branch to head office and vice versa. So they must use this technology in information Technology (IT) dependent of the Bank.

q    Improvements of salary and compensation are much needed to motivate the employees and change the tendencies of job switch.

13.0 Conclusion

Modern Commercial Banking is exacting business. The reward are modest, the penalties for bad looking are enormous. And commercial banks are great monetary institutions, important to the general welfare of the economy more than any other financial institution. It has a vastly sobering and exacting responsibility.

Prime Bank limited is a new generation Bank. It is committed to provide high quality financial services / products to contribute to the growth of G.D.P. of the country through stimulating trade & commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, poverty alleviation, raising standard of living of limited income group and overall sustainable socio-economic development of the country.

Prime Bank limited is operating branches on both conventional interests based banking and Islamic Shariah principle based banking. The Islamic banking operations arc completely separate from the conventional Banking. Without banks co-operation, it is not possible to run any business or production activity in this age.

The work experience on Prime Bank Limited, Motijheel Branch, for three months internship programs was very interesting for me. All officers were nice to me and very frank to me. At the very beginning I thought how I would spend my time from 10 a. m. to 6 p.m. in the bank? But, within in few days I adopted myself with the office environment because the officers were very friendly. I have worked especially General Banking division and other divisions, but I enjoyed working with accounts opening department most. In other departments the job was same (preparing bills, vouchers etc) for everyday, but in account opening department it was dynamic (opening new account, meeting with people etc). I had no schedule time for some important departments like the cash department and the computer department. I gathered information on those departments through verbal consultation with officer of those departments.

The job condition and job environment is very good of Prime Bank Limited, Motijheel Branch. At the same time, the service, which the branch provides to their clients, is also very prompt and quality one compare to other private or foreign banks. So Prime Bank is the bank, which will survive in the banking sector of the world on the slogan “Bank with a difference”.