Investment Policies of Bangladesh Commerce Bank

General objective of this report is to analysis Investment policies and analysis of competitive advantage by Bangladesh Commerce Bank Limited. Other objectives are evaluate product and Service procedures and evaluate the performance of the bank. Report also observe the working environment in commercial banks and discuss existing banker customer relationship. Finally analysis the overall functioning of Bangladesh Commerce Bank Limited.

Objectives of the report

Objectives

The objective of the analysis is to evaluate the procedure of “Investment policy and product & Service” of Bank Asia Limited. There are also many objectives. The primary objective of this report is to comply with the requirement of the Bangladesh Commerce Bank Limited. But the objective behind this study is something broader. Objectives of study are summarized in the following manner:

• To evaluate product & Service procedures.
• To evaluate the performance of the bank.
• To apply theoretical knowledge in the practical field.
• To make bridge between the theories and practical procedures of banking day-to-day operations.
• To gain practical knowledge by working in different desks of zigatola branch office of Bangladesh Commerce Bank Ltd.
• To observe the working environment in commercial banks.
• To study existing banker-customer relationship.
• To know the overall functioning of Bangladesh Commerce Bank Limited.
• To have some practical exposures that will be helpful for my future career.

Specific Objectives

• To submit a report, for the fulfillment of my BBA program.
• Is to find out the “Investment policy and analysis of competitive advantage by Bangladesh Commerce Bank Ltd.”

Broad Objectives

• Together comprehensive knowledge on total banking functions.
• To identify the factors contributing to the attractive & operative performance of the local branch of the bank.
• To make a study of the facts in order to arrive at certain conclusion about product & Service system.
• Critically analyze the functions and the operations of each level of the organization of Bangladesh Commerce Bank Limited.

Historical Background of BCBL

Bangladesh Commerce Bank Ltd incorporated in Bangladesh on 1 June 1998 as a banking company, it started banking operations on 16 September 1999 with an authorized and paid up capital of Tk 2,000 million and Tk 920 million respectively. The share of the government of Bangladesh in the bank’s paid up capital is Tk 300 million while depositors of the former Bangladesh Commerce and Investment Limited (BCIL) contributed Tk 520 million. The balance of Tk 100 million is to be subscribed by banks and financial institutions under guidance and supervision by Bangladesh bank

The former BCIL was set up on 27 January 1986 as a non-bank financial institution. It continued its business till April 1992. Consequent upon its liquidity crisis, Bangladesh Bank suspended its operations in April 1992. As a result, the investors of the company suffered a lot and its employees became jobless. Both the depositors and the jobless employees launched a movement for reopening the company in some form or other and demanded return of their money and dues. With a view to safeguarding the interest of the depositors, employees and the general public, and to protecting the banking system itself from contagious effects of bank failures, the government of Bangladesh established the Bangladesh Commerce Bank on the ashes of the collapsed BCIL.

Subsequently, the government on 8 February 1998 constituted a 10-member board of directors to organize and transform BCIL into BCBL and to administer the affairs of the bank. The 24 branches of BCIL were reopened as full-fledged branches of BCBL. The broad objective of the bank is to carry out all kinds of commercial banking activities and to respond quickly to the changing demands for modern banking products.

In its three months of operations in 1999 starting on 16 September and ending on 31 December, BCBL had mobilized deposits of Tk 83 million. To augment its deposit collection further, BCBL introduced a number of deposit schemes suited to the needs of all classes of people in society. These schemes include a) Monthly Profit Based Deposit Scheme, b) Pension Saving Scheme, c) Interest Free Deposit and Loan Scheme, d) Consumers’ Credit Scheme, and e) Money Plantation Against Saving Certificates. It has also offered competitive rates of interest on its deposit holdings, which varied between 7.75% and 12% since the inception of its operations through May 2000. Total deposits stood at Tk 1,294.2 million on 31 December 2000, when its gross loans and advances amounted to Tk 1,311 million.

The first priority of the bank in 1999 and 2000 was the recovery of the past loans of the BCIL. It has managed to recover Tk 523.3 million in cash and Tk 1,788 million by adjustment against past liabilities. The bank is overburdened with the liabilities and the non-performing classified loans of BCIL. The bank also suffered losses in the years 1999 and 2000 and was not able to maintain necessary provisions for classified loans. Investment of the bank has increased from Tk 20 million in 1999 to Tk 95 million in 2000, mainly in government treasury bills. Because of the huge stuck up loans inherited from the BCIL, the bank’s credit-deposit ratio stood at 101.30%.

Total assets of BCBL, including the Tk 1,423.99 million of former BCIL stood at Tk 3,763.7 million on 31 December 2000. The bank’s off-balance-sheet reserve was only Tk 95.8 million, a figure which has contributed little to the increase of its asset-mix. In 2000, BCBL maintained liquid assets of Tk 1,052.6, a sum hardly sufficient to meet its accumulated short-term/current obligations. On the other hand, statutory liquid assets of the bank were 15.08% in 2000, which is below the 20% SLR requirement envisaged by Bangladesh Bank. Because BCBL had absorbed huge amount of liabilities and non-performing assets of BCIL, it was not possible for the bank to make net profits during the short period of its existence in the new set-up.

The bank is managed by a 9-member board of directors appointed by the government. A total of 590 officers and other staff work in the head office and the 24 branches of the bank. It has inherited a training institute from BCIL. This institute is being reorganized to provide training to its employees in modern banking services.

Product & Services: Deposit Product

A savings account at BCBL will provide you with healthy returns on your savings at the same time as you help support projects bringing lasting benefits to communities and the environment. Our range of personal savings accounts has been designed to offer something for everyone. So whether you want to invest a lump sum, put by a little every month or you simply want to move your savings to a bank with a uniquely ethical approach, there is a BCBL savings account to suit your needs.

The rates of interest are given below

Special Savings Scheme

Under the special savings scheme against regular deposit of particular amount per month a substantial amount after 5/8/10/12/15 & 20 years will be given. This scheme is popularly known as Deposit Pension Scheme

The Attractive Savings Schemes of BCBL are

• Lakhopati Scheme (LDS)
• Millionaire Scheme (MIDS)
• Kotipati Scheme (KDS)
• Marriage Scheme (MDS)
• Sikha Sanchaya Scheme (ESS)
• Double Benefit (DGDS)
• Triple Benefit (TGDS)

Lakhopati Scheme (LDS)

1. Under this Scheme the amount of Deposit is Tk. 1,260/- & Tk. 460/- gradually for period 5 (Five) & 10 (Ten) years.
2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.
5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.
6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
7. Client would receive the return after one month of depositing the last monthly payment.
8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.
9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.
11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.
12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 10,000/- deposit on the account.
13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.
15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
16. Money laundering prevention act, shall be exercise as per rules of BB.
17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Millionaire Scheme (MIDS)

1. Under this Scheme the amount of Deposit is Tk. 4600/- & Tk. 2170/- gradually for period 10 (Ten) years & 15 (Fifteen) Years.
2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.
5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.
6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
7. Client would receive the return after one month of depositing the last monthly payment.
8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.
9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.
11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.
12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 50,000/- deposit on the account.
13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.
15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
16. Money laundering prevention act, shall be exercise as per rules of BB.
17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Kotipati Scheme (KDS)

1. Under this Scheme the amount of Deposit is Tk. 21,950/- & Tk. 11,100/- gradually for period 15 (Fifteen) Years & 20 (Twenty) Years.
2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.
5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.
6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
7. Client would receive the return after one month of depositing the last monthly payment.
8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.
9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.
11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.
12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 2,50,000/- deposit on the account.
13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.
15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
16. Money laundering prevention act, shall be exercise as per rules of BB.
17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Sikha Sanchaya Scheme (ESS)

1. Under this Scheme the amount of Deposit is Tk. 500/- for period 8 (Eight) & 12 (Twelve) years.
2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.
5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.
6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
7. Client would receive the return after one month of depositing the last monthly payment.
8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.
9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.
11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.
12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 10,000/- deposit on the account.
13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.
15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
16. Money laundering prevention act, shall be exercise as per rules of BB.
17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Marriage Scheme (MDS)

1. Under this Scheme the amount of Deposit is Tk. 1,000/- for period 12 (Twelve) years & 18 (Eighteen) years.
2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.
5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.
6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
7. Client would receive the return after one month of depositing the last monthly payment.
8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.
9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.
11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.
12. After completion of 4 (Four) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 50,000/- deposit on the account.
13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.
15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
16. Money laundering prevention act, shall be exercise as per rules of BB.
17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Double Benefit (TGDS)

1. Minimum Tk. 5,000/- or any multiple of this amount may be deposited to open this DGDS A/C
2. This deposit shall be accepted only for the period of 6 (Six) years. The depositor must maintain a saving or current account with any of the brunches of BCBL.
3. “Deposit Receipt” will be issued to the customer while receiving deposit.
4. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
5. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
6. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
7. Credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank.
8. If the “Deposit Receipt” is lost prevailing terms/condition in force fro issuing a duplicate receipt for term deposit will be applicable for issuing a “Duplicate Receipt”
9. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
10. Money laundering prevention act, shall be exercise as per rules of BB.
11. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
12. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Triple Benefit (TGDS)

1. Minimum Tk. 5,000/- or any multiple of this amount may be deposited to open this TGDS A/C
2. This deposit shall be accepted only for the period of 9 (Nine) years 9 (Nine) months. The depositor must maintain a saving or current account with any of the brunches of BCBL.
3. “Deposit Receipt” will be issued to the customer while receiving deposit.
4. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.
5. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.
6. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.
7. Credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank.
8. If the “Deposit Receipt” is lost prevailing terms/condition in force fro issuing a duplicate receipt for term deposit will be applicable for issuing a “Duplicate Receipt”
9. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.
10. Money laundering prevention act, shall be exercise as per rules of BB.
11. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.
12. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

Product & Services: Loan & advances

Like Deposit Scheme,   BANGLADESH COMMERCE BANK LIMITED have formulated the following Loan Schemes

1. Financing of Trade
2. Term Loan
3. Financing of small and medium Industries
4. Agriculture Loan
5. House Building Loan
6. Financing of Transport
7. Financing of Non-Banking Financial Institute
8. Syndicate/Club Loan
9. Loan against FDR/Loan against Special Scheme
10. Financing of Export-Import
11. Stuff Loan
12. Bill Purchase/Loan against Share
13. CCS
14. Special Credit Scheme for Service holder
15. Credit Scheme for Women entrepreneurs
16. Prime Customer (5.00 crore or higher )

Financing of small and medium Industries

The main thrust of financing is given on small and medium Industries. This is the priority sector of our Bank.

Financing of Trade 

Trade Finance includes CC (Cash Credit), SOD (Secured Overdraft) FO (Financial Obligation) and SOD (Secured Overdraft) RE (Real Estate) working capital. This will help the local trades and Businessmen to expand their trade and business unhindered.

Financing of Import & Export 

All necessary Financing for Import & Export are done by opening L/C, buying documents providing, LIM, PAD, PC and LTR facilities for smooth functioning of foreign Trade.

Micro Credit and Micro Enterprise Scheme 

For poverty alleviation micro credit is provided to poor people without security for their self-sustenance to rehabilitate them in the society

Credit Scheme for Women entrepreneurs

For developing Women entrepreneurship in the country this type of credit is extended to unemployed and skilled women, through which they can transform their micro credit in to small enterprises

Consumers Credit Scheme

Domestic useable items i.e. Computer, Photocopier, Furniture, Washing Machine, Air Cooler, Refrigerator, Sewing Machine, Car, Pressure Cooker etc are financed for comfortable and modern living of the people of limited source of income.

Product & Services: Services

BCBL provides specialized services to its clients-

Capital Market Operation

The Bank operates capital market operation which will include Portfolio Management, Investors Account etc.

Counter for Payment of Bills

Dedicated counters are available at BCBL’s branches to receive the payment of various utility (DESA, Titas, BTCL) bills.

Other Services

• Remit funds from one place to another through DD, TT and MT etc.
• Conduct all kinds of foreign exchange business including issuance of L/C, Travelers’ Cheque etc
• Collect Cheques, Bills, Dividends, Interest on Securities and issue Pay Orders, etc.
• Act as referee for customers.

Investment policy of the Bank with Financial overview

Deposit

At the end of December 2008 the deposit of the Bank was Tk. 678.69. The growth of deposit is 19.43% compared to last year. The Bank has given great stress on procurement of low cost fund including cost free fund for bringing down the average cost of fund.

Loans & Advances

The Loans & advances of the Bank registered an impressive growth during the year 2008. The total loans & advances amounting to Tk. 578.60 Crore. The advance portfolio of the Bank is well diversified and covers funding to a wide spectrum of business and industries including agro-based and agro processing, ship scraping, steel& engineering, paper & paper products chemical, construction, real-estate and loans under consumers, credit schemes, various trading business, service holders loan and women entrepreneurs of the country.

International trade

The international trade constitutes a major business activity conducted by the Bank. The important business of the Bank indicated a significant increase in the year. The import business during the year 2003 reached to Tk. 200.00 crores against Tk. 100.00 crores of the previous year which reflected a growth of 100%. The import business made by the Bank resulted in steady increase of revenues for the bank in spite of the downward trend in international trade. The export business handled by the Bank during the year 2003 was Tk. 210.00 crores compared to Tk. 85 crores in the previous year. The slow growth in export business is due to debacle in geopolitical arena, surrounding economic instability.

Advance Deposit Ratio

If we observe the Ratio on Investment and Deposit, it appears that the MFI uses most of there deposits to investment which refers that the MFI mobilize its resources for the best reproduction.

In 2002 the ratio was 61.00%. It rises to 82.00% in 2006.

Operating Result and Profit

The Bank earned an operating profit of Tk. 7.04 crore during the year before making any provisions. The operating profit of the Bank during the year 2002 was Tk. 3.15 crore and this the Bank attained a growth of 124% in respect of operating profit. Due to having a cumulative loss of Tk. 5.43 crore no provision for income tax has been provided. After keeping a provision for loans & advances amounting to Tk. 2.23 crores the rest amount has been adjusted with cumulative loss which reduced the cumulative loss to Tk. 1.58 crores.

Guarantee Business

 The Bank issued guarantees amounting to Tk. 50.00 crores during the year compared to Tk. 20.00 crores in the previous year registering a growth of 250%. The guarantees were issued in favour of different Govt. authorities, Autonomous bodies, Corporations, Multinational Companies etc. against proper securities on behalf of the clients of the Bank.

Investment

The Investment portfolio of the Bank during the year 2003 was Tk. 14.00 crore against Tk. 6.15 crore in the previous year registering a growth of 133%. The portfolio of investment included Govt. Treasury Bills, Prize Bonds, Share in Public Limited Companies etc. The Bank has always given emphasis on investment of fund in high yield areas and maintains Statutory Liquidity Requirement (SLR) as fixed by Bangladesh Bank.

Bank’s Performance at Glance

BCBL  at a Glance

Table: BCBL’s Performance, 2001-2003, 2008

Product & Services Rival Banks

Deposit Products: Standard Bank Ltd.

SRDP – SBL Regular Deposit Program

SRDP is a special savings plan that allows you to save and a monthly basis and gets a handsome amount at maturity. SRDP Account gives you the convenience of saving regularly in time with your monthly income stream. So, if you want to create a big savings to fulfill your cherished dream SRDP in the right solution.

• To open a SRDP Account all you need is to be over 18 years of age and a Bangladeshi Citizen.
• You can open a SRDP Account within 10 days of the month by filling up a prescribed account opening form at any Branch of Standard Bank Limited.
• You need to open a SRDP Account for 3 (three) or 5 (five) years, i.e. 36 and 60 equal monthly deposits respectively.
• Under the SRDP you can choose between a minimum monthly deposit amount of Tk.300.00 and a maximum amount of Tk.1000.00

Monthly deposit amount and amount receivable after 3/5 years

Flexibilities

• Easy procedure to open SRDP
• Upto 80% loan facility against SRDP deposit.

SRIP – SBL Regular Income Program

SBL Regular Income Program is an income program, which helps you to earn a monthly fixed amount on your deposits at SBL for a period of 3 years.If you are over 18 years of age, a Bangladeshi citizen and an account holder of SBL, you are eligible to open SBL Regular Income Program with our any branch and any time you want. It’s that easy.

• Easy procedure to open SRIP
• Automatic profit transfer to linked account
• Upto 80% loan facility against SRIP deposit.

(DI+) Double Income Plus

Double Income Plus is a 06 (six) years Program. Your deposit doubled plus in 06 (six) Months. Minimum initial deposit for the program is tk from 10,000/- (Ten Thousand) to Tk.25,00,000/- (twenty five lac).

Features of the Product are

To start with the Double Income Plus (DI⁺) deposit program one customer has to put Tk from 10,000/- (Ten Thousand) to Tk.25,00,000/- (twenty five lac) after maturity the deposited Double Plus. If the accounts/deposits are closed/encashed after one year of its opening, interest shall be   allowed on the deposit at prevailing FDR interest rate.

Features & Regulations of the Program

• Deposit range is from 10,000/- (Ten Thousand) to Tk.25, 00,000/- (twenty five lac).
• Term of Deposit 06 (six) years 06.
• Double Plus amount will be paid after completion of the 06 (six) years term.
• Income Tax may be deducted as imposed by the government on the interest amount at the time of maturity/payment.

Special attractions

80% loan is allowed upon the deposit balance instantly. Payment Matrix [(for amount of tk from 10,000/- (Ten Thousand) to Tk.25, 00,000/- (twenty five lac).]

At Maturity is shown below

LSDIP- Life Secured Double Income Program

We know Savings increase Deposit and Deposit creates the opportunity of Investment. The Investment patronizes the establishment of Industry and presents wealthy economy of the country. So, the importance of Savings is vital for the country. Moreover, in personal life savings ensure our future. Out of all uncertainty death is the universal message of truth for all of us. Focusing on that SBL introduced Insurance Covered & life secured a special deposit program for fruitful utilization of its client’s hard earned savings.

Features & Regulations of the Program

• Deposit range is from Tk.1, 00,000.00 (One Lac) to Tk.25, 00,000.00 (Twenty Five Lac)
• Term of Deposit 07 years.
• Double amount will be paid after completion of the 7 years term.
• Saving rate will be allowed for any pre-mature encashment.
• In case of death of the depositor nominee will get double amount of the deposit balance. But it will effect after 12 (twelve) months from the date of account opening.

Special terms of the scheme

• Depositor’s age will be maximum 50 years.
• 40 years above depositors will provide physical fitness certificate from the competent medical authority in case of the deposit amount of Tk.2, 00,000.00 (Two lac) above.
• In all cases depositors will provide a declaration about health fitness in a prescribed form
• Income Tax may be deducted as imposed by the government on the interest amount at the time of maturity/payment.

Special attractions

• In case of death of the depositor nominee will get double amount of the up to date deposit balance.
• 80% loan is allowed upon the deposit balance instantly.

Revised Rate of Interest

Savings Deposit 7.00% & STD Deposit 6.00%

Loan Products: Standard Bank Ltd.

Standard Bank Limited, occupied the leading position in 3rd generation private commercial bank, to explore a new horizon in innovative modern Banking creating an automated computerized environment providing one stop service and prepare itself to face the new challenges of globalization of 21st century.

Bank provides assistance for local and international trade using every mood of finance to the traders, exporters, manufactures, individual etc.

The international trade encompasses a substantial portion of business conducted by the Bank. During the year 2004, the bank has contributed in the national economy after successfully handling of foreign exchange transactions viz. Import, Export (Both local and foreign).

In the wake of recession of business, the government is currently pursuing an accommodative monetary policy through a number of measures such as reduction in Bank rate, reduction in interest rate in government bonds and reduction on SLR requirement, simultaneously adoption of floating exchange rate and open market operation fueling incentives towards private investment with the aim of creating more capital avenues thereby generating more income to add to the GDP of the economy.  In the juncture, it is very tough for a Bank to remain on track of competition to achieve desired goal in international trade. In order to achieve our cherished goal of achieving consumer satisfaction we extend our hand in the following sector:

• Trade Finance
• Small & Medium Business
• House Building loan
• Consumer Credit
• Transport Loan
• International Trade
• Project Financing
• Lease Financing
• Financing for BMRE
• Agricultural loan
• Special finance for non-traditional item
• Syndication Finance

Mood of Finance that we provide 

• Secured Overdraft: For Work Order, General purpose etc.
• Cash Credit (Hypothecation)
• Cash Credit (Pledge)
• Letter of Credit
• Back to Back L/C
• Loan against Trust Receipt
• Loan against Import Merchandise
• Bank Guarantee

Retail Products: Standard Bank Ltd.

Consumer financing products are

• Salary loan scheme
• Car/auto vehicles loan
• House renovation loan
• Household durables loan
• Self employed professional loan
• Land purchase loan
• Marriage loan

Salary loan scheme

This scheme will cover all salaried executives/officers having confirmed / permanent job in any of the following organizations:

• Government Organizations
• Semi Government & autonomous bodies
• Banks, well-established and reputed insurance companies and any other   alike financial institutions.
• Multinational companies, Large NGOs, Aid Agencies, UN Bodies.
• Large Private organization having corporate structure.
• Teachers of reputed Universities, Colleges & Schools.
• Hospitals, Pathology Labs, Air lines, 5 Star Hotel & Restaurants.
• Length of service: Minimum 2 (two) years for type A,B,C
• Minimum Monthly Salary: TK. 20,000 (Twenty Thousand) Gross.
• Loan limit: ranges up to 2.00 Lac but not exceeding 3 (three) times of gross salary
• All other conditions as stated in serial 1 to 13 to be followed.

Auto loan (car, auto-rickshaw, micro-bus, taxi, pick-up van

Features

• Loan amount ranges from Tk. 1.00 Lac to 10.00 Lac
• Debt equity ratio 60:40.( Bank contribution 60% & Client 40%)
• Repayment tenure12, 24,36,48 or60 months.
• Loan amount excludes insurance, Vat, registration etc.
• Option of pre-paying after a minimum of 6 months from loan disbursement.
• The car /auto will be registered in joint name where in Standard Bank Will be the first party. Customer will bear the insurance charges.
• All other conditions as stated in serial 1 to 13 to be followed.

Self employed professional loan

• Self employed professional Loan is a loan facility offered by the Retail Banking Division to facilitate the registered Doctors, Dentists, Pathologists, Engineers, Architects ,Scientists, Chartered accountants who are salaried as well as self employed.
• Minimum of 3 years continuos service experience.(Both salaried & self employed)
• Age-30 years to 57 years.
• Monthly Income- Tk. 15,000/- gross.( Minimum).
• Maximum Limit TK. 5.00 Lac.
• Maximum loan upto 10 times of gross salary or net income of self-employed.
• All other conditions as stated in serial 1 to 13 to be followed.

Marriage loan

Marriage Loan is a personal loan facility offered to executives/officers intends to marry to incur his/her marriage expenditure or their sons and daughters.

• Limit:  Maximum Tk. 2.00 lac.
• Age:  25 years to 57 years.
• All other conditions as stated in serial 1 to 13 to be followed.

No marriage loan will be provided against 2^nd Marry.

Household durables loan

• Household durable loan is a personal loan offered to salaried /self employed persons to make their wishes true for purchasing computer, Refrigerator, A.C., T.V., Motorcycle, Washing Machine etc.
• All other conditions & eligibility as stated in serial 1 to 13 to be followed.
• Limit: Minimum Tk. 20000/- Maximum Tk. 1.00 Lac
• Product quotation to be obtained.

House renovation loan

• House renovation Loan scheme is a Personal Loan facility offered to salaried/self-employed persons to furnish & renovate their house.
• Limit: Maximum: Tk. 4.00 lac. Debt equity ratio 50:50
• Applicant must be owner of the land & building.
• The house must be situated at Cities.
• Age Limit: 30 years to 60 years.
• All other conditions as stated in serial 1 to 13 to be followed.

Land purchase loan

• Land purchase loan scheme is a personal loan facility offered to salaried / self employed persons to purchase lands in the city areas.
• Limit maximum TK. 10.00 Lac
• Applicant must be purchaser of the land.
• The land will be mortgaged to the Bank as per registration Act.
• Debt equity Ratio 50:50
• All other conditions as stated in serial 1 to 13 to be followed.

Lease Finance

Standard Bank Limited offered Lease Finance facilities to its valued client’s with a view to facilitate client’s to acquire equipments and machineries without investing any fund in spite of paying fixed lease rentals. Fixed lease rentals can be tailored both in terms of amount and timing to the profit and cash flow position of the Lease Holder. At the end of the lease contract the lease assets back to the client with a nominal and depreciated value.

Price: Loan

Services: Standard Bank Ltd.

Standard Bank provide different services

1. Remittance Service
2. Locker Service

Utility Bills collection Services

• T&T Bill Collection
• PDB Electricity Bill
• DESCO Bill Collection
• Rural Electricity Board (REB) Bill Collection

Education Savings Scheme

The educational expenses particularly the expenses for higher education are sharply increasing day by day in our country.  Sometimes, the children are deprived of getting the desired level of education because of the inability of the parents to meet their educational expenses. But the parents would not feel any difficulty to defray such expenses if a proper financial planning is made much ahead of time.

Moreover, we are receiving demands from the Islamic minded people of our country for an attractive Savings Scheme on the basis of Islamic Sariah so as to encourage them to save in Islamic way for education of their children.

With this end in view, Prime Bank Limited has introduced a Savings Scheme entitled “Education Savings Scheme” in accordance with the principles of Islamic Sariah i.e., on the basis of profit and loss sharing. The scheme provides a unique opportunity to the parents to make a future provision for the educational expenses of their children when they enter into Schools, Colleges and Universities out of the benefit of a small amount of savings with the Bank at an opportune moment.

The salient features of the Scheme are given below-

• The Scheme shall be implemented through all our branches, though it is specially designed for Islamic Banking branches.
• Deposit of Tk. 50,000/- and multiples thereof but maximum limit of Tk. 5, 00,000/- at a time will be acceptable under the Scheme.
• A specially designed Receipt shall be issued for the deposit under the Scheme in the same manner as issued in case of FDR. Branches shall use the ESS receipts that used for existing scheme.
• The instrument shall be issued for a period of 5 years term.
• On maturity a lump sum amount of Tk. 85,382/- shall be payable or education allowance @ Tk. 1,854/- per month per Tk. 50,000/- shall be payable on the basis of deposit amount for next 5 years starting from the completion of the term as per following table. Income Tax @10% on interest may be deducted at source at the time of payment of lump sum amount

• To avail the monthly allowances the depositor is required to surrender the savings instrument to the Bank duly discharged with a written instruction to the Bank to pay the installments to his ward on monthly installment basis as stipulated in the scheme.
• Separate Application form specially designed for the purpose shall be obtained duly filled in and signed by the depositor.
• Photograph of the Nominee and Ultimate Beneficiary, if any, duly attested by the depositor, shall be obtained at the time of opening the account.

Normally no withdrawal will be allowed before maturity. But if any depositor intends to withdraw his/her deposit before maturity, the following rules will be applicable:

• No benefit including interest shall be allowed for pre-mature encashment within one year.
• If the accounts/deposits are closed/encashed after one year of its opening, benefit shall be allowed on the deposit at normal Savings Deposit rate.
• The instrument will be acceptable as collateral security against any investment subject to registering lien with the issuing Branch.
• In case of death of the depositor, the amount of instrument will be paid to the nominee or, in the absence of a nominee, to the legal heirs of the depositor on production of succession certificate.
• But if the nominee after the demise of the depositor intends to continue the deposit to enjoy the monthly educational allowance for five years, as admissible under the rules of the scheme, the receipt should be surrendered to the Bank on maturity duly discharged by the nominee and duly authenticated by the legal guardian.

Services: Prime Bank Ltd.

Master Car

Prime Bank Limited obtained Principal Membership of Master-Card International in the month of May 1999. Within a period of 6 months, the bank successfully launched Master Card-Credit Card which created a new dimension in its customer service and consumer financing.

The Special feature of the Prime Bank Master Card is that its bears the card holder’s photo on the card, which is the first of its kind in Bangladesh and adds security against misuse. Prime Bank Limited issues 4 types of cards. These are Gold Local & International and Silver Local & International. Local cards can be used in Bangladesh only.

One Stop Utility Services Scheme

Like any other country of the world, the people living in the urban areas of our country lead a very busy life. Time is very valuable to them. Despite this, they are to waste their valuable time at the counter of different Banks and other Institutions for payment of their monthly bills of different utility services like Electricity, Telephone, Water, Gas etc. They, as such, face enormous difficulties for payment of their monthly bills in time. Such inconveniences of the urban people can be removed by making an arrangement to collect all the bills of various utility services at One Point

Scope of Services

With this end in view, Prime Bank Limited has introduced a Scheme entitled “ONE STOP UTILITY SERVICES SCHEME”. The scheme is designed to provide all the required services to the customer in making payment of their following bills on their behalf from the counter of the Bank:

• To pay Electricity Bills
• Cash deposit in his/her account at any branch of the Bank irrespective of location.
• Cash deposit in other’s account at any branch of the Bank irrespective of location.
• Transfer of money from his/her account with any branch of the Bank.

Any amount can be deposited or transferred under Prime Line. In the system, however, at present there is a limit for cash withdrawal through bearer or by account holder himself.

Online Branch Banking Service

ONLINE BRANCH BANKING SERVICE is designed to serve its valued clients.  Under this system, you shall be able to do the following type of transactions:

• Cash withdrawal from your account at any branch of the Bank.
• Deposit in your account at any Branch of the Bank.
• Transfer of money from your account to any other account with any Branch of the Bank.

Competitive Analysis

Product & Services

In case of Deposit product/scheme BCBL are not diversifying their product/special scheme to the client who are belong to various social ground/culture/group etc. The competitive banks innovating product to attract the new customers as well as to satisfy existing client. And there a huge opportunity for BCBL to launch new featured product to attract more customer.

In our country most of the Bank providing Consumer Credit, and the approximate recovery rate is more or less 98% from which a Bank can earn a huge return. But at present BCBL not operating in that section and need to take that point in a great consideration.

Additionally on the ground of services area BCBL are on back footed comparing to other bank. BCBL providing only general services. But today customer needs are growing enormously. So BCBL needs to expand its service area like Credit Card and ATM Card and online banking operations for clients, Merchant Banking etc.

BCBL are on Back foot compare to other Bank on following factor-

1. Retail banking
2. Introduce special corporate scheme
3. ATM
4. Credit card and debit card system
5. Online Banking
6. Merchant banking

Opportunity should pick up by BCBL

• Opportunity in retail banking lies in the fact that the country’s increased population is gradually learning to adopt consumer finance. The bulk of our population is middle class. Different types of retail lending products have great appeal to this class. So a wide variety of retail lending products has a very large and easily pregnable market.
• A large number of private banks operating into the market in the recent time. In this competitive environment BCBL must expand its product line to enhance its sustainable competitive advantage. In that product line, they can introduce the ATM to compete with the local and the foreign bank. They can introduce credit card and debit card system for their potential customer.
• In order to reduce the business risk, BCBL has to expand their business portfolio. The management can consider options of starting merchant banking or diversify into leasing and insurance sector.
• The activity in the secondary financial market has direct impact on the primary financial market. Banks operate in the primary financial market. Investment in the secondary market governs the national economic activity. Activity in the national economy controls the business of the bank.
• In addition of those things, BCBL can introduce special corporate scheme for the corporate customer or officer who have an income level higher from the service holder. At the same time, they can introduce scheme or loan for various service holders. And the scheme should be separate according to the professions, such as engineers, lawyers, doctors etc.

Future Prospect

Amid many challenges, adverse economic conditions and market scenario during the year, the Bank maintained its growth trend through the indicators like, profitability, deposit mobilization, asset creation and profitability, deposit mobilization, asset creation and network expansion. Basing on convincing reasons, we strongly believe that in the coming years also, the Bank strongly believes that in the coming years also, the Bank would be able to attain its earning capacity at an accelerated growth rate.

Bank is also marking a headway for introduction of Credit Card and ATM Card and online banking operations for clients, bank intends to enter into agreement with reputed Exchange Companies in USA, UK and UAE for safe and steady flow of foreign remittances into the country from Bangladesh expatriated working at those places.

We can safely say that we have well positioned ourselves in the banking arena of Bangladesh with diversified products and financial services to seize the opportunities. New custom-friendly products are being evolved in the days to come.

Recommendation

The banks are actually service organizations. The main objectives of the world famous and successful banking organizations are to making of profit through addressing the clients time to time with new pieces of service instruments. However my little experience earned through this internship program took me to customers varying demands. I had several frank discussions with the clients and officials, which has helped me to know about the aforesaid findings and draw the following recommendation.

• As soon as possible the bank should launch more branches in Dhaka city as well as in other cities in Bangladesh.
• Now a day the world is going vary fast. Now most of the bank provides online services. So that BCBL can take more initiative about that.
• One of the business strategies is promotion. Successful business depend how they can promote their products or services to the customer. In this connection to improve the business status bank should introduce more promotional programs.
• In the total banking system it is necessary to implement modern banking process instead of traditional system. It should be more computerized.
• All the foreign banks and other private commercial bank have Customer relation/support/service officer in all branches. They sit in front of branches they solve customers problem, answer inquiry of customers etc. BCBL should appoint customer service officer in all branches.
• BCBL should improve its service quality; otherwise it will fall back of other private commercial bank.
• Use of effective management information systems.
• To deliver quality service top management should try to mitigate the gap between customer’s expectation and employee’s perception.
• Use appropriate techniques in evaluating customer need and convenience professionally
• BCBL needs more effective discipline for all branches.
• It has some inefficient employee, so that management can look after that.

Conclusion

BCBL is one of the problem banks in Bangladesh. And they are doing well gradually. But it has some draw back. I strongly believe that the banking services marketing are different from goods marketing in a significant way. So that, it can improves totally different strategy and tactics. And you can do marketing when you have signified product & Service.

To analyze the BCBL regarding to service & product we found that, to win the customer satisfaction BCBL need to improve their service quality, enhance technological service and launch new product which will generate inflow to the Bank.