Remittance Management System(RMS) of Sonali Bank Limited (Part-3)

4.2 INTRODUCTION:

Remittance Management System is a customized process of sonali Bank Limited. This is totally bank’s own system where foreign remittance  were processed. Basically bank collects the remittance from the 41 exchange houses of different foreign countries. This exchange house collect money from the customers and then send information about the customers to the bank. There are two processes for sending the information to the bank.

1. EFT(Electronic Fund Transfer)
2. SWIFT(Society for worldwide inter bank fund telecommunication)

After receiving this data bank process this data with the help of a customized software which is prepared for process this data. This software is called Remittance Management System (RMS) software. Some high quality, energetic, IT specialist and dynamic young group are engage to ensure the faster and swift service to the customers.

The exchange house collect information from the customer’s regarding their –

PON (Payment Order No) No

Date

Beneficiary Name

Account Name

Amount

Remitter Name

Beneficiary Branch Name etc.

The bank has installed RMS at Wage Earner’s Corporate Branch (WECB), Dahka. The incoming remittances are downloaded and processed at WECB using RMS.

RMS captures various structured remittances from various exchange company and converts it into a unique structure and imposes a security. After capturing the remittances RMS receives an administrative password, a part-1 test key holder password, a part-2 test key holder password and two signatures activation password daily. In RMS there are 20 (Twenty) parameterized signature. We can change the signatory dynamically per day. RMS has automated secured test key module. So RMS generates test key automatically for every amount. Then we accumulate the TRA data of various exchange company and impose three types of security and validate using RMSDataCenter for live outlets.

The RMS module of outlets receives incoming remittance data packet & validate it. After validation the TRA prints automatically with two signatures and a test number. An authorized signatory of outlets sign on TRA as third signature and distribute it. The TRA of distance location is distributed over phone initially and put a seal on TRA as “ credit over phone”.

The outlet collect the credit date of TRA from branches and sends a feedback file to WECB. This feedback is used for Reconciliation and overseas exchange company/Bank.

4.2.1 Features of RMS (Remittance Management System) for Middle East Remittance

• Credit beneficiary Account within 8-24 Hours.
• Auto TRA issue
• Auto Test Number for any amount (Parameterized)
• Auto Signature (Parameterized)
• Highly secured data transmission
• Auto Feed Back
• Data Ready for Reconciliation
• Unique platform for all exchange company
• Consolidated Data packet for all overseas exchange/Bank
• Missing data packet traceable by outlet software
• Single Copy instrument print
• Additional instrument copy prints with “Care Duplicate”.
• Generate all types of required statements
• 100% parameterized Software
• Only local TRA prints at WECB (Wage Earner’s Corp Br)

4.2.2 A short over view of RMS is shown below:

4.2.3 OPENING CEREMONY OF REMITTANCE MANAGEMENT SYSTEM SOFTWARE

4.2.4 LIST OF DIFFERENT EXCHANGE COMPANY:

4.2.5   COMPARATIVE STATEMENT OF NO. OF REMITTANCE IN US DOLLAR FOR THE YEARS 2004– 2007

4.2.6   COUNTRY WISE COMPARATIVE STATEMENT OF FOREIGN REMITTANCE

4.2.7 LIST OF DIFFERENT EXCHANGE COMPANY UNDER RMS

4.2.8   PERFORMANCE ANALYSIS OF DIFFERENT EXCHANGE COMPANY USING RMS

4.2.8.1 Alrajhi Bank Riyadh, K.S.A

4.2.8.2 Bank Al Bilad, K.S.A:

4.2.8.3 ARAB NATIONAL BANK

4.2.8.4 Al Mulla International Ex. Co, Kuwait

4.2.8.5 Gulf Overseas Exchange Co. Oman

4.2.8.6 City International Exchange, Kuwait

4.2.8.7 Oman Exchange Co. Kuwait

4.2.8.8Oman International Exchange, Oman

If we analyze the charts then we see that in 2006 the incoming remittance is lower than 2007, because in 2007 these eight exchange house are working with RMS that is why the flow of remittance is higher than last year.  It reduces the operating costs by 60-80%. It reduces the time limit, in 2006 it takes 2-5 days to deposit money but in 2007 it takes 1-2 days to deposit. Over 58 outlets are engage in RMS. They receives data from Wage Earner,s corp br by e-mail and deposits the money in the beneficiary account in 12-24 hours. Our 1188 branches help the customers to receive these foreign remittance and they are now very much satisfied with this service provide by the bank.

5.1 Problems of Sonali Bank and suggestions:

There are many problems, which affect the smooth and profitable operations of commercial banks. For Sonali Bank as well these problems pose a great threat of carrying out its normal operations smoothly. They are summarized below:

1. Problems in RMS & suggestions:

Problems in RMS are given below:

1. Lack of skilled manpower
2. Lack of Internet facility
3. Lack of management
4. Lack of data processing system
5. Lack of networking
6. Lack of monitoring
7. Lack of reporting
8. Problems in software (it is now in the ongoing process)

Suggestions:

1. Manpower should be trained
2. High speed internet facility should be implemented
3. Proper computerization should be implemented
4. Networking should be improved
5. Established a proper monitoring cell to control the queries of the customers
6. Reporting system should be developed
7. Problems of software should be managed soon.

OTHER PROBLEMS AND SUGGESTION

2.Employment balance:

There are more than 1,000 branches of Sonali Bank all over Bangladesh and outside Bangladesh. But all the branches are not balanced from employment point of view. Some branches of Regional/Principal offices have over employment while some faces the problem of under employment. The balance of the personnel working in each branch has to be set properly depending on the volume of work.

2. CBA(Cumulative Bargaining Agent):

Probably all the government financial institutions face some sort of problems from this organization. Sonali bank is also no exception. CBA has its clutches in almost every affair of banking operations. In employment, promotion, transfer, loan sanction, and overtime and in other affairs too it spreads it unwanted hands to hinder bank’s progress. The scope and sphere of CBA has to be diminished in order to make the organization more profitable.

3.Banking Policy:

Banking policies are generally made at the Ministry of Finance and the policies are scrutinized and implemented by the Bangladesh Bank. Later, the Bangladesh bank enforces these rules and regulation, interest rates, loan disbursement etc. important banking factors for other commercials banks and financial organizations. In many cases, the faulty decision-making and policymaking costs commercial banks dearly. So, before making any sort of drastic decision regarding policymaking the government should at least discuss with the top management of the commercial banks.

4.Weak management:

Sonali bank faces severe lack in strong management policy. Most of the top management are influenced by the government bodies like Bangladesh bank and Ministries. They are not allowed to work freely rather depend heavily on government organizations as such. So in most cases independent decisions do not come from bank officials.

5. Online Banking:

Although Sonali Bank has taken the facility of using computers in maintaining cash and other sections but still it has not taken the full advantage of the modern day wonder of full fledged computer facilities. Most of the private banks are operating 24 hour basis online banking – the sector still ignored by Sonali Bank. All the branches do not maintain their ledgers using computers yet. Money transfer in different modes, wage earners and foreign exchange etc. has not still taken up by the computers till now.

6. Poor Service:

This is basically due to lack of manpower against huge amount of work the bank usually deals with. Sonali bank does what a private bank does, apart from that it also works as the treasury service of the government, utility services, passport services, foreign currency service and virtually all the services that can be done by a bank is done by Sonali Bank. Considering huge amount of work some branches notoriously lag enough manpower against it. It is not the efficiency of the workers that is lagging, but it is the huge amount of work to be done is not met by mere manpower.

7. Lack Of Reconciliation:

The National bank of Pakistan still owes a huge amount of money to Sonali Bank Limited. The money dispute is yet to be solved. In 1971, Sonali Bank Limited the then National bank of Pakistan had balance of about 70 crore rupees with the latter bank. Which was not credited to Sonali bank till date. Today (considering interest and time value of money) the amount would have been too great a value to offset the losses that the bank faces today. If Bangladesh government had taken appropriate diplomatic measures to reconciliate all this money the financial condition of the bank would have been much better than what it seems today.

8. Loan Default:

We have already considered data where we have found the recovery of Sonali Bank’s credit is very poor. There are many reasons behind it and discussed in the ‘Advances section’. The culture of loan default has to be overcome taking appropriate measures.

Sonali bank has to follow the above suggestive measures, so that its performance, deposit disbursement, recovery, investors, importer, goodwill etc. will be increased.

5.2 SWOT ANALYSIS:

Strength:

Largest commercial bank in Bangladesh.

Widely recognized and strong brand name.

Agent of Bangladesh bank.

Qualified and experienced workforce.

Strong liquidity and financial condition.

Strong networks all over in Bangladesh.

Weakness:

Huge amount of bad/debt loan.

Lack motivation of workers.

Service is not up to the mark.

Online banking is not strong.

Absence of teamwork.

Weak branch controlling and monitoring system.

Opportunity:

Investment potentiality in Bangladesh.

Increasing demand of customer finance.

Enormous opportunity in foreign remittance section.

By implementing e-commerce and online banking remarkable

opportunities are created.

Threats:

•   High standard Commercial/Foreign bank as well as private bank.
•   Illegal interference of CBA in banking activities.
•   Highly qualified and experienced bankers leave the bank a very high percentage.
•   Cannot take proper action against bad debtor due to political interference.
•   Increasing percentage of shifting customer loyalty.
•   Low Interest rate compare to private /Foreign banks.

5.3 CONCLUSION:

Sonali bank is by far the biggest bank as well as financial organization of Bangladesh. It has some advantages and disadvantages too. Since it inception in the early 1972 after the independence of Bangladesh it has played a vital role towards the progress of the nation in almost all spheres. The ratio analysis and CAMEL ratings do not reflect good impression of the bank to anybody. But all these analysis do not actually show the true story of the bank. The bank is still not facing losses year after year. But there are some problems with the bank’s performance. Poor government policies regarding financial organizations, poor credit culture in our country and lack of vision by top management, interference of CBA in all banking activities etc. is giving raise to the problems of the bank day after day. Recently, the government has appointed foreign management who would work independently and by taking appropriate measures will try to improve things. The decision is still refuted by many and the results are yet to be proved in near future. So, for the time being we may hope that the private body of top management might take appropriate measures regarding the problems identified and discussed so far and thereby eliminating the problems to take the bank to a more profitable and good service rendering organization to the people of the government republic of Bangladesh.

Some More Parts-

Remittance Management System(RMS) of Sonali Bank Limited (Part-1)

Remittance Management System(RMS) of Sonali Bank Limited (Part-2)

Remittance Management System(RMS) of Sonali Bank Limited (Part-3)