Chapter-1

Background of the Report

After completing my BBA(A.I.S) from DhakaUniversity, I wanted to do Internship in a reputed Bank which would be helpful for my future professional career. I got the opportunity to perform my internship in the National Bank Ltd. I was sent to Mirpur Branch. It was a three months long practical orientation program. This report is originated as the requirement of National Bank Ltd.

Generally by the word “Bank” we can easily understand that the financial institution deals with money. But there are different types of banks like. Central Banks, Commercial Banks. Savings Banks, Investment Banks, Industrial Banks, Cooperative Banks etc. But when we use the term “Bank” without any prefix, or qualification. It refers to the ‘Commercial Banks’. Commercial Banks are the primary contributors to the economy of a coutry. So we can say Commercial banks is a profit-making institution that holds the deposits of individuals & business in checking & savings accounts and then uses these funds to make loans For these people and the government is very much dependent of these banks as the financial intermediary. As, banks are profit-earning concern; they collect deposit at the lowest possible cost and provide loans and advances at higher cost. The differences between two are the profit for the bank.

Banking sector is expanding its hand in different financial events every day, At the same time the banking process is becoming faster, easier and the banking arena is becoming wider. As the demand for better service increases day by day, they are coming with different innovative ideas & products. In order to survive in the competitive field of the banking sector, all banking organizations are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure.

Internship program is essential for every student, especially for the students of Business studies which helps them to know the real life situation. For this reason a student takes the internship program at the last stage of the master’s degree, to launch a career with some practical experience.

Deregulation of interest rates, raising competition from bank and non-bank competitors and continuing development of innovative ways to provide financial services are all contributing to a growing interest in evaluating bank performance. Various groups of individuals are particularly interested in evaluating bank performance.

First, bank shareholders are directly affected by bank performance. Investors take advantage of bank information to develop expectations concerning future performance that can be used to price common shares appropriately.

Second, bank management traditionally is evaluated on the basis of how well the bank performs relative to previous years and compared with similar banks. Hence, employees’ salaries and promotions are frequently tied to the performance of the banks. Bankers also need to be informed the condition of other banks with which they have dealings.

Third, regulators concerned about the safety and soundness of the banking system and the preservation of public confidence, monitor banks using on-site examinations and computer oriented “ early warning systems” to keep track on bank performance.

Fourth, depositors may be interested in how well the bank is doing, especially if they hold deposits in excess of the insured amount and must depend on the bank’s funds for their continued operations.

Fifth, and last, the business community and public should be concerned about their bank’s performance to the extent that their economic prosperity is linked to the success or failure of their bank.

Branches of National Bank Limited in Bangladesh

Introduction:

This report is the outcome of my experience at the bank during the internship period. My twelve weeks at National Bank Limited as an internee had been the most enjoyable time of my life. Doing my internship at one of the leading private financial institutions. I believe I have accumulated an experience unmatched to any other. The work environment of National Bank Limited is very conducive and friendly. The staffs are specialized in their respective fields. Each of them works on their own and there is supervision from the top. The motivation of the staff, I believe comes from the sense of responsibility for his or her work. My overall experience had been very fascination and I believe internship period at national Bank Limited will definitely help me a lot in building my future carrier.

National Bank Limited is the first private sector bank fully owned by Bangladeshi entrepreneurs. It started in 1983 with a paid up capital at Tk.430.27 million. As on 31^st December 2004, the bank’s loans and advance stood at Tk.2284.04 million, which was 2.62 percent higher than 31^st December 2003.

The bank has already occupied strong position among its competitors and has made significant contribution in national economy.

Registered Office                :     18, Dilkusha commercial Area

                                                 Dhaka-1000, Bangladesh

                                                 GPO Box # 3424, Dhaka

Cable                                      :     Nation Bank, Dhaka

Tel: PABX                             :     9563081-5, 7168729-31

Telex                                      :     642791 NBL HO BJ

                                                      642410 NBL HO BJ

E-mail                                    :     nblho@citechco.net

URL/Website                        :     www.nblbd.com

SWIFT                                    :     NBLBBDDH

Six Year’s Performance at a Glance

Table-1

Objective of the study:

The prime objective of this report is to achieve practical knowledge about the credit card & credit division business of National Bank Limited, specific objective are  as follows.

1        To evaluate the performance of the bank.

2        To apply theoretical knowledge in the practical field.

3        To make a bridge between the theories and practical procedures of banking day-to-day operations.

4        To gain practical knowledge by working in different desks of Mirpur Branch of National Bank.

5        To observe the working environment in commercial banks.

6        To study existing banker-customer relationship.

7        To know the overall functioning of National Bank Ltd.

8        To have some practical exposures that will be helpful for my future career.

Methodology:

To make the report more meaningful and presentable, two sources of data and information have been used widely:

Primary sources: The “primary sources” are as follows:

• Face-to-face conversation with the respective officers and staffs of the Banks.
• Informal conversation with the bankers.
• Practical work exposure from the different desks six departments of the branch.
• Study of the relevant files as instructed by the officers concerned.
• Personal diary (that contains every day experience in bank while under going practical orientation).

Secondary sources: The “Secondary sources” of data and information are:

• Annual Reports of National Bank Ltd.
• Annual Report of other banks.
• Periodicals published by Bangladesh Bank.
• Various books, articles, compilations etc. Regarding general banking functions, foreign exchange operations and credit polices.
• Personal diary maintained while undergoing the practical orientation.

Scope of the study:

The National Bank Limited is one of the leading Banks in Bangladesh. The scope of the study is quiet wide as this report has covered the Credit card & Debit card. The report covers the organizational structure, background, functions and the provided facilities by this bank to its clients.

Limitation of the study

There are some limitations in every analysis. I have also faced some problems at the time       analyzing the performance of the bank. The limitations of my research work are as follows:

1. Anything, which will adversely affect the image of the bank, could not be disclosed.
2. The annual report of the banks is not a well report. Some terms are not happened in future.
3. Only 12 weeks were not sufficient to visit all the desks of the division. So some desk were remained unvisited moreover some officers in some desk were found non-cooperative
4. The division also refuses to provide on its performance, especially on commission earned.
5. It is also not possible to go the depth of each activity of credit card division & Advance division because of time limitation. Therefore, it very difficult to carry out the whole analysis

Company profile:

National bank Ltd is the first and major private sector commercial bank in Bangladesh fully owned by the Bangladeshi Entrepreneurs. The Bank started its operation from 23^rd March 1983. As a result of the collective effects of the some eminent bankers, of failure in playing due to role in mobilizing small savings of the teeming millions and providing improved clients services to them in our country, the Government gave right decision to allow establishing banks I private sector. National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the private sector. From the very inception its is the firm determination of National Bank Limited to play a vital role in the national economy. We are determined to bring bank the long forgotten taste of banking services and flavors. We want to serve each one promptly and with a sense of dedication and dignity.

NBL prudently and boldly faced the challenges of various adverse situations prevailing in the post independence Bangladesh and has now established it self as one of the most successful bank of the country. People in all regions can easily avail of the services of NBL through its 76 branches spread all over the country. Besides, the bank has been smoothly conducting its overseas activities with utmost efficiency through its 358 correspondents in 67 countries of the world. NBL has drawing with 18 overseas exchange house including the gulf overseas exchange. In order to provide modern banking services to satisfy the demand of the country and the people, all branches of the bank have been brought under computer network. We are able to reach with lighting speed the hard-earned foreign exchanges of non-resident Bangladeshis to their near and dear ones at home through the world renewed Western union. The bank maints round the clock communication with the external world using the latest information technology services of SWIFT and REUTERS. In order to give improved and risk free banking services to the valuable clients, all arrangements for launching line banking are its final stage.

Since the very beginning the bank extended much emphasis on overseas operation and handled a sizeable quantum of homebound foreign remittance. The Bank established extensive drawing arrangement network with Banks and Exchange companies, located in important countries of the world. Expatriates Bangladeshi wage earners residing in those countries can now easily remit their hard earned money to the country with confidence safety and speed.

NBL has been able to create a special image at home and abroad by introducing different banking products in accordance with the expectations requirements of people of the country. NBL was the pioneer bank to allow back-to-back LC facility without any margin to the entrepreneurs of garment industry during the Eighties, thereby helping the industry thrive to its present position. This has not only contributed to enrich of the country’s foreign exchange reserves, but also opened employment opportunities for a large numbers of labor force of the country. As a pioneer in this sector, NBL’s name will remain in golden letters.

NBL has been the pioneer in promoting readymade garment industries and still is the single largest financier in this sector. In the early 80’s when garment industry in Bangladesh was experiencing a process of trial, the bank foresights the bright prospect of this sector and extend finance to the deserving and promising entrepreneurs. It provided them with

financial support including market information and advice and today the garment sector constitutes about 66% of the total export of the country.

NBL is the first bank to introduce international Master Card in Bangladesh which has facilitated the users to get benefit to different facilities in home and abroad. NBL is the first among private sector banks which has set a uncommon precedence of extending fully supervised collateral agriculture credit in the brained area of Rajshahi district to help small farmers to grow.

The wise directions and guidance of a prudent and versatile Board of directors and concerted efforts of a team of well-qualified and professionally heightened executives and officials have brought an extraordinary distinctiveness for the bank. Above two thousand dedicated executives, offers and staffs’ working day and night to serve its customers satisfactororily. Through strong commitment base. The bank has introduced new products like Credit card. E-cash. The popularity of the bank has gained momentum with quick money transfer arrangement anywhere in world in association with Western Union’s U.S.A

National Bank has arrangement with Western Union Which over 130 years. In the year 20000 the Bank managed to procure foreign remittance to the tune of US$ 8.44 million dollar equivalent to TK 4662.10 million compared to TK 3989.20 million in the previous year indicating a growth of 16.96 % Banking is not only a profit oriented commercial institution but it has based and social commitment admitting this true NBL is going on with its diversified banking activities.

2.2 Vision

The vision of the National Bank Limited is to develop Bangladesh’s economy by profitable investment of public money and build up their confidence to the private institution.

2.3 Mission

The missions of the National Bank are as follows:

• We aim to come one of the leading Banks in Bangladesh by our  prudence, fair and quality of operation.
•  We intend to meet the needs of our clients and enhance our profitability by creating corporate culture.
•  We believe in strong capitalization.
•  We be1ieve in strong capitalization.
• We aim to ensure our competitive advantages by upgrading banking technology and information system.
•  We maintain high standard of corporate and business Seth’s. We provided high quality financial services to strengthen the well being and success of individual, industries and business communities.
• We intend to plat more important role in the economic development of Bangladesh and its finical relations with the rest of the world by interlining both domestic and international l operations.

Functions of National bank Ltd:

¨      To maintain all types of deposit A/Cs.

¨      To make investment.

¨      To conduct of reign exchange business.

¨      To conduct other Banking services.

¨      To conduct social welfare activities.

¨      To work for continues business innovation and improvements.

¨      To bui1d up strong-based capita1ization of the country.

¨      To ensure the best uses of its creativity, well disciplined, well manages and perfect growth.

Management structure of National Bank Ltd.

In 2001 National Bank Limited made commendable progress in all business, like deposit, credit, fund management, investment, foreign remittance, credit card & foreign exchange related business. Bank has expended business activities as holding previously & parallel by diversification its investment to a new product. As a major financier remarkable portion of total exports of the country. The total assets of the bank were Tk38400.37 million as on 31^st December 2005, which is higher than previous year. This is the sign of good management. The management processes are as follows:

Planning:

 The strategic planning approach in NBL is top-down. Top management formulates strategy at the corporate level, and then it is transmitted through the division to the individual objectives. Board of directors or Executive committee usually takes the decision. In this

process lower level manager are detached in making process, even brainstorming of lower level manager is absent in decision-making and planning process.

Organizing:

Organizing of the National Bank Limited is based on Departmentalization. The organization is divided into twelve departments headed by Executive vice President or Senior Vice President. In the National Bank Limited the whole operation is centralized and authority is delegated by written guidelines. These guidelines are:

• Operational manual approved by Head Office, where each aspect or banking operation is elaborately defined.
• Advance manual including advances limit for different management level.
• Bad and doubtful recovery manual.
• Code of conduct.
•  Foreign banking guidelines.
• Central bank directives.

Different management position holders in departments and branches practice their authorized power in different cases with administrative loophole.

Staffing:

Entry-level recruitment process of the National Bank Limited is conducted in three ways.   One way is recruitment of probationary officer. Each probationary officer has one-year probation period. After completion of probation period the officer joins as officer grade III (b). The career path of probationary officer is headed toward different management positions. Second way of recruitment is to recruit non-probationary officer who joins as a assistant officer. The career path of an assistant officer is lengthier than probationary officer. The third way of recruitment is recruitment of staff and sub-staff such as typist,

messenger, driver, guard, attendant, cleaner and other lower level positions. Promotion policy of NBL is basically based on seniority basis. Sometimes, employees are promoted to the higher position for their outstanding perfoffi1ance. However, it is found that the average length of a position held by an employee is around five years.

Controlling:

The bank has strict control over its all-organizational activities. The Bangladesh Bank directives indicate some control measures. Audits and inspection are conducted by different parties to check whether the bank implement these control system properly or not. The central bank conducts credit inspection by a team. The National Bank Limited has audit and inspection department to take controlling measures in internal operations. Audit and inspection team send to the branches now and then and is responsible for preparing report that will be submitted to the chief Administration to take necessary actions.

Fig:1 Organogram of the Bank

2.6 Organizational Structure and Department:

Organizational setup of the National bank Limited is consisting of three organizational domains. Firstly the central top management, which contains Board of Directors, Managing Director, Additional Managing Director and Deputy Managing director, Major responsibilities of this are to take central decision and transmit it to the second step. Secondly, Central executive level management, which contains executive vice president, senior vice president, vice president and Assistant vice president. Major responsibilities of this part are to supervise and control division/ department. Thirdly, branch operation management, which contains branch manager and other mid/ lower level management. Major responsibilities of this part are to the 76 branches of this bank and report to the Head office from time to time.

 2.7 National Bank Foundation

NBL is a vibrant and promising bank. Its activities are not limited only to business and financial matters. Out of social responsibility, NBL has extended its support for expansion of educated in the country. With this objective, the National Bank Foundation was formed in 1989.

2.8 Sports and Cultural Activities

Since its inception, NBL has been playing a pioneering role in sponsoring sports and games in the country. NBL was the sponsor of Metropolis Football League and Senior Division Football League last year. Besides, NBL extended substantial patronization to Bangladesh Olympic Association and Bangladesh volleyball Federation in 2003.The Bank never hesitates to extend its helping hands to the people as in the days of crisis so also in the exuberant happy moments of cultural events.

Present trends of the bank:

 As a first generation private commercial bank of Bangladesh, National Bank Ltd. could do more for the development of nation’s economy. But it was not fully successful. This bank is also a victim of default culture. Bangladesh Bank declared this bank as a problem in 1997 for unlimited stuck-up loan. The bank could not declared dividend and opened branch in the year 1996 and 1997. Market value of shares was reduced to TK 65.25 for each TK 100 share in that time.

Under the direct supervision of Bangladesh Bank the situation of the bank was improved in the next two years..

Many new private commercial banks came to the banking sector. Competition has also been increased. These banks attached the market share of National bank Ltd. They have been taken employees of the bank by offering attractive salary. As a result overall performance of the bank again started to decrease.

Table-2: The last five (2001-2005) years profit position of the bank is as follows:

(Tk in million)

There is an increasing trend of operating operation profit of the bank till the year 2000. But it was largely increased in the year 2005 . Then operating profit increasing in the year 2003. Te net profit before tax is also not steady.

The classified loan of the bank has increased to 42.94% in 2002 than 1998. The total amount of classified loan is tk 5592.51 million as on 1-12-2003 which is 25.13% of total loans and advances.

Table-3: The percentage of classified loan to advances (1998-2003) is shown in bellow: (Tk in million)

The bank could not recover its classified loans although it relieved from problem bank.

2.10 Capital & Reserve fund:

Authorized capital of the National Bank Ltd. is 1000.00 million and paid-up-capital is 51.63 cores which is increased from the preceding year compare to Tk 8.61 cores. Reserve fund is 134.59 cores as on 31-12-2004. The value of total equity of the year 2004 held by the bank stood 186.23core,which were 170.09 cores in 2003.

2.6 Organizational Structure and Department:

Organizational setup of the National bank Limited is consisting of three organizational domains. Firstly the central top management, which contains Board of Directors, Managing Director, Additional Managing Director and Deputy Managing director, Major responsibilities of this are to take central decision and transmit it to the second step. Secondly, Central executive level management, which contains executive vice president, senior vice president, vice president and Assistant vice president. Major responsibilities of this part are to supervise and control division/ department. Thirdly, branch operation management, which contains branch manager and other mid/ lower level management. Major responsibilities of this part are to the 76 branches of this bank and report to the Head office from time to time.

 2.7 National Bank Foundation

NBL is a vibrant and promising bank. Its activities are not limited only to business and financial matters. Out of social responsibility, NBL has extended its support for expansion of educated in the country. With this objective, the National Bank Foundation was formed in 1989.

2.8 Sports and Cultural Activities

Since its inception, NBL has been playing a pioneering role in sponsoring sports and games in the country. NBL was the sponsor of Metropolis Football League and Senior Division Football League last year. Besides, NBL extended substantial patronization to Bangladesh Olympic Association and Bangladesh volleyball Federation in 2003.The Bank never hesitates to extend its helping hands to the people as in the days of crisis so also in the exuberant happy moments of cultural events.

Present trends of the bank:

 As a first generation private commercial bank of Bangladesh, National Bank Ltd. could do more for the development of nation’s economy. But it was not fully successful. This bank is also a victim of default culture. Bangladesh Bank declared this bank as a problem in 1997 for unlimited stuck-up loan. The bank could not declared dividend and opened branch in the year 1996 and 1997. Market value of shares was reduced to TK 65.25 for each TK 100 share in that time.

Under the direct supervision of Bangladesh Bank the situation of the bank was improved in the next two years..

Many new private commercial banks came to the banking sector. Competition has also been increased. These banks attached the market share of National bank Ltd. They have been taken employees of the bank by offering attractive salary. As a result overall performance of the bank again started to decrease.

Table-2: The last five (2001-2005) years profit position of the bank is as follows:

(Tk in million)

There is an increasing trend of operating operation profit of the bank till the year 2000. But it was largely increased in the year 2005 . Then operating profit increasing in the year 2003. Te net profit before tax is also not steady.

The classified loan of the bank has increased to 42.94% in 2002 than 1998. The total amount of classified loan is tk 5592.51 million as on 1-12-2003 which is 25.13% of total loans and advances.

Table-3: The percentage of classified loan to advances (1998-2003) is shown in bellow: (Tk in million)

The bank could not recover its classified loans although it relieved from problem bank.

2.10 Capital & Reserve fund:

Authorized capital of the National Bank Ltd. is 1000.00 million and paid-up-capital is 51.63 cores which is increased from the preceding year compare to Tk 8.61 cores. Reserve fund is 134.59 cores as on 31-12-2004. The value of total equity of the year 2004 held by the bank stood 186.23core,which were 170.09 cores in 2003.

2.6 Organizational Structure and Department:

Organizational setup of the National bank Limited is consisting of three organizational domains. Firstly the central top management, which contains Board of Directors, Managing Director, Additional Managing Director and Deputy Managing director, Major responsibilities of this are to take central decision and transmit it to the second step. Secondly, Central executive level management, which contains executive vice president, senior vice president, vice president and Assistant vice president. Major responsibilities of this part are to supervise and control division/ department. Thirdly, branch operation management, which contains branch manager and other mid/ lower level management. Major responsibilities of this part are to the 76 branches of this bank and report to the Head office from time to time.

 2.7 National Bank Foundation

NBL is a vibrant and promising bank. Its activities are not limited only to business and financial matters. Out of social responsibility, NBL has extended its support for expansion of educated in the country. With this objective, the National Bank Foundation was formed in 1989.

2.8 Sports and Cultural Activities

Since its inception, NBL has been playing a pioneering role in sponsoring sports and games in the country. NBL was the sponsor of Metropolis Football League and Senior Division Football League last year. Besides, NBL extended substantial patronization to Bangladesh Olympic Association and Bangladesh volleyball Federation in 2003.The Bank never hesitates to extend its helping hands to the people as in the days of crisis so also in the exuberant happy moments of cultural events.

Present trends of the bank:

 As a first generation private commercial bank of Bangladesh, National Bank Ltd. could do more for the development of nation’s economy. But it was not fully successful. This bank is also a victim of default culture. Bangladesh Bank declared this bank as a problem in 1997 for unlimited stuck-up loan. The bank could not declared dividend and opened branch in the year 1996 and 1997. Market value of shares was reduced to TK 65.25 for each TK 100 share in that time.

Under the direct supervision of Bangladesh Bank the situation of the bank was improved in the next two years..

Many new private commercial banks came to the banking sector. Competition has also been increased. These banks attached the market share of National bank Ltd. They have been taken employees of the bank by offering attractive salary. As a result overall performance of the bank again started to decrease.

Table-2: The last five (2001-2005) years profit position of the bank is as follows:

(Tk in million)

There is an increasing trend of operating operation profit of the bank till the year 2000. But it was largely increased in the year 2005 . Then operating profit increasing in the year 2003. Te net profit before tax is also not steady.

The classified loan of the bank has increased to 42.94% in 2002 than 1998. The total amount of classified loan is tk 5592.51 million as on 1-12-2003 which is 25.13% of total loans and advances.

Table-3: The percentage of classified loan to advances (1998-2003) is shown in bellow: (Tk in million)

The bank could not recover its classified loans although it relieved from problem bank.

2.10 Capital & Reserve fund:

Authorized capital of the National Bank Ltd. is 1000.00 million and paid-up-capital is 51.63 cores which is increased from the preceding year compare to Tk 8.61 cores. Reserve fund is 134.59 cores as on 31-12-2004. The value of total equity of the year 2004 held by the bank stood 186.23core,which were 170.09 cores in 2003.

2.11 Bank’s Own share

National bank Ltd. started its January in 1983 with a paid-up-capital of Tk 4.40 core and 19 owner shareholders. At present, paid up capital of the bank has increased to 43.03 core which is casting a beginning impact in improving liquidity situation in the capital market. Till 31 December 2003, the bank has opened a total of 18,490 share portfolio accounts under its share customize to the baseline scenario, the rate of increase in the number of shareholders has been 48,784% while that of paid up capital stood at 936%.Under the above management system, we have issued a total of 127244 share certificates which has been playing a strong role in share transaction of capita market.

2.12 Deposits& Advances:

The deposit of the bank was Tk. 3298.40 core as on 31-12-2005. It was Tk. 2897.34 core in the year 2004. The growth rate of deposit is 13.84% in the year 2005

2.13 Dividend:

The bank has been maintaining a stable dividend policy since 1998. The market of share was in a good position during the last eight years. The board of directors bank declared 20% cash dividend for the year 2002. The dividend paid since 1995 is as follows:

Table-4: Dividend

2.14 Sources and uses of Fund:

The main working forces of financial and commercial organization are fund. Bangladesh financial institutions collect fund from different sources and make profit through utilization of this fund. Earning of Maximum profit and holding of minimum liquidity a financial institution depended on its efficient fund management. The main sources of fund are as follows:

1. Paid-up-capital
2. Reserve fund
3. Deposit
4. Borrowings
5. Borrowing from Bangladesh bank

Under different heads and borrowing from different banks through REPO. In according with provision of Bangladesh Bank, 4% of total demand time liabilities and as CRR in current account with the Bangladesh bank, while 12% of the liabilities maintained in different approved securities (Bills, Bonds, and Debenture etc.) foreign currencies. The rest of the fund is utilized as loans and advance investments in profitable outlets.

National Bank Ltd. is conscious about use fund properly. It keeps necessary cash and securities to maintain CRR and SLR under instruction of Bangladesh Bank. Funds are invested in economic activities of Bangladesh as loan And advances. It uses its surplus fund in call money Market and different banks with higher profit.

Sources of Fund

Table-5

Uses of Fund

Table-6

Training and Training Institute:

The bank continued to endeavor in building up a efficient and knowledge workforce  through imparting in service modern banking training. For this, Bank developed a training institute in shamoli in 1987 for its own to train-up its employees. During the years under review 225 employees attained training programs arranged by the training institute of the bank. In every batch, 25 trainees can attain in training program with residential facilities. Up to 2005 from the beginning of the institute 4682 employees have trained-up.

Consumer services Expansion Program of National bank Ltd

Present age is the age of competition. A good number of new private commercial banks came to banking sector in Bangladesh during the last decade. Foreign banks (Standard chartered, American Express, HSBC, city NA, etc) also conduct banking business in Bangladesh very successfully. These new generation banks introduced many attractable products for customers. National Bank Ltd. is also introduced many products to attract customers.

The products introduced during the last five years are as follows:

1. Monthly savings Scheme
2. Consumer credit scheme
3. Western union money transfer
4. SWIFT Services

Now a days NBL introduced a new product Name “Power Card”.

Monthly Savings Scheme:

It is an attractable savings project for limited income group. National bank Ltd. got quick response in this project. A depositor can deposit 500-10000

Taka monthly for 5-8 years. The return is as follows:

Consumer credit Scheme:

National Bank’s consumer credit scheme gives a great opportunity to buy house and office items on easy installments. This scheme gives an advantage of part payment to cope  with high price tags of many necessary home and office appliances. A consumer is the ultimate user of a good. Thus “ Consumer credit” is the credit, which directly comes into the use of consumer.

Objectives of Consumer Credit Scheme:

The Objectives of Consumer Credit Scheme of National Bank Ltd. is as follows:

1. To bring the credit facility to wide range of customers.
2. To provide financial assistance to the limited income group people toward buying utility products.
3. To help the professionals to raise their living standard.
4. To participate in the socio-economic development of the country.

Goods and services under the scheme:

Under the “Consumer Credit Scheme” NBL grants pecuniary help for the following goods and services.

• Private car and station wagon new and reconditioned.
• Refrigerator and deep fridge.
• Air cooler, Air condition, Room-heater, Water Purifier.
• Sewing machine.
• Photocopier.
• Generator.
• Other goods that are not mentioned above but are considered essential.

D. SWIFT Services:

NBL is one of the first few Bangladesh Banks to obtain membership of SWIFT (Society for World Inter-bank Telecommunication). SWIFT is a members’ owned cooperative which a first and accurate communication network for financial transaction such as Letter of credit, Fund Transfer etc. By being a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5700 user institutions in 150 countries all over the world.

Problems of the National Bank Limited

Following various problems are including in the National Bank Limited.

1. 1.      Political disturbances: Political situation is not favorable for bank business in Bangladesh. Political disturbances are the main problem of National Bank Limited. It also a problem of all banking system in Bangladesh.
2. Competitive banking Market: Different kinds of commercial Bank are serving in our commercial Banking Market. Therefore, no single Bank is allowed or capable to establish personal interest especially due to heavy competitive market.
3. Company representative effect: There are so many representatives working  in the market to collect the sales price directly from the customer of each product daily. So merchant group, Businessman, Traders, Agency, Wholesalers and high depositor are not capable to deposit the money in the Bank. Due to this Deposit System, They Hamper it.
4. High rate of Government security: practically, the government security likes bond, Security, Debenture, Savings certificate etc gives high rate of interest than commercial Bank. So all the investors are invested to utilize their idle fund to purchase the government security due to higher rate of interest.
5. Credit Sales: Now a day, businessperson is bound for credit sales to increase their sales in the competitive market. For this reason business organization need less working capital and banking companies are loosing their opportunities to invest in business organization.
6. Lack of modern tools and techniques: National Bank Performing its activities by using backdated tools and techniques. It is fully far from information technology. Though NBL has enough strength to play proactive role in every aspect, it play reactive role.
7. Lack of proper training: TO cope with this ever-changing world every organization even every person has to be up-to-date. For this reason, the NBL should arrange adequate training. Though NBL has its own training center, it is not adequate for its employees. Because it is not well furnished to with this modern world.
8. Lake of marketing activities: NBL does not promote itself for catering its services to the public or the business organization.
9. Lack of favorable market image: NBL has a higher book value per share but market value per share is very low corresponding to its book value.

Suggestions

1. Interest expenses on deposits of NBL may be tried to keep low with due regard to balances deposit mix.
2. The NBL should introduce on-line facilities so that the NBL can know its present resources not past month or past weeks resources. By this way NBL can use its funds properly.
3. It should maintain a separate cost accounting cell at the head office of this bank furnished by professional cost accounts for implementation of appropriate costing system.
4. The research cell of this bank should be strengthening with the efficient manpower by studying the feasibility of introduction of new products, analysis of manpower productivity and similar other research works.
5. In order to sustain and remain profitable, this bank should identity and re-invests in productive sector and terminates unproductive operations/divisions.
6. NBL should establish investment priorities and develop corporate budgets that steer resources into those internal activities critical to strategic success. It should be involved in channeling resources into areas where earning potentials are higher and away from areas where they are lower.
7. NBL should initiate responses to change under way in the industry, the economy at large, the regulatory and political arena and other relevant areas.
8. NBL should observe competitors closely to analyze any new action taken by them and react competitively to that action. It can be accomplished by the following ways:

     NBL can get information about a certain competitor’s business policies by recruiting that company’s employees.

     IT can get information from people who do business with rivals.

     It can get information about other banks from published materials and published document.

10. NBL should reengineer its core business process in order to eliminate        duplicate        work and reduce overhead cost.

11. NBL should enhance its market exposure and create a favorable image to because its market value per share is very low than its book value.

DEBIT CARD:

The common method of transfer fund is called debit card. This card is called cash card or asset card. This card is similar to prepaid mobile phone.

Objectives of debit card:

There are some objectives. Such as-

1. Revenue Generation: Debit card issuing bank increase their revenue by following points-
   1. Merchant Discount
   2. Interchange Fees
   3. Card Fees
   4. Interest on Credit Line

1. Cost Reduction: Using debit card bank reduced expenses. After using debit card paper documents such as file, voucher, letters etc expenses may also reduced which was so high prices.

1. Client Services: Debit card is used after native of cash, cheque. Other to carry a lot of money is so risky.

Merits:

The merits of using debit card are gives as bellows-

1. Any time Cash Converted: Anyone can easily converted cash with a short time.
2. Decrease of Risk: Debit card decrease risk. Because use of cash is not always safe.
3. No Chance of Damage: Cash and cheque are made of paper. So these are easily damaged. But the debit card is not easily damaged.

1. No Duplicacy: There is no chance of duplicacy in debit card.
2. Cash Equivalent: Instead of cash and cheque anyone can use debit card.
3. Carrying Facility: Anyone can easily carry the debit card instead of debit card.
4. Full Time Banking: Debit card holder enjoy full time banking.
5. No Need of Bank A/C: there is no need of bank account to become a debit card holder.

User of debit card:

Debit card is use alternative use of cash, cheque, credit card etc. The following classes of people use debit card-

1. Those who use banking services.
2. Those who use a lot of cheque.
3. Those who have earned lumsum revenue.
4. Traveler who travel all over the world.
5. Those who have a lot of assets.

Debit Card (National Bank):

National Bank issues debit card. Now, National Bank issues debit card which is called NBL power card. Before NBL had debit card, that was called ATM card. Power card is more flexible than ATM card.

Types:

The power card is three types:

1. Local Card: Local card will be valid in Bangladesh only. The amount of card is 1000 tk or multipliers. There is no upper limit.                                                                             International Card: international card will be valid throughout the world except Bangladesh. The minimum amount is $500. the maximum amount is $1000 for SAARC and Myanmar and non-SAARC Countries $3000.

1. Dual Card: Dual card will be valid in Bangladesh and abroad.

Charge:

In first year there is no charge. After one year the charge will be 200tk per year. International or Dual Card- $15 or 1% of the prepaid amount but not exceeding $40.

Duplicate card or Pin Re-issue—Tk 200

Pre- Closure fee—Tk 200

Statement printing fee—25 per instance

Cash withdrawl fee

Within Bangladeh

From NBL ATM—No fee

From Q-Cash – Tk 10 per transaction

From other ATM—TK100 per transaction

Outside Bangladesh

2% or $2 which ever is higher

Limitations:

Some people are not interested to become a debit card holder. Because they are not mentally upgrade to use debit card. Otherwise, there also some reasons why they are not interested.

1. Lack of Information
2. Knowledge in Technology
3. Awareness
4. Advertisement
5. Mental Up gradation

Service of NBL power card:

1. Cash withdrawals
2. Cash deposits
3. Utility payments
4. Balance inquiries
5. Fund transfer
6. Mini Statement

Comparison: 

There are various types of card. Debit card has various name. In NBL Debit card is called Power Card. Other bank, Debit card is called ATM card. So, for comparision purpose we compare with ATM card.

Standard Chartered Bank

ATM in Standard Chartered Bank

Standard Chartered introduced their ATM service first in Bangladesh in 1994 with only one ATM at their Banani Branch. Now they have 23 ATM in whole Bangladesh.

They have ATM in their each branch. They also have offsite or Non branch location of ATM that is there is no branch of the bank but has ATM booth.

Out of 23ATM. Standard Chartered installed:

     16 ATM in Dhaka

     4 ATM in Chittagong

     3 ATM in Sylhet

Cost Associate with ATM

Standard Chartered purchase ATM form NCR Company in installment. 50% of the total price is paid before installation of the machine and the rest 50% is paid after installation. ATM is insured against any destruction, malfunction etc.

Installation cost: The installation cost of an ATM is 2300 pound plus construction cost TK. 6 lakh.

Maintenance Cost: Yearly maintenance cost for an ATM is TK. 1.36 lakh.

Service of Standard Chartered ATM

Standard Chartered bank offers a variety of banking service through their ATM.

     Cash withdrawals

     Cash deposit

     Check deposit

     Utility payment

     Balance Inquiries

     Funds transfer

     Mini Statement

     Statement requests

     Check book Requisition

Managing Of ATM

An ATM team consisting of two persons is employed for the management of ATM service. In this team there is an ATM officer and the other is his assistant. In Chittagong and Sylhet there is also ATM team consisting of two persons who delivers  the day to day reports to the ATM officer in Dhaka.

The ATM team is responsible for the following function:

     Collection of Cash and Checks, and bring it to the Branch.

     Collecting ATM card, if retained and return it to the owner on the next working day.

Every day the team visits to all ATM booth and Check customers complaints and any problems associated with the machine.

 Standard Chartered Grind lays Bank

ATM in Standard Chartered Grind lays

Standard Chartered Grind lays ( former ANZ Grind lays) started their ATM services for their customers from June 1998. Now their total number of ATM booths overall Bangladesh is 14. They also have ATM at the off-site location of Branch as well as ATM in Branches.

ATM at the off-site location is that there is no branch of the bank but has ATM booth. Out of 14 ATMs Standard Chartered Grind lays installed:

     10 ATMs in Dhaka

     2 ATMs in Chittagong

     1 ATM in khulna

     1 ATM in Bogra

Standard Chartered Grind lays ATM card will enable one person to operate his/her Current or Savings account 24 hours a day, no matter where his or her account is maintained. It can be used through their network of Automated Teller Machines.

ATM in the branches: out of 14 ATMs of Standard Chartered Grind lays nine ATM located at the branches as mention following table:

Non Branch ATM

The rest five ATMs booth of Standard Chartered Grind lays Bank are non branch ATM booths. These Off-site locations of these ATM of this Bank are:

     One ATM at Shamoli

     One ATM at Mirpur

     One ATM at Johnson road

     One ATM at Uttara, and

     Another One ATM at Nasirabad, Chittagong.

Facilities of ATM of Standard Chartered Grind lays

Standard Chartered Grind lays ATM card Provide one person with a range of Banking services, some of the primary facilities being:

     Cash withdrawals

     Balance inquires

     Accounts transfer

     Statement requests

     Changing the PIN

Hongkong and Shaghai Banking Corporation Limited

ATM in HSBC

HSBC started their ATM services for their customers from November 2000. Now their total number of ATM booths overall Bangladesh is 11. They also have ATM at the off-site location of branch as well as ATM in Branches.

Out of 9 ATMs, HSBC installed

     8 ATMs in Dhaka

     3 ATMs in Chittagong

ATM in the Branches: Out of 11ATMs of 4 ATMs booths located at the following branches as mention in the following table:

Services of ATM of HSBC

     Cash withdrawal

     Cash/check Deposit

     Balance Inquiries

     Funds Transfer

     Mini statement

     Statement requests

     Check book Requisition

     Mail Deposit

     PIN Change

American Express Bank (AMEX)

ATM in American Express Bank

AMEX started their ATM services for their customers from December 2000. Now their total number of ATM booths overall Bangladeshis 6. All of the ATMs of AMEX banks are operated by related branch because every ATM is related to a Branch, that means every ATM of this Bank is installed with any Branch of this Bank.

Out of 6 ATMs, AMEX Banks installed:

     4ATMs in Dhaka

     2 ATMs in Chittagong

Locations of ATM: 6 ATM booths of AMEX bank are located at the following branches as mention in the Table.

Customer Requirements

A person who is the customer of the bank has a regular banking relation with any of the Branch inside Bangladesh can become an ATM Card holder of AMEX. Here also he/she has to maintain an account with a Branch of this Bank. Normally when a person opens an account to this Bank he/she is given an ATM Card with which he/she can get ATM services from any of the branch inside the Bangladesh.

Services of ATM of AMEX

A client of the bank can get a large number of important banking services with the ATM Card of American Express Bank. Most of the customers of this Bank go to the ATM booth to get the following services:

     Cash withdrawal

     Cash Deposit

     Balance inquiry

     For the Statement of the Balance

     PIN Change

They do not offer any credit card services to the customers of our country and for these customers do not get any facility to get ATM service by inserting credit card into the ATM.

Joint ATM operation of Nine Bangladeshi Private Banks.

E-cash ATM has introduced a new era in banking services. First of its kind in Bangladesh. Nine Bangladeshi bank jointly ATM operation 9^th October,2001. E-cash ATMs provide multiple banks a network to allow their customers to conduct banking transaction and pay utility bills 24 hours a day. It’s a great pleasure for Bangladesh. It’s a boast of Bangladesh. Some local private bank to keep abreast of the times with global world. E-cash ATM has to many advantage such as:

Convenient

Life is busy. Time are difficult to catch up with. Reaching the Bank within the Banking hour to withdraw cash or pay utility bills has always been a worry. That’s not all, when cash was required for an emergency or on a holiday or after Banking hours.there was no choice but to wait until the bank opened the next day. No more worries. E-cash give you access to you account any time of the day whether it’s holiday or after banking hours.

Secure

E-cash is fully secured. E-cash card holder can only carry out transactions on E-cash ATMs with Personal Identification Number (PIN). The PIN is your secret coad to access your account. It should be memorized as soon as you have received it and then destroyed without keeping any record. If you have a doubt that your PIN then and then apply for a new PIN immediately.

Reliable

E-cash ATM network is backed by state of the art technology. Our network personal are available round the clock to provide you with any assistance you require. If you have lost your Card, to prevent unauthorized transactions. You may report it to the Network Hotline immediately.

The name of nine Bank are:

Service of ATM of nine Banks

One customer can get a large number of Banking Services from this joint ATM operation. The main service that will be provided to customers are:

     Cash withdrawal

     Statement of Balance

     Balance inquiry

     Utilities

Facilities of WASA, DESA, BTTB, bill payment

Payment of mobile phone bill Grameen Phone, Sheba, Aktell & City Cell

Cash Deposit (under processing)

CREDIT CARD

The popular process of Electronic Banking is called Credit Card. In spite debit balance, customers use the debit card. Generally to pay the service and to withdraw cash, credit cards are used.

History:

In 1951 Franklin first introduced the credit card. In the end of 1951, Bank of America introduced chase Manhattan and Marine Midland Trust, Charge Card. Bank of America acquired popularity of “Bank Amari Card” with the help of Bunch Network. The popular credit cards are: VISA, Master Card, American Express, and Gold Card etc.

Objectives of Credit Card:

1. cost reduction
2. electronic banking
3. client services

Merits:

The merits of using credit card are gives as bellows-

1. Any time Cash Converted: Anyone can easily converted cash with a short time.
2. Decrease of Risk: Credit card decrease risk. Because use of cash is not always safe.
3. No Chance of Damage: Cash and cheque are made of paper. So these are easily damaged. But the credit card is not easily damaged.
4. No Duplicacy: There is no chance of duplicacy in credit card.
5. Cash Equivalent: Instead of cash and cheque anyone can use credit card.
6. Carrying Facility: Anyone can easily carry the credit card instead of cash.
7. Full Time Banking: Credbit card holder enjoy full time banking.
8. No Need of Bank A/C: there is no need of bank account to become a credit card holder.

User of Credit Card:

Normally a person whose monthly income is over 10000 can be a credit card holder. We know, there are three classes in society.

1. Upper class
2. Middle class
3. Lower class

Again, middle class is divided into two categories.

1. Upper  middle class
2. Lower middle class

The income condition is not same in every class. In normal sense, upper class and upper middle class use the credit card.

On the other hand, the user of the people may determining by the following points:

–    those who use banking services.

–    those who have earned a lot of revenue.

–    travelers who travel all over the world.

–    those who have a lot of assets.

Limitations:

In spite of some advantages, the credit card has some limitations. The limitations are given bellows –

1. Knowledge in Techonology- All men are not educated. So they have lack knowledge in technology
2. Lack of Information-   Information is important thing to inform something. If information is not supplied properly, its quite impossible to aware of the product.

1. Pay in more-    Generally Credit Cardholder pay in more in more. Because shopkeepers’ thinks they don’t get cash immediately that’s why they determine high price.

1. Security-     Security is an important factor. That’s why the Cardholder deposit cash, share, Treasury bond, cash equivalent or open a FDR account.

1. TIN-   To collect in perspective Bangladesh point of view is so difficult. In spite of willingness men are not interested to become Cardholder.

1. Booth- ATM or Q-Cash booth is not sufficient. Otherwise there are some city or town where booth is not available.

Consideration of Credit Card Issue- the consideration topics are given as bellows

1. Authorization
2. Billing and Processing
3. Card Issuance

Process of use of Credit Card:

National Bank Limited offers the cardholder 15 to 45 days credit facilities. For the proper billing the bank divided the cardholder into three cycles. These are 0 cycle, 3 cycle and 5cycle. In 0 cycle hill are prepare and send to the cardholder 1^st day or every month and last date of payment is 15^th day of the month. In 3cycle bill are prepare and send to the cardholder 3rd day of every month and last date of payment is 18^th day of the month. In 5cycle bill are prepare and send to the cardholder 5^th day of every month and last date of payment is 20^th day of the month. The cardholder can pay the bill any branch of the National Bank. If any cardholder fails to pay the bill within the last date then he/she must pay 2% monthly interest and his/her card stop automatically.  But if the cardholder pay minimum bill (10% of the bill) then he/she must pay the interest on the balancing amount and can use the card as usual. On the other hand, if the card holder withdraws any cash amount from the ATM booth (maximum limit is 20% of card limit) a monthly charge of 2.5% is to be charged from the date of withdraw. In that case the cardholder will not get the 45 days credit payment facility.

Necessary Legal Framework:

At present, all cards are going to duplicate. Otherwise, the cheating matter increase with the use of credit card. Recently we watched the credit card duplicacy in Bangladesh. So, to protect interest the customer, merchant and bank the necessary legal act must be prepared and implemented. Central Bank can play great role to implement the act.

Credit Card (National Bank)

Types:

The credit card is called Master Card or VISA. Generally Master Card is divided into two categories.

1. Local Card
   1. Gold
   2. Silver

1. International Card
   1. Gold
   2. Silver

Requirements:

At first the cardholder fill up the application form. Then he/she submit same documents. The documents are given as follows-

1. TIN (Tax Identity Number)
2. Two copy photographs
3. Photocopy of International Passport

Charge:

The charge is an important factor. The charge depends on the type of card. Charges are given below-

Local – local card is used in Bangladesh and charges are

            Gold   – 2000tk + 15%vat

            Silver  – 1200tk + 15%vat

International Card-

                              International Card is used all over the world. The international card is also two types

1. International Card (Gold)
2. International Card (Silver)

The charge of international card is given as follows

a. Gold   – $35+15% vat

1. Silver  -$70+15% vat

Cash Withdraw –

                        Cash Withdraw is an important factor. The cash withdraw amount is given below

               At a time cash withdraw 50% or per installment 5000 tk which ever is maximum that is granted.

Service  –

            The service of credit card are given as follows

1. Deposit
2. Fund Transfer
3. Utility Payment
4. Purchasing
5. Shopping
6. Credit Facilities

Credit Card (Standard Charted Bank)

                    There are some foreign banks in Bangladesh. Among the banks Standard Charted Bank is one them. Standard Charted Bank is the pioneer to introduce credit card in Bangladesh.

                       The charge and other relevant information of Standard Chartered Bank are given as follows  –

                Local Card  –

                                      Local Card is two types

1. Gold – 3000tk +500tk vat
2. Silver – 1500tk + 250tk vat

                        International Card-

 International Card is also two types

1. Gold – $80
2. Silver -$160

Cash Withdraw 

                 At a time Cash withdraw 50% or per instilment 20000 tk which ever is maximum that is granted.

Security

The security of local card and international card is not same. Depend on security the bank satisfies insurance coverage, when a credit cardholder face accident. The insurance coverage local and international are different.

Comparison between NBL and Standard Charted Bank

The process and system of credit card of NBL and Standard Charted Bank are same. But the charge and other relevant cost are not same. The charge of Standard Charted Bank is higher than NBL. Moreover the credit card is more popular than NBL credit card. Because there are some reasons. The reasons are given as bellows

1. Goodwill
2. Internationl Recognation
3. Markesting
4. Comfort on banking facilities
5. Rely on bank

Conclusion:

National bank Ltd. has established goodwill through innovative products and services. It has many problems but is followed very sincerely the rules, regulations and advice of Bangladesh bank during the last ten years. Technological development have opened up a new dimension in the development creative products, efficient services and customer satisfaction. National Bank Ltd. must cope with this technological advancement to retain its present status. Many new generation private commercial banks have already introduced On-line banking. But National Bank Ltd. Could not established it till now. The bank must take initiative to established on-line banking.

The bank has an experienced and educated managing Director. The other directors of the bank are also young and educated. Their innovative idea will help to create new opportunities for the bank. But their creative ideas could not be implemented if the attitude of the employees is not changed. The executives,  officers and staffs must be  trained to changed their negative attitude towards new concept of banking.

During the 12 weeks internship program at almost all the desk have been observed more or less. Gaining knowledge of practical banking and to compare this practical knowledge with theoretical knowledge. Though all departments and sections are covered in the internship program, it is not possible to go to the depth or each activities of division because of time limitation. So, objectives of this internship program have not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objectives the internship program.