Generally by the word “Bank,” it means a financial institution which deals with money. There are different types of banks like Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Co-operative Banks, etc. But when we use the term “Bank” without any prefix or restriction, it refers to the Commercial Banks. Commercial Banks are the primary contributors to the economy of a country. So, it can be said that Commercial Banks are a profit-making institution that collects the deposits from the surplus unit of the society and then lend the deposits collected, to the deficit unit of the society. Thus, the people of the society and the government are very much dependent on the commercial banks as their financial intermediary. As banks are profit-earning concerns, they collect deposits at the lowest possible cost and provide loans and advances at higher cost.
Banking sector is expanding its hand in different financial events every day. At the same time the banking process is becoming faster and easier and the banking arena is turning wider. As the demand for better service increases day by day, they are coming up with different innovative ideas and products. In order to survive in the competitive field of the banking sector, all the 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 about banks and the banking procedure.
OVERVIEW OF BRAC BANK LIMITED
BRAC Bank Limited is a scheduled commercial bank in Bangladesh. It was established in Bangladesh under the Banking Companies Act, 1991 and incorporated as a private limited company on 20th May 1999 under the Companies Act, 1994. The primary objective of the Bank is to provide all kinds of banking business. At the very beginning the Bank faced some legal obligations because the High Court of Bangladesh suspended activity of the Bank and it could fail to start its operations till 3rd June 2001. Eventually, the judgment of the High Court was set aside and dismissed by the Appellate Division of the Supreme.The Bank has started its operations from July 04, 2001. The Chairman of the Bank is Mr. Muhammad A (Rumee) Ali. Now the Managing Director of the bank is Mr. A.E.A Muhaimen. The bank has made a reasonable progress due to its visionary management people and its appropriate policy and implementation. BRAC Bank is a commercial scheduled bank extending full range of banking facilities as per the directives of Bangladesh bank. It intends to set standards as the absolute market leader by
providing efficient, friendly and modern, fully automated on- line service on a profitable basis. BRAC Bank in surviving in the large banking arena through its unique and competitive products and it is the only local bank that started providing 100% integrated online banking facility though BBL started their career as a last bank in the banking sector out of 53 banks under Bangladesh bank.
A fully operational commercial bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which till now has remained largely untapped within the country. In the last several years of operation, the Bank has disbursed over BDT 9750 cores in loans to nearly 300000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh.
The Bank is mainly owned by the largest NGO in Bangladesh- BRAC .The Bank has positioned itself as a new generation Bank with a focus to meet diverse financial need of a growing and developing economy. With local and international shareholding by BRAC, International Finance Corporation and Shore cap International, BRAC Bank is listed in both the Dhaka and Chittagong Stock Exchanges.
The Bank has embarked with an avowed policy to promote broad based participation in the Banish economy through the provision of high quality banking service based on latest information technology. The Bank will ensure this by increasing access to economic opportunities for all individuals and businesses in Bangladesh with a special focus on currently under served enterprises and households across the rural urban spectrum. We believe that increasing the ability of underserved individuals and enterprises to build their asset base and access market opportunities will increase the economic well being for all Bangladeshis.
BRAC Bank intends to set standards as the market leader in Bangladesh. It will demonstrate that a locally owned institution can provide efficient, friendly and modern full service banking on a profitable basis. It will produce earnings and pay out dividends that can support the activities of BBL major shareholders. Development and poverty alleviation on a countrywide basis needs mass production, mass consumption and mass financing. BBL goal is to provide mass financing to enable mass production and mass consumption, and thereby contribute to the development of Bangladesh.
In the last eleven years of operation, the Bank has disbursed over BDT 9750 crore in loans to nearly 300000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. Since inception in July 2001, the Bank’s footprint has grown to 151 outlets, 250 ATMs and over 500,000 plastics in the market; BRAC Bank offers its clients a wide range of financial solutions to meet their everyday need. In the years ahead BRAC Bank expects to introduce many more services and products as well as add a wider network of SME unit offices, Retail Branches and ATMs across the country.
CORPORATE VALUE
The Bank’s Strength emanates from its owner – BRAC. This means, it will hold the following values and will be guided by them as it does its jobs.
•Value the fact that we are a member of the BRAC family •Creating an honest, open and enabling environment
•Have a strong customer focus and build relationships based on integrity, superior service and mutual benefit
•Strive for profit & sound growth
•Work as a team to serve the best interest of our owners •Relentless in pursuit of business innovation and improvement
•Value and respect people and make decisions depending on merit based recognition and reward on performance
•Responsible, trustworthy and law-abiding in all that we do.
OBJECTIVES
The objective of BRAC Bank Limited is specific and targeted to its vision and to position itself in the mindset of the people as a bank with difference. The objective of BRAC Bank Limited is as follows: •Building a strong customer focus and relationship based on integrity, superior service.
•To creating an honest, open and enabling environment
•To responsible, trustworthy and law-abiding in all that we do
•To mobilize the savings and channeling it out as loan or advance as the company approve.
•To establish, maintain, carry on, transact and undertake all kinds of investment and financial business including underwriting, managing and distributing the issue of stocks, debentures, and other securities. •To finance the international trade both in import and export.
•To develop the standard of living of the limited income group by providing Consumer Credit.
•To finance the industry, trade and commerce in both the conventional way and by offering customer friendly credit service.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Since the inception as a responsible corporate body, BRAC Bank Ltd. has undertaken various initiatives considering the interest of customers, employees, shareholders, communities and environment. These initiatives go beyond the statutory obligation and mandatory compliances to voluntary activities that promote sustainable development.
BRAC Bank’s vision focuses on double bottom line that it should make decisions based not only on profit but also based on social and environmental consequences which is closely linked to the principles of CSR.
CSR is a fundamental part of the way BRAC Bank conducts business. It is an opportunity to build better relationships with all stakeholders by paying closer attention to how bank fulfill our social, economic, environmental and ethical responsibilities. CSR allows us to align our operations with standards and expectations that are increasingly important to our shareholders, employees, customers and communities where we operate.
While most of our overall environmental impact is indirect, resulting from our financing and investment activities, BRAC Bank also have a direct impact on the environment through our day-to-day business operations. They are working towards reducing waste and the more efficient use of resources. The second step is reducing indirect environmental impact by managing our investing activities. As a policy BRAC Bank does not invest in businesses which use child labor or engage in environmentally hazardous activities.
Fifty percent of our Loan portfolio is diverted to Small and Medium Enterprise banking, and as a financial intermediary we channel funds from the surplus ends to the needy. Countrywide network of SME Units cater to the needs of small entrepreneurs to help them build their asset base. We are market leaders in SME, striving for socio-economic upheaval in Bangladesh. We do not support any finances that are detrimental to our environment. A portion of our revenue is channeled to support BRAC schools, where children study for free. 70% of these children are female with a commitment to not to turn away anyone arriving for treatment. In the past, accommodating these patients required the use of tents as temporary wards.
PERSONAL BANKING SERVICE
The BRAC BANK Limited offers a full range of personal banking products and services designed to take care of its customers‟ growing needs and requirements. BBL in Bangladesh has launched a number of loan products and many other products during their seven years of operation. Personal Installment Loan is an unsecured loan that does not require any personal guarantee or cash security. Now Loan also a unique feature of BBL, it provides to customers for purchase something and the limit is 150000 thousand and no require any personal or cash security. Car Loan, also, does not require any down payment as well as the bank offer 100% financing for category 1 and 80% financing for category 2, also the bank needs personal guarantor. The Bank has already launched Phone banking, a state-of-the-art automated telephone banking service available 24 hours a day, 7 days a week, and 365 days a year, which allows customers to access their account from the comfort of the office or home. BBL also offer Alternative Delivery Channel service by which customers can withdraw their money from its 250 plus ATM booth as well as they can withdraw money from visa card supported any ATM booth. Customer also can deposit their money in the bank‟s Cash Deposit Machines. To satisfy the growing needs of real estate BBL offers Home Loan Scheme and a special type of deposit product for resident as well as non-resident Bangladeshi those who are living abroad. We also offer Probashi Banking services for the customers who are living abroad as well as we also offer Probashi Subidha Account for the resident who is living in Bangladesh but someone from his/her family living abroad.
CORPORATE BANKING
As one of the largest banking and financial organizations with an extensive local capability, the BBL is one of the major players in the Corporate banking market. BBL has a full range of products and services for corporate clients, which include: Lease Capital Financing, Term Loan, Trade Facilities, Guarantees, Work Order financing, Floor Financing and Structured Financing & Syndications etc.
BRAC BANK LIMITED Corporate Service follows centralized process through online banking system as well as credit facility is processed at the Head office. After processing the facility the limit is put online and customer can enjoy the facility from any of the BRAC Bank Branches.
INVESTMENT BANKING
Investment Banking and Markets brings together the advisory, financing, equity securities, asset management, private banking and trustee, private equity and treasury and debt capital markets activities of the BBL Group. It offers a full spectrum of services for the Group’s corporate, institutional and retail clients. By drawing on local commercial market knowledge and international product expertise, the Investment Banking and Markets business is able to provide an excellent combination of local market penetration. Private Banking is part of the Investment Banking division of the BBL Group and services offered will vary from division to division.
CASH MANAGEMENT SERVICES
BBL Cash Management services provide domestic transaction solutions to companies throughout the country. Services include a comprehensive range of traditional account and transaction services, augmented by liquidity and financial management solutions and delivered via BBL Internet banking platform, BBL net. BBL operates on a local level to ensure the cross-border differences are identified and any related benefits exploited. Payment services reduce the lead time as well as magnify business opportunity and providing both banking services and a financial partnership with commercial and non commercial organizations.
Working Environment and Prospect of BRAC Bank Limited
Introduction
The New Eskaton Branch of BRAC Bank Ltd. is one of the new additions to the BRAC Bank branches. The branch is located at Shahnaz Tower, 9 New Eskaton Road, Dhaka. It is a two storied building with an ATM booth at the ground floor and the branch on the first floor. The branch started its operations in December 24th 2008. And since then it has never looked back. Though the exterior or the outside view of the branch is not so welcoming, but from inside it has all the facilities that a standard bank in Bangladesh is supposed to have. Due to some legal constrains, BRAC Bank Ltd. does not have the authority to change the outlook of the branch. The branch always has very friendly atmosphere, the employee client relationship within the branch is really. The overall corporate culture in BRAC Bank is such that it reflects in this branch.
Services Provided
The Eskaton Branch like other branches offer a wide array of services to its clients, these are: Cash Transaction
• Cash Deposit
• Cash Withdrawal
• Transfer Cheque Processing
• Cash remittance to other Branch/bank
• Cash received from other branch/bank
• Pay Cash transaction
• Processing western union
• POS Transaction
• Credit Card payment received
Local & Foreign Remittance
• Issue Local Pay Order
• Issue Foreign Demand Draft
• Foreign Currency Sale
• Outward bill collection Clearing Cheque Process
Other Customer Services
• ATM Card Delivery
• PIN Delivery
• FD encashment
• DPS encashment
• Change of Signatory
• Change of account nominee
• Issue Bank Certificate
• Internet Service Request
• SMS Service Request
• Savings Certificate Request
Customer Base
The Easkaton branch like most other branches of BRAC Bank Ltd. servers a wide array of customers. Not just its own customers, but many clients holding BRAC Bank accounts at other branches takes their banking services from Eskaton branch on a regular basis. There were faces which were seen almost every day. They generally came for either cash withdrawal or cash deposit. The customer base of Eskaton Branch comprised of:
• Businessmen
• Employees of Organizations
• Actors
• Media People
• Teachers
etc. used to come to the branch for similar services. They also came to the branch for their personal reasons at they had their salary accounts with the branch. As the Eskaton branch is quite near to FDC(Film Development Commission), many movie actors maintain accounts in the Eskaton branch. There are many music studios, practice pads etc nearby, so many media people including tv actors, singers and other stars were seen in the branch.
Location Analysis
The BRAC Bank Eskaton Branch is located in Eskaton opposite to KFC. The place where the branch is situated is surrounded by a lot of car accessories shop. Eskaton and bangle motor is very well known for the auto parts shops. Thus a major portion of the branch clients come from this section. There are other business establishments who also comprise of the customer base. One of the location benefits of the branch is that is just in between Motijheel and Gulshan, thus many clients Eskaton Branch on their way to either destinations. Eskaton is a residential area, thus the local population of the area also maintains accounts in the branch.
. As Moghbazar Branch is a very busy branch, thus many of its clients prefer taking their banking services from Eskaton Branch for their convenience. A competitive edge for the location of the branch is that it is located near the busy Moghbazar junction, thus many clients come every day to avail services from the branch
The branch provides services like delivery of cheque books, debit cards and cards on request from the clients. As mentioned earlier, all the records of the delivery of these custodial items are being maintained in registers. Thus a figure has been provided to show the position of the branch in terms of providing such servicesbranch has been successful to disburse 137 loans.
Performance Analysis
The performance of a branch depends on many factors like the people in the branch, the services provided, the technological and infrastructural backings etc. The performance of Eskaton Branch will be analyzed according to four criteria:
i) Service
ii) Portfolio
Service
Eskaton Branch provides most of the services that are provided by other BRAC Bank Ltd. Branches. There are a few services that the Eskaton branch is not currently offering. The two most important among those are Credit Card Services and Foreign Exchange Services. Every day customers come to avail these services and has to be forwarded to either Moghbazar Branch or other branches. This decreases the business opportunity of the branch. Though the branch doesn’t have these services, it has been able to maintain a very good. This service was provided in a few branches of BRAC Bank.
Portfolio
The portfolio of a Branch comprises of two aspects, assets and liabilities. The assets are the funds that the branch provides to its clients in return for interest. Examples of assets for a bank are loans and credit cards. handles; they are deposits like Current Account and Savings Account (CASA) and the deposits from Deposit Premium Scheme (DPS) and Fixed 8,00,00,000 in deposits has been attained by Eskaton Branch. That means there has been a growth of till date has been BDT 10194,22,05,557 has 151 branches and for a small branch like Eskaton to have a contribution of 0.58% is very appreciable. Eskaton Branch is trying out new strategies and ways to further increase the percentag3. Working Environment and Prospect BRAC Bank Limited 33% in the deposits
Recommendation
• The BRAC Bank Eskaton Branch should change the outlook of the Branch.
• The Branch should include services like Credit Card Services and Foreign Exchange Services.
• The Branch is under staffed, thus for proper functioning, the branch needs more employees.
• The Branch should gain permission and display boards of the services provided like “Money-
Gram and Western Union etc”
• The remittance service in Eskaton Branch has real good prospect, thus the bank should work actively so that it can attract more clients.
• The Branch should give a lot of emphasis on Cost Cutting techniques and proper record keeping.
• The salary package for each level of employees is not very competitive, thus it de-motivates the employees.
• Developing motivational program and training program.
Conclusion
BRAC Bank proposes to set standards as the market leader in Bangladesh. It demonstrates that a locally owned institution can provide efficient, friendly and modern banking service on a profitable basis. Bank has maintained and achieved strong position in all key area covering capital adequacies, assets quality, sound management, good earning and strong financial position.
BRAC Bank Eskaton Branch has been able to perform exceptionally since its inception in 24th December 2008. Since then it has never looked back. It shows even greater promise of becoming one of the most important branches of BRAC Bank Ltd. There is some lacking of the branch which can be easily recovered. If the Branch follows the recommendations that have been provided and find even more innovative ways for the betterment of the Branch, it would become one of the best. The report has explored a lot of ground on the performance aspect of the branch, and it can be fairly concluded that the Eskaton Branch has done really well in the past and shows great prospect even in the future.
BRAC Bank promises to fulfill every possible Customer needs with high quality service and satisfaction. This success has resulted from the dedication, commitment & dynamic leadership of its management over the periods. To become market leader in providing banking services, introduction of sophisticated banking instruments i.e., online banking services, Internet banking, and ATM services is a demand of time. BRAC Bank is maintaining its competitiveness by leveraging on its Online Banking Software and modern IT infrastructure.
