Executive Summary:

This is the internship report based on the three months long internship program that I

had experienced in the Head Office of BRAC Bank Ltd. From May 18, 2008 to

August 17, 2008 as a requirement of my BBA program under Department of School

of Business, North South University.

This report is divided into two broad parts: one is the organization part and another is

the project part. In the organization part, I introduced the Latest and one of the largest

banks of our country— the BRAC Bank Ltd. On the other hand, in the project part, I

focused on the findings, graphs and analysis of the research.

The topic of my report was “Premium Banking Service to the customers”. My

focus of the report will be basically on the functions of Premium Banking only. The

specific objective of this study was to explore the relationship between client

satisfactions and the degree of consumer service delivery, the degree of CSD in

context of the BRAC Bank Ltd.

While discussing the different aspects and functions of the bank, priority has been

given to depict the real situation as far as appraisal and management system of BRAC

Bank Ltd. are concerned by employing the experience gathered during the internship

program. Analysis on the findings is basically done to sort out the major aspects of the

General banking system and to draw some significant inferences. At the same time for

easier understanding of the report, supporting topics and terms are explained in light

of textbooks and regulatory guidelines. BRAC Bank is a third generation bank in the

growing banking sector of Bangladesh.

As a part of my internship program I got a chance to work at this bank for a period of

three months. During this period I have learned about this organization and its work

environment, which inspire me to work on my topic.

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Chapter 1

Organization Part

2

Introduction:

For a country, the banks are the heart and soul of the financial system. Therefore, the

sound and efficient performance of the banks are very much essential for the

sustenance of the financial system or economy of the country. Like other

organizations, banks are also dependent upon the consumers for their survival in the

market.

Modern banks play vital role in promoting economic development of a country.

Banks provide necessary funds for executing various programs underway in the

process of economic development. They collect savings of large masses of people

scattered through out the country, which in the absence of banks would have remained

idle and unproductive. These scattered amounts are collected, pooled together and

made available to commerce and industry for meeting the requirements.

BRAC Bank Ltd. is one of those banks that plays important role in the economy of

Bangladesh. There are thirty six branches of BRAC Bank all over the country. The

activities of different department are differences as per the important of the

department. The format of the report will be followed as per the guideline given by

the North South University authority.

History of the BRAC Bank:

BRAC Bank Ltd, a full service commercial bank with Local and International

Institutional shareholding, is primarily drive by creating opportunities and pursuing

market niches not traditionally met by conventional banks. BRAC Bank has been

striving to provide “best-in-the-class” services to its diverse range of customers

spread across the country under an on-line banking platform.

Today, BRAC BANK Limited, one of the latest generation of commercial banks

which started its journey on the 4th of July 2001 with a vision to be the absolute

market leader through providing the entire range of banking services suitable to the

needs of modern and dynamic banking business as well as to promote broad based

participation in the Bangladesh economy through the provision of high quality

banking services. The unique strength of BRAC Bank lies in the fact that BRAC one

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of the world’s largest private development organization is its key shareholder and the

bank’s vision are thus aligned with those of BRAC.

The reason BRAC Bank is in business is to build a profitable and socially responsible

financial institution focused on markets and businesses with growth potential, thereby

assisting BRAC and stakeholders build a “just, enlightened, healthy, democratic and

poverty free Bangladesh. BRAC Bank fulfils the purpose by reaching for high

standards in doing everything for their customers, shareholders, associates and

communities upon, which the future prosperity of their company rests. BRAC Banks

envisages providing mass financing by increasing access to economic opportunities

for all individuals and business in Bangladesh with a special focus on currently under-

served enterprises across the rural-urban spectrum.

BRAC Bank is surviving in the large banking arena through its unique and

competitive products and it is the only local bank providing 100% integrated on-line

banking services. BRAC Bank Limited consists of four major business divisions

namely Corporate Banking Division, Retail Banking Division, Small and Medium

Enterprise (SME) and Foreign Trade & Treasury. Corporate Division provides full

range of commercial banking products and services to any potential corporate clients

including multinationals, large or medium local corporate, NGOs, institutional bodies.

Retail Division offers a wide array of lucrative and competitive banking products to

the individual customers of the bank. Currently there are six lending products and a

number of other attractive new products will be launched shortly. It also offers

different types of term deposit scheme and attractive STD & Savings deposit schemes

giving interest on daily balance.

As part of the total banking solution it has introduced an innovative and one of its

kinds Remittance Service under the style and name “Secured & Easy Remittance

Service” (SERS). The aim of the program is to introduce easy and secured remittance

service whereby people will be comfortable and secured in remitting funds without

hassle and delay. Using the countrywide network of BRAC comprising more than

1100 field offices the SRS will ensure secured and only 24 hour lead time delivery of

remittance anywhere in Bangladesh.

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BRAC Bank Limited, hereinafter called BBL, is a fist growing third generation-

scheduled commercial bank incorporated on 20th May 1999 as a public limited

company under Companies Act, 1994 with multinational collaboration including IFC

of The World Bank Group & Shore Cap. BBL started its operation on 4 th July 2001.

The main sponsor of the bank is the BRAC. The Bank is pioneer and focused on

pursuing unexplored market niches in the Small and Medium Enterprise Business,

which hitherto has remained largely untapped. BBL believes, this sector of the

economy can contribute the most to the rapid generation of employment in

Bangladesh. BBL caters the banking services to its rapidly growing customers

through 18 branches and 292 SME Unit Offices.

Shareholders of BRAC Bank Ltd:

The shareholders of BRAC Bank are as follows:

Table 1.1: Shareholders of BRAC Bank

Shareholders PercentBRAC 31.74%

IFC 9.50%Shore Cap International 8.76%

General Public through IPO 40%Non-Residents Bangladeshi's 5%Mutual Funds through IPO 5%

Total 100%

Fig. 1.1: Shareholders of BRAC Bank

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Board of Directors:

Table 1.2 presents the names of BRAC bank directors and their status.

Table 1.2: Board of Directors of BRAC Bank

SL.# Name Status with the Bank

01. Mr. Muhammad A. (Rumee) Ali Chairman

02. Mr. Quazi Md. Shariful Ala Director

03. Mr. Mark A. Coffey(Nominated by SHORECAP INTERNATIONAL LIMITED)

Director

04. Ms. Tamara Hasan Abed Director

05. Mr. Shib Narayan Kairy Director

06. Ms. Nihad Kabir Director (Independent)

07. MR. A.E.A. Muhaimen Managing Director and CEO

Management of BRAC Bank Ltd:

The Board of Directors is the top management and policy-making body of BRAC

Bank limited. Presently the Board consists of a chairman and four directors. It is to be

noted that the Managing Director, is also a member of the Board. The Directors are

appointed from amongst those who have had experience and shown capacity in the

field of finance and banking, trade, commerce, industry agriculture.

The Chief Operations Officer executes all the activities under the direction of the

Board. The officers and the other line and staff personnel are appointed by Bank’s

own Recruitment Committee.

Fig. 1.2: Management Structure

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Managing Director

Deputy Managing Director

EVP & Chief Operation Officer

VP & Head of SME

A VP & Head of Credit

Management Team:

A.E.A MuhaimenCEO &Managing DirectorKaiser Tamiz AminChief Operations OfficerFiroz Ahmed KhanHead of Retail BankingMd. Rafat Ullah KhanHead of CreditRais Uddin AhmadHead of Risk Management& Company SecretaryNaushad HussainHead of Probashi BankingTahniyat Ahmed KarimHead of Human ResourcesMd. Sarwar AhmedHead of Impaired Asset Management

Faruk AhammadHead of Financial AdministrationFarzana ChowdhuryHead of Small & Medium Enterprise (SME)Md. Rahmat PashaHead of Treasury & Financial InstitutionKhwaja ShahriarHead of Corporate BankingShah Alam BhuiyanHead of Enterprise Risk ManagementMizanur Rahman ChowdhuryHead of TechnologyAbedur Rahman SikderHead of Marketing & Corporate Affairs

Vision:

Building a profitable and socially responsible “Double Bottom Line” driven financial

Institution focused on pursuing existing and underserved markets and business with

growth potentia, thereby assisting BRAC and stakeholders build a “just, enlightened,

healthy, democratic and poverty-free Bangladesh”.

Highlight of Long Term Budget:

Table 1.3: Long Term BudgetPARTICULARS ACTUAL (2008) PROJECTED (2009)Num. Of Branch 36 60

Unit Office 381 450Staff 2400 4100

Profit Before Tax 60(crore) 232 (crore)ATM 78 50

POS 350 500

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Mission:

Sustained growth in ‘Small & Medium Enterprise’ sector.

Continuous low-cost deposit growth with controlled growth in Retail Assets.

Corporate Asset to be funded through self-liability mobilization. Growth in

Assets through Syndications and investment in faster growing sectors.

Continuous endeavour to increase fee based income.

Keep our Debt Charges at 2% to maintain a steady profitable growth.

Achieve efficient synergies between the Bank’s branches, SME unit offices

and BRAC field offices for delivery of Remittance and Bank’s other products

and services.

Manage various lines of business in a fully controlled environment with no

compromise on service quality.

Keep a diverse, far flung team fully motivated and driven towards

materializing the Bank’s vision into reality.

Goals:

Create a new breed of entrepreneurs.

Build awareness among Expatriate Bangladeshis to expand use of Banking

channels for remittance.

Expand use of technology and plastic to provide financial solutions to the

mass and under-served market.

Synergy between financial and non-financial institutions to develop innovative

financial products for customers across rural-urban spectrum.

Objectives of the Bank:

To provide wide range of financial services professionally, efficiently and

competitively to achieve per-eminent position in chosen market.

Diversity revenue stream through product innovation.

A Well-diversified credit portfolio, which produces a reliable and consistent

return to investment.

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Values of the Bank:

Our Strength emanates from our owner BRAC. This means, we will hold the

following values and will be guided by them as we do our 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 based on merit.

Base recognition and reward on performance.

Responsible, trustworthy and law-abiding in all that we do.

Target Market:

Pharmaceuticals, toiletries, chemicals and pesticides.

Power Generation, oil exploration, industrial and household gases (Liquid

Petroleum Gases etc.).

Edible Oil.

Bulk Trading essential Commodities, Industrial Raw Materials, Agricultural

Inputs, and Cement.

Garments, Textiles and related backward Linkages industries including

sinning, knitting, yam, garments accessories etc.

Food Processing and Beverage Industries.

Cable and Cable wire.

Information Technology.

Leasing companies/Non banking financial institutions.

Health Service Industry.

Non Governmental Organization (N.G.O) and other international

Development Organization.

Importers/Dealers of machinery, industrial, electrical equipment.

Educational Institutions.

Bone china, ceramics, melamine, plastic products.

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Manufacturing and Trading of Consumer Durables.

Telecommunication.

Contractor Finance.

Ship Breaking, Re-rolling, Corrugated Iron (CI) Sheet Mfg. and related

business.

Air Lines, Shipping Lines, Freight Forwarders, Testing and Inspection

agencies.

Footwear and Leather.

Tobacco Products.

Tea.

Importers, Whole seller, Retailer.

Individuals.

Target Customer Group:

Leading Domestic Organizations,

Corporate and Trading Houses,

Local medium and large corporate,

Multinational Companies (MNCs’).

NGOs’,

Educational Institutions,

Individual

Information Technology in Banking Operation:

BRAC Bank Limited has adopted automation in banking operation from the first day

of its business. The main objective of this automation is to provide efficient and

prompt services to its valued clients. At present all the branches of the bank are

computerized to provide best security to the information. BRAC Bank Limited is

providing comprehensive range of banking services with utmost care and efficiency to

its Consumer. Ascend Millennium Banking System is developed and customized by

South Tech Ltd. Several numbers of system analyst and programmers are dedicated

towards development and customization of the software and after sale service.

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Technology:

BRAC Bank Limited Brings 36 branches under one umbrella, introducing SMS

Banking, Internet Banking and interfacing ATM Network through the Online Banking

software which has been the major achievements. Consequently our Consumer is

enjoying services from Anywhere Anytime. BRAC Bank is the first bank to online the

rural branches.

Challenges:

Ensure compliant BRAC Bank.

Achieve satisfactory Audit rating for CSD.

Ensure efficient CONSUMER services to our internal and external clients.

ATM support.

Smooth operation of CSD functions.

Develop and retain efficient human resources for CSD team.

Initiatives:

Strength CSD tools by developing CSD Operation, monitoring processes and

efficient people.

Develop and implement quarterly self audit questionnaire.

Set Smooth and efficient Service delivery Process for our CONSUMER.

Develop efficient working force by providing hands on training, relevant HR

training courses.

Conduct in-house training program on Bangladesh Bank & BRAC Bank

Regulations.

Corporate Social Responsibility:

Just as BRAC Bank have a corporate identity and also a social identity too. As a bank

BRAC Bank are socially responsible. Fifty percent of It’s Loan portfolio is diverted to

Small and Medium Enterprise banking, and as a financial intermediary it channel

funds from the surplus ends to the needy. Country-wide network of SME Units cater

to the needs of small entrepreneurs to help them build their asset base. BRAC Bank is

market leaders in SME, striving for socio-economic upheaval in Bangladesh. A

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portion of its revenue is channelled to support BRAC schools, where children study

for free. 70% of these children are female.

The Brand Promise of BRAC Bank Ltd:

The brand promise of BRAC Bank Ltd. is – Astha Obichol. It is a Bengali word that

denotes trust on BRAC Bank remains the same no matter what in terms of quality

service.

LOGO:

The logo of BRAC Bank has been prepared keeping in mind the goal of the

organization. The square structure of the logo means solid and strong. The Golden

color in the lower portion of the logo means the ‘Golden Bangladesh & her fertile

land’. The Blue color in the upper portion means ‘the sky with enormous & unlimited

opportunity’. The white colour curve means ‘Growth and Progress’. White circles in

the blue color mean the flashing sun that gives light to everywhere.

Fig. 1.3: BRAC Bank Logo

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Organization Structure and Responsibilities:

The five members if the Board of Directors is responsible for the strategic planning

and overall policy guidelines of the bank. Besides, there is an audit committee in the

Board to oversee compliance of major regulatory and operational issues.

The CEO& MD, Deputy MD and group executives are responsible for achieving

business goals and overseeing the day today operations. The CEO and MD assisted by

a senior management group supervise operation of various decisions centrally and

coordinate operation of branches.

There is also a management committee comprising member of the senior executive

headed by CEO and MD to look into all operational function and risk management of

the bank. The workflow of the organizational structure is given in Fig. 1.4.

Human Resource Development:

Human Resources Development activities aim at fulfilling the bank's Mission. One of

their four major missions is to: "Provide service to our clients with the help of a

skilled and dedicated workforce whose creative talents, innovative actions and

competitive edge make our position unique in giving quality service to all institutions

and individuals that we care for."

Skilled and dedicated workforce with creative talents, innovative actions are not

always readily available. Appreciating the scarcity of such manpower, the bank from

the very beginning laid importance to HRD that conceptually includes activities like:

pre-recruitment drill, recruitment, induction, training in the Academy, job rotation,

placement & posting, reward and promotion.

Management of BRAC Bank not only appreciates the need of skills required for day

to day banking but also realizes the need for skills to meet the global & national

financial and economic environments that are changing fast. Meeting the needs of

new skills arising out of Financial Sector Reforms Program (FSRP) is also a major

concern of the management. Therefore they have a training academy that is fully

equipped with a professional library, modern training aids and professional faculty.

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The training academy of BRAC Bank re-designs its courses and programs regularly to

meet the requirement of new skills and develop its human resources accordingly.

Fig. 1.4: Workflow of the organizational structure

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Workforce:

At present there are 2400 employees working for the company. Among them 1020

employees are woman where as the number of female staffs were only 30 at the very

beginning.

Branch Network:

There are 36 branches of BRAC Bank limited all over the country. All the branches

are involved in providing service to its clients in various ways. There are 17 branches

in Dhaka, 8 branches in Chittagong, 5 branches in Sylhet, 3 branches in Jessore and

Narshingdi and also 2 or 1 branches in every remote districts of the country to serve

its customers the very best.

Fig. 1.5: BRAC Bank branches in Bangladesh map

Different Departments of BRAC Bank Ltd.:

There are many concern departments, which are always taking care to give proper and

adequate service to the clients. Different departments of BRAC Bank are follows:

Corporate Banking

Retail Baking

Trade Finance

SME (Small & Medium Enterprise) Division

GIS (General Infrastructure Service)

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Credit Division

CSD (CONSUMER Service Delivery)

Remittance

FAD (Financial Administration Department)

Treasury

CID (Channel Infrastructure Department)

IT (Information Technology)

HRD (Human Resource Department)

Risk Management

LA (Loan Administration)

Marketing & Product Development

CORPORATE BANKING:

The Corporate Banking Division provides full range of commercial banking products

and services. Many Departments such as Foreign Trade, Treasury, and Credit

Administration etc. play the support role for a comprehensive range of service to the

corporate Banking Division. BRAC Bank’s Corporate Banking team exists to provide

both banking services and a financial partnership with local large and medium

corporate, trading houses and joint ventures. As the financial partner of choice for the

corporate sector

Corporate Banking Structure:

The Corporate Banking Division has a centralized structure through on-line banking

system. Any credit facility is processed at the Corporate Banking Division, Head

Office. After sanctioning of the facility, the limit is put online and the CONSUMER

can enjoy the facility from any of the BRAC Bank branches. Strict adherence to

internal control guidelines and other legal and statutory compliance are followed. The

Credit approval process involves separate Credit Division, the Managing Director and

finally the Board.

Product/Service objectives:

The Corporate Banking Group would try to serve the financial market of the country

with the following objectives.

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To develop and sustain mutually beneficial CONSUMER relationships based

on high quality service and innovative products.

Maintaining a diverse and quality asset base and pursue a sustainable growth

strategy.

To pursue a management style that contributes to the well-being and

development of a fully responsible and accountable workforce under a high

corporate standard and business ethics.

To provide and deliver services in a cost-effective manner.

RETAIL BANKING:

Most of the Bank in our country are operating locally basis. So, most of their

functions are concentrated on retail banking. BRAC Bank Limited is not exception of

them. It has 36 Branches all over Bangladesh. The braches are as follows:

Table 1.4: Branches of BRAC Bank

Branches of Dhaka:

Gulshan

Nawabpur

Moghbazar

Keranigonj

Motijheel

Dhanmondi

Banani

Ganakbari

Sat Masjid.

Uttara

Mirpur

Sonagazi

Narayangonj

Rampura

Mohammadpur

Branches of Chittagong:

Agrabad

Momen Road

Halishahor

Branches of Sylhet:

Sylhet

Beani Bazar

Zinda Bazar.

Biswanath

Moulovibazar

Nabiganj

Other Branches

Comilla

Rajshahi

Jessore

There is One Sales Center in Badda, which sells A/C of all branches. BRAC Bank has

planned to open more Branches Within this year all over the country. There are more

than 410 unit offices under SME division to support retail banking. Retail banking

offers every facility except Corporate Transaction.

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TRADE FINANCE:

Trade finance originally facilitates “International Business” They handle L/C (Letter

of Credit) and do necessary activities related to international trade. Check validity &

authentication of trade license; import Registration Certificate, TIN Certificate, Vat

Registration Certificated, and Insurance Cover Note. Received L/C LIMIT from

Corporate. Signature Verification of Import on L/C App. Form & Performa Invoice

check importer’s Signature on L/C AF & IMP form, available balance of Importer’s

A/C. L/C Liability Create, Margin & Income realized From Importer’s Account, entry

to L/C ledger & register book. LC Proposal sent through SWIFT after proper

authentication.

Trade Finance Check EXP certificate, C&F certificate Issue, NOC Certificate Issue,

Intimate to Exporter after Receiving Remittance. Collect necessary documents from

Exporter & Credit export proceeds if documents found in order. They pass necessary

voucher/ register Entry. Send Export documents for Collection to Foreign Bank (bill

of exchange, Invoice Packing List, Certificate: Of Origin, Bill Of Lading or Airway

Bill, GSP Certificate) with Bank Forwarding & document endorsement. Receives

remittance credit proceeds to party A/C after realized necessary charges.

SME (Small & Medium Enterprise) DIVISION:

This department of BRAC Bank Limited works widely over the country. There are

more than 300 unit offices of SME division all over the country sell different type of

loan to different small and medium enterprise. They provide loan, which are to be

paid in installment. This department also monitors the recovery of the loan and in case

of inconsistency they take necessary action to recovery the loan.

Product Features of SME:

There are 4 products of SME:

Aroggo Rin

Apurbo Rin

Pathshala Rin

Supplier Finance

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GIS (General Infrastructure Services):

Present infrastructure:

Senior Manager, GIS

Manager, Procurement

Manager, Operations

Manager, Logistics

Manager, Premises and Maintenance

Procurement:

Need Assessment, Evaluation and Setting the target of procurement

Procedural formalities in terms of approval for procurement

Vendor management & negotiation

Cost effectiveness

Quality control

Timely supply

Supply chain management.

Operation:

Handle bog and resolve all GIS related queries in 24-hour basis in the form

help desk concept.

Follow procedures for continuation of business and crisis management.

First contact person to receive and record complaints including all types of

requisitions and forward those to concern GIS units.

Handle all security related issues.

Manage and control dispatch.

Logistic:

Arrange facilities and services for the key bank events.

Maintain Petty cash to rent up sudden logistic needs.

Manage vehicle fleet of the bank.

Negotiate contracts for provision of outsourced services.

Official Trail Arrangements.

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Premises and Maintenance:

Ensure comfortable and secure working environment.

Asset management.

Insurance coverage of all bank assets.

Manage all related issue of Maintenance

CREDIT DEPARTMENT:

Basic Definition:

A Contractual agreement in which borrower receives something of value now agrees

to repay the lender at some later date, Loan-an arrangement in which a lender give or

property to a borrower, and the borrower agrees to ruler the property or repay the

money, usually along with interest, at some future point(s) in time. As Financial

intermediaries, Lending is one of the main functions of a Bank.

Functions:

At present, Credit Division performs following activities:

Credit Approval/Process:

1. Retail Credit

2. Corporate Credit

3. SME (From 15 to 30 lac)

Collection & Monitoring Activity

1. Central Collection Unit (CCU).

Objectives:

Managing credit exposure

Managing credit risk

Compliance with the issue of Bangladesh Bank & BRAC Bank Ltd.

Support all businesses of the Bank

Collection of Overdue loans

Recovery of Bad debts.

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Products:

Credit Division supports the businesses products of following Divisions:

Retail

Corporate

SME

Category of Products on the basis of security:

Secured Facility

Partly Secured/ Unsecured Facility

Secured Facility:

Which is baked by 100% Cash Covered/ other security

Secured Loan

Secured Overdraft

Premium Term Deposit (PTD)

Car Loan

Home Loan

Basic Elements for Judging a Borrower:

5 C’s of Credit

Character

Capacity

Capital

Conditions

Collateral

Source of Borrower Study:

Loan application

Financial statement

Study of Account

Market reputation

Bangladesh Bank

Different Banks

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Personal Interview

Personal Visit

Net-Worth Position

Other Source:

- Registration Office

- BRTA

- Press report

Credit Principals for Lending Decisions:

Assess the Consumer’s character for integrity and willingness to

repay

Only lend to the Consumer who belongs to a fixed Income group or

a stable business income.

Only lend to the staff of widely known and highly reputed

companies having an unquestionable business track record.

Only lend to the staff of such companies which have professional

career advancement platform for its people.

Assess carefully the Integrity and loan repayment capacity of the

guarantor.

Plan for the possibility of default

Use common sense and past experience in conjunction with

thorough evaluation and credit analysis. Do not base decisions

solely on Customer’s reputation, accepted practice, other lender’s

risk assessment or the recommendations of other officers.

Behave ethicality in all credit activities.

Be Proactive in identifying, managing and communicating credit

risk

Be diligent in ensuring that credit exposures and activities comply

with the requirement set out in this Product Program.

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CONSUMER SERVICE DELIVERY DEPARTMENT:

It is the processing Center for BRAC Bank. All the back office activities take place in

this department. It performs the following activities:

Ensure cheque requisition requests are attended.

Ensure cheque Books are printed and checked as specified in the requisition

request.

Mailing of cheque books to the respective branch.

Ensure cheque leaves stock register are properly maintained.

Ensure ATM Card requisition requests are attended.

Ensure ATM Cards Are checked as specified and delivered to the respective

locations.

Ensure Blank ATM Cards are balanced as per inventory register.

Ensure Cheque Books, ATM Cards are delivered to the respective branches at

the specified timeline.

Mailing welcome letter.

Mailing FDR renewal.

Dormant account activation.

Reactivation of Dormant/Closed Account.

Account opening data entry in system.

Maintain sufficient stock of Govt. Bonds/Coupons.

Timely reporting of reimbursement/Claiming statement of Govt. Bonds.

Statement of commission earning of Govt. Bonds on a monthly basis.

Welcome Account Opening.

Change of Address in software system.

Changing made of operation of company account.

Opening of Insta Cash Account.

Printing and mailing of account statement month/quarterly/half yearly/yearly.

Maintain sufficient of statement letter sheet/welcome letter/letter half

paper/ATM card holder/ATM Welcome letter/Terms and condition/Window

envelope/ATM Bank Card/Cartridge.

Department of My Internship:

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I have worked in Premium Banking which is the part of the Retail Banking. To work

in the Premium Banking I also have to do the other related departments’ works which

are Retail Banking, CSD Department, Card Department, and Loan Department etc.

which I will describe in the following segments.

Department Goals:

Premium Banking highlights the importance of a small customer segment,

which holds a major stake of BRAC Bank’s Retail Banking portfolio.

Providing relationship-based banking services to this customer segment.

Premium Banking will safeguard the Bank’s Retail and SME portfolios.

Add these portfolios to increase in the Bank’s liability-base.

Retail Banking:

“Retail Banking Unit” has positioned itself as a major channel of business, focussed

Fig. 1.6: Retail Bankingto meet banking needs of individuals. This unit takes foremost funding responsibility

of the bank and is committed to offer multifarious services to entire customer base of

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Retail Bankin

g

Sales

Distribution

Service Quality

Alternative DeliveryChannel

PremiumBanking

Non-FundedBusiness

(NFB)

Credit Collection Unit (CCU)

Business Intelligent

Unit

the bank through Branches. Alternative Delivery Channels, Premier Banking services

and literally taking Retail Banking products to doorsteps through Direct Sales force.

Of many deliverables, “Retail” concentrates mostly to ensure ‘service excellence’

across all points of services, initiates regular research works through “Service Quality

Unit” and tailors superior service propositions for valued customers.

Premium Banking:

INTRODUCTION:

Premium Banking is a personalized, prioritized and privileged service that aims to

provide customized banking solutions to simplify a customer’s life. High-net-worth

customers and other VIPs compromise the target market. Premium Banking (PB) is

the exclusive service of banking activities. Total banking procedure has a special

consideration on this department. Premium Banking has been established with one

purpose: to provide the best possible banking solutions for you, a highly valued

BRAC Bank customer. We recognize that you have worked hard to create the best

possible future for yourself, and we are dedicated to enhancing that future. Premium

Banking is our way of personality acknowledging your relationship with BRAC Bank,

and with this innovative approach, the future of banking is truly exciting.

ELIGIBILITY CRITERIA (REGULAR):

Maintenance of a minimum balance of deposits or cumulative credit exposure, or a

combination of both (i.e. funds under management), is the basic eligibility criteria.

The minimum FUM for an individual/joint accountholders is currently BDT

2,000,000. This minimum balance is subject to change from time to time at the

Bank’s discretion.

FAMILY PREMIUM BANKING:

Up to 4 family members may combine their deposits or cumulative credit exposure

(as above) to attain a specified minimum balance. For the purposes of this system of

eligibility, “family members” are defined as: father, mother, brother, sister, son,

daughter and spouse. The minimum FUM for Family Premium Banking is currently

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BDT 3,000,000. This minimum balance is subject to change from time to time at the

Bank’s discretion.

OTHER ELIGIBILITY CRITERIA:

Premium Banking may also be offered to very important or socially influential

persons in lieu of the minimum balance. Head of Retail Banking retains the authority

to approve applications for this service to any such persons, on a case-by-case basis.

This will help to safeguard and maintain relationships with key persons who may

directly or indirectly affect the bank’s reputation in the industry.

FEE INCOME:

Each Premium Banking customer (including each separate customer under Family

Premium Banking) will be levied an annual Premium Banking service fee of BDT

5,900 (excluding VAT). This fee is subject to change at any time at the Bank’s

discretion and will be advised to customers accordingly.

BASIC FEATURES:

Dedicated Relationship Manager: He/she will be the customer’s single point

of contact for all banking requirements.

Preferential Rates and Charges: Most regular Retail Banking fees are

waived; for a detailed list consult the relevant attachment.

Free Auxiliary Services (SMS/Internet/Phone Banking): Exclusive

facilities may be added for to each, which will not be offered to all customers.

Special Debit Cards and Chequebooks: These will help to identify the

customer at branches and by the Bank’s clearing unit when making transfer

cheque payments.

Greater Cash Access Limits at ATM/POS: This facility is currently on hold

due to system inadequacies; ATM/POS cash access limits will be enhanced

upon software upgrade.

Pre-approved VISA Gold Card: Please note that the customer may have to

fulfill extra credit eligibility criteria in certain cases.

Privileged Arrangements and Discounts: Tie-ups with various retail outlets

will be made to provide this facility to customers.

26

SERVICE DETAILS:

Home Delivery Service (non-cash items only):

Chequebooks

Debit/Credit Cards

Debit/Credit PIN

Accounts Statements

Drafts & Pay Orders

FD & DPS Certificates

Traveler’s Cheques

Any banking forms/letters and other non-cash services

Honorary Premium Banking: Up to 2 family members may receive a special

“Honorary” Premium Banking card which identifies the person’s link to a

Premium Banking customer. The only facilities that may be availed with this

card are the privileged and discount arrangements at selected retailers.

Medical Facilities:

Treatment facilitation at affiliate hospitals

Bangladesh Bank documentation and liaison

Ticket booking and purchase

Visa arrangements and embassy fee payments

Room and board arrangement at affiliate hotels

Foreign currency and TC purchase and encashment

Medical Loan

Student Facilities:

Campus Account

Student File processing and maintenance

Immediate tuition fee and student lodging payment

Bangladesh Bank documentation and liaison

Ticket booking and purchase

Visa arrangements and embassy fee payments

27

Foreign currency and TC purchase and encashment

Study Loan

Travel Facilities:

Ticket booking and purchase

Visa arrangements and embassy fee payments

Room and board arrangement at affiliate hotels

Foreign currency and TC purchase and encashment

Travel Loan

NRB Facilities:

Pick-up from and drop-off to the airport

Custodianship of valuables at selected branches

Hotel booking

Rental car arrangement

Foreign currency and TC purchase and encashment

The basic idea behind Premium Banking is in the provision of fast and easy service.

By providing regular banking items right to the customer’s residence or office, the

Home Delivery service reduces the customer’s reliance on the branch. This means

that the customer can save time and effort simply by instructing his or her dedicated

RM to make a delivery.

While it is very basic concept, home delivery of regular banking services is not being

provided in a structured manner by any other bank in the country. As such, this

facility will highlight BRAC Bank’s unique approach to personalized banking and

give Premium Banking an edge over similar services.

DELIVERABLE ITEMS:

The delivery items are listed in Table 1.5 below:

28

Table 1.5: Delivery items

Chequebooks Demand Drafts & Pay Orders

Debit/Credit Cards FD receipts & DPS certificates

Debit/Credit PIN Traveller’s Cheques

Accounts Statements Any banking forms, other non-cash services

Bank Certificates

DISPATCH POINTS:

The dispatch points of different delivery items are listed in the Table 1.6 below.

Table 1.6: Dispatch points

From Head Office From Branch

Chequebooks All other items

Debit/Credit Cards

Debit/Credit PIN

BA Letters

Separate Messengers will make the card and PIN deliveries to ensure the customer’s

safety.

MESSENGER LOCATIONS:

Messengers will be distributed among the following locations, reporting to the RM at

the concerned branch; Messengers based at the Head Office will report to Senior

Manager, Premium Banking:

Table 1.7: Messenger Locations

Head Office (x2) Gulshan Banani Dhanmondi

Moghbazar Motijheel Agrabad

PROCESS:

RMs will make the appropriate entry in the designated Home Delivery Request. This

form must be submitted to the concerned BM or CSM for action. Once the requested

tem has been issued or obtained, it will be sealed in a Premium Banking envelope and

29

handed over to the Messenger along with the Home Delivery Confirmation, along

with any application form that needs to be signed by the customer in order to have

obtained the item normally (e.g. DD/PO form, Document Issue form, etc.).

30

Customer will place a home delivery request through RM.

RM will instruct the concerned Branch to

issue/obtain the requested item(s).

Branch will issue/obtain the requested item(s), fill out and

sign the Confirmation.

Branch will hand over the item(s) in a sealed envelope along with the Confirmation

to the Messenger.

Messenger will make the delivery to the Customer,

obtain his/her signature, and give him/her the “customer’s copy” of the Confirmation.

Messenger will return the Confirmation to the Branch

for signature verification.

Branch will notify RM of

mismatch.

Branch will retain the Confirmation.

RM will call the Customer to confirm

item(s) receipt.

Signature matches

Signature does not match

RM will notify Branch of delivery

confirmation.

Fig. 1.7: Process flow

Messengers are also under instruction to make the delivery to the customer directly.

RMs will inform the customer in advance to receive his or her package personally and

sign the Home Delivery Confirmation and any other appropriate forms. A process

flow is attached in Fig 1.7 for better understanding.

SPECIAL CONDITIONS:

Under no circumstances will RMs or Messengers deliver or receive cash or any bearer

or cash cheques for safety reasons. Traveler’s Cheques up to USD 6,000 (or

equivalent) may be home delivered. In such cases, RMs will make the delivery

personally in an office vehicle to ensure security.

SCHEDULE OF CHARGES:

Table 1.8: Schedule of ChargesACCOUNT RELATED Regular Premium Banking

Account Maintenance BDT 600 (annual) –

Account Closing BDT 300 –

Chequebook Issue BDT 100 –

ATM/DEBIT CARD Regular Premium Banking

Service

- Classic Card BDT 200 (annual) –

- Campus Card BDT 425 (annual) –

Co–Branded Card BDT 495 (annual) –

Replacement

- Classic Card BDT 200 –

- Campus Card BDT 425 –

Co–Branded Card BDT 495 –

CASH TRANSACTIONS

(INTERCITY)Regular Premium Banking

BDT 1 and above BDT 100 –

BDT 100,000 and above BDT 200 –

31

BDT 500,000 and above BDT 300 –

BDT 1,000,000 and above BDT 1,000 –

BDT 5,000,000 and above BDT 2,000 –

CASH TRANSACTIONS

(WITHIN CITY)Regular Premium Banking

BDT 2,500,000 and above BDT 200 –

BDT 5,000,000 and above BDT 1,000 –

CERTIFICATE ISSUE Regular Premium Banking

Account Statement

For current year BDT 100 –

Per previous year BDT 200 –

Balance Certificate

General (same/next day) BDT 150 / BDT 100 –

To specific party (same/next

day)BDT 300 / BDT 200 –

Solvency Certificate BDT 300 –

CHEQUE RELATED Regular Premium Banking

Stop Payment

Account Payee cheque BDT 200 –

Cash cheque BDT 500 –

Stop Payment Cancellation BDT 200 –

Return (due to insufficient

funds)BDT 500 –

Outstation Cheque Collection BDT 200 –

Cheque Purchase

LCY BDT 500 + postage BDT 500 + postage

FCY2.00% (min. BDT

1,000)

2.00% (min. BDT

1,000)

DD / PO / FTT Regular Premium Banking

32

LCY DD/PO

Issue – up to BDT 100,000 BDT 100 –

Issue – above BDT 100,000 BDT 200 BDT 100

Cancellation BDT 300 –

FCY DD

Issue BDT 1,000 BDT 500

Cancellation BDT 1,000 –

FTT (SWIFT) Advice

Issue BDT 1,000 BDT 500

Cancellation BDT 1,000 –

FCY / TC RegularPremium

Banking

FCY Issue 1.00% 0.50%

TC Issue 1.00% 0.50%

TC Encashment – BBL

Accountholder 0.25% (min. BDT 500) –

Non–Accountholder 0.50% (min. BDT 500) BDT 500

TC Encashment – other banks’

Accountholder 0.50% (min. BDT 500) BDT 500

Non–Accountholder 1.00% (min. BDT 500) BDT 500

Passport Endorsement

Accountholder BDT 200 –

Non–Accountholder BDT 500 –

Certificate of TC Encashment

Accountholder BDT 200 –

Non–Accountholder BDT 300 –

Endorsement from FCY Account BDT 200 –

LOAN RELATED RegularPremium

Banking

Documentation BDT 100 –

Quotation Change BDT 500 –

33

Security Change BDT 500 –

Security Documentation Copy BDT 200 –

Loan Rescheduling1.00% on o/s (max. BDT

15,000)

1.00% on o/s

(max. BDT

15,000)

LOCKER FACILITY RegularPremium

Banking

Small Locker BDT 2,500 (annual)BDT 1,250

(annual)

Medium Locker BDT 3,500 (annual)BDT 1,750

(annual)

Large Locker BDT 4,500 (annual)BDT 2,250

(annual)

MISCELLANEOUS RegularPremium

Banking

Account to Account Fund Transfer BDT 200 –

BBL Statement Verification BDT 200 –

Certificate of Inward RemittanceBDT 150 (per

remittance)–

Duplicate Instrument IssueBDT 500 (per

instrument)–

Processing Standing Instruction BDT 100 (per instance) –

Mail Forwarding

To customer’s address abroad BDT 200 + postage –

To specified organization BDT 1,000 + postage –

STUDENT SERVICE RegularPremium

Banking

Document Verification BDT 2,000 BDT 1,000

File Maintenance BDT 3,500 (annual) –

34

- Premium Banking Membership Fee is BDT 5,900 (annual).

Fig. 1.8: Organogram Premium Banking

Major Functions of the Department:

Major functions of Retail Banking include general banking, loan and advance and

clearing and remittance and foreign exchange. The major functions are given in the

workflow below:

Motijheel Lounge

RM

ARM posted Motijheel ]

ARM

Uttara PB Lounge

SRM

ARM

RM

RM

ARM

Banani RM

Chittagong Lounge

RMARM

Sylhet

ARM

ARM

Dhanmondi PB Lounge

SRM

RM

CSO

Moghbazar Lounge

RMARM

ARM development ]CSO

35

Major Functions

General Banking

Credit and Advance

Clearing and Remittance

Foreign Exchange

Deposit Account

Department

Cash TransactionDepartment

Remittance Department

Billing Department

Account Department

Swift for Foreign Trade ATM Services

Remittance Service Cash ManagementService

Asset Management Payments & Clearing

Treasury Service Safe Deposit Locker Service

Collection Service Employee Benefits

Retail BankingCorporate Banking

Trade FinanceProject FinanceSmall Enterprise

FinanceConsumer Finance

Syndication

SRM

Gulshan PB Lounge

HOPB

Fig. 1.9: Major functions

Description of its business (Product and Services)

Retail Banking offers the following products and services to its valued customers as

the business revolves around the demands and needs of the clients.

Fig. 1.10: Products and Services

Functions of PB in BRAC Bank, Head Office, Gulshan

Branch:

As given in the organ gram, Gulshan Branch consists of 24 employees who directly or

indirectly serve their customers in various ways. The major functions of the bank have

been given before. Now they will be discussed thoroughly by highlighting all the

functions of BRAC Bank, Head Office, Gulshan branch.

Job Description

36

Swift for Foreign Trade ATM Services

Remittance Service Cash ManagementService

Asset Management Payments & Clearing

Treasury Service Safe Deposit Locker Service

Collection Service Employee Benefits

Retail BankingCorporate Banking

Trade FinanceProject FinanceSmall Enterprise

FinanceConsumer Finance

Syndication

Before proceeding to the functional activities of the overall Premium Banking, the

functions of the Senior Relationship Manager and Relationship Manager are given

below. This is because they are mainly involved in all the major functions.

Senior Relationship Manager (SRM):

- Overall supervision of the branch in its day today activities.

- Monitor and coordinate in loan processing.

- Special concentration to recover bad advances by meeting the defaulters and

constantly communicate with bank lawyer for taking necessary legal action

against the defaulter client.

- Holding meeting with the staffs and motivate them to improve the overall

business performance.

- Co-ordinate with the Head Office to sanction different types of advances and

advance related work.

Relationship Manager (RM):

- Documentation and disbursement of necessary Circulars from the Head Office

to the branch staffs.

- Monitoring and follow-up with the employees within the branch.

- Help in remedial asset management

Associate Relationship Manager (ARM):

- Provide friendly and responsive customer service by using skills for excellent

customer service.

- Ensure home delivery service request are met.

- Ensure superior service quality and out serve commitments.

- Interview and answer all sorts of customer queries.

- Handling customer complaints in a positive manner and converting complaints

into service improvement opportunities.

- Pro-actively analysing and formulating patterns of customer’s changing needs

of financial services and recommending/suggesting ways to tackle those.

- Manage our Premium Banking Team.

- Create an environment where value center will operate effectively as a team

demonstrating the values of the Bank.

- Keep good relationship and support your RM for all matter in tour PB team.

37

General Banking:

General banking is the heart of banking activities. Total banking procedure start with

this department. The detailed description of general banking is given below.

Term Deposit:

FDR: High interest fixed deposit.

Money Multiplier: Double/Triple/Quadruple your deposit in a fixed

amount of time.

IFFD: You do not need to wait for maturity date to get interest, take

instant interest on your deposit.

FFD: Freedom Fixed Deposit, highest interest rate ever offered by BRAC

Bank Ltd.

ACCEPTING DEPOSITS:

Accepting deposits is one of the most important functions of commercial banks. The

deposits are accepted by BRAC Bank may be classified in to

Demand Deposits

Time Deposits

Demand deposits:

Demand deposits are those, which are withdrawn able on demand by using check. The

demand deposits accounts are

1. Saving Account

2. Current Account

Time Deposits:

Time deposits are such deposits, which are not, withdrawn able on demand but con be

drawn after a stipulated time. Banks pay higher interest rate against such type of

deposit account. There are many time deposit accounts.

3. Fixed Deposit Receipt Account (FDR)

4. ABIRAM Account

5. Short Term Deposit (STD)

38

6. Deposit Premium Scheme (DPS)

7. Premium Term Deposit

SAVINGS ACCOUNT:

Savings bank account is a demand deposit. It can be withdrawn able by using check.

It is a good means of accumulating the savings from the large section of the

population with lower income. Bank pays interest on saving account. Currently

BRAC Bank is ‘Paying interest of 5.50% per annum. The depositor can deposit sum

of amount whenever he wants, with minimum balance restriction. Benefits received

from saving account.

Interest is paid on a daily balance method.

Interest is given for each day for whatever balance is maintained in the

account that day.

Interest paid at 6% per annum on days when the balance is under TK 20,000.

There is no restriction on the number of withdrawals.

No forfeiture rules or hidden cuts.

There is no requirement for notices to be given before making a withdrawal.

The account holders will receive some other benefits. Such as:

He/she is eligible to apply for the personal loan packages and can also open

other additional accounts and fixed deposit with the bank.

He/she will receive preferential treatment at the time of processing of their

loan applications.

He/she will receive discounts on remittance commissions.

Opening of Savings Account:

Any person who is of sound mind including a minor can open a savings account. The

requirement to open an account is as follows:

1. Bank’s prescribed account Opening form to be signed by applicant in front of

BM/RM/CSM.

2. Two copy of recent passport size photograph attested by the introducer.

3. Specimen Signature Card to be signed by the applicant in front of

BM/RM/CSM.

39

4. Any of the following identification documents like current valid passport,

proof of address, ID card, commissioner certificate etc. In this case Certifier

should attest applicant’s photograph along with signature.

CURRENT ACCOUNTS:

Current account is an account where the account holder-within the funds can make

numerous transactions without any restriction. No interest is paid on these deposits.

Current account is mainly suitable for business transaction. However, it can be opened

by any individuals aged 18 years and above.

Benefits received from Current Account:

There is no restriction of the number of withdrawals.

There is no restriction of the amount or size if a withdrawal.

No forfeiture rules or hidden cuts.

No requirements for notice to be given before making a withdrawal.

Opening of Current Account:

Current account is opened by Individual, Joint, Partnership Firm, Sole Proprietorship,

Club or Society, Public or Private Limited Companies for different purposes. There is

also some difference as to open an account by different concerns.

The procedure for individual and joint Account:

The following documents duly completed shall be obtained from the Consumer at the

time of opening of Current Deposit Account for Individual and Joint Account:

1. Bank’s prescribed account Opening form to e signed by applicant in front of

BM/RM/CSM.

2. Two copy of recent passport size photograph attested by the introducer.

3. Specimen Signature Card to be signed by the applicant in front of

BM/RM/CSM.

4. Any of the following Identification documents:

Table 1.9: Identification Documents

40

Name of Identification document Issuing Authority

Current valid passport Passport office

Valid driving License Bangladesh Road Transport Authority

Voter ID Card Election Commissioner

Armed forces ID cared Employer or Their Delegate

A Bangladesh employer ID card bearing

the Photograph and Signature of the

applicant

Employer or their delegate

A certificate forms any local government

organs such as Union council chairman,

ward commissioner etc. In this case

certifier should attest applicants

Photograph along with signature.

Up chairman or Ward Commissioner.

Trade License with photograph can be

accepted for individual’s

Local Government authority. Up

Chairman, Pourashava Chairman or Ward

commissioner.

1. FIXED DEPOSIT RECEIPT ACCOUNT (FDR):

Fixed deposits are time deposit or time liabilities. Banks pays higher rates of interest,

as the deposit is not withdrawn able or demanded. The Fixed Deposit account is

opened for a fixed period; it may be 1 month, 3 months, 6 months, 1 year, 2 years and

3 years. Different rates or interest are allowed for different period and also depend on

amount.

Opening of Fixed deposit Receipt (FDR) Account:

Before opening a Fixed Deposit receipt (FDR) Account a CONSUMER must have an

account with the bank. Then the CONSUMER has to fill up an application form that

contains the following:

Amount in figures

Beneficiary’s name and address

Period & date of issue

Rate of Interest

41

Date of maturity

Instructions if any

After the submission of the Bank’s prescribed account opening form dully filled up,

the following woks have to be done:

Specimen Signature Card to be signed by the applicant in front of

BM/RM/CSM.

Two Passport size photograph of the account holder.

Depositing the amount in his account.

Bank will issue FDR receipt.

Maturity Date and Withdrawals:

The following points are considered regarding maturity period and withdrawals or

Fixed Deposit Receipt (FDR) account:

The Fixed Deposit Receipt will be matured after the specified period.

If the FDR is withdrawn before maturity period, interest will be issued.

Interest is calculated par annum basis. Interest rate is 7.75% to 8.50%.

At the maturity period on the account holder should come himself and put his

specimen signature on the back of Fixed deposit

2. ABIRAM ACCOUNT:

BRCK Bank Abiram Account is a special type of Fixed Deposit Scheme, which offers

the flexibility and comfort of having a guaranteed monthly return on your investment.

An amount of cash is deposited n Bank for a fixed period specified in advanced in this

deposits. Banks pays higher rates of interest, as the deposit is not withdrawn able on

demand. The Abiram account is opened for a fixed period. The period may be one

year, two year, and maximum of three years. Different rates of interest are allowed for

different period and it also depends on amount.

Opening of Abiram account:

Before opening an Abiram Account a CONSUMER must have an account with the

bank. Then the CONSUMER has to fill up an application form that contains the

following:

42

The Abiram Account will be matured after the specified period.

If the Abiram account is withdrawn before the maturity period, interest will be

issued at the prevailing Sevings Account rate.

Interest is calculated on a monthly basis. Interest rate is 8% to 7.5% depending

on amount and time.

At the maturity period the account holder should come himself and put his specimen

signature of the back of Abiram account receipt. Then the banker verifies the

signature and retains the Abiram Account receipt and will give him the amount in

cash or as required. Abiram account offers loan facilities up to 95% of deposit.

3. SHORT TERM DEPOSIT (STD) ACCOUNT:

In Short Term Deposit account, the interest is calculated on daily basis. The interest

offered for STD is less than that of savings account. Various big companies,

organizations, Government Departments etc keep money in STD account. Frequent

withdrawal is discouraged and requires no prior notice. The rate of interest for STD

account is currently 5% per annum and the investment should be minimum one Lac

and above.

In BRAC Bank, usually customer gives an instruction to the bank that their current

account will be transferred to the STD account. So Bank follows this instruction by

giving following entries,

Consumer’s Current Account Debit

Consumer’s STD Account Credit

4. DEPOSIT PREMIUM SCHEME (DPS):

BRAC Bank introduces the Deposit Premium scheme (DPS), a truly special savings

plan that allows saving on a monthly basis and getting a handsome amount at

maturity. An amount is deposited in a bank for a fixed period of time. Bank pays

higher interest rate and there are a range of options for both instalment size and

maturity. An amount is deposited in a bank for a fixed period of time. Bank pays

43

higher interest rate and there are a range of options for both instalment size and

maturity. Maturity period may be 4/7/11 or 14 years.

In BRAC Bank, usually Consumers saving account will be debited whenever its

deposited amount crosses a certain limit and this amount will be transferred to the

DPS account. So bank gives following entry:

Consumer’s Savings Account Debit

Consumer’s DPS Account Credit

Before opening a Deposit Premium Schemes (DPS) Account a Consumer must have”

a Savings account with bank. Than the CONSUMER has to fill up an application

form that contains the following:

Amount in figures

Beneficiary’s name and address

Period

Rate of Interest

Date of Issue

Date of maturity

Instructions if any.

Maturity Date and Withdrawal of Deposit Premium Scheme (DPS):

The following points are considered regarding maturity period and withdrawal of

Deposit Premium Scheme (DPS) Account:

The DPS Account will be matured after the specified period.

Deposit Premium Scheme can be en-cash before the maturity period, and

interest will be issued.

Interest rate is 8.5% to 9.75% depending on amount and time.

At the maturity period the account holder should come himself and put his

specimen signature of the back of DPS account receipt. Then the banker

verifies the signature and will give him the amount in cash or as required.

Deposit Premium Scheme (DPS) offers loan facilities up to 90% of deposit.

44

5. PREMIUM TERM DEPOSIT:

BRAC Bank Premium Term Deposit is a 5 year term Fixed Deposit. Unlike

conventional Deposits, Premium Term Deposit provides a guaranteed return. Bank

pays higher interest rate.

Opening of Premium Term Deposit:

Before opening a Premium Term Deposit a CONSUMER has to fill up an application

form that contains the following:

Amount in figures

Beneficiary’s name and address

Period

Rate of Interest

Date of Issue

Date of Maturity.

Maturity Date and Withdrawal of Premium Term Deposit:

The following points are considered regarding maturity period and withdrawal of

Premium Term Deposit:

The Premium Term Deposit will be matured after 5 years Fixed Term.

Interest rate is 17% per annum.

Interest Rates of Deposit Account:

Table 1.10: Current interest rates

Types of Account Interest Rate

Savings Bank Account 5.50%

Fixed Deposit Receipt (EQID)

1 Moths up to 3 months

3 Moths up to 6 months

6 Moths up to 1 months

1 year up to 2 years

2 years up to 3 years

7.75%

To

8.50%

Short Term Deposit (STD) 5%

45

ACCOUNT OPENING PROCESS BY CSD:

Consumer requests opening of account and after completing the form, Consumer

Service Officer scrutinize account opening form and establish account. Then he enters

the account details in numerical control register. Consumer Service Officer Submits

forms with all documents to Operation Manager for Review. Operation Manager

rechecks all documents, signs off and submits to Branch Manager for approval. If in

order, Branch Manager approves the file and return to Operation manager. Manager

Operation sends the file to Consumers Service Officer. CSO then do the photocopy of

the form and segregates Specimen Signature Card, Keeps one in Signature cabinet

sends another with photocopy of his account opening form to Consumer Service

Delivery (CSD). CSO enters all account opening form and specimen signature cards

in a log sheet in triplicate daily basis and hands over to Operation Manger Keeping

the log and if satisfied send the account opening from to Consumer Service Delivery

to inputs data in Millennium Banking System (MBS) Client Database and Scanning of

the Signature Cards. CSD receives the account opening form and signature cards and

sign of in the duplicate copy of the log sheet and sends back to branch. Consumers

Service Officer files the received copy.

Observation:

However, it has been observed that all the procedure regarding opening an account, a

great deal or personal judgment is required by the banker to verify the Consumer.

Extra care should be taken in case of Public and Private limited companies regarding

the documents. The banker customer relationship is the ultimate key to success, so the

customer should be chosen appropriately

SHANCHAY PATRA:

BRAC Bank sells two types of Shanchay Patra on behalf of the Government. The

Sales Statement of Shanchay Patra must be sent to Bangladesh bank Within 72 hours

of sale, otherwise the bank has to pay penalty to Bangladesh bank. BRAC Bank geat

commission of the total sales.

46

Table 1.11: Shanchay patra interest rates

Type of Shanchay Patra Interest Rates

3 years Shanchay Patra 10%

5 years Shanchay Patra 10.5%

Shanchay Patra Issuance and Encashment by CSD:

Branch Consumer Service Officer receives the application form for issuance of

Shanchay Patra and a letter of Debit authority along with declaration form. And for

Encashment of Shanchay Patra Consumer Service Officer receive Coupons along with

encasement request form and a photocopy of Registration slip. In both the cases

receive stamp will be used, receiver will put initials, and client’s signature must be

verified by the receiver. At the end the Shanchay Patra Issuance of or encashment

details must be logged in the Form T and forward to Consumer Service Delivery

(CSD). After receiving the instruction and instrument, CSD will then transaction. For

issuance, Shanchay Patra will be issued respective branch with in 36 working hours.

And for Respective account will be credited with in 24 working hours.

Deposit Account Department:

In BRAC bank Gulshan Branch, Desk –1 is involved in account opening and closing

tasks. One staff officer is given this responsibility. This section also needs the help of

computer officer in order to issue cheques and verify account holder signature. The

job description of this department is given below:

- Opening different types of account such as current deposit, saving bank

deposit, fixed deposit and any other deposit instructed by the head office.

- Handling operation of different types of accounts.

- Responsible for issuing cheque books.

- Transferring and closing different types of accounts.

- Opening and operating PSS account.

- Giving account statement to the clients.

- Giving Tele Banking services.

- Making vouchers regarding above transactions.

- Serve its customers the best by helping with their queries and problems.

47

Cash Transaction Department:

The activities or responsibilities of the cash transaction department can be shown with

the help of a workflow.

Transaction

Tally with

Abstract

Fig 1.11: Accounting workflow in branch

48

Cash Clearing Transfer

Voucher

Recording in the register

Posting in the ledger

Supplementary sheet preparation

Summery Preparation

Cash-cum day book

General ledger posting

Affairs front page

Subsidiary accounts posting

Affairs back page

Balancing

Cash transaction department is also involved in colleting bill from the customers

regarding mobile, electricity and gas bill.

Clearing and Remittance Department:

The main objective of clearing and remittance is to provide an extra facility to the

customers than cash receipt and cash payment. This department can be divided into

two parts as per the type of responsibilities.

Clearing and Transfer Delivery:

1. Inward Clearing:

- The instruments drawn on BRAC Bank are received from other Banks in

the Clearing House by the representing branch of the Bank.

- The amount and number of instruments received are entered in the House

Book from the main schedules of respective banks.

- The amount of instruments delivered, received and difference is written

in a slip provided in the Clearing House and the Slip is returned.

- The instruments with schedule are arranged branch wise.

- A copy of each schedule is detached.

- The amount of each schedule received is entered in the House pages of

the respective branches.

- The respective House pages are totaled and the total of each is noted on

a Slip and a grand total is taken out.

- The grand total is agreed with the total of the House Book.

- The instruments are sent to the respective branches with Slip showing

total amount and number of instruments.

- The instruments are sent to the branches concerned for clearance along

with the IBDA with the total amount of the instruments.

- The House pages along with the duplicate schedules are filed.

- Particulars of the instruments are compared with the schedule and the

Slip and the schedules are detached (Receipt of instruments in the

Branches).

- The instruments are sent to the respective departments and the schedules

are filed.

49

2. Outward Clearing:

- The instruments drawn on other banks are received duly entered in the

Pay-in-Slip or voucher.

- The instruments are checked and compared with the particulars noted in

the Pay-in-Slip and its counter folio.

- In case an Order instrument is being deposited in second payee's account,

guarantee is obtained from the second payee on the reverse of the

instruments.

- In case the payee's name on the specially crossed instrument differs

slightly from that of the depositor, the instrument may be accepted but

only from the customer's well known to the Bank and after obtaining

an Indemnity that is attached to the Pay-in-Slip.

- Proper stamp(s) is/ are affixed on the instruments and on Pay-in-Slip and

the counter folio

- The instrument is suitably endorsed/ discharged.

- The instrument along with the Pay-in-Slip is sent to the In-charge for

checking and signature.

- The instrument and Pay-in-Slip are detached from the counter folio

which is handed over to the customer.

- The particulars of the instrument and the voucher are entered in the

Outgoing Clearing Register.

- Serial number is given on each voucher.

- The Register is balanced; the vouchers are separated from the

instruments and released after lodgement to the respective departments

against acknowledgement in the Register.

- The instruments are arranged bank-branch-wise.

- The Sub-Main-Schedules are prepared in triplicate, two copies of which

are attached with the relative instruments.

- The grand total of the schedules is taken and agreed with that of the

Register.

- The House Page is prepared in duplicate.

50

- The BRAC General A/C Clearing House representing branch is debited

with the amount of the instruments and IBDA is sent to that branch and

the party's account is credited.

- The instruments with the schedules are sent to the branch representing to

the Clearing House.

- The instrument is received in the manner similar to that explained in

foregoing paras (Receipt of instruments by the Branch representing to

the Clearing House).

- The instruments with schedules are received from the branches

(Lodgement by the branch representing to Clearing House).

- The instruments with schedules are rearranged bank-branch-wise.

- The branches are entered in the Outward Clearing Register.

- The Main Schedule of each Bank is prepared and total amount of the

respective sub-main-schedules are entered thereon.

- The House Page is prepared in duplicate, and total is balanced with that

of the Register.

- The instruments with schedules received from the branches are sent to

the Clearing House (Presentation in the Clearing House).

- The instruments are delivered to the respective Banks.

3. Inward Transfer Delivery:

For payment of Bills presented to a particular branch of the Bank through another

branch of the Bank, the procedures are the same as those applicable to Inward

Clearing. The only exception is that there are no clearing house formalities. The

concerned branches of the Bank directly deal with Inter-branch clearing.

4. Outward Transfer Delivery:

Outward transfer delivery is used for collecting Bills by a particular branch of the

Bank, drawn on another branch of the Bank. The procedures are the same as those

applicable to Outward Clearing.The only exception is that there are no clearing house

formalities. The concerned branches of the Bank directly deal with Inter-branch

clearing.

51

Local Remittance:

Sending money from one place to another place for the customer is another important

service of banks. And this service is an important part of country's payment system.

For this service, people, especially businessmen can transfer funds from one place to

another place very quickly. There are five kinds of techniques for remitting money

from one place to another place. These are:

1. Demand Draft

2. Pay Order

3. Telegraphic Transfer

4. Telephone Transfer

5. Mail Transfer - Time consuming and not frequently used

Telegraphic and Telephone transfer are almost the same, both are them are known as

TT in short. BRAC bank helps people transfer their money from one district to

another in the quickest possible time at the lowest service charge.

Loan and Advances:

In the credit and advance department of BRAC Bank, Gulshan Branch, there are two

officers who monitor the activities. The functions of this department are described

below:

- Processing of loan application

- Placing the loan proposal to the Branch Manager/ Head office for disposal.

- Processing of application requesting for confirmation of lien and verification of

signature in case of advances against BSB/ICB Unit certificates/Wage Earner

Devt. Bond.

- Preparing loan limit sanction letter and obtain confirmation from the borrowers.

- Preparing limit sanction advice for computer programming and arrange

completion of documentation formalities.

- Processing of application of House Building Loan for Head Office sanction.

- Inspection of land site for HBL proposal through personal investigation in

connection with assessment of value.

- Obtaining confidential report from other banks regarding new intending

borrowers.

52

- Obtaining credit information Bureau Report in case of advance for more than

TK. 50lacs.

- Project site inspection in case of advance against work order.

- Inspection land for assessment of valuation of property to be proposed against

loan application.

- Preparing application for making lien against Work Order with the branch and

obtain confirmation of issuance of work order and letter of confirmation

through personal visit to the office of work order awarding authority.

- Inspection of stock against cash credit (Hypo.) account.

- Having received approval from the branch/Head Office for sanction of

SOD/cash credit (Hypo)/House Building Loan limit, preparation of application

to legal advisor for vetting of property documents, and preparation of draft for

creation of Power of Attorney/Equitable Mortgage/Loan Mortgage.

- After getting draft from legal advisor about vetting of property documents,

complete the documentation including registered mortgage/Power of Attorney

through sub-register office.

- Processing of application to Head Office for sanction of Staff Provident Fund

loan account.

- Negotiation of Export document.

- Purchasing accepted inland bills with approval of the Branch Manager.

- Preparing proposal for sanction of IBP limit to Head Office beyond the branch

discretionary power and thereafter completion of documentation and legal

formalities thereof if sanctioned.

- Review of limit before expiry including issuance of letter of different borrower

for renewal/adjustment of limit.

- Taking appropriate steps for renewal of insurance policy in case of cash credit

(Hypothecation) advances.

- Sending the balance confirmation certificate to the borrowers after every quarter

end.

- Submission of statement of SOD/CC/TOD/HBL/Loan to head office on monthly

basis and other statements in quarterly and half-yearly basis.

- Checking balances of advance ledger.

- Preparing draft according to legal advisor’s prescribed format for serving legal

notice to the defaulting borrowers.

53

- Scripting draft plaint and processing the case to BLA for filing of Money

Suit/Title Suit after receiving approval for the same from head office.

- Appearing before the Artha Rin Adalat on the date of hearing of Money

Suit/Title Suit.

It also offers some loan like home loan, travel loan, auto loan and study loan which I

will describe briefly-

Home Loan:

Home Loan is loan facility for the middle class to upper class people to purchase /

renovate their Apartments / dwelling houses for their residential purpose through

mortgage or other securitization policy as per law. There are 2 (Two) types of Home

Loan. The first one is “Home Loan (HL)” for purchasing Apartment / House. The

other one is “Home Credit (HC)” for renovation of Apartment / House. Loan are

given to salaried (including ECO); Self-employed professional (Doctor, Engineer,

Architect etc); Businessman & Landlord. The loan is give on the basis of 50% of

proved monthly income. The limit of the loan is minimum BDT 500K to maximum

7500K (may vary subject to loan type) and the tenor would be maximum 20 years

(may vary subject to customer segment and loan type). Equal Monthly Instalment

(EMI) realized through Standing Instruction (SI). There is an option for early

settlement of outstanding loan but settlement charge will be applicable as per

following manner:

Within 1st year = 5% of outstanding amount + VAT

Within 2nd year = 4% of outstanding amount + VAT

Within 3rd year = 3% of outstanding amount + VAT

Within 4th year = 2% of outstanding amount + VAT

Within 5th year or more than 5th year = 1% of outstanding amount + VAT

The applicable interest rate is 14% p.a. (variable rate). The processing fee is 1.5% of

loan amount and includes VAT payable before disbursement.

Travel Loan:

Travel Loan is a loan facility offered by the Retail Banking Division to facilitate

travel related requirement for going abroad (for any purpose) of the Bangladeshi

people. This loan is offered to the persons who have stable monthly income. It is a

clean or unsecured loan in the sense that there is no cash security taken against the

54

loan. A person can borrow up to Tk. 3 Lac. The minimum amount is Tk. 50,000

which will be borrowed. The interest rate is 17.50% p.a., which is 1% lesser than

Personal Loan. The Loan Processing Fees/Charges for the facility is 2% of loan

amount, minimum Tk.1000 and also includes VAT. The tenor of the loan is 12 to 36

months. If I get TK 100,000 of Travel Loan, then the Equal Monthly Instalment

(EMI) at 17.5% interest rate p.a. will be-

Loan Amount EMI for

12 Months

EMI for

24 Months

EMI for

36 Months

100,000 9,144.22 4,968.28 3,590.21

Auto Loan:

Auto loan is the loan facility for the middle class or upper class people to purchase a

car for their necessary purpose. The loan will be given to 2 types of person like

service holder and business man. The employee will be get benefited from this loan.

The interest rate is 18% and the processing fees 1%. The proposed limit will be

offered after adjusting existing Auto Loan facility-

FUM LIMIT

Below BDT 5 Million 1500K

Above BDT 5 Million 2000K

Study Loan:

Study Loan is a loan facility offered by the Retail Banking Division to facilitate the

purpose of Higher Education of the Bangladeshi Students. The processing fee 0.50%

of loan amount and includes Vat. The limit of the Secured Study Loan is 100% of the

face value of the acceptable Securities. The tenor of Secured Study Loan is 12 to 60

Months. The interest rate of Secured Study Loan is 14.50% p.a.

Acceptable securities for Secured Study Loan are;

Term Deposits at BRAC Bank or other banks

Wage Earner Development Bonds

ICB Unit Certificates

Foreign Exchange Department:

55

Foreign Exchange risk is defined as the potential change in profit/loss due to change

in market prices. Today’s financial institutions engage in activities starting from

imports, exports and remittances involving basic foreign exchange and money market

to complex structured products. Within the Bank, Treasury department is vested with

the responsibility to measure and minimize with bank’s assets and liabilities.

- Import Department:

Import is the flow of goods and services purchased by economic agents located in one

country from economic agents located in another. Hence, import of merchandise

essentially involves two things: bringing of goods physically into the country and

remittance of foreign exchange towards the cost of the merchandise and services

connected with its dispatch to the importer.

- Export Department:

The goods and services sold by Bangladesh to foreign households, businessmen and

Government are called export. The export trade of the country is regulated by the

Imports and Exports (control) Act, 1950. There are a number of formalities, which an

exporter has to fulfil before and after shipment of goods. The exports from

Bangladesh are subject to export trade control exercised by the Ministry Of

Commerce through Chief Controller of Imports and Exports (CCI & E).

- Foreign Remittance Department:

BRAC Bank, Gulshan Branch is an authorized dealer of foreign exchange. The

department’s dealing in foreign exchange involves buying and selling of foreign exchange

converting inward remittances received from abroad and outward remittances sent abroad.

56

Foreign Exchange

Export Import Foreign

LC Cash Back to Back LC

Fig. 1.12: Organizing Structure of Foreign Exchange Department

ATM CARD PRODUCTION DEPARTMENT:

This is new department that is introduced in the service portfolio of BRAC Bank

Limited. It started its journey form 15th April 2005. Through this service the clients

are enjoying modern technology in withdrawing their money. It represents the

development of banking sector in our country. BRAC Bank is offering this service to

most of its client as early as possible. A well-trained work force is giving their level

best effort to serve efficiently. There are different steps to complete the process of

card production. Among the local bank BRAC Bank is the only one bank that is

producing ATM card in their premises. Secura Pvt. Limited (Singapore) is providing

blank ATM card to BRAC Bank. There is a card embossing machine that can produce

around 1200 card per day. ATM card division is producing around 700 cards in

different segment each day.

Function of ATM Card Division:

Production of ATM Cards

Maintaining the stock of ATM Cards

Keeping record of produced cards

Reproducing Lost/ Stolen ATM Cards

Distribution of ATM Cards

Maintaining All database related to card production & distribution

Charging against issued cards

Resending returned cards

Maintaining the vault registrar

Coordination with IT in issuing Pin

Customer service through handling inquiry of the clients

Updating the request of address chance into access system

Maintaining reject till internal audit

Sorting out discrepant request branch wise and send back.

57

Inward Remittan

Outward Remittan

A Brief Overview of the Banking Industry:

According to the Bangladesh Bank Annual Report 2006/07 there are total 48 banks in

Bangladesh with 6412 branches all over the country in order to serve the people. The

competition in this industry is increasing day by day. There are four different

categories of banks. They are: -

- Nationalized Commercial Banks

- Denationalized Financial Institutions

- Private Commercial Banks

- Foreign Commercial Banks

Among the above categories BRAC Bank Ltd. falls under private commercial bank.

PCB sector has the highest number of competitors that is 30 in numbers and it is

growing at a fast pace. The competition within this sector is increasing to grab the

majority customer base and BRAC Bank is struggling to maintain a suitable position

in the industry and also to improve their services.

Major competitors:

Some of the major competitors that are eating up the pie of the banking industry

include Bank Asia, Prime Bank, Dhaka Bank, Eastern Bank, EXIM Bank, JAMUNA

Bank, Mercantile Bank, One Bank, Premiere Bank, Trust Bank etc.

Some of the banks are using aggressive strategy and spreading their services in the

remote areas at a very short span of time. BRAC Bank Ltd. is one of the very lucky

bankers who are enjoying the special position for International image in the industry

as an asset.

Financial Overview of BRAC Bank Ltd.:

From the annual report I calculate the liquidity and profitability ratios of 2005-2007

of BRAC Bank Ltd. which will be shown in the following page. I also interpret the

ratios as a graphical manner and briefly describe the graphs. In the graph analysis part

I show that in which sector BBL should work for their future growth.

58

Ratio Analysis:

Table 1.12: Ratio Analysis

Liquidity and

Profitability

Ratios

2005 2006 2007

Current Ratio 4127311766/14882402057

=27.73%

8662586106/24334895856

=35.60%

11172919504/39608407773

=28.21%

Return on Asset 192680101/16876009139

=1.14%

334261127/30011815073

=1.11%

618335637/46382595418

=1.33%

Return on

Equity

192680101/782931910

=24.61%

334261127/2117193037

=15.79%

618335637/3072028674

=20.13%

Net Interest

Margin

666515907/16876009139

=3.95%

421576241/30011815073

=1.40%

539221202/46382595418

=1.16%

Net Non-interest

Margin

430283242/16876009139

=2.55%

745864435/30011815073

=2.49%

1234456708/46382595418

=2.66%

Net Bank

Operating

Margin

580318012/16876009139

=3.44%

1050407027/30011815073

=3.50%

1945492526/46382595418

=4.19%

Earning Per

Share

580318012/15057550

=38.54

1050407027/35740286

=29.39

1945492526/35404777

=54.95

Dividend Payout

Ratio

23/38.54 = 59.68% 24/29.39 = 81.66% 25/54.95 = 45.50%

Tax

Management

Efficiency

192680101/340360101

=56.61%

334261127/705361127

=47.39%

618335637/1264335637

=48.91%

Expense Control

Efficiency

340360101/1173317659

=29.01%

705361127/2077425522

=33.95%

1264335637/3546246530

=35.65%

Asset

Management

Efficiency

1173317659/16876009139

=6.95%

2077425522/30011815073

=6.92%

3546246530/46382595418

=7.65%

Funds

Management

Efficiency

16876009139/782931910

=21.55%

30011815073/2117193037

=14.18%

46382595418/3072028674

=16%

59

The above ratios have been calculated on the basis of Financial Statements of BRAC

Bank Limited for the year 2005, 2006 and, 2007.

Interpretation of Financial Statements:

Current Ratio:

Current Ratio indicates the extent to which current liabilities are covered by those

assets expected to be converted to cash in the near future.

Current Ratio

27.73

35.6

28.21

0

10

20

30

40

2005 2006 2007

Year

Val

ues

(%

)

Fig. 1.13: BBL’s Current Ratio of 2005-2007

Here, we see that over the past three years current ratio of BBL is decreasing then

increasing and after that it also decreasing which signifies that, current assets of BBL

is getting weaker compare to their current liabilities. With the current ratio 27.73%,

35.60% and, 28.21% for the year of 2005, 2006 and, 2007 – BBL could liquidate

current asset of book value and still pay off current creditors in full.

Return on Asset:

Return on assets determines the amount of net income produce on a firm’s assets by

relating net income to total assets.

60

ROA

1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

2005 2006 2007

Year

Val

ues

(%

)ROA

Fig. 1.14: BBL’s Return on Asset of 2005-2007

It is primarily an indicator of managerial efficiency; it indicates how capably the

management of the bank has been converting the institution’s asset in to net earning.

ROA in 2005 was 1.14%. In 2006 it decreased to 1.11% and then again in 2007

increased to 1.33%. These high return result from the banks’ high basic earning

power plus low expenses, both of which cause BBL’s net income to be relatively

high. It is clearly shown that BBL cans efficiently converting its assets in to earning.

Return on Equity:

ROE means the rate of return flowing to the banks’ shareholders. It approximates the

net benefit that the share holders have received from investing their capital in the

bank.

ROE

0

5

10

15

20

25

30

2005 2006 2007

Year

Val

ues

(%

)

Fig. 1.15: BBL’s Return on Equity of 2005-2007

61

In 2005 we have seen that ROE was 24.61%. In 2006 it decreased to 15.79% but in

2007 it again increased to 20.13%. Though the ROE in following year is not steady,

the percentages are quite potential. BBL can attract the shareholders as the potential

ROE indicates a large multiplier which shows high returns for its stakeholders and, a

good equity that absorb losses on the bank assets.

Net Interest Margin:

It measures how large a spread between interest revenue and interest cost

management has been avail to achieve by close control over the bank’s earning assets

and the pursuit of the cheapest source of funding.

20052006

2007

Net Interest Margin0

1

2

3

4

Year

Val

ue

s (%

)

Net Interest Margin

Fig. 1.16: BBL’s Net Interest Margin of 2005-2007

The net interest margin of BBL for the following three years is 3.95%, 1.40% and

1.16%. Though the interest income from loans and security investments of BBL is

low, at the same time the interest expense on deposits and on other deposits is also

low, therefore the net interest margin is high.

Net Non-interest Margin:

The non-interest margin in contrast, measures the amount of non-interest revenues

stemming from deposit service charges and other service fees the bank has been able

to collect relative to the amount of non-interest costs incurred. In BBL the non-

interest margin of 2005, 2006 and, 2007 is 2.55%, 2.49%, and, 2.66% respectively.

62

Net non-Intarest Margin

2.4

2.45

2.5

2.55

2.6

2.65

2.7

2005 2006 2007

Year

Val

ues

(%

)

Net non-IntarestMargin

Fig. 1.17: BBL’s Net Non-Interest Margin of 2005-2007

Net Bank Operating Margin:

Net Bank Operating Margin

0

1

2

3

4

5

2005 2006 2007

Year

Val

ues

(%

)

Fig. 1.18: BBL’s Net Bank Operating Margin of 2005-2007

From the graph we have seen that in 2005 net bank operating margin was 3.44%. In

2006 it rises to 3.50% and in 2007 it again rises to 4.19%. Therefore it is slightly

varying from year to year.

63

Earnings per Share:

Earning Per Share

0

10

20

30

40

50

60

2005 2006 2007

Year

Val

ues

EarningPerShare

Fig. 1.19: BBL’s Earning Per Share of 2005-2007

BBL’s stockholders are most concerned about their earnings per share of stock held.

Though it decreased in 2006 but again start increasing in 2007. Therefore

management needs to begin work immediately on expanding the bank’s revenues

from assets and services sold, while moving toward a less-expensive mix of deposits

and non-deposit sources of funds.

Dividend Payout Ratio:

Dividend Payout ratio of 2005, 2006 and, 2007 is 59.68%, 81.66%, and 45.50%

respectively. It is seen their ratio is decreasing. As BBL is expanding their branches

and opened many ATM booths, they had to invest a lot. Therefore whatever their

profit comes, they invest in it to get more profit.

Tax Management Efficiency:

This is basically the measurement of tax management policy that is how well the

company can manage their tax burden.

64

42

44

46

48

50

52

54

56

58

Values (%)

2005 2006 2007

Year

Tax Management Eff iciency

Tax ManagementEff iciency

Fig. 1.20: BBL’s Tax Management Efficiency of 2005-2007

Tax management efficiency of 2005, 2006, and 2007 is 56.61%, 47.39% and, 48.91%

respectively. Though their tax management efficiency in 2005 is high but it fell in

2006 which is not good for BBL. Therefore BBL needs to work on their tax

management policy.

Expense Control Efficiency:

In 2005, expense control efficiency was 29.01%. In 2006, it increases to 33.95% and

again in 2007 it increases to 35.65% which is a good sign for the BBL.

Expense Control Eff iciency

25

27

29

31

33

35

37

2005 2006 2007

Year

Val

ues

(%

)

ExpenseControlEff iciency

Fig. 1.21: BBL’s Expense Control Efficiency of 2005-2007

65

Asset Management Efficiency:

Asset Management Eff iciency

6.95 6.92

7.65

6.4

6.6

6.8

7

7.2

7.4

7.6

7.8

2005 2006 2007

Years

Val

ues

(%

)

AssetManagementEff iciency

Fig. 1.22: BBL’s Asset Management Efficiency of 2005-2007

In 2005 the asset management efficiency increased to 6.95% but in 2006 it decreased

to 6.92% and in 2007 it again increased to 7.65% which indicates the huge increment

in the asset management efficiency of the company. It also means that the BBL’s

condition is good.

Funds Management Efficiency:

21.55

14.1816

0

5

10

15

20

25

Values (%)

2005 2006 2007

Year

Funds Management Eff iciency

FundsManagementEff iciency

Fig. 1.23: BBL’s Funds Management Efficiency

From the above graph we see that in 2005 the funds management efficiency was

21.55%. In 2006 it decreased 14.18% which indicates the huge reduction. But in 2007

it again slightly increased to 16%. So the BBL should work on it.

66

SWOT Analysis of BRAC Bank Limited:

SWOT analysis means analysing the strengths, weakness, opportunities and threats of

the Organization to know the present condition. This is very common analysis to

determine the company’s capabilities of doing effective business. This help to know

the possible advantages and disadvantages of the firm that it has compare to compare

to others. The SWOT analyses are briefly given in the below:

S- STRENGTHS

W-WEAKNESS

O-OPPORTUNITIES

T-THREATS

Here is the SWOT analysis of BRAC Bank:

S- STRENGTHS:

As a private commercial bank BRAC BANK enjoys the following strengths

Wide range of service line

Online Banking Services

Excellent working environment

The bank is providing modern services like ATM, on line banking, SWIT

facilities, SMS Banking.

The banking service is easily accessible and feasible

Efficient and skilled workforce

Higher profitability

The bank launched several deposit schemes, which have been appreciated by

the Consumers resulting growth of deposit of the bank.

Huge business area

The bank has earned customer loyalty as well as organizational loyalty. The

bank has also control in maintain quality services to its clients.

BRAC Bank Ltd. has a long-term reputation in the banking industry as it is

one of the promising players in the industry. So, their enduring good will in

the field works as a vital strength.

67

StrengthWeakness

OpportunityThreats

Its one of the important strength is its big portion of share as it provides

security to the customers. They feel reliable to deal with this bank and usually

do not switch.

BRAC Bank Ltd has a good number of corporate customers. They have clients

from all small, medium and big enterprises. This is because of the reliability

they provide to their customers.

The bank also provides all their services at a very low rate. As a result people

of all status can easily become a client of the bank.

They have qualified and experienced human resources who are highly

committed to their customers.

It has sophisticated automated banking system in most of its branches which

foster the overall banking activity.

They have excellent management system to integrate all the branches with the

head office.

W-WEAKNESS:

Lack of proper motivation, training and job rotation

Limited workforce compare to competitors

Lack of clearly define marketing objective

Limited number of branches

Lack of promotional objectives and strategies

Lack of implementing more equipped IT technology

Fund is getting costlier and getting access to the fund is also becoming more

difficult

Lack of experienced employees in junior level management.

Lack of motivation among the workers.

Heavy dependency on Head Office in decision making sometimes slower the

work process.

Lack of extrinsic and intrinsic reward & incentives for the employees from

management sometimes result to job burn out.

High dependency on ‘word of mouth’ strategy.

68

O-OPPORTUNITIES:

To increasing skilled manpower bank can earn more profit.

The bank will go for immediate automation of all branches through computer

network.

In developing country like Bangladesh banking service would be the only

sources of financing.

Despite stiff competition among banks operating in Bangladesh, both foreign

and local, BRAC BANK has achieved satisfactory progress in all areas of its

operation.

They can diversify their portfolio by introducing new sector like introducing

ATM machines.

The banking sector of Bangladesh is growing very fast.

The bank can also start micro-credit for individuals and small business.

Other unexplored district where branches can be set up.

Increasing number of SME has enhanced the opportunity for bigger corporate

client base.

High awareness among all level of people to deposit money in the banks.

T-THREATS:

The event of September -11 last eras in the USA and the events that followed

have aggravated the global economic situation.

Political uncertainties in the countries affect the business.

Opening of the branches of newly opened private banks and foreign banks the

competition will be intensified.

More policies of Bangladesh bank and lowering the bank rate by Bangladesh

bank, BRAC BANK reduces the lending rate.

The size of the market and the present state of economic activity did not

provide adequate scope for business for a large number of banks with outdated

operating system.

Frequent changes in rules and regulations from Bangladesh Bank.

High customer awareness of pricing and service strategy due to aggressive

marketing by its competitors.

Low switching cost of the customers.

69

Foreign banks are all prepared to snatch the country's limited market. With potentials

of new business opportunities, government steps at this stage should be to strengthen

local banks by undertaking needed reforms. Instead of doing so new banks was

permitted further squeezing the business opportunities. The competitor may come

with innovative ideas, which is difficult to adopt.

Problems Facing by the Company:

BRAC Bank Ltd. is facing several problems due to the current prevention of

corruption by the Government. They need to change and redesign their work process

according to the instruction of Bangladesh Bank. There are some legal issues given

below that have been included in the rules and regulations of Bangladesh Bank: -

- Change in Policy guidelines on internal control and compliance

- Change in the guidelines in prevention of money laundering

- Emphasize on ethical issues in order to reduce corruption and abuse of power

- Emphasize on prevention of terrorism by focusing more on customer details.

Remedies Adopted by BRAC Bank Ltd.:

BRAC Bank Ltd, Gulshan Branch always response immediately to the changing need.

The Head Office informs every changing rules and regulations properly to all the

branches. The branches then rectify the problems. Recently, they have faced serious

problems regarding anti money laundering. As a result they need to redesign their

account open format so that they can know every detail of the prospective client. The

recent strategy they are following in case of dealing with a new customer is “Know

Your Customer of KYC”. Under this method, the bank assesses the possibility of risk

regarding opening the account of a particular customer. Thus, they can prevent money

laundering as they will not allow any customer with illegal or doubtful account.

Moreover, they are thoroughly going through the previous accounts to find whether

there is any loophole or not. Thus they are indirectly helping the government in

averting corruption.

70

Overall Assessment of BRAC Bank, Head Office, Gulshan

Branch:

On the whole, BRAC Bank is doing well as an experienced bank in the industry. The

Gulshan branch of this bank has been able to meet the target of 2008 which indicates

their passion for achieving goals. Here is to mention that the profitability of the

branch is highly dependent on income from general accounts. They are trying to

improve their business performance by organizing general meeting among the branch

staffs to detect the existing problems and resolve them as soon as possible.

Future Direction:

BRAC Bank, Gulshan branch can extend their potentiality by increasing the credit

portfolio. They can procure lower cash deposit in order to invest more, increase non-

funded business so as to maximize dependency on interest earning from BRAC Bank

general account and to improve overall business performance of the branch to

maximize profit.

71

Chapter 2

Project Part

72

Introduction to the Research:

The project part of this report includes a primary research about the customer’s

satisfaction level regarding BRAC Bank’s Premium Banking services. Premium

Banking is one of BRAC Bank’s exclusive new services designed with most valued

customer’s needs in mind. This part of report includes objective of the research,

methodology, hypothesis, about the product and research findings along with some

recommendations for the bank. In this part too, the format provided by the University

authority has been strictly followed.

Objectives of the Study:

The basic objectives of this study are as follows:

To fulfil the partial requirement of BBA program.

To have an exposure on the banking environment of Bangladesh.

To gain different functions of banks.

To have some practical experience that will be helpful for my BBA program.

To facilitate the student apply their theoretical knowledge in practical level of

operation of a bank as find out the differences between theory and practice.

To present an overview of BRAC Bank Ltd.

To find out the internal and external lacking in the daily operation that would

help BRAC Bank Limited for more progress.

The proposed study will mainly intend to investigate the popularity of Premium

Banking Service amongst Premium Clients. In order to achieve this objective the

proposed study will try to find out how client perceive BRAC Bank’s Premium

Banking Service. The study shall try to examine about various aspects like perception

about the service, benefits for the client, perception about quality service, satisfaction

level of the service etc. amongst the clients who are Premium Banking Client.

The Scope of the Study:

The report covers the activities of different department of the Head Office of BRAC

Bank Limited. It has identified the major activities of banking as well as department

wise functions. It only focuses the overall mechanism of banking, in depth analysis of

every department & sub sections are not covered here.

73

Significance of the Study:

BRAC bank is serving its customers for more than five years. At present there are

numbers of national and international banks coming up with new services. Hence, the

competition has increased to a great extent. The services provided by the banks needs

to be satisfactory to its users. The study has tried to explore the potential opportunities

and threats regarding the Premium Banking Service provided by BRAC Bank.

Hopefully, the results of this perception survey will assist the company (BRAC Bank)

in identifying the strengths and weaknesses of its service and also to identify potential

opportunities and threats. It is also hoped that the results from this study will help

management in taking strategic decisions regarding its service features. The Premium

Banking Service has been chosen because they are the potential and the prospective

clients for the banks. If they are aware and satisfied about it now, they can be the part

of this exclusive service for a long time. Finally this study will provide a better

understanding of the premium client in general so that the product can be positioned

more effectively.

Hypothesis:

The Hypothesis regarding the research is “The satisfaction level of BRAC Bank’s

Premium Banking Service among the premium clients segment is effective”.

Methodology of the Study:

I went to Head Office BRAC Bank Limited, for my internee. The basic data both

primary and secondary used in the preparation of this report are obtained form:

Personal observation of different tasks.

Face to face conversation with the bank officers studying of different files and

books.

Annual report of BRAC Bank Ltd.

Periodicals published by Bangladesh Bank.

74

Sources of Data:

Both the primary as well as the secondary form of data is used to prepare the report.

The details of these sources are highlighted below.

Primary Sources:

Primary data for this report had been collected through the interview, conversation &

discussion of different employees and Clients. On the job observation of the officers

has helped a lot to know information of banking. The executives & officers of BRAC

Bank were quite friendly & cooperative to provide lots of information to prepare this

report.

Secondary Sources:

Secondary information was collected from:

Annual report of BRAC Bank Ltd.

Books on general banking.

The data generated is primary in nature. Data has been also collected through survey

questionnaires containing both structured and unstructured questions.

One set of questionnaires has been prepared. It was given to client or employees who

are main stakeholders of Premium Banking Service in order to identify their

satisfaction level.

Sampling Method:

Convenient sampling method was adopted whereby most of the respondents available

at Gulshan Branch.

Target Respondents:

For the sake of simplicity and the reason of easy availability the study concentrated on

existing PB clients only.

Sample Size:

The selection of the sample was random and the sample size is 30. This set of

questionnaire has been used to conduct an investigative research. The null hypothesis

that the satisfaction about Premium Banking services among the clients is positive

will be tested against the alternate that is they are dissatisfied. The dependent variable

Y (CSI) is measured using 8 dimensions of customer’s satisfactions such as customers

75

rating on employees knowledge, patience, oral communication skills, affability,

situation adaptability, responds toward customers, sincere interest and employee

neatness, these 8 dimensions of customer satisfaction have been assigned with

weights according to their relative importance and thereby the CSI is calculated. The

independent variable X1 (CII) is measured using 3 critical factors that strongly

indicates customers degree of being informed of the services provided by PB such as

the time line of customers banking experience with PB, the extent to which costumer

read the instructions provided by PB and frequency of their visit to PB. Finally this

factor has been assigned with a weight according to their relative importance about

customer’s degree of being informed and thereby the CII is calculated. Both the

index, CSI and CII is calculated in a way that the upper limit of them is 500 and lower

limit is 0. Another independent variable X2 is a Dummy variable where the variable

takes the value 1 for employed customer and it takes the value 0 for unemployed

customers.

Graphs and Analysis:

Fig. 2.1: Gender Distribution of the Premium Banking Customers

Table 2.1: Gender Distribution of the Premium Banking Customers

Frequency Percent Valid PercentCumulative Percent

Valid Female 14 46.7 46.7 46.7

Male 16 53.3 53.3 100.0

Total 30 100.0 100.0

76

4753

Gender

FemaleMale

I surveyed 30 customers in which 46.7% were females and 53.3% were males. This

can be explained through various spheres. It means that there has been a growing

amount of women literacy. More women are now originating in the work field with

their male co-workers. So they need banking facilities.

19-28 29-38 39-48 49-58 >59

Customer's Age

0

10

20

30

40

50

Pe

rcen

t

Fig. 2.2: Age Distribution of the Customers

Table 2.2: Age Distribution of the Customers

Frequency Percent Valid PercentCumulative Percent

Valid 19-28 8 26.7 26.7 26.7

29-38 13 43.3 43.3 70.0

39-48 5 16.7 16.7 86.7

49-58 2 6.7 6.7 93.3

>59 2 6.7 6.7 100.0

Total 30 100.0 100.0

From the table we see that most of the customers were fell age group of 29 to 38

years. Next were from 19 to 28 years old, the rest being inconsequential. This can be

show that the younger customers lean to bank more than the elder customers.

5347

Marital

Status

Married

Single

Fig. 2.3: Frequency Distribution of the Marital Status

77

Table 2.3: Frequency Distribution of the Marital Status

Frequency Percent Valid PercentCumulative Percent

Valid Married 16 53.3 53.3 53.3

Single 14 46.7 46.7 100.0

Total 30 100.0 100.0

This will be shown that there isn’t much variation between the numbers of married

and unmarried customers. It means that in the recent time people get married in a later

age.

0

10

20

30

40

50

60

70

80

Employee Businessman Housewife Student

Profession

Fig. 2.4: Distribution of Profession of the Customers

Table 2.4: Distribution of Profession of the Customers

Frequency Percent Valid PercentCumulative Percent

Valid Employee 6 20.0 20.0 20.0 Businessman 20 66.7 66.7 86.7 Housewife 2 6.7 6.7 93.3 Student 2 6.7 6.7 100.0 Total 30 100.0 100.0

As we can see that most of the customers plunge under businessmen and employees

category compared to housewife and student. So from this statistics we learn that

people who are engaged in daily transactions banking is more important for them.

78

42

44

46

48

50

52

54

Masters Degree Bachelor Degree

Educational Qualification

Fig. 2.5: Educational Qualification of the Customers

Table 2.5: Educational Qualification of the Customers

Frequency Percent Valid PercentCumulative Percent

Valid Masters Degree

14 46.7 46.7 46.7

Bachelor Degree

16 53.3 53.3 100.0

Total 30 100.0 100.0

From the above table we see that most of the customers are bachelor degree. But there

is not a much difference between the bachelor degree and masters degree. When I

surveyed the customers I did not get any illiterate customers.

BananiDhanmondi

GulshanOthers

Uttara

Residence

10

15

20

25

30

35

40

Pe

rce

nt

Fig. 2.6: Distribution of the Residence of the Customers

79

Table 2.6: Distribution of the Residence of the Customers

Frequency Percent Valid PercentCumulative Percent

Valid Banani 8 26.7 26.7 26.7 Dhanmondi 4 13.3 13.3 40.0 Gulshan 11 36.7 36.7 76.7 Others 3 10.0 10.0 86.7 Uttara 4 13.3 13.3 100.0 Total 30 100.0 100.0

Most of the customers stay in Gulshan and Banani. This can be explained as such that

the survey was conducted in the Gulshan Branch of BRAC Bank Premium Banking.

Since, most of the customers of that branch come from that area; it is evident that this

will be the result.

1<

1 - 6

6 - 12

>12

Fig. 2.7: Number of months with BRAC Bank PB

Table 2.7: Distribution of the Number of months the Customers are with Premium Banking

Frequency Percent Valid PercentCumulative Percent

Valid 1< 4 13.3 13.3 13.3

1-6 14 46.7 46.7 60.0

6-12 8 26.7 26.7 86.7

>12 4 13.3 13.3 100.0

Total 30 100.0 100.0

It is seen that majority of the customers have been banking with BBL’s Premium

Banking for 1-6 months and the next is 6-12 months. It is same amount of customers

less than one month and greater than 12 month.

80

60

40

Yes

No

Fig. 2.8: If the customer maintains accounts with other banks

Table 2.8: Frequency distribution of the customer if they maintain accounts with other banks

Frequency Percent Valid PercentCumulative Percent

Valid Yes 18 60.0 60.0 60.0

No 12 40.0 40.0 100.0

Total 30 100.0 100.0

This is another important component for the base of customer knowledge. It can be

assumed that if customers have accounts with other banks, they are likely to be well

informed about the current services available in the market at their due prices with

benefits.

SCB BRAC DBBLOthers0

10

20

30

40

50

Pe

rce

nt

50.0%

22.22%11.11%

Fig. 2.9: Customers Maintain Accounts With Which Other Banks

81

HSBC

Table 2.9: Customer Maintain Accounts with Which Other Banks

Frequency Percent Valid PercentCumulative Percent

Valid SCB 9 30.0 50.0 50.0

HSBC 4 13.3 22.2 72.2

DBBL 3 10.0 16.7 88.9

Others 2 6.7 11.1 100.0

Total 18 60.0 100.0 Missing System 12 40.0 Total 30 100.0

Customers who maintain accounts with other banks that are SCB, HSBC and DBBL.

This shows an increasing movement of the Bangladeshi investors and borrowers to

invest and save in multinational banks. This can result due to the exposed political

hubbub in the country, social reputation, etc.

13

43

23

17 3

Very Important

Moderately Important

Not Sure

Moderately Less Important

I dont need to

Fig. 2.10: What the Customers Think About Reading Instructions

Table 2.10: What the Customers Think About Reading Instructions

Frequency Percent Valid PercentCumulative Percent

Valid Very Important 4 13.3 13.3 13.3

Moderately Important

13 43.3 43.3 56.7

Not Sure 7 23.3 23.3 80.0

Moderately Less Important 5 16.7 16.7 96.7

I dont need to 1 3.3 3.3 100.0

Total 30 100.0 100.0

Majority of the customers interviewed agree that it is moderately important to read

instructions provided by the bank. Then comes ‘Not Sure’. But a strong portion of the

82

customers also claims that they feel it’s moderately less important to read the

instructions and they can almost do without reading them!

27

20

17

37

Very well

For the sake of reading

At times

Very often

Fig. 2.11: How Well Customers Read Instructions Provided by Premium Banking

Table 2.11: How Well Customers Read Instructions Provided by Premium Banking

Frequency Percent Valid PercentCumulative Percent

Valid Very well 8 26.7 26.7 26.7

For the sake of reading

6 20.0 20.0 46.7

At times 5 16.7 16.7 63.3

Very often 11 36.7 36.7 100.0

Total 30 100.0 100.0

Mass of the customers doesn’t read instructions that often. During my internship term,

I saw that customers face lots of problem because they don’t read the instructions

which will be provide by the bank. This will be very bad habit for the customers and

for this reason they suffered and also give pain to the bank. If they read the

instructions then they will save their time. From this I understand about the nature of

the customers.

83

Fig. 2.12: Percentage of Employee Accounts Amongst The Customers

Table 2.12: Frequencies of Employee Accounts Amongst the Customers

Frequency Percent Valid PercentCumulative Percent

Valid Yes 12 40.0 40.0 40.0

No 18 60.0 60.0 100.0

Total 30 100.0 100.0

Many companies pay their salary through banks. BRAC Bank also has the option and

names the accounts as employee accounts. When the employee changes the job, s/he

can just change the address and maintain the same account with BRAC Bank. From

my survey I found that only 40% customers maintained employee account.

Yes No

The account with PB if Employee Account or not

0

10

20

30

40

50

60

Percent

40.0%

60.0%

84

Fig. 2.13: Frequency of Visits to BRAC Bank Premium Banking

Table 2.13: Frequency of Visits to BRAC Bank Premium Banking

Frequency Percent Valid PercentCumulative Percent

Valid Quarterly 7 23.3 23.3 23.3

Once a year 2 6.7 6.7 30.0

Twice a year

4 13.3 13.3 43.3

Once a month

17 56.7 56.7 100.0

Total 30 100.0 100.0

I asked the customers how frequently they visited the bank. Most of them regularly

visit the bank in a monthly basis. This indicates that they come into contact with the

services frequently. Remaining is visit in a quarterly or once a year or twice a year

which I found through survey.

Quarterly Once a year

Twice a year

Once a month

Frequency of visits to PB

0

10

20

30

40

50

60

Percent

85

13

63

23

Excelent

Good

Neither good nor bad

Fig. 2.14: Customer Rating Services of BRAC Bank Premium Banking

Table 2.14: Frequency Distribution of Customer Ratings on PB Services

Frequency Percent Valid PercentCumulative Percent

Valid Excellent 4 13.3 13.3 13.3

Good 19 63.3 63.3 76.7

Neither good nor bad

7 23.3 23.3 100.0

Total 30 100.0 100.0

This question directly asks how the customers would rate PB services. Most of the

customers agreed that they think that the service of PB is good. Although there are a

major number of customers saying that they are not sure and think about the service

that is neither good nor bad.

86

17

60

3

20

Local Currency Current Account

Local Currency Savings Account

Company Account

Foreign Currency Current Account

Fig. 2.15: Type of Accounts Customer Maintains in BRAC Bank Premium Banking

Table 2.15: Type of Accounts Customers Maintained in BRAC Bank Premium Banking

Frequency Percent Valid PercentCumulative Percent

Valid Local Currency Current Account

5 16.7 16.7 16.7

Local Currency Savings Account

18 60.0 60.0 76.7

Company Account

1 3.3 3.3 80.0

Foreign Currency Current Account

6 20.0 20.0 100.0

Total 30 100.0 100.0

Local currency savings account is the most popular account in BRAC Bank. Next,

nearly one third of the Local currency savings account is the current account (both

local and foreign currency ones). Company account also accounts in this table but it

grabs only a small part of the pie.

87

Average amount of BDT maintained in PB of BBL

10

30 30 30

0

5

10

15

20

25

30

35

10000-50000 50001-500000 500001-5000000 >5000001

Fig. 2.16: Amount Maintained in the Accounts

Table 2.16: Amount Maintained in the Accounts

Frequency Percent Valid PercentCumulative Percent

Valid 10000-50000

3 10.0 10.0 10.0

50001-500000

9 30.0 30.0 40.0

500001-5000000

9 30.0 30.0 70.0

>5000001 9 30.0 30.0 100.0

Total 30 100.0 100.0

This question is very crucial as well in determining which customers are more

satisfied. It can be seen that around 30% of the customers surveyed keeps from BDT

5,000,000 on an average. Only 10 percent maintains from BDT 10,000 to 50,000.

97

3

Yes

No

Fig. 2.17: ATM Card Used by the Customers

88

Table 2.17: ATM Card Used by the Customers

Frequency Percent Valid PercentCumulative Percent

Valid Yes 29 96.7 96.7 96.7

No 1 3.3 3.3 100.0

Total 30 100.0 100.0

Almost 97% of the customers maintain ATM Card with BRAC Bank Premium

Banking. This can tell a little crumb about the modern development towards

Bangladeshi hasty Life. The society towards contemporary breathing leads to use

ATM Cards and move away from traditional banking.

Y T Q M WFrequency of ATM

Card used

010203040506070

Percent

3.33%13.33%

66.67%

Fig. 2.18: How Frequent the Card is Used

Table 2.18: How Frequent the Card is Used

Frequency Percent Valid PercentCumulative Percent

Valid Yearly 1 3.3 3.3 3.3

Quarterly 4 13.3 13.3 16.7

Twice a year

1 3.3 3.3 20.0

Once a month

4 13.3 13.3 33.3

Every week 20 66.7 66.7 100.0

Total 30 100.0 100.0

Only querying about the ATM card if used or not really does not give much of a

meaning. It is up to the frequency of the card used that will help open the window and

give meaning to it. From this question I can be seen that almost all the customers use

89

the card on a weekly basis. This can reflect that a huge portion of the services

consumed by the customers fall under ATM.

Extent of ATM Troubles

05

101520253035404550

Healthy amount Bearable Not that much Not at all!

Fig. 2.19: Extent to which there is a Problem with ATM Location

Table 2.19: Extent to Which There is a Problem with ATM Location

Frequency Percent Valid PercentCumulative Percent

Valid Healthy amount

8 26.7 27.6 27.6

Bearable 2 6.7 6..9 34.5

Not that much 13 43.3 44.8 79.3

Not at all! 6 20.0 20.7 100.0

Total 29 96.7 100.0 Missing System 1 3.3 Total 30 100.0

Greater part answers that they do not face problems regarding the location of ATMs.

This can also be explained numerously. There can be some errors, since I collected

data from only Gulshan Branch and disregarded customers from other

branches/locations. Customers who come to Gulshan branch may be content with the

location since they travel in Gulshan and Banani area for their work, and there are

ATMs in both Gulshan and Banani. On the other hand, those who work in Motijheel

can face harsh problems due to lack of a single ATM in Motijheel area. 43.3% saying

that they don’t face that much problem but 26.7% says that they have a healthy

amount problem.

90

77

24

52

10

Very Much

Healthy amount

Bearable

Not that much

Not at all!

Fig. 2.20: Extent to which there is Problem with Number of ATMs

Table 2.20: Extent to Which There is Problem with Number of ATMs

Frequency Percent Valid PercentCumulative Percent

Valid Very Much 2 6.7 6.9 6.9

Healthy amount

2 6.7 6.9 13.8

Bearable 7 23.3 24.1 37.9

Not that much 15 50.0 51.7 89.7

Not at all! 3 10.0 10.3 100.0

Total 29 96.7 100.0 Missing System 1 3.3 Total 30 100.0

This question is different from the previous one in the dimension that the problem

faced in this one is regarding the number of ATMs. Compared to the response of the

previous question, customers are more satisfied with the number of ATMs. This can

also be addressed with the similar error faced before (customer base is limited in the

sense that only Gulshan Branch customers were surveyed). From the survey we get

that 50% don’t face not that much problem, 10% says “Not at all” and remaining says

that they have a very much and healthy amount problem. Only 7% says that the

location problem is bearable.

91

107

1469

Very Much

Healthy amount

Bearable

Not that much

Fig. 2.21: How Annoyed Customers are With ATM Service

Table 2.21: How Annoyed Customers are With ATM Service

Frequency Percent Valid PercentCumulative Percent

Valid Very Much 3 10.0 10.3 10.3

Healthy amount

2 6.7 6.9 17.2

Bearable 4 13.3 13.8 31.0

Not that much 20 66.7 69.0 100.0

Total 29 96.7 100.0 Missing System 1 3.3 Total 30 100.0

Since ATM covers a big portion of the services offered by Premium Banking,

dissatisfaction in the machines poses a big threat to the image of the bank. Customers

when asked how annoyed they are with ATM services? Majority answers ‘Not that

much’. But significant amount also answers that they are annoyed with the machine. I

also faced almost regular cases regarding ATM failures. One of the things the

customer gets annoyed is the few seconds the machine waits for the PIN after which it

retains the card. The customers have to wait at least for a day to get back their cards.

In my internship period I also faced this problems.

92

23

77

Yes

No

Fig. 2.22: Credit Card Used

Table 2.22: Credit Card Used

Frequency Percent Valid PercentCumulative Percent

Valid Yes 7 23.3 23.3 23.3

No 23 76.7 76.7 100.0

Total 30 100.0 100.0

From the graph I see that only 23.3% people agreed that they used credit card and

most of the customers don’t use the credit card. It means that they are not much

satisfied about the credit card service.

77

7

3

13

Once a Year

Quarterly

Twice a year

Once a month

Fig. 2.23: Frequency of credit Card Used

93

Table 2.23: Frequency of credit Card Used

Frequency Percent Valid PercentCumulative Percent

Valid Once a year 23 76.7 76.7 76.7

Quarterly 2 6.7 6.7 83.3

Twice a year

1 3.3 3.3 86.7

Once a month

4 13.3 13.3 100.0

Total 30 100.0 100.0

Only 23% of the customer I surveyed uses credit cards. Fig. 2.23 depicts that most of

the people who use credit cards uses it very little, like once a year. This can be

explained with the limited usage of credit cards in the country. But much to

modernization, a change in the pattern is seen to have followed until very recently.

Knowledge of Relationship Manager

0

10

20

30

40

50

60

Strongest Very strong Moderately strong

Fig. 2.24: Knowledge of Relationship Manager about PB Service

Table 2.24: Knowledge of Relationship Manager about PB Service

Frequency Percent Valid PercentCumulative Percent

Valid Strongest 5 16.7 16.7 16.7

Very Strong 9 30.0 30.0 100.0

Moderately Strong

16 53.3 53.3 70.0

Total 30 100.0 100.0

This is an essential measure in determining the customer satisfaction level. This graph

suggest that what the customers think about the PB RM’s & ARM’s knowledge level

about the subject matter they deal with. Customers rated this very liberally. Almost all

agreed strongly that the employees are well skilled for the profession they do.

94

Cross Tables:Cross tabulation 1. Read instructions * Annoyed with ATM machine services

Read instructions * Annoyed with ATM machine service Crosstabulation

0 0 4 4 8

.0% .0% 50.0% 50.0% 100.0%

0 0 0 5 5

.0% .0% .0% 100.0% 100.0%

0 0 0 5 5

.0% .0% .0% 100.0% 100.0%

3 2 0 6 11

27.3% 18.2% .0% 54.5% 100.0%

3 2 4 20 29

10.3% 6.9% 13.8% 69.0% 100.0%

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Very well

For the sake of reading

At times

Very often

Readinstructions

Total

Very MuchHealthyamount Bearable Not that much

Annoyed with ATM machine service

Total

Chi-Square Tests

20.827a 9 .013

22.041 9 .009

2.554 1 .110

29

Pearson Chi-Square

Likelihood Ratio

Linear-by-LinearAssociation

N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

14 cells (87.5%) have expected count less than 5. Theminimum expected count is .34.

a.

Cross tabulation 2. Read instructions * Profession Read instructions * Profession Crosstabulation

0 8 0 0 8

.0% 100.0% .0% .0% 100.0%

5 1 0 0 6

83.3% 16.7% .0% .0% 100.0%

0 3 0 2 5

.0% 60.0% .0% 40.0% 100.0%

1 8 2 0 11

9.1% 72.7% 18.2% .0% 100.0%

6 20 2 2 30

20.0% 66.7% 6.7% 6.7% 100.0%

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Very well

For the sake of reading

At times

Very often

Readinstructions

Total

Businessman Employee Housewife Student

Profession

Total

95

Chi-Square Tests

32.420a 9 .000

28.349 9 .001

30

Pearson Chi-Square

Likelihood Ratio

N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

14 cells (87.5%) have expected count less than 5. Theminimum expected count is .33.

a.

Cross tabulation 3. Read instructions * Educational Qualification

Read instructions * Education Level Crosstabulation

4 4 8

50.0% 50.0% 100.0%

5 1 6

83.3% 16.7% 100.0%

5 0 5

100.0% .0% 100.0%

0 11 11

.0% 100.0% 100.0%

14 16 30

46.7% 53.3% 100.0%

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Very well

For the sake of reading

At times

Very often

Readinstructions

Total

PostgraduateUndergra

duate

Education Level

Total

Chi-Square Tests

18.616a 3 .000

24.958 3 .000

30

Pearson Chi-Square

Likelihood Ratio

N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

6 cells (75.0%) have expected count less than 5. Theminimum expected count is 2.33.

a.

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Cross tabulation 4. Read instructions *Customer’s Age

Read instructions * Customer's Age Crosstabulation

3 5 0 0 0 8

37.5% 62.5% .0% .0% .0% 100.0%

0 1 4 0 1 6

.0% 16.7% 66.7% .0% 16.7% 100.0%

3 2 0 0 0 5

60.0% 40.0% .0% .0% .0% 100.0%

2 5 1 2 1 11

18.2% 45.5% 9.1% 18.2% 9.1% 100.0%

8 13 5 2 2 30

26.7% 43.3% 16.7% 6.7% 6.7% 100.0%

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Count

% within Readinstructions

Very well

For the sake of reading

At times

Very often

Readinstructions

Total

19-28 29-38 39-48 49-58 >59

Customer's Age

Total

Chi-Square Tests

22.883a 12 .029

23.633 12 .023

30

Pearson Chi-Square

Likelihood Ratio

N of Valid Cases

Value dfAsymp. Sig.

(2-sided)

20 cells (100.0%) have expected count less than 5. Theminimum expected count is .33.

a.

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Cross tabulation 5. Number of months with PB * Rate Customer Service of PB

Number of months with PB * Rate Customer Service of PB Cross tabulation

Rate Customer Service of PB Total

Excellent Good

Neither good nor bad

Number of months with PB

<1 Count1 3 0 4

% within Number of months with PB

25.0% 75.0% .0% 100.0%

1-6 Count 0 12 2 14 % within

Number of months with PB

.0% 85.7% 14.3% 100.0%

6-12 Count 2 3 0 5 % within

Number of months with PB

40.0% 60.0% .0% 100.0%

>12 Count 1 1 1 3 % within

Number of months with PB

33.3% 33.3% 33.3% 100.0%

Count 4 19 7 30

Total % 13.3% 63.3% 23.3% 100.0%Chi-Square Tests

Value df

Asymp. Sig. (2-sided)

Pearson Chi-Square

23.333(a)

8 .003

Likelihood Ratio 24.546 8 .002N of Valid Cases 30

a. 14 cells (93.3%) have expected count less than 5. The minimum expected count is .40.

Cross Tabulation Analysis:

According to the figures in cross tabulation 1, it can be seen that those who read

instructions are more satisfied than those who rarely do. This can help to correlate

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because the chi-square test helped me be sure that there exists some relationship

between the variables. I am sure because the assume value is less than 0.05. In the

second cross table, it is found that those who are businessmen and have accounts in

BRAC Bank tend to read instructions way more than those of other profession like

employees, students, housewives and others. This is also made sure by the chi-square

test. I undertook many variables with which I tested through cross tables, but I

considered only those which the passed the chi-square test. There is a relationship

between reading instructions and educational qualification of the customers according

to the chi-square test, but the percentage in the table does not show much difference

between those who are bachelor degrees and those who are master degrees. The next

cross table is regarding reading the instructions with their respective ages. The result

is surprising, since the younger customers tend to read much more than the elder ones.

The age ranges from mainly 29-38 years. That whose age ranges from 39-48 mostly

reads instructions for the sake of reading. The fifth cross table portrays the

relationship between the numbers of months a customer has been banking with BRAC

Bank Premium Banking with rating the CS of PB. The table represents that customers

who banked for 6-12 months have rated PB as either ‘Excellent’ or ‘Good’. Although

it can be said that the trend is that higher the number of months that a customer banks,

better is the ranking for CS. But a technical problem persists; customers who’ve been

banking for more than 12 months tend to rate the CS equal amounts of ‘excellent’,

‘Good’ and ‘Bad’. So it is not proper to state that pattern. These are the few insights

taken from the tables.

Regression Analysis:

Introduction:

Regression analysis is a modelling technique that identifies, quantifies, and describes

the relationship between at least two variables, which depend on one another because

of an underlying theoretical reason. In a multiple regressions, we have several

independent variables, which are used to predict the dependent variable.

Description and specification of the model:

The dependant variable of this model is CSI (Customer Satisfaction Index) and the

independent variables are CII (Customer Informed Index) and customer’s

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employment condition, a dummy variable. CSI index (Customer Satisfaction index)

includes 8 dimensions of customer’s satisfactions. The independent variable CII

(Customer Informed Index) is measured by using 3 critical factors that strongly

indicates customers’ degree of being informed of the services provided by PBS. This

model also includes a dummy variable as another independent variable in order to test

the relation whether customer’s employment status has any relation. Usually, a

dummy variable is a numerical variable used in regression analysis to represent

subgroups of the sample in your study. In research design, a dummy variable is often

used to distinguish different treatment groups. Dummy variables are useful because

they enable to use a single regression equation to represent multiple groups. This

means that we don't need to write out separate equation models for each subgroup.

The dummy variables act like 'switches' that turn various parameters on and off in an

equation. Here, a 0, 1 dummy variable is used where the variable takes the value 1 for

employed customer and it takes the value 0 for unemployed customers. However, It is

expected CII is positively related with CSI and dummy variable is also expected to be

positively related with CSI. More importantly, it is assumed that these two

independent variables are expected to be linearly related with the dependent variable,

CRI.

The population multiple regression equation is as follows:

Y= 0 +1X1 +2X2 +

Here,

Y = CSI Index

0 = intercept of the regression line.

1 = coefficient of independent variable X1 (CII)

2 = coefficient of independent variable X2 (Dummy Variable)

X1 = CII.

X2 = Dummy variable; takes the value 1 for employed customer and it

takes the value 0 for unemployed customers.

= Random error with the mean 0.

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Assumptions of the model:

For this model we are assuming that other variables that have influences on CSI Index

as constant. We have assumed some standard clauses to use ordinary least square

method, which are known as classical group of assumptions: These are:

Xi's are fixed or if Xi’s are independent of i's. [ i=1,2,…..,n]

i's are random variables with mean = 0. [ i=1,2,…..,n]

V (i)=E [i -E (i)]2 = E (i 2) = 2

E is constant. [ i=1,2,…..,n]

Ei's are independent of each other. [ i=1,2,…..,n]

There is no set of nonzero constant Co, C1, …..,Ck such that, C0+C1X1+

………..+CkXk = 0. So, X1,…………...XK are linearly independent.

[ i=1,2,…..,n]

Model Estimation & Interpretation:

The regression equation is

Y = 331 + 0.234 X1 - 11.5 X2

β0 = 331

β0 is the intercept of the regression line. Here, b0 =331 means if all the independent

variable takes the value zero, on an average, the CSI (Customer Satisfaction Index)

will be 331.

β1’s estimate b1 =0.234

Other things remaining the same, if the CII (Customer Informed Index) increases by

1, on an average, the CSI (Customer Satisfaction Index) will go up by an additional

0.234.

β2’s estimate b2 = -11.5

Other things remaining the same, for employed Customer CSI (Customer Satisfaction

Index) is 11.5 lower than unemployed customers. It basically indicates that on an

average the less satisfied with the services than the unemployed customers, surprising

it is the opposite of the prior expectation.

Co-efficient of determination R2 = 22.5%

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R-sq is 22.5% means almost 22.5% of the observed variability in the dependent

variables is explained by the independent variables of our regression model. So, this

regression equation has a very low explanatory power. However, in cross sectional

data R-sq is usually very low. Importantly, a problem of using R2 as an overall

measure of the quality of a fitted equation is that when we add more and more

variables in a model, even if these variables are irrelevant to the model, it raises the

value of R2. So, R2 is not a good indication of the model’s overall quality. Rather the

adjusted coefficient of determination should be used for measuring the overall

performances of the model.

Adjusted R2 = 16.8%

R-sq (adj) is the adjusted or corrected co-efficient of determination. R2 (adj) is 16.8%

means almost 16.8% of the observed variability in the dependent variables is

explained by the independent variables of our regression model.

Hypothesis Testing:

In this section of regression analysis, the methodology of hypothesis testing is used to

test a null hypothesis to find out whether the combination of all the variables is useful

predictors of the dependant variable. Another tests of hypothesis for partial regression

coefficients (That is, H0: j = 0) are used to determine if a specific independent

variable is conditionally important in the multiple regression model. By using the

Student’s t statistics and p-value it is concluded whether or not a particular predictor

variable is conditionally significant, given the other variables in the regression model.

(The following two tables provides the required value for the hypothesis test &

interval estimation)

  Coefficients

Standard

Error t Stat P-value

Lower

95%

Upper

95%

Intercept 330.71 27.35 12.09 0.00 274.60 386.82

X1 0.23 0.08 2.80 0.01 0.06 0.41

X2 -11.50 17.80 -0.65 0.52 -48.03 25.02

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ANOVA df SS MS F

Significance

F

Regression 2 7928.85 3964.42 3.92 0.031

Residual 27 27253.81 1009.40

Total 29 35182.67      

Test of Significance for the whole Regression:

First, hypothesis test is to test a null hypothesis to find out whether the combination of

two independent variables is useful predictors of the dependant variable. Accepting

this hypothesis will conclude that none of the predictor variables regression model is

statistically significant and thus it provide no useful information.

Null Hypothesis Ho: 1= 2= 0

Alternative Hypothesis H1: At least one j 0 (j = 1,2,3,4,5 )

Decision Rule: We reject the null hypothesis if

Fcal >F tab

Or, (SSR/k) / [SSE/(n-k-1)] >F tab

Fcal = 3.92

F tab= FK, n-K-1, α = F 2, 30-3, 0.05 = F 2, 27, 0.05 = 3.35

Here, F cal >F tab. Therefore, I reject the null hypothesis that all coefficients are zero

against the alternative hypothesis at 5% level of significance. The p-value or the

smallest significance level at which the null hypothesis can be rejected is 0.031. So,

the entire variable as a whole can predict the dependable variable (CSI) and the

combined effect of these two variables do improve the model that predicts CSI.

Now, the hypothesis testing for each of the coefficients is done to analyze if

individually they have any influence on the dependent variable keeping the other

variable constant.

For the intercept the Hypothesis Testing: (Two sided test)

Null Hypothesis Ho: α = 0

Alternative Hypothesis H1: α ≠ 0

Decision Rule: We reject the null hypothesis if T cal> T tab.

t cal = 12.09

t tab = t n –k-1, α / 2 = t 30 -3, .0.25 = t 27, .0.25 =2.052

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Here t cal is greater than t tab. therefore I fail to reject the null hypothesis against the

alternative hypothesis at 5% level of significance with the two-sided test. The p-value

or the lowest level of significance at which the null hypothesis can be rejected is 0.00.

Hypothesis Testing For 1:

Null Hypothesis Ho: 1 ≤ 0

Alternative Hypothesis H1: 1 > 0

Decision Rule: We reject the null hypothesis if, t cal> t tab

t cal = (b1-1) / Sb1 = 2.85

t tab = t n –k-1, α = t 30 -3, .0.5 = t 27, .0.5 = 1.701

Here t cal is greater than t tab. Therefore I reject the null hypothesis against the

alternative hypothesis at 5% level of significance. Therefore, the CII is statistically

significant predictors of the dependant variable (CSI); and it has a positive

relationship with the CSI (Customer Satisfaction Index). However, the p-value or the

smallest significance level at which the null hypothesis can be rejected is 0.001.

Hypothesis Testing For 2:

Null Hypothesis Ho: 2 ≤ 0

Alternative Hypothesis H1: 2 > 0

Decision Rule: We reject the null hypothesis if, t cal> t tab

t cal = (b2-2) / Sb2 = -.65

t tab = t n –k-1, α = t 30 -3, .0.5 = t 27, .0.5 = 1.701

Here t cal is less than t tab. Therefore I fail to reject the null hypothesis against the

alternative hypothesis at 5% level of significance. However, the p-value or the

smallest significance level at which the null hypothesis can be rejected is 0.52. This

indicates that the customer’s employment status is not a statistically significant

variable for predicting customer’s satisfaction about the service.

Confidence Interval:

Another way of determining whether a specific independent variable is important in

the multiple regression models is to find the confidence interval. The 95% confidence

intervals for 0, 1, 2, is estimated in the following.

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95% confidence interval for 0:

The 95% confidence interval for Y-intercept (0) ranges from 274.60 to 386.82. Here

the 95% confidence interval for 0 does not include 0, and thus I reject the two-tail

hypothesis that the intercept coefficient is 0. Based on this confidence interval, it can

be conclude that the intercept a statistically significant predictor in the multiple

regression model.

95% confidence interval for 1:

The coefficient for the CII has a 95% confidence interval 0.06< 1 <0.41. Here the

95% confidence interval for 1 does not include 0, and thus I reject the two-tail

hypothesis that this coefficient is 0. Based on this confidence interval, it can be

conclude that X1 (CII) is a statistically significant predictor variable in the multiple

regression model.

95% confidence interval for 2:

The coefficient dummy variable has a 95% confidence interval -48.03< 2 <25.02. As

the confidence interval includes 0, and thus I cannot reject the two-tail hypothesis that

the intercept is 0. Based on this confidence interval, it can be conclude that the

dummy variable (customer’s employment status) is not a statistically significant

predictor variable in the multiple regression models.

Analysis of Residual:

The normality plot indicates an approximate linear relationship, thus it is impossible

to reject the assumption of normally distributed residuals.

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Fig 2.25: Normal Probability Plot of Residual

The next residual analysis examines the relationship between the residual and the

dependent variable (both the observed and predicted value). But, this plot does not

provide any clear relationship or any useful information. However, there is no

relationship between the residuals and the predicted value, thus the model errors is

stable over the range.

Research Implications:

Hypothesis test of the coefficients of this model indicates that the independent

variable CII is significant; where as another independent variable the employment

status of employees is not statistically significant. The confidence interval analysis

also supports the above findings. Therefore, the findings indicate that the level of

customer satisfaction about the services provided by Premium Banking is positively

related with the level of knowledge about its service package by its customers. The

hypothesis of this regression analysis that “The customers who are more informed

about the services tend to be more satisfied than those who are less informed.” proved

by the above findings. However, another hypothesis that the employed customers

(who are working in any organization) are more satisfied than the unemployed

customers (students, housewife etc.) cannot be proved by our findings.

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Problems with the Model:

Before moving to the findings of this regression analysis it is highly recommended to

the reader to the aware about some the problems/limitation of this analysis. Like any

other study the limitations of the study is not out of questions, but the following

factors seem to me the main points of weakness of this study. The major limitations of

this report are as follows:

Large-scale research was not possible due to time constraints.

Non availability of data in a systematic way.

Time constraint.

Availability of the reference book is another limitation.

It is very busy office. In this place employees get very little time to teach

theoretical knowledge to the trainee.

I was not able to visit the different branches of BRAC Bank Ltd.

Furthermore, the sample size is relatively small so the responses may not be

completely free from bias.

In addition to that, the customers for FDR account only come in the month of

1 to 15. So, they were not available all the time.

Findings:

On the basis of previous analysis and practical experience of 3 months internship

program, the following findings are observed during the research period:

Need professional data entry operator.

Skilled human resource in every department

Inadequate work force

Lack of proper coordination among different departments.

BRAC Bank Ltd. is not using advance and develop software. They are using

only one software.

Inadequate facilities of Ascend Millennium Banking System.

Conservative Management.

Unauthorized use of different ID in system.

Lack of motivation and training program.

Absence of proper guideline/ planning of respective job.

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No structured reconciliation process.

Limited knowledge about PC and related software.

Duplication of work like; checking and over documentation.

BRAC Bank Ltd. is doing their Office work manually. But other banks are

using many developed techniques and software.

Less secured than the department should be.

Less structured than other departments.

Day by day new upcoming banks are coming with many new services which

are a threat for the bank. So increased number of new bank creates sever competition

in consumer service.

Recommendation:

As I have gone through all the departments under Premium Banking. I have come up

with some points, which can improve the efficiency as well as quality of the work.

The points are as below;

Setting proper planning for each and every work as well as for the whole

department.

Designing jobs on priority basis.

Assigning necessary manpower for every job.

Proper maintenance of files and necessary files and documents on daily basis.

Proper managerial observation and cooperation.

Separating Card department and concern operation.

Avoiding duplication through accuracy and efficiency.

Developing motivational program and training program.

Ensure that every one working in Software knows it properly and giving them

personal ID.

And most of all change of managerial attitude and view point.

Need a separate PB lounge to save the customer’s time.

Need a separate phone line service for the PB clients.

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Conclusion:

We moved a long way from the time when the banks were deposit taking and money-

lending institution. The old concepts, attitudes and methods in banking have

undergone a marked change all over the world. Modern Banking is an outcome

development driven by changing financial activities and lifestyle. Bangladesh has not

lagged behind. Banks are required to participate in the nation building activities and

act as agent for bringing about socioeconomic changes.

Entering as a new bank in private banking scenario of Bangladesh, BRAC Bank is

constantly try to cross the obstacles regarding typical business oriented ideas and

come up with innovative curtailed to its Consumers need to harvest maximum benefit

for them. BRAC Bank Limited is a third generation bank inaugurated on 4 July 2001

with a mission of providing best banking service in the country to enhance economic

activity. In the world of global economy, banking needs have become more diverse

and exotic than ever before. In this regard BRAC Bank promises to fulfil 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, ATM

services is a demand of time. BRAC Bank is maintaining it’s competitiveness by

leveraging on its Online Banking Software and modern IT infrastructure. It is the

pioneer amongst the local banks in introducing innovative products like SMS

Banking.

I was authorized to prepare a report on customer satisfaction about the Premium

Banking service and the functions of BRAC Bank Ltd. for partial fulfilment of my

course requirement. It was a great experience for me to have exposure in the practical

field. As a new bank it has a long way to go. There is huge pressure of work in

BRAC Bank Limited hut the coordination that I get some officials was very helpful

for me. Though having some drawbacks the bank’s overall performance is

satisfactory. I wish a prosperous future for the Bank.

109

Chapter 3

Cases

110

Case 1:

Picnic to Cox’s Bazar:

Bank jobs are usually routine jobs and employees get fed up with their monotonous

nine to six job life. So, they frequently need some arrangements of picnics and tours

that can be helpful for their refreshment and entertainment. BRAC bank Ltd. arranges

picnic outside Dhaka. But after a long period of time, the bank declared holiday for

consecutive three days on the occasion of the Lailatul Barat. The Relationship

Managers of BRAC Bank Ltd. thought of making this holiday a memorable one and

took the initiative of going to a picnic to Cox’s Bazar with the whole team members.

He submitted an application to the head office of BRAC bank Ltd. for asking the

permission of arranging a picnic. Finally, the head office granted the proposal. The

picnic fee per person was Tk 2500 and the rest of the financing was contributed by the

Agrabad Branch of BRAC Bank Ltd.

Everybody was highly glad that they began to take preparation for the picnic from one

month prior. But during the preparation time, lots of conflict and disagreement arose

regarding different matters. The first issue of controversy was whether they would

reserve an air-conditioned or non air-conditioned bus. Some preferred AC bus while

others preferred non AC bus. So this disagreement was going on and on. Finally it

was decided that a vote would be held between AC bus and non AC bus to resolve

that problem and they would choose the one which would get the majority vote. The

majority vote was for the Ac bus and thus the problem was solved.

After a long enthusiastic moment, finally that day came. It was 14th February’2008

and the office was open on that day. The picnic team would set off for Cox’s Bazar at

8 p.m. The interesting fact is that nobody could concentrate on work due to

excitement about the picnic. Everybody was waiting for the time with great eagerness.

But at the eleventh hour, another issue of controversy arose between two groups of

employees. One group was saying that the reserve bus would be in front of their office

when they would set off for Cox’s Bazar while other group was saying that they

would set off from Gabtoli. Gradually, it was turning into a stormy debate and the

executive officer Mr. Rahman who was given the responsibility of reserving the bus

was annoyed with all those controversies and he said that he would not go to Cox’s

Bazar. After that, the two conflicting groups understood that the situation was getting

worse for no reason and they mutually resolved the disagreement by coming to a

111

common decision that they would set off from their office. Then, they all apologized

to Mr. Rahman and requested him to change his negative decision. Finally, he was

agreed.

The whole team really spent a marvellous weekend at Cox’s Bazar. After enjoying a

joyful weekend with the co-workers, they returned to Dhaka at 7 a.m. on 18 th

morning. They had to attend the office on that day but they were still very refreshed

after a long journey. All the employees were working with renewed energy and

vigour. So, I think this sort of official picnics should be arranged quite frequently to

break the monotony of the employee’s lives.

It was really a different experience!! I never had the idea about how all these

preparations take place in an organization while arranging such outdoor programs. I

had great willingness to go with them but I was not allowed to go from my family.

Case 2:

Conflict between two departments:

Little after my joining, my manager asked me to write a mail to our IT counterpart so

that they give all of the Premium Banking team members at head office an access to

the software we use in BRAC Bank Ltd. The vision of seeking such permission was to

enhance the operational excellence and make executives more independent to handle

customer issues. But unfortunately IT team did not understand our concern, they

replied me saying that all the departments have only one executive/manager who can

access the software, and therefore there is no reason to provide access to each

individual of Premium Banking access to the software. They termed such an effort

“over enthusiasm and over exercise of authority”. When the reply came I understood

that there is a communication gap between, and IT team has misunderstood us. I

forwarded the mail to my line manager, and asked for his advice. He called me and

gave me a passionate hearing, after becoming full aware of the situation, he wrote a

email on top of the previous emails, keeping our team mates, his line manager, IT

team members, IT manager, Finance director (line manager of IT manager) in the

loop. He explained in detail why the permission was required and why in business

context the permission requirement of Premium Banking was different from other

departments. The finance director replied to the mail shortly instructing the IT team to

give permission, the IT team was also convinced with the explanation and they gave

112

the permission. This was a good lesson for me about how to handle conflicts in a

corporate environment.

Case 3:

Sponsoring a Car for “Close up 1: Tomkei Khujche bangladesh”:

Meeting the corporate social responsibilities, a company can enhance its widespread

recognition. Since its inception BRAC Bank Ltd. has been donating enormous money

for social purposes. BRAC Bank Ltd., with participation from Western Union Money

Transfer, this year has financed the famous NTV talent hunt “Close up 1: Tomkei

Khujche bangladesh”. The sponsoring has been made in terms of a prize – a Car –

that will be donated to the winner of the talent hunt. The BRAC Bank Ltd. donation

for such a television talent hunt is a milestone in the history of Bangladeshi TV

programs. The Marketing department of BRAC Bank Ltd. headed by Manager

Marketing and MD of the bank signed a contract with NTV on this.

Case 4:

A new branch at Mohammadpur:

A major incident took place during the course of my internship. That was the grand

inauguration of BRAC Bank Ltd. in Mohammadpur Asad Gate. August 18, 2008 was

the joyful day colored with balloons and posters that the new branch started its

journey. This is the 29th branch of BRAC Bank Ltd. The branch has already started to

get acceptance from customers. At the very first day more than hundred customers

opened their savings account in that branch. One limitation of this branch is that it has

only general banking section and no corporate banking facilities in house in the

branch. As I was working with Premium Banking in the center point, I had to

communicate with the in charge of Premium Banking in the new branch – Mr.

Towhidul Islam, Relationship Manager on different occasions and activities.

Case 5:

Celebrating my birthday at office:

August 02 was my birthday. I was not aware that my colleagues know my birthday,

and also I did not tell anyone about the birthday. Just before close of business, my

team mates had arranged a surprise party for me. They brought a cake with a burning

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candle on top to my desk, all of them were singing – “Happy birthday to you …” for

me. I blew the candle off and cut the cake, and we all participated in the refreshment.

They presented me a card where all of them wrote to me their greetings and blessings,

with the card another gift was a novel book of Shirshendu Mukharjee. Such parties

are really motivating for employees, and add values to the satisfaction of individuals.

Case 6:

An incident in cash counter:

In an early June afternoon the bank was open in its usual time. At that time I was

working around the cash section. There was a huge line in front of the cash

withdrawal counter that day. A middle aged gentleman was waiting to withdraw for a

pretty long time, he was annoyed and cursing the bank authority for wasting his

valuable time by making him to stand in the line. He was cursing the inefficiency of

the cash officers. When his time came he threw the cheque in the face of the cash

officer and demanded the delivery. It was humiliating for the officer on duty at the

cash. He reacted violently. He came down from the cash counter and charged the man

verbally. It was simply a mess inside the bank. Everybody was shouting. At last the

branch manager came to handle the situation. She took the customer involved to his

office with two other senior bank officers and bullied the man thoroughly. The

situation calm down and that man went without withdrawing money. I was astonished

to see the whole situation. I have never faced such event and I think that situation

could be handled in a better way. The number of officer at the cash counter should be

increased and the bank officer should never behave to a customer in that way,

whatever he may did. Bank is an institute for customer care and the interest of the

customer should come first. I think that day the bank manger also did not handle the

situation properly. He could handle it in a more mature way, but it was a unique

experience for me. Seeing this other customers was also telling about their cash

system which is not good. Customers need to wait for long time as there officers are

less. Therefore, they must keep one or two extra officers in the cash department.

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Case 7:

Cheque book being transferred to a wrong customer:

I was enrolled in the Head Office of BRAC bank Ltd. I had to manage the PB

customers. On one occasion a customer named “Mohammad Yakub” with A/C no:

1234 (for example) requested for a cheque book. But the concerned department for

cheque book production did a mistake and produced the cheque book in name of “Md.

Yakub”, another customer, with A/C no: 5678 (for example), of the same branch. The

production department also failed to deliver the cheque book to the customer within

promised deadline. When such an erroneous cheque book was handed over to the

customer, Mr. Mohammad Yakub he found the mistake and was very annoyed. He

called HO corresponding department over telephone and took them to task, and even

threatened saying that he would escalate the issue to higher level management. The

intern who was attending the phone call gave him a patient hearing, and replied “we

are sorry, dear sir, for the unfortunate incident…. it was very unexpected mistake on

our part”. The customer became happy with the straight forward response. After

talking a while with the intern the customer was calmed, he filed a complain. The

intern took initiative to immediately issue a new cheque book and handover it to the

customer.

Case 8:

Resignation of staffs:

It was the middle of my internship period. One day I was in bank at 6 pm. Suddenly I

noticed that the staffs of our branch are moving haphazardly. The reason was a

rumour that a key people of the branch have resigned because not getting promotion

though he deserves it. He was Mr. Wahid Mahmud, who was Relationship Manager

and the Chittagong, Agrabad Branch. He has a very convincing personality. He made

a significant contribution in the promotion of Banani branch earlier and helped the

bank to reach a certain benchmark. For example: NSU is a big client of BRAC bank

Ltd. So, to retain the client, he was used to offer chocolates to NSU students, when

they come for their registration purpose. Considering all these, the resignation of

people like Mr. Wahid Mahmud adversely affected BRAC bank Ltd. So, it was a very

significant incident during my internship time. Other officers were also whispering

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that as he is not here anymore, so they are thinking to leave as well. Therefore BRAC

bank Ltd. should not think only for them but also for the whole unit.

Case 9:

Joining of new branch manager:

When I was enrolled for my internship, my branch manager was Mr. Sabbir Ahmed.

But just before the completion of my internship, a new branch manager came

replacing him. She was Mrs. Ferdousi Begum. To me, she was a person of different

personality. Earlier manager was not dominant at all; maintain good interpersonal

relationship with all employees inside the bank. He introduced a new way of banking

with which the stuffs were not acquainted at all. For example, he redesigned the

interior decoration for the branch. He changed the entire set up of the branch and

rearranged the furniture placement. He used cabinets for the first time instead of

traditional tables for keeping registry books and other documents. Eventually it turned

the branch most spacious than before which helped customers to build a positive

impression about the bank. But the new manager was little aggressive and dominant,

she used to shout on employees at little incidents. Even customers were not at all

satisfied with her behaviour and hot temper. Employees were thinking of a transfer or

even leaving the bank at her disgraceful behaviour.

Case 10:

Joining of new MD and CEO:

Mr. Imran Rahman, MD and CEO of BRAC bank Ltd. with a long vision and high

ambition passed away just before my internship. He developed a development blue-

print covering all the expansion and enhancements of the bank. The plan covered

introducing new branches, ATMs, SME units and services. He was also thinking of

making different department of the bank independent, making the work environment

better, etc. His death was an enormous loss to the bank. Mr. A.E.A. Muhaimen

became the new CEO and MD of the bank. Famous as a cost cutting manager, Mr.

Muhaimen was very rude and stubborn in his behaviour. No line managers or

department’s heads feel comfort to talk with him for his ill behaviours. It’s now a

matter to see where this new CEO and MD can lead BRAC bank Ltd.

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Bibliography:

Prospectus of BRAC Bank Ltd.

Annual Report of BRAC Bank Ltd (2005-2006).

Several Booklets of BRAC Bank Ltd.

Several Booklets of Premium Banking

BRAC Bank Website:www.bracbank.com

Several news letters from BRAC Bank Ltd.

Conference of BRAC Bank Ltd.

Books of Financial Management.

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Appendix

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Sample Customer Survey Questionnaire:

1. Gender: Male Female

2. Age: a.19-28 b. 29-38 c. 39-48 d. 49-58 e. 59 and above

3. Educational qualification:

a. Masters Degree b. Bachelor Degree c. Higher secondary certificate

d. Secondary school certificate

4. Marital Status: Married Single

5. Profession: a. Student b. Employee c. Businessman d. Housewife e. Others

6. Where do you stay?

a. Banani b. Gulshan c. Dhanmondi d. Uttara e. Others ______________

7. For how long you are using the Premium Banking Service of BRAC Bank?

a. Less than 1-month b. 1 to 6 month c. 6 month to 1 year

d. More than 1 year e. More than 2 year

8. Do BRAC Bank PB provides quality services?

a. Yes b. No

9. Do you think All Relationship managers are knowledgeable of their customers and

they are very helpful?

a. Yes b. No

10. Do you think the credit card facility provided for Premium Banking clients is

satisfactory? If not then please specify the problem in the blank space.

a. Very satisfactory b. Neutral c. Not that much satisfactory d. Dissatisfied

_____________________________________________________________________

_____________________________________________________________________

11. How did you find out about this account at first?

a. From RMs of the bank b. From my friend c. Bank’s Brochure d. Company website e. Other______________________

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12. What is the average amount of Bangladeshi Taka you maintain in your

account(s)?

a. 10,000-50,000 b. 50,001-500,000 c. 500,001-5,000,000

d. 5,000,001-10,000,000 e. >10,000,000

13. Do you face any difficulties in opening the account or depositing or withdrawing

the cash? Please specify the problem in the blank space. (Example- it is time

consuming or hassles to pay the money)

a. Yes, a lot b. No, not at all c. Yes, sometimes

14. Do you use ATM Card? Yes No

15. To what extent do you have problems with the number of the ATM machines?

Very much 1 2 3 4 5 Not at all

16. How often are you annoyed with the ATM machine services?

Very Often 1 2 3 4 5 Not at all

17. I have signed up for PB services because: a. PB provides quality services b. it is very much secured

c. Relationship Managers are very helpful d. All of the above 18. Would you recommend PB service to any of your friends?

a. Yes, absolutely b. Maybe c. No, not at all d. Never 19. Please state your satisfaction level regarding the Premium Banking service of

BRAC Bank.

a. Very satisfied b. Satisfied c. Neutral d. Dissatisfied

e. Very dissatisfied

Strongly Disagree

1

Disagree2

Neutral3

Agree4

Strongly Agree

5

BRAC Bank PB provides quality services.

In any kind of need Premium Banking (PB) provide quick responses.

A service is quick/fast.

Relationship Managers (RM) are very helpful.

All RM’s are knowledgably on customer.

BRAC Bank PB has fragmented network in their branches.

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All details of customer are documented

Your expectation from PB is matching with you

BRAC Bank has a good variety of product

Interest rates are reasonable

You like the car loan facility of BRAC bankBRAC Bank PB client get the best service regarding loan facilities

BRAC Bank has the maximum type of FDR

“I think the introduction of PB has increased BRAC Bank’s quality in value added service”

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