Evaluation of Retail Banking In Dhaka Bank Limited

INTRODUCTION:

All over the world the measurement of Banking has been changing rapidly due to Deregulation,

Technological improvement and Globalization. Banking in Bangladesh has to keep pace with the

global change. Now Banks must compete in the market place both with local institution as well

as retail banking ones. To survive and prosper in such a competitive banking world, two

important requirements are Development of appropriate financial communications by the

central bank and Development of "professionalism" in the sense of developing an appropriate

manpower structure and its expertise and experience. To introduce skilled Banker, only

theoretical knowledge in the field of banking studies is not sufficient. An academic course of the

study has a great value when it has useful application in real life situation. So, I need proper

application of my knowledge to get some benefit from my theoretical knowledge and make it

more tactful. For this I engaged myself in such fields to make proper use of my theoretical

knowledge in my practical life situation. Such all application is made possible through

internship. When theoretical knowledge is obtained from a course of study at only the half way

of the subject matter then Internship implies on other the full application of the methods and

procedures through rich acquired of subject matter can be forcefully applied in my day to day

life situation. Such a procedure of useful application is known as internship.

BACKGROUND OF THE STUDY

The Internship program of BBA students of the Faculty of Business Studies, Bangladesh

University of Business & Technology (BUBT), is an integral part of the BBA program. After

completion of the program period a student must submit the report on the assigned topic to

the Supervisor and the department. Four (4) credit hours for this internship program out of 124

credit hours of the program. The program is of three months duration. I was assigned to Dhaka

Bank Limited to complete the program. During this period I worked with the employees of the

organization. In consulting with the supervisor of the program I have selected a topic

“Evaluation of Retail Banking In Dhaka Bank Limited”.

SIGNIFICANCE OF THE STUDY:

Theoretical knowledge is not enough for a business student. Because, there must be a

gap between theoretical knowledge and practical field. Our internship program has

been launched mainly to bridge this gap.

This research proposes to investigate the Retail Banking Division of Dhaka Bank Limited. The

objective of the bank is to become a highly professional and profitable bank to contribute to

the economic development of the country. The Bank aims to continue expanding Branch

network to reach wide spectrum of customers across the country and serve by offering

products and services backed by latest technologies.

The bank was able to establish confidence in the minds of the customers regarding maintaining

adequate liquidity to meet up the borrowers’ requirement. At the same time, the bank was able

to remain profitable in terms of interest income and also maintaining a higher spread. Also

lending rate is being decreased under the policy guidelines of Bangladesh Bank and the bank

has to adopt necessary strategy to maintain its profitability from the loan portfolio. The

purpose of Dhaka Bank Ltd. is not only to grant credit but also to develop the country through

industrialization by selecting correct project and provides assistance in different way to

implement successfully of selected project.

SCOPE OF THE STUDY:

The study would focus on the following areas of Dhaka Bank Limited.

■ Credit appraisal system of Dhaka Bank Limited.

■ Procedure for different credit facilities.

■ Portfolio (of Loan or advances) management of Dhaka Bank Limited.

■ Organization structures and responsibilities of management.

Each of the above areas would be critically analyzed in order to determine the

efficiency of DBL’s Credit appraisal and Management system.

OBJECTIVE OF THE STUDY:

Broad objective of the Report

The broad objective of this project is to prepare the Internship report on selected topic

“Evaluation of Retail Banking In Dhaka Bank Limited”.

Short objective of the Report

The project has been directed by the following objectives:

o To analysis the pros and cons of the conventional ideas about credit operation of a

Bank.

o To have better orientation on credit management activities specially credit policy and

practices, credit appraisal, credit-processing steps, credit management, financing in

various sector and recovery, loan classification method and practices of Dhaka Bank

Limited (DBL).

o To compare the existing credit policy of Dhaka bank limited with that of best practices

guideline given by Bangladesh Bank, the central bank of Bangladesh.

o To identify and suggest scopes of improvement in credit management of DBL.

o To get an overall idea about the performance of Dhaka Bank Limited.

o Exploring the granting procedure of credit cards. The focus will be on risk assessment.

o Exploring and analyzing the attributes of credit defaulters. Some statistical tools will be

used for this analysis.

METHODOLOGY

The report is prepared on the basis of credit program of Dhaka Bank Limited. Different files,

statements and manual have helped me preparing this report. The subject matter of this report

is based on primary and secondary sources of data and information:

I. Type of Research: This is briefly revealing the retail banking activities of the Dhaka Bank

Limited (DBL).

II. Sources of Data: All the necessary information to prepare this report are collected form both

primary and secondary sources of data.

Primary Source: It includes the fresh or completely new data sources collected for a specified

purpose, such as -----

Direct interview & Conversation.

Expert opinion

Official records

Practical work experience.

Different files and documents study.

Group Discussion

Discussion with my supervisor.

Secondary Source: It includes sources of existing/published data, such as --------

Books

Articles

brochures

Annual Report

Leaflets

Net browsing

III. Tools used for data collection: I have used following tools to gather our necessary data or

information (both the primary & Secondary) -

Primary Data: All the necessary primary data are collected by using the following

methods or tools -

Observation while working in different desks

Informal discussion with professionals

Informal and oral interview.

Secondary Data: I have used following tools to gather our necessary secondary data-

Brochures of Dhaka Bank Limited

Annual Report (2006-08) of Dhaka Bank Limited

Guidelines of different manual of Dhaka Bank Limited.

Deferent types of documents of Dhaka Bank Limited

Leaflets of Dhaka Bank Limited.

Net browsing

Analysis & reporting:

Descriptive analysis such as ‘SWOT analysis of Dhaka Bank’, analysis of the ‘whole operation of

Dhaka Bank’ are significantly described here. Different tools are used to analyze the gathered

data and different types of computer software are used for reporting the gathered information

from the analysis, such as – Microsoft Word, Microsoft Excel, and Microsoft Power Point.

LIMITATIONS OF THE STUDY:

Although I have obtained whole hearted Co-operation from employee of DBL Staffs but They

were extremely busy. So they were not able to give much time as they and I would 1ike.

Besides, total duration of internship is not sufficient to give me more than a superficial idea of

the working of the various departments I was rotated through. On the way of my study, I have

faced the following problems which may be termed as the Limitation/short coming of the

study. These are as follows: --

a) The main constraint of the study was insufficiency information which is required for the

study.

b) Since the Bank personnel are very busy with their activities, as a result they failed to co-

operate with me to complete this report.

c) The major problem of the study was shorter time period. For an analytical purpose, sufficient

time is required. But I was not given sufficient time to prepare such as in-depth study.

d) Such a study was carried out by me for the first time. So, in-experience is one of the main

factors that constituted the limitation of the study.

Also that:

The problem of Load shedding.

Unavailability of adequate date information from the website.

However every possible measurement was taken to minimize the above mentioned limitations

and to make the study effective and fruitful.

Overview of Dhaka Bank Limited

Bangladesh economy has been experiencing a rapid growth since the '90s. Industrial and agricultural development, international trade, inflow of expatriate Bangladeshi workers' remittance, local and foreign investments in construction, communication, power, food processing and service enterprises ushered in an era of economic activities. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to channelize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country grouped together to responded to this need and established Dhaka Bank Limited in the year 1995.

The Bank was incorporated as a public limited company under the Companies Act. 1994. The Bank started its commercial operation on July 05, 1995 with an authorized capital of Tk. 1,000 million and paid up capital of Tk. 100 million. The paid up capital of the Bank stood at Tk

1,934,252,875 as on June 30, 2008. The total equity (capital and reserves) of the Bank as on June 30, 2008 stood at Tk 3,424,609,016.

The Bank has 44 branches, 2 SME Service Centers, 1 Business Center, 2 Offshore Banking Units across the country and a wide network of correspondents all over the world. The Bank has plans to open more branches in the current fiscal year to expand the network.

The Bank offers the full range of banking and investment services for personal and corporate customers, backed by the latest technology and a team of highly motivated officers and staff.

In our effort to provide Excellence in Banking services, the Bank has launched Online Banking service, joined a countrywide shared ATM network and has introduced a co-branded credit card. A process is also underway to provide e-business facility to the bank's clientele through Online and Home banking solutions.

Dhaka Bank Ltd. is the preferred choice in banking for friendly and personalized services, cutting edge technology, tailored solutions for business needs, global reach in trade and commerce and high yield on investments.

Mission of the Dhaka Bank Limited

To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking.

Vision of the Dhaka Bank Limited

At Dhaka Bank, we draw our inspiration from the distant stars. Our team is committed to assure a standard that makes every banking transaction a pleasurable experience. Our endeavour is to offer you razor sharp sparkle through accuracy, reliability, timely delivery, cutting edge technology, and tailored solution for business needs, global reach in trade and commerce and high yield on your investments.

Goal of the Dhaka Bank Limited

Our people, products and processes are aligned to meet the demand of our discerning customers. Our goal is to achieve a distinction like the luminaries in the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision – Excellence in Banking.

Objective of the Dhaka Bank Limited: Enhancing savings tendency of the people by offering attractive and lucrative new

savings scheme.

Encouraging and motivating the new entrepreneurs to establish industries and business in line with development of national economy.

Financing the foreign trade of the country both Export and Import. Enhancing the mobilization of savings both from urban and rural area.

Values of the Dhaka Bank Limited: Customer Focus. Integrity, Teamwork. Respect for the Individual, Quality. Responsible Citizenship.

Organizational Structure of Dhaka Bank Ltd:There are three different wings to consist the organizational structure of PBL. They are: Board Directors Executive Committee Audit Committee Management Committee

Board of Directors:

[

Chairman

Vice Chairman

Directors

Managing Director

Company Secretary

Auditors

Legal Advisor

Advisor

Executive Committee:

Audit Committee:

Management Committee:

Chairman

Vice Chairman

Member

Chairman

Member

Managing Director

Deputy Managing Director

Head of Credit Operations & Change Management

Company Secretary

Head of Operations Division

Head of Audit & Internal Control Division

Management

Head of Credit

Head of Human Resources

In-Charge, Retail Banking DivisionDivision

Head of Capital Market Services

Head of Finance & Accounts DivisionDivision

Management

In-Charge, SME Unit

Public Relations Officer

In-Charge, Retail Banking DivisionDivision

Head of Capital Market Services

In-Charge, SME Unit Management

Public Relations Officer

In-Charge, Information Technology Division

In-Charge, Treasury Division

Global Transaction Services Division

Hierarchy of Dhaka Bank Ltd:

Deputy Managing Director (DMD)

Senior Executive Vice President (SEVP)

Executive Vice President (EVP)

Senior Vice President (SVP)

Vice President (VP)

Senior Assistant Vice President (SAVP)

Assistant Vice President (AVP)

Senior Principal Officer (SPO)

Principal Officer (PO)

Senior Officer (SO)

Management Trainee Officer (MTO)

Officer

Managing Director (MD)

PRODUCTS & SERVICES

Corporate Banking:

Securitization of Assets

A powerful and effective means of generating funds for a certain category of institutions,

Securitization of Assets is still in its infancy in The need however for such a service is great and

there is a lot of support from multilateral financial institutions, such as the World Bank and the

Asian Development Bank, for such activities to be developed further in this country.

Dhaka Bank intends to take up this challenge and play a significant role in ensuring that

Securitization of Assets becomes a normal part of the range of financial instruments available

for organizations who can count on a steady, but piecemeal, flow of revenue and want to

translate this stream into cash resources with which to carry out further lending activities to

new customers. Some practical issues still need to be settled such as those concerning pricing,

or the legal framework, but it is expected that, as Dhaka Bank and other institutions pursue

more such securitization activities these will be resolved.

Finance & Advisory Services

Given the needs of its large and varied base of corporate clients Dhaka Bank will be positioning

itself to provide investment banking advisory services. These could cover awhole spectrum of

activities such as Guidance on means of raising finance from the local Stock markets, Mergers

and Acquisitions, Valuations, Reconstructions of Distressed companies and other expert

knowledge based advice. By this means Dhaka Bank hopes to play the role of strategic

counselor to blue-chip Bangladesh companies and then move from the level of advice to

possible implementation of solutions to complex financing problems that may arise from time

to time. This would be an extra service that would complement the normal financing activities

that Dhaka Bank already offers to corporate business houses.

Syndication of Funds

There has been a surge in the number of syndication deals closed in the last few years. 2004

was an exceptionally good year for syndicated deals for the local commercial banks also for the

foreign banks. The total number of syndications in 2004 exceeded 10 totaling over Tk. 10

billion. This rise in the number of syndications can be primarily attributed to the prudential

lending guidelines of the Bangladesh Bank. A commercial bank may provide funded facilities up

to a maximum of 25% of its equity. Due to this reason, projects with sizeable costs need to

approach more than one bank for their debt requirements and therefore the demand for

syndications exist. Credit risk diversification has led many international companies to introduce

credit derivatives that are actively being traded. Securitization of assets is one such credit risk

derivative that allows financial institutions to diversify their portfolios.

At Dhaka Bank Limited, the Syndications and Structured Finance unit was setup on October 30,

2004. This unit successfully closed two syndicated deals in the first and second quarters of

2004. The Syndications and Structured Finance team as a business unit soon followed up by

closing another deal totaling Tk 2.10 billion for a large local corporate. The year (2004) being

the first full year of operation for the team ended on a high note as we were able to close three

syndicated deals as the Lead Bank, two deals as the Co-Arranger and several other deals as a

participant.

Retail Banking

In the year 2007, Dhaka Bank Ltd. has signed MOU with 8 (eight) renowned car dealers namely:

Haq's Bay, Car House Ltd., The Sylhet Car, Car Port, Legend Car, Nippon Auto Trading, M/s.

Kabir Enterprise and Capital Motors. The MOU empowers car buyers to avail DBL Car Loan at a

reduced rate of 15%. This MOU will be valid for two years. Dhaka Bank will continue the MOU

signing campaign with other renowned car dealers in and around Dhaka and Chittagong.

Deposit Double is a time specified deposit scheme for individual clients where the deposited money will be doubled in 6 years.

Deposit Pension Scheme Dhaka Bank is well poised to be the leading Retail Banking business

amongst the local private banks. Bank's conscious efforts in brand building, introducing and

supporting new packaged products, developing PB organization along with non-traditional

delivery channels have resulted in good brand awareness amongst its chosen target markets

Installment based savings schemes are a major category of saving instruments amongst mid to

upper middle-income urban population.

Income Unlimited

The management of Dhaka Bank Limited is pleased to launch Special Deposit Scheme, a new liability product on May 04, 2005.

Product Name Special Deposit Scheme

Product Features

Excel Account

Has been tailored in the manner of having both asset and liability characteristics blended into a single product for salaried individuals employed in any institution. On virtue of this product, prospective clients receive a credit interest based on the credit balance available in the account. The clients will also be required to pay the bank OD interest if the balance of the account becomes overdraft. Salary Account

Dhaka Bank has launched a special package of savings account for employees belonging to institutions with which Dhaka Bank has a corporate agreement. With this package salaried employees of these institutions enjoy interest on a daily balance. The key features of the Salary Account are:

* Interest to be calculated on a daily balance basis

* No Periodic Service Charge

* ATM Card Facility

* Credit Card Facility

* On-line Banking Facility

* Internet & SMS Banking Facility

Gift Cheque

Dhaka Bank has recently refurbished its Gift Cheque. The features of the gift cheque are as

follows:

* Can be en cashed at any branch even if the en cashing branch is not the issuing branch of the

instrument.

* Interest will be applicable only if the instrument is en cashed after three months from the

date of issue in the following manner:

No Interest if en cashed before three months from the date of issue.

6% if en cashed after three months and before twelve months from the date

of issue.

7.25% if en cashed after twelve months from the date of issue.

* The gift cheque may be en cashed using either of the two modes, (a) cash or (b) Fund

Transfer. Encashment of gift cheque is not allowed over clearing.

* No service charge is applicable

* Dhaka Bank Limited issues gift cheques in three denominations of Tk.100, Tk.500 and Tk.1000

Personal Loan

As part of establishing a Retail Banking franchise of Dhaka Bank Limited, the bank has

successfully launched Personal Loan. The product is a term financing facility to individuals to aid

them in their purchases of consumer durables or services. The facility becomes affordable to

the clients as the repayment is done through fixed installment s commonly known as EMI

(equated monthly installment) across the facility period. Depending on the size and purpose of

the loan, the number of installments varies from 12 to 48 months.

Car Loan

Car Loan is a term financing facility to individuals to aid them in their pursuit of has a car of

their dream. The facility becomes affordable to the clients as the repayment is done through

fixed installment s commonly known as EMI (equal monthly installment) across the facility

period. Depending on the size and purpose of the loan, the number of installments varies from

12 to 60 months. In case of brand new cars the loan tenure will be maximum 72 months.

Home Loan

The product is a term financing facility to individuals to aid them in their purchases of

apartment or house or construction of house. The facility will become affordable to the clients

as the repayment is done through fixed installment as commonly known as EMI (equal monthly

installment) across the facility period. Depending on the size of the loan, the maximum period

of the loan would be 180 months (15 years).

Islamic Banking

Dhaka Bank Limited offers Shariah based Islamic Banking Services to its clients. The bank

opened its First Islamic Banking Branch on July 02, 2003 at Motijheel Commercial Area, Dhaka.

The second Islamic Banking branch of the bank commenced its operation at Agrabad

Commercial Area, Chittagong on May 22, 2004.Dhaka Bank Limited is a provider of on line

banking services and any of its clients may avail Islamic Banking services through any of the

branches of the bank across the country.

Dhaka Bank Islamic Banking Branches offer fully Shariah based, Interest free, Profit-Loss Sharing

Banking Services. Dhaka Bank Shariah Council is closely monitoring its activities. Besides, Dhaka

Bank is an active member of Islamic Banking Consultative Forum, Dhaka and Central Shariah

Board of Bangladesh.

Our valued clients may have the following accounts with our Islamic Banking Branches

01.Al-Wadeeah Current Account.

02.Mudaraba Savings Account.

03.Mudaraba Term Deposit Account.

04.Mudaraba Special Notice Account.

05.Mudaraba Hajj Savings Account.

06.Mudaraba Pension Scheme Account.

07.Mudaraba Special Deposit Scheme Account.

08.Mudaraba Foreign Currency Deposit Account.

Dhaka Bank Limited Islamic Banking Branches offer the following products

01.Mudaraba Purchase Order.

02.Bai Muazzal Industrial.

03.Bai Muazzal Others.

04.Mudaraba Post Import Trust Receipt.

05.Mudaraba Term Financing Industrial.

06.Mudaraba Term Financing Others.

07.Sirkatul Milk.

08.Ijara Transport.

09.Ijara Machinery & Equipment.

10.Quard.

Besides, selling of Payment Order, Demand Draft, Bank Guarantee and other banking services

are available in Dhaka Bank Limited Islamic Banking Services

Capital Market Services

Capital Market Operation besides investment in Treasury Bills, Prize Bonds and other

Government Securities constitute the investment basket of Dhaka Bank Limited.

Interest rate cut on bank deposits and government savings instruments has contributed to

significant surge on the stock markets in the second half of 2004, which creates opportunities

for the Bank in terms of capital market operations. The Bank is a member of Dhaka Stock

Exchange Limited and Chittagong Stock Exchange Limited. The investment portfolio of the Bank

made up of Government Securities and Shares and Debentures of different listed companies

stood at Tk. 3,078 million as of December 31, 2004 indexing a 50% increase over Tk. 2,046

million in the previous year. Income from investment stood at Tk. 146 million in 2004

registering a 10% growth over the previous year.

SME

Since inception, the Dhaka Bank has held socio-economic development in high esteem and was

among the first to recognize the potentials of SMEs. Recognizing the SME segment’s value

additions and employment generation capabilities quite early, the Bank has pioneered SME

financing in Bangladesh in 2003, focusing on stimulating the manufacturing sector and actively

promoting trading and service businesses.

ATM Card Services

Cash Withdrawals – up to Tk.1 Lac per day

Utility payments – AKTEL, BanglaLink, GP, CityCell, TeleTalk Mobile phone bills etc.

Multi-account access

Fund Transfers

Mini Statements

PIN change

Credit Card Services

Reasons for Preferring Dhaka Bank VISA Credit Card

Substitute of Cash- Zero Cash Handling ensures Security

Wide Range of Local & International Products (Classic, Gold)

Hassle Free Documentation

No Joining or Processing Fee

Flexible Credit Limit Enhancement Based on Usage & Regular Payment

Flexible Payment through Cash, Cheque or Dhaka Bank account debit

Auto Debit Payment facilities for DBL account holders

Auto Renewal of card before expiry date

Competitive Fees & Charges

Supplementary Cards for dear ones

Separate Limits for Supplementary Cards

Cash Advance facility upto 50% of Credit Limit

Dedicated Sales Team and Customer Service Desk at your service

International Card against RFCD account & ERQ

International Card- Accepted Worldwide for Purchase & Cash Withdrawals

Locker Services

You could use the locker facility of Dhaka Bank Limited and thus have the option of covering your valuables against any unfortunate incident.

We offer security to our locker service as afforded to the Bank's own property at a very competitive price.

We would be at your service from Saturday through Thursday from 9:00 am to 4:00 pm. Lockers are available at Gulshan, Banani, Dhanmondi, Uttara, CDA Avenue & Cox's Bazar Branch. The products and services offered from this department include:

* Online fund transfer between Dhaka and any branch of DBL over the country

* Efficient collection mechanisms at different outstation points

* Innovative and competitive deposit products

* Prompt distribution of inward remittance at competitive rates

* Mobile banking.

Other Departments

Human Resource Department (HRD)

This department is very essential and important department for every organization. This is the

place where the employees get the opportunity to get trained and all other human resource

related services are dealt. This department is not directly involved with Bank business but

working with those persons who directly & indirectly involved with Bank business. The major

responsibility of HRD is employee’s recruitment, posting, transfer, increment, Bonus, provident

fund, confirmation, training, hire & fire and so on. Welfare of all departmental employees is on

HRD. Therefore, HRD should be judicious, compassionate and rewarding to all employees.

The major responsibilities of HR are as follows:

Employee recruitment

Posting

Transfer

Increment

Established yearly performance bonus

Provident fund

Confirmation

Training

Travel policy

Telephone policy

Hospitalization

Card Division

DBL is the first domestic commercial bank in Bangladesh to introduce Visa Electronic and Visa

Credit Card at the same time. DBL is also the only bank in Bangladesh to introduce Visa ATM

Acquirer along with POS Acquire, which opened the opportunity for all the Visa Cardholders

(domestic and international) to use the ATMs.

PROFILE OF DHAKA BANK TRAINING INSTITUTE

Human resources development through training is the most essential part for organizational

growth since it enriches knowledge, skill and professional expertise. The utter need for

professional development of employees of Dhaka Bank Limited has always been duly

recognized by the Board of Directors and the Management of the Bank.

The approval for establishment of a training institute in the name of Dhaka Bank Training

Institute was given in the Executive Committee Meeting held on December 07, 1999. Initially in

June 2000, the basic infrastructure for a non-residential Training Institute was set in the first

floor of Adamjee Court, 115-120, Motijheel Commercial area, Dhaka. This was in fact a shared

premise with Dhaka Bank Limited, Local Office. Decision was made to shift the Training Institute

to a bigger space considering the broader dimension of training and increased volume of

activities. In September 2001, DBTI was shifted to the previous premises of a three-storied

building at House 02, Road 12, Sector 01, Uttara Model Town, Dhaka 1230.

In January 2004, DBTI was again relocated to the present premises of Sara Tower (3 rd Floor),

11/A Toyenbee Circular Road, Motijheel C.A., Dhaka 1000 with a total office space of about

4,000 sq. ft.

Dhaka Bank Training Institute is committed to develop the human resources, the main driving

force of the Bank through structured modular training programmers. With a view to achieve

professional excellence in Banking, DBTI conducts various courses, workshops, executive

development programmes mainly for officers and executives of the Bank.

Since inception in June 2000 till October 2006, DBTI provided training to as many as 4,202

participants through 176 different training programmers. There were 17 Foundation Training

Courses for the newly recruited Probationary Officers, Assistant Officers and Junior Officers

covering areas like General banking, Credit & International Trade. Various training courses of

long duration were conducted on International Trade, Finance & Foreign Exchange, Credit

Management, Banking Laws & Practice, Lending Risk Analysis, General Banking & Cash

Management, Marketing Strategy of Banking Products, Computer Usage, Computer Software

and Application, Islamic Banking & Finance etc.

Dhaka Bank Training Institute has also conducted various workshops on SWIFT, UNIX Operating

system and Banking Software PCBank/M, Clearing House Procedure – NIKASH, Uniform

Customs and Practice for Documentary Credit (UCPDC), Uniform Rules for Collection (URC),

Uniform Rules for Bank-to-Bank Reimbursement (URR), Any-Branch Banking, Credit Card

Marketing, Revised Procedures of Loan Classification and Provisioning and Credit Information

Bureau (CIB) Reporting, Prevention of Money Laundering, Irregularities & Malpractices in Banks

and Risk Management, Reconstruction of Financial Statements & Credit Scoring System,

Preparation of Credit Proposals and Documentation, Aretha Rin Adalat Ain 2003, Managing

Core Risks (Credit Risk, Foreign Exchange Risk, Internal Control & Compliance Risk, Asset

Liability Management Risk and Money Laundering Risk) in Banking, Marketing of Retail Banking

Products, Insurance in Banking Business, etc.

Management, it was decided that the DBTI Team would visit all the Branches to conduct

Workshop on the subjects. The purpose was to cover all Officers of the Bank to have attended

the Workshop as desired by the Central Bank.

A profile of Dhaka Bank

Official name : Dhaka Bank LimitedLegal frorm A public limited company incorporated in Bangladesh on 6th April 1995 under the

Companies Act, 1994 & listed in Dhaka Stock Exchange Ltd & Chittagong Stocki Ltd.

Date of commencement

July 5, 1995

Registered qffice Biman bhaban, 1st flr, 100, Motijheel C/A, Dhaka-1000Telephone 9554514, 9571006-10Telefex 9556584Swift code: DHBLBDDHe-mail Dhakabank@bdonline.comWeb page www.dhakabank.info Auditors ATA HAN & CO, Chartered AccountantsTax consultant Howlader, Youns & Co, Chartered AccountantsManaging director

Shahed Noman

Company secretary

Arham Masudul Huq

Academics & logistics:

Besides Vice President of DBTI and internal resource persons, DBTI invites experienced and

knowledgeable external resource persons from Ministries, Bangladesh Bank, Bangladesh

Institute of Bank Management, Universities and other relevant organizations to deliver lecture

and conduct practical sessions.

The Institute has a large classroom, which can accommodate more than 50 participants. DBTI

has its own computer lab; in which computer and information technology related training

programmers are conducted throughout the year. The computer laboratory has arrangement

for on-line training with test server connected directly from the main server at our IT Division.

To impart IT & Software training smoothly, the Institute & IT Division jointly arranges

programmers using LAN with computers of IT Division & DBTI. The Bank installed core Banking

Software Flex cube acquired from I-flex, Bangalore, India. According to I-flex Annual Report

2001-02, they provided software & services to 345 financial institutions across 84 countries.

Flex cube, the product software of I-flex, is a world class integrated banking software with a full

suite of core, corporate, trade finance, treasury and general ledger modules. It provides truly

real time on-line anywhere anyway banking service through Branches ATMs, Internet banking,

SWIFT, telephone banking and mobile phone banking. That requires us to be prepared for

thorough & vigorous training for all relevant Executives & Desk Officers.

Sufficiently furnished & properly equipped, DBTI can smoothly organize training with easy

arrangement for classroom logistics, multimedia and overhead projector. Group Discussion,

exams, newspaper corner, lunch & snacks rooms are also there with comfortable

arrangements.

Besides internal resource persons, DBTI invites experienced and knowledgeable external

resource persons from Ministries, Bangladesh Bank, Bangladesh Institute of Bank Management,

Universities and other relevant organizations to deliver lecture and conduct practical sessions.

Training Consultancy/Tie-up/Partnership

As a complete Training Institute we train not only employees of our Bank, other fellows of the

Banking fraternity are also trained here. So far we have arranged training courses (either solely

for other Banks or jointly in the Courses attended by mainly our employees) for employees of

Social Investment Bank Limited, Bank Asia, Premier Bank etc.

DBTI, in a bid to work in partnership and as a respectful gesture towards Human Resources

Development in an interactive way of expanding relationship, conducted Foundation Training

Course for the Bankers for 40 Probationary Officers of Jamuna Bank Limited, a fellow Private

Commercial Bank in 2004. It may be mentioned that while charging for conducting such Course,

we considered only variable cost elements being guided by the idea of cementing the bondage

among Banking Fraternity.

Internally, we tie-up with our Retail Banking Division to arrange pre-launch trainings involving

sales peoples of companies who will be marketing our new Banking products. We also train the

Direct Sales Agents working with Marketing Companies like Market Access Limited etc. for

selling our products. Areas for collaboration included training and technical assistance on

Information Technology, Marketing, Human Resources Development and Credit Management.

SEDF is a multi-donor funded programme, promoted by the International Finance Corporation

(IFC) and managed by the SME Department of the World Bank Group. As per the MOU, the

Bank will participate in the following collective programmers:

Corporate governance workshop

Industry analysis

Reconstruction of financial statements and credit scoring

Credit risk and lending to SME sector

Managing problem loans and debt recovery

Asset and liability management

Lease financing

Islamic banking and finance

Marketing of financial services to SMEs

Customer service (satisfaction survey, service measurement and benchmarking)

Leadership and change management

Loan syndications

Preparation of Course Plan

While designing & formulating a Course, we gather General Information regarding the course,

fix target group and code of conduct for them to follow. Thereafter we talk to Head Office & the

Management. The programme is drawn within the policy given by the Board of Directors. While

making a list of programmes/courses to hold over a certain period, in addition to basic/core

Banking Courses we include need-based programmes as well. We have already conducted

several Training Need Assessments in this connection.

The Session Schedule is prepared setting topics & classes in proper order. Appropriate Speakers

for the topics are selected from the Faculty Members, if any, of our Institute and

Bankers/Experts on the subject in our Bank, fellow Banks, Universities, Government Secretariat

and other places.

The Vice President calls periodical staff meetings to discuss policy issues, current development

in relevant fields and also common matters like housekeeping, library upkeep, logistic support,

progress in arrangement of present & ensuing programmes etc.

We interact with the Training Institutes of different fellow Banks & other Institutes including

Bangladesh Institute of Bank Management (BIBM) for curriculum development. We also seek

suggestions from the Management in such matters.

Retail Banking

Practice of Loan and Advances

Consumer Credit Scheme:

DBL has devised and introduced Consumer Credit Scheme to extend credit facility to the limited

and fixed income group to improve their standard of living. Under this scheme the bank

finances their purchase their consumer durable viz. Air Conditioner, freeze, TV, Washing

Machine, Private Car, Jewelry etc. The individual repay the loan in easy monthly installment.

Objective of the consumer Credit:

To extend credit facility to the limited income group.

To develop standard of living of middle and upper middle class.

To participate in the socio economic development in the country.

Credit available for:

Individual such as confirmed officers/ executives of Government/Semi Government

organizations

Autonomous bodies,

Corporations, multinational companies, local renowned companies

Banks, insurance companies

Teachers of educational institutions

Officers of armed force, member of professional bodies and

Other self employed persons.

Vehicles:

Car

Microbus Small jeeps Motorcycle etc.

Intangibles:

Medical Expenses Holydays and Marriage Education

Others:

Home repair Redecoration and Renovation Jewelry

Limit:

Through the bank gives the consumer loans, but it has got some limitations.

Procedure for availing the credit facility :

Minimum loan amount :Tk.25,000/- and Minimum loan amount :Tk.5, 00,000/- (for Personal Loan - unsecured).Minimum loan amount :Tk.20, 00,000/- (for Auto Loan - unsecured).Minimum loan amount Tk.35, 00,000/- (for Home Loan - unsecured).

Debt equity ratio:

Equity in the form of margin shall be at least 15% of the value of the item (except for vehicle).

For vehicle, it will be at least 30%. The client/borrowers before disbursement of the loan will

deposit the amount if equity.

Repayment Arrangement:

Equal monthly Installments for both principal and interest, covering the period of the

loan.

Installments to be paid within the 30th of each month.

Securities and Documentation:

Personal guarantee (for all product specification).

Cash collateral (for secured overdraft / loans).

Charge documents. Cycle registration shall be in the joint names of the bank and the

borrower.

Authority for approval:

Branch Managers jointly with Sub-Manager / Relationship Official

For exceptional cases - the Senior Executive Vice President (Corporate Banking) and the Senior

Executive Vice President (Credit) or Managing Director.

Monitoring:

The members of the Consumer Banking Department review the position of all the Branches and

monitor each and every account. Letters, reminders or even phone calls are made to any

Branch which fails to realize the installments timely. The Branches are given time limit to

reduce the overdue liabilities or face the consequence of having to lose their discretionary

power of disbursing further Consumer Loans.

UNSECURED LOANS

Personal Loan

As part of establishing a Retail Banking franchise of Dhaka Bank Limited, the bank has successfully launched Personal Loan. The product is a term financing facility to individuals to aid them in their purchases of consumer durables or services. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equated monthly installment) across the facility period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 48 months.

The target market for personal loan will mainly comprise of following category –

Salaried employees

Of institutions in the Dhaka, Chittagong and Sylhet markets.

Professionals

who are self employed and have at-least 3 years of independent practice in the area of

profession.

Businessmen

who are permanent residents of Dhaka, Chittagong and Sylhet metropolis with at least 3 years

of continued operation in the line of business?

Restrictions and client eligibility

Loans are restricted to Bangladeshi nationals falling in the categories mentioned below The minimum age for any borrower will be 25 years and the maximum age 52 years with a minimum verified Gross Family Monthly Income of BDT 10,000.

Salaried employees Permanent salaried employees with at-least 12 months of

confirmed service with the present employer.

Work station in Dhaka, Chittagong, Sylhet and where Dhaka

Bank operates

University graduates

Professionals Doctors, Dentists, Engineers, Chartered Accountants,

Architects who are members of their professional

institutes.

Practice and location in Dhaka, Chittagong, Sylhet and

where Dhaka Bank operates.

At-least 3 years of continued practice in the respective

profession in Dhaka or Chittagong.

Businessmen Continued operation of the enterprise of at-least years in the

present line of business.

Membership of the trade association.

A resident of Dhaka, Chittagong, Sylhet and where Dhaka

Bank operates for at least 5 continuous years.

Car Loan

Car Loan is a term financing facility to individuals to aid them in their pursuit of has a car of their dream. The facility becomes affordable to the clients as the repayment is done through fixed installment s commonly known as EMI (equal monthly installment) across the facility

period. Depending on the size and purpose of the loan, the number of installments varies from 12 to 60 months. In case of brand new cars the loan tenure will be maximum 72 months.

Targeted market

The target market for personal loan will mainly comprise of following category

a. Salaried employees of institutions in cities where Dhaka Bank Operates. b. Professionals who are self employed and have at-least 3 years of independent practice

in the area of profession. c. Businessmen who are permanent residents of Dhaka, Chittagong, Sylhet metropolis and

where Dhaka Bank Operates with at least 3 years of continued operation in the line of business.

Restrictions and client eligibility

1. Loans are restricted to Bangladeshi nationals falling in the categories mentioned below. The minimum age for any borrower is 25 years and the maximum age is 52 years with a minimum verified Gross Family Monthly Income of BDT 45,000.

Salaried employees Permanent salaried employees with at-least 12 months of confirmed service with the present employer.Work station in Dhaka, Chittagong, Sylhet and where Dhaka Bank operatesUniversity graduates

Professionals Doctors, Dentists, Engineers, Chartered Accountants, Architects who are members of their professional institutes.Practice and location in Dhaka, Chittagong, Sylhet and where Dhaka Bank operates.At-least 3 years of continued practice in the respective profession in Dhaka or Chittagong.

Businessmen Continued operation of the enterprise of at-least 3 years in the present line of business.Membership of the trade association.A resident of Dhaka, Chittagong, Sylhet and where Dhaka Bank operates for at least 5 continuous years.

Asset Operation Department

1. Pre-Disbursement Activities

Tasks Carried Out by the Risk Assessment Before Approval:

o Applications and other formants are checked to ensure that they are properly filled in, sealed and signed.

o Applications are also checked to ensure that the applicants fulfill all criteria in line with the EC approved policy.

o Applicants are checked with ‘Defaulting Borrowers Database’ of Personal Banking Division to ensure that they are not defaulters with DBL.

o Applicants are also checked with ‘Defaulting Borrowers Database’ of other banks to ensure that they are not defaulters with others.

o Perfect applications are forwarded to third party agent for neutral and quick verification.

o All information in the verification report is checked with application to ensure maximum accuracy.

o Supporting documents (viz. document of identification, salary certificate, trade license, partnership deed, COI, MOA, utility bill, lease deed agreement etc. ) are checked to ensure that they are provided in line requirements for the EC approved policy.

o Information in supporting documents is also checked to ensure that they are exactly in accordance with the application.

o Bank Statements are verified with concerned banks to ensure that nobody approaches for PB facility with forged financial document.

o Bank Statements are verified with concerned banks to ensure that the accounts have very little or no history of check returns.

o Bank Statements are used to identify different loan installments with other banks. This is done with a view to determine the nearest possible financial obligation of the applicants per months.

o Bank statements are also used to calculate the applicants average monthly turnover/deposits. This is done with a view to make rough estimation about monthly gross income of the applicants.

Affidavit

For any mismatch of client names in documents (Halafnama of TK 50 Stamp paper)

Rental deed

Client’s Name and business address

Rental deed validity minimum 6 months after disbursement

Signature of Tenant, Owner (in all pages) and witnesses.

Trade License

Client’s Name and business name

Business address and type of business

Related regulatory authority license

Validity of the license minimum 6 months after disbursement.

Registered Mortgage

In case of the loan files where registered mortgage is a requirement, AOD checks the following

land documentation:

o Original Title deed for the entire mortgaged property.

o Bia Deeds/ Duplicate of Bia Deeds to support the Title Deed.

o Mutation of the Mortgaged Property by the concerned AC Land

o Original Khatians

I. Revisional Survey (R.S) - most important one

II. Bangladesh Survey (B.S) –if done and issued

III. State Acquisition (S.A) & Catetal Survey (C.S) – If there

oUp to Date Duplicate Carbon Receipt for the property after mutation.

oNon Encumbrance Certificate issued by the Sub-Registrar’s Office for the past 12 years.

oUp to date Rental Receipt for the property.

oMortgage deed between AB Bank Limited and the enterprise.

oNotarized Memorandum of Deposit of Title Deeds.

o Legal Opinion

oPower of Attorney in Favour of AB Bank Ltd

o If the business is situated in land owned by Parents/ Siblings/ Spouse –

I. Mortgage given by third party (For Registered Mortgage)

II. MDTD sign by all land owner (For Equitable Mortgage)

III. PG or NOC (Non objection certificate by third party)

IV. Ward commissioner’s (warission) certificate in case of clients parent’s

death

If any documentation deficiency is found, the concerned CRO, ZO is informed for resolving the

deficiency. After checking the required fees submission for Loan Documentation, the application

is sent for Insurance Premium Checking.

Insurance Premium Checking

Risk issues while checking Loan Documentation:

No Fluid or overwriting should be there

Missing of seal and sign (Check all Pages)

Missing of Signature verification by CRO

Lack of witness CRO and Guarantor

Missing of any clause of charge documents

Missing Guarantors sign in Guarantee page

Mismatch in Client’s Name, Business Name, Addresses and business type

Incomplete documentation for registered mortgaged property

Validity of licenses and deeds

Bank’s name, client’s name, seal, signature and number of undated cheques

Besides, some particular licenses are required for categorized enterprises, like:

Drug license (Medicine Business)

BSTI (Food Business)

Diesel / LP gas / Petrol (Fire license from Directorate of explosives)

Saw Mill (Permission from District Forest Department)

Pesticide (Permission from Agricultural Extension Department)

1.3 Loan Sanction

Client’s information & Loan details is matched with the Credit approval then loan is sanctioned

& a Loan Sanction Number is auto generated

1.4 CIB Obtaining Process

Credit Information Bureau (CIB) of Bangladesh bank has a central database for all the lenders of

Bangladesh. It contains the total credit history of a client and act as the most dependable source

to analyze the credit worthiness of a prospective client. Obtaining the CIB clearance is a

precondition of fund disbursement and all type of Retail, SME and corporate loan require CIB

report before disbursement. For some retail unsecured assets, BBL obtains post-facto CIB

clearance. However, in most cases AOD obtains the CIB for a client before disbursement of fund.

To obtain a CIB report, AOD fills up the following Bangladesh bank prescribed forms for each

loan application:

I. Inquiry Form: CIB – 1A: For each individual/ institution

II. Inquiry Form: CIB – 2A: Owner information if borrower is institution

III. Inquiry Form: CIB – 3A: Group/ related business information of borrower

IV. CIB Undertaking form “KA”: For each individual/proprietor/director/partner

These forms are filled up by the business units and sent to the CIB segment of AOD. CIB

segment maintains a central database for all the CIB inquiry forms. Each form is registered

under a Head Office serial number and a Branch/ Unit office serial number. Therefore AOD

prepares a forwarding letter with reference to 20 such inquiry forms, and sent them to Credit

Information Bureau of BB once in a day.

Usually the CIB reports are received within 7-10 working days.

After receiving the reports from BB, AOD prepares a summary of the report and put that as

reference in the loan file along with the photocopy of the CIB inquiry forms, undertaking and

copy of the original CIB report.

For any mistakes made in the forms, writing wrong spelling, incomplete name of individuals or

institutions, CIB report may show error as mismatch exists there. Those CIB inquiry forms

require to be sent again correcting the facts. CIB reports are usually updated quarterly and half-

yearly. Therefore most updated CIB reports are required to be obtained and CIB report is also

require for the same client for repeat loan.

All forms need to be supported by the Applicant’s Undertaking and all the forms are signed by

designated officers of the business division; e.g.

Documentation Check List

Branch/Unit Office Other Bank’s Lien Confirmation (For

Secured Loans/ Secure OD)

Lien Confirmation on Down Payment (For

Auto Loan/ Now Loan/ Secured Loan)

Preparation of purchase order (For Auto Loan/

Now Loan)

Entry in FINACLE

Documentation checking before sanction and

Activation

Lien Confirmation

Charge collection voucher

Sanction and Repayment schedule setup

Loan Activation

Disbursement Voucher

Voucher Posting

Transaction Report: Voucher Printing

PO Voucher (for Auto Loan/ Now Loan and Corporate)

Relationship manager for Corporate Application

Sales Manager for Retail Application

CIB is a regulatory requirement for Loan Documentation.

2. Disbursement Activities

2.1. Process Flow for Loan Disbursement

2.2. Loan Disbursement

After the loan documents are checked by AOD, complete and OK files are sent for disbursement.

All the files in AOD have a checklist attached and the officers who check the documents initial

the files and approve them for disbursement clearance. Disbursement process for retail, SME

and corporate are different as discussed below:

Client ID is created in the AOD and details customer information are filled in client information

module. Repeat applicants have the same client ID but a new Loan Account number. After the

client ID creation, a list of clients is created where the following information are entered:

Client ID

Name of the business

Bank information (Rupali, Agrani, Janata, Pubali, City, BKB, and BBL)

Accounts information (Branch, A/C No.)

Approved Loan amount

Unit Office & CRO information

Disbursement date (As per the Loan application)

The senior officers check this file and after loan account activation, disbursement is made to

clients’ link account, which is mentioned in loan application. Disbursement process flow is:

Loan Account Opening and Activation

Using the “Loan Advance Module” of MYSIS, AOD opens a new “Loan Account” for a specific

SME loan application and link the “Customer ID No.” and “Link Account information (Which is in

JB, AB, RB, PBL, BKB, CBL and BBL)”. All SME unit offices have a “mother account” in any of the 6

banks mentioned above. A client has to open the “Link Account” in that branch of the Bank.

Before fund Disbursement AOD checks whether the voucher for fee received from the

respective unit office and payment voucher from client’s link account for loan processing fee,

documentation fee along with VAT and data verification charges against the loan are received

with the loan application. The loan applicants also pay Insurance Premium along with other

fees. After opening the loan account, the officer authorized to sanction a loan “Sanctions” the

approved amount and a “Repayment Schedule” is prepared. After the Sanctioning, the Loan is

then “Activated” by the authorized officer. After the activation of the loan account, details of

the securities provided for this facility, are entered in MYSIS. When the loan account is

activated a disbursement instruction is sent to the central “NOSTRO Account” of the respective

Bank (Any of the 6 banks). After the disbursement, AOD fill up the security and guarantors’

information in MYSIS.

OpenedLoan A/C

BBL Central Nostro A/C in that Bank

BBL mother A/C for that Unit Office

Client’s Link A/C

3. Post-Disbursement Activities

3.1. Repayment Schedule Sent to Business Unit

3.2. Loan details MIS entry

3.3. Loan files sent to Central Archive

4. Recovery Activities

4.1. Internal Process for Loan Repayment

Manual activities

I. Receive & print SMS/ Fax for installment deposits (SME)

II. Check SMS data in MYSIS & resolve problems

III. Post recovery checking with unit office/ branch statement

IV. Repayment schedule checking

V. Inter branch Account- Other Bank’s Cheque clearing (for corporate)

SWOT Analysis of Dhaka Bank Limited:

SWOT is an acronym for the internal strength and weakness of a firm and the environmental

Opportunity and Threat facing that firm. So if we consider Dhaka Bank as a business firm and

analyze its strength, weakness, opportunity and threat the scenario will be as follows:

Strength

Well Management Team.

Energetic as well as smart team work.

Both formal and informal communication network within the organization.

Usage of e-commerce relevant banking software such as Oracle.

Established customer relationship management.

Membership with SWIFT (Society for Worldwide Inter-bank Financial

Telecommunication).

Strong financial position.

Online banking service.

Excellent monitoring and supervision.

Weakness

Lack of proper motivation, training and job rotation.

Lack of experienced employees in junior level management.

Lack of ATM services.

Tendency to leave the bank in quest of flexible environment.

Complexity in informal network.

Opportunity

Expanded market.

Growth of sales volume.

Change in political environment.

Launching own ATM card services.

Threats

Different service of FCB’s (Phone Banking/ Home Banking).

Daily basis interest on deposit offered by HSBC

Entrance of new PCB’s

Retail Banking: Overall Service Procedure

Of all the functions of a modern bank lending is the most important. About 80% of the revenue of the commercial banks comes form interest and discount, that is to say, income derived from loans and advances including bills discount and bills purchase. Loans and advances comprises a large portion of bank’s total assets and form the backbone of the bank’s structure. The strength of a bank is thus primarily judged by the soundness of its loans and advances. A wise and prudent policy in regard to loans and advances is considered an important factor inspiring considered in the depositors and prospective customer of a bank.

Loan advances not only play an important part in gross earnings of banks, but also promote the economic development of the country.

OVERALL CREDIT POLICY OF DHAKA BANK LIMITED:

Lending being the most important function of commercial bank, every bank should have own credit policy. Credit policy generally aims at (a) creating healthy loan assets to ensure goods interest earning for the bank

(b) ensuring ultimate safety through judicious selection of based on its salability.

The credit policy of Dhaka Bank Limited has been formulated of the plan of “ALL NEWS LOANS TO BE GOODS LOANS” The plan was formed on the basis of the following objectives:

To maximize the profit of the bank by making sound lending; To deliver credit to viable borrowing at a reasonable cost; To provide satisfactory return on investment; To assist the social and economic development of the country; To deliver general banking services to the public and credit to viable borrowers at a

reasonable cost.

PROCEDURES OF SANCTIONING CREDIT:

Loan Application: Branch will obtain loan Application from the customer on bank’s prescribed form. The form must be signed by proprietor/partners/directors (as in the case may be) signature of the application to be verified in conformity with account opening form.It is to be ensured that the columns of the application form are properly filled in, particulars and information furnished are completed and correct. All required documents /papers mentioned in the application form are submitted.Branch will outright reject the proposals which are restricted by Bangladesh Bank and in conflict with Head Office guidelines. Branch in-charge /credit in-charge will have will have to visit the business site of the customer. Verify the particulars furnished in the application and ascertain customers honestly, integrity and business dealing, through other sources also. They will also see the turnover/transactions of the account.

Branch will obtain credit report of borrower and its sister concerns from the credit information Bureau of Bangladesh Bank. They may also obtain credit report from local banks and financial and credit institutions.

Branch will have to prepare appraisal report for all credit proposals. In appraising advance proposal, Branch Manager must follow the general principles of good lending i.e. a) Safetyb) Liquidityc) Purposed) Profitabilitye) Security

f) National Interest

After obtaining clean credit report and satisfied regarding land, building, and other assets/properties to be mortgaged or hypothecated and prima-facie genuineness and correctness by scrutinizing the documents, title deeds and other relevant papers and if the sanctioning of loan is within the discretionary power of the branch, they will issue the sanction letter in duplicate incorporating all terms and conditions to the customer with an endorsement of a copy of letter to Head Office. If the limit is beyond the Manager’s power they will forward the proposal to Head Office giving specific comments and recommendation for approval. Lending risk is to be analyzed as per prescribed format supplied by Bangladesh Bank. LRA is to be forwarded along with the proposal. On receipt of Head Office approval, Branch will issue sanction advice in duplicate to the customer and obtain one copy format eh customer duly accepted. This copy should be preserved with security documents.

If the customer accepted the terms and conditions, documentation formalities are to be completed before disbursement. Findings:

Retail Banking: Perspective of Dhaka Bank

The Changing Face of Retail Banking

Changing Consumers Demographics:

Increasingly affluent, with bulging middle class

The youngest population in the world

Increasing literacy levels

Higher adaptability to technology

Urbanization is a continuing trend

Increasing "consumption" mindset in Bangladesh

Retail credit growth driven by…

Changing demographic profile: Upper income segments in top 7 cities grew at CAGR of over 25% 60% of the population estimated to be under 35 years

Low penetration: Retail credit at 7-8% of GDP Rapid growth in target segments & under penetration of finance 35%y-o-y growth in home sales; penetration of finance at about 65%

Increasing availability: Entry of banks has led to increased competition and coverage Increasing use of technology has further enhanced reach and accessibility

Competitive differentiators

The potential is hue But, they need to create a sustainable profitable core proposition

Competitive differentiators to create a sustainable and profitable core proposition:

Operating costs Credit quality Customer service

Building the differentiators

1. Decentralization: Sales Service

2. Centralization: Transaction Processing

Reduction in operating costs, using o Economies of scaleo Scalable technology

Credit policy and monitoringSkill based competenciesCentralized credit policiesSeparation of credit from salesFraud, valuation of property, legal documentation etc separate

Best practices of benchmark industry – Retailers

Managing footfalls to maximize returns per square foot

One-stop shopping zone to manage customer needs and effective cross sell

Shelf space and layout management

‘Multi product packaging’- special offers to recognize customers who are giving more business

Best practices of benchmark industry – Food Retailing

Work practices transplanted throughout a huge network of global outlets and franchises

Each food item at each outlet tastes the same

Customer feels confident walking into any outlet - knows what to expect

Best practices of benchmark industry – Airlines and Hospitality

● Uniformly courteous and helpful response from the front line staff

● Ability to identify special customer segments and handle them separately

● Using regular customer feedback programs for identification of action areas

Loan Approved, Rejected and Declined Chart based on four years:

Problems of Retail Banking in Dhaka Bank

Lack of employees: this is a major problem that is there is a big shortage of employee in

retail banking division in Dhaka Bank Ltd. For this reason the total operation cannot be

operated timely and frequently.

Proper training are not imported to the sales team elaborately.. For that employees do

many mistakes when they submitted the proposals of Loan.

Network of corresponded bank’s are very poor. There have some limitations in the

whole networking system of the retail Banking.

Shortage of skilled manpower in retail banking division. So during the working hour the employee cannot provide proper attention to the customer that enhances customer dissatisfaction.

It is a leading bank of Bangladesh but it has no attractive appearance in office environment.

Absence of attractive remuneration package and motivation for the employees.

Recommendations

From the above discussions Consumers value the quality of the services of the banks to

take up services. And the service businesses like these are very much sensitive that a

single customer needs to know full and true information before taking the service

facility. Like other products a single customer can not change his or her decision

frequently. On the other hand if customers get better service form the particular

service organization then they will use to it and will do word of mouth advertise on

behalf of the organization. So, banks need to improve their performance, make the

service easier for the customers, provide information of their own that separate them

form others and make sure they are competitive enough with the other companies in

the industry.

In order to get competitive advantage & to deliver quality service, top management should try

to modify the services. For the improvement of the service the following measures should be

taken:

Customer’s Convenience: For customer’s convenience, DBL should provide more

personnel to deliver faster services to their honorable customer.

Human Development: Development of human resources should be ensured to increase

efficiency in work.

Communication System: Ensure proper communication system and maintenance of files

& machineries should modernize.

Interest: More interest should be paid on deposit account so that customers are

convinced to deposit their money in bank.

Strategy: Effective strategies must be undertaken against defaulter.

Managerial Functions: DBL must have to follow the management functions (from

planning to control) strictly in all of their business activities and also operation the bank.

Financial Analysis: Branch should have a separate section to analyze the financial

statement for fining its liquidity, profitability & ownership ratios.

Strict Rules for arrival and departure for the employee: Management should strict

about the arrival and departure time for the employees.

Job Rotation: In DBL job rotation is fully absent job rotation is very important to make

the entire employee efficient for all departments.

To attract more clients Dhaka bank ltd has to create a new marketing strategy which

will increase the total export-import business

Some other important factor that should be focused on the development process:

Time consumed at service level should be minimized at optimum level.

Evaluate customer’s needs from their perspective and explain logically the

shortcomings.

Improve office atmosphere to give customers better feeling.

Use of effective MIS.

To deliver quality service top management should try to mitigate the gap between

customer’s expectation & employee’s perception.

A dynamic debt recovery cell should be formed by the authority.

All the branches of the city should provided a particular target per month.

Sales officers should be provide well training about DBL Credit Marketing.

Sales team should have a specific target of per month.

Conclusion

In future, banks need to equip themselves with internal capabilities and build efficient and

viable business models to create the advantage of new opportunities available into a long term

sustainable competitive advantage. Banks today cannot restrict their learnings to the best

practices followed in the industry but they need to look at other benchmark industries to derive

learning on various important business parameters

There is a quantity of nationalized banks operating their activities in Bangladesh. The DBL is the

largest of them. For the future planning and the successful operation in achieving in its’ DBL

goal in this current aggressive environment this report can be a guideline.

From the sensible point of view I can declare boldly that I really have enjoyed my internship at

DBL from the first day. Moreover, this internship program which is mandatory for my MBA

program, although short-time clearly has helped my further thinking about my career.

Bank always contribute towards the economic development of a country. DBL, compared with

other banks are contributing more by investing most of their funds in successful projects

leading to increase in production. It is clear that right thinking of this bank including establishing

a successful network over the country and increasing resources will be able to play a

considerable role in the portfolio of development financing in the developing country like ours.

DBL continues to participate its’ leading role in socio-economic development of the country as a

companion of Independent Bangladesh. Besides its’ established function such as deposit

mobilization, deployment of fund in trade, commerce, industry, agriculture, import & export

business, outward and inward discharge as an agent of Bangladesh Bank of DBL has emerged as

the establish of performance key role in the country.

Changing retail banking scenario: (1) Significant change in demographic profile, (2) Huge market

potential, (3) Increasingly challenging business environment, (4) Competitive tools are different

– need to redefine delivery models and business processes.

In future, banks need to equip themselves with internal capabilities and build efficient and viable

business models to create the advantage of new opportunities available into a long term

sustainable competitive advantage.

BIBLIOGRAPHY:

Primary Data

I) Official records of Dhaka Bank Ltd.

II) Face to face Conversation.

III) Data collection by own supervision

Secondary Data

i) Annual report of Dhaka Bank Ltd.

ii) Working Papers.

iii) Office Files.

iv) Selected Books.

v) Printed Forms.

vi) Published & Unpublished Documents.

vii) Website.