General Banking Activities of EXIM Bank of Bangladesh Ltd.
1.0 Introduction
“A Customer is the most important visitor on our premises. He is not dependent on us, we are dependent on him. He is not an interruption on our work, he is purpose of it. He is not an outsider of our business; he is a part of it. We are not doing him a favor by serving him; he is doing us a favor by giving us an opportunity to do so”.
———– Mahatma Gandhi
The banking sector of Bangladesh played an important role towards economic growth. From the beginning of financial year 2003, Bangladesh Bank took initiatives in reforming financial sector. The importance of commercial banks in the country is inevitable. It is considered as the fuel harbor of the economy. Primarily, commercial banks are the one of the major sources of funds in the economy of Bangladesh. By borrowing money from the depositors and lending the same to the businessmen and others as loans and advances, they perform an important function. People and Govt. itself are very much dependent on the effective and efficient services provided by the banks in the financial markets of the country. Commercial banks act as financial intermediaries by performing the functions of mobilizing the funds and utilizing them in the proper way.
EXIM Bank Limited is a service and profit oriented organization. It gains profit through successful efficient management, which is achieved through its human resources. Getting and keeping good people is critical to the success of every organization, whether profit or non-profit, public or private. Those organizations that are able to acquire, develop, simulate, and keep outstanding workers will be both effective and efficient.
The report will give an overall idea about the General Banking of EXIM Bank Limited.
1.1 Objectives of the Report:
There had been some objectives set forward in doing this report so that it can be determined what task I have to perform in the bank. The objective of the report can be divided into two parts-
Broad Objective:
· An overall idea about the General Banking of EXIM Bank Limited.
Specific Objective:
· To bridge the gap between banking theory and current practice.
· To evaluate how information technology in modern business help bankers to manage their activities.
- To grasp the day-to-day activities of the employees who ceaselessly work for General Banking facilities.
1.2 Methodology of the Report:
Data Collection Method:
- The process of financial data collection is not hassle-free for any outsider. As I worked there for three months, they have allowed me to collect data from MIS of Branch. Some times, they have provided data verbally and I took note of that. Data taken both from internal sources and external sources. In current scenario analysis, related data were taken from Head Office & Savar Branch of EXIM Bank. Statistical analysis of the data was done with the help of MS Excel Program.
Source:
Information provided on this report is of two types. One is primary source and another is secondary source. In fact, most of the information was collected from primary sources.
? Primary sources:
- Face-to-face conversation with the respective officers and stuffs of the branch and head office.
- Face-to-face conversation with clients visited the branch.
- Practical work experience in the different desk of the department of the branch covered.
- Relevant field study as provided by the officer concern. ;
Moreover, we have maintained a close contact with the direct sales team members of EXIM Bank Ltd. who regularly visit clients and consult with prospective customers.
Secondary Sources
1. EXIM Bank Limited Annual Reports 2002-2006.
2. Product Program Guide [PPG].
3. Credit Assessment Guideline.
4. Loan files of the client.
5. Bangladesh Bank’s Prudential Guideline on General Lending.
- Different procedure manual published by EXIM Bank Ltd
- Different circular send by head office or EXIM Bank Ltd and Bangladesh bank.
- Various book articles regarding general banking function, foreign exchange operations and credit policies.
9. Websites and so on.
Internal Sources:
? Bank’s Annual Report.
? Group Business Principal Manual.
? Group Instruction Manual & Business Instruction Manual.
? Prior research report.
? Any information regarding the Banking sector.
External Sources:
? Different books and periodicals related to the banking sector.
? Bangladesh Bank Report.
? Newspapers.
? Web Sites.
2.1 Performance of EXIM Bank
Within a short time period EXIM Bank Ltd has been successful to position itself as a progressive and dynamic financial institution in the country. The Bank widely acclaimed by the business community, from small business/entrepreneurs to large traders and industrial conglomerates, including the top rated corporate borrowers from forward-looking business outlook and innovative financing solutions. The bank achieved satisfactory progress in all areas of its operation and earned an positive operating profit almost in every year.
Growth of Bank |
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Fig. 01: Growth of EXIM Bank BD Ltd.
Branch Overview
EXIM BANK LIMITED, SAVAR BRANCH
3.1 Branch Overview
EXIM Bank Savar Branch at a Glance:
| Item | March 2008 | April 2008 | May 2008 |
| Total deposit | 445719059.17 | 429323216.30 | 430627306.19 |
| Total advance | 61931770.37 | 654992309.78 | 677649187.97 |
| Demand deposit | 235501062.88 | 216867886.53 | 223040401.14 |
| Time deposit | 37541392.41 | 378689502.35 | 373261636.71 |
| Profit | 9284701.19 | 14778976.18 | 17289936.60 |
Table 1: Three Month Activity of 2008
Figure 02: Three month’s profit of Savar Branch
Figure 03: Three month’s Total deposit & advance of EXIM bank of Savar Branch
4.0 “Company Profile”
4.1 Historical Background of EXIM Bank Ltd.:
EXIM Bank Ltd. was established under the rules and regulations of Bangladesh Bank and the Bank companies act. 1991, on the 3rd August 1999 with the leadership of later Mr. Shahjan Kabir, founder chairman. He had a long experience as a good banker. Among them Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable.
From this inception EXIM Bank Bangladesh Ltd. was known as EXIM Bank Ltd., which stands for Bangladesh Export Import Bank Limited. But some legal constraints the bank renamed as EXIM Bank Ltd. which means Export Import Bank Bangladesh Limited. The bank starts it’s functioning from the 3rd August 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in financial sector of our country. By this pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth and excellent management. The authorized capital and paid up capital of the bank are Tk. 1,000.00 million and Tk. 253.13 million respectively.
4.2 An overview of Banking Environment in Bangladesh :
Banking business has a very old history, in the days it was originated in Greece and Rome. Persons who were not habitually bankers conducted banking business in ancient society in unorganized way. They carried on banking business as subsidiary to their main business. Gradually, a separate class of people as “bankers” took up banking function. Money links the origin of banking. When money was introduced in the place of barter, people faced a new problem-“Where to save surplus money in safe position?” The money came to help trade and commerce. But borrowing and lending for trade & commerce could not be carried on banking. Hence money created a legal necessity of banks.
The Banking in Bangladeshhas passed three decades through different policy environment and comprises central bank at the apex, nationalization commercial banks, private commercial banks, foreign commercial banks and specialized financial institutions.
The country’s central bank, Bangladesh Bank, controls and monitors the banking industry. At present there are 34 (focal, foreign) commercial banks, 5 development financial institutions, 17 finance & leasing companies in Bangladesh. Government has recently issued licenses to 8 merchant banks. Primary decision has been taken to allow another couple of commercial banks soon. In the decade of 70s, in an atmosphere of fully regulated banking, the Nationalized Commercial Banks played the active role in intermediation and allocation of credit along with the specialized financial institutions.
The decade of the 80s witnessed the active operation of bath the NationalizedCommercial Banks and Private Commercial Banks (local and foreign). Before liberation of Bangladesh in 1971, the total banking system was private owned, urban based and profit oriented. But after liberation, the government of Bangladesh nationalized all the banks operating in Bangladesh in 1972, except a few foreign bank branches.
Currently the major financial institutions under the banking systems include-Bangladesh Bank. Commercial Banks, Islamic Banks (For interest free Islamic banking in adherence to the Islamic principles & practice), Leasing CompaniesFinance Companies, Merchant Banks.
Generally the commercial banks and finance companies provide a myriad of banking products /facilities and services to the needs of their customers. These include 24 hours banking, (Tele banking via modems and phones) and general banking and service products. For customers’ convenience, such products are available throughout the bank branches in our country.
However the Bangladesh banking industry is characterized by the tight banking rules andregulations set by Bangladesh Bank. All banks and financial institutions are highly governed and controlled under the banking companies act 1993, which lays out many restrictions, besides other guidelines. Among the many regulations imposed, Bangladesh Bank does not allow any FI to into bankruptcy or insolvency.
The range of banking products and financial services is also unlimited in scope. Besides all local banks are imposed 5% cash reserve requirement which is non interest bearing and 15% statutory liquidity requirement. This has given rise to higher cost of fund. With the liberalization of markets, competition on banking products and financial services seem to be more intense and competitive.
In addition as banking products, which can be offered in our country, are fairly homogeneous in nature due to the tight regulation imposed by Bangladesh Bank? Competing through differentiating the range of products offered is often difficult and not effective. Moreover any innovative banking service launched is quickly duplicated by 7 other banks such as ATMs, Tele banking, online (real time) computerization bank branches etc.
Hence the key to establish a competitive edge in banking industry of Bangladesh is to provide better customer service quality.
There are different types of generations in banking history:
a) 1st Generation Banks (Established 1982-1988)
National Bank Ltd., The City Bank Ltd., United Commercial Bank Limited, Arab Bangladesh Bank Ltd., 1FIC Bank Ltd., Islamic Bank Bangladesh Ltd., and Al Baraka Bank Ltd.
b) 2nd Generation Bank (Established 1992-1996)
EXIM Bank Limited, National Credit and Commerce Bank Limited, Prime Bank Limited, Southeast Bank Ltd, Dhaka Bank Ltd., AI Arafah Islami Bank ltd., Social Investment Bank Ltd., and Dutch-Bangla Bank Ltd.
c) 3rd Generation Bank (Establish 1996-2003)
Mercantile Bank Ltd., Standard Bank Ltd, One Bank Ltd, EXIM Bank ltd, Premier Bank Ltd, Mutual Trust Bank Ltd, First Security Bank Ltd, Bank Asia Ltd and the Trust Bank Ltd.
4.3 Historical background of EXIM Bank of Bangladesh Ltd:
Export Import Bank of Bangladesh is a public listed scheduled bank categorized in private sector and established under the ambit of Bank Companies Act, 1991 and incorporated as a Public Limited Company under the Companies Act, 1994 on June 02, 1999. The Bank started commercial banking operations effective from traditional banking operation on July 01, 2004 after obtaining approval from Bangladesh Bank. During the span of time the Bank has been widely acclaimed by the business community, from small entrepreneurs to large traders and industrial conglomerates, including the top rated corporate borrowers for forward-looking business outlook and innovative financing solutions. With a view of the company’s activities and program on the basis of Islamic Shariah, within this period of time it has been able to create an image of responsibility for itself and has earned significant reputation in the country’s banking sector. As a matter of policy, the bank conducts its business on the principles of Mudaraba, Murabaha, Bai-Muazzal & Hire Purchase transaction approved by Bangladesh Bank. The Bank is one of the interest-free Shariah-based Banks in the country and its modus operandi is substantially different from those of other commercial banks. It is a great pleasure that by the grace of Almighty Allah, Exim Bank have migrated at a time all the branches from its conventional banking operation into Shariah based Islami banking operation without any trouble. Lot of uncertainties and adversities were there into this migration process. The officers and executives of Exim Bank motivated the valued customers by counseling and persuasion in light with the spirit of Islam especially for the non-Muslim customers. Their IT division has done the excellent job of converting and fitting the conventional business processes into the processes based on Shariah. It has been made possible by following a systematic procedure of migration under the leadership of honorable Managing Director.
5.0 Scope of the Study:
This report has prepared to gain a clear view of the General Banking process. It includes all my experience in Savar Branch. I tried to show how EXIM Bank Ltd. handles all the activities necessary service to its clients. But there are some policy issues like which loan needs to be reviewed, what should be the interest rates, how many documents should be made compulsory for security reasons, who will be liable for the default loan, how responsibility will be delegated to officials and so on. These issues have not addressed in this report – as my goal was to reveal how work is done not how it should be done.
7.0 Mission of EXIM Bank Ltd.:
- To be the most caring and customer friendly and service oriented Bank.
- To create a technology based most efficient banking environment for customers.
- To ensure ethics and transparency in all levels.
- To ensure sustainable growth and establish full value of the honorable shareholders.
- To add effective contribution to the national economy.
8.0 Vision of EXIM Bank Ltd.:
The gist of EXIM Bank’s vision is “Together Towards Tomorrow”. EXIM Bank LTD, as the name implies, is not a type of Bank in some countries on the globe, but is the first of its kind Bangladesh. It believes in togetherness with its customers, in its march on the road to growth and progress with services. To achieve the desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement, because, in EXIM Bank, we believe, the lien of excellence is never ending. Bank’s strategic plans and networking will strengthen its competitive edge over others in rapidly changing competitive environments. Its personalized quality services to the customers with the trend of constant improvement will be cornerstone to achieve our operational success.
Overall Management Activities of EXIM Bank of BD Ltd.
9.0 Management:
For any financial and non-financial organization, management is the most valuable and important aspect And a well organize management provides the organization to reach its ultimate goal. Management means planning, organizing, staffing directing and controlling of all financial and non-financial resources of an organization. Different aspects of management practice in EXIM Bank are discussed below:
EXIM Bank has done its planning within the preview of the corporate plan. The overall planning approach in EXIM Bank is top-down. Each branch can plan according to the goal imposed by the corporate level. It doesn’t plan independently. EXIM Bank has a planning division. The department is mainly responsible for the overall planning.EXIM Bank is organized as per the existing business locations. It has 31 branches, each of which is a separate entity. Each unit is responsible for own performance. Within each branch it is organized functionally. The recruitment in EXIM Bank is done in two ways. One as a “Probationary Officer” for the management program and it has a probation period of one year. Another one is ‘non-management level as “Trainee Officer”. Probationary Officer is recruited in officer category and their career path is headed towards different managerial jobs.
Works of EXIM Bank are designed in such a. way that one cannot leave without clearing the tasks as he is assigned for a day. Sitting arrangement in all office is done in a way that the superior can monitor the subordinate all time. Budgeting, rewarding, punishing, etc are also practiced as control mechanism.
9.1 Human Resources Management:
Employees are the core resources of any organization. Without them, one cannot run their organization. Human resources approach is concerned with the growth and development of people toward higher level of competency, creativity and Fulfillment. It helps employees become better, more responsible persons and then it tries to create a climate in which they may contribute to the limits of their improved abilities. It assumes that expanded capabilities and opportunities for people will lead directly to improvements in operating effectiveness. Essentially, the human resources approach means that better people achieve better results.
9.2 Recruitment:
The set-vice rule of EXIM Bank states the recruitment policy of the bank. In, general the board of directors determines the recruitment policy of the bank from time to time. The minimum entry-level qualification for any official position other than supportive management is a Bachelor Degree. However, informally the management prefers a minimum Master’s Degree for the appointment of probationary officers in the Executive Officer position. The recruitment for entry-level positions begins with a formal written test, which is conducted and supervised by the Institute of Business Administration, University of Dhaka. After successful completion of the written test, a personal interview is conducted for the successful candidates by a panel of experts comprising of renowned bureaucrats and prominent bankers of the country.
9.3 Risk Management:
The risk of Export Import Bank of Bangladesh Limited is defined as the possibility of losses, financial or otherwise. The risk management of the Bank covers 5 core risk areas of banking i.e. Credit Risk Management, Foreign Exchange RiskManagement, Asset Liability Management, and Prevention of Money Laundering and through establishment of Internal Control and Compliances. The prime objective of the risk management is that the bank takes well calculative business risks while safeguarding the Bank’s capital, its financial resources and profitability from various risks. In this context, the Bank took steps to implement the guidelines of Bangladesh Bank as under.
9.4 Asset liability management:
The Asset Liability Committee (ALCO) of the Bank monitors Balance Sheet risk and liquidity risks of the Bank. The Balance Sheet risk is defined as potential change in earnings due to change in rate of interest, foreign exchange rates which are not of trading nature. Asset Liability committee (ALCO) reviews liquidity requirement of the Bank, the maturity of assets and liabilities, deposit and lending pricing strategy and the liquidity contingency plan. The primary objective of ALCO is to monitor and avert significant volatility in Net Profit Income (NPI), investment value and exchange earnings.
9.5 Foreign exchange risk management:
Foreign exchange risk is defined as the potential change in earnings arising due to change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying Foreign Exchange transactions. Treasury Department independently conducts the transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in the book of account. All foreign exchange transactions are revalued at Market-to-Market rate as determined by Bangladesh Bank at the month-end. All nostril accounts are reconciled on monthly basis and the management for their settlement reviews outstanding entries beyond 30 days.
9.6 Investment risk management:
Investment risk is one of the major risks faced by the Bank. This can be described as potential loss arising from the failure of a counter party to perform as per contractual agreement with the Bank. The failure may result from unwillingness of the counter party or decline his/her financial condition. Therefore, the Bank’s investment risk management activities have been designed to address to all these issues. A separate Investment Division has been formed at Head Office since inception of the Bank, which is assigned, with the duties of maintaining effective relationship with the customer, marketing of investment products and exploring new business opportunities. In line with Bangladesh Bank guideline the Bank has segregated marketing, approval and monitoring/recovery functions. The investment risk management includes borrower risk analysis, financial statement analysis, industrial analysis, historical performance of the customer, security of the proposed investment facility and market reputation of the borrower etc. In determining single borrower/large investment, the instructions of Bangladesh Bank’ are strictly followed. Investments are classified as per Bangladesh Bank’s guideline.
9.7 Corporate Culture:
EXIM Bank is one of the most disciplined Banks with a distinctive corporate culture. Here they believe in shared meaning, shared understanding and shared sense making. Their people can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to them. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture they belong has not been imposed; it has rather been achieved through their corporate conduct.
9.8: Corporate Management Organ gram
Chairman
Director
Managing Director
Company Secretary
Additional Managing Director
Deputy Managing Director
Executive Vice President
Senior Vice President
Vice President
Chart 2: Corporate Management Organ gram
9.9 Branch Management Organ gram
Assistant Vise President & Manager
Senior Principal Officer
Executive Officer
Officer
Management Trainee Officer
Junior Officer
Assistant Officer
Trainee Officer (Cash)
Assistant Officer (IT)
Chart 3: Branch Management Organ gram
10.0 Marketing Offers
PRODUCTS OF GENERAL BANKING DIVISION
Fig 4: Marketing Product
HAJJ DEPOSITS MONTHLY INCOME SCHEME MONTHLY SAVING SCHEME
MULTIPLUS SAVINGS SUPER SAVINGS SCHEME
10.1: Various Deposit:
Al-Wadia Current Deposit
Mudaraba Savings Deposit
Mudaraba Short Term Deposit
Mudaraba Term Deposit
- One Month
- Three Month
- Six Month
- Twelve Months
- Twenty-four Months
- Thirty-six Months
Foreign Currency Deposit
Mudaraba Savings Scheme
- Monthly Savings Scheme (Money Grower)
- Monthly Income Scheme (Steady Money)
- More than Double the deposit in 6 years (Super Savings)
- More then triple the Deposit in 10 years (Multiplus Savings)
Mudaraba Hajj Deposit
Investment Division:
- Corporate Finance
- Industrial Finance
- Project Finance
- Syndicate Investment
Mode of Investment
a) Murabaha,
b) Bai Muazzal,
c) Izara Bil Baia,
d) Wazirat Bil Wakala,
e) Quard,
f) Local Documentary Bill Purchased,
g) Foreign Documentary Bill Purchased.
11.0 Current Business Performance of EXIM Bank of Bangladesh Ltd:
Financial overview:
The performance of the bank, during the period under review, is more significant simultaneously in development and achievements of continuous growth rate in all the areas of banking operations. The Bank has successfully been marching ahead with its prime business objective by earning a pre-tax profit of Tk.1063.30 million registering an annual growth of 64.69% than that of the previous year. It has successfully mobilized Tk.28319.21 million deposits from depositors and has arranged disbursement of Tk.26046.34 million as investment to 14,532 accounts as on 31st December 2006 through its 28 Branches.
Capital and Reserve Fund
The Bank started its voyage with an authorized Capital of Tk. 1,000 million while it’s initial Paid up Capital was Tk.225.00 million subscribed by the sponsors in the year 1999, The Capital and Reserve of the Bank as on 31st December 2006stood at Tk.2179.81 million including paid up capital of Tk.878.85 million. The Bank also made provision on unclassified investment, which is amounted to Tk.263.18 Million.
Deposit
Deposit is one of the principal sources of fund for investment of commercial banks and investment of deposit is the main stream of revenue in banking business. The total deposit of the Bank stood at Tk. 35032.02 million as on December 2006 against Tk. 28319.21 million of the previous year which is an increase of 23.70%. This growth rate may be termed as a remarkable achievement for the Bank. The present strategy is to increase the deposit base through maintaining competitive rates of Profit and having low cost of funds.
Investment
Total amount of Investment of the Bank stood at Tk.32641.27 million as on December 31, 2006 as against Tk. 26046.34 million as on December 31, 2006 showing an increase of Tk.6594.93 million with growth rate of 25.32%. Investment is the core asset of a Bank. The Bank gives emphasis to acquire quality assets and does appropriate lending risk analysis while approving commercial and trade investment to clients.
Investment (Share & Bonds)
The size of the investment portfolio in 2006 is Tk. 2233.25 million while it was Tk.1633.03 in 2006. The portfolio comprises Islamic Investment Bond, Shares and Prize Bonds.
The Balance Sheet of EXIM Bank Ltd is as follows:
Balance Sheet
31st December 2007
Table 2 :BS Amount in Tk.
| Property & Asset | 2007 | 2006 |
| Cash: | ||
| In Hand (including foreign currencies)
With Bangladesh Bank and Sonali Bank (Including foreign currencies) |
417038832
4198001365 4615040197 |
236122796
3082999752 3319122548 |
| Balance with other banks and Financial institutions In Bangladesh
Outside Bangladesh |
377934754
915100915 1293035669 |
945738588
473605876 1419344464 |
| Money at call and short notice: | ||
| Investments (shares and bonds)
Government securities Others |
2250000000
207716314 2457716314 |
2000081900
233172388 2233254288 |
| Investments
General Investments |
38214429999
1980809223 |
30567133959
2074136357 |
| Fixed assets | 200702928 | 178431761 |
| Other assets | 2741293655 | 2002117585 |
| Total assets | 51503027985 | 41493540962 |
BALANCE SHEET
| Liabilities: | 2007 | 2006 |
| Borrowing from other banks, financial institutions and agents | Amount in Tk. | |
| Deposit & other A/C
Current Deposits and other accounts: Al wadeah Current deposits and other accounts Bills payable Mudaraba savings Bank deposits Mudaraba term deposits Call deposits Foreign currency deposits |
41546568592
4778629437 743645368 2209666103 33682916577 ————– 131711107 41546568592 |
35032024625
3463314632 316705918 1684526998 29479565759 ————- 87911318 35032024625 |
| Other liabilities
Total liabilities |
5413930707
10093393939 |
3649831258
8658363853 |
| Capital/Shareholder’s equity | Amount in Tk. | |
| Paid up Capital
Proposed cash dividend Proposed issue of bonus shares Share premium Dividend equalization account Statutory reserve Retained earnings |
2142196800
————– ————– 94162500 62775000 608754548 1134639838 |
1713757500
342751500 85687875 94162500 62775000 810880421 1670283 |
| Total shareholders equity
Total liabilities and shareholders equity |
3111685079
41793540962 |
|
| Off balance sheet items
Contingent liabilities Acceptance and endorsements Letters of guarantee Irrevocable letters of credit Bills for collection Other contingent liabilities |
1866915726
9260231000 1412114208 10093393939 |
1574148312
7452716000 1308859198 8658363853 |
| Total contingent liabilities
Other commitments |
22632654873
—————– |
18994087363
————— |
| Total off balance sheet items | 22632654873 | 18994087363 |
PROFIT AND LOSS ACCOUNT
Table 3: IS 31ST December 2007 (Amount in Tk)
| Particulars | 2007 | 2006 |
| Invest income
Profit paid on deposits, borrowings, etc. Net investment income |
4943468082
(3587536228) 1355931854 |
3808085566
(2953607619) 854477947 |
| Income from investment in shares/securities
Commission, exchange brokerage Gain on sale of investment in shares Other operating income Total operating income |
124378550
1042456394 81216333 216439446 2820422577 |
120461375
882976105 998967 155041956 2013956350 |
| Salaries and allowances
Rent, taxes, insurance, lighting, etc. Legal expenses Postage, stamp, telegram and telephone Audit fees Stationery, printing, advertisement etc. Managing Director’s remuneration Managing Director’s fees Director’s fees Depreciation on and repairs to Bank’s property Other expenses Total operating expenses |
515785817
83969332 1819276 42088151 235125 32647994 4887000 144000 2177217 57349344 171115272 912218528 |
330992966
72158724 3090674 39201661 382875 28883882 3919032 196500 1578096 44748138 110130729 635283277 |
| Profit before provision
Provision for investment Provision for diminution in value of shares Profit before tax |
1908204049
176243963 113163000 1618797086 |
1378673073
179182138 ————- 1199490935 |
| Provision for tax
Deferred tax Profit after tax |
687953479
———— 930843607 |
539032593
10166000 650292342 |
| Retained earnings brought forward
Transfer from provision for investment (share) Adjustment for (under)/over provision for tax made in earlier years Profit available for appropriation |
1670358
———— ———— 932513965 |
42989805
4963123 (27244800) 671000470 |
| Appropriations:
Statutory reserve Issue of bonus shares |
323759417
—————- |
240890812
428439300 |
| Earnings per ordinary share | 43.45 | 43.48 |
HIGHLIGHTS OF THE OVERALL ACTIVITIES
| Sl No.. | Particulars | 2007 | 2006 |
| 1. | Paid up capital | 2142196800 | 1713757500 |
| 2. | Total capital | 4569562645 | 3467368068 |
| 3. | Surplus/Shortage of capital | 498916145 | 551245578 |
| 4. | Total assets | 51503027985 | 41793540962 |
| 5. | Total deposits | 41546568592 | 35032024625 |
| 6. | Total investment | 40195239222 | 32641270316 |
| 7. | Total contingent liabilities and commitments | 22632654873 | 18994087363 |
| 8. | Ratio on investments and deposits | 96.75% | 93.18% |
| 9. | Ratio on classified investments & total investments | 1.58% | 1.80% |
| 10. | Profit after tax and provisions | 930843607 | 650292342 |
| 11. | Classified investments for the year | 635106791 | 588173168 |
| 12. | Provision held against classified investments | 270763271 | 90887038 |
| 13. | Surplus/(Shortage) of provision | — | 6950000 |
| 14. | Cost of fund | 9.07% | 9.17% |
| 15. | Profit earning assets | 42357645536 | 35161475381 |
| 16. | Non-profit bearing assets | 9145382449 | 6632065581 |
| 17. | Return on investment (shares & bonds) | 8.77% | 6.55% |
| 18. | Return on assets (after tax) | 2.00% | 1.73% |
| 19. | Income on investment (shares & bonds) | 205594883 | 121460342 |
| 20. | Earnings per share | 43.45 | 43.48 |
| 21. | Net income per share | 43.45 | 37.95 |
| 22. | Price earning ratio (times) | 9.02 | 7.74 |
Table 4: Overall Activity
Learning Part
12.0 Observation
EXIM Bank, Elephant conducts all types of commercial banking operations. The core business of the bank comprises of trade finance, term finance, working capital finance and corporate finance. The bank is also providing personal credit; services related to local and foreign remittances and several products related services. The scheme of the Bank, which is designed to help the fixed income group in raising standard of living is competitively priced and has been widely appreciated by the customers.
The Bank has achieved success in all sectors and the achievement has been possible because of the able leadership, dedicated and committed services provided by all levels of management and staff and all the trust and confidence that the valued client had reposed in the Bank. EXIM Bank Ltd. is a third-generation private commercial Bank in the country with commendable operating performance. Directed by the mission to provide prompt and efficient services to clients, EXIM Bank has successfully celebrated its wide range of commercial banking services. The Bank has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience, commendable knowledge and expertise in convention with modern banking.
12.1 General Banking Division
The division of general banking plays an important role in all commercial banks. It’s mainly a liability side. EXIM bank facilitates sections and facilities of general banking. General Banking Division can be functioned in the following way:
|
Chart 4: General Banking Division
12.2 Account Opening Section:
One who want to open an account, he has to fill up an account opening form. This form is a legal contract between the bank and prospective customers. The rules and regulations for opening of an account vary from customer to customer, if he wants to open different types of accounts. First of all various types of customers such as individual, joint, proprietorship, partnership, private limited company, public limited company, associations, clubs, societies, trusts etc. can open their various types of accounts as their requirements which are mentioned below:
1. Individual Account:
• If individual wants to open an account than introducers must be needed to open current and savings account that has current or savings account in the bank.
• The introducer must be signed in the two passport size photographs.
• Individual must be submitted his/her certificate of Word Commissioner or the photocopy of the passport (valid)
2. Joint Account:
This account can be opened by 2 persons or more than 2 persons and each person should fulfill the requirements of individual account. The account holders should mention the mode of operation.
3. Proprietorship Account:
- The requirements of individual account should be Proprietor
- Must be submitted a copy of trade license.
- The form of sole proprietorship declaration of EXIM Bank must be tilled up.
4. Partnership Account:
- Partnership account is as like as joint account.
- Must be submitted a copy of partnership deed
- The partners also fill up the partnership letter of EXIM
Bank with their name and signature.
- Must be submitted a trade license.
5. Public/Private Limited Company:
- A form of Specimen of Resolution to be passed by a limited Company for
Opening an account with the bank should be filled up.
- Memorandum and Articles of Association
- Certificate of commencement of Business (in case of Public Limited
Company).
- Certificate of incorporation.
6. Various Types of deposit account:
EXIM Bank offers following types of deposit account:
1. Current Account
2. Fixed Deposit Receipt Account
3. Savings Account
4. Short term Deposit Account
General procedure of openings account:
Step 1: Bank provides account opening form to the prospective customer or applicant,
Step 2: Applicant fills up the form,
Step 3: Application submits the form dully signed by an introducer and along with,
Step 4: The authorized officer scrutinizes the application form and
Step 5: If they are satisfied, they will open the account,
Step 6: They issue deposit slip and deposit must be made it,
Step 7: After deposition one checkbook is issued,
Step 8: Bank preserves the specimen signature card to verify the signature of the client,
Step 9: Account is opened.
1. Current Account:
Current account facilitates the account holder to draw money at any times but no interest is given to the current account deposited money. Current accounts can be opened by any individual or joint or any name of proprietorship business, private limited company or public limited company, association, clubs, societies, trusts etc. Generally, current account is opened for businessman and traders for easy transaction. By taking this liability, EXIM Bank takes service charge 100/- for six months.
2. Fixed Deposit Receipt Account (FDR}:
It’s a certain period deposited system, which is not repayable before the maturity date of a fixed period. EXIM Bank offers higher rates of interest on such deposits. Usually customers are allowed to open this account for a certain period and the rate of interest varies in accordance with the terms of the deposit. The features of FDR are as follows: Minimum balance: TK 10000.00
| 3 months | 6 months | 1 year | |
| Profit | 12.25% | 12.30% | 12.75% |
3. Savings Account:
To maintain smooth and certain life in future Savings account is very suitable for middle class groups. The attributes of Savings Account are:
- 500/- is the minimum amount of initial deposit.
- Client can not withdraw money more than twice a week,
- The interest rate is 8% against S.B. Account.
For opening of this type of accounts following requirements are necessary:
a) The introducer must be attested photograph.
b) The introducer must be account holder of SB and CD of EXIM Bank Bangladesh Ltd.
4. Short Term Deposit (STD):
Short Term Deposit has following attributes:
- 6% interest rate against STD.
- No restriction over withdrawal of money
- 50000/- is the minimum balance.
EXIM Bank extends some special schemes or products for clients:
1. Monthly Savings Scheme (MSS)
2. Multiply Savings Scheme (MPSS)
3. Monthly Income Scheme (MIS)
4. Super Savings Scheme (SS)
a) Monthly Savings Scheme (MSS)
It’s a sure investment for a steady return. It can be opened for 5, 8, 10, or 12 years for Tk.500, Tk.1000, Tk.2000, and Tk.5000. The savings amount is to be deposited within the 10th of every month. If the depositor has a separate account in the bank for which a standing instruction can be given to transfer the monthly deposit in the scheme’s account. Incase of failure to make the monthly installment in the schedule time 5% on overdue installment amount will be charged. The lowest charge will be Tk. 10 and this will be added with the following months installment. After 3 years of savings in this schemed the depositor is eligible for a loan up to 80% of his deposited amount.
Highlights of the Scheme
1) Higher monthly income for higher deposit
2) This scheme is for a 5, 8, 10, 12 year of period.
3) 5007- is the minimum deposit
4) Monthly income will be credited to the depositor’s account on the 10th of each month.
| Term | Monthly
Installment |
Monthly Installment | Monthly Installment | Monthly Installment |
| _______ | 500.00 | 1000.00 | 2000.00 | 5000.00 |
| 5 Years | 41400.00 | 82800.00 | 165000.00 | 414000.00 |
| 8 Years | 81800.00 | 163600.00 | 327200.00 | 818000.00 |
| 10 Years | 118450.00 | 236400.00 | 472800.00 | 1184500.00 |
| 12 Years | 165993.00 | 331986.00 | 663973.00 | 1659932.00 |
Table 5: Various Scheme
Conditions of the Scheme
1) By filling up a form an account is opened.
2) A non-transferable deposit receipt will provide to the customer after opening the account.
3) If the deposit is withdrawn before a 5-year term, then saving interest rate will be applicable and paid to the depositor. However, no interest will be paid if the deposit is withdrawn within 1 year of opening the account and Monthly Income paid to the customer will be adjusted from the principal amount.
4) This scheme will be credited to the loan account until liquidation of the loan amount inclusive of interest. A depositor can avail loan up to 80% of the deposit amount under this scheme.
b) Multiples Savings:
Savings works as the very foundation of development. Savings is the prime source of business investment in a country. So it helps to build up capital. To create more awareness and motivate people to save, EXIM Bank offers Multiples Savings Scheme.
Conditions Of The Scheme:
a) The deposit can be made in multiplies of TK. 10000.00.
b) This is 11 years period deposit. But the deposit can be withdrawn at any year with interest. As an example, if deposit is withdrawn after completion of 1 year but before 2 years then deposit with interest will be paid for 1 year only. The same rule will apply for other years. If deposit is withdrawn before 1st year then no interest will be paid,
c) The depositor can avail loan up to 80% of the deposit under this scheme.
C) Monthly Income Scheme:
This scheme is opportunity for the people who