Investment policies and analysis of competitive advantage by Bangladesh Commerce Bank Ltd

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“Investment policies and analysis of competitive advantage by Bangladesh Commerce Bank Ltd”.

Chapter-1

Introduction

1.2 Objectives of the report

Objectives

The objective of the analysis is to evaluate the procedure of “Investment policy and product & Service” of Bank Asia Limited. There are also many objectives. The primary objective of this report is to comply with the requirement of the Bangladesh Commerce Bank Limited. But the objective behind this study is something broader. Objectives of study are summarized in the following manner:

• To evaluate product & Service procedures.
• To evaluate the performance of the bank.
• To apply theoretical knowledge in the practical field.
• To make bridge between the theories and practical procedures of banking day-to-day operations.
• To gain practical knowledge by working in different desks of zigatola branch office of Bangladesh Commerce Bank Ltd.
• To observe the working environment in commercial banks.
• To study existing banker-customer relationship.
• To know the overall functioning of Bangladesh Commerce Bank Limited.
• To have some practical exposures that will be helpful for my future career.

Specific Objectives

· To submit a report, for the fulfillment of my BBA program.

· Is to find out the “Investment policy and analysis of competitive advantage by Bangladesh Commerce Bank Ltd.”

Broad Objectives

· Together comprehensive knowledge on total banking functions.

· To identify the factors contributing to the attractive & operative performance of the local branch of the bank.

· To make a study of the facts in order to arrive at certain conclusion about product & Service system.

· Critically analyze the functions and the operations of each level of the organization of Bangladesh Commerce Bank Limited.

1.3. Scope of the report

Scope of this assignment was very confined concentrate only on the generalization banking system of Bangladesh Commerce Bank Limited development of capital market of Bangladesh. Besides this, for evaluating the performance I kept my thinking on general banking, loan and advances, product & Service.

1.4. Methodology of the report

This report has been prepared on the basis of experience gathered during the period of Internship from May 15, 2009 to August 15, 2009. For preparing this report, I have undergone group discussion, collected data and sent some questionnaires to the selected Officers and interviewed with some of them. I also studied different circulars and files of the bank.

I hope these criteria will be enough to find out different picture of product & Service procedure and financial performance of the selected Bangladesh Commerce Bank Ltd.

Sources of Data

In order to make the report more meaningful and presentable, two sources of data and information have been used widely.

The “Primary Sources” of Data are as follows:

· ?Face-to-face conversation with the respective officers and staffs of the Branch.

· Informal conversation with the clients.

· Practical work exposures from the different desks of the departments of the Branch covered.

· Relevant file study as provided by the officers concerned.

The “Secondary Source” of Data and Information are:

• Annual Report of Bangladesh Commerce Bank Ltd.
• Various Books, articles, compilations etc. regarding general banking functions, and product & Service.

· Different Procedure Manual published by Bank.

1.5. Limitation of the report

There are some limitations in every analysis. I have also faced some problems at the time analyzing the performance of the bank. The limitations of my analysis are given below:

1. Time is limited (3 month)
2. Insufficiency of information.
3. The bank personnel are very busy.
4. It was very difficult to collect the information from various personnel for their job constraint.
5. As some of the fields of banking are still not covered by our courses, there was difficulty in understanding some activities.
6. Another limitation of this report is Bank’s policy of not disclosing some data and information for obvious reason, which could very much useful.
7. I carried out such a study for the first time, so inexperience is one of the main constraints or the study.

Capter-2

Bangladesh Commerce Bank Limited

2.1 Historical Background of BCBL

Bangladesh Commerce Bank Ltd incorporated in Bangladesh on 1 June 1998 as a banking company, it started banking operations on 16 September 1999 with an authorized and paid up capital of Tk 2,000 million and Tk 920 million respectively. The share of the government of Bangladesh in the bank’s paid up capital is Tk 300 million while depositors of the former Bangladesh Commerce and Investment Limited (BCIL) contributed Tk 520 million. The balance of Tk 100 million is to be subscribed by banks and financial institutions under guidance and supervision by Bangladesh bank.

The former BCIL was set up on 27 January 1986 as a non-bank financial institution. It continued its business till April 1992. Consequent upon its liquidity crisis, Bangladesh Bank suspended its operations in April 1992. As a result, the investors of the company suffered a lot and its employees became jobless. Both the depositors and the jobless employees launched a movement for reopening the company in some form or other and demanded return of their money and dues. With a view to safeguarding the interest of the depositors, employees and the general public, and to protecting the banking system itself from contagious effects of bank failures, the government of Bangladesh established the Bangladesh Commerce Bank on the ashes of the collapsed BCIL.

Subsequently, the government on 8 February 1998 constituted a 10-member board of directors to organize and transform BCIL into BCBL and to administer the affairs of the bank. The 24 branches of BCIL were reopened as full-fledged branches of BCBL. The broad objective of the bank is to carry out all kinds of commercial banking activities and to respond quickly to the changing demands for modern banking products.

In its three months of operations in 1999 starting on 16 September and ending on 31 December, BCBL had mobilized deposits of Tk 83 million. To augment its deposit collection further, BCBL introduced a number of deposit schemes suited to the needs of all classes of people in society. These schemes include a) Monthly Profit Based Deposit Scheme, b) Pension Saving Scheme, c) Interest Free Deposit and Loan Scheme, d) Consumers’ Credit Scheme, and e) Money Plantation Against Saving Certificates. It has also offered competitive rates of interest on its deposit holdings, which varied between 7.75% and 12% since the inception of its operations through May 2000. Total deposits stood at Tk 1,294.2 million on 31 December 2000, when its gross loans and advances amounted to Tk 1,311 million.

The first priority of the bank in 1999 and 2000 was the recovery of the past loans of the BCIL. It has managed to recover Tk 523.3 million in cash and Tk 1,788 million by adjustment against past liabilities. The bank is overburdened with the liabilities and the non-performing classified loans of BCIL. The bank also suffered losses in the years 1999 and 2000 and was not able to maintain necessary provisions for classified loans. Investment of the bank has increased from Tk 20 million in 1999 to Tk 95 million in 2000, mainly in government treasury bills. Because of the huge stuck up loans inherited from the BCIL, the bank’s credit-deposit ratio stood at 101.30%.

Total assets of BCBL, including the Tk 1,423.99 million of former BCIL stood at Tk 3,763.7 million on 31 December 2000. The bank’s off-balance-sheet reserve was only Tk 95.8 million, a figure which has contributed little to the increase of its asset-mix. In 2000, BCBL maintained liquid assets of Tk 1,052.6, a sum hardly sufficient to meet its accumulated short-term/current obligations. On the other hand, statutory liquid assets of the bank were 15.08% in 2000, which is below the 20% SLR requirement envisaged by Bangladesh Bank. Because BCBL had absorbed huge amount of liabilities and non-performing assets of BCIL, it was not possible for the bank to make net profits during the short period of its existence in the new set-up.

The bank is managed by a 9-member board of directors appointed by the government. A total of 590 officers and other staff work in the head office and the 24 branches of the bank. It has inherited a training institute from BCIL. This institute is being reorganized to provide training to its employees in modern banking services.

2.2 Objectives and Targets

1. Offering maximum services to the clients and shareholders as per rules.

2. Providing services by diversification to the door step of people in the economic sector.

3. Ensuring maximum utilization of professional manpower by developing skill & creativeness.

4. Creating savings attitude among various classes of people.

5. Increasing investment for keeping the market economy operative.

6. Earning confidence of all concerned by easing foreign trade and international transaction.

7. Assessment of consumer need and provide short term and long term finance on the basis of real need.

8. Proper maintenance of Bank’s resources through appropriate investment and active participation of various welfare programs of the country.

9. Activate capital market by more participation in the capital market.

10. Involves customers with modern banking through proper usage of modern information technology.

11. Providing best services to the customers to establishing firm discipline in Bank management and building long term relation.

12. Achievement of economic growth through various socio-economic activities.

13. Building image of the Bank home and abroad. Upgrading socio-economic aspects of Bangladesh financing Agro-based Prakalpa.

Chapter-3

Product & Services of BCBL

3.1 Product & Services: Deposit Product

A savings account at BCBL will provide you with healthy returns on your savings at the same time as you help support projects bringing lasting benefits to communities and the environment. Our range of personal savings accounts has been designed to offer something for everyone. So whether you want to invest a lump sum, put by a little every month or you simply want to move your savings to a bank with a uniquely ethical approach, there is a BCBL savings account to suit your needs.

3.2 The rates of interest are given below

3.3 Special Savings Scheme

Under the special savings scheme against regular deposit of particular amount per month a substantial amount after 5/8/10/12/15 & 20 years will be given. This scheme is popularly known as Deposit Pension Scheme

3.4 The Attractive Savings Schemes of BCBL are

3.4.1 Lakhopati Scheme (LDS)

3.4.2 Millionaire Scheme (MIDS)

3.4.3 Kotipati Scheme (KDS)

3.4.4 Marriage Scheme (MDS)

3.4.5 Sikha Sanchaya Scheme (ESS)

3.4.6 Double Benefit (DGDS)

3.4.7 Triple Benefit (TGDS)

3.4.1 Lakhopati Scheme (LDS)

1. Under this Scheme the amount of Deposit is Tk. 1,260/- & Tk. 460/- gradually for period 5 (Five) & 10 (Ten) years.

2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.

5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.

6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

7. Client would receive the return after one month of depositing the last monthly payment.

8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.

9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.

11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.

12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 10,000/- deposit on the account.

13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.

15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

16. Money laundering prevention act, shall be exercise as per rules of BB.

17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.4.2 Millionaire Scheme (MIDS)

1. Under this Scheme the amount of Deposit is Tk. 4600/- & Tk. 2170/- gradually for period 10 (Ten) years & 15 (Fifteen) Years.

2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.

5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.

6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

7. Client would receive the return after one month of depositing the last monthly payment.

8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.

9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.

11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.

12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 50,000/- deposit on the account.

13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.

15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

16. Money laundering prevention act, shall be exercise as per rules of BB.

17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.4.3 Kotipati Scheme (KDS)

1. Under this Scheme the amount of Deposit is Tk. 21,950/- & Tk. 11,100/- gradually for period 15 (Fifteen) Years & 20 (Twenty) Years.

2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.

5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.

6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

7. Client would receive the return after one month of depositing the last monthly payment.

8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.

9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.

11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.

12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 2,50,000/- deposit on the account.

13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.

15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

16. Money laundering prevention act, shall be exercise as per rules of BB.

17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.4.4 Sikha Sanchaya Scheme (ESS)

1. Under this Scheme the amount of Deposit is Tk. 500/- for period 8 (Eight) & 12 (Twelve) years.

2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.

5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.

6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

7. Client would receive the return after one month of depositing the last monthly payment.

8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.

9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.

11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.

12. After completion of 2 (Two) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 10,000/- deposit on the account.

13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.

15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

16. Money laundering prevention act, shall be exercise as per rules of BB.

17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.4.5 Marriage Scheme (MDS)

1. Under this Scheme the amount of Deposit is Tk. 1,000/- for period 12 (Twelve) years & 18 (Eighteen) years.

2. Depending on maturity the return will be as follows-

3. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

4. Under this Scheme client could open any of above account. But after opening account the amount & maturity period could be changed.

5. The depositor must maintain a saving account with any of the brunches of BCBL. By paying a certain fee bank will automatically deposit the monthly deposit amount from the general saving account upon a special instruction of client.

6. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

7. Client would receive the return after one month of depositing the last monthly payment.

8. Monthly payment have to deposited within 10 (Ten) of every calendar month (incase of holyday, next working day will be effective). Any number of advance “Deposit” will be accepted.

9. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

10. If client fail to deposit within the prescribed time, he/she have to pay 5% of deposit amount or Tk. 25/- whichever is greater with the next deposit.

11. Bank contains the right to close the account upon a failure to deposit three (3) consecutive “Deposit”. If a client fail to deposit three (3) consecutive “Monthly Deposit”, the account will be treated as ESS account and upon completion of 6 (Six) month, profit will be paid at normal saving rate.

12. After completion of 4 (Four) years, credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank. This requires minimum Tk. 50,000/- deposit on the account.

13. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

14. No monthly transaction report will be provided on this account. But if needed a charge of Tk. 10/- would be charged for the monthly transaction report.

15. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

16. Money laundering prevention act, shall be exercise as per rules of BB.

17. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

18. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.4.6 Double Benefit (TGDS)

1. Minimum Tk. 5,000/- or any multiple of this amount may be deposited to open this DGDS A/C

2. This deposit shall be accepted only for the period of 6 (Six) years. The depositor must maintain a saving or current account with any of the brunches of BCBL.

3. “Deposit Receipt” will be issued to the customer while receiving deposit.

4. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

5. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

6. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

7. Credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank.

8. If the “Deposit Receipt” is lost prevailing terms/condition in force fro issuing a duplicate receipt for term deposit will be applicable for issuing a “Duplicate Receipt”

9. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

10. Money laundering prevention act, shall be exercise as per rules of BB.

11. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

12. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.4.7 Triple Benefit (TGDS)

1. Minimum Tk. 5,000/- or any multiple of this amount may be deposited to open this TGDS A/C

2. This deposit shall be accepted only for the period of 9 (Nine) years 9 (Nine) months. The depositor must maintain a saving or current account with any of the brunches of BCBL.

3. “Deposit Receipt” will be issued to the customer while receiving deposit.

4. Any Bangladeshi above 18 years of age can open this Account. A minor can also open this account by his/her own name. In this case his/her legal guardian will operate the account.

5. If the depositor wants to encash this ‘Deposit Receipt” prior to maturity, profit will be paid at normal saving rate. But profit will be given if such encashment is made before completion of 6 (Six) month.

6. In the event of death of the depositor prior to maturity of principal with profit will be disbursed his/her nominee(s). in absence of nominee(s), lawful heir(s) may receive the above on submission of succession certificate.

7. Credit facility upto 80% may be availed against the deposit. In that case the client will be required to pay interest on the loan amount as determined by the Bank.

8. If the “Deposit Receipt” is lost prevailing terms/condition in force fro issuing a duplicate receipt for term deposit will be applicable for issuing a “Duplicate Receipt”

9. If Government Tax is imposed on earned income, depositors account will be debited to pay such Taxes.

10. Money laundering prevention act, shall be exercise as per rules of BB.

11. BCBL reserves the right to change/enhance the above terms & condition including revision of rate of interest.

12. Photograph of Nominee duly attested by the applicant is to be enclosed herewith.

3.5 Product & Services: Loan & advances

Like Deposit Scheme, BANGLADESH COMMERCE BANK LIMITED have formulated the following Loan Schemes

1. Financing of Trade

2. Term Loan

3. Financing of small and medium Industries

4. Agriculture Loan

5. House Building Loan

6. Financing of Transport

7. Financing of Non-Banking Financial Institute

8. Syndicate/Club Loan

9. Loan against FDR/Loan against Special Scheme

10. Financing of Export-Import

11. Stuff Loan

12. Bill Purchase/Loan against Share

13. CCS

14. Special Credit Scheme for Service holder

15. Credit Scheme for Women entrepreneurs

16. Prime Customer (5.00 crore or higher )

3.5.1 Financing of small and medium Industries

The main thrust of financing is given on small and medium Industries. This is the priority sector of our Bank

3.5.2 Financing of Trade

Trade Finance includes CC (Cash Credit), SOD (Secured Overdraft) FO (Financial Obligation) and SOD (Secured Overdraft) RE (Real Estate) working capital. This will help the local trades and Businessmen to expand their trade and business unhindered.

3.5.3 Financing of Import & Export

All necessary Financing for Import & Export are done by opening L/C, buying documents providing, LIM, PAD, PC and LTR facilities for smooth functioning of foreign Trade.

3.5.4 Micro Credit and Micro Enterprise Scheme

For poverty alleviation micro credit is provided to poor people without security for their self-sustenance to rehabilitate them in the society

3.5.5 Credit Scheme for Women entrepreneurs

For developing Women entrepreneurship in the country this type of credit is extended to unemployed and skilled women, through which they can transform their micro credit in to small enterprises

3.5.6 Consumers Credit Scheme

Domestic useable items i.e. Computer, Photocopier, Furniture, Washing Machine, Air Cooler, Refrigerator, Sewing Machine, Car, Pressure Cooker etc are financed for comfortable and modern living of the people of limited source of income.

3.5.7 Special Credit Scheme for Service holder

Under this scheme service holders of govt. bank or autonomous bodies are provided with 6 month’s basic salary as loan realizable in 18 equal installments. Professionals are also covered enter this special credit scheme

The Interest Rate of above Loans & Advances criteria are given below-

3.6 Product & Services: Services

BCBL provides specialized services to its clients-

3.6.1 Capital Market Operation

The Bank operates capital market operation which will include Portfolio Management, Investors Account etc.

3.6.2 Counter for Payment of Bills

Dedicated counters are available at BCBL’s branches to receive the payment of various utility (DESA, Titas, BTCL) bills.

3.6.3 Other Services

· Remit funds from one place to another through DD, TT and MT etc.

· Conduct all kinds of foreign exchange business including issuance of L/C, Travelers’ Cheque etc

· Collect Cheques, Bills, Dividends, Interest on Securities and issue Pay Orders, etc.

· Act as referee for customers.

3.7 Various services of BCBL: Charges

Revised Schedule of Charges-

3.8 Hierarchy of position in BCBL

Figure i: Organization Structure

Chapter-4

Investment policy

4.1 Investment policy of the Bank with Financial overview

4.1 Deposit

At the end of December 2008 the deposit of the Bank was Tk. 678.69. The growth of deposit is 19.43% compared to last year. The Bank has given great stress on procurement of low cost fund including cost free fund for bringing down the average cost of fund.

Figure iiii: Deposit, 2001-2008

4.2 Loans & Advances

The Loans & advances of the Bank registered an impressive growth during the year 2008. The total loans & advances amounting to Tk. 578.60 Crore. The advance portfolio of the Bank is well diversified and covers funding to a wide spectrum of business and industries including agro-based and agro processing, ship scraping, steel& engineering, paper & paper products chemical, construction, real-estate and loans under consumers, credit schemes, various trading business, service holders loan and women entrepreneurs of the country.

Figure iiii: Investment, 2001-2008

4.3 International trade

The international trade constitutes a major business activity conducted by the Bank. The important business of the Bank indicated a significant increase in the year. The import business during the year 2003 reached to Tk. 200.00 crores against Tk. 100.00 crores of the previous year which reflected a growth of 100%. The import business made by the Bank resulted in steady increase of revenues for the bank in spite of the downward trend in international trade. The export business handled by the Bank during the year 2003 was Tk. 210.00 crores compared to Tk. 85 crores in the previous year. The slow growth in export business is due to debacle in geopolitical arena, surrounding economic instability.

Figure iv: Import Business, 2002-2003

Figure v: Export Business, 2002-2003

4.4 Advance Deposit Ratio

If we observe the Ratio on Investment and Deposit, it appears that the MFI uses most of there deposits to investment which refers that the MFI mobilize its resources for the best reproduction.

Figure vi: Advance Deposit Ratio, 2002-2006

In 2002 the ratio was 61.00%. It rises to 82.00% in 2006.

4.5 Operating Result and Profit

The Bank earned an operating profit of Tk. 7.04 crore during the year before making any provisions. The operating profit of the Bank during the year 2002 was Tk. 3.15 crore and this the Bank attained a growth of 124% in respect of operating profit. Due to having a cumulative loss of Tk. 5.43 crore no provision for income tax has been provided. After keeping a provision for loans & advances amounting to Tk. 2.23 crores the rest amount has been adjusted with cumulative loss which reduced the cumulative loss to Tk. 1.58 crores.

Figure vvii: Performance Acceleration, 2001-2003, and 2008

4.6 Guarantee Business

The Bank issued guarantees amounting to Tk. 50.00 crores during the year compared to Tk. 20.00 crores in the previous year registering a growth of 250%. The guarantees were issued in favour of different Govt. authorities, Autonomous bodies, Corporations, Multinational Companies etc. against proper securities on behalf of the clients of the Bank.

4.7 Investment

The Investment portfolio of the Bank during the year 2003 was Tk. 14.00 crore against Tk. 6.15 crore in the previous year registering a growth of 133%. The portfolio of investment included Govt. Treasury Bills, Prize Bonds, Share in Public Limited Companies etc. The Bank has always given emphasis on investment of fund in high yield areas and maintains Statutory Liquidity Requirement (SLR) as fixed by Bangladesh Bank.

4.2 Bank’s Performance at Glance

Table i: BCBL’s Performance, 2001-2003, 2008

Capter-5

Product & Services Rival Banks

5.1 Deposit Products: Standard Bank Ltd.

5.1.1 SRDP – SBL Regular Deposit Program

SRDP is a special savings plan that allows you to save and a monthly basis and gets a handsome amount at maturity. SRDP Account gives you the convenience of saving regularly in time with your monthly income stream. So, if you want to create a big savings to fulfill your cherished dream SRDP in the right solution.

-To open a SRDP Account all you need is to be over 18 years of age and a Bangladeshi Citizen.

-You can open a SRDP Account within 10 days of the month by filling up a prescribed account opening form at any Branch of Standard Bank Limited.

-You need to open a SRDP Account for 3 (three) or 5 (five) years, i.e. 36 and 60 equal monthly deposits respectively.

-Under the SRDP you can choose between a minimum monthly deposit amount of Tk.300.00 and a maximum amount of Tk.1000.00

Monthly deposit amount and amount receivable after 3/5 years

5.1.2 Flexibilities

§ Easy procedure to open SRDP

§ Upto 80% loan facility against SRDP deposit.

5.1.3 SRIP – SBL Regular Income Program

SBL Regular Income Program is an income program, which helps you to earn a monthly fixed amount on your deposits at SBL for a period of 3 years.If you are over 18 years of age, a Bangladeshi citizen and an account holder of SBL, you are eligible to open SBL Regular Income Program with our any branch and any time you want. It’s that easy.

§ Easy procedure to open SRIP

§ Automatic profit transfer to linked account

§ Upto 80% loan facil