Overall banking system of United Commercial Bank Limited (UCBL)
Chapter – 1
CHAPTER ONE: INTRODUCTION
1.1 Origin & Background of the study
Internship is the part of BBA. Its gives us the practical idea of office environment as well as activities. That is why I have made decision to prepare a report on Overall Banking System which is a requirement of B.B.A. program. Bachelor of Business Administration (BBA) Course requires an attachment with an organization followed by a report assigned by the supervisor in the organization and endorsed by the faculty advisor.
United commercial Bank Limited is a financial institute that started its operation in mid 1983, has been effectively playing its important role not only for its growth but also for the economic development of the country. As I am already working with United Commercial Limited (UCBL), Md. Tofael Haider (First Assistant Vice President),K. M. Shafiqur Rahman(SEO) of United Commercial Bank, Limited, Barisal Branch, Barisal helped me to conduct a study on Overall Banking System. My faculty supervisor, Enayet Ullah, Coordinator of BBA Program, Faculty of Business Administration, Uttara University, approved the topic and authorized me to prepare a report on “Overall Banking System: The case of UCBL (Barisal Branch), as part of the fulfillment of BBA requirement.
The report included organizational overview and analysis the performance of foreign exchange. Finally, the report has been conducted with same recommendations. It is expected that the report with high light the task performed and experienced gained during the practical work.
The objectives of the study may be spelled out as follows:
§ To fulfill the partial requirements of BBA program
§ To know the trend of the organization for performance analysis.
§ To identify the financial condition of an organization.
§ To provide a brief picture on the procedure & performance of the Foreign Exchange.
§ To highlight on the export and import procedure
§ To recommend various strategies & techniques to solve the problems.
Banking system occupies an important place in a Nation’s economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In recent times the banking sector over the world has been undergoing a lot of changes due to deregulation, technological innovation, globalization etc. Bangladesh banking sector is lagging for behind in adopting these changes. To thrive well in these changing environments, not only development of appropriate infrastructure is necessary but also infusion of professionalism in to banking service is essential. It also helped me to acquire a firsthand perspective of a leading private bank in Bangladesh. In this report, the major area of commercial banking has been covered is financial performance of the organization.
From the beginning to end, the study has been conducted with the intention of making it as a complete and truthful one. However, many problems appeared in the way of conducting the study mainly time. During the study it was not possible to visit the whole area covered by the bank although the financial statements and other information regarding the study have been considered. The study considers following limitations:
1.4.1 Time limit
The time is not sufficient for gather whole knowledge on the vast area of the Banking like general banking, credit analysis and foreign exchange. On the other hand, I have to engage very much with my daily office work.
1.4.2 Confidentiality of data
Every organization has their own secrecy that is not revealed to others. The Bank can not disclose enough information for the sake of secrecy of the organization.
§ There is no annual report in published form after 2005. Because after 2005 no AGM was held in this limited company.
§ This report suffers from a narrow data range for analysis.
§ Inadequacy and lack of availability of required Current data.
- The documentation part of the Letter of Credit with regard to export and import is quite complicated and huge formalities are maintained.
CHAPTER TWO: METHODOLOGY OF THE STUDY
The program generally starts with visit and observation. However, in respective areas of the study different methods can be used where necessary. In preparing this report some methods were followed. As preparing a report about the activities of any financial organization is a difficult and complicated task, no single method is appropriate for preparing the report. Effective research involves six basic steps. These are:
Diagram: Effective Research
Barisal Branch is one of the productive branches of UCBL. The branch is doing well in the General Banking, Advanced Section, Cash and Remittance Section. For convenience of the study Barisal Branch has been taken into consideration as population.
2.2 Data collection
Source of data of this report can be divided into two categories:
2.2.1 Primary sources
- Face to Face conversation with the respective officers and staffs
- Sharing practical knowledge of officials.
- Interviewing officers and staffs.
- In-depth study of selected cases.
- Interview with the Clients.
- My Practical Banking Knowledge.
2.2.2 Secondary sources
- Annual Report of UCBL
- Audit Reports
- Relevant books, Research papers, newspapers and Journals
- Internet and various study selected reports.
- My present Banking Knowledge.
- Different textbooks
Overview of the Banking Sector
CHAPTER THREE: OVERVIEW ON BANKING SECTOR
Banking Company is defined as a company which transacts the business of banking, an individual firm, company or corporation generally deals in the business of money and credit is called bank. In our country, any institution, which collects money as deposit from people, lending or investing money of its own as well as deposit as credit/advance can be treated as a Bank.
Modern banks play an important part in promoting economic development of a country. Banks provide necessary funds for executing various programs underway in the process of economic development. Banks in all countries works as the depositor of money. The surplus units/ depositors look for safety of money and extra earning like interest of their surplus money by the Bank.
3.1 Bangladesh Bank
Bangladesh Bank (BB) has been working as the central bank since the country’s independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. BB is also responsible for planning the government’s monetary policy and implementing it thereby.
The Banking Companies Ordinance was promulgated on the 7th June 1962. This has been adopted in Bangladesh and is applicable to the banking companies only. 1912. Bangladesh has a mixed banking system comprises of nationalized, private and foreign commercial banks. Bangladesh Bank (BB) has working as the central bank of the country since the independence of the country. Its prime jobs include issuing currencies, maintaining foreign exchange reserve and providing transaction facilities of all public monetary mattes. BB is responsible for planning and implementing the government’s monetary policy.
The BB has a governing body comprising of nine members with the Governor as its chief. Apart from the head office in Dhaka, it has nine more branches, of which two in Dhaka and one each in Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Rangpur and Barisal.
3.2 Brief picture of banking sector
Bank Company Act, 1991, empowers BB to issue licenses to carry out banking business in Bangladesh. Pursuant to section 31 of the Act, before granting a license, BB needs to be satisfied that the following conditions are fulfilled: “that the company is or will be in a position to pay its present or future depositors in full as their claims accrue; that the affairs of the company are not being or are not likely to be conducted in a manner detrimental to the interest of its present and future depositors; that, in the case of a company incorporated outside Bangladesh, the Government or law of the country in which it is incorporated Bangladesh as the Government or law of Bangladesh grants to banking companies incorporated outside Bangladesh and that the company complies with all applicable provisions of Bank Companies Act, 1991.”
Licenses may be cancelled if the bank fails to comply with above provisions or ceases to carry on banking business in Bangladesh.
The banking sector of Bangladesh comprises of four categories of scheduled banks. These are nationalized commercial banks (NCBs), government owned development finance institutions (DFIs), private commercial banks (PCBs) and foreign commercial banks (FCBs).
The commercial banking system dominates the financial sector with limited role of Non-Bank Financial Institutions and the capital market. The Banking sector alone accounts for a substantial share of assets of the financial system. The banking system is dominated by the 4 State Owned Commercial Banks, which together controlle more than 30% of deposits and operates 3383 branches (50% of the total) as of June 30, 2008.
Out of the 5 specialized banks, 2(Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit need of the agricultural sector while the other two (Bangladesh Shilpa Bank (BSB) & Bangladesh Shilpa Rin Sangtha (BSRS) are for extending term loans to the industrial sector of Bangladesh.
At present, there are four NCBs operating in Bangladesh. The second type is the DFIs which derive their funds mainly from the governments, other financial institutions, and supranational organizations.
Table-1: Banks in Bangladesh (Taka in billion)
|No. of Banks||No. of Branches||Total
|No. of Banks||No. of Branches||Total
Source: Bangladesh Bank, Annual report 2007-2008
Table1 shows that the number of banks at the end of the year 2008 was 48. These banks had a total number of 6717 branches as of December 2007. The number of bank branches increased from 6582 to 6717 due to opening of new branches by the PCBs mainly during the year.
Table-2: Deposit of Banks