The working experience of difference task in City Bank Limited

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The working experience of difference task in City Bank Limited


This report is originated of internship, which have done, as a requirement of BBA program. This report is done based on learning of 10 weeks internship in the City Bank Limited.

The City Bank Limited is one of the most disciplined banks with distinctive corporate culture. They believe in shared meaning, shared understanding and share sense making. They people can see and understand events, activities and situation in a distinctive way. They mould their manners and etiquette character individually to suit the purpose of the bank and needs of the customers whose are of paramount importance to the bank. The people of the bank see themselves as a tight knit team/ family that believe in working together for growth. The corporate culture they belong has not been imposed; it has rather been achieved through their corporate conduct.

This report contains the working experience of difference task in CBL, Shaymoli Branch .acquired knowledge on General Banking Activities.

General Banking department perform lot of vital banking activities. General Banking is the starting point of all the banking operation. It is the department which is mostly exposed to the maximum number of bank customers. General banking handles six different section: 1) Deposits 2) Account opening section 3) Bills and clearing 4) Remittance of funds 5) Credit section 6) Card section 7) Cash Section

The relationship between a banker in CBL and its customer begins with the opening of an account. Initially all the accounts are opened with the deposit of money by the customer. Deposits are the blood of a bank.CBL Shaymoli Branch performs the bill clearing function through Head office .CBL head office acts the agent of all CBL branches for clearing house of Bangladesh.

Remittance of fund is ancillary service of CBL. It aids to to remit from one place to another on behalf of its customers through a network of branches .There are two types of remittance – 1) inland/local remittance 2)forging remittance .The main instrument issued by CBL Shaymoli branch for local remittance of funds, pay order, Bank draft etc.

CBL shyamoli branch offers two types card one is VISAQ Electronic Debit Card and another is Credit Card. which the life easy end hassle – free. They also provide two types of loan which are city Solution and City Drive . City solution is any purpose loan drive is a car loan.

The cash section of any branch plays very significant role in banking department .Because it deals with most liquid assists. CBL Shaymoli Branch has well decorated cash section. This receives cash from depositors and pay in slip over the counter.

The other service of the City Bank provides ATM service that is ATM debit card.

At the end of the report a set recommendation is presented for improving their banking activities.

1.1 Origin of the report:

Generally by the word “Bank” we can easily understand that the financial institution which deals with money. Bank owners want to render efficient service to clients at every

Possible location at the maximum cost, Government wants banks to regulate the money market and as well as issue notes and currencies. The clients want their belongings safe as well deposit money from different locations, Recognizing the different needs of the different key party’s interest the banking business; the banks have evolved into different categorizes to meet these needs. That’s why there are different types of banks like- central Bank, Commercial Bank, Agriculture bank, Industrial bank, cooperative bank. But when we use the term “Bank” without ant prefix or restriction it refers to the Commercial bank. Commercial bank is an institution, which plays a major role in channeling to borrowers with productive investment opportunities to run the economy smoothly. That’s why commercial banks are the most important type of financial institution interest the terms of asset. So, the people of the society and the government are very much dependent on the commercial bank as well as the financial intermediary.

In 1983, banks were allowed in the private sector. Now banking sector is one of the fastest growing sectors of the country. During the last 30 years, banking sector in Bangladesh has grown and developed horizontally and vertically. Bank branches have been spread up to the rural areas. Bank services have multiplied. Number of bank has increased impressively. Now there are 48 scheduled commercial banks in the country with 6,596 branches. Besides these there are also four unscheduled bank.

[Source: Bangladesh Economic Review-2008].

1.2 Background of the Study

Knowledge and learning become perfect when it is associated with theory and practice. For any business student only curriculum activity is not enough for handling the real business situation, therefore, it is a requirement after the completion of BBA to involve with a business organization to prepare a interne report. So it is an opportunity for the students to know about the field of business through the internship program.

So Bachelor of business Administration is a specialized course. Stamford University Bangladesh organizes this four years specialized course to provide some efficient graduates in the business sector of the country .The whole course design is not limited within the theoretical boundary but it it also extend to the practical exposure through the internships program . The internship program is a require course for student who are completing Bachelor of Business Administration (BBA) from Stamford University. It is a four credit hour program with duration of three months .Student who have completed all the courses are eligible for this program.

In the Interne program was attached to The City Bank Limited for two months ,days starting from June 6 ,2009 to August 13 ,2009 . During this period I have learned about the banks and the facilities that are providing by them. Only theoretical knowledge without any practical experience makes a person sterile. On the other hand a person having practical experience but no theoretical exposure keeps him blind. The internships program is designed to overcome such position. Bank is a service oriented organization .So the orientation has been made as an integral part of the BBA degree. The outcome of the report is the result of in\immense supportive effort with a large group of personnel of the bank along with the trainers, banking experts and my respected supervision teacher.

The assigned topic is “General Banking a Study on The City Bank Limited, Shaymoli Branch” which is assigned by my supervisor in the department. On the basis of working experience in the internship period prepared this report and tried level best to relate the theoretical knowledge with the practical work situation.

1.3 Objective of the Report

Internship program is a realistic and practical subject to understand the situation nearly. It is a career development activity help a student to build their career. The internship program provides me the following things:

· To see the general banking activities of Shaymoli Branch of CBL.

· To find the relationship between academic education and the real practical field.

· To know how private sector bank growing rapidly with profitably.

· To develop my knowledge about banking system that helps me to build career as banker in future.

1. 4. Methodology

1.4.1 Types of Study

It will be a descriptive type of study. The methodology of this report is totally different from conventional reports. The emphasized on the practical observation. Almost the entire report consists of my practical observation.

1.4.2 Sources of Data

The report is fully exploratory in nature. Data have been collected from both primary and secondary sources.

o Primary sources of data

· Face to face conversation with the bank officers and staffs.

· Informal conversation with the clients.

· Exposure on different desk of the bank

o Secondary sources of data

· Different manuals of The City Bank Limited.

· Different circulars of The City Bank Limited.

· Unpublished data.

· Different textbooks.

· News papers.

· Different websites.

· Bangladesh Economic Review-2008.

1.4.3 Methods of Data Collection

The data have been used in this study are basically collected informally. This is totally an explorative study. As a result, data are collected by studying and reviewing the statement, circular and manuals of the branch and the bank. The relevant data was collected by informal discussion with the bank officials regarding the business and retail banking of the branch to describe the present situation of retail banking.

1.5 Limitations

Like any other study the limitations of this study is not out of questions. But the following factors seem to me as the some points of weakness of this study, despite all out co-ordination from the bank officials.

  • One of the notable limitations of this report is bank’s policy of not disclosing some data and information for obvious reasons, which could be very much useful.
  • Entrance to every nock and corner of the bank was not possible for me.
  • The main constraint of the study is inadequate access to information.
  • Another problem is that creates a lot of confusions regarding verification of data
  • The clients were too busy to provide much time for interview.
  • Web site of CBL was not updated.

2.1 Details of the industry

Bank: “A bank is an institution, usually incorporated with power to issue its promissory notes intended to circulate as money (known as bank notes); or to receive the money of others on general deposit, to form a joint fund that shall be used by the institution, for its own benefit, for one or more of the purposes of making temporary loans and discounts; of dealing in notes, foreign and domestic bills of exchange, coin, bullion, credits, and the remission of money; or with both these powers, and with the privileges, in addition to these basic powers, of receiving special deposits and making collections for the holders of negotiable paper, if the institution sees fit to engage in such business.”

The definition of a bank varies from country to country.

Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as:

  • conducting current accounts for his customers
  • paying cheques drawn on him, and
  • Collecting cheques for his customers.

In most English common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, and this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking’ (Section 2, Interpretation). Although this definition seems circular, it is actually functional,

Because it ensures that the legal basis for bank transactions such as cheques do not depend on how the bank is organized or regulated.

The business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business. When looking at these definitions it is important to keep in mind that they are defining the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. However, in many cases the statutory definition closely mirrors the common law one. Examples of statutory definitions:

  • “banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation).
  • “banking business” means the business of either or both of the following:

1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] … or with a period of call or notice of less than that period; paying or collecting cheques drawn by or paid in by customers.

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques.

2.2: History of Bank

The name bank derives from the Italian word banco “desk/bench”, used during the Renaissance by Florentine bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces of banking activity even in ancient times. ;

In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words ban co and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome—that of the Imperial Mint.

The earliest evidence of money-changing activity is depicted on a silver drachm coin from ancient Hellenic colony Trapezes on the Black Sea, modern Trabzon c. 350-325 BC, presented in the British Museum in London. The coin shows a banker’s table (trapeza) laden with coins, a pun on the name of the city. In fact, even today in Modern Greek the word Trapeza (???????) means both a table and a bank.

In the old days there was no paper money. The accepted token of exchange was precious metal minted into coins by the Church and the Crown. Because there was only a limited amount of gold and silver available, the economic life of the nation had a certain regularity.

An even greater restriction existed throughout Christendom. This was a prohibition against usury, or charging interest. The Church held it to be a grave sin and the code was upheld by the civil powers. There were harsh penalties for those who broke the law.

The regulation of usury was to prevent the separation of money from reality. Money is not a good, it is a measure. It is fraud to pretend otherwise, and constitutes theft. Usury is making money from lending money; it is making money from nothing. This is exactly what is happening today on a colossal scale.

Several important things arose from the prohibition of usury in medieval Christendom. Firstly Jews, who had taken to wandering around Europe in the Middle Ages, began to specialize in money-lending and other practices which were forbidden to Christians. Exploited Christians, both peasants and aristocracy, found themselves being bled dry by usurers, which is why there were sporadic uprisings, imprisonments and expulsions of Jews throughout Europe. It is one reason why King Edward I expelled these perfidious people from England in 1290. Oliver Cromwell allowed them back when the moral authority of the Church was undermined and the King was beheaded in 1649.

Secondly, gold coins, jewels and other valuables were deposited with people who held strongboxes. This was usually with goldsmiths and money-lenders who, more often than not, were one and the same. These loan-sharks and scriveners realized that, without much chance of being found out, they could charge people for looking after their deposits and then use those deposits – which did not belong to them – to make loans to other people at interest. They soon became rich and powerful.

Gold coins are heavy and awkward to carry around so the custom arose whereby the money-lenders would issue credit notes to depositors who began to trade these notes between themselves in commercial transactions. Paper money had come into existence.

A new form of usury developed as the swindling money-lenders realized the immoral benefits that could be obtained from such a situation. It became apparent to these thieves that they could go one step further than dishonestly using other people’s money for financial advantage at no cost to themselves. They could invent money from absolutely nothing. They could issue credit notes with nothing to back them up and put them into circulation as interest-bearing debts. No-one would be any the wiser. They calculated that they could safely issue notes for up to ten times more than the gold deposits they held, because the depositors would never ask for their deposits back all at the same time.

The principle of modern banking was thus established: invent money from nothing, put it into circulation as “running cash notes” that have to be paid back with real wealth that is produced from our labour, sit back and become unbelievably wealthy and powerful men: hidden rulers of nations.

In England this deceitful system was officially sanctioned in 1694. The usurper of the throne, William of Orange, had overthrown the legitimate King James II with the financial backing and plotting of powerful Jewish financiers in Amsterdam. In return he gave the sovereignty of England to a group of financiers by means of a Charter allowing them to call themselves the Bank of England. The Charter made no mention of issuing the nation’s money, but within minutes of signing the new Bank officials were discussing the form of their “running cash notes.” The same system was adopted in every country by a process of Masonic revolution and manipulation.


Socialist theorists and ideologues have never attacked the essential mechanism of capitalism. Although the injustices of the capitalist system have been attacked in volume after volume, and rightly so, they have never even hinted at the usury upon which the whole system is built and from which all the other injustices stem.

Perhaps this is because so many Communist leaders are Jewish. Most of the ‘Russian Revolutionists’ of 1917 were actually Jews from the lower east side of New York City. Two hundred and seventy-five of them were conveyed to Russia aboard the S.S. Christiana, led by Trotsky and financed by Kuhns, Loebs, Schiffs and Warburgs. This cosy circle of Jews and Freemasons financed both sides of the Great War.

Marx and Engels, two more Jews, wrote the Communist Manifesto on behalf of a secret society calling themselves ‘The League of Just Men.’ This secret society was an arm of the Illuminati, whose power and influence was the catalyst of the French Revolution. One of the founding members of the Illuminati was the House of Rothschild, the Jewish banking house which practically invented supra-nationalism for personal profit.


Nowadays banking has become extremely sophisticated but the hidden and usurious mechanism behind it remains the same. After a big enquiry, hushed up as much as possible, the Bank of England was nationalized in 1946. In theory control of the Bank of England should then have passed from a group of private individuals to the British Government, but this is still not the case. Nationalization only added a thin veneer of respectability.

The British Treasury, in conjunction with the Bank of England’s advisers to the Government, determines how much paper money and coin will be issued each year. This has to accord with the wealth of the nation for that year. But because banknotes and coins only account for a tiny percentage of financial transactions, it makes no difference to the bankers at all. Most financial transactions are carried out with abstract figures on a computer screen that have no relationship to real wealth. Everything has to be paid for at interest though – even when it doesn’t exist!

The Government still has to pay interest on old and new loans from the Bank. Only a few years ago it was announced that the interest debt on a loan taken during the Napoleonic War had just been paid off! This is where much of our tax money goes.

2.3: Traditional banking activities

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers’ current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM.

Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending.

Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account.

Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to.

2.4: Law of banking

Banking law is based on a contractual analysis of the relationship between the bank (defined above) and the customer—defined as any entity for which the bank agrees to conduct an account.

The law implies rights and obligations into this relationship as follows:

  1. The bank account balance is the financial position between the bank and the customer: when the account is in credit, the bank owes the balance to the customer; when the account is overdrawn, the customer owes the balance to the bank.
  2. The bank agrees to pay the customer’s cheques up to the amount standing to the credit of the customer’s account, plus any agreed overdraft limit.
  3. The bank may not pay from the customer’s account without a mandate from the customer, e.g. a cheque drawn by the customer.
  4. The bank agrees to promptly collect the cheques deposited to the customer’s account as the customer’s agent, and to credit the proceeds to the customer’s account.
  5. The bank has a right to combine the customer’s accounts, since each account is just an aspect of the same credit relationship.
  6. The bank has a lien on cheques deposited to the customer’s account, to the extent that the customer is indebted to the bank.
  7. The bank must not disclose details of transactions through the customer’s account—unless the customer consents, there is a public duty to disclose, the bank’s interests require it, or the law demands it.
  8. The bank must not close a customer’s account without reasonable notice, since cheques are outstanding in the ordinary course of business for several days.

These implied contractual terms may be modified by express agreement between the customer and the bank. The statutes and regulations in force within a particular jurisdiction may also modify the above terms and/or create new rights, obligations or limitations relevant to the bank-customer relationship.

2.5: Types of Bank

Banks’ activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profit organizations.

Central banks are normally government-owned and charged with quasi-regulatory responsibilities, such as supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as the lender of last resort in event of a crisis

2.5.1 Types of retail banks

National Copper Bank, Salt Lake City 1911

  • Commercial bank: the term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that
  • Banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term “commercial bank” to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.
  • Community Banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners.
  • Community development banks: regulated banks that provide financial services and credit to under-served markets or populations.
  • Postal savings banks: savings banks associated with national postal systems.
  • Private Banks: banks that manage the assets of high net worth individuals.
  • Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.
  • Savings bank: in Europe, savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralized distribution network, providing local and regional outreach—and by their socially responsible approach to business and society.
  • Building societies and Lands banks: institutions that conduct retail banking.
  • Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
  • Islamic banks: Banks that transact according to Islamic principles.

2.5.2 Types of investment banks

  • Investment banks “underwrite” (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital market activities such as mergers and acquisitions.
  • Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies.

2.5.3 Both combined

  • Universal banks, more commonly known as financial services companies, engage in several of these activities. These big banks are much diversified groups that, among other services, also distribute insurance— hence the term banc assurance, a portmanteau word combining “banque or bank” and “assurance”, signifying that both banking and insurance are provided by the same corporate entity.

2.5.4 Other types of banks

  • Islamic banks adhere to the concepts of Islamic law. This form of banking revolves around several well-established principles based on Islamic canons. All banking activities must avoid interest, a concept that is forbidden in Islam. Instead, the bank earns profit (markup) and fees on the financing facilities that it extends to customers.

2.6: List of banks in Bangladesh

The commercial banking system dominates Bangladesh’s financial sector. Bangladesh Bank is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The banking system consists of four nationalized commercial

Banks, around forty private commercial banks, nine foreign multinational banks and some specialized banks. The Nobel-prize winning Grameen Bank is a specialized micro-finance institution, which revolutionized the concept of micro-credit and contributed greatly towards poverty reduction and the empowerment of women in Bangladesh.

2.6.1 Central Bank

  • Bangladesh Bank

Pursuant to Bangladesh Bank Order, 1972 the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it Bangladesh Bank with retrospective effect from 16 December, 1971.

2.6.2 Nationalized Commercial Banks

The banking system of Bangladesh is dominated by the 4 Nationalized Commercial Banks, which together controlled more than 54% of deposits and operated 3388 branches (54% of the total) as of December 31, 2004. The nationalized commercial banks are:

  • Sonali Bank
  • Janata Bank
  • Agrani Bank
  • Rupali Bank

2.6.3Private Commercial Banks

Private banks are the highest growth sector due to the dismal performances of government banks (above). They tend to offer better service and products.

  • AB Bank Limited
  • BRAC Bank Limited
  • Eastern Bank Limited
  • Dutch Bangla Bank Limited
  • Dhaka Bank Limited
  • Islami Bank Bangladesh Ltd
  • Pubali Bank Limited
  • Uttara Bank Limited
  • IFIC Bank Limited
  • National Bank Limited
  • The City Bank Limited
  • United Commercial Bank Limited
  • NCC Bank Limited
  • Prime Bank Limited
  • SouthEast Bank Limited
  • Al-Arafah Islami Bank Limited
  • Social Islami Bank Limited
  • Standard Bank Limited
  • One Bank Limited
  • Exim Bank Limited
  • Mercantile Bank Limited
  • Bangladesh Commerce Bank Limited
  • Mutual Trust Bank Limited
  • First Security Bank Limited
  • The Premier Bank Limited
  • Bank Asia Limited
  • Trust Bank Limited
  • Shahjalal Islami Bank Limited
  • Jamuna Bank Limited

2.6.4 Foreign Banks

  • Citigroup
  • HSBC
  • Standard Chartered Bank
  • Commercial Bank of Ceylon
  • State Bank of India
  • Habib Bank
  • National Bank of Pakistan
  • Woori Bank
  • Bank Alfalah
  • ICB Islami Bank

2.6.5 Specialized Banks

Out of the specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank) were created to meet the credit needs 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. The Specialized banks are:

  • Grameen Bank
  • Bangladesh Krishi Bank
  • Bangladesh Shilpa Bank
  • Rajshahi Krishi Unnayan Bank
  • Bangladesh Shilpa Rin Sangstha
  • Basic Bank Ltd (Bank of Small Industries and Commerce)
  • Bangladesh Somobay Bank Limited(Cooperative Bank)
  • The Dhaka Mercantile Co-operative Bank Limited (DMCBL)

2.7: Banks in the economy

2.7.1: Size of global banking industry

Worldwide assets of the largest 1,000 banks grew 16.3% in 2006/2007 to reach a record $74.2 trillion. This follows a 5.4% increase in the previous year. EU banks held the largest share, 53%, up from 43% a decade earlier. The growth in Europe’s share was mostly at the expense of Japanese banks, whose share more than halved during this period from 21% to 10%. The share of US banks remained relatively stable at around 14%. Most of the remainder was from other Asian and European countries.

The United States has by far the most banks in the world, both in terms of institutions (7,540 at the end of 2005) and branches (75,000). This is an indicator of the geography and regulatory structure of the USA, resulting in a large number of small to medium-sized institutions in its banking system. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy each had more than 30,000 branches—more than double the 15,000 branches in the UK.

2.7.2 Bangladesh economy

In FY2008 economic performance was better than expected considering the effect of natural disaster in the first half of the fiscal year and higher international commodity price. The recovery agriculture and service and the rebound in export in the second half contributed to the reasonable 6.2% growth of GDP.Growth was supported by a steady flow of bank credit and a surge in workers ‘remittance .the economy during the year witnessed a rare achievement when the National Board of Revenue (NBR) for the first time achieved the target to earn take 374.79 billion as revenue.

2.8: Banking in Bangladesh at Present

Bangladesh bank continues to pursue an accommodative monetary policy to ensure steady flows of credit to the economy’s productive sectors. On year –on –year –basis, IN December 2007, broad money growth was 14.2% and private sector credit growth 17% .From February 2008,responding to the pickup in demand ,growth in broad money(15.2%) and private sector credit (19.6%) stated rising , reaching 17.6% and 25.2% respectively in June 2008 ,in both cases higher then the program target of 16% .Reserve money growth increased year-on –year from 6.9% in March to 19.6% in June 2008. Although the sale of foreign exchange by Bangladesh bank in the inter –bank on-year net foreign assets growth from 34.8% in December 2007,it was still high at 14.4% in June 2008.

The fall in net foreign assets was more than offset by the growth of domestic credit, which rose steadily from 15.1% year-on year in December 2007 to 21.1% in June 2008. Growth of net credit to the Government was also high at 30.45 year-on-year, in June 2008 despite the robust growth in revenue .in conducting monetary policy, Bangladesh bank has relied more on open market operation, keeping reserve requirement and liquidity ratio unchanged and causing no major change in policy rates as evidence by the marginal rise during the year in yield on treasury bills and small adjustment in bank lending and deposit rates. The weighted average yield of 28 days treasury bills was 7.5% in June 2008, slightly higher than the 7.3% in June 2007.Reserve reports for 1-2 day maturity remained stable at around 8.5% since December 2007.

The call money rate declined from 12.8% in March 2008 to 9.95 in June2008.Despite excess liquidity in the banking system of taka 82.6 billion at the end of May 2008, some banks experienced temporary liquidity shortages. Bangladesh bank remained vigilant against a build up of demand pressure and encourage of bank to channel credit to productive sector, in latest Monetary Policy Statement (MPS), Bangladesh maintained the accommodative stance for channeling credit flow to the economy’s productive sector. The MPS focuses on the needs of agriculture, SME’s, and the rural economy; and promises to closely monitor the growth of private sector credit and take required correct measure. The monetary policy stance of the Bangladesh Bank ,covering the first half (H1) of FY09 (July – December 2008),aims at using the monetary policy fro ensuring reasonable price essential to sustaining high economic growth ,shielding the economy form global price and financial turbulence and downside risk, and tapping new upside opportunities .The policy stance target a real GDP growth of 6.5% and average inflation rate of around 9.0% in FY09.The policy announcement in intended to anchor of inflation expectation on realistic near term assessment of growth and price developments. The implementation of the monetary policy stance faces several downside risks which might make monetary management challenging in FY09. It would thus be critical to monitor these challenges and implement timely policy response. Although indication is there that domestic production especially in the agriculture sector, is likely to recover strongly in FY09 due to favorable price incentives for the farmers, the possibility of floods and other natural disaster can not be fully ruled out. Similarly, other unexpected events including socio- political instability could substantially changes the outlook affecting the smooth implementation of the policy stance. Thus it would be important to take precaution s against any unexpected natural calamities along with ensuring timely supply of inputs of the farmers and take measure to minimize domestic vulnerabilities and risks. The productivity growth of the economy is crucial which has been suffering from continuing power shortage, other infrastructure bottlenecks, and socio-political disruption. It would be important to strengthen the infrastructure and other support service and ensure congenial business climate. Failure to do so would widen the gap between rising aggregate demand and domestic production policy to restrain aggregate demand.

2.9 Industry in Bangladesh at Present

Industry sector growth in FY 2008 declined to 6.9% from 8.4% in FY 2009.After the week performance in the first half of the fiscal year because of slow growth in production and export of garments and knitwear –the industrial mainstays –industry growth rebound in the second half with a surge in export, rise in private sector credit and import of raw materials and gain in business confidence. But the escalation on import price of industrial raw materials and intermediate inputs in the international market slowed industry sector growth relative to the previous year. Manufacturing growth was 7.4% was lower (previous year growth was 9.7%), but the growth on mining and quarrying at 8.3% in the preceding year. Manufacturing growth was affected by infrastructure constrains, particularly power shortage .The combined growth of power ,gas and water supply recovered to 4.9% from 2.1% last year because of a pickup supply growth in construction declined to 5.9 % from 7% because of the higher price of construction materials and downsizing of the annual development program (ADP). Because of higher backward and forward linkages, slower construction activities affected other economic activities and provided fewer jobs for construction worker.

2.10 Challenges within the banking industry

The banking industry is a highly regulated industry with detailed and focused regulators. All banks with FDIC-insured deposits have the FDIC as a regulator; however, for examinations the Federal Reserve is the primary federal regulator for Fed-member state banks; the Office of the Comptroller of the Currency (“OCC”) is the primary federal regulator for national banks; and the Office of Thrift Supervision, or OTS, is the primary federal regulator for thrifts. State non-member banks are examined by the state agencies as well as the FDIC. National banks have one primary regulator—the OCC.

Each regulatory agency has their own set of rules and regulations to which banks and thrifts must adhere.

The Federal Financial Institutions Examination Council (FFIEC) was established in 1979 as a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions. Although the FFIEC has resulted in a greater degree of regulatory consistency between the agencies, the rules and regulations are constantly changing.

In addition to changing regulations, changes in the industry have led to consolidations within the Federal Reserve, FDIC, OTS and OCC. Offices have been closed, supervisory regions have been merged, staff levels have been reduced and budgets have been cut. The remaining regulators face an increased burden with increased workload and more banks per regulator. While banks struggle to keep up with the changes in the regulatory environment, regulators struggle to manage their workload and effectively regulate their banks. The impact of these changes is that banks are receiving less hands-on assessment by the regulators, less time spent with each institution, and the potential for more problems slipping through the cracks, potentially resulting in an overall increase in bank failures across the United States.

The changing economic environment has a significant impact on banks and thrifts as they struggle to effectively manage their interest rate spread in the face of low rates on loans, rate competition for deposits and the general market changes, industry trends and economic fluctuations. It has been a challenge for banks to effectively set their growth strategies with the recent economic market. A rising interest rate environment may seem to help financial institutions, but the effect of the changes on consumers and businesses is not predictable and the challenge remains for banks to grow and effectively manage the spread to generate a return to their shareholders.

The management of the banks’ asset portfolios also remains a challenge in today’s economic environment. Loans are a bank’s primary asset category and when loan quality becomes suspect, the foundation of a bank is shaken to the core. While always an issue for banks, declining asset quality has become a big problem for financial institutions. There are several reasons for this, one of which is the lax attitude some banks have adopted because of the years of “good times.” The potential for this is exacerbated by the reduction in the regulatory oversight of banks and in some cases depth of management. Problems are more likely to go undetected, resulting in a significant impact on the bank when they are recognized. In addition, banks, like any business, struggle to cut costs and have consequently eliminated certain expenses, such as adequate employee training programs.

Banks also face a host of other challenges such as aging ownership groups. Across the country, many banks’ management teams and board of directors are aging. Banks also face ongoing pressure by shareholders, both public and private, to achieve earnings and growth projections. Regulators place added pressure on banks to manage the various categories of risk. Banking is also an extremely competitive industry. Competing in the financial services industry has become tougher with the entrance of such players as insurance agencies, credit unions, check cashing services, credit card companies, etc.

2.11: Bank crisis

Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity risk (where many depositors may request withdrawals beyond available funds), credit risk (the chance that those who owe money to the bank will not repay it), and interest rate risk (the possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loans).

Banking crises have developed many times throughout history, when one or more risks have materialized for a banking sector as a whole. Prominent examples include the bank run that occurred during the Great Depression, the U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the sub prime mortgage crisis in the 2000s.

2.12: Bank Profits

A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical and dependent on the needs and strengths of loan customers. In recent history, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also including service charges on an array of deposit activities and ancillary services (international banking, foreign exchange, insurance, investments, wire transfers, etc.). Lending activities, however, still provide the bulk of a commercial bank’s income.

In the past 10 years American banks have taken many measures to ensure that they remain profitable while responding to increasingly changing market conditions. First, this includes the Gramm-Leach-Bliley Act, which allows banks again to merge with investment and insurance houses. Merging banking, investment, and insurance functions allows traditional banks to respond to increasing consumer demands for “one-stop shopping” by enabling cross-selling of products (which, the banks hope, will also increase profitability). Second, they have expanded the use of risk-based pricing from business lending to consumer lending, which means charging higher interest rates to those customers that are considered to be a higher credit risk and thus increased chance of default on loans. This helps to offset the losses from bad loans, lowers the price of loans to those who have better credit histories, and offers credit products to high risk customers who would otherwise been denied credit. Third, they have sought to increase the methods of payment processing available to the general public and business clients. These products include debit cards, prepaid cards, smart cards, and credit cards. They make it easier for consumers to conveniently make

transactions and smooth their consumption over time (in some countries with underdeveloped financial systems, it is still common to deal strictly in

cash, including carrying suitcases filled with cash to purchase a home). However, with convenience of easy credit, there is also increased risk that consumers will mismanage their financial resources and accumulate excessive debt. Banks make money from card products through interest payments and fees charged to consumers and transaction fees to companies that accept the cards. Helps in making profit and economic development as a whole.

Chapter -3: Organization profile

3.1 History & origin of City Bank

City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top bank among the oldest five Commercial Banks in the country which started their operations in 1983. The Bank started its journey on 27th March 1983 through opening its first branch at B. B. Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around 13 local businessmen who braved the immense uncertainties and risks with courage and zeal that made the establishment and forward march of the bank possible. Those sponsor directors commenced the journey with only Taka 3.4 crore worth of Capital, which now is a respectable Taka 330.77 crore as capital and reserve.

City Bank is among the very few local banks which do not follow the traditional, decentralized, geographically managed, branch based business or profit model. Instead the bank manages its business and operation vertically from the head office through 4 distinct business divisions namely

1. Corporate and Investment Banking;

2.Retail Banking (including Cards);

3.SME Banking; and

4.Treasury and Market Risks.

Under a real-time online banking platform, these 4 business divisions are supported at the back by a robust service delivery or operations setup and also a smart IT Backbone. Such centralized business segment based business and operating model ensure specialized treatment and services to the bank’s different customer segments.

The bank currently has 83 online branches spread across the length and breadth of the country that include a full fledged Islami Banking branch. Besides these traditional delivery points, the bank is also very active in the alternative delivery area. It currently has 25 ATMs of its own; and ATM sharing arrangement with a partner bank that has 225 ATMs in place; SMS Banking; Interest Banking and so on. Soon its Customer Call Center is going to start operation. The bank has a plan to end the current year with 50 own ATMs.

City Bank is the first bank in Bangladesh to have issued Dual Currency Credit Card. The bank is a principal member of VISA international and it issues both Local Currency (Taka) and Foreign Currency (US Dollar) card limits in a single plastic. VISA Debit Card is another popular product which the bank is pushing hard in order to ease out the queues at the branch created by its astounding base of some 400,000 retail customers. The launch of VISA Prepaid Card for the travel sector is currently underway.

City Bank prides itself in offering a very personalized and friendly customer service. It has in place a customized service excellence model called GAP (Graceful-Appropriate-Pleasing) that focuses on ensuring happy customers through setting benchmarks for the bank’s employees’ attitude, behavior, readiness level, accuracy and timelines of service quality.

City Bank is one of the largest corporate banks in the country with a current business model that heavily encourages and supports the growth of the bank in Retail and SME Banking. The bank is very much on its way to opening many independent SME centers across the country within a short time. The bank is also very active in the workers’ foreign remittance business. It has strong tie-ups with major exchange companies in the Middle East, Europe, Far East & USA, from where thousands of individual remittances come to the country every month for disbursements through the bank’s large network of 83 online branches.

The current senior management leaders of the bank consist of mostly people form the multinational banks with superior management skills and knowledge in their respective “specialized” areas. The bank this year, is celebrating its 25th year of journey with the clear ambition of becoming the no.1 private commercial bank in the country in 3 years time. The newly launched logo and the pay-off line of the bank are just one initial step towards reaching that point.

3.1.1 Logo meaning of City Bank

On 5th July 2008, The City Bank Limited changed its brand name into, simply, City Bank. Bank’s new logo along with a brand philosophy line or pay-off line were unveiled that day at a ceremony held at Radisson Water Garden Hotel, Dhaka, Humble Advisor to the Ministry of Finance &

Planning, Dr A B Mirza Azizul Islam did this honor to the bank by launching it. We give here a simple note on the philosophy that went behind the creation of this logo:

On 5th July 2008, The City Bank Limited changed its brand name into, simply, City Bank. Bank’s new logo along with a brand philosophy line or pay-off line were unveiled that day at a ceremony held at Radisson Water Garden Hotel, Dhaka, Humble Advisor to the Ministry of Finance & Planning, Dr A B Mirza Azizul Islam did this honor to the bank by launching it. We give here a simple note on the philosophy that went behind the creation of this logo:

It’s a simple logo. Its beauty is in its simplicity of arrangement which is also bold. Since it is simple, it connects with people easily.

· The red and silver shape may mean a chess board. Chessboard stands for wisdom & vision. Since we are 25 years old, we are expert, wise & experienced. Chess is the game of the smart people who knows all the moves. Our game is to deal with your money matters and – as wise & experienced bankers, we are experts in that.

· The red and silver shape may also mean something dynamic. It may mean the checkered flag of Formula One Racing. Then it signifies speed and agility & fast pace.

· The red and silver shape may also mean a kite. It’s a beautiful colorful kite, nose up, going to reach for the sky. In that case, it means the bank is soaring high into the skies of many possibilities in order to make customers’ financial dreams come true

· The red and silver shape may also mean it’s a flying chessboard. It’s a chess-board that has taken wings and is flying. In that case it indicates to what extent this bank can go to serve customers better

The logo has a dynamic shape. Such dynamism stands for modernity, the 21st century. That signifies, this is going to be a techno-savvy bank, a state-of-the-art tech-powered modern bank

The color ‘red’ stands for emotion, passion, strength, vitality, action, confidence & courage.

The color silver symbolizes riches, just as gold does. Silver is glamorous & distinguished. Silver is the traditional 25th anniversary color or Silver Jubilee color. Another thing is: “Pieces of silver” means money or coin. And our pay-off line is “Making Sense of Money”.

Now the pay-off line “Making Sense of Money”.

No money, no bank. We all know how important money can be for any of us. Money is a need all by itself. It is the most precious thing. Money is the port key to any destination. It is everything between a person and his / her dreams & hopes. So, the money which is almost synonymous to life, must make sense. And for your money to make sense, it must be handled by an expert. That is where we come in. We say, we make sense of your money. Because, at City, we are wise men of banking. With 25 years of experience, we know how to make your money more meaningful for you, how to lend you money in times of your needs or how to grow your money safely for you.

3.2 Vision of the city bank


City bank’s main vision is that to be the leading bank in the country with best practices and highest social commitment.

To achieve the desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement, because, in City Bank, they believe, the line 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.

3.3 Misson of the City Bank


· To contribute to the socioeconomic development of the country.

· To attain highest level of customer satisfaction through extension of services by dedicated and motivated team of professional.

· To maintain continuous growth of market share ensuring quality

· To maximize bank’s profits by ensuring its steady growth

· To maintain the high moral and ethical standards

· To ensure participative management system and empowerment of Human Resources.

· To ensure an enabling environment where innovativeness and performance is rewarded.

3.4: functional Department of City bank

City bank basically four functional departments. These are:

3.4.1 Corporate Banking

3.4.2 Retail Banking

3.4.3 SME Banking

3.4.4 Treasury Banking

3.4.1 Corporate Banking

· Working Capital Finance

· Trade Finance

· Short / Mid- term Finance

· Project Finance

· Islamic Finance

· Structured Finance

· Cash Management

· Investment Banking

· Schedule of Charges

3.4.2 Retail Banking

· Deposit

· Loan

· Debit Card

· Credit Card

· I-Banking

· Schedule of Charges

3.4.3 SME Banking

· City Muldhan

· City Sheba

· City Shulov

· City Munafa

3.4.4 Treasury

· Overnight Deposit

· Term deposit

· Foreign Exchange

· Local Currency Spot & Forward

· Derivatives

3.5 Overall Functions of the City Bank Ltd:

CBL always considers client service the most vital factor to ever-increasing competition and challenge in the Banking sector and as such places on it utmost importance. With that end in view the bank continued its personalized approach with speed, precisi