Performance Evaluation of Overall Banking System

Performance Evaluation of Overall Banking SystemPractical Study on

Department of Marketing

Jahangirnagar University

Id: 2230, Exam Roll: 110169, Reg No: 30118

BBA 2



Submission Date:

Performance Evaluation of Overall Banking SystemPractical Study on Janata Bank Limited

Submitted to:

Md. Ariful Hoque

Internship Supervisor



Submitted by:

Shahfaraj Hasan Hridoy

Id: 2230, Exam Roll: 110169, Reg No: 30118

BBA 2nd Batch, Session: 2010-11



Course Code: MKT 498

Submission Date: December 15, 2014

Performance Evaluation of Overall Banking System-A Janata Bank Limited

December 15, 2014Md. Ariful HoqueIntern Supervisor,Department of Marketing,Jahangirnagar University.

Subject: Submitting the report on Performance Evaluation of Overall Banking System of Janata Bank Limited.

Dear Sir,

I am submitting a well-structured and comprehensive survey report on Performance Evaluation of Overall Banking System of Janata Bank Limited in due time. Despite many constraints like scope and access to information, I have tried to create something satisfactory.

I have tried to follow your guideline in every aspects of preparing this report. I have concentrated on the most relevant and logical areas to make this report coherent as well as practical.

I hope this report will entice your kind appreciation.

Sincerely,

___________________Shahfaraj Hasan HridoyId: 2230; Exam Roll: 110169; Reg: 301182nd Batch, BBASession-2010-11Department of MarketingJahangirnagar University

Letter of Transmittal

This is to certify that Shahfaraj Hasan Hridoy, Id:2230; Exam Roll:110169 is a regular student of Bachelor of Business Administration under the Department of Marketing, Jahangirnagar University. He has successfully completed his internship at Janata Bank Ltd, FarashganjBranch, Dhaka and he has prepared his internship report under my supervision. His assigned Internship topic is Performance Evaluation of Overall Banking System of Janata Bank Limited. He is permitted to submit the internship report for presentation.

I wish him every success in life and expect a great future.

. Md. Ariful HoqueLecturerDepartment of MarketingJahangirnagar University

Approval Certificate

I wish to thank the immeasurable grace and profound kindness of Almighty Allah, the supreme

authority of the universe. From the first inception to the final completion of this report, the

success of this study rests not on me alone but on the contributions of many persons who have

inspired, influence and guided my work.

The Internship period was really an interesting session and attending a session like this provided

me a sort of job experience with a vast store of knowledge about banking sector and its activities.

At first I would like to convey our deep gratitude to my honorable Intern Supervisor, Md. Ariful

Hoque for giving me the opportunity to present my Internship Report on Performance

Evaluation of Overall Banking System of Janata Bank Limited. Without giving me courage

and continuous support, it was quite impossible for me to carry out the preparations and

proceedings of this report.

The officials of Janata Bank, Farashganj Branch also helped me in providing vital information

regarding the concept of the various departments and the process followed in the respective

departments. They shared their views & guided me to prepare this report. While preparing, I have

received cordial and sincere assistance from the officials.

Acknowledgement

INTRODUCTION 10

SIGNIFICANCE OF THE STUDY 11

RATIONALE OF THE STUDY 11

OBJECTIVES OF THE REPORT 12

SPECIFIC OBJECTIVES: 12

METHODOLOGY OF THE STUDY 12

PRIMARY DATA 12SECONDARY DATA 12

ANALYSIS TECHNIQUES 13

LIMITATIONS 13

LITERATURE REVIEW 14

BACKGROUND OF JANATA BANK LIMITED 16

PROFILE OF THE JBL AT A GLANCE 17

ORGANIZATIONS MISSION, VISION AND VALUES 18

MISSION: 18VISION: 18VALUES: 18

STRATEGIC OBJECTIVES OF JBL 19

PRODUCTS AND SERVICES OF JBL 20

MANAGEMENT OF JANATA BANK LTD: 23

HUMAN RESOURCES OF JBL 23

SUSTAINABLE BANKING OF JBL 25

Table of Content

ECONOMIC CONTRIBUTION: 25FINANCIAL INCLUSION: 25ENVIRONMENTAL CONTRIBUTION: 26SOCIAL CONTRIBUTION: 27HUMAN RIGHTS: 27

KEY MILESTONE OF JBL 28

FIVE YEARS KEY FINANCIAL INFORMATION 29

GENERAL BANKING OF JBL 31

ACCOUNT OPENING SECTION 31DEPOSIT SECTION 35CASH SECTION 39REMITTANCE SECTION 41BILLS AND CLEARING SECTION 44ACCOUNTS SECTION 44DISPATCH SECTION 45

CREDIT MANAGEMENT OF JBL 45

CREDIT POLICY OF JBL 45OBJECTIVES OF CREDIT POLICY 46CREDIT GRANTING PROCESS OF JBL 46CREDIT PRODUCTS OF JBL 50FEATURE AND BENEFITS OF LOANS PROVIDED BY JBL 52VARIOUS FORMS OF JBL CREDIT 53INTEREST RATE OF DIFFERENT LOAN OF JBL 54CREDIT RISK MANAGEMENT OF JBL 54

FOREIGN EXCHANGE OPERATIONS OF JBL 55

IMPORT 55EXPORT 58FOREIGN REMITTANCE 60

FINANCIAL PERFORMANCE ANALYSIS USING CAMEL MODEL: 61

1. C (CAPITAL ADEQUACY): 612. A (ASSET QUALITY): 623. M (MANAGEMENT EFFICIENCY): 624. E (EARNING QUALITY): 63

5. L (LIQUIDITY): 64

TESTING THE FINANCIAL SOUNDNESS OF JANATA BANK LTD. USING Z-SCORE MODEL: 65

SWOT ANALYSIS OF JANATA BANK LIMITED 67

FINDINGS 69

RECOMMENDATIONS 70

CONCLUSION 71

REFERENCES 72

Table 1-Profile of JBL............................................................................................................... 17Table 2-Products & Services of JBL.......................................................................................... 20Table 3-Environmental Contribution ......................................................................................... 26Table 4-Social contribution ....................................................................................................... 27Table 5-Five years key financial information............................................................................. 30Table 6-Fixed Deposit Interest Rate .......................................................................................... 37Table 7-Monthly Savings Schemes............................................................................................ 38Table 8-Medical Deposit Scheme.............................................................................................. 39Table 9-Credit Risk Grading Scale ............................................................................................ 48Table 10-Interest Rate of Different Loans ................................................................................. 54Table 11-Foreign Exchange Performance.................................................................................. 60Table 12-Capital Adequacy Ratio.............................................................................................. 61Table 13-Advances to Assets Ratio ........................................................................................... 62Table 14-Gross Non-Performing Assets to Gross Advances Ratio ............................................. 62Table 15-Total Advances to Total Deposits ............................................................................... 62Table 16-Net Profit per Employee............................................................................................. 63Table 17-Operating Income as a % of Working Funds............................................................... 63Table 18-Net profit Margin Ratio .............................................................................................. 64Table 19-Earnings Per Share ..................................................................................................... 64Table 20-Liquid Assets/ Total Assets ........................................................................................ 64Table 21-Net Working Capital to Total Assets Ratio of JBL ..................................................... 65Table 22-Retained Earnings to Total Assets Ratio of JBL ......................................................... 65Table 23-EBIT to Total Assets Ratio of JBL ............................................................................. 66Table 24-Market Value of Equity to Total liabilities Ratio of JBL............................................. 66Table 25-Net Sales to Total Assets Ratio of JBL ....................................................................... 66Table 26-Z-score of JBL ........................................................................................................... 66

List of Table

Janata Bank Limited offers to explore the world of progressive Banking in Bangladesh. It is a stateowned commercial bank and is catering the need of the mass business people. It was corporatized on 15th November 2007. Janata Bank was born with a new concept of purposeful banking sub serving the growing and diversified financial needs of planned economic development of the country.

JANATA Bank Limited (JBL) is the second largest public commercial bank among the others public bank in Bangladesh. The Bank has set up a new standard in financing in the Industrial, Trade, Agriculture and Foreign exchange business. Its various deposit & credit products have also attracted the clients-both corporate and individuals who feel comfort in doing business with the Bank. Realizing the growing significance of marketing in banking sector to exist successfully in todays competitive banking industry, JBL practices its marketing strategies seriously and adopt proper elements of marketing mix. It targets the customer segments analyzing their financial need and offer highly customized products and services to the target customers. JBL offer a reach portfolio of bank products including deposit products, loan and advance products, remittance products, cards, international business products, and other services.

To find out Performance Evaluation of Overall Banking System of Janata Bank Limited I made this report. I try to highlight every activities of different departments (General Banking, Credit Management, and Foreign Exchange Operations).

The first part of this report is about the introduction and how I prepared this report.

The Second part of the report is overview of Janata Bank Limited, Organizational profile, Departments.

The Third part of my report is about overall banking system of Janata Bank Limited.

The fourth part of this report shows the financial performance analysis using CAMEL Model and Z-Score Model.

The final part of this report SWOT Analysis, some Recommendations according to the findings.

Executive Summary

Introduction

Well- educated, dedicated, skilled and enterprising workforce is the sine-qua-non for the progress and development of a service oriented industry like Bank. Banks also play an integral role in society, affecting not only spending by individual consumers, but also the growth of entire industries. The operations of banks are known as one of the most important economic activity in the world. Any activity which requires investments and financial resources undoubtedly requires the involvement of banks and financial institutions (Haghighat and Nasiri, 2003). Thus, banks have the central role in the economy (Fethi & Pasioura, 2010). From very first emergence and inception of modern civilization, Bank plays a pivotal role in case of overall financial and socioeconomic development of any modern country. By the scope of its functions, banks are the key to economic growth of any economy (Rashid, 2010). The economic development of our country mainly depend upon the efficiency of the banking results is so far as, whether the bankers have been able to read the economic situation properly and are successful in selecting the promising industrial sectors seeking import and export assistance to grow. With the rapid changes of time mans are readily depend on banking services in case of handling cash, transferring cash, and also financing in various industrial and business projects. Banks have control over a large part of the supply of money in circulation. Through their influence over the volume of bank money, they can influence in the nature and character of production in any country (Brigham & Houston, 2011).A service oriented industry a bank should believe that customers is all and the king. The government of our country and the central bank i.e., the Bangladesh Bank has decided to extend considerable help in every respect of general banking to concerned people. Like other nationalized and non-nationalized commercial banks the Janata Bank limited serves the nation by providing various modern banking services and products. So as an Internee I thought of having special knowledge on this field of increased importance.

Significance of the Study

The major importance of this study is to provide information about the procedures of transaction made in the bank, handling the customers. It gives the opportunity to be familiar with the real world with the knowledge of overall banking system. It will be useful in identifying the problems and the process of solving them. It helps to use the theoretical knowledge in the practical field, it helps to build the communication skills of student with customer, and it provides the opportunity to know the real world.

Rationale of the Study

Over the last few years the banking world has been undergoing a lot of changes due to deregulation, technological innovations, globalization etc. With the rapid growing competition (due to free market economy) among nationalized, foreign and private commercial banks as to how the banks operates its banking operation and how customer service can be made more attractive, the expectation of the customers has immensely increased. Reciprocating the sentiment, commercial/private banks are trying to elevate their traditional banking service to a better standard, to meet the challenging needs and demands. Side by side these banks have now concentrated their attention towards diversification of their products for better performances and existence. Banking sector in Bangladesh specially nationalized bank is facing challenges from different angles. The recent shocks in the banking sector have exposed the vulnerability of the seemingly resilient financial systems in the country. Almost all commercial banks in Bangladesh today are under great pressure to meet the interests of their stockholders, employees, depositors, borrowers and customers. As the numbers of investors in Dhaka Stock Exchange (DSE) are increasing day by day, a huge numbers of investors of share markets are showing their interest to purchase and sell the share of different commercial banks. But somehow, they are frustrated as the shares of different commercial banks are not showing better performance yet. Therefore, evaluation of banks' financial performance is important for all parties like depositors, bank manager, stockholders, creditors, regulators and educationalist. By considering the above fact, I have taken my internship topic titled Performance Evaluation of Overall Banking System of Janata Bank Limited. The study may help formulating policy regarding the ideas relating to the feelings of the customers and bankers. Furthermore, Janata Bank Ltd. executives who are actually executing the policies undertaken by the top management will have a chance to communicate their feelings and will have the feedback about their dealing with the customers.

Objectives of the Report

The main objectives of the study will be to provide an overview of the Performance Evaluation of Overall Banking System of Janata Bank Limited. However, the objective behind this study is something broader. Objectives of the study are summarized in the following manner.

Specific Objectives: To give an overview of the Janata Bank Ltd. To make a bridge between the theories and practical procedures of the banks day to day

operations. To analyze the performance of the branch as well as Janata Bank Ltd as a whole. To give an idea about financial performance and its measurement techniques. To analyze the financial performance of JBL by using the CAMEL model and Z score analysis. To find out the extent of similarities and dissimilarities in the course of action followed by

Janata Bank Limited. To assess the strength and weakness. To find out problems and suggesting recommendations for further improvement.

Methodology of the Study

Data is value collected through record keeping or pooling, observation, or measuring. It includes texts and Numbers, Figures and Map, Photographs and Picture. The nature of the report is Qualitative and Quantitative Research and the source is primary and secondary. A systematic and scientific methodology always helps in collecting the qualitative and quantitative data. We must consult with various people, booklets, news, newspaper and other source to gain correct data. This report is maintained on the basis of primary as well as secondary sources.

Primary data

Primary source of data are known as the data which are collected through observation and direct contact. They are not derived from any other sources. The primary data are the information collected during the internship period by the observation and involvement. Most of the primary data are collected through the following sources:

Personal involvements in the daily activities of bank. Observations of the bank and its environment.

Secondary data

The secondary data is one which has already been collected by a source other than present investigator. Secondary data include both raw data and published summaries. Documentary

secondary data include written material such as; books, journal articles, newspapers as well as administrative and public records. These types of data are collected through following ways:

Annual report of Janata Bank Limited. Broacher of Janata Bank Limited. Websites. Office files and documents. Periodicals Published by Bangladesh Bank. Different books and newspapers. Review of the related past records.

Analysis Techniques

This report is descriptive in nature which briefly reveals major banking practice arena such as general banking activities, credit management, and foreign exchange operations of Janata Bank Limited. For financial performance analysis, CAMEL Model and Multivariate Discriminate Analysis (MDA) is used, which was developed by Prof. Altman is known as Z score model. For the analysis and interpretation of data some tools like MS-Word, MS- Excel were used.

Limitations

To prepare a report on the topic like this in a short duration is not easy task. From the beginning to end, the study has been conducted with the intention of making it as a complete and truthful one. In preparing this report some problems and limitations have encountered which are as follows: The main constraint of the study was insufficiency of information, which was required for

the study. There are various information the bank employee cannot provide due to security and other corporate obligations.

As the data, in most cases, are not in organized way, the bank failed to provide allinformation.

Due to time limitation, many of the aspects could not be discussed in the present report. Since the bank personnel were very busy, they could not pay enough time. Lack of opportunity to access to internal data. I had to base on secondary data for preparing this report. Legal action related information was not available. Lack of in-depth knowledge and analytical ability for writing such report.

Literature Review

According to Varshney and Sarkar (1971) on his book named Banking Law and Practice the nationalized banks have not been conferred with this privilege of acting as agent of the reserve bank. The nationalized banks has established for the following purposes, paying, receiving, collecting and remitting money, bullion and securities on behalf of any government, undertaking and transacting any other business entrusted by the reserve bank from time to time.

L.R Chowdhury (2010) on his book named A Text Book on Banking describe the main objectives of nationalization of banks was to ensure that the banking systems serves a much wider section of the community by dispensing credit to the poorest and weaker sections of the society and Also to remove the regional disparities and help in development of backward areas and serve better the needs of development of the economy in conformity with national policy and objectives formulated by the government. Evaluation of bank performance is very important for Bankers due to the need to protect the banking operations against continuous risks are due to gambling-incentives related to capital market (Hays et al, 2009).

According to American Bank Association Principles of Banking have direct applicability to a broad range of banking positions - from a Customer Service Representative to a Consumer Lending Manager. Topics covered include: structure and operation of banks as profit-making enterprises, Evolution of the banking system, including laws, regulations and regulators, Operations of banks from managing assets to managing liabilities, Deposit products, services, and account opening requirements, Checks as negotiable instruments, check processing, and other payment systems, Electronic banking services and trends, Lending, including loan types and the lending process . (Principal of Banking, 10ed)

Kannandasan (2007) he has made an attempt to have an insight into the examination of financial health of a watch company in India. To evaluate the financial conditions and performance of a company, this study used the Z-Score model, and finally, it was concluded that the financial health of the company was good and financial viability is also healthy.

According to Debnath (2003) The primarily functions of nationalized banks are the deposit takers and lenders to trade and commerce. Nationalized banks accept deposits withdraw able on demand by cheques or draft etc. they also extend credit to the borrowers in various forms and conduct foreign exchange business. In addition, they provide various ancillary services to the clients. However, nowa-days these banks are also engaged in long, medium and short-term industrial lending, agriculture financing including financing in multifarious developmental activities.

Gupta and Kaur (2008) conducted the study with the main objective to assess the performance of Indian Private Sector Banks on the basis of Camel Model and gave rating to top five and bottom five banks. They ranked 20 old and 10 new private sector banks on the basis of CAMEL model. They considered the financial data for the period of five years i.e., from 2003-07.

Barr et al. (2002 p.19) states that CAMEL rating has become a concise and indispensable tool for examiners and regulators. This rating ensures a banks healthy conditions by

reviewing different aspects of a bank based on variety of information sources such as financial statement, funding sources, macroeconomic data, budget and cash flow.

According to The Banking and Financial Institution Act, 1991 "Banking Company" means anycompany transacting the business of banking in Bangladesh, and includes all new banks and special banks; Explanation. - Any company which is mainly engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause. "Banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise; bills of exchange, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, certificates, participation term certificates, term finance certificates.

Background of Janata Bank Limited

Janata Bank Limited is the 2nd largest state owned commercial bank in Bangladesh. Immediately after the liberation of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed as Janata Bank. The established of Janata Bank was happened under the Bangladesh Bank order 1972. It was incorporated as a public Limited Company on 21, May 2007 vide certificate of incorporation No-C66933 (4425)07 in the early era of privatization. The Bank has taken over the business of Janata Bank at a purchase consideration of Tk. 2593.90 million as a going concern through a vendor agreement signed between the Ministry of Finance of the Peoples Republic of Bangladesh and the Board of Directors on behalf of Janata Bank Limited on 15th November 2007. Janata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000 million (approx. US$ 250 million), paid up capital of Tk. 19140.00 million, reserve of Tk.17976.20 million. The Bank has a total asset of Tk. 586082.98 million as on 31st December 2013. Janata Bank Limited operates through 897 branches including 4 overseas branches at United Arab Emirates. It is linked with 1239 foreign correspondents all over the world. The Bank employees more than 15(fifteen) thousand persons. The Board of Directors is composed of 13 (Thirteen) members headed by a Chairman. The Directors are representatives from both public and private sectors. The Bank is headed by the Chief Executive Officer &Managing Director, who is a reputed banker. The corporate head office is located at Dhaka with 10 (ten) Divisions comprising of 44 Departments. A mid adverse geopolitical economic situation, the management of Janata Bank with its pragmatic business policies has tackled the situation efficiently and fruitfully. In view of creation of employment opportunities Janata Bank Limited has been proved to be the best employment provider in the banking sector. In continuity of this trend, 665 Executive Officers were appointed in the year 2013. A total of 3,371 officers and staffs were appointed in 2011 and 2012. At present, the number of total employees of the bank stands at 15,485. The bank had to spend a considerable amount of money on account of salaries, allowances and other incidental expenses for such a large number of employees. Yet, in this year Janata Bank has strengthened its position further in the banking sector. At the end of 2013, the total assets of the bank stood at BDT 586,083 million which was BDT 511,129 million in the previous year. Net profit of the bank stood at BDT 9,551.39 million in the year 2013 as against BDT 15,280.34 million net losses in the previous year. The deficit of capital of bank was BDT 20,117 million in the year 2012 which has transformed into a surplus of BDT 908 million in the year 2013. As a result capital adequacy ratio rose from 3.70% to 10.27%. As a player of money market JBL is also playing its due role. So, earning profit is not its sole consideration, rather contributing significantly to the national economy ultimately increasing shareholders wealth are its prime objectives. Apart from this, JBLs efforts were relentless and uncompromising in establishing JBL as a high profile bank. JBLs endeavor to establish good governance and best practices for credible and sustainable development was incessant in conducting banking business. Among the state owned commercial banks, Janata Bank Limited has been able to earn the highest chunk of operating profit during the year 2013.

Profile of the JBL at a glance

Table 1-Profile of JBL

Name of Company: Janata Bank LimitedRegistered Office : Janata Bhaban,

110,Motijheel C/A,Dhaka-1000,BangladeshLegal Status : Public Limited CompanyDate of Incorporation : 21 May 2007Date of Commencement of Business : 21 May 2007Banking license obtained from Bangladesh Bank :

31 May 2007

Authorized Capital : BDT 20,000 MillionPaid up Capital : BDT 19,140 MillionFace value per share : BDT 100Shareholding Pattern: 100% Share owned by Government of the

Peoples Republic of BangladeshTax Identification No. : 001-200-2732Vat Registration No. : 9011050160Chairman of the Board of Directors : Professor Dr. Abul BarkatCEO & Managing Director : Mr. S M Aminur RahmanChief Financial Officer (CFO) : Mr. Md. Nurul Alam FCMA, ACACompany Secretary : Mr. Md. Mosaddake-Ul-AlamDomestic NetworkNumber of Branch : 893No. of Urban Branch : 450No. of Rural Branch : 443Number of Divisional office : 10Number of Area Office : 47Number of AD Branch : 57Overseas NetworkNumber of Branch : 04Location of Branches : Abudhabi, Dubai, Al-Ain and Sarjah. UAE.SubsidiariesJanata Capital and Investment Ltd : DhakaJanata Exchange Company srl. : ItalyNumber of Correspondence : 1239Number of Employees : 15485Number of Exchange House : 68Corporate Rating StatusEntity Rating (2012) : A+ in the long run, AR-2 in the short run As

Government owned Bank : AAA in the long run and AR-1 in the short run.

Telex : 675840JBDBJ, 671288 JBHOBJPhone PABX : 9560000, 9566020, 9556245-49.Fax : 88-02-9564644, 9560869E-mail : [email protected] : www. janatabank-bd.comSwift Code : JANB BD DH

Organizations Mission, Vision and Values

Mission:

Janata Bank Limited will be an effective commercial bank by maintaining a stable growth strategy, delivering high quality financial products, providing excellent customer service experienced management team and ensuring good corporate governance in every network.

Vision:

To become the effective largest commercial bank in Bangladesh to support sociodevelopment of the country and to be a leading bank in south Asia.

Values:

Dignity

Growth

Organizations Mission, Vision and Values

Janata Bank Limited will be an effective commercial bank by maintaining a stable growth strategy, delivering high quality financial products, providing excellent customer service

anagement team and ensuring good corporate governance in every

To become the effective largest commercial bank in Bangladesh to support sociodevelopment of the country and to be a leading bank in south Asia.

Values

Professionalism

Diversity

Accountability

Integrity

Dignity

Growth

Page

18

Janata Bank Limited will be an effective commercial bank by maintaining a stable growth strategy, delivering high quality financial products, providing excellent customer service through an

anagement team and ensuring good corporate governance in every step of banking

To become the effective largest commercial bank in Bangladesh to support socio-economic

Accountability

Strategic Objectives of JBL

JBL HaveConcernCommitmentCompetence

JBLs StrengthsNationwide networks, 893 branches

Foreign network, 4 branches and

1239 foreign correspondence

State-owned image

Goodwill

Received globally recognized wards

Strong deposit base No capital shortfall No provision shortfall Skill manpower

Experienced higher level management

Newly recruited talentsFriendly board of directors

JBLs BrandQuality and responsive staffEfficient serviceHigh and sustained growth (deposit advance, import, export, foreign remittance noninterest income and recovery)Good quality loanLow classified loanTimely recoveryBusiness diversificationAttract low cost depositParticipate in capital marketImprove agricultural loan (Disbursement, recovery etc.)High impact of CSRAesthetic infrastructure

JBLs NeedSense of belonging (ownership)

Improve service mentalityHuman touch with clients Proactive, team spirit

Managerial efficiency (GIS of good

customer / borrowers; meeting each within 1

km radius)

Strong cash recovery Strategic thinking More agricultural loan

Broadening of deposit base; reaching all

Automation, on-line banking Need based training More remittance Discipline, chain of command Hygienic bank premises

Avoid intermediary between management

and clients No hidden cost Avoid insurance engineering

Demand estimation of CC loan

Proper security valuation Manager willing to take risk Borrowers preference Disposal through ADR

Synthesis of mass banking and elite

banking

Avoid loan sanctioning bureaucracy

Innovative thinking Free from corruption Aware gender sensitivity

Products and Services of JBL

JBL render both corporate and retail banking services with a strong focus on socio-economic development of the country. The bank typically provides short term working capital loan and limited long term credit exposure. Moreover, JBL offers micro enterprise and special credit as well as rural banking. Under corporate banking services JBL provides trade finance, project finance, syndicate finance. On the other hand, consumer loan, deposit scheme, remittance facilities are provided through retail banking. In 2013, JBL launched its own innovation to remittance payment system at all branches which facilitate Deposit/withdrawal from any branch in this system. Table 2-Products & Services of JBL

1.0 Deposits1.1 Current & Call Depositsa. Current Depositb. Call Depositc. Deposit in Foreign Currencyd. Resident Foreign Currency Deposit e. Deposits in F.C (WES)f. Convertible taka A/C (D)1.2 Savings Bank Depositsa. Savings Bank Depositb. Savings Deposit from Foreign Remittance c. SB Generald. Q-Cash Deposite. Non-Res F.C Depositf. School Banking Deposit1.3 Monthly Scheme Depositsa. Deposit Pension Schemeb. JB Savings Pension Schemec. Janata Bank Deposit Schemed. Medical Deposit Schemee. Education Deposit Schemef. Ghore Ghore Sanchayg. JB Monthly Savings Schemeh. JB Special Deposit Schemei. JB Monthly Amanat Prokalpa1.4 Term Depositsa. Fixed Depositb. JB Double Benefit Schemec. JB Monthly Benefit Schemed. Retirement Savings Schemee. JBL Retirement Savings Scheme f. Continuous Benefit Account1.5 Special Notice Deposita. Special Notice Depositb. Convertible Taka A/C(SND)

2.0 Loans & Advances2.1 Agriculture Loan Programsa. All kinds of Crops Loan, Loan for Cultivationof Sugarcane (mill area), Fisheries & Shrimp,Purchase of Cow/ Buffalo, Livestock, Duck/ Chicken, Cultivation of Banana, Betel Leaf.b. Loan for Shrimp Culture Development c. Loan for Irrigation and AgriculturalEquipmentd. Loan for Salt Production Plant e. Dal, Spices, Oil Seeds & mase2.2 Poverty Alleviation Programa. Diversified Credit Programb. Small Farmers & Landless Laborersc. Development Project(SFDP) d. Swanirvar Credit Schemee. Self Employment Project for TrainedUnemployed Youthf. Self employment Schemeg. NGO Linkage -Lending Through NGOsh. Ghoroa Prokalpa/ Family Based Micro Crediti. Micro Credit Schemej. MSFSCIP2.3 Specialized Loan Programa. Grain Storage Creditb. Credit for Flower Plantation & Garden c. BGSDPd. Credit Program for Goat Rearing e. Credit for Forestry/Horticulture Nursery f. Hybrid Milking Cow Rearing (HYV-Milk Cow)g. Credit Program for Fish Cultivation h. Fish Cultivator/Entrepreneuri. Loan for Handicapped/Disabled People

j. ATDPk. Credit Program for floating Fish Cage Culture

2.4 Rural Credita. Rural Transportationb. Loan for Land Mortgage2.5 Term Loan for Large and Medium Credit Programsa. Dairy, Poultry, Fisheries, Hatchery b. Agro based, Industry/Project Loan c. Syndication Loan2.6 Other Loans & Advancesa. Loan for Cold Storageb. Large & Medium Term Loanc. Leasing Company2.7 Loans for Thrust Sectorsa. Computer Software & Information Technologyb. Electronicsc. Artificial Flower Productiond. Export Oriented Frozen Foodse. Flower Cultivationf. Gift Itemsg. Export Oriented Leather Products h. Export Oriented Jute Goodsi. Jewellery & Diamond Cutting & Polishingj. Oil & Gas Industriesk. Cultivation of Sericulturel. Stuffed Toysm. Textile Industries(Except Readymade Garments)n. Infrastructural Industries (except housing sector)2.8 Export Oriented IndustryTerm/Project Financinga. Agro-products & Agro processing Product b. Light Engineering Productsc. Shoes & Leather Productd. Pharmaceuticals Producte. Software & ICT Productf. Home Textileg. Shipyard loanh. Toiletries product2.9 Micro & Cottage industries loana. Dairy/Goru Mota Taza Koron/ Poutry/ Semi-intensive Shrimp Culture/Fish Culture b. Other micro & Cottage Industries Loanc. Credit for loom (Tat)

2.10 Working Capitala. Credit Program for Agro-based Industry/Projectb. Working Capital for Husking Mill c. Credit program for Preservation of Potatoes in Cold Storaged. Other Working Capitale. Credit Program for Jute Industries2.11 Export Financinga. ECC (HYPO & PLEDGE)b. PACKING CREDITc. Other Export Financed. LTR(FC)e. ECC for Export Oriented Project f. BMRE for Export Oriented Project g. Loan Generalh. Cash Credit (Hypo & Pledge) i. Demand Loan (BBLC)j. Advance Against Cash Subsidy k. PAD (EDF)l. PAD (GMT)2.12 Import Financinga. PAD (Cash)b. LIMc. LTRd. Demand Loan (L.C)2.13 Trade Financinga. Transportb. Brick Fieldc. Work Orderd. BADC/BRTCe. Loan on FDR/Third Party FDR f. Loan on FDR of OTHER BANK g. National Investment Bond, ICB Unit, Insurance Policy, Share, Debenture h. Loan Against Wage Earners Bond i. Food Ministryj. Service Oriented Ind.k. Loan Against DPSl. Loan Against SPSm. Loan Against JBDSn. Loan Against EDSo. Loan Against MDSp. Loan Against CBA -FDRq. Credit Program for Urban Commercial Housingr. Credit Program for Urban Residential House Building

s. Credit Program for Jute Businesst. Commercial Loan for USA aided project u. Loan to Diagnostic Centersv. Loan to Travel Agenciesw. Credit Program for House Repair2.14 Other Credit Programa. Consumer Credit Schemeb. Cyber Cafec. Service Holders Loand. Doctor's Loan Schemee. Women Entrepreneur Development Credit Programf. Special Credit Program for Women Entrepreneursg. Small Business Development Loan Scheme3.0 Financial Services3.1 Inland Remittancea. Demand Draft (DD)b. Telephonic Transfer (TT )c. Mail Transfer (MT )3.2 Foreign Remittancea. Online Speedy Remittanceb. Maintaining NRT Accountc. Foreign M.T.d. Foreign Remittancee. Foreign Demand Draft3.3 Other Financial Servicesa. Pay Orderb. Pay Slipc. Security Deposit Receipt (SDR)4.0 Other Services4.1 Utility Servicesa. Gas Bills Collectionb. Electricity Bills Collectionc. Telephone Bills Collectiond. Water/Sewerage Bills Collection e. Municipal Holding Tax Collection f. Port Bill Collectiong. Land Rent Collectionh. Embarkation Fee Collection4.2 Welfare Servicesa. Payment of Non- Govt. Teachers Salariesb. Payment of Girl Students Scholarship/ Stipend /Upbitti & Primary Student Stipend c. Payment of Army pension/Civil Pension

d. Payment of Widows, Divorcees and Destitute Women Allowancese. Payment of Old-age/ Disabled Allowancesf. Food procurement Billsg. Issuance of Television License4.3 Q-Cash (ATM) Servicesa. Cash withdrawalb. Balance inquiryc. Mini statement of accountsd. point of sale (POS)4.4 Othersa. Locker Serviceb. JB remittance payment system(Deposit/ withdrawal from any branch)c. SMS bankingd. Sale of Lottery Tickete. Sale of Prize Bondf. Sale of Wage Earner Bond (W.E.B) g. Sale of Sanchay Patra (S.P)5.0 Customer Carea. Help Deskb. Inquiry Deskc. Counselingd. Information Desk6.0 Web based Spot casha. Speedy Remittance Cellb. Western Unionc. IMEd. Placid N.K. Corporatione. X-Press Moneyf. NBL Quick-Payg. Prabhu Group Inch. Trans Fast Remtti. Ria Financial Servicej. Marchentradek. EZ Remittancel. Samba Financial Groupm. Money Gram6.1 Internet Bankinga. Accounts Details Information b. Customer Statementc. Cheque Status

Management of Janata Bank Ltd:

The Board of Directors is the top of Management, which is constituted in terms of the

Bangladesh Banks Nationalization Order 1972. Management hierarchy of Janata Bank Ltd. is

given blow:

Board of Directors (BOD)

Managing Director (MD)

Deputy Managing Director (DMD)

General Manager (GM)

Deputy General Manager (DGM)

Assistant General Manager (AGM)

Senior Principal Officer (SPO)

Principal Officer (PO)

Senior Officer

Officer

Figure: Management Hierarchy

Human Resources of JBL

As Human Resource Development is one of the key competencies to enable individuals in any organizations to perform current and future jobs through planned learning activities, JBL has integrated the use of training and development efforts to improve quality and capability of executives. This is materialized through a well-designed Human Resource Management and development program. The Board of Directors of the bank underlines the need for improving the skill and capability of human resource to ensure maximum quality output from minimum resources. As an employer, JBL ensures equal opportunities for both male and female employees. JBL is strictly following female quota in recruiting manpower. As a result the number of female employees is increasing significantly.

The following table exhibits the comparative number of male and female employees by category in the year 2013:

Category 2013Male Female Total

CEO& Managing Director 1 0 1Deputy Managing Director 5 0 5General Manager 21 2 23Deputy General Manager 110 4 114Assistant General Manager 256 31 287First Assistant General Manager 575 88 663Senior Executive Officer 927 198 1125Executive Officer 3046 534 3580Assistant Executive Officer 3166 362 3528Assistant Executive Officer (Teller) 2198 212 2410Assistant Officer Grade-1 479 13 492Assistant Officer Grade-2 439 17 456Support Staff Category-1 108 0 108Support Staff Category-2 263 5 269

Total 13968 1517 15485

Sustainable Banking of JBL

Bank sustainability means building a successful business today and delivering value over the long term. Sustainability is is a long term journey. Along the way, organizations need to set goals, measure performance, and integrate a sustainable strategy into their core planning. A sustainable economy should combine long term profitability with ethical behavior, social justice, and environmental care. This means that when companies or organizations consider sustainability and integrate it into how to operate; they must consider four key areas of their performance and impacts: Economic, Environmental, Social and Human Rights. According to GRIs(Global Reporting Initiative) Sustainability Reporting Framework, JBL is reporting on sustainable banking system that enables it to measure, understand and communicate this information. JBLs mission is to make:

Sustainable long term financial performance Sustainable and responsible financial services Strongly contribute in socioeconomic development To create good governance, regulation and stakeholder engagement To help in building green environment A positive and consistent employee experience

Economic contribution:Creating wealth for the communities in which JBL operate JBLs performance in import and export was satisfactory. Total import and export business handled during 2013 were BDT 176,671 million and BDT 153,252 million respectively. The import business reduced by 6.16 percent over the previous year because Bangladesh achieved self sufficiency in food grains. JBLs guarantee business in 2013 was BDT 12,581.5 million. In 2013, the amount of foreign remittance sent by Bangladeshi workers from abroad through JBL was BDT 103,982 million. JBL has been playing significant role in strengthening the economic base of the country. The percentage of JBLs foreign remittance to National Foreign Remittance is 9.61%.

Financial inclusion:

Access to finance by the poor and vulnerable groups is a prerequisite for poverty reduction and social cohesion. This has to become an integral part of our efforts to promote inclusive growth. JBL is dedicated to serve financial services at an affordable cost to the vast sections of the disadvantaged and low-income groups. The various financial services include credits, savings, insurance and payments as well as remittance facilities. The objective of financial inclusion is to extend the scope of activities of the organized financial system to include people with low incomes within its ambit. JBLs policies aim at increasing the income and employment opportunities on the one hand and on the other; it tries to finance programmes which are capable of making the growth more inclusive.

In year 2013 -No. of deposit A/Cs is 6,425,804 in 2013, where in 2012 it was 6,246,858 Total deposits in 2013 are BDT 478,535.57 million where in 2012 it was BDT 409,767.01 million. No. of Loans and Advances A/Cs was 742,655 in 2012 where in 2013 it is 759,835 Total Advance in 2013 is BDT 285,747.65 million where in 2012 it was BDT 305,339.57 million. No. of Branches was 888 in 2012 where in 2013 it is 897. The amount of agricultural loans disbursed in 2013 is BDT 12,694.30 million and No. of beneficiaries is 433,838. 1,873,630 A/Cs has been opened with 10 taka in 2013 to help farmers to availopportunities of doing their works smoothly.In retail customer department-3 (RCD-3)/retail customer department-4 (RCD-4), under agriculture and rural credit program no. of Borrowers covered 5,46,369 and BDT 17,652.67 million disbursed, No. of borrowers receiving crop loan is 325,908; No. of borrowers in Micro-Credit Programs is 2410 and loan disbursed BDT 53.5 million.

Environmental contribution:

As a part of green banking, JBL is providing support to the activities that are not harmful to the environment. It has established a separate green banking unit and various measures have been adopted to ensure green banking. Among others, green financing, creating awareness among employees for efficient use of water, electricity and paper, giving preference to preservation of ecosystem while financing commercial projects and reuse of equipments are the some initiatives for turning JBL as a green bank. Initiative for green banking is the key to shaping future. JBL works together with central bank namely Bangladesh Bank is effectively working to sustain and keep our planet green. Table 3-Environmental Contribution

Promoting Sustainable Green Finance No. of Projects Funds Disbursed up to 2013 (BDT in millions )

Amount financed in plants having ETP 6 806.38

Amount financed to solar panel/renewable energy plants

31 2.39

Amount financed to bio fertilizer/ bio gas plants

21 1.67

Amount financed to HHK project 4 771.08

Amount financed to other green projects (zigzag bricks, vermy compost)

66 100.90

Total sustainable green finance 128 1682.42

Social contribution:Building a sustainable society As one of the leading state-owned commercial banks in Bangladesh, JBL with its 897 branches and 15,485 employees have also realized its responsibilities to the society and are contributing to the amelioration of the social life of the destitute people, infra-structure, environment etc. There is no doubt, that through our day-to-day business operations JBL is adding values to the society and the economy. Ultimate goal of CSR activities of JBL is Building a Sustainable Society. The budget for performing CSR activities is provided from the profit earned by the bank each year. Since its inception, the break-down of the budgets devoted to the philanthropic initiatives up to 2013 are as follows: Table 4-Social contribution

Year Budget( BDT in millions) Utilization of Fund(BDT in millions )

2009 30.00 17.07

2010 70.00 61.28

2011 100.00 68.80

2012 150.00 113.38

2013 310.00 292.28

In 2013 JBL rendered BDT 79.53 million to financially deprived meritorious and those who have great inclination to be benefited with education and research. JBL also contributed in Health care (BDT 38.06 million); Poverty Reduction and Rehabilitation (BDT 94.38 million); Natural calamity (BDT 2.39 million); Preservation of History; Culture, Tradition and Sports (BDT 39.76 million); Environment Protection, Expansion of Information Technology (BDT 20.31 million); Invention (BDT 7.85 million). Besides JBL also disbursed interest free loans to the marginal agriculturists and the poor from the clutch of loan (BDT 10.00 million).

Human rights:

JBL is committed to upholding the principles of the Constitution of the Peoples Republic of Bangladesh, the associated Bill of Rights and labor legislation in our national operations. JBLs values and the code of ethics are an extension of this commitment. An internally developed appraisal system has been implemented for all other financial product types within CIB. JBL distributes Right to know information instruction circular in line with the Right to Information Act-2009 introduced by the government of Bangladesh in order to ensure free flow of information and peoples right to know information. In order to protect customer interest complaints boxes have been installed in all branches and offices of JBL. If any complain of customer is found steps are immediately taken to address the complaints with due consideration. A complaint cell has already been setup. JBL has also adopted the concept

of Help desk and already setup help desk in all its 897 branches. In addition another Help Desk of the same nature has been set up in the 8th floor of the head office to handle remittance related complains. As per regularity directives, citizen charters have been pegged against the wall at the entrance of Head Office as well as in all other branches too. Customers may ensure their access to necessary facilities through it.

Development of human resources and decent works

Development of human resources is one of the prerequisite of JBL for attaining the targets. To do so, JBL recruited 665 officers in 2013 which is 3.12 times higher than in 2012 (213 persons). JBTI conducted 30 training courses directly and another 84 courses conducted through other training institutes. JBL has 2 female GM, 4 DGM, 31 AGM, 88 FAGM, 198 SEO, 534 SO, and 362 AEO. Total 2,790 officers have been trained for development in IT and On-line.

Key Milestone of JBL

1972: Commencement of banking operation. 1976: Inaugurate 1st overseas branch in UAE. 1990: Launching 1st computer in JBL. 1999: 1st cash dividend paid. 2000: Deposit crossed BDT 100,000 million. 2001-2005, 2011: JBL awarded the bank of the year in Bangladesh by London based financial times group. 2002: Incorporation Janata Exchange Company Srl, Italy. 2002: Inaugurate Janata Bank Software (JB Soft) 2002: Incorporate of ATM service.

2003: JBL crossed BDT 100,000 million of loans & advances. 2004: Received Asian Banking Award on financing program for Women Entrepreneurship from Asian Bankers Association (ABA) & Bank Marketing Association of the Philippines (BMAP)

2005: Received Asian Banking Awards on credit scheme for handicapped people from AsianBankers Association (ABA) & Bank Marketing Association of the Philippines (BMAP) 2006-2009: Received World Best Bank Award from New York based financial magazine global finance.

2007: Incorporation and commencement of business as JBL.

2008: Commencement of NRB branch. 2009: Launching of speedy remittance service, Issuance of 1st bonus share in JBL. 2010: Incorporation & commencement of Janata Capital & Investment Ltd. 2010: Launching of BACH operation.

2011-2012: Received ICMAB Best Corporate Award from Institute of Cost and ManagementAccountants of Bangladesh (ICMAB).

2011: Launching of JBL CIB online system.

2011: Launching BEFTN & EFT operation. 2011: Inauguration of online banking. 2011: Landmark of BDT 100,000 million of foreign remittance.2011-2013: JBL achieved highest operating profit among SCBs. 2012: JBL at the top in CSR activities among the SCBs. 2012: Landmark of BDT 400,000 million deposit. 2012-2013: JBL Rewarded Wholesale Banking Awards &Retail Banking Awards& Bank of the year Award by Asian Banking and Finance (CMG) Singapore. 2013: Full automation of JBL branches. 2012-2013: JBL Received Performance Excellence Award from Citi Bank N.A. 2013: Inauguration of online deposit, payment & remittance system. 2013: Enhancement of paid up capital to BDT 19,140 million 2013: Issuance of highest right share in JBL history. 2013: JBL achieved highest net profit among the SCBs & PCBs.

Five years key financial information

(BDT in millions unless stated otherwise)

Authorized capital 20000.00 20000.00 20000.00 20000.00 20000.00Paid-up capital 19140.00 11000.00 8125.00 5000.00 5000.00Reserve fund and Surplus

17976.20 6476.66 25944.20 15390.32 9924.74

Total Shareholders Equity

37116.20 17476.66 34069.20 20390.32 14924.74

Total Assets 586082.98 511129.41 446111.42 345234.00 294727.00Current liabilities 275,583.75 219,102.72 199,259.27 167,016.15 153,319.69Long-term liabilities 273,483.04 274,821.01 212,782.95 157,827.53 126,482.57Interest income 36,189.68 34,239.12 26,266.12 19,027.54 14,867.96Investment income 13,736.50 7811.43 6,109.43 6,956.05 5,602.31Non-interest income 5,145.67 7465.08 8259.58 4630.33 3603.03Total Income 55,071.85 49,515.63 40635.53 30613.92 24074.10Net profit after tax 9551.39 (15280.34) 4444.91 4907.97 2804.25Import 176671.00 188284.00 197285.00 183744.00 118525.00Export 153252.00 156525.00 153758.00 118515.00 88653.00Foreign Remittance 103982.00 100089.00 72285.00 52640.00 56190.00ROA 1.81% (2.51%) 1.99% 2.27% 1.92%ROE 30.09% (49.74%) 16.32% 27.80% 23.38%ROI 9.39% 8.01% 7.72% 4.89% 4.13%Net profit per employee

0.62 (1.01) 0.30 0.38 0.21

Efficiency ratio 15.86% 15.11% 17.54% 21.61% 21.26%Debt-equity ratio(times)

13.13 24.09 10.62 14.05 16.49

Gross profit ratio 44.43% 56.39% 57.74% 68.17% 71.52%Net profit ratio 23.90% 38.66% 13.70% 21.83% 15.81%EPS 86.31 138.91 43.46 98.16 73.37Dividend:CashBonus

10-

--

10-

102875

10-

Current ratio 1.04 1.02 1.06 1.03 0.98Capital Adequacy ratio

10.27% 3.70% 10.20% 9.19% 13.81%

Statutory liquidity ratio 44.39% 33.24% 33.47% 27.72% 40.84%

Number of Shares 191.40 110 81.25 50 50Number of Branches 897 888 873 861 851Number of Employees 15485 15071 15020 12826 13122Table 5-Five years key financial information

General Banking of JBLGeneral banking is the starting point of all the banking operations. It is the department, whichprovides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank drafts and pay orders etc. Because bank is a financial organization, so as a part of service organization this department should satisfy to their client with the best services. Since bank is confined to provide the service every day, general banking is also known as retail banking.The following sections are performing under this department of JBL:

1. Account Opening Section2. Deposit Section3. Cash Section4. Remittance Section5. Bills and Clearing Section6. Accounts Section7. Dispatch Section.

Account Opening SectionThe relationship between banker and customers begins with the opening of an account by thecustomer. Opening accounts binds the banker and customers into contractual relationship. But selection of customer for opening an account is very crucial for a bank. In fact, fraud and forgery for all kinds start by opening an account. So, bank should take extreme caution in this section.

Documents needed for opening an account:

The following documents duly completed shall be obtained from the customer at the time ofopening different types of accounts as applicable:

a) Individual/ joint: Account opening form as applicable duly filled in. Present and permanent address Occupation and specimen Signature

Two photographs duly attested by introducer. Nominee Form (if nomination given by the account holder).Introducer name, address and account number Initial deposit that varies depending on the type of account National certificate and passport

b) Proprietorship Firm: Account Opening Form.Specimen Signature Card. Copy of Trade License Two photographs duly attested by introducer. Proprietorship Rubber Stamp against all signatures of the proprietor. Tax certificate.

c) Partnership Concern: Account Opening Form. Specimen Signature Card. Copy of Trade License Two photographs of each partner duly attested by introducer. Partnership Rubber Stamp against all signatures of partners operating the accounts. Partnership letter. Partnership deed.

d) Private Limited Company: Account Opening Form. Specimen Signature Card. Copy of Trade License. Copy of Memorandum and Articles of Association duly attested by the Managing Director/ Chairman of the Co. Certificate of Incorporation. List of Director as per return of Joint Stock Company with signature. Resolution of the Board for opening account with the bank. Photographs of each of the authorized signatories.

e) Public Limited Company: Account Opening Form. Copy of Memorandum and Articles of Association. Certificate of commencement of business. List of Directors as per returns of Joint Stock Company with their signature.Resolution of the Board for opening account with the Bank. Certification of incorporation. Specimen Signature Card. Copy of Trade License. Photograph of Directors and account operators other than Director.Certified

f) Clubs/ Association/ Society etc. (Non-Trading Concerns): Account opening Form for current account or SB accounts. Specimen Signature Card. Certified copy of Bye laws/ constitution of the organization. List of the Executives of Managing Committee with their signature and present and permanent address. Resolution of the Committee for opening account with the bank. 2 Photographs of each operator of the account.

g) Corporation/ Autonomous Bodies/ Govt. Organization: Account Opening Form as applicable. Specimen Signature Card. Copy of the Act or Ordinance Showing authority to open account. Letter from the authorized persons in absence of the Board. Account Of Constituted Attorney Account Opening Form (As applicable)

Specimen Signature Card Power of Attorney

Account Opening Regulations & Precautions

a) Know your customer:The objective of knowing a customer is to have a fair idea about the identity, financial resources, and general information about the customer at the time when the relationship is being established. A banker must have proper following information about the customer.

b) Account name:Enter complete name as mentioned in original National ID card/ valid passport/ genuine driving license of other valid business documents. Regarding this field highest caution must be measured because in editing an accounts information all other fields can be edited/ rectified but not account name. So all photocopies of documents should be accepted only after verifying the original copies. Now-a-days, all of Bangladesh nationalities are available with a National voter ID card. So in terms of personal accounts, account name as well as parents name have to be according to that National ID card.But for company/ business/ corporate account, proper business documents such as valid/ renewed trade license, TIN, VAT registration thus like documents are cross checked for naming of the account.Nature of business/ profession: - if the customer is of salaried class, employer name have to be entered. If the customer is a businessman/ trader/ sole proprietor, the business name should be entered. For example Rock Star restaurant etc. customers title/ position and full address of the business/ employer should also be entered. Address with P. O. BOX in not acceptable. Similarly remarks like private service, business are not acceptable. Rather have to specify what type of company/ business the customer is associated with. For example, Manager lighting palace

c) Address:Enter the complete business/ residential address. Within the brackets you may also provide prominent addresses/ identifiable landmarks for ease of physically locating the address. Once an address has been entered the authority should send an account confirmation letter to confirm the accuracy of the address. This letter is in fact a formal approach to verify the address only, yet it mentions the account number and a formal recognition as a valued client.

d) Contact numbers:Have to enter landline (if any) numbers of residence / office; personal cell number, fax number and e-mail address (if available). The band authority may verify these numbers by giving the customers a courtesy call or by sending him an associate e-mail.

e) Other/secondary/mailing address:Some customer may volunteer their parents or siblings addresses as second home address ora mailing address other than a permanent address.

f) Nominee:It is mandatory field to fill up. Behind the nominee picture nominee sign is a must and should be attested by the account holder as well. After the death of the account holder only the nominee can claim the account possession. But yet if the account holder has no one to allow as nominee or if not willing to mention any one, then an application regarding this matter must be addressed to the

manager. In such circumstances if successors claim the possession of the account after the death of the account holder, sum bellow 15000 can be allocated against commissioner certificate and sum above 15,000 will be honored only against succession certificate from the court.

g) Specimen signature card:This card contains a photograph of the account holder on the top left. Specimen signature of the account holder will be on the right side of a box and on the left, the banker will sign along with a seal the two signatures are accepted. The banker should cross block the two specimen signature as well.If the account holder cannot provide a signature his/her thumb mark will do. But it shouldmention whether the thumb mark is of right hand (RHT) or left (LHT). In this regard any bearer check will never be allowed and only the account holder will be allowed to make check transaction by providing thumb nark in front of the band officer.

h) Special instructions :Clear-cut special instruction is a must part to fill up. The bank could be instructed to honor a check signed by a single signatory even against a joint account; in that case the special instruction would be like either or survivor. However, if any special instruction has not been obtained from customer, the customer has to be asked for it and the specified column must be cancelled by drawing a line. It is to note that this column must not be left blank in any circumstances.

i) Safety measure in account opening:If someone is willing to do any fraud, he /she will start with account opening. So the banker will have to be in peak of caution in verifying all the data and document during opening of account. This is to keep in mind that against any future forgery at least this account opening procedure must gain a clean chart as well as the banker himself.

Special types of Account

A contractual relationship is created between the Banker and customer by opening an account. Basically a person whose age is 18 years or more can be competent to open an account with the bank. But there is some special types of account holder specified below:

a) MinorAccording to the law of Bangladesh, a person who has not competed 18 years of age is a minor. A minor is not capable of entering into a valid contract. A minor cannot open any account or operates it until he completes 21 years. The bank records the date of birth of the minor while opening an account. A Banker should be very careful in dealing with a minor. If an overdraft or advance is granted to a minor even by mistake or unintentionally, the Banker has no legal remedy to recover the amount from the minor.

b) Married womenA married woman is competent to enter into a valid contract. The Banker may therefore open an account in the name of a married woman. In case of a debt taken by the married woman her husband shall not be liable. But if the wife works as an agent of his husband, then the husband has to be liable for his wife's debt. While granting loan to a married woman the Banker should

therefore examine her owns assets and ensures that the assets are sufficient to cover the amount of loan.

c) Illiterate personIlliterate person cannot sign their names and hence the Banker takes their thumb impression as a substitute for signature and also a copy of their recent photograph. An approved witness should attest the application form and the photograph.

d) Blind personA blind person can open account and the procedure would be the same as illiterate persons. Inboth cases the terms and conditions of opening account should have to be read infant of them and if they agree with it only them the account can be opened.

e) Deaf and DumbDeaf and Dumb can open account but the respective Banker should have to become careful about the background and character of the person.

f) Mad and LunaticMad and Lunatic person cannot open a Bank Account.

Closing of Bank Account

The relationship between a Banker and his customer is a contractual one and may be terminated by either of them by giving notice of his intention to the other person. The rights and obligation of a Banker in this regard is as follows:

If a customer directs the Banker to close his account. On receipt of the notice of the death of a customer If a Banker receives a notice regarding the insanity of his customer. On receipt of a Garnishee order from the court. If the central bank wants to close any one's account. If the account did not transected for a long time.

Deposit SectionThe function of the deposit section is very important. It is fully computerized. The Officer of the deposit section maintains account number of all the customers of the bank. They are useddifferent code number for different account. By this section a depositor can know what is thepresent position of his/her account. The officer makes three types of transactions such as cash, clearing and transfer. This section perform the following task

Post all kind of transaction. Provide on demand report. Cheque maintenance. Preparation of day transaction position. Preparation of closing monthly transaction.

A customer of JBL can open different types of accounts through this department such as:a) Current Deposit (CD) Account.b) Saving Bank (SB) Account.

c) Short Term Deposit (STD) Account.d) Fixed Deposit Receipt (FDR) Account.e) Janata Bank Deposit Scheme (JBDS)f) Janata Bank Monthly Saving Scheme (JBMSS)g) Education Deposit Scheme (EDS)h) Medical Deposit Scheme (MDS)i) Deposit Pension Scheme (DPS)

a) Current Deposit (CD) Account:Current Deposit account is an account, which is generally opened by business people for theirconvenience. A current account is a running and active account, which may be operated upon any number of times during a working day.Characteristics:

There is no restriction on the number & amount withdrawals. It does not allow any interest on this account Opening Amount/ Initial Deposit Tk. 500 Service Charge (yearly) Tk. 100 Minimum Balance Requirement Tk. 5000

Current a/c may be individual, joint / partnership or can be formed any name. It provides the following facilities:

Overdraft facility. Other facilities like collection of checks transfer of money, rendering agency and general utility services.

b) Savings Bank (SB) Account:This deposit is intended primarily for small-scale savers. The main object of this account ispromotion of thrift. Savings account is meant for those who want to save a certain amount oftheir income and earn interest on that for future needs. All features are more or less like that of CD a/c except for some restriction that is imposed by the bank. Number of withdrawals over a period of time is limited. The withdrawing amount is not to exceed 25% of the total balance. This A/C mainly opens a person name.Characteristics:

Initial deposit requires opening a savings account is TK.500. Minimum balance of TK. 500 should maintain in this account. Interest rate is5.5% One cannot withdraw money not more than two times in a week. To withdraw more than Tk20000 seven days notice is required. Service charge is not fixed.

c) Short Term Deposit (STD):Deposits under this category is withdraw able at a minimum of 7 (seven) days notice.Withdrawal from the account shall be allowed on the following manner:

If cheque book is issued, withdrawal by cheque shall be allowed against 7 (seven) days notice.

If no cheque book against the account is issued with drawl may be allowed as per written instruction of the client either by pay order/Demand Draft or through transfer to his /her current account with the branch. If any account is operated like Current Account, the customer shall be advised to open a Current Account instead of short term Account. Minimum balance requirement as fixed by Head Office from time to time shall be in force.

d) Fixed deposit receipt (FDR) account:Fixed Deposit shall be opened a fixed period, which is specific at the time of making deposit,varying from 3 months to 3 years & payable at a fixed date of maturity. At a time the sameperson is allowed to open more than one FD A/C in his own name. Every FD Account is treated as a separate contract.Characteristics:

Amount of taka fixed Time fixed Rate of interest fixed Photo & introduction not require Single transaction A/CSecurity A/C Nominee facility Renewal facility Not transferable Payment may be cash or collection Not negotiable

Fixed Deposit Interest Rate-Duration Rate

1/2 month duration[at least tk 10 crore] 9.50

From 3 month to 6 month 10.50

From 6 month to 1 year 11.00

From 1 year to 2 year 11.50

Table 6-Fixed Deposit Interest Rate

e) Janata Bank Deposit Scheme (JBDS):Special advantage with this scheme is that after the scheduled period the client can withdraw the full amount or can draw pension on monthly basis. Besides the client can open account in his name in any branch.Procedure for operation of Janata Bank Deposit Scheme (JBDS):

The applicant should be of minimum 18 years age and Bangladeshi national. The account holder can appoint one or more nominees. On the death of the account holder his / her nominee can withdraw the whole amount of money.

The account holder can change or cancel his nominee through a written notice. On the death of the account holder, the nominees will be entitled to withdraw the deposit according to the instruction of the account holder. The account becomes inoperable on the death of the account holder. The account under this scheme should be opened within the 10th day of any month against deposit of the first installment in cash.

Monthly installment: TK.500, 1000,2000,5000,10000,20000Tenure: 10 Years.The monthly installment must be paid by the 10th day of every month.In case of delay a fine @TK. 2 per day of defaulted installment will be charged and the fine must be paid with the installment.

Total Amount=Principal amount + Interest + Bonus amount

f) Janata Bank Monthly Savings Scheme (JBMSS):This is now very much popular to all classes of clients. Any person having Bangladesh and age limit above 18 can open this scheme.

Period Interest rateFor 2 years 10%For 4 years 9%For 6 years 8.5%

Table 7-Monthly Savings Schemes

Monthly installment may be TK500, 1000, 2000, 5000,10000,20000,25000. Installment must be deposited within first 10 days of month.

g) Education Deposit Scheme (EDS):Client can nominate their children and open not more than three accounts. Procedure foroperation of Education Saving Scheme:

The applicant should be of minimum 18 years age and Bangladeshi national. Monthly installment: TK.500, 1000, 2000,3000,4000,5000 and so on. The monthly installment must be paid by the 10th day of every month. In case of delay a fine @ TK. 2 per day of defaulted installment will be charged and the fine must be paid with the installment. The account under this scheme should be opened within the 10th day of any month against deposit of the first installment in cash.

Features of the Education Deposit Scheme (EDS) account: It may be 4 years, 6 years,8 years& 10years. Installments are TK.1000, 2000,3000,4000&5000 18 years age, being of sound mind, and a Bangladeshi national.

The money will be paid out on maturity according to the table above, but Tax / Levy/ Excise and other charges as applicable will be adjusted from the amount.

h) Medical Deposit Scheme (MDS):The applicants / depositors should be of minimum 18 years age, being of sound mind, and aBangladeshi national. The deposit under SBDS will be affected after expiry of each period as per the chart provided below:

Monthly Installment Quantum(MIQ) TK.

Money at the end of 5 years period. TK.

500 382251000 754252000 1499003000 2243504000 2987995000 3732496000 4477007000 5221498000 5965999000 671089

10000 745898Table 8-Medical Deposit Scheme

The money will be paid out on maturity according to the table above, but Tax / Levy/ Excise and other charges as applicable will be adjusted from the amount.

i) Deposit pension scheme:Deposit pension scheme is familiar now-a-days. Main features of this scheme are as follows:

Only Bangladeshi who are above 18 can open this scheme Duration of this scheme is 10 to 20 years Installment must be paid within first 10 days of month Interest rate is 15%

Cash Section

Cash department is the most vital and sensitive organ of the branch as it deals with all kinds of cash transactions. Cash section is directly related to the customer.The following activities performed in this section:

Cash Receipt Section

The cash receipts procedure, summarized below: Pay-in-slip or credit voucher are given to the cash counter for depositing cash. Cash deposit section checks the title if account, its number,amount in words and figures in the pay-in-slip or credit voucher. Cash receiving officer after receiving the cash giving records/denomination of the currency on the back of the voucher shall enter the particulars of the voucher in the cash receiving book under progressive serial number &

puts his signature putting the date stamp both on counter foil & pay-in-slip voucher. Then he will pass it on to the officer- in-charge of cash section for his signature along with the register.

The officer will then detach pay-in-slip from the counter foil and return it to the receiving officer along with the register. The officer sends the pay-in-slip/ credit voucher to the deposit section in case of paying-slips and credit vouchers to the respective section to which it relates. Cashier and cash-in-charge puts signature on the book at time of closing cash.

Cash Payment Section

Generally, Cheques, D.D, T.T, M.T and Pay Order etc. are received from customer andinstitutions. The formalities are given below:

The instrument is checked for any discrepancy, posting and cancellation. Specimen signature of cancellation officer should be available. Cash is counted and the denominations of notes are written on the reverse of the instrument. Cash is paid to the bearer of the instrument. Particulars of the instruments are entered in paying cash book. Paid instruments are kept with the paying officer.

Posting and Cancellation of Cheque

At the time of posting of cheques, the cheque is examined carefully. Attention on the following more aspects are given:

Whether the account had desired amount of money or not. Prefectures of serial number of the cheques.

After careful examination, the drawing amount of cheque was entered in the ledger.

Cheque Dishonored by a Banker

If a cheque is dishonored the Banker return it to the depositor. The statutory duty of a bank is to honor his customer's but it is dishonored in the following circumstances:

If the amount mentioned in the cheque is greater than that of deposit. If the cheque is past dated or a stole cheque. If the cheque contains an apparent material alteration, which is not properly mentioned by the drawer. If the signature of the drawer is a forged one or does not tally with his specimen signature. On receipts of reliable information about the death of the customer. If a debtor commits an act of insolvency as defined in the insolvency law. If the cheque is not submitted during the banking hour. If the Banker comes to know about the defective title of the party.

Remittance SectionRemittances of funds are one of the most importance aspects of commercial banks in rendering services to its customers. Among various services rendered by a commercial bank to its customers, remittance facilities are very well known and popular. In general there are two types of bank remittance. They are:

1. Inward Remittance2. Out ward Remittance

The main instruments used by Branch for remittance of funds are:a) Pay Order (PO)b) Demand Draft (DD)c) Telegraphic Transfer (TT)d) Mail Transfer (MT)

a) Pay Order (PO):The pay order is a document which instructs a bank to pay a certain sum to a third party. Suchorders are normally acknowledged by the bank which provides a guarantee that the payment will be made. Only the branch of the bank that has issued will make the payment of pay order.The procedures for issuing a Pay Order are as follows:

Deposit money by the customer along with application form. The deposit may be cheque or cash. Commission is charged by the issuing branch. Give necessary entry in the bills payable (Pay Order) register where payee's name, date, PO no, etc is mentioned. Preparing the instrument. After it has been scrutinized & approved by higher authority, the instrument is delivered to customer. Signature of customer is taken on the counterpart.

Accounting Entries for PO

By cash:Cash A/C Debit.Bills payable (PO) A/C Credit.Income on commission A/C Credit.

By account:Customer's A/C Debit.Bills payable (PO) A/C Credit.Income on commission A/C Credit.

By transfer:JBL General/ other Dept Clients A/C Debit.Bills payable (PO) A/C Credit.Income on commission A/C Credit.

Settlement of a PO:When PO submitted by collecting bank through clearing house, the issuing bank gives payment.Bills payable (PO) A/C Debit.JBL General A/C Credit.Cancellation of a Pay Order:If a buyer wants to cancel it, he should submit a letter of instrument in this regard and also return the instrument.Bills payable (PO) Debit.Customer A/C Credit.

b) Demand Draft (DD)Demand draft is a negotiable instrument issued by a particular branch of a bank containing anorder to another branch of the same bank to pay a fixed sum of money to a purchased by forhimself or order on demand.This instrument can be purchased by for himself or for beneficiary and can be handed over to the purchaser. The delivery to the beneficiary bank issues drafts for a nominal commission. The commission depends upon the amount to be transmitted. Janata Bank charges the commission on D.D minimum charge is Tk. 15.The procedures for issuing a DD are as follows:

DD application from filled in and money deposited by the customer. Necessary entries are given to a register name DD OUT- concern (drawn on) branch. A number, which is taken from this register, is known as "Controlling number". An "Account payee only" crossed instrument given. Payment is made by ordered branch. Before payment the branch confirmed with sent advice and checks the test code. Commission is charged.

Accounting Entries for DDCash/Customer's A/C Debit.JBL General A/C (Drawn on Branch) Credit.Income on commission A/C Credit.

After giving these entries an Inter-Bank Credit Advice (IBCA) is prepared which contains thecontrolling number, depicting that the branch is credited to whom it is issued. An IBCA implies the following entries:

JBL General A/C Issuing Branch Debit.Drawn on Branch Credit.

DD Cancellation:To cancel an issued DD, the client has to submit an application. Issuing branch then sends anInter Branch Debit Advice (IBDA) to the drawn branch against previously issued IBCA. After that the following entries are given:JBL A/C drawn on branch Debit.Customer's A/C Credit.

c) Telegraphic Transfer (TT)Telegraphic Transfer is quicker than a transfer of amount by DD. TT is the most rapid andconvening but expensive method. Telephone, Telex, Fax is different mode of TT. If an applicant wants to remit the amount urgently to the payee is another city or district he/she may request the Banker to send it by TT. The branch generally recovers from the telex charge in additional to usual service charges.

Procedures for Issuing of TT: Application by customer along with money given. In receipt of money a cash memo is given to the customer containing TT serial number (Customer informs this number to the awaiting party in the other branch.) Tested message is prepared, where TT serial no and the name of the concern party to whom the money will be credited is mentioned. Commission is charged.

Accounting Entries for TTCash A/C Customer's A/C Debit.JBL General A/C (Corporate Branch) Credit.

Procedures for the incoming TT: After receiving the message, it is authenticated by test. TT Serial number is verified by the "TT in-Concern branch" register.

Accounting EntriesJBL General A/C (Corporate Branch) Debit.Customer's A/C Credit.

d) Mail Transfer (MT)When a customer requests the bank to transfer his money from this bank to any other bank or the branch of the same other bank, the first he has to do is to fill an application form. Then one branch request to another branch to pay specified amount of money to the specified payee though Mail.

Bills and Clearing Section"The process by which cheques exchanged between the collecting and paying bank and theensuring financial settlement is called clearing"Clearing department deals with the cheques, drafts and other instrument and its collection andpayment process. Clearing are two types. They are:-

1. Inward Bills for Collection (IBC)2. Outward Bills for Collection (OBC)

1. Inward Bills for Collection (IBC)When a particular branch receive instrument, which are on themselves and sent by other member bank for collection is treated as IBC. This branch is known as paying branch.

2. Outward Bills for Collection (OBC)When a particular branch receives instrument drawn on the other bank within the clearing zone and sends those instrument for collection through the clearing arrangement is considered as OBC for the particular branch. This branch is knows as collecting branch. There are two types of OBC:

OBC with different branches of the same bank OBC with different branches of other banks

Precaution at the time of cheques receiving for Clearing Name of the account holder same in the cheque and deposit slip. Amount in the cheque and deposit slip must be same in words and in figure. Date in cheque may be on or before (but not more than six months back) clearing house date. Bank and Branch name of the cheque, its number and date in the Deposit slip. Cheque must be signed. Signature for confirmation of date, amount in words / in figure cutting and mutilation of cheque. Cheque should be crossed (not for bearer cheque). Account number in the deposit slip must be clear.

Accounts Section

Accounts department is very important department of general banking. There are manytransactions are made in very day in back. Here the transactions are recording properly. If there is any fault made then the account section may check it and do action against it. To avoid these mishaps the bank provides accounts department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. If any discrepancy regarding transaction arises the department report to concerned department.Accounts Department does following works:

Packing of the correct vouchers according to the debit voucher and the credit voucher. Recording the transactions in the cashbook. Recording the transactions in general and subsidiary ledger.

Preparing the daily position of the branch comprising of deposit and cash.Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately. Making payment of all the expenses of the branch. Preparing the monthly salary statements for the employees. Recording inters branch fund transfer and providing accounting treatment in this regard. Make charges for different types of duties. Checking of Transaction List. Recording of the vouchers in the Voucher Register.

Dispatch Section

Dispatch division mainly operates the limitation of dispatching the intimidation letter to the client; Inter Bank credit advice (IBCA), Inter Bank Debit Advice (IBDA), Outward Bill for Collection (OBC) to other banks for internal transaction with the bank.The officer engaged in the dispatch division maintains two types of register books to keep entries of those documents particulars.These two types of books are:

a. Inward mailb. Outward mail

Outward mails are of two types:a. Local courierb. Overseas courier

When the officer receives papers from outside the branch, it is required to give a dispatch no. on the paper. The officer put number on that paper and on the basis of nature of document he takes decision how it has to be dispatched. Sometimes he gives to documents by hand to other party. At the beginning of the month, he withdraws money from bank by issuing a debit voucher to make the payment of dispatching bills. He writes all the expansion of dispatching in the register and payment. At the end of the month, he calculates his total expenses; he refunds it to the banks by creating a credit voucher.

Credit Management of JBL

Credit policy of JBLPolicy entails projected course of action. JBL has its own policy granting credit. Although credit is always a matter of judgment applying common sense in the light of one experiences. A sound credit policy includes among other things safety of fund invested vis--vis profitability of the bank. Encouraging maximum number of small loan is better than concentration in a particular type of advances which ensures sufficient liquidity with least insolence of bad debts.

Objectives of credit policyThere are some objectives of credit policy. These are as follows-

Provide guidance for giving loan. Prompt response to the customer need. Shorten the procedures of giving loan. Reduce the volume of work form top level management. Delegation of authority of work from top level of management. To check and balance the operational activities.

Credit Granting Process of JBLAlthough the Board of Directors holds the sole right of credit sanctio

Performance Evaluation of Overall Banking System

Documents

Transcript of Performance Evaluation of Overall Banking System