1.

0 INTRODUCTION
1.1

Background of Banking

The Jews in Jerusalem introduced a kind of banking in the form of money lending before the
birth of Christ. The word Bank was probably derived from the word bench as during ancient
time Jews used to do money -lending business sitting on long benches.
First modern banking was introduced in 1668 in Stockholm as Savings Pis Bank which opened
up a new era of banking activities throughout the European Mainland.
In the South Asian region, early banking system was introduced by the Afghan traders popularly
known as Kabuliwallas. Muslim businessmen from Kabul, Afghanistan came to India and started
money lending business in exchange of interest sometime in 1312 A.D. They were known as
Kabuliwallas.
Banks have influenced economies and politics for centuries. Historically, the primary purpose of
a bank was to provide loans to trading companies. Banks provided funds to allow businesses to
purchase inventory, and collected those funds back with interest when the goods were sold. For
centuries, the banking industry only dealt with businesses, not consumers. Banking services have
expanded to include services directed at individuals, and risks in these much smaller transactions
are pooled.
The name bank derives from the Italian word banco desk/bench, used during the Renaissance
by Florentines bankers, who used to make their transactions above a desk covered by a green
tablecloth.[2] 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 banco 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
Romethat of the Imperial Mint.

1.2

Objective of the Study

To know the management practices of banking sector in Bangladesh

1.3

Scope of the Study

The study would focus on the following areas of

Bank Limited.

Credit risk management process.

Human resources management process
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 Portfolio (loans & advances) management of Bank

Preferred Organization structures and responsibilities of Credit Risk management.
The analyses of some factors related to the credit risk.
Each of the above areas would be critically analyzed in order to determine the efficiency of
PBLs Credit appraisal and Management system.

1.4

Limitation of the Study

Past and present information that are confidential could not be accurately obtained. Alike all
other institutions, Bank is also very conservative and strict in providing managerial information.
In such cases, we have relied upon certain assumptions, which are only amateur estimates. As
many of the analysis on the obtained data are based on our sole interpretation, there may be some
biases, as lack of knowledge and depth of understanding might have hindered our ability to
produce an absolutely authentic and meaningful report.

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2.0 Literature Review

2.1

Definition

bank is a financial intermediary and money creator that creates money by lending money
to a borrower,thereby creating a corresponding deposit on the bank's balance sheet.
Lending activities can be performed directly by loaning or indirectly through capital
markets .
A bank is a financial institution whose primary activity is to act as a payment agent for
customers and to borrow and lend money. It is an institution for receiving, keeping, and lending
money. According to M N Shukla
A bank is an institution the principle function of which is to collect the unutilized money
of the people and to lend it to others.Said Prof. Chambers.

2.2

Law of Banking

Banking law is based on a contractual analysis of the relationship between the bank and the
customer. The definition of bank is given above, and the definition of customer is any person for
whom the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:

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.

The bank engages to pay the customers cheques up to the amount standing to the credit
of the customers account, plus any agreed overdraft limit.

The bank may not pay from the customers account without a mandate from the
customer, e.g. a cheque drawn by the customer.

The bank engages to promptly collect the cheques deposited to the customers account as
the customers agent, and to credit the proceeds to the customers account.

right to combine the customers accounts, since each account is just an aspect of the same
credit relationship.

The bank has a lien on cheques deposited to the customers account, to the extent that the
customer is indebted to the bank.

The bank must not disclose the details of the transactions going through the customers
account unless the customer consents, there is a public duty to disclose, the banks
interests require it, or under compulsion of law.

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2.3

Historical Background of Banking in Bangladesh

After independence of Bangladesh the government of Bangladesh was formally to change the
administration of the territory now constitute Bangladesh. The government promulgated a law
called Bangladesh bank order 1971 (acting president order no 2 of 1971). By this order the state
bank of Pakistan was declared to be deemed as Bangladesh bank and officers, branches and
assets of said state bank was declared to be deemed as officers, branches of Bangladesh bank. On
the date there existed 14 scheduled banks with about 3042 branches all over the world.
On the 16th December 1971 there existed the following 12 banks in Bangladesh namely:
Existing Bank
1. National bank.

New Bank
Sonali Bank

2. Bank of Bahawalpur Ltd

3. Premir Bank Ltd.
4. Habib Bank Ltd

Agrani Bank

5. Commerce Bank Ltd

6. United Bank Ltd.

Janata Bank

7. Union Bank Ltd.

8. Muslim Commercial Bank Ltd.

Rupali Bank

9. Standard Bank Ltd.

10. Australasia Bank Ltd
11. Eastern Mercantile Bank Ltd.

Pubali Bank

12. Eastern Banking Corporation Ltd.

Uttara Bank

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3.0 Methodology
In the term paper, much information has been collected from the secondary sources such as from
annual report, different published articles, journals, brochures, web sites etc. All the data
collected for reporting purpose are systematically.
Annual report of different banking industry.
Periodicals Published by Bangladesh Bank.
Different publications regarding Banking functions.
Internet was also used as a theoretical source of information.
Websites and Newsletters are also used as major sources.

3.1

Data Analysis Techniques

This report is an analytical one. Different statistical tools are used in analysis and presentation of
data throughout the report. The overall analysis techniques are

To find out the relationship among different variables with NPL, GDP, CPI Inflation and
Exchange Rate Multiple Regression Analysis

Ratio calculation to analyze Credit risk scenario.

Find significant relationship with the Probability of Book Value Insolvency with Risk
Index and CAP through Multiple Regression Analysis.

Microsoft Excel is used in calculating and constructing of graphs

SPSS Statistical software is used to analyze correlation and multiple regression analysis.

Tables and Line Graphs are used in presenting data.

This overall process of the study is as follows:

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4.0 Data Analysis & Findings

4.1

Banking Industry of Bangladesh

The Banking Industry in Bangladesh is one characterized by strict regulations and monitoring
from the central governing body, the Bangladesh Bank. The chief concern is that currently there
are far too many banks for the market to sustain. As a result, the market will only accommodate
only those banks that can transpire as the most competitive and profitable ones in the future.
Currently, the major financial institutions under the banking system includes:

Bangladesh Bank

Commercial Banks

Islamic Banks

Leasing Companies

Finance Companies

Banks operating in Bangladesh are as followings:-

State-owned commercial banks

State-owned are functioning as nationalist. Here is the list Sonali Bank
Janata Bank
Agrani Bank
Rupali Bank

Private commercial banks

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Private banks are the highest growth sector due to the dismal performances of government banks
(above). They tend to offer better service and products. Here is the list o AB Bank Limited
o Bangladesh Commerce Bank Limited
o Bank Asia Limited
o BRAC Bank Limited
o Dhaka Bank Limited
o Dutch Bangla Bank Limited
o Eastern Bank Limited
o Farmers Bank Limited
o IFIC Bank Limited
o Jamuna Bank Limited
o Meghna Bank Limited
o Mercantile Bank Limited
o Midland Bank Limited
o Modhumoti Bank Limited
o Mutual Trust Bank Limited
o National Bank Limited
o NCC Bank Limited
o NRB Commercial Bank Limited
o NRB Global Bank Ltd
o One Bank Limited
o Prime Bank Limited
o Pubali Bank Limited
o South Bangla Agriculture and Commerce Bank Ltd
o Southeast Bank Limited
o Standard Bank Limited
o The City Bank Limited
o The Premier Bank Limited
o Trust Bank Limited
o United Commercial Bank Ltd
o Uttara Bank Limited

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There are 8 Islamic Commercial Banks:

Al-Arafah Islami Bank Limited
[Exim Bank (Bangladesh)|Export Import Bank of Bangladesh Limited]
[First Security Islami Bank Limited]
ICB Islamic Bank
Islami Bank Bangladesh Limited
Shahjalal islami bank Limited
Social Islami Bank Limited
Union Bank Limited

Foreign commercial banks

10 foreign commercial banks are operating in Bangladesh. These are:
o Bank Alfalah
o Citibank NA
o Commercial Bank of Ceylon
o Habib Bank Limited
o HSBC ( The Hong Kong and Shanghai Banking Corporation Ltd. )
o National Bank of Pakistan
o Standard Chartered Bank
o State Bank of India
o Woori Bank
o ICICI Bank

Specialized banks
Specialized Banks (SDBs): 4 specialized banks are now operating which were established for
specific objectives like agricultural or industrial development. These banks are also fully or
majorly owned by the Government of Bangladesh.
Bangladesh Krishi Bank
Rajshahi Krishi Unnayan Bank
Bangladesh Development Bank Ltd
BASIC Bank Limited
Probashi Kallyan Bank
The Dhaka Mercantile co-operative Bank Ltd

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Figure: Types of Bank

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4.2

Management Practices in Banking Industry

The Board of Directors is the top management and policy-making body of banking industry both
private and public sector. The Board consists of a chairman and a number of directors. It is to be
noted that the Managing Director, is also a member of the Board. The Directors are appointed
from amongst those who have had experience and shown capacity in the field of finance and
banking, trade, commerce, industry agriculture. The Chief Operations Officer executes all the
activities under the direction of the Board. Banks own Recruitment Committee appoints the
officers and the other line and staff personnel.

Figure : Organizational Structure

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Different managerial department of Banking Industry :Most bank operate their activity in Bangladesh both private and public sector has the following
department.

HRM

Corporate Banking

SME Division

Credit Division

Consumer Service Delivery

Risk Management

Liability Management

IT (Information and Technology)

Treasury Management

Remittance and Financial Administration

Impaired Assets Management Division

4.3

Human Resource Management

Human resource is a term used to describe the individuals who comprise the workforce of an
organization, although it is also applied in labor economics to, for example, business sectors or
even whole nations. Human resources is also the name of the function within an organization
charged with the overall responsibility for implementing strategies and policies relating to the
management of individuals (i.e. the human resources). This function title is often abbreviated to
the initials HR.

Human resources purpose and role:

In simple terms, an organizations human resource management strategy should maximize return
on investment in the organizations
human capital and minimize financial risk. Human Resources seeks to achieve this by aligning
the supply of skilled and qualified individuals and the capabilities of the current workforce, with
the organizations ongoing and future business plans and requirements to maximize return on
investment and secure future survival and success. In ensuring such objectives are achieved, the
human resource function purpose in this context is to implement the organizations human
resource requirements effectively but also pragmatically, taking account of legal, ethical and as
far as is practical in a manner that retains the support and respect of the workforce.

Key functions:
Human Resources may set strategies and develop policies, standards, systems, and processes that
implement these strategies in a whole range of areas. The following are typical of a wide range
of organizations:

Recruitment, selection, and on boarding (researching)

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Organizational design and development

Business transformation and change management

Performance, conduct and behavior management

Industrial and employee relations

Human resources (workforce) analysis and workforce personnel data management

Compensation, rewards, and benefits management

Training and development (learning management)

Implementation of such policies, processes or standards may be directly managed by the

HR function itself, or the function may indirectly

Supervise the implementation of such activities by managers, other business functions or

via third-party external partner organizations.

Method of Training and Development:

There are some training and development methods which is given as under:

Compensation Management:
Compensation Management is an integral part of the management of he organization.
Compensation is a systematic approach to providing monetary value to employees in
exchange for work performed. It may achieve several purposes assisting in recruitment, job
performance, and job satisfaction. It is the remuneration received by an employee in return
for his/her contribution to the organization. It is an organized practice that involves balancing
the work-employee relation by providing monetary and non-monetary benefits to employees.
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Components of compensation:

Basic wages/Salaries

Dearness allowance

Incentives

Bonus

Non-monetary benefits:

Commissions

Mixed plans

Piece rate wages

Fringe benefits

Profit Sharing

4.4

Corporate Banking

The Corporate Banking Division provides full range of commercial banking products and
services. Many Departments such as Foreign Trade, Treasury, and Credit Administration etc. play
the support role for a comprehensive range of service to the corporate Banking Division.
Banks Corporate Banking team exists to provide both banking services and a financial
partnership with local large and medium corporate, trading houses and joint ventures. As the
financial partner of choice for the corporate sector

Corporate Banking Structure:

The Corporate Banking Division has a centralized structure through on-line banking system. Any
credit facility is processed at the Corporate Banking Division, Head Office. After sanctioning of
the facility, the limit is put online and the CONSUMER can enjoy the facility from any of the
branches. Strict adherence to internal control guidelines and other legal and statutory compliance
are followed. The Credit approval process involves separate Credit Division, the Managing
Director and finally the Board.

Objectives:
The Corporate Banking Group would try to serve the financial market of the country with the
following objectives.
1. To develop and sustain mutually beneficial CONSUMER relationships based on high quality
service and innovative products.
2. Maintaining a diverse and quality asset base and pursue a sustainable growth strategy.
3. To pursue a management style that contributes to the well-being and development of a fully
responsible and accountable workforce under a high corporate standard and business ethics.
4. To provide and deliver services in a cost-effective manner.

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4.5

SME Division

This department works widely over the country. There are more various unit offices of SME
division all over the country sell different type of loan to different small and medium enterprise.
They provide loan, which are to be paid in installment. This department also monitors the
recovery of the loan and in case of inconsistency they take necessary action to recovery the loan.

4.6

Credit Management

A Contractual agreement in which borrower receives something of value now agrees to repay the
lender at some later date, Loan-an arrangement in which a lender give or property to a borrower,
and the borrower agrees to ruler the property or repay the money, usually along with interest, at
some future point(s) in time. As Financial intermediaries, Lending is one of the main functions of
a Bank.

Functions:

Managing credit exposure

Managing credit risk
Compliance with the issue of Bangladesh Bank regulations
Support all businesses of the Bank
Collection of Overdue loans
Recovery of Bad debts.

Basic Elements for Judging a Borrower: 5 Cs of Credit

Character
Capacity
Capital
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 Conditions
Collateral

Source of Borrower Study:

Loan application
Financial statement
Study of Account
Market reputation
Bangladesh Bank
Different Banks
Personal Interview. Personal Visit

4.7

Consumer Service Delivery

It is the processing Center for BRAC Bank. All the back office activities take place in this
department. It performs the following activities:

Ensure cheque requisition requests are attended.

Ensure cheque Books are printed and checked as specified in the requisition request.
Mailing of cheque books to the respective branch
Ensure cheque leaves stock register are properly maintained
Ensure A TM Card requisition requests are attended
Ensure ATM Cards are checked as specified and delivered to the respective locations.
Ensure Blank ATM Cards are balanced as per inventory register.
Ensure Cheque Books, ATM Cards are delivered to the respective branches at the
specified timeline.
Mailing welcome letter
Mailing FDR renewal
Dormant account activation
Reactivation of Dormant/Closed Account

4.8

Risk Management

Risk Management (RM) is an important dimension for banking industry. RM will set risk
management strategy across the enterprise, designed to identify potential events that may affect
the organization and manage risk to be within its risk appetite to provide reasonable assurance
regarding the achievement of organizational objectives.
The management committee approved the RMC policy, which contains the guidelines for
reporting about Risk Management to the committee. The committee discusses about the various
issues raised relating to the financial activities of the organization. The units qualify the specific
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risk according to the matrix provided by Bangladesh Bank. The meeting minutes are reviewed by
the Board Audit Committee on quarterly basis.

4.9

Liability Management

In the case of banking activities, the bankers must have to make the decision about the buying
and selling the market securities for making the particular loans or to cover the their demanded
fund for the investment and lending activities. The overall process for making the decision about
the composition of banks assets and liabilities with the assessment of the risk is known as
asset/liability management or (ALM). The three important criteria are viewed as to manage the
sources and uses of funds on the balance sheet and off-balance sheet activities with respect to
interest rate risk and liquidity. These are as follows:

The direction of changes in interest rates in the future.

The composition of their assets and liabilities and

The degree of risk that they are waffling to take

Collectively, these decisions affect the banks net interest income and the balance sheet values.
The process of making such decisions about the composition of their assets and liabilities and the
risk assessment is generally known as asset/liability management or ALM. The traditional
purpose of ALM is to control the size of the banks net interest income. The different features
that are related to ALM are discussed bellow.

Net Interest Income (NII):

The net interest income is calculated by the difference between the interest earned on the assets
and the cost of the liabilities. Here, we can describe the Nil with an example bellow:
Net Interest Income (Nil) = Interest income Interest expense

Net Interest Margin (NIM):

The net interest margin (NIM) is net interest income (NI!) divided by the total earnings assets
that are shown below:
Net Interest Margin (NIM) = Nil / Earnings Assets
(Source: Commercial Banking, Gup & Kolari)

4.10 IT (Information & Communication)

For all types Bank, technology is the silent strength behind its wide array of products and its 24/7
service delivery capabilities. Now a days bank embraced a number of best-in-class technology
platforms that will ensure seamless behind the scenes support for its rapid growth.
All Bank follows the guideline dated in BRPD Circular no. 14, dated 23 October 2005 regarding
Guideline on Information and Communication Technology for Scheduled Banks. IT operation
management covers the dynamics of technology operation management including change
management, asset management and operating environment procedures management. The

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objectives are to achieve the highest levels of technology service quality by minimum
operational risk.
In order to ensure that information assets are protected against risk, there are controls over:
Password
User Id maintenance
Input
Network Security
Data Encryption
Virus Protection

4.11 Treasury Management

Treasury department is vested with the responsibility to measure and minimize the risk
associated with banks liquidity, foreign exchange exposure and asset liability management.
Treasury continuously monitors price movements of foreign exchange and uses various hedging
techniques to manage its open position in such a way that minimizes risk and maximizes return.
The Asset Liability Management (ALM) desk provides country economic analysis, balance sheet
gaps,
ALM
ratios
and
many
other
findings
before
the
ALCO.
The Financial Institutions (FI) wings works as the trigger point of establishing new relationship
with correspondent banks as well as to maintain the existing relationship to provide a smooth
funding channel for all business units.

4.12 Remittance Management

Remittance means transfer of money from one to another. Bank provides this facility to their
customer as a part of essential services provided to them. The transfer of money can take place
either within the country or from one country to another.
The remittance of freely convertible foreign currencies which we are receiving from abroad
against which the Authorized Dealers making payment in local currency to the beneficiaries may
be termed as Foreign Inward Remittance. The transfer of money can take place either within the
country or from one country to another.
>

Foreign Remittance.

>

Local Remittance.

MODE
OF
INWARD
Remittance):

REMITTANCES

The following are the mode of Inward/Outward Remittances.

TT

Telegraphic Transfer.

MT

Mail Transfer.

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(Also

Outward

FD

Foreign Drafts.

PO

Payment Order.

TC

Travelers Cheque.

EFT

Electronic Fund Transfer

4.13 Impaired Asset Management Division

Impaired Assets Management is a new concept in the banking arena. Impaired Assets
Management (IAM) department is playing a pivotal role in managing Non Performing Loan
(NPL) and Written Off Loan Portfolio of and maintaining its Portfolio At Risk (PAR) at a low
level.
Basically IAM department takes legal steps against classified loan defaulters of the bank. IAM
reduces NPLs through deploying third party recovery agencies and lawyers, amicable settlements
with defaulters, arrangements for auctions of mortgaged properties etc. separate segments of
IAM department are engaged to monitor and follow-up NPLs of different business unit. These
legal and recovery processes are done under Bank IAM policy and Bangladesh Bank guidelines.

4.14 Decision Making Process

The goal of all banking and financial institution is to earn profit and retain the position from the
competitive threat. To attain the goal, the overall planning is done at the headquarter level by the
management committee which is headed by the CEO, the committee also includes all the divisional heads
from support and business. They meet once in a month or contingent basis. The decision making process
is a top down cascading process with the flexibility of incorporating the feedback from the operational
areas to avoid the problems. The management is amply flexible to include enough room for participation
from bottom and allows significant room for accommodating strategic changes. The management has
clear bent for the following:

Modernization of process and operations to achieve higher service quality, customer satisfaction
and reduce the paper work

Recruit, develop and maintain top-grade efficient employees

Maintain, enhance and protect brand image

Ensure convenient working and banking experience for the employees and the customers

4.15 SWOT Analysis

Strengths

Strong corporate identity

Strong employee bonding and belongings

Efficient Performance

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Hospitable Working Environment

Strong Financial Position

Young enthusiastic workforce

Empowered Work force

Weaknesses

High charges of L/C

Discouraging small entrepreneurs

Absence of strong marketing activities

Not enough innovative products

Diversification

Lack of Proper Motivation

High Cost for maintaining account

Opportunities

Distinct operating procedures

Country wide network

Experienced Managers

Huge Population

El Dorado Program

Bigger Market

Threats

Upcoming Banks/Branches

Similar products are offered by other banks

Default Loans

Industrial Downturn

Financial Crisis

4.16 Managerial Comparisons between Private &

Public Bank
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Profit motive vs. service orientation:

It is true that both the banks have profit motives. But in a public bamk, There are a lot of CSR
(corporate social responsibilities) activities compare to private bank.
The main objectives for the CSR activities were:

Providing scholarship for carrying on the education process of the poor students.
Taking many projects to help the physically and mentally handicapped person.
Giving support for the protection of the memory of our liberation war.
Donations for the victims of many natural calamities etc.

On the other hand, private does very less CSR activities. But private bank should increase their
CSR activities for public interest; and by doing this, they can enhance its customer base.

Political Direction
Public administration works under political direction and scrutiny. They put into effect the
policies made by elected members of the legislature (law-makers) and potential executive, while
private administration is not subject to political direction. All public bank is influenced by
political direction, but private bank are not.

Size of the administration:

The sizes of the organization are comparatively large in the public bank than private.

Red Tapism vs. promptness:

Red Tapism is seen most of the time in public administration. On the other hand, in private
administration, works are done fast. After analyzing the findings of these two banks, it is seen
that in public bank, the assigned works are not completed in due times and it takes months and
sometimes years to finish the work. On the other hand, in private bank, any assigned works will
take less time to complete successfully. private bank has the characteristic of doing things
without delay. So, promptness is there in private bank.

Taking Bribe:
Bribe is one of the highlighted problems in public sector. In public bank, bribery happens most of
the time because consumers have taken this assumption for granted that bribing is the only
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effective way to get the work done. Bribery happens here because of red-tapism which topic was
mentioned earlier. The work is done very slowly in public sector. On the other hand, there is no
option in private bank.

Equal opportunities to the employees:

Equal opportunities are not given to employees in public bank. Merited and sincere employees
are not given the opportunities they deserve and much deprived from it. Employees who have
power and links are given priority over others even if they dont deserve. So, there is corruption.
On the other hand, in the private bank, employees are given equal opportunity in the company.
Those who perform well are promoted from one position to another.

Qualification of the staffs:

Employees are very important for every organization. Most of the employees of private bank is
highly trained and experienced in their respective sectors. The employees are also well aware
about their duty and responsibility. Public bank has also trained and experienced employees but
there are also many employees in the bank who join by performing corruption, for example by
giving bribe. These corrupted employees are not even qualified for the post they grab.

Technology:
The IT sector of public bank is much backdated. There are usages of very old personal computers
which sometimes do not work properly. Even some of the employees do not have computers to
work with. On the other hand, private bank has a strong IT (Information technology) sector
compare to public bank.

Workplace environment:
Work place environment of private bank is below average. No air-condition facility is there. Old
furnitures as well as the necessary items are missing which are required to do jobs. Limited
space makes the environment even clumsier and messy. The workplace environment in private
bank is very friendly. The arena is properly air conditioned proper ventilation facility is there.
Every employee has their own desk to work properly.

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5.0 Conclusion
Bangladesh is a third world countrywide an under developing bank management system
particularly in terms of services and customer care provided by the government run banks.
Recently the private banks are trying to imitate the develop management system in banking
sector. The private Banks have been found to be investing generally in the projects with quick returns
resulting higher recovery rate of commercial loans provided by the banks. This leads the banks not to take
up the projects with long gestation period, mode of financing. The short term financing under Murabaha
and Bai Muajjal assures the required rate of return, as the mark up of profit is pre assigned according to
the bankers and the users of the loans. Moreover, the Banks cover their loan risk by taking the collateral
and other forms of securities such as FDR Account with the Bank. Thus, the better performance recovery
rate of commercial loans in Banks is due to its lending portfolio and its different modes of financing. last
of all it can be calculated that ,although private bank management system is much develop then the
public bank management system, both are not quite satisfactory.

5.1

Recommendation

After completion the study we have gathered some practical knowledge about the management
practices in Bank .Now we would like to provide some recommendations, which might be
helpful to upgrade the management practice of Banking sector is given as under:
1. First of all the main important thing for an organization is the Recruitment, which exists
in theses bank, is not well designed. Most of the bank usually recruited people in
tradition way. In this case what they can do is that they can go for campus recruitment,
hire institute for helping them recruiting people. Because the institutes are well equipped
than the bank. They can also go for online recruitment, which is a modern method.
2.

From the point of Training it can be said that their training course is well but not that
much practical. They provide training to their employees is their training institute or send
them to BIBM which is one of the reputed institution for the bankers to be to be trained
up. In this sort of training they usually get theoretical idea. In this case they can also
arrange on the job training which will enables the employees to learn more effectively.

3. Another thing is that after getting training the employee usually not posted it their
properly area. For example an employee got training in Credit but he has been posted
Foreign Exchange Department, in this case what happened is that after couple of time he
forgot the content of the training. So it should be kept in mind that after training they
should be properly posted. If a person get training in credit management or risk
management he should be posed in the relative field.
4. Another problem is in their performance appraisal system is quite back dated. Usually an
employee is eligible to get promotion every after 03 years. But which is not true as a
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result employees got frustrated could not concentrate in their work Besides there is not
option for performance basis promotion. In this case it has to me taken into consideration
that promotion is motivation, which is useful for employees. As a result it will also useful
to reduce employee turnover.
5. The banks do not have got compensation for its employees which is low comparatively
very low in the organization, which should be increased, especially in the public
commercial bank.
6. There should be also option for reward system which is not present in most of the bank.

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6.0 References
Annual report of Bank 2005,2007,2009,2011,2013
Human Resource Management- Cynthia D. Fisher, Lyle F. Schoenfeldt, James B. Shaw (5 th
Edition)
Human Resource Management- Decenzo Robbins (6th Edition)
Human resource Management- Gary Dessler (8th Edition)
Bisno, H. (1988). Managing confect. Newbury Park, CA: Sage.
Burke, W. W. (1987). Organization development: A normative view Reading, MA: AddisonWesley.
Different Private & Public Banks website

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