1.0 Introduction 1.

0 Introduction

There are 52 banks performing their functions in Bangladesh. Out of these, 4 are nationalized commercial banks, 30 are private commercial banks, 9 are foreign commercial banks and 7 are specialized development banks. There are also 29 Non-Bank Financial Institutions (NBFI) in our country. Nevertheless, directed and inefficient credit allocation by these commercial banks of Bangladesh in various economic sectors without adequate credit appraisal and monitoring, ultimately lead to the widespread loan delinquency, and deteriorating health of the entire financial system. The commercial banking system dominates Bangladesh's financial sector. Now-a-days Commercial banks play a key role in the economic development of a nation through mobilization of savings and allocation of credit to productive sectors. These banks are offering a variety of products to their clients. In doing their business most crucial part is to manage their credit efficiently because their profit mostly depends on the proper credit management. The economy of Bangladesh has been experiencing a rapid growth since the '90s. Industrial and agricultural development, international trade, inflow of expatriate Bangladeshi workers' remittance, local and foreign investments in construction, communication, power, food processing and service enterprises ushered in an era of economic activities. Urbanization and lifestyle changes concurrent with the economic development created a demand for banking products and services to support the new initiatives as well as to canalize consumer investments in a profitable manner. A group of highly acclaimed businessmen of the country grouped together to responded to this need and established Dhaka Bank Limited in the year 1995.

Chapter 2: Overview of Dhaka Bank Ltd. Chapter 2: Overview of Dhaka Bank Ltd.

2.0 Dhaka Bank Limited

Dhaka Bank Ltd. was incorporated as a Scheduled bank under the Company Act 1994, started its operation on 5th July 1995 with a target to play the vital role on the socio-economic development of the country. Aiming at offering commercial banking service to the customers door around the country, the DBL established 52 branches up to this year. This organization achieved customers confidence immediately after its establishment. DBL is now offering a number of credit facilities to its customers with a view to support its clients for converting their dream into real-life deeds. The recent offers of DBL includes: General Loan Scheme, Vacation Loan Scheme, House Building / Apartment Loan Scheme and Small and Medium Enterprise (SME)HYPERLINK "http://www.prime-bank.com/sme.htm" Loan Scheme. Being parallel to the innovative technology the bank is also offering online banking with added delivery channels like ATM, Tele-banking, SMS, and Internet banking. In addition, as a part of the banks commitment to provide all value added banking service in keeping the very best standard in a global world.

2.1 Historical Background of the Dhaka Bank Limited

In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial bank with a different outlook. For them it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly, Dhaka Bank Limited was created and commencement of business started on 5th July 1995. Dhaka Bank Ltd. Is being operated as a scheduled bank under the Company Act 1994.Its first registered office & now the head office is at Biman Bhaban (lst Floor), l00 Motijheel C/A, Dhaka-l000, Bangladesh. The paid up capital of the bank till in 2009 was over tk. 2128 million. The management of the bank has been carefully selected a team led by senior bankers with decades of experience in national and international markets. Group professionals, many of whom have exposure in the international market, ably support the senior management team.

2.2 Branches
The bank at present carrying its banking activities through fifty two (52) branches including ATM, Locker & Foreign Exchange services in the country. It has 27 branches in Dhaka, 12 in Chittagong, 05 in Rajshahi, 2 in Khulna , 04 in Sylhet 01 in Barisal & 01 in Rangpur. These branches are combined with Islamic & rural banking branches. 2.3 Capital Structure (Share Capital) Authorized Capital: tk 6000 million. Paid up capital: tk 2128 million. Total shareholders equity tk 4966 million

We can see a flow of authorized capital from 2005-2009 in the following-(in millions) Capital Authorized Capital 2005 2650 2006 2650 2007 6000 2008 6000 2009 6000

Table-2.1 authorized Capital

Graph-2.1- Authorized Capital of five years

Here, we can see that in 2005 & 06 the authorized capital was same. In 2007,08 & 09 it has increased to 6000 million & remain constant. The paid-up capital for the last 5 years is--(in millions) Capital Paid-up capital 2005 1228 2006 1289 2007 1547 2008 1934 2009 2128

Table-2.2 Paid-up Capital

Graph-2.2-Paid-Up Capital We can see that from 2005 to 2009, the paid up capital is in increasing rate. It provides a positive sign for the bank. The total share holders equity for the last 5 years--(in millions)

Equity Shareholders Equity

2005 2216

2006 2551

2007 3125

2008 4000

2009 4966

Table-2.3 Total Share Holders Equity

Graph-2.3-Total Shareholders Equity In term of share holders equity the bank from 2005 to 2009 has taken initiatives to increase the value of shareholders equity.

2.4 Strategic Objective of Dhaka Bank Ltd.

1. To conduct transparent and high quality business operation based on market mechanism within the legal and social framework spelt in our mission and reflected in our vision. 2. To provide customers continually efficient, innovative and high quality products with excellent delivery system. 3. Motto is to generate profit with qualitative business as a sustainable ever growing Organization and enhance fair returns to our shareholders. 4. Committed to our community as a corporate citizen and contributing towards the progress of the nation as our corporate social responsibility. 5. Employees are the backbone. Promote employees well being through attractive compensation package, promoting staff morale through training, development and career planning. 6. Strive for fulfillment of our responsibility to the government through paying entire range of taxes and duties and abiding the other rules. 7. Cautious about environment & climatic change and dutiful to make our homeland a green and clean soil.

2.5 Organogram of Dhaka Bank Limited

2.6 Organogram of Kawran Bazar Branch

Senior Officer Junior Officer Probationary Assistant Officer Trainee Officer Officer

Chapter 3: Financial Performance of Dhaka Bank Limited Chapter 3: Financial Performance of Dhaka Bank Limited

3.0 Financial Position of Dhaka Bank Ltd.

Dhaka Bank Ltd. has already made significant financial progress within a very short period of its existence. The bank has been graded as a top class bank in the country through internationally accepted CAMEL rating. The bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation. Dhaka Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Dhaka Bank Ltd. Has consistently turned over good returns on Assets and Capital. During the year 2009, the bank has posted an operating profit of Tk.2810 million and its capital funds stood at Tk.7858.65 million. Out of this, Tk.2843.75 million consists of paid up capital by shareholders and Tk.3412 million represents reserves and retained earnings. The banks current capital adequacy ratio of 10.88% is in the market.

3.1 Capital Adequacy & Provisions

The term capital adequacy indicates the equity base with respect to risk-weighted assets derived from both on and off balance sheet activities of the Bank .At the end of the year 2009, the banks total authorized capital is tk.6000 million. In 2009, paid up capital of the Bank stood at Tk. 2128 million comparing with Tk. 1934 million of 2008. With the help of last five year information we can organize a capital composition list. Capital composition of last five years Capital Composition Paid-Up Capital Levels Capital of 2,551 373 3,126 554 3,964 844 4,634 1,000 2005 1,228 2006 1,289 2007 1,547 2008 1,934 2009 2,128

Capital Core 2,216 (Tier- I) Capital 237 Supplementary (Tier II) Total Capital 2,453 Maintained

2,924

3,680

4,808

5,634

Table-3.1 Capital Composition of last five years

3.2 Loans & Advances

During the year credit portfolio of Dhaka Bank increased substantially. At the end of the year 2009, loans and advances of the Bank stood at Tk. 52,910 million compared to Tk. 49598 million of 2008. In case of

the branch at kawran bazar we see that the outstanding loans and advances also increasing substantially every year. The Amount of loans & Advances within Five Years Year Dhaka Bank Kawran Bazar 2005 23,372 97 2006 34,049 129.11 2007 39,972 150.03 2008 49,698 177
(tk in million, crore in branch)

2009 52,910 178

Table-3.2 Loans & Advances for five years

Graph: 3.1: Loan and From the graphs above showing the loans and advances of Dhaka Bank limited and Branch we see that in Advance every case the bar is increasing every year. But the increasing trend of kawran bazaar branch did not maintain in the year of 2009 comparing to the previous year.

3.3 Deposits
Deposit collection in Dhaka bank limited has got a consistent rise in every year. The deposit collected at Dhaka Bank limited at the end of 2009 is 60,918 million from the amount of 56,986 million in the previous year. The deposit amount in kawran branch has risen consistently in every year with an outstanding amount of 185.00 crore taka at the end of the year of 2009. The Amount of Deposits within Five Years Year Dhaka Bank Kawran Bazar 2005 28,439 101.18 2006 41,554 139.75 2007 48,731 155.93
(tk in million, tk in crore in branch )

2008 56,986 180.2

2009 60,918 185

Table-3.3 Amount of Deposits for Five Years

Graph: 3.2: Deposit The graphs above show the trend of increasing the deposit amount of Dhaka Bank limited. Comparing with consistent rise of Dhaka Bank limiteds deposit collection we see that the deposit collection of branch is not consistent with whole bank. There are some fluctuations in the rising of deposit amount.

3.4 Profits after Tax

Dhaka bank has earned handsome amount of profit every year using the deposit to provide loans and advances. The bank has lost some of its expected profit in the year of 2006 but the bank has been able to recover the amount in the following year. On the other hand, after the year of 2007 the kawran bazaar branch failed to increase the profit amount having the amount constant from 2007 to 2009.

Year Dhaka Bank Kawran Bazar

2005 704 0.31

2006 580 0.52

2007 704 0.70

2008 839 0.70

2009 959 0.69

(tk in million, in crore in branch)

The Amount of Profit after Tax within Five Years Table-3.4 Amount of Profit after Tax for Five Years

From the graph above we see that Dhaka bank profit has an increasing trend3.3: Profit After the branch Graph: in each year while Tax profit position is constant and even it tends to fall in the year of 2009.

3.5 Non Performing Loan

So far we have seen that the three main factor of banks health i.e. deposit, loans and advances, profit have been increased substantially. Besides these the nonperforming loan of Dhaka bank also is increased every year. Kawran bazaar branch has been able to lower the amount in the year of 2010 comparing Year Dhaka Bank 2005 351 2006 554 2007 1258 2008 1908 2009 2946

Year Kawran Bazar

2006 32.52

2007 14.00

2008 00

2009 53.03

2010 21.35

Table: 3.5 The amount of Non Performing Loan

Graph: 3.4: Non Performing Loan The graphs above clearly hint us that the branch is been successful in taking back the credit to the bank comparing with the whole bank scenario.

3.6. Return on Equity= Profit after Tax/ shareholders equity.

Return on equity is an important tool to measure the financial performance of a bank. It measures the rate of return on the ownership interest of the common stock owners or efficiency of the firm at generating profit from every unit of equity.

2005 Return on Equity 20.89%

2006 22.74%

2007 22.53%

2008 20.97%

2009 19.32%

Table- 3.6 Return on Equity

Graph: 3.5.: Return on Equity

Dhaka bank limited ROE stands on or in side of 20% every year. This rate of ROE is satisfactory for any bank. The ROE was increasing from 2005 to 2007 from 2008 it starts to decline.

Chapter 4: My Working Experience Chapter 4: My Working Experience

For a student of Business studies internship plays a vital role as it is the bridge between the classroom knowledge and the practical exposure of that acquired knowledge. This is the place where we can compare our knowledge with real work. This internship program helps us to get oriented with the job application. I have worked in three divisions at kawran bazar branch. These are: Front Desk General Banking Division Foreign Exchange division

4.1 The Front Desk

At first I placed to this division. The officers gave me all the briefings about this division. The tasks I handled in this division are: Registering inward letter Providing account opening form, DPS Form, remittance form to the clients Collecting cheque for requisition Preparing billing statement. On the first day of the Front Desk, My supervisor told me details. I received all kinds of inward letter, marked from manager or second manager and then distribute to different department. Here I also provided different types of form, collected cheque for requisition and prepared billing statement. I was working there at least one and half month.

4.2 The General Banking Division

After front desk operation, I was placed to this division. The officers gave me all the briefings about this division. Task I handled in this division are: Issuing Cheque Book Opening Account

Opening various type of scheme etc. Payment Order (P/O) Dealings with Debit and credit card Cheque Book issue is very sensitive issue because most of the fraud occur through this cheque book. To open an individual savings account one need to have an introducer in this Bank. But to open a current account one needs to submit the trade license. And if it is Partnership Company, the customers need to submit the partnership deed. I also dealt with opening other deposit scheme like "Deposit pension scheme". I also dealt with receiving documents / letters. In clearing section, I learned about inward and outward clearing check .I had to keep record of the collecting cheque & return cheque in the registered book and some other record keeping books and requires preparing particular schedule paper for sending to the head office within 4 p.m. every day. I had to work in the deposit section where I have gathered high knowledge about banking deposit. My supervisor told about different types of deposit scheme of the Bank. I become myself acquainted with different kinds of deposit of this Branch. This Branch mainly deals with CD, SD and FDR I had to write voucher of payorder.I had to keep record of all kinds of outward letter into the register. I provided atm card, debit and credit card to the clients and help them how to fill up the form.

4.3 Foreign Exchange Division

This is one of the busiest departments, I have found in kawran bazar Branch. There are two people working from morning to till evening. The big customers that mean the customers who have taken higher amount of loan from this branch needs to have busy with their business. The export and importers need to for opening L / C or go to Back to Back L/C.

Task of this Division:

Issue L/C L/C Advising & Conforming Bill negotiation Dollar Endorsement. On the first day of this division, the officer told me about all the terms and condition of this division. He made me understand about how to open letter of Credit (L/C) and Back to back L/C; what are the requirement of opening L/C, advising and conforming of L/C. This was a great opportunity for me to gather knowledge about impact of foreign trade as well as the policy and regulation of Bangladesh Bank. In this division I had to check the date, L/C no, name and address of the customer, name and address of the beneficiary, advising bank, foreign currency amount, exchange rate, equivalent taka, types of goods,

country of origin, expiry date, commission, postage and put them into the letter of credit opening file.I had to sort out all the documents of l/c according to L/C number and put them into the file.In this section I had to verify the signature of authorized person of the acceptance copy.

Chapter 6: Problems Chapter 6: Problems

Banking industry is a competitive industry. Having service oriented approach banking job is not an easy task to finish off successfully. To carry on the optimum level of success it is required to provide full dedication from the employees. But it is not enough. The customers of the bank especially the approach and behavior of the credit holder of any commercial bank are crucial for the success of a bank. Though Dhaka bank limited is one of successful bank of the country but it is still facing some problems. These are discussed below:

6.1. Deposit: As overall performance Dhaka Bank limited has been consistent in increasing the deposit
amount at an increasing rate but the branch is not been seems to be quite capable of that. The deposit amount kawran bazaar branch is also increased but not in a increasing rate.

6.2. Profit: In case of profit also, kawran bazaar branch is lagging behind the company performance.
Profit at kawran bazaar did not increased in the last three years while the company profit is increasingly increasing. 6.3. Insufficient number of employees: Among all the branch of Dhaka Bank limited, kawran bazar branch is one of the biggest with huge deposit and credit facilities. But in accordance with that size number of employees in this branch is little short which often lead to heavy work pressure on the employees in the branch. 6.4. High Interest: In spite of heavy investment the branch is short of deposit. That is why to attract more deposit the branch has to increase the interest rate on deposit, which in long run can be disturbing element for bank. 6.5. Operational Risk: In this era of automated banking, processing of banking jobs depend a lot on the server of the branch. Server of the kawran bazar branch is little slow. As a result clients have to wait for a long time every day. 6.6. Difficulties in Front Desk: Sometimes it becomes very difficult to handle all the clients in front of front desk by one single employee. Most of the times, this is handled by an interns who are not fully informed of every information they are required to serve. 6.7 Internal Marketing: We know that service based companies like bank are fully represented by the employees attitude towards the clients. It is important to make satisfied the employees by in time promotion, bonus and other incentives which are not provided regularly by the bank management 6.8. Insufficient ATM Booth: Dhaka Bank limited does not have sufficient ATM Booth of its own. Dhaka Bank provides shared ATM booth to its clients but which is costly for the clients. 6.9. Reducing the number of L/C: In case of Kawran Bazar branch when I was in foreign exchange I found that the number of L/C was reduced due to liquidity crisis in current market. Bank charge high margin against L/C 6.10 L/C advising and confirming: In case of Kawran Bazar branch when Dhaka banks receives the copy of L/C they cannot verify the signature of authorized person instantly. Because they dont have all the commercial banks authorized signature. 1. gdfg

Chapter 6.0 Recommendation & Conclusion Chapter 6.0 Recommendation & Conclusion

6.1 Recommendation
The prime objectives of the world well-known and reputed banking organizations are to making of profit through addressing the customers time to time with new pieces of service mechanisms. However, my small knowledge earned through this curriculum took me to clients changeable demands. According to my findings I can provide the subsequent recommendationsThe branch needs to collect more amount of deposit as is credit to deposit ratio is higher. Higher credit deposit ratio is followed by the lack of confidence by the depositor of the bank, The management of Dhaka bank should increase the number of employees in Kawran Bazar branch. The management of Dhaka bank should install adequate technology in the bank so the processing of works is finished shortly. Interns should be rotated to every division of bank so that they can gather sufficient knowledge. There should be ample space into the branch for movement of employees and the clients. Employees should be properly treated with incentives To overcome the liquidity crisis bank should take workable plan to increase deposit Number of own ATM booth should be increased. Before putting the interns in the front desk the interns should he informed of all information that are required to know by them. Higher interest rate on deposit may create a problem for bank if they do earn sufficient interest on credit. So bank management should be aware of the credit section.

6.2 Conclusion
Dhaka Bank Limited is one of the foremost banks in Bangladesh. Day by day this bank is grwoing up. This bank communicates its genuine thanks to the government of the peoples republic of Bangladesh and Bangladesh bank for their collaboration and precious direction to the bank. Dhaka Bank Limited also takes this opportunity to their respected clients, well-wishers, correspondents and the shareholders for their support and patronization extensive during the year under evaluation. Dhaka Bank Limited also traces its approval for the services provided by the managerial and the members of the staff for the steadiness and growth of the bank. Dhaka Bank Limited requests further active support and continued assistance of Bangladesh Bank, ministry of finance and other government agencies, executives and employees of the bank, appreciated partners, customers and the society in achieving hard tasks in front of it.

References

Commercial Bank Management (5th Edition) Peter Rose Annual Report of Dhaka Bank Limited (DBL) Year-2005-2010 Comparative Analysis of Budget and Achievement of Kawran Bazar Branch of Dhaka Bank Limited 2005-2010 Website of Bangladesh Bank www.dhakabankltd.com Dhaka Bank Limited (DBL)'s Brochures, Leaflets and Operational Manual. Other Online Sources