How govt.

banks have advantage over other private banks

Advantages of Government Banks:
To establish, maintain, carryon transact, undertake and conduct different types of banking, financial investment and trust business in Bangladesh and abroad. To carryon any business relating to wage earners scheme as may be allowed by the Bangladesh Bank from time to time including maintaining of foreign currency accounts that any other matter related there to. To contact of negotiate all kinds of loans, aid or assistant, private or public from any other sources, local or foreign and to take all such of steps as may be required to complete such deals. To promote, organize, assist, participate and in forming or organizing any company, bank, syndicate, institution in Bangladesh and abound for the purpose of undertaking financial, investment or trust business. To reconstruct or organize with any company, bank or association in co-operation with any person, company bank or association. To encourage sponsor and facilitate participation of private capital on financial, industrial or commercial investments shares and securities and in particular by providing finance in the form of long, medium or short term loans or shares participation's by way of subscription to the promoter shares or underwriting support or bridge finance loans or by any other manner. To establish and open offices and branches to carryon all or any of the above business abroad and within the country, provided prior permission in obtained from the Bangladesh Bank.

Elaboration and other advantage of govt. Banks:

1 Foreign Exchange Business Activities:
Foreign exchange business during the year 2006 stood at Tk.9248.93 crore as against Tk.8868.67crore during the year 2007 showing an increase of Tk.380.26 crore i.e. 4% during year. Import transaction increased by Tk.20.85crore which is 8% over the transaction of the

previous year. During 2007, the bank achieved Tk.3521.10crore being export business showing an increase of Tk.1. 53crore compared to the preceding year. However, remittances received by the bank during the year shows a considerable increase to the tune of Tk.157 .88crore i.e. 6% of the total of Tk.2674.43crore over the level of the previous year.

2 Credit recovery activities:

As per management's decision LOAN CERTIFICATION DIVISION started functioning since December 1, 2007. The function of this division comprises operating and monitoring of self-classification of loans and advances on yearly basis, monitoring of recovery, progress of classified loans and advances, preparing of credit investigation reports, collecting various information, data etc. for regular as well as onward submission to Bangladesh Bank. The Bangladesh Bank task force, Ministers, Government Agencies as per their requisition and monitoring the implementation of Managing Director's Annual goals and Action plans for recovery and reduction of classified advances up to the predetermined level. Credit Recovery Division (CRD) performs all these functions.

3 Audit & Inspection Activities:

The activities of Audit & Inspection Division (AID) are to do audit over the branches and to detect any loss by way of less recovery of interest on advances, excess payment. Interest on time deposits and less recovery of commission (L.C.D.D.T.T.) various services. During the year2007, 448 branches were audited besides; this Division by the same period inspected 13 branches. The auditors detected income loss of Tk.157.51lacs. Out of Tk.157.51lacs Tk.120.01lacs was recovered on the spot by crediting income account and the concerned branches and zonal offices were being closely followed up for recovery of the rest amount.

4 Computerization Activities:
A lot of important jobs of the bank are performed through computers. In Banking sector computer was first used of the then Habib Bank Limited (the parent organization of Agrani Bank Limited) in 1957. The function of Information Technology Division(ITD) is to maintain a

database of the entire banking activities of Government Banks . This division is well equipped with IBM Midrange Computer and is staffed with highly trained and experienced personnel. The division is now processing different jobs using its IBM AS/400.

5 Administrative Activities:
The administrative activities of the bank are comprised with Personnel & Human Resources Division (PHRD). The functions of this division is to maintain the number of present manpower in the bank; placing the officials according to their promotion or demotion; recruiting new personnel; providing training programs for them and release personnel according to their age of retirement.

6 Other Activities:
Planning Research & Statistics Division (PRSD) of the bank accomplishes the work of publishing English Quarterly "Economic News Letter" and Bangla Quarterly "AgraniDarpan" and drafts "Resume of Financial Sector Activities" of the bank and " Annual Report" of the bank of the year under review.CIB report is also prepared and submitted to Bangladesh Bank through computer diskette by PRSD. This division collects CIB reports from almost 866 branches of the bank under which about 20,000 borrowers are included. This division also collects SBS-l& 3 statements from 866 branches and complies them and sends SBS-2 & 3 through computer diskette. This division maintains a library which is the largest one in scheduled banks, in which the no. of books is approximately 8937 presently.

7 Special Activities of Govt. Banks

Without the above activities, there are three special activities that were conducted by the bank during the year 2007. Those are as follows: The gross and net amount of loans and advances of the bank by the end of 2007 stood at Tk.83.58 Billion.

The bank gave loans to public and private sectors amounting to gross loans and advances at the end of 2007 Tk.995.16crore and Tk.5750.91crore respectively. The advance under small and cottage industries sector by the end of 2007 stood at Tk.373.81crore as against Tk.368.01crore. The bank had a considerable involvement in the jute sector under jute trade and jute industries. Total advances in the jute sector stood at Tk.718.61crore in 2007. The investment in this sector was 11% of the total loan and advances.

Trade & Commerce Credit Activities:

Side by side with the industrial sectors, the bank had been financing in trade and commerce to develop export sectors. The bank generally invests short-term loans in these sectors. The bank finances on the major goods items. Like raw jute, fertilizer, food grains, iron & steel, hatchery, sugar, cement, medicine & chemical, frozen food, tea, ready-made garments, leather etc. Government Banks helps to keep the price of food grains stable to meet the shortfall of the same providing advances for internal procurement of food grains. As a nationalized commercial banks has been sharing the vital role in all economic activities of the country and these efforts will also be continuing in future.

Industrial Development Finance Activities:

Government Banks are the leading commercial banks of the country maintained its active role in implementing the Government policy of rapid industrial sector through providing and channeling medium & long-term capital finance as well as short-term working capital finance to industrial projects. The credit programs under Government Banks had so far financed were namely IDA credit, OPEC credit, Exim Bank credit, ADB credit, Banks own sources of finance, SPL credit program, BSCIC consortium, Credit guarantee scheme, Entrepreneur Development Program, Financing of small scale engineering project and Micro enterprise loan scheme. Under financial activities of government bank the total number of 5252 industrial projects with Tk.1052.39crore as term loan. The total outstanding industrial loan was Tk.1043.40crore.

Among the sanctioned projects, the numbers of large and medium scale industries were 90 and the number of small and cottage industries were 5162. The ratio of large & medium and small & cottage industries was 67:33.

Rural Credit Activities:

Agricultural/ Rural credit plays an important role in national economy. For this, extension of credit to agricultural/rural sector by the bank had been receiving constant attention of' the bank in line with the credit policy of the Government and cumulative amount of credit extended to this sector under various credit programs stood at Tk.1171.57crore at the end of 2007. During 2007 an amount of Tk.198.40crore had been disbursed under agricultural/rural sector. Credit was also provided to the unemployed educated native youths in order to engage them in productive activities.

Liquidity Position
Government Banks takes a major participant in the financial/economic market of Bangladesh and enjoys confidence of the depositors and other clients. Joint venture partners and foreign creditors. The Banks, at present, is a net moneylender in money market and is investing a daily average of Tk 849.00 crore in local currency and also selling excess foreign .currency to other banks equivalent to Tk 8.02 crore on an average per day. The ratio of loans & advances to deposits was increased by 0.44% over the last year & stood at 76.50% at the close of 2007 which was 76.04% at the end of 2006.

General credit
The loans and advances of the Bank as at the close of 2007 was Tk. 118.49 Billion as compared to Tk. 105.87 Billion in the previous year i.e. advances increased by 12.62 Billion with a growth rate of 7.40%,

Trade and Commerce

The Bank continues to finance Trade and Commerce by investing short-term loans for major items like raw jute, fertilizer, food grains, iron and steel, hatchery, sugar, cement, medicine, chemicals, frozen food, tea, ready-made garments, leather etc. In the greater national Interest, continues to support different sectors via, jute, tea, leather production. The Bank also helps

stabilized the price and supply by providing advances for procurement and preservation of food grains internally on a priority basis as and when needed.

Industrial Credit
Government Banks has been playing a pivotal role in supporting the Government policy of rapid industrializations. The Bank continues to provide its specialized services for financing medium and long-term capital finance as well as short-term working capital finance to industrial projects.

Credit Lines
Government Banks has utilized the following credit lines for onward lending.

Agrani Bank Limited ShilpaUnnayan Bond sale programme:

Agrani Bank Limited in order to create a fund of Tk.500 crore to finance the industrial sector, has introduced Agrani Bank Limited ShilpaUnnayan Bond. The time period of the Bond

consists of 5 and 7 years with the face value of Tk. 50,000, Tk. I, 00,000 and Tk. 5, 00,000. The rate of interest for 5-year term bond is 10% while for 7 year it is 11 %. The purchaser's fund so invested is tax-free. But, if the interest earned exceeds Tk. 25,000, a taskbarat the rate of 10% will be levied. The Bank invests sales proceeds of the Bond in developing industries of the country. The Industrial Credit Division is responsible for monitoring sale of the Bond. Up to December 2007, the Bank sold Bonds worth Tk.282.85 crore and invested Tk. 27.11 crore.

FemaleSecondary School Assistance Project II (FSSAP-II): The Bank has been entrusted with the task of disbursing stipend to 8.50 lac female students at 119 Upazilas under supervision of the world Bank. In 2007, Tk. 28.00 crore has been disbursed.

Female Secondary Stipend Project (FSSP):

In order to speed up literacy in women, Bangladesh Government has initiated this programme to provide stipend to female students. The Bank has been entrusted with the disbursement for Dhaka Division. The Bank, through its 90 branches, disbursed Tk.9.00 crore among 2.87 lac female students of 62 Upazillas under this scheme in 2007.

Female Education Stipend Project(FESP):

Funded by NORAD, this programme has been started to increase literacy in women in 19 upazilas. The Bank disbursed as stipend and tuition fees of Tk. 4.18 Crore to 0.62 lac female students in 2007.

Primary Education Stipend Project (PESP):

The government has undertaken this programme from its own finance to increase the rate of literacy as well as to prevent the dropout rate at primary level across the country.

Higher Secondary Female Stipend Project (HSFSP)

Similarly, for the advancement of female education across the country, the government has embarked on this programme. In 2007, Tk. 4.51 crore has been allocated for disbursement.

BayaskoBhata&Bidhaba Swami ParittaktaDusthaMohilaBhata . In 2007, the Bank has distributed Tk.28.00 crore to 1.88 Lac beneficiaries through its 484 designated branches throughout the country under the programme of the Government.

Payment of Retirement Benefit:

In 2007, an amount of Tk. 34.00 crore has been paid to the Bank by the Government to pay retirement benefits to the retired Govt. employees.

Salary and allowance payment to the non-govt. Teachers.

In 2007, the Government as Salary & Allowances has paid an amount of Tk 400.00 crore to the Bank for the non-govt. teachers.

Food Procurement.
In 2007, an amount of Tk. 384.00 crore has been allocated to the Bank to pay bills against Food Procurement drive undertaken by the government.

Payment of Honorarium and Allowance to Freedom Fighters.

An amount of Tk 4.00 crore has been paid to our Bank for payment of Honorarium and Allowances to Freedom Fighters. Crop Loan: Out of total annual allocation of Loan portfolio, 60% is earmarked for Crop financing. TheCredit program covers all the seasonal crops produced in the country. The loan is disbursed asper norms set by the Bangladesh Bank. The rate of interest for this sector is 10%. The rate of interest may however, vary from time to time. Both the landowner and sharecroppers are normally the target group for this loan. Marginal farmers are also eligible for the loan. Crop loan is sanctioned on annual basis. Credit passbook is issued to each borrower.

Fisheries Loan:
To accelerate fish production BKB provides loan for excavation and re-excavation of ponds, development of marshy lands, establishment of fish hatcheries and new fisheries projects. The Loans are given in the following sub sectors: Fish culture in existing pond/tank Fish culture by re-excavation of old/derelict tank/tank Fish culture by excavation of new tank/tank

Shrimp culture:
Shrimp culture in traditional system (Bagda or Tiger Shrimp) Shrimp culture in scientific system Shrimp culture in semi-intensive method Prawn culture in sweet water (Galda) This loan is given mainly in coastal areas for developed technology based shrimp culture.Fish & Shrimp hatchery (fingerlings production): Fingerlings production in sweet water Shrimp fingerlings production (fingerlings of commercially profitable technology).

Live Stock Loan:

Livestock sector plays an important role in the development of agriculture. BKB provides loan for Bullock, Milch Cow, Goat, Beef fattening and other draft animals. It is basically medium Term Loan. Under Livestock head BKB provides loans for Bullocks, Milch cow, Goatery, andBeef Fattening job. Aim of the projects is creation of self-employment. In beef fattening programone person gets Tk. 25,000 for purchasing five calves. The calves are to be nourished

and brought up in scientific way to make them sellable, healthy cows. This is a collateral free, supervised loanBeef Fattening Program: With a view to creating self-employment for the poor and un-employed people of the country the bank has introduced a new program titled "Beef Fattening".