Rupali Bank

1
Deposit and loan scheme of banking sector in Bangladesh: A Case Study On Rupali
Bank Ltd.
CHAPTER-ONE
INTRODUCTION
RUPALI BANK LIMITED
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Bank Ltd.
INTRODUCTION
HISTORICAL BACKGROUND
Rupali Bank Ltd. was constituted with the merger of 3 (three) erstwhile
commercial banks i.e. Muslim Commercial
Bank Ltd. Australasia Bank
Ltd. and Standard Banks Ltd. operated in the then Pakistan on March
26, 1972 under the Bangladesh Banks (Nationalization) Order 1972 (P.O.
No.
26
of
1972),
with
all
their
assets,
benefi ts,
rights,
powers,
authorities, privileges, liabilities, borrowings and obligations. Rupali

Bank worked as a nationalized commercial bank till December 13, 1986.
Rupali Bank Ltd. emerged as the largest Public Limited Banking Company of the
country on December 14, 1986.
1. Deposit and loan scheme of Rupali Bank Ltd.
1.1 Deposit scheme of Rupali bank

1.1.1 Rupali deposit scheme (RDS)
Rupali deposit scheme is an installment based savings scheme of Rupali Bank for a
single individual. Rupali Bank offers competitive interest rates and installments
that are affordable for customers.
Monthly deposit:
The minimum monthly deposit is BDT 500. One may deposit any amount in the
multiples of BDT 500, subject to a maximum of BDT 5000.
Number of RDS Account: Only one account in an individual name.
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Bank Ltd.
Who can apply?

Any Bangladeshi citizen, 18 years or over is eligible to avail the facility of Rupali
Bank RDS scheme. Account can not be opened by minor or in joint name.
Closure of account
The account will immediately cease to operate in case of the following:
Death of the account holder
Failure to pay 3 consecutive installments
Rate of interest: 7%
Documentation:
To open a RDS account, one will be required to do the followings:
Fulfilling account opening formalities (proper introduction and photograph)
Filling in RDS application form
Rupali Deposit scheme: Monthly installment VS maturity value

Monthly deposit amount
Maturity
500
1000
1500
2000
3000
5000
years
35773
71547
107321
143095
214642
357738
value
after
5 Maturity value after

10 years
85860
171721
257582
343442
515164
858607
Miscellaneous:
Tax or charges will be imposed by govt. order (if any)
Authority deserves for any alteration of interest rate or addition or amendment.
1.1.2. Rupali Monthly earning scheme: (RMES)
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Bank Ltd.
There is a substantial demand of monthly earning long term deposit schemes

among the retired service holders and wage earners residing abroad who want to
help their dependants and relatives by contributing a certain amount of money on
monthly basis from the interest of their one time deposit with the Bank. Again
there are persons who want to meet day to day expense of their families out of
monthly earning that may be received on their long term deposits.
Rupali Bank Ltd. as a pioneer of welfare banking is receiving demands from the
vast majority for introduction of attractive monthly earning scheme to encourage
them to meet their above needs out of earnings of their deposit.
One time deposit amount:
One time deposit amount is at least TK=50000/- and its multiple (i.e.
100000,
150000, 200000, 250000) there is no limit of maximum amount.

Period: Three years, interest note is 8% and Five years interest note is 8.50%
Account Open: One time
deposit account may be opened in individual or
institution name.
Credit facility:
80% of deposit and interest rate will be above 3% on deposit
interest rate.
Sample calculation of Rupali monthly earning scheme (RMES)

One time deposit
Term -3years interest note Term-5 years interest note

8% per month earnings 8.50% per month earnings
TK= 100000/=
after tax
TK= 600/=
after tax
TK=637/=
TK = 200000/=
TK= 1200/=
TK=1274/=
1.1.3. Fixed deposit:

There are many people who want to deposit them money for a certain period for
increasing their fund / capital. After certain period they withdraw deposited money
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Bank Ltd.
with interest. Rupali Bank has fixed deposit scheme with competitive interest rate.
The following chart shows the picture of this scheme.
Term/Period of one time deposit
Three months
Six months above less than one year
One year and less than Two year
Two year and up to 3 years
Rate of interest
7.50%
7.75%
8%
8.5%
1.2 Loan scheme of Rupali Bank Ltd.

1.2.1 PERSONAL
LOANS
In response of the increasing demand, a new loan scheme in the name and style of
Personal Loan has been introduced. The main objective of this loan scheme is to
meet up the emergency financial requirement of the customers. No doubt this is the
loan scheme to face the urgent financial needs and that is why it may be termed as
Any purpose loan The salient features of this loan scheme are mentioned below:Name of the loan scheme: Personal Loan.
Objectives
Customer segment
: To meet the urgent financial needs of the customers.

:
*Employees of reputed Multi National Companies (MNCS) and large local corporate.
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Bank Ltd.
*Employees of medium sized or mid range local companies such as reputed

schools, pathology labs, hospitals, restaurants, hotels, newspapers, airlines, travel
agencies, real state developers, reputed companies, NGOs, aid agencies, UN bodies,
reputed trading & business firm and all other salaried employees including
Government
Employees
(except
Rupali
Bank
Ltd.
employees
and
their
spouse/parents) etc. who has the means and capacity to repay bank loan.
1. Purpose:
To meet up the miscellaneous financial requirement, such as:*House renovation
*Marriages in the family
*Advance rental payments
*Hospitalization or other emergency medical needs,
*Trips abroad
*Others.
2. Age limit
Minimum 25 years. Maximum 60 years (including loan maturity period)

3. Minimum service length
4. Loan size
: Minimum 3 years confirmed service length.

:
Maximum TK.500000/= (Five Lac)

6. Security
* Letter of introduction from the employers.

* Letter of undertaking for salary and terminal benefits
assessment
* Personal Guarantee of spouse / parents.
* Bank statements for last Six months.
* Personal Net worth Statement.
* Post dated cheques equivalent to 48 monthly installments.
* One undated blank cheque (for future default covering full
Loan with interest)
*CF 1, 2, 6 & 11 to be obtained as applicable
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Bank Ltd.
*3rd party Guarantee of an individual having minimum solvency

/ Income not less than that of the borrower supported
By income proof
7. Loan period
Minimum: 12 months
Maximum: 48 months
8. Disbursement mode
By making credits to customers savings / current account maintained in the bank

branch
9. Repayment method
: Equal monthly installments.
10. Interest rate
: 13% (Changeable)
11. First repayment date
May be one month after the date of customers availing the loan
12. Debt Burden Ratio (DBR %) :
A maximum of 80% based on Net monthly salary.
13. Verification of personal details:
Bank official will verify the addresses both present and permanent, all telephone
numbers of borrower, guarantor, referee, employment/occupational details, invoice
etc. this will be a physical verification in all cases.
After the verification is done, the verification officer will submit a report on their
findings in the prescribed form. The will be kept attached to the borrowers loan file.
14. Substantiation of income
Following as appropriate
i.
ii.
iii.
iv.
Salary certificate/ Salary Slip.

Bank statements.
Income tax returns of last period (where applicable).
Any other document that may stands as a proof of income.
15. Present address
: Borrower must reside for at least 12 months in the
same address.
16. Restrictions on purpose of the facility:
Though specific disclosure of a need is not a mandatory requirement on customers
part, yet no facilities can be granted for purpose that are legally in contradiction in
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Bank Ltd.
the law of the land. It is therefore, advisable that the dealing officers should know
the purpose of the facility and record the same.
17. Sanctioning and approval power:
Initially Branch manager can disburse up to TK 5.00 be Zonal head countering
after verification.
18. Loan processing fee:
Loan amount up to TK 1 Lac TK 500/=.
19. Special terms and conditions:
a. In default of repayment of any three installment of loan, legal action should
be taken to realize the full loan.
b. The documentation and legal aspects of all kinds of loans sanctioned by this
bank will also be followed in this loan scheme meticulously.
c. All up-to-date clean CIB report should be taken before disbursement of this
loan.
1.2.2 PROFESSIONAL LOANS

The professional personnel like established economist, Chartered Accountant,
Doctor, Engineers, Computer personnel or highly qualified other professionals of
the society may be considered as a potential sector of Banks lending. Such kinds of
lending will ensure the financial assistance to the professional personnel to support
their small scale purchase of different equipment tools and small machineries for
their installation at their business sites / offices.
1. Name of the loan scheme: Professional loan.
2. Customer segment :
Any citizen of Bangladesh who has the means and capacity to repay Bank loan
and engaged in the following professions as self - employed or salaried people:
Economist
Chartered Accountant
Doctors of Medical Professionals (not less than MBBS)
Engineers / Architects
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Bank Ltd.
IT professionals
Management Consultants
Highly qualified other professionals
3. Purpose :
For purchase of items to support professional need, such as: Purchase of X ray Machine.
Medical beds
Ultra Sonogram machine
Engineering / mechanical tools, or to set up of an office / chamber on a
small scales
Others
4. Nationality :
Bangladeshi
5. Age limit :
Minimum 25 years
Maximum 60 years
6. Minimum service / length of business :
For salaried individual, must be confirmed employee of a relevant firm /
office
For self employed individual, a business record of minimum 3 years
7. Minimum income :
2 times of monthly loan installment for salaried personnel
3 times of monthly loan installment for other profession

8. Loan size / limit :
Minimum: Up to Tk. 50,000/= (without collateral)
Maximum: From Tk. 50,001/- to Tk. 5, 00,000 (with collateral)
9. Loan to price ratio / margin financing: 80% of the cost of the item.
10. Loan period :
Minimum: 12 months
Maximum: 60 months
11. Interest rate : 12 % quarterly Compound (rate of interest changeable)
12. Disbursement mode: wherever possible, payment to be made by issuing
P.O in venders name.
13. Repayment method: Equal monthly installment
14. Debt Burden Ratio (DBR %)
:
33% of monthly income i.e. monthly personal income at least 3 (Three) times
of installment amount
15. Securities / collateral:
(a) Up to Tk. 1 (one)lac:
Original certificate of terminal examination which will be kept in the
bank branch until full liquidation / adjustment of full loan with
interest
Personal Guarantee of spouse / parents
3rd party Guarantee of an individual having minimum solvency /
income not less than that of the borrower supported by income proof.
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Bank Ltd.
Post dated cheques for each 12 monthly installment.

One undated cheque for full loan value including full interest to be
taken in advance.
Certificate from registration authority.
CF 1, 2, 6, 8, 10,10A& 11 to be obtained as applicable.
(b) Above TK.1 (one)lac to 5(five)
Registered mortgage of immovable properties covering 200% of loan
limit or pledge of FDR/Wage Earners Development Bonds/ICB unit
certificate of value covering 120% of the loan limit.
Personal Guarantee of spouse /parents.
3rd
party
Guarantee
of
solvency/income not less
an
individual
having
minimum
than that of the borrower
supported by income proof.
Hypothecation over purchased assets.

Comprehensive insurance over assets (Policy must be renewed every
year and copy of the policy must be submitted to the bank).

Post dated cheques for each 12 monthly installment.
One undated cheque for full loan value including full interest to be
taken in advance.
Certificate from registration authority.
CF1, 2, 6, 8, 10, 10A&11 to be obtained as applicable.
16. Verification of personal details and quotation :
Details of an application have to be verified before an approval is
accorded.
Letter from employer with details of employment and salary.
Borrower and Guarantors (if any) details (address- both present and
permanent all telephone numbers of residence, Office & Mobile no.)

Personal net worth statement.
Quotation of the item has to be purchased/Item quotation is required.
Referees details.
Bank statements.
17. Substantiation of income :
Proper substantiation of income will be mandatory.
All or any of the following original/true copy of original (accepted only
after seeing true originals) documents accepted for the purpose.

Last tax return.
Bank statements for minimum of last 6 months.
Personal net worth statements.
Any other document that may stand as a proof of income.
18. Approval power and loan limit :
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Bank Ltd.
Designation
Limit
SPO(Branch Manager)
Up to TK. 50,000/-
AGM(Branch /Zone/Head office)
From TK. 50,001/- To TK. 75,000/-
DGM(Branch /Zone/Head office)
From TK. 75,001/- TK. 1,00,000/-
GM of Head office
From TK. 1,00,001/- to TK. 5,00,000/-
19. Processing of loan proposal:

Borrower will have to apply for a loan under this loan scheme to the designated
Branches in the prescribed loan application from and submit other necessary
papers and documents. Branches will process the loan proposal and if found
correct. Branch incumbent will sanction the loan under his/her approval power.
The loan proposal and beyond the sanctioning power will have to be sent to the
next higher sanctioning authority with specific opinion and re commendation for
approval.
20. Loan processing fee:
Loan amount up to Tk. 1 (one) lac Tk. 500 /=
Loan above Tk. 1 (one) lac Tk. 1000 /=
21. Special terms and conditions:
a) In default of repayment of any three installment of loan, legal action
should be taken to realize the full loan forth with without fail.
b) The documentation and legal aspects of all kinds of loans sanctioned by
this Bank will also be followed in this loan scheme meticulously.
c) An up to date clean CIB Report should be taken before disbursement
of this loan.
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Bank Ltd.
1.2.3 Car Loan

1) Type of car:
New and reconditioned car
2) Loan limit:
Highest 10.00 lac
3) Qualification of loan application :

(i)Executive of organization
(ii) Professionals
(iii) Businessman
4) Margin : 40%
5) Rate of interest : 13% (changeable)
6) Payment period :
(i)
48 months
(ii)
Equal monthly installment with interest
(iii)
Party or one time payment is also allowed.
7) Security :
(i)
DP note , CF 11 ,8A
(ii)
Car registration in favor of jointly Bank and borrower
(iii)
Personal guarantee of borrower
(iv)
Employers guarantee
(v)
3 quotations from supplier firm
(vi)
Post dated cheque for every installment
8) Insurance: Car insurance must be ensured
9) Approval authority: Zonal head for branches and branch head for corporate
branch
10) Rebate: 1 % if all installments paid timely.
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Bank Ltd.
1.2.4 House Building Loan

1.2.4.1 Principles of selection of borrower
Individuals, partnership firm, public & private Ltd. company will be eligible
for receiving such loan for the purpose of general house building (Residential
), commercial house building , residential cum commercial house building,
Flat house building for sale & for buying flat.

Minor will not be eligible for this loan.
Applicant must be owner of land and client of bank.
Land location should be in City Corporation or in any commercial place.
If land is allotted by RAJUK or any divisional development authority,
approval letter should be taken by such authority for giving registered
mortgage in favor of bank.

There should be at least 12 feet road and connection with proposed building.
And utility facilities (eg. Electricity, gas, water supply) must be available.
The area of land must be at least 2 katha (3.30 decimal) and proposed land
must be viti.
Application for Extension of old building can also be accepted if previous
construction is strong.
In case of married borrower his wife or her husband must be guarantor.
Approved design of house by authority, approval letter for house building,
estimated cost of house and expected sent for house and other related paper
should be enclosed with loan application.
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Bank Ltd.
1.2.4.2 Disbursement mode:
At least four installments in case of residential
house building. One time payment through pay order in case of flat buying. Before
Dishousement of every installment, progress report from branch manager and
engineer about proposed house building must be kept in loan file.
Serial
Type of loan
Highest limit
Rate
no.
1
Residential
house
2.00 crone
building loan
Commercial
house
According to 13%
building loan
Extension of
house
4
5
(with
case to case
old
20.00 lac
interest
12%
of Period of loan
15 years
12 years
12%
15 years
According to 13%
15 years
strong
foundation)
Buying ready flat
Building flat to sell
case to case
According to 13%
2 years
case to case
Rebate: 1.50% on interest if all installments are paid within stipulated time.
1.2.5 Student loan

The purpose of this loan is to co-operate student specially those who want to study
abroad .They (student or Guardian) need bank solvency certificate in studying
abroad.
1. Qualification for applicant:
(i)
Student who is willing to study abroad, they are qualified to get
(ii)
this loan.
Applicant must be resident of Bangladesh.
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Bank Ltd.
(iii)
(iv)
Applicant must be student.

Admission seeking student should possess qualification according
to requirements of foreign Universities/Colleges.

2. Rules of application:
(i)
Application in white paper with resent two photographs should be
(ii)
taken.
Offer letter from foreign Universities/Colleges with other related
(iii)
(iv)
(v)
(vi)
(vii)
papers will be taken.

All educational certificates with passport.
Statement of education expenditure.
Photocopy of national ID card.
Character certificate from local authority.
Applicant must have a saving s account in related Bank branch
3. Loan limit:
and money of 15% margin must be deposited.
Highest 30.00 lac under 15% margin

4. Rate of interest 13% (changeable)
5. Period of loan: Highest 6(six) months. Not renewable.
6. Securities of loan:
(i)
CF, 1, 11, 19 should be taken before loan disbursement.
(ii)
Money of loan with margin must be deposited in saving account.
This account should be under lien. Letter of lien must be taken
(iii)
(iv)
from applicant.
After expiry loan will be adjusted by debiting saving a/c.
Letter of lien, letter of agreement and letter of authority must be
taken with consulting legal adviser.
7. Conditions:
(i)
No other student can apply for this loan without abroad going
(ii)
(iii)
student.
No Cheque Book will be issued in lien savings certificate.
To serenities whether all conditions are met according to offer
letter .
8. Approval authority of loan: Branch manager.
1.2.6 SME LOAN

Small and medium Enterprise Financing contributes to a positive impact in the
economy of the country. In developing countries like Bangladesh, the demand for
expanding SME business is increasing day by day. Even the donors are also
encouraging to expand the volume of such kinds of business to face the challenge
of poverty and to create employment opportunities in the country. Rupali Bank Ltd.
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Bank Ltd.
also play a vital role in this sector and can help to promote the expansion of SME
business in the country.
There are four product under SME financing.
These are
(1) Sahaj Rin

(2) Sulav Rin
(3) Businessman Rin
(4) Majari (medium) Rin
1.2.6.1 Sahaj Rin:

i.
ii.
iii.
Loan facilities up to 2.00 (two) lac

Proprietorship and partnership firm only included in this scheme
Loan will be approved by branch manager (But loan information must be
iv.
furnished by weekend)
Personal guarantee of a solvent family member and 3 rd party guarantee of an
acceptable individual or collateral security of equal value of loan will be
v.
taken against this loan.

A plan about the use of loan will be taken by borrower. And how much
worker / employee (Full time or part time) will be employed should be
vi.
mentioned in this plan.

Post dated cheques equivalent to loan installment with interest and one
vii.
viii.
cheque covering full loan from borrower.

Loan processing fee TK= 1000/=(Nonrefundable)
Trade license, photograph, partnership deed (if applicable) stock report,
ix.
Income& Expenditure statement will be taken from borrower.

Term loan (1-3) year by monthly or quarterly installment and exiting rules
x.
xi.
will be applicable in case of working capital / continuous loan.

Interest rate 11 % (changeable), 1% rebate in case of regular payment.
Interest rate 10% in following specialized sectors.
(i)
Solar installation.
(ii)
Bio-gas based project.
(iii)
Agro based project.
(iv)
Skillness (at least three months Training from government approved
institution)
1.2.6.2 Sulav Rin:

i.
ii.
Loan facilities up to 5.00 (five) lac

Proprietorship & partnership firm included in this scheme. Besides
iii.
professionals (engineer, doctors, lawyers etc.) will be given priority.

Inially branch manager will approve and Zonal head will counternigh after
iv.
verification
Personal guarantee of a solvent family member and Declaration of asset
(equimlent to loan amount) must be given. 3 rd party guarantee of an
acceptable individual to Bank will be taken.
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Bank Ltd.
v.
A plan about the use of loan will be taken by borrower. And how much
people (full time or part time) will get employment opportunity should be
vi.
mentioned in plan.
Post dated cheques equivalent to loan installment with interest and one
vii.
viii.
cheque covering full loan will be taken from borrower.

Loan processing fee TK = 5000/=(Nonrefundable)
Trade license, Rupali Bank account, photograph, partnership deed (if
ix.
applicable) stock report will be taken

Term loan (1-4) years by monthly or quarterly installment and exiting rules
x.
xi.
xii.
will be applicable in case of working capital / continuous loan.

Interest rate 12 % (changeable), 1% rebate in case of regular payment.
i.
Solar installation.
ii.
iii.
Agro based project.
Female entrepreneur will get 10.00 lac loan facilities under this
scheme by complying same formalities.
1.2.6.3 Business Rin

a. Loan facility up to 3 (three) crore.
b. Approval authority
1. Managing director : Above 30.00 to 3.crore
2. DGM (Zonal head): Upto 30.00 lac
3. AGM
: Upto 20.00 lac
c. Personal guarantee of a solvent family member and collateral security of
forced sole Value equivalent to loan.
d. A detailed plan about the objective, uses and payment of loan must be
submitted. How much people will get employment opportunity (full time or
part time) must be mentioned in this plan.
e. Post dated cheques equivalent to loan installment with interest and one
f. Loan processing fee TK = 10000 /= (Nonrefundable)
g. Business license, trade license, Rupali Bank account,
photograph,
partnership deed (if applicable) Income expenditure statement, stock report,

and personal networth statement will be furnished.
h. Interest rate 13 % (changeable), 1 % rebate in case of regular payment
i. Interest rate 10% in following specialized sectors.
Solar installation.
Agro based project.
1.2.6.4 Mazari (medium) Rin:

(i) Loan facility above 3.00 core to 20.00 core.
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Bank Ltd.
(ii) Approval authority board of directors

(iii) Personal guarantee of a solvent family member and collateral security of
force sale value 1:1.25
(iv) A plan about the objective, use and payment of loan will be taken from
borrower. How much people (full time or part time) will work in this project
must be mentioned in this plan.
(v)Post dated cheques equivalent to loan installment with interest and one
(vi) Loan processing fee TK = 15000 /=(Nonrefundable)
(vii)
Business license, trade license, Rupali Bank account, photograph,

partnership
deed
(if
applicable),
profit
and
loss
statement,
memorandum or article of association, audited balancesheet, financial

(viii)
statement, stock report, and other related paper will be furnished.

In case of term loan period will be 1 5 years by monthly or quarterly
installment and in case of working capital, existing rules will be
applicable.
(ix)
Interest rate 13 % (changeable), 1 % rebate in case of regular payment
(x)
Solar installation.
Agro based project.
1.2.7 Household loan (consumer financing)

People of developing countries like Bangladesh earn low income. They can not
purchase household item like TV, refrigeration, Air cular etc. in spite of being
necessary. For this reason they cannot improve their life standard. In order to help
people specially limited income service holder to buy household item Rupali Bank
Ltd. introduce this loan scheme.
1.
Objectives of scheme:
(i)
To help people / service holder in buying house item.
(ii)
To help people / service holder in improving life standard.
2. Qualification of applicant:
2.1
Employee of government institution, semi government,
sector,
corporation and autonomous body, state owned commercial banks and

insurance company, universities, government college, government school and
madrasha , teacher of government primary, member of armed
(military, BGB, Police and Ansar)
forces
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Bank Ltd.
2.2 Besides Executives of NGOs, professional (doctor, engineer, lawyers,

chartered accountant, journalist etc.) and business.
3. Age of applicant: Age limit will be from 21 to 55 years.
4. Usages of loan:
Only in buying household item- such as refrigerator, TV, DVD, motorcycle, washing
machine, ac, sewing machine, personal computer.
5. Type of household item & highest loan limit:
Sl. No.
Types of item
Highest limit
Down
Interest
Period
16%
16%
16%
16%
2
2
2
2
16%
16%
16%
2 years
2 years
2 years
1
2
3
4
Refrigerator
Color TV
Motorcycle,
Personal
25000
20000
50000
75000
payment
25%
25%
25%
25%
5
6
7
computer
Washing Machine
Furniture
Air Cooler
20000
36000
30000
25%
25%
25%
years
years
years
years
5.1 Principles of borrower selection:

Incase
of
borrower
mentioned
in
2.1
serial,
personal
guarantee
of
employer/departmental head must be taken, loan proposal will be considered

according to their recommendation and guarantee. Personal guarantee from an
acceptable person to bank in case of borrower mentioned in 2.2.
6. Rules of application: Applicant must apply with prescribed bank form
mentioning name, address, monthly salary etc. At least 3 quotations of desired
articles will be submitted with application. Price of articles will be paid to seller/
supplier through bank draft/cheque/pay order. Cash memo will be in the name of
bank and it will be changed in favour of client after realizing payment of bank.
7. Loan approval power:
Designation
Manager (SPO)
Manager or Zonal
(AGM)
DGM
Up to TK.
0.50 Lac
Head 0.75 Lac
1.00 Lac
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Bank Ltd.
8. Security:
Letter of hypothecation and undertaking

Employers undertaking in case of service holder
DP note $ C.F. 11
9. Rules:
Installment size should not above 50% of monthly salary

1% rebate in case of timely payment
Any damage or repairing of product must be born by borrower. Registration
cost or license of product will be at the expense of borrower.

Only borrower will be articles/product, he has no right to rent or hand over
product without bank permission.
1.2.8 Export financing

An exporter requires finance at two stages, namely
1. Pre shipment stage &
2. Post shipment stage
We may classify export finance into two categories
1. Pre shipment credit &
2. Post shipment credit
1.2.8.1 Pre shipment credit:

Pre shipment credit, as the name suggests, is given to finance the activities of
an exporter prior to the actual shipment of goods for export. The purpose such
credit is to meet working capital needs starting from the point of purchasing of raw
materials to transportation of goods for export to foreign country. Before allowing
such credit to the exporters the Bank takes into consideration the credit
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Bank Ltd.
worthiness export performances of the exporters, together with all other necessary
information required for sanctioned the credit in accordance with the existing rule
sand regulations. Pre shipment credit is given for the following purposes:
(1)
(2)
(3)
(4)
(5)
(6)
Cash for local procurement and meeting related expenses

Procuring & Processing of goods for export
Packing & transporting of goods for export
Payment of Insurance Premium
Inspection fees
Freight charges etc.
An exporter can obtain credit facilities against lien on the irrevocable, confirmed,
and unrestricted export letter of credit.
Pre shipment credit takes the following forms:
1.
2.
3.
4.
5.
6.
Export cash credit (Hypothecation)

Export cash credit (Pledge)
Export cash credit against trust receipt.
Packing credit
Back to back letter of credit
Credit against Anticipatory letter of credit
1. Export cash credit (Hypothecation)

Under this arrangement a credit is sanctioned against hypothecation of the raw
materials or finished goods intended for export. Such facility is allowed to the first
class exporters. As the Bank has got no security in this case, expect charge
documents and lien of export L / C contact, Bank normally insists on the exporter
in furnishing collateral security. The letter of hypothecation creates a charge
against the merchandise in favor of the Bank but neither the ownership not the
possession is passed to it.
2. Export cash credit (Pledge)

Such credit facility is allowed against pledge of exportable goods or raw materials.
In this case cash credit facilities are extended against pledge of goods to be stored
in go down under Banks control by singing letter of pledge and other pledge
documents. The exporter surrenders the physical possession of the goods under
Banks effective control as security for payment of Bank dues. In the event of failure
of the exporter to honour his commitment, the Bank can sell the pledge
merchandise for recovery of the advance.
3. Export cash credit against trust receipt
22
Bank Ltd.
In this case, credit limit is sanctioned against trust receipt (T. R.).In this case also
unlike pledge, the exportable goods remain in the custody of the exporter. He is
required to execute a stamped export trust receipt in favor of the Bank. Where in a
declaration is made that goods purchased with financial assistance of Bank are
held by him in trust for the bank. This type of credit is granted when the exporter
wants to utilize the credit for processing, packing & rendering the goods in
exportable condition when it seems that exportable goods cannot be taken into
Banks custody. This facility is allowed only to the first class party and collateral
security is generally obtained in this case.
4. Packing credit:
In this case credit facilities are extended against security of railway receipt/
steamer/receipt/barge receipt/ truck receipt evidencing transportation of goods to
the port for shipment of the goods in addition to the usual charge documents and
lien of export letter of credit. This type of credit is sanctioned for transitional period
from dispatch of the goods till negotiation of the export documents. The drawings
under export cash credit limit are usually adjusted by drawings in packing credit
limit which is in turn liquidated by negotiation of export documents.
5. Back to back letter of credit:

Under this arrangement the bank finances export business by opening a letter of
credit on behalf of the exporter who has received a letter of credit from the overseas
but is not actual manufacturer or producer of the exportable goods. The letter of
credit is opened in favor of the producer or supplier within or outside of the
country. Since the letter of credit is opened on the strength of and of and backed by
another letter of credit it is called Back to Back credit. The need for the Back to
Back credit arise the beneficiary of the original (export) letter of credit may have to
procure the goods from the actual producer who may not supply the goods unless
its payment is guaranteed by the bank in form of letter of credit collateral security
before opening the letter of credit. The back to back letter of credit must conform
the terms and conditions of the original letter of credit with the following
exceptions:
1. Names of the original beneficiary shall be submitted by that of the actual
supplier.
2. The credit amount shall normally be lower than that of the original letter of
credit, the difference being the amount of profit the exporter exports to earn
from the deal.
3. The back to back letter of credit shall be made valid for shipment and
negotiation prior to expiry of the corresponding date.
23
Bank Ltd.
6. Advance against Anticipatory letter of credit (Red Clause L

/ C)
Under Red clause letter of credit, the opening bank authorizes the Advising bank /
negotiating bank to make advance to the beneficiary prior to shipment to enable
him to procure his exportable goods in anticipation of his effecting such authority
is printed / typed in red ink and in green ink on the top of the L/C is called Red
clause L/C.
The following documents papers are usually called for depending on the nature of
the export credit facility to be provided at the Pre shipment stage:
i.
Lien on confirmed irrevocable and unrestricted letter of credit from a first class
ii.
iii.
iv.
v.
vi.
Bank.
Letter of Hypothecation duly stamped
Letter of pledge duly stamped
Detailed stock statement duly verified by Bank officials
Insurance coverage under Bank mortgage clause
Letter of disclaimer to be signed by the owner of the go down in case of rented
vii.
viii.
ix.
x.
xi.
xii.
go down
Documents of little to goods
Trust Receipt
Export Credit Guarantee Scheme
Export from duly signed by the exporter
EPC / ERF duly certified by Bangladesh Bank
Change and other documents, if any
1.2.8.2 Post Shipment Credit

This type of credit refers to the credit facilities extended to the exporters by
commercial banks of the goods against export documents. Necessity for such credit
24
Bank Ltd.
arises as the exporter can not afford to wait for a long time for payment to local
manufacturers/ suppliers. Before extending such credit, it is necessary to obtain
report on creditworthiness the exporters and financial soundness of the buyers as
well as other relevant documents connected with the export in accordance with the
rules and regulations in force. Banks in our country extend post-shipment credit to
the exporters through:
1. Negotiation of Documents under L/C.
2. Purchase of DP & DA bills.
3. Advance against Export Bills surrendered for collection
1. Negotiation of Documents under L/C

Under this arrangement, after the goods are shipped, the exporter submits the
concerned documents to the negotiating bank for negotiation. The documents
should be negotiated strictly in accordance with the terms and conditions and
within the period mentioned in the letter of credit.
2. Purchase of DP &DA bills.

In such a case, the banks purchase/ discount the DP (Documents against
payment) and DA (documents against Acceptance) bills at rate published by the
Exchange Rate Committee of authorized dealers. While doing so, the Bank should
scrutinize all the export documents separately and minutely and clear instructions
are to be obtained from the drawer of the bill in regard to all important issues
related to the negotiation of the bills.
3. Advance against Export Bills for collection

Banks generally accept export bills for collection of proceeds when they are not
drawn under a L/C or when the document, even though drawn against an L/C
contains some discrepancies. Bills drawn under L/C, without any discrepancy in
the documents, are generally negotiated by the bank and the export gets the
money from the bank immediately. However, if the bill is not eligible for
negotiation, he may obtain advance from the banks against the security of export
bills. Banks may give advance ranging from 50 to 80 percent of the documents
value. In addition to the export bills, banks may ask for collateral security like a
guarantee by a third party and equitable/ registerd mortgage of property.
Rate of interest 8%
25
Bank Ltd.
1.2.9 Import Financing

One of the important functions of the commercial banks in the world is to
undertake import of merchandise into the country and payment of foreign exchange
towards the cost of the merchandise to foreign suppliers. In such an international
trade, because of distance involved, buyers and sellers do not know each other.
Therefore, assure these things to happen simultaneously by opening letter of credit
guaranteeing payment to seller and goods to buyer.
While opening letter of credit at the request of buyer, bank normally examines:
(i)
Buyers creditworthiness.
(ii)
Import Trade Regulations.
(iii)
Exchange Control Regulations.
(iv)
Suppliers Creditworthiness Report.
(v)
Marketability of goods.
The buyer must submit the following papers at the time of opening a letter of credit.
(i)
L/C application ( a guarantee executed by third party is also
(ii)
insisted)
Import License/ Import Authorization from or Import Registration
(iii)
(iv)
(v)
certificate as the case may be.

Indent/ Performa Invoice.
Insurance Cover Note.
IMP form and other documents/ papers etc.
1. Payment against documents (PAD)

The negotiating bank, on receipt of the shipping documents from the exporter,
scrutinizes the documents to ensure that they are in strict conformity with the
terms of L/C. If the documents are in order, the payment is effected by the
negotiating Bank to the beneficiary (exporter) and debit the opening Banks account
with it or claim reimbursement from the designated / reimbursing bank as
instructed by the opening bank and in fact, the amount so debited or lodging claim
for
reimbursement stands advanced on behalf of the importer. The shipping
documents along with debit advice are thereafter forwarded to the opening bank by
the designated / reimbursing bank.
If the shipping documents are found in order, the opening bank will lodge the
documents to their book by converting the foreign currency representing the bill
and foreign correspondent charges etc., and will respond to the debit entry
originated there against by the designated / reimbursing bank to the debit of
Payment Against Documents (PAD) account or Bill of Exchange (B / E) account
26
Bank Ltd.
as the case may be and an intimation is sent to the importer asking him to retire
the import bills immediately sending there with a cost memo indicating the amount
payable by the importer under different heads.
Thus, liability under the letter of credit is converted to banks advance. It is a prac
ice to allow the importer to retire the documents till the ship carrying the goods
arrives. Normally, ontstanding under PAD should not take more than 21 days for
adjustment. If the importer retires the import bill against payment, the transaction
ends there and the outstanding under PAD stands liquidated.
2.Loan against Imported Merchandise (LIM)

At the time of opening the letter of credit the banks obtain from the importer an
agreement on stamped paper which provides for financing and, if necessary,
clearance and storage of goods by debiting importers account at his risk and
responsibility.
Importer may also request the bank on banks prescribed form for clearance of
goods from the port when the consignment arrives. In most of the cases, banks
extend credit facility to the importer for retirement and clearance of the
consignment. In that case, the bank recovers further margin from the importer to
cover the customs duty, sales tax or VAT etc. A definite repayment schedule is also
given to the importer to take delivery of the goods from banks custody against
payment.
In case the importer does not come forward to retire the documents inspite of
repeated reminders, it is in the interest of the credit issuing bank to take proper
care of the goods and, on forced circumstances, clear the imported consignment on
arrival of the same for fear of heavy demurrage at the which adds to the burden of
commitment.
In both the cases, whether the importer requests the bank for clearance of goods
or fails for retirement of documents against payment, the liabilities under PAD or
B/E is converted to Loan against Imported Merchandise (LIM) account and the
overdue interest from the date of accompanying Bill of Exchange or negotiation date
to the date of transfer to LIM liability.
27
Bank Ltd.
The advances against merchandise account is a loan account and only amounts for
clearance charges , such as, customs duty, sales tax or VAT etc., are allowed to be
debited to LIM account.
After clearance, consignments are stored in banks go down under its effective
control waiting for taking delivery by the importer on full payment of banks
liability. Normally part delivery is not allowed while on LIM account. When the
delivery in part is desired by the importer, the LIM is converted into Cash Credit
account retaining proper margin and executing proper charge documents. The
delivery is effective there after on obtaining pro rata payment till adjustment of the
entire liability.
Rate of interest 14%
Documents
1.
2.
3.
4.
5.
6.
Demand promissory note

Letter of continuity
Letter of agreement of opening letter of credit
Letter of Lien
Letter of indemnity (in case of clearance of consignment)
Letter of guarantee
28
Bank Ltd.
CHAPTER-TWO
OVERVIEW OF THE COMPANY
RUPALI BANK LIMITED
29
Bank Ltd.
30
Bank Ltd.
OVERVIEW OF THE COMPANY

2.1 CORPORATE PROFILE
Present Capital Structure:
Authorized Capital
: Tk. 7000 million (US$ 120.70 million)
Paid up Capital
: Tk. 1250 million (US$ 21.55 million)
Break up of paid up Capital:

Government shareholding
: 93.11%
Private shareholding
: 06.89%
Present Share Structure:

Total Number of share (Each lot 10) : 1, 25, 00,000
Share Demated by
Shareholders as on
: 749306
31.03.2010
Number of Branches:
Rupali Bank operates through 492 branches. It is linked to its foreign
correspondents all over the world.
Number of Zones and Corporate Offices:

The Corporate Head Office of the Bank is located at Dhaka with one local office
(Main Branch), four corporate branches at Dhaka, one in Chittagong and twentyfive zonal offices all over the country.
Number of Employees:
The total number of employees is 4293.
Board of Directors:
31
Bank Ltd.
The Board of Directors is composed of eight members headed by a

Chairman and the directors comprised of representatives from both
public and private sectors and shareholders.
Chief Executive:
The Bank is headed by the Managing Director (Chief executive) who is a
reputed professional Banker.
2.2 Vision, Mission, Objectives, Guiding Principles of Rupali

Bank Ltd.
Vision:
Rupali Bank Ltd. dreams poverty free Bangladesh, where sports & athletics,
science and education, health and hygiene, clean and pollution free environment
and above all a society based on morality make all our lives worth living.
Mission:
The Bank participates actively in socio-economic development of the
countr y by performing commercially viable and socially desirable banking
functions.
Objectives:
The overall goal is to develop the bank into a people oriented sustainable
and quality commercial enterprise with all modern facilities and systems.
The specifi c objectives are.
Development a customer oriented and quality focused (CQF) system

in place.
Identifying
and selection clients through the use of best tools and
judgment, and taking the responsibility of establishing professional

relationship with clients through Appreciative inquir y (AI) and close
monitoring of their performance.
Reducing classifi ed loans at a comparable level of other banks and

Change branches which are losing units.
32
Bank Ltd.
Developing a community focused social banking system in close

collaboration and partnership with other organizations.
Implementing innovation in the bank through human resources

development information technology, partnership with development
agencies, banks, etc.
Guiding Principles of Rupali Bank Ltd.
Transparency and accountability.
Zero tolerance on corruption and ineffi ciency
Flexibility in operation
Constant review of clients performance
Other guiding principles includes decentralization and devolution,

defi ning roles and responsibilities, use of state of art modern
technologies, bottom-up approach in planning, partnership etc.
2.3 Rupali Bank Corporate Governance:

Rupali
Bank
believes
in
the
continued
improvement
of
corporate
governance. This in turn has led the bank to commit considerable

resources and implement internally accepted corporate standards in its
day-to-day operations.
Being a public limited company, the Board of Directors of Bank has a pivotal role to
play in meeting all stakeholders interest. The Board of directors and the
Management team of Rupali Bank are committed to maintaining effective corporate
governance through a culture of accountability, transparency, well understood
polices and procedures. The Board of Directors and the Management team also
persevere to maintain compliance of all laws taken by Bangladesh Bank.
Rupali Bank is truly transparent that performs banking functions at the highest
level of integrity and accountability on global standard.
33
Bank Ltd.
2.4 Corporate Social Responsibility (CSR)

Rupali Bank Ltd. RBL has been rendering various services for attaining greater
social goals and objectives. In this process, we aim to the development of the
society as a whole and fulfillment of corporate social obligation in particular. To
reinforce CSR activities, the bank has undertaken fresh initiatives in line with
Bangladesh Bank guidelines in the areas of social service. Internship employment
of poor, sports and culture, banking for the disadvantaged group, disaster and
relief and activities.
Social Services:
RBL has been rendering social services as per laid down guidelines of the govt. The
bank has been disbursing pension of govt. employees, monthly salary of teachers,
govt. and semi govt. officials without charge.
Internship:
Rupali Bank has been rendering internship to students of various educational

institutes at the level of graduate and post graduate.
Empowerment of Poor:
Rupali Bank Ltd. has been providing wholesale credit facilities to different micro
credit institution who are in turn lending amongst the poor people in different
income generating activities (IGA)
Banking Service for the Disadvantaged Groups:
34
Bank Ltd.
With 492 branches all over Bangladesh RBL could reach the banking services to
the disadvantages group with the aim to encourage them mobilization of their hard
earned saving and creation of investment opportunities for them.
Disaster Relief:
Rupali Bank Ltd. Always stands beside the helpless people at the times of natural
calamities and extends helping hands to the sufferers. RBL donate TK. 15 Lac to
the help the victims of cyclone Ayla to the relief fund of the Prime Minister.
35
Bank Ltd.
2.5 Organogram of Rupali Bank Ltd. (RBL)
Managing
Director
Deputy
Deputy
Managing
Managing
Director
Director
General
General
General
General
Manager
Manager
Manager
Manager
Deputy General
Deputy
Deputy
Manager (Zonal
General
General
head)
Manager
Manager Head
(Head of Cor.
of Department
Branch)
(in head office)
Branch
Manager
Officers
Officers
Assistant
& Staff
General
Manager
& Staff
Senior
Principal
Officer
Principal
Officer
Senior
Officer
Officer
36
Bank Ltd.
Managing
Director
Deputy
Office
Managing
Assistant
Director
2.6 Business growth of banking sector in Bangladesh and

growth of Rupali bank.
About 54 schedule banks operate banking business in our countr y. Ever y

year these banks open new branch in various areas to increase their
business.
Undoubtedly
banks
are
playing
pivotal
role
in
economic
development through fund transfer from surplus sector to defi cit sector.
Banks fi nance in industrial, agriculture and trading sector to increase
output/production by creating employment opportunity for people. We
fi nd that ever y bank (Government Bank & private bank) earn handsome
increasing operating profi t. Some banks have merchant banking wing to
operate business in share market. Many private banks are opening
branch in rual areas also to facilitate banking ser vice to common people.
As a result common people are benefi ted through getting banking ser vice
(eg. credit facilities, remittance facilities, deposit scheme etc). Banks are
also making profi t to increase banking ser vice. The following chart
indicates increased profi t of banking sector in consecutive three year. It
proves that expansion of banking business is taking place over the years.
Operating profit of bank (Fig in crore)

Name of Bank
Sonali Bank
Janata Bank
Arani Bank
Rupali Bank
Islami Bank
AB Bank
Prime Bank
Pubali Bank
National Bank
Southeast Bank
Brac Bank
City Bank
2010
1000
1150
1077
250
1143
1000
770
590
1025
650
490
400
2009
800
800
200
850
500
580
427
350
465
400
230
2008
636
700
632
101
832
465
430
365
350
300
300
170
37
Bank Ltd.
Exim Bnak
UCBL
Dhaka Bank
NCC Bank
DBBL
Uttara Bank
Shahjalal Bank
Eastern Bank
Bank Asia
Mercantile Bank
IFIC Bank
One Bank
Al-Arafa Bank
Jamuna Bank
First
Security
607
512
370
410
450
302
388
400
455
300
419
207
300
253
121
Bank
Commerce Bank
34
320
340
270
314
260
250
210
315
300
200
162
181
198
76
267
260
254
236
218
215
207
200
195
193
178
175
158
109
25
18
Source: Prothom Alo: 02.01.2011

We can see here that net operating profit of Rupali bank in 2008 is Tk 101crore and
in 2009,it is Tk 200 crore and in 2010 profit is Tk 250 crore Profit increased 100%
in 2009 and 25% in 2010.
38
Bank Ltd.
2.7 Financial System of Bangladesh

Financial system is a set of institutional arrangement through which
fi nancial surplus in the economy are mobilized from surplus Units and
transferred to defi cit Unit.
Financial System of Bangladesh
Financial
Financial
Financial
institution
Instruments
Market
Banking
Non-
Direct /
Indirect /
Financial
banking
primary
secondary
institution
Financial
institution
Loans,
Deposit,
share &
Mutual
Debenture
Fund
No security
market
Money market
Capital
market
39
Bank Ltd.
Security
market
New issue
Secondary market (OTC)
Banking
market (IPO)
2.8 Innovation of Different Financial Products & Services

Impact on banks Profitability
Nonbanking
40
Bank Ltd.
Innovation means introducing new ideas, methods etc. On the other hand,
Financial Products refer to products or services provided by a bank or other
financial institution. It includes deposits, loans, remittance services, lease,
insurance policies etc. with or without other ancillary services/benefits. So,
Innovation of Financial Products & Services means introducing new financial
products & services. The aim is to meet customers changing needs and thereby to
gain maximum business and profit.
Ways of Innovation: Innovation of financial products & services can be done in

mainly three ways: (1) by introducing completely self-innovated new products, (2) by
developing the existing products and (3) by introducing prevailing new products of
other banks/financial institutions. It is however, noted that new product
development is not an easy task. It needs effort, time and talent.
Importance of Innovation: Developing new product ideas and effective strategies

to go with them is often the key to companys success and survival. It has become
all the important considering the rapid changes in customers tastes, needs,
technology and competition. Besides, it has become pertinent to the banks in many
countries like Bangladesh following the gradual increase of risks in different
financial products resulting in serious adverse effects on assets quality, revenue
and profitability.
Risk of New Products: A new product may fail for many reasons and thus it may
affect the companys profitability adversely. The reasons of failure may be summed
up as under.
Not offering a unique benefit or under-estimating the competitors are

common mistakes.
Sometimes the idea is good but initial cost is too high. The unit cost of the
product may also be more than what was expected.
Some companies rush to introduce a product in the market which is already
over saturated or sick.
Some companies rush to introduce a product in the market without
developing a complete marketing plan.
41
Bank Ltd.
Fast pace of change for many products may be a key to competitive

advantage. But failure to fast enough can be a problem.
Steps to Succeed: To be able to move quickly and also avoid expensive newproduct failures, it is useful to following and organized new-product development
process, which moves logically through the following five steps:
Idea Generation to search for new products.

Screening new-product ideas in order to get good ideas and drop poor ones
as soon as possible.
Concept Testing, i.e. testing new-product concept with a group of target
consumers to find out if the concepts have strong consumer appeal.
Product Development, i.e. developing the product concept into a physical
product in order to ensure that the product idea can be turned into a
workable product.
Commercialization, i.e. introducing the new product into the market.
Scenario in Bangladesh: The banks and financial institutions in Bangladesh have

already introduced many new financial products in order to improve their asset
quality and to increase profitability. These innovations are on the rise following
technological development. The new products include:
Introducing E-Commerce for marketing products over the internet.

Introducing electronic products like ATM, Credit Card, Debit Card.
One-stop service.
On-line banking.
Merchant banking.
Loan syndication.
Improving deposit mix by introducing different attractive new deposit
products.
Improving loan portfolio by introducing new loan products like consumers
credit, loans to professional, loans to SME etc.
42
Bank Ltd.
2.9 Financial report of Rupali bnak ltd.

2.9.1 Balance sheet
RUPALI BANK LIMITED

BALANCE SHEET
AS AT DECEMBER 31, 2009
Notes
Particulars
2009
Taka
2008
Taka
Property & Assets
1,370,642,112
1,453,582,275
Cash
3,915,764,720
5,154,344,688
5,286,406,832
6,608,196,961
4,182,145
4,182,145
308,043,540
308,043,540
3
Cash in hand (Including Foreign
Currencies)
Balance with other Banks & Financial

Institutions
4
In Bangladesh
Outside Bangladesh
43
Bank Ltd.
5,554,100,000
4,474,700,000
13,633,834,449
47,143,225,239
669,169,955
14,303,004,404
1,886,810,862
12,545,717,273
50,078,178,046
47,143,225,239
2,265,993,144
52,344,171,190
1,886,810,862
49,030,036,101
2,332,537,980
2,323,315,942
7,755,650,032
87,580,052,583
7,021,822,063
82,311,831,880
16,468,821
23,303,233
12
19,042,377,933
18,128,695,812
Current Deposits and other accounts
29,450,363,670
27,684,681,464
Savings Deposits
24,496,404,552
24,474,189,893
72,989,146,155
70,287,567,169
923,634,239
920,411,338
73,912,780,394
19,232,576,344
71,207,978,507
19,249,699,782
93,145,356,738
93161825559
90,457,678,289
90,480,981,522
Money at Call on Short Notice
5
Investments
6
Government
Others
Loans &Advances
7
Loans, Cash Credits, Overdrafts etc.
Bill discounted and purchased
Premises and Fixed Assets
Other Assets
8
Non-Banking Assets
9
Total Assets
10
Capital & Liabilities
Liabilities
Borrowing from other banks
and financial institutions and agents
11
Deposits and Other accounts
Fixed Deposits
Bills Payable
Other Liabilities
13
Total Liabilities
44
Bank Ltd.
Notes
Particulars
2009
Taka
2008
Taka
Capital & Shareholders Equity

Paid
up
Capital
1,250,000,000
1,250,000,000
74,953,800
352,353,800
335,562,500
335,562,500
Reserve against Receipts of net asset
1,250,231,893
916,533,197
value of
3,594,213,893
1,897,926,549
(12,086,734,230)
(12,921,525,688)
5,286,406,832
87,580,052,583
6,608,196,961
82,311,831,880
14
Share
Money
deposit
15
Karachi
Branch
16
Statutory
reserve
17
Other
reserves
18
Balance of Profit and Loss Account
19
Total Shareholders Equity
Total Liabilities &Shareholders equity
Off Balance Sheet Items
20
Contra Accounts:
Contingent Liabilities
Letter of Guarantee
Letter of Credit
Bills for collection
Other contingent Liability (DC Notes)
Total other contingent
3279362486
4469340178
2033228291
2216891723
27377589811
27562520463
2124120273
1581135263
1263561
1263561
31536201936
31361811010
Other Commitment
--Total contingent Liabilities
--31536201936
31361811010
45
Bank Ltd.
2.9.2 Profit and loss statement.

RUPALI BANK LIMITED
Profit & Loss Account
For the year ended December 31, 2009
Notes
2009
Taka
Particulars
Operating Income
Interest
Income
2008
Taka
497,8543,342
4090581930
3,238,758,184
3080511189
1,739,785,158
1010070741
1,558,950,825
1254382713
701,879,827
499021624
2,941,081
5726227
21
Less-Interest
Paid
Borrowings etc.
on
Deposits
&
22
Net Interest Income

Interest
from
Investment
23
Commission, Exchange, Service Charges
etc.
Other
25
24
Operating
Income
46
Bank Ltd.
Total Operating Income (1)
4,003,556,891
2769201302
1,390,433,790
1204929899
364,020
361080
908,000
868000
132,432,004
119226638
Operating Expenses
Salary & Allowance
658,967
26
(8,353,691)
Managing Directors Fee
500,000
(2951093)
33,832,079
(2388996)
--
550000
54,106,664
32909845
299,962,741
--
Directors Fee
Rent, Taxes, Insurance, Electricity Etc.
27
Legal Expenses
Postage, Stamp, Telegram &Telephone
28235117
28
242375685
Audit Fee
29
Stationery, Printing, Advertisement etc.
30
Loss/Expenses for bad loan
Depreciation and Repairs to Banks
Property
31
Other Expenses
32
Total Operating Expenses (2)
1,904,844,574
1,624,116,175
2,098,712,317
1,145,085,127
--
--
2,098,712,317
1,145,085,127
A)Profit before provision (1-2)

Transferred to Income
33
B) Total
Rupali Bank Limited
47
Bank Ltd.
Notes
Particulars
2009
Taka
2008
Taka
C) Provision
1744000
199607988
24869092
23663245
403609903
47716198
403222995
1668489322
270987431
874097696
-1668489322
-874097696
Appropriation
333697864
174891540
Statutory Reserve
500000000
General Reserve
-833697864
-174819540
834791458
699278156
133.48
69.93
Provision for Loan

34
Provision for Off Balance sheet Items
35
Provision for other Assets
36
Other Provision
37
Total Provisiton
D) Total Profit / (Loss) Before Tax (B-C)
E) Provision for Tax

F) Toatal Profit / (Loss) After Tax (D-E)
38
Dividend
Total Reserve
Net Profit / Loss Adjusted to Accumulated Loss
A/C
Earning per share
39
These Financial Statements should be read in conjuction with the annexed

notes 1 to 44.
2.9.3 Cash flow statement.

RUPALI BANK LIMITED
48
Bank Ltd.
Cash Flow Statement
For the Year Ended December 31, 2009
Notes
Particulars
2009
Taka
2008
Taka
A) Cash flows from operating activities:

6151,202,600
5340558913
(3,238,758,184)
(3080511189)
5,080,727
4405730
701,879,827
499021621
353,500,000
244308254
(1,390,797,810)
(1205290979)
(157,910,392)
(149747487)
2,941,081
5726227
(302,029,708)
(240842592)
2,125,108,141
1417628498
--
--
(2,600,000,000)
--
--
--
(3,314,135,089)
(1,949,716,564)
(897,683,382)
1237,856,736
59,929,000
62,759,000
2,606,163,422
(2,221,266,530)
Increase/decrease of deposit (from
--
--
other Banks)
--
--
Customers deposits
--
--
(230,733,298)
(6807513)
(4,376,459,347)
(2,251,351,206)
2,877,174,871)
(1,459,546,373)
Interest Received in cash

Interest Paid
Cash received from profit/Dividend
Fees, Commissions, Exchange & service
charges receipts
Received from Written Off Loan
Cash Paid to employees
Cash Paid to suppliers
Income tax paid
Received from other operating activities
Paid to other operating activities
Operating profit before changes in operating
assts
and liabilities (A)
B. Increase / Decrease in Curent assets &
Liabilities:
Statutory Deposit
Purchase/Sales Trading Security
Loans and advances to other banks
Loans and advances to customers
Increase/decrease of Other assets
Other liabilities to customers Accounts

Other reserves
Trading liabilities
Other liabilities
Net increase in operating liabilities (B)
C. Net Cash flow from operating activities
(A+B)
49
Bank Ltd.
Notes
2009
Taka
Particulars
2008
Taka
D. Cash flow from investments

3307883647
4222651000
(1532046168)
(2625568200)
57694
3055435
(63032495)
(1686506)
--
--
1712862678
1598451729
(6834412)
--
--
--
--
--
--
--
Proceeds from Security Sold

Payment for Security purchased
Adjusted money for fixed assets
Assets installations and machinery
purchases/sold
Subsidiary purchased & Sold
Net cash flow from investmetns
E. Cash flow from financial activities:

Paid to loans & debt. Securities
Ordinary Share issue
Dividend paid
Increase/Decrease of other reserve
Cash flow from financial activities (E)
(6834412)
F. Difference between fixed assets schedule

& P/L A/C (depreciation)
--
(1975320)
-(545322940)
-136930036
11399735242
6779310465
10854412302
6916240501
G. Effect on cash & cash equivalent due to

changes in exch. Rate
Net increase/Decrease (C+D+E+F+G)
Opening cash and cash equivalent

40
Closing cash and cash equivalent
41
2.9.4 Statement of Changes in Equity

For the year Ended 2009
Particulars
Paid Up
Share Money
Deposit
Balance as at
1,250,000,000
352,353,800
Statutory
Other
Reserve
Reserves
916,533,19
13,298,170
Assets Rev. Reserve
Retained
Total
Earnings
Properties
Investmen
2,145,561,11
t
74,629,76
(12,921,525
(8,169,149,6
50
Bank Ltd.
1st January 09
Restated
7
-
8
-
1
-
,688)
-
42)
-
1,250,000,000
352,353,800
916,533,19
13,298,170
2,145,561,11
74,629,76
(12,921,525
(8,169,149,6
,688)
42)
(277,400,000
Balance as per
Change in
accounting
rules
Restated
Balance as at
1st January-09
Surplus? deficit
7
-
on revaluation
(277,400,000
of properties
Assets/
(Adjustment
with
Investment)
Surplus/deficit
1,196,287,
on revaluation
1,196,287,34
344
of investment
(HFT)
Difference due
333,697,86
500,000,00
834,791,45
1,668,489,32
0
-
8
-
2
-
to changes in
Currency
revaluation
Receipts &
Losses not
recognized in
the income
statement
Net Profit
during the year
Dividend paid
Issue of share
4
-
capital
Balance as at
1,250,000,000
74,953,800
1,250,231,0
513,298,17
2,145,561,11
1,270,917,
(12,086,734
(5,581,772,9
61
105
,230)
76)
31st December09
Share Money Deposit have been adjusted with investment tk. 27,74,00,000/=
2.9.5 Liquidity Statement

(Maturity Analysis of Assets & Libilities)
For the year ended December 31, 2009
01 to 03 Month
03 to 12 Month
01 to 05 Years
5,286,406,83
--
--
--
--
5,286,406,83
Balance with other banks and
2
4,182,145
--
--
--
--
2
4,182,145
financial institutions
Money at call on short notice
3,700,000,00
100,000,000
1,530,000,00
224,100,000
--
5,554,100,00
--
0
--
350,000,000
13,943,281,0
0
14,303,004,4
79
04
Particulars
More than 05
Total
Up to 01 Month
Assets
Cash in hand
& FDR
Investment
0
9,723,325
51
Bank Ltd.
Loans and advances
Fixed
assets
premises,
(including
furniture
Non banking assets

Total Assets
from
8,094,478,39
16,591,202,8
4,648,567,00
15,663,011,9
52,344,171,1
0
--
3
--
34
--
0
--
63
2,332,537,98
90
2,332,537,98
and
fixture)
Other assets
Liabilities
Borrowing
7,346,911,00
Bangladesh
567,537,627
493,676,814
1,251,046,70
104,591,059
5,338,797,82
7,755,650,03
-16,914,760,92
-8,688,155,207
9
-19,372,249,54
-5,327,258,059
3
-37,277,628,84
2
-87,580,052,58
3
16,468,821
9
---
3
--
6,834,412
9,634,409
5
---
15,611,280,1
6,905,903,28
13,370,442,1
11,358,530,0
25,742,990,6
72,989,146,1
00
415,635,407
695,211,805
0
323,271,984
365,807,605
06
184,726,848
416,135,560
00
-2,160,361,80
69
-15,595,059,5
55
923,634,239
19,232,576,3
16,722,127,31
7,594,982,869
13,978,138,92
0
13,528,526,20
74
41,338,050,24
44
93,161,825,55
1,093,172,338
5,394,110,617
(8,201,268,15
(4,060,421,39
(5,581,772,97
0)
8)
6)
Bank, other banks, Financial

institutions and agents
Deposit accounts
Other accounts (bills payable)
Provision & Other Liab.
Total Liabilities
2
192,633,317
Net Liquidity difference
These Financial Statements should be read in conjuction with the annexed notes 1 to 44.
2.10 Highlights on the Overall activities of the Bank

as on December 31, 2009
Figure in Crore (Except %)
Particulars
1
2
3
4
5
6
7
8
9
Paid up Capital
Total Capital (Core+Supplementary
Surplus / Shortage of Capital
Total Assets
Total Deposits
Total Loans & Advance
Total Contingent Liabilities and Commitments
Ratio of Loans and Deposit
Ratio of Classified Loan against Total Loans and
2009
Taka
125.00
(712.68)
(1,278.99)
8758.01
7391.28
5234.42
3153.62
70.82%
20.91%
10
11
12
Advances
Profit/Loss after tax & provision
Classified Loans for the year
Provision kept against Classified Loans
166.85
1094.41
775.79
2008
Taka
125.00
(898.80)
(1,389.50)
(1,231.18)
7,120.80
4,903.00
3,136.18
69.76%
31.29%
87.41
1,534.24
786.37
52
Bank Ltd.
13
Provision keept against Loans & Advances including
852.86
852.69
14
15
16
17
18
19
20
21
22
23
off B.S. items

Provision Surplus / (Deficit)
Cost of Fund
Interest Earning Assets
Non interest Bearing Assets
Return on investment (ROI)
Return on Assets (ROA)
Total income from investment
Earning Per Share (after credit all provisions)
Profit per Share (Before Provision)
Price Earning Ratio (Times)
174.41
7.20
6125.72
2632.29
10.90%
1.17%
155.90
133.48
167.90
10.71
7.74%
5,070.81
3,160.37
10.00%
0.46%
125.44
69.90
91.61
11.98
Credit Rating information:

Rating
Long term
Short-term
National Support
2008
BB3
ST3
AAA
2007
BB3
ST3
AAA
CHAPTER-THREE
LITERATURE REVIEW
RUPALI BANK LIMITED
53
Bank Ltd.
LITERATURE REVIEW
The purpose of the study was to present the relationship between service quality,
switching cost and trust with customer satisfaction and customer loyalty in Rupali
Bank Ltd.
3.1 Service quality
According to Berry et al. (1988), Service quality has become a significant

differentiator and the most powerful competitive weapon, which all the service
organizations want to possess. Definitions of service quality hold that this is the
result of an evaluation process where customers compare their expectations about
54
Bank Ltd.
a service with their perception of the service to be received (Lewis & Booms, 1983;
Lehtinen
&
Lehtinen,
1982,
Gro
nrooss,
1984,
Parasuraman
et
al,
1985,1988,1994). They also added that service quality can be split into technical
quality which means what is dome and functional quality which means how it is
dome. Lehtinen and Lehtinen (1982) gave a three-dimensional view of service
quality consisting interaction, physical, and corporate quality.
Numerous researches have been delineated service quality as forms of attitude- a

long run overall evaluation, and the two constructs (service quality and attitude)
are viewed as similar (parasuraman et al., 1988; Bitner, Booms, & Tetreault, 1990;
Bolton and Drew, 1991; Cronin & Taylor, 1992; Bitner & Hurbert, 1994m). Allport
(1995) defined attitude as a learned predisposition to respond to an object in a
consistently favorable or and unfavorable way. As perceived service quality portrays
a general overall appraisal of service, i.e. a global value judgment on the superiority
of overall satisfaction with the service, it is viewed as similar to attitude
(Sureshchandar et al., 2002)
Parasuraman et.al (1988) have developed a service quality measure, SERVQUAL
which reasonable of the overall service quality dimensions. The researchers
developed ten general dimensions named- tangibles, reliability, responsiveness,
competence,
courtesy,
credibility,
security,
access,
communication,
and
understanding. SERVQUAL was revised later by parasuraman et.al. (1991) based

on the result of an empirical study on five service companies. They noticed that
some of the ten dimensions were correlated. They refined it and finalized the
instrument composed of five dimensions include reliability, responsiveness,
assurance, empathy, and tangibles. In this present study these dimensions will be
used to measure the service quality.
3.2 Dimensions of service quality

3.2.1 Reliability
55
Bank Ltd.
According to Philip Kotler (1999); Bitner, M. J. and Zeithaml, V.A. (2003) the ability
to perform the promised service dependably and accurately is the reliability. Gilbert
A. Churchill, Jr. & J. paul peter (1999) added that customers want performance to
be consistent and dependable.
3.2.2 Responsiveness
According to Philip Kotler (1999); Bitner, M.J. and Zeithaml, V.A (2003)
responsiveness is the willingness to help customers and provide prompt service.
Gilbert A. Churchill, Jr.& J. Paul peter (1999) added that customer must see
service provider as ready and willing to perform.
3.2.3 Tangibles
According to Philip Kotler (1999); Bitner. M.J. and Zeithaml, V.A. (2003), the
appearance of physical facilities, equipment, personnel, and communication
material of an organization is the tangibles. Gilbert A. Churchill, Jr. & J. Paul peter
(1999) added that customer look for quality in the equipment, facilities, and
communication materials used to provide the service.
3.2.4 Empathy
According to Philip Kotler (1999); Bitner, M. J. and Zeithaml, V.A. (2003), empathy
means the provision of caring, individualized attention to the customer.
3.2.5 Assurance
According to Philip Kotler (1999); Bitner, M. J. and Zeithaml, V.A. (2003), assurance
means the knowledge and courtesy of employees and their ability to convey trust
and confidence.
3.3 Switching cost
56
Bank Ltd.
According to Porter (1998), switching cost is the cost involved in changing from one
service provider to another. In addition to measurable monetary costs, switching
costs also include time and psychological effort involved in facing the uncertainty of
dealing with a new service provider (Dick and Basu, 1994; Guiltian, 1989).
According to Jackson (1985), it is the sum of economic, psychological cost, and
physical costs. It includes the psychological cost of becoming a customer of a new
firm, and the time effort involved in buying new brand (Klemperer, 1995; Kim et al.,
2003). Hence, switching cost varies from customer to customer (Shy, 2002).
Psychological cost is a perceived cost stemming from social bonds that form in the
course of time and the uncertainty and risk associated with switching to and
unfamiliar brand (Patterson and Sharma, 2000; 2003). Thus the switching cost can
vary from customer to customer. The definition provided by Porter (1998) will be
considered as switching cost in this study.
3.4 Trust
Trust is consistently related to the vulnerability of the trustor (Bigley and Pearce,
1998; Singh and Sirdeshmukh, 2000), because without vulnerability of the trustor
upon the trustee, trust becomes irrelevant. In business studies, trust has been
found to be important for building and maintaining long-tern relationships (e.g.
Geyskens et al., 1996; Rousseau et al., 1998; Singh and Sirdeshmukh, 2000).
Anderson and Narus (1990) postulated that, one party believe that the action of a
third party will bring positive outcomes to him, trust can be build that the actions
of a third party will bring positive outcomes to him, trust can be build. Trust was
viewed as one of the most relevant antecedents of stable and collaborative
relationships. The centrality of trust in market relationships are made evident by
the many research and some wide literature review are already available (Castaldo,
1995; Blois, 1999). Doney and Cannon (1997) added that the third party also must
have the ability to continue to meet its obligation within the cost-benefits
relationship. Therefore, the customer should not only perceive positive outcomes
but also believe these positive outcomes will continue in the future. According to
Lau and Lee (1999), as one party trusts another and develop positive behavioral
intentions towards the other, when customers trust brands they also form positive
57
Bank Ltd.
buying intentions towards those brands. Trust is sometimes conceived of having

two components, performance or credibility trust and benevolence trust, as
Ganesan (1994) pointed out in a business context.
3.5 Customer Loyalty

Customer loyalty represents the repeat purchase, and referring the company to
other customers (Heskett et al. 1994). He also sated that customer loyalty is a
figure that may be measured directly as measuring the actual repeated sales to
customers. According to Duffy (2003) loyalty is the feeling that customer has about
a brand which ultimately generates positive and measurable financial results.
Improvements in retention and increasing in the share of the company are the
obvious economic benefits of customer loyalty. According to Feick and Lee (2001),
customer loyalty has been measured as the long-term choice probability for a brand
or as & minimum differential needed for switching. Several earlier studies identified
customer loyalty in several w3ays such as attitudinal approaches focused mainly on
brand recommendations, resistance to superior products (Narayandas, 1996),
repurchase intention (Cronin & Taylor, 1992) and willingness to pay a price
premium (Bitner & Zeithaml, 2003). Czepiel and Gilmore (1987), define service
loyalty as a specific attitude to continue in an exchange relationship based on past
experience. Their definition implies that levels of service loyalty can be assessed by
attitudinal measures such as the ones based on intentions to repatronize a service
provider. Such attitudinal measures have an advantage over behavioral measures
(e.g repeat patronage) in that they can provide greater understanding of the factors
associated with the development and modification of loyalty ( Oliva et al., 1992).
3.6 Customer satisfaction

The most common interpretations reflect the notion that satisfaction is a feeling
which results from a process of evaluating what was receive against that expected,
the purchase decision itself and the fulfillment of needs or want (Armstrong &
Kotler, 1996; Berkowitz et al. 1999). Kotler (1999) also noted that satisfaction is a
function of perceived performance and expectations which identifies feelings of a
person resulting from comparing a products perceived performance in relation to
58
Bank Ltd.
his or her expectations. Bitner and Zeithaml (2003) stated that satisfaction is the
customers evaluation of a product or service in terms of whether that the
perception of the word satisfaction influences the activities which we conduct to
achieve it. Researchers have also identified customer satisfaction from a multi
dimensional nature and view overall satisfaction as a function of satisfaction with
multiple experiences with the service provider (Sureshchandar et al., 2002).
3.7 Relationship between service quality customer satisfaction.

In more recent studySpreng and Mackoy(1996) addressed the relationship between
service quality and customer satisfaction by using model developed by Oliver et
al(1992).The model integrates the two constructs and suggests, among other things
that perceived service quality is an antecedent to satisfaction Spreng and Mackoy
showed that service quality leads to customer satisfaction.
3.8 Relationship between service quality and customer loyalty

The relationship between service quality and customer preference loyalty has been
examined, among others, by Boulding et al. (1993) and Cronin and Taylor (1992).
Cronin and Taylor (1992) focused solely on repurchase intentions, whereas
Boulding et al. (1993) focused on the elements of repurchasing and willingness to
recommend. In the study by Cronin and Taylor service quality did not appear to
have a significant (Positive) effect on repurchase intentions (in contrast to the
significant positive relation between satisfaction
and repurchase intention), while
Boulding et al. (1993) found positive relationships between service quality and
repurchase intentions and willingness to recommend. Furthermore, it has been
argued that actually responding to dissatisfaction (e.g. complaining directly to the
company or complaining to a third party ) is negatively related to the level of service
quality (Beardon et al., 1979; Yi, 1990). Rust and Zahorik (1993) related service
quality perceptions to consumer loyalty in banking, Crosby and Stephens (1987)
investigated loyalty in the insurance industry and with regard to retailing, customer
patronage was investigated in relation to service encounter failures by Kelley et al.
(1993).
59
Bank Ltd.
3.9 Relationship between switching cost and customer loyalty

It has been suggested that the degree of switching costs may have an influence on
customer loyalty in a given industry (Anderson and Fornell, 1994; Dick and Basu,
1994; Fornell, 1992; Gremler and Brown, 1996). Anderson (1982; 1985) found
empirical support for the effect of high switching costs on customer loyalty in
relation to medical services. In addition to customer uncertainty and structure of
the market, the level of competition and loyalty programs (e.g. membership
program, customer clubs, seasonal tickets in theatres and opera houses) may
increase the perceived and actual cost of switching (Gruen and Fergusson, 1994;
Gummessson, 1995), in other words, in the presence of switching cost, customers
who might be expected to select from a number of functionally identical brands
display brand loyalty (Klemperer, 1987). In conclusion, it appears that there is a
positive relationship between the level of switching costs and customer loyalty in
service.
3.10 Relationship between trust and customer loyalty

Trust is logically and experientially a critical variable in relationships, as has been
hypothesized and borne out n the marketing literature (Moorman et al., 1993;
Morgan and Hunt, 1994). Those who are not willing to trust a vender in a
competitive marketplace are unlikely to be loyal. The importance of trust in
explaining loyalty is also supported by authors as Lim et al. (1997), Garbarino and
Johnson (1999), Chaukdhuri and Holbrook (2001), Singh and Sirdeshmukh (2000)
and Sirdeshmukh et al. (2002).
However, it must be admitted that, while in a market suitable alternatives lack of

global and benevolence trust should lead to negative loyalty (desire and intention to
switch), Positive benevolence and global trust may not necessarily lead to positive
loyalty. In some markets where all or nearly all vendors are trustworthy, one could
trust many vendors equally, one could expect trust as a normal part of doing
business, and therefore be loyal or not without reference to trust. So, the trustloyalty relationship, while positive, may be weak in some markets.
60
Bank Ltd.
CHAPTER-FOUR
METHODOLOGY
RUPALI BANK LIMITED
61
Bank Ltd.
METHODOLOGY
Research methodology is a way to systematically solve the research problem. It may

be understood as a science of studying how research is done scientifically.
4.1 SOURCE OF DATA:
The study will focus on deposit and loan scheme of banking and customer
satisfaction through practicing modern E-business systems. There is a growing
independence between business strategy, rules & procedures on the one hand &
marketing management is the art and science of choosing target markets and
62
Bank Ltd.
getting,
keeping
and
growing
customers
through
creating,
delivering
and
communicating superior customer value on the other.
4.2 DATA COLLECTION PROCEDURE AND METHOD

There are various techniques or methods in collecting the data. They are:
By observation
Through personal interview
Through telephone interview
By mailing of questionnaire
Through schedules
Data can be collected either through experiment or through survey. AS a

researcher, I collected the information through personal interview. Interview
with customer have done through questionnaire in order to discuss about the
related matters before preparing the report. The annual report,various loan
related circular of Rupali bank and internet were the main source of secondary
data.
The data was collected through questionnaire survey.
4.3 SAMPLING PLAN AND SAMPLE SIZE
Study population
A sample design is a definite plan for obtaining a sample from a given population.
Due to time and budgetary constraint, the survey focused only into the various
customers.
The customers are almost the resident of Narayangonj and
Munshigong. The sample had been selected on the basis of my working place.To
investigate the factors for customers preference, Nonprobability Sampling
Procedure has been used. The sampling unit was selected through Convenience
Sampling: where the selection of the sampling unit is left primarily on the
interviewer (Malhotra, 2001). The reason of choosing Convenience Sampling is
many but here most importantly, there is no appropriate structure or framework
that can aid to select the sample. Farther, these procedures are both time saving
and inexpensive. The total sample size for the study was 100.
4.4 PRE TESTING
63
Bank Ltd.
The originally develop questionnaire will be pre- tested in order with few dummy
respondent to ensure the quality of the questionnaire in terms of preciseness,
conciseness, objectivity and understandability of the questions.
64
Bank Ltd.
CHAPTER-FIVE
DATA COLLECTION AND DATA ANALYSIS
RUPALI BANK LIMITED
65
Bank Ltd.
DATA COLLECTION AND DATA ANALYSIS
5.1 METHODS OF DATA COLLECTION

There are two types of data: Primary data and Secondary data.
5.1.1
Primary Data Collection
For this study, at first I selected the primary sources of data and collected data
through interview. In selecting the primary sampling units, PPS (Probability
proportion to size) sampling method is implemented. I took interview different
executives of MIS, HR & Admin, Accounts,Development,SME departments of the
Rupali bank ltd.
The questionnaires were as follow:
Sample Questionnaire
Name:
Age:
Sex:
Occupation:
. For how long (years) have you been banking with Rupali bank?
A. (Please circle) <1
>5
. Do you bank with any other bank?

A. Yes
No
If yes, please name of the other bank(s):
(This questionnaire has been designed to conduct a research on evaluation of

customer satisfaction to fulfill the course requirement of Master Paper:, under
Bangladesh Open University. Your active participation will enable us to conduct
the research work successfully.)
66
Bank Ltd.
1.Why do you bank with Rupali bank? What do you expect from Rupali bank?
A. ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(The scale rates from strongly agree to strongly disagree)

1. Interest rate on loan is low and bearable
5
2. Rupali Bank provides additional features in comparison with other Banks

5
3. Interest rate on deposit scheme is attractive

5
4. SME loan formalities is very easy in Rupali Bank

5
5. Time taken for getting service in Rupali Bank is appropriate

5
6. Remittance charge of Rupali Bank is low compared with other banks

5
7. Rupali Bank provides various promotional facilities and necessary helps

almost
every time
5
8. Rupali Bank is very sincere in providing me quality services on a continuous

basis
67
Bank Ltd.
9. Whether Rupali Bank reduce their interest rate on deposit or not, I will still
remain towards Rupali Bank
5
5.1.2
Secondary Data Collection
I collected previous and current data from different levels of employee ofRupali
bank ltd and from different types of customers. I also went through different books,
journals and internet data & information. Collecting the information it is entered
into computer and MS word & Ms Excel is used to analyze the data. The steps of
processing data is included the following steps.
~ Collection
~ Classification
~ Sorting, adding, merging & so on
~ Summarizing
~ storing
~ Retrieval
~ Dissemination
5.1.3 CODING, TABULATION AND ANALYSIS PROCEDURE
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Bank Ltd.
The response of the respondent has been entered into the computer for tabulation
and analysis. Microsoft Excel has been used to analysis the data. Collected data are
analyzed by using percentages, graphs to draw the conclusion. The entire have
shown in tabular form.
CHAPTER-SIX
FINDINGS
69
Bank Ltd.
RUPALI BANK LIMITED
FINDINGS
70
Bank Ltd.
6.1 DEGREE OF CUSTOMER SATISFACTION

I divide the questionnaire into two parts in the findings and analysis segment;
these are general information and about the customers satisfaction (present
account holder). This information will give a clear idea about the customer
preference towards Rupali bank. After finishing the survey I found the following
findings.
6.1.1 Profession of the respondents:
Particulars
Service
Businessman
Student
Housewife
others
Frequency
10
40
4
30
16
Percentage
10 %
40 %
4%
30%
16 %
Table 6.1.1: Profession of the respondents
Figure 6.1.1: Profession of the respondents

The above picture shows that 10% of total respondents are service holder 40% are
businessmen, 4% are student, 30% are housewives, and 16% are in other
71
Bank Ltd.
categories. It indicates that most of the respondents are businessmen and

Housewife.
6.1.2 Age of the respondents:
Particulars
Frequency
18~25
8
26~30
10
31~35
13
36~40
26
41~45
27
46+
16
Table 6.1.2: Age of the respondents
Percentage
8%
10 %
13 %
26%
27 %
16%
Figure 6.1.2: Age of the respondents

Explanation:The above graph represents that 16% respondents ages are46+
years,27% respondents ages are from 41~45 years,26% respondents ages are
36~40 years, 13% respondents ages are from 31~35 years,10% respondents ages
are from 26~30 years . Only 8% respondents ages are from 18~25 years.
72
Bank Ltd.
6.1.3 Maintaining account with other bank .

About the question of Do you use other companys paper? the followings are
found.
Particulars
Yes
No
Frequency
28
72
Percentage
28 %
72 %
Table 6.1.3: Maintaining account with other bank
Figure
Explanation:The above table shows that most of the respondents (72%) do not
maintain account with other bank.
73
Bank Ltd.
6.1.4 Interest rate on loan is low and bearable:

Particulars
Strongly agree
Agree
Uncertain
Disagree
Strongly disagree
Frequency
50
30
10
6
4
Percentage
50%
30%
10%
6%
4%
Table 6.1.4: Interest rate on loan is low and bearable
Figure 6.1.4 Interest rate on loan is low and bearable

Explanation:After analyzing the above graph it is shown that 50% of total
respondents are strongly agree, 30% are agree; 10% are uncertain . Only 6% are
disagreeing and the rest 4% are strongly disagree about the interest rate.
74
Bank Ltd.
6.1.5
Rupali Bank provides additional features in comparison with

other Banks:
Particulars
Strongly agree
Agree
Uncertain
Disagree
Strongly disagree
Frequency
8
10
22
38
22
Percentage
8%
10 %
22 %
38%
22%
Rupali Bank provides additional features in comparison with other Banks
Figure 6.1.5: Rupali Bank provides additional features in comparison with other
Banks
Explanation:The graph reflects that most of the respondents disagree with
additional feature, where 8% respondents are strongly agree with it and 10 % of the
total respondents are agree with it. It indicates that customers are not happy with
additional features.
75
Bank Ltd.
6.1.6 Interest rate on deposit scheme is attractive:

Particulars
Frequency
Strongly agree
18
Agree
20
Uncertain
25
Disagree
10
Strongly disagree
27
Table 6.1.6 Interest rate on deposit scheme is attractive
Percentage
18 %
20 %
25 %
10 %
27 %
Figure 6.1.6 Interest rate on deposit scheme is attractive

Explanation:The picture shows that most of the respondents do not agree that
Interest rate on deposit scheme is attractive. In this case, only 18% of the total
respondents are strongly agreed with it and 20% are agreeing with it.
76
Bank Ltd.
6.1.7 SME loan formalities is very easy in Rupali Bank:
Particulars
Frequency
Strongly agree
40
Agree
28
Uncertain
7
Disagree
13
Strongly disagree
12
Table 6.1.7: SME loan formalities is very easy in Rupali Bank
Percentage
40 %
28 %
7%
13 %
12 %
Figure 6.1.7: SME loan formalities is very easy in Rupali Bank

respondents are strongly agree,28% are agree; that is total 68% are positive in easy
formalities. Only 7% are neutral and 13% are disagreeing and the rest 12% are
strongly disagree about the SME loan formalities.
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Bank Ltd.
6.1.8 Time taken for getting service in Rupali Bank is appropriate:
Particulars
Frequency
Percentage
Strongly agree
30
30 %
Agree
20
20 %
Uncertain
13
13 %
Disagree
18
18 %
Strongly disagree
19
19 %
Table 6.1.8 Time taken for getting service in Rupali Bank is appropriate
Figure 6.1.8 Time taken for getting service in Rupali Bank is appropriate.
Explanation:The graph reflects that 30% of the respondents are strongly agree and
20% are agree and13% are uncertain,18% are disagree,19% are strongly
disagree.In fact 50% of the respondent think time taken for service is appropriate
and rest 50%do not support this.
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Bank Ltd.
6.1.9 Remittance charge of Rupali Bank is low compared with other

banks:
Particulars
Frequency
Percentage
Strongly agree
40
40 %
Agree
30
30 %
Uncertain
10
10 %
Disagree
10
10 %
Strongly disagree
10
10 %
Table 6.1.9: Remittance charge of Rupali Bank is low compared with other banks
Figure 6.1.9 Remittance charge of Rupali Bank is low compared with other banks
79
Bank Ltd.
Explanation:Only 10 % respondents are strongly disagreeing and 40 %

respondents are strongly agreeing .It clearly indicates that Remittance charge of
Rupali Bank is low compared with other banks.
6.1.10 Rupali Bank provides various promotional facilities and
necessary helps almost every time:
Particulars
Frequency
Percentage
Strongly agree
10
10 %
Agree
31
31 %
Uncertain
19
19 %
Disagree
30
30 %
Strongly disagree
10
10 %
Table 6.1.10: Rupali Bank provides various promotional facilities and necessary
helps almost every time
Figure 6.1.10: Rupali Bank provides various promotional facilities and necessary
helps almost every time
80
Bank Ltd.
Explanation:The
picture
shows
that
the10%
respondents
are
strongly
agreeing,31% areagreeing,19% respondent are uncertain,30% are disagreeing and

10% respondent are strongly disagreeing..It indicates that promotional facilities
and necessary help provided by Rupali bank is not very much positive.
6.1.11Rupali Bank is very sincere in providing me quality services on a

continuous basis:
Particulars
Frequency
Percentage
Strongly agree
40
40 %
Agree
30
30 %
Uncertain
7
7%
Disagree
12
12 %
Strongly disagree
11
11 %
Table 6.1.11: Rupali Bank is very sincere in providing me quality services on a
continuous basis
81
Bank Ltd.
Figure 6.1.11: Rupali Bank is very sincere in providing me quality services on a

continuous basis
respondents are strongly agree and only 11% are strongly disagree;7% total of total
respondents are uncertain. So employees of Rupali bank are sincere towards
customers.
6.1.12 Whether Rupali Bank reduces their interest rate on deposit or
not, I will still remain towards Rupali Bank:

Particulars
Frequency
Percentage
Strongly agree
4
4%
Agree
16
16 %
Uncertain
25
25 %
Disagree
24
24%
Strongly disagree
31
31 %
Table 6.1.12: Whether Rupali Bank reduce their interest rate on deposit or not, I
will still remain towards Rupali Bank
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Bank Ltd.
Figure 6.1.12: Whether Rupali Bank reduce their interest rate on deposit or not, I
will still remain towards Rupali Bank
Explanation:The above graph shows that 31% of total respondents are strongly
disagree and 24% are disagree; 25% are uncertain,16%are agree and only4% are
strongly agreeing.It clearly indicates that customers will react negatively when
Rupali bank will reduce interest on deposit.
CHAPTER-SEVEN
DISCUSSION AND SWOT ANALYSIS
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Bank Ltd.
RUPALI BANK LIMITED
DISCUSSION AND SWOT ANALYSIS
84
Bank Ltd.
Discussion:
After finishing the finding part it was found that the consumers feedback is
quite interesting. Now, I am trying to analyze the findings and these are as
follows:
Among the respondents a few number of customers profession are

student. The majority of the customers are businessmen and
housewife. Majority of the consumers age are from 36+ years.
There are many reasons for maintaining account with Rupali Bank.
Businessmen maintain account for security of money and to get credit
from bank. Housewives maintain account for receiving money which
their husbands or relative send from abroad.
From my survey I found out a clear picture, why the customers prefer
Rupali Bank:
Customers prefer Rupali Bank for friendly and sincere service of its
employees.
Businessmen prefer Rupali Bank for easy loan formalities specially SME
loan. They have to face fewer formalities in getting SME loan.
Borrowers prefer Rupali Bank for its low interest rate on loan.
Depositors are not highly satisfied with interest given on deposit scheme
but they are not dissatisfied.
General customers prefer Rupali Bank as Rupali bank is old and

trusted.
Customers prefer Rupali Bank because of its market reputation.
85
Bank Ltd.
Customers prefer Rupali Bank for low remittance charge and prompt
remittance service through Western Union and other such channel.
SWOT stands for Strength, Weakness, Opportunity and Threat. This is very
important tool for a company to analyze its internal and external environment. Let
us carry out a SWOT analysis of Rupali Bank Ltd.
Strengths
492 branches: Rupali Bank has 492 branches in various areas of Bangladesh
(rural and city area). So people have opportunity to avail facilities like remittance
in whole country.
Well known to people: Rupali Bank has been operating business from long ago.
People trust this bank due to its long existence.
State owned commercial bank: There are four govt. commercial bank. And Rupali
bank is one of them.
Asset: Rupali Bank has many assets in this country. It has own land and and
building in most of the big city. NO other bank has such asset.
Skilled manpower: It has skilled manpower for delivering service.
Weakness
_ Capital deficit due to cumulative loss of over TK. 225 crore as of 2010
_ Classified loan of TK. 1187 crore as of December 2010.
86
Bank Ltd.
_ Vacant professional position 2185 as of 2010

_ About 22 branches were losing entrepreneurs in 2010
_ Very few products developed during the last several years.
_ No clear strategy for resources mobilization and investments.
_ Modernization of banking is almost absent.
_ Our credit portfolio is narrowly focused on a few less productive sectors.
_ Physical facilities and locations of branches are poor.
_ Image of bank is poor among stakeholders.
_ Decision making process is slow and not client oriented.
Opportunities
Rupali Bank has great opportunity to expand their business and to be leader in the
banking sector in Bangladesh. Other opportunities are given below:
If they would take the opportunity, they have to expand the business of Rupali
Bank by developing new products and providing quality service to the customers.
The image of Rupali Bank will be increased and they will get extra mileage from it.
There is a scope for increasing Rupali Bank market share in the future by
delivering better quality customers service by using on line banking facilities.
Various financial products can be increased by research for meeting market needs.
These new products have to be those which are not currently explored
by
competitors. Rupali Bank can target corporate customers like BGSL, DESA, WASA
to increase business. This will not only lead to capture higher market share but
also to an improved corporate image of Rupali Bank.
Threats:
87
Bank Ltd.
Private Banks: There are many foreign and domestic private banks operating
banking business with latest information technology. They are well equipped with
skilled manpower. They are very much responsive to customer need. Private Banks
are taking control over market / business day by day through delivering quality
service to
people.
Islamic banking: There are some private banks that operate their banking
business according to Islamic sharia. They are growing very fast. As Bangladeshi
people are religious and they believe that Islami Bank give profit not interest on
deposit. Profit is halal (legal) and interest is haram (illegal). As a result their
business growth is very good compared with other Bank. So Private Banks and
Islamic Bank are obviously threat for Rupali Bank Ltd.
CHAPTER-EIGHT
RECOMMENDATION AND CONCLUSION
RUPALI BANK LIMITED
88
Bank Ltd.
RECOMMENDATION
Steps regarding modernization of banking should be taken just right now.

These are online banking, ATM booth, SME banking etc.
Rupali Bank Should take extensive programmee to build a positive image

among stakeholder. In this process they should try to advertise its financial
product in printed and electronic media.
89
Bank Ltd.
Capital deficit due to cumulative loss of TK. 225 crore should be covered and
yearly dividend should be given to shareholder.
Strategy should be taken to recover classified loan TK. 1187 crore as early as
possible to increase profit of the bank and to establish credit discipline in
banking sector.
If necessary, more lawyers should be employed to dispose 4822 cases

pending for decision in court.
Rupali Bank should take immediate steps to fill up vacant professional

position 2185.
More financial product should be developed to meet customer current and

latent demand on priority basis through research.
Rupali Bank should decentralize power to its Zonal office and branch
manager. All business decision should be taken by zonal head and branch
manager. Head office will only formulate policy and give guideline for
business decision.
Loan sanctioning power should be increased of branch manager. SO that he

or she can play a vital role in upliftment of branch.
Most of the branches are located in remote rural areas (out side upazilla
headquarters). A review of the present locations should be conducted as a
priority basis to develop a new strategies and action plan.
Branches should be decorated nicely to attract more customers.
Behavior of employees (officers and staff) should be friendlier to customers.

In this regard Code of conduct should be prepared by board of directors of
Rupali Bank.
A comprehensive review of investment tools used by bank is essential.
Team approach will be taken and all team members in a cost centre should
be rewarded or punished for their success or failure.
SME banking should be given highest priority for employment generation of

unemployed people.
Time taken for service delivery should be appropriate. Standard should be

set in this regard.
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Bank Ltd.
Rupali Bank should take necessary steps to meet customers expectations.

So that they always remain satisfied and loyal towards Rupali Bank.
Salary structure of Rupali bank is according to govt. pay structure. Salary

structure of private bank is higher than govt. pay structure which creates
dissatisfaction to employees of govt. bank. This is why separate pay structure
should be given to bankers to keep close relation to pay structure of private
banks.
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Bank Ltd.
CONCLUSION
Rupali Bank has been operating its business successfully from 2008. Before 2008,
government led by BNP wanted to sell this bank. It causes immeasurable loss to
this bank. New loans disbursement, promotion of bank employees were stopped for
3 to 4 years. The decision was quite wrong for this bank. The Board of directors
and management are trying best to revitalize this bank, they have taken dynamic
and courageous steps in modernizing this bank. We can mention some steps taken
by
present
management.
These
are
rapid
computerization
programmee,
decentralization of power from head office to zonal office. Present management

want to see Rupali Bank as market leader of banking sector in Bangladesh. To
implement this dream, they have to work hard. All employees of Rupali Bank
should be implement such programmee. More co ordination is necessary among
branch, Zonal office and various division of head office. The role of head office
should be facilitator not controller in this regard.
One thing Rupali Bank needs to focus on something which is very different but an
important issue which is improving employee satisfaction level. Caring nature
towards employees and catering to some basic needs of the employees would
increase employee motivation, which in turn would increase employee performance.
This would ultimately result in an improved image in the minds of current and
prospective employees as far as Rupali Bank is concerned. Finally I wish Rupali
Bank all the best for a great future ahead.
92
Bank Ltd.
Limitation
Initially there were only govt. bank. At that time it could earn a quite high profit
margin. But as time went on new competitors private banks stepped in the industry
which caused Rupali Bank to lose market share.
Competitors (private banks) are becoming more dominant through delivering
quality service. But now Rupali Bank has taken strategy to increase its business.
In preparing this master paper, I had to face some difficulties; these are time
constraint, non-available to up-to-date data. I have furnished financial report of
Rupali Bank of 2009 in this paper. Because financial report of 2010 is yet to
complete. It will be completed in March or April of this year, due to audit
formalities.
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Bank Ltd.
Appendix:
Bibliography:
1. Philip Kotler and Gary Armstrong- Principles of Marketing,

Released on: 1997
2. Willium J. Statnton Eitzel, M.J. Walker- Fundamentals of Marketing,

Released on: 1994
3. Joel R Evans and Barry Berman- Marketing Released on: 1987
4. Paul S. Busch and Michael J. Houseton- Marketing, Strategic Fouandation
Released on: 1985
5. Philip Kotler- Marketing Management: Analysis, Planning, Implementation
And Controll, Released on: 1998.
6. Keegan W.J- Global Marketing Management, Released on:1996
7. Siebert J.C.- Concept of Marketing Management. Released on:1978
8. David L. London & Albert J. Della Bitta- Consumer Behavior Released on:
1993
94
Bank Ltd.
9. Leon G. Sehiffman and Leslie Lazar Kanuk- Consumer Behavior Released

on: 1998
10.Harold W. Berkman and Christopher C. Gilson-Consumer behavior
11.WWW.rupali-bank.com

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1

Bank Ltd. Australasia Bank

authorities, privileges, liabilities, borrowings and obligations. Rupali

1. Deposit and loan scheme of Rupali Bank Ltd.

1.1 Deposit scheme of Rupali bank

Who can apply?

Rupali Deposit scheme: Monthly installment VS maturity value

5 Maturity value after

1.1.2. Rupali Monthly earning scheme: (RMES)

There is a substantial demand of monthly earning long term deposit schemes

150000, 200000, 250000) there is no limit of maximum amount.

deposit account may be opened in individual or

80% of deposit and interest rate will be above 3% on deposit

Sample calculation of Rupali monthly earning scheme (RMES)

Term -3years interest note Term-5 years interest note

1.1.3. Fixed deposit:

1.2 Loan scheme of Rupali Bank Ltd.

: To meet the urgent financial needs of the customers.

*Employees of medium sized or mid range local companies such as reputed

Minimum 25 years. Maximum 60 years (including loan maturity period)

: Minimum 3 years confirmed service length.

Maximum TK.500000/= (Five Lac)

* Letter of introduction from the employers.

*3rd party Guarantee of an individual having minimum solvency

By making credits to customers savings / current account maintained in the bank

: Equal monthly installments.

10. Interest rate

11. First repayment date

Salary certificate/ Salary Slip.

15. Present address

: Borrower must reside for at least 12 months in the

1.2.2 PROFESSIONAL LOANS

2 times of monthly loan installment for salaried personnel

3 times of monthly loan installment for other profession

Post dated cheques for each 12 monthly installment.

Personal Guarantee of spouse /parents.

solvency/income not less

than that of the borrower

supported by income proof.

Hypothecation over purchased assets.

year and copy of the policy must be submitted to the bank).

permanent all telephone numbers of residence, Office & Mobile no.)

after seeing true originals) documents accepted for the purpose.

18. Approval power and loan limit :

AGM(Branch /Zone/Head office)

From TK. 50,001/- To TK. 75,000/-

DGM(Branch /Zone/Head office)

From TK. 75,001/- TK. 1,00,000/-

From TK. 1,00,001/- to TK. 5,00,000/-

19. Processing of loan proposal:

1.2.3 Car Loan

3) Qualification of loan application :

1.2.4 House Building Loan

Flat house building for sale & for buying flat.

mortgage in favor of bank.

1.2.4.2 Disbursement mode:

At least four installments in case of residential

1.2.5 Student loan

Applicant must be student.

to requirements of foreign Universities/Colleges.

papers will be taken.

and money of 15% margin must be deposited.