Introduction Of The Organization

Dutch-Bangla Bank Limited is a scheduled commercial bank. The Bank was established under the Bank Companies Act 1991 and incorporated as a public limited company under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of banking business in Bangladesh. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. DBBL- a Bangladesh European private joint venture scheduled commercial bank commenced formal operation from June 3, 1996. The head office of the Bank is located at Senakalyan Bhaban (4th floor), 195, Motijheel C/A, Dhaka, Bangladesh. The Bank commenced its banking business with one branch on 4 July 1996.

DBBLs focus is to provide one counter service to clients covering: Commercial Banking (Deposit Accounts), Consumer Banking (Retail Baking) - Traveler Cheques- Foreign & Inland Remittances, Financial Services, Corporate Banking, Asset & liability management, Liquidity & capital Resources Management, Information technology, Human Resources. DBBL Internet banking enables customer to access his/her personal or business accounts anytime anywhere from home, office or when traveling. Internet Banking gives customer the freedom to choose his/her own banking hours. It can save time, money and effort. It's fast, easy, secure and best of all.

DBBL, since its inception was active in various social activities, which increased manifold over the period of time and its growth. It is one of the fast growing leading online banks in private sector. The emergence of Dutch-Bangla Bank Ltd. in the private sector is an important event in the banking area of Bangladesh. The Netherlands Development Finance Company (FMO) of the Netherlands is the international sponsor of the Bank. The FMO is the Dutch development bank of the Netherlands specialized in the financing of private enterprises in Asia, Africa, Latin America and Eastern Europe. Dutch-Bangla Bank Ltd. came into existence with joint venture as a public limited company incorporated in Bangladesh on June 26, 1995 with the primary objectives to carry on all kinds of banking business in and outside of Bangladesh. DBBL has started its business with foreign bank. DBBL commenced its business as scheduled bank with effect from July 04, 1995 with one branch-Motijheel Branch, Dhaka, with a motto to grow as a leader in the banking arena of Bangladesh through better counseling and effect service to clients and thus to revitalize the economy of the country. All the branches are currently providing truly On-Line banking facility. DBBL resumed its operational activities initially with an authorized capital of Tk.400 million and paid up capital of Tk.202.14 million.

History Of The Organization

Dutch-Bangla Bank started operation is Bangladesh's first joint venture bank. The bank was an effort by local shareholders spearheaded by M Sahabuddin Ahmed (founder chairman) and the Dutch company FMO. From the onset, the focus of the bank has been financing high-growth manufacturing industries in Bangladesh. The rationale being that the manufacturing sector exports Bangladeshi products worldwide. Thereby financing and concentrating on this sector allows Bangladesh to achieve the desired growth. DBBL's other focus is Corporate Social Responsiblity (CSR). Even though CSR is now a cliche, DBBL is the pioneer in this sector and termed the contribution simply as 'social responsiblity'. Due to its investment in this sector, DBBL has become one of the largest donors and the largest bank donor in Bangladesh. The bank has won numerous international awards because of its unique approach as a socially conscious bank. DBBL was the first bank in Bangladesh to be fully automated. The Electronic-Banking Division was established in 2002 to undertake rapid automation and bring modern banking services into this field. Full automation was completed in 2003 and hereby introduced plastic money to the Bangladeshi masses. DBBL also operates the nation's largest ATM fleet and in the process drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the low profitability route for this sector has surprised many critics. DBBL had pursued the mass automation in Banking as a CSR activity and never intended profitability from this sector. As a result it now provides unrivaled banking technology offerings to all its customers. Because of this mindset, most local banks have joined DBBL's banking infrastructure instead of pursuing their own. Even with a history of hefty technological investments and an even larger donations, consumer and investor confidence has never waned. Dutch-Bangla Bank stock set the record for the highest share price in the Dhaka Stock Exchange in 2008.

3. Company Profile

a. Industry Category:
According to industry category Dutch Bangla Bank Limited belongs to Banking category.

b. Years In Operation:
About 17 years (4th July 1996 to Present)

c. Size:

d. Product Type e. Market: Rank/Position In The Industry f. Product vs. Geographical Diversification

Dutch Bangla Bank Limited (DBBL) a public company limited by shares, incorporated in Bangladesh in the year 1995 under companies Act 1994. With 30% equity holding, the Netherlands Development Finance company (FMO) of the Netherlands is the international cosponsor of the Bank. Out of the rest 70%, 60% equity has been provided by prominent local entrepreneurs and industrialists & the rest 10% shares is the public issue. During the initial operating year (1996-1997) the bank received skill augmentation technical assistance from ABN Amro Bank of the Netherlands.

4. Corporate Culture

a. Visibility:

Throughout its operation for last 14 years, DBBL has established itself as a different bank from others. It has differentiated itself as a leader in technology by reaching the latest banking services to its customers through largest ATM network in the country at free or affordable cost. DBBL has created an unprecedented by providing this unique service at subsidized cost not only to its own customers but also to customers of many other banks. It has also established itself as a bank that cares for the society.

All the business activities of DBBL are done in full conformity with social, ethical and environmental standards. DBBL is the pioneer in CSR programs in the country. It has been intensifying its resources and efforts on a continuous basis to reach the distressed & needy people of the society to bring smile on their face and to improve their quality of life.

b. Decision Making Process:

Dutch Bangla Bank Ltd. always appreciate employees for taking part in the decision making process. During my intern period I had seen that the branch in-charge always discussed with 2nd man, officers and junior officers. Though the final decisions are taken by branch in-charge but at least the other officials know that they have taken part for taking those decisions. If any officer thinks that something new can be added to marketing policy of the branch he can discuss it with the superiors deliberately.

c. Delegation and Decentralization:

For account opening or fixed deposit all the decisions are taken by branch manager or 2nd man of the branch. But for LC opening and for loans and advances they have to take decisions through head office.

d. Leadership:

DBBL is a very good example of creating leadership into their employees. They create opportunities to be a good leader through different activities. Besides the general banking, the credit section and loans & advance section actually work as a team. So an employee can show himself as a leader.

e. Empowerment:

f. Reward/Punishment:

DBBL has an internal grading system. It actually depends on ACR, previous works, academic background etc. With this grading point the branch in-charge along with 2nd man decide the reward of an employee. It includes minimum 3 to maximum 7 times of the basic salary. Besides DBBL gives 2 festival bonus and 1 bonus for leave fare assistance. If the employee gets an A grade, he will get all the bonuses. But with the C or D grade he or she will get only 3 bonuses. Actually it totally depends on the branch in-charge and 2nd man. An employee can get a promotion after minimum 2 years of service. If the performance is good and satisfactory he or she will definitely get a promotion. Sometimes its delay due to bad performances.

As there are rewards, punishments are also present. In each branch there are some Assistant Relationship Officer (ARO). Their main job is to open a certain number of account in each month. In Rampura branch, for each ARO, monthly account opening target is minimum 34. If the ARO cannot do so, at the end of the year he wont get all the bonuses. But in this branch each ARO fulfilled their desired target during my 3 month of internship period. If there is a minimum balance of tk. 5000 in an account at the end of the month, the ARO who opened that account will get tk. 300 bonus.

g. Responsive to change:

DBBL is not so responsive to change. Though they made quick response to all the Bangladesh Bank regulations and circulars, but as a corporate company they do not adapt to the corporate culture quite well. Now a days each and every bank are concerned with the aesthetics of their branches. But DBBL is not so responsive to these changes. Still they are working with the dot-printer while other banks are using laser printer. They don't have UPS support for every computer they use, as a result the working speed of the employees slow down. The banking software they use is not up to the mark. But they are not ready to take new software.

h. Growth vs. Profit Orientation:

5. Management Of Stakeholders

a. Employees:

b. Customers:

DBBL is very keen to manage their customers. At the end of this year (2012) their target is to have at least 1 crore customers. So they are very careful about making relationship with their customers. After the opening of an account DBBL sends a thanks letter to the customers address. There are more than thousand ATM booths spreading all over the country to give service to the customers 24x7. The employees are well trained and their behavior to the customers is up to the mark. The help desk is well dedicated and enough officers are assigned there. When a valued customer came to the bank he or she is entertained with tea or coffee and of course branch in-charge personally take care of him/her. When a customers debit card is captured by the ATM booth machine, he or she will get that card back as early as possible. After the maturity period of fixed deposit the branch officials personally call the customer for further renewal. Because of unavoidable situations if a valued customer cannot come to the bank, the bank give that customer door to door service.

c. Government:

d. Political Parties:

There are some pressures from the political parties, but not as much as government banks. It happens mainly in loans and advance section. Sometimes a party takes loans without sufficient documents or mortgage. This is due to phone calls from top management.

e. Media:

DBBL is using the media quite well. They are using both electronic and print media. Each week/month they give advertisement on newspapers front page. They are also using billboards featuring tk.1.2 billion scholarship to S.S.C students. Besides they are contributing in different CSR programs and of course they publish this news to the media for their marketing purpose. Actually they are featuring their best products through the media quite brilliantly. Their main strength is their ATM network and in each advertisement they focus on this. When they open a new branch they publish that news in each main newspaper. Besides they use street campaign for account opening.

f. Competition:

According to account opening DBBL is way ahead of other banks. For example, there are 10 AROs in Rampura branch. Each ARO has to open at least 34 new accounts. So there is minimum 340 new accounts opened in each month. Besides branchs other officials also open accounts. So more or less 500 new accounts are opened in each month. If we calculate total new accounts of all 112 branches, we can say that there are more than 20000 new accounts in each months for DBBL and more than 2 lac in a year.

DBBL is also pioneer for expanding their ATM network. There are more than thousand ATM booth all over the country and the number is increasing day by day. No other banks are even close to this number. So if we compare DBBL with other banks according to account opening and ATM network DBBL is far ahead of others. But with other criterion DBBL is not in the top position. Their profit is not so good last year, while other islami banks such as IBBL or Al-Arafah are doing good. Its because due to religious belief people of Bangladesh are investing their money in Islami Banking. So I

think DBBL is facing difficulties to compete with these banks. It can be proved by an example. Few days ago DBBL decides to limit the minimum balance of savings account to tk 2000 instead of tk. 500 and for current deposit its 5000 instead of 2000. Its because of the lack of fund of the bank and it clearly indicate that DBBL is facing stiffer competition with other banks.

g. Suppliers and Distributors:

h. Civil Society:

I.

Extortionists:

During my 3 month intern period I didn't see any type of problem from the extortionist. I have talked with the branch officials about this but they also replied with the same.

6. a. Analysis of the industry structure: Porter's five forces:

a. Bargaining power (Customers): From customers point of view actually they don't have any bargaining power. Its because of Bangladesh Bank's recent monetary policy. According to this all the banks can allowed maximum 12.5% p.a. interest against fixed deposits. Previous rate was 8.25% p.a. But the Banks didn't follow that rate. They used to give customers more than 8.25% such as 10.5%, 13% and even 15.5%. For this reason many customers had bargained about the premium rate with branch in-charge. If the amount is much higher, the branch in-charge

submit an application to the head office for permission and most of the time the HO approved that rate. So there was a chance for the customers to bargain. But this time Bangladesh Bank is much careful and they are monitoring the banks FDR premium rate. So there is no hope for the customers. b. Supplier: According to suppliers bargaining power DBBL is in a win win situation. Most of the raw materials such as account opening forms, vouchers, pads etc are supplied by another company. It is actually controlled by the head office and they select the suppliers through tenders. As there are lots of companies with the same service, DBBL dont need to worry about this force. c. Threat of new entrants: As we all know there are nine new banks are entering into the competition of banking industry. So there is always threat of new entrants. Those new banks will come up with new ideas, new approaches, more efficient services and above all with more efficient work forces. People will always look for better service, and according to customer care, DBBL is not up to the mark. So, I think there is a great threat of new entrants for DBBL.

d. Threat of substitute: At this moment DBBL doesnt need to be concerned about substitute products if we consider only general banking. Yet they have to improve their loan products. Because they dont provide car loans, marriage loans etc like other banks. But the DPS, School Banking, Salary account, ATM network, Credit card all are doing very good for DBBL. If they care about their loan products, there will be no threat of substitute for them.

e. Rivalry among the existing competitors: Now this is a very interesting situation. If a customer wants to open an account, which bank he or she will prefer? What are the favors customers want from bank? Basically a customer wants an easy banking with a least possible time. He or she wants to have money as early as possible. He or she doesnt want to stand in a queue for extract or deposit money. Here comes the ATM network. With this benefit DBBL is well ahead of other rivalries. There are about 2000 ATM booths all over the country for DBBL and this is the main point for them to have new customers though their service is not so good. But there is flexibility for having money any time for the customers. The other competitors of DBBL are trying to increase ATM booths but the increase rate is not so good.

Sl no. 1 2 3 4 5 6 7 8 9 10 11 12 13

Name of the Banks DBBL Brac Bank AB Bank IBBL Prime Bank MTBL Trust Bank UCBL Jamuna Bank Mercantile Bank Dhaka Bank Shahjalal Islami Bank South East Bank

No. of ATM booths 1970 300 212 169 103 102 80 77 59 56 35 18 16

We can see the differences. So with only this benefit DBBL is increasing their customers day by day and well ahead of the rivals according to retail banking.

B. Companys Position:
a. Earnings per share: