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Prime Bank's Credit Card - a comparative study on Prime Bank Limited & Other Banks and Financial Institutions

of Bangladesh: its impact on organizational growth

specially on Prime Bank Limited.

Prepared For: M Sirajul Islam Lecturer Institute of Business Studies Darul Ihsan University

Prepared by: Arkanul Haque Roll #8031, BBA. 8th Batch Major in Finance Submission Date: 27 January 2004 Institute of Business Studies Darul Ihsan University

Letter of Transmittal

January , 2004 M Sirajul Islam Lecturer Institute of Business Studies Darul Ihsan University. Subject: Submission of Internship Report. Dear Sir, It is a pleasure to me to submit this internship report on " Prime Bank's Credit Card - a comparative study on Prime Bank Limited & Other Banks and Financial Institutions of Bangladesh: its ^impact on organizational growth specially on Prime Bank Limited. " , as a fulfillment of the requirement of BBA Program. I was assigned to work at Prime Bank Limited for 3(three months). This report is based on my acquired knowledge, experience and skill during my stay at this Bank. This is for your kind perusal and consideration.

Sincerely yours

Declaration

I, Arkanul Haque, hereby declare that the report of internship entitled & "Prime Bank's Credit Card - a comparative study on Prime Bank Limited & Other Banks and Financial Institutions of Bangladesh: Its impact on organizational growth specially on Prime Bank Limited" is prepared & after the completion of the internship in Card Division of Prime Bank Limited and a comprehensive study of the existing activities and its implementation. I also declare that the report is prepared for academic purpose not for any award on degree.

(Arkanul Haque)

ACKNOWLEDGEMENT
At first I have to express my gratitude and thanks to Almighty Allah who gave me the opportunity to complete the BBA-Degree Courses. Now, I would like to give my thanks to Mr. Rafiqul Islam, Lecturer, Open University (Ex. Lecturer, IBS, DIU) so that without his close guidance and valuable advice it would be too much difficult to go through the study. I wish to extend my thanks to the Human Resources Department of PBL who has assigned me with the topic. Finally I would like to give my thanks to all staffs and officers of Dhanmondi Branch, PBL, for their helpful cooperation. ;

I really owe to them. Shamima Sharmin BBA (7th Batch) Roll No. 7006 Institute of Business Studies Darul Ihsan University

Part: One
1.1 Work Study :The management of Prime Bank Ltd. and Mr. Rafiqul Islam Lecturer, IBS, Darul Ihsan University, Dhaka, Bangladesh has assigned internship report on "Marketing of Financial Products in Prime Bank Limited with comparison of other banks" to me. In this regard an organization attachment at Dhanmondi Branch of Prime Bank Limited has been given to me a lot of time. Within that period, I collected necessary data for the report. 1.2 Background of the Study : Prime Bank Ltd. one of the most successful Banking organization in the country. For the last few years the performance of the company was really goods. Prime Bank is the premier bank for consumers and small business with a commanding market presence in consumer credit, hire purchases and lease finance. As a Banking organization Prime Bank has several deposit schemes (MBDS, FDR, CCA, SA etc) and financial product (master card, loan from different purposes etc) As a business student, I have worked with Prime Bank Ltd. for my internship purpose I carried out a survey and my topic was "Marketing of Financial Products in Prime Bank Limited with comparison of other banks". I filtered, stored reshuffled and analyzed the collected information and interpreted all the analysis to bring about my hypothesis to be right. In my project I gave my attention to find out the comparative analysis among Prime's different deposit schemes and also to detect the strategy for creating strong market position.

As a Banking institution all the deposit schemes of the Prime Bank Ltd. are treated as a part of the financial products. 1.3 Objective of the Study : The main objective of the study is to know the marketing strategy o financial products of Prime Bank Limited through different aspects of the banking sector and to evaluate how well bank is doing in its Deposit Scheme. The specific objective of the study are given bellow: i) To find out the satisfaction level of the clients with the financial products and deposit schemes provided by the Prime Bank Ltd. at present. ii) Market feasibility of different schemes and financial products offered by the Prime Bank Ltd. iii) To find out the positive as well as negative sights of different schemes and financial products offered by the Prime Bank Ltd. iv) To find out any correction or addition/deduction required in the rules and procedures of the schemes and financial products offered by the Prime Bank Ltd. v) vi) To find out suitable marketing strategy for the schemes and financial products offered by the Prime Bank Ltd. Analyzing the clients' opinion about the schemes and financial products offered by the Prime Bank Ltd. vii) To prove my hypothesis to be right.

1.4 Scope of the Study : This report cover's PBL's market position of Deposit scheme It focuses on the over view of Management & organizational structure. It highlights other schemes of PBL. It also covers the overall performance i.e. General Banking, Loans & Advances and Foreign Exchange Department of PBL. 1.5 Methodology: This report is based on Primary & Secondary data. For write this report, information have been collected from the primary sources. Discussion with officers of several banks, secondary scours, newspaper, journals, annual reports of banks, published doeuments and other published papers & reports. Trend & growth rate analysis, ratio analysis & graphical presentation like chart, graphs, bar chart, have been used for evaluate consumer credit performance and prepare the report. 1.6 Limitation Although I have got co-operation from employee of PBL Dhanmondi Branch & Head office and they also gave me much time to make the report properly the way of my study, I have faced many problems that may be terms as the limitation/shortcoming of the study. i.) It was very tough to collect data for making a comparative study PEL performance about the Deposit scheme. In case they could not able to supply my topic related data for preparing a more in depth presentation. ii.) The time for the study may not enough for my study, to prepare this report & for submitting the report.

PART: TWO
Details of Prime Bank Ltd.
2.1 Historical Background of Prime Bank Ltd.: The banking system plays a critical role in underpinning economic development. Against the background of liberalization of economic Policies in Bangladesh, Prime Bank Ltd. has resulted in great success in all areas of operation of its bank with a view to improve the Socio-economic development of the country. Prime bank ltd. (PBL) was in corporated on 17 th April 1995 with 1000 million of Authorized Capital & Tk. 100 million of paid up capital by a group of Successful entrepreneurs. It is not a conventional Bank. It's a modern dynamic private commercial bank & play a constructive role in the economic development of the country. Prime bank is the first private bank to introduce lease finance, hire purchase & customer credit schemes in the banking sector in order to bring about qualitative changes in the lives of people of Bangladesh. PBL through its steady Progress & continuous success has, by now, earned the reputation of begin one of the leading private sector Banks of the country.

Prime Bank, an overview


Prime Bank Limited is a fast growing private sector bank and the Bank is already at the top slot in terms of quality services to the customers and value addition for the shareholders. The Bank made

satisfactory progress in all areas of business operation in 2003. The Bank closed the year with a number "of achievements registering significant growth in all areas of its operation including profitability. The Bank further expanded and consolidated its customer base in both of its core business and retail banking. The Bank retained its lead position with the capital adequacy ratio of 11.92% as on December end 2003 which is well above the stipulated requirement of 9%. The Return of Assets (ROA) was 4.13% which was well above the industry average. During the year under review, the network of branches increased to 30 with three branches -one in the Chittagong city and two in the Dhaka city. Of the 3 new Branches, two are Islamic banking branches pronouncing the Management's vow to strengthen Islamic banking operation alongside conventional banking are very selective in locating branches so that customers can be better served. This year we" have already planned to add a few branches to our network, which will give the Bank strategic advantages in terms of operation and business potentials. We have a. plan to add 50% of new branches as Islamic banking branches to our branch network in order to keep landing operation. Values The Bank holds the following values: To have a strong customer focus and to builcla relationship based on integrity superior services and mutual benefit." To work as a team to serve the best interest of the group. To work for continuous business innovations and improvements.

To value and respect people and make decisions based on merits. To provide recognition and rewards on performance.

Corporate Profile Registered office: Adamjee Court Annex Building-2 1 1 9 - 1 2 0 , MotijheelC/A Dhaka- 1000, Bangladesh Cable: PRIMEBANK Phone: 9567265, 9570747-8 PABX Telex: 642459 PRIME BJ Fax: 88-02-9567230, 9560977, and 9566215 E-mail: Primebank@bangla.net

2.2 Mission of BPL: Prime Bank Limited aims to become one of the top-performing banks by prudent financing to earn sustention profit and rendering of services to customers more efficiently and effectively. The bank has some mission to achieve its goals. These are: Its aim to improve customer services further through diversity in product and service. PEL intend to focus more on small and medium sized

enterprises by providing a broad range of financing options. The bank intends to increase the advance amount in different sectors.

The bank aims to help fixed income group in rising standard of living through financing to customers and small business group. The bank provides greater sufficient wealth for their shareholders. 2.3 Objective & Goals : PEL is ready to improve the highest quality customer service through new. It products and services such as ATM, ONLINE BANKING & POINT OF SALES transaction. PEL is always encouraging the client for purchasing its share by creating the opportunity of long-term investment and increasing the value of share through prosperity as developed day by day. The Major objective of PEL is to maximize profit through customer's satisfaction. The bank plays in vital role in socio-economic development of Bangladesh by developing world network in domestic and international operation.

2.4 Director of Prime Bank Ltd.:

2.5 Human Resource Management of PBL: The vibrancy of the Bank emanates from its people who are, our highest priority. We believe were able to assemble a pool of highly talented professionals are proud to .manage the Bank in an efficient manner. We and excellence of having built the finest team in the country and providing

them an environment in which team,-sprit, creativity

thrives. Our ' recruitment process is very rigid and policy oriented but fully transparent. We aimed at, recruitment only competent work force. W ^-trained them at various levels, mainly through of training institute. The Bank had compensation always focused on retaining employees through fair bonus as an and creating opportunities for career development.

During the year under review, w^ awarded substantial

incentive for all the employees. Moreover, employees with outstanding performance had been rewarded. As a result, for staff morale had been enhanced by a feeling with stronger loyalty and belongingness to the Bank. We ' continued our efforts to create and develop ethical members and listened to their and cohesive culture. Management frequently communicated with staff ideas and suggestions. Employees' compensation package and other welfare schemes were adjusted in line with the prevailing market levels. As on 31 st December 2003 total number of employees was 777 compared to 730 of 2002.

2.6 Organogram of PBL

2.7 Prime Bank Training Institution (PBTI):


Prime Bank Training Institute had all along supported the Bank through various in house training courses, workshops and seminars. The Institute played a significant role in strengthening the capabilities of 00? human resources. It constantly worked _an improvement ""of" training methods and materials. Most of the programs were designed in modular form with specific objectives and goals. Those were measured for evaluation of performance by life trainees. In 2003, PBTI conducted 4 (four) Foundation Training Courses, 8(eight) short courses and 24(twenty 'four) workshops for new recruits, junior level management staff, mid level management staff and senior executives. In addition, the Institute conducted 6(seven) short courses on Credit Operation and Management, International Trade Finance, Law and Practice of Banking and Islamic Banking Operation for mid level management staff. Besides, a (one) workshop was organized on Relationship between Bangladesh Bank and commercial banks for senior- level executives.

Prime Bank Foundation and Social Services


While strengthening risk management and improving asset quality was the main focus for, the Bank, we "were also aware of : responsibility to the society to which we belonged of also recognized expectations of but valued customers and shareholders towards our:" commitment for the welfare of poorer sections of the society. Against this backdrop, Prime Bank Foundation was created at the later part of 2001. Its activities were further recognized and efforts intensified towards welfare related

initiatives. The Foundation and employees of the Bank took part in diverse charitable and voluntary programs during the year under review. The main objective of the Foundation was to invest part of the Bank's profit in poverty alleviation and community welfare. Accordingly, the Foundation had made allocations to different areas of poverty alleviation and primary health care programs for the low income group of people. The wise Board has decided to establish a hospital solely managed and funded by Prime Bank Foundation for the benefits of "the underprivileged of the society. All those strongly reflected strong commitment of the Bank to working closely through Foundation with the community with which it co- existed. Prime Bank Foundation would continue to contribute to the activities that benefit the lives of common people and community throughout Bangladesh. To add to the above, the Bank participated in major sponsorship programs in the area of sports such as Football and Cricket to popularize the same among the public. The Bank on its own organized friendly cricket matches between a few private banks to promote fellow feeling within the banking community. In the year under review, Tk. 5.00 million was donated to the Prime Minister's Relief Fund. Besides, warm clothes, were distributed to the cold wave torn people.

2.8 Network of the Branch:


The bank established its business on 17 April 1995. The first branch was opened at Motijheel area in Dhaka. Now the total number of branches stood at 25 at the and of the year 2002. PEL divided its branches networks into five arenas i.e. Dhaka. Chittagong, Khulna, Rajshahi & Sylhet arenas

with 15, 3, 1 & 4 branches respectively. Among these branches 20 of have been licensed by Bangladesh Bank as Authorized Dealers in Foreign Exchange. The bank targets to open total 50 branches all over the Bangladesh for providing banking service to their customers. The branch network of PBL is shown in the next page

2.9 Function of PBL:


Prime Bank ltd. is a service oriented financial institution. The main function of the bank is customer service. The bank offers different types of quality services to its clients. PBL performs the functions, which are given bellow: i. Deposit Services: The first primary function of the bank is to accept deposits of money from the customer or saver group. PBL offers all types of deposit services to its customer available in today's bank in Bangladesh. The interest rate is different for the different types of deposits. For current deposit bank doesn't pay any interest. Prime Bank Ltd. serves following deposit services: Contributory Saving Scheme. Monthly Benefit Deposit Scheme. Special Deposit Scheme. Educational Deposit Scheme. Fixed Deposit Saving Deposit Account Short Term Deposit Account Foreign Currency Deposit Account Non Resident Taka Account Non Resident Foreign Currency Deposit Account (NFCD) Non Resident Investors Taka Account (NITA)

Prime Bank Insured Fixed Deposit Scheme. Prime Bank Money Scheme Multi Currency Account

ii. Credit Services: Banking business essentially involves lending. In fact the deposits are accepted for lending or investment. It interest rate ranges from 10% to 16.5% PBL gives loans in follows sectors. Consumers Credit Scheme Lease Finance Hire-Purchase Small and Medium Enterprise Credit Scheme Loan against share & Securities. House Building Financing Scheme Financing Scheme for Contractors Computer Software Financing Scheme Prime Bank Master Card Credit Card Working Capital Financing Import Financing Export Financing Industrial and Project Financing

Depending on the requirement of the borrower. The bank lend money in the following forms: On Line Banking Services SWIEL Services Islamic Banking Locker Services Exchange Rate. L/C Delivery Services. iii. Customer Service; The Prime Bank Provides value added services to their customers. They ensure high quality customer services through competent workforce. One of their greatest assets is the trust of its customers. To keep their trust they are to uphold the highest professional & ethical standards amidst all odds of competitive environment. PBL has the following arrangement of remittance with in and out side the country. Bank Draft or Demand Draft (D.D) Telephone Transfer (T.T) Pay order (P.O) Pay Slip (P.S) Mail Transfer Advice (MTA)

2.10.1 Insurance Scheme:

PEL offers Insurance scheme for its customer like life Insurance, Fire, Marine, Goods & Industry etc. There are two types of Insurance Scheme. i) Saving Insurance Scheme (SIS): PEL has introduced saving insurance scheme in the market offering deposit with insurance coverage. The Bank first offers this scheme with a lot of interest amongst the prospective clients to open accounts. Under this scheme the clients will enjoy death risks cover and the bank will pay usual rate of interest as prescribed for that account. It will help growth of stable deposit in the bank. ii) Monthly Saving Scheme (MSS): PEL has introduced monthly saving scheme in the market offering monthly deposit of Tk. 500 & Tk. 1000 respectively of a period of 5, 8, 10 years. The bank mainly offers their scheme for fixed, middle & low-income group of people PEL has been able to mobilized significant amount of deposit through this product. The saving rate in our country is very low comparing to any other neighboring countries. In order to galvanize the people minds towards saving the middle lower income group of people feels comfortable in saving their money under this scheme. The terminal benefits under this type of deposit are appended in below : Installment Term 5 years 8 years 1 0 years 2.10.2 Credit Card ; Tk. 500 Tk. 1000

Benefit payable at maturity (Tk). 40,000 80,000 75,000 100,000 1,50,000 200,00

Prime Bank Ltd. issues (Master Card) credit card to its customers who have the card pay their bill in to PEL against their card number. Prime bank offers (Master Card) credit card, which has opened up new possibilities for improved customer service and for becoming a dominant player in the market. PBL ensues high level of security by inserting its customer photograph on the card and provides 24 hours a day & 365 days a year worldwide service. The Bank has recently obtained principle membership from Visa International. All preparations are under-Way to launch visa card as early as possible. Fees for PrimeJlank Credit Card: Sl.# 01 02 03 04 05 06 07 08 09 10 Fees Annual Fee Additional Fee Replacement Fee Late Payment Fee Excess limit Return Cheque Statement Retrieval Sales Fee Slip Retrieval Out town Fee Gold Int'l 120 (US$) 120 50 10 20 15 5 10 20 Local (Tk) 2500 1500 1000 450 750 350 50 250 250 1000 Salver . International 70 70 35 10 15 10 5 10 15 20 Local (Tk.) 1400 900 500 300 500 250 50 200 200 1000

cheque Collection Fee PIN Replacement Fee 20

2.10.3 Locker Service ; PBL offer Locker service in some selected branch. The bank charge different amount from its clients on yearly based according to the size of locker. The bank charges Tk. 15000 & Tk. 1000 for larger & smaller

size. Under this service the client should have an account in that particular branch. If he/she fails to make payment or time, the fees will be adjusted from his/her account. 2.10.4 ON-LINE Banking; Prime Bank Ltd. has set up a wide area Network (WAN) across the country to provide on-line branch banking facilities to its valued clients. The service named PRIME LINE has opened up several possibilities of improved customer services. Under this scheme, clients of one branch are able to do banking transaction at any other branch of the bank. The bank hosts its web site (ww.prime-bank.com) to facilitate dissemination of information about our banking services & facilities to out side world. The bank is planning to provide 24 hours customer services by installing Automated Teller Machine (ATM) in the near future.

PART: THREE
My Project Part: Deposit Scheme of Prime Bank Limited
A bank is a financial institution, which take deposits money from surplus economic unit and provides leading to the deficit economic unit. It plays an important role for developing economic growth in a country & it is a largest mobilizes of surplus domestic savings. The operational procedures of PEL are divided into following parts. 03.1. Different types of Account/Deposit Scheme in PBL: The total deposits held by the banker are broadly divided into demand deposits and time deposits. PBL is maintaining the major accounts for deposit mobilization. The different types of account/scheme as: follows: i. Demand Deposit: Under demand deposit the client can withdraw his/her money any time without any prior notice. At present prime bank limited offer three types of demand deposit. These are: A) Current Account (CD) B) Saving Account (SB) C) Short term deposit Account (STD)

A. Current Account (CD): This scheme is of the nature of demand deposit. No interest is allowed on this deposit. This account has chequing facilities & balances are transferable. B. Saving Account (SB): Deposit on this account is self-explanatory and generally emanates from the individual. A portion, varying from time to time has saving deposits constituted demand deposit. Under this scheme Bank pays 5% to 8.5% interest rate to the clients. C. Short term Deposit (STD): The characteristics of short-term deposit & current Deposit are same. Here clients have to hold money for some period of time & the volume of the deposit will be large than current account. Under this scheme interest rate is 5.5%. ii. Term Deposit In case of term deposit client can withdraw his/her money offer specific period of time, Prime Bank limited offers following kinds of term deposits. A) Fixed Deposit Receipt (FDR): This is reclassified by period of maturity and is exclusively time deposit. Under this scheme there are some terms & condition are as follow: Minimum deposit of this scheme will be 25,0007 Age Limit for the deposit should be 18 to 45 years

Insurance coverage will be available up to Tk. 20 lac Insurance coverage for natural death & for accidental death both deposit amount will be 100 The range of interest rate of this scheme is 8075% to 10.50% a The minimum time for this scheme is 1 year. In case of FDR scheme PEL deals with following terms deposit Term 30 Days 3 months 6 months 1 year 2 years 3 years Interest Rate 8.50% 8.75% 9,00% 9.25% 9.75% 10.2$%

B) Contributory Saving Scheme (CSS): This is a savings scheme in which a person gets the opportunity to build up saving by contributing monthly installments for getting an attractive fixed amount at the end of a specified term. The Scheme is designed to help the fixed income group to save money and build up a sizable fund. So that with the help of the lump sum amount they received, they can go for some income-generating venture to improve the quality of their life or meet any future plan and program.

The salient future of the Scheme are given below: 1) The size of the monthly installment shall be Tk. 100, Tk, 250, Tk. 500 and Tk. 1000 to be deposited every month throughout the savings term. 2) The term of Saving shall be for 5 years and 10 years 3) The depositor will have the option to choose any installment at the time of opening of an Account and will not be allowed to change the size of installment afterwards. 4) Account under the Scheme can be opened on the separate Form designed for the purpose. Photograph and introduction will be required for opening of the account. 5) The depositor will have the option to close his account specified for the term and draw the amount at the end of any term. For example, a depositor with a monthly installment of Tk. 100 will. 6) have the option to draw Tk. 8,000 after 5 years, Tk. 15,000 after 8 years and Tk. 20,000 after 10 years. 7) A lump sum amount shall be paid to the depositor after maturity of respective terms of saving as per the following table: Installment Term 5 years 8 years 10 years Tk.100 8,000 15,000 20,000 Tk. 250 20,000 37,000 50,000 Tk. 500 40,000 75,000 1,00,000 Tk. 1,000 80,000 1,50,000 2,00,000

Amount payable at Maturity (Taka)

C)

Monthly Benefit Deposit Scheme: This is a Deposit Scheme where the depositor gets monthly benefit

out his depositor gets monthly benefit out of his deposit. The Scheme is -designed to attract: i) ii) The retirement benefits of service holders. The investment of wage Earners who want to pay a fixed amount monthly to there families /dependents in Bangladesh from the profit of their investment iii) iv) v) The deposit of those persons who intend to meet the monthly budget of their families from the income out of the deposit, Investment of fund of Trusts and Foundations, which award monthly scholarship/stipends to students, Parents who want to defray the educational expenses of their children from the monthly benefit of their deposit with the bank. The Salient features of the Scheme are given below: 1) Deposit of Tk. 1,00,000.00 and multiples there of shall be acceptable for the Scheme. 2) The Deposit shall be for a period of 5 (five) years. The Principal amount is refundable on maturity. 3) Profit shall be paid on monthly basis @ Tk. 1,000.00 per Tk. 1,00,000.00 D) Special Deposit Scheme: This is Deposit Scheme where an instrument is issued for the full amount payable after a specified period against deposit of a certain

amount. The Scheme is specially designed to provide for children education, marriage and old age security. It will create good opportunity for attractive investment of; Provident Fund, Trust Fund, Reserve Fund/Security Fund of Institutions and, Organizations. It will also provide opportunities for the Wages Earners towards profitable investment of their funds. The Salient features of the Scheme are given below: 1) Deposit of Tk. 1,00.00 and multiple thereof shall be acceptable under the Scheme. 2) An Instrument shall be issued for 5, 7 or 10 years. 3) The Instrument shall not be encashable before maturity. It may, however, be discounted at the counter of the issuing Bank at any time @ 15% on the remaining period of maturity, if necessary. Any other Bank/Organization/Firm/Person can also discount the instrument. In case of the Instrument being discounted by other Bank/Organization/Finn /(Person, the Instrument may be retain with them till maturity or presented at the counter of the issuing Bank for immediate payment at the discounting rate. But in any case the depositor shall not lose his Principal. 4) In case of death of the payee, the amount of the Instrument will be paid at a discounted rate to the nominee of the payee or, in the absence of nomination, to the legal heirs of the payee on production of Succession Certificate. 5) In Instrument will be acceptable as primary /collateral security against any advance/loan subject to registering the lien of he same with the issuing Branch of the Bank.

6) n case of loss of the Instrument, rules pertaining to issuance of Duplicate FDR after loss of Fixed Deposit Receipt (FOR) shall be applicable for such issuance of "Duplicate". 7) Bank will issue 'Order Instrument' payable to a particular person, organization firm, etc, for an amount payable at maturity as written on the face of the Instrument as per the following table: Term 5 years 7 years 1 0 years Initial Deposit (Taka) 1,00,000 1,00,000 1,00,000 Value Payable at maturity (Taka) 1,65,000 2,00,000 3,00,000

Amount payable with profit at maturity will vary proportionately as per above table according to the size of initial deposit amount. E) Educational Savings Scheme (ESS) Prime Bank limited has introduced a saving scheme entitled "Educational Saving Scheme". The scheme provides a unique opportunity to the parents to make a future provision for the education expenses of their children when they enter in to school, colleges and university out of the benefit of a small amount of savings with the bank at an opportunity moment. The salient features of the scheme are given below: a) b) Deposit of Tk. 25000/- and multiplies thereof at a time will be accepted under the scheme. The instrument shall be issued for 7 years, 10 years or 20 years term.

c)

The deposits is payable at maturity with benefit either in;lump sum or on monthly basis as educational allowance for six year completion of the respective term as per the following table:

Term 7 years 15 years 20 years

Initial Deposit Amount payable at maturity 25000/25000/25000/25000/55000/77000/136000/240000/-

Education allowance per 1000/month 1500/2500/4500/-

3.1.2 Account Opening Department 3.1.2.1 Opening an Account; Banker & customer relationship established though opening an account. It binds the Banker & customer into a contractual relationship. There are two types of account i.e. a deposit account & loan account. Generally account opening means to open a deposit account. When a customer want to pen a bank account the banker's has to maintain some common principle & procedure form & he/she have to field those prescribed form & have to attached their organization's document. 3.1.2.2 General Precaution in account Opening: There are following papers /document required for opening of various types of accounts. A) Individual /Joint i) Account Opening Form with nominee form duly filled up

ii)

Two copies of Photograph of the Account holder(s) who will operate the account duly signed by the account holder(s) and attested by the introducer,

iii) iv) v)

One copy of photograph of the Nominee duly attested by the account holder(s), Specimen signature Card signed d by the account operator(s) on the presence of an authorized officer of the Bank. Proper introduction by an introducer. Introducer should have acceptability to the bank. Introducer will confirm the identity of the account holder and he/she will also sign in the account opening form as an introducer.

vi)

Special instruction (if any)

B) Proprietorship Firm i) ii) Account Opening Form duly filled up, Two Copies of Photograph of the Account holder(s) who will operate the account duly signed by the account holder(s) and attested by the introducer iii) Copy of valid Trade License regarding its validity, address, title/ownership of the license etc. iv) officer of the Bank. v) Proper introduction by an introducer should have acceptability to the bank. Introducer will confirm the identity of the account holder by putting his/her signature on the back of the photograph of account holder and he/she will also sign the account opening form as an introducer. Specimen Signature card signed by the account operator(s) on the presence of an authorized

vi)

Special instructions (if any)

C) Partnership Firm i) ii) iii) Account Opening form duly filled up. Two Copies of Photograph of the Account holder(s) and attested by the introducer Copy of valid Trade license duly attested by the Bank Officer. Banker will examine the trade license regarding its validity, address, title/ ownership of the license etc . iv) v) Specimen signature Card signed by the account operator(s) on the presence of an authorized officer of the Bank, Proper introduction by an introducer. Introducer should have acceptability to the bank, Introducer will confirm the identity of the account holder(s) & he/she will also sign the account opening form as an introducer, vi) vii) Certified copy of partnership deed or copy of partnership deed attested by the MD. Partnership Account Agreement (Bank's prescribed form) viii) Resolution signed by all partners to open the account & instruction regarding operation of the account, ix) Special instruction (if any)

D) Limited Company: i) ii) and attested by the introducer, Account Opening Form duly filled up, Two Copies of Photograph of the Account holder(s) who will operate the account duly singed by the account holder(s)

iii) iv) v)

Certified copy (Certified by the Register of Joint Stock Company) of Memorandum & Article of Association, Certified copy (Certified by the Register of Joint Stock Company) of Certificate of Incorporation, Certified copy (Certified by the Register of Joint Stock Company) of Certified of Commencement of Business. (In case of Public Limited Company),

vi)

Board Resolution duly signed by the Board of Directors as per their Memorandum for opening & operation of their Account with the Bank,

vii)

List of Director (Included Present & Permanent Address of the Directors) which will be supported by the FORM-12 duly Certified by the Register of joint stock Company.

viii) ix)

Specimen signature card signed by the account or)eratof(s) on the presence of an authorized officer of the Bank, Special instructions (in any)

E) Club /Society/School / College etc. i) ii) Account Opening Form duly filled up. Two copies of Photograph of the Account holder(s) who will operate the account duly signed by the account holder(s) and attested by the introduced. iii) iv) Certified copy of Bye-Laws & Regulations/Constitution duly certified by the Chairman /Secretary, Certified copy of Resolution of Management/ Committee/ Executive Committee duly signed by the member of the

committee as per their Memorandum for opening & operation of their Account with the Bank, v) Up to date List of Office Bearers/Governing Body/Managing Committee duly certified by the Chairman/Secretary (Including Present & Permanent Address of the Office Bearers /Governing Body /Managing Committee) vi) vii) F) Trust: i) ii) Account Opening Form duly filled up, Two Copies of Photograph of he Account holder(s) who will operate the account duly signed by the account holder(s) and attested by the introducer. iii) iv) v) vi) Up to date list of Members of the Trusty Board Certified copy of Deed of Trust Certified copy of Resolution of the trustee Board for opening & operation of their Account with the Bank, Specimen signature Card signed by the account operator(s) on the presence of an authorized officer of the Bank. vii) Initial Deposit viii) Special instruction (if any) 3.1.2.3 Documentation after Opening and Account; After observation of all the formalities /document mentioned above, the banker's has to scrutinized account opening from, specimen Specimen signature Card signed by the account operator (s) on the presence of an authorized officer of the Bank, Special instructions (if any)

signature card & all required documents as per accounts category. Before giving the approval of account the branch manager has to used sufficient intelligence & common sense in ascertaining the genuineness of new account. Then the applicant is required to deposit minimum Tk. for opening a bank account as per account category, this is called initial deposit. As soon as this money is deposited, the bank opens an account in the name of the applicant. The banker then has to mention the following steps, which are also 'related with the opening of an account in all the cases. Numbering/indexing the account Issuance of chaque book Supplying a passbook & pay-in -slip book Issuance of letter of Thanks to the introducer Mandate form it the Account holder wants to operate the account by giving a mandate to another person. All special instruction to be authenticated by all the signatories of the account. 3.2 DEPOSIT POSITION OF PRIME BANK LIMITED IN YEAR 1997 TO 2003 At the end of 2003 total deposits stood at Tk. 21092.35 million, a 28% increase compared to Tk. 16,481.60 million from the preceding year. This was undoubtedly a remarkable progress considering volatile price situation for acquiring deposits. Liability pricing came under stress on a number of occasions during the year. Because of the weak demand, the Bank had to rationalize pricing for different sets of liability. Despite our low offering, the Bank was able to mobilize substantial deposits

through various deposit schemes. As on December end 2003, deposit under various schemes stood Tk. 4,115.91 million against Tk. 3,644.40 in the last year showing an increase of around 13%. 3.1 THE DEPOSITE MIX AS ON DECEMBER 1997 TO 2003
SI. No Items Year 2002 tkin million %of total depos it 1 2 3 current & other depost saving bank deposit Bearer certificate of deposit 4 5
6

Year 2001 tkin million %of total depos it 2214.7 5 10.58.7 9 40.20 19.83 9.48 0.36

Year 2000 tk in millio %of total depos it 536.20 7.00 1135.9 9 537.73 14.83 7.02

Year 1999 tkin millio n %of total depos

2649.8 0 1996.3 0 30.94

19.98 9.02 0.24

it i 424.61 8 715.37 13 421.04 8

Fixed deposit Short term deposit


Deposit scheme Others deposit

5430.3 6 1092.4 1
2662.8 5 197.21 13259. 87

40.95 8.24
20.08

7018.4 2 650.02

62.84 5.82

2883.9 3765 Q 346.23


1005.7 6

22998 4 228.05
812.37

44 4
15

4.52
13.13

1.49 100.0 0

186.51 11168. 72

1.67 100.0 0

1214.1 1 7660.0 2

15.85 100.0 0

411.97 5313.2 5

8 100

3.4 COMPARATIVE ANALYSIS OF O SIT MIX OF YEAR 200-1998


1.49 0.24 20.08 Anrrent & Other deposit 40.95 Saving bank deposit Beerer certificate Fixed deposit Short term deposit 19.98 Deposit Scheme Others deposit 9.02 8.24

3.5 Performance & Growth of PBL: 3.5.1 Investment Growth of PEL: The investment of the bank as on 31 st Dec. 2001, at Tk. 1729.3 million against Tk. 1524.54 in 2000 & the growth over 2000 is 13%. The investment growth of PBL (1997-2001) as mentioned in the following table & graph: Table year Tk. (in million ) 1997 583.06 1998 604.30 1999 964.41 2000 1524.54 20QB 1729.30

(source: annual Report)

3.5.2. Deposit Growth of PBL: The total deposit of the bank was Tk. 13269.9 at the end of Dec. 2001 as against Tk. 11168.72 million of 2000 & the growth rate over the preceding year is 19% has introduced several deposit schemes to encourage & mobilize savings. Its various purpose oriented deposit scheme have been appreciated by the public & have gained popularity. The deposit growth of the bank (1997-2001) is shown bellow: Year Tk. (in million) 1997 4236.18 1998 5313.25 1999 7660.02 2000 11168.72 2001 13259.9

3.5.3. Advance Growth of PBL: The bank has formulated its policy to give priority to small & medium enterprises with in the policy guidelines of the bank & Bangladesh addition to traditional financing of commercial & industrial groups. The bank introduces consumer credit scheme that aims to help the fixed income group in raising standard of living have been widely appreciated. The total

loans & advances of the bank amounted Tk. 7667.73 million of the previous year & the growth over 2000 is 18%. The growth of advance of the bank, (1997-2001) as shown in below. Year Tk. (in million) Is997 1752.11 1998 3127.77 1999 5121.03 2000 7667.73 2001 9074.9

3.5.4 Net Profit of PEL: Prime Bank limited established in 1995 & in these six years, the bank achieved satisfactory progress in every aspect of its operations. The Bank earned profit worth Tk. 791.6 million at the end of Dec. 2001 as against Tk. 60.82 million on 2000 showing & increase of 30% over the preceding year. The profits of the bank (1998-2001) is show in below. Year Tk. (in million) 1998 17.39 1999 31.93 2000 60.82 2001 79.16

3.6 SOURCES OF FUND After observation the Annual Report 200$, of Prime Bank Ltd. we find: out the proportion of deposit in the total sources of fund is 4%, which is higher than the other sources. This graph is shown as follow: 3.7. LOAN AS A % OF TOTAL DEPOSITE After observation of Annual Report of year 1997 to 2001 of Prime Bank Ltd. find the position of loan as a percentage of total deposit is given below: Year Tk. in Million 199741% 1998 59% 1999 67% 2000.69% 2003 68%

PART: FOUR

Dhanmondi Branch of PBL at a Glance The topic 'Marketing of Financial Products in Prime Bank Limited with comparison of other banks is the main part of my internship report / paper. The report is completed at Dhanmondi Branch office of PBL, which is started on 02 May,2001 . The whole activities of the branch are divided into three major departments. Those are given below: General Banking Department Advanced Department Foreign Exchange Department 4.1. General Banking Department: This department includes the following operation. 4.1.1. Demand Deposit: This deposit one with draw able on demand and no prior notice is needed for PBL to accept demand deposit through the opening of: Current A/C Saving A/C 4.1.2. Time Deposit: Time deposit are repayable on the expire of a fixed period of time only. PBL accepts time deposits through the following different deposit scheme. Fixed Deposit

Short-term Deposit Bearer Certificate Deposit Contributory Savings Scheme Educational Saving Scheme Money Building Scheme 4.1.3. Other Operations: Cheque Issue Demand Draft (D.D) Pay Order (P.O) Telegraphic Transfer Travelers Cheque (T.C) Mail Transfer Advice (M.T.A) Under these Departments, the bank officer receives different types of cheque. He/she has to keeps record of collecting cheque & return cheque in the registered book. Every day with in 3 P.M. he/she has to make, the particular schedule paper for sending to Bangladesh Bank. The total amount of the records has to match with other record book. In dispatch section, the officer receives & forwards every letters & documents. Under remittance department, the bank officer writes vouchers of pay order, D.D. & T.T.and also transfers it into the record book. It is very important for P.O.D.D. & T.T. to match the test number. In the accounts section the officer has to post all the vouchers into the computer under different heads. In the end of the day, account division receives vouchers from every section & they keep it under different heads. If the total amount of records doesn't match with other

records, then the officers have to check it from the beginning. It is very tough job to do. 4.2. Advance Department; Banking business essentially involves in deposit extraction & credit instruction. This department exercises the lending function. Infect the deposit are accepted for lending or investment. Under this department PEL of offers following types of loans & advance. 4.2.1 Cash Credit; i) ii)
LTM

Pledge & Hypothecation

Loan General Secured overdraft (S.O.D) i) ii) iii) Financial obligation General Export

Working capital Bank Guarantee Hire Purchase Consumer credit scheme

Under credit department, lending upon which repayment is interest servicing performance deteriorates are to identified at an early stage is closely monitored in order to loan losses. In lending, borrower selection is the most important step of this department. If the borrower is not of good character, resourceful, responsible & reliable, the bank can't easily get the return from the lending. Then it has to suffer a lot due to the classified loans & advances & monitoring is made much difficult for banker. That's why the banker has to maintain some restrictions. 4.3 Foreign Exchange department; This department includes following activities of PEL, Dhanmondi Branch L/C issue L/C collection & negotiation A/C Advising & conforming FDBP Encasement of Traveler's cheque Presentation & Retirement of Import Documents

4.5 Ratio Analysis of Dhanmondi Branch of PBL. Ration Analysis for the Periof of Jan. 01 to Dec. 2004 Fig. In Lac. 1. Yield on Advance
Formula = Intt.received averagedAdvance

2. Cost of Fund
Formula = Intt.PaidonDeposit averagedpost

= 65.46/224.86 =29.11%

= 47.31/549.93 = 8.61% 4. Return on Asset


Formula = Pr ofit Asset

2. Cost of Fund wit Establishment Cost


Formula = TotalExpenditure Totaldeposit

=513.33/6595.41=7.79% 5. Overall Productively


Formula = TotalIncome ToalExpendure

= 1.05/26.08 = 3.89% 6. Manpower Productivity


Formula = TotalIncome ToalExpendure

= 619.20/513.97 = 1.21 times 7. Employee Expenses


Formula = employeeExpenditure ToalExpendure

= 619.20/37.86= 16.35 lac 8. Per employee Deposit


Formula = TotalIncome No.ofEmployee

= 37.86/513.97 = 7.37%

= 619.20/15=41.28 lac

9. Per Employee Profit

10. Per Employee Deposit

Formula =

NetIncome No.ofEmployees

Formula =

TotalDeposit No.ofemployees

= 105.23/15 = 7.02 lac 11. Per employee advance


TotalAdvance No.Employees

= 6595.41/=439.70 lac 12. Employee Expenses to Operational expenses


Formula = EmployeeExpenses OprtionalExpenses

Formula =

= 2698.33/15 = 179.89 lac

= 37.86/73.35 = 51.62% 13. Profit Margin


NetIncome TotalAdvance

14. Burden Coverage


Formula = FeeIncome NonInterestExpenses

Formula =

= 105.23/619.20 = 16.9% 15. Credit Deposit Ratio


Formula = TotalAdvance TotalDeposit

= 6.60/73.95 = 7%

= 2698.33/6595.41 = 40.91%

4.6. Branch Performance & Growth 4.6.1. Deposit Growth ; Dhanmondi branch of PEL mobilized total deposit of Tk. 6595.41 lac at the end of December 2002 as against Tk. 3356.58 lac on 2001. The deposit growth of the branch (2001-2002) is shown bellow. Year Tk. (in lac) 2001 3356.58 2002 6595.41

(Sources of Data: Dhanmondi Branch of PEL)

4.6.2. Advance Growth; The total loans & advances of Dhanmondi branch of PBL stood at Tk. 2698 Lac as on Dec. 30, 2002 where on Dec. 30, 2001 it was Tk. 324.32 lac & increase of 87.99% over the preceding year. The advance growth of the branch is shown is below:

Year Tk. (in lac)

2001 324.32

2002 2698

4.6.3 Month wise trend of Deposit & Advance of Dhanmondi branch of PBL for the year 2002 (Jan.-Dec.) are furnished bellow: Month January February March April May June July August September October November December Deposit 3269.50 3482.96 3748.95 4147.52 4262.36 4809.66 5248.75 5783.08 6221.18 9799.21 6465.89 6595.41 Advance 362.52 377.47 566.40 1085.07 1491.92 1590.09 1551.65 1605.81 1704.14 1649.61 1837.82 2698.33

4.6.4 Net Profit;

I have already mentioned that, Dhanmondi Branch of PEL Started in 02 May, 2001. In these short time the Branch achieved satisfactory progress in every aspects of it operations. During the year 2002 this branch earned profit worth Tk. 105 lac as against Tk. -33 lac on 2001. Year Tk. in lac 2001 -33 2002 105

(source of Data: Dhanmondi Branch of PBL)

Recommendations : After conducting the survey in different private banks, gathering & analyzing the data on deposit, I have found a fewer number of factors as problems. The following major problems of the PEL & recommendation are thus advised: To increase effectiveness of various activities on deposit the bank should have to select only potential customer on the basis of the customer's good character, resourcefulness, reliability & responsibility, They should increase mess communication with the clients, Guarantors & renowned sellers of consumer products. To reduce their defaulter customer & & earn more profit, they should have to reduce their interest rate because their interest rate is higher than that of other Banks.

for successful handling of this scheme proper supervision & monitoring is essential, so PEL should utilize its existing Management Information system (MIS) effectively. to increase recovery rate, the bank should follows the following particulars: Regular checking of the balance of clients SB/CD/A/CS. Regular communication with the defaulter customers and guarantors Issuance of letter to customers immediately after dishonor of cheque. Issuance of letter to the defaulter customer and respective guarantors. Contact with the employers f the defaulter customers (After 03 overdue installment) Issuance of legal notice to the defaulter customers and guarantors prior to classification of the loans. Issuance of Appreciation/ Greetings Letter to the regular customers. Periodical visit with the customer to maintain relationship and supervision of supplied articles. Legal action to be taken after failing all possible efforts to recover the Bank's dues. The market position of this scheme is very competitive, so PBL should have to take some extensive promotional activities to attract more consumers

Conclusion:
The Banking sector plays an important role in modern society &' private banks has made more competitive, diversified & dynamic ; compared to traditional banking system. Every day new competitors appear into the industry with better innovative ideas & product as well, services. "Deposit Scheme" is one of the innovative products. PBL is a leading bank for financing & operating Deposit program with more attractive benefits in the private banking sector in our country. In order to serve within such competitive market PEL needs to decrease interest rate for their consumer credit scheme. According to the survey there are few private banks operating this program with low volume & some newly established banks are planning to launch this program in a large volume. In this situation, If interest rate decreases & some extensive promotional activities are taken, PBL can actually attract more customer of Deposit & can drive to higher level of performance.

References:
1. 1999, Annual Report, Prime Bank Limited; 2. 2000, Annual Report, Prime Bank Limited; 3. 2001, Annual Report, Prime Bank Limited; 4. Half yearly performance report of PBL for the year of 1999,2000,2001, and 2002. 5. Brochures of different programs of PBL