ACKNOWLEDGEMENT

ORGANIZATIONAL ENVIRONMENT

Organizational environment denotes internal and external environmental factors influencing

organizational activates and decision making.

Every organization, whether business or non-business, has its environment. The organizational
environment is always dynamic and ever-changing.

Changes today are so frequent and every change brings so many challenges that managers and
leaders of the organization need to be vigilant about the environmental changes. The environment
of an organization consists of its surroundings – anything that affects its operations, favorably or
unfavorably.
DFCC BANK

DFCC Bank was set up in 1955 as Sri Lanka's pioneer Development Finance Institution on the
recommendation of the World Bank and is one of the oldest development banks in Asia. A unique
institution; private sector in form but more like a public-private partnership in outlook, DFCC
Bank was set up under an act of Parliament, to give rise to the post independent industrial growth
through private sector participation.

In October 2015, in a landmark event in Sri Lanka’s banking and financial sector, DFCC Bank
PLC and its subsidiary – DFCC Vardhana Bank amalgamated to form a fully-fledged commercial
bank supervised by the Central Bank of Sri Lanka.

The Bank presently operates 138 branches across the country, and customers are serviced by over
1,500 dedicated employees with expertise in various disciplines.

We have selected DFCC Bank to analyse the components of general business environment.
ECONOMIC FACTORS

The banking industry and the economy are tied. How income flows, whether the economy is
prospering or barely surviving during times of recession, affects how much capital banks can
access. Spending habits, and the reasons behind them, affect when customers borrow or spend
funds at banks.

Inflation as it directly affect interest rates in the economy and thereby banks income. Inflation
affects currency and its value and causes instability. In inflation deposits are easier to be
mobilized and loans are more easily repaid.

Foreign investors think twice before providing their funds when a particular country’s currency
value is high.

Exchange rates also affect banks globally — stable currencies such as the US dollar impact other
currencies, spending habits, and inflation rates in other countries.
How economy behaves affect bank. In a recession, NPA rise and affect the bank.
SOCIOCULTURAL FACTORS:

Cultural influences, such as buying behaviors and necessities, affect how people see and use
banking options. People turn to banks for advice and assistance for loans related to business,
home, and academics. Consumers seek knowledge from bank tellers regarding saving accounts,
bank related credit cards, investments, and more.
Consumers desire a seamless banking experience. And technology is developing to allow
consumers to buy products easier, without requiring assistance directly from banks. Socio cultural
forces too can have a deep impact on the bank, changing social trends and peoples’ preferences
can affect the profit and growth of the brand of the bank.

 Population-increase in the population is one of the important factor which affect all
private bank sector banks. Bank would open their branches after looking into the
population.

The communities we operate in are a source of customers and employees. Therefore, it is our
duty to understand their perceptions and expectations of us, and mould our operations and CSR
initiatives around them in order to foster mutually beneficial partnerships.

We engage with our local communities through our network of branches and public events. We
support them through volunteer efforts and CSR activities that cover entrepreneurial
development, education, environment conservation, emergency relief, and sponsor deserving
causes. Furthermore, we engage with the media through meetings, press conferences, press
releases, and our corporate website.
TECHNOLOGICAL FACTORS

Once, it was expected to visit the local bank to make changes to financial accounts. But not
anymore.

Technology is changing how consumers handle their funds. DFCC Bank offers a mobile app
called virtual wallet to witness accounts, transfer funds, and pay bills on smartphones. The
DFCC Wallet is used by thousands of customers with over one thousand merchants. DFCC Chats,
an online chat box, can be accessed via Facebook and provides instant feedback to customers and
merchants, the voice command feature enables fund transfers, bill payments, and the ability to
check the account balances effortlessly
Debit cards are also changing. Chips have been implemented IN 2019, requiring users to insert
their card into debit machines rather than swiping them.

Even banks themselves are utilizing technology within the workplace. Telecommunicating
through virtual meetings is being embraced. It replaces the need for in-person meetings.

Gold Credit Card Platinum Credit Card

DFCC ICONNECT IS AN ONLINE PORTAL BUILT FOR DFCC BANK’S COPORATE,
BUSINESS BANKING AND SME CLIENTS TO CARRY OUT

THEIR DAILY TRANSACTIONS, IT GIVES THEM THE FLEXIBILITY TO ACCESS THEIR

PORTFOLIOS AT THE CLICK OF A BUTTON
CASH DEPOSIT MACHINES WERE INTRODUCED
LEGAL FACTORS:

The banking industry follows strict laws regarding privacy, consumer laws, and trade structures to
confirm frameworks within the industry. Such structures are required for customers in the
allocated country and for international users.

Legal risks are immense because oversight and regulation are very high in the banking sector.
Customer concerns and social responsibility have also made the government introduce several
laws. Banking is a heavily regulated area where compliance requires a lot of focus and also
spending.
Whistle blowing policy of the bank and its subsidiaries was reviewed and recommended by the
Audit committee during the year of 2018 in order to further strengthen the policy as a
communication channel to raise any genuine concerns.