EXCELLENCE IN BANKING

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 TERM PAPER
Course No: FIN 101
Section: 04

Submitted By:
SL No. Name ID
1 Riduan Islam 2018-1-10-090
2 Nahid Hussain Adri 2018-1-10-101
3 Arup Saha 2018-1-10-201
4 Md. Saiem 2018-2-10-006
5 Zaber Ibna Zia 2018-2-10-184

Submitted To:
Md Humayun Kabir
Senior Lecturer, Department of Business Administration

Date of Submission: 15 May 2020

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Letter of Transmittal
1st December, 2020

Department of Business Administration

East West University

Subject: Submission of report on “Dhaka Bank”

Dear Sir,

With due respect and great pleasure, we are submitting our report on “Dhaka Bank Limited”.
The report is prepared for “Business Administration” department and we respectfully
acknowledge our supervisor’s guidance and help. The report attempts to describe the knowledge
that we have gained during the study. Despite several constraints, we gave our full effort to make
this report a meaningful one. However, there may be shortcoming. We would be grateful if you
consider those as excusable.

We have tried sincerely to comprehend and translate our knowledge in writing this report. We
enjoyed the work very much and gladly attend any of your call to clarify on any point, if
necessary.

Sincerely yours,

Group:

1. Riduan Islam (ID: 2018-1-10-090)

2. Nahid Hussain Adri (ID: 2018-1-10-101)
3. Arup Saha (ID: 2018-1-10-201)
4. Md Saiem (ID: 2018-2-10-006)
5. Zaber Ibna Zia (ID: 2018-2-10-184)

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Acknowledgement

By the grace of Allah, we are able to submit our report to our honorable teacher
Md. Humayun Kabir. We would like to thank our teacher for her support. This report
could not be possible without our teacher. The remarkable thing is that the facilities of
East West University have played a vital rule to complete our assignment. Because we
had to use its lab facilities which was admirable. Finally, we would like to say that we are
ready to accept our any errors and lack which belongs to us.

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Executive Summary
The report on “Dhaka Bank Limited” was a great experience for us. Our whole report contains
several parts about a private bank of Bangladesh.

Bangladesh is a developing country in the world. The country has been developing its different
business sectors and Financial sectors are one the highest priority business in Bangladesh. The
country has been developing its all side of financial sectors. In Bangladesh, the private financial
institution is producing consumers trust by giving them the best services and drugs that are
capable of meeting local demand as well as exporting to different foreign countries.

Based on the issues and concerns identified from the review of literatures as well as from the
primary research, it is clear that Bangladesh is technologically developed in Financial systems.

We chose “Dhaka Bank Limited” as our lead financial institution to make this report.

This is truly a helpful and important topic to study and to learn. It has many advantages than its
disadvantages. We think that more security is needed indeed.

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Table of Contents
Introduction.................................................................................................................................................7
Objective of the study..................................................................................................................................8
General Objectives:.................................................................................................................................8
Specific Objectives:.................................................................................................................................8
Limitations of the Study..............................................................................................................................8
Overview of Dhaka Bank............................................................................................................................9
Mission....................................................................................................................................................9
Vision......................................................................................................................................................9
Corporate Values...................................................................................................................................10
Product and services..............................................................................................................................10
PROJECT FINANCE (LONG, MID & SHORT TERM)......................................................................10
Products offered under Project Finance –..............................................................................................11
WORKING CAPITAL FINANCE........................................................................................................12
TRADE FINANCE................................................................................................................................12
CASH MANAGEMENT SOLUTIONS................................................................................................13
Analysis:....................................................................................................................................................14
From the Income statement and Balance sheet:.....................................................................................14
Findings:....................................................................................................................................................22
1. Low quality of asset...........................................................................................................................22
2. Lack of good governance, accountability and transparency...............................................................22
3. Inadequacy of effective risk management system..............................................................................22
4. Credit Growth....................................................................................................................................22
5. Withdrawal of money from private bank...........................................................................................23
6. Increase import cost and decrease export revenue.............................................................................23
7. Decrease foreign remittance..............................................................................................................23
8. Industrial Loan...................................................................................................................................24
9. Non-performing Loan........................................................................................................................24
10. Surplus Liquidity.............................................................................................................................24
11. Restrict loan flow circulation by Bangladesh Bank.........................................................................24
12. Attractive rate of Government ‘’Sanchaya pattra’’ or Saving Certificate........................................24
Recommendation and Conclusions:...........................................................................................................25
Bibliography:.............................................................................................................................................26

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Introduction
Dhaka Bank limited is one of the premier banks in Bangladesh. Since its inception in 1995,
Dhaka Bank Limited has continued to show its potential and grow in its sector to become that
brand that it is today. Dhaka Bank Limited (DBL) is the leading private sector bank in

Bangladesh offering full range of Personal, Corporate, International Trade, Foreign Exchange,
Lease Finance and Capital Market Services. Behind its success lies the efforts of its skilled and
motivated employees and staff and the efficient management. Dhaka Bank Limited believes in
providing the customers with the latest and the greatest and with that in mind, The Bank has
launched Online Banking service and being fully equipped with industry standard IT
infrastructure, Online Banking, E-Commerce, Internet Banking and SMS Banking – Dhaka Bank
is one of the fastest growing private banks in Bangladesh. Dhaka Bank Limited is the preferred
choice in banking for friendly and personalized services, cutting edge technology, tailored
solutions for business needs, global reach in trade and commerce and high yield on investments,
assuring Excellence in Banking Services. The report explores various scenarios about “Dhaka
Bank Limited”. On this report there is included the basic overview of Dhaka Bank Limited, it’s
growth rate, it’s products and services etc. And finally, on this report we attached the problems
or the sectors where need to developed & give our recommendations to overcome the problems.

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Objective of the study
General Objectives:
As we know that “Dhaka Bank Limited” is one of the reputed banks in Bangladesh Commercial
Bank Sector. The purpose of the project, in simple sense is to identify the key factors in restoring
or increasing the efficiency. The very first objective is to prepare a research paper to complete
our “Fin 101” course. It specified topic implementing the knowledge that has been gathered over
the semester at East West University- on this course from our honorable course instructor “Md.
Humayun Kabir”.

Specific Objectives:
 To collect information about Dhaka Bank Limited.
 Finding the factors that are influencing.
 Conduct an analysis the growth rate.
 Identify the limitations and recommend means to overcome the shortcomings.
 Reduce Structural/procedural redundancies to ensure smoother operations.
 Increase the overall efficiency.

Limitations of the Study

From the intention to make the report realistic and properly accepted this report has been conducted.
However, many problems appeared in the way of conducting the study. The study considers following
limitations:

 The major limitation I faced in preparing this report was the sensitivity of the data.
 During the study on that situation it was not possible to visit the any brunch by the bank.
 For this uncertain situation it was not possible to communicate with any member or employee
of DBL.
 Although the financial statements and other information regarding the study have been
considered from the official website of DBL.
 Confidentiality of data was another important barrier that was confronted during the conduct
of this study.
 Every organization has their own secrecy that is not published for the general people.
 It was not possible for our members to come together and meet in this difficult time.

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Overview of Dhaka Bank
The bank was incorporated as a public limited company under the Companies Act, 1994. The
Bank started its commercial operation on July 05, 1995 with the Authorized Capital of Tk. 1,000
million and Paid-up Capital of Tk. 100 million. The present Authorized Capital of the Bank is
Tk. 10,000 million. The Paid-up Capital of the Bank stood at Tk. 7,223 million as on December
31, 2017. The total equity (capital and reserves) of the Bank as on December 31, 2017 stood at
Tk. 15,828 million. As on December 2017, the Bank has 100 Branches including 2 Islamic
Banking Branches, 3 SME Service Centres, 56 ATMs, 20 ADMs, 2 Offshore Banking Units, 1
Kiosk and 6 Branches under Dhaka Bank Securities Limited across the country and a wide
network of correspondents all over the world. The Bank has plans to open more Branches in the
days ahead to expand the service delivery network.

The bank offers the full range of banking and investment services for personal and corporate
customers backed by the state-of-the-art technology and a team of highly motivated
professionals. As an integral part of our commitment to Excellence in Banking, Dhaka Bank now
offers the full range of real-time online banking services through its all Branches, ATMs, ADMs
and Internet Banking Channels. Dhaka Bank is the preferred choice in banking for friendly and
personalized services, cutting edge technology, tailored solutions for business needs, global
reach in trade and commerce and high yield on investments.

Mission
To be the premier financial institution in the country providing high quality products and

services backed by latest technology and a team of highly motivated personnel to deliver

Excellence in Banking.

Vision
At Dhaka Bank, they draw inspiration from the distant stars. Their vision is to assure a

standard that makes every banking transaction a pleasurable experience. Their endeavor is to

offer you supreme service through accuracy, reliability, timely delivery, cutting edge

technology and tailored solution for business needs, global reach in trade and commerce and

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high yield on your investments. Their goal is to achieve a distinct foresight. Their prime objective is to
deliver quality that demonstrates a true reflection of our vision - Excellence in Banking (Dhaka Bank
Limited, 2016).

Corporate Values

 Customer focus
 Integrity and honesty
 Quality
 Teamwork
 Respect for the individual
 Responsible citizenship

Product and services

Dhaka Bank Limited Corporate Banking provides financial products & services that fulfill
various banking needs of large Corporate Houses, as well as Financial Institutions & Micro-
Credit Organizations. Their product basket ranges from short term financing of day to day
business operations to long term loans for expansion of business. We work to understand one’s
specialized needs and design tailored and structured solutions for their business.

PROJECT FINANCE (LONG, MID & SHORT TERM)

Project financing is an innovative and timely financing technique that has been used to fund
large-scale corporate projects. It includes understanding the rationale for project financing,
preparing the financial plan, assessing the risks, designing the financing mix, and raising the
funds.
Dhaka Bank offers a full range of products & services to the entrepreneurs implementing a
project including structuring mode of financing, mitigation of different risks and providing
advisory service for successful implementation of the project.

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 Products offered under Project Finance –

 Term Loan – Machineries

 Term Loan – Construction

 Lease Finance (Machineries)

 Foreign Currency Loans

 Textile, Ready Made Garments

 Cement

 Steel & Engineering

 Paper & Packaging

 Jute Industry

 Telecom, Media and Technology

 Power Sector

 Glassware

 Edible Oil and Consumer Products

 Energy and Infrastructure

 Chemicals and Pharmaceuticals

 Construction

 Renewable Energy (Solar Energy)

 Ship-building

 Aviation

 Healthcare

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 WORKING CAPITAL FINANCE
Working Capital is the life blood for any newly established projects. Dhaka Bank’s working capital financing
includes all sorts of facilities for every sector of businesses and industries with respect to their nature of
operation. Their products and services for financing working capital depending on the nature of facilities can
be segmented as –
Non – Funded Facilities

 Letter of Credit (Cash LC, BTB LC, UPAS, EDF etc.)

 Bank Guarantee (BB, PG, APG, Payment Guarantee, FC)

Funded Facilities

 Short Term Loan (3, 6, 9 months)

 Overdraft – Others
 Overdraft – Work Order
 Cash Credit (Hypothecation, Pledge)
 Loan against Trust Receipt (LTR)
 Time Loan

TRADE FINANCE
Ever since “Business” has become a matter of beyond the geographical boundaries, Foreign
Trade has been introduced as a major wing of modern banking. For supporting the businesses of
our customers, we have made a strong base for offering wide range of products and services
related to Trade Finance.
 Export LC (Advising & Transfer)
 Export Bill Negotiation/Collection
 Import Finance
 Import Bill Handling
 Shipping guarantee
 EDF Loan
 OBU Financing

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 CASH MANAGEMENT SOLUTIONS
 Payment & collection solution
 Bulk cheque Processing
 Utility Bill collection
 Vendor/Salary Payment
 Cash pickup & Delivery
 Hajj Remittance Processing
 Managing IPOs as Lead Bank
 Act as Banker to the issue of IPOs

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 Analysis:

From the Income statement and Balance sheet:

Total Operating expenses

Year Amount (in BDT) Growth rate (%)

2013 2,766,270,932

2014 3,117,602,824 12.7

2015 3,275,376,103 5.06

2016 3,409,126,200 4.08

2017 4,251,502,230 24.70

2018 4,395,266,939 3.38

Growth rate (%)

30

25

20

15

10

0
2014 2015 2016 2017 2018

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 Operating Income

Year Amount (in BDT) Growth rate (%)

2013 3,356,339,852

2014 2,863,806,337 -14.67

2015 2,022,059,457 -29.39

2016 3,722,096,375 84.07

2017 3,387,600,626 -8.99

2018 5,559,822,305 64.12

Growth rate (%)

100

80

60

40

20

-20

-40

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 Total Provision

Year Amount (in BDT) Growth rate (%)

2013 745,471,707

2014 795,415,977 6.69

2015 1,221,563,509 53.57

2016 2,705,665,690 121.49

2017 2,445,327,422 -9.62

2018 3,630,508,288 48.47

Growth rate (%)

140

120

100

80

60

40

20

0
2014 2015 2016 2017 2018
-20

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 Consolidated earnings per share (CEPS)

Year Amount (in BDT) Growth rate (%)

2013 3.49

2014 3.69 5.73

2015 2.21 -40.10

2016 2.26 2.26

2017 1.98 -12.38

2018 1.73 -12.62

Growth rate (%)

10

0
2014 2015 2016 2017 2018

-10

-20

-30

-40

-50

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 Total liabilities

Year Amount (in BDT) Growth rate (%)

2013 132,967,275,479

2014 146,802,248,750 10.40

2015 163,503,407,149 11.38

2016 188,361,934,709 15.20

2017 215,000,609,110 14.14

2018 258,147,915,645 20.06

Growth rate (%)

25

20

15

10

0
2014 2015 2016 2017 2018

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 Total Equity

Year Amount (in BDT) Growth rate (%)

2013 12,044,815,846

2014 12,973,073,950 7.71

2015 13,711,571,310 5.70

2016 14,914,978,095 8.78

2017 15,827,881,305 6.12

2018 17,249,109,680 8.98

Growth rate (%)

10
9
8
7
6
5
4
3
2
1
0
2014 2015 2016 2017 2018

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 Investments

Year Amount (in BDT) Growth rate (%)

2013 20,240,852,234

2014 21,660,965,339 7.02

2015 23,072,924,090 6.52

2016 23,783,240,894 3.08

2017 26,040,501,710 9.50

2018 30,641,895,095 17.67

Growth rate (%)

20
18
16
14
12
10
8
6
4
2
0
2014 2015 2016 2017 2018

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 Cash

Year Amount (in BDT) Growth rate (%)

2013 11,900,762,425

2014 15,900,963,572 33.61

2015 14,966,422,109 -5.88

2016 16,715,758,759 11.69

2017 13,684,691,050 -15.13

2018 15,451,545,066 12.91

Growth rate (%)

40

30

20

10

0
2014 2015 2016 2017 2018

-10

-20

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 Findings:
1. Low quality of asset
The main assets of any bank which they use as their uses or investments are: Reserve, Cash item in
process of collection, Deposits at other banks, Securities and most importantly Loans. But in our
banking g sector there are several problems related to the low quality of assets which banks are using
day by day. During our study we have found two major problems related to the quality issue about the
asset s of our banking sectors. From the further part of our discussion we will try to focus on those
particular problems.

2. Lack of good governance, accountability and transparency

The banking industry of our country has continuously made considerable progress but despite this
situation the foreign countries are consider our banking system or banking industry activities as
questionable. This occurs because recent news about bank directors and chairmen’s involvement in
political parties. There has been a possibility to unhand bank’s important deals with using the bank’s
goodwill which will question the factor that is our banking industry and its’ operations are independent
& reliable?

3. Inadequacy of effective risk management system

The risk management system is a combination of some terms which includes: asset quality, capital a
adequacy, nonperforming loan, expenditure income ratio, return on Asset (ROA), &return on Equity
(ROE). If we first talk about the capital adequacy, we must have to say that this is a cushion for a bank
that prevents bank failure. Capital adequacy is measured by the capital to Risk Weighted Asset.

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 4. Credit Growth
Credit growth is the increase in the loans for the private sector, individuals, establishments and public
organizations. When credit is expanding or increasing, consumers can borrow and spend more and
businesses can borrow and invest more. The expansion of credit tends to cause the price of assets such
as property and stocks to increase, thereby boosting the net worth of the public. Increasing
consumption and investment produces jobs and expands income and profits. However, every credit-
induced economic boom comes to an end when one or more important sector of the economy becomes
incapable of repaying the interest on its debt

5. Withdrawal of money from private bank

“Bangladesh Bank Governor Fazle Kabir has sought the finance minister's intervention to stave off
pressure to withdraw government funds from private banks, which has been creating an artificial
liquidity crisis and bumping up interest rates for lending. Citing the case of cash-strapped Farmers
Bank, the BB governor said many government organizations are now scrambling to withdraw their
deposits, including those for development programmers, from private banks.

6. Increase import cost and decrease export revenue

As per a recent news of a renowned newspaper we can be able to know that in first five months of
current financial year LCs for import have been increased by 88%.

7. Decrease foreign remittance

Because illegal channel of mobile banking, money laundering the foreign remittance is decreasing.
Some of our respondents identified it as another top cause of liquidity crisis. Though it is not only a
short-term problem. According to them remittances is not coming through proper channel and thus not
coming to banks.

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 8. Industrial Loan
Since April-June, 2011 the growth rate in the industrial term loans has been fluctuating with an
irregular movement and growth rate was also negative. For adequate capital formation loan is a very
important factor like the developing country of outcome .

9. Non-performing Loan
Non-performing loan is a loan that is in default or close to being in default. Many loans become
nonperforming after being in default for 90 days, but this can depend on the contract terms. Once a
loan is nonperforming, the odds that it will be repaid in full are considered to be substantially lower. If
the debtor begins to pay on the NPL it becomes a Reforming Loan, even if the debtor has not caught up
all the missed payments.

10. Surplus Liquidity

Surplus liquidity occurs where cash flows into the banking system persistently exceed withdrawals of
liquidity from the market by the central bank. Surplus Liquidity: Implications for Central Banks.

11. Restrict loan flow circulation by Bangladesh Bank

In a recent report of a newspaper some banking specialists identified the strict obligation to maintain
Advance-Deposit Ratio (ADR) by central bank on 30th January, as another prime cause of liquidity
crisis.

12. Attractive rate of Government ‘’Sanchaya pattra’’ or Saving Certificate

Transfer money from private Bank to this Governmental security: Some of our valuable respondents
have identified this problem as one of the major causes of liquidity crisis.

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 Recommendation and Conclusions:
All the branches of Dhaka bank are mot introducing with foreign exchange system. So, it will be

better for Dhaka bank if they will introduce foreign exchange in most of their branches.

Continuing better relationship with customers. In terms of import or export they have to increase

the efficiency along with effectiveness. They need to add more features on client services. Their

marketing strategies should disseminate all over the employee. As we know that, media coverage

of DBL is no so strong. To attract new clients, they should go for mass media coverage. People

in a global edge, are very much well informed about their wants & needs. They always want to

consume better services from the other end. As a Services Based company, DBL need to

introduce better financial services. As we know, DBL has 44 branches all over the country. It is

very hard to provide full range services with those branches. So, they need to pay more attention

toward the expansion the branch network. Though DBL is running online business very

successfully they should open more ATM booths to meet customer needs and to meet the

competitors.

The main competitive advantage of DBL is enjoying that it has online banking where as other

commercial bank cannot yet achieve that advantage. But all the commercial bank is now trying

to achieve this. In this bank the employees are highly motivated by their remunerations and other

benefits. Here, all the employees are very much cooperative with their customers, colleagues and

simply visitors.

So, from the report and also from my short study it seems that the credit management and

performance of Dhaka bank is quite good and acceptable though it is a second-generation bank

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and established in 1995. Their credit approval and monitoring process and its performance

increased very rapidly and still trying their best to improve more and more. So, within a very

short period they earned the respect and acceptance from the customers and now it is one of the

leading private commercial Bank of the country.

Bibliography:
[ 2014, December 31], Annual Report, Published from Dhaka bank Limited:
https://dhakabankltd.com/wp-content/uploads/2013/05/Dhaka-Bank-Annual-Report-2014.pdf.

[ 2015, December 31], Annual Report, Published from Dhaka bank

Limited:https://dhakabankltd.com/wp-content/uploads/2016/05/Dhaka%20Bank_Annual
%20Report__2015.pdf

[ 2016, December 31], Annual Report, Published from Dhaka bank

Limited:https://dhakabankltd.com/Dhaka-Bank-Annual-Report-2016.pdf

[ 2017, December 31], Annual Report, Published from Dhaka bank

Limited:https://dhakabankltd.com/wp-content/uploads/2018/06/DBL-Annual-Report-2017_PDF.pdf

[ 2018, December 31],Annual Report, Published from Dhaka bank

Limited:https://dhakabankltd.com/wp-content/uploads/2019/05/Annual-Report-2018.pdf

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