AMERICAN INTERNATIONAL UNIVERSITY BANGLADESH
Internship Report On Credit Risk Management of BANK ASIA Limited.
Prepared for Bohi Shajahan Prepared by Shemme, Sidra Islam ID# 09-15101-3
Date of Submission : 04 December,2013
Letter of Transmittal 04 December 2013 Mr. R. Tareq Moudud, FCMA Director, Office of Placement & Alumni (OPA) American International University-Bangladesh Banani, Dhaka. Subject: Submission of Internship report on “Credit Risk Management of BANK ASIA Limited.” Dear Sir, First of all I would like to thank you for assigning me this subject to prepare the internship report. I am submitting a well-structured & comprehensive internship report on “Credit Risk Management of BANK ASIA Limited.” which has been prepared for partial fulfillment of the requirements for the degree Bachelor of Business Administration. Despite many constraints like limited time, scope & access to information, I have tried to create something satisfactory. In making this report I have tried to follow your guideline in every aspects of preparing this report. I have concentrated on the most relevant & logical areas to make my report coherent as well as practical. I hope this report will entice your kind appreciation. Thank you, Sincerely yours
SHEMME, SIDRA ISLAM ID No: 09-15101-3 Department of Finance, American International University-Bangladesh
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Letter of Endorsement This is to certify that Sidra, Shemme Islam is a student of BBA, ID# 09-15101-3 successfully completed her “Internship Program” entitled “Credit Risk Management of BANK ASIA Limited.” under my supervision as the partial fulfillment for the award of BBA degree. She has done her job according to my supervision and guidance. She has tried her best to do this successfully. I think her program will help her in the future to build up her career. I wish her success and prosperity.
…………………………………… Bohi Shajahan Department of Finance Faculty of Business Administration American International University-Bangladesh.
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Student’s Declaration
I do hereby declare that the work presented in this internship report titled “Credit Risk Management of BANK ASIA Limited.” is an original work done by me under the guideline of Bohi Shajahan, Department of Finance, Faculty of Business Administration, American International University-Bangladesh No part of this report has been previously submitted to any other University/ College/ Institution/ Organization for any academic certificate /degree/diploma certification. The work I have presented does not violate any existing copyright and no portion of this report is copied from any work done by anyone. The content of the report or the financial information collected from secondary source. If any misinformation appears in this report, the Bank has no more liable for this. I am responsible for this misinformation.
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SHEMME, SIDRA ISLAM ID No: 09-15101-3 Department of Finance, American International University-Bangladesh
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Acknowledgement: Initially, I would like to express my gratitude to Allah to give me the strength to complete the report within the stipulated time. With deep interest I had started my work. My “Internship Program” is just a part of BBA under the Dept. of Business Administration, American International University-Bangladesh, but I had gathered practical knowledge about the Credit Risk Management of Bank Asia Limited. With due respect I remain all the teachers of my department, who have significant contribution behind merging “Internship program” in BBA curriculum. I am greatly indebted to Bohi Shajahan, who has supervised instructed & directed me to complete Internship program. Without the special guideline of her, it would be impossible to complete my internship report successfully. My sincere gratitude goes to S. M. Salahuddin (AVP) and Head of Bank ASIA Limited, Rupnagar Branch & Ali Adnan (EO), Manager Operation for giving me the opportunity to work in his branch. There is no doubt that, because of their help, I, as an inexperienced person was able to accomplish the report. These persons gave me their valuable time whenever I needed their help. This report is so a blessing of the individuals who gave the valuable information of their banks.
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Executive Summary: Banks are exposed to five core risks through their operation, which are-credit risk, asset/liability risk, foreign exchange risk, internal control & compliance risk, and money laundering risk. Among these risks management of credit risk gets most attention. Credit risk is an essential factor that needs to be managed. Credit Risk Management needs to be a robust process that enables banks to proactively manage credit portfolios in order to minimize losses and earn an acceptable level of return for shareholders. ‘Credit Risk Management’ has become an important topic in banking and financial sectors. Risk is inherent in all aspects of a commercial operation; however, for Banks and financial institutions, credit risk is an essential factor that needs to be properly managed. In formulating a credit judgment and making quality Credit Decisions, the lending officer must be equipped with all information needed to evaluate a borrower’s character, management competence, capacity, ability to provide collaterals and external conditions which may affect his ability in meeting financial obligations. In this report I tried to review the existing credit risk management systems, credit risk grading and assessment methods etc. for the bank. The report consists of my observation and on the job experiences during the internship period in the Rupnagar Branch, Bank Asia Limited. The report mainly emphasizes the sequential activities involved in credit approval process, analytical techniques, risk management techniques adopted by Bank Asia both in pre-sanction and postsanction period of a credit. Finally the report incorporates an evaluation of the different aspects of the lending process and risk management techniques and makes some recommendations. Bank Asia follows some specific principals for its credit activities, which involve Know Your Customer (KYC), safety, liquidity, profitability, purpose and spread. The lending procedure followed by Bank Asia consists of a set of sequential activities. In these sequential activities, both bank officials and potential borrowers play significant role. The credit proposal consists mainly of a brief description of the borrower, purpose of the loan, collateral, and expiry of the credit line, amount, interest rate and the result of the credit analysis.
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The credit proposal is prepared to facilitate the approval of that particular loan either by Corporate Office credit committee or by the Board of Directors. Bank Asia does not have any fixed time duration to complete lending process for a particular loan proposal. The total duration of the time required to complete the lending process varies with the nature of credit, collection of information, nature of information, analysis of information, preparation of the proposal, corporate office scrutiny, board approval, preparation of sanction advice, creation and collection of charges documents and actual disbursement of loan. Bank Asia must try to reduce the time required by a particular lending process to be completed. The Higher the duration, the higher the loan processing cost. Lending is the main income generating activity for all banks including Bank Asia. Lending involves both risk and profit. But a sound lending process supported by quantitative analysis, qualitative judgment and a separate credit monitoring cell can reduce the risk to a certain extent. So far Bank Asia has maintained a very good loan portfolio and its lending process is reasonably sound. Bank Asia will be able to manage its lending process and management techniques more effectively and efficiently.
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TABLE OF CONTENT SL
Letter of Transmittal Letter of Endorsement Student Declaration Acknowledgement Executive Summery
Page 1 2 3 4 5
Rational of the Report Background of the Report Objective of the Report
9-10 10-15 15
2.1
Work-Related
17-20
2.2 2.3 Chapter: 3
Organization-wide Other Relevant Activities
20-25 26
Chapter: 1 Introduction 1.1 1.2 1.3 Chapter: 2 Activities Undertaken
Particulars
CONSTRAINTS/CHALLENGES AND PROPOSED COURSE OF ACTION FOR IMPROVEMENT 3.1 3.2 3.3
Identified/observed in the organization Academic Preparation Knowledge & skills that need to be learned in the University
28-29 30 31
Chapter: 4
LESSONS LEARNED FROM THE INTERNSHIP PROGRAM 4.1 4.2 Chapter: 5
Implications of Organization Implication to University’s Internship Program
33 34-35
CONCLUDING STATEMENTS 5.1 5.2
37
Summary Recommendations
38
Chapter: 6 Suggestion for Improvement or Course of Action Appendices
40-41 42-49
References
50
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Chapter 1 Introduction
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1.1 Rational of the Report Credit risk management is a very important area for the banking sector and there are wide prospects of growth and other financial institutions also face problems which are financial in nature. In order to cope effectively with the diversifying risk environment, we have built a risk management framework by developing our risk management approach from a micro to a macro perspective, and shifting our focus from “minimizing losses from individual transactions” to “maximizing corporate value.” This framework is strongly linked to the management plan, playing a critical role in supporting the efficient management of our corporate resources. Credit risk management is risk assessment that comes in an investment. Risk often comes in investing and in the allocation of capital. The risks must be assessed so as to derive a sound investment decision. And decisions should be made by balancing the risks and returns. Giving loans is a risky affair for bank sometimes and certain risks may also come when banks offer securities and other forms of investments. The risk of losses that result in the default of payment of the debtors is a kind of risk that must be expected. A bank to keep substantial amount of capital to protect its solvency and to maintain its economic stability. The greater the bank is exposed to risks, the greater the amount of capital must be when it comes to its reserves, so as to maintain its solvency and stability.
For assessing the risk, banks should plan certain estimates, conduct monitoring, and perform reviews of the performance of the bank. They should also do Loan reviews and portfolio analysis in order to determine risk involved.
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Banks must be active in managing the risks in various securities and derivatives. Still progress has to be made for analyzing the credits and determining the probability of defaults and risks of losses. Credit risk management must play its role then to help banks be in compliance with Basel II Accord and other regulatory bodies.
A risk management system will help an organization identify the risks and security issues associated with their business and assets. Once these threats have been established, the RMS should endeavor to measure the risks and prepare strategies to minimize them. These strategies should be carried out and continuously monitored to ensure that they are effective and still required. So credit risk management becomes a very important tool for the survival of banks.
1.2 Background of the report: Bank Asia Limited is a schedule Bank under private sector established with in the ambit of Bank Company Act, 1991 and was incorporated as a Public Limited Company under Company Act, 1994 on September 28, 1999. The Bank started commercial banking operations from November 27, 1999. In February 2001, Bank Asia took over the Bangladesh operation of The Bank of Nova Scotia, the first acquisition of a foreign bank by a local bank in the banking history of Bangladesh. Later, Bank Asia took over the Bangladesh operation of Muslim Commercial Bank of Pakistan in December 2001. These courageous moves were possible for some visionary decision makers and also dedicated team of professionals who are constantly putting their best efforts to establish the bank as one of the leading concerns in the industry. In the year 2003 the Bank again came to the limelight with oversubscription of the Initial Public Offering of the shares of the Bank, which was a record (55 times) in our capital market's history and its shares commands respectable premium.
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Vision, Mission & Core Values: Bank Asia is a third generation public limited commercial bank. It received the Certificate of Incorporation on September 28, 1999 and came to operation on November 27, 1999. Now after 12 faithful years of dedicated and reliable services, Bank Asia has created an envious position for itself among the leading banks of the country with an Asset base of TK. 117 billion, Deposit of TK 95 Billion and 70+ outlets all over the country. But most importantly, the Bank has an unsurpassed legacy attached with its image.
PAY-OFF LINE/SLOGAN: FOR A BETTER TOMORROW
Vision: Bank Asia's vision is to have a poverty free Bangladesh in course of a generation in the new millennium, reflecting the national dream. Our vision is to build a society where human dignity and human rights receive the highest consideration along with reduction of poverty.
Mission: To assist in bringing high quality service to our customers and to participate in the growth and expansion of our national economy. To set high standards of integrity and bring total satisfaction to our clients, shareholders and employees. To become the most sought after bank in the country, rendering technology driven innovative services by our dedicated team of professionals.
Core Values: Place customer interest and satisfaction as first priority and provide customized banking products and services Value addition to the stakeholders through attaining excellence in banking operations Maintain high ethical standard and transparency in dealings
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Be a compliant institution through adhering to all regulatory requirements Contribute significantly for the betterment of the society Ensure higher degree of motivation and dignified working environment for our human capital and respect optimal work-life balance Committed to protect the environment and go green.
Goals: Sustainable growth Synergies between new knowledge and human capital for sustainable economic growth.
Capital stewardship Preservation and enlargement of multiple forms of capital; like intellectual, natural, financial, organizational, social; all of which contribute to long term value creation
Accelerating financial inclusion Accelerate progress towards financial inclusion with technology like ATM, mobile phone, smart card based banking services and renewable energy generation projects especially in rural areas.
Differentiating Value Added Services Strong focus on extremely cost-efficient and green services through Internet banking, electronic fund transfer, automated cheques clearing, e-bank statement, SMS alert etc.
Going Green Quantification of in-house facilities and energy consumption to promote paperless office and enhance energy efficiency. Greater emphasis on green banking projects.
Leader in business
Create new dimension in the syndication and structured financing.
Grow with export.
Well diversified portfolio.
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Current Achievement of Bank ASIA Limited: 2012 “Best Banker’s Award” by the District Administration office, Jessore for significant role in promoting Agricultural activities in Jessore Region.
Recognized by Bangladesh Bank as one of the Top 10 Commercial Banks for significant contribution to Green Banking in Bangladesh.
Certificate of Merit from Institute of Cost and Management Accountants of Bangladesh (ICMAB) for Best Corporate Award 2012.
Certificate of Merit from Institute of Chartered Accountants of Bangladesh (ICAB) for Best Published Accounts and Reports 2011
2011 2nd position for Best Published Accounts and Reports 2010 by ICAB Certificate of Merit award by SAFA for Best Presented Accounts and Corporate Governance 2010.
Bank Asia and Green Banking: We aspire to establish us as a prominent institution that will operate to reach our long term strategic objective to be a green, triple bottom line bank where every decision will be taken with both financial and environmental considerations in mind. We have unified our sustainable operations less than one roof by forming “Green Banking Unit” equipped with permanent employees. Our Green Banking Policy Guidelines and Green Office Guide have been circulated to all our employees for creating awareness on Green Banking activities & providing instructions about conserving energy, water, saving paper, etc.
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As a Bank we play an intermediary role between economic development and conservation of the environment. Our Green Banking activities are on multidimensional areas which include both inhouse environment management and undertaking Green Financing towards supporting Green Economy.
Other Activities on Green Banking: We have also incorporated environment friendly and resource saving initiatives into our banking operations as follows:
Bank Asia has been one of the pioneers in introducing Online Banking and it covers 74 branches/ SME centers, 68 own ATMs, 2890 shared ATMs. Clients can also have access to their accounts through Internet & Mobile Banking.
Bank Asia has been equipped with Bangladesh Automated Clearing House (BACH) system since October 2010, which allows paperless cheque clearing.
Instruments of Green Banking offered by Cards Division include E-Statement, SMS Banking, SMS Alert, Net Banking, E Fund Transfer, and Digital Attendance and E Mail corresponding, which help reducing printing paper.
We are saving around 32% electricity (used for lighting purpose) by using the day light in our Corporate Office. We have installed Solar panels in our 7 branches.
In an alliance with a Canadian firm AlertPay, Bank Asia is the first local bank to introduce an easy online payment gateway service.
Bank Asia is the 10th private commercial bank to launch Express cash system which is easier and faster domestic remittance service.
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Bangladesh Bank Rating on Green Banking: Bangladesh Bank has recognized Bank Asia as one of the top ten private commercial Banks for their contribution to Green Banking activities across the country. As our economy moves ahead, we believe financial institutions should undertake more sustainable activities as we need to make the optimum utilization of our resources. We are working forward to extend our reach for Green Banking Initiatives in the coming year and hope to maintain our leading position.
1.3 Objectives of the report: To figure out The BANK ASIA’s position in the banking industry. To get an idea on the overall performance of The BANK ASIA Ltd. To overview the bank’s credit risks management. To have a brief understanding on the CRM policies and procedures. To understand of Credit Risk Grading & its assessment. To outline Credit risk management framework. To indicate Credit policies & dealings. To understand how credit risk is measured. To point out the opportunities of credit financing. To highlight advantages & disadvantages of credit risk management. To overview Credit risks monitoring and control.
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Chapter 2 Activities Undertaken
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2.1 Work Related Internship program evaluate the combination between our theoretical knowledge & Practical knowledge. It gives us the opportunity to work practically. It will be very helpful to all of us when we involve in job market. A sensitivity of completeness runs through my veins when I identify myself working with the brilliant professionals of the country’s leading financial institution. To give an insight into the operational activities of the Bank, especially in the areas of Accounts, General Banking, Advance and Foreign trade, the management decided to continue a job rotation program. During the job rotation period level best efforts was given to be acquainted with the operational activities of Bank.
Department: Credit Functions of the Department:
SME Loan: To create SME loan general information of client, information of three (3) guarantors and the signature of client along with 3 guarantors attached. Clients have to give the information of 4 relatives. I have done this for the amount of 5 lakh. That’s why no mortgage paper was needed to attach. At last I have attached stamp.
CIB report: It stands for Credit Information Burro. Clients who apply for loan, the bank gather all the information and sent it to the Bangladesh Bank. I have done this.
I have kept the file on the basis of loan statement list.
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Some clients insurance expired. I have informed them to renew the insurance. I have attached stamp on Stamping Charge Document Loan file. I have proper analyzed the credit proposal.
AS credit department is concerned the main point is they in all respect the must be careful about the safety of bank’s fund. The policy of KYC is also conducted duly. In measuring the risk, along with Credit Risk Grading (CRG) individual judgment is necessary to be applied. For doing so extensive visit to customer is a must.
Department: Cash I have performed that the vouchers were transferred to the Excel.
Customer Service Functions of the department:
Account opening: I have completed account opening form by asking different types of question to the customers. What types of account to be opened is the major point. If the customer wants to open DPS or FDR, they should open a savings account first. The procedure of filling the form same for DPS, Savings, FDR, Double Benefit. I have done to attach client photo and signature, nominee photo, signature and information and the national ID card of the client in the form. Then I have input the information into the system and a customer ID is created. Photocopy of TIN certificate, trade license and business seal is required for Company’s current account.
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Giving information about different products: Customers are not known about all the product and services given by the bank. So they want to know about them.
Chequebook issue: Checque book issued to the customer first time in time of accounts opening. Pages of the checque book may vary on the basis of types of account. When the pages are finished it contains a page of requisition. Customer have to give signature and the given signature will be verified. After few working day new checque book is issued.
Demand draft / Pay order issue: I have done pay order. Here the customer have to fill the pay order form with amount of money along with bank charge and VAT and mention the name to whom it will be payable.
Fulfill customer queries on the desk and over phone: I have given the answers of necessary queries to the customer on the desk and over the phone.
Issuance of different documents for the customers: Customer need different document in different purpose. Here I have given the Bank Statement to the customers.
Customer service is the department that firstly and directly contracts the customer. In case of account opening the policy of “Know Your Customer (KYC)” must have to be followed & required documents as per instructions must be obtained in due course. Special concentration is required to deal with transaction profile. As per contract bank is liable to protect every customer’s accounts information secret. So in case of information transmittal bankers of this dept must have to be sure that this is the right person to know the information.
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Department: Foreign Trade (Remittance)
Inward Remittance Bank Asia handles remittance in both traditional modes, Account Credit and Cash Payment over the Counter. Here I have fulfilled the remittance inward form and print the money receipt from internet and give these to my senior officer.
Outward Remittance i.
Distributions of export incentives
ii.
Submission of report to Bangladesh Bank, etc.
2.2 Organization Wide Bank ASIA, Rupnagar Branch is Non AD branch, that’s why the branch provided few types of loan. These types of loan are provided by the branch.
1. Personal Loan: 2. Unsecured Personal Loan: Unsecured Personal Loan (UPL) is a terminating facility offered by Bank’s Consumer Credit Department to individual salaried persons living in the cities / towns where the Bank has its operations. It is a clean or unsecured loan in the sense that only security in this type of loan product is: a) Letter of Introduction from employer b) Transfer of monthly salary and assignment of Terminal Benefits c) Personal Guarantee taken from specific section of people. 2.1.
Retired Unsecured Personal Loan
3. House Finance: This product will facilitate the customer to have financing for purchase of flat/house, construction of new house, extension and renovation of existing house etc.
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Customer Segment: Any Bangladeshi individual who has the means and capacity to repay bank loan. In specific terms, these could be salaried executives of multinational and middle to large size local corporate, Government officials, Officials working in reputed NGOs (Non Government Organizations), international aid agencies & UN bodies, any tax paying businessmen of repute, any employed / self-employed/ tax-paying individual having a reliable source of income. Loan Feature:
Loan amount Tk. 3,00,000.00 to Maximum Tk.75,00,000.00 Repayment tenure Maximum 15 years including maximum 1 year grace period. Payment method- Equal Monthly Installments. Loan to price ratio-70: 30 Competitive interest rate No early settlement & partial adjustment fees No hidden cost. Eligibility:
Age limit: Minimum 25 years, Maximum 65 years at loan maturity. Minimum income: Debt burden ratio based For salaried individual, minimum service length of 1 year and must be a confirmed employee. For self employed individual, a business record of minimum 3 years & Land lord having substantial rental income.
4. Auto Loan: This product will allow car financing to the customer segment. Under this scheme, the vehicle is hypothecated to the bank only. In addition to this registration requirement, on a case-to-case basis, bank may also secure the loan partially by the commonly acceptable form of cash/quasi cash securities available in the market.
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Customer Segment: Any Bangladeshi individual who has the means and capacity to repay bank loan; In specific terms, these could be salaried executives of multinational and middle to large size local corporate, Government officials, Officials working in reputed NGOs (Non Government Organizations), international aid agencies & UN bodies, any tax paying businessmen of repute, any employed / self-employed tax-paying individual having a reliable source of income. Loan Feature:
Loan amount Maximum Tk.20,00,000.00 for both Recondition & Brand New Car Repayment tenure Maximum 5 years for reconditioned car & 6 years for Brand new car.
Payment method- Equal Monthly Installments. Competitive interest rate No early settlement & partial adjustment fees No hidden cost. Eligibility:
Age limit: Minimum 25 years, Maximum 65 years at loan maturity Monthly surplus income (after meeting all expenses) shall be at least Tk. 15,000/-. For salaried individual, minimum service length of 3 years and must be a confirmed employee. For self employed individual, a business record of minimum 3 years.
5. SOD 6. SME The branch also gives corporate loan to the customers.
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COMMON NECESSARY PAPER REQUIRED FOR LOAN: 1. Loan Application. 2. TIN certificate 3. Trade License/Memorandum & Articles of Association if borrower is businessman 4. Salary Certificate/Income statement with letter of introduction if borrower is service holder.
5. 02 copy passport size Photograph of borrower, spouse, guarantor. 6. Copy of national ID/Passport/birth certificate of borrower, spouse, guarantor. 7. Spouse information 8. Bank Statement last 01 year (Other bank) 9. Bank Loan Statement if any with sanction advice. 10. Information of Guarantor i.e. salary certificate/trade license and utility bill. 11. Net worth statement of borrower, spouse & guarantor 12. Agreement with Developer & borrower 13. Registered Power of Attorney & deed of agreement between developer & land owner 14. Copy of RAJUK/Municipal approved plan with letter 15. Money receipt copy. 16. Brochure of the project. 17. Trade License/Memorandum & Articles of Association of Developer 18. Chain documents of land property of project site: a) Original Deed b) Bia deed c) Certified C.S., R.S., S.A. parcha, Certified Mutation Parcha as per R.S record, Recent mat parcha, Up to date rent receipt, D.C.R.
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d) N.E.C. (Non En-encumbrance Certificate) Lending Procedure Followed by Bank Asia, Rupnagar Branch
Customer
Credit in charge of the Branch Proposal
Proposal sent to Corporate Office Sanction to Branch Call to Customer for Documentation Send documents to CAD Loan limit to the Client Create loan account & credit the loan to client account
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Here the bank maintains the principles imposed by the Bangladesh Bank. Risk is associated with each type of loan. That’s why the credit department of the bank follows risk grading for corporate and SME. The proposed CRG scale is applicable for both new and existing borrowers. It consists of 8 categories, of which categories 1 to 5 represent various grades of acceptable credit risk and 6 to 8 represent unacceptable credit risk.
GRADING
SHORT NAME SUP GD ACCPT MG/WL SM SS DF BL
Superior Good Acceptable Marginal/Watchlist Special Mention Sub standard Doubtful Bad & Loss
NUMBER 1 2 3 4 5 6 7 8
For consumer lending, bank adopt credit-scoring models for processing facility applications and monitoring credit quality.
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2.3 Other Relevant Activities In Bank ASIA, Rupnagar branch, I have attended some extra relevant activities. These activities help me to explore myself. These activities are discussed in the perspective:
1. To attend in meeting:
Every Monday the Bank conducts a meeting with their
branch employees. Here they discuss about their performance, individual experience and share the knowledge. Here the employees can give any suggestion to Bank’s interest. When any new rules, regulation or product is launched, the employees are habitual or informed by the meeting. If anyone know about the product or service provide by other bank, the can explain ant give interest to launch them to increase bank sustainability and profitability.
2. To give exam (Quiz):
Here not only me, all the employees of the bank have to
attend the exam conduct by the branch manager. Here before exam all the employees are given a document. The document is banking information based. They take their time to cope with it. The document may vary time to time. Then in given time duration all the employees give their exam. The marking is given on 10. It is nothing but to express to what extent the employees are habitual with the given banking information. In another word it is the way to judge the understanding level of the employees. The number achieved by the employees are added with their own KPI ranking.
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Chapter 3 Constraints/Challenges & Proposed Course of Action for Improvement
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3.1 Identified/observed in the organization
1) Lack of communication with the customer: Sometimes the customers got informed lately in any purpose. So after a time period the concern employee of the bank may feel rush to contact with the customers over the phone. There are many purposes for what the bank need to contact with the customers. Such as for loan purpose, giving ATM cards, issuing check books and so on.
2) Complain for ATM booths: It is the most common problem complained by the customers. The ATM machines are not working properly most of the times. Sometimes the ATM card is captured by the machines. Sometimes it happens when the card holder press wrong PIN code 3 times or any default of the card. On the other hand there is an error of system that the customers withdraw the money but the system show that the double amount of money debited to the customer’s bank account. The ATM machines should be replaced.
3) Lack of combination between two departments: There exist lack of working combination between credit department & customer service department. When the customer is needed to open a loan account the customer service department wants to know the details from the customer as well as the credit department. Because in this case credit department deal with the customer before. So to increase the working efficiency all the departments have to work together.
4) Messengers are not working properly: The messengers of the branch play a role of helping hand to the employees. But most of the times some of them doesn’t follow the guideline or advice of junior level employees or especially of an Intern.
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5) Fewer numbers of employees: It is a small branch. So the number of employees is also fewer. It is not a major problem. But in rush time the employees face problem to give service to the customers. In this time customers are waiting for a long time. The bank failed to get the customer satisfaction. When the bank remain close or the customers are not come for political violence, the following day is considered as rush day rush hour. The customer pressure is excess in those days particularly.
6) Lack of motivation: When an employee or an intern performed more than the task assigned by the senior no appraisal or motivation is given to the employee or intern. If the employees or interns are get motivated the performed much better than before in further.
7) Some are not friendly: Some employees are not friendly with the intern to share the knowledge and experience. An intern should be treated as an employee, not as a intern. Here an intern get discourage on work.
8) Corporate culture: Banking hour of each and every bank including Bank ASIA is 10 AM to 6 PM. It is so boring to work and give service to the customers. On the other hand every day all the employees including an intern can stay after 6 PM for the closing of daily transaction. Bank should be more efficient in this sector. Because though the banking hour is 10AM to 6 PM the transaction hour is10AM to 4 PM. So I think 2 hour is enough for daily closing. Moreover all the employees have to attend in the office at 9.30 AM.
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3.2 Academic Preparation: My major is accounting and Finance, that’s why I got benefit from my internship. This subject has a great impact on banking industry. Any student from this major subject can implement his/her knowledge in the bank. I got clear knowledge about banking system of Bank ASIA Limited. Furthermore there were some confines. It’s not possible to learn everything within three months. As an intern I know only few section like foreign exchange (remittance), credit risk management, general banking and customer service etc. in addition there is less relation with our study what we learned in our major Accounting& Finance.
Foremost consequence:
Bank fund Management: How to use or how to manage bank fund, I learned from this course and I have got its application in Bank ASIA Limited. In Bank ASIA Limited account section every day maintains a balance sheet that I learned from Bank Fund Management.
Financial Institution and Market: Credit rating of Bank ASIA Limited is Long Term AA3 and short term is ST2 which is rating by the CRAB. From this course I learned about credit rating organization, credit rating system, cancel rating etc.
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3.3 Knowledge & skills that need to be learned in the University which are relevant to the company: University should arrange workshops about Microsoft Excel. Conduct training program on professional software. More emphasis on solving practical case study. University should arrange more industrial tour to get more professional knowledge. Have to give knowledge about how to write format business letter. University need to arrange seminar with the professionals of leading company in the country.
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Chapter 4 Lessons Learned from the Internship Program
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4.1 Implications to Organization Implications to organization refer to the knowledge of the organization. An intern may pay a roll as a helping hand. If an intern can perform with proper integrity the organization prefer them to recruit in the organization. On the basis of three months internship program the following skills that I have learned are discussed in the perspective:
How to deal with customers. Leaned about corporate culture. Learned about cash management. Procedure of accounts opening. Corporate gesture to be maintained. Required documents for different activities. How give feedback to the senior. Loyalty of the job. How to manage customers in the worse situation. Contact with customer over the phone. Loan appraisal procedure. Learned about credit risk management. Procedure of credit risk grading. Learned about SME.
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4.2 Implication to University’s Internship Program
The Bank Internship offers highly motivated and successful individuals an opportunity to improve their skills while working in a diverse environment. As a Bank intern, we will receive professional coaching and hands-on training that will deepen our experience and expose you firsthand to the challenges – and rewards – of international development and poverty reduction.
Here an intern is the representative of his/her University. So the University should make their each and every student eligible to cope with the corporate world. Here the University should took following steps to make their students eligible.
In our overall BBA program there was no implementation on Microsoft Excel. Not only bank but also each and every type of business randomly use Microsoft Excel & Microsoft Word. So each University should give emphasis on learning of overall Microsoft Office program to work better in further.
Each and every company use their own software to run their business and keep the record of their daily transaction. So Universities should arrange workshop on how to work or input in such type of software.
Here all the students solve the case studies give in the text books. But these texts are written by the foreign writers. The perspective of case given in text and cases faced practically by the students are not same. So the students should given practical cases based on our country’s perspective.
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Universities should arrange more industrial tour, that’s why the students are known how the employees work in their Concern Company or area. This also increases the willingness of interested students who wants to work in that particular sector.
For the first time during in internship program the students know about the Formal business letter. Lack of their knowledge regarding this they face problem. Format of affiliation is also included in this topic. So Universities should give priority to learn about the formal business letter and the format of affiliation. It should include in any subject. Otherwise the students are trying to avoid the topics.
Many professionals are highly interested to share their knowledge and experiences with the interested students. In this case Universities should step forward to arrange seminar or workshop where successful professionals from prominent or leading corporation in the country.
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Chapter 5 Concluding Statement
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5.1 Summary Bangladesh is one of the developing countries in the world. The economy of the country has a lot left to be desired and there are lots of scopes for massive improvement. In an economy like this, banking sector can play a vital role to improve the overall social – economic condition of the country. The banks by playing the role of an intermediary can mobilize the excess fund of surplus sectors to provide necessary finance, to those sectors, which are needed to promote for the sound development of the country. Retail banking sector has achieved great popularity over the last decade. The industry has also experienced a massive competition in recent years. Not only have a huge number of new players entered the market, but with the emergence of new markets, the traditional retail loan providers have had to vastly improve the terms on which they do business with customers. This means that customers have more choices and better offers than ever before and this is also fuelling the demand for more retail loan. Through retail loan Bank Asia not only enhances the living standard of people but also makes general people familiar with banking system. There are a lot of customers who have no capacity to expend a total amount of money at a time for meeting their crisis need or for purchasing any necessary items for their home. But these customers do have capability to give monthly installment at regular basis. Bank Asia has been satisfying these customer segments through extending retail since inception of the bank. Since the coming day market is going to be more competitive & logically aggressive so Bank Asia should focus more on research & development activities regarding retail loan products and operation. Moreover Bank Asia, specially Rupnagar branch where I have joined and worked should launch new product and services to keep their position more stronger.
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5.2 Recommendation 1. Knowledge to be practical: Our educational Knowledge should be more practical. In many times the text books contains the example which are not common in our country. The examples should be based on our country basis. If we culture this tradition, then we do better in our internship program. 2. To familiar with report: For the first time we face the affiliation format. But the university should give preference on the format. We disturb our concerned coordinator because we are not familiar with it. 3. To extent the duration: Three months internship program is not quite enough to learn all the activities of concerned organization. Here the University should come forward to extent the time duration of the internship report. On the other hand many small and medium organizations don’t allow any internship facility. They should provide this facility to increase their brand value. It enhance one kind of indirect marketing. 4. To provide training by the organization: When an intern joins to the organization, he/she is not familiar with the activities. So each and every corporation should arrange training program to make the intern habitual with the activities. So that the working efficiency of the intern increase. Some organizations provide such training programs to their new employees and the interns. Islami Bank Bangladesh Limited and Credit Rating Agency of Bangladesh (CRAB) are the examples of such type of oorganizations.
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Chapter 6 Suggestion for Improvement or Course of Action .
39
Today the business world is very much competitive. Each and every company of any particular industry competes with one another to increase their market share, wealth and value. So every company should aware about their competitor and their relative products and services. Here I discuss about some course of action that I observed during the affiliation. These are discussed in the perspective.
To keep contact regularly with the customers: Laziness should be avoided in all the activities. All the activities have to be done in fixed time. So that no work will be pending for future.
To improve the ATM facilities: Number of ATM booths should be increase. Beside this the quality of ATM service to the customer also has to be the best. ATM machines should be replaced and the automation system should maintain properly.
To maintain good communication & relation of each and every department: Success of every organization depends on the combination and inters relation with one department to another department. So to ensure good relation with the departments the concern authority have to pay attention to achieve long term strategic goal.
To make messengers aware and loyal: They should be properly guided. The facilities for them may have to be increase.
To increase number of employees: Though the branch is not big enough, more employees should be recruiting. It helps to achieve customer satisfaction by giving service quickly. It also solve the problem of nation called unemployment.
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To increase the coordination of the employees: Each employee has to be dedicated to their work. They should be cooperative with their staffs.
To increase motivation and remuneration: When an employee performs in better way, he/she deserve motivation from the senior. So senior staffs or manager have to give motivation all the employees. So that they work properly and efficiently.
To modify Corporate culture: The time duration of work should be changed or to make flexible. So that the employees don’t feel bore.
To increase the efficiency of the employees: Company should arrange more training program to make their employees efficient.
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Appendices: Corporate Milestones: 01.
Letter of intent received
24/02/1999
02.
First meeting of promoters
15/04/1999
03.
Certificate of Incorporation
28/09/1999
04.
Certificate of Commencement of Business
28/09/1999
05.
Banking License
06/10/1999
06.
Inauguration of Bank
27/11/1999
07.
Date of IPO subscription
08.
IPO oversubscribed by
09.
Date of First Share Trading in Bourse
10.
Number of Shareholders and Shares (at the end of
23-24/09/2003 56 times
2009)
08/01/2004 10,868 (shareholders) 21,448,125 shares
11.
Date of First Subscription with CDBL
20/12/2005
12.
Date of First Script-less Trading
30/01/2006
13.
Commenced Operation of Off-Shore Banking
28/01/2008
14.
Commenced Operation of Islami Banking
24/12/2008
15.
Commenced Operation of Capital Market Division
05/08/2009
16.
Number of Promoters
22
42
17.
Number of Directors
14
18.
Number of Branches
73
19.
Number of SME Service Centres
10
20.
Number of Agricultural/SME Branch
4
21.
Number of Brokerage Branches
5
22.
Number of Islamic Banking Wing
5
23.
Number of ATM booths
Own - 48, Shared-240 (Qcash), Cash Link (125+)
24.
Credit Rating Status
AA2 - Long Term ST-1 Short Term
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Key Information:
Capital Structure: figure in million
Particulars
BDT
USD
Paid-up capital
6,936.32
86.70
Statutory reserve
3,930.26
49.13
Revaluation reserve
2,668.32
33.35
General reserves
8.17
0.10
Retained earnings
466.14
5.83
Total shareholders' equity
14,009.21
175.12
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Shareholding Structure:
Financial Highlights: figure in million
Particulars
Till 30-Sep-13
Total Assets
158,269
Deposits
122,356
Loans & Advances
99,474
Import
84,569
Export
54,464
Remittance (Inward)
24,046
Operating Profit
3,767
ROE
8.97%
ROA
0.82%
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EPS (BDT)
1
Yield on Advance
14.84%
Cost of Deposit
8.85%
Cost of fund
11.50%
Cost of Operation
2.65%
Spread
5.99%
Net Interest Margin
2.93%
Burden Ratio
0.57%
Capital Adequacy Ratio BASEL-II
11.92%
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CURRICULUM VITAE OF SIDRA ISLAM SHEMME CONTACT: C/O. - Md.
Shirajul Islam.
Block: C, Road: 11
House: 36 Cell Phone: 01675843036 E-mail:
[email protected] ___________________________________________________________________________
CAREER PLAN I want to play a role in a dynamic organization having professional working environment employing my theoretical and practical knowledge acquired throughout my life which may lead to my ultimate goal.
Educational Background BBA: Session
:
2009-2010
Major Subject
:
Accounting and Finance
University
:
American International University Bangladesh
Result
:
(2.95/4)(Intern.)
47
Higher Secondary School Certificate (H.S.C): Year
:
2009
Major Subject
:
Business Studies
Institution
:
Dhaka Imperial College.
Board
:
Dhaka
Result
:
GPA 4.30.
Secondary School Certificate (S.S.C) Year
:
2007
Major Subject
:
Business Studies
Institution
:
M.D.C Model High School
Board
:
Dhaka
Result
:
GPA 3.88
Personal Query: Name
:
Sidra Islam Shemme
Father’s Name
:
Md. Shirajul Islam
Mother’s Name
:
Shahana Pervin
Date of Birth
:
02/12/1992
Religion
:
Islam
Nationality
:
Bangladeshi (By Birth)
Mobile No
:
01675843036
Blood Group
:
O (+)
Sex
:
Female
Marital Status
:
Single
Permanent Address :
H-36, R-11, Block-C, Section-12, pallabi, Mirpur, Dhaka1216.
48
COMPUTER LITERACY: Software Applications: MS Word, MS Excel, Power Point, Operating Systems: Windows 98, Windows 2000, Windows 2010, XP Internet: Internet Browsing & E-mailing.
Language Proficiency:
Bangle & English (Reading, Writing and speaking fluency)
Special Qualification: Smart, good communication skills, energetic, talent, dynamic strong leadership skills, Excellent judgment and hard working.
Reference:
Mohammod Jakir Alam
S. K. Shahanur Rahman
Customer Service Manager
Administrative officer
Retail Banking Division
Ministry of Finance
BRAC Bank Ltd.
Finance Division
1, Gulshan Avenue
Mobile No: 01912072054
Gulshan, Dhaka
Bangladesh Secretariat
Mobile No: 01713385090
Mobile No: 01916984131
DATE..........................
SIDRA ISLAM SHEMME
49
References: Interview: 1. S. M. Salahuddin. AVP and Branch manager of Bank Asia, Rupnagar Branch 2. Ali Adnan. Eo and Operation Manager of Bank Asia, Rupnagar Branch Reports: 1.
Annual report of Bank Asia Limited.
2. Sustainability report of Bank Asia Limited.
Web Sites: http://www.bankasia-bd.com/
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