Performance Evaluation of a Private Bank

pic pic pic pic pic An Assignment On Performance Evaluation of a Private lodge IFIC commit as a semi clandestine patois in the private sector of Bangladesh. Prep bed For Narzia Florin Lecturer, Dept. of Business Administration Prepared By Saleh Ahmed BBA 02406160 24th GI Dept. of Business Administration Stamford University Bangladesh. leniency Date 15th May 2006 Letter of Transmittal Dated May 15, 2006 Narzia Florin Lecturer, Dept. of Business Administration Subject Submission of hatch on accomplishment evaluation of a private commercial bank. Dear Madam,It has been a great pleasure to submit the report on performance evaluation of a private commercial bank. You are aware that I conglomerateed information on a private commercial bank. I choose IFIC Bank for the report purpose. I am fortunate enough that I got all those information necessary for the assignment purpose. I believe that this assignment has given me a great see to it to me and it has enriched both my knowledge a nd experience. I tried my best to prove my skills speckle preparing this report. I cordially seek your kind advice or suggestion regarding my mistake which entrust help me in my practical and theoretical works in the days to come.Sincerely yours, Saleh Ahmed BBA 02406160 24th GI Table of Contents ? Executive Summary. ? Profile of IFIC Bank. ? BANKS tutel progress Quest for Excellence. ? The bank in a sketch. ? self-control Structure. ? Financial Position. ? Product & Services. ? Human Resources Development. ? Rates of Deposit Schemes. ? Conclusion. Executive Summary In this report on the Performance Evaluation of a private bank as IFIC bank, I collect the necessary information from its web site, catalog, bossier and personally by information collection.I represent that these private companies are rattling competitive and pauperism to capture the vast market of Bangladesh at any cost. So they contribute various types of result and armed helpings. I also found that the c ompanies counterattack their competitors by their offers. Some gives high or low interest rate, immature facilities etc Every company has their own dodging to capture the market. In my report I tried to include most of IFIC banks harvest-tide, services and facilities. Though I get hold of some limitations I tried my best to show the Performance Evaluation of IFIC bank as a private bank. BANKS MISSION Quest for ExcellenceOur Mission is to provide service to our clients with the help of a skilled and dedicated workforce whose fictive talents, innovative actions and competitive edge make our position unique in giving role service to all institutions and individuals that we care for. We are committed to the welfare and economic prosperity of the people and the community, for we drive from them our inspiration and drive for onward progress to prosperity. We want to be the leader among banks in Bangladesh and make our indelible mark as an active partner in regional banking operatin g beyond the national boundary.In an intensely competitive and complex financial and business environment, we particularly focus on emergence and profitability of all concerned. THE BANK IN A intimate International pay Investment and Commerce (IFIC) Bank Limited started banking operations on June 24, 1983. Prior to that it was set up in 1976 as a control stick venture pay company at the instance of the brass of the Peoples Republic of Bangladesh. Government then held 49 part shares while the sponsors and general public held the rest.The objectives of the finance company were to establish joint venture Banks Finance Companies and affiliates abroad and to carry out normal functions of a finance company at home. When the Government refractory to feed up banking in the private sector in 1983, the above finance company was converted into a full-fledged commercial Bank. Along with this, the Government also allowed four other commercial Banks in the private sector. Subsequently, t he Government denationalized two Banks, which were then fully Government-owned.While in all these Banks Government held token(a) 5 percent shares, an exception was made in the case of this Bank. It retained 40 percent shares of the Bank. The decision by the Government to retain 40 percent shares in IFIC Bank was in pursuance of the original objectives, namely, promotion of joint participation of Government and private sponsors to establish joint venture Banks, financial companies, branches and affiliates abroad. Ownership Structure BOARD OF DIRECTORS Board of Directors of the Bank is a unique combination of both private and Government sector experience.Currently it consists of Ten Directors. Of them five introduce the sponsors and general public and four senior officials in the rank and status of joint secretary/Additional Secretary represent the Government. Managing Director is the ex-officio Director of the Board. elective Directors Representing A Class Shareholders 01 Mr.Ma nzurul Islam prexy 02 Mr. Saiful Islam Director 03 Mr. Abul Matin Khan Director 04 Mr. Abdul Hamid Chowdhury Director 05 Mr. A. R.Malik Director Nominated Directors Representing B Class Shareholders (Government of Bangladesh) 06 Mr.Mohammad Janibul Huq Director 07 Mr. ATM Ataur Rahman Director 08 Dr. Chowdhury Saleh Ahmed Director 09 Mr. Md. Mokhles ur Rahman Director 10 Mr.Mashiur Rahman Managing Director Financial Position CAPITAL & RESERVES The bank started with an authorized capital of Tk. 100. 00 trillion in 1983. Paid-up capital was then Tk. 71. 50 jillion only. Over the last Twenty wholeness years, the authorized & paid-up capital has increased substantially. Authorized capital was Tk. 500. 00 million and the paid-up capital stood at Tk. 406. 39 million as on December 31, 2004. The Bank has built up a strong reserve base over the years. In last twenty one years its reserves and surplus have increased significantly.This consistent policy of buildin g up reserves has enabled the bank to maintain a let out capital adequacy ratio as compared to others. With the active support and guidance from the Government, the bank has been showing a steady and improved performance. In its twenty One years of operations, the bank has earned the status of a leading bank in terms of both business and good leave behind. Starting with a modest get of only Tk. 863. 40 million in 1983 the bank has closed its business with Tk. 20, 774. 49 million of deposit as on December 31, 2004.The annual growth rate has mostly been higher compared to both banking sector growth and individual growth rates achieved by others. As against a profit of Tk. 21. 94 million in 1984, the bank earned a record profit of Tk. 700. 25 million for the year ended on December 31, 2004. PRODUCT & SERVICES soon 5 (five) products/services have already been launched in the market A. Pension deliver Scheme (PSS) B. Monthly Income Scheme (MIS) C. Tele Banking / Tele striking D. Dea th Risk make Scheme (DRBS) E. Consumer Credit Scheme (CCS) A. Pension Saving Scheme (PSS) 1. shout out of the Scheme Pension Saving Scheme . Delivery Points 62 Branches 3. Highlight of the product Duration of the sum up 5 (five) years & 10 (ten) Years Monthly Installments Tk. 500 or Tk. 1000 or Tk. 2000 Payment after Maturity compensation AFTER MATURITY 5 YEARS 10 YEARS INSTALLMENT WITHOUT BONUS BONUS WITH BONUS WITHOUT BONUS BONUS WITH BONUS Tk. 00 36265/- 1500/- 37765/- 93050/- 3000/- 96050/- Tk. 1000 72530/- 3000/- 75530/- 186100/- 6000/- 192100/- Tk. 2000 145060/- 6000/- 151060/- 372200/- 12000/- 384200/- Eligibility for PSS explanation A person of 18 years of age and above having a sound mind provide be eligible to open an news report in his/her own name. Bonus PaymentIf the account holder, from commencement to maturity of term, pays all the monthly instalments in time (i. e. within 10th day of each month) and never defaults in paying(a) monthly installments, the account holder leave contact tautologic bonus payment equivalent to 3 (three) times of monthly installment for 5 years term and 6 (Six) times of monthly installment for 10 years term. Income Tax Rebate Under this Scheme, income appraise rebate go forth be available on the total amount payable i. e. after maturity of deposited amount such amount go forth also be income tax free.Monthly installments to PSS will also qualify for showing as investments (like provident fund) in yearly Income Tax Return. Payment of Pension One can receive the entire deposited amount with interest at a time or receive a pension on monthly basis at a desirable amount of monthly installments. B . Monthly Income Scheme (MIS) 1. Name of the Scheme Monthly Income Scheme. 2. Delivery Points 62 Branches. 3. Highlight of the product 4. Duration of the account 5 Years (Deposited principal amount will be returned on maturity). 6. Amount to be Deposited Tk. 50000/- and its multiple. 7.Payment after Maturi tyTk. 450/- and its multiple. Procedures for paying monthly income The payment of monthly income will start from the subsequent month after a clear minimal gap of 1 (one) month from the employment of deposit. If an account is opened on 7th of any month, monthly income will be paid on 7th of the subsequent month. The account holder will receive monthly income in any SB/CD account of same name well-kept with the branch. In case, the account holder does not have any SB/CD account with the Branch, he/she/they will have to open a SB/CD account for receiving the monthly income.The minimum relaxation requirement will be waived for these types of accounts for a new customer. However, a minimum initial deposit of Tk. 500/- will have to be deposited. This procedure will eliminate the hassle of coming to the Bank Branch for taking interest every month. Eligibility for Monthly Income Scheme A person of 18 years of age and above having a sound mind will be eligible to open an account in his/h er own name. A person can open to a greater extent than one account in his/her/their name in the same Branch or any Branch of the Bank. C. Tele Link/Tele Banking 1. Name of the Scheme Tele Link or Tele Banking. . Delivery Points Gulshan, Federation, Dhanmondi, Motijheel Branches. 3. Basic Features of the Product Phone Banking is a fast convenient and easy to use service that will complement ones lifestyle and financial backing one in complete control of his banking. One can addition all the Telelink services at any time, day or night, from anywhere. It is far more convenient than traditional banking. Telelink is really simple to use. One can just dial our phone number from anywhere and an automated computerized voice response will guide him step by steps finished his transactions. ConfidentialityA customer is given a 6 digit Registration Number when he applies for Telelink that will ensure total confidentiality of his account information. When the customer chooses to obtain spe cific information about his account, he will have to use his Registration Number and the confidential Personal Identification Number (PIN) by pressing the number keys on his phone. Banking Services Supported by Telelink A. Transactions Relating to Transfer of funds from one account to another B. Inquiries relating to account balances transaction details exchange rates interest rate information products and services remittancesC. Requests for balance certificates account statement 7-days withdrawal poster on accounts cheque books/pay order/drafts renewing or opening of fixed deposits assistance for opening other accounts In addition, the service can also deal with lost cheque books and credit cards, change of address and stopping of payment. Fees We are not charging any fees for this technical service but the facility has been offered to Saving Bank customers with a minimum balance of Tk. 50,000/-, to Current Deposit Account customers and STD customers with a minimum bala nce of Tk. 100, 000/-. D. Death Risk Benefit Scheme (DRBS) . Name of the Scheme Death Risk Benefit Scheme. 2. Delivery Points 62 Branches. 3. Basic Features of Scheme IFIC Banks Death Risk Benefit Scheme offers its nest egg Bank Account holders interest on savings, a lump sum amount and some peace of mind three in one benefits at no extra cost Benefits of Scheme Death Risk benefits in lump sum amount to nominee(s)/heir(s) on the death of an account holder. Eligibility Criteria Account must be maintained for a period of minimum yearly before the death of the account holder. At the time of death, the customer must have been within the age mathematical group of 18 to 50 years.The account must have been opened with a minimum deposit of Tk. 5000 in case of new accounts. (Since 1-8-97). Average balance of Tk. 10,000/- minimum must be maintained within one-year period prior to the death of the Account Holder. Extent of Benefit 50% of the average balances of the account for one-year peri od prior to the death of the account holder or Tk. 100,000 whichever is lower. Account balance exceeding Tk. 10, 00,000/- will not be taken into consideration while calculating average balance for one year for the purpose of Death Risk Benefit. E. Consumer Credit Scheme (CCS) 1.Name of the Scheme Consumer Credit Scheme. 2. Delivery Points 62 Branches. 3. Highlight of the product Main Features Particulars Selection Criteria / Who Can A Self employed person of fixed income $ a confirmed or permanent service holder. apply Products Eligible for Finance Vehicles, Domestic Appliance, Office Equipment, Entertainment, Medical Expenses, Intangibles, etc. Limit Range Tk. 15,000 to Tk. 7,00,000 Repayment By 12, 24, 36 or 48 equated monthly installments (EMI) depending on the loan amount. Interest Rate / Fees Interest 16. 00% P. A. ithoutany tangible security and 14. 50% P. A. where the loan is 100% secured with 20% margin against lien of FDR, MIS, PSS, Savings Certificates is sued from any Bank & Financial Institution. Service Charge For 1 and 2 Years term 2% of the Loan amount (minimum Tk. 00/-) For 3 Years term 3% of the Loan amount For 4 Years term 4% of the Loan amount. Down Payment / Equity Minimum 20% of the invoice value of the Consumer Products. role For Vehicles 30% to 40% in Cash / Financial instruments.. Q-cash Q-cash is a new service provided by the IFIC Bank. In this quick cash service system in that respect consumer can withdraw money easily in any time in exchange of a little yearly fee.This kind of services is very helpful for their current consumers and for their new consumers of their services. This kind of services is raising the living standard of people. For implementing this kind of new service we are grateful to IFIC Bank. HUMAN RESOURCES maturement Human Resources Development (HRD) activities aim at fulfilling the banks Mission. One of our four major missions is to Provide service to our clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in iving quality service to all institutions and individuals that we care for. Skilled and dedicated workforce with creative talents, innovative actions are not always readily available. Appreciating the scarcity of such manpower, the bank from the very beginning laid importance to HRD that conceptually includes activities like pre-recruitment drill, recruitment, induction, nurture in the Academy, job rotation, placement & posting, reward and promotion. All these activities are planned by the bank in an integrated way aiming at manpower with require amount of technical, managerial, human and conceptual skills.Management of IFIC Bank not only appreciates the need of skills required for day to day banking but also realizes the need for skills to get a line the global & national financial and economic environments that are changing fast. Meeting the needs of n ew skills arising out of Financial Sector Reforms Programme (FSRP) is also a major concern of the management. The bank, therefore, set up a Division namely HRD Division below a separate Group called Services Group-I. The Academy of the bank works under this group.The other Division, which works under the Services Group-I, is Planning, Research & Statistics Division. Current News IFIC BANK JOINED SHARED ATM NETWORK IFIC Bank Ltd. and ITC Ltd. have signed a share ATM network participation accord. . The Signing ceremony was held in presence of Mr. Ataul Haq, Managing Director of IFIC Bank Limited and Mr. Kutubuddin Ahmed, Chairman of ITCL and President of BGMEA. Executives and senior officials of IFIC Bank were also present on the occasion. In the process, the bank has joined a group local bank for introduction of shared ATM network.Automated teller Machine (ATM) with electronic device located at the bank branches or other convenient public locations extends 24 hours access to cash a nd other banking facilities to the customers without requiring to enter the branch or to wait in queues for cash withdrawal. This will establish the banks commitment for valued customers to bring a new era in banking services. Under this new facility, IFIC Bank will install few ATMs at its branch premises in Dhaka city. Similarly, few more units of off site ATMs will also be installed in some prominent public places in the city by the syndicate partners.GROUP OPERATION-I Operations-I, a group segment of Head Office operation of the Bank mainly handles General Advance/ Credit Portfolio, Project finance excluding Overseas Operations of the Bank and Lease Financing. The Group is headed by Senior Executives having commendable professional knowledge and experience supported by a talent pool of MBAs, Engineers, Economists, and Statisticians etc. with the unify of credit experience. GROUP STRUCTURE A. Name of Group Executive/ In-Charge Mr. Md. Ziaul Bari, Executive Vice President B.Functi onal Structure The Group Comprises of 3 Divisions as under i) General Credit Division ii) Project Finance Division iii) Lease Financing Division C. Area of Operation i) General Credit Division a) imprimatur Department This department mainly handles Credit Portfolio of the Bank related to Working Capital and Trade Finance. Proposals of such nature are processed/appraised and disposed of by this department. The department is manned by a group of professionals from respective discipline with commendable banking experience as well as exposure in innovative concept and technology. ) Credit Administration Department The function of this department is to monitor credit portfolio of the Bank through and through physical inspection of various periodical returns, examine/Inspection Report etc. with a view to maintaining a healthy asset base of the Bank. c) Credit Information & Returns Department This department deals in forwardness of different periodical returns related to credit portfol io of the Bank for management information as well as for submission of information/data to Regulatory consistency and various controlling agencies.The department also centrally handles all jobs relating to Loan Classification of the Bank. d) Ancillary Functions The Group also handles various Loan Schemes for the employees of the Bank. ii) Project Finance Division Project Finance Division is a shared resource center of the Bank which provides back office support to the branches the marketing outlets of the Bank in their endeavor to meet the credit needs of the corporate clients.The Division helps the corporate clients in their decision making for undertaking venture project or BMRE of the alive projects. It also assist them to structure their long term and short term finance and to raise fund from own source of the Bank or through syndication with other Banks. In case of difficult business situation and unexpected low turnover vis-a-vis poor performance of the clients, the Divisi on offers customized solution through business and financial restructuring.The Division also provides counseling to the corporate clients for minimizing their business risks and optimizing growth in the context of rapid globalization. The Division so far financed 250 projects (New and BMRE) since 1996, major concentration being in textile sector both export oriented and backward linkage units. Other mentionable sectors are Steel and Engineering, Cement, Real Estate, Consumer Products, belief and Packaging, Hotels, Hospitals, Cold Storage etc. iii) Lease Finance DivisionTo assist bona-fide entrepreneurs acquire capital machinery and equipment increasing / up-grading productive capacity without trying up comeliness and to contribute to the industrial development of Bangladesh IFIC Bank Limited has introduced Lease Finance. For more please contact the Branches. RATES OF DEPOSIT SCHEMES Deposit Schemes Deposit Rates Savings (SB) 5. 0% Special Term Deposit (STD) 4. 00% Fixed De posit Rate of Interest Three Months 6. 75% 7. 50% Six Months 7. 00% 7. 5% One Year & above 7. 25% 8. 00% * Figure in LAC Taka Conclusion To prepare this report on Performance Evaluation of a private bank I collect information of many banks and finally select The IFIC bank to prepare this Performance Evaluation Report. For collecting information regarding different bank, I found that these private companies are very competitive and want to capture the vast market of Bangladesh at any cost.So they provide various types of product and services. I also found that the companies counterattack their competitors by their offers. Some gives high or low interest rate, new facilities etc Every company has their own strategy to capture the market. In my report I tried to include most of IFIC banks product, services and facilities. I tried to focus all their branches. In my opinion the bank provide many attractive facility to their customer but it should provide more service and produ ct to its customer and must easy on its customer on there services.