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Report

On
Probashi Banking Operation of BRAC
Bank Ltd.

ASA University Bangladesh


Report
On
Probashi Banking Operation of BRAC
Bank Ltd.

Course Code: FIN 221


Course Title: Money & Banking

Submitted to:
MD. Tanvir Pavel
Senior Lecturer
Faculty of business
ASA University Bangladesh

Submitted by:
Name Id No:
Md. Abdul Khalek (L) 091-12-0125
Rajesh Banik 091-12-0128
Suvra Saha 091-12-0106
Minarul Karim Mishu 091-12-0118
Rupasree Mukherjee 102-12-0058
Sharmin Aktar Trisha 091-12-0124
Date of Submission
19.08.2010

Latter of transmittal

19 July, 2010
To
Md. Tanvir Pavel
Course Instructor,
Money & Banking
ASA University Bangladesh
Department Of Business Administration

Subject: Submission of report on Probashi Banking Operation of


BRAC Bank Ltd.

Honorable Sir,
We are pleased to submit the report on “Probashi Banking
Operation of BRAC Bank Ltd.” that you have assigned us to
prepare as a partial requirement of “Probashi Banking Operation”.
Throughout the report, we have made best effort of our capacity to
accommodate as much information and their related issues as
possible and tried to follow the instructions that you have
suggested. We sincerely believe that it will satisfy your
requirements.

We are sincerely, hoped that you will be delighted to read this


report. If further information is required, we will be glad to provide
them any time of your convenience.

Sincerely Yours,
Md. Abdul Khalek
On behalf of our group members

(i)
Acknowledgement

I express my heartiest gratitude to Md. Tanvir Pavel, Course Instructor, Money &
Banking, and Department Of Business Administration for giving me an opportunity to
prepare a report on the project assigned tome. This report is the out come of our
Money & Banking subject. To prepare this report titled “Probashi Banking Operation
of BRAC Bank Ltd.”, we have taken help from different sources, such as Executive
officer of BRAC Bank, annual book, Internet etc. We knew lot of things about
Probashi Banking Operation and its management. We extend our sincere thanks and
deep gratitude to all of them. We are very much grateful to the executive officer
(Finance Department) of BRAC Bank (Ring Road Branch) Mr. Fazla-Rabbi who has
given the opportunity to gather information about their organization.

Especially we would like to thanks to our honorable course teacher Md. Tanvir Pavel,
senior Lecturer, Department Of Business Administration, ASA University
Bangladesh. Without his help it was quit difficult for me to complete this report
successfully in time.
Executive Summery
Eastern Bank Limited (EBL). is one of the talented private banks in Bangladesh.
The principal activities of Eastern Bank Limited are Trade Financing, Corporate
Banking, Private Banking & Retail Banking. The objective of our report is to
learn Probashi Banking Operation of Eastern Bank to identify the opportunities,
Problems & to make some recommendations against these problems in
Probashi Banking Operation.

Eastern Bank Limited, a scheduled commercial bank established under the


Banking Company Act, 1991 and incorporated as a public company limited by
shares on May 20, 1999 under the Companies Act 1994 in Bangladesh. The
banks has started its operation on 4th of July 2001 with a vision to be the
market leader through providing all kinds of banking services suitable to the
dynamic demands of both business and individual in the competitive market.
Chapter Topics Page
No. No.

Table of Contents
Introduction

1.1 Origin the study


In fifth semester we are steadying the course have “Money & Banking” our
course teacher is Md. Tanvir Pavel. We are really enjoying his class very
much, because he has vast knowledge in his field of sturdy. One of the
requirements of this course is to submit a group report at the middle of
semester.

1.2 Objective the study


• To know about the Probashi banking system of Bangladesh.
• To know management policy of BRCK BANK LTD.
• To know the customer service process of BRCK BANK LTD.

1.3 Methodology the study


Although there were so many limitations, we tried to use both the primary and
secondary source of collecting information to make the report reasonable with
as less abstraction as possible.

Secondary Data
To furnish the report properly information we were mainly taken from annual
report 2010 & Internet.

Primary Data
To preparing that report, we conducted with the Executive Officer of BRAC
Bank Ltd. at ring road branch.

1.4 Limitation the report

 Difficulty in gaining accesses to financial sector

 Non-availability of the most recent statistical data

 As a student it was not possible for us to collect all necessary secret


information.
 We have to complete this report within a very short time that was not
sufficient for a good investigation.

 Because of information shortage we make some assumption So there


may be some mistake in the report.

 Besides this, it was very difficult to carry out the whole analysis on the
basis of limitation scope of study.

(ii)

CHAPTER: 03

PROBASHI BANKING
3.1 Probashi Banking
When you send your hard-earned money from abroad to dear ones at the
farthest end of Bangladesh, ask them to collect it from over 3,500 pay out
locations of BRAC Bank. Every month, Probashi Banking executes around
150,000 transactions; which has made BRAC Bank one of the largest players
among private commercial banks in channelizing inward remittance in the
country. And with ELDORADO, now you can withdraw money from any of the
Eldorado member banks in addition to BRAC Bank outlets - that's too,
instantly!
TERMS & CONDITIONS
1 Governing Laws, Regulations and Rules: These terms and conditions
shall apply to such accounts and services as offered by the Bank to its
customers, existing or new, from time to time. The Terms and Conditions
herein shall be governed by the laws, rules and regulations of the Central
Bank of Bangladesh, Government of Bangladesh and the Bank's policies
and practices.

2 Acceptance of Rules: Any person opening an account shall be deemed to


have read, understood, and accepted the terms and conditions herein
governing the account.

3 Information about Customers: It is the Bank's policy that it will offer high
quality services to Customers but not to Customers who are engaged in
illegal activities and activities that are harmful to the welfare of the people of
the country. It is therefore necessary for the Bank to obtain information
about its that are true and correct. The customer agrees to provide the Bank
such information, particulars and documents as the Bank may require from
time to time in connection with the customer's financial condition,
background and dealings with banks and businesses. The customer
confirms that all information, particulars documents that the customer
provides are true, correct and complete and that if there are any changes to
the information provided, the customer will inform the Bank in writing. The
customer authorizes the Bank to obtain any information that the Bank
considers necessary from other banks, organizations and sources that
provide information relative to the customer's financial conditions. It is the
Bank's policy to maintain confidentiality of customer information. the laws
and regulations in Bangladesh may require disclosure of customer
information to Government organizations and/or regulatory organizations
such as the Bangladesh Bank. The Bank may also consider sharing
customer information in a waythat itconsiders mostsuitable withother
organizationsto improve banking services. The customer authorizes the
Bank to disclose or share information at the sole discretion of the Bank and
indemnifies the Bank from any accidental disclosure of information during
the process of printing, transportation and filing of information.

4 Fees: The Bank shall be entitled without notice to levy or impose all
customary banking and other charges and expenses (including collection
fees and legal expenses) in respect of any account or in respect of any
other banking facilities provided to the customer by the Bank and to debit
the relevant account(s) in accordance with the Bank's normal banking
procedures. Such charges are not refundable upon termination of any or all
of a customer's account(s).

5 Credit of the Account: The Bank acts only as the collecting agent and
assumes no responsibility for the realization of any items deposited with the
Bank for collection. Thus, proceeds of cheques or other instruments
deposited are not available for withdrawal until collected by the Bank. The
Bank reserves the to debit any account that may have been inadvertently
credited with an item subsequently unpaid on collection.

6 Issue and Safety of Cheques: Cheques will only be issued to a customer


when all documentation considered necessary by the Bank has been
obtained. It is the responsibility of the account holders to ensure that
cheques in their possession are kept in secured place. The customer must
at all times exercise due care prevent cheques, payment orders or other
orders or instruments from coming into the possession of unauthorized
persons and to prevent any cheques, orders or other instruments or
instruction from being altered or forged in a manner which may facilitate
fraud. In such events, the Bank is not responsible for any loss suffered by
the customer or any other person. Any loss of cheques, orders or other
instrument must be immediately reported to the Bank and confirmed in
writing without any delay.

7 Changes of Terms and Conditions: The Bank may at any time as it


deems necessary add/amend/delete the present terms and conditions. The
Bank may give notice of such changes where it considers appropriate to the
account holder(s) by ordinary mail.

8 Closure of Accounts: The Bank reserves the right to close any account or
related service without giving prior notice if the conduct of the account is
unsatisfactory in the opinion of the Bank or for any other reason(s)
whatsoever. The Bank shall pay to the customer all available and finally
collected balances all dues to the Bank have been recovered/realized at the
time of the closure of the accounts.

9 Minimum Balance and Interest Payment: The minimum average monthly


balance as prescribed by the Bank from time to time is required to be
maintained in Current, Savings and other accounts. The Bank reserves the
right to change the minimum balance requirement. If the balance falls below
the required minimum period, the Bank may not credit any interest for that
period.

10 Periodic Statements and Advices: The customer may be provided


account "statement" yearly. The customer is required to promptly notify the
Bank of the failure to receive an expected Statement or Advice. If the
account holder does not bring the errors, discrepancies or irregularities to
the notice of the Bank in writing within fifteen (15) calendar days after the
mailing of statement/advice, it will be construed that the transaction shown
on the account statement/advice are correct and complete.

11 Deposits, Withdrawals and Banking Facilities: The Bank shall meet its
obligations exclusively at the branch office where the account is maintained
by the customer. When appropriate telecommunication is possible, deposits
or withdrawalsof money may be made at any of the Bank's branches in
Bangladesh subject the terms and conditions of the Bank. The customer
shall ensure that there are sufficient funds (or pre-arranged credits) for the
Bank to honour cheques the Bank or for debits to the account in accordance
with instructions made by the customer for his/her account provided always
that the Bank may, at its, sole discretion carry out the instruction
notwithstanding such inadequacy and may do so without seeking prior
approval from or notice to the customer and the shall be responsible to
repay the resulting overdraft, advance or credit thereby or created and for all
related charges.

12 Suspicious Transactions: The Bank may refuse to process any


transaction on any account of the customer if the Bank suspects fraud or
illegality therein. The decision of the Bank with regards to whether the
transaction is or is likely to be involved a fraud or irregularity shall be final
and conclusive and binding on the customer.

13 Instruments Deposited: The Bank will not accept stale or post-dated


instruments for deposit. The Bank may refuse to accept an instrument
payable to "Cash" if the instrument is not payable to "bearer". The Bank will
refuse to accept an instrument for deposit if the payee's name is not
identical to the name of the in the Bank's records.

14 Orders to Stop Payment or Amend Instruction: A Customer may place


a stop payment order for a cheque in writing. The Bank will not make the
payment if it has reasonable opportunity to act on such order.

15 Nominee: In the event of the death of a customer, the nominee shall


receive/draw the amount of deposit held by the Bank in the customer's
account. In the the Nominee is a minor at the time of the customer's death;
the legal guardian is authorized to receive/draw the amount of the deposit
held by the Bank in the customer's account. In the event that there is no
nominee, the account willthen be frozen until the legal successors to the
deceased is appointed/determined by relevant Court of Law.

16 Service Disruption: The customer agrees that the Bank will not be liable
for any loss or any damage if it is unable to provide services in connection
with any customer accounts due to postal, courier, electrical, mechanical,
telecommunications or computer failure or an act of God, catastrophe, war,
civil or industrial disturbance.

17 No Liability for Loss: The customer agrees that the Bank will not be liable
for any loss, damage or liability incurred by the customer in connection with
any of its account with or services provided or agreed to be provided by the
Bank or inaction on part of the Bank or any of its officers, agents,
employees and representatives. The customer agreed not to hold the Bank
liablefor any loss or damage arisingfrom: (A) non-discovery of any forgeries
or frauds, except to the extent that the Bank has acted with gross
negligence, (B) the Bank closing the customer account for whatever reason
whatsoever, (C) directly or indirectly, the error, failure, negligence, act or
omission or any other, person, system, institution or payment infrastructure.

18 Indemnity: The customer shallkeep the Bank indemnifiedatall


timesagainst allloss. costs,damages, expenses (including legal fees),
claimsor demands arising any way in connection with the customer's
accounts or, in enforcing these terms and conditions and in recovering of
any amount due to the Bank or incurred by Bank in my legal proceedings of
whatever nature.

19.Acceptance of Terms and Conditions: I have signed the application


form as a token of acceptance of the aforesaid terms and conditions.

3.3 Probashi Current Account


It is ideal for Probashi Bangladeshis / Returning Bangladeshis who do not
wish to earn interest due to religious or other reasons. This account also
comes with cheque book and ATM card and is ideal for regular transaction.
**This account will be maintained in Taka.

3.3.1 Features & Benefits


24 hour Access to ATMs and POSs’
Zero Balance Account opening
No relationship charges
No Interest (Ideal for people who do not want interest for religious reasons)
No restriction on frequent transactions

3.3.2 Apply Eligibility


Any NRB who is between 18 to 65 years of old can open this account
The NRB must have valid Residence / Work permit.
Any NRB who is between 18 to 65 years of old can open this account

3.3.3Required Documents
Photo:
2 pp size

3.3.4 Nominee Photo:


1 pp size with account holder attestation on the reverse side. Photo may be
kept pending at the time of account opening and must be provided with 15
days of account opening.

3.3.5 Identification:
Photocopy of Valid passport (6 pages) with due attestation. In case of foreign
passport attested photocopy of ‘no visa required for travel to Bangladesh’
page required.

3.3.6 Valid VISA:


Entry VISA with due attestation. If it is in any other language other than
English, no translation is required.

3.3.7 Work/Residency Permit:


Not required. However it may be taken when visa is not valid to prove that
applicant is legally residing abroad.
3.3.8 Address Proof:
• Address proof document (Any one):
• Resident Permit
• Work ID
• Utility Bill
• Pay Slip
• Driving License
• Government issued ID card
• Credit Card Bills
• Rent Receipts
• Over seas Bank Statement
• Citizenship card / Health Card / Green card / Social Security card
• Job Contract Letter
• Mobile Bill
• PO BOX no. will be accepted if the company's name against the PO
Box no. is the same as mentioned in employee's office address
• For any banking needs please call 24 hour Phone Banking: 01819
230000 or e-mail us at probashi@bracbank.com

3.4 Probashi Savings Account

Probashi Savings Account offers a regular savings account in local currency


for the NRBs who is residing abroad and want to save their hard-earned
money to utilize in future after coming back to Bangladesh.

3.4.1 Features & Benefits


• This is an interest bearing Taka account in which interest is paid twice
a year
• No relationship charges
• Cheque Book and ATM Card are available in this account

3.4.2 Apply Eligibility


• Any NRB who is between 18 to 65 years of old can open this account.
• The NRB must have valid Residence / Work permit.

3.4.3 Required Documents


Photo:
2 pp size
Nominee Photo:
1 pp size with account holder attestation on the reverse side. Photo may be
kept pending at the time of account opening and must be provided with 15
days of account opening.

Identification:
Photocopy of Valid passport (6 pages) with due attestation. In case of foreign
passport attested photocopy of ‘no visa required for travel to Bangladesh’
page required.

Valid VISA:
Entry VISA with due attestation. If it is in any other language other than
English, no translation is required.

Work/Residency Permit:
Not required. However it may be taken when visa is not valid to prove that
applicant is legally residing abroad.

Address Proof:
• Address proof document (Any one):
• Resident Permit
• Work ID
• Utility Bill
• Pay Slip
• Driving License
• Government issued ID card
• Credit Card Bills
• Rent Receipts
• Over seas Bank Statement
• Citizenship card / Health Card / Green card / Social Security card
• Job Contract Letter
• PO BOX no. will be accepted if the company's name against the PO
Box no. is the same as mentioned in employee's office address
3.5 Probashi Fixed Deposit
A fixed deposit account allows you to deposit your money for a set-period of
time, there by earning you a higher rate of interest in return. Fixed Deposits
can be made from 3 months to 3 years. Interest is paid on the maturity at a
very attractive rate. ** This account will be maintained in Taka.

3.5.1Features & Benefits


• NRBs’ can choose any of the Fixed Deposit maturity period from the
tenures of : 3 months, 6 months, 12 months, 24 months, 36 months.
• Auto renewal on maturity, if no instruction is received.
• Cumulative interest gain

3.5.2 Probashi Abiram


Probashi Abiram is a Fixed Deposit, which is ideal for NRBs who want to get a
return every month. If the NRB has sufficient fund, s/he can open Probashi
Abiram for 1 year to 3 years tenure .The interest will be paid every month on
the Probashi Savings/Current Account automatically. This is ideal for
customers who want to pay their DPS installments. Accounts will be
maintained in Taka.

3.5.3 Features & Benefits


• Customers can earn monthly return.
• Monthly installment for DPS will be automatically realized from this
account.
• Access to wide network of BRAC Bank.
3.6 Probashi DPS
• To secure NRB’s hard-earned money, Probashi Banking Service
introduces an ideal monthly saving scheme "Probashi DPS"

3.6.1 Features & Benefits


• Monthly installment of minimum Tk. 500 and its multiples.
• Installment will be realized automatically on due date.

3.7 Investment

3.7.1 Probashi Wage Earners' Bond


Probashi Wage Earner Development Bond (WEDB) is a product designed by
Bangladesh Central bank for Bangladeshi national living abroad. The
objective of this product is to encourage the NRBs to invest their hard earned
money to purchase WEDB on which the government guarantees a fixed
interest rate.

3.7.2 Features & Benefits


• Tax exemption on the principal and interest amount.
• Loan Facility on the bonds in Bangladesh.
• No maximum limit on bond purchase.
• Death risk benefit up to 30% to 50% of investment
• Interest payable every six months in BDT.
• Can be used as security for any loan.
• Purchaser of Wage Earner's Development Bond can repatriate the
principal amount of the bond in foreign currency.

3.7.3 US Dollar Premium & Investment Bond


US Dollar Premium Bond is a product designed by Bangladesh Central bank
for Bangladeshi national living abroad. The objective of this product is to
encourage the NRBs to invest their hard earned money to purchase WEDB
on which the government guarantees a fixed interest rate

3.7.4 Features & Benefits


• Interest is payable in Bangladesh currency or in US Dollar.
• Principal amount payable in Bangladesh currency or in US Dollar.
• Investors of one Million US Dollar and above shall be treated as CIP
3.7.5 Probashi Biniyog
BRAC Bank Limited offers 'Probashi Biniyog' – a product that exclusively
provides Non-Resident Bangladeshis (NRBs) the opportunity to invest in the
Bangladeshi Capital Market through a Beneficiary Owner's (BO) account
which will be funded by a Non Resident Investor's Taka Account (NITA). Both
BO account and NITA will be held with BRAC Bank Limited.

3.7.6 Features
• NRBs can invest into the Bangladeshi Capital Market from anywhere in
the world
• Custodian Service will be provided by BRAC Bank
• 100% repatriation of capital, dividend and investment profits
• NRBs can apply for IPOs as well as buy and sell shares in the
Secondary Market through BRAC Bank Limited. They can use e-mail,
fax or phone to issue trade orders to BRAC Bank Limited

3.8 Account Operations


• Only share related transactions are allowed
• No ATM card or Cheque book will be issued against NITA
• NITA (Current account – non-interest bearing account) will provide
customers the flexibility to remit funds from abroad which will be kept in
the account as local currency (BDT)
• Permissible deposits under NITA
i. Inward Remittances
ii. Transfer from FCY account
iii. Refund Warrants of IPO
iv. Sale proceeds of shares
v. Dividends/Bonus from shares

3.8.1 Remittance Info

3.8.2 Western Union


Western Union helps you provide for your loved ones almost anywhere in the
world. Whether it's for education, healthcare or groceries, we offer Consumer-
to-Consumer Money-Transfer Services to get resources to members of your
family quickly.

3.8.3 Western Union Broadens Global Cash Payment Options for


AdSense Subscribers
ENGLEWOOD, Colo., Jul 08, 2010 (BUSINESS WIRE) -- The Western Union
Company (NYSE:WU) today announced the expanded availability of the
Western Union cash payment option for Google AdSense. First introduced in
a limited number of countries in November 2007, the reliable and flexible
Western Union payment option is now
Exchange Houses
Sl Name of Exchange House Address
No.

UAE

01. Federal Exchange Co. W.L.L PO Box: 1038, Dubai, UAE


Tel: 009714 2256773/2258421

02. Wall Street Exchange Center PO Box: 3014, Nafi Road, Derai Dubai, UAE
L.L.C. Tel: 009714 2269026

03. Lari Exchange Establishment Liwa Street, Saif Bin Darwish Building, Abu Dhabi, U. A.E
Tel: 009712-6223225

04. UAE Exchange Centre L.L.C. Po Box-170, Abu Dhabi, UAE


Tel: 00971-26322166

05. Habib Exchange Co. L.L.C Central office Hamden Street, P.O.Box 2370, Abu Dhabi, UAE,
Tel: 026272656

06. Al- Ahalia Money Exchange P.O. Box No-2419,Abu Dhabi, U.A.E.
Bureau Tel. 00971 2 6270004

07. Al Ansari Exchange Company P.O. Box 325, Al AmiN Tower, Liwa Street, Abu Dhabi, UAE.
TEL: 9712 6227888

08. Economic Exchange Centre 116/356 Naif Road, Opposite Al Ghurair Exchange
P.O. Box No 116496, Deira Dubai, U.A.E.
Tel: 00971 4 2717575

09. Al Rostamani International P.O. BOX 10072


Exchange Co. (ARIE) DUBAI, U.A.E. Tel. 00971-2-6098100

10. Alfa Exchange P.O. BOX: 122414, DEIRA DUBAI, UAE


Tel: +971 4 2340777

11. Alfalah Exchange Company P.O. BOX 3692


Sheikh Zayed The Second Street (Electra), Abu Dhabi, U.A.E.
Tel. 00971-2-6329888

12. Xpress Money Po Box-170, Abu Dhabi, UAE


Tel: 00971-26322166

13. GCC Exchange P.O.BOX 41704, Deira Dubai


TEL: 009714 2243655

KSA

14. Alamoudi Exchange. Co. KSA Gabil Street (Near Mahmal), Balad, Jeddah- 21411, K.S.A
Tel: 00966-26474515

QATAR

15. Union Exchange Co. WLL, Al Mushirib Road, Sarah Kahrba, Doha, Qatar
Qatar Tel: 00974-4423715

BAHRAIN

16. Dalil Exchange, Bahrain Al Noor Building, Near Bab Al Bahrain on Government Avenue Road, Manama,
Bahrain
Tel: 00973-17223464, 225997
Chapter- 4
Finings & Analysis
Profitability Analysis
How Banks Use Profitability Analysis
Determining the profitability of each customer is not easy. Modern profitability
software adds up the revenues from each account, and subtracts the bank’s
costs on a monthly basis. The costs include the cost of the funds, provision for
losses, overhead, deposit insurance, and customer’s usage of bank services.
Profitability software is still in its infancy. It offers a real challenge for software
providers to deliver an outstanding product. It will be particularly useful for
advanced data applications.

Once the software has determined the profitability of each account each
month, each customer’s total profitability has to be computed by adding
together the profits or losses from each of his accounts. When banks first do
this calculation, it often comes as quite a shock. Some, like the Fleet Bank,
have found that as many as half of their total customers are unprofitable.
Many will never be profitable. Their marketing staffs are busy working to
acquire and retain people who destroy value for the bank!

With knowledge of profitability, banks begin to classify their customers into


profitability segments so that they can understand and modify customer and
employee behavior. Here is the way one bank classified its customers in a
recent month:

The top two segments, representing 16% of the bank’s customers, were
responsible for 105% of the bank’s total profit. The bottom 28% represented a
loss of 22% of the profit. This picture is typical of many banks.
What are banks doing about this situation? In the first place, few banks have
reached the this stage yet, and most of those have not developed any
conscious strategies to deal with the problem. Those that have developed a
plan, however, have come up with some innovative ideas.

Most are working very hard to retain the customers in the top two groups.
These are designated as Gold customers. Banks try to extend special
services to them. Gold customers call in on special toll free lines. Branch
managers are furnished with the names of their top customers, and are
instructed to meet and greet them when they visit a branch. They are
assigned personal bankers, who call and introduce themselves.

The customer access screens used by bank personnel include a profitability


code, so employees can know whether they are dealing with a 5, 4, 3, 2, or 1.
When the loans for the 1s come up for renewal, they are renewed at a higher
rate, to try to nudge them into profitability, or possibly to get them to take their
business elsewhere. The software does something else which is quite
sophisticated. The software determines which bank products should be
suggested to the customer during customer contacts on the phone or in
person. These products are selected by formulas that determine what bank
products the customer currently uses, and what his current balances would
indicate that he might be eligible for and want to use next. The software also
suggests the appropriate rates for loans or CDs based both on the current
market, and the customer’s profitability level. The bank software is often tied
to the customer service call director, which routes Gold customer calls to
special Gold Service teams, and provides only minimal service for
unprofitable customers.

Customers who visit branch offices cost the bank considerable money. It is
much more economical for customers to use an ATM, mail, or PC banking.
For this reason, some banks have tried to discourage branch visits by
charging a fee. Profitability analysis shows that such policies may be a
serious mistake. As the above chart indicates, branches are visited most by
two groups: the most profitable and the least profitable. Policies that turn
away unprofitable customers may also turn off Gold customers.

Beyond Profitability

Profitability only measures the past. Lifetime value projects this into the future,
and looks at what each customer can do for the bank in the coming years.
Fleet Bank, for example, determines customer profitability and lifetime value
each month, and also computes potential lifetime value if the customer can be
talked into purchasing the most likely next products. In this way, Fleet
manages its customer relationships in a highly professional manner. We will
be covering lifetime value in a future article.

What are marketer’s roles in this revolution in banking customer


management? Database markering analysts should:

• Have profitability computation software available


• Assist banks in creating marketing customer profitability
customer segments
• Help to create “Next best product” software
• Have the results of these program appear on customer contact
screens throughout the bank
• Assist banks in moving their customers towards profitability,
using these new techniques.

Investment Analysis
BRAC Bank launches 'Probashi Biniyog' for NRB investors

BRAC Bank Limited officially launched a new service whereby the Non-
Resident-Bangladeshis (NRBs) can invest into the capital market of
Bangladesh.

The service, named 'Probashi Biniyog', was unveiled through a formal


ceremony at a local hotel recently.

'Probashi Biniyog' is a new financial solution from BRAC Bank whereby that
will enable NRBs open BO accounts, buy and sell stock in both primary and
secondary markets, and repatriate the profit to their country of residence.

BRAC EPL Securities Ltd, a concern of BRAC Bank, will provide the stock-
exchange related services while the solution will be available to all NRB
customers of BRAC Bank. .

Sir Fazle Hasan Abed, Founder Chairman of BRAC Bank Limited was present
at the event as the Chief Guest to unveil this new product with the presence of
Mr. Muhammad A. (Rumee) Ali, Chairman and Mr. A. E. A. Muhaimen,
Managing Director & CEO, BRAC Bank Limited and Mr. Saiful Islam, Vice
Chairman, BRAC EPL Stock Brokerage Limited. .

Currently, no other bank is providing this kind of a service. The Stock Market
in Bangladesh has seen surge of investment, but the percentage of NRBs in
the market has remained negligible as there was no formal solution for them
to invest into secondary market from abroad. Through 'Probashi Biniyog', the
NRBs can operate their accounts online from abroad. All share related
services such as NITA, BO and stock broking accounts are being offered
under one umbrella of 'Probashi Biniyog'.

In expression of launching 'Probashi Biniyog', Sir Fazle Hasan Abed said, "I
am proud to inaugurate Probashi Biniyog which will provide one-stop solution
to NRBs for investing in Bangladesh Capital Market from abroad. I believe this
will strengthen the investment at the Stock Markets.” .

In the ceremony, Mr. Muhammad A. (Rumee) Ali said, 'This was a long
awaited product by NBRs for performing online transaction to buy and sell
shares from abroad. Together, BRAC Bank and BRAC EPL has made this
solution possible." .

Probashi Biniyog exclusively provides Non-Resident Bangladeshis (NRBs) the


opportunity to invest in the Bangladesh Capital Market from anywhere in the
world through a Beneficiary Owner's (BO) account, which will be funded by a
Non Resident Investor's Taka Account (NITA). Both BO account and NITA will
be held with BRAC Bank Limited. .

Under the Probashi Biniyog, NRBs can apply for IPOs as well as buy and sell
shares in the Secondary Market through BRAC Bank Limited. They can use
e-mail, fax or phone to issue trade orders to BRAC Bank Limited.

There will be 100 per cent repatriation of capital, dividend and investment
profits.

Stock market investors and operators hailed the BRAC-EPL move. .

They said such a move will help the stock market grow further. .

Market operators said a huge number of NRB investors will be benefitted with
the new product

I believe the new product will help the Bangladesh market go wide through the
international services,” a local ionvestor said.

BRAC Bank Limited provides various commercial banking services in


Bangladesh. It offers retail, corporate, small and medium enterprises (SME),
and Probashi banking products and services. The company’s retail banking
product line comprises various deposit products, including salary accounts,
current accounts, short term deposits, savings accounts, Ezee accounts,
Abiram accounts, interest first, fixed deposits, and step up fixed deposits; and
loan products, such as salary, NoW, car, teachers’, study, travel, credit card,
top up, secured, and doctor's loans. Its enterprise banking products and
services include various loan products consisting of overdraft, term loan,
lease finance, loan against trust receipt, work order finance, and medium
enterprise loans; trade finance, including letters of credit and guarantee; and
corporate cash management services. The company’s SME products
comprise various deposit products, such as Bizness account; and loan
products, including Anonno Rin, Apurbo Rin, Pathshala Rin, Aroggo Rin,
Digoon Rin, and Prothoma Rin. Its Probashi banking products and services
include current accounts, savings accounts, and fixed deposits. As of
December 31, 2008, BRAC Bank operated 56 branches, 30 SME service
centers, 427 SME unit offices, and 112 ATM sites. The company was
incorporated in 1999 and is based in Dhaka, Bangladesh.

Financial ratio analysis

Financial ratio analysis is the calculation and comparison of ratios which are
derived from the information in a company's financial statements. The level
and historical trends of these ratios can be used to make inferences about a
company's financial condition, its operations and attractiveness as an
investment.

Financial ratios are calculated from one or more pieces of information from a
company's financial statements. For example, the "gross margin" is the gross
profit from operations divided by the total sales or revenues of a company,
expressed in percentage terms. In isolation, a financial ratio is a useless piece
of information. In context, however, a financial ratio can give a financial
analyst an excellent picture of a company's situation and the trends that are
developing.

A ratio gains utility by comparison to other data and standards. Taking our
example, a gross profit margin for a company of 25% is meaningless by itself.
If we know that this company's competitors have profit margins of 10%, we
know that it is more profitable than its industry peers which is quite favourable.
If we also know that the historical trend is upwards, for example has been
increasing steadily for the last few years, this would also be a favourable sign
that management is implementing effective business policies and strategies.

Financial ratio analysis groups the ratios into categories which tell us about
different facets of a company's finances and operations. An overview of some
of the categories of ratios is given below. .

Leverage Ratios which show the extent that debt is used in a company's
capital structure.
.
Liquidity Ratios which give a picture of a company's short term financial
situation or solvency.
.
Operational Ratios which use turnover measures to show how efficient a
company is in its operations and use of assets.
.
Profitability Ratios which use margin analysis and show the return on sales
and capital employed.
.

Chapter- 5
SWOT Analysis

SWOT Analysis .

SWOT analysis is done for a company, to find out its overall Strengths,
Weaknesses, Threats and opportunities leading to gauging the competitive
potential of the company. .

Strengths
• Stable Sources of Funds
• Strong Liquidity Position
• Satisfactory Profitability
• Experienced top management
• Satisfactory capital base
.

Weaknesses
Threats

opportunities

Vision

BRAC Bank will be a unique organization in Bangladesh. It will be a


knowledge-based organization where the BRAC Bank professionals will learn
continuously from their customers and colleagues worldwide to add value.
They will work as a team, stretch themselves, innovate and break barriers to
serve customers and create customer loyalty through a value chain of
responsive and professional service delivery. Continuous improvement,
problem solution, excellence in service, business prudence, efficiency and
adding value will be the operative words of the organization. .

BRAC Bank will serve its customers with respect and will work very hard to
instill a strong customer service culture throughout the bank. It will treat its
employees with dignity and will build a company of highly qualified
professionals...

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