1.

Introduction:

1.1 Origin of the report: This report is originated as a partial fulfillment of the training on Applied Marketing Research Methodology. The report titled Measuring Customers Perceived Service Quality of Banking Service and Customer Satisfaction: From the Context of Prime Bank Ltd. The report is submitted to honorable faculty Mr. Fazlul Haque Shah, University of Dhaka on November 27, 2011. 1.2 Background of the problem: Customer Satisfaction has become an important dimension for performance measurement particularly for banking and finance industry. As most banks and finance organizations offer similar products and services, improving customer satisfaction and loyalty is the most important factor in maintaining as well as increasing market share for these organizations. The purpose of the paper is to identify Customer perceived service quality of Banking Service and Customer satisfaction: From the context of Prime Bank Limited.

1.3. Objectives:
The objectives of the study are as follows: To identify the critical factors of service quality in the banking sector in Bangladesh To identify the critical factors of customer loyalty in the banking To identify the interrelationships between service quality, customer satisfaction and customer loyalty in the retail banking sector and to identify the benefits of this relationships.

To understand how PBL uses their policies to create customer loyalty. To understand the different functions of banking system, various services provided by bank, and changes in these functions and services.

To know all the banking related information to gain knowledge about banking jobs and also for the real life needs. To find the services it provides to the customers. To understand the on-line banking system and at the same time different types of on-line posting. To know the process that PBL uses to build long-term relationship with its customers. To present some recommendations, from my point of view that helps PBL to make more competitive places in the banking industry.

1.4 Scope: The report is concerned with the Customers Perceived Service Quality of Banking Service and Customer Satisfaction: From the Context of Prime Bank Ltd. Prime Bank Limited is one of the new generation banks in Bangladesh. The report covers the organizational structure; background, functions and the performance of the bank; so this report covers all the activities and performance that the bank offers to the customers to attract them.

This Report Directly Focuses On: The banking system of Bangladesh The history of Prime Bank Ltd. Different Deposits and Credit schemes of PBL to attract customers Various customer services of PBL Current position of PBL in the Banking Industry and evaluation of performance. 1.5 Methodology:

The method of data analysis was divided into two parts. First We gather opinions of the customers by interviewing with a questionnaire from the different branches of Prime Bank Ltd. Then We have presented the data of PBL from its annual reports and analyzed it to find its performance from year to year. So We have presented and analyzed the data in two ways: Customer services of PBL through different branches. Performance of PBL in various sectors.

For collaborating the data and information collected through primary and secondary sources. We have also used quantitative & qualitative method that gives a view about Banking System of our country especially Prime Bank Ltd. To gather information we had to visit PBL main branch and also some website especially PBLs website. The sources of data or information are divided into two parts that are; Primary Data: In the primary source, data are collected directly from interviewing the customers of this Bank, asking questions to officials and staffs and other related personnel. According to direct question, we have made a set of questions to find the responses of the customers by the factors that are extremely related with Banking Performance and customer service. The major primary sources are Face to Face conversation with the respective customers. Interviewing officers and staffs. Sharing practical knowledge of officials. Relevant file study provided by the officers concerned. Secondary Data: In the secondary source, different textbooks and journal, brochures relating to the theoretical framework of the report have been applied. Moreover, annual reports, company projects profile, related preserved data, financial statements had been collected from the Prime Bank Ltd. Primary Data Secondary Data

The major secondary sources are Annual Report of PBL Audit Reports Website Relevant books, Research papers, Newspapers and Journals. Internet and various study selected reports.

1.6. Limitations of the Study: It is well known to all the banking sector is too much sensitive and the banking market is comparative nowadays. So all of the banking data and information are confidential for writing this report, data was not available. Interviewees do not disclose the accurate figures and facts about their branch. We have faced the following problems that may be terms as the limitations or shortcoming of the study. However we have faced a lot of problem, though I have overcome it. They are Budgeted times for the study:

The first obstruct is time itself. Due to the time limitation, the scope and dimension of the study has been curtailed. As the limit was assigned for submitting the report was very short, it was not possible to spend sufficient time for the study.

Data insufficiency:

It was very difficult to collect data, which is very essential for interpretation, because the PBL is one of the fast growing commercial bank and for this reason the personnel and staffs are very busy have not enough time to supply our topic related.

Poor library facility:

There is no proper storage facility in the branch to store banking related books, journals, magazines, case study etc. that might be help me. Time Limitation

Due to time limitation many of aspects could not be discussed in the present report.

Prime Bank at a glance:

2.1 Introduction In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial Bank with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly, Prime Bank Limited was created and commencement of business started on 17th April 1995. The sponsors are reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile and finance to energy etc. As a fully licensed commercial Bank, Prime Bank Ltd. is being managed by a highly professional and dedicated team with long experience in Banking. They constantly focus on understanding and anticipating customer needs. As the Banking scenario undergoes changes so is the Bank and it repositions itself in the changed market condition. Prime Bank Limited has already made significant progress within a very short period of its existence. The Bank has been graded as a top class Bank in the country through internationally accepted CAMEL rating. The Bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation.

Prime Bank Ltd. offers all kinds of Commercial, Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by Bangladesh Bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software.

Prime Bank Ltd., since its beginning has attached more importance in technology integration. In order to retain competitive edge, investment in technology is always a top agenda and under constant focus. Keeping the network within a reasonable limit, Banks strategy is to serve the customers through capacity building across multi delivery channels. Banks past performance gives an indication of their strength. The Bank is better placed and poised to take their customers through fast changing times and enable them compete more effectively in the market they operate.

2.2. Objective: The objectives of the Prime Bank Limited are specific and targeted to its vision and to position itself in the mindset of the people as a bank with difference. The objectives of the Prime Bank Limited are as follows: To mobilize the savings and channeling it out as loan or advance as the company approve. To establish, maintain, carry on, transact and undertake all kinds of investment and financial business including underwriting, managing and Distributing the issue of stocks, debentures, and other securities. To finance the international trade both in import and export. To carry on the foreign exchange business, including buying and selling of foreign currency, travelers cheques issuing, international credit card issuance etc.

To develop the standard of living of the limited income group by providing Consumer Credit. To finance the industry, trade and commerce in both the conventional way and by offering customer friendly credit service. To encourage the new entrepreneurs for investment and thus to develop the countrys industry sector and contribute to the economic development.

2.3 Vision: To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity. 2.4 Mission: To build Prime Bank Limited into an efficient, market driven, customer focused institution with good corporate governance structure. Continuous improvement in our business policies and procedures, cost reductions through integration of technology at all levels.

2.5. Slogan: A bank with a difference. 2.6. Strategic Priorities: To have sustained growth, broaden and improve range of products and service with the aim to add increased value to shareholders invest and offer highest possible benefits to our customer. 2.7. Core Values: For our Customers:

To become more caring bank by providing the most courteous and efficient service in every area of our business. For our employees: By promoting the well-being of the members of the staff. For our Shareholders: By ensuring fair return on their investment through generating stable profit. For our Community By assuming our role as a special responsibility corporate entity in a tangible manner through close adherence to national policies and objectives.

2.8. Awards & Recognition

Secured 1st position in National ICAB Award for Published Accounts & Reports for seven consecutive years. Received SAFA Merit Award for best presented Accounts for three consecutive years.

2.9. Branch Network: Prime Bank Limited is a fast growing commercial bank in our country. The said bank has established a good operating network throughout the country. It has 97 branches throughout the country. Prime Bank Limited is operating branches on both conventional interest based banking and Islamic Shariah principle based banking. The Islamic Banking operations are completely separated from the conventional Banking. It carries out all the banking activities through its branches in Bangladesh out of the above four branches of the Bank are running under Islamic Shariah, the modus operandi of which is substantially different from other branches run on commercial basis.

Managerial Hierarchy of PBL

Chairman

Top Management

Board of Directors Executive Committee Managing Director Deputy Managing Director Senior Executive Vice President

Executive Level Management

Executive Vice President Senior Vice President Vice President Senior Assistant Vice President Assistant Vice President First Assistant Vice President

Mid Level Management

Senior Executive Officer Executive Officer

Senior Officer Management Trainee

Junior Level Management

Officer Junior Officer Trainee Assistant

2.10. Brief description of business activities and PRODUCTS & Services

Prime Bank Limited launched several financial products and services since its inception. Among them is Contributory Savings Scheme, Monthly Benefit Deposit Scheme. All of these have received wide acceptance among the people. Business Activities of PBL The Principal activities of the bank were banking and related businesses. The banking businesses included deposits taking, extending credit to corporate organization, retail and small & medium enterprises, trade financing, project financing, international credit card etc. Prime Bank Limited provides a full range of products and services to its customers, some of which are mentioned below with a brief overview of the major business activities. Retail Banking: As a part of risk diversification strategy PBL expended the lending activities in this sector during 2010. The growth rate of PBLs consumer financing was 38% during this year. The loan schemes offered by the bank include.

Swapnaneer Home Loan Swapnapuron Home Loan Car Loan

Swapnashaj Home Loan Abash Home Loan Any Purpose Loan

CNG Conversion Loan Doctor's Loan Marriage Loan Travel Loan

 Household Durables Loan Education Loan

Hospitalization Loan Loan Against Salary

SME Lending: Job creation is essential and it must come from Small and Medium Enterprise that will ultimately dominate the private sector. During 2010 banks Strategy was focused on customer convenience. The Bank provided working capital loans to suppliers or dealers of large corporations or clusters of small exporters of non-traditional items.

Corporate Credit: PBLs strategy is to provide comprehensive service to the clients of this segment who are large and medium size corporate customers with expertise in trade finance and related services. Besides trade finance bank are providing working capital finance, project finance and arranging syndication for our Prime Bank Limited corporate clients. Syndication and structured Finance Unit of the Bank strengthened its footstep in the consortium financial market and arranged a number of syndication deals for its corporate clients.

Islamic Banking: For the development of Islamic Banking Business, 2010 was also a commendable year. It has been observed that compliance of Shariah has improved in 2010 as compared to the preceding years. According to their advice Islamic Banking operation of the bank has been separated from the

operation of Conventional Banking and shown separately in the banks financial statement.

Credit Card:
In the year of 2005, Prime Bank Ltd has launched VISA. Before that PBL started its credit card operation in 1999 by introducing Master Card. Now PBL has become the first local Bank of the country to achieve principal membership of both the worldwide accepted plastic money network i.e. MasterCard Gold Credit Card, Visa Gold Credit Card, and International Credit Card.

PBL has redesigned the credit card facility by providing the incentive of Free Life Insurance Coverage for their valued cardholders to mitigate the financial risk.

Custodial Service:

PBL equator fulfills its strategic commitment to provide custody and clearing services. Equators focuses are on the following: Commitment to quality Dedication to customer needs Sustained investment in people and systems

International Trade Management: This division is operational throughout the group and PBLs core strength is trade finance and services. With an

experience, Prime Bank has developed knowledge of trade finance, which is world class. Principle services to importers include imports letter of credit, import bills for collection and back to back letters of credit facilities. Services provide to exporters include export letters of credit, direct export bills, bonds, and guarantees.

Cash Management: Prime Bank recognizes the importance of cash management to corporate and financial institutional customers, and offers a comprehensive range of services and liquidity management.

Institutional Banking: Prime Bank Limited provides a wide range of services to institutional clients, commercial, merchant and central banks; brokers and dealers; insurance companies; funds and managers, and others. It provides relationship managers who are close to their customers and speak local language. This wide network of institutional banking facilities includes transaction, introduction, problem solving and renders advice and guidelines on local trading condition.

Treasury: Treasury operations had been consideration as an important avenue for income generation purpose within Head Office. In fact, in the past, income from treasury operation was quite sizable and significant to the total income generated by the bank. The treasury division publishes daily and weekly currency newsletters, which provide analyses of currency trends and related issues. Seminars and workshops are conducted for customers from time to

time on foreign exchange related topics. Prime Bank is one of the first local banks in Bangladesh to integrate treasury dealings of local money market and foreign currency under one Treasury umbrella. The bank has handled significant volumes of treasury over the last several years. Prime Bank's Dealing Room is connected with automated Reuters Terminal facility thus enabling the bank to provide forward/future facilities to its corporate clients at a very competitive rate. Merchant Banking: The Banks operation in this sector was limited to Underwriting, Portfolio Management and Banker to the Issue functions. The compulsory requirement for opening BO account for share trading has increased the demand for opening BO account. Online Branch Banking: The bank has set up a Wide Area Network (WAN) across the country to provide online branch banking facility to its valued clients. Under this scheme, clients of any branch shall be able to do banking transaction at other branches of the bank. Under this system a client will be able to do following type of transactions: Cash withdrawal from his/her account at any branch of the bank. Cash deposit in his/her account at any branch of the bank irrespective of the location. Cash deposit in others account at any branch of the bank irrespective of the location. Transfer of money from his/her account with any branch of the bank. At present all branches are under online. Clients can easily deposit and withdraw money from those online branches in a moment.

SWIFT:

Prime Bank Limited is one of the first few Bangladeshi banks, which have become member of SWIFT (Society for Worldwide Inter bank Financial Telecommunication) in 1999. SWIFT is a member owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund Transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world.

Information Technology in Banking Operation: Prime Bank Limited adopted automation in banking operation from the first day of its operation. The main objective of this automation is to provide efficient and prompt services to the bank's clients. At present, all the branches of the bank are computerized. At branch level, the bank is using server based multi-user software under UNIX operating system to provide best security of automation. Profitability and Shareholder Satisfaction: The bank had been one of the most profitable in the banking sector. The bank's return on assets (ROA) was 2.37% in the year 2010. Even though the capital market of the country has been suffering over the last few years, the good performance of Prime Bank made sure that the banks share price remained in a respectable position. Products and Services of PBL Prime Bank Limited offers various kinds of deposit products and loan schemes. The bank also has highly qualified professional staff members who have the capability to manage and meet all the requirements of the bank. Every account is assigned to an account manager who personally takes care

of it and is available for discussion and inquiries, whether one writes, telephones or calls. Deposit Schemes Fixed Deposit Scheme Contributory Saving Scheme Monthly Benefit Deposit Scheme Special Notice Deposit Education Savings Scheme Prime Bank Monetary Scheme Savings Deposit Account Multi Currency Account Foreign Currency Deposit Account Non Resident Taka Account NFCD (Non Resident Foreign Currency Deposit Account) NITA (Non Resident Investors Taka Account . Loan Schemes:

General Credit Unit (GCU) Structured Finance Unit Short-Term Finance Project Finance Long-Term Finance Acquisition Finance Real Estate Finance Securitization Import Finance/Trade Finance Advisory Work Order Financing/Construction Business

Investment Procedure

Export Finance Unit

Lease Finance Unit

Project Loan

Working capital

- Back-to-Back L/C

- PC/Overdraft/ECC

- L/C & LTR

- Cash Credit (Hypothecation):

- SOD (CI)

House Building Loan & Apartment Loan Scheme: Advance against Shares Custodial Services for investors (both individual & institutional) investing in through Stock exchange One stop services for payment of utility bills. Credit card

Other Products & Services Online Banking Service SWIFT Service Letter of Credit Delivery Service Locker Service

3.01 Functional Structure:

3.01.01. General Service Division (GSD):

The functions of GSD are classified as Establishment and General Banking (GB).

(a) Establishment: The main function of GSD is to procure and supply the tangible goods to branches of PBL. Those are: Tangible functions of opening a branch, for example, interior

decoration, making lease agreement

Print all security papers and bank stationeries, forms, registers and distribute them to the branches Purchase and distribution of banks furniture and fixtures Find out the demand of equipment from the branches and divisions and arrange the purchase and delivery of them to the branches concerned Install and maintain different facilities in different branches.

(b) General Banking: General department performs the majority functions of a bank. It is the core department of any bank. The activities of GB of PBL are mainly divided into the following categories: Account opening section Local remittance section Online branch banking section Deposit scheme section Clearing section Collection section Cash section Accounts section

All of the above activities of GB are discussed elaborately in the next chapter which is the core chapter of this report. 3.02. Head Office Accounts (HOA): It deals with the Head Office transactions with banks and its different branches and these are recorded under the following headings: Income and expenditure positioning: It maintains all the income and expenditure information

Cash section: It handles cash expenditure for office operations and payments. Bills section: It deals with inland bill transactions. Salary and wages section: Salary and wages of head office executives are given from this account. Provident fund: Employee provident fund are maintained here.

3.03. Consolidation of Branch Accounts (CBA): All branches of PBL have to periodically send their income and expenditure, profit and loss accounts to head office. This division consolidates all these information and makes statements to submit to Bangladesh Bank. Credit Division (CD) Bank is a financial intermediary whose prime function is to move scarce resources in the form of credit from savers to those who borrow for consumption and investment. The word credit is derived from the Latin word credere, which means to trust. The fundamental nature of credit is that an element of trust exists between buyer and seller-whether of goods or money. In a modern industrial society Banks are uniquely important because of their ability to create money. Lending comprises a very large portion of a Banks total assets and forms the backbone of the Bank and interest on lending constitutes the highest proportion of income of a Bank. As such credit quality remains the prime indicator of its commercial success. Unsound credit reduces the ability of a Bank to provide credit towards profitable borrowers and undermine liquidity and solvency. Therefore lending is very important for the profitability and success of a Bank. When a bank advances a loan, it does not pay the amount in cash. But it opens an account in his name and allows him to withdraw the required

amount by cheque. Banks provide credit facilities to businessmen by way of loans and advances, overdraft and cash credit. When a loan is granted or overdraft is sanctioned, the amount of loan or overdraft is entered in the account of the customer and he is allowed to draw a cheques upto the amount agreed upon. Thus the bank creates a deposit in the name of the borrower. Basically credit is the function by which people can perform their job by depositing and lending money from the bank with an implied interest rate and bank performs here as a middleman. Banks create money and credit. It happens in two ways. First, when a customer is granted loan, he has to sign a promissory note and receive in turn, a banks demand deposit, or cash. The promissory note does not act as money but it receives money and can readily spend almost everywhere. Thus it creates credit. Second, the entire systems of banks also create money as the deposits generated by lending flow from bank to bank. By law, each bank must set aside a fractional reserve behind each deposit it receives and the remaining excess can be loaned out. No single bank can lend out more than its excess reserves, the entire banking system can create a multiple volume of deposit money through credit creation. Types of Bank Credit Modern banking operations touch almost every sphere of economic activity. The extension of bank credit is necessary for expansion of business operations. Bank credit is a catalyst for bringing about economic development. Without adequate finance there can be no growth or maintenance of a stable output. Bank lending is important to the economy, for it makes possible the financing of agricultural, commercial and industrial activities of a nation. The credit facilities are generally allowed by the bank may be in two broad categories. They are:

(1) Funded Facilities:

Funded facilities can also be divided into the following categories: Loans: i) Short term ii) Medium term: iii) Long term : : Up to 12 months. More than 12 and up to 36 months. More than 36 months.

Overdrafts: # Against hypothecation of goods/stock # Against pledge of goods/stock # Against any other permissible securities. Other advances: # Against import bills. # Against imported merchandise. # Against Trust receipts (T/R). # Against Export Bills Purchased/Discounted # Against Work order # Against other securities. (2) Non-Funded Facilities: Letter of credit (L/C) Letter of Guarantee (L/G) 3.04. Types of Advances Offered by PBL:

Secured Advances: A. The following type of secured advances are allowed against tangible securities subject to margin restrictions: Loan (General) House Building Loan Other Loans to Staff Cash Credit (Hypothecation) Cash Credit (Pledge) Hire-Purchase Lease Financing Consumers Credit SOD (Export) SOD (Others) PAD LIM LTR IBP Packing Credit FDBP (Foreign) FDBP (Local) FBP B.

These advances are allowed against the following securities: Shares of various Companies approved by Head Office from time to time and listed in the Stock Exchange.

Term Deposit Receipts issued by any Branch of our Bank. Lien on balance in Savings A/C, Current A/C. and other Savings Schemes Government Promissory Notes.

Various Sanchaya Patras Surrender value of Life Insurance Policies. WEDB Assignment of bills against work orders/supply orders and receivables Stock of goods in trade (Permissible goods only) pledged or hypothecated.

Hypothecation of power driven vehicles or watercrafts. Hypothecation of capital Machineries and equipments. Immovable Property. Imported merchandise - pledged or hypothecated. Trust Receipts. Import Bills (Pads) Bills Purchased Scheduled Bank/Insurance Guarantees Export Bills Inland Bills. Personal Guarantee Corporate Guarantee

Unsecured Advances: An unsecured or clean Advance is one, which is granted to a constituent without obtaining any security subject to restrictions imposed from time to time by Bangladesh Bank or any competent authority. In such case only charge documents are held. A. Unsecured Advances mean and include: i) ii) Clean Overdrafts, and Clean Loans.

B. I. A customer should not ordinarily be permitted to overdraw his account without security. However, an unsecured facility may be allowed in exceptional circumstances, only for a short period, with definite repayment arrangement, subject to restrictions imposed by Bangladesh Bank or any other competent authority, with prior approval of Head Office, to a customer on the basis of his personal credit worthiness, standing and reliability.

II. It shall not be granted unless the Sanctioning Authority has full confidence in the ability and reputation of the customer to repay it, on demand, or at its maturity if it is a loan. Definite arrangements for repayment, whether by installments or otherwise, must, as a rule, be made.

3.05. Procedure of Giving Advance: 1. The borrower has to apply to PBL for loan by filling up of a specific

application form. 2. After receiving loan application form, PBL sends a letter to

Bangladesh Bank for obtaining a report. This report is called CIB (Credit Information Bureau) report. Giving of this report is essential if the loan amount exceeds Tk. 50 lac. The purpose of t6his report is to being informed that whether the borrower has taken from any other bank; if yes, then whether these loans are classified or regular. 3. After receiving CIB report, if the bank thinks that the prospective borrower will be a good borrower, then the bank will scrutinize the documents. In this stage, the bank will look whether the documents are properly filled up and signed.

4.

Then comes processing stage. In this stage, the bank will prepare a

proposal. A proposal contains all relevant information (e.g. name of the client, type of the loan, amount of the loan, period of giving loan, security, date of application, financial data, etc.) Branch incumbent (Local Office) has the discretionary power to sanction loan (SOD) upto Tk.25 lac against financial obligations by informing head office. But in that case, the branch manager has to give attention on the following matters:

a) b)

The interest of the loan must not be less than 14.5%, and The borrower must maintain 10% margin.

Except this case, the branch manager has to send a proposal to the head office. Head office will prepare a minute and submit it before the executive committee. The minute has to be passed in the executive committee (EC) under certain cases. After passing the minute, it will be sent to the Bangladesh Bank for approval in the following cases: a) b) If the proposal limit exceeds 15% of banks equity. If the proposal limit against cash collateral securities

exceeds 25% of the banks equity. After getting the proposal it will again come to the head office. 5. 6. 7. After the processing stage, a sanction advice will be prepared in After the sanction advice, bank will collect necessary documents After receiving all the documents, the bank will disburse the loan

favor of the client. (charge documents). to the borrowers. For withdrawing the loan amount, customer creates a current account and the loan amount is transferred to this account.

3.06. Lending Principles: For sound lending the following points should be kept in view: Judicious selection of Customers Purpose Safety Security Liquidity Adequate return (Profitability) Supervision National/Social interest Credit Control Policy of Bangladesh Bank

It is to be always remembered that the Bank is the custodian of public money and as such we must be judicious, careful and selective while lending out the depositors money to ensure timely recovery. The deciding factors for recovery of loans are selection of right type of borrowers, end-use of credits and effective follow-up and proper supervision. 3.07. Processing Of Credit Proposals: 1. A secured credit facility may be allowed to a customer only after getting a limit sanctioned by the authorized officials. 2. The customer seeking a credit facility against acceptable security must make an application in banks printed form Request for Credit Limit PF-146 enclosing necessary papers/documents to his nearest Branch of the Bank where he maintains his operative account. 3. Make a preliminary study of the affairs of the intending borrower by consulting the followings: Borrowers application

Reports in confidence collected through all feasible means Borrowers own mode of dealing Statement of accounts of the borrower with own and other Banks Statement of assets and liabilities Financial statements for the last 3(three) years Income Tax statement Trade and other reports Arrange an interview with the intending borrower to know on the following points : Present and future prospect of the customers business Total investment required in the business Borrowers stack in the business Amount of advance required Experience in the line Purpose Period for which the advance is required Source of repayment Customers previous Banker Present liabilities, if any, with other Bank and conduct of the same Securities offered Proposed margin Type of charge to be created against the proposed security Terms of repayment Rate of interest

regarding the state of the business of the intending borrower.

4. Before finally selecting the borrower, be satisfied that; The customer possess character, capacity and capital

 The account is remunerative one Dealing items and primary security of the customer possess the quality of easy marketability, durability and storability Collateral security offered possesses the quality of easy marketability and is not encumbered and its valuation is judiciously assessed so as to leave sufficient margin after covering the advance and belongs preferably to the borrower. Repayment arrangement is satisfactory Means, standing and respectability of the applicant and the guarantor (if any) are satisfactory. Credit worthiness of the applicant is reasonable Location of the business is good. 5. If the proposed facility is beyond the delegated business power of the Branch Manager, the proposal shall be submitted to Credit Division, Head Office duly recommended in the specified Format. The following Papers/documents are to be submitted by the Branch Managers along with the proposals: Request for Credit limit of customers. Project Profile / Profile of Business Copy of Trade License duly attested Copy of TIN Certificate Certified copy of Memorandum and Articles of Association, Certificate of Incorporation, Certificate of commencement of business in case of Public Ltd. Co., Resolution of Board of Director, Partnership Deed, (where applicable) Personal Net worth Statement of the Owner/Director/Partner/Proprietor in Banks Format.

Valuation Certificate in Banks Format alongwith photograph of

collateral security (land & building with detail particulars on the back duly authenticated by the Branch Manager. In case the value of the property offered as security exceed Tk.50.00 lac, the value to be assessed by banks enlisted surveyor and report thereof to be obtained. 3 years Balance sheet and profit and loss A/C CIB Enquiry Form duly filled in (For proposal of Tk.10.00 lac and Lending Risk Analysis for Credit facilities of Tk.50.00 lac and above Inspection/Visit Report of Factory/Establishment/Business premises of Stock Report duly verified (where applicable) Credit Report from other Banks. Indent/Proforma Invoice/Quotation (Where applicable) Price verification report (where applicable) Statement of A/C (CD/SB/CC) for the last 12 months. In case the

above)

the customer.

customer maintaining account with other Bank, Statement of Account for the last 12 months of the concerned Bank should be furnished. In case of renewal/enhancement of credit facility, Debit Turnover, Credit Turnover, highest drawing, lowest drawing, Total income earned, Detailed position of existing liabilities of the customer i.e. Date of sanction, Date of expiry, Present outstanding, Remarks, if any. Declaration of the customer of the name of sister/allied concerns and liabilities with other Banks, if any, and an undertaking to the effect that they have no liability beyond those declared. In case of L/C proposal, detailed performance of L/C during the last year i.e. No. and date of L/C opened, commodity, L/C value, Date of creation of PAD, date of retirement, mode of retirement etc.

Whether the applicant is Shareholder/Director of Prime Bank Ltd. as Financial Analysis to be prepared by the Branch Manager based on liquidity, leverage etc. It should also contain an

per definition of Banking Companies Act. the financial performance of the company which should show trends in sales/profitability, assessment of the competence and quality of the business management, the general economic & competitive environment of the borrowers industry and any other pertinent factors that is relevant for managements credit decision. Justification/consideration for the facility.

6. Approval of Limit:

The sanctioning authority on receipt of the proposal shall scrutinize the same and ensure that: The proposal contains all pertinent information relating to the proposed facility and the borrower. All necessary papers and documents have been submitted. The proposal has been duly signed by the members of the Branch Credit Committee including the Manager. The proposal has been duly recommended. The proposal does not fall within the existing credit restriction Minimum margin requirement against the credit facility has been proposed. The primary security has got easy marketability, durability and storability

The value of the property offered as collateral security is judiciously assessed The proposal is viable and stands all credit tests The proposed borrower is not defaulter of any Bank/Financial Institution There is no request from other Bank/Financial institution for not allowing/stoppage of facility to the prospective borrower The proposal meets all the provisions/requirement of Bank Companies Act/Rules of Bangladesh Bank/Other Laws / Rules Where the proposed accommodation in the form of working capital may be considered on the project financed by any other Bank including DFI. Favorable status report and No Objection Certificate (NOC) from the financing Institution to be obtained.

Where 2nd charge on the fixed and floating assets (in case of a limited company) or 2nd mortgage on real estate is offered, clearance in respect of creation of 2nd charge on the property together with confirmation that documents will be held by them on behalf of the Bank and that they shall not part with the same without consent of the Bank, is obtained from the 1st mortgagee.

7. Check list of action to be taken by the Branch Manager/Second Officer/Credit Officer before disbursement of Credit facilities

Acceptance of customers relating to the terms & conditions to be obtained on the duplicate copy of sanction advice. They will thoroughly examine and ensure that the subject credit facility does not contradict any law, rules and regulation of the country, Bangladesh Bank and Banks credit policy.

 They will obtain NOC from Bank where the customer has existing liability. CIB Report on the borrower to be obtained through Head Office. Lending Risk Analysis as per FSRP Formula in case of credit of Tk.50 lac and above. No objection certificate of Bangladesh Bank in case the credit facility exceeds 15% of Capital Funds of the Bank. Regularization/Adjustment of classified/overdue credit of the customer/their sister/allied concerns with our Bank/other Banks, if any. Original Title deed, Bia deed, Khatian, Mutation parcha, uptodate rent receipt, Municipal Tax receipt, Map, Plan approved by RAJUK/Municipality, Power of attorney, relay certificate about the actual physical possession of the property to be mortgaged, valuation certificate, photograph of the property to be mortgaged with detail particulars on the back. Non-encumbrance certificate relating to the property to be mortgaged from the Banks panel lawyer. Deed of Mortgage and power of attorney to be drafted and executed under the supervision of B.L.A.

Lawyers certificate to the effect that proper Registered/Equitable Mortgage (as the case may be) has been created on the land and building in favor of the Bank as per the terms & conditions of the sanction letter.

Registered Power of attorney to be obtained from the borrower (contractor) as per Head Offices approved specimen assigning the work order favoring the Bank.

 The power of attorney to be filed with the work order-giving Agency. A consent letter to be obtained from them that they will issue all cheques in payment of bills against the work order favoring the Bank A/C the customer as per the power of attorney. Storage of pledge goods in Banks godown (as the case may be) under proper security and the same duly insured. Insurance Policies covering risks as per sanction terms & conditions. Charge documents as per sanction letter. Ostentation of certified copies of Blue Book/Registration Certificate, Route Permit, Tax Token, Fitness Certificate, Insurance Policy in respect of vehicles finance. Procurement of post-dated cheques against installments of loans/HirePurchase/Lease /CCS (as the case may be). Satisfaction certificate of the lawyer in respect of all documentation both banking & legal. The Branch Managers should show all the legal & charge documents to their lawyer & obtains their certificate that documents have been completed as per sanction terms & are in order for extending the facility. Entry has been made in the Safe-in and Safe-out Register and the documents are preserved under joint custody of the 2nd man/ Incharge of the Credit Dept./ F. Ex. Dept.

3.08. Securities: To make the loan secured, charging sufficient security on the credit facilities is very important. The banker cannot afford to take the risk of non-recovery of the money lent. PBL charges the following two types of security, ) Primary security: These are the security taken by the ownership of the items for which bank provides the facility.

 ) Collateral security: Collateral securities refer to the securities deposited by the third party to secure the advance for the borrower in narrow sense. In wider sense, it denotes any type of security on which the bank has a personal right of action on the debtor in respect of the advance Modes of Charging Security: There are different modes of charging security are exercised by the bank: 1 Pledge: 1 Pledge is the bailment of the goods as security for payment of a debt or performance of a promise. A pledge may be in respect of goods including stocks and share as well as documents of title to goods such as railway receipt, bills of lading, dock warrants etc. duly endorsed in banks favor. 1 Hypothecation: 1 In case of hypothecation, the possession and the ownership of the goods both rest the borrower. The borrower to the banker creates an equitable charge on the security. The borrower does this by executing a document known as Agreement of Hypothecation in favor of the lending bank.

1 Lien: 1 Lien is the right of the banker to retain the goods of the borrower until the loan is repaid. The bankers lien is general lien. A banker can retain all securities in his possession till all claims against the concern person are satisfied. 1 Mortgage: 1 According to section (58) of the Transfer of Property Act,1882 mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan,

existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. In this case the mortgagor does not transfer the ownership of the specific immovable property to the mortgagee, only transfers some of his rights as an owner. The banker exercises the equitable mortgage. 3.09. Documentation: Documentation can be described as the process or technique of obtaining the relevant documents. In spite of the fact that banker lends credit to a borrower after inquiring about the character, capacity and capital of the borrower, he must obtain proper documents executed from the borrower to protect him against willful defaults. Moreover, when money is lent against some security of some assets, the document must be executed in order to give the banker a legal and binding charge against those assets. Documents contain the precise terms of granting loans and they serve as important evidence in the law courts if the circumstances so desire. Thats why all approval procedure and proper documentation shall be completed prior to the disbursement of the facilities.

Charge Documents: Deficiency Following charge documents are necessary while giving loans.

Letter of guarantee: This is a document given by the proprietor, directors or the third party in favor of the principal debtor. The beneficiary of this document is the bank. Surety is bound to pay the guaranteed amount if such situation arises. Counter guarantee:

The principal debtor agreeing that if the guarantor pays any amount, the principal debtor is bound to pay this amount gives this guarantee. Letter of authority: BY this letter, the principal debtor gives the authority to the bank to debit the current account or investment account of the principal debtor for the following cases: i. ii. iii. iv. Wages of the godwon keeper and godwon guard. Rent of the godwon. Insurance premium and Any other expenses regarding these functions.

Letter of recall the loan: This letter is given to the bank by the borrower, giving the bank the right of recalling the loan amount at any time if the borrower fails to repay any one of the installments. And the borrower can not protest such recalling.

Letter of continuity: By this letter, the borrower agrees that the promissory note given by the bank will be act as security for the repayment of the ultimate balance or sum remaining unpaid on account of the overdraft or advance. Letter of revival: By this letter, the borrower agrees that he will be liable to bank for payment of the promissory note with interest in respect of all present and future indebtedness liabilities secured thereby which promissory note is to remain in force with all relative securities, agreements and obligations.

Joint promissory note: This promissory note is given to the bank by the borrower if the borrowers are more than one person. Single promissory note: The borrower to the bank gives this promissory note if the borrower is a single person. Letter of undertaking: This document is given to the banker by the borrower acknowledging the right to cancel the facility at any time with or without intimation to the borrower.

Loan disbursement letter: By this letter, the borrower request to disburse the loan sanctioned in his favor by the bank. All the persons, in whose names the account is opened, should sign the letter. Charge over bonds or certificate of shares etc.: It is a document given by the borrower to the banker declaring that the stocks, shares, debentures, securities and investments which are now deposited to the bank and which may from time to time be deposited by the borrower shall stand charged and hypothecated to bank as security for the payment to bank on demand of the balance of the loan amount and of any other indebtedness and liability to the bank of any kind whether mature or

accruing and whether incurred alone or jointly with others and whether as principal or surety including all interest document, commission, expenses, charges and costs incurred by the bank in relation any such indebtedness or liability. Letter of lien against fixed deposit receipt: By this letter, the borrower gives the right to the bank to hold the Fixed Deposit Receipt (FDR) if the borrower fails to repay or adjust the loan on demand or discharge the liabilities to bank. In this letter, FDR number, issuing branch, name of the favoring person and amount are written. Letter of authority to encash FDR: By this letter, the borrower gives the right to bank to encash the FDR in case of need. Here the amount and address of the bank of issue and the signature of the holders are given. Memorandum of deposit of title deeds: It is a deed that is necessary in case of mortgage by deposit of title deed or equitable mortgage. Here the mortgagor agrees that he has deposited necessary documents of the property to the bank. Hypothecation of goods to secured a demand cash credit or overdraft or loan account: Here the amount of loan, interest, and the name of the borrowers are written. Here the bank and the borrowers agree on the following terms: Security Balance due to the bank

 Borrowers not to the encumber or parts of the goods Sale Inspection Insurance Margin Interest rate Repayment Sale of goods Surplus Statement of account Continuing security Title Saving Change of borrowers and Notices. Guarantee by third party: Sometimes third party guarantee is needed for allowing loan. Here third party gives the guarantee that of the principal debtor fails to repay the loan, and then the guarantor will be bound to repay the loan to bank. Hypothecation of vehicle: This document is necessary in case of transport loan. Here the borrower hypothecat hypothecated the vehicle to the bank. In case of failure of repay the loan, bank will sell the vehicle to collect the money. 3.10. Loan Schemes Offered By PBL:

Consumer Credit Scheme General Loan Scheme Lease Finance Small and Medium Enterprise House Building/Apartment Loan Scheme

3.11 Emphasis on SME & Personal Loan SME & Personal loan are the most potential sectors for expansion of loan. There is ample scope to enhance credit in this sector. So far this sectors were almost unattended by Banks since they generally cannot provide collaterals for the Credit facilities. So access to Banks credit is important for them. Bank has some advantages of extending credit facilities in this sector, Rate of return is generally higher than Corporate/ Large loans. Their bargaining power for pricing is low. The loan amount is small. So the Banks worry for default is low compared to large loans. The portfolio is diversified. If monitoring & supervision can be ensured, the recovery can be maintained at satisfactory level.

Their growth rate is comparatively much higher than the corporate market. Moreover, higher margin lower bargaining power of customer, low risk has made this sector more advantageous over corporate lending. International Division (ID): This division is responsible for monitoring and supervising the foreign exchange dealings of the bank. It performs the following functions:

Making guidelines and frameworks for foreign dealings complying the rules of Bangladesh Bank Circulating instructions of Bangladesh Bank Maintaining correspondence with foreign banks and exchange houses with which it has exchange arrangement Maintaining NOSTRO accounts with banks in abroad Fixing and sending foreign exchange rates to Authorized Dealer (AD) branches and Bangladesh Bank as follows:

3.12 Pioneer of Retail Credit Prime Bank is the pioneer of retail credit and introduced first ever in Bangladesh in the year 1995. It has gain popularity within every short span of time due to its smaller amount of loan than general credit. This is why even the limited income people have huge access in this loan. It has already proved it self as one of the most profitable credit sector in Prime Bank and following the step of Prime Bank others Bank are also launching Retail product. Definition One of the credit, which is extended to people having fixed but regular income for acquiring consumer durables and other purpose for satisfying personal needs

Possibility Retail lending is one of the core businesses for Prime Bank Limited and has been targeted for significant further growth. This reflects potential of retail lending to produce high levels of economic profit and perceived demographic trends toward an expended middle class and higher income levels.

Mission Prime Bank is a conservative lender in retail credit as part of its corporate philosophy. However, conservatism does not mean simply minimizing bad debts, but incorporates the concept of lending against acceptable risk. The Banks overriding goal is not only to increase total shareholder return but also to contribute to the socio economy by improving the life style of the limited income segment of the country Vision The goal of retail credit can be best achieved optimizing profits, rather than just minimizing losses. Profit optimization will follow from: o Good planning and control of approval process o Well designed products with appropriately focused marketing o The use of statistical techniques and decision support systems that permit risks to be managed predictably o Gathering high quality management information, which is then read and used. Factors Asset quality is generally expected to be higher in personal lending than corporate lending due to variety of factors including: Diversification of risk Security

Cultural values

The increasing need for individuals to have access to bank credit for the conduct of normal daily activities.

Fundamental of policies Fundamentally, credit policies and procedures can never sufficiently capture all the complexities of the product. Therefore, the following credit principals are the ultimate reference points for all concerned executives & staffmarking consumer financing decisions. The customers character for integrity and willingness to repay are assessed. Only lend when the customer has capacity and ability to repay are examined thoroughly. Bank only extends credit if it can sufficiently understand and manage the risk. Should use common sense and past experience in conjunction with thorough evaluation and credit analysis are used. Bank never base decisions solely on customers reputation, accepted practice, other lenders risk assessment or the recommendations of other officers. Being proactive in identifying, managing and communicating credit risk is essential. Be diligent in ensuring that credit exposures and activities comply with the requirement set out in Product Program Guidelines. Objective To improve living standard of limited income segment by providing collateral free easy credit To take part in the Scio-economic development of the country To ensure access to credit by mass people To diversify lone portfolio to minimize risk To maximize bank profit as well as to minimize pressure on liquidity through quicker recycling but higher yielding loan operation

3.13 Target marketing of retail banking Confirmed officers of Government. Non- Government organization / institute, semi- Government, Autonomous bodies & Corporation. Professional, Business Executive and self employed persons who have regular monthly income with repayment capacity. Any other individual where the monthly installment size shall not exceed one third of their take home income.

3.14 Types of Product: Eleven types of products are in Prime Bank Facilities Tower under Retail Credit. 1. 2. 3. 4. 5. 6. 7. 8. 9. Car Loan Household Durable Loans Any Purpose Loan Doctors Loan Marriage Loan Education Loan Advance Against Salary Travel Loan Hospitalization Loan

10. CNG Conversion Loan 11. Swapna Neer 3.15 Retail banking operation Good planning and control of approval process Well designed products with appropriately focused marketing

The use statistical techniques and decision support systems that permit risk to be managed predictable Gathering high quality management information, which is then read and used

Risk management cycle consists of six steps: Planning products and risk management controls Acquiring accounts Maintaining account and managing credit quality Collecting delinquencies Writing off bad debts Evaluating performance and refining plans control

3.16 Borrower selection Selecting borrower is a very crucial fact as there are subject of moral hazard and adverse selection problem. Therefore banker has to be very careful regarding lending money. In order to overcome these problems the following points should be used as: Assess the customers character for integrating and willingness to repay Only lend when customer has capacity and ability to repay Only extend credit if bank can sufficiently understand and manage the risk Use common sense and past experience in conjunction with through Do not base decision solely on customers reputation, accepted practice, other lenders risk assessment or the recommendations of other officers Be proactive in identifying, managing and communicating credit risk

Be diligent in ensuring that credit exposures and actives comply with the requirement set out in product program guideline

3.17 Credit Assessment and approval Regarding lending it should be gathered all necessary information of borrowers so that loan cant be default. In order to solve this problem following rules should be applied.

Each credit Assessment must: Be based on the sound ethical practices, which are consistent with all banking rules and legislation Application: Telephone and address contact details Employment/ business details Income details Income and expenditure statement Personal net worth statement Residence details Credit reference and guarantors details

Assessment Methods Credit scoring matrix Judgmental decision

Credit scoring Credit scoring is a method used for predicting creditworthiness of applications. This scoring is based on the concept that applicants will perform in similar way to existing customers with a similar demographic profile. Credit risk management The credit risk is managed by the retail credit assessment unit which is completely segregated from sales Loans will be given only after verification of customers static data and repayment capacity Every loan will be secured by hypothecation over the asset financed and customers authority taken for re-possession of the asset in case of default situation. The approval system is parameter driven which will substantially eliminate the subjective part of the assessment procedures The credit and collection activities will be managed centrally and loan approval authorities will be controlled centrally where the branch managers of sales people will have no involvement

Operational risk Credit administration unit will manage the following aspect of the product a. Input, approvals, customer file maintenance b. The operation jobs like disbursal in the system including raising debit standing orders and the lodgment and maintenance of securities.

Credit Committee of this Branch

Credit Committee is consisting with six members: 1. Manager (Chairman) 2. Second man 3. Foreign exchange In charge 4. General Credit In charge 5. General Banking In charge 6. Retail Credit In charge (Member Secretary)\ Procedure Application Information / Verification Assessment Pledge in the Committee Approval Sanction Disbursement

Charge Documents Charge documents is an important part regarding lending Demand promissory note Letter of Authority Letter of Installment Letter of Guarantee Letter of Disbursement Letter of Hypothecation Letter of Revival Letter of Agreement Loan agreement under CCS

FOREIGN EXCHANGE

3.18 Exchange rate and management system

Exchange rate management system is the principle of fixing price of a currency in terms of another. The exchange rate can be viewed as the result of the interaction of the forces of supply any demand for the foreign currency in any particular period of time. Broadly exchange rate management system can divide into three groups.

1. Fixed exchange rate system 2. Floating exchange rate system 3. Hybrid exchange rate system

Fixed exchange rate system The term fixed exchange rate system refers to a system that permits only very small, if any deviations from officially declared currency value. A point made in favor of fixed exchange rate is that is that such a system provides for the discipline needed in economic policy to prevent continuing inflation.

Floating exchange rate system By floating exchange rates we mean rates that are completely free to vary, that is the foreign market is cleared at all times by exchange in the exchange rate. Under the system, exchange rate of a currency is determined and supply factor.

Hybrid exchange rate system

Hybrid exchange rate system refer to adjustable pegs, crawling pegs and managed floating all of whish combine various characteristics of fixed and floating exchange rate system. Export Section: Creation of wealth in any country depends on the expansion of production and increasing participation in international trade. By increasing production in the export sector we can improve the employment level of such a highly populated country like Bangladesh. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are the main goods that Bangladeshi exporters export to foreign countries. Garments sector is the largest sector that exports the lion share of the country's export. Bangladesh exports most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export through PBL are readymade garments exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers. Export L/C operation is just reverse of the import L/C operation. For exporting goods by the local exporter, bank may act as advising banks and collecting bank (negotiable bank) for the exporter.

3.19 Export Policy: Export policies formulated by the Ministry of Commerce, GOB provide the overall guideline and incentives for promotion of exports in Bangladesh. Export policies also set out commodity-wise annual target. It has been decided to formulate these policies to cover a five-year period to make them contemporaneous with the five-year plans and to provide the policy regime.

The export-oriented private sector, through their representative bodies and chambers are consulted in the formulation of export policies and are also represented in the various export promotion bodies set up by the government. 3.19.01. Export Incentives: . Financial Incentives: Restructuring of Export Credit Guarantee Scheme; Convertibility of Taka in current account; Exporters can deposit 40% of FOB value of their export earnings in own accounts in dollar and pound sterling; Export Development Fund; Expansion of export credit period from 180 days to 270 days; 50% tax rebate on export earnings; Duty draw back; Bonded warehouse facilities to 100% export oriented firms; Duty free import of capital equipment for 100% export oriented firms; . General Incentives: National Export Trophy to successful exporters; Training course on external trade; Arrangement of international trade fairs, commodity-based exhibitions in the country and participation in foreign trade fairs; . Other Incentives: Assistance in improvement of quality and packaging of exportable items; Simplification of export procedures;

3.19.02 Export Procedures:

The import and export trade in our country are regulated by the Import and Export (Control) Act, 1950.Under the export policy of Bangladesh the exporter has to get valid Export registration Certificate (ERC) from Chief Controller of Import & Export (CCI&E). The ERC is required to renew every year. The ERC number is to incorporate on EXP forms and other papers connected with exports.

(a) Registration of Exporters: For obtaining ERC, intending Bangladeshi exporters are required to apply to the controller/ Joint Controller/ Deputy Controller/ Assistant Controller of Imports and Exports, Dhaka/ Chittagong/ Rajshahi/ Mymensingh/ Sylhet/ Comilla/ Barishal/ Bogra/ Rangpur/ Dinajpur in the prescribed form along with the following documents:

1 Nationality and Assets Certificate; 1 Memorandum and Article of Association and Certificate of Incorporation in case of Limited Company; 1 Bank Certificate; 1 Income Tax Certificate; 1 Trade License etc.

(b) Securing the Order: After getting ERC Certificate the exporter may proceed to secure the export order. He can do this by contacting the buyers directly or through agent.

In this purpose the exporter may get help from: 1 License Officer;

1 Buyers Local Agent; 1 Export Promoting Organization; 1 Bangladesh Mission Abroad; 1 Chamber of Commerce (local & foreign) 1 Trade Fair etc.

(c) Signing the Contract: After communicating buyer, exporter has to get contracted (writing or oral) for exporting exportable items from Bangladesh detailing commodity, quantity, price, shipment, insurance and marks, inspection and arbitration etc.

(d) Receiving Letter of Credit: After getting contract for sale, exporter should ask the buyer for Letter of Credit (L/C) clearly stating terms and conditions of export and payment.

The following are the main points to be looked into for receiving/ collecting export proceeds by means of Documentary Credit:

(1)The terms of the L/C are in conformity with those of the contract; (2)The L/C is an irrevocable one, preferably confirmed by the advising bank; (3)The L/C allows sufficient time for shipment and negotiation. (Here the regulatory framework is UCPDC-500, ICC publication)

Terms and conditions should be stated in the contract clearly in case of other mode of payment:

Cash in advance; Open account; Collection basis (Documentary/ Clean)

(Here the regulatory framework is URC-525, ICC publication)

(e) Procuring the materials: After making the deal and on having the L/C opened in his favor, the next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise.

(f) Shipment of goods: Then the exporter should take the preparation for export arrangement for delivery of goods as per L/C and incoterms, prepare and submit shipping documents for Payment/ Acceptance/ Negotiation in due time. Documents for shipment: 1 1 1 1 1 1 1 1 1 1 1 1 EXP form, ERC (valid), L/C copy, Customer Duty Certificate, Shipping Instruction, Transport Documents, Insurance Documents, Invoice, Other Documents, Bills of Exchange (if required) Certificate of Origin, Inspection Certificate,

1 1 1

Quality Control Certificate, G.S.P. Certificate, Phyto-sanitary Certificate.

(g)Final Step: Submit the documents to the Bank for negotiation. 3.20 Import procedures 1. Procurement of IRC from the concern authority 2. Signing purchase contract with the seller. 3. Requesting the concerned bank on behalf of the importer favoring the exporter 4. The issuing bank opens the LC in accordance with the instruction of the importer and request another bank located in exporter country to advice the L/C to the beneficiary. The issuing bank may also request the advising bank to confirm the credit, if necessary. 5. The advising bank advises the seller that the L/C has been issued. 6. As soon the exporter receives the L/C and is satisfied that he can meet the L/Cs terms and conditions, he is in a position to make shipment of the goods. 7. After making shipment of goods in favor of the importer the exporter submits the documents to the negotiating bank for negotiation. 8. The negotiating bank scrutinizes the documents and if found o.k. negotiates the documents and sends the said documents to the L/C issuing bank 9. After receiving the documents the L/C issuing bank also examines the documents and if found o.k. makes payment to the negotiating bank. 10. The L/C opening bank then requests the importer to receive the documents on payments.

11.

The importer after paying all dues receives all the documents

from the L/C issuing bank and then release the imported goods form the port authority 3.21 Letter of credit Letter of credit can be defined as a Credit contract whereby the buyers bank is committed to place an agreed amount of money at the sellers disposal under some agreed conditions.

Documentary credits may be either: i) ii) Revocable Irrevocable

Revocable Credit A revocable is a credit, which can be amended or canceled by the issuing bank at any time without prior notice to the seller. Irrevocable Credit An irrevocable credit constitutes a definite undertaking of the issuing bank, provided that stipulated documents are presented and the term of the seller satisfies conditions. An irrevocable credit can be either confirmed or unconfirmed depending on the desire of the seller. This sort of credit is always preferred to revocable letter of credit. 3.22 Special Documentary Credit a) Revolving Credit b) Transferable credit c) Bank to bank credit d) Anticipatory credits e) Parties to a letter of credit

f) Operations of documentary letter of credit

3.23 Foreign remittance Foreign remittance means remittance of foreign currencies from one place/person to another place/person. Generally it does not include sale and purchase of foreign currencies on account of import and export. All foreign remittance transactions are grouped into two broad categories: a) Outward Remittance b) Inward Remittance Discussion on outward remittance Outward remittance mainly include, sale of foreign currency by T.T., M.T., Drafts, and Travelers cheque. In the case of outward remittance T.M. form is used. Outward remittance is of different types: a) Private Remittance b) Official & Business Travel-related Remittance c) Commercial Remittance Account Procedure for Outward Remittance: a) Issuance of Travelers Cheque b) Issuance of Drafts, T.T. c) Issuance of F.C Note Types of foreign currency A/C According to guidelines for foreign exchange transactions A.Ds may follow types of FC accounts without prior permission of Bangladesh Bank: 1) Private Foreign Currency Accounts

2) Non-Resident Foreign Currency Deposit (NFCD) Account 3) Resident Foreign Currency Deposit (RFCD) Account Private Foreign Currency Accounts Private Foreign Currency Accounts may be opened in the names of: o Bangladeshi nationals residing abroad o Foreign nationals residing abroad or in Bangladesh o Foreign firms registered abroad and operating in Bangladesh or abroad Non-Resident Foreign Currency Deposit (NFCD) Account All non-resident Bangladesh nationals and person of Bangladesh origin including those having dual nationality and ordinarily residing abroad may maintain interest bearing time deposits named Non-Resident foreign Currency Deposit Account with the Ads. Resident Foreign Currency Deposit (RFCD) Account Resident Bangladeshi may maintain RFCD Accounts with origin exchange brought in at the time of their return to Bangladesh from visits abroad.

General Banking Services of Prime Bank Limited When we decided to perform as an intern and selected by PBL, I had been placed in the General Banking Department for whole time of my internee. Several activities are performed here. I have prepared this report based on this department. So this is the core part of this report.

3.24 Area of Operations: General Banking department performs the majority functions of a bank. It is the core department of PBL like other commercial banks. In fact, bank operates with the peoples money. And this process starts with the General Banking Department. The activities of the General Banking Department of PBL are mainly divided into the following categories:

Account Opening Section, Local Remittance Section, Online Branch Banking Section, One Stop Utility Services Section, Deposit Schemes Section, Clearing Section, Collection Section, Cash Section, Accounts Section,

Account Opening Section: To establish a Banker and customer relationship Account opening is the first step. Opening of an account binds the Banker and customer into contractual relationship. But selection of customer for opening an account is very crucial for a Bank. Indeed, fraud and forgery of all kinds start by opening account. So, the Bank takes extremely cautious measure in its selection of customers.

3.25 Types of Account: Current Account.

Savings Account. Fixed Deposit Account.

Procedure to open an Account: For opening an account, at first the prospective account holder will apply for opening an account by filling up account opening form. Account opening form consists of the name of the branch, type of account, name of the applicant(s), present address, permanent address, passport number (if any), date of birth, nationality, occupation, nominee(s), special instruction (if any), initial deposit, specimen signature(s) of the applicant(s), introducers information etc. The prospective customer should be properly introduced by the followings: i. ii. Officer. iii. A respectable person of the locality who is well known to the Manager or authorized officer. Two copies of passport size photograph duly attested by the introducer. Signature of the prospective account holder in the account opening form and on the specimen signature card duly attested by the introducer. Then the concerned authority will allocate a number for the new account. An existing customer of the bank. Officials of the bank not below the rank of Assistant

The customer then deposit the initial deposit by filling up a deposit slips. Initial deposit to open a current account in PBL is Tk. 1000.00 and saving account is Tk. 100.00.

After depositing the initial deposit, the account is considered to be opened. PBL maintains all of its accounts in computer. After depositing the initial deposit, PBL records it in the computer by giving new account number. Then it issues chequebook requisition slip by the customer. Then it distributes all relevant papers to respective department.

Activities and Papers Necessary for Opening an Account: (A) Joint Account: If the account is a joint account, then the joint account holder should submit a declaration and operational instructions of the account along with their signature. The declaration is Any balance to the credit of the account is and shall be owned by us as joint depositors. Any liability whatsoever incurred in respect of this account shall be joint and several. (B) Partnership firm:

The following documents have to be submitted for preparing an account of a partnership firm: Partnership deed. (a) If the partnership firm is a registered one, then one copy

of registration forms. (b) If not, then a copy of certificate from the notary public. (C) Limited Company:

For the opening of an account of a limited company, following documents have to be submitted: A copy of resolution of the company that the company Certified true copy of the Memorandum & Articles of Certificate of Incorporation of the company for inspection

decided to open an account in the Prime Bank. Association of the Company. and return along with a duly certified Photocopy for Banks records. Certificate from the Registrar of Joint Stock Companies that for inspection and return) along with a duly certified the company is entitled to commence business (in case of Public Ltd. Co. Photocopy for Banks records. Latest copy of balance sheet. Extract of Resolution of the Board/General Meeting of the

company for opening the account and authorization for its operation duly certified by the Chairman/Managing Director of the company. vii) List of Directors with address (a latest certified copy of Form-XII) (D)Club/Society: Following documents have to be obtained in case of the account of the club or society: Up to date list of office bearers. Certified copy of Resolution for opening and operation of Certified copy of Byelaw and Regulations/Constitution. Copy of Government Approval (if registered).

account.

(E) Cooperative Society:

Following documents have to be obtained in case of the account of Cooperative Society: Copy of Bye-Law duly certified by the Co-operative Officer. Up to date list of office bearers. Resolution of the Executive Committee as regard of the Certified copy of Certificate of Registration issued by the

account. registrar, Co-operative societies.

(F)

Non-Govt. College / School / Madrasha / Muktab:

Following documents have to be obtained in case of the account of non-govt. college / school / madrasha / muktab: Up-to-date list of Governing Body/Managing Committee. Copy of Resolution of the Governing Body/Managing

Committee authorising opening and operation of the account duly certified by Gazetted Officer.

(G) Trustee Board:

Following documents have to be obtained in case of the account of trustee board: Prior approval of the Head Office of PBL. Certified copy of Deed of Trust, up to date list of members

of the Trustee Board and certified copy of the Resolution of Trustee Board to open and operate the account.

(H) Minors Account:

Following documents have to be obtained in case of the account of minor: Putting the word MINOR after the title of the account. Recording of the special instruction of operation of the The AOF is to be filled in and signed by either the parents

account. or the legal guardian appointed by the court of law and not by the minor.

Telegraphic Transfer (TT): It is an order from the issuing branch to the drawer bank / branch for payment of a certain sum of money to the beneficiary. The payment instruction is sent by telex and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no account is maintained with the drawee branch.

Procedure of issuing TT: Following procedures are followed while issuing of TT: The applicant fills up the relevant parts of the prescribed application form in triplicate, duly signed the same and gives it to the GB. GB will fill up the commission part for banks use and request the applicant to deposit necessary cash or cheque at the cash booth. GB will prepare telex in appropriate form, sign it and send it to the telex operator for transmission of the message. GB will prepare necessary advice. Debit advice is sent to the client if clients account is debited for the amount of T.T. T.T. Confirmation Advice is sent to the drawer branch. Credit Ticket (second copy of the application form) is used to credit the PBL General Account. The first copy of the application form will be treated as Debit Ticket while the second copy will be treated as Credit Ticket. The third copy will be handed over to the applicant as customers copy. Demand Draft (DD): Sometimes customers use demand draft for the transfer of money from one place to another. For getting a demand draft, customer has to fill up an application form. The form contains date, name and address of the

applicant, signature of the applicant, cheque number (if cheque is given for issuing the DD), draft number, name of the payee, name of the branch on which the DD will be drawn and the amount of the DD. The form will be duly signed by the applicant and by the authorized officer. PBL charges .15% commission on the face value of DD as service charge. 3.26 Deposit Schemes of Prime Bank Limited: Bank is the largest organization of mobilizing surplus domestic savings. For poverty alleviation, we need self-employment, for self-employment we need investment and for investment we need savings. In the other words, savings help capital formations and the capital formations help investments in the country. The investment in its turn helps industrialization leading towards creation of wealth of the country. And the wealth finally takes the country on road to progress and prosperity. As such, savings is considered the very basis of prosperity of the country. The more the growth of savings, the more will be the prosperity of the nation. The savings rate in Bangladesh is one of the lowest in the world rate of domestic saving being 17.78 %. In order to improve the savings rate, Financial Institutions responsible for mobilization of savings should offer attractive Savings Schemes so that the marginal propensity to save increases. The savings do not, of course, depend only on the quantum of income but largely depend on the habit of savings of the people. PBL has formulated the following Savings Schemes: Contributory Savings Scheme, Monthly Benefit Deposit Scheme, Special Deposit Scheme, Education Savings Scheme, Fixed Deposit Scheme, Prime Bank Money Scheme,

 Prime Bank Insured Fixed Deposit Scheme.

Comforts, Concerns, Opportunities and Challenges (CCOC): Before drawing down strategies, it is a prerogative that it is necessary to review different concerns of Prime Bank on the basis of the performance and operational practice in face of the current business situation focusing on Comfort, Concern, Opportunity and Challenge perspectives. This is an analog of TOWS (as treated by AMA-American Marketing Association) analysis. The following is a snap-short of CCOC analysis for Prime Bank. comforts 1. Satisfactory financial performance 2. Good operating efficiency 3. Good asset quality 4. Good capital adequacy 5. Sound liquidity position 6. Diversified product lines 7. Experienced top management 8. satisfactory non funded business 9. Good market disclosure 10. Countrywide branch network opportunities Basel II compliance to tap advantage Investment in RMG, agrobased, SME & retail business Online banking products and services Dual Currency Credit Card Opportunity in remittance business (fall behind the national average 32.4%) concerns 1. Increasing trend of NPL 2. Dependence of term deposit 3. Increasing cost of fund in line with the market. 4. moderate capital adequacy 5. IT infrastructure is in a stage of graduation 6. Moderate liquidity, deposit centric fund management 7. Islamic branches funds not ring fenced 8. SME business is in infancy. 9. Lack in inter-departmental coordination. 10. Absence of Financial Derivative Products challenges 1. Market pressure for narrow down spread 2. Market pressure to increase capital base 3. Implementation of Basel II 4. Competitive deposit market 5. Presence of foreign commercial banks 6. Problem in fund management due to green

1. 2. 3. 4. 5.

6. Government favorable policy for Export processing industries which help the Bank to do Off shore Banking as well as credit business.

back crisis 7. Free trade regime is ahead 8. Double digit inflation

Policy Stances for Prime Bank Limited- Corporate: To meet the challenges of the coming year a set of Policy or Guiding

Directives have been prepared which would address the aforementioned rising issues and help to maintain the years of achievement and success. The strategies are stated below. Deposit Mobilization Strategies: Mobilization of low and no cost deposits. Opening a new horizon of regular non interest/Fee Based Income (NII) Share of saving deposits should be increased to 12% Improve deposit mix. Share of interest rate sensitive FDR should come down to below 50% Scheme deposits are preferred to FDR but not at the cost of no and low cost deposits Bring down the Cost of Fund (COF) at least by 0.50% and Interest on deposit should not exceed 8.00%. Introduction of liability product with interest on daily outstanding with bonus facility Engage DSE (Direct Sales Executive) for mobilizing No and low cost deposit. Take necessary initiatives to open more NRT accounts.

Lending Strategies:

Corporate lending would not exceed 75% of total loans and advance. As means of risk diversification SME and retail loans should be more focused. Comply with regulatory requirements i.e. Single borrower exposure would not exceed 15% of total capital for funded credit, whereas for both funded and non funded credit this ratio will not cross 35% of the total capital.

For the loans above 30 crores, syndication and club financing should be preferred. Pricing of loans and advance should be flexible, charged on case to case basis. Various fees and commission will be reviewed periodically to ensure operational profitability NPL ratio should be within 1% of total loans and advance Target of branches of retail and SME during 2009 must be 15% and 10% respectively. Introduction of asset products like Small Business Loan, ISO certification loan, ETP Loan, Business Expansion Loan. To increase the spread through diversification of SME and retail portfolio Flexible credit policy to adopt the changes due to macroeconomic condition.

Customer Relationship Management: Separate revenue budget and achievement for corporate, retail, SME. These will be further breakdown to client wise for corporate and product wise for retail. Clients required to be grouped in sector wise and industry wise

Fee income also to be clubbed as sector, industry and product wise. Introduce Premium/Privileged/Royal banking.

Exploratory investigation suggests that, within most service industries, consumers use basically similar criteria in evaluating service quality. These criteria seem to fall into 10 key categories labeled "service quality determinants". These determinants are listed below. Overlap among the 10 determinants may exist. Determinants of Service Quality 1 RELIABILITY involves consistency of performance and dependability. 2 RESPONSIVENESS concerns the willingness or readiness of employees to provide service. It also involves timeliness of service. 3 COMPETENCE means possession of the required skills and knowledge to perform the service. 4 ACCESS involves approachability and ease of contact. 5 COURTESY involves politeness, respect, consideration, and friendliness of contact personnel. 6 COMMUNICATION means keeping customers informed in language they can understand and listening to them. It may mean that the company has to adjust its language for different consumers increasing the level of sophistication with a welleducated customer and speaking simply and plainly with a novice. 7 CREDIBILITY involves trustworthiness, believability, and honesty. It involves having the customer's best interests at heart. 8 SECURITY is the freedom from danger, risk, or doubt. 9 UNDERSTANDING/KNOWING THE CUSTOMER involves making the effort to understand the customer's needs.

10 TANGIBLES includes the physical environment and representations of the service. Research in other service industries indicates consumers "group" a wide array of attributes of service under one of the 10 dimensions noted when judging service quality. However, this research is preliminary and also suggests that it is advisable to determine, within the industry of study, whether identifiable service quality segments exist and whether, and in what ways, consumer expectations differ across industry segments. Investigating how transit customers aggregate attributes of service into collapsed quality dimensions is important to understanding how customer satisfaction should be measured within an industry. Regardless of what eventual quantitative analytical approaches are used, the process must begin with acquiring a list of service attributes from the customers, through an exhaustive "listening to the voice of the customer" process. This qualitative research is usually conducted through a series of focus groups. Customers are requested to describe the ideal service or product in all of its feature details. Then customers are asked to list their basic service or product requirements, starting with primary requirements and continuing through the secondary and tertiary components of each of these requirements. The moderator proceeds until the group has exhausted all the possible attributes of service quality they would consider. This process is repeated at multiple geographic and customer segment sites and the results are combined and itemized into a full and complete attribute listing. The wording of the attributes is refined for clarity and linkage with expected results. For example, "frequent service so that wait times are short". (Or if further quantification is desirable: "frequent service so that wait times do not exceed 15 minutes".) This process usually results in a listing of 40 to 55 defined attributes of transit service that can be rated by customers.

4.01. STRATEGIC MARKETING:

Strategic marketing plays a pivotal role in business performance. It examines the concept and processes involved in market driven strategies. Strategic marketing is a market driven process of strategy development that takes into account a constantly changing business environment and the need to achieve high levels of customer satisfaction.

4.02. GLOBAL MARKETING:

Now a day all businesses are global oriented in terms of scope and nature. Global positioning is a corporate vision of any business in the age of globalization. Global marketing is the process of focusing an organizations resources on the selection and exploitation of global market opportunities consistent with and supportive of its short term and long-term strategic objectives and goals.

4.03 PS REGARDING MARKETING:

Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. But in case of Banking Marketing mix is larger than ordinary product marketing.

These are:

Product: Product means the goods and services combination the company offers to the target market. For example banking ideas, services or Deposit schemes.

Price: Price is the amount of money customer has to pay to obtain the product. For example: Bank service charge, interest rate etc.

Product

Price

Place

Target
Market/
Customer

Promotion

Packaging

Policies

Public Relation People Politics

Process

Physical evidence

Fig: Ps relating to Bank Business

Place: Place includes company activities that make the product available to the target consumers. For example: PBL Gulshan Branch is located in near inhabitants of Gulshan and besides area. Promotion: Promotion means activities that communicate the merits of the product and persuade target customers to buy it. For example: PBL, 8th anniversary program.

Packaging: Packaging is a powerful element of present marketing. The emphasis on packaging is a focal consideration of Marketologists. Packaging regarding PBL is different type of brochures and nice decoration of Branch.

Public Relation: This is the age of media public relation refers the communication through different type of seminar, symposium, conference etc. with target customers. PBL usually does it in a great extent.

Policies: Policies is the life blood of any bank. A policy refers the principle, Procedures, ways relevant to different type of banking activities. Policies should be flexible and contingent upon situation.

 Process: Process is almost similar to policy. But the difference is the way of recovery like loan and advance, legal action, problem solution etc. are involved with banking process.

Politics: In the third world country politics is the wheel of business. The rules and regulations of business are continuously changing as per the change of Government. So politics is a alarming tool of every business.

4.05. MARKETING ENVIRONMENT:

To ensure any business marketing environment is essential. The marketing environment consists of task environment and broad environment. The task environment includes the immediate actions involved in producing, distributing and promoting the offering. The broad environment consists of six components: demographic environment, economic environment, natural environment, technological environment, political legal environment and social-cultural environment.

4.06. MARKETING FOR SERVICE ORGANIZATION (LIKE BANK).

Every Business is a service business you are not a chemical company you are a chemical services business (Philip Kotler). Basically three types of Marketing exist in service organization.

Internal Marketing: Marketing by service firm to train and effectively motivate its customercontact employees and all the supporting service people to work as a team to provide customer satisfaction.

Company

External Internal Marketing Marketing

Cleaning Maintenance Service

Restaurant Industry Fina

Employees

Interactive

Customer

Marketing
Fig: Three Type of Marketing in Service Industries.

Interactive Marketing: marketing by a service firm that recognizes that perceived service quality depends heavily or the quality of buyer seller interaction.

Internal Marketing: Internal marketing describes the normal work to prepare price, distribute and promote the service to customers. Generally service companies face three task: 1.Competitive differentiation; 2.Service quality; and 3.Productivity.

4.07. FIVE STAGES OF BANK MARKETING:

Bank Marketing has undergone five stages. Initially marketing was thought to be advertising, Sales promotion and publicity. Soon came the phase of smiling and friendly atmosphere. The stages are described below:

Marketing is advertising, Sales promotion and publicity:

Marketing came in to banks in the late 1950s, not in the form of he marketing concept but in the form of the advertising and promotion concept. Banks and other financial institutions were experiencing increased competition for savings. A few financial institutions decided to adopt the marketing weapons of he soap companies.

They increased their budgets for advertising and sales promotion and managed to attract many new customers. Their competitors were forced into advertising agencies and promotion experts.

Marketing is smiling and a friendly Atmosphere:

The Banks that first introduced modern advertising and promotion soon found their advantage canceled by the rush of imitators. They also learned, another lesson; attracting people to a bank is easy; converting them into loyal customers is hard. These banks began top formulate a larger concept of marketing, that of trying to please the customer. Bankers had to learn to smile the tellers had to be retained. The tellers had to be redesigned. The bars had to be taken off the tellers had to learn smile.

Marketing is innovation:

Banks had to search for a now basis for differential advantage. Some began to realize that they are in the business of meeting the evolving financial needs of customers.

These banks began to think in terms of continuous innovation of new and valued customer services, such as credit cards, Christmass savings plans and automatic bank loans. Bank of America, for example, today offers over 350 financial products to customers.

Marketing is positioning:

What Happens When All banks advertise smile, and innovate? Clearly they begin to look alike, they are forced to find a new basis for distinction. They begin to realize that no bank can be the best bank for all customers. No bank can offer all products. A bank must choose. It must examine its opportunities to take a position in the market.

Positioning goes beyond image making. The image-making bank seeds to cultivate an image in the customers mind as a large, friendly, or efficient bank.

Marketing is marketing Analysis, Planning and Control:

There is a higher concept of bank marketing, which represents the ultimate essence of modern marketing. The issue is whether the bank has installed effective system for marketing analysis, planning, and control, One large bank, which had achieved sophistication in advertising friendliness, innovation, and positioning, nevertheless lacked good systems of marketing planning and control. Each fiscal year, commercial loan officers submitted their volume goals, usually 10 percent. No rationale or plans accompanied these submissions. Top management was satisfied with the officers who achieved their goals.

So, Bank Marketing is not a new idea. But now it has got a new shape in our economy and field of business.

4.08. PRODUCT:
Simply product is a solution of customer needs and wants. A product is an element in the market offering. Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.

4.09. LEVELS OF PRODUCT:

In planning its market offering, the marketer needs to thinks five levels of the product

In case of Bank Top Management future ideas, policies.

Core Benefit

Bankers offer to entertain client.

Bankers Behavior & attitude

Fig: Five Product levels

1. Core Benefit: The most fundamental level is the core benefit; the fundamental service or benefit that the customer is really being in case of Bank money transaction is the core benefit of product.

2. Basic product: At the second level the marketer has to turn the core benefit into a basic product. For example; Banks environment, Air Conditioned, Toilet, decoration etc. 3. Expected product: At he third level, the marketer prepares an expected product, a set of attributes and conditions buyer normally expect when they purchase the product. For example, Security of money, correct transaction, smiling face and marketers behavior from Bank staffs.

4. Augmented product: At the fourth level, the marketer prepares an augmented product that exceeds customer expectations. For example: Bankers offer how are you Sir, take a cup of coffee, wish him/her good luck etc.

5. Potential product: At the fifth level stands the potential product, which encompasses all the possible augmentations and transformations the product might under go in the future. For Example: Top management new idea, policies etc.

4.10. PRODUCT DECISION (IN BANK):

Right product decision in the right time is essential for all organization. If focuses on decision about product attributes, branding, pack aging, labeling and product support services.

) Product Attributes: Developing a product or service involves defining the benefits and design. In case of PBL various deposit schemes are product.

Product Attributes

Brandin g

Packaging

Labeling

Product Support

Various For PBL Deposit CSS

Attractive Brochures

Distinctio n From

80% Loan Facility after 3 years

Fig: Individual product decision

) Branding: Brand is a name, firm, sign, symbol, on design or a combination of these intended to identity the goods or services of one seller or group of sellers and to differentiate them from those of competitors. For example CSS (Contributory Saving Scheme). ) Packaging: Packaging refers the activities of designing and producing he container on wrapper for a product. For example attractive brochure of CSS.

) Labeling: The level identifies the product or brand, such as the destinct characteristics of CSS A/C opening. Label may be a part of packaging.

) Product Support Services: Product support services that augment actual products. More and More companies are using product support services as a major tool in gaining competitive advantage. Incase of PBLs product 80% loan facility after 3 years of CSS.

4.11. FINANCIAL PRODUCT:

Financial product refer the different type of deposit schemes of Bank, leasing or insurance companies which gain something into the shape of interest, premium. Financial Institutions deal with financial product in Bangladesh. The main feature of financial product is intangible. We gain from that type of product, but these are not similar to ordinary product existing in the market.

4.12. PRODUCT LINE:

A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

4.13. DIFFERENT PRODUCTS OF PRIME BANK LTD:

Based on customer satisfaction, prime Bank offers to its customer a large range of products and services. They are just briefly listed bellows:

A. Deposit Products:

Contributory Saving Scheme (CSS) Monthly Benefit Deposit Scheme (MBDS) Special Notice Deposit (SND) Educational Deposit Scheme (EDS)

 Fixed Deposit Receipt (FDR) Saving Deposit Account (SB A/C) Current Deposit Account (CD A/C) Foreign Currency Deposit (FCD) Non Resident Investors Taka Account (NITA) Non Resident Foreign Currency Deposit (NFCD) Prime Bank Insured Fixed Deposit Scheme (PBIFDS) Prime Bank Money Scheme (PBMS) Multi Currency Account (MC A/C) Senior Citizens Scheme (SC S)

Advance & Loan Products:

Consumer Credit Scheme (CCS) General Loan Scheme: -Short Term -Medium Term -Long Term

Lease finance; House building financing Scheme; Small and Medium Enterprise (SME) Hire purchase;

Advance against share; Staff Provident Fund loan; Advance Against (CSS, PSP, Share) Advance Against FDR; (80%) Advance Against Share & Securities Financing Scheme for Contractors; Computer software Financing Scheme; Working capital Financing; Import / Export Financing; Industrial Project Financing

4. Bank Over Draft (OD) 5. Cash Credit: -Lien; -Pledge -Hypothecation Other Products:

Credit Card

6. Online Banking 7. SWIFT Services; 8. Locker Facilities; 9. One stop utility services Scheme;

10.L/C Open & Delivery Transfer & Advise Services; 11.Foreign Exchange Service; 12.Local Remittance -P.O - D.D -T.T -M.T. 13.Islami Banking Branch Idea; 14.Foreign Remittance;

4.14. NEW PRODUCT INTRODUCTION:

New product Introduction can be classified according to (1) Newness to the market (2) Newness to the company resulting in the following six categories of new product: New-to-the-world product; New product lines; Additions in the existing product. Improvement / revisions to existing products Repositioning Cost Reduction;

NEW PRODUCT PLANNING PROCESS:

New product planning is guided by customer needs analysis:

Cus t o m e r

Scre e ni n g

Business Analysis

Marketing

Product Development

Ide a Generati on

Strategies

Testing

Commercialization

4.16. NEW PRODUCT OF PBL:

Prime Bank Management is much more dynamic than other private Bank they are continuously thinking about new product/ Schemes. To give complete peace of mind to retired and elderly ones like you, Prime Bank now introduces a special Senior Citizens Scheme that guarantees a Higher return on deposit. And, as a mark of appreciation for your contribution to the society, PBL also offer a Priority Service that entitles you to value added benefits.

RECOMMENDATIONS:
PBL has established itself as premier and efficient one in innovating new financial products and services and in grabbing the market in which it operates. Banking is a services - oriented marketing, its business profit depends on its service, quality. That is why the authority always should be about their service quality and need modern technologies practice. So, my recommendations are given bellow: 1 1 I recommend the HR practices should be properly implemented. HR department should be more aware of employee's satisfaction and dissatisfaction.

1 1

The decision makers should take resource-based strategy that should mobilize their best

resources in the right way in order to achieve goals. 1 1 1 1 1 1 They should always concentrate on full customer service and satisfaction. They should try to keep the motivated skilled employee in the organization. In foreign exchange department it is required to communicate with foreign banks

frequently and quickly. 1 1 Prime Bank Limited should introduce E-Banking facilities. 1 111 Modern technical equipment such as computer is not sufficient in this branch. This causes delay in the banking process and it also makes the process complicated. 1 1 Bank should introduce more promotional program. 1 1 1 After banking hour the authority should pay overtime payment 1 1 1 This bank should provide better on line service. 1 I highly recommend that the branch should be-

1) Determining training needs according to the first step in a successful training program is finding out the people to be trained and the type of training they need I) what are the organizational goals, II) What tasks must be performed to achieve these goals, Ill) what behavior is necessary for each job incumbents to complete his/her assigned tasks, IV) What deficiencies any do incumbents have in the skills knowledge or antiques required to perform the necessary behaviors;

And a method of training need assessment should be done in such a way in the different levels those are -Organization level

-Comparison of the achievement with the goals and objectives of the organization -Analysis of manpower inventory -Analysis of skill inventory -Examinations of complaints -Analysis of organizations climate in dices namely labor management data. -PBL workshops. -In the occupational level -Job analysis -Work sampling -Analysis of equipment -Analysis of operation procedure

Proper appraisal-there is basically three purposes to which performance appraisal

Can be used as a basis for forward allocation decisions as to who get salary

increase promotions and other benefits programs are validated. 3) Job rotation will give motivation to the employees. It is a systematically moving employee from one job to another, 4) Membership based rewards-it will make them more effective and motivate them to work as a team, 5) Training evaluation: - After each training program if it has been evaluated then it will give a clear idea whether the training program was effective or not. 6) The whole department should be fully computerized, thats why if there are any limitations in the working process it should be removed. Can be verified the Aries where development is needed. Can be used as a criterion against which selection device and development

7) There should be enough manpower in the department to support the employees. 8) The input output ratio should be fair enough it would never cause the dissatisfaction to the employees.

CONCLUSION:
The banking sector in any country plays an important role in economic activities. Bangladesh is exception of that. Its financial development and economic development are closely related to each other. Thats why the private commercial banks are playing significant role in this regard.

This report focused and analyzed on Operational performance of Prime Bank Limited and its customer services. Prime Bank Limited is a third generation bank in Bangladesh but its contribution in socioeconomic prospect of Bangladesh has the greater significance.

The total deposit of the Bank stood at BDT 124,519 million in 2010 registering a growth of 16.42% over the previous year. The total loans and advances stood at BDT 111,167 million as against BDT 89252 million in 2009. The FEX (Foreign Exchange Business) of the bank experienced a strong growth over the previous years.

Total assets of the bank is 152,797 million & earned operating revenue of BDT 6,078 in 2010, registering a growth of 18.85% over the previous year. Keeping in mind that the profitability of the bank is the Board recommended approving the dividend @20% stock and 5% cash for the year.

Return on assets (ROA) stood at 2.16% as against 2.37%. Return on Equity (ROE) stood at 21.06% in 2009 as against 30.19%. The Capital Adequacy Ratio (CAR) stood at around 11.69%.

PBL is attaining offer of special deposits schemes with higher benefits, which is a crying need for longterm position in financial market. Because of the entrance of more banks in the financial market, deposits

will splits over. Therefore, it is high time to hold some permanent customers by offering special deposit scheme otherwise in future amount of deposit may come down. To strengthen the future prospect of branch, it is an emergency to collect more deposits. Comparably the PBLs local remittance is less than the other banks because of less number of branches. PBL should extend its branches to become a sustainable financial institution in this country. Lastly, in this branch where I have worked for three months are all the procedures are in positive order in spite of some problems and recover to these limitations the branch should give more emphasize on effective lending, good customer service, skilled HR division, more training program etc.

1.