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“General Banking and Financial Performance Analysis of Janata Bank Limited”

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As a student of Bachelor of Business Administration (BBA) in “Finance Department” every student has to conduct a practical orientation in any organization for fulfilling the requirements of the “Three months” internship program. The main purpose of the program is to expose the students to the real world situations.This report has been prepared as a requirement of the internship program.
This internship program facilitates a student to bring light on their theoretical knowledge to apply this in practical ground. I was assigned to Janata Bank, ICMH Branch.

After the birth of Bangladesh on 16th December 1971, newly formed Janata Bank for mass banking got special facilities from the government to work as nationalized commercial bank all over the country. With the increase of responsibility and by virtue of performance within a few years, it becomes the largest commercial bank of the country with 911 branches including 4 overseas branches at United Arab Emirates. It is linked with more than 1239 foreign correspondents all over the world. Total employees of JBL are more than 13 thousands (13,188). Its head office located at Janata Bhaban at Motijheel C/A, the heart of the capital city, Dhaka.

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“General Banking and Financial Performance Analysis of Janata Bank Limited”

  1. 1. “General Banking of Janata Bank Limited”2018
  2. 2. “General Banking of Janata Bank Limited”
  3. 3. An Internship Report on “General Banking of Janata Bank Limited” SUBMITTED TO: Professor Md. Shahjahan Khan Principal Dhaka City College, Dhaka SUPERVISED BY: MS. Sayeda Ferdous Lusanta Assistant Professor Department of Business Administration Dhaka City College, Dhaka SUBMITTED BY: Asif Faysal National University Roll No: ……………… National University Registration No:……………….. Session: 2012-2013 Major in FInance Department of Business Administration Dhaka City College, Dhaka Date of Submission: January 15, 2018.
  4. 4. i | P a g e Letter of Transmittal January 15, 2018 Professor Md. Shahjahan Khan Principal Dhaka City College, Dhaka-1205 Subject: Submission of internship report on “General Banking and Financial Performance Analysis of Janata Bank Limited” Dear Sir, It’s my pleasure to submit you the internship report on “General Banking and Financial Performance Analysis of Janata Bank Limited”. I have tried myself to explain all my learning and experiences, I have gather from my internship program briefly in this report. I have done my internship under prestigious and leading company in the banking sector like Janata Bank Limited. I have to finish a report based on my practical experience. The study focuses mainly on the General banking activities of Janata Bank Limited. It was submitting opportunity and a valuable experience for me the real business world. I gather to you for providing me such an opportunity to gather practical experience of working in a private commercial bank like Janata Bank Limited. Hope that you would be very pleased to accept and oblige me. Sincerely yours, Asif Faysal National University Roll No:……………, National University Registration No: …………….. Major in Finance Academic session: 2012-2013 Department of Business Administration Dhaka City College, Dhaka
  5. 5. ii | P a g e ACKNOWLEDGEMENT At the very outset, I am grateful to almighty Allah for giving me strength and ability to accomplish the internship program as well as the internship report in a scheduled time in spite of various difficulties. Firstly, I would like to express my gratitude to the authority of National University and to our honorable Principal, Professor Mr. Md. Shahjahan Khan for providing me such an opportunity. I would also like to show my warm-hearted gratitude to our honorable Chairman of Dhaka City College “Dr. Syed Modasser Ali” and Vice Principal of Dhaka City College Professor Md. Anowar Hossain and Professor Bedar Uddin Ahmed. Also, I would like to give my sincere gratitude to our honorable Co-coordinator Mr. Sohel Ahmed, Associate Professor, Department of Business Administration, and Dhaka City College for his valuable guidance and considerations. I must remember to express my heartiest gratitude to Md. Abu Bakar Siddque, Senior Executive officer. I would also like to thank Md. Mojibor Rahman Bhuiya, Manager for their kind support as well as their guidance and valuable feedback to write my report. A very special thanks goes to the whole Business Development department for helping me in all stage of the internship process. Simultaneously, I would like to thank my other colleagues of Janata Bank Ltd. ICMH branch, who provided me with enormous insights and helped me to learn the situation of the current business world. Above all, I cannot refrain myself from giving heartfelt thanks to my academic supervisor, Ms. Sayeda Ferdous Lusanta, Assistant Professor, Department of Business Administration, Dhaka City College. Her guidance and feedback made things a lot easier. Without her continuous support and suggestion, this report would not came into light. Because, a lot of insights and knowledge I have put and used in this report is learned and gathered from her various instructions. She kept me on track to complete this report with her suggestions that were crucial in making this research report as flawless as possible. I also owned to my dearest parents and honorable teachers of Dhaka City College who have given me the light of knowledge from earlier to till today and who have displayed their helping hands to us during the studies.
  6. 6. iii | P a g e Certificate of Supervisor This is to certify that, Asif Faysal, National University Roll Number: …………., National University Registration Number: …………., Academic Session 2012-2013, Major in Finance, is a regular student of 8th semester of BBA program, Department of Business Administration, Dhaka City College, under the National University of Bangladesh. He is completed an internship report on “General Banking and Financial Performance Analysis of Janata Bank Limited” under my supervision. Which is a fulfillment of partial requirement of obtaining BBA degree. I wish his success in all his future endeavors. MS. Sayeda Ferdous Lusanta Assistant Professor Department of Business Administration Dhaka City College, Dhaka
  7. 7. iv | P a g e Executive Summery This project paper is a partial requirement for the Bachelor of Business Administration. As a part of the project paper program, General Banking Activities Of Janata Bank Ltd” was placed by me. A lot about operations of this bank is learned by me. Janata Bank Ltd is a commercial Bank which is one of the most popular banks in Bangladesh. The Bank started its operation from 1972, during this time it has improved its image in the society as a commercial Bank. Now it has 911 (2017) branches in Bangladesh. All branches are situated in the highly demanded areas and rural areas. This report is not only explores Janata Bank’s activities as one of the leading government companies, but also highlights the performance of this bank. This report consists of six chapters. In the report, at the very first introduction of the report, objectives, scope, and methodology, sources of data collection and limitations of the study have been acknowledged. In the chapter second Overview of Janata bank has been described i.e. Background of Janata bank, Products and services of the bank, Bank operational area. In the third chapter Literature Review has been described i.e. Definition of bank and banking, history of banking overview of banking sector of Bangladesh. In the fourth chapter findings in different situations about general banking performance of Janata Bank Limited are denominated. General banking activities are performed through five sections. There are various types of account such as current account, savings account, short term account, fixed deposit reserve account etc. general banking activities are the nerve center of a bank. JBL also aids to remit fund from one place to another place on behalf of its customers as well as non- customers of Bank. It also contains loans and advances where I briefly discussed types of loan and advance of Janata Bank Ltd. and their policy as well as procedure. Every day, Janata Bank receives cash from the customers and records the transaction appropriately. On the other hand, the Bank makes payment of cash by honoring checks and produces records of those transactions.
  8. 8. v | P a g e In the fifth chapter, this report consist on financial performance analysis of JBL. Financial performance analysis is the process of reviewing and analyzing a company's financial statements to make better economic decisions by using the income statement, balance sheet, statement of cash flows, and a statement of changes in equity. Every year JBL’s expenditure rise yearly, where the revenue level decrees consistently. Because of that and other operating activities effect on income statement, balance sheet, statement of cash flows. For that reason, the result of ‘Ratio Analysis’ mostly unstable and undesirable. In the sixth chapter, there are some recommendations toward concern authority for overcoming the shortcomings of JBL in banking activities should be organized and performed using secured IT applications. All branches should be well decorated staffs and officers should speak polite and low voice, Bank should introduce new product, Bank should provide appropriate training, take motivational effort. Nevertheless, if the management of Janata Bank tries hard to overcome the drawbacks and come-up with effective human resource and financial strategies, the Bank will soon turn into a strong opponent in the banking sector of Bangladesh. .
  9. 9. vi | P a g e Table of Contents Prefatory parts Title Fly Title Page Letter of Transmittal i Acknowledgement ii Certificate of Supervisor iii Executive Summary iv-v Table of Contents vi-viii Acronyms ix-x List of Tables xi List of Graphs & Figures xii Chapter One : Introduction 1-5 1.1 Origin of the Report 2 1.2 Objectives of the Report 2-3 1.3 Methodology of the study 3 1.3.1 Data Sources 3 1.3.2 Data Analysis Technique 3 1.4 Scope of the Study 4 1.5 Purpose of the Report 4 1.6 Limitation of the Study 4-5 Chapter Two : Organizational Profile 6-14 2.1 Background of Janata Bank Limited 7 2.2 Vision, Mission and Objectives of Janata Bank Ltd. 7-8 2.3 Corporate Information of Janata Bank Limited as on 2016 8-9 2.4 Products and Services 9-11 2.5 SWOT Analysis of Janata Bank Limited 11-13 2.5.1 Strength of Janata Bank Limited 12 2.5.2 Weakness of Janata Bank Limited 13 2.5.3 Opportunity of Janata Bank Limited 13
  10. 10. vii | P a g e 2.5.4 Threats of Janata Bank Limited 13 2.6 Code of Conducts 14 Chapter Three : Theoretical Analysis of Banking 15-24 3.1 Definition of Banking 16 3.2 Meaning and Origin of Bank 17 3.3 Brief History of banking system of Bangladesh and Indo-Pak Subcontinent 18-20 3.4 Types of Bank 20-21 3.5 Functions of Commercial Bank 21-24 3.5.1 General Banking Functions 22-23 3.5.2 Public Utility Functions 23-24 3.5.3 Agency Functions 24 Chapter Four : General Banking Activities 25-42 4.1 General Banking 26 4.2 Account opening Section 26-34 4.2.1 Procedure to open an Account 31-32 4.2.2 Activities & papers required for opening an Account 32-34 4.3 Remittance 35-36 4.4 Clearing 37 4.5 Cash 37 4.6 Account Department 37 4.7 Utility services 38 4.8 Loans and Advances 38-42 Chapter Five : Financial Analysis 43-61 5.1 Financial Performance of Janata Bank Limited 44 5.2 Area of Financial Performance Analysis 44 5.3 Comparative Financial Highlights of JBL (2015-2016) 45-45 5.4 Performance Analysis 47-51 5.4.1 Net Operating Profit 47 5.4.2 Net profit after tax 48 5.4.3 Total Assets 49
  11. 11. viii | P a g e 5.4.4 Deposits and Advances 50 5.4.5 Import, Export & Foreign Remittance 51 5.5 Ratio Analysis of Janata Bank Ltd.(2012-2016) 52-60 5.5.1 Liquidity Ratio  Current Ratio  Cash reserve ratio or Liquidity ratio 52-53 5.5.2 Profitability  Return on Investment (ROI)  Return on Asset (ROA)  Return on Equity (ROE) 53-56 5.5.3 Market Prospect Ratios  Earnings Per Share (EPS)  Net Assets Value Per Share (NAVPS) 57-58 5.5.4 Capital Adequacy Ratio  Tier 1 Capital  Tier 2 Capital 58-60 5.6 Comparison among other Govt. Banks 60-61 Chapter Six : Findings, Recommendations & Conclusion 62-66 6.1 Findings 63 6.2 Recommendations 64 6.3 Conclusion 65-66 Appended Part 67-76 Bibliography 68 Appendix 69-76
  12. 12. ix | P a g e Acronyms Acronyms Elaboration BBA Bachelor of business Administration NU National University JBL Janata Bank Limited IT Information Technology SWOT Strength, Weakness, Opportunities, Threats ICT Information and Communications Technology ATM Automated Teller Machine TIN Tax Identification Number FDR Fixed Deposit Receipt PO Pay Order BB Bangladesh Bank BDT Bangladesh Taka CC Cash Credit CD Current Deposit DD Demand Draft DP Depository Participants EXP Export Form PAD Payment Against Documents LIM Loan against Imported Merchandise LTR Loan against Trust Receipts FC Foreign Currency FDBC Foreign Documentary Bill Collection FDD Foreign demand draft FDR Fixed Deposit Receipt GDP Growth Domestic Product IBC Inward Bills for Collection L/C Letter of Credit IMP Import Form IRC Import Registration Certificate MTA Mail Transfer Advice
  13. 13. x | P a g e OD Order Demand PAD Payment Against Document SWIFT Society for Worldwide Interbank Financial Telecommunication TC Travelers Cheque TIN Tax Identification Number TT Telegraphic Transfer ROA Return on Assets ROE Return on Equity ROI Return on Investment EPS Earnings Per Share NAVPS Net Assets Value Per Share
  14. 14. xi | P a g e List of Tables no. Tables titel Page no. 2.1 Corporate Information of Janata Bank Ltd. 8-9 3.1 Nationalize Bank under order26, 1972 19-20 4.1 Interest rate in FDR of Janata Bank Ltd. 28 4.2 Features of the Janata Bank Deposit Scheme (JBDS) 29 4.3 Monthly Installment amount at the end 5 years deposit under SBDS 31 5.1 Comparative Financial Highlights of JBL (2015-2016) 45-46 5.2 Net Operating Profit of Janata Bank Ltd. (2012-2016) 47 5.3 Net Profit after Tax of Janata Bank Ltd. (2012-2016) 48 5.4 Total Assets of Janata Bank Ltd. (2012-2016) 49 5.5 Total Deposits & Advances of JBL (2012-2016) 50 5.6 Import, Export & Foreign Remittance of Janata Bank Ltd. (2012-2016) 51 5.7 Current Ratio of JBL & ABL (2012-2016) 52 5.8 Cash reserve ratio of Janata Bank Ltd. (2012-2016) 53 5.9 Return on Investment (ROI) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 54 5.10 Return on Assets (ROA) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 55 5.11 Return on Equity (ROE) of JBL & ABL (2012-2016) 56 5.12 Earnings per Share (EPS) of JBL & ABL (2012-2016) 57 5.13 Net Assets Value per Share (NAVPS) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 58 5.14 Capital Adequacy Ratio (CAR) of JBL (2012-2016) 59 5.15 Comparison among Janata Bank Ltd.; Sonali Bank Ltd., Agrani Bank Ltd. and Rupali Bank Ltd. (For the year- 2016) 60
  15. 15. xii | P a g e List of Graphs & Figures NO. TABLES TITEL PAGE NO. 2.1 SWOT Analysis of Janata Bank Ltd. 12 5.1 Net Operating Profit of Janata Bank Ltd. (2012-2016) 47 5.2 Net Profit after Tax of Janata Bank Ltd. (2012-2016) 48 5.3 Total Assets of Janata Bank Ltd. (2012-2016) 49 5.4 Total Deposits & Advances of JBL (2012-2016) 50 5.5 Import, Export & Foreign Remittance of JBL (2012-2016) 51 5.6 Current Ratio of JBL & ABL (2012-2016) 52 5.7 Cash reserve ratio of Janata Bank Ltd. (2012-2016) 53 5.8 Return on Investment (ROI) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 54 5.9 Return on Assets (ROA) of JBL & ABL (2012-2016) 55 5.10 Return on Equity (ROE) of JBL & ABL (2012-2016) 56 5.11 Earnings per Share (EPS) of JBL & ABL. (2012-2016) 57 5.12 Net Assets Value per Share (NAVPS) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 58 5.13 Capital Adequacy Ratio (CAR) of JBL (2012-2016) 60 5.14 Comparison among Janata Bank Ltd.; Sonali Bank Ltd., Agrani Bank Ltd. and Rupali Bank Ltd. (For the year- 2016) 61
  16. 16. 1 | P a g e Chapter - One: Introduction 1.1 ORIGIN OF THE REPORT 1.2 Objectives of the Report 1.3 Methodology of the Study 1.4 Scope of the Study 1.5 Purpose of the Report 1.6 Limitation of the Study
  17. 17. 2 | P a g e 1.1 Origin of the Report As a student of Bachelor of Business Administration (BBA) in “Finance Department” every student has to conduct a practical orientation in any organization for fulfilling the requirements of the “Three months” internship program. The main purpose of the program is to expose the students to the real world situations.This report has been prepared as a requirement of the internship program. This internship program facilitates a student to bring light on their theoretical knowledge to apply this in practical ground. I was assigned to Janata Bank, ICMH Branch. I am required to prepare an internship report under the supervision of our honorable teacher “Assistant Professor MS. Sayeda Ferdous Lusanta,” “General Banking and Financial Performances analysis of Janata Bank Limited” to conduct a precision analysis on the typical subject. I have always tried my best to reflect my experience of the practical incidence in this report. 1.2 Objectives of the Report There are mainly two objectives behind the preparation of this report- primary objective and secondary objective. 1.2.1 Broad objective The broad objective of preparing this report is to fulfill the mandatory requirement of the BBA program and to represent the “General Banking and Financial Performances analysis of Janata Bank Limited”. The study is mainly a descriptive study. The research was conducted to find out the depth analysis of activities of General Banking of Janata Bank Limited. 1.2.2 Specific objectives  To gain practical knowledge in banking  To fulfill academic requirement  To know about Branch level General Banking Activities.  To gain practical knowledge in banking.  To recommend ways and means to solve problems regarding Banking.
  18. 18. 3 | P a g e  To analyze the real banking performance of JBL.  To earn customer satisfaction through diversified banking activities and introduction of innovative banking.  To maintain adequate liquidity to meet maturing obligations and commitments. 1.3 Methodology of the Study The methodology of the study has been designed in the following ways: 1.3.1 Data Sources The information that I used in this study is collected by the following way: Primary Data Sources:  Direct working with officials of Janata Bank Ltd.  Face to face conversation with client.  Practical deskwork.  Observation for the total internship period. Secondary Data Sources:  Annual report of Janata Bank Ltd.  Manual of Janata Bank Ltd.  Bank’s other published information.  Previous research books and journals.  Janata bank website Browsing. ( Www. janatabank-bd.com) The major portion of data sources has been collected from secondary data sources. Information required formulating suggestions and recommendation have been availed from related text and research papers. 1.3.2 Data Analysis Technique After collecting the data, it was analyzed by Microsoft word & Microsoft Excel. Then the findings were made. Based on the findings, the present situation was explained and recommendation was made.
  19. 19. 4 | P a g e 1.4 Scope of the Study The duration of the study was a very short span of time. It was three month long internship program (November, 2017 to January, 2018). It was very much hard to complete a report as well as assigned tasks by the Bank. So I had to complete this study facing very much time presser. The area of operation that has been covered means the total possible coverage is the scope. The report provides a scope of gathering data from different sources. This report covers in General Banking and Financial Performances Analysis of JBL. It also includes the organizational structure and policy of JBL and investigating the strategies applied by JBL for customer satisfaction. The scope of this report is limited to the overall description of the company, organizational setup, its services, and its position in the industry and its marketing strategies. 1.5 Purpose of the Report  To identify the historical background of the Janata Bank Ltd.  To know the objectives behind their establishment.  To know General Banking and Customer Satisfaction level of Janata Bank Ltd.  To know the objectives at present condition if they differ from the origin.  To identify the major policies by which they are operating now.  To identify the facilities offered by the Janata Bank Ltd.  To know whether Janata Bank adopted & coped with modern technological advancement in the banking system.  To identify the social responsibilities of the bank as a social entity. 1.6 Limitation of the Study Objective of the practical orientation program is to have practical exposure for the students. Our tenure was for three months only, which was somehow not sufficient. After working whole day in the office it was very much difficult, if not impossible to study again the theoretical aspects of banking.
  20. 20. 5 | P a g e Other limitations are as follows:  For the lack of our practical knowledge, some shortcoming may be available in the paper.  The bank has naturally shown us some indifference connecting its most confidential information.  The executives of Janata Bank Limited were too busy to spare time for the internee.  The duration of our internship program is only 2 months. The allocated time is not sufficient for us to gather knowledge and to make the study a complete and fruitful one.  The study also suffered from inadequacy of data provided by Janata Bank Limited.  The study is mainly a descriptive study. The research was conducted to find out the depth analysis of activities of General Banking of Janata Bank Limited.
  21. 21. 6 | P a g e Chapter - Two: Organizational Profile 2.1 Background of Janata Bank Limited 2.2 Vision, Mission & Objectives of JBL 2.3 Corporate Information of Janata Bank Ltd. 2.4 Products and Services 2.5 SWOT Analyses of JBL 2.6 Code of Conducts
  22. 22. 7 | P a g e 2.1 Background of Janata Bank Limited Janata Bank, one of the largest commercial bank in the country, was established under Bangladesh Bank (Nationalization) Order 1972 (Presidency Order of 1972). By taking over branches of former United Bank Limited and Union Bank Limited, were two private banks performing class banking over the country. After the birth of Bangladesh on 16th December 1971, newly formed Janata Bank for mass banking got special facilities from the government to work as nationalized commercial bank all over the country. With the increase of responsibility and by virtue of performance within a few years, it becomes the largest commercial bank of the country with 911 branches including 4 overseas branches at United Arab Emirates. It is linked with more than 1239 foreign correspondents all over the world. Total employees of JBL are more than 13 thousands (13,188). Its head office located at Janata Bhaban at Motijheel C/A, the heart of the capital city, Dhaka. Corporatization In 15 November, 2007 Janata Bank got registered with the Joint Stock of Registrars and restructured it as a public limited company with the name Janata Bank Limited. 2.2 Vision, Mission & Objectives of JBL 2.2.1 Vision To become the effective largest commercial bank in Bangladesh to support socio- economic development of the country and to be a leading bank in South Asia. 2.2.2 Mission Janata Bank Limited will be an effective commercial bank by maintaining a stable growth strategy, delivering high quality financial products, providing excellent customer service through an experienced management team and ensuring good corporate governance in every step of banking network.
  23. 23. 8 | P a g e 2.2.3 Objectives  The objectives for which the bank is established as follows:  To carry on, transact, undertake and conduct the business of banking in all branches.  Full implementation and utilization of the Bank’s excellence program which aims to provide services to customers.  To carry on business as financiers, promoters, capitalists, financial and monitory agents, concessionaires and brokers, dealing in exchange, securities and all kinds of mercantile banking etc.  To build up a deep-rooted and harmonious banker-customer relationships by dispensing prompt and improved services to the clients.  To make best use of latest technologies for giving the clients a taste of modern banking so as to encourage them to continue and feel proud of banking with JBL. 2.3 Corporate Information of Janata Bank Ltd. (Year-2016) Name of Company: Janata Bank Limited Registered Office: Janata Bhaban 110, Motijheel C/A Dhaka-1000, Bangladesh. Legal Status: Public Limited Company Date of Incorporation: 21 May 2007 Date of Commencement of Business: 31 May 2007 Authorized Capital: Tk. 30,000 Million Paid up Capital: Tk. 19,140 Million Face value per share: Tk. 100 per share Shareholding Pattern: 100% Share owned by the Government of the Peoples Republic of Bangladesh Tax Identification No.: 001-200-2732 Vat Registration No.: 9011050160 Chairman: Shaikh Md. Wahid-uz-Zaman
  24. 24. 9 | P a g e CEO & Managing Director: Mr. Md. Abdus Salam, FCA Chief Risk Management Officer: Mr. Md. Abdus Salam Azad FF (DMD) Head of Internal Control and Compliance: Mr. Md. Nazim Uddin (DMD) Chief Financial officer (CFO): Mr. Md. Nurul Alam FCA, FCMA Company Secretary: Mr. Md. Mosaddake-Ul-Alam (GM) Total Number of Branches: 910 Number of Employees: 13,188 Number of Exchange House 76 Corporate Rating Status: Entity Rating :  A + in the (long run)  ECRL-2 in the (short run) As govt. owned Bank:  AAA in the (long run)  ECRL-1 in the (short run) Telex: 675840JBDBJ, 671288 JBHOBJ Fax: 88-02-9564644, 9560869 E-mail: md@janatabank-bd.com Website: Www. janatabank-bd.com; jb.com.bd Swift Code: JANBBDDH Table 2.1: Corporate Information of Janata Bank Ltd. 2.4 Products and Services 2.4.1 Deposit 1. Current Deposit Janata Bank Limited offers customers current deposit facility for day-to-day business transaction without any restriction. This deposit account pays no interest but a customer can withdraw money from this account when he wants by presenting his account cheque over counter during any working day. This type of account may be opened in the name of individual or firms. This account suits best for business man or business firm.
  25. 25. 10 | P a g e 2. Savings Deposit Savings Bank Account can be opened in any branch of Janata Bank depositing any amount of taka by any Bangladeshi citizen in the name of an individual or a group of individuals which can be operated singly or jointly. Account holder can deposit or withdraw any amount during any working day with prior notice or without notice. 3. Special Notice Deposit Janata Bank Limited offers interest on customer's special notice deposit (SND) account and gives facility to withdraw money at any time. 4. Fixed Deposit A depositor can open Fixed Deposit Account for different terms with any branch of Janata Bank easily. Any individual or a group of individuals can go to any branch, fill a prescribed form, depositing cash or easily cashable instrument of FDR amount and a Fixed Deposit Receipt will be issued by the Bank on behalf of the applicant. 5. Deposit Scheme Under this scheme Janata Bank offers various deposit schemes following monthly savings plan suitable for all classes of people and continue depositing to complete the respective tenor. Pre tenor encashment benefit: I. If you need money, you can take loan from the bank at the bank’s terms and condition. II. In case of pre tenor encashment of the scheme, you can still get attractive benefit. 2.4.2 Loans & Advance 1. Agriculture Loans 2. Term Loan for Large and Medium Industries 3. Working Capital Loan 4. Import Loans 5. Export Loans 6. Financing in Green Banking 7. Term Loan for Micro and Cottage industries 8. Other Loans 9. CC Hypo/CC Pledge 10. Micro Enterprise and Special Credit
  26. 26. 11 | P a g e 2.4.3 Special Products 1. Loan to Travel Agencies 2. Loan to Diagnostic Centers 3. Financing IT Sector 4. Financing of Industries 5. Windows for SMEs 6. Ready Cash 7. NRB Escrow Account 8. NRB Gift Cheque 2.4.4 E- Service 1. ATM 2. Internet Banking 3. Automated Branch Banking 4. Green Banking 5. e- GP Payment Service 6. OMIS (ERP) 7. PMIS 8. BEFTN User Manual 2.4.5 Modern Banking 1. Online Banking 2. JB Green Communication 3. JB Remittance 4. JB PIN Cash 2.5 SWOT Analyses of JBL SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.
  27. 27. 12 | P a g e Fig 2.1: SWOT Analysis of Janata Bank Ltd. SWOT analysis is an acronym for- “S” = Strengths – Attributes helpful for achieving the objective. “W” = Weaknesses – Attributes harmful for achieving the objective. “O” = Opportunities –External conditions that are helpful for achieving the objective. “T” = Threats – External conditions that may harm the business’s performance. The SWOT Analysis of Janata Bank is presented in a table below: 2.5.1 Strengths:  Name recognition within the community  Large customer base  Community involvement/increasing presence in the market  Management knowledge of industry  Financial condition: Strong capital and asset quality  Regulatory performance is strong and positive  Fine environment in side of the branch  Co-ordination and co-operation among the staff  Old Bank so greater reliance to customers.
  28. 28. 13 | P a g e 2.5.2 Weaknesses:  Lack of technological resources as well as Internet banking  Lack of knowledge of customer profile  Insufficient focus on quality customer service and mortgage banking  Overall market share needs to grow Opportunities:  Cross-selling existing customers  Growth in commercial business  Increase market share through growth of loan portfolio  Increased presence by means of additional ATMs  Niche markets (under-served ethnic markets, bank at work, etc.)  Enhanced business development in all product areas and promotion of those products. 2.5.3 Opportunities  More Experienced & Managerial know-how  Opportunity to expand geographically within Bangladesh.  Customers are looking for good quality and have the willingness to bank with Janata Bank Ltd. 2.5.4 Threats:  Strong community bank competition Non-bank competition  Inefficiencies within the operations of the bank  Possibilities of more stringent regulations  Lack of appeal to younger, Student, affluent potential customers  Political instability of the country  Lack of Flexibility to adopt to any change  The continuing increase in non-bank competitors offering similar services.  Continued deregulation and globalization of services.
  29. 29. 14 | P a g e 2.6 Code of Conducts In accordance with the ethical principles, the code of conduct of JBL employees shall:  Act with integrity, competence and dignity;  Loyal to the bank and bank’s interest;  Maintain professionalism and ethical standards;  Deliver professional service in accordance with JBL policies and relevant standards;  Try to fulfill the customer needs in the best possible manner within the guideline of corporate ethics;  Keep all matters confidentially;  Maintain knowledge of and comply with all applicable laws, rules and regulations;  Never offered or accept illegal gifts or other facilities in order to achieve personal advantage;  No discrimination against any person on the basis of race, religion, color, gender, age, etc.  Not engaged in any unprofessional conduct involving dishonesty, fraud, misrepresentation or commit any act that reflects adversely on honesty, trustworthiness and professional competence.
  30. 30. 15 | P a g e Chapter - Three: Theoretical Analysis of Banking 3.1 Definition of Banking 3.2 Meaning and Origin of Bank 3.3 Brief History of banking system of Bangladesh and Indo-Pak Subcontinent 3.4 Types of Bank 3.5 Functions of Commercial Bank
  31. 31. 16 | P a g e 3.1 Definition of Banking Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the backbone of modern business. Development of any country mainly depends upon the banking system. A bank is a financial institution which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it. Different Authors and Economists have given some structural and functional definitions on Bank from different angles: 1. Cairn Cross: “Bank is a financial intermediary institution which deals in loans and advances.” 2. R.P. Kent: “Bank is an institution which collects idle money temporarily from the public and lends to other people as per need.” 3. P.A. Samuelson: “Bank provides service to its clients and in turn receives perquisites in different forms.” 4. W. Hock: “Bank is such an institution which creates money by money only.” 5. Sir John Pagette: “Bank is such a financial institution which collects money in current, savings or fixed deposit account; collects cheques as deposits and pays money from the depositors account through cheques.” 6. Indian Company Law 1936 defines Bank as: “A banking company which receives deposits through current account or any other forms and allows withdrawal through cheques or promissory notes.” Oxford Dictionary defines a bank as “an establishment for custody of money, which it pays out on customer’s order.”
  32. 32. 17 | P a g e 3.2 Meaning and Origin of Bank The word Bank is widely and extensively used and circulated. The Bank in English carries the same meaning in Bengali. The origin of English word Bank came into being (when, where and how) which could not be specifically identified. The history regarding the origin of Bank, even after the twelfth century, is not also clear which has been based on guesses. According to some writer the word Bank was derived from “Banco‟, “Bancus‟, “Banque‟ or “Banc‟ all of which mean a bench upon which the mediaeval European Money-lenders and Money –Changers used to display their coins. Anyhow this word has been in use from the middle ages in connection of a bank. In the words of German writer W. Frankace, a long stool or bench was said to be replaced by Bank, Bangke etc. in the Scandinavian and Mid-European countries. Again, Dutch and French words “Banque‟, “Bangko‟ were used to mean stool or bench and in course of time the word Bank came into effect. In the Mediaeval age Italian states were sound and solvent economically and commercially. At that time a group of people used to conduct business of transaction of money sitting on a stool or bench which was replaced by “Banco”, “Banko‟ ,“Banca‟, “Bangk”, “Bancus‟, “Banc” etc. It is assumed that the word “Bank” was originated from these words. In the later age, an English writer Maclead challenged the above concepts. His contention was that the money-lenders and money-changers used to display their coins which were not termed as “Banco”, “Banque”, “Banke”, and “Banca”. However, Banco in Italy and Banke in German and Australia were understood as public debt or issue of paper money. In his opinion, these words were used for the purpose of economic activities of different countries of Europe. Another British writer Chamber, in his Twentieth Century Dictionary, very clearly stated that the word “Bank‟ is derived from Banca and Banque. The French still uses “Banque‟ in place of the word “Bank”. In the mid of twelfth century Italian states were under political turmoil and in 1150 Venice was afflicted with enemies. As a result, the Government introduced public debt, collective credit, forced subscribed loan @ 5% compulsorily on the public for meeting economic crisis. During that time this loan was called Banke, Banco, Compara, Monte etc. So many thinkers think that the German word “Banke” and the Italian word “Banco” have been transformed into English word “Bank”.
  33. 33. 18 | P a g e 3.3 Brief History of banking system of Bangladesh and Indo-Pak Subcontinent For the growth and development of modern banking, Indo-Pak Subcontinent have a positive role. With the gradual evolution of ages banking activities have got momentum. (a) The Ancient Era: Many Economists and Experts have expressed their opinion that banking business have been going on since ancient era. Many evidences are found with the archaeological symbols of Harappa and Mohenjo-Daro. From different religious scriptures we find a lot of information regarding modern banking activities. (b) The Mughal Era: The banking system has been extensively developed during the Mughal Era. During that time government treasury was formed. The Govt. introduced gold and silver coins of different denominations named „Ashrafi‟. Thus banking system has been developed. During that period ‘Seth Family” was world famous. They used to conduct business through agency house. Among the local bankers marwari, multani, kabuliwala, sharaf, chetti etc. worth mention. In the seventeenth century, English Tradesmen were involved with them. In 1700 The Hindustan Bank was established as a joint venture bank. (c) The British Era: The expansion program of the modern bank started when the English took power of India. In 1784 the Bengal Bank introduced paper currency notes and gold coins of different denominations. Later, in 1787 General Bank of India, in 1806 Bank of Bengal, in 1840 Bank of Bombay and in 1843 Bank of Madras were established. With merging of three banks, the Imperial Bank of India was established in 1920 and in 1935 the Reserve Bank of India came into being. (d) The Pakistan Era: In 1947 during the separation of India, 639 branches of different banks were the parts of Pakistan. Besides, Head Offices of Habib Bank Limited and Muslim Commercial Bank Limited were transferred to Karachi. In 1948 the State Bank of Pakistan was established.
  34. 34. 19 | P a g e (e) The Bangladesh Era: Bangladesh came into being in 1971. Since then a branch of state bank of Pakistan stationed at Dhaka was declared Central Bank of Bangladesh named as Bangladesh Bank under Special Act. Excepting other banks, Head Offices of two banks e.g. Eastern Mercantile Bank Limited (1959) and Eastern Banking Corporation Limited (1965) were at Dhaka which were renamed as Pubali Bank Limited and Uttara Bank Limited respectively. In this country of 17 crores people about,  State Owned Commercial Banks 6;  Private Commercial Banks 40;  Foreign Commercial Banks 9;  Non-Scheduled Banks 6;  Non-Bank Financial Institutions 35. With two banks as above many branches of more than 10 banks were located in Bangladesh. When the Non-Bengali owners had left the country the disastrous condition of banks in Bangladesh knew no bounds. The fact remains that most of the bankers and staff were non-Bengalis. Consequently, the management and control of all such banks were reposed on Bangladesh Government. In 1972 Government, pursuant to Presidents‟ Order 26, had nationalized all banks. The banking system of Bangladesh came to a standstill. After nationalization the banks were renamed as under: Sr. No. Former Name Present Name 1. The National Bank of Pakistan The Bank of Bhowalpur Limited, The Premier Bank Limited Sonali Bank (Sonali Bank Ltd.) 2. The United Bank Limited The Union Bank Limited Janata Bank (Janata Bank Ltd.) 3. The Habib Bank Limited Commerce Bank Limited Agrani Bank (Agrani Bank Ltd.) 4. The Muslim Commercial Bank Limited The Standard Bank Limited The Australasia Bank Limited Rupali Bank (Rupali Bank Ltd.)
  35. 35. 20 | P a g e 5. The Eastern Mercantile Bank Limited Pubali Bank Limited 6. The Eastern Banking Corporation Limited Uttara Bank Limited Table 3.1: Nationalize Bank under order26, 1972 3.4 Types of Bank Some of the most common banks are listed below, but the dividing lines are not always clean cut. Some banks work in multiple areas (for example, a bank might offer personal accounts, business accounts, and even help large enterprises raise money in the financial markets) 1. Retail banks are probably the banks you’re most familiar with: You’re checking and savings accounts are held at a retail bank, which focuses on consumers (or the general public) as customers. These banks give you credit cards, offer loans, and they’re the ones with numerous branch locations in populated areas. Learn more about retail banks. 2. Commercial banks focus on business customers. Businesses need checking and savings accounts just like individuals do. But they also need more complex services, and the dollar amounts (or the number of transactions) can be much larger. They might need to accept payments from customers, rely heavily on lines of credit to manage cash flow, and they might use letters of credit to do business overseas. Learn more about commercial banking. 3. Investment banks help businesses work in financial markets. If a business wants to go public or sell debt to investors, they’ll often use an investment bank. Learn more about investment banks. 4. Savings and loans are less prevalent than they used to be, but they are still important. This type of bank was important in making home ownership mainstream, using deposits from customers to fund home loans. The name savings and loan
  36. 36. 21 | P a g e refers to the core activity they perform: take savings from one customer and make loans to another. Learn more about savings and loans. 5. Central banks manage the monetary system for a government. For example, the Federal Reserve Bank is the US central bank responsible for managing economic activity and supervising banks. Learn more about central banks. 6. Credit unions are similar to banks, but they are not-for-profit organizations owned by their customers (most banks are owned by investors). Credit unions offer products and services more or less identical to most retail and commercial banks. The main difference is that credit union members share some characteristic in common (where they live, their occupation, or organizations they belong to, for example). Learn more about credit unions. 7. Online banks operate entirely online – there are no physical branch locations available to visit with a teller or personal banker. Many brick-and-mortar banks also offer online services, such as the ability to view accounts and pay bills online, but internet-only banks are different: they often offer competitive rates on savings accounts and they’re especially likely to offer free checking. Learn more about internet-only banking. 8. Mutual banks are similar to credit unions because they are owned by members (or customers) instead of outside investors. 3.5 Functions of Commercial Bank Historically, commercial bank came into being for its commercial purpose. The inception of modern banking is the outcome of commercial bank. In the words of Professor Roger, “the bank which deals with money and money’s worth with a view to earning profit is known as “Commercial bank.” Professor Hart says, “A banker is one who, in the ordinary course of business, honors cheques drawn upon him by persons for and for whom he receives money on current account.”
  37. 37. 22 | P a g e The functions of commercial bank are given below: 3.5.1 General Banking Functions: 1. Receiving Deposits: The first and foremost function of commercial bank is to receive or collect deposits from the public in different forms of accounts e.g. current, savings, term deposits. No interest is charged in the current account, lower rate of interest is charged in the savings account and comparatively higher interest rates charged in fixed deposits. Thus, commercial bank builds up customer network. 2. Accommodation of loans and advances: Commercial Bank attaches much importance to providing loans and advances at a higher rates than the deposit rates and thus earns profits on it. Working capital is accommodated to the borrower for expansion and smooth running of business. In the similar manner, commercial bank extends financial accommodation for the development of agriculture and industry. Credit accommodation is provided to the entrepreneurs for reviving sick and old industries as per Govt. directives. Thus, commercial bank also extends welfare services to the people at large. 3. Creation of Loan Deposits: Commercial Bank not only receives deposits from public and accommodates loans to public but also creates loan deposits. For example: while disbursing loans as per sanction stipulation, the amount of loan is credited to the borrower’s account. The borrower may not withdraw the full amount at a time. The residual amount i.e. balance left in the account creates loan deposits. 4. Creation of medium of exchange: Central Bank has got exclusive right to issue notes. On the other hand, Commercial Bank creates medium of exchange by issuing cheques. Like notes, cheque is transferrable being popularly used in the banking transactions. 5. Contribution in foreign trade: Commercial Bank plays a vital role in expediting foreign exchange and foreign trade business e.g. import, export etc. It contributes greatly in the economy through import finance and export finance and thus, earn foreign exchange for the country.
  38. 38. 23 | P a g e 6. Formation of capital: Commercial Bank extends financial assistance for the formation of capital in the trade, commerce and industry in the country which expedites its economic development. 7. Creation of Investment Environment: Commercial Bank plays a significant role in creating investment environments in the country. 3.5.2 Public Utility Functions: In modern banking, commercial bank executes public utility services: 1. Remittance of Money: Remittance of money to the public from one place to another is one of the functions of commercial bank. Remittance is effected in the form of demand draft, telegraphic transfer etc. through different branches and correspondents home and abroad. 2. Help in trade and commerce: Commercial Bank helps expand trade and commerce. In inland and foreign trade customers are allowed credit accommodation in the form of letter of credit, bill purchased and discounted etc. 3. Safe custody of valuables: Commercial Bank introduces “locker‟ services to the customers for safe custody of valuables e.g. documents, shares, securities etc. 4. Help in Foreign Exchange business: While opening letter of credit, commercial bank obtains credit report of the suppliers and thus help expedite import and export business. 5. Act as a Referee: Commercial Bank acts as a referee for and on behalf of the customers. 6. Act as an Adviser: Commercial Bank provides valuable advice to the customers on different products, business growth and development, feasibility of business and industry.
  39. 39. 24 | P a g e 7. Collect utility service bills: As a social commitment, Commercial Bank collects utility service bills e.g. water, electricity, gas, telephone etc. from the public. 8. Purchase and sale of prize bonds, sanchaya patra, shares etc. Commercial Bank undertakes to purchase and sale of prize bonds, sanchaya patra, shares etc. as a part of social commitment. 9. Help people travel abroad: Commercial Bank helps customers in traveling abroad through issuance of traveler’s cheques, drafts, cash etc. in favour of the customers. 3.5.3 Agency Functions: Besides above stated functions, commercial bank acts as a representative of the customers. 1. Collection and payment: Commercial Bank is engaged in collection and payment of cheque, bill of exchange, promissory notes, pension, dividends, subscription, insurance premium, interest etc. on behalf of the clients. 2. Purchase and sale of shares and securities: Commercial Bank is entrusted with the responsibility of purchase and sale of shares and securities on behalf of the customers. 3. Maintenance of secrecy: Maintenance of secrecy is one of the most important functions of commercial bank. 4. Act as a trustee: Commercial Bank acts as a trustee on behalf of the customer. 5. Economic Development and Welfare activities: Commercial Bank contributes much for the welfare and economic development of the country.
  40. 40. 25 | P a g e Chapter - Four: General Banking Activities 4.1 General Banking 4.2 Account Opening Section 4.3 Remittance 4.4 Clearing 4.5 Cash 4.6 Accounts Department 4.7 Utility Services 4.8 Loans and Advances
  41. 41. 26 | P a g e 4.1 General Banking General banking department performs the core functions of bank, operates day-to-day transactions of banking operation. Every day it receives deposits from customers and meets their demand for cash. It opens new accounts, remits customer’s money from one place to another through issuing bank draft, pay order, telegraphic transfer, collects all bills. Since bank is bound to provide these services every day, general banking is also known as retail banking. General Banking Activities of Janata bank consists of: I. Account opening II. Remittance III. Cash IV. Clearing V. Accounts Section 4.2 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. Types of Account: ICMH Branch has the following types of accounts: 1. Current deposit (CD) account 2. Savings bank (SB) account 3. Short-term deposit (STD) 4. Fixed deposit (FDR) 5. JBDS (Janata Bank Deposit Scheme) 6. MDS (Medical Deposit Scheme) 7. EDS (Education Deposit Scheme) & SPS
  42. 42. 27 | P a g e 1. Current Deposit (CD) Account A current account is an account, which is generally opened by business people for their convenience. A current account is a running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number & amount withdrawals from current a/c. It does not allow any interest on this account. Current a/c may be individual, joint / partnership or can be formed any name. It provides the following facilities: I. Overdraft facility. II. Collection of checks, III. Transfer of money, IV. Rendering agency and V. General utility services. 2. Savings Bank (SB) Account This deposit is intended primarily for small-scale savers. The main object of this account is promotion of thrift. Savings account is meant for those who want to save a certain amount of their income and earn interest on that for future needs. All features are more or less like that of CD a/c except for some restriction that is imposed by the bank. Number of withdrawals over a period of time is limited. The withdrawing amount is not to exceed 25% of the total balance. This A/C mainly open a person’s name. Information need to know before open a Saving Account of Janata Bank Ltd. are-  Initial deposit requires to open a savings account is TK.200.  Minimum balance of TK. 200 should maintain in this account.  Interest rate is 3.5%  One cannot withdraw money not more than two times in a week.  To withdraw more than Tk. 20,000 seven days’ notice is required.  Service charge is not fixed.
  43. 43. 28 | P a g e Restrictions of Savings bank (SB) account: 1. Customer cannot withdraws money more than twice in a week. 2. If customers draw money more than 25% of the balance at a time then no interest is given for that n month. 3. If interest accrued less than TK. 200/- for six month then no interest is given to customer. 3. Fixed deposit receipt (FDR) account In this category are included the deposit with the bank for a fixed period which is specified at the time of making the deposit. Such deposits are therefore called fixed deposits or term deposits. A fixed deposit is repayable on the expiry of a specified period, chosen by the depositor to suit his purpose and to enable him to get back money as and when he needs it. The fixed deposit may be made for 3, 6, 12, 24 or 36 months. As the date of repayment of fixed deposit is determined in advance. The banker need not keep more cash reserves against it and can utilize such amount more profitably. The banker therefore offers higher rate of interest on such deposits the depositor parts with liquidity for a definite period. Fixed deposits have grown in importance and popularity in our country during recent years. When a matured FDR is withdrawn, the principle amount along with the interest amount (deducting tax from the total) is paid to the client. Interest Rate in Fixed Deposit- Name of the Banks Fixed Deposit < 1.00 crore 3 months but<6 months 6 months but<1 year 1 year but<2 years 2 years but<3 years 3 years and above JANATA 3.50 4.50 4.75 5.00 5.00 5.00 Table 4.1: Interest rate in FDR of Janata Bank Ltd.
  44. 44. 29 | P a g e Various types of Savings Schemes offered by Janata Bank: 4. Janata Bank Deposit Scheme (JBDS) Special advantage with this scheme is that after the scheduled period the client can withdraw the full amount or can draw pension on monthly basis. Besides the client can open account in his name in any branch. Procedure for operation of Janata Bank Deposit Scheme (JBDS):  The applicant should be of minimum 18 years age and Bangladeshi national.  The account holder can appoint one or more nominees.  On the death of the account holder his / her nominee can withdraw the whole amount of money.  The account holder can change or cancel his nominee through a written notice.  On the death of the account holder, the nominees will be entitled to withdraw the deposit according to the instruction of the account holder.  The account becomes inoperable on the death of the account holder.  The account under this scheme should be opened within the 10th day of any month against deposit of the first installment in cash. Features of the Janata Bank Deposit Scheme (JBDS): Monthly Installment Quantum TK. Money at the end of 10 years TK. 500 94609 1000 188218 2000 375435 5000 937088 10000 1873176 20000 3745352 Table 4.2: Features of the Janata Bank Deposit Scheme (JBDS)
  45. 45. 30 | P a g e Total Amount= Principal amount + Interest + Bonus amount The money will be paid out on maturity according to the table above, but Tax / Duty and other charges may be adjusted from the amount in the account. 5. Education saving Scheme (ESS) Client can nominate their children and open not more than three accounts. Procedure for operation of Education Saving Scheme (PSS): The applicant should be of minimum 18 years age and Bangladeshi national. Monthly Installment: Tk. 500, 1000, 2000, 3000, 4000, 5000, 6000, 7000, 8000, 9000 & 10000. The monthly installment must be paid by the 10th day of every month. In case of delay a fine @ TK. 2 per day of defaulted installment will be charged and the fine must be paid with the installment. 6. Features of the Education Saving Scheme (ESS) account: It may be 4 years, 6 years, 8 years & 10years. Installments are: TK.1000, 2000, 3000, 4000 & 5000 The maturity amount varies its time & installment. The money will be paid out on maturity, but Tax / Duty and other charges may be adjusted from the amount in the account. 7. Medical Deposit Scheme (MDS): The applicants / depositors should be of minimum 18 year age, being of sound mind, and a Bangladeshi national. Pre tenor encashment benefit:
  46. 46. 31 | P a g e 1. If you need money, you can take loan from the bank at the bank’s terms and condition. 2. In case of pre tenor encashment of the scheme, you can still get attractive benefit. The deposit under SBDS will be affected after expiry of each period as per the chart provided below: Monthly Installment Quantum (MIQ) TK. Money at the end of 5 years period. TK. 500 38,225 1,000 75,425 2,000 149,900 3,000 224,350 4,000 298,799 5,000 373,249 6,000 447,700 7,000 522,149 8,000 596,599 9,000 671,089 10,000 745,898 Table 4.3: Monthly Installment amount at the end 5 years deposit under SBDS The money will be paid out on maturity according to the table above, but Tax / Levy/ Excise and other charges as applicable will be adjusted from the amount. 4.2.1 Procedure to open an Account: (1) 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,
  47. 47. 32 | P a g e nominee(s), special instruction (if any), initial deposit, specimen signature(s) of the applicant(s), introducer’s information etc. The prospective customer should be properly introduced by the followings: I. An existing customer of the bank. II. Officials of the bank not below the rank of Assistant Officer. III. A respectable person of the locality who is well known to the Manager or authorized officer. (2) Two copies of passport size photograph duly attested by the introducer. (3) Signature of the prospective account holder in the account opening form and on the specimen signature card duly attested by the introducer. (4) Then the concerned authority will allocate a number for the new account. (5) The customer than deposit the “initial deposit” by filling up a deposit slips. Initial deposit to open a current account in JBL is Tk. 1000.00 and saving account is Tk. 500.00. After doing the above formalities, the branch provides the customer pay-in-slip and a chequebook. A customer has to fill up the ‘Requisition Slip’ for cheque-book. Then a new cheque-book will be filled with the account number of the customer and name of the branch in each page of the cheque-book. Then name and account number of the customer are registered in the ‘Cheque-book Issue Register’. After depositing the initial deposit, the account is considered to be opened. The requisition slips are maintained and recorded as vouchers. The serial number of the cheque-book is also entered in the computer for maintenance of records and to prevent any attempt of forgery. 4.2.2 Activities & papers required for opening an Account: 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
  48. 48. 33 | P a g e joint depositors. Any liability whatsoever incurred in respect of this account shall be joint and several.” Partnership firm: The following documents have to be submitted for preparing an account of a partnership firm: I. Partnership deed. II. If the partnership firm is a registered one, then one copy of registration forms. III. If not, then a copy of certificate from the notary public. Limited Company: For the opening of an account of a limited company, following documents have to be submitted: 1. A copy of resolution of the company that the company decided to open an account in the Janata Bank. 2. Certified true copy of the Memorandum & Articles of Association of the Company. 3. Certificate of Incorporation of the company for inspection and return along with a duly certified Photocopy for Bank’s records. 4. Certificate from the Registrar of Joint Stock Companies that the company is entitled to commence business (in case of Public Ltd. Co. For inspection and return) along with a duly certified Photocopy for Bank’s records. 5. Latest copy of balance sheet. 6. 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. 7. List of Directors with address (a latest certified copy of Form-XII)
  49. 49. 34 | P a g e 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 account.  Certified copy of Bye-Law and Regulations/Constitution.  Copy of Government Approval (if registered). Cooperative Society: Following documents have to be obtained in case of the account of Cooperative Society: 1. Copy of Bye-Law duly certified by the Co-operative Officer. 2. Up to date list of office bearers. 3. Resolution of the Executive Committee as regard of the account. 4. Certified copy of Certificate of Registration issued by the registrar, Cooperative societies. 5. Non-Govt. College / School / Madrasha / Muktab: 6. Following documents have to be obtained in case of the account of non-govt. College / school / madrasha / muktab: 7. Up to date list of Governing Body/Managing Committee. 8. Copy of Resolution of the Governing Body/Managing Committee authorizing opening and operation of the account duly certified by Gazetted Officer. 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.
  50. 50. 35 | P a g e 4.3 Remittance Remittance of funds is ancillary services of Janata Bank Ltd. It aids to remit fund from one place to another place on behalf of its customers as well as non- customers of Bank. JBL has its branches in the major cities of the country and therefore, it serves as one of the best mediums for remittance of funds from one place to another. Professional attitude, time bund payment facility & technological support in foreign remittance business make our bank first among the state owned banks and second among all banks in Bangladeshi market for consecutive five years. Updated technology, on-line remittance management system & spot cash remittance facility are playing key role to our remittance flow. To keep it up, attention has been given on specialized customer service & techno based distribution system. There are some ways of transferring fund domestically. The modes of transferring funds are: 1. Pay- Order (PO). 2. Demand Draft (DD). 3. Telegraphic Transfer (TT). 4. Mail Transfer (MT) 5. SDR 6. Pay Slip 1. Payment Order / Pay Order (P.O) This is an instrument issued by the branch of a bank for enabling the Customer/Purchaser to pay certain amount of money to the order of a certain person/firm/organization/office within the same clearinghouse area of the pay order- issuing branch. Characteristics of P.O 1. The issuing branch and paying branch are same. 2. Application for payment within the clearinghouse area of the issuing branch. 3. This may be open or can be crossed. 4. Charges
  51. 51. 36 | P a g e 2. Demand Draft (D.D) This is an instrument through which customer’s money is remitted to another person/firm/organization in outside the clearinghouse area from a branch of one bank to an outstation branch of the same bank or to a branch of another bank (with prior arrangement between that bank with the issuing branch). This is an order instrument in which the issuing branch gives instruction to the payee/drawer branch to pay certain amount of money to the order of certain person/firm/organization. Commission, vat and postage is charged on issue of DD entries for issuing DD. 3. Telegraphic/ Telephonic Transfer (T.T) This is a mode of transfer of customer’s money from a branch of one bank to another branch of the same bank through telegraphic/telephonic message. The issuing branch used to send the message of such remittance through telegraph/telephone adding certain code number or test number on the basis of test key apparatus developed by the concerned bank for its different branches. The drawer and the payee is required to have account with the bank in order for this transaction to take place. TT is issued against cash, check, letter of instruction etc. Characteristics of T.T 1. Issued by one branch to other branch and message is tale-communicated. 2. Remittance/ transfer of money is done through tested tale-messages. 3. Remittance is affected on the basis of tested message. 4. Test key apparatus is required. 5. Charge is Tk.50 6. Security Deposit Receipt (SDR) 7. It is used only for tender, auction etc. 4. Pay Slip: Pay Slip is a note given to a bank when they have been paid, detailing the amount of pay given, and the tax and insurance deducted. Which is used internally.
  52. 52. 37 | P a g e 4.4 Clearing Clearing house is an assembly of the locally operating scheduled banks for exchange of cheques, drafts, pay orders and other demand instruments drawn on each other and received from their respective customers for collection. The house meets at the appointed hour on all working days under the supervision of two central bank officers or its agent as the case may be, and works within the regulations framed therefore on the basis of prevailing banking practices. 4.5 Cash The cash section of any branch plays very significant role in Banking Section. Because, it deals with most liquid assets the Janata Bank Ltd., Local Office has an equipped cash section. This section receives cash from depositors and pay cash against cheque, draft, PO, and pay in slip over the counter. Every Bank must have a cash counter where customer withdrawn and deposit their money. When the valued client’s deposit their money at the cash counter they must have to full fill the deposit slip his/her own, then they sing as the depositor option’s then they deposit their money through cash officer at the cash counter. 4.6 Accounts Department Accounts Department is play most vital role in Banking. Accounts Department is a department with which each and every department is related. It records the profit & loss A/C and statement of assets and liabilities by applying book-keeping. The functions of it are theoretical & computerized based. Janata Bank Ltd. Local Office records its accounts daily, Weekly and monthly every record.
  53. 53. 38 | P a g e 4.7 Utility Services Besides normal banking operation, Janata Bank Limited offers special services to a large number of clients/agencies throughout the country. Under the network of utility service, customers of different govt. organizations, corporate bodies, local bodies, educational institutions, students, etc. are continuously getting benefits from the Bank.  Bill Collection  Gas bills of Titas, Bakhrabad and Jalalabad Gas Transmission and Distribution  Companies.  Electricity bills of Dhaka Electricity Supply Authority, Dhaka Electricity Company,  Bangladesh Power Development Board and Rural Electrification Board.  Telephone bills of Telegraph and Telephone Board.  Water/Sewerage bills of Water and Sewerage Authority.  Municipal holding tax of City Corporation/Municipalities.  A pilot scheme is underway to provide personalized services to our clients. Payments Made On Behalf Of Govt. To:  Non- Govt. teachers’ salaries  Girl Students scholarship/stipend & Primary Student Stipend  Army pension  Women Allowances  Old-age Allowances 4.8 Loans and Advances A loan is a debt provided by an entity (organization or individual) to another entity at an interest rate, and evidenced by a note which specifies, among other things, the principal amount, interest rate, and date of repayment. A loan entails the reallocation of the subject asset(s) for a period of time, between the lender and the borrower.
  54. 54. 39 | P a g e The making of loans and advances has always been prominent and profitable function of a bank. Sanctioning credit to customers and others out of the funds at its deposal is one of the principle services of a modern bank. Advances by JANATA Bank are made in different forms. Such as: 1. Overdraft 2. Cash credit 3. Term loan 4. Bills Portfolio 5. Packing Credit 6. Bank Guarantee 7. Commercial Loan 1. Cash Credit (C.C): A Cash Credit is an arrangement by which the customer is allowed to borrow up to a certain limit. This is a permanent arrangement and the customer need not borrow the sanctioned amount at once, but draw the amount as when required. He can put back any surplus amount, which he may find with him. Thus cash credit is an active and running account to which deposit and withdraws may be elected frequently. Interest is charged only for the amount withdrawn and not for the limit amount. If customer does not use the cash credit limit to fulfill extent, the bank makes a commitment charge. Cash Credit provides elastic form of borrowing since the limit fluctuates according to the needs of businessman. Cash Credit is favorite mode of borrowing by large commercial and industrialists for meeting their working capital requirements. The limit of cash credit is allowed generally for one year. 2. Overdraft (OD): The overdraft is a kind of advances always on a current account operated upon by cheque. The customer may be sanctioned a certain limit upon which he can overdraw his current account within a stipulated period. Here, withdrawal or deposits can be made any number of times of the convenience of the borrower provided the total amount withdrawn does not, at any time exceed the agreed limit. Interest is calculated and charged only on the actual debit balance on daily (produced) basis. While in a current
  55. 55. 40 | P a g e account cheques are honored if the balance is in credit, the OD arrangement enables a customer to draw over and above his own balance up to the extent of the limit stipulated. 3. Term Loan: The loan which, is repayable in fixed fixture date, is called term loan. This loan is made to large well-established business enterprise for financing capital expenditure. Businessman requires this loan for purchase or renovation of funds, buildings, and factory sheds, and machinery etc. the loan is to be repaid for according to a scheme of repayment by installments. Installments may be monthly, quarterly, and semiannually, annually depending on type of loan. This type of is given for long term, mid-term, short term and requires large investment. Market study and environment is necessary before allowing such loan. 4. Staff Loan: Janata Bank provides loan facilities to its employees. Interest rates vary on the nature and objective of loan. Basically staff loan is disbursed for staff house building purpose and household consumption. In case of staff loan repayment procedure is followed on monthly basis. 5. Bills Portfolio: Bank can allow credit to customers in the way of purchasing and discounting bills. When client submit bills, a margin (covering also the interest on the loan) amount is deducted from the face value of the bill and the rest is provided to the client .Bills can be local or foreign. This may be clean or documentary. Documentary bill is supported by various documents such as — I. Local Bill Purchase supported by Documents [LBP (D)] II. Foreign Bill Purchase supported by Documents [LBP (D)]
  56. 56. 41 | P a g e 6. Bank Guarantee: Bank Guarantee is also a non-funded facility provided to the client. Bank on behalf of the client undertakes to pay agreed amount of money at certain time if client fails in due performance. Bank Guarantee is generally provided in Lieu of earnest money for bidding in tender by the client (Bid Bond) or as guarantee for due performance of contracted work (Performance Guarantee). Janata Bank generally provides guarantee facility for maximum one year. 7. Commercial Loan: This type of credit facilities is mainly related to post import financing. It is given for short period. PAD, LIM, LTR are fall in this category. A detail about these credits has been discussed below- PAD: This means payment against documents. After getting documents from negotiating bank-opening bank informs importer for clear the documents and bank creates a loan account. 30 days are allowed for this type of loan. Bank charge interest @ 13% in this credit facility. The Bank that establishes the letter of credit is bound to honor its commitment to pay for import bills when these are presented for payment, if drawn strictly in terms of the letter of credit. The foreign correspondent, which negotiates the documents, gets payment as per stipulated reimbursement terms of the L/C to the debit of the account of the L/C opening bank’s F.C account. The opening bank lodge the shipping documents in their books and responds to the debit advice originated by foreign correspondent to the debit of payment against documents (PAD) account. In fact, the amount stands as advance to the importer, which is adjusted by delivery of documents against payment, or by allowing post import finance such as LIM or LTR. LIM: Loan against Imported Merchandise (LIM) is connected with import facilities. As per pre-arrangement or under forced situation when the client is unable torture the LC documents, bank then clear the imported goods from the customs and store it in banks
  57. 57. 42 | P a g e warehouse. LIM is given for maximum 60 days within which customer has to adjust liability and take delivery of the imported goods from the banks custody. Bank charges interest @ 13% on this credit facility. Loan against imported merchandise is allowed against imported merchandise storing the same in bank’s custody. The bank through its approved clearing agent clears the merchandise. The advance is adjusted by delivering the goods against payment by the importer. The documents remain with the Bank. LTR: Loan against Trust Receipts (LTR) is also post-import finance facility. This type of facility is given to creditworthy and selective customer. In LTR goods are sent to the customers’ go down after clear from Port. Customer has to adjust liability within 30, 60, 90 days or the days determine by the client and banker of taking such facility. Bank charge interest @ 13% for this credit facility.
  58. 58. 43 | P a g e Chapter - Five: Financial Analysis 5.1 Financial Performance of Janata Bank Ltd. 5.2 Areas of Financial Performance Analysis 5.3 Comparative Financial Highlights of JBL (2015- 2016) 5.4 Performance Analysis 5.5 Ratio Analysis of Agrani Bank Ltd. (2012-2016) 5.6 Comparison among other Govt. Banks
  59. 59. 44 | P a g e 5.1 Financial Performance of Janata Bank Ltd. Financial performance is a subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. This term is also used as a general measure of a firm's overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in aggregation. There are many different ways to measure financial performance, but all measures should be taken in aggregation. Line items such as revenue from operations, operating income or cash flow from operations can be used, as well as total unit sales. Furthermore, the analyst or investor may wish to look deeper into financial statements and seek out margin growth rates or any declining debt. Financial statement provides multiple years of data. Used together analysts can track performance measures across financial statements using several different methods for financial statement analysis, including vertical and horizontal analysis. 1. Vertical analysis is when each line item on the financial statement is listed as a percentage of another. 2. Horizontal analysis compares line items in each financial statement against previous time periods. 5.2 Areas of Financial Performance Analysis Financial analysts often assess the firm's production and productivity performance (total business performance), profitability performance, liquidity performance, working capital performance, fixed assets performance, fund flow performance and social performance. Various financial ratios analysis includes- 1. Working capital Analysis 2. Financial structure Analysis 3. Activity Analysis 4. Profitability Analysis.
  60. 60. 45 | P a g e 5.3 Comparative Financial Highlights of JBL (2015-2016) (BDT in million unless stated otherwise) Particulars 2016 2015 Increase/ Decrease Change (%)Income Statement Total revenue 54,528.08 55,678.82 (1,150.74) (2.07%) Total expenses 44,489.80 44,958.32 (468.52) (1.04%) Operating profit 10,038.28 10,720.50 (682.22) (6.36%) Profit before tax 3,650.16 6,560.05 (2,909.89) (44.36%) Profit after tax 2,605.48 4,807.88 (2,202.40) (45.81%) Earnings per share 13.61 25.12 (11.51) (45.81%) Net interest margin (NIM) 566.60 (3,327.53) 3,894.13 117.03% Assets & Liabilities Total assets 778,603.91 690,667.66 87,936.25 12.73% Total loans and advances 403,037.42 349,861.30 53,176.12 15.20% Property, plant and equipment 10,573.26 10,033.61 539.65 5.38% Total deposit 641,819.15 568,911.14 72,908.01 12.82% Shareholders’ equity 49,889.66 49,547.44 342.22 0.69% Capital Paid up capital 19,140.00 19,140.00 - - Capital maintained 43,189.82 37,128.33 6,061.49 16.33% Risk weighted assets (RWA) 404,088.92 365,625.15 38,463.77 10.52% Capital required 40,408.89 36,562.52 3,846.38 10.52% Capital to risk weighted asset ratio (CRAR) 10.69% 10.16% 0.53% - Share Information Earnings per share (EPS) 13.61 25.12 (11.51) (45.81%) Net assets value per share (NAVPS) 260.66 258.87 1.79 0.69% Net operating cash flow per share (NOCFPS) 103.13 145.87 (42.74) (29.30%) Number of Share 191.40 191.40 - - Regulatory Ratio
  61. 61. 46 | P a g e Cash reserve requirement (CRR) 6.74% 6.49% 0.24% - Statutory liquidity ratio (SLR) 35.95% 39.38% (3.43%) - Capital to risk weighted asset ratio (CRAR) 10.69% 10.16% 0.53% - Credit deposit ratio 62.80% 61.50% 1.30% - Asset Quality Earning assets 605,444.04 548,634.47 56,809.57 10.35% Amount of classified loans and advances 59,359.80 43,181.70 16,178.10 37.47% % of classified loans and advances 14.73% 12.34% 2.39% 19.33% Required provision for loans and advances 23,565.50 20,361.50 3,204.00 15.74% Provision maintained for loans and advances 23,817.06 20,445.27 3,371.79 16.49% Classified other assets 2,790.45 2,682.01 108.44 4.04% Classified investment 222.05 187.22 34.83 18.60% Total classified assets 62,372.30 46,050.93 16,321.37 35.44% Table 5.1: Comparative Financial Highlights of JBL (2015-2016)
  62. 62. 47 | P a g e 5.4 Performance Analysis 5.4.1 Net Operating Profit (BDT. In million) Particulars Years 2012 2013 2014 2015 2016 Net Operating Profit 14,534 12,127 10,683 10,720 10,038 Table 5.2: Net Operating Profit of Janata Bank Ltd. (2012-2016) Fig 5.1: Net Operating Profit of Janata Bank Ltd. (2012-2016) Interpretation: From 2012 to 2016 net operating profit of Janata Bank Ltd. gradually decreases. In 2012 net operating profit was Tk. 14,534 million where in 2016 it is now Tk. 10,038 million. In the year 2013 and 2014 net operating profit decrease in higher rate. But in 2015 net operating profit was increase from previous year, but it decrease again in next year. 14,534 12,127 10,683 10,720 10,038 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2012 2013 2014 2015 2016 NET OPERATING PROFIT
  63. 63. 48 | P a g e 5.4.2 Net Profit after Tax (BDT. In million) Particulars Years 2012 2013 2014 2015 2016 Net Profit After Tax (15,280) 9,551 3,813 4,808 2,605 Table 5.3: Net Profit after Tax of Janata Bank Ltd. (2012-2016) Fig 5.2: Net Profit after Tax of Janata Bank Ltd. (2012-2016) Interpretation: From 2012 to 2016 net profit after tax of Janata Bank Ltd. fluctuate. In 2012 net loss after tax of Janata Bank Ltd. was Tk. 15,280 million, where in 2016 net profit after tax is now Tk. 2,605 million. In the year 2013 net profit after tax increase at a rate where Janata bank came out from loss to profit. But in 2014 net profit after tax decrease again. -15,280 9,551 3,813 4,808 2,605 -20,000 -15,000 -10,000 -5,000 0 5,000 10,000 15,000 2012 2013 2014 2015 2016 Net Profit After Tax
  64. 64. 49 | P a g e 5.4.3 Total Assets (BDT. In million) Particulars Years 2012 2013 2014 2015 2016 Total Assets 511,123 586,083 628,415 690,668 778,604 Table 5.4: Total Assets of Janata Bank Ltd. (2012-2016) Fig 5.3: Total Assets of Janata Bank Ltd. (2012-2016) Interpretation: From 2012 to 2016 total assets of Janata Bank Ltd. gradually increases. In 2012 total assets was Tk. 511,123 million where in 2016 it is now Tk. 778,604 million. It shows that, Janata bank has strong back hold. 511,123 586,083 628,415 690,668 778,604 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 2012 2013 2014 2015 2016 TOTAL ASSETS
  65. 65. 50 | P a g e 5.4.4 Deposits and Advances (BDT. In million) Particulars Years 2012 2013 2014 2015 2016 Deposits 409,767 478,536 516,011 568,911 641,819 Advances 305,340 285,748 319,773 349,861 403,037 Table 5.5: Total Deposits & Advances of Janata Bank Ltd. (2012-2016) Fig 5.4: Total Deposits & Advances of Janata Bank Ltd. (2012-2016) Interpretation: From 2012 to 2016 in Janata Bank Ltd. total deposit and loan both increase consistently. In 2012 total deposit and total loan was Tk. 409,767 million & Tk. 305,340 million where in 2016 it is now Tk. 641,819 million & Tk. 403,037 million. It shows that, Janata bank expand its area of work. 409,767 478,536 516,011 568,911 641,819 305,340 285,748 319,773 349,861 403,037 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 2012 2013 2014 2015 2016 Total Deposits & Advances of Janata Bank Ltd. Deposits Advances
  66. 66. 51 | P a g e 5.4.5 Import, Export & Foreign Remittance (BDT. In million) Particulars Years 2012 2013 2014 2015 2016 Import 188,284 176,671 144,557 147,182 126,650 Export 156,525 153,252 154,080 145,374 154,454 Foreign Remittance 100,089 103,982 106,677 101,348 90,082 Table 5.6: Import, Export & Foreign Remittance of Janata Bank Ltd. (2012-2016) Fig 5.5: Import, Export & Foreign Remittance of Janata Bank Ltd. (2012-2016) Interpretation: From 2012 to 2016 Import, Export & Foreign Remittance of Janata Bank Ltd. fluctuate continuously. In 2012 Import, Export & Foreign Remittance was Tk. 188,284 million, Tk. 156,525 million & Tk. 100,089 million where in 2016 it is now Tk. 126,650 million, Tk. 154,454 million & Tk. 90,082 million. It shows that, Janata bank expand its area of work. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 2012 2013 2014 2015 2016 Import, Export & Foreign Remittance Import Export Foreign Remittance
  67. 67. 52 | P a g e 5.5 Ratio Analysis of Agrani Bank Ltd. (2012-2016) 5.5.1 Liquidity Ratio  Current Ratio Current Ratio The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations. To gauge this ability, the current ratio considers the current total assets of a company (both liquid and illiquid) relative to that company’s current total liabilities. The formula for calculating a company’s current ratio is: Current Ratio = Current Assets / Current Liabilities The current ratio is called “current” because, unlike some other liquidity ratios, it incorporates all current assets and liabilities. Current ratio of Janata Bank Ltd. & Agrani Bank Ltd. (2016-2012) are given: ParticularsYears 2012 2013 2014 2015 2016 Current Ratio of JBL 1.02 1.04 1.31 1.02 1.04 Current Ratio of ABL 1.60 2.21 1.19 1.17 1.08 Table 5.7: Current Ratio of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) Fig 5.6: Current Ratio of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 0 0.5 1 1.5 2 2.5 2012 2013 2014 2015 2016 1.02 1.04 1.31 1.02 1.04 1.6 2.21 1.19 1.17 1.08 Current Ratio Current Ratio of JBL Current Ratio of ABL
  68. 68. 53 | P a g e  Cash reserve ratio or Liquidity ratio The Cash Reserve Ratio refers to a certain percentage of total deposits the commercial banks are required to maintain in the form of cash reserve with the central bank. The objective of maintaining the cash reserve is to prevent the shortage of funds in meeting the demand by the depositor. The amount of reserve to be maintained depends on the bank’s experience regarding the cash demand by the depositors. If there had been no government rules, the commercial banks would keep a very low percentage of their deposits in the form of reserves. ParticularsYears 2012 2013 2014 2015 2016 Cash reserve ratio of JBL 6.26% 5.70% 6.83% 6.49% 6.74% Table 5.8: Cash reserve ratio of Janata Bank Ltd. (2012-2016) Fig 5.7: Cash reserve ratio of Janata Bank Ltd. (2012-2016) 5.5.2 Profitability  Return on investment (ROI): A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ROI measures the amount Cash reserve ratio of JBL 5.00% 5.50% 6.00% 6.50% 7.00% 2012 2013 2014 2015 2016 Cash reserve ratio of JBL
  69. 69. 54 | P a g e of return on an investment relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio. The return on investment formula is: The Return on investment (ROI) of Janata Bank Ltd. & Agrani Bank Ltd. are given below- ParticularsYears 2012 2013 2014 2015 2016 Return on investment of JBL 8.01% 9.39% 8.47% 8.61% 5.83% Return on investment of ABL 8.70% 7.43% 8.54% 7.27% 6.86% Table 5.9: Return on Investment (ROI) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) Fig 5.8: Return on Investment (ROI) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 2012 2013 2014 2015 2016 0.00% 5.00% 10.00% Return on investment of JBL Return on investment of ABL Return on investment (ROI) 2012 2013 2014 2015 2016
  70. 70. 55 | P a g e  Return on assets (ROA): Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's management is at using its assets to generate earnings. Return on assets is displayed as a percentage and it’s calculated as: ROA = Net Income / Total Assets Note: Some investors add interest expense back into net income when performing this calculation because they'd like to use operating returns before cost of borrowing. The Return on Assets (ROA) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) are given below- ParticularsYears 2012 2013 2014 2015 2016 Return on Assets of JBL (3.50%) 1.42% 0.61% 0.70% 0.33% Return on Assets of ABL (4.92%) 2.04% 0.40% 0.12% 1.12% Table 5.10: Return on Assets (ROA) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) Fig 5.9: Return on Assets (ROA) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) -6.00% -5.00% -4.00% -3.00% -2.00% -1.00% 0.00% 1.00% 2.00% 3.00% 2012 2013 2014 2015 2016 Chart Title Return on Assets of ABL Return on Assets of JBL
  71. 71. 56 | P a g e  Return on Equity (ROE): Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder's Equity Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock). Shareholder's equity does not include preferred shares. The Return on Equity (ROE) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) are given below- ParticularsYears 2012 2013 2014 2015 2016 Return on Equity of JBL (49.74%) 30.09% 9.66% 9.70% 5.22% Return on Equity of ABL (259.94%) 25.39% 5.02% 1.46% (19.06%) Table 5.11: Return on Equity (ROE) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) Fig 5.10: Return on Equity (ROE) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) -300.00% -250.00% -200.00% -150.00% -100.00% -50.00% 0.00% 50.00% Return on Equity of JBL Return on Equity of ABL Chart Title 2012 2013 2014 2015 2016
  72. 72. 57 | P a g e 5.5.3 Market Prospect ratios  Earnings per share (EPS): Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability. EPS is calculated as: EPS = (Net Income - Dividends on Preferred Stock)/Average Outstanding Shares The Earnings per share (EPS) of Agrani Bank Ltd. are given below- ParticularsYears 2012 2013 2014 2015 2016 Earnings per share of JBL (138.91) 86.31 19.92 25.12 13.61 Earnings per share of ABL (187.84) 91.28 9.58 3.15 (33.63) Table 5.12: Earnings per Share (EPS) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) Fig 5.11: Earnings per Share (EPS) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016)  Net asset value per share (NAVPS): The net asset value per share (NAVPS), also referred to as the book value per share, is an expression for net asset value that represents the value per share of a mutual fund, -250 -200 -150 -100 -50 0 50 100 150 2012 2013 2014 2015 2016 Earnings per share (EPS) Earnings per share of JBL Earnings per share of ABL
  73. 73. 58 | P a g e exchange-traded fund (ETF) or a closed-end fund. It is calculated by dividing the total net asset value of the fund or company by the number of shares outstanding. The formula for the NAVPS is simply: NAVPS = (assets - liabilities) / number of outstanding shares The Net asset value per share (NAVPS) of Agrani Bank Ltd. are given below- ParticularsYears 2012 2013 2014 2015 2016 Net asset value per share of JBL 158.88 193.92 206.14 258.87 260.66 Net asset value per share of ABL 72 172 191 216 177 Table 5.13: Net Assets Value per Share (NAVPS) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) Fig 5.12: Net Assets Value per Share (NAVPS) of Janata Bank Ltd. & Agrani Bank Ltd. (2012-2016) 5.5.4 Capital Adequacy Ratio The capital adequacy ratio (CAR) is a measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures. Also known as capital-to-risk weighted assets ratio (CRAR), it is used to protect depositors and promote the stability and efficiency of financial systems around the world. 158.88 72 193.92 172 206.14 191 258.87 216 260.66 177 0 50 100 150 200 250 300 Net asset value per share of JBL Net asset value per share of ABL Net Asset Value per Share (NAVPS) 2012 2013 2014 2015 2016
  74. 74. 59 | P a g e Two types of capital are measured: Tier one capital, which can absorb losses without a bank being required to cease trading, and Tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors. The formula for calculating a company’s capital adequacy ratio (CAR) is:  Tier 1 Capital Tier 1 capital, used to describe the capital adequacy of a bank, is core capital that includes equity capital and disclosed reserves. Equity capital is inclusive of instruments that cannot be redeemed at the option of the holder. Tier 1 capital is essentially the most perfect form of a bank’s capital — the money the bank has stored to keep it functioning through all the risky transactions it performs, such as trading/investing and lending.  Tier 2 capital Tier 2 capital is the secondary component of bank capital, in addition to Tier 1 capital, that makes up a bank's required reserves. Tier 2 capital is designated as supplementary capital, and is composed of items such as revaluation reserves, undisclosed reserves, hybrid instruments and subordinated term debt. In the calculation of a bank's reserve requirements, Tier 2 capital is considered less secure than Tier 1 capital, and in the United States, the overall bank capital requirement is partially based on the weighted risk of a bank’s assets. The capital adequacy ratio (CAR) of Agrani Bank Ltd. are given below- ParticularsYears 2012 2013 2014 2015 2016 Capital Adequacy Ratio 3.70% 10.27% 10.30% 10.16% 10.69% Tier 1 capital 1.85% 7.85% 8.07% 8.20% 8.85% Tier 2 capital 1.85% 2.42% 2.23% 1.96% 1.84% Table 5.14: Capital Adequacy Ratio (CAR) of Janata Bank Ltd. (2012-2016)
  75. 75. 60 | P a g e Fig: Capital Adequacy Ratio (CAR) of Janata Bank Ltd. (2012-2016) 5.6 Comparison among other Govt. Banks (Figure in million except otherwise stated) For the year 2016 Particulars JBL SBL ABL RBL Interest Income 31,897 31,010 21,446 13,509 Interest Expenses 31,331 47,352 20,620 15,263 Total Revenues 54,528 71,187 41,416 21,602 Total Expenses 44,489 66,727 35,865 22,490 Profit After Tax 2,605 1,516 (6,970) (1259) Total Assets 778,603 1,200,590 623,567 334,108 Shareholders’ Equity 49,889 67,375 36,577 11,656 Loan & Advances 403,037 384,538 265,871 175,450 Deposits 641,819 1,031,608 494,050 279,116 Earnings Per Share 13.61 3.96 (33.63) (4.56) Fig 5.15: Comparison among Janata Bank Ltd.; Sonali Bank Ltd., Agrani Bank Ltd. and Rupali Bank Ltd. (For the year-2016) 2012 2013 2014 2015 2016 0.00% 5.00% 10.00% 15.00% Capital Adequacy Ratio Tier 1 capital Tier 2 capital Capital Adequacy Ratio 2012 2013 2014 2015 2016
  76. 76. 61 | P a g e Fig 5.14: Comparison among Janata Bank Ltd.; Sonali Bank Ltd., Agrani Bank Ltd. and Rupali Bank Ltd. (For the year-2016) Intere st Incom e Intere st Expen ses Total Reven ues Total Expen ses Profit After Tax Total Assets Share holder s’ Equity Loan & Advan ces Depos its Earnin gs Per Share JBL 31,897 31,331 54,528 44,489 2,605 778,603 49,889 403,037 641,819 13.61 For the year SBL 31,010 47,352 71,187 66,727 1,516 1,200,5 67,375 384,538 1,031,6 3.96 2016 ABL 21,446 20,620 41,416 35,865 -6,970 623,567 36,577 265,871 494,050 -33.63 2016 RBL 13,509 15,263 21,602 22,490 -1259 334,108 11,656 175,450 279,116 -4.56 -200,000 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 Comparison among other Govt. Banks JBL For the year SBL 2016 ABL 2016 RBL
  77. 77. 62 | P a g e Chapter - Six: Findings, Recommendations & Conclusion 6.1 Findings 6.2 Recommendations 6.3 Conclusion
  78. 78. 63 | P a g e 6.1 Findings Janata Bank has focused on enhancing the long term sustainability of the bank, building value for the shareholders, employees and the wider community. Its activities are driven by ethical business practices and sense of responsibilities to all stakeholders. Since the start of the global economic crisis, many felt that Bangladesh will not be adversely affected by the crisis. But now we can see that slowly and gradually we are also getting affected. Bangladesh is captive to what transpires in international market and economies of leading countries. Against the background Bangladesh cannot be immune from the global economic slowdown and is most likely to be affected sooner or later. During my report preparation I have gone through several departments of General Banking and detected some problems from my own practical experience as follows: 1. Heavily rely on traditional system specially in general banking department. 2. The newly prescribed account opening form is very much informative. It takes about half an hour to properly fill in the form. When four or five people come at the same time to account opening purpose, it is very difficult for the relevant officer to provide satisfied service to the client. 3. According to some clients, introducer is one of the problems to open an account. If a person who is new in the city wants to open account, it is a problem for him/her to arrange an introducer of SB or CD account holder. 4. Lengthy process of issuing cheque book, Pay order, Bank draft cause. Job responsibilities are not specified to each and every employee of this division. 5. Inadequate skilled manpower in Janata bank Ltd, because there is lack of proper training arrangement of employees in the general banking section. For example, most of the new recruited employees learn their job tasks by observing their senior employee. 6. Insufficient modern sophisticated technology change such as use of new software there are few staff who are lacking in computer knowledge and are not efficient chough to finish every task immediately. So, before utilizing new technology proper training should be arranged. 7. Sometime the branch’s computers remain out of order and it is also true for the photocopiers. 8. Insufficient forms and brochures will hamper customer service.
  79. 79. 64 | P a g e 6.2 Recommendations As per earnest observation some suggestions for the improvement of the situations are given below: 1. It is necessary to implement modern banking process instead of traditional system. It should be more computerized means dynamic. 2. The form should be precise with the quality information to the points of the client rather unnecessary or vague information. This can create the opportunity to serve more people in short time. 3. If the interested clients have proper documentation in favor of his/her identity then there should be probation for avoiding introducer. 4. Bank should formulate simple process for issuing cheque book, Pay order, and Bank draft. 5. To recruit sufficient skilled manpower because the bank employees should communicate properly with customers about their deposit and other schemes. 6. To hire and install sufficient modern sophisticated technology because of present market demand of the customer and the educated customers now want technology based banking but customs are confused about services. 7. Sufficient Forms and Brochures must be maintained in sufficient quantity. 8. Low cost deposit should be increased by procuring more current account and savings account of the total deposit to reduce total cost of fund. 9. Ensure Proper Maintenance and cleanliness of Office Premises. Every branch is supposed to be very neat and clean and well decorated because it matters to attract customers. 10. Branch should give requisition for new more printers and photocopy machines to improve their service. 11. Ensuring transparency of its financial reports. 12. Proper training should be given to all employees on regular basis to identify the suspicious transactions for Anti Money Laundering compliance policy. 13. JB should establish ATM booth to nearby each JB bank. 14. JB should do some promotional activities.
  80. 80. 65 | P a g e 6.3 Conclusion During the three-month internship program of Janata Bank Ltd. at, ICMH Branch, almost the entire almost desk has been observed more or less. Gaining knowledge of general banking to compare this practical knowledge with theoretical knowledge. Though all departments and sections are covered in the internship program, it is not possible to go to the depth or each activities of division because of time limitation. So, objectives of this internship program have not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objectives the internship program. The banking sector of Bangladesh played an important role towards economic growth in Bangladesh. The financial sector of Bangladesh is now considered to be the most regulated sector as compared to other sectors. Janata bank limited is the second generation bank in the country. Janata Bank Ltd. has made commendable improvement over the past years. I am proud to get an opportunity to continue my internee and my career in my organization. I tried to gather experience in general banking and summarize all the information within the report. It will also be helpful for the bank management if they carefully analyze the problem and consider recommendation in this paper and take necessary actions for corrective measures. JBL always try to increase their profitability through different service reaching to the customer hand. To be more near to the customer they are increasing their branches as well as services. And that’s why their no. of branches is more than 911 (910 in annual Report 2016). More services providing more easily how can be done always they analyze about that. To be more than 45 years’ experience, they have the great advantage to journey a long path. They believe that customers’ satisfaction is the indicator of wealth maximization. General Banking is undoubtedly one of the major departments of any bank. To take any banking services, one has to fulfill all the requirements of this department first. The nature of the relationship between a banker and a customer depends upon the service rendered by the personnel of general banking department. During my job I got lots of opportunity to achieve experience how to deal with the clients what the behavior should

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