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Assignment on Historical Background of The City Bank Limited
Historical Background of The City Bank Limited:
City Bank is one of the oldest private Commercial Banks operating in Bangladesh. It is a top
bank among the oldest five Commercial Banks in the country which started their operations in
1983. The Bank started its journey on 27th March 1983 through opening its first branch at B.
B. Avenue Branch in the capital, Dhaka city. It was the visionary entrepreneurship of around
13 local businessmen who braved the immense uncertainties and risks with courage and zeal
that made the establishment & forward march of the bank possible. Those sponsor directors
commenced the journey with only Taka 3.4 crore worth of Capital, which now is a respectable
Taka 330.77 crore as capital & reserve. City Bank is among the very few local banks which do
not follow the traditional, decentralized, geographically managed, branch based business or
profit model.
Under a real-time online banking platform, 4 business divisions are supported at the back by
a robust service delivery or operations setup and also a smart IT Backbone. Such centralized
business segment based business & operating model ensure specialized treatment and
services to the bank’s different customer segments.
The bank currently has 87 online branches and 10 SME service centers spread across the
length & breadth of the country that include a fully fledged Islami Banking branch. Besides
these traditional delivery points, the bank is also very active in the alternative delivery area. It
currently has 46 ATMs of its own; and ATM sharing arrangement with a partner bank that
has more than 550 ATMs in place; SMS Banking; Interest Banking and so on. It already
started its Customer Call Center operation. The bank has a plan to end the current year with
100 own ATMs.
City Bank is the first bank in Bangladesh to have issued Dual Currency Credit Card. The
bank is a principal member of VISA international and it issues both Local Currency (Taka) &
Foreign Currency (US Dollar) card limits in a single plastic. VISA Debit Card is another
popular product which the bank is pushing hard in order to ease out the queues at the branch
created by its astounding base of some 400,000 retail customers. The launch of VISA Prepaid
Card for the travel sector is currently underway.
City Bank has launched American Express Credit Card and American Express Gold Credit
card in November 2009. City Bank is the local caretaker of the brand and is responsible for all
operations supporting the issuing of the new credit cards, including billing and accounting,
customer service, credit management and charge authorizations, as well as marketing the
cards in Bangladesh. Both cards are international cards and accepted by the millions of
merchants operating on the American Express global merchant network in over 200 countries
and territories including Bangladesh. City Bank also introduced exclusive privileges for the
card members under the American Express Selects program in Bangladesh. This will entitled
any American Express card members to enjoy fantastic savings on retail and dining at some
of the finest establishment in Bangladesh. It also provides incredible privileges all over the
globe.
City Bank is one of the largest corporate banks in the country with a current business model
that heavily encourages and supports the growth of the bank in Retail and SME Banking. The
bank is very much on its way to opening many independent SME centers across the country
within a short time. The bank is also very active in the workers’ foreign remittance business. It
has strong tie-ups with major exchange companies in the Middle East, Europe, Far East &
USA, from where thousands of individual remittances come to the country every month for
disbursements through the bank’s large network of 97 online branches.The current senior
management leaders of the bank consist of mostly people from the multinational banks with
superiormanagement skills and knowledge in their respective “specialized” areas. The newly
launched logo and the pay-off line of the bank are just one initial step towards reaching that
point.
City Bank prides itself in offering a very personalized and friendly customer service. It has in
place a customized service excellence model called GAP (Graceful-Appropriate-Pleasing) that
focuses on ensuring happy customers through setting benchmarks for the bank’s employees’
attitude, behavior, readiness level, accuracy and timelines of service quality.
The City Bank Limited was one of the 12 Banks of Bangladesh among the 500 Bank in Asia
for its asset, deposit & profit as evaluated by “Asia Week” in the year 2000. Other than that,
The City Bank Limited received the “Top Ten Company” award from the prime minister of the
People’s Republic of Bangladesh.
Mission, Vision and Objectives of CBL
Corporate Mission of CBL
To contribute to the socioeconomic development of the country
To attain the highest level of customer satisfaction through extension of services by
dedicated and motivated team of professional
To maintain continuous growth of market share ensuring Quality
To maximize bank’s profits by ensuring its steady growth
To maintain the high moral and ethical standards
To ensure participative management system and empowerment of Human Resources
To nurture an enabling environment where innovativeness and performance is rewarded.
Corporate Vision of CBL:
To be the leading bank in the country with best practices and highest social commitment.
Objectives of CBL:
Despite extreme competition among banks operating in Bangladesh, both local and
international The City Bank Limited made a remarkable progress practically in every sphere of
its functions. The active of the CBL are very implicit and vast comparing to that of other banks
in the country today. The theme of the bank is “For Relationship Banking”. The prime
objectives of the CBL are to create a strong capital base, to earn good profit and pay
satisfactory dividend to honorable shareholders with proper social commitments. To achieve
the objectives the management is continuously working for the improvement of bank’s assets
quality by identifying potential depositors and good borrowers. Because it believes “The line of
excellence never ends”. The strategic plans and business will be its strength in this very
competitive environment.
Source: Annual Report – 2009
Line of Business of CBL:
CBL manages its business and operation vertically from the head office through 4 distinct
business divisions namely
Corporate & Investment Banking;
Retail Banking (including Cards);
SME Banking; &
Treasury & Market Risks.
Three major functions of the Bank-
Taking Deposit
Extending Loans & Advances
Foreign Exchange Business
Deposits are often called the lifeblood of commercial banks. No commercial banks can be
thought of without deposits. In fact modern commercial banking starts with deposits from the
public followed by lending or financing trade, commerce and trade. Deposits are treated as:
Deposits as the major source of fund
Deposit as basis of lending
Deposit as source of income
Deposit and credit creation
Under the umbrella of Foreign exchange business there are three main functions as follows:
Export Business
Import Business
Foreign remittance
So in simple words, Banking means taking deposit, extending loan and advances and doing
foreign exchange business in order to attain profit & contribute to GDP.
Form the above discussion we can say that Bank as a financial intermediaries collects deposit
form surplus areas and provides loans and advances to deficit areas (where needed) and also
engaged itself in foreign exchange business, the sum-up of all these activities is known as
Banking.
The City Bank Limited is the first private sector Bank in Bangladesh. The Bank established in
March 27, 1983 with an authorized capital of Tk. 1.75 Billion under the entrepreneurship of
twelve prominent & leading businessman of the country. Today The City Bank serves its
customers at home & abroad with 83 branches spread over the country & about three
hundred oversea correspondences covering all the major cities and business center of the
world.
Current Functions of CBL:
a) Description of Services Offered by CBL: The Services offered by CBL are discussed
below:
1. Service of CBL
The CBL concentrates the following categories of banking services:
General Banking
Retail Banking
Loans and Advances
SME
Corporate
International Trade and Foreign Exchange-
Export
Import
Remittance
Online Banking Services-
Debit Card and Duel Currency Credit Card Facilities & The American Express Cards.
2. Retail Banking:
One of the most remarkable success stories of last 50 years Banking Industry globally has
been the conceptualization and innovative execution of banking with individual customers,
their friends and families. The industry has termed it as Retail Banking or Personal Banking or
Consumer Banking. The City Bank limited recently started its journey in Retail Banking. More
than 700 staffs have been trained so far on the vital concepts of service excellence and sales.
In the product side ATM fleet has been launched, Debit card has been issued, SMS Banking
has been offered, 3 new deposit products have come up and our communications in media
has been increased, manifold in the endeavor to build a Retail Banking brand namely “City
Retail Happiness Counts”. Retail Banking includes:
Deposit
Loan
Debit Card
Credit Card
NRB
3. SME Banking:
Considering the potential growth and demand situation the City Bank Limited has extended
credit facilities to small and medium enterprises through SME Banking in the year 2006 and
2007. A separate division has established in the Head Office with collaboration of all branches
to process and handle loans under SME for attaining a respectable market share and
successful operation of the scheme. The Bank has organized several training program for
development of adequate human resources.
Following services are provided by SME Banking-
City Muldhan
City Sheba
City Shulov
City Nokshi
In the year 2007, major initiatives have been taken to re-launch SME Banking. Organization
and processes are being restructured with focus to enhance business. SME asset size in
2007 went up to BDT 2,000 million and the number of borrowers in SME was 3,000.The bank
ha s also taken measures to provide complete banking solution to SME by devising both cash
and non-cash based product appropriate and fit to support the requirements of the concerned
business. Small enterprise will have a better opportunity to avail PPG based funded product.
The needs of medium sized enterprises are also being fulfilled through multiple products
offering in the conventional manner. The City Bank SME launched “City Nokshi”. “City
Nokshi” is a 10 percent rate per annum as per the guidelines of Bangladesh Bank and is
available only for the women entrepreneur of the country.
4. Corporate and Investment Banking:
As part of its commitment to provide global quality service. The City Bank Ltd, one of the
largest local Banks, has launched its Corporate & Investment Banking Division recently. This
shift , from branch banking model to business driven matrix, is the first step of the banks plan
to revitalize its way of doing business in 2008. The C&I Division will comprise of a number of
relationship teams centered in Dhaka and Chittagong to provide who will act as one stop
contact point for the customers of the bank. This model has been successfully globally to
provide better service and create increased customer satisfaction. The relationship teams
have been staffed mainly through internal quality resources. The C& I relationship teams have
already taken over the existing large accounts and servicing the customers to their
satisfaction. Total new booking in last few months is more than BDT 3,000 million. The C&I
Division will also have product teams i.e. structured finance, Islamic finance, Leasing, Cash
management who will meet the specialized product needs of the corporate customers. The
time ahead is going to be very challenging for C&I. The major challenges shall be to increase
the quality of the portfolio keeping in mind the business targets and also ensure quality
services in this transaction phases with timely formation and support from other departments
i.e. centralized credit administration, operations.
Following services are provided by Corporate Banking:
Working Capital Finance
Trade Finance
Short/mid-Term Finance
Project Finance
Islamic Finance
Structured Finance
Cash Management
Investment Banking
Schedule of Charges
Interest Rate on Lending
5. Dual Currency Credit Card:
Today’s customer wants services and information to be provided at all times and places. This
has become possible by ATMs and POS terminals and helped banks in
achieving “Anytime, Anywhere Banking”. Therefore there is a need for an automated system
that will connect the branches through online to provide better services to the customers. The
most modern technology based bank product for making hassle free financial transactions and
drawing of cash money all over the world is given by Credit Card. The City Bank Ltd is the first
among domestic banks to introduce a unique dual currency CITY CARD under the logo
of VISA International in Bangladesh. After obtaining principle membership of VISA on
19th February, 2003 the bank is pleasing its commitment to be leader as card issuer in the
arena. Tremendous responses are there from the market for this plastic money. Up to March,
2008 the number of CITYCARD is 10,215.
6. Computerization and Online Service:
With computerization the bank had gone another step ahead towards providing pragmatic,
safe and prompt banking services. All 84 branches including Islamic Banking Branch are
brought under computerized net. Bank has implemented online real time banking through an
agreement with Info sys Technologies Limited for supply of world reputed banking software
“FINACLE”. Within March, 2008 real time banking facilities have been introduced in 37
branches of CBL. Under this system, client will be able to do the following type of transactions:
Easy to withdraw or deposit from any online branch
Fund transfer with one click, no need TT/DD
Customer can easily tell which payments have cleared.
7. Islamic Banking:
The City Bank Limited started its Islamic Banking operation by opening its first Islamic
Banking Branch at 9/H, Motijheel, Dhaka. Islamic Banking Branch has just completed 5 year
of its operation. Islamic Branch is also rendering sales and service to a good number of broker
houses including DSE’s central trade account in the capital market. The salient features of
Islamic Banking are as follows:
To conduct all its activities as per Islamic Shariah
To conduct its monetary matters free of interest
To establish banker-customer relationship on the basis of partnership
To follow Islamic principle in all its investment port-folio
To develop living standard of the poor incoming group
To render excellent services to the clients cordially
To conduct welfare related activities to the people.
8. SWIFT Banking (Since 2000):
The City Bank Ltd. is one of the first few Bangladeshi Bank who has become member of
SWIFT (Society for Worldwide Inter-Bank Financial Telecommunication) in 1983. SWIFT is
members owned co-operative, which provides a fast and accurate communication network for
financial transactions such as letters of Credit, Fund transfer etc. By becoming a member of
SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700
user institution in 150 countries around the world.
9. SMS Banking:
City SMS gives you 24-hour access to the key financial information of our customers City
Bank Account. It is the simplest way of finding out customers account’s daily / month – end
balance. With City SMS , a customer neither have to wait for his or her statement to arrive
through mail nor have to make a phone call at branches to inquire about his or her balances
and last few transactions. Once a customer becomes a member of SMS banking, he or she
will enjoy 24-hour access it the key financial information.
Facility:
Through City SMS Banking you will be able to access his or her account information like
balance; transaction and a range of other financial information by typing a presently following
functionality are available through City SMS Banking
10. Corporate Governance:
The bank recognizes the importance of Corporate Governance and is committed to maintain
highest standard. A team of experienced professionals maintains the following committees to
run the Bank efficiently:
Management Authority
Administration and Disciplinary Action Authority
Technical and Audit Authority
Credit committee
Procurement and purchase Committee
Asset and liability Committee
11. Training Program:
The City Bank Limited has launched a huge training program for its staff as part of its
restructuring plan. So far, 774 staffs have received training on Customer Service and face to
Face Sales; 65 staff received training on departmental operating Instructions and 268 staff
received training on Orientation to Credit. Apart from these regular training are going on with
BBIM, BIM, and CRISL etc. City Bank Management gives top priority to its peoples leasing
and development issues. That’s why the current training project of City Bank is given a name
“Learning & Development making the winning moves”.
b) Functional Division of CBL: The Bank accomplishes its functions through different
functional divisions/departments along with their major functions are listed below:
1. Financial Division:
Financial Planning , budget preparation and monitoring
Payment of salary
Controlling inter-branch transaction
Disbursement of bills
Preparation / Review of returns and statement
Preparation of financial reports and annual reports
Maintenance of Provident Fund, Gratuity, Superannuation Fund
Reconciliation
2. Credit and risk management:
Loan administration
Loan disbursement
Project evaluation
Processing and approving credit proposals of the branches
Documentation, CIB (Credit Information Bureau) report etc
Arranging different credit facilities
Providing related statements to the Bangladesh Bank and other department
3. Human Resource Division (HRD
Recruiting
Training and development
Compensation, employee benefit, leave and service rules program and purgation
Placement and performance appraisal of employees
Preparing related reports
Reporting to the Executive Committee/Board on related matters
Promotional camping and press release
4. Information Technology (IT) department
Software development
Network management and expansion
Member banks reconciliation
Date entry and processing
Procurement of hardware and maintenance
5. Branch control & Inspection Division
Controlling different function of the branches and search for expansion
Conducting internal audit and inspection both regularly and suddenly
Ensuring compliance with Bangladesh Bank(BB), monitoring BB’s inspection and external
audit reports
6. Retail Division
ATM card, Credit and system operation and maintenance
SWIFT operation
Credit Card Operation (Proposed)
Customer and vendor relationship
7. City Bank Treasury and Market Risk Division:
City Bank Limited has a dedicated Treasury team who is capable of providing all treasury
Solutions. Through business partners CBL is providing a wide range of Treasury products. In
CBL Treasury, there are various teams who are specialized in their own area to ensure the
best possible solution to our customer obligation. Such as:
Foreign Exchange
Money Market
Corporate Sales
ATM and Market Research
Strategy of CBL:
CBL believes in the practice of Market-Oriented Strategic Planning , developing and
maintaining a viable fit between the organization’s objectives, skills and resources, The aim of
such approach is to shape and reshape the bank’s businesses and service so that they yield
target profit and growth. The strategic planning of CBL consists of two organizational levels,
which are:
a) Location Based Strategy
b) Business Level Strategy
a) Location Based Strategy:
Since the growth and profit of banking business largely depends upon the location of
branches where large connection of other businessman and industries are involved, CBL Main
Strength is its location based strategy. The 83 branches of CBL are divided into five different
regions, which are:
Dhaka Division, comprises 37 branches
Chittagong Division , comprising 15 branches
Comilla Division , comprising 5 branches
Sylhet Division , comprising 9 branches
Bogra Division , comprising 10 branches
Khulna Division , comprising 7 branches
The concentration of business and lifestyles of the people are not the same in these five
areas. So, the strategies of the five areas differ from one another, but they are designed with
distinctive local touch. Head office constantly monitors the progresses of all the five areas. At
present, The bank is not interested in launching more branches. Currently CBL is focusing in
strengthening the existing branches
b) Business Level Strategy:
The business strategy of the Bank is to strengthen its retail business, following a conservative
leading approach. But the Bank’s major portion of the profit generates from its Retail banking
and SME banking.
Retail Banking Strategy
SME Banking Strategy
Retail Banking Strategy:
The City Bank Ltd. recently has started its journey in Retail Banking. More than 700 staffs
have been trained so far on the vital concepts of service excellence and sales. In the product
side ATM fleet has been launched , Debit card and credit ha s been issued, SMS Banking has
been offered, 3 new deposit products have been introduced, manifold in the endeavor to build
a Retail Banking brand namely “City Retail Happiness Counts”.
SME Banking Strategy:
Considering the potential growth and demand situation The City Bank Limited extended credit
facilities to small and medium enterprises through SME Banking in the year 2006 and 2007. A
separate division has been established in the Head Office with collaboration of all branches to
process and handle loans under SME for attaining a respectable market share and successful
operation of the scheme. The bank organized several training program for the development of
adequate human resources.