Prime Bank's Credit Card - a comparative study on Prime

Bank Limited & Other Banks and Financial Institutions of

Bangladesh: its impact on organizational growth

specially on Prime Bank Limited.

Prepared For:

M Sirajul Islam

Lecturer

Institute of Business Studies

Darul Ihsan University

Prepared by:

Arkanul Haque

Roll #8031, BBA. 8th

Batch Major in Finance

Submission Date: 27 January 2004

Institute of Business Studies

Darul Ihsan University

Letter of Transmittal

January , 2004

M Sirajul Islam

Lecturer

Institute of Business Studies

Darul Ihsan University.

Subject: Submission of Internship Report.

Dear Sir,

It is a pleasure to me to submit this internship report on " Prime Bank's

Credit Card - a comparative study on Prime Bank Limited & Other Banks

and Financial Institutions of Bangladesh: its ^impact on organizational

growth specially on Prime Bank Limited. " , as a fulfillment of the

requirement of BBA Program. I was assigned to work at Prime Bank

Limited for 3(three months). This report is based on my acquired

knowledge, experience and skill during my stay at this Bank. This is for

your kind perusal and consideration.

Sincerely yours

Declaration

I, Arkanul Haque, hereby declare that the report of internship

entitled & "Prime Bank's Credit Card - a comparative study on Prime

Bank Limited & Other Banks and Financial Institutions of Bangladesh:

Its impact on organizational growth specially on Prime Bank Limited" is

prepared & after the completion of the internship in Card Division of

Prime Bank Limited and a comprehensive study of the existing activities

and its implementation.

I also declare that the report is prepared for academic purpose not

for any award on degree.

(Arkanul Haque)

ACKNOWLEDGEMENT

At first I have to express my gratitude and thanks to Almighty Allah

who gave me the opportunity to complete the BBA-Degree Courses.

Now, I would like to give my thanks to Mr. Rafiqul Islam, Lecturer,

Open University (Ex. Lecturer, IBS, DIU) so that without his close guidance

and valuable advice it would be too much difficult to go through the study.

I wish to extend my thanks to the Human Resources Department of PBL

who has assigned me with the topic.

Finally I would like to give my thanks to all staffs and officers of

Dhanmondi Branch, PBL, for their helpful cooperation. ;

I really owe to them.

Shamima Sharmin

BBA (7th Batch)

Roll No. 7006

Institute of Business Studies

Darul Ihsan University

Part: One

1.1 Work Study :-

The management of Prime Bank Ltd. and Mr. Rafiqul Islam Lecturer,

IBS, Darul Ihsan University, Dhaka, Bangladesh has assigned internship report

on "Marketing of Financial Products in Prime Bank Limited with

comparison of other banks" to me. In this regard an organization

attachment at Dhanmondi Branch of Prime Bank Limited has been given

to me a lot of time. Within that period, I collected necessary data for the

report.

1.2 Background of the Study :

Prime Bank Ltd. one of the most successful Banking organization

in the country. For the last few years the performance of the company was

really goods. Prime Bank is the premier bank for consumers and small

business with a commanding market presence in consumer credit, hire

purchases and lease finance. As a Banking organization Prime Bank has

several deposit schemes (MBDS, FDR, CCA, SA etc) and financial product

(master card, loan from different purposes etc)

As a business student, I have worked with Prime Bank Ltd. for my

internship purpose I carried out a survey and my topic was "Marketing of

Financial Products in Prime Bank Limited with comparison of other banks". I

filtered, stored reshuffled and analyzed the collected information and

interpreted all the analysis to bring about my hypothesis to be right. In my

project I gave my attention to find out the comparative analysis among

Prime's different deposit schemes and also to detect the strategy for

creating strong market position.

As a Banking institution all the deposit schemes of the Prime Bank Ltd.

are treated as a part of the financial products.

1.3 Objective of the Study :

The main objective of the study is to know the marketing strategy o

financial products of Prime Bank Limited through different aspects of the

banking sector and to evaluate how well bank is doing in its Deposit

Scheme.

The specific objective of the study are given bellow:

i) To find out the satisfaction level of the clients with the financial

products and deposit schemes provided by the Prime Bank Ltd. at

present.

ii) Market feasibility of different schemes and financial products

offered by the Prime Bank Ltd.

iii) To find out the positive as well as negative sights of different schemes

and financial products offered by the Prime Bank Ltd.

iv) To find out any correction or addition/deduction required in the

rules and procedures of the schemes and financial products offered

by the Prime Bank Ltd.

v) To find out suitable marketing strategy for the schemes and financial

products offered by the Prime Bank Ltd.

vi) Analyzing the clients' opinion about the schemes and financial

products offered by the Prime Bank Ltd.

vii) To prove my hypothesis to be right.

1.4 Scope of the Study :

This report cover's PBL's market position of Deposit scheme It

focuses on the over view of Management & organizational structure. It

highlights other schemes of PBL. It also covers the overall performance

i.e. General Banking, Loans & Advances and Foreign Exchange Department

of PBL.

1.5 Methodology:

This report is based on Primary & Secondary data. For write this

report, information have been collected from the primary sources. Discussion

with officers of several banks, secondary scours, newspaper, journals,

annual reports of banks, published doeuments and other published papers &

reports. Trend & growth rate analysis, ratio analysis & graphical

presentation like chart, graphs, bar chart, have been used for evaluate

consumer credit performance and prepare the report.

1.6 Limitation

Although I have got co-operation from employee of PBL

Dhanmondi Branch & Head office and they also gave me much time to make

the report properly the way of my study, I have faced many problems that

may be terms as the limitation/shortcoming of the study.

i.) It was very tough to collect data for making a comparative study PEL

performance about the Deposit scheme. In case they could not able to

supply my topic related data for preparing a more in depth

presentation.

ii.) The time for the study may not enough for my study, to prepare this

report & for submitting the report.

PART: TWO

Details of Prime Bank Ltd.

2.1 Historical Background of Prime Bank Ltd.:

The banking system plays a critical role in underpinning economic

development. Against the background of liberalization of economic Policies

in Bangladesh, Prime Bank Ltd. has resulted in great success in all areas of

operation of its bank with a view to improve the Socio-economic

development of the country.

Prime bank ltd. (PBL) was in corporated on 17th April 1995 with

1000 million of Authorized Capital & Tk. 100 million of paid up capital

by a group of Successful entrepreneurs. It is not a conventional Bank. It's

a modern dynamic private commercial bank & play a constructive role in the

economic development of the country. Prime bank is the first private bank to

introduce lease finance, hire purchase & customer credit schemes in the

banking sector in order to bring about qualitative changes in the lives of

people of Bangladesh. PBL through its steady Progress & continuous

success has, by now, earned the reputation of begin one of the leading

private sector Banks of the country.

Prime Bank, an overview

Prime Bank Limited is a fast growing private sector bank and the

Bank is already at the top slot in terms of quality services to the

customers and value addition for the shareholders. The Bank made

satisfactory progress in all areas of business operation in 2003. The Bank

closed the year with a number "of achievements registering significant

growth in all areas of its operation including profitability. The Bank

further expanded and consolidated its customer base in both of its core

business and retail banking. The Bank retained its lead position with the

capital adequacy ratio of 11.92% as on December end 2003 which is well

above the stipulated requirement of 9%. The Return of Assets (ROA) was

4.13% which was well above the industry average. During the year under

review, the network of branches increased to 30 with three branches -one

in the Chittagong city and two in the Dhaka city. Of the 3 new Branches,

two are Islamic banking branches pronouncing the Management's vow to

strengthen Islamic banking operation alongside conventional banking are

very selective in locating branches so that customers can be better served.

This year we" have already planned to add a few branches to our

network, which will give the Bank strategic advantages in terms of

operation and business potentials. We have a. plan to add 50% of new

branches as Islamic banking branches to our branch network in order to

keep landing operation.

Values

The Bank holds the following values:

• To have a strong customer focus and to builcla relationship

based on integrity superior services and mutual benefit."

• To work as a team to serve the best interest of the group.

• To work for continuous business innovations

and improvements.

• To value and respect people and make decisions based on

merits.

• To provide recognition and rewards on performance.

Corporate Profile

Registered office: Adamjee Court Annex Building-2

119-120, MotijheelC/A

Dhaka- 1000, Bangladesh

Cable: PRIMEBANK

Phone: 9567265, 9570747-8 PABX

Telex: 642459 PRIME BJ

Fax: 88-02-9567230, 9560977, and 9566215

E-mail: Primebank@bangla.net

2.2 Mission of BPL:

Prime Bank Limited aims to become one of the top-performing

banks by prudent financing to earn sustention profit and rendering of

services to customers more efficiently and effectively. The bank has

some mission to achieve its goals. These are:

Its aim to improve customer services further through

diversity in product and service.

PEL intend to focus more on small and medium sized

enterprises by providing a broad range of financing options.

The bank intends to increase the advance amount in different

sectors.

The bank aims to help fixed income group in rising standard

of living through financing to customers and small business

group.

The bank provides greater sufficient wealth for their

shareholders.

2.3 Objective & Goals :

PEL is ready to improve the highest quality customer service

through new. It products and services such as ATM,

ONLINE BANKING & POINT OF SALES transaction.

PEL is always encouraging the client for purchasing its share

by creating the opportunity of long-term investment and

increasing the value of share through prosperity as developed

day by day.

The Major objective of PEL is to maximize profit through

customer's satisfaction.

The bank plays in vital role in socio-economic development

of Bangladesh by developing world network in domestic and

international operation.

2.4 Director of Prime Bank Ltd.:

2.5 Human Resource Management of PBL:

The vibrancy of the Bank emanates from its people who are, our

highest priority. We believe were able to assemble a pool of highly

talented professionals to .manage the Bank in an efficient manner. We

are proud of having built the finest team in the country and providing

them an environment in which team,-sprit, creativity and excellence

thrives. Our ' recruitment process is very rigid and policy oriented but

fully transparent. We aimed at, recruitment only competent work force.

W€ ^-trained them at various levels, mainly through of training institute.

The Bank had always focused on retaining employees through fair

compensation and creating opportunities for career development.

During the year under review, w^ awarded substantial bonus as an

incentive for all the employees. Moreover, employees with outstanding

performance had been rewarded. As a result, for staff morale had been

enhanced by a feeling with stronger loyalty and belongingness to the

Bank. We ' continued our efforts to create and develop ethical and

cohesive culture. Management frequently communicated with staff

members and listened to their ideas and suggestions. Employees'

compensation package and other welfare schemes were adjusted in line

with the prevailing market levels. As on 31st December 2003 total

number of employees was 777 compared to 730 of 2002.

2.6 Organogram of PBL

2.7 Prime Bank Training Institution (PBTI):

Prime Bank Training Institute had all along supported the Bank

through various in house training courses, workshops and seminars. The

Institute played a significant role in strengthening the capabilities of 00?

human resources. It constantly worked _an improvement ""of" training

methods and materials. Most of the programs were designed in modular

form with specific objectives and goals. Those were measured for

evaluation of performance by life trainees. In 2003, PBTI conducted 4

(four) Foundation Training Courses, 8(eight) short courses and

24(twenty 'four) workshops for new recruits, junior level management

staff, mid level management staff and senior executives. In addition, the

Institute conducted 6(seven) short courses on Credit Operation and

Management, International Trade Finance, Law and Practice of Banking

and Islamic Banking Operation for mid level management staff. Besides,

a (one) workshop was organized on Relationship between Bangladesh

Bank and commercial banks for senior- level executives.

Prime Bank Foundation and Social Services

While strengthening risk management and improving asset quality was

the main focus for, the Bank, we "were also aware of: responsibility to the

society to which we belonged of also recognized expectations of but

valued customers and shareholders towards our:" commitment for the

welfare of poorer sections of the society. Against this backdrop, Prime

Bank Foundation was created at the later part of 2001. Its activities were

further recognized and efforts intensified towards welfare related

initiatives. The Foundation and employees of the Bank took part in

diverse charitable and voluntary programs during the year under review.

The main objective of the Foundation was to invest part of the Bank's

profit in poverty alleviation and community welfare. Accordingly, the

Foundation had made allocations to different areas of poverty alleviation

and primary health care programs for the low income group of people.

The wise Board has decided to establish a hospital solely managed and

funded by Prime Bank Foundation for the benefits of "the

underprivileged of the society. All those strongly reflected strong

commitment of the Bank to working closely through Foundation with the

community with which it co- existed. Prime Bank Foundation would

continue to contribute to the activities that benefit the lives of common

people and community throughout Bangladesh.

To add to the above, the Bank participated in major sponsorship

programs in the area of sports such as Football and Cricket to popularize

the same among the public. The Bank on its own organized friendly

cricket matches between a few private banks to promote fellow feeling

within the banking community. In the year under review, Tk. 5.00 million

was donated to the Prime Minister's Relief Fund. Besides, warm clothes,

were distributed to the cold wave torn people.

2.8 Network of the Branch:

The bank established its business on 17 April 1995. The first branch

was opened at Motijheel area in Dhaka. Now the total number of branches

stood at 25 at the and of the year 2002. PEL divided its branches networks

into five arenas i.e. Dhaka. Chittagong, Khulna, Rajshahi & Sylhet arenas

with 15, 3, 1 & 4 branches respectively. Among these branches 20 of have

been licensed by Bangladesh Bank as Authorized Dealers in Foreign

Exchange. The bank targets to open total 50 branches all over the

Bangladesh for providing banking service to their customers. The branch

network of PBL is shown in the next page

2.9 Function of PBL:

Prime Bank ltd. is a service oriented financial institution. The main

function of the bank is customer service. The bank offers different types

of quality services to its clients. PBL performs the functions, which are

given bellow:

i. Deposit Services:

The first primary function of the bank is to accept deposits of

money from the customer or saver group. PBL offers all types of deposit

services to its customer available in today's bank in Bangladesh. The

interest rate is different for the different types of deposits. For current

deposit bank doesn't pay any interest. Prime Bank Ltd. serves following

deposit services:

Contributory Saving Scheme.

Monthly Benefit Deposit Scheme.

Special Deposit Scheme.

Educational Deposit Scheme.

Fixed Deposit

Saving Deposit Account

Short Term Deposit Account

Foreign Currency Deposit Account

Non Resident Taka Account

Non Resident Foreign Currency Deposit Account

(NFCD)

Non Resident Investors Taka Account (NITA)

Prime Bank Insured Fixed Deposit Scheme.

Prime Bank Money Scheme

Multi Currency Account

ii. Credit Services:

Banking business essentially involves lending. In fact the deposits are

accepted for lending or investment. It interest rate ranges from 10% to

16.5% PBL gives loans in follows sectors.

Consumers Credit Scheme

Lease Finance

Hire-Purchase

Small and Medium Enterprise Credit Scheme

Loan against share & Securities.

House Building Financing Scheme

Financing Scheme for Contractors

Computer Software Financing Scheme

Prime Bank Master Card Credit Card

Working Capital Financing

Import Financing

Export Financing

Industrial and Project Financing

Depending on the requirement of the borrower. The bank lend

money in the following forms:

On Line Banking Services

SWIEL Services

Islamic Banking

Locker Services

Exchange Rate.

L/C Delivery Services.

iii. Customer Service;

The Prime Bank Provides value added services to their customers.

They ensure high quality customer services through competent workforce.

One of their greatest assets is the trust of its customers. To keep their trust

they are to uphold the highest professional & ethical standards amidst all

odds of competitive environment. PBL has the following arrangement of

remittance with in and out side the country.

Bank Draft or Demand Draft (D.D)

Telephone Transfer (T.T)

Pay order (P.O)

Pay Slip (P.S)

Mail Transfer Advice (MTA)

2.10.1 Insurance Scheme:

PEL offers Insurance scheme for its customer like life Insurance,

Fire, Marine, Goods & Industry etc. There are two types of Insurance Scheme.

i) Saving Insurance Scheme (SIS):

PEL has introduced saving insurance scheme in the market offering

deposit with insurance coverage. The Bank first offers this scheme with a

lot of interest amongst the prospective clients to open accounts. Under this

scheme the clients will enjoy death risks cover and the bank will pay usual

rate of interest as prescribed for that account. It will help growth of stable

deposit in the bank.

ii) Monthly Saving Scheme (MSS):

PEL has introduced monthly saving scheme in the market offering

monthly deposit of Tk. 500 & Tk. 1000 respectively of a period of 5, 8, 10

years. The bank mainly offers their scheme for fixed, middle & low-income

group of people PEL has been able to mobilized significant amount of

deposit through this product. The saving rate in our country is very low

comparing to any other neighboring countries. In order to galvanize the

people minds towards saving the middle lower income group of people feels

comfortable in saving their money under this scheme. The terminal benefits

under this type of deposit are appended in below :

Installment Tk. 500 Tk. 1000

Term Benefit payable at maturity (Tk).5 years 40,000 80,000

8 years 75,000 1,50,000

1 0 years 100,000 200,00

2.10.2 Credit Card ;

Prime Bank Ltd. issues (Master Card) credit card to its customers who have

the card pay their bill in to PEL against their card number. Prime bank offers

(Master Card) credit card, which has opened up new possibilities for

improved customer service and for becoming a dominant player in the

market. PBL ensues high level of security by inserting its customer

photograph on the card and provides 24 hours a day & 365 days a year

worldwide service. The Bank has recently obtained principle membership

from Visa International. All preparations are under-Way to launch visa card

as early as possible.

Fees for PrimeJlank Credit Card:

Gold Salver .Sl.# Fees Int'l

(US$)

Local (Tk) International Local (Tk.)01 Annual Fee 120 2500 70 1400

02 Additional Fee 120 1500 70 900

03 Replacement Fee 50 1000 35 50004 Late Payment Fee 10 450 10 30005 Excess limit 20 750 15 50006 Return Cheque 15 350 10 250

07 Statement Retrieval

Fee

5 50 5 50

08 Sales Slip Retrieval

Fee

10 250 10 20009 Out town

cheque Collection Fee

20 250 15 200

10 PIN Replacement Fee 20 1000 20 1000

2.10.3 Locker Service ;

PBL offer Locker service in some selected branch. The bank

charge different amount from its clients on yearly based according to the

size of locker. The bank charges Tk. 15000 & Tk. 1000 for larger & smaller

size. Under this service the client should have an account in that

particular branch. If he/she fails to make payment or time, the fees will be

adjusted from his/her account.

2.10.4 ON-LINE Banking;

Prime Bank Ltd. has set up a wide area Network (WAN) across the

country to provide on-line branch banking facilities to its valued clients. The

service named PRIME LINE has opened up several possibilities of

improved customer services. Under this scheme, clients of one branch are

able to do banking transaction at any other branch of the bank. The bank

hosts its web site (ww.prime-bank.com) to facilitate dissemination of

information about our banking services & facilities to out side world. The

bank is planning to provide 24 hours customer services by installing

Automated Teller Machine (ATM) in the near future.

PART: THREE

My Project Part: Deposit Scheme of Prime Bank Limited

A bank is a financial institution, which take deposits money from

surplus economic unit and provides leading to the deficit economic unit. It

plays an important role for developing economic growth in a country & it is a

largest mobilizes of surplus domestic savings.

The operational procedures of PEL are divided into following parts.

03.1. Different types of Account/Deposit Scheme in PBL:

The total deposits held by the banker are broadly divided into

demand deposits and time deposits. PBL is maintaining the major

accounts for deposit mobilization. The different types of account/scheme as:

follows:

i. Demand Deposit:

Under demand deposit the client can withdraw his/her money any

time without any prior notice. At present prime bank limited offer three

types of demand deposit. These are:

A) Current Account (CD)

B) Saving Account (SB)

C) Short term deposit Account (STD)

A. Current Account (CD):

This scheme is of the nature of demand deposit. No interest is

allowed on this deposit. This account has chequing facilities & balances

are transferable.

B. Saving Account (SB):

Deposit on this account is self-explanatory and generally emanates

from the individual. A portion, varying from time to time has saving

deposits constituted demand deposit. Under this scheme Bank pays 5% to

8.5% interest rate to the clients.

C. Short term Deposit (STD):

The characteristics of short-term deposit & current Deposit are same.

Here clients have to hold money for some period of time & the volume of

the deposit will be large than current account. Under this scheme interest

rate is 5.5%.

ii. Term Deposit

In case of term deposit client can withdraw his/her money offer

specific period of time, Prime Bank limited offers following kinds of term

deposits.

A) Fixed Deposit Receipt (FDR):

This is reclassified by period of maturity and is exclusively time

deposit. Under this scheme there are some terms & condition are as follow:

Minimum deposit of this scheme will be 25,0007

Age Limit for the deposit should be 18 to 45 years

Insurance coverage will be available up to Tk. 20 lac

Insurance coverage for natural death & for accidental death both

deposit amount will be 100

The range of interest rate of this scheme is 8075% to 10.50% a The

minimum time for this scheme is 1 year.

In case of FDR scheme PEL deals with following terms deposit

Term Interest Rate

30 Days 8.50%

3 months 8.75%

6 months 9,00%

1 year 9.25%

2 years 9.75%

3 years 10.2$%

B) Contributory Saving Scheme (CSS):

This is a savings scheme in which a person gets the opportunity to

build up saving by contributing monthly installments for getting an

attractive fixed amount at the end of a specified term.

The Scheme is designed to help the fixed income group to save

money and build up a sizable fund. So that with the help of the lump sum

amount they received, they can go for some income-generating venture to

improve the quality of their life or meet any future plan and program.

The salient future of the Scheme are given below:

1) The size of the monthly installment shall be Tk. 100, Tk, 250, Tk.

500 and Tk. 1000 to be deposited every month throughout the

savings term.

2) The term of Saving shall be for 5 years and 10 years

3) The depositor will have the option to choose any installment at the

time of opening of an Account and will not be allowed to change

the size of installment afterwards.

4) Account under the Scheme can be opened on the separate Form

designed for the purpose. Photograph and introduction will be

required for opening of the account.

5) The depositor will have the option to close his account specified

for the term and draw the amount at the end of any term. For

example, a depositor with a monthly installment of Tk. 100 will.

6) have the option to draw Tk. 8,000 after 5 years, Tk. 15,000 after 8

years and Tk. 20,000 after 10 years.

7) A lump sum amount shall be paid to the depositor after maturity of

respective terms of saving as per the following table:

Installment Tk.100 Tk. 250 Tk. 500 Tk. 1,000

Term Amount payable at Maturity (Taka)

5 years 8,000 20,000 40,000 80,000

8 years 15,000 37,000 75,000 1,50,000

10 years 20,000 50,000 1,00,000 2,00,000

C) Monthly Benefit Deposit Scheme:

This is a Deposit Scheme where the depositor gets monthly benefit

out his depositor gets monthly benefit out of his deposit. The Scheme is -

designed to attract:

i) The retirement benefits of service holders.

ii) The investment of wage Earners who want to pay a fixed

amount monthly to there families /dependents in Bangladesh

from the profit of their investment

iii) The deposit of those persons who intend to meet the monthly

budget of their families from the income out of the deposit,

iv) Investment of fund of Trusts and Foundations, which award

monthly scholarship/stipends to students,

v) Parents who want to defray the educational expenses of their

children from the monthly benefit of their deposit with the

bank.

The Salient features of the Scheme are given below:

1) Deposit of Tk. 1,00,000.00 and multiples there of shall be

acceptable for the Scheme.

2) The Deposit shall be for a period of 5 (five) years. The Principal

amount is refundable on maturity.

3) Profit shall be paid on monthly basis @ Tk. 1,000.00 per Tk.

1,00,000.00

D) Special Deposit Scheme:

This is Deposit Scheme where an instrument is issued for the full

amount payable after a specified period against deposit of a certain

amount. The Scheme is specially designed to provide for children education,

marriage and old age security. It will create good opportunity for attractive

investment of; Provident Fund, Trust Fund, Reserve Fund/Security Fund of

Institutions and, Organizations. It will also provide opportunities for the

Wages Earners towards profitable investment of their funds.

The Salient features of the Scheme are given below:

1) Deposit of Tk. 1,00.00 and multiple thereof shall be acceptable under the

Scheme.

2) An Instrument shall be issued for 5, 7 or 10 years.

3) The Instrument shall not be encashable before maturity. It may, however,

be discounted at the counter of the issuing Bank at any time @ 15% on

the remaining period of maturity, if necessary. Any other

Bank/Organization/Firm/Person can also discount the instrument. In case

of the Instrument being discounted by other Bank/Organization/Finn

/(Person, the Instrument may be retain with them till maturity or

presented at the counter of the issuing Bank for immediate payment at the

discounting rate. But in any case the depositor shall not lose his Principal.

4) In case of death of the payee, the amount of the Instrument will be paid

at a discounted rate to the nominee of the payee or, in the absence of

nomination, to the legal heirs of the payee on production of Succession

Certificate.

5) In Instrument will be acceptable as primary /collateral security

against any advance/loan subject to registering the lien of he same

with the issuing Branch of the Bank.

6) n case of loss of the Instrument, rules pertaining to issuance of Duplicate

FDR after loss of Fixed Deposit Receipt (FOR) shall be applicable

for such issuance of "Duplicate".

7) Bank will issue 'Order Instrument' payable to a particular person,

organization firm, etc, for an amount payable at maturity as written

on the face of the Instrument as per the following table:

Term Initial Deposit (Taka) Value Payable at maturity (Taka)

5 years 1,00,000 1,65,000

7 years 1,00,000 2,00,000

1 0 years 1,00,000 3,00,000

Amount payable with profit at maturity will vary proportionately as

per above table according to the size of initial deposit amount.

E) Educational Savings Scheme (ESS)

Prime Bank limited has introduced a saving scheme entitled

"Educational Saving Scheme". The scheme provides a unique opportunity to

the parents to make a future provision for the education expenses of their

children when they enter in to school, colleges and university out of the

benefit of a small amount of savings with the bank at an opportunity moment.

The salient features of the scheme are given below:

a) Deposit of Tk. 25000/- and multiplies thereof at a time will be

accepted under the scheme.

b) The instrument shall be issued for 7 years, 10 years or 20 years

term.

c) The deposits is payable at maturity with benefit either in;lump

sum or on monthly basis as educational allowance for six year

completion of the respective term as per the following table:

Term Initial Deposit Amount payable at

maturity

Education

allowance per

month7 years 25000/- 55000/- 1000/-

25000/- 77000/- 1500/-

15 years 25000/- 136000/- 2500/-

20 years 25000/- 240000/- 4500/-

3.1.2 Account Opening Department

3.1.2.1 Opening an Account;

Banker & customer relationship established though opening an

account. It binds the Banker & customer into a contractual relationship. There

are two types of account i.e. a deposit account & loan account. Generally

account opening means to open a deposit account. When a customer want

to pen a bank account the banker's has to maintain some common principle

& procedure form & he/she have to field those prescribed form & have to

attached their organization's document.

3.1.2.2 General Precaution in account Opening:

There are following papers /document required for opening of various types

of accounts.

A) Individual /Joint

i) Account Opening Form with nominee form duly filled up

ii) Two copies of Photograph of the Account holder(s) who will operate

the account duly signed by the account holder(s) and attested by the

introducer,

iii) One copy of photograph of the Nominee duly attested by the account

holder(s),

iv) Specimen signature Card signed d by the account operator(s) on the

presence of an authorized officer of the Bank.

v) Proper introduction by an introducer. Introducer should have

acceptability to the bank. Introducer will confirm the identity of the

account holder and he/she will also sign in the account opening form

as an introducer.

vi) Special instruction (if any)

B) Proprietorship Firm

i) Account Opening Form duly filled up,

ii) Two Copies of Photograph of the Account holder(s) who will operate

the account duly signed by the account holder(s) and attested by the

introducer

iii) Copy of valid Trade License regarding its validity, address,

title/ownership of the license etc. iv) Specimen Signature card

signed by the account operator(s) on the presence of an authorized

officer of the Bank.

v) Proper introduction by an introducer should have acceptability to the

bank. Introducer will confirm the identity of the account holder by

putting his/her signature on the back of the photograph of account

holder and he/she will also sign the account opening form as an

introducer.

vi) Special instructions (if any)

C) Partnership Firm

i) Account Opening form duly filled up.

ii) Two Copies of Photograph of the Account holder(s) and attested by

the introducer

iii) Copy of valid Trade license duly attested by the Bank Officer. Banker will

examine the trade license regarding its validity, address, title/ ownership

of the license etc .

iv) Specimen signature Card signed by the account operator(s) on the

presence of an authorized officer of the Bank,

v) Proper introduction by an introducer. Introducer should have

acceptability to the bank, Introducer will confirm the identity of the account

holder(s) & he/she will also sign the account opening form as an introducer,

vi) Certified copy of partnership deed or copy of partnership deed attested by the

MD.

vii) Partnership Account Agreement (Bank's prescribed form)

viii) Resolution signed by all partners to open the account & instruction

regarding operation of the account,

ix) Special instruction (if any)

D) Limited Company:

i) Account Opening Form duly filled up,

ii) Two Copies of Photograph of the Account holder(s) who will

operate the account duly singed by the account holder(s) and

attested by the introducer,

iii) Certified copy (Certified by the Register of Joint Stock

Company) of Memorandum & Article of Association,

iv) Certified copy (Certified by the Register of Joint Stock

Company) of Certificate of Incorporation,

v) Certified copy (Certified by the Register of Joint Stock

Company) of Certified of Commencement of Business. (In

case of Public Limited Company),

vi) Board Resolution duly signed by the Board of Directors as

per their Memorandum for opening & operation of their

Account with the Bank,

vii) List of Director (Included Present & Permanent Address of

the Directors) which will be supported by the FORM-12

duly Certified by the Register of joint stock Company.

viii) Specimen signature card signed by the account or)eratof(s)

on the presence of an authorized officer of the Bank,

ix) Special instructions (in any)

E) Club /Society/School / College etc.

i) Account Opening Form duly filled up.

ii) Two copies of Photograph of the Account holder(s) who will

operate the account duly signed by the account holder(s) and

attested by the introduced.

iii) Certified copy of Bye-Laws & Regulations/Constitution duly

certified by the Chairman /Secretary,

iv) Certified copy of Resolution of Management/ Committee/

Executive Committee duly signed by the member of the

committee as per their Memorandum for opening & operation

of their Account with the Bank,

v) Up to date List of Office Bearers/Governing Body/Managing

Committee duly certified by the Chairman/Secretary (Including

Present & Permanent Address of the Office Bearers /Governing

Body /Managing Committee)

vi) Specimen signature Card signed by the account operator (s) on

the presence of an authorized officer of the Bank,

vii) Special instructions (if any)

F) Trust:

i) Account Opening Form duly filled up,

ii) Two Copies of Photograph of he Account holder(s) who will

operate the account duly signed by the account holder(s) and

attested by the introducer.

iii) Up to date list of Members of the Trusty Board

iv) Certified copy of Deed of Trust

v) Certified copy of Resolution of the trustee Board for opening &

operation of their Account with the Bank,

vi) Specimen signature Card signed by the account operator(s) on

the presence of an authorized officer of the Bank.

vii) Initial Deposit

viii) Special instruction (if any)

3.1.2.3 Documentation after Opening and Account;

After observation of all the formalities /document mentioned

above, the banker's has to scrutinized account opening from, specimen

signature card & all required documents as per accounts category. Before

giving the approval of account the branch manager has to used sufficient

intelligence & common sense in ascertaining the genuineness of new

account. Then the applicant is required to deposit minimum Tk. for

opening a bank account as per account category, this is called initial

deposit. As soon as this money is deposited, the bank opens an account in

the name of the applicant. The banker then has to mention the following

steps, which are also 'related with the opening of an account in all the cases.

• Numbering/indexing the account

• Issuance of chaque book

• Supplying a passbook & pay-in -slip book

• Issuance of letter of Thanks to the introducer

• Mandate form it the Account holder wants to operate the

account by giving a mandate to another person.

• All special instruction to be authenticated by all the signatories

of the account.

3.2 DEPOSIT POSITION OF PRIME BANK LIMITED IN YEAR 1997

TO 2003

At the end of 2003 total deposits stood at Tk. 21092.35 million, a

28% increase compared to Tk. 16,481.60 million from the preceding

year. This was undoubtedly a remarkable progress considering volatile

price situation for acquiring deposits. Liability pricing came under stress

on a number of occasions during the year. Because of the weak demand,

the Bank had to rationalize pricing for different sets of liability. Despite

our low offering, the Bank was able to mobilize substantial deposits

through various deposit schemes. As on December end 2003, deposit

under various schemes stood Tk. 4,115.91 million against Tk. 3,644.40

in the last year showing an increase of around 13%.

3.1 THE DEPOSITE MIX AS ON DECEMBER 1997 TO 2003

SI. Items Year 2002 Year 2001 Year 2000 Year 1999

No tkin %of tkin %of tk in %of tkin %ofmillion total million total millio total millio total

depos depos depos n depos

it it it » iti

1 current & 2649.8 19.98 2214.7 19.83 536.20 7.00 •424.61 8other depost 0 5

2 saving bank 1996.3 9.02 10.58.7 9.48 1135.9 14.83 715.37 13

deposit 0 9 9

3 Bearer 30.94 0.24 40.20 0.36 537.73 7.02 421.04 8certificate of

deposit

4 Fixed deposit 5430.3 40.95 7018.4 62.84 2883.9 3765 22998 44

6 2 Q 4

5 Short term 1092.4 8.24 650.02 5.82 346.23 4.52 228.05 4deposit 1

6 Deposit 2662.8 20.08 1005.7 13.13 812.37 15

scheme 5 6

7 Others deposit 197.21 1.49 186.51 1.67 1214.1 15.85 411.97 8

1

13259. 100.0 11168. 100.0 7660.0 100.0 5313.2 10087 0 72 0 2 0 5

3.4 COMPARATIVE ANALYSIS OF O SIT MIX OF YEAR 200§-1998

3.5 Performance & Growth of PBL:

3.5.1 Investment Growth of PEL:

The investment of the bank as on 31st Dec. 2001, at Tk. 1729.3

million against Tk. 1524.54 in 2000 & the growth over 2000 is 13%. The

investment growth of PBL (1997-2001) as mentioned in the following table

& graph:

Table

year 1997 1998 1999 2000 20QB

Tk. (in million ) 583.06 604.30 964.41 1524.54 1729.30

(source: annual Report)

3.5.2. Deposit Growth of PBL:

The total deposit of the bank was Tk. 13269.9 at the end of Dec.

2001 as against Tk. 11168.72 million of 2000 & the growth rate over the

preceding year is 19% has introduced several deposit schemes to

encourage & mobilize savings. Its various purpose oriented deposit

scheme have been appreciated by the public & have gained popularity.

The deposit growth of the bank (1997-2001) is shown bellow:

Year 1997 1998 1999 2000 2001Tk. (in million) 4236.18 5313.25 7660.02 11168.72 13259.9

3.5.3. Advance Growth of PBL:

The bank has formulated its policy to give priority to small &

medium enterprises with in the policy guidelines of the bank & Bangladesh

addition to traditional financing of commercial & industrial groups. The

bank introduces consumer credit scheme that aims to help the fixed income

group in raising standard of living have been widely appreciated. The total

loans & advances of the bank amounted Tk. 7667.73 million of the previous

year & the growth over 2000 is 18%. The growth of advance of the bank,

(1997-2001) as shown in below.

Year Is997 1998 1999 2000 2001

Tk. (in million) 1752.11 3127.77 5121.03 7667.73 9074.9

3.5.4 Net Profit of PEL:

Prime Bank limited established in 1995 & in these six years, the

bank achieved satisfactory progress in every aspect of its operations. The

Bank earned profit worth Tk. 791.6 million at the end of Dec. 2001 as

against Tk. 60.82 million on 2000 showing & increase of 30% over the

preceding year. The profits of the bank (1998-2001) is show in below.

Year 1998 1999 2000 2001

Tk. (in million) 17.39 31.93 60.82 79.16

3.6 SOURCES OF FUND

After observation the Annual Report 200$, of Prime Bank Ltd. we find: out

the proportion of deposit in the total sources of fund is £4%, which is higher

than the other sources. This graph is shown as follow:

3.7. LOAN AS A % OF TOTAL DEPOSITE

After observation of Annual Report of year 1997 to 2001 of Prime

Bank Ltd. find the position of loan as a percentage of total deposit is given

below:

Year 1997- 1998 1999 2000.- 2003

Tk. in Million 41% 59% 67% 69% 68%

PART: FOUR

Dhanmondi Branch of PBL at a Glance

The topic 'Marketing of Financial Products in Prime Bank Limited

with comparison of other banks is the main part of my internship report /

paper. The report is completed at Dhanmondi Branch office of PBL,

which is started on 02 May,2001 . The whole activities of the branch are

divided into three major departments. Those are given below:

General Banking Department

Advanced Department

Foreign Exchange Department

4.1. General Banking Department:

This department includes the following operation.

4.1.1. Demand Deposit:

This deposit one with draw able on demand and no prior notice is

needed for PBL to accept demand deposit through the opening of:

• Current A/C

• Saving A/C

4.1.2. Time Deposit:

Time deposit are repayable on the expire of a fixed period of time

only. PBL accepts time deposits through the following different

deposit scheme.

• Fixed Deposit

• Short-term Deposit

• Bearer Certificate Deposit

• Contributory Savings Scheme

• Educational Saving Scheme

• Money Building Scheme

4.1.3. Other Operations:

• Cheque Issue

• Demand Draft (D.D)

• Pay Order (P.O)

• Telegraphic Transfer

• Travelers Cheque (T.C)

• Mail Transfer Advice (M.T.A)

Under these Departments, the bank officer receives different types

of cheque. He/she has to keeps record of collecting cheque & return cheque

in the registered book. Every day with in 3 P.M. he/she has to make, the

particular schedule paper for sending to Bangladesh Bank. The total amount

of the records has to match with other record book. In dispatch section, the

officer receives & forwards every letters & documents. Under remittance

department, the bank officer writes vouchers of pay order, D.D. & T.T.and

also transfers it into the record book. It is very important for P.O.D.D. &

T.T. to match the test number. In the accounts section the officer has to post

all the vouchers into the computer under different heads. In the end of the

day, account division receives vouchers from every section & they keep it

under different heads. If the total amount of records doesn't match with other

records, then the officers have to check it from the beginning. It is very

tough job to do.

4.2. Advance Department;

Banking business essentially involves in deposit extraction & credit

instruction. This department exercises the lending function. Infect the

deposit are accepted for lending or investment. Under this department

PEL of offers following types of loans & advance.

4.2.1 Cash Credit;

i) Pledge &

ii) Hypothecation

LTM

Loan General

Secured overdraft (S.O.D)

i) Financial obligation

ii) General

iii) Export

Working capital

Bank Guarantee

Hire Purchase

Consumer credit scheme

Under credit department, lending upon which repayment is interest

servicing performance deteriorates are to identified at an early stage is

closely monitored in order to loan losses. In lending, borrower selection is

the most important step of this department. If the borrower is not of good

character, resourceful, responsible & reliable, the bank can't easily get the

return from the lending. Then it has to suffer a lot due to the classified loans

& advances & monitoring is made much difficult for banker. That's why the

banker has to maintain some restrictions.

4.3 Foreign Exchange department;

This department includes following activities of PEL, Dhanmondi Branch

L/C issue

L/C collection & negotiation

A/C Advising & conforming

FDBP

Encasement of Traveler's cheque

Presentation & Retirement of Import Documents

4.5 Ratio Analysis of Dhanmondi Branch of PBL.

Ration Analysis for the Periof of Jan. 01 to Dec. 2004

Fig. In Lac.

1. Yield on Advance 2. Cost of Fund

= 65.46/224.86 = 47.31/549.93

=29.11% = 8.61%

2. Cost of Fund wit Establishment Cost 4. Return on Asset

=513.33/6595.41=7.79% = 1.05/26.08 = 3.89%

5. Overall Productively 6. Manpower Productivity

= 619.20/513.97 = 1.21 times = 619.20/37.86= 16.35 lac

7. Employee Expenses 8. Per employee Deposit

= 37.86/513.97 = 7.37% = 619.20/15=41.28 lac

9. Per Employee Profit 10. Per Employee Deposit

= 105.23/15 = 7.02 lac = 6595.41/=439.70 lac

11. Per employee advance 12. Employee Expenses to

Operational expenses

= 2698.33/15 = 179.89 lac

= 37.86/73.35 = 51.62%

13. Profit Margin 14. Burden Coverage

= 105.23/619.20 = 16.9% = 6.60/73.95 = 7%

15. Credit Deposit Ratio

= 2698.33/6595.41 = 40.91%

4.6. Branch Performance & Growth 4.6.1. Deposit Growth ;

Dhanmondi branch of PEL mobilized total deposit of Tk. 6595.41 lac

at the end of December 2002 as against Tk. 3356.58 lac on 2001. The

deposit growth of the branch (2001-2002) is shown bellow.

Year 2001 2002

Tk. (in lac) 3356.58 6595.41

(Sources of Data: Dhanmondi Branch of PEL)

4.6.2. Advance Growth;

The total loans & advances of Dhanmondi branch of PBL stood at Tk.

2698 Lac as on Dec. 30, 2002 where on Dec. 30, 2001 it was Tk. 324.32

lac & increase of 87.99% over the preceding year. The advance growth of

the branch is shown is below:

Year 2001 2002

Tk. (in lac) 324.32 2698

4.6.3 Month wise trend of Deposit & Advance of Dhanmondi branch of PBL

for the year 2002 (Jan.-Dec.) are furnished bellow:

Month Deposit AdvanceJanuary 3269.50 362.52February 3482.96 377.47March 3748.95 566.40April 4147.52 1085.07May 4262.36 1491.92June 4809.66 1590.09July 5248.75 1551.65

August 5783.08 1605.81September 6221.18 1704.14October 9799.21 1649.61

November 6465.89 1837.82December 6595.41 2698.33

4.6.4 Net Profit;

I have already mentioned that, Dhanmondi Branch of PEL Started

in 02 May, 2001. In these short time the Branch achieved satisfactory

progress in every aspects of it operations. During the year 2002 this branch

earned profit worth Tk. 105 lac as against Tk. -33 lac on 2001.

Year 2001 2002

Tk. in lac -33 105

(source of Data: Dhanmondi Branch of PBL)

Recommendations :

After conducting the survey in different private banks, gathering

& analyzing the data on deposit, I have found a fewer number of factors as

problems. The following major problems of the PEL & recommendation are

thus advised:

To increase effectiveness of various activities on deposit the bank

should have to select only potential customer on the basis of the

customer's good character, resourcefulness, reliability & responsibility,

They should increase mess communication with the clients, Guarantors

& renowned sellers of consumer products.

To reduce their defaulter customer & & earn more profit, they

should have to reduce their interest rate because their interest rate is

higher than that of other Banks.

for successful handling of this scheme proper supervision &

monitoring is essential, so PEL should utilize its existing

Management Information system (MIS) effectively.

to increase recovery rate, the bank should follows the

following particulars:

Regular checking of the balance of clients SB/CD/A/CS.

Regular communication with the defaulter customers and

guarantors

Issuance of letter to customers immediately after dishonor

of cheque.

Issuance of letter to the defaulter customer and respective

guarantors.

Contact with the employers f the defaulter customers (After

03 overdue installment)

Issuance of legal notice to the defaulter customers and

guarantors prior to classification of the loans.

Issuance of Appreciation/ Greetings Letter to the regular

customers.

Periodical visit with the customer to maintain relationship and

supervision of supplied articles.

Legal action to be taken after failing all possible efforts to

recover the Bank's dues.

The market position of this scheme is very competitive, so PBL

should have to take some extensive promotional activities to attract more

consumers

Conclusion:

The Banking sector plays an important role in modern society &'

private banks has made more competitive, diversified & dynamic;

compared to traditional banking system. Every day new competitors

appear into the industry with better innovative ideas & product as well,

services. "Deposit Scheme" is one of the innovative products. PBL is a

leading bank for financing & operating Deposit program with more

attractive benefits in the private banking sector in our country.

In order to serve within such competitive market PEL needs to

decrease interest rate for their consumer credit scheme. According to the

survey there are few private banks operating this program with low

volume & some newly established banks are planning to launch this

program in a large volume. In this situation, If interest rate decreases &

some extensive promotional activities are taken, PBL can actually attract

more customer of Deposit & can drive to higher level of performance.

References:

1. 1999, Annual Report, Prime Bank Limited;

2. 2000, Annual Report, Prime Bank Limited;

3. 2001, Annual Report, Prime Bank Limited;

4. Half yearly performance report of PBL for the year of 1999,2000,2001, and

2002.

5. Brochures of different programs of PBL