General Banking of Jamuna Bank Limited

General Banking of Jamuna Bank Limited”

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This report has been prepared on “General Banking System of Jamuna Bank Limited: A Case study on Motijheel Branch, Motijheel, Dhaka”

Capital formation is deemed as a significant variable for economic development. An efficient and well-organized financial system contributes to the much-desired economic development through capital formation. Commercial banks constitute the most important function in the whole network of the financial system for mobilization of savings, intermediation between savers and investors and allocation of credit to productive sectors and thus play a dynamic role in the economic development of a nation. Banks offer necessary finance to set up and run the industries and provide finance to agriculture and other sector of the economy. Throughout the last few years Bangladesh has been experiencing a rapid and significant change in the banking sector. Not only in our country, all over the world the dimension of banking has been changing rapidly mainly due to the technological innovation, globalization and deregulation.Now the condition is such that banks must compete in the market place both with local institutions as well as foreign ones. For this reason, I choose the Banking sector for successful completion of my internship program.

Jamuna bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban (2nd, 3rd & 8th floor), 3, Dilkusha, C/A, Dhaka-1000, Bangladesh. The Bank started its operation from 3rd June, 2001.

Credit is a phenomenon of the economic development and banking system plays a crucial rule in this process. Credit is the important determinants of money creation, and hence of production, consumption and national income. After the liberalization, government wants to increase it productivity. Banking sector has positively contributed in raising domestic income and geared up through a dynamic credit policy to make the fund available for investment to individual customers, the industrial and commercial sector.

For the investment of bank mainly accumulate its funds from the depositor, borrowings from other bank and financial institution and selling securities. Banks have to deposit significant portion to the BB as a mandatory reserve, invest ingovt. securities, call money, fixed assets etc. and rests are invested in Loans & Advances. Theseloans and advances are provided to the small business and Multinational Corporation and different customer belonging to the society and satisfy their requirements.

JBL is committed to ensure its national economy through professional and disciplined growth strategy. JBL objective is to keep the social commitment and for that it ensures cooperation to the people of all level, to the businessman, industrialist-specialty who are engaged in large-scale industry, agro-based export oriented medium and small-scale industry by self inspiration.

The 1st part contains the background, objectives, scope etc of the study and the 2nd chapter described about the banking sector in Bangladesh. On the other hand, the 3rd chapter describes about the JBL, 4th chapter deals with the Literature part; the 5th chapter contains the working part and in 6th chapter discussed the project or analysis part such as findings. The 7th chapter discussed with the conclusion part of this report such as recommendation, conclusion and bibliography.

Preface

Commercial banks in Bangladesh economy are facing increased competition for their business in coming days, like any other emerging market economies. Their business is no longer remaining easy as they were earlier. The real change in the banking business has started to come with the government’s decision to allow the business in the private sector in the middle of the eighty’s. This report is an effort to reflect a clear idea about the strategies, activities, and performance of Jamuna Bank Ltd. regarding general banking activities.

The General Banking department is the vital part for financial institution. It is linked with all other department. So it is very important to have an effective and sound management System in banking business. Bank is an important and the most appropriate institution for the necessity of the use of money and the protection of the money. As a BBA student, financial institutions are the most appropriate field to gather the experience and among the financial institutions, Bank is the most prominent place.

All over the world the dimension of banking has been altering rapidly due to deregulation, technological modernism and globalization. Now bank must complete the market place both with local institution as well as foreign ones. To survive in this competitive banking world banks entail to develop appropriate financial structure, enlarge professionalism in the sense of developing appropriate manpower structure and expertise and experience.

Objective of the Report

The objectives help in explaining the broad objectives are as follows:

To give an overview on Jamuna Bank Ltd. and its services,

Focusing on the brief description of general banking,

To know deeply about general banking procedure,

To examine bank’s performance in general banking activities,

To know how they minimize general banking risks,

To focus on some other activities of general banking,

To specify some findings on given topic, and

To reveal some recommendations for better performance in general banking

1.3 Methodology

The methodology of this report is very different from conventional reports. I have emphasized on the practical observation though this report has to need some primary and secondary data. Nevertheless, eventually almost the entire report consists of my practical observation.

1.3.1Source of Data Collection

While preparing the report, I have taken information from the following sources:

Primary Sources

Personal Interview – Face-to-face conversation and in depth interview with the respective officers of the branch.
Personal observation – Observing the procedure of banking activities followed by each department.
Practical work exposures on different areas of the branch.

Informal conversation with the clients or customers.
Relevant documents related to the study as provided by the officers. Observation of banking activities.
Overflowing Conversation with the in-charge of general banking department of Jamuna Bank Ltd, Dhanmondi Branch.
Working with my own experience while internship program.

Secondary Sources

Annual report (2007) of the bank,
Periodicals published by Bangladesh Bank,
Different publications regarding banking functions

Websites and Newsletters are also used as major sources.
Daily diary (containing my activities of practical orientation in Jamuna Bank Ltd.) maintained by me,
Various publications on Bank,
Website of Bangladesh Bank, and
Different circulars issued by Head Office and Bangladesh Bank

Limitation

Some of the limitations faced in preparing this report are:

It was very difficult to collect the information from various personnel for their job constraint.
Bank secrecy posed a major problem since discloser of some information’s been restricted
The officers at the General Banking Department are very much busy with their daily activities. They are interested to help me but have no time to do that. This is the main limitation of the study and the customers are also seem to busy.
Sufficient records, publications, facts & figures are not available. These constrains narrowed the scope of real analysis.
There were some difficulties in understanding some activities due to not being relevant to the theoretical knowledge.
Due to confidentiality the Bank’s policy restricts disclosing some data.
The study of such a short course of time is not free from limitation. So time limitation is the main point of limitation.
The data relevant for the analysis report writing sometimes could not be collected due to excessive year-ending workload at the branch.
During the month of January in the branch, there was excessive year-ending workload, which sometimes acts as a barrier on the way of my effort.

Serial

Sub Point

Topic

Page No

Acknowledgement / I
Executive Summery / II

Introduction

1. / Problem Definition / 01
1.1 / Background of the study / 01
1.2 / Objectives of the study / 01
1.2.1 / General objectives / 01
1.2.2 / Specific objectives / 02
1.3 / Scope of the study / 02
1.4 / Statement of the Problem / 02

Bank in Bangladesh

02 / Banking sector in Bangladesh / 03
2.1 / History and background of the bank / 03
2.2 / Global economy : an overview / 04
2.3 / Domestic Economy / 04
2.4 / Financial Market scenario of Bangladesh in GDP / 05
2.5 / Bangladesh Bank / 06
Organization Part
3.1 / Basic Information of JBL / 09
3.1.1 / Nature of Business / 09
3.1.1 / Vision of MBL / 09
3.1.2 / Mission of MBL / 09
3.2 / JBL Corporate Information / 13
3.3 / Business Performance of JBL / 13
3.4 / Financial Performance of JBL / 16
3.9 / Online Banking / 19
3.10 / 24 hours Q-Cash ATM / 19
3.14 / Future Thrust / 20
3.15 / Competitors / 20
3.16 / Threat of new entrants / 20
3.17 / SWOT Analysis / 21
3.18 / Balance Sheet / 22
3.19 / Profit and Loss Account / 24
3.20 / List and Addresses of Branches / 25
04 / JBL Motijheel Branch / 26
4.1 / JBL Motijheel Branch at a glance / 26
4.2 / Organization Chart / 27
4.3 / Performance of Motijheel Branch / 28
4.3.1 / Cost / 28
4.3.2 / Deposit and Advances / 29
4.3.3 / Import / 30
4.3.4 / Export / 31
4.3.5 / LDBP / 32
4.3.6 / Profit and Loss / 33

Literature Part

05 / Marketing
5.1 / Marketing concept / 34
5.1.1 / The Marketing Process / 35
5.1.2 / Understand the marketplace and customers needs & wants / 36
5.1.3 / Elements of modern Marketing system / 36
5.2 / Definition of Marketing Mix / 37
5.2.1 / Elements in the Marketing Mix / 37
5.2.2 / Marketing segmentation / 38
5.3 / Definition of service / 39
5.3.1 / Categories of Service Mix / 39
5.3.2 / Characteristics of service / 39
5.4 / Building Customer Relationships / 40
5.4.1 / Customer relationships management (CRM) / 40
5.5 / Service-quality Model / 41

Working Part

06 / Department wise Activities / 44
6.1 / General banking Section / 44
6.1.1 / Deposit Section / 44
6.1.2 / Different types of Account / 44
6.1.3 / Savings Account / 46
6.1.4 / Short Term Deposit / 46
6.1.5 / MSS (Monthly Savings Scheme) / 47
6.1.6 / MBS (Monthly Benefit Scheme) / 48
6.1.7 / DGDS (Double Growth Deposit Scheme0 / 47
6.1.8 / TGDS (Triple Growth Deposit Scheme) / 49
6.1.9 / Fixed Deposit / 49
6.2 / Cash Section / 51
6.3 / Remittance and Collection / 51
6.3.1 / Pay Order (PO) / 51
6.3.2 / Demand Draft (DD) / 53
6.4 / Collection and Clearing Section / 54
6.5 / Accounts Section / 56
6.6 / Loans and Advances of JBL / 57
6.6.3 / Types of Credit / 58
6.6.5 / Credit Policy of JBL / 58
6.6.8 / The Procedures of Sanctioning Loan & Advances / 62
6.6.9 / Disbursement Process / 62
6.7 / Foreign Exchange Department / 62
6.7.1 / Letter of Credit / 63
6.7.1.4 / Types of Letter of Credit / 67
6.7.2 / Foreign Remittance / 68
6.7.3 / Rate of Exchange / 69

Analysis Part

07 / Analysis / 70
7.1 / Approach to the Problem / 70
7.2 / Research Design / 70
7.3 / Data Analysis / 72
7.3.1 / Methodology / 72
7.3.2 / Plan of Data Analysis / 74
7.4 / Analysis of Questionnaire / 74
7.5 / Results / 84
08 / Developing the Position of JBL / 86
Conclusion
9.1 / Limitations / 90
9.2 / Findings / 91
9.3 / Recommendation / 92
9.4 / Conclusion / 93
Appendixes
10.0 / References / 94
10.1 / Acronyms / 95
10.2 / Exhibits / 96

List of Tables

Serial /

Name of the Table

/ Page no
01 /

Total Investment in GDP

/ 05
02 / Exchange Rate for Buying & Selling / 07
03 / Highlights for the year 2007 and 2006 / 11
04 / Authorized & Paid up Capital of JBL / 16
05 / Reserve Fund of JBL / 16
06 / Deposit Position of JBL / 17
07 / Investment Position of Jamuna Bank / 17
08 / Performance of JBL Motijheel Branch / 26
09 / Month wise cost of JBL Motijheel Branch / 28
10 / Deposit & Advances of JBL Motijheel Branch / 29
11 / Month wise Import of JBL Motijheel Branch / 30
12 / Month wise Export of JBL Motijheel Branch / 31
13 / Month wise LDBP of JBL Motijheel Branch / 32
14 / Month wise Profit & Loss of JBL Motijheel Branch / 33
15 / Interest rate of SB, CD & SRD A/C / 47
16 / Interest of MSS / 48
17 / Interest of FDR / 49
18 / Charge amount of PO / 53
19 / Incidental Charges of JBL / 54
20 / Interest rate of different Types of Advances / 60
21 / Sex of Respondents / 74
22 / Age of respondents / 75
23 / Profession of respondents / 75
24 / Education of respondents / 76
25 / Year / 76
26 / The type of Account they have or not / 77
27 / The reason for choosing JBL / 78
28 / Which service you received best during transaction / 79
29 / Which service you received best during transaction / 80
30 / determinants of quality service of the bank / 81
31 / JBL is better than other bank / 82
32 / Need more Improvement in Quality of Service / 82
33 / Bank service meets your expectations / 83

List of Figure

Serial / Name of the Table / Page no
01 / Total Investment in GDP / 05
02 / Banking Operation under BB / 08
03 / Organogram of Jamuna Bank Limited / 12
04 / Authorized & Paid up Capital of JBL / 16
05 / Reserve Fund of JBL / 16
06 / Deposit Position of JBL / 17
07 / Investment Position of Jamuna Bank / 17
08 / Organogram of JBL Motijheel Branch / 27
09 / Month wise cost of JBL Motijheel Branch / 28
10 / Deposit & Advances of JBL Motijheel Branch / 29
11 / Month wise Import of JBL Motijheel Branch / 30
12 / Month wise Export of JBL Motijheel Branch / 31
13 / Month wise LDBP of JBL Motijheel Branch / 32
14 / Month wise Profit & Loss of JBL Motijheel Branch / 33
15 / Social Marketing Concept / 34
16 / Selling & Marketing Concept / 35
17 / Marketing Process / 35
18 / Elements of modern Marketing system / 36
19 / Elements in the Marketing Mix / 37
20 / Characteristics of service / 40
21 / Model of Service quality gaps / 42
22 / Flow Chart of Pay Order working procedure / 52
23 / Flowchart of collection procedure / 55
24 / Loan Processing System / 61
25 / Parties involved to letter of credit / 64
26 / Flow chart of the research process / 73
27 / Sex of Respondents / 74
28 / Age of respondents / 75
29 / Profession of respondents / 75
30 / Education of respondents / 76
31 / Year / 76
32 / The type of Account they have or not / 77
33 / The reason for choosing JBL / 78
34 / which service you received best during transaction / 79
35 / which service you received best during transaction / 80
36 / determinants of quality service of the bank / 81
37 / JBL is better than other bank / 82
38 / Need more Improvement in Quality of Service / 82
39 / Bank service meets your expectations / 83

1. PROBLEM DEFINITION

1.1Background to the problem

Throughout the last few years Bangladesh has been experiencing a rapid and significant change in the banking sector. Not only in our country, all over the world the dimension of banking has been changing rapidly mainly due to the technological innovation, globalization and deregulation. This change all over the world has significantly affected the banking industry of our country, the result of which is the change in this sector in our country. Now the condition is such that banks must compete in the market place both with local institutions as well as foreign ones. For this reason, I choose the Banking sector for successful completion of my internship program.

Internship program is a prerequisite for acquiring BBA degree. Students of BBA program fromStamford UniversityBangladesh alsorequire undertaking Internship Program that bears 6 credit hours. During this Internship Program, students are required to prepare a report on respective Organization. As part of the program, I am highly proud to join with Jamuna Bank Limited as Internee and selecting topic “General Banking of Jamuna Bank Limited”. I was placed in Jamuna Bank Motijheel Branch for a period of three months. This internship is an orientation to the entire working activities of Jamuna Bank Ltd. and a study on an overall banking area. At the time of working there, I had to select an area of study in which I can make detail research and present my understanding in the report. From this perspective, on completion of 3 months internship program, I have prepared this report. I highly appreciate this assignment and do hope that it will play a great role in building by future career.

It is a nice opportunity for the graduates to have a taste of the real business world before starting their career. Internship, in the modern business world, helps students to demonstrate skills and competence from their supervised experience and, in addition, enables them to demonstrate maturity and acceptable professional, personal and interpersonal behavior. As the classroom discussion alone cannot make a student perfect in handling the real business situation, therefore it is an opportunity for the students to get accustomed with the real life situation through this program.

1.2 Objectives of the study

1.2.1 General objectives

The Main Objective of the study is to “General Banking of Jamuna Bank Limited”. But this is not the main objective of this study; the following are the other Objectives of the title of the report-

1.2.2 Specific objectives

To analyze the gap between expectation and perception of customers regarding the service provided by JBL.

Presentation of an introduction to the organization Jamuna Bank as a whole.

To find out existing problems of JBL.

Identify some better strategies and suggest it for their policy implication.

To find out how efficiently its present strategies are working.

Find out the marketing strategy of JBL, and how they formulate their marketing strategy

1.3 Scope of the study

An infrastructure of the organization has been detailed, accompanied by a global perspective and look into the future. The scope of this report is limited to the overall description of the company, its services, and its position in the market and its marketing strategy. The scope of the study is limited to organizational setup, functions, and performances for customer satisfaction.

During three months internship work in the Jamuna Bank Ltd, I worked to find out what customers think, feel and act toward the Mercantile Bank Ltd. Basically it is the measurement of customer satisfaction on the Jamuna Bank and also overall description of the bank, its services, position, marketing strategies, functions, and performances. To do these I surveyed the respondents of Motijheel branch who live in Dhaka.

The study would focus on the following areas:

of Jamuna Bank Ltd.
Remittance and clearing section of JBL.
Credit operation of Jamuna Bank Ltd.

Foreign Trade of Mercantile Bank Ltd.

Each of the above areas would be critically analyzed in order to identify the service quality of the bank.

1.4 Statement of the problem

“General Banking of Jamuna Bank Limited.”

2. BANKING SECTOR IN BANGLADESH

2.1 Definition of Bank