Prime Bank Limited

a bank with a difference

1.0 INTRODUCTION
1.1ORIGIN OF THE REPORT
Prime Bank Limited is a fast growing private sector bank in Bangladesh. The main
objective of this report is to evaluate the performance of deposit schemes of Prime Bank
Limited. In terms of deposit schemes, credit facility and uality services to the customers
and value addition for the shareholders, Prime Bank Limited is already maintaining its
position at the top slot. The bank has already proved satisfactory progress in all areas of
banking operation and it further e!panded and consolidated its customer base in both of
its core business and retail banking. Prime Bank Ltd. is determined to e!plore the
different ways to accommodate with the needs of its clients.
1.2OBJECTIVE OF THE REPORT
The objectives of the study are as follows"
Br!ad O"#e$ti%e
The major objective of the report is to have a clear idea about the #$arketing of
%inancial Products& of Prime Bank Limited and to compare the deposit schemes with
other private banks.
Genera& O"#e$ti%e
The general objective of the report is to know about the management system of
Prime Bank Limited as a private commercial bank, its formation, and its
functional, operational and financial aspects.
To identify different deposit schemes available in Prime Bank Limited.
To identify the benefits of deposit schemes in Prime Bank Limited regarding
other private banks.
To make a comparison on deposit schemes between Prime Bank and other private
sector Banks.
To make recommendations regarding the Bank&s 'eposit (cheme.
)
Prime Bank Limited
a bank with a difference
1.' COPE OF THE REPORT
This report will cover the details of Prime Bank&s practices about various 'eposit
(chemes. *ow a day 'eposit (chemes are very much important for fi!ed income people.
In the report, I will try to focus on the various deposit schemes, its functions, its history,
using business correspondence analysis of this sector as well as its role in our economy.
It will also cover the deposit procedures and performance of Prime Bank Ltd. %inally it
will incorporate an evaluation of the various 'eposit (chemes in comparison to other
competitor private banks and recommends some measures to strengthen more its deposit
schemes.
1.( )ETHODOLOG* OF THE REPORT
1.(.1 Re+ear$, De+i-n
+!ploratory research will be conducted for gathering better information which
will able to give a better understanding on various deposit schemes. Both primary and
secondary sources of data collection procedure will be used in the report. Primary data
would be collected mainly through the writer&s observation of the approval process and
monitoring techniues, informal interviews of e!ecutives, officers and employees of
Prime Bank Limited.
1.(.2 !.r$e+ !/ Data C!&&e$ti!n
To make the ,eport more meaningful and presentable, two sources of data and
information have been used widely.
(ource of 'ata
%igure ).)" (ources of data
Both primary and secondary data sources were used to generate the report.
The -Primary sources- are as follows.
/ %ace.to.face conversation with the respective officers and staffs of Prime Bank
and other banks.
0
P,I$1,2
'1T1
(+34*'1,2
'1T1
Prime Bank Limited
a bank with a difference
/ Informal conversation with the clients.
/ Practical work e!posures from the different desks of the departments of the
Branch.
/ (tudy of the relevant files as instructed as instructed by the officers concerned.
The -(econdary (ources- of data and information are.
/ 1nnual reports of PBL and other Banks.
/ Training materials available at the BIB$ library,
/ 5arious books articles, compilations etc. regarding marketing of financial
products.
1.(.' Data ana&0+i+
The report will be aimed at depicting the various 'eposit (chemes of Prime Bank
Limited. The data should be gathered from both primary and secondary sources would
arranged orderly to get a clear picture of the bank&s various deposit scheme and the other
banks. The study will include both ualitative and uantitative analysis of deposit
procedures and monitoring tools. Based on the observational information writer will also
tried to evaluate and analy6e the problems involved in deposit schemes.
1.1 LI)IT2TION OF THE TUD*
There are certain limitations regarding the study that is summari6ed below"
'eficiencies in data reuired for the study.
%ield practice varies with the standard practice that also created problem.
Time provided for conducting the study is another important constraint.
The employees in Prime Bank Limited are so much busy in their responsible
fields, they could hardly provide little time to discuss with them.
$arketing is a very wide spectrum. 7owever banks in Bangladesh do not even
have a separate marketing division and spend less then )8 of their budget on
marketing. I could not therefore focus on marketing practices on local banks, as
there is not much to deal with.
9
Prime Bank Limited
a bank with a difference
2.0 CO)P2N* PROFILE
2.1 B2N3ING HITOR* IN B2NGL2DEH
1fter liberation, there were 0 types of financial institutions in Bangladesh. The
nationali6ed commercial banks i.e. 1grani, :anata, ,upali and (onali Bank and
development %inancial Institutions ;'%Ls< like Bangladesh =rishi Bank, Bangladesh
(hilpa Bank., B1(I3 Bank and ,jshahi =rishi >nnayan Bank. The '%Is were different
from the banks in the sense that their main motive was not profit ma!imi6ation but to
help the small and medium +nterprises in the country grow. It was mandatory for the
'%Is to disburse at least ?@8 loans to the ($+(.
1
+t
Generati!n Bank+ 4E+ta"&i+,ed 15627156689
*ational Bank Limited, The 3ity Bank Limited, >nited 3ommercial Bank Limited, 1B
Bank Limited, I%I3 Bank Limited, Islami Bank Bangladesh Limited and 1l.Baraka
;4riental< Bank Limited.
2
nd
Generati!n Bank+ 4E+ta"&i+,ed 15527155:89
Prime Bank Limited, +astern Bank Limited, *ational 3redit A 3ommerce Bank
Limited, (outheast Bank Limited, 'haka Bank Limited, 1l.1rafa Islami Bank Limited,
(ocial Investment Bank Limited and 'utch.Bangla Bank Limited.
'
rd
Generati!n Bank+ 4E+ta"&i+,ed 1555 t! ;re+ent89
$ercantile Bank Limited, (tandard Bank Limited, 4ne Bank Limited, +BI$ Bank
Limited, Premier Bank Limited, $utual Trust Bank Limited, %irst (ecurity Bank
Limited, Bank 1sia Limited, The Trust Bank Limited, :amuna Bank, Brac Bank, and
(hahjalal Bank.
(o it seems that Prime Bank is in the second.generation group, which is characteri6ed by
establishment that is characteri6ed by establishment in the mid )CC@&s and relatively
medium asset si6e. (econd generation group mainly pursue progressive growth to the
general public with relatively healthy asset. 1ccording to e!ecutives in Prime Bank,
D
Prime Bank Limited
a bank with a difference
credit performance of second.generation P3Bs like. 'haka Bank, Premier Bank, 'utch.
Bangla Bank, (outheast Bank, etc are the best in terms of 3amel ,ating. Therefore, it is
logic to say that Prime Bank operates in a very competitive environment and its main
competitors are the members of second.generation group.
2.2 INCORPOR2TION OF THE ORG2NI<2TION
In the backdrop of economic liberali6ation and financial sector reforms, a group of
highly successful local entrepreneurs conceived an idea of floating a commercial bank
with a different outlook. %or them it was competence, e!cellence and consistent delivery
of reliable service with superior value products. 1ccordingly, Prime Bank Limited was
created and commencement of business started on )E
th
1pril )CCF.
Prime Bank Ltd. is operating as a scheduled bank under the banking license issued by
Bangladesh Bank, the 3entral Bank of the country on 1pril )E, )CCF through the
opening of its $otijheel Branch at 1damjee 3ourt 1nne! Building, $otijheel
commercial area, 'haka.)@@@. PBL was actually registered under the 3ompanies 1ct of
)C)9 with its registered office at F, ,ajuk 1venue, $otijheel commercial area, 'haka.
)@@@ which was later shifted to 1damjee 3ourt 1nne! Building, ))C.)0@, $otijheel
commercial area, 'haka.)@@@.
1s a fully licensed commercial bank, Prime Bank Limited has being managed by highly
professional and dedicated team with long e!perience in banking. They constantly focus
on understanding and anticipating customer needs. 1s the banking scenario undergoes
changes so does the bank and it adjusts and repositions itself to the changed conditions.
In its )@
th
year of operation in 0@@F, Prime Bank has made substantial headway in terms
of business growth, profitability and establishing its image as one of the leading private
commercial banks. Its march towards reaching greater heights in operation continues
with full vigor and enthusiasm. Prime Bank has made significant progress within a very
short period of its e!istence. The bank has been graded as a top class bank in the country
through internationally accepted 31$+L ,ating. The bank has already occupied an
enviable position among its competitors after achieving success in all areas of business
operations.
F
Prime Bank Limited
a bank with a difference
Prime Bank Limited offers all kinds of commercial, corporate and personal banking
services covering all segments of society within the framework of banking rules and
regulations laid down by the 3entral Bank. 'iversification of products and services
include corporate banking, retail banking and consumer banking right from industry to
agriculture, real state, software and other sectors.
Prime Bank Limited is a fast growing private bank and it is already at the top slot in
terms of uality service to the customers and value addition for the shareholders. In the
last few years Prime Bank made satisfactory progress in all areas of business operation.
The bank managed to further e!pand and consolidate its customer base in both of its core
businesses and retail banking.
Prime Bank Limited is one of the strong capital based banks in the country with capital
adeuacy ratio of )@.ED8 as on 'ecember 0@@D, which is well above the stipulated
reuirement of G8. The authori6ed capital of the bank is Tk. D@@@.@@ million and paid up
capital stood at Tk. )@@@.@@ million as on 9)
st
'ecember 0@@D. 4n this date the reserve
fund of the bank stood at Tk. CG?.F) million while the euity fund was Tk.009C.G
million. The total asset of the company was Tk. 909?).?0 million in 0@@D. The sources
of fund of Prime Bank Limited are paid up capital ;98<, reserves and surpluses ;F8<,
deposits ;G)8< and other Liabilities ;)08<. The use funds is concentrated as loans and
advances ;?98<, investments ;)@8<, fi!ed assets ;)8, liuid assets ;0)8< and other
assets ;F8<.
Prime Bank has been very selective in locating branches so that customers are better
served. The bank&s currently has a network of 9? branches allover Bangladesh and a
booth located at 'haka 3lub, 'haka. The bank also plans to add a few branches to its
network that will give the bank strategic advantage in terms of operation and business
potential. Prime Bank&s aim is to be the leading bank in the countryHs principal markets.
The bank by concentrating on the activities in its area of speciali6ation has achieved
good market reputation with efficient customer service. Prime Bank consolidated its
position and retained its product line and financial services aimed at various target
?
Prime Bank Limited
a bank with a difference
groups. In a challenging market conditions, this bank continued to provide more
innovative products and better services to retain and e!pand its market share. The bank is
committed towards providing continuous training to its staff to keep them up to date with
modern practices in their respective fields of work. This bank also tries to fulfill its share
of community responsibilities. By such measures the bank intends to grow and increase
shareholder&s earning per share.
2.' CO))ENCE)ENT OF OPER2TION
Prime Bank Ltd. started its operation on )E
th
1pril, )CCF with an authori6ed capital of
Tk. )@@@ million and paid up capital of Tk. )@@ million by a group of highly successful
entrepreneurs who are established in various fields of economic and business activities.
PBL is a fully licensed scheduled commercial bank set up in private sector in pursuance
of the Iovernment of Bangladesh to liberali6e banking and financial services.
Till now, the branch network of Prime Bank Ltd. increased to D0 with F new branches in
the last of the year 0@@F. 3urrently, there is no proposed branch. The commercial and
investment services of PBL range from small enterprises to big business loans to all type
of customers. Besides this, the bank actively participates in socio.economic development
of priority sectors like agriculture, industry, housing, self.employment, etc. PBL is also a
pioneer in providing consumer loans as well as financing the industries and transport
sector through attractive leasing and higher purchase scheme.
2.( VIION OF PRI)E B2N3 LTD.
To be the best Private 3ommercial Bank in Bangladesh in terms of efficiency, capital
adeuacy, asset uality, sound management, and profitability having strong liuidity.
2.1 )IION OF PRI)E B2N3 LTD.
To build Prime Bank Limited into an efficient. $arket driven, customer focused
institution with good corporate governance structure. 3ontinuous improvement in Bank&s
business policies, procedures and through integration of technology at all levels.
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Prime Bank Limited
a bank with a difference
2.: OBJECTIVE OF PRI)E B2N3 LI)ITED
Prime Bank aims to continuously update and develop its product line and range
of services to cater to the needs of retail and corporate customers. To achieve this goal,
efforts have been directed in three main areas"
'esign and introduction of new products and services
(haping and developing the system to face new challenges and emerging need of
the market
%ull implementation and utili6ation of the Bank&s e!cellence program which aims
to provide service to customers.
Jhile strengthening risk management and improving asset uality is the main
focus of the bank, it is also aware of its responsibility to the society. Jith this noble
intention, Prime Bank %oundation was established in 0@@), which took part in diverse
charitable and voluntary programs to alleviate poverty and community welfare.
2.= >2L3>2* OF PRI)E B2N3 LTD.
15519 3reated and commenced its operation on )E
th
1pril )CCF. ,enowned banker $r.
Luthfur ,ahman (harker was the first $anaging 'irector of this Bank.
155:9 Incorporated in 'haka (tock +!change. 4n 0)st *ovember $r. (harker resigned.
155=9 4n G
th
1pril $r. =a6i 1bdul $a6id took over the leadership of the bank as a
$anaging 'irector. *o of branches of the bank reached at )?
th
covering all divisional
city of Bangladesh. Paid up capital reached from T=. )@@ to 0@@ million. 4ne Islamic
Banking branch started its operation at $otijheel.
15569 *o of branches reached at )G including two Islamic banking branches.
1555" $r. *aser Bukhtear 1hmed joined as a deputy $anaging 'irector with lot of
e!perience and foreign banking e!posure. *o of branches reached at 0@. 4nline banking
and credit card facilities were started.
20009 *o.) bank in 31$+L rating announced by Bangladesh Bank in Bangladesh.
$r. $. (hajahan Bhuian joined as a (enior +!ecutive 5ice President came from
G
Prime Bank Limited
a bank with a difference
>nited 3ommercial Bank Limited.
2001" *umber of branches reaches at 0?. $r. =a6i 1bdul $a6id resigned from the Bank
and $r. *aser Bukhtear 1hmed took over the charge as a $anaging 'irector. $r. $.
(hajahan Bhuian was the 'eputy $anaging 'irector. 1lso the no.) bank in terms of the
31$+L ,ating announced by Bangladesh Bank in Bangladesh.
20029 $r. (hah $d. *urul 1lam joined as a $anaging 'irector from (outheast Bank
Limited after $r. Bukhtear resigned. (till it the number one bank in terms of 31$+L
,ating. *umber of branches reached at 0E including three Islamic banking branches.
20019 The number of Prime Bank branches reaches 9?, and of it F branches are
designated Islamic branches complying with the rules of Islamic (hariah the modus
operandi of which is substantially different from other branches run on commercial
conventional basis.
2.6 PRI)E B2N3? ORG2NI<2TION2L TRUCTURE
Prime Bank is listed with promoter shareholders& collectively holding a D?8 stake in the
bank. 4ne of the main reasons for the bank&s good financial condition is that the bank&s
promoters, who have other business interests as well, have refrained from using the bank
for insider lending. This is a huge issue for Bangladeshi private banks and together with
somewhat la! supervision, is the single biggest factor for the poor financial condition of
most private banks. Jhile Prime Bank has so far benefited from its promoter
shareholders& approach of maintaining an arms.length relationship between the bank and
their other businesses, whether this would continue to be the case in future, particularly
when the second.generation promoters become directors of the bank remains to be seen.
The bank had a rather large board ;0@ members in all< with representatives from all the
major shareholders. Previously central bank norms prevented any one shareholder
individually holding an euity stake of greater than F8 in the bank, this was the reason
for the 0@ directors sitting in the board. The central bank rules in this regard have
undergone a slight change. *ow the rules are that the individual holding has been
enhanced to )@8 and the si6e of the Board will now be restricted to )9 members, which
should include at least two independent directors.
C
Prime Bank Limited
a bank with a difference
The bank&s board has a policy of rotating the 3hairman&s position amongst various
membersK conseuently the bank has a new 3hairman every year. The e!ecutive
management also appears a bit top.heavy ;relative to the si6e of the bank< with one
additional managing director besides the managing director, a (enior +!ecutive 5ice
President, four +!ecutive 5ice Presidents and many (enior 5ice Presidents. Prima.facie
the rotating 3hairman and the presence of effectively two managing directors may lead
to some overlapping responsibilities and possible conflictK however this does not seem to
have happened so far in the bank&s history and the bank continues to perform
satisfactorily.
2.6.1 Or-ani@ati!na& tr.$t.re9
'esignation in ascending order
&. N!.
De+i-nati!n
). $anaging 'irector
0. 'eputy $anaging 'irector
9. (enior +!ecutive 5ice President
D. +!ecutive 5ice President
F. (enior 5ice President
?. 5ice President
E. (enior 1ssistant 5ice President
G. 1ssistant 5ice President
C. %irst 1ssistant 5ice President
)@. (enior +!ecutive 4fficer
)). +!ecutive 4fficer
)0. Principal 4fficer
)9.
(enior 4fficer
$anagement Trainee
)D. 4fficer
)F. :unior 4fficer
)?.
1ssistant 4fficer
Trainee 1ssistant
2.6.2 Hierar$,0 !/ Prime Bank
3hairman
Board of 'irectors
+!ecutive 3ommittee
)@
Top $anagement
Prime Bank Limited
a bank with a difference
$anaging 'irector
1dditional $anaging 'irector
'eputy $anaging 'irector
(enior +!ecutive 5ice President
+!ecutive 5ice President
(enior 5ice President
5ice President
(enior 1ssistant 5ice President
1ssistant 5ice President
%irst 1ssistant 5ice President
(enior +!ecutive 4fficer
+!ecutive 4fficer
Principal 4fficer
(enior 4fficer
$anagement Trainee 4fficer
:unior 4fficer
2.5 O>N VIE> 2BOUT PRI)E B2N3 LI)ITED
Prime Bank Ltd. $ohakhali branch is the largest and most profit.earning branch. It is a
three.storied branch. In the )
st
floor there is Ieneral Banking 'ivision. In the 0
nd
floor
there is 3redit 'epartment, 1ccounts 'epartment and the chamber of branch manager
and in the 9
rd
floor there is foreign e!change department. The working environment is
very good here. +mployees can work in a very calm but important area considering its
location. The branch has some big clients who are continuously giving earning to the
branch. 1mong them there are (uare Toiletries, (audi Bangla %ish %eed, Inde! 1gro,
))
+!ecutive Level
$anagement
$id Level
$anagement
:unior Level
$anagement
Prime Bank Limited
a bank with a difference
3omputer 5alley, Iulshan Trading, 'haka Ice 3ream, Lilac 3hemicals, (cholastica Pvt.
Ltd, (tandard Iroup, 1= Traders, Pacific $otors, +ast Jest >niversity, Brac
>niversity, T(34 Power, T$ International etc. The performance of the branch is very
successful. Last fiscal year the branch was well ahead of its target in terms of profit,
deposit and loan.
2.11 FIN2NCI2L PERFOR)2NCE
Table 0.)" %inancial performance
;Taka in million<
)0
Prime Bank Limited
a bank with a difference
Parti$.&ar+ 200( 200' 2002
Paid.up 3apital )@@@.@@ E@@.@@ ?@@.@@
Total 3apital 0,DE?.@? ),CFG.)0 ),??F.)@
3apital surplusLdeficit D@).F9 DEE.0) FCD.@@
Total 1ssets 90,9?).?0 0D,0DC.)9 )C,9FC.C9
Total 'eposit 0G,@?C.0D 0@,DG9.09 )?,DG).?@
Total Loans and 1dvances 09,0)C.?E )?,DC0.00 )0,?G?.GF
Total 3ontingent Liabilities and
3ommitments
0@,F9).EC )?,9F).D0 )9,0?9.EG
3redit 'eposit ,atio G98 G)8 EE8
Percentage of 3lassified Loans
against Total Loans A 1dvances
).F08 ).GC8 ).DG8
Profit after ta! A provision ?)).CD 9EF.D? D)G.)D
1mount of classified loans during
current year
0D?.09 0)D.DF G?.C?
Provisions kept against classified
loan
)ED.@@ 0DC.DD )00.G)
Provision surplusLdeficit against
classified loan
F0.?? GF.CG 0F.0E
3ost of fund ?.?08 E.908 E.0E8
Interest earning 1ssets 0C,)9E.0G 0),C9?.E@ )E,)EG.)E
*on.interest earning 1ssets 9,00D.9D 0,0CF.?F 0,)G@.E?
,eturn on investment ;,4I< ?.9?8 ?.FG8 ?.FF8
,eturn on 1ssets 0.)?8 ).E08 9.G?8
Income from investment )C?.)F )?E.EE )9@.EF
+arnings per (hare ?).)C 9E.FF FC.E9
*et Income per (hare ?).)C 9E.FF ?C.?C
Price +arning ,atio )D.9E ?.CG F.)F
(ource" Prime Bank 1nnual ,eport.0@@D
'.0 FUNCTION2L TRUCTURE
'.1 GENER2L ERVICE DIVIION 4GD8
The functions of I(' are classified as +stablishment and Ieneral Banking ;IB<.
4a8 E+ta"&i+,ment
The main function of I(' is to procure and supply the tangible goods to branches of
PBL. Those are"
)9
Prime Bank Limited
a bank with a difference
Tangible functions of opening a branch, for e!ample, interior decoration, making
lease agreement
Print all security papers and bank stationeries, forms, registers and distribute
them to the branches
Purchase and distribution of bank&s furniture and fi!tures
%ind out the demand of euipment from the branches and divisions and arrange
the purchase and delivery of them to the branches concerned
Install and maintain different facilities in different branches.
4"8 Genera& Bankin-
Ieneral department performs the majority functions of a bank. It is the core department
of any bank. The activities of IB of PBL are mainly divided into the following
categories"
1ccount opening section
Local remittance section
4nline branch banking section
'eposit scheme section
3learing section
3ollection section
3ash section
1ccounts section
'.2 HE2D OFFICE 2CCOUNT
Its deals with the 7ead 4ffice transactions with banks and its different branches and
these are recorded under the following headings"
In$!me and eA;endit.re ;!+iti!nin-9 It maintains all the income and
e!penditure information
Ca+, +e$ti!n9 It handles cash e!penditure for office operations and payments.
Bi&&+ +e$ti!n9 It deals with inland bill transactions.
)D
Prime Bank Limited
a bank with a difference
a&ar0 and Ba-e+ +e$ti!n9 (alary and wages of head office e!ecutives are given
from this account.
Pr!%ident /.nd9 +mployee provident fund are maintained here.
'.' CONOLID2TION OF BR2NCH 2CCOUNT
1ll branches of PBL have to periodically send their income and e!penditure, profit and
loss accounts to head office. This division consolidates all these information and makes
statements to submit to Bangladesh Bank.
'.( CREDIT DIVIION
The main functions of this division are"
To $anage PBL&s credit portfolio
,eceive credit proposal from branches
1ppraise and approve the proposals
(anction letters and send them to branches
$onitor and follow up the loans and advances provided by the bank
(et up prices for credits and ensure their effectiveness
Prepare various statements to submit to Bangladesh Bank
'.1 INTERN2TION2L DIVIION
This division is responsible for monitoring and supervising the foreign e!change
dealings of the bank. It performs the following functions"
$aking guidelines and frameworks for foreign dealings complying the rules of
Bangladesh Bank
3irculating instructions of Bangladesh Bank
$aintaining correspondence with foreign banks and e!change houses with which
it has e!change arrangement
$aintaining *4(T,4 accounts with banks in abroad
%i!ing and sending foreign e!change rates to 1uthori6ed 'ealer ;1'< branches
and Bangladesh Bank.
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Prime Bank Limited
a bank with a difference
'.: TRE2UR*
Treasury is considered to be an important division for income generation purpose within
the head office. The treasury of PBL continues to efficiently manage bank&s cash flow. It
optimi6es the investment of the bank&s e!cess liuidity. Treasury is also e!pected to
provide uality services and products to meet the demand of the customer needs and play
a major role in raising bank&s income.
'.= CO)PUTER DIVIION
This division operates and keeps the record of all transactions, assets, liabilities of PBL
by using integrated software. Though the technology of PBL is not advanced, the
computer division tries to provide the following functions"
(upply and installation of computer as per reuirement
'esign software to support accounts operation
Train the officers and employees about the operation of different software
>pdating the software if there is any lagging in its operation.
'.6 )2R3ETING DIVIION
There are two types of marketing division. These are"
2++et )arketin-9 It refers to various kinds of loan and advances. This division
maintains communication with corporate clients gives incentive to take loan from PBL
and approaches them to borrow from PBL in profitable projects
Lia"i&it0 )arketin-9 This refers to marketing for collecting funds through buying of
depository products from large depositors. The division communicates to the persons or
organi6ation having e!cess fund of deposit, informs them about the attractive features of
the depository products and convince them to invest in PBL in various deposit scheme.
'.5 HR DIVIION
The 7uman ,esource 'ivision performs the activities related to administration and
personnel. The main functions of 7,' are"
(election and recruitment of new personnel
)?
Prime Bank Limited
a bank with a difference
1ppropriate placement of human resources
$aintain the detail about transfer, promotion and leave of personnel
Training and development of human resource
=eeping employee records and personal file
Taking disciplinary action if necessary
'.10 CREDIT C2RD DIVIION
In )CCC, PBL obtained the membership of $aster 3ard and a separate division has been
assigned to look after the credit card operation. There are four types of credit card, Local
(ilver 3redit 3ard, International (ilver 3redit 3ard, Local Iold 3redit 3ard,
International Iold 3redit 3ard.
'.11 REE2RCH 2ND DEVELOP)ENT
This division is maintained to do the research and development work to innovate new
products and services as well as to improve e!isting products and services.
'.12 CO))ITTEE 2ND GROUP DIVIION
Prime Bank Ltd. has both democratic and consultative decision making process. The
subordinates are given chance to participate in the goal and objective setting of the bank.
In this regard, there are three committees functioning in the bank. These are"
P!&i$0 C!mmittee9 In this case, the committee members are drawn from the Board of
'irectors. The committee reviews the principles, policies, rules and gives a decision
which later reuires the approval of the Board.
EAe$.ti%e C!mmittee9 This committee consists of the members of the Board. To
approve the matters beyond the delegation of the board, this committee e!ercises the
power delegated by the Board from time to time.
)ana-ement C!mmittee9 This committee consists of the $anaging 'irectors and
7ead 4ffice +!ecutives. They discuss about the progress and improvement on the
)E
Prime Bank Limited
a bank with a difference
guidelines regarding deposit, loans, gives different ideas, decision regarding various
issues.
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Prime Bank Limited
a bank with a difference
(.0 R2TIO 2N2L*I
,atio analysis is used as an analytical tool to find out the critical and the technical
information about the bank&s financial strength. This analysis is the most widely used
indicators of the uality and uantity of bank performance. >sing the financial
statements, it is possible to evaluate how well the bank is performing. By using such
analysis the management can identify the shortfall and the weakness of the bank and take
appropriate measures to rectify them.
(.1 PROFIT2BILIT* )E2URE
ROE !/ Prime Bank9
,4+ measures how much of the investments of the stockholders, has been turned
into profit. It shows the rate of return flowing to the banks shareholders. The ,4+ of the
bank was 0E.908 in 0@@D, 0).@E8 in 0@@9 A 0E.9C8 in 0@@0. The decrease in
profitability is because the euity capital had a growth but in 0@@D ,4+ increases
because of huge profit. The different component ratios are"
Net ;r!/it mar-in9
The net profit margin of Prime Bank Ltd. decreased from 9D.C?8 to 09.F?8
from 0@@0 to 0@@9 but increased in 0@@D to 9).@?8. The *P$ drops in 0@@9 because of
low net income after ta! but recovered well in 0@@D by huge net income after ta!.
2++et Uti&i@ati!n Rati!
The asset utili6ation ratio reflects the portfolio management policies, especially
the mi! and yield on the bank&s assets. The asset utili6ation ratio of Prime Bank Ltd
increased from 0@@0 to 0@@9 by F.C?8 to ?.FG8 but decreased in 0@@D to ?.@C8. Prime
Bank is utili6ing its assets in an efficient way to generate higher operating revenue but
asset utili6ation ratio decreased in 0@@D because of high total asset.
EC.it0 ).&ti;&ier
The +$ reflects what percentage of the banks asset has been funded by euity.
Too high of an +$ indicates that the bank is heavily funded by liability and hence could
be more risky. Prime Bank&s +$ has been growing very slowly over the past years
)C
Prime Bank Limited
a bank with a difference
;)9.)9 in 0@@0, )9.? in 0@@9 A )D.DF in 0@@D<. This shows that the risky ness of the
banks e!posure to failure has not increased over the past three years.
RO2 !/ Prime Bank
The ,41 is an indicator of management efficiency, it show how efficiently the
management has been able to use the assets of the bank in order to generate income. In
0@@0 ,41 was 0.)?8 but it dropped to ).FF8 in 0@@9. The ,41 of 0@@9 was not too
bad because the total asset increased. In that situation the ,41 of 0@@D was very good
and was ).GC8 though the total asset increased a lot. This indicates that the management
of the bank is not that much efficient in converting the bank&s asset into net earnings.
The component ratios of ,41 are"
Net Intere+t )ar-in
The net interest margin measures how efficient the bank&s management has been
in order to maintain a large spread between interest e!pense and interest income. The net
interest margin continuously increased over the years ;0.G)8 in 0@@0, 9.)@8 in 0@@9
and 9.0)8 in 0@@D<. The spread between the interest income and interest e!pense
increased due to a higher interest income, which resulted mainly because of a growth in
interest income from loan ;general< and loan against trust receipt.
Net N!n Intere+t )ar-in
The **I$ measures the amount of non.interest revenues stemming from
commission, service charges, and other service fees the bank has been able to collect
relative to the amount of non.interest e!pense, which includes salaries and wages, repair,
maintenance, e!pansion etc. The **I$ of Prime Bank Ltd. increased from @.C)8 to
).@98 in 0@@0 to 0@@9 and again increased to ).08 in 0@@9.
(.2 CREDIT RI3 )E2URE
N!n7Per/!rmin- 2++et t! T!ta& L!an+
*on.performing assets are income.generating assets, including loans, which are
past due for C@ days or more. If this ratio rises, the bank&s e!posure to credit risk grows
and there is a possibility of bank failure. In case of Prime Bank, the non.performing asset
to total loan ratio is around 08 ;).DG8 in 0@@0, ).CE8 in 0@@9 and 0.@)8 in 0@@D<.
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Prime Bank Limited
a bank with a difference
Though the credit risk of the bank is still within control, the ratio is rising. It gives a red
signal to the credit performance of the bank.
(.' LIDUIDIT* )E2URE
Net L!an t! T!ta& 2++et
*et loans ;total loans minus the provision for loan loss< to total assets were ?98
in 0@@0, FC.))8 in0@@9 and ?F.F98 in 0@@D. It shows the loan amount has increased
during this period, which means the bank&s total asset has increased though it is
maintaining a growth in its loan rather than keeping it in cash and balance.
Ca+, E Ba&an$e Bit, !t,er "ank+ and FI+ t! T!ta& 2++et+
Total cash and balance with other banks and financial institutions of Prime Bank
as a percentage of total assets were )E.E98 in 0@@0, )F.)@8 in 0@@9 and )D.G98 in
0@@D. This shows a decreasing trend during the period. 1lthough this weakens the bank&s
liuidity position, it also increases the bank&s earning capability.
(.( OLVENC* 4OR DEF2ULT8 RI3 )E2URE
EC.it0 Ca;ita& t! T!ta& 2++et
3apital account of a bank absorbs losses if the bank happens to have large bad
loans in the portfolio. (uch a ratio of euity capital to total asset shows how much
cushion the depositors have against the assets of a bank. %or Prime Bank, this ratio is
around E8 ;E.?)8 in 0@@0 and E.9F8 in 0@@9 and ?.C08 in 0@@D<. This small #cushion&
poses a risk of default for the bank.
EC.it0 Ca;ita& t! Ri+k 2++et
This ratio reflects how well current bank capital covers potential losses from
those assets most likely to decline in value. The ratio of euity capital to risk asset for
Prime Bank was )0.@98 in 0@@0, )@.G8 in 0@@9 and C.E?8 in 0@@D. 1s the ratio is
decreasing, the risk of potential losses from risky assets is increasing.
0)
Prime Bank Limited
a bank with a difference
(.1 TR2TEGIC 2N2L*I
(.1.1 C!r;!rate &e%e& +trate-0
To create value, a corporate strategy should enable a company, one, or more of its
business units, to perform one or more of the value creation functions at a lower cost, or
perform one or more of the value creation functions in a way that allows for
differentiation and a premium price. But the Prime Bank does not have any corporate
level strategy.
(.1.2 B.+ine++ &e%e& +trate-0
Business level strategy refers to the plan of action that strategic managers adopt
for using the company&s resources and distinctive competencies to gain a competitive
advantage over its rivals in a market or industry. Prime Bank is currently following low
cost generic business level strategy. 1ll most all competitors are following same business
level strategy. It can be categori6e as low cost strategic group.
(.1.' F.n$ti!na& &e%e& +trate-0
Prime Bank has perused its functional.level strategy for building competencies in
low cost for its services divisions.
(.1.( H.man re+!.r$e+ de;artment
The bank has institute training and development center for its employees. The
bank tried to create a sense of community among our employees by encouraging
communication with each department. It also, encourages management committee to
participate in the meeting. The training academy had undertaken various training
program, workshopsLseminars for developing skills, efficiency, knowledge and
competence to undertake business in this fairly competitive market.
(.1.1 Credit $ard +er%i$e+ de;artment
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Prime Bank Limited
a bank with a difference
It has instituted credit card service department. The success of the operation is
satisfactory. The bank completed arrangement for launching 5I(1 card during 0@@F.
This 5I(1 has help them to get at least some sort of competitive advantages.
(.1.: C.+t!mer +er%i$e+ de;artment
Its customer services department remains ahead of the competition. Jith this objective,
customer service improvement program and related activities are continuously being
developed, reviewed and implemented.
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Prime Bank Limited
a bank with a difference
1.0 >OT 2N2L*I
(J4T analysis enables an organi6ation to have a comprehensive insight about its
current position in the industry compared to its competitors. It provides the organi6ation
a scope to strategically improve its position in the market. 7ere, the internal strength and
weakness of Prime Bank Ltd. as well as the e!ternal opportunities and threats are
discussed"
1.1 TRENGTH
Ca;ita& 2deC.a$0
Prime Bank Ltd. is maintaining a strong capital base. By the end of year 0@@9, the capital
adeuacy ratio of the bank was )).C08 which was well above the stipulated reuirement
of C8. The bank had a target to have Tk. )@@@ million of capital fund by the year 0@@?,
whereas it already reached capital fund of almost Tk. 0@@@ million by 0@@9, positioning
the bank as one of the strong capital based bank of Bangladesh.
C.+t!mer er%i$e
PBL has a very good relationship with its customers. The bank believes in maintaining
personal relationship with its clients. 4ne of the major goals of the bank is to build long
term relationship with the customer and to create value for them. To maintain this
relationship, PBL sometimes waive high charges for those valued clients who are linked
with the bank for a long period of time. 1s a result of such strong customer service, the
bank currently has more than ),FD,@@@ customers, highest in the private sector
commercial banks of our country.
LiC.idit0 P!+iti!n
Liuidity position is a major criterion to measure a bank&s strength. By the end of 0@@9,
PBL had liuid assets of Tk. DFGD.DF millionK the ratio of liuid asset to total asset was
)G.C08. (o, the liuidity risk of the bank is low and it makes its position stronger.
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Prime Bank Limited
a bank with a difference
E//i$ient 2dmini+trati!n
Prime Bank Ltd. has a very efficient administration. The work is done in a timely and
systematic manner for which the efficient administration is responsible. There is a close
relationship between the employees and the management though the chain of command
is maintained strictly. 4verall, there is a good balance between the administration and the
employees.
2$$!.nta"&e C!r;!rate G!%ernan$e
Iood 3orporate Iovernance is an issue of vital importance to the Board and
$anagement of Prime Bank. The Board of 'irectors, as the ape! level of authority, is
responsible and accountable for the overall direction and is ultimately answerable to
regulatory authorities and shareholders for the activities, strategies and performance of
the company. The board now has )9 members, which also includes at least two
independent directors.
Prime Bank board has a formal schedule of matters especially reserved for its decision
including corporate strategy, approval of budgets and balance sheet, annual financial
results, 'irector 1ppointment, proposal for dividend, approval of major corporate
transactions and credit proposals beyond the delegated business power of the
management.
EA;erien$ed eni!r )ana-ement
The senior management of the bank is responsible for promoting the highest level of
business ethics and integrity. Their aim is to create and foster a culture throughout the
bank that emphasi6es and demonstrates the importance of maintaining high business
ethics and close relationship with customers.
C!m;en+ati!n Pa$ka-e
Prime Bank maintains an eual opportunity in recruitment, training and promotion of all
employees regardless of gender or ethnic origin. The bank tries to pay all its employees
the best compensation package. 1ccordingly, Prime Bank&s salary structure is revised
upward on a regular basis. The bank also keeps in employees informed about the
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Prime Bank Limited
a bank with a difference
progress of the business and their part in it for their constant commitment to the bank.
They also encourage the development of the employee involvement in the bank through
formal and informal meetings.
!$ia& >e&/are
Prime Bank has fully commitment towards serving the communities in which it operates.
The bank believes that healthy economy and sound banking go together. 1 chunk of the
bank&s annual profit is being given to the Prime Bank %oundation for social welfare. The
main objective of the foundation was to invest part of the bank&s profit in poverty
alleviation and community welfare.
The Prime Bank %oundation and the employees of the bank take part in diverse
charitable and voluntary programs. The foundation had made allocations in different
areas of poverty alleviation and primary health care programs for the low.income group.
(ubstantial fund had also been allocated for research works on various socio.economic
issues confronting the nation. 1ll these strongly reflected strong commitment of the bank
to work closely through foundation with the community with which it co.e!ists.
On&ine Bankin- er%i$e+
Prime Bank is among the few banks in Bangladesh, which provides the online banking
services to its customers. By using the modern banking services, a Prime Bank customer
can withdraw or deposit an amount of cash under the Prime Bank account no matter in
which branch the actual account e!ist. This service gives its customer huge fle!ibility.
$ore and more urban customers are becoming attracted to this service day by day.
Trainin- and De%e&!;ment
Prime Bank has a personnel.training institute with good resources. They give regular
training to the officer of both middle and lower levels. 1gain if there is any strategy or
technology change, there will be special training program arranged based on individual
needs.
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Prime Bank Limited
a bank with a difference
1.2 >E23NE
Te$,n!&!-0
4ne of the major weaknesses of Prime Bank Ltd. is the technology used by the bank.
Jith the change of time, technological advancement is essential to survive in the
competition. 7ence, PBL is lagging far behind in this area. $ost of the branches are not
well euipped. There are not enough computers, telephones or fa! machine in the
branches which often slower the pace of work. PBL was the pioneer in #4nline Banking&
but the online facility which the bank is providing currently is not up to the standard.
Rem.nerati!n
The pay scale of employees in PBL is not competitive compared to other private banks
of the country. The employees of PBL get compensation of around ?@8 of what other
private banks, for e!ample, 'haka Bank, $ercantile Bank, (outheast Bank, etc. offer to
their employees. This creates dissatisfaction among the employees which carries the risk
of rise in employee turnover rate. Those who cannot switch bank are often discouraged
to give their best effort in the job.
Pr!m!ti!n
Jhen an employee gets a promotion to the ne!t level, heLshe gets more compensation.
PBL is regular in giving promotion, but the employees get late effect of this promotion.
4ften there is a long gap, for e!ample a si! month gap in getting the effect.
Le++ em;,a+i+ !n ad%erti+in- t,r!.-, t,e e&e$tr!ni$ media
Prime Bank does not promote their brand or products on a regular basis. They seem to be
over confident over their company&s publicity. They some times see it as an e!tra
e!penditure. They also don&t do much electronic media advertising. 4n the other hand
competitors like. 'haka Bank, 'utch Bangla Bank, (tandard 3hartered Bank, :amuna
Bank and others do the opposite freuently come up with creative adds for their banks.
This is a big weakness for Prime Bank, which may prove to be very big mistake in the
future. To company should concentrate more on its promotional activities.
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Prime Bank Limited
a bank with a difference
2-en$0 Pr!"&em
The front desk employees are often found not to be too keen on taking care of their
customers. Though they have a long employee line in every branch, their loyalty to the
company and their ethics level are not very satisfactory. $ost of the employees always
think about their own interest, which proves that agency problem is there. (ome of them
create unofficial groups through which they solve each other&s problem and support each
other to achieve their personal goals, not too much concern about their personal interest.
1.' OPPORTUNIT*
2T) Fa$i&it0
3urrently Prime Bank Ltd. does not have 1T$ facility. %ew years ago the bank had an
agreement with (tandard 3hartered Bank to share their 1T$ facilities by which the
credit card holders of PBL can withdraw money as per their reuirements 0D hours a day.
PBL has a good opportunity to provide their own 1T$ facility to the customers in near
future and survive in the competition.
Bran$, EA;an+i!n
Prime Bank Ltd. is growing very uickly all over the country. Besides e!panding in the
urban areas, PBL has the prospect to open more branches in suburban areas which will
eventually enhance the government&s effort at reviving the rural economy. It will also
serve the people of those areas better.
Trainin- /a$i&it0
Prime Bank Training Institute ;PBTI< is supporting the bank by offering in house
training courses, workshop and seminars. 1s the bank has its own training institute to
enhance the capability of their human resources, PBL can use this opportunity to train
their employees in specific areas and create speciali6e and e!pert people for the bank.
Bankin- !/tBare
0G
Prime Bank Limited
a bank with a difference
Providing uality service is one of the major goals of PBL. Though PBL is still lagging
behind in upgrading their software system, the bank has the prospect to select high
uality banking software which will make the banking operation fast and smooth.
Premi.m er%i$e Bankin-
Prime Bank can improve its customer service by tailoring the individual business needs.
This service enhancement collectively will allow a customer to manage their business
finances and cash resources more efficiently and conveniently. The services like .
3ourier
1uto %a! ,eport
7otline ;2our single point of contract<
Inward remittance information services
+!press payments
%oreign +!change and $oney market information
G&!"a&i@e t,e B.+ine++
1s the bank has a strong business brand image, it holds a great opportunities to globali6e
their business more e!tensively. They can arrange more foreign correspondent banks or
by establishing more foreign branches as the foreign braches have better and big business
opportunities.
1.( THRE2T
Le%e& !/ C!m;etiti!n
3ompetition is always a major threat for any organi6ation. In recent years, the number of
private bank is increasing. These banks always pose a threat for others by coming up
with new product line, innovative technology, uality services, etc. Thus the level of
competition rises and creates threat for Prime Bank Ltd.
Te$,n!&!-i$a& 2d%an$ement
Jith time, technology is getting advanced. 7owever, Prime Bank Ltd. is lagging behind.
1s the technology is getting advanced, most of the banks, especially private banks are
upgrading their operating system to survive in the industry. PBL is still mostly dependent
0C
Prime Bank Limited
a bank with a difference
on manual work rather than technology. Jith time, the advancement of technology is
posing a threat for the bank.
C!m;en+ati!n Pa$ka-e
3ompared to other private banks of Bangladesh, the compensation package of Prime
Bank Ltd. is not attractive. Though the employees of PBL gets fair financial and other
benefits, the base pay is not sufficient. This poses a threat of switching banks as other
private banks are giving lucrative offer.
P!&iti$a& Unre+t
The political unrest as well as the law and order situation of Bangladesh is always a
threat for banking industry. +specially, the events of recent years, the corruption level of
our country, the poor infrastructure are affecting the national economy. The current
economic situation is very likely to get worse further. In this case, the whole banking
industry is facing a big threat.
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Prime Bank Limited
a bank with a difference
:.0 THE B2N3ING INDUTR* IN B2NGL2DEH
Jhoever, being an individual firm, company or corporation generally dealing in the
business of money and credit is called a bank. In our country any institution that accepts
for the purpose of lending or investment deposits of money from public, repays on
demand or transfers by checks, draft orders A other means is called a bank. The purpose
of banking is to ensure transfer of money from surplus unit to deficit units. Banks in all
countries work as the repository of money. The owners look for safety and amount of
interest for their deposits with banks. +ntrepreneurs try to obtain money from the banks
as working capital and for long.term investment. These entrepreneurs welcome effective
and forward.looking advice for investment. Banking sector thus owe a great deal to the
deposit holders on the one hand and the entrepreneurs on the other. They are e!pected to
play the role of friend, philosopher and guide for the deposit holders and the
entrepreneurs.
Banking is the backbone of national economy. 1ll sorts of economic and financial
activities revolve round the a!is of the bank. 1s industries produce goods and
commodities, the banks create and control money market and promote formation of
capital. %rom this point of view, banking.a technical profession. can be termed as
industry. (ervices to its customers are the products of banking industry besides being a
pivotal factor in promoting capital formation in the country. 1s all economic and fiscal
activities revolve round this important Industry, the role of banking can hardly be over
emphasi6ed.
3ircumstances being such, it becomes imperative to find out the role that banks are now
playing in the country and analy6e its operational aspects so as to ascertain the
importance of this delicate financial sector and it are over all impact on our national
economy. In the global conte!t, the role of banks is far reaching and more penetrating in
the economic and fiscal discipline, trade, commerce, industry, e!port and import all
carried through the banks. Banks are the only media through which international trade A
commerce emanate the entire credit transactions, both national and international.
9)
Prime Bank Limited
a bank with a difference
The number of schedule banks of Bangladesh are some where around F) and among
them there are D states owned commercial banks, F are speciali6ed banks, 9@ local
private commercial banks and )0 foreign commercial banks. 1mong the total branches
of bank there are around 9?@G branches of Iovernment owned commercial banks, )99G
private banks, 9) foreign banks and the branches of speciali6ed bank )0?F. Besides these
schedule bank there is one co.operative bank, one 1nsarM5'P development bank, )
employment bank and ) Irameen Bank.
:.1 THE B2N3ING INDUTR*? FE2TURE
It is e!tremely important for a firm to understand the dominant economic features of the
relevant industry, as the character and structure of different industries are significantly
different from each other. The basic economic traits in the banking industry are"
)arket i@e and )arket Gr!Bt, Rate
$arket si6e of an industry can be measured by many ways, such as. Total ,evenue,
volume of production, *umber of customers and so on.
N.m"er and T0;e+ !/ Bank+
The number of banks in all now stands at F) in Bangladesh. 4ut of the F) banks, four are
nationali6ed commercial banks, 9@ local private commercial banks, )0 foreign banks and
the rest five are 'evelopment %inancial Institutions. (onali Bank is the largest among the
nationali6ed commercial banks while Pubali Bank is leading in the private ones. 1mong
the )0 foreign banks, (tandard 3hartered has become the largest in the country. Besides
the scheduled banks, (amabai ;3ooperative< Bank, 1nsar.5'P Bank, =armasansthan
;+mployment< Bank and Irameen bank are functioning in the financial sector. The
Bangladesh Bank regulates and supervises the activities of all banks. It is now carrying
out a reform program to ensure uality services by the banks.
De;!+it $,eme+
C.rrent 2$$!.nt9 Ienerally this sort of account is normally opened
for business purpose. 3ustomers can withdraw money once or more against their deposit.
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Prime Bank Limited
a bank with a difference
If the amount of deposit is below Tk. ),@@@, on average the bank has authority to cut Tk.
F@ from each account as incidental charge after every si! months. 1gainst this account
loan facility can be ensured. >sually, one can open this account with Tk. F@@. 4ne can
open this sort of account through cash or checkLbill. 1ll the banks in the industry follow
almost the same rules for opening current account.
a%in-+ Bank 2$$!.nt9 >sually customers open this sort of account
at a low interest for only security purposes. This is also an initiative to create peopleHs
savings tendency. Ienerally, this account is to be opened at Tk. )@@. Interest is to be
paid after every si! months. If money is withdrawn twice a week or more than Tk.
)@,@@@ is withdrawn ;if 0F8 more compared to total deposit< then interest is not paid.
This account guarantees loan. 1lmost all the banks follow the same rules in the field of
savings account, e!cept the foreign banks for varying deposit.
;e$ia& er%i$e+
(ome banks render special services to the customers to deter them from other banks.
These services include.
Internet Bankin-9 (ome banks in Bangladesh are offering internet
banking services. But still toady this service is limited in scope in Bangladesh, as the
internet service provided by the banks in this country is nowhere near the internet
banking service provided by banks in the developed countries.
H!me Bankin-9 7ome banking frees customers of visiting branches
and most transactions will be automated to enable them to check their account activities
transfer fund and to open LL3 sitting in their own desk with the help of a P3 and a
telephone. 1pplication of this service is still limited in this country.
2.t!mated Te&&er )a$,ine 42T)89 1utomated Teller $achine
;1T$<, a new concept in modern banking, has already been introduced to facilitate
subscribers with 0D.hour cash access through a plastic card. The network of 1T$
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Prime Bank Limited
a bank with a difference
installations has been e!tended to a great e!tent to enable customers to non.branch
banking beyond banking. But still there is room for improvements.
E&e$tr!ni$ Bankin- er%i$e+ /!r >ind!B+ 4EB>89
+lectronic Banking (ervice for Jindows ;+B(J< provides a full range of reporting
capabilities and a comprehensive range of transaction initiation options. The customers
using it are able to process all payments as well as initiate LL3s and amendments through
+B(J. They will be able to view the balances of all accounts, whether with Prime Bank,
(tandard 3hartered or with any other banks using (JI%T. 1dditionally, transactions
may be approved by remote authori6ation even if the approver is out of station.
>IFT9 (JI%T is a bank owned non.profit co.operative based in
Belgium, which serves the financial community worldwide. It ensures secure messaging
with a global reach of ?,DCF banks and financial institutions in )EG countries, 0D hours a
day. (JI%T global network carries an average D million message daily and estimated
average value of payment messages is >(' 0 trillion. By having (JI%T facility, banks
are now able to serve its customers more profitable by providing LL3, Payment and other
messages efficiently and with utmost security. +specially it is of great help for clients
dealing with Imports, +!ports and ,emittances etc.
Te&e Bankin-9 Tele banking facility allows customers to get access
into their respective banking information 0D hours a day. (ubscribers can update
themselves by making a phone call. They can transfer any amount of deposit to other
accounts irrespective of location either from home or office.
EAtent !/ Pr!d.$t Di//erentiati!n in t,e Ind.+tr0
$ost of the banks in Bangladesh offer very much similar financial products with little
differentiation. 4nly Islami Banks& products are different from conventional bank&s
products. But an observable trend is that a lot of the local private commercial banks and
ever multi.national banks like.7(B3 have started offering (hariar ;Islamic< banking
products to some e!tent.
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Prime Bank Limited
a bank with a difference
E$!n!mie+ !/ +$a&e
It is present because all banks do not have similar cost of funds, as differences e!ist as
different banks deposits cost are different and amount of classified advances are
different. Those who have less classified advances have advantages in the cost of funds.
Ind.+tr0 Pr!/ita"i&it0
Industry profitably is largely dependent on the state of the national economy and
individual bank&s ability to make good advance. 7owever, profitability for the banks in
the industry is above par.
:.2 THE DRIVER OF CH2NGE IN THE B2N3ING INDUTR*
C,an-e+ in t,e &!n-7term ind.+tr0 -r!Bt, rate
Industry&s growth is moving upward and an upsurge in long.term demand attracts new
entrants to the market and encourages competition. There have been changes in who
buys the product and how they use it. 3ustomers are using the same banking services in a
new way, for e!ample. now they can do their banking transaction without moving to
bank and using new digital products like 1T$, access card, credit card etc and this shift
is forcing banks to adjust their customer service offerings, opening new ways to market
their product.
Pr!d.$t inn!%ati!n
Product innovation in this industry is shaking up the structure of the competition and as
well as the industry by broadening its customer base, rejuvenating the industry&s growth
and widening the degree of product differentiation among competing banks. (uccessful
new product introduction will strengthen the market position of the innovative banks. It
is playing the role of a major driving force.
Te$,n!&!-i$a& $,an-e
The pace of technological development in electronic commerce ;e.commerce< via the
Internet is fast changing the way business is conducted in the banking industry. 'igital
banking products like 1T$, access card, credit card have entered into the market and
brought a dramatic change in industry&s landscape. 1 technological development is also
9F
Prime Bank Limited
a bank with a difference
producing significant changes in capital reuirement and e!tra customer facilities and
services to maintain e!isting customers and attract new customers.
)arketin- inn!%ati!n
In today&s banking industry, one of the key driving force is $arketing innovation. Jhen
banks are successful in introducing new ways to market their products and services they
can get the buyers as well as sellers interest, widen the industry demand, increase
product differentiation and lower their unit costs.
Entr0 E eAit !/ ma#!r /irm+
+ntry A e!it of major firms will definitely bring some changes in the industry and it will
shake up the competitive condition. +ntry of a new bank often produces new rules for
competition. But in the banking industry the entry barriers are really high. 'ue to high
regulations imposed by the Iovernment to enter this industry the threat of new entrants
is not that much in comparison to other industries. 1lso the e!it barriers are also very
high and its really very hard for banks to leave the industry.
C,an-e+ in $!+t and e//i$ien$0
'ifferences in the cost and efficiency among key competitors alter the position of the
banks. 3onsumers have become very price sensitive and low price of products and
services attracts more customers.
C,an-e+ in Re-.&at!r0 and G!%ernment ;!&i$0
The regulatory and government actions make significant changes in the industry
practices and strategic practices. Bangladesh Bank, which is the central bank and the
$inistry of %inance, has the authority to take policies that will protect the interest of the
public as well as banks. 1nd, whatever decisions they take all the banks are obliged to
follow that.
9?
Prime Bank Limited
a bank with a difference
C,an-in- +!$ieta& $!n$ern+F attit.de+ and &i/e +t0&e+
(ociety is changing rapidly with the change in people&s life style and concerns. The
number of women workforce is increasing day by day. 1s a result people are money rich
but time poor. 3onsumers of the banks are asking for more and convenient facilities and
services. Banks those are providing 1T$, credit card and convenient location are getting
more popularity and achieving more market share, this is specifically true for 'haka.
:.' THE INDUTR* LIFE C*CLE
+ach different strategic group is in the different stage of industry life cycle. But as we are
focusing only on Prime Bank in our report we will only talk about Prime Bank&s strategic
group, which is the second.generation bank group.
1ccording to our te!t book the industry life cycle model consists of.
1n embryonic industry environment
1 growth industry environment
1 shakeout environment
1 mature environment
1 declining industry environment
:.( PRI)E B2N3 IN THE H23EOUT T2GE
Prime Bank like the rest of the banks in the second.generation group has already passed
the embryonic stage, because most of the banks in this group started business in the
middle )CC@s. 1fter that, Prime Bank create demand as public was e!posed to the
modern banking services and they e!perienced a rapid growth in the growth stage by late
)CC@s. >ntil now, generally the rate of growth has slowed down more or less. 1s Prime
Bank enters the shakeout stage it is e!periencing intensive rivalry. %or e!ample, the
advertisements of the banks are very much similar. The advertisements read. Prime Bank
as a Nbank with a differenceO, (outheast bank is characteri6ed as a Nbank with a visionO
and so on.
9E
Prime Bank Limited
a bank with a difference
9G