CHAPTER ONE

 Introduction

 Banks are the most important functionary of financial system of a country. They play a dynamic role in the allocation of credit to the productive sectors. They divert and employ the funds in such avenues which are aimed to develop a country’s economy and add to national wealth. Banks transfer the funds from resigns where it is available in plenty to where it can be efficiently utilized. Banks offer necessary finance to set up and run the industries and provide finance to agriculture and other sectors which can create opportunities for the development of national resources and provide employment on a large scale. Inefficiencies in the financial market and institutions inhibit the formal financial sector from performing the proper intermediation services, which have adverse effects on the economic development of Bangladesh. Bank in general performs three basic functions valued by the overall economy.

• One of these functions is the centralization of credit evaluation and monitoring, which produces information that cannot be easily made public by the borrower. This centralization exploits cost economies and, together with diversified loan portfolio, lowers the price of credit.
• Second, Banks offer transformation services that convert claims issued by borrowers into instruments that in investors are willing to hold. These claims may be transformed with respect to their maturity, liquidity and credit risk. This special role of banks derives from the social welfare enhancements that can be realized when banks co-ordinate the funding of these illiquid assets with liquid liabilities.
• Third, banks provide access to payments system and to a clearinghouse for transactions. Public policies to attain safe and sound banking have traditionally been focused on methods to assure the continuous and efficient functioning of their transactions and payments mechanism.

 For efficient operation in the banking sector skilled and talented personnel are also needed. On this point of view, this report is prepared to gather adequate knowledge about the operating procedure of the commercial banks of Bangladesh. In this regard the experiences and knowledge gathered during the period of practical orientation and working as an internee in the National Bank Ltd. Pagla Bazar Branch was manipulated.

Background of the study:

 Banking sector in Bangladesh has been flourished during last few decades. It results due to the adoption of privatization policy. Until, Government sector owned, controlled and operated financial sector of Bangladesh with the objective of allocating funds to priority sectors. Loan recovery was not emphasized because the loans were ultimately collectible.

 the quality of financial intermediation, judged by loan recovery rates, was dismal. But it is a matter of fact that the financial system was not efficient and failed to attain its objective. Then government decides to reform the financial sector and commercial banks now a day have proved themselves as the life blood of modern economy in Bangladesh. No business, trade, exports, imports. Production, all other economic activities can run without the aid of banking. So understanding the above circumstances, I being a business undergraduate student, become interested in the banking sector. Since internship program is the integral part of the MBA program, completed my internship program in one of the commercial bank named National Bank Limited. I was placed in the NBL, Pagla Bazar Branch and conducted practical training of banking activities for three months from 26, December 2006 to 27, March 2007. It was the requirement of MBA program to perform a study about the internship. This report is the outcome of the study.

Objective of the Report

 The objective of the internship program is to familiarize myself with the real market situation, to compare them with the business’ theories & at the last stage make a report on the task. The main objective of this report is to review the General Banking Activities of National Bank Ltd. I tried my best to know how the Bank is providing facilities to its clients & to suggest remedial measure for the development of overall banking activities if required. In addition, the study seeks to achieve the following objectives:

 ♣         To review the present position of National Bank Ltd.

♣         To find out some problems which are faced by National Bank Ltd in customer recovery.

♣         To determine the qualitative change of customer recovery position.

♣         To determine the sectors that is responsible for increasing the better service.

♣         To familiarize with practical Job Environment.

♣         To have an exposure on the financial institution, especially on banking environment of Bangladesh.

♣         To relate the theories of banking with the practical banking activities.

♣         To present an overview of National Bank Ltd.

♣         To appraise the Trade Service performance of National Bank Ltd.

♣         To identify the problems facing by National Bank Ltd.

♣         To suggest remedial measure for the development of National Bank Ltd.

Methodology of the Study

Study Design

 The report was fully investigative in nature. Data have been collected from two sources:

1. Primary sources.

2. Secondary sources.

Data Collection

 This study is mainly based on secondary data available from the various divisions and departments of National Bank Ltd, in addition to these other necessary information have been collected from the daily news papers, relevant journals, annual reports of National Bank Ltd, Bangladesh bank, Ministry of Finance and Planning and publications of other relevant institutions have also been taken into consideration.

 Primary sources of data:

 ♣ Face to face conversation with the bank officers & staffs

♣ Direct conversation with client.

♣ Different manuals of National Bank Limited

♣ Different circulars of National Bank Limited

 Secondary sources of data:

♣         Annual report of National Bank Ltd, 2005

♣         Different papers of National Bank Limited

♣         Unpublished data

♣         Different textbooks

 Scope of the Study:

 This report has been prepared through extensive discussion with bank employees and with the clients. While preparing this report, I had a great opportunity to have in depth knowledge of all the banking activities practiced by the National Bank limited.

 1.6 Limitations of the Study:

 The present study was not out of limitations. But as an intern it was a great opportunity for me to know the banking activities of Bangladesh especially National Bank Ltd. Some restraints are disclosed bellow:

 ♣         The main constraint of the study is insufficiency of information, which was required for the study. There are various information the bank employee can’t provide due to security and other corporate obligations.

♣       Due to time limitations many of the aspects could not be discussed in the present report.

♣         Every organization has their own secrecy that is not revealed to others. While collecting data through interviewing the employees, they did not disclose much information for the sake of the confidentiality of the organization.

 ♣         Since the bank personals were very busy, they could provide me very little time.

 ♣         Another significant problem faced during the preparation of this report was the contradictory explanation of a single subject by different employee.

 ♣         The clients were very busy to provide me much time for interview.

 ♣         I carried out such a study for the first time, so in experience is one of the main constraints of the study.

CHAPTER TWO

ORGANIZATIONAL BACKGROUND

 Background/History of NBL

 National Bank Limited has its prosperous past, glorious present, prospective future and under processing projects and activities. Established as the first private sector Bank fully owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain. The member of the board of directors is creative businessman and leading industrialist of the country. To keep pace with time and in harmony with national and international economic activities and for rendering all modern services, NBL, as a financial institution automated all its branches with computer network in accordance with the competitive commercial demand of time. Moreover, considering its forth-coming future the infrastructure of the Bank has been rearranging. The expectation of all class businessman, entrepreneurs and general public is much more to NBL. Keeping the target in mind NBL has taken preparation to open new branches by the year 2007.

 The emergence of National Bank Ltd. in the private sector is an important event in the Banking arena of Bangladesh. When the nation was in the grip of severe recession, Govt. took the farsighted decision to allow in the private sector to revive the economy of the country. Several dynamic entrepreneurs came forward for establishing a bank with a motto to revitalize the economy of the country.

 National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the private sector. From the very inception it is the firm determination of National Bank Limited to play a vital role in the national economy. We are determined to bring back the long forgotten taste of banking services and flavors. We want to serve each one promptly and with a sense of dedication and dignity.

 The then President of the People’s Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started commercial operation on March 23, 1983. The 2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong.

 At present, NBL has been carrying on business through its 101 branches spread all over the country. Besides, the Bank has drawing arrangement with 415 correspondents in 75 countries of the world as well as with 32 overseas Exchange Companies. NBL was the first domestic bank to establish agency arrangement with the world famous Western Union in order to facilitate quick and safe remittance of the valuable foreign exchanges earned by the expatriate Bangladeshi nationals. NBL was also the first among domestic banks to introduce international Master Card in Bangladesh. In the meantime, NBL has also introduced the Visa Card and Power Card. The Bank has in its use the latest

 information technology services of SWIFT and REUTERS. NBL has been continuing its small credit programme for disbursement of collateral free agricultural loans among the poor farmers of Barindra area in Rajshahi district for improving their lot. Alongside banking activities, NBL is actively involved in sports and games as well as in various Socio-Cultural activities. Upto September 2006, the total number of workforce of NBL stood at 2239, which include 1689 officers and executives and 550 staff.

 Since the very beginning, the Bank exerted much emphasis on overseas operation and handled a sizeable quantum of homebound foreign remittance. The Bank established extensive drawing arrangement network with Banks and Exchange Companies located in important countries of the world. Expatriates Bangladeshi wage earners residing in those countries can now easily remit their hard-earned money to the country with confidence, safety and speed.

 The year 2006 marked the addition of yet another golden stair in the chronicle of NBL’s success story. Compared to 2005, Foreign exchange business of the Bank increased by 34.40% to Tk. 5186 crore, of which export, import and remittance business increased by 34.16%, 31.27% and 56.50% respectively. Total assets of the Bank stood at Tk. 4483 crore on 30.09.2006.

 Our Bank invested 25% equity in Gulf Overseas Exchange Company LLC, a joint venture Exchange Company in Oman, operating since November, 1985 under the management of our Bank. The Bank received Riyal Omani 11875 equivalent to Tk.2.10 million as dividend for the year 2006.

 Now NBL is on line to establish trade and communication with the Prime International banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency “Western Union”. It has a full time arrangement for speedy transfer of money all over the world.

 Banking is not only a profit-oriented commercial institution but it has a public base and social commitment. Admitting this true NBL is going on with its diversified banking activities. NBL introduced National Bank Monthly Savings Scheme (NMS), Special Deposit Scheme, Consumer’s Credit Scheme and NBL Housing Loan, NBL Small Business Loan, Small House Loan Scheme, Festival Small Business loan etc. to combine the people of lower and middle-income group.

Inspired by its social obligation and commitment and responsibility, NBL has been running a School and College upto Class XII solely on its own guardianship. From the very inception, this institution has been maintaining a good track record of results at the SSC and HSC Examinations. Conducted by an well-educated and trained team of teachers, reputation of this institution has been increasing day-by-day as a result of their relentless and sincere endeavor.

 Transparency and accountability of a financial institution is reflected in its Annual Report containing its Balance Sheet and Profit & Loss Account. In recognition of this, NBL was awarded Crest in 1999 and 2000, and Certificate of Appreciation in 2001 by the Institute of Chartered Accountants of Bangladesh.

 A team of highly qualified and experienced professionals headed by the Managing Director of the Bank who has vast banking experience operates bank and at the top there is an efficient Board of Directors for making policies.

 Registered Office:

18, Dilkusha, commercial Area

Dhaka-1000, Bangladesh.

GPO Box No. 3424, Dhaka

Cable: Nation Bank Dhaka

Tel: PABX:     9563081-5,

7168729-31

Fax : 880-2-9563953, 956940, 95543, 9554314

E-mail: [email protected].

Website: www. nldbd.com.

SWIFT: NBLBBDDH.

 Nearly 50 Branches of National Bank in Bangladesh

Objectives of NBL

•  Bringing modern banking facilities to the doorstep of general public through diversification of banking services, thereby arousing saving propensity among the people.
• Forging a cordial deep-rooted and firm banker-customer relationship by dispensing prompt and improved clientele services.
• Taking part in the development of the national economy through productive deployment of the Bank’s resources as well as patronizing different social activities.
• Connecting clients to modern banking practices by the best application of improved information technology, so that they get encouraged to continue and feel proud of banking with NBL.
• Ensuring highest use of the professional workforce through enhancement of their aptitude and competence.
• Responding to the need of the time by participating in syndicated large loan financing with like-minded banks of the country, thereby expanding the area of investment of the Bank.
• Elevating the image of the Bank at home and abroad by sustained expansion of its activities.

Business Goal of NBL

To patronize, sponsor and encourage games & sports, entertainment and other socio-economic activities, alongside providing the best services to the clients.

Vision:

NBL’s core visions are given below:-

• Establishing top grade efficient bank through best application of modern information technology in business activities.
• Offering high standard clientele services and proper co-ordinate of foreign trade business.

Mission:

NBL’s Corporate Missions are-

• To provide excellent quality customer service
• To provide high quality financial services in export & import trade.
• To maintain corporate & business ethics.
• To become a trusted repository of customer’s money and their financial advisor.
• To make stock superior & rewarding to the customer’s/share holders.
• To have a sound capital base.
• Create wealth for the shareholders.

Philosophy:

• Local Bank Global Network.
• Together Toward Tomorrow
• Together Toward Tomorrow

Commitments:

In Serving Customers
Customer-first
Quality-focus
Credibility & secrecy
In Serving the Bank
Loyalty
Total commitment & dedication
Excellence through teamwork
In Carrying Ourselves at Work
Discipline
Honesty & Integrity
Sincerity
Caring
Creativity

Services & facilities of NBL

National Bank provide various services to its customer/clients. Some of those services are discussed in below:
1.         SWIFT:
It is the abbreviation of the society for Worldwide Inter bank Financial Telecommunication. SWIFT is a bank owned non-profit co-operative based in Belgium servicing the financial community worldwide. SWIFT global network carries an average 4 million message daily and estimated average value of payment messages is USD 2 trillion.
SWIIFT is a highly secured messaging network enables Banks to send and receive Fund Transfer, L/C related and other free format messages to and from any banks active in the network. Thing SWIFT facility, Bank will be able to serve its customers more profitable by proving L/C, payment & other messages efficiently and with up most security. Especially it will be of great help for our clients dealing with Imports, Exports & Remittances etc.
National Bank limited began to make full use of the services of SWIFT right from 2002. In 2003 the software of SWIFT has been shifted from SWIFT. Alliance Entry to SWIFT Alliance Access and 5 major AD Branches of NBL have been directly connected with the SWIFT network. Up to the end of 2003. NBL have executed bilateral key exchange (BKE) with 233 banks across the world which is increasing continuously.
2.       Credit Card Programme of NBL:
In this age of modern technology, millions of people across the world have been using credit card every moment as a medium of exchange and increasingly becoming more & more confident in using credit card. Master card & Visa card are the two most popular and globally used brands of Credit card. NBL has set an enviable precedence by being the first among domestic banks and financial institutions to issue internationally usable master card from `1997.
It may be mentioned that National Bank Ltd. have issued credit card from 1st July 2003. NBL use two types of credit card.
Such as-
–           Visa Card
–           Master Card
For creating credit card in NBL people needs three things. Suppose.
–           They have to provide security
–           tin Number
–           Passport/ Identity certificate from Union Parisad Chairman.
Visa Card & Master card may be Golden or silver. It is mainly depend on amount of dollar ($). Suppose if anyone want to create. Golden visa/Master card then he/she has to pay more than $ 2000 & for silver card has to pay less than $ 2000. By Using Master card or Visa Card, one can be purchased all necessary goods & services from their selected out lets.
3.         E-BSW/ATM Service of NBL:
EBSW for electronic Banking service for windows which provides a full range of reporting capabilities and a comprehensive range of transaction initiation options.
ATM for Automated Teller machine (ATM), a new concept in modern banking. It has already been introduced to facilitate subscribes 24 hours cash access through a plastic card.
In the dynamic process of modern banking, NBL has elevated its services to the highest standard by bringing E-Banking and ATM services at the doorstep of clients. Today, the entire banking system has been undergoing a revolutionary change in providing improved services to the clients.
One of the important media in this process of client service improvement is ATM. Use of ATM has made the life style of clients much more easier and comfortable. The notable characteristics of ATM are-
1.         Payments facility for 24 hours a day
2.         Arrangement for payment of Bills.
3.         Instant inquiry
4.         Multiple location facility at Dhaka, Chittagong & Sylhet.
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