â€œOverall Activities of Bangladesh Development Bank Limitedâ€?
Chapter â€“ 1 Introduction
Objective of the study Methodology of the study Definitions of Term used in the Study Limitations of the study Introduction As a development bank, BDBL primarily remains committed to committed to provide industrial financing. It is also to embark on commercial banking activities including foreign exchange and international trade financing. The bank will continue to strengthen its growth and brand image by expanding new business activities, particularly in the area of Trade FINANCE, Import and Export Business, Foreign Remittance, retail banking, SME and agro-based industries mainly. For major manufacturing, infrastructural and utility project, the bank will prefer syndicated financing. Finally the bank will remain committed to reduce non-performing loans and improve recovery from written-off loans. In order to support sustainable long-term growth and profitability and for the benefit of all stakeholders, the bank will continue to adhere to good corporate governance practices, sound risk management polices and prudent credit policies and practices. The bank confidently looks forward to greater success in delivering superior shareholders values in 2011. The bank wants to build a profitable and socially responsible financial institution. It carefully listen to the market and business potentials, It is assisting stakeholders to build a progressive, healthy, democratic and poverty free Bangladesh. It helps make communities and economy of the country stronger and to help people achieve their financial goals.
1.1 Objectives of the Study The objectives of the proposed study are to find the reasons for loan default practices of BDBL. The following are the objectives of the study: •
To develop a theoretical understanding of overall activities of BDBL.
To learn about actual practices in Human Resource Management in BDBL.
To learn the overall function of Bangladesh Development Bank Ltd (BDBL) for the contribution of industrialization of the country
To know about the consequences of HR practices of BDBL.
To develop knowledge about the systems approach to human resources management.
To get an idea about the systems approach to employee selection.
To acquire knowledge about the process of matching employee qualification with position requirements.
To know about orientation and socialization process for new employees.
To analyze special motivational techniques with particular emphasis on the quality of working life and job enrichment.
The weakness of the Human Resources of BDBL.
To recommend necessary steps for overcoming such problems of BDBL.
1.2Methodology of the Study: In this study the descriptive type of research has undertaken to gain insights and understanding about overall operation of Bangladesh Development Bank Ltd. (BDBL) and the loan recovery operation.
Source of Information: Sources of Primary Data:
Face to face interview.
Officials’ records & documents of Bangladesh Development Bank Ltd. (BDBL).
Communication with other respective personnel of Bangladesh Development Bank Ltd. (BDBL).
Secondary Sources: The sources of Secondary data are:
Annual report & appraisal manual of BDBL
Journals and relevant Books
Website of BDBL
1.3 Definitions of Term used in the Study
Sources of Data
Practical desk work Oral interview of the respective officers and staffs of (BDBL) Direct observations of the functions of various departments of (BDBL) Relevant document’s studies as provided by the officers concerned
Annual report of the BDBL Annual budget of the BDBL Various documents of the BDBL Shilpa Bank’s Website : www.shilpa bank.com
Human Resource Management Human resource management “as the field of management in involves planning, organizing, directing and controlling the functions of procuring, devoting maintaining and motivating a labor force”. Human Resource Management is a part of the organization that is concerned with the "people" dimension. HRM can be viewed in one of two ways. First, HRM is a staff, or support, function in the organization. Second, HRM is a function of every manager's job.
Promotion Promotion is a continuous process by which the employee motivates for better work; get the price for employeeâ€™s better work. In BDBL promotion for staff/officer follow service rule along with following report are enclosed for promotions: Termination The competent authority may terminate the services of a confirmed employee or call upon him/her to resign without assigning any reason, by giving him/her one month notice in writing or on payment of one month substantive pay in lieu of such notice and the employee shall not be entitled to any form of compensation for termination of service. If terminate before 10 years an employee only achieved provident fund benefit no other benefit he/she will achieved HR and Staffing Planning is one of the major functions of HR department. HR focuses on the basic issues relating to hiring potential candidates for the organization. At first, HR determines the need for the organization of hiring potential employees. HR and Training & Development HR is concerned with the T & D facilities of the personnel. HR department takes all necessary steps to develop the skills and knowledge of the employees so that they can perform their tasks effectively and efficiently. HR and Motivation HR performs the task of job analysis, job description, job design, job rotation, wages and salaries, performance appraisal, rewards, benefits, and compensation facilities of the employees. HR and Maintenance HRM is directly linked with all the facilities needed to the employees such as -safety & health facilities, making contacts with labor relations, develop good relationships with employees. Loan Loan may be demand loan or a term loan. Advance made in a lump sum repayment either on fixed installment basis or in lump sum on subsequent debit except by way of interest, incidental charge, etc. is called a loan. After creation of loan there will be only repayment by borrower. The loan may be repaid in installment or at expire of a certain period.
Overdraft Overdraft is that advance which is allowed on current account operated upon by cheque. The customer may be sanctioned a certain limit within which he can overdraw his current A/C within a certain period Pledge Pledge is the bailment of goods as security for payment of a debt or performance of a promise. Bailment is the delivery of goods by one person to another for some purpose under a contract. 1.4 Limitations of the Study This internship report was not easy to prepare. It has taken long time to get all the information properly, the students of Department of AIS, just have completed our formal education stage. After completing the institutional experience, Practical performance in the formal stages become difficult. So in performing this report our lack of proper knowledge greatly influenced in this performance. Besides above, have to face some other limitations are: •
Lack of availability of data
Improper combination among various departments
Time is a limitation that would mostly with stands a comprehensive study on the topic selected.
Up-to-date information were not available
Don't give the data from their source document
Unwilling to give information more because of extra harassment without their responsibility
Being busy, also another reason of not giving more information
They are in government employee so have no eagerness to supply more because of extra hardness
Chapter â€“ 2 Overview of Bangladesh Development Bank Ltd.
Background Corporate Information Organization Structure Number of Branches Number of Employees Vision Statement Mission statement Product/ Service Scheme Principle Activities SWOT Analysis of the Identification of strengths, weakness, opportunities and threats of the organization Draw Conclusion Action Plan An Overview of the Organization 2.1 Background Bangladesh Development Bank Ltd (BDBL), which was shaped up by a merger between Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha, will start its full-fledged operations across the country from January 3, 2010. For long, both the Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha had been facing crisis in their respective operations as a huge amount of loans disbursed by them remained unrealized. Before the start of the banking operations, a vendor agreement will be signed between the government and the BDBL as a legal compliance, established as a public limited company, took over the undertaking and the business of statutory bodies namely Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangstha (BSRS) with all their assets, benefits, rights, powers, authorities, privileges, liabilities, personnel, borrowers and other obligation to carry on with the same business. Additionally, it got the mandate to engage in commercial banking. The authorized capital of the new bank is Tk. 1,000 corer, while its paid-up capital is Tk 400 corer. As a new commercial bank in regards to liability management, the bank will remain focused on raising its core customer deposits by improving its deposit product-mix. In order to enhance its delivery standards, the bank will pursue greater cost efficiency and staff productivity by promoting proactive business practices.
In line with the Government’s and Bangladesh Bank’s policy guideline, BDBL promoting a dynamic SME sector as a priority basis for this regards an SME cell in each branch to advise and assist interested entrepreneurs for setting up Small and Medium Enterprises and also a dedicated desk in each branch for encouraging women entrepreneur for setting up industries. Bangladesh Development Bank Limited, a development financial institution, provides financial and technical assistance to private and public sector industries, and partnership and proprietorship concerns. It offers long and medium term loans; working capital loans to industrial units; equity support services; and commercial banking services, such as deposit mobilization, foreign business, letter of credit handling, and foreign remittances, as well as issues guarantees on behalf of borrowers for repayment of loans. The company also provides industrial credit programmers’, equity entrepreneurship fund programmers, share trading services, incentive programmers for loan recovery, rehabilitation programmers’, and deposit mobilization programmers for lending and investment. 2.2 Corporate Information Name
commercial Bank (formed through merger of Bangladesh Shilpa Bank & Bangladesh Shilpa Rin Sangstha) Legal Status
: Public Limited Company
Date of incorporation
: November 16, 2009
Banking License obtained
: November 19, 2009 issued by Bangladesh Bank
Vendors’ Agreement Signed
: December 31, 2009 between the Government and Board of Directors of BDBL nominated by the Government.
: January 03, 2010
: BDBL Bhaban, 8, Rajuk Avenue, Dhaka-1000
: Tk.10000 million
Paid Up Capital
: Tk. 4000 million
Reserve (As on 01.01.2010)
: Tk. 2270 million
Total Assets (As on 01.01.2010)
Tk. 16747 million
Total Human Resource
Number of Zonal Office
Number of Branch Office
: Dhaka Stock Exchange & Chittagong Stock Exchange Ltd.
: www.bdbl.com.bd BANGLADESH DEVELOPMENT BANK LTD: AT A GLANCE: (In corer Taka)
Former BSB & BDBL’S
BSRS Position As
Position As on
01 02 03 04 05 06 07
Deposit Loans & Advances DSL Paid DSL Income Expenditure Profit Before Tax
December,2009 143.00 1027.00 58.28 316.22 121.00 67.00 53.55
08 09 10 11
Provision Loan Sanctioned Loan Disbursed Loan Recovered Recovered from Written –
109.84 91.21 106.58 20.65
77.32 77.07 170.52 24.64
(30) (16) 60 19
12 13 14 15
Off Loan Balance of Written-off Loan Balance of Classified Loan Rate of classified Loan Shareholder’s Equity
2437.96 293.20 34.25% 643.86
2387.23 310.17 38.50% *1563.72
(2) 6 6 142.87
325.40 990.60 57.77 261.06 183.77 101.29 82.48
127 (4) (.87) (17) 52 51 54
CAPITAL ADEQUACY OF THE BANK Year
Maintained 2009(BSB& BSRS) 2010(BDBL) As per Basel2.3 Organization Structure
2.4 Number of Branches On January 3,
the bank started with
departments in head office. Now in head office number of departments is 27 and number of branches is 19. Bangladesh Development Bank Limited has decided to open 8 new branches in
commercially important places of the country for reaching the banking services at the doorstep of the people within 2012 for this purpose bank already submitted necessary documents to Bangladesh Bank for permission. Current year bank open two new branches one in Narayanganj and other in Khatunganj. 2.5 Number of Employees Bank approved manpower is 1025 which is given in a chart:
Summary of Manpower Name of post
office Managing Director
Deputy Managing Director
Deputy General Manager
Assistant General Manager
Senior Principal Officer
2(Cash) Supporting Staff Grade -1
Supporting Staff Grade-2
Principal Officer Senior Officer Senior Officer (IT) Officer Officer (Cash) Assistant Officer Grade-1 Assistant Officer Grade-2 Assistant
Supporting Sub Staff Total:
2.6 Vision Statement To emerge as the country’s prime Financial Institution for supporting private sector industrial and other projects of great significance to the country’s economic development. Also be active participant in commercial banking by introducing new lines of product and providing excellent services to the customers. 2.7 Mission statement •
To be competitive with other Banks and Financial Institutions in rendering services.
To contribute to the country’s socio-economic development by identifying new and profitable areas for investment.
To mobilize deposit for productive investment.
To expand branch network in commercially and geographically important places.
To employ quality human resources and enhance their capability through motivation and right –type of training at home and abroad.
To delegate maximum authority ensuring proper accountability.
To maintain continuous improvement and up-gradation in business policies and procedures.
To adopt and adapt to new technology.
To maximize profit by strong, efficient and prudent financial performance, and
To introduce new product lines according to market needs.
2.8 Product/ Service Scheme The bank is always committed to serve the clients with the best values and innovative products and services to enrich its portfolio looking at the client’s demands and desires. 1. Development Banking •
Industrial Loan with emphasis on syndicated arrangement (power & energy, telecommunication, fiber optic cable, etc)
communication like road, water & air ways etc) •
Small and Medium Enterprise (SME like IT industries i.e. development of hardware & software)
Agro-based venture depending on indigenous raw materials ( like jute twin/yarn industries)
Green banking ( environment & eco – friendly industries like automatic brick kiln, renewable energy, effluent treatment plant, etc)
Real estate business ( including housing loan)
2. Commercial & Foreign Exchange Business Deposit Banking: •
Short term deposit
Deposit pensions Scheme
Other special saving deposit
School banking (New) (a) 5-Year term BDBL Sanchay Scheme (BDBLSS) (b) 10-Year term Shikkha Sanchay Scheme (SSS) (c) 10-Year term Chikisha Sanchay Scheme (CSS)
Short Terms Loans •
Cash credit (pledge)
Retail banking a) Consumer’s credit b) Personal loan
Trade/Foreign trade financing a. Export cash credit b. Packing credit c. Purchase of local & foreign documentary bill d. Payment against documents (PAD) e. Loan against imported merchandise (LIM) f.
Loan against trust receipt (LTR)
Foreign Exchange •
Back to Back L/C
Foreign exchange buy & sale
Other Banking Service •
Demand draft issue
Payment order issue
Selling of prize bond
Selling of saving certificate.
3. Capital market operations •
Share/ Securities trading
Underwriting of public issue
Brokerage house services
Mutual fund operation
Banker’s to public issues
2.9 Principle Activities The functions of BDBL HRMD are discussed elaborately in the following sections. Leave and Medical section Medical Allowances may be paid in accordance with the job grades and on such conditions that may be prescribed by the Competent Authority from time to time. The policies followed for employee leaves management based on the types of leaves. All are discussed below: Leave section As per service rules an employee can consume every government holiday. Leave facilities provided by BDBL are: Welfare section The motive behind for establishing welfare section is to support an employee / officer after retirement or medical support during the job period. One employee must invest 10% of his/her basic salary into welfare fund as name of provident fund. It will calculate: General Administrative & policy section We know that the word ‘Administration’ means controlling people. In BDBL, HR Administration is much more than just controlling. It includes motivating the workforce, encouraging them to be more productive and innovative, leading or selecting or providing an appropriate leader for a leaderless team. Some smaller and simpler day-to-day functions are carried out by the Administration as well. Administration also has to undertake some harsh duties which are Show Cause letter issue, Warning letter issue, issuing letter of Termination, issuing Dismissal order, Audit and Investigation etc. These are certain unavoidable and rare incidents caused mostly by employees and their personal issues that directly violate Bank’s code of conduct. As per service rules of bank this section make policy and pass them to higher authority to approved it. This department also made structure of the bank and structure of different department of this bank. It also denoted working area of GM (General Manager), delegation of financial power, delegation of business power, delegation of administrative power. •
Make service rules of the bank
Provided information about bank position to national assembly
Made worksheet about assistance
Provided information to auditor, Bangladesh Bank and business delegate
Make administrative budget
Judge the decision which was take in branch conference
Made work plan about branch conference
Working about banking diploma
Collecting information about deposit position of the bank
Collects information about employee work position (Employee repotting time in office)
Judge the work position of LAN & WAN
Send statements relating to delegation of power
Discipline section This section follow-up bank guideline, if any employee/officer plays any role against BDBL or banking rules or government service rules an inquiry committee will be formed according to bank law. Committee will collect information about crime and if the crime proves undoubtedly, the board of directors will punish him/her according his/her level of crime. The punishment will be •
Held up promotion
Held up increment
Suspension from service (during suspension period an employee only pay 50% of his/her basic salary, no other benefit he/she earned
Dismissal from service
Management officer section and Management staff section This department is divided two separate section one works for officer (management officer section) other works for staff of the bank that is (management staff section). Bothe section do same jobs but under separate section. Management officer section posting, transfer, increment, promotion officer and management staff section posting, transfer, increment, promotion staff. 2.10 SWOT analysis of BDBL SWOT analysis is a process to identify where we are strong and where we are vulnerable, where we should defend and where we should attack. It tells us our strengths, our weaknesses, the opportunities which prevail in the market and the threats which we may face from our competitors and other from other potential factors. 2.10.1 Identification of strengths, weakness, opportunities and threats of the organization Strengths:
Superior Quality: provides its customers excellent and consistent quality in every service. It is of priority that customer is totally satisfied.
Dynamism: Bangladesh Development Bank Limited draws its strength from the adaptability and dynamism it possesses. It has quickly adapted to world class standard in terms of banking services. It has also adapted state of the art technology to connect with the world for better communication to integrate facilities.
Efficient Management: All the levels of the management of Bangladesh Development Bank Limited are solely directed to maintain a culture for the betterment of the quality of the service and development of a corporate brand image in the market through organization wide team approach and open communication system.
Experts: The key contributing factor behind the success of Bangladesh Development Bank Limited is its employees, who are highly trained and most competent in their own field .Its provides their employees training both in-house and out side job.
History: Bangladesh Development Bank Limited has a good reputation. It has a loyalty of customers and vendors.
Limited Workforce: Bangladesh Development Bank Limited has limited human resources compared to its financial activities. As a result many of the employees are burdened with extra workloads and work late hours without any overtime facilities. This might cause high employee turnover that will prove to be too costly to avoid.
Poor Technology Infrastructure: As previously mentioned, the world is advancing etechnology very rapidly. Though Bangladesh Development Bank Limited has taken effort to join the stream of information technology, it is not possible to complete the mission due to the poor technological infrastructure of the country.
Limited Branch: It has limited branch in Bangladesh.
Government Support: Government of Bangladesh has rendered its full support to the banking sector for a sound financial status of the country, as it has become one of the vital sources of employment in the country now. Such government concern will facilitate and support the long-term vision of Bangladesh Development Bank Limited.
Evolution of E-Banking: Emergence of e-banking will open more scope for the Bank to reach the clients not only in Bangladesh but also in the global banking arena. Although the bank has already entered the world of e-banking but yet to provide full electronic banking facilities to its customer.
Information Technology: Banking and information technology might give the bank leverage to its competitors. Nevertheless there are ample opportunities for Bangladesh Development Bank Limited to go for product innovation in line with the modern day need.
Increase ATM Booth: Bangladesh Development Bank Limited increases ATM Booth facility.
Mergers and Acquisition: The worldwide trend of merging and acquisition in financial institutions is causing concentration. The industry and competitors are increasing in power in their respective areas.
Frequent Currency Devaluation: Frequent devaluation of Taka and exchange rate fluctuations and particularly South-East Asian currency crisis adversely affects the business globally.
Emergence of Competitors: Due to high customer demand, more and more financial institutions are being introduced in the country. Many banks are entering the market with new and lucrative products.
2.10.1 Conclusion As consider industrial band BDBL intends to set standards as the market leader in Bangladesh. It demonstrates that a locally owned institution can provide efficient, friendly and modern banking service on a profitable basis. Human Resource Management Department is the most confidential department for any organization as well as Human Resources Management in BDBL. Here as an intern, limited information was collected for preparing this report because of too much confidentiality. It was an honor to work as an intern in a reputed organization like BDBL. The BDBL is a bank that confirms the best service to the customers as well as to the employees by Human Resource Division. BDBL is the fastest growing Bank in Bangladesh. By working in HRM Division the knowledge was learnt would be helpful enough to sustain with the real organizational environment. Through BDBL is government supported organization it has strong capital adequacy and after merger now BDBL operate business fairly well. BDBL corporate social responsibility (CSR) based on ethical values following by people, planet, and the profit are in compliance with legal and regulatory requirements which encompass employees, customers, business associates, shareholders, suppliers, regulatory
authorities and the community at large. BDBL main intention is to rapid industrialization as such bank always try to invest productive sectors rather than commercial banking system.
2.10.2 Action plan •
Bangladesh Development Bank Limited should increase workforce;
Bangladesh Development Bank Limited should improve technology infrastructure;
Bangladesh Development Bank Limited should improve skilled manpower;
Bangladesh Development Bank Limited should improve card division
Bangladesh Development Bank Limited should increase ATM Booth
Bangladesh Development Bank Limited should increase job security
Chapter – 3 Operational Activities of the Bank Loan operations department (LOD) Documentation and Machinery Department Project Implementation Department Central Recovery Department Central Accounts Department (CAD) Project Rehabilitation Departmt Law Department Human Resources Management Department (HRM) OPERATION OF DHAKA COMMERCIAL BRANCH OFFICE 3.1 LOAN OPERATION DEPARTMENT: Bangladesh Development Bank grants loan on the basis of certain criteria .The loan operation department does the first activities of loan granting .Any entrepreneur who wants to borrow money from BDBL must fulfill at first bank standard questionnaire form in terms of tk. 1000 . These processes are as follows: a. At first an application form is supply to the entrepreneur. b. After filling up the application from it is submitted by the entrepreneur. c. The entrepreneur supplies a project appraisal letter . d. After analyzing the project appraisal, the board decides the loan should be sanctioned or not . e. If the loan is sanctioned it is forwarded to the project implementation department.
f. To provide suggestion to the entrepreneur for investment in industry in industry sector . g. Examine project loan proposal and present to the committee for sanction . h. Processing co financing project and takes action for authorizing. i. Appraisal report is evaluated on basis of up dated information. j. Analyze the investment principle time to time . k. To provide suggestion for fulfilling loan application form to NRB . Overview of Loan Operation Department
Start with BSQF
Submission of BSQF proposed project
Evaluation of proposed project
Put up appraisal report
Ends of this department
Passed process to other department
The project approval letter will includes the following : I. Name of the project. II. Location. III. Types of product. IV. Promoters. V. Historical data and information of a project. The project appraisal includes different types of aspect the basis of which loan is granted these are: A. Management And Organizational Aspect :
Appraisal of management is very important part of project appraisal .The successful implementation and running of the project rests primarily , on the resourcefulness , competence and integrity of its management .There are not sets of rules to find out if the borrowers’ are persons of integrity .It is done by direct and indirect investigation .The borrowers’ experience and capabilities can be assessed by his educational background ., business experience , general reputation and above all , his /her receptiveness to new ideas and potentially to lean new things . Closely related to the management is the type of organization structure necessary to carry out and operate the project successfully. Appraisal of management and organization of a project can not be done adequately without undertaking credit investigation. The credit worthiness of the sponsors is assessed , among others by way of obtaining credit reports from the various banks and financial institutions . After preparation of the draft project appraisal report and its approval by the appropriate authority of the financial institution, it is placed before the BDBL loan committee for consideration . After clearance by the loan committee , a memorandum on the project for sanctioning loan is prepared and placed for approval by the competent authority .After loan is sanctioned , a pre- sanction letter is issued to the sponsors and the required project deposit issue formal sanction letter on receipt of the acceptance of pre sanction terms and condition . • Name of organization. • Classification . • Name of the sponsor. • Corporate set up. • Historical background of the sponsors such as credit . B. Technical Aspect Technical appraisal report is prepared by an engineer of the appraisal section to see whether the project is sound with regard to every engineering and technological consideration , including product specification , product process , size internal balance , suitability and availability of physical facilities ,design and layout of equipment and building etc. The BDBL has to ensure that the project is soundly designed and appropriately engineered . More concretely , technical appraisal is concerns with question of physical scale , layout and location of facilities ;the technology to used , including types of equipment or processes ; the appropriateness to local condition of technical standard adopted ; the approach to be followed for the provision of services ; the realism of the implementation schedule ; and the likelihood of the achieving the expected levels of output . A critical part of technical appraisal is a review of the cost estimated and engineering and other data , which they are based to determine whether they are accurate with an acceptable margin . The technical appraisal is also concerned with estimating the costs of operating project facilities and services and with the availability of necessary raw material and other output . The potential impact of the project on the human and physical environment is also examined , to make sure that any adverse effects can be controlled or minimized . The ultimate aim of project appraisal is to determine the profitability of the project both from commercial and social point of view. This can not be undertaken unless a thorough a technical study and cost analysis is made and related technical problem solved . Thus the technical study and cost analysis provide the basis both for the initial estimated of the profitability of an investment during the initial stage and also for the final decision to implement the project . The technical appraisal, therefore, constitute the foundation of the entire structure of project appraisal. The basic aspects of technical appraisal are: • Preliminary investigation of products /services, various inputs such as raw materials, technology required etc.
• • • • • • • • • • • •
Selection of product process involving the choice of alternatives, wastage , by product , disposal of waste and effluents etc. Machinery and equipment for products and services . Production capacity and efficiency. Layout plan for building and machinery. Analysis and evaluation of various utilities and services . Work schedule. Estimation and evaluation of cost . Types of plants. Production mix and capacity. Technology and manufacturing process. Raw material and other related element. Utility.
C. Marketing Aspect : Detail market appraisal report is prepared by the project economists to determine the size of the market, and ascertain the supply gap on the hand and to analyze the marketability of the products and services on the other. An industrial projects is expected to bring in some goods and services for the community. But the community may not need them infinitely . Their demand may be finite but at the given price . The objective of the market study is to see how much of the foods and services the community is supposed to acquire and at what price . In other words , the market analysis is concerned with the study of the demand for a project’s output . The demand for products and services changes over time as a function of price , income and other variable . It is thus necessary to estimate how much the project cak sell in the short and long run taking these variables into consideration. Generally the actual consumption or the effective demand for an output in physical quantities is determined taking into consideration . Production, imports , exports and changes in stock position . In absence of adequate information, apparent consumption method is used as an approximation to true consumption . The future demand for goods and services of an industrial projects is determined on the basis of trend extrapolation . In a large number of cases , data relation to past levels of consumption , income and prices are not available .In such cases, the trend method is used for projecting future demand . This is done by way of establishing a median line between the quantities consumed over a number of years and estimating the future demand in accordance with the trend of this line . Intermediate goods are the facilitate production of final consumer goods .Therfore the demand for the intermediate goods is linked with the activities in the using sector . For example , the demand for yarn will large depend on the prospect of development in the weaving sector . The demand for capital goods is estimated based on the rate and volume of investment in the using industry , durability of capital goods , technological innovation etc. In the demand projection of import substituting goods , the level of imports is taken as the indicator . Daily and annual demand . Cost competition . Government incentives . Global market . Importing countries . Marketing strategy . Quality . Pricing . Opportunity and threat . D. Financial Aspects :
The next step is to prepare a detailed report on the financial viability of the project. The main purpose of such appraisal is to asses the viability of the project in terms of its operation in the future years and its financial soundness . It is concerned with assessing the feasibility of a project from the point of view of its financial result . The project direct costs and benefits be calculated in pecuniary terms at the prevailing market prices . The BDBL has to satisfy itself not only about the current solvency of the projects but also about its continued solvency during the currency of the loan to ensure timely payment of the principle , regular payment of interest and adequacy of physical assets representing security for the loan . The relevant information collected on technical , economical and management aspect of the projects have got direct bearing upon the financial appraisal . Such appraisal is directed to examine mainly the following aspects : a. Financial requirement to bring the projects into existence and the probable sources of finance . b. Prospect of adequate revenue generation with particular emphasis on actual cash generation (liquidity ) and probable impact on the financial condition (solvency ). The first aspect deals with total cost of the projects (fixed cost and net working capital )and a suitable financial arrangement .The second aspect related to the analysis of production , cost , income etc. at different volumes of production at different levels of activity . BDBL focus of attention is on the earning of the projects . Earning should be sufficient so as to enable the projects to services its debt (installment and interest ).There are various approaches for financial appraisal of which the following techniques are being used by the BDBL. 1. Ratio Analysis: a) Liquidity ratios: i. Current ratio ii. Quick ratio iii. Working capital ratio b).Leverage ratios: I) Debt â€“equity ratio . ii)Debt service ratio c). Activity ratios: i)Inventory turn over ratio ii)Asset turn over ratio iii)Accounts receivable ratio d). Profitability ratios: i)Return on sales ii)Return on equity iii)Return on capital employed 2.Break -even analysis ; 3.Earning forecast; 4.Fund flow statement ; 5.Internal rate of return (IRR); 6.Pay back period method ; 7.Net present value method (NPV); 8.Bruno ratio;
E. Economic aspect : Economic analysis eliminates the divergence between social and private by valuing all goods and services in terms of the real costs and benefits. Which their production imposes on the economy . The economic analysis of a projects begins with the appropriate valuation of all inputs and outputs .
The local currency is used as numerate and the foreign exchange is converted into local currency at the official exchange rate . Treatment of inflation is always a peculiar problem in the field of project appraisal .This problem is handled by way of considering a contingency margin depending on the current rate of inflation .As regards the fluctuation of exchange rates, BDBL has introduced a self finance insurance scheme known as the “the exchange rate fluctuation absorption scheme (EFAS-1990)’’Under the scheme , the borrowers of foreign currency are being protected from the adverse fluctuation of exchange rates on payment of the required exchange premium by way of converting foreign currency loans disbursed at rates prevailing on the date of disbursement . Both internal rate of return (IRR) is calculated regarding the project under this aspect . Economic appraisal is prepared by the project economic justification for setting up of the project .The project is looked from the national or social point of angle the economic cash flow is constructed on the basis of “true or real prices ”commonly known as accounting or shadow price , when considered in project evaluation , reveal more accurately the social costs and benefits to a country than if it are based on market prices , which are frequently distorted . When the gap between shadow prices and actual prices become too large , prices appear to be far from reality and thus the viability of the project is an affected . E. Sensibility Analysis :
3.2 DOCUMENTATION AND MACHINERY PROCUREMENT DEPARTMENT: After sanctioning loan by loan operation department , it issues a letter to documentation department , parties and after concerned department . The documentation department issues a letter to the parties to produce necessary documents . Those documents are: 1. Memorandum of association ,Articles of association . 2. The land upon which the project will be established , document of this land must be produced . 3. Receipt of land . 4. Documentation fee. 5. Mouja map . 6. The document that reveal that the land were not sold within preceding two years . Then a form is filled up . These document are sent to lawyer. It everything is ok it is transferred to project implementation department . In the documentation process the borrowers are required to submit a copy of memorandum of association and articles of association . It is returned after the confirmation that it has been submitted according to the rules the borrower company must submit it after the authorization by direction of registration of joint stock company and firm .The following activities are performed during the time of documentation process . 1. The borrower company must submit the necessary document: After the sanction of loan documentation and machinery department adviser the borrower to submit the following documents along with the document of land and additional necessary : • In applicable case CS, RS ,DCR, receipt of rent ,certificate of liability , possession certificate ,gazette notification ,transfer certificate , receipt of purchase . • Memorandum of deposit to titles deeds. • Agreement of hypothecation . • Company regulation and regarding . • Signature of directors . • Firm signed by the shareholders or directors . • Memorandum of association and articles of association .
• • •
100% share certificate . Auditors certificate about paid up capital . Attested photographs of the directors .
2. Verification of documents by documentation and machinery department and law department : Machinery procurement department inspect these documents and take necessary steps from law consultant to protect the interest of the bank. 3. Preparation of all documents of the borrower company director : If documentation and machinery procurement department finds no default on the documents provided by the borrow, the documentation advises the borrower to prepare the following documents: • D.P note . • D.P note delivery letter . • Revival letter form . • Credit agreement . • Personal security . • Memorandum of deposit title deeds . • Agreement of mortgage . • Sample signature card . After receiving the above documents , documentation and machinery procurement department performs the following activities : • To make list of machinery of enlisting with tender . • To offer tender for collecting machinery . • Examine documents and other papers related to tender . • Comparative price analysis for collecting machinery . • Provide opinion on technical comment of appraisal by LOD/divisional branch office . • Then it sends these documents to audit department .After receiving the clearance certificate from audit department that documents are sent to project implementation department and project rehabilitation department . 4. Registration of first charge of bank on project properties : After the audit clearance from the audit department , documentation and machinery procurement department takes attempt to mark first surcharge on the fixed and current assets .In case of project loan equitable mortgage is authorized instead of registered mortgage ,equitable mortgage is created when original title deeds are submitted along with memorandum of deposit of title deeds. According to the company act of 1994 the above two instruments are required to summit in the office of directorate of joint stock company .
3.3 PROJECT IMPLEMENTATION DEPARTMENT : When the loan operation department it is forwarded to project sanctions the loan implementation department (PID) performs the following activities : 1. Undertaking necessary initiative after granting loan in favor of the project. 2. Taking necessary action to make the factory layout. 3. Making necessary adjustment in case of change of the project place , change of board of directors and change product mix etc. 4. Making necessary attempt to give the loan a stage by stage after the loan granting .
5. To ensure that necessary capital has been supplied by the entrepreneur and to ensure its proper utilization. 6. To give necessary assistance in the case of bridge loan from any financial institution . 7. Taking necessary initiatives to construct the lay out of the project according to construction cycle . 8. Monitoring and machinery of the project , inspection and taking any kind of advice regarding to any machine related problem from machinery department . 9. Verification of new material process of project ensuring the cash capital according to the loan terms and condition and providing necessary assistance in this matter . 10. Inspection and monitoring experimental production and extension of loan period . 11. Making the final construction report (FCR) and transferring it central recovery department (CRD) and concerned department /authorities . 12. Determination of the construction period of the project preparing loan repayment schedule and taking after necessary action regarding this . 13. Monitoring and inspecting the project to see whether the project is implementing according to time schedule and taking necessary initiatives to solve any kind of problem arising out there from and providing necessary advice to the entrepreneur. 14. Receiving insurance letter against the predetermined risk of the implementation project assets and ensuring its deposit to bank. 15. Inspection of the utility of the principles regarding the project implementation and presiding up to date principles. 16. Sending the file of the project of central recovery department (CRD) from project implementation department after receiving at least two installments from the borrower after the final construction report (FCR). 17. Sending the file of law department to take legal action if the borrowers fails to repayment at least two installment . 18. Converting the foreign currency into local currency and vice versa if it is necessary . 19. Revaluation and connecting of sanction letter on the basis of different up to date information . 20. Up dating the sanction letter according to the necessary of the foreign lender . 21. Rescheduling and construction period , taking authorization form the concerned authority and taking necessary action relation to this ,and 22. Performing different activities given by department . 3.4 CENTRAL RECOVERY DEPARTMENT : Project implementation department makes a repayment schedule and given it to the borrower .Normally the interval is 6 month . This department inspects the projet after every 6 month to see whether any leakage .If the borrower fails to repay the loan as the application of the borrower it is rescheduled . Sometimes a portion of interest is exempted .If the borrower fails to repay the loan than it is transferred to law department to take legal action . On the application of the borrower sometimes the project is transferred to project rehabilitation department to restore the project . Principles of classification of loan and provisioning : For the purpose of classification all loans and advances are divided into four groups: 01.Continuous loan :The loan which can be granted and recovered without any repayment schedule but have an expiry date and maximum limit are called continuous loan . 02Demand loan :The loan which must be repaid as the bank calls it ,is called demand loan . 03.Term loan :The loan , which must be repaid as the bank calls it ,is called term loan .
04.Short term and agriculture and micro credit . 05. Provision for default loans : Objective criteria –If any continuous loan is not repaid within the expiry date that it is called irregular loan . The classification of loan are as follows : 6 months˃ continuous loan ˃˃3months =sub stopped 12 months ˃ continuous loan ˃˃6 months =doubtful Continuous loan ˃12 months =bad If any installment of any term loan is not repaid within specific date it is treated installment default . Maintenance of provision : 1. On the basis of the equity of the loan the following procession are maintained: A. Substandard 20% B. Doubtful 50% C. Bad debt 100% 02.On short term agricultural and micro – credit the following provision to be kept : A. On all debt other than bad debt 5%. B. On bad debt 100%. Direction of loan rescheduling: 1. On the application of loan rescheduling the bank inspect reason of the loan default .It is revealed that the borrower has spent the money in another way instead of the specific investment than such application will not be considered .In this case legal action will be taken . 2. The position of liabilities of the borrowers to other bank is to be considered . 3. The bank will analyze the cash flow statement ,audit balance sheet ,income statement and other financial statement . 4. If necessary , the bank will inspect the business premises of the borrower to ensure that he will be able to repay the schedule loan . Rescheduling of term loan : 01.A term loan may be rescheduled in 15%of expired installment or 10% of total due which ever is lower is paid in cash at first . 02.A term loan is considerable to be rescheduled for the second time if 30% of expired installment or 20% of total due which ever is lower is paid in cash . 03. To reschedule term for the third time or more 50% of expired installment or 30% of due whichever is lower must be paid in cash . Demand and continuous loan rescheduling: 2To reschedule the demand loan and continuous loan the rate of down payment are as follows : Inspired loan Up to 1 crore 1 to 5 crore 5 crore and above
Rate of down payment 15% 10%(but not less than 15 lacs ) 5%(but not less than 50 lacs )
02.To reschedule the demand loan and continuous loan which has been converted into term loan 30%of expired installment or 20%of total dues which ever is lower must be paid in cash . 03.If the loan is required to reschedule again 50% of expired installment or 30% of total dues must be paid in cash at first .
3.5 CENTRAL ACCOUNTING DEPARTMENT: Loan accounting department is the department , which centrally maintains all loan accounts of the bank . There are 4 sections , which performs the activities of the department . 1. Not due section . 2. Amount due section /overdue section . 3. Replacement section . 4. General and policy section . 1. Not due section: Not due is the installment yet due for payment in schedule time fixed by the project department /Branch officer. 2. Amount due section or overdue section : The payment of installment and interest in not paid /cleared in time is overdue . The function of this section are : • Accurately list of balance preparation . • Advice sending to borrower . • Quarter /half year by interest charge .
3.Re-phasement section : When the overdue is rephrased or waived then the replacement section will do the needful activities . General and policy section do the following : • To prepare the monthly Trial balance . • Monthly recovery statement . • Monthly disbursement schedule . • To make entry all the transaction as per daily statement received from the branch officer. • All list of balances of not due send to the Head office and Branch Office . • To prepare distribution of work among the officers and stuff as specific guidelines of the authorities . Not Due Section : 1. Quarterly /half yearly installment and interest charge and transferred it to amount due section . 2. The rate of interest is fixed by the prevailing interest at the time of execution of loan document . 3. Foreign currency installment and interest will full as foreign currency loan agreement as per contract of overseas donor agency . In case of foreign currency loan : 1. Exchange fluctuation absorption schedule (EFAS) is enjoyed .Interest is fixed at particular rate giving exchange premium .In this case fluctuation of foreign currency is not affected in installment and interest. 2. In EFAS is not available installment fall at foreign currency and converted into conversion rate from time to time circulated by Bangladesh Bank . 3.6 Project Rehabilitation Department
Bangladesh Shilpa Bank was established to stimulate industrialization in the Country. But many projects, which are loaned by BDBL, become sick and can't carryon their business. In such cases, BDBL provides assistance to rebuild their structure to restart their business. Moreover, more information and advices may give so that the entrepreneur may run the business more efficiently. Activities and Responsibilities of Project Rehabilitation Department are 1. Recommendation and taking initiative to rehabilitate a project after tracing the cause of sickness and land of sickness if the files are transferred to Project Rehabilitation Department from the ensured department /branch/ zone/office after primary analysis of a project. 2. The files of the projects that transferred to law department to take necessary actions are deemed not to be rehabilitated. Again, if there is no opportunity to rehabilitate any it is also rejected. 3. Verification of the proposal regarding rehabilitation recommendation preparing the implementation schedule and taking necessary initiatives to take care the project and deciding the single or joint management of the Bank over the project if necessary. 4. Taking rehabilitation program controlling projects management, monitoring, insuring the management system taken over by Bank, and performing other activates regarding these. 5. Production of the rehabilitated project making of these products analyzing the targeted loan recovery and actual situation and taking necessary initiative regarding these. 6. Making recommendation on the management and direction or the acquired project. Making recommendation to restructure the capital to ensure fund, management profit carrying and loan recovery. 7. Retraction of Bank participation stage by stage from the project, which is profitable. 8. In case of right management after the certification that it will be effective and efficient. Analysis of function of Rehabilitation Department The main function of the rehabilitation is rehabilitated the sick industries. When the company found that the industry face different problem and so that they can not conduct their production or continue their activities then this department investigate it and if they think that if organization gets some loan then they can restart their production then the rehabilitation department suggest for loan. But how they become sickCauses to become the project sick
Rehabilitation is necessary to restart the sick project. A project becomes sick when it cannot its operation according to target setting. Following reason/causes to become the project sick. Technical Problem Technical problem encompasses the followings: •
Marketing Problem Marketing problems encompasses the following •
Excess capacity of machine.
Demand fall for particular product.
Smuggling of substitute goods.
Financial Problem Financial problem can point out in the following way: •
Project cost higher budget failed.
Lack of working capital.
Fixed cost higher.
Variable cost increases.
Managerial Problem •
Pre-mature demise of key man.
Natural problem Some time flood and fire damage the machineries and infrastructure of the organization. So that organization stopped the activities. Function for remove the above problems when one company faced any one of the above problems then rehabilitation department has investigated it and survey the problem. The department also estimated the amount of recover the problem and then sanctions the loan. Current function of this Department
Trend of Rehabilitation is slow now. BDBL tries to recover its money by legal action. The BDBL observed that if the department wants to sanction loan for the damages or recover the other problems it needs high amounts of money with which it can start anew company. So BDBL going to stop their rehabilitation program slowly. Loopholes Now this department in actually inactive but it has some employee who has to pay salary and has some cost also for the maintenance of department. Which obviously negatively affect the profit of the BDBL. 3.7 LAW DEPARMENT If the shilpa bank fails to recover its loan in the normal way, it must under taken alternative action and file case in the court. The causes which shilpa bank files cases are: Issues Section Recovery case 33 Financial loan case 5(a) Certificate case 35 Bankruptcy case 9(a) Case if check is not cashed (petition case) 138 Case if machinery of project transferred from the project without 37 permission Case if false properties are mortgaged Recovery case: Case is filed with the court of district judge of sub judge the concerned company and its director such filed according to Bangladesh shilpa Band ordinance 1972 section 33. Finance loan case: Such case is filed against the concerned company and its directors to recover the loan, which is due. Certificate case: Thus case is filed against the loan default company and its director according to public demand recovery act 1913 with the court of respective general certificate officer. Insolvency case: Bankruptcy case can be filed at least tk. 5 lacks are due. This case is filled according to insolvency act 1997. Case if check is not cashed: This case is filed if any check is dishonored. It is done according to the negotiable instrument act 1994. Case if mortgage machinery is transferred from the project rite. These cases are filled BSB ordinance 1972 under section 37. Process of disposing civil case.
A) preliminary stage. B) Pre trial stage C) Post trail stage Finance loan Act 1990: To recover the loan of financial institution, the govt. has announces finance loan act 1990 Power of finance loan court: All case relating to finance loan must be file with finance loan court. Provided that if any specific and if establish the financial institution there is every specific procedure to recover the loan, it must be maintained. Rules in case of notice: The notice of this case must be published in a Bengali and English dailies if any one claims that no notice has been published that the document must be produced. Decision of the court: No question will arise about the rules, order and decision. Appeal section7: Any one can appeal against the decision of the court by depositing 50% of the money declared by the high court.
Installment of loan: Section 8 The court can order the business to repay the loan within one year. But it can be more than one year and interest will be charged on the amount declared to be repaid. Insolvency act 1997: As a developing country, various aspects of Bangladesh have changing day by day. For this reason to the finance loan act. More effective, necessity has arisen to form insolvency act. Sometimes recover loan from the borrower, it is not possible for the court because it takes a long process and the borrower must be declare insolvent. To stimulate the process insolvency act 1997 was formed. This act specifies how a man should be declared insolvent and the asset is distributed among the creditors. Moreover, this act also specifies: 1. To protect the debtors 2. To protect the interest of the creditor. The following person will de considered to be insolvent: â€˘ Inhabitant of Bangladesh or head office of his business is situated in Bangladesh. â€˘ He had been living in Bangladesh for one preceding year of he had workplace in Bangladesh â€˘ Generally the business through as representative. Money loan act 2003:
As the articles of 2003 under section 33. After serving notice if borrower comes forward then ok, otherwise serve sale notice in daily newspaper. Bank has right to sale assets. Rest amount loan is refundable under money loan act. Court notice for appearance. After 3 notices it notices in the daily newspaper. If the borrowers are not appeared then justice for in anonymously to the bank. Then the Bank can issue decree. Under section 46 is court settlement. For verdict then again case for appearance for court. If the borrower doesnâ€™t appear again judge give verdict for ownership to the Bank. Valuation of the money Loan Act 2003 Though BDBL has huge loan defaulters it was increased day-by-day so it was very difficult to exist BDBL without govt. subsidies. But now this act helps to recover the losses. This act vastly becomes very effective. Subsection 33: Under this subsection the bank can attach and scale through court any mortgaged asset or any personal asset of the borrower to recover the money. Subsection 34: If any borrower company fails to pay any installment of loan the bank has the right to take over the property and can recover the money through the sale without any interface of court.
Subsection 35: Under this subsection the bank can make an application to general certificate officer against the borrower company and its director following public demand recovery act 1913. After the certificate case the court will give 15 days time and a notice describing the installment the loan. Legal Action Taken Position of Projects Under Litgation
No. of Project
No. of Project
Project Under Litigation Legal Notice Issued Suit Cases Settled Outside the Court Issues of Auction Notices Project under Disposal of Assets Published in the National Dailies for Sale of
118 315 6 22 80 168
118 303 10 42 20 125
Projects Assets Project Sold Loan Recovered
Litigation (In million Tk.)
Source: Annual report Importance Law department has a vital role in BDBL. This department protects the illegal action of different department and arrange suit against defaulters. In 2003-2004 the no of filing of suit 244-ligal notice issued 10. 3.8 Human Resources Management Department (HRM) What is Human Resource Management? •
Human resource management refers to the practices and policies you need to carry out the people or personnel aspects of your management job. These include:
Conducting job analyses (determining the nature of each employee’s job)
Planning labor needs and recruitment job candidates
Selecting job candidates
Orienting and training new employees
Managing Wages and Salaries (how to compensate employees)
Providing incentives and benefits
Communicating (interviewing, counseling, disciplining)
Training and developing
Building employee commitment
Why is HR Management Important? Why are these concepts and techniques important to all managers? Perhaps it is easier to answer this by listing some of the personnel mistakes you do not want to make while managing. For example, you do not want: •
To hire the wrong person for the job
To experience high turnover
To find your people not doing their best
To waste time with useless interviews
To have your company taken to court because of your discriminatory actions
To have your company cited under federal occupational safety laws for unsafe practices
To have some of your employee’s think their salaries are unfair and inequitable relative
to others in the organization
To allow a lack o training to undermine your department’s effectiveness
To commit any unfair labor practices
Functions of the Human Resources Management Department •
To control the administration of human resources of the bank
To assess and collect compatible personnel who will be perfect for the bank.
To take program and implement for developing human resources.
To make appointment, promotion and appraising skill of officer and stuff.
To make service rules, correction, expansion, administration rules, sub rules,
Orders, notice etc for controlling and stuff.
To give general scholarship to the brilliant and daughter of stuff.
To communicate with trade union scrutinizing their demands, open discuss
Developing the relationship with administration proper implementation of labor law.
Assess and grant retirement facilities at the time of retirement.
Give medical facilities to the stuff.
Maintain and grant leave without regular leave.
To coordinate and evaluate the branch and regional stuff activities.
To step and implement for opening new branch office.
To maintain relationship with government and other institution
To prepare and implement policy about human resources and related activities.
To control the activities the staff of the banks and take proper. Step to implement computer technology.
Analysis of function of Human Resources Department Human Resources Policies Analysis HRD of Bangladesh Development Bank Ltd. has the written Human Resource Policies in the following: •
Training & Development
Compensation & Reward
Health & Safety
Leave & Vacation
All of the above polices are attractive for the employment in the BDBL. Bangladesh Bank recruits the employee of BDBL under the Bank ordinance. Selection of Bangladesh is always free and fear. The locating of every branch of BDBL is in the big city area. There is a training department in BDBL at the Head office. So by training employee gathered skilled. Employee can enjoy the leave and vacation also. So the job of the BDBL is attractive. The Recruitment and Selection Process The recruiting and selecting process can best be envisioned as a series of hurdles, illustrated in Figure 4.1. Specifically, recruiting and selecting require: •
Doing employment planning and forecasting determining the duties of the positions to be filled.
Building a pool of candidates for these jobs by recruiting internal or external candidates.
Having the applicants fill out application forms and perhaps undergo an initial screening interview.
Utilizing various selection techniques such as tests, background investigations, and physical exams to identify viable job candidates.
Sending to the supervisor responsible for the job one or more viable job candidates.
Having the candidate(s) go through one or more selection interviews with the supervisor and other relevant parties for the purpose of finally determining to which candidate(s) an offer should be made.
Job Analysis Organizations consist of positions that have to be staffed. Job analysis is the procedure through which you determine the duties of these positions and the characteristics of the people who should be hired for them. A supervisor or HR specialist normally aims to collect one or more of the following types of information via the job analysis. Work activities. Information is usually collected on the actual work activities performed, such as cleaning, selling, teaching, or painting. Human behaviors
Information on human behaviors like sensing, communicating, decision-making, and writing may also be collected. Performance standards Information is also collected regarding performance standards by which an employee in this job will be evaluated. Job context Included here is information about such matters as physical working conditions, work schedule, and the organizational and social context â€“ for instance, in terms of the number of people with whom the employee would normally have to interact. As summarized in the Figure the information produced by the hob analysis is the basis for several interrelated HR management activities.
Figure: Uses of job Analysis information
Job specific action
Performan ce appraisal
Recruitme nt & selection decision
Job evaluation wages & salary decision
Training requireme nt
Source: BDBL organizational personnel Management Development Any attempt to improve current or future management performance by imparting knowledge, changing attitudes, or increasing skills. The Five-Step Training and Development Process 1. Needs analysis â€˘
Identify specific job performance skills needed to improve performance and Productivity.
their specific levels of education, experience, and skills, as well as their attitudes and personal motivations â€˘
Use research to develop specific measurable knowledge and performance objectives.
2. Instructional Design
Gather instructional objective, methods, media description of and sequence of content, examples, exercises, and activities. Organize them into a curriculum that supports adult learning theory and provides a blueprint for program development.
Make sure all materials, such as video scripts, leaders’ guides, and participants’ workbooks, complement each other, are written clearly, and blend into unified training geared directly to the stated learning objectives
Carefully and professionally, handle all program elements – whether reproduced on paper, film, or tape – to guarantee quality and effectiveness.
3. Validation •
Introduced and validate the training before a representative audience. Base final revisions on pilot results to ensure program effectiveness.
4. Implementation •
When applicable, boost success with a train-the trainer workshop that
presentation knowledge and skills in addition to training content. 5. Evaluation and follow-up To assess program success accordingly: •
Reaction-Document the learners’ immediate reactions to the training
Learning –Use feedback device or pre-and posttests to measures what learners have actually learned?
Behavior Note supervisors’ reactions to learners’ performance following completion of the training.
determine the level of improvement in job performance and
maintenance. Developing Employees by BDBL BDBL has a training department to build the skilled work force. One-year probation period training for confirmation of the job. They use the Classroom Lecture and conference techniques to develop the knowledge of employees. They provide following areas – •
The training department evaluates the effectiveness of the training program through the performance in tests. The employees sometimes are sent to the outside for training. They are sent to – •
Banking Diploma BDBL encourages the employees to complete the Banking Diploma given by the IBB (Institute of Bankers of Bangladesh). They employee get the following benefits for his achievements of Banking Diploma. •
Motivation of Employees The following methods and techniques are used to motivate the employees. •
Benefits and services for the employees •
Leave with Pay (Staff)
Children’s education facility
Home furnishing Allowance (MD & GM)
Pay Scales BDBL has no pay scales for its own employees. It follows the pay structured of Bangladesh Govt. Over Time The mgt level or officers are not entitled to overtime. Only staffs’ overtime is determined According to per hour basic. No Allowances are provided for overtime. Compensation Principles There is a Welfare Trust in BDBL. The compensation is determined according to the nature of case. It does not exceed Tk. 25,000. Promotion Policies It is done on the basis of – •
Retirement: BDBL maintains the rules and regulation of govt. for retirement benefits employees. They approve 1 year leave for preparation of Retirement (LPR). The pension will by calculated in the following way – (a) The time of Retirement:
Basic Salary x 80% X 200 2
Basic Salary x 80% 2
Up to the death of employee and after his death, his wife will get during her whole life. (c) One Time:
Basic Salary x 80%
2 Problem in human resources Management Absence of Motivation: There is a few chance of promotion. The workers are in the same position for a longtime. There is no promotion for them. They work traditionally not take the job as a challenge. Lack of team speed: There is no team speed of the workforce. They work as usual. Sometime, the important file and work are in freeze if any officers do not give importance on it. Lack of Morality: Some workers are morally weak. Sometime they do not perform their duty properly. They do work which they not authorize in some cases. No fresh worker: There is no new appointment about 10 years. The old workers do their performance according to the old model. Therefore, there is no radical change of the work. Political trade union: The trade union of the BDBL is politically elected. As a result, the skill workers sometime deprive their promotion and facilities. No strong parallel business: Some department workers are very busy. Some department workers are relaxed. They have no work.
3.9 OPERATION OF DHAKA COMMERCIAL BRANCH OFFICE
Dhaka commercial Branch office deals with all commercial affairs of the Bank .Every loan granted by the bank is paid through this branch and the borrower can withdraw from this branch . Moreover , this commercial branch office also performs the general banking activities such as deposit long time and medium term loan , letter of credit issues etc. The major operations of Dhaka commercial branch are : 1. Cash transaction . 2. Loan accounting and documentation of cash credit . 3. Loan classification . 4. Back to back L/C preparation . 5. Preparation of C/B statement and determination of different principles . 6. Current account ,Saving account ,and Overdraft account are maintained Daily clearing voucher preparation and transfer scroll are maintained . 7. Providing scroll number ,verifying all voucher number of cash collection from cash receiving cashier .To be sure about the signature a senior officer performs these activities . 8. Allocation of all checks o the account of the account holder /loan holders according to the bank rules . 9. Drawing from Bangladesh Bank , deposit to Bangladesh Bank volt register , prize bond register maintenance of different document of different department , maintenance of all accounts of petty cash , maintaining the bank guard . 10. Receiving cash and payment .Trading of prize bond ,co-operation in performing the activities of officer (cash). 11. After examining of check /debit voucher ,issue of token .Comparison between voucher number and cash amount and being sure that no error exists. Clearing pay order ,demand deposit and receipt of slip of cash and check deposit . Maintenance of check issue in favor of Bangladesh Bank and other bank and maintenance of register . 12. Deposit of Bill Department : • Issuing loan against saving certificate ,fixed deposit and share , commercial loan issue and loan allocation. • Policy determination . • Capital revocation . • Opening the term loan account , disposing it ,processing and overdraft ,granting loan against long term deposit and performing other activities relating to these ,performing all activities relating to clearing house . 13.Bills department :Dealing with demand draft (DD)MT ,T.T, P.O and saving certificate (SC).Preparation of statement regarding bill and check through LSC. 14.Saving Certificate Department :Purchase and sales of saving certificate ,voucher preparation calculation ,report to Bangladesh Bank ,collection of commission From Bangladesh Bank . 15. Principle determination department : Saving account ,Current account and overdraft relating check issuing and all other activities preparation ,Inward letter registration and forwarding . 16.Accurate Department : • Distribution of account related activities ,voucher ,subsidiary ledger and general ledger . • Payment of salary and quarterly report to central . • Accounting Department ,posting to subsidiary ledger . • Reconciliation of Bangladesh Bank account ,posting to general ledger ,balancing . • Daily and monthly statement forwarding of inters branch department . • Posting to subsidiary ledger . • All kinds of activities relating to foreign trade . • Commercial L/C preparation . • Preparation of report about internal demand . • Back to back L/C.
• • •
Monthly statement preparation . Bill of eatery matching public statement . Performing all activities relating to ECG and communication to Sadharan Bima Corporation . 16. Cash credit section : • Performing all activities relating to cash credit . • Inspection of all information which gets working capital . • Renewal of working capital insurance ,transfer of information to CIB ,maintenance of information about it . • Inspection of production process . • Taking necessary initiatives ,relation to loan collection . 17. Cash credit department and documentation section : • Monitor the cash credit account and monitoring of all principles of this section . • Performing cash credit check related activities . Charging interest maintenance of loan account . Confidential expression relating to credit monthly statement preparation to CIB , preparation of document . • Posting to representation accrue to officer the investigation of principle relating to check being sure about the signature , change of interest on quarterly basis maintenance of cash credit loan , preparing and filing the document ,maintenance of insurance policy of working capital ,preparing and distribution of weekly ,monthly , quarterly ,half-yearly , and annual report. • What Does Industrialization Mean? The process in which a society or country (or world) transforms itself from a primarily agricultural society into one based on the manufacturing of goods and services. Individual manual labor is often replaced by mechanized mass production and craftsmen are replaced by assembly lines. Characteristics of industrialization include the use of technological innovation to solve problems as opposed to superstition or dependency upon conditions outside human control such as the weather, as well as more efficient division of labor and economic growth.
Present state of industrialization Bangladesh will have within a decade a sizable industrial sector where manufacturing will account for at least 25 per cent of the GDP and at least 20 per cent of the employed workforce. This will mean a considerable rise from the figure of 10 per cent around which the sector's share in GDP and employed population have hovered for most of the past two decades. A vibrant and dynamic private sector will be the principal actor in Bangladesh's industrial arena. The industrial sector of Bangladesh will be competitive in the liberalized internal market as well as in the external market. The industrial sector of Bangladesh shall have a dominant export orientation. The goal of external competitiveness implies the pursuit of industrialization in accordance with the dynamic comparative advantage of the economy. Given Bangladesh's resource endowment, the principle of dynamic comparative advantage means production of labor intensive manufactures with skill up-gradation and productivity growth as its cutting edge. This however, does not preclude the possibility of Bangladesh having a niche high-tech industrial sub-sector that may be externally competitive. Dispersal of small and medium industries will constitute an important element in the industrial policy approach. Industrial development will be sustainable from the point of view of environmental concerns and resource availability.
Industrial Policy 1999 aims at addressing these concerns building on earlier efforts and gains towards industrialization of Bangladesh economy. The global economic slowdown and the tragic events of September 11 in the US influenced the economy of Bangladesh adversely as well. Besides, the micro economic stability was distorted due to expansionary budgetary deficit in the previous year. Its impact hampered our foreign trade. As a whole, the pressure mounted on foreign exchange and the foreign exchange reserves eroded to an uncomfortable low level. The elapsed decade, particularly its second half is not known for its performance in the industrial sector. Growth in the industrial sector (including manufacturing, construction, electricity, gas and water supply ad mining ad quirking) in post flood period plummeted to 4.92% and demonstrated gradual recovery in the subsequent period posting 5.55% and 8068% growth in FY 2009 and FY 2010 respectively. The pace of foreign investment in the Bangladesh also lowering down. It was on dollar 157.52 million in FY 2010 against dollar 320.82 in FY 2008. Constrains to industrial development The problems and paradoxes with the programs, policies and initiatives for industrial development in Bangladesh are legion. Among them, the most striking problems are as under: 1. Small size and poor growth of domestic economy: One of the basic to the growth of manufacturing in Bangladesh is the small size of the domestic market resulting from the low level of national income. Since the bulk of the income originates in the rural sector, the growth of the domestic market-oriented industrial sector depends on the invigoration of the rural economy. In this respect, the performance of the Bangladesh economy during the past two decades has been quite discoursing. Hence the growth of domestic market oriented industries is very slow. 2. Low entrepreneurial base: Because of colonial economic operation, Pakistani economic discrimination and post independence nationalization, the growth of entrepreneurship has been slow in Bangladesh. Specially, the nationalization alienated the nascent Bangladeshi entrepreneurs. Hence, there is a lake of expert, courageous and efficient organizers in our industrial sector. 3. Lack of financial support: In a number of recent perception surveys, entrepreneurs have mentioned limited access to credit, procedural difficulties ad high cost of credit as their single most important problem. Attempts to stimulate private investment with public financing resulted into many pitfalls including: i) Inappropriate investment ii) Inefficient resource use iii) Overcrowding in certain sectors and iv) Widespread loan default 4. Weak infrastructures base: In Bangladesh access to requisite site services is far from satisfactory. Almost all the basic facilities, such as power supply, telecommunication, water and gas are riddled with bureaucratic tentacle, procedure for availing their infrastructure facilities are needlessly complex. Besides, the shortage of electricity and gas has putted serious set back in the path of industrialization. 5. Under development human resources: With continued improvement in technology, the labor component in most production process is increasingly becoming more skill incentives. Bangladesh are lacking a skilled workforce including managers, engineers and technicians. Technical, professional and vocational training is absent from our education system. 6. Lack of upgraded technology: In Bangladesh there is a lake of commitment to the importance of subtending technology improvement. At the national level. The industrial arrangement for the scientific and research work relating to such issues as industrial applications and acquisition and adaptation of new technologies are grossly deficient. 7. Regulatory Barriers:
Over the regulation of economy has long been considered as a major induced constraints industrialization. In Bangladesh, private entrepreneurs are frustrated due to regulatory environment and the associated bureaucratic sloth and corruption. The procedure for registration with the sponsoring agencies has been an irritant to entrepreneurs and creates distortion and unnecessary delays and increase cost of doing business. 8. Ineffectiveness of industrial policies: The uncertainty of policy change is important reason of discouragement of investment. Industrial policies in Bangladesh serve as an excellent example of policy formulation without strategic vision. Besides, our aid dependent policies sometimes oppose the actual aim of industrialization. 9. Poor performance in export promotion: The performance of our export industries is not satisfactory. There are various problems such as duty draw back and export credit guarantee schemes. Others such as export performance benefits, back to back letter of credit and bonded warehouse are not sufficiently broad based. 10. Political instability: Political instability especially, hartal, strike etc pose serious constraints on the way of industrialization. In spite of huge financial lose political instability due to confrontation behavior government and opposition parties discourage the foreign investor seriously. PROSPECTS FOR INDUSTRIALIZATION In spite of some constraints, we have a bright future to build a industrially development economy. For this, we have to take some measures quickly. Among them, some notable measures are as follows: 1. Deregulation: Numerous regulation and distortion are needed to be minimized. Among them following are particularly needed: • Reduction of tariffs • Let market rate of interest prevails • Subsidies ought to be eliminated • The member of license and consequently rent seekers will be reduced • Reduce price distortion in general. 2. Effective training program: To create a technically and managerial by expert labor force, our education system should be oriented toward technical, professional, and vocational training. Institutional facilities for training and research should be enhanced. 3. Financial support: For effective financial support, government should take initiatives as: • The structure of retail banking forms will have to be more competitive. • Reforming the public sector financial institutions so that they can be freed from bureaucratic control and political intervention. • The use of non-bank forms of resource use such as debt equity swaps, industrial leasing and BOT( Build Operate Transfer) arrangement should be increased. • Developing a securities market snd other ways of mobilizing domestic savings. 4. Effective export promotion measures: For effective export promotion, it needs active search for an export market and the associated product diversification and equality improvement. Besides, for expansion of non traditional exports a search needs to be initiated to determine which industries will have a global comparative advantage, spot market trends and source of competition in those sectors and discover backward linkage potential of there industries. 5. Effective labor policy and modification of labor laws: The legal right and obligation of labors should be directed under labor policy made through negotiation. Government will have to be improving labor-managementgovernment relations. An important step in that direction will involve modifying the
existing labor laws to provide a framework for improving the performance of official labor institutions. 6. Complementary role of the government to private sector: Government should play a complementary role to private sector. First the purpose of the public enterprise should be to complement private sector development effort and not to substitute. Second, public involvement will have to of a transitory nature aimed solely at facilitating private sector development. 7. Developing rural industry :Special emphasis must be placed on developing and modernizing rural industry. We must develop an industrial culture in the rural Chapter – 4 Analysis and Findings The following findings are obtained from the study of overall objectives and functions of BDBL: •
BDBL has some skilled manpower such as engineer, economist, business executive, lawyers and so forth.
Sometimes inefficient allocations of resources have created a huge amount of bad debt which introduced the bank as a losing concern.
Sometimes pressure group's involvement in sanctioning loan and most of them are showing result of sick project.
There are some sick industries in the BDBL.
The main aim of BDBL is to stimulate industrialization throughout the country.
The nature of credit shows that it mainly grants term loan, working capital loan and term loan.
Good Entrepreneur are not interested to take loan from this bank Because of lengthy procedure and long time (more than three months) involved in the appraisal of project.
Lack of financial commitment on the part of the borrower, the result being the failure of mobilization of equity by them in future means they divert their equity in other purpose after getting the loan amount.
Lack of adequate, updated and accurate information from the management information department (MIS).
Inadequate attention is given to analyze risk and uncertainties associated with the projects.
Lack of co-ordination in exchange of transferring information among various banks.
Unstable policy of the government due to political changes over time.
Though BDBL's problem in financial condition, Contribution of BDBL is highest in the industrialization of Bangladesh and Contribution to the GDP is remarkable through industrialization process.
Adequate attention is given to social benefits.
If bank make the procedure of keeping up-to-date information but in some cases there some case of rescheduling the total procedure is reversed so it's high to maintain current and updated system of accounting.
The following findings are obtained from the study of Human resources Management practices of BDBL: The success of the organization depends on the effective utilization of human resources and the strength of Human resources department. The strength of HRD of BDBL are •
Maintaining good relationship with Borrowers or Sponsors.
Human Behavior is very nice.
Bangladesh Development Bank Ltd has some skill manpower such as Engineer, Economist, Business executives. Lowers and so forth. If BDBL can use his personnel sufficiently, it will be profitable in future.
Although there are few strength of Human Resource Department of BDBL, but it does not contribute significant role to the bank because of existence of the following problems: •
Absenteeism of employees is a major concern for BDBL.
HR Management position is not strong as takes to much time for a project as a result the project losses its values
The human resources Management department recommends the training department only their regular work. But only regular work does not ensure the proper utilization of organizational researches. The moral learning is also necessary for ensuring their duties.
There is a few chance of promotion. The workers are in the same position or a long time. There is no promotion for them. They work traditionally not take the job as a challenge.
One important problem of BDBL is that, it is a decentralized origination and each department is responsible for particular activities but they have lack of coordination to achieve the central objectives. I think rules and regulations are sufficient but problem and controversial area are continuing till now.
Some workers are morally weak. Sometime they do not perform their duty properly. They do work which do they not authorize in some cases.
There is no team speed of the workforce. They work as usual. Sometime, the important file and work are in freeze if any officer does not give importance on it.
In BDBL the authorized 3rd and 4th class workers number is 975 But actual workers are only 757.The vacant post is 118. As a result the lake of workforce, all the activities are
performed in delay. Some time the officers have to does the vacant ports work which ruin their important time. •
The old workers do their performance according to the old model. So there is no radical change of the work. If the new fresh workers are appointed, the face of the bank will be changed.
The Bank does not strictly follow service rules; many workers and officer come in office not due time. Few actions are taken for them.
The trade union of the BDBL is politically elected. As a result the skill workers sometime deprive their promotion and facilities. Sometime only political reason one worker in transferred from department to another department.
Some department workers are very busy. Some department workers are relaxed. They have no work.
No team coordination between employees.
Recruitment and selection policies of BDBL are not appropriate because the govt. and other external forces.
Chapter - 5 Conclusion and Recommendations Conclusion Recommendations References List of Acronyms Appendix Conclusion and Recommendations 5.1 Conclusion Bangladesh Development Bank Ltd (BDBL) is a bank with great vision for the development of industrial factor of Bangladesh. BDBL provides loan to the industries, which have great future prospects. Their HR policies and practices are different from the private organization. It can play a very important in this respect, as it is the prime development financing institution of the country. But it is seen that fails to achieve the desired result out of these project and incur losses every year. BDBL has a code of conduct for successful implementing HR policies for the employees and specific issues are highlighted about the Human Resources and different related aspects but it does
not have any monitoring activities to find out whether the member of the management deal with employees according to their rules and regulations.
I believe and hope that this report will offer a number of benefits to improve and update the Human Resources practice for its smooth operation and will cooperate in redesigning the system and atmosphere of the department. Political involvement should be strictly prohibited and a strong and organized HR function should be implemented. Not only this all the official should follow the rules and regulations imposed on them. Besides there is a standard Human Resources Practices in BDBL. They have to maintain the rules and regulation of the Govt. have much control, so they practice the area of Human Resource in a unique way. 5.2 Recommendations On the basis of my findings, I would like to suggest the followings to mitigate their problems: •
Political pressure should be lowered in sanctioning loan for a project.
Coordination should be may among the various department
Sanctioning loan to the sponsor's carefully through proper m3king feasibility report.
Experienced and motivated entrepreneur should be allowed for sanctioning the loan.
Both primary secondary database of the BDBL should be improved and strengthen.
The project which is profitable should be identified and sanctioned loan to those projects.
Computer system has already been installed but more internet facilities to be introduced.
Preserving of documents of different departments to be kept in separately.
The policy made for implementation to be made until project is completed.
Mortgaged of loan should be sufficient to recover the sanctioned money.
Risk adjusted discount rate method, Program evaluation and overview technique and probability analysis should be introduced.
More emphasis on the effect of a project to measure socio-economic cost and benefit should be taken into consideration.
Responsibility should be established to all according to their involvement in appraisal of project.
Market research institution should be established for proper market survey.
For effective Human Resources Management practices, the following issues should be considered by the respective authorities: •
Recruiting and selection process should be controlled by authorities of BSB.
There is another problem is that the managing director of BDBL is changed frequently which creates problems to implement the long term policies. So Managing director should be appointed at least five years.
Employees are not motivated because there is no motivational techniques and poor incentive benefit. So facilities should be enhanced and opportunity should be given as like Bangladesh Bank.
Recruitment and selection policy of BDBL are not appropriate because it is done by the govt. and no BDBL' authorities involve to the selection process.
Independent body is required to evaluate the performance of employee.
Training arrangement is required to enhance arranging more training facilities. Training supervisor should be smart who can able to give dynamic and timely training to the employees.
Promotion should be given not only on the basis of seniority but also performance basis.
Govt. interfere should be reduced from this bank.
References Books: 1. Ricky W. Griffin, “Management”, 9th Edition 2. Some information about HR of BDBL from Md. Abdul Matin Assistant General Manager of Human Resources. 3. Several Booklets & Newspapers, Leaflets, Brochures, Synopsizes etc from BDBL. 4. David A. DeCenzo & Stephen P. Robbins (1999), “Personnel/Human Resource Management���, Third edition, Prentice Hall: London, pp-156-159. 5. Lesikar and Flatley, (2004) , Basic Business Communication, Ninth Mcgraw Hill, pp-120-132. Websites:
6. http:// www.bdbl.com.bd 7. http://bdbl.com/company_profile.php 8. human resource manual from BDBL
List of Acronyms BSB: Bangladesh Development Bank Ltd HRM: Human Resource Management HR: Human Resources Dept: Department
Mgt.: Management LOD: Loan Operation Department CAD: Central Accounts Department PID: Project Implementation Department PRO: Project Rehabilitation Department CRD: Central Recovery Department BSQF: Bank Standard Questionnaire Form HRD: Human Resource Department Appendix Deposit mobilization is considered a vital source of fund for commercial banking. Monthly position of deposit, section, disbursement & recovery in 2011 (till 30-sept-2011) Deposit
FDR STD SB Others Total
504 153 15652 4041 20350
2264509 933583 397515 302918 3898525
Disbursement LT SME Others Total
Recovery 188634 62930 286828 538392
LT SME Others Total
865959 4135 191575 1061669
Bangladesh Development Bank Limited Highlights on the overall activities of the bank for the year 2010 Sl
Amount in Taka
Paid up capital
Total loans & advance
Total contingent commitments
Credit deposit ratio (%)
Percentage of classified loans against total loans and advances
Profit after tax and provision
Amount of classified loans during current year
Provisions kept against classified loans
Cost of fund (%)
Interest earning assets
Non- Interest earning assets
Return on investment (%)
Return on assets (%)
Income from investment
Earning per share
Net income per share
Price earning ratio
Credit Rating report
In compliance with the circular of Bangladesh Bank , Bangladesh Development Bank Ltd. appointed Credit Rating Information & Services limited (CRISL) to evaluate the credit Rating of the Bank . The Credit Rating of the Bank for the year 2010 was as follows:Long Term A+
Short Term ST-2
Date of Rating July21,2011
*A+ indicates Adequate safety. *ST-2 indicates High Grade. The CRISL has considered the following quantitative and qualitative factors of the Bank for Rating purpose:A. Quantitative Factors: Capital Adequacy Assets quality Funding & Leverage Liquidity & Requirements Earning Quality Market Sensibility
B. Qualitative Factors Ownership Management Quality Risk Management Compliance with the Statutory Reserve Accounting Quality Area and size of Market