Dbbl

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Global economic and financial crisis was showing sign of recovery in 2010. Bangladesh Bank

pursued supportive monetary policy seeking to maintain adequate credit flow for sustained high

real output while containing inflation within tolerable moderate levels.

During most of the year interest rates on deposits declined due to excess liquidity in the market.

The interest rates on loans were also lower during 2010. At the end of the year, however, interest

on deposits started rising following sudden liquidity crises trigerred by higher CRR requirement

and lower REPO facility provided by Bangladesh Bank. Foreign exchange market of the country

was relatively table in 2010. However, at the end of the year, there was pressure on forex market,

the reasons may be attributed to slower remittance flow and higher import payments following

increase of prices of some major commodities in international market.

From the onset, the focus of the bank has been financing high-growth manufacturing industries

in Bangladesh. The rationale being that the manufacturing sector exports Bangladeshi products

worldwide. Thereby financing and concentrating on this sector allows Bangladesh to achieve the

desired growth. DBBL's other focus is Corporate Social Responsiblity (CSR). Even though CSR

is now a cliche, DBBL is the pioneer in this sector and termed the contribution simply as 'social

responsiblity'. Due to its investment in this sector, DBBL has become one of the largest donors

and the largest bank donor in Bangladesh. The bank has won numerous international awards

because of its unique approach as a socially conscious bank.

DBBL was the first bank in Bangladesh to be fully automated. The Electronic-Banking Division

was established in 2002 to undertake rapid automation and bring modern banking services into

this field. Full automation was completed in 2003 and hereby introduced plastic money to the

Bangladeshi masses. DBBL also operates the nation's largest ATM fleet and in the process

drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the low profitability

route for this sector has surprised many critics. DBBL had pursued the mass automation in

Banking as a CSR activity and never intended profitability from this sector. As a result it now

provides unrivaled banking technology offerings to all its customers. Because of this mindset,

most local banks have joined DBBL's banking infrastructure instead of pursuing their own.

1.1 Introduction

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Preparing report in each semester is a mandatory item of BBA program, in BUBT. From where

this report is done. This is a Group report. We have been working at together for collecting data

and information for preparing this report from August 24, 2011 to September 02, 2011 and

supervised by experienced executives and officers of Dutch-Bangla Bank to have general idea

about the organizational culture of a private organization in Bangladesh. The standard procedure

for the long, formal report is followed here as par our teacher’s instruction.

In the Banking Industry, Dutch Bangla Bank Ltd. is trying to give the better service and proper

securities to its customers. But for running a business like Banking, it always faces the economic

force, which is really unavoidable. Sometime this economic forces force the Bank to take change

in their regular activities. By this report we will familiar to those possible change and strategies

which a Bank may take. Some recommendations are given in the recommendation part of this

report, which may help to any Bank to take proper decision.

This report has been asked to prepare for analyzing Environment influence on Bank industry, A

study on Economic force. We are focusing Dutch Bangla Bank Ltd (DBBL). This report is

covered by the different information of their Annual report of 2010 and 2009. We also collect

some important current news from their website and some theoretical information from different

kinds of Books (list is given in reference section). Hopefully this report can cover the

Environmental influence of Dutch Bangle Bank Ltd.

1.4 Scope of the Report

1.2 Background of the Report

1.3 Significance

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1.5.1. Broad/ General:

The major objective of this report is to identify & analyses for analyzing Environment influence

on Bank industry, a study on Economic force

1.5.2. Specific objectives:

“Is Dutch Bangla Bank Ltd. an Emerging Company In the Banking Sector?”

To know the operation system of Dutch Bangla Bank Ltd (DBBL) and to give an

idea about how can manage economic force.

To know how economic policy change the organizational environment

To evaluate DBBL’s competency to adopt with new policy/economic force.

To evaluate the benefit or loss of DBBL’s for economic force.

To show how the financial condition of DBBL is affected by economic force

Methodology can properly refer to the theoretical analysis of the methods appropriate to the field

of study or to the body of the methods and principles particular to a bench of knowledge. The

methodology used by the study requires a systematic way from selection of the topic to

preparation of the report. The overall process of methodology given in the followings:

1.6.1. Type of research: Both Exploratory and Descriptive research methods are used in

here .

Research design:

The purpose of the study is to investigate overall scenarios about contributions,

potentiality, profitability and risks of DBBL which is created for economic force. Therefore, both

exploratory and descriptive research approach are selected.

1.5 Objectives

1.6 Methodology

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1.6.2. Sources of Data:

This report is based on both primary & secondary source of information. For

theoretical development of this research paper the data has been collected from the various

sources like different publications, library sources, books, articles, etc.

1.6.2.1. Primary: Customer survey, observation, in-depth interview were conducted

to collect primary data.

1.6.2.2. Secondary: Annual Report 2010, Annual Report 2009, and visiting the

DBBL’s website “www.dutchbanglabank.com” to collect secondary data.

1.6.3. Data collection procedure:

1.6.3.1. Secondary: The secondary data collection procedure includes the followings:

Relevant documents that the officers concerned provide.

Prospectus, Publications, Brochures, Magazine and newspaper.

Internal records and vast number of data collected from the internet and Company

Website.

1.6.3.2. Primary: The primary data collection procedure includes the followings:

Discussion with officers of Dutch-Bangle Bank.

Observation of practical work of the responsible officers of Dutch-Bangle Bank.

Discussion with supervisor.

Face to face conversation with the Customer Group.

http://www.dutchbanglabank.com/

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Researcher administrated type of well structure questionnaire is used for primary data collection. Both

open ended & close-ended questions are included. Average time for conducting individual questionnaire

survey was 20 minutes.

1.7.1 Size: 2 page an a4 size paper.

1.7.2. Administer time: Average 20 minutes per questionnaire.

1.7.3. Type: Both close ended and open ended questions are used in the questionnaire.

1.8.1. Target Population: The upper level employee of every department is our targeted population

1.8.2. Sample element/units: Individual manager and executive (finance/marketing etc.)

1.8.3. Sample size: 10 sample size. 2 form Finance department, 2 from marketing department, 2 from

HRM department, 4 forms IT department.

1.8.4. Sample Frame: No well structured sampling frame was found.

1.8.5. Sampling Method: Non probability convenience sampling method (Mall intercept) & non

probability judgmental sampling method was used for survey officials & clients of Duch Bangla Bank

Ltd.

1.7 Questionnaire design

1.8 Sampling plan

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Analyses the performance is very sensitive and competitive by its nature. Therefore, data of this report

may not available. The interviewees may not disclose accurate facts and figures about foreign exchange

and other activities. However, we faced the following problems during the study.

Insufficiency of valuable data and information

Lack of proper books, journals etc.

Lack of experience

Lack of time and resources.

Lack of perfect co-operation.

Lack of time for conducting a large scale survey.

Lack of customer co-operation.

The research only covers few of the customers of Dutch Bangla Bank Ltd in Dhaka city.

Best efforts have been made to make the report analytical, information and comprehensive one. In spite of

much better environment, we had to face various limitations those were uncontrollable. DBBL covers a

wide area. By this limited time it was not possible for us to know the all activities of the DBBL. We just

observed what they were doing and how. Many procedural matters were written from own observations

which may also vary from person to person.

1.9 Limitations of the Report

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FROM THE DESK OF THE MANAGING DIRECTOR

OVERVIEW

It is gratified for me to record my observations on the performance of the Bank for the year

2010. It was another successful year for DBBL. At this juncture of passing 15 years of successful

operation, I sincerely offer my heartfelt gratitude and congratulate our valued clients, patrons,

wellwishers and honorable shareholders for their active support, co-operation and strong

association with us without which it would not be possible for us to take the Bank to the stage of

today's stratum.

HIGHER BUSINESS AND PROFIT GROWTH DESPITE COMPETITIVE

MARKET CONDITION

DBBL was successful in achieving substantial growth in business and profit during the year

under review. The deposits of the Bank increased by 22.8%, loans & advances increased by

39.8%, while import and export business increased by 65.1% and 78.6% respectively. During the

year under review, operating profit increased by 55.7% and net profit after tax increased by

76.0% from Taka 1,137.7 million to Taka 2,002.3 million. Lower cost of fund resulting from

improved deposit mix, higher net interest income, higher non-interest income mainly from fees

and exchange gains from foreign trade business, income from IT & card services and, other

value added services contributed to higher profit despite higher investment cost in HR and IT

platform, and expansion of Branch, Fast Track and ATM network.

POTENTIAL FOR FUTURE GROWTH

Though the expenses in HR, IT network, expansion of distribution network through branches,

establishment of ATM booths and Fast Tracks apparently contained our profit growth in 2010,

however it will substantially improve our capacity to deliver unique value to our customers by

improving productivity, distribution and communication network and strengthening IT platform

to provide faster information and customer service particularly for SME and retail customers.

STATUS OF DEPOSIT AND ADVANCES

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In 2010, all out efforts were continued to diversify and improve the deposit mix to bring down

weighted average cost of fund. To increase number of deposit accounts, intensified campaign

launched earlier continued in 2010 to open new accounts. The campaign was strongly supported

by expanding branch and ATM network, introducing Fast Track and increasing promotional

activities. SME and

Retail banking divisions were further reinforced in 2010 to expand business in both retail

deposits and retail/SME lending. Risk management system was further streamlined to improve

quality of assets and protect long term interest of depositors and shareholders.

The deposit grew by Taka 15,456.2 million (22.8%) in 2010 from Taka 67,788.5 million to Taka

83,244.8 million. Deposit mix improved significantly. As a result, weighted average cost of fund

declined to 4.41% in 2010 from 6.53% of the previous year. Loans and advances stood at Taka

67,657.7 million

(39.8%) at the end of 2010 from Taka 48,411.0 million in 2009. The Bank continued to grow and

diversify its portfolio in 2010 to have a diversified client base and portfolio distributed across the

sectors to reduce client specific and industry specific concentration and to reduce overall

portfolio risk.

Considering future market direction and to capitalize on our robust IT platform and strongest

ATM and

Fast Track network, a number of retail products and

SME products aimed at specific target groups were launched in 2010 to augment fee income and

improve yield and spread on total portfolio. Because of regulatory restrictions and market

competitions, weighted average rate of return on loans & advances decreased to 11.55% in 2010

from 12.96% in 2009.

Classified loan as a percentage of portfolio remain unchanged at 2.46% as of 31 December 2010.

However, full provision was made against these classified loans.

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STRONG CAPITAL ADEQUACY RATIO MAINTAINED

DBBL's regulatory capital as on December 31, 2010 stood at Taka 9,125.9 million. As on

December 31,\ 2010, capital adequacy ratio was 9.64% under Basel II, as against Bangladesh

Bank's minimum requirement of 9.00%.

CUSTOMER SERVICE AND ONLINE BANKING

DBBL continued to be a customer focused, need based and solution-driven Bank. Our products

and services are strongly supported by IT infrastructure and online banking facilities, which are

upgraded and expanded on a continuous basis. Four hundred (400) units of ATM were installed

in 2010 to increase the number of ATM units to 1,100 at the end of 2010 along with 50 new Fast

Tracks. We are providing any branch anytime banking services to our clients 24 hours a day and

365 days a year.

SOCIAL CAUSE

Dutch-Bangla Bank Limited dreams of better Bangladesh. It believes that "Profits alone" do not

hold a central focus in the Bank's operation; because "man does not live by bread and butter

alone". With this mission, Dutch-Bangla Bank Limited believes that only profit can not be the

last word for any business entity as neither society without business nor business without society

is likely to bring about any sort of development in true sense. From a common perspective,

Social Cause

Programs may be defined as an instrument to make business more committed towards social

needs and national development through ethical, legal and commercial conduct. DBBL has

always aspired to the highest standards of conduct, recognizes its wider obligation to society and

believes that there is a strong link between Social Cause Programs and long term success. DBBL

since its inception was active in various social activities which increased manifold over the past

few years.

OUTLOOK

Progressively, globalization is forcing countries and businesses operating within them to re-

evaluate their comparative advantages and to adjust to a world in which emerging markets

compete not only in terms of cost but also in skills and technology. The globalization of the

services industry, spurred on by new technology and the rapid fall in communication cost, will

afford huge opportunities but also pose significant challenges to many areas of economic

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activities, including financial services. The global financial crises that originated in 2008 is

beginning to stabilize showing the signs of recovery.

We will remain cautious about the development in global and Bangladesh economy.

Basing on its achievements, DBBL's priority for the next year is to continue to implement its

growth strategy with particular emphasis on improving deposit mix and reducing cost of fund. It

will achieve this by being distinctive, re-enforcing its brand values of trust and integrity in all its

dealings with customers. The strategy will be strongly supported by best IT and ATM network of

the country. It builds on DBBL's strength and it addresses the areas where further improvement

is considered both desirable and attainable.

DBBL aims to be the country's leading commercial Bank. In this context, leading means

preferred, admired and dynamic, and being recognized for giving the customer a fair deal. DBBL

will always strive to secure and maintain a leading position in the country. DBBL will

concentrate on growing earnings over the long term at a rate which will placid favorably when

compared with its peer banks. It will also focus on investing in its delivery platform, its

technology and its people.

HUMAN RESOURCES AND ORGANIZATIONAL DEVELOPMENT

In support of its strategy, Dutch-Bangla Bank Limited focuses on attracting, developing and

motivating the very best individuals and ons encouraging talent internally. DBBL continues to

endeavor to ensure that employees' engagement with the business is maximized as this is

beneficial to shareholders, colleagues and customers alike.

DBBL recruits people from a broad cross-section of society. A high quality and competent

human resource is crucial to continued growth and success of the Bank, which can be achieved

by improving skill, knowledge and productivity of the employees. Keeping this in view, we

emphasize on the human resources development through imparting trainings both in home

country as well as aboard. In order to provide better and faster services to the clients by a team of

skilled work forces, we are offering healthy working environments and competitive

compensation package.

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KEY ISSUES AND CHALLENGES IN 2011

Our key objective in 2011 is to achieve strong growth in business comprising deposit, loans and

advances, import and export driven by better and faster customer services. Particular emphasis

will be given on improving deposit mix and reducing cost of fund by increasing number of new

accounts.

Profitability will be increased by business growth and by increasing productivity of resources.

Customer service will be improved by upgrading our online banking system, expanding

distribution network and offering new products to provide a unique value to our customers.

Sincere thanks and heartfelt gratitude are due to our respected shareholders, valued customers,

patrons and well-wishers for their continued wholehearted supports and advices in all our

development programs. We should like to pay our special thanks and gratitude to the

Government Agencies, Bangladesh Bank, Securities and

Exchange Commission, Office of the Registrar of Joint Stock Companies and Firms, Dhaka

Stock

Exchange and Chittagong Stock Exchange for their co-operation and support for the

development of the Bank. The Management is expressing its sincere thanks and gratitude to the

Members of the Board of Directors for their prudent policy guidelines in achieving the Bank's

cherished goal. Thanks to my colleagues of all levels for their sincere efforts in uplifting the

Bank's image by rendering distinctive services to our valued clients.

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Dutch-Bangla Bank Limited (DBBL) is a Bangladeshi-European private joint venture scheduled

commercial bank, incorporated in Bangladesh in the year 1995. This public limited bank

commenced its formal operation from June 3, 1996. The Netherlands Development Finance

Company (FMO) of the Netherlands is the international co-sponsor of this bank with 30% equity

holding. Out of the rest 70%, 60% equity has been provided by prominent local entrepreneurs

and industrialists and the rest 10% shares is the public issue. During the initial operating year

(1996-1997), the bank received skill augmentation technical assistance from the Amro Bank of

the Netherlands (ABN). Starting with one branch in Dhaka, DBBL now has expanded to twenty

four branches including thirteen branches outside of the capital. To provide client services all

over Bangladesh, it has established a wide correspondent banking relationship with a number of

local banks, and in order to facilitate international trade transactions, it has arranged

correspondent relationship with large number of international banks which are active across the

globe. Moreover, DBBL has introduced ATM cards and Internet banking to ensure the

customer’s freedom to choose his/her own banking hours.

Dutch-Bangla Bank started operation is Bangladesh's first joint venture bank. The bank was an

effort by local shareholders spearheaded by M Sahabuddin Ahmed (founder chairman) and the

Dutch company FMO.

From the onset, the focus of the bank has been financing high-growth manufacturing industries

in Bangladesh. The rationale being that the manufacturing sector exports Bangladeshi products

worldwide. Thereby financing and concentrating on this sector allows Bangladesh to achieve the

desired growth. DBBL's other focus is Corporate Social Responsibility (CSR). Even though CSR

is now a cliche, DBBL is the pioneer in this sector and termed the contribution simply as 'social

responsibility'. Due to its investment in this sector, DBBL has become one of the largest donors

and the largest bank donor in Bangladesh. The bank has won numerous international awards

because of its unique approach as a socially conscious bank.

DBBL was the first bank in Bangladesh to be fully automated. The Electronic-Banking Division

was established in 2002 to undertake rapid automation and bring modern banking services into

this field. Full automation was completed in 2003 and hereby introduced plastic money to the

2.1 About the company

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Bangladeshi masses. DBBL also operates the nation's largest ATM fleet and in the process

drastically cut consumer costs and fees by 80%. Moreover, DBBL choosing the low profitability

route for this sector has surprised many critics. DBBL had pursued the mass automation in

Banking as a CSR activity and never intended profitability from this sector. As a result it now

provides unrivaled banking technology offerings to all its customers

Dutch-Bangla bank dreams of better Bangladesh, where arts and letters, sports and athletics,

music and entertainment, science and education, health and hygiene, clean and pollution free

environment and above all a society based on morality and ethics make all our lives worth living.

DBBL’s essence and ethos rest on a cosmos of creativity and the marvel – magic of a charmed

life that abounds with spirit of life and adventures that contributes towards human development.

Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a

commitment to social responsibility. Profits alone do not hold a central focus in the bank’s

operation, because man does not live by bread and butter alone.

Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and

satisfaction and to become their first choice in banking. Taking cue form its pool esteemed

clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and

epitomizes its vaunted marques “Your Trusted Partner”.

2.2 Vision

2.3 Mission

2.4 Core Objectives

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THE BOARD CHAIRMAN Mr. Zahid Hossain Khan

DIRECTORS Mr. Sayem Ahmed Mrs. Frey-Tang Yuen Mei, Barbara : Nominee of Ecotrim Hong Kong Limited

Mr. Md. Fakhrul Islam : Elected from General Shareholders' Group Dr. Irshad Kamal Khan : Independent Director

Dr. Syed Fakhrul Ameen : Director from the Depositors Mr. Chowdhury M. Ashraf Hossain : Director from the Depositors Mr. K. Shamshi Tabrez : Ex-officio Director (Managing Director)

THE COMMITTEES OF THE BOARD

1. Executive Committee

Mr. Sayem Ahmed : Chairman Mr. Zahid Hossain Khan : Member

Mr. K. Shamshi Tabrez : Member 2. Audit Committee

Mr. Zahid Hossain Khan : Chairman

Mr. Sayem Ahmed : Member Dr. Irshad Kamal Khan : Member

Chairman, Dutch-Bangla Bank Foundation & Founder Chairman, Dutch-Bangla Bank

Mr. M. Sahabuddin Ahmed

2.5 The Board and its Committees

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Managing Director

2.6 Organogram of DBBL

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Savings, investments, employment generation, productions, distribution and consumptions are

essential part of any economic system. The Bank being a financial intermediary plays a

significant role in this process by mobilizing savings & other resources, allocating such resources

to productive investments, local & international trades and consumptions. In the process the

Bank is directly or indirectly creating a lot of wealth by accelerating economic activities &

growth. By offering its unique products & services the Bank is engaged in maximizing savings,

investments, productions, trading, employment, consumptions etc. to maximize economic growth

and welfare of the society. Therefore banking company is holding a key position in economic

and social development of a country.

DBBL is a corporate citizen. It cannot act on its own without its stakeholders. The stakeholders

as a whole help, direct and monitor the Bank to perform its operations in an effective way to

create and maximize value for the economy and society. Shareholders provide the vital equity

capital, depositors & lenders put their money in the Bank, borrowers take the credits for

production, trading or consumptions, employees put their services to serve the customers, and

government, Bangladesh Bank and Securities and Exchange Commission provide legal &

regulatory framework, infrastructure, economic & business environment etc. to ensure smooth

operations of banking activities with transparency and accountability.

With the support & resources from various stakeholders, DBBL conducts its businesses to

provide services to the customers and society at large and in the process creates and maximizes

value for all its stakeholders in a fair, transparent and ethical way. Maximization of profit cannot

be the only objective of the Bank, rather maximizing benefits & value for all stakeholders in a

fair and balanced way thereby maximizing welfare of the economy & society as a whole is the

objective of DBBL. However, profit is also important to give satisfactory returns to all the

stakeholders and to ensure sustainable operations, growth and longterm solvency of the Bank

which in turns enable the Bank to contribute in a greater way to the economy & society.

2.7 Economic contribution

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As DBBL is dependent on its stakeholders to continue its operation and wealth creation

activities, therefore, wealth created by the Bank is also distributed to its various stakeholders.

Shareholders get dividends, depositors get interest, employees receive salaries and government

gets tax, VAT etc.

Measures taken by DBBL to maximize value for its stakeholders and to increase its contribution

to the economy & society in a sustainable way. DBBL as a responsible citizen has taken

effective measures to sustain its operations in a sustainable way thereby to increase its

contribution to the economy & society. DBBL has undertaken due process, procedures and

systems in compliance with best practices in corporate governance, risk management, regulatory

requirements, environmental issues, staff welfare, customer services and business practices to

strengthen its ability to serve the stakeholders and society increasingly in a greater way.

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2.8 Performance Highlights

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Listing on Stock Exchanges

DBBL is offering Products and Services in three main forms:

Deposit

Term Deposit

Loan and Advances

1. DEPOSIT

Under Deposit the following products are available:

Savings Deposit Account

Current Deposit Account

Short Term Deposit Account

Resident Foreign Currency Deposit

Foreign Currency Deposit xi

Convertible Taka Account

Non-Convertible Taka Account

Exporter's FC Deposit (FBPAR)

Current Deposit Account-Bank

Short Term Deposit Account-Bank

2.9 Useful information of DBBL

2.10 Products and Services of DBBL

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2. TERM DEPOSIT

Under Term Deposit the following products are offered:

Monthly Term Deposit

Term Deposit 3 Months




Term Deposit 24 Months 1 Year Payout


Term Deposit 36 Months 6 Months Payout

Term Deposit 36 Months 1 Year Payout

Term Deposit above 36 Months

Monthly Term Deposit Banks

Term Deposit 3 Months Banks



1 Month TD NFCD

Months TD NFCD

6 Months TD NFCD

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3. LOAN AND ADVANCE

The followings are known as Loan and Advances products:

Loan against Trust Receipt

Transport Loan

Consumer Credit Scheme

Real Estate Loan (Res. & Comm.)

Loan against Accepted Bill

Industrial Term Loan

Agricultural Term Loan

Lease Finance

Other Term Loan

FMO Local Currency Loan for SME

FMO Foreign Currency Loan

Cash Credit (Hypothecation)

Small Shop Financing Scheme

Overdraft

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DBBL'S IT INFRASTRUCTURE: PRESENT AND FUTURE

Since the start of its operation, under the vision of Mr. M. Sahabuddin Ahmed -the founder

chairman of the Bank, Dutch-Bangla Bank has been continuously striving towards bringing

world-class technology driven banking services, and conveniences to its customers. As a result,

DBBL is the first and only Bank in Bangladesh to invest more than Taka 2 billion in developing

the largest ICT infrastructure in the banking sector of the Country.

OVERVIEW

DBBL owns and operates the largest ATM network of the Country comprising of 700 ATMs as

of December 2009. The Bank is also the leader in POS terminal and internet banking services.

As a technology driven Bank, DBBL has implemented world reputed online banking software at

all its 79 branches and 10 SME centers. DBBL also provides the following ancillary services:

Any Branch banking;

Online ATM/POS service;

Internet banking service; and

SMS and Alert banking service.

The Bank also implemented Online Synchronous Disaster Recovery Site (DRS) to provide

uninterrupted and reliable banking convenience to the valued customers. DBBL's Synchronous

DRS is the first of its kind in Bangladesh. This makes DBBL the only Bank in the Country that

can best responds to natural disaster recovery.

MOBILE BANKING

To provide banking services to the remote customers of the Country, DBBL plans to reach them

by phone. All unbanked customers having a phone number will be able to get basic banking

services like cash withdrawal, cash deposit, loans, bill payment, local & foreign remittance etc.

from all over the Country very cheaply. Even all Government payments, corporate salaries can

be made through this service almost at no cost. Just like the DBBL ATM network, DBBL's

version of mobile banking will be affordable, secure and ubiquitous. It is centered around

providing the majority of the rural population access to a wide array of modern banking services.

2.11 Automation

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The mobile banking system will be an 'open' system (similar to its ATM network), which will

give third party service providers unhindered access. DBBL's current system already has the

capability of providing mobile banking services. The Bank is in the process of obtaining

necessary permissions from regulatory bodies and will launch a nationwide mobile-banking

revolution within 1 month of receiving the regulatory permission.

BANGLADESH AUTOMATED CLEARING HOUSE (BACH)

Bangladesh Bank is going to introduce first paperless Automated Clearing House in the Country

which is called as Bangladesh Automated Cheque Processing System (BACPS) and Bangladesh

Electronic Fund Transfer Network (BEFTN). Both the systems will be implemented under

Bangladesh Automated Clearing House (BACH) project. These projects are being implemented

under several reform measures taken by Bangladesh Bank to improve the safety and efficiency in

the payment system. DBBL has always been a leader in complying to the requirements of the

projects, like, cheque personalization, Magnetic Ink Character Recognition (MICR) encoded

cheque book issue, System Integration Test (SIT) with Bangladesh Bank's live & DR sites.

DBBL was the first Bank to conduct a successful live test with Bangladesh Bank. The project is

progressing smoothly and expected start full fledged operation soon.

NEXT-GENERATION CARDS

All the distribution channels are EMV-compliant. The EMV security policy has been introduced

by Europay, MasterCard and VISA jointly to protect capturing card data and duplication of a

card. DBBL is the first Bank in Bangladesh to ensure such security for our valued customers.

DBBL has also introduced EMV compliant chip based Credit Cards for the first time in

Bangladesh -which is the most secure card in the world. The ATM / POS network of the DBBL

accepts the following cards: EMV compliant chip cards of all the banks in the world; Non-EMV

Visa & MasterCard cards of all the banks in the world; DBBL's proprietary cards (Nexus); and

Proprietary cards of all the partner banks in Bangladesh.

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ATM

DBBL has put its level of innovation and standard of customer support to a new height by setting

another milestone in the history of banking sector by adding two units of Mobile ATM booths to

its existing ATM network. DBBL has become the first Bank in the Country to provide such

unique service and convenience to the customers. The DBBL Mobile ATM Booth, which is

outfitted in a custom-made van provides free anywhere anytime banking services in short notice.

DBBL has allowed other banks to join its ATM/POS network. Partner banks are charged a

subsidized Tk.10 by DBBL (but partner banks may levy additional charges for end-consumer).

Customers of the following partner banks in Bangladesh are enjoying access to the DBBL

ATM/POS network:

-Mutual Trust Bank Limited

- Commercial Bank of Ceylon

- Standard Chartered Bank

- Bank Asia Limited

- National Credit & Commerce Bank Limited

- United Commercial Bank Limited

- South East Bank Limited

- The Prime Bank Limited

- The City Bank Limited

- First Security Bank Limited

- Mercantile Bank Limited

- Trust Bank Limited

- Jamuna Bank Limited

- Shahjalal Islami Bank Limited

- Janata Bank Limited

- Sonali Bank Limited

- National Bank Limited

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GREEN IT

Dutch-Bangla Bank has always been careful about environment. DBBL has taken initiatives to

make its IT infrastructure a "Green IT". Environment friendly options like virtualization, power

management and proper recycling habits towards certifying our data centers as "Green" are under

process.

CALL CENTER

Considering the growing number of customers, card holders & transactions, DBBL has taken

steps to setup a Call Center. It will be a world renowned Cisco hardware-based call center

comprising of all the services a call center can provide, e.g, Interactive Voice Response (IVR) by

virtue of which the customer will be able to choose his options using the keypads of a touch or

cell phone and listen to the responses related to his account or card or transactions from the

system. The hardware has already been setup. At present, the integration with the existing

systems are in progress.

UP GRADATION OF CORE BANKING SYSTEMS & ATM SWITCHING

SYSTEMS

The number of branches of DBBL is growing steadily every year. The customer base is growing

everyday. To cope with the huge volume of transaction and provide the customers the best

services using latest technology the Bank has decided to upgrade its core banking system and

other related software & hardware. The Board of Directors has already approved required budget

and international tender has already been floated. The evaluation of the submitted proposals are

under process.

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DBBL'S FUTURE IT PROJECTS

ATM EXPANSION

Dutch-Bangla Bank has planned to install another 1000 ATMs by the end of 2010 mainly to

cover rural areas.

REORGANIZATION AND REDESIGN OF DELIVERY CHANNELS

Dutch-Bangla Bank is redesigning the delivery channels to make the entire system more efficient

and faster for the end consumers. After the redesign, clients will experience more faster and

more personalized service.

E-PAYMENT GATEWAY

A payment gateway is an essential part of an Online Payment System. It is

necessary in order to process all of the following inter-bank on-line transactions:

1. Account-to-account transfer transactions or debit / credit card transactions on the web for

on-line merchant payment against purchase of goods and services;

2. Inter-bank ATM/POS transactions using debit / credit cards; and

3. Inter-bank Internet or SMS banking transactions for fund transfer (instant remittance) and

utility bill payment. Since there is no such system in Bangladesh, Dutch-Bangla Bank is actively

considering to implement a payment gateway to facilitate the above e-commerce transactions.

This will be the first payment gateway setup in the Country to drive e-commerce transactions.

27

IMPLEMENTATION OF MULTI-FACTOR AUTHENTICATION FOR

INTERNET BANKING

Internet banking has never taken off in Bangladesh due to an absence of identity verification.

DBBL's EMV compliant system allows accurate identity verification to allow full-fledged

internet banking services. DBBL will shortly implement this solution. DBBL's IT infrastructure

is working like the arteries of a human body. The effective, robust and reliable IT infrastructure

is ensuring the strong health for the Bank. DBBL is working round the clock without any

downtime, offering its customers the enjoyment of banking services. Banking has never been so

easy, comfortable, enjoyable, and yet secure. DBBL is relentlessly striving every moment to

facilitate its customers with the most advanced and secure technological environment. DBBL is

undertaking new projects in the field of automation to help meet customers’ needs.

28

Savings, investments, employment generation, productions, distribution and consumptions are

essential part of any economic system. The Bank being a financial intermediary plays a

significant role in this process by mobilizing savings & other resources, allocating such resources

to productive investments, local & international trades and consumptions. In the process the

Bank is directly or indirectly creating a lot of wealth by accelerating economic activities &

growth. By offering its unique products & services the Bank is engaged in maximizing savings,

investments, productions, trading, employment, consumptions etc. to maximize economic growth

and welfare of the society. Therefore banking company is holding a key position in economic

and social development of a country. DBBL is a corporate citizen. It cannot act on its own

without its stakeholders. The stakeholders as a whole help, direct and monitor the Bank to

perform its operations in an effective way to create and maximize value for the economy and

society. Shareholders provide the vital equity capital, depositors & lenders put their money in the

Bank, borrowers take the credits for production, trading or consumptions, employees put their

services to serve the customers, and government, Bangladesh Bank and Securities and Exchange

Commission provide legal & regulatory framework , infrastructure, economic & business

environment etc. to ensure smooth operations of banking activities with transparency and

accountability. With the support & resources from various stakeholders, DBBL conducts its

businesses to provide services to the customers and society at large and in the process creates and

maximizes value for all its stakeholders in a fair, transparent and ethical way. Maximization of

profit cannot be the only objective of the Bank, rather maximizing benefits & value for all

stakeholders in a fair and balanced way thereby maximizing welfare of the economy & society as

a whole is the objective of DBBL. However, profit is also important to give satisfactory returns

to all the stakeholders and to ensure sustainable operations, growth and long-term solvency of

the Bank which in turns enable the Bank to contribute in a greater way to the economy &

society.

As DBBL is dependent on its stakeholders to continue its operation and wealth creation

activities, therefore, wealth created by the Bank is also distributed to its various stakeholders.

Shareholders get dividends, depositors get interest, employees receive salaries and government

gets tax, VAT etc.

2.12 Economic contribution report

29

MEASURES TAKEN BY DBBL TO MAXIMIZE VALUE FOR ITS STAKEHOLDERS

AND TO INCREASE ITS CONTRIBUTION TO THE ECONOMY & SOCIETY IN A

SUSTAINABLE WAY

DBBL as a responsible citizen has taken effective measures to sustain its operations in a

sustainable way thereby to increase its contribution to the economy & society. DBBL has

undertaken due process, procedures and systems in compliance with best practices in corporate

governance, risk management, regulatory requirements, environmental issues, staff welfare,

customer services and business practices to strengthen its ability to serve the stakeholders and

society increasingly in a greater way.

SOME OF THE MEASURES TAKEN BY DBBL TO MAXIMIZE VALUE ARE GIVEN

BELOW

Corporate governance ensuring best practices DBBL complies with good corporate governance

practices in line with industry best practices and regulatory requirements ensuring transparency,

accountability and fairness at every step of its business operations to maximize performance with

governance.

MANAGING RISKS TO ENSURE QUALITY AND VALUE OF ASSETS AND

UNINTERRUPTED OPERATIONS

Risk management covering credit risks, operational risks and market risks is at the heart of all

business operations and transactions of DBBL. Risk management systems are designed and

implemented to ensure quality and value of assets and smooth banking operations and services in

a sustainable way to protect interest of shareholders, depositors and all the stakeholders. Risk

management system also

complies with Bangladesh Bank's core risk management guidelines.

30

BUSINESS ENVIRONMENT All the surroundings in which we continue our business activities. These surroundings directly

and/or indirectly influence the business.

TYPES OF BUSINESS ENVIRONMENT

Firstly business environment can be classified into two types.

A) External Environment -that influences business directly or indirectly.

B) Internal Environment -that influences business directly.

A) External Environment

The external environment is composed of two layers.

1. General environment

The general environment includes nonspecific elements of the organization's surroundings that might affect its activities in a broad and general sense.

2. Task environment

The task environment consists of specific dimensions of the organization's surroundings that are very likely to influence the organization in a more direct and immediate sense.

B) Internal Environment

The internal environment consists of conditions and forces within the organization. It includes owner, employees, board of directors and culture-each of which play an important role in the

internal environment of the organizations.

31

TYPES OF ENVIRONMENT

A) EXTERNAL ENVIRONMENT

A. The general environment

1. Economic dimension The economic dimension of an organization's general environment the overall health of the

economic system in which the organization operates. Factors are: inflation, interest rates, and employment all of which affect demand for different

products.

32

2. Technological dimension

The technological dimension of the general environment refers to the methods available for converting resources into products or services.

Although Technology is applied within the organization, it may vary with the forms and availability.

3. Socio-cultural dimension

The socio-cultural dimension of the general environment includes the customs, norms, values, and demographic characteristics of the society in which the organization functions.

Socio-cultural processes are important because they determine the products, services,

and standards of conduct the society is likely to value.

4. Political-legal dimension

It refers to government regulation of business and the general relationship between business and,

government. The legal system partially defines what an organization can and can't do. Political stability that has important role for planning.

5. International dimension:

International dimension of an organization refers to the extent to which an organization is

involved in or affected by business in other countries.

The customs, norms, values and government rules of host country are likely to affect

foreign business operation

B. TASK ENVIRONMENT

1. Competitors

2. Customers

3. Suppliers

4. Regulators

5. Regulatory agencies:

33

QUESTIONNAIRE The survey is done by a structured questionnaires and the detail about questionnaires is given in

attachments section.

FINDINGS Explain: we have conducted survey with 10 employees in 10 different organizations. We asked 11

different questions (each question is given with details result in attachment of the report) about training

and development program. The findings of this survey is given below

1st question

Explain: Our 1st question for employees is “Economic policy which is changed by the legal authority,

forces the organization to chance its internal environment.” Eight of them are strongly agree with this

question. One is agreed and other one disagrees with this question.

2nd question

Explain: Our 2nd question for employees is “Your organization takes such kinds of changes?” All ten

employees are agreeing with this question.

0

1

2

3

4

5

6

7

8

Strongly

agree

Agree Undecided Disagree Strongly

disagree

QUESTION: Economic policywhich is changed by the legalauthority, forces the organizationto chance its internalenvironment

YES (15 persons)100%

NO (0 person)0%

Your organization takes such kinds of changes

34

3rd question

Explain: Our 3rd question for employees is “Interest rate, capital structure, Short term financing, long

term financing, dividend policy are affected by business environment especially economic forces.” Eight

of them are strongly agree with this question. One is agreed and other one disagrees with this question.

4th question

Explain: Our 4th question for employees is “Your organization takes such kinds of changes?” All ten

employees are agreeing with this question.

0

1

2

3

4

5

6

7

8

Strongly

agree


disagree

QUESTION: Interest rate,capital structure, Short termfinancing, long term financing,dividend policy are effected bybusiness environment speciallyeconomic forces


NO (0 person)0%

Is Such kind of changes are taken place in here?

35

5th question

Explain: Our 1st question for employees is “If the organization adopt with new environment, it shows

that the organization is more effective and competence with respect to others.” Eight of them are

strongly agree with this question. One is agreed and other one disagrees with this question.

6th question

Explain: Our 2nd question for employees is “Do you think your organization is competence and efficient y

adopting new and changing environment?” All ten employees are agreeing with this question.

0

1

2

3

4

5

6

7

8

Strongly

agree


disagree

QUESTION: If the organizationadopt with new environment, itshows that the organization ismore effective andcompetence with respect toothers.


NO (0 person)0%

Do you think your organization is competence and efficient y adopting new and changing

environment

36

7th question

Explain: Our 1st question for employees is “As a bank its benefit and loss are directly influenced by

economic forces….?”Eight of them are strongly agree with this question. One is agreed and other one

disagrees with this question.

8th question

Explain: Our 2nd question for employees is “Do you think it happens to your bank.?” All ten employees

are agreeing with this question.

0

1

2

3

4

5

6

7

8

Strongly

agreeAgree Undecided Disagree Strongly

disagree

QUESTION: As a bank its benefit and loss are directly influenced by economic forces….


NO (0 person)0%

Do you think it happens to your bank.

37

9th question

Explain: Our 1st question for employees is “Macroeconomics forces (GDP, GNP, inflation,

unemployment, and foreign exchange) are the strong factors to take new decision in a Bank. .” Eight of

them are strongly agree with this question. One is agreed and other one disagrees with this question.

10th question

Explain: Our 2nd question for employees is “For achieving the success your Bank analysis this factors?”

All ten employees are agreeing with this question.

0

1

2

3

4

5

6

7

8

Strongly

agree


disagree

QUESTION: Macroeconomicsforces (GDP, GNP, inflation,unemployment, and foreignexchange) are the strongfactors to take new decision ina Bank.


NO (0 person)0%

For achieving the success your Bank analysis this factors.

38

11th question

Explain: Our 1st question for employees is “The overall financial condition is depends on overall

country’s economic condition” Eight of them are strongly agree with this question. One is agreed and

other one disagrees with this question.

0

1

2

3

4

5

6

7

8

Strongly

agreeAgree Undecided Disagree Strongly

disagree

QUESTION: The overall financial condition is depends on overall country’s economic condition

39

Banking sector is one of the leading sectors of our economy no doubt. Commercial bank is

ensuring money supply through short and middle term loan. In some cases, they also provide

conditional long-term loan. On the other hand, Dutch-Bangla Bank established for

industrialization. As a result, it issued long-term loan for industries.

After evaluation, we found that the role of Dutch-Bangla Bank in the industrial sector of

Bangladesh is tremendous. It is establishing new industries and helping them all sorts of

its kind. On the other hand, it is contributing for creating new employment opportunities

that is essential for economy;

Now Dutch-Bangla Bank is a profitable Bank. The financial statement says that it

increase its profit day by day. We believe if it runs right way it will be the leading private

Bank very soon.

Role of Dutch-Bangla Bank, in case of, entrepreneurship development, is very great. Our

cultural heritage is not favorable to business but Dutch Bangla Bank able to encourage

people to become businessman through their advisory services, seminar and symposium;

Dutch-Bangla Bank was formed to stimulate industrialization. Mainly it grants term loan,

working capital loan and bridge loan;

The inefficient allocations of resources have created a huge amount of bad debt. In some

cases, security against the loan is not sufficient to recover the loan. As a result, large

numbers of project become sick. Loan recovery is below the satisfactory level. But they

are trying to overcome such problem.

Major Findings

40

As a Development Financial Institution, Dutch-Bangla Bank plays a vital role for

industrialization. Dutch-Bangla Bank is continuing its bolstering endeavor for up-gradation of

our economy. Although there are a lot of favorable and strengthen positions of Dutch-Bangla

Bank in respect of its activities. One important problem of Bangladesh Shilpa Bank is that, it is a

decentralized organization and each department is responsible for particular activities but they

have lack of co-ordination to achieve the central objectives. I think rules and regulations are

sufficient but problem and controversial area is implementation. We observed a large number of

projects are sick and they are loan defaulter. I criticize the loan appraisal procedure because it is

the vital documents for loan issue. It is clear that some invisible hands may control this beyond

the process. And there is a question of failure ness: -

Loan appraisal procedure is time consuming and to some extent, project plan become

irrelevant after getting the loan. Since all the processes are completed so he is bound to

take this loan because some expenditure already been incurred (suck cost). As a result,

loan recovery may slow and some time difficult. My suggestion is that Bangladesh Shilpa

Bank should rearrange appraisal procedure so that the entrepreneur can take loan within

short period of time;

Dutch-Bangla Bank should avoid unnecessary political interfere that becoming outside

the ban. Political problem of our country is a major problem now. If it influence, the

banking activity must create new problem no doubt;

Some time real entrepreneur does not get bank loan. Dutch-Bangla Bank must have to

identify profitable project and actual entrepreneur for issuing loan. And employees who

are directly involved with loan recovery should also be motivated;

Recommendations

41

Dutch-Bangla Bank should introduce modern communication system so that every

department personnel or unit can get information in his or her desk. Now, one department

must have to go other departments for information. It is also time consuming. Preserving

documents also need to be computerized instead of traditional filing system;

Encouraging the borrower to repay the loan in time. Special arrangements should be

introduced in this respect. Legal steps should be dynamic so that default loan recovery is

accelerated. And security against the loan should be sufficient to recover the loan.

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Dutch-Bangla Bank Ltd. is an Exclusive private bank in Bangladesh. It has the enormous

opportunity to business with its customer both in Bangladesh and worldwide. Its international

and local safety and security is popular to customer and it has the growth opportunities in

Bangladesh.

From the throughout analysis of the study, it has been clearly obvious that overall performance

of Dutch Bangla Bank is very good in our economic situation. It should care about the products

for its marketing activity lead time and distribution. Then DBBL can acquire a huge share in

both Dhaka and Chitagong Stoch Exchange.

Conclusion

43

01) Dutch-Bangla Bank – 2006 – Annul Report 2010

02) Manual of the project Appraisal - Dutch-Bangla Bank, August, 1984;

03) Chandra, P. - Project Planning - Analysis Selection Implementation & Review;

04) B. N. Ghosh - Scientific Methods and Social Research - Sterling Publishers Ltd.;

05) Fred N. Kerlinger - Foundation of Behavioral Research - Holt Rinehart Winston;

06) M/S Pack Stone Ltd - Appraisal Report - March 2002;

07) William G. Zikman - Business Research Methodology;

08) T. S. Wilkinson & P. I. Bhandarkar - Methodology and Techniques of Social Research;

09) Dutch-Bangla Bank - 2006 - Annual Report 2006

10) Dutch-Bangla Bank - 2007. - Annual Report 2007

11) Dutch-Bangla Bank - 2008 - Annual Report 2008

12) Dutch-Bangla Bank – 2009 - Annual Report 2009

13) Dutch-Bangla Bank – 2010 - Annual Report 2010

Bibliography

44

Questionnaires

Bangladesh University of Business & Technology (BUBT) Founded by Dhaka Commerce College

Dhaka Commerce College Road, Mirpur- 2, Dhaka-1216 Phone: 8057581-3, Fax: 8057583

Dear Sir/ Madam, This is an academic exercise intended to evaluate “Environment influence on Bank industry

A study on Economic force.”. The responses will be used for academic purposes and its confidentiality will be strictly maintained. For further enquiry please contact with:

Md. Maniruzzaman Lecturer, Department of Marketing

Faculty of Business, BUBT. Cell: 01718128866.

Please carefully read the questions and just put a tick () in the respective box (◊) and kindly give your

response where necessary.

SECTION -1: GENERAL INFORMATION ABOUT RESPONDENT

1. Name: ………………………………………… Contact No. ………………….……………

2. Gender: i. □ Male ii. □ Female

3. Age (in Years):………………………..

4. Marital Status: i. Single ii. Married iii. Divorced / Separated iv. Widow

5. Religion: i. Muslim ii. Hindu iii. Christian iv. Buddhist v. Others

6. Education level:

i. Below S.S.C. ii. S.S.C. iii. H. S. C iv. Diploma v. Graduation.

vi. Post Graduation. vii. Others: …………………………..

SECTION -2: GENERAL JOB INFORMATION

1. Name of your organization: …………………………………………………..…..

2. Designation in the Organization: …………………………………………………

3. Level of the Designation: i. Operational level ii. Mid level

4. Length of service in this organization (in Years): ………………………….…….

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Sec 03: Economic force on Your Bank

No. Statements Level of agreement

Strongly

agree Agree Undecided Disagree

Strongly

disagree

1.

Economic policy which is changed by the legal

authority, forces the organization to chance its

internal environment

2. Your organization takes such kinds of changes a. Yes b. No

3.

Interest rate, capital structure, Short term

financing, long term financing, dividend policy are

effected by business environment specially

economic forces

4. Is Such kind of changes are taken place in here?

a. Yes b. No

5.

If the organization adopt with new environment, it

shows that the organization is more effective and

competence with respect to others.

6.

Do you think your organization is competence and

efficient y adopting new and changing

environment

a. Yes b. No

[

7.

As a bank its benefit and loss are directly

influenced by economic forces

[

8. Do you think it happens to your bank?

a. Yes b. No

9.

Macroeconomics forces (GDP, GNP, inflation,

unemployment, and foreign exchange) are the

strong factors to take new decision in a Bank.

10. For achieving the success your Bank analysis this

factors.

a. Yes b. No

11. The overall financial condition is depends on

overall country’s economic condition

46

Tables

Table no 01

Economic policy which is changed by the legal authority, forces the organization to chance its internal environment

Strongly agree Agree Undecided Disagree Strongly disagree 8 1 0 1 0

Table no 02

Your organization takes such kinds of changes

YES NO 10 0

Table no 03

Interest rate, capital structure, Short term financing, long term financing, dividend policy are effected by business environment specially economic forces


Table no 04

Is Such kind of changes are taken place in here?

YES NO 10 0

Table no 05

If the organization adopt with new environment, it shows that the organization is more effective and competence with respect to others.


Table no 06

Do you think your organization is competence and efficient y adopting new and changing environment?

YES NO 10 0

47

Table no 7

As a bank its benefit and loss are directly influenced by economic forces


Table no 8

Do you think it happens to your bank?

YES NO 10 0

Table no 9

Macroeconomics forces (GDP, GNP, inflation, unemployment, and foreign exchange) are the strong factors to take new decision in a Bank.


Table no 10

For achieving the success your Bank analysis this factors.

YES NO 10 0

Table no 11

The overall financial condition is depends on overall country’s economic condition


Dbbl

Environment

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