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1.0 INTRODUCTION

1.1 ORIGIN OF THE REPORT

Prime Bank Limited is a fast growing private sector bank in Bangladesh. The main

objective of this report is to evaluate the performance of deposit schemes of Prime Bank

Limited. In terms of deposit schemes, credit facility and uality services to the customers

and value addition for the shareholders, Prime Bank Limited is already maintaining its

position at the top slot. The bank has already proved satisfactory progress in all areas of

banking operation and it further e!panded and consolidated its customer base in both of

its core business and retail banking. Prime Bank Ltd. is determined to e!plore the

different ways to accommodate with the needs of its clients.

1.2 OBJECTIVE OF THE REPORT

The objectives of the study are as follows"

Br!ad O"#e$ti%e

The major objective of the report is to have a clear idea about the #$arketing of%inancial Products& of Prime Bank Limited and to compare the deposit schemes with

other private banks.

Genera& O"#e$ti%e

The general objective of the report is to know about the management system of

Prime Bank Limited as a private commercial bank, its formation, and its

functional, operational and financial aspects.

To identify different deposit schemes available in Prime Bank Limited.

To identify the benefits of deposit schemes in Prime Bank Limited regarding

other private banks.

To make a comparison on deposit schemes between Prime Bank and other private

sector Banks.

To make recommendations regarding the Bank&s 'eposit (cheme.

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1.' COPE OF THE REPORT

This report will cover the details of Prime Bank&s practices about various 'eposit

(chemes. *ow a day 'eposit (chemes are very much important for fi!ed income people.

In the report, I will try to focus on the various deposit schemes, its functions, its history,

using business correspondence analysis of this sector as well as its role in our economy.

It will also cover the deposit procedures and performance of Prime Bank Ltd. %inally it

will incorporate an evaluation of the various 'eposit (chemes in comparison to other

competitor private banks and recommends some measures to strengthen more its deposit

schemes.

1.( )ETHODOLOG* OF THE REPORT

1.(.1 Re+ear$, De+i-n

+!ploratory research will be conducted for gathering better information which

will able to give a better understanding on various deposit schemes. Both primary and

secondary sources of data collection procedure will be used in the report. Primary data

would be collected mainly through the writer&s observation of the approval process and

monitoring techniues, informal interviews of e!ecutives, officers and employees of

Prime Bank Limited.

1.(.2 !r$e+ !/ Data C!&&e$ti!n

To make the eport more meaningful and presentable, two sources of data and

information have been used widely.

(ource of 'ata

%igure ).)" (ources of data

Both primary and secondary data sources were used to generate the report.

The -Primary sources- are as follows

/ %acetoface conversation with the respective officers and staffs of Prime Bank

and other banks.

0

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/ Informal conversation with the clients.

/ Practical work e!posures from the different desks of the departments of the

Branch.

/ (tudy of the relevant files as instructed as instructed by the officers concerned.

The -(econdary (ources- of data and information are

/ 1nnual reports of PBL and other Banks.

/ Training materials available at the BIB$ library,

/ 5arious books articles, compilations etc. regarding marketing of financial

products.

1.(.' Data ana&+i+

The report will be aimed at depicting the various 'eposit (chemes of Prime Bank

Limited. The data should be gathered from both primary and secondary sources would

arranged orderly to get a clear picture of the bank&s various deposit scheme and the other

banks. The study will include both ualitative and uantitative analysis of deposit

procedures and monitoring tools. Based on the observational information writer will also

tried to evaluate and analy6e the problems involved in deposit schemes.

1.LI)ITTION OF THE TUD*

There are certain limitations regarding the study that is summari6ed below"

'eficiencies in data reuired for the study.

%ield practice varies with the standard practice that also created problem.

Time provided for conducting the study is another important constraint.

The employees in Prime Bank Limited are so much busy in their responsible

fields, they could hardly provide little time to discuss with them.

$arketing is a very wide spectrum. 7owever banks in Bangladesh do not even

have a separate marketing division and spend less then )8 of their budget on

marketing. I could not therefore focus on marketing practices on local banks, as

there is not much to deal with.

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2.0 CO)PN* PROFILE

2.1 BN3ING HITOR* IN BNGLDEH

1fter liberation, there were 0 types of financial institutions in Bangladesh. The

nationali6ed commercial banks i.e. 1grani, :anata, upali and (onali Bank and

development %inancial Institutions ;'%Ls< like Bangladesh =rishi Bank, Bangladesh

(hilpa Bank, B1(I3 Bank and jshahi =rishi >nnayan Bank. The '%Is were different

from the banks in the sense that their main motive was not profit ma!imi6ation but to

help the small and medium +nterprises in the country grow. It was mandatory for the

'%Is to disburse at least ?@8 loans to the ($+(.

1+tGenerati!n Bank+ 4E+ta"&i+,ed 15627156689

*ational Bank Limited, The 3ity Bank Limited, >nited 3ommercial Bank Limited, 1B

Bank Limited, I%I3 Bank Limited, Islami Bank Bangladesh Limited and 1lBaraka

;4riental< Bank Limited.

2ndGenerati!n Bank+ 4E+ta"&i+,ed 15527155:89

Prime Bank Limited, +astern Bank Limited, *ational 3redit A 3ommerce Bank

Limited, (outheast Bank Limited, 'haka Bank Limited, 1l1rafa Islami Bank Limited,

(ocial Investment Bank Limited and 'utchBangla Bank Limited.

'rdGenerati!n Bank+ 4E+ta"&i+,ed 1555 t! ;re+ent89

$ercantile Bank Limited, (tandard Bank Limited, 4ne Bank Limited, +I$ Bank

Limited, Premier Bank Limited, $utual Trust Bank Limited, %irst (ecurity Bank

Limited, Bank 1sia Limited, The Trust Bank Limited, :amuna Bank, Brac Bank, and

(hahjalal Bank.

(o it seems that Prime Bank is in the secondgeneration group, which is characteri6ed by

establishment that is characteri6ed by establishment in the mid )CC@&s and relatively

medium asset si6e. (econd generation group mainly pursue progressive growth to the

general public with relatively healthy asset. 1ccording to e!ecutives in Prime Bank,

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credit performance of secondgeneration P3Bs like 'haka Bank, Premier Bank, 'utch

Bangla Bank, (outheast Bank, etc are the best in terms of 3amel ating. Therefore, it is

logic to say that Prime Bank operates in a very competitive environment and its main

competitors are the members of secondgeneration group.

2.2 INCORPORTION OF THE ORGNI

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groups. In a challenging market conditions, this bank continued to provide more

innovative products and better services to retain and e!pand its market share. The bank is

committed towards providing continuous training to its staff to keep them up to date with

modern practices in their respective fields of work. This bank also tries to fulfill its share

of community responsibilities. By such measures the bank intends to grow and increase

shareholder&s earning per share.

2.' CO))ENCE)ENT OF OPERTION

Prime Bank Ltd. started its operation on )Eth1pril, )CCF with an authori6ed capital of

Tk. )@@@ million and paid up capital of Tk. )@@ million by a group of highly successful

entrepreneurs who are established in various fields of economic and business activities.

PBL is a fully licensed scheduled commercial bank set up in private sector in pursuance

of the overnment of Bangladesh to liberali6e banking and financial services.

Till now, the branch network of Prime Bank Ltd. increased to D0 with F new branches in

the last of the year 0@@F. 3urrently, there is no proposed branch. The commercial and

investment services of PBL range from small enterprises to big business loans to all typeof customers. Besides this, the bank actively participates in socioeconomic development

of priority sectors like agriculture, industry, housing, selfemployment, etc. PBL is also a

pioneer in providing consumer loans as well as financing the industries and transport

sector through attractive leasing and higher purchase scheme.

2.( VIION OF PRI)E BN3 LTD.

To be the best Private 3ommercial Bank in Bangladesh in terms of efficiency, capital

adeuacy, asset uality, sound management, and profitability having strong liuidity.

2. )IION OF PRI)E BN3 LTD.

To build Prime Bank Limited into an efficient. $arket driven, customer focused

institution with good corporate governance structure. 3ontinuous improvement in Bank&s

business policies, procedures and through integration of technology at all levels.

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2.: OBJECTIVE OF PRI)E BN3 LI)ITED

Prime Bank aims to continuously update and develop its product line and range

of services to cater to the needs of retail and corporate customers. To achieve this goal,

efforts have been directed in three main areas"

'esign and introduction of new products and services

(haping and developing the system to face new challenges and emerging need of

the market

%ull implementation and utili6ation of the Bank&s e!cellence program which aims

to provide service to customers.

Jhile strengthening risk management and improving asset uality is the main

focus of the bank, it is also aware of its responsibility to the society. Jith this noble

intention, Prime Bank %oundation was established in 0@@), which took part in diverse

charitable and voluntary programs to alleviate poverty and community welfare.

2.= >L3>* OF PRI)E BN3 LTD.

15593reated and commenced its operation on )Eth1pril )CCF. enowned banker $r.

Luthfur ahman (harker was the first $anaging 'irector of this Bank.

155:9Incorporated in 'haka (tock +!change. 4n 0)st *ovember $r. (harker resigned.

155=94n Gth1pril $r. =a6i 1bdul $a6id took over the leadership of the bank as a

$anaging 'irector. *o of branches of the bank reached at )? thcovering all divisional

city of Bangladesh. Paid up capital reached from T=. )@@ to 0@@ million. 4ne Islamic

Banking branch started its operation at $otijheel.

15569*o of branches reached at )G including two Islamic banking branches.

1555" $r. *aser Bukhtear 1hmed joined as a deputy $anaging 'irector with lot of

e!perience and foreign banking e!posure. *o of branches reached at 0@. 4nline banking

and credit card facilities were started.

20009*o.) bank in 31$+L rating announced by Bangladesh Bank in Bangladesh.$r. $. (hajahan Bhuian joined as a (enior +!ecutive 5ice President came from

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>nited 3ommercial Bank Limited.

2001" *umber of branches reaches at 0?. $r. =a6i 1bdul $a6id resigned from the Bank

and $r. *aser Bukhtear 1hmed took over the charge as a $anaging 'irector. $r. $.

(hajahan Bhuian was the 'eputy $anaging 'irector. 1lso the no.) bank in terms of the

31$+L ating announced by Bangladesh Bank in Bangladesh.

20029$r. (hah $d. *urul 1lam joined as a $anaging 'irector from (outheast Bank

Limited after $r. Bukhtear resigned. (till it the number one bank in terms of 31$+L

ating. *umber of branches reached at 0E including three Islamic banking branches.

2009The number of Prime Bank branches reaches 9?, and of it F branches are

designated Islamic branches complying with the rules of Islamic (hariah the modus

operandi of which is substantially different from other branches run on commercial

conventional basis.

2.6 PRI)E BN3? ORGNI

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The bank&s board has a policy of rotating the 3hairman&s position amongst various

membersK conseuently the bank has a new 3hairman every year. The e!ecutive

management also appears a bit topheavy ;relative to the si6e of the bank< with one

additional managing director besides the managing director, a (enior +!ecutive 5ice

President, four +!ecutive 5ice Presidents and many (enior 5ice Presidents. Primafacie

the rotating 3hairman and the presence of effectively two managing directors may lead

to some overlapping responsibilities and possible conflictK however this does not seem to

have happened so far in the bank&s history and the bank continues to perform

satisfactorily.

2.6.1 Or-ani@ati!na& tr$tre9

'esignation in ascending order

&. N!. De+i-nati!n

). $anaging 'irector

0. 'eputy $anaging 'irector

9. (enior +!ecutive 5ice President

D. +!ecutive 5ice PresidentF. (enior 5ice President

?. 5ice President

E. (enior 1ssistant 5ice President

G. 1ssistant 5ice President

C. %irst 1ssistant 5ice President

)@. (enior +!ecutive 4fficer

)). +!ecutive 4fficer

)0. Principal 4fficer

)9.(enior 4fficer

$anagement Trainee)D. 4fficer

)F. :unior 4fficer

)?.1ssistant 4fficer

Trainee 1ssistant

2.6.2 Hierar$, !/ Prime Bank

3hairman

Board of 'irectors+!ecutive 3ommittee

)@

Top $anagement

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$anaging 'irector

1dditional $anaging 'irector

'eputy $anaging 'irector

(enior +!ecutive 5ice President

+!ecutive 5ice President

(enior 5ice President

5ice President

(enior 1ssistant 5ice President

1ssistant 5ice President

%irst 1ssistant 5ice President

(enior +!ecutive 4fficer

+!ecutive 4fficer

Principal 4fficer

(enior 4fficer

$anagement Trainee 4fficer

:unior 4fficer

2.5 O>N VIE> BOUT PRI)E BN3 LI)ITED

Prime Bank Ltd. $ohakhali branch is the largest and most profitearning branch. It is a

threestoried branch. In the )stfloor there is eneral Banking 'ivision. In the 0nd floor

there is 3redit 'epartment, 1ccounts 'epartment and the chamber of branch manager

and in the 9rdfloor there is foreign e!change department. The working environment is

very good here. +mployees can work in a very calm but important area considering its

location. The branch has some big clients who are continuously giving earning to the

branch. 1mong them there are (uare Toiletries, (audi Bangla %ish %eed, Inde! 1gro,

))

+!ecutive Level

$anagement

$id Level

$anagement

:unior Level

$anagement

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3omputer 5alley, ulshan Trading, 'haka Ice 3ream, Lilac 3hemicals, (cholastica Pvt.

Ltd, (tandard roup, 1= Traders, Pacific $otors, +ast Jest >niversity, Brac

>niversity, T(34 Power, T$ International etc. The performance of the branch is very

successful. Last fiscal year the branch was well ahead of its target in terms of profit,

deposit and loan.

2.11 FINNCIL PERFOR)NCE

Table 0.)" %inancial performance

;Taka in millionOT NL*I

(J4T analysis enables an organi6ation to have a comprehensive insight about its

current position in the industry compared to its competitors. It provides the organi6ation

a scope to strategically improve its position in the market. 7ere, the internal strength and

weakness of Prime Bank Ltd. as well as the e!ternal opportunities and threats are

discussed"

.1 TRENGTH

Ca;ita& dea$

Prime Bank Ltd. is maintaining a strong capital base. By the end of year 0@@9, the capital

adeuacy ratio of the bank was )).C08 which was well above the stipulated reuirement

of C8. The bank had a target to have Tk. )@@@ million of capital fund by the year 0@@?,

whereas it already reached capital fund of almost Tk. 0@@@ million by 0@@9, positioning

the bank as one of the strong capital based bank of Bangladesh.

C+t!mer er%i$e

PBL has a very good relationship with its customers. The bank believes in maintaining

personal relationship with its clients. 4ne of the major goals of the bank is to build long

term relationship with the customer and to create value for them. To maintain this

relationship, PBL sometimes waive high charges for those valued clients who are linked

with the bank for a long period of time. 1s a result of such strong customer service, the

bank currently has more than ),FD,@@@ customers, highest in the private sector

commercial banks of our country.

Liidit P!+iti!n

Liuidity position is a major criterion to measure a bank&s strength. By the end of 0@@9,

PBL had liuid assets of Tk. DFGD.DF millionK the ratio of liuid asset to total asset was

)G.C08. (o, the liuidity risk of the bank is low and it makes its position stronger.

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E//i$ient dmini+trati!n

Prime Bank Ltd. has a very efficient administration. The work is done in a timely and

systematic manner for which the efficient administration is responsible. There is a close

relationship between the employees and the management though the chain of command

is maintained strictly. 4verall, there is a good balance between the administration and the

employees.

$$!nta"&e C!r;!rate G!%ernan$e

ood 3orporate overnance is an issue of vital importance to the Board and

$anagement of Prime Bank. The Board of 'irectors, as the ape! level of authority, is

responsible and accountable for the overall direction and is ultimately answerable to

regulatory authorities and shareholders for the activities, strategies and performance of

the company. The board now has )9 members, which also includes at least two

independent directors.

Prime Bank board has a formal schedule of matters especially reserved for its decision

including corporate strategy, approval of budgets and balance sheet, annual financialresults, 'irector 1ppointment, proposal for dividend, approval of major corporate

transactions and credit proposals beyond the delegated business power of the

management.

EA;erien$ed eni!r )ana-ement

The senior management of the bank is responsible for promoting the highest level of

business ethics and integrity. Their aim is to create and foster a culture throughout thebank that emphasi6es and demonstrates the importance of maintaining high business

ethics and close relationship with customers.

C!m;en+ati!n Pa$ka-e

Prime Bank maintains an eual opportunity in recruitment, training and promotion of all

employees regardless of gender or ethnic origin. The bank tries to pay all its employees

the best compensation package. 1ccordingly, Prime Bank&s salary structure is revisedupward on a regular basis. The bank also keeps in employees informed about the

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progress of the business and their part in it for their constant commitment to the bank.

They also encourage the development of the employee involvement in the bank through

formal and informal meetings.

!$ia& >e&/are

Prime Bank has fully commitment towards serving the communities in which it operates.

The bank believes that healthy economy and sound banking go together. 1 chunk of the

bank&s annual profit is being given to the Prime Bank %oundation for social welfare. The

main objective of the foundation was to invest part of the bank&s profit in poverty

alleviation and community welfare.

The Prime Bank %oundation and the employees of the bank take part in diverse

charitable and voluntary programs. The foundation had made allocations in different

areas of poverty alleviation and primary health care programs for the lowincome group.

(ubstantial fund had also been allocated for research works on various socioeconomic

issues confronting the nation. 1ll these strongly reflected strong commitment of the bank

to work closely through foundation with the community with which it coe!ists.

On&ine Bankin- er%i$e+

Prime Bank is among the few banks in Bangladesh, which provides the online banking

services to its customers. By using the modern banking services, a Prime Bank customer

can withdraw or deposit an amount of cash under the Prime Bank account no matter in

which branch the actual account e!ist. This service gives its customer huge fle!ibility.

$ore and more urban customers are becoming attracted to this service day by day.

Trainin- and De%e&!;ment

Prime Bank has a personneltraining institute with good resources. They give regular

training to the officer of both middle and lower levels. 1gain if there is any strategy or

technology change, there will be special training program arranged based on individual

needs.

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.2 >E3NE

Te$,n!&!-

4ne of the major weaknesses of Prime Bank Ltd. is the technology used by the bank.

Jith the change of time, technological advancement is essential to survive in the

competition. 7ence, PBL is lagging far behind in this area. $ost of the branches are not

well euipped. There are not enough computers, telephones or fa! machine in the

branches which often slower the pace of work. PBL was the pioneer in #4nline Banking&

but the online facility which the bank is providing currently is not up to the standard.

Remnerati!n

The pay scale of employees in PBL is not competitive compared to other private banks

of the country. The employees of PBL get compensation of around ?@8 of what other

private banks, for e!ample, 'haka Bank, $ercantile Bank, (outheast Bank, etc. offer to

their employees. This creates dissatisfaction among the employees which carries the risk

of rise in employee turnover rate. Those who cannot switch bank are often discouraged

to give their best effort in the job.

Pr!m!ti!n

Jhen an employee gets a promotion to the ne!t level, heshe gets more compensation.

PBL is regular in giving promotion, but the employees get late effect of this promotion.

4ften there is a long gap, for e!ample a si! month gap in getting the effect.

Le++ em;,a+i+ !n ad%erti+in- t,r!-, t,e e&e$tr!ni$ media

Prime Bank does not promote their brand or products on a regular basis. They seem to be

over confident over their company&s publicity. They some times see it as an e!tra

e!penditure. They also don&t do much electronic media advertising. 4n the other hand

competitors like 'haka Bank, 'utch Bangla Bank, (tandard 3hartered Bank, :amuna

Bank and others do the opposite freuently come up with creative adds for their banks.

This is a big weakness for Prime Bank, which may prove to be very big mistake in the

future. To company should concentrate more on its promotional activities.

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-en$ Pr!"&em

The front desk employees are often found not to be too keen on taking care of their

customers. Though they have a long employee line in every branch, their loyalty to the

company and their ethics level are not very satisfactory. $ost of the employees always

think about their own interest, which proves that agency problem is there. (ome of them

create unofficial groups through which they solve each other&s problem and support each

other to achieve their personal goals, not too much concern about their personal interest.

.' OPPORTUNIT*

T) Fa$i&it

3urrently Prime Bank Ltd. does not have 1T$ facility. %ew years ago the bank had an

agreement with (tandard 3hartered Bank to share their 1T$ facilities by which the

credit card holders of PBL can withdraw money as per their reuirements 0D hours a day.

PBL has a good opportunity to provide their own 1T$ facility to the customers in near

future and survive in the competition.

Bran$, EA;an+i!n

Prime Bank Ltd. is growing very uickly all over the country. Besides e!panding in the

urban areas, PBL has the prospect to open more branches in suburban areas which will

eventually enhance the government&s effort at reviving the rural economy. It will also

serve the people of those areas better.

Trainin- /a$i&it

Prime Bank Training Institute ;PBTI< is supporting the bank by offering in house

training courses, workshop and seminars. 1s the bank has its own training institute to

enhance the capability of their human resources, PBL can use this opportunity to train

their employees in specific areas and create speciali6e and e!pert people for the bank.

Bankin- !/tare

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Providing uality service is one of the major goals of PBL. Though PBL is still lagging

behind in upgrading their software system, the bank has the prospect to select high

uality banking software which will make the banking operation fast and smooth.

Premim er%i$e Bankin-

Prime Bank can improve its customer service by tailoring the individual business needs.

This service enhancement collectively will allow a customer to manage their business

finances and cash resources more efficiently and conveniently. The services like

3ourier

1uto %a! eport

7otline ;2our single point of contract