Banking Related Questions /Knowledge Based Questions

What is the Difference between Coins and Banknotes?

The only difference between coin and banknote is that the coin has more inherent
value than the note. Coins are usually made of metal which has some inherent
value. Notes are just receipts issued by central banks (printed on paper or polymer)
backed by governments and has no inherent value in them.
Difference between Bank Notes and Government Notes
Now-a-days the government notes serve as money. They are issued either directly
by governments or indirectly through their central banks. Notes issued by the
central banks are often called banknotes, but they are functionally the same as
government notes.
Mention some key challenges for the economy of Bangladesh:
The main challenges for the economy of Bangladesh are —
 Slow growth pace in private investment
 Downfall in manpower exports in foreign countries
 Slow growth pace in exports
 Negative influence in remittance inflow
 Capital shortfalls in the banking sector and structural and institutional
inefficiency of the government.
Main obstacles behind the low investments
In Bangladesh There are several reasons behind the low and slow pace of
investment in Bangladesh —
(a) Political instability
(b) Lack of infrastructural development
(c) Lack of capital
(d) Collapse of state-owned commercial bank
Main features of the economy of Bangladesh (Main problems to the economic
development)
 Inequality in the distribution of income and wealth
 Underutilization of natural resources
 Underdeveloped agricultural sector
 Unavailability of sufficient natural resources
 Primitive method of cultivation
 Underdeveloped socioeconomic infrastructure
 Excessive population & rapid rate of population growth
 Weak economic infrastructure Increasing trend of unemployment
 Presence of colonial administration and exploitation
 Deficit in international trade
 Low per capita income
 Excessive dependence on the agriculture sector
 Political instability
 Underdeveloped industrial sector
 Increasing trend in the prices of commodities
 Corruption
 Natural calamities
 Low food production
 Lack of technical and technological knowledge
 Lack of capital money
 Lack of skilled manpower and efficient entrepreneurs
The market-based economy of Bangladesh is the 42nd largest in the world in
nominal terms, and 31st largest by purchasing power parity. it is classified among
the Next Eleven emerging market middle income economies and a Frontier market.
According to the IMF, Bangladesh's economy is the second fastest growing major
economy of 2018, with a rate of 7.86%.Dhaka and Chittagong are the principal
financial centers of the country, being home to the Dhaka Stock Exchange and the
Chittagong Stock Exchange. The financial sector of Bangladesh is the second
largest in the subcontinent.
In the decade since 2004, Bangladesh averaged a GDP growth of 6.5% that has
been largely driven by its exports of readymade garments, remittances and the
domestic agricultural sector. The country has pursued export-oriented
industrialization. With its key export sectors include textiles, shipbuilding, fish and
seafood, jute and leather goods. It has also developed self-sufficient industries in
pharmaceuticals, steel and food processing. Bangladesh's telecommunication
industry has witnessed rapid growth over the years, receiving high investment from
foreign companies. Bangladesh also has substantial reserves of natural gas and is
Asia's seventh largest gas producer. Offshore exploration activities are increasing
in its maritime territory in the Bay of Bengal. It also has large deposits of
limestone. The government promotes the Digital Bangladesh scheme as part of its
efforts to develop the country's growing information technology sector.
Bangladesh is strategically important for the economies of Northeast India, Nepal
and Bhutan, as Bangladeshi seaports provide maritime access for these landlocked
regions and countries. China also views Bangladesh as a potential gateway for its
landlocked southwest, including Tibet, Sichuan and Yunnan.
In 2018, per-capita income was estimated as per IMF data at US$4,561 (PPP) and
US$1,754 (Nominal).Bangladesh is a member of the D-8 Organization for
Economic Cooperation, the South Asian Association for Regional Cooperation, the
International Monetary Fund, the World Bank, the World Trade Organization and
the Asian Infrastructure Investment Bank. The economy faces challenges of
infrastructure bottlenecks, insufficient power and gas supplies, bureaucratic
corruption, political instability, natural calamities and a lack of skilled workers.
Some indicators of measuring economic development of a country

 GDP (Gross Domestic Product) = 285.817 Billion (42rd Position in the

world- nominal) & $751.949 billion (PPP – Purchase power Parity) 31st nominal
 GDP Growth Rate- 7.86%
 Industrial production growth rate: 8.2%
 Debt - external: $45.07 billion
 GDP Per capita income =1810 USD (Rank- 143th)
 Per Capita Foreign Debt- 17136 Bdt
agriculture: 14.23%
GDP by sector industry: 33.66%
services: 52.11%

 Gross National Product (GNP) = 664.5 billion PPP dollars (2017)

 Inflation Rate - 5.78%
  Human Development Index (HDI) – 136th position among 189 countries.
 Money Supply= 1524.24 billion bdt
 Unemployment Rate= 4.37%
 Consumer Price Index (CPI)= 258.13 index
 Poverty rate =8.5%
 Literacy rate = 72.9%
 Foreign Remittances in Bangladesh = 14.98 Billion (Position 9th)
 Public debt= 33.1% of GDP
 Foreign Reserve = 33 Billion USD
 Foreign Debt Total- 3352 Core USD
 Current account balance of bangladesh- Above 10 billion
 Compare to GDP, our foreign debt- 14.3%. If the foreign debt is 40% of
GDP, it would be very concerning prospect. Recent foreign debt can be paid
at the year of 2057 if no more debt will taken.
 Bangladesh has the third-largest South Asian economy (after India and
Pakistan) and the second-highest foreign-exchange reserves (after India).

 The oldest bank still in existence is Banca Monte dei, headquartered in

Italy, which has been operating since 1472.
 The Swedish National Bank (Sveriges Riksbank) is the oldest central bank
in the world.
 Best usable & renowned banking product in nowadays?
SME Banking & Corporate Banking
 What is banks important assest?
Credit or Loan
SAFTA, SAARC, BIMSTEC, WTO,
Trade
AIIB, IMF, Commonwealth of
organizations
Nations, World Bank.

Exports $41 billion (FY2018)

Textiles, Garments (2nd largest exporter in the world),
Leather & Leather Goods, Pharmaceuticals and other
Export
Chemical products, Ceramic Products, Bicycles, Jute
goods
and Jute Goods, IT, Agricultural Products, Frozen
Food (Fish and Seafood)
Imports $43.49 billion (FY2017
Financial Intermediary is an entity that acts as the middleman between two
parties in a financial transaction. While a commercial bank is a typical financial
intermediary, this category also includes other financial institutions such as
investment banks, insurance companies, broker-dealers, mutual funds and pension
funds. Financial intermediaries offer a number of benefits to the average consumer
including safety, liquidity and economies of scale.
Financial Derivatives are securities which are linked to other securities (such as
stocks or bonds). Their value is based on the primary security they are linked to.
Financial derivative can be used for a number of purposes, including insuring
against price movements (hedging), increasing exposure to price movements for
speculation or getting access to otherwise hard-to-trade assets or markets.
Depository Institution is an institution that is legally allowed to accept monetary
deposits from consumers. Depository institutions solicit and accept savings of
people as demand deposits or time deposits and pay a fixed or variable rate of
interest. Examples of depository institutions are savings bank, commercial banks,
savings and loan associations, credit unions, leasing companies, merchant banks,
and specialized financial institutions.
Banking can be defined as the business activity of accepting and safeguarding
money owned by other individuals and entities, and then lending out this money in
order to earn profit. The banking services these days include issuance of debit and
credit cards, providing safe custody of valuable items, lockers, ATM services and
online transfer of funds across the country.
Bank is a financial institution where people deposit their money to keep it safe.
Banks play an important role in the financial system and the economy. As a key
component of the financial system, banks allocate funds from savers to borrowers
in an efficient manner.
Bank Products Savings account, house building loans, car loans, personal loans,
Certificates of Deposit (Term deposits), debit cards, credit cards, ATM cards,
premium banking, private banking, insurance, remittance, Cheque, traveler's
Cheques, mortgages, FAST (Fast And Secure Transfers) and overdraft.
Banking Instruments are referred to as the documents used in processing the
activities of banks. There are several banking instruments such as deposit slip,
demand draft, payment order and cheque.
Six Sigma concept within banking system = Six Sigma is very useful in the
banking industry for a variety of reasons. With the focus on customer service and
satisfaction, it is important that all processes run as efficiently as possible. The Six
Sigma methodology used in the banking industry is referred to as the DMAIC
process. It denotes: define, measure, analyze, improve and control. DMAIC itself
has five stages: - To define opportunities. - To measure performances. - To
analyze opportunity. - To improve performances. - To control performances.
The positive effect of the inception of new banks in the banking sector
comparatively better services can be expected from the newly emerged banks. As
there will be a rise of competition, every bank will try to provide better services
than before to the clients so that they can attract more clients.
Why the banking sector is growing so fast in Bangladesh
Currently the economy of Bangladesh is boom. The main reason behind it is
commercial banking. Banking sector is growing faster and faster because it
provides quality service and reasonable lending capital to the borrowers. Another
reason is that it provides reasonable interest rate to the public. The main motive of
commercial banking is to invest the capital and to gain the profit which is really
very helpful for the development of the economy. There are various schemes
which really attract the customers such as opening the account in a minimum
balance. There is a competition among the banks which enhance the better quality
of services. So, the banking sector is growing so fast.
Main Problems of the Banking Sector in Bangladesh
(1) Low quality of assets: 22% of total credit is classified. The ratio of classified
loans of nationalized commercial banks is 29%, private commercial banks 12%,
foreign commercial banks 3% specialized banks 47%.
(2) Lack of good governance, accountability and transparency: Illegal credit
facilities taken by directors in false names; interference of directors in routine
matters of the bank.
(3) Inadequacy of effective risk management system: Increased credit risk,
inappropriate management of assets and liabilities, weaknesses in exchange
transactions, absence of effective internal control and compliance culture have
caused weak accountability
How it will affect the economy if the government takes loan from Bangladesh
Bank
If the government takes loan from Bangladesh Bank, the country‘s rate of inflation
will increase because Bangladesh Bank will be needed to issue fresh banknotes to
disburse loan to the government.
How it will affect the economy if the government takes loan from private
commercial banks
If the government takes loan from the private banks, the individual or private
investment in the country will decrease or fall because the private entrepreneurs
will be unable to avail loan facilities from the private banks.
The impact on the banking sector if the government‘s loans taken from banks
increase
The impact depends on which sector the government is using the loan. In
Bangladesh, the government uses bank loans in a bid to provide subsidies in the
energy and power (oil and electricity) sectors. As a result, the private entrepreneurs
become unable to avail loan facilities from the banks. With the downfall in the
investment, the rate of unemployment increases.
How does the government directly borrow from the people (Describe with an
example)?
At the end of the taxation period, the government remains in a sticky situation —
how should it raise money when the economy is depressed. One great way to deal
with this problem is public borrowing. If the government gives consumers or
investors bonds in exchange for their money, the money they hand the government
becomes an investment that promises to repay the money with some amount of
interest after a certain period of time.
The impact of recession on the banking sector
As seen in the private sector much of the job-cuts are caused due to global
slowdown. It is the public sector undertaking banks which gained much confidence
due to job safety and security. More and more people are likely to turn towards
government institutions, particularly banks in the quest for safety and security.
Why the 2008-2012 global economic recession did not affect badly on the
economy of Bangladesh
The international business of Bangladesh is confined to some specific products
(readymade garments & knitwear items and leather products). So, the economy of
Bangladesh does not have any sound connection with the world economy. That is
why Bangladesh has not suffered much due to economic recession. Besides, the
inward remittance inflow and exports earnings from readymade garments (RMG)
items were satisfactory for Bangladesh.
Which institution is the regulatory body of the financial sector of Bangladesh?
Bangladesh Bank is the central bank and apex regulatory body for the country's
monetary and financial system.
Who is the monetary authority in Bangladesh?
Bangladesh Bank (the central bank of Bangladesh) has been given the authority by
the government to control money supply by raising or reducing interest rates. It
controls the money supply with the objective of controlling inflation or interest
rates. It also oversees exchange rate policy and supervises the banking sector.
Establishment of Bangladesh Bank:
Bangladesh Bank was established in Dhaka as a body corporate vide the
Bangladesh Bank Order, 1972 with effect from 16th December, 1971. At present it
has 10 offices located at Motijheel, Sadarghat, Chittagong, Khulna, Bogra,
Rajshahi, Sylhet, Barisal, Rangpur and Mymensingh in Bangladesh; total
manpower stood at 5807 (officials 3981, subordinate staff 1826) as on March 31,
2015.
Is Bangladesh Bank a government organization or an autonomous
organization?
Bangladesh Bank is an autonomous organisation. The Bangladesh Bank Order—
1972 (President's Order No. 127 of 1972) and the Bank Company Act—1991 have
given Bangladesh Bank the required degree of operational autonomy. The Banking
Company Act—1991 has empowered it to regulate banking sector as an
autonomous body.
Functions of Bangladesh Bank
Bangladesh Bank performs all the core functions of a typical monetary and
financial sector regulator, and a number of other non-core functions. The major
functional areas include:
 Formulation and implementation of monetary and credit policies
 Regulation and supervision of banks and non-bank financial institutions,
promotion and development of domestic financial markets
 Management of the country's international reserves
 Issuance of currency notes
 Regulation and supervision of the payment system
 Acting as banker to the government
 Money Laundering Prevention
 Collection and furnishing of credit information
 Implementation of the Foreign exchange regulation Act
 Managing a Deposit Insurance Scheme
Off-site Supervision
Is fundamental in monitoring the conduct of business activities of licenses it entails
reviewing and analyzing of the audited financial statements statutory returns and
any other reports submitted by licensees. The review allows the regulatory body to
ascertain whether compliance status of licensees with relevant laws and ascertain
the financial soundness and solvency position of licensees.
Off-site Supervision of Bangladesh Bank: The primary objective of the off-site
supervision is to monitor the financial health of the banks through CAMELS
rating, identifying the banks which show financial deterioration and would be
source for supervision concerns. This acts as a trigger for a timely remedial action.
The functions of off-site supervision include:-
 Determining the financial health of the banks through CAMELS rating.
 Assessing comprehensive risk management rating of the banks.
 Monitoring risk management activities of the banks and determining risk
rating through analyzing Risk Assessment Report, Minutes and
Questionnaire and taking corrective action to minimize different types of
risk such as credit risk, market risk, liquidity risk and operational risk.
 Ensuring proper maintenance of CRR and SLR.
  Ensuring statutory obligation regarding single borrower exposure and large
loan limit.
 Monitoring weak banks and appointment of observer.
 Monitoring state-owned commercial banks and two specialized banks and
any other weak banks.
 Reviewing and scrutinizing the minutes of the Board/Executive
Committee/Audit/Risk Committee Meeting of the banks to ensure corporate
governance in the banks and financial institutions.
 Monitoring the top 20 loan defaulters of the bank on quarterly basis.
 Ensuring maintenance of adequate capital to take up the risk of loss.
 Monitoring Internal Control and Compliance status of the bank through
analyzing Self-Assessment of Anti-Fraud Internal Controls report
 Monitoring the liquidity position of the banks monthly through liquidity
profile
Role of Bangladesh Bank in the economic development of Bangladesh
Being the country‘s central bank, Bangladesh Bank performs multiple vital roles
for national economic development. Bangladesh Bank is not only the guardian of
the money market; but also the guardian of the national economy.
 Ensuring development of the banking and financial system
 Ensuring modernization and expansion of the banking system
 Ensuring economic stability
 Controlling money supply in the market
 Enhancing savings and investment in the country
 Assistance to foreign trade
 Proper implementation of the Annual Development Programmes (ADP) of
the government
 Providing fund to different public welfare-oriented and development
activities/projects of the government
 Meeting the budget deficit
 Ensuring the development of the capital market
 Arranging different training programmes in a bid to enhance the skills of the
government officials
 Conducting different economic and development researches
 Acting as the financial advisor to the government
Why the central bank of a country is called the Lender of Last Resort
Lender of last resort is an institution (usually a country's central bank) that offers
loans to banks or other eligible institutions that are experiencing financial difficulty
or are considered highly risky or near collapse. In Bangladesh, Bangladesh Bank
acts as the lender of last resort to institutions that do not have any other means of
borrowing and whose failure to obtain credit would dramatically affect the
economy of the country.
The main objectives of monetary policy of Bangladesh Bank are:
 Price stability (both internal & external)
 Sustainable growth and development
 High employment
 Economic and efficient use of resources
 Stability of financial and payment system
How does Bangladesh Bank control the banks and NBFIs?
Bangladesh Bank is the regulatory body of banks, insurance companies and other
financial institutions. Bangladesh Bank can control these types of institutions by
controlling the interest rate, money supply, reserve requirements (CRR and SLR)
and open market operations.
Central Bank
Is the apex monetary institution which has been specially empowered to control
and regulate the entire banking system of a country. It works for the public welfare
and economic development of a country. It is governed by the government of a
country. It doesn‘t operate with a profit motive. Its primary aim is to achieve the
objectives of the economic policy of the government and maximize the public
welfare through monetary measures. It is generally a state-owned institution. It
doesn‘t deal directly with the public. It doesn‘t compete with the commercial
banks. Rather it helps them by acting as the lender of the last resort. It has the
monopoly of note-issue. It is the custodian of the foreign exchange reserves of the
country. It acts as the banker to the government.
Commercial Bank
Is a constituent unit of the banking system. The majority of stake is held by the
government as well as the private sector. Commercial banks have profit earning as
their primary objective. They are normally privately owned institutions. They
directly deal with the public. They compete with their counterpart banks to attract
more clients. They can‘t issue bank notes. They are only the dealers in foreign
exchange and perform foreign exchange business only on the approval of the
central bank. They act as bankers to the general public.
Islamic (Nonconventional) Banking
 Money is not a commodity though it is used as a medium of exchange and
store of value. Therefore, it cannot be sold at a price higher than its face
value or rented out.
 Profit on trade of goods or charging on providing service is the basis for
earning profit.
 Islamic bank operates on the basis of profit and loss sharing. In case, the
businessman has suffered losses, the bank will share these losses based on
the mode of finance used (Mudarabah and Musharakah).
 The execution of agreements for the exchange of goods and services is a
must while disbursing funds under Murabaha, Salam & Istisna contracts.
 Islamic banking tends to create link with the real sectors of the economic
system by using trade related activities. Since, the money is linked with the
real assets therefore it contributes directly in the economic development
Key Differences between Bank and Non-Bank Financial Institutions (NBFIs)

 A Bank is an organization that accepts customer cash deposits and then provides financial
services like bank accounts, loans, share trading account, mutual funds, etc.
 A NBFC (Non-Banking Financial Company) is an organization that does not accept
customer cash deposits but provides all financial services except bank accounts.
 A bank interacts directly with customers while an NBFI interacts with banks and
governments
 A bank indulges in a number of activities relating to finance with a range of customers,
while an NBFI is mainly concerned with the term loan needs of large enterprises
 A bank deals with both internal and international customers while an NBFI is mainly
concerned with the finances of foreign companies
 A bank's man interest is to help in business transactions and savings/investment activities
while an NBFI's main interest is in the stabilization of the currency
Some core liabilities of a commercial bank
 Share Capital and Reserves
 Reserve Funds
 Deposits (Fixed, Savings, Current & Others)
Liabilities are either the deposits of customers or money that banks borrow from
other sources to use to fund assets that earn revenue. Deposits are like debt in that
it is money that the banks owe to the customer but they differ from debt in that the
addition or withdrawal of money is at the discretion of the depositor rather than
dictated by contract.
NBFI is a financial institution that does not have a full banking license or is not
supervised by its national banking regulatory agency or the central bank like
Bangladesh Bank. NBFIs facilitate bank-related financial services such as
investment, risk pooling, contractual savings, and market brokering.
Liquidity Crisis refers to an acute shortage of liquidity. It is a negative financial
situation characterised by a lack of cash flow. For a single business, a liquidity
crisis occurs when the otherwise solvent business does not have the liquid assets
necessary to meet its short-term obligations (repaying its loans, paying its bills and
paying the salaries of its employees). If the liquidity crisis is not solved, the
company or bank must declare bankruptcy.
Causes of Liquidity Crisis of banks and financial institutions
 Excessive loan-taking by the government from the banks
 Existing high rate of inflation in the country
 Unusual investment in the share market
 When there is apprehension that the invested capital of the banks can rapidly
go into bankruptcy
 If the loan flow of the banks continue
 Lower bank rate policy (If the interest rate policy of the banks does not
remain relaxed or it remains comparatively very low in contrast to the
interest rate of the neighboring countries, then the bank depositors attempt to
withdraw their money from banks and invest the money in other countries
— which subsequently result in liquidity crisis as the volume of savings
declines)
How to resolve liquidity crisis (Remedies of liquidity crisis)
Government Interference: The government should formulate necessary laws in a
bid to maintain discipline in the banking sector and collect or realize the huge
amount of bad loans given by the banks.
  Stopping of taking excessive loans from banks: The government should stop
taking excessive loans from the state-owned banks which will help the banks
to run their usual commercial activities smoothly.
 Disbursing microcredit loans: The banks should refrain from disbursing
more long-term loans in a bid to recover from liquidity crisis. Considering
the present scenario, the banks should disburse microcredit loans. Resolving
political influence and obstruction: It is essential to resolve all political
influences and obstructions in proper implementation of the loan policies of
the banks. Upon political influence and pressure, banks often disburse loans
in many unproductive projects which subsequently turn into bad loans.
 Revising the monetary policy: The government should modify the monetary
policy in a bid to accelerate savings. In this regard, the government should
remain cautious so that the monetary policy does not further influence on the
liquidity crisis of the banks.
 Controlling inflation efficiently: It is the responsibility of the government to
control inflation. So, it should take necessary and time-befitting steps in this
regard.
 Bringing back or restring normalcy in the stock markets: The existing
liquidity crisis of the banks will be resolved to some extent if the
government recovers the money from those involved in the man
Currency Policy: The central bank of a country reserves a certain amount of gold
equivalent to the value of the money that will be printed — this is called Currency
Policy.
Monetary Policy is the process by which the monetary authority (central bank) of
a country controls the supply of money, often targeting a rate of interest in order to
attain a set of objectives oriented towards the growth and stability of the economy.
Monetary policy is maintained through actions such as increasing the interest rate
or changing the amount of money that the banks need to keep in the vault (bank
reserves). Monetary policy aims at controlling inflation and stabilize currency.
Types (Classification) of Monetary Policy There are two types of monetary
policy applied by the monetary authority to control the inflationary or recessionary
pressures in the economy — expansionary monetary policy and contractionary
monetary policy.
Expansionary Monetary Policy is adopted when the economy is in a recession
and the unemployment is the problem. The expansion policy is undertaken with an
aim to increase the aggregate demand by cutting the interest rates and increasing
the supply of money in the economy.
Contractionary Monetary Policy is applied when the inflation is a problem and
economy needs to be slowdown by curtailing the supply of money. The inflation is
characterized by increased money supply and increased consumer spending.
Fiscal Policy (in economics) is the use of government revenue collection (taxation)
and expenditure to influence macroeconomic conditions. Through fiscal policy,
regulators attempt to improve unemployment rates, control inflation, stabilize
business cycles and influence interest rates in an effort to control the economy. The
two instruments of fiscal policy are changes in the level and composition of
taxation and government spending in various sectors.
Money Supply is the entire stock of currency and other liquid instruments
circulating in a country's economy as of a particular time. Money supply includes
safe assets — such as cash, coins and balances held in checking and savings
accounts that businesses and individuals can use to make payments or hold as
short-term investments.
Commercial Banks are financial institutions that provide services, such as
accepting deposits, giving business loans and auto loans, mortgage lending and
basic investment products like savings accounts and certificates of deposits.
Traditional commercial banks are equipped with tellers, safe deposit boxes, vaults
and ATMs.
How do the commercial banks help Bangladesh Bank in the implementation
of Monetary Policy?
The commercial banks help the economic development of a country by faithfully
following the Monetary Policy of the central bank. In fact, the central bank
depends upon the commercial banks for the success of its policy of monetary
management in keeping with requirements of a developing economy.
Functions of the commercial banks
 To receive deposits of various types and disburse loans
 To make advance and investment against with or without securities
 To create medium of exchange through Cheque, bank draft and payment
order
 To issue letters of credit
  To make correspondent banking with overseas banks
 To place foreign currency funds with correspondences abroad
What are the major important roles of the commercial banks in a developing
country like Bangladesh?
Besides performing the usual commercial banking functions, banks in developing
countries play an effective role in their economic development. The majority of
people in such countries are poor, unemployed and engaged in traditional
agriculture. The major important roles of the commercial banks are —
 Mobilizing savings for capital formation
 Financing industry
 Financing trade
 Financing agriculture
 Financing consumer activities
 Financing employment generating activities
 Lending and deposit business
 Asset management
 Foreign exchange trading
Contributions of private banks in changing the socioeconomic condition of
Bangladesh
The private banks are disbursing loans in various sectors related to the economy of
Bangladesh. As a result, the readymade garments sector has developed in great
extent in Bangladesh. Moreover, private banks give much amount to the vulnerable
groups of people under the activities of their corporate social responsibilities
(CSR).
Important role of commercial banks in economic development (or in
developing countries like Bangladesh)
A well-developed banking system is essential for the economic development of a
country. In case of developing countries like Bangladesh, the commercial banks
are considered to be the backbone of the economy. Besides performing the usual
commercial banking functions, banks in developing countries like Bangladesh play
an effective role in their economic development. The majority of people in such
countries are poor, unemployed and engaged in traditional agriculture. There is
acute shortage of capital. People lack initiative and enterprise. The commercial
banks help in overcoming these obstacles and promoting economic development.
The commercial banks contribute much to the growth of a developing economy by
granting loans to agriculture, trade and industry, by helping in physical and human
capital formation and by following the monetary policy of the country.
Commercial banks are considered not merely as dealers in money but also the
leaders in economic development. They are not only the store houses of the
country‘s wealth but also the reservoirs of resources necessary for economic
development. They play an important role in the economic development of a
country. Commercial banks can contribute to a country‘s economic development in
the following ways:
 Mobilizing Savings for Capital Formation
 Financing Industry
 Accelerating the Rate of Capital Formation
 Financing Trade
 Financing Employment Generating Activities
 Financing Agriculture
 Fulfilment of Socio-economic Objectives
 Financing Consumer Activities
 Help in Implementation of Monetary Policy
 Regional Development
 Help in achieving balanced and regional development in different regions of
the country
Differences between nationalized banks and private banks
A nationalized bank is any commercial bank that is bought and controlled by the
government. Private Banks are owned, controlled and managed by an individual or
conducted by a partnership. A nationalized bank is formed by taking a bank and its
assets into the public ownership. The national government of the country holds the
ownership of nationalized banks. In nationalized banks the government controls
the bank. This could refer to taking control of the public shares, change in
management and new corporate strategy. Private Banks and nationalized banks
differ in the powers that control them and hence they both differ in many
characteristics.
  Private sector banks are owned by the private lenders while private banks
are managed and controlled by private promoters and these promoters are
free to operate according to the market forces.
 The interest rates of private banks are costly as compared to public sector
banks. The role of government is very important in nationalized banks.
These banks sustain easily with the aid of the government. Many of the
commercial banks were nationalized in order to save them from financial
debts. These banks provide more security to the customers in comparison to
the banks that are private.
 The nationalized banks are often associated with the social welfare and thus
the policies of such banks also reflect the same. The private banks focus on
profitability though they provide better and quick services.
 The high end customers of private banks are very important for the private
banks. However, in case of a major financial loss, the future of a private
bank remains unpredictable and the customers remain confuse about the
actual scenario.
CAMELS Rating System is an international bank-rating system where bank
supervisory authorities rate institutions according to six factors. It is a supervisory
rating system originally developed in the US to classify a bank's overall condition.
It is applied to every bank and credit union in the USA and is also implemented
outside the USA by various banking supervisory regulators. The six factors are
represented by the acronym CAMELS. Capital adequacy — Asset quality —
Management quality — Earnings — Liquidity — Sensitivity to Market Risk. Bank
supervisory authorities assign each bank a score on a scale of one (best) to five
(worst) for each factor. If a bank has an average score less than two, it is
considered to be a high-quality institution, while banks with scores greater than
three are considered to be less-than-satisfactory establishments. The system helps
the supervisory authority identify banks that are in need of attention.
CRM (Core Risk Management) is the process of identification, analysis and
either acceptance or mitigation of uncertainty in investment decision-making.
Essentially, risk management occurs anytime an investor or fund manager analyzes
and attempts to quantify the potential for losses in an investment and then takes the
appropriate action (or inaction) given their investment objectives and risk
tolerance. For example, the recession that began in 2008 was largely caused by the
loose credit risk management of financial firms.
Cash Ratio Reserve (CRR) refers to a portion of bank deposits (as cash) which
banks are supposed to keep or maintain with the central bank. This serves two
purposes. It ensures that a portion of bank deposits is totally risk-free and secondly
it enables that the central bank control liquidity in the system and control inflation
by tying their hands in lending money. If the central bank decides to increase the
percent of this, the available amount with the banks comes down. The central bank
is using this method (increase of CRR rate) to pull out the excessive money from
the banks. When inflation is high (money supply is high), Bangladesh Bank
increases the CRR rate.
Statutory Liquidity Ratio (SLR) is a part of bank deposits that the commercial
banks are supposed to maintain with themselves in liquid form. Liquid form means
cash, gold or government bonds. This is to ensure sufficient liquidity with the
commercial banks. Banks are required to invest a portion of their deposits in
government securities as a part of their SLR requirements. What SLR does is again
restrict the bank‘s leverage in pumping more money into the economy.
Bank Rate is the rate at which the central bank lends money to other domestic
commercial banks or financial institutions. The bank rate signals the central bank‘s
long-term outlook on interest rates. If the bank rate moves up, long-term interest
rates also tend to move up.
Call Rate is the interest rate paid by the banks for lending and borrowing for daily
fund requirement. Since banks need funds on a daily basis, they lend to and borrow
from other banks according to their daily or short-term requirements on a regular
basis.
Call Money is the money loaned by a bank that must be repaid on demand. Unlike
a term loan, which has a set maturity and payment schedule, call money does not
have to follow a fixed schedule. Brokerages use call money as a short-term source
of funding to cover margin accounts or the purchase of securities. The funds can be
obtained quickly.
Call Money Market is a short-term money market — which allows for large
financial institutions (such as banks, mutual funds and corporations) to borrow and
lend money at interbank rates.
Repo (Repurchase Agreement) means the purchase of securities with the
agreement to sell them at a higher price at a specific future date. For the party
selling the security (and agreeing to repurchase it in the future) it is a repo; for the
party on the other end of the transaction (buying the security and agreeing to sell in
the future) it is a reverse repurchase agreement.
Repo Rate is the rate at which banks borrow funds from the central bank against
collateral on the event of a deficiency of funds to meet the gap between the
demands they are facing for money (loans) and how much they have on hand to
lend. So, Repo Rate is the rate at which the central bank of a country lends money
to the commercial banks in the event of any shortfall of funds.
Reverse Repo Rate is the exact opposite of repo rate. The rate at which the central
bank borrows money from the banks is termed the reverse repo rate. The central
bank uses this tool when it feels there is too much money floating in the banking
system. If the reverse repo rate is increased, it means Bangladesh Bank will borrow
money from the bank and offer them a lucrative rate of interest.
Why is reverse repo rate lower than repo rate?
Reverse repo is the rate at which banks deposit their excess funds with Bangladesh
Bank. Reverse repo is always less than repo rate as Bangladesh Bank cannot give
more interest on deposits and charge lesser interest on loans. When we deposit
money in bank, they give us 4% interest whereas if we borrow loan, the banks
charge us 9%. The difference is bank‘s profit. Similarly, all banks deposit and
borrow from Bangladesh Bank. When banks deposit, Bangladesh Bank would pay
less (reverse repo) and when banks borrow from Bangladesh Bank, Bangladesh
Bank would charge high (repo rate).

Inflation is the continuous and persistent rise in the level of price. Inflation is the
overall general upward price movement of goods and services in an economy —
often caused by an increase in the supply of money. Sudden rise in the price level
is not calculated as inflation. The rise in price due to the holy month of Ramadan is
not counted as inflation because it is sudden/seasonal rise in the price level.
Moderate inflation (3% to 5%) is good for any economy. Inflation is usually
measured by the Consumer Price Index (CPI) and the Producer Price Index (PPI).
Effects of Inflation: The effects of inflation are judged in two particular areas of
the economy: (i) distribution of income and (ii) national output and employment
Effects of Inflation upon Debtors and Creditors Inflation benefits debtors
(borrowers) and harms creditors (lenders). Because of inflation, the borrower takes
―Dear Taka‖ and repays ―Cheap Taka‖. For example, Five (05) years back a
person could buy 1 kg of Hilsa fish for Tk. 500/-. Now it costs Tk. 1,000/-. So, if
he borrowed Tk. 1,000/- in 2012, he actually borrowed 1 kg of Hilsa fish. Now he
repaid Tk. 1,000/- in 2017; he actually repaid 0.50 kg of Hilsa fish.
Main causes (reasons) of inflation
 Increase in the level of money supply in the economy
 Increase in the level of government expenditure in implementing development
projects
 Excessive loan disbursement by the commercial banks
 Tax Holiday
 Shortfall in the production of daily necessary commodities
 Influence of trade unions (Because of rise in the wages of the workers)
 Surplus balance in foreign trade
 Meeting war expenditures
 Inflow of foreign aid, assistance and donation
 stocking of necessary commodities
 Black-marketing of necessary commodities
 Increase in the salaries and allowances of government officials and employees
 Underdeveloped transport and communication system
 Political instability
How does Bangladesh Bank control inflation?
 Controlling currency issue
 Through increasing bank rate
 Controlling loans
 Reducing government costs
 Increasing taxes
 Increasing CRR and SLR requirements
 Open market operations (sales of government savings certificates and bonds to
decrease the purchase power of the people)
Deflation is the continuous decrease in prices of goods and services. Deflation
occurs when the inflation rate becomes negative (below zero) and stays there for a
longer period.
Recession is a downturn in the economy often used to describe a fall in real GDP
lasting six months or more. A true economic recession can only be confirmed if
real GDP (Gross Domestic Product) growth is negative for a period of two or more
consecutive quarters.
The methods frequently used to measure inflation in Bangladesh There are three
indicators of measuring inflation. Such as — (a) Consumer Price Index (CPI) (b)
Producer Price Index (PPI) and (c) GDP deflator. In Bangladesh, we use the
indicator CPI to measure inflation.
Consumer Price Index (CPI): A measure of price changes in consumer goods
and services such as gasoline, food, clothing and automobiles. The CPI measures
price change from the perspective of the purchaser.
Producer Price Indexes (PPI): A family of indexes that measure the average
change over time in selling prices by domestic producers of goods and services.
PPIs measure price change from the perspective of the seller
Economic Growth is the growth of the Gross National Product (GNP) of a
country in a certain period of time. Economic Growth is an increase in the capacity
of an economy to produce goods and services, compared from one period of time
to another. It can be measured in nominal or real terms, the latter of which is
adjusted for inflation.
Devaluation is a reduction in the value of currency with respect to other monetary
units. It specifically implies an official lowering of the value of a country‘s
currency within fixed exchange rate system, by which the monetary authority
formally sets a new fixed rate with respect to a foreign reference currency.
Depreciation is the gradual conversion of the cost of a tangible capital asset or
fixed asset into an operational expense over the asset's estimated useful life.
Depreciation is permanent and continuing diminution in the quality, quantity or
value of an asset. It is the measure of wearing out of a fixed asset. All fixed assets
are expected to be less efficient as time goes on.
National Income is the total value a country's final output of all new goods and
services produced in one year.
Gold Standard is a monetary system in which a country's government allows its
currency unit to be freely converted into fixed amounts of gold and vice versa. The
exchange rate under the gold standard monetary system is determined by the
economic difference for an ounce of gold between two currencies.
EPZ stands for Export Processing Zone. It is a specialized zone for establishing
export-based industry.
Trademark is a special symbolic sign of a business person or that of products of
any company. It is a distinctive symbol that identifies particular products of a
trader to the general public. A trademark serves to exclusively identify a product or
service with a specific company. It is a recognition of that company's ownership of
the brand. Trademarked products are generally considered a form of property.
Common Market: When two or more countries form a customs union and free
movement of all factors of production among them then it is called common
market. European community has been working as a common market since 1992.
Common markets impose common external tariff on imports from non-member
countries.
Open Market is a situation in which companies can trade without restriction and
price depends on the amount of goods and the number of people buying them. It is
a competitive marketplace where buyers and sellers can operate without
restrictions. An open market is characterized by the absence of tariffs, taxes,
licensing requirements, subsidies, unionization and any other regulations or
practices that interfere with the natural functioning of the free market.
Sources of government earnings
 Government revenue collection  Domestic borrowing  foreign borrowing 
Foreign Aid
Budget: A budget is an estimation of revenue and expenses over a specified future
period of time. It is compiled and re-evaluated on a periodic basis. It may include
planned sales volumes and revenues, resource quantities, costs and expenses, asset
liabilities and cash flows.
Budget Deficit is the financial situation wherein the expenditures exceed the
revenues. The government generally uses this term in reference to its spending
rather than business or individuals.
Why does Bangladesh always have a deficit budget?
Having a deficit budget means the government is spending more than its earnings
and revenue collection. Not only Bangladesh but most of the developing countries
have a budget deficit. A budget deficit is ok if the government spends for the future
sustainable development (education or infrastructure). Having a budget deficit also
helps ensure a persistent growth of the GDP. If the government were to cut its
spending, it could have a negative effect on its GDP.
Economic Stability refers to an absence of excessive fluctuations in the
macroeconomy. An economy with fairly constant output growth and low and
stable inflation would be considered economically stable. Economic Stability is
term used to describe the financial system of a nation that displays only minor
fluctuations in output growth and exhibits a consistently low inflation rate.
Economic stability is usually seen as a desirable state for a developed country that
is often encouraged by the policies and actions of its central bank.
Sustainable Development: As per the World Commission on Environment and
Development, presented in 1987, Sustainable Development is the ―Development
that meets the needs of the present without compromising the ability of future
generations to meet their own needs.‖ It indicates the idea that social,
environmental and economic progresses are all attainable within the limits of our
earth‘s natural resources.
Gross National Product (GNP) is an estimated value of the total worth of
production and services by the citizens of a country on its own land or on foreign
land calculated on the basis of a year. GNP= GDP+NR (Net income flow from
assets abroad or net income receipts) – NP (net payment outflow to foreign assets).
Gross National Income (GNI) is the sum of a nation‘s gross domestic product
(GDP) plus net income received from overseas. GNI is defined as the sum of value
added by all producers who are residents in a nation, plus any product taxes (minus
subsidies) not included in output— plus income received from abroad such as
employee compensation and property income. GNI measures income received by a
country both domestically and from overseas.
GDP (Gross Domestic Product) is the financial value of the products and services
which are produced within a country‘s geographical area in a certain period of time
usually in a year. So, GDP is an estimated value of the total worth of a country‘s
production and services, within its boundary, by its nationals and foreigners,
calculated on the basis of a year.
Real GDP is the value of the final goods and services produced this year but
valued at the prices that prevailed in some specific year in the past. Real GDP =
consumption + investment + (government spending) + (exports – imports)
Nominal GDP is the value of the final goods and services produced this year but
valued these goods and services at the current prices.
Market Segmentation is a marketing strategy that involves dividing a broad target
market into subsets of consumers who have common needs and priorities and then
designing and implementing strategies to target them. Market segmentation
enables companies to target different categories of consumers who perceive the full
value of certain products and services differently from one another.
Market Risk is the possibility for an investor to experience losses due to factors
that affect the overall performance of the financial markets. The risk that a major
natural disaster will cause a decline in the market as a whole is an example of
market risk. Other sources of market risk include recessions, political turmoil,
changes in interest rates and terrorist attacks.
Blue Economy Initiative is recently gaining popularity in various countries of the
world. It is an integrated development strategy for fisheries, aquaculture, marine
tourism and ecosystem preserving local system of production and consumption.
Sustainable development of blue economy is possible through utilization of the
existing natural and mineral resources in the Bay of Bengal and its adjoining
oceans.
Market Economy is one which markets play a dominant role coordinating output
and price decisions. This is a free economy where prices are regulated by buyers
and sellers, other market forces and capitalism. The prices formed in markets
convey information and provide motivation for decision-takers.
Laissez-faire Economy is an economy of complete non-intervention by the
governments in the economy leaving all decisions to the market. The theory (given
by Scottish economist Adam Smith) is that the less the government is involved in
free market capitalism, the better of business will be and then by extension society
as a whole.
Barter Economy is an economy where people exchange goods and services
directly with another without any payment of money.
Mixed Economy is an economic system of a country in which some companies are
owned by the state and some are private that means both public and private sectors
have an important role to play national-building.
LDC (Least Developed Country) are the countries whose 80% population
depends on agriculture, more than half of population are unemployed, most of the
people are the victim of malnutrition & the illiteracy rate is high.
Consortium is a group of companies or banks combining to run a project.
Capital Gain is the amount by which the proceeds from the sale of a capital asset
exceed its original purchase price. It is an increase in the value of the capital assets
(investment or real estate) that gives it a higher worth than the purchase price.
Tariff is a tax imposed on imported goods and services. Tariffs are used to restrict
trade as they increase the price of imported goods and services making them more
expensive to consumers.
Tax is a sum of money demanded by a government for its support or for specific
facilities or services, levied upon incomes, property and sales. Taxes are generally
an involuntary fee levied on individuals or corporations that is enforced by a
government entity, whether local, regional or national in order to finance
government activities.
Direct Tax is a tax that is paid directly by an individual or organization to the
imposing entity. A taxpayer pays a direct tax to a government for different
purposes (including real property tax, personal property tax, income tax or taxes on
assets).
Indirect Tax is a tax that increases the price of a good so that consumers are
actually paying the tax by paying more for the products. An indirect tax is most
often thought of as a tax that is shifted from one taxpayer to another, by way of an
increase in the price of the good. Fuel, liquor and cigarette taxes are all considered
examples of indirect taxes, as many argue that the tax is actually paid by the end
consumer, by way of a higher retail price.
Tax Holiday is a government incentive programme that offers a temporary tax
reduction or elimination to businesses. Tax holidays are often used to reduce sales
taxes by local governments, but they are also commonly used by governments in
developing countries to help stimulate foreign investment. In developing countries
like Bangladesh, governments sometimes reduce or eliminate corporate taxes for
the purpose of attracting foreign direct investment or stimulating growth in
selected industries.
Capitalism is an economic system in which private-owned companies and
businesses undertake most economic activities (with the goal of generating private
profit) and most of work is performed by employed workers and income is
distributed through the operations of markets.
Consumer Surplus is an economic measure of consumer satisfaction — which is
calculated by analyzing the difference between what consumers are willing to pay
for a good or service relative to its market price. A consumer surplus occurs when
the consumer is willing to pay more for a given product than the current market
price.
Sunk Cost is a cost that has already been incurred and thus cannot be recovered.
A sunk cost differs from other future costs that a business may face (such as
inventory costs) because it has already happened. Sunk costs are independent of
any event that may occur in the future.
Opportunity Cost (also known as alternative cost) is the cost of a missed
opportunity. It is the opposite of the benefit that would have been gained had an
action, not taken, been taken—the missed opportunity.
Consumer Price Index (CPI) is a measure that examines the weighted average of
prices of a basket of consumer goods and services (transportation and food). The
CPI is calculated by taking price changes for each item in the predetermined basket
of goods and averaging them.
Human Development Index (HDI) is a tool developed by the United Nations to
measure and rank levels of social and economic development of different countries
based on some criteria — life expectancy, an index for school enrolment and adult
literacy and an index for GDP per capita. The HDI makes it possible to track
changes in development levels over time and to compare development levels in
different countries.
Purchasing Power is the value of a currency expressed in terms of the amount of
goods or services that one unit of money can buy. Purchasing power is important
because all else being equal, inflation decreases the amount of goods or services
we would be able to purchase.
Purchasing Power Parity (PPP) is an economic theory and a technique that
estimates the amount of adjustment needed on the exchange rate between countries
in order for the exchange to be equivalent to each currency's purchasing power. It
asks how much money would be needed to purchase the same goods and services
in two countries, and uses that to calculate an implicit foreign exchange rate.
Public-Private Partnership (PPP) is a mechanism for the government to procure
and implement public infrastructure and/or services using the resources and
expertise of the private sector. Where governments are facing lack of infrastructure
and require more efficient services, a partnership with the private sector can help
foster new solutions and bring finance. PPP combines the skills and resources of
both the public and private sectors through sharing of risks and responsibilities.
FDI (Foreign Direct Investment) occurs with the purchase of the ―physical
assets or a significant amount of ownership (stock) of a company in another
country in order to gain a measure of management control. FDI is an investment
from one country into another that involves establishing operations or acquiring
tangible assets (including stakes in other business). Example: An Indian company
having a stake in a Bangladeshi company.
FII (Foreign Institutional Investment) is an investment made by an investor in
the markets of a foreign nation. FII can enter the stock market easily and also
withdraw from it easily. But FDI cannot enter and exit that easily as FDI only
targets a specific sector.
Some incentives that Bangladesh offer to the foreign investors
 Tax Holiday for 5 to 10 years
 Duty-free machinery import facility
 One Stop Services for the foreign investors
Soft Loan is a loan with an artificially low rate of interest and such loans are
sometimes given to the developing nations by the industrialized nations and
multinational development banks (such as the Asian Development Bank), affiliates
of the World Bank and government agencies.
Black Money is the money which is earned through illegal activities controlled by
the rules and regulations of a country. Black money proceeds are usually received
in cash from underground economic activities and are not taxed. Recipients of
black money must hide it, spend it only in the underground economy, or attempt to
give it the appearance of legitimacy through money laundering.
Money Laundering is the process of concealing the source of money obtained by
illegal means. It is the process of changing large amounts of money obtained from
crimes (such as drug trafficking) into origination from a legitimate source. Money
laundering is committed by passing money secretly through legitimate business
channels by means of bank deposits, investment or transfers from one place to
another.
SWIFT (Society for Worldwide Interbank Financial Telecommunication)
provides a network that enables financial institutions worldwide to send and
receive information about financial transactions in a secure, standardized and
reliable environment. The members of this society can exchange the international
financial news easily, quickly and accurately by this network.
Payment Systems in Bangladesh: Payment systems are the means by which funds
are transferred among the financial institutions, businesses and households and are
considered as the critical factor for the functioning of a country‘s financial system.
With the mandate of Bangladesh Bank Order-1972, Payment Systems Department
endeavors for promoting new payment, clearing and settlement systems to ease
financial transactions and ensure circulation of money throughout the economy and
bring public confidence on the financial sector. In the journey of modernizing the
country‘s payment and settlement systems, Bangladesh Bank launched several
technology driven systems — such as Bangladesh Automated Cheque Processing
Systems (BACPS) in 2010, Bangladesh Electronic Fund Transfer Network
(BEFTN) in 2011, Mobile Financial Services in 2011 and the National Payment
Switch of Bangladesh (NPSB) in 2012 for improving the retail payments segment
of the country. With the launching of Bangladesh Real Time Gross Settlement
(BD-RTGS) System in 2015, the large value payments have also been modernized.
RTGS (Real Time Gross Settlement) is an advanced technology that facilitates
interbank fund transfers on real time basis, for both local and foreign currency
transactions. In other words, an RTGS system is a gross settlement system of
money or securities in which both processing and final settlement of funds transfer
instructions can take place continuously (in real time).
BD-RTGS System (Bangladesh Real Time Gross Settlement) is an electronic
inter-bank settlement system where transfer of funds takes place from one bank to
another bank on a real time‘ and on gross‘ basis. Settlement in real time‘ means
transaction is not subjected to any waiting period. Gross Settlement‘ means the
transaction is booked in the central bank‘s account on one to one basis without
netting with any other transaction. BD—RTGS system accommodates high value
(Taka 1,00,000/- and above) local currency and domestic foreign currency
transactions in five different currencies.
BEFTN (Bangladesh Electronic Funds Transfer Network) is a highly reliable
and efficient nationwide batch oriented electronic funds transfer system — which
facilitates inter-bank payments, clearing and settlement of electronic credits as well
as debits.
Letter of Credit (L/C) is an important document for international trade. A
promissory letter is issued by a bank mentioning the statement that the due money
for the dispatched goods will be paid from the importers at the right time is called
Letter of Credit (L/C). L/Cs are one of the most secure instruments available to
international traders. An LC is a commitment by a bank on behalf of the buyer that
payment will be made to the exporter, provided that the terms and conditions stated
in the LC have been met, as verified through the presentation of all required
documents.
Advantages of L/Cs (from the seller‘s perspective)  The seller has the
obligation of buyer's bank to pay for the shipped goods.  Reducing the
production risk if the buyer cancels or changes his order.  The opportunity to get
financing in the period between the shipment of the goods and receipt of payment
(especially in case of deferred payment).  The seller is able to calculate the
payment date for the goods.  The buyer will not be able to refuse to pay due to a
complaint about the goods.
Advantages of L/Cs (from the buyer‘s perspective)  The bank will pay the
seller for the goods on condition that the latter presents to the bank the determined
documents in line with the terms of the letter of credit.  The buyer can control the
time period for shipping of the goods.  By a L/C, the buyer demonstrates his
solvency.  In the case of issuing a L/C providing for delayed payment, the seller
grants a credit to the buyer.  Providing a L/C allows the buyer to avoid or reduce
pre-payment.
Back-To-Back Letters Of Credit (LC) is an arrangement in which one
irrevocable LC serves as the collateral for another — the advising bank of the first
LC becomes the issuing bank of the second LC. In contrast to a transferable LC,
permission of the ultimate buyer (the applicant or account party of the first LC) or
that of the issuing bank is not required in a back-to-back LC.
Revolving L/C is a single letter of credit that covers multiple-shipments over a
long period. Instead of arranging a new L/C for each separate shipment, the buyer
establishes a L/C that revolves either in value (a fixed amount is available which is
replenished when exhausted) or in time (an amount is available in fixed
instalments over a period such as week, month or year).
Difference between a bank guarantee and a L/C: A bank guarantee and a LC
are similar in many ways but there are two different things. L/C ensures that a
transaction proceeds as planned while bank guarantees reduce the loss if the
transaction does not go as planned.
Down Payment is a type of payment made in cash during the onset of the purchase
of an expensive goods or service. The payment typically represents only a
percentage of the full purchase price — in some cases it is not refundable if the
deal falls through. Financing arrangements are made by the purchaser to cover the
remaining amount owed to the seller.
Balance of Payment (BoP) of a country is defined as the record of all economic
transactions between the residents of a country and the rest of the world in a year.
These transactions are made by individuals, firms and government bodies. Thus
BoP includes all visible and non-visible transactions of a country in a year.
Balance of Trade (BoT) is the difference in value between a country's imports &
its exports over a period of time. BoT is the largest component of a country's
balance of payments. Debit items include imports, foreign aid, domestic spending
abroad & domestic investments abroad. Credit items include exports, foreign
spending in the domestic economy & foreign investments in the domestic
economy. A country has a trade deficit if it imports more than it exports; the
opposite scenario is a trade surplus.
Financial Inclusion is the availability of banking services at an affordable cost in
order to include the weaker section of the society in the banking system and
financial network. Financial inclusion has been increasingly recognised as an
important instrument for increasing savings habit, alleviating poverty, improving
household welfare and promoting micro and small business activities.
Mortgage is a contract whereby a borrower provides a lender with a lien on real
property as security against a loan. It is a method of using property as a security for
the performance of an obligation, usually the payment of a debt.
Collateral is a form of security such as life insurance policies or shares use to
secure a bank loan. Collateral is a specific asset pledged against possible default on
a bond. Mortgage bonds are backed by claims on property. Collateral trusts bonds
are backed by claims on other securities.
Security refers to anything pledged to cover a loan and interest thereupon for
stipulated period of time.
Debt is an amount of money borrowed by one party from another. Many
corporations/individuals use debt as a method for making large purchases that they
could not afford under normal circumstances.
Treasury bills, notes and bonds are marketable securities the government sells in
order to pay off maturing debt and to raise the cash needed to run the federal
government. When a person buys one of these securities, s/he is lending his/her
money to the government of the Bangladesh. Treasury bills, notes and bonds are
securities that have a stated interest rate that is paid semi-annually until maturity.
What make notes and bonds different are the terms to maturity. Notes are issued in
two-, three-, five- and 10year terms. Conversely, bonds are long-term investments
with terms of more than 10 years.
Treasury Bill is government promissory letters. The government receives short-
term loan (short-term liabilities) through it. Treasury bill is the written document
by which the government is pledged to pay the due loan back with interest after
three months.
Treasury Bond refers to a certificate issued by the government acknowledging
that money has been lent to it and will be paid back with interest. Bond is a debt
investment in which an investor loans money to an entity (typically governmental)
which borrows the funds for a defined period of time at a variable or fixed interest
rate. Bonds are used by sovereign governments to raise money and finance a
variety of projects and activities.
Bill Of Exchange is a non-interest-bearing written and unconditional order used
primarily in international trade that binds one party (the drawer) to pay a fixed sum
of money to another party (the drawee) at a predetermined future date for payment
of goods and services received. Bills of exchange are similar to Cheques and
promissory notes.
Foreign Exchange means any currency other than Bangladesh currency which
includes all coins, currency notes, bank notes, postal notes, money orders, cheques,
drafts, letters of credit, bills of exchange, promissory notes, all deposits, credits and
balances payable in any foreign currency.
Why do we need foreign exchange?  To purchase goods from abroad like food,
fuel, capital machinery, raw materials and medicines  To purchase services from
abroad  For travelling abroad for various purposes  Taking treatment abroad 
Taking study abroad  Payment of loan from abroad
Exchange Rate is the price of a nation‘s currency in terms of another currency.
Exchange rate thus has two components, the domestic currency and a foreign
currency and can be quoted either directly or indirectly.
Floating Rate is the system of exchange rate in which exchange rate is determined
by forces of demand and supply of foreign exchange market. Value of currency is
allowed to fluctuate or adjust freely as per change in demand and supply of foreign
exchange. There is no official intervention in foreign exchange market
Debit is an accounting entry that results in either an increase in assets or decrease
in liabilities on a company‘s balance sheet or in a person‘s bank account. A debit
on accounting entry will have opposite effects on the balance depending on
whether it is done to assets or liabilities, with a debit to assets indicating an
increase and vice versa for liabilities.
Credit is an accounting entry that either decreases assets or increases liabilities
and equity on the company‘s balance sheet. On the company‘s income statement, a
debit will reduce net income while a credit will increase net income.
Bank Draft is an instrument issued by one branch of a bank on another branch of
the bank containing an order to pay a certain sum on demand to the person named
on the draft. It is issued to transfer funds and to settle outstanding balances
between banks or to provide a customer with funds payable at a bank in a different
location. Bank drafts are valid for a certain period generally for six months as
indicated over the face of draft.
Demand Draft is an instrument used for effecting transfer of money. It is a
negotiable instrument. Cheque and Demand-Draft both are used for transfer of
money. We can 100% trust a DD. It is a banker's check. A check may be
dishonoured for lack of funds, but a DD cannot be dishonoured. Cheque is written
by an individual and demand draft is issued by a bank. People believe banks more
than individuals.
Cheque is a negotiable instrument instructing a bank to pay a specific amount
from a specific account held in the maker/depositor name with that bank. Cheque
is a bill of exchange drawn on a specified banker ordering the banker to pay a
certain sum of money to the drawer of cheque or another person. Money is
generally withdrawn by clients by cheques. Cheque is always payable on demand.
The duration of a valid Cheque is six months.
Dishonour of Cheque means non-payment of a cheque by the paying banker with
a return memo giving reasons for the non-payment.
Difference between Cheque and Money (Banknote) Cheque is not legal tender.
It is not obligatory to all to receive it and it is handed over only for once. But
money or banknote is the legal tender. It is legally obligatory to all to receive it.
Banknotes are handed over many times.
Niche Market is a small but profitable market segment on which a specific
product is focused. It defines the product features aimed at satisfying specific
market needs as well as the price range, production quality and the demographics
that is intended to impact.
Investment Bank: Investment bankers are financial middlemen in security
offering process. They purchase securities from companies and governments and
resell them to the general public. Thus, investment banks bring together suppliers
and users of long-term funds in a capital market and thereby play a key role in
security offering process. They do not invest their own funds permanently nor
accept and guard the savings of others as commercial banks do. So, investment
banks are neither investors nor bankers. The traditional function of the investment
banks has been to act as middlemen in channeling individual's savings and funds
into the purchase of business securities.
Merchant Bank is a bank that deals mostly in international finance and long-term
loans for companies and underwriting. Merchant banks do not provide regular
banking services to the general public. A merchant bank is a financial institution
that specializes in services such as acceptance of bills of exchange, hire purchase
or instalment buying, international trade financing, long-term loans and
management of investment portfolios.
ATM is a machine that serves as a computer terminal and allows a customer to
access account balance and information on a bank (thru use of a magnetically
encoded plastic card) and conduct financial transactions. ATMs are available 24
hours. Convenience is a major benefit of using ATM.
Remittance is the amount of currency which is sent by the immigrants to their
own country by legal means.
Cost Benefit Analysis is the analysis of measurement of cost and benefit of an
economic activity.
Payment in due course is payment made at or after the maturity of a promissory
note or bill of exchange to its holder in good faith and without notice that his or her
title to the bill is defective (if such is the case).
FDR (Fixed Deposit Receipt) is a type of account that offers the customers the
opportunity to invest a fixed amount of money for fixed period at a fixed rate of
interest.
Current Account is the account in which money can be deposited and drawn out
at more times of daily bank hours. Current Accounts are made for the business
class persons and account holders can made many transaction in a day. The current
account attracts no interest rate. Sometimes, banks can charge some charges from
this account. The deposits in current account are the most liquid deposits and there
are no limits for number of transactions or the amount of transactions in a day.
Fixed Account is the account which can be run on the basis of agreement for a
certain period of time usually for three to eight months.
Savings Account is the account which can be started with a small amount of
money to motivate the people in savings. Such accounts are made for the
household saving purpose and interest rate is decided by the central bank and
presently it is 4%. The savings accounts are also known as individual account
through which the account holders get cheque. There is lot of flexibility for
deposits and withdrawal of funds from these types of account.
STD Account: The term Short Term Deposit (STD) refers to an account in which
an amount of money is placed in a bank or financial institution for a term no longer
than 01 year. An STD will usually earn a fixed rate of interest.
Certificate of Deposit (CD) is a savings certificate entitling the bearer to receive
interest. A banking certificate bears a maturity date, a specified fixed interest rate
and can be issued in any denomination. CDs are generally issued by the
commercial banks. The term of a CD ranges from one month to 05 years.
SDR (Special Drawing Rights) is a form of international money created by the
IMF. It is designed to augment international liquidity by supplementing the
standard reserve currencies. IMF provides loans to its members in case of
exchange rate instability in SDRs. SDR is a potential claim on the freely usable
currencies of IMF members and it operates as a supplement to the existing reserves
of member countries. The IMF created SDR in 1969 in response to concerns about
the limitations of gold and dollars as the sole means of settling international
accounts. 1 SDR = $112.51 Taka (Present Conversion Rate)
Balance Sheet is a financial statement that summarises a company‘s assets,
liabilities and equity of the shareholders at a specific point in time — showing the
financial condition of a company. Accounts that are transferred to the balance sheet
are not closed. Formula: Assets = Liabilities + Equity of the Shareholders
Asset is the item of property and goods owned by any individual, business
enterprise or bank. In accounting terms, it is any item (real or fictitious) that can be
given a monetary value. Assets are mainly two types — fixed and current. Fixed
assets include land, building, plant, machinery etc. Current assets are stock of raw
materials, finished goods, goods lying in process of manufacturing spares, debtors
etc. In banks, current assets are cash in hand and deposits held in other banks,
investment to the customers and investment securities etc.
Liability is a legal obligation expressed in terms of money. Liability is recognized
claim or debt which is owned by an enterprise to one or more people. The liability
side of a balance sheet shows the amount of money which has been made available
to the enterprise. Liabilities are of two types — current liability and term liability.
In banks, liabilities are deposits of individuals and institutions, owners equity, loan
from bank and other liabilities like provision for classified or unclassified
investments, taxes, VAT, provision for bonus, gratuity etc.
Balance Sheet of a Commercial Bank: A balance sheet is a financial report that
shows the value of a company's assets, liabilities and owner's equity on a specific
date — usually at the end of an accounting period (such as a year). An asset is
anything that can be sold for value. A liability is an obligation that must eventually
be paid and thus it is a claim on assets. The owner's equity in a bank is often
referred to as bank capital — which is what is left when all assets have been sold
and all liabilities have been paid. The relationship of the assets, liabilities and
owner's equity of a bank is shown by the following equation: Bank Assets = Bank
Liabilities + Bank Capital (owner's equity) A bank uses liabilities to buy assets —
which earns its income. By using liabilities (such as deposits or borrowings) to
finance assets (such as loans to individuals or businesses) or to buy interest earning
securities, the owners of the bank can leverage their bank capital to earn much
more than would otherwise be possible using only the bank's capital. Assets and
liabilities are further distinguished as being either current or long-term. Current
assets are assets expected to be sold or otherwise converted to cash within 1 year.
Otherwise, the assets are long-term. Current liabilities are expected to be paid
within 1 year. Otherwise, the liabilities are long-term. Working Capital is the
excess of current assets over current liabilities (a measure of its liquidity) —
meaning its ability to meet short-term liabilities: Working Capital = Current Assets
– Current Liabilities Working capital should be sufficient to meet current
liabilities. However, it should not be excessive since capital in the form of long-
term assets usually has a higher return. The excess of the bank's long-term assets
over its long-term liabilities is an indication of its solvency. Assets earn revenue
for the bank & include cash, securities, loans, property and equipment that allow it
to operate. The balance sheet of a commercial bank has two main sides — the
liabilities and the assets. From the balance sheet of a bank, a system can be known
easily which a bank has followed for raising funds and allocation of these funds in
different asset categories. Bank can have others money with it. It can be in terms
of shareholders share capital or depositors deposits. This money is the bank's
liabilities. On the other hand, own sources of income of the bank leads to
generation of assets for bank.
Financial Market is a means of bringing together buyers and sellers to make
transactions. Bonds, stocks and assets are traded in financial market. Financial
markets are traditionally segmented into money market and capital market.
 Stock Market is the market in which shares of publicly held companies are issued
and traded either through exchanges or over-the-counter markets. Also known as
the equity market, the stock market is one of the most vital components of a free-
market economy, as it provides companies with access to capital in exchange for
giving investors a slice of ownership in the company.
Share is a unit of ownership that represents an equal proportion of a company's
capital. It entitles its shareholder to an equal claim on the company's profits and an
equal obligation for the company's debts and losses. Shares are units of ownership
interest in a corporation or financial asset.
Fazle Kabir: The 11th Governor of Bangladesh Bank
Call Money Rate- 3.91

Banks
After the independence, banking industry in Bangladesh started its journey with 6 nationalized
commercialized banks, 3 State owned specialized banks and 9 Foreign Banks. In the 1980's
banking industry achieved significant expansion with the entrance of private banks. Now, banks
in Bangladesh are primarily of two types:

 Scheduled Banks: The banks that remain in the list of banks maintained under the
Bangladesh Bank Order, 1972.
 Non-Scheduled Banks: The banks which are established for special and definite objective
and operate under any act but are not Scheduled Banks. These banks cannot perform all
functions of scheduled banks.

There are 59 scheduled banks in Bangladesh who operate under full control and supervision of
Bangladesh Bank which is empowered to do so through Bangladesh Bank Order, 1972 and Bank
Company Act, 1991. Scheduled Banks are classified into following types:

 State Owned Commercial Banks (SOCBs): There are 6 SOCBs which are fully or
majorly owned by the Government of Bangladesh.

 Sonali Bank Limited

 Janata Bank Limited
 Agrani Bank Limited
 Rupali Bank Limited
 BASIC Bank Limited
 Bangladesh Development Bank Limited

 Specialized Banks (SDBs): 3 specialized banks are now operating which were
established for specific objectives like agricultural or industrial development. These
banks are also fully or majorly owned by the Government of Bangladesh.
  Bangladesh Krishi Bank
 Rajshahi Krishi Unnayan Bank
 Probashi Kallyan Bank
 Private Commercial Banks (PCBs): There are 41 private commercial banks which are
majorly owned by individuals/the private entities. PCBs can be categorized into two
groups:

 Conventional PCBs: 33 conventional PCBs are now operating in the industry. They
perform the banking functions in conventional fashion i.e. interest based operations.
 Islami Shariah based PCBs: There are 8 Islami Shariah based PCBs in Bangladesh and
they execute banking activities according to Islami Shariah based principles i.e. Profit-
Loss Sharing (PLS) mode.

 Al-Arafah Islami Bank Limited

 EXIM Bank Limited
 First Security Islami Bank Limited
 Islami Bank Bangladesh Limited
 Shahjalal Islami Bank Limited
 Social Islami Bank Limited

 Foreign Commercial Banks (FCBs): 9 FCBs are operating in Bangladesh as the branches
of the banks which are incorporated in abroad.

 Bank Al-Falah Limited

 Citibank N.A
 Commercial Bank of Ceylon PLC
 Habib Bank Limited
 HSBC
 National Bank of Pakistan
 Standard Chartered Bank
 State Bank of India
 Woori Bank

There are now 5 non-scheduled banks in Bangladesh which are:

 Ansar VDP Unnayan Bank,

 Karmashangosthan Bank,
 Grameen Bank,
 Jubilee Bank,
 Palli Sanchay Bank

FIs
Non-Bank Financial Institutions (FIs) are those types of financial institutions which are regulated
under Financial Institution Act, 1993 and controlled by Bangladesh Bank. Now, 34 FIs are
operating in Bangladesh while the maiden one was established in 1981. Out of the total, 2 is fully
government owned, 1 is the subsidiary of a SOCB (State owned Commercial Bank- Bangladesh
Investment Corporation Limited), 15 were initiated by private domestic initiative and 15 were
initiated by joint venture initiative. Major sources of funds of FIs are Term Deposit (at least three
months tenure), Credit Facility from Banks and other FIs, Call Money as well as Bond and
Securitization.

 Specialized financial institutions (semi-formal sector)

 Bangladesh House Building Finance Corporation (BHBFC)
 Palli Karma Sahayak Foundation (PKSF)

The major difference between banks and FIs are as follows:

 FIs cannot issue cheques, pay-orders or demand drafts.

 FIs cannot receive demand deposits,
 FIs cannot be involved in foreign exchange financing,
 FIs can conduct their business operations with diversified financing modes like
syndicated financing, bridge financing, lease financing, securitization instruments, private
placement of equity etc.

Total Number of Banks = 64

•• Scheduled Banks = 59 but should be 61
•• Non-Scheduled Banks = 05
•• Last Scheduled Specialized Bank = Probashi Kollyan Bank (on 30-Jul-2018)
•• Last Scheduled Bank / Scheduled Private Commercial Bank = Community Bank Bangladesh
Limited [Scheduled on 01/11/2018] & Bengal Commercial Bank Limited.

Different Types of Banking Services in Bangladesh

What Is Retail Banking? Types and Economic Impact

Retail banking provides financial services for families and small businesses. The

three most important functions are credit, deposit, and money management.

First, these banks offer consumers credit to purchase homes, cars, and furniture.
These include mortgages, auto loans, and credit cards. The resulting consumer
spending drives almost 70 percent of the U.S. economy. They provide
extra liquidity to the economy this way. Credit allows people to spend future
earnings now. Retail banks also offer small business loans to entrepreneurs. These
small companies create up to 65 percent of all new jobs as they grow.

Second, retail banks provide a safe place for people to deposit their money.
Savings accounts, certificates of deposit, and other financial products offer a better
rate of return compared to stuffing their money under a mattress. Banks base their
interest rates on the Fed funds rate and Treasury bond interest rates. That's why
they rise and fall over time. The Federal Deposit Insurance Corporation insures
most of these deposits.

Third, retail banks allow you to manage your money with checking accounts and
debit cards. That means you don't have to do all your transactions with dollar bills
and coins. All of this can be done online, making banking an added convenience.

How Retail Banks Work

Retail banks use the depositors' funds to give out loans. They make money by
charging higher interest rates on loans than they pay on deposits. 

The Federal Reserve, the nation's central bank, regulates most retail banks. Except

for the smallest banks, it requires all other banks to keep around 10 percent of their
deposits in reserve each night. They are free to lend out the rest. At the end of each
day, banks that are short of the Fed's reserve requirement borrow from other banks
to make up for the shortfall. This amount borrowed is called the fed funds. 

Retail banking refers to the division of a bank that deals directly with retail
customers. Also known as consumer banking or personal banking, (An
institution which accepts deposits, makes personal loans, and offers related
services.)
Retail banking is the visible face of banking to the general public, with bank
branches located in abundance in most major cities.

Banks that focus purely on retail clientele are relatively few, and most retail
banking is conducted by separate divisions of banks, large and small. Customer
deposits garnered by retail banking represent an extremely important source of
funding for most banks.

Retail Banking Products and Services

Retail banking encompasses a wide variety of products and services, including:

 Checking and savings accounts – customers are generally charged a monthly

fee for checking accounts; savings accounts offer slightly higher interest
rates than checking accounts but generally cannot have checks written on
them.
  Certificates of deposit (CDs) and guaranteed investment certificates (in
Canada) – these are the most popular investment products with conservative
investors, and an important funding source for banks since the funds in these
products are available to them for defined periods of time.
 Mortgages on residential and investment properties – because of their size,
mortgages account for both a substantial part of retail banking profits, as
well as the biggest chunk of a bank’s exposure to its retail client base.
 Automobile financing – banks offer loans for new and used vehicles, as well
as refinancing for existing car loans.
 Credit cards – the high interest rates charged on most credit cards make this
a lucrative source of interest income and fees for banks.
 Lines of credit and personal credit products – home equity lines of credit
(HELOC) have diminished significantly in their importance as a profit
center for banks after the U.S. housing collapse and subsequent tightening of
mortgage lending standards.
 Foreign currency and remittance services – the increase in cross-border
banking transactions by retail clients, and the higher spreads on currencies
paid by them, makes these services a profitable offering for retail banking.

Retail banking clients may also be offered the following services, generally
through another division or affiliate of the bank:

 Stock brokerage (discount and full-service)

 Insurance
 Wealth management
 Private banking

The level of personalized retail banking services offered to a client depends on his
or her income level and the extent of the individual’s dealings with the bank. While
a client of modest means would generally be served by a teller or customer service
representative, a high-net-worth individual who has an extensive relationship with
the bank would typically have his or her banking requirements handled by an
account manager or private banker. Although brick-and-mortar branches are still
necessary to convey the sense of solidity and stability that is crucial to banking, the
reality is that retail banking is perhaps one area of banking that has been most
impacted by technology, thanks to the proliferation of ATMs and the popularity of
online and telephone banking.
Corporate banking, by comparison

Corporate banking, also known as business banking, refers to the aspect of banking
that deals with corporate customers. The term was originally used in the United
States to distinguish it from investment banking, after the Glass-Steagall Act of
1933 separated the two activities.

While that law was repealed in the 1990s, corporate banking and investment

banking services have been offered for many years under the same umbrella by
most banks in the United States and elsewhere. Corporate banking is a key profit
center for most banks; however, as the biggest originator of customer loans, it is
also the source of regular write-downs for loans that have soured. 

Corporate Banking Products and Services

The corporate banking segment of banks typically serves a diverse range of clients,
ranging from small- to mid-sized local businesses with a few millions in revenues
to large conglomerates with billions in sales and offices across the country.
Commercial banks offer the following products and services to corporations and
other financial institutions:

 Loans and other credit products – this is typically the biggest area of
business within corporate banking, and as noted earlier, one of the biggest
sources of profit and risk for a bank.
 Treasury and cash management services – used by companies for managing
their working capital and currency conversion requirements.
 Equipment lending – commercial banks structure customized loans and
leases for a range of equipment used by companies in diverse sectors such as
manufacturing, transportation and information technology.
 Commercial real estate – services offered by banks in this area include real
asset analysis, portfolio evaluation, and debt and equity structuring.
 Trade finance – involves letters of credit, bill collection and factoring.  
 Employer services – services such as payroll and group retirement plans are
typically offered by specialized affiliates of a bank.

Through their investment banking arms, commercial banks also offer related
services to their corporate clients, such as asset management and securities
underwriters.
Biggest Retail and Commercial Banks 

The amount of domestic deposits held by a bank is a widely used measure to gauge
the size of its retail banking operation. Based on that, as well as consolidated
assets, the biggest commercial and retail banks in the United States are:

 JPMorgan Chase
 Wells Fargo
  Bank of America
 Citigroup
 U.S. Bancorp

In Canada, the five biggest commercial and retail banks are:

 Royal Bank of Canada

 Toronto-Dominion Bank
 Scotiabank
 Bank of Montreal
 Canadian Imperial Bank of Commerce

Wholesale Banking

Definition: The Wholesale Banking refers to the provisions of banking services

offered to the industrial and business entities which are rich in resources and have
sound income statements. These institutes are generally the mortgage brokers,
corporate houses, multinationals, government agencies, real estate investors, other
banks and financial institutions.

The wholesale banking comprises of the services such as Finance Wholesaling,

Mergers and acquisitions, Underwriting, Market Making, Consultancy and Fund
Management. The need for the wholesale banking arises because of the inadequacy
of retail banking in meeting the industry requirements and a large number of
financial transactions of a huge cost.

The Industrial or business entities can avail several advantages from the wholesale
banking such as single point of contact for all the corporate dealings whether
national or international, expert recommendations, specialized products customized
as per the corporate requirements, etc.
Generally, the rate at which the funds are lent to the business entities is less as
compared to the lending rates for an individual. This is mainly because of the huge
amount and the number of transactions involved in the larger institutes.

Virtual Banking

Definition: The Virtual Banking is the provision of accessing the banking and
related services online without actually going to the bank branch/office in person.
Simply, availing the banking services through an extensive use of information
technology without any requirement for the physical walk-in premises is called as
virtual banking.

Any financial institution that offers the traditional banking services online is
termed as a virtual bank. Virtual banking enables a customer to pay bills online,
check account details, secure loans, withdraw and deposit money anytime as per
the convenience.

Some common forms of virtual banking are, ATMs, use of magnetic ink character
recognition code (MICR), Electronic clearing service scheme, electronic fund
transfer scheme, RTGS, computerized settlement of clearing transactions,
centralized fund management schemes, etc.

One of the advantages of virtual banking service is that the transactions can be
checked in real time, i.e. as and when the transactions are made and the customer is
not required to wait for the day or a month to end to check the transaction details.
The cost incurred in handling the transactions is lower than the traditional form of
banking, and also, it charges low fee comparatively because of less overhead
expenses.

Also, the response time has increased manifold with the invent of online banking.
The customer can access his account any time round the clock and indulge in the
banking activities as per his convenience.

Kiosk Banking

Definition: The Kiosk Banking is the initiative taken by the RBI for those living
in villages or other remote areas who are deprived of banking services due to the
non-availability of a bank branch in their locality. In such arrangement, the person
is not required to go the bank to avail the banking services. Instead, the bank
comes to the village where the person can make the transactions.
Kiosk banking is the important step taken towards the financial inclusion. The
financial inclusion means enabling the weaker sections of the society or low-
income groups to access financial services and avail the credit at a low or
affordable cost. The Kiosks are the small internet-enabled booths established in the
villages where the customers can come and avail the basic banking services.

The idea behind the functioning of the kiosk is that it should be supported by the
banks in private, public and cooperative sectors through the use of shops. These
acts as a touch point between a bank and the customer where the banking services
such as deposits, withdrawals, remittances apart from the micro-credit, insurance,
and overdraft services could be delivered.

This can be done through a retailer, who can open a no-frills bank account for a
customer by taking the photographs and recording the fingerprints and other
necessary details of the customer. Then, these details along with the requisite
documents are sent to the bank branch to carry out their processing. Once the
account is created, the customer can withdraw or deposit money anytime through
the internet enabled kiosk branch.

MSME Banking

Bangladesh Bank (BB) has updated its definition of micro, cottage, small and
medium enterprises in line with the National Industrial Policy 2016 and set a limit
to the amount of credit they can avail.
Moreover, banks must set aside for SMEs 20 percent of the loans they give out in
2017 and raise it to 25 percent by 2021. Of that for SMEs, at least 50 percent has to
be kept for cottage, micro and small enterprises, said a circular published on
Thursday.

“Overall, priority should be given to lending to small enterprises compared to

medium enterprises,” the BB said.

BB's January 2016 circular had called for a minimum 30 percent SME lending to
manufacturing sector, 15 percent for service sector and a maximum 55 percent for
trading.

“But it is being observed that many banks and financial institutions are not lending
to SMEs up to expected level,” said the circular.

Now the instruction is to increase lending to manufacturing SMEs to at least 40

percent by 2021, service SMEs to at least 25 percent and trading SMEs a
maximum 35 percent.

At least 10 percent of the lending will have to go to women SME entrepreneurs.

This rate will have to be raised to 15 percent by 2021. Bankers have welcomed the
new regulations.
Selim RF Hussain, managing director of Brac Bank, said the changes are positive
and aligned with the government's broader industrial policy, reflecting the
transformational changes that have taken place in the economy in the last seven-
eight years. 

“The definitions of micro, small and medium are clearer and better than what they
were,” he told The Daily Star.

He pointed at some new exposure requirements of the new regulations. “It will
take a few years for various banks to increase their SME lending to 20 percent of
their total portfolio.”  

“Brac Bank is already following the regulations as we are SME-focused. But it will
be difficult for other banks to achieve. Hopefully, the central bank will provide
adequate time to them as they won't be able to do it overnight,” he said.

Mehbub Benazir, head of SME of Eastern Bank Ltd, said under the new
regulations, banks would not be able to reach their SME lending target through
concentration in just one sector.

“They have to work in all sectors, which is better for all,” he said, adding that the
increase in credit limit would also help banks make more investment.

NRB Banking

Migrants' Sponsored Banking [MSB] system, is a newly invented banking

structure in which initial capital are funded by non-resident nationals [NNs] Non
resident nationals provide most of the deposits and these deposits are subsequently
lent to the home country.

The bank has multiple objectives within its single structure and typical deposit-
lending functions. The first objective is to be a platform of NNs for their better
investment into the home economy and long term objective is to reduce
dependency on international financial institutes [IFIs] for external financing in
home economy.

Migrants Bangladeshis (Sylheti diaspora) were demanding such type of bank since
1990s. However, Md. Bayazid Sarker an economist and Central Bank official of
Bangladesh first develop a theoretical structure of the bank and officially floats the
idea in his research paper titled “Alternative Resource of World Bank for External
Financing in Bangladesh: A Foreign Remittance Approach” on December 15, 2007
in Dhaka[2]…[11]. Government makes believe by the continuous pressure from
Bangladeshi Sylheti diaspora around the world. Afterward Central Bank of
Bangladesh [Bangladesh Bank] call for NRB bank applications in 2011 and finally
issued three NRB Bank (Non-resident Bangladeshis Bank) licenses in 2013 though
newly born banks need much effort to come into its basic and broad objective.
Newly born NRB Banks are NRB Commercial Bank Limited, NRB Bank Limited
and NRB Global Bank Limited. Therefore, Bangladesh is the pioneer in
introducing migrants sponsored banking system

Products and Services

Like other private commercial bank in Bangladesh, NRB Bank Ltd offers vast
category of products and services for Corporate, Retail and SME. Bank introduced
fully online any-branch banking from day one with state of art internet banking
both for consumer and corporate account holders. NRB Bank is the first bank to
introduce secure VISA EMV card among 4th generation banks in Bangladesh

Green Banking

Different stakeholders can minimize the degradation of environment by "green

practice." In Bangladesh, as one of the key stakeholders, banks can play a vital role
in development and response to the environment through "Green Banking"
practice.
Green banking considers social factors with environmental aspects. It has already
started working well in the developed countries. Fundamentally, green banking
keeps away from as much paper work as possible and relies on electronic
transactions for processing. Green banks adopt and implement environmental
standards for lending. The interest of loan of green banks is comparatively less
with those from normal banks.
Natural resources conservation is an underlying principle in here in assessing
capital and operating loans to extracting and industrial business sector. In other
words, green banking refers to the attempt of the banking sector to consider social,
ecological and environmental factors with an aim to protect the environment.
In Bangladesh Bank's Recent Reform Initiatives, it has been written that green
banking products are those that help create a favorable impact on environment.
From green banking operations four key stakeholders namely customers,
management, employees and shareholders can be benefited.
Banks that comply with green banking practice will have the several preferential
treatments like points will be awarded by the Bangladesh Bank to banks on
management component while computing CAMELS rating, where there will
ultimately be a positive impact on overall rating of a bank.
Top ten names of banks will be declared by the Bangladesh Bank for their overall
performance in green banking activities in the BB websites and the Bangladesh
Bank will enthusiastically consider green banking activities of a bank while
granting permission for opening new branch of bank. In such banking, green
financial products and services are categorized as Retail Banking, Corporate and
Investment Banking and Asset Management.
Retail banking will include green mortgage, home equity loans, green commercial
building loans, green car loans and green cards. Under corporate and investment
banking banks can offer green project finance, green securitization, green venture
capital and private equity, Green Indices and Carbon Commodities and finally
banks can deal with green fiscal funds, green investment fund and carbon fund
under asset management.
To minimize the environmental degradation, green banking can contribute
significantly with other environment-concerned organizations since it can protect
the environment and conserve the resources.
This idea is in the nascent-stage through the world. In Bangladesh, this concept
starts its journey through circulation of policy guidelines by the Bangladesh Bank.
At present, green banking practice exists in the second phase after ending of the
first phase keeping in mind that the third phase of policy guidelines will be
implemented within December 2013.
Banks should set environmental standards for lending and disburse loans to
environmental project at a lower interest rate compared to traditional banks.
To implement green banking in Bangladesh, scheduled banks must follow the
policy guideline issued by the Bangladesh Bank. Specific deadline should be
followed mentioned in the policy guidelines for effective implementation of green
banking. Deadline of Phase I has been executed.
As part of the green banking strategies, banks in Bangladesh should come forward
to take the initiative for a number of social responsibility services like tree
plantation campaign, park development, pollution checkup camps and so on.
Offshore banking: Its opportunities
Offshore banking refers to international banking involving non-residents' foreign
currency-denominated assets and liabilities. Offshore banking units conduct their
deposit taking and lending activities with foreign investors without conflict with
the domestic fiscal and monetary set-up and independent of the local commercial
banking system. An efficient offshore banking system is imperative in ensuring the
success of incoming foreign investment. In our country, most of the foreign direct
investment is made in the eight export processing zones (EPZs). The success story
of Bangladesh export growth can be greatly attributed to the crucial role played by
these EPZs.
In FY2007-2008, exports from the EPZs stood at $2.43 billion while the foreign
investment in the EPZs amounted to $302 million of which more than 40 percent
was generated by the Chittagong EPZ, followed closely by the Dhaka EPZ. There
are three types of companies operating in EPZs: * Type A: 100 percent foreign
ownership (252 companies) * Type B: Joint venture (78 companies) * Type C: 100
percent local venture (130 companies) South Korea is the primary foreign investor
in the EPZs contributing almost 26 percent of total investments. The others include
Japan, China, Malaysia, India, Taiwan, USA and UK. In terms of industry
concentration, garments and textiles are the leader constituting more than 72
percent of total investments (garments 26 percent, textile 25 percent, garments
accessories 11 percent, knit and other textile 10 percent).
My Subject Related Questions
Marketing – What is marketing? Examples.
General Definition:
“Marketing is an integrated process of identifying the needs of customers, designing a product
to fulfill the need, creating that need into demand for product and at the end selling the product
profitably.”
Definition of Philip Kotler:
It is the Art and Science of choosing target markets and getting, keeping, and growing
customers through creating, delivering, & communicating superior customer value.

E.g. Amazon started e-commerce. Customers wanted to save time of shopping. Amazon came
up with a service which actually was saving time of customers selling them things online.
This was an approach which met needs of the customer and this is a very good example of
marketing.
Marketing Sales
Marketing starts with customer Sales starts with a product.
Marketing is vast concept. Sales is just part of Sales is subset of marketing.
it.
Focus is to fulfill the customer’s needs Focus is to achieve sales target
Why is Marketing the most important function in an organization?
Following are the functions of Marketing which do make it as the most important function in
an organization.
i. Revenue generation: Marketing is the only department in an organization which
brings in the revenue for the organization. Other departments like finance, HR,
operations etc. do spend money. Marketing is the department which actually sells
the product or the service of an organization and deals with customers.
ii. Brand building: Brand building and PR is the part of marketing so, marketing
builds reputation of a company.
iii. Sustainable growth: The reputation and positioning of an organization will
decide the growth and value of the organization. So, marketing is the department
which takes care of this is certainly the most important function of any
organization.

What are 4 Ps of Marketing Mix and 7ps of Service Marketing Mix?

The four P’s of marketing:
McCarthy gave the 4 P’s of marketing mix. The four P’s are the pillars of marketing
which becomes a frame for marketing campaigns.

Product: Product is an item that satisfies the needs of consumers. It could be tangible good or
an intangible service. Product has various attributes like product variety, quality, design,
features, packaging etc. Marketer is expected to design all the attributes of the product and also
expected to communicate those values to the customers.

Price:
Price is the amount the customer pays for the product or service. Price is a very important
attribute. As price has direct impact on the profits of the company, it should be adjusted
properly. The price should be well placed keeping in mind the value of offered product. Price
should also complement the other elements of the marketing mix.
Promotion:

Promotion includes all of the methods of communication that a marketer may use to provide
information to different parties about the product. Promotion comprises elements such as:
advertising, public relations, sales organization and sales promotion.

Place: Place refers to providing the product at a place which is convenient for consumers to
access.

The 7P’s of service marketing:

Product:
In case of services, the ‘product’ is intangible, heterogeneous and perishable. Moreover, its
production and consumption are inseparable. Hence, there is scope for customizing the offering
as per customer requirements and the actual customer encounter therefore assumes particular
significance.
Pricing:
Pricing of services is tougher than pricing of goods. While the latter can be priced easily by
taking into account the raw material costs. In the case of services, labor and overhead costs - also
need to be considered.
Promotion:
Service offering can be easily replicated so, promotion is a crucial in differentiating a service
offering in the mind of the consumer. Thus, service providers offering identical services such as
airlines or banks and insurance companies invest heavily in advertising their services.
People:
People are a defining factor in a service delivery process, since a service is inseparable from the
person providing it. Thus, a restaurant is known as much for its food as for the service provided
by its staff. The same is true of banks and department stores. Consequently, customer service
training for staff has become a top priority for many organizations today.
Process:
The process of service delivery is crucial since it ensures that the same standard of service is
Repeatedly delivered to the customers. Therefore, most companies have a service
Blueprint which provides the details of the service delivery process, often going down to even
Defining the service script and the greeting phrases to be used by the service staff.
Physical Evidence:
Services are intangible in nature most service providers strive to incorporate certain tangible
elements into their offering to enhance customer experience. For e.g. there are hair salons that
have well designed waiting areas often with magazines and plush sofas to relax while they await
their turn.

What is the difference between Marketing a Good (tangible product) and

Marketing a Service?
While marketing a good, focus is on the Product, Price, Place, and Promotion. While marketing a
service, emphasis is surely on the 4P’s of goods marketing but there are additional elements like
Process, Physical evidence, and People also. Product is tangible and services are intangible so
physical evidence is the factor which is included in the 7P’s of service marketing.

What is positioning? What is a Positioning Map? What is an FCB Grid? What are Points
Of Parity (POP) and Points Of Differences? What is Branding?
Positioning: Positioning is the distinct way by which the marketers attempt to create a distinct
impression on the customer’s mind.
Positioning is actually getting closer to the mind of customer and creating a good impression of
a product/service which will create a sort of faith in customer’s mind about the product. There
are different strategies used for positioning, distinction is the best way for positioning.
Organizations do always find a distinct way for differentiation of product/service. E.g. UBS is
distinguished from the other range of business school by the impression of “green b-school”.

Positioning map:

Positioning map is a diagrammatic representation of the perceptions of potential customers.

Positioning map has ‘n’ number of dimensions. Generally it has two dimensions.

Fig1- Positioning map of automobiles.

This map is the positioning map of automobile companies. There are four attributes viz.
conservative, sporty, practical affordable and classy distinctive. There are companies which are
positioned on the map with regard to their offerings.

FCB Grid:

The FCB Grid was created by Richard Vaughn. With this model, messages are categorized
by "thinking" and "feeling", "low" and "high."

Fig 2: Structure of FCB grid.

  Low Think (practicality, pragmatism)
 High Think
 Low Feel (sensuality, pleasure)
 High Feel (product as extension of self)

A Low Feel commercial demonstrates the pleasure obtained by using the product. This
approach is popular for foods.
A High Feel commercial could emphasize how the product makes the consumer hip or cool.
This approach is popular for advertising products like clothing, shoes, or sports cars.
FCB grid helps in developing the strategies for advertisements. It clarifies how consumer
approaches the buying process.

Points of Parity (POPs):

POP are the associations those are not unique to the brand but those are the once which cannot be
missed by the brands. POPs are the associations where you can match the bets of competitors.
POPs may not be the reasons behind selection of brands. But, POPs could be the reasons behind
the rejections of brands.

Points of difference (PODs):

PODs are the associations/benefits those are unique to the brand. PODs are the points where you
claim the exclusivity over the other products in the category.

What is Branding?

Branding is the marketing practice of creating a name, symbol or design that identifies and
differentiates a product from other products. It’s all about creating differences between the
products. Marketers need to teach customers “who” the product is – by giving it name and other
brand elements to identify it.

Branding creates mental structures that help consumers organize their knowledge about
products and services in a way that clarifies their decision making.

What is Segmentation? What is Target Marketing? What is a Target Group (TG)? What is
the difference between Target Market or Target Group and Target Audience?

What is segmentation?

Market segmentation is dividing the group of potential customers with similar needs or
characteristics who are likely to exhibit similar purchase behavior.

Types of segmentation:

 Geographic-
Marketers can segment according to geographic criteria—nations, states, regions, countries, cities,
neighborhoods, or postal codes. The geo-cluster approach combines demographic data with
geographic data to create a more accurate or specific profile. With respect to region, in rainy
regions merchants can sell things like raincoats, umbrellas and gumboots. In hot regions, one can
sell summer clothing.
 Demographic- Based on age, gender, income family size
 Psychographic- Based on lifestyle, personality and SEC grid.
  Behavioral-
Behavioral segmentation divides consumers into groups according to their knowledge of, attitude
towards, usage rate or response to a product

What is target marketing?

After identifying the market segments, the one which provides greatest opportunities is the
target segment. Targeting the target segment to achieve the goal of marketing is target
marketing.

What is target group?

A target market is a group of customers that the business has decided to aim its marketing efforts
and ultimately its merchandise. A well-defined target market is the first element to a marketing
strategy. The target market and the marketing mix variables of product, place(distribution),
promotion and price are the four elements of a marketing mix strategy that determine the success of
a product in the marketplace.

What is difference between target market and target audience?

Target market: A target market is a group of customers that the business has decided to aim its
marketing efforts and ultimately its merchandise. A well-defined target market is the first element
to a marketing strategy.

Target audience: Target audience is a specific group of people within the target market at which a
product or the marketing message of a product is aimed at. For example, if a company sells new diet
programs for men with heart disease problems (target market) the communication may be aimed at
the spouse (target audience) who takes care of the nutrition plan of her husband and child.

4) What is a Product Strategy? Explain the Total Product Concept with Examples? What are
Product Mix and Product Line?
Customers will choose a product based on their perceived value of it. Satisfaction is the degree to
which the actual use of a product matches the perceived value at the time of the purchase. A
customer is satisfied only if the actual value is the same or exceeds the perceived value. Kotler
defined five levels to a product:

1. Core Benefit
The fundamental need or want that consumers satisfy by consuming the product or service. The core
product is just an abstract which is basic idea of the product. E.g. For a hotel service, core product
would be rest or sleep.

2. Generic Product/ basic product

A version of the product containing only those attributes or characteristics absolutely necessary for it
to function. Generic product includes all the basic facilities those are essential for offering. E.g.
Hotel having Bed, bathroom etc.
3. Expected Product
The set of attributes or characteristics that buyers normally expect and agree to when they purchase a
product. E.g. Buyer expects clean bed, working lamps and relative degree of quiet etc.

4. Augmented Product
Inclusion of additional features, benefits, attributes or related services that serve to differentiate the
product from its competitors. E.g. Hotels provide Wi-Fi services etc.

5. Potential Product
All the augmentations and transformations a product might undergo in the future. There are al

Product mix:

Product mix is the set of all the products and items a particular seller offers for sale. A product mix
is also termed as product assortments. A product mix consists of various product lines. For e.g.
HUL has a wide product mix. i.e. HUL offers products from personal care range, home care and
food. Under every category there are different brands.

Length- Width – Depth of product mix:

1. Width of the product mix refers to how many different product lines a company carries.
Over here in this example, HUL carries three product lines viz. personal care range, home
care and food.
2. Length of the product mix refers to total number of the products in the mix.
3. Depth of the product mix refers to how many variants are offered of each product line. For
e.g. Lux comes in four variants and in two sizes then Lux has depth of eight.

Product Line:

Product line is the category of the products offered by a company. For e.g. Personal care is a
product line offered by HUL. Personal care has different products under it like personal wash,
skin care cosmetics etc.

What are different types of Pricing Strategies?

Markup pricing-

Markup pricing is the most elementary method of pricing. Method is to add standard markup to the
product’s cost and adding markup to the profit. Lawyers and accountants typically price by adding a
standard markup on their time and cost.

Let’s take an example

Variable cost: Rs. 10

Fixed costs: Rs.300,000

Expected unite sales: 50,000

Suppose a toaster manufacturer has the following costs and sales expectations:

Unit cost= variable cost+ (fixed cost/unit sales)= Rs. 10+(300000/50000) = Rs. 16

Assuming manufacturer wants to earn 20 percent markup on sales. The manufacturer’s markup
price is given by:

Markup price= unit cost/(1-desired return on sales) = Rs.16/(1-0.2) = Rs.20

The manufacturer will charge dealers Rs.20 per toaster and make profit of Rs. 4. If dealer wants to earn
50 percent on their selling price they will markup the toster 100 percent to Rs.40.

Target- return pricing:

The process of setting an item's price by using an equation to compute the price that
will result in a certain level of planned profit given the sale of a specified amount of items. By
using a target return pricing method, a business is able to set its products' prices at such levels that
its corporate profit objectives are likely to be met if sales continue to run at or above the amount
specified.

Perceived value pricing:

The valuation of good or service according to how much consumers are willing to pay for it,
rather than upon its production and delivery costs. Using a perceived value pricing technique
might be somewhat arbitrary, but it can greatly assist in the effective marketing of a product
since it sets product pricing in line with its perceived value by potential buyers.

Value based pricing:

Value-based pricing (also value optimized pricing) is a pricing strategy which sets prices primarily,
but not exclusively, on the value, perceived or estimated, to the customer rather than on the cost of
the product or historical prices. Where it is successfully used, it will improve profitability due to the
higher prices without impacting greatly on sales volumes.

Going rate pricing:

In going rate pricing, the firm sets its price largely on the competitor’s prices. In oligopolistic
industries that sell a commodity such as steel, paper or fertilizer all firms normally charge the
same price. Smaller firms “follow the leader”, changing their prices when the market leader’s
prices change rather than when their own demand or cost change.
 VMS: Vertical Marketing system

A vertical marketing system (VMS) is one in which the main members of a distribution channel—
producer, wholesaler, and retailer—work together as a unified group in order to meet consumer
needs. In conventional marketing systems, producers, wholesalers, and retailers are separate
businesses that are all trying to maximize their profits. When the effort of one channel member to
maximize profits comes at the expense of other members, conflicts can arise that reduce profits for
the entire channel. To address this problem, more and more companies are forming vertical
marketing systems.

HMS – Horizontal Marketing system

A horizontal marketing system is a distribution channel arrangement whereby two or more

organizations at the same level join together for marketing purposes to capitalize on a new
opportunity. For example: a bank and a supermarket agree to have the bank’s ATMs located at the
supermarket’s locations, two manufacturers combining to achieve economies of scale, otherwise
not possible with each acting alone, in meeting the needs and demands of a very large retailer, or
two wholesalers joining together to serve a particular region at a certain time of year.

What is Brand Equity?

Brand equity is which describes the value of having a well-known brand name, based on the idea
that the owner of a well-known brand name can generate more money from products with that brand
name than from products with a less well-known name, as consumers believe that a product with a
well-known name is better than products with less well-known names.

How to build brand equity?

Brand equity is built by choosing right set of brand equity drivers.

 Initial choices of brand elements or identities that make up the brand. Like brand names,
URL’s, logos, symbols, and characters, spokes people, slogans, jingles packages and
signage.
 The products or service and all accompanying marketing activities and supporting
marketing programs-
For e.g. Vodafone came up with zoo-zoo campaign which was edgy and humorous. Coming
up with those kind of advertisements which depict mischievous acts by zoo-zoo added fan
following to Vodafone.
 Other associates which are indirectly transferred to the brand by indirectly linking it to
some other entity:
For e.g. Airtel mobile operator uses [Link] as brand endorser. [Link] has
won Oscar awards for music composing. Also the signature tune of the brand is
composed by [Link] which is very famous. These things like person, music links
people to brand and helps in building brand equity.
 How to measure brand equity?
There are many ways to measure a brand. Some measurements approaches are at the firm level,
some at the product level, and still others are at the consumer level.
Firm Level: Firm level approaches measure the brand as a financial asset. In short, a calculation is
made regarding how much the brand is worth as an intangible asset. For example, if you were to
take the value of the firm, as derived by its market capitalization—and then subtract tangible assets
and "measurable" intangible assets—the residual would be the brand equity.

Product Level: The classic product level brand measurement example is to compare the price of a
no-name or private label product to an "equivalent" branded product. The difference in price,
assuming all things equal, is due to the brand. More recently a revenue premium approach has been
advocated. Marketing mix modeling can isolate "base" and "incremental" sales, and it is sometimes
argued that base sales approximate to a measure of brand equity. More sophisticated marketing mix
models have a floating base that can capture changes in underlying brand equity for a product over
time.
Consumer Level: This approach seeks to map the mind of the consumer to find out what
associations with the brand the consumer has. This approach seeks to measure the awareness
(recall and recognition) and brand image (the overall associations that the brand has). Free
association tests and projective techniques are commonly used to uncover the tangible and
intangible attributes, attitudes, and intentions about a brand. Brands with high levels of awareness
and strong, favorable and unique associations are high equity brands.
All of these calculations are, at best, approximations. A more complete understanding of the
brand can occur if multiple measures are used.

What is Marketing ROI or Return on Marketing Investment (ROMI)?

Return on marketing investment (ROMI) is the contribution attributable to marketing (net of
marketing spending), divided by the marketing 'invested' or risked. It is not like the other 'return-
on-investment' metrics because marketing is not the same kind of investment. Instead of moneys
that are 'tied' up in plants and inventories (often considered Capital Expenditure or CAPEX),
marketing funds are typically 'risked.' Marketing spending is typically expensed in the current
period (Operational Expenditure or OPEX). The idea of measuring the market’s response in terms
of sales and profits is not new, but terms such as marketing ROI and ROMI are used more
frequently now than in past periods. Usually, marketing spending will be deemed as justified if the
ROMI is positive. In a survey of nearly 200 senior marketing managers, nearly half responded that
they found the ROMI metric very useful.
The ROMI concept first came to prominence in the 1990s. The phrase "return on marketing
investment" became more widespread in the next decade following the publication of two books
Return on Marketing Investment by Guy Powell (2002) and Marketing ROI by James Lenskold
(2003).In the book "What Sticks: Why Advertising Fails And How To Guarantee Yours
Succeeds," Rex Briggs suggested the term "ROMO" for Return-On-Marketing-Objective, to
reflect the idea that marketing campaigns may have a range of objectives, where the return is not
immediate sales or profits. For example, a marketing campaign may aim to change the perception
of a brand.
What is BCG Matrix and what is the purpose of BCG Matrix? What is Ansoff Matrix and
the purpose of such a Matrix?
BCG is a useful tool for developing marketing objectives. The growth–share matrix is a chart that
was created by Bruce D. Henderson for the Boston Consulting Group in 1970 to help corporations
to analyze their business units, that is, their product lines. This helps the company allocate resources
and is used as an analytical tool in brand marketing, product management, strategic management,
and portfolio analysis.

 Cash cows is where company has high market share in a slow-growing industry. These units
typically generate cash in excess of the amount of cash needed to maintain the business. They are
regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own
as many as possible. They are to be "milked" continuously with as little investment as possible,
since such investment would be wasted in an industry with low growth.
 Dogs, more charitably called pets, are units with low market share in a mature, slow-
growing industry. These units typically "break even", generating barely enough cash to maintain the
business's market share. Though owning a break-even unit provides the social benefit of providing
jobs and possible synergies that assist other business units, from an accounting point of view such a
unit is worthless, not generating cash for the company. They depress a profitable company's return
on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is
thought, should be sold off.
 Question marks (also known as problem children) are business operating in a high
market growth, but having a low market share. They are a starting point for most businesses.
Question marks have a potential to gain market share and become stars, and eventually cash cows
when market growth slows. If question marks do not succeed in becoming a market leader, then
after perhaps years of cash consumption, they will degenerate into
dogs when market growth declines. Question marks must be analyzed carefully in order to
determine whether they are worth the investment required to grow market share.
 Stars are units with a high market share in a fast-growing industry. They are
graduated question marks with a market or niche leading trajectory, for example: amongst
market share front-runners in a high-growth sector, and/or having
a monopolistic or increasingly dominant USP with
burgeoning/fortuitous proposition drive(s) from: novelty (e.g. [Link] upon CBS Interactive
due diligence), fashion/promotion (e.g. newly prestigious celebrity branded fragrances),
customer loyalty (e.g. greenfield or military/gang enforcement backed, and/or innovative, grey-
market/illicit retail of addictive drugs, for instance the British East India Company's, late-1700s
opium-based Qianlong Emperor embargo-busting, Canton System), Stars require high funding
to fight competitions and maintain a growth rate. When industry growth slows, if they remain a
niche leader or are amongst market leaders it’s have been able to maintain their category
leadership stars become cash cows, else they become dogs due to low relative market share.

Ansoff matrix:
To portray alternative corporate growth strategies, Igor Ansoff presented a matrix that focused
on the firm's present and potential products and markets (customers). By considering ways to
grow via existing products and new products, and in existing markets and new markets, there
are four possible product-market combinations. Ansoff's matrix is shown below:

Ansoff Matrix

Existing Products New Products

Existing
Markets Market Penetration Product Development

New
Markets Market Development Diversification

Ansoff's matrix provides four different growth strategies:

 Market Penetration - the firm seeks to achieve growth with existing products in their
current market segments, aiming to increase its market share.
 Market Development - the firm seeks growth by targeting its existing products to new
market segments.
 Product Development - the firms develops new products targeted to its existing market
segments.
 Diversification - the firm grows by diversifying into new businesses by developing
new products for new markets.

Selecting a Product-Market Growth Strategy

The market penetration strategy is the least risky since it leverages many of the firm's
existing resources and capabilities. In a growing market, simply maintaining market share will
result in growth, and there may exist opportunities to increase market share if competitors
reach capacity limits. However, market penetration has limits, and once the market approaches
saturation another strategy must be pursued if the firm is to continue to grow.

Market development options include the pursuit of additional market segments or geographical
regions. The development of new markets for the product may be a good strategy if the firm's
core competencies are related more to the specific product than to its experience with a specific
market segment. Because the firm is expanding into a new market, a market development
strategy typically has more risk than a market penetration strategy.

A product development strategy may be appropriate if the firm's strengths are related to its
specific customers rather than to the specific product itself. In this situation, it can leverage its
strengths by developing a new product targeted to its existing customers. Similar to the case of
new market development, new product development carries more risk than simply attempting to
increase market share.

Diversification is the most risky of the four growth strategies since it requires both product and
market development and may be outside the core competencies of the firm. In fact, this quadrant
of the matrix has been referred to by some as the "suicide cell". However, diversification may
be a reasonable choice if the high risk is compensated by the chance of a high rate of return.
Other advantages of diversification include the potential to gain a foothold in an attractive
industry and the reduction of overall business portfolio risk.

What is an SBU? What is a Value Chain? What is Supply Chain Management?

SBU- Strategic business unit:

In business, a strategic business unit (SBU) is a profit center which focuses on product offering
and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and
marketing campaign, even though they may be part of a larger business entity.
An SBU may be a business unit within a larger corporation, or it may be a business unto itself or
a branch. Corporations may be composed of multiple SBUs, each of which is responsible for its
own profitability. General Electric is an example of a company with this sort of business
organization. SBUs are able to affect most factors which influence their performance. Managed
as separate businesses, they are responsible to a parent corporation. General Electric has 49
SBUs.
Value chain:
A value chain is a chain of activities that a firm operating in a specific industry performs in order
to deliver a valuable product or service for the market. The concept comes from business
management and was first described and popularized by Michael Porter in his 1985 best-seller,
Competitive Advantage: Creating and Sustaining Superior Performance

Supply chain management:

Supply chain management is a cross-function approach including managing the movement of

raw materials into an organization, certain aspects of the internal processing of materials into
finished goods, and the movement of finished goods out of the organization and toward the end-
consumer. As organizations strive to focus on core competencies and becoming more flexible,
they reduce their ownership of raw materials sources and distribution channels. These functions
are increasingly being outsourced to other entities that can perform the activities better or more
cost effectively. The effect is to increase the number of organizations involved in satisfying
customer demand, while reducing management control of daily logistics operations. Less control
and more supply chain partners led to the creation of supply chain management concepts. The
purpose of supply chain management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and the velocity of inventory movement.
Strategic

 Strategic network optimization, including the number, location, and

size of warehousing, distribution centers, and facilities.

 Strategic partnerships with suppliers, distributors, and customers, creating

communication channels for critical information and operational improvements such as
cross docking, direct shipping, and third-party logistics.

 Product life cycle management, so that new and existing products can be
optimally integrated into the supply chain and capacity management activities.

Tactical
 Sourcing contracts and other purchasing decisions.

 Production decisions, including contracting, scheduling, and planning process definition.

 Inventory decisions, including quantity, location, and quality of inventory.

 Transportation strategy, including frequency, routes, and contracting.
 Benchmarking of all operations against competitors and implementation of
best practices throughout the enterprise.

 Milestone payments.
 Focus on customer demand.

Operational

 Daily production and distribution planning, including all nodes in the supply chain.

 Production scheduling for each manufacturing facility in the supply chain

(minute by minute).

 Demand planning and forecasting, coordinating the demand forecast of all customers
and sharing the forecast with all suppliers.
What is CRM? What is “Share of Wallet”? What is Customer Life Time Value?

CRM- Customer relationship management (CRM) is a model for managing a company’s

interactions with current and future customers. It involves using technology to organize, automate,
and synchronize sales, marketing, customer service, and technical support.
Types of CRM:

 Marketing and customer service

CRM systems for marketing track and measure campaigns over multiple contact channels, such as
call centers, email, chat, social networking services, inbound/outbound calling, and direct mail.
These systems track clicks, responses, leads and deals.
 CRM in customer contact centers
CRM systems are Customer Relationship Management platforms. Their goal is to track, record,
store in databases, and then data mine the information in a way that increases customer relations
(predominantly increased ARPU, and decreased churn) The CRM codifies the interactions between
you and your customers, so you can maximize sales and profits using analytics, KPIs, to give the
users as much information on where to focus your marketing, customer service to maximize
revenue, and decrease idle and unproductive contact with your customers. The contact channels
(now aiming to be Omni-Channel from Multi-Channel, uses such operational methods as contact
centers The CRM software is installed in the contact centers, and help direct customers to the right
agent or self-embowered knowledge . CRM software can also be used to identify and reward loyal
customers over a period of time.

Appointments
CRM systems can automatically suggest suitable times to contact customers via phone, e-mail,
chat, email, or calendar invitations or web. These can then be synchronized with the representative
or agent's calendar.
 CRM in B2B market
The modern environment requires one business to interact with another via the web. According to a
Sweeney Group definition, CRM is “all the tools, technologies and procedures to manage, improve,
or facilitate sales, support and related interactions with customers, prospects, and business partners
throughout the enterprise” It assumes that CRM is involved in every B2Btransaction.
Despite the general notion that CRM systems were created for the customer-centric businesses, they
can also be applied to B2B environments to streamline and improve customer management
conditions. B2C and B2B CRM systems are not created equally and different CRM software applies
to B2B and B2C conditions. B2B relationships usually have longer maturity times than B2C
relationships. For the best level of CRM operation in a B2B environment, the software must be
personalized and delivered at individual levels.
Share of wallet:

Share-of-wallet (SOW) is a survey method used in performance management that helps

managers understand the amount of business a company gets from specific customers.
Share of Wallet is the percentage ("share") of a customer's expenses ("of wallet") for a product that
goes to the firm selling the product. Different firms fight over the share they have of a customer's
wallet, all trying to get as much as possible. Typically, these different firms don't sell the same but
rather ancillary or complementary product.
Customer lifetime value:
Customer lifetime value lifetime customer value (LCV), or user lifetime value (LTV) is a
prediction of the net profit attributed to the entire future relationship with a customer. The
prediction model can have varying levels of sophistication and accuracy, ranging from a crude
heuristic to the use of complex predictive analytics techniques.

What is a Value Proposition? Explain in detail with Examples?

A value proposition is a promise of value to be delivered and a belief from the customer that
value will be experienced. A value proposition can apply to an entire organization, or parts
thereof, or customer accounts, or products or services.

Creating a value proposition is a part of business strategy. Kaplan and Norton say "Strategy is
based on a differentiated customer value proposition. Satisfying customers is the source of
sustainable value creation.
Developing a value proposition is based on a review and analysis of the benefits, costs and
Value that an organization can deliver to its customers, prospective customers, and
Other constituent groups within and outside the organization. It is also a positioning of value,
Where Value = Benefits - Cost (cost includes economic risk).
What is a Promotional Mix?

A promotion mix is the act of combining promotional methods such as advertising, new media,
direct mail marketing, selling, use of retail displays, and merchandising for the sale of products and
services. Promotional mix is the marketing strategies used by a company to market and promote its
products and services. These strategies include personal selling, advertising, public relations

What is IMC and what are its tools?

IMC stands for Integrated Marketing Communication. Companies use IMC to set company
goals and objectives using this as a form of communication. IMC is the abbreviated term for
Integrated Marketing Communication. IMC is the practice of unifying all marketing
communications to convey the company's objectives and goals to all.
One of the most common and early IMC objectives is brand awareness. Before a company can sell
specific products and services, it has to create brand awareness among its target market.
Various integrated marketing communication tools: Integrated marketing communication
effectively integrates all modes of brand communication and uses them simultaneously to promote
various products and services among customers effectively and eventually yield higher revenues for
the organization.

Advertising
Advertising is one of the most effective ways of brand promotion. Advertising helps organizations
reach a wider audience within the shortest possible time frame. Advertisements in newspaper,
television, Radio, billboards help end-users to believe in your brand and also motivate them to buy
the same and remain loyal towards the brand. Advertisements not only increase the consumption of
a particular product/service but also create brand awareness among customers.

Public relation activities help promote a brand through press releases, news, events, public
appearances etc. The role of public relations officer is to present the organization in the best
light.

Sales Promotion
Brands (Products and services) can also be promoted through discount coupons, loyalty clubs,
membership coupons, incentives, lucrative schemes, attractive packages for loyal customers,
specially designed deals and so on. Brands can also be promoted effectively through newspaper
inserts, danglers, banners at the right place, glorifiers, wobblers etc.

Direct Marketing
Direct marketing enables organizations to communicate directly with the end-users. Various tools
for direct marketing are emails, text messages, catalogues, brochures, promotional letters and so on.
Through direct marketing, messages reach end-users directly.

Personal Selling
Personal selling is also one of the most effective tools for integrated marketing communication.
Personal selling takes place when marketer or sales representative sells products or services to
clients. Personal selling goes a long way in strengthening the relationship between the organization
and the end-users.

Personal selling involves the following steps:

 Prospecting - Prospecting helps you find the right and potential contact.
 Making first contact - Marketers need to establish first contact with their prospective
clients through emails, telephone calls [Link] appointment is essential and make sure you
reach on time for the meeting.
 The sales call - Never ever lie to your customers. Share what all unique your brand has to
offer to customers. As a marketer, you yourself should be convinced with your products
and services if you expect your customers to invest in your brand.
 Objection handling - Be ready to answer any of the client’s queries.
 Closing the sale - Do not leave unless and until you successfully close the deal. There is no
harm in giving customers some time to think and decide accordingly. Do not be after their
life.
What is Media Planning and Media Buying?

Media planning is one of the four key disciplines within advertising, along with account
management, brand planning and developing creative. Typically media planning is a role that
falls to an outside agency, but some companies choose to keep it in-house.

Media planning entails finding the most appropriate media platform to advertise the company or
client’s brand/product. Media planners determine when, where and how often a message
Should be placed. Their goal is to reach the right audience at the right time with the right
message to generate the desired response and then stay within the designated budget

Anyone can purchase advertising time on a radio or television station but media buyers do it better.
A media buyer purchases time by researching the audience for that time spot and placing ads at a
time when they will reach the most customers. They may also purchase media in large blocks to
get better rates. Media buyers work for large corporations and advertising agencies.
Media buying, a sub function of advertising management, is the procurement of media
real estate at optimal placement and price. The main task of media buying lies within the
negotiation of price

What is the difference between “Above-the-line” (ATL) and “Below-the-line”

(BTL) Advertising?

Above the line (ATL) is an advertising technique using mass media to promote brands.

This type of communication is conventional in nature and is considered impersonal to customers.

It differs from BTL (below the line), that believes in unconventional brand-building strategies.
The ATL strategy makes use of current traditional media: Television, newspapers, magazines,
radio, outdoor, and internet.
Below the line (BTL) is an advertising technique. It uses less conventional methods than the usual
specific channels of advertising to promote products, services, etc. than ATL (above the line)
strategy; these may include activities such as direct mail, public relations, sales promotion,
consumer promotions, consumer incentives, trade incentives
Retail promtions etc for which a fee is agreed upon and charged up front.
Below the line advertising typically focuses on direct means of communication, most commonly direct
mail and e-mail, often using highly targeted lists of names to maximize response rates.
What is Advertising?

Advertising is a form of communication that is used to persuade an audience to recognize and/or

support particular services, ideas or products. The advertising messages are usually paid for by the
sponsors and are transmitted through various media such as television or the internet. Each company
strives to increase sales through advertising.

What are the Principles of Advertising?

 An advertisement should accurately reflect the nature and content of the product it
represents and the rating issued (i.e., an advertisement should not mislead the consumer
as to the product’s true character.)

 An advertisement should not glamorize or exploit the ESRB rating of a product or a ruling or
determination made by ARC, nor misrepresent the scope of ARC’s determination.

 All advertisements should be created with a sense of responsibility toward the public.

 No advertisement should contain any content that is likely to cause serious or

widespread offense to the average consumer.

What is the difference between Advertising and PR and Publicity?

1. Paid Space or Free Coverage

 Advertising:
The Company pays for ad space. You know exactly when that ad will air or be published.
 Public Relations:
Your job is to get free publicity for the company. From news conferences to press releases, you're
focused on getting free media exposure for the company and its products/services.

2. Creative Control Vs. No Control

 Advertising:
Since you're paying for the space, you have creative control on what goes into that ad.
 Public Relations:
You have no control over how the media presents your information, if they decide to use your
info at all. They're not obligated to cover your event or publish your press release just because you
sent something to them.
3. Shelf Life

 Advertising:
Since you pay for the space, you can run your ads over and over for as long as your budget
allows. An ad generally has a longer shelf life than one press release.
 Public Relations:
You only submit a press release about a new product once. You only submit a press release about
a news conference once. The PR exposure you receive is only circulated once. An editor won't
publish your same press release three or four times in their magazine.

4. Wise Consumers

 Advertising:
Consumers know when they're reading an advertisement they're trying to be sold a product or
service.
 Public Relations:
When someone reads a third-party article written about your product or views coverage of your
event on TV, they're seeing something you didn't pay for with ad dollars and view it differently than
they do paid advertising.

5. Creativity or a Nose for News

 Advertising:
In advertising, you get to exercise your creativity in creating new ad campaigns and
materials.
 Public Relations:
In public relations, you have to have a nose for news and be able to generate buzz through that
news. You exercise your creativity, to an extent, in the way you search for new news to release to
the media.

NEEDS, WANTS AND DEMANDS

A human need is a state of felt deprivation of some basic satisfaction. People require foods,
clothing, shelter, safety, belonging, esteem etc. these needs exist in the very nature of human beings.
Human wants are desires for specific satisfiers of these needs. For example, cloth is a needs but
Raymond’s suiting may be want. While people’s needs are few, their wants are many.
Demands are wants for specific products that are backed up by an ability and willingness to buy
them. Wants become demands when backed up by purchasing power.

Products
Products are defined as anything that can be offered to some one to satisfy a need or want.

Market
A market consist of all the existing and potential consumers sharing a particular need or want who
might be willing and able to engage in exchange to satisfy that need or want.
MARKETING MANAGEMENT

Marketing management is defined as “the analysis, planning, implementation and control of

programmes designed to create build and purpose of achieving organizational objectives”.
Marketing manages have to carry marketing research, marketing planning, marketing implementation
and marketing control.

CONCEPTS OF MARKETING
There are five distinct concepts under which business organization can conduct their marketing
activity.

 Production Concept
 Product Concept
 Selling Concept
 Marketing Concept
 Societal Marketing Concept

PRODUCTION CONCEPT
In this approach, a firm is considered as the central point and all goods and commodities produced
were sold in the market. The major emphasis was on the production process and control on the
technical perfections while producing the goods.

PRODUCT CONCEPT
The product concept holds that consumers will favor those products that offer the most quality,
performance and features. Management in these product-oriented organizations focus their energy on
making good products and improving them over time.

Marketing Myopia
‘Marketing myopia’ as a colored or crooked perception of marketing and a short-sightedness about
business. Excessive attention to production or product or selling aspects at the cost of the customer
and his actual needs, creates this myopia. It leads to a wrong or inadequate understanding of the
market and hence failure in the market place. The myopia even leads to a wrong or inadequate
understanding of the very nature of the business in which a given organization is engaged and
thereby affects the future of the business.

SALES CONCEPT
The sales concept maintains that a company cannot expect its products to get picked up automatically
by the customers. The company has to consciously push its products. Aggressive advertising, high-
power personal selling, large scale sales promotion, heavy price discounts and strong publicity and
public relations are the normal tools used by organization that rely on this concept.

MARKETING CONCEPT
The Marketing concept was born out of the awareness that marketing starts with the determination of
consumer wants and ends with the satisfaction of those wants. The concept puts the consumer both at
the beginning and at the end of the business cycle. Only the marketing concept is capable of keeping
the organization free from ‘marketing myopia’.
The salient features of the marketing concept are:
1) Consumer orientation
2) Integrated marketing
3) Consumer satisfaction
4) Realization of organizational goals.

Societal Marketing concept

The societal marketing concept holds that the organization’s task is to determine the needs, wants and
interests of target markets and to deliver the desired satisfaction more effectively and efficiently than
competitors in a way that preserves or enhances the consumer’s and the society’s wellbeing.

META – MARKETING
It has considerably helped to develop new insight into this exciting field of learning. The literal
meaning of the term ‘meta’ is “more comprehensive” and is “used with the name of a discipline to
designate a new but related discipline designed to deal critically with the original one”.
The examples of non-business marketing or meta-marketing may include Family Welfare
Programmes and the idea of prohibition.

DEMARKETING
It is a concept which is of great relevance to developing economies where demands for products/
services exceed supplies. Demarcating has been defined as “that aspect of marketing that deals with
discouraging customer, in general, or a certain class of customers in particular on either a temporary
or permanent basis. The demarketing concept espouses that management of excess demand is as
much a marketing problem as that of excess supply and can be achieved by the use of similar
marketing technology as used in the case of managing excess supply.

FEATURES OF CONSUMER MARKETING

Consumer goods are destined for use by ultimate consumers or house-holds and in such form that
they can be used without commercial processing. Consumer goods and services are purchased for
personal consumption. Demand for consumer goods and services are direct demand. Consumer
buyers are individuals and households. Impulse buying is common in consumer market .Many
consumer purchases are influenced by emotional factors.
The number of consumer buyers is relatively very large. The number of factors influencing buying
decision-making is relatively small. Decision-making process is informal and often simple.
Relationship marketing is less significant. Technical specifications are less important. Order size is
very small. Service aspects are generally less important. Direct marketing and personal selling are
less important. Consumer marketing depends heavily on mass media advertising. Sales promotion is
very common. Supply efficiency, is not as critical as in industrial marketing. Distribution channels
are generally lengthy and the numbers of resellers are very large. Systems selling is not important.
The scope for reciprocity is very limited. Vendor loyalty is relatively less important. Line extensions
are very common. Branding plays a great role.
Packaging also plays a promotional role. Consumers are dispersed geographically. Demand for
consumer goods is price elastic.
 FEATURES OF INDUSTRIAL MARKETING
In industrial marketing, the markets is concerned with the marketing of industrial goods to industrial
users. The industrial goods are those intended for use in producing of other goods roe rendering of
some service in business. The industrial users are those individuals and organizations who buy the
industrial goods for use in their own business. The segments for industrial goods include
manufacturing, mining and quarrying, transportation, communication, agriculture, forestry, finance,
insurance, real estate etc.

FEATURES OF SERVICES MARKETING

Service market is represented by activities, benefits and satisfactions offered for sale by providers of
services. These services may be labor services, personal services, professional services or
institutional services. The peculiar characteristics of services create challenges and opportunities to
the service markets. These are given below:

PERISHABILITY AND FLUCTUATING DEMAND

Perishability refers to the fact that services cannot be saved, stored, resold or returned. A seat on an
airplane or in a restaurant, an hour or a lawyer’s time, or telephone line capacity not used cannot be
reclaimed and used or resold at later time. This is in contract to goods that can be stored in inventory
or resold another day, or even returned if the consumer is unhappy.

TARGET MARKETING
Target marketing refers to selection of one or more of many market segments and developing
products and marketing mixes suited to each segments.

STEPS IN TARGET MARKETING

Target marketing essentially consist of the following steps:
1. Define the relevant market
The market has to be defined in terms of product category, the product form and the specific brand.

2. Analyze characteristics and wants of potential customers

The customer’s wants and needs are to be analyzed in terms of geographic location, demographics,
psychographics and product related variable.

3. Identify bases for segmenting the market

From the profiles available identify those has strength adequate to a segment and reflection the
wants.
4. Define and describe market segments
As any one basis, say income is meaningless by itself, a combination of various bases has to be
arrived as such that each segment is distinctly different from other segments in buying behavior and
wants.
5. Analyze competitor’s positions

6. Evaluate market segments

The market segments have to be evaluated in terms of revenue potential and cost of the marketing
effort. The former involves estimating the demand for the product while the latter is an estimate of
costs involved in reaching each segment.

7. Select the market segment

8. Finalize the marketing mix

MARKETING INTERMEDIARIES
Channel members are the vanguard of the marketing implementation part. They are the people who
connect the company with the customers. There are number of middle men who operate in this cycle.
Agent middle men like brokers and agents find customers and establish contacts, merchant
middlemen are the wholesalers, retailers, who take title to and resell the merchandise. Apart from
these channel members, there are physical distribution firms who assist in stocking and moving
goods from the original locations to their destinations. Warehouse firms store and protect goods
before they move to the next destinations. There are number of transporting firms consists of rail,
road, truckers, ship, airline etc. that mover goods from one location to another. Every company has to
decide on the most cost – effective means of transport considering the costs, delivery, safety and
speed. There are financial intermediaries like banks, insurance companies, who support the company
by providing finance insurance cover etc. The behavior and performance of all these intermediaries
will affect the marketing operations of the company and the marketing executives have to prudently
deal with them.

MACRO ENVIRONMENT
Macro environment consists of six major forces demographic, economic, physical, technological,
political/ legal and socio-cultural. The trends in each macro environment components and their
implications on marketing are discussed below:
Firm’s Marketing Efforts

 Product

 Price

 Place

 Promotion

Socio-Cultural Environment

1. Family

2. Social Class

3. Culture and Sub-culture

Output:

The output component of the consumer decision-making model concerns two more stages of
purchase process activity: Purchase behavior and post-purchase behavior.

The buying process thus, is composed of a number of stages and is influenced by a individual’s
psychological framework composed of the individual’s personality, motivations, perceptions and
attitudes. The various stages of the buying process are:

1. Need Recognition
2. Information Search

3. Evaluation of Alternatives

4. Purchase Behavior

5. Post-Purchaser Evaluation

CONSUMER BEHAVIOUR
The new business philosophy is that the economic and social justification of firm’s existence lies in
satisfaction of consumer wants. Charles G Mortimer has rightly pointed our that, ‘instead of trying
what is easiest for us to make, we must find our much more about what the consumer is willing to
buy……. we must apply our creativeness more intelligently to people and their wants and needs
rather than to products”. To achieve consumer satisfactions, the marketer should know, understand
consumer behavior– their characteristics, needs, attitudes and so on. But, the study of consumer’s
behavior is not an easy task as to involves complex system of interaction of various factors namely
sociological, cultural, economic and psychological.

FACTORS INFLUENCING CONSUMER BEHAVIOUR

Consumers are stimulated by two types of stimuli – internal and environmental. The internal
influences comprise of motivation, perception, learning and attitudes – all concepts drawn from the
field of psychology. The environmental influences include cultural, social and economic. Experts in
these areas attempts to explain why people behave as they do as buyers. All these influences interact
in highly complex ways, affecting the individual’s total patterns of behavior as well as his buying
behavior.

MARKETING INTELLIGENCE
The marketing intelligence system determines what intelligence is needed, collects it by searching the
environment and delivers it to marketing managers who need it. Marketing intelligence can be
gathered from company executives, dealers, sales force, competitors, the accounts and annual reports
of other organizations etc. that helps managers prepare and adjust marketing plans.

Product can be classified into three groups according to their durability:

Durable Goods: Durable goods are tangible goods that normally survive many users. Examples
include refrigerators, tape recorders, televisions etc.

Non-Durable Goods: These are tangible goods that normally are consumed for short period.
Example include soap, match box etc.

Services: Services are activities, benefits or satisfactions that are offered for sale. Examples include
banking, transport, insurance service etc.

Another method of classifying products is on the basis of consumer shopping habits because they
have implications for marketing strategy. Basing on this, goods may be classified into three:
Convenience Goods: Goods that the customer usually purchases frequently, immediately and with
the minimum effort. The price per unit is low, Example: soaps, match box etc.

Shopping Goods: These goods are purchased infrequently. The price per unit is comparatively
higher. The customer, in the process of selection and purchase of these goods compares the
suitability, quality, price and style. Example include furniture, clothing, footwear etc.

Specialty Goods: Goods with unique characteristics and/or brand identification for which a
significant group of buyers are willing to make a special purchasing effort. The goods are expensive
and purchased rarely. Examples include personal computers, cars, hi-fi components etc.

Product Family: All the product classes that can satisfy a core need with more or less effectiveness.

Product Line: A group of products within a product class that are closely related, because they
function in a similar manner or sold to the same customer groups or are marketed through the same
types of outlets or fall within given price ranges. Example: Cosmetics.

Product Item: A distinct unit within a brand or product line that is distinguishable by size, price,
appearance or some other attribute. Example: Talcum powder.

PRODUCT MIX DECISIONS

Product Mix
A product mix (also called product assortment) is the set of all product lines and items that a
particular seller offers to sale.

A company’s product mix can be described as having a certain width, length, depth, and consistency.

The width of the product mix refers to how many product lines the company carries.

The length of product mix refers to the total number of items in its product mix.

The depth of product mix refers to how many product variants are offered of each product item in the
line.

The consistency of the product mix refers to how closely related the various product lines are in end
use, product requirements, distribution channels or some other way.

These four dimensions of the product mix provide the bases for defining the company’s product
strategy. The company can grow its business in four ways. The company can add new product lines,
thus widening its product mix to capitalize the company’s reputation or the company can lengthen its
existing product lines to become a more full line company or the company can add more product
variants to each product and thus deepen its product mix. Finally the company can pursue more
product-line consistency or less, depending upon whether it wants to acquire a strong reputation in a
single field or participate in several fields.

PRODUCT LINE DECISIONS

Product Line
A product line is a group of products that are closely related, because they function in a similar
manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall
within given price ranges.

 LINE-STRETCHING DECISION
Every company’s product-line covers a certain pair of the total range offered by the industry as a
whole. For example, Maruti Udyog automobiles are located in the low-medium price range of the
automobile market. Line stretching occurs when a company lengthens its product-line beyond its
current range. The company can stretch its line downward, upward or both ways.

Downward Stretch
Many companies initially locate at the high end of the market and subsequently stretch their line
downward. For instance, TATA who are the producers of medium and high price/big car segment,
now have stretched downward by entering into small car segment by releasing TATA Indica.

Upward Stretch
Companies in the lower end of the market might contemplate entering the higher end. They may be
attracted by a higher growth rate, higher margins or simply the chance to position themselves as full-
line manufacturers. Again, it is Maruti who initially entered in the small car segment entered higher
end by production Maruti 1000 and Maruti Esteem.

 Two-way Stretch
Companies in the middle range of the market may decide to stretch their line in both directions.

 Line-Filling Decisions
A product line can also be lengthened by adding more items within the present range of the line.
There are several motives for line-filling such as reaching for incremental profits; trying to satisfy
dealers to complain about lost sales because of missing items in the line; trying to utilize excess
capacity; trying to be the leading full-line company and trying to plug holes to keep on competitors.
If line-filling is overdone it may result in cannibalization and customer confusion.

STEPS IN THE NEW PRODUCT DEVELOPMENT PROCESS

 Generation of New Product Ideas

 Screening of Ideas

 Concept Development and Testing

  Marketing Strategy Development

 Business Analysis

 Development of the Product

 Market Testing

 Commercialization

PRODUCT MODIFICATION DECISION

A product modification is may deliberate alteration in the physical attributes of a product or its
packaging.
A number of factors may prompt the manufacturer to modify his product.

 To make advantage of a new technological development.

 To modify the product out of competitive necessity.
 To regenerate a product suffering from declining sales.
 The attributes of the product such as taste, colour, size, material, functional features, styling
and engineering, etc. or combination of these attributes could be considered for modification.
 Three important and contrasting product modification strategies are:
 Quality improvement
 Feature improvement
 Styling improvement
 A strategy of quality improvement aims at increasing the functional performance of the
product – its durability, reliability, speed, taste etc. A manufacturer can often overtake
competition by launching the new and improved automobiles, television set etc.

PRODUCT ELIMINATION DECISIONS

Product eliminations is an act of discontinuing or dropping the existing product. Many sick or
marginal products never die; they are allowed to continue in the company’s product until they ‘fade
away’. As a result, these marginal products lessen the firm’s profitability and reduce its ability to take
advantage of new opportunities.

Reasons for Product Elimination

 The weak product tends to consume a disproportionate amount of management’s time

 If often requires frequent price and inventory adjustments

 If generally involves short production runs in spite of expensive set up times.

 It requires both advertising and sales-force attention that might better be diverted to making
the ‘healthy’ products more profitable.
  Its very unfitness can cause customer misgivings and cast a shadow on the company’s image.

Product Failure
The new product development can be very risky. One study found that the new product failure rate
was 40 percent for consumer products, 20 percent for industrial products and 18 percent for services.
The failure rate for consumer new products is specially disturbing.

Reasons for New Products Failure

(1) A senior executive might push a favourit idea through in spite of negative markting research
findings.
(2) The idea may be good, but the market size is over estimated.

(3) The actual product is not designed.

(4) The product may be incorrectly positioned in the market.

(5) The product may not be advertises effectively.

(6) The product may be over priced.

(7) The cost of product development may be higher than expected.

(8) The competitions may be severe than expected.

PRODUCT LIFE CYCLE

The Product Life Cycle is an attempt to recognize ‘distinct stages’ in the ‘sales history’ of the
product. In each stage, there are distinct opportunities and problems with respect to marketing
strategy and profit potential. Hence, products require different marketing, financing, manufacturing,
purchasing and personnel strategies in the different stages of their life cycle. The PLC concept
provides a useful framework for developing effective marketing strategies in different stages of the
Product Life Cycle.

There are four stages in the Product Life Cycle – introduction, growth, maturity and decline.

Introduction Stage
The introduction stage starts when the new product is first launched. In this stage only a few
consumers will buy the product. Further, it takes time to fill the dealer pipeline and to make available
the product in several markets. Hence, sales will be low a profit will be negative or low. The
distribution and promotion expenses will be very high. There are only a few competitors. Regarding
pricing, the management can pursue either skimming strategy i.e. fixing a high price or penetration
strategy i.e. fixing a low price.
Growth Stage
If the new product satisfies the market, it will enter a growth stage. This stage is market by quick
increase in sales and profits. The early adopters will continue to buy, and later buyers will start
following their lead, especially if they hear favorable word of mouth. New competitors enter the
market, attracted by the opportunities for high profit. The market will expand. Prices remain the
same. Companies maintain their promotional expenditure at the same level or slightly higher level to
meet competition and continue educating the market.

During this stage, the company uses the following marketing strategies:

 The company improves product quality and adds new-product features and models.

 It enters new market segments.

 It enters new distribution channel.

 It changes the price at the right time to attract more buyers.

Maturity Stage
This stage normally lasts longer than the previous stages and it poses strong challenges to marketing
management. At this stage, sales will slow down. This stage can be divided into three phases. –
Growth maturity, stable maturity and decaying maturity.

In the growth maturity phase, the sales start to decline because of distribution saturation. In the stable
maturity phase, sales become static because of market saturation. In the decaying maturity phase, the
absolute level of sales now starts to decline and customers starts moving toward other products and
substitutes. Competitions become acute.

Although many product in the mature stage appear to remain unchanged for long periods, most
successful ones are actually evolving to meet changing consumer needs. Product managers should do
more than simply ride along with or defend their mature products – a good offense is the best
defense. They should consider modifying the market, product and marketing mix.

Decline Stage
In this stage, sales decline and eventually dip due to number of reasons including technological
advances, consumer changes in tastes and acute competitions. As sales and profit decline some firms
withdraw from the market. Those remaining may reduce the number of product offerings.

Hence, companies need to pay more attention to their aging products. The firm has to identify those
products in the decline stage by regular’s reviewing sales, market shares, costs and profit trends.
Then, management must decide whether to maintain, harvest, or drop each of these declaiming
products.
 BRANDING

Branding can add value to a product and is therefore an intrinsic aspect of product strategy.
Essentially, a brand is a promise of the seller o delivers a specific set of benefits or attributes or
services to the buyer. Each brand represents a level of quality.

BRAND POSITIONING
Brand positioning is the result of consumer’s perception about the brand relative to the competing
brands. Brand positioning is a part of brand identity and value composition that is to be actively
communicated to the target audience and that demonstrates an advantage over competing brands.
According to Kotler positioning is the act of designing the company’s offer so that it occupies a
distinct and valued place in the mind of the target customers.

Marketing research is the systematic gathering, recording, and analysis of data about issues relating
to marketing products and services. The goal of marketing research is to identify and assess how
changing elements of the marketing mix impacts customer behavior. The term is commonly
interchanged with market research; however, expert practitioners may wish to draw a distinction, in
that market research is concerned specifically with markets, while marketing research is concerned
specifically about marketing processes.

Marketing Research can be classified as: 1. Basic research 2. Applied research

It can also be classified as:

a) Problem solving research • Segmentation research • Product research • Pricing research •

Promotion research • Distribution research b) Problem identification research. • Market potential
research • Market share research • Image research • Market characteristics research • Forecasting
research • Business trend research

Sources of information:

Primary Sources In-Person, Interview, E-Mail contact, Event, Discussion, Debate, Community
Meeting, Survey, Artifact, Observation of object (animate and inanimate)

Secondary Sources Reference Material, Book, CD Rom, Encyclopedia, Magazine, Newspaper, Video
Tape, Audio, Tape, TV, Government records, Syndicated research data

Retailing / Retail Marketing:

Retailing is the last step in the supply chain. Retail marketing is comprised of the activities related to
selling products directly to consumers through channels such as stores, malls, kiosks, vending
machines or other fixed locations, according to the Free Dictionary.
Retailers buy products in bulk and sell them in small quantities to individual customers.
 Wholesaling:
Wholesaling usually, but not necessarily, involves sales in large quantity and at a cost that is
significantly lower than the average retail price.
Wholesaling became particularly advantageous after the introduction of mass production and mass
marketing techniques in the 19th century. Without wholesale organizations, large manufacturers
would have to market their products directly to a great many retailers and/or consumers at high unit
costs, and retailers or consumers would have to deal with a large number of manufacturers at great
inconvenience.

About Jamuna Bank

Organizational Overview:
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 of Bangladesh
with its Head Office currently at ChiniShilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000, and Bangladesh. The
Bank started its operation from 3rd June 2001.
JBL undertakes all type of banking transactions to support the development of trade and commerce in the
country. JBL‟s services are also available for the entrepreneurs to set up new ventures and BMRE for
industrial units. The Bank gives special emphasis on Export, Import, Trade Finance, SME Finance, Retail
Credit and Finance to Women Entrepreneurs.
At present the Bank has real-time Online banking branches (of both Urban and Rural areas) network
throughout the country having smart IT-backbone. Besides traditional delivery points, the bank has ATMs of
its own, sharing with other partner banks and consortium throughout the country.
To provide clientele services in respect of International Trade it has established wide correspondent banking
relationship with local and foreign banks covering major trade and financial center at home and abroad.

 Executive Committee Chairmen Mr. Kanutosh Majumdar

 BOD Chairmen Engr. A. K. M. Mosharraf Hussain
 Founder Chairman of the Bank Late Al Haj M. A. Khayer
 Managing Director & CEO Mr. Shafiqul Alam
 Additional Managing Director Mirza Elias Uddin Ahmed
 Director & Chairman of Jamuna Bank Foundation Al Haj Nur Mohammed
 Total Branch- 130 ( Last Rayerbazar- Kurigram)
 Total ATM Booth- 266
 Profit ( 2017- 464 core & 620 core-2018)

JBL (Vision, Mission and Objectives)

Vision
Jamuna bank wants to become a leading banking institution and to play a significant role in the development
of the country.
Mission
The Bank is committed for satisfying diverse needs of its customers through an array of products at a
competitive price by using appropriate technology and providing timely service so that a sustainable growth,
reasonable return and contribution to the development of the country can be ensured with a motivated and
professional work-force.
Objectives

 To earn and maintain CAMEL Rating 'Strong.'

 To establish relationship banking and improve service quality through development of Strategic
Marketing Plans.
 To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
 To introduce fully automated systems through integration of information technology. To ensure an
adequate rate of return on investment.
 To keep risk position at an acceptable range (including any off balance sheet risk).
 To maintain adequate control systems and transparency in procedures.
 To develop and retain a quality work force through an effective human Resources Management
System.
 To ensure optimum utilization of all available resources.
 To pursue an effective system of management by.

Values:

 Place customer interest and satisfaction as first priority and provide customized banking
products and services.
 Value addition to the stakeholders through attaining excellence in banking operation.
 Contribute significantly for the betterment of society.
 Ensure higher degree of motivation and dignified working environment for our human capital and
respect optimal work life balance.
 Committed to protect the environment and go green.
 Employees of JBL share certain common values, which helps to create a JBL culture.
 The client comes first.
 Search for professional excellence.
 Quick decision –making.
 Flexibility and prompt response.

Corporate Slogan
“Your Partner for growth”
Services & Products of JBL
The Bank has an array of tailor made financial products and services. Such, products are Monthly Savings
Schemes, Consumer Credit Scheme, Lease Finance, and Personal Loan for Women, and Shop Finance Scheme
etc. JBL also introduced Q -cash ATM cards for its valued customers giving 24 hours banking services
through Debit Cards. JBL offers the following services to its valued customer-
(a) Deposit Schemes
(b) Remittance and Collection
(c) Import and Export handling and finance
(d) Loan syndication
(e) Project finance
(f) Investment Banking
(g) Lease Finance
(h) Hire Purchase
(i) Personal Loan for Woman
(j) 24-hours banking: Q-Cash ATM facility
(k) Islamic Banking
(l) Corporate Banking
(m) Consumer Credit Scheme
(n) International Banking.

Deposit Schemes

Jamuna Bank presents lucrative deposit schemes for its clients. These are mostly for limited income
people who want to save some money for future. The schemes are namely:

 Marriage Deposit Scheme

 Lakhpati Deposit
 Millionaire Deposit
 Kotipati Deposit
 Education Deposit
 Monthly Benefit Scheme (MBS)
 Double/Triple Growth Deposit
 Monthly Savings Scheme (MSS)

For opening a deposit scheme you only need to maintain a savings bank account at any branch of
Jamuna Bank Ltd. Such a scheme in this bank would help you to overcome difficult hurdles of life
much easily.

Credit Schemes
Major Field of Credit Banking of JBL may be termed as Corporate Banking. Under this head it
concentrates on the following:

 Agro processing Industry

 Export oriented / Import substitute Industry
 Telecommunication
 Information Technology
 Real Estate & Construction
 Wholesale Trade
 Transport, Hotel & Restaurant
 Nonbank financial institution
 Loan Syndication
 Project Finance- Investment Banking
 Lease Finance- Hire Purchase-International Banking
 Export Finance
 Import Finance

Other Products & Services

 JBL serves nonresident Bangladeshis (NRB) through its different services. It maintains a wide
network of correspondent banks and Money Exchange Houses all over the world for sending
home bound remittances through proper channel. NRBs are allowed to open foreign currency
account s in their names. They may also have fixed deposit receipt accounts in F/C and many
other schemes for investment at JBL.
 This third generation private bank issues Debit and Credit cards for its customers. The cards
are of local and international categories. About 1500 ATM booths (own and shared) serve the
card holders round the clock.
 Jamuna Bank Ltd. always tries to provide its clients a better and world class service through
modern technology. So it didn’t make any delay to introduce any branch banking through its
67 branches all over the country. All of its customers are entitled to avail this facility without
spending a fur thing.

NRB Banking & FRD Profile

Jamuna Bank Ltd is one of the fast growing private commercial bank in the country having wide
Branch & Associate network throughout the Country. All the branches are running with real-time
Online and ATM facilities to settle their transaction from remote areas. We have dedicated NRB
Banking Division to ensure personalized services to the valued customers at branch & Head Office
Level.

We have an admirable Remittance Tie-up with a good number of world renowned Exchange Houses
and Banks throughout the World to facilitate the Remittance services to the Beneficiaries. Besides we
have 102+ Branches network and 3,000+ ATM outlets (own & shared) throughout the Country.

We have also a strong Remittance Settlement/distribution Network with different Associate Banks &
BEFTN (Bangladesh Electronic Fund Transfer Network) covering more than 9500 remote locations
throughout the Country. To ensure our reach to the doorstep of our valued customers / Beneficiaries
we have arranged M-Remittance facilities with Grameenphone, Banglalink, ROBI.

Our main purpose is to cater to the needs of NRBs & their beneficiaries offering deposit and loan &
investment products and services. Prioritizing the needs of NRBs, we are in process to offer different
personalized products & services by establishing JBL own Exchange Houses in different Countries
like UK, USA, Malaysia, Singapore, Italy, Spain, Australia, Japan, etc. To serve the NRBs in the best
possible manner, Jamuna Bank Limited has deployed NRB community consultants in Exchange
Houses around the globe. They encourage potential customers to use legal channels to remit their
money to the loved ones as well as to invest their savings in the productive sectors.

We have wide range of Correspondent Banking Network & Remittance drawing arrangement with
different International reputed Money Transfer Companies & Exchange Houses throughout the world
to facilitate Bangladesh bound Remittance Globally. We value our customers to provide prompt &
efficient services offering best competitive price for their hard-earning Foreign Currencies.

NRB
Monthly
Savings
Scheme
  NRB Monthly Benefit Scheme
NRB Double Growth Benefit
 
Scheme(DBS)
NRB Triple Growth Benefit Scheme
 
(TBS)
  NRB Kotipoti Deposit Scheme
  NRB Millionaire Deposit Scheme
NRB Monthly  pension  Deposit 
 
Scheme
  NRB Pension Term Deposit Scheme
  NRB Home travel Deposit Scheme 
NRB Property Deposit
 
Scheme(Land/Apartment) 
  NRB Wage Earners Deposit Scheme
  NRB Home Car Deposit Scheme
  NRB Education Saving Scheme
  NRB Student deposit Scheme
NRB Women/ Housewife  Deposit
 
Scheme
  NRB Future Plan Deposit Scheme
NRB Advance Earning Deposit
 
Scheme 

Loan Scheme for NRB

  NRB SME
  NRB Agriculture
   NRB Real Estate Financing
  NRB Retail Loan

Remittance Services

 Direct account credit to Beneficiary’s Account maintained with Jamuna Bank Limited.
 Same day Credit to Beneficiary’s Account maintained with any other Banks Branches (9500
aprox.) in Bangladesh at the same day through EFTN (Electronic Fund Transfer Network).
 Cash payout over the counter of JBL Branches & Mobile Operator Cash Pick up Points
through secret PIN number throughout the country.

List of Agent Banks for remittance service

1. Southeast Bank Ltd.
2. SBAC Bank Ltd.
3. Union Bank Ltd.
4. Meghna Bank Ltd.
5. NRBC Bank Ltd.
6. Midland Bank Ltd.
[Link] Bank Ltd

From anywhere of the world, remittance can be sent through the following account of Jamuna Bank
Limited mentioning the Beneficiary Bank account details:

Standard Chartered Bank, New York, (USD A/C: 3582-069303-001) (Chips UID# 011-575),
SWIFT: SCBLUS33

SME Banking
Now our SME clients are being involved in foreign trade, their network has been expanded
throughout the world.

 Jamuna Bonik
 Jamuna Chalantika
 Jamuna Green
 Jamuna Jantrik
 Jamuna Nari Uddogh
 Jamuna NGO Shohojogi
 Jamuna Shachchondo
 Jamuna Sommriddhi
 Jamuna Swabolombi

To facilitate the foreign trade transactions of the SME clients, Jamuna Bank is offering a product
named ‘Jamuna Bonik’.

Purpose
To settle foreign trade payment & import document retirement line (mainly import financing, e.g.,
L/C and LTR facility).

Key Features

 Loan Amount: Min. BDT 5.00 lac to Max. BDT 50.00 lac.
 Tenure: For each L/C highest 04 months and for each LTR highest 06 months.
 L/C Margin and Commission: As per negotiation.
 Fast and quality service.
 No hidden charge.

Eligibility

 Having business experince for at least 2 years in the same line.

 Age Limit: 20 years to 60 years.

Required Documents

 Last twelve months’ sales statement.

 Last twelve months’ bank statement.
 Valid Trade License of last two years.
 National Voter ID/ Passport of the borrower.
 Photographs of the borrower and the guarantors.

Islami Banking Activities

Besides conventional banking, Jamuna Bank Limited is carrying Islami Banking activities based on Islami
Shaiah principles. The first Islami Banking branch of the Bank opened on October 25, 2003 at Nayabazar in
Dhaka. Afterwards it’s second branch opened on November 27, 2004 at Jubilee Road in Chittagong. Jamuna
Bank Limited is committed to conduct business of it’s Islami Banking branches strictly complying Shariah
requirements. To achieve this goal a Shariah Supervisory Committee has been constituted with renowned
Islami scholars of the country and senior banker having Islami Banking experiences in depth knowledge of
conventional and Islami Banking. All activities of Islami Banking branches are carried out under the guidance
of this Committee. A separate division has also been created at Head Office.

Islami Banking branches receive deposits under two principles:

i) Al-Wadeeah principle.
ii) Mudaraba principle.

Al-Wadeeah:

Fund which is deposited with Bank by the depositors with clear permission to utilize /invest the same
is called Al-Wadeeah. Islami Banking branches receive deposits in Current Accounts on the basis of
this Al-Wadeeah Principle. Islami Banking branches obtain permission from the Al- Wadeeah
depositors to utilise the Funds at its own responsibility and the depositors would not share any profit
or loss earned/incurred out of using of this funds by the bank. The bank have to pay back the deposits
received on the principle of Al-Wadeeah on demand of the holders. The depositors have to pay govt.
taxes and other charges, if any.

Mudaraba:

Mudaraba is a partnership of labour and capital, where one partner provides full capital and the other
one manages the business. The capital provider is called Sahib-Al-Maal and the user of the capital is
called Mudarib. As per Shariah principles, the Mudarib will conduct the business independently
following Shariah principles. The Sahib-Al-Maal may provide advices, if he deems fit but he can not
impose any decision over the Mudarib. Profit, if any, is divisible between the Sahib-Al-Maal and the
Mudarib at a predetermined ratio, while loss, if any, is borne by the Sahib-Al-Maal. Mudarib can not
avail of any salary or remuneration against his labour as a manager or conductor of the
enterprise/business. The deposits, received by Islami Banking branches under this principle are called
Mudaraba Deposits. Here, the depositors are called Sahib-Al-Maal and the bank is called Mudarib.
The Mudaraba deposits include:

i) Mudaraba Savings Deposits (MSD)

ii) Mudaraba Short Notice Deposits (MSND)
iii) Mudaraba Term Deposits (MTD).

Corporate Banking
Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate
client groups combining trade, treasury, investment and transactional banking activities in one package. The
corporate Banking specialists will render high class service for speedy approvals and efficient processing to
satisfy customer needs. Corporate Banking business envelops a broad range of businesses and industries. You
can leverage on the knowhow in the following sectors mainly –

 Agro processing industry

 Industry (Import Substitute / Export oriented)
 Textile Spinning, Dyeing / Printing
 Export Oriented Garments, Sweater.
 Food & Allied
 Paper & Paper Products
 Engineering, Steel Mills
 Chemical and chemical products etc.
 Telecommunications.
 Information Technology
 Real Estate & Construction ·
 Wholesale trade
 Transport · Hotels, Restaurants ·
 Non-Bank Financial Institutions
 Loan Syndication ·
 Project Finance
Other highly customized services of JBL
Just Pay Service
Jamuna Bank launches its mobile app "JustPay" at Jamuna Bank Head office recently. Director of the
Bank Redwan ul Karim Ansari and Managing Director & CEO of the Bank Shafiqul Alam were
present in the launching program. Besides Additional Managing Director of the Bank Mirza Ilias
Uddin Ahmed & Deputy Managing Director A. K. M. Saifuddin Ahamed along with High officials
of Circle Fintech Limited were present in the ceremony. Circle FinTech Ltd is technology partner of
JustPay. Through this app account holders will get account information, statement, fund transfer,
mobile recharge ATM/Branch/Product information easily. This comprehensive banking app will help
customers to manage their time and banking efficiently. JustPay is now available for download at
Google Play store & Apple Store.
Q-Cash Round The Clock Banking
Jamuna Bank Q-Cash ATM Card enables you to withdraw cash and do a variety of banking transactions 24
hours a day. Q-Cash ATMs are conveniently located covering major shopping centers, business and residential
areas in Dhaka and Chittagong. ATMs in Sylhet, Khulna and other cities will soon start be introduced. The
network will expand to cover the whole country within a short span of time.
With Jamuna Bank Q-Cash ATM card customer can:

 Cash withdrawal Round The Clock from any Q-Cash logo marked ATM Booths.
 POS transaction (shopping malls, restaurants, jewelries etc.).
 Enjoy overdraft facilities on the card (if approved)
 Utility Bill Payment facilities
 Cash transaction facilities for selective branches nationwide
 Jamuna Bank Limited has installed its first Q-cash ATM at Dhanmondi Branch, Dhaka and Jamuna
Bank is starting to issue VISA card. In line with the issuance of Q-cash products JBL is starting to
introduce VISA card.

Online/ Internet Banking

Jamuna Bank Limited has introduced real-time any branch banking on December 31, 2010. Now, customers
can withdraw and deposit money from any of its 130 branches. The valued customers can also enjoy 24 hours
banking service through ATM card from any of Q-cash ATMs located at Dhaka, Chittagong, Khulna, Sylhet
and Bogra. All the existing customers of Jamuna Bank Limited will enjoy this service by default. Key
features:

 Centralized Database
 Platform Independent
 Real time any branch banking
  Internet Banking Interface
 ATM Interface
 Corporate MIS facility
 Delivery Channels:
 Branch Network
 ATM Network
 POS (Point of Sale ) Network
 Internet Banking Network

My Internship experience
Dr. Engr. Rashid Ahmed Chowdhury= Chairman

Mr. Md. Abdul Khaleque Khan  Managing Director & CEO

On my first day at the office, I was firstly introduced to the office staff. It wasn’t a formal introduction, rather
my supervisor told me to get myself introduced to everyone in the office. There are total of 22 staffs
working on the branch. The branch manager, who is a Senior Vice President, called me to his office and
talked to me for about half an hour. We got to know each other, and he gave me some ideas about how the
internship program is done there. He also told me to reach out to him if there’s any need.
After introduction, I was shown account opening forms and taught how to fill out the forms. This was a
fairly easy task. I was also shown to the file room, where the old and current files are kept. There are separate
desks for separate tasks, for example, there’s a General Banking desk, Credit desk, L/C desk etc. I got
introduced to every desk’s officers. They gave me basic information.
I worked on how to open different kinds of accounts, e.g. Savings Account, Fixed Deposit Account, Monthly
Savings Scheme Account, Millionaire Deposit Scheme etc. I also learned how to check if the National ID card
is true or not. The bank has access to the Bangladesh Election Commission website to verify the NID card
information. I also worked on some vouchers swell.
The staffs are very friendly and although they are very busy with their works, they do answer in detail if I
have any questions about anything.
Job Responsibilities
As an intern, I watched exercises of all offices. But I carried out the following responsibilities also-
• In the general banking department, I helped the clients to fill up the form while opening the account.
• Check Book giving and order benefit
• I gave information to the clients about different schemes of JBL that are offered.
• I got new check book and kept section in enlist book.
• Checking and binding Vouchers.
• Organized various types of files, documents, check books, account opening forms as according to the serial
number and furthermore make their documents.
• L/C opening for outside exchange.

Function of the Department

There are three Departments in Bangladesh Commerce Bank Branch
 General Banking department
 Credit department
 Foreign Exchange department

GENERAL BANKING
General banking is the starting point of the banking operation. It is the department which provides day-to-
day services to the customers‟ main functions of general banking department are the following: • Cash
department • Account opening • Clearing • Check book issue
Accounting Opening Section
In the first day of my joining in bank I have worked in account opening section. The bank officer of this
section told me how an account is opened and the documents which are needed for a customer for opening
an account. He told me that firstly a customer needs to apply for opening an account by filling up the
account opening form which will be provided from the bank where the customer need to fill up personal
information, introducer information, nominee‟s information, type of account, signature with two copies
passport size photograph and NID photocopy with relevant documents of both applicant and nominee. The
officers filled up other information of the form. My job was to check all the information according to NID
card.
A customer can open different types of accounts through this department such as: • Current Account (CD) •
Savings Account (SB) & Monthly Savings Scheme(MSS) • Fixed Deposit Receipt(FDR)
Check book issue:
After opening an account I learned how a check book is issued to customer. From the bank officer I was able
to know that when the customer finished filling up the form he/she needs to deposit a minimum
required amount in the account after that account opening form they sent it for issuance of check book.
Account name and number is written on the face and leaf of the check book. Then it‟s important to enter the
check book number and also customer name with account number in the check issue register book. Here I
gave check book to the clients by asking their name and account number with verification and also notify
those customer who did not collect their check book in the given time.
Pay order
Pay order is equivalent to cash so when a customer needs to pay someone in cash then they have to make it on
pay order. When a customer comes to do a pay order I gave them pay order application form and they
have to fill it up. The form consist of whom to pay, account holder name and address, account number,
mobile number, amount in figure and words and last of all signature. Then the bank officer verifies all the
information provided by the customer and cut some commission charges and after authorization the payment
is made by payer. There are four steps of pay order– • Giving pay order form • Filing up the form by client •
Verifying by the bank officer Payment is made
Clearing
Banks for credit of the proceeds to the customer’s account accept cheques and other similar instruments. The
bank receives many such instruments during the day form account holders. Many of these instruments are
drawn payable at other banks. As cheques payment order or bill come from a bank with the range of local
clearinghouse then it is sent for collection through clearinghouse. The cheques may be crossed or not, if a
customer of JAMUNA bank.
Cash department
Cash section is a very sensitive organ in a branch and is handling with extra care. Operation of this section
being at the beginning of the banking hour. Cash officer being his transaction with taking money from the
vault, known as the opening cash balance. Vault is kept in a much secured room. Keys of the room is under
control of the cash officer and branch in charge. The amount of opening cash balance is entering into the cash
register. After transaction of whole day, the surplus money remain in the cash counter is put back in the
vault and known as the closing balance.
Foreign Exchange department
Foreign exchange department deals with foreign currency and the transaction of it. The major job of this
department is Letter of Credit (for Export &Import).
Letter of credit the various steps in the operation of a letter of credit are described below-
1. The importer and exporter have made an agreement before a L/C has been issued.
2. The importer applies for a L/C from his banker known as the issuing bank. He may have to use his credit
lines.
3. The issuing bank opens the L/C that is diverted through its abroad Correspondent bank, known as the
advising bank.
4. The advising bank informs the exporter (beneficiary) of the arrival of the L/C.
5. Exporter dispatches the products to the importer or other assigned places stipulated in the L/C.
6. The exporter also prepares his own documents &collects transport documents or other files and papers from
those parties. All these documents will be sent to his banker, which is acting as the advising bank.
7. Negotiation of the bills of exports happens when the banker agrees to provide him with financial support. In
that case, he obtains payment immediately upon presentation of documents. If it is not, the documents will be
sent to the issuing bank for payment.
8. Documents are sent to the issuing bank for repayment or installment.
Required documents for opening an LC:
• The applicant must have a CD account with the bank.
• Formal LC opining application.
• Must have the import Registration Certificate (IRC), TIN and VAT certificate.
• Credit Information Bureau (CIB) report of the client.
• Charge Documents such as DP note, GLCA, Letter of hypothecation, Counter guarantee etc.
• Duly filled up and signed LC application from, IMP (Important Form), LACF (L/C authorization form)
• Proforma Invoice/ Contracts applicant
• Credit Report of the supplier
• Insurance cover note with money receipt
• Registration from CCI & E (Chief Controller of Import &Export)
When a new letter of credit arrives in the bank from head office it is carefully cheeked. The entire relative
documents are submitted or not. There is a documentary number which is called LC number, ID number,
beneficiary name and applicant name written above the file. Then it is given LDBC number from bank then
and head of branch and another employee of foreign exchange department sign those paper. After that the file
given an outer number. There might be facing some problem for LC it because of shipping problem.

What cybersecurity challenges do you think Bangladesh’s banking sector is

facing at the moment?

At present, cybersecurity is a big challenge for our country because using IT in the
financial sector has become very widespread. All types of transactions are done using
digital systems, thus it is getting much riskier. 

We have to take measures to mitigate these risks, which is why investment in the IT
sector has to be increased, both in terms of physical infrastructure and software
upgrades. Bankers should be more aware and receive IT training.

What potential does the banking sector have in terms of investment?

Growth of our banking industry is not satisfactory compared to other countries.

However, many new projects are being implemented, contributing to the growth of
new businesses and the service sector, for which funding will be needed. Banks have
the opportunity to finance these industries.

Bankers often complain they do not find entrepreneurs to lend money to.
Entrepreneurs say the opposite. What is the reason behind this?

Both are partially true. Often good entrepreneurs do not receive loans due to lack of
proper documentation.
Unfortunately, bankers tend to lend based on current economic trends. For instance, if
an industry is doing well, we all approach its leading businessmen to offer loans, thus
ignoring other promising industries suffering due to lack of funds.

Default loans in Bangladesh’s banking sector are increasing. What is your take on
this?

Bank liquidity declines when default loans increase, while interest on loans goes up.
Therefore, we need to be careful as the liquidity support of banks will not be available
for long. Then it will be difficult to run banks. So everyone will have to take initiatives
to help sustain the banking system.

Banks play an important role in the development of a country. If this sector becomes
ill, the country’s development will be hampered. Like other countries, strict measures
will have to be taken against defaulters.

Banking sector challenges in 2019/ what’s the present scenario of

banking sector?

Handling a chaotic and vulnerable banking sector along with a huge amount of bad
loans is going to be the biggest challenge for the new government in this year (2019),
the country’s leading economists warned, reports The Financial Express BD.
At the same time, stimulating the private sector investment and reforming the tax
system will also remain among the major tasks for it in the coming months, experts
observed.
“Ensuring good governance in the banking sector remains the number one challenge
for the country for the new year,” said A B Mirza Azizul Islam, a leading economist
and former finance adviser of caretaker government.
“There has to be a strong political commitment for overcoming the challenge,” he
added.
“We need fundamental structural reforms in our banking sector,” said Dr. Zaidi Sattar,
Chairman of Policy Research Institute (PRI), one of the country’s leading think-tanks.
“The problems in the banking sector have not been created in a day. The solution to
those problems is also not simple.”
“The banks are in trouble because they have happily doled out loans to the big names
without proper judgment and monitoring. Now these institutions are being compelled
to reschedule the loans,” Mr. Sattar observed.
The PRI chairman pointed out, “There is a huge lack of supervision in our banking
system. Unless there is a political will, it would be very difficult to solve these
problems.”
The new year is also coinciding with a time when a new government is going to be
formed following the general election, held this week.
Against this backdrop, the economists have observed that the new government should
take some immediate actions to solve the chaos in the banking arena.
“The new government should be tough to tackle the bulging of non-performing loans
(NPL), and should take measures immediately,” said Dr. Selim Raihan, Executive
Director of South Asian Network for Economic Modeling (SANEM), another
prominent research institute.
“There is a visible lack of confidence regarding the banking sector, and it is impacting
our industrial sector. Getting loans from the banks is also becoming difficult (for it),”
he added.
Apart from the banking sector, the economists also emphasised creating an
investment-friendly environment for accelerating private investment in the country.
“The private sector investment has remained in a state of doldrums for almost a
decade, and it needs to be accelerated now,” Mirza Azizul Islam said.
“Issues like poverty reduction and higher employment generation depend on
enhancing the private sector investment,” he added.
“To increase private investment, things like ensuring efficient infrastructure, including
ports and transportation, energy generation, increasing ease of doing business, and
good governance are also critical.”
“The big infrastructure projects that have been initiated in the recent years need to be
implemented quickly to accelerate private investment,” opined Selim Raihan.
“The planned special economic zones (SEZs) need to be operational soon. This, in
turn, would encourage investment and export,” he added.
The experts also focused on bringing fundamental reforms in the tax system to make it
more business- and investment-friendly.
“We need complete modernisation of our tax system. We are one of the lowest
economies as far as tax mobilisation or revenue mobilisation is concerned. Our tax-
GDP ratio is one of the lowest in the world,” said Dr. Sattar.
“We have a tax system, which is hurting our trade, investment and growth
performance,” he added.
The experts also underlined the need for formulating a trade policy that will encourage
export diversification.
“Modernisation of tariff structure will remain as a major challenge for us in the
coming days. Our tariff structure is much more suited for the least developed countries
(LDCs) or the low-income ones,” Mr. Sattar observed.
“But, as we are moving towards high middle-income strata, our tariff structure also
needs to be suitable for that.”
“We have to be an export-led economy. For that our tariff system should be much
more export-oriented,” he added.
Professor Selim Raihan noted that export diversification has become even more
important in the context of the ongoing global trade war.
“We have to provide appropriate incentives to various other potential export sectors to
accelerate export diversification,” he noted.
The experts, meanwhile, warned that poverty has been reduced substantially in the
country, but the rate of poverty reduction is actually slowing down in the recent years.
“For that, we need to increase allocation to social safety-net programmes,” said Mirza
Azizul Islam.
“We need to increase the skills of the poor people by providing them quality
education,” he added.
“We have done a lot in terms of human development. But we are lagging behind in
terms of human capital development and skill-oriented human development,” said
Zaidi Sattar.
The economists also observed that the government should be more attentive to the
distributive aspect of growth in the light of growing inequality in the country.
“To make this growth more inclusive and distributive, strengthening governance and
institutions is crucial,” said Professor Mustafizur Rahman, Distinguished Fellow of
Center for Policy Dialogue (CPD), the leading economic think-tank.
“A number of crucial reform programmes, acts and policies have remained pending for
a long time until now. These need to be implemented expeditiously,” he opined.
Noting a recent slowdown in remittance growth, Mirza Azizul Islam said the country
should focus more on exporting skilled workforce overseas instead of depending
mainly on unskilled workforce for earning remittance.
Dr. Zaidi Sattar observed that the new government should go for forming high-level
commissions or taskforces to carry out necessary reforms.
“These commissions or taskforces need to be manned with competent people, and they
need to formulate forward-looking policies,” the PRI chairman opined.
“The new cabinet needs to bring in some young and dynamic ministers, who bear the
vision of a modern and prosperous Bangladesh.

Banking sector and its impact on our economy

In the last two years, Bangladesh's economic expansion has been quite impressive
from the perspective of GDP growth rate, which was seven-plus percent both years,
according to figures from government and other sources. Yet, as data has revealed, and
as experts have overwhelmingly concurred, the growth rates could have been
significantly higher.

But while we should absolutely take the failure to live up to our full potential with a
pinch of salt, there is still at least one positive that we should also take from this. That
is, Bangladesh, economically, has tremendous potential.

This is no less down to the fact that Bangladeshis are innovative people; as evident
from the success that they are achieving in every type of scientific field all over the
world, even in the most competitive environments. Additionally, the number of
working age (particularly young) people currently in the country is the highest it has
ever been, and also the highest it will be for some time, creating for Bangladesh, that
window of opportunity—demographic dividend—to rapidly increase its overall
production capacity through the efficient incorporation of these people into the
economy—as the free market in theory, at least, is supposed to help achieve. Also
helpful has been the fact that certain markets are, slowly but surely, shifting to
Bangladesh from other countries due to various geo-economic and geo-political
reasons, along with opportunities.

Disappointingly, however, data also shows that the fruits of whatever growth we have
had, recently, have gone largely to a small minority of our population. According to a
government study made public on October 17, 2017, for example, the poorest five
percent of our population has had their share of the national income reduced from 0.78
percent in 2010 to 0.23 percent in seven years. The richest five percent in contrast has
had their share of national income increase from 24.61 percent in 2010 to 27.89
percent in 2017.

While we have seen a similar trend developing globally, what has accompanied this
trend in parallel everywhere is the complete and utter collapse of respect for long-
established banking norms and regulations—along with a form of wealth transfer to
the rich from the poor in the form of bailout packages and austerity measures. Thus, as
it should be to no one's surprise, during the time that inequality increased globally, the
same has been the case in Bangladesh.

And this is quite clear to see, as among the eight state-owned banks, 40 privately-
owned banks and nine foreign-owned banks, nonperforming loans (NPLs) stood at Tk
80,397 crore as of September 2017, according to Bangladesh Bank (BB) figures. That
is 10.67 percent of all outstanding loans. And if restructured or rescheduled loans were
included, NPL in the banking sector goes up even more—a mammoth 17 percent of
total outstanding loans. Like previous years, state banks were again the worst
performers last year as NPL of the eight state-owned banks stood at Tk 44,126 crore or
55 percent of the total.

Put together, these banks also had a capital shortfall of Tk 12,683 crore at the end of
June 2017, again, despite the government's most recent injection of Tk 2,000 crore
using funds it had received from taxpayers on top of the Tk 116.6 billion handouts it
had given to state-owned banks at taxpayers' expense between fiscal year 2011-12
(July-June) and 2016-17 according to its own data. Besides this form of continual
wealth transfer from the general public to the corruption-ridden and seemingly
incompetent state-owned banks (and ultimately to the defaulters), what is worrying
economists and other experts further is the fact that this problem in the banking sector
has actually been getting worse in spite of having prolonged for this long.

As, for example, a study by the Bangladesh Institute of Bank Management revealed
that banks on average rescheduled bad loans of Tk 109.1 billion annually during 2010-
14; whereas on the last day of 2016, defaulted loans in the banking sector stood at Tk
62 thousand 632 crore after years of rescheduling, having risen by nearly Tk 11,000
crore in just one year which is a record for Bangladesh. Yet, in January-March 2017,
total bad loans in the banking sector rose by 18 percent from the previous quarter for
the umpteenth time, led by a 15.1 percent quarter to quarter increase in state-owned
banks.

Unsurprisingly, these high NPLs have wrecked profitability. According to The

Economist, operating profits of six state-owned banks dropped by 37 percent annually
in 2016 “to Tk 20.1bn, while net losses surged by 309 percent, to Tk 5.1bn.
Meanwhile, losses at the two state-owned specialised banks (Krishi Bank and Rajshahi
Krishi Unnayan Bank) rose by 150 percent, to Tk 4.2bn.” What is most astounding
about this is that net profits of the banking sector as a whole actually rose by 4.9
percent in 2016 while all this was going on in the state-owned banks, confirming
beyond a shadow of a doubt the especially woeful performance of state-owned banks
in comparison to private and foreign-owned banks.

The report also states, “The overall capital to risk weighted assets ratio (CRAR), a key
measure of bank strength and stability,” too has “been affected.” According to The
Economist's Intelligence Unit, “The CRAR at private banks was 12.2%, while that at
the nine foreign banks was a healthy 23.9%,” whereas “the CRAR of the six state-
owned commercial banks was only 5.9%” and “that of the two specialised state-owned
banks was an astonishing -35.23%.”
Taking all these figures into consideration, it is nearly impossible to understand the
logic behind the government's insistence on bailing banks out, especially when during
a March 2017 meeting the government's own finance division observed that, “despite
the regular infusion of budget funds, state-run banks have not improved their NPL
positions.” In fact, the BB itself did not actually “recommend any capital infusion for
these banks to the finance ministry” during the past two years, and banks were only
provided bailout money upon insistence by the finance ministry.

Because of this and other reasons, a former deputy governor of the Bangladesh Bank,
Khondker Ibrahim Khaled, said that the finance ministry cannot avoid responsibility
for the current conditions of our banking sector. And that the two main reasons for the
unusually high default loans in the state-run banks were enormous “corruption” and
“inefficiency.”

Moreover, according to Khaled, it was the government itself that sowed the seeds of
corruption into the sector by appointing “many corrupt people.” Two such examples
are Syed Abdul Hamid, the former managing director of Agrani Bank who was
appointed by the finance ministry despite objections from the BB, and Sheikh Abdul
Hye Bachchu, the former chairman of Basic Bank, who is alleged to be responsible for
bringing the once profitable bank to its knees after also being appointed by the
ministry.

The terrible consequences of the finance ministry's overreach can also be seen in the
case of licensing new banks. According to noted economist Dr Debapriya
Bhattacharya, the private banks that were given licences on political consideration a
few years back had failed to perform completely and allegations of money laundering
through some of these banks were brought forth a number of times. Furthermore, the
nine new banks, since obtaining licences, have failed to fulfil the four conditions that
they were given by the BB before going into operation and are now pushing the central
bank to relax those conditions.

Requesting anonymity, a BB official said that despite providing licences, the central
bank could not completely monitor these banks as they were owned by politically
influential people—despite some of these banks having been linked to loan scams,
aggressive lending and violations of banking regulations among other issues, posing
serious threats to the banking sector according to the central bank's own assessment.
According to Dr Bhattacharya, not only were no “preventive measures” taken, but the
government actually went on to increase “the control of the family members of bank
owners through amending the banking law and regulations.”
And following the implementation of the new law allowing four members of a family
to be directors of a bank with extended terms, a former chief economist at the
Bangladesh Bank, Biru Paksha Paul, wrote in The Daily Star that, “Some bank owners
took advantage of this new law and made sudden changes in the directorship positions,
triggering a state of panic among depositors and other stakeholders. Some top bankers
were courageous enough to voice their apprehensions to the central bank,” finding “the
erratic behaviour of bank directors to not only be a threat to financial stability but also
unfavourable for corporate governance” (“Taking banks further away from the public,”
January 14, 2017). However, Paul also went on to explain that, “While the central
bank understands their worries, it can do little if the ministry doesn't want to displease
the financial coterie.”

In a similar vein, Professor Rehman Sobhan too criticised the weakness of regulators
and how that has contributed to increasing the risks of a major financial disaster in
Bangladesh, saying that, “The [banking] system as it works in Bangladesh is now
getting deeply integrated with the political economy of society.” As a result, “The
economy has now gotten into a situation where the perpetuation of debt default has in
fact been ingrained in business practices,” which “is destroying the competitive nature
of [the] financial system.” Getting back to how this plays a major role in increasing
wealth inequality, Professor Sobhan also said that Bangladesh is suffering from a
“perverse and totally unethical situation where the biggest defaulters tend to be the
elite, and the most credible debt service agents are low-income households.”

But apart from increasing wealth inequality, the crisis in the banking sector is harming
the country's economy in other ways as well, according to a former governor of
Bangladesh Bank, Salahuddin Ahmed. To emerge from the pressure that they are
under because of rising NPLs, “banks are reducing interests on deposits” and the
“government is also considering new taxes,” said he.

Moreover, given that the banking system is supposed to play a major role in the
efficient allocation of resources in an economy, it is obvious that its continuing failures
are affecting our efficiency and productivity, as well as constraining businesses and
industries that truly do have the potential to grow and become a pillar of strength for
our long-term growth.

Yet, in spite of the heavy cost, the government's reluctance to hold those responsible
for the mess, which can only encourage further corruption and mismanagement at the
cost of the overall economy, can best be described as wholly absurd and incredibly
damaging. And its selective interventions on behest of special interests to bailout
failings banks go totally against the concept of free market which is another reason
why we see such massive misallocation of resources and the continual wealth transfers
from the general public to members of these special interest groups—making way for
the political, bureaucratic and financial classes to divvy up the loot from public coffers
among themselves.

As Transparency International Bangladesh has expressed, the “unprecedented anarchy

and risk” that is prevailing in the banking and financial sectors is on the one hand
down to “the misuse of power”, “political influence” and “lobbying”, leading to
“unrestrained forgery”, “corruption” and “dominance of loan defaults”; while on the
other, it is also down to the “ineffective ad hoc measures by a section of the regulatory
authorities.” Thus, the only possible way to bring about a reversal in this trend is to
depoliticise the sector, especially the regulators and to have greater accountability and
transparency (where there is now none) in order to prevent the misuse of power and
also the lobbying power of money, and to end the collusion between special interest
groups and the political class that has now clearly metastasised into a major threat for
our economy.

However, in order to have any of that, what is needed first and foremost, as has been
oft-repeated, is the political will. That political will, however, especially given that we
are yet to see any shred of it till now, is unlikely to simply materialise out of the blue.
And, thus, must be brought about by conscious citizens raising their sustained voices
to exert enough pressure on the authorities to change their disastrous ways, before
disaster befalls our economy, as it surely will, if things continue down their current
path, leading to an almost guaranteed reversal of all the economic progress that
Bangladesh has made till date.

Banks' deposit base expands slightly

Banks' aggressive drive for funds has finally pushed up the deposit growth, easing the cash crunch
that has crippled the banking sector in recent months.

Yet, the growth in loans, which was nearly 17 percent in June this year, is still significantly higher
than the deposit growth, creating a likelihood for asset-liability mismatch.

The average deposit growth in the industry stood at 11.29 percent in June, in contrast to 10.62
percent in December last year, according to data from the Bangladesh Bank.

At the end of June, deposits in the banking sector totalled Tk 10,59,669 crore.

Since June last year, the deposit growth ranged between 10 percent and 10.6 percent as banks were
reluctant to take deposits amid huge excess liquidity. But aggressive lending and loan scams by some
banks sparked a liquidity crisis in the sector at the turn of the year.
To counter the situation, banks started to offer interest rates upwards of 10 percent to depositors,
which, in turn, pushed up the interest rate on lending to past 13 percent.

On June 20, the Bangladesh Association of Banks, a platform of directors of the private banks,
announced to cut the interest rate on deposits to 6 percent and lending to 9 percent from July 1.

The move was to stop unhealthy competition to collect deposits and bring down the borrowing rate.

The deposit growth improved as banks are aggressively collecting deposits to bring down the loan-
deposit ratio in line with new authorised limit of 83.5 percent, said Syed Mahbubur Rahman,
chairman of the Association of Bankers Bangladesh (ABB), a forum of chief executives of the
private banks.

Though the ABB had set the deposit rate at 6 percent, some banks are offering more than 8 percent,
said Rahman, also the managing director of Dhaka Bank.

“Funds are now available in the banking system and there is no deposit crisis,” said MA Halim
Chowdhury, managing director of Pubali Bank.

Pubali Bank has brought down the interest rate on lending gradually, with most of the loans now
being given at 9 percent.

State banks mostly contributed to higher deposit growth in June as they still enjoy a certain level of
confidence among the general public.

The deposit growth of the state banks stood at 8.50 percent in June, up from 6.46 percent in
December last year.

Private banks' deposit growth was 12.73 percent in June, in contrast to 12.58 percent six months
earlier.

“The public still prefers state-run banks for parking their money and the interest rate is not a major
factor to them,” said Mohammad Shams-Ul Islam, managing director of Agrani Bank.

The state-owned banks are giving 6 percent interest rate for deposits in line with the ABB's decision,
he said.

On the other hand, the new banks are offering 8 to 9 percent interest rate against deposits.

For instance, the deposit rate of scam-hit Farmers Bank was 9.62 percent in July, the highest amongst
all banks. Despite offering the highest rate, the bank's deposit growth was negative 15 percent in
June.

The average deposit rate of NRB Global Bank was 9.41 percent as of July, the second highest. Its
deposit growth was 26.28 percent in the same month, according to central bank data.
Mobile Banking:
Bangladesh bagan it's mobile banking journey in 2011. The primary goal of mobile banking
commonly known as Mobile Financial Service ( MFS) is financial inclusion - reaching the unbanked
population with appropriate financial services. MFS, constitutes offering financial services that
includes funds transfer, saving products, insurance products, paying fees of various forms ( utility,
education etc.) and receiving payments. Bangladesh bank has approved 28 banks to provide MFS in
the country. Almost 20 of them officially launched MFS.

Some common service name and service provider:

1. DBBL mobile banking/ Rocket
Provider: Dutch Bangla Bank Ltd.
2. bKash
Provider: Brac Bank Ltd.
3. Ucash
Provider: United Commercial Bank Ltd. etc..

Mobile banking is increasingly getting popular in Bangladesh, generating Tk 994 crore in daily
transactionss on an average. Total number of mobile banking customers stands at 6.4 crore. Of them,
3.6 crore are doing transaction actively.

Bangladesh received commitsments amounting to $ 14.61 billion in foreign assistance from different
countries and donar agencies in 2017-2018. Of the sum, $ 14.23 billion was loan and $ 380.73
million grants. The amount of disbursed foreign assistance was $ 6.29 billion last fiscal year.

ওয়েলথ এক্স এর জরিপ মতে পৃথিবীতে ধনকু ব বৃদ্ধির হারে বাংলাদেশ প্রথম, গেল পাঁচ বছরে দেশে ধনকু বের হার বৃদ্ধি
হার ১৭.৩%।

তালিকায়,
১ম-বাংলাদেশ (১৭.৩%)
২য়- চীন . ওয়েলথ এক্সের ধনকু ব লিস্টে অন্তর্ভু ক্ত ব্যক্তিদের ন্যূনতম সম্পদের পরিমান ২৫২ কোটি টাকা।

Default loans plague banking sector

Bangladesh’s banking sector is witnessing the accumulation of bad loans at an alarming rate, as
borrowers show a growing tendency to default on loans. Experts have blamed the situation on the
lack of good governance in the banking sector. Figures provided by the central bank revealed that the
amount of default loans stood at Tk22,644 crore at the end of 2011. Six years later, the amount has
swelled to Tk74,303 crore. Fazle Kabir, governor of the central bank, dubbed default loans as a grave
problem. Currently, the state-owned Sonali Bank has the highest amount of default loans, followed
by BASIC, and Janata Bank. Among the private banks, Islami Bank tops the list of banks with the
highest default loans, according to the central bank. There have been no defaulted loans at Shimanto
Bank Ltd, which is fully owned by the Border Guard Bangladesh Welfare Trust. Sonali Bank had
accumulated Tk13,771 crores in default loans as of December last year, a Bangladesh Bank report
said. The amount of default loans was Tk7,599 crore for BASIC Bank, Tk5,819 crore for Janata
Bank, Tk5,116 crore for Agrani Bank and Tk4,251 crore for Rupali Bank. Bangladesh Development
Bank has a total of Tk771 crore in default loans, while the state-owned Bangladesh Krishi Bank has
Tk4,263 crore and Rajshahi Unnayan Bank has Tk1,162 crore. Among the private banks, Islami
Bank has total default loans of Tk2,529 crore. Pubali Bank has the second highest at Tk1,898 crore,
while United Commercial Bank has Tk1,807 crores, National Bank has Tk1,611 crores and Exim
Bank has Tk1,340 crore in default loans. Former central bank governor Salehuddin Ahmed said he
believed that a lack of good governance was responsible for the situation. He blamed the weakness of
the regulator for the rising number of default loans. “The increase in default loans is not only a matter
of concern for the banking sector but also for the economy,” he said. Former Bangladesh Bank
deputy governor Khondkar Ibrahim Khaled said there were widespread irregularities in disbursing
loans by both the state-owned and private banks in the last six years. “The loans given out through
irregularities have turned into default loans,” he said. The central bank report showed that private AB
Bank had default loans of Tk967 crore, Al-Arafah Islami Bank Tk992 crore, Bangladesh Commerce
Bank Tk434 crore, Bank Asia Tk723 crore, BRAC Bank Tk721 crore, Dhaka Bank Tk761 crore,
Dutch-Bangla Bank Tk962 crore, and Eastern Bank Tk325 crore. Apart from them, First Security
Islami Bank had Tk839 crore, ICB Islami Bank Tk707 crore, IFIC Bank Tk1,048 crore, Jamuna Bank
Tk525 crore, Meghna Bank Tk93 crore, Mercantile Bank Tk693 crore, Midland Bank Tk43 crore,
Madhumati Bank Tk8 crore in default loans. The amount is Tk495 crore for Mutual Trust Bank,
Tk662 crore for NCC Bank, Tk55 crore for NRB Bank, Tk77 crore for NRB Commercial Bank and
Tk61 crore for NRB Global Bank. According to the central bank, One Bank has total default loans of
Tk829 crore, Premiere Bank Tk561 crore, Prime Bank Tk926 crore and Shahjalal Islami Bank has
default loan of Tk630 crore. Default loans of SIBL stands at Tk909 crore. South Bangla Agriculture
Bank has accumulated default loans of Tk30 crore, Southeast Bank Tk1,131 crore, Standard Bank
Tk935 crore, City Bank Tk1,001 crore, Farmers Bank Tk723 crore, Trust Bank Tk578 crore, Union
Bank Tk57 crore and Uttara Bank Tk695 crore. Bangladesh Bank data show that among foreign
banks, Al-Falah Bank has total default loan of Tk25 crore, Citibank NA Tk22 crore, Commercial
Bank of Ceylon Tk32 crore, Habib Bank Tk42 crore, HSBC Bank Tk157 crore, National Bank of
Pakistan Tk1,377 crore, Standard Chartered Bank Tk474 crore, State Bank of India Tk15 crore and
Woori Bank Tk7 crore. Until December, 2017, six state-owned banks have disbursed loans of
Tk1,40,769.93 crore. Of the amount, Tk37,326 have turned into default loans which is 26.52% of the
loans disbursed by these banks. During the same period, private banks have given out loans of
Tk6,03,603.24 crore. Tk29,396.19 of the amount have turned into default loan. It is 4.87% of these
banks’ disbursed amount. Two state-owned specialized banks have so far given out loans of
Tk23,199.69 crore. Of them, Tk5,426.30 crore or 23.39% of these banks’ disbursed loans have
become default loans.

What is the present socio-economic condition of Bangladesh?

There is a lively ongoing debate about the likely economic and social impact of the FY2019 budget. 
Much attention has been given to how a few extensions in the coverage of the VAT will hurt the
middle-income group and how a small reduction in the corporate tax rate for the banking sector will
benefit the fat cats sitting at the top of the income stream. Yet, surprisingly, there is no debate about
the annual loss of $14 billion of income for consumers owing to continued trade protection well
preserved in the proposed budget. Importantly, we need to look into the big picture to assess the
likely economic and social impact of the budget.

A typical national budget affects economic and social outcomes through two possible channels. 
First, through the underlying policy framework and second, through the taxation and spending
programmes of the budget. In some ways, the policy framework could be much more relevant than
taxation and spending.

Effect on GDP and investment: On the economic front, the most important question is the effect on
GDP growth and investment. The FY2019 budget policy framework, taxation and spending all fall
short of the targets set in the Seventh Five Year Plan (7FYP). Combined with the shortfalls of the
past three budgets, it is most unlikely that the GDP targets of the 7FYP would be realised. The results
so far show that the private investment rate, FDI inflows, and export growth all fall short of the 7FYP
targets. 

The public investment rate is a mystery. Owing to revenue and implementation constraints, the public
investment funded through the national budget has been around 5 percent of GDP during FY2016-
FY2018. On the other hand, the Bangladesh Bureau of Statistics (BBS) figures show this as 8.2
percent of GDP for FY2018. Who is investing and financing this huge gap between the budget
estimates of public investment and the BBS estimate? 

The state-owned enterprises (SOEs) and local governments by and large depend upon national budget
transfers to survive. Total outstanding debt of the SOEs was $24.5 billion in FY2017. In this reality,
it is nearly absurd to imagine that SOEs and local governments are investing 3 percent of GDP from
own resources!

The shortfalls on the policy front are similarly large. No trade reform has happened. Banking sector
difficulties have cumulated. Private sector investment climate is constrained by high transaction
costs. According to the World Bank's Cost of Doing Business Indicators, Bangladesh is at the bottom
end of the countries ranked and this ranking has not improved in the past three years. Unless the BBS
is able to provide a credible explanation of what is driving GDP growth that makes it possible to stay
on track as per the 7FYP even as investment and policies are off-track, the most logical conclusion is
that the actual GDP growth will miss the 7FYP target.

Macroeconomic stability: The track record on macroeconomic stability is much better so far and the
FY2019 budget seeks to preserve this by keeping a lid on fiscal deficit. The budget also seeks to rely
more on foreign financing based on the better use of the aid pipeline. These are positive features. By
proposing to keep the bank borrowings within prudential limit and consistent with the monetary
policy targets, the budget will likely help keep inflation under control at around 5.5 percent rate if
this policy is implemented. This will also support private investment by avoiding a crowding-out
effect on private credit.
One concern though is the growing deficit in the current account of the balance of payments. If this
deficit is helping finance investment, the gap is not an issue. However, there are concerns that a
significant part is capital flight through over-invoicing of imports. Another concern is that export
growth is slow. It can't forever remain much behind import growth. So, boosting export growth
through diversification is an imperative. This brings us back to the policy framework of the FY2019
budget, which does not address the export diversification issue.

Technology transfer: Sustained GDP growth also depends upon technology transfer. Two most
important policies for this are foreign direct investment (FDI) and investment in research and
development (R&D). Bangladesh is lagging in both areas.

FDI inflows in Bangladesh in 2017 were a mere $2 billion compared with $229 billion for China
(including Hong Kong), $58 billion for Singapore, $45 billion for India, and $18 billion for Vietnam.
In addition to the deficit in infrastructure, the cost of doing business remains incredibly high in
Bangladesh. The proposed budget along with earlier budgets puts emphasis on infrastructure
spending but the financing gap is large and implementation is very slow.

The budget does not offer anything concrete in terms of reforms to ease the pain of the high cost of
doing business. Even the One-Stop-Shop for investors promised in 2016 remains to be implemented. 

When it comes to R&D, available estimates show that Bangladesh invests a mere 0.15 percent of
GDP compared with 1.5-2.0 percent of GDP in China. While much of the R&D spending will come
from the private sector, the budget needs to spearhead this with research grants and tax breaks. There
is no systematic R&D policy in FY2019 budget or any previous budget. This is a huge gap in policy-
making that must be corrected quickly to take Bangladesh to the upper middle-income status.

Job creation: On the social front, the most important challenge is job creation. The 2016 Labour
Force Survey shows disappointing results for new job creation in the organised manufacturing and
organised services. While the labour markets seems to have tightened in rural areas, reflected in
rising farm real wages and growing mechanisation, the out-migration to urban areas has seen a huge
growth in informal sector activities, especially services.

In the organised sector, there is a mismatch between demand and supply owing to low education and
skills of available workers. In this digital age, production technology is changing rapidly globally and
in Bangladesh. The types of skills needed for employment in organised manufacturing and services
are in short supply in Bangladesh.

The agenda for converting the largely uneducated and untrained existing labour force into educated
and high-skill labour force for the 21st century is huge. The government has given priority to this in
all budgets, including the proposed one. But the scale of effort needed and resources required far
outstrips the government's present fiscal and administrative space.

For example, the resources needed for human capital formation are estimated at about 2 percent of
GDP for health and 4 percent of GDP for education and skills. Compared to this, Bangladesh invests
about 0.7 percent of GDP in health and 1.9 percent of GDP in education and training. This level of
allocation prevails in the FY2019 budget. The limited fiscal space owing to very low tax-to-GDP
ratio (9.5 percent) is a huge constraint. Implementation capacity constraints are additional challenges.

Poverty reduction: The impact of the FY2019 budget on poverty reduction will remain positive
largely because of the growing economy. Although it is unclear whether the real economy is growing
at more than 7 percent, it is buoyant. Even a 6 percent plus growth rate is a solid performance and
will have a major positive impact on poverty reduction.

Income inequality: Another major social issue is the incidence of growing income inequality.
Global experience shows that the two most important instruments for reducing income inequality in a
market economy are income transfers to the poor and vulnerable through a well-defined and well-
funded social security system, and the institution of a progressive income taxation. On both counts
Bangladesh is seriously lagging.

As compared with spending levels of 12-19 percent of GDP on social protection in Western Europe,
Canada and Japan who all have relatively low level of income inequality, Bangladesh spends 1.2
percent of GDP (excluding civil service pensions). There are also serious efficiency issues. The
government sought to address these inefficiencies by adopting a comprehensive National Social
Security Strategy (NSSS) in 2015. But so far, this has not been implemented. There is no indication
in the budget that the NSSS will be implemented, which is a huge disappointment.

Progressive income taxation is mostly missing in Bangladesh. Total personal income taxes are a mere
1.4 percent of GDP whereas 35 percent of national income is owned by the top 10 percent of the
population.

Sustainable development: Finally, environmental degradation and climate change continues to take
its toll on Bangladesh. The adverse consequences of natural disasters on the poor and vulnerable are
particularly telling. The budget does not include any new reform to address the many outstanding
issues. The Delta Plan formulated in 2017 is still not approved by the government. Pricing policies
continue to favour fossil fuel consumption and discourage adoption of clean technology. Very little
use of environmental fiscal policies is made to discourage carbon emission, reduce water pollution
and improve drainage and solid waste management. The adoption of a carbon tax as done by India
and China will be a win-win that will not only reduce air pollution but also generate substantial fiscal
resources.

Thanks to efforts by the nongovernmental organizations Grameen Bank and BRAC, along with more
recent work by the government, Bangladesh has made significant strides toward educating girls and
giving women a greater voice, both in the household and the public sphere. These efforts have
translated into improvements in children’s health and education, such that Bangladeshis’ average life
expectancy is now 72 years, compared to 68 years for Indians and 66 years for Pakistanis.

The Bangladesh government also deserves credit for supporting grassroots initiatives in economic
inclusion, the positive effects of which are visible in recently released data from the World Bank.
Among Bangladeshi adults with bank accounts, 34.1% made digital transactions in 2017, compared
to an average rate of 27.8% for South Asia. Moreover, only 10.4% of Bangladeshi bank accounts are
“dormant” (meaning there were no deposits or withdrawals in the previous year), compared to 48%
of Indian bank accounts.

Another partial explanation for Bangladesh’s progress is the success of its garment manufacturing
industry. That success is itself driven by a number of factors. One notable point is that the main
garment firms in Bangladesh are large – especially compared to those in India, owing largely to
different labor laws.

All labor markets need regulation. But, in India, the 1947 Industrial Disputes Act imposes heavy
restrictions on firms’ ability to contract workers and expand their labor force, ultimately doing more
harm than good. The law was enacted a few months before the August 1947 independence of India
and Pakistan from British imperial rule, meaning that both new countries inherited it. But Pakistan’s
military regime, impatient with trade unions from the region that would become Bangladesh,
repealed it in 1958.

Thus, having been born without the law, Bangladesh offered a better environment for manufacturing
firms to achieve economies of scale and create a large number of jobs. And though Bangladesh still
needs much stronger regulation to protect workers from occupational hazards, the absence of a law
that explicitly curtails labor-market flexibility has been a boon for job creation and manufacturing
success.

The question is whether Bangladesh’s strong economic performance can be sustained. As matters
stand, the country’s prospects are excellent, but there are risks that policymakers will need to take
into account.

For starters, when a country’s economy takes off, corruption, cronyism, and inequality tend to
increase, and can even stall the growth process if left unchecked. Bangladesh is no exception.

But there is an even deeper threat posed by orthodox groups and religious fundamentalists who
oppose Bangladesh’s early investments in progressive social reforms. A reversal of those investments
would cause a severe and prolonged economic setback. This is not merely a passing concern: vibrant
economies have been derailed by zealotry many times throughout history.

For example, a thousand years ago, the Arab caliphates ruled over regions of great economic
dynamism, and cities like Damascus and Baghdad were global hubs of culture, research, and
innovation. That golden era ended when religious fundamentalism took root and began to spread.
Since then, a nostalgic pride in the past has substituted for bold new pursuits in the present.

Pakistan’s history tells a similar tale. In its early years, Pakistan’s economy performed moderately
well, with per capita income well above India’s. And it was no coincidence that during this time,
cities like Lahore were multicultural centers of art and literature. But then came military rule,
restrictions on individual freedom, and Islamic fundamentalist groups erecting walls against
openness. By 2005, India surpassed Pakistan in terms of per capita income, and it has since gained a
substantial lead.
But this is not about any particular religion. India is a vibrant, secular democracy that was growing at
a remarkable annual rate of over 8% until a few years ago. Today, Hindu fundamentalist groups that
discriminate against minorities and women, and that are working to thwart scientific research and
higher education, are threatening its gains. Likewise, Portugal’s heyday of global power in the
fifteenth and sixteenth centuries passed quickly when Christian fanaticism became the empire’s
driving political force.

As these examples demonstrate, Bangladesh needs to be vigilant about the risks posed by
fundamentalism. Given Prime Minister Sheikh Hasina’s deep commitment to addressing these risks,
there is reason to hope for success. In that case, Bangladesh will be on a path that would have been
unimaginable just two decades ago: toward becoming an Asian success story.

Delta Plan 2100: Draft made for spending $37b

by 2031
The government would spend $37 billion by 2031 for ensuring food and water security and fighting
disasters, according to a draft of the Delta Plan 2100.

The draft would be placed for approval at tomorrow's National Economic Council meeting chaired by
Prime Minister Sheikh Hasina.

At least 80 projects have been selected for implementation. 

Of them, 65 would be infrastructure projects and 15 others would aim at enhancing institutional
capacity, efficiency and research.

A planning ministry official said they selected these projects from 133 priority projects of various
ministries and divisions.

The General Economics Division (GED) of the ministry has prepared the draft with the assistance of
the Dutch government and the World Bank.

GED member Shamsul Alam said, “We are going to take up the long-term plan to tackle the adverse
impact of climate change.”

He said they had 26 studies done by local experts and prepared the plan in consultation with different
stakeholders. It took them three and a half years. 

Alam added that they had sent the list of the projects to the WB and its experts reviewed and
endorsed them.

He also said Bangladesh had been experiencing the adverse impact of climate change. Every year,
50,000 families become landless due to the adverse impact, he added.
According to a planning ministry document, the required fund for the 80 projects would come from
the government, Green Climate Fund, development partners, foreign direct investment and the
private sector.

At present, the government spends 0.8 percent of the GDP for Delta management projects and
programmes. To implement the plan, two percent of the GDP would be required. Bangladesh is likely
to get $2 billion assistance from Green Climate Fund every year.

Besides, about 0.5 percent from the private sector's annual income could be added to the Delta Plan
fund.

Coastal, Varendra (Barind) and drought-prone, haor and flood-prone, Chittagong Hill Tracts, riverine
and urban are the six areas to be given priority by the Delta Plan.

Due to climate change, the country's agricultural production may be seriously affected. The
production of paddy and wheat may decrease by 17 percent and 61 percent.

About 70 percent areas in 16 districts, where poverty rate is very high, are most vulnerable to natural
disasters, the planning ministry document mentioned.

To execute the Delta Plan 2100, a high-level Delta Governance Council led by the prime minister
would be formed. The planning minister would be its vice-president.

The council would make decisions and give directives for implementing the plan.

Besides, a project selection committee, led by a GED member, would be constituted. The secretaries
of the ministries related to the Delta Plan would be committee members, who would select projects
and programmes. The committee would also monitor implementation of the projects and
programmes.

***২০১৮-২০১৯ অর্থবছরের বাজেট:

 ৪৮ তম বাজেট (একটি অন্তবর্তীকালীন বাজেটসহ)

 Budget deficit in the fiscal 2018-19 at Tk 1, 25,293 .Budget deficit for the
soared to 5 percent of GDP. Less revenue income and higher expenditure has
increased the deficit, according to the budget proposal for 2018-19. Of the
deficit, Tk 54,067 crore will come from external sources while domestic sources
will provide Tk 71,226 crore. Of the domestic source Tk 42,029 crore will be
borrowed from the banking system while Tk 29,197 crore from National
Savings Schemes and other non-bank sources.
 Finance Minister AMA Muhith presented the budget for the fiscal year 2018-19.
 বাজেট ঘোষণা/উপস্থাপন করা হয়: ০৭ জুন, ২০১৮।
 বাজেট পাশ : ২৮ জুন, ২০১৮।
 বাজেটের আকার : ৪ লাখ ৬৪ হাজার ৫৭৩ কোটি টাকা।
 বার্ষিক উন্নয়ন কর্মসূচিতে (ADP) বরাদ্ধ : ১লাখ ৭৩ হাজার কোটি টাকা।
  সবচেয়ে বেশি বাজেট বরাদ্দ জনপ্রশাসন : ৮৩, ৫০৯ কোটি
 দ্বিতীয় সবচেয়ে বেশি বাজেট বরাদ্দ শিক্ষা ও প্রযুক্তি খাতে = ৬৭,৯৪৪ কোটি
 করমুক্ত আয়সীমা: সাধারণ সীমা (ব্যক্তি শ্রেণি) : ২ লক্ষ ৫০ হাজার টাকা।

**Bangladesh Bank initiatives:

1) MRA _ found
2) SmE _ start
3) Agriculture credit
4) Technical upgrade to support to this endeavor
5) National payment system
6) Rural Time Gross
7) Mobile financial services
[Link] Banking
9.10 TK account opening _ Farmers
10. School banking
11. Green Banking
12. Digital Financial services
13) Branch opening rules 5:1 to 1:1.
14) Relaxing condition of loan repayment.
15) . Developing ICT solutions like mobile banking, smart card etc.
16) Mandatory participation in agriculture or
rural credit.

## Some inclusive financial products:

1. Ten- bank account. The account holders are mainly farmers, garments workers, city corporation
cleaning workers, freedom fighters and social safety net beneficiaries.
2. Mobile banking
3. School banking
4. SME loans for women entrepreneurs.

**Mobile financial services info :

1. Number of mobile financial services #18
2. Total client #6.13 crore
3. Number of active account #2.29 core
4. Total transaction #32823 crore
5. Average daily transaction #1051 crore

Banking industry and promotion of RMG trade

In Bangladesh, banks have noteworthy role and involvement in trade facilitation in the readymade
garment (RMG) from its inception. With the help of back-to-back letter of credits (LCs), both the
garment and the primary textile sectors or backward linkage industries flourished in Bangladesh.
Banking industry of the country has been facilitating payment, finance and risk management services
to the traders including RMG and thus contributing to growing global trade integration of the
country. With the growing business complexities, technological changes, market expectations and
financial crimes, trade services are becoming increasingly challenging for the banks. However, banks
must continue to offer efficient services to the key trading sector of the country, RMG.  For the
economic sustainability of Bangladesh, RMG sector needs due support through adequate, smooth and
effective trade services by banks which, on their part, must ensure proper risks identification,
management and compliance issues in the process of offering the required trade services.

China has been the market leader in the global RMG market. Bangladesh's share of the global
clothing market is improving and it is now the second largest exporter of apparel products, despite
sluggish export growth in recent times. A recent McKinsey report   has identified Bangladesh as the
top sourcing hotspot over the next five years. However, there are evidences and indications that
competition is becoming increasingly intense; a few Asian and African countries (like Ethiopia) are
coming up very strongly.

RMG is the most important trade item in Bangladesh. The success story of the RMG began with the
introduction of the back to back LC practices in the late 1970s. In some literature it is claimed that
the Desh Garments Ltd came up with the first big push in this connection. At the end of 1990, this
sector captured 50 per cent share of the country's total export. Now it claims the lion share of total
export volume.

The economy of Bangladesh is largely dependent on the RMG sector, and this sector is considered as
the lifeline of the country`s economy. It also plays an indispensable role in maintaining social
stability. Nearly two million women workers are directly and more than ten million people are
indirectly associated with this industry. Today, the RMG export sector consists of multibillion dollar
manufacturing and export industries in the country. The overall impact of the readymade garment
export is certainly one of the most significant social and economic developments in contemporary
Bangladesh. Manufacturing in Bangladesh has for the last 30 years been defined by the RMG
industry and for good reason. The nearly 7,000 RMG facilities in Bangladesh produce close to one-
fifth of all manufactured goods and employ over half of all workers in the manufacturing sector.

This sector creates about 4.0 million employment opportunities and contributes significantly to the
gross domestic product (GDP). The sector is powered by young workers and most of them are
women. Country's total export earning has increased over  time with continued high share of RMG.
The sector earned about US$ 30,000 million in 2017. Of the total earnings, woven garments and
knitwear constituted around 52 and 48 per cent respectively. Data on product-wise export earnings
showed contribution of over 40 per cent each in terms of the total volume of export earnings of the
country. Currently about 4.0 million people are working in about 4500 garment factories.

RMG exports accounted for over four-fifth of the country's total exports after 2014. According to
Bangladesh Bank data (2018), import price of raw materials stood at $3,716 million during the first
half of FY18 through back-to-back LC, which is around 25 per cent of the country's total RMG
export value. Thus, the gross value addition from this sector stood around 75 per cent. The yearly
data on RMG export and back-to-back raw materials import shows that the average value addition
from FY10 to FY17 and the first half of FY18 through export of RMG is almost 75 per cent. The
major importing countries of Bangladesh's RMG products are the US, UK, Germany, France, Spain,
Italy, Belgium, Netherlands and Canada. For maintaining the growing trend of RMG sector and
addressing future risks, the country needs to focus on factors such as changes in trade relations, costs
and access to shipping and logistical routes, raw material costs, compliance issues, consumer tastes
and attitudes etc.

Of the total number of trade payment transactions, survey data of Bangladesh Institute of Bank
Management (BIBM) clearly indicate the extensive use and growing dominance of documentary
credit in import transactions here. Similar trends can be seen in case of RMG sector as well. In case
of exportation of RMG, again LC is the most prominent method of payment. However, compared to
the overall export figure, use of LC is slightly lower in RMG. As a whole, LC remained the most
widely used method of payment to receive payment by the Bangladeshi exporters. Of the different
types of LC, a significant number is back-to-back, which is mainly related to RMG trade
transactions. More specifically, this is because of the garments sector that imports/procures raw
materials from home and abroad to meet their export orders.

Out of the total export LC used in Bangladesh's RMG sector, a significant number is local back-to-
back LC. And of the total, a certain proportion is transferable LC. In recent time, decrease in
transferable LC indicates the growing trend of receiving direct LC by ultimate exporters. Existence of
a large number of buying houses is one of the reasons for the use of transferable LC. Buying houses
(of the garment products) are not the actual manufacturers and therefore, they are required to transfer
the LCs to the real manufacturers for procuring the goods. Moreover, the practice of subcontracting
by the garment manufacturers is also very common for which an LC is transferred.

Of the different types of LC, back-to-back ones are understandably the most commonly used.
However, it is the local back-to-back LC that is dominating. In case of export LC, the documentary
requirements are almost the same. It can be observed from the survey data that insurance documents
are less frequently asked in the LCs sent to the exporters here (not very different from the LC opened
by banks located in Bangladesh for foreign exporters). Ocean bill of lading or multimodal has been
the most commonly used type of transport document. In exportation of RMG, other than these, a pre-
shipment inspection by the buying houses or by a buyer selected party is a very common
requirement. Late shipment and late presentation have been the most common discrepancies in both
export and import documents  in CY 2017 in the RMG sector.

According to the survey observation, late shipment and late presentation in exportation are the most
common discrepancies; these are relatively less in case of importation. Sometimes, these
discrepancies of late shipment and late presentation are evidenced due to non-availability of pre-
shipment inspection certificate. In RMG, it is difficult to accurately estimate lead time in exportation,
and this sometimes causes payment       discount Pre-shipment inspection requirement is also misused
in certain instances against the RMG exporters. According to the opinions of the practitioners, the
proportion of compliant LC has marked increase. Banks are, however, coming across increasing
number of spurious discrepancies. (Next installment on Saturday).

Agent banking in BD
Agent banking offers limited banking and financial services to the underserved population by
engaging representatives under a valid agency agreement. It is the owner of an outlet who conducts
banking transations on behalf of the bank.
Bangladesh bank is issuing this guidelines as per authority conferred to it by Article 7A(e) of
Bangladesh bank order, 1972, section 45 of Bank company act, 1991 and section 4 of Bangladesh
Payment and Settlement Systems Regulations, 2009..

Services of agent banking:

1. Collection of small value cash deposits and cash withdrawals.
2. Inward foreign remittance disbursement
3. Facilitating utility bill payment
4. Balance inquiry
[Link] of clearing check etc.

Although central bank issued an agent banking guideline in 2013, the first bank Bank Asia started
agent banking operations in 17 january, 2014. A servey showed 5,44,536 accounts opened with
deposits 380.68 crore between oct- dec in 2016. By March, 2018, agent banking account stood
14,68,797 with deposits 1634.36 crore. And recent bangladesh bank data says agent banking account
stood 17,77,400 with 5,351 outlets. Deposits Tk. 2,012 crore and loan Tk. 137 crore by August, 2018.

According to research paper titled " Alternative delivery channel : Opportunities and challanges of
new banking environment" by BIBM, agent banking has become popular because of it's benefits for
both the banks and clients, while the country's economy is also being benefited through financial
inclusion. Another research paper by BIBM titled " Agent banking: Effectiveness in Financial
Inclusion" says product lending is still absent in the agent banking outlets.

The BIBM research paper identifies seven challenges for banks:

1. selection and monitoring of agents
2. cheque book issue and clearing cheque
3. limited trasaction time
4. power failure
5. management risk
6. cyber security
7. settlement of complaints

Central bank data says agent banking is concentrated in two banks with DBBL and Bank Asia with
8,84,680 and 3,80,936 accounts respectively covering more than 86% of agent banking accounts by
March 31, 2018. Currently total number of accounts also increased to 17,77,400 with a vast number
of recipients amouniting 2 crore 33 lac in DBBL by August, 2018.

Govt plans to implement 7 mega projects by

2030
Seven mega development projects by the government are well underway and are expected to have
significant positive impact for the country.
All of the seven top priority Fast Track Projects costing around $40 billion have now gained pace,
although some of them are a few years behind the schedule.

The projects are the Padma Bridge, Rooppur Nuclear Power project, Paira Sea Port, the coal fired
large power projects of Matarbari and Rampal, Metro Rail and LNG terminal.

Recently, another project -- Padma Bridge Rail Link project -- was included in the fast-track project.
But it has not seen much progress as the Ecnec approve the Tk 34,988-crore scheme only early this
month. 

A ninth such project -- the Sonadia Deep Sea port -- remains shelved for now.

The Rooppur project alone claims $12.65 billion. The Paira port project, which would take seven
years to complete in three phases, also may need over $15 b -- depending on the final plan. The
feasibility report of the Paira port project was just submitted last month.

Construction of the LNG terminal started in 2010 but due to management issues, the project limped
along for long although the authorities were holding unsolicited negotiations under the Special Act
for 'Quick' Supply of Power and Energy, 2010. Finally the government signed contract with a US
based company on March 31 last.

Besides, the government's initiative to build a deep sea port also suffered a delay of around five
years. Back in 2009, following a Japanese study, the government had planned to build the country's
first deep sea port in Sonadia off Maheshkhali. But now, the government has switched to a new
location in Paira, off Patuakhali.

In the latest meeting of the Fast Track Project Monitoring Committee headed by the prime minister
on April 27, officials discussed inclusion of another project as fast track: the Railway from Dohazari
via Cox's Bazar to Gundum of Myanmar.

PADMA BRIDGE: PROGRESS SATISFACTORY

Originally planned to be completed by December 2013, the much-troubled Padma Bridge Project is
now making good progress and it is expected to be completed by 2018.

According to official reports presented to the Prime Minister on April 27, the project marked 65
percent progress in constructing approach roads at Jajira, 73 percent at Mawa, main bridge and river
training, 21 percent. Thirty-four percent progress has been made in bridge financing.

The project that saw several cost escalations is now being implemented at a hefty cost of $3.7 b. This
cost jumped from $2.9 b at 2010—when the World Bank had agreed to fund it. After the WB
withdrew its promise, the government began implementing the project from 2014 using its own
resources.
 Metrorail:

METRO RAIL: PROJECT DEADLINE CUT BY ONE YEAR

The Metro Rail project was delayed by five years and was set to be completed in 2020. But now this
20-km vital rapid transit project may finish before the deadline. Work on the first part of the project
from Uttara North to Agargaon will begin from early 2017 aiming to be completed by December
2019. Works between Agargaon to Motijheel would also start in 2017—but it would be completed in
December 2020.

The $2.7b metro rail project got a shot in the arm upon receiving Japanese funding in February 2014.

On March 27 last, the government signed a contract with Japanese Tokyu Construction Company to
develop the Metro Rail depot.

The project is currently facing some hurdle as certain roads were found not wide enough. Besides, an
old temple stands on the way. The authorities are seeking a Tk 50 crore allocation to widen a road in
the cantonment area and relocate Chakuli Temple from the Mirpur cantonment.

Once completed, the project would carry 60,000 passengers per hour and bring great relief to the
city's notorious traffic congestion and delays.

This 20-km Metro Rail route, named Mass Rapid Transit (MRT) Line-6, will be constructed from
Uttara to Bangladesh Bank and will have 16 stops.
ROOPPUR NUCLEAR POWER: PROGRESS SATISFACTORY

The 2400 megawatt Rooppur nuclear power project has made significant progress as it has initialled a
$12.65 b financing agreement with Russia last December.

All preparatory construction works will be finished within this year, while certain field level works
have been fully completed, a well-placed source said.

“We expect the financial agreement to be finalized by May, because we want to make advance
payment from the next budget for equipment that takes around three years to construct,” he said.

Bangladesh will hold a discussion with Russia over the state credit agreement on May 16.

Russian state company Rosatom began working at Rooppur in mid 2013 and is currently undertaking
a techno-feasibility study under a half-a billion dollar loan.

Rosatom's sister concern Atomenergoproekt—which is undertaking the study has recently floated a
tender for engineering survey, environmental monitoring and development of project documents for
the Rooppur NPP site.

The government expects the construction of the nuclear reactor to start early 2017 and complete by
2020. The plant's trial operation target is in the following year but officials say the plant will begin
operation from 2022.
LNG TERMINAL: SIX YEARS LATE, BUT DEAL SIGNED RECENTLY

After six years of floating the tender for the Liquefied Natural Gas terminal, Petrobangla on March
31 signed a contract with US based company Excelerate Bangladesh to build the floating terminal
within two years investing $500 million.

Part of this project is building a 90 km gas pipeline from Maheshkhali to Chittagong to connect to the
national grid.

The government will spend $1.5 b a year to import 500 million cubic feet of LNG per day from Qatar
from 2017.

The LNG would be very costly, but it would not only diversify the country's primary energy sources
—but also ensure that the gas-based industries and installations do not face a sudden death in the near
future. It is expected that after mixing LNG with the national gas, the average price of national gas
will have to be more than doubled to make it cost effective.

Excelerate Energy will realise $159,000 per day as rent of the floating terminal and $45,000 per day
as operational charge. As a result, the price of each thousand cubic feet of natural gas from imported
LNG would be at least $3.2.
RAMPAL POWER PROJECT: 2 YEARS LATE, BUT DEAL SIGNED RECENTLY

After initiating the project in 2010, the Rampal 1320 mw project suffered a delay of two years.

While there is widespread protest about the location of the power plant, the India-Bangladesh joint
venture company in March has awarded Indian company Bhel the Engineering, Procurement and
Construction (EPC) contract for the $1.5 billion dollar project. It is expected to come into operation
in 30 months.

DEEP SEA PORTS: FEASIBILITY COMPLETED

The government has shelved Sonadia deep sea port and has concentrated on developing the Paira
Deep sea port off Patuakhali with the aim to begin operation in a limited scale this year.

Meanwhile, a British company HR Wallingford has completed the feasibility study for Paira deep sea
port. This would guide the government in finalizing the implementation plan.

Construction works for the deep sea port will be implemented through 19 different tenders.

Meanwhile, the government is reviewing merits of proposals from China, UK, Belgium, Netherlands,
Denmark and India. They are interested to invest more than $15 billion.

The government has set short-term, mid-term and long-term goals for the port. In short-term, this
year the government would facilitate outer anchoring of clinkering, fertilizer and other bulk ships.

In mid-term, the government would complete building a multipurpose and bulk terminal
infrastructure by 2018 at a depth of 10 meter channel through dredging.

By 2023, a full deep sea port facility of 16 meter channel will be operational.

The Sonadia deep sea port remains as the eighth fast track project that could not proceed due to “lack
of investors' interest”. A 10-member committee has been given the responsibility to look into
proposals from different governments and make a decision.
MATARBARI 1,200MW COAL POWER PROJECT: PROGRESS

This project has full funding and its consultants are working from 2014.

The government's Coal Power Generation Company has acquired 1500 acres of land for the project.
Ninety percent of boundary fencing of the project site has been completed and the appointment of the
project's consultant is being finalised.

The project is actually taking a very long time to shape up because huge works were needed to
develop the project site in Matarbari close to Maheshkhali.

The authorities have selected a contractor in February to complete power plant and port site
preparatory work and are now processing contracts for power evacuation and building a power
substation.

With a price tag of $4.6 b, this is one of the costliest power projects of its size in the world that will
come with its own deep sea port to facilitate import of coal. The project will be completed by 2022.
The government’s main focus is on raising the electricity
production to 24,000MW by 2021

As part of its Power System Master Plan (PSMP) 2016, the government is going to implement 10
mega projects of a capacity of about 15,000MW by 2030.

Director General of Power Cell, Mohammad Hossain said: “The government has already initiated a
move to implement the plan as per its vision to raise electricity production to 40,000MW by 2030
and 60,000MW by 2041.”

“However, the government's main focus in the existing plan is on raising the electricity production to
24,000MW by 2021 when the country will be celebrating its Golden Jubilee of independence,” said
the Power Cell chief.

Power Cell, a technical wing of the Power Division, has been entrusted with the responsibility of
preparing the PSMP, reports UNB.

Of the 15,000MW of power, officials said, nine projects of Power, Energy and Mineral Resources
Ministry will provide 11,000MW while 4,000MW will come from the nuclear power plant under the
Ministry of Science and Technology.
They said implementation of three of nine mega projects under the ministry have already started. 

On the other hand, the first phase of 2,400MW of the 4,000MW nuclear power has been initiated by
the Ministry of Science and Technology.

According the officials, the other seven mega projects are now at different stages of implementation,
but due to non-settlement of funds and other technical issues the physical work has been halted.

The balance 1600MW nuclear power has been targeted to be implemented by 2030 by the Ministry
of Science and Technology.

The Bangladesh Bank robbery, also known colloquially as the

Bangladesh Bank cyber heist, took place in February 2016, when thirty-five fraudulent
instructions to withdraw close to US $1 billion from the account of Bangladesh Bank held at the Federal
Reserve Bank of New York were issued via the SWIFT network. The central bank of Bangladesh is commonly
called "Bangladesh Bank" locally. Five of the thirty-five fraudulent transfer instructions issued by security
hackers, worth US $101 million, succeeded with $20 million traced to Sri Lanka and $81 million traced to the
Philippines. Most of the money transferred to the Philippines went to four personal accounts, held by single
individuals, and not to companies or corporations. The Federal Reserve Bank of New York blocked the
remaining thirty transactions, amounting to US $850 million, due to suspicions raised by a misspelled
instruction. All the money transferred to Sri Lanka has since been recovered. However, as of 2018 only
around $18 million of the $81 million transferred to the Philippines has been recovered. It was later
suspected that Dridex malware was used for the attack.

Two years have gone by since the Bangladesh Bank cyber heist, but Bangladesh could not bring back
the major chunk of the $81 million wired to the Philippines from BB's account with the New York
Fed.

Also, the Criminal Investigation Department (CID) has yet to complete its investigation into the
transnational crimes, one of the world's biggest cyber thefts ever reported.

As part of the probe, the CID sought information from several countries about the suspects, but only
the Philippines has responded so far.

The BB is now considering suing Manila-based Rizal Commercial Banking Corporation (RCBC),
known as Rizal Bank, as a last resort to retrieve the money.

On February 4, 2016, hackers broke into the BB's systems and generated 70 fake payment orders for
the Federal Reserve Bank of New York to draw about $1.94 billion.

While the NY Fed's security system flagged the payment orders, five of them fell through, and $101
million against them was released. Of the amount, $81 million was wired to the Philippines (RCBC
branch in Manila) and $20 million to Sri Lanka.
Sri Lanka sent back the entire sum immediately after the heist was exposed while Philippines sent
back $14.54 million in November, 2016, meaning $66.46 million are yet to be retrieved from the
Philippines.

SLOW PACE IN RETRIEVING MONEY

Amid huge uproar, the BB governor, several ministers and MPs visited the US and and the
Philippines as part of their effort to bring back the money.

Initially, the Philippines authorities also cooperated, initiating legal steps against the RCBC and some
individuals.

But BB officials said they found lacking in the Philippines' efforts lately.

Contacted, SK Sur Chowdhury, ex-deputy governor of the BB and currently an adviser at the central
bank, said bringing back money took time.

“But our effort to retrieve the money is on,” he said.

BB Governor Fazle Kabir told reporters on January 29 that several cases were now pending with
courts in the Philippines, and the process for bringing back over $7 million was nearly complete.

A joint team of the BB and the CID left for the Philippines on January 29 to complete the formalities
in this regard.
Of the $66.46 millions yet to be retrieved, the Philippines authorities could trace $47.2 million, now
in possession of several individuals and companies and the matter is now pending with different
courts and authorities, according to BB sources.

Holders of the rest of the money ($19.26 million) could not be traced, they said.

Of the $47.2 million traced, $29 million were transferred to a Manila-based casino -- Solaire -- from
the RCBC. A court froze the casino account and the case is now pending before the Supreme Court,
they said.

Another $17 million remains in the account of Philrem Service Corporation, a money remittance
company. This matter too is pending before a court.

The remittance firm has been used as a “cleaning house” to hide the trail of $81 million looted from
the BB, according to a Reuters' report in April 2016.

Philippine court jails ex-bank manager over

Bangladesh Bank reserve heist
A Philippine court on Thursday held a former bank manager guilty on eight counts of money
laundering, the first conviction in one of the world’s largest cyber heists, in which $81 million was
stolen from Bangladesh’s central bank nearly three years ago.

The regional court sentenced Maia Deguito, a former branch manager at Manila-based Rizal
Commercial Banking Corp (RCBC), to a jail term ranging from 32 to 56 years, with each count
carrying four to seven years.

She was also ordered to pay a total fine of about $109 million.

In February 2016, unknown criminals used fraudulent orders on the SWIFT payments system to steal
the funds from the Bangladesh’s central bank account at the Federal Reserve Bank of New York.

The money was sent to accounts at a branch of RCBC in Manila then headed by Deguito, before it
disappeared into the casino industry in the Philippines.

“Her declaration in open court that she has nothing to do with these transactions was a complete and
comprehensive lie,” the court said in its 26-page ruling.

Deguito facilitated and coordinated and corroborated in the execution and implementation of the
illegal bank transactions, the court added.

“The conviction of Deguito is consistent with the bank’s position that it is the victim in this situation
and that Deguito is a rogue employee,” RCBC spokeswoman Thea Daep said in a statement.
Deguito remains free, however, as bail she posted earlier stays in effect until the conviction becomes
final, one of her lawyers, Joaquin Hizon, told Reuters.

Her other lawyer, Demetrio Custodio said she intended to appeal Thursday’s ruling and carry the
case to the Supreme Court, if necessary, to win acquittal.

In a separate interview with news channel ANC, Custodio said, “There should be more people who
should be more liable for this, other than a very lowly bank officer who has nothing to do with
operational matters.”

RCBC was fined a record 1 billion pesos ($19.17 million) by the Philippine central bank in August
2016 for its failure to prevent the movement of the stolen money through the bank, says a Reuters
report.

A former treasurer of RCBC and five other workers at the branch where the cash was withdrawn face
money laundering charges.

“We hope that this case could be expedited and could go to trial soon for a decision,” Asad Alam
Siam, Bangladesh’s ambassador to the Philippines said regarding the charges.

Just $15 million of the stolen money has been recovered from a Manila junket operator, a role that
involves marketing casinos to VIPs.

Bangladesh bank, finance and law ministry officials are visiting New York this week for talks to try
and move forward the recovery process. They will have to make a decision on suing the parties
involved.

HSBC report: Bangladesh to be the 26th

largest economy
It says Bangladesh will be followed by Philippines, Pakistan, Vietnam and Malaysia

Bangladesh will likely to be the biggest mover in the global gross domestic product rankings in 2030,
says a report of HSBC Global Report.

The report titled “The World in 2030: Our long term projections for 75 countries” says Bangladesh is
becoming the 26th largest economy in the world from the current 42nd position.

Bangladesh will be followed by Philippines, Pakistan, Vietnam and Malaysia.  

“The starting point for a country is a key part of its potential growth. It is very clear that a country
such as Bangladesh has far more potential growth than one like Norway, which is far richer,” it said.
According to the report, the real GDP growth of Bangladesh would be 7.1% per year up to 2030 and
the country will be a $700 billion economy in 2030 from $300 billion now.

The report focuses on six main categories of economic indicators: catch-up potential, population (size
and shape), human capital (education and healthcare), politics, openness and technology.

It said China is set to continue to be the single biggest contributor to global growth and on our
modeled estimates over the next decade and by 2030, and will have become the world’s largest
economy.

It also said one of the striking rises amongst the rankings will be by India which is set to become the
world's third-largest economy in just over a decade, up from seventh today – leapfrogging the
second- and third-largest developed economies of Germany and Japan.

“…the projections and rankings contained in this report are based on assumption that policymakers
will continue to make progress on addressing economic flaws (education, ruled of law etc) and that
they avoid wars and remain open to global trade and capital.

“If these bold assumptions are wrong, our projections could be wide of the mark.”

Poorer countries will have room to catch up by simply adopting best practice elsewhere, and those
with strong governance are more likely to facilitate investment and growth.

Environmental challenges will be one of the policy challenges, said the report.

“It is no coincidence that four of the top six countries for projected growth – India, Pakistan, the
Philippines and Bangladesh – also top the list of countries that have estimated to be the most
vulnerable to climate change.”

The report said population shape matters not just population growth. Young and educated people are
likely to be productive.

It said the quality of institutions will play a big role in delivering on the potential growth in a country.
Without a regulatory environment that makes investment attractive and facilitates investment,
potential growth will be lower.

No more rise in NPLs ‘from now on’

Finance Minister AHM Mustafa Kamal said on Thursday non-performing loan (NPL) will not grow
by even a single penny from today, rather it will reduce.

He, however, said he would not go for action against the "big shots" and "powerful persons" who are
the main drivers of economy.
About his stance on the NPL holders, he said, "The powerful persons account for 82 per cent of the
economy. How can we go forward without these 82 per cent holders?"

"Can we take economy to a good level with the rest of the population who account for only 18 per
cent of the total economy? This sounds absurd to me."

Mr Kamal said this to reporters after a meeting with the representatives of the Bangladesh
Association of Banks (BAB).

"You [the media] don't have exact data on the people who possess the exact amounts of NPLs…
which are still manageable," he said in his Planning Commission office.

"All businessmen at home and abroad are powerful. They are titled as powerful and heavyweight
persons who conduct business, and who play good cricket."

"If businessmen don't become powerful or heavyweight, how will I get investment, how employment
will be created, how poverty be eliminated and how the government will provide services," Mr
Kamal quipped.

He said, "From today, the NPL won't grow as the BAB delegation assured me of working to reduce
it. How the NPL will be reduced was today's moot point."

"… They (bankers) will give me reports on the amounts of bad loans at their respective banks. And
they will give a schedule on the recovery of the loans."

When asked, Mr Kamal said: "I'm worried on the NPL as well as I'm not worried on it."

"I'm not worried about our total debts and deposits. If we think about our asset against deposit
compared to other nations, we're not in the back step."

"Our NPL is only 12-13 per cent of the total outstanding loans. Look at India, how much their NPLs
are!" the minister exclaimed.

"If the NPL is backed by asset, and if we have enough collateral and securities against loans, why am
I to worry, I should not worry," he argued.

"I have to know about the real position of the bad loans and then evaluate them. Then I can tell you
whether I should worry."

"On the assessment only, I cannot express my worry on the NPL before the nation," Mr Kamal
maintained. He said they (bankers) assured him that they will not allow the NPLs to extend further.

"I've told them that it is your business how you will manage or take care of it. My point is you can't
increase the NPL from now on…," he added.
About the central bank reserve heist, Mr Kamal said, "I'll see the Philippines judgment report and our
report. Then we'll share our position with you."

BAB Chairman Nazrul Islam Mazumder said, "We'll prepare lists of two groups. Some NPL holders
went broke after doing 10 years of good business for different types of shocks."

"And some have left (business) after borrowing from the banks," he added.

"First, we'll review the lists and then sit with the central bank and banking division. We'll go for legal
action against the defaulters who will be in the second category."

"The finance minister has assured us of giving all-out support in this regard," Mr Majumder
mentioned.

He, however, said the businessmen who have become defaulters for different shocks on their
business should not be come under punishment

Kamal, popularly known as Lotus Kamal, said that the Ministry of Finance would begin its journey
from tomorrow with a new dimension and there would be new things

AHM Mustafa Kamal, who is going to take charge of the Finance Ministry on Monday, expressed his
resolve yesterday to overcome the challenges successfully that the economy will be facing in the
coming years.

“Every challenge comes up with an opportunity. We will be able to achieve our goal facing those
challenges. I believe we will be able to face those challenges and I won’t fail,” he said in a crowded
press briefing held at the NEC Conference Room in Dhaka, reports BSS.

Kamal, popularly known as Lotus Kamal, said that the Ministry of Finance would begin its journey
from tomorrow with a new dimension and there would be new things.

He said, after assuming of his new office, the Ministry of Finance, his first priority would be to sort
out what are the things that are needed to be done to maintain the country’s economy on a solid and
strong foundation. “I will work on keeping target-based and number-based goals,” he added.

Kamal also added that both the Ministry of Finance and Planning are well integrated and he along
with MA Mannan would move forward keeping hands with hands and shoulder to shoulder to yield
maximum development outcomes.

Touching upon the positive trend of major macroeconomic indicators, Kamal said that the export
growth in the first half of the current fiscal notched nearly 15% while the inward remittance inflow
reached $16 billion side by side the inflation is also in a comfortable zone.

About the prospects of growth in the current fiscal year (FY19), he said that the GDP growth rate in
the current fiscal year would reach 8.25-8.30%.
Previous State Minister for Finance and Planning MA Mannan, who is also going to take oath as the
Planning Minister on Monday, spoke at the briefing.

He said that after taking charge of the Ministry of Planning as its full Minister, he would try his level
best to discharge his duties under the directives of Prime Minister Sheikh Hasina.

Meanwhile revealing the data of the implementation of Annual Development Programme (ADP) for
the first half (July-December), Kamal revealed that the implementation rate in this July-December
period was 27.42% with an overall expenditure of Tk49,595 crore.

The ADP implementation rate during the July-December period of the last fiscal year notched
27.02% with an overall expenditure of Tk44,331 crore.

সুদের হার এক অংকে:

___________________________________

একে বলা হচ্ছে ব্যাংকিং খাতের নয় ছয়।

যা জুলাই ১ থেকে চালু হয়েছে।
বিএ বি এর প্রস্তাবনা। interest on deposits 6% and lending rates 9%.

**সরকারের পদক্ষেপ :
১) এক অংক কার্যকর করার জন্য বাংলাদেশ ব্যাংক ঋণ আমানত কমিয়ে দিয়েছে।
২) সরকারি সংস্থার অর্থ ৫০% বেসরকারি ব‍্যাংকে রাখার নির্দে শ দিয়েছে।
৩) CRR , বাংলাদেশ ব্যাংক ১% কমিয়ে দিয়েছে।
৪) দখিন এশিয়া য় ঋনের সুদের হার -
চীন-৪.৩%
সিঙ্গাপুর - ৫.৩%
ভিয়েতনাম-৬.৩৫%

**Advantages:
1. industry friendly environment
2. New entrepreneur’s
3. Generate employment
4. Accelerate trade
5. Will increase private sector investment

**Disadvantages:
1. Will worsen the liquidity crisis
2. Bank may lose deposits and many insurance and leasing company will take these opportunism.
3. Will make people reluctant to deposit money

**কার্যকর করার অন্তরায় :

১) মূল্যস্ফীতি ও সুদের হারের সমন্বয় নাই
২) খেলাপি ঋণ অনেক বেশি।
৩) সঞ্চয়পত্রের সুদের হার অনেক বেশি।
৪) খেলাপি ঋণ -৮৫ লক্ষ ।
৫) মুক্ত বাজার অর্থনীতি এর কারনে।
৬) IMF এর সাথে চু ক্তি এর সাংঘর্ষিক ।
৭) ব‍্যাংকের আন্তর্জাতিকভাবে মর্যাদা হানি ঘটবে।

What are the Critical challenges for the economy in 2018 for Bangladesh?

/ Economy of Bangladesh Prospects and threats

/ What is the scope of the economy of Bangladesh?

During 2000-2005, the annual reduction in overall poverty rate was 1.8 percentage
points, which declined to 1.7 percentage points during 2005-2010, and further declined
to 1.2 percentage points during 2010-2016. The most alarming trend is that while
during 2000-2005, the annual reduction in extreme poverty rate was 1.8 percentage
points, the rate declined to 1.5 percentage points during 2005-2010 and to 0.8
percentage points during 2010-2016. This  suggests  that  the  scope  and  success  in 
reducing  overall  and  extreme poverty rates in Bangladesh have become limited in
recent years. Our estimates suggest that with the business-as-usual growth rate of
GDP, Bangladesh will have an overall and extreme  poverty  rates  of  around  10% 
and  4%  respectively  by  2030.  Even with an accelerated average growth rate of GDP
of 8%, overall and extreme poverty rates, by 2030, will be around 6.5% and 2%
respectively. There are four reasons for which despite accelerated economic growth in
recent years, there has been much slower progress in poverty reduction. These are slow
employment generation, poor public spending on education, poor public spending on
health and growing inequality. Political uncertainty looming over national election
which can further affect private investment, rising food inflation, being on track with
respect to SDGs, challenge of growth of exports and remittance and finally governance
issues around the banking sector are five critical challenges for the Bangladeshi
economy in 2018. Stimulating the private sector investment still remains a big
challenge. A rising GDP growth rate since 2012-13 had been largely driven by factor
accumulation and government expenditure. But, the sluggish private investment and
rise in public investment continued as the share of public investment in total
investment became one-fourth by 2016-17 from around 16.5% in 2008-09.

The country witnessed a falling in growth rate in exports until 2016-17. However,
during July- Nov 2017-18 exports grew at 6.86% compared to the similar period in
2016-17. The RMG registered a growth  rate  of  7.46%.  The leather  sector  exports 
encountered  a  negative growth rate of 2.95%. Despite the fact that the leather
industry was declared as the ‘Product of the Year’, this sector performed poorly. The
prospect of the rising export growth in 2018 depends on both the domestic and
external factors. On the domestic front, there are problems of policy-induced and
supply-side constraints. The real effective exchange rate of Bangladesh is still highly
appreciated compared to Bangladesh’s competitors. During 2012 and 2016, REER of
Bangladesh, with respect to US dollar appreciated by 22.3%. Further adjustment in the
nominal exchange rate will be obvious given high import demand and the slow down
of export and remittance growth. However, mere devaluation of the nominal exchange
rate will not be enough for getting the REER right. There is a need for necessary
measures for export growth by addressing the domestic competitiveness issues as well
as for product and market diversification. The country also witnessed a falling growth
rate in remittance until 2016-17. However, during July-Nov 2017-18 remittances grew
at 10.1% compared to the similar period in 2016-17; yet it was 6.6% lower than the
similar period in 2015-16. According to the World Bank’s recent projection
remittances to low and middle-income countries are on course to recover after two
consecutive years of decline. This means that there is a brighter prospect for the
Bangladeshi economy in 2018.

There has been a surge in import of rice in recent months. While during July-
September 2016-17, import of rice was only Tk35.7 crore, during July-September
2017-18, import of rice increased to Tk2912.1 crore. In the first three months of 2017-
18, import of rice has been around 5 times of the total import of rice in the past
financial year. Also, the rising import  of  capital  machinery  and  raw  materials
need  to  be  tallied  with  the  current investment situation. Rice prices are still high
and on the rise despite imports. Using a computable general equilibrium (CGE) model,
we simulated a shock of 35% increase in the price of rice in the Bangladesh economy
and the results show that there is likely to be a rise in headcount poverty rate by 0.32%
points due to a hike in rice prices in this year. This means, 520,000 people have fallen
into poverty due to rise in rice prices this year. The South Asian Network on Economic
Modeling (SANEM) suggests a ‘Rice Policy’ with respect to production, import,
supply management and strategic agreements with the rice exporting countries.
SANEM is highly concerned about the rise in scams in the banking sector and high
rise in the non-performing loans. These are reflections of weak regulation, political
patronage, and lack of vision. The ‘Banking Companies (Amendment) Act-2017’
which has allowed four family members on bank board of directors for nine
consecutive years will increase the fragility of the banking sector further.  There is  a 
need  for  a  political  will,  proper  regulation, empowering Bangladesh Bank, and
speedy trial of the financial crimes. In conclusion, there are two messages. The first
message is that the business-as-usual scenario will not help when it comes to
generating productive employment, making growth inclusive, accelerating the
reduction in the poverty rate, developing human capital, and achieving the SDGs by
2030. The second message is that there is a need for “getting the priorities right”,
which requires prioritizing education, health and social sector investment, speedy
complementation of the infrastructure projects (including SEZs) within justified cost
estimates, and undertaking reform measures with respect to trade, industrial and macro
policies and institutions.

‘Bad’ Brexit may hurt Bangladesh’s interests

Development assistance, investment, remittance and prospect of overseas employment are likely to
be affected, at least temporarily  

Like the rest of the world, Bangladesh has its watchful eye on the development in the United
Kingdom, the fifth largest economy in the world, which is going through a rough patch over the
Brexit issue.

The term “Brexit” refers to the UK’s move to pull out of the European Union (EU), a powerful bloc
of 28 developed European countries, following a referendum in June 2016 in which the British
people voted to leave the EU by a very small margin.

As things stand now, the UK will have to leave the EU by 11pm, UK time, on March 29 in
accordance with the negotiations that started on March 29, 2017.

The UK has found itself in a limbo after Tuesday’s vote at the House of Commons, where the deal
negotiated by Prime Minister Theresa May was rejected by the lawmakers 432 to 202 votes – the
largest such defeat a government conceded in a century.

Now, the UK, one of the five permanent members of the UN Security Council, has three choices: get
a new deal, which is unlikely according to the EU27; leave the bloc without a deal; or remain in the
union.

According to experts and senior diplomats both at the Ministry of Foreign Affairs and the Bangladesh
High Commission in London, Bangladesh has reasons to be concerned about the happenings in the
UK, as it is one of Bangladesh’s largest development partners with significant trade and investment,
as well as a sizeable diaspora.

Earlier, it was believed that Brexit would not affect Bangladesh, but Tuesday’s vote seem to have
made the policy-makers think differently, as the Dhaka Tribune has learnt.     

Bangladesh will not be affected largely if the UK leaves the EU with a “good” deal or decides to stay
back, they observed. However, the diplomats and experts said it would be a cause for concern for
Dhaka if London got out of the EU with a deal – or no deal – that might affect the UK economy, a
notion made by many experts and a majority of lawmakers in the UK. 
They further said if Britain landed in an economic “chaos” due to a bad deal, it is all but certain that
development assistance would go down, remittances sent by the expatriates would reduce, investment
would be affected, and prospects of employment of Bangladeshis in the UK curry industry would
subside.

All in all, a bad Brexit is the last thing Dhaka will want, they said, striking a notion of optimism that
even if Bangladesh faced problems, it would be temporary because the British economy is still one of
the strongest in the world.

Trouble likely, even if for a while

“During our strategic dialogues in 2017 in Dhaka and last year in London, we were told that Brexit
would not affect Bangladesh. Besides these official talks, we have been given the same assurance
from time to time,” a senior diplomat told the Dhaka Tribune, requesting anonymity. 

“In fact, UK leaving EU may benefit us further because within the EU, London cannot do certain
things even if it wants to due to common EU rules and regulations. For instance, on issues like
migration and climate change, the British are much more liberal than some other members of the
bloc,” he added.

However, another senior diplomat said things seemed to be different now after Tuesday’s vote.

“The sheer size of the defeat has weakened the (UK) government, and there is little chance of
renegotiation. We hope things will eventually turn out smoothly,” he added. 

Former foreign secretary Md Touhid Hossain believes Bangladesh is likely to suffer for a short
period of time given the current situation, but Britain will fix the problems in the long run. 

“Britain is one of the top economies in the world. They are quite able to manage their economy,” he
told this correspondent. “The EU will not let the UK economy to be badly affected.”

Delwar Hossain, professor of international affairs at Dhaka University, however, thinks the Brexit
aftermath will be troublesome for Bangladesh.

“There is no doubt that there will be some adverse effects on us if there is a bad deal or no deal. The
vote at the House of Commons reflects that most of the lawmakers, including over 100 from the
treasury bench, consider it a bad deal,” he told the Dhaka Tribune. “The Bangladeshi diaspora will
feel the first pinch, which is most likely to extend to Bangladesh.”

He urged the policy-makers to be prepared for the likely scenarios.

Business leaders and experts believe things may not be as problematic as feared. 

“Since the UK government has clearly said it will try to maintain the same level of commitment on
trade facilities for the LDCs as the European Union even after the Brexit, the possibility of impact on
Bangladesh exports to the UK is limited,” said MA Razzaque, research director at the Policy
Research Institute (PRI).

However, if the Brexit process is prolonged due to the rejection and hits the EU business, the market
may slow down, which in turn is likely to cut demands of goods, leading to a slower export growth
for Bangladesh, the economist said. 

Abdus Salam Murshedy, president of the Exporters Association of Bangladesh, said: “I think the
delay in the execution of Brexit will not have any adverse impact on Bangladesh exports to Britain,
as it has already assured Bangladesh of providing a duty-free market access, like it did as an EU
member.

“Nevertheless, Bangladesh should continue negotiation with the UK for the continuation of trade
facilities after the Brexit,” said the former BGMEA president.   

Bangladesh currently enjoys duty-free market access in the UK under Generalized System of
Preferences (GSP) facilities as a EU member. 

In first half of the current fiscal year, Bangladesh exports to the UK saw a slowdown. 

According to the Export Promotion Bureau, in the July-December period of 2018-19 fiscal year,
Bangladesh earned $2.04 billion, up by 3.16% from the earnings during the same period a year ago,
which was $1.98 billion.

However, in the last fiscal year, Bangladesh export earnings from the UK saw an 11.76% growth, to
$3.99 billion, compared to the previous year’s $3.57 billion.

Personality Based Questions

Introduce yourself/ tell me something about yourself?
Tell us something about yourself apart from your CV?
Sir to tell about myself apart from my CV Three things can define me. Planning,
Execution and Patience. When I am assigned for any job I I give prime focus on
planning because proper planning ensures better result, than I focus on execution and
if the result is not satisfactory I keep patience and try to find out the mistakes. I am
good at communicating with others, industrious, a good team member and passionately
curious to learn new things.
Question: Do you think that you are capable of being selected as a Probationary
Officer of this bank?
Me: Yes Sir….. I believe I am capable.
In which position you want to see yourself after 5 & 10 years?
Me: Sir I want to be a First Executive Officer after in 5 Years & Junior Assistant Vice
President after 10 years.
Question: if you get the opportunity how much time will you take to become MD
of this bank?
Me: Sir I think I will take 25-30 years.
Why you want more? So you are not confident enough?
Me: Sir a if you provide me proper training and with your support I can flourish my
potentialities than I think I will be able to become a MD…. Luck is also required sir.
Because we don’t know will ever be a MD from MTO 17 batch or 18 batch or 19th
batch….
Sir: Definitely we will provide you proper training… but do you have that
capability to receive training?
Me: Yes Sir I am confident about that…..

In last 6 months what have you done?

Sir in last 6 month I have worked on my nervousness… I tried to overcome my
nervousness.
Sir: How you tried?
Me: I practiced about an hour daily in front of mirror sir. I talked to myself
looking in my eyes. Sir: So you are not nervous today? Me: No Sir. Not even a
little bit.
Sir: He Went through my cv and asked me you were involved in debating in your
University? How you are nervous?
Me: Sir I am good at debating. But I feel pressure in front of you guys…. Now I have
overcome it sir. Sir: What you will do if we do not select you today? Me: Sir I will
keep patience. I will try to find my weak points. I have faith on almighty as well as on
me. Definitely I will be selected as an MTO of a bank….. May be today…. May be
tomorrow…. I will try my best sir.
Sir: What are you doing now?
 Me: Sir I am a job seeker seeking job...
What are your career goals?
My current goal is to get a job in reputed bank like yours where I can utilize my skills
& improve my career path. My long term goal is to be in respectable position in this
organization.
How will you achieve your goals?
• I have intention to acquire additional skills by taking part in relevant class to the job
and keeping my involvement with various professional associations.
• I see myself that my previous organization is going to offer in-house training for
employees and I would prefer to attend related classes to enhance my skills.
• Taking participation in conferences, seminars, meetings and upholding my education
will be effective ways to continue my professional development.

Why did you leave your last job?

Have you ever had a conflict with a boss or professor? How was it resolved?
“Yes, I have had conflicts in the past. Never major ones, but there have been
disagreements that needed to be resolved. I've found that when conflict occurs, it helps
to fully understand the other person’s perspective, so I take time to listen to their point
of view, and then I seek to work out a collaborative solution. For example . . .
If your previous co-workers were here, what would they say about you?
"They'd say I was a hard worker" or even better "My previous boss has always said I
was the most reliable, creative problem-solver he'd ever met."
What major challenges and problems did you face? How did you handle them?/
Describe a time when you had a lot of work. How did u handle it?
At my previous job, I was tasked with setting up a new in-house email marketing
platform. This included Sample development and control whole sampling process,
Fabric and accessories sourcing and tracking, Factory production scheduling and
production tracking, Costing and price quoting, learning how to use the platform,
migrating data and content from the old platform and training staff. Building Brand
equity & production line management control was the only intentions.
Once I completed my research and selected the best tool for our needs, the biggest lift
was making sure to communicate the change to colleagues as far in advance as
possible, cross connection with work study & time study, enrich the knowledge on
total quality management and to remain available to respond to any questions or
confusion. This was particularly difficult since employees at my previous organization
are highly averse to new technology. But the management forced me & my team to
focus on manual system before implement the in-house workforce network system by
a software,
I was able to develop a communication calendar, brand wise positioning & network
systems with buyers, retaining buyers through firm specific factors, training materials
and sessions and follow-up guidance. HRM & planning department was the big hand
for me. Before that I have to develop a cross connection department wise questionnaire
& at the mean time focus on need generation from the employees & from the board
authority.
Consequence from the firm level were implementation of R&D & business growth
intention rating system by vendor brand equity+ merchandising support + Margin
Maintanance. In the same the factory realizes to enhance its capacity power & the
management already enhance its production efficiency.
Consequence from the employee level was cross functional network system with
supply chain department, R&D & strategic marketing department in order to boost the
production efficiency, quality management process, joint communication systems with
buyer.
At last got extensive order from H&M, Heated, Zara, Morgan & Finch, Wal-Mart from
Canada and so on. Retain old consumers who left us because of shipment delay. So,
profit goes up with better quality management.
Explain what has disappointed you most about a previous job?
Lack of challenge. How many hours I have to commit. I focused on pay and benefits
when I took my job. I didn’t fully realize how much time is our greatest and only asset.
I would definitely consider this if ever looking for another one.
Why should Jamuna bank select me?/ Why should we hire you?/ How can i add
value to Jamuna bank?/ How will your greatest strength will help you to do this
job?

From my university research works & from my past job experiencee, I know that what
I'm lacking is career experience. However, the qualifications that I bring cannot be
measured by traditional experience. After managing everyday communication with
buyers, researching, planning the strategig platforms which will enrich the business
model, risk measurement interms of costing & reporting to my line managr I have
learned how to keep focus on multitask and prioritize responsibilities. 3rd generation
bank as like jamuna bank, I think Dedication, willingness to walk the extra mile to
achieve excellence, Definiteness of purpose, clear goals,Enthusiasm, high level of
motivation & the ability to effectively prioritize every sort of consumers is a
significant component of success. So, practically I can that I have some significant
attributes to being a part of this progressive bank.

What makes you to work at this bank?

Sir, this a great privilege for anyone to work in a well reputed bank like yours. When I
read job responsibilities I found my skills are matching .where I can explore technical
skills to contribute to the bank growth as well as to serve the country

Why u want to come in banking sector? / Why u choose banking?/ Why you like
bank & why not other services?
Banking sector has evolved tremendously along the development of economy and the
development of [Link] of banking is not just limited to its basic role of
lending money and taking deposits. Over a period of time, this scope has been
widened. Banks are contributing to facilitation of trade, encouraging the savings,
bolstering of investments, transfer of funds, providing financial support to core sectors
like agriculture and manufacturing. This has created demand for adequate professional
management who can use modern managerial techniques and practices in banking
industry.

What are Duties and responsibilities of an Officer of a conventional commercial

bank?

 Account opening
  Scrutinizing the customer application submitted by the sourcing channels and
accordingly capturing the customer information/instruction/transactions in the
core banking system as per the bank‘s policies.
 Highlighting discrepancies in the customer application to the sourcing channels
for rectification and compliance.
 Executing and completing the allocated tasks assigned within the stipulated
timelines.
 Processing the customer queries/complaints raised by branches/contact center by
providing end to end resolution and ensuring timely closure of tickets logged on
bank‘s internal platform.
 Working efficiently towards the assigned tasks with accuracy and minimal error.
 Maintaining data on activities and provide regular management information
system (MIS) for review with top management as per requirements.
If a customer is not convinced about this bank, how would you change their
mind?
“I would take a look at their lifestyle, and see how this bank fits it perfectly. If the
potential client goes overseas a lot, I would show them how our offers for international
withdrawals are the best and most convenient. During this conversation, I would try to
keep things as simple and easy as possible so that he or she would feel it would be the
best investment of their time and money. I would emphasize personal added value that
the bank can give them.”
How would you handle a situation wherein a customer has been wrongly
overcharged for a withdrawal fee?
The customer would need adequate time to express their point of view. I would outline
our bank’s policy in such a case and show how this matter can be properly reconciled.
I would offer to partner with the client in resolving this issue from a reasonable
standpoint and show how our email alert feature for low bank account balances. I
would calmly walk the customer through what to do in case this happens the next time,
and provide a special number to call for direct customer service — while assuring her
that I will personally take calls, should this happen again
What challenges are you looking for in this position?

 Work Place Diversity and Inclusion

 Mark Up Technological Efficiences
  Coperation towards target fullfilling
 Fast & Furious Operation level Management
 Maintain the professional ethics

What can we expect from you in your first 90 days?

 I'll work hard to determine how my job creates value -- I won't just stay
busy, i'll stay busy doing the right things.
 I'll learn how to serve all my constituents -- My boss, my peers, my
customers and suppliers and vendors...
 I'll focus on doing what you do best -- I'll be hired because I have certain
skills, and i'll apply those skills to make things happen.
 I'll make a difference -- with customers, with other employees, to bring
enthusiasm and focus and a sense of commitment and teamwork...

Why do you think this bank is a good fit for your skills?

"After looking at the job requirements and researching your company history and
policies, I think that my skills in customer care, accuracy and smart investing can help
your clients make smart financial decisions. I am committed to complete
confidentiality and have had previous experience dealing with tough customers."

Why did you decide to become a banker?

Banking sector has evolved tremendously in the recent past. Banks are no more
offering banking services through its branches. Because of a number of products and
services being offered by the banks, the bank has reached the home and office of its
customers. For example, use of ATM has allowed the customer draw cash from any
machine 24 x 7. Similarly mobile banking allows the customers to view the balance
and also do the transactions on the go. Hence technology is the need of the day as
modern banking rides on IT and future banking will need more of technology.

Also banks need interactive websites and mobile banking which are fast and secure.
Marketing of banking operations now use large social media platforms.
For such highly evolved and booming industry, there is a growing need for tech savvy
and enthusiastic professional with strong interpersonal skills. I am happy to say that I
match the ideal candidate’s profile very well.

How marketing subject is so relevant in banking sector?

Marketing approach in banking sector had taken significance after 1950 in western
countries and then after 1980 in Turkey. New banking perceptiveness oriented toward
market had influenced banks to create new market. Banks had started to perform
marketing and planning techniques in banking in order to be able to offer their new
services efficiently.
Marketing scope in banking sector should be considered under the service marketing
framework by reliability, responsiveness, empathy, assurance & trangibility.
Performed marketing strategy is the case which is determination of the place of
financial institutions on customers’ mind. Bank marketing does not only include
service selling of the bank but also is the function which gets personality and image for
bank on its customers’ mind. On the other hand, financial marketing is the function
which relates uncongenitalies, differences and non similar applications between
financial institutions and judgement standards of their customers.
What is your strength/ accomplishment?

 Honesty...integrity...a decent human being.

 Good fit with corporate culture...someone to feel comfortable with...a team
player who meshes well with interviewer's team.
 Likeability...positive attitude...sense of humor.
 Good communication skills.
 Dedication...willingness to walk the extra mile to achieve excellence.
 Definiteness of purpose...clear goals.
 Enthusiasm...high level of motivation

What is your weakness?

Nobody's perfect, but based on what you've told me about this position, I believe I’d
make an outstanding match. I know that when I hire people, I look for two things most
of all. Do they have the qualifications to do the job well, and the motivation to do it
well? Everything in my background shows I have both the qualifications and a strong
desire to achieve excellence in whatever I take on. So I can say in all honesty that I see
nothing that would cause you even a small concern about my ability or my strong
desire to perform this job with excellence.
How do you handle stress?

I react to situations, rather than to stress. That way, the situation is handled and doesn't
become stressful. I actually work better under pressure and I've found that I enjoy
working in a challenging environment. From a personal perspective, I manage stress
by visiting the gym every evening.

Do you prefer to work by yourself or on a team?

I am equally comfortable working as a member of a team and independently. After
researching the jamuna bank limited mission statement ,the cognitive idea towards the
job description of a probationary officer & I could see similarities to previous position
that I have held where some assignments required a great deal of independent work
and research, while others were better completed as a group ( Example- Brainstorming
session, Foster Trust, Share Resources). I truly enjoy the variety of being able to work
by myself on some projects and on a team at other times.
Are you a tram player?
Definitely I am. Example_ Experience from job & University group project.
How would you describe your work style?
- When I work, I focus all my attention to the work. Thanks to that, I am able to
complete my work very quickly and effectively.
- I am an organizing person. I can organize my work very effectively. That’s why my
record has proven my efficiency in dealing with multi-tasks.
How do you deal with conflict?
 Talk with the other person. ...
 Focus on behavior and events, not on personalities. ...
 Listen carefully. ...
 Identify points of agreement and disagreement. ...
 Prioritize the areas of conflict. ...
 Develop a plan to work on each conflict. ...
 Follow through on your plan. ...
 Build on your success.
How long would you expect to work for us if hired?
I’d like it to be a long time. Or As long as we both feel I’m doing a good job.
What motivates you to do your best on the job?/ What is your Motivating
Factors?
Challenge, Achievement, Recognition
- I was motivated both by the challenge of finishing the projects on time and by
managing the teams that achieved our goals.
- I want to be successful in my job, both for my own personal satisfaction and for my
employer.
Why have you been out of work so long?

“After my job was terminated, I made a conscious decision not to jump on the first
opportunities to come along. In my life, I’ve found out that you can always turn a
negative into a positive IF you try hard enough. This is what I determined to do. I
decided to take whatever time I needed to think through what I do best, what I most
want to do, where I’d like to do it…and then identify those companies that could offer
such an opportunity.”

What should graduates do to cope up with modern world?

I think the standard procedures are to being updated locally & globally (I belive learn
locally & act globally will enrich the leadership capabilities), attend different
seminers; may be it could be out of my sector but knowledge is everywhere, absorb the
diversified culture & if possible travel widely to know the history & culture of a
country.
What is Difference between job and career?
A career is the pursuit of a lifelong ambition or the general course of progression
towards lifelong goals. A career is a series of connected employment opportunities
where a person builds up skills at earlier employment opportunities to move him into
higher paying and higher prestige employment opportunities later on. Job is an activity
through which an individual can earn money. It is a regular activity in exchange of
payment. If there is promotion of position based on performance, then it is career. Any
type of work is job. All careers are job, but all jobs are not a career.
What extracurricular activities are you involved in?
I was very active in the university magazine committee of NSU Marketing Club. I was
a member of that group for four years. I helped write articles about events occurring in
university. In my senior year, I was the editor and did less writing and more managing
in regards to the magazine structure, what contents to add and distributing work among
the junior members of the group. I really enjoyed my experience there and learned
about working closely together as a group to deliver a quality magazine.
Actively volunteered in seminars organized in college and came out with flying colors.
Was a volunteer at World Marketing Summit 12 Bangladesh 2012. Working with
propod (progotir poribrazok dol at Jahangirnagar University) which is a cultural
organization for deprived people and provide education service for deprived children 3
days within a week. Always willing to attend numerous academic conferences like
Bangladesh youth fest talk, Supply chain management awareness program, Creativity
for holistic marketing program, Quality standard analysis program etc.
What are your salary expectations?
Salary is not first priority to me. This is an opportunity for me to start my career & I
also improve my knowledge & skill. So I expect a considerable salary according to the
position as per bank rule.
Or ‘I‘m looking for a starting salary which associated with a standard level like 40,000
Taka,
Do i have any questions for them?
Non Performing Loan & BB new policy Internal Credit RisK Management System

About Home Town

চাঁদপুর জেলা Chandpur Sadar (Bengali: চাঁদপুর সদর) is an Upazila of the Chandpur District in the
Division of Chittagong, Bangladesh. It is mainly reputed for its famous ilish fish, which are caught
by the local fishermen from the nearby Meghna River. পদ্মা, মেঘনা ও ডাকাতিয়া নদীর মিলনস্হলে এ জেলা
অবস্থিত। ১৯৮৪ সালের আগ পর্যন্ত এটি বৃহত্তর কু মিল্লার একটি অংশ ছিল।চাঁদপুর জেলা ১৭০৪.০৬ বর্গ কিলোমিটার
এলাকা নিয়ে গঠিত।

প্রশাসনিক এলাকাসমূহ

চাঁদপুরে ৮টি উপজেলা, ০৭টি পৌরসভা, ৬০টি ওয়ার্ড , ২৭৫টি মহল্লা, ৮টি পুলিশ থানা, ২টি নৌ থানা, ১টি কোস্ট গার্ড
স্টেশন, ১টি রেল থানা, ৮৭টি ইউনিয়ন পরিষদ এবং ১২২৬টি গ্রাম রয়েছে।

সংসদীয় আসন

চাঁদপুর জেলায় ৫ টি সংসদীয় আসন আছে। এগুলো হচ্ছে-

  ২৬০, চাঁদপুর-১, (কচু য়া উপজেলা)
 ২৬১, চাঁদপুর-২, (মতলব উত্তর ও মতলব দক্ষিণ)
 ২৬২, চাঁদপুর-৩, (চাঁদপুর সদর ও হাইমচর)
 ২৬৩, চাঁদপুর-৪, (ফরিদগঞ্জ)
 ২৬৪, চাঁদপুর-৫, (হাজীগঞ্জ ও শাহরাস্তি)

অর্থনীতি

চাঁদপুর জেলার অর্থনীতি মূলত কৃ ষিভিত্তিক। নদী তীরবর্তী এলাকা বলে প্রায় ৩০% মানুষ প্রত্যক্ষ ও পরোক্ষভাবে
মৎস্য শিল্পের সাথে জড়িত। এছাড়াও উল্লেখযোগ্যভাবে অনেক ব্যবসায়ী বিদ্যমান। জেলা সদরে অনেক মাছের আড়ত
রয়েছে, যা জেলার অর্থনীতির মূল চালিকাশক্তি। চাঁদপুর শহরের বাবুরহাটে বড়বড় বহু শিল্পকারখানা রয়েছে। এই
জায়গাটিকে সরকার বিসিক শিল্প নগরী ঘোষণা করে। এই এলাকাটি শুধু চাঁদপুরের নয় পুরো বাংলাদেশের অর্থনীতির
একটি আশীর্বাদস্বরূপ শিল্প নগরী। মেঘনার ভাঙ্গনে প্রতি বছর চাঁদপুরের আয়তন কমে গেলেও মেঘনা, চাঁদপুরের জন্য
আশীর্বাদস্বরূপ। প্রতি বর্ষায় পানিতে ডু বে যায়, ফলে বর্ষাকালে চাঁদপুর মাছের মাতৃ ভূ মি হয়ে যায়। জেলার প্রধান শস্য
ধান, পাট, গম, আখ। রপ্তানী পণ্যের মধ্যে রয়েছে নারিকেল, চিংড়ি, আলু, ইলিশ মাছ, সবুজ শাক-সবজি, বিসিক
নগরীর তৈরি পোশাক শিল্প।

 Chairmen- আলহাজ্ব ওচমান গণি পাটওয়ারী

 পুলিশ সুপার- জিহাদুল কবির পিপিএম
 জেলা প্রশাসক ও জেলা ম্যাজিস্ট্রেট- মোঃ মাজেদুর রহমান খান
 Mayor-জনাব মোঃ নাসির উদ্দিন আহমেদ