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FORMAL REPORTFORMAL REPORT
General Management ofBASIC Bank Limited with Special
Emphasis on SWOT
Management and OrganizationGroup-1, EMBA, Spring- 2010
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Formal Report
OnGeneral management ofBASIC Bank Limited with Special Emphasis on SWOT
Prepared for:
Dr. Ahmad A N Neaz, DSScProfessor
American International University - Bangladesh
Prepared by:
Md Ashraful Islam
ID: 10-93574-1
Md Habibur Rahman Khan ID: 10-
93678-1
Sayeed Hossain
ID: 10-93677-1
Qumrul Hassan
ID:10-93486-1
Novera A zaman
ID:10-93574-1
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Date of Submission: 16 February 2010Group G- 1, EMBA, Fall- 2010
American International UniversityBanani, Dhaka
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16 Febrruary 2010
Dr. Ahmad A N Neaz, DSScAmerican International UniversityDhaka
Subject: Submission of Report.
Dear Sir,
We are the students of EMBA in your University. It is a great pleasure for us to submit the
report, as part of academic curriculum, to you for your further evaluation. The report is
prepared on General management of BASIC Bank Limited with special emphasis
on SWOT. We have tried our best to prepare the report and to make it a worthy one.Each aspect of the problem is considered and studied as required.
If any confusion arises or any further explanation is needed, we will be readily available
to explain the matter to you, as the situation required.
Sincerely yours,
Md Ashraful Islam
ID: 10-93574-1
G1
Md Habibur Rahman Khan
ID: 10-93678-1
G1
Sayeed Hossain
ID: 10-93677-1
G1
Qumrul Hassan
ID:10-93486-1
G1
Novera A zaman
ID:10-93574-1
G1
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Acknowledgements
It has been a wonderful experience to prepare a paper on the " General management of
BASIC Bank Limited with special emphasis on SWOT". To prepare the paper we were
largely dependent on internet to get the required information. We also talked to the
officials of BASIC Bank Limited for required information. We would like to express our
gratitude to faculty teacher professor Dr. Ahmad A N Neaz, DSSc for his continuous
support and guidance to prepare the report. Our deepest appreciation to Professor Dr.
Ahmad A N Neaz, DSSc and the officials of BASIC Bank Limited for their spontaneous
assistance. Thanks all.
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Table of Contents
Heading PageChapter-1 AN OVERVIEW OF BASIC BANK LIMITED 1
1.1 Background of BASIC Bank Limited 11.2 Organization Vision, Mission and Goal 11.3 The Bank Offers 21.4 Branch Network in Bangladesh 31.5 Achievement 3
Chapter-2 ORGANIZING & MANAGING HUMAN RESOURCES2.1 Organizational Structure 4
2.1.1 Board of Directors 4
2.1.2 ORGANOGRAM of Basic Bank 52.1.3 Management 62.2 Functional Divisions of Basic Bank 62.3 Human Resource 6
2.3.1 Recruitment 72.3.2 Training 7
Chapter-3 THE ESSENTIALS OF PLANNING3.1 Organizational Mission 83.2 Types of Planning 8
3.2.1 Strategic planning 8
3.2.2 Intermediate planning 83.2.3 Operational planning 93.3 Organizational Objectives 93.4 Priorities 103.5 The Planning/Control Cycle 10
Chapter-4 SWOT ANALYSIS OF BASIC BANK4.0 SWOT analysis 114.1 Strength 11
4.1.1 Bank Assets 114.1.2 Strong SME financing 12
4.2 Weakness 124.3 Opportunities 12
4.3.1 Industry and Services 124.3.2 Other Banking policy 134.4 Threats 13
4.4.1 Threat to Industries 134.4.2 Default cultures 134.4.3 Banking vs Technology 13
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Chapter-5 CONCLUSION5.0 Conclusion 145.1 Recommendation 15
BIBLIOGRAPHYBIBLIOGRAPHY 15
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CHAPTER-1
AN OVERVIEW OF BASIC BANK LIMITED
1.1 General information.
BASIC (Bangladesh Small Industries and Commerce Bank Limited) Bank Limited is one
of the leading private commercial bank having a wide network of 33 branches across
Bangladesh and plans to open few more branches to cover the important commercial
areas in Dhaka, Chittagong, Sylhet, Khulna and other areas in 2010. BASIC Bank
registered under the Companies Act 1913 on the 2nd of August 1988, started its
operations from the 21st
of January 1989. It is governed by the Banking Companies Act1991. The Bank was established as the policy makers of the country felt the urgency for a
bank in the private sector for financing Small Scale Industries (SSIs). At the outset, the
Bank started as a joint venture enterprise of the BCC Foundation with 70 percent shares
and the Government of Bangladesh (GOB) with the remaining 30 percent shares. The
BCC Foundation being nonfunctional following the closure of the BCCI, the Government
of Bangladesh took over 100 percent ownership of the bank on 4 th June 1992. Thus the
Bank is state-owned. However, the Bank is not nationalized; it operates like a private
bank as before.
1.2 Vision, Mission and goal of BASIC Bank Limited
1.2.1 Vision of BASIC Bank
To provide best banking service to all kinds of people, and contribute the
economic development of the country.
1.2.2 Mission
Providing high quality product and service through by latest technology
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1.2.3 Goal of BASIC Bank
Every organization has to set up their organization goal to do business that will
mach up with their strategy. To set up mission is very important task for the
organization. Because for doing business it plays an impartment role to cope up
with the organizational structure. So the goal the BASIC Bank are -
To employ funds for profitable purposes in various fields with special emphasis
on small-scale industries.
To undertake project promotion on identify profitable areas of investment.
To search for newer avenues for investment and develop new products to suit
such needs.
To establish linkage with other institutions which are engaged in financing
micro enterprises.
To cooperate and collaborate with institutions entrusted with the responsibility
of promoting and aiding SSI sector.
1.3 The Bank Offers
The Bank offers the different types of product and services, that are described below:
Term loans to industries especially to small-scale enterprises
Full-fledged commercial banking service including collection of deposit, short term
trade finance, working capital finance in processing and manufacturing units and
financing and facilitating international trade.
Technical support to Small Scale Industries (SSls) in order to enable them to run
their enterprises successfully.
Micro credit to the urban poor through linkage with Non- Government Organization
(NGOs) with a view to facilitating their access to the formal financial market for the
mobilization of resources.
In order to perform the above tasks, BASIC Bank works closely with its clients, the
regulatory authorities, the shareholders (GOB), banks and other financial institutions.
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1.4 Country wide Branch Network
At present, there are twenty-nine conveniently located branches in all over Bangladesh.Location of these branches are given below:
1 DHAKA[Twelve Branches in the capital city] 9 SAIDPUR
2 CHITTAGONG,[Seven Branches in the commercial
city]
10 BOGRA
3 NARAYANGANJ 11 KHULNA
4 NORSHINNGDI 12 JESSORE
5 RAJSHAHI 13 SYLHET
6 RONGPUR 14 BARISAL
7 GAZIPUR 15 CHAWMUHONI
8 COMILLA 16 SIRAJGONJ
1.5 Achievement
The performance of BASIC Bank Limited has been satisfactory since its inception inrespect of all the measurement parameters. The total assets of the Bank increased toTaka 46,651.53 million at the end 2008 from Taka 38,773.91 million in the previous year.The growth rate was 20.31 percent. Deposit rose from Taka 31,947.98 million in 2007 to
Taka 38,368.23 million in 2008 showing a growth rate of 20.09 percent. All out effortswere made to improve the recovery rate and control non-performing loans and advances.Although the recovery rate of project loans remained stable in the neighborhood of 96percent the proportion of non-performing loans to total loans increased to 3.25 percent in2008 from 3.70 percent in 2007. Year 2008 was a period of high growth in loans andadvances with 22.48 percent increase compared to 23.86 percent increase in 2007.Growth of industrial finance was moderate and loans to small and medium industries was23.91 percent of total loans and advances Emphasis on the maintenance of quality ofassets remained the centerpiece of the Bank's business strategy.
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CHAPTER-2
ORGANIZING & MANAGING HUMAN RESOURCES
2.1 Organizational Structure
The Bank is organized with a Board of Directors and a managerial body. The Board of
Directors which is the highest policy making body lay down the major policy guidelines,
and the managerial body looks after the day-to-day operation of the Bank.
2.1.1 Board of Directors
The Government of Bangladesh appoints all the Directors of the Board. The
present Board of Directors is as under:
2.1.2 ORGANOGRAM OF BASIC BANK
NAME OF BOARD OF DIRECTORS:
Mr. Sheikh Abdul HyeBacchuChairman, BASIC BankLtd & Former Memberof Parliament .
Mr. Jahangir Akhand Salim
Director, BASIC Bank Ltd &
Founder President Chandpur
Chamber of Commerce and
Industries
Ms. Razia Begum
Director, BASIC Bank Ltd
& Additional Secretary
Ministry of Education
Mr. Shakhawat
HossainDirectorBASIC Bank Ltd& FormerCommissioner ofCustoms
Mr. Bijoy Bhattacharjee
Director, BASIC Bank Ltd
& Joint Secretary
Finance Division, Ministry of
Finance
Mr. Ashraf Mohammad
Iqbal
Director, BASIC Bank Ltd
& Chairman, Bangladesh
Small and Cottage
Industries Corporation
Mr. Md. AnwarulIslam, FCMADirector, BASIC Bank
Ltd & ManagingDirectorARS Lube BangladeshLtd
Prof. Dr. Kazi AkhtarHussainDirector, BASIC Bank Ltd
& Chairman Department ofAccounting and InformationSystems, Islami University,Kushtia
Mr. AKM. SajedurRahmanManaging Director,
BASIC Bank LtdHead OfficeDhaka
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Figure: Organogram of BASIC Bank
2.1.3 Management
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CHAIRMANCHAIRMAN
GM
(Audit & Inspection)
(Admin)
GM
(Audit & Inspection)
(Admin)
GM
(Operation)
GM
(Operation)
Personal
Division
Deputy General ManagerDeputy General Manager
Assistant General Manager.Assistant General Manager.
ManagerManager
Deputy ManagerDeputy Manager
Assistant ManagerAssistant Manager
OfficerOfficer
Assistant OfficerAssistant Officer
BOARD OF DIRECTORS
Central
Accounts
Establishment and
Branch ControlIndustrialCredit and
Micro
Credit
Division
InternationalDivision
MANAGING DIRECTORMANAGING DIRECTOR
GM (Administration)GM (Administration)
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The Managing Director heads the management. He is assisted by the General
Managers and Departmental Heads. The Branch Managers of the Bank report
direct to the Managing Director and the Heads of Departments. Thus, quick
decision making is ensured.
2.2 Functional Divisions of Basic Bank
The bank has 33 branches throughout the country. At the head office level there are 12
divisions most of which have more than one functional department which are headed by
a DGM. The names of the divisions are:
Personnel Division (PD).
Establishment & Common Service Division.
Human Resources Development Division.
Secretarys Division (Aboard Division).
General Credit Recovery Division.
Industrial development finance division.
International division.
Control development & coordination division.
Audits an inspection division
Planning, research and statistics division.
Computer system and procedures division.
Law division.
2.3 Human Resource
Human resource is the main driving force and quality human resources are the key to the
success of todays banking business. Keeping the view in mind the Bank maintains the
quality of its human resources by strict recruitment and intensive training. Most
employees are comparatively young in age yet mature in experience. As at end 2008 the
total employee strength was 735.
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2.3.1 Recruitment
The bank follows a strict recruitment policy in order to ensure that only the best
people are recruited. The Bank, so far, has recruited four batches of entry-level
management staff, all of whom have got excellent academic background.
2.3.2 Training
Intensive training program, on a regular basis, is being imparted to employees ofboth managerial and non-managerial levels. The Bank has established its owntraining institute in 2005 with modern facilities. In 2008 the institute arranged 27
training courses and provided training to as many as 517 employees of the bank.In the same year, a total of 602 employees were provided with training in variousfields. Out of them 11 employees participated in training courses held abroad.
CHAPTER-3
THE ESSENTIALS OF PLANNING
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3.1 Organizational Mission
To provide best development and commercial banking services to the common people of
Bangladesh. And to provide special support to the small-scale business enterprises so
that, they can play an important role in the economic development of the country.
3.2 Types of Planning
Ideally, planning begins at the top of the organizational pyramid and filters down. The
rationale for beginning at the top is the need for coordination.
3.2.1 Strategic planning
Determining, how to pursue long-term goals with available resources. Basic Bank
Limited has some strategic planning. They are as follow:
Financial establishment of small units industries and businesses and
facilitate their growth.
Steady and sustainable growth.
Investment in a cautious way.
Adoption of new building technology.
Profit maximization.
Establishing small industries.
3.2.2 Intermediate planning
Determining, how to subunits contribution with allocated resources. The branch
manager planning to improve his/her branch is the intermediate planning. They are
like:
Becoming number one branch.
Good recovery rate
Increasing the gross profit of the branch.
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3.2.3 Operational planning
Determining, how to accomplish specific tasks with available resources. In a
branch of Basic Bank Limited, there are three division, (1) General Banking (2)
Foreign Exchange (3) Credit Division. Every department has a departmental head.
So this department manager planning is operational planning.
3.3 Organizational Objectives
BASIC Bank Limited dedicated their service to the nation through active
financial participation in all segments of economy, small industries, trade,
commerce and service sector etc.
The Banks main manifest to progress as an institution par excellence to
customer satisfaction.
Global Banking has change rapidly and BSIC as worked hard to adapt to these
changes.
To pay a vital role in human development and employment generation.
To undertake project promotion to identify profitable areas of investment.
To search for newer avenues for investment and develop new products to suit
such needs.
To establish linkage with other institution which are engaged in financing micro
enterprise.
BASIC keeping pace with the changing environment.
To corporate and collaborate with institutions entrusted with the responsibility
of promoting and aiding SSI sector.
Deep commitment to the society and growth of national economy.
3.4 Priorities
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Defined as a ranking of goals, objectives, or activities in order of importance, priorities
plat a special role in planning. By listening long-range organizational objectives in order
of their priority, top management prepares to make later decision regarding the allocation
of resources.
3.5 The Planning/Control Cycle
Figure: The Planning/Control Cycle
Basic Bank Limited planning sets in motion activities to accomplish the planned
objectives.
Basic Bank Limited has a monitoring system to magnifying there planning.
Quick monitoring and feedback to top management.
Basic Bank Limited follow the upward communication to there employee for better
planning and controlling.
CHAPTER-4
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SWOT ANALYSIS OF BASIC BANK
4.1 SWOT Analysis
The analysis of strengths, weaknesses, opportunities and threats; commonly referred as
a SWOT analysis is very important to evaluate the performance of any company. It can
be categorized into internal and external analyses, where internal analysis contains
strength and weakness, and external analysis contains opportunity and threat. Here, we
have made an endeavor to analyze the SWOT of BASIC Bank in a very limited scope.
Figure: The SWOT Analysis Chart
4.2 Strength
4.2.1 Bank Assets
The main strength of the Bank as identified by us is its assets. During the year
2008, total assets of the bank increased by 20.333% to taka 46,651.53 9 million
from taka 38,773.91 million of 2007.
SWOT Analysis
Internal Analysis
External Analysis
Strength Weakness Opportunity Threats
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4.2.2 High Recovery Rate
The recovery percentage of loan of the Bank in the year 2006, 2007 and 2008 was
86%, 87% and 88% respectively. Thus, the Bank has a better recovery compared
to that of other institutions engaged in large loan and commercial financing. In loan
recovery proceedings, BASIC has used the strategy of offering a 50 percentinterest remission as an inducement for settlement after a decision is rendered
but before execution.
4.3 Weakness
4.3.1 Lack of Modern Banking Facilities
Lack of modern banking facilities is identified as the biggest weakness of the
Bank. The clients of the Bank are deprived of modern banking facilities like online
banking, internet banking, ATM service etc.
4.3.2 Insufficient Number of Branches
Though the Bank has got 33 branches, still it is felt that it is insufficient. As one of
their goals is to employ funds with a special emphasis on small-scale industries,
they should have more number of branches allover the country.
4.4 Opportunities
4.4.1 Industry and Services
The industry sector, lifted by export-oriented manufacturing, robust performance.
The services sector is also expanding in line with rapid growth in industry.
Manufacturing expansion is supported by a turnaround in manufacturing exports,
industrial imports and expansion of industrial credit. But emerging infrastructure
constraints, particularly power shortages, held back the growth potential in
manufacturing. The output of small-scale manufacturing also registered strong
performance with 11.4% growth; the increase covered food items, textiles, leather,
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apparel, wood products, paper products, chemicals, metal products and
nonmetallic mineral products. Production of non-manufacturing items also
increased with gas production increasing by about 9.3% and electricity by 5.1%.
4.4.2 Opportunity of the Banking
The following opportunity may be availed by the BASIC bank:
Mortgage Services
Consumer Lending Services
Credit Card Services
Auto Finance
Banking Services
Insurance
4.5 Threats
4.5.1 Threat to Industries
Threat to industries is also considered as a threat to BASIC Bank as small
industries are the main focus of the Bank. The global recession has curved the
growth of our export-oriented industries. The political instability and present power
crisis have badly infected our industrial sector. The SME scheme of other banks
also a potential threat to the BASIC bank.
5.5.2 Default Culture
Default culture is very much familiar in our country. For a bank, it is very harmful.
So the management should be aware of this event and should take some
preventive measure to overcome this problem.
4.5.3 Banking vs. Technology
Banking and Financial Business can not survive without the support of technology.
Banking efficiency only comes from progress of technology. The absence of
modern banking facilities which are mainly technology based are already identified
as a weakness of the bank. This may divert the clients of the Bank to other banks.
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CHAPTER-5
Conclusion
5.0 ConclusionBASIC is unique in terms of constitution, its mandate, its objectives and modus operandi
it is a blend of commercial and development ideology. It was established as the policy
makers of the country identified the requirement of a financial Institution in the private
sector for financing Small Sector Industries (SSI). Through this institution has established
it self as a performing body in the market bur still BASIC Bank is expected to develop and
maintain strong competitive edge in this specialized sector in the years ahead.
The Banks specialization is development of trade, business and other commercial
activities. It covers the full range of services to the exporters and importers extending all
sort of facilities like cash credit, export credit limit, short term loan, local and foreign and
bill purchase option. The Basic Bank launched the Micro Credit program in 1994. The
Bank also plans to maintain its focus on managing capital and costs to maximize
shareholders' value. In this environment, The Bank expects to make further gains in
revenue, income and return on capital.
Although Government of Bangladesh is the sole shareholder of this Bank, but the way of
thinking ahead is quite inspiring and goal oriented. BASIC is a trend setter in the banking
industry. Continual improvement in different segments with a proactive attitude can make
a difference. Online Banking is mandatory to cope with todays dynamic economy and
BASIC is heading towards the implementation of Online Banking within two years from
now.
BASIC is redefining the traditional banking concepts and transforming it into relationship
banking. BASIC considers the Borrower as clients. The mutual relationship is the
essence of long term success in the banking industry. The ever increasing competitive
nature of banking business determines the direction of the bank. Sustainability in better
performance is the prime focus in BASIC Bank.
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