final sme bank

7/31/2019 Final SME Bank

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ORGANIZATION PART

a. Historical Background of Prime Bank Limited

The importance of financial intermediaries in the development of the overall economy of country

cannot be described in short. From the inception of the civilization the banking sector dominate

the economic development of a country by mobilizing the saving from the general people and

channeling those saving for investment and thus economic development and growth.

The importance of commercial banks after the ravage of the liberation war to develop a better

economy was severally needed and it is needed now and will be required in future also. In time

to time Government of Bangladesh agreed to permit the private commercial banking in thecountry.

To fulfill the demand as well as to improve the commercial banking service in our country, The

Prime Bank Limited is scheduled bank that was incorporated under the Companies Act 1994,

started its operation on April 17, 1995 with a target to play the vital role on the socio-economic

development of the country. It availed its registration as a banking company under the Banking

Company Act 1993 from the Bangladesh Bank dated February 12, 1995. They started to make

profit from the inception year. It was made possible for its management and the leadership of the

first Managing Director Mr. Lutfur Rahman Sharker, Ex -Governor, Bangladesh Bank.

Within a short time the bank has been successful in positioning itself as progressive and dynamic

financial institution in the country. The is now widely acclaimed by the business community,

from small entrepreneur to big merchant and conglomerates, including top rated corporate and

foreign investors, for modern and innovative ideas and financial solution. Thus within this short

time it has been able to create an unique image for itself and earned significant solution in thebanking sector of the country as a bank with a difference.

The emergence of the Prime Bank Limited is an important event in the c ountry s financial sector

at the inception of financial sector reform. The authorized capital of PBL is Tk. 1000 million and

paid up capital of the same bank is Tk. 400 million. The First Chairman of the Bank was Mr.


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Abdul Gani and the present one is Mr. Md. Mohammad Aminul Hoque. Now the MD of Prime

Bank Limited is Mr. Kazi Abdul Mazid followed by the first Managing Director was Mr. Lutfur

Rahman Sharker, Ex -Governor, Bangladesh Bank. The bank has made a reasonable progress

due to its visionary management people and its appropriate policy and implementation. The

bank holds the first position in the CAMEL rating published by Bangladesh Bank this year.

b. primary & secondary data

For preparing this paper, I used both Primary and Secondary data.

Primary data

Most of the necessary information has been collected by from the personal observation, Phone

calls.

Secondary data

The details of the bank and the selected department have been collected from secondary sources.

The relevant information of other private banks has been collected from annual reports, web

pages and other published documents

c. Focus of PBL

PBL s focus is to provide one counter service to our clients covering:

Commercial Banking (Deposit Accounts) Consumer Banking (Retail Baking)- Traveler Cheques Foreign & Inland Remittances Corporate Banking Asset & liability management Liquidity & capital Resources Management Information technology


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Human Resources

d. Mission

To build Prime Bank Limited into an efficient, market-driven, customer focused institution with

good corporate governance structure.

Continuous improvement of our business policies, procedure and efficiency through integration

of technology at all levels.

e. Vision

To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital adequacy,

asset quality, sound management and profitability having strong liquidity.

f. Objectives of Prime Bank Limited

The objective of the Prime Bank Limited is specific and targeted to its vision and to positionitself in the mindset of the people as a bank with difference . The objectives of the Prime Bank

Limited are as follows:

To mobilize the savings and channeling it out as loan or advance as the company

approve.

To establish, maintain, carry on, transact and undertake all kinds of investment and

financial business including underwriting, managing and distributing the issue of stocks,

debentures, and other securities.

To finance the international trade both in import and export. To carry on the foreign exchange business, including buying and selling of foreign

currency, traveler s cheques issuing, international credit card issuance etc.


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To develop the standard of living of the limited income group by providing Consumer

Credit.

To finance the industry, trade and commerce in both the conventional way and by

offering customer friendly credit service.

To encourage the new entrepreneurs for investment and thus to develop the country s

industry sector and contribute to the economic development.

g. CURRENT SITUATION :

Prime Bank Limited provides various banking services in Bangladesh. The company offers

retail, corporate, Islamic, small and medium enterprise (SME), NRB, and off-shore banking

services, as well as treasury services. Its retail banking services include deposits, loans, credit

cards, Internet and SMS banking, and locker services; corporate banking services comprise

general credit, export finance, structured finance, and lease finance; and Islamic banking services

consist of deposits, investments, foreign trade finance, and remittance and funds transfer. The

company s SME banking services include capital, working capital, seasonal, double, and women

entrepreneurs loans, as well as agricultural banking; NRB banking services comprise account

facilities, exchange houses, and wire transfer facilities; and treasury services consist of moneymarket, primary dealer and fixed income, asset liability management, and foreign exchange

services. It also offers merchant banking services, such as issue management, portfolio

management, underwriting, and corporate advisory services; and stock broker/dealer services in

relation to shares and securities dealings. In addition, the company provides remittance services

in Singapore and the United Kingdom. As of December 31, 2010, it had 94 branches, 14 SME

centers, 2 booths, and 3 off-shore banking units. Prime Bank Limited was founded in 1995 and is

headquartered in Dhaka, Bangladesh. Prime Bank Ltd. reported consolidated and standalone

earnings results for the third quarter and year to date ended September 30, 2011. For the quarter,

on consolidated basis, the company reported net profit after taxation of BDT 908,591,344 or

BDT 1.17 earnings per share on total operating income of BDT 2,787,092,662 compared to net

profit after taxation of BDT 823,568,172 or BDT 1.06 earnings per share on total operating

income of BDT 2,881,251,269 for the corresponding period of last year. Profit before provision


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was BDT 1,593,425,159 against BDT 1,898,563,657 for the comparable period of last year. For

the year to date, on consolidated basis, the company reported net profit after taxation of BDT

2,508,926,150 or BDT 3.22 earnings per share on total operating income of BDT 8,562,998,015

compared to net profit after taxation of BDT 2,326,467,402 or BDT 2.98 earnings per share on

total operating income of BDT 7,739,910,854 for the corresponding period of last year. Profit

before provision was BDT 5,329,102,998 against BDT 4,931,462,887 for the comparable period

of last year. Net cash from operating activities was BDT 8,011,970,318 against BDT

2,121,356,913 of prior year period. Purchase of property, plant and equipment was BDT

2,270,198,423 against BDT 420,154,661 of previous year period. For the quarter, on standalone

basis, the company reported net profit after taxation of BDT 793,480,517 or BDT 1.02 earnings

per share on total operating income of BDT 2,487,524,582 compared to net profit after taxation

of BDT 546,420,036 or BDT 0.70 earnings per share on total operating income of BDT2,359,641,522 for the comparable period of last year. Profit before provision was BDT

1,338,480,517 against BDT 1,436,420,036 for the comparable period of last year. For the year to

date, on standalone basis, the company reported net profit after taxation of BDT 2,218,997,659

or BDT 2.85 earnings per share on total operating income of BDT 7,767,916,428 compared to

net profit after taxation of BDT 1,902,112,672 or BDT 2.44 earnings per share on total operating

income of BDT 7,038,965,013 for the comparable period of last year. Profit before provision was

BDT 4,653,997,659 against BDT 4,322,112,672 for the comparable period of last year. Net cash

from operating activities was BDT 7,711,071,994 against BDT 1,781,089,488 of prior year

period. Purchase of property, plant and equipment was BDT 2,257,991,234 against BDT

372,619,729 of previous year period.

i. Organizational Activities

Marketing

Prime Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking services

covering all segments of society within the framework of Banking Company Act and rules and

regulations laid down by our central bank. Diversification of products and services include


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Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture,

and real state to software.

Six categories of new products- Prime Banks looking for an Addition

In New Product Development process usually the possible product developments are:

a. New-to-the-world products

b. New product lines

c. Additions to existing service lines

d. Improvements and revisions of existing products

e. Repositioning

f. Cost reductions

Prime Bank has followed the Addition to their existing product lines. They have followed the

responsiveness of the In House Online Banking to bring to the customers in this regard. Also

changing the motive of the innovation in their existing banking services could bring them a

meaningful fruit to their operation.

Marketing Division

Marketing Division is involved in two types of Marketing.

Asset marketing : Marketing of assets refers to marketing of various kinds of loans and advances.

In-order to perform this job, they often visits dome large organizations and attract then to borrow

from the Bank to finance profitable ventures.

Liability Marketing : The process of Liability marketing is more of less same as Asset marketing.

In this case different organizations having excess funds are solicited to deposit their excess fund

to the Bank. If the amount of money to be deposited is large, the Banks sometimes offer a bithigher price than the prevailing market rate.

Finance:

Prime Bank Limited provides various banking services in Bangladesh. The company offers

retail, corporate, Islamic, small and medium enterprise (SME), NRB, and off-shore banking


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services, as well as treasury services. Its retail banking services include deposits, loans, credit

cards, Internet and SMS banking, and locker services; corporate banking services comprise

general credit, export finance, structured finance, and lease finance; and Islamic banking services

consist of deposits, investments, foreign trade finance, and remittance and funds transfer. The

company s SME banking servi ces include capital, working capital, seasonal, double, and women

entrepreneurs loans, as well as agricultural banking; NRB banking services comprise account

facilities, exchange houses, and wire transfer facilities; and treasury services consist of money

market, primary dealer and fixed income, asset liability management, and foreign exchange

services. It also offers merchant banking services, such as issue management, portfolio

management, underwriting, and corporate advisory services; and stock broker/dealer services in

relation to shares and securities dealings. In addition, the company provides remittance services

in Singapore and the United Kingdom. As of December 31, 2010, it had 94 branches, 14 SMEcenters, 2 booths, and 3 off-shore banking units. Prime Bank Limited was founded in 1995 and is

headquartered in Dhaka, Bangladesh.

Financial Administration Division (FAD)

Financials Administration Division mainly deals with the account side of the Bank. It deals with

all the Head Office transactions with bank and its Branches and all there are controlled under the

following heads:

i. Income, Expenditure Posting: All income and expenditures are maintained and posted under

these heads.

ii. Cash Section: cash section generally handles cash expenditure for office operations and

miscellaneous payments.

iii. Bills sections: this section is responsible for inland bills only.

iv. Salary & Wages of the Employee: Salary and wages of the Head Office executives, Officers 7Employees are given in this department.

v. Maintenance of Employee Provident Fund: Employee provident fund accounts are maintained

here.

Performance at a Glance :


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Key Financial Data & Key Ratios

Particulars 2006 2007 2008 2009 2010

Interest income 5199 7170 9096 10831 12,023

Interest expenses 3698 5267 7126 8426 7,790

Net interest income 1500 1903 1970 2405 4,234

Non-interest income 1732 2913 3808 5790 5,447

Non-interest Expenses 1101 1559 1931 2907 3,603

Net Non-interest income 631 1354 1877 2883 1,844

Profit before provision and tax 2131 3257 3847 5289 6,078

Provision for loans and assets 390 910 1384 700 540

Profit after provision before tax 1741 2347 2463 4589 5,538Tax including deferred tax 689 946 1232 1805 2,535

Profit after tax 1052 1401 1232 2784 3,003

Balance Sheet

Authorized Capital 4000 4000 10000 10000 10,000

Paid-up Capital 1750 2275 2844 3555 5,776

Total Shareholder's equity 3860 5273 6697 11745 16,769

Deposits 54724 70512 88021 106956 124,519Long-term liabilities 16877 15267 31044 38209 47,918

Loans and advances 45010 57683 75156 89252 111,167

Investments 7844 12698 23103 19934 20,484

Property,Plant and Equipment 412 660 1375 1573 1,692

Earning Assets 55458 72798 100261 109905 132,688

Net current assets 5286 1338 9962 3435 7,349

Total assets 60899 79588 110437 124806 152,797

Current ratio 0.88 0.97 0.88 0.96 1.09

Equity Debt ratio 7.00% 7.10% 6.45% 10.39% 12.33

Other Business


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Import 52639 70617 91424 96452 147,704

Export 41801 51316 68550 76097 106,943

Remittance 15050 15905 22669 26447 28,433

Guarantee Business 5386 7033 10010 13673 29,000

Capital Measures

Total risk weighted assets 44324 55485 72253 82710 183,747

Core capital (Tier-I) 3860 5261 6265 9057 15,793

Supplementary capital (Tier-II) 549 1122 1594 3112 5,692

Total Capital 4409 6383 7859 12168 21,485

Tier-I capital ratio 8.71% 9.50% 8.67% 10.95% 8.60

Tier-II capital ratio 1.24% 2.00% 2.21% 3.76% 3.09

Total capital ratio 9.95% 11.50% 10.88% 14.71% 11.69

Credit Quality

Non performing loans (NPLs) 367 777 1323 1149 1,368

NPLs to total loans and advances(%) 0.82% 1.35% 1.76% 1.29% 1.23

Provision for unclassified loans 545 895 1040 1303 1,463

Provision for classified loans 309 478 734 631 642

Share Information

Market price per share (Taka) 529 924 540 653 945

No. of shares outstanding(Million) 17.50 22.75 28.44 35.55 57.76

No. of shareholders (actual) 5262 7368 9180 10339 19,748

Earnings per share (Taka) 60.11 61.57 43.32 78.33 56.90

Dividend 30% 35% 25% 40% 40%

Cash 0.00% 10.00% 0.00% 10% 5%

Bonus 30% 25% 25% 30% 35%

Effective dividend ratio 33.33% 40.00% 27.78% 44.44% 49.52

Market capitalization 9253 21021 15349 23212 54,572

Net asset value per share (Taka) 221 232 235 330 290

Price earning ratio (times) 8.80 15.01 12.46 8.34 16.60

Key Financial Ratios


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Operating Performance Ratio

Net interest margin on average earning

assets3.23% 2.97% 2.28% 2.31% 3.49

Net non-interest margin on average

earning assets1.36% 2.11% 2.17% 2.72% 1.52

Earning base in assets (average) 90.71% 91.29% 91.07% 89.34% 87.39

Cost income raito 34.07% 32.37% 33.42% 35.47% 37.22

Credit deposit raito 82.25% 81.81% 85.38% 83.45% 89.28

Cost of funds on average deposits 8.15% 8.41% 8.55% 8.41% 6.39

Yield on average advance 13.52% 13.96% 13.69% 13.18% 11.92

Return on average assets 2.05% 1.99% 1.30% 2.37% 2.16

Return on average equity 31.55% 30.68% 20.58% 30.19% 21.06

Other information

No of Branches 50 61 70 84 94

No of SME - - - 5 14

No of employees 1172 1400 1551 1844 2,139

No of foreign correspondents 517 553 518 602 621

Average earning assets 46448 64128 86530 105083 121,296

Average total assets 51203 70244 95013 117622 138,802

Average depostis 45373 62618 79266 97488 115,737

Average advance 38463 51347 66420 82204 100,210

Average equity 3334 4566 5985 9221 14,257

Table-2


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Chart-2

j. Business Activities Of PBL:

The Principal activities of the bank were banking and related businesses. The banking businesses

included deposits taking, extending credit to corporate organization, retail and small & mediumenterprises, trade financing, project financing, international credit card etc. Prime Bank Limited

provides a full range of products and services to its customers, some of which are mentioned

below with a brief overview of the major business activities.

Retail Banking:


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As a part of risk diversification strategy PBL expended the lending activities in this sector during

2006. The growth rate of PBL s consumer financing was 38% during this year. The loan

schemes offered by the bank include Home Loan, Loan against Salary, Marriage Loan, Car

Loan, Hospitalization Loan, Education Loan, Doctors Loan, Travel Loan etc.

SME Lending:

Job creation is essential and it must come from Small and Medium Enterprise that will ultimately

dominate the private sector. During 2006 bank s Stra tegy was focused on customer convenience.

The Bank provided working capital loans to suppliers or dealers of large corporations or clusters

of small exporters of non traditional items. Outstanding loan of SME is Tk.437 million. The

growth rate of PBL s SME Lending was 41% during this year.

Corporate Credit:

PBL s strategy is to provide comprehensive service to the clients of this segment who are large

and medium size corporate customers with expertise in trade finance and related services.

Besides trade finance bank are providing working capital finance, project finance and arranging

syndication for our corporate clients. Syndication and structured Finance Unit of the Bank

strengthened its footstep in the consortium financial market and arranged a number of

syndication deals for its corporate clients.

Islamic Banking:

For the development of Islamic Banking Business, 2006 was also a commendable year. It has

been observed that compliance of Shariah has improved in 2006 as compared to the preceding

years. According to their advice Islamic Banking operation of the bank has been separated from

the operation of Conventional Banking and shown separately in the bank s financial statement. It

is found that the investment and deposits grew by 38% and 89% respectively in the year 2006.

The operating profit of Islamic Banking Branches grew by 45% during the Year.

Credit Card:

In the year of 2005, Prime Bank Ltd has launched VISA. Before that PBL started its credit card

operation in 1999 by introducing Master Card. Now PBL has become the first local Bank of the

country to achieve principal membership of both the worldwide accepted plastic money network

i.e. Master Card and VISA. PBL has redesigned the credit card facility by providing the


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incentive of Free Life Insurance Coverage for their valued cardholders to mitigate the financial

risk.

Custodial Service:

PBL equator fulfills its strategic commitment to provide custody and clearing services. Equator sfocuses are on the following:

Commitment to quality Dedication to customer needs

Sustained investment in people and systems

International Trade Management:

This division is operational throughout the group and PBL s core strength is trade finance and

services. With an experience, Prime Bank has developed knowledge of trade finance, which is

world class. Principle services to importers include imports letter of credit, import bills for

collection and back to back letters of credit facilities. Services provide to exporters include

export letters of credit, direct export bills, bonds, and guarantees.

Cash Management:

Prime Bank recognizes the importance of cash management to corporate and financial

institutional customers, and offers a comprehensive range of services and liquidity management.

Institutional Banking:

Prime Bank Limited provides a wide range of services to institutional clients, commercial,

merchant and central banks; brokers and dealers; insurance companies; funds and managers, and

others. It provides relationship managers who are close to their customers and speak local

language. This wide network of institutional banking facilities includes transaction, introduction,

problem solving and renders advice and guidelines on local trading condition.

Treasury:

Treasury operations had been consideration as an important avenue for income generation

purpose within Head Office. In fact, in the past, income from treasury operation was quite

sizable and significant to the total income generated by the bank. The treasury division publishes


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daily and weekly currency newsletters, which provide analyses of currency trends and related

issues. Seminars and workshops are conducted for customers from time to time on foreign

exchange related topics. Prime Bank is one of the first local banks in Bangladesh to integrate

treasury dealings of local money market and foreign currency under one Treasury umbrella. The

bank has handled significant volumes of treasury over the last several years. Prime Bank's

Dealing Room is connected with automated Reuters Terminal facility thus enabling the bank to

provide forward/future facilities to its corporate clients at a very competitive rate.

Foreign Exchange Business:

Over the years, foreign trade operations of the bank played a pivotal role in the overall business

development of the bank. The bank has established relationship with as many as 110 new foreign

correspondents abroad thereby raising the total number of correspondents to 553. The total

import & export business handled by the bank during the year 2006 was Tk. 70,616.80 million

and Tk. 51,316.40 million. The growth rate was 46%. The bank has also entered into remittance

arrangements with several banks and exchange houses and expects to handle increased volume

of remittance business over the near future.

Merchant Banking:

The Bank s operation in this sector was limited to Underwriting, Portfolio Management and

Banker to the Issue functions. The compulsory requirement for opening BO account for share

trading has increased the demand for opening BO account.

Online Branch Banking:

The bank has set up a Wide Area Network (WAN) across the country to provide online branch

banking facility to its valued clients. Under this scheme, clients of any branch shall be able to do

banking transaction at other branches of the bank.

Under this system a client will be able to do following type of transactions:

Cash withdrawal from his/her account at any branch of the bank.

Cash deposit in his/her account at any branch of the bank irrespective of the location.

Cash deposit in other s account at any branch of the bank irrespective of the location.

Transfer of money from his/her account with any branch of the bank.


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At present 24 (Twenty Four) branches are under online. Clients can easily deposit and withdraw

money from those online branches in a moment.

SWIFT:

Prime Bank Limited is one of the first few Bangladeshi banks, which have become member of SWIFT (Society for Worldwide Inter bank Financial Telecommunication) in 1999. SWIFT is a

member owned co operative, which provides a fast and accurate communication network for

financial transactions such as Letters of Credit, Fund Transfer etc. By becoming a member of

SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user

institutions in 150 countries around the world.

Information Technology in Banking Operation:

Prime Bank Limited adopted automation in banking operation from the first day of its operation.

The main objective of this automation is to provide efficient and prompt services to the bank's

clients. At present, all the branches of the bank are computerized. At branch level, the bank is

using server based multi user software under UNIX operating system to provide best security of

automation.

Profitability and Shareholder Satisfaction:

The bank had been one of the most profitable in the banking sector. The bank's return on assets

(ROA) was 1.99% in the year 2006. Even though the capital market of the country has been

suffering over the last few yea

k. Products and Services of PBL

Prime Bank Limited offers various kinds of deposit products and loan schemes. The bank also

has highly qualified professional staff members who have the capability to manage and meet all

the requirements of the bank. Every account is assigned to an account manager who personally

takes care of it and is available for discussion and inquiries, whether one writes, telephones or

calls.

l. DEPOSIT AND LOAN SCHEMES


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Deposit Schemes Fixed Deposit Scheme

Contributory Saving Scheme

Monthly Benefit Deposit Scheme

Special Deposit Scheme

Education Savings Scheme

Prime Bank Monetary Scheme

Savings Deposit Account

STD Account

Multi Currency Account

Foreign Currency Deposit Account

Non Resident Taka Account

NFCD (Non Resident Foreign Currency

Deposit Account)

NITA (Non Resident Investor s Taka

Account

Table-3

Loan Schemes:

General Loan Scheme Consumer Credit Scheme Lease Finance Hire Purchase Small and Medium Enterprises Credit

Scheme

Financing Schemes for Contractors

Computer Software Financing Scheme Prime Bank master Card Credit Card Working Capital Finance Import Financing Export Financing


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House Building Loan & Apartment Loan

Scheme

Advance against Shares

Custodial Services for investors (both

individual & institutional) investing in

through Stock exchange

One stop services for payment of utility

bills.

Credit card

Table-4

m. Management Hierarchy:

Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice president

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice president

First Assistant Vice president

Senior Executive Officer

Executive Officer

Principal Officer

Senior Officer

Management Trainee Officer

Junior Officer

Table-5


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n. Departments of PBL

Human Resources management

Human Resources Division: HRD performs all kind of administrative and personnel related

matters. The broad functions of the division are as follows:i. Selecting & Recruitment of new Personnel.

ii. Prepare all formalities regarding appointment and joining of the successful candidates.

iii. Placement of Manpower.

iv. Deal with the transfer, promotion and leave of the employees.

v. Training & Development.

vi. Termination and retrenchment of the employees.

vii. Keeping records and personal file of every employee of the Bank.

viii. Employee welfare fund running.

ix. Arranges workshops & trainings for employee & executives.

HR Vision: Managing an organizational culture where employees enjoy working with pride and

are strongly motivated to gain and maintain professional excellence to convert the human

resource into human capital.

Open and Fair Evaluation System for Employees:

We manage an evaluation system that clearly links individual performance to our business goals

and priorities. Each employee has well-defined reporting relationships. Self-rating is as a part of

our evaluation process which we promote always. We manage an evaluation system based on the

records of periodic counseling and achievements of the employees tracked over the year.For

higher objectivity and openness, besides the immediate supervisor, each employee the next

higher level (reviewer).

Competitive Compensation Package:

We offer a rewarding culture and higher compensation and benefits package in a way which

always match with our employees desires including basic sa lary, provident fund, gratuity,

housing allowance, medical allowance, conveyance allowance, group insurance, employees


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welfare fund, leave fair assistance and other admissible facilities those match individual job role

and designation as per banking policy.

Performance Bonus:

Every year we pay for the high performers when company hits a certain level of profitability. It

is also based some other additional criteria like the team's success and the individual's. We create

profiles of top performers and make these visible company-wide. It will encourage others to put

in their best, thereby creating a competitive environment within the company.

IT department

Prime Bank Limited (PBL) undertook a project with BASIS (Bangladesh Association of

Software and Information Services) to award the best IT uses by Bangladeshi companies. PBL

and BASIS organized IT award-giving ceremony in this regard. The award Ceremony was heldon 30th November 2005, which was the day before last day of BASIS SOFEXP02005

(November 27-December 01, 2005). This was a gala evening (with dinner and cultural program)

attended by around 700 dignitaries including government high officials & policy makers,

corporate heads, representatives from development agencies, IT policy makers, academicians

and the IT industry members. In this regards, PBL's contribution in supporting this event was

50% of the estimated cost with Tk.6.25 Lac.

Research & Development:

Job Responsibility Academic Qualification Job Experience Job Requirements Salary

Apply Instruction

Operations and Logistic:

This Division was formerly known as General Services Division (GSD). Their main function

relates to procurements and supply of all tangible goods and services to the Branches as well as

Head office of Prime Bank Limited. This includes


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I. Every tangible functions of Branch opening such as making lease agreement, interior

decoration etc.

ii. Print all security papers and Bank Stationeries.

iii. Distribution of these stationeries to the branch

IV. Purchase and distribute all kinds of bank s furniture and fixtures.

v. Receives demand of cars, vehicles, telephones etc from branched and different divisions in

head office and arrange, purchase and delivery of it to the concerned person / Branch.

vi. Install & maintain different facilities in the Branches.

o. SWOT Analysis:

Strengths Favorable reputation. Provides its customers excellent and

consistent quality in every service

Quality service with relatively lower

price.

Friendly interactive and informal

working environment

Weaknesses Pay structure have a big discrimination

within officers and executives.

The employees are burdened with extra

work loads and work slate hours.

Pay order processing is not satisfactory. Incoming Mail processing is slow

Opportunities Can recruit experienced, efficient and

knowledgeable work force as it offers

good working environment.

The Bank will provide ATM card to all


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of its clients to avail 24 hour modern

banking facility.

More commercial branches. The Bank has already introduced online

modern facilities to its customer.

Threats Upcoming private local banks. Comparatively high salary margin. Challenge of new entries. Immerge of the multinational banks and

their rapid expansion.

Table-6

2. REPORT

INTRODUCTION

a. Definition of SME

An SME is defined as, A firm managed in a personalized way by its owners or partners, which

has only a small share of its market and is not sufficiently large to have access to the stock

exchange for raising capital. SMEs ordinarily have few accesses to formal channels of finance

and depend primarily upon savings of their owners, their families & friends. Consequently, most

SMEs are sole proprietorships & partnerships. As with all definitions, this one is not perfect.

Depending on context therefore definition of an SME will vary.

Despite the common features globally, countries do not use the same definition for classifying

their SME sector. Also, a universal definition does not appear feasible or desirable. SMEs have

been defined against various criteria. The three parameters that are generally applied by the

Governments to define SMEs are:

Capital investment in plant and machinery


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Number of workers employed

Volume of production or turnover of business

Definition of SME as Per DBBL

Based on the bank s perspective of SME and its stumbling blocks and considering the context of

Socio-economic status of our country SME investments become:

Small & Medium investment BDT 0.3 million to BDT 5.0 million

In recent days the Small and Medium Enterprise (SME) Financing has become an important area

for Commercial Banks in Bangladesh. .To align its corporate policy with the regulation of

Central Bank, banks have become more concerned about SME and opened windows to conduct

business in this particular area. So PBL opened SME windows in 2001. SME sector help to

alleviate poverty, increase income level of rural people and promote agro-industrial linkage in

Bangladesh.

b. IMPORTANCE OF SME:

The main focus of PBL is to develop human and economic position of a country. Its function is

not limited only to providing and recovering of loan but also try to develop the economy of a

country.

So reasons for this program from the viewpoint of PBL:


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Graph-3

Support Small Enterprise:

The small enterprise, which requires Maximum TK. 500,000/-, but they have no easy access to

the banks/financial institutions. For example: In case of Smart SME small shop financing

scheme Landlord has to be agreeable to sign tripartite agreement & comply other required

formalities in case of leased property / position holding.

Economic Development:

Economic development of a country largely depends on the small and medium seal enterprises.

Such as, if we analyze the development history of Japan, the development of small & medium

scale enterprises expedite the development of that country.

Employment Generation:

The bank gearing employment opportunities by two ways: Firstly, by providing loan to the small

enterprises expanding, these businesses require more workers. Secondly, Small & Medium

SME

EmploymentGeneration

Support SmallEnterprise

EconomicDevelopment

Spread theExperience


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Enterprise (SME) program requires educated and energetic people to provide support to

entrepreneurs.

Spread the Experience:

Another reason of PBL is to spread the knowledge on the importance of SME banking regarding

various businesses. The customer services officer share their knowledge from various businesses

and tries to help the entrepreneurs who have shortage of the gathered knowledge.

Portfolio Size of different banks in SME Sector (TK in Crore )

Serial NO Name of the Bank Portfolio Size

1 BRAC Bank Limited 950.00

2 Eastern Bank Ltd 300.00

3 Prime Bank Limited 108.44

4 Dutch Bangla Bank Limited 16.38

5 Mercantile Bank Limited 6.63

6 Dhaka Bank Ltd 5.72

Table-7


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Chart: 4

Source: Annual Reports of Prime Bank Ltd., Dhaka Bank Ltd., Eastern Bank Ltd.,

Mercantile Bank Ltd., Dutch-Bangla Bank Ltd. and BRAC Bank Ltd. 2007

From the table we can see that the BRAC bank has the highest investment in the SME sector

followed by Eastern Bank Ltd. in second position. While the Prime Bank Ltd., Dutch-Bangla

Bank Ltd., Mercantile Bank Ltd. and Dhaka Bank Ltd. are third, forth, fifth and sixth position.

d. Types of SME Banking:

Sahaj Rin (Collateral Free Loan)

Sahaj Rin provides you an easy to access loan facility to successfully grow your small & medium

enterprise business.

Key Features:

Any justifiable business purpose for small & medium enterprise customers Investment amount -Tk 2 lac to Tk 6 lac Tenure - Maximum 36 months


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Eligibility:

Age: At least 21 years Any entrepreneur having the experience of successfully managing the business for at

least two years may apply for the loan.

Required Documents:

At least 2 (two) years old trade license. Special license (if applicable) Notarized partnership deed/registered by Sub Register Officer (in case of partnership)

Memorandum and Articles of Association in case of Private Limited Co. Passport/National voter ID/ ward commissioner/UP chairman certificate of the proprietor/

Partner.

Photo of the Proprietor/ Partners and Guarantors. Hypothecation of machineries, equipments, vehicles, inventories.

Sampad Rin (Capital Loan)

Sampad Rin offers you the loan facility to augment capital base for your business expansion,

purchase of new business space or expansion of existing outlets and capital machineries and also

to purchase light or heavy vehicles for business use.

Key Features:

Loan facility for business expansion, purchase of new business space or expansion of

existing outlets and capital machineries and also to purchase light or heavy vehicles for

business use.

Investment amount - Tk 2 lac to Tk 50 lac for small enterprise customers and Tk 2 lac to

Tk 300 lac for medium enterprise customers

Tenure- Maximum 60 months and grace period may be allowed maximum 6 months


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Eligibility:


least two years may apply for the loan

Required Documents:

Trade license - at least 1 (one) year old Special license ( if applicable) Notarized partnership deed/registered by Sub Register Officer (in case of partnership) Memorandum and Articles of Association in case of Private Limited Co. Passport/National voter ID/ ward commissioner/UP chairman certificate of the proprietor/

Partner.

Photo of the proprietor/ Partners and guarantors. Last 12 months bank statement of transactional account.

Chalti Rin (Working Capital Loan)

Chalti Rin offers you the loan facility to increase the working capital base by financing day to

day business of your Small and Medium Enterprise (SME) business

Key Features:

Any justifiable working capital need for small and medium enterprise customers. Investment amount - Tk. 2 lac to Tk 50 lac for small enterprise customers and Tk. 2

lac to Tk 300 lac for small and medium enterprise customers Tenure- Maximum 12 months for continuous loan and Maximum 60 months for term

loan.

Eligibility:


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Required Documents:

Trade license - at least 1 (one) year old Special license (if applicable) Notarized partnership deed/registered by Sub Register Officer (in case of partnership) Memorandum and Articles of Association in case of Private Limited Co. Passport/National voter ID/ward commissioner/UP chairman certificate of the proprietor /

partner / directors. Photo of the proprietor/Partners and guarantors. Last 12 months bank statement of transactional account. Statement of all active bank loans (if any). Registered mortgage of property/ownership of the space/possession right purchased in

Bank s na me.

Hypothecation of machineries, equipment, vehicles, inventories. Lien of cash collateral (FDR) and other encashable financial instrument.

Moushami Rin (Seasonal Loan)

Moushami Rin offers you the loan facility to grab the additional opportunities in various

festivals and seasonal events (i.e. Eids, Pujas, Christmas, Bengali and English New Year etc.) by

organizing special business arrangements to increase sales and profit for your SME business.

Key Features:

To meet short term financing need of any existing small and medium enterprise

customers


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Investment amount -Maximum Tk 50 lac for SE customers and maximum Tk 300 lac for

medium enterprise customers

Tenure- Maximum 6 months

Eligibility:



Required Documents:

Trade license - at least 2 (two) year old Special license (if applicable) Notarized partnership deed/registered by Sub Register Officer (in case of partnership) Memorandum and Articles of Association in case of Private Limited Co. Passport/National voter ID/ward commissioner/UP chairman certificate of the proprietor /

partner / directors.

Photo of the proprietor/Partners and guarantors. Last 12 months bank statement of transactional account. Statement of all active bank loans (if any). Registered mortgage of property/ownership of the space/possession right purchased in

Bank s nam e.

Hypothecation of machineries, equipment, vehicles, inventories. Lien of cash collateral (FDR) and other encashable financial instrument

Digun Rin (Double Loan)

Prime Bank's Digun Rin helps you to avoid encashing your long held saving and provide youthe required capital for your business operation. Under this SME product, if you offer any

encashable security i.e. FDR, you will be entitled to receive double amount of the value of

security provided.

Key Features:


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Special license (if applicable) Notarized partnership deed/registered by Sub Register Officer (in case of partnership) Memorandum and Articles of Association in case of Private Limited Co. Passport/National voter ID/ward commissioner/UP chairman certificate of the proprietor /

partner / directors.

Photo of the proprietor/Partners and guarantors. Last 12 months bank statement of transactional account. Registered mortgage of property/ownership of the space/possession right purchased in

Bank s name.

Hypothecation of machineries, equipment, vehicles, inventories. Lien of cash collateral (FDR) and other encashable financial instrument

Khamar (Farm/Non-Crop Loan)

Agriculture Banking Abad (Crop Loan) To help farmers, share cropper and landless farmers to

bear the cost of tilling of land, fertilizers, pesticides, irrigation, seed etc. for producing different

crops and vegetables.

Key Features:

Areas:

-Fisheries

-Poultry

- Hatchery

Loan size: Up to Tk.3.00 lac Tenure: Maximum 6 months (Maximum 12 months for financing in banana & mango

cultivation)

Financing mode: Loan (General)

Eligibility:

Reside within locality/command area for minimum 2 years


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Age is between 19 65 years of age (the borrower s age must not exceed 65 at the expiry

of loan tenor)

Any real farmers

Security:

Hypothecation of crops/vegetables Collateral: registered mortgage (where applicable) Group/Cross Guarantee from the Group members on non judicial stamp paper is to be

obtained (in case of loan is made by making a group)

Irrevocable Power of Attorney Any justifiable capital expenses and/or working capital and Project finance And other security required as per banking rule

Market Segmentation of SME:

Graph: 5

Expansion of Branches on agricultural sector

SME

Trading: Whole sale,

Retail.Manufacturing: Retailers of

machinery, accessories,

agriculture items, etc

Service:Satellite,educational

organization.


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The Bank opened 10 new branches in 2010 and converted seven SME service centers into

SME/Agriculture branch to reach 96 branches at the end of the year spreading the branch

network throughout the country. More branches will be opened in 2011 to expand the branch and

Distribution network. These will bring up-to-date banking services to our existing and potential

customers. At the same time it will optimize utilization of our strong delivery channels, increase

our resource position and business potentials that will maximize profitability and shareholders'

value. PBL's strategy is to reach the doorsteps of customers to provide full range of banking

services based on state- of -the- art- technology and IT platform at free or affordable cost.

Graph-6

ANALYSIS

Comparative analysis of SME Credit Scheme of Six Different Banks currently Available in

Bangladesh

About the Sample Banks

Dhaka Bank Ltd .

The Bank started branch operations at Belkuchi Sirajgonj in April 2003. Prior to the Bank s

intervention, the weaving community did not have the financial strength to stock their products

till Eid ul Fitr when the annual sale takes place. Traders were taking advantage to the situation


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by buying up entire productions at low prices and liquidating stocks just before Eid. With

financial services from Dhaka Bank Limited, the weavers have converted to power looms,

significantly increased profitability and reduced the involvement of middlemen. Already they

have identified several clusters and are working on improving access to finance within these

clusters

Eastern Bank Ltd

Small and Medium Enterprises (SME) in Bangladesh contributed 25% of gross domestic product

(GDP) and 80% of the industrial jobs of the country in 2004. According to ADB, the country's

estimated 6 million SMEs and micro enterprises firms of less than 100 employees have a

significant role in generating growth and jobs. This is a sector that has its own distinct needs and

requires specialized focus. Eastern Bank Ltd. (EBL) has launched SME Banking in early 2005

with this view in mind. Eastern Bank Ltd. Services in SME:

Provide SMEs with easy access to financing.

Deliver products that ensure superior returns to our customers.

Orient customers with industry trends, regulatory issues etc, for their success.

BRAC Bank Ltd .

The BRAC Bank ltd started its operation in 2001. The SME portfolio includes

Prothoma Rin Exclusively designed for women

Anonno Rin This is a small -scale loan

Apurbo Rin In order to help our SME

Supplier Finance

Dutch-Bangla Bank Ltd.

Dutch-Bangla Bank Limited (the Bank) is a scheduled commercial bank. The Bank was

established under the Bank Companies Act 1991 and incorporated as a public limited company


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under the Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of

banking business in Bangladesh. The Bank is listed with Dhaka Stock Exchange Limited and

Chittagong Stock Exchange Limited. DBBL a Bangladesh European private joint venture

scheduled commercial bank commenced formal operation from June 3, 1996. The Bank

commenced its banking business with one branch on 4 July 1996. The bank opened SME

windows in 2001.

Prime Bank Ltd.

As per decision of the Board of Directors of Prime Bank Ltd. in its 78th meeting held on

17.11.1999, Small & Medium Enterprise (SME) Cell has already been established a t Head

Office under the Credit Division. Now the bank can replicate quality anywhere in the world. So,

the competitive differentiation comes from swiftness to market and innovation. And in this

regard, small companies right down to the individual can bea t big bureaucratic companies ten

out of ten times.

Loan size

Dhaka Bank Ltd - Taka 0.50 Lac to Taka 50.00 Lacs

Prime Bank Ltd Taka 1 Lac to Taka 75.00 Lacs

Eastern Bank Ltd- Taka 1 Lac to Taka 300.00 Lacs

BRAC Bank Ltd- Taka 3 Lacs to Taka 30.00 Lacs

Dutch-Bangla Bank Ltd- Taka 3 Lac to Taka 50.00 Lacs

Loans and Advances

Loans and advances Interest Rate

Agriculture 8.00% ---11.00%

Working Capital for Industry 12.50% ---15.50%

Small Shop Finance and SME 13.00% ---16.00%


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Transport Loan 13.50% ---16.50%

Consumer Credit 13.50% --- 16.50%

Table-8

Findings

PBL bank plays a vital role in the SME sector of Bangladesh. They have taken different

strategies for the development of this sector, because it is the profitable product of. In the recent

years they launched different types of SME loan product for mitigate the different target

customers needs. The findings of this report are given below:

Most of the customers want to reduce the interest rate and increase tenure.

Huge number of documents in the help desk causes delay in the disbursement process.

Lack of marketing activities in the urban area, whereas other competitors are giving

more aid at different spot.

The remuneration package for the entry and the mid level management is considerably

low. The compensation package for PBL entry-level position even lower than the

contemporary banks.

Some of the borrowers do not install a signboard in a visible place of business or

manufacturing unit mentioned that Prime Bank Ltd.

The SME loan section is very poor because PBL focused on corporate loan.


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Recommendation

For better improvement of SME, PBL can consider the following recommendation:

The Bank has to give emphasis the SME loan section .Because the SME loan section is

very poor for corporate loan.

Reduce the interest rate because most of their competitors are providing loans at a lower

example most of the competitors banks providing loan at 12-15% interest rate.

Increase marketing activities in the urban area because other competing industries are

given huge aid in urban area which helps them to increase their customer base.

Give proper training to with some real life problem because they are all in all for SME

loan. Sometimes they made a mistake which results in customer harassment, increase

processing time and charges.

Increase amount of SME loan on agriculture.

Increase amount up to 10 lacs without collateral security for providing loans

Frequently check clients are perform all the terms and condition of SME loan.

Provide loans to the leather and jewelers industry, because leather is the 3rd exporting

product so it is better to encourage them for the economic development of Bangladesh

Conclusion

Prime Bank Limited is one of the most potential Banks in the banking sector. It has a large

portfolio with huge assets to meet up its liabilities and management of this bank is equipped with

the export bankers and managers in all level of management. So it is not an easy job to find out

the drawbacks of this branch. It has been observed that Prime Bank started its banking services


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with a view to minimize the customer s needs by offering different products and services which

are easy and affordable for all level of customers. To that extent, Prime Bank always emphasizes

its customer services, product development, resource management, branch networking and the

contribution to the economic development of the country. The bank also provides social services

through Prime Bank as their social responsibility. The success of a bank depends on the quality

of the services it offers. All the commercial banks, therefore, try to provide quality services with

competitive interest rates. Prime Bank is not an exception. SME system on agriculture has been

developed with the same purpose. Although, the comparative analysis shows that Prime Bank is

in better position, but there are some obstacles it faces to sustain the position. However, the

continuous improvement of the services will certainly place the bank in the best position in one

decade.

BIBLIOGRAPHY:

1. In: Business and Management

2. Prime Bank Ltd. Annual Report 2010,
http://www.termpaperwarehouse.com/class/Business-And-Management/4/0http://www.termpaperwarehouse.com/class/Business-And-Management/4/0


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Work cites:

1. www.primebank.com.bd

2. Prime Bank - Bangladesh BankInfoBD

3. www.bdwebguide.com/ banks -bangladesh .htm

4. www.markosweb.com/www/ primebank .com. bd /

5. www.termpaperwarehouse.com/essay-on/ Prime -Bank -And.../52719

8. List of Abbreviation

Abbreviation Elaboration

PBL Prime Bank Limited

SME Small and Medium Enterprises

CSR Corporate Social Responsibility

ADB Asian Development Bank

BRAC Bangladesh Rural Advancement Committee

DITF Dhaka International Trade Fair

ATM Automated Teller Machine

BASIS Bangladesh Association of Software and

Information Services

HR Human Resource

IT Information Technology

Table-9
http://www.primebank.com.bd/http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CFAQFjAH&url=http%3A%2F%2Fbankinfobd.com%2Fbanks%2F35%2FPrime_Bank&ei=AYlMT66JC4vLrQfT0d2gDw&usg=AFQjCNFzXAqJslCylEMKvMvq6IcZqi4V_whttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CFAQFjAH&url=http%3A%2F%2Fbankinfobd.com%2Fbanks%2F35%2FPrime_Bank&ei=AYlMT66JC4vLrQfT0d2gDw&usg=AFQjCNFzXAqJslCylEMKvMvq6IcZqi4V_whttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CFAQFjAH&url=http%3A%2F%2Fbankinfobd.com%2Fbanks%2F35%2FPrime_Bank&ei=AYlMT66JC4vLrQfT0d2gDw&usg=AFQjCNFzXAqJslCylEMKvMvq6IcZqi4V_whttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CFAQFjAH&url=http%3A%2F%2Fbankinfobd.com%2Fbanks%2F35%2FPrime_Bank&ei=AYlMT66JC4vLrQfT0d2gDw&usg=AFQjCNFzXAqJslCylEMKvMvq6IcZqi4V_whttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CFAQFjAH&url=http%3A%2F%2Fbankinfobd.com%2Fbanks%2F35%2FPrime_Bank&ei=AYlMT66JC4vLrQfT0d2gDw&usg=AFQjCNFzXAqJslCylEMKvMvq6IcZqi4V_whttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&ved=0CFAQFjAH&url=http%3A%2F%2Fbankinfobd.com%2Fbanks%2F35%2FPrime_Bank&ei=AYlMT66JC4vLrQfT0d2gDw&usg=AFQjCNFzXAqJslCylEMKvMvq6IcZqi4V_whttp://www.primebank.com.bd/


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