Internship Report

On

General Banking & Marketing Strategies of Financial Products

Of

INTERNSHIP REPORT
On

Marketing

Strategies of Financial Products & Customer Services

Of

Submitted To
Syeda Rownak Afza Senior Lecturer BBS, BRAC University.

Submitted By
Rezwan Bin Mostafa Student ID: 06104020. BBS Department,BRAC University.

Date Of Submission
6th June, 2010.

BRAC University
5

Preface

This report is concerned to be a brief study of the operation, function, tasks and services of AB Bank Ltd. Banking plays an important role in the commercial and economic development of a country. Now- a- days banks are using different modern technologies, which influence the managerial activities, thats why I decided to do my internship training in the bank. In preparation of this report I have tried my best to provide all possible information about the operation, function and tasks of ABBL in brief and comprehensive form. It also includes a brief description of different departments where I have worked during my internship. I have also tried my best to use simple and easy words and language.

Letter of transmittal
Syeda Rownak Afza Senior Lecturer BRAC Bussiness School BRAC University.

Subject: Submission of Internship report.

Madam, This report on Marketing Strategies Of Financial Products & Customer Services of AB Bank Ltd. is prepared to fulfill the requirement of the Internship program of B.B.A degree. This report focuses on the different marketing strategies used by AB Bank Ltd. to promote their products and how they provide customer services. I am grateful to you that you give me the opportunity to do this report, which was vey interesting. I have enjoyed preparing the report though it was challenging to finis within the given time and limited access. I tried my best to compile the information for this report comprehensive as possible.

Thanking you

Rezwan Bin Mostafa ID- 06104020 BRAC Bussiness School BRAC University.

Acknowledgement

First of all, I would like to thank almoghty Allah for his grace in accomplishing my internship report timely.

I would like to express my gratitude to my academic supervisor Syeda Rownak Afza from the core of my heart for her kind support, guidance, constructive, supervision, insstructions and advice and for motivating me to do this report.

I am also thankful to HR Division of AB Bank Limited for giving me the opportunity to conduct the internship in Principal Branch of AB Bank Limited. I would like to thank Mr.Suruz Ali Vutto (SAVP) operation manager of Principal Branch AB Bank Limited.

I am also grateful to Mr. Ashfaq (Principal Officer) who helped me a lot to complete my internship report by providing data about the financial product of AB Bank.

Executive Summary
The study is about the General operations and Management of AB Bank Ltd. which focuses on different types of customer services that are offered by AB Bank and their different financial product with different marketing strategies. The objective of the study is to identify the strategies AB Bank uses to market their products. At the same time the paper focuses to gain an understanding on issues that are important for developing marketing strategies for financial services. AB Bank Limited, the first private sector Bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh on 31st December 1981 and started its operation with effect from April 12, 1982. Dubai Bank Limited (name subsequently changed to Union Bank of the Middleast Limited) decided to off load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the articles os Association of the company and with the necessary approval of the relevant authorities, the shares held by them in the Bank were sold and transferred to Group A Shareholders, i.e. Bangladeshi Sponsor Shareholders. AB Bank limited was incorporated in Bangladesh on 31st December 1981 as Arab Bangladesh Bank Limited and started it operation with effect from April 12, 1982. AB Bank Limited is now fully owned by the Bangladeshis. Since their inception in 1982, they have been participating in different industrial and national development activities in addition to normal Trade Finance and SME development. In addition to the 73 branches within the country ABBL has a branch in Mumbai, India. Beside that they have the wholly owned Finance company in Hong Kong in the name and style of AB International Finance Limited and representative offices at London and Yangon. AB Bank commits to nation to take a lead in the banking sector through not only strong financial positions, but also through innovation of products and services. It also ensures creating higher value for its respected customers and shareholders. The bank has focused to bring services at the doorstep of its customers and to bring millions into banking channels those who are outside the mainstream banking arena. Innovative products and services were introduced in the field of SME, Consumer Loans, Debit & Credit card (Local & International), ATMs, Internet Banking, Remittance services, Treasury products and

services, Structured Finance for Corporate, strengthening and expanding its Islamic Banking activities, Investment Banking, specialized products and services for NRBs ,Priority Banking and Customer Care. The bank has successfully completed its automation project in mid 2008. It envisages enabling customers to get banking services within the comfort of their homes and offices.

Table of Contents
Contents Page No

Chapter 1
1.0 Introduction of the report 1.1 Background of the study 1.2 Purpose of the study 1.3 Nature of the study 1.4 Scope of the study 1.5 Methodology of the study 1.6 Limitations 1.7 Literature review

1-5
1 1 2 2 3 3 4 45 6 20 6 8 8 8 9 9 10 11 13 15 16 16 16 17 19 20 22 26 27 -36 27

Chapter 2
2.0 Background of ABBL 2.1 Mission Statement 2.2 Vision Statement 2.3 Change of Name 2.4 Corporate information of ABBL 2.5 Values 2.6 Objective of ABBL 2.7 Historical review of ABBL 2.8 Current profile of ABBL 2.9 Management Aspect 2.9.1 Executive Committee 2.9.2 Audit Committee 2.9.3 Management Committee 2.10 Management Hierarchy of ABBL 2.11 Functional Hierarchy 2.12 General Banking

Chapter 3
My Job Part

Chapter 4
4.0 Introduction of the Department

4.1 ABBL Principle Branch 4.2 Current Savings Department 4.3 Accounts Department 4.4 Credit Department 4.5 Remittance Department 4.6 Cash Department 4.7 Clearing Department

27 27 28 31 34 36 36 38 - 56 38 38 45 46 49 51 52 55 55 55 56

Chapter 5
5.0 Financial product 5.1 Retail Banking 5.2 Corporate Banking 5.3 SME Banking 5.4 NRB Banking 5.5 Islamic Banking 5.6 Investment Banking 5.7 New Product 5.7.1 Ogrim Munafa Patra 5.7.2 Be a Millionaire in 3 years 5.7.3 Troimashik Munafa Hishab

Chapter 6
6.0 Marketing Strategies adopted by ABBL 6.1 Understanding Consumer 6.2 Identifying & Targeting Financial Prospects 6.3 Product Differentiation Strategies 6.4 Channels of Distributions 6.5 Pricing of Financial Products 6.6 Corporate Social Responsibility

57 - 60 57 57 57 58 59 59 59 61 - 66 61 61

Chapter 7
7.0 Customer Services offered of ABBL 7.1 Credit Card

7.2 Safe Deposit Locker 7.3 New MICR Cheque Book 7.4 AB Bank VISA Electron Debit Card

62 64 64 67 - 70 67 67 68-70 70 71 - 76 71 73 74 75 77 - 79 77 78 80

Chapter 8
8.0 Customer Relation Management 8.1 Customer Retention 8.2 Promotional Activities 8.3 Branding Image

Chapter 9
9.0 Performance of ABBL 9.1 Financial Performance 9.2 Operating Performance 9.3 Online Banking

Chapter 10
10.0 Findings of the Report 10.1 Recommendation & Conclusion

Bibliography.

Chapter 1
1.0 Introduction of the report

1.1 Background of the Study

The financial service sector in Bangladesh is now quite competitive to deal with changing environment. A number of external forces have exerted influence on the sector, including socio-economic, regulatory and technological factors. Changes to regulatory environment undoubtedly have had the greatest impact on this sector. Technology has also increased importance for financial institution especially for private commerce banks.

There are now 30 private commercial banks operating in Bangladesh and they are offering different products and services but there are few basic differences among them in terms of structure and performance. Thus the competitions among them are increasing day by day and marketing of financial products is now becoming an important concern.

The report is a reflection on my experience when I was an internee in ABBL, Principal Branch, Dhaka. Since its inception in 1982, ABBL has maintained a steady growth over the past twenty eight years span of its operations.

The study is critical in nature. It was conducted to investigate critically into the operations of AB Bank Ltd and it also explains that how ABBL provides facility of online banking to its customers. The annual reports or the consolidation data of the Bank has not been focused in specific because it does not reflect the operational performance of branches. However , they have been referred to as when and where required.

1.2 Purpose of the Study

General purpose

To get acquaintance with the general operations of ABBL. To know about different types of financial products offered by ABBL. To have a clear idea about the marketing strategies adopted by ABBL for different type of financial products

Specific purpose

Specific purpose of the study includes

To objectively observe the operations of AB Bank Ltd in general and the operations of ABBL, Principal Branch, Dhaka in specific.

To know about their bases for consumer segmentation. To know about their product differentiation strategy.

1.3 Nature of the Study

From this study it is evident that, the research that has been conducted is exploratory in nature.

Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with the extreme caution. Exploratory research is a type of research conducted because a problem has not been clearly defined. Exploratory research helps determine the best research design, data collection method and selection of subjects. Given its fundamental natural, exploratory research often concludes that a perceived problem does not actually exist.

1.4 Scope of the Study

The study covers two areas with its variables, which affects the operation of the branch directly or indirectly. These two areas of variables are

Branch specific variable. Bank specific variable.

The branch specific variables are the variables under the control of the branch management and directly affect its operations e.g.

Layout of the branch. Customers relations. Departments in the branch. ATM Online banking. The bank specific variables are those variables, which are not in control of the branch management e.g.

History of ABBL. Services provided by ABBL. Role of ABBL.

1.5 Methodology of the Report Data Sources Both primary and secondary data have been used in the completion of this report. The methodology used is as under:

During the completion of this report, I relied mainly on the primary data. The tools used for the collection of primary data are interviews and observation. To get primary data I also performed some practical work. The secondary data was mainly used for as a background material and for purpose of reference. The major sources of secondary data were the annual report 2008 & 2009,

other printed material of the Bank and internet played a vital role as a source of secondary data. 1.6 Limitations The study was subject to the following limitations the absence of which could have made this report more accurate, systematic and factual. Lack of published marketing information. Lack of back hand information with stuff. Lack of access to data.

1.7 Literature Review

The private commercial banks, operating in Bangladesh, constantly focus on understanding and anticipating customer needs. They already made significant progress within a very short period of their existence. Many of the banks have been graded as top class banks in the country through internationally accepted CAMEL rating.

The CAMEL model is based on the Uruguayan farmers model. Participants who have an interest for a particular topic and who wish to learn mor5e by sharing knowledge, practices and ideas agree to hold a series of study visits. They take it in turn to organize and host a visit to their organizations. The even consist of: Presentations by managers, practitioners and partners outlining strategies and practices. Discussions around the presentations, as follow- up to inter-visit communications, generally on key themes and suggestions and ideas for future practice. Demonstration of tools or systems.

Hands on sessions to enable actual experience. Review and evaluation of the practices discussed, the day itself and suggestions for themes of future visits and inter visits communications.

Most of the have already occupied enviable positions among their competitors after achieving success in all areas of business operations. Banking scenario undergoes changes time to time as this very dynamic industry. Private commercial banks are offering different financial products with different features. They follow various strategies to market such products.

This paper focus on marketing strategies of financial products of ABBL. First of all it is important to know what marketing strategy is and what the financial products that AB bank usually offers are.

A marketing strategy can be defined as the outlines of broad marketing logic by which the business units hopes to achieve its marketing objectives and the specific of target markets, positioning and marketing expenditure levels. It is a process that can allow organizations to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal. Financial products refer to those instruments that to those instruments that help you save, invest, get insurance or get a mortgage. These are issued by various banks, financial institutions, stock brokerages, insurance providers, credit and agencies and government sponsored entities. Financial products are categorized in terms of their type or underlying asset class,volatility. Risk and return. Understating customer and customers needs and requirements is the guiding philosophy of marketing. A marketing orientation requires the organization to view of its customers. AB is recognized as the peoples choice, catering to the satisfaction of its cliental. Their satisfaction is ABs success.

Chapter -2

2.0 Background of AB Bank LTD. AB Bank Limited, the first private sector bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh on 31st December 1981 and started its operation with effect from April 12, 1982.

Dubai Bank Limited (name subsequently changed to Union Bank of the Middleast Limited) decided to off-load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the

Articles of Association of the Company and with the necessary approval of the relevant authorities, the shares held by them in the Bank were sold and transferred to Group "A" Shareholders, i.e. Bangladeshi Sponsor Shareholders (ABBL 2010).

As of December 31, 2007; the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT 2000 million and BDT 4511.59 million respectively. Authorized Capital of the Bank has been increased to BDT 3000 million in the Extra Ordinary General Meeting held on July 16, 2008.

Since beginning, the bank acquired confidence and trust of the public and business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology.

During the last 28 years, AB Bank Limited has opened 77 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited (ABBL 2010). To facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the World. AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 53375.35 million, which is precisely 26.85% higher than the preceding year. On the Advance side, the Bank has been able to achieve 30.76% increase, thereby raising a total portfolio to BDT 40915.35 million, which places the Bank in the top tier of private sector commercial banks of the country. On account of Foreign Trade, the Bank made a significant headway in respect of import, export and inflow of foreign exchange remittances from abroad.

AB Bank is known as one of the leading bank of the country since its commencement 28 years ago. It continues to remain updated with the latest products and services, considering consumer and client perspectives. AB Bank has thus been able to keep their consumers and clients trust while upholding their reliability, across time. In spite of adverse market condition, AB Bank Limited which turned 28 this year, concluded the 2009 financial year with good results. The Banks consolidate profit after taxes amounted to taka 230 cores which is 21% higher than that of 2008. The asset base of AB grew by 32% from 2008 to stand at over Tk 8,400 cores as at the end of 2008. The Bank showed strong growth in loans and deposits. Deposit of the Bank rose by Tk 1518 core i.e, 28.45% while the diversified loan portfolio grew by over 30% during the year and recorded a Tk 1579 cores increase. Foreign Trade Business handled was Tk 9,898 cores indicating a growth of over 40% 2009. The Bank maintained its sound credit rating in 2009 to that of the previous year. The credit Rating Agency of Bangladesh Limited (CRAB) awarded the Bank an A1 rating in the long term and ST-2 rating in the short term. The bank decided to change its traditional color and logo to bring about a fresh approach in the financial world, an approach, which like its new logo is based on bonding, and trust. The bank has developed its logo considering the contemporary time. The new logo represents our cultural Sheetal Pati as it reflects the bonding with its clientele and fulfilling their every need. Thus the new spirit of AB is Bonding. The logo of the bank is primarily red as red represents velocity of speed and purity. Its new logo innovates, bonding of affiliates that generate changes considering its customer demand. AB Bank launched the new logo on its 25th anniversary year.

AB Bank has continuously invests into its biggest asset, the human resources to drive forward with its mission to be the performing in the country. The bank has introduced for its employees. Male employees wear designed ties and females wear share or salwar kamiz, all the dresses are consisted with the unique AB Bank logo. AB is recognized as the peoples choice, catering to the satis faction of its cliental. Their satis faction is ABS success

2.1 Mission Statement: "To be the best performing bank in the country"

2.2 Vision Statement: "To be the trendsetter for innovative banking with excellence & perfection"

2.3 Change of Name: Arab Bangladesh Bank Limited changed its name to AB Bank Limited (ABBL) with effect from 14 November 2007 Vide Bangladesh Bank MRPD Circular Letter No- 10 dated 22 November 2007. Prior to those Shareholders of the Bank approved the change of name in the Extra Ordinary General Meeting held on 04 September 2007 (ABBL 2010).

New Logo of ABBL Effective 01 January 2008, ABBL changed its Logo as well.

2.4 Corporate Information of AB Bank Limited: Name of the Company AB Bank Ltd Legal Form: A public limited company incorporated on 31st December, 1981 under the Companies Act, 1913 and listed in the Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd. Commencement of Business 27th February 1982

Registered Office BCIC Bhaban, 30-31, Dilkusha C/A Dhaka 1000, Bangladesh. Tel: +88-02-9560312 Fax: +88-02-9564122, 23 SWIFT: ABBLBDDH E-mail: info@abbank.com.bd Web: www.abbank.com.bd

2.5 Values: Service Excellence Openness Trust Commitment Integrity Responsible corporate citizen

AB Bank Limited see their customers trust as the lifeline of their business, control and compliance as license to operate, dynamic and motivated people as their strength to multiply and technology as their weapon to service excellence.

2.6 Objectives of AB Bank Limited: Maximization of profit along with the benefits of employees is the main objective of the bank. In addition, the order objectives are:

 Bringing modern Banking facility to the doorstep of general public through diversification of banking services, thereby arousing saving propensity among the people. Foreign a cordial, deep-rooted and firm banker-customer relationship by dispensing prompt and improved clients service. Taking part in the development if the national economy through productive deployment of the Banks resources as well as patronizing different social activities. Connecting clients to modern banking practice by the best application of improved information technology, so that they get encouraged to continue and feel proud of banking with ABBL. Ensuring highest use of the professional workforce through enhancement of their aptitude and competency. Responding to the need of the time by participating in syndicated large loan financing with likeminded Banks of the country, thereby expanding the area of investment of the Bank. Elevating the image of the Bank at home and abroad by sustained expansion of its activities. Ensuring maintenance of capital adequacy, comfortable liquidity, asset quality and highest through successful implementation of the management core risk program (ABBL 2010).

2.7 Historical Review of AB Bank Limited: AB Bank Limited (ABBL) a joint collaboration bank with Dubai Bank Limited. It was formed in Dhaka on 31 December 1981. It started banking operations on 12 April 1982 as a scheduled private sector commercial bank. Initially the authorized capital of the bank was Tk 200 million divided into 2 million shares of Tk 100 each. The issued and paid up capital was Tk 80 million. The authorized capital of the bank has later been enhanced to Tk 800 million. The paid up capital was also enhanced at different times of its operation and stood at Tk 409.94 million in December 2000. ABBL is the first Arabian-Bangladeshi joint venture private commercial bank in Bangladesh and was formed with the assistance and support of the Dubai-based Galadari family, a group active in international trade, finance and industry (ABBL 2010).

Nine numbers of boards of directors including the chairman governs the overall affairs of the bank. The chief executive of the bank is its managing director. In all, 1,472 employees, including the executives and officers, work in the bank in various capacities. The bank has 62 branches (urban-46, rural-15 and overseas-1). The Head Office of the bank is located at Dilkusha, Dhaka.

ABBL was set up to conduct all types of traditional commercial banking functions including foreign exchange business and other financial services. It has been able to achieve satisfactory progress in all areas of its planned activities including deposit mobilization, credit expansion, servicing imports and exports, remittance services, investment, and product innovation. At the end of 1982, the first year of the banking business, the total deposits of ABBL amounted to Tk. 136.71 million. This stood at Tk. 16,217.5 million on 31 December 2000. The deposit-mix of the bank in 2000 was composed of fixed deposits (56.6%), savings deposits (21.84%), and current and other deposits (21.56%). The amount of total reserve funds of ABBL was Tk. 354.81 million in 2000 as against Tk. 202.48 million in 1995.

Total loans and advances of ABBL increased from Tk 116.96 million in 1982 to Tk 12,548.4 million in 2000. Responding to the needs of the market, ABBL introduced three new schemes: Student Loan, Personal Computer Loan for Educational Institutions (for their laboratories), and Monthly Interest Payment Facility to term deposit holders. The broad economic areas in which the bank lends (and the total outstanding amount of advances to those areas in million Taka) up to 31 March 2000 were: agriculture and fisheries (278), industry (2,811), retail/wholesale trade and hotels and restaurants (3,769), transport/communication and storage (180), insurance, real estate and trade service (1,384), special credit programmers, including poverty alleviation and income generating activity (520), and others (1,874). Up to 31 March 2000, ABBL provided financial support in the form of loans and advances to 88 large and medium scale and 145 small and cottage industrial projects amounting to Tk. 2,300 million. It has also extended project financing in

syndication with other banks. The ratio of advances and deposits during the year 1999 and 2000 were 80.66% and 77.38% respectively (ABBL 2010).

In 2000, the bank's total classified loans were 23.45% of its total loans and advances. It maintained a provision of Tk. 1,435.4 million for them, which affected the bank's performance and degraded the quality of its lending assets. The quantum of investment of the bank rose to Tk. 2,429.66 million in 2000 from Tk. 23 million in 1982. Of the total investment in 2000, 93% was in government treasury bills. The rest was invested in other sectors including debentures of ICB, ordinary shares of companies and prize bonds. In that year, the bank earned an income of Tk. 170.21 million from its investments.

In the financial year ending on 30 June 2000, total foreign exchange business of the bank was Tk. 11,600 million, which included imports (34.48%), exports (58.19%) and remittances (7.33%). ABBL has foreign correspondent relationships with 221 banks/bank offices and other financial institutions at different international financial centers. The overseas operations of the bank are conducted through its Mumbai branch in India and its subsidiary company, the AB International Finance Limited in Hong Kong. The bank has two foreign representative offices - one in London and the other in Yangon.

As of December 31, 2006; the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT 2000 million and BDT 2582.76 million respectively. The Sponsor-Shareholders hold 50% of the Share Capital; the General Public Shareholders hold 49.43% and the rest 0.57% Shares are held by the Government of the People's Republic of Bangladesh (Annual Report 2008). However, no individual sponsor share holder of AB Bank holds more than 10% of its total shares.

During the last 27 years, AB Bank Limited has opened 74 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India, two Representative Offices in London and Yangon, Myanmar respectively and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited. To

facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the world.

2.8 Current Profile of AB Bank Limited:

Since beginning, the bank acquired confidence and trust of the public and business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology (Annual report 2008). At present, the bank has 74 branches throughout the country with about 18000 employees. The existing Board of director is 14. M. Wahidul Haque is the chairman of board and Kaiser A. Chowdhury is the President and Managing Director. The bank has been restructured their five main business which are responsible for earning the revenues of the bank. These are:

Corporate Banking Consumer Banking SME Banking Treasury and Cards

All other department of the bank acts as support for these units and helps them in every possible way. Under this arrangement, the responsibilities and functions of those branches have been reduced dramatically. Many of the activities like credit evaluation and approval, monitoring of loans, trade services activities etc. are now centralized in the Head Office. The branches of the bank are now termed as the sales and service Centers which are solely concentrated on delivering services to the corporate and consumer clients and maintain relationship with them.

AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 42076.99 million, which is precisely 53.78% higher than the preceding year. On the Advance side, the Bank has been able to achieve 46.32% increase, thereby raising a total portfolio to BDT 31289.25 million, which places the Bank in the top tier of private sector commercial banks of the country (Annual report 2008). On account of Foreign Trade, the Bank made a significant headway in respect of import, export and inflow of foreign exchange remittances from abroad.

Since beginning, the bank acquired confidence and trust of the public and business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology (Annual report 2008). At present, the bank has 74 branches throughout the country with about 18000 employees. The existing Board of director is 14. M. Wahidul Haque is the chairman of board and Kaiser A. Chowdhury is the President and Managing Director. The bank has been restructured their five main business which are responsible for earning the revenues of the bank. These are:

Corporate Banking Consumer Banking SME Banking Treasury and Cards

All other department of the bank acts as support for these units and helps them in every possible way. Under this arrangement, the responsibilities and functions of those branches have been reduced dramatically. Many of the activities like credit evaluation and approval, monitoring of loans, trade services activities etc. are now centralized in the Head Office. The branches of the bank are now termed as the sales and service Centers which are solely concentrated on delivering services to the corporate and consumer clients and maintain relationship with them.

AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 42076.99 million, which is precisely 53.78% higher than the preceding year. On the Advance side, the Bank has been able to achieve 46.32% increase, thereby raising a total portfolio to BDT 31289.25 million, which places the Bank in the top tier of private sector commercial banks of the country (Annual report 2008).

On account of Foreign Trade, the Bank made a significant headway in respect of import, export and inflow of foreign exchange remittances from abroad.

2.9 Management Aspects: The AB Bank Limited Management Team comprises of a group of people and each them comes with an international working background and is committed in leveraging their experience to take ABBL to greater heights by ensuring top line revenues with dynamic capabilities. This Management Team is unique in being able to envision the need of the business by bringing in admixture of advanced technology solutions know-how and revamping the organizational make-up for maximum profitability. Other than the President and Managing Director, the remaining Management Team Members each lead a functional Department.

This mix of people is persistent to provide unparallel services to its customers, come up with timely and innovative products and services and to enhance the capabilities of its people of its people while emphasizing on the latest technology. This they believe will take the bank to a foremost position in the country by the turn of the year 2008. This team is to drive the business to maximize the operational excellence and efficiency through acquisition of talent, developing systems, processes and people and through blending of these to let customers revel in with fulfillment and permanency (Annual report 2008).

Like any other business organization, all the major decisions in ABBL are made by the top management committee. The board mainly establishes the objectives and policies of the bank. There are three committees of the board for different purpose.

2.9.1 Executive Committee: This committee is comprised of Chairman, four members of the bank and one member secretary. The functional and responsibilities of this committee is to establish and periodically review the banks overall credit and lending policies and procedures, development and implement uniform and minimum acceptable credit standards for the bank, new credit proposal assessment and approval etc.

2.9.2 Audit Committee: The main objective of this committee is to assist Board of Directors with regard to the audit of financial reports, management reports by the external auditors, internal controls and internal audits. ABBL have four members in audit committee.

2.9.3 Management Committee: The main objective of this committee is to ensure business operations are in line with the Banks policies, strategies and objectives, the bank has set up. This committee consists of the Managing Director, Deputy Managing Director and different business unit heads (ABBL 2010). The honorable members are:

2.10 Management Hierarchy of AB Bank Limited:

Chairman

Board of Directors

Management Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

Senior Principal Officer

Principal Officer

Management Trainee (Entry Level)

Senior Officer

Officer

Trainee Officer (Entry Level)

Contractual Officer (Entry Level

2.11 Functional Hierarchy The functional hierarchy represents the reporting order in the hierarchy of ABBL. The hierarchy has president and directors at top management level and officer Grade 1, 2 and Grade 3 at the lower level management of ABBL. The middle level management consists of regional general Manager and Regional controller of operations. These positions are not fixed. Any person of the hierarchy above the branch manager can be appointed as RGM and Controller Operations.

President and CEO Regional General Board of Directors Head Departments Office G-1, of 2 and other lower staff Branch Manager Manager Controllers of Operations 5

2.12 General Banking Financial institution that mediates or stands between ultimate borrowers and ultimate lenders is known as banking financial institution. Banks perform this function in two ways taking deposits from various areas in different forms and lending that accumulated amount of money to the potential investors in other different forms. General banking is the starting point of all the banking operations. General banking department aids in taking deposits and simultaneously provides some ancillaries services. It provides those customers who come frequently and those customers who come on time in banking for enjoying ancillary services. In some general banking activities, there is no

relation between banker and customer who will take only one service from bank. One the other hand, there are some customers with who banks are doing it business frequently. It is the department, which provides day to day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc. Since bank is confined to provide the service everyday general banking is also known as retail banking. General Banking consists of the many sections in the branch. These are
Customer service.

Account opening / closing. Remittance

Payment Order issue. Demand Draft issue / collection. T.T issue/ collection Endorsement IBC / OBC Collection.

Deposit Department

 Locker Service.

Accounts Department.

Clearing Transfer. Cash.

Chapter- 3

My Job Part
I did my internship in accounts opening department of Principal branch of AB BANK LIMITED. Its a nice department for learning different types of banking material like different types of account, their requirement, and their benefit to the customers, about the cheque books and I also have to handle the customers who usually come to open account, to give cheque book requisition, receive the cheque books and who come to update their information in the customer database, scanning customer signature card.. It had been a great experience to do my internship in such a important department of Principal branch of AB BANK Limited. I have found some study when I did my internship in accounts opening department. Mainly I have to do these task in my internship period, they are Opening account Giving requisition for cheque books. Receiving cheque books arrange them and give it to the right person. Scan the signature card.

 Updating legacy accounts. Customer service.

Opening Account: Opening account is the core job responsibility for account opening department. People have different purpose for open an account. Some people wants to open savings account, some wants to open current account and some wants to open FC or foreign currency account. Different types of account needs different types of papers. Now I will describe about different types of account that AB bank offers

1.

The Bank offers the following types of accounts to its various types of customers: i) ii) iii)
iv)

Current Account Savings Bank Account Special Notice Time Deposit (STD) Fc (Foreign Currency) Account.

Current Account: This type of account is opened by both individuals and business concerns including non-profit making organizations. New current account must be opened with a cheque only but there must be some initial cash deposit. Opening of current account requires proper introduction. Frequent transactions (both deposits and withdrawals) are allowed in this type of account. A current account holder can draw cheques on his account for any amount and for any number of limos in a day as the balance available in the account permits. No interest is allowed on current account. A minimum balance as prescribed by the Head office must always be maintained for this type of account. Current account holders have pay taka 1500 per year as a charge. Statement of account is to be dispatched to the account holder on monthly basis or as may be requested by the customer, through a forwarding memo as per prescribed format retaining an office copy for reference. This type of account need some papers for opening a current account like if it is opened by person then he or she has to submit

his or her one copy of the photocopy of his or her national id card or passport and one copy of photocopy of his or her TIN certificate . Every person has to fill the account form and the ETP (EXPECTED TRANSACTION PROFILE) form by which they measure how much money the person will transect. Limited company current account need photocopy of their trade license, TIN certificate. From 12 etc. Savings Bank Accounts: This is a type of account opened by individuals for saving purposes depositing amounts over a period of time. Savings Bank Account also requires proper introduction. Deposits are made through deposit slips and withdrawals are made through printed cheques supplied while opening the account. No new account can be opened with a cheque only but there must be some initial cash deposits. This type of account earns interest at a prescribed rate. Interest on SB account shall be calculated & accrued monthly on the basis of guidelines issued by Head Office from time to time and credited to the account half-yearly in June and December each year. A minimum balance as mayo be prescribed by the Head Office from time to time is required to be maintained in a SB account. prescribed incidental charge is to be realized every half year if the balance comes down the required minimum balance. A maximum balance of SB account on which interest is payable is fixed by Head Office from time to time. A person needs either one copy of his photocopy of national ID card or photocopy of passport. Savings bank account can be joint. As per existing rules, a depositor can withdraw from his SB account not more than twice in a week up to an amount not exceeding 25% of the balance in a week up to an amount not exceeding 25% of the balance in the account, subject to a maximum of Tk. 10,000/- per week. A prior notice for 7 days is required to be given for withdrawing money in excess of the aforesaid limit. In case withdrawals are made violating the aforesaid prescribed limits, no interest is to be paid on such account for that month in which the default took place. A penalty is also charged to the customer at the discretion of the Manager, each time a cheque is returned unpaid for want of founds in the account. These saving s bank account rules are subject to changes from time to time. Statement of account is to be dispatched to the account holder on quarterly basis or as may be requested by the customer.

Short Term Deposits (S.T.D.): Short term deposits account is one type of current account. Withdrawals from this type of account require a prior notice varying from 7 to 29 days and 30 days or more. Interest on S.T.D should be paid as per instruction issued by Head Office from time to time. Based on demand and supply of funds in the money market, but in no case interest should be allowed exceeding the prescribed rates applicable for Fixed Deposit of different tenor, without obtaining prior approval of Head Office. The difference between the face value of the Certification of Deposits and the prepared interest will be received by the Bank from the purchaser of BCDs at the time of issue. The Bank will not ask any question, not even the depositors name. No record will be kept in the Bank other than the amount, certificate number, rate of interest, date of sale and date of encashment. The certificate is transferable by delivery alone and does into require any endorsement. Premature encashment of BCD is not permissible. No credit facility should also allowed against the security of Bearer Certificate of Deposits

Foreign currency Account or FC account: FC account or foreign currency account mainly opened by the people who are working in foreign country. They have to select their nominee who is permitted to run the account instead of him or her. For opening a FC account customers have to submit their work permit license, trade license if they have and the photocopy of their passport, photocopy of national identity card and also the photocopy of passport and national ID card of nominee. Fc account cannot be joint. It has to be a single account holders name. Customers have to deposite 500 us doller for open a fc account in AB Bank Limited After getting the information from customers from I had to put it on the system an after getting all the information system delivers the account number of the customer. Then I had to fill a form which is known as KYC (Know Your Customer) form and approve the account from the operation manager.

Giving requisition for cheque books: Bangladesh Bank has declared to give MICR cheque books to customer which is machine readable. So AB bank has to give MICR cheque books to their customer. In this case AB bank goes with a contractual agreement with the third party who makes MICR cheque books for AB bank and the requisition for this MICR cheque book is given from accounts open department. I usually sent the request to the third party by internet and by the requisition software. I have to verify the signature from teller and then give requisition to the third party. For saving account 20 pages cheque book is available and for the current account 50 pages cheque book is available for the customer. AB provides the MICR cheque within three working days after the requision of cheque books. Receiving cheque books arrange them and give it to the right person: After three days of requisition of cheque books the third party or contracted printing firm send the cheque books to the respective branches. I have to collect the cheque books from them, cheque the requisition list with the provided cheque books. Then I give entry the name of cheque books into a register book. Then it goes to the locker of cheque books according to its account number. When customer comes to get their cheque books I have to collect their signature on to the register copy, check the signature from requisition paper and then give posting the serioul number of cheque books to the system. AB bank charges taka 30 as commission and taka 4.50 as Vat for 20 pages cheque books and and taka 75 as commission and taka 11.25 for 50 pages cheque books. Scan the signature card: Customers have to fill a form to open an account. They also have to give two signatures on that signature card where a passport size photo of the account holder is attached with that card. Accounts opening department has to scan the card for identify or verify the customer and their signatures. After scanning the card it will go to cash or operations department for the same purpose indentify and verify the signature of customers. Updating legacy accounts: Bangladesh Bank has announced to update previous accounts which were opened from the beginning to 2006. AB bank was started their journey from 1988. So it is about 4500 accounts which AB bank considered as a legacy accounts. I had to inform the legacy account holder for updating their accounts and after getting the information

or required papers we filled the KYC (Know Your Customer) form of those accountholders. Then I putted the new information in the database of customers and filled it properly. Customer service: I also had to give some customer service like giving balance, helped them to fill up the account opening form, helped them to understand why their account is closed, provided the information about the rate of interest and charge of different accounts.

Chapter -4

4.0Introduction of The Departments 4.1ABBL Principal Branch

(Branch Code -4005) I did my internship of twelve weeks in ABBL Prince Branch (4005) from 01-03-2010 to 3005-10. This is called the main branch of AB Bank. This is also the biggest branch of AB Bank Ltd. So I got much opportunity to learn different banking activities by doing my internship in the Principal Branch of AB bank Ltd.

4.2 Current Saving Department

In ABBL Principal Branch current saving departments mainly deals with cheques, vouchers and advices. First of all a cheque holder have to present his / her cheque to the person responsible for issuing the tokens. Then cheque is passed on to the operator to entry it in computer. Afterward it will go far signature verification after which it will be given to cashier for payment.

Computer Operations
In ABBL Principal Branch al the operations are recorded in the computer that are as under;

1. Daily Transactions To record all the transactions of deposits made by the people and also to record all the withdrawals made by the people or customers. Each transaction has to be the recorded in its appropriate head of account with the help of described codes.

2. Vouchers To record all the vouchers made by the remittance department. Remittance department have to prepare debit and credit vouchers for about every transaction recorded in their department. Then these vouchers are recorded in the computer. 3. Advices To record all advices received from other branches most of the inter branch or intra branch remittances are subject to ultimate receipt of advices from the corresponding branch to materialize the transaction. These advices also have to be recorded in computer. 4. Statements To close the daily record a number of statements have to be the printed out. Like

Everydays transaction (sequence ) Overdrawn facilitated a/c.

 Statements markup sheet. Inter branch transactions. Detail of PLS and current a/c Days transaction ( a/c wise) Operative, Dormant, Inoperative and Unclaimed a/c Summary of al a/c ( debits, credits & balances) Profit due, transferred, disbursed etc.

4.3 Account Department Deposits are the Life Blood of A bank. Borrowing funds from outside parties is more important because the entire banking system is based on it. Receiving of deposits is basic function of all commercial banks. Commercial banks do not receive these deposits for safekeeping purpose only. When the bank receives the amount of depositors as a depositor, it becomes the owner of it. The bank may therefore use deposits, as it deems appropriate. But there is an implicit agreement that the amount owned by the bank will be paid back to the depositors on demand or after a specified period of time. The borrowed capital of the bank is than the bank of own capital. Banks borrowing is mostly in the form of deposits. These deposits are lend-out to different parties larger the difference between the rate at which these deposits are borrowed and the rate at which they lend out. The greater rate will be the profit margin of the bank. Larger the funds lend out the greater will be the return earn on them and greater the amount of return on these earned greater will be the profit of the bank. It is because of this interrelated relationship. Deposits are referred to as the life blood small for any banking sector.

Types of Account

 General Products are :

Current deposit: Interest Rate 0.00% Individual Account Joint Account Proprietor ship Account. Limited Company Account.

Savings Deposit: Interest Rate 6.00% Individual Account Joint Account

Short Term Deposit: Interest Rate 5.00% Proprietorship Account. Limited Company Account.

Fixed deposits: Fixed deposit is one, which is repayable after the expiry of a pre determined period fixed by him. The period varies from 1 month to 12 months. These deposits are not repayable on demand but they are withdrawing able subject to period of notice. Hence, it is popularly

known as Time Deposit or Time Liabilities. Normally the money on a fixed deposit is not repayable before the expiry of a fixed period. Before opening a fixed deposit account a customer has to fill up an application from which contains the followings: In case of fixed deposit account the bank needs to maintain a cash reserve. So ABBL offers a high interest rate in fixed deposit accounts. The interest rates followed by ABBL fixed deposit accounts are:

Interest Rate:
1. 1 Months and above but less than 3 months : 8.50%

2. 3 months and above but less than 6 months 11.00% 3. 6 months and above but less than 12 months 11.25 % 4. 12 months and above : 11.75% The FDR becomes renewed automatically in ABBL if the customer does not encash it within 7 days of maturity. In case of encashment of FDR in maturity, following accounting treatments are given Excise Duty on FDR..Dr Income Tax on interest..Dr FDR A/CDr Cash A/CCr Interest on FDR.Cr If the customer wants to draw the interest rate only, then following entries are givcn: Interest on FDR A/CDr. Cash A/C.Cr.

In case of Before Maturity Encashment interest is calculated for the days from the date of opening the FDR account.

4.4 Credit Department Lending Principals The basic function of the bank is to accept deposit and lend money to the borrower against a spread so to be able to give some profit to the depositors as well as to earn profit for the bank. While lending money to the borrower the bank should observe the following lending principals:
Safety Principals: It means that the lend money will come back along with interest or

service charges etc. The borrower should not invest the borrowed money in unproductive or speculative business. Liquidity Principals: The money which has been lended to the borrower should be returned to the bank on demand or as repayment schedule provided by the client. The sources of repayments should be clear and definite. Purpose Principals: The purpose of the advances should be legitimate and productive. It should be ensured that the banks, funds are not being utilized for speculative business. The credit restrictions by the central bank should not be violated & it should be ensured also. It is always beneficial for the bank to finance for short time requirements. Profitability Principals: The end result of every business activity should be to earn some profit. Similarly the bank must get some profit out of the activity of lending money. So that the depositors could get their shares as well as the shareholders could earn something from their investment.

Security Principal: The proposal should be dealt on its merit not on security. The

security should be considered a safety for the bank only in case of unexpected

emergencies. All the relevant documents of securities must be obtained & got valuation of the property or any other security should be assessed correctly.

Spreading of Risk Principals: It is always safe for the bank to spread the risk in large number of borrower instead of loaning huge amount to few big shots. It is better to obtain different types of securities instead of concentrating on one security.

National Interest and Suitability Principal: It is our moral as well as legal obligation to ensure that no loaning is running counter to national interest. It is our duty to ensure that our lending policies are not against the social conditions or bindings.

Functions of Credit Department The main function of the credit department is to lend money to the customer. AB Bank Ltd. Lends money in the form of clean advances against promissory notes as well as secured advances against tangible and marketable securities. Beside these ABBL also lend money against life policies and immovable property. LIEN Lien is the bank right to with hold property until the claim on the party is paid. The bank looks at their liens as protection against loss or overdraft or any other credit facility. In ordinary lien the borrower remains the owner of the property, but the actual or constructive possession remains with the creditor or bank though the borrower has no right to sell it.
By Cash Credit: In this the bank lends money to the borrower against tangible security.

The total amount of loan is not paid in one installment. The borrower has to pay the markup on the amount borrowed. Cash credit is favorite loan for large commercial and industrial concern. By Overdraft: This is the most common type of bank lending. When a borrower requires temporary accommodation, ABBL allows its customer to withdraw an excess of the balance from their account which is borrowing customers have in credit and thus called overdraft. This facility is given to regular, reliable and well established customer. When it

is against collateral securities, it is called Secured Overdraft & when borrowing customer can not get the offer of any collateral security except his or her personal security then the accommodation is called Clean Overdraft Types of Finance Short Term Finance

AB Bank Ltd. receives the saving of the people and lends it for short term to its customer. Short term finance is generally given for a period of one year or less in duration.

Medium Term Finance

The duration range of the intermediary term finance is from one year to three years. It is called the term loan. Intermediary term finance is usually given for the expansion of an existing business or for the purchase of new equipments.

Long Term Finance

This type of finance is required for the period of more than five years. Long term finance is generally given for the compilation of big projects, for the construction of business and for the purchase of machineries.

Procedure of Applying For Loan Any customer who applies for loan should have an account (usually current account) with ABBL branch concerned. That account must be in running position. When approval from

head office is given, branch gives term & condition to the party. Bank does not advance 100% loan against a security, rather the profit margin is different in different types of loan.

4.5 Remittance Department Another important department in ABBL is Remittance department. The remittances department transfers the funds from one bank to another bank and from one place to another place. In remittance department the collection take place. ABBL made payment of only open cheques on the counter and prohibits the payment of cross cheques. ABBL transfers money from one place to another by the following means:

Mail Transfer

When a customer requests the bank to transfer his money from this bank to any other bank or the branch of the same other bank, the first he has to do is to fill an application form. If the customer is not the account holder of this bank, then firstly he has to deposit the money and then above procedure will be adopted to transfer his money. Different banks and different branches give mail to transfer the money.

Telegraphic Transfer

With the changing requirement of the customer, ABBL has introduced the fastest transfer of money. The sender is required to apply through a form in which he will give all the necessary details about the sender and beneficiary. The sender deposits the money to be transferred plus bank charges at the bank counter. The remittances officials send a telegram to concerned branch with a specified code words and the receiving branch makes payment to the beneficiary. Vouchers are sent by ordinary mail to keep the record. On TT, no excuse duty is charged only commission and telegram charges are charged.

Pay Order

Pay order is the most convenient simple and secure way of transfer money. It is issued by, drawn upon and payable by the same branch of the bank. It is neither transferable nor negotiable and such as it is payable to the payee named there in. The following are the parties to a pay order:

Purchase is a person, firm, company or local authority. Issuing/ paying branch is one which issues/pays on presentation. Payee is a person named there in.

Demand Draft

Demand draft is another way of transfer money from one bank to another bank. Unlike pay order, a form is required to be filled for the issuance of the demand draft in which necessary particulars about the beneficiary and sender are given. The sender deposits the amount of DD plus commission and other charges on the bank counter, from where he is given a receipt and accordance with this receipt he is issued.

The following are the main essential of the draft:

It is a negotiable instrument. Filling a form and depositing the amount written about on it. It is a written order to its branches or to another bank to pay the stated amount on draft.

4.6 Cash Department This is the most important and critical department in a bank. There are two basic functions performed by the cash department. These are

Receipts An individual who has account in the bank can deposit money in his account. For deposit of the money the individual has to fill the deposit slip in which the account holder writes his

name, account number, amount of money both in figures and in words. After filling the deposit slip the cash amount along with the deposit slip is submitted to the cashier. The cashier collects the cash and counts it after verification the cashier stamps the deposit slip. One part of the deposit slip remains with the bank for the record purposes. The cashier also record the deposits made by the customer in credit sheets daily. The deposits of all customer of the bank are controlled by mean of ledger account and has separate ledger cards in which his /her total record is kept. Bill collection is also one of the main functions of bank. Cashier has to prepare a list of bills serial number, a copy of which is to be sent to the corresponding organization. Payments The procedure of clearance of a cheque or payments is as following. First of all the customer presents his cheque to the cashier. The cashier records the account number and the amount, which is to be drawn. Then the cashier check the cheque number in the computer for the verification whether the account has such amount is his account which he is demanding or not. If the computer passes the cheque, the passing officer signs the cheque and sent it to the cash counter then the cashier pays the written amount to the customer and then in the end cashier records the amount paid in computer.

4.7 Clearing Department In clearing process, if the account holder of ABBL receives the cheque of other bank like City Bank, Prime Bank etc and he submits it in ABBL branch then it needs to be cashed. At the same time the clearing process starts. When the cheque is cleared then the today stamp is required. Some cheque is drawn on ABBL. This is called outward clearing. These cheque will be entered in the outward clearing register and the advices is sent for the clearance of cheques. Then account holder account is credited. OUTWARD BILL FOR COLLECTION OBC means the cheque of other banks. When they sent OBC the OBC is credited & the OBR is debited and the advice is made on that time, one copy is remain in the bank and the other copy is sent to the related branch. When they realized the opposite entry is made it is entered in the OBC register. The income a/c commission is credited and postage.

Chapter -5

5.0 Financial Product Offered By ABBL

The product is usually the basis on which customer satisfaction is created. As such it is vital component of the marketing mix. The product provides the basis for competition, it enables ABBL to generate income and it can provide a tangible indication of the strategies direction of ABBL Thus ABBL has become increasingly concerned with a number of issues surrounding product strategy, including The process and procedure involved in the development of new financial services and products. The factors which contribute towards the successful adoption of new product.
How to manage the product over its life to perfect it from competition.

How to use branding to differentiate the product from the range. How to implement the withdrawal process with minimal adverse effects for the banks as well as the customer.

5.1

Retail Banking
Unsecured Loans

Product Name Target Customer

Personal Loan Employees of reputed Local Corporate, MNCS, NGOS, Airlines, Private Universities Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self Employed professionals ( Doctors, Engineers, Chartered Accountants, Architects, Businessman)

Loan Amount Charges

Minimum TK 25,000.00 Maximum TK 5,00,000.00 Application fee Tk 500.00 Processing fee: 1% on the approved loan amount or TK 2000.00 whichever is higher. Min 12 months Max 36 months 14.50% p.a-17.50% p.a Hypothecation of the product to be purchased. Two personal guarantees ( as per our list of eligible guarantors)

Tenor Rate of Interest Security

Product Name Target customer

Auto Loan Employees of reputed Local Corporate, MNCS, NGOS, Airlines, Private Universities Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self Employed professionals ( Doctors, Engineers, Chartered Accountants, Architects, Businessman. To purchase Brand new vehicle, non registered reconditioned vehicle.

Purpose

Loan Amount

70% for the brand new car 60% for the reconditioned car but must not exceed BDT 10,00,000.00 Application Fee : TK 500.00 Processing Fee: 1% on the approved loan amount or TK 5000.00 whichever is higher. For Recondition Car: Max 36 months For Brand new car: Months. 14.50% p.a-17.50p.a Hypothecation of the vehicle to be purchased. Two personal guarantees (as per list of eligible guarantors)

Charges

Tenor Rate of Interest Security

Product Name Target Customer

Easy Loan ( For Executives) The loan is specially designed for salaried people who are employed in different reputed companies. Marriages in the family, purchase of office equipments/ accessories, purchase of miscellaneous household appliances, purchase of personal computers, purchase of audio- video equipment, purchase of furniture, advance rental payment, trips abroad, admission / education fee of children etc. Minimum TK 50,000.00 Maximum TK 3,00,000.00 Application fee TK 500. Processing fee TK 1% on the approved loan amount or TK 1000.00 whichever is higher Min 12 months Max 36 months 16.00p.a Letter of confirmation from the employer. One personal guarantee (as per list of eligible guarantors)

Purpose

Loan Amount Charges

Tenor Rate of Interest Security

Product Name Target Customer

House /Office Furnishing/ Renovation loan Expatriate Bangladeshi Nationals who are in business or service holders. Employees of reputed banks & Leasing companies, reputed local corporate, MNCs, NGOs, Airlines,, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies. Government employees, self employed professionals, reputed and highly respectable

Purpose

businessman with a reliable source of income. House / office furnishing/ renovation, for interior decoration/ electrical fittings, wooden cabinets, purchase / furnishing of apartments etc. Min TK 1,00,000.00 Max TK 10,00,000.00 Application fee TK 500.00 Processing fee 1% on the approved loan amount or TK 2000.00 whichever is higher. Min 12 months Max 48 months 16.50p.a Title deed of the House/Office to be furnished/ renovated along with memorandum of deposit of title deed duly supported by a notarized power of attorney to be kept by the bank as a matter of comfort, Two personal guarantees ( as per our list of eligible guarantors). Registered mortgaged of the property if the loan amount is more than Tk 5.00 lac.

Loan Amount Charges

Tenor Rate of Interest Security

Product Name Target Customer

Gold Grace Jewelery Loan Both female and employees of reputed banks & Leasing companies, reputed local corporate, MNCs ,NGOs, Airlines, Government employees, self employed professionals, reputed and highly respectable businessman with a reliable source of income. To purchase ornaments/ jewellery for personal use. Minimum TK 50,000.00 Maximum TK 3,00,000.00 Application fee TK 500.00 Processing account fee: 1% on the approved loan amount or TK 1000.00 whichever is

Purpose Loan Amount Charges

Tenor

higher. Min 12 months Max 36 months

Rate of Interest Security

16..00p.a Letter of confirmation from the employer. Personal guarantee from the parents and spouse.

Product Name Target customer Purpose

Staff Loan All permanent employees of AB bank. Marriages in the family purchase

of

miscellaneous household appliances purchase of personal computer purchase of audio-video Loan Amount Charges Tenor Rate of Interest Security equipment purchase of furniture. According to the debt burden ration and other criteria Processing fees 1% on the approved loan amount. Min 12 months Max 36 months 15.50p.a. Hypothecation of the product to be purchased.

Product Name Target customer

Education loan. Students criteria Students of reputed educational institute, such as public & private universities, medical colleges & engineering institute. Undergraduate & Post graduate level. Professional Accountants MBA). Doctorate degree (PhD), FCPS ETC. Occupation : Student Minimum age : 17 years degrees (Chartered MBM. Accountants (CA), Cost& management (CMA), Marine,

Maximum age : 40 years Educational Qualification: Minimum HSC / A Level Pass.

Parents Criteria: Service holder: Individuals with ranks equivalent to Senior Assistant Secretary or higher qualify guarantor. Banks officials (Equivalent to Senior Principal Officer of NCBs, AVP/ Branch Manager of Local and Foreign Banks) and Department Head of Multinational Company or established Local Corporate. Guarantors must be accepted by the Branch Manager/ Head office. Businessman : Purpose Loan Amount Charges Tenor Rate of Interest Security Well reputed and widely respected self employed professionals. To financially assist the parents: Admission/ Education fees, Semester fees, Study abroad. Minimum TK 50,000.00 Maximum TK 3,00,000.000 Min 12 months Max 36 months 14.505p.a -16.00%p.a One personal guarantee (as per list of eligible guarantors.)

Secured Loans
Product Name Target Customer Purpose Loan Amount Personal Loan All clients of ABBL. To meet personal requirement of fund. Maximum 95% of the present value of the security

Charges Tenor Rate of Interest

Processing fee: TK 1000.00 Min 12 months, Maximum 36 months 13.50%p.a -16.50p.a (subject to type of the security). 2 % spread must be maintained in case of own bank FDR. Lien over FDR,BSP,ICB

Security

Unit,

RFCD,NFCD,CD accounts etc. one personal guarantee in case of third party cash collateral (as per list of eligible guarantors)

Product Name Target Customer Purpose Loan Amount Charges Tenor Rate of Interest

Personal Loan All clients of ABBL. To meet personal requirement of fund. Maximum 95% of the present value of the security Processing fee: TK 1000.00 Min 12 months, Maximum 36 months 13.50%p.a -16.50p.a (subject to type of the security). 2 % spread must be maintained in case of own bank FDR. Lien over FDR,BSP,ICB

Security

Unit,

RFCD,NFCD,CD accounts etc. one personal guarantee in case of third party cash collateral (as per list of eligible guarantors)

Product Name Target Customer Purpose Loan Amount Charges Tenor Rate of Interest

Personal Overdraft All clients of ABBL To meet personal requirement of fund. Maximum 95% of the present value of the security Processing fees TK 1000.00 Revolving with annual review 13.50%p.a- 16.50%p.a (subject to type of the security). 2% spread must be maintained in case of own bank FDR. Lien over

Security

FDR,BSP,ICB

Unit,

RFCD,NFCD,CD accounts etc. one personal

guarantee in case of third party cash collateral (as per list of eligible guarantors)

5.2

Corporate Banking
AB Bank provides complete range of solutions to meet Corporate Customers requirements. Its Corporate Banking solutions include a brand spectrum of products and services backed by proven, modern and technologies. Corporate Lending The specialist teams offer a comprehensive service providing finance to large and medium sized business based in Bangladesh. For more information as to how they might best meet customers corporate debt needs, the customers need to contact to the Corporate Head Office.

Structured Finance AB Bank has a specialist Structured Finance Team who arrange and underwrite finance solutions including Debt and Equity Syndication for financial sponsors, management teams and corporate. They also provide corporate advisory services. They aim to provide tailored financing solutions with a dedicated team who can rapidly respond to client needs Following are some of the products and financial tools of Corporate Banking: Project Finance. Working Capital Finance. Trade Finance. Cash Management. Syndicated Finance, both onshore & off-shore.

 Equity Finance, both onshore & off-shore. Corporate Advisory Services.

5.3SME Banking

Considering the volume, role and contribution of the SMEs, AB Bank has been patronizing this sector by extending credit facility of different types and tenor. As of now 54% of the banks total loan portfolio is segmented to the SMEs which deserves all out attention in plans, projection and forecasting.

As such the bank has emphasized on the following issues:

To provide the best services to the SME sector. To increase the SME portfolio of ABBL significantly To improve the quality of ABBLS portfolio.

SME Sector in which AB Bank has participated so far: Agro machinery Poultry Animal Feed Dairy Product Fruit Preservation Hotel & Restaurants

 Garments Accessories Leather Products Plastic Product Furniture : Wooden & Metal Ink Paint Printing & Packaging Wire & Cable Aluminum Cement & Lime Plaster Clinics and Hospitals Engineering & Scientific Instruments. ABBL offers the following SME loan products: I. II. III. IV. V. VI. Uddog loan. Goti loan. Aparajita loan. Proshar loan. Choto puji loan. Digun loan.

Large Loan & Project Finance

In order to cater the demand of client of AB Bank has segmented its loan size. As per this segmentation any loan over TK 10.00 core falls under the preview of large loan unit.

 In AB Bank, there is also a separate Project Finance unit who evaluate the business.

The unit is entrusted to handle the portfolio in a focused manner. AB Bank is always in front to support establishment of new projects of diverse nature which will help to broaden the manufacturing arena to generate to employment. At the moment AB has participation in 19 syndicated facilities. AB Banks exposure in the ongoing syndication is TK51560.29 lac which is diversified in the following ten sectors.

SL Sector 1.Textile 2. Micro Finance 3. Cement 4.Energy & Power 5.Telephone (PSTN) 6.Glass 7.Sugar 8.Steel Mills 9.Paper 10.Chemichal Total

ABBL Participation (fig in Lac TK) 9,533.57 3,000.00 7,990.00 11,997.00 5,500.00 900.00 900.00 9081.72 1158.00 1,500.00 51,560.29

5.4Non Resident Bangladeshi (NRB) Banking

Facilities offered to NRBS Opening of Foreign Currency Account AB Bank opens foreign currency Account in USD/GBG/EUR/JPY for NRBs. Foreign currency can be remitted by the Nationals of Bangladesh living Abroad earned by them as wage earners or from other sources. The deposit amount can also be used for remittance

to other countries as per their requirement. Nominee of account holder can also able to operate this account. NFCD AB Bank issues Foreign Currency Fixed Term Deposit in USD/GBP/EUR with different tenure. Interest is paid in respective Foreign Currency. Rates of interest are published in daily exchange rate. Wage Earners Development Bond These bonds can be issued from the balance of the FC account with the tenure for five years. Rate of interest is 12% p.a in BDT. USD Premium Bond These bonds can be issued from the balance of the balance of the FC account with tenure for Three years. Rate of interest is 7.5% p.a in BDT. USD Investment Bond These bonds issued from the balance of the FC account with tenure for three years. Rate of interest is 6.5% p.a in USD. In addition to the above, they also have drawing arrangements with 14 years. Exchange / Money transfer Remittance Houses all over the globe to facilitate fast, reliable and hasslefree inward remittance to the expatriate Bangladeshis around the world. They also have special arrangements to credit beneficiarys account maintained with them on the same day thorough extensive real time online network.

Lending Rates Products 1. Agriculture 2.Large and Mid Rate 13.00% medium 13.00% Interest Rate W.E.F October 06,2009 13.00% 13.00% 13.25%-16.25%

scale industries 3.Small Industries ( Term 14.75% Loan)

4.Working Capital a)Large and medium 13.00% 14.50 7.00% 13.00% 13.00% 16.00% 2.00% per month 13.00% 13.00% 13.00%-16.00% 7.00% 13.00% 13.00% 14.50%-17.50% 2.00% per month 13.00% 11.00%-14.00% 12.00% -15.00% scale industries b) Small Industries 5.Export 6.Commercial Lending 7.Housing Loans 8.Consumer Credit 9.Credit Card 10.Fianance to NBFIs 11.Others 1. Cash ABBL FDR 2. Cash Collateral- Other 13.50% Banks FDR or WDB 3.Women (Awparajita 50.00 lac) Entrepreneur 10.00% upto TK 10.00%

Collateral- 12.50%

4.Special Scheme LoansSME

14.00%

13.00%-15.00%

5.5Islamic Banking
To provide the Islamic banking services in accordance with the principles of Islamic Shariah, AB Bank has established Islamic Banking wing and started its functioning by opening fully fledged Islamic banking branch on 23.12.2004. The branch is known as AB Bank Islamic Banking Branch, Kakrail and is situated at 82, Kakrail, Ramna , Dhaka. Prominent Islamic Banker Mr. M Azizul Huq joined the Bank as its Islamic Banking consultant. A dedicated team of experienced Islamic Bankers are working under his active guidance both at Head office and branch level.

A component Shariah Council consisting of Islamic scholers, ULEMA, FUKAHA and Islamic bankers headed by Mr. Shah Abdul Hannan, a prominent Islamic scholar and former Secretary, Government of Bangladesh has also been formed to guide the Islamic Banking affairs, Board of directors as well as management of the bank are very much interested to promote Islamic banking system in the bank aiming at opening more Islamic Branches in the near future. AB Bank has already obtained membership of Islamic Banks Consultative Forum (IBCF) and Central Shariah Board for Islamic Banks of Bangladesh.

The goals and objectives of Islamic Banking wings are as under: To facilitate the Islamic banking system in the country. To create new entrepreneurs and to arrange required finance for them. To play effective role for socio economic development of the country. To give assistance in launching welfare oriented economic system under Islamic values.

Under this wing AB Bank extends the following Islamic banking services: Deposit Services. Investment Services.

Under deposit services the following services are being rendered: Mudaraba Savings Account. Mudaraba Short Noticed Account. Mudaraba Term Deposit Account (with different terms). Mudaraba Monthly Profit Account.

Al-Wadiah Current Deposit Account. Mudaraba Deposit Pension Scheme.

Foreign Trade: Islamic Banking Wing provides the following services as its foreign trade desks: Opening of LCs Post Import Finance Export bill purchase and negotiation. Pre- shipment financing. Etc. AB Bank Islamic Banking wing has been continuously trying to expand its service horizon keeping the necessity of valued clients in view and upholding the principles of Islamic Shariah.

5.6Investment Banking
Merchant Banking Custodial Service Brokerage Service Future Products

Merchant Banking Wing (MBW)

To expand its horizon, ABBL launched its Merchant Banking operation in the year 2003. As a fully fledged merchant banker, they provide the following services: 1. Portfolio Management. 2. Issue Management.

3. Underwriting. 4. Corporate Advisory. 5. Private Placement. The Merchant Banking wing (MBW) of ABBL has made notable progress and is presently equipped to serve customers needs by offering a comprehensive range of financial solutions. They also have launched Custodial Services with a view to provide one stop Capital Market services to our valued clients. They understand an entrepreneurs need for stability, trust, innovation and creativity required for the consolidation and growth of investments and endeavors to prosper. The professionals in MBW with its state of the art integrated computerized system, are always there to provide their vision, knowledge and service for the success of the customer.

Custodial Service Customers Investors who are interested to invest in the Bangladesh Capital market
Nonresident Bangladeshi. (NRBs)

Foreign institutional and individual clients. Local institution Sponsors group and high net worth client. Services Safe custody of client securities. Foreign trade execution and settlement. Share transfer in the name of client. Complete the Dematerialization process as per client request.

 IPO, Private Placement & Right share subscription as per client instruction with deposit. All types of corporate action that includes cash dividend, bonus share and right share collection. Open BO Account. Instant information regarding client securities positions as per their request. Quarterly reporting to the client by Custodial Department. Brokerage Service AB Bank Foundation (ABBF) is a subsidiary company of AB Bank Ltd having holding 99.60% share of the ABBF. The company was first established under the trust deed constituted and registered on the 14th day of May 2002. Subsequently the trust by a resolution of its Board of Trustee in its third meeting held on 29.12.2002 resolved to cancel the Trust Deed and utilize the trust fund for the foundation of a company limited by guarantee primarily for charitable purpose. Then the company was incorporated on 3rd day of November 2003 under section 28 of Companies Act 1994, a company limited by guarantee. The certificate of incorporation is C- 558 (10)/2003. The ABBF and its activities: AB Bank Foundation (ABBF) is one of the countrys leading security broker houses of Dhaka Stock Exchange (member # 201) and Chittagong Stock Exchange (member # 101). ABBF has started its operation by soft launching on 28th August 2006. Initially, they have started operation by giving to client of AB Bank Merchant Banking wing. They have already started operation in full swing in corporate head office and Chittagong. In near future, they will start their Mohakhali and Agrabad Branch operation. Services: 1. Brokerage Services AB Banks subsidiary, AB Bank Foundation, which has corporate memberships on Dhaka and Chittagong Stock Exchange, can act as brokers on behalf of local

and foreign individual and institutional client to trade in the local capital market. AB Banks Sales & Trading Department will also support brokerage services for offloading shares through direct listing.

2. CDBL Services as full service Depository Participant (DP)

As a full service depository participant, AB Bank Foundation provides following services: A. BO (Beneficial Owner) accounts opening and maintenance. B. Dematerialization. C. Re Materialization. D. Freeze (freeze request and release request) and suspensions. E. Pledging and confiscation. F. BO ISIN balances and master maintenance enquiry.

5.7New Products 5.7.1Ogrim Munafa Patra

A depositor may purchase on OMP by depositing the discounted value of the principal a receipt for TK. 100,000 with a maturity of 12 months (at12% interest rate) the depositor will have to pay TK. 89,286/- for purchasing the OMP certificate to any individual, business organization and institution. Simply a minimum of TK. 25,000/- OMPs shall be available for three, six and twelve months maturity tenures. 12 percent Govt tax and duties are applicable. Loan facilities will be available at any of the 73 branches of AB Bank. 5.7.2 Be a Millionaire in 3 Years

The dream of becoming a millionaire is no longer a distant one. Anyone can actually become a millionaire, that too within a space of three to six years, by opening an AB Bank Millionaire Scheme Account (MSA) Monthly deposit of Installments. At the end of the respective term, total savings with interest, after deduction of Government tax and duties, will amount to One million Taka. Any individual, business organization or institution can open an MSA. MSAs can be opened for three, four, five or six- year terms.

Interest Rate 12.00% 12.00% 11.50% 11.50%

Tenor (years) 3 4 5 6

Monthly Savings 23,602/16,766/12,836/10,138/-

Gross Return 1,016,711/1,021,748/1,025,586/1,030,084/-

Income Tax (Currently 10%) 16,704/21,698/25,543/30,015/-

Net Return

1,000,007/1,000,050/1,000,044/1,000,070/-

5.7.3Troimashik Munafa Hishab

Any individual, business organization or institution can open a TMH. Interest will be paid every three months from the date of opening of the account. Interest will be credited automatically to the designated account. Time of withdrawal Within six months Between six months Second Year Third Year Rate of Interest Nil Prevailing Saving Bank Rate 9% 10%

Chapter 6 6.0 Marketing Strategies Adopted by AB Bank Limited

A marketing strategy can be defined as the outlines of broad marketing logic by which the business unit hopes to achieve its marketing objectives and the specific of target markets, positioning and marketing expenditure levels. It outlines specific strategies for each marketing mix element and explains how each responds to the threats, opportunities and critical issues spelled out in the marketing plan.

6.1Understanding Consumer
Understanding customer and customers needs and requirements is the guiding philosophy of marketing. A marketing orientation requires the organization to view its business from the point of view of its customers. This demands an insight into the wider aspects of customer psychology and behavior, including what motivates customers, what their attitude and

perception about the company and its products as well as an understanding of their decision processes.

6.2 Identifying & Targeting Financial Prospects

In addition to understanding the broader pattern of consumer behavior, the development of an effective marketing strategy requires AB Bank to understand the differences among customers and their financial products requirements. This issue of customer differences can be identified through market segmentation. The benefits of market can be an aid in designing marketing strategy.

The accuracy of AB Banks identification of marketing segmentation contributes to its competitive advantage since it is one of the conditions of developing an effective marketing strategy. A number of conditions have been noted to affect the effectiveness of potential profitability of marketing strategy like measurability, substantiality, accessibility, actionability and differentiability of the target. Again ABBL formulates different segmentation on the basis of geographic or demographic variables.

Segmentation: Bases for segmenting customer Understanding customer and their needs and requirements are important for developing marketing strategy. The factors that ABBL emphasize to identify the needs and requirements are as follows: For corporate customer Financial Strength and credit worthiness. Marketing Positioning. Reputation and Integrity. Industries.

 Listed Companies. For personal banking Occupation Income and propensity to save Attitude toward banking Market demand Geographic concentration. 6.3 Product Differentiation Strategies Innovation of new products is the main product differentiation criteria that ABBL uses. They also modify their offerings from that of their competitors. They do this by analyzing the reports, brochure or with client interview, Central Banks information & regulations, lending rate, deposit rate etc. The main criterion for differentiation is made by the pricing policy through lowering the lending rate from their competitors. Other criteria for differentiation are: maturity of products, market demand and geographic concentration. Following are the major common criteria for differentiation of financial products in ABBL: Rank Differentiation Criteria 1. Pricing policy/ Interest rate 2. Maturity of products 3. Market demand /Trend
4. Geographic concentration.

6.4 Channels of Distribution

Distribution involves a wide variety of activities culminating in the creation of three types of utility: time, place and possession. In terms of time, distribution allows the customer to gain access to financial service when it is convenient for them to buy. In terms of place, distribution makes products and services available to customers in locations which are accessible and convenient to them. With regard to possession distribution provides the customer with access to the product for consumption or future use. In addition to this, distribution function also provides a means of effectively communicating with the customers and for customers to communicate with the Bank.

6.5 Pricing for Financial Products

The pricing of a financial product can appear in many guises: some prices are obvious, some are not, some are based on monetary value and others are not. For example the price of a financial product may be the interest rate of a loan, the notice required to withdraw money from an account, a free charge for advice given and commission paid to an intermediary such as a broker, the tax paid on a interest earned on saving etc.

6.6 Corporate Social Responsibility

AB Bank has contributed taka 0.5 million to support continuous and smooth functioning of Mosabbir Cancer Care Centre as part of the Banks CSR initiative. The financial assistance would help the centre to meet necessary day-to-day expenses. Under Corporate Social Responsibility (CSR) initiative, AB Bank takes pride in joining hands with Mosabbir Cancer Centre, a non profitable philanthropic organization which aims at extending professional services in the form of counseling, diagnosis, consultation and treatment of cancer patients particularly to children suffering from terminal diseases. The centre has stepped into its 6th year of operation and has rendered services to approximately 800 poor and helpless cancer patients. As part of corporate philosophy, AB Bank is always committed to the well being of the society.

In recent days, AB Banks social welfare events have significantly increased the CSR penetration. Database Marketing ABBL has recently started customer database for marketing purpose. ABBL uses database for marketing of their products Internet Banking ABBL has their own website. Internet Banking has already been started. But the operation is not so much extended. Following are the common features are the common features of Internet Banking: View account balances and transaction history. Verify deposits. Check loan balances. Check loan payment information. View interest information. Various information regarding products.

Chapter -7

7.0 Customer Services Offered By ABBL

7.1Credit Cards
In the present context of banking business in the world, Card is the feature of any bank. Electronic payment system is now ruling the world and some days from now cash transactions system will turn into a history found only in the text book. AB Bank Limited is one of the leading first generation private sector commercial banks with Branch network all over the country. The bank started issuing VISA Credit Cards from the end of year 2004 as a principal member of VISA International. Brief description of different features: Card Conversion & Balance Transfer Plan Card Conversion & Balance Transfer Plan to AB Bank VISA Credit Card will be extended towards all local Credit Card holders of the market, provided that their other banks credit card is in regular state, not in overdue state. Cardholders will repay the approved transferred amounts to AB Bank Credit Card Account in monthly installments stated in their monthly statements. Other bank credit cardholders having regular payment history will also be allowed to apply for this facility along with their new AB Bank Credit Card application form. Customers can convert their other bank card to AB Bank Card and get interest facility at 19.95% on their outstanding. Easy Buy Easy Buy installment plan to AB Bank VISA Credit Card will be extended towards all AB Bank Visa Credit Cardholders. Cardholders can convert any retail purchase done using AB Bank credit card into an installment scheme where they can pay back the amount at rate of interest of 19.95% per annum over a tenor ranging from 6 months to 48 months.

Easy, convenient and affordable Under the Easy buy program, cardholders can choose own installment plan, ranging from 6 to 48 months 1. Simple procedure, no documentation, no down payment. 2. Available in comfortable payment options of 6 months to 48 months. 3. Process just a call away. No cash advance fee No cash advance fee for cash withdrawal from AB Bank ATM booths & Tk. 10 only will be charged for per cash withdrawal will be charged from other Q Cash ATM booths. Market rate is Tk. 125 for per cash withdrawal. Auto bills pay facility Hassle free monthly payment for AB Bank account holders Higher transaction limit AB Bank VISA Card gives the facility to withdrawal up to Tk. 60,000 or 50% of credit limit (whichever is low)of the credit limit from any ATM VISA logo. Lot more features are in the pipeline to add more value to satisfy AB Bank customer.

7.2

Safe Deposit Locker

A safe deposit locker with AB Bank is the solution to the customers concern. These safety lockers located at selected branches in cities all over the country. The lockers ensure the safe keeping of customers valuables. Advantage / Key Benefits Wide Availability. Lockers available in various sizes. I.e. Small, medium and large with varying rents.

 Lockers are rented out for a minimum period of one year. Rent is payable in

advance. The rent may be conveniently paid from the deposit account. Direct debits for locker rentals from the customers account rid the customer of the hassle in writing out cheques. Eligibility An individual (not minor), firms, limited company, association, clubs, trusts, societies etc may hire a locker. Nomination for Safe Deposit Locker The lockers and their contests can be nominated to people near and dear to the customer. Nomination facilities are available to individual hirer of safe deposit locker. In the case of a sole hirer of a safe deposit locker, nomination can be made in favor of only one individual.

Where the safe deposit locker is hired in the name of a minor, the nomination will be made by a person lawfully entitled to act on behalf of the minor.

Terms & Condition For obtaining a locker at AB Bank one must be an account holder with AB Bank. Lockers can be allocated individually as well as jointly. The locker holder is permitted to add or delete names from the list of person who can operate the locker and can have access to it. Loss of key is to be immediately informed to the concerned branch.

For schedule of rentals, the customer needs to contact the branch nearest to them.

7.3 New MICR Cheque Book

AB Bank has started issuance of new cheque book from June 01, 2009 as per Bangladesh Bank guideline. One can conveniently collect new cheque books from his Account Opening Officer of different branch of AB Bank. As per Bangladesh Bank instruction they have implemented MICR coded cheque book from June 6, 2009 which will be customized by the Bank. MICR is a process of printing cheques using magnetic ink and special fonts to create machine- readable- information. It is the first step towards electronic cheque clearing process. The new MICR coded cheque book will facilitate: Quick processing and faster cheque clearing time. Prevent cheque related fraudulent activities.

In this regard, the bank would request the customer to collect the new cheque book on before July 31, 2009. Bangladesh Bank Clearing House will not honor existing chequebook leaves after April 30, 2010. However, they may continue to use their existing chequebooks to withdraw cash over the counter or to transfer funds to another customer of AB Bank Limited at any of their branches. They would therefore request the customer to submit their requisition slip duly signed by them from their old chequebook for new Personalized MICR- Encoded cheque book will be supplied within 3 (three) working days on receipt of the requisition.

7.4 AB Bank VISA Electron Debit Card

If the customer is maintaining an account with any of the branches of ABBL, then they are able to have ABBL Visa Debit Card. Only thing they need to do is, visit any branch and fill

up the application form and submit it. Then they will receive their card within 7 working days. Tips for usage Card Activation

After receiving the card, the customer need to sign the acknowledgement slip and send it to Card Division or any Branch of ABBL or call Card Division for activation.

The customer needs to put his signature on the signature panel at the back of his card.

Caution during making transaction The customer should not let his card be taken out of his sight at any merchant outlet to prevent possible misuse. After using the card at a merchant outlet, customer need to ensure that the card returned to him is his card.

Before signing the sales slip cheque at the amount charged, the customer needs to retain the copy of the sales slip of all transactions until they appear in his card account statement for his future reference.

PIN Maintenance The customer should destroy the PIN mailer after memorizing the PIN. The customer should write the PIN on the card or keep the PIN inside the wallet. The customer should change the PIN every month.

For Lost/ Stolen Card If the card is lost or stolen, the customer simply needs to call AB Banks Help Desk at 9558510. He can also report the loss by fax to ABBL, Card Division immediately.

Lost Debit / Credit Card For lost Debit / Credit Card customer need to email to the following address:

cardsteam@abbank.com.bd or he can call at Card Division at 9558510. His card will be replaced within 4-5 working days and will be couriered to his mailing address he has provided in his card application form. Address Change For address change in the Card customer need to e mail to the following address: cardsteam@abbank.com.bd or he can call at Card Division at 9558510. His new address will be updated in the Card Management System. Lost Cheque Book In case of loss or destruction of any cheque book containing unused cheque leaves, the customer will have to inform to the bank immediately. The written confirmation of this matter should be duly acknowledged by the Bank Branch. Signature Change In case of signature change one will need to fill up banks prescribed signature change form (available in any branches) or one can request of change of signature by letter with the latest copy of passport size photographs. Account Closing One can close his accounts at any time by giving notice or submit Account Closure form (available of any AB Banks Branch) the branch where he has opened his account. On closure of the account, the bank will pay the credit balances of the account and any interest due to the account. AB Bank A/C to A/C Fund Transfer Of course one can transfer your fund to another account through his or her request letter.

Chapter-8 8.0 Customer Relation Management

Relationship marketing encompasses activities of attracting, maintaining and enhancing customer relationships with the organization. Building relationships with customers is more than just a marketing function. It is an organizational philosophy that impacts on operations and processes, employees, customer service and quality. ABBL has a very clear & precise idea about CRM. They try to follow some important aspects of CRM. These are as follows: 8.1 Customer Retention ABBL gives emphasize on retaining customers on the basis of existing customers base. Customer retention can also be made by effectively managing customers complain. The customers are retained through: Focus on existing customers. Superior products & quality service. Providing new facility. Technological innovation. Loyalty building & satisfaction. Quick response to customer needs and problems. Managing Customer Complaints

Customer complaints are identified by a number of ways: such as customer complain box, written form, verbal form. The interviews show that the customer complaint boxes are generally not used by the customers. They usually make complaint about their problems telling the relevant person in the bank. Complaints are managed by taking quick actions.

Complain Cell AB Bank Limited is committed to provide the highest quality services to meet customer needs. If anyone wishes to compliment, offer suggestions or make a complaint then he is able to let them know what they do that is of benefit to customers, what they could do better or perhaps differently. Any issue brought to their attention will be treated in a confidential manner and discussed only with the people who need to be involved. Customers can provide feedback in a number of ways. He can simply complete the feedback form attached with the brochure and drop it to complaint box of the branch or send it directly to the complain cell or head office. Complain can also be made via webpage or alternatively one might like to speak to member of Complain Cell directly through telephone +88-02-9560312 Ext:160. AB recognizes the right of the customer to complain when felling dissatisfied with the service of the bank. They undertake, wherever possible to resolve complaints and to prevent similar complaints from occurring. The policy objective is to provide procedure to control the processing of complaints as way of improving services to customers and enhance the public image of the bank, ensuring that requests are acknowledged courteously and investigate efficiently and effectively. Relationship Managers The concept of Relationship Manager (RM) is being now used in ABBL but the job description of RMS is not well structured as they should. The job of RM is generally performed by the branch officers. The interviews revealed that the main job of Relationship Managers to reach out to the customers both corporate and personal, to make sure that the job is done in a systematic manner within the clients time frame. The relationship managers for

corporate banking are very much important because during the relationship the bank attempts to solve the problems of client organization and satisfy its need through a series of transactions.

8.2 Promotional Activities for Financial Products

Promotional performs a number of functions and roles, including informing, persuading and educating individual or groups, works harmony with the other elements of the marketing mix enabling the acquisition of new customers to take place, retention of existing customers, improvements of staff morale and projection of a company image. There are several ways in which ABBL communicates with its customer and prospects. The specific combination of promotional method is known as Promotional Mix. The mix includes advertising, sales promotion, personal selling, publicity and public relation, direct mail, direct response advertising. ABBL uses advertising media in a greater extent, and uses personal selling in a limited extent. Public relations for promotional purpose are used in medium extent. Analysis on promotional tools used by ABBL shows that advertising are widely used method of promotion than personal selling. The following are shown the ranking on three mediums of promotion: Rank Promotion Tools Used by Banks 1. Advertising. 2. Personal Selling. 3. Public Relations.

8.2.1 Advertising ABBL uses newspaper as the promotional campaign and it is used to communicate about the new offer or any new news about existing product and service of the banks. TV commercials are now widely vehicle by ABBL. Out- door advertising media like bill board, brochure etc are being used by the bank in medium extent. Percentage Use of Advertising Media

100% Newspaper 88% Outdoor Advertising 50% TV commercial

8.2.2 Personal Selling Personal Selling in ABBL is not used in an extensive or structured form. The role of personal selling is taken by the relationship managers but mainly by the officers in branches. Visiting corporate and personal banking etc are some job done by personal selling. 8.2.3 Public Relation The trend of public relation in marketing is growing over time. ABBL uses public relations activities to promote the banks image as well as their products. 8.3 Branding Image, Symbol & Logo Brand image and symbol are used in the form of a name or symbol or a combination of both to differentiate their offerings from those of their competitors. ABBL uses the brand image through an attractive slogan and by providing the quality service. ABBL has Brand Manager. Priority Banking, Wealth Management counseling etc. are some slogans used by the bans to create brand image. AB Bank believes in modernization. The bank took a conscious decision to rejuvenate its past identity- an identity that the bank carried as Arab Bangladesh Bank Limited for twenty five long years. As a result of this decision, the bank chose to rename itself as AB Bank Limited and the Bangladesh Bank put its stamp on November 14, 2007. The bank decided to change its traditional color and logo to bring about a fresh approach in the financial world, an approach which like its new logo is based on bonding and trust. The bank has developed its Logo considering the contemporary time. The new logo represents our

cultural Sheetal Pati as it reflects the bonding with its clientele and fulfilling their every need. Thus the new spirit of AB is Bonding. The logo of the bank is primarily Red as Red represents velocity of speed and purity. Our new logo innovates, bonding of affiliates that generate changes considering its customer demand. AB Bank launched the new logo on its 25th Anniversary year.

Chapter -9 9.0 Performance of AB Bank Limited

IT @ ABBL Business Automation Being the first private sector bank of the country, AB Bank has prided itself in the quality of the banking services it provides by taking conscious decision to employ the best available banking technology to serve the customers which now stands over 2.00,000 in all. Core banking system Kapiti was employed alongside the manual banking operations ever since 1984. Later on in the tear 2004, Misys core banking solution was selected for implementation to take AB in to super highway of real time online banking of today. Beginning, 2005 Misys implementation was taken-up and in the 1st Phase seven (7) Branches were upgraded to the new core banking system. For the year 2006, in line with the growth strategy, service quality improvement and availability were put into focus whereupon coverage of remaining Branches under Misys became all the more important. Bank took up a massive project of migration, connectivity and standardization of processes and hardware throughout. A core team was formed for this purpose and the theme of the team was Yes We Can. Software products from Misys PLC (Running) Core Banking Software: Equation Banking System

Misys Equation is a fully integrated, real time, multi currency retail banking solution that helps organizations deliver competitive products and excellent service to customers. It supports consumer and corporate banking as well as treasury operations on a single platform. From End Software: Equation Branch Automation Equation Branch Automation is designed to support customer facing staff within a retail branch banking environment. The Equation Branch Automation system is already tightly integrated with the Equation core banking server and provides ready-to-run functionality to support cashiers, personal bankers and relationship managers. Equation Branch Automation allows online, real time transaction processing for the Equation Banking server with immediate access to account and transaction information and verification of availability of funds. Reporting software: Web form Web form applies the latest web based technology to the Equation banking system. Reports are automatically captured are delivered to users as web pages over the banks internal network, removing the need to print and distribute paper versions of reports. Report data is available as web pages, as excel spreadsheets and for analysis using multi dimensional Pivot Tables. Reports can also be distributed automatically as e mails, enabling people who do not have direct access to the system to be kept informed with the latest data. Web form will capture existing reports, run and deliver user-defined reports, and provide an enquiry system for any previous business data, making it an invaluable management reporting tool. Using the Pivot Tables built from Equation reports and associated databases; users can filter and manipulate the data to isolate key elements of information for analysis purposes. Once they have generated the required view of the data, users can drill down to see details of the underlying accounts. Software products from Misys PLC (Implementation Phase) Trade Finance Software: Trade Innovation TI has been designed with advance workflow management to streamline the entire transaction lifecycle and the overall workflow of the trade finance operation. TI allows the bank to define

service agreements (SLAs) for each customer. The bank can apply either customer groupings (e.g. gold, silver, bronze) or bi- lateral agreements for individual customers. The factoring capability in TI is optimized for trade receivables financing available. Finance is calculated on the agreed, discounted total of eligible receivables available on any one day. Drawings are processed at the expressed at the express request of the customer. Internet Banking Software: Integrated Financial Module Equation IFM offers powerful features for business customers. Customers can administer their own user communities, with different levels of access to customer and account information and transactions. Each user can have a pre- defined authorization limit, simplifying control and reducing risk.

9.1 Financial Performance of ABBL at A Glance Million Taka December 31

Gross Interest Income Net Interest Income Operating Profit(PBP&T) Net Operating Profit(PBT) Profit after Tax (PAT)

2008 7,366.85 2,030.69 4,298.39 3,600.62 2,300.62 68,560.47 56,708.77 84,053.61 6,722.51 2.75 66.98 62.57 40.96

2007 5,269.90 1,439.28 3,325.29 2,817.99 1,903.49 53,375.35 40,915.35 63,549.86 4,511.59 2.58 69.09 28.59 42.19

% Change 39.79 41.09 29.26 27.77 20.86 28.45 38.60 32.26 49.01

Deposits Loans & Advances Total Assets Shareholders Equity

NIM % Non Interest Income to operating Income (%) Cost Income Ratio Return on Equity- ROE

(%) Return on Assets-ROA (%) Advance Deposit Ratio (%) Capital Adequacy Ratio NPL as % of Advances Earnings per Share (TK.)

3.12 82.71 12.84 2.99 103.18

3.41 76.66 10.75 4.31 85.37

9.2 Operating Performance of ABBL

Board of directors of AB Bank Limited (ABBL) takes immense pleasure in presenting the 25th Annual report of the bank. It is also the privilege of the board to present the audited accounts of the bank for the year ended 31st December, 2006 and the Auditors Report thereon. AB Bank reached a milestone on 12th April, 2010 when AB reached 28 years of its journey which started with a single Branch operation at Karwan Bazar, Dhaka way back in 1982. AB being the pioneer in private sector banking in Bangladesh will be the first to achieve this milestone. Over the years, AB Bank has contributed in many ways towards development of the private sector banking in Bangladesh. Many of the big industries in different fields of the economy has ABs name attached and AB Bank remains a proud development partner of these industrial houses over the years. ABs Sponsors set a vision for the Bank which reads, To be the Trendsetter for innovative banking with excellence and perfection. Throughout these 28 years AB Bank raised the bar for itself through service, initiatives, products, customer support and performance towards that visionary path. At the beginning of the year 2005, Board took the mission for the year as a year of consolidation and growth. In line with that, year 2006 was identified to be the year of financial re structure and growth. Being a financial institution, AB Bank is exposed to the entire gamut of economic developments and activities both within and outside the country.

9.3 Online Banking

Any new technology in banking sector has its own effects because new technology indicates the improved operation and performance of the sector. Introduction of new technology has an extensive effect on customers. So the quick adopters of new technologies have an edge over others in the industry. AB Bank uses new technology in different department, which improves the quality of services of that department. Cash department involves Receipts and Payments process manually. But now ATM is used which has affected the cash department in some extent. Before ATM and online technology ABBL was able to provide only 8 hours services for payment. Customers were enforced to wait in huge lines for getting payments. To check the total amount of account, customer had to give application to the bank. After ATM AB Bank Ltd. can provide 24 hour banking to its customers so that customers can withdraw money at any time. Now customers have no need to wait for the payment in long queues. When customer withdraws money a mini statement of his account is shown to the customer. ATM technology reduces the extra burden on the cashier and now bank dont need extra cashier and clerks. If anyone needs to verify ones bank account balance, one just need to take the banks balance as shown online, subtract any outstanding checks and add any outstanding deposits. The remittance department transfers the funds from one bank to other bank and from one place to another place. ATM and online banking has also effected the remittance department and increased its efficiency. Before ATM if customer wanted to transfer his fund to other bank account or other branch account. Then he had to submit a cheque which takes a lot of time for clearance process before online banking to transfer the funds to other branches or to other banks. After ATM banking customer can transfer money from his account to any other account at any time anywhere in Bangladesh without waiting for the clearance process. Through online banking bankers has no need to send cheque or money through demand draft or telegraphic transfer etc. The banker can access any branch and transfer funds to it within no time. In online transaction the account holder has account in another bank. The account holder sent the amount to his account. Online transaction is made only ABBL to ABBL. So that they can

transfer the amount, they can cash the amount; they can find the balances & receive the statement of his account in another branch. The Advantage of Online Banking First and foremost, online banking is very convenient. It will allow one to pay bills and make transaction anytime during the day and the week. The bank will never close because can access it through laptop or computer. So no matter in which country of the world he ca go online and handle his finance. Secondly online banking is very fast, effective and efficient. Over the internet, one can make transaction that are typically executed and performed at a much faster pace than at ATMs. Online banking services also give the option of handling several different bank accounts from one site itself. Most online banking sites are compatible with programs like Microsoft Money and Quicken, which makes management of assets more effective.

Chapter -10 10.0 Findings of the Report

ABBL has already been engaged in societal marketing. They do this by engaging publicity through contribution to the charitable issues, creating public awareness on some important issues and sponsorship for many events, ideas and education. Some of these activities are: Donation to flood affected. Anti dowry movement. Stipends for students. Rehabilitation for acid burned etc.

Sport sponsorship is used by ABBL in the live telecast of cricket and a few games and offers a large viewing figures and opportunity of targeting a wide audience. This broadcast sponsorship is intended to create popularity of the bank. AB Bank has been awarded prestigious Century ERA Award at the 10th BID Quality Convention in Geneva. Companies are of 43 countries from America, Europe, Asia and Africa attended the Convention. President and Managing Director of AB Bank Kaiser A. Chowdhury received the award from the Executive President of Business Initiative Direction (BID) Jose E. Prieto on March 10, 2008 at the Intercontinental Geneva Convention Hall. AB Bank received the award in the Gold category in recognition of its commitment to quality, leadership, technology and innovation. Among the outstanding companies including AB Bank at this years convention were Emak (Egypt), Golden Meditech Company (China), Jordan Securities Commission (Jordan), Kreka (Greece). Jose E. Prieto said at the award presentation ceremony, the awarded companies are symbols of commitment to leadership, technology and innovation which makes them models for other companies of their sector.

10.1 Recommendation & Conclusion

This report has focused on the marketing strategies of financial products in ABBL with a view to identify what they are now doing in this regard and what are the future prospects of marketing of financial products. During the time of preparing this report, I have noticed the following issues which need special attention by relevant authorities: Marketing is being practiced by ABBL is not so much structured. Usually no pretest is used to market for any financial product. Innovation of new financial products is rare case rather they hardly upgrade their offerings on the basis of some changes in interest rate, maturity, market demand. Any new product and existing or modified offerings are communicated largely by newspaper. TV commercial is used in a limited form.
Internet banking has been used in a limited form.

ABBL can start to provide the service of SMS banking.

The study shows that there is a great potential in marketing of financial products which will make ABBL more effective. ABBL is now feeling the greater importance of marketing because of increased competition, technological innovation and government regulations. They are trying to create a vision of marketing with a large number of promising issues like: Customer Relationship Management. Branding. Electronic. Banking. Tele- banking.

 Product differentiation attributes, etc.

Thus the changing environment is creating a changing demand for marketing strategies and by developing an effective marketing strategy ABBL can retain market shares and profitability as well as competitive advantage. Finally, it can be concluded that although financial product marketing of ABBL is in an early stage, it has a good potential for development, as ABBL is now aware of its performance.

Bibliography
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www.abbank.com.bd www.efinancial/news.com En.wikipedia.org/wiki/Marketing Strategy Principles of Marketing (11th edition). By Philip Kotler & Gary Armstrong. Strategic Brand Management (2nd edition)- Kevin Lane Keller. AB Bank Ltd. Annual Report.

III.
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