Organization Process of Premier Bank

CHAPTER 1 OVERVIEW OF PREMIER BANK LIMITED

1.1 Background
The Premier Bank Limited is incorporated in Bangladesh as banking company on June 10,
1999 under Companies Act.1994. Bangladesh Bank, the central bank of Bangladesh, issued
banking license on June 17, 1999 under Banking Companies Act.1991. The Head Office of
the Premier Bank Limited is located at Banani, one of the fast growing commercial and
business areas of Dhaka city. At present the bank has 38 branches & 5 SME Service
Centers.

1.2 Corporate Information

Authorized Capital: BDT 6000.00 Million
Paid up Capital: BDT 2242.30 Million

1.3 Vision of the Bank

The Bank has clear vision towards its ultimate destiny - to be the best amongst the top
financial institutions.

1.4 Missions of the Bank

 To be the most caring and customer friendly provider of financial services, creating
opportunities for more people in more places.
 To ensure stability and sound growth whilst enhancing the value of shareholders
investments.

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 To aggressively adopt technology at all levels of operations to improve efficiency and
reduce cost per transaction. 1
 To ensure a high level of transparency and ethical standards in all business
transacted by the Bank.
 To provide congenial atmosphere which will attract competent work force who will be
proud and eager to work for the Bank.
 To be socially responsible and strive to uplift the quality of life by making effective
contribution to national development.
 Organization Process of Premier Bank

1.5 Strength

 Capital base: Tk. 3994.50 Million

 Capital adequacy ratio 14.63 %
 Low non-performing loans
 Dynamic board of directors and competent management
 Customer friendly loan and deposit products
 High level of IT application in customer services

1.6 Management Structure

The Board of Directors consist of 15 (Fifteen) Directors. The members of the Board of
Directors of the Bank hold very respectable positions in the society. They are from highly
successful group of Business and Industries in Bangladesh. Out of 15 members one is from
Taiwan. Each member of the Board of Directors plays a significant role in the socio-
economic domain of the country.

The members of the Board of Directors are responsible for the strategic planning and overall
policy guidelines of the Bank. Further, there is a management committee of the Board to
dispose of urgent business proposals. Management Committee consists of Managing
Director, Additional Managing Director, Senior Executive Vice President, Executive Vice
President and so on.

The Managing Director, Deputy Managing Director and Head of Divisions are responsible for
achieving business goals and overseeing the day to day operation. Key issues are managed
by a Management Committee headed by Managing Director. This facilitates rapid decisions.

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Managing Director is assisted by a Senior Management Group consisting of Deputy
Managing Director and Head of Divisions who supervise operation of various Divisions
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centrally and co-ordinates operation of branches.
 Organization Process of Premier Bank

CHAPTER 2 ORGANIZATION PROCESS OF PREMIER BANK LIMITED

Organizing is one of the key functions of management. Organizing is the process of

assembling required resources to attain organizational objectives. Organizing is
deciding how best to group organizational elements. As every organization of their
own building blocks of organizing Premier Bank also has their own building block of
organizing and different ways to organize. Where going to in detail of the building
block of IFIC bank we can get a view of their organizational structure both at
general level and branch level.

Organization structure at General level

HR – Human Resource Division

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Board Division

FAD – Financial Administration Division

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GSD – General Service Division

Int. Dev – International Division (Remittance)

ICC – Internal Compliance & Control Division

R&D- Research & Development

CMD – Corporate Marketing Division

 Organization Process of Premier Bank

PRD – Public Relation

B. House – Brokerage House / Share Division

Organization Structure at Branch Level

2.1 Elements of Organization Process

Organizations are made up of a series of elements. Every organization tries to accumulate
these elements for accomplishing the organizational goal. Similarly Premier bank also tries
to shape their organization by the establishment of the building blocks or elements of
organization process. The most common of these elements involve:

 Designing job
 Grouping job
 Establishing relationships
 Distributing authority
 Coordinating activities
 Differentiating between positions

2.2 Designing job

Job design is the determination of an individual work related responsibilities. Job design is

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the work arrangement (or rearrangement) aimed at reducing or overcoming job
dissatisfaction and employee alienation arising from repetitive and mechanistic tasks.
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Through job design, Premier bank try to raise productivity levels by offering non-monetary
rewards such as greater satisfaction from a sense of personal achievement in meeting the
increased challenge and responsibility of one's work. Job specialization, Job enlargement,
job enrichment, job rotation, and job simplification are the various techniques used in a job
design exercise.

Premier bank vastly used the most common form of job design that is job specialization.
 Organization Process of Premier Bank

Job specialization is the separation of organizational activities into distinct tasks and the
assignment of different tasks to different people. Premier bank has diverse job design policy
for different department such as general banking division, credit division, recovery, card
division, SME etc. In case of general banking they have design the job on the basis of the
functions such as accepting deposits, lending money, lockers facility, foreign
exchange business, cash, clearing, etc. Take a look how Premier bank design the
job of an officer, cash.

Job design of an officer, cash: An officer, Cash is responsible for maintaining

outstanding customer service as per Company standards, processing sales quickly,
accurately and efficiently, cash register operations and safeguarding company assets.

Tasks and Responsibilities:

 Ensure that each customer receives outstanding service by providing a friendly
environment, which includes greeting and acknowledging every customer,
maintaining outstanding standards, solid product knowledge and all other aspects of
customer service.
 Maintain an awareness of all promotions and advertisements.
 Accurately and efficiently ring on registers and accurately maintain all cash and
media at the registers.
 Communicate customer requests to management.
 Enter all media from register into the tally program.
 Maintain orderly appearance of register area and supplies stocked.
 Any other tasks as assigned from time to time by any manager.

Skills and Competencies:

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 Ability to process information/merchandise through register system 5
 Ability to communicate with associates and customers
 Ability to read, count, and write to accurately complete all documentation
 Ability to operate all equipment necessary to perform the job

Job Design of a Recovery Officer: It is the department where an officer’s job is design to
collect the loan amount from the creditors. Every employee of this department knows about
their job design. Instances:
 Recovery schedule maintain and tracking
 Organization Process of Premier Bank

 The recovery payment system of the customer.

 Giving notice to the customer of regular payment
 Maintaining the Classification of loans and advances according to Bangladesh Bank
Schedule.
 Corresponding with Head Office for further change in the loan.

2.3 Grouping job

The second building block of organization structure is the grouping of jobs according to
some logical arrangement. The process is called Departmentalization. Manner or practice in
which related individual tasks and their allocation to work groups is combined, to form a
specialized functional area that is distinct from other functional areas in an organization.
Work specializations create specialists who need coordination. In Premier bank this
coordination is facilitated by putting specialists together in departments under the direction
of a manager. These departments are typically based on the work functions performed the
product or service offered, the target customer or client, the geographic territory covered,
or the process used to turn inputs into outputs. The method or methods used should affect
the grouping that would best contribute to the attainment of the bank’s objectives and the
goals of individual units.

Types of Departmentalization used by Premier Bank:

 Functional: Groups of employees based on work performed (e.g. credit, accounting,

information systems, and human resources).
 Product: Groups of employees based on major product areas in the bank (e.g. loan
and advances, deposits, selling and buying of foreign currency, etc). Loan and
advances consists of products such as Project Loan, trade Finance (Domestic &

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International), House Building Finance (Commercial & Residential) Letters Of Credit, etc.
 Customer: Groups of employees based on customer’s problem and needs (e.g.
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wholesale, retail, government).
 Geographic: Groups of employees based on location served (e.g. rural, urban).

Premier bank use customer departmentalization in their banking activities. The

departmentalization is given below based on customer:
 Organization Process of Premier Bank

2. 4 Establishing reporting relationships

The third basic element of organizing is the establishment of reporting relationships among
position. Establishing reporting relationships starts with clarifying the chain of command.
The span of management partially dictates whether the organization is relatively tall or flat.
Premier bank is very strict when it comes to reporting relationship. As it is a bank and it is
operating with 38 branches all over Bangladesh the span of control is very wide at middle
level as for 38 branches there are 38 branch managers. These 38 managers are bound to
report to Head Office. To control hundreds of employee according to the rule of Bangladesh
Bank every bank must has an Internal Control and Compliance (ICC) Department. ICC’s
audit team audits every branch around the year and any discrepancies or anomalies will
then be reported to Head Office. Thus every branch is accountable to Head Office through
the procedure determined by ICC. But if we consider every branch as a separate
organization then the scenario would be different. The unity of command along with the
scalar principal is strictly maintained there. Every single employee is accountable for his/her
job to his/her immediate senior.

2.5 Distributing Authority:

Distributing authority stars with delegation. Another important building block in structuring
organization is the determination of how authority is to be distributed among positions.
Delegation is the process by which the manager assigns a portion of his or her total work
load to others. Authority is power that has been legitimized by the organization. Distributing
authority is another normal outgrowth of increasing organizational size. In Premier Bank

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they try to synchronize between responsibilities and authority given to the employees. In
Premier Bank they believe that delegating authority is very important, as an employee 7
having responsibility without authority will be worthless. Like

 Credit in charge in a branch has some responsibility along with some authority. He is
responsible for any unrecovered loan; he has also the authority to take necessary
steps to recover those bad loans.
 The officer in dealing room (Dealing room: the room where foreign currency are
being traded) is responsible for any income/loss realized while dealing with foreign
 Organization Process of Premier Bank

currency; he also has the authority to buy or sale foreign currencies at any price he
likes.
 The cash officer has the authority to deal with the branch reserve he is also
responsible for every single taka dealt on the counter.
 Branch manager has the authority to run the entire branch including the clients,
allocated money, allocated fixed asset, etc. He is also responsible for his each and
every move while dealing with these.

Premier bank is trying to centralize as much as work it can centralize. The reason behind
centralization is that banking is a very risky business as in banking bankers make money
with people’s money. Every single bank is supervised strictly by Bangladesh Bank. Each and
every decision about giving loans and advances every branch has to communicate with
Head Office. Every loan has to be sanctioned in the board meeting held every month. Not
only sanctioning loan but also renewal, reschedule and restructure of any loan has to be
approved in board meeting.

2.6 Coordinating activities

Coordination is the act of coordinating, making different people or things work together for
a goal or effect. Coordination is the process of linking the activities of the various
departments of the organization. Employee while doing their assigned job; actually doing a
part of the big picture drawn for the ultimate organizational goal. Like any other profit
making organization IFIC bank’s ultimate goal is also to maximize share holders’ wealth but
working maintaining the rules and regulation of Bangladesh Bank and working under Bank
Act 1993. In bank department to department is interdependent. So if the co-ordination of
inter department or inside the department does not happen the banking core activities will

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collapse. For instances we can say that:
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 Cash withdrawal is dependent on money available in safe volt; again money kept in
cash volt is dependent on the cash deposit made by the customers.
 Cash deposit is dependent on the depositors’ money. That means if the marketing
officer failed to attract new depositors then cash of the entire bank will decrease.
 The difference between the interest given to the depositors and interest taken from
loan is bank’s income. So that means the entire bank is dependent in credit
department while credit department is department the recovery officer.
 Organization Process of Premier Bank

So from above instances it can be understood that Premier bank ltd. uses the reciprocal
interference. That means works are dependent both ways.

2.7 Difference between Positions

The last building block of organization structure is differentiating between line and staff
position. Line managers work directly towards organizational goal, whereas staff managers
advise and assist. Premier bank is not any exceptional. There is also line and staff managers
exist. In bank it is hard to differentiate among these two types but it is there.

Actually in banks there are two types of job one is the main stream banking job. For this
kind of job the recruitment process is also different. Employees are recruited as junior
officer or probationary officer and after recruiting they are trained to be a banker. These
bankers are sent to different branches and they do the main job of IFIC bank. They take the
bank to its goal of maximizing the shareholder’s wealth by doing banking job. Eventually
they become bank managers are even divisional head of different divisions corporate
division, SME division, Etc. These employees belong to line position because they directly
linked with the chain of command that is responsible for the achievement of an
organization’s goal.

The other type of bank job is doing work in different supporting side. Premier bank does not
do only the banking job. They also need to do marketing, they have legal affairs, they need
to audit, and they need to take different critical financial decisions. That is the reason they
need experts from different angles such as law & legal affairs, finance and accounts, internal
control & compliance, etc.

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 Organization Process of Premier Bank

CHAPTER 3 CONCLUSION

Premier Bank Limited is a fourth generation bank. It has had a 20 years operation life. The
tenure of its operation proves its success, and no organization can become that huge
without organizing to its best. Premier Bank has been very organized from the birth time,
and the board of governors had the will among themselves to update the management.
Time to time there has been changes made by the management to make it run. In order to
render a professional and customer friendly service to its valued customers the bank made
a conscious effort to develop a truly professional, dedicated and committed team through a
very flawless recruitment procedure. The management has designed every job in such a
way that every employee gives their best willingly. Management uses different kinds of
departmentalization to boost up the power of the force. The synchronization among
employees from different wings of organization is made successfully. Every employee has
given the responsibility along with the authority to match and for every job done they are
accountable. The management of Premier Bank Limited has helped the bank to grow in a
position like to day.

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 Organization Process of Premier Bank

Bibliography

Griffin, Ricky, Management. New York, Houghton Miffin Company, 2003

A dictionary of Business, Oxford university press, 2005-2006
http://www.premierbankltd.com/html/home.php
Wikipedia encyclopedia

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