Assignment

MANAGEMENT PATTERN
OF
ARAB BANGLADESH BANK LTD

Submitted to

Professor (Dr) Khondoker Bazlul Hoque

Professor & Chairman
Department of International Business
University of Dhaka

Submitted by

Minul Hasan Mohammad Arif

(ID# 80802067)
2nd Batch, EMBA Program
Department of International Business
University of Dhaka
Course-International Management
Course No- EIB 514

University of Dhak

1
 LETTER OF TRANSMITTAL

Aug 30,2010

Professor (Dr) Khondoker Bazlul Hoque

Professor & Chairman
Department of International Business
University of Dhaka

SUB: SUBMISSION OF TERM PAPER ON “MANAGEMENT PATTERN OF ARAB

BANGLADESH BANK LIMITED”.

Dear Sir,
As instructed and part of our academic program under EMBA, I do hereby submit a Assignment
on “Management Pattern of Arab Bangladesh Bank Limited” for your kind review and necessary
reference. The Assignment has been prepared on the basis of guidelines and instructions as given
by you and the information, supporting documents as collected from the Bank as well as
practical observations of the Operation and Management of the Organization.

I have engaged my intense efforts to bring out this study report with the target of achieving
perfection but I am in a little doubt how far I have attained it.

I shall be highly obliged if you kindly accept my report.

Thanking you.

With best regards,

Minul Hasan Mohammad Arif

ID# 80802067
Table of contents:

2
Topic Page
number

Executive Summary
1. THE BANK AND ITS BRIEF HISTORY-------------------------------------------06
2. OBJEVTIVE, METHODOLOGY & LIMITATION OF THE STUDY---------07
2.1 OBJECTIVES OF THE STUDY------------------------------------------------------------07
2.2 METHODOLOGY----------------------------------------------------------------------------07
2.3 LIMITATIONS OF THE STUDY.---------------------------------------------------------07
3. MANAGEMENT------------------------------------------------------------------------08
3.1 THE HEAD OFFICE AND TOP MANAGEMENT OF THE BANK-----------------08
3.2 STRUCTURES AND ACTIVITIES OF DIFFERENT DIVISIONS------------------09
3.2.1 BUSINESS BANKING--------------------------------------------------------------------09
3.2.2 CONSUMER BANKING DIVISION---------------------------------------------------09
3.2.3 BANKING WING:MERCHANT--------------------------------------------------------10
3.2.4 TREASURY DIVISION-------------------------------------------------------------------10
3.2.5 ISLAMI BANKING------------------------------------------------------------------------11
3.2.6 OPERATION DIVISION------------------------------------------------------------------11
3.2.7 INTERNATIONAL DIVISION & TREASURY SUPPORT UNIT-----------------12
3. 2.8 FINANCIAL CONTROL DIVISION---------------------------------------------------12
3.2.9 HUMAN RESOURCES DIVISION-----------------------------------------------------13
3.2.10NTERNAL CONTROL & COMPLIANCES (ICC)----------------------------------14
3.3BRANCH OPERATION----------------------------------------------------------------------------15
3.4 POSITIONAL HIERARCHY OF THE BANK-------------------------------------------------17
4.RCOMMENDATION------------------------------------------------------------------18
5. CONCLUSION-------------------------------------------------------------------------20
BIBLIOGRAPHY----------------------------------------------------------------------21

ACKNOWLEDGEMENT

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This is the time to acknowledge the contribution of human efforts that have made it happened in
preparing the paper most of which were not directly involved or responsible to do so. They are, a
group of executives of Arab Bangladesh Bank Limited, especially present Head of Human
Resources Division, who has solely developed the present Organogram of the Bank revising the
previous one and who has extended her full support to the members of our team in preparing the
Term Paper.

A lot of professional like typist, steno, and office staffs who have contributed huge in the
assignment and my beloved classmates cordially and sincerely convey my gratitude and heartfelt
thanks to all of them and wishes their betterment in all respect in future.

EXECUTIVE SUMMARY

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This paper shows how ABBL has structured its Board of Directors, Top, Mid and Operational
Management and designed the Branches Organogram, operational relationship of the different
wings of the functions, action procedures comprising of planning, organizing, coordinating and
controlling of the wings with details diagrams.

It has also been tried to show the strategic planning and views of the Bank, operational planning
& execution process, organizational structures, recruitment and motivational policies of human
resources, coordinating and controlling criteria of the whole functions and operations of the
Financial Institution.

In the report, I have furnished the structure of Head office Management of the Bank and it is
observed that Span of its Head Office is ‘Wide’ in nature and all the Divisions are separately
organized with adequate wings and structure. The Bank has been following the concept of Front
Office and Back Office as per “Core Risks Management” guidelines of Bangladesh Bank and
some of the Divisions at Head Office are considered as Front Office and others are classified as
Back Office based on the nature of their functions. The Branch operation of the Bank directly
controlled by Head Office and each Branch has its own Organogram and operates as per the
guidelines set by Head Office. In this Paper, Branch Organogram is shown in brief.

1. THE BANK AND ITS BRIEF HISTORY

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Arab Bangladesh Bank Limited is one of the first generation private commercial bank
incorporated in Bangladesh in 1981 as a public limited company under the Companies Act and
governed by the Banking Companies Act. The Bank went for public issue of its shares in 1983.
AB bank has 66 (Sixty Six) Branches all over Bangladesh including 01(One) Islami Banking
branch, 01(One) Overseas branch in Mumbai, India, and 02(Two) representative Offices in
Myanmar and London. The Bank has a subsidiary company, AB International Finance Ltd. in
Hong Kong. The Bank operates a Merchant Banking Wing.

A Chronicles on ABBL is furnished below:

Certificate of Incorporation December 31, 1981.
Commencement of Business February 27, 1982.
Opening of First Branch at Karwan Bazar, Dhaka April 12, 1982.
Opening of ABIFL – a subsidiary in Hong Kong November 1995.
First Foreign Branch at Mumbai, India April 06, 1996.
Opening of Merchant Baking Wing November 02, 2002.
Opening of Islamic Banking Branch December 23, 2004.

PRESENT SHAREHOLDING PATTERN:

Sponsors and Public : 99.38%

Government : 00.62%

VISION:
To be the Trendsetter for innovative banking with Excellence & Perfection.

MISSION:
To be the best performing Bank in the country.
2. OBJEVTIVE, METHODOLOGY & LIMITATION OF THE STUDY

2.1 OBJECTIVES OF THE STUDY

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The main objective of the study is specially to look into the management pattern of Arab
Bangladesh Bank Limited (namely AB Bank) for obtaining organizational mission, vision and
objectives. In addition to these, the following objectives are also covered in the study:
 To learn about planning process of the organization
 To learn about organizing process
 To know the staffing process
 To analyze tools for measuring performance
 To identify the problems in overall management of the bank and
 To recommend for develop banking sector
2.2 METHODOLOGY
Both the primary and secondary data sources are used to accomplish the study.
 Primary Sources
The study is complied through interviewing the managers of different levels of AB Bank.
The concerned individuals provide important information regarding the current topics
 Secondary Sources
AB Bank publishes different manual, reports time to time. These publications are great
sources to collect data for the current study.

2.3 LIMITATIONS OF THE STUDY.

Though the study is completed successfully it has some major limitations which may raise some
questions for its reader. The notable drawbacks of this study are:

 Time- Limited time for conducting the study makes it incomplete. It is very difficult to
arrange appointment with the top level managers as they very busy persons of the
organization.
 Concealment of data- Some sophisticated information regarding managerial problems of
AB Bank can not be achieved which of course enrich the study.
 Representation- Since the study is carried out only in a Private Commercial Bank. Its
findings are not overall representation of banking industry.

Despite this limitation, the findings from the study would provide indication to consider
strategies in future studies.
3. MANAGEMENT
Present Management of the Bank is comprised with the followings:

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 1. The Board of Directors.
 The Board Secretariat & Share Department.
 The Executive Committee
 The Audit Committee
2. The Managing Director
3. The Management Committee (MANCOM)
4. The Asset Liability Committee (ALCO)
5. The HR Committee
6. The Head of Divisions at Head Office &
7. The Branch Management.
We have shown the structures of the organs of Management of the Bank in this Paper.
3.1 THE HEAD OFFICE AND TOP MANAGEMENT OF THE BANK:

THE BOARD OF DIRECTORS

EXECUTIVE COMMITTEE AUDIT COMMITTEE

CO. SECRETARIATE & SHARIAH COUNCIL

SHARE DEPT.
MANAGING DIRECTOR

SUBSIDIARIES, LIASON COMMITTEES

OFFICES, FOREIGN BR.

REGIONAL OFFICES MANCOM ALCO CREDIT HR

BUSS. CON. MERC. TREASURY ISLMC.OPRTN CRM ID & FCD HRD ICC
BNK BNK BNK BNK TSU

B R A N C HOF O
3.2 STRUCTURES AND ACTIVITIES P E R A T DIVISIONS:
DIFFERENT I O N

3.2.1 BUSINESS BANKING:

BUSINESS BANKING
DIVISION

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 CORPORATE SME SYNDICATION & OVERSEAS R&D
STRUCTURED MARKETING
FINANCE

Business Banking Division is headed by a Senior Executive Vice President along-with a team of
executives who are assigned for searching of new avenues for booking of assets and liabilities
for the bank through Branches in home and abroad including research and development, market
intelligence in the banking industry of the country. Development of new products, analyzing,
feasibility study and launching are the important activities of the division. The activities of the
division are reportable to the Managing Director on monthly basis and/or on requirement.
3.2.2 CONSUMER BANKING DIVISION:

CONSUMER
BANKING
DIVISION

PRODUCT SALES TEAM BRANCH RETAIL ALT. DELIVERY

DEVELOPMENT MANAGEMENT OPERATION CHANNEL

Consumer Banking Division – presently headed by a Vice President under direct supervision of
the Chief Operating Officer (COO) working with a group of officers engaged in product
development, sanctioning, monitoring and follow-up through the Branches and out-sourcing.
Based on annual allocation and guidelines and time-to-time review of the Board the Division
control the Consumer Credits of the Bank. Overall activities of the division are reportable to the
CEO on monthly basis and/or on requirement.

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3.2.3 BANKING WING:MERCHANT

MERCHANT BANKING

PORTFOLIO ISSUE UNDER CUSTOMER

MANAGEMENT MANAGEMENT WRITING SERVICES

The Bank has been running a Merchant Banking Wing successfully since 2002, headed by an
Executive Vice President which has been playing a remarkable and vital role in the Capital
Market of the Country with a group of professional - who are engaged in portfolio management,
issue management, underwriting and its customer services and the operation of the wing is
assisted by its back office Financial Control Division.
3.2.4 TREASURY DIVISION:
TREASURY ALCO
DIVISION

ASSET-LIABILITY FX CORPORATE
MANAGEMENT (ALM) DEALING DEALING

Treasury Division of the Bank is being operated by an Executive Vice President along-with a
team of professional operators working in Asset-liability management, FX dealing, pricing,
interest rate maintenance, and corporate dealing process. A committee supports the Treasury
Division namely Assets – Liability Committee (ALCO) and the Head of the division is the
Member Secretary of ALCO. Its Back office, the Treasury Support Unit under International
Division (ID), monitors the activities of the division. The performance activities of the division
are reportable to the Managing Director and MANCOM.

3.2.5 ISLAMI BANKING:

ISLAMIC BANKING SHARIAH

COUNCIL

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 BRANCH
OPERATION

The Bank has been running an Islamic Banking Branch by hiring a group of expert in this line of
banking supported by its Shariah Council. The management and operation of the Branch is
separated from the Bank’s traditional operational activities. Separate Accounting records and
finalization are made in Islami banking branch following the guidelines of the Shariah Council
keeping its management and operation as usual of traditional and normal branch banking.

3.2.6 OPERATION DIVISION:

OPERATION
DIVISION

CHIEF OPERATING
OFFICER (COO)

GSD IT SERVICE CONSUMER FINANCE CARD CORPORAT CASH MGT

DELIVERY CENTRE OPERATION E AFFAIRS

Operation Division of the Bank is headed by a Senior Executive Vice President activities of
which are included General Services, Utilities, Procurement, Logistic Support, IT operation and
Online management, Cash management and Corporate affairs of the Bank and its branches and
service centers. Presently, the Head of the division is vested with the responsibilities of the
operation of Cards and Consumer credit departments. The division is equipped with a number of
employees – experienced adequately to run the larger bank inclusive of its sixty five branches,
overseas office, service centers and its Head office structures.

3.2.7 INTERNATIONAL DIVISION & TREASURY SUPPORT UNIT:

INTERNATIONAL DIVISION (ID) &

TREASURY SUPPORT UNIT
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 CORRESPONDANCE TREASURY OVERSEAS NOSTRO TRADE SERVICE
BANKING SUPPORT OPERATION RECONCILIATION

International Division (ID)& Treasury Support Unit is being run by an Executive Vice President
along-with a group of executives which mainly engaged in foreign trade financing, Nostro
Accounts maintenance and reconciliation, and Correspondence banking. The Overseas Office,
Branch, Subsidiaries of the Bank directly controlled by the division as per the guidelines of the
Board of Directors and MANCOM under the close intimation to the Managing Director.
Monitoring of import, export, remittances, foreign correspondences, establishing of agency
arrangement with abroad partners etc are the main activities of the department – which has to
report the MANCOM regularly. Additionally, the divisions act as the back office of the treasury
division and review each and every transaction to monitor its activities.
3. 2.8 FINANCIAL CONTROL DIVISION:

FINANCIAL CONTROL DIVISION

CENTRAL BRANCH ACCOUNTS BUDGET & MIS & EXTERNAL BANK MBW
ACCOUNTS & RECONCILIATION MONITORING RETURNS AUDIT PORTFOLIO SUPPORT

Financial Control Division is the central Back Office of the Bank, which is the manager of the
Bank’s Central Accounts. Headed by a qualified Professional Accountant who is designated as
Chief Financial Officer (CFO) and supported by a group of professionals. The division is
performing the jobs of maintaining Central Account, consolidation of Branch Accounts &
operational results & reconciliation, Budgeting & Monitoring of business activities of the
Branches and Service Centers, analyzing of variances, preparation of MIS & Returns for the
Board and the MANCOM, External Audit and Bank’s Portfolio Management. In addition to
above, it acts as Back office of the Merchant Banking Wing of the Bank. The division maintains

12
all the financial records of the Bank, finalize Annual Accounts, analyze and evaluate its
operational activities for the Board of Directors and External Audit and ultimately for the
Shareholders of the Bank. This is the custodian of bank’s assets and liabilities and sometimes it
act as fund manager of the Bank. It also act as Portfolio manager for routing bank’s investment.

3.2.9 HUMAN RESOURCES DIVISION:

HUMAN RESOURCES HR
(HRD) COMMITTEE

HR REWARD & BENEFIT INTERNAL PERSONNEL TRAINING

PROCUREMENT MANAGEMENT COMMUNICATI0ON SERVICES ACADEMY

Human Resources Division is the key wing of human resources management of the Bank. An
Executive Vice President professionally qualified in HR management heads the division and the
Managing Director who is assisted by HR Committee guides it. Determination of HR
requirement, planning, process of selection, in-house orientation & training of the newly
recruited employees, fixation of compensation package, posting etc are performed by the
division as per the policy of the Bank. Maintenance of personal records of the existing
employees, their transfer posting, revision of financial benefits, promotion and administrative
action are initiated from the division.. Compensation packages, bonus, annual increment,
promotion, long time retirement benefits and other incentives and motivational schemes for the
employees are lucrative at the Organization which enable it to retain experienced professionals
and manage the Bank successfully. The activities of the division are reportable to the Managing
Director and MANCOM.

3.2.10NTERNAL CONTROL & COMPLIANCES (ICC):

INTERNAL CONTROL & COMPLIANCES (ICC) DIVISION

OPERATION CREDIT MONITORING & ANTI-MONEY

AUDIT INSPECTION SUPERVISION LAUNDERING
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Internal Control & Compliance (ICC) is one of the most important Back Offices of the Bank,
which is being operated by a group of experienced professionals in bank management. The
department carries out normal operational audit with regular interval of the branches and various
departments/divisions of Head office. The activities of the department are reportable to the
Managing Director of Bank and in some cases, it has to report to the Audit Committee of the
Board of Directors of the Bank. ICC is the center of monitoring and controlling the operational
activities of the Bank which keeps a close eye on operation of the branches and different service
providing units as well as on the different divisions at the Head Office and they are authorized to
check, verify and reconcile any unusual variances and report to the CEO immediately along with
their observations and required remedial suggestions on the related issues.

3.3BRANCH OPERATION

BRANCH OPERATION

MANAGER

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 SUB – MANAGER
(MANAGER-OPERATION)

FRONT GENERAL CREDIT FOREIGN EXCHANGE FINANCIAL GENERAL

DESK BANKING DEPARTMENT DEPARTMENT CONTROL SERVICE

RECEPTION/ CASH OPERATION CR. SERVICES& IMPORT BR.CENTRAL LOGISTIC

INFORMATIO & COUNTER SERV. SANCTIONING ACCOUNTS S

ACCOUNT REMITTANCE CONSUMER/RETAI EXPORT MIS & MAINT.

OPENING LCREDIT. RETURNS &REPAIR

DEPOSIT CREDIT FOREIGN ASSETS BR. IT

SCHEMES DOCU../DISBURS. REMITTANC MANAGMNT. OPERATI
ON
CARDS/PERSON ADMN.MONIT.
AL BANKINGS & FOLLOW-UP
PERS. REC.
MAINT.

Branch operation is the key banking activity of a financial institution of our country and the Bank is

operating 65(Sixty Five) Branches in home and abroad, which are situated in urban and rural areas of

the country. Responsibilities of Branch operation are solely depend on the Branch Manager who is

selected by the Managing Director through HR division and HR Committee. The Branch Managers are

designated from the officials of the Bank based on their skills, qualities and capabilities. The Manager

may be from the different rank of the bank’ hierarchy on the basis of the status of the branch.

Generally, responsibility of a larger branch is given to a senior executive as Branch Manger. The

Manager operates the Branch as per guidelines set by Head Office Management -who is assisted by a

Sub-Manager posted by HRD and he supervises all day-to-day operational activities. The Manager in

consultation with the Sub-Manager assigns the responsibilities and desks of the other employees on the

basis of their qualities and abilities. Usually a branch has a number of departments as shown above and

15
each department has an in-charge from the senior employees along with a number of support staff on

the basis of the workload. The operational and supervisory functions of the department are carried out

by the Sub–Manger and the Manger act as the controlling, decisional and administrative body besides

acting as the Chief Executive of the respective branch. At the year-end, the Branch Manager evaluate

individual operational performances and development activities of the individual employees and

appraise in their Annual Appraisal Report in prescribed format to HRD and based on the rating

employees’ service records are designed at HRD. The Branch Manager remain reportable to the

divisional Heads and MANCOM at the Head Office of the bank beside reportable to the Managing

Director of the Institution directly.

3.4 POSITIONAL HIERARCHY OF THE BANK

POSITIONAL HIERARCHY OF THE BANK

THE BOARD OF DIRECTORS

THE MANAGING DIRECTOR

DEPUTY MANAGING
DIRECTOR
SENIOR EXECUTIVE VICE
PRESIDENT (SEVP)

EXECUTIVE VICE PRESIDENT

(EVP)

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 SENIOR VICE PRESIDENT
(SVP)

VICE PRESIDENT (VP)

SENIOR ASSTT. VICE

PRESIDENT (SAVP)

ASSTT. VICE PRESIDENT (AVP)

SENIOR PRINCIPAL OFFICER

(SPO)

PRINCIPAL OFFICER (PO)

SENIOR OFFICER (SO)

OFFICER

SUBORDINATES
The structure as shown above is the present corporate positions of the employees of the Bank.
The Managing Director is the Chief Executive Officer (CEO) of the Bank who is appointed by
the Board of Directors as per statutory requirement of Bangladesh Bank in accordance with its
guidelines. The service contract, remuneration and other related conditions are fixed by the
Board of Directors. The Board also appoints the Deputy Managing Director. Presently the post
has kept vacant in the Bank. The Senior Executive Vice President, Executive Vice President are
appointed by the Managing Director and their service conditions are determined by the Board of
Directors. The Senior Vice President and other executives and officials are appointed by the
Managing Director and process of appointment and other service conditions are fixed by him in
consultation with the HR Committee under the guidelines given by the Board of Directors.
Usually, From Senior Assistant Vice President to above are considered as “Executives” and the
rest are considered “Non-executive” post. In addition to officials, the bank employs drivers,
messengers, attendants etc as per requirements who are called “Subordinates”. The financial
benefits, annual increments, refixation of salary with regular intervals, bonuses, retirement
benefits and other financial benefit schemes in different ranks are determined by the Managing
Director in consultation with the HR and Management Committees as per the guidelines of the
Board of Directors.

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4.RCOMMENDATION

Arab Bangladesh Bank Limited is one of the first generation private banks in the country –
management of which is tested over last two decades and as we have shown earlier pages, its
management pattern is full of scientific approach. Although the above, our study and review
reveals some observations and variances in management of the bank and in our opinion,
appropriate addresses and attentions on the matters will able the bank to reach to the level of
more standard. Our observations and opinions are furnished below:
1. The numbers of Directors in the Board is limited within 08 (Eight), out of which one is
representing the GOB and one from the public shareholders and the rest from the
sponsors. The Board should be formed from different categories of the professionals and
number of members may be increased up to maximum of the legal framework to receive
diversified services and advises in bank operation.

2. The top management of the bank, especially the first layer of management is “Wide” in
nature and number, which may create the problems in managerial and decisional aspects
in the financial institution. The layer should be squeezed to “Narrow” span, which may
help to avoid such operational and decisional hassles.

3. The divisions of the Head Office may be reduced and the less important and small
divisions may be converted into departments under a similar nature of divisions to ensure
more effective and efficient control, operation and utilization of manpower.

4. Motivational activities and evaluation process of the manpower may be reviewed further
to create an effective atmosphere of retention of the skillful professionals and ensure
appropriate professional development in the institution in time.

5. The key result area of the bank is the branch operation, which needs more attention, and
it is necessary to create additional service centers for creation of diversified services and
earning portfolios.

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6. The Branch managers’ authority may be reviewed for allowing empowerment
opportunity, which may help to develop more services to the customers and besides
developing of more controlling criteria of their activities.

It is not our claim that the observations as above are the only remedial measures in smooth
operation of the Bank; additional steps may be also helpful to develop and accelerate the
operational and managerial efficiency of the comparatively large and traditional financial
institution.

5. CONCLUSION:

ARAB BANGLADESH BANK LIMITED is considered a dynamic, potential and

pacesetter private bank in the country that meantime, has created an ideal atmosphere and
working environment in this sector. The has provided a good number of professional in the
industry, who are running more than a dozen of financial institutions in the country with
success and it has been happening due to the tradition and professionalism in bank
management as set by the Institution during the last two decades.

During our study it has been observed that the bank has passed different nature of
management era in its life which all has set different dimension of bank management with
fruitful outcome. Present Board of Directors, Management team, operational staff, their
policies, operational and management process are considered more energetic, dynamic,

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modern, positive and scientific in its history and meantime the Bank has been accelerating
and accumulating the result of the new administration and management which is now
become an example on the management of private financial institutions.

BIBLIOGRAPHY

• ATM Abdus Shahid, Professor, BIBM “Management functions in Banks and

Motivation of the personnel” an article
• Dr. Md. Mainul Islam & Dr. Abdul Awal Khan “Fundamentals of
Management”
• AB Bank Annual Report-2007, 2008
• Heinz Weihrich & Harold Koontz “Management”, Eleventh Edition.
• Bangladesh Bank’s web site
 http://www.abbank.org
 http://www.elsevier.com
 http://www.managementjournals.com
 http://www.trainingreference.co.uk
 http://www.jenison.co.uk
 http://www.sellingcommunications.com
 http://www.profilesinternational.com/SOL_Background_Checks.aspx
 http://en.wikipedia.org/wiki/Recruitment
 http://www.staffing-and-recruiting-essentials.com/Recruiting-
Employees.html

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