BSS Financial Performance

Operational Efficiency & Financial Performance
Operational Efficiency & Financial

Performance
Of
Specialized Commercial Banks Of
Bangladesh
Submitted by
WWW.ASSIGNMENTPOINT.COM
1
www.AssignmentPoint.com
Chapter-1
Introduction & Background of the Study
1. Introduction to the Study:

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1.1 Background:
As a requirement of partial fulfillment of MBA major in Finance a thesis report is assigned to me
on Operational Efficiency & Financial Performance of Specialized Commercial Banks of
Bangladesh. Operational Efficiency & Financial Performance is an important decision making
issue for any bank. I prepared the thesis report with great interest. To prepare this thesis report I
collected data from different reliable sources. Then I started analyzing based on those data.
Theoretically, I know that the operational efficiency and financial performance is different for
different bank and the performance of bank can be measured by different analysis. The thesis
report contains different analysis like bank Ratio analysis, Trend analysis, Comparative analysis,
etc. The complete report on Operational Efficiency & Financial Performance of
Bangladesh actually proves my academic knowledge also increase my analytical ability.
1.1.2 Scope of the Study:
Operational Efficiency & Financial Performance of Specialized Commercial Banks of
Bangladesh is an important topic. Different banks operational efficiency and financial
performance are different. As a student of MBA major in finance, it is very essential for me to
the banks financial performance and efficiency. To prepare this thesis report I have learn how the
financial analyst measure the financial performance of a company. As preparation of this thesis
report give me such knowledge on specialized commercial banks and their performance and their
operational efficiency and financial performance, thats why I choose this topic.
1.2 Objectives:
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1.2.1 Broad Objective:

The primary objective of this thesis report is to know about the operational efficiency and
financial performance of specialized commercial banks of Bangladesh.
1.2.2 Specific objectives:
To learn about specialized commercial bank in Bangladesh.
To learn how financial analyst analyze the financial ratios of the bank.
To learn about the financial performance of specialized commercial banks of
Bangladesh.
To learn about the trend analyze of specialized commercial banks.
To learn how the specialized commercial banks finance their assets.
1.3 Methodology of the Study:

1.3.1 Types of study:
This study aims at analyzing the Operational Efficiency & Financial Performance of
Specialized Commercial Banks of Bangladesh. The study has attempted to provide an overall
scenario of Operational Efficiency & Financial Performance of Specialized Commercial
Banks of Bangladesh. Where clearly analyze 3 commercial banks of financial performance and
their operational efficiency.
It was not possible to collect data by discussing with different personnel because here I worked
with specialized commercial banks it is not possible to discuss with a lot of personnel. That is
why it had no personnel involvement. That is why most of the information from the secondary
sources.
1.3.2 Sources of Data:
Primary data collection: Primary data collected through discussion one with another
and also by taking help of the supervisors suggestions.
Secondary data: I did not visit any bank. That is why secondary data was collected by
visiting institutions website and I also collect data from Bangladesh Bank library and
also by purchasing the annual reports.
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This report mainly based on secondary data but to know, evaluate and understand secondary data
primary data also become important.
1.3.3 Model Used:
This report is prepared on the basis of secondary data of specialized commercial banks by
visiting website & by studying their annual report. There are some theoretical discussions about
4 specialized commercial banks. Here I used some analysis like financial ratio analysis, trend
analysis, and performance analysis etc. To calculate the ratio I used the general formula that is
learnt in Commercial Bank Management. I also use some bar and line graph to clearly show the
analysis.
1.3.4 Organization of the Report:
The thesis report on Operational Efficiency & Financial Performance of Specialized
Commercial Banks of Bangladesh Contain different analysis. The first chapter of the report
includes Introduction of the report, the second chapter Overview of Banking industry in
Bangladesh, the third chapter contain a brief Introduction of 4 Specialized Commercial Banks,
forth chapter contain Ratio analysis, Trend analysis, and Comparative analysis of Specialized
Commercial Banks of Bangladesh, the fifth chapter includes Findings of Study. At the last
chapter contain a Conclusion and Recommendations.
1.4. Limitations of the Report:

The sources of the information are collected from institutions website and annual report and also
from Bangladesh Bank library.
Every task has some limitations. I faced some usual constraints during the research period.
Though I have given utmost effort to prepare this report but there are some limitations of the
study. These are as follows Collecting Information
Communication
Secrecy of Information
Different Format Data
Technological Problem
Financial Data Complexity
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Chapter -2
Overview of Banking Industry in Bangladesh
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2. Banking Sector in Bangladesh:

2.1 Introduction:
First modern banking was introduced in 1668 in Stockholm as 'Savings Pis Bank' which opened
up a new era of banking activities throughout the European Mainland.
In the South Asian region, early banking system was introduced by the Afgan traders popularly
known as Kabuliwallas. Muslim businessmen from Kabul, Afghanistan came to India and started
money lending business in exchange of interest sometime in 1312 A.D. They were known as
'Kabuliawallas'.
A bank is a financial institution licensed by a government. Its primary activities include

borrowing and lending money. Many other financial activities were allowed over time.
All over the world the dimension of Banking has been changing rapidly due to deregulation,
technological innovation and Globalization. Banking in Bangladesh has to keep pace with the
global change. Now banks must complete in the market place both with local institution as well
as foreign ones. To survive ad thrive in such a competitive banking world, two important
requirements are development of appropriate financial infrastructure by the central Bank and
development of Professionalism in the sense of developing and appropriate manpower
structure and its expertise and experience. To introduce skilled Banker, only theoretical
knowledge in the field of banking studies is not sufficient. An academic course of the study has a
great value when it has practical application in real life situation.
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2.2 Number and Types of Banks:

The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are
Nationalized Commercial Banks (NCBs), 28 local private commercial banks, 12 foreign banks
and the rest five are Development Financial Institutions (DFIs).
Sonali Bank is the largest among the NCBs while Pubali is leading in the private ones. Among
the 12 foreign banks, Standard Chartered has become the largest in the country. Besides the
scheduled banks, Samabai (Cooperative) Bank, Ansar-VDP Bank, Karmasansthan (Employment)
Bank and Grameen bank are functioning in the financial sector. The number of total branches of
all scheduled banks is 6,038 as of June 2000. Of the branches, 39.95 per cent (2,412) are located
in the urban areas and 60.05 per cent (3,626) in the rural areas. Of the branches NCBs hold
3,616, private commercial banks 1,214, foreign banks 31 and specialized banks 1,177.
Bangladesh Bank (BB) regulates and supervises the activities of all banks. The BB is now
carrying out a reform programmer to ensure quality services by the banks.
Bangladesh Bank:
Bangladesh Bank (BB) has been working as the central bank since the country's independence.
Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing
transaction facilities of all public monetary matters. BB is also responsible for planning the
government's monetary policy and implementing it thereby. The BB has a governing body
comprising of nine members with the Governor as its chief. Apart from the head office in Dhaka,
it has nine more branches, of which two in Dhaka and one each in Chittagong, Rajshahi, Khulna,
Bogra, Sylhet, Rangpur and Barisal.
Commercial Banks:
The commercial banking system dominates the financial sector with limited role of Non-Bank
Financial Institutions and the capital market. The banking sector alone accounts for a substantial
share of assets of the financial system. The banking system is dominated by the four State
Owned Commercial Banks, which together control more than 30% of deposits and operates 3383
branches (50% of the total).
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Specialized Banks:
Out of the five specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan
Bank) were created to meet the credit need of the agricultural sector while the other two
(Bangladesh Shilpa Bank (BSB) and Bangladesh Shilpa Rin Sangtha (BSRS)) are for extending
term loans to the industrial sector of Bangladesh, another bank is Bank of Small Industries &
Commerce Bangladesh Ltd.
2.2.1 Nationalized Commercial Banks (NCBs):

1. Sonali Bank
2. Janata Bank
3. Agrani Bank
4. Rupali Bank
2.2.2 Private Commercial Banks (PCBs):

1. Mutual Trust Bank Limited
2. BRAC Bank Limited
3. Eastern Bank Limited
4. Dutch Bangla Bank Limited
5. Dhaka Bank Limited
6. Islami Bank Bangladesh Ltd
7. Uttara Bank Limited
8. Pubali Bank Limited
9. IFIC Bank Limited
10. National Bank Limited
11. The City Bank Limited
12. NCC Bank Limited
13. Prime Bank Limited
14. Southeast Bank Limited
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15. Al-Arafah Islami Bank Limited

16. Social Islami Bank Limited
17. Standard Bank Limited
18. One Bank Limited
19. Exim Bank Limited
20. Bangladesh Commerce Bank Limited
21. First Security Islami Bank Limited
22. The Premier Bank Limited
23. Bank Asia Limited
24. Trust Bank Limited
25. Shahjalal Islami Bank Limited
26. Jamuna Bank Limited
27. ICB Islami Bank
28. AB Bank
2.2.3 Foreign Commercial Banks:

1. Citibank
2. HSBC
3. Standard Chartered Bank
4. Commercial Bank of Ceylon
5. State Bank of India
6. Habib Bank Limited
7. National Bank of Pakistan
8. Woori Bank
9. Bank Alfalah
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2.2.4 Specialized Development Banks:

Out of the specialized banks, two (Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank)
were created to meet the credit needs of the agricultural sector while the other two ( Bangladesh
Shilpa Bank (BSB) & Bangladesh Shilpa Rin Sangtha (BSRS) are for extending term loans to
the industrial sector. The Specialized banks are:
1. Bangladesh Krishi Bank
2. Rajshahi Krishi Unnayan Bank
3. Bangladesh Shilpa Bank
4. Bangladesh Shilpa Rin Sangstha
5. Bank of Small Industries & Commerce Bangladesh Ltd.
2.2.5 Other Bank:

1. Ansar VDP Unnayan Bank
2. Bangladesh Samabai Bank Ltd. (BSBL)
3. Grameen Bank
4. Karmasansthan Bank
2.3 Services of the Bank:

Accounts, Current, FDR, PDS, Deposit Scheme:
2.3.1 Current Account: Generally this sort of account opens for business purpose. Customers
can withdraw money once or more against their deposit. No interest can be paid to the customers
in this account. If the amount of deposit is below taka 1,000 on an average the bank has authority
to cut taka 50 from each account as incidental charge after every six months. Against this account
loan facility can be ensured. Usually one can open this account with taka 500. One can open this
sort of account through cash or check/bill. All the banks follow almost the same rules for
opening current account.
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2.3.2 Savings Bank Account:

Usually customers open this sort of account at a low interest for only security. This is also an
initiative to create people's savings tendency. Generally, this account is to be opened at taka 100.
Interest is to be paid in June and December after every six months. If money is withdrawn twice
a week or more than taka 10,000 is withdrawn (if 25% more compared to total deposit) then
interest is not paid. This account guarantees loan. Almost all the banks follow the same rules in
the field of savings account, except foreign banks for varying deposit. On an average, all the
banks give around six percent interest.
2.3.3 Special Services:
Some Banks render special services to the customers attracting other banks.
2.3.4 Internet Banking:
Customers need an Internet access service. As an Internet Banking customer, he will be given a
specific user ID and a confident password. The customer can then view his account balances
online. It is the industry-standard method used to protect communications over the Internet.
To ensure that customers' personal data cannot be accessed by anyone but them, all reporting
information has been secured using Version and Secure Sockets Layer (SSL).
2.3.5 Home Banking:
Home banking frees customers of visiting branches and most transactions will be automated to
enable them to check their account activities transfer fund and to open L/C sitting in their own
desk with the help of a PC and a telephone.
Electronic Banking Services for Windows (EBSW)
Electronic Banking Service for Windows (EBSW) provides a full range of reporting capabilities,
and a comprehensive range of transaction initiation options.
The customers will be able to process all payments as well as initiate L/Cs and amendments,
through EBSW. They will be able to view the balances of all accounts, whether with Standard
Chartered or with any other banks using SWIFT. Additionally, transactions may be approved by
remote authorization even if the approver is out of station.
2.3.6 Automated Teller Machine (ATM):
Automated Teller Machine (ATM), a new concept in modern banking, has already been
introduced to facilitate subscribers 24 hour cash access through a plastic card. The network of
ATM installations will be adequately extended to enable customers to non-branch banking
beyond banking.
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2.3.7 Tele Banking:

Tele Banking allows customers to get access into their respective banking information 24 hours a
day. Subscribers can update themselves by making a phone call. They can transfer any amount of
deposit to other accounts irrespective of location either from home or office.
2.3.8 SWIFT:
SWIFT is a bank owned non-profit co-operative based in Belgium servicing the financial
community worldwide. It ensures secure messaging having a global reach of 6,495 Banks and
Financial Institutions in 178 countries, 24 hours a day. SWIFT global network carries an average
4 million message daily and estimated average value of payment messages is USD 2 trillion.
SWIFT is a highly secured messaging network enables Banks to send and receive Fund Transfer,
L/C related and other free format messages to and from any banks active in the network.
Having SWIFT facility, Bank will be able to serve its customers more profitable by providing
L/C, Payment and other messages efficiently and with utmost security. Especially it will be of
great help for our clients dealing with Imports, Exports and Remittances etc.
2.4 Bangladesh: Money and Banking sector review:

2.4.1 Monetary & Credit Policy:
The central bank of Bangladesh rolled out its monetary policy for the second half of the current
fiscal year ending June 2011, and predicted more than 7.0 percent GDP growth for the South
Asian country in the 2011-12 fiscal years.
Bangladesh Bank (BB) said the half yearly monetary policy, spanning from January to July 2011,
is designed to support the government's policies and programs in pursuit of faster inclusive
economic growth and poverty reduction.
The monetary program like previous one for July to December period has been chalked up in line
with the national budget for 2010-11 (July 2010-June 2011) fiscal year which set the country's
real GDP target at 6.7 percent, it said.
"Monetary policies will be maintained on a growth supportive stance to help promote faster
inclusive economic growth, with due vigil against inflationary pressure,
During the past financial year the money supply increased 21% (June 2011 compared to June
2010), through September 2011 the money supply has increased since June 2011 at an annual
rate of 12%.
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2.4.2 Narrow Money:

This entry, also known as "M1," comprises the total quantity of currency in circulation (notes and
coins) plus demand deposits denominated in the national currency held by nonbank financial
institutions, state and local governments, nonfinancial public enterprises, and the private sector
of the economy, measured at a specific point in time. National currency units have been
converted to US dollars at the closing exchange rate for the date of the information. Because of
exchange rate movements, changes in money stocks measured in national currency units may
vary significantly from those shown in US dollars, and caution is urged when making
comparisons over time in US dollars. Narrow money consists of more liquid assets than broad
money and the assets generally function as a "medium of exchange" for an economy.
Stock of narrow money: $13.98 billion (31 December 2010 est.) $10.92 billion (31 December
2009 est.)
2.4.3 Broad Money:
This entry covers all of "Narrow money," plus the total quantity of time and savings deposits,
credit union deposits, institutional money market funds, short-term repurchase agreements
between the central bank and commercial deposit banks, and other large liquid assets held by
nonbank financial institutions, state and local governments, nonfinancial public enterprises, and
the private sector of the economy. National currency units have been converted to US dollars at
the closing exchange rate for the date of the information. Because of exchange rate movements,
changes in money stocks measured in national currency units may vary significantly from those
shown in US dollars, and caution is urged when making comparisons over time in US dollars. In
addition to serving as a medium of exchange, broad money includes assets that are slightly less
liquid than narrow money and the assets tend to function as a "store of value" - a means of
holding wealth.
Stock of broad money: $57.21 billion (31 December 2010 est.) $63.03 billion (31 December
2009.)
2.4.4 Domestic Credit:
This entry is the total quantity of credit, denominated in the domestic currency, provided by
banks to nonbanking institutions. The national currency units have been converted to US dollars
at the closing exchange rate on the date of the information.
Stock of domestic credit: $64.71 billion (31 December 2010 est.) $53.59 billion (31 December
2009 est.)
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2.4.5 Current Bank deposit and credit:

Bank Deposit:
(Taka in Millions)
Percentage Changes of
October, 2011 over
Items
October,
2011
September,
2011
October,
2010
September,
2011
October,
2010
Demand
Deposits
Time
Deposits
482746
470495
439796
2.6
9.77
3532864
3488925
2924464
1.26
20.8
4015610
3959420
3364260
1.42
19.36
Total
Bank Credit:
(Taka in Millions)
Percentage Changes of
October, 2011 over
Items
October,
2011
September,
2011
October,
2010
September,
2011
October,
2010
Advances
including
money at call
& balances
3404730
3355933
2832840
1.45
20.19
Bills
211221
209184
164486
0.97
28.41
Investments
820081
777732
577803
5.45
41.93
Total
4436032
4342849
3575129
2.15
24.08
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Chapter -3
Specialized Commercial Banks & Their
Operations in Bangladesh
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3. Specialized Commercial Banks & Their Operations in Bangladesh:

3.1 Bangladesh Krishi Bank (BKB):
The major occupation of the people of Bangladesh is "Krishi". Krishi is a Bengali word which
means "Agriculture". About 85% of the population depends directly or indirectly on agriculture
which contributes a significant portion to GDP.
Bangladesh Krishi Bank (BKB) has been established under the Bangladesh Krishi Bank order
1973 (President's Order No 27 of 1973). BKB is Banking Company under the Banking Company
Act-1991. Its Head Office is located at Krishi Bank Bhaban, 83-85 Motijheel Commercial Area,
Dhaka-1000, Bangladesh.
The primary objective of BKB is to provide credit facilities to the farmers for the development of
agriculture and entrepreneurs engaged in development of agro-based and cottage industries.
The Bank is guided in accordance with the policies and principles of the Government of the
Peoples Republic of Bangladesh. BKB has an authorized capital of Tk. 15,000 Million (Taka
Fifteen thousand Million) only and paid up capital of Tk. 9000 Million (Taka Nine thousand
Million) only which is fully paid by the government. The Bank started commercial functioning
since 1977 to generate more loan able fund from the idle rural and urban savings and invest them
for the betterment of our economy.
The Bank operates its function through its 952 branches (except Rajshahi Division) of which 822
are rural and 130 are urban. It has 15 foreign exchange (Authorized dealer) branches. In the field
level the Bank has 8 Divisional, 21 Chief Regional and 30 Regional offices for close supervision
of the branch activities. For smooth operation, s a part of internal control and compliance system,
the bank has also 56 field level audit offices of which 5 at Divisional and 51 at Regional levels.
In the Head Office the Bank has 4 Divisions headed by General Managers and 28 Departments
including Local Principal Office and Training Institute headed by Deputy General Managers. The
existing strength of Bank's manpower is 9430 against the approved strength of 13680 as on 30
December, 2010.
The Bank has a Board of Directors comprising of 12 members. The Board is headed by a
Chairman. The Directors represent both public and private sectors and are appointed by the
government. The Board Chairman is generally an experienced professional/ex-professional who
has wide acceptability and rapport.
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The Managing Director is the Chief Executive of the Bank. He is appointed by the government.
The Bank has two posts of Deputy Managing Directors and is appointed by the Government.
The Bank has 14 posts of General Manager. They are also appointed by the Government.
In the Head Office there are 4 Divisions each headed by a General Manager. The divisions are:
Administration Division
Planning & Operation Division
Accounts Division and
Loan Recovery Division
Under the control and supervision of the above four divisions 28 departments are working in the
head office headed by Deputy General Managers.
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3.1.2 Executive Profile of Bangladesh Krishi Bank:

3.1.2.1 Board of Directors (BKB):
Name
Designation
Mr. Khondkar Ibrahim Khaled
Chairman
Md. Mukter Hussain
Managing Director
C. Q. K. Mustaq Ahmed
Director
Mr. Mosharraf Hossain
Director
Mr. Md. Humayun Khalid
Director
Mr. Alauddin A. Majid
Director
Mr. Mahbubur Rahman Bhuyan
Director
Mohammad Muslim Chowdhury
Director
Mr. Shahabuddin Ahmed
Director
Md. Shah Alam Siddiqui
Director
Md. Habibur Rahman
Director
Md. Malek Newaz
Secretary
3.1.2.2 Executive Profile of (BKB)

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Name
Designation
Md. Mukter Hussain
Managing Director
Md. Joynal Abedin
Deputy Managing Director
Mr. Manjur Ahmed
Md. Majibur Rahman
General Manager Administration Division
Mr. Soud Ahmed
General Manager Accounts Division
Muhammad Awal Khan
General Manager Planning & Operation Division
Md. Saiful Islam
General Manager Recovery Division
Dr. Md. Jalal Uddin
General Manager Local Principal Office
Abu Saleh Md. Musa
General Manager Barisal Division
Mr. Anwar Ali Khan
General Manager Dhaka Division
Md. Firoze Khan
General Manager Comilla Division
Mr. Nitai Chand Das
General Manager Sylhet Division
Moniara Begum
General Manager Mymensingh Division
Kamrul Islam Asad
General Manager Faridpur Division
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Md. Moazzam Hossain Bhuiyan
General Manager Chittagong Division
Mesbah Uddin Ahmed
General Manager Kushtia Division
Mr. Pijush Chandra Bhowal
General Manager Khulna Division
3.1.3 Products and Services:

o
Letter of Credit (LC)
Bill purchase/Discount
Export Credit (Pre Shipment & Post Shipment)
Remittance (Inward, Outward)
Collection, Purchase and Sale of Foreign Currency and Travelers Cheques.
Maintenance of Student education file.
Guarantees in Foreign Currency.
Foreign Currency accounts.
NFCD (Non-Resident Foreign Currency Deposit) A/C.
RFCD (Resident Foreign Currency Deposit) A/C
Forward Contracts
Correspondent Banking Relations.
Taka Drawing Arrangement
Dealing Room
S.W.I.F.T. (Society for Worldwide Interbank Financial Telecommunication).

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3.1.3.1 Import Finance:

Bangladesh Krishi Bank (BKB) deals in all kinds of Documentary Credit operation under
different credit Lines/Aid/Loan/Grants/cash etc.
BKB finances the following import sectors of the economy:
All kinds of Capital Machineries for the development of economy giving special
emphasis on Agro based industries/Ready made Garments industries and imports
substitute industries.
Import of all kinds of industrial Raw Materials for the industries.
Any other improved items and specially items directed by the government.
3.1.3.2 Export Finance:

Bangladesh Krishi Bank (BKB) supports exports of any kind giving special emphasis on the
following
Financial assistance to all kinds of export oriented industry and other products specially
export of fruits & vegetables
Offers Concessional rate of interest for Export Finance.
Does all activities in exports, such as:
Export bill negotiation /Purchase/Collection.
Helps the export firms for getting export incentive.
Financial support for materializing the export order.
3.1.3.3 Foreign Remittance:

Bangladesh Krishi Bank (BKB) plays an important role in the field of foreign remittances. Most
of the BKB branches located at the remote areas of rural Bangladesh. The Bangladeshi people
working abroad and their relatives in the country maintain bank accounts with BKB branches.
Bank has an arrangement to allow Bangladeshi people working abroad to send their foreign
currencies to their relatives at home. Necessary steps have been taken to widen this sector so that
the Bank can serve more people and collect more remittances.
3.1.3.4 S.W.I.F.T. (Society for Worldwide Interbank Financial Telecommunication):
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Bangladesh Krishi Bank is now a proud member of SWIFT. It is connected with modern
international financial tale communication system. L/C advising/transferring and quick transfers
of remittances as well as other financial correspondences have become very easy & speedy with
the installation of SWIFT. Bangladesh Krishi Bank's SWIFT BIC IS "BKBABDDH"
3.1.3.5 Dealing Room
BKB is actively operate treasury operation i.e. dealing room operation in its International
Department, Head Office, Dhaka to transact foreign currency trading in Inter Bank FC market
both at home and abroad.
3.1.3.6 Foreign exchanges activities:
BKB extends its service to the travelers by endorsement of cash FC/TC in passports.
BKB renders Hajj services to the pilgrims which is 3rd highest in the banking sector.
BKB deals in spot and forward sale and purchase of foreign currency in local inter-bank mark.
3.1.4 Role of Bangladesh Krishi bank in Economic Development:

3.1.4.1 Poverty alleviation and Micro-credit Programs/Projects:
Bangladesh Krishi Bank was established under BKB Order`1973 with the objective of
strengthening rural economy by extending credit support to agricultural and agro-based sectors.
In consideration of the importance of Micro-Credit and with the objective of generating
employment as well as encouraging social development BKB has undertaken several MicroCredit programs of its own and also in collaboration with local and foreign agencies. The
programs have been designed to cover all segments of poor population whether skilled or
unskilled such as small and marginal farmers, landless laborers, destitute women, disabled,
unemployed youth and rural artisans etc.
Considering the needs of the target groups since late seventy`s BKB has been implementing a
series of Micro-Credit programs out of which 10 programs have recently been completed and 31
programs are in operation at present. These diversified micro-credit programs are being
implemented by BKB to achieve the following objectives:
*
To create employment opportunities through income generating activities.
To empower the rural women to establish their own rights.
To improve the living standard of the rural people.
To alleviate poverty of the poor people.
To make easy access to institutional credit facilities and resources.
To mobilize rural savings.

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To make optimum utilization of rural resources.
To engage inactive human resources of the rural areas in productive/economic activities.
To engage rural people in development process of the country.
To eliminate exploitation done by the money lenders.
A Salient feature of BKB`s on going Micro-Credit Programs under poverty alleviation is given
below:
3.1.4.1.1 Credit program for the landless and Marginal Farmers:

This program has been launched with BKB`s own fund in 1992-93 financial year through its all
branches. Landless and marginal farmers get short term credit under this program. Persons/
Peasants having not more than 1.50 acres of cultivable land and annual income of highest Tk.
25000/- are eligible for getting credit under this program. After formation of groups and
obtaining training the group members get credit without any collateral security. But they have to
hypothecate the goods and assets created by the loan. In lieu of collateral they have to take
responsibility as guarantor for the recovery of loan within the group. The present Interest rate is
10%. 52 equal weekly installments are fixed and the recovery will be taken place accordingly.
About 474181beneficiaries have been provided with Tk. 4698.40 million.
3.1.4.1.2 Beef Fattening Joint Program:
This is a bank`s own financed program. Bank launched this program in 1994. The main objective
of this program is to fill up the deficiency of animal protein in the country as well as creation of
self-employment for poor and unemployed people living in the villages. Under this program a
person can get a loan amounting up to Tk.25000/- for 5 calves against guarantee of a bank
official / local elite. The rate of interest is 10%. The loan is to be repaid with interest in one
installment within one year. About 89025 beneficiaries have been provided with Tk.1481.30
million.
3.1.4.1.3 Swanirvar Credit Program:
Bank has been implementing swanirvar credit program without collateral security since 1979.
Employment creation for the landless and marginal farmers, increasing their standard of living,
creation of social and ethical values, eradication of illiteracy, providing creation of health and
family planning services etc are the objectives of this program. The beneficiaries under the
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program are landless, rural poor & destitute having maximum 0.40 acres of cultivable land and
maximum annual income is Tk.20,000/-. 212 branches of 31 districts (regions) are involved in
this program. The beneficiaries have to form groups (each Consisting 5 members) and a center
(consisting 5 groups). BKB & Swanirvar Bangladesh is operating this program jointly. The credit
is collateral free but Group guarantee for each other is needed. Maximum loan amount is
TK.15,000/- per beneficiary. It is Short term credit (to be recovered in 52 equal weekly
installments within one year). Disbursement of loans to the beneficiaries is made duly
recommended by Swanirvar staffs. Swanirvar Bangladesh is responsible for group formation,
giving training to the beneficiaries and recovery of loan. Rate of Interest is 16%. (6% Service
charge for Swarnivar, 10% Interest for BKB). About 274115 beneficiaries have been provided
with Tk.1577.80 million.
3.1.4.1.4 Small Farmers & landless Laborers Development Project (SFDP):

This project is being implemented jointly by BARD & BKB from 1995 through 21 branches
under 6 Regions (districts) of Bangladesh Krishi Bank. The objectives of the project are to
increase production, employment creation and increase income of the small landless farmers &
laborers through formation of small groups, generation of own capital and provision for capital
support for undertaking various income generating activities. Under this project Tk. 19.80
million has been disbursed to 2710 beneficiaries on average per year and recovered Tk. 15.80
million per year. Cumulative recovery rate is 97%. The beneficiaries under this program are
small farmers having maximum 0.50 acres of cultivable land & landless laborers having 0.511.50 acres of cultivable land. Selection of target family, group formation, and supervision of
group activities, supervision of loan utilization and all kinds of field works are done by BARD.
Opening of group account, sanctioning and disbursement of loan & maintaining savings account
etc. are done by BKB. Bank provides credit from its own source after formation 5-10 members
group. The loan is collateral free, but assets and goods derived from credit are hypothecated.
Lien of group savings & group pressure replace the collateral. Loan is disbursed for any
recognized items which is accepted by bank & identified by members of group. Interest rate is
15% of which 10% for BKB, 5% for BARD. Chairman or secretary of the group recovers the
loan. Loan is recovered in weekly/fortnightly/monthly installments within maximum 18 months.
About 28266 beneficiaries have been provided with Tk.215.20 million.
3.1.4.1.5 South Asia Poverty Alleviation Program:
This program was launched on the basis of Dhaka conference of SAARC countries in 1993. This
is a joint venture program with UNDP. But it is banks own financed program. UNDP organizes
the beneficiaries, trains them and recommends the loan. The responsibility of credit realization
lies with the managers of village organizations. This is an area based credit program. Only
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Kishorganj (a district) sadar upazilla is the command area of this program. The maximum credit
limit is Tk. 25000/- per beneficiary. 25 beneficiaries form a group. Rate of interest is 15% (BKB
10% and the manager of village organization 5%).The loan is collateral free and is recovered in
weekly installments within one year. About 53723 beneficiaries have been provided with
Tk.445.70 million.
3.1.4.1.6 United Nations Capital Development Fund (UNCDF):
This program started in 1983 with the objective of financing rural & cottage industries. Now it is
running on revolving fund. This is a joint venture program with BKB, BSCIC & UNCDF.
UNCDF provides one third of fund while BKB provides two thirds. BSCIC selects borrower and
provides extension services. The program covers 29 districts. BKB provides credit from joint
fund and maintains account. Rate of interest is 10% - 14%. This is a collateral free credit. Raw
materials, finished goods and capital asset created out of credit are kept as hypothecation against
credit provided to the beneficiaries. About 24837 beneficiaries have been provided with
Tk.136.70 million.
3.1.4.1.7 Rural Women Employment Creation Project ADB Loan No 1067 BAN (SF):
This is a joint project started in 1993 for experimenting with the idea of co-participation of
government Organizations (GOs) and Non-Government Organizations (NGOs) aiming at
employment creation for poor women in the rural areas. Department of women Affairs (DWA),
19 NGO`s in 12 thanas (upa-zilla) and BKB jointly implementing the project. NGOs organizes
individuals into groups, train them under the supervision of DWA and recommends for credit
funded by ADB. This is also a collateral free credit. Interest rate is 12%. About 67402
beneficiaries have been provided with Tk.154.70 million.
3.1.4.1.8 BKB-NGO Micro Credit Program:
This program is a replication of Rural Women Employment Creation Project (RWECP).NGOs
organizes individuals into groups, provides them training and recommends for credit. BKB
provides credit from its own fund. This is also a collateral free credit. Interest rate is 12.5%.
About 16636 beneficiaries have been provided with Tk. 136.00 million.
3.1.4.1.9 Credit under National Poverty Alleviation Program through Goat Rearing:
These programs have been introduced in 2002 aiming to eradicate poverty through goat rearing.
Directorate of livestock provides with extension service while BKB provides credit from its own
fund for a period of 4 years term. This is a collateral free credit provided from all branches of
BKB. Interest rate is 10%. About 24354 beneficiaries have been provided with Tk. 236.50
million.
3.1.4.1.10 Milching Cow Credit Program for the Women:
26
The program launched in the year 1997. The main objectives of the program were proper
utilization of the unemployed women increasing milk production and helping the up-lift of the
condition of the women folk. Under this program one village of a branch area is selected. One
woman from each family of the selected village is eligible to get this credit facility. An applicant
gets maximum Tk. 10,000/- to purchase a calf. Interest rate is 8%. The loan is realized within one
year in weekly installments. This is a collateral free supervised credit. An officer or field worker
of the branch is engaged in supervising the credit under the direct control of the branch manager.
Livestock officers help the beneficiaries in treatment and rearing the cow. About 612
beneficiaries have been provided with Tk. 8.20 million.
3.1.4.1.11 Special Micro Credit Program for the Disabled:

These programs have been introduced in 2002 aiming to income generation & development of
socio-economic condition through employment creation for the disabled persons. Department of
Social Welfare and Disabled Foundation provide extension services. This is a collateral free
credit provided from all branches of the bank. Interest rate is 10%. About 530 beneficiaries have
been provided with Tk. 5.60 million.
3.1.4.1.12 Monipuri Small Traders Credit Program:
This program have been introduced in 2003 aiming to provide working capital to handloom
industry operated by the Monipuri women living in the greater Sylhet areas. A bank official
organizes the Monipuri women having handloom and training/education/experience of operation.
Eligible women are organized into 5 member groups. This is also a collateral free credit provided
from the bank`s own fund. Interest rate is 10%. About 684 beneficiaries have been provided with
Tk.21.50 million.
3.1.4.1.13 Special Credit Program for the Rakhains under the district of Cox`s Bazar:
This program has been launched in 2003 aiming to provide working capital credit for producing
handloom and cottage Industrial products and marketing. The loan is disbursed to the Rakhain
community living in the district of Cox`s Bazar. Bank officials organize Rakhains into 5 member
groups. This is a collateral free credit programmer from banks own fund. Interest rate is 10%.
About 469 beneficiaries have been provided with Tk. 15.10 million.
3.1.4.1.14 Tree Plantation Programs: In 2002 and 2003 BKB has launched 8 Tree Plantation
Programs-viz:
27
i) All types of tree nursery including herbal,

ii) Horticulture Development,
iii) Fruit and forest tree plantation,
iv) Bamboo production,
v) Herbal gardening,
vi) Coconut gardening,
vii) Patipata (a plant used in making mat) production,
viii) Cane production.
These programs have been introduced in all branches of the bank to grow more and more trees
aiming to eradication of poverty, proper use of fallen land, increase of tree production facilitating
herbal treatment and development of environment. Credit under these programs is collateral free
up to Tk. 25,000/-. Interest rate is 8%. About 20043 beneficiaries have been provided with Tk.
203.50 million.
3.1.4.1.15 Establishment of Breeding Farm of Black Bengal Goat Program:
This program has been taken to ensure supply of kids of Black Bengal Goats in order to support
the national program of poverty alleviation through goat rearing. Under this program a farm
comprising 50 she goats is considered as a small farm and a farm comprising 51-200 she goats is
considered as a big farm. The loan is medium term. Credit limit is Tk. 30,000/- for a small farm
consisting of 10 she goats (with a he- goat). This credit limit is calculated for making up goatshed, purchasing of she-goats & he-goat and initial feed cost. This limit is proportionate for a
small farm having up to 50 numbers of she-goats. For a medium farm credit limit is to be
calculated deducting the cost of goat shed. This cost is borne by the entrepreneur. About 304
beneficiaries have been provided with Tk. 14.60 million.
3.1.4.1.16 Community Based Resource Management Project:
This project started in 2003-04 fiscal year. It is a joint venture project of BKB, IFAD and Dept.
of LGED of GOB. The project is to be implemented in all of the 10 upa-zillas of Sunamgonj (a
district) at 3 phases within 11 years. The project has five components such as: (1) Infra -structure
Development, (ii) Development of Fisheries, (iii) Crop and livestock Development, (iv) Grass
Roots Institutional Development and (v) Small Credit Bangladesh Krishi Bank deals with ``small
credit`` component of the project. LGED organizes the target people into 30 member groups.
Bank Provides short and medium term loan. Maximum loan limit is Tk. 14,000/- to each member
28
as short term and Tk. 27,000/- to each member as Medium term. The loan under this project is
collateral free. Rate of interest is 15%. 1508 credit organization (each credit organization consists
of maximum 30 beneficiaries) have been provided with Tk. 190.35 million.
3.1.4.1.17 Poverty Alleviation through Production and Improvement of Sheep:
This is a government directed program which has been launched in the last part of the fiscal year
2004-05. Primarily this is to be implemented throughout the selected 22 upazillas under selected
11 districts of BKB`s jurisdiction. Directorate of livestock provides with extensive services while
BKB provides credit from its own fund. Under this program credit amount up to taka 50,000/- is
collateral free. Interest rate is 8%. This loan is to be repaid within four years in 6 equal
installments including one year grace period. About 360 beneficiaries have been provided with
Tk. 3.80 million.
3.2 Rajshahi Krishi Unnayan Bank Ltd:

3.2.1 Establishment:
Rajshahi Krishi Unnayan Bank (RAKUB) was established by the President's Ordinance No. 58
of 1986 with the aim of providing institutional agricultural credit for optimum utilization of
agricultural potentials of Rajshahi Division. Taking over the branches and offices along with
assets and liabilities of the Bangladesh Krishi Bank within Rajshahi division, the bank started
functioning on 15 March 1987.
3.2.1.1 Company Overview:
Rajshahi Krishi Unnayan Bank Ltd. provides agricultural financing services in the Northwest
Bangladesh. It finances various agro based projects, such as tea, crop production, rubber
plantation, horticulture, poultry and duckery, mixed-farming, black Bengal goat rearing/goat kids
production farm/beef fattening, dairy and fish farm, prawn culture, fish fingerlings
production/hatchery, animal and fish feed meal production, food processing, agro-based
industries, agro-equipment production, salt crushing, cold storage, export processing, import
substituting goods production, handicraft and cottage industries, and working capital/cash credit,
as well as seed production, processing, and preservation. The company also provides small
enterprise credit programs. In addition, it involves in various activities related to socio-economic
development and poverty alleviation programs. Further, the company provides deposit accounts,
such as saving bank, short term deposit, current deposit, and fixed deposit receipt accounts.
Rajshahi Krishi Unnayan Bank Ltd. was founded in 1987 and is based in Rajshahi, Bangladesh.
The company has field offices in Rajshahi, Rangpur, Pabna, Bogra, Dinajpur, Chapai
Nawabgonj, Naogoan, Natore, Sirajgonj, Joypurhat, Gaibandha, Kurigram, Lalmonirhat,
Nilphamari, Panchagarh, and Thakurgaon, Bangladesh.
29
3.2.1.2 Organizational Structure:

The head office is stationed at divisional headquarters city of Rajshahi. The branches network of
the bank comprises 365 branches including one in Dhaka. Eighteen zonal offices stationed in
district headquarters control branches under them. The General Manager's office at Rangpur
oversees activities of 12 zones of greater Rangpur, Dinajpur and Bogra districts. There are 18
independent regional audit offices for conducting regular audit in branches and zonal offices.
3.2.1.3 Functions:
As the largest development partner in the northwest region Rajshahi Krishi Unnayan Bank aims
at overall development of farmers and all the sectors and sub-sectors of agriculture in this region.
Besides, catering to agricultural credit the bank performs ancillary functions as financing agribusiness and agro-based industries and poverty alleviation programs.
3.2.1.4 Capital:
Authorized capital of the bank amounts to Tk.7500 million. At present Paid-up capital amounts
to Tk.5700 million and reserve Tk.208.50 million as on 25 April 2010.
3.2.1.5 Management:
The Board is vested with the responsibility of formulation of policy in line with attainment of
growth in agriculture and economic development of the region through agricultural credit
support. The Board of Directors is constituted by seven members, all appointed by the
government. Besides, for emergency decisions there is an executive committee constituted of the
Chairman of the Board and two other members: the Managing Director and one of the Directors
elected by the Board. The Managing Director is the chief executive of the bank.
30
3.2.2 Executive Profile of Rajshahi Krishi Unnayan Bank:

3.2.2.1 Board of Directors (RAKUB):
Name
Designation
Prof. Dr. M. Shah Nowaz Ali
Chairman
Mr. Pradip Kumar Dutta
Managing Director
Mr. Abdul Mannan
Director
Mr. Khondoker Jahangir Kabir Rana
Director
Prof. Dr. Rustom Ali Ahmed
Director
Md. Saidur Rahman
Director
Md. Aminul Islam Khondokar
Secretary
3.2.2.2 Key Executives of (RAKUB)

Name
Designation
Mr. Pradip Kumar Dutta
Managing Director
31
Md. Mosharraf Hossain Chowdhury
S M Shamsul Alam
General Manager Divisional Office, Rangpur
Md. Abdul Khaleque Khan
General Manager Divisional Office, Rajshahi
Md. Habibur Rahman
General Manager Operation Division
Nishith Kumer Saha
General Manager Administration Division
Md. Yousuf Ali
General Manager ICC, Accts & Recovery

Division
The only training institute of the bank is situated at Rajshahi. There are 3,464 employees of the
bank of which 1,525 are officers and 1,939 other staff.
3.2.3 Poverty Alleviation Credit Programs:

3.2.3.1 Zero Poverty Loan Scheme:
The bank has initiated a special group-based micro-credit program entitled "Zero-poverty Loan
Scheme" for the extreme poverty stricken 23 upazilas in greater Rangpur district. Poor people in
the area pledge labour at lower to landlords during lean season for borrowing money. The
program is expected to restrain the tendency and eradicate poverty from the region by providing
up to Tk. 3000 collateral-free credit to day-laborers at only six percent interest rate.
3.2.3.2 Marginal & Small Farm System Crop Intensification Project (MSFSCIP): The
project aims at increasing productivity in agriculture as well as off-farm activities, helping target
group people achieve sustainable development, resist the increasing trend of losing land under
cultivation and attain self-dependence.
3.2.3.3 RAKUB Self-help Credit Program (RSCP): The project aims at self-employment
generation among landless and marginal farmers through collateral-free credit distribution. The
program is a propagation of MSFSCIP model at bank's own initiative.
3.2.3.4 Swanirvar: The term Swanirvar means self-dependence. The bank has introduced the
credit program under the auspices of Swanirvar Bangladesh, an NGO to improve socio-economic
condition of the helpless rural poor by creating employment opportunities.
3.2.3.5 Semi-intensive black Bengal goat rearing program: Marginal, small & medium
farmers, unemployed youth of Rajshahi division are the target group of the program. The
program will make contribution to the economy through goat skin export & production of
high quality meat for domestic & export markets.
32
3.2.3.6 United Nation Capital Development Fund (UNCDF): Under the program, credit
facilities are extended to entrepreneurs of cottage industries for creating self- employment
opportunities. The program aims at economic development and upliftment of the craftsmen.
3.2.3.7 RAKUB-NGO Linkage Program (RNLP): Under the program RAKUB provides fund
to select NGOs for financing micro-credit among landless, marginal & small farmers within
Rajshahi division.
3.2.3.8 Pilot Employment Generation Program (PEGP): This is a BSCIC (Bangladesh Small
& Cottage Industries Corpn.) assisted program which aims at employment generation among
rural poor women and women artisans in selected areas. Maximum credit limit under the
program is TK. 6,000 per borrower.
3.2.3.9 Women Entrepreneurship Development program (WEDP): The BSCIC assisted
program aims at promoting cottage industries and encouraging women entrepreneurship in
villages and suburban areas.
3.2.3.10 Shasya Gudam Reen Prokalpo (Food grain godown credit program): RAKUB
implementing since 1988 as support to the sharecroppers, marginal and small farmers having up
to 5 acres of land. Small and marginal farmers receive loan against stored crops in go down
immediately after harvest. The farmers sell out the produces when they get desired price for their
produces and repay the loan.
3.2.3.11 Crop Production: The Bank finances for production of all the summer and winter
crops, horticulture & nursery etc. High yielding and high value crops and seeds production is
particularly encouraged. Crop sub-sector alone occupies 60% of the lending budget of the Bank.
3.2.3.12 Livestock and Poultry: The Bank extends credit facilities for systematic and
commercial livestock farming which includes dairy, beef-fattening, poultry, raising and setting
up of hatcheries which in turn is expected to increase production of milk, meet and eggs, the
main source of protein. As the marginal and small farmers access to mechanized farming is
restrained by want of cash and collateral, the bank has a big lending window of draft animals for
cultivation of land, transportation of agricultural produces and other farming activities.
3.2.3.13 Irrigation Equipment & Farm Machinery: In today's technology-based farming of

high yielding and high-value crops, mechanization of cultivation, irrigation and pest-control is
33
indispensable. To cope with the situation financing power tillers, tractors, tube wells, powerpumps, fertilizer and pesticide application devices.
3.2.3.14 Agro-industry & Agri-business: The operational jurisdiction of the Bank is noted for
its agricultural potentials. The Bank pays due importance to setting up agro-industries for
preservation, processing and marketing of agricultural produces having backward linkage with
basic sub-sectors of crop, fishery, livestock and forestation. Manufacturing and marketing of
agricultural implements are also encouraged. Agro-industries for import sub situation are
specially
encouraged
by
offering
moderate
terms
of
financing.
3.3 Bangladesh Shilpa Rin Sangstha (BSRS):

3.3.1 Introduction:
Bangladesh Shilpa Rin Sangstha (BSRS) established on 31 October 1972 by the President's
Order No. 128 of 1972 to provide credit facilities and other assistance to industrial concerns and
to encourage and broaden the base of investment in Bangladesh. BSRS was vested with the
undertakings of the Pakistan Industrial Credit and Investment Corporation Limited (PICIC),
Investment Corporation of Pakistan, and National Investment Trust (NIT) located in Bangladesh.
Later, on 16 March 1987, the Investment Advisory Centre of Bangladesh (IACB) was merged
with BSRS. At the time of establishment, the authorized and paid up capital of BSRS was Tk.
1,000 million and Tk. 62.54 million respectively. The paid up capital was fully subscribed by the
government. In subsequent years, both authorized and paid up capital were enhanced several
times. On 30 June 2000, the amounts stood at Tk. 2,000 million and Tk. 700 million respectively.
Before 1995, the organization procured foreign currency funds in the form of lines of credit
channeled by the government from various international and regional lending agencies. At
present, all its funds are in local currency only.
Initially, BSRS provided medium and long-term credit facilities in both foreign and local
currencies to private sector industrial projects with fixed costs of Tk. 2 million and above. It
provided underwriting, bridge financing and debenture financing assistance to public limited
companies. It also financed public sector projects without any ceilings and undertook industrial
promotional activities, especially in less developed areas. Later, the functional areas of BSRS
expanded to cater to the changing financial needs of the economy. It started to provide equity
finance, guarantees, deferred payments for machinery imported from abroad under suppliers'
credit, guarantee and counter guarantee for loans, debts, credits, performance of contracts and
financing arrangements with foreign lending agencies, as well as local banks and financial
institutions for industrial concerns.
34
As a member of the Dhaka stock exchange, BSRS engages in trading of securities in primary and
secondary markets. On 4 May 1997, it started commercial banking operations through a
commercial bank branch located at Dhaka. The commercial banking operation is directed
towards deposit mobilization, issue of pay order and SDR, collection through a clearing house
and sale and purchase of ICB unit certificates, saving certificates and prize bonds. BSRS also
works as banker to the public issue of shares and debentures of companies through commercial
banks. It floated a closed end Mutual Fund in 1996 that had a paid up capital of Tk. 50 million.
On 30 June 2000, the total cumulative disbursement of loans and advances provided by the
Sangstha stood at Tk. 17,853.59 million and was composed of long-term loans (Tk. 17,470.57
million), secured overdrafts (Tk. 0.26 million), bridge/underwriting loans (Tk. 300.66 million),
loans under investors' scheme (Tk. 2.45 million), and staff loan (Tk. 79.66 million). On the
reference date, it had 195 projects in its long-term loan portfolio with total outstanding loans of
Tk. 17,605 million. Rates of interest charged by BSRS on its different types of loans varied
between 11.50% and 16%, while the interest rates offered on deposits varied between 7.75% and
8.50%. The investment portfolio of the organization in business year 1999-2000 included
investment in government securities (Tk. 20.07 million), in shares by listing status (Tk. 201.68
million), in debentures (Tk. 58.17 million), and in bonds by maturity (Tk. 20 million). Of its total
loan till 1999-2000, Tk. 15,918.84 million or 89.13% has been classified as non-performing
loans for which it had to make a total provision of Tk. 2,538.3 million from its profit.
On 30 June 2000, the assets of the Sangstha were valued at Tk. 18,834.46 million. Total offbalance-sheet assets amounted to Tk. 70.97 million. Shareholders equity was Tk. 1,455.65
million comprising paid up capital (Tk. 700 million), statutory reserve (Tk. 8.89 million), and
other reserves (Tk. 746.77 million). Cumulative net profit earned by the organization in the 19
years of its operation since inception has been Tk. 461.02 million. It contributed Tk. 155.43
million to the national exchequer in 2000.
The management of BSRS is vested in a 8-member board of directors, including a chairman and
a managing director appointed by the government. The managing director is the chief executive
officer of the organization. It has 350 employees, including executive officers of different cadres.
BSRS has 20 operational departments under 4 divisions at its head office in Dhaka and a
commercial branch. It also has 4 branch offices outside Dhaka, one each at Chittagong, Rajshahi,
Khulna and Sylhet.
35
3.3.2 Executive Profile of Bangladesh Shilpa Rin Sangstha (BSRS):

The BSRS has more than 200 officers and employees at its headquarters and two branches. It started its
journey in 1972 with the assets and liabilities of the former Pakistan Industrial Credit and Investment
Corporation Ltd, Investment Corporation of Pakistan and National Investment Trust, which were wound
up after the independence of Bangladesh.
Board of Directors of Bangladesh Shilpa Rin Sangstha (BSRB):

Name
Status with the Bank
Mr. Nazem Ahmed Chowdhury
Chairman
MD. Mizanur Rahman
Managing Director
Mr. Md. Matiur Rahan
Director
Mr. Md. Ziaul Haque Khondker
Director
Begum Khurshida Khatoon
Director
Razia Begum
Director
Mr. Md. Abul Hossain Miah
Director
Mr. Abdur Rahim Khan
Secretary
3.3.3 Role in Bangladesh Shilpa Rin Sangstha (BSRS) Economic Development

3.3.3.1 Literacy Programs:
36
The percentage of literacy in Bangladesh is only 23%. Includes basic literacy, numeracy, and
reading. The concept is to spread literacy.
3.3.3.2 Arsenic Programs:
Arsenic in Bangladesh drinking water is the worst manmade chemical calamity in human
history of thousands of people were dying
By drinking arsenic-contaminated water there has been incidences of lung, liver and bladder
cancers. Females exposed to arsenic for long time are exhibiting 60 times higher mortality from
respiratory diseases than normal. Skin cancers also appear later in life. In Bangladesh affected
people show ghastly crusts on their palms and feet, skin lesions, and cancers.
Presently the shallow tube wells are affected, although in a few cases wells below 300 meters
had arsenic above acceptable levels.
MAAWS has been actively advocating for expanding the coverage of safe water. Or should it
attempt to manage the likely outcome of arsenic poisoning
Finding & Solution:
Twisting beyond the elastic limits certainly backfires. MAAWS found a middle way to deal with
the situation. MAAWS began spearheading testing and inspection of all its existing tube-wells.
MAAWS is trying to focus on issues like:
What is the extent and severity of the problem in Earpur, Senbagh & Noakhali?
Why this happened?
How can this be addressed?
How can non-resident Bangladeshi's (NRB's) help?
Raise awareness to the arsenic problem:
These satellite images reflect the widespread effect of Arsenic. The use of water per person
ranges from 4Lt in arid areas to 425 Lt. a day in water abundant wealthy regions. With ever
increasing demand for pure drinking water, it causes us to look more closely on the amount of
pure drinking water we get everyday and the impact of that water on the quality of our lives as it
serves our daily needs. Prior to 1970 people of Bangladesh were using surface water for drinking
with the independence of Bangladesh in 1971 situation changed.
UN agencies and other agencies started to sink shallow tube wells for drinking water to save the
country from water borne diseases. Within three decades as the water layers lowered came the
problem of arsenic. Although the arsenic-contamination of groundwater has been declared a
national disaster, its seriousness is yet to be fully comprehended. Water samples have indicated
that arsenic-contamination is "prominent" in the shallow aquifers. Most people draw their supply
of water from this source. There is yet another dimension. Damming of the rivers upstream. The
37
bottom line is that water diversion constructions are the worst tampering mechanisms of natural
water courses on which rest the beautiful balance of Nature. These mechanisms create
imbalanced.
3.3.3.3 Local Area Arsenic Databank:
MAAWS Computer School has a database and listing of people afflicted by Arsenic. We have
qualified and trained people with UNIX, SAS, ORACLE and other statistical programs, to
handle and develop database as per donor requirement and capable of sharing with any NGOs,
CBOs, Donor Agencies, Aid Organizations, Funding institutions etc.
3.3.3.4 Computer Learning Center:

Job level basic to advanced training in office 2000 & advance programs. This program is
intended for women so that they can be a capable work force in our district area as well as
throughout
Maaws has proved the effect once the community (lawmakers, local leaders, public
administration officials, donors, local school teachers, dedicated, volunteers, rickshaw pullers,
day laborers, people from all walks of life and such like) works in complete unison. In the
education sector we started with the cooperation of such a group pf part-timers school/collegegoing who contributed their savings and voluntary time to teach.
This is the golden legacy of earpur primary & high school they have a success story to share.
This school though new, compared to those schools established during the British period has
contributed to the educational development of not only earpur but also of the adjoining areas
those who never dreamt of the possibility of educating themselves ever. Many of them today
completed university and are working in the USA, UK, Canada, Australia, Germany, Norway,
Sweden, Malaysia, Japan, Korea, Abu Dhabi and elsewhere. In scouting, and games they got the
coveted SAARC trophies.
Today we would like to utilize this foundation to lay the starting point for countrywide villagebased computer learning movement train the underemployed educated youth of the local areas.
Secondly for the new generation provide the head start in computer literacy.
We are desperately looking for alliances that would directly be of help to village children for
who, till today, computer experience is a vision. We have requested potential computer
manufacturing organizations for equipment, computer professionals for outlining targeted areas
of demand, experts to spare their time to give instructions to trainers, donors to give monetary
assistance, and teachers to help us lift this project off the grounds.
38
Returns to the small initial investment, can be visualized and the infinite and worldwide growth
of skilled computer literates and the resultant financial returns received within the shortest period
of time.
The advantage that we have is our literacy and understanding of the English language which is a
prerequisite for communication with the outside world.
Secondly multinational companies who desire to sponsor or train could utilize this trained
manpower for their work. They can get computer trained manpower for their establishment from
Bangladesh at a fraction of the cost.
3.3.3.5 Healthcare/HIV/AIDS Awareness:
Health for Villagers:
People are living beneath the poverty line, in rural Bangladesh. Where food, clean drinking
water, is difficult to procure, the question of health needs is lower on the scale of necessities. So,
MAAWS is requesting experts worldwide to return to their villages and during their vacation
time treat the poor who cannot afford treatment otherwise. MAAWS has programs where experts
can inform them of their vacation schedule and MAAWS will set up as per their desire, in their
area of choice open camps to do what they wish to provide. The service they wish to render to
the humanity will be organized by MAAWS that is dedicated to the well being of the local
people. MAAWS will also arrange programs for these visiting experts and recently as passed out
students in Medical colleges. This exchange will enable Bangladesh doctors, nurses, medical
students, phlebotomists, Cardiologists, Pediatrics, OBGYN experts Nutritionists, Radiologists,
Oncologists, Endocrinologists, X-Ray technicians to be benefited. The ultimate effect will then
be creation of jobs and support of health needs. Poverty alleviation then, will have a direct
impact. Health for All will have real meaning though till today it has remained a slogan only,
real people and real needs have not been addressed as yet. MAAWS wants to open out this
opportunity to all for the benefit of the common man.
In the project area we have people afflicted with numerous ailments and are without treatment.
We have therefore, taken up a two-step process one is preventive the other being curative. In the
preventive side we are considering the total informative and also a dissemination process that
could reach the grass roots and turn out to be a productive trend in the long run. Therefore, the
vital information flow on preventative lines is considered of prime importance. We are trying to
reach the educated medical experts who are capable of providing informative help to the rural
poor. On the curative side we shall soon go into the establishment of physical facility based on
the experiences received from these expatriate resource persons and experts.
Two trends are striking and we are adopting that in our program: the first being, women health
because they are forming a substantive number of the total population. Second, AIDS because
39
the contamination is likely to cross borders soon. The projection of WHO on AIDS and its
numbers in our sub continental region is our case in point.
3.3.3.6 Sewing Project:

Marking, cutting, stitching, quality control & packing:
This is a composite project where we are training groups who will be capable to ultimately
handle high-end market products. Their training involves from cutting and marking to stitching
and production and ultimately packing. They are being trained to meet demands for today's
fashion industry. Presently they are a fully capable work force to produce any kind of garment
for low-end local markets throughout the country. Last year they earned TK 20,000.
3.3.3.7 Rickshaw Programs:
Pay-as-you-earn this program supports money making programs. Rickshaws which are the
principal mode of transport are given to the participating members and they pay back on easy
daily basis schedule is very easy and before they know they have paid off the loan. We do not
charge profit on the distributed rickshaws.
3.3.3.8 Vocational training:
Supporting the less fortunate Mechanical, automobile, carpentry, masonry, plumbing &
electricity.
This composite program is intended to support the construction industry. The trained participants
go out initially to acquire and consolidate their skills thereafter they go to other places for work.
Maws are trying to get employment for them in other countries of the world where such skills are
in demand. Principal idea behind this is for them to earn the hard foreign currency and support
the family back home encourage education and save the family from starvation.
The trained work force is capable of working in the international labor market in developing or
developed countries. We are in constant touch with ilo to get directions on the labor market and
provide retraining in need arises.
3.3.3.9 Handloom: Weaving cloth / mosquito nets / towels for local market.
40
3.3.3.10 Micro Credit for Poultry & Livestock:

Growing, rearing and marketing:
This has been a successful program. Small credits are provided to the participants who utilize
these credits and rear birds. They produce and sell all natural 100% organic eggs for local
consumption. Maws are trying to export this all natural product to foreign health food markets.
3.3.3.11 Food Distribution:
Friday soup kitchen to feed the hungry. This kitchen has been open for almost 70 years.
3.3.3.12 Housing: Building for the seniors & widows is still in preparation and waiting donor
funding to materialize it.
3.4 Bangladesh Shilpa Bank (BSB):

3.4.1 Introduction:
Bangladesh Shilpa Bank (BSB) is the state owned Leading Development Financial Institution
(DFI) of Bangladesh. 'Shilpa' means industry. BSB provides financial and technical assistance to
broaden the private as well as public sector industrial base of the country. It prioritizes,
especially, Export Oriented/Export Linkage industrial units, Efficient Import Substitution, Joint
Ventures, Commercialization of local technology and promotion of agro-based industry.
3.4.1.1 Establishment and Status of the Bank:

Bangladesh Shilpa Bank (BSB) was established on 31 October, 1972 under the Bangladesh
Shilpa Bank Order, 1972 (as amended 1st November, 1992) and owned by the Government.
Bangladesh Shilpa Bank has an authorized capital of Tk. 2,000 Million only and paid up capital
of Tk. 2000 Million only. Bangladesh Shilpa Bank has 15 branches all over Bangladesh.
3.4.1.2 Nature of Business: Bangladesh Shilpa Bank as the prime development financing
institution of the country extends financial assistance both in local and foreign currencies for
setting up new industries and rehabilitation of sick industries. Besides, the bank started fullfledged commercial banking function from 1993.
3.4.1.3 Sources of Fund: Paid-up Capital, loan from Government of Bangladesh, loan from
Bangladesh Bank (Central Bank), different Loan Giving (Foreign) Agencies, and Customers
Deposit.
3.4.1.4 Ownership: 100 percent ownership of the Bank belongs to the Government of
Bangladesh.
41
3.4.1.5 Mission: Accelerating the process of industrialization of the country by providing

financial assistance and Equity support.
3.4.1.6 Management: Board of Directors consists of 11 (eleven) members including the
Chairman and the Managing.
3.4.1.7 Employees Benefit: Employees benefit as per Provident Fund, Employees Benevolent
Fund and Superannuation Fund has been provided adequately.
3.4.2 Executive Profile of Bangladesh Shilpa Bank:

Board of Trustees, (BSB):
Name
Status with the Bank
Professor Sirajul Islam
President
Professor Sirajul Islam
Chief Editor
Professor Sajahan Miah
Managing Editor
Justice Kazi Ebadul Hoque
Members
Professor Amirul Islam

Chowdhury
Members
Professor Najma Siddiqi
Members
Professor Mahfuza Khanam
Members
Professor Nazrul Islam
Members
Dr. AMM Shawkat Ali
Members
Professor Ahmed Kamal
Members
Mr. Muhammad Abdul Mazid
Members
42
Employees of Bangladesh Shilpo Rin Sangstha (BSRS) urged the government not to implement
the wrong decision of just departed Caretaker Government (CG) in merging the profit earning
BSRS with the Bangladesh Shilpo Bank (BSB).
Reliable sources from BSRS said The New Nation that a vested interest mongering quarter has
desperately been engaged to activate the merging process of two organizations despite knowing
that BSRS itself stands on farm footing and keeping remarkable contributions to the national
economy through financing the country's thrust industry sector.
Being founded in 1972 through the BSRS Act, signed by the father of the Nation, Bangabandhu
Sheikh Mujibur Rahman, the organization bears the records of earning expected profit since its
beginning.
The present market value of 19 stories BSRS Bhaban on 120 Kathas of land at Karwan Bazar
stands at more than Tk. 400 crores, price of 120 Kathas of land at Mirpur Dhaka stands more
than Tk. 40 crores, prices of share, debenture and mutual fund bought at Tk. only 73 crores now
stands at Tk. 600 crores and outstanding to various organizations stands at Tk. 1500 corers which
comes a total of Tk. 2500 corers property of the BSRS.
Depositing huge amount of income tax and dividend to the government exchequer, generating
huge number of employment opportunities and having no liability of BSRS to any local and
foreign organizations.
Employees are wondered of his power that was able to create influence during the Caretaker
Government and still engaged in destroying the organization, founded by the father of the nation
even amid the present democratic regime.
43
3.4.3 Activities of Bangladesh Shilpa Bank:

3.4.3.1 Basis of Preparation of Financial Statements:
These financial statements have been prepared under the historical cost convention on a going
concern basis in accordance with Bangladesh Accounting Standards; Bank companies Act 1991
and in the format prescribed by the Bangladesh Bank vide BRPD Circular # 03 dated 18 April,
2000 and Circular # 14 dated 25 June, 2003.
3.4.3.2 Consolidation of accounts:
A separate set of records for consolidating the trial balances for the Branch offices and Loan
Accounting Department is maintained at the Central Accounts Department, Head Office from
which financial statements of the bank are drawn up.
3.4.3.3 Fixed Assets and Depreciation:
Fixed assets other than land are stated at cost less accumulated depreciation. Land is
stated at cost.
Depreciation is being charged on fixed assets other than motor vehicles & Computer on
reducing balance method. Depreciation on motor vehicles & Computer is being charged
on straight-line method.
Building/Premises..............................................2.5%
Furniture & Fixtures........................................10.0%
Electric/Gas Installation..................................20.0%
Typewriters, Ceiling Fans, Office Equipment (including
Gun ........................................................................20.0%
Computer)
&
SBBL
44
Motor Cars, other Vehicles............................20.0%
Depreciation at the applicable rates is charged proportionately on additions made during the year
from the month of their acquisition. Upon retirement of items of fixed assets the net book values
are eliminated from the accounts and the resulting gains or losses, if any, are transferred to Profit
and loss Account. Repairs and maintenance costs of fixed asset are charged to Profit and Loss
Account when incurred.
3.4.3.4 Revenue Recognition:

i.
Interest on unclassified loans and advance are calculated on a daily product basis but
charged and accounted for quarterly basis and in some cases on yearly basis.
ii.
No interest is charged on loan classified as bad and loss.
iii.
Interest is charged on classified loans and advances as per BCD Circular # 34 of

1989, BCD Circular # 20 of 1994, BCD Circular # 12 of 1995, BRPD Circular # 16
of 1998 and BRPD Circular # 9 of 2001 and such interest is not included in income
and credited to interest suspense account.
iv.
Interest suspense and penal interest, if any, calculated on classified advances is taken
as income in the year of receipt of such interest from the defaulting borrowers.
3.4.3.5 Loans and Advances:

i. Loans and advances have been stated at gross value as per requirement of The Bank
Companies Act, 1991.
ii. Provision for loans and advances are made on the basis of information furnished by the
branches and of instructions contained in Bangladesh Bank. BCD Circular # 12 dated 4
September 1995, BRPD Circular # 16 dated 6 December 1998, BRPD Circular # 9 dated 14 May
2001 and BRPD circular # 5 dated 11 June 2006 stating the following rates:
General provision on unclassified loans and advances-------- 1%
Provision on Special Mentioned Accounts---------------------- 5%
Provision on substandard loans and advances------------------ 20%
45
Provision on doubtful loans and advances----------------------- 50%

Provision on bad/loss loans and advances------------------------ 100%
iii. Loans and advances are written off to the extent that there is no realistic prospect of recovery
as per BRPD Circular # 2 dated 13 January, 2003.
3.4.3.6 Foreign Currency Translation:

3.4.3.6.1 Foreign Currency Transaction:
i. Transactions in foreign currencies are translated into BDT currency at the rate of exchange
prevailing on the date of such transactions and resulting gains or losses are credited/charged to
Profit & Loss Account.
ii. Monetary assets and liabilities in foreign currencies are expressed in taka terms at the rate of
exchange ruling on the balance sheet date except other than those in pre-liberation Pakistani
currency which have been translated at Tk.1 = Pak Rupee 1.
3.4.3.6.2 Forward foreign exchange contracts valued at forward rates applicable to their
respective maturities.
3.4.3.7 Provision for Taxation:
Provision for taxation amounting to Tk. 77,148,000 has been made against net profit during the
year as per prevailing taxation rule.
3.4.3.8 Pension Plan: With the introduction of BSB Employees Service Regulation 1984, vide
the Official Gazette published on 26 December, 1984 by the Finance Division of the Ministry of
Finance, the Pension and Death-Cum-Retirement Benefit Scheme, General Provident Fund
(GPF) Scheme, etc. have been implemented extending benefits thereof to all full time employees
of the Bank who become members of the said schemes. The fund is being managed and
administered by a separate trust formed for the purpose.
3.4.3.9 Special Assistance Fund:
In accordance with the Industrial Policy 1986, a Special Assistance Fund (SAF) has been created
by BSB as the prime DFI of the country to provide concessional loans to projects:
a. Based on local innovation and invention of products and processes;
b. Utilizing locally manufactured capital goods; and
46
c. For production of capital machinery and other non-traditional items.

3.4.3.10 Investment:
a. Investments have been shown under two broad categories: Government Securities and Other
Investments.
b. Investments in shares and securities have not been revalued at the end of the financial year.
c. The current and long-term investment in securities have been shown at cost price.
3.4.3.11 Deposits and Other Accounts:
Deposits and other accounts includes bills payable and have been analyzed in terms of the
maturity grouping showing separately other deposits and inter-bank deposits. Unclaimed deposits
for 10 years or more held by the Bank have been shown separately.
Chapter-4
Ratio Analysis, Trend Analysis, &
Comparative Analysis
47
4. Ratio Analysis, Trend Analysis, & Comparative Analysis:

4.1 Introduction: Banks today are under great pressure to perform-to meet the objectives of
their stock holders, employees, depositors, and borrowing customers, while somehow keeping
government regulators satisfied that the bank`s policies, loans, and investments are sound. As
banking organizations have grown in recent years, more and more of them have been forced to
turn to the money and capital markets to raise funds by selling stocks, bonds, and short-term
IOUs. In many cases, the growth of local deposits has simply been inadequate to fund the
growing needs of customers for loans and new services. Banks entry into the open market to
raise funds means that their financial statements are increasingly being scrutinized by investors
and by the general public. This development has placed management under great pressure to set
and meet bank performance goals.
At the same time, competition for banks traditional loan and deposit customers has increased
dramatically. Credit unions, money market mutual funds, insurance companies, brokerage firms,
and even chain stores like Sears Roebuck and J.C Penney are fighting for a slice of nearly every
credit and deposit market traditionally served by banks. Bankers have been called upon to
continually reevaluate their loan and deposit policies, review their plans for expansion and
growth, and assess their returns and risk in light of this new competitive environment.
4.2 Determining the Bank`s Long-Range Objectives:

The first step in analyzing any bank`s financial statements is to decide what objectives the bank
is or should be seeking. Bank performance must be directed toward specific objectives. A fair
evaluation of any bank`s performance should start by evaluating whether it has been able to
achieve the objectives its management and stockholders have chosen.
Certainly many banks have their own unique objectives. Some wish to grow faster and achieve
some long-range growth objective. Others seem to prefer the, minimizing risk and conveying the
image of a sound bank, but with modest rewards for their shareholders.
48
4.3 Maximizing the Value of the Firm: A Key Objective for Any Bank:
While all of the foregoing goals have something to recommend them, increasingly banks are
finding that they must pay close attention to the value of their stock. Indeed, the basic principles
of financial management, as that science is practiced today, suggest strongly that attempting to
maximize a bank`s stock value is the key objective that should have priority over all others.
Banks are corporations, with stockholders interested in what happens to the value and yield of
their stock. If the stock fails to rise in value commensurate with stockholder expectations, current
investors may seek to unload their shares and the bank will have difficulty in raising new capital
to support its future growth. Clearly, then, bank management should pursue the objective of
maximizing the value of the bank`s stock.
4.4 To Calculate the Ratio Following Formulas are used:

Table-1: Ratio Calculation Formula
Ratios Name
Formula
1.Profiability Ratios
Return on equity capital(ROE) =
Return on asses (ROA) =
Ne interest margin =
Net noninterest margin =

Net bank operating margin
Earning per share of stock(EPS) =
2.Earning Spread
Earnings spread =
3.Breaking Down Equity Returns for Closer Analysis

Net profit margin (NPM) =
Asset utilization (AU) =
49
Equity Multiplier =
4.Breakdown Analysis of a Banks Return on Assets
Net Interest Margin
Noninterest Margin =
Special transactions affecting its net income =
Return on assets (ROA, or the ability of the bank to generate income form assets)
5.Operating Efficiency Ratio

Operating efficiency ratio =
RATIO ANALYSIS
4.5 Ratio Analysis of Bangladesh Krishi Bank:
Table-2: Financial Ratio of Bangladesh Krishi Bank (For the Year-2002, 03, 04, 05, 06)
50
Name of the Ratios
Year
2002
Year
2003
Year
2004
Year
2005
Year
2006
Return on Equity Capital
0.1580
0.0999
0.0998
0.1188
0.1064
Return on Assets
0.0243
0.0162
0.0161
0.0193
0.0173
Net Interest Margin
-0.0091
-0.0030
-0.0002
-0.0036
-0.0016
Net Non-Interest Margin
-0.0136
-0.0390
-0.0135
-0.0134
-0.0133
Net Bank Operating Margin
-0.0149
-0.0162
-0.0161
-0.0176
-0.0173
Earning Per Share of Stock
1.5366
0.9520
0.7038
0.7683
0.0591
Earning Spread
-0.0462
-0.0513
-0.0458
-0.0412
-0.0363
Net Profit Margin
5.1933
3.7490
3.3313
4.3640
11.6319
Asset Utilization
0.0046
0.0043
0.0048
0.0043
0.0015
Equity Multiplier
6.5236
6.1603
6.1995
6.1398
6.1466
Operating Efficiency Ratio
4.1933
4.7492
4.3313
4.7247
4.6613
4.6 Ratio Analysis of Bangladesh Shilpa Rin Sangstha:

Table-3: Financial Ratio of Bangladesh Shilpa Rin Sangstha (For the Year-2005, 06, 07, 08)
Name of the Ratios
Year 2005
Year 2006
Year 2007
Year
2008
0.0000
0.0360
0.0422
0.0520
Return on Assets
0.0000
0.0191
0.0234
0.0294
Net Interest Margin
0.0255
0.0404
0.0410
0.0481
51
-0.0093
0.0051
0.0053
0.0062
0.0141
0.0434
0.0435
0.0512
0.0000
0.1226
0.1511
0.1959
Earning Spread
-0.0001
-0.0028
-0.0057
-0.0075
Net Profit Margin
0.0000
0.3033
0.3683
0.4086
Asset Utilization
0.0421
0.0630
0.0634
0.0720
Equity Multiplier
2.1857
1.8858
1.8074
1.7668
0.6656
0.3099
0.3132
0.2892
4.7 Ratio Analysis of Bangladesh Shilpa Bank:
52
Table-4: Financial Ratio of Bangladesh Shilpa Bank (For the Year-2004, 05, 06, 07, 08)
Name of the Ratios
Year
2004
Year
2005
Year
2006
Year
2007
Year
2008
0.1594
0.1005
0.1252
0.0261
0.0760
Return on Assets
0.0182
0.0161
0.0255
0.0063
0.0212
Net Interest Margin
0.0287
0.0422
0.0412
0.0443
0.0459
-0.0055
-0.0358
-0.0104
0.0285
-0.0034
0.0219
0.0039
0.0283
0.0284
0.0396
0.1970
0.1132
0.1621
0.0395
0.1242
Earning Spread
0.0230
0.0397
0.0357
0.0382
0.0397
Net Profit Margin
0.5774
0.3405
0.5089
0.1245
0.3235
Asset Utilization
0.0315
0.0474
0.0501
0.0510
0.0659
Equity Multiplier
8.7581
6.2186
4.9093
4.1113
3.5795
0.3051
0.9170
0.4353
0.4432
0.3973
Trend Analysis
4.8 Trend Analysis of Bangladesh Krishi Bank:
4.8.1 Return on Equity Capital:
Year
Return on Equity
Capital
2002
0.1580
2003
0.0999
53
2004
0.0998
2005
0.1188
2006
0.1064
Figure-1: Percentage of Trend Analysis (ROE) of BKB
Return on Equity Capital:

This ratio indicates that to measure the efficiency with which common shareholders equity is
being employed within the firm. We can see that from the graph of Bangladesh Krishi Bank that
ratio was 15 percent in 2002 and next two years fall down at 9 percent and it could recover the
ratio in 2005 and 2006 which means in 2002 was the height benefit is received from the
investing their capital in the bank and 2006 less benefit was gained from the 2002 in investing
the capital.
4.8.2 Return of Asset:
Year
Return on Assets
2002
0.0243
2003
0.0162
2004
0.0161
2005
0.0193
2006
0.0173
Figure-2: Percentage of Trend Analysis (ROA) of BKB
Return of Asset:
Return on Asset indicates that to measure the efficiency management are efficiently employed
asset within the firm. If we look at the graph we can see that 2002 was the height possible
utilization of asset efficiently within the firm that was 2.43 percent and next two years into 1.62
percent. Those years asset utilization efficiency was less than 2002. The asset utilization ratios
steadily recover their efficiency in 2005.
4.8.3 Net Interest Margin:

Year
Net Interest
54
Margin
2002
-0.0091
2003
-0.0030
2004
-0.0002
2005
-0.0036
2006
-0.0016
Figure-3: Percentage of Trend Analysis (NIM) of BKB
Net Interest Margin:

The Net Interest Margin indicates to measure the spread between interest revenue and interest
cost that the management is being able to control closely over the banks earning assets and
pursuit cheapest sources of funding. From the graph we can see that, the net interest margin ratio
was low in 2002 that was -.91 percent which is negative and in 2004 was -.02 percent.
Comparing 5 years 2002 was the less distance between interest revenue and interest cost and
management had less effectiveness over controlling the earning assets and 2004 indicate interest
revenue was more than cost and management was gained control over the earning assets.
4.8.4 Net Non Interest Margin:

Year
Net Non-Interest
Margin
2002
-0.0136
2003
-0.0390
2004
-0.0135
2005
-0.0134
2006
-0.0133
55
Figure-4: Percentage of Trend Analysis Net Non- Interest

Margin of BKB
Net Non Interest Margin:
Non interest margin indicates that the measure of the non interest revenues from deposit service
charges and other service fees that the bank has been able to collect the amount of non interest
cost. From the graph we can see that, banks non interest margin is negative which means noninterest cost is outstrip than the non-interest fees.
4.8.5 Net Bank Operating Margin:

Year
Net Bank Operating

Margin
2002
-0.0149
2003
-0.0162
2004
-0.0161
2005
-0.0176
2006
-0.0173
Figure-5: Percentage of Trend Analysis Net bank Operating
Margin of BKB

Net Operating Margin indicates the measurement efficiency of management that keeps growth of
revenues by controlling the arising cost. In Bangladesh Krishi Bank achieved negative ratio from
2002 to 2006. Those year banks revenue was lower than operating expenses over the controlling
the earning asset. In 2002 net operating margin was lower that means the less difference from the
operating revenue than cost that was -0.0149 and this ratio was -0.0176 that means the operating
expenses was higher than operating revenue.
4.8.6 Earning Per Share of Stock (EPS):

56
Year
Earning Per Share of

Stock
2002
1.5366
2003
0.9520
2004
0.7038
2005
0.7683
2006
0.0591
Figure-6: Percentage
of Trend Analysis (EPS) of BKB
Earning Per Share of Stock (EPS):

From the graph we can see that earning per Share of Stock
(EPS) ratio of Bangladesh Krishi Bank in 2002 the ratio was
15.37 percent, and year 2003 to 2006 the ratio was decline.
4.8.7 Earnings Spread:

Year
Earning Spread
2002
-0.0462
2003
-0.0513
2004
-0.0458
2005
-0.0412
2006
-0.0363
Figure-7: Percentage of Trend Analysis Earning Spread
of BKB
Earnings Spread:
The earnings spread indicate the effectiveness of the banks intermediation function in borrowing
and lending money and intensity of competition in the banks market. In the graph we can see
that Bangladesh Krishi Banks Earnings spread is more fluctuating over those years. In the 2006
were less earning spreads rather than other years that means more effective in the banks function
and increases the competition.
57
4.8.8 Net Profit Margin:

Year
Net Profit
Margin
2002
5.1933
2003
3.7490
2004
3.3313
2005
4.3640
2006
11.6319
Figure-8: Percentage of Trend Analysis (NPM) of BKB
Net Profit Margin:

The Net Profit Margin that indicates that degree of management control and direction that
increase their earnings and their return to their stockholder by successfully expenses and
maximizing revenues. The net profit margin of Bangladesh Krishi Bank in 2004 was low and in
2006 was the height that means 2004 the bank decreased their earnings return to stockholders
and in 2006 the bank increased their earnings to the shareholder by maximizing revenues and
controlling expenses.
4.8.9 Asset Utilization:

Year
Asset
Utilization
2002
0.0046
2003
0.0043
2004
0.0048
2005
0.0043
2006
0.0015
of Trend Analysis (AU) of BKB
Asset Utilization:
Asset Utilization as a measure of asset management
efficiency of the bank. From the graph we can see that from
58
2002 to 2005 the ratio was similar but in 2006 fall down dramatically which means that 2006
asset management utilization was not efficient rather than other previous year.
4.8.10 Equity Multiplier:

Year
Equity Multiplier
2002
6.5236
2003
6.1603
2004
6.1995
2005
6.1398
2006
6.1466
Figure-10: Percentage of Trend Analysis (EM) of BKB

Equity Multiplier:
Equity multiplier indicates that the employment of financial leverage to raise net earnings for the
stockholders. For the Bangladesh Krishi Bank the equity multiplier was higher in 2002 and
lowest equity multiplier was 2005 that means in 2002, the bank employed more financial
leverage for raising net earnings for the stockholders rather than 2005.
4.8.11 Operating Efficiency:
Year
Operating
Efficiency Ratio
of Trend Analysis (OER) of BKB
2002
4.1933
2003
4.7492
2004
4.3313
2005
4.7247
Operating efficiency indicates that reducing operating expenses

and increasing the productivity of their employees through the
use of automated equipment and improved employee training.
2006
4.6613
59
Operating Efficiency:
From the graph we can see that 2003, 2005 and 2006 bank reduced operating expenses and
increased their productivity by improved their training.
4.9 Trend Analysis of Bangladesh Shilpa Rin Sangstha:

Year
Return on Equity
Capital
2005
0.0000
2006
0.0360
2007
0.0422
2008
0.0520
Figure-1: Percentage of Trend Analysis (ROE) of BSRS

being employed within the firm. We can see that from the graph of Bangladesh Shilpa Rin
Sangstha that ratio was 0 percent in 2005 and next two years increase at 4 percent and it could
recover the ratio 5 percent in 2008 which means in 2008 was the height benefit is received from
the investing their capital in the bank and 2005 less benefit was gained from the 2005 in
investing the capital.
Year
Return on
Assets
2005
0.0000
2006
0.0191
2007
0.0234
2008
0.0294
Figure-2: Percentage of Trend Analysis (ROA) of BSRS
Return of Asset:
Return on Asset indicates that to measure the efficiency management are efficiently employed
asset within the firm. If we look at the graph we can see that 2005 was the lower possible
60
utilization of asset efficiently within the firm that was 0 percent and next years into 1.9 percent.
2.4 percent in 2007 and 2008 it was 2.95 percent so those years asset utilization efficiency was
more than 2005. The asset utilization ratios steadily recover their efficiency in 2008.
Year
Net Interest
Margin
2005
0.0255
2006
0.0404
2007
0.0410
2008
0.0481
Figure-3: Percentage of Trend Analysis (NIM) of BSRS

was low in 2005 that was 2.55 percent and in 2008 was 4.8 percent. Comparing 4 years 2005 was
the less distance between interest revenue and interest cost and management had less
effectiveness over controlling the earning assets and 2008 indicate interest revenue was more
than cost and management was gained control over the earning assets.
4.9.4 Net Non Interest Margin

Year
Net Non-Interest
Margin
2005
-0.0093
2006
0.0051
2007
0.0053
2008
0.0062
Figure-4: Percentage of Trend Analysis Net Non- interest
margin of BSRS
61

cost. From the graph we can see that, banks non interest margin is negative which means noninterest cost is outstrip than the non-interest fees. After 2005 bank did recovered to maintain the
positive margin which means bank was able to earn non interest fees more than non-interest cost.

Year
Net Bank
Operating Margin
2005
0.0141
2006
0.0434
2007
0.0435
2008
0.0512
Figure-5: Percentage of Trend Analysis Net bank Operating
Margin of BSRS
Net Bank Operating Margin:

Net Operating Margin indicates the measurement efficiency of management that keeps growth of
revenues by controlling the arising cost. In Bangladesh Shilpa Rin Sangstha achieved positive
ratio from 2005 to 2008. Those year banks revenue was higher than operating expenses over the
controlling the earning asset. In 2005 net operating margin was lower that means the less
difference from the operating revenue than cost that was 0.0142 and this ratio was 0.0512 that
means the operating expenses was lower than operating revenue.
62
4.9.6 Earning Per Share of Stock:

Year
Earning Per Share

of Stock
2005
0.0000
2006
0.1226
2007
0.1511
2008
0.1959
Figure-6: Percentage of Trend Analysis (EPS) of BSRS
Earning Per Share of Stock:

From the graph we can see that earning per Share of Stock (EPS) ratio of Bangladesh Shilpa Rin
Sangstha was increasing from the year 2005 to 2008.

Year
Earning Spread
2005
-0.0001
2006
-0.0028
2007
-0.0057
2008
-0.0075

of BSRS
Earnings Spread:
that Bangladesh Shilpa Rin Sangstha Earnings spread is more fluctuating over those years. In the
2005 was more earning spreads rather than other years that means that bank was more effective
in money borrowing and lending during this year but after that year decreased effectiveness of
borrowing and lending.
63

Year
Net Profit
Margin
2005
0.0000
2006
0.3033
2007
0.3683
2008
0.4086
Figure-8: Percentage of Trend Analysis (NPM) of BSRS
Net Profit Margin:

maximizing revenues. The net profit margin of Bangladesh Shilpa Rin Sangstha in 2005 was low
and in 2008 was the height that means 2005 the bank decreased their earnings return to
stockholders and in 2008 the bank increased their earnings to the shareholder by maximizing
revenues and controlling expenses.

Year
Asset Utilization
2005
0.0421
2006
0.0630
2007
0.0634
2008
0.0720
Figure-9: Percentage of Trend Analysis (AU) of BSRS
Asset Utilization:
Asset Utilization as a measure of asset management efficiency of the bank. From the graph we
can see that in 2005 the ratio was 4.21 percent. In 2006 and 2007 the ratio was similar but in
2008 the ratio was increase 7.20 percent which means that 2008 asset management utilization
was efficient rather than other previous year.
64
Year
Equity Multiplier
2005
2.1857
2006
1.8858
2007
1.8074
2008
1.7668
Figure-10: Percentage of Trend Analysis (EM) of BSRS
Equity Multiplier:
Equity multiplier indicates that the employment of financial leverage to raise net earnings for the
stockholders. For the Bangladesh Shilpa Rin Sangstha the equity multiplier was higher in 2005
and lowest equity multiplier was 2008 that means in 2005, the bank employed more financial
leverage for raising net earnings for the stockholders rather than 2008.
4.9.11 Operating Efficiency Ratio:

Year
Operating
Efficiency Ratio
2005
0.6656
2006
0.3099
2007
0.3132
2008
0.2892
Figure-11: Percentage of Trend Analysis (OER) of BSRS
Operating efficiency indicates that reducing operating expenses and increasing the productivity
of their employees through the use of automated equipment and improved employee training.
From the graph we can see that 2005 and 2007 bank reduced operating expenses and increased
their productivity by improved their training.
4.10 Trend Analysis of Bangladesh Shilpa Bank:

65

year
Return on Equity
Capital
2004
0.1594
2005
0.1005
2006
0.1252
2007
0.0261
2008
0.0760
Figure-1: Percentage of Trend Analysis (ROE) of BSB

being employed within the firm. We can see that from the graph of Bangladesh Shilpa Bank that
ratio was 15.94 percent in 2004 but next four year the ratio was decrease. In 2007 it fall down at
2.6 percent and it could recover the ratio in 2008 and which means in 2004 was the height
benefit is received from the investing their capital in the bank and 2008 less benefit was gained
from the 2004 in investing the capital.

Year
Return on
Assets
2004
0.0182
2005
0.0161
Figure-2: Percentage of
Trend Analysis (ROA) of BSB
Return of Asset:
Return on Asset indicates that to measure the efficiency

management are efficiently employed asset within the firm. If
we look at the graph we can see that 2006 was the height
2007
0.0063
possible utilization of asset efficiently within the firm that was
2008
0.0212
2.55 percent and previous two years 2004 and 2005 the ratio
was 1.8 and 1.6 percent. After 2006 asset utilization efficiency
was less, but the asset utilization ratios steadily recover their efficiency in 2008.
2006
0.0255
66

Year
Net Interest
Margin
2004
0.0287
2005
0.0422
2006
0.0412
2007
0.0443
2008
0.0459
Figure-3: Percentage of Trend Analysis (NIM) of BSB

was low in 2004 that was 2.87 percent and in 2008 was 4.6 percent. Comparing 5 years 2004 was
the less distance between interest revenue and interest cost and management had less
effectiveness over controlling the earning assets and 2008 indicate interest revenue was more
than cost and management was gained control over the earning assets.
4.10.4 Net Non Interest Margin:

Year
Net Non-Interest
Margin
2004
-0.0055
2005
-0.0358
2006
-0.0104
67
2007
0.0285
2008
-0.0034
Figure-4: Percentage of Trend Analysis Net Non- interest
margin of BSB

cost. From the graph we can see that, banks non interest margin is negative which means noninterest cost is outstrip than the non-interest fees. After 2006 bank did recovered to maintain the
positive margin which means bank was able to earn non interest fees more than non-interest cost,
but after one year the bank`s non-interest margin is negative.

Year
Net Bank Operating

Margin
2004
0.0219
2005
0.0039
Figure-5: Percentage of
Trend Analysis Net bank Operating Margin of BSB
Net Bank Operating Margin:
Net Operating Margin indicates the measurement efficiency

of management that keeps growth of revenues by
controlling the arising cost. In Bangladesh Shilpa Bank
2007
0.0284
achieved positive ratio from 2004 to 2008. Those year
2008
0.0396
banks revenue was higher than operating expenses over the
controlling the earning asset. In 2005 net operating margin
was lower that means the less difference from the operating revenue than cost that was 0.0039
and this ratio was 0.0396 that means the operating expenses was lower than operating revenue.
2006
0.0283
4.10.6 Earning Per Share of Stock (EPS):

Year
Earning Per Share of

Stock
2004
0.1970
2005
0.1132
2006
0.1621
2007
0.0395
2008
0.1242
Figure-6:
Percentage of Trend Analysis (EPS) of BSB
Earning Per Share of Stock (EPS):

68
From the graph we can see that earning per Share of Stock (EPS) ratio of Bangladesh Shilpa
Bank in 2004 the ratio was 19.70 percent, and year 2005 it was 11.32 percent. In 2006 the ratio
was 16.21 percent, in 2007 the ratio was decrease 3.95 percent and 2008 the ratio was 12.42
percent.

Year
Earning Spread
2004
0.0230
2005
0.0397
2006
0.0357
2007
0.0382
2008
0.0397
of BSB
Earnings Spread:
that Bangladesh Shilpa Banks Earnings spread is almost similar in 2004 to 2008. In the 2004
was less earning spreads that was .023 and 2005 and 2008 was more earnings spead.

Year
Net Profit Margin
2004
0.5774
2005
0.3405
2006
0.5089
2007
0.1245
2008
0.3235
of Trend Analysis (NPM) of BSB
Net Profit Margin:
69
maximizing revenues. The net profit margin of Bangladesh Shilpa Bank in 2007 was low and in
2004 was the height that means 2007 the bank decreased their earnings return to stockholders
and in 2004 the bank increased their earnings to the shareholder by maximizing revenues and
controlling expenses.
Year
Asset Utilization
2004
0.0315
2005
0.0474
2006
0.0501
2007
0.0510
2008
0.0659
Figure-9: Percentage of Trend Analysis (AU) of BSB
Asset Utilization:
Asset Utilization as a measure of asset management efficiency of the bank. From the graph we
can see that in 2004 the ratio 3.15 percent. In 2006 and 2007 the ratio was similar but in 2008 the
ratio was increase 6.6 percent which means that 2008 asset management utilization was efficient
rather than other previous year.
Year
Equity Multiplier
2004
8.7581
2005
6.2186
2006
4.9093
2007
4.1113
of Trend Analysis (EM) of BSB
Equity Multiplier:
Equity multiplier indicates that the employment of financial

leverage to raise net earnings for the stockholders. For the
2008
3.5795
Bangladesh Shilpa Bank the equity multiplier was higher in
2008 and lowest equity multiplier was 2008 that means in 2004, the bank employed more
financial leverage for raising net earnings for the stockholders rather than 2008.
70
4.10.11 Operating Efficiency:

Year
Operating Efficiency
Ratio
2004
0.3051
2005
0.9170
2006
0.4353
2007
0.4432
2008
0.3973
Figure-11: Percentage of Trend Analysis (OER) of BSB
Operating efficiency indicates that reducing operating expenses and increasing the productivity
of their employees through the use of automated equipment and improved employee training.
From the graph we can see that 2005, 2006 and 2007 bank reduced operating expenses and
increased their productivity by improved their training.
Comparative Analysis
Table-5: Comparative Analysis of Commercial Bank
71
4.11 Comparative Analysis of three Specialized Commercial Bank (Bangladesh Krishi Bank,
Bangladesh Shilpa Rin Sangstha, & Bangladesh Shilpa Bank) in year 2005 & 2006.
Year 2005
Year 2006
Bank Name
Bank Name
Ratio
Name
Bangladesh
Krishi
Bank
Bangladesh
Shilpa Rin
Sangstha
Bangladesh
Shilpa
Bank
Bangladesh
Krishi
Bank
Bangladesh
Shilpa Rin
Sangstha
Bangladesh
Shilpa
Bank
Return on
equity
Capital
(ROE)
0.1188
0.1005
0.1064
0.0360
0.1252
Return on
Assets
(ROA)
0.0193
0.0161
0.0173
0.0191
0.0255
Net Interest
Margin
-0.0036
0.0255
0.0422
-0.0016
0.0404
0.0412
Net
Noninterest
Margin
-0.0134
-0.0093
-0.0358
-0.0133
0.0051
-0.0104
Net bank
Operating
Margin
-0.0176
0.0141
0.0039
-0.0173
0.0435
0.0283
Earning per
Share of
Stock
(EPS)
0.7683
0.1132
0.0590
0.1226
0.1621
Earning
Spread
-0.0412
-0.0001
0.0397
-0.0363
-0.0028
0.0357
Net Profit
Margin
(NPM)
4.3640
0.3405
11.6318
0.3033
0.5089
Asset
0.0043
0.0421
0.0474
0.0015
0.0630
0.0501
72
Utilization
(AU)
Equity
Multiplier
(EM)
6.1398
2.1857
6.2186
6.1466
1.8858
4.9093
Operating
Efficiency
Ratio
4.7247
0.6656
0.9171
4.6613
0.3099
0.4353
4.11.1 Compare Return on Equity Capital (ROE) Ratio:
Figure-1: Percentage of Comparative Analysis (ROE) of BKB, BSRS, BSB

Analysis: The above graph showing the comparison of Return on Equity Capital (ROE) ratios of
Bangladesh Krishi Bank (BKB), Bangladesh Shilpa Rin Sangstha (BSRS), and Bangladesh
Shilpa Bank (BSB). Here we got that BKB Return on Equity Capital ratio was decline from the
year 2005 to 2006. On the other hand BSRS & BSBs Return on Equity Capital ratio increased in
those years.
4.11.2 Compare Return on Assets (ROA) Ratio:
73
Figure-2: Percentage of Comparative Analysis (ROA) of BKB, BSRS, BSB

Analysis: The above graph showing the comparison of Return on assets (ROA) ratios of
Bangladesh Krishi Bank (BKB), Bangladesh Shilpa Rin Sangstha (BSRS) and Bangladesh
Shilpa Bank (BSB).Here we got that BKB Return on assets ratio was decline from the year 2005
to 2006. On the other hand BSRS & BSBs Return on assets ratio was increased in those years.
4.11.3 Compare Net Interest Margin Ratio:
Figure-3: Percentage of Comparative Analysis (NIM) of BKB, BSRS, BSB

Analysis: The above graph showing the comparison of Net Interest Margin ratios of Bangladesh
Krishi Bank (BKB), Bangladesh Shilpa Rin Sangstha (BSRS) and Bangladesh Shilpa Bank
(BSB).Here we can see that BKB Interest Margin ratio was -0.0036 in 2005 and 2006 the ratio
Was -0.0016 which was negative and the ratio was increase from the year 2005 to 2006. On the
other hand BSRS Net Interest Margin ratio was increase in those years and its ratio was positive.
The Net Interest Margin ratio of BSB was similar in those years.
4.11.4 Compare Net Non-interest Margin Ratio:
74
Figure-4: Percentage of Comparative Analysis Net Non-interest Margin of BKB, BSRS, BSB
Analysis: The above graph showing the comparison of Net Non-interest Margin ratios of
Shilpa Bank (BSB).Here we can see that BKB Net Non-Interest Margin ratio was negative which
was similar from the year 2005 to 2006. On the other hand BSRS & BSB Net Non- interest
Margin ratio was increase in those years.
4.11.5 Compare Net Bank Operating Margin Ratio:
Figure-5: Percentage of Comparative Analysis Net Bank Operating Margin of BKB, BSRS, BSB
Analysis: The above graph showing the comparison of Net Bank Operating Margin ratios of
Shilpa Bank (BSB).Here we got that BKB Net Bank Operating Margin was negative and the
ratio was similar from the year 2005 to 2006. On the other hand BSRS & BSBs Net Bank
Operating ratio was increased in those years.
4.11.6 Compare Earning Per Share of Stock (EPS) Ratio:
75
Figure-6: Percentage of Comparative Analysis (EPS) of BKB, BSRS, BSB
Analysis: The above graph showing the comparison of Earning per Share of Stock (EPS) ratios
of Bangladesh Krishi Bank (BKB), Bangladesh Shilpa Rin Sangstha (BSRS) and Bangladesh
Shilpa Bank (BSB).Here we can see that BKB Earning per Share of Stock (EPS) ratio was
decline from the year 2005 to 2006. On the other hand BSRS Earning per Share of stock (EPS)
ratio was increase from the year 2005 to 2006. The Earning per share of stock (EPS) ratio of
BSB was increase in those years.
4.11.7 Compare Earning Spread Ratio:
Figure-7: Percentage of Comparative Analysis Earning Spread of BKB, BSRS, BSB

Analysis: The above graph showing the comparison of Earning Spread ratios of Bangladesh
Krishi Bank (BKB), Bangladesh Shilpa Rin Sangstha (BSRS) and Bangladesh Shilpa Bank
(BSB).Here we can see that BKB Earning Spread ratio was negative, and the ratio was increase
from the year 2005 to 2006. On the other hand BSRS Earning Spread ratio was decline in those
years. The Earning Spread ratio of BSB was increase in those years.
76
4.11.8 Compare Net Profit Margin (NPM) Ratio:
Figure-8: Percentage of Comparative Analysis (NPM) of BKB, BSRS, BSB

Analysis: The above graph showing the comparison of Net profit Margin (NPM) ratios of
Shilpa Bank (BSB).Here we got that BKB, BSRS & BSB Net profit Margin ratio was increase
from the year 2005 to 2006.
4.11.9 Compare Asset Utilization Ratio:
Figure-9: Percentage of Comparative Analysis Asset Utilization of BKB, BSRS, BSB

Analysis: The above graph showing the comparison of Asset Utilization (AU) ratios of
Shilpa Bank (BSB).Here we can see that BKB Asset utilization ratio was decline from the year
2005 to 2006. On the other hand BSRS & BSBs Asset utilization ratio was increased in those
years.
77
4.11.10 Compare Equity Multiplier (EM) Ratio:
Figure-10: Percentage of Comparative Analysis Equity Multiplier of BKB, BSRS, BSB
Analysis: The above graph showing the comparison of Equity Multiplier (EM) ratios of
Shilpa Bank (BSB).Here we can see that BKB Equity Multiplier (EM) ratio was similar from the
year 2005 to 2006. On the other hand BSRS & BSBs Equity Multiplier ratio was decline in
those years.
4.11.11 Compare Operating Efficiency Ratio:
78
Figure-11: Percentage of Comparative Analysis Operating Efficiency Ratio of BKB, BSRS, BSB
Analysis: The above graph showing the comparison of Operating Efficiency ratios of
Shilpa Bank (BSB).Here we can see that BKB Operating Efficiency ratio was similar from the
year 2005 to 2006. On the other hand BSRS & BSBs operating Efficiency ratio was decline in
those years.
79
Chapter-5
Findings of Study
5.1 Findings of Study:

80
I have find out some points by screening the whole study, which is expressed as major findings. I
have analyzed the data sincerely and carefully and have tried to identify appropriate findings.
Moreover, conversations with the Specialized Commercial Bank of Bangladesh officials were
very significant for these findings.
After overall appraisal of Specialized Commercial Bank of Bangladesh, the major findings are as
follows:
Banks provide credit to landless and poor farmer to develop themselves which actually
does not ensure the availability to the farmer.
Specialized Commercial Banks generate more loan able fund from the idle rural and
urban savings and invest them for the betterment of our economy.
Banks are providing credit to the landless farmer which increases the risk of default
because these poor people dont have agricultural knowledge and repay the loan with
interest.
Interest rate of micro-credit is higher to the poor farmer with the proper knowledge of
agriculture especially in the developing areas.
The repayment of loan is started from taking loan that is very difficult to the poor farmer
without gaining any king profit from the cultivation of land.
Financing in the industrial sector which is not highly encouraged to develop or

established in new industry especially in the developing areas.
There is lack of supervision or monitoring by the bank whether they are utilizing their
fund in the industry development or not.
Specialized Commercial Banks are suffering fund availability to ensure the financing to
the agricultural sector and industrial sector for the development.
Specialized Commercial Bank also provides some social working activity in the country.
81
Chapter-6
Conclusion & Recommendations
6.1 Conclusion:
82
There are a four category specialized bank operating their activities in Bangladesh in developing
the economic condition such as agriculture, industry and rural area development. For the future
planning and the successful operation in achieving in its goal in this current competitive
financial environment in this report can be shown.
Banks always contributes towards the economic development of a country. Specialized
commercialized bank compared that contributing more by investing most of their funds in
fruitful projects leading to increase in production. It is obvious that right thinking of those banks
including establishing a successful network over the country and increasing resources, will be
able to play a considerable role in the portfolio of development financing in the developing
country like ours.
The thesis report on Operation efficiency and financial performance of Specialized
Commercial Bank of Bangladesh is prepared with the objective of to find about the financial
performance and Operation efficiency. The report is prepared by analyzing the financial data
from the annual report of the specialized bank for the five year.
In the ratio analysis part I found that Bangladesh Krishi Bank (BKB) successfully employed their
asset in 2005 and 2006 and in case of BKB was average rate of capital return was higher rather
than Bangladesh Shilpa Rin Sangstha (BSRS) and Bangladesh Shilpa Bank (BSB). If it is said
profit earning ability, I will say Bangladesh Shilpa Bank had earned higher profit than other bank
during those years.
In the conclusion I would say, by increasing cooperation among specialized bank with other
bank, they can increase their profitability and also play an important role for developing socioeconomic condition and eradicate poverty from the country.
6.2 Recommendations:
83
In order to get deliver quality service, top management should try to modify the services. For the
improvement of the service the following measures should be taken:
Specialized Commercial Bank should ensure the availability of credit to the actual farmer
without any kind of hassle of the documentation.
Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank should arrange a training
program for the poor farmer or landless farmer how to cultivate crops in proper way
which they may be profitable.
Specialized Commercial Bank should reduce the interest rate especially in the poor
farmer so that it can ensure the profitability of the farmer.
Specialized Commercial Bank should establish a successful network over the country,
and play an important role for developing socio-economic condition in the country.
Bangladesh Shilpa Bank and Bangladesh Shilpa Rin Sangstha should set up new
industries and rehabilitation of sick industries.
Specialized Commercial should develop their monitoring activity.
84

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Operational Efficiency & Financial Performance

Operational Efficiency & Financial

Operational Efficiency & Financial Performance

1. Introduction to the Study:

Operational Efficiency & Financial Performance

Operational Efficiency & Financial Performance

1.2.1 Broad Objective:

1.3 Methodology of the Study:

Operational Efficiency & Financial Performance

1.4. Limitations of the Report:

Operational Efficiency & Financial Performance

Operational Efficiency & Financial Performance

2. Banking Sector in Bangladesh:

A bank is a financial institution licensed by a government. Its primary activities include

Operational Efficiency & Financial Performance

2.2 Number and Types of Banks:

Operational Efficiency & Financial Performance

2.2.1 Nationalized Commercial Banks (NCBs):

2.2.2 Private Commercial Banks (PCBs):

Operational Efficiency & Financial Performance

15. Al-Arafah Islami Bank Limited

2.2.3 Foreign Commercial Banks:

Operational Efficiency & Financial Performance

2.2.4 Specialized Development Banks:

2.2.5 Other Bank:

2.3 Services of the Bank:

Operational Efficiency & Financial Performance

2.3.2 Savings Bank Account:

Operational Efficiency & Financial Performance

2.3.7 Tele Banking:

2.4 Bangladesh: Money and Banking sector review:

Operational Efficiency & Financial Performance

2.4.2 Narrow Money:

Operational Efficiency & Financial Performance

2.4.5 Current Bank deposit and credit:

Operational Efficiency & Financial Performance

Operational Efficiency & Financial Performance

3. Specialized Commercial Banks & Their Operations in Bangladesh:

Operational Efficiency & Financial Performance

Planning & Operation Division

Accounts Division and

Loan Recovery Division

Operational Efficiency & Financial Performance

3.1.2 Executive Profile of Bangladesh Krishi Bank:

Mr. Khondkar Ibrahim Khaled

Md. Mukter Hussain

Mr. Mosharraf Hossain

Mr. Md. Humayun Khalid

Mr. Alauddin A. Majid

Mr. Mahbubur Rahman Bhuyan

Mohammad Muslim Chowdhury

Mr. Shahabuddin Ahmed

Md. Shah Alam Siddiqui

Md. Habibur Rahman

Md. Malek Newaz

3.1.2.2 Executive Profile of (BKB)

Operational Efficiency & Financial Performance

Md. Mukter Hussain

Md. Joynal Abedin

Deputy Managing Director

Mr. Manjur Ahmed

Deputy Managing Director

Md. Majibur Rahman

General Manager Administration Division