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Brack Bank by Tayeb0008

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									BRACK BANK
Case Study




Prepared By:
Tayeb Ahmed Khan
                                                                A Case Study in BRAC Bank Limited


                                         Introduction

A bank is a financial intermediary that accepts deposits and channels those deposits into lending
activities, either directly or through capital markets. A bank connects customers with capital
deficits to customers with capital surpluses. Banking is generally a highly regulated industry, and
government restrictions on financial activities by banks have varied over time and location.

The Banking Industry was once a simple and reliable business that took deposits from investors
at a lower interest rate and loaned it out to borrowers at a higher rate. The Banking Industry at its
core provides access to credit.

After Independence of Bangladesh the banking sector was restructured as a fall out of war of
liberation. Banking grew primarily in the public sector with main emphasis development needs
of the war-torn economy.

A full-service commercial bank since its setting up in July 2001, BRAC Bank
(www.bracbank.com) focuses on study unexpected market position in the Small and Medium
Enterprise (SME) sector, which remains largely untouched in Bangladesh. BRAC Bank believes
that this sector can contribute the most to a rapid generation of employment in the country. Till
December 2006, the bank had disbursed over Tk. 25 billion (USD 370 million) in loans to nearly
75,000 small and medium enterprises. With local and international shareholding by BRAC,
BRAC Bank is listed in both the Dhaka and Chittagong Stock Exchanges. BRAC Bank operates
under a ‘double bottom-line’ agenda where profit and social responsibility go hand in hand as it
strives towards a poverty-free, enlightened Bangladesh.

BRAC Bank has been awarded as the Sustainable Bank of the Year 2010 at the FT Sustainable
Banking Awards 2010. BRAC Bank received the prestigious Business Award styled DHL-Daily
Star Bangladesh Business Awards 2008 as ‘Best Financial Institution of the Year’ for its
innovation in products, services, financial performance/ productivity, company management and
contribution to Bangladesh’s development. BRAC Bank Limited has recently received the
prestigious award for being the highest VAT paying organization in national level in service
industry. BRAC Bank Limited has awarded ICAB National Award from Institute of Chartered
Accountants of Bangladesh (ICAB) for one of the Best Published Accounts & Reports 2007.




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                                                            A Case Study in BRAC Bank Limited


The core banking services of BRAC Bank are, SME banking, Retail banking, Wholesale
banking, Probashi banking, E - banking.

BRAC Bank, being the youngest bank, took a step to break away from usual tradition and tapped
into the true suburb entrepreneurial initiatives.
Today, with over 10,000 cores of loans disbursed till date, BRAC Bank is country’s largest SME
financier. With over 100 outlets, 300 ATMs and over 500,000 plastics in the market, BRAC
Bank offers a wide range of financial solutions. BRAC Bank offers a full array of Financial
Services to Corporations and Institutions. Having access to the deepest end of the country,
BRAC Bank is there to assist businesses in Bangladesh. There are 3,500 pay out locations of
BRAC Bank in Bangladesh from which a customer can receive money sended form abroad.
Every month, Probashi Banking executes around 150,000 transactions; which has made BRAC
Bank one of the largest players among private commercial banks in channelizing inward
remittance in the country.

Being a Bangladeshi bank and serving the banking needs of Bangladeshi people, Human
Resources Division of BRAC Bank Limited maintain an adaptive human resources management
strategy.




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                                                                  A Case Study in BRAC Bank Limited


                                            Objective

General objective

The general objective of this report is to provide with an over view of the BRAC Bank’s banking
policies so that the theoretical learning can be related with the real life business situation.

Specific Objective

This report aims to achieve the following specific objectives:

     Broadly describe BRAC Bank’s as an organization providing banking service in
        Bangladesh, its products and services.
     Identify BRAC Bank’s current scenario, reason behind its success & failure.
     Illustrate the Banking sector of Bangladesh with facts.
     To portray and analyze the trend, change and competition in the banking industry.
     To know the popular service of BRAC Bank.
     To know the upcoming service of BRAC Bank.
     To know the present condition of SME banking condition.




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                                                                A Case Study in BRAC Bank Limited


                                            Methodology


Type of business research used in this report is of descriptive nature. Through this descriptive
research this report seeks to determine the answers to who, what, where and how questions of the
banking industry of Bangladesh. Primary data analysis was selected as the basic research
method.

   Data collection

Data for this report has been extracted from secondary and primary sources, as the descriptive
nature of the study to prepare this report calls in for existing facts and information compilation.

   Source of secondary data
Majority of the secondary data was obtained from the web site of BRAC Bank & BRAC NGO.
Annual reports of the operators, their official web sites, reports done on the banking sectors and
information obtained from the Internet. All those augmented this report to take a comprehensive
shape.




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                                                              A Case Study in BRAC Bank Limited


                                    Result & Discussion


Building profitable and socially responsible financial institution focused on Market and Business
with Growth potential, thereby assisting BRAC and stakeholders to build a just, enlightened,
healthy democratic and poverty free Bangladesh- this is the corporate vision of BRAC Bank. To
fulfill this vision they are trying hard from the opening their activities. Every day they are
introducing new service in front to their consumer.
   Some of their most popular services are in bellow :
   1. SME Banking
   2. E- banking service
   3. Probashi Biniyog
   4. Retail banking service
   5. Wholesale service
   6. Online banking service
   7. Mobile banking service
   Others service of BRAC Bank are bellow:
    1. ATM Card Service
    2. Customer Service
    3. Recent Activities Services
    4. Stock Market Service For NRBS
    5. Upcoming service


SME Banking
In BRAC Bank SME Banking is the most profitable and popular service. BRAC Bank, being the
youngest bank, took a step to break away from usual tradition and tapped into the true suburb
entrepreneurial initiatives. Today, with over 10,000 cores of loans disbursed till date, BRAC
Bank is country’s largest SME financier that has made more than 265,000 dreams come true! In
SME Banking, there are two parts-(1) Loan Products (2) Deposit Product.




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                                                           A Case Study in BRAC Bank Limited


Loan products are ten types- Anonn Rin, Apurbo Rin, Aroggo Rin, Double Loan, Prothoma Rin,
Trade Plus, Proshar Rin, Bizness Loan, and Supplier & Distributor & Business Equity Loan.

Probashi Biniyog

BRAC Bank Limited offers 'Probashi Biniyog' – a product that exclusively provides Non-
Resident Bangladeshis (NRBs) the opportunity to invest in the Bangladeshi Capital Market
through a Beneficiary Owner's (BO) account, which will be funded by a Non Resident Investor's
Taka Account (NITA). Both BO account and NITA will be hold with BRAC Bank Limited.
NRBs can invest into the Bangladeshi Capital Market from anywhere in the world. BRAC Bank
will provide custodian Service. Dividend and investment profits 100% repatriation of capital
NRBs can apply for IPOs as well as buy and sell shares in the Secondary Market through BRAC
Bank Limited. They can use e-mail, fax or phone to issue trade orders to BRAC Bank Limited.
There are nine types in probashi baniyog services.
    a. Probashi current account:
    b. Probashi saving account:
    c. Probashi shubidha account:
    d. Probashi fixed deposit:
    e. Shubidha fixed deposit
    f. Probashi abiram
    g. Probashi shubidha abira
    h. Probashi DPS
    i. Probashi shubidha DPS


E-Banking Service
With over 100 outlets, 300 ATMs and over 500,000 plastics in the market, BRAC Bank offers a
wide range of financial solutions to meet everyday needs. Under the e-banking there are some
services-
   a) Internet Banking
   b) Phone Banking
   c) SMS Banking
   d) Important Security Manage



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                                                              A Case Study in BRAC Bank Limited




Retail Banking Services
In BRAC Bank, their Retail Banking service is a profitable service for them. There are five part
of retail banking services-
Deposit Products
With over 128 outlets, 177 ATMs and over 500,000 plastics in the market, BRAC Bank offers
you a wide range of financial solutions to meet your everyday need.


Loan Products
With over 100 outlets, 300 ATMs and over 500,000 plastics in the market, BRAC Bank offers
you a wide range of financial solutions to meet your everyday need. Be it home loan, car loan, or
simply a quick loan – simply drop an application and we shall do the rest while you enjoy life.


Cards
With over 100 outlets, 300 ATMs and over 500,000 plastics in the market, BRAC Bank offers
you a wide range of financial solutions to meet your everyday need. There are two card services
in BRAC Bank.
  1. Credit card
        VISA Classic
        Visa Credit Card is valid only in Bangladesh. It can only used in local currency (BDT)
        within the country. This type of credit card has a limit ranging from BDT 10,000 to BDT
        74,999.
        VISA Gold
        This is a local Visa credit card, which is valid only in Bangladesh and transaction
        currency, is in BDT. The basic difference between Classic & Gold cards is that the Gold
        card has higher credit limit than that of classic card. Credit limit of Visa Gold Card
        ranges from BDT 75,000 to BDT 500,000.
        Universal Cards
        This is a Visa dual currency credit card with worldwide acceptability. Its USD credit
        limit will be within approved BDT limit assigned for the cardholder. A secured dual
        card's limit will be maximum USD 30,000 against lien on RFCD or ERQ account.



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                                                             A Case Study in BRAC Bank Limited


Dual Cards can be issued against different entitlements:
  Travel Quota

  RFCD /FC

  ERQ
  2. Debit Card
        VISA Debit Card
  VISA cards are accepted at all BBL, VISA & Q-Cash ATMs & POS

  Daily Withdraw limit is 50,000/- from ATM

  Daily Withdraw limit is BDT 3,00,000/- from BBL Branch POS

  Daily Purchase limit is BDT 1,00,000/- from BBL / Q-cash / VISA merchant POS



Wholesale banking

BRAC Bank offers a full array of Financial Services to Corporations and Institutions. Having
access to the deepest end of the country, BRAC Bank is there to assist businesses in Bangladesh.
With us on your side, you have the power of local knowledge with the capabilities of global
standard. In wholesale there are three parts-

a) Corporate banking

b) Cash management

c) Custodial service


Online banking services

Bangladesh telecommunications services provider Warid telecom a subsidiary of UAE-based
multinational company Dhabi Group has entered an agreement with financial services.
Provider BRAC Bank, local news outlet The New Nation reports. Under the terms of the deal,
the two companies are set to develop a joint system looking to allow Warid's franchisees and
business partners’ real-time access to the bank s services, online banking included. The joint




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                                                             A Case Study in BRAC Bank Limited


initiative comes after; Warid Telecom signed an agreement with BRAC Bank in August 2008 to
launch an SMS service for the former s subscribers.


Mobile banking service

The initiative will create a business relationship between the two organizations through mobile
banking services such as SMS banking, SMS bill payment services for post-paid and top-up for
pre-paid customers, bill collection via bill pay machine and ATM machines, and debit and credit
card for AKTEL post-paid customers. AKTEL, a leading cellular service provider, with BRAC
Bank Ltd has launched a service titled 'Mobile Banking Service'.

ATM Card Service

Another important task of CSD is to provide the customer the ATM card service. According to
the ATM card request slip or order made by branches account, number and specific PAN number
is generated for ATM card automatically by the system so that safety of the customer is
maintained. 195 ATM Booths all around the country to reach and serve the people better.

Consumer services

The Consumer Service Delivery department (CSD) is one of the important departments of
BRAC Bank, which performs back office functions for the branches. It is an operation
department of BRAC Bank. This department mainly acts as the processing center for the general
banking services provided by the branches and sales offices of the bank to the customer. For
instance, when an account is opened in a branch, the AOF is send to CSD and then CSD does all
the back office works regarding the account opening form.




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                                                            A Case Study in BRAC Bank Limited


Recent activities Service

Recently BRAC Bank lunched many service and system. There discus some recent activities are
bellow-


OFF Share banking
BRAC Bank Limited has launched its Off-Shore Banking Unit (OBU) at its Gulshan Branch
premise recently. An Off-Shore Banking Unit allows a bank to accept deposits and provide loans
in freely convertible foreign currencies. Having received the necessary permission from
Bangladesh Bank, the country’s fastest growing bank went into expanding their business to
include offshore services.


Lunches ERP system

BRAC Bank recently launched Enterprise Resource Planning (ERP), one of the biggest
deployments of such kind of automation of Management System in Bangladesh.


Stock market service for NRBs

BRAC Bank has launched its latest banking service -- Probashi Biniyog -- to help non-resident
Bangladeshis (NRBs) invest in capital market. The service enables NRBs to open BO
(beneficiary owner) accounts, buy and sell stocks in both primary and secondary markets, and
repatriate profit to their countries of residence. BRAC EPL Securities Ltd, a concern of BRAC
Bank, will provide the stock exchange-related services. The solution will be available to NRB
customers of BRAC Bank.




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                                                              A Case Study in BRAC Bank Limited


                                        Conclusion

As one of the fastest growing and modern banks of Bangladesh, BRAC Bank Limited is playing
a vital role as financial intermediaries linking economic policies of the government with rest of
the economy. The bank is constantly serving people and the economy of the country by raising
aggregate demand, production and thus creating wealth for the economy. In the other hand
BRAC Bank Limited offers great platform to build your career with learning and career growth
matched with compatible compensation and benefits in an enjoyable, enabling and ethical
working condition with highest level of professionalism.


As an operational Commercial Bank, BRAC Bank is performing much better than other
commercial banks. The employs of this bank is more professional and they are honest about their
job, for that reason the performance and service of this bank is very good. Consumers are highly
satisfied for their service. BRAC Bank also look after the consumer satisfaction, in this point of
view lunching more services like ATM, Online banking, mobile banking, various kind of card
etc. They are going to open some new services for their consumer. They have Consumer Service
Delivery department (CSD) which performs back office functions for the branches. It is an
operation department of BRAC Bank. This department mainly acts as the processing center for
the general banking services provided by the branches and sales offices of the bank to the
customer.


In BRAC Bank SME Banking is the most profitable and popular service. Today, with over
10,000 cores of loans disbursed till date, BRAC Bank is country’s largest SME financier that has
made more than 265,000 dreams come true. In the last six years of operation, the Bank has
disbursed over BDT 7500 core in loans to nearly 200,000 small and medium entrepreneurs. The
management of the Bank believes that this sector of the economy can contribute the most to the
rapid generation of employment in Bangladesh. BRAC Bank also motivates RB and NRB people
to invest in national economy.




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                                                            A Case Study in BRAC Bank Limited




                                   Recommendation


After identifying the disadvantages we try to find out some recommendation.



    We already know that their main disadvantage is highly charge in the view point of their
     customer or clients. So they should minimize their monthly or yearly charge.

    They should minimize their rate of interest against any kind of loan.

    Cheque should be issued in all kind of account because it makes the transaction easier
     then the debit or credit card.

    They should build ATM booth in all branch.

    They should minimize their account opening cost as a result people get interest for
     opening account.

    More branches should open inside Dhaka & outside.
    The home page of BRAC Bank should be more informative.




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                                                           A Case Study in BRAC Bank Limited


                                       References


Hamilton (2001), Information Technology & Banking Industry, 10 th ed., Delhi: McGraw Hill &
Irwin.

Raihan, A. (1998), Electronic Banking, BIBM Journal, No.Sept. & Dec., vol.23, pp.103-136.

Raihan, A. & Rabbi K. (1998), Information Technology and Electronic Banking, BIBM Journal,
No.1, vol.26, pp.95-133.




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