CHAPTER: ONEIntroductory Issues

1.1.: Introduction

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Well- educated, dedicated, skilled and enterprising workforce is the sine-qua-non for the progress and development of a service-oriented industry like Bank. From very first emergence and inception of modern civilization, Bank plays a pivotal role in case of overall financial and socioeconomic development of any modern country. The economic development of our country mainly depend upon the efficiency of the banking results is so far as, whether the bankers have been able to read the economic situation properly and are successful in selecting the promising industrial sectors seeking import and export assistance to grow. With the rapid changes of time mans are readily depend on banking services in case of handling cash, transferring cash, and also financing in various industrial and business projects. So it is needed to control & plan funds in order to provide better day-to-day banking services to the valued customers. Because a service oriented industry a bank should believe that customers is all and the king.

1.2.: Background of the study

Internship is a prerequisite for completing the practical side to fulfill the B.B.A. program.Theoretical sessions alone cannot make a business student efficient and perfect in handling the real life business situation. Only a lot of knowledge will be little important unless it is applicable in practical life. So we need proper application of our knowledge to get some benefit from our theoretical knowledge to make it more fruitful. When we engage ourselves in such fields to make proper use of our theoretical knowledge in our practical life situation, only then we come to know about the benefit of the theoretical knowledge. Such an application is made possible through internship. The internship program has the following three phases:

1) Introductory Issues: Introductory issues like background, scope, methods & limitations of the study are discussed.

2) The project part: Pertaining to a particular problem or searching topic matching with the internee’s capacity, interest on the organization.

3) The report writing : To summarize the internee’s analysis finding and achievements in the preceding two phases.

1.3.: Scope of the study

The field of my study is the operation of zonal office of JANATA Bank Ltd at Jhenidah district. The scope of the study covers the fund and investment of JBL as a whole.

1.4.: Objective of the report

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The objectives of the report are to make us known the practical situation of Janata Bank Ltd. in fund & investment.The primary objective of this report is to commonly with the requirement of JBL. However, the objectives of this study are something broader. Objectives of the study are summarized in the following manner.

General objectives: The general objective is to prepare and submit a report on “Fund & Investment Management of JANATA Bank Ltd”.

Specific objectives:

To apply theoretical knowledge in the practical field.To present an overview of JANATA Bank LtdTo develop our skill on the banking sectorTo earn valuable knowledge about fund & investment.

1.5.: Methodology of the studyAt the time of internship period, I tried to use both primary and secondary data that I have gathered from different sources. For preparing this report primarily I got some data from face to face conversation of different employees of JBL and some from different reports and features of the bank. Sometime I have undergone group discussion, asked some questionnaires to the responsible officer of that work and interviewed with some of them. I observed different parties and their transaction from a very close eye .all of this observation and data are included in this report.

Source of data:These sources are as follows:

1. Primary source:

Primary data are collected through two ways. These are: a).Questionnaire: Some primary data are collected by taking interview and by discussion with A.G.M. and officers of JBL. b). Observation: Here primary data are collected through spending three month in the JBL during the working hour. Here I observed the total fund & investment of JBL.

2. Secondary source:

Secondary data are collected from the following sources:

a) Annual reports of JBLb) Published documentsc) Official files

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d) Data available with the website of JBL.e) Different publication of Bangladesh bank.

1.6.: Limitations of the studyEvery matter has some limitations. Therefore, this is also not an exception. The limitations of this internship report are been stated below:

Due to time and cost restriction, the study is concentrated in selected areas. To continue study in such a vast are requires a big deal of time. As an internee, I had only three month, which is not enough.As a financial organization, a bank has some restrictions to serve all the real data of the bank to the general people as a result the study is mostly depends on official files and annual reports.

Available data also could not be verified. In most cases I simply did not have any option but to furnish with data without verification.

JBL as a commercial bank they are very busy and they could not able to give me enough time for discussion about various topics.

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CHAPTER: TWOFund Management of JBL

2.1.: Fund Management

For any organization fund is an important criteria. It is the lifeblood of any organization. It combines asset and liability management strategies in order to achieve financial institution’s goal and meet its liquidity needs more effectively.

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Funds of JBL

Reserve fundNon-deposited

borrowing fund

Investment fund

Other types of funds

2.2.: Funds of JANATA BANK LIMITED

JANATA BANK LIMITED maintains the following funds for liquidity and daily transactions.

Reserve fund Non-deposited borrowing funds Investment fund Other types funds

Chart of JBL’s Fund

2.3.: Reserve fund of Janata Bank Limited

Janata Bank Ltd. collects reserve through the under mentioned 3 kinds of reserve fund.

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Reserve fund of JBL

Primary reserve fund

Secondary reserve fund Legal reserve fund

A. Primary reserve fundB. Secondary reserve fundC. Legal reserve fund

Diagram of JBL’ Reserve fund

2.3.1.: Primary Reserve Fund of JBL:

Generally, primary reserve is related with central Bank. Janata Bank Ltd. keeps certain portion of their time deposits to Central Bank. Central Bank warns, punishes and fines if it does not maintain this amount of money

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at the central bank. In exchange of maintaining the reserve at the central bank, JBL enjoys loan advantages as lender of the last report, advice and other opportunities from central bank. Sometimes, JBL can keep this money in its own vault on the approval of central bank.

Primary reserve fund of JANATA BANK Ltd. includes the following items-

1) Cash in hand2) Balance with Bangladesh bank3) Demand deposit with other bank

Diagram of Primary Reserve of JBL:

A.: Amount of primary reserve of JBL for the year of 2007, 2008, 2009 are shown in a table-

Primary Reserve of JBL

Cash in handBalance with

Bangladesh bank Demand deposit with other banks

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PrimaryReserve Fund 2009 2008 2007

Cash in hand 3611730895 4036224616 4238274687

Balance with Bangladesh bank

12920117768 12490948085 11341490261

Demand deposit with other bank: In Bangladesh 2215123115 3523399750 4880254938

Outside Bangladesh

1909304371 2456393565 3421058838

Total 20566276149 22506966016 23881078724

Chart of Primary Reserve Fund of JBL:

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JBL maintains primary reserve for the following functions for under mentioned causes:

1. Protect from possible liquidity crisis.2. Plays the role of the first line of defense.3. Enables the bank to satisfy depositors’ claims instantaneously.4. Enable to perform the expected function of the community.5. Enables thee bank to meet the establishment expenses.

2.3.2.: Secondary Reserve Fund of JBL:

To maintain normal operations, Janata Bank regulatory committees suggest keeping adequate amount of the secondary reserve fund to avoid liquidity problem. In a simple sense, the assets or securities kept in near cash form by JBL to maintain liquidity and which are not included in statutory or primary reserve.

Conditions of secondary reserve fund:

There are some conditions, which must be satisfied to be considered as secondary reserve asset. These conditions are given below-

A. ConvertibilityB. Low riskC. Yield

Risk associated in secondary reserve fund

Two types of risks are thereA. Reduction in price

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B. Interested buyer for conversion

Secondary reserve fund of JBL includes the following items:

1. Call loans to commercial banks 2. Govt. security

Call loans to commercial banks & Govt. security for the year 2009, 2008, 2007 at a glance:

Secondary Reserve fund of JBL 2009 2008 2007Call loans to commercial banks 5633529807 7088744458 8567349333Govt. security 72533203682 57823525987 55862930391Total 18166733489 64912270445 64430279724

Chart of Secondary Reserve Fund of JBL:

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2.3.3.: Legal Reserve Fund of JBL:

The portion of deposit that must be kept compulsorily in the form of cash by order of bank regulatory authority is called legal reserve.

Legal reserve fund of JBL for the year 2009, 2008, 2007 are given below-

Legal Reserve Fund 2009 2008 2007

Legal Reserve 52892954 114946031 ……………

3.3.3.1. Strategy of JBL to increase and decrease of legal reserve fund:

Strategy for increasing legal reserve:

1. Sells securities2. Receivs interest payment on securities3. Borrows reserves from central bank

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4. Purchases Treasury bond

Strategy for decreasing legal reserve:

1. Purchases securities2. Pays interest on securities3. Repays loans to central bank4. Sells Treasury Bond

2.4.: Non-deposited borrowing fund of JBL:

Janata Bank Limited borrows fund from the following sectors like banks, financial institutions and agents. They are discussed below-

(1) In Bangladesh (11) Outside Bangladesh

Security wise grouping(1) Secured (By Bangladesh Bank Deposits)(2) Unsecured

Maturity wise grouping(1) Repayable on Demand(2) Others

Non borrowed funds of JBL for the year 2009, 2008, 2007 are given in a table-

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Non-deposited borrowing fund

2009 2008 2007

Borrowing from banks financial institutions & agents

31565952 5876333 3504298538

Chart of Non-deposited borrowing Fund of JBL:

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2.5.: Investment fund of JBL:

Investment fund of JBL includes the following items for the year 2009-

Investment Fund 2009

a) Govt. Securities: 1) Treasury bill 5929537238 11) National investment bond ……………. 111) Govt. Notes/Bond 49049549538b) Other Investments: 1) Shares of Joint Stock Companys 195333818 11) Debenture & Bond 308623633c) Others: 17889622Total Investment Fund = 55862930391

2.6:Other Types of Fund of JBL:

Janata Bank Ltd. keeps other types of.They are discussed bellow-

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Amount of other types of JBL’s Fund are-

Other types fund 2009

Capital Fund: A. Authorized Capital 8,000,000,000 B. Paid up capital 5,000,000,000Statutory Reserve Fund 2644948976Miscellaneous Reserve Fund 6141468825

Other types of Fund

Capital FundStatutory Reserve

FundMiscellaneous Reserve Fund

Authorized Capital Fund

Paid Up Capital Fund

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CHAPTER: THREEInvestment Management of JBL

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3.1.: Investment portfolio of Janata Bank Ltd.

Investment portfolio of Janata Bank Limited mainly comprises of investment in Bangladesh in the following areas-

Government securities/Bonds/Treasury Bills of different period and Bangladesh Bank Bill.

Zero coupon Bond.

Debentures of Government, semi government organizations and public limited company.

Shares of listed company.

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Reserve Repo-

Shares of Major Companies:-

1. Investment Corporation of Bangladesh (ICB)

2. National Tea Company Ltd.

3. British American Tobacco Bangladesh (BATB)

4. Bata Shoe Company (Bangladesh Ltd.)

5. BOC Bangladesh Limited.

6. Heidelberg Bangladesh Limited

7. Confidences cement Ltd.

8. Industrial Development Leasing Company of Bangladesh Ltd.

9. Singer Bangladesh Ltd.

10.MONNO CERAMIC Industry Ltd.

11.MONNO Fabrics Limited.

12.Apex Tannery Limited.

13.Meghna cement mills Limited.

14.Eastern Bank Ltd.

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15.Eastern Cables Ltd.

16.Padma Oil Company Ltd.

17.Beximco Pharmaceuticals Limited.

18.Rackit and benkiser Bangladesh Ltd.

19.Square pharmaceuticals limited.

20.United leasing company limited.

21.Karmasangthan Bank Ltd.

22.Bangladesh commerce Bank Ltd.

23.Central Depository Bangladesh Ltd.

24.Industrial and infrastructure development finance company ltd.(IIDFC)

3.2.: Investment Highlight of Janata Bank Ltd.

3.2.1.: Investment for the year 2009

The total investment of JBL is Tk. 57028.50 million as on 31.01.2009. The head wise investment positions are as following-

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3.2.2.: Investment for the year 2008:

The total investment of JBL is Tk. 57028.50 million as on 31.01.2008. The head wise investment positions are as following-

Particular Amount of Tk. (In million)

1. Debentures 546.50

2. Govt. security 56286.70

3. Zero coupon bond share 195.30

Total= 57028.50 millions

Chart of JBL’s Investment on 31.01.2008:

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Besides this investment portfolio, call money / Term deposit / Credit line also given from Treasury division to different banks and NBFIs.

CHAPTER: FOURFindings, Recommendation & Conclusion

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6.1 Findings

While working at JBL regional office, Jhenidah, I have achieved a newer kind of experience.

After collecting and analysis data, I have some problem of the JBL. These problems are

completely from my personal viewpoint, which is given below:

A. Lack of update products is a drawback of the general banking area of the JANATA Bank. New products such as new types of schemes like lakh poti scheme, kotipoti scheme, marriage scheme are not available in JBL, which may increase bank’s fund.

B. As the deposit is heart of running the banking activities JANATA Bank Deposit growth not good. Because JANATA Bank deposit rate is low other than commercial banks such as Dhaka Bank, Prime bank, Mercantile Bank, HSBC Bank, Bank Asia etc.

C. Lack of proper training.

D. Because of technological change such as use of computer there are few staffs who have lacking in computer knowledge are not efficient enough to finish every task immediately.

E. Clients generally complain that rate of interest for various type of credit is quite high. In

many cases productivity from loaned investment is inadequate that borrower become incapable in repaying loan.

F. One problem is that bank always follows the policy of risk averse in the world today all the organization are moving in approach of risk taking. As a result, it is facing some problems and also facing competition from other banks.

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G. The recovery of various fund is threatened.

H. JBL does not promote itself for catering its funds.I. Investment is lower than other banks in comparison.

6.2 Recommendation:

Some necessary steps are recommended bellow based on collected data, observation, expert staffs

opinion and my knowledge and judgments. For the probable solutions of the identified problems,

ensure better process to JANATA Bank in future.

1. In the face of competitive and customer dominated scenario JBL must come up with

innovative products to meet up the demand of time. Such as study loan, medical loan,

debit card, dual currency credit card etc to create fund.

2. JBL should collect foreign currency from wage earners that increases fund.

3. The entire department should be well informed regarding their goals and objectives. It is

essential to execute company objective into individual target.

4. If the entire banking system is fully online on computerizes system perfectly then they

satisfy the customer by providing fast service with minimum service charge that is a way

of increasing fund.

5. It can be recommendation that if all the branch of The JBL a vivid account manual for

the account holder, it will be better for the bank.

6. A company book regarding service offered by the bank and accountability and proper

monitoring strengthen the services.

7. JANATA Bank should give more attention to advertisement for creating more attraction

among its customers, which is helpful to collect more deposits and increase investments

scope. That is why bank should give emphasis on advertisement in various media like

TV, News Paper, Internet and Billboard.

6.3 Conclusion

There are a number of Private Commercial Banks, Nationalized Commercial Banks and foreign

Banks operating their activities in Bangladesh. The JANATA Bank Ltd. is one of them. For the

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future planning and the successful operation for achieving its prime goal in this current

competitive environment this report can be helpful guideline.

From the practical point of view, I can declare boldly that I really have enjoyed my internship at

Janata Bank Ltd. from the first day. Moreover, internship program that is mandatory for B.B.A.

program, although it is obviously helpful for career building.

In the last decade, there has been a revolution in the communication media through the

introduction of internet and other forms of secure dial-up media. This had an immense impact on

all the sectors of the industry specially the banking sector. The number of banks is increasing day

by day because the demand of the customer for the banking service is high as a result there is a

highly competitive situation in the banking sector and people has many option incase of taking

banking services. As a central bank of Bangladesh The Bangladesh Bank always adopting

measures for putting banking institution on right track and monitors the activities of these banks

to prevent from doing illegal activities.

To compete in the environment of advancing technology and faster communication the JBL

should depend more heavily on the quality service and information technology. No doubt, about

it that JBL achieve superior position in our banking industry but to cope with customer JBL

should think how to make it services proactive. To compete with other bank’s operation in

Bangladesh, JBL should introduce easier way for faster processing of fund analysis.

Banks always contribute towards the economic development of a country. Compared with other

Banks JANATA Bank Ltd is contributing more by investing most of its funds in fruitful projects

leading to increase in production of the country. It is obvious that right channel of Banking

establish a successful network over the country and increases resources; will be able to play a

considerable role in the portfolio of development in developing country like ours.

JANATA Bank Ltd playing its leading role in socio-economic development of the country. Since

inception, JANATA Bank Ltd has been rendering its Banking services with the needs of the

nation to cope with the demands of people in the country. By doing many other works for state &

society, JANATA Bank Ltd has emerged as the pioneer of playing key role in the country.

As a leading bank of Bangladesh, JBL contributes in the business with promising future. I can

hope that JBL can spread their business with increasing various scheme and other utility services.

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Reference

Bank Publications:

1. Annual Reports of JBL year 2009, 2008, 2007.

2. Published booklist and hand bills of JBL

3. JBL General Banking Policy Book

Website:1. www.Janatabank-bd.com

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