Agrani Bank at A

8/2/2019 Agrani Bank at A

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AGRANI BANK AT A

SKETCH

[2.1] HISTORICAL BACKGROUND OF AGRANI BANK LTD:

Agrani Bank is a state-owned commercial bank of Bangladesh established in 1972. Its

headquarter is situated at Motijheel in Dhaka, Bangladesh. Agrani Bank Limited, a

leading commercial bank with 867 outlets strategically located in almost all the

commercial areas throughout Bangladesh, overseas Exchange Houses and hundreds of

overseas Correspondents, came into being as a Public Limited Company on May 17,2007 with a view to take over the business, assets, liabilities, rights and obligations of

the Agrani Bank which emerged as a nationalized commercial bank in 1972 immediately

after the emergence of Bangladesh as an independent state. Agrani Bank Limited on

behalf of the government, former Agrani Bank and the Board of Directors of Agrani Bank

Limited on November 15, 2007 with retrospective effect from 01 July, 2007. It started

functioning as nationalized commercial bank taking over assets and liabilities of the

erstwhile Habib Bank Limited and commerce Bank ltd in the East Pakistan. The

authorized capital of the Bank is Tk. 800 core.

At the start of its operation in 1972, Agrani Bank had 246 branches, of which 37 were

temporarily closed. It had a total deposit of Tk 581 million, advances of Tk 663.40 million

and borrowing of Tk 294.80 million. Initially, it did not have any liquid asset to run its

operations smoothly and to undertake development activities. Investment amounting to

Tk 110 million was in unapproved securities. On 30 June 2000, the total deposit at the

bank stood at Tk 92.96 billion, total loans and advances at Tk 74.92 billion, total

investment at Tk 25.375 billion, total assets at Tk 124.798 billion and reserve funds at Tk

319 million. Of the total deposits, 8.03%, 35.41%, 19.21% and 37.35% were in current,

savings, fixed and other deposits respectively. 4.24% of the total amount of loans andadvances were classified. The credit-deposit ratio of the bank was 80.60%. The bank had

borrowed Tk 630 million from the inter-bank call market and the total value of its liquid

assets was Tk 36.160 billion. In September 1999, the interest rate offered by the bank

on savings deposits in both rural and urban areas was 7.50%, while the average interest

rate charged by it on lending in different sectors was 13.29%. Public sectors' borrowing

from the bank was Tk 12 billion (16% of the bank's total loans and advances); about 44%


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of these loans were classified. The bank also provided micro-credit. Up to June 2000, the

disbursement of micro-credit amounted to Tk 4.615 billion.

In addition to traditional deposit taking in various accounts and providing loans to

almost all sectors of the economy, the bank offers many other services through its

schemes of school banking, inland travelers cheques, pension funds, industrial

development bond and inland remittance. The bank operates some income generating

and economic development projects such as the Productive Employment Project,

Netrokona Integrated Agri-product and Water Management Project, IFAD Project for

POVERTYAlleviation through Employment Creation, Kurigram Poverty Alleviation Project,

Crop Intensification Project, National Micro Irrigation Development Project, Micro

Entrepreneurship Development Project, and Agricultural Diversification and

Intensification Project. The bank participates actively in foreign exchange business

including overseas remittance services. The total volume of foreign exchange business

handled by the bank in servicing imports and exports and remittances during 1999-2000

amounted to Tk 55.345 billion compared to only Tk 310 million in 1972-73. At present,

the bank has correspondent relationship with 903 foreign banks/bank offices

throughout the world.

Agrani Bank monitors its operations through a performance budget. It has a marketing

intelligence unit. It conducts a programme of human resources development through

training and motivation and has adopted some important policy measures, including

introduction of Lending Risk Analysis, suggested by the Financial Sector Reform

Programme. The business policies of the bank in 1990s included fulfilling capital

adequacy requirements, mobilizing large amount of deposits, and making investment of

assets in more profitable ways. The bank has diverted its activity toward off-balance

sheet items during the last decade as a part of its strategy to increase its area of

operation and non-interest based income.
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2.2 VisionTo become a leading bank of Bangladesh

operating at international level of

efficiency, quality and customer service .

2.3 MissionWe operate ethically and fairly within the

stringent framework set by our regulators.

We fuse ideas and lessons from best practice

to explore new avenues to become stronger,

more efficient and competitive. We apply

information and communication technologyFor the benefit of our customers and

employees. We invest to strengthen the

future of the Bank.

2.4 Motto

To adopt and adapt to modernapproaches to stand supreme in the

banking arena of Bangladesh.

2.5 ValuesWe value in integrity, transparency,

accountability and professionalism to

provide a high standard of service to all our

customers and stakeholders.


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2.6 Ethical Standards

1. Be Trustful: We believe in mutual trust and treat our customers in a way so that they can

trust us.

2. Keep an Open Mind: For continuous improvement of our Bank we keep our minds open to

new ideas. We seek opinions and feedback from both customers and team members through

which our Bank will continue to grow.3. Meet Obligations: Regardless of the circumstances, we do

everything to gain the trust and confidence of customers and

clients by honoring our commitments and obligations.

4. Be Transparent: We are transparent in our dealings with

customers and all stakeholders. We ensure transparency by

furnishing information through print & electronic media as

well as in Banks website, journals and reports

5. Be involved with the Community: We remain involved in

community-related issues and activities, thereby

demonstrating that our business is socially responsible.

6. Be Respectful: We treat all stakeholders with utmostrespect and courtesy regardless of differences, positions,

titles, ages, or other types of distinctions.

7. Be Environment conscious: We provide industrial financing decorously to keep the

environment free from pollution and health hazard. We also ensure setting up ETP before

installation of industries that may affect the environment.

2.6 Strategic Objectives

1. Winning at least 6 percent share of deposits and

4.5 percent share of loans and advances OfBangladeshi market.

2. Gaining competitive advantages by loweringoverall cost compared to that of competitors.

3. Overtaking competitors by providing quality

Customer service.

4. Achieving technological leadership among the

peer group.

5. Strengthening the Banks brand recognition.

6. Contributing towards the economic well-being of

the country by focusing particularly on SME and

agricultural sectors.7. Strengthening research capability for innovative

products.


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2.7 CORPORATE PROFILE

AS ON 31.12.2010

Name of the Company Agrani Bank Limited

Chairman Khondoker Bazlul Hoque, PhD

Managing Director & CEO Syed Abdul Hamid, Chartered Accountant

Company Secretary Md. Ekramul Hakim

Legal Status Public Limited Company

Genesis Agrani Bank Limited has been incorporated on 17 May 2007 and taken over thebusiness, assets, liabilities, rights and obligations of Agrani Bank with effect from 1 July2007. Agrani Bank which initially emerged as a Nationalized Commercial Bank (NCB) in1972, following The BangladeshBanks Nationalization Order, 1972 (President's Order No. 26 of 1972) has now becomea State Owned Commercial Bank (SCB) through a vendor's agreement dated 15November 2007.

Date of Incorporation 17 May 2007

Registered Office 9 D Dilkusha Commercial Area, Dhaka 1000 Bangladesh

Authorized Capital Tk. 800.00 Core

Paid up Capital Tk. 546.52 Core

Reserve & Retained Earnings Tk. 1025.20 Core

Credit Rating by CRISL Particulars Long Term Short Term

Surveillance Rating 2009(As Government Supported Entity)

AAA ST-1

Surveillance Rating 2009

(As State Owned Commercial Bank)

A ST-2

Surveillance Rating 2008(As State Owned Commercial Bank)

A- ST-2

Outlook Positive

Date of Rating Declaration 06-09-2010

Number of Employees 11,900

Number of Branches 867

Number of Subsidiary Companies 04

Phone-PABX +88-02-9566153-54, +88-02-9566160-69, +88-02-9566074-75

Fax +88-02-9562346, +88-02-9563662+88-02-9563658,

SWIFT at HO. ID. AGBKBDDH

Website www.agranibank.org

E-mail [email protected]@agranibank.org


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[2.8] BOARD OF DIRECTORS:

Agrani Bank Limited is governed by a Board of Directors consisting of 13 (thirteen)

members headed by a Chairman. The Bank is headed by the Managing Director & Chief

Executive Officer; Managing Director is assisted by Deputy Managing Directors andGeneral Managers

HEREENCLOSED THE CURRENT LIST OF BOARD OF DIRECTORSOF AGRANIBANK LTD.AS ON 31.12.2010

ChairmanKhondoker Bazlul Hoque, PhD

ProfessorDepartment of International Business

University of Dhaka

DirectorsRanjit Kumar Chakraborty

Additional Secretary, Finance Division, Ministry of Finance

Government of the Peoples Republic of Bangladesh

Shekhar DuttaSecretary

Moni Singh-Farhad Memorial TrustNagibul Islam DipuManaging Director

Polac Real Estate Limited

Engineer Md. Abdus SaburEngineer and Industrialist

Barrister Zakir AhammadChairman

Indepth News of Bangladesh (INB)Shahjada Mohiuddin

ProprietorM/S Arshi Enterprise

Abduz Jahir Chowdhury (Sufian)Social Worker

K.M.N. Manjurul Hoque LabluChief Editor & Managing Director

Global News Agency

A.K. Gulam Kibria, FCASenior Partner

G.Kibria & Co., Chartered Accountants

Luna ShamsuddohaChairman

Dohatech New Media

Syed Bazlul Karim, BPMRtd. AIG and Co-operative Leader

Syed Abdul Hamid, Chartered AccountantManaging Director & CEO

Company SecretaryMd. Ekramul Hakim


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[2.9] PRESENT OWNERSHIP STRUCTURE:

Its a Public Limited Company on May 17, 2007 with a view to take over the business,

assets, liabilities, rights and obligations of the Agrani Bank which emerged as a

nationalized commercial bank in 1972 immediately after the emergence of Bangladesh

as an independent state. Agrani Bank Limited started functioning as a going concern

basis through a Vendors Agreement signed between the ministry of finance,

Government of the People's Republic of Bangladesh on behalf of the former Agrani Bank

and the Board of Directors of Agrani Bank Limited on November 15, 2007 with

retrospective effect from 01 July, 2007

[2.10] FINANCIAL PERFORMANCE:

Total Operating Income

The Banks total operating income stood at Tk. 1,693 crore in 2010 as against Tk. 1028

crore in 2009 which indicates an increase of Tk. 665 crore (i.e. 65 percent higher) over

the last year.

Source: Annual report 2010

Total Operating Expenditure

The Banks total operating expenditure stood at Tk. 607 crore in 2010 as against Tk. 384

crore in 2009 which indicates an increase of Tk. 223 crore (i.e. 58 percent higher) over

the last year. This is mainly due to the increase of staff salary in line with the govt. policy

and new recruitment of officers.

Year

Profits2,349,543,923

3,013,327,5064,493,889,607

20082009

2010

Year

Profits

2,349,543,923

3,013,327,506

4,493,889,607


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Net Interest Income

The Banks net interest income is Tk. 691 crore in 2010. Interest earned from loan and

profit earned from investment remained the principal component of interest income.

However, interest cost of deposits was the main component of interest expenses.

Operating Profit

During 2010, the Banks total operating profit before amortization, provision and tax

stood at Tk. 1086 as against that of Tk. 644 crore in 2009. The Bank earned an operating

profit of Tk. 953 crore before charging any provision and taxes during the year 2010 as

against an operating profit of Tk. 511 crore in the previous year which indicates that the

Bank has increased its profitability significantly during the year under review compared

to the prior year. Income tax amounting to TK. 289 crore was charged against profit

during the year 2010. Thus a net profit (after provisions and taxes) during the year 2010

stood at Tk. 352 crore as against a net profit of Tk. 135 crore in the previous year

Capital Adequacy Ratio

As per the provisions of Section 13(2) of the Bank Companies Act 1991 and BRPD

circulars 01, 10, 05 and 11 dated 08 January 1996, 24 November 2002, 14 May 2007 and

14 August 2008 respectively issued by Bangladesh Bank, adequate capital needs to be

maintained by all commercial banks to operate the Banking activities smoothly. TheBank maintained core capital of Tk. 1162.72 crore as against required Tk. 869.65 crore

and total actual capital of Tk. 1,778.39 crore as against required Tk. 1,739.30 crore


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Appropriation of Profit

During the year 2010 the Bank earned Tk. 1086 crore before provision and tax which has

been appropriated in the following manner.

Particulars 2009(amount in

crore)

2010(amount

in crore)

Profit/(Loss) before provision & tax

Provision for loans and advances

Other provision (Including Incentive Bonus)

Total provision

Net profit/(loss) before Tax

953.25

89.22

223.31

312.53

640.72

511.49

90.95

94.78

185.73

325.76

Provision for tax

Current tax

Deferred tax

Total provision for tax

Net profit/(loss) after tax

Add: Retained surplus from the previous year

Available for Appropriation

206.86

82.18

289.04

351.68

275.54

627.22

170.00

20.21

190.22

135.55

479.35

614.90

Appropriation of Profit

Statutory Reserve

Bonus Share Issue

Retained surplus

128.14

49.68

449.39

65.15

248.42

301.33

Source:Annual Repot 2010


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[2.11]THE SERVICES AND PRODUCTS OF AGRANI BANK LTD:

1. Personal

2. Corporate

3. Business4. Agri &Rural

5. SME

6. Merchant

7. NRB

8. Islami

1. Personal BankingPersonal banking products are Deposit, Loan and Card services offered by ABL. Deposit

services are Savings bank account, fixed deposit receipt, Pension sanchay scheme. These

schemes enhance small savings of limited income people to be accumulated.

Loan products at personal level are Home loan, Consumer loan, and Advance against

salary. These programs help to achieve your dreams just in time and at a minimum

effort.

Agrani Bank presents Debit card for the clients sharing a network with other four

renowned banks of the country. Fees for the card are nominal. You may have a debit

card from ABL and enjoy a life free from any tension of carrying cash.

2. Corporate BankingAgrani Bank provides deposit services like Current account and fixed deposit for its

corporate clients. On the other hand it arranges funds through syndication of banks for

big, corporate projects. Thus the bank is contributing to uplift the national economy to a

higher level.

3. Business supportWith a view to building up a fund of Tk. 500 crore for financing industrial projects, ABL

introduced Agrani Bank Shilpa Unnayan Bond in 1999. There are two types of bonds, 5

and 7 years. The lowest denomination is Tk. 50,000 and highest one is of Tk. 500,000.

Interest rate is good enough to attract people.


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Major credit Schemes for business people are Industrial Credit, Trade Finance, Import

Finance and Export Finance. If you are a deserving candidate for any of them, or you

need any documentary support from Agrani Bank, you may pay a visit to any branch of

ABL.

4. Agri & Rural BankingNow bottom line farmers may have a bank account depositing Tk.10 only. Agrani Bank

provides this service to rural Bangladesh. Young generation intending to go abroad for

jobs may have loan for their air tickets and other expenses against nominal securities.

5. SME BankingSmall and medium enterprise of the country is one of the deserving sectors for financial

support. Agrani Bank justifiably provides credit to them under different schemes. ABLlaunched a joint venture program named Small Enterprise Development Program (SEDP)

with NORAD, a Norwegian agency in 1995. This program was implemented in greater

Mymensingh and Faridpur districts. The target fields were rice mill, oil mill, and nursery,

repairing shops, fishery, weaving and many more.

6. Banking for NRBsNonresident Bangladeshis now get banking facility through Agrani Bank. They may have

an account in taka; they may invest in Dollar Bonds. They are also allowed to have an

F/C account. If you are one of them you can avail these opportunities. Your nominees

are also entitled for these scopes.

7. Merchant BankingThe merchant banking unit of Agrani Bank was turned into a subsidiary entity in 2009

and named as Agrani Equity & Investment Limited. This unit serves Issue management,

Underwriting and Portfolio management functions.

8. Islamic BankingAmong the nationalized banks Agrani was the first to introduce Islami Banking service.

Agrani Bank provides completely interest free Shariah based banking to the clients.

Deposit services offer interest free profit in compliance with Shariah. If you desire to get

Islami banking service you are welcome at its Islami banking unit in its H/Q.


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[2.12]BRANCH NETWORK:

The bank has 11 Circle offices, 25 Divisions in head office, 54 zonal offices and 876 branches

including 27 corporate and 40 AD (authorized dealer) branches. The branches of the Bank cover

all the important trading and commercial centers in Bangladesh. As of date, it has 876 brancheswithin Bangladesh. Most of the branches are equipped with computers in addition to modern

facilities, logistics and professionally competent manpower.

[2.13] ABOUT ELEPHANT ROAD BRANCH:

Elephant Road Branch of Agrani Bank Limited is located at Elephant Road, Dhanmondi, Dhaka.

This branch is a project branch of Agrani Bank. The main purpose of Elephant Road Branch is to

provide banking services to the employees of Elephant Road of Bangladesh. Actually, this

branch is located in the Elephant Road Boundary. Agrani Bank rented the place to run its

operation. Elephant Road Branch started its journey at 25 June 1986. At present, this branch

provides banking services not only to the employees of Elephant Road but also to other general

public. For example, employees of various organizations get banking services from this branch.

Assistant General Manager (AGM)

(Acting Branch Manager)

Principal Officer

Senior Officer

Officer

Clerk /casher

Massinger /peon

Figure: Management hierarchy of Elephant Road Branch


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Elephant Road Branch has seven departments to provide banking services. These

departments are

Figure: Different department of Elephant Road Branch

There are 15 employees working in the Elephant Road Branch. The Branch Manager looks after

the functions of seven departments. Two employees are mainly responsible for General

Banking department. Loans & Advance department, Bills department, clearing department,

Foreign Remittance department and Cash department have one employee for each. There is a

Computer Operator who is responsible for posting the entries in the computer. The Branch has

two peons as well.

Loans & Advances

Department

General Banking

Department

Elephant Road Branch

Of Agrani Bank

Remittance Department Computer DepartmentClearing DepartmentCash Department

Local Remittance (TT,

DD, PO)

Foreign Remittance

Documents

Agrani Bank at A