Report

Standard Bank Limited
Setting New Standard in Banking

A Study on Fund Management of SBL
Preface
Internship Report is a scope for acquiring substantial knowledge after perfecting of academic
classes. BBA is the academic degree of our educational life. Before joining the substantial
field we need to acquire knowledge about the planning, staffing, motivating, directing,
control, administration, organization & different managerial activities. It is scoped for
observing and learning how the theoretical matters are related with substantial tasks. The
necessity of the internship program is increasing day by day with growing complexity of the
business environment.
Internship program is a part and parcel of BBA curriculum. So after completion the BBA
examination every student should require to attach with an organization to carryout
internship as a part fulfillment of BBA program. Considering the wide range of activities of
Commercial bank, I have decided to complete my internship on private commercial bank.
Accordingly I have deputed to accomplish my work of internship in Standard Bank Limited,
Agrabad Branch, Chittagong. Under the topic of Bank Fund Management Performance A
study of SBL I have thoroughly examine the operations of the Branch and tried my level best.
Internship Report-2009, BBA, Southern University.


Acknowledgement At first I like to pay my gratitude to Almighty God who has

given me the strength and capability to complete the Internship Report. Besides this I am
grateful some particular persons who have helped and encouraged me at each and every step. At
the very outset I extend my heartiest gratitude to my honorable teacher Mohammad Alamgir,
Assistant professor, Department of marketing studies & International marketing for his massive
support & cooperation. I would like express my heartiest gratitude to Mr. Mosharaf Hossain,
Managing Director, Standard bank Limited and Mr. Mahmud Sharif, Executive Vice President of
SBL to allow me to conduct internship in the standard Bank Limited. I am also greatly indebted
Mr. Nururssafa, Vice President and in charge of Agrabad Branch and Mr. Lutfur Rahman
Bhuyian, Officers Mr. Saiful Hasan, Mr. Mizanur Rahman and Md. Monirul Islam, Assistant
officers Ms Rozi Akter, Pullak Dutta,& Mr. Ershad Ullah Faruqe , Trainee Assistant officers
Masum Kamal, Anisur Rahman, Probationary officers Md. Kamrul Hasan for their intimate care
and supervision I like to thank all Officers and Staff who shared their suggestions and views with
me. Standard Bank Limited Setting a New Standard in Banking 3

Table of Contents Chapter Particulars Page No.

Chapter-1 Introduction Statement of the Problem Objectives of the Study Scope of

the study Methodology of the Study Organizations of the Study Limitations of the
Study Chapter-2 Introduction Policy Statement for Fund Management Fund
Management Strategy Mission Objective and Goal Statement of SBL Risk Factor
Chapter-3 Introduction Product and Services of the Bank Deposit Mix Deposit
Performance of SBL Deposit and Profit Relationship Chapter-4 Productivity of
deposit for the year 2006 Productivity and Profitability of Sample Bank Chapter-5
Problems of the Fund Management Suggestions for the Bank Chapter-6 Findings and
Summary Conclusion Reference Standard Bank Limited Setting a New Standard in
Banking 4

Chapter: 1
1.1 INTRODUCTION
1.2 STATEMENT OF THE PROBLEM
1.3 OBJECTIVES OF THE STUDY
1.4 SCOPE OF THE STUDY
1.5 METHODOLOGY OF THE STUDY
1.6 ORGANIZATIONS OF THE STUDY
1.7 LIMITATIONS OF THE STUDY Standard
in Banking 5
Bank Limited Setting a New Standard

1.1 INTRODUCTION Banks are the major financial institution which intermediate
between actual lenders and actual borrowers. For this intermediation, banks are to pay actual
lenders and charge actual borrowers. At present situation banking model has been developed all
over the world as well as Bangladesh Bank. So now a day manager will have to be more
knowledge of about national global economy. In response to this situation traditional
management knowledge has diversified by the modern managers, through different universities
and institutions are creating the modern manager through the business administration program.
Each university of the world has a program of substantial experienced called internship Report.
With this program the students come to the substantial situation of the business and
administration. The students are become aware about the official correspondents, managerial
behavior, decision-making process, motivation system, coordination system, Supervision,
interpersonal relation and many more. Generally fund management practice is an important
concept for Banking sector & used word widely. Mobilization of fund means to collect deposit
from different sources and disbursed it in several ways to earn profit Banker means to accept
deposits from the public repayable on demand, withdrawal by cheque for the purpose of lending.
Standard Bank Limited Setting a New Standard in Banking 6

1.2 STATEMENT OF THE PROBLEM In this concept of fund management

Fund is a scare resource. It is not available in the world. So as there is a fund constraint in these
management concepts, there are some reasons behind it. These are a) Saving behavior of people
b) Poverty in policy making of fund mobilization c) Different Government policy d) Fiscal and
monetary policy. e) Institutional weakness f) Assets- Liability mismatch problem g) Strategic
problem h) Several micro and macro factors affecting the fund management process. Standard
Bank Limited Setting a New Standard in Banking 7

1.3 OBJECTIVE OF THE STUDY Every work has its own objectives. So the
main objective is to evaluate the fund management Performance of the Standard Bank Limited.
More specifically the objectives of the study are: a) To highlight the policies of sample bank for
mobilization of fund. b) To evaluate the performance of fund management of sample bank. c) To
access the impact of fund mgt on profitability and productivity of the bank. d) To identify the
problem with fund management of the sample bank. e) To provide suggestion of the problem. I
have tried my best to touched and discussed about all of above- mentioned point in my report and
give the report to a complete shape. So that anyone can understand banking system of Standard
Bank Limited to go through this report. 1.4 SCOPE OF THE STUDY
Department
Period of data use
Customer Service
Accounts
Loan And Advance
General Banking
Name of the bank
2003-2007
Standard Bank Limited Standard Bank Limited Setting a New Standard in Banking 8

1.5 METHODOLOGY OF THE STUDY Every program should follow some

basic form of procedures. For this purpose we can divide this part in two ways:- 1.5.1 Collection
of data 1.5.2 Analysis of data 1.5.1 Collection of data There are several ways of collecting the
appropriate data which differ considerably in context of money costs, time and other resources.
To prepare this report the data collected by two ways: 1) Primary Data: Primary data collected by
By observation
Personal Interview
By Questionnaires
2) Secondary Data: Secondary data collected from
Annual report of the SBL
Right Share offer document
Statement of affairs
Balance Sheet
Financial Statement
Different journals
Different Text of BBA & BBA Program
1.5.2 Analysis of Data After the data have been collected, the must be analyzed. The analysis of
data requires a number of closely related operations such as establishment of categories, the
application of these categories to raw data through coding, tabulation and then drawing the
statistical inference. I use the following statistical tools to analyze the data:
Mean
Standard Deviation
Correlation
Regression analysis
Bar diagram
Pie chart

1.6 ORGANIZATIONS OF THE STUDY

In this report first chapter covered the policy, strategy, mission, objective, goal of fund
management. Second chapter covered types of deposits of sample bank, deposit performance,
seven years activities at a glance, five years deposits status of the sample bank. Third chapter
covered the productivity and profitability position of the sample bank. Fourth and Fifth chapters
covered problems and suggestions of fund management of the sample bank. Finally the sixth
chapter covered the findings and conclusion of the study. Standard Bank Limited Setting
a New Standard in Banking 10

1.7 LIMITATIONS OF THE STUDY

In every program or activities have some limitations and constraints. I have also faced several of
limitation during my internship. If I could overcome these constraints, my research and finding
would be appropriate and logical, but I could not overcome this factors. I have mentioned here
some of this limitation.
1. The bank has no adequate quantity of readymade data and information
2. It is impossible to know everything for time constraint
3. Most of the responsible officer was so busy that they could not provide sufficient time to us
4. Short range of data analysis
5. Insufficient investigation in all departments due to secrecy
There are some major limitations, which have created many problems during my internship
program. In spite of these constraints I tried to make my report best. Standard Bank
Limited Setting a New Standard in Banking 11

Chapter: 1
2.1 INTRODUCTION
2.2 POLICIES IMPLEMENTED BY THE SAMPLE BANK FOR FUND MOBILIZATION
2.3 STRATEGIES OF FUND MANAGEMENT
2.4 MISSION OBJECTIVE GOAL OF THE SAMPLE BANK
2.5 RISK FACTORS Standard Bank Limited Setting a New Standard in Banking 12

2.1 INTRODUCTION Today banks are highly complex organizations-offering

multiple services different groups of individuals inside the bank usually make the decisions on
what customers are to receive loans, what securities the bank should add to its investment
portfolio, what terms should be quoted to the public on deposits and other services the bank
offers and what sources of capital the bank should draw upon. However, bankers today realize
that all of these management decisions are intimately linked each other. In a well-management
bank all of these management decisions must be coordinated across the whole bank to ensure that
they do not clash with each other, leading to inconsistent actions that damage the banks earnings
and value. Today bankers have learned to look at their asset and liability portfolios as an
integrated whole, considering how the banks total portfolios contributed to its broad goals of
adequate profitability and acceptable risk. This type of coordinated and integrated bank decisionmaking is known as Fund Management. The purpose of asset- liability management is to
formulate strategies and take actions that shape a banks balance sheet as a whole in a way that
contributes to its desired goals. Usually, the principal goals of asset-liability management are- a)
To maximize or at least stabilize, the banks margin or spread between interest revenues and
interest expenses and b) To maximize or at least protect, the value (stock price) of the bank, at an
acceptable level of risk Standard Bank Limited Setting a New Standard in Banking 13

2.2 POLICY STATEMENT FOR FUND MANAGEMENT Board or

management committee of the Bank should set out the policy statement in at least for the
followings and annual review should be done taking into considerations of changes in the balance
sheet and market dynamics. 2.2.1 Loan Deposit ratio (LD) The Ad ratio should be 80% to 85%.
However, the loan deposit ratio of the bank should go up to 110%. The loan deposit ratio=Loan/
(Deposit + Capital + Funded Reserve). The ratio will be fixed based on the banks capital, banks
reputation in the market and overall depth of the money market. 2.2.2 Wholesale Borrowing
Guideline The guideline should be set in absolute amount depending on banks borrowing
capacity, historic market liquidity. The limit should be capped at the banks highest level of past
borrowings. However, this limit can be increased based on the match funding basis. 2.2.3
Commitments The commitments Guideline should not exceed200% of the unused wholesale
borrowing capacity of the last twelve months. The limit can be increased if there are natural
limitations on customer discretion to draw against committed lines or a bank access to additional
funds via realization of surplus statutory holdings. 2.2.4 Medium Term Funding Ratio (MTF)
The MTF of a bank should not be less than 30%. The ideal scenario should be 45%. Given, the
overall scenario of current market, it will be suitable to move towards the MTF limit of 45% as
we progress. Standard Bank Limited Setting a New Standard in Banking 14

2.2.5 Maximum Cumulative Outflow MCO up to 1 month bucket should not exceed 20% of the
balance sheet. 2.2.6 Liquidity Contingency Plan A liquidity contingency plan needs to be
approved by the board. A contingency plan needs to be prepared keeping in mind that enough
liquidity is available to meet the fund requirements in liquidity crisis situation. An annual review
of the contingency planning should be made. 2.2.7 Local Regulatory Compliance There should
be a firm policy on compliance to the Bangladesh Bank in respect of CRR, SLR, Capital
adequacy etc. 2.3 FUND MANAGEMENT STRATEGY The maturing of
liability management techniques, coupled with more volatile interest rates and greater banking
risk, eventually gave birth to the fund management approach, which dominates banking today.
This view is a much more balanced approach to asset and liability management that stresses
several key objectives.
1. Bank management should exercise as a much control as possible over the volume, mix and
return or cost of both assets liabilities in order to achieve the banks short run and long run goals
2. Management control over assets must be coordinated with its control over liabilities. So that
assets and liability management are internally consistent and do not pull against each other
3. Revenues and costs arise from both sides of the banks balance sheet (i.e. from both assets and
liabilities). Bank policies need to be developed that maximize returns and

minimize costs from bank services that result in assets (e.g. the making of loans) or in liabilities
(e.g. the sale of deposits)
2.4 MISSION, OBJECTIVE AND GOAL STATEMENT OF STANDARD

BANK LIMITED 2.4.1 Mission To be the premier financial institution in the country
providing high quality products and services backed latest technology and a team of highly
motivated personnel to deliver excellence in banking and exploring a new horizon of innovative
banking Slogan Setting a New Standard in Banking 2.4.2 Objective of the Bank Long-term
objective To be the market leader both in term of deposits and good advances among private
commercial banks by 2010. Short-Term objective To increase current market shares by 2007
and providing high quality product services backed by latest technology Financial Objective To
reduce the existing cost of Fund by 1%, that currently stands at 2.4.3 Goals
Become the leading profitable bank
Provide highest level of satisfaction to customers by the means of Excellence in banking
Optimize the return on Shareholders investments
Strategic Intent To ensure that customers receive a consistent standard quality of service in
comparison to that of the private commercial banks in Bangladesh. Standard Bank

Corporate Governance Mechanism They have board of directors and an executive committee
formed by the board for overlooking the operations and management of the bank. They also
appoint auditors to look over the financial statements. Appointment of auditors is subjects to
approval of annual general meeting. Ethical codes They have an environmental management
policy that stipulates adherence with environmental, health and safety regulations and guidelines,
refraining from business impair the ability of future generations to meet their own needs,
assessing and mitigating risks concerning environment, health andsafety6 issues in business that
they undertake. Their policies with regard to safety, health and environment management is being
observed in their lending decisions. Several measures have also been introduced within the bank
ranging from declaring all Standard Bank branches and officer as Smoking Free Zones to
conservation of energy. Corporate Social Responsibility Standard Bank recognizes its
responsibilities as a corporate entity of the country and stands aside the community whenever
required. Standard Bank has always extended its to the development of the community though
promotion of sports, culture, research, environmental projects and disaster aids. Standard
Bank Limited Setting a New Standard in Banking 17

2.5 RISK FACTOR

a) The risk is inherent to all equity securities and is not specific to Standard Bank Limited (SBL).
b) Systematic risks are uncontrollable to SBL and have equal impact to other industries in the
economy. Some of the unsystematic risks outlined above are usual in the banking industry. SBL
scrutinizes all its clients and the associated risks systematically using up to date risk evaluation
techniques and thereby have been able to maintain its asset quality so far and expects the same.
c) Every bank carries some contingent liability in their books as it is generic to the nature of SBL
carries contingent liability in its books as a natural course of business and the quality of
contingent liability is high as demonstrated by almost no default till date. Also the amount of
contingent liability carried by SBL at any point of time is not significantly high compared to the
size of its balance sheet in general and reserves in particular.
d) Recognizing the risks, SBL has focused on a diversified client base since its inception with an
innovative and differentiated product structure. This strategy has been rewarding for the bank,
which plans to remain innovative in the future also by way of creating new markets for its
products.
e) Should one or more bank in the country fail to perform or become bankrupt at any point of
time, a general lack of confidence in the market may affect SBL business negatively. This risk is
absolutely external to SBL and could affect any financial institution operating within the country.
f) Adequate technology is a comparative issue. SBL feels that it has adequate technology for the
time being would enhance its technology level with the demand of time. Market access is a
function of innovation. SBL has accessed the market successfully till date being one of the
pioneer entrants in the market. Availability of skilled human resources is a national constraint but
SBL has been addressing this aspect by focusing on imparting of training to its manpower to
cultivate the skill and efficiency.
g) SBL is going to full automation. It has already established online banking transaction facility
with all its 10 branches across the country.

Chapter: 1
EVALUATION OF PERFORMANCE OF FUND
MANAGEMENT
3.1 INTRODUCTION
3.2 TYPES OF DEPOSIT OF SAMPLE BANK
A) TYPES OF DEPRSIT
B) DEPOSIT MIX
3.3 DEPOSIT PERFORMANCE OF THE SAMPLE BANK
A) SEVEN YEARS ACTIVITY AT A GLANCE
B) FIVE YEARS DEPOSIT STATUS OF SBL
3.4 DEPOSIT PROFIT RELATIONSHIP OF THE YEAR 2007 Standard
Bank

3.1 INTRODUCTION In banking deposits are given by the customer and received by
the banker through the account. So the account is a well-established or well-devised system
agreed upon by the banker and customer within the limits of law. Deposits are collected from
different sources.
Public source
Government source
Institutional sources
Club
Individual source
Organizational sources:
Sole proprietorship
Partnership
Joint Stock Company

3.2 PRODUCT AND SERVICES OF THE BANK 3.2 a) Types of deposit

Current Account One can maximize flexibility and convenience when he/she opens a current
account with SBL. This account offers:
The account can be opened by both individuals and business concerns including
Non-profit making organizations
Opening of a Current Account requires proper introduction
Unlimited transactions a day, no minimum balance fee & free cheque book.
No interest is allowed on current account
Bank Statement to be dispatched on a monthly basis or as may be requested by the customer
Features of current account:
According to this account, account holders can easily deposit and with draw money.
The payment is done whenever depositors want to with draw money.
Depositors will not get any interest.
No pass book is issued.
Bank cannot use depositors fund for investing in other profitable sectors.
This account gives maximum utility to its customers.
Advantage of Current Account
It is a secured account.
It is helpful for export and import business.
Bank gives advice and facilities to its customers.

By this account money can be transferred to one account to another, one city to another city
within a minute.
Disadvantage of current account
Too many formalities for opening an account
There is no interest earned from this savings
It is not suitable for low income people
Saving account The savings Account allows one to have interest income on his/her deposit
whilst the account can be used for transaction purpose. One can draw a maximum number of two
cheques per week, exceeding this number will forfeit the interest for the month. SBL offers a
competitive interest rate of 7% on the account and there is no requirement for a minimum
balance to maintain in the account to be eligible for the interest. Interest is applied to the account
on half-yearly rates. The savings Account also offers:
Can be opened by individuals for saving purposes depositing amounts over a period of time
Requires proper introduction
No minimum balance fee and free cheque book
Statement of account at a quarterly basis
But a penalty is also charged to the customer, each time a cheque is returned unpaid for want
of funds in the account
Short Term Deposit
The short term deposit account of SBL is a unique blend of flexibility and high return on
deposits. This account can be used like a current account whilst earn interest on the account when
the stipulated minimum balance is maintained in the account. Standard Bank Limited

offers a very competitive interest rate of 5.0% and the interest is calculated on a daily product
basis. Deposit should be kept for at least seven days to get interest. Prior notice is required for the
withdrawal of money from STD account. The account holder must give notice seven days before
the withdrawal that is why STD is called Seven-Day-Notice Current A/C. In addition, the
clients also enjoy the following:
Unlimited number of withdrawals, no minimum balance fee and free cheque book
Statement of account at desired frequency
Fixed Deposit In Standard Bank Limited only three terms of fixed Deposits are available, which
are as follows along with their respective rates; 1 month FDR @ 9% per annum. 3 months FDR
@ 11.5% annum. 9 months FDR @ 12% per annum and 1 year FDR @ 12.5% annum. At the
time of opening the deposit account, the banker issues a receipt acknowledging the receipt of
money on deposit account. In any case, any client of the bank opens a fixed deposit account with
the bank for an amount of Tk. 50 Lac or over; the management of DBL will be pleased to honour
the clients by providing a fixed rate of 13% to 14% per annum. The fixed deposit interest
earnings can be instructed to be deposited automatically to any preferred account of the client
with the bank and the FDR can be automatically renewed for the next period after maturity as per
the instructions of the client. Features of Fixed Deposits
It is a deposit account
Here is money is deposited for a fixed time
Interest is paid on deposits. Interest rate is fixed by bank
No transaction can be made thus banker doesnt provide pass book or cheque
A person can deposit any sum of money

Introductory reference is not need to open an account

Banker give documents to depositor, the documents is not negotiable, if it is negotiable the
new owner will not get such facilities
After the interval of six month the interest is paid, the interest is calculated as day product
Depositors can withdrawn by after showing documents provides by bank
Advantage of Fixed Depositors
By providing a smart amount a person can open it
This account help in long-term planning of the deposited account
The amount of fixed deposit can invest in long-term productive scheme
The amount of fixed deposit is invest in development sector of a country for long-term
Depositors get higher interest compare to others
Deposits are save and less risky
Deposits are not taxable interest and interests are also non-taxable
Depositor can withdraw real amount and interest at a time
After the contractual agreement the deposits can reinvest in bank
Depositors get 80% loan facilities from his deposited amount
Disadvantage of fixed Depositors
Lower class people are not always able to open such account
Depositors have to deposit full amount at a time
Money can be withdrawn after maturity
Sometimes Government charge tax from the deposited amount

Standard Bank Special Saving Scheme This scheme allows for getting attractive fixed amount
at the end of the specified term through depositing monthly installment of Tk. 500 to Tk.
2,500.00 over a period of 5 and 10 years. Annual profit @ 11% for 5 years and 12% for 10 years
is allowed under this scheme. The depositor should deposit his/her monthly installment by the
10th day of each month. If the 10th day is a public holiday, then deposit in the next working day is
allowed. A single depositor may open more than one of such SSSS account. Another advantage
of the scheme is that the depositor may take loan of maximum 80% on the deposited amount. The
depositor can have one or more nominee(s) for claiming the deposited money after his death. In
the case of more than one nominee, the depositor can determine the portion of amount of money
for each nominee. No joint account is allowed in this scheme.
The
500.00
1000.00
1500.00
2000.00
2500.00
depositors
amount
After 5 years
37,000.00
78,000.00
1,11,000.00
1,48,000.00
1,85,000.00
the bank pays

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Standard Bank Limited

Setting New Standard in Banking

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Acknowledgement At first I like to pay my gratitude to Almighty God who has

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Table of Contents Chapter Particulars Page No.

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Chapter-1 Introduction Statement of the Problem Objectives of the Study Scope of

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Bank Limited Setting a New Standard

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

1.2 STATEMENT OF THE PROBLEM In this concept of fund management

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

1.5 METHODOLOGY OF THE STUDY Every program should follow some

Standard Bank Limited Setting a New Standard in Banking 9

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

1.6 ORGANIZATIONS OF THE STUDY

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

1.7 LIMITATIONS OF THE STUDY

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

2.1 INTRODUCTION Today banks are highly complex organizations-offering

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

2.2 POLICY STATEMENT FOR FUND MANAGEMENT Board or

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

Internship Report-2009, BBA, Southern University.

Standard Bank Limited

Setting New Standard in Banking

2.4 MISSION, OBJECTIVE AND GOAL STATEMENT OF STANDARD

Internship Report-2009, BBA, Southern University.