Letter of Transmittal
Dr. M. Mahmodul Hasan
Faculty
MBA, Asa University Bangladesh
Dear Sir,
We are glad to submit the report on the assigned to topics as a part of our term paper requirement.
As you will see, our report focuses on the “Rupali bank Limited and its financial analysis, SWOT analysis and others analysis that you required’. We have tried our best to follow the methods and ethics to prepare this report.
Let we give our hearty thank, for your kind cooperation without which we could not be able to complete this report. We would take every opportunity to express our gratitude to you.
Hereby, we hope that you would be kind and generous enough to accept our sincere effort and oblige thereby.
Sincerely your
Laila Khairun Nahar
On behalf of excellent Group
Acknowledgement
First of all, I am expressing my sincere great fullness to almighty to prepare this report, no noble achievement can be achieved by an individual report depends on the contribution of number of people specially their thoughtful guidance and suggestions to complete this report. I am indented for their kind recommendation, submission, direction, cooperative and their collaboration.
We would like to give my heartiest gratitude. Dr M. Mahmudul Hasan, Department of Business Administration, ASA University Bangladesh, Dhaka, he has given his full effort to correspondent it the advisor of our report and make all kind of necessary formalities regarding our term paper and report as efficiently.
It is our pleasure to them and our grateful appreciation goes to RBL authority for rending me their expertise, knowledge and giving us opportunity of having a practical experience the program.
Executive Summary
Today necessity of Banks as a financial and institution is undeniable. In the age of Modern civilization, Bank is playing its spending role to jeep the economic development wheel moving. The co-operation of the Bank is needed in every economic activity. In fact there is hardly any aspect of economic activity which does not need banks. Conventional Banks operates their business on interest basis. But interest is not only one purpose of the RBL. It also is continuing support society and overall country. The term paper report is prepared for the requirements of Strategic management course of ASA University
The report covers the definition of strategic management and its process, Strategic Models, Rupali bank limited detailed information, its mission, and vision and organ gram, how RBL affected by macro economic factors, Value chain of RBL, Market segmentation and industry key success factors and strategy evaluation and contingency plan .This report also include also recommendation and graphs.
RBL has a bulk of qualified, experienced and dedicated Human Resources. RBL has the reputation of being the provider of good quality services to the customers. Loan Admin department virtually has no direct link to the borrowers serves as the last check point to mitigate all loan related risks before disbursement of a loan and perform guideline of Bangladesh Bank. Loan Admin communicate with the Banks legal consultants on various issue and for vetting and drafting documentation as per the sanction terms.
Introduction:
Banks are major financial institutions play a major role in the financial system of a country. The word 'Bank' refers to the financial institution that deals with money transactions. Banks collect money at the lowest possible cost and provide loans and advances at the highest cost. The spread between the two is the profit for the bank. There are two different types of banking. One is commercial banking and investment banking. The commercial banking is a type of bank which is engaged in banking activities, like; deposits and making loans and other fee based services. It raises funds by collecting deposits from business and consumers via checkable deposits, and time (or term) deposits. It makes loan to business and consumers. It also buys corporate bonds and government bonds.
In today's world, technological and financial advanced is influencing every human activity. Commercial banks have been playing a vital role in the world economy. Bank is not only a financial institution, but also for the government. Country's prospect" and future economic conditions largely depends on the commercial banks. The motives of banks are profit earning. Commercial banks are primary contributes to the national development of the country in today's business world, few financial organizations have made a strong place in the market, and Rupali Bank Limited is ones of those names.
Profile of the organization
Bank:
A bank is an institution, which deals with deposits and advances and other related services. It receives money from those who want to save in the form of deposits and it lends money to those who need it. Bank is a financial institution where you can deposit your money. Banks provide a system for easily transferring money from one person or business to another. Using banks and the many services they offer saves us an incredible amount of time, and ensures that our funds "pass hands" in a legal and structured manner. There are also other types of financial institutions that operate just like banks. We'll cover these later. Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending.
Historical background of Rupali Bank Limited:
Rupali Bank is a commercial bank in Bangladesh East Pakistan , following the 1971 Bangladesh Liberation War. The bank was denationalized in 1986, and reorganized as a limited company, with the Government of Bangladesh holding 51% shares. However, after the year 2000, the Government divested of its shares, and the privatization of the bank was complete.
Rupali Bank Limited, the largest and leading commercial bank of the country. The bank has been discharging its nation-building responsibilities by undertaking government and privatization entrusted different socio-economic schemes as well as money market activities of its own volition, covering all spheres of the economy. Rupali Bank Limited is governed by a Board of Director Consisting of 13(Thirteen) members headed by a chairman. The bank is headed by the chief Executive Officer & Managing Director, who is well-known Banker and a reputed professional. The head office of the bank along with its corporate structure is located at Motijhil, Rupali Bhaban, Dilkusha Business Area, Dhaka-1000, the main commercial center of the capital in Bangladesh
Corporate Information of Rupali Bank Limited:
Brief Profile of Rupali Bank Limited:
Public Limited Company Rupali Bank Limited has been incorporated on 14 December 1986 under the Companies Act 1913 after taking over and acquiring as a going concern the undertaking and business of Rupali Bank with all of its assets, liabilities, benefits, rights, powers, authorities, borrowing, privileges and obligations. Rupali Bank, which initially emerged as a Nationalized Commercial Bank (NCB) under the Bangladesh Banks (Nationalization) Order, 1972 (President's Order No. 26 of 1972), has now become a state-owned commercial bank (SCB) through a vendor's agreement dated 15 November 2007. Date of incorporation is 14 December 1986 . Mr. Ahmed Al-Kabir, PhD is the Chairman of RBL and Mr. M. Farid Uddin is the Managing Director of RBL.
Some important information about Rupali bank Ltd-
Ø Authorized Capital : Tk. 700 Crore
Ø Paid-up Capital : Tk. 125 Crore
Ø Reserve & Retained Earnings : Tk. 420 Crore
Ø Credit Rating by CRAB(2009) : Long Term - BB3
Short Term-ST3
National Support- AAA
Ø Listing with DSE : 19-08-1987
Ø Listing with CSE : 10-10-1995
Ø Commencement of Trading
with DSE & CSE :23-12-1986
with DSE & CSE :
Ø VAT Registration : 9011039307
Ø TIN Certificate : 177-200-0021/LTU/Dhaka
Ø Number of Employees : 4503
Ø Number of Branches : 492
Ø Website : www.rupalibank.org
Ø E-mail : info@rupalibank.org, it@rupalibank.org
Objectives of Rupali Bank Limited:
• The main objective of the bank is to provide all types of banking facilities and services at the all customer satisfaction.
• Develop a customer oriented service culture with special emphasis on customer care and convenience.
• Increase market share by following a disciplined growth strategy.
• Achieve a significant share of deposit and credit from the existing and niche markets.
• Leverage technology platform and pen scalable systems to achieve cost-effective operations, efficient MIS, improved delivery capability and high service standards.
• Develop innovative products and services that attract targeted customer and market segments.
• Maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholders value.
• Explore new avenues for growth and profitability, particularly by diversifying loan portfolio through structured finance and expansion of retail and SME financing.
• To earn and maintain CAMELS Rating Strong.
• To be in the forefront of national development by providing all the customers inspirational strength.
• To provide dependable support and the most comprehensive range of business solutions.
• To establish relationship banking and improve services quality through development of strategies marketing plans.
• To ensure optimum utilization of all available resources.
• To ensure an adequate rate of return on investment.
• To maintain a healthy growth of business with desired image.
• To keep risk position at an acceptable range.
• To maintain adequate control systems and transparency in procedure.
• To develop and retain a quality work force through an effective Human Resources Management Systems.
• To establish and maintain the modern banking techniques.
• To ensure the soundness and development of the financial system based on Rupali principles.
Features of Rupali Bank Limited:
The main features of RBL are as follows-
Ø Relationship with Central Bank: Rupali Bank Limited play vital role of our economy for this reason it has very good relationship with central bank.
Ø Legal Entity: Every bank should have a legal entity. Rupali bank also established maintains legal entity because this bank is government bank. This bank registered under company act 1913 to get the legal entity.
Ø Location of the bank: Rupali Bank Head office and other branches are situated of the located in the rural and urban central point of the capital and other cities in the country.
Ø Organizational Structure: Organizational Structure is an essential element for a bank for efficient bearing of all the activities. With the help of planned organizational structure, it is easy to know about the hierarchy of the organization.
Ø Financial Solvency: Financial solvency is most important function for every bank. Financial solvency is a crucial part for smooth running of banking business. RBL is a leading and largest commercial bank in our country for this reason this bank capital are large another bank.
Vision of the organization:
“Rupali Bank Vision is to expand our loyal customer base by being known as the financial partner of choice that constantly exceeds customer expectations”
Rupali Bank mission is to:
· Developing long term relationships that help our customer achievefinancial success.
· Offering rewarding career opportunities and cultivate staff commitments.
· Uphold ethical values and meet its customer's financial needs in the fastest and most appropriate way and continue innovative works in order to achieve human resources with superior qualities, technological infrastructure and service packages.
Rupali Bank Ethical Principles:
§ Customer Focus and Fairness: At RBL, prime focus is to achieve perfection in customer services. Customers are first priority and driving force. Gain customer confidence and be their trusted partner. RBL believe that in fair treatment to all customers, depositors, borrowers and clients without any discrimination.
§ Quality: Quality service experience is a paramount to customers and strongly committed to fulfilling this ideal. RBL have a culture of timely compliance of regulatory requirements.
§ Honesty and Integrity: RBL ensure the highest level of integrity to customers, creating an ongoing relationship of trust and confidence.
§ Belief in people: RBL recognize that employees are most valuable asset and competitive strength. Respect the worth and dignity of individual employees who devote their careers for the progress of the bank.
§ Teamwork: RBL are a firm believer in team work and fell that loyal and motivated teams can produce extraordinary results. RBL are driven by a performance culture where recognition and rewards are based on individual merit and demonstrated track record.
§ Good Corporate Governance: Effective corporate governance procedures are essential to achieve and maintain public trust and confidence in any company, more so in a banking company. At RBL, are committed to following best practices resulting in good corporate governance.
§ Corporate Social Responsibility: As a responsible corporate citizen, RBL consider it important to act in a responsible manner towards the environment and society.
Core Value of Rupali Bank Limited:
Rupali Bank Limited Core Values is following:
ü Social Responsibility- we care for and contribute to our communities
ü Performance- we measure results and reward achievements
ü Integrity- we uphold trustworthiness and business ethics
ü Respect- we cherish every individual
ü Innovation- we encourage creativity
ü Teamwork- we work together to succeed The first letter of the initial words from "SPIRIT" and carry equal importance.
Sources of fund in Rupali Bank Limited:
The year-end funding structures of the Bank in 2009 and 2010 are given below :
(Amount in millions)
| Sources of fund | 2010 | 2009 |
| Deposits | 9112.38 | 7380.34 |
| Paid-up Capital | 125.00 | 125.00 |
| Statutory reserve | 153.54 | 125.02 |
| Share money deposits | 7.50 | 7.5 |
| Revaluation reserve of Govt. Securities | 1046.27 | 341.65 |
| General reserve | 51.33 | 51.33 |
| Retained surplus from profit and loss account | 31.51 | (1208.67) |
| Total | 10527.53 | 6822.17 |
Table: Source of Fund
Organogram of RBL:
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Organogram of RBL( Corporate Branch):
Management of RBL:
Rupali bank limited has already achieved tremendous progress within now this time. The bank has already ranked as one of the quality services providers and is known for its reputation. This branch management is very strong than other branches of Rupali Bank Limited. Many VIP customers and business people (such as brokerage house owner) come to open various account to make transactions according to their needs. Effective management system helped to achieve huge customer's response.
Products and services in Rupali Bank Limited:
The Rupali Bank Limited offers different types of services to its customers and they are expanding the area of services day by day. From the very beginning they gave more emphasis on satisfaction of customers. They offer the general banking facilities such as
Deposits of RBL: · Current Deposit (CD)
· Call Deposit (CDR)
· Special Notice Deposit (SND)
· Savings Deposit (SB)
· Saving Deposits Earned from Foreign Remittance (SB)
· Fixed Deposit (FDR)
· Rupali Deposit Pension Scheme (RDPS)
· Rupali Deposit Pension Scheme-2 (RDPS-2)
· Rupali Deposit Pension (RDS)
· Rupali Monthly Earning Scheme (RMES)
Loans and Advances:Ø Cash Credit (Hypothecation)
Ø Cash Credit (Pledge)
Ø Overdraft (OD)
Ø Loan against FDR
Ø Loan against Deposit Schemes
Ø Short Term Loan
Ø SOE Loan
Ø Syndication Loan
Ø Housing Loan General And Commercial
Ø Personal Loan/ Professional Loa
Ø Household Loan
Ø Self Reliance and Special Program Loan
Ø Local Bank Guarantee
Ø Loan under Equity Entrepreneurship Fund (EEF)
Ø Student Loan
Ø Small and Medium Enterprise
Small Ø Fixed Assets Financing
Ø Working Capital Financing
Ø Trading and Services
Ø Fixed Assets Financing
Ø Working Capital Financing
Rural and Agro CreditØ Young Farmers Loan
Ø Solar-Energy and Bio-Gas Plat Establishment Loan
Ø Fishery Loan
Ø Shrimp Cultivation Loan
Ø Goat/Sheep Rearing Loan
Ø Poultry Loan
Ø Dairy Loan
Ø Loan Against Crop Storage in Silos
Ø Small Loan
Ø Micro Credit
Others Loans: Ø Bank-NGO Linking Credit
Ø Loan Against Share/Debenture
Ø Loan Against Brickfield/ Gold Ornaments
Ø Loan for Preservation of Potatoes in the Cold Storage
Ø Transportation Loan/Car Loan
Ø Woman Entrepreneur Financing Program ,
Ø Consumer Credit/Travel Agency and Diagnostic Center
Foreign Exchange Business:All sorts of Foreign Exchange Transactions are made in Rupali Bank Limited following 'Guidelines for Foreign Exchange Transactions (GEFT-2009) by Bangladesh Bank Such as-Foreign Currency Account
Ø Foreign Currency Account
Ø Resident Foreign Currency Deposit Account
Ø Non Resident Foreign Currency Deposit Account
Ø Exporter' Retention Quota Account
Import Finance:§ Letters of Credit
§ Loan Against Imported Merchandise (LIM)
§ Loan Against Trust Receipt (LTR)
Export Finance Pre-shipment Credit:Ø Cash Credit Against Hypothecation of Raw Materials/Exportable Goods
Ø Cash Credit Against Pledge of Raw Materials/Exportable Goods
Ø Packing Credit (PC)
Ø Back to Back L/C
Ø Back to Back L/C under Exported Development Fund (EDF) Post-shipment Credit
Ø Negotiation of Export Documents
Ø Collection of Export Documents
Ø Foreign Bills Purchased (FBP)
Ø Inland Bills Purchased (IBP)
Bond:Ø Wages Earners Development Bond
Ø Investment Bond
Ø Premium Bond
Guarantee:Ø Performance Guarantee
Ø Warranty Guarantee
Ø Shipping Guarantee
Ø Guarantee Against Foreign Bank's Counter Guarantee
Ø Advance Payment Guarantee
Ø Customs and Excels Guarantee
Foreign Remittance:Ø Foreign Currency Endorsement
Ø Issuance and Encashment of Traveler's Cheque
Ø Foreign Currency Encashment
Ø Issuance and Encashment of Foreign Drafts
Ø Opening of Student File and remittance there against Treasury
Ø Treasury Bills
Ø Treasury Bonds
Ø REPO Fund Transfer
Inter-Branch Money Transfer: Ø Telegraphic Transfer
Ø Demand draft
Ø payment-order clearing cheque payment through BFTN and BATCH
Modern Banking Activities:Ø SWIFT
Ø ATM Service
Ø Debit Card
Ø Value Added Service
Ø Locker Services New Products and Services
Ø Merchant Banking Services
Ø ELDORADO EFT System (will be introduced soon)
Interest Rates of RBL:
| SLNo. | Types of Deposit | Interest Rate per annum |
| 1. | Savings Deposit | 4.50% |
| 2. | Short Notice Deposit | 3.50% |
| 3. | Time Deposits | |
| | a) 3 months & above but less than 6 months b) 6 months & above but less than 1 year c) 1 year & above but less than 2 years d) 2 years & above but less than 3 years | 7.50% 7.75% 8.00% 8.50% |
| 4. | Deposit From foreign Remittance | 6.00% |
| 5. | Rupali Bank Deposit Pension-Scheme 2 | 6.50% |
-The rates of interest are changeable from time to time depending upon market competition
Financial Analysis of Rupali Bank Limited:
Total Assets:
Total assets of RBL stood at Tk. 12443.45 crore in 2010 from in Tk. 8779.14 crore in 2009 registering a growth of 41.73 percent. The increase in asset of RBL was mainly by growth of customer deposits. The growth of deposits was under for funding growth in credit and holding of securities for SLR purpose. The economy witnessed a lower growth in credit and deposits mobilization. Table- Growth of Balance Sheet Items
| Outstanding Tk in crore Growth of RBL % | |||
| | 2010 | 2009 | |
| Assets | 12443.45 | 8779.14 | 41.73 |
| Deposits | 9112.38 | 7380.34 | 23.46 |
| Loans & Advances | 6606.90 | 5234.42 | 26.18 |
Cash and Balance with Bangladesh Bank:
RBL's position increased from Tk 528.97 crore in 2009 to Tk 754.26 crore in 2010 showing a growth of 42.68 percent. The growth in deposits increased the CRR of the Bank which is maintained with Bangladesh Bank and its agent. CRR was maintained adequately through out the year.
Balance with other Banks and Financial Institutions:
RBL's position increased from Tk 206.97 crore in 2009 to Tk 268.85 crore in 2010 registering a growth of 61.88 crore. Adequate funds were also maintained with correspondent banks for payment against LC commitments.
Money at Call & Short Notice:
This was the major area of operation of the RBL's Treasury Division. The total money at call and short notice of RBL stood at Tk 320.00 crore in 2010 from Tk 370.00 crore in 2009.
Investment:
RBL's investment increased during the year by Tk 141.42 crore and stood at Tk 1571.71 crore as at 31 December, 2010 .
Loans and Advances/Investments:
Loans and advances of RBL increased by Tk 1370.48 crore showing a growth of 26.18 percent during 2010 . Yield on loans and advances of RBL decreases to 01.11 percent due to reduction of lending rates on corporate and medium scale financing as is imposed by Bangladesh Bank Concentration of loans and advances was well managed and details of credit are given at notes to account no 7.00. Ratio of non performing loan of RBL decreased to 11.96 percent as against 19.48 percent of previous year.
Liabilities:
The total liabilities (excluding equity) of RBL stood at Tk 11028.30 crore in 2010 from Tk 9337.32 crore in 2009 registering a growth of 18.11 percent. The increase in liability was mainly due to growth in deposits.
Borrowing from Financial Institutions and Agent:
The borrowing represents RBL's borrowing against from Bangladesh Bank. Refinance was taken for rural financing and against NOSTRO accounts in abroad.
Contribute to National Exchequer:
The Bank has contributed a lot to the government in its revenue collection process. Bank pays income taxes regularly on its income. The Bank also deducts income tax, value added tax and excise duty at sources as per law from various payments and services and services and deposits the same to the national exchequer. Rupali Bank Limited pays tax on behalf of its employees. Total payments to the National exchequer during 2010 and 2009 are given below:
| Particulars | 2010 | 2009 |
| Staff income tax paid by the Bank | 2.11 | 0.81 |
| Tax deducted at source and deposited | 318.71 | 315.23 |
| VAT deducted at source and deposited | 2.94 | 2.60 |
| Excise duty at source and deposited | 10.72 | 11.67 |
| Total | 334.48 | 330.31 |
Contribute to National Economy:
The Bank plays an important role in the development of rural economy. The Bank has branches across the country. The Bank operates some branches in the remote areas to provide the banking services to the rural people, though operations of those branches are not financially viable to the Bank. The Bank also plays an important role in reducing unemployment generation activities. At the end of 2010, the Bank itself employed people, out of which were officers and were staff members, since beginning, the Bank has been highly active in remittance operations to facilitate disbursement of remittance received from Bangladeshi wage earners working abroad. The remitted money can be deposited to the beneficiaries account within maximum hours.
Porter's 5 Forces Analysis:
1. Competitive Rivalry: High
Top Performing Public Sector Banks
- Sonali Bank
- Agrani Bank
- Janata Bank
Top Performing Private Sector Banks
- Islami Bank Bangladesh Ltd.
- Dhaka Bank Ltd.
- Brac Bank Ltd.
- Prime Bank Ltd.
- Uttara Bank Ltd.
- Dutch Bangla Bank Ltd
Top Performing Foreign Banks
· Citibank
· Standard Chartered
· HSBC Bank
The banking industry is highly competitive. The financial services industry has been around for hundreds of years and just about everyone who needs banking services already has them. Because of this, banks must attempt to lure clients away from competitor banks. They do this by offering lower financing, preferred rates and investment services. The banking sector is in a race to see who can offer both the be stand fastest services.
Diagram of Porter's 5 Forces
| | SUPPLIER POWER Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry | |
| THREAT OF NEW ENTRANTS Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products |  | THREAT OF SUBSTITUTES -Switching costs -Buyer inclination to substitute -Price-performance trade-off of substitutes |
| | BUYER POWER Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives | DEGREE OF RIVALRY -Exit barriers -Industry concentration -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes |
2. Buyer Power High:
With the emergence of larger number of players in the Banking Industry, the switching cost of the buyer has gone done significantly. The onus is now on the effectiveness and speed with which the services are provided to the customers. Financial institutions - by offering better exchange rates, more services, and exposure to foreign capital markets -work extremely hard to get high-margin corporate clients. Options in the Auto Finance Sector also give the customers more power to decide upon the kind of financing. Introduction of specialized products for Women and Students etc also show that the buyer power is high in this Industry.
3. Supplier Power Low:
The suppliers of capital do not pose a big threat, but the threat of supplier’s taking away the human resource. If a talented individual is working in a smaller regional bank, there is the chance that person will be enticed away by bigger banks, investment firms, etc.
4. Threats Of New entrance Low:
Starting a bank in a country like Bangladesh
5. Threat from Substitutes: Low
As you can probably imagine, there are plenty of substitutes in the banking industry. Banks offer a suite of services over and above taking deposits and lending money, but weather it is insurance, mutual fund or fixed income securities, chances are there is non-banking financial services company that can offer similar services. On the lending side of the business, bank seeing competition rise from unconventional companies. Sony, General Motors and Microsoft all offer preferred financing to customers who buy ticket items. But these substitutes do not affect Rupali Bank due to its huge brand name and presence in the market.
PESTEL ANALYSIS
Ø Political Aspects:
Rupali Banking has been protected by the regulations and policies formulated by different government in the countries where they are operating. The company has been able to adhere to the policies given by each government to make sure that the company will be able to conduct business operations successfully and effectively. Furthermore, the company also formulates their own protection strategies against any governmental restrictions and limitations.
Ø Economic Aspect :
Being the world's largest and competitive industry in terms of banking and finance, Rupali, is said to have a stable and successful economic stability. In spite of many dangers that they encounter in different parts of the world, the management of Rupali sees to it that they would be able to surpass such struggles and strives to have a better economic condition.
Ø Social Aspect :
Rupali is being affected by the situation of the society in which they are operating. Along with this, Rupali tries harder to make sure that each society is given equal chances to take advantage of the resources given by the organization. The company adheres to having good reputation and relations in the society that they belong.
Ø Technological Aspect:
The emergence of information technology and internet affects how Rupali has been operating in the past years. The company adopts different IT/IS systems and used internet to reach their customer all over the world and to know the latest trends in the global business. Aside from these, the company also uses facilities which helps them improved their productions and operations.
Ø Legal Aspect:
Stricter regulations and there have been quite a few court cases with a few banks because shareholders lost money (not that all of these cases actually get much of a fight).
SWOT Analysis of RBL:
Rupali Bank ltd. Is a state-owned commercial bank. Rupali Bank came into being in 1972 with the integration of Muslim Commercial Bank, Australasia Bank and standard bank Ltd from the very inception of its birth, this Bank , as a prospective Bank, has been passing its time through diverse Strengths, Weaknesses, opportunities and threats.
Strengths:· The Bank has well-arrayed network with 492 branches in rural, semi-urban and urban areas for rendering services throughout the country.
· The Bank has reputation and tradition for a long time.
· The Bank has well-acquainted and independent brand.
· The Bank has sound, reliable and extensive deposit base of long duration.
· The Bank has worldwide 163 correspondence arrangement and 22 exchange houses through which foreign trade transaction and remittance activities are accomplished.
· The bank has a huge number of tested customers.
Weaknesses:· Lack of long-term business planning.
· Weakness in credit management.
· Tangle of a huge number of suits.
· Defaulted loan for a colossal amount.
· Blocked loan at interest free rate or nominal rate of interest.
· Weak automation and lack of application of modern information technology.
· Lack of efficient and experienced officers.
· Training weakness.
· Lack of marketing planning.
· Absence of time suited products.
· Lack of foreign branches and a limited numbers of correspondence and exchange houses.
Opportunities:· Branch modernization and automation.
· Introduction of On-line banking and delivery of ATM services.
· Relocation of branches in commercially important locations.
· Strengthening of marketing activities.
· Introduction of competitive modern banking products.
· Expansion of local and foreign remittance business through vast branch network.
· Introduction of mobile banking service.
· Introduction of merchant banking.
· Setting up of mini branches at the outlaying areas of the country under ‘mini banking programme’.
· Expansion of corporate branches.
· Expansion of AD branches.
Threats:· Competitive state-owned commercial bank.
· Competition with private & foreign commercial banks working in Bangladesh
· Lack of competitive pay & allowances and facilities for officers and staffs.
The Boston
The BCG model is a well-known portfolio management tool used in product life cycle theory. BCG Matrix is often used to prioritize which products within company product mix get more funding and attention. The BCG Matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate.
Ø BCG Stars:
Stars are those products whose have high growth and high market share. Stars are market leader but stills need lots of support to promotion a place. They need sustainable investment to maintain or dominant their investment. Rupali banks stars products are-RMSS, CC (hypo), RDS, Industry Loan, SME Loan, Business Loan.
Ø BCG Cash Cow:
Cash cows are in a position of high market share with low growth. Cash cow’s are normally mature position in the life cycle of the product. They generate high profit margin and competitive advantage for the organization. Rupali Bank’s Cash cow products are-STD, RDPS, project Loan, Savings Account, Current Account, FDR, Various Rural and Agriculture Loan.
Ø BCG Question Marks:
Normally Question Marks are new products. These products are in growing market but have low market share. They need huge promotion because they need awareness and to inform to target customer. These products need to increase their market share quickly or they become dogs. So, they need huge investment to grab market share. Rupali Bank’s question marks products are-RMPS, ATM Card, RDBS, RTBS.
Ø BCG Dogs:
Dogs are in low growth markets and have low market share. Dogs should be avoided and minimize because they generate loss for the organization. Rupali Bank’s dogs product is-DPS which offer 15% interest .
The Value Chain
A company’s value chain identifies the primary activities that create customer value and related support activities. The value chain of the banking sector is given bellows:
1. Marketing :
Ø Branding of product “easy credit®”
Ø Independently from corporate identity of Norisbank
Ø Registered trademark: valuable and rare
2. Sales:
Ø Effectively leveraging product via different sales channels
Ø Norisbank is able to invest 87% of all funds easy credit
3. Products/Transactions:
Ø Fully automated processing of consumer credit
Ø Average processing-time reduced from 128 to 35 minutes
Market Analysis:
The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm.
David A. Aaker outlined the following dimensions of a market analysis in Banking sector . They are as follows:
• Market size (current and future)
• Market growth rate
• Market profitability
• Industry cost structure
• Distribution channels
• Market trends
• Key success factors
Ø Market Size
The size of the market can be evaluated based on present sales and on potential sales if the use of the product were expanded. The following are some information sources for determining market size:
• government data
• trade associations
• financial data from major players
• customer surveys
From Above information we find that RBL using sements Variables-income groups lower to upper, social class-all class, urban, village, geographic expansion.
Ø Target Customer:
Target Customer of RBL-all groups of customer. They provide mass service all ranges of people because its government Bank.
Ø Market Positioning:
Through market positioning map , we find that RBL market positioning In the middle of the map. That’s means, RBL make position in the mind of customer as a traditional banking with better servicesr.
Financial Ratio Analysis of Rupali bank LTd:
Financial ratio (or accounting ratio) is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to compare the strengths and weaknesses in various companies. If shares in a company are traded in a financial market, the market price of the shares is used in certain financial ratios.
Sources of data for financial ratios:
Values used in calculating financial ratios are taken from the balance sheet, income statement, statement of cash flows or the statement of retained earnings of rupali bank limited. These comprise the firm's "accounting statements" or financial statements. The statements' data is based on the accounting method and accounting standards used by the book.
Among the dozens of financial ratios available, we've chosen 30 measurements that are the most relevant to the investing process and organized them into six main categories as per the following list:
Liquidity Ratio:
Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets (or, those that can be easily converted to cash), its short-term liabilities.
In general, the greater the coverage of liquid assets to short-term liabilities the better as it is a clear signal that a company can pay its debts that are coming due in the near future and still fund its ongoing operations. On the other hand, a company with a low coverage rate should raise a red flag for investors as it may be a sign that the company will have difficulty meeting running its operations, as well as meeting its obligations.
Current Ratio: The current ratio is a popular financial ratio used to test a company's liquidity (also referred to as its current or working capital position) by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-term assets (cash, cash equivalents, marketable securities, receivables and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). In theory, the higher the current ratio, the better.
Ø Formula:
Ø To find out the Current ratio of Rupali Bank Ltd we have identified the following elements.
| | 2010 (Tk) |
| Cash | 1458862759 |
| Cash equivalent | 6083778114 |
| Money at call | 3200000000 |
| Current and other contingency account | 14276520569 |
| Bills Payable | 1296682408 |
| Borrowing from others bank | 269497245 |
7542640873
Components: Current Ratio= 1433317002
= 1.2 times
Its means that if Rupali bank experience financial difficulty, it would be able to pay its current liabilities 1.2 times.
Quick ratio: The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are more difficult to turn into cash. Therefore, a higher ratio means a more liquid current position.
Ø Formula:
 |
Ø Components:
5267239873
Quick ratio= 1433317002
= 3.6 times
Its means that if Rupali bank experience financial difficulty, it would be able to pay its current liabilities 3.6 times.
Profitability Indicator ratio:
ROA (Return on Asset): This ratio indicates how profitable a company is relative to its total assets. The return on assets (ROA) ratio illustrates how well management is employing the company's total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by comparing net income to average total assets, and is expressed as a percentage.
Formula:
Formula:
 |
Ø To find out the Return on Asset (ROA) of Rupali Bank Ltd we have identified the following elements.
| | 2010 (Tk) |
| Net Income | 600292013 |
| Average total asset | 297580259 |
600292013
Ø 
Components: Return on asset =
Components: Return on asset = 297580259
= 1.15%
= 1.15%
Return on equity Ratio (ROE): This ratio indicates how profitable a company is by comparing its net income to its average shareholders' equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. The higher the ratio percentage, the more efficient management is in utilizing its equity base and the better return is to investors.
Ø Formula:
 |
| |
Ø Components: Return on asset = 270\1315.15 (amount in core)
= 20.52% (before Tax and interest)
= 60.o3/1315.15 (amount in core)
= 4.24% (after tax and interest)
Debt Ratios:
Debt Ratio:
The debt ratio compares a company's total debt to its total assets, which is used to gain a general idea as to the amount of leverage being used by a company. A low percentage means that the company is less dependent on leverage, i.e., money borrowed from and/or owed to others. The lower the percentage, the less leverage a company is using and the stronger its equity position. In general, the higher the ratio, the more risk that company.
Ø Formula: 
Ø Components: Debt Ratio = 11028.30/12443.45 (amount in Core)
= 8.8%
Leverage ratio:
Leverage ratio that compares a company's total liabilities to its total shareholders' equity. This is a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed.
| | 201o (amount in core) |
| Interest income | 555.26 |
| Gross Profit | 208.88 |
| Operating Expense | 346.38 |
| EBIT | 244.68 |
| Interest | 102.11 |
Ø Degree of Operating Leverage (DOL):
| | 2010 |
| DOL | 2.11 |
Degree of Operating Leverage is the percentage change in operating income (EBIT) associated with a given percentage change in sales. DOL is concern with the upper portion of the Income Statement.
| Degree of Operating Leverage | DOL= | Gross Profit |
| EBIT |
Ø Degree of Financial Leverage (DFL):
| | 2010 |
| DFL | 1.05 |
Degree of Financial Leverage is the percentage change in earning available to common stockholders associated with a given percentage in earning before interests and taxes.
DFL is concerned with the lower part of the Income Statement. DFL indicates about the portion of fixed financial obligation exists in the firm’s operation.
| Degree of Financial Leverage= | DFL= | EBIT |
| EBIT-Interest |
Break-even Analysis:
An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point.
Total Fixed cost Ø Formula : Selling price-variable cost
Ø Components : 952.07/ (555.26-346.38) figure in core
= 4.55
Contingency Plan for RBL:
Contingency Planning is the development of alternative plans to be placed in effect if certain unexpected events occur. Rupali Bank has established itself as premier and efficient one in innovating new financial products and service and in grabbing the market in which it operating. Banking is a service -oriented marketing, its business profits depends on its service, quality. That is why the authority always should be aware about their service quality in order to get competitive advantage and to deliver quality and to be more fruitful to our economy. Because of traditional banking system , this bank faces huge competition in the market. They need some contingency planning which will help them to move forward in the competitive banking world.
· RBL is one of the largest public commercial bank in our country. Therefore, they can adopt ON LINE banking. In foreign exchange dept. it is required to communicate with foreign banks frequently and quickly. Data base networking is one of the most recent technologies to transfer from branch to branch or from branch to head office and vise versa. So It will help them to use this technology in Foreign Exchange Branch and others branches And provide quick service to customer.
· Branch modernization is effective way of solution to attract customer. So, RBL can update its brances and focus marketing mix to grab customer.
· The bankers need to be careful to finance international trade because they finance the people who satisfy 7 C 's(Character, Capacity, Credit Analysis, Capital, Collateral, Conditions, Compliance). So that, the bank does not fall in bad loss provision sated by BB. They can set up alternate and efficient planning for its.
· RBL can set up new HR policy like other Banks to get efficient officers.
Recommendations:
· From our research and analysis we got lot of result about the customers’ satisfaction of service quality of Rupali bank ltd. we identified that many of the respondents from my sample aware about the service quality of Banking activities. We have come up with some points, which can improve the efficiency as well as quality of the service. The points are as below:
· Rupali Bank ltd should be more commit to do something by a certain time. Because we found that most of the customers have given the disagreed opinion with the statement is when Rupali bank promises to do something by a certain time, it does so.
· Rupali Bank ltd should be more communicate with their customers when services will be performed. Because we found that most of the customers have given the disagreed opinion with the statement is Rupali Bank ltd keeps customers informed about when services will be performed.
· To inspire confidence in customer’s mind the employees of Rupali Bank ltd’ Behavior should be more effective. Because I found that most of the customers have given the disagreed opinion with the statement is the employees in Rupali Bank ltd’ behavior inspires confidence in customers.
· Rupali Bank ltd should be give more individual attention to their customers.Because customers think that they don’t get enough individual attention.
· To inspire and encourage the customers of Rupali Bank ltd should be use hi-tech equipments and enhance in to modern looking.
· Rupali bank ltd should be computerize all its functions and should provide online banking facility at all branches.
· Rupali Bank ltd should be more flexible in case of cheque book /delivery. Because we found that most of the customers were highly dissatisfied for the question is how satisfied are customers with the cheque book/delivery.
· Customers are always willing to get their service at a time. Rupali Bank ltd should be providing their service at a time. Because we found that most of the customers were dissatisfied for the question is how satisfied are customers with the time customers have to wait for a service at Rupali Bank ltd.
· Rupali Bank ltd’ branches should be make a friendly environment to their customers. Because we found that most of the customers were feel ignored when
· they were came in Rupali Banks’ branches to take services.
· Rupali bank ltd should be offer more facilities to the customers such as credit cards, visa cards, ATM booths etc.
· Rupali bank ltd need to give more emphasize on their service quality because survey shows customers are very much quality oriented in Banking than ever before.
· To retain their customers and make them loyal Rupali Bank ltd should be give some exclusive offering. It can be different types of loan like car loan, study loan etc and lower interest for loan, increase the interest rate for deposits.
· By considering the above recommendations the Rupali Bank can improve their service quality and satisfied their customers with effectively and efficiency and makes them loyal customers of Rupali bank ltd.
Conclusion:
Rupali Bank limited is the largest and biggest national Commercial Bank in Bangladesh
However, I have enjoyed my three months internship at RBL. There were some problems in case of preparing report. But I have tried at my level best to prepare my report effectively.
From the above analysis of information we can draw some key decision, Rupali Bank Limited have the opportunity and possibility to hold major market share for its quality, availability and company image. It can make itself market leader with proper utilization of its resources.
Bibliography & Appendix:
Ø Besley Scott & F. Brigham, Eugene
Ø Cole Robert, Misher Lon, "Consumer & Business Credit management, lltb Edition, McGraw-Hill Companies Inc. New York , USA
Ø Madura Jeff, (2006) "Financial Markets and Institution", 7th Edition, Thomson South-Western, 5191 Naptorp Boulvard, Mason , Ohio
Ø Philip Kotler [2004] "Principal of Marketing" 10th Edition. Delhi
Website:
Ø http://www.rupalibank.org
Graphical presentation of Key Financial Data:
1.Interest Income:
Year 2006-2010
2.Deposits:
Year 2006-2010
3.Deposits Mix:
4.Investment:
Year 2006-2010
5.Total Liabilities:
Year 2006-2010
6.Profit After Tax:
Year 2008-2010
7.Recovery Of Classified Loan:
8.Growth Rate Of Deposits:
