Working Report on Business Relationship And Support Project of BRAC Bank Limited.
1.0 Introduction:
1.1 Origin and Background of the Report:
For the fulfillment of earned theoretical knowledge, practical knowledge is very important. The main objective of BBA program is to develop smart executives. All courses of BBA program is practical oriented. So it is necessary to know the practical application of the theoretical knowledge, otherwise the objective will be worthless. Internship means to have practical training and experience of advanced student in the level of business field. Being a student of BBA in Independent University, Bangladesh had the opportunity to work at the BRAC Bank Limited from February 01, 2010 to April 30, 2010. This report will give a brief description of the nature of work have done during internship at the BRAC Bank LTD. That was assigned in a project under The Business Relationship and Support department. Have visited few unit offices, collected data to prepare report under the format which they have provided. Beside that also assigned in Operation help desk and Reconciliation.
1.2 Objective of the Report:
- To fulfill the requirement for the completion of BBA graduation.
- To build up the pillar for my career in near future.
- To get the real life experience in the banking sector and by doing that I want to expand the span of my practical knowledge.
- Finding out the working process of “Reconciliation Unit” performed by the unit members.
· To know the work process and monitoring system of Central Support, Operation Help Desk and Reconciliation.
· To find out the miss match within the transaction.
· To know whether SME loan borrowers are dully paying their installments or not.
· Bring down the number of unadjusted & un-reconciled entries at a controllable level.
1.3 Sources of Data/Information:
Reports have collected information/data from the following sources, which helped me to make this report.
- Primary Source: Primary sources include interviews and conversation with officers and executives of the bank of different divisions and department, and daily activity conducted at bank.
- Secondary Source: Secondary sources of information include annual report, general report, investment manual, websites, selected books, journals etc.
1.4Limitations:
It is observable that almost all studies have some boundaries. Banking sector is very sensitive and competitive by its nature. So, data of this report is not available and the interviewees might not disclose accurate facts and figures about interest rates and other activities. However faced the following problems during the study.
· Insufficiency of valuable data and information
· Lack of proper books, journals etc.
· Lack of time and resources.
· Carried out such a study for the first time, so inexperience is one of the main constraints of the study.
2.0 About the BRAC Bank Limited
2.1 Background of the Organization:
BRAC BANK Limited is a scheduled commercial bank in Bangladesh. It established in Bangladesh under the Banking Companies Act, 1991 and incorporated as private Limited company on 20 May 1999 under the Companies Act, 1994. The primary objective of the Bank is to provide all kinds of banking business. At the very beginning the Bank faced some legal obligation because the High Court of Bangladesh suspended activity of the Bank and it could fail to start its operations till 03 June 2001. Eventually, the judgment of the High Court was set aside and dismissed by the Appellate Division of the Supreme Court on 04 June 2001 and the Bank has started its operations from July 04, 2001. The Chairman of the Bank is Sir Mr. Fazle Hasan Abed. Now the Managing Director of the bank is Mr. Imran Rahman. The bank has made a reasonable progress due to its visionary management people and its appropriate policy and implementation.
2.2 Corporate Vision:
“Building a profitable and socially responsible financial institution focused on Markets and Business with growth potential, thereby assisting BRAC and stakeholders build a “just, enlightened, healthy, democratic and poverty free Bangladesh”.
2.3 Corporate Mission:
· Sustained growth in ‘small & Medium Enterprise’ sector
· Continuous low cost deposit growth with controlled growth in Retained Assets
· Corporate Assets to be funded through self-liability mobilization. Growth in Assets through Syndications and Investment in faster growing sectors
· Continuous endeavor to increase fee based income
· Keep our Debt Charges at 2% to maintain a steady profitable growth
· Achieve efficient synergies between the bank’s Branches, SME Unit Offices and BRAC field offices for delivery of Remittance and Bank’s other products and services
· Manage various lines of business in a fully controlled environment with no compromise on service quality
· Keep a diverse, far flung team fully motivated and driven towards materializing the bank’s vision into reality.
2.4 Departments of BRAC BANK Limited:
If the jobs are not organized considering their interrelationship and are not allocated in a particular department it would be very difficult to control the system effectively. If the departmentalization is not fitted for the particular works there would be haphazard situation and the performance of a particular department would not be measured. BRAC BANK Limited has does this work very well. Departments are as follows:
- Human Resources Department
- Financial Administration Department
- Central Support, operation help desk and reconciliation
- Credit Division
- SME Division
- Internal Control & Compliance Department
- Marketing & Product Development
- Impaired Asset Management
- Remittance Operation Department
- Treasury Front
- Treasury Back
- General Infrastructure Service
- Information Technology Department
- Customer Service Delivery
- Cards Division
- Call Center
- Cash Management
- Secured Remittance department
- Women Entrepreneur Cell
- Payment Service
3.0 Assigned Work Department At BRAC Bank:
| Business Relationships & Support |
| SME Banking Relationships & Support |
| Retail Banking Relationships & Support |
| Central Support & Operations Helpdesk |
| Wholesale Banking Relationships & Support |
| Customer Care Operations |
| Automated Clearing
& Collection |
| IBCM (Inter Branch Cash Management) |
| Reconciliations |
| AVP & Senior Reconciliation Manager |
| Manager Office A/C Monitoring & Reconciliation |
| Apu Datta
INTERN (IUB) |
| Niamat Hasan
INTERN (IUB) |
| Executives |
| Associates Manager Local NOSTO |
| Officer Local NOSTO |
| Associates Manager Foreign NOSTO |
| Officer Local NOSTO |
| Officer Foreign NOSTO |
| Officer Local NOSTO |
| Officer Local NOSTO |
| Officer Foreign NOSTO |
| INTERNS |
| Officer Local NOSTO |
| Officer Local NOSTO |
| Officer Foreign NOSTO |
Figure 01: Business Relationships and Support
4.0 SME Reconciliation Project:
4.1 Background:
A large portion of the SME (Small & Medium Enterprise) loan clients of this bank do not maintain any deposit accounts with BRAC Bank Limited (BBL). Disbursement and repayment of these loans are routed to BBL through several correspondent banks. They are- Pubali Bank Ltd., Agrani Bank Ltd., City Bank Ltd., Rupali Bank Ltd., Janata Bank Ltd., Bangladesh Krishi Bank, Sonali Bank Ltd., and National Bank Ltd.
4.2 SME Reconciliation Process:
After receiving loan installment from SME client CRO (Customer Relationship Officer) deposit installment amount in correspondent bank account every month and provide deposit slip & money receipt to the client. Besides, CRO sent SMS and advice to Banking Service department with deposit amount, Loan account number & correspondent bank code. Bank Services Department under Operations at Head Office (HO) passes the repayment entries through RSP Module against SMS/advice as per our centralized banking process. This is presently reconciled by Operations at Head Office through:
· Weekly matching of repayment entries based on field SMS with original bank Deposit Slips and Money Receipts (DS&MR) sent from SME Unit Offices; and
· Monthly cross checking of the BBL ledger entries with our correspondent bank account statements collected and sent by SME unit offices.
4.3 SME Reconciliation Project-Process Flowchart:
| IT provide unit wise existing loan A/C |
| Recon print loan GL and take photocopy of respective B/S |
| Distribute the loan GL and photocopy of B/S to different project team |
| Training session for visitor & Supervisor Conducted by Project manager |
| Audit UO as per the guideline |
| Check and found mismatch in Repayment schedule with MR, DS |
Yes
| Check and found mismatch in Repayment schedule with UO daily Register |
No
| Find out the reason and placed for management decision |
Yes
| Check and found mismatch in Repayment schedule with BS |
No
Yes
No
| Check and found mismatch in Repayment schedule with loan GL |
| Active to SBS for reverse/ Entry |
| Prepare the Report as per the project manager guideline |
Yes
Figure 02: SME Reconciliation Project-Process
4.4 SME Network Coverage:
Figure 03: SME Network of BRAC Bank Limited
5.1 Unit Office Visiting:
I have visited two unit offices one is Mauna Unit office, Sreepur, Gajipur. Another one is Shibaloy Unit office, Tepra Bazar, Shibaloy Manikgonj. In both place our nature of work was same but the amount of project file, nature of recovery file and findings was highly different. I worked with another two members in Mauna team with an officer Mr. Shahin Alom (group leader), an exicutive Mr. Selim Ahmed. The number of file was 507, recovery files 82. We spend 12 working days in Mauna. On the other hand in Shibaloy I worked 5 working days with an officer Mr. Abul Bashar. Total number of file was 321 with 30 recovery files. Works I have done in unit offices are given below:
· Received the copy of existing loan GL (General ledger) of that particular unit office and the copy of corresponding bank statements.
· Received the file and the Repayment schedule of the clients from the Unit office.
· Check and found the mismatch in Repayment schedule with the Money receipts (MR) and Deposit slip (DS).
· Check and found the mismatch in Repayment schedule with the unit office Daily register.
· Check and found the mismatch in Repayment schedule with the bank statement.
· Check and found mismatch in repayment schedule with loan GL (General Ledger)
5.2 Findings:
There were many mismatches what we had found during our task. Those are many in numbers but few in types.
· Account number not found/ miss match in MR, DS or BS
· BS (Bank Statement) not found but MR & DS found.
· BS found but MR (Money recites) & DS (Deposit slip) not found.
· MR, DS & BS found but there was no entry in GL (General ledger).
· Bank code mismatch between DS and MR or with GL.
· There was lots of doubles entries in GL.
After checking all files we had to prepare a project report of that particular unit office.
For prepare the report we had collected all the mismatches in a specific formatted paper. After unit office work I assigned in Head Office to prepare report. Project manager provided a format of the report in XL sheet. I was assigned here with project manager Shyamal Kumar Biswas and I had to report to the Muhammad Mahbubur Rahman, Manager (Office Account Monitoring & Reconciliation).
5.3 Preparing Project Report:
Mr. Iasin Khan trained me to prepare report. At the end of my internship I had prepared 65 units office audit report. It’s basically an excel sheet base work but some times I had to find some information using FINACAL. I had separate Password to use software as well as to work on computer. The works I have done for project report are given bellow:
· Take a new excel sheet and copy/pest the format of the project report and save.
· Find the A/C numbers of that particular unit office from “All no. of loan A/C” file. (Using formula).
· Find the name of that A/C no. from “All no. of loan Disbursement file”. (Using formula)
· Put all the entries and provide courses of actions.
· Have to re-check the reverse entry using FINACAL
· Have to re-check Bank Statement if necessary.
There were some limitations to prepare the project report. Information or findings were taken by other person and their hand writing was not so clear all time. Some times they used key word on the report paper; it was difficult to find out the meaning. Most of them were busy to visit another unit office so I had to solve those by phone and take extra time.
5.0 Operation helpdesk and Reconciliation:
I was also assigned in Operation helpdesk and Reconciliation section; those are actually a wing of the Business Relationships and Support department. Regular works of this section such as closing procedures of SME loan; give various information entries in computer and so on have done by me in this section.
6.1 Pre-closing manual activities:
The borrowers repay the loan as per repayment schedule. After repayment of loan borrower request the unit office/CRO to close his loan account. The unit office/CRO sends a SMS/Fax to the loan administration division requesting to close the loan account of the respective borrower. After receiving the request from the respective unit office/CRO, the loan administration division takes a paper print and takes necessary steps to close the account.
The loan account file of the respective borrower is brought from the archive. And the documents of file are checked with FINACAL record. It is require the permission of concerned authority to close the loan. If concerned authority approved the closing of the loan account then next initiatives are taken.The loan administration division checks the loan status in FINACAL. If there is any difference found with the SMS/Fax from unit office and FINACAL thendeposits sleeps are re-checked. Then the loan administration division calculates the total balance of the loan account (Ledger balance + buffer interest +Excise duty).Loan administration division sent an SMS to the concerned CRO informing the current balance of the requested loan account.
The concerned CRO send a final SMS to loan administration division informing that the respective borrower cleared all his liabilities regarding the loan. The loan administration division takes paper print of the SMS, check it and finally close the loan account.
6.2 Post closing manual activities:
Completing FINACAL activities, the loan administration re-checks all deposit sleeps of the loan account. If there is any error found then it is immediately resolved, otherwise the file sends to the archive for future requirements. The client may take repeat loan in future and then information from this file will help to approve and disburse loan, which will minimize risk. If the client asks to return security then the loan administration releases security completing following tasks:
· Documents photocopy before security release
· Closing certificate issuing and security release
6.3 FINACAL entries for loan closing:
After completing the manual activities for future requirement some information put into FINACAL and complete following tasks:
· Interest/provision charging & print voucher
· Charges collection & print voucher
· Final repayment entry & print voucher
· Final repayment entry checking
· Repayment voucher posting
After completing above mentioned tasks, the loan administration division finally closes the requested loan account in FINACAL.
6.4 Bank Statement Entries:
In theReconciliation process lots of data have to put in computer as well as have to update existing data. Such types of data entry were a very common job what I did in my internship.
7.0 Problems :
BRAC Bank is now obtaining number One position in SME sector and this bank is now contributing a lot to our economy with their banking operation since 2001. During my internship at Business Relations and Support Project, Operation helpdesk and Reconciliation unit I got some knowledge about their work. I have found few problems in during my internship period. The problems are-
- In unit office I have found that Head office never receive all Deposit Slips & Money Receipts (DR& MR) from SME field offices for verifying despite of circulars and reminders issued from time to time.
· Because those are not on time always there is approx 1.5 months reconciliation gap as CROs collect bank statements, write loan account numbers on it and then send to FIS, after which these are reconciled.
· Checking accuracy is also not guaranteed (as CROs provide both DS & MR and bank statements, including loan A/c details, all written manually).
- CROs often send multiple SMS against a single repayment; of them some are correct and others are not but the correct ones could not be passed for account showing credit balance.
- CROs also send SMS for full amount though repayments are made in 2/3 or more parts and that too in different dates.
- CROs also send messages against cheaque deposit by clients before it is cleared and booked in BBL’s correspondent bank accounts.
- During my preparing report time my work was intarupted due to bad networking system.
- More then 30 people works in Reconciliation & Operation helpdesk unit but only 7 people have FINACLE Id so worker have to share Id which is time consuming.
8.0 Recommendations:
To solve those problems management should have to increase the level of monitoring and verifications. This activity will discourage the malpractice of the employees. Time of the full Reconciliation should have to take under one month. Management should think another way of payment confirmation from CRO then SMS. All unit office can take under computerized make availability of send mail for payment confirmation. In Reconciliation and Operation help desk unit number of FINACA user have to increase. Besides that management should have to increase the awareness to maintenance money receipts and deposit slip and gear up knowledge about process and policy. This will help to discourage the malpractice of employees and create a sound system for the work.
9.0 Conclusion:
There are number of nationalized and foreign bank are operating their banking in Bangladesh. The BRAC BANK Limited is promising one among these Banks. The growing competition bound BRAC BANK Limited not onlyto compete with the other commercial bank but also with the public banks. In fact, BRAC bank promotes broad-based participation in the Bangladesh economy through the provision of high quality and modern banking services. SME loan is one of such quality product through which they offer the small and medium entrepreneurs a quality banking services and earn the maximum profit as well. The recovery rate of this loan is 97% which is extremely good in comparison to any other bank’s recovery rate. BRAC Bank has made it possible as the loan is given to experienced, small and medium entrepreneurs most of whom are middle aged, slightly educated and having moderate income and this class of people is very loyal. Although BRAC bank doing well but they have to remember that the now customers have more choice and many alternatives, so hold their position they have to comes up with new feature and products.
References:
1. Annual Report of BRAC Bank Limited (2009)
- www.bracbankbd.com
- Practical participation with the BRAC BANK Limited
Appendix:
1. Sample Audit Report (Appendix 1).
2. Sample Project Report- Final (Appendix 2).
3. Copy of Repayment schedule (Appendix 3).
4. Copy of Daily registers- DR (Appendix 4).
5. Copy of Money receipt and Deposit slip-MR & DS (Appendix 5).
6. Copy of Bank statement-BS (Appendix 6).