human resources management practices in bangladesh shilpa bank

Human Resources Management practices in Bangladesh Shilpa Bank

Chapter One IntroductionBACKGROUND OF THE STUDY

Any academic course of the study has a great value when it has practical application in the real life. Only a lot of theoretical knowledge will be little important unless it is applicable in the practical life. So we need proper application of our knowledge to get sonie benefit ftom our theoretical knowledge to make it more fruitful.That is why, after gaining theoretical knowledge, people apply these knowledge to the practical life.My internship is based on the Human Resources Management Practices of Banladesh Shilpa Bank(BSB).

As the level of industrial development increases in Bangladesh. BSB gives loan towards the advancement of various sectors for industrialization. It helps to manage all types of efforts from establishment to implement of its operation. There some accumulation of human capital and technological innovations w~ also facilitate the project implementation of its operations.

As a MBA student majoring of Human Resource management, I tried my level best to bring about all the HRM policies and practices of BSB.This internship programmed has given more realistic idea about the recruitment, promotion, welfare of the officers, leave, advantage, reward, treatment, and retirement policy of the BSB & finds out the variance of our theoretical knowledge.

1.2 OBJECTIVE OF STUDY

The objective of the proposed study is to find the reasons for loan default practices of BSB.

The following are the objectives of the study:

To learn the overall function of Bangladesh Shilpa Bank (BSB) for the contribution of industrialization of the country

To know about the consequences of HR practices of BSB. To develop knowledge about the systems approach to human resources

management. To get an idea about the systems approach to employee selection.

To acquire knowledge about the process of matching employee qualification with position requirements.

To know about orientation and socialization process for new employees.

To analyze special motivational techniques with particular emphasis on the quality of working life and job enrichment.

The weakness of the Human Resources of BSB. To recommend necessary steps for overcoming such problems of BSB.

1.3 METHODOLOGY OF THE STUDY

1.3.1 Sample Selection

The population sampled for the study was limited to the Bangladesh Shilpa Bank where I was assigned to perform the study.

1.3.2 Data Collections

In order to conduct the report, I have collected necessary information from two sources.a. Primary sources of information b. Secondary sources of information

a) Primary Sources of Information

Face to face conversation with the respective officers and Staff of BSB.

Oral interview of the responsible officers. Observation of department of BSB.

b) Secondary sources of information

Annual report of the BSB .:. Annual Budget of the BSB. A brief on BSB for chief officers and staff of BSB. Various document of the BSB .:. Relevant document's studies as provided by

the officers concerned. Extensive literature search on the basis of these documents of publication.

LIMITATIONS OF THE STUDYThis internship report was not easy to prepare. It has taken long time to get all the information properly I, the students of Department of Management Studies, just have completed our formal education stage. After completing the institutional experience, Practical performance in the formal stages become difficult. So in performing this report our lack of proper knowledge greatly influenced in this performance. Besides above, have to face some other limitations are:

Lack of availability of data Improper combination among various departments Time is a limitation that would mostly with stands a comprehensive study on the

topic selected. Up-to-date information were not available Don't give the data from their source document Unwilling to give information more because of extra harassment without their

responsibility

Being busy, also another reason of not giving more information They are in government employee so have no eagerness to supply more because of

extra hardness.Chapter TwoInstitutional Overview of BSB2.1 Establishment of BSBBangladesh Shilpa Bank (BSB) was established on October 31, 1972 under a statue, called the Bangladesh Shilpa Bank Order, 1972. The (BSB) Order, 1972 was amended subsequently by the Parliament to provide more operational autonomy to the management.MissionAccelerating the process of industrialization of the country by providing financial assistance and equity support.Institutional overviewEstablished October 31, 1972

Organization Head Office - Dhaka

Division - 5Department - 21Zonal Office - 3Branch Office -15Manpower -743

Capital Structure and Sources of Fund

Capital Structure Taka (in Million)

Authorized 2000

Paid Up 2000

Sources of Fund: Paid-up Capital Loan from Government of Bangladesh . Loan from Bangladesh Bank (Central Bank) . Different Loan Giving (Foreign) Agencies . Customers' Deposit

Ownership:Presently 100% ownership of the Bank belongs to the Government.2.2) Objective of BSBBangladesh Shilpa Bank (BSB) is the state owned Leading Development Financial Institution (DFI) of Bangladesh. 'Shilpa' means industry. BSB provides financial and technical assistance to broaden the private as well as public sector industrial base of the country. It prioritizes, especially, Export Oriented/Export Linkage industrial units, Efficient Import Substitution, Joint Ventures, Commercialization of local technology and promotion of agro-based industry. It assists the existing industries and rehabilitation of sick industrious to boost up the industrial development of the country in conformity with the industrial policy and financial reform program's of the government towards market economy.

2.3 Management of BSB

The overall policy formulation and the general direction of Banks operation vests in a board of directors appointed by the Government. This Board of Directors consists of 9(nine) members including the Chairman and the Managing Director. Non-Governments shareholders subscribing to the capital of the bank shall eventually elect 4 directors from amongst themselves. The Managing Directors is the chief executives of Bank.Board of Directors:Chairman Prof. Abu AhmedManaging Director Dr. Nazmul BariDirector Syed Abdul MuqtadirDirector MD. Mokbul HossainDirector Md. Nurul AminORGANIZATION STRUCTURE OF BSB

2.4 Functions of BSB

Extends long and medium term loan facilities in local and foreign currencies to industrial projects (both new and BMRE) in the private and public sectors as well as partnership & proprietorship concern.

Provides working capital loans to Industrial units.

Provides equity support by way of participation in the equity of the company in the form of underwriting and bridge finance to public limited companies.

Issues guarantees on behalf of borrowers for repayment of loan.

Extends commercial banking service along with deposit mobilization, forex business, L/C handling, forex remittances inland & outland.

Purchases and sells shares/securities for BSB and on behalf of customers as a member of Dhaka Stock Exchange (DSE) Ltd. and Chittagong Stock Exchange (CSE) Ltd. for capital market development and

Conducts project promotional activities along with preparation of various subsectoral study.

Involved in Capital market activities by way of under writing and extending bridge finance to public limited companies.

2.5 BSB’s Achievement At a Glance

2.6 Strength of BSB

Strength of BSB

As a prime DFI, it has a large number of qualified & experienced professionals. Structural set-up & business location is Strategic. BSB's assets position is quite satisfactory and BSB has requisite strength and opportunity to sustain the challenge of the market

economy.

Steps Taken to Gear-up the Bank's Activities

To make the bank a vibrant one, a pragmatic business programme is now under implementation. The main features of the plan are as under:-

Gear-up recovery through setting up of pragmatic recovery targets. Expansion of new area of investment. Cleaning of loan ledger with exit facilities. All out efforts for deposit mobilization. Undertake need-based training programme including computer training to all

officers & develop a computerized data-base system and Full computerization of bank's activities.

2.7 Business Programmes and policies

A. Industrial Credit programmes

1. Long term Finance (upto 1 0 Years & upto 10 crores) 2. Mediwn term Finance (upto 3 Years) 3. Short term Finance (upto 1 Year) (working capital) 4. Syndication Finance (upto 10 Years & more than 10 crores)

B. Commercial Banking Services 1. Maintaining all kinds of general banking accounts with one stop service for payment of

cheques.2. All kinds of Letter of Credit (L/C) opening with nominal commission (0.5% for 1st quarter

and 0.25% for subsequent quarter, not less than TK. 250.00).3. Issue of pay Order/Bank draft, DD/MT/TT4. Guarantee issue5. Selling and encashment of Bangladesh savings certificates (Sonchoy Pattra) and Prize

Bonds, etc.

C. EEF ProgrammeEEF (Equity Entrepreneurship Fund) is a equity support program sponsored by Bangladesh Bank (Central Bank) with a view to inspire the risky but potential sectors like:

1. Software Industry (for the projects costing not less than Taka 10.00 million).

2. Food Processing and Agro-based Industries (excepting the traditional subsectors like Rice I Flouer Mills,

3. Fishing Trawlers, Potato Cold Storages etc.) for the projects costing not less than taka 15.00 million.

Limit of equity support:1. Not more than 49% of equity or 33.33% of project cost for bank financed units.2. But up to 49% of project cost for borrowers' own financed units.Conditions for support:

1. IRR : 15% 2. ROI : 15% 3. DSCR : 1.50 : 1.00 4. Current Ratio : 1.50: 1.00 5. FACR : 1.50: 1.00

D. Share Trading Service

1. BSB Provides Trading facility and client service as well of DSE (Dhaka Stock Exchange) at its share trading cell of head office with nominal commission 237 members are presently enjoying this facility here. No fees required to be a member of BSB share trading cell.

2. CDS (Central Depository System) Service initiated in the cell for providing online Delivery of Shares in both way.

3. BSB's Chittagong Branch office has started to provide share trading service to Chittagong people.

E. Incentive Programme for Loan Recovery

I. Deferred payment of IDCP (Interest During Construction Period) after some moratorium period in installments.

2. Regular Loan Repaying Projects are honored with special certificates and BSB Crests. They are encouraged to take more loans / working capitals.

3. Problem Projects are given waiver of interest, rescheduling, block account facility for easy repayment of bank's loan.

F. Rehabilitation Programme

BSB puts realistic efforts to rehabilitate its sick, problem ridden and stuck up projects by ways of:

1) Rephasement and waiver of partial interest.2) Injection of additional funds.3) Balancing & Modernization of machinery.4) Product diversification.5) Strengthening or changing the project management.

6) Restructuring of Loan Accounts with transferring part of loans / interest in interest free block account(s).

G. Deposit Mobilization Programme Bank tries to meet its fund requirement from various sources like private, government and non-government organizations for lending and investment.Interest package on the Deposits is as under:

Deposit Type Rate (%)1 Savings Deposits 3.50

2 Fixed Deposits

3 to <6 months 5.256 to <12 months 5.50

1 to < 2 Years 6.00

2 to 3 Years 6.253> to 5 Years 6.25

3 Special Notice Deposits 2.00

Note: Effective from 01.01.2004, Subject to change from time to time.

2.8 OPERATIONAL ACTIVITIES OF THE BANKBangladesh Shilpa Bank being the prime Development Financing Institution continued its efforts in FY 2004-05 to make an effective contribution towards expansion of industrialization process of the country. It emphasized on long term lending to the viable new projects having comparative advantage, exports prospects, forward and backward linkages and local technology as well as material projects.

Profit and Loss:

The Bank has made a net profit of Tk. 219.62 million (after adjustment) during FY 2004-05 as against Tk.382.48 million (after adjustment) in the previous year. During FY 2004-05 the Bank earned a total income of Tk. 715.18 million which is less by an amount of Tk. 29.22 million of the previous year. One of the major reasons of declining bank's income is reduction of interest income.

Deposit Mobilisation:

During FY 2004-05, the Bank tried to meet its fund requirement for lending and investment ftom various sources. The Bank emphasized more on no cost and/or low cost deposit mobilization during the period. Total deposit was Tk. 614.91 million on June 30, 2005.

Loan Application Received:During the period under review, the Bank has accepted 83 new loan proposals after proper scrutiny.Sanction of term Loan:

The Bank kept on sanctioning of term loans during FY 2004-05. This year local currency loan of Tk 1009.37 million was sanctioned to 38 projects. Of the total sanctioned amount Tk 825.69 million was for 34 new projects, Tk.47.36 million was for 1 BMRE projects and an additional loan of Tk 136.32 million for 3 on-going projects.T able-l

Sanction of term loans(Million Taka)

Nature of project

2003-2004 2004-2005

Number of projects

Local Currency

Foreign currency

Total Number of Project

Local Currency

Foreign currency

Total

New 21 686.99 . 686.99 34 826 - 826

projects

Existing 3 165.56 - 165.56 1 47 - 47

project

(BMRE)

Additional Loan

3 136 - 136 3 136 - 136

Total 27 989 - 989 38 1009 - 1009

Commitment anti Disbursement of Term Loans:

During FY 2004-05, the Bank made commitment of Tk. 327.42 million in local currency to 22 projects. During the period, the Bank disbursed term loans of Tk 143.70 million in local currency to 23 projects as against the disbursement of Tk.296.96 million to 14 projects in the previous year. During the period the bank signed loan agreements with the sponsors of 10 sanctioned projects for an amount of Tk.300.95 million. During the last year the number of such projects was 15 and the loan amount was Tk.406.51 million only.Table-2Commitment and disbursement of term loans

2003-2004 2004-2005

Commitment/

Disbursement Number Local Foreign Total Number Local Foreign Total

of Currency currency of Currency currency

projects projects

Commitment 15 406.51 - 406.51 22 327 - 327

Disbursement 14 296.96 - 296.96 23 144 - 144

Sanction of Working Capital/Commercial Loan:During FY 2004-05, the Bank sanctioned working capital / commercial loans ofTk.14.50 million to 3 projects and disbursed TK.20.90 million to 5 projects. The Bank sanctioned Tk19 million to 5 project and disbursed Tk. 27.51 million to 5 projects in the last year.Other Investments:During FY 2004-05, the Bank invested Tk. 66.16 million to purchase shares from the primary and secondary market and the Bank earned an amount of Tk.14.47 million as capital gain, dividend and commission from share trading.

Projects implementation:

The Bank intensively monitors and supervises implementation of its financed projects.

During FY 2004-05, 7 projects commenced commercial production and 48 projects were under different stages of implementation. Of these, 11 projects were under construction, 10 projects completed loan agreement and 27 projects were awaiting documentation.Table-3Stages of implementation of projects

Position of projects

under implementation

2003-2004 2004-2005

Number of Project Number of Project

Started Commercial

Operation

4 7

Under construction 6 11

Documentation Completed 15 10

Awaiting Documentation 22 27

Loan portfolio:During FY 2004-05, loan liabilities of 41 projects were liquidated and 14 new projects were recorded in the bank's loan portfolio. As on 30th June, 2005 total number of projects in the

loan portfolio stood at 166 with a total outstanding of Tk 7441.91 million compared to that of 308projects having a total loan outstanding of Tk 13998.11 million in the proceeding year. Out of 166 projects in the portfolio, 60 were export-oriented, 72import-substituting and 34 service/other industries.

Sector Wise Position of Bank's Loan Portfolio As on 30-06-2005

Loan Recovered:

Total recovery target of loans during the FY 2004-05 was Tk 1400.00 million, against which actual cash recovery was Tk 1391.44 million constituting 99 per cent of the target.During the reporting year, outstanding loan of Tk. 259.48 million was regularised through rescheduling and rephasement of bad and doubtful loan accounts. The amounts regularised through cash recovery and rescheduling were Tk. 1124.20 million and Tk.149.40 million respectively in FY 2003-2004. During FY- 2004-2005, the recovery drive was affected to some extent among others, due to the ever memorable serious flood the country experienced. During 2004-2005 the percentage of classified loan stood at 41% with a 21% increase over the 62% of the preceding year. In other words, with a decrease of TK.6359.96 million, during the reporting year the classified amount of loan stood at Tk.3664.71 million from Tk. 10024.40 million in the previous year.

Table-5Recovery of Loans

Category of Loans Amount Recovered (million Tk)

2003-2004 2004-2005(A) Long Term Loans:Long Term projects Loans 915 1061

Bridge Loan 1 13

Staff Loan 35 34

Administered loan 105 98

Subtotal 1056 1196

(B)Short Term Loans:Working capital loans 27 45

Others (Debentures/shares/loans against 41 150

FOR)

Sub-total: 68 195

Grand Total (A+B): 1124 1391

Legal Actions Taken for Recovery of Loans:

The Bank initiates legal actions under the BSB Order, 1972 and Artho Rin Adalat Aien - 2003 against those defaulting and recalcitrant borrowers who fail to come up with any satisfactory proposal for settlement of Bank's dues after all normal recovery efforts have been exhausted.

In FY 2004-2005, legal notices were issued against 33 defaulting companies for recovery of Bank's dues while law suits were filed against 11 companies. Besides, 79 sale notices were published in the national dailies for auction. At the same time, efforts were made for settlement of disputes outside the court through negotiation. As a result, 23 litigated companies settled the disputes outside the court and assets. of 11 projects were sold through auction during the year.Table-6 Legal Actions TakenPosition of Projects Under Litigation 2003-2004 2004-2005

Number of Projects Number of ProjectsLegal Notice Issued 126 33

Filling of Suit 205 23

Cases Settled Outside the Court 6 11Sold through Auction 2 11

Loan Written Off:

During FY 2004-05, the Bank has written off a total loan liability of Tk.6155.28 million of 171 projects.

2.9 OTHER ACTIVITIES

Advisory services

Apart from identification and development of viable projects, the bank assists the interested entrepreneurs in selecting industrial projects having appropriate technology and potential market by providing advisory services and various information.

Training:

For upgrading the professional competence and skills of its employees, the Bank IS continually arranging training programs both at home and abroad. During FY 2004-2005, 452 officers were imparted in-house and local training. Besides, 1 officers were sent abroad for this purpose. During the period under report, 1 in-house Seminars was held on the topic “ Industrial policy - 2005”.

Computerization:

To improve the working efficiency and provide better customer service, computerization of Bank's activities is going on. In this regard, the Bank has undertaken a far-flung action plan.

Human Resources

As on June 30,2005 total staff position of the bank stood at 743, of which 446 were officers and 297 were supporting staff. This year, 35 officers & 68 supporting staff were promoted to the next higher position. During the period, 20 employees retired.

Annual General Meeting

The 19th Annual General Meeting of the shareholders of the bank was held on November 14,2005. The meeting, among others, approved the bank's audited accounts for FY 2004-05 was approved.

Chapter ThreeLiterature Review About HR Management PracticesOperations of Bangladesh shilpa bank:Bangladesh Shilpa Bank being the prime development financing institution continued its efforts in financial year 2005-2006 to make an effective contribution towards expansion of

industrialization process of the county. It emphasized on long term lending to the viable new projects having comparative advantage, export prospects, forward and backward linkages and local technology as well as raw material based projects. Top priority has been given for realization of its loans towards augmenting and recycling invest able funds and maintaining satisfactory loan portfolio for increasing profitability. With this end in view, the bank has undertaken some realistic steps towards rescheduling and liquidation of loan accounts of sick / closed /stuck-up projects with waiver facilities.BSB operates its activities through 21 departments. Out of them, we inspected 8 departments and tried to find out their details operations. These 8departments are as follows:

1. Loan Operation department (LOD).2. Document and machinery Procurement department.3. Project Implementation department (PID).4. Central Recovery department (CRD).5. Loan Accounting department (LAD).6. Project Rehabilitation department (PRD).7. Law department.8. Human Recourses Management Department.

3.1 Loan Operation Department (LOD):

LOD is the starting department of sanctioning loan to the sponsors and in this department various analysis are made for making decision whether the proposed projects are viable or not. Anyone who wants loan from BSB, he has to fulfill certain criteria and is shown in flow chart forms are as follows:

Human Resources Management Practices: A Case Of Bangladesh Shi/pa Bank.

Overview of Loan Operation Department

Start with BSQF

Submission of BSQF with Proposed projects.

Put up Appraisal Report

Evaluation of proposed project by a team member.

Passed process to PID dept, documentation and as well of other department

Ends of this department

FUllctiolls of Loall operatioll Departmellt

1) Issue of Loan Application form.2) Instruction &co-ordination to fill the form.

3) Receive form (BSQF) along with l/Sth of 1 % project estimated cost & other necessary documents. .4) Scrutiny ofloan application and other papers for evaluation ofloan proposal.5) Preparation of Appraisal Report.6) Granting /Rejecting loan application.7) Put-up loan appraisal is granted.8) Loan sanctioned with memorandum.9) Send information to PID, documentation &other department.

The function loan operation department (LOD) has been seen in a flowchart but now it is discussing elaborately one by one are as follows:

Human Resources Management Practices: A Case Of Bangladesh Shilpa Bank.Isslle of loan application fOTm:

This is given by the bank taking tk.l000 nom the sponsors of the proposed project where includes various aspects of the project are as follows:1. Proposed project;

*Name of the project.*Location of the project.*Line of the product.* Amount of the project. (a) Flc (b) Llc

2. Promotor's applicant;(a) Particulars of the promoters.(b) Particulars of the persons relates with promoters (i.e.) father, mother, spouse, son(s), daughter(s), brother(s) 3. Corporate set up (constitution);4. Management;5. Proposed product;6. Foreign ~ollaboration, if any;

7. Project land:(a) Water.(b) Power.(c) Gas.(d) Communication facilities.8. Building& civil works;9. Plant&machinery;10. Erection &installation;11. Utilities;12. Raw materials;13. Personnel;(a) Managerial &technical;(b) Administrative &staff;(c) Labor:

Human Resources Management Practices: A Case OJ Bangladesh Shilpa Bank.

* Skilled * Unskilled;(d) Cost of the project and means of finance, etc.

Instruction &co-operation to fill up the form:

The bank authority helps to the sponsors by providing necessary information required by the sponsors for filling up the form about the knowledge advice necessary by them. And then sponsors prepare feasibility report. Receive form Bangladesh Standard Questionnaire Form (BSQF):

After fulfilling this form by the sponsor's bank authority receive with lI80fl %project estimated cost other necessary documents complied by the sponsors.

Scrlltil,y of loan application ami other paper C}'aluation of loan proposetl:The bank officials then scrutinize all the papers with the given documents that mean feasibility report given by the sponsors. If all of this are correct then bank prepare appraisal report about given information.Preparation of appraisal report:The bank authority makes the report, which consists of three (3) types of analysis, is as follows:

(a) Technical analysis (b) Financial analysis.

(c) Economic analysis/market analysis.

T ecltnical analysis The technical engineer does this report whether the proposed project is viable or not. It gives indication about the project technically sound or not. Here engineer justifY several aspects are follows:

The project will be established which is suitable or not for the project whether the road, railway, riversides or airport etc that are precondition for establishing the project situates

Human Resources Management Practices: A Case Of Bangladesh Shilpa Bank.

this place. He also justifies the types of machines, capacity, types, production capacity etc and gives permission for that company.

Financial analysis:A financial analyst of the responsible officer makes financial analysis. He will examine prospect of the company about the demand of the product, marketability of the product, profitability of the product, supply and production capacity of the product to meet the market demand through various a financial analysis such as current ratio, profitability ratio, asset management ratio etc.Economic analysis/market analysis:

This analysis is also made by an economist or market analyst that is feasibility report of the product of related company. This study comprises of whether the product will be launched that's acceptability and other related economic matter of the product such as marketability of the product, profitability of the product, supply and production capacity of the product to meet the market demand.

Documentation Wing:There are three wings work together such as Documentation, Machinery procurement and Custody. After sanctioning of loan by loan operation department, it issues letter to documentation department, parties and concerned departments. The documentation department issues a letter to the parties to produce necessary documents. T~ documents are-

A) Memorandum of Association & Articles of association B) The land upon which the project will be established, document of this land must be produced.C) Receipts of Rent.D) Documentation fee.E) Mouja Map.F) The document that will be reveal that the land were not sold within preceding two Years.


Then a form is filled up. These documents are sent to lawers. If everything is ok it is transferred to Project Implementation Department.In the documentation process the borrowers are required to submit a copy of Memorandum of Association and articles of association. It is returned after the confirmation that Directorate of Registration of Joint Stock Company and firm have submitted it according to the rules the borrower company must it after the authorization.The following activities are performed during the time of documentation process.

A) The borrower company must submit necessary documents.B) Verification of documents by Documentation ant Machinery Department and Law Department.C) Preparation ofall documents of the borrower company director.D) Registration of first charge of Bank on projects properties.

Machinery procurement wing:Main function of machinery procurement department is to help the organization to acquire the machinery form local or foreign countries. For this purpose this dept. is related to the following functions:1. Machinery schedule preparation & selection tender schedule: For procurement of machinery, equipments & services the sponsor shall be fill up Tender schedule and Machinery list. This tender schedule depands on the amount of machinery.1.

For Amount of Machinery Less than $25000 $25000 to $500000 Above $ 500000

Types of Tender Required for Machine Shopping Tender Local Tender International Tender

2. Approval of Tender call: Sponsor invites the application for tender by publishing at least two newspapers (one English & another Bengali). Interested parties must submit tender papers by 2 envelops, one containing price offer and another containing Technical offer within 28 days after publishing the newspaper and then the tender will be opened at sponsor office and one agent of BSB is also present there. After that the sponsor open technical offer and evaluate this and then proposed to BSB which Tender offer they

Human Resources Ivlanagement Practices: A Case Of BQ11gladesh Shilpa Bank.preferred. Then Price offer is opened and take 1 % bid bond ITom participator of Tender so that not to increase the price. Finally the sponsor sends recommendation to BSB.3.Evaluation of tenders and recommendation : The recommendation which is provided by sponsor is placed to the Machinery Procurement Committee of BSB. This committee is comprised by the chairman ( the most senior Manager) and others general managers.They evaluate the tenders offer and the recommendations of Sponsor.4. Approval of procurement proposal by BSB & its transmittal to the borrowers.5. Submission offinal papers to BSB by the borrowers for opening ofletter of credit.

Project implementation department plays a crucial role for implementing the project. All sorts of monitoring activities performed by project implementation department, such as placement of machinery, technical and mechanical side, and acquiring new instruments.Sometime this department investigates the viability of project.

. To take necessary action in favor of sanctioned loan to be implemented.

. To take steps to approve project layout plan.

. Changes of project location, board of director of company and producible goods and product mix.. Take steps to disburse sanctioned loan step by step according to loan condition.. Properly collection and disbursement of entrepreneur fund.. Inter-organizational communication and support about bride loan against share underwriting of loan Holder Company.. Completion of construction of project according to construction timetable.. Proper monitoring of placement machinery in project area, monitoring to technical side and taking advice from instrument recruiting sub-division or department.. Re-auditing of cost at project completion stage, re-examining of excess loan application and processing of loan application and sanctioning, disbursement and conformation of uses.. Evaluation of project raw material receiving process, managing of cash flow according to loan agreement and giving necessary support


. Loan term reduce / accelerate and experimental production monitoring and supervtSlOn.

. Preparation of project completion report and sent if to loan recovery department and related sub-division of authority.. Determination of construction period, schedule preparation of loan repayment and taking necessary action for the same.

. Smoothly supervision and monitoring of project at implementation time.

. Taking insurance scheme against risk of assets of implementing project and conformation of deposit of insurance premium to the bank.. Time to time verification of latest rules and regulations about project completion and appropriate rule preparation.. Final construction reports preparation and at least two installment of loan repayment conformation after project completion.. Taking legal action, if loan receiver rare unable to repay loan's two installment after remind him / them.. Conversation of currency with local or foreign, if necessary.. Propose for project BMRE processing and implementation.. Re-evaluation of loan agreement after sanction, ifnecessary.. Project agreement / statement up-adaptation after disbursement of loan according to foreign loan giving authority's requisition.. In special circumstance, project construction re-scheduling after smooth examination, getting approval of proper authority and taking necessary steps for the same.. Completion of duties giver by six supreme authority of departmental chief.

Rehabilitation department mainly deals with sick industry. They find out the causes of sickness of a particular project. Some time they reschedule loan according to the capabilities of the project. If the project is not rehabilitable, send to the law department and finally sued against the project. The main activity of rehabilitation department is the following:

3.4 Project Rehabilitation department (PRD).

Human Resources Management Practices: A Case Of Bangladesh Shi/pa Bank.. To take action to rehabilitate sick project after appropriate investigation, if any department or branch office seems the project become sick.. Document transmission to law department about the project that would not under rehabilitation.. To take steps about rehabilitation document examination, recommendation preparation, implementation, schedule preparation and activation of plan. . Rehabilitation program preparation, management control and ensuring of management of the project that could mange by bank.· Take necessary action about production, marketing of product and loan repayment.. Managing and directing recommendation preparation about take over project.. Conformation project profitability of joint project.· After successful managing of project, duties give up to third party previous management.. Confonnation of insurance and updatation of insurance of project.. Other activities are given by departmental hard

3.5 Central Recovery department (CRD).

This department is engaged in collecting of loan amount with interest though there some sort of reschedule and rephasement. Normally the the collection of money installment is 6 or 4months This department inspects the project's condition whether there is any leakage.

If the borrower fails to repay the loan as the application of the borrower it is rescheduled and sometimes interest is exempted to the sponsor for reviving the projects.Sometimes the justifY that for various reason loan amount would not be paid because of various reasons such as:

.:. Due to change in technology.

.:. With the passage of time.

.:. Due to change in fashion of human beings.

.:. Due to change in demands of people.

.:. Tuff competition among the same type of companies.

Human Resources Management Practices: A Case Of /Janglade:>-h Shilpa /Jank.

Some of the reasons out of total problem, BSB rescheduled the undue amount .The bank always try to revive the project but if the authority think that this reasons is faulty of the sponsors then it is transferred to Law Department to take legal action. Sometimes, the project is transferred to project Rehabilitation Department to restore the project.Principles of Classification of Loan and Provisioning:For the purpose of classification all loans and advances are divided into 4 categories are as follows:

(a) Continuous Loan: The loan sanctioned and recovered without any repayment schedule but have an expiry date and maximum limit are called Continuous Loan.(b) Demand Loan: The loan, which must be repaid as the bank calls, is called demand loan.

(c) Term Loan: This loan is usually for long term for the project. If any loan is not repaid within the expirer date then it is called classified lioan. The classifications of this loan are as follows:o Substandard=6months>Continuous Loan»3 months o Doubtful=12months>continuous Loan»6months o Bad= continuous Loan> 12months.If any installment of any term loan is not repaid within a specific date it is treated installment default.Maintenance of Provision:1. On the basis of the equity of the loan the following provision are madea. Substandard20% b. Doubtful50% c. Bad Debt! 00% 2. On short term agricultural and micro-credit the following provision to be kepta) On all debts other than bad debt 5% b) On bad debt 100% Direction of Loan Rescheduling:

Human Resources Management Practices: A Case Of Bangladesh Shilpa Bank. 34

a) On the application of rescheduling the bank inspects reason of the loan default. If it is revealed that the borrower has spent the money in another way instead of specific investment than such application is not considered. In this case legal action to be taken.

b) The position of liabilities of the borrowers to other bank is to be considered.

C) The bank will analyze the cash flow statement, audited balance sheet, Income statement and other financial statement.

d) If necessary, the bank will inspect the business premises of the borrower to ensure that he will be able to repay the schedule loan

Rescheduling of term loan:a) A term loan may be rescheduled in 15%of expired installment or 1 O%of total due whichever is lower is paid in cash at first.b) A term loan is considered to be rescheduled for the second time if 30%of expired installment or20% of total due which is lower is paid in cash.c) To reschedule term of the term loan for the third time or more 50% of expired installment or30% of due whichever is lower must be paid in cash.

Demand and Continuous loan rescheduling

a) To reschedule the demand loan and continuous loan the rate of down payment are as follows-

Inspired Loan up to 1 crore 1 t05crore 5crore and above

Rate of Down Payment 15% 10% (but not less than 15 lacks) 5%( but not less than 1 0 lacks)

Human Resources Nlanagement Practices: A Case Of Bangladesh ~"hilpa Bank.

a) To reschedule the demand loan and continuous loan which has been converted into term loan 30%of the expired installment or 20%of total dues whichever is lower must be paid in cash.b) If loan is required to reschedule again 50%of expired installment or 30%of total dues must be paid in cash at first.

3.6 Central Accounts Department

Central accounts department particularly covers accounting side of the BSB. The other function ofBSB is the following:

. Keep records oflocal and foreign loan affairs of bank financed project.

. Loan classification / reclassification according to lean agreement prepared by loan operation, loan recovery, loan rehabilitation, zonal and branch and law department along with proper authority's approval.. Provide information about project loan accounts to loan holder, related bank authority, departments, zonal and branch office regularly.. To provide relevant accounting information to project entrepreneur, related bank department, zonal and branch office about recoverable loan installment, interest of loan etc.. Keeping loan recovery statistics, submission of statistics to inform management authority and other related department.

. Preparation of loan statement schedule and supply that information to various department and branch office is monthly and quarterly basis.. Make information about yearly loan statement and up dated loan statement to loan holder.. Loan account scheduling according to loan disbursement.. Keep all loan accounts and submit trial balance to central accounting department in monthly basis.. Re-evaluation of existing loan accounting method and correction, refurnishing and to update the methods.. Computerization of bank loan accounting and loan management . Other activities given by department chie£


Significant Accounting Policies of BSB

. General policies: in preparing the accounts, the going concern concept has been adopted and historical cost method used as the measurement base. Accrual accounting is used to match income and expenses.. Share capital: The authorized capital of the bank is two billion taka divided into two million shares of one thousand each of which sixty six percent is subscribed and paid-up by the government and the remaining thirty-four percent shares may be subscribed for by Bangladeshi national or by any financial institution, Bangladeshi or foreign.. Consolidation of accounts: A separate set of records for consolidating the trial balance of the branch offices & loan accounting department is maintained at the central accounts department -head office form which financial statements of the bank are drawn -up.. General reserve: Due to non-availability of net profit no reserve has been made during the year under audit.. Reserve for unforeseen losses: Due to non-availability of net profit no reserve has been made during the year under audit as per Para 20(e) chapter 8 of banks book of instruction.. Foreign currency transaction: Foreign currency balances of various accounts as on 30th June 2002 have been translated into taka at the rates prevailing on the balance sheet date.. Fixed assets: Fixed assets are stated at cost less depreciation. Depreciation is being charged on fixed assets other than motor vehicles on diminishing balance method while depreciation on motor vehicles is being charged on straight-line method. Rates of depreciation ranging from 2.5% on building I premises, Type writers to 20% on Motor vehicles, Furniture & Fixture 10% and electric I computer 20% and any circular prescribed by the Bangladesh ~ on its BCD circular no dated 7 the April 1977 and as allowed by the taxation authority.

Human Resources Afanagement Proctices : A Case Of Bangladesh Shilpa Bank.

Significant Accounting Policies of BSB

. General policies: in preparing the accounts, the going concern concept has been adopted and historical cost method used as the measurement base. Accrual accounting is used to match income and expenses.

. Share capital: The authorized capital of the bank is two billion taka divided into two million shares of one thousand each of which sixty six percent is subscribed and paid-up by the government and the remaining thirty-four percent shares may be subscribed for by Bangladeshi national or by any financial institution, Bangladeshi or foreign.. Consolidation of accounts: A separate set of records for consolidating the trial balance of the branch offices & loan accounting department is maintained at the central accounts department -head office form which financial statements of the bank are drawn -up.· General reserve: Due to non-availability of net profit no reserve has been made during the year under audit.. Reserve for unforeseen losses: Due to non-availability of net profit no reserve has been made during the year under audit as per Para 20( e) chapter 8 of banks book of instruction.. Foreign currency transaction: Foreign currency balances of various accounts as on 30th June 2002 have been translated into taka at the rates prevailing on the balance sheet date.. Fixed assets: Fixed assets are stated at cost less depreciation. Depreciation is being charged on fixed assets other than motor vehicles on diminishing balance method while depreciation on motor vehicles is being charged on straight-line method. Rates of depreciation ranging nom 2.5% on building / premises, Type writers to 20% on Motor vehicles, Furniture & Fixture 10% and electric I computer 20% and any circular prescribed by the Bangladesh b~ on its BCD circular no dated 7 the April 1977 and as allowed by the taxation authority.

Human Resources Afanagement Practices: A Case Of Bangladesh Shilpa Bank.

3.7 Loan Accounting Department

This department is usually involved in accounting of all types of loan related accounts that is given to the sponsors. Here both local and foreign currencies loans are included.Some sort of exemption, rephasement, rescheduling are made by the bank that also the concerned of this department.Here considerable matter is that bank gives opportunity to the sponsor's during the construction period called Interest During Construction Period (IDCP). This interest is payable with various installment that is designed by the bank authority. There is no further interest upon this amount of interest. So this department centrally maintains all loan accounts of the projects of the bank. There are 4 sections, which performs the operation of the department.

4 sections are:

Not due section

Overdue section

Rephasement section

General and policy sectionNot due section:The Branch Officer usually fixed the time schedule to be paid by the sponsors. Not due means the amount not yet due. Quarterlylhalf7half yearly installment and installment and

charge and transferred it to. Amount Due section. The rate of interest is fixed by the prevailing interest at the time of execution of loan discount. Foreign currency installment and interest will full as foreign currency loan agreement as per contract of overseas donor agency.

In case of foreign currency loanA) Exchange Fluctuation Absorption Schedule (EF AS) is employed. Interest rate is fixed at particular rate giving exchange premium In this case fluctuation of foreign currency is not affected in installment and interest.

Human Resources Management Practices: A Case OJ Bangladesh Shi/pa Bank.

B) In EF AS is not available installment fall at foreign currency and converted into conversion rate ftom time to time circulated by Bangladesh Bank.

This department calculafes all types of benefits, fixing interest rate as per regulation of BSB. Particularly, IDCP's period calculation and interest rate is usually ftom 9 to 12%. The Loan operation department makes primarily time payment disbursement schedule but also by request of higher authority it is rescheduled by this department.

If the sponsor makes the payment in right time then will get rebate. That means, all ledgers are maintained by this department. Rebate percentage is usually 10%. But in failing the installment, no rebate will be given. And the entry will be as follows:

Amount due to loan alc Interest on loan alc Installment amount

Dr Cr CrOverdue section:This section records the overdue amount. i.e. installment and interest is not paid/cleared in time is overdue. Main function of this section is maintaining balance of the sponsor's accounts. In a word called Balance Confirmation Certificate (BCC).In a brief way, the function of this section are as follows:a) Making balance confirmation certificate.b) Giving the advice to the lender.c) Charging interest in installment basis (monthly/quarterly/halfyearly/yearly)

If the sponsor fails to pay any installment then it is called classified loan. It is classified loan. It is in 3 types are as follows:

(a) Substandard-Here all operations are normal but interest is considered as suspense.(b) Doubtful- Here also all operations are normal but interest is considered as suspense.

Human Resources Management Practices,' A Case Of Bangladesh Shilpa Bank.

(c )Bad-If the operations are continued 24months but not paid installment then the activities to be closed and closed this operation and sent to the court.Then the entry will be-

Amount due to loan alc Installment amount Interest suspense alc

Rep/tasement section:This section makes reschedule of term loan. That is the sponsor don't give loan and interest amount in various reason but prospects is high, the authority decided to make rephasement of payment schedule through this section. So they're some problem faced by the concerned officer. For example, if the project is over 20 year's ago with original amount and interest may be doubled or more so the calculation is very hard and tough that is schedule preparation is in problem.

Human Resources Management Practices: A Case Of Bangladesh Shi/pa Bank.General and policy section:This section performs the following activities:a) Preparing the monthly statement b) Monthly recovery statement c) Monthly Disbursement Schedule.d) Making entry all the transaction as per daily statement received from branch officer.e) Lists of balances not due and amount Sent to head office and Branch office.f) Preparing distribution of work among the officers and staff as specific guidelines ofthe authorities.

Human Resources Management Practices: A Case OJ Bangladesh Shi/pa Bank.

3.8 - Law'Depa_lj~en..t If the Shilpa Bank fails to recover its loan in the normal way, it must undertaken alternative action and file case in the court. The causes which Shilpa Bank files cases are as follows-

(a) Recovery case - Section 33;(b)Finance Loan case - Section5(a) (c) Certificate Case' - Section 35 (d) Bankruptcy Case - Section 9{ 1) (e)Case ifcheck is not cashed (Petition Case) -Section 138 (f)Case ifmachinery of project is transformed ttom the project without permission Section 37 (g) Case if fulse properties are mortgaged -Section 47.

Recovery Case: Case is filled with court of District Judge or Sub Judge the concerned company and it's director such case filed according to Bangladesh Shilpa Bank Ordinance 1972 section 33. Finance Loan Case:Such case is filled against the concerned company and its directors to recover the is due.Certificate Case:This case is filled against the default company and its director according to Public Demand Recovery Act 1997.

Insobency Case:

Bankruptcy case can be filled if at least tk 5 lacks are due. This. case if filled according to insolvency Act 1997.Case if check is not cas/led:This case is filled in any check is dishonored. It is done according to the Negotiable Instrument Act, 1994.

Case if mortgage machinery is transferred ftom the project rite. These cases are filled BSB Ordinance 1972 under section 37.Process of deposing civil case (Recovery, certificate and insolvency).

A. Preliminary stage B. Pre-trial stage C. Trial stage D. Post trial stage

Finance Artherin Adalot-2003:To recover the loan of financial institution, the government has announces finance loan Act 1990.

Power of Finance Loan Court:All case related to finance loan must be filed with finance loan court. Provided that if the financial institution is established by any specific and if there every specific producer to recover the loan, it must be maintained. .Rules in case of notice:The notice of these case must be published in Bengali and English dailies if anyone claims that no notice has been published than the document must be produced.Decision of the court:


No question will arise about the rules, order and decision.Appeal: Section 7:Anyone can appeal against the decision of the court by depositing50% of the money declared by the court to High court.Installment of Loan:Section8:The court can order the business to repay the loan within one year. But it can be more than one year and interest will be charged on the amoWlt declared to be repaid.

Insolvency Act,1997:As a developing country, various aspects of Bangladesh have changing day by day. For this reason Finance Loan act more effective, necessity has arisen to form Insolvency Act.Sometimes to recover loan from the borrower, it is not possible for the court because it takes a long process and t,he borrower must be declare insolvent. To stimulate the process Insolvency Act 1997 was formed. This Act specifies how a man should be declared insolvent and the asset should be distributed among the creditor. Moreover, this Act also specifiesI) To protect the debtors 2) To protect the interest of the creditor The following person will be considered to be insolvent:

(A) Inhabitant of Bangladesh or Head Office ofthe business is situated in Bangladesh.

(B)He had been living in Bangladesh for one preceding year or he had workplace in Bangladesh.(C) Generally the business is continuing through representative.

Bangladesh Shilpa Bank Ordinance 1972:Bangladesh Shilpa Bank (BSB) was entrusted to grant loan and recover it. The procedure of loan recovery has been has been discussed as follows-

Subsection 32:BSB can recover the loan before it has become due if it deems that the loan should be recovered immediately. The following reasons are available-

Human Resources Management Practices: A Case Of Bangladesh Shi/pa Bank.o In any wrong information is promised in application form.o If any agreement made by the borrower is not abide by.o If it is deemed that the borrower s will not able to repay the loan.o If the mortgage properties is not according to specific caution of Bank or if the property security is not deposited to the bank.o Ifany mortgage is transferred from the project without the permission of the bank.o Ifthere is any change in the management without the permission of the bank.o If the borrower company cannot provide any satisfactory answer or cannot produce any document required by the bank.o For ant other reason for which the interest of the bank must be protected

Subsection33:Under this subsection the bank attach through court any mortgage asset or any personal asset of the borrower to recover the money.

Subsection34:If any borrower company fails to pay any installment of the bank has the right to seize the property and can recover the money through the sale without any interfere of the court.

Subsection35 Under this subsection the bank can make an application to General Certificate Officer against the Borrower Company and its director following public demand recovery Act 1913.After the certificate case the court will give 15 days time and a notice describing the installment to repay the loan.

The management function of staffing, also called management or human resources management, includes activities such as recruiting, interviewing, testing, selecting, orienting, training, developing, caring for evaluating, rewarding, disciplining, promoting, transferring, demoting, and dismissing employees as well as managing union relations.

Chapter FourHuman Resource Management Practices in BSB

4.1 History of Human Resource Management Department (HRM) of BSB

The department of human resource management was not same name as now.

Modernizing the structure of the administration of the bank and Development the skill of

the human resources and reducing operating cost of the organization. The directors 24th

meeting was conducted on 23rd April 1996. In this meeting, rename of the

Administration department as "Administration and Human Resource Department" and

Department of labor as 'department of Human resources Management'.


4.2 Sections department:There are five sections in this department

Section Activities 1. General administrative - Fixing principles relating to human & policy section, Resource activities/position, - Fixing principles relating to organization.-Fixing principles relating to delegation of power, -Activities relating to trade union, -Send statements relating to delegation of power.2. Management section -Provide employment policy, -Provide transfer policy, -Provide promotion policy, -Fixing pay scale.-Fixing annual increment policy.3. Disciplinary section -Mitigates the complaint against personnel 4. Welfare section -Provide scholarship policy, -Assist the helpless personne~ -Provide retirement benefit.5. Leave & medical section -Provide medical facility & allowances.-Provide vacation opportunities, -Provide conveyance facility & allowances;-Provide house rent allowances..-Provide cloths benefits.


4.3 Function of tile Human Resources Management Dept

1. To assess and collect compatible personnel who will be perfect for the banlc 2. To prepare and implement policy about human resources and related activities.3. To take program and implement for developing human resources.4. To control the administration of human resources of the bank.5. To make appointment, promotion and appraising skill of officer and stuff.6. To make service rules, correction, expansion, administration rules, sub rules, orders, notice etc for controlling and stuff.7. To give scholarship to the brilliant student of the university for appointing and finding skilled officer.8. To give general scholarship to the brilliant and daughter of stuff.

9. To communicate with trade union scrutinizing their demands, open discuss Developing the relationship with administration proper implementation of labor law.10. T'" give loan for house building, by cycle. Motorcycle, and ensure their proper utilization.II.To assess and grant retirement facilities at the time of retirement.12. To give medical facilities to the stuff.13.To maintain relationship with retired or dead stuffs and their families to know their condition.14. To maintain and grant leaves without regular leave.15. To coordinate and evaluate the branch and regional stuff activities.16. To step and implement for opening new branch office.17. To maintain relationship with government and other institution 18. To control the activities the staff of the banks and take proper. Step to implement computer technology.19 . To perform the activities assigned by the departmental head.


4.4 Summary of manpower of the bank As on 15.04.2005

A. Job-wise distribution SLNo. Name of the post Nos.1 Managing Director 1 2 General Manager 6 3 Deputy General Manager 15 4 Asstt. General Manage' 28 5 Senior Manager 62 6 Manager 116 7 Senior officer, LibrarianlMedical Officer, Sr. Security Officer 117 Total Class -I 34 Total Class - II 104 Total Officer 149 STAFF:Class-III 194 Class"- IV 98 Total 292 Grand Total : 741 B. Profession-wise distribution:SL No. Profession Nos.I PhD (Economics) 1 2 PhD (MIS) 1 3 Professional Accountant (ICMA, FCA, etc.) 4 4 Engineers(Civil, Mechanical, Electrical, Chemical, Naval, 46 Metallurgical) 5 IT Expert (From Engineers, MBAs, other professionals having 15 PGD/Diploma in Computer Science, Software Engg, Computer


Applicatio~ etc.) 6 MBAs 9 7 Economist 56 8 Accounting 42 9 Finance 3 10 Marketing & Management 12 11 Law Officer 10 12 Statistician 13 13 Others (Inclusive of Applied Physics, Applied Chemistry and 529 other University Graduates and Post-Graduates) Grand Total: 741

Size of the DR Department.

Types No. of Employees Officers 24 Staffs 17 Total 41

HR Dept. personnel by educational qualification

Level of Academic Officer Staffs qualification Doctorate Post Graduate 10 Graduate 2 7 H.S.C 12 10


4.5 Human Resource Policies & Practices

Effective Human Resources of an organization depend on the specified rules and policies which provide a guideline to solve any problem arise in this department. For this reason the policy should be prepare in such a way so that it can be used for long term as well as flexible for changing environment. HRD of Bangladesh Shilpa Bank has the written Human Resource Policies ( Bangladesh Shilpa Bank, Service rules- 1991) contained the followings.

A. Recruitment and Selection B.Training & Development Performance Appraisal Motivation of Employee Leave & Vacation

Discipline Retirement4.5A. Recruitment & Selection

Job Analysis

Job analysis is the first step of selecting and recruiting the employee of an organization. It is the procedure through which you determine the duties of these positions and the characteristics of the people who should be hired for them. The analysis produces infonnation on job requirements, which is then used for developing job descriptions( what the job entails and job specifications( what kind of people to hire for the job). A supervisor or HR specialist or HR specialist normally aims to collect one or more of the following types of infonnation via the hob analysis.

Work activities.Infonnation is usually collected on the actual work activities performed, such as cleaning, sellIDg, teaching, or painting. Such a list may also indicate how, why, and when the worker performs each activity.Human Resources Management Practices: A Case Of Bangladesh Shilpa Bank.

Human behaver Information on human behaviors like sensing, communicating, decision making, and writing may also be collected. Included here would be information regarding human fob demands such as lifting weights, walking ling distances, and so on.Machines, tools, equipment, and work aids used.Included here would be information regarding products made, materials processed, knowledge dealt with or applied (such as finance or law), and services rendered (such as counseling or repairing).

Performance standards Information is also collected regarding performance standards (in terms of quantity, quality, or speed for each job duty, for instance) by which an employee in this job will be evaluated.

Job context Included here is information about such matters as .physical working conditions, work schedule, and the organizational and social context - for instance, in terms of the number of people with whom the employee would normally have to interact. Also included here might be information regarding incentives for doing the job.

Uses of job Analysis information

Job Evaluation Wage and Salary

Training Requirements

Recruiting and selection Decisions

Performance Appraisal

Figure 5.5-1


~ Recommendation ofDept. & Mgt.~ Discipline wise ~ Not necessary skilled, they may be fresher.

Forecast of Human Resource Demand

BSB has been approved to appoint maximum 1372 employees. The necessity of human resources identified by the departmental Head and Approved by the Top management.But the recruitment is fully depends on the Govt. decision.

The Recruitment and Selection Process

The recruiting and selecting process can best be envisioned as a series of hurdles, illustrated in Figure 5.1-1. Specifically, recruiting and selecting require:1. Doing employment planning and forecasting to determine the duties of the positions to be filled.2. Building a pool of candidates for these jobs by recruiting internal or external candidates.3. Having the applicants fill out application forms and perhaps undergo an initial screening interview.4. Utilizing various selection techniques such as tests, background investigations, and physical exams to identify viable job candidates. .5. Sending to the supervisor responsible for the job one or more viable job candidates.6. Having the candidate(s) go through one or more selection interviews with the supervisor and other relevant parties for the purpose of finally determining to which candidate(s) an offer should be made.

Principles of Recruitment

The HRD follows the following principles.


Sources of Recruitment

As the part of modem business world the BSB uses the following sources of recruitment.

~ Advertisement in the Media ~ Advertisement in the Web ~ Advertisement in the Notice Board.

They prefer printed media as the recruitment source to circulate the news of employment.

Recruitment Tests & interviews

HRM are large number. They conduct the structured and Panel interview to select the eligible workforce. After this, specialist to ensure the physical ability conducts physical tests. The Board/MD BSB appoints consultants for selecting Employees.

-I.5-B . Training and Development

Any attempt to improve current or future management performance by imparting knowledge, changing attitudes, or increasing skills.

Managerial On - the job Training

· Job rotation A management training technique that involves moving a trainee from department to department to broaden his or her experience and identifY strong an weak points.

· Coaching/Understudy Approach In the coaching! understudy approach, the trainee works directly with the person he or she is to replace; the latter is in turn responsible for the trainee's for the trainee's coaching.Normally, the understudy relieves the executive of certain responsibilities, thereby giving the trainee a chance to learn the job.


· Junior board A method of providing middle-management trainees with experience in analyzing company problems by inviting them to sit on a junior board of directors and make reconunendations on overall company policies.

· Action Learning A training technique by which management trainees are allowed to work full time analyzing and solving problems in other departments.

Managenal Off - the job Training

· Case study method A development method in which the manager is presented with a written description of an organizational problem to diagnose and solve.

· Management game A development technique in which teams of managers compete with one another by making computerized decisions regarding realistic but simulated companies.

· University- Related Programs Colleges and universities provide three types of management development activities.

· Role Playing A training technique in which trainees act out the parts of people in a realiStic management situation.

· Behavior Modeling A training technique in which trainees are first which trainees are first shown good management techniques in a film, are then asked to play roles in a simulated situation, and are then given feedback and praise by their supervisor.

· In-house development centers A company-based method for exposing prospective managers to realistic exercises to develop improved management skills.


· Organizational development (00) A method aimed at changing the attitudes, values, and beliefs of employees so that employees can improve the organization.

· Survey feedback A method that involves surveying employees' attitudes and providing feedback to department managers so that problems can be solved by the managers and employees.

· Sensitivity training A method for increasing employees' insights into their own behavior by candid discussions in groups led by special trainers.

· Team building Improving the effectiveness of teams such as corporate officers and division directors through use of consultants, interviews, and team-building meetings.

The FiJ'e-Step Training and Development Process

1. Needs analysis

> Identify specific job performance skills needed to improve performance and Productivity.~ Analyze the audience to ensure that the program will be suited to their specific levels of education, experience, and skills, as well as their attitudes and personal motivations ~ Use research to develop specific measurable knowledge and performance objectives.

Human Resources Management Practices: A Case Of Bangladesh Shi/pa Bank.2. Instructional Design

}1> Gather instructional objective, methods, media description of and sequence of content, examples, exercises, and activities. Organize them into a curriculum that supports adult learning theory and provides a blueprint for program development.~ Make sure all materials, such as video scripts, leaders' guides, and participants' workbooks, complement each other, are written clearly, and blend into unified training geared directly to the stated learning objectives.

~ Carefully and professionally handle all program elements - whether reproduced on paper, film, or tape - to guarantee quality and effectiveness.

3. Validation }1> Introduced and validate the training before a representative audience. Base final revisions on pilot results to ensure program effectiveness.

4. Implementation }1> When applicable, boost success with a train-the trainer workshop that focuses on presentation knowledge and skills in addition to training content.

5. Evaluation and follow-up

Assess program success according to:

~ Reaction- Document the learners' immediate reactions to the training.

}1> Learning -Use feedback device or pre-and posttests to measures what learners have actually learned.

~ Behavior - Note supervisors' reactions to learners' performance following completion of the training. This is one way to measure the degree to which learners apply new skills and knowledge to their jobs. Results- Determine the level of improvement injob performance and assess needed maintenance.


Developing Employees by BSB

Internal Training

BSB has a training department to build the skilled manpower. One year probation period training for confirmation of the job. They use the Classroom Lecture and Conference techniques to develop the knowledge of employees. They provide training on the following areas-

~ Orientation ~ Computer Training ~ Appraisal ~ Auditing ~ Accounting

The training department evaluates the effectiveness of the training program through the perfonnance in tests.

The employees sometimes are sent to the outside for training. They are sent for the outside for training. They are sent to -~ BIBM

~ BMDC ~ICMAB

~ PATC

~ Computer Center.

Foreign Training No financial benefits are provided for foreign training except consideration at the time of promotion and study leave. Foreign training for employees of BSB managed by the Finance Ministry but Ministry has no training program or institute for its own. Scholarships for short-term courses are provided by the following organization.


~ World Bank ~ ADFIMI (Association of National Development Finance Institution in Member Countries ofthe Islamic Development Bank) ~ IDI (International Development Ireland Ltd) ~ FMO (Netherlands's Development Finance Company) etc.~ ADB (Asian Development Bank)

Banking Diploma

BSB encourages the employees to complete the Banking Diploma given by the IBB (Institute of Bankers of Bangladesh). They employee get the following benefits for his achievements of Banking Diploma.

~ Remuneration (cash) ~ Promotion Benefits ~ Study Leave ~ Increment

Higher Study by self-Finance No pecuniary encouragement relating to higher study available in BSB. But if someone achieves higher degree by self-finance he can get privilege at the time of promotion and study leave can be given.

4.S-C. Performance Appraisal

To appraise the following methods can be used

.:. Graphic rating scale A scale that lists a number of traits and a range of performance for each. The employee id then rated by identifying the score that best describes his or her level of performance for each trait.


.:. Alternation ranking method Ranking employees from best to worst on a particular trait.

.:. Paired comparison method Ranking employees by making a chart of all possible pairs of the employees for each trait and indicating which is the better employee of the pair.

.:. Management by objectives (MBO) Involves setting specific measurable goals with each employee and then periodically reviewing the progress made.

Performance Evaluation by BSB Evaluation on BSB The performance is evaluated by the Departmental Head or immediate boss in quarterly for all employees. They evaluate Annually for permanent employees. They also depend on training Report.

Purpose of the performance Appraisal Appraisal of Performance serves following objectives-

~ Promotion ~ Transfer ~ Determination of Time Scale > To find out any training need of employees.

4.5D. Motivation of Employees

The following methods and techniques are used to motivate the employees.

~ Promotion ~ Financial Incentives ~ Job Rotation ~ Work Sharing


Benefits and services for the employees

};> House Rent A };> Leave with Pay (StafI) };> Children's education facility ~ Home furnishing Allowance (MD & GM) ~ House Loan ~ Sick Leave };> Maternity Leave };> Ordinary Leave

Several Types of Leave in BSB

~ Ordinary Leave (with full payment) ~ Leave on half pay ~ Advance Leave };> Leave without Pay };> Special disability Leave };> Study Leave ~ Quarantine Leave };> Matern;'" Leave ~ Casual Leave

Pay Scales

BSB has no pay scales for its own employees. It follows the pay structured of Bangladesh Govt.

Over Time

The mgt level or officers are not entitled to overtime. Only staffs overtime is determined According to per hour basic. No Allowances are provided for overtime.


Compensation PrinciplesThere is a Welfare Trust in BSB. The compensation is determined according to the nature of case. It does not exceed Tk. 25,000.Promotion PoliciesIt is done on the basis of -> ACR > Training Report » Qualification » Viva » SeniorityRegulations regarding promotion are enclosed with the appendix

Trade Union & Association

There are 2 Trade Union in BSB for 3rd and 4th class employees. The Name of Trade Unions and Associations are -

BSB Karmachary Union (Reg # 1016) BSB Employees Union (Reg # 2013) BSB Officers' Samity (Unregistered) Trade Unions bargains with Mgt. for greater job security and working conditions. They don't create pressure on workers to join Unions. There is a officer's Association for the welfare of officers.


Labor Dispute & Solutions

If the strike is legal and it is supported by federation of Labor Union the workers of BSB can join with strikes. If any dispute arises, it will be resolved by discussion between mgt.and Union's Leaders.

4.5E. Discipline

If anybody plays any role against the BSB, or Banking ,Rules or Govt. service rules, an inquiry committee will be formed. If the crime proves undoubtfully, the BOD will punish him or her. The punishment may be -

~ Held up increment ~ Held up Promotion ~ Demotion (Removed from Service) ~ Dismissal from Service

4.5F. Retirement BSB maintains the rules and regulation of govt. for retirement benefits employees. They approve 1 year leave for preparation of Retirement ( LPR). The pension will by calculated in the following way -

(a) At the time of Retirement:

Basic Salm:y x 80% 2

X 200

And

(b) Monthly:

Basic Salm:y x 80% 2

Up to the death of employee and after his death his wife will get during her whole life.

(c) One Time:Basic Salm:y x 80%. 2

X300Human Resources Management Practices: A Case Of Bangladesh Shilpa Bank.

4.6 BSB's culture

1. There is a less or more good relationship among the work force.2. Senior and junior and officer and staff does not strictly maintain their status.3. The office work place is like as their home.4. They treat the visitors as friendly.5. Some Officer are very busy some have no business.6. All workers do their work traditionally.7. The workers work when pressure is created. No body works spontaneously,

In the context of a developing economy like Bangladesh, where the need for formation of capital is pressing, where developments in the field of industrial and bank management are dynamic, and where financial crises accompanying pangs of economic growth are frequent, the challenges posed by HRM are of great importance: and, as a sequel, exploring the possibilities of the application of HRM becomes a very relevant field of inquiry and research.

4.7 Problem in Human Resources Management

.:. Absence of Motivation:There is a few chance of promotion. The workers are in the same position for a long time.There is no promotion for them. They work traditionally not take the job as a challenge.

.:. Lack of team speed:There is no team speed of the workforce. They work as usual. Sometime,. the important file and work are in freeze if any officer does not give importance on it.

.:. Lake of workforce:In BSB the authorized 3rd and 4th class workers number is 699 But actual workers are only 297.The vacant post is 402. As a result the lake of workforce, all the activities are


.:. Lack of Morality:

Some workers are morally weak. Sometime they do not perfonn their duty properly. They do work which they are not authorize in some cases.

.:. Lack of Moral teaching:

The human resources Management department recommends the training department only their regular work. But only regular work does not ensure the proper utilization of organizational researches. The moral learning is also necessary for ensuring their duties.

.:. No fresh worker:

About 10 years, there is no new appointment. As a result the few and old workers are transferred to one department to another department. The knowledge of the world is changeable. The old workers do their perfonnance according to the old model. So there is no radical change of the work. If the new ftesh workers are appointed, the face of the bank will be changed.

.:. Not follow service rules:

The Bank does not strictly follow service rules; many workers and officer come in office not due time. Few actions are taken for them.

.:. Political trade union:

The trade union of the BSB is politically elected. As a result the skill workers sometime deprive their promotion and facilities. Sometime only political. reason one worker in transferred from one department to another department.

Human Resources Management Practices: A Cose Of Bangladesh Shilpa Bank.

.:. No strong parallel business:

Some department workers are very busy. Some department workers are relaxed. They have no work. A key challenge facing organizations in the late 1990s is to continue to deliver sustained competitive advantage in the short term whilst at the same time preparing for longer-term success. Although the prime sources of competitive advantage in the past decades may have been access to financial resources or the use of technology, these are now viewed as necessary, but not sufficient. For many companies the sources of sustained competitive advantage lie not only in access to finance or capital, but also within the organization, in people and processes capable of delivering the customer delight or rapid innovation which will place them ahead of competitors.

Human Resources lvlanagemenl Practices: A Case Of Bangladesh Shilpa Bank.

Chapter Five

Findings and Recommendations

Findings

As a student of M.B.A Program, Department of Management Studies, Faculty of Business Studies, University of Dhaka; I have completed internship program. With reference to that I was referred to Bangladesh Shilpa Bank (BSB), & worked there near about two months at eight departments and finally one month I observed the functions of Hwnan resources Department of BSB under the supervision of my respectable teacher Dr. Nazmul karim Chowdhury.

During the internship period, I have learned the functions of banking activities, the strength and weaknesses of the bank and how the large number of employees of the bank are managed'by the Human Resources Department. As per my study, I have evaluated this function in two ways. Firstly I evaluate the overall objectives and functions of BSB and then the role of human resources department in this organization,

The following findings are obtained from the study of overall objectives and functions of BSB:

. The main aim ofBSB is to stimulate industrialization throughout the country.

. The nature of credit shows that it mainly grants term loan, working capital loan and term loan.. Sometimes inefficient allocations of resources haye created a huge amount of bad debt which introduced the bank as a losing concern.. There are some sick industries in the BSB.. Good Entrepreneur are not interested to take loan from this bank Because of lengthy procedure and long time (more than three months) involved in the appraisal of project.. Sometimes pressure group's involvement in sanctioning loan and most of them are showing result of sick project.. Lack of financial commitment on the part of the borrower, the result being the failure of mobilization of equity by them in future means they divert their equity in other purpose after getting the loan amount.

Human Resources AJanagement Practices: A Case Of Bangladesh Shilpa Bank.

. Lack of adequate, updated and accurate information ftom the management information department (MIS).. Inadequate attention is given to analyze risk and uncertainties associated with the projects.. Lack of co-ordination in exchange of transferring information among various banks.

. Adequate attention is given to social benefits.

. Unstable policy of the government due to political changes over time.

. If bank make the procedure of keeping up-to-date information but in some cases there some case of rescheduling the total procedure is reversed so it's high to maintain current and updated system of accounting.. Though BSB's problem in financial condition, Contribution of BSB is highest in the industrialization of Bangladesh and Contribution to the GDP is remarkable through industrialization process.

The following findings are obtained from the study of Human resources Management practices ofBSB :

To manage human being for performing the organization objectives is the most difficult task because human being are diversified among their behavior, perception and attitude and human resources department of an organization perform this difficult tasks. The success of the organization depends on the effective utilization of human resources and the strength of Human resources department. The strength ofHRD ofBSB are


. Bangladesh Shilpa Bank has some skill manpower such as Engineer, Economist, Business executives. Lowers and so forth. If BSB can use his personnel sufficiently, it will be profitable in future.. Maintaining good relationship with Borrowers or Sponsors.. Human Behavior is very nice.

Although there are few strength of Human Resource Department ofBSB, but it does not contribute significant role to the bank because of existence of the following problems:

. One important problem of BSB is that, it is a decentralized origination and each department is responsible for particular activities but they have lack of coordination to achieve the central objectives. I think rules and regulations are sufficient but problem and controversial area are continuing till now.. There is a few chance of promotion. The workers are in the same position lor a long time. There is no promotion for them. They work traditionally not take the job as a challenge.. There is no team speed of the workforce. They work as usual. Sometime, the important file and work are in freeze if any officer does not give importance on it.. In BSB the authorized 3rd and 4th class workers number is 699 But actual workers are only 297.The vacant post is 402. As a result the lake of workforce, all the activities are performed in delay. Some time the officers have to does the vacant ports work which ruin their important time.. Some workers are morally weak. Sometime they do not perform their duty properly. They do work which do they not authorn:e in some cases.. The human resources Management department recommends the training department only their regular work. But only regular work does not ensure the proper utilization of organizational researches. The moral learning is also necessary for ensuring their duties.. According to interview with a BSB's employee about 10 years, there is no new appointment. As a result. The few and old workers are transferred to one department to another department. The know/ledge of the world in changeable.The old workers do their performance according to the old model So there is no radical change of the work. If the new fresh workers are appointed, the face of the bank will be changed.. The Bank does not strictly follow service rules; many workers and officer come in office not due time. Few actions are taken for them.. The trade union of the BSB is politically elected. As a result the skill workers sometime deprive their promotion and facilities. Sometime only political reason one worker in transferred from department to ano~her department.. Some department workers are very busy. Some department workers are relaxed.They have no work.


Both primary secondary database of the BSB should be improved and strengthen.

Recommendations:On the basis of my findings, I would like to suggest the followings to mitigate their problems:

. Sanctioning loan to the sponsor's carefully through proper m3king feasibility report.

. Central Observation Committee (COC) can be established to analyses, evaluate and solute proper loan recovery.

. Political pressure should be in lower interference in sanctioning loan for establishment of the project.

. Experienced and motivated entrepreneur should be allowed for sanctioning the loan.

. While selecting 5 C's Le.(Character, capital, capacity, collateral and condition)must be considered.

. The project which is profitable should be identified and sanctioned loan to those projects.

. Computer system has already been installed but more internet facilities to be introduced.

. Preserving of documents of different departments to be kept in separately.

. The policy made for implementation to be made until project is completed.

. Mortgaged ofloan should be sufficient to r~cover the sanctioned money.

. Risk adjusted discount rate method, Program evaluation and reView technique (PERT) and probability analysis should be introduced.


A co-ordination cell should be established for sharing information among various institutions.

· More emphasis on the effect of a project to measure socio-economic cost and benefit (SCBA) should be taken into consideration.

· Responsibility should be established to all according to their involvement in appraisal of project.

· Market research institution should be established for proper market survey.

For effective Human Resources Management practices, the following issues should be considered by the respective authorities:

· Although we know BSB is a autonomous body of the organization but the employees capabilities are deteriorating for lack of proper working environment and unexpected political pressure. In some cases they are not able to work independently. So Govt. interfere should be reduced from this bank.

· Employees are not motivated because there is no motivational techniques and poor incentive benefit. So facilities should be enhanced and opportunity should be given as like Bangladesh Bank.

· Recruitment and selection policy of BSB are not appropriate because it is done by the govt. and no BSB' authorities involve to the selection process.Recruiting and selection process should be controlled by authorities of BSB.

· Training arrangement of BSB is insufficient. It is required to enhance arranging more training facilities. Training supervisor should be smart who can able to give dynamic and timely training to the employees.

· Evaluation the performance of employee is not appropriate because there is a possibility of biasness by the senior of particular dept. So independent body is required to evaluate the performance of employee.

· Here promotion of employee depends on the basis of employees seniority. As a result employees are not motivated to perform his or her activities very well. For this reason promotion should be given not only on the basis of seniority but also performance basis.

· There is another problem is that the managing director of BSB is changed frequently which creates problems to implement the long term policies. So Managing director should be appointed at least five years.

Conclusions

Bangladesh Shilpa Bank (BSB) is fully a govenunent organization. Their HR policies and practices are different from the private organization. It can play a very important in this respect, as it is the prime development financing institution of the country. It has a code of conduct for successful implementing HR policies for the employees and specific issues are highlighted about the Human Resources and different related aspects but it does not have any monitoring activities to find out whether the member of the management deal with employees according to their rules and regulations. I believe and hope that this report will offer a number of benefits to improve and update the Human Resources practice for its smooth operation and will cooperate in redesigning the system and atmosphere of the department. There is a standard Human Resources Practices in BSB because they have to maintain the rules and regulation of the Govt. have much control, so they practice the area of Human Resource in a unique way. So if this report can improve the existence condition of Human Resource Practice policies and is implemented, my little initiatives will get a breathed satisfaction.

BIBLIOGRAPHY

1. Prasanna Chandra, Project Planning Analysis Selection Implementation & Review, 5th Edition, Tata McGraw-Hill Publishing Company Limited. New Delhi.

2. Heinz Weihrich, Harold Koontz _ Managemnt, A global Perspective, 10th Edition. McGrow-Hill International Editions, ~anagemtn and organization Series.

3. Davis, Keith~ Human Behaviour at Work, 7th Edition.

4. Bangladesh Shilpa Bank, August, 1984. Manual of the Project Apraisal.

5. Bangladesh Shilpa Bank, 2004 Annual Report.

6. www.shilpabank.gov.bd 7. Manual for Human Resources Department ofBSB.

8. Bangladesh Shilpa Bank, Employee rules provision, 1991, Published by Bangladesh Gaggets.

human resources management practices in bangladesh shilpa bank

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