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AssignmentAssignment

MANAGEMENT PATTERNMANAGEMENT PATTERN

OFOF

ARAB BANGLADESH BANK LTDARAB BANGLADESH BANK LTD

Submitted toSubmitted to

Professor (Dr) Khondoker Bazlul Hoque

Professor & Chairman

Department of International Business

University of Dhaka

Submitted bySubmitted by

Minul Hasan Mohammad Arif

(ID#(ID# 80802067))

2nd Batch, EMBA Program2nd Batch, EMBA Program


University of Dhaka

Course-International Management

Course No- EIB 514

University of Dhak

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LETTER OF TRANSMITTAL

Aug 30,2010

Professor (Dr) Khondoker Bazlul Hoque

Professor & Chairman


University of Dhaka

SUB: SUBMISSION OF TERM PAPER ON MANAGEMENT PATTERN OF ARAB

BANGLADESH BANK LIMITED.

Dear Sir,

As instructed and part of our academic program under EMBA, I do hereby submit a Assignment

on Management Pattern of Arab Bangladesh Bank Limited for your kind review and necessary

reference. The Assignment has been prepared on the basis of guidelines and instructions as given

by you and the information, supporting documents as collected from the Bank as well as

practical observations of the Operation and Management of the Organization.

I have engaged my intense efforts to bring out this study report with the target of achieving

perfection but I am in a little doubt how far I have attained it.

I shall be highly obliged if you kindly accept my report.

Thanking you.

With best regards,

Minul Hasan Mohammad Arif

ID#ID# 80802067

Table of contents:

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Topic Pagenumber

Executive Summary

1. THE BANK AND ITS BRIEF HISTORY-------------------------------------------06

2. OBJEVTIVE, METHODOLOGY & LIMITATION OF THE STUDY---------07

2.1 OBJECTIVES OF THE STUDY------------------------------------------------------------07

2.2 METHODOLOGY----------------------------------------------------------------------------07

2.3 LIMITATIONS OF THE STUDY.---------------------------------------------------------07

3. MANAGEMENT------------------------------------------------------------------------08

3.1 THE HEAD OFFICE AND TOP MANAGEMENT OF THE BANK-----------------08

3.2 STRUCTURES AND ACTIVITIES OF DIFFERENT DIVISIONS------------------09

3.2.1 BUSINESS BANKING--------------------------------------------------------------------09

3.2.2 CONSUMER BANKING DIVISION---------------------------------------------------09

3.2.3 BANKING WING:MERCHANT--------------------------------------------------------10

3.2.4 TREASURY DIVISION-------------------------------------------------------------------10

3.2.5 ISLAMI BANKING------------------------------------------------------------------------11

3.2.6 OPERATION DIVISION------------------------------------------------------------------11

3.2.7 INTERNATIONAL DIVISION & TREASURY SUPPORT UNIT-----------------123. 2.8 FINANCIAL CONTROL DIVISION---------------------------------------------------12

3.2.9 HUMAN RESOURCES DIVISION-----------------------------------------------------13

3.2.10NTERNAL CONTROL & COMPLIANCES (ICC)----------------------------------14

3.3BRANCH OPERATION----------------------------------------------------------------------------15

3.4 POSITIONAL HIERARCHY OF THE BANK-------------------------------------------------17

4.RCOMMENDATION------------------------------------------------------------------18

5. CONCLUSION-------------------------------------------------------------------------20

BIBLIOGRAPHY----------------------------------------------------------------------21

ACKNOWLEDGEMENT

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This is the time to acknowledge the contribution of human efforts that have made it happened in

preparing the paper most of which were not directly involved or responsible to do so. They are, a

group of executives of Arab Bangladesh Bank Limited, especially present Head of Human

Resources Division, who has solely developed the present Organogram of the Bank revising the

previous one and who has extended her full support to the members of our team in preparing the

Term Paper.

A lot of professional like typist, steno, and office staffs who have contributed huge in the

assignment and my beloved classmates cordially and sincerely convey my gratitude and heartfelt

thanks to all of them and wishes their betterment in all respect in future.

EXECUTIVE SUMMARY

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This paper shows how ABBL has structured its Board of Directors, Top, Mid and Operational

Management and designed the Branches Organogram, operational relationship of the different

wings of the functions, action procedures comprising of planning, organizing, coordinating and

controlling of the wings with details diagrams.

It has also been tried to show the strategic planning and views of the Bank, operational planning

& execution process, organizational structures, recruitment and motivational policies of human

resources, coordinating and controlling criteria of the whole functions and operations of the

Financial Institution.

In the report, I have furnished the structure of Head office Management of the Bank and it is

observed that Span of its Head Office is Wide in nature and all the Divisions are separately

organized with adequate wings and structure. The Bank has been following the concept of Front

Office and Back Office as per Core Risks Management guidelines of Bangladesh Bank and

some of the Divisions at Head Office are considered as Front Office and others are classified as

Back Office based on the nature of their functions. The Branch operation of the Bank directly

controlled by Head Office and each Branch has its own Organogram and operates as per the

guidelines set by Head Office. In this Paper, Branch Organogram is shown in brief.

1. THE BANK AND ITS BRIEF HISTORY

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Arab Bangladesh Bank Limited is one of the first generation private commercial bank

incorporated in Bangladesh in 1981 as a public limited company under the Companies Act and

governed by the Banking Companies Act. The Bank went for public issue of its shares in 1983.

AB bank has 66 (Sixty Six) Branches all over Bangladesh including 01(One) Islami Banking

branch, 01(One) Overseas branch in Mumbai, India, and 02(Two) representative Offices in

Myanmar and London. The Bank has a subsidiary company, AB International Finance Ltd. in

Hong Kong. The Bank operates a Merchant Banking Wing.

A Chronicles on ABBL is furnished below:

Certificate of Incorporation December 31, 1981.

Commencement of Business February 27, 1982.

Opening of First Branch at Karwan Bazar, Dhaka April 12, 1982.

Opening of ABIFL a subsidiary in Hong Kong November 1995.

First Foreign Branch at Mumbai, India April 06, 1996.

Opening of Merchant Baking Wing November 02, 2002.

Opening of Islamic Banking Branch December 23, 2004.

PRESENT SHAREHOLDING PATTERN:

Sponsors and Public : 99.38%

Government : 00.62%

VISION:

To be the Trendsetter for innovative banking with Excellence & Perfection.

MISSION:

To be the best performing Bank in the country.

2. OBJEVTIVE, METHODOLOGY & LIMITATION OF THE STUDY

2.1 OBJECTIVES OF THE STUDY

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1. The Board of Directors.

The Board Secretariat & Share Department.

The Executive Committee

The Audit Committee

2. The Managing Director

3. The Management Committee (MANCOM)

4. The Asset Liability Committee (ALCO)

5. The HR Committee

6. The Head of Divisions at Head Office &

7. The Branch Management.

We have shown the structures of the organs of Management of the Bank in this Paper.

3.1 THE HEAD OFFICE AND TOP MANAGEMENT OF THE BANK:

3.2 STRUCTURES AND ACTIVITIES OF DIFFERENT DIVISIONS:

3.2.1 BUSINESS BANKING:

8

BUSINESS BANKING

DIVISION

THE BOARD OF DIRECTORS

AUDIT COMMITEXECUTIVE COMMITTEE

MANAGING DIRECTOR

CO. SECRETARIATE &

SHARE DEPT.

SHARIAH COUN

REGIONAL OFFICES

COMMITTEES

BUSS.

BNK

CON.

BNK

MERC.

BNK

TREASURY ISLMC.

BNK

OPRTN CRM ID &

TSUFCD HRD IC

B R A N C H O P E R A T I O N

ALCO CREDITMANCOM

SUBSIDIARIES, LIASON

OFFICES, FOREIGN BR.


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Business Banking Division is headed by a Senior Executive Vice President along-with a team of

executives who are assigned for searching of new avenues for booking of assets and liabilities

for the bank through Branches in home and abroad including research and development, market

intelligence in the banking industry of the country. Development of new products, analyzing,feasibility study and launching are the important activities of the division. The activities of the

division are reportable to the Managing Director on monthly basis and/or on requirement.

3.2.2 CONSUMER BANKING DIVISION:

Consumer Banking Division presently headed by a Vice President under direct supervision of

the Chief Operating Officer (COO) working with a group of officers engaged in product

development, sanctioning, monitoring and follow-up through the Branches and out-sourcing.

Based on annual allocation and guidelines and time-to-time review of the Board the Division

control the Consumer Credits of the Bank. Overall activities of the division are reportable to the

CEO on monthly basis and/or on requirement.

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CONSUMER

BANKING

DIVISION

PRODUCT

DEVELOPMENT

SALES TEAM

MANAGEMENT

BRANCH RETAIL

OPERATIONALT. DELIVERY

CHANNEL

CORPORATE SME SYNDICATION &

STRUCTURED

FINANCE

OVERSEAS

MARKETING

R & D


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3.2.3 BANKING WING:MERCHANT

The Bank has been running a Merchant Banking Wing successfully since 2002, headed by an

Executive Vice President which has been playing a remarkable and vital role in the Capital

Market of the Country with a group of professional - who are engaged in portfolio management,

issue management, underwriting and its customer services and the operation of the wing is

assisted by its back office Financial Control Division.

3.2.4 TREASURY DIVISION:

Treasury Division of the Bank is being operated by an Executive Vice President along-with a

team of professional operators working in Asset-liability management, FX dealing, pricing,

interest rate maintenance, and corporate dealing process. A committee supports the Treasury

Division namely Assets Liability Committee (ALCO) and the Head of the division is the

Member Secretary of ALCO. Its Back office, the Treasury Support Unit under International

Division (ID), monitors the activities of the division. The performance activities of the division

are reportable to the Managing Director and MANCOM.

3.2.5 ISLAMI BANKING:

10

MERCHANT BANKING

PORTFOLIO

MANAGEMENT

ISSUE

MANAGEMENT

UNDER

WRITING

CUSTOMER

SERVICES

ASSET-LIABILITY

MANAGEMENT (ALM)

FX

DEALING

CORPORATE

DEALING

ISLAMIC BANKING

ALCO

SHARIAH

COUNCIL

TREASURY

DIVISION


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International Division (ID)& Treasury Support Unit is being run by an Executive Vice President

along-with a group of executives which mainly engaged in foreign trade financing, Nostro

Accounts maintenance and reconciliation, and Correspondence banking. The Overseas Office,

Branch, Subsidiaries of the Bank directly controlled by the division as per the guidelines of the

Board of Directors and MANCOM under the close intimation to the Managing Director.

Monitoring of import, export, remittances, foreign correspondences, establishing of agency

arrangement with abroad partners etc are the main activities of the department which has to

report the MANCOM regularly. Additionally, the divisions act as the back office of the treasury

division and review each and every transaction to monitor its activities.

3. 2.8 FINANCIAL CONTROL DIVISION:

Financial Control Division is the central Back Office of the Bank, which is the manager of the

Banks Central Accounts. Headed by a qualified Professional Accountant who is designated as

Chief Financial Officer (CFO) and supported by a group of professionals. The division is

performing the jobs of maintaining Central Account, consolidation of Branch Accounts &

operational results & reconciliation, Budgeting & Monitoring of business activities of the

Branches and Service Centers, analyzing of variances, preparation of MIS & Returns for the

Board and the MANCOM, External Audit and Banks Portfolio Management. In addition to

above, it acts as Back office of the Merchant Banking Wing of the Bank. The division maintains

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CORRESPONDANCEBANKING

TREASURYSUPPORT

OVERSEASOPERATION

NOSTRORECONCILIATION

TRADE SERVIC

FINANCIAL CONTROL DIVISION

CENTRAL

ACCOUNTS

BRANCH ACCOUNTS

&RECONCILIATIONBUDGET &

MONITORING

MIS &

RETURNS

EXTERNAL

AUDIT

BANK

PORTFOLIO

M

SUP


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all the financial records of the Bank, finalize Annual Accounts, analyze and evaluate its

operational activities for the Board of Directors and External Audit and ultimately for the

Shareholders of the Bank. This is the custodian of banks assets and liabilities and sometimes it

act as fund manager of the Bank. It also act as Portfolio manager for routing banks investment.

3.2.9 HUMAN RESOURCES DIVISION:

Human Resources Division is the key wing of human resources management of the Bank. An

Executive Vice President professionally qualified in HR management heads the division and the

Managing Director who is assisted by HR Committee guides it. Determination of HR

requirement, planning, process of selection, in-house orientation & training of the newly

recruited employees, fixation of compensation package, posting etc are performed by the

division as per the policy of the Bank. Maintenance of personal records of the existingemployees, their transfer posting, revision of financial benefits, promotion and administrative

action are initiated from the division.. Compensation packages, bonus, annual increment,

promotion, long time retirement benefits and other incentives and motivational schemes for the

employees are lucrative at the Organization which enable it to retain experienced professionals

and manage the Bank successfully. The activities of the division are reportable to the Managing

Director and MANCOM.

3.2.10NTERNAL CONTROL & COMPLIANCES (ICC):

13

HUMAN RESOURCES

(HRD)

HR

COMMITTEE

HR

PROCUREMENT

REWARD & BENEFIT

MANAGEMENTINTERNAL

COMMUNICATI0ONPERSONNEL

SERVICES

OPERATION

AUDIT

CREDIT

INSPECTIONMONITORING &

SUPERVISION

ANTI-MONEY

LAUNDERING

TRAIN

ACAD

INTERNAL CONTROL & COMPLIANCES (ICC) DIVISION


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Internal Control & Compliance (ICC) is one of the most important Back Offices of the Bank,

which is being operated by a group of experienced professionals in bank management. The

department carries out normal operational audit with regular interval of the branches and various

departments/divisions of Head office. The activities of the department are reportable to the

Managing Director of Bank and in some cases, it has to report to the Audit Committee of the

Board of Directors of the Bank. ICC is the center of monitoring and controlling the operational

activities of the Bank which keeps a close eye on operation of the branches and different service

providing units as well as on the different divisions at the Head Office and they are authorized to

check, verify and reconcile any unusual variances and report to the CEO immediately along with

their observations and required remedial suggestions on the related issues.

3.3BRANCH OPERATION

14

BRANCH OPERATION

MANAGER


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Branch operation is the key banking activity of a financial institution of our country and the Bank is

operating 65(Sixty Five) Branches in home and abroad, which are situated in urban and rural areas of

the country. Responsibilities of Branch operation are solely depend on the Branch Manager who is

selected by the Managing Director through HR division and HR Committee. The Branch Managers are

designated from the officials of the Bank based on their skills, qualities and capabilities. The Manager

may be from the different rank of the bank hierarchy on the basis of the status of the branch.

Generally, responsibility of a larger branch is given to a senior executive as Branch Manger. The

Manager operates the Branch as per guidelines set by Head Office Management -who is assisted by a

Sub-Manager posted by HRD and he supervises all day-to-day operational activities. The Manager in

consultation with the Sub-Manager assigns the responsibilities and desks of the other employees on the

basis of their qualities and abilities. Usually a branch has a number of departments as shown above and

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SUB MANAGER

(MANAGER-OPERATION)

FRONT

DESK

GENERAL

BANKING

CREDIT

DEPARTMENT

FOREIGN EXCHANGE

DEPARTMENT

FINANCIAL

CONTROL

GEN

SER

RECEPTION/

INFORMATIO

ACCOUNT

OPENING

CASH OPERATION

& COUNTER SERV.

REMITTANCE

DEPOSIT

SCHEMES

CARDS/PERSON

AL BANKINGS

CR. SERVICES&

SANCTIONING

CONSUMER/RETAI

CREDIT

DOCU../DISBURS.

ADMN.MONIT.

& FOLLOW-UP

IMPORT

EXPORT

FOREIGN

REMITTANC

BR.CENTRAL

ACCOUNTS

MIS &

RETURNS

LOG

MA

&RE

ASSETS

MANAGMNT.

B

OPE

PERS

MA


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each department has an in-charge from the senior employees along with a number of support staff on

the basis of the workload. The operational and supervisory functions of the department are carried out

by the SubManger and the Manger act as the controlling, decisional and administrative body besides

acting as the Chief Executive of the respective branch. At the year-end, the Branch Manager evaluate

individual operational performances and development activities of the individual employees and

appraise in their Annual Appraisal Report in prescribed format to HRD and based on the rating

employees service records are designed at HRD. The Branch Manager remain reportable to the

divisional Heads and MANCOM at the Head Office of the bank beside reportable to the Managing

Director of the Institution directly.

3.4 POSITIONAL HIERARCHY OF THE BANK

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POSITIONAL HIERARCHY OF THE BANK

THE BOARD OF DIRECTORS

THE MANAGING DIRECTOR

DEPUTY MANAGING

DIRECTOR

SENIOR EXECUTIVE VICE

PRESIDENT (SEVP)

EXECUTIVE VICE PRESIDENT

EVP


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The structure as shown above is the present corporate positions of the employees of the Bank.

The Managing Director is the Chief Executive Officer (CEO) of the Bank who is appointed by

the Board of Directors as per statutory requirement of Bangladesh Bank in accordance with its

guidelines. The service contract, remuneration and other related conditions are fixed by the

Board of Directors. The Board also appoints the Deputy Managing Director. Presently the post

has kept vacant in the Bank. The Senior Executive Vice President, Executive Vice President are

appointed by the Managing Director and their service conditions are determined by the Board of

Directors. The Senior Vice President and other executives and officials are appointed by the

Managing Director and process of appointment and other service conditions are fixed by him in

consultation with the HR Committee under the guidelines given by the Board of Directors.

Usually, From Senior Assistant Vice President to above are considered as Executives and the

rest are considered Non-executive post. In addition to officials, the bank employs drivers,

messengers, attendants etc as per requirements who are called Subordinates. The financial

benefits, annual increments, refixation of salary with regular intervals, bonuses, retirement

benefits and other financial benefit schemes in different ranks are determined by the Managing

Director in consultation with the HR and Management Committees as per the guidelines of the

Board of Directors.

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SENIOR VICE PRESIDENT

(SVP)

VICE PRESIDENT (VP)

SENIOR ASSTT. VICEPRESIDENT SAVP

ASSTT. VICE PRESIDENT (AVP)

SENIOR PRINCIPAL OFFICER

(SPO)

PRINCIPAL OFFICER (PO)

SENIOR OFFICER (SO)

OFFICER

SUBORDINATES


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4.RCOMMENDATION

Arab Bangladesh Bank Limited is one of the first generation private banks in the country

management of which is tested over last two decades and as we have shown earlier pages, itsmanagement pattern is full of scientific approach. Although the above, our study and review

reveals some observations and variances in management of the bank and in our opinion,

appropriate addresses and attentions on the matters will able the bank to reach to the level of

more standard. Our observations and opinions are furnished below:

1. The numbers of Directors in the Board is limited within 08 (Eight), out of which one is

representing the GOB and one from the public shareholders and the rest from the

sponsors. The Board should be formed from different categories of the professionals and

number of members may be increased up to maximum of the legal framework to receive

diversified services and advises in bank operation.

2. The top management of the bank, especially the first layer of management is Wide in

nature and number, which may create the problems in managerial and decisional aspects

in the financial institution. The layer should be squeezed to Narrow span, which may

help to avoid such operational and decisional hassles.

3. The divisions of the Head Office may be reduced and the less important and small

divisions may be converted into departments under a similar nature of divisions to ensure

more effective and efficient control, operation and utilization of manpower.

4. Motivational activities and evaluation process of the manpower may be reviewed further

to create an effective atmosphere of retention of the skillful professionals and ensure

appropriate professional development in the institution in time.

5. The key result area of the bank is the branch operation, which needs more attention, and

it is necessary to create additional service centers for creation of diversified services and

earning portfolios.

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6. The Branch managers authority may be reviewed for allowing empowerment

opportunity, which may help to develop more services to the customers and besides

developing of more controlling criteria of their activities.

It is not our claim that the observations as above are the only remedial measures in smooth

operation of the Bank; additional steps may be also helpful to develop and accelerate the

operational and managerial efficiency of the comparatively large and traditional financial

institution.

5. CONCLUSION:

ARAB BANGLADESH BANK LIMITED is considered a dynamic, potential and

pacesetter private bank in the country that meantime, has created an ideal atmosphere and

working environment in this sector. The has provided a good number of professional in the

industry, who are running more than a dozen of financial institutions in the country with

success and it has been happening due to the tradition and professionalism in bank

management as set by the Institution during the last two decades.

During our study it has been observed that the bank has passed different nature of

management era in its life which all has set different dimension of bank management with

fruitful outcome. Present Board of Directors, Management team, operational staff, their

policies, operational and management process are considered more energetic, dynamic,

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modern, positive and scientific in its history and meantime the Bank has been accelerating

and accumulating the result of the new administration and management which is now

become an example on the management of private financial institutions.

BIBLIOGRAPHY

ATM Abdus Shahid, Professor, BIBM Management functions in Banks and

Motivation of the personnel an article Dr. Md. Mainul Islam & Dr. Abdul Awal Khan Fundamentals of

Management

AB Bank Annual Report-2007, 2008

Heinz Weihrich & Harold KoontzManagement, Eleventh Edition.

Bangladesh Banks web site

http://www.abbank.org

http://www.elsevier.com

http://www.managementjournals.com

http://www.trainingreference.co.uk http://www.jenison.co.uk

http://www.sellingcommunications.com

http://www.profilesinternational.com/SOL_Background_Checks.aspx

http://en.wikipedia.org/wiki/Recruitment

http://www.staffing-and-recruiting-essentials.com/Recruiting-

Employees.html

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http://www.abbank.org/http://www.elsevier.com/http://www.managementjournals.com/http://www.trainingreference.co.uk/http://www.jenison.co.uk/http://www.sellingcommunications.com/http://www.abbank.org/http://www.elsevier.com/http://www.managementjournals.com/http://www.trainingreference.co.uk/http://www.jenison.co.uk/http://www.sellingcommunications.com/


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