1.1
Introduction
Prime
Bank Limited is a private commercial bank i. It was
established on April 17, 1995. It is now one of the banks in Bangladesh which
follows international standards in Banking and Finance. Prime Bank was created
and commencement of business started on 17 April 1995. The sponsors are reputed
personalities in the field of trade and commerce and their stake ranges from
shipping to textile and finance to energy etc. Prime Bank offers all kinds of
Commercial Corporate and Personal Banking services covering all segments of
society. Diversification of products and services include Corporate Banking,
Retail Banking and Consumer Banking right from industry to agriculture, and
real estate to software. Prime Bank has been
launched by a group of successful entrepreneurs with recognized standing in the
society. The management of the Bank consists of a team led by senior bankers
with decades of experience in national and international markets. The senior
management team is ably supported by a group of professionals many of whom have
exposure in the international market.
The asset and liability growth has been
remarkable. Prime Bank has been actively participating in the local money
market as well as foreign currency market without exposing the Bank to vulnerable
positions. The Bank's investment in Treasury Bills and other securities went up
noticeably opening up opportunities for enhancing income in the context of a
regime of gradual interest rate decline. Prime Bank Limited started its service with a vision to serve people with modern and innovative banking products and services at affordable charge. Being parallel to the cutting edge technology the Bank is offering online banking with added delivery channels like ATM, Tele-banking, SMS and Net Banking. And as part of the bank's commitment to provide all modern and value added banking service in keeping with the very best standard in a globalize world.
1.2
Corporate Milestones
|
1.3 Pay-off line /
Slogan
Sailing
THROUGH SUCCESS
1.4 Vision
To be the best Private Commercial Bank in Bangladesh in terms of
efficiency, capital adequacy, asset quality, sound management and profitability
having strong liquidity.
1.5 Mission
·
To build Prime Bank Limited into an
efficient, market driven, customer focused institution with good corporate
governance structure.
·
To set high standards of integrity and bring total satisfaction
to our clients, shareholders and employees.
1.6 Goals
The
Goals that Prime Bank Limited pursued in order to ensure the achievement of its
vision and mission are as follows.
1.6.1
Sustainable growth
Synergies between new knowledge and human capital for
sustainable economic growth.
1.6.2
Capital stewardship
Preservation and enlargement of
multiple forms of capital; like intellectual, natural, financial,
organizational, social; all of which contribute to long term value creation
1.6.3
Accelerating financial inclusion
Accelerate progress towards financial
inclusion with technology like ATM,
mobile phone, smart card based banking services and renewable energy
generation projects especially in rural areas.
1.6.4
Differentiating Value Added Services
Strong focus on extremely
cost-efficient and green services through Internet banking, electronic fund
transfer, automated cheque clearing,
e-bank statement, SMS alert etc.
1.6.5
Green Banking
Quantification of in-house facilities
and energy consumption to promote paperless office and enhance energy
efficiency. Greater emphasis on green banking projects.
1.6.6
Leader in business
Create new dimension in the
syndication and structured financing. Grow with export. Well diversified
portfolio
1.7 Product and service
offered
1.7.1. Deposit
Accounts:
Prime Bank offer a wide range of deposit accounts catering to
the customers different needs which include-
- Saving Account
- Current Account
- Fixed term deposit
- Prime Bank Shanchaye plus
- Prime Bank Deposit Pension Scheme (DPS)
- Prime Bank Monthly Benefit Plus
- Prime Bank Triple Benefit Plus
- Prime Bank shanchaye koti poti
- Short term deposit
1.7.2. Consumer finance:
- Auto Loan
- House Finance
- Senior Citizen Support
- Unsecured Personal Loan
- Consumer Durable Loan
- Loan for Professionals
1.7.3.
Islamic Banking
1.7.3.1 Deposit
Products
• Al-Wadiah
Current Account (AWCA)
• Mudaraba
Savings Account (MSA)
• Mudaraba
Special Notice Deposit Account (MSNDA)
• Mudaraba
Term Deposit Account (MTDA) of different
Tenure
• Mudaraba
Hajj Savings Scheme (MHSS)
• Mudaraba
Deposit Pension Scheme (MDPS)
• Mudaraba
Monthly Profit Paying Deposit Scheme
(MMPPDS)
• Smart
Junior Saver (SJS)
1.7.3.2. Investment
Products
• Bai
Murabaha Muajjal
• Hire
Purchase Shirkatul Melk (HPSM)
• Musharaka
• Quard
against Accepted Bills
1.7.4. Credit Card
• MasterCard Local Credit Card
• VISA Dual Currency Credit Card
• VISA Local Credit Card
• VISA Butterfly Credit Card
• VISA Mini Credit Card
• VISA International Card against RFCD, RQ A/C
• Virtual Card
• SME Credit Card
• NBFI Card Cheque
• International Prepaid Hajj Card
1.7.5. Treasury
·
Money Market
• Overnight Call
• Repo and Reverse Repo
• Swap
• Sale and Purchase of Treasury Bill & Bond
• Term Placement
• Term Borrowing
1.7.6. Foreign Exchange Market
• Spot
• Forward
• Interbank Buy / Sale
1.7.7. Service Products
• ATM Services
• Remittance Service
• Locker Service
• Online Banking
• Internet Banking
• Phone Banking
• Mobile Banking
• Remote Banking (EBEK)
• SWIFT
• Centralized Trade Services
• Student File
• Travelers’ Cheque
1.7.8.
Off-shore Banking Unit (OBU) Products
• On-shore Bill Discounting through OBU
• Bill Discounting
• Capital Finance
• Working Capital Finance
• Trade Finance
• On-shore Export Bill Discounting
1.7.9. Capital Market Operation
• Brokerage Operation
• Margin Loan
2.1
Corporate Governance
Corporate
governance is a concept referring to the ideal mode of ensuring firm’s
accountability to its various stakeholders through a strict system of internal
controls and procedures. Since the responsibility of maintaining a good
corporate governance system lies on the board of directors, Board of Directors
of Prime Bank always
keeps line with the related rules & regulations of various regulatory
bodies. The corporate governance of Prime
Bank is of superior quality placing the
fairness, transparency, accountability and responsibility on its top most
priority. Our disclosures on status of compliance on BSEC and Bangladesh Bank
guidelines demonstrate strong compliance culture of the Bank. The details of
corporate governance practice of Prime
Bank are discussed in a separate segment.
Corporate
governance is the set of processes, customs, policies, laws, and institutions affecting the way an
organization (or company) is directed and administered. Corporate Governance
also includes relationships among the stakeholders involved and achievement of
the goals for which the organization is formed. The principal stakeholders of a
bank are depositors, shareholders, board, management, employees and borrowers.
Other stakeholders include suppliers, regulators, other banks, and the
community at large. Corporate governance is the acceptance by management of the
inalienable rights of shareholders as the true owners of the company and of
their own role as trustees on behalf of the shareholders. It is about
commitment to values, about ethical business conduct and about making a
distinction between personal & corporate funds in the management of a
company. Fairness, Transparency,
Accountability and Responsibility are the minimum standards of acceptable
corporate behavior.
Corporate
governance is also to ensure the accountability of certain individuals in an
organization through mechanisms that try to reduce or eliminate the
principal-agent conflict. A related discussion of corporate governance focuses
the system of economic efficiency with a strong emphasis on enhancement of
shareholders' value and welfare.
Since
its founding, Prime Bank
has actively been adhered to the principles of
sound corporate governance. In Prime Bank
, corporate governance means increasing the
stakeholders’ value by being efficient & professional to the organization,
transparent and accountable to the shareholders and responsible to the society
and the environment. The Board of Directors plays a key role in corporate
governance. It is their responsibility to endorse the organization’s strategy,
develop directional policy, appoint and supervise senior executives and to
ensure accountability of the organization to its owners and regulatory
authorities.
Prime
Bank’s
corporate governance structure encompasses the
following elements:
Board
size
Ownership
Structure
Family
Control
Audit
Committee
Independent
Non-executive
Director
2.2 Board size
The
number of member in the Board of Prime
Bank
is 19 as per the Bangladesh Bank’s guideline. Out
of the 19 members three members are the Independent Director. Thus, the bank
also complied with the Securities and Exchange Commission’s corporate
governance guidelines. Board members include persons of high caliber, with
academic and professional qualification in the field of banking industry and
other businesses. This gives the members of the Board the strength for effective
discharge of duties and responsibilities. The Board approves the bank’s
policies; budget and business plan; and reviews those on different intervals so
as to give directions as per changing economic and market environment. The
Board also reviews the policies an manuals of the various segments of
businesses in order t establish effective risk management in credit and other
key area of operations. For effective supervision the Board formed two
committees wit its members as per guidelines of Bangladesh Bank. The committees
are Executive Committee and Audit Committee.
It
seems from last five year that there is no big change in board of directors.
Compare to 2008 with 2009,there are some new member added and some of member
are not exists in Directors who was BOD in 2008. There is an alternative Director
(Mr. Md. Shirazul Islam) was added instead of Nafiz Shiqdar. It seems that form
2010, there are some changes.
We
observed that the size of BOD is same for last 5 (five ) years. The persons are
changed but the number of member remains same. The BOD of Prime Bank is very
strong and effective in running their business. As I observed their financial
record for last 5 years, it shows their efficiency and capability.
A
well structured BOD is the key to success in business and specially banking
sector it is very important. Because forecasting is very important for this
business and good and capable BOD can make the right decision in this case.
In
the following page, there are shown the BOD of Prime Bank.
2.3
Independent non-executive Director
As
part of good governance in the organization appointment of independent director
is considered as an important instrument.
Independent directors in the Board exert an independent view on the
policies and decisions of the Board and ensure that the policies and decisions
are for the best interest of the whole bank. Prime Bank has appointed three
independent directors in the Board. They are “Md. Maolana Mohammad Salauddin” and
renowned advisor Mr. Ziaur Hasan Shiddik
2.4
Ownership Structure
Prime
Bank Limited is one of the third generation private commercial banks (PCBs),
incorporated in Bangladesh in 1995 as a Public Limited Company under the
Companies Act 1994, and governed by the Banking Companies Act 1991. The Bank
went for public issue of its share in 1999 and its shares are listed with Dhaka
Stock Exchange Limited and Chittagong Stock Exchange Limited. No significant
changes have been taken place during the reporting period regarding size,
structure, ownership of Prime Bank.
Table: Share holding Structure
2.5
Family Control
Family
control is very common in those firm or organizations where the most of the
share holder are from same family. They got the power to influence the decision
and can also have the power to change the system and structure.
In
Prime Bank we observed that once there was family in BOD but later on they are
not seen in BOD. As per we study, we didn’t find anything that influence the
decision of BOD or other sector.
2.6
Audit Committee
The
Board of Prime Bank constituted the Audit Committee in January 2003 with the
objectives of establishing a structure of a complied and secured banking. The
Committee takes up responsibilities to supervise the management and control of
various risk factors coming up from banking operation, to strengthen the
internal control system and to act as a connecting force between internal and
external auditors in order to bring a disciplined banking operation. The
Committee reviews the financial reporting process, the system of internal
control and management, the audit process, compliance with laws and
regulations, and its own code of business conduct.
The
Audit Committee also examines the status of implementation of Bangladesh Bank
guidelines and bank’s own policies and manuals. The Audit Cell of the Board and
the Internal Audit team of the bank undertake various special audits as per
advice of the Audit Committee. Audit Committee meets with the external auditors
to discuss audit plan, the risk management processes and preparation of the
financial statements as per BAS and IAS.
The
presence of an audit committee significantly influences the magnitude of
corporate disclosure. The composition of audit committees with insiders and
outsiders is also an important factor in examining the level of disclosure.
Since 2008, the audit committee of Prime Bank kept vital role in order to make
the financial report correct and disclose in front of BOD.
The
structure of Board’s Audit committee as follows
Summary
To
bring superior quality of service in present banking sector, a group of esteemed
entrepreneurs led by the current chairman Md. Shirazul Islam Mollah, came up
with the dream idea of a bank that would be fully customer focused, technology
driven & will ensure excellence in execution in every sphere of banking.
Their brain child came to life as Prime Bank was born in February 2nd
1995, with the aim of contributing for the development of the economy. Now so
many things have changed & so many milestones have been achieved in this
long 18 years but Prime Bank has always been truthful to its mission of being
the technology driven innovative bank of Bangladesh. Prime Bank has associated Islamic Banking,
Off-shore Banking, brokerage services, SME financing & many more
specialized services with its core banking activities. To excel in this new era
of technologies triumph, Prime Bank has successfully introduced mobile banking,
cutting edge ICT, state of the art network solution, 24/7 ATM service &
many other e-products. To make the bank sustainable, keep the performance
consistent & overall improvement in each side, Prime Bank follows some
focused strategic issues in a Quantitative & Qualitative measures. It
maintains strong corporate governance
that helps to give an excellent brand image through financial performance &
other issues. It is importance to focus that the Prime Bank Limited’s Corporate
Governance is pretty much good enough and it helps to led the company staff to
do the right things and get better output and get a strong position over
competitor.
Recommendation
Prime
Bank limited is one of the top ranked banking organizations in Bangladesh. They
have skilled and dedicated people who are always try to develop their services
and make a better position in competition.
After reading the 5 years financial Report, I personally think Prime
Bank is doing best. But they have the capability to maintain the present’s
condition.
I
am suggesting for Prime Bank as,
Ø To
reach root level people with new and innovative concept
Ø Make
more effective deposit plan
Ø Give
more emphasize on general share holder
Ø Make
more clear Corporate Governance to the all share holder
Conclusion
It
has established an appropriate and effective internal control environment to
ensure that the Bank is managed and controlled in a sound and prudent manner. Prime
Bank’s corporate governance system requires its work force to be accountable,
transparent and ethically sound. The Bank always maintain transparency in
disclosures and as recognition Prime Bank was awarded several times for best
published accounts and corporate governance disclosures.
References:
- Annual Report of Prime Bank limited 2012
- Annual Report of Prime Bank limited 2011
- Annual Report of Prime Bank limited 2010
- Annual Report of Prime Bank limited 2009
- Annual Report of Prime Bank limited 2008
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