Marketing Aspect of General Banking Sector in Bangladesh: “A Study on Jamuna Bank Limited

Abstract

Modern Banks play an important part in promoting economic development of a country. Banks provide necessary funds for executing various programs in progress in the process of economic development. They collect savings of large masses of people scattered through out the country, which in the absence of banks would have remained ideal and unproductive. These scattered amounts are collected, pooled together and made available to commerce and industry for meeting the requirements.

Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation from 3rd June 2001. Jamuna Bank Limited is one of the most well known private in our country. It undertakes all type of banking transactions to support the development of trade and commerce in the country. Above all of their service they go through their objectives such as earning and maintaining CAMEL rating strong, establishing relationship banking, introducing fully automated systems, ensuring an adequate rate of return on investment, maintaining adequate liquidity to meet maturity obligations, pursuing an effective system of Management by transparency and accountability at all levels. As a part of fulfilling their objectives through their customer JBL offers the following accounts: Current Deposits, Savings Bank Deposits, Fixed Deposits, Short Term Deposits, Monthly Term Deposits, Any other deposits as may be approved/ advised by Head Office. In General Banking, Clearing department receives cheques, DD, P.O. etc from depositors attached with a deposit slip. The branches of the bank operate as independent accounting unit.

They submit statement of affairs and other prescribed returns direct to Head Office where these are consolidated in the form of a statement showing assets and liabilities of whole Bank as at the close of business on Thursday and at the last working day of each month. The system of transactions of the bank is essentially double entry system of book keeping. But for quick and accurate recording as well as for arriving at daily financial position specialized form of double entry system book keeping, named slip system under self balancing method is followed by the bank. The golden principle of debiting or crediting is the same as those of double entry system. In the bank, instead of recording transactions in a journal initially, these are directly recorded and posted in the ledger (computer) separating the debits and credits by slips or voucher system. Foreign exchange is an important department of Jamuna Bank Limited, which deals with import, export and foreign remittances. It bridges between importers and exporters.

This department is playing an important role in enhancing export earnings, which aids economic growth and in turn it helps for the economic development. On the other hand, it also helps to meet those goods and service, which are most demandable and not adequate in our country. Jamuna Bank’s performance in foreign trade department was quite satisfactory. The amount of total import was Tk.57705 million and the amount of total export was Tk.68844 million during the year 2012. The growth of import business was 39.1% while that in export, not harmonious though, was 15.6%. According to BPC statistic, import payments for petroleum product increased by 33.5% in FY2012 in BDT terms. A division of the increase was attributed to higher prices of petroleum products. Which increased by 21.3% in USD terms. Slowdown in export also helped to reduce pressure of import payments as a significant proportion of is directly related to export performance. At the same time, stringent policies of Bangladesh bank to restrict financing of import have also contributed to slowdown in import. The statistics of Bank’s foreign exchange perfectly reflects the overall picture of country’s Balance of Payments. The import payments exceed the inward remittance collected from the wage earners and export proceeds. Due to the shortfall in its own foreign exchange reserve, JBL has to depend on local market for collecting foreign currency in order to make the import payment.

One of the important operations of the bank is to support international trade through its foreign exchange department. .The foreign exchange department facilitates international trade through its various modes of services. It bridges between importer and exporters. The branches, eligible to participate in foreign exchange dealing, is called authorized dealer. It can remit foreign exchange from local country to foreign country. This department mainly deals in foreign currency. The business of foreign exchange is getting increasingly complex and intensely competitive.

This is the department that facilitates international trade payment using the banking channel as the medium of settlements. Besides, banks meet the other need of the people regarding foreign currency transactions since they are authorized to deal in foreign exchange with permission from central bank under foreign exchange regulation act. All exports and imports are executed through the intervention of Banks. Side by side they provide funded and non-funded credit facility in execution of international Trade. So, it is considered as an international department of the bank. Although the foreign exchange business widening day by day , but there are also some obstacles around it such as in sufficient presence of modern communication equipment, lack of enthusiastic scheme for export and importer, absence of attractive remuneration package and motivation for the employee, improper allocation of employee. But the maintain a good customer relationship management (CRM), online banking facilities has already provided by Jamuna Bank limited, which is very effective and time oriented strategy that leads JBl ahead. So it should concentrate on communication with the Negotiation Bank, Advising Bank, Reimbursing Bank the branches use Telex and SWIFT. As well as these media the Bank could use the Email, which Cheaper and faster than those media & to attract more Clients JBL has to create a new marketing strategy, which will increase total export –import business and long term training is required especially for foreign exchange officers.

In SWOT analysis that expended that business portfolio, retail banking and on line banking which create opportunity for the jamuna bank limited in order to accelerate the business growth whereas multinational banks and up coming foreign and private banks as well as default risk of all term loans and at low compensation package of the employees become significant threats to jamuna bank limited .The credit rating of the bank is also satisfactory which is compare with previous all year. To maintain and to hold the position and be perfect in this sector it will have keep more attention to the customer retention and development. Hence, banking is a service-oriented business. Its business profit depends on its service quality. That’s why the authority always should be aware about their service quality.