...Assignment: Chemical Banks – Allocation of Profits Submitted By: G.K. Shyam Arya, PGXPM - 11 Date: 12-Mar-2015, Thursday Assignment Questions & Solutions: 1. Describe the due bill controversy and how do you resolve it? Proposed Solution: a. Due Bills controversy: Introduction: Due Bills controversy is an example of intra department priorities that dilutes the focus away from organizational goals. Chemical Bank was the 6th largest U.S. commercial bank in 1983. Chemical Bank was organized into three main profit centres: Personal and Banking Services World Banking Group Treasury Group The Due Bill was an acknowledgement (transactional evidence) that The bank had sold securities to a customer His/her’s account has been charged If requested, securities would be delivered when they become available Upon maturity, Chemical bank would pay principal plus interest at a specified rate Due Bills Lifecycle at Chemical Bank is described below: Due Bill was a product designed, marketed and sold by the Treasury group, which was responsible for generating continual funding of $25 Billion for Chemical Bank at the lowest possible costs highly profitable product for Chemical Bank sold in majority by the Metro division of Personal & Banking Group that processed Due Bill requests on demand from the customers Processed and administered by Trust & Investment division of Personal & Banking Group. Events that lead to decline of profits earned due to Due Bills: Introduction...
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...ASA University Review, Vol. 6 No. 1, January–June, 2012 Fund Management Practices of the Selected Nationalized Commercial Banks in Bangladesh Vhokto Kumar Biswas* Kartik Chandra Mondal** Abstract Fund management of commercial bank is a significant issue for its growth and stability. The unusual difference between cost of fund and return on fund is alarming for the financial health of any commercial bank. The major objective of the study is to know the position of fund management, profitability, growth, stability, and productivity trends of Janata Bank Ltd and Agrani Bank Ltd during the period of 2000-2009 and 2004-2008 respectively. Here the secondary data are used. In fund management practices, the banks are not in a good position due to heavy stuck up advances, low recovery rates, excessive over dues, and outstanding advances. The management of the banks is alert enough to overcome this odd situation. The recent financial reforms introduced by the Ministry of Finance and Bangladesh Bank have improved the situation. The overall profitability, productivity, and stability of the banks are increasingly improving trough the application of modern fund management techniques. Key Words: Efficiency, stability, liquidity, profitability, productivity, growth rate, fund management. Introduction Banking system as a whole plays an important role in the economy of a country irrespective of its level of development. Bangladesh as one of the poorest countries in the world, no exception to...
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...AN INTERNSHIP REPORT ON STRATEGIES & PROCEDURES OF FUND COLLECTION AND ITS PERFORMANCE ANALYSIS: A STUDY ON EXIM BANK BANGLADESH LIMITED, KHULNA BRANCH . The Report is Submitted as a Partial Fulfillment of the Requirement of Bachelor of Business Administration SABYASACHI BOSU ID NO: BBA-060160259 DEPARTMENT OF BUSINESS ADMINISTRATION NORTHERN UNIVERSITY BANGLADESH JANUARY 15, 2010 AN INTERNSHIP REPORT ON STRATEGIES & PROCEDURES OF FUND COLLECTION AND ITS PERFORMANCE ANALYSIS: A STUDY ON EXIM BANK BANGLADESH LIMITED, KHULNA BRANCH The Report is Submitted as a Partial Fulfillment of the Requirement of Bachelor of Business Administration | |SUBMITTED BY: |UNDER THE SUPERVISION OF: | | | | | | |Sabyasachi Bosu |Md. Faruk Hossain | | |ID NO-BBA060160259 |Lecturer in Finance | | |Department of Business Administration |Department of Business Administration | | |Northern University Bangladesh ...
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...Functions of the International Monetary Fund The function of the Monetary Fund (IMF) is to provide loans to its members. It hereby uses different programs to supply a short, medium and long term solution. For entering, each member is charged a fee or quota. IMF main role is to intercede when there is an invitation, but also when a country can’t realize their international debts. The own currency of the IMF is the special drawing right (SDR). In order to provide fundamental changes in governmental relationships it though needs a borrower. That’s why its resources for dealing with crises are limited. Functions of the World Bank After World War II the original purpose of the World Bank was to assist helping the implementation of the Marshall plan - providing financing aid and programs to support the rebuilding of Europe. Soon its financials were insufficient. For these reasons it shifted towards backing up the development of nonindustrial countries and their economics. Functions of the General Agreement on Tariffs and Trade In the beginning there was the International Trade Organization (ITO) with its purpose to reduce tariffs. When it died in 1948, the General Agreement on Tariffs and Trade (GATT) has risen instead, focusing on bringing down trade barriers progressively. Therefore, countries will meet periodically and negotiate. It has been very successful thus far, but ignored the sectors of agriculture, textiles and apparel. One indicator given is “that international...
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...and investment trusts. Firstly, it will shortly introduce the definitions of two different funds, then after identifying the main difference between them, it will talk about the advantages and disadvantages for each other. Finally, it will come up with a conclusion. Unit trusts and investment trusts are two types of funds that people can invest in as a private investor in the world. They together form the very fundamental way of how funds operate. Unit trusts are‘open-ended’funds, which means that the size of the fund and the number of units depends on the amount of money investors put into the fund.(Arnold,2012:30) Moreover unit trust fund is an investment scheme where money from many investors is pooled together for collective investments, and is invested towards a specified goal as stated in the investment objective of the fund.(Fig1.1) (ambmutual.com) Arnold(2012) also claimed that investment trusts differ from unit trusts-they are companies able to issue shares and other securities rather than units. Investors can purchase these securities when the investment company is first launched or purchase shares in the secondary market from other investors. These are known as closed-end funds because the company itself is closed to new investors – if you wished to invest your money you would go to an existing investor to buy shares and not buy from the company. An open-end fund does not restrict the amount of shares that can be issued or redeemed at any time. Usually,...
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...management are the two classes in which the investment strategies are categorized. Active management is whereby financial professionals try to outperform a specific benchmark. Passive funds like the exchange traded funds (ETFs) are whereby the index is tracked with no active stock selection (Barr, 2009). The risk of a failing a benchmark or index can be reduced through passive investment. Passive investment also reduces the cost. The active investment has the potential of boosting returns through outperforming some benchmarks. However, there are increased risks and also there are no guarantees that the benchmarks will be exceeded or matched. In a well-diversified portfolio, active and passive investment can flourish. The role of ETFs which is an important building block for dynamic and diverse portfolios is to offer access to equities and fixed income across large developed economies and the emerging markets. ETFs can be traded like share, thus similar liquidity is offered hence it allows the investor to adjust to their portfolios. In the context of investors’ specific objective, active management allows risks to be managed properly (Barr, 2009). Passive funds don’t neutralize risks, but they introduce benchmark risks and concentrated risks to investors and in relation to exchange-traded fund. The concept of market efficiency holds that there can be no over-valued or under-valued securities because of the market factors of discount which at all times influence the pricing of...
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...management are the two classes in which the investment strategies are categorized. Active management is whereby financial professionals try to outperform a specific benchmark. Passive funds like the exchange traded funds (ETFs) are whereby the index is tracked with no active stock selection (Barr, 2009). The risk of a failing a benchmark or index can be reduced through passive investment. Passive investment also reduces the cost. The active investment has the potential of boosting returns through outperforming some benchmarks. However, there are increased risks and also there are no guarantees that the benchmarks will be exceeded or matched. In a well-diversified portfolio, active and passive investment can flourish. The role of ETFs which is an important building block for dynamic and diverse portfolios is to offer access to equities and fixed income across large developed economies and the emerging markets. ETFs can be traded like share, thus similar liquidity is offered hence it allows the investor to adjust to their portfolios. In the context of investors’ specific objective, active management allows risks to be managed properly (Barr, 2009). Passive funds don’t neutralize risks, but they introduce benchmark risks and concentrated risks to investors and in relation to exchange-traded fund. The concept of market efficiency holds that there can be no over-valued or under-valued securities because of the market factors of discount which at all times influence the pricing of...
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...The Mutual Fund At a basic level, mutual funds are nothing more than a collection of stocks and bonds. A mutual fund primarily focuses on bringing groups of people together to invest their money into bonds, stocks, and other different securities. It’s important to know that each of these gathered investors owns shares that ultimately make up a portion of the holdings in the total fund. Once a person invests into these stocks, bonds, or securities through the mutual fund they can make money in three different ways. One being if the fund sells a security that increases in price then it has a capital gain. If a capital gain occurs then most funds forward these gains to investors in a distribution. Another way investors make money through mutual funds is if fund holdings’ price rises but is not sold by the fund manager. The fund’s shares increase and one can sell their mutual fund shares for a profit. The third way an investor can make a profit is when income is earned from the interest on bonds and from the dividend on stocks. The fund pays out almost all of the income it receives throughout the year to fund owners in a distribution. Mutual funds not only have great benefits on a profitable level but also have many other perks to them. Most importantly, mutual funds provide professional management of the investors’ money. Most investors purchase funds because they either don’t have the time or the expertise to thoroughly manage their own portfolios. This is a great way for...
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...lashed to Lehman Brothers when the investment bank foundered and ultimately failed. Buyout firms proposed a lifeline, but they fell short as the financial crisis deepened, leaving Neuberger's leaders to improvise an employee buyout during the most punishing financing environment in memory. Yet, four years later, Neuberger is freshly invigorated and focused on the essentials in the way disaster survivors tend to be. Its business is in sturdy condition, its fund performance is outpacing most peers and its strong investment culture has been affirmed. If the new Neuberger is in some ways "a $200 billion start-up," as one executive characterizes it, it is also one of the country's premier and most deeply rooted asset managers. Roy Neuberger, a founding partner and guiding force of the firm, died just two years ago, at the age of 107. Until he was nearly 100, he came into the office every day. For all the drama Neuberger has undergone in the past 15 years -- going public in 1999 after 60 years as a partnership, being absorbed by Lehman in 2003 and then set adrift five years later -- Neuberger is in some ways now much closer to the firm that Roy Neuberger ran than it has been in years, with its focus squarely on its client base, and not on the demands of a parent company or public shareholders. "Our mission is totally different as part of an employee-controlled partnership," than it was as a subsidiary of a bulge-bracket investment bank, says Neuberger Chief Executive George Walker....
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...Scale Enterprises (SME). One of such sectoral strategies is the introduction and pursuit of policies such as concessionary financing to encourage and strengthen the growth of SMEs in Nigeria. In this paper, a random sample of 10 formal/ informal finance sources and 20 SMEs in 6 selected Small and Medium industries in Kaduna and Abuja have been studied. We found that financing options for SMEs are numerous but access to these funds has been difficult inspite of several government initiatives. We also found that the Small and Medium Industries Equity Investments Scheme (SMIEIS) fund lacks standard guideline for fund disbursement, the unregulated informal finance institutions finance the SMEs much more than the formal sources and the informal sources make up more than half of the SMEs’ mix of funds. It is recommended that the informal source of financing is a potentially important source of micro financing. Savings in them should be further encouraged through regulation, government intervention by way of active participation of community and development banks in local business associations. SMEs should consider all financing options that maximize the value of the business enterprise. 1.1 INTRODUCTION The significant role Small and Medium Scale Enterprises (SMEs) play in economic development process has been well documented. Studies have been conducted on SME management, business planning and to some extent on venture creation but this paper focuses on financing options in Nigeria...
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...BANK DRAFT A bank draft is a check drawn on a bank’s funds, similar to a cashier’s check. The funds might be held in the same bank that creates the draft, or the money behind the draft might be held in the bank's account held at a different bank. The term bank draft is used for other situations, and use varies from country to country. For example, when paying bills electronically, the transfer from your bank account to your service provider (such as an electric utility provider, or an online merchant) might be called a draft. Scroll down for a discussion of that type of draft. Basic Bank Drafts A traditional bank draft is a payment used when safety is important. If you need to pay somebody with guaranteed funds, you might use a bank draft. For large transactions and situations where a seller does not want to wait for a check to move through the banking system, a bank draft gets money moved quickly. Bank drafts are often used for international trade or purchasing a home. The term “cashier’s check” is sometimes used instead of bank draft, especially in the USA. Security: bank drafts are a secure form of payment. When you receive a bank draft (and it’s authentic – which isn’t always the case), you can be confident that the payment is good. The funds will generally be available in your account within one business day, and it’s unlikely that your bank will reverse the deposit a few days or weeks later. To understand the security of a bank draft, consider a standard personal check...
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...exchange can take place * Money acts as a medium of exchange and solves the divisibility problem. (e.g. bag of potatoes might be worth half of the left rump, but a person would not just take off a rump from a living cow and directly exchange). Other roles include store of value (saving of individuals’ surplus earning). The funds saved by surplus units- those savers with current excess funds- can be put to use by those whose current demand for goods and services is greater than their current available funds. (Deficit units) * Financial institutions and markets facilitate financial transactions between the providers of funds and the users of funds. * Financial assets are represented by financial instrument that states how much has been borrowed, and when and how much is to be repaid by the borrower. E.g. money invested in a term deposit with a bank, the bank will issue a term deposit receipt. This is a financial instrument. * Buyers of financial instruments are lenders that have excess funds today and want to invest and transfer that purchasing power to the future. The sellers of the instruments are those deficit units that are short of funds today, but expect to have a surplus amount in the future which will enable the repayment. * A...
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...Report on Bangladesh Electronic Fund Transfer Network: A Study on Prospect of Payment and Settlement System in Bangladesh Prepared by Kafil Uddin Muhammad Zahid Mahmud ID: 80802062 Supervisor Professor (Dr) Khondoker Bazlul Hoque Department of International Business University of Dhaka Date of Submission: November 26, 2015 Department of International Business University of Dhaka November 26, 2015 Professor (Dr) Khondoker Bazlul Hoque Department of International Business University of Dhaka Subject: Submission of Internship Report. Dear Sir With due respect and humble submission I beg state that I want to submit my internship report consist of “Bangladesh Electronic Fund Transfer Network: A Study on Prospect of Payment and Settlement System in Bangladesh” as the study part of which you had assigned me for fulfillment of the course “Internship” of Evening MBA program. May I note here that, there will be no dearth of sincerity on my part to bring the issue under study into proper focus. However, I would like to request you to consider if any error is found in my report. Finally, I would like to request you to permit me to conduct the research on my proposed topic and submit my report on that. Thanks in advance for your kind assistance and advice in this connection. Yours obediently, Kafil Uddin Muhammad Zahid Mahmud ID. 80802062 2nd Batch, Department of International Business University of Dhaka Contact No. 01715720770 Email: kafil_uddin@yahoo.com ii | P a g e ACKNOWLEDGMENT...
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...poverty reduction strategy. For the first time, the comprehensive Industrial Policy 2005 highlighted SME development as a flagship policy area for balanced and sustainable industrial development in Bangladesh. Availability of finance is thought to be a major constraint to formation and growth of SMEs in Bangladesh. Banks are reluctant to expand their SME credit portfolio because they do not consider SME lending an attractive and profitable undertaking. This is so because SMEs are regarded as high risk borrowers because of their low capitalization, insufficient assets and their inability to comply with collateral requirements of the banks. Administrative costs are also higher because close monitoring and supervision the SME operation becomes necessary. Despite all these facts banks and financial institutions have been providing finance to the SME sector and the volume of finance is showing an increasing trend. Most importantly the share of private sector banks in disbursement of credit to the SME sector has been increasing in recent years comparatively at a higher rate than the NCBs and state owned DFIs. There is an issue of interest rate charged by banks and financial institutions for SME finance. Very often it is argued that the interest rate on SME loan is too high and...
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...equities, for unspecified periods. The capital markets, in distinction from other parts of the financial market ie, the money markets, are those for long-term government securities, corporate bonds, stocks, municipal bonds issued by state and local government units, and mortgages. industry and commerce as well as government and local authorities raise capital from the capital market which performs several important functions in the process of economic development. Most important among them are the promotion of savings and investment and efficient allocation of funds among competing uses. Participants in the capital markets are many. They include the commercial banks, saving and loan associations, credit unions, mutual saving banks, finance houses, finance companies, merchant bankers, discount houses, venture capital companies, leasing companies, investment banks, investment companies, investment clubs, pension funds, stock exchanges, security companies, underwriters, portfolio-managers, and insurance companies. Capital market in Bengal was founded during the Mughal regime in the early 17th century. Although in a limited scale, there were money and capital market activities in Suba-e-Bangala throughout the 17th century. Bengal under the nawabs was fairly developed in trade and communication. An historian characterised Bengal of the Nawabi period as 'easy in its finances, moderate in its expenditure, free from charges and cares of independent dominion, its inhabitants enjoying...
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