Banking Performance and Evaluation of RKUB

A STUDY ON “GENARAL BANKING & PERFORMANCE EVALUATION” OF RAJSHAHI KRISHI UNNAYAN
BANK, RAJSHAHI BRANCH
Department of Finance and Banking University of Rajshahi
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An internship is an agreement between a student and a company or organization for a fixed
period of time, such as a semester or quarter. A student agrees to work for them and they agree to
mentor and teach the student; internships can offer valuable insight into a particular field or career.
Internship is process to gain practical knowledge about some theoretical lesson. It is the application
of knowledge, which a candidate has gathered by academic subjects. And thus it helps to better
decision making.
The concept of work experience, internships or cooperative education is not a 20th
century
development, as many believe. The concept of learning by doing goes back to the guild system in
Europe. The idea of combining work and education in America was formally initiated in 1906 by
Herman Schneider at the University of Cincinnati where it was referred to as cooperative education.
(http://www.intech.mnsu.edu)
Professor Schneider joined the University of Cincinnati in 1903 and began immediately to
solicit the interest of the faculty and industrial leaders in the merits of cooperative education.
Schneider was convinced of the efficacy of this concept after studying case records of Lehigh
University graduates, indicating that those who showed marked engineering ability had worked while
attending college.
The concept of internship was introduced in University of Rajshahi with the introduction of
Business Faculty. From then internship is an academic requirement for all the students of MBA.
Generally this internship program varies from 15 days to 3 months.
1.1 MEANING OF INTERNSHIP

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1.2 Objectives of Internship:
The following list of program objectives has been extensively reported in literature
discussing internship programs. The College of Business subscribes to the following objectives but
does not expect each student to achieve every objective. Many of the program objectives will only be
important to a few students, but each student should achieve a substantial portion of those listed:
Table-1: Objectives of Internship
1. Internships will provide students the opportunity to test their interest in a particular
career before permanent commitments are made.
2. Internship students will develop skills in the application of theory to practical work
situations.
3. Internships will provide students the opportunity to test their aptitude for a particular
career before permanent commitments are made.
4. Internship students will develop skills and techniques directly applicable to their
careers.
5. Internships will aid students in adjusting from University to full-time employment.
6. Internships will provide students the opportunity to develop attitudes conducive to
effective interpersonal relationships.
7. Internships will increase a student's sense of responsibility.
8. Internship students will be prepared to enter into full-time employment in their area of
specialization upon post graduation.
9. Internship students will acquire good work habits.
10. Internship students will develop employment records/references that will enhance
employment opportunities.
11. Internships will provide students with an in-depth knowledge of the formal functional
activities of a participating organization.
12. Internships will provide students the opportunity to understand informal
organizational interrelationships.
13. Internship programs will enhance advancement possibilities of graduates.
14. Internship students will have higher levels of academic performance.
15. Internship programs will increase student earning potential upon graduation.
16. Internship programs motivate students to continue their education.

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1.3 BENEFITS OF INTERNSHIP
Benefits to the Student:
1. Benefits in Career Exploration and Decision-Making
2. Networking and Professional Connections
3. Helps a student to match theoretical knowledge with practical experience.
4. Make familiar with the activities of corporations.
Benefits to the Organization:
1. Professionals in the sponsoring organization have access to new concepts and ideas through
the intern.
2. The sponsor has a chance to assess the intern without making a long-term commitment.
3. The internship can help employers do needed projects.
Benefits to the University
1. Provides an opportunity for the university to relate academic training to job requirements.
2. Uses many community facilities and resources for educational purposes making it possible
for the university to provide education in fields that it could not otherwise serve.
3. Enables the university to keep abreast of developments in the business and industrial world.
4. Provides a direct avenue through which the university can meet community needs.
Benefits to the Community
1. Provides the community with an increased source of well-educated workers.
2. Provides the community with a labor force that is more thoroughly educated than graduates
who have not had work-experience education and hence works more efficiently.
3. Increases cooperation between the community and the university. Increases the possibility
that young people will remain in the community after MBA.
1.4 METHODOLOGY
Both primary and secondary information has been collected for the purpose of this report.
The primary sources of information:
 Face to face conversation with the bank officers.
 Face to face conversation with the clients.
 Exposure on different desk of the bank.
 File study.
The secondary sources of information:
 Annual report of RAKUB.
 Profile of RAKUB.
 Periodicals published by Bangladesh Bank.
 Different publications on banking functions, foreign exchange operation and credit policies.
 Previous internship reports Prospectus of RAKUB.

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1.5 Limitations of Internship
We know that practical training is essential to acquire a complete knowledge. But practical
knowledge is not easy to obtain. There are many limitations of internship. These are as follows:
 It is impossible to know fully about an organization within a very short term.
 Sometimes an organization cannot provide the real figure of its organization because of secrecy.
 Observation of the activities of an organization is difficult tasks.
 Lack of necessary elements and aspects are the problem of proper Internship.
 Lack of proper data is another problem of practical training.
 Lack of proper knowledge for the collection of primary and secondary data
 Lack of maintaining proper books and modern technology
 In many cases, the bank is not interested provide their information for maintaining secrecy

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At present Bank such lifeblood of economy and importance of the Bank is unlimited. That
economy and trade are turned to concentrate it. Bank does not only help for giving loan, even helps
various financial transactions. As a result the importance of banking activates to increase day by day.
Bangladesh economy reliant on agriculture and consider the mainstay of economic life of the people.
Most of people of our country are depending upon agriculture directly and indirectly. Development
of this country depends upon the development of agriculture, because Major portion of National
Income comes from agriculture. But the financial conditions of the farmer of our country are not
satisfactory and their purchasing power of agriculture‟s materials is very low. Most of the farmers
live under poverty line. They could not get seeds, fertilizers, modern technology of cultivation and
irrigation in proper time. In case, Rajshahi krishi Unnayan Bank provides to supply their needed.
2.1 INTRODUCTION
Rajshahi Krishi Unnayan bank is a specialized bank and the largest sources of agricultural
credit in Rajshahi division. It was established by the president‟s order no. 58 of 1986.The main
function of the bank was started on 15th
March in 1987.At that time RAKUB took over the whole
operations of Bangladesh Krishi bank (BKB) within the administrative division of Rajshahi along
with its assets and liabilities.
The north-west region of our country is the driest and poorest area with a high population
density and low rate of urbanization (13%). The north west-region consists of 16 districts of entire
Rajshahi administrative division with an area of 34513 sq. km. and estimated population of 2705
million. The populations of this area are to be suffered poverty from various degrees of deprivation.
To overcome those problems and improve the condition of the poor, RAKUB supply
agricultural credit, the bank extends its credit facilities for employment and income generating agro-
based industrial and commercial activities. RAKUB is playing a vital role both in agricultural and
industrial developments as well as eradication of poverty.
2.2 Historical Background of RAKUB:
i) Past History:
Most of the people of Bangladesh are related with agriculture from the very beginning. The farmers
of our country were oppressed in various ways at the time of British rule. We know that many
farmers lost their properties because they could not repay their debt. At that time, they took credit
from the local lenders and other landlords to produce crops and other purposes. On the others hand
they took Dadan from the moneylender, but when they would repay the money with interest, they
would become landless day by day. Since the small farmers become the marginal farmers, at first the
Indian British Govt. took a step to disburse the agriculture loan to the farmers of the Bengal since
1902, which continued from 1905.
For the socio-economic development of the small and marginal farmers of Bengal, the Indian British
Govt. took a step for the second times to disburse agriculture credit in 1932, which continued till
1935.
Some rules and regulation of British and financing condition of local landlord, moneylenders etc like
“Dadan” business, farmers become hopeless helpless. Seeing the bad and helpless condition of the
farmers, the bold voice of Sher-E-Bangla A.K. Fazlul Haque stood beside the farmers and he tried to
establish the “Rin Shalishi Board” for the greater interest of the farmers, as a result many farmers

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who were engaged with the oppression of the moneylenders and landlords, breathed with peace. That
is why, the people at that time recollected Sher-E-Bangla as Haque shaheb.
ii) Pakistan period:
In 1947, the Indian was separated from the British rule and in Indian sub-continent two independent
countries were originated namely India and Pakistan. Our Bangladesh was indicated as East Pakistan
as a part of Pakistan. After that time the Pakistan Govt. recognized a financial institution by the name
of Agricultural Development Finance Corporation (ADFC) to disburse loan is agricultural sectors is
1952. In 1957 then the Pakistan Govt. established another financial institutions namely “Pakistan
Krishi Bank” feeling the agro-production and the importance of agro-loan. This institution started its
function from 1958.
iii) Bangladesh period:
Bangladesh freed through the “Great liberation war is 16 December 1971. After liberation period The
„Pakistan Krishi Unnayan Bank‟ was re-named as “Bangladesh Krishi Unnayan Bank”. After this,
the classification of this bank was made as the “Bangladesh Krishi Bank” with the ordinance number
27 of the president 1973.Various organizations are working independently after achieving freedom.
As a result, the consciousness of people is increasing than before liberation period. The creation of
„Water Development Board‟, „Bangladesh Rice Research Institute‟, „Rural Electrification Board‟ and
other necessary institutions are made. Control of flood, rice of new quality and introduction of other
crops and the increment of its demand, the increment of demand of people towards the institutional
credit a specially SACP or as result of circulating a special credit program amounting to Tk.. 1 core
etc. have influenced many farmers to be bank oriented. It becomes very difficult for some limited
bank to meet up the multiple demand of loan specially crop-loan. Since Bangladesh is an agro-based
country, the demand for the loan of Krishi Bank has increased remarkably. It becomes very difficult
for a Dhaka based head office of Krishi Bank to manage agro-loan in the remote areas of the country.
For this reason, then the Govt. felt to decentralize the Krishi Bank in the divisional areas. The people
of the North-west areas of Bangladesh are lagging behind in all respects than other parts of the
country. For this reason, Rajshahi Krishi Unnayan Bank was established in 1986 with the ordinance
number 58 of the president. RAKUB started its functioning from 15 March, 1987.
2.3 OBJECTIVES OF RAKUB
The main objectives of RAKUB is to be given loan to the basic sector/sub sector and
supplementary sector of the agriculture such as crops production, animal husbandry, poultry,
farming, fishery, livestock dairy, horticulture, forestry, purchasing machinery for irrigation and
agriculture goods and inputs trade, storage of agriculture goods, establishment of processing and
marketing oriented industry, agro based industry. Some objectives of RAKUB are as follows
1. To provide credit facilities for agricultural development of poor farmers in Rajshahi
division.
2. To develop the agro-based industries.
3. To alleviate poverty.
4. To modernize the agricultural.
5. To develop the social state of the villagers.
6. To inspire the farmers for taking loan as micro credit.

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7. To increase self-dependence of land less marginal and small farmer.
8. To develop socio-economic condition of the farmers of the North-West region of the
country.
9. To play a vital role to increase agriculture production, create income generating
activities.
2.4 FUNCTIONS OF RAKUB
As the largest development partner in the northwest region Rajshahi Krishi Unnayan
Bank aims at overall development of farmers and all the sectors and sub-sectors of agriculture in this
region. Besides, catering to agricultural credit the bank performs ancillary functions as financing
agri-business and agro-based industries and poverty alleviation programs.
2.5 MANAGEMENT
A seven-member Board of Directors is entrusted with the responsibility of policy
formulation for attainment of growth in agriculture leading to economic development of the country
through agricultural credit support. The government appoints all the directors of the board. An
executive committee constituted of the Chairman and two other directors including the Managing
Director is there for taking emergency decisions. The managing Director is the chief executive of the
bank.
2.6 CAPITAL
RAKUB is a governmental banking institute. So the main sources of capital are
government fund, as on 30th
June 2011 the details about capital are as follows-
1) Authorized capital: Tk. 7500 million
2) Paid up capital : Tk. 5700 million
3) Reserve capital : Tk. 208.50 million
2.7 ORGANIZATIONAL STRUCTURE
The head office is stationed at divisional headquarters city of Rajshahi . The branches
network of the bank comprises 367(Rural-306, Urban-61) branches including one in Dhaka. Eighteen
zonal offices stationed in district headquarters control branches under them. The General Manager's
office at Rangpur oversees activities of 9 zones of greater Rangpur, Dinajpur districts. There are 18
independent regional audit offices for conducting regular audit in branches and zonal offices. The
only training institute of the bank is situated at Rajshahi. There are 3309 employees (29.12.2011) of
the bank of which 2046 are officers and 1263 other staffs.

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Exhibit 1: Organizational Structure with details

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2.8 BRANCH NETWORK
Region wise branches of RAKUB are given through table now.
Table-2: Region wise total branches (Up to 29th
December, 2011)
SL. No. Zone/Region No.of
Branches
01. Rajshahi 25
02. Naogaon 28
03. Natore 21
04. Chapai Nawabgonj 16
05. Bogra (North) 20
06. Bogra (South) 14
07. Pabna 24
08. Jaipurhat 15
09. Rangpur 27
10. Gaibandha 24
11. Nilphamari 20
12. Kurrigram 21
13. Lalmonirhat 17
14. Dinajpur (North) 17
15. Dinajpur (South) 18
17. Thakurgoan 18
18. Panchagarh 18
19. Dhaka 1
20. L.P.O (Rajshahi) 1
21 Sirajgonj 22
Total 367
(Source: Personnel department of RAKUB)

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2.9 RAGULATORY BODY
The board is vested with the responsibility of formulation of policy in line with
attainment of growth in agriculture and economic development of the region through agricultural
credit support. The board of directors is constituted by seven members, all appointed by the
government. Besides, for emergency decisions there is an executive committee constituted of the
chairman of the board and two other members: the managing director and one of the directors elected
by the board. The managing director is the chief executive of the bank.
Table-3: Regulatory Body
Chairman Prof. Dr. M. Shah Nowaz Ali
Managing Director Mr. Pradip Kumar Dutta
Director Abdul Mannan
Director Khondoker Jahangir Kabir Rana
Director Prof. Dr. Rustom Ali Ahmed
Director
Mr.Bikash Indu Mandal
Secretary
A B Siddque

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2.10 HIGHLIGHT OF OVERALL ACTIVITIES OF RAKUB
Table-4: Highlights of overall activities (as on 30th
June 2011)
SL. No Particulars Taka
1 Authorized capital ( On 30-06-2011) 750,00,00,000
2 Paid up capital 570,00,00,000
3 Total assets 3765,06,32,550
4 Total deposit 1538,97,55,298
5 Total loan and advances 2711,20,80,472
6 Total contingent liability 70,65,64,886
7 Loan deposit ratio 1:0.57
8 Ratio of classified loan against total loan &
advances
1:0.34
9 Profit/(loss) after tax (64,08,65,618)
10 Amount of classified loan 933,35,89,000
11 Provision for classified loan 186,23,22,000
12 Provision for surplus/deficit 89,57,93,000
13 Cost of fund 8.30%
14 Interest earning assets 2574,26,02,983
15 Nonperforming assets 1190,80,29,567
16 Return on investment(ROI) 17,40,545
17 Return on assets (ROA) 197,47,18,147
18 Interest on investment
19 Income per share
20 Income price ratio
Source: www.rakub.org.bd

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2.11 RAKUB AT A GLANCE: (Up to 30th
June, 2011)
Table-5: RAKUB at a glance
01) Establishment : 15 March, 1987.
02) Authorized Capital : Tk. 7500.00 (in million)
03) Paid up Capital : Tk. 5700.00 (in million)
04) Reserve : Tk. 208.50 (in million)
05) Area of RAKUB :
a. Area : Rajshahi & Rangpur Division
b. Spread : About 34,513 Square.K.M.
c. District : 16
d. Upazilla : 125
e. Union : 1092
i) SACP : 908
ii) Non- SACP : 184
f. Total Populations : About 3.50 crore
g. Total No. of Family : 51 lakhs.
h. Agricultural Family : 32 lakhs.
06) Total Branch : 366
i) Municipal : 61
ii) Union : 306
07) Total manpower : 3309
i) Officers : 2046
ii) Workforce : 1263
08) Zonal /Regional office : 18
09) Regional Audit office : 18
10) Website : www.rakub.org.bd

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3.1 LOCATION
Rajshahi Branch of RAKUB Rajshahi district is started its operation 15 March, 1987 at
Ghoramara, Rajshahi the branch caters the need of agricultural credit alleviation program and at the
same time reforms commercial banking function in its geographical area.
3.2 ESTABLISHMENT OF RAJSHAHI BRANCH
Rajshahi Branch of Rajshahi Krishi Unnayn Bank started its operation in 15 March, 1987
as a Rajshahi branch, in Rajshahi. It is located at eastern side of Rajshahi in sonadighimore Rajshahi.
It is an ideal branch of head office.
3.3 MAIN OBJECTIVES OF RAJSHAHI BRANCH, RAKUB
 Provide credit facilities for agricultural development to poor & marginal farmers of Rajshahi
division.
 To develop the agro- based industries.
 To provide poverty alleviation.
 To modernize the agriculture.
 To developed the social state of villagers.
 To assist farmers in adopting appropriate technologies under the bank's supervision that
means helping in modernize the agricultural sector.
 To provide general banking service.
 To earn normal profit for meeting the operational expenses, building reserve and expansion
of activities to cover wider geographical areas.
3.4 FUNCTIONS OF RAJSHAHI BRANCH
Like other banks Rajshahi branch does the following activities:
I.Receive deposit from customers;
II. Payment to customers according to payment order given through check by customers;
III. Disbursements of loan and recovery of the given loan;
IV. Giving advice to the client of the bank;
V. Transfer money from one place to another place;
VI. Western Union Money transfer.

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3.5 RAKUB RAJSHAHI BRANCH AT A GLANCE
Table-6: RAKUB Rajshahi Branch at a glance
1. Establishment 15th
March 1987
2. Area About 1315 km2
3. Location Malopara,Rajshahi City Corporation,Shaheeb Bazar Rajshahi.
4. Total no of Accounts 3580
5. Total deposit Tk. 412401453
6. Total no of loanee 4290
7. No of employee 25 (with security guard)
8. No of village 125

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3.6 ORGANIZATION STRUCTURE OF RAKUB, RAJSHAHI BRANCH
Exhibit 2: Organizational Structure of RAKUB, Rajshahi Branch

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3.7 EMPLOYEE SUMMARY
Table-7: Employee summery of Rajshahi branch
Source: 2nd
officer, Rajshahi Branch, RAKUB.
SL No Designation Authorized Existing Vacant
01 Assistant General Manager (AGM) 01 01 0
02 Principal officer 01 01 0
03 Senior officer 05 05 0
04 Officer 07 07 0
05 Supervisor 02 02 0
06 Supervisor(Cash) 02 02 0
07 Computer operator 01 01 0
08 Data entry operator 02 02 0
09 Peon 01 01
10 Security Guard 01 1 0
Total 23 23 00

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4.1 INTRODUCTION
The main function of a bank is collect deposit from public or organizations and to give
among them. RAKUB of Rajshahi Branch, Rajshahi also performs General banking includes deposit
service, local currency remittance and other related functions, which are discussed in this chapter.
4.2 FUND OF RAKUB
Sources of Fund:
 Deposit of customers;
 Recovered loan;
 Refining fund from Bangladesh Bank against the paid up loan;
 Received fund for special loan credit program from various
international institutions;
 Loan from head office;
 General reserve;
 Money receipt from sale of assets;
 Loan from other branch.
 By issuing different types of Bill.
Uses of Fund:
 Payment to
client/Depositors;
 Loan disbursement;
 Payment to other
branch;
 Payment to head office;
 Misc. office exp
4.3 SERVICES GIVEN TO CUSTOMER BY RAJSHAHI BRANCH
Different deposit related services provided by the bank are mentioned below;
A) Deposit Service:
1) Current Deposit Account
2) Savings Deposit Account
3) Term Deposit Account
a) Short Term Deposit Account (STD)
b) Deposit Pension Scheme (DPS)
c) RAKUB Deposit Pension Scheme (RDPS)
d) Fixed Deposit Account
B) Commercial Service:
a) Demand Draft (DD)
b) Mail Transfer (MT)
c) Telephone/ Telegraphic Transfer (TT)
d) Payment Order (PO)
C) Loan Service:
a) Short Term Loan
b) Medium Term Loan
c) Long Term Loan
The above services of RAKUB‟s Rajshahi branch are discussed in following pages respectively;

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Deposits
Demand Deposit Time Deposits
Current A/C STD A/C Saving A/C
FDR DPD RPS HS RSS RGPS
4.3.1 Deposit Services:
The bank gives importance to accumulation of rural small savings through its branches.
RAKUB renders all sorts of deposit banking services to its over one million valued customers. The
bank operates deposit accounts like Savings Bank Accounts, Current Deposit Accounts, and Short
Term Deposit Accounts & Fixed Deposit Accounts.
Exhibit 3:
The following three types of accounts are available at Rajshahi branch
1. Current Account:
From this type of account any amount of money is deposited and drawn at any time in the
office hours. There is no interest on current account. Bank over draft is sanctioned based on it. This
account is opened with minimum deposit of Tk.1000.
2. Savings Account:
Savings account opened for the individual customers except companies, firm and Co-operative
society. Money is withdrawn two times a week and deposited at any time in the office hours. If an
account holder draws money from account he/she will not get interest for that month. To open an
account bank requires Tk.200 only.

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3. Term deposits:
a. Short Term Deposit Account (STD):
Short Term Deposit Accounts are opened for company, business firms and government
demonstrative body. This account is operated like current account.
b. Deposit Pension Scheme (DPS):
It is one kind of deposit program circulated by government. In this savings scheme a person
receives the opportunity to build up saving by contributing monthly installment to get an attractive
fixed amount at the end of a specific period. The size of monthly installments is Tk. 100, Tk. 200,
Tk. 300, Tk. 400, Tk. 500, or which is to be deposited within the first week of each month. In this
case compound rate of interest is charged.
c. RAKUB Pension Scheme (RPS):
RAKUB has some savings schemes to motivate the people for savings. In this case RPS is
regarded as the special product of this bank. The RPS is same as DPS. But terms of savings of RPS
are 5 years and 10 years.
d. RAKUB Grameen Pension Scheme (RGPS):
It is for the grameen poor people to motivate them increase in savings. It is same as DPS &
RPS.
e. Fixed Deposit Account (FD):
 Fixed deposits are taken for the following terms:
 From one month to below three months
 Above three months to below six months
 Above six months to below one year
 Above one year to below three years
 Above three years

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Table-8: The rate of interest in deposit accounts
SL. No Types of Accounts Interest rate
1 Current Account No interest
2 Savings Account 7%
3 Fixed Account 8% to 9.5%
4 Short Term Deposit(STD) 4%
5 RAKUB Pension Scheme(RPS) 12%
6
7
Deposit Pension Scheme(DPS)
RAKUB Grameen Pension Scheme(RGPS)
10 to 12%
6%
Source: Manager, Rajshahi Branch, RAKUB
4.3.2 Commercial Services
The following types of commercial service are available in RAKUB‟s Rajshahi branch
a. Demand Draft (DD):
DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one
branch Payable to another branch on demand. DD is issued in against at 0.10% (minimum Tk.30
plus vat 15%). When the limit exceed commission amount increased in a certain rate.
b. Mail Transfer (MT):
This branch transfer money another branch of this bank in another place in against of
commission money of this security paper has to be transferred to an account of another branch. Here
the bank commission is 0.10% and the postal charge is Tk.20, telegram cost Tk. 50, telephone cost
Tk. 50.
c. Telegraphic Transfer (TT):
It is the quickest method of remitting fund from one place to another. In this procedure no
instrument is sent to the paying branch. Only message is sent over telephone or telex and the paying
branch makes payment after getting message. Here the bank commission and charge is same to MT
d. Payment Order (PO):
It is a written document. This PO can be encased on that branch from where it is issued.
Several supplier organizations use this PO and here no account is needed to open with bank. It is
issued locally.

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PO Up to Tk. 1000 Up to Tk. 100000 Over Tk. 100000 Up to Tk. 500000
and over
Rate Tk. 20 Tk. 30 Tk. 50 Tk. 100
Exhibit 4: Customer Services at a glance provided by Rajshahi Branch
Money transfer
Customer check
collection
Customer bills
collection
DD
Customer
services
MT
TT
PO
Western union
money transfer
Advice
Same Bank
Other Bank
Electricity Bills
Water Bills
Telephone Bills

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Table 9: Commission charged on commercial service
Source: Manager, Rajshahi Branch, RAKUB.
4.3.3 Loan services:
Banks loan portfolio has been classified under the following heads;
a) Short Term Loan (STL): Loan period is 1 year.
b) Medium Term Loan (MTL): Loan period is above 1 to 5 years.
c) Long Term Loan (LTL): Loan period is more than 5 years
Service Charge Tk.
Demand Draft 0.10%(minimum Tk. 30)+VAT
Telegraphic Transfer 0.10%+VAT with Tel. cost
Payment Order
Up to Tk.1000 Tk.20+VAT
Up to Tk.1,00,000 Tk.30+VAT
Over Tk.1,00,000 Tk.50+VAT
Up to Tk.5,00,000and over Tk.100+VAT
Mail Transfer Minimum Tk.30+ Postal
cost(Tk.50)+VAT
Cancellation Charge of DD, MT, TT, PO
Up to Tk.500 Tk.25+VAT
Over Tk.500 Tk.50+VAT

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4.4 SECTORS IN WHICH RAKUB EXTEND CREDIT
Rajshahi Krishi Unnayan Bank, Rajshahi branch extends credit in sectors and sub sectors,
which are as follows:
Table -10: Description of project to extend credit
SL.
No.
Name of the Project Description of project item
01 Tea industries Seeding production, Tea garden development, Tea marketing.
02 Rubber plantation
project
Rubber garden development, Rubber production and marketing.
03 Poultry Poultry boiler farms, Poultry hatchery, Poultry feed and allied
project.
04 Mixed farming Dairy live stock and Fishery based horticulture crops; Agriculture
based poultry dairy and fishery project.
05 Black Bengal goat
production
Black Bengal goats, Sheep & Cattle farming for quality meat
production, and Meat processing and Marketing.
06 Dairy farming Milk production, Milk collection and processing.
07 Agro based industries Commercially profitable sweet water fish and Shrimp feed
production, Ice plant, Ice-cream factory and so on.
08 Agro-equipment
production
Engineering work shop for Agro-equipment, Repairing agro
equipment and Marketing.
09 Cold storage Cold storage for potato preservation, Specialized mini-cold
storage for fruits, Vegetables and Fish preservation.
10 Export processing Fish freezing plant, Fish dehydration plant, Leather processing
and manufacturing Leather products.
11 Animal and fish feed
meal production
Poultry and Fish feed meal production, Cattle, Goat, and Lamb
feed meal production.
12 Import substituting
goods production
Fish net manufacturing/Netting yarn production, Insecticide
production.

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4.5 INTEREST RATE ON LOAN
Bank determines the interest rate differently for different sector. Considering interest rate on
deposit, administrative cost, bank rate, interest rate at others bank and financial institutions,
competitive money market etc, the banks use its rate of interest on loan.
Table-11: Rate of interest in different sectors.
SL No Heads of loan Rate of interest
01 Crops loan 10%
02 Fisheries 12%
03 Export credit 7%
04 Working capital 13%
05 Commercial purpose 11%
06 Agro-based industries 13%
07 Cottage industries 10%
08 SECP 15%
09 Poverty alleviation 12%
10 Live stock 10%
11
12
Irrigation equipment and firm machinery
Other Special Program
10%
4%
Source: Manager, Rajshahi Branch, RAKUB
4.6 PROCEDURE TO OPEN AN ACCOUNT AT RAJSHAHI BRANCH
Though RAKUB is a specialized Banking institution, it provides commercial Banking facilities.
As a commercial function, it provides opportunity for the customer to open account with the Bank.
Opening account is an agreement between the customer and the Banker. The general procedure to
open account with RAKUB is given below:
(i) Obtaining proposal from a prospective customer.
(ii) Obtaining the form duly filled up with KYC form
(iii) To Supply the account opening form.
(iv) Obtaining the form properly filled up.
(v) Interviewing the applicant.
(vi) Having introduction.

25
(vii) Collecting at least three-specimen signature in the signature card supplied by the Bank.
(viii) Providing deposit book and obtaining initial deposit.
(ix) Having accounts number.
(x) Providing cheque book in order to with draw deposited amount from current and saving
account.
In case of joint accounts, the applicant must furnish the following information -
(i) The name of the person who will operate upon the account and sign cheques.
(ii) At the event of death of either or any of the accounts holders how the balance will be paid and to
whom the securities will be devolved. The documentary requirements are almost a like the individual
accounts. Account opening form and the special instruction must be signed by all the joint account
holders to signify their consent.
Things considered to open an account are:
 Proper fill up of the application form.
 Getting an specimen signature of a customer
 Taking initial deposit in cash.
Basically a person whose age is 18 years or more is competent to open an account with the
bank. But there are some special types of account holder like joint account, minor account, illiterate
person account, blind person account, Deaf and dumb account etc. The following parties can never
open an account with the bank-
 Person who is still bankrupt.
 Person whose mind is unsound.
 Person who is totally mad.
4.7 PROCEDURE TO CLOSE AN ACCOUNT
In order to close an account (some time before maturity in case of FDR) the holder has to
place a written application to the bank. After receiving the application the bank will deduct service
charge at an amount necessary for the respective account as closing fee from the balance and rest of
the money is given to the account holder.
4.8 WHEN BANK CLOSE AN ACCOUNT
The relationship between bank and his customer is a contractual one and may be terminated
by either of them. Bank closes an account in the following situations;
1. If a customer places written application to the bank to close his account.
2.If the customer does not properly follow the rules and regulations necessary to operate his
account.
3.If the bank is notified the message of death of a customer.
4.If the bank receives a notice regarding the insanity of his customer.
5.If the bank receives any order from court regarding the closing of the customer‟s account.

26
4.9 TYPES OF ACCOUNTS HOLDER
There are the following types of account holder in RAKUB Rajshahi branch:
I. Individual Account
II. Joint Account
III. Non Business Firm
IV. Business Firms.
4.10 SPECIAL TYPES OF ACCOUNT HOLDER
Banker and customer are is a contractual relationship provided and account is opened with
the bank. A person is considered competent when his or her age is eighteen (18) old years or more to
open of an account with the RAKUB. Besides these, there are some special types of account holders
in Rajshahi branch who are listed below:
i. Minor:
A minor with the RAKUB can open an account, but he or she cannot operate his or her account. The
minor will have a guardian who will operate the minor‟s account. In this account money can be
deposited only and it cannot be withdraw until the minor reaches his or her 18 years old.
ii. Illiterate persons:
Persons who are illiterate can open accounts in the bank but no cheque is supplied to them. They will
have to put thumb mark in front of the manager and they are given loose cheque to withdraw money.
iii. Blind persons:
Persons who are blind can open account in the bank and the procedure is same as the illiterate
persons. In both the cases, the terms and conditions of opening accounts are to read out in front of
them. If they agree with it, the accounts are opened.
iv. Pardanashin Women:
A pardanashin woman can open an account with the RAKUB but she has to agree with the statement
that she must be ready to put signature in front of the manager to judge the similarity between her
putted signature and the specimen signature at the time of with drawing money.
v. Dumb and Deaf:
The dumb and the deaf can account with the bank but the banker should be cautious about the
background and the character of the said persons.
The under mentioned three persons can never open account with the RAKUB.
 The individual who is totally mad
 The individual who is still bankrupt
 The person whose mind is unsound, that is lunatic.

27
4.11 CASH PAYMENT
In this section I gathered practical experience about how a check is honored and how
cash is paid. The formalities involved in honorees of a check and cash payment are given below:
The formalities involved in honorees of a check and cash payment are given below-
COUNTER
Customer places the check to the ledger officer (LO). The LO receives the check, enters its
particulars in a register and issues the customer a token.
VERIFYING THE CHECK
The LO now verifies the ledger of the customer. If the customer‟s account position is okay, he passes
the check to the second officer (SO).
HONORING THE CHECK
The SO compares the customer‟s signature given on the check with that on the signature card kept in
his custody. If the signature is okay then he makes an entry of the check in another register and
cancels it by signing across the check.
CHECK CANCELLATION
Once the check is cancelled that is Okayed for payment it Is brought to the cashier by a peon.
DRAWING MONEY
Cashier enters the amount of the check in the cash register and pays the appropriate amount to the
customer.
POSTIN IN THE TRIAL BALANCE
At the end of banking hour a trial balance is prepared from the registers and all the registers are
compared with one another.

28
4.12 CASH RECEIPT
Customers‟ deposits are received in this section of bank. Then the amount received is
credited to the customers‟ A/C in the ledger book. The formalities that are followed to receive a
customers‟ deposit (cash) in the cash receipt section are stated in the following flow chart-
Customer places this cash and deposit slip before the respective officer at
the counter.
After receiving the cash and deposit slip, the officer makes an entry to scroll register book. Then the
deposit slip and cash are placed before cashier.
The cashier counts this amount of money first and then makes an entry to another register book. The
book is generally called cashbook.
Then the cashier passes the cashbook and deposit slip to the second officer.
After verifying the deposit slip, the second officer returns the counter-folio of the deposit slip to the
customer and keeps the other position in his custody.
At the end of banking hour, trial balance is prepared from that cash receipt register.
4.13 CHEQUE HONORING PROCEDURE
I. After placing the cheque, the respective Banker issues a token;
II. The Banker also given an entry into register;
III. The Banker puts token number and initial behind the cheque.
IV. The Banker provides ledger posting of the cheque amount; and marks it on the cheque,
V. The second officer now places a pay order in the cheque.
VI. The cheque is sent to the cashier and, and
VII. Finally the cheque amount is paid to the customer against his respective token.

29
4.14 CHECK DISHONORED BY BANK
During the internship program, I was taught how a check is dishonored by bank. The statutory
duty of a bank is to honor his customer‟s check. But a bank can dishonor a check for various reasons.
Some of the reasons for that a bank dishonors his customer‟s check are stated below
I. If the customer‟s account position is not okay, that is if the amount of money mentioned in
the check is greater than customer‟s deposit.
II. If the check is torn.
III. If the check is post dated or a stolen checks.
IV. If the customer‟s signature given on the check is a forged one or does not tally with his
specimen signature kept in bank custody.
V. If the check is not submitted to the customer within banking hour.
VI. If the duration of issuing the check is more than 6 months.
VII. Others.
4.15 CONCEPT ABOUT CASH SCROLL, CLEAN CASH,GENERAL
LEDGER AND GENERAL LEDGER ABSTRACT
Cash Scroll:
At first those transactions are maintained in this cash scroll by the authorized officer, which occurred
every day. There after the, cashier maintained those transactions in daily transaction register.
Clean Cash:
When the vouchers are closed, the accounts are written in the pure cashbooks. It may be either
deposit or expense. The transactions of each head, which have occurred, are written in the specific
page of the cashbook under a specific head and debit and credit total are determined. There after,
total of every head is written in the right page of the clean cashbooks. But this is the cashbook, the
closing balance of the previous day is shown as an initial balance for the next day then the closing
balance is determined for that day.
General Ledger:
General Ledger is the heart of a Bank. The balance of clean cash is recorded in this Ledger head
wise.
General Ledger Abstract:
The debit balance of various accounts makes General Ledger Abstract. The debit and credit balance
of the accounts are maintained in the Abstract in the debit and credit side respectively. Since the
double entry system is maintained, therefore its debit and credit are equal.

30
4.16 ACCOUNTING PROCEDURE
The main objectives of maintaining the accounting procedure of RAKUB, Rajshahi branch are
to achieve in following goals:
 To record the day-to-day transaction.
 To reflect the financial position periodically.
 To supply the necessary information for monitoring the Bank activities.
 The Bank generally uses two types of Books.
A) Control Book:
It presents the immediate accounting figure of the Bank at any time and it includes
 Cash Scroll Book
 Clean Cash Book
 General Ledger
 General Ledger Abstract
 Supplementary Ledger Book
B) Subsidiary Book:
It is used to arrange the total particulars in General ledger and it includes:
 Savings Account Ledger
 Fixed Deposit Ledger
 Income Ledger
 Expenses Ledger
 The General Ledger of RAKUB.
4.17 DIFFERENT TYPE OF VOUCHERS
Voucher is a kind of document which as a proof accuracy.
i) Payment Voucher: Sanctioned crops loans are paid through payment voucher.
ii) Transfer Voucher: This voucher is used to transfer Tk.. from one account to another in
case of inter Banking. Its color is yellow.
iii) Debit Voucher: To deposit or get Tk.. Its color is white.
iv) Credit Voucher: Voucher for repayment. Its color is green.
4.18 PROCEDURE OF LOAN RECOVERY
The main responsibility of bank manager and loan officer is to recover the outstanding loan.
Rajshahi branch, RAKUB uses the following two procedures with a view to recovering loan;
a) Usual procedure.
b) Legal procedure.

31
a) Usual Procedure: The usual loan recovery procedure is divided into several steps. They are
as follows:
 Issue of Demand Notice: Demand notice is issued to the borrower before one month
being due of outstanding loan or installment.
 Legal Notice: If the borrower does not repay their respective loan and interest after
maturity, being received the demand notice registered with acknowledgement by
post to the borrower, then the bank should send legal notice to him.
 Special Notice: Beside the above two notice a special notice with the signature of
DC, UNO is sent to the respective borrower to keep mental pressure on him for
repaying the loan.
 Field Recovery: Loan officer recover the loan through I.O. receipt by visiting the
spot and source of the borrower.
 Personal Communication: If the borrower fails to repay his loan installment, the loan
officer communicates with the respected persons of that area to give mental pressure
to the borrower so that he repays his respective loan.
 Loan Recovery Camp: RAKUB, Rajshahi branch made camp in various areas for the
recovery of loan. In this case, the manager and other officers were present in the
camp and communicate with borrowers. They pursue them morally and tried to
encourage them to repay their loan.
 Loan recovery with the help of interest exemption: The loan amount which becomes
more than double of principle amount and which is not possible to recover with the
help of legal action, then those loan can be recovered by exempting interest. By this
way bad loan can be recovered.
b) Legal Procedure: When usual procedure for recovering loan becomes failed, then a case is
filed against the borrower. The case is generally filed for the following causes;
 Unwilling to repay loan although he is financially solvent.
 Every effort of loan recovery becomes failure.
4.19 DAILY ACTIVITIES OF BRANCH MANAGER
 To enter office one or before 10 a.m.
 To sign in attendance book.
 Utilization and reservation of volt‟s key to keep out money from volt. To keep out cash from
volts in own hand and start activities.
 Distribution of work among the Bank personnel according to their level.

32
5. 1 INTRODUCTION
The present study is a pioneering attempt in the field of financial performance of Rajshahi
Branch of RAKUB. It is true that financial performance is really important for realizing original
financial position of a bank. This study is taken to enlighten the biases inherent problems of the bank
which need a depth analysis for the survival of the bank in the situation of its chronic financial
problems. Rajshahi Branch of RAKUB is mainly functioned in the field of agriculture. For
developing our overall economic condition it is essential to increase the financial efficiency of
Rajshahi Branch of RAKUB. Govt. of Bangladesh has also given greater emphasis on this sector.
Profit and loss are the main criteria to evaluate the performance of the banks like others business
organizations. A bank can be considered as a successful when it can provide maximum dividend to
the shareholders. As a student of MBA I have considered all these matter and planned this study for
the performance evaluation.
5.2 CONCEPT OF PERFORMANCE EVALUATION
The performance is bad when the actual items differ from the standard. Financial
performance means the financial strength and weakness of a firm. Therefore, we can say that
financial performance is the picture of financial results of a firm.
5.3 OBJECTIVES OF PERFORMANCE EVALUATION
To determine the extent to which management assigned responsibilities have been realized,
 To identify the causes of deviation from established performance standard.
 To suggest courses of action to rectify out of control situations.
 To provide motivation for improving in performance.
 To established a basis for comparison between different sectors in companies.
5.4 FINANCIAL ANALYSIS
Financial Analysis refers to an assessment of the viability, stability and profitability of a
business, firm, bank, NBFIs etc. It is performed with a view to assess the financial health of firm by
using various financial tools that are applied on the information taken from financial statements and
other reports. These reports are usually presented to top management as one of their basis in making
business decisions.
5.5 GOALS OF FINANCIAL PERFORMANCE ANALYSIS
Its goal is to assess:
a. Profitability –
It is the firm‟s ability to earn income and sustain growth in both short-term and long-term. A
company‟s degree of profitability is usually based on the income statement, which reports on the
company‟s results of operations.

33
b. Solvency –
It is the ability of the firm to pay its obligation to creditors and other third parties in the long-term.
c. Liquidity –
It is the ability of the firm to maintain positive cash flow, while satisfying immediate obligations.
Solvency and liquidity both are based on the company‟s balance sheet, which indicates the financial
condition of a business as of a given point in time.
d. Stability-
It is the firm‟s ability to remain in business in the long run, without having to sustain significant
losses in the conduct of its business. Assessing a company‟s stability requires the use of the income
statement and the balance sheet, as well as other financial and non-financial indicators.
5.6 DIMENSIONS OF ANALYSIS
Past Performance - Across historical time periods for the same firm (the last 5 years for example),
Future Performance - Using historical figures and certain mathematical and statistical techniques,
including present and future values. This extrapolation method is the main source of errors in
financial analysis as past statistics can be poor predictors of future prospects.
Comparative Performance - Comparison between similar firms.
Important tools used in the financial analysis of a bank:
 Ratio Analysis:
A ratio expresses the mathematical relationship between one quantity to another. Through ratio
analysis can identify financial strength and weakness of a firm. By analyzing ratios we can easily
understand the actual financial condition of the firm.
Importance of ratio:
 To measure general efficiency
 To measure financial solvency
 Forecasting and planning
 To facilitate decision making
 Aid in corrective action
 Aid in intra-firm comparison
 Trend analysis:
Trend analysis is an important criterion which can be used to evaluate the performance of a
bank. The trend can represent the growth or decline of a bank over a period of time. Here we have
analyzed the trend of total deposit, total loan and advances and net income or loss.

34
5.7 TREND ANALYSIS
Here are some Trend Analysis-
5.7.1 TREND ANALYSIS OF TOTAL DEPOSIT
Table 12: The amount of total deposit (from the FY 2008-2009 to 2010-2011)
Financial year 2008-2009 2009-2010 2010-2011
Deposits type Number Amount Number Amount Number Amount
Term Deposit 63 121598 71 193937 77 223359
Savings Deposit 2364 16868 2502 19146 2725 25147
Current Deposit 166 14790 286 9271 192 9004
STD 28 46857 29 148017 29 117781
DPS 29 5147 27 5215 26 5376
RPS 319 22149 301 24155 250 23667
RGPS 93 1814 85 2374 59 2044
Huzz Savings Program 01 65 01 83 01 102
RSS 96 351 222 2086 280 4998
Others Deposit 2922 928 2920 962 2925 923
Total 6081 230568 6444 405246 6564 412401
(Source: Report of Rajshahi Branch of RAKUB)
The behavior of deposit are shown in graphically from 2006 to 2011(Figure 1)
Comment:
Here we see that in 2011 year the deposit is collected huge amount than other previous year and in
year 2008 is the lowest collection of deposit. Because of unavailability of data I present only 3
FY data in Total Deposit table.
2006 2007 2008 2009 2010 2011
2006 2007 2008 2009 2010 2011
293518 290464
164709
230568
405246 412401
Total Deposit
Deposit Amount ( in thousand )

35
5.7.2 TRENS ANALYSIS OF LOAN DISBURSEMENT
Table 13: The amount of loan Disbursement (From FY 2006-2007 to 2010-2011)
FY Loan
disbursement
Payment to
depositor
Payment to
other branch
Misc. office
exp.
2006-07 630.23 3129.81 51.04 223.32
2007-08 205.18 3934.15 1009.34 233.55
2008-09 377.82 6308.02 1349.50 191.97
2009-10 431.02 6460.58 ----- 250.00
2010-11 428.80 9002.78 2634.88 399.97
(Source: Report of Rajshahi Branch of RAKUB)
The behavior of loan Disbursement are shown in graphically (Figure-2)
Comment:
Here we see that in FY 2006-2007 the loan is Disbursed huge amount than other FY.
In the FY 2007-2008 it is shown the lowest loan Disbursement in amount.
0
100
200
300
400
500
600
700
2006-07 2007-08 2008-09 2009-10 2010-11
630.23
205.18
377.82
431.02 428.8
Loan disbursement (Amount in thousands)

36
5.7.3 TREND ANALYSIS OF LOAN RECOVERY
Table 14: The amount of loan Recover. (From the FY 2006-07 to 2010-11)
Financial year Target Achievement Performance (%)
2006-07 832.62 629.77 75.64%
2007-08 888.40 715.39 80.52%
2008-09 1652.00 1855.87 112.34%
2009-10 283.46 297.31 105.00%
2010-11 386.19 418.83 108.45%
(Source:Report of
Rajshahi Branch
RAKUB
The behavior of loan Recovery are shown in graphically (Figure 3)
Comment:
It is evident from the above table that loan recovery achievement is increased from 2006-07 to 2010-
11. The achievement rate is also increased from 2006-07 to 2008-09 and the year from 2009-10 to
2010-11 is decreased but that are preferable. The highest recovery rate is found in 2008-2009
(112.34%) and the lowest recovery is found in 2006-2007 (75.64%).
0
500
1000
1500
2000
2006-07
2007-08
2008-09
2009-10
2010-11
832.62 888.4
1652
283.46 386.19
629.77 715.39
1855.87
297.31 418.83
Target Achievement

37
5.8 RATIO ANALYSIS
Ratio analysis is an important technique to evaluate the financial performance of a firm. It
is defined as the systematic use of ratio to interpret the financial statements so that the strengths and
weakness of a firm as well as its historical performance and current financial condition can be
determined.
Liquidity Analysis:
A financial firm is considered liquid if it has ready access to immediately spend able funds
at reasonable cost at precisely the time those funds are needed.
5.8.1 CURRENT RATIO
Current ratio measure the ability to meet current debt or obligation with current assets.
Current ratio can be determined by dividing current asset by current liabilities. Current asset include
cash and deposit in other bank, agricultural credit loan (Short term), cottage industry loan (Short
term), other loans and advance (Short term), cash loan, other asset which can be converted into cash
within a year such as marketable securities. On the other hand the current liabilities include demand
deposit (general), deposit from banks, other demand liabilities in government sector, private sector,
and other sector current year. Current Ratio can be calculated by the following formula
Current ratio=
libilitiescurrent
assetcurrent
Table 15: The amount of total current assets and current liabilities of Rajshahi branch from
2006 to 2011:
Year Current assets
(in thousand)
Current liabilities
(in thousand)
Ratios
2007 71724 157550 0.455246
2008 92834 42158 2.202049
2009 57387 115266 0.497866
2010 40256 158236 0.254405
2011 42589 182365 0.233537
(Source: annual report of Rajshahi branch from 2007 to 2011).

38
Comment:
Generally we know that higher the current ratio means the greater the liquid position of firm.
And actually which amount of ratio is acceptable for firm that depends under which industry it
belong. We also know that higher liquidity reduce the profitability. We found in the table that the
lowest current ratio in the year 2011 here bank may fall in liquidity crisis and the highest ratio in the
2011. So the Branch position in current ratio is better position to meet the short term obligation as
they come due in the year of 2007.
Now we make the average of this ratio using the moving average method. We take 5 years data and
we use two year average to make trend of Current ratio of Rajshahi Branch of RAKUB. When we
use the moving average we deduct one previous year when we add any new year. Bellow table shows
the moving average data of current ratios from 2007-2008 to 2010-2011.
The moving average data of current ratios from 2007-2008 to 2010-2011:
Table 16: Moving Average data of current ratios
Year Average
2007-2008
1.328648
2008-2009
1.349958
2009-2010
0.376136
2010-2011
0.243971
Now Graphically…(Figure 4)
1.328648 1.349958
0.376136
0.243971
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
2007-
2008
2008-
2009
2009-
2010
2010-
2011
Average
Average

39
Comment:
From the calculations we see that the trend goes down dramatically that means on an average the
ability to meet the short term obligation is decreasing.
5.8.2 PROFITABILITY RATIO
RAKUB is a specialized Bank. The entire ratio of Profitability Ratio is not applicable but in
this case we can use operating profit ratio. Operating profit ratio measures the profitability of sales
before taxes and interest expense. The purpose of this ratio is to measure the effectiveness of
production and sales of the company‟s product in generating pretext income for the firm. For any
given level of sales the higher the net operating margin the better. It represents the pure profit earned
on each sale. Operating profit measures the pure profit because they measure only the profit earned
on operating profit margin. The operating profit margin can be calculated as follows:
Operating profit margin =
Sales
profitOperating
The operating profit of RAKUB, Rajshahi branch in 2007 to 2011 are given bellow:
Table 17: The operating Profit of Rakub
Year Operating profit (in thousands)
2007 1218
2008 (497)
2009 3020
2010 1653
2011 (4457)
(Source: annual report of Rajshahi branch from 2007 to 2011)
Graphically… (Figure 5)
-6000
-4000
-2000
0
2000
4000
2007 2008 2009 2010 2011
Year , 2011
Operating profit
(in thousand), -
4457
Operating profit (in thousand

40
Here we see that in 2008 and 2011 the operating loss and in 2007,2009,2010 years RAKUB Rajshahi
branch made profit .in year 2009 this branch made highest operating profit.
Now we need sales to calculate the operating profit, here we consider as sales
Sales = total loans Disbursement of this year + total services commission of this year.
The amount of sales of RAKUB, Rajshahi branch in 2006 to 2010 are given bellow:
Table 18: The amount of Sales
Year Sales (thousands)
2007 127689
2008 63243
2009 20563
2010 43315
2011 38200
Graphically… (Figure-6)
Here we see in year 2007 the sales of Rajshahi branch is highest and in year 2009 is lowest.
Year0
50000
100000
150000
2007 2008 2009 2010 2011
Year
Sales (thousand)

41
Now we need to find out the Operating profit margin from 2006 to 2010 given bellow:
Table 19: Operating Profit Margin
year Operating
profit
Sales Operating
profit margin
2007 1218 127689 0.01
2008 -497 63243 -0.008
2009 3020 20563 0.15
2010 1653 43315 0.038
2011 -4457 38200 -0.12
Comment:
Profit margin on sales provide a little useful information since it mixes the effectiveness of
sales in producing profit with the effect of the method of financing on profit , it is useful since it
reflects pricing policy relative to cost. From the above calculation we see that in year 2009 operating
profit margin is highest and the year 2011 made highest operating loss.
To make trend we need the average of this ratios so we use the moving average to know the behavior
of the operating profit of Rajshahi Branch, RAKUB. We use the two year average.
The moving average data of Operating profit margin from FY 2006-2007 to 20010-2011:
Table 20: The moving Average Data of Operating Profit Margin
Year Average
2006-2007 0.001
2007-2008 0.071
2008-2009 0.094
2009-2010 0.094
2010-2011 -0.041

42
Graphically… (Figure 7)
Comment:
Though in 2011 shows negative figure of operating Profit Margin but before, that it was upward.
5.8.3 ACTIVITY RATIO
Activity ratios measure the speed with which various accounts are converted into sales or
cash inflows or outflows. With regard to current account, measures of liquidity are generally
inadequate because different I n composition of a firm‟s current asset and current liabilities can
significantly affect its „true‟ liquidity. It is therefore important to look beyond measure of overall
liquidity to assess the activity of current account. There are various important ratios are available but
we use the total asset turnover for Rajshahi Branch of RAKUB.
Activity ratios measure the speed with which various accounts are converted into sales or
cash inflows or outflows. With regard to current account, measures of liquidity are generally
inadequate because different I n composition of a firm‟s current asset and current liabilities can
significantly affect its „true‟ liquidity. It is therefore important to look beyond measure of overall
liquidity to assess the activity of current account. There are various important ratios are available but
we use the total asset turnover for Rajshahi Branch of RAKUB.
Total asset turnover:
Total asset turnover indicates the efficiency with which the firm uses its asset to generate sales. Total
asset turnover is calculated as follows:
Total asset turnover =
assetTotal
sales
-0.05
0
0.05
0.1
0.001
0.071
0.094 0.094
-0.041
Average
Average

43
The amount of total assets of Rajshahi branch,from 2007 to 2011.
Table 21: Amount of Total Assets.
Year Total Asset(in thousands)
2007 361660
2008 352615
2009 307413
2010 489916
2011 516818
We can show the total assets behavior of Rajshahi Branch graphically.(Figure 8)
In year 2011 the total asset is highest and in year 2009 the total asset is lowest.
Table 22: Total asset turnover in year 2007 to 2011 are given bellow:
Year Sales (thousand) Total Asset(in thousands) Total asset turnover
2007
127689
361660 0.353064
2008
63243
352615 0.179354
2009
20563
307413 0.06689
2010
43315
489916 0.088413
2011
38200
516818 0.073914
0
200000
400000
600000
2007 2008
2009
2010
2011
2007 2008 2009
2010
2011
361660 352615
307413
489916 516818
Year Total Asset
(in thousand)

44
Comment:
Generally higher the firm‟s total asset turnover, the more efficiently its asset have been used.
This measure is probably of greatest interest to management, because it indicates whether the firm‟s
operation s has been financially efficient.
Trend of Total asset turnover from 2007 to 2011:
To make trend we need the average of this ratios so we use the moving average to know the
behavior of the total asset turnover of Rajshahi Branch, RAKUB. We use the two year average.
Table 23: Average of Total Asset Turnover
Year Average of Total asset turnover
2007-2008 0.266209
2008-2009 0.123122
2009-2010 0.077652
2010-2011 0.081164
Comment:
From the above calculations we see that the trend of average total asset turnover is
decreasing up to 2008-2009 but after this session this average of total asset turnover is going up
ward, in year 2007-2008, the average of total asset turnover is in good position than other year.

45
6.1 FINDINGS OF THE STUDY
The basic findings of the study can be categorized under two head:
1) Aspects of the Problem
2) Aspects of the Prospects
Aspects of the Problem:
 The process which is followed by this branch in case of loan disbursement is so much
lengthy and critical process.
 Political Influence is a barrier for the preferable loan disbursements for the authority.
 Though Disbursement of Loan is increasing now but not in satisfactory way.
 Current Ratio that is current asset to current liability is significantly lower.
 Sales are decreasing.
 Operating profit is decreasing over the year thus profit margin also decreasing.
 Asset turnover ratio is lower and decreasing day by day.
 There has no proper training facilities for the personnel related with fund management.
 We know that agriculture depends mostly on nature so the loan recovery position is hindered
due to natural calamities.
 RAKUB disburse its loan mainly against the security of land. But in real sense most of the
farmers are landless.
 All the transactions are recorded manually so information is not organized which creates
problem in decision making.
Aspects of the Prospects:
 Amount of Deposit is increasing.
 Total asset is also increasing.
 Average profit margin is also increasing.
 Targeted Recovery of Loan amount is increasing satisfactory way that indicates good
management.
 From the Month January 2012 new manager (joined July 2011) has taken some steps and he
beliefs coming June closing Branch will figure profit after long time.

46
6.2 RECOMMENDATIONS
Recommendation on any matter within a limited time period is very hard task. However, during
my internship program it seems to me that following recommendations could improve the overall
performance of the Rajshahi Krishi Unnayan bank,Rajshahi Branch:
 Steps should be taken to improve the disbursement of loan.
 Special care should be taken for recovery of loans.
 There should have proper supervision.
 Value of service should be increased.
 Management Information System should be developed.
 Proper utilization of fund must be ensured.
 Policy should be taken in time.
 Proper step should be taken to fulfill the target in collection & disbursement of fund.
 Deposit mobilizations have to be increased.
 Banks personnel behavior should be friendly to their customers.
 Selection of genuine borrower.
 Spot investigation must be ensured in case of security.
 Strong monitoring should be ensured for proper utilization of fund.
 Diversified sectors are to be identified and financed.
 The procedure of loan disbursement should not be lengthy.
 Banks will have to keep itself beyond all political influences.
 Prompt services are given to the borrower.
 Maintained credit discipline.
 In providing loan, land mortgaged security should be preferred for best results.
 In addition to take legal steps against defaulter, recovery of agricultural loan can be enhanced
by staff incentives for better loan recovery.
 Most of the borrowers are marginal and landless. So Bank should relax the condition of
collateral.
6.3 CONCLUSION
As financial condition of the rural people of our country is very miserable, so they compel
to diverse their borrowed money for family private expenses and festival expenses. Due to illiterate
and lack of technical knowledge, the farmers of our country do not use borrowed money properly.
Crops are destroyed in natural calamities like flood, rain with hail, etc. As a result default culture has
been created and loan default is one of the major problems of our country.
Loan disbursements of RAKUB have been decreased and recovery has been increased since
2008. It indicates the efficiency of the Management. In the recent time total deposit has been
increased. New manager is trying to bring a positive change on overall activities of RAKUB
Rajshahi Branch. That is a positive sign for the Branch. We belief and can hope this organization will
be a positive role-making entity in our economy in the near future.

47
BIBILIOGRAPHY
 RAKUB annual report- 2006-07, 2007-08, 2008-09, 2009-10& 2010-11.
 Statement of affairs of RAKUB Rajshahi Branch for the financial year-2006-07,
2007-08, 2008-09, 2009-10, 2010-11.
 Illustrated Oxford dictionary.
 Bangladesh Bank Annual Report-2011.
 Website of RAKUB www.rakub.org.bd

Banking Performance and Evaluation of RKUB

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