Corporate Governance Practices in Bank Asia, BD.

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“Corporate Governance in
Bank Asia Limited”
Independent University, Bangladesh
Submitted to
Dr. Zahurul Alam
Faculty of Corporate Governance (FIN 547)
School of Business
Independent University, Bangladesh
Submitted by
Name ID
1. Farabi Ahmed 121-121-8
2. Mishkat Zannat 093-102-3
3. Mir Rashadus Sabbur 092-072-1
4. Md. Jedar Hossain 142-060-9
5. Md. Nazmul Hoque 093-020-0
Date of Submission: 21st July, 2015

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Letter of Transmittal
21st July, 2015.
Dr. Zahurul Alam
Course Instructor
Corporate Governance (FIN 547)
Faculty Member of School of Business,
Independent University Bangladesh.
Subject: Submission of Assignment on “Corporate Governance in Bank Asia Limited”.
Dear Sir,
With due respect, I would like to inform you that I have completed report on “Corporate Governance In
Bank Asia Limited”. It is immense pleasure for me because I have successfully completed this report by
receiving your continues guideline as a supervisor.
I have endeavored to prepare this report from my level of best to accumulate relevant & insightful
information. We believe this report provides overall a complete idea about the situation. Definitely we
enjoyed a lot while working in this topic and gave our level best effort to finish it up within the deadline.
It is a great experience for me to make this report. I have tried to make the report comprehensively within
the schedule time & limited recourse. We sincerely hope that all our effort will be succeeded if you go
through this paper.
You‟re sincerely
………………………
Farabi Ahmed
ID: 121-121-8
(On the behalf of Group)

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Acknowledgement
At first we would like to thank our honorable course teacher Dr. Zahurul Alam for giving us the auspicious
chance to work with the topic. In fact it is very important for us, as we are the students of MBA and who
are doing Businesses. We would like to express our heartiest gratitude to all of us.
And we would like to thank all the personalities who helped us for making our report. We would like to
thank our honorable course instructor Dr. Zahurul Alam for her kind and considerable help for the
preparation of our report on “‟Corporate Governance Practices of Mercantile Bank Limited‟‟. He has
helped us throughout the time and has given us advice and guidance for any kind of help we wanted
without being a bit irritated. His helpfulness has always inspired us. We would be ever grateful to him. We
would like to give thanks to Mr. Moshiur Rahman Khan(FAVP) from Bank Asia for his continuous support .

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Executive Summary
Banking sector plays an important role in development of our countries economy. In this sector
board of directors often plays an important role in corporate governance. Bank Asia Limited provided its
service with a vision to serve people with modern and innovative banking products and services at
affordable charge. This study examine the corporate governance compliance practices in Bank Asia with
Security and Exchange Commission‟s notification is better than average practices by the companies
listed in stock exchanges of Bangladesh. Comparatively Bank Asia has been strictly followed the SEC‟s
guidelines, Bangladesh Bank‟s guidelines, others regulatory bodies‟ guidelines and legal obligations. In
Bank Asia, corporate governance means increasing the stakeholders‟ value by being efficient &
professional to the organization, transparent and accountable to the shareholders and responsible to the
society and the environment. Independent Directors and other members is highly educated, esteemed
professional or successful businessman with long experience in banking industry. Under the Board of
Directors, there exists Execute Committee, Audit Committee and Risk Management Committee as per the
Corporate Governance guidelines. Their Audit committee takes up responsibilities to supervise the
management and control various risk factors coming up from banking operation, to strengthen the internal
control system and to act as a connecting force between internal and external auditors. Their majority of
the shareholders agreed that they were informed about the agenda of the AGM and also agreed that the
outcomes of the meeting was well communicated to them. Our study shows that that minority shareholder
could nominate their candidates for directors. Equal rights should be given to all shareholders of the bank
in order to protect their rights. This study also shows majority of the respondents think shareholders and
employees have right to question decisions made by the Board. Almost all the respondents agreed that
there is a written performance evaluation of the CEO of the bank. Public disclosure is an important
element of governance in the corporate and majority of respondents agreed that the Bank discloses all
financial information as per legislation and also makes those easily available to all stakeholders. Bank
Asia Ltd. Has external auditing group as well as internal auditing group as per legislation and majority of
the respondents agreed that the auditors audit fairly and customers are a major stakeholder of the Bank
so it should make more efforts in satisfying them in order to achieve sustainable business. Bank Asia also
focuses on CSR including Higher Study Scholarship, Ophthalmological Operation, and Operating
Computer Learning Centers etc.

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Table of Contents
Subject Page No
Chapter 1 - Introduction
1.1 Introduction
1.2 Objectives
1.3 Methodology
1.4 Scope
1.5 Limitation of the Study
1.6 Literature Review
6-9
Chapter 2 - Corporate Governance Concept & Bangladesh Perspective 10-12
Chapter 3 - Profile & Banking Operation of Bank Asia Ltd
3.1 Background of Bank Asia
3.2 Vision of Bank Asia
3.3 Mission of Bank Asia
3.4 Objective of Bank Asia
3.5 Corporate Information
3.6 Management Hierarchy
3.7 Products & Services
3.8 CSR Activities of Bank Asia Ltd
13-20
Chapter 4 - Corporate Governance Practices in Bank Asia
4.1 Board of Directors
4.2 Board’s Own Structures and Practices
4.3 Executive Committee
4.4 Risk Management Committee
4.5 Corporate Governance Training & Its Objectives
4.6 Remuneration
4.7 Relation & Communication with Shareholders & Other Stakeholders
4.8 Share Holding Structure
21-27
Chapter 5 - SWOT Analysis 28-30
Chapter 6 - Findings & Analysis
6.1 Shareholder Perspective
6.2 Employee Perspective
6.3 Customer Perspective
6.4 Other Findings
31-43
6. Conclusion 44
7. Recommendation 45
8. References 46

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Chapter 01
Introduction

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1.0 Introduction
Banking industry of Bangladesh has immense influence in economy as banks are critical components of
any economy. They provide financing for commercial enterprises, basic financial services to a broad
segment of the population and access to the payment system. They have a huge investment on them and
have access to government‟s safety nets. Crucially, to protect the interests of the stakeholders‟ and
depositors‟ and to avoid unethical practices, misadventures by the management, Good Governance is a
must. In Bangladesh, the issue of corporate governance came into light in the wake of stock market
debacle in the 1996 by organizing seminars, conferences and discussion by OECD, SEC and other
scholars of corporate culture. In Bangladesh capital market, banking industry is performing better than
other industries with the risk of massive corporate scandal that can shut down a giant corporation and
harm stakeholders or even economy if too much happen! Here we are trying to focus the corporate
governance of Mercantile Bank Limited. Particularly, how they are following the guideline by SEC
ensuring transparency, full disclosure and accountability as required.
The structure of corporate governance specifies the distribution of rights and responsibilities among
company‟s different participants, such as board, management, shareholders and other stakeholders.
Transparency and accountability are its major attributes. Corporate governance covers the concepts,
theories and practices of boards and their directors and the relationship between boards and
shareholders, top management, regulators and auditors and other stakeholders.
The corporate governance of banks in developing economies is important for several reasons. First,
banks have an overwhelmingly dominant position in developing-economy financial systems, and are
extremely important engines of economic growth (King and Levine, 1993). Second, as financial markets
are usually underdeveloped, banks in developing economies are typically the most important source of
finance for the majority of firms (Levine, 2004). Third, as well as providing a generally accepted means of
payment, banks in developing countries are usually the main depository for the economy‟s savings.
Fourth, many developing economies have recently liberalized their banking systems through
privatization/disinvestments and reducing the role of economic regulation.
However, Corporate Governance practices play the pivotal role in the banking industry in Bangladesh.
This is because of the fact that Banks deal in public money. So, public confidence is of outmost
importance for the development of banking industry in Bangladesh. But, it is an alleged that the practice
of Corporate Governance in banking industry in Bangladesh is not up to the mark because of a number of
problems is reported to exist in corporate governance practices by past studies (Kutubi, 2011; Hossain,
2011).
Therefore, this study is an effort to identify the major problems involved in Corporate Governance
practices in Bank Asia Limited.

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1.2 Objectives
The main objective of the study is to pinpoint the major problems of Corporate Governance practices in
Bank Asia Limited.
In order to achieve the main objective, the study highlights the following specific objectives:
 To examine the composition of the Board size in Bank Asia Limited.
 To find out the major problems hindering good Corporate Governance practice in Bank Asia
Limited.
 To highlight the prospects of Corporate Governance practices in Bank Asia Limited by removing
the problems involved therein.
1.3 Methodology
The study aims at evaluating the Corporate Governance practices in Bank Asia Limited and find out the
existing problems in matching with the standards.
Data Collection Methods
The study is the outcome of both the primary and secondary data.
Primary Data Sources
 Discussion with the bank officers, customers and shareholders.
 Surveying
Secondary Data Sources
 Policy Guidelines on Corporate Governance
 Various relevant online articles and journals
 Annual Report of the Bank
Sample
The opinions on Corporate Governance have been collected from the respondents on the basis of three
different sets of prepared questionnaires. Data were collected from 15 randomly selected bank personnel
from Bank Asia Limited, 12 shareholders of the bank and 15 customers of the bank.
Research Instrument
A close-ended questionnaire has been used as a tool for collecting primary data for the study.
Data Analysis
The collected data have been analyzed and interpreted critically in order to make the study more
effective, valuable & useful to the readers. The results are presented in charts to obtain better visual
representations.
1.4 Scope
The scope of the report is limited to the overall description of the bank, its services, its position in the
industry and its competitive advantages. The scope is also defined by the organizational set-up, functions
and performances.

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1.5 Limitation of the Study
The present study suffers from the following limitations:
 There was a limited scope for us to deal with the banking activities directly.
 Due to lack of time sufficient information could not be gathered.
 The number of respondents for collecting primary data was small compared to the total
population.
 Enough information could not be collected due to lack of access to data.
1.6 Literature Review
Berle and Means (1932) and the even earlier Smith (1776), Zingales (1998) defines corporate
governance as “allocation of ownership, capital structure, managerial incentive schemes, takeovers,
board of directors, pressure from institutional investors, product market competition, labour market
competition, organizational structure, etc., can all be thought of as institutions that affect the process
through which quasi-rents are distributed (p. 4)”.
Garvey and Swan (1994) assert that “governance determines how the firm‟s top decision makers
(executives) actually administer such contracts (p. 139)”.
In the area of corporate governance practices of banks, three strands of literature are found.
First strand focuses on how the corporate governance practices in banks differ from those in non-banking
firms (Prowse, 1997; Furfine, 2001; Morgan, 2002; Macey and O‟Hara, 2003). Banks have two related
characteristics that inspire a separate analysis of the corporate governance of banks (Furfine, 2001).
First, banks are generally more opaque than non-financial firms. Although information asymmetries
plague all sectors, evidence suggests that these informational asymmetries are larger with banks
(Furfine, 2001). From the perspective of banking, loan quality is not readily observable and can be hidden
for long periods. Therefore, Morgan (2002) found that bond analysts disagree more over the bonds
issued by banks than by non-financial firms. The comparatively severe difficulties in acquiring information
about bank behavior and monitoring ongoing bank activities hinder traditional corporate governance
mechanisms (Levine, 2004).
The second strand of literature looks at how better governance practices in banks can help their financial
development and growth (Levine, 1997; Bushman and Smith, 2003). Bushman and Smith discussed
economics-based research focused primarily on the governance role of financial accounting information
and propose future research ideas. As presented in their study, a framework that isolates three channels
through which financial accounting information can affect the investments, productivity, and value-added
of firms namely the use of financial accounting information by managers and investors, the use of
financial accounting information in corporate control mechanisms and the use of financial accounting
information to reduce information asymmetries among investors
The third strand looks at corporate governance practices in banks from the perspective of its impact on
performance and efficiency of the banks themselves (Jensen and Meckling, 1976; Hovey et al, 2003).
Andres and Vallelado (2008) have examined the corporate governance in banking: the role of the board
of directors. They pointed out that bank board composition and size are related to directors‟ ability to
monitor and advice management and that larger and not excessively independent board might prove
more efficient in monitoring and advising functions, and create more value.

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Chapter 02
Corporate Governance Concept & Bangladesh Perspective

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Corporate governance is the set of process, customs, policies, laws and affecting the way in which
corporation is directed, administered and controlled. The United Kingdom Cadbury Report (Cadbury,
1992, p.15) defined corporate governance as “the system by which companies are directed and
controlled”. Its structure specifies the distribution of rights and responsibilities among company‟s different
participants, such as board, management, shareholders and other stakeholders. Transparency and
accountability are its major attributes. Corporate governance covers the concepts, theories and practices
of boards and their directors and the relationship between boards and shareholders, top management,
regulators and auditors and other stakeholders. As for example, Asian Development Bank (ADB)
describes corporate governance as “(i) a set of rules, that define the relationship between shareholders,
managers, creditors, the government and stakeholders, (ii) a set of mechanism that help directly or
indirectly to enforce these rules” (Asian Development Bank, 2000, p. 5).
From a banking industry perspective, corporate governance involves the manner in which the business
and affairs of banks are governed by their boards of directors and senior management, which affects
how, they:
Set corporate objectives;
Operate the bank‟s business on a day-to-day basis;
Meet the obligation of accountability to their shareholders and take into account the interests of
other recognized stakeholders
Align corporate activities and behavior with the expectation that banks will operate in a safe and
sound manner, and in compliance with applicable laws and regulations; and
Protect the interests of depositors (Basel Committee on Banking Supervision, 2006).
Good corporate governance requires appropriate and effective legal, regulatory and institutional
foundations. A variety of factors, including the system of business laws and accounting standards, can
affect market integrity and overall economic performance. Supervisors are nevertheless encouraged to be
aware of legal and institutional impediments to sound corporate governance, and to take steps to foster
effective foundations for corporate governance where it is within their legal authority to do so (Basel
Committee on Banking Supervision, 1997).
The corporate governance of banks in developing economies is important for several reasons. First,
banks have an overwhelmingly dominant position in developing- economy financial systems, and are
extremely important engines of economic growth (King and Levine, 1993a,b; Levine, 1997). Second, as
financial markets are usually underdeveloped, banks in developing economies are typically the most
important source of finance for the majority of firms (Levine, R. 2004). Third, as well as providing a
generally accepted means of payment, banks in developing countries are usually the main depository for
the economy‟s savings. Fourth, many developing economies have recently liberalized their banking
systems through privatization/disinvestments and reducing the role of economic regulation.
Corporate Governance ensures to bring transparency, accountability and professionalism in the
management system of a corporate body that enhances the credibility and acceptability to the
shareholders, employees, potential investors, customers, lenders, governments and all other
stakeholders. This is truer in case of Banking Industry. Since Banks deal in public money, public
confidence is of outmost importance in this Industry
Kutubi (2011) has examined board of director‟s size, independence and performance: an analysis of
private commercial banks in Bangladesh. This study has examined the impact of board size and the
independent directors on the performance of the local private commercial banks in Bangladesh. The
study has found that statistically significance positive relationship existed between the proportions of the
independent directors and the performance of the banks.

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Hossain (2011) highlighted the corporate governance practices in Bangladesh. The study has pointed out
that good corporate governance has implication for company behavior towards employees, shareholders,
customers & banks. He has suggested that improving corporate governance can provide significant
rewards to both individual companies and countries.
Rashid et al (2010) have examined board composition and firm performance from Bangladesh
perspective. The study has also examined the influence of corporate board composition in the form of
representation of outside independent directors on firms‟ economic performance in Bangladesh. The
finding of the study has provided an insight to the regulators in this quest for harmonization of internal
corporate governance practices.
Rashid et al (2009) have made an overview on corporate governance in Bangladesh. The study has
identified six specific corporate governance characteristics in relation to current corporate governance
practices in Bangladesh namely legal and regulatory frame work, weak institutional control, pre-dominant
of individual investors, limited transparence & weak disclosure practices etc.
Corporate governance actually deals with the duties and responsibilities of a company‟s board of
directors in managing the company and their relationships with the shareholders of the company and the
stakeholder group (Cornelius, 2004).Corporate governance is the relationship between the investor, the
management team and the board of directors of company (Levitt, 2002). Corporate governance is not
only shown and analyzed the conflict of interest and its impact on firm value, but also has unveiled good
governance principles and their implementation (Doost & Fishman, 2004).Corporate governance refers to
the rules and incentives by which the management of a company is directed and controlled to maximize
the profitability and long-term value of the firm for shareholders while taking into account the interests of
other legitimate stakeholders (Hurley and Khemani, 1998).Corporate governance refers to the private and
public institutions, including laws, regulations and accepted business practices, which in market economy;
govern the relationship between corporate managers and entrepreneurs on one hand, and those who
invest resources in corporations, on the other (Oman 2001).In addition, theory of corporate governance
can be interpreted as a theory concerned with the alignment of management and shareholder interests
(Grant, 2003).
Corporate governance issue came into light in the wake of stock market debacle in Bangladesh in 1996
by organizing seminars, conferences and discussion by Organization for Economic Co-operation and
Development (OECD), SEC and other scholars of corporate culture (Talukdar,2007). Bangladesh
Enterprise Institute in March 2004 introduces the code of corporate governance for Bangladesh. The
corporate governance issue came to front line in Bangladesh after Oriental Bank had taken by
Bangladesh Bank in2006 (Aims of Bangladesh, 2006).The Securities and Exchange Commission (SEC)
in February 2006 issued a notification and by this notification the SEC imposes condition „comply or
explain‟ to all companies listed with any stock exchange. After introducing SEC guidelines the corporate
governance practices are gradually increasing in Bangladesh, but it is in initial stage till now. 100
companies within 107 disclosed according to SEC‟s guidelines, only 18 companies fully complied with all
the conditions of SEC corporate governance guidelines, in their annual report and another seven did not
disclosed according to SEC format of corporate governance (Uddin and Begum, 2012). They also
examine corporate governance compliance gives the poor state of disclosure as well as compliance with
corporate governance in Bangladesh need to make compulsory instated of comply or explain.

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Chapter 03
Profile & Banking Operation of Bank Asia Ltd

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3.1 Background of Bank Asia
Bank Asia has been launched by a group of successful entrepreneurs with recognized standing in the
society. The management of the Bank consists of a team led by senior bankers with decades of
experience in national and international markets. The senior management team is ably supported by a
group of professionals many of whom have exposure in the international market. Bank Asia Limited is a
scheduled commercial bank in the private sector established under the Banking Company Act 1991 and
incorporated in Bangladesh as a public limited company under the Companies Act 1994 to carry out
banking business in Bangladesh. It set milestone by acquiring the business operations of the Bank of
Nova Scotia in Dhaka, first in the banking history of Bangladesh. It again repeated the performance by
acquiring the Bangladesh operations of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank.
In the year 2003 the Bank again came to the limelight with oversubscription of the Initial Public Offering of
the shares of the Bank, which was a record (55 times) in our capital market's history and its shares
commands respectable premium. The asset and liability growth has been remarkable. Bank Asia has
been actively participating in the local money market as well as foreign currency market without exposing
the Bank to vulnerable positions. The Bank's investment in Treasury Bills and other securities went up
noticeably opening up opportunities for enhancing income in the context of a regime of gradual interest
rate decline.
Bank Asia Limited started its service with a vision to serve people with modern and innovative banking
products and services at affordable charge. Being parallel to the cutting edge technology the Bank is
offering online banking with added delivery channels like ATM, Tele-banking, SMS and Net Banking. And
as part of the bank's commitment to provide all modern and value added banking service in keeping with
the very best standard in a globalize world.
3.2 Vision of Bank Asia
Bank Asia's vision is to have a poverty free Bangladesh in course of a generation in the new millennium,
reflecting the national dream. Our vision is to build a society where human dignity and human rights
receive the highest consideration along with reduction of poverty.
3.3 Mission of Bank Asia
 To assist in bringing high quality service to our customers and to participate in the growth and
expansion of our national economy
 To set high standards of integrity and bring total satisfaction to our clients, shareholders and
employees
 To become the most sought after bank in the country, rendering technology driven innovative
services by our dedicated team of professionals

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3.4 Objectives of Bank Asia
 Place customer‟s interest and satisfaction as first priority and provide customers banking product
and services.
 Value addition to the stakeholders through attaining excellence in banking operation.
 Maintain high standard and transparency in dealings.
 Be a compliant institution through adhering to all regulatory requirements.
 Contribute significantly for the betterment of the society.
 Ensure high degree of motivation and dignified working environment for our human capital and
respect optimal work-life balance.
 Committed to protect the environment and go green.
3.5 Corporate Information
Letter of Intent received 24/02/1999
First meeting of the Promoters held 15/04/1999
Certificate of Incorporation received 28/09/1999
Certificate of Commencement of Business 28/09/1999
First meeting of the Board of Directors held 01/10/1999
banking license received 06/10/1999
First Branch license received 31/10/1999
Inauguration of Bank 27/11/1999
Date of Publication of Prospectus 29/06/2003
Date of IPO Subscription 23/09/2003, 24/09/2003
Date of First Share Trading in Bourse 08/01/2004
Date of Agreement with CDBL 20/12/2005
Date of First Scrip less Trading 30/01/2006
Number of Promoters 22
Number of Directors 12
Auditors Rahman Rahman Huq Chartered Accountants
9 Mohakhali C/A,(11th & 12th Floors)Dhaka 1212,
Bangladesh
Legal Advisor Lee & Associates Barristers& Advocates
Suit # 5/8, City Heart (4th Floor),67
NayaPaltan,Dhaka-1000, Bangladesh

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3.6 Management Hierarchy

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3.7 Products & Services
Bank Asia has on offer a broad array of innovative financial services specially designed to match the
specific requirement of the clientele ranging from large corporate houses, small and medium enterprises,
to private individuals. The team of professionals assists the clients in finding the most appropriate
financing package to help the clients realize their short-term goals and long-term aspirations. Bank Asia
offers several products and packages through different banking systems. Such are-
(I) Corporate Banking
Corporate Banking unit offers banking products and services to the corporate clients customized to meet
the specific needs of those organizations. Apart from the traditional current and short-term deposit
facilities, Bank Asia helps in import and export financing through different services offered to their
corporate clients. The products and services offered by Bank Asia Limited to the corporate clients can be
divided into the following categories -
Corporate Credit: Overdraft, Import and Export Finance, L/C, Payments Against Documents (PAD),
Loan against Trust Receipt (LTR), Guarantees and Bonds, etc.
Bank Asia presents several effective credit schemes for corporate clients. The major programs are:
Working Capital Financing
Term Loans
Equity Financing
Structured Finance
Other than these schemes the bank may arrange consultative and documentary services for corporate
clients. Thus Bank Asia supports big businesses and industries of the country in their endeavor for
expansion and growth.
Payments and Cash Management: Account Management Services, Countrywide
Payments/Countrywide Collections, etc.
Customized Loans
Trade Services include Export Services, Import Services, Trade Express, Document Tracker etc.
Electronic Banking: Cash Management Services and Trade Services
(II) International Trade, Remittances
International Division at the Head Office is fully equipped with expertise including computerizes
operations to deal with foreign trade and foreign exchange operations of all kinds including L/C, Bills,
Travelers Cheques, Foreign Drafts, TTs, Remittances from Bangladeshi staying abroad and handling
students remittance studying abroad, etc. Such operations are conducted through 18 AD (Authorized
Dealer) branches throughout the country.
Bank Asia Ltd has launched Foreign Remittance in September 2003. Starting from a unit under Scotia
Branch, Dhaka, this operation is now handled by a dedicated team of young energetic and yet highly
experienced officers.
Bank Asia, now-a-days, has Agency Arrangement with 34 Exchange houses in various countries around
the world like UK, USA, Canada, UAE, Kuwait, Mauritius, Oman & Malaysia. Moreover, global brands like
Western Union, Xpress Money and Instant Cash Worldwide are also satisfactorily been served by Bank
Asia Ltd. Some other companies like Placid NK Corporation, IME, Merchantrade, Choice Money Transfer

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etc. has gone beyond their originating countries and has become global brands. Bank Asia is proud to be
an active participant in their growth.
(III) Syndication Financing
On many occasions, the financial requirement of the client, particularly for new investments is so large
that it is not possible for Bank Asia to meet the demand from the Bank‟s own resources, and also
because of regulatory restrictions. In such cases the syndication department is entrusted with the
responsibility of raising the required funds through syndication arrangement with other banks.
(IV) Small and Medium Enterprises
Bank Asia has entered into an agreement with South Asian Enterprise Development Facility (a concern of
the IFC) for Technical Assistance and training program for creating a Small and Medium Enterprise
lending segment. Under the agreement SEDF has conducted an in-house diagnostics of the existing
facility to assess the quality of corporate governance, credit risk management structure, sales and
delivery channels, quality of information technology, and the MIS structure. Such a SME product named
“Shachondo Loan” has already launched in two semi-urban branches in Dhaka and Chittagong.
(V) Retail Banking
Retail Banking provides individual and self-employed customers with a wide range of banking and related
financial services. These includes –
Savings Account Any Branch Banking
Current Account Short Term Deposit
SMS Banking Personal Installment Loan
Bonus Savings Schemes Real time online Banking
Personal Credit Deposit Pension Scheme (DPS)
Evening Banking Fixed Deposits
Monthly Benefit Plus (MB +) Double Benefit Plus (DB +)
3.8 CSR activities of Bank Asia Limited
Bank Asia has been conscious of corporate social responsibility from the very beginning of its operation in
1999. The Bank looks beyond short-term quantitative gains and concentrates on issues which make the
financial institution socially responsible and thus expects a sustainable balanced growth.
Bank Asia has three major CSR programs. These are as follows:
1. Higher Study Scholarship
2. Ophthalmological Operation
3. Operating Computer Learning Centers

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Higher Study Scholarship
Bank Asia provides higher scholarship to rural poor meritorious students, who are studying in important
subjects in public universities. So far (since 2005) 215 students have been awarded the scholarship. Of
them, 94 scholarships have been provided this year. Total expenditure of scholarship this year is Tk
53.08 lac for this purpose while Tk.1.57 crore till date. Next year we have a plan to provide 100 more
scholarships, which will raise beneficiary numbers to 334, and budget will be Tk 10.64 million/Tk 1.64
crore. The scholarships are given on the basis of SSC and HSC results.
Bank Asia gives scholarships for higher study to the meritorious students in the rural areas, where the
Bank has branches. A total of 134 (one hundred thirty four) students have been selected for Bank Asia
Higher Study Scholarship for the current year.
Ophthalmological Operation
The Bank bears entire cost of cataract-related eye operations, whose parents are poor and cannot afford
the high cost of operations. Since 2006, 874 operations have been conducted under the program at a
cost of about Tk 92 lac (till July, 2010). Most of the children are leading normal life and learning
education.
Computer Learning Centers
Bank Asia, with the help of D-net, is operating 13 Computer Learning Centers (since 2006) in rural areas,
where rural youths learn computer education. A total of Tk 4.7 lac has been spent for operational cost of
these centers this year. Besides, 12 more learning centers have been set up this year involving Tk.1.58
million/Tk.15.76 lac as a part of our expansion program. So far, about 3000 youths received computer
training though these centers, and cost involvement in this CSR program is Tk.1.03 crore (till Dec. 2009).
Organizing Eye Camp: Bank Asia started eye screening of 10,000 children in 50 schools in four upazilas
of Kishoreganj district namely, Tarail, Sadar, Hossainpur and Pakundia with the help of Kishoreganj Eye
Hospital of Nari Uddog Kendra (NUK). If the pilot program, involving Tk.5 lac, is successful we will cover
whole the district and subsequently whole the country to save eyes of the children of the nation.
Blood Donation: Bank Asia every year organizes blood donation programs where Bank staffs donate
blood. As recognition, Bank Asia received the Highest Blood Donation Organization Award from the
Bangladesh Red Crescent Society Blood Centre in this (2010) year. Bank Asia spent Tk 1 million/10 lac
for organizing blood donation program.
Conservation of Environment: Bank Asia has been one of the pioneers in supporting environment
friendly CNG projects by financing CNG conversion and CNG filling stations. It always averts financing in
environment hazardous business. The Bank has decided not to finance any tobacco related business,

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and all offices of the Bank are declared smoking free zone. Bank Asia is committed to protect the
environment, and in the effort to do so has undertaken beautification and maintenance of the main
highway Pragati Sarani from Natun Bazar to Railway Crossing near Airport Road. Financing in solar
panels for urban households is under process.
Disaster Management: Bank Asia donated Tk. 25 lac to the Prime Minister‟s Relief Fund as financial
assistance to the victim families of devastating fire at Nimtoli and building collapse at Begunbarui in first
week of June, 2010 that caused loss of more than hundred lives, leaving hundreds of people severely
injured. Besides, the Bank donated blankets among cold-hit people in the district of Rajshahi, Pabna and
Bogra districts.
Sports: During the event of South Asian Games (SAF Games) Bank Asia contributed Tk 5 lac for smooth
organizing of the program. Bank Asia also contributed Tk 20 lac for purchasing car presented to
cricketer(s) of Bangladesh National Cricket Team for their emphatic win against New Zealand.
Culture and Heritage: Bank Asia is dedicated to protect culture and heritage of the country. In respect to
the martyred freedom fighters, Bank Asia donated Tk 1 crore for Multijuddha Jadughar Nirman, Tk2 lac to
Muktijuddher Smritisangrakshan Kendra for the international conference on Human Rights.
Poverty Eradication Program: The Bank has disbursed Tk 62.76 crore (Tk 40.11 crore directly and Tk
22.65 crore through NGO linkage) as short and long-term credit in agriculture/rural credit sectors during
last six months (Jan 1-June 30, 2010). This financing helped create innumerous employment
opportunities in farms, especially in the fields of crops and fisheries. Of the total amount, Tk 10 crore has
been disbursed for poverty alleviation in rural areas.
Bank Asia through its 10 SME Service Centers and 46 Branches in urban and rural areas provides Tk.
21.75 crore credit to small and medium enterprises for expansion or promotion of their business which
ultimately create productive new off-farm employment.
Other Health Programs: Assist construction of hospital (Islamia Eye Hospital Tk 20 lac, TMSS Tk 5 lac),
donate microbus for running mobile hospital (of Bir Sreshtha Matiur Rahman Foundation-Tk 15 lac),
rehabilitation of paralyzed people (CRP-Savar Tk 3 lac), support accident victims (Tarail-Tk 1.97 lac),
kidney and cancer patients, Tk 0.43 million to Marie Stopes Clinic, etc.
Others Csr/Donation Program: Bank Asia also donated Tk 10 lac to FBCCI Foundation‟s „One
Businessman: One Family‟ program. Besides, Bank donated Tk 5 lac for Women Entrepreneur Award
and Tk 4.8 lac for support to victim Army Family of BDR carnage.

21. Page | 21
Chapter 04
Corporate Governance Practices in Bank Asia

22. Page | 22
In Bank Asia, corporate governance means increasing the stakeholders‟ value by being efficient &
professional to the organization, transparent and accountable to the shareholders and responsible to the
society and the environment. The board of directors plays a key role in corporate governance. It is their
responsibility to endorse the organizations „strategy, develop directional policy, appoint and supervise
senior executives and to ensure accountability of the organization to its owners and regulatory authorities.
This enables the banks to undertake, in an effective manner, the prudent risk-taking activities which are
the basis of its business. Bank Asia Limited, as a publicly listed company, is a highly regulated company
where Bangladesh Bank, Bangladesh Securities and Exchange Commission (BSEC) play a very
significant role in establishment and adherence to norms and regulations.
4.1 BOARD OF DIRECTORS
Composition of the Board: Directors are accountable to the shareholders for the bank‟s performance
and governance. Bank Asia always complies with the direction of the regulatory authorities regarding the
appointment of directors. Bangladesh Bank circulars, BSEC notification, Bank Company Act and
Company Act are strictly followed. The Constitution provides that there will be a minimum of one-fifth
Independent Directors of the board and maximum 20and minimum 5 Directors on the Board. The Board
currently comprises of 16 Directors as of December 31, 2014 including the Managing Director. The
Chairman and 13 other Directors are Non-Executive Directors from which 4 are independent directors
and only the CEO (Managing Director) is an Executive Director. The Chairman has been independent to
CEO. All the Directors except independent directors & CEO were elected by the shareholders of the
company & CEO is selected by the board of directors with the approval of the Bangladesh Bank.
Independent directors are appointed by the board and approved by the shareholders in the AGM. All the
Directors are well qualified, experienced professionals and add tremendous value to the overall
management capability. Most of the Directors are successful businessmen in their own right with long
experience in banking industry and they also hold very responsible positions in public life. The details
qualifications about board of directors can be found in Directors‟ profile
Board of Director’s Selection Mechanism and Independence: Bank Asia complied with relevant
guidelines of Bangladesh Bank and other rules and regulations of the Bank Companies Act, 1991
Bangladesh Securities and Exchange Commission while forming its board of directors. While appointing
new directors Bank Asia assesses the size & formation of the board and mix of knowledge, skills,
condition, experience legal proceedings and perception. The directors are elected by the shareholders in
AGM. In case of nomination, removal, causal vacancy, deposit directors & alternate Directors, Bank Asia
follows all relevant rules and regulations day to day business of the bank. The Bank‟s Non-Executive
corporate governance 153 www.bankasia-bd.com annual integrated report 2014 Directors are
independent of management and free from day to day business of the bank
Independent director: As part of good governance in the organization participation of independent
opinion in the Board is considered as an important instrument. Independent directors in the Board exert
an independent view on the policies and decisions of the Board and ensure that the policies and
decisions are for the best interest of the whole bank. Bank Asia has appointed 4 (four) independent
directors in the Board. They are Mr. A M Nurul Islam, a renowned bureaucrat and three renowned retired
bankers Mr. Mohammed Lakiot ullah, Mr. Shah Md. Nurul Alam and Mr. Mashiur Rahman. The

23. Page | 23
Independent Directors are also member of the sub-committees of the Board. One of them is the members
of the Executive Committee, two of them are the members of the Audit Committee where one is acting as
chairman of audit committee and three of them are the members of the Risk Management Committee.
Delegation of Authority: The Board has delegated to the CEO and, through the CEO, to other senior
executives, responsibility for the day-to-day management of the banks‟ business and implementation of
the banks‟ strategy and policy initiatives. The CEO and other senior executives operate in accordance
with a comprehensive set of management delegations under the banks‟ Delegation of Authorities
framework.
4.2 BOARD’S OWN STRUCTURE AND PRACTICE
The board structure is maintained in terms of leadership, size and the use of committees so as to
effectively carry out its oversight role and other responsibilities. This includes ensuring that the board has
the time and means to cover all necessary subjects in sufficient depth and have a robust discussion of
issues. The board continuously maintaining and periodically updating organizational rules, by-laws, or
other similar documents setting out its organization, rights, responsibilities and key activities. To support

24. Page | 24
its own performance, the board carry out regular assessments – alone or with the assistance of external
experts – of the board as a whole, its committees and individual board members.
Chairman of the Board; Roles & Responsibilities: The Chairman of the Board is elected to the
office of chairman by the directors. The Chairman‟s primary responsibility is to lead the Board, to ensure a
common purpose, effectiveness as a group and at individual Director Level and that it upholds and
promotes high standards of integrity, probity and corporate governance. The Chairman has the link
between the Board and the Company.
Roles and Responsibilities:
Appropriate Accounting Standards, Policy and regulatory compliance
 Overseeing the financial reporting process
 Accounting policy & procedures
 Reviewing significant related party transactions
 Going concern assumption
 Checking the financial statement‟s completeness and concreteness
 Reviewing the financial statements prepared in according to existing rules & regulations and
standards enforced in the country and as per relevant prescribed accounting standards set by
Bangladesh Bank
 Discussing with management and the external auditors to review the financial statements before
submission to the Board for approval.
 Dealing with Significant changes of accounting policies and practices
 Reviewing the content and accounts to advise the Board for the understandable and fair
presentation of the annual report
 Quarterly & Half yearly review of the financial statements
Financial Reporting:
 Review the annual financial statements and determine whether they are complete and consistent
with the accounting standards set by the regulatory authority
 Meet with management and the external auditors to review the financial statements before their
finalization
Other Responsibilities:
 Submit compliance report to the Board on quarterly basis on regularization of the omission, fraud
and forgeries and other irregularities detected by the internal and external auditors and inspectors
of regulatory authorities
 Perform other oversight functions as desired by the Board of Directors and evaluate the
committee‟s own performance on a regular basis.
4.3 EXECUTIVE COMMITTEE
The Executive Committee (EC) of the Board of Bank Asia was first constituted in January 2010 to
ensure efficient, competent, compliant and secured structure for approval of credit proposals and
business decisions. The number of members in executive committee is 7 (seven) nominated by the Board
from directors. The EC time to time reviews policies and guidelines issued by Bangladesh Bank regarding

25. Page | 25
credit and other operations that are customized and adopted by the management after approval of the
Board of directors. EC approves credit proposals as per approved policy of the Board.
4.4 RISK MANAGEMENT COMMITTEE
To minimize risk while implementing the policies and business plan of the Bank, the Board has
formed a Risk Management Committee as per the guidelines of Bangladesh Bank. The Committee will
supervise whether the risks arise from credit, foreign exchange, internal control and compliance, money
laundering, information technology, operation, interest rate, liquidity and other sources are identified, and
measured and adequate systems are in place to minimize such risks. Currently 5 (five) members are in
the Risk Management Committee. They set risk appetite; formulate risk identification & control policy,
deciding on recommended changes to the risk management framework and internal capital adequacy
assessment process and monitoring the operation and effectiveness of the risk management framework,
policies and standards. The Risk Committee assists the Board in relation to the oversight of risk including
the risk appetite and risk management strategy
4.5 CORPORATE GOVERNANCE TRAINING AND ITS OBJECTIVES
Bank Asia is very serious about Corporate Governance. For this purpose, high quality training was
arranged regarding this matter. A daylong workshop on Corporate Governance was organized to create a
strong risk management culture on October 18, 2014 where our senior management participated. Among
them, Mr. A Rouf Chowdhury, Chairman of Bank Asia; Md. Mehmood Hussain, President and Managing
Director; Vice Chairmen Mr. A M Nurul Islam, Mr. Mohammed Lakiotullah, Directors of the company Mr.
Mashiur Rahman, Mr. Rumee A Hossain, Mr. Shah Md. Nurul Alam, Mr. Mohd. Safwan Choudhury;
Deputy Managing Directors and Head of other departments were present. Board of Directors and Senior
Management participated at an exclusive workshop on Corporate Governance conducted by IFC
Corporate governance training offers tangible benefits for Board directors committed to playing a key role
in guiding their company‟s success. Governance training puts one in touch with the latest best practice
research and offers evaluation of best practice Boards. Therefore, the main objective of these training
programs is:
 To help to identify Board‟s route to success. This includes strategic appointment to leverage
Board member competencies as well as effective structures and processes.
 To determine the best practices suited to your organization through structured assessment.
 To develop broad-spectrum insights into best practices to understand how they improve
coherence in business direction and strategy, drive corporate responsibility, and improve
company accountability for stakeholder confidence
 To shed light on Board-specific strategies to mitigate risk and maximize opportunities by paving
the skills, tools and frameworks for action plans to address challenges and boost Board‟s
performance.
 To help the Board members develop the right strategies for change management and create
advance plans for seamless change in order to identify internal and external opportunities and
challenges, manage change or implement new approaches.
 To drive positive Board culture such as skills and leadership style.
4.6 REMUNERATION
Bank Asia compensation program focuses on individual short-term goals vis-à-vis long-term
success and overall profitability of the Bank. Both our short-term annual incentive and long-term
compensation plans promote our pay-for-performance philosophy, as well as our goal of having a

26. Page | 26
meaningful amount of pay at-risk, and we believe both plans provide them a competitive advantage in
talent acquiring and retaining. A summary of Short-term and Long-term compensation plan are given
below:
4.7 RELATION AND COMMUNICATION WITH THE SHAREHOLDERS AND OTHER
STAKEHOLDERS
While maintaining investors‟ relation proper communication and equitable treatment of every
shareholder are given the highest priority by Bank Asia. Bank Asia always share information to the
concern party and publish integrated operational and financial output and takes initiative to enrich the
ability of future assessment of bank of shareholders. Bank always provides quarterly and half-annually
financial statements and Annual Report to provide balanced and clear assessment of its performance.
Bank Asia also provides copies of annual report to the related regulatory parties and it can also be found
on Bank Asia website www. Bankasia-bd.com with other related information.
4.8 SHARE HOLDING STRUCTURE

27. Page | 27

28. Page | 28
Chapter 05
SWOT Analyses

29. Page | 29
SWOT ANALYSIS OF BANK ASIA
Every organization is composed of some internal strengths and weaknesses and also has some external
opportunities and threats in its whole life cycle. The following will briefly introduce the customer to the
Bank Asia‟s internal strengths and weaknesses, and external opportunities and threats as I have explored
in the past ten weeks.
a. Strength
 Superior Quality: Bank Asia provides its customers excellent quality of service. It gives the first
priority to customer satisfaction.
 Dynamism: Bank Asia draws its strength from the adaptability and dynamism it possesses. It has
quickly adapted to world class standard in terms of banking services. Bank Asia has also
adapted state of the art technology to connect with the world for better communication to
integrate facilities.
 Financial Strength: Bank Asia is a finally sound company backed by the enormous resource
base of the mother concern Rangs Group. As result customers feel comfortable in dealing with
the company.
 Efficient Management: All the levels of the management of Bank Asia are solely directed to
maintain a culture of the betterment of the quality of the service and development of a corporate
brand image in the market through organization wide term approach and open communication
system.
 State of the Art Technology: Bank Asia utilizes state-of-the-art technology to ensure consistent
quality and operation. The corporate office is equipped with SWIFT (SWIFT is a banking
software, used by Bank Asia). All other branches are also equipped with SWIFT system.
 Experts: The key contributing factor behind the success of the Bank Asia is their employees,
who are highly trained and most competent in their own field. Bank Asia provides their
employees training both in-house and outside job.
 In-House Utility: Bank Asia is free from dependence on ever disruptive power supply of our
public sources. The company generates the required power through generator fed on diesel.
Water generation is done by deep tube wells on site and in abundance.
 Excellent Working Environment: Bank Asia provides its workforce an excellent place to work in.
Total complex has been centrally air conditioned. The interior decoration was done exquisitely
with choice of soothing colors and blend of artistic that is comparable to any overseas bank.
b. Weaknesses
 Limited Workforce: Bank Asia has limited human resources compared to its financial activities.
There are not many people to perform most of the tasks. As a result many of the employees are
burdened with extra workloads and work late hours without any overtime facilities. This might
cause high employee turnover that will prove to be too costly to avoid.
 Problem in Delivery: Few of the Bank Asia‟s products offered to its clients like “Personal Credit
(PC)” is lying idle due to proper marketing initiative from the management. These products can
easily be made available in attractive ways to increases its client base as well as its deposit
status.
c. Opportunities

30. Page | 30
 Already entered the world of e-banking but yet to provide full electronic banking facilities to its
customer.
 A proper blend of Banking and information technology might give the bank leverage to its
competitors. Nevertheless there are ample opportunities for Bank Asia to go for product
innovation in line with the modern day need. The bank has yet to develop credit card facility,
lease financing and merchant banking.
d. Threats
 Merger and Acquisition: The worldwide trend of merging and acquisition in financial institution is
causing concentration. The industry and competitors are increasing in power their respective
areas.
 Poor Telecommunication Infrastructure: As previously mentioned, the world is advancing e-
technology very rapidly. Though Bank Asia has taken effort to join the stream of information
technology, it is not possible to complete the mission due to poor technology and infrastructure
of our country.
 Frequent Currency Devaluation: Frequent devaluation of Taka exchange rate fluctuations and
particularly South-East Asian currency crisis adversely affects the business globally.
 Government Support: Government of Bangladesh has rendered its full support to the banking
sector for a sound financial status of the country, as it has become one of the vital sources of
employment in the country now. Such government concern will facilitate and support the long-
term vision of Bank Asia.

31. Page | 31
Chapter 06
Findings and Analysis

32. Page | 32
Shareholder Perspective
1. Annual General Meetings are held as per the legislation
Figure: Annual General Meetings are Held as Per the Legislation
The Annual General Meetings are held as per legislation every year in the Bank. Shareholders are
properly invited to the meeting. The figure above also shows 65% respondents are strongly agreed and
35% are agreed that the Annual General Meetings are Held as per the legislation.
2. All shareholders are properly notified about the general meetings
Figure: Shareholders Notification about AGM
Above figure shows that majority of shareholders are agreed that they are properly notified about the
general meetings. Our secondary information also shows same result.
65%
35%
0% 0% 0%
Annual General Meetings are Held as Per the
Legislation
Strongly Agree
Agree
Neutral
Disagree
Astrongly Disagree
Strongly Agree,
43%
Agree, 57%

33. Page | 33
3. The shareholders are well informed about the agenda of the general meetings
Figure: Agenda of the Annual General Meetings
It is important that shareholders‟ know the agenda of the meeting well in advance, can discuss their views
in the meeting and have knowledge about the equity position of the major shareholders. These are
important elements for ensuring good governance at the corporate level to safeguard rights of the smaller
investors in the company. As seen from figure 4, majority of the shareholders agreed that they were
informed about the agenda of the Annual General Meetings.
4. Shareholders have the right to call for extraordinary general meetings
Figure: Extraordinary General Meetings called by Shareholders
Above figure shows that all the respondents are agreed that Extra-Ordinary General meeting was held by
the bank. The last Extra-Ordinary General Meeting (EGM) of Bank Asia was held on 26th June, 2014.
The proposal to issue Bank Asia 7 Year Floating Rate (11.50%-14.50%) Non-Convertible Subordinated
Bond with an issue price of Tk.300.00 crore to raise capital of the Bank was approved as special
42%
33%
25%
Agenda of the Annual General Meetings
Strongly Agree
Agree
Neutral
Disagree
Astrongly Disagree
47%
53%
Extraordinary General Meetings called by
Shareholders
Strongly Agree
Agree
Neutral
Disagree

34. Page | 34
resolution in the meeting. A large number of shareholders attended the EGM and made the gathering
lively.
5. Shareholders have right to question the decisions of the meetings.
Figure: Shareholders Rights to the Decisions of the Meetings
Above figure shows that majority of the respondents think shareholders and employees have right to
question decisions made by the Board. However, 47% were neutral to it. This implies that shareholders
and employees do not have complete right to question the decisions of the Board or management in all
cases though good Corporate Governance should encourage participation of all shareholders and
employees.
6. Shareholders’ participation is encouraged to bring forward any idea for improving the system.
Figure: Encourage of Shareholders Participation for Improving the System
Above figure shows that majority of the shareholders are agreed that the outcomes of the meeting were
well communicated to them. Although there is 25% respondents are neutral it indicates some
manipulation of information.
7. The members are selected through voting by all major shareholders
Strongly Agree
13%
Agree
40%
Neutral
47%
Shareholders Rights to the Decisions of the
Meetings
Strongly Agree,
33%
Agree,
42%
Neutral, 25%

35. Page | 35
Figure: Voting Rights of Shareholders
The directors are elected by the shareholders in AGM as confirmed through surveying the shareholders
as shown in the above figure where all of them agreed or strongly agreed that they have voting rights to
elect directors for the bank. All the Directors except independent directors and CEO were elected by the
shareholders of the company during Annual General Meeting (AGM) and CEO is selected by the board of
directors with the approval of the Bangladesh Bank. Independent directors are appointed by the board as
well and approved by the shareholders in the AGM.
8. The Board of Directors meets at least once in every quarter
Figure: Meeting of the Board of Directors
Above figure shows that most of the respondents‟ shareholders are agreed that Board of Directors meets
at least once in every quarter. Our secondary data shows that there were 33 meetings of the Board
during the year 2014. Around four members of the Board were absent in all the meetings and more 3
were absent in more than 20 meetings. This is not a good practice as being the supreme authority of the
Bank; all members should show maximum interest in the meetings by being present.
65%
35%
0% 0% 0%
Voting Rights of Shareholders
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Strongly
Agree
43%
Agree
34%
Neutral
23%

36. Page | 36
9. There is representation/participation of shareholders and stakeholder in Board of director
Figure: Participation of Shareholders and Stakeholder in BOD
Above figure gives mixed result about the Participation of Shareholders and Stakeholder in BOD because
respondents give different information. But secondary data shows a significant proportion of the shares
are held by the directors of the bank. Ideally, the Board of Directors are not supposed to hold too much
shares as this might lead to manipulation of the decisions of the organization in the interest of the B.O.D.
to achieve personal gains.
6.2 Employee Perspective
1. BANK ASIA’s Corporate Governance system is transparent to me
Public Disclosures and Transparency
Public disclosure is an important element of governance in the corporate world because it builds trust,
helps brining new investors and ensures smooth functioning of the capital markets and excels the
company growth. It is, therefore, a requirement in our SEC‟s code of conduct.
Strongly Agree
27%
Agree
33%Neutral
20%
Disagree
20%
Participation of Shareholders and Stakeholder in
BOD

37. Page | 37
Figure 03: Public Disclosures and Transparency
Figure 03 shows that majority of respondents are strongly agreed that the Bank discloses all financial
information as per legislation and also makes those easily available to all stakeholders. Annual Reports,
Bank‟s website and Reports to Regulatory Agencies serve as the disclosure tool for Bank Asia Limited.
Figure 04: Disclosure of Remuneration
Figure 03 shows that 47% respondents are agreed, 33% strongly agreed, and 20% neutral about
Disclosure of Remuneration. The remuneration of the directors and CEO of the Bank is also mentioned in
the disclosure reports as well as details about the directors and management team of the company.
Remuneration to Board of Directors for attending the Board Meeting, Audit Committee Meeting, Executive
Committee Meeting and Risk Management Committee Meeting, the Directors receive an honorarium of
Taka 5000 each. During 2014, the expenditures incurred related to directors were Tk. 2,770,000 for
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Adequate Disclosure Easily Avalailble Directors' Profile Management Profile
Strongly Agree Agree Neutral Disagree Strongly Disagree
33%
47%
20%
0% 0%
Disclosure of Remuneration
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

38. Page | 38
Directors‟ honorarium and Tk. 214,240 for Directors‟ Traveling purpose. Remuneration of Chief Executive
Officer Total remuneration to CEO for the year 2014 is Tk. 14,159,744.
2. External auditors audit the bank as per Bangladesh Bank recommendation
Audit of External Auditors as Per Bangladesh Bank
Figure: External Auditors Audit the Bank as Per Bangladesh Bank Recommendation
Bank Asia Ltd. Has external auditing group and above figure shows that 60% employee are agreed and
other 40% are agreed that external auditors audit the Bank Asia as per Bangladesh Bank
recommendation.
3. Auditors can assess the validity of the financial statements and transaction of the bank.
Auditors Accessibility of the Validate Financial Statements and Transaction of the Bank
Figure: Auditors Accessibility of the Validate Financial Statements and Transaction of the Bank
60%
40%
0% 0% 0%
External Auditors Audit the Bank as Per
Bangladesh Bank Recommendation
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Strongly Agree,
33.00%
Agree, 40.00%
Neutral, 27%
Disagree, 0% Strongly Disagree,
0%

39. Page | 39
Above figure shows about the accessibility of the validate Financial Statements and Transaction of the
Bank. It shows that 33% are strongly agreed, 40% are agreed and rests 27% are neutral about this
matter. The neutral percentage showing that there might be some manipulation of the Bank in preparing
the audit reports. This is in contrary to the Corporate Governance guidelines. This raises questions about
the Bank‟s honest transparency about its financial activities as well as is accountability to the
stakeholders.
4. There is a fair internal auditing system present in Bank Asia
Presence of Fair Internal Auditing System
Figure: Presence of Fair Internal Auditing System
Above figure shows that 33% respondents are strongly agreed, 60% agreed, and 7% neutral about the
presence of fair internal auditing system. This indicates that their might be same falsification about fair
internal auditing system
5. BANK ASIA LTD. organizes training concerning corporate governance
Presence of the Training Concerning Corporate Governance
Strongly Agree,
33.00%
Agree,
60.00%
Neutral, 7.00% Disagree, 0% Strongly
Disagree
, 0%
Strongly
Agree,
25.00%
Agree,
30.00%
Neutral,
35.00%
Disagree, 10.00% Strongly Disagree,
0%

40. Page | 40
Figure: Presence of the Training Concerning Corporate Governance
Training of Corporate Governance increases the Corporate Governance practices in organization. Above
graph shows about 15 employee of Bank Asia 25% are strongly agreed, 30% agreed, 35% neutral, and
10% are disagreed about the training concerning Corporate Governance in Bank Asia Limited. Employee
who are agree on this they said in their banking training period banks gives some idea about corporate
governance but no separate training organize on this regards.
6. The Auditors report is reliable & free from control of owners of the bank
Auditors Report Reliability and Free from Control of Owners of the Bank
Figure: Auditors Report Reliability and Free from Control of Owners of the Bank
Above figure shows that 30% respondents are strongly agreed, 40% agreed, and 30% neutral about the
Auditors Report Reliability and Free from Control of Owners of the Bank. Thirty percent respondents are
neutral it indicates that auditors report are not fully reliable and free from control of owners of the bank.
30%
40%
30%
0% 0%
Auditors Report Reliability and Free from
Control of Owners of the Bank
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

41. Page | 41
6.3 Customer Perspective
40%
20%
20%
15%
5%
Q1
Strongly Agree
Slightly Agree
Neutral
Disagree
Strongly Disagree
30%
50%
15%
5% 0%
Q2
Strongly Agree
Slightly Agree
Neutral
Disagree
10%
40%35%
10% 5%
Q3
Strongly Agree
Slightly Agree
Neutral
Disagree

42. Page | 42
10%
40%40%
10%
0%
Q4
Strongly Agree
Slightly Agree
Neutral
Disagree
Strongly Disagree
35%
60%
5%
0%
0%
Q5
Strongly Agree
Slightly Agree
Neutral
Disagree
Strongly Disagree
25%
35%
25%
15%
0%
Q6
Strongly Agree
Slightly Agree
Neutral
Disagree
Strongly Disagree

43. Page | 43
6.4 Other Findings:
 Bank Asia provides training programs on Corporate Governance.
 Bank Asia is very serious about Corporate Governance. For this purpose, high quality
training was arranged regarding this matter. A daylong workshop on Corporate
Governance was organized to create a strong risk management culture on October 18,
2014 where the senior management participated. Governance training puts one in touch
with the latest best practice research and offers evaluation of best practice Boards.
 The chairman of the Board does not participate in or interfere into the administrative or
operational affairs of the bank. Sometimes the chairman conducts on-site inspection of
any bank-branch or financing activities under the purview of the oversight
responsibilities of the Board.
 There were 33 meetings of the Board during the year 2014. Around four members of the
Board were absent in all the meetings and more 3 were absent in more than 20 meetings.
This is not a good practice as being the supreme authority of the Bank, all members
should show maximum interest in the meetings by being present.
 A significant proportion of the shares are held by the directors of the bank. Ideally, the
Board of Directors are not supposed to hold too much shares as this might lead to
manipulation of the decisions of the organization in the interest of the B.O.D. to achieve
personal gains.
 Weak regulatory system along with board interference with the management exists in CG
in the country.
 Capital market facilitates good governance through information production and
monitoring. The capital market of Bangladesh consists of two stock exchanges: Dhaka
Stock Exchange (DSE) and Chittagong Stock Exchange (CSE). Bangladesh does not
have depth in its equity market. The capital market of Bangladesh is still a weak link in
the movement towards strengthening CG.
 General shareholders do not pay attention on issues of performance, business strategy,
future business plans, disclosures and processes that could give them a greater voice in
the policy decisions of a company.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Sponsor &
Director
General
Public
Foreign
Investments
Investment
Companies
Institutions Non Resident
Bangladeshi
Shareholding Structure
Series 1

44. Page | 44
7. Conclusion
The primary objective of the study was to evaluate the practices of Corporate Governance
codes by Bank Asia Ltd. The broad issues like shareholders’ rights and disclosure of
information, disclosure and transparency, audit practices, board issues and customer satisfaction
are the main yardstick to assess the practice of CG codes. The study found some problems in
meeting the Corporate Governance Issues transparency and accountability, financial reporting,
reliability on audit reports, shareholders’ participation, customers’ satisfaction, etc.
In short the fairness, accountability and transparency of private banks can be improved in order
to meet Corporate Governance standards. The banking sector of Bangladesh is becoming
stronger day by day and it is playing a pivotal role in the volatile economy of this country to
become Bangladesh one of the growing economies of the world in near future. So to be more
effective and to put more contribution for the betterment of Bangladesh, each bank should follow
the Corporate Governance codes properly to bring the authenticity in its operations and to bring
the faith of the stakeholders as well as the people of Bangladesh.

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8. Recommendations
 After completing the research following recommendations have been made to ensure the
practice of corporate governance codes in bank Asia Ltd. and to increase sustainability of
the business:
 The Bank should focus more on corporate governance training programs to make
everyone in the organization aware of its practices.
 The effectiveness of independent directors should be increased in the organization to
bring more transparency.
 The performance of Board of directors should be evaluated more strictly and timely to
bring the accountability in the organization.
 More detailed information on major shareholders’ equity and ownership should be
disclosed.
 Adequate time and scope should be given to the shareholders for asking questions and
placing issues in the Annual General Meetings (AGM).
 Complete resume of directors of every organization should be disclosed to enable
shareholders to judge their qualification and skills.
 Employees should be encouraged to participate in decision making and bring forward
their ideas and viewpoints about the organization.
 Customers should be treated more fairly and provided with detailed information about
their banking activities and costs involved.
 Minor shareholders should not be neglected by any means.

46. Page | 46
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