Chapter-One

Introduction

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1.1 INTRODUCTION
In today’s world only academic education does not make a student perfect to become
competitive with the outside the world. The internship is a 4 credit compulsory course for the
completion of BBA program in Bangladesh University of Business & Technology (BUBT).
The objective of this program is to acquaint the student with real life situations and start a
career with some practical experience. This program helps the BBA graduates to identify the
difference between academic knowledge and real life situations.

This report is being prepared as a requirement for the fulfillment of the BBA program at
BUBT. The topic of this report is the training and Compensation Management of BASIC
Bank Limited.

1.2 SIGNIFICANCE OF THE STUDY

Any theoretical study will worth a great value when it can be applied in the real life or in the
practical world. So the students need to know the proper application of theoretical knowledge
to the real world. When students engage in the internship program, can know the application
of their knowledge.

The world is changing rapidly to face the challenge of competitive free market economy. To
keep pace with the trend each and every organization seeksemployees who have the best
combination of the practical knowledge with the theoretical knowledge.Internship is a
program through which the students can gather the practical world knowledge. So the
internship program will help the students’ knowledge building in two specific fields one is
through the program the students can gather the real world knowledge ad second is the
students after being graduates can achieve capabilities to write about the practical world.

1.3 OBJECTIVE OF THE STUDY

The objectives of my study was-

 To show the Compensation Structure of BASIC Bank Limited.

 To describe the Satisfaction level of the employees about the compensation Structure.

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1.4 METHODOLOGY OF THE STUDY
The methodology of the study covers the following areas:

Research Design:
This is a descriptive type of research which briefly reveals the overall compensation
management procedures of BASIC Bank Limited.It has been conducted by collection both
primary and secondary data.

Sources of Data and the Questionnaire:

This report is based on both primary and secondary data and those were collected from the
different sources.
Primary Source:The primary source of data for this report was the questionnaire survey.
Secondary Source:Secondary data sources were as follows:
 Annual reports of BASIC Bank Limited;
 Different published documents of the bank;
 Data available with the website of BASIC Bank Limited;
 Related books.
Questionnaire Design:
Thequestionnaire was prepared with both open and close-ended questions. Each close-ended
question contained the five point Likert scale of measurement.
Population and Sampling Plan:
The population and the sampling plan of the study were:
Population:The targeted population was the employees working at theKushtia Branch of
BASIC Bank Limited.
Sample Size:The size of the sample was 11 employees. Among them there were some
executive levelemployeesand some operational level employees.The following table shows
the sample details:
Table 1: The Sample Size
Designation No. of Employees
Executive 03
Operation Employees 08
Total 11
Sampling Method:The non-probability convenient sampling method was used to identify the
respondents.

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1.5 LIMITATION OF THE STUDY
The major limitations of this study were:

Time limitation
To complete the study, time was limited by three months. It was really very short time to
know details about the overall compensation management procedure ofanorganization like
BASIC Bank Limited.

Reluctance of the employees

Some of the employees were found to be reluctant and unwilling to provide the required
information. The employees were found extremely busy to perform their daily duties and
responsibilities.

Lack of Record and Inadequate information

Inadequacyof sufficient written documents was also the notable limitation of this study. In
many cases up-to-date information was not available.

Secrecy
While collecting data, some of the employees did not disclose much information due to the
confidentiality of the organization. Every organization has some secrecy, which cannot be or
should not be disclosed to the outsider. So the organization did not give the access to those
affairs.

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 Chapter-Two
Company Profile

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2.1 Overview of BASIC Bank Ltd

2.1.1 History of BASIC Banking Activities

Bangladesh Small Industries and Commerce (BASIC) Bank limited1 is a banking company
registered under the Companies Act 1913. It was incorporated under the Act on the 2nd of
August 1988. The bank started its operations from the 21st of January 1989. It is governed by
the Banking Companies Act 1991. The bank was established as the policy makers of the
country felt the urgency for a bank in the private sector for financing Small-Scale Industries
(SSIs). At the outset, the bank started as a joint venture enterprise of the BCC Foundation
with 70 percent shares and the Government of Bangladesh (GOB) with the remaining 30
percent shares. The BCC Foundation being nonfunctional following the closure of the BCCI,
the Government of Bangladesh took over 100 percent ownership of BASIC bank on 4th June
1992. Thus, the bank is state-owned. However, the bank is not nationalized; it operates a
private bank as before. BASIC bank is unique in its objectives. It is a blend of development
and commercial banks. The Memorandum and Articles of Association of the bank stipulate
that 50 percent of loan able funds shall be invested in small and cottage industries sector.

2.1.2Vision:

To be a bank of choice by intertwining excellence in customer service experience,optimum

profitability with efficiency,imitable corporate culture in terms of compliant banking
activities, efficient and motivated human resources and endless quest for becoming the best
corporate citizen through serving people for progress.

2.1.3 Mission:

Establishing ourselves (the bank) as a strong bank in the market and society with good
fundamentals by:

 Offering best value-based greener products and services;

 Embracing appropriate knowledge and technology;
 Creating an environment for professional, efficient and motivated pool of human
resources;

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 establishing a culture of innovation and continuous improvement;
 ensuring maximum return/value to shsareholders;
 establishing good corporate governance and compliance culture;
 maintain good relations with stakeholders; and
 fostering financial inclusion and opening up a compassionate and humane side og
banking.

2.1.4 Goals and Objectives of BASIC Bank Limited:

 To invest 50 percent of loanable funds in financing small and medium industries

sector;
 To serve the depositors in safekeeping and growing their savings;
 To contract or negotiate all kinds of loans, aid or assistance, private or public, from
any source, local or foreign and to take all such steps as may be required to complete
and effectuate such deals;
 To act as agent for the sale and purchase of any stocks, share of securities or for any
other monetary or mercantile transactions;
 To develop a culture of compassionate banking;
 To establish and open offices and branches to carry on all or any or the above business
within the country and aboard, provided prior permission is obtained from the
Bangladesh bank and carry on, transact, undertake and conduct the business of
banking in all its branches and to transact and do all relevant matters and things; and
to insure secured banking.

2.1.5 Commitments:

 BASIC Bank is a customer focused modern bank that want to achieve sound and
steady growth in both mobilizing deposit and making quality investment to keep their
position as a leading Islamic bank in Bangladesh.
 To deliver financial services with the touch of their heart to retail, small and medium
scale enterprises, as well as corporate clients through their branches across the
country.
 Their business initiatives are designed to match the changing trade & industrial needs of
the clients.

2.1.6 Technology of BASIC Bank:

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BASIC Bank has its own software developed in 1991. Local area network (LAN) has been
installed in head office and 15 branches of the bank. Wide area network (WAN) has been set
up between head office and branches using X 28 leased line of BTTB.As continuous
upgradation of technology its Gulshan branch, Dhaka, Zindabazar branch, Sylhet, Rangpur
branch, Rajshahi branch has become only few year age.

2.1.7 Principles of BASIC Bank Limited

As we know that bank does its business with the money of others, so it is relatively a risky
business organization. By avoiding these risk bank wants to become a powerful and
confidential organization for the economic development of the bank. Therefore, like other
BASIC Bank also follows some principles. Some of the principles are in the below:

 Cannon of Solvency: Bank should have enough money to run the banking business
smoothly. Banking activities may be hampered if the fails to pay clients money on
demand. Therefore, BASIC Bank to run the banking business smoothly follows the
principle of solvency.
 Cannon of Safety: To ensure the depositor’s money as well as the loan amount BASIC
Bank follows the principle of safety. The bank also takes clear investigation about the
clients before sanctioning any loan.

 Cannon of Honesty and Reliability: People save their money and valuable things in the
bank based on the honesty and reliability of the bank. Therefore, to gain the attention of
the clients BASIC Bank always try to be honest and reliable.

 Cannon of efficiency: Every bank’s success depends a lot on the performance of bank’s
employees. Therefore to achieve this success BASIC Bank also follows the principle of
efficiency by providing efficient services to the clients.

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 Cannon of Secrecy: The bank that does not disclose secrets of the customer attract more
clients. Therefore BASIC Bank by maintaining secrecy of the clients also follows the
principle of secrecy.

 Cannon of Liquidity: Liquidity means how quickly a bank can transform its assets to
cash. It is one of the major principles of banking business.

2.2 General Banking Activities of BASIC Bank Ltd.

General Banking Department performs the core functions of the bank. It deals day to day
transactions. It takes the deposit from the customer and meets the customer demands for cash
by honoring their checks. Broadly, it has the following core heads-

2.2.1Account Opening

Banker-customer relationship begins with the opening of an account by the customer. Opening of
an account binds the same into a contractual relationship. But the selection of customer is very
crucial. In fact, fraud and forgery of all kinds start by opening of an account by the customer (s).
So, the bank takes extra care in its selection. One of the basic functions of commercial banks is to
accept deposits. For accepting deposits both demand and time, BASIC Bank Uttora branch offers
the following types of accounts-

A. Demand deposits (With drawable on demand)

 Saving Bank Account
 Current Account

B. Time deposits (Payable at a fixed date or after a period of notice)

 Fixed Deposit Receipt (FDR)
 Short Term Deposit (STD)

2.2.2 Types of Accounts

This part covers only following types of accounts-

 Savings Bank Account

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This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in
a week. Heavy withdrawals are permitted only against prior notice. Some Important Points
are as follows-
 Minimum opening deposit of Tk.1000/= is required;
 Check book issuing balance is also the same (Tk. 1000/=);
 Withdrawal amount should not be more than 1/4th of the total balance at a time and l
imit twice in a week;
 Interest rate is 7.5% including 10% excise duty on interest rate. Interest paid twice in a
year depending on monthly minimum balance. When money is deposited within 5 of the
following month, then it is counted as monthly minimum balance. If the interest amount
is more than Tk. 200 or more, the bank is paid the amount to the customer. Otherwise it is
treated as Bank’s Shadow Profit;
 Can open the A/c individually or jointly. In case of joint a/c, Joint signature is required if
not authorized otherwise;
 Minor (For withdrawal purpose), lunatic, insolvent, pardanshin women (Not mandatory)
cannot open such type of account.

 Current Account
Current account is purely a demand deposit account. There is no restriction on
withdrawing money from the account. It is basically justified when funds are to be
collected and money is to be paid at frequent interval. It is most suitable for private
individuals, traders, merchants, importers and exporters, mill and factory owners, limited
company’s etc. Some Important Points are as follows-
 Minimum opening deposit of TK.5000/- is required;
 There is no withdrawal limit. But in case of large amount say 2 lac or more, bank
requires one day before notice;
 No interest is given upon the deposited money;
 The Banker is under an obligation to repay these deposits on demand. So, they are called
demand liabilities of a Banker.
 The primary objective of such account is to save big customers like businessmen, join
stock companies, public authorities, etc. from the risk of handling a lot of cash.

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  The cost of providing current account facilities is considerable to the Bank as they make
payments and collect the bills, drafts, and checks for any number of times daily. The
Bank is therefore; do not pay interest on current deposits. At the same time, BASIC bank
charges Tk. 200 as Incidental fee;
 Minimum Tk. 1000 balance must always maintain all the time;
 Minor cannot open such type of account;
 Account holder can enjoy SOD or even TOD facility.

 STD (Short Term Deposit) Account

Normally various big companies, organizations, Government Departments keep money in
STD account. Frequent withdrawal is discouraged and requires prior notice. In BASIC,
customers usually give an instruction that their current account will be debited whenever its
deposited amount crosses a certain limit and this amount will be transferred to the STD
account. The deposit should be kept for at least seven days to get interest. The interest offered
for STD is less than that of savings deposit. Interest is calculated based on daily minimum
product and paid two times in a year. Interest rate is 6.00% including 10% excise duty on
interest rate.

2.2.3 Documents required for each account separately

 Proprietorship Firm-
Declaration of proprietorship.
Trade license.
Tax Identification No (TIN) directed by Bangladesh Bank

Partnership Firm-
Account must be opened in the name of the firm.
The firm should describe the names and addresses of all partners.
Photocopy of partnership deed duly attested by notary public.
Letter of partnership duly signed by all partners.
Trade license from municipality.
Tax Identification No (TIN) directed by Bangladesh Bank.

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Private Limited Join Stock Company-

 Memorandum of Association and Articles of Association duly certified by Chairman

‘or Secretary.
 Board Resolution duly certified by Chairman/ Secretary authorizing to open the A/C
with the bank and mentioning the name of the person (s) who will operate the A/C as
per provisions of Articles of Association.
 Certificate of incorporation duly certified by Chairman or Secretary.
 List of all Directors with Designation, Address & Specimen Signature duly certified
by Chairman or Secretary (Form XII).
 Latest copy of Balance Sheet
 Power of attorney.
 Tax Identification No (TIN) directed by Bangladesh Bank.

 Public Limited Join Stock Company-

 Photocopy of Registration certificate certified by Chairman or Secretary.
 Memorandum of Association and Articles of Association duly certified by Chairman
or Secretary.
 Board Resolution duly certified by Chairman/ Secretary authorizing to open the A/C
with the bank and mentioning the name of the person (s) who will operate the A/C as
per provisions of Articles of Association.
 Certificate of commencement duly certified by Chairman or Secretary.
 List of members of Managing/ Executive duly certified by Chairman or Secretary.
 Tax Identification No (TIN) directed by Bangladesh Bank
 Societies/Clubs-
 Certified copy of Registration certificate under the societies Registration Act, 1962.
 Certified copy of Resolution for opening and operation of account.
 Certified copy of Bye-laws & Regulations/ Constitution.
 Power of Attorney.
 Cooperative Society-
 Copy of Bye-law duly certified by the Co-operative officer.
 Up to date list of office bearers.
 Resolution of executive Committee as regards of the account.
 Certified copy of Certificate of Registration issued by Registrar, Co-operative
Societies.
 Non-Government College/ School/ Madrasha:
 Up to date list of the Governing Body/ Managing Committee.
 Copy of Resolution of the Governing Body/Managing Committee authorizing
opening and operation of the account duly certified by Gazetted Officer.
 Minor’s account-
 Putting the word “ MINOR” after the title of the account.
 Recording special instruction of operation of the account.

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  The account opening form is to be filled in and signed by either of the parents or the
legal guardian appointed by the Court of Law & not by the Minor.

2.2.4 Account opening flowchart

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2.2.5 Account closing Procedure
An account may close-
 When the customer desirous to close the account.
 When the account is inoperative for a long time.
 In case of customer’s death, insanity or insolvency.
 When the court on that particular A/C issues Garnishee Order.
To close an account, the checkbook is to be returned to the bank. BASIC bank charges Tk.
200/= for the same by debiting the amount from his account and rest amount is then paid to
the customer. Necessary entries are given to the account closing register and computer.
Finally make sure that A/C holder is completely free from all dues.

2.2.6 Issuance of new Cheque Book

 For New and Old Account

Fresh checkbook is issued to the account holder only against requisition on the prescribed
application form. In case of old account, requisition made on the prescribed requisition slip
attached with the checkbook issued earlier. Generate a security no randomly for every check
leaf by Manager or authorized person. Prepare the instrument with respective security no on

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the back of each leaf and signed by the authorized person. Make necessary entries in Check
Issue Register. Finally issue the checkbook for client (s).

2.2.7 FIXED DEPOSIT RECEIPT (FDR)

FDR Account

Fixed deposits are time deposits or time liabilities. These are the deposits in which an amount
of cash is deposited in Bank for a fixed period specified in advance. Before opening a Fixed
Deposit Account a customer has to fill up an application form which contains the followings-
 Amount in figures
 Beneficiary’s name and address
 Time period
 Rate of Interest
 Date of Issue
 Date of maturity
 How the account will be operated ( singly or jointly)
 Signature (s)
 F.D.R. no.
 Special instructions (if any)
After fulfilling the above information and depositing the amount, FDR account is opened and
a FDR receipt is issued and it is recorded in the FDR Register which contains the following
information-

 FDR account no.

 FDR (Fixed Deposit Receipt) no.
 Name of the FDR holder with address
 Maturity period
 Maturity date
 Interest Rate

In case of FDR Account, the bank does not have to maintain a cash reserve. So, BASIC bank
offers a high interest rate in these accounts. The revised interest rates for FDR effected from
February 15, 2018 followed by BASIC are-

a) For 1 month @ 4.25%

b) For 3 months @5.00 %
c) For 6 months @5.25 %
d) For 12 months@ 5.50%

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e) For 24 months@ 6.00 %

Renewal of FDR
Customer supposes to inform the bank in writing 15 days before the maturity date for
encashment. If not, bank normally renews the amount just after the maturity date. Renewal
will be for previously agreed maturity period.

Loss of FDR
If the instrument is lost from the possession of the holder, the holder is asked to fulfill the
following requirements-

a) Holder should inform the bank immediately

b) Record a GD (General Diary) in the nearest Police Station.
c) Furnish an Indemnity Bond.
On fulfilling the above requirements, BASIC bank is then issued a duplicate FDR.

2.2.8 LOCAL REMITTANCE

Cash remitting from one place to another is risky. So, Banks remit funds on behalf of the
customer (s) to save them from any awkward happening through network of their branches.
There are three modes of remitting funds. These are –

Pay Order (PO)

Pay orders are the safest way of making payments, as they are drawn on the bank issuing
them. So, there is no scope of fraudulent or cheque bouncing. A pay order is issued only
within the members of the Bangladesh Bank clearing house (Dhaka Metro). It can be issued
in favor of a customer holding an account, by debiting his account and crediting bills payable
account. In case of a non-customer, cash equivalent of the payment plus order charges is
received in cash and held in the daily suspense account until the payment is made through
clearing.

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It is another facility for client to transfer his money to another place. In this he must has an
account in this bank. If he has no account in this bank, he can deposit money in this bank and
does Pay Order. But in this case he must need a person how knows him. He can deposit
check, which is confirmed, by Bangladesh bank’s clearinghouse. If it is correct than bank
does this Pay Order.

Application must fill up the Pay Order form, where Pay Order number, Payee name, Amount
in figure and in wards.

Pay Order Issuing Process

For issuing a PO, following formalities are to be maintained. These ares-

Duly filled up the application form by the customer.

 Deposit money either in cash or by cheque with necessary charges.

 Prepare the instrument and make necessary entries in the Bills Payable
Register where payee’s name, date, PO no. etc are noted.
 Deliver the instrument to the customer after scrutinized and approved by
authority by taking signature of the customer on the counterpart.

Demand draft (DD)

DD is called ‘Banker’s Draft’. It is an instrument, issued by a particular branch, drawn on

another branch of the same bank, instructing to pay a certain sum of money. It is very popular
instrument for remitting fund from one corner of a country to another. DD is issued in favor
of a customer who maintains an a/c with BASIC Bank branch. It can be issued against Cash
or Cheque. If DD amount is more than Tk.50000/=, a test code is given on IBCA.

 Payment Process of DD
After receiving the instrument, the IBCA lodgment is done by the branch. Necessary entries
are given in DD Inward Register. Controlling number of the IBCA should match with the
serial number of this register.

 Cancellation of DD:

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To cancel an issued DD, the client has to submit an application. Issuing branch then sends an
Inter Branch Debit Advice (I.B.D.A.) to the drawn branch against previously issued Inter
Branch Credit Advice (IBCA).

Telegraphic Transfer (TT)

Sometimes the remitter of the funds requires fund immediately. In that case, the banker is
requested to remit the funds telegraphically. Different modes are Telegram, Telephone, Telex,
Fax. Telegraphic Transfer is the most rapid and convenient but expensive method. The drawer
and the payee should have accounts with BASIC bank. TT is issued against cash, cheque, and
letter of instruction.

 Procedure for Issuing TT

Following procedure is followed for issuing a TT.
a) Deposit money by the customer along with application form.
b) ‘In receipt of money a cost memo is given to the customer containing TT serial number
which informs the awaiting party of the paying branch by the customer.
c) Tested telex message is prepared where TT serial number, notifying party’s name is
mentioned.
d) The telex department confirms transmission of the message.
e) Necessary entry is given to the ‘TT Outgoing Register’.

2.2.9 Call Deposit Receipt (CDR)

CDR is also an instrument, issued by a particular branch, drawn on another branch of the
same bank, instructing to pay a certain sum of money not over the counter to a certain person
or his order. It is as like as Pay Order (PO), but main difference is that PO is treated as bills
payable and CDR is treated as sundry deposit. From banker’s point of view, it is always
desirable but its practice is limited. Only Tk. 40/= (Fixed) is charged for this facility. If CDR
amount is more than Tk.50000/=, a test code is given on IBCA.

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2.2.10 COLLECTION AND CLEARING
COLLECTION

In modern banking the mechanism has become complex as far as smooth transaction and safety is
concerned. Customer does pay and receive bill from their counterpart as a result of transaction.
Commercial bank’s duty is to collect bills on behalf of their customer.

Flow Chart Shows Collection Procedure

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Receiving ChequesFor Collection
In BASIC Bank Limited, cheques of its customers are received for collection from other
banks. In case of receiving cheques, following points should be checked very carefully-

 The check should not carry a date older than the receiving date for more than 6 months. In
that case it will be a ‘Stale Check’. Again the check should not be a ‘Post dated’ one.
 The amount both in words and figures of the pay-in-slip should be the same and also it
should be in conformity with the check’s amount both in figures and words.
 The name mentioned both in the check and the pay-in-slip should be the same.
 The check must be crossed.
 Collecting banker must check whether endorsement is done properly or not.

Types of Bills for Collection

 Outward Bills for Collection (OBC)

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If the bill is beyond the clearing range then it is collected by OBC mechanism. Customer
deposits cheques, drafts etc. for collection, attaching with their deposit slip. Instruments
outside the clearing range are collected through OBC mechanism. A customer of BASIC
bank Uttora branch is depositing a check say of Janata Bank, Kotchandpur branch, Jhenidah.
Now as a collecting bank, Uttora branch will perform the following tasks-

 Procedure of OBC

a) Depositing the cheque along with deposit-slip

b) Crossing of cheques are done indicating Uttora Br. as a collecting bank
c) Endorsement “Payee’s A/C will be Credited on realization” is given
d) Entries are given in the Outward Clearing Register.
Collecting bank can collect it either by its branch or by the drawer’s bank. They will forward
the bill to that particular branch. OBC number will give on the forwarding letter. Now
following procedures will take place in case of the following two cases.

 Bills Collected through Branch

Collecting branch will receive an I.B.C.A. from that particular branch.
 The process of collection is described below:

a) If the bill is drawn on BASIC Bank Main Branch–

i. Bills are sent to that branch through mail or courier;
ii. Branch collects the bills and sends an IBCA to that Branch;
iii. Depositor’s account is credited.
b) If the bill is drawn on another Bank and there is a branch of BASIC –
i. Branch sends the bill direct to the branch of BASIC by OBC schedule.
ii. Request them to send the proceeds by IBCA and collect the bill.
iii. That branch of BASIC can collect the through clearing house arrangement exists
there.

C) If the bill is drawn on another bank but there is no branch of BASIC-

i. Bill is directly sent to that Bank

i. Request them to send a draft in favor of this bank by an OBC schedule.

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 ii. That bank sends a DD mentioning the Paying Bank
iii. Then the bill is collected through clearing house process.

 Inward Bills for Collection (IBC)

When the banks collect bills as an agent of the collecting branch, the system is known as
IBC. In this case the bank will work as an agent of the collection bank. The branch receives a
forwarding letter and the bill. Next steps are as follows-

i. Entry in the IBC register

ii. An IBC number is given on the bill.
iii. Endorsement given- “Our branch endorsement confirmed”
iv. The instrument is sent for clearing.

CLEARING

According to the Article 37 (2) of Bangladesh Bank Order, 1972, the banks which are a
member of the clearing house are called as Scheduled Banks. The scheduled banks clear the
cheques drawn upon one another through the clearing house. This is an arrangement by the
central bank where every day the representative of the member banks sits to clear the
cheques. For clearing there is a department in every Bank. This department receives cheques,
drafts and like instruments from its customers for the purpose of collection with a deposit slip
over the counter crediting their accounts. Clearing of cheque is done through the clearing
house in Bangladesh Bank. Everyday the first hour starts at 10.00 a.m. and returns house at
5.00 p.m.

Types of cheques for clearing

 Inward Clearing Bills

It refers the instrument drawn on BASIC bank Kushtia Branch Limited, received from
other banks in the clearing house by their representative (s).

 Outward Clearing Bills

It refers the instruments drawn on the other banks received by BASIC bank Main Branch.
They are of three kinds as follows-

a) Cheques drawn on another branch of BASIC. The settlement process –

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b) Cheques drawn on another Bank which is situated within clearing house area.

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2.2.11 CASH

Cash is the lifeblood of all financial activities. Cash section is a very sensitive point of the
branch. This section deals with all types of negotiable instruments and it includes vault, used
as the store of cash, instruments. The vault is insured up to Tk.20 lac. Insured amount yet to
be enhanced to Tk. 40 lac. Operation of this section begins when the banking hour starts.
Cash officer begins his/her transaction with taking money from the vault, known as the
opening cash balance. Vault is kept in a more secured place. The amount of opening cash
balance is entered into a register. After whole days’ transaction, the surplus money remains in
the cash counter is put back in the vault and known as the closing balance. If the cash stock
goes beyond this limit, the excess cash is then transferred to BASIC bank main branch. The
main functions of this section are-

Cash receipt

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Cash receipt procedure is given below-

i. The depositor first fills up the Deposit-in-Slip.

ii. . Depositor deposits the money.
iii. Officer receives the money, counts and then enters in the Cash Receipt Register,
andfinally signs with seal and dates the deposit-in-slip.
iv. Slip is then passed to another officer, who enters the receipt details like serial no,
amount etc. in his register, signs the slip and keeps the banks’ part of the slip. Other part
is given to the depositor.
v. At the end of the day, entries are cross checked with the register kept at the cash counter
to see whether the transactions are correct or not.
 Cash Payment
Some important check points for making the payment are as follows-

 Endorsement

Endorsement is done by putting signature of the drawer on the back of the negotiable
instrument for the purpose of negotiation. By ‘blank endorsement’, an order instrument is
made as ‘bearer’. BASIC bank limited endorses the instrument in the following ways-

ENDORSEMENT IN CASE OF
Payee’s A/C credited Pay to Mr.X
Received payment
Pay to BASIC bank, Mr.X
Payee’s A/C credited
Payee’s A/C credited Pay to Mr.X , BASIC bank

Crossing

Generally two types of crossing are practiced, namely- General Crossing and Special
Crossing. Basically it gives a direction to the paying bank not to pay the check amount over
the counter. General crossing includes ‘A/C payee’ crossing only. Drawing two parallel and
transverse lines do it. On the other hand, special crossing is like general crossing but in
addition bank name is also mentioned. This gives the direction to the same to pay the check
only to the banker, whose name appears in the crossing or to his agent.
Cash payment procedure is given below-
i. Customer first deposits the check (s) to the cash section. Authorized individual checks
whether it is materially altered, proper endorsed, crossed or not. Being satisfied the total
requirements; he passes it to the computer for checking the balance. Operator verifies the

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 check leaf security no. If matched, then operator signs. Otherwise noticed to the
individual for stop payment;
ii. Authorized officer is then verified the signature with the Specimen Signature Card (SSC);
iii. Send the instrument to the computer section once again for posting;
iv. Cash officer is then asked the bearer to sign on the back of the instrument. At the same he
just enters the payment details in his register and pays the money to the bearer;
v. At the end of the day, this information must be tallied with computer postings to ensure
the correctness of payment.

2.2.12 Account Section

Accounts department maintains all records of transactions and all types of statement. At the
end of transaction hour all concerned section sends vouchers of transactions to this
department. Accounts department compares all figures/ amount, contents of transactions with
supplementary statement prepared by computer. If any discrepancy arises regarding any
transaction then this department reports to the concerned department. Following are the
activities of accounts department:
 To record all transaction in the cash book.
 To prepare daily, weekly, monthly, half-yearly and yearly fund position.
 To prepare all kinds of statements related to Bangladesh Bank, Head office and National
Board of Revenue (NBR).
 To prepare monthly salary statement, provident fund statement and administrative
expenditure statement.
 To make charges for different types of duty.

2.3 Others Activities

Banks play important role for development of a country. Others function of a banks are as below:
 Provide information to Bangladesh bank and others institution and that information is
important for policy making.
 To help the Bangladesh Bank and govt. for implementation fiscal and monitory policy.

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  Provide valuable information as well as opinion to its clients for their business firm.
 Safe keeping peoples depo
 Providing local facilities to safe keeping peoples valuable assets.
 Providing S.M.S Banking
 AIBL operating an English medium madras a.
Banks also lend to consumers, Governments, Universities etc and the maturities of their earning
assets may range from one day to long-term mortgage and bonds acquired either directly from
borrowers or purchased in the primary and secondary markets.

2.4 SWOT of BASIC Bank Limited

Like other organizations, BBL also have its strength, weakness, opportunities and threats. The
following stated the SWOT of the bank

Strengths:
The following are the core strength of the comercial bank for which it is now considered to
be the emerging sector for success:
 Bank Reputation: AIBL has already established a favorable reputation in the banking
industry of the country with its significant business growth. Within a period of 31 years,
BBL has already established a firm footing in the banking sector having tremendous
growth in the profits and deposits.

 Corporate Culture: BBL has an interactive corporate culture. Unlike other local
organization, AIBL’s working environment is very friendly, interactive and informal.
There are no hidden barriers or boundaries, while interactive among the superiors and
subordinates. The environment is also lovely and since the nature of banking job itself is
monotonous and routine, BBL’s lovely work environment boosts up the sprit and
motivation of the employees.

 Efficient Management: all the level of management are solely directed to maintain a
culture for the betterment of the quality of the service for developing a brand image in the
market through the wide team approach and horizontal communication system.

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 Human Resource Expertise: one of the key contributing factors behind the success of
BBL is its HR who is highly trained and most competent in their own respective field.
BBL provides its employees with training both in-house and outside job.

 Financial Strength: BBL is a financial sound company. As a result customers fell secure
and comfortable while dealing with bank. It’s already established its position in the
banking industry of Bangladesh. They achieve a high growth rate accompanied by an
impressive profit growth rate in ----.

 Distribution of Profit: One of the key strength of the comertial bank is that it distributes
a significant amount of profit that they earn by investing different areas. On the other
hand, in case of conventional banking they provide a fixed amount of return which is
called or interest that may not be consistent with the profit positioning of the bank’s
operations. So in case of conventional banking, they either sacrifice by bearing losses or
they deprived the depositors’ by not paying them the part of profit.

 Quality: BASIC Bank Limited strives to endow its customer with appreciable quality in
every service it provides. Customer satisfaction claims the highest priority, as it should be
in any service-oriented organization.

Weakness:
Comertial banking is guided by some principles but it has some weaknesses, some of the
major weaknesses are discussed in below:
 Limited Workforce: BASIC Bank has very limited human resource 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 works late hours
without any overtime facilities. This might cause high employee turnover will prove
to be too costly to avoid.

 Liquidity Crisis: Average asset quality and tight liquidity position is another
weakness of BASIC Bank limited. Bank’s asset quality is not up to the standard as
SONALI Bank or RUPALI Bank. Sometimes bank faces liquidity crisis especially
during the period of vacation which needs to be checked by the Bank, otherwise bank
will be in big trouble in near future.

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  Lack of Qualified System Operators: In BASIC Bank Limited, there are system
operators who do not have academic knowledge on computer applications. As a result
they frequently make mistakes in preparation of various computerizes statements.
Above all its Management Information System is still on primary stage which needs
to be modified as soon as possible to compete in the market.

Opportunities:
 Government Support: government of Bangladesh provided its full support to the
banking sector for a sound financial status of the country, as it becoming one of the
vital sources of employment of the country. Such government concern will facilitate
and support the long term vision for BASIC Bank Ltd.

 Evolution of Online: Banking emergence of online banking open more scope for
BASIC Bank Ltd to reach the client not only in Bangladesh but also in the global
area. It will also facilitate wide area network in between the buyer and the production
unit of BASIC Bank Ltd to smooth operation to meet the desired need with least
deviation.

 Diversification: BASIC Bank Ltd can peruse diversification strategy in expanding its
current line of business. The management can consider options of starting client
service in its merchant banking division.
 Product Line Proliferation: In this competitive environment BBL can expand its
product line to enhance its sustainable competitive advantages (SCA).As a part of its
product line proliferation, BBL can concentrate more on SME and agro based
industrial loan because this two sectors have huge potential.

Threats:
 Multinational Banks: The emergence of multinational banks and their rapid
expansion poses a potential threat to the Bank. Due to the booming energy sector,
more foreign banks are expected to arrive in Bangladesh. Moreover, the already
existing foreign banks such as Standard Chartered are now pursuing an aggressive

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 branch expansion strategy. These banks are establishing more branches countrywide
and are expected to get into for operation soon. Since the foreign banks have
tremendous financial strength, it will pose a threat to local banks to a certain extent in
terms of grabbing the lucrative clients.
 Upcoming Banks: The upcoming private local banks can also pose a threat to the
Bank. It is expected that in the next few years more local private banks may emerge.
If that happen the intensity of competitive will rise further and banks will have to
develop strategies to complete against an on slaughter of foreign banks.
 Mergers and Acquisitions: The worldwide trend of mergers and acquisition in
financial institutions is causing concentration in power in the industry and competitors
are increasing in power in their respect areas.
 Contemporary Banks: the contemporary bank such as Dhaka bank, prime Bank,
Eastern Bank and Dutch-Bangla Bank are its major rivals. Prime Bank and others are
carrying out aggressive campaign to attract lucrative corporate clients as well as big
time depositors. BBL should remain careful about these banks steps.
 Political instability: unstable political situation cause great distraction in the
otherwise smooth flow of business. Sudden Hartals and other political programs
sometimes present problems for the employees (especially female employees) in
commuting to from the office.

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 Chapter-Three
Theoretical Aspects

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3.1 HUMAN RESOURCE MANAGEMENT
HRM is the field of management involved planning, organizing, directing & controlling the
function of procuring, developing, maintaining & motivating a labor force.Human Resource
Management (HRM) is the function within an organization that focuses on recruitment of,
management of, and providing direction for the people who work in the organization. HRM
can also be performed by line managers.

HRM is the organizational function that deals with issues related to people such as
compensation, hiring, performance management, organization development, safety, wellness,
benefits, employee motivation, communication, administration, and training

3.2 COMPENSATION
The Word compensation has been derived from the Latin word “Compensatio” which means
the reward or remuneration given in exchange for labor or service. Compensation may be
financial and non-financial.
Various scholars have defined compensation in various ways. A few are mentioned below-

According to Thomas Patten jr,

“Compensation refers to all form of pay or rewards going to employees arising from their
employments”

According to R.S.Schuler,
“Compensation is a mode through which an organization logically evaluates the contribution
of its employees and provides them with financial and non-financial incentives according to
its affordability and within the government regulation”

3.3 COMPENSATION MANAGEMENT

Compensation management provides a step-by-step approaches for designing a remuneration
system that recognize job requirements,employee related knowledge and skills,performance
related incentives that link individual,team,work unit and organization performance.
According to Richard I. Henderson,

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“Compensation management is the process by which the authority of the organization
provides some financial and non-financial benefits to the employees for their contribution”
3.4 TYPES OF COMPENSATION
Financial compensation
The organization provides the financial facilities to the employees for doing their job in the
organization.Financial compensation includes the following:
 Salary
 Wages
 Incentives
 Fringe Benefits
 Dearness Allowance
 House rent Allowance
 Gratuity
 Retirement benefits

Non-financial Compensation
Non-Financial compensation benefits are includes following:
 Dignity
 Recognition
 Working condition
 Social Status
 Achievement
 Security

3.5 OBJECTIVE OF COMPENSATION MANAGEMENT

Objectives of compensation are very important because it helps the organization
obtain,maintain and retain a productive work force.Without adequate compensation, current
employees are likely to leave. It is the main reason why most individuals seek
employment.From the employee’s point of view, pay is necessary of life. Pay is the means by
which people provide for their own and their family needs.
The Management of compensation must meet several objectives.These objectives are listed
below:
 To acquire qualified personnel: Compensation needs to be high enough to attract
qualified personnel.

 To retain present employees: Compensation level must be competitive in order to retain

qualified employees otherwise they may leave.
 To ensure equity: Workers must be paid at a rate equal to the pay that similar workers
receive in another firm.
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 To reward desired behavior: Good performance,experience,loyalty,new responsibilities
and behavior can be rewarded through an effective compensation plan.
 To control costs: The compensation system must will all sorts of legal regulations.
 To comply with legal regulation: The compensation system must with all sorts of legal
regulations.

 To further administrative efficiency: In pursuing the other objectives of effective

compensation management,wage and salary specialists should design the compensation
program in such a way that it can be administered
efficiently.Administrativeefficiency,however,is the secondary priority of the
compensation management.

Some other objectives of compensation are:

 To manage conflict and to ensure congenial working environment.
 To generate motivation among employees.
 To reduce turnover.
 To ensure loyalty/commitment and participation.

3.6 FACTORS AFFECTING PAY SATISFACTION

Nash and Carroll found that pay satisfaction varies with the following factors.
 Salary level:
Higher the pay,higher satisfaction within an occupational group.
 Community cost of leaving:
Lower cost of leaving,higher the pay satisfaction.
 Education:
Lower the education level,higher the pay.
 Experience:
Higher the experience,higher the pay dissatisfaction.

 Future expectation:
The more optimistic the employee is about future job conditions,the greater the
pay satisfaction.
 Pay basis:
The more pay is perceived to be based on merit or performance,the greater the pay
satisfaction.
 Other personal characteristic:
The more intelligent,self-assured and decisive a person is,the lower the pay
dissatisfaction.

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3.7 CONSEQUENCE OF INEFFECTIVE COMPENSATION
A compensation consequence of ineffective compensation system may be termed as over-
compensation and under-compensation.
Effect of over-compensation
 Over enthusiasm
 Loss of imitative
 Feeling guilty
 Feeling of discomfort
 Lower performance
 Not cost effective
 Loss of competitiveness of the firm

Effect of under-compensation
 Loss of imitative
 Lack of motivation
 Feeling insecurity
 Decline in the quality of work life
 Pay dissatisfaction
 High turnover
 High absenteeism
 Low performance

3.8 BENEFITS AND IMPORTANCE OF COMPENSATION

 Enhance dignity & satisfaction from worked performed.
 Enhance psychological,health,Intellectual growth and emotional maturity.
 Promote constructive social relationship with co-workers.
 Design job that requires adequate attention and effort.
 Allocate sufficient resources to perform work assignments.
 Offer supportive leadership & management.

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Chapter-Four

Page | 36
 Questionnaire Analysis &
Findings

4.1 ELEMENTS OF COMPENSATION PACKAGES OF BASIC Bank

Limited

1. Salary(Basic)
2. Medical Allowance
3. House Rent Allowance
4. Conveyance Allowance
5. Festival bonus
6. Gratuity plan
7. Provident fund

4.2 COMPENSATION STRUCTURE OF BASIC Bank Limited

4.2.1 Salary: The basic salaries of the employees are given below:

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 Post Basic salary

Assistant Officer 15000

Officer 20000

Assistant manager 25000

Deputy manager 30000

Executive Manager 40000

AGM 45000

DGM 60000

GM 95000

4.2.2 Bonuses:

Festival Bonus - 2 festival bonuses are given in every year equal to the basic salary

Leave Fair assistance-Employees of BASIC Bank are getting leave fair assistance bonus
once in a year as per their own basic.

Source: Face to face interview of the employees

4.2.3 Allowance

The Bank provides house rent allowance of 60% of the basic salary; medical allowance of
20%; and the conveyance allowance of 10% of the basic salary, entertainment allowance 10%

4.2.4 Retirement benefits (gratuity and provident fund)

Gratuity plan: The gratuity plan is employee will be eligible for getting gratuity for
minimum 8years of join in the bank. For each of the year of job the employee will get
equivalent of two months of his last basic salary.

Provident fund: The Company gives the opportunity of the contributory provident fund
facilities. Wherein 10% of the basic salary is deducted and the company contributes the same
to the provident fund.

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4.3 Questionnaire Survey Analysis:

Q1.I am satisfied with the salary of BASIC Bank Limited.

The responses of the respondents are accumulated in the following table:

Particulars Number of respondents Percentage

Strongly Satisfied 05 45.45
Satisfied 05 45.45
Neutral 01 9.09
Dissatisfied 0 0
StronglyDissatisfied 0 0
Total 11 100%

Comment:

From the above table we see that most of the respondents are satisfied with the current salary
of the organization so we can say that, the salary of BASIC Bank is satisfactory.

Q2. I am satisfied with the allowances of BASIC Bank Limited.

The responses of the respondents are accumulated in the following table:

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 Particulars Number of respondents Percentage
Strongly Satisfied 02 18.18
Satisfied 09 81.81
Neutral 0 0
Dissatisfied 0 0
StronglyDissatisfied 0 0
Total 11 100%

Comment:
From the above table we see that most of the respondents are satisfied with the allowances of
the organization so we can say that, the allowances of BASIC Bank are satisfactory.

Q3. I am satisfied with the bonuses of BASIC Bank Limited.

The responses of the respondents are accumulated in the following table:

Particulars Number of respondents Percentage

Strongly Satisfied 02 18.18

Satisfied 09 81.81

Neutral 0 0

Dissatisfied 0 0

StronglyDissatisfied 0 0

Total 11 100%

Comment:
From the above table we see that most of the respondents are satisfied with the bonuses of the
organization so we can say that, the bonuses of BASIC Bank are satisfactory.

Q4. I am satisfied with the entertainment allowance of BASIC Bank Limited.

The responses of the respondents are accumulated in the following table:

Particulars Number of respondents Percentage

Strongly Satisfied 02 18.18
Satisfied 08 72.72

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 Neutral 01 9.09
Dissatisfied 0 0
StronglyDissatisfied 0 0
Total 11 100%

Comment:
From the above table we see that most of the respondents are satisfied with the entertainment
bonus of the organization so we can say that, the incentives of BASIC Bank are satisfactory.

Q5. I am satisfied with the retirement benefits (pension, gratuity and provident fund) of
BASIC Bank Limited.

The responses of the respondents are accumulated in the following table:

Particulars Number of respondents Percentage

Strongly Satisfied 02 18.18
Satisfied 08 72.72
Neutral 01 9.09
Dissatisfied 0 0
StronglyDissatisfied 0 0
Total 11 100%

Comment:

From the above table we see that most of the respondents are satisfied with the retirement
benefits (pension, gratuity and provident fund) of the organization so we can say that, the
retirement benefits of BASIC Bank are satisfactory.

Q6. I am satisfied with the non-financial benefits of BASIC Bank Limited.

The responses of the respondents are accumulated in the following table:

Particulars Number of respondents Percentage

Strongly Satisfied 0 0
Satisfied 0 0
Neutral 1 9.09
Dissatisfied 10 90.90
StronglyDissatisfied 0 0

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 Total 11 100%

Comment:
From the above table we see that most of the respondents are not satisfied with the non-
financial benefits of the organization. So we can say that, the non-financial benefits of
BASIC Bank are dissatisfactory.

Q7. I am satisfied with the whole compensation package benefits of BASIC Bank
Limited.

The responses of the respondents are accumulated in the following table:

Particulars Number of respondents Percentage

Strongly Satisfied 01 9.09
Satisfied 09 81.81
Neutral 01 9.09
Dissatisfied 0 0
StronglyDissatisfied 0 0
Total 11 100%

Comment:

From the above table we see that most of the respondents are satisfied with the whole
compensation package of the organization so we can say that, the total compensation package
of BASIC Bank are satisfactory.

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MAJOR FINDINGS

The findings of the study are:

1. From the above questionnaire we found that most of the employees are satisfied at the
basic salary range that the bank provide.
2. BASIC Bank Limited provides 2 festival bonuses that are given in every year equal to
the basic salary.
3. They also provide 60% house rent allowance, 20% medical allowance, 10%
conveyance allowance and 10% entertainment allowance for every employee as per
employees own basic.
4. The gratuity plan is: An employee will be eligible for getting gratuity for minimum 8
years of job in the bank. For each of the year of job the employee will get equivalent
of two months of his last basic salary.
5. The employees of BASIC Bank also get provident found facility, wherein 10% of the
basic salary is deducted and the company contributes the same to the provident found.
6. Most of the employees of BASIC Bank are satisfied at the various types of allowances
that they get.
7. The employees of BASIC Bank are satisfied at their 2 festival bonuses and a leave
fair assistance bonus.
8. The employees of BASIC BANK Limited are satisfied with the entertainment
allowances of the bank.
9. The employees of BASIC Bank are satisfied with the retirement benefits such as
Gratuity and provident found facility.
10. From the above questionnaire we found that employees are not satisfied about their
non-compensation package perhaps they have no non-compensation package. These
are the major findings of the compensation package of BASIC Bank Limited.

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 Chapter-Five
Conclusion& Recommendation

Page | 44
5.1 CONCLUSION

In this ever changing context of global Banking business, it is necessary to enrich the
motivation and the satisfaction level of the employees to meet the business goals. Sound and
satisfactory compensation is one of the important tools which can enhance the level of
motivation of the employees and consequently can enrich their level of satisfaction. It is also
an important tool to get the employees committed to the goals of the organization. The
compensation practices of BASIC Bank Ltd is very well aligned with the organization goals
and helping a lot to achieve it. However, up to this stage the compensation management
procedure of BASIC BANK Limited is in moderate good position. Through it has some
limitations that some employees are not satisfied with some of the compensation component,
so the bank should make a compensation structure according to the employees demand or at
least comparing to the other competitive banks.

5.2 RECOMMENDATIONS

Based on the above findings the following recommendations are provided:

1. Very recent BASIC Bank Limited stop giving the incentive bonuses to the employees
because of their lack of profitability. That’s why employees are demotivated .I think
should provide at least a small amount of incentive bonus to inspire the employees.
2. The employees are not satisfied about the non-financial benefits of the bank. BASIC
Bank Limited should give some non-financial benefit such as organization should
arrange tour or picnic program at their own cost. The can also provide day care or child
care unit to support the female employees.

The bank should initiate it as soon as it overcomes its situations.

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Bibliography

Page | 46
BIBLIOGRAPHY

1 References Books:
1. Gankar, S.V. &Memoria, C.B. (1998). Personnel Management. Himalaya

Publishing House, Hyderabad, India.

2. Decenzo, David A. & Robbins, Stephen P. (2003). Human Resource Management.

John Willey & Sons, Inc., New York.

3. Decenzo, David A. & Robbins, Stephen P. (2002). Personnel/ Human Resource

Management.Prentice Hall of India Private Limited, New Delhi.

4. Henderson, Richard I. (2003). Compensation Management in a knowledge- Based

World.

Pearson Education Pte Ltd, New Delhi.

 Annual Report of BASIC Bank Limited

 Several Booklets from BASIC Bank Limited.

 Several Newsletters from BASIC Bank Limited.

 Website:
www.basicbanklimited.com

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 Survey Questionnaire

Dear Respondent,

The following questions are designed to get your valuable opinion regarding the
compensation management procedure of your organization. Kindly noted that this is an
academic study and the findings will remain confined within academic interests. No part of
this study will be disclosed. Your kind cooperation will be highly appreciated.

Personal Information:
Name of the Respondent :
Name of the Department :
Designation in the Organization :
Contact Number :
The questionnaire is prepared with five points Likert scale. Where:

1 = Strongly disagree (SD),

2 = Disagree (D),
3 = Neither agree nor disagree (N),
4 = Agree (A),
5 = Strongly agree (SA).

Please read carefully the questions and just put a tick (√ ) in the respective box.

Serial
Statements SA A N D SD
No.
01. I am satisfied with the basic salary of BASIC Bank Limited.
02. I am satisfied with the allowances of BASIC Bank Limited.
03. I am satisfied with the bonuses of BASIC Bank Limited.
I am satisfied with the entertainment allowance of BASIC Bank
04.
Limited.
05. I am satisfied with the retirement benefits (pension, gratuity and

Page | 48
 provident fund) of BASIC Bank Limited.
I am satisfied with the non-financial benefits of BASIC Bank
06.
Limited.
I am satisfied with the whole compensation package benefits
07.
of BASIC Bank Limited.

***Thanks a lot for your pleasant cooperation***

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