Agrani Bank

Agrani Bank  a nationalised commercial bank (NCB) of Bangladesh established on 26 March 1972 under the Bangladesh Banks (Nationalisation) Order 1972 by taking over two abandoned Pakistani banks - Habib Bank and Commerce Bank. With its head office in dhaka, the bank started its operational activities with an authorised capital of Tk .30 million and paid up capital of Tk 10 million. The paid up capital has increased to Tk 30 million in December 1973. In 1999-2000, the bank's authorised and paid up capital were Tk. 8 billion and 2.5 billion respectively. 

In addition to traditional deposit taking in various accounts and providing loans to almost all sectors of the economy, the bank offers many other services through its schemes of school banking, inland travelers cheques, pension funds, industrial development bond and inland remittance. The bank operates some income generating and economic development projects such as the Productive Employment Project, Netrokona Integrated Agri-product and Water Management Project, IFAD Project for poverty Alleviation through Employment Creation, Kurigram Poverty Alleviation Project, Crop Intensification Project, National Micro Irrigation Development Project, Micro Entrepreneurship Development Project, and Agricultural Diversification and Intensification Project. The bank participates actively in foreign exchange business including overseas remittance services. The total volume of foreign exchange business handled by the bank in servicing imports and exports and remittances during 1999-2000 amounted to Tk 55.345 billion compared to only Tk 310 million in 1972-73. At present, the bank has correspondent relationship with 903 foreign banks/bank offices throughout the world.

The management of the bank is vested in a 7-member board of directors appointed by the government. The managing director is the chief executive and he is assisted by deputy managing director, six general managers and other senior executives. The general managers are in charge of the bank's branches in six administrative divisions of the country namely dhaka, chittagong, rajshahi, khulna, sylhet and barisal. The bank has 22 departments at its head office, including a training institute at Dhaka. Total number of employees of the bank was 13269 on 30 June 2000. Up to 31 December 2000, the Bank had 903 branches, of which 586 were in rural areas and 38 were authorised to deal in foreign exchange transactions. 

At the start of its operation in 1972, Agrani Bank had 246 branches, of which 37 were temporarily closed. It had a total deposit of Tk 581 million, advances of Tk 663.40 million and borrowing of Tk 294.80 million. Initially, it did not have any liquid asset to run its operations smoothly and to undertake development activities. Investment amounting to Tk 110 million was in unapproved securities. On 30 June 2000, the total deposit at the bank stood at Tk 92.96 billion, total loans and advances at Tk 74.92 billion, total investment at Tk 25.375 billion, total assets at Tk 124.798 billion and reserve funds at Tk 319 million. Of the total deposits, 8.03%, 35.41%, 19.21% and 37.35% were in current, savings, fixed and other deposits respectively. 4.24% of the total amount of loans and advances were classified. The credit-deposit ratio of the bank was 80.60%. The bank had borrowed Tk 630 million from the inter-bank call market and the total value of its liquid assets was Tk 36.160 billion. In September 1999, the interest rate offered by the bank on savings deposits in both rural and urban areas was 7.50%, while the average interest rate charged by it on lending in different sectors was 13.29%. Public sectors' borrowing from the bank was Tk 12 billion (16% of the bank's total loans and advances); about 44% of these loans were classified. The bank also provided micro-credit. Up to June 2000, the disbursement of micro-credit amounted to Tk 4.615 billion. 

The bank's recovery rate in terms of total outstanding loans was 34% in 1999 and 32% in 2000. The cumulative balance of outstanding loans and advances on 30 June 2000 was Tk 74.97 billion. The amount of overdue loans on the same date was Tk 31.14 billion. The ratio of total overdue to total outstanding loans was 41.54%. As of 30 June 2000, the total and net income of the bank was Tk 4.151 billion and 40.1 million respectively. Compared to previous years, the net profit decreased in 2000, mainly due to increase in interest and operating expenses and a decline in commission and exchange income. A substantial increase in the volume of classified loans has weakened the quality of assets and lessened their earning capacity; this has impacted adversely on the growth rate of the bank's profitability. 

The broad economic areas in which the bank currently lends and the amount of advances to those areas upto 30 June 2000 were agriculture and fisheries: Tk 3.831 billion, industry (small and cottage, and large and medium): Tk 32.866 billion, retail/wholesale trade and hotels and restaurants; Tk 17.527 billion, transport/ communication and storage: Tk 502 million, special credit programmes including poverty alleviation: Tk 1.023 million, insurance, real estate and trade services: Tk 5.435 billion and others: Tk 14.361 billion. 

Agrani Bank monitors its operations through a performance budget. It has a marketing intelligence unit. It conducts a programme of human resources development through training and motivation and has adopted some important policy measures, including introduction of Lending Risk Analysis, suggested by the Financial Sector Reform Programme. The business policies of the bank in 1990s included fulfilling capital adequacy requirements, mobilising large amount of deposits, and making investment of assets in more profitable ways. The bank has diverted its activity toward off-balance sheet items during the last decade as a part of its strategy to increase its area of operation and non-interest based income.