An Assignment on “Corporate Governance practices of Rupali bank

PLC”.
Course Code: - FIN-6305.

Course Title: - Corporate Governance & Restructuring.

Submitted to: -
Ayesha Akhter
Associate Professor, Department of Finance,
Faculty of Business Studies, Jagannath University.

Submitted by: -
Name Id
Fatema Akter M23030203160
M.N. Nahid Hossain M23030203150
Srabani Akter M23030203172
Marium Barek M23030203186
Nirmal Kumar Chakraborty M23030203169
Mst. Natasha Azad Keya M23030203167

Date of Submission: - 10th May, 2024

 Table of Content
1. Corporate Governance: Basic concept ...................................................................................................... 1
1.1 Definitions........................................................................................................................................... 1
1.2 Historical perspective.......................................................................................................................... 2
1.3 Need and importance of CG in Financial Institutions ......................................................................... 3
1.4 Good governance has several aspects: ................................................................................................ 4
1.5 How to achieve good corporate governance ....................................................................................... 5
1.5.1 Diversified board.......................................................................................................................... 5
1.5.2 Review the Board Regularly ........................................................................................................ 5
1.5.3. Directors' independence .............................................................................................................. 5
1.5.4. Auditor independence ................................................................................................................. 5
1.5.5. Transparency ............................................................................................................................... 5
1.5.6. Shareholder rights ....................................................................................................................... 5
1.5.7. Risk Management ....................................................................................................................... 5
1.5.8. Adequate Disclosures .................................................................................................................. 5
2. CG of Rupali Bank PLC in the light of Basel principles .......................................................................... 6
3. CG of Rupali Bank PLC in the light of BIS Code of Conduct ................................................................. 8
3.1 Standard of conduct ............................................................................................................................ 8
3.2 Basic principles ................................................................................................................................... 8
3.3 Avoidance of potential conflicts of interest- External activities ......................................................... 8
4. CG of Rupali Bank PLC under guidelines of Bangladesh Bank........................................................... 9
4.1 Responsibilities and authorities of the Board of Directors ................................................................. 9
4.1.1 Work-planning and strategic management................................................................................... 9
4.1.2 Credit and risk management: ....................................................................................................... 9
4.1.3 Internal control management ..................................................................................................... 10
4.1.4 Human resources management and development ...................................................................... 10
4.1.5 Financial management ............................................................................................................... 10
4.1.6 Appointment of Chief Executive Officer (CEO) ....................................................................... 10
4.1.7 Other responsibilities of the Board ............................................................................................ 10
4.1.8 Meeting of Board ....................................................................................................................... 10
4.2 Responsibilities of the chairman of the board of directors ............................................................... 11
4.3 Independent Members of the Board .................................................................................................. 11

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 4.4 Board Committees ............................................................................................................................ 11
4.5 Strategic objectives ........................................................................................................................... 11
4.6 Governance Framework .................................................................................................................... 11
4.7 Corporate culture .............................................................................................................................. 11
4.8 Boards performance evaluation ........................................................................................................ 11
4.9 The role of a senior management team (SMT) ................................................................................. 12
4.10 Ways Organizational Culture Impacts Business Strategy ............................................................... 12
4.11 Asset composition of Rupali Bank PLC ......................................................................................... 12
4.12 Managing problem asset ................................................................................................................. 12
4.13 Vision and Mission ......................................................................................................................... 12
4.13.1 Vision of Rupali Bank.............................................................................................................. 13
4.13.2 Mission of Rupali Bank ........................................................................................................... 13
4.14 Brand Promise ............................................................................................................................. 13
5. Limitations and challenges to implement CG at Rupali Bank PLC ........................................................ 14
6. Conclusion .............................................................................................................................................. 15
7. References ............................................................................................................................................... 16

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1. Corporate Governance: Basic concept
Corporate Governance (CG) has become a very common and much used term in the present-day
world, especially when the performance of the business concern comes into consideration. The
ordinary meaning of governance is the manner of directing and controlling the actions and affairs
of an entity. In this growing and complex business world the importance of a good corporate
governance culture cannot be ignored which has been proved through various scandals, mishaps
and business failure.

While realizing the importance of good CG we need to know the formation of a corporation or
business entity and the way it is run and the people responsible to steer it successfully. We know
that the corporations or the business entities (we shall call it a company for better understanding)
are owned by stockholders who purchase shares and therefore own a portion of the corporation‘s
assets ascertained by a certain percentage according to respective investment in shares. As all the
stockholders cannot run a company jointly, they need to elect a board of directors to represent
their interests and govern the operation of the company. The directors in turn appoint an
executive or number of executives to oversee the affairs of the entity. Out of the numbers of
executives one is appointed as Chief Executive who is responsible to run the show on behalf of
the Board of Directors, which in turn represents the stockholders. In such a company the Chief
Executive is sole responsible and accountable to the Board of Directors for all purposes. It is the
role of the directors to govern the actions of the executive(s) and ensure that the interests of the
shareholders remain the prime agenda of all the functions and decisions.

It is true that the shareholders are the legal owners of the company, but they do not have much
control over its operations. As a result, they have no other functions except receiving regular
dividend and the portion of asset in case of dissolution of the company. So, the general
shareholders are not personally liable for the debts of the company, although they have to suffer
the loss in case the stock value falls.

It is believed that the companies should be subject to the same ethical and social standards that
are applied to other citizens. It is also believed that companies should be accountable to the
society, environment, their employees, and the country as a whole, instead of being interested
solely in the price of shares and dividend. This is exactly where the concept of good corporate
governance originates.

1.1 Definitions
Sir Adrian Cadbury, the pioneer in raising the awareness and stimulating the debate on CG gave
a refined definition of the term which was adopted by the World Bank. According to him CG is
―The system by which companies are directed and controlled Corporate Governance is
concerned with holding the balance between economic and social goals and between individual
and communal goals. The corporate governance framework is there to encourage the efficient

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use of resources and equally to require accountability for the stewardship of those resources. The
aim is to align as nearly as possible the interests of individuals, corporations and society.
However, we can simply say that corporate governance is a mode by which the management is
motivated to work for the betterment of the real owners of the corporation i.e., the shareholders
keeping a balance between economic and social, individual and communal interest.

1.2 Historical perspective

The term corporate governance gained its' importance when separation between shareholders,
directors and the managers became extremely necessary and the roles required to be ascertained
for best practices of business. In his famous book The Wealth of Nations, Adam Smith
identified differing interest between managers and shareholder as an, insurmountable dilemma
for efficient operation of a company.

This view of Adam Smith was further substantiated by Alfred Marshall mentioning about
versatilities of conflict in a company.

up to the end of the 16th century, business firms were jointly owned by the partners and thus the
partnership was the only form available for most types of business entities. Partners had to bear
unlimited personal liability for all types of contractual obligations of the firm, as because such
firms didn't have a separate legal entity. The most widely known joint stock company was the
British East India Company for operating trade expeditions to India. This joint-stock company
was granted an English Royal Charter by Queen Elizabeth I at the end 1600. The company had
125 shareholders, and a capital of 72,000 Pound Sterling. This was one of the first companies
established as well to gather investors to collect the huge capital required for large projects.

It is to be noted that that during that period the companies were small, quasi-governmental
institutions chartered by the crown for a specific purpose of trade privileges and for a limited
time.

The importance of CG, though not uttered, was felt in post World War II period especially in the
US when it experienced a boom in war economy boom and companies grew rapidly. Yet in such
corporate prosperity, the issue of good governance of companies was not a priority, and as such
the term ―corporate governance‖ did not become a subject of discussion. However, the
importance of CG was felt in the mid-1970s when SEC in the US brought allegations against the
outside directors of Penn Central, a railway company which had diversified into pipelines, hotels,
industrial parks and commercial real estate, failed to detect wide range of misconducts of the
executives of the company. The main allegations were that the company managers had
misrepresented the company‘s financial condition under federal securities law. It is worth
mentioning that the Penn Central had gone bankrupt in 1970 for which serious inaction of the
board was believed to to be the main reason. The term CG appeared in the official books of US

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SEC for the first time in 1976 under which managerial accountability issues were treated as a
part of regulatory compliance. At the same time the regulatory body asked to introduce an Audit
Committee composed of all independent directors in all the listed companies.

From the above this is evident that the issue of CG started to be implemented in the mid- 1970s
in USA.

1.3 Need and importance of CG in Financial Institutions

The FIs, with complex organization structures, should have a CG code for various valid reasons.
 FIs have an overwhelmingly dominant position in a financial system, and are extremely
important engines of bringing economic growth for which a banking system with good
governance is extremely important.
 FIs can undertake their business operations having public trust and confidence which is
not common in any other business nature. They can generate monetary activities through
their credit creation functions and thus have direct and strong influence on the national
economy.
 The FIs need to comply with the same standards and principles of CG which sometimes
are more stringent than the companies in other sectors. Banks have to operate and depend
on other markets which are not directly related to other industries, e.g., the interbank
market for which very strict and stringent regulations have to be followed.
 If financial markets are usually underdeveloped, FIs in developing economies are
typically the most important source of finance for the majority of firms thereby
augmenting and sustaining growth. This function can only be ensured through good CG.
 The interests of FIs' shareholders may oppose that of government or the regulators,
sometimes which may not coincide with maximizing shareholders value. Shareholders or
the board want managers to take more risk than is socially optimal, whereas regulators
may not like managers' risk taking venture for financial stability.
 As well as providing a generally accepted means of payment, FIs are usually the main
depository for the economy savings that arranges capital for industrialization and
economic prosperity. Unless there is sound CG in banks, this need cannot be catered.
 The banking industry is less competitive than other business sectors and the Inefficient
banks are not vulnerable to be forced out of the market because of regulatory protection.
So, the FIs need stronger CG mechanisms than other business.
 The contagion effect resulting from the instability of one bank, may affect a class of FIs
or even the entire financial system and the economy. If one FI becomes unstable, there
may be a heightened perception of risk among depositors for the entire class of such
banks, resulting in a run on the deposits and putting the entire financial system in
jeopardy. If a corporate fails, the consequences can be restricted only to the
stakeholders, but if a bank fails, the impact can spread rapidly through to other banks

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 with potentially serious consequences for the entire financial system and the macro
economy.
 Finally, FIs have to operate under specific regulators and supervision authorities which
are not common for other business corporations, as such this special accountability
requires the banks to ensure special corporate compliance different than other industries.
As CG is treated as a powerful tool to generate trust and confidence in an institution, the
same is essentially important for banks. The importance is substantiated by the banks'
nature of business that requires funds raised from the public, their vulnerability to credit
risk, liquidity risk, frauds etc., and in case of such failures of the banks, erosion of
peoples' confidence can jeopardize the entire financial system of a country.
From our experience of bank failures, worldwide economic crises and their reasons it can be
deduced that good governance is crucial for a bank ‘s stability and growth.
1.4 Good governance has several aspects:
 Proper leadership: Members of the Board must be in charge of defining, guiding and
controlling the bank’s strategy in areas such as organizational and corporate culture, risk
control, business management, etc.
 Risk control: Boards must understand the risks posing threat to the bank. In all the
financial crises in the history, most of the board members did not have sufficient
knowledge of their bank’s risk management capability and experience required to
supervise or even understand and conduct the financial business itself.
 Capabilities: The banks must have technical capabilities and suitable staff to ensure
adequate leadership and risk control experienced so far. For this reason, high standard of
training for board members has been suggested by the regulators so that they can assume
greater individual and group responsibilities.
 Incentive structure: During many previous crises, banks boards induced the managers to
make their balance sheets considerably larger or getting involved in all sorts of complex
products to occupy the market. They set very ambitious growth targets and
commensurate incentives were designed to encourage this growth. This strategy clashed
with the interests of banks depositors and employees.
 Seriousness: The criminal proceedings of the past financial juggleries have revealed the
need for transparent, well-documented and detailed decision-taking by the boards and
senior managers of banks, and maximum compliance with regulations.
 Role of the shareholders: Board members must safeguard the interests of the bank and all
its shareholders. As a result, the regulators calls for increasing numbers of independent
board members, which can increase better participation of the shareholders or reduce
hegemony of the board members.

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1.5 How to achieve good corporate governance
A good corporate governance can be achieved by making following policies, these policies are
narrating in the followings: -

1.5.1 Diversified board: - If all board members have homogeneity in experience, skill sets and
category of profession, diversity of opinion cannot be found in decision which is required to
make the best choice of options to formulate the company’s strategy and other plans.

1.5.2 Review the Board Regularly: - For a diverse board to work effectively, regular
evaluations are important.

1.5.3. Directors' independence:- Independence of directors is required that wants to break away
from safe, conservative thinking.

1.5.4. Auditor independence: - Undue influence over the work of audit committees and
independent auditors is a concern in terms of CG. Independence is key to show that the reports
are accurate and tell the true tale of the company.

1.5.5. Transparency: - Transparency is an essential tool for good CG. The organizations have
to accurately report the bad and good news both.

1.5.6. Shareholder rights: - Shareholders should know their rights when they invest in a
business. They should be ensured of their rights are backed up by Articles of Association,
constitution and bylaws.

1.5.7. Risk Management: - Establish a risk management process and internal control framework
that is both effective and conducive to your business needs and aim to review its effectiveness
periodically. Disaster recovery plans are critical to any business endeavor, so regularly keeping
update is always necessary.

1.5.8. Adequate Disclosures: - This refers to the disclosure of all related party’s transactions,
and the other interests of all director ‘s involved. If a director has external financial interests
outside of the company, it could influence their decision-making.

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2. Corporate Governance of Rupali Bank PLC in the light of Basel principles
Rupali Bank PLC follows 13 principles of Basel Committee to ensure corporate governance.

Principle 1: Board’s overall responsibilities

The board has overall responsibility for the bank, including approving and overseeing
management’s implementation of the bank’s strategic objectives, governance framework and
corporate culture.

Principle 2: Board qualifications and composition

Board members are qualified, individually and collectively, for their positions. They understand
their oversight and corporate governance role and are able to exercise sound, objective judgment
about the affairs of the bank.

Principle 3: Board’s own structure and practices

The board defines appropriate governance structures and practices for its own work, and put in
place the means for such practices to be followed and periodically reviewed for ongoing
effectiveness.

Principle 4: Senior management

Under the direction and oversight of the board, senior management carries out and manage the
bank’s activities in a manner consistent with the business strategy, risk appetite, remuneration
and other policies approved by the board.

Principle 5: Governance of group structures

The board and senior management know and understand the bank group’s organizational
structure and the risks that it poses.

Principle 6: Risk management function

Banks have an effective independent risk management function, under the direction of a chief
risk officer (CRO), with sufficient stature, independence, resources and access to the board.

Principle 7: Risk identification, monitoring and controlling

Risks are identified, monitored and controlled on an ongoing bank-wide and individual entity
basis. The sophistication of the bank’s risk management and internal control infrastructure keep
pace with changes to the bank’s risk profile, to the external risk landscape and in industry
practice.

Principle 8: Risk communication

An effective risk governance framework has been built to robust communication within the bank
about risk, both across the organization and through reporting to the board and senior
management.

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Principle 9: Compliance
Rupali bank’s board of directors is responsible for overseeing the management of the bank’s
compliance risk. The board establishes a compliance function and approves the bank’s policies
and processes for identifying, assessing, monitoring and reporting and advising on compliance
risk.

Principle 10: Internal audit

The internal audit function provides independent assurance to the board and supports board and
senior management in promoting an effective governance process and the long-term soundness
of the bank.

Principle 11: Compensation

Rupali bank’s remuneration structure supports sound corporate governance and risk
management.

Principle 12: Disclosure and transparency

The governance of the bank is adequately transparent to its shareholders, depositors, other
relevant stakeholders and market participants.

Principle 13: The role of supervisors

Supervisors provide guidance for and supervise corporate governance at Rupali Bank PLC,
including through comprehensive evaluations and regular interaction with boards and senior
management, require improvement and remedial action as necessary, and share information on
corporate governance with other supervisors.

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3. Corporate Governance of Rupali Bank PLC in the light of BIS Code of
Conduct
Rupali Bank PLC formulated Code of conduct in 2020 for the staffs ensuring compatibility with
Special Staff Rules of Bank for International Settlements. Significant points of the COC of
Rupali Bank PLC are quoted below:

3.1 Standard of conduct

In the interests of their professional standing, and to protect the reputation of the Bank, Members
of Staff shall maintain the highest standards of conduct both at and outside the Bank.
3.2 Basic principles
(i) Members of Staff shall act honestly and impartially, and carry out their duties diligently,
efficiently and to the best of their abilities.
(ii) Members of Staff are required to devote their working hours to the interests of the Bank. In
particular, they may not conduct other activities in or from within the Bank in ways that interfere
with the performance of their professional duties.
(iii) Members of Staff may only commit the Bank to engagements on matters falling within the
scope of their responsibilities. They should, as far as possible, avoid committing the Bank to an
engagement on the Bank’s behalf in a situation where the outcome may be detrimental to the
interests of the Bank. When committing the Bank to an engagement in writing, they should be
reasonably satisfied that the supporting document accurately reflects the engagement.
(iv) Members of Staff should treat all their colleagues with courtesy and respect, without
harassment or physical or verbal abuse. Members of Staff should avoid behavior that, although
not rising to the level of harassment or abuse, may nonetheless create an atmosphere of hostility
or intimidation.
(v) Members of Staff shall avoid any form of discrimination based on race, nationality, gender,
age, physical disability, sexual preference, political opinions, or religious convictions.
(vi) Members of Staff are responsible for ensuring that Bank resources, including Bank funds
and facilities, are used for business purposes only, unless private use is permitted under a
relevant service note or other internal rule. They should also ensure that Bank resources are used
in an appropriate manner and that reasonable measures are taken to limit costs and expenses
incurred by the Bank.
3.3 Avoidance of potential conflicts of interest- External activities
(a) Members of Staff should refrain from entering into commitments which would involve an
obvious risk of leading them into financial difficulties.
(b) Members of Staff shall not engage in any activity which may be deemed to constitute the use
of inside information.
(c) Members of Staff shall avoid any payments that may improperly influence officials, business
partners or other individuals. They must exercise due diligence to ensure that Bank funds are not
diverted towards illegal payments of any kind.

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4. Corporate Governance of Rupali Bank PLC under guidelines of
Bangladesh Bank
In exercise of the powers conferred by section 45(1) of the Bank Companies Act, 1991, and as
the regulator of the banking institutions, Bangladesh Bank formulated the ‘Prudential
Regulations for Banks (2014)' to ensure good governance in the banks. Banking Regulation and
Policy Department of Bangladesh bank, by circular no. 12 Dated: 26/04/03, circular no. 11
Dated: 27/10/13 and instructions from time to time, set the guidelines and code of conduct for
the banks to exercise corporate governance. Rupali Bank PLC has ensured that corporate
governance is exercised at the bank under the guidelines and norms of BB which are described
below:

4.1 Responsibilities and authorities of the Board of Directors

The Bank Company Act, 1991 Section 15 (kha) & (ga) demarcates responsibility of the board of
directors for establishing policies for the bank companies, for risk management, internal controls,
internal audit and compliance and for ensuring their implementation. The board of Rupali Bank
PLC follows guidelines and performs responsibilities as following ways:

4.1.1 Work-planning and strategic management

i. The board determines the objectives and goals and chalk out strategies and work-plans on
annual basis. It analyzes/monitors, at quarterly rests, the development of implementation of the
work-plans.

ii. The board has its analytical review incorporated in the Annual Report as regards to the
success/failure in achieving the business and other targets as set out in its annual work-plan and
apprises the shareholders of its opinions/ recommendations on future plans and strategies. It also
sets the Key Performance Indicators (KPIs) for the CEO & officers immediate two tiers below
the CEO, and evaluates from time to time.

4.1.2 Credit and risk management:

i. The policies, strategies, procedures etc. in respect of appraisal of loan/investment proposal,
sanction, disbursement, recovery, reschedule and write-off thereof are made with the board's
approval under the purview of the existing laws, rules and regulations. The board specifically
distributes the power of sanction of loan/investment. No director interferes direct or indirect, into
the process of loan approval.
ii. The board frames policies for risk management and gets them complied with and monitors the
compliance. The board monitors the compliance of the guidelines of Bangladesh Bank regarding
key risk management.

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4.1.3 Internal control management
The board is vigilant on the internal control system of the bank in order to attain and maintain
satisfactory qualitative standard of its loan/investment portfolio. The board has established such
an internal control system so that the internal audit process can be conducted independently from
the management. It reviews the reports submitted by its audit committee at quarterly rests
regarding compliance of recommendations made in internal and external audit reports and the
Bangladesh Bank inspection reports.

4.1.4 Human resources management and development

i). Policies relating to recruitment, promotion, transfer, disciplinary and punitive measures,
human resources development etc. and service rules are framed and approved by the board. The
chairman or the directors in no way involve themselves or interfere into or influence over any
administrative affairs including recruitment, promotion, transfer and disciplinary measures as
executed under the set service rules.
ii). The board focuses its special attention to the development of skills of bank's staff in different
fields of its business activities including prudent appraisal of loan/investment proposals, and to
the adoption of modern electronic and information technologies and the introduction of effective
Management Information System (MIS).
iii). The board promotes healthy code of conducts for developing a compliance culture.

4.1.5 Financial management

i). The annual budget and the statutory financial statements are finalized with the approval of the
board. It, at quarterly rests, reviews/monitors the positions in respect of bank's income,
expenditure, liquidity, non-performing asset, capital base and adequacy, maintenance of loan loss
provision and steps taken for recovery of defaulted loans including legal measures.
ii). The board frames the policies and procedures for bank's purchase and procurement activities
and accordingly approves the distribution of power for making such expenditures.
iii). The board will review whether an Asset-Liability Committee (ALCO) has been formed and
it is working according to Bangladesh Bank guidelines.

4.1.6 Appointment of Chief Executive Officer (CEO)

In order to strengthen the financial base of the bank and obtain confidence of the depositors, the
Board of directors appoints a suitable CEO with the approval of the Bangladesh Bank.

4.1.7 Other responsibilities of the Board

The board follows and complies with the responsibilities assigned by Bangladesh Bank.

4.1.8 Meeting of Board

Board of directors meets at least once in every three months.

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4.2 Responsibilities of the chairman of the board of directors
1. The chairman of the board of directors or chairman of any committee formed by the board or
any director does not participate in or interferes into the administrative or operational and routine
affairs of the bank.
2. The chairman may conduct on-site inspection of any bank-branch or financing activities under
the purview of the oversight responsibilities of the board.

4.3 Independent Members of the Board

An independent director, in corporate governance, refers to a member of a board of directors
who does not have a material relationship with a company and is neither part of its executive
team nor involved in the day-to-day operations of the company. Rupali Bank PLC has
independent director satisfying the secretarial to ensure good corporate governance.

4.4 Board Committees

As per 'Prudential Regulations for Banks (2014)' of Bangladesh Bank, Rupali Bank has
Executive Committee, Audit Committee and Risk Management Committee to ensure the best
practices of CG in Bank Management.

4.5 Strategic objectives

Strategic objectives are the big-picture goals for a banking company as they ascertain what the
company will do to fulfill its mission. Rupali Bank PLC are launching new products, trying to
increase profitability, or growing market share for the its products to achieve strategic objectives.

4.6 Governance Framework

The governance framework provides a mechanism for senior management, as well as those at the
operational level, to have a clear understanding and oversight of each other's expectations,
objectives, performance, risk appetite, and reporting requirements. These aspects are effectively
communicated to relevant persons in the organization.

4.7 Corporate culture

Rupali Bank PLC formulates policy to determine how its employees and management interact
and handle outside business transactions.

4.8 Boards performance evaluation

In most of the cases investors or the general shareholders feel that boards and managers are
keeping them in the dark either intentionally or unintentionally. For transparency the board of
directors of Rupali Bank PLC is performing and Financial Institutions Division under the
Ministry of Finance as well as Bangladesh Bank annually reviews the effectiveness of the board.

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4.9 The role of a senior management team (SMT)
The senior management team of Rupali Bank PLC plays a number of vital roles within the bank
guidelines on Internal Control and Compliance in banks (2015) of Bangladesh Bank, Including:
 devising an appropriate strategy and ensuring it is implemented effectively;
 Setting ambitious yet achievable goals, then managing teams to work towards them;
 Coordinating activities in functional departments (i.e. finance and HR);
 Organizing the management of resources within the firm;
 Managing the demands of stakeholders through the board of directors.

4.10 Ways Organizational Culture Impacts Business Strategy

Organizational culture impacts business strategy of Rupali Bank PLC in many ways:

a) Treat employees with dignity, empathy, and respect

b) Opportunity for innovation and creativity
c) Using company values
d) Treating culture as a business strategy
e) Keeping culture over strategy
f) Building a diverse team
g) Empowering employees to give feedback
4.11 Asset composition of Rupali Bank PLC
Assets composition of a bank reflects the deployment of sources of funds, main source of which
is deposits. The other sources are borrowings from other banks, capital, reserves and surplus. The
deposits of Rupali Bank come mainly from savings, current and term deposits. These deposits
constitute 80 percent of the total sources of funds. Out of the total deposits, term deposits
constitute above 50 percent. The bank maintains SLR and CRR as per requirements of
Bangladesh Bank.
4.12 Managing problem asset
As per existing regulations of BB, the NPL assets are classified, rescheduled or written-off.
Other problem assets get treated as per instructions of BB.

4.13 Vision and Mission

A vision statement is a short statement, that describes the future goals and ambitions of an
organization. It is the extract of the company’s vision for the future in a way that outlines its
long-term goals and reflects core values. A well-composed vision statement should serve as a
guide that inspires the employees to work toward the greater goal of the organization. On the
other hand, a mission statement expresses organization's core values and purpose. A strong
mission statement is usually a concise phrase that sets forward what the company does, how it
does it, and, sometimes, why.

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4.13.1 Vision of Rupali Bank
Expand our customer base by being known as the financial partner of choice that constantly
exceeds customer expectations.

4.13.2 Mission of Rupali Bank

a) Develop a long-term relationship that helps our customers to achieve financial success.
b) Offer rewarding career opportunities and cultivate staff commitments.
c) Uphold ethical values and meet its customer’s financial needs in the fastest and most
appropriate way and continue innovative works in order to achieve human resource with superior
qualities, technological infrastructure and service package.

4.14 Brand Promise

Brand can be defined as a name, term, design, symbol, or any other feature that identifies a
particular good or service as distinct from those of others in the market or industry. The legal
term for brand is trademark. A brand may identify one item, a family of items, or all items of that
producer. A brand promise is a value or experience a company’s customers can expect to receive
every single time they interact with that company. The more a company can deliver on that
promise, the stronger the brand value in the mind of customers and employees. The motto of
Rupali Bank is to assure better service which is the bank’s promise to their clients.

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5. Limitations and challenges to implement CG at Rupali Bank PLC
Although the concerned authority of Rupali Bank PLC is trying to implement good governance
into the bank under the guidelines of BB and other monitoring authorities, there remains some
limitations and challenges as well, which are described below:

1. Basel- III has not been implemented yet, it is under process.

2. Some manuals are not updated.
3. Corruptions, non-compliance regarding laws and regulations, and greedy tendency of the
borrowers are responsible for increasing Non-performing loans.
4. Abuse of power by stakeholders.
5. Significant number of employees are not technically sound.
6. Challenges in adopting enterprise risk management.
7. To implement an effective and efficient model across an organization is not simple or
easy task and Rupali Bank has not been fully able to implement three lines defense
model.
8. Branches of the bank are situated all over Bangladesh, it is very challenging for the bank
to keep relationship with customers and provide services.

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6. Conclusion
FIs have an overwhelmingly dominant position in a financial system, and are extremely
important engines of bringing economic growth for which a banking system with good
governance is extremely important. The FIs need to comply with the same standards and
principles of CG which sometimes are more stringent than the companies in other sectors. Rupali
Bank PLC., being headed by the Managing Director & CEO, who is a reputed professional
Banker, along with 10 other board members who are renowned and established in their
respective fields are qualified enough to ensure good governance at Rupali Bank.

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7. References
 Arun, T.G. and Turner, J., 2009. Corporate governance of banks in developing
economies: Concepts and issues. Corporate governance and development.

 Bangladesh Bank. Available at: https://www.bb.org.bd/en/index.php/mediaroom/circular

(Accessed: 08 May 2024).
 John, K., De Masi, S. and Paci, A., 2016. Corporate governance in banks. Corporate
governance: an international review, 24(3), pp.303-321.
 Macey, J.R. and O'hara, M., 2003. The corporate governance of banks. Economic policy
review, 9(1).

 Rahman, M.A. and Islam, J., 2018. The impact of corporate governance on bank
performance: Empirical evidence from Bangladesh. Global Journal of Management and
Business Research, 18(8), pp.49-53.

 Rashid, M.H.U., Zobair, S.A.M., Chowdhury, M.A.I. and Islam, A., 2020. Corporate
governance and banks’ productivity: evidence from the banking industry in Bangladesh.
Business Research, 13, pp.615-637.

 Rupali Bank Plc. Available at: https://rupalibank.com.bd/ (Accessed: 08 May 2024).

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