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Chapter-3: Organization Management

1. Planning is an essential part of organization management in banks and involves determining long term goals, strategies, and plans. 2. Organizing involves structuring roles and coordinating divisions, while motivating and controlling ensure goals are met. 3. Bank directors have important responsibilities to depositors, shareholders, regulators and society, and oversee strategic planning, policy, investment decisions, and management oversight.

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141 views

Chapter-3: Organization Management

1. Planning is an essential part of organization management in banks and involves determining long term goals, strategies, and plans. 2. Organizing involves structuring roles and coordinating divisions, while motivating and controlling ensure goals are met. 3. Bank directors have important responsibilities to depositors, shareholders, regulators and society, and oversee strategic planning, policy, investment decisions, and management oversight.

Uploaded by

EEL KfWBMZ2.1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter-3

Organization Management
Concepts Of Bank Management

“The manager has the task of creating a true whole that is larger than the sum of its
part, a Productive entity turns out more than the sum of the resources put into it”
Peter F. Drucker
Planning

controlling Organizing

Motivating coordinating
Planning

• What role to be performed by a bank ,branch or work division?


• How does a work division contribute to the activities of other work divisions?
• What type of activities the bank is engaged in?
• Is the bank providing any exceptional services? Etc.
Long term goals of banks identify some overall topics , which are achievable in future.
For Example –
• What will be the optimum scope and size of the bank in some future period of time?
• What type of efforts would be taken to develop new market segments?
• What type of loan assets will comprise of the future loan portfolio of bank?
• What will be the size of a specific work division in future ? Etc.
Planning Arrangement in a commercial
Bank
Bank objectives

Bank resources

Forecasts Integration and Evaluation strategy


Objectives:
• Our business is the sales of financial services in Oregon and in selected regional, national and international
markets.
• We will strive for stability in earning growth , acquiring investment of high quality , and pursuing sound and
innovative tactics.
• Our primary marketing objective is to increase our share of the market through superior service and appropriate
products consistent with corporate strategic plans.
Policies:
After the setting of objectives, the establishment of bank policies naturally follows . Policies
are general statement of understandings that are designed to stimulate thinking and action
in decision making.
Rules:
Rules should not be confused with policies. A rule requires that specific and definitive actions
be taken of not taken with respect to a given situation.

Strategy :
Once a bank’s objectives and policies are formulated, the next step is to arrive at a strategy to
accomplish these goals and objectives.

Communication:
The strategic Planning process
Financial Objectives
Mission Statement • Capital
“Who we are” • Growth
• Risk Management
• Profitability
• Stockholder
Strategic Planning
• Mission statement
• Financial
Objectives
• Situation Analysis
• SWOT
Situation Analysis
•
Financial
• Action Plans •Peer Group
• Goals • Human Resource
• Timetables • Stockholders and Directors
• Non-Staff Resources
• Policies
• Market share
• Economic Area
• Regulatory
Action Plan:
Goals and Timetables
1
2 SWOT Analysis
3
4
•Internal Strengths
5 • Internal Weaknesses
6 • External Opportunities
7 • External Threats
8
Organizing
Coordinating
Motivating
Evaluation
Appraisal
• Performance review
Controlling
Reports
Audit
Examination
Board of Directors
Composition of Bank Board of Directors
• Appointment By the promoters or sponsors
• Appointment By the shareholders
• Appointment by the existing member of the board of directors
• Appointment by the third party
• Appointment by the government /central bank
Qualification and Election of Directors
Oath of Bank Directors
Powers of the Directors
• To call the so far uncalled portion of the share capital from the share holders
• To invest properly funds of bank
• To adopt the general rules and policies framing regarding bank management
• To appoint the CEO of the bank
• To appoint the chairman of the board and
• To inspect the accounts
Directors Indemnifications
Personal Attributes of Successful Bank Directors

• Sense of discipline
• Tactful
• Patience and tolerance
• Optimistic
• Capacity of adaptation with changing condition or environment
• Sincerity
• Dedicated to the duties and responsibilities
• Capacity of controlling the adverse situation quickly
• Mental balance ..Etc
Responsibilities of the bank directors
• Depositors
• Shareholders
• Central bank
• Tax authority
Government
• Society
Functions of Bank Directors
Functions of Bank
Responsibilities of the bank directors
• Depositors
• Shareholders
• Central bank
• Tax authority
Government
• Society
Functions of Bank Directors

• Determination of the banks goals and objectives


• Formulations of bank policies
• Selection of the bank management
• Determining authority and responsibility of key Executives
• Creating required Committees
• Supervision of the Banks major investment
• Counseling of the key personnel
• Counseling of the prime customers when sought
Liabilities of the Bank Directors
 Risk management of directors Liabilities
1. Avoidance
2. Prevention an control
3. Transfer
Retirements of Directors
 standing committee of the Board of Directors
• Executive Committee
• Loan Committee
• Investment Committee
• Salary and Employee Relations Committee
• Examining Committee and Audit Committee
• Management Evaluation Committee
• Trust Committee
• Discount Committee
• Business Development Committee
Bank Management Guidelines in
Bangladesh
Corporate Governance
 Responsibilities and Authorities of the board of directors
 Responsibilities of the chairman of the board of directors
 Responsibilities of the adviser
 Responsibilities and authorities of the CEO
 Constitution of the Board of Directors
 Constitution of the Board of Directors
 Fit and proper Test
Restriction on Lending to Directors of Private Bank
Audit Committee of Board of Directors
Roles and Responsibilities of the Audit Committee
• Internal Control
• Financial Reporting
• Internal Audit
• External Audit
• Other Responsibilities
• Organization
• Qualifications of the Member
• Meetings
Chief Executive and Advisors
• Moral Integrity
• Experience and Suitability
• Transparency and Financial Integrity

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