Organization Management

3.1 Introduction

3.1.1 Concepts of Bank Management

3.2 Board of directors

3.2.1 Composition of bank board of directors

3.2.2 Qualification and elections of directors

3.2.3 Oath of bank directors

3.2.4 Powers of the directors

3.2.5Directors Indemnifications

3.2.6Personal attributes of successful bank directors

3.2.7 Responsibilities of the bank directors

3.2.8 Functions of bank directors

3.2.9 Liabilities of the bank directors

3.2.10 Retirements of directors

3.2.11 Relationship between board of directors & bank management

3.2.12 Standing Committee of the Board of Directors

3.3 Conclusion

3.1 Introduction:
Every Successful banker has to manage the organization with its other banking activities.
Although a bank is a financial institution, like other business its main objective is to maximize
wealth through earning profit. Bank business is different from other business. Other businesses
can export its goods or services to factory or office or far-away even in foreign countries. But
bank can transfer fund or expand services after fulfilling the demand of loan of its office or
branch area. High-quality service can be offered by efficient management. Efficient
management needs efficient organization management. So, efficient management is impossible
without the clear authority and duties of an organization.
Peter F. Drucker says, “The manager has the task of creating a true whole that is larger than
the sum of its parts, a productive entity that turns out more than the sum of the resources put
into it.”

3.1.1 Concepts of Bank Management:

Bank creates fund through collecting the surplus savings or taking loan from other sources as
deposits or the capital of shareholders. To collect this fund a bank has to bear some collection
cost and other related cost. After deducting the cost of fund and other administrative expenses,
a bank has to make profit by collecting fund and invest the fund to become an efficient and
successful bank. For efficient management a bank needs to select appropriate organizational
structure to do its activities
The process of bank management is described below like a circle:

Plan

Organization
Control

Motivation Coordination

The role of above circle in bank management is discussed below;

Planning:
Bank management process starts with planning. Planning is the activity through which a
business firm charts its future course of action. In bank management planning gives some
answer of questions related to bank or particular branch or particular work division.
The second step of planning is to set the long term and short term objective. Here the adjustment
of long term and short term objective is the main issue.
Some techniques and tools are helpful for planning. Management by objective (MBO) is one
of them. MBO can not help planning automatically. But under an efficient bank manager it acts
as a strong and unique tool.
Organization:
Organization is the extra strength of bank management under planning. After setting the
objective and rules, necessary components are organized to achieve the goal.
Louis A Allen says, “The process of identifying and grouping the work to be performed,
defining and delegating responsibility and authority, and establishing relationship for the
purpose of enabling people to work most efficiently together in accomplishing objectives.”
Earnest Dale says “Organization is the structural process in which individuals interact for
achieving the stated objectives.”
The main objective of organizational activities is to earn expected profit. Other factors of
production can be integrated effectively and efficiently by organization to achieve the expected
goal. If every person of an organization does his/her own duties according to plan, their
combined activities make a company to achieve its goal. If the duty of every person is not
defined properly, the organizational activities become slow. Because if it is unknown that what
to do, it will not be clear how many people will be required and how to organize them to achieve
the goal. So without well-defined goal, organizational activities are impossible. We can
organize the activities of banks according to types. For example – investment, commercial
banking, internal audit, providing loan. The activities of banks can also be organized according
to geographical locations. Organization also identifies different work circle of the bank in
written.
Organization emphasis on group activities. Goal achievement is the duty of a group not the
duty of a single person. Group responsibility can be achieved by total contribution. But to
achieve the goal, a manager enjoys the success and is responsible for the failure. A bank
manager ensures total contribution to make total contribution to achieve the goal.
Organizational activities can be defined by the scale of work description and work completion.
A manager does his/her all the duties to achieve the goal. But he/she will be accountable for
his/her work areas.
Organization concept depends on the concept of labor-segmentation. A person should be given
proper authority within his/her accountable work areas while he/she is assigned for any work
completion. This is called delegation of authority.
Assigned work makes new responsibility to be accountable for the work. Authority does not
increase or decrease the responsibility which was assigned before. So authority can be
delegated but responsibility and accountability can never be delegated.
By delegating authority, there will be observed administrative decentralization. This
decentralization works more when a manager limits the delegated authority by law, rules, moral
responsibility and budget.
The summary is - organization is related to human being. It is created through interpersonal
relationship. Human being nature influences the organization. So all the tools and rules for
developing human capital help a manager to develop an organizational system.
Coordination:
Coordination was ignored in bank management for a long time. Different types of business
activities and different types of growing elegant personality related to business make the
coordination more important in management.
When an organization is divided into different managerial unit and deliver the authority, they
starts to work as autonomous organization. According to the effective planning predefined
general goal help to organize the activities of different group of an organization. But if the
organizational structure becomes complex, it will be very difficult to strongly organize
different groups on the basis of general goal. Every department enjoys some autonomous
facility according to the law. As every department is the part of the bank, relationship building
between the departments is essential for the welfare of the bank.
Every bank manager is basically a coordinator. He/she plays an important role by directing and
helping. As a coordinator he/she coordinate his/her subordinates in the group with other groups
of the bank or other groups outside the bank.
Coordination means work together. In this case personal talent and skill may not be growing
up. Because group skill is the maximum considerable issue in coordination. But should also
keep in mind that some freedom is essential for creativity. So in right time right decision should
be taken for coordination.
When a bank manager is assigned with mid-level or lower-level management, he may find it
difficult to make a relation with his/her department to different works. But a manager should
motivate his people to coordinate with that work.
General people may not realize banking activities. A manager should fulfill this psychological
gap.
In case of coordination, different types of tools are used. Communication is one of them. In
case of communication honesty is necessary. Flow of information will be effective if a manager
is honest to provide training to his/her subordinate.
Employee and work-schedule coordination ability is the pre-requisite of a successful manager.
A successful manger adjusts the personal goal of the employees and the organizational goals
to coordinate all with the organization and also give proper direction.
Motivation:
Motivation is the most discussing issue in bank management. It is the key of employee work
efficiency. Group activities and satisfaction depend on it.
Basically human being is the source his/her motivation. A bank manager can help to be self-
motivated.
A bank manager should be concerned about the high ambition of human being. Work
satisfaction is the pre-requisite of success. On the other hand, work success can influences work
satisfaction. Every efficient manager has to find out some way so that employees can asses
their success. There are different ways of self-assessment; for example –
 • Evaluation
• Appraisal
• Performance review
• Merit rating
Each of these has two basic procedures:
a. Evaluation for quality improvement
b. Evaluation to remove weaknesses

In every organization, there should be systems which will help the employees to judge himself
or herself logically.
A manager has to use the assessment tools properly. Besides, determining the evaluation
criteria, banks should ensure positive evaluation system to establish efficient management. If
the assessment is helpful to overcome the weak side of the employees, they will be motivated
towards work.
Prize, honorary and remuneration are three tools of motivation. But they are not directly related
to motivation. But incase of giving credit to self-motivated manager a good reward system is
necessary to motivate managers.
Most of the people want success in the professional life. So an efficient manager gives freedom
to subordinates to reach better position. Because they know that the high skilled employees
will take another job to reach better position. In this way, managers try to improve the work
efficiency of the employees by giving freedom to reach better position some where else.

3.2 Board of directors

When there is successful management in the bank, all the interest group of the bank i,e, share
holders depositors debtors, government and bank regulation authority remain satisfied.
All management should have suitable and efficient board of directors. Board of directors, as an
agent of the shareholders monitors the functions of the bank whether it performs efficiently or
not and solves all the problems. Boards of directors are elected in annual general meeting, held
after a time interval.
The representatives who are elected to direct the bank are called board of directors all together.
Al the power and authority to direct the bank are assigned on them. They apply their power
and authority collectively. Boards of directors are the supreme authority of the bank. The
shareholders approve the principles and planning meeting in annual general meeting, special
and extra meeting.
The directors of the bank perform all the activities perfectly for a new and small bank. But for
a large scale bank they cannot involve directly in all matters. In this case an executive president
or managing director becomes responsible on behalf of the board of directors. He applies all
the methods and principles assigned by the board of directors. He assigned some duties and
responsibility on the head of the department to ease his responsibility. The functions of the
bank are performed in this way.
3.2.1 Composition of bank board of directors:
To run the banking activities effectively efficient board of directors are required. There are
different ways to appoint director, for example
1. Appointment by promoters or sponsors
2. Appointment by shareholders
3. Appointment by board of directors (Co-opted directors)
4. Appointment by the third party
5. Appointment by the government

The number of members in the board to form a bank is not confined and restricted. The shape,
size and the efficiency of the promoter is expressed by the size of the board of directors.
However, the directors of the bank may be in two types- full time and part time. The part time
directors participate the pre determined meeting at a specific agenda. On the other hand, though
the full time directors are not the paid employee or officer, he/she performs the special
responsibility for the sake of the bank. He gets honorary, house rent, meeting fee for this
purpose.
A director cannot hold this position over the specific number of firms in some countries.
However, in case of appointing the directors of national bank, government influence is much
more. Sometimes specialized persons from inside or outside the bank may be appointed. The
central bank defines the maximum and minimum number of the directors. In USA this number
is maximum 25 and minimum 5.
 Organizational structure of a commercial bank

Chairman

Managing director Audit & inspection

Executive council Secretary

Deputy managing director

General Manager General Manager General Manager

(Accounting) (Operation) (Planning & research)

DGM DGM DGM DGM DGM DGM DGM

Assistant General Manager Assistant General Manager

Senior Principal Officer Senior Principal Officer

Principal Officer Principal Officer

Senior Officer Senior Officer

Officer Officer

Junior Officer Junior Officer

Assistant Officer Assistant Officer

3.2.2 Qualification and election of directors:
Generally first director of the bank is self elected as the name of them are stated in the
Memorandum and article of association. If there is no name of the director in the article of
association, the signer of the memorandum will be considered as the first director of the firm.
They remain as the director up to the first annual general meeting. Afterwards the shareholders
of the bank appoint the directors through election in the annual general meeting. The person
capable to perform contract can become the director of the bank as the post are to be taken by
written agreement. Any person having sound mind and ability to pay debt can be the director
by purchasing the qualifying shares. Qualifying shares are to be taken at the time of election or
within a specified time period after the election otherwise he/she will be disqualified.

3.2.3 Oath of bank directors

The government of any country ensure safety environment for the depositors as the bank take
deposit from a large number of people. One of the measures is that the directors of the national
commercial banks promise to obey their duties with honesty, integrity and efficiency at the
time of taking the oath. Taking oath of the directors is not under the state law rather it is under
the constitution of the bankers associations.
American Comptroller of currency publishes the booklet on the duties and responsibilities of
the nationalized commercial banks. The oath written in the following are to take by the directors
at the time of taking responsibilities.
“I the undersigned, director of [bank] located [address] being a citizen of the United states,
and resident of the state of [insert], so Solemnly [affirm] that I will ,go for as the duty
develops on me , diligently and honestly administer the affairs of said association. That
I will not knowingly violate , or willingly Fermat to be violated any of the status of
the united states under which this association has been organized and that I am the owner
, in good faith and own right of the number of shares of stocks of the aggregate per value
required by said status, subscribed by me as standing in my name on the books of the said
associations; and that the same is not hypothetic or in any way pleased as securities for any
loan or debt.”

3.2.4 Powers of the directors

Powers of the directors depends on the size and width of the bank. If the size of the bank is
small the directors will scrutinize all the investment of the bank and solve it smoothly. If the
size of the bank is large scale the directors will suggest the final decision and work accordingly.
At the same time they will delegate the authority to the different committee and the executives
so that they can take the ultimate decision by their own.
They cannot delegate the authority of supervise the bank. The responsibility of the directors
confined by the article of the association is not transferable. The article of association describes
the limit of the power of the directors and so this power is considered as legal.
Some special powers of the directors are stated below:
1. To call the share capital from the share holder.
2. To invest the bank fund.
3. To adopt the general rules regarding bank management
4. To appoint one or more directors in case of immature death, resignation or discharge of
the director
5. to appoint the main executive
6. To appoint the president of the directors
7. To visit the accounts.

3.2.5 Directors Indemnifications:

Directors can accept the money, which is expended for the bank by them or accrued expenses
for them if it is mentioned in the article. Where it is not mentioned in the article, then these
types of expenses or other expenses whose are receivable by them can be received in the annual
shareholder’s meeting subject to approval.
Moreover, directors have the right to receive the expenses from banks which are incurred
during their period as directors for suit purpose, by making promise to give advance voucher.
But this rule is not applicable when the directors suffered personally for huge negligence or
intentional criminal acts at the time of performing their responsibilities as directors.

3.2.6 Personal attributes of successful bank directors:

Bank makes its business by creating a link between depositors & users of fund on the basis of
believe. Directors and bank stands on the indispensable goodwill. Personally renowned
directors increase the goodwill of the bank directed by them. On the other hand, it is also not
astounding of increase the goodwill of the individuals after fetching the directors of a well
renowned bank. Because of being a public service institution, the honesty, efficiency and
reliability and overall, the high morality character of the directors is very precious asset for a
bank.
The individual qualities those should be possessed by directors of ideal bank are as follows-
1. Successful bank directors must be progressive and should have advance thinking. In a
word, progressive directors would keep the preceding thinking for the sake of time and
for this he would take advance decision.
2. A successful director must be well-known and respectable person in the society.
3. Successful directors are aware about the preference or non-preference that is the
demand or taste of the society and its inner people.
4. Successful directors must have the capacity of expanding the scope of bank service by
inventing new and new bank service.
5. Bank directors must take initiative by realizing the monetary and fiscal policy and
overall change of the activity procedure by thinking the reaction of the clients.
6. Successful directors must have the knowledge of national and international political,
economical and social change besides the knowledge of scope of activities of bank.
Besides these attributes, bank directors must have the following additional qualities if they

want to be successful-

I. Sense of discipline
II. Tactful
III. Patience and tolerance
IV. Optimistic
V. Capacity of adaptation with changing condition or environment.
VI. Sincerity
VII. Awareness about duties and responsibilities
VIII. Capacity of controlling the situation quickly
IX. Mental balance
X. Attitude and personality of justice
XI. Firm notion toward accomplishment of task by following law and rule.
XII. Capacity of giving lead to the staffs of the bank.
XIII. Capacity of keeping good relation with the official.

3.2.7 Responsibilities of the bank directors

The boards of directors are responsible for ultimate success and failure of bank. Directors are
elected and appointed for achieving the right service or claim of shareholder, depositors and
other stakeholders. Bank directors sometimes take decision for keeping bank interest and
before its implementation, keeping secrecy of this objective is also a moral obligation of the
directors. Besides banking activities, directors also sometimes busy with other business or
social works. With all of these, there is no scope of viewing their appointment faintly. In spite
of many businesses, directors should participate actively on the board meetings those are being
called for the stipulation of the bank. Although getting social status, self- satisfaction,
allowance or honoree are satisfactory for the directors, they cannot avoid the responsibilities
of loss to clients and banks incurred due to the negligence of the duty of them. Although
diminutive in number, some directors were held liable by criminal case in home or abroad for
incurring losses to the bank or bank related stakeholders due to the carelessness, negligence
made intentionally or unintentionally.
Generally directors should look after the right & dues of the following persons-
1. Depositors
2. Shareholders
3. Central bank
4. Tax authority
5. Government
6. Society
Responsibilities of directors to the related stakeholders are described below:
1. Depositors:
Depositors supply the major portion of bank capital. There is possibility of transferring their
deposit to another bank if they are displeased. So keeping the interest of depositors and
expanding their accrued service appropriately is the responsibility of the directors.
The ways by which better-quality service can be expanded are as follows-
✓ Giving security of the deposited money.
✓ Ensure getting money immediately after giving cheque for withdrawal.
✓ Giving better service in counter.
✓ Appoint efficient and service oriented staffs and employees.

2. Shareholders:
Directors are the agents of the shareholders. They are elected on the basis of promise for
keeping the interest of the shareholders in the annual general meeting. It is expected that
directors will keep sight on the following matters on behalf of the shareholders-
✓ Keep sight so that shareholders also get their dividend like other owners
✓ Develop innovative ideas so that goodwill of bank increase
✓ Giving successful lead on behalf of shareholders within the bank and with the related
parties.
✓ Implementing such kind of project so that bank staffs can sell service profitably.
✓ Making plan on the basis of future profit thinking

3. Central bank:
Central bank is the guardian and leader of the banks of a country. The government of a country
controls the banking system especially commercial banks for keeping public interest with the
help of central bank. The expectation of central bank from the bank directors is as follows:
✓ Operate banking activities by following the guidelines of banking law and overall
the constitution of the country.
✓ Submittal reports of central bank on specific matters at a specific maturity such as:
appropriately preparation and submission of weekly statement, monthly statement,
quarterly statement and semi-annual statement on due date
✓ Implementation of the advised steps faithfully and sincerely provided by the
inspection team of the central bank after examining the activities of bank for making
correction of the errors.
✓ Accept the punitive actions taken for repetitive negligence of instructions.

4. Tax authority:
For implementing the traditional fiscal policies, supporting the tax authority is the sense of duty
of bank. According to the fiscal law, on which inflow of fund, profit tax is payable, it is the
moral duty of the directors to help the tax staffs spontaneously. Sometimes, bank can help the
fiscal authority to collect the source tax from the clients.
Time to time, those clients who paid tax, have to prepare tax statement for submitting to the
tax authority. For verification of the accuracy of those data, bank can help the tax authority by
supplying the confidential information.
5. Government:
Banks act as an important tool for the economic activities of the country. For implementation
of the long term goal or overall plan of the country, directors of the banks can actively help the
government by increasing or reducing the loan supply. For example, for export generating and
income-generating activities for financial development of the backdated group, production of
food grains or production of exported oriented food grains; bank directors should help the
government actively by keeping balance of the loan program.
6. Society:
Bank is a created individual by law and it is being treated as a member of the society.
The responsibility of directors is to participate in the social activities on demand of the society
without hampering its own business. Including America, in west, “Business ethics social
responsibilities” has been developed as a result of the movement of the consumers. As bank is
a business organization so bank directors must be aware about sacrificing of policy and not
involved with the responsibility less activity towards the society. It is not right to help everyone
in economic activities by providing loan. It is not desirable to help the businessman and the
enemy of the country by providing loan to legal acts whose are engaged in economic activities
against the law and constitution of the country: smuggling, drugs and unsocial activities and it
is absurd in the sense of business rule and responsibility to the society.
Bank directors would lead on the bank activities profitably without ignoring the legal
expectation of the stakeholders. Otherwise, they will be treated as duty negligent.

3.2.8 Functions of bank directors:

Director of banks perform many functions against bank. Directors of banks are concerned
following activities:
1. Determination of the banks, goals and objectives: The most important functions of the
board of direct6ors of bank is to set down the goal of the bank business
2. Formulations of bank policies: Once the goal has been established the board has to lay
down such specific policies as are conducive to the attainment of the goal.
3. selection of the bank management : the selection of capable executives requires a
careful considerations
4. Determining authority and responsibility of key executives: The appointment of the top
corporate executives is accompanied by delegation of important decision.
5. Creating required committees: In addition to selecting the officers, the board of
directors creates standing committees and elect the members.
6. Supervision of the bank relatively bigger loans
7. Supervision of banks major investment
8. Counseling the key personnel
9. Counseling the prime customers when sought.
10. Business development
 11. Review of bank operation
12. Evaluating performance of bank executives and officers in the light of their job
descriptions and expected standard of the banks
13. Recommendations of dividends to be distributed to shareholders
14. To sign contracts on behalf of the bank
15. Maintaining books of record and accounts
16. Issuing shares and distributing the same among the shareholders

3.2.9 Liabilities of the bank directors:

According to Sherermen Hzeltine “It has been established that the directors is liable not only
wrongs but also for negligence”
Criminal liabilities:
Criminal liabilities are the violations for which directors, officers, agents or employees of a
bank may be prosecuted. These include the followings:
1. False entries, false report
2. False certificate of equities
3. Theft, embezzlement misapplication by bank officers or employee
4. False representation as to insurance coverage
5. Violation of prohibition loans to directors
6. Violation of prohibition of trust funds to directors
7. Violation of prohibition of directors receiving fees for procuring loans
8. violation of prohibition of political contribution and expenditure
9. Violation of prohibition of participation by financial institution in lotteries

Common law for liabilities for negligence

Failure to exercise ordinary care and prudence in the administration of the attains of the bank.
When directors take decision by ordinary care intelligence and the client of bank incur loans
then directors are not liable. In this case directors must be proved in the court that they take
decision by care but bank incur loss. If borrower is unable to pay the loan amount the director
is not liable. But when it is proved that the loan amount doesn’t received by directors act then
he is liable. If directors don’t present the board meeting and the wrong decision then directors
is liable
Risk management of directors’ Liabilities:
There are three methods of handling the liability risk that the directors usually face from time
to time. These are
1. Avoidance
2. Prevention and control
3. Transfer
3.2.10 Retirements of directors
Directors of board and financial institution have great responsibility than other business
organization. So there are selected directors who are capable and experienced person. Then
they take challenging decision. Directors will be retired when his age is 65.

3.2.11 Relationship between board of directors and bank management

Shareholders are the owner of a bank but they don’t directly related to bank activities. Board
of directors act these activities shareholders command directors but indirectly they don’t do the
activities of bank. Banks internal and external communication, motivating employees,
employee’s mentality these are looked by directors. Training, promotion and transfer are
created in a right way. This is the responsibility of directors.
Board of directors makes policies and transfer to the management to execute. The flow of this
is shown in flowchart:

Shareholders of the bank

Board of directors Chairman of the directors

Managing directors

Bank management

So management board of directors is different but one is related to other. If right person is
rewarded for his activities the management achieves the targeted goal.

3.2.12 Standing Committees of the Board of Directors

The board of directors usually directly participates in the bank management through the section
as well as appointment of the high officials of a bank. But, this body usually takes part in the
bank management indirectly through the standing committee.
The directors are usually very busy with their other business and that’s why they can not
allocate time for the bank every now and then. But, in the bank management it is expected that
the wise businessmen like the directors should concentrate in the daily banking business which
is really impossible for the directors. Since this is impossible for the directors it is essential for
the regular bank management to initiate a new body, Standing Committee by name. It would
be wiser to take a decision from a group of heads instead of a single one.
In the banking business, every now and then, we need to carry on a lot of assignments. But,
who would initiate the jobs? The answer, of course, would go for the democracy. Any single
high official does not have any power to initiate any job. It should be some group of high
officials. These committees are known as Standing Committees. Some committees in the
banking business are occasionally formed due to initiate a particular job. But the existence of
these bodies usually expires after the completion of that particular assignment. The Standing
Committees are not like the Occasional Committees that we stated earlier. These bodies
basically are initiating the regular businesses of the bank. That’s why these are not ever been
abolished.
Members of the Committee:
There is no hard and fast rule in the banking industry regarding the number of the member of
the Standing Committees. The boards of the directors usually decide the number as well as the
member of the Standing committees. It is not expected that each and every committee would
contain the same number. In some cases some external are invited as an expert in the Standing
Committee.
Types of Standing Committees:
1. Executive Committee
2. Loan Committee
3. Investment Committee
4. Salary and Employee Relations Committee
5. Examining Committee and Audit Committee
6. Management Evaluation Committee
7. Trust Committee
8. Discount Committee
9. Business Development Committee

1. Executive Committee
The By Laws of the company empower this committee. The EC usually takes any decision on
behalf of the board of directors. Before any meeting of the board of directors, the EC usually
take decision. The decisions of the EC should get approved from the next meeting of the board
of the directors. It should be clearly mentioned that the EC does not have any power to declare
the dividends, to change the By Laws of the Company, or to change any rules of the bank
management.
2. Loan Committee
This committee is given the permission to consider some loan applications up to a certain limit.
But, it should be clearly disclosed here that this body must not violate the loan policy of that
particular bank. A loan application above the five lacs, for example, could be sanctioned by the
Loan Committee but need the approval of the next board of directors’ meeting. But, any
application above one crore must refer to the meeting of the board of directors. The Loan
Committee does not have any power to sanction the application.
3. Investment Committee:
This committee usually considers the Investment proposal to the banks. But, it must comply
the Investment Policy of the Bank. The maturity of the investment portfolio, measurement of
the investment is basically decided by this committee. What is decided in the Investment
committee is final. It need to forward to the board of directors’ meeting.
4. Salary and Employee Relations Committee:
In the competitive market economy, the competition is really very high. The Financial
Institutions including Banking Industry are to face a serous competition. For that why, the
institutions must appoint highly skilled, potential as well as experienced officials. This
committee appoints these sorts of highly skilled officials in order to compete in the economy.
This body usually prepares a pay scale for the bank employees so that it could attract the
existing employees in this industry.
5. Examining and Audit Committee:
This committee is basically liable for the inspection as well as audit of the finical transaction
of the bank. The committee usually examines whether the bank management is following the
accounting as well as auditing standards of the bank. Even this committee is responsible for
the examination of the financial transactions of any particular branch. If the bank management
is not sufficient enough to provide expert in this committee, the committee, however, could
include more members from the external sources. Though this inspection is a responsibility of
an external auditor the bank could easily initiate to recheck the finical transactions of the daily
banking business in order to boost the banking activities. The jobs of this committee, no doubt,
enhance the image of the bank.
6. Management Evaluation Committee:
Either the bank itself or any appointed management consultancy firm can evaluate the
management policy of the bank, MIS, Credit Management or other issues related to the bank
management.
7. Trust Committee:
This committee usually inspects or checks the financial transactions of different investment
portfolios and measure the income source from that particular investment. This body usually
forwards to the board of directors those sorts of investments that yield higher but incur more
risk.
8. Discount Committee:
One of the busiest committees of the commercial banks is the Discount Committee. This body
basically implements the following jobs like determining interest rate, designing the deposits
and the investment figure and increase or decrease of any Credit.
9. Business Development Committee:
These committees could be two types in nature. Firstly, one team that would innovate newer
Financial Products or Services and secondly, another would increase or build awareness among
the customers. Whatever the committee decides the management would initiate the decision
in order to boom the banking business.
3.3 Conclusion:
In order to boom the banking business, the bank management should efficient as well as skill.
They need to adopt the latest developments in the field of banking business. If any a bank
would like to survive in this industry especially in this open market economy, it must
modernize its organizational management. The sound as well as skill directors including an
efficient CEO must help the bank to boom in the economy.