24th Annual General Meeting 08 July 2020

Partial view of the Hon’ble Shareholders and Members of the Board of Directors at 24th AGM held through digital platform. NOTICE OF THE 25th ANNUAL GENERAL MEETING Notice is hereby given that the 25th Annual General Meeting (AGM) of the Hon’ble Members of Dutch-Bangla Bank Limited (the Bank / the Company) will be held on Monday, April 26, 2021 at 10.00 A.M. The AGM will be held virtually by using digital platform through the following link http://tinyurl.com/dbblagm2021 to transact the following businesses:

dutchbanglabank.com on or by 4 P.M., April 21, 2021. The maximum Agenda length of the video / audio recording be 2 (two) minutes. 01. To receive, consider and adopt the Audited vi. The detailed procedures to participate in the virtual meeting and Financial Statements of the Company with Frequently Asked Questions (FAQs) have been provided in the Auditors’ Report thereon and the Directors’ Report Annual Report and published on the Investor Relations’ Section of for the year ended December 31, 2020. the Company’s website at: www.dutchbanglabank.com vii. We encourage the Members to login to the system prior to 10:00 02. To declare dividend for the year 2020. A.M. (Dhaka time) on 26.04.2021. Please allow ample time to login 03. To elect Directors. and establish your connectivity. The webcast will start at 10:00 A.M. (Dhaka Time). Please contact +880 9666322050 (Ext. 750999), 04. To appoint the Auditors for the year 2021 and fix +880 9612322050 (Ext. 750999) for any technical difficulties in their remuneration. accessing the virtual meeting. viii. The dividend will be paid through BEFTN or any other mode as may 05. To appoint the Compliance Auditors for the year be deemed appropriate by the Company as per directive of BSEC. 2021 for Compliance Certification on Corporate ix. A Member eligible to attend and vote at the Annual General Governmence Code and fix their remuneration. Meeting may appoint a proxy to attend and vote on his / her behalf. By order of the Board The “Proxy Form”, duly filled, signed and stamped with Taka 20.00 must be sent / submitted to the Registered Office of the Company or through e-mail at [email protected] no later than 72 hours before the time fixed for the Annual General Meeting. x. The election of Directors of the Company will be dealt with as per Mohammed Mesbahul Alam rules and regulations in force. Company Secretary xi. The existing Statutory Auditors, M/s. Hoda Vasi Chowdhury & Co. Dated: Dhaka, April 05, 2021 will retire and as per rule, they are eligible for re-appointment. xii. The existing Compliance Auditors, M/s. A.Qasem & Co. will retire NOTES and as per rule, they are eligible for re-appointment. xiii. As per BSEC Notification dated 20 June 2018 Annual Report 2020 i. The ‘Record Date’ for the purpose of attending the meeting and will be duly sent in soft form to the Hon’ble Members' email entitlement to dividend was Sunday, March 28, 2021 addresses available in their Beneficial Owner (BO) accounts ii. The Members’ whose names would appear on the ‘Record Date’ in maintained with the Depository. The soft copy of the Annual the Member / Depository Register of the Company are eligible to Report 2020 will be also available in the Bank’s website (www. attend the meeting and entitled to dividend. dutchbanglabank.com). iii. The AGM will be a virtual meeting of the Members, which will be conducted via live webcast by using digital platform. xiv. Depositary Participants (DP) / Stock Brokers are requested to send the list of Margin Account Holders, if any, along with their Bank iv. The Members will be able to submit their questions / comments Account within April 08, 2021 to the Company, otherwise, the electronically 24 hour before commencement of the AGM and during the AGM. For logging into the system, the Members need to dividend will be paid to Hon’ble shareholders bank account whose put their 16-digit Beneficial Owner (BO) ID number / Folio number names appeared in the Member / Depository Register on the and other credentials as proof of their identity by visiting the link ‘Record Date. http://tinyurl.com/dbblagm2021. xv. No gift or benefit in cash or kind shall be paid / offered to v. The Members may also send their comments / queries the Hon’ble Shareholders in the 25th AGM of the Bank as per through voice recording (video / audio) via email to share@ BSEC Circular and listing regulations of Stock Exchanges. Vision Dutch-Bangla Bank dreams of better Bangladesh, where arts and letters, sports and athletics, music and entertainment, science and education, health and hygiene, clean and pollution free environment and above all a society based on morality and ethics make all our lives worth living. DBBL’s essence and ethos rest on a cosmos of creativity and the marvel-magic of a charmed life that abounds with spirit of life and adventures that contributes towards human development.

Mission Dutch-Bangla Bank engineers enterprise and creativity in business and industry with a commitment to social cause. “Profits alone” do not hold a central focus in the Bank’s operation; because “man does not live by bread and butter alone”.

Core objectives Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Taking cue from its pool of esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in banking that upholds and epitomizes its vaunted marques "Your Trusted Partner".

CONTENTS notice of the 25th annual general meeting 6 vision 7 mission 9 core objectives 11 the board and its committees 14 chairman’s foreword 15 from the desk of the Managing Director & CEO 19 stakeholders’ information 23 segments analysis 35 events 37 awards 43 banking automation 49 agreements signed 75 sustainability report 83 corporate governance 101 status of compliance with the conditions imposed by BSEC on corporate governance 107 report of the audit committee of the board 124 declaration by Managing Director & CEO and Chief Financial Officer (CFO) 126 certificate on compliance status of corporate governance code of BSEC 127 risk management 129 disclosures on risk based capital (Basel III) 155 financial inclusion 187 retail banking, school banking, VIP banking & e-business 211 SME finance 229 agricultural credit 237 green banking 249 social cause 257 economy and financial market 293 some of the projects financed by DBBL 311 directors’ report 335 directors’ responsibility for internal control and financial reporting 364 auditors’ report 365 financial statements 375 off-shore banking unit 457 top management of DBBL 469 DBBL branches 470 forward looking statements 479 list of abbreviations 480 proxy form 481

ANNUAL REPORT 2020 13 THE BOARD & ITS COMMITTEES The Board

Chairman Mr. Sayem Ahmed

Directors

Mr. Abedur Rashid Khan : Nominee Director Ms. Tang Yuen Ha, Ada : Nominee Director Mr. Ekramul Haq, FCA : Independent Director Mr. Mohammed Salim, FCMA, CPFA : Independent Director Mr. Abul Kashem Md. Shirin : Ex-officio Director (Managing Director & CEO)

The Committees of the Board

1. Executive Committee

Mr. Abedur Rashid Khan : Chairman Mr. Sayem Ahmed : Member Mr. Abul Kashem Md. Shirin : Member

2. Audit Committee

Mr. Ekramul Haq, FCA : Chairman Mr. Mohammed Salim, FCMA, CPFA : Member Ms. Tang Yuen Ha, Ada : Member

3. Risk Management Committee

Mr. Abedur Rashid Khan : Chairman Mr. Sayem Ahmed : Member Mr. Ekramul Haq, FCA : Member

Founder, Dutch-Bangla Bank & Chairman, Dutch-Bangla Bank Foundation Mr. M. Sahabuddin Ahmed CHAIRMAN’S FOREWORD Bismillahir Rahmanir Rahim virus among the public, it created serious impediments to achieve GDP growth target 8.2% in FY 2020. According to Dear Shareholders provisional estimates of Bangladesh Bureau of Statistics Assalamu Alaikum (BBS), GDP growth registered 5.2% in FY 2020 against GDP The year is momentous to us as it is the birth centenary growth 8.2% in FY 2019. Corona Virus pandemic although of Bangabandhu Sheikh Mujibur Rahman and the golden moderated the growth of all sector of economic activities, jubilee of Bangladesh’s independence. We express the Industry sector grew by 6.5% in FY 2020 far below our eternal gratitude for these two epic events and from 12.7% in FY 2019, Agriculture sector grew by 3.1% in Dutch-Bangla Bank Ltd is a proud partner of observing FY 2020 slightly decreased from 3.9% in FY 2019, Service these two milestones of history. These two events sector registered a modest growth of 5.3% in FY 2020 herald a brighter future for the millions of this nation. against 6.8% in FY 2019. Sector wise growth rate of GDP Dutch-Bangla Bank Ltd pays homage to the father of the shows that the Industry sector continued to achieve the nation, Bangabandhu Sheikh Mujibur Rahman, on his birth highest growth followed by Service and Agriculture sector. centenary and promotes his invaluable contribution and This reflects the sustainability of growth of the economy. selfless struggle for the masses against oppression and The Sectoral decomposition of the Share of GDP shows tyranny for the independence of Bangladesh. We also pay that the Service sector continued to achieve the largest respect to the freedom fighters who fought relentlessly to share of GDP (51.3%) followed by the Industry (35.4%) and free the country under the leadership of the fearless leader Agriculture (13.3%) sector. This is a positive sign for the Bangabandhu Sheikh Mujibur Rahman. The golden jubilee country and banking prospects, as growth in Services and of our independence is a watershed event in the history of Industry sectors are gauged as very strong indicators for our country and worldwide as well. We salute the bravery economic potential. and heroism of Bangabandhu Sheikh Mujibur Rahman. Bangladesh Bank’s monetary and financial policies In every way, Bangabandhu Sheikh Mujibur Rahman’s life prioritized the Government’s inclusive and sustainable and achievements continues to inspire us, our bank and growth agenda by fostering price and financial stability in our country. FY 2020. During the period, monetary program aimed at In the midst of present unprecedented times, I, on behalf ensuring adequate flow of quality credit to support the of Board of DUTCH-BANGLA BANK LIMITED, welcome our job friendly economic growth and inflation targets, while valued shareholders at the 25th Annual General Meeting promoting domestic and external financial stability. Some of the Bank. I would like to express my sincere gratitude major policy initiatives adequate liquidity supply for the to all of you for your active support and cooperation with implementation of Government’s stimulus package aimed which it has been possible for us to take our Bank to at combating the economic downwards trend for the present prestigious place. It is your kind patronage and corona virus pandemic. relentless support that have always resulted in achieving The twelve-month point to point general inflation thriving growth for the Bank. increased to 6% in June 2020 amid fluctuation from 5.5% In its 25 years of existence, Dutch-Bangla Bank Ltd. has in June 2019, driven by the increase in food inflation, epitomized the banking landscape of Bangladesh with emanated mostly from uncertainty due to the Covid-19 its innovation, integrity and inclusive Banking & Financial pandemic. The average inflation rate has been set at Services. The Bank continues to grow with the values that 5.4% for FY 2021 after considering adequate domestic were established since its founding for a bigger and better food grains production along with fall in international future of the country. commodity and fuel prices is expected to have favourable impact on inflation situation. It is also anticipated that Business Environment inflation will be lower as infrastructure development is 2021 ushers in with a lot of expectations against all the growing and domestic revenue mobilization remains a odds in 2020 due to impacts of COVID-19 which engulfed priority. Indicator points to a very prosperous 2021 with our economy and social lives in every possible way. the target achieve the middle-income country status by However, the economy has been growing its precise path 2024 and get double digit GDP by 2025. and accelerating GDP growth supported by broad-based Global Growth to Slow in 2021 economic activities until February 2020. But it halt due to COVID-19 outbreak in Bangladesh from March 2020, Global economic growth decelerated in 2020 compared the Government announced a national general holiday to that of 2019 due mainly to weak demand and trade from March 26 to May 30 to control spread out of corona disputes. The outbreak of COVID-19 pandemic and its massive adverse effects have pushed the global economic

ANNUAL REPORT 2020 15 growth into negative zone in 2020. Governments have conditions will reduce interest cost to offset some of the imposed widespread closures, lock-down, isolation and loss in interest yield and interest margin. restrictions of movements of domestic and international Bank’s performance in 2020 transports in order to contain the spread of the corona virus. As a result, the COVID-19 pandemic has triggered DBBL has done well with all the odds in 2020. Our net the deepest global recession since World War II and global profit after tax growth increased by 26.7% in 2020 economic activities are protected to contract sharply by despite of negative growth in operating profit. Deposit 4.4% in 2020. However, growth is anticipated to pick up growth was 20.0% whereas credit growth was lower than to 5.2% in 2021 subject to effective implementation of deposits with 6.7%. Import businesses declined by 10.9% monetary and fiscal stimulus packages, restoration of and export businesses by 23.0%. normal economic activities and fading of the pandemic. In Our strategic investments in IT infrastructure, branch, the advanced economies, growth declined to 1.7% in 2019 ATM network, mobile banking, agent banking, from 2.2 % in 2018 and it is projected to decline to -5.8% e-commerce and human capital continued in 2020. DBBL in 2020 and increase to 3.9% in 2021. In emerging market has been consciously making these strategically important and developing economies, growth is forecasted to decline investments to provide much better customer service to -3.3% in 2020 and then pick up to 6.0% in 2021. with a wide range of products that will definitely bring Risks to the Outlook long-term stable growth and a more inclusive banking for all of Bangladesh with the pace of previous years. Dutch-Bangla Bank’s main goal, regardless of any business environment, is for a safe and steady growth. Profit after tax Because our conservative banking practices, the Bank was In 2020, profit before tax increased by 29.9% and stood largely immune to many large-scale frauds and loopholes at Taka 9,660.8 million compared to Taka 7,436.3 million in the banking system. But the Bank did take the national in 2019. Profit after tax increased by 26.7% and stood at banking issues to make our internal controls stronger, Taka 5,498.7 million compared to Taka 4,341.4 million in safer and fool-proof. Internal fraud and systematic risks 2019. The return on equity was 18.4% compared to 17.2% are also a top priority for the Bank to solve. in 2019. During the year under review, earnings per share The Bank has adopted new technologies and guidelines attributable to shareholders amounted to Taka 10.0 that make every part of the Bank more transparent to the compared to Taka 7.9 (restated, originally 8.7) during the central management. It has cut down the processes that previous year. used to take hours, will now take a few minutes. The Bank Asset quality and Capital adequacy has introduced new divisions that are equipped to handle tasks faster in a transparent manner. No loans have been degraded during 2020 due to Bangladesh Bank bar but recovery, reschedule and The Bank has introduced a secondary Tier-4 data center written-off of some loan contracts has reduces the NPL which will make banking with DBBL even safer. This will in 2020. Classified loan as a percentage of total loan increase the uptime and security that no other institution portfolios decreased to 2.2% at the end of 2020. At the can match. end of 2020, total equity stood at Taka 32,256.7 million Impact of Global Corona Virus as compared to Taka 27,443.3 million in 2019. Under Basel III, Tier 1 capital stood at Taka 29,682.5 million as on 31 Corona virus pandemic, originated in China, has been December 2020 as compared to Taka 24,636.0 million in impacting lives, businesses and economies around the 2019. The supplementary capital (Tier 2 capital) stood world. First corona virus infection has been identified in at Taka 16,401.4 million at the end of December 2020 Bangladesh on 8th March, 2020. It is likely to adversely compared to Taka 12,556.8 million at the end of 2019. impact the domestic and global economy that in turn Total regulatory capital stood at Taka 46,083.9 million at may adversely impact the financial position and results of the end of 2020 with, an increase of Taka 8,891.1 million the Bank in 2021 like 2020, the amount of which cannot from previous year. As of 31 December 2020, Capital to be predicted with any degree of certainty at this point risk-weighted asset ratio (CRAR) under Basel III stood of time. But there is a positive expectation that Covid 17.2% (Tier 1 capital 11.1% and Tier 2 capital 6.1%) against Pandemic situation will be under controlled through the Bangladesh Bank minimum requirement of 12.5%. vaccination to masses people of the world. Like-wise, Bangladesh may bring under control the Covid-19 As you know, Basel III has been introduced by Bangladesh impact with the present running vaccination which will Bank from 01 January 2015. It was fully implemented generalized the economic situation but it will take time. over five years from 2015 to 2019. More emphasis has been put on Tier 1 capital in Basel III than Basel II. The Impact of lending interest rate cap at 9.00% Tier –I capital requirement has been increased from 5.5% The lending interest rate cap at 9.00% since April 2020 to 8.5% against Capital to Risk-weighted Asset Ratio & competition with peer banks and ongoing liquidity (CRAR) including 2.5% Capital Conservation Buffer (CCB) surplus leading to reduction of lending interest rates in against Basel II while Tier -2 capital requirement has the market will reduce interest yield and interest margin. been reduced from 5.0% to 4.0% only with provision for However, the Bank to compete within prevailing market phasing out some weaker elements of capital. In addition liquidity risk management has been emphasized in & infrastructure. New personnel were recruited in 2020 Basel III and Liquidity Coverage Ratio (LCR), Net Stable to strengthen HR to support the business growth and Funding Ratio (NSFR) and Leverage Ratio (LR) have expansion of network and to provide personalized services been introduced for more efficient liquidity & liquidity to our customers. risk management and developing a more resilient and All the branches are being remodeled to allow better stable banking sector in the long term. DBBL was able to access and shorter wait-times for customers. Dutch- maintain 17.2% CRAR including CCB as of 31 December Bangla Bank deals with a very large customer base and 2020 against minimum capital requirement including CCB it is important to the Bank that all delivery channels are of 12.5% by Bangladesh Bank. updated to allow more efficient and faster access to our Corporate Governance client base. Good corporate governance system is imperative for DBBL always cares for the security of customer assets. efficient and effective business operation, long-term We have expanded our banking IT security by establishing stability, and sustainable growth for any organization. 4 generation server of the country. In addition to existing The corporate governance system in DBBL is designed Hot-DR, we have established the 4 Generation state of to ensure transparency and accountability at all levels the art IT server. It is the only 4-Generation server of the of doing business. It also ensures that duties and country which is established by DBBL. responsibilities are appropriately segregated between the Board and management to provide sufficient Mobile Banking and Agent Banking checks and balances and flexibility for smooth business Dutch-Bangla Bank continues to make advancements in operations. The Board provides leadership and direction Mobile Banking. More importantly, the Bank takes a fully for the management, approves strategic and major KYC compliant mobile banking stance. Because of this policy decisions and oversees management to attain strict adherence to banking principles and rules, there has predetermined goals and objectives of the Bank. Integrity been no extortion, fraud, robberies or killings using our and compliance throughout DBBL are strongly encouraged mobile banking system. by the Board. Mobile Banking is by no means profitable and does The Board also ensures that adequate internal control not seem to be profitable even in the foreseeable long systems are in place and these are consistently complied term. But the Bank sees this as obligation, to bring the with and reviewed to provide reasonable assurance that whole country under financial inclusion. The Bank does financial records are reliable for preparation of financial not have any plans to exit this sector because offering statements. The Board further ensures that quality of Mobile Banking for the unbanked and rural population of financial reporting is maintained, assets of the Bank are Bangladesh is an undertaking that we conduct regardless safeguarded against unauthorized use or disposition and of financial viability. accountability for assets and business transactions is In order to reinforce our commitment to marginal people maintained. mainly those unbanked masses living mostly in rural This year a more pro-active centralization will take place areas, we introduced Agent Banking operation in 2015, where we will move more services together. Management which will be further expanded in coming years using will have greater oversight into all the activities of the latest technology to fulfill the ever growing demand of bank with these steps. customers in a cost-effective manner. Now, we have the In Compliance with regulations framed by Bangladesh longest network of Agent Banking in the country. Securities and Exchange Commission (BSEC) and ATM Services Bangladesh Bank and to further strengthen our corporate governance system, two Independent Directors have been Dutch-Bangla Bank gives free & 24/7 transactions to its included in the Board. customers. The charges for other banks are insignificant as determined by Bangladesh Bank. The Bank is Expansion of delivery channels effectively subsidizing all over Bangladesh with this DBBL have continued expansion of its delivery channels. service. The Bank opened 13 new branches, which, at the end of The Bank approached ATM services as a component of 2020 stood at 208 compared to the 195 of the previous the Social Cause program, where the intrinsic value of year. 25 ATMs were installed in 2020 to reach 4,862 the system would outweigh the financial costs. We have ATMs at the end of 2020 and 90 new Fast Tracks were enabled cash withdrawals and constant access to banking inaugurated in 2020 to reach 1,190 Fast Tracks. Mobile services all over Bangladesh. banking services were expanded to every customer across the country, providing instant banking services. We have The ATM services are a universal service which enables opened 4,414 Agent banking outlets up to 2020 and have financial access. a target to reach at 6,014 by 2021. Focus and Strategy This expansion of services was possible by increased During the year under review, our focus and strategy investment and up gradation of online banking software was concentrated on sustainable long-term growth of

ANNUAL REPORT 2020 17 business, better deposit mix, improving the quality of most people in Bangladesh. For the Bank, eliminating or assets, rationalizing operating cost, improving operational at least alleviating healthcare issues allow people and the efficiency and productivity of resources, better and faster society to which they belong, to reach their full potential. customer service, expansion of branches and ATM & Fast We strongly believe that these kinds of social and Track network, mobile banking services, offering a number philanthropic activities would ultimately improve the of new products in retail banking, SME financing, card quality of lives of the disadvantaged people of the country services, NexusPay and e-commerce and strengthening the by receiving support for education, healthcare facilities, overall risk management and corporate governance system. financial package and assistance whenever there is a Growth requires vision and long-term targets. Bangladesh natural disaster. is still one of the fastest growing economies in the world. Largest Scholarship Program continued in 2020 This also means that the bank’s strategy of prioritizing investments over profits will yield greater returns in this You will be pleased to know that DBBL introduced the growing economy. Dutch-Bangla Bank does not want to largest scholarship package in the private sector. This be just ordinary bank, but it wants to be the largest and scholarship helps more than 16,000 students studying in biggest bank. It wants to be a bank that matters and HSC and graduation and post graduation levels on a yearly innovates its way to the zenith. basis. This scholarship program was continued in 2020. Profit alone is not our motto Future Outlook Respected shareholders, you are aware of the fact that, I believe that our customer service with existing and new DBBL’s performance cannot be judged by profit figures products and the support of our IT investment, branch, alone. Many of our services including online banking, ATM mobile banking, agent banking, e-commerce, NexusPay, and Fast Track services are offered at free of cost or at ATM & Fast Track networks, efficient and productive a very low cost even though the cost of providing this management of resources, better risk management and service is very high. That is where DBBL is different from corporate governance will bring sustainable growth with other banks in this country. improved asset quality that will maximize value for all the stakeholders in the coming years. There are more issues which are more important than profits for our Bank. This includes the amount of classified The Bank is undertaking rapid transformation to change loans and various ratios that are constantly being itself to a more consumer centric bank. Dutch-Bangla monitored by the Bank. Maintaining certain performance Bank wants to be a bank of the masses. It has taken new and efficiency metrics are more important to the Bank steps and created new divisions that will target the needs because it reflects the Bank’s true potential. That is of its customer base more effectively. It is our intention why in the case of Dutch-Bangla Bank, profits are not that these new divisions will be transformative in the way sufficient to illustrate the complete strength of the Bank. the Bank presents itself and be a significant part in our In fact, the policy not to chase quick profits has made the future endeavors. Bank more successful over the long term. I would like to express my gratitude to the Government of Bangladesh, Bangladesh Bank, Bangladesh Securities As you also know, a significant part of the profit is also and Exchange Commission, Office of the Registrar of returned to the common and distressed people of the Joint Stock Companies and Firms, the Stock Exchanges country through various Social Causes Programs in which for their continued support and guidance. I would also DBBL is a pioneer in this country. We strongly believe like to express my thanks to all valued clients, patrons, that our strong social commitment and better customer well wishers, shareholders and all employees for their service at affordable cost will make DBBL stronger and un-ending support and cooperation in the corona provide long term sustainable growth to enhance not only pandemic situation, without which the Bank would not be the shareholder’s satisfaction but also the role that the able to achieve its present position. I am thankful to our Bank plays in our society. statutory auditors Hoda Vasi Chowdhury & Co., Chartered Social Causes Programs Accountants. My appreciation also goes to my fellow As you all know, DBBL has already pioneered some unique members in the Board of Directors of the Bank for their Social Causes Programs in this country. Since inception, generous assistance, guidance and thoughtful leadership DBBL tried to enrich economic and social indicators of the in bringing every success for the Bank. society by supporting sectors such as education, living To conclude, we reaffirm our intention to remain “Your standards, healthcare, nutrition, and the environment. Trusted Partner”. Our lending policy is also supportive for creating May Allah help us and bestow his blessings upon us. employment opportunities and ethical businesses. With best regards, Education and healthcare are key areas that we focus on. This is because Education will reflect on the future of any nation, including Bangladesh. It has intangible effects that can effectively change a country. Healthcare on the Sayem Ahmed other hand deals with the most pertinent and important issues that continue to have serious consequences for Chairman FROM THE DESK OF THE MANAGING DIRECTOR & CEO

Dutch-Bangla Bank Ltd is extremely happy to be a partner heartfelt gratitude and congratulate to our valued of celebrating the birth centenary of Bangabandhu Sheikh clients, patrons, well-wishers for their unwavering Mujibur Rahman and golden jubilee of Bangladesh’s support, cooperation and strong association with us. independence as well. The birth centenary of a visionary Especially, I express my gratitude to our honorable BoDs & leader like Bangabandhu Sheikh Mujibur Rahman and 50 shareholders for their continuous support and collaboration years of Bangladesh’s independence mark new essence without which it would not have been possible for us to of epic history to our present and future generations. take the Bank to this height. Dutch-Bangla Bank can look Dutch-Bangla Bank Ltd pays rich tributes to Bangabandhu on its past with great deal of pride. Sheikh Mujibur Rahman on his birth centenary and recalls Prudent approach his epic leadership to create a new and independent nation in the world. We also pay respect to the freedom As we firmly believe in achieving long term goal through fighters who fought valiantly to free the country from the safe and sound banking, we always keep a constant devils of Pakistan forces. The freedom fighters dedicated eye on the market and analyze the market behavior themselves to salvage the country under the leadership of very intensively. Therefore, our approach towards risk Bangabandhu Sheikh Mujibur Rahman. The golden jubilee taking was calculative and incisive. As such, our focus on of our independence is thus an epic event in the history development of service delivery channels, improvement of of our country and we salute the bravery and heroism of asset quality and to maintain a sound and safe portfolio our freedom fighters on this epic occasion. The event is remains same as previous years. Like before, our efforts internationally recognized and the whole world greeted us have been continued to bring stable and predictable on this great occasion. earnings. We always emphasize on business stability, strengthening our ability to serve customers and focusing I would like to thank all of you for taking pain to join in the on our core businesses as usual which is to better the life 25th AGM of DBBL. Now I would like to take you through of society. both operational & financial highlights of what we have achieved over covid-19 impacted 2020 financial year. Economic Scenario I will also provide an overview of our expectations for 2021. Bangladesh economic activities have been growing smoothly until February 2020 as usual which was seriously DBBL has passed another successful year, the Year 2020 disrupted from March 2020 due to COVID-19 outbreak facing devastating Covid-19 pandemic along with various in Bangladesh. The Government has declared a national adverse conditions throughout the year. This performance general holiday from March 26 to May 30, 2020 for was possible due to active and prudent support of protecting spread out of corona virus among the masses. our highly efficient policy makers & employee’s active Economic activities were seriously decelerated during the contribution through-out the year. period from March to December 2020 for adverse impact At DBBL, our members are passionate about making a of corona virus. The economy of Bangladesh witnesses a measurable impact in everything we do. It is the power of lower growth in all major sectors. Bangladesh Bank have our people, our unique culture and innovative approach, to issue/allow various bail-out packages in various forms which helps us deliver enduring results. DBBL celebrates to keep safe the economy & also to keep running the and empowers the individuality of each of its members economic wheel of the country. Due to active observations and their unique personalities that have led to the success from govt. and to give continuous strategic support, the we have reached today. At DBBL, we believe that only growth rate in FY 2020 was highest in South Asian region. when you are empowered with freedom and opportunity, During FY 2020, macro indicators were negative and GDP you rise above the task at hand and take complete growth was 5.2% in FY 2020 as against 8.2% in 2019 and ownership to make a difference. 7.9% in FY 2020. Inflationary pressures were upward due to COVID-19 pandemic panic; as a result, inflation rate was Our trailblazing journey continued as usual along increased to 6% in June 2020 as against 5.5% in June 2019. with trend setting in many fields of technology driven innovative banking by introducing new seminal banking However, Taka slightly weakens against USD during FY products. At this august moment, I sincerely offer my 2020. In interbank market exchange rate was Taka 84.8=

ANNUAL REPORT 2020 19 USD 1 on 31 December 2020 as against Taka 84.9= USD The Bank’s financial performance or results and financial 1 on December 2019. Foreign exchange reserves remain position as well as cash flows are above average in the stable and current account deficit has been softening due Banking Industry (Details in page no. 27 of this Annual to increase in foreign remittance despite drastic slump Report). in export income in the wake of Covid-19. The increased Building on our core strength ADR at 85.0% for conventional Bank and 90.0% for Islami Banks has effective from September of 2019. Foreign DBBL is the most tech-savvy bank in the country having Exchange Reserve stood at USD 36.04 million in FY-2020 huge IT infrastructure aiming to reach to the common as against USD 32.72 billion in FY-2019, which is equal to people all over the country at very nominal and affordable 7.87 months import payments. prices. In most cases, we offer technology based modern services to the mass people at subsidized costs. In order Business to help country achieve its goal to reach digital access Economy could not run as expected in 2020 indicating to the masses through financial inclusion program, we GDP growth reduction compare to 2019. Businesses was continued to expand our delivery channels along with shy in expansion, private sector investment was negative IT infrastructures to the remotest possible areas. Like and overall economic scenario was deep. However, our many other innovative banking services in the country, we efforts were strengthen to further improve the quality of are the pioneer in introducing bank-led mobile banking assets of the Bank. To achieve this, we are trying to hunt services called “Rocket”. best of the best client of the country. Simultaneously, efforts continued to diversify the loan portfolio, maintain The bank has accumulated all the internet based banking ADR at desired level and look for diversified sectors services in one apps/cards with the name of NexusPay. It with emphasis on non-funded business. Our long term is a 4-GEN digital banking & we have got huge response endeavor to reach to larger number of clients through from market. We hope it will be a trailblazing system in providing easy access to technology driven modern internet banking of the country. DBBL is proud to be the banking services to the masses continued as well during first to bring this revolutionary banking solution to the the year under review. masses who has long been deprived of the opportunity to be included in the conventional banking. Agent banking Our networks have been expanded through different and was introduced in 2015 as an alternative banking to reach innovative mode of delivery channels that include 4,862 banking service all over the country including remote ATM units - the largest proprietary network in the country, area where no bank branch is available to reinforce our 1,190 Fast Tracks - a new signature idea of extended commitment to bring the unbanked masses under the services for the convenience of the clients and 208 full banking services. Now the bank is the number one bank fledged branches all over the country. Though, Business in agent banking with customer of more than half of activities were seriously hampered during the period from total agent banking customers. Our agent banking is March to December 2020 for adverse impact of Corona continuously expanding & we have target to reach every virus. But our collective efforts bring very notable results door to fulfill the banking need of the people in the adverse situation. Our client base increased to 8.3 Strong Capital to Risk-weighted Asset million. The deposits grew by Taka 60,451.8 million in Ratio 2020 from Taka 302,159.2 million to Taka 362,611.0 million. As part of our guiding policy, DBBL maintains strong In this highly competitive market, we have been able to capital adequacy ratio to have sufficient cushion to achieve 20.0% growth in deposit mobilization. Loans and absorb any unforeseen shock arising from any potential advances stood at Taka 273,382.9 million as at the end of risk, to ensure long-term solvency of the Bank and to 2020 from Taka 256,239.7 million in 2019 having growth help sustainable business and profit growth of the of 6.7%. The Bank also earned Taka 5,498.7 million net Bank. DBBL’s regulatory capital as on 31 December 2020 profit after taxes in 2020 as against Taka 4,341.4 million in stood at Taka 46,083.9 million. As at the end of 2020, 2019 having growth of 26.7%. The Bank continued to grow Capital to risk-weighted asset ratio was 17.2% as against and diversify its portfolio in 2020 to have a diversified minimum requirement of 12.5% and well above of Basel client base and portfolio distributed across the sectors to III requirement. DBBL is taking necessary steps for full reduce client specific and industry specific concentration compliance with Basel III in line with the relevant policy and to reduce overall portfolio risk. I feel it pertinent to guidelines of Bangladesh Bank. In this process, the mention that all the business activities of DBBL are done Board is guiding the management for setting strategic in full conformity with social, ethical and environmental planning with regards to maintenance of capital ratios standards. We strive to meet our clients’ changing needs commensurate with the Bank’s risk appetite capacity, and this will remain our major priority. liquidity position and leverage etc. The capital to risk weighted asset ratios of DBBL at the among the private business houses in terms of CSR end of 31 December 2020, consisting of 11.1% of Tier 1 activities. capital and 6.1% of Tier 2 capital endorsed DBBL’s comfort Human Resources ability for maintenance of capital ratios as stipulated by Bangladesh Bank in its implementation roadmap starting As DBBL is having a highly technology based work from 2015 to 2019. environment, it is one of the basic objectives to build a robust and productive workforce fit for the job and for Remittance Services to Build Country future market of globe. Therefore, training and practical Readymade garments (RMG) and remittance earned by orientation on various disciplines of banking throughout our people working abroad is two major pillars to build the year continues under HR improvement plan. Motivation the country. DBBL is patronizing RMG since inception of process through various means also continues to invigorate Bank. We are also providing all the services to our foreign the workforce. Special training and workshops including remitter to build the country. We are channeling the hard refreshers’ training on Anti Money Laundering and Anti earn remittance of our peoples working abroad through Terrorism are undertaken throughout the year. branches, ATMs, agents, mobile banking services etc. Now Outlook we want to be a “Number – 1” remittance collector within the public and Private Commercial Banks. The effort will DBBL sets its priority to continue implementation of its be continued. growth strategy with particular emphasis on improving deposit mix, reducing cost of fund and strengthening Sustained credit rating overall risk management process. These initiatives will The Bank has been able to sustain its credit rating at help the Bank to improve its business performances in ‘AA+’ in the Long Term and ‘ST-1’ in the Short Term for the all areas, bolster profits and ultimately create value for consecutive 9 years from 2011 to 2019. The credit rating of shareholders who are the main driving force behind all of the Bank for the year 2020 will be completed within the our many efforts. stipulated time of 30 June 2021. Again the Bank "DBBL" Thanks and gratitude has been rated by renowned international rating agency "Moody's" and was awarded rating "B1" I would take the opportunity to extend our thanks to our valued clients, respected shareholders, patrons and Social Causes Program well wishers for reposing their complete confidence and The bank’s main vision is to bring social well being with trust on us which has been a great source of strength modern updated banking facilities with the objectives at all times. The Management is amply thankful to the of reaching towards all the people of country with its Members of the Board of Directors for their prudent policy banking services. Since inception, DBBL champions guidelines, support and inspiration in achieving the Bank’s a mission to ensure human development through cherished goal. We would like to convey our sincere thanks helping in various social ingredients. It was proved and gratitude to the Government Agencies, Bangladesh in many ways that a small initiative can bring about Bank, Bangladesh Securities and Exchange Commission, phenomenal changes through demonstration effect. Office of the Registrar of Joint Stock Companies and Firms, DBBL starts contributing to social causes since almost its Dhaka Stock Exchange, Chittagong Stock Exchange for inception, which now become mandatory for other fellow the cooperation and support for the development of the institutions and over the years, CSR now become part Bank. Thanks to my colleagues of all levels for their sincere of their regular activities. The bank is the quintessence efforts and dedication in achieving sound performances as Corporate Social Responsibility (CSR). DBBL is not only well as in upholding the Bank’s image through delivering for profit rather it for “People – planet – profit”. It is the best quality services to the valued clients. sustaining with triple bottom line. Social cause initiatives undertaken by DBBL includes awarding of scholarship to the needy and meritorious students, Smile Brighter Program for cleft lipped children, rural healthcare, financial support to medical infrastructures and many other social developments programs. Over the years, DBBL’s various social cause obligations whopped manifold. DBBL is Abul Kashem Md. Shirin regarded as the largest contributor in the education sector Managing Director & CEO

ANNUAL REPORT 2020 21 stakeholders' information

SHAREHOLDING POSITION

Number of shares held as of 31 Percentage (%) of shares held as

December of 31 December Particulars 2020 2019 2020 2019

Sponsors and Directors

Local and Foreign 478,453,634 434,957,850 87.0% 87.0%

Total Sponsors 478,453,634 434,957,850 87.0% 87.0%

General Public

Institutions 27,237,317 19,061,997 5.0% 3.8%

Individuals 44,309,049 45,980,153 8.0% 9.2%

Total General Public 71,546,366 65,042,150 13.0% 13.0%

Grand Total 550,000,000 500,000,000 100.0% 100.0%

13.0% 13.0%

2020 2019 87.0% 87.0%

Sponsors and Directors (Local & Foreign) General Public Sponsors and Directors (Local & Foreign) General Public

ANNUAL REPORT 2020 25 HIGHLIGHTS ATM Units Branches 4,862 Fast Track 208 1,190 Deposits Taka Loans and Advances 362,611 Taka million Earnings 273,383 Per Share million Taka 10.0

Dividend 30% (Cash 15%, Stock 15% ) Total Regulatory Capital Taka 46,084 million Capital to Risk-weighted Asset Ratio (CRAR) 17.2% Any time Anywhere FINANCIAL HIGHLIGHTS

Taka in million Particulars 2020 2019 Growth (%) 2018 2017 2016 Result of operation (for the year) Total revenue 34,679.6 34,705.8 -0.1% 29,215.5 23,550.5 21,333.0 Operating profit 10,501.3 11,260.0 -6.7% 8,693.0 5,683.5 5,521.8 Profit before taxation 9,660.8 7,436.3 29.9% 6,763.6 5,293.3 3,234.0 Profit after taxation 5,498.7 4,341.4 26.7% 4,201.4 2,455.2 1,775.2 Financial position (at year end) Total assets 472,355.4 390,362.0 21.0% 346,468.8 311,906.8 264,797.4 Total risk weighted assets 267,462.0 239,471.3 11.7% 218,204.9 200,953.0 162,165.3 Total loans and advances 273,382.9 256,239.7 6.7% 231,553.9 207,257.4 173,397.8 Total deposits 362,611.0 302,159.2 20.0% 262,467.7 233,796.4 207,234.0 Total import business 127,924.6 143,652.8 -10.9% 167,371.3 151,979.3 135,113.4 Total export business 109,085.5 141,688.5 -23.0% 151,484.4 144,463.0 132,505.5 Total shareholders' fund 32,256.7 27,443.3 17.5% 23,086.0 19,482.2 17,672.7 Total capital 46,083.9 37,192.8 23.9% 34,07 7.4 26,106.7 21,178.8 Market capitalization 35,750.0 35,650.0 0.3% 28,880.0 30,620.0 23,340.0 Cash Flow Statement (for the year) Cash flows from operating activities 17,170.0 6,425.8 167.2% 5,067.2 11,731.3 4,914.5 Cash flows from investing activities (14,128.0) (16,827.0) -16.0% (7,545.5) (1,105.7) (7,997.0) Cash flows from financing activities 2,720.6 (1,457.5) -286.7% 3,349.7 3,502.3 (1,382.5) Cash and cash-equivalents (at year end) 61,314.4 55,551.7 10.4% 67,410.4 66,539.0 52,411.1 Particulars 2020 2019 Deviation 2018 2017 2016 Per share (Taka) Earning per share 10.0 8.7 1.3 21.0 12.3 8.9 Dividend per share Cash 1.5 1.5 - - 3.0 3.0 Bonus (%) 15.0 10.0 5.0 150.0 - - Net asset value (NAV) per share 58.6 54.9 3.8 115.4 97.4 88.4 Closing Market price per share 65.0 71.3 (6.3) 144.4 153.1 116.7 Financial ratios (In Percentage) Loan deposit ratio 64.3% 73.9% -9.6% 7 7.2% 75.6% 79.4% Return on average total assets 1.3% 1.2% 0.1% 1.3% 0.9% 0.7% Return on average risk weighted assets 2.2% 1.9% 0.3% 2.0% 1.4% 1.1% Return on average shareholders' fund 18.4% 17.2% 1.2% 19.7% 13.2% 10.3% Ratio of non-performing loan to total loan 2.2% 4.4% -2.2% 4.1% 4.7% 5.2% capital to risk-weighted asset ratio 17.2% 15.5% 1.7% 15.6% 13.0% 13.1% Cost-income ratio 60.5% 58.2% 2.3% 61.6% 69.3% 65.3%

* Proposed (15% cash dividend and 15% stock dividend per share for the year ended 31 December 2020),

5,498.7 32,256.7 27,443.3 4,341.4 4,201.4 23,086.0 19,482.2 17,672.7 2,455.2 1,775.2

Taka in Millio n 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 NET PROFIT AFTER TAX SHAREHOLDERS' FUND

ANNUAL REPORT 2020 27

KEY FINANCIAL INFORMATION & RATIO-LAST FIVE YEARS Taka in million Particulars 2020 2019 2018 2017 2016 Operating performance (income statement) (for the year) Total revenue 34,679.6 34,705.8 29,215.5 23,550.5 21,333.0 Total expenses 24,178.3 23,445.8 20,522.5 17,867.0 15,811.2 Profit before provisions 10,501.3 11,260.0 8,693.0 5,683.5 5,521.8 Total provision 840.5 3,823.7 1,929.4 390.2 2,287.8 Profit before taxes 9,660.8 7,436.3 6,763.6 5,293.3 3,234.0 Provision for taxation 4,162.1 3,094.9 2,562.2 2,838.0 1,458.9 Net profit after taxation 5,498.7 4,341.4 4,201.4 2,455.2 1,775.2 Statement of financial position (Balance Sheet) (As at 31 December) Authorized capital 15,000.0 15,000.0 4,000.0 4,000.0 4,000.0 Paid-up share capital 5,500.0 5,000.0 2,000.0 2,000.0 2,000.0 Total shareholders' fund 32,256.7 27,443.3 23,086.0 19,482.2 17,672.7 Deposits 362,611.0 302,159.2 262,467.7 233,796.4 207,234.0 Loans and advances 273,382.9 256,239.7 231,553.9 207,257.4 173,397.8 Investments 112,589.8 55,104.8 32,208.4 26,197.9 31,778.5 Property, plant and equipment (net) 7,882.8 5,380.6 5,737.3 5,433.1 4,871.9 Total assets 472,355.4 390,362.0 346,468.8 311,906.8 264,797.4 Total earning assets 398,814.2 321,415.8 270,859.9 256,107.6 221,617.7 Total contingent liabilities 82,817.4 75,307.4 78,632.9 70,501.5 60,051.7 Other business (trade finance) for the year Import business 127,924.6 143,652.8 167,371.3 151,979.3 135,113.4 Export business 109,085.5 141,688.5 151,484.4 144,463.0 132,505.5 Asset quality (As of 31 December) Amount of classified advances (Taka) 5,921.9 11,230.1 9,580.8 9,644.5 8,999.0 Classified loans to total loans (%) 2.2% 4.4% 4.1% 4.7% 5.2% Capital measurement Core (Tier 1) capital 29,682.5 24,636.0 20,272.2 16,593.3 14,867.0 Supplementary (Tier 2) capital 16,401.4 12,556.8 13,805.3 9,513.4 6,311.8 Total capital (Tier 1 and Tier 2) 46,083.9 37,192.8 34,07 7.4 26,106.7 21,178.8 Total risk weigheted assets 267,462.0 239,471.3 218,204.9 200,953.0 162,165.3 Tier 1 capital to risk-weighted asset ratio (%) 11.1% 10.3% 9.3% 8.3% 9.2% Tier 2 capital to risk-weighted asset ratio (%) 6.1% 5.2% 6.3% 4.7% 3.9% Total capital to risk-weighted asset ratio (%) 17.2% 15.5% 15.6% 13.0% 13.1% Capital surplus 12,651.2 7,258.9 8,165.6 3,499.5 3,948.7 Share information Number of share outstanding 550,000,000 500,000,000 200,000,000 200,000,000 200,000,000 Earnings per share (Taka) 10.0 8.7 21.0 12.3 8.9 Market price per share (Taka) 65.0 71.3 144.4 153.1 116.7 Price earning (P/E) ratio (Times) 6.5 8.2 6.9 12.5 13.1 Market capitalization 35,750.0 35,650.0 28,880.0 30,620.0 23,340.0 Dividend per share Cash (Taka) 1.5 1.5 - 3.0 3.0 Bonus (%) 15.0 10.0 150.0 - - Net asset value (NAV) per share (Taka) 58.6 54.9 115.4 97.4 88.4 Number of shareholders 6,285 7,840 4,321 5,045 3,959 Finacial ratios (In Percentage) Debt equity ratio (%) 43.4 38.4 50.1 39.6 20.9 Loan deposit ratio (%) 64.3 73.9 77.2 75.6 79.4 Return on average investment (ROI %) 8.5 7.8 6.9 7.0 8.0 Yield on loans and advances (%) 8.4 10.3 9.5 8.3 9.4 Return on average equity (ROE %) 18.4 17.2 19.7 13.2 10.3 Return on average assets (ROA %) 1.3 1.2 1.3 0.9 0.7 Other information Number of employees 10,022 9,988 8,195 6,816 6,127 Number of branches 208 195 184 175 165 Number of ATM Units 4,862 4,837 4,705 4,467 4,331 Number of Fast Track 1,190 1,100 900 780 708 Number of deposit account holder 8,309,224 8,663,163 7,468,445 6,169,253 5,204,168 Number of loan account holder 60,718 54,932 49,546 45,786 31,448 * Proposed (15% cash dividend and 15% stock dividend per share for the year ended 31 December 2020), GRAPHICAL PRESENTATION

TOTAL REVENUE (TAKA IN MILLION) OPERATING INCOME (TAKA IN MILLION)

2020 34,679.6 2020 10,501.3

2019 34,705.8 2019 11,260.0

2018 29,215.5 2018 8,693.0

2017 23,550.5 2017 5,683.5

2016 21,333.0 2016 5,521.8

NON-INTEREST INCOME (TAKA IN MILLION) TOTAL DEPOSITS (TAKA IN MILLION)

2020 5,340.8 2020 362,611.0

2019 5,749.7 2019 302,159.2

2018 5,710.4 2018 262,467.7

2017 3,895.8 2017 233,796.4

2016 3,761.4 2016 207,234.0

TOTAL LOANS AND ADVANCES (TAKA IN MILLION) TOTAL ASSETS (TAKA IN MILLION)

2020 273,382.9 2020 472,355.4

2019 256,239.7 2019 390,362.0

2018 231,553.9 2018 346,468.8

2017 207,257.4 2017 311,906.8

2016 173,397.8 2016 264,797.4

ANNUAL REPORT 2020 29 TOTAL IMPORT BUSINESS (TAKA IN MILLION) TOTAL EXPORT BUSINESS (TAKA IN MILLION)

2020 127,924.6 2020 109,085.5

2019 143,652.8 2019 141,688.5

2018 167,371.3 2018 151,484.4

2017 151,979.3 2017 144,463.0

2016 135,113.4 2016 132,505.5

EARNINGS PER SHARE (TAKA) PRICE EARNING (P/E) RATIO (TIMES)

2020 10.0 2020 6.5

2019 8.7 2019 8.2

2018 21.0 2018 6.9

2017 12.3 2017 12.5

2016 8.9 2016 13.1

DIVIDEND (%) NET ASSET VALUE (NAV) PER SHARE (TAKA)

2020 Cash 15% 2020 Stock 15% 30.0% 58.6

2019 Cash 15% 2019 Stock 10% 25.0% 54.9

2018 Stock 150.0% 2018 115.4

2017 Cash 30.0% 2017 97.4

2016 Cash 30.0% 2016 88.4 RETURN ON SHAREHOLDERS' FUND (%) COST-INCOME RATIO (%)

2020 18.4% 2020 60.5%

2019 17.2% 2019 58.2%

2018 19.7% 2018 61.6%

2017 13.2% 2017 69.3%

2016 10.3% 2016 65.3%

LOAN DEPOSIT RATIO (%) RETURN ON ASSETS (ROA) (%)

2020 64.3 2020 1.3

2019 73.9 2019 1.2

2018 77.2 2018 1.3

2017 75.6 2017 0.9

2016 79.4 2016 0.7

RATIO OF NON-PERFORMING LOANS (NPL) TO TOTAL LOANS (%)

2020 2.2%

2019 4.4%

2018 4.1%

2017 4.7%

2016 5.2%

ANNUAL REPORT 2020 31 Value Added Statement The value added statement of Dutch-Bangla Bank Limited shows how the value is created and distributed to the different stakeholders of the Bank.

2020 2019 Particulars Amount in Taka Percentage (%) Amount in Taka Percentage (%) Value added Income from banking services 34,679,610,085 34,705,820,306 Less: Cost of services and supplies 15,606,688,764 13,002,477,148 Sub Total 19,072,921,321 21,703,343,158 Less. Charges on loan losses (999,496,456) (3,446,898,003) Less. Provision for deferred tax (309,577,349) 188,481,842 Less. Loan loss provision and other provisions (840,477,170) (3,823,688,774) Total Value added 16,923,370,346 14,621,238,223 Distribution of Value added To employees as salary and allowances 5,234,262,498 30.9% 4,819,272,669 33.0% To Government as income tax 3,852,516,597 22.8% 3,283,420,884 22.5% To statutory reserve fund - - - - To Depreciation 2,337,846,612 13.8% 2,177,156,910 14.9% To Shareholders As retained earnings 5,498,744,639 32.5% 4,341,387,760 29.7% Total 16,923,370,346 100% 14,621,238,223 100%

VALUE ADDED STATEMENT 2020 (%) VALUE ADDED STATEMENT 2019 (%)

32.5% 29.7% 30.9% 33.0%

13.8% 14.9% 22.8% 22.5%

To employees as salary To Depreciation and allowances

To Government as income tax To Shareholders Financial Calendar Particulars Financial calendar for 2021 Date of recommendation of Dividend by the Board of Directors for the year 2020 06 March 2021 Record date for entitlement of dividend for the year 2020 28 March 2021 Notice of the 25th Annual General Meeting 05 April 2021 25th Annual General Meeting to be held on 26 April 2021 Next 1st Quarter (Q1) Financial Statements within 13 May 2021 Next Half-Yearly Financial Statements within 29 July 2021 Next 3rd Quarter (Q3) Financial Statements within 28 October 2021

Financial calendar for 2020 Notice of the 24th Annual General Meeting 23 June 2020 Date of holding of 24th Annual General Meeting 08 July 2020 Distribution of Dividend for the year 2019 29 July 2020 1st Quarter (Q1) Financial Statements (Un-audited) released on 28 June 2020 2nd Quarter (Half-Yearly) Financial Statements (Audited) released on 29 July 2020 3rd Quarter (Q3) Financial Statements (Un-audited) released on 28 October 2020

Information on dividend 2020: Proposed Cash dividend @ 15% and Stock dividend @ 15% (i.e. Taka 1.5 in cash & 0.15 bonus share against 1 existing share of Taka 10 each) 2019: Cash dividend @ 15% and Stock dividend @ 10% (i.e. Taka 1.5 in cash & 0.1 bonus share against 1 existing share of Taka 10 each) 2018: Stock dividend @ 150% (i.e. 1.5 bonus share against 1 existing share of Taka 10 each)

Share transfer system The shares of Dutch-Bangla Bank Limited (DBBL) are being traded at the Stock Exchanges in Dematerialized form through Central Depository Bangladesh Limited (CDBL) as per directive of Bangladesh Securities and Exchange Commission (BSEC). Physical shares, which are not yet dematerialized, can be dematerialized through Central Depository System (CDS).

Information relating to shareholdings Distribution of shares of DBBL and shareholdings by the Directors are given in Note 16 to Financial Statements of this Annual Report.

Listing on Stock Exchanges

Particulars Dhaka Stock Exchange Chittagong Stock Exchange Trading Code DUTCHBANGL DUTCHBANGL Company Code (Scrip) 11121 22017 Listing year 2001 2001 Market Category A A Electronic Share Yes Yes Total number of shares 550,000,000 550,000,000 Paid-up capital (in million Taka) 5,500 5,500 Face value (in Taka) 10 10

ANNUAL REPORT 2020 33 5 Years’ Highlights of DBBL Shares

Period (For the year ended 31 December) Particulars 2020 2019 2018 2017 2016 Shares outstanding (Numbers) 550,000,000 500,000,000 200,000,000 200,000,000 200,000,000 DSE closing price (Taka) 65.0 71.3 144.4 153.1 116.7 Earnings per share (Taka) 10.0 8.7 21.0 12.3 8.9 Net asset value (NAV) per share (Taka) 58.6 54.9 115.4 97.4 88.4 Market price / net asset value (Times) 1.1 1.3 1.3 1.6 1.3 Market capitalization (In million Taka) 35,750.0 35,650.0 28,880.0 30,620.0 23,340.0

153.1 144.4 Statutory Auditors 116.7 Hoda Vasi Chowdhury & Co. Chartered Accountants 71.3 65.0 BTMC Bhaban (6th & 7th Floor) 7-9 Kawran Bazar C/A Dhaka-1215, Bangladesh Tel No. 88-02-9120090 Fax No. 88-02-58155346 e-mail: [email protected] Web: www.hodavasi.com 2016 2017 2018 2019 2020 DSE CLOSING MARKET PRICE (TAKA) External Credit Assessment Institution (ECAI) Credit Rating Information and Services Limited (CRISL) Queries relating to corporate information Nakshi Homes (4th & 5th Floor) Queries relating to any corporate information and 6/1A, Segunbagicha, Dhaka-1000, Bangladesh published financial information may be directed to the Company Secretary of DBBL in the following address: Tel No. 88-02- 9530991-4 Fax No. 88-02- 9530995 Mohammed Mesbahul Alam e-mail: [email protected] Company Secretary Web: www.crislbd.com 47, Motijheel Commercial Area Dhaka-1000, Bangladesh Tax & company affairs consultant Tel No. 88-02-9574196-8 (PABX) Ahmed Zaker & Co. Fax No. 88-02-9561889 Chartered Accountants e-mail: [email protected] Green City Edge (Level 10) SWIFT: DBBL BD DH 89, Kakrail, Dhaka-1000, Bangladesh Tel No. 88-02-8300504-8 Other Information Fax No. 88-02-8300509 Registered Office e-mail: [email protected] 47, Motijheel Commercial Area Web: www.ahmed-zaker.com Dhaka-1000, Bangladesh Tel No. 88-02-9574196-8 (PABX) Our website Fax No. 88-02-9561889 Audited financial statements and other useful e-mail: [email protected] information are available in our website as follows: SWIFT: DBBL BD DH www.dutchbanglabank.com BUSINESS SEGMENT RESULTS OF DBBL FOR THE YEAR 2020 Taka in Million Off-shore Corporate Retail Financial SME Particulars Treasury Banking Total Banking Banking Inclusion Banking Unit Interest income 10,413.5 4,681.6 1,979.2 3,509.3 8,154.1 595.5 29,333.1 Interest paid on deposits and borrowings 1,891.6 2,756.7 205.4 737.2 2,108.4 366.0 8,065.3 Net interest income 8,521.9 1,924.9 1,773.8 2,772.1 6,045.7 229.5 21,267.9 Transfer of interest between business segments (6,731.3) 12,736.9 - (1,295.9) (4,709.7) - - Net interest income(NII) after transfer of 1,790.6 14,661.7 1,773.8 1,476.3 1,336.0 229.5 21,267.9 interest between business segments Non-interest income (fees, commission, exchange 2,561.8 1,564.0 249.2 879.3 82.4 9.7 5,346.5 & other operating income) Total operating income 4,352.4 16,225.8 2,023.0 2,355.6 1,418.4 239.2 26,614.3 Operating expenses 360.5 12,494.6 2,120.3 922.5 209.0 6.2 16,113.0 Profit before provision 3,991.9 3,731.2 (97.4) 1,433.2 1,209.5 233.0 10,501.3 Provision for loans and off-balance sheet exposures (specific, general and special for 534.0 110.6 - 178.0 - 17.9 840.5 Covid-19) Profit before taxes 3,457.9 3,620.6 (97.4) 1,255.2 1,209.5 215.1 9,660.8 Total provision for taxation (current and deferred) 1,425.0 1,506.2 - 626.9 604.0 - 4,162.1 Net profit after taxation 2,033.0 2,114.4 (97.4) 628.3 605.4 215.1 5,498.8

Total Average Assets 196,492.8 34,620.2 29,400.8 57,169.3 99,295.5 14,380.1 431,358.7 Total Average Liabilities 79,589.4 216,533.7 29,489.4 40,615.5 21,680.1 13,600.8 401,508.7

SEGMENT-WISE AVERAGE ASSETS (TAKA IN MILLION) SEGMENT-WISE AVERAGE LIABILITES (TAKA IN MILLION) 14,380.1 13,600.8 21,680.1 79,589.4 99,295.5 40,615.5

29,489.4 196,492.8

57,169.3

29,400.8 34,620.2 216,533.7 Corporate Banking SME Banking Retail Banking Treasury Financial Inclusion

ANNUAL REPORT 2020 35 BASIS FOR MEASUREMENT AND REPORTING OF BUSINESS SEGMENTS OF DBBL Our business segment reporting is intended to measure rate risk, liquidity and funding risks, cash requirement the true performance of each business segment as it and regulatory requirements of each of our business were a stand-alone business and reflect how the business segments. Taking into account these factors, transfer segment is managed. This approach is intended to ensure pricing is based on external and competitive market costs that our business segments' results include all relevant of funding. Each business segment fully absorbs the revenue and expenses associated with the conduct of competitive interest costs to finance its assets. Business their business. segments may retain certain interest rate exposures Highlights of the key aspects of how our subject to management approval and limits that may be business segments are managed and expected in the normal course of business operations. reported Operating expense allocation l Corporate banking results include interest and non-interest income related to corporate loans To ensure that our business segments’ results include and allied business and related amounts for respective expenses associated with the conduct of specific and general provisions for loan losses. their business, costs directly associated with a business l Small and Medium Enterprises (SME) banking segment is allocated to the respective business segment. results include interest and non-interest Other costs not directly attributable to any business income related to SME loans and allied business segments, including overhead costs and other indirect and related amounts for specific and general expense, are allocated to each business segment provisions for loan losses. in a manner that reflects the underlying benefits l Personal banking results include interest and proportionately enjoyed by the business segment. non-interest income related to personal/retail loans, debit cards and credit cards and related Specific and general provisions amounts for specific and general provisions for loan losses. Specific provisions against loans are deducted to recognize l Treasury results include interest and non- probable losses in our lending portfolio on loans that have interest income related to treasury operations become classified. The specific provisions for loan losses covering both local currency and foreign currency are deducted to arrive at the results of each business operations. segment to truly reflect the appropriate expenses related to the conduct of each business segment. Key methodologies used The key methodologies and assumptions used in our A general provision is maintained to cover estimated segment reporting are periodically reviewed by the loan losses in the lending portfolio that have not been management to ensure validity and adjustments are specifically identified as classified or doubtful of recovery. made if and when necessary to reflect true results of each business segment. The methodologies and assumptions are given below: Income tax Net interest income Income tax (current tax and deferred tax) is allocated on Net interest income (NII) for each segment is determined taxable income of each segment at effective rate as per based on interest income on average earning assets income tax law. related to each segment net off cost of deposits including deposits transferred to and from other business segments. Capital assignment Transfer pricing of funds The assignment of capital to our business segments is allocated in a manner to consistently measure and align A product specific fund transfer pricing methodology is economic costs with the underlying benefits and risks used to allocate interest income and expense to each associated with the business operations of each business business segments. This allocation considers the interest segment. events

DBBL established the “Mujib Corner” at the Head Office premises (47 Motijheel, C/A, Dhaka) of the bank. Mr. M. Sahabuddin Ahmed founder of Dutch-Bangla Bank and Chairman of Dutch-Bangla Bank Foundation, Mr. Sayem Ahmed, Chairman of Board of Directors of Dutch-Bangla Bank, Mr. Mohd. Khorshed Alam, the then Independent Director of the bank, Mr. Abul Kashem Md. Shirin, Managing Director & CEO are seen visiting the “Mujib Corner”.

Dutch-Bangla Bank Limited Celebrated the Birth Centenary of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman. The Honorable Board of Directors along with employees of the Head Office participated in a rally in front of the Bank’s Head Office premises (47, Motijheel C/A, Dhaka) on March 18, 2020. Later on, a cake was cut to celebrate this occasion. Mr. M. Sahabuddin Ahmed founder of Dutch-Bangla Bank and Chairman of Dutch-Bangla Bank Foundation, Mr. Sayem Ahmed, Chairman, Board of Directors. Dutch-Bangla Bank, Mr. Mohd. Khorshed Alam, the then Independent Director of the bank, Mr. Abul Kashem Md. Shirin, Managing Director & CEO and other employees of Dutch-Bangla Bank were present on the occasion. awards

Dutch-Bangla Bank Limited received award in “Excellence in MasterCard Online Acquiring Business 2019-20." The award giving ceremony was held through digital platform while Mr. Salman Fazlur Rahman, MP, Advisor to the Honorable Prime Minister (Private Sector Industry and Investment) was present as Chief Guest. Dutch-Bangla Bank received award in “Excellence in MasterCard POS Acquiring Business 2019-20”. The award giving ceremony was held through digital platform while Mr. Salman Fazlur Rahman, MP, Advisor to the Honorable Prime Minister (Private Sector Industry and Investment) was present as Chief Guest. Dutch- Bangla Bank Limited has been awarded the prestigious DHL-Daily Star Business Award for “Best Financial Institute of the year 2019” for the 2nd time. Earlier the bank received this award in 2006. The award recognizes the achievements and positive contributions of business houses who have not only grown but have contributed to the economic development of the country. The award giving ceremony was held through digital platform on December 12, 2020 in presence of Mr. Tipu Munshi, MP & Honorable Minister, Ministry of Commerce of Bangladesh, Mr. Binod Chowdhury, the wealthiest and most successful industrialist in Nepal and Mr. Nurhayati Abdullah, Managing Director of DHL Express Emerging Markets, along with business luminaries of the country, corporate leaders and prominent citizens. Dutch-Bangla Bank Limited achieved prestigious PCI DSS Certification in 2020 from a leading Qualified Security Assessor, NCC Group, UK by complying all the requirements of PCI DSS. This achievement of the bank will ensure more secure and reliable services for its valued customers. Being the pioneer in information technology, Dutch-Bangla has the largest IT infrastructure in the country having more than 10 thousand endpoints which comprises of Branch, ATM and Fast Track, POS, Call Center, Payment Gateway, E-commerce, Core Banking System (CBS), Payment Switching, Debit Card, Credit Cards and PIN issuance system. Getting PCI DSS compliance for such a huge network is an arduous task, the bank successfully completed these tasks and achieved PCI DSS Certificate in a very professional process. banking automation

BANKING AUTOMATION AT DUTCH-BANGLA BANK

The world is transforming towards digitalization. running since 2004 which has been upgraded in 2012 Bangladesh is also following the same path. Dutch-Bangla to Flexcube Universal Solution (FCUBS). Meantime, Bank has been the pioneer in performing the banking the number of customers, accounts, Automated Teller operations digitally since its inception back in 1996. From Machine (ATM), Point of Sales (POS) terminals, cards day 1, DBBL started computerized branch operation. As etc. has increased exponentially. The software has been the days passed, that has been enriched with the updated customized in line with Bank’s products & service needs. technology & standards. Thus, the bank has achieved the With these upgrades, it has been possible to provide image of a digital bank in the minds of the people. The round the clock customer service. It has the following key bank has been awarded as the best digital bank also by the features:

Bangladesh Bank recently. Due to robust IT infrastructure l Any Branch Banking: All the 208 branches are in place, it has been possible to operate the Bank’s connected online with the centralized server located operation & services through 208 branches, 77 own Mobile at the data center. After introducing the real-time & Agent banking offices, 1,190 Fast Tracks, almost 5,000 online core banking software, all the new branches agent banking outlets and lacs of service point outlets of are opened with the online connectivity from day 1. Rocket throughout the country. l Online ATM / POS service: Like the branches, all Dutch-Bangla Bank has designed its products & services ATMs & POSs are connected to the central server at keeping in view the wide range of people of the country. the data center allowing the valued clients of the The Bank’s enterprise software consists of mainly 5 bank as well as card holders of other banks to meet applications: Core Banking, Mobile Banking under the their financial needs. DBBL started its ATM/ POS popular brand name Rocket, Agent Banking, Switching service back in 2004 and became the leader soon. software and the most popular app NexusPay. The Core All transactions are free of cost in ATM and POS Banking software is targeted for conventional banking. terminals for DBBL’s own customers. Rocket is aimed for the mass unbanked population of the country where orthodox banking facilities are not l Internet banking service: This allows a customer to available. Agent Banking offers more secure banking access his/her account from home or office by virtue using biometric authentication, allowing to do banking of internet connectivity. The Bank has been one of transaction by authenticating using fingerprint. Agent the pioneers in introducing Internet Banking in the Banking offers almost all types of conventional banking country back in 2004. This service is also offered products. Switching software is a back-end software which free of charges. manages & controls the ATMs & POS terminals. NexusPay is a revolutionary app which has become the most popular This channel also offers interbank Funds Transfers electronic wallet in no time. NexusPay does not only have using BEFTN & NPSB channel of Bangladesh Bank. the facility to add DBBL cards / accounts, rather other This has allowed the customers to initiate Interbank Bank’s cards too. Apart from these, the Bank has few more BEFTN or NPSB transactions without even going to software which are used to facilitate the other services any branch. of the Bank, e.g. credit card, e-commerce etc. These wide range of products and services are offered to our valued l SMS and Alert banking service: Considering the customers backed by world standard hardware & software availability of mobile phones in almost everybody’s and state-of-the art IT infrastructure. hand, the bank has introduced SMS and Alert banking for the convenience of the customer. At Core Banking Software this moment more than 8 million customers are configured to receive transaction alerts whenever DBBL is the first Bank in the country to introduce truly there is any debit or credit transaction made to his online Banking services with all delivery channels. The account. DBBL customers are receiving account truly online core banking software, Flexcube has been balance SMS after each transaction..

ANNUAL REPORT 2020 51 l E-Commerce Payment Gateway (Nexus Payment Agent Banking Gateway): DBBL is the first bank in Bangladesh to have the e-payment gateway since June 2010 in the Agent Banking offers almost all the products & country. This gives a person the liberty to purchase services available in conventional core banking service. online, pay utility bills etc. Most importantly, the Additionally, this can be operated through hundreds person doesn’t necessarily have to be an account and thousands of sub-agents across the country, holder/ cardholder of DBBL. Agent Banking allows transactions using biometric authentication, i.e. authentication using fingerprint. l Sub-Branches: To bring the banking services to the Thus making it the most secure way of making the doorsteps of the people, DBBL will setup a number transactions. An Agent Banking accountholder can have of sub-branches shortly. In these sub-branches, cheque books, ATM cards, have DPS account option, people will be able to open accounts, deposit cash or loans, utility bill payment and what not. Banking is no cheques to accounts, withdraw cash from accounts longer limited to working days and 10am to 4 pm only. etc. Transactions are available beyond this time barrier. Mobile Banking System (ROCKET) Switching Software A significant percentage of transactions of DBBL are DBBL has pioneered the Mobile Banking and serving performed using the most popular delivery channel ATM. their customers countrywide through Branch, ATMs, As such, it is equally important to have strong switching Agent Points and so on. The Bank has successfully software to handle different types of transactions as well replaced their Mobile Banking Software by developing as high volume of transactions. Considering this, the bank new Mobile Banking Solution by bank’s IT team. has upgraded its switching software too. The upgraded In the year 2020, the following features have been software has ensured better and quick response to the incorporated to facilitate better customer services: requested transactions; also it is capable of handling EMV transactions. l “Add Money” features at rocket system.

l Biller Integration. All the ATMs and POS terminals are EMV-compliant. The EMV security policy has been introduced by Europay, l Bulk account opening, disbursement and product MasterCard and VISA jointly to ensure secure cards migration for Garments and PMO. transactions. We are again the first Bank in Bangladesh l Interfacing between Midland bank and Rocket to ensure such security for our valued customers. DBBL

l Rocket MBS-ABS Fund transfer. has also introduced EMV compliant chip based MasterCard cards and VISA Cards for the first time in Bangladesh which l Tuition fee collection system. is the most secure card in the world. The ATM/POS network l DPDC DESCO POS vending. of the DBBL accepts the following cards: l EMV compliant chip cards of all the banks in the l Tap and Hold transaction in Rocket App. world; l Bill Payment Receipt. l Non-EMV Visa & MasterCard cards of all the banks in l Rocket App for Huawei the world; l Unionpay, Diners club & Discover; E-KYC l DBBL’s proprietary cards (Nexus); l All Cards received from NPSB. e-KYC provides an ample scope of quick onboarding customer by verifying customer identity through digital NexusPay means which can leverage saving of time and provide Host Card Emulation (HCE) technology is the latest ease both for client and the bank. As per Bangladesh bank introduction in the payment industry. The solution is guideline, DBBL has already successfully implemented getting popularity in the developed countries due to its e-KYC process and onboarding customer using either advanced security and fast transaction features. Using finger print or face matching based on the requirement of the technology DBBL officially launched the mobile account opening. application “NexusPay” an App service in the year 2017. Customers can download their debit & credit card, Agent banking Card and Rocket account information to Smartphone using token, they can do transactions in-store, in-app and online with in a single application without exposing actual card information. We are adding new features continuously to enrich the application and customer experience. Other Bank’s Mastercard & Visa Cardholders can also avail the facility. Features added in the recent years

l E-KYC option, which enables the customer to authenticate using NID by themselves Rapid Pass Fast-Track l Call Center verification for new registration and device change Document Management System l Match mobile number while adding any Card Bank has already started the implementation of paperless l Match mobile number for all types of transaction banking for the first time in financial sector in Bangladesh by l Deleted cards whose wallet number and registered its own in-house developed software. In that perspective we number did not match. have already developed module based solutions to automate all its paper based business processes as well as administrative l One Time Passcode (OTP) for registration, forget processes to further improve the customer service and day to pin, device change, card download, bill pay and send day operations. Retail Loan Management system has been in money live environment and successfully operating from its Retail l SMS Binding while registration and device change Division and Branches. In 2020, we incorporated some module (Android Mobile) like DMS Card Management System (CMS), DMS Small & Medium Enterprise (SME), DMS GSD Fuel Bill Reimbursement l NexusPay Toll Card to provide electronic toll payment and Integrated Agent Banking Retail loan through DMS. We are facility hopeful to bring all the processes of the bank under Document l Inclusion of numbers of billing institutions, including Management system within the year 2021. utility service providers, educational institutions, govt offices etc. Electronic Toll Collection (ETC) System

Electronic toll collection is a technology for fast and efficient toll collection where payment takes place from the customer account without stopping for payment at toll plaza. DBBL is the first bank in Bangladesh which provides the facility of electronic toll collection. Meghna bridge, Gomti bridge, Bhairab bridge, Shah amanat bridge, Lalon shah bridge and Bangabandhu bridge have been successfully availing the toll collection facility. Any DBBL Document Management System account holder, card holder including Rocket have the opportunity to avail the electronic toll payment facility. Remittance Management System Customer of other banks having Master Card or Visa Card can also enjoy the facility using NexusPay. The Bank has IT Development Division developed the remittance successfully developed the ETC solution by their in-house management system for the Banking. In 2020, developers. In 2020, Bangabandhu Bridge and Muktapur decentralization of Agent Point Cash Pickup Non Web Bridge are successfully availing the toll collection facility. based Payment are developed as before all payment were

ANNUAL REPORT 2020 53 handled centrally. Also automated DBBL Agent outlet KYA Utility Bill Payment Service form for uploading in the Western Union Agent Portal is Dutch-Bangla Bank Limited provides services to pay developed. different types of utility bill for their customers through NexusPay app, Rocket app, USSD, Over the counter For better customer service, Bank has been integrating and e-commerce gateway. To provide the service, IT different exchange houses with the remittance system. In the year 2020, we have integrated following exchange development division requires to complete development house with our system. and integration with different organization. In the year 2020, they have integrated with the following major l AL RAJHI BANK organization:

l l Emirates India Intl. Exchange NESCO

l l Global Money Remittance TITAS Gas

l l Hanpass Palli Bidyut

l l NEC Money Transfer Limited-UK Jiban Bima Corporation

l l National Exchange Company Delta life

l l Orient Exchange Co. LLC WZPDCL

l l Daytona Capital Management, UK BIWTA Hydrology

l l Joyalukkas Kuwait Exchange LLC Election Commission

l l Index Exchange, UAE BGDCL

l l Joyalukkas Oman Exchange LLC KGDCL

l l InstaReM Pte Ltd PGCL

l l Zenj Exchange Co. DPDC DESCO POS vending. Tier-4 Near Live Data Center (NDC) The Bank has always been very sensitive to invaluable customer data. As a measure to protect customers’ data and ensure availability of the system, Dutch-Bangla Bank established a Near Live Data Center (NDC) at the outskirt of Dhaka city. The site is fully equipped with all the related hardware & software to run independently in case of failure of the Data center. The Bank has been awarded ANSI/TIA-942 Site Certification. The certificate issuing authority mentioned that the data center facility under scope was physically inspected for conformity to the design criteria of the ANSI/ TIA-942 standard for respective Rating level. This physical inspection covered both an assessment of all related design documents as well as a physical onsite inspection for each area under the scope of the ANSI/TIA-942 standard. Bank completed set-up of its Data Center-2 (DC-2). All the infrastructure equipment have been commissioned and running like Generator, UPS, Precision air-conditioning. We are pleased to inform that almost all major applications, databases are running from the Data Center-2 (DC-2). This has taken the Bank to a new height. The Bank has achieved country’s 1st Rated-4 (a.k.a Tier-4) Certification for the DC-2 in October, 2018 for (i) Architecture (ii) Mechanical (iii) Electrical & (iv) Telecom.

Dashboard to monitor Near Data Center (NDC) from NDC operating room

A partial view of most mordern equipped tier-4 Data Center

ANNUAL REPORT 2020 55 New Enterprise Storage l Transaction Monitoring Software for Bank’s different systems Recently the bank has introduced high standard Hitachi l Divisional Value Center Software. storage. Migration to this new storage has already been l Distributor Financing and Collection Monitoring started and few application data has been moved to this with ROBI new storage from the current one. l Inter Operable Digital Transaction Platform Upgradation of Online Sanction Screening l New Version of HRMS Application to combat Anti-Money l Automated Challan Laundering (AML) & Combating Terrorist l VAT Online. Financing (CTF) l Introduction to AI Based Chatbot Dutch-Bangla Bank introduced the online sanction l IDTP Project screening application “Accuity Compliance Link” few years back. With this, the new customers & existing customers Upcoming Projects of the Bank are screened against the sanction lists from The Bank has taken up a project to setup another Rate/ time to time updated by various national & international Tier-4 certified Data Center at EPZ. organizations such as UN (United Nations), UN SC (United Nations Security Council), OFAC (Organization of IT Security in Dutch-Bangla Bank Foreign Assets Control, USA), Bank of England and Her The ICT landscape is vulnerable to various forms of Majesty’s list etc. The application also screens against attacks. The frequency and malignancy of such attacks PEPs (Politically Exposed Persons) data. Recently the are increasing. It is imperative that Bank or NBFI application has been upgraded to its latest version implements security solutions at the data, application, thereby accessing the latest features & data of the database, operating systems and networks to adequately application. Thus the Bank became more compliant and address related threats. Appropriate measures needs transactions are safer with this Bank. to be implemented to protect sensitive or confidential Fraud Management Solution for e-commerce information such as customer personal information, account and transaction data which are stored and Ecommerce transactions are being considered to be the processed in systems. Customers shall be properly most vulnerable beside its benefits. 3D secure technology authenticated before access to online transactions, benefits the Acquirer to protect loss of Chargeback under sensitive personal or account information. To keep the fraud but the Issuers have the right to report those services uninterrupted Bank has done ample investment transactions as fraud. As a result, the genuine cardholder to build a state of the art IT infrastructure. Along with or the Card Issuing Bank reports the transaction as fraud this, Bank is also concerned about the security posture to VISA/Mastercard. of the overall IT services and made a commitment to As such, DBBL has implemented Fraud Management improve the security of those services to protect its Solution, CyberSource, a worldwide renowned fraud customers’ data and privacy and formed a separate management tool by a wholly-owned subsidiary of division named IT Security Division in October, 2016. VISA Inc. It helps in detecting suspicious transaction at the time of transaction occurs. This advanced feature PCI DSS Certification will open up all segments of ecommerce business like, The Payment Card Industry Data Security Standard (PCI accepting international cards at all merchants. The fraud DSS) is a set of security standards formed in 2004 by Visa, management solution will also enhance the customers’ MasterCard, Discover Financial Services, JCB International confidence and trust on our Payment Gateway. and American Express. Governed by the Payment Card Ongoing Projects in core area Industry Security Standards Council (PCI SSC), the compliance scheme aims to secure credit and debit card Projects are continuously ongoing. A brief list of which is transactions against data theft and fraud. PCI certification given below: is also considered the best way to safeguard sensitive l Merging of Agent Banking system with Core data and information, thereby helping businesses to Banking system build long lasting and trusting relationships with our l Upgradation of Core Banking system to latest customers. version IT encourages and enhances cardholder data security l Upgradation of Switching software to its higher and facilitate the adoption of consistent data security version measures globally. It provides a baseline of technical l Reconciliation Software for Bank’s different and operational requirements designed to protect systems account data. PCI DSS applies to all entities involved l Data loss prevention (DLP) is deployed for making in the payment card processing—including merchants, sure that end users do not send any sensitive or processors, acquirers, issuers, and service providers and all critical information like card data outside of the Bank other entities that store, process or transmit cardholder network. data and/or sensitive authentication data. l Privileged Access Management (PAM) solution is We have achieved PCI DSS certification on November used for properly monitoring and tracking all the 16, 2020 after successful assessment by the PCI council activities of the privileged accounts in compliance approved Qualified Security Assessor (QSA) NCC Group, with Bank’s policy. UK. It was a task of paramount importance as we have l Web Application Firewall (WAF) to protect all the the largest IT infrastructure. With prudent and dynamic web gateways and online transactions from malicious leadership from honorable Board of Directors and threats and malwares. Management team as well as continuous effort from IT team members, the bank finally achieved this very l File Integrity Monitoring (FIM) solution for prestigious certificate. performing in the act of validating the integrity of operating system and application software files using a verification method between the current file state and a known, good baseline.

Bank is currently working on ISO 27001 certification and PCI DSS re-certification as well as fine tuning of policies/solutions to meet business goal by complying various regulatory/compliance requirements. Bank is also doing periodic Vulnerability Analysis and Penetration Testing (VAPT) in the Bank’s network and infrastructure and continuously trying to rectify all the loopholes to strengthen the security posture of the Bank. We have implemented VAPT software, ASV Scanning Software, Dynamic Software Testing and Static Software Testing IT infrastructure and services security solutions to perform security testing and review the IT enhancements infrastructure. The number of the cyber-attack is increasing at an alarming rate and IT Security Division is working with full Dutch-Bangla Bank Cards technology dedication along with other IT related divisions to detect With the ever evolving definition of technology, the most and prevent those threats. In order to ensure a more advanced EMV standard in all of its card products has secure and robust environment for the customer data, been adopted. DBBL is one of the few banks in the sub- Bank has obtained PCI DSS certification. This Division is continent who incorporated EMV for the issuance and also working to enrich the security posture of the SWIFT acquisition of both Mastercard/Visa and proprietary cards. environment. Apart from this, Bank has also purchased couple of security solutions to enhance the visibility and DBBL Cards at a Glance control of overall IT systems, network and users. The following security solutions have been deployed by IT Debit Credit Security Division recently: Nexus Reward Card Visa Platinum Card l Security Information and Event Management (SIEM) solution is implemented to centrally correlate, analyze VIP Banking Card Visa Gold Card and scrutiny all the logs from every system and to aggregate incidents across the infrastructure. The Agent Banking Card Mastercard Titanium Card division is also using SIEM as incident management, DBBL-Bangladesh Bank threat response and reporting solution. With this Mastercard Gold Card Co-Branded Card solution, IT security professionals of the Bank have the real-time view of security alerts generated by Visa Debit Card applications and hardware systems in response to both internal and external attacks. Mastercard Debit Card

ANNUAL REPORT 2020 57 Proprietary Debit Cards Virtual Card DBBL launched the Virtual Card in Bangladesh for the first time in 2011. Students seeking higher education and/or scholarships abroad are eligible to pay admission related fees and enroll in IELTS, TOEFL, GMAT, GRE online exams with this card. Membership fee of international technical and research organizations can also be paid by means of this card. Even, the developers/freelancers of mobile International Debit Cards apps and games can use ‘Virtual Card’ for payments of registration/license fees to reputed online or mobile application marketplace like Google, iTunes, Firefox, Windows, Blackberry etc., online training fees for programs such as vendor certification examination etc., any domain registration/renewal, hosting/cloud solutions etc.

Credit Cards

Remarkable Features of DBBL Credit Cards

First EMV Credit Card Fund Transfer Facility DBBL is the pioneer in bringing EMV Cardholders can transfer fund up to chip based card for the cardholders of 50% of the card limit to cardholders’ Bangladesh. The Nexus Processor Chip respective DBBL account. 1% fee will guarantees that the card cannot be copied. be charged but cardholders will enjoy a It is the most secure card in the world. maximum of 50 days grace period.

No Issuance Fee: Zero Late Payment Fee No issuance fee for Local Currency/ No late payment fee for the minimum Multicurrency Gold credit card. For due payment. Platinum & Titanium, fee is applicable at the end of each year on anniversary. Zero Cash Withdrawal Fee DBBL has the largest ATM network Lowest Interest Rate facility across the country. Cardholders DBBL offers the lowest interest rate i.e. can withdraw 50% of credit limit from 1.5% per month in the market. any DBBL ATMs without any fee.

50 Days Interest Free Period Flexible Payment Facilities A cardholder can enjoy maximum 50 Facility to pay credit card bills through days interest free period for purchase Branch, Internet Banking, ATMs, Fast through POS & e-commerce. Tracks, NexusPay app. Meet & Greet Service Buy 1 Get 1/2/3 Free Cardholder can enjoy “Meet & Greet” Cardholders can get free service at Hazrat Shahjalal International (1/2/3) lunch/dinner with buy Airport while travelling. 1 at top hotels round the year.

Free International Airport Lounge Access 5 times free access to international airport lounges in a year through Priority Pass card.

Conversion of credit card outstanding Conversion of any retail purchase Conversion of available limit (unused (full/partial) into EMI scheme. made through DBBL Nexus Credit limit) of card into EMI scheme. Card into EMI scheme. Amount BDT 20,000 + Amount BDT 10,000 + Amount BDT 50,000 + Tenure 3/6/9/12/18/24/36 months Tenure 3/6/9/12/18/24/36 months Tenure 3/6/9/12/18/24/36 months To be requested before generating next To be requested before generating To be requested before generating statement. next statement and within 07 next statement. working days from the transaction date. Interest 9% p.a.+ Processing fee 1% Interest 9% p.a.+ Processing fee 1% Interest 10% p.a.+ Processing fee 1% No early settlement fee. No early settlement fee. Early settlement fee 1.5% Auto cancellation on 90 DPD and will be Auto cancellation on 90 DPD and will Auto cancellation on 90 DPD and will fully due. be fully due. be fully due. Card Loyalty Program Acquiring UnionPay Cards

Customers are the pillars of an organization. To respect Travelers and professionals bearing UnionPay Card visit and reward loyal clients, DBBL has launched a point-based Bangladesh for a number of reasons from Thailand, loyalty scheme. Customers can earn bonus points against Malaysia, China, Korea, Japan and Singapore. DBBL their card expenditure. Customers can redeem the loyalty accepts UnionPay cards at all of its ATMs or POS points for their annual fee exemption. terminals. It also plans to issue UnionPay Cards to potential consumers in the future. 0% InstaPay

One of DBBL's most common offerings is 0% InstaPay. DBBL cardholders can purchase various products and services from selected retail outlets with monthly installments at zero percent interest. The installment ranges among various items, duration from a minimum of 03 months up to 36 months. Under this facility, cardholders can purchase furniture, electrical products, jewelry, hospital bills and so on.

ANNUAL REPORT 2020 59 E-Commerce/internet Payment Gateway DBBL offers two types of 2FA tokens for transacting at (Nexus Gateway) other banks’ gateway i.e. hardware token or software token. In addition the bank is also going to implement a The first ever E-Commerce gateway in Bangladesh called simplified SMS based 2FA. "DBBL Nexus Gateway" was launched on 3 June 2010. It gives a cardholder the freedom to shop electronically. 1,706,965

We accept Mastercard, Visa, DBBL Nexus and Rocket in 1,468,308 our payment gateway. To secure e-commerce purchases, 1,352,361

3D secure facilities (Visa Secure and Mastercard Identity 1,099,143 1,111,222 Check) have been implemented.

2016 2017 2018 2019 2020 Issued Debit Card

25,308

17,603 17,340

13,739

10,610 The following are some of the services that are available l Online purchase of goods and commodities l Utility bill payments 2016 2017 2018 2019 2020 Issued Credit Card l Tuition fee payments l Airtime purchase Highlights l Hotel Bookings, Tours & Travels l Purchase of bus/train/cinema/airline tickets System Upgraded to Comply with PCI DSS l Domain hosting etc. All software have been updated to their latest versions Second Factor Authentication (2FA) for all as part of PCI DSS compliance. Following are some of the E-Com Transactions changes that were made: l Oracle Transparent Data Encryption method (TDE), For the first time in Bangladesh, DBBL has launched 2FA l Pseudo-PAN’s instead of real, facilities for secure e-commerce transactions. In this process, the customer is expected to enter a secret code l Cryptographic control of the sensitive data, (which is different for each transaction) on the Internet at l Access right management, the time of e-com transaction, which verifies authenticity l Encryption key management, of the cardholder and protects fraud. l Network protection procedures,

l Audit Trail etc. Prepaid Card

DBBL will issue prepaid cards very soon where the amount deposited by the cardholder will be set as an available limit. This form of card can be given for Hajj, study, research, ride, etc. Customers can immediately “Mastercard World” card for its valuable customers. receive a dual currency card from a branch against their Cardholders can enjoy special guest status in Luxury passport, visa, ticket, etc. More forms of cards like Payroll Hotels worldwide. Special facilities include well rounded Card, Travel Card, Femina Card are in the line to amaze protection like – auto rental collision damage waiver, customers. emergency card replacement and shipment globally, Zero Liability Policy i.e. you won’t be held responsible for unauthorized transactions made with your “VISA Signature” and “Mastercard World” card. Issuance of UnionPay Diamond Card

A good number of customers visit Thailand, Malaysia, China, Korea and Singapore each year where UPI (UnionPay) cards are widely accepted. Dutch-Bangla Bank Limited has planned on instigating “UnionPay Diamond” card, a top tier card product from UnionPay Payment scheme. Cardholders will find same level of premium facilities as other premium branded cards. Bangla QR (National Standard for QR Based Payment in Bangladesh)

Bangla QR is the national interoperable QR approved by Bangladesh Bank. With this common Bangla QR, the use of multiple QR codes from different payment networks for customers will not be needed. Similarly, merchants would only need to display one Bangla QR code at their storefront. It will help rendering the payment process quicker, easier and seamless. Major Benefits of Bangla QR: Upcoming Card Products: l Pay Merchant by scanning QR l Pay Merchant by NFC Contactless (NFC) Dual Interface Card l Person-to-Person Money Transfer

DBBL will be releasing the most innovative "Contactless l Cash Withdrawal from QR merchant point (NFC) Dual Interface Card" in the near future. The card would have both contact and contactless services. In addition to its basic feature such as POS, ATM and e-com transactions, this card can also be used at NFC (near field communication) capable devices. Small ticket transactions such as – train tickets, bus fares, toll charges along with a small amount of shopping can be made with this. It will help both Cardholder and merchant to manage precious time with the innovative "Tap & Go" facility and in a smart manner. Issuance of VISA Signature & Mastercard World Card

You will be soon proudly carrying the card that provides unparalleled industry leading benefits. Dutch-Bangla Bank Limited is going to issue “VISA Signature” and

ANNUAL REPORT 2020 61 Alternate Channels in Dutch-Bangla Bank l Cash withdrawal by mobile phone - Rocket DBBL Mobile Banking (Cardless Transactions) ATM Network l Cash withdrawal by Agent Banking Card Automated Teller Machine (ATM): l Balance Inquiry

One of the most prominent services provided by the Bank, l PIN change that makes the customers attracted to stay connected to l Fund transfer (within own account and third-party the Bank, is ATM service. DBBL is the icon in the Banking account within DBBL) industry in providing ATM related service to the people l Mini statement of the country. Though there are lots of challenges, still l Western Union Remittance pull DBBL, with consistent ATM uptime, is providing the best possible service to the people of Bangladesh and l Utility Bill Payment helping the government in achieving its goal of digital l And more to come in near future Bangladesh. DBBL sets up ATMs as per demand from the customer of As of 31st December 2020, Bank has installed 4,862 a certain area. Bank focusses on the convenience of the ATMs through 1190 Fast Tracks, 200 ATM Booths and 7 customers, which eventually increases business demand Electronic Student Booths (ESB). With inclusion of regular rapidly. Usually, as per guidance from the management, value proposition DBBL ATM presently offers the following outstanding services: ADC Division sets up ATM Booth, having, 1 or 2 ATMs, or Electronic Student Booth (ESB) having facility to collect l Accepts Nexus, VISA, MasterCard, Diners Club, the tuition / admission fees with 2 or more ATMs & Discover and Union Pay cards CDM, or Fast Track with 2 or more ATMs & CDM. It is to l Accept other bank local cards through National be mentioned that, permanent employees of the Bank Payment Switch (NPS) are posted at FT and ESBs to provide smooth customer l Cash withdrawal by EMV debit, credit or pre-paid support. cards

Outside View of Fast Track Outside View of ATM Booth

Some ATM related statistical data are stated as under: Division wise coverage - ATM booth

Dhaka Ctg Sylhet Rajshahi Khulna Rangpur Barishal Mymensingh Total

124 25 12 15 12 4 2 6 200

Transactional Data at DBBL ATMs

Year 2019 2020

Sl Volume of Txn Volume of Txn Particular No. of Txn No. of Txn No. (In Million Tk.) (In Million Tk.)

1 DBBL 83,073,908 615,459.98 74,500,566 604,157.61

2 MasterCard 227,659 1,982.60 193,087 1,853.72

3 Bangladesh Bank 276,653 2,013.95 256,924 2,223.55

4 VISA 1,764,246 13,425.20 2,039,886 16,661.10

5 Union Pay 5,560 62.02 7,999 81.16

6 Mobile Banking 17,974,150 79,783.76 24,695,493 125,838.91

7 NPSB 9,143,162 74,832.81 10,232,260 94,755.33

8 Agent Banking 5,981,927 63,431.94 7,074,897 82,739.30

9 Total 118,447,366 850,992.86 119,001,112 928,302.32

ANNUAL REPORT 2020 63 Number of Cash Withdrawals (in Million) Volume of Cash Withdrawals (in Billion) 928.3 850.99 118.45 119 108.52 725.15

90.58 583.29

70.74 449.64 58.76 54.88 351.01 373.09 42.27 260.46 30.89 35.4 170.49 203.78

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

The above table doesn’t only shows some figures, it also shows the faith and confidence people of the country have with us. Fast Track (FT) DBBL has ensured its presence at the doorstep of the people all around the country including the remote locations; and Fast Tracks has played the leading role in this regard. Customers can now avail modern banking service easily and comfortably within their reach. Bank is now privileged to serve the people of almost all the Upazillas of the country. At the end of 2020, 1190 Fast Tracks were live locating at 438 Upazillas and 64 districts of the country.

Two/three trained officers are posted at each FT who works from 7:00 am to 11:00 pm every day on roster basis, including Fridays and Saturdays, to serve the valuable customers of the Bank. However, automated activities like cash withdrawal, balance inquiry, fund transfer and utility payment facility through ATMs are available at FTs from 6:00 am to 12:30 am daily.

Inside view of Fast Tack Outside view of Fast Tack

Outside view of Fast Tack

ANNUAL REPORT 2020 65 Glimpse of the banking facilities that are provided at FT are 9. Provide Account Statement to the customers. stated as under: 10. KYC input of Rocket Customers in Rocket System 1. Cash withdrawal through ATM. 11. Rocket account activation/ deactivation, temporary 2. Cash or Cheque Deposit at Deposit Machine. hold/debit & credit restriction 3. Provide all types of banking information to the 12. Assist in other Rocket services, i.e., close rocket customers. accounts, account information etc. 4. Assist customer in opening various type of Bank 13. Customer awareness on DBBL Products. accounts including: 14. All other task as and when required relevant to • Core Banking Account banking operation. • Rocket DBBL mobile Banking Account and Officer attended service at Fast Track • DBBL Agent Banking Account. Customers of different professions are facilitated 5. Assist customer regarding SME/Retail loan from significantly by the services provided through Fast Track. DBBL. The popularity of Fast Track service is increasing day by 6. Assist customer regarding Credit Cards. day due to the nature and types of services through it. Customers are getting banking facility at their suitable 7. Provide Debit Cards, PIN to the customers. time. Also, it plays a significant role in the security aspect, 8. Assist customer regarding Internet Banking, SMS or considering the ever increasing digital security alert Alert services. around the globe.

Some FT related data are stated as under Division wise coverage – Fast Track

Dhaka Ctg Sylhet Rajshahi Khulna Rangpur Barishal Mymensingh Total 534 185 72 101 98 85 54 61 1190

Divisionwise coverage - Fast Track

5% Dhaka 5% 7% Khulna

Ctg 8%

Sylhet 45%

Rajshahi 8% Rangpur 6% Barishal

16% Mymensingh Yearwise Growth - Fast Track

1190 1100

900 780 708

516

365

235 261 153 51 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Electronic Student Booth (ESB) (CRM) customers can make deposit and also withdraw cash instantly. With online CDM, the deposited cash of ESBs are set up at the campuses of various educational the customers will be credited to the customer’s account institutions, containing two or more units of ATMs and instantly. This would be a great revolution in performing one unit of deposit machine. Students can withdraw real time digital banking in Bangladesh. & deposit cash and pay tuition fees/ exam fees for the institute and use DBBL internet banking facilities from 2 Banking Service & Support during Covid-19 computers installed at the ESB. Also, a cash counter with Pandemic two cash officers is set up to collect tuition fees. It has been a long year where the whole world has Sl. No. Name of ESB been facing challenge to continue regular operational activities because of the COVID-19 pandemic. In these BAF Base Bashar Shaheen School & College, A Tejgaon, Dhaka difficult circumstances, especially during the country wide lockdown period, DBBL ensured and provided full-fledged B BAF Base Matiur Shaheen School & College, Jashore service through the Fast Tracks and ensured maximum BAF Base Pahar Kanchanpur Shaheen School & uptime, including availability of cash at ATMs, all through C College, Mirzapur, Tangail the period. DBBL employees, including FT officers, risking BAF Base Bangabandhu Shaheen School & their lives, performed regular duty and ensured standard D College, Kurmitola, Dhaka customer service during the period. BAF Base Jahurul Shaheen School & College, E Recruitment & Skill Development Chattogram BAF Base Shamsher Nagar Shaheen School & Bank have 2/3 officers posted at each Fast Tracks. F College, Moulvi Bazar Currently, the ATMs at FTs are kept operational from 6:00 am to 12:30 am every day and the FT officers perform G Sher-e-Bangla Agricultural University, Dhaka their duty from 7:00 am to 11:00 pm (office timing is 9:00 am to 10:00 pm where two officers are posted). However, Online Cash Recycling Machine (CRM)/ Bank has started deploying Collapsible gate at the FTs, Online Cash Deposit Machine (CDM) keeping one ATM outside of the gate. The ATM outside of DBBL is in the process of procuring Online Cash Recycling the gate is live for the customers 24 hours a day and the Machine (CRM)/ Online CDM. Bank has already procured ATMs inside the collapsible gate are live till the officers 25 units of Online CDM, on pilot basis. Bank has also are present at the FT. This ensured that the customer issued work order for 2,000 units of Online Cash Recycling can get ATM service from the FTs 24 hours a day. Till 31st Machine (Online CRM). These could be setup in Branches December, 2020, collapsible gate has been installed at 490 and Fast Tracks. With Online Cash Recycling Machine units of Fast Track.

ANNUAL REPORT 2020 67 Bank recruits skilled permanent employees under Mobile ATM Van ADC Human Resource Policy, after extensive scrutiny. DBBL is providing Mobile ATM Van service, since 2010. They are now contributing significantly in the business The Mobile ATM Vans that move across the country with development of the Bank. Now they are also assisting two ATMs in each ATM Van, to provide cash withdrawal to increase the retail loan portfolio of the Bank and service to the customers, where there is no ATM facility. increasing the sale of credit cards. Statistics of recruitment During the salary period, both vans remain very busy in and manpower status of the FTs are stated as under: providing service to millions of customers. In addition to that, mobile ATM vans participate at important fairs at New Sl Year No. of Employee different occasions across the country. Recruitment 1 2018 232 1661 2 2019 1305 2866 3 2020 153 2950

Because of Covid-19 pandemic, Bank has not recruited new FT officers, rather focused on providing full length banking service to the customers with existing work force. As per guideline and instruction from the management, Bank disbursed incentives and medical support for the FT DBBL Mobile ATM Booth officers.

At the time of joining, all the new employees are given Card Less Transaction from Rocket- DBBL foundation training, which covers all the basic topics Mobile Banking related to their banking activities, as well as Alternative Customers of Rocket DBBL Mobile Banking can withdraw Delivery Channel. cash from the DBBL ATMs without the need of any cards. The service is very popular and convenient for the Also, the already appointed officials were given customers as they don’t have to carry any plastic card specialized training on various products of DBBL and to withdraw cash; they only have to carry their mobile other aspects regarding the services they provide to phone with the SIM having the Rocket account. Their the customers. Also, the FT officers were given regular transactions are authenticated with both PIN at ATM and updated instructions through online meetings. PIN at AVR calls, keeping the customers safe and secured. It is to be mentioned that, fresher and spot, as and when ATM uptime required, trainings were arranged on different occasions. Although it is an enormous task and requires a planned The officials are also provided with circulars, guidelines, and effective effort to keep all the ATMs up and running product overview etc. time to time. for the customers, but still, DBBL has managed to provide Cash Deposit Machine customer satisfaction with 97% uptime of the ATMs. The proper use of online ATM Monitoring Software has played Bank has also setup offline cash deposit machines, which a significant role in keeping the uptime between 97% and are operated with the help of FT officers, from 7:00 am 99% throughout the year. All stakeholders that include to 10:00 pm every day. Customers can deposit cash and cash feeding vendors, ATM servicing vendors, construction cheque and can pay DBBL credit card bills through these vendors, link vendors, etc. are now habituated to use the offline CDMs. The deposits are collected by the cash monitoring tool and they are always concerned to keep the collection vendors and later on posted on the customer ATMs up and running. The Bank has been playing a pivotal account/credit card on the same or next working day. role among concerned parties and vendors to achieve a Statistics of no. of CDM and no. of envelope deposited is common goal of ATM Uptime. Below is the yearly average stated as under: uptime of recent three years.

No. of CDM No. of Envelope Deposited Sl Year ATM Uptime % 1 2018 96.87 2019 2020 2019 2020 2 2019 96.26 944 1037 5,677,244 4,045,453 3 2020 96.57 Cash Sorter Machine quality services to our valuable customers since 2011. The Call Center runs by 24 X 7 X 365 basis i.e. it serves To ensure that the customers get good quality notes from our valued customer at any time and every time within the ATMs, Bank has deployed 140 cash sorting machines the Calendar. Our Call Center short code ‘16216’ which has at different branch locations where cash is sorted for the ATMs. Now the customer claim on soiled notes, notes been a well-acquainted number to our customers. It has with tape, notes with big holes, fake notes, etc. and cash become a popular service among our valuable customers jam calls has almost reduced to NIL and it has also raised to meet their day to day banking needs. Call Center has the performance of ATM uptime significantly. received around 5.04 million calls in the year of 2020. We have received around 61% more calls than the normal period during the pandemic period with an average call waiting time of 38 seconds and an average call answered rate of 86.87% during the year 2020. Call Center has run with its full capacity during the entire period of pandemic situation of COVID-19 to ensure smooth service delivery to our valued customers. Some Call Center data for the year 2020 is stated as under View of the Cash Sorting Machine

View of the Cash Sorting Machine Call Center – 16216 DBBL has setup the largest Call Centers among the Banks of the country. DBBL Call Center has been providing

Call Type 2019 Call Type 2020

0.15% 0.15% 9.67% 19.57% Others

Complaint

Request 56.98% 46.39%

Query

23.31% 43.80%

ANNUAL REPORT 2020 69 Top 10 Reasons of Call

MB send money related query 53264

Account transaction query 73753

NexusPay Registration Rejection 80952

MB account opening procedure 101470

NexusPay Installation Process Query 108336

NexusPay Verification Code Request 146675

MB related queries 200038

MB a/c activate 232322

MB account PIN Reset 314367

NexusPay Registration Approval 698965

Call Trend:

Call & Waing Time Trend 4000 90 85.55980874 3500 80 72.57767123 3000 70

Thousands 60 2500 50 2000 37.37 40 1500 29.21139726 30 1000 20 500 10 6.08 0 0 2016 2017 2018 2019 2020

Landed Calls Answered Calls Avg. waing me (sec.) Latest cutting-edge multimedia Contact Center The bank is in the process of upgrading the present Contact Center systems and the infrastructure. After up-gradation, the capacity will be increased by 130% along with a bunch of new features such as, easy access, customized services, flexible service options and rich service portfolio through latest cutting-edge Multimedia Contact Center. DBBL Technology Milestones:

03 Jul 2004 DBBL started on-line banking at 2 branches (Local Office and Motijheel Foreign Exchange Branch)

03 Jul 2004 DBBL started Internet Banking for the first time in Bangladesh

26 Jul 2004 DBBL launched Debit Card for the first time in Bangladesh

07 Aug 2004 DBBL installed 1st ATM at DBBL Local Office

25 Nov 2004 DBBL installed 1st off-site ATM at Rifles Square, Dhaka

17 Dec 2004 DBBL completed migration of all the 17 branches into Core Banking System

03 Jan 2005 The honorable finance minister officially inaugurated the on-line banking services of DBBL

11 Sep 2006 DBBL launched sms & Alert Banking services for the first time in Bangladesh

25 Dec 2006 DBBL installed 100th ATM at Landmark Centre, Gulshan-2

18 Apr 2007 DBBL installed 1st POS terminal at Solna, Kalabagan, Dhaka

30 Oct 2008 DBBL launched ‘ATM on Mobile Van’ for the first time in Bangladesh

27 Nov 2008 DBBL issued EMV chip card for the first time in Bangladesh

31 Mar 2009 DBBL upgraded all the ATMs to acquire EMV chip card for the first time in Bangladesh

11 Sep 2009 DBBL upgraded all the POS terminal to acquire EMV chip card for the first time in Bangladesh

20 Jan 2010 DBBL installed 1st Fast Track (FT) in the Gulshan-2 Circle, Dhaka

04 May 2010 DBBL signed agreement with Bangladesh Air Force for providing Retail Banking services (Salary disbursement and school fee collection). BAF selected DBBL from 7 banks after thorough evaluation. 03 June 2010 DBBL launched e-commerce payment gateway (Nexus Gateway) for the first time in Bangladesh

07 Oct 2010 DBBL integrated with BACPS of the Bangladesh Bank as the first Bank

10 Oct 2010 DBBL lunched 1000th ATM and 50th FT at Chattogram

ANNUAL REPORT 2020 71 22 Sep 2010 DBBL launched first Electronic Student Booth (ESB) at the Eden Mohila College, Dhaka

01 Feb 2011 DBBL launched Call Center / Contact Center

28 Feb 2011 DBBL integrated with BEFTN of the Bangladesh Bank as the first Bank

31 Mar 2011 DBBL launched mobile banking (ROCKET) for the first time in Bangladesh

26 Apr 2012 DBBL installed 2000th ATM at the FT of Savar Cantonment, Dhaka

26 Dec 2012 DBBL is the first bank in Bangladesh to join NPSB of the Bangladesh Bank for ATM

13 Apr 2013 DBBL signed agreement with Dhaka Metropolitan Police for providing Retail Banking services (Salary disbursement and school fee collection)

22 Jul 2013 DBBL launched 2FA system for its internet banking and Nexus Gateway users for the first time in Bangladesh

16 Dec 2014 DBBL launched Chip-based VISA Platinum card for the first time in Bangladesh (some banks started mag-stripe Visa Platinum Card earlier)

16 Dec 2014 DBBL launched MasterCard Titanium card for the first time in Bangladesh

14 Jan 2015 DBBL Launched Proprietary Chip-based EMV NEXUS card using EMVCo certified white label application “PURE” for the first time in Bangladesh

19 Jan 2015 DBBL Launched Pilot for the Agent Banking (Biometric Banking)

12 Aug 2015 DBBL is the first bank in Bangladesh to join NPSB of the Bangladesh Bank for POS

18 Oct 2015 DBBL is the first bank in Bangladesh to start ABMT (Account Based Money Transfer) of the Western Union in Bangladesh

19 Nov 2015 DBBL is the first bank in Bangladesh to launch Mobile Apps for the Mobile Banking Services

Jun 2017 ATM Transaction Crossed 50 Thousand Million in a Month for the first time in Bangladesh

22 Oct 2017 DBBL Launched NexusPay (A mobile App for card tokenization and QR/NFC payment) for the first Bank in Bangladesh

06 Mar 2018 DBBL implemented Fraud Management Solution of CyberSource, Inc. (a wholly-owned subsidiary of Visa Inc.) to prevent fraudulent ecommerce acquiring transactions. 20 Oct 2018 The honorable ICT minister officially inaugurated the Tier-4 Data Center of DBBL. This Dumni Data Center is the First Tier-4 Data Center of the country.

18 Mar 2019 Setup of synchronous active-active mode between two data centers for the first time in Bangladesh

19 May 2019 Set ATM live with Bangabandhu Satellite – 1 (BS-1) for the first time in Bangladesh

20 Jul 2019 Coverage of ATM network at all the 64 districts

06 Oct 2019 Number of Fast Tracks of DBBL crossed 1000

28 Nov 2019 Introduction of Easy Pay / Easy Loan / Easy Buy installment payment facility for the Credit Cardholders.

2 Feb 2020 DBBL integrated API of Emirates India Intl. Exchange in Remittance Management System.

22 May 2020 DBBL developed Bulk account opening, disbursement and product migration for Garments and PMO.

28 Jun 2020 Up-gradation of Latest Call Center solution

15 Sep 2020 1000th Offline CDM went live

21 Sep 2020 Test run of Core Banking Application from Data Center-2 (DC-2)

16 Nov 2020 PCI DSS Certification

20 Nov 2020 DBBL developed Tap and HOLD transaction in Rocket App.

22 Nov 2020 DBBL availed Electronic Toll Collection System in Muktapur Bridge, Munsiganj.

05 Dec 2020 Live operation of Core Banking, Mobile Banking and Agent Banking Applications from Data Center-2 (DC-2)

26 Dec 2020 DBBL developed e-KYC in NexusPay.

ANNUAL REPORT 2020 73 agreements signed

Fast Track Lane Toll collection through Rocket & NexusPay has launched at Bangabandhu Bridge (Jamuna Bridge). Mr. Mohammad Belayet Hossain, Honorable Secretary of Bridge Division & Executive Director of Bangladesh Bridge Authority (BBA) formally inaugurated the Electronic Toll Collection (ETC).

Dutch-Bangla Bank and Bangladesh Home Economics College signed an agreement for collection of tuition fees through DBBL’s digital delivery channels- Rocket, NexusPay, Nexus Gateway and Agent Banking.

ANNUAL REPORT 2020 77 Dutch-Bangla Bank signed an agreement with Delta Life Insurance Company Limited for online collection of insurance premium through DBBL’s digital delivery channels- Rocket, NexusPay, Agent Banking and Nexus Gateway.

Dutch-Bangla Bank signed an agreement with Dhaka Electric Supply Company Limited (DESCO) for recharging prepaid meters through POS Vending from certain Rocket Agents of Dutch-Bangla Bank. Dutch-Bangla Bank signed an agreement with Dhaka City College for online collection of tuition fee through DBBL’s digital delivery channels- Rocket and NexusPay.

Dutch-Bangla Bank signed an agreement with Eden Mohila College, Dhaka on November 02, 2020 for online collection of tuition fee through DBBL’s digital delivery channels- Rocket, NexusPay, Agent Banking and Nexus Gateway.

ANNUAL REPORT 2020 79 Dutch-Bangla Bank signed an agreement with Notre Dame College, Dhaka for collection of tuition fees & students’ clubs fees through DBBL’s digital delivery channels- Rocket, NexusPay and Agent Banking.

Dutch-Bangla Bank signed an agreement with Titas Gas Transmission and Distribution Company Ltd. for collection of Gas bills from Titas Gas customers through DBBL’s digital delivery channels- Rocket, NexusPay and Agent Banking. Dutch-Bangla Bank signed an agreement with Viqarunnisa Noon School & College for collection of tuition fees through DBBL’s digital delivery channels- Rocket, NexusPay, Agent Banking and Nexus Gateway.

Dutch-Bangla Bank signed an agreement with Jiban Bima Corporation (a state owned insurance company) for online collection of insurance premium and disbursement of benefits & salary through DBBL’s digital delivery channels- Rocket, NexusPay, Agent Banking & Nexus Gateway.

ANNUAL REPORT 2020 81 sustainability report

OVERVIEW education, health and hygiene , clean and pollution free environment and above all a society based on morality and DBBL is committed to building a more sustainable bank, ethics make all our lives worth living “. a progressively responsible company and conducting business in an increasingly sustainable way. In the process We have been conveying to our customers since inception to improving sustainability, impacts of our long-term and in 1996 that we are “Your Trusted Partner”. We are short-term decisions are adequately considered in our committed to providing fair & transparent banking business decisions. We feel proud that our largest digital experience to our customers in strengthening confidence banking platform in the country including Branches, ATMs of customers and other stakeholders of the bank on a and Fast Tracks, NexusPay, Debit and Credit Cards, our sustainable basis. mobile banking & agent banking operations underpinning widespread financial inclusions and our CSR programs We are ensuring our contribution to the economic including the largest private sector scholarship programs development of the country by providing loans in are showing the difference we are creating for our clients the productive & priority sectors particularly in SMEs and communities in general. extending financial inclusion and inclusive growth.

DBBL continues to uphold its core values and pursue its As an environmentally responsible bank, DBBL complies vision of dreaming a Bangladesh where “ science and with environmental standard while financing industrial

ANNUAL REPORT 2020 85 projects. Projects with likely adverse impact on A further extension of banking for mass people to reach environment are strongly discouraged by DBBL. even the remotest corner of the country, DDBL has been operating agent banking services since 2015. DBBL has established an international standard Environmental & Social Management System (ESMS) COVID 19 IMPACT that is supported by FMO, Netherlands with technical assistance from F.I. Konsult from Czech Republic. As part The ongoing pandemic of COVID-19 emerged out of of the capacity development program for implementing, Wuhan City, China in late 2019 has become a global the bank has launched the software “Environmental & concern since January 2020 and then it has spread to Social (E&S) Categorization Tool (Environmental Risk worldwide. Rating)” as per ERM guidelines of Bangladesh Bank and Bangladesh is also facing an overwhelming outbreak international best practices. of COVID-19 where the first three Identified cases of DBBL has been pioneer in our banking industry that cares COVID-19 were reported on March 8, 2020. for the society. It has been operating the largest private Like other countries, the immediate response of the sector Social Cause programs in our banking sector. It Bangladeshi government to prevent the spread of has been intensifying its resources and efforts on a continuous basis to reach the distressed & needy people COVID-19 was to shut down the economy. In response to of the society in order to bring smile on their faces and to COVID-19, on March 16, 2020, the government declared improve their health and educational standard and overall the closure of all educational institutes, later, all public quality of life. and private offices remained closed from March 26, 2020, to May 30, 2020, except for emergency services; the government stopped public transportation and limited banking services also.

Health To sustain the economy of the country, the Bangladesh Economy Culture Trade government has reduced the restrictions from public life Values Equitable from May 31, 2020, by lifting shutdown and opening public Business development Accessibility and private offices, shopping malls, and starting limited Employment Society circulation of public transports, though the COVID-19 cases Sustainable Liability are in a growing trend.

Taxes History Viable The COVID-19 pandemic has forces the economic activities Bearable of the world to come at halt. To save the world from a devastating recession, different countries has announced Biodiversity stimulus package for various sectors. Environment Like the world, on 25 March, the Government of Air/Water Quality Weather Bangladesh was first announced a bailout/stimulus Food package of BDT 50 billion for export-oriented industries to disbursed in the form of salaries and wages for employees and workers. Later, the government has announced We are continuing a massive and expanded scholarship several stimulus packages and the government so far program since 2011 which provides yearly scholarships to (February’2021) approved total 23 stimulus packages more than 19,000 students mainly studying in HSC and of BDT 1240 billion, which is equivalent to 4.44% of the graduation levels. country’s GDP.

DBBL has been operating mobile banking services since Although Bangladesh economy faced COVID-19 2011 to reach the unbanked poor people of the country pandemic-induced challenges in all economic sectors, to bring them under financial services network, who are but managed a 5.24 percent real GDP growth rate in deprived from traditional banking services, living mostly in FY20, though significantly lower than a record high rural and remote areas. of 8.15 percent growth rate in FY19. The economy of Bangladesh witnessed an impressive GDP growth trend ECONOMIC CONTRIBUTION in last decade, maintaining more than 7.0 percent yearly growth during FY16-FY19, breaking the phase of yearly 7.0 Savings, investments, employment generation, productions, distribution and consumptions are essential percent growth mark in FY16. The contraction in GDP for part of any economic system. The Bank being a financial FY20 stemmed mostly from the supply-side shocks, intermediary plays a significant role in this process suffered mainly by pandemic induced disturbances in by mobilizing savings & other resources, allocating the industry sector, particularly by substantial production such resources to productive investments, local & loss in large and medium scale manufacturing output. international trades and consumptions. In the process the Bank is directly or indirectly creating a lot of wealth While the industry sector had been contributing to GDP by accelerating economic activities & growth. By offering with double-digit growth rates since FY16, the growth its unique products & services, Bank is engaged in rate in this sector sharply came down to 6.48 percent in maximizing savings, investments, productions, trading, FY20. The industry sector decelerated to low but positive employment, consumptions etc to maximize economic growth and welfare of the society. Therefore, banking growth rates during the first three quarters of FY20, company is holding a key position in economic and social while the growth of the industry sector fell to a negative development of a country. territory reflected in the growth of Quantum Index of Industrial Production (-14.98 percent) during Q4FY20. DBBL is a corporate citizen. It cannot act on its own without its stakeholders. The stakeholders as a whole The service sector, which also impacted by the pandemic help, direct and monitor the Bank to perform its but less severe than the industry sector, grew by 5.32 operations in an effective way to create and maximize value for the economy & society. percent in FY20 against 6.78 percent in FY19 as most of the leading sub-sector activities such as wholesale Shareholders provide the vital equity capital, depositors and retail trade activities, transport, storage and & lenders put their money in the Bank, and borrowers take the credits for production, trading or consumptions, communication, financial intermediations, education, employees put their services to serve the customers, and real estate, renting and business activities waned due government, Bangladesh Bank and Bangladesh Securities to lockdown measures. and Exchange Commission provide legal & regulatory framework, infrastructure, economic & business On the other hand, the agriculture sector maintained environment etc. to ensure smooth operations of banking solid growth even amid the COVID period on the back activities with transparency and accountability. of the healthy production of most of the cereal and With the support & resources from various stakeholders, non-cereal crops aided by the timely availability of DBBL conducts its businesses to provide services to the inputs, favorable weather conditions at the time of customers and the society at large and in the process cultivation and harvesting. creates and maximizes value for all its stakeholders in a fair, transparent and ethical way. Maximization of Like the world and the country in general, Dutch-Bangla profit cannot be the only objective of the Bank, rather Bank has also affected by the ongoing global COVID maximizing benefits & value for all stakeholders in a fair pandemic. The business growth as well as revenue, and balanced way thereby maximizing welfare of the operating profit of the bank for the year 2020 was economy & society as a whole is the objective of DBBL. However, profit is also important to give satisfactory impacted. Moreover, the bank has taken different returns to all the stakeholders and to ensure sustainable measure to prevent the spread of COVID-19 and extent operations, growth and long- term solvency of the Bank its support and cooperation to its employees, clients, which in turns enable the Bank to contribute in a greater society and country in the form of providing incentive way to the economy & society. as per Bangladesh Bank guideline, roster job duty, PPE As DBBL is dependent on its stakeholders to continue its & mask, hand sanitizer etc to the employees, disbursed operation and wealth creation activities, therefore, wealth stimulus fund of the Government and provided banking created by the Bank is also distributed to its various service during lockdown period to clients, donated fund stakeholders. Shareholders get dividends, depositors get to Government and social welfare organization to prevent interest, employees receive salaries and government gets the spread of the COVID. tax, VAT etc.

ANNUAL REPORT 2020 87 Measures taken by DBBL to maximize value for its stakeholders and to increase its contribution to the economy & society in a sustainable way DBBL as a responsible citizen has taken effective measures to continue its operations in a sustainable way thereby to increase its contribution to the economy & society. DBBL has undertaken due process, procedures and systems in compliance with best practices of corporate governance, risk management, regulatory requirements, environmental issues, staff welfare, customer services and business practices to strengthen its ability to serve the stakeholders and society increasingly in a greater way. Creation of revenues and its distribution by DBBL The revenue, operating profit of the bank for the year 2020 was decreased mainly because of interest rate cap on lending (Max-9%) and ongoing global COVID pandemic affected at the beginning of 2020. The lending interest cap resulted in lower net interest income than previous year where as global COVID pandemic impacted the business growth of the bank in year 2020. Taka in Million Period (For the year ended 31 December) Particulars 2020 2019 2018 2017 2016

Creation of revenues

Interest income 22,195 25,544 21,480 16,529 15,366

Investment income 7,144 3,412 2,025 2,027 2,072

Commission, exchange and brokerage 1,726 1,929 2,178 1,918 1,545

Other operating income 3,615 3,821 3,533 3,076 2,351

Total revenue 34,680 34,706 29,216 23,550 21,333

Distribution of revenues

To depositors and lenders as interest on 8,065 7,760 6,592 5,040 5,402 deposit & borrowing etc

To employees as salary and allowances 5,234 4,819 3,990 3,530 3,049

To suppliers for goods & services and other 8,541 8,690 7,966 7,446 5,787 expenditures

Depreciation and repair of bank's assets 2,338 2,177 1,975 1,851 1,573

Loan loss provision and other provisions 840 3,824 1929 390 2288

To Government as income tax 3,853 3,283 2,870 3,077 2,150

To Deferred tax 310 -188 -308 -239 -691

To statutory reserve fund - - - 1059 647

To Shareholders- as retained earnings 5,499 4,341 4,202 1,397 1,128

Total 34,680 34,706 29,216 23,550 21,333 Economic Value Added (EVA) Statement Economic Value Addition by DBBL Economic value added (EVA) is a key performance indicator to measure profitability of a Bank as compared to cost of equity capital. It indicates how much excess value has been created by the Bank for its shareholders after deducting the minimum rate of return required by the shareholders i.e. cost of equity. DBBL has been consistently able to deliver higher EVA to its shareholders: Taka in Million Period (For the year ended 31 December) Particulars 2020 2019 2018 2017 2016 Invested fund by the shareholders Shareholders’ equity 32,257 27,443 23,086 19,482 17,673 Add: Provision for loans and off-balance sheet 8,602 8,651 8,347 7,873 7,096 exposures Add: Deferred tax provision (net) 1,875 1,877 1,623 1307 771 Total invested fund by the shareholders 42,733 37,971 33,056 28,662 25,540 Average invested fund by the shareholders [A] 40,352 35,513 30,859 27,101 24,538 Earnings for the year Profit before taxation 9,661 7,436 6,764 5,293 3,234 Add: Provision for loans and off-balance Sheet 840 3824 461 390 2288 exposures and other provisions Less: Loan written-off 999 3,447 1469 750 357 Less: Cash taxes paid 4,164 2,841 2,246 2,302 2,642 Earning for the year [B] 5,337 4,972 3,510 2,632 2,522 Cost of equity (On the basis of the weighted average annual yield of 364-day treasury bills plus 2% risk premium) [C] 6.9% 8.20% 6.20% 6.30% 7.00% Cost of average equity [D= A X C] 2,780 2,907 1,924 1,694 1,705 Economic value added [B – D] 2,557 2,065 1,586 938 817 Market Value Added (MVA) Statement Market Value Added (MVA) is the difference between the total market value (Based on the price quoted in the main bourse of the country) of equity and the total book value of equity of the Bank as at the reporting date. The higher MVA means that the market is confident in sustainable and progressive business & profit growth and cash flows of the Bank. The following table shows that DBBL has been able to earn confidence of the shareholders & market in its ability to deliver higher value to the shareholders in future years:

Taka in Million

Period (For the year ended 31 December) Particulars 2020 2019 2018 2017 2016

Total market value of the equity 35,750 35,650 28,880 30,620 23,340

Less: Total book value of the equity 32,257 27,443 23,086 19,482 17,673

Market value added 3,493 8,207 5,794 11,138 5,667

ANNUAL REPORT 2020 89 Contribution to the national exchequer DBBL made significant contribution to the government in boosting its revenue collection. As per the prevailing law of the country, the Bank being a corporate citizen pays tax and VAT on its own income. Besides, the Bank deducts income tax, VAT and excise duty at source from clients, depositors and suppliers, and deposits the same to the national exchequer. During the year 2020, the Bank contributed Taka 7,945.2 million to national exchequer as compared to Taka 6,975.5 million in the previous year. Taka in Million Particulars 2020 2019 Income Tax Corporate Income tax 3,644.6 2,774.2 Tax Deducted at Source from Suppliers 2,013.6 2,255.8 Tax Deducted at Source from employees 129.2 165.7 Tax Deducted at Source from dividend 110.8 - Sub-total 5,898.2 5,195.7

Value Added Tax (VAT) VAT on Banking Services 568.8 799.0 VAT Deducted at Source from suppliers 884.9 489.6 Excise Duty 593.3 491.2 Sub-total 2,047.0 1,779.8 Total 7,945.2 6,975.5

Income Tax 129.2 110.8

2,013.6

3,644.6

Corporate Income tax Tax Deducted at Source from employees Tax Deducted at Tax Deducted at Source Source from Suppliers from dividend Value Added Tax (VAT)

568.8 593.3

884.9

VAT Deducted at Source Excise Duty from suppliers VAT on Banking Services

Banking Automation online purchase and other services gradually. All these have been possible with the help of a well-trained, highly In today’s global business scenario, particularly in banking professional work force and a strong IT infrastructure. sector, technology plays a vital role in executing all sorts of To run all the services smoothly DBBL has invested a customer friendly banking operations with cost-effective substantial amount in developing its IT backbone. services. In this sector, competition is rising steadily day by day. As a result, technology has become an aide of Automated Teller Machine (ATM) necessity rather than option in financial institutions just DBBL started its ATM/POS service back in 2004 and to satisfy the growing service demand of the customer became the leader soon. The ever expanding DBBL ATM in a cost effective way. Keeping this in view, the bank has network is a mystery to other players of the country. adopted many technology based solutions that has placed Number of ATM of the bank stood 4,862 in 2020 our bank at the zenith of the technological advancement compared to 4,837 in 2019. in our banking industry. Since the start of its operation, Dutch-Bangla Bank 4,837 4,862 Limited has been continuously striving towards 4,705 bringing world-class technology driven banking services, 4,467 conveniences and satisfaction to its customers setting a 4,331 milestone in the banking sector of the country. In many areas of banking service DBBL has been the leader & shown path to others. It has setup country's largest ATM network comprising of 4,862 ATMs at the end of 2020. DBBL has introduced Fast Tracks for the first time in the country to ensure better Number and wider range of services to its valued customers. 2016 2017 2018 2019 2020 DBBL has also launched the first ever e-payment gateway of the country which has started bringing a change in the ATM

ANNUAL REPORT 2020 91 Fast Track Nexus Pay To provide quick and faster service and move the banking NexusPay from Dutch-Bangla Bank is the first fully card services to the doorsteps of our valued customers, the less solution in Bangladesh. NexusPay works with all bank Bank has introduced Fast Tracks (FT) for the first time in cards including Nexus, Visa, MasterCard, Dutch-Bangla the country. These FTs are comprised of ATMs, Deposit Bank Agent Banking and Rocket Mobile Banking. Numbers Kiosks, and Customer Service help desk officers. In 2020 of Merchants accepting DBBL NexusPay stood at 17,913 at DBBL have 1,190 Fast Track compared to 1,100 in 2019. the year ended 2020. Numbers of DBBL NexusPay users stood at 3,639,152 at the year ended 2020. 1,190 Number/ 1,100 Particulars Amount 900 780 Number of Nexus pay user as 31-Dec-20 3,639,152 708 Number of Merchant point as of 31-Dec-2020 17,913

Amount of NexusPay QR Merchant

Number 1,858 Transaction (BDT in million)-2020 2016 2017 2018 2019 2020 Amount of Bills Pay Transaction through 6,877 FAST TRACK NexusPay (BDT in million)-2020 Amount of Top up Transaction through 1,329 POS (Point of Sales) Merchants NexusPay (BDT in million)-2020 POS business team acquires new retail outlets (POS Mobile Banking Merchants) and installs Point of Sales (POS) machines in Mobile banking service, first of its kind in the country, the outlets. DBBL Nexus, VISA, MasterCard, Union Pay, introduced by DBBL in 2011, was further strengthened in Discover, Diners Club card users can make transaction 2017 to cover the entire Bangladesh. The mobile banking through EMV readable POS machines. The number of POS merchant and amount of transaction is increasing over services were rebranded in 2016 with ‘Rocket’ logo for the year. more visibility and customer-centric. The mobile banking services are now spread all over Bangladesh. No of POS Amount of Transaction Year The services were targeted to reach the unbanked poor Merchant (in millions) people of the country, who are deprived from traditional 2016 6,609 17,227 banking services, living mostly in rural and remote areas to include them in financial services network through 2017 6,466 18,426 mobile phone. 2018 7,531 20,008 Compared to traditional banking, mobile banking services 2019 10,389 20,870 are close to the doorsteps of customers, easier to use (can be operated without writing any cheque or using any card 2020 12,297 22,503 but using pin number only) through mobile phone and

22,503 highly convenient for instant remittance of money from 20,870 abroad or within the country to any remote destination of 20,008 18,426 the country. 17,227 Variance Particulars 2020 2019 (%)

No. of Mobile Banking 21,958,536 17,933,235 22.45% Customers Taka in Million Amount of Mobile Banking Transaction (in 2016 2017 2018 2019 2020 Million) 1,225,523 899,879 36.19% POS TRANSACTION 21,958,536 3,265,558

17,933,235 2,008,519 Number Number

2020 2019 2020 2019 NO. OF MOBILE BANKING CUSTOMERS NO. OF AGENT BANKING CUSTOMERS

1,225,523 850,276 899,880

563,277 Taka in Million Taka in Million

2020 2019 2020 2019 AMOUNT OF MOBILE BANKING TRANSACTION AMOUNT OF AGENT BANKING TRANSACTION Agent Banking Agent banking services was introduced in 2015. This HUMAN RESOURCES DEVELOPMENT is deposit based service and extended hands of DBBL branches. The objective is to bring rural small depositors Human resource is crucial to continued growth and under the banking umbrella. success of any business entity. A talented, committed, A further extension of banking for mass people to reach skilled and fully motivated team of human resources is even the remotest corner of the country, agent banking the main driving force for providing better, faster and services introduced in 2015 was further expanded in 2020. As many as 4,414 Agent outlet covering 486 Upazilas coordinated services to the clients and for performing at under 64 District were operating at the end of Dec 2020 to the highest level in a fiercely competitive financial market serve the agent banking customers. A total of 502 Master like Bangladesh. Accordingly, the Bank's strategy is to Agents were engaged in providing re-balancing service to the Agent outlets for smooth operation of customer attract, retain and motivate the most talented people and service. providing them with healthy, safe and progressive working environment and competitive compensation package. Variance Particulars 2020 2019 (%) The Bank’s Human Resources policies are based on trust No. of Agent Banking and relationship. The Bank’s policy is to look after people Customers 3,265,558 2,008,519 62.59% who want to make a long-term career with the Bank Amount of Agent Banking because trust and relationship are built over time. Transaction (in million) 850,276 563,277 50.95%

ANNUAL REPORT 2020 93 Particulars 2020 2019 Taka in Million Nature of Employees Benefit 2020 2019 No. of Employees 7,596 7,387

Male 7,178 6,988 Provident Fund 3,105 2,212

Female 418 399 Gratuity Fund 1,943 1,545

Permanent 7,590 7,376 Superannuation Fund 433 388 Contractual 6 11 Career development and training program No. of new employee 348 1,975 DBBL attaches utmost importance to the development Employee turnover 3.52% 4.41% of its employees through continuous training so that DBBL executives can have competitive advantage in Minimum notice 60 days 60 days the market. The training need of individual employees period for resignation including training need for introducing new products, A number of well thought out policies are in place for services and technology is evaluated on a continuous and welfare of employees in DBBL those are in addition to systematic way. DBBL executives are encouraged to attend competitive compensation package available in the high quality training at home and abroad to develop and industry: broaden existing knowledge and skills and to acquire new √ DBBL Provident Fund skills and expertise √ DBBL Superannuation Fund, √ DBBL Gratuity Fund DBBL training institute organized 17 different training √ House Building Loan Scheme, courses and 17 workshops on important banking issues √ Festival bonus with active participation of 4,045 employees during the year 2020. Trainings carried out by the Bank’s own training √ Performance bonus and institute for the year 2020 are outlined below: √ Study leave

Serial Number Number of Subject No of courses participants

1. Training Courses

a. Foundation Training Course 3 200

b. Credit Risk Management 2 109

c. Land Documents, Mortgage and Litigation 2 110

d. General Banking Operation 2 90

e. Internal Credit Risk Rating (ICRR) System 1 62

f. Online Training on Trade Finance Operation for the Branch Managers 2 195

g. Online Training on e-KYC for UBS Account Opening 1 165

h. Online Trainings on Integrated Supervision System (ISS) Reporting 2 412

i. Online BAMLCO Conference of DBBL 1 285

j. Products & Services of Retail & SME Business 1 21

Sub-total of training 17 1,649 2. Workshop

a. Awareness in IT Security across DBBL 3 201

b. Overall Cash Management 1 55

c. SWIFT Payment Message & AutoFX/ operational issues/challenges 1 21 and solutions d. Prevention of Money Laundering and Combating Terrorist Financing 3 469 (Including NIS/Ethics in Banking) e. Internet Banking and 2FA 1 147

f TBML Prevention Guidelines version 2020 Implementation 1 143

g. Initiatives to Increase Cash Pickup Remittance Inflow through Branch 2 780

h. Gender Equality in Sustainable Development: Bangladesh Perspective 1 40

i. Marketing of Retail & SME Products 1 223

j. Developing Soft-skills for Efficient, Ethical & Enduring Customer 1 221 Relationship k. New Entrepreneur Development 1 30

l. Green Banking Policy and Environmental Risk Management 1 66

Sub-total of workshop 17 2,396

Total of training and workshop 34 4,045

Apart from the above training programs, the Bank also nominated 332 officials to undergo 134 different training programs/courses organized by different organizations like Bangladesh Institute of Bank Management (BIBM), Bangladesh Bank Training Academy (BBTA) and other similar organizations.

Employees Healthcare, safety standards encouraging working environment, all the DBBL and modern working environment offices including head office and branches are equipped with modern facilities with • A thorough medical checkup facility is provided to airconditioning and generator for power back up. each employee in every alternate year. • All DBBL offices including head office and • Medical allowance @ 10% of basic salary is paid branches are equipped with fire fighting material to each employee. and have multiple exit points for emergency exit. • In order to provide highly sophisticated and

ANNUAL REPORT 2020 95 SOCIAL CONTRIBUTION Contribution to Educational Sector 3.5 DBBL being a responsible corporate citizen of the country 10.0 has been playing a pioneering role in implementing various social and philanthropic programs to help disadvantaged people of the country. Education, healthcare, human resource development, conservation of nature, creation of social awareness, rehabilitation of distress humanities and such other programs to redress human sufferings are some of the important areas where the Bank carries out 124.5 its social and philanthropic activities.

Scholarship Development of educational In order to discharge activities related to Social Cause infrastructure Ganit & Physics Olympiad Programs in an effective way, DBBL established the Dutch-Bangla Bank Foundation (DBBF) in 2001 in which Contribution to Heath Sector contribution is made by the Bank to carry out highly important social cause programs in the areas of education, Health is one of the prime parameters to indicate the healthcare etc. DBBL’s contribution to Social cause development of a nation. The need for healthcare is programs was Taka 691.4 million in 2020 compared to Taka increasing everyday due to rapid growth of population. 876.68 million in 2019. Dutch-Bangla Bank has identified health care as a priority sector and helped create better health care facilities at a Contribution to Educational Sector cheaper cost for the disadvantaged population. In 2020, in Education is necessary for the overall development of the response to global COVID pandemic, DBBL has spent taka country. Keeping this view in mind, Dutch-Bangla Bank 79.5 million to provide different health care service and has been giving top priority to promote the education infrastructure development of health sector of the country. sector. Awarding scholarship to meritorious students in need of financial aid, financial support for organizing the Taka in Million prestigious Ganit Olympiad, Physics Olympiad, helping Description of CSR activities Total development of educational infrastructural facilities, Donation for preventing the spread of 60.0 providing essential educational equipment etc. are some COVID-19 of the aspects included in the program. Smile Brighter & Cataract program 17.9 With the aim of illuminating lives of tens of thousands of Development of health infrastructure. 1.1 students with the light of education, and development of Donation for treatment to different helpless 0.5 educational infrastructure of the country, DBBL has spent persons. about taka 138.0 million in 2020. Total 79.5

Taka in Million Contribution to Heath Sector 0.5 Description of activities Total 17.9

Scholarship 124.5

1.1 Ganit & Physics Olympiad 10.0 60.0 Development of educational infrastructure 3.5

Total 138.0 Donation for preventing Smile Brighter & the spread of COVID-19 Cataract program Development of health Donation for treatment to infrastructure. di erent helpless persons. Contribution in Disaster Management Contribution to Social Development and Dutch-Bangla Bank Limited (DBBL) stands by the environmental beautification distressed people at the time when natural calamities Dutch-Bangla Bank Ltd, as a corporate citizen contributes occur. DBBL provides support to the affected people in to social development of the country through construction cash and kind for their rehabilitation after the natural of roads, bridge, mosque, donation to charitable calamities like cyclone, flood, tornado, landslide, river organization and others. erosion, devastating fire etc. The donation in kind includes food, medicine, water purifying tablets, blankets, GCI Dutch-Bangla Bank also contributes to environmental sheets etc beautification of the major historical place of the country Taka in Million to create a good image of the country to the world. Description of CSR activities Total DBBL constructed a monument in the crossing of Hotel Donation to Prime minister's relief Fund for InterContinental and State Guest’s House Jamuna. DBBL cold affected people. 100.0 is also engaged in beautification of the road islands and Donation to Prime minister's relief Fund for footpaths from Kakrail Crossing to Hotel InterContinental flood affected people. 100.0 Crossing of Dhaka metro as a part of city beautification Donation for other social organisation 1.8 project. Total 201.8

Taka in Million

Sector Description of CSR activities Total

Donation for beautification cost of the Mazaar gate of Hazrat Shah Paran (R.), Sylhet 10.0 Sadar, Sylhet. Beautification and maintenance at the crossing of Hotel InterContinental and State 1.4 Guests House Jamuna. Social Development, Donation to Bangabandhu Memorial Trust for celebrating Mujib Borsho 100.0 Environment Donation to Prime Minister's Relief Fund for construction of house for poor and Others 100.0 homeless people on the occasion of Mujib Borsho.

Donation to RAB for celebrating Mujib Borsho 59.8

Other 1.0 Total 272.2

Commitment to rural area and Supporting SME SME Financing DBBL has six SME/Agriculture branch mainly in rural areas In the context of Bangladesh, the development of to support SMEs and to bring related low income group Cottage, Micro, Small and Medium Enterprises (CMSMEs) under financial intermediation to help them become self can be considered as a vital instrument for poverty reliant and unleash the potential of economic growth in alleviation and ensure the rapid industrialization. rural area. Since inception, DBBL is constantly working for the In order to reinforce our commitment to rural and betterment of the CMSME sector of the country. DBBL marginal people of the country, mobile banking services has a well-organized and fully functional SME Division and agent banking services are offered by DBBL for providing banking services to mainly those people who equipped with efficient manpower and is actively are living in rural areas of the country and mostly deprived supporting this industry through its widespread network of conventional banking services. all over the country.

ANNUAL REPORT 2020 97 35,429 ENVIRONMENTAL CONTRIBUTION

34,745 Green Banking 28,474 26,268 In light with Banking Regulations & Policy Department, 23,720 Bangladesh Bank vide their Circular No. 02 dated February 27, 2011; DBBL has outlined a detail policy guideline for implementing Green Banking activities under a comprehensive Green Banking Policy in a formal

Taka in Million and structured manner in line with global norms so as to protect environmental degradation and ensure 2016 2017 2018 2019 2020 sustainable banking practices. DBBL believes that Green SME FINANCING Banks or environmentally responsible banks do not only Agricultural Financing improve their own standards but also affect socially responsible behavior of other businesses. Bangladesh Bank’s Agricultural & Rural Credit Policy DBBL, with the support of FMO, has established and Program emphasize to ensuring food security and an international standard Environmental & Social alleviating rural poverty through escalating the scope Management System (ESMS) of its own by the technical of agricultural credit, financial inclusion, resulting in assistance of a 3rd party consultant viz. F.I. Konsult from increased fund flow in rural areas. Under the policy, Czech Republic. As part of the capacity development adequate credit has also been provided for two other program, DBBL has completed, among others, revision of main sub-sectors namely Fishery and Livestock alongside its existing Green Banking policy along with internationally the crop loan including income generating and poverty accepted exclusion list and launched Environmental & alleviation activities in rural areas. Social (E&S) Categorization Tool (Environmental Risk Bangladesh Bank for the FY 2020-2021 has set a target Rating) in excel based software as per ERM guidelines of for DBBL of Taka 4,780.0 million for disbursement of Bangladesh Bank and international best practices. agricultural and rural credit. It is worth mentioning that up DBBL complies with environmental standard while to June 30, 2020, DBBL has disbursed Taka 4,196.29 million financing industrial projects. Projects with likely adverse out of the target amount of Taka 4,260.00 million for the impact on environment are strongly discouraged by FY 2019-2020. As per guideline of Bangladesh Bank, DBBL DBBL. We are trying to incorporate sound environmental is actively financing in crop, fisheries, poultry and livestock management process in business operations of projects sectors within which crop sector occupies the majority financed by us that can ensure healthy and sustainable portion. lives for our future generations. DBBL introduced a guideline demanding assessment of environmental and social impacts of the projects to ensure that operations of the projects would be eco-friendly. 4,260 4,196

3,973 DBBL is sponsoring social awareness programs 3,760 for protecting the environment. Environmental degradation and depletion of natural resources are matters of great concern in Bangladesh like anywhere in the world. Environmental degradation

Taka in Million is taking place due to poverty, over population and lack of awareness about the environment. It is manifested 2019-20 2018-19 by deforestation, destruction of wetlands, depletion of soil nutrients etc. Natural calamities like floods, cyclones Disbursement Target and tidal bores also result in severe socio-economic and environmental damage. DBBL has been continuously creating social awareness to protect the environment that is essential for present and future generations. With used for internal correspondence. Effective and optimum that end in view, DBBL is regularly advertising in print and utilization of online banking facilities is highly encouraged electronic media to develop an eco-friendly society for to reduce operating time, resources and to ensure fast sustainable and healthy human life. customer services. Green Financing A “Green Office Guideline has been circulated to the The bank has introduced environment friendly innovative employees for efficient use of electricity, water, paper and green products to address the core environmental reuse of equipments. The office order entails the following instructions or advices; challenges of the country. Eco-friendly business activities and energy efficient industries like renewable energy • Double-side printing to save paper consumption; project, clean water supply project, waste water treatment • Application of eco-font printing to reduce ink; plant, solid & hazardous waste disposal plant, bio-fertilizer • Use of scrap paper as notepads; plant should be encouraged and financed by the bank. • Avoiding use of disposable cups; Consumer loan programs may be applied for promoting environmental practices among borrowers. • Installation of energy efficient electronic equipment; The bank should encourage marketing products that are • Automatic shutdown of computer, fans, light, air presumed to be environmentally safe which includes cooler, use of energy saving bulbs, installation product modification, changes to the production process, of solar energy etc to help reduce electricity packaging changes as well as modifying advertising consumption; activities. • Purchase of energy efficient cars that can reduce Bank has disbursed Taka 69,630.40 million in 2020 gas and petroleum consumption. compared to Taka 56,747.01 million in 2019 to projects having Effluent Treatment Plant (ETP). Taka in Million Fund Allocation for Climate change Risks Consumption 2020 2019 Bank has contributed taka. 201.76 million in 2020 Paper & Stationary compared to taka. 164.72 million in 2019 for disaster 148.58 179.45 management. Water 8.82 8.88 Taka in Million Electricity Consumption 479.76 538.29 Particulars 2020 2019

Direct & Indirect Green Finance 69,630.40 56,747.01 Fuel 46.73 54.89 Utilization of Climate Risk Fund 201.76 164.72 ATM & Fast Track powered by - 39 booth In-house Environment & Social Solar Energy Management Branches Partially Powered by 31 31 The bank has given emphasis on reducing its impact on Solar Energy branches branches the environment by eliminating paper & waste, saving Nos. of clients under Social 274 320 gas and carbon emission, reducing painting cost and & Environmental Risk Rating during the year postage expense etc. Online communication is extensively

ANNUAL REPORT 2020 99

corporate governance

CORPORATE GOVERNANCE

Corporate Governance The Board discharges its responsibilities itself or through various committees. The Board meets on a regular basis Corporate Governance is the system of internal controls to discharge its responsibilities. and procedures used to define and protect the rights and The Board is made up of six directors including a responsibilities of various stakeholders. The Bank has non-executive chairman (sponsor director) and two adequately complied with all the Corporate Governance non-executive nominated directors, two independent Guidelines of Bangladesh Bank and Bangladesh Securities directors and one executive Managing Director & CEO as and Exchange Commission (BSEC). It is ensured by the follows: Board that all activities and transactions of the Bank are Mr. Sayem Ahmed conducted in compliance with international best practices Sponsor Director & Chairman to protect the highest interest of all the stakeholders.

Maximizing value for shareholders through performance Mr. Abedur Rashid Khan with good governance is the responsibility of corporate Nominee of M/s. Horizon Associates Limited management. In line with the best practice, the corporate Ms. Tang Yuen Ha, Ada governance systems and practices in DBBL are designed Nominee of Ecotrim Hong Kong Limited, a sponsoring to ensure adequate internal control in operational process, shareholder transparency and accountability in doing business and proper and timely disclosures in financial reporting so that Mr. Ekramul Haq, FCA value is maximized for all the stakeholders. Independent Director Responsibilities and functions are segregated in a Mr. Mohammed Salim, FCMA, CPFA way to strike the right balance between the Board and Independent Director the Management. The Board provides leadership and direction of the Bank, approves strategic plans and major Mr. Abul Kashem Md. Shirin policy decisions and supervises performance of the Ex-officio Director (Managing Director & CEO) management. The Board is responsible for ensuring and encouraging compliance, ethical standard and integrity Chairman of the Board throughout DBBL. The non-executive Chairman of the Board is fully The Bank has a policy for delegation of authority. independent of the Managing Director & CEO of the Bank. Accordingly, authorities are delegated to CEO, other Independent Director senior management and cross functional management DBBL has two independent directors in the Board of committees comprising head of functional divisions the Bank. In compliance with Corporate Governance and senior management to review achievements of Code of BSEC and as per rule of Bangladesh Bank, two key objectives. The Board has also clearly delegated independent directors have been appointed in the Board authorities to Board Committees with specific terms of Directors. of reference which sets out their objectives and responsibilities. Mr. Ekramul Haq, FCA is an independent director in the Board of the Bank. Mr. Ekramul is a Chartered Accountant The Board and Senior Partner in Rahman Mustafiz Haq & Co. The Board is comprised of directors having diverse skills, having long 49 (forty nine) years experiences in different experience and expertise to add value towards better organizations in different position. He is the fellow corporate governance of the Bank and maximizing value member of the Institute of Chartered Accountants of for all stakeholders. Bangladesh.

ANNUAL REPORT 2020 103 Mr. Mohammed Salim, FCMA, CPFA is also an l Disclosure of accurate, timely and reliable independent director in the Board of the Bank. Mr. Salim information to shareholders. is a Qualified Cost and Management Accountant having long 34 (thirty four) years professional experiences in They are expected to different organizations. Presently he is working as a l demonstrate the highest professional and Senior Financial Management Consultant, Digitizing ethical standards. Implementation Monitoring And Public Procurement Project (DIMAPPP), IDA financed, Central Procurement l be fully independent from management.

Technical Unit (CPTU), IMED Ministry of Planning, l be knowledgeable about the business and Government of Bangladesh. He is a fellow member of challenges that DBBL is facing. the Institute of Cost and Management Accountants of Bangladesh (FCMA), member of Institute of Public l apply prudence and judgment in decision Accountant (MIPA), Australia, Member of Certified making.

Management Accountant (CMA), USA and Certified Public l display commitments to the Bank and its all Finance Accountant (CPFA) from the chartered Institute of stakeholders through participation in the affairs Public Finance Accountants, UK. of the Bank. Key objectives of the directors Number of Board Meeting held in 2020

The Board is responsible for ensuring governance and Number of Board Meetings held in 2020 and the performance of the company by directing and overseeing attendance of each Director are shown in Annexure–A. activities of the executive management by making them The Committees of the Board of Directors transparent, accountable and responsible. The directors are expected to protect the long term interest of the As per Bangladesh Bank guidelines, the Board has shareholders and all stakeholders by setting key objectives three committees namely Executive Committee, Audit for the management and by monitoring and ensuring Committee and Risk Management Committee. Each that those objectives are achieved by the management Committee operates under specific Terms of Reference in a sustainable way while maintaining transparency and (TOR) that sets out its responsibilities and composition. accountability at every stage of operations. The TORs are designed and reviewed to ensure that the The Board must be satisfied that sufficient risk objectives of each committee are achieved in an effective management systems are in place to mitigate core risks way and that regulatory obligations and obligation to of the Bank and that there are adequate checks and shareholders are fulfilled. The Committee regularly balances in the internal control system to protect the evaluates progress towards key objectives. Accordingly, value and quality of assets of the Bank. time and efforts are dedicated to focus on responsibilities those are central to achieve the core objectives of The Board of Directors is entitled to timely, accurate respective committees. and adequate information & data to ensure effective control over operational, financial, strategic, compliance, Executive Committee of the Board governance and risk management issues of the Bank. The Executive Committee of the Board is comprised of The Board is responsible for ensuring the the following members of the Board. following Mr. Abedur Rashid Khan : Chairman

l Policy formulation and implementation, risk Mr. Sayem Ahmed : Member management, internal control, internal audit and its compliance. Mr. Abul Kashem Md. Shirin : Member

l Setting key targets of the Bank and monitoring Responsibility of Executive Committee (EC) progress towards achievement of such targets. The responsibility of Executive Committee of the Board is clearly delegated by the Board in line with regulatory l Approval of major policy decisions and long term strategic plans to achieve key objectives in an guidelines. Accordingly, the EC exercises all the powers efficient and effective way. and functions on behalf of the Board in regard to: l approving credit proposals and monitoring of the state of affairs of the Bank and the results of its quality of loan portfolio operations and cash flows. All the applicable International Accounting Standards (IAS) and International Financial l administrative affairs and Reporting Standards (IFRS) adopted by the Institute of l financial affairs Chartered Accountants of Bangladesh (ICAB) are complied with for preparation of financial statements. The financial However, all policy matters and strategic issues are dealt statements are prepared by the management and with by the Board of Directors of the Bank. approved by the Board of Directors and audited by auditors appointed in the Annual General Meeting. Audit Committee of the Board (AC) Directors’ Responsibility for Internal The Audit Committee of the Board is comprised of the Control and Financial Reporting following non-executive members of the Board. Directors’ statement on their responsibility for internal Mr. Mr. Ekramul Haq, FCA : Chairman control and financial reporting of the Bank is given on page Ms. Tang Yuen Ha, Ada : Member 364 of this Annual Report.

Mr. Mohammed Salim, FCMA, CPFA : Member External audit

Salient Feature of the Objectives and Responsibilities M/s. Hoda Vasi Chowdhury & Co., Chartered Accountants of the Audit Committee of the Board, number of Audit is the statutory (external) auditors of the Bank. They don’t Committee meeting held in 2020 and Report of the Audit provide any other accounting, taxation or advisory services Committee of the Board are given on page 124 to 125 of to the Bank except certification of cash incentives payable this Annual Report. to exporters. Risk Management Committee of the Board Compliance with Bangladesh Bank (RMC) regulations

The Risk Management Committee of the Board is As a commercial bank, DBBL is regulated and supervised comprised of the following non-executive members of by Bangladesh Bank under the Banking Companies Act, the Board. 1991 and rules and regulations made there under. DBBL attaches highest priority to strict compliance with all Mr. Abedur Rashid Khan : Chairman regulatory requirements of Bangladesh Bank in terms Mr. Sayem Ahmed : Member of core risk management, capital adequacy ratio, foreign exchange regulations, liquidity management, KYC and Mr. Ekramul Haq, FCA : Member anti-money laundering compliance etc.

Salient Feature of the Objectives and Responsibilities of the Audit and Inspection by Bangladesh Bank Risk Management Committee of the Board are given below: In addition to Annual Comprehensive Inspection of DBBL, The TORs of the RMC is to oversee as to whether various Bangladesh Bank also undertakes audit & inspection of core risks of the Bank i.e. credit risk, foreign exchange risk, DBBL at regular intervals. Compliance with observations internal control & compliance risk, money laundering risk, and recommendations made by Bangladesh Bank help ICT risk, operational risk , interest rate risk, liquidity risk the Bank to improve internal control, risk management, and other residual risks have been identified and measured corporate governance and regulatory compliance by the Bank management and whether adequate risk maximizing benefit for all stakeholders. management and risk mitigation systems have been put in place by the Bank management and whether adequate Compliance with Corporate Governance provisions and capital have been maintained against Guidelines of Bangladesh Bank combined risks undertaken by the Bank. DBBL has also adequately complied with Corporate Preparation of Financial Statements Governance Guideline of Bangladesh Bank (BRPD Circular No. 11, dated October 27, 2013) in terms of overall Financial statements of DBBL give a true and fair view business activities of the Bank including credit and

ANNUAL REPORT 2020 105 risk management, internal control, human resource Credit Rating of the Bank management as well as income and expenses. It also fully complies with formation of Board, Executive In line with Bangladesh Bank’s BRPD Circular No. 06 Committee, Audit Committee and Risk Management dated July 05, 2006 and in order to improve the risk management and corporate governance system of Committee of the Board and their TORs to improve the Bank and to safeguard the interest of investors, overall corporate governance system of the Bank and depositors, creditors, shareholders and the Bank safeguard the interest of all stakeholders. Segregation of Management as a whole, Credit Rating of the Bank for the financial, operational and administrative authorities and year 2019 was conducted by Credit Rating Information and responsibilities between Board and Management have Services Limited (CRISL). The date of rating by CRISL was been also ensured. 16 July, 2020.

Compliance with BSEC regulations CRISL assigned ‘AA+’ (pronounced as double 'A' plus) rating in the Long Term and ‘ST-1’ rating in the Short Term. As a listed company, DBBL is regulated by the Bangladesh Securities and Exchange Commission (BSEC). We have Dutch-Bangla Bank’s strength has also been recognized adequately complied with Corporate Governance Code internationally by Moody’s Investors Service and rated the issued by the Bangladesh Securities and Exchange Bank as ‘B1’. Commission as follows: l There are two independent directors on the Board Relations and communication with of the Bank. shareholders l Both the independent directors are members The Bank attaches highest importance on two way of the Audit Committee of the Board with one appointed as its Chairman. communications with the shareholders. The Bank believes that the shareholders should have access to all relevant l The quorum of the Audit Committee is not constituted without at least one independent information about the Bank to make informed, judgment director. and decisions. All the relevant information is placed in l A certificate has been obtained from M/s. the website (www.dutchbanglabank.com) of the Bank for A. Qasem & Co., [A member firm of Ernst & convenience of the shareholders. As per BSEC guidelines Young Global Limited], Chartered Accountants all the price-sensitive information having any possible on reporting and compliance of Corporate impact on share prices of the Bank are communicated Governance guidelines of BSEC. to the shareholders by publication in national dailies, l Code of Conduct for the directors as laid down online news portal and through website of DSE, CSE and by Bangladesh Bank and Bangladesh Securities and Exchange Commission in their respective BSEC. Quarterly and Half-yearly financial statements Corporate Governance Code, is followed by are published in the national dailies and these are also the directors and annual compliance has been communicated to all the shareholders through DSE, reviewed and recorded. CSE and BSEC. Audited yearly Financial Statements are l The Board has clearly defined the respective roles published in the national dailies. The half-yearly and and responsibilities of the Chairman and the yearly results and press releases are also made available Chief Executive Officer. in our website. The Annual General Meeting provides very l The Board has also clearly defined the respective good opportunities for communication with shareholders. roles, responsibilities and duties of the Chief All the suggestions or recommendations made by the Financial Officer (CFO), the Head of Internal Audit and the Company Secretary. shareholders in AGM or any time during the year are taken very seriously for compliance and better corporate l The Board has clearly set forth in writing, the duties of the Audit Committee of the Board in governance of the Bank. term of BSEC and Bangladesh Bank guidelines. [As per condition No. 1(5)(xxvii)] Status of compliance with the conditions imposed by Bangladesh Securities and Exchange Commission’s Notification No. BSEC/CMRRCD/2006-158/207/Admin/80 dated 03 June 2018 issued under section 2CC of the Securities and Exchange Ordinance, 1969:

(Report under Condition No. 9)

Compliance Status Condition Remarks Title (Put √ in the appropriate column) No. (if any) Complied Not Complied 1 (1) Size of The total number of members of a company’s Board of the Board of Directors (hereinafter referred to as “Board”) shall not be √ Directors less than 5 (five) and more than 20 (twenty). 1 (2) (a) At least one-fifth (1/5) of the total number of directors Independent in the company’s Board shall be independent directors; any Directors fraction shall be considered to the next integer or whole number √ for calculating number of independent director(s);

(b) For the purpose of this clause “independent director” means a director- (i) who either does not hold any share in the company or holds less than one percent (1%) shares of the total paid- √ up shares of the company; (ii) who is not a sponsor of the company or is not connected with the company’s any sponsor or director or nominated director or shareholder of the company or any of its associates, sister concerns, subsidiaries and parents or holding entities who holds one percent (1%) or √ more shares of the total paid-up shares of the company on the basis of family relationship and his or her family members also shall not hold above mentioned shares in the company; (iii) who has not been an executive of the company in √ immediately preceding 2 (two) financial years; (iv) who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary √ or associated companies; (v) who is not a member or TREC (Trading Right Entitlement Certificate) holder, director or officer of any stock exchange; √

(vi) who is not a shareholder, director excepting independent director or officer of any member or TREC holder of stock √ exchange or an intermediary of the capital market; (vii) who is not a partner or an executive or was not a partner or an executive during the preceding 3 (three) years of the concerned company’s statutory audit firm √ or audit firm engaged in internal audit services or audit firm conducting special audit or professional certifying compliance of this Code; (viii) who is not independent director in more than 5 (five) listed companies √

ANNUAL REPORT 2020 107 (ix) who has not been convicted by a court of competent jurisdiction as a defaulter in payment of any loan or any √ advance to a bank or a Non-Bank Financial Institution (NBFI); and

(x) who has not been convicted for a criminal offence √ involving moral turpitude;

(c) The independent director(s) shall be appointed by the Board and approved by the shareholders in the Annual √ General Meeting (AGM);

(d) The post of independent director(s) cannot remain √ vacant for more than 90 (ninety) days;

(e) The tenure of office of an independent director shall √ be for a period of 3 (three) years, which may be extended for 1 (one) tenure only;

1(3) (a) Independent director shall be a knowledgeable Qualification individual with integrity who is able to ensure compliance of with financial laws, regulatory requirements and √ Independent corporate laws and can make meaningful contribution to Director the business;

(b) Independent director shall have following qualifications:

(i) Business Leader who is or was a promoter or director of an unlisted company having minimum paid-up capital of Tk. 100.00 million or any listed company or a member Not applicable of any national or international chamber of commerce or business association; or

(ii) Corporate Leader who is or was a top level executive not lower than Chief Executive Officer or Managing Director or Deputy Managing Director or Chief Financial √ Officer or Head of Finance or Accounts or Company Secretary or Head of Internal Audit and Compliance or Head of Legal Service or a candidate with equivalent position of an unlisted company having minimum paid up capital of Tk. 100.00 million or of a listed company; or

(iii) Former official of government or statutory or autonomous or regulatory body in the position not below 5th Grade of the national pay scale, who has at least Not applicable educational background of bachelor degree in economics or commerce or business or law; or

(iv) University Teacher who has educational background in Economics or Commerce or Business Studies or Law; or Not applicable (v) Professional who is or was an advocate practicing at least in the High Court Division of Bangladesh Supreme Court or a Chartered Accountant or Cost and Management Accountant or Chartered Financial Analyst √ or Chartered Certified Accountant or Certified Public Accountant or Chartered Management Accountant or Chartered Secretary or equivalent qualification; (c) The independent director shall have at least 10 (ten) years of experiences in any field mentioned in clause (b); √

(d) In special cases, the above qualifications or experiences may be relaxed subject to prior approval of Not applicable the Commission.

1(4) (a) The positions of the Chairperson of the Board and the √ Duality of Managing Director (MD) and/or Chief Executive Officer Chairperson (CEO) of the company shall be filled by different individuals; of the Board of (b) The Managing Director (MD) and/or Chief Executive Directors and Officer (CEO) of a listed company shall not hold the same √ Managing position in another listed company; Director or Chief (c) The Chairperson of the Board shall be elected from √ Executive among the non-executive directors of the company; Officer (d) The Board shall clearly define respective roles and Roles and responsibilities of the Chairperson and the Managing responsibilities Director and/or Chief Executive Officer; √ are as per Bangladesh Bank guidelines and service rules of the Bank

(e) In the absence of the Chairperson of the Board, the remaining members may elect one of themselves from non-executive directors as Chairperson for that particular Board’s meeting; the reason of absence of the regular √ Chairperson shall be duly recorded in the minutes.

1 (5) The Directors’ Report to Shareholders

(i) An industry outlook and possible future developments in √ the industry; (ii) The segment-wise or product-wise performance; √ (iii) Risks and concerns including internal and external risk factors, threat to sustainability and negative impact on √ environment, if any; (iv) A discussion on Cost of Goods sold, Gross Profit Margin and Not applicable Net Profit Margin, where applicable; (v) A discussion on continuity of any extraordinary activities Not applicable and their implications (gain or loss);

ANNUAL REPORT 2020 109 (vi) A detailed discussion on related party transactions along with a statement showing amount, nature of related party, nature of transactions and basis of transactions of √ all related party transactions;

(vii) A statement of utilization of proceeds raised through IPO was made public issues, rights issues and/or any other instruments; in 2001 and the IPO fund √ were used for acquisition of fixed assets and lending (viii) An explanation if the financial results deteriorate after the company goes for Initial Public Offering (IPO), Repeat √ Public Offering (RPO), Rights Share Offer, Direct Listing, etc.; (ix) An explanation on any significant variance that occurs between Quarterly Financial performances and Annual √ Financial Statements; (x) A statement of remuneration paid to the directors including √ independent directors; (xi) A statement that the financial statements prepared by the management of the issuer company present fairly its √ state of affairs, the result of its operations, cash flows and changes in equity; (xii) A statement that proper books of account of the issuer √ company have been maintained; (xiii) A statement that appropriate accounting policies have been consistently applied in preparation of the financial √ statements and that the accounting estimates are based on reasonable and prudent judgment; (xiv) A statement that International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in Bangladesh, have been followed in √ preparation of the financial statements and any departure there from has been adequately disclosed; (xv) A statement that the system of internal control is sound in design and has been effectively implemented and √ monitored; (xvi) A statement that minority shareholders have been protected from abusive actions by, or in the interest of, √ controlling shareholders acting either directly or indirectly and have effective means of redress; (xvii) A statement that there is no significant doubt upon the issuer company’s ability to continue as a going concern, if √ the issuer company is not considered to be a going concern, the fact along with reasons there of shall be disclosed; (xviii) An explanation that significant deviations from the last year’s operating results of the issuer company shall be √ highlighted and the reasons thereof shall be explained; (xix) A statement where key operating and financial data of at √ least preceding 5 (five) years shall be summarized; (xx) An explanation on the reasons if the issuer company has Not applicable not declared dividend (cash or stock) for the year; (xxi) Board’s statement to the effect that no bonus share or stock dividend has been or shall be declared as interim √ dividend; (xxii) The total number of Board meetings held during the year √ and attendance by each director; (xxiii) A report on the pattern of shareholding disclosing the aggregate number of shares (along with name-wise details where stated below) held by:- (a) Parent or Subsidiary or Associated Companies and other √ related parties (name-wise details); (b) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and √ Compliance and their spouses and minor children (name-wise details); (c) Executives; √ (d) Shareholders holding ten percent (10%) or more voting √ interest in the company (name-wise details); (xxiv) In case of the appointment or reappointment of a director, a disclosure on the following information to the shareholders:- (a) a brief resume of the director; √ (b) nature of his / her expertise in specific functional areas; √ (c) names of companies in which the person also holds the directorship and the membership of committees of the √ board; (xxv) A Management’s Discussion and Analysis signed by CEO or MD presenting detailed analysis of the company’s position and operations along with a brief discussion of changes in the financial statements, among others, focusing on: (a) accounting policies and estimation for preparation of √ financial statements; (b) changes in accounting policies and estimation, if any, clearly describing the effect on financial performance √ or results and financial position as well as cash flows in absolute figure for such changes; (c) comparative analysis (including effects of inflation) of financial performance or results and financial position as √ well as cash flows for current financial year with immediate preceding five years explaining reasons thereof; (d) compare such financial performance or results and Financial financial position as well as cash flows with the peer performance of industry scenario; peer bank are not available. (e) briefly explain the financial and economic scenario of √ the country and the globe; (f) risks and concerns issues related to the financial statements, explaining such risk and concerns mitigation √ plan of the company; and concerns;

ANNUAL REPORT 2020 111 (g) future plan or projection or forecast for company’s operation, performance and financial position, with √ justification thereof, i.e., actual position shall be explained to the shareholders in the next AGM; (xxvi) Declaration or certification by the CEO and the CFO to √ the Board as required under condition No. 3(3) shall be disclosed as per Annexure-A; and (xxvii) The report as well as certificate regarding compliance of conditions of this Code as required under condition No. 9 √ shall be disclosed as per Annexure-B and Annexure-C 1(6) The company shall conduct its Board meetings and Meetings of record the minutes of the meetings as well as keep the Board of required books and records in line with the provisions Directors of the relevant Bangladesh Secretarial Standards (BSS) √ as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Code. 1(7) (a) The Board shall lay down a code of conduct, based Bangladesh Code of on the recommendation of the Nomination and Bank vide their Conduct Remuneration Committee (NRC) at condition No. 6, for letter Ref. No. for the the Chairperson of the Board, other board members and BRPD(R-1)717/ Chairperson, Chief Executive Officer of the company; 2018-9694 dated December 27, 2018 other Board informed that members (b) The code of conduct as determined by the NRC shall be they will inform and Chief posted on the website of the company including, among us regarding Executive others, prudent conduct and behavior; confidentiality; formation of Officer conflict of interest; compliance with laws, rules and Nomination and regulations; prohibition of insider trading; relationship Remuneration with environment, employees, customers and suppliers; Committee (NRC) and independency. in consultation with Bangladesh Securities & Exchange Commission (BSEC)

2. Governance of Board of Directors of Subsidiary Company

2(a) Provisions relating to the composition of the Board of Not applicable the holding company shall be made applicable to the (a subsidiary composition of the Board of the subsidiary company; company was incorporated in 2010 but did not start any operation) 2(b) At least 1 (one) independent director on the Board of the Not applicable holding company shall be a director on the Board of the subsidiary company; 2(c) The minutes of the Board meeting of the subsidiary Not applicable company shall be placed for review at the following Board meeting of the holding company;

2(d) The minutes of the respective Board meeting of the Not applicable holding company shall state that they have reviewed the affairs of the subsidiary company also; 2(e) The Audit Committee of the holding company shall Not applicable also review the financial statements, in particular the investments made by the subsidiary company.

3. Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS) 3(1) (a) The Board shall appoint a Managing Director (MD) or Appointment Chief Executive Officer (CEO), a Company Secretary (CS), a √ Chief Financial Officer (CFO) and a Head of Internal Audit and Compliance (HIAC); (b) The positions of the Managing Director (MD) or Chief √ Executive Officer (CEO), Company Secretary (CS), Chief Financial Officer (CFO) and Head of Internal Audit and Compliance (HIAC) shall be filled by different individuals; (c) The MD or CEO, CS, CFO and HIAC of a listed company √ shall not hold any executive position in any other company at the same time; (d) The Board shall clearly define respective roles, √ responsibilities and duties of the CFO, the HIAC and the CS;

(e) The MD or CEO, CS, CFO and HIAC shall not be removed √ After from their position without approval of the Board as well implementation as immediate dissemination to the Commission and stock of this new exchange(s). corporate governance code no one is removed from their position

3(2) The MD or CEO, CS, CFO and HIAC of the company shall √ Attended up to Requirement attend the meetings of the Board: November 23, 2020. to attend Provided that the CS, CFO and/or the HIAC shall not Following BRPD Board of attend such part of a meeting of the Board which involves Circular letter Directors’ consideration of an agenda item relating to their personal no.23/2013 & Meetings matters. 55/2020 dated 26.12.2013 & 12.11.2020 respectively, Bangladesh Bank vide their letter no. DOS(BSS-2)/1158-08/ DBL/2020-3903 dated November 23, 2020 instructed us to ensure that other than Managing Director and Company Secretary, any other official shall not attend the meeting of the Board of Directors and its different Committee except invitation from the Board.

ANNUAL REPORT 2020 113 3(3) Duties (a) The MD or CEO and CFO shall certify to the Board that of Managing they have reviewed financial statements for the year and Director that to the best of their knowledge and belief: (MD) or Chief (i) these statements do not contain any materially untrue Executive statement or omit any material fact or contain statements √ Officer (CEO) that might be misleading; and and Chief Financial (ii) these statements together present a true and fair Officer (CFO) view of the company’s affairs and are in compliance with √ existing accounting standards and applicable laws;

(b) The MD or CEO and CFO shall also certify that there are, to the best of knowledge and belief, no transactions entered into by the company during the year which are √ fraudulent, illegal or in violation of the code of conduct for the company’s Board or its members;

(c) The certification of the MD or CEO and CFO shall be √ disclosed in the Annual Report.

4. Board of Directors’ Committee For ensuring good governance in the company, the Board shall have at least following subcommittees:

(i) Audit Committee; and √ (ii) Nomination and Remuneration Committee. Bangladesh Bank vide their letter Ref. No. BRPD(R-1)717/ 2018-9694 dated December 27, 2018 informed that they will inform us regarding formation of Nomination and Remuneration Committee (NRC in consultation with Bangladesh Securities & Exchange Commission (BSEC) 5. Audit Committee 5(1) Responsibility to the Board of Directors

(a) The company shall have an Audit Committee as a sub- √ committee of the Board;

The Audit Committee shall assist the Board in ensuring that the financial statements reflect true and fair view of (b) √ the state of affairs of the company and in ensuring a good monitoring system within the business;

The Audit Committee shall be responsible to the Board; the (c) duties of the Audit Committee shall be clearly set forth in √ writing.

5(2) Constitution of the Audit Committee

The Audit Committee shall be composed of at least 3 (a) √ (three) members; The Board shall appoint members of the Audit Committee who shall be non-executive directors of the company (b) √ excepting Chairperson of the Board and shall include at least 1 (one) independent director; All members of the audit committee should be “financially literate” and at least 1 (one) member shall have accounting (c) √ or related financial management background and 10 (ten) years of such experience; (d) When the term of service of any Committee member expires or there is any circumstance causing any Committee member to be unable to hold office before expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed Not applicable number of 3 (three) persons, the Board shall appoint the new Committee member to fill up the vacancy immediately or not later than 1 (one) month from the date of vacancy in the Committee to ensure continuity of the performance of work of the Audit Committee; (e) The company secretary shall act as the secretary of the Committee; √

(f) The quorum of the Audit Committee meeting shall not constitute without at least 1 (one) independent director. √

ANNUAL REPORT 2020 115 5(3) Chairperson of the Audit Committee (a) The Board shall select 1 (one) member of the Audit √ Committee to be Chairperson of the Audit Committee, who shall be an independent director; (b) In the absence of the Chairperson of the Audit Committee, √ the remaining members may elect one of themselves as Chairperson for that particular meeting, in that case there shall be no problem of constituting a quorum as required under condition No. 5(4)(b) and the reason of absence of the regular Chairperson shall be duly recorded in the minutes; (c) Chairperson of the Audit Committee shall remain present in the √ Annual General Meeting (AGM): Provided that in absence of Chairperson of the Audit Committee, any other member from the Audit Committee shall be selected to be present in the annual general meeting (AGM) and reason for absence of the Chairperson of the Audit Committee shall be recorded in the minutes of the AGM. 5(4) Meeting of the Audit Committee (a) The Audit Committee shall conduct at least its four meetings in a financial year: Provided that any emergency meeting in addition to regular √ meeting may be convened at the request of any one of the members of the Committee; (b) The quorum of the meeting of the Audit Committee shall be constituted in presence of either two members or two √ third of the members of the Audit Committee, whichever is higher, where presence of an independent director is a must. 5(5) Role of Audit Committee (a) Oversee the financial reporting process; √ (b) monitor choice of accounting policies and principles; √ (c) monitor Internal Audit and Compliance process to ensure that it is adequately resourced, including approval of the √ Internal Audit and Compliance Plan and review of the Internal Audit and Compliance Report; (d) oversee hiring and performance of external auditors; √ (e) hold meeting with the external or statutory auditors for review of the annual financial statements before submission √ to the Board for approval or adoption; (f) review along with the management, the annual financial √ statements before submission to the Board for approval; (g) review along with the management, the quarterly and half yearly financial statements before submission to the Board √ for approval; (h) review the adequacy of internal audit function; √ (i) review the Management’s Discussion and Analysis before disclosing in the Annual Report; √ (j) review statement of all related party transactions submitted √ by the management; (k) review Management Letters or Letter of Internal Control weakness issued by statutory auditors; √ (l) oversee the determination of audit fees based on scope and magnitude, level of expertise deployed and time required for effective audit and evaluate the performance √ of external auditors; and (m) oversee whether the proceeds raised through Initial Public Offering (IPO) or Repeat Public Offering (RPO) or Rights Share Offer have been utilized as per the purposes stated in relevant offer document or prospectus approved by the Commission: IPO was made Provided that the management shall disclose to the in 2001 and Audit Committee about the uses or applications of the the IPO fund proceeds by major category (capital expenditure, sales and marketing expenses, working capital, etc.), on a quarterly √ were used for basis, as a part of their quarterly declaration of financial acquisition of results: fixed assets and Provided further that on an annual basis, the company lending shall prepare a statement of the proceeds utilized for the purposes other than those stated in the offer document or prospectus for publication in the Annual Report along with the comments of the Audit Committee. 5(6) Reporting of the Audit Committee (a) Reporting (i) The Audit Committee shall report on its activities to the to the Board Board. √ of Directors (ii) The Audit Committee shall immediately report to the Board on the following findings, if any:- (a) report on conflicts of interests; Nil (b) suspected or presumed fraud or irregularity or material Nil defect identified in the internal audit and compliance process or in the financial statements; (c) suspected infringement of laws, regulatory compliances Nil including securities related laws, rules and regulations; and (d) any other matter which the Audit Committee deems Nil necessary shall be disclosed to the Board immediately; (b) Reporting If the Audit Committee has reported to the Board about Nil to the anything which has material impact on the financial Authorities condition and results of operation and has discussed with the Board and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee shall report such finding to the Commission, upon reporting of such matters to the Board for three times or completion of a period of 6 (six) months from the date of first reporting to the Board, whichever is earlier.

5 (7) Reporting to the Shareholders and General Investors Report on activities carried out by the Audit Committee, including any report made to the Board under condition √ No. 5(6)(a)(ii) above during the year, shall be signed by the Chairperson of the Audit Committee and disclosed in the annual report of the issuer company. 6. Nomination and Remuneration Committee (NRC) (a) The company shall have a Nomination and Remuneration Committee (NRC) as a sub-committee (1) Responsibility of the Board; to the Board of (b) The NRC shall assist the Board in formulation of the Directors nomination criteria or policy for determining qualifications, positive attributes, experiences and independence of directors and top level executive as well as a policy for formal process of considering remuneration of directors, top level executive;

ANNUAL REPORT 2020 117 (c) The Terms of Reference (ToR) of the NRC shall be With a view to clearly set forth in writing covering the areas stated at the form a Nomination condition No. 6(5)(b). and Remuneration (2) Constitution (a) The Committee shall comprise of at least three Committee (NRC) of the NRC members including an independent director; a letter has been (b) All members of the Committee shall be non-executive issued by us to directors; Bangladesh Bank (c) Members of the Committee shall be nominated and soughting appointed by the Board; guidelines (d) The Board shall have authority to remove and appoint regarding formation any member of the Committee; of NRC as (e) In case of death, resignation, disqualification, or Bangladesh Bank's removal of any member of the Committee or in any other circular states cases of vacancies, the board shall fill the vacancy within that “Each Bank 180 (one hundred eighty) days of occurring such vacancy in Company can form the Committee; 1 (one) executive (f) The Chairperson of the Committee may appoint or co- committee, 1 (one) opt any external expert and/or member(s) of staff to the audit committee, Committee as advisor who shall be non-voting member, if and 1 (one) risk the Chairperson feels that advice or suggestion from such external expert and/or member(s) of staff shall be required management or valuable for the Committee; committee with the directors. (g) The company secretary shall act as the secretary of the Committee; Board can’t form any permanent, (h) The quorum of the NRC meeting shall not constitute temporary or without attendance of at least an independent director; sub-committee (i) No member of the NRC shall receive, either directly except or indirectly, any remuneration for any advisory or the above consultancy role or otherwise, other than Director’s fees or mentioned three honorarium from the company. committees”. (3) Chairperson (a) The Board shall select 1 (one) member of the NRC Bangladesh Bank of the NRC to be Chairperson of the Committee, who shall be an vide their letter independent director; Ref. No. BRPD(R-1) (b) In the absence of the Chairperson of the NRC, the 717/2018-9694 remaining members may elect one of themselves as dated December Chairperson for that particular meeting, the reason of 27, 2018 has absence of the regular Chairperson shall be duly recorded informed us that in the minutes; they are taking (c) The Chairperson of the NRC shall attend the annual up the issue general meeting (AGM) to answer the queries of the with Bangladesh shareholders: Securities Provided that in absence of Chairperson of the NRC, & Exchange any other member from the NRC shall be selected to be present in the annual general meeting (AGM) for Commission answering the shareholder’s queries and reason for (BSEC). We are absence of the Chairperson of the NRC shall be recorded in waiting for their the minutes of the AGM. response. (4) Meeting (a) The NRC shall conduct at least one meeting in a financial of the NRC year; (b) The Chairperson of the NRC may convene any emergency meeting upon request by any member of the NRC; (c) The quorum of the meeting of the NRC shall be constituted in presence of either two members or two third of the members of the Committee, whichever is higher, where presence of an independent director is must as required under condition No. 6(2)(h); (d) The proceedings of each meeting of the NRC shall duly be recorded in the minutes and such minutes shall be confirmed in the next meeting of the NRC.

(5) Role of (a) NRC shall be independent and responsible or the NRC accountable to the Board and to the shareholders;

(b) NRC shall oversee, among others, the following matters and make report with recommendation to the Board:

(i) formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend a policy to the Board, relating to the remuneration of the directors, top level executive, considering the following:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate suitable directors to run the company successfully;

(b) the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (c) remuneration to directors, top level executive involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals; (ii) devising a policy on Board’s diversity taking into consideration age, gender, experience, ethnicity, educational background and nationality;

(iii) identifying persons who are qualified to become directors and who may be appointed in top level executive position in accordance with the criteria laid down, and recommend their appointment and removal to the Board;

(iv) formulating the criteria for evaluation of performance of independent directors and the Board; (v) identifying the company’s needs for employees at different levels and determine their selection, transfer or replacement and promotion criteria; and (vi) developing, recommending and reviewing annually the company’s human resources and training policies;

(c) The company shall disclose the nomination and remuneration policy and the evaluation criteria and activities of NRC during the year at a glance in its annual report.

7. External / Statutory Auditors

7(1) The issuer company shall not engage its external or statutory auditors to perform the following services of the company, namely:-

(i) appraisal or valuation services or fairness opinions; √

ANNUAL REPORT 2020 119 (ii) financial information systems design and implementation; √ (iii) book-keeping or other services related to the accounting √ records or financial statements; (iv) broker-dealer services; √ (v) actuarial services; √ (vi) internal audit services or special audit services; √ (vii) any service that the Audit Committee determines; √ (viii) audit or certification services on compliance of corporate √ governance as required under condition No. 9(1); and (ix) any other service that creates conflict of interest. √ 7(2) No partner or employees of the external audit firms shall possess any share of the company they audit at least during the tenure of their audit assignment of that company; his or her family members also shall not hold any shares in the said company: √ Provided that spouse, son, daughter, father, mother, brother, sister, son-in-law and daughter-in-law shall be considered as family members. 7(3) Representative of external or statutory auditors shall remain present in the Shareholders’ Meeting (Annual General Meeting or Extraordinary General Meeting) to √ answer the queries of the shareholders.

8. Maintaining a website by the Company 8(1) The company shall have an official website linked with the √ website of the stock exchange. 8(2) The company shall keep the website functional from the date of listing. √

8(3) The company shall make available the detailed disclosures on its website as required under the listing regulations of √ the concerned stock exchange(s). 9. Reporting and Compliance of Corporate Governance 9(1) The company shall obtain a certificate from a practicing Professional Accountant or Secretary (Chartered Accountant or Cost and Management Accountant or Chartered Secretary) other than its statutory auditors or audit firm on yearly basis regarding compliance √ of conditions of Corporate Governance Code of the Commission and shall such certificate shall be disclosed in the Annual Report. 9(2) The professional who will provide the certificate on compliance of this Corporate Governance Code shall be √ appointed by the shareholders in the annual general meeting. 9(3) The directors of the company shall state, in accordance with the Annexure-C attached, in the directors’ report whether the √ company has complied with these conditions or not. Annexure-A 10 (Ten) meetings of the Board of Directors were held in the year 2020. Attendance of the Hon’ble Directors is given below

Sl. Name of Directors No of No. of Remarks No. Attendance Absence

01. Mr. Sayem Ahmed 10 0

02. Mr. Abedur Rashid Khan 9 1 i. Nominee of M/s. Horizon Associates Limited.

ii. He was pre-occupied and leave of absence was granted by the Board

03. Ms. Tang Yuen Ha, Ada 6 4 i. Nominee of M/s. Ecotrim Hong Kong Limited

ii. She was pre-occupied and leave of absence was granted by the Board

04. Mr. Md. Nazim Uddin Bhuiyan, 3 0 FCMA

05. Mr. Mohd. Khorshed Alam 3 0

06. Mr. Ekramul Haq, FCA 7 0

07. Mr. Mohammed Salim, FCMA, CPFA 7 0

08 Mr. Abul Kashem Md. Shirin 10 0 Ex-Officio Director (Managing Director & CEO)

ANNUAL REPORT 2020 121 Annexure – B The pattern of Shareholding of Dutch-Bangla Bank Limited as of 31 December 2020 as per BSEC’s Notification No. BSEC/ CMRRCD/2006-158/207/Admin/80 dated 03 June 2018: (i) Shareholding by Parent/Subsidiary/Associated Companies and other related parties: Nil (ii) Shareholding by: Directors : Given in the notes to the Financial Statements (Note 16.5) MD & Chief Executive Officer : Nil Company Secretary : Nil Chief Financial Officer : Nil Head of Internal Audit & Compliance : Nil Spouse of above Executives : Nil (iii) Shareholding by Executives : Nil (iv) Shareholders holding ten percent (10%) or more shares:

Sl. No. Name of the shareholders No. of shares as of 31 December 2020

01. Mr. Mohammed Sahabuddin Ahmed 122,167,787 shares = 22.21%

02. M/s. Horizon Associates Limited 125,618,790 shares = 22.84%

03. M/s. Ecotrim Hong Kong Limited 136,047,670 shares = 24.74%

Information of Directors in compliance with the condition No. 1(5) (xxiv) of Corporate Governance guidelines dated 03 June 2018 of Bangladesh Securities and Exchange Commission (BSEC):

Sl. Name of the Director Date of Birth Educational Experience CIB Status No. Qualification

01. Mr. Sayem Ahmed 10/12/1985 i) Bachelor He is a businessman having 22 Clean of Software years experience. (Unclassified) Sponsor Director & Chairman Engineering, He is a Director of University of i) Kader Compact Spinning Ltd.; Toronto, Canada; ii) MSA Textiles Ltd.; and iii) AA Yarn Mills Ltd.; ii) Certified Deputy Managing Director of Managerial i) Kader Synthetic Fibres Ltd.; Accountant (CMA), University of ii) MSA Spinning Ltd.; Toronto, Canada. iii) AA Synthetic Fibres Ltd.; and iv) AA Power Generation Co. Ltd.

02. Mr. Abedur Rashid Khan 12/09/1950 B. Sc. He is a businessman having 32 Clean years of experience specially in Nominee Director Export- Import trading. He is (Unclassified) Proprietor of Avanti International and Chairman of Nextgen Trading Ltd. 03 Ms. Tang Yuen Ha, Ada 06/12/1956 University Graduate She has 27 years of business Clean Nominee Director experience. She is the Managing (Unclassified) Director of Etasia (BD) Limited.

04 Mr. Ekramul Haq, FCA 30/09/1945 B. Com., FCA He is a Chartered Accountant Clean Independent Director and Senior Partner in Rahman (Unclassified) Mustafiz Haq & Co. having long 49 (forty nine) years experiences in different organizations in different position. He is the fellow member of the Institute of Chartered Accountants of Bangladesh.

05 Mr. Mohammed Salim, 31/10/1963 M. Com., University He is a Qualified Cost and Clean FCMA, CPFA of Dhaka, Master Management Accountant (Unclassified) Independent Director of Business having long 34 (thirty four) Administration years professional experiences (MBA), University in different organizations. of HULL, UK; Presently he is working as a Diploma in Senior Financial Management Management Consultant, Digitizing Studies (DMS), Implementation Monitoring University of HULL, And Public Procurement Project UK (DIMAPPP), IDA financed, Central Procurement Technical Unit (CPTU), IMED, Ministry of Planning, Government of Bangladesh. He is a fellow member of the Institute of Cost and Management Accountants of Bangladesh (FCMA), member of Institute of Public Accountant (MIPA), Australia, Member of Certified Management Accountant (CMA), USA and Certified Public Finance Accountant (CPFA) from the Chartered Institute of Public Finance Accountants, UK.

Information of remaining Directors Sl. Educational Name of the Director Date of Birth Experience CIB Status No. Qualification 01. Mr. Abul Kashem Md. Shirin 07/02/1961 i) Master of He has 35 years experience. Clean Engineering from (Unclassified) Ex-officio Director BUET, Dhaka; and (Managing Director & CEO) ii) Master of Engineering from Asian Institute of Technology, Bangkok, Thailand.

ANNUAL REPORT 2020 123 Report of the Audit Committee of the Board as per l Recommending appointment of external Bangladesh Securities and Exchange Commission auditors and special auditors, if any, to the Notification No. BSEC/CMRRCD/2006-158/207/ Board and also reviewing audit works and Admin/80 dated 03 June 2018 on Corporate Governance. reports submitted by external auditors and special auditors to ensure compliance and The Audit Committee of the Board was first duly regularization of recommendations made by constituted by the Board of Directors of the Bank in the auditors. accordance with the BRPD Circular Number 12 dated l Reporting to the Board of Directors on December 23, 2002 of Bangladesh Bank. Subsequently, mistakes, frauds and forgeries and other the Committee was reconstituted several times due irregularities, if any, observed by internal / to change of Members of the Board of Directors / external auditors and regulatory authority for Committee and to comply with the rules and regulations guidelines of the Board. of Bangladesh Bank as well as Bangladesh Securities l Reviewing compliance of all applicable rules and Exchange Commission. Accordingly, the latest audit rd and regulations and the directives made by the committee was reconstituted in the 223 meeting of Board of Directors of the Bank and controlling the Board of Directors of DBBL on March 15, 2020 in authorities. compliance with BRPD circular No. 11, dated 27 October 2013. l Review statement of significant related party transactions submitted by the management. The objectives of the Audit Committee are to assist the l Review Management Letters / Letter of Board of Directors mainly in the following areas: Internal Control weakness issued by statutory Establishing a compliance culture through adequate auditors. internal control system to ensure that sufficient risk l Reviewing the financial statements and consult management system is in place to manage core risks with the external auditor and management of the Bank and that financial reports disclosed by the team of the Bank before finalization. Bank are reliable. l The committee will submit a report on quarterly l Developing an adequate Information basis to the Board of Directors for compliance Technology (IT) and MIS and establishing on mistakes, frauds & forgeries and other irregularities, if any, identified by internal sufficient control system in IT operations to auditor, external auditor and Bangladesh Bank protect the Bank against any operational risk. inspection team.

l Ensuring true and fair presentation of financial l The Committee will evaluate the efficiency and statements with adequate disclosure in effectiveness of internal audit. compliance with Bangladesh Accounting l The internal auditor and external auditor will Standards / Bangladesh Financial Reporting submit an evaluation report on the concerned Standards / Accounting Standard as directed by subject after verified by the Committee. Bangladesh Bank. l The Committee will regularly evaluate its l Reviewing the internal audit procedure of the activities and other supervising activities vested Bank to ensure to work independently from the by the Board of Directors. management of the Bank. l Monitor Internal Control Risk Management process. l Reviewing the adequacy and effectiveness of internal audit and whether management is l The Audit Committee will evaluate the audited complying with recommendations made by the accounts and report thereon made by the internal audit and external audit to ensure good external auditors. monitoring system within the business. In pursuance of the above objectives, eleven (11) l Reviewing whether the officers / staffs of meetings of the Audit Committee of the Board were the Bank are clearly advised regarding their held during the year 2020. The Committee reviewed compliance of policy issues, regulations and applicable duties & responsibilities and evaluating their laws in general and audit reports submitted by Bank’s performance through the report of the Internal Internal Control & Compliance Division as well as reports Auditor. of external auditors. Upon review of 289 audit reports on Branches and Head • To define roles and responsibilities of all officers Office Divisions submitted in eleven (11) meetings by of the Branch. Bank’s Internal Control & Compliance Division, the Audit Committee issued a number of instructions and provided • To prepare manpower planning of the Branches. guidelines to improve the state of operation, internal control and compliance procedure and risk management • To maintain Departmental Control Function system of the Bank including operational risk, credit risk Check List (DCFCL). and documentation. • To maintain fire proof safe custody for ensuring The Committee also instructed for immediate security of documents. compliance of all issues raised and stressed the need for • To open accounts with proper documents and compliance on the part of Head of all Branches to review complying all the rules and regulations in force. the progress on a regular basis and to submit updated compliance reports to Internal Control & Compliance • To secure the vault room of the Branch. Division. • To obtain the network document and electric The Committee, among others, put special emphasis on design diagram of the Branches. the following areas: • To strengthen the internal control system. • To comply with all the requirements of the regulatory circulars meticulously provided • To implement the Core Risk Management by the Regulatory Authority like Bangladesh Guidelines. Bank, Bangladesh Securities and Exchange Commission (BSEC) etc. • To regularize various lapses, irregularities in general banking, foreign trade and credit in the • To give emphasis on improving the customer Branches at the earliest. services as well as ATM service. The Committee also reviewed the audited financial • To complete all documentation formalities in statements as of 31 December 2019, first quarter the loan accounts and foreign trade, if any. financial statement as of 31 March 2020, half-yearly • To improve the deposit mix with a view to financial statements as of 30 June 2020 and third bringing down the cost of fund. quarter financial statements as of 30 September 2020 of the Bank. • To give emphasis on account opening, retail and SME business. While reviewing financial statements, the Committee thoroughly reviewed adequacy of provisions made • To take necessary actions for proper and prompt against loans and advances and other assets and capital delivery of ATM cards and cheque books. adequacy ratio. • Not to provide EOL without the approval of the competent authority of the Bank. The Committee stressed the need for close co-ordination between External Auditors and Internal Control & • To complete Balancing / Breakup of GL Heads. Compliance Division for continuous improvement of internal control procedure and risk management system • To check the daily activity reports of the of the Bank. Branches regularly.

• To complete the audit of the new Branches within 06 (six) months from the date of the opening with a view to complying with the irregularities at the early stage. Mr. Ekramul Haq, FCA • To comply the Anti Money Laundering and Chairman terrorist financing rules and regularize the KYC Audit Committee of the Board profiles.

ANNUAL REPORT 2020 125 [As per condition No. 1(5)(xxvi)] Dutch-Bangla Bank Limited Declaration by Managing Director & CEO and Chief Financial Officer (CFO) March 06, 2021

The Board of Directors Dutch-Bangla Bank Limited Head Office, Dhaka Subject: Declaration on Financial Statements for the year ended on 31 December 2020.

Dear Sirs,

Pursuant to the condition No. 1(5)(xxvi) imposed vide the Bangladesh Securities and Exchange Commission’s Notification No. BSEC/CMRRCD/2006-158/207/Admin/80 dated June 03, 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby declare that: (1) The Financial Statements of Dutch-Bangla Bank Limited for the year ended on 31 December 2020 have been prepared in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS), as applicable in the Bangladesh and any departure there from has been adequately disclosed; (2) The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in order for the financial statements to reveal a true and fair view; (3) The form and substance of transactions and the Company’s state of affairs have been reasonably and fairly presented in its financial statements; (4) To ensure above, the Company has taken proper and adequate care in installing a system of internal control and maintenance of accounting records; (5) Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures of the Company were consistently followed; and (6) The management’s use of the going concern basis of accounting in preparing the financial statements is appropriate and there exists no material uncertainty related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. In this regard, we also certify that: (i) We have reviewed the financial statements for the year ended on 31 December 2020 and that to the best of our knowledge and belief: (a) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; and (b) these statements collectively present true and fair view of the Company’s affairs and are in compliance with existing accounting standards and applicable laws. (ii) There are, to the best of knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the code of conduct for the company’s Board of Directors or its members.

Sincerely yours,

Mohammed Shahid Ullah Abul Kashem Md. Shirin Chief Financial Officer (CFO) Managing Director & CEO [Certificate as per condition No. 1(5)(xxvii)]

Gulshan Pink City Suites # 01-03, Level : 7 Chartered Accountants Plot # 15, Road # 103 Gulshan Avenue Since 1953 Dhaka - 1212, Bangladesh Phone : 880-2-8881824-6 E-mail : [email protected]

Report to the Shareholders of Dutch-Bangla Bank Limited on compliance on the Corporate Governance Code

We have examined the compliance status to the Corporate Governance Code by Dutch-Bangla Bank Limited (the "Bank”) for the year ended on 31 December 2020. This Code relates to the Notification No. BSEC/CMRRCD/2006-158/207/ Admin/80 dated 03 June 2018 of the Bangladesh Securities and Exchange Commision.

Such compliance with the Corporate Governance Code is the responsibility of the Bank. Our examination was limited to the procedures and implementation thereof as adopted by the Management in ensuring compliance to the conditions of the Corporate Governance Code.

This is a scrutiny and verification and an independent audit on compliance of the conditions of the Corporate Governance Code as well as the provisions of relevant Bangladesh Secretarial Standards (BSS) as adopted by Institute of Chartered Secretaries of Bangladesh (ICSB) in so far as those standards are not inconsistent with any condition of this Corporate Governance Code.

We state that we have obtained all the information and explanations, which we have required, and after due scrutiny and verification thereof, we report that, in our opinion:

(a) The Bank has complied with the conditions of the Corporate Governance Code as stipulated in the above mentioned Corporate Governance Code ussued by the Commission (except for Nomination and Remuneration Committee for which the Banks awaiting directives from Bangladesh Bank); (b) The Bank has complied with the provisions of the relevant Bangladesh Secretarial Standards (BSS) as adopted by the Institute of Chartered Secretaries of Bangladesh (ICSB) as required by this Code; (c) Proper books and records have been kept by the Bank as required under the Companies Act 1994, the securities laws and other relevant laws; and (d) The Governance of the Bank is satisfactory.

For A. Qasem & Co. Chartered Accountants Place: Dhaka Dated: 06 March 2021 Mohammed Hamidul Islam FCA Partner

ANNUAL REPORT 2020 127 DIVIDEND DISTRIBUTION POLICY Introduction: Bangladesh Bank or other regulatory authority from time to time. This policy is drafted in compliance with the Directives No. BSEC/CMRRCD/2021-386/03 of Bangladesh Security & Issuance of Bonus Share: Exchange Commission (BSEC) dated January 14, 2021. To ensure rightful ownership of the bonus shares the bank Purpose: shall follow the directives issued by BSEC from time to time. The purpose of the policy is to comply with the Directives Time line for dividend pays off of Bangladesh Security & Exchange Commission (BSEC). i) Stock Dividend shall be paid off to the entitled The parameters set out in the policy are applicable for shareholder within 30 (thirty) days of approval. distribution of dividend. ii) Cash Dividend shall be paid off as per circular of BSEC or Bangladesh Bank or other regulatory Process of Distribution of Dividend: authority from time to time. Manner and procedures of Cash dividend payment iii) Amount of declared cash dividend payable for Cash dividend shall be paid directly to the bank account the concerned year/period shall be kept in a separate bank account as per circular of BSEC or i) Through Bangladesh Electronic Funds Transfer Bangladesh Bank or other regulatory authority Network (BEFTN); from time to time. ii) Through bank transfer or any electronic payment system as recognized by the Bangladesh Bank (if Unpaid or unclaimed of unsettled cash not possible through BEFTIN); dividend iii) In case of margin loan and claim by loan provider, Unpaid or unclaimed of unsettled cash dividends shall be through the Consolidated Customer’s Bank settled as per instructions of BSEC or Bangladesh Bank or Account (CCBA); other regulatory authority from time to time. iv) To the separate bank account of the merchant Unpaid or unclaimed of unsettled stock Banker or portfolio manager through BEFTN; dividend v) Through the security custodian following Foreign Unpaid or unclaimed of unsettled stock dividends shall be Exchange Regulation for non-resident sponsor, settled as per instructions of BSEC or Bangladesh Bank or director, shareholder, unit holder or foreign other regulatory authority from time to time. portfolio investor (FPI); vi) Through issuance of Cash Dividend warrant and Tax matters send it through post in case of non-availability of Tax will be deducted at source as per applicable tax laws. information of the shareholder or unit holder. Amendments / Modifications Manner and procedure of stock dividend To the extent any change/amendment is required in distribution: terms of any applicable law or change in regulations, the The stock dividend shall be credited within 30 (thirty) regulations would prevail over the policy and the provisions days of approval subject to the clearance of the regulatory in the policy would be modified in due course to make it requirement [if any from Bangladesh Bank, exchange(s) consistent with the law of the land. Such amended policy and the Central Depository Bangladesh Limited (CDBL)]: shall be placed before the Board for approval. i) To the BO account; Disclosure Policy ii) To the suspense BO Account for undistributed or The Dividend Distribution Policy shall be available on the unclaimed stock dividend/bonus shares; Bank’s website and shall also be disclosed in the Bank’s iii) The bonus dividend shall be transferred to Annual Report. the suspense BO account if BO account is not available or BO account is inactive; Summary of Unclaimed Dividend iv) The sale proceeds of fractional bonus dividend As of 31.12.2020 total amount of unclaimed dividend is shall be paid off as per circular of BSEC or Tk.12,580,929.25 against 6482 nos. of shareholders. risk management

RISK MANAGEMENT FRAMEWORK AND STRATEGY The objective of risk management system is to identify, and initiating timely and adequate measures to manage assess, record and actively manage any internal or and mitigate such risks within a risk-return framework. external risks that could pose a threat to the attainment In DBBL, only calculated risks are taken while conducting of the Bank’s corporate goals. banking business to strike a balance between risk and In this section a summarized position of various inherent return. Risk is clearly identified, mitigated or minimized and potential risks, DBBL is facing, while conducting its and if possible eliminated to protect capital and to business and operations and steps taken by the Bank to maximize value for the shareholders. effectively manage and mitigate such risks are discussed. DBBL follows the ‘Tone at the Top’ strategy for overall Risk Management Framework risk management. That means, ultimate responsibility for effective risk management of the Bank lies with the Risk is defined by DBBL as risk of potential losses Board of Directors. The Board itself and through delegated or foregone profits that can be triggered by internal authority to various committees of the Board, like Audit and external factors. Therefore, the objectives of risk Committee, Executive Committee and Risk Management management are identification of potential risks in our Committee set principles and limits, reviews and monitors operations and transactions, in our assets, liabilities, various risks to assess adequacy of the system and income, cost and off-balance sheet exposures and to ensure that the Bank is operating within approved independent measurement and assessment of such risks systems & procedures. DBBL RISK MANAGEMENT FRAMEWORK

Identification of risks / events Decision Decision making making

• Controlling Risk assessment & • Reporting measurement

Decision Decision making making

• Risk response • Monitoring • Information & • Mentoring communication

Decision making

ANNUAL REPORT 2020 131 Through delegated authority, management committees, adequately, and competently staffed internal audit like ALCO, Credit Risk Management Committee, function, which includes: Management Committee (MANCOM) and Risk Management Committee also oversee and ensure that i. Acting in accordance with recognized international sufficient risk management systems are in place and standards for the practice of internal auditing; these are consistently applied to protect the interest of ii. Reporting to a sufficiently high level in the the Bank. organization to be able to perform its duties DBBL also follows the Three (3) Lines of Defense (LoD) independently; and approach of modern risk management for the Bank-wide iii. Having an active and effective reporting line to the comprehensive risk management. Three (3) LoD of DBBL governing body. is as under: However, external auditors, regulators, and other external First Line of Defense – Business and Operational bodies reside outside the Bank’s structure, but they Segment/ Units: includes those functional divisions/ can have an important role in overall governance and clusters/ branches/ units/ segments who own the control structure of the Bank. These stakeholders are risks associated with their operational area/ portfolio also considered as additional lines of defense, providing and primarily responsible for managing risks under the assurance to the Bank’s shareholders, including the respective regulatory directives for day-to-day affairs of Board/ senior management. operations/ business of banks. A wide range of tools and techniques are used to address Adequate managerial and supervisory controls have been & mitigate all kinds of inherent and potential risks in in place to ensure compliance and to highlight control banking operations. The Bank attaches highest priority breakdown, inadequate processes, and unexpected to establish, maintain and upgrade risk management events. infrastructure, systems and procedures. In this regard, sufficient resources are allocated to improve skills and Second Line of Defense-Risk Management Division and expertise of relevant banking professionals to manage the other Back-Offices: includes those divisions/ clusters/ risk effectively. The policies and procedures are approved units/ segments of the operations who are responsible by the Board and assessed on a regular basis to bring for managing risk and ensuring the compliance functions these to the level of satisfaction required to manage & to help build and/ or monitor the first line-of-defense mitigate the risks adequately and consistently. controls. Top of the all functional divisions/ clusters/ units, Risk Management Division (RMD) is entrusted Elements of DBBL Risk Management to play a pivotal role for bank-wide risk management in Framework coordination with all concerned of the Bank. With a view to achieving the overall goal and objective Third Line of Defense – Internal Control & Compliance: of the Bank through optimization of shareholders’ value Internal auditors provide the Board/ Senior Management and to protect the depositors’ interest through trust with comprehensive assurance based on the highest level & confidence on a sustained fashion, DBBL considers of independence and objectivity within the organization. the following key elements in its risk management Internal audit provides assurance on the effectiveness framework: of governance, risk management, and internal controls, 1. Risk governance, Infrastructure and supporting risk including the manner in which the first and second lines of policies; defense achieve risk management and control objectives. 2. Individual (per financial transaction) and Overall Internal audit actively contributes to effective (entire portfolio basis) Risk Appetite with regard to organizational governance providing certain conditions Capital, Liquidity and Profitability of the Bank; and fostering its independence and professionalism are met. Best practice is to establish and maintain an independent, 3. Ensuring regulatory reporting and compliance. RISK MANAGEMENT PROCEDURE policies are regularly reviewed and updated to keep pace with the changing operating environment, technology and Approved predetermined policies and guidelines regulatory requirements. Meticulous compliance with the established procedures are ensured to satisfy that the To ensure that risks are properly addressed and protected Bank is operating within approved procedures and limits for sustainable development of the Bank, there are and that risks are within tolerable limits to effectively approved policies and procedures covering all the risk ensure long term solvency and sustainable growth of the areas i.e. credit risk, operational risk and market risk. Bank. These are formulated taking into account Bangladesh Bank’s Guidelines on managing core risks on Asset- Risk management infrastructure Liability Risk Management, Credit Risk Management, Internal Control & Compliance Risk Management, Risk management procedures are approved, monitored, Foreign Exchange Risk Management, Information & and mitigated at various stages of the Bank with a Communication Technology Risk Management and Money combination of Board, its committees, management Laundering & Terrorist Financing Risk Management as committees, management units, Internal Control & well as the business environment in which the Bank Compliance Division and Risk Management Division. The operates, specific needs for particular type of operations hierarchy of DBBL risk management infrastructure is as or transactions and international best practice. These under:

DBBL RISK MANAGEMENT INFRASTRUCTURE

Board

Execuve Risk Management Audit Commiee Commiee Commiee

Internal Control & Compliance Division

Senior Management- Risk Drivers Managing Director & CEO, Deputy Managing Directors, Risk External and CXOs and other Senior Officials Management Internal Division Events

Central Credit Risk ALM Compliance Management Purchase Management Commiee Commiee Commiee Commiee Commiee (CCC)

Business Units/ Lines/ Segments

ANNUAL REPORT 2020 133 Board of Directors Audit Committee of the Board

The Board oversees and approves all major risk Audit Committee independently monitors all activities management policies and parameters taking into account of banking operations involving credit risks, operational market condition, regulatory requirements and lessons risks and market risks through Internal Control & learned in the past. While setting policies and parameters Compliance Division (IC&CD) of the Bank. Risk based for credit, operational and market risks, a balance is audit plan for IC&CD is approved by the Committee and maintained for ensuring smooth banking operations to its implementation is monitored on a regular basis to protect downside risk emanating from potential loss or ensure that all risk factors are adequately addressed and foregone income and to protect interest of shareholders any deviation is quickly corrected to ensure sustainable and depositors. operation of banking activities. Role of the Board of Directors (BODs) Risk Management Committee of the Board a) Defining the risk appetite; In compliance with the Sub-section (3) of Section 15Kha of the Bank Company Act, 1991 (Amended up to 2018) and b) Ensuring annual business plan are in line with risk the BRPD Circular No. 11 dated 27 October 2013 issued by appetite; Bangladesh Bank, “Risk Management Committee of the c) Designing the organizational structure to manage Board” has been formed. The Terms of Reference (ToR) risk within the Bank; of the Committee is determined as per the guidelines/ circulars of Bangladesh Bank issued and in-force from d) Understanding the inherent risks of the Bank; time to time. e) Reviewing and approving risk management policies As per the Terms of Reference (ToR), seven (7) meetings at least annually; of Risk Management Committee of the Board were held during 2020. f) Enforcing and using adequate record keeping and reporting systems; In compliance with Risk Management Guidelines for Banks, Circulated vide DOS Circular No. 4 dated 8 October g) Reviewing and approving limits at least annually; 2018 of BB, following developments have been made during the year: h) Approving the credit proposals considered as large loan exposures as defined by Bangladesh Bank (i.e. i. Minutes of the Board Risk Management exposures to a single person/ counterparty or a group Committee meetings have been submitting to BB equal to or greater than 10% of the Bank’s regulatory within 7 days of the meeting; capital); and ii. Risk Management Division (RMD) has been i) Monitoring the compliance with overall risk reporting the high-risk related matters, identified management policies and limits. by the management-level risk committee, directly to the Board Risk Management Executive Committee (EC) of the Board Committee; and providing a copy to the Managing Director & CEO for information; Executive Committee of the Board is responsible to oversee that the management and its committees are iii. The Comprehensive Risk Management Report operating within approved limits and authorities and that (CRMR) for the month of June and December all major risks are managed & mitigated effectively and are being submitted to Bangladesh Bank. The potential and actual losses arising from risks are within monthly risk management report for the months the acceptable limits. EC also approves all credit proposals except June and December have also been except the large loan proposals, administrative proposals submitting to BB within the stipulated time; and and major purchases as recommended by the Credit Risk iv. The resolutions/ decisions of the meetings were Management Committee, Management Committee and also conveyed to all concerned of the Bank for Purchase Committee respectively. ensuring their compliance. Role of Risk Management Committee of measured, monitored, and controlled adequately; the Board m. Establishing committees and subcommittees to be in a. Formulating and reviewing (at least annually) risk charge of ongoing risk management functions; and management policies and strategies for sound risk n. Assessing overall effectiveness of risk management management; functions on yearly basis. b. Monitoring implementation of risk management Management Committees policies & process to ensure effective prevention and control measures; Committees like Credit Risk Management Committee, c. Supervising the activities of Risk Management Asset-Liability Management Committee (ALCO), Purchase Committee at management level; Committee, Management Committee (MANCOM), Recruitment Committee, Supervisory Review Process d. Supervising and monitoring the compliance of core (SRP) Team comprising of senior executives and concerned risks management practices (asset-liability risk management, credit risk management, foreign heads of functional divisions ensure compliance with all exchange risk management, internal control & relevant risk management policies and strategies. On compliance risk management, anti money laundering top of these, a high level Risk Management Committee risk management, information & communication through Risk Management Division is overseeing and technology risk management including other risk mitigating all the major existing and potential risks, the related guidelines); Bank is facing, in carrying out its business and operational activities. e. Ensuring formulation and review of risk appetite, limits and recommending these to Board of Directors Management units for their review and approval; Management units like Credit Risk Management Division, f. Oversee the ‘cause’ and ‘effect’ relationship of Treasury Division, Credit Administration Division, Special risk identification, measurement and its ultimate Asset Management Division, Money Laundering & impact on bank’s capital. That means, the Terrorist Financing Prevention Division, Sustainable Committee reviews the risk management and capital Finance unit, Vigilance Cell, Central Customer Service management functions of the Bank; & Complaint Management Cell etc. ensure and monitor g. Analyzing all existing and probable risk issues in risk management system and compliance with all the meeting, taking appropriate decisions for risk approved limits, procedures, regulatory stipulations at all mitigation, incorporating the same in the meeting operational levels on a daily basis. minutes and ensuring follow up of the decisions for proper implementation; Internal Control & Compliance Division directly reporting to Audit Committee of h. Submitting proposal, suggestions & summary of the Board Risk Management Committee meetings to Board of Directors at least on quarterly basis; Internal Control & Compliance Division (IC&CD) on a regular basis independently verifies compliance with all approved i. Ensuring sufficient & efficient staff resources for risk management and internal control policies. Deviations RMD; Ensuring appropriate knowledge, experience, are identified, reported and corrected to mitigate risk on a and expertise of lower-level managers and staff continuous basis and to ensure that the Bank is operating involved in risk management; in compliance with all approved and established policies. j. Ensuring formation of adequate organizational Internal Control & Compliance Division directly reports to structure for managing risks within the bank; the Audit Committee of the Board. k. Establishing standards of ethics and integrity for Risk Governance staff and enforcing these standards; We seek to promote a strong risk culture throughout l. Identifying risks involved in new products and DBBL. Our aim is to help reinforce our resilience by activities and ensuring that the risks can be

ANNUAL REPORT 2020 135 encouraging a holistic approach for risk-return trade Credit Risk off as well as the effective management of Bank’s risk, capital and reputational profile. Risks are assumed in Credit risk is the most significant and inherent risk in connection with the business and as such the following banking business. Every loan exposure or transaction principles underpin risk culture within the Bank: with Counterparty involves the Bank to some extent of credit risks. Credit Risk Management is at the heart of - Every risk taking requirement to be approved within the risk management framework; the overall risk management system of the Bank. It is designed and regularly updated to identify, measure, - Risk taking requirement to be adequately manage and mitigate credit risk to maintain and improve compensated; quality of loan portfolio and reduce actual loan losses - Risk should be continuously monitored and and to ensure that approved processes are followed and managed; and appropriate due diligence are made in approving new - Aspiring to added value to shareholders' equity credit facilities and renewals. and to protect the depositors' interest. CREDIT RISK MANAGEMENT INFRASTRUCTURE OF DBBL

Board

Risk Management Execuve CommieeAudit Commiee Commiee

Credit Commiee of the Bank

Managing Director & CEO Risk Management Internal Control & Division Compliance Division Deputy Managing Directors

Credit Risk Management

Branch/ Small and Retail Business Credit Special Asset Credit Risk Cluster/ Medium Division/ Management Management Administraon Corporate/ Enterprise e- Business Division Division Division Business Division Division Division PRINCIPLES USED FOR A SOUND CREDIT iv. Separate Credit Administration Division for RISK MANAGEMENT CULTURE IN DBBL documentation INCLUDE THE FOLLOWING AMONG OTHERS A separate credit administration division confirms Trade –off Between Risk and Return: Risk is taken that perfected security documents are in place before considering the interest of the stakeholders, in line with disbursement. DBBL is continuing a unique process of strategy and risk appetite of the Bank. rechecking security documentation by a second legal adviser other than the lawyer who vetted it originally; Responsibility and Accountability: Entrusted employees ensure that risk- taking is disciplined and focused. Risk v. Independent Special Asset Management Division is taken only by delegated authorities and where there is appropriate infrastructure and resources. DBBL maintains An independent and fully dedicated special asset a clear and transparent process for all credit risk-taking management division monitors the performance and actions. recovery of loans, identify early signs of delinquencies in portfolio and take corrective measures including Anticipation: DBBL seeks to anticipate future potential legal actions to mitigate risks, improve loan quality risks and aims to ensure awareness of all known risks. and to ensure recovery of loans on time. This division also monitors risk status of loan portfolio and ensures Competitive Advantage: DBBL seeks to achieve adequate loan loss provision; competitive advantage through effective and efficient risk management and control practices. vi. Maintenance of adequate provision & Salient features of credit risk management suspension of interest of DBBL Interest accrued on classified loan is suspended and adequate provision is maintained there-against as per The salient features of credit risk management practices Bangladesh Bank’s Guidelines; have been put in place at different tiers of DBBL Board and the management is as under: vii. Conducting Internal Credit Risk Rating (ICRR) i. Credit policy approved by the Board and Credit Risk Grading (CRG)

The Board approves the major policy guidelines, growth In order to proper identification and appropriate strategy, exposure limits for particular sector, product, management of credit risk, Bangladesh Bank revised the individual company and group, keeping in view regulatory “Credit Risk Grading System” and introduced “Guidelines compliance, risk management strategy and industry best on Internal Credit Risk Rating System (ICRRS) for Banks”. practice. Pursuant to BRPD Circular No. 16 dated 30 October 2018 “Guidelines on Internal Credit Risk Rating System (ICRRS) In compliance with the Bangladesh Bank directive, Board for Banks” and BRPD Circular Letter No. 12 dated 20 June approves the limits and other terms & conditions of credit 2019 bank mandatorily enforced newly issued/revised proposals falls under category of large loan as defined by guideline and model on ICRRS from 1 October 2019 where Bangladesh Bank; applicable. In other cases, where ICRRS is not applicable, ii. Credit approval is delegated properly earlier circulated “Credit Risk Grading System” is being continued for credit risk assessment. Credit approval authorities are carefully delegated to the Executive Committee of the Board and appropriate level Internal Credit Risk Rating (ICRR) and Credit Risk Grading of management to strike a balance between adequate (CRG) are important tools for credit risk management as control and flexibility in credit operations to ensure full they help the Banks & financial institutions to understand transparency and accountability at all levels; various dimensions of risk involved in different credit iii. Independent Credit Risk Management Divisions transactions. The aggregation of such rating/grading across the borrowers, activities and the lines of business There are two independent credit risk management can provide better assessment of the quality of credit divisions for Corporate and Retail & SME credit portfolio to assess credit risks and suggest/ recommend for portfolio of a bank. The system is vital to take decisions mitigations approving every credit proposal under their both at the pre- sanction stage as well as post-sanction jurisdiction; stage.

ANNUAL REPORT 2020 137 viii. Borrowers’ credit rating and capital requirement under Basel III are substantially higher. Although the concept of borrowers’ credit rating According to Pillar 1 of Basel III, RWA of banks is started in our industry with the introduction of Basel II calculated against Credit Risk, Market Risk and capital measurement norms in 2010; it has become a Operational Risk. As per guideline on ‘Risk Based major challenge for our banking sector to maintain the Capital Adequacy for Banks’, calculation of RWA follows increased CRAR under Basel III with the backdrop of Standardized Approach for Credit Risk, Standardized limited scope of generating capital internally due to lower Approach for Market Risk and Basic Indicator Approach interest/ profit margin attributing for high competition, for Operational Risk. Under the Standardized Approach and increasing trend of operating costs to support of the Risk Based Capital Adequacy framework (Basel III), the enhanced business activities, increasing provision Risk Weighted Asset (RWA) against credit risk for the requirement for loans & advances etc. corporate and SME borrowers are determined on the basis of credit rating assessed by External Credit Assessment Against this backdrop, however, DBBL has taken the Institutions (ECAIs). challenge positively. As a result, out of total Taka 223,020 million of loan of the Bank eligible for credit rating Measuring RWA for credit risk under standardized (corporate and SME), Taka 182,201 million (81.7 %) of approach, in absence of credit rating of the borrowers, eligible loan exposures) has been brought under the rating risk weight for the corporate loan is assigned 125% on purview at the end of 2020. outstanding loans. As a result, risk weighted assets

A comparative position of rated exposure of the Bank at different risk weights i.e. 20%, 50%, and 100% as of 31 December 2020 and 31 December 2019 is furnished below:

91,320

80,667

53,157 53,180

35,036 aka 24,150 In Million T 2020 2019 2020 2019 2020 2019 20% 50% 100% RATED EXPOSURES

RWA Mix (%) as on 31 Dec 2020 RWA Mix (%) as on 31 Dec 2019 30% 34% (BDT 53,157 (BDT 53,180 Million) Million)

19% (BDT 35,036 Million) 15% (BDT 24,150 51% Million) (BDT 91,320 Million) 51% (BDT 80,667 Million)

RWA @ 20% risk weight RWA @ 20% risk weight RWA @ 50% risk weight RWA @ 100% risk weight RWA @ 50% risk weight RWA @ 100% risk weight ix. Credit operations are subject to independent all risk management policies, sets limits and reviews Internal Audit compliance on a regular basis. The overall objective is to provide cost effective funding to finance the asset growth Internal Control & Compliance Division independently and trade related transactions, optimize the funding verifies and ensures, at least once in a year, compliance cost, increase spread with the lowest possible liquidity, with approved lending guidelines, Bangladesh Bank maturity, foreign exchange and interest rate risks. guidelines, operational procedures, adequacy of internal control and documentation; Interest rate risk x. Early warning system Interest rate risk is the potential impact on the Bank’s earnings and net asset value due to changes in Operation and performance of loans are regularly market interest rates. Interest rate risk is the result of monitored to trigger early warning system to address mismatches of interest rate re-pricing of financial assets the loans whose performance show any deteriorating and liabilities. trend enabling the Bank to grow its credit portfolio in a sustainable way to ensure higher quality and lower risk DBBL uses the following tools for measuring the interest with the ultimate objective to protect the interest of rate risk: depositors and shareholders; a. Gap analysis xi. Reporting to Board/ Executive Committee/ Risk Under this system, a gap i.e. the difference between Management Committee the amount of financial assets and the amount of Overall quality, performance, recovery status, risks liabilities is calculated at a pre- determined time bucket. status, adequacy of provision of loan portfolio are The interest rate factor (say 1%) is then applied on regularly reported to the Board of Directors/ Executive the assessed financial value of Gap for measuring the Committee/ Risk Management Committee of the Board earning impact due to movement of interest rate. for information and guidance; and Based on the position of financial assets and liabilities xii. Addressing environmental issues as of 31 December 2020, the Bank measured that, with Apart from significant financial, business, management, the 1% rise in interest rate for all its financial assets and security risk, DBBL also considers the environmental risk liabilities, Bank’s yearly earnings will be increased by of the borrowers while processing the loan proposals Taka 112.2 million and in case of interest rate cut by 1%, especially in case of project financing, term financing the position will be vice-versa. For detail calculation, the etc. under the purview of environmental due diligence earnings impact at each time bucket is shown at Page stipulated by the concerned authority and Bangladesh 173 of this Annual Report. Bank. Market risk b. Duration analysis Market risk is the risk of losses in On and Off-balance Duration is the time-weighted average maturity of the sheet positions arising from movements in market price present value of the cash flows from on balance sheet such as changes in interest rate and price of equity, assets and liabilities. It measures the relative sensitivity foreign exchange and commodity. As such, market risk of the value of these instruments to changing interest consists of the followings basic risk parameters as under: rates, and therefore reflects on the economic value i.e. the present value of shareholders’ equity of the Bank.

Market Risk Foreign Exchange Risk Foreign exchange risk is the potential loss arising from changes in foreign currency exchange rate in either Interest Rate Foreign Equity Price Commodity Risk Exchange Risk Risk Risk direction. Assets and liabilities denominated in foreign currencies generally entail foreign exchange risks. The Bank operates its foreign exchange and money The Treasury Division manages the Market risk including market activities under a centralized and single functional the liquidity, interest rate and foreign exchange risks with area. DBBL’s dealing room is equipped with advanced oversight from Asset-Liability Management Committee technology and experienced personnel. Bank’s Exchange (ALCO) comprising senior executives of the Bank. ALCO is Rate Committee meets on a daily basis to review the chaired by the Managing Director & CEO. The Committee prevailing market condition, exchange rate, exposure and meets at least once in a month. The Board approves transactions to mitigate foreign exchange risk.

ANNUAL REPORT 2020 139 Liquidity risks about a robust framework which will identify, assess and manage the financial risks. In order to achieve this target, Liquidity risk is the risk that we may not meet our the internal audit of banks is necessary. financial obligation as they become due. Liquidity risks also include our inability to liquidate any asset at A periodic internal audit is required to monitor the bank’s reasonable price in a timely manner. It is the policy of system of internal control and procedures. Good internal the Bank to maintain adequate liquidity at all times audit process helps the management in the effective in both local and foreign currencies. Liquidity risks are discharge of its responsibilities. It gives them the managed on a short, medium and long term basis. There assurance of the risk and operational performance of the are approved limits for credit/ deposit ratio, liquid assets bank. Based on the volume and value of its transactions, to total assets ratio, maturity mismatch, commitments every bank should conduct an internal audit to fulfill its for both on-balance sheet and off-balance sheet items responsibilities and to achieve its objectives. and borrowing from money market to ensure that loans and investments are funded by stable sources, maturity Generally, the scope of any bank’s internal audit revolves mismatches are within limits and that cash inflow from around the following: maturities of assets, customer deposits in a given period • Evaluating the effectiveness of the internal control exceeds cash outflow by a comfortable margin even under systems and monitor its application; a stressed liquidity scenario. • Review the adequacy of the risk management Operational Risk procedures and methodologies; • Checking the efficiency of routine operations of the Operational risk can be defined as the possibilities bank; of losses resulting from inadequacy or failed internal processes, systems and people or from external events. • Evaluate the reliability and accuracy of the financial records and reports; Operational risk includes legal and regulatory risk, • Review the management information system and the business process and change risk, fiduciary or disclosure efficiency of the electronic banking services; breaches, technology failure, financial crime and • Implementation of policies and procedures and environmental risk. It exists in some form in every Bank ensure its effectiveness; business and function. Operational risk can not only result in financial loss, but also regulatory sanctions and • Ensure that the procedures comply with the legal and damage to the Bank’s reputation. DBBL is successful at regulatory requirements; managing operational risk with a view to safeguarding • The undertaking of fraud investigations, if required; client assets and preserving shareholder value. • Ensuring the adequacy of procedures to safeguard DBBL manages operational risks in the following manner: the bank’s assets; and 1. Risks are identified with reference to the relevant • Monitoring the bank’s Non-Performing Assets (NPA) policy manuals, processes, and practices; and alarming the management when required. 2. Departmental Control Function Check List (DCFCL) is With the Independent Functions of- in place for evaluation of control; • Bank’s internal audit function must be independent 3. Review of safety and control measures of premises of the other audit activities – concurrent audit and and equipments; control process; 4. Management of technological and information • Internal audit team must be given the appropriate security risks; and authority to carry out their functions with objectivity 5. Ensuring the maintenance of the Bank’s business and must be free to report its findings; continuity plan (BCP) and crisis management policy. • Internal audit team head should have the authority Internal Control & Compliance Risk to communicate findings directly to the board of directors, external auditors, audit committee, etc.; Banking sector in Bangladesh witnessing major changes • Internal audit function has to be impartial i.e. it in recent years, as a result of which new regulations should perform its functions free from bias and are being brought into practice by Central Bank of the interference; and country, Bangladesh Bank. With the implementation of Basel III requirements, more importance is given to • Internal audit compensation scheme must be risk-based bank audits. With more guidance and circulars consistent with the objectives of the audit and they from Central Bank for regulating the banking business should be free from any conflict of interest with that in the country, bank’s management is focused to bring of the bank. Dutch-Bangla Bank Limited (DBBL) has established an The units have been functioning independently & appropriate and effective internal control environment separately with direct reporting lines to the Audit in its operation with standard operating procedures in Committee of the Board & Head of IC&CD. In addition, managing the businesses. It has established Internal Departmental Control Function Check List (DCFCL) has Audit & Inspection division (IC&CD) to ensure internal been introduced in the branches & divisions at Head Office control environment in the Bank. under direct supervision of Monitoring Unit of IC&CD which ensures standard internal control, compliance with An effective internal audit function provides independent regulatory rules and regulations as well as general banking assurance to the board of directors and senior norms and procedures. Documentation Check List has management on the quality and effectiveness of a been brought in practice under supervision of a dedicated bank’s internal control, risk management and governance unit. Exceptions are addressed, monitored and corrected systems and processes, thereby helping the board and on a regular basis. Policy guidelines on Risk Based Internal senior management protect their organization and its Audit (RBIA) system have been formulated and the reputation. branches have already been brought under RBIA purview. As per the ‘Guidelines on Internal Control & Compliance As per RBIA, marks/scores have been allocated for rating in Banks’ issued by Bangladesh Bank vide BRPD Circular of the branches in terms of business risk & compliance No. 06 dated 04 September 2016, the Head of ICCD is risks. The branches scoring more are being subjected to reporting his/her activities and findings to the Senior audit with more frequency. It is the policy of the Bank to Management. However, the Head of Audit, although put all branches of the Bank under any form of audit at being a part of ICCD administratively, is reporting least once in a year and IC & CD has been working in that directly to the Audit Committee of the Board and will be direction. ICC secretariat has been formed with required responsible to the Audit Committee of the Board. number of staffs.

Internal Control and Compliance (ICC) operates In 2020, Fraud Management Policy & Audit Process independently as a division consisting three (03) units Manual was prepared and were duly approved by the th (Audit & Inspection, Compliance, Monitoring) along with Board of Directors. Moreover, 4 revision of ICC Policy & ICC Secretariat with prime responsibility to determine Manual was completed and also approved by the Board of risks by evaluating overall Business, Operations & Credit Directors. Now IC & CD is fully complied with all policy of Portfolios of the Bank. The key objective of ICC is to regulator. The Internal Audit & Inspection of Dutch-Bangla assist and guide in all aspects of the bank using adequate Bank Limited is independent from the internal control resources for identification of weaknesses and taking process in order to avoid any conflict of interest and it is appropriate measures to overcome the same to be a given appropriate standing within the Bank to carry out compliant bank. its assignments. The management of Dutch-Bangla Bank Limited ensures that the Internal Audit & Inspection staff Organogram of ICCD is as under: perform their duties with objectivity and impartiality.

BOARD OF DIRECTORS Vigilance Cell

AUDIT COMMITTEE OF THE BOARD Vigilance Cell of the Bank was established in 2009 with dedicated teams to strengthen operational risk management of the Bank. The team conducts short MANAGING DIRECTOR & CEO but surprise inspection on the operational activities of the branches and divisions of DBBL at regular intervals HEAD OF IC&CD highlighting areas of strength and weakness of the unit inspected and submits report to the Managing Director & CEO with suggestions for improvement of working HEAD OF AUDIT & HEAD OF HEAD OF standard and mitigation of the deficiencies detected. INSPECTION MONITORING COMPLIANCE They make special reporting in case of major flaws in IC&CD SECRETARIAT operational matters of the unit to the Managing Director

ANNUAL REPORT 2020 141 & CEO with recommendation for remedial measures and opportunity to take its banking facilities at the door-steps of administrative actions, if needed. every citizen of Bangladesh. Thus it relentlessly endeavors to improve its services and accordingly, in 2020 all the Besides, the team conducts investigations on any special complaints were efficiently resolved with utmost dedication situation that crops up and submits detailed report to the of the CCS & CMC. concerned authority of the Bank for necessary action. National Integrity Strategy (NIS) Cell Under instruction from EC of the Board, this Cell checks large loans, LCs etc. exceeding Taka 50.0 million with the In line with the Government’s National Integrity Strategy high risk branches to mitigate the irregularities so as to (NIS) and Bangladesh Bank directives, DBBL has formed minimize operational risk. Central Ethics Committee and NIS Cell to implement All these activities of the Vigilance Cell are devoted to various ethical standards as per statutory annual action address and mitigate operational risks of the Bank in a plan. The Code of Conduct has been reinforced and to more effective way to ensure reliability and completeness create awareness among customers, staff & mass people, of financial and management information and to ensure Bank’s website has been updated, training conducted and compliance with legal and regulatory requirements. awareness-messages have been published on the news papers and social medias periodically. DBBL has created Central Customer Service & Complaint awareness and precautionary measures against spreading Management Cell (CCS & CMC) of COVID-19. To prevent bribery & corruption and to ensure Dutch-Bangla Bank Limited (DBBL) always emphasizes transparent banking operations, several digital & secured on quality & accuracy in service and prompt resolution of procedures are implemented. To ensure fair treatment any complaint raised. However, the year 2020 was very and accountability, Bank already has implemented online challenging to ensure customers’ required services due response system, Video & Tele Conference and social to restrictions on physical movements, social distancing, media platforms to settle customer problems. Central lockdowns etc. at initial stages and obviously there Ethics Committee (CEC) meetings are held regularly has been a significant pressure upon Call Center, ATMs, and actions are taken to promote integrity. Periodical Mobile Banking, Rocket, NexusPay, e-Banking, etc. And Branch meetings, public hearing, etc. are conducted on eventually it has been proven that, due to wide range of Ethics. In general, throughout the year an environment digital & on line channels and country wide large network of ethical culture is being nourished to ensure we remain DBBL has been the most trusted and preferred bank in as ‘Customer’s Trusted Partner’. To institutionalize good the country which has provided its services “24 hours- governance, DBBL distributes Integrity Award among a-day & 7 days-a-week”. Restrictions of pandemic could 5 Best Employees at different levels as per Bangladesh not defeat the spirit of DBBL’s staff and even during Bank guideline. restricted lockdown situation DBBL had kept most of Money Laundering Risk and Terrorist Financing its branches operative, maintaining the health hygiene Risk related directives of World Health Organization (WHO). The Government through its bodies, particularly DBBL has upgraded and enlarged its Call Center with more ‘Bangladesh Financial Intelligence Unit (BFIU)’ has been resources and systems which is now more capable to cater playing a vital role to enhance the compliance status of services to customers instantly which is a public demand AML/CFT among the local banks & financial institutions. now-a-days for Covid-19 restrictions. Now people prefer to Bangladesh has also become the prestigious Co-Chair of solve their banking needs virtually instead of going physically the APG (Asia-Pacific Group on Money Laundering). All to branches. Keeping customers’ such need in mind DBBL these have made our country viable & reliable to both has opened its extensive array of on line facilities like paying the global regulators and investors. DBBL has become Utility Bills, School/ College fees, workers’ salary/incentives, confident to nourish its financial system and structure e-commerce, Holding Taxes/Tolls, Trade license fee etc. in with more dynamism and professionalism to protect both Rocket & in NexusPay. Presently, as the Bank with its customers’ deposits & reputation from any Money- about 35 million customers, DBBL does not want to miss any Laundering (ML) or Terrorist Financing (TF) risks. The Bank under the legal framework of the “Money • DBBL arranged BAMLCO Conference on 12 December Laundering Prevention Act, 2012 (MLPA, amended in 2020 in virtual platform to impart recent AML/ 2015)” and Anti Terrorism Act, 2009 (ATA, amended in CFT knowledge among 285 BAMLCOs of Branches/ 2013) has been pursuing the policy of strict compliance Divisions (Agent Banking, Mobile Banking, Financial with all regulatory directives and culture of good Inclusion, Centralized Trade Services, International governance in all aspects of its banking services & Division and Foreign Remittance). Resource persons operations. In 2020, DBBL took the following key measures from BFIU high-officials provided valued directives; to adequately mitigate and prevent the ML & TF risks: • Despite lockdown, proportionately a positive growth DBBL’s Top Management has shown strong and has been seen in submission of STR in 2020, which uncompromised stance in prevention of Money Laundering and combating terrorist financing. demonstrates proper functioning of our AML Accordingly, CEO’s Message circulated on 1 January 2020 structures/ systems and practices and vigilance of our evidenced the same; staff;

• Bank’s Policy Manual on Anti Money Laundering • Regular audit, Compliance Review etc. were (AML) & Combating Terrorist Financing (CTF) has undertaken mostly from off-site but with proper been revised and approved by the Board of Directors yardsticks covering all branches, key units, Agent of the Bank on 29 November 2020 being a part of banking & Rocket offices by both the Internal Audit annual governance exercise; team and ML & TF Prevention Division and the outcomes were acceptable; • BFIU on 12 March 2020 in a meeting has recognized DBBL as one of the best banks in reporting CTR, STR, • Improvement continued in Correspondent Banking Returns, etc timely and accurately; Relationships in 2020 and DBBL is bringing its • DBBL has been using ICC’s IMB (International standard up to the expected global requirements, Maritime Bureau) Report to track vessels & trade gradually; documents. Adverse Media Services from Hawker • With continuous update of MIS and guidance from Limited is being used on daily basis for saving the the Senior Management, the ML & TF Prevention Bank from any adverse reputational risks that may Division has assured a seamless Advisory & link to any transaction or client; Governance service to all staff; that led DBBL • National Identification Card (NID) verification, complete a successful year 2020 without any major Automated Sanction screening (Compliance link of regulatory concerns. Accuity), in-house Transaction Monitoring System, • DBBL’s MD & CEO, CAMLCO and other key executives etc. have been working smoothly; have attended international & national seminars/ • To uplift the monitoring standard at global webinars/conferences/training workshops, etc. to scale, DBBL has acquired world class automated keep them updated with concurrent developments in Transaction Monitoring Software (TMS); the areas of diverse financial crime compliance and accordingly taking the right directives to save DBBL • Adequate training coverage achieved in 2020, despite from any actual or potential financial crime. limitations due to COVID-19. We took the advantage of Virtual Training classes/ Webinars through which we Legal Risks not only covered the foundation and refresher trainings In DBBL, legal risks are covered by recognizing potential on AML/CFT but also conducted specialized training on TBML, Sanctions, e-KYC, Cyber crime, Terrorist losses from litigation or possible litigation at an early Financing, Risk Assessment, etc. taking assistance of stage and by formulating solutions for reducing, resources from BFIU, BIBM, UNODC, CTTC, AACOBB, restricting and avoiding such risks and creating adequate global forums and our training academy; provision there against.

ANNUAL REPORT 2020 143 OTHER RISKS internal policies of DBBL. The confidence also depends on conformity with generally accepted market norms Business Risk and standards in our business operations. The Board of Business risk covers the risk of losses arising from lower Directors is primarily responsible for compliance with all non-interest income and higher expenses from the applicable norms and regulations. The Board discharges budgeted amount. The business risk is resulted from the its responsibilities itself and through delegation of market condition, greater customer expectation and or authorities to Executive Committee, Audit Committee and technological development that may change compared to Risk Management Committee of the Board. The objective the assumptions made at the time of planning. is to identify any compliance risks at an early stage that may undermine the integrity and the success of DBBL and Business risk in DBBL is managed by setting clear targets to mitigate the risks in most appropriate way. for specific business units, in terms of business volume, income, cost, cost-income ratio, quality of assets etc. Technology Risk with an ongoing process of continuous improvement. Technology risk is the risk of financial loss arising from Reputational Risk failure, exploitation of vulnerabilities or other deficiencies in the electronic platforms that support our daily Reputational risk is defined as the risk of losses, falling operations and the system applications and infrastructure business volume or income as well as reduced value on which they belong to. As a component of operational of the company arising from business events that risk, technology risk is inherent not only in our IT assets, may reduce the confidence of the customers & clients, but also in the people and processes that interact with shareholders, investors, counterparties, business them. Cyber risk, which is part of technology risk, is the partners, credit rating agencies, regulators and general risk that our systems will not operate properly or will public in DBBL. be compromised as a result of cyber-attacks, security breaches, unauthorized access, loss or destruction of data, The branches and operational divisions are directly unavailability of service, computer viruses or other events responsible for reputational risks arising from their that could have an adverse security impact. Any such business operations. Reputational risks may also arise event could subject us to litigation or cause us to suffer from a deficiency in managing other risks. All risk must a financial loss, a disruption of our businesses, liability therefore be managed effectively in order to uphold to our clients, regulatory intervention or reputational the Bank’s reputation. The management ensures that damage. We could also be required to expend significant DBBL is aware of any changes in market perceptions as additional resources to modify our protective measures soon as possible. Accordingly, all business policies and or to investigate and remediate vulnerabilities or other transactions are subjected to careful consideration. DBBL exposures. Service and infrastructure disruption risks are takes necessary precautions to avoid business policies managed through our business continuity management and transactions that may result in significant tax, legal plan, our technology risk management program and or environmental risks. Reputational risk is also factored other contingency and resiliency plans. Although we have into major credit decisions that may lead to credit business continuity plans, our businesses face a wide proposal being declined. variety of operational risks, including technology risk Compliance Risk arising from dependencies on IT, third-party suppliers and the worldwide telecommunications infrastructure. The success of DBBL is largely dependent on the trust As a large IT investment financial services company and confidence of our existing and potential customers, in Bangladesh, we operate in a complex technological our shareholders, our staff, our regulators and the landscape covering our diverse business model. Ensuring general public in our integrity and ethical standard. The that the confidentiality, integrity and availability of confidence largely depends on meticulous compliance information assets are protected is critical to our with applicable legal and regulatory requirements and operations. Capital Plan and Management resilient banks and banking system’ in December, 2010 (updated in June, 2011). The Bank is committed to maintaining a strong capital base to support business growth, ensuring compliance The Basel III has brought some financial models, tools with all regulatory requirements, obtaining good credit & techniques namely, Liquidity Coverage Ratio (LCR), rating, risk management rating and CAMELS rating and Net Stable Funding Ratio (NSFR) and Financial Leverage having a cushion to absorb any unforeseen shocks arising for the financial intermediaries aiming to better risk from credit, operational, market risks and other residual management for a sustained and sound financial system risks. in addition to the Basel II. The level and quality of capital components are also made more stringent. Emphasis Capital is managed and monitored based on planned has been given to raise the Common Equity Tier 1 (CET 1) changes in the Bank’s business strategy, identified capital. A provision of creating capital conservation buffer and potential changes in its operating environment @2.50% of RWA with the CET 1 capital gradually is also or changes in its risk profile. As part of the Bank’s made. Raising of Tier 2 capital by revaluation of fixed comprehensive ICAAP, sources and uses of capital are assets, equity and investments are discouraged; rather measured and monitored through financial metrics, phased-in deduction of such capital elements has been including regulatory thresholds. during the course of Basel III implementation.

The capital maintenance and dividend policies of DBBL are In line with the international best practices, Bangladesh pursued taking into consideration of the following factors: Bank issued the guideline on Risk Based Capital Adequacy • Keeping sufficient cushion to absorb unforeseen (Revised Regulatory Capital Framework for banks in line shock or stress; with Basel III) vide BRPD Circular No. 18 dated 21 December 2014. • Increased capital requirement for sustainable business growth; The main features of this new regulatory guideline of BB for capital measurements are as under: • Cost effective options for raising Tier 1 and Tier 2 capital; A. To increase the quality and level of capital to ensure that banks are better able to absorb the unforeseen • Improving credit rating, risk management rating losses associated with the banking operations. To this and CAMELS rating of the Bank; end, components of capital are divided into 2 (two) Tiers, namely, • Meeting regulatory requirements; and 1. Tier 1 capital consisting of • Meeting covenants of lenders. i. Common Equity Tier 1 (CET 1) – mainly includes The Bank has been pursuing a dividend policy that must ensure satisfactory return for shareholders as well as • Paid-up share capital; sustainable growth of the Bank with adequate capital • Non-repayable share premium; in terms of regulatory requirement to protect long term interest of depositors and shareholders. • Statutory reserve;

Basel Capital Accord • Retained earnings; and

Following the lessons learnt from the financial crises • Dividend equalization account etc. began in the western economies in 2007 and gradually ii. Additional Tier 1 capital, includes spread all over the world, the Basel Committee on Banking Supervision (BCBS) upgraded the capital • Instruments (i.e. Bond) issued by banks measurement standard and released the final document subject to fulfilling the following criteria of ‘Basel III: A global regulatory framework for more

ANNUAL REPORT 2020 145  Maturity period – the instrument shall be v. Minimum total capital plus capital conservation perpetual i.e. no specific maturity; buffer should be 12.50%.

 Repurchase/ Buy-back/ Redemption- Implementation of Basel III Principal of the instruments may be Bangladesh Bank has set a Roadmap for implementation repaid through repurchase/ redemption of Basel III in banks from 2015 to 2019 and full only with prior approval of BB; and implementation from 1 January 2020 and onwards.  Dividend discretion- the bank must have full discretion at all times to cancel Implementation of BASEL III (Risk Based distributions/ payments. Capital Adequacy- RBCA for banks) – 2. Tier 2 capital Calibration between risk management and capital management • General provisions on unclassified loans and off-balance sheet exposures; and In order to have a sound and robust banking industry and to make the banks in Bangladesh more shock absorbent • Subordinated debt/ instruments issued by as well as to cope with international best practice for banks. risk management, Bangladesh Bank introduced 3 (three) BB also stipulated necessary deductions from Tier 1 and Pillars Capital Requirements as ‘Risk Based Capital Tier 2 Capital. Adequacy (RBCA) for Banks (Revised regulatory capital framework in line with Basel II)’ in our banking sector B. To increase the risk coverage of capital framework; effective from January, 2010. Subsequently, BB has C. To introduce leverage ratio to serve as a backstop to adopted the Basel III capital measurement norms and the risk-based capital measure; other stipulations regarding liquidity management from January, 2015. D. To raise the standards for the supervisory review process; and Under this framework, banks are required to make E. To widen the quantitative and qualitative disclosure accurate assessment of all the risks they are exposed to aspects for the stakeholders. and to maintain the required capital commensurate with their risk profile. Basel III has linked capital to the level of BB also sets the Minimum and Maximum limits risk management. Therefore, banks are required to have for maintenance of capital adequacy ratios in a effective risk management techniques in monitoring and phased manner starting from January, 2015, with full mitigating their risks. implementation of capital ratios from January, 2020 as under: Implementation of Pillar 1 – Minimum Capital Requirement (MCR) of Basel III i. Common Equity Tier 1 (CET 1) of at least 4.50% of total risk weighted assets (RWA); In compliance with the regulatory guidelines, DBBL measures the capital to risk weighted asset ratio (CRAR) ii. Tier 1 capital will be at least 6.0% of total RWA; under Basel III starting from January, 2015 and submitted iii. Minimum Capital to Risk-weighted Asset Ratio the same to BB on quarterly rest. (CRAR) will be 10% of RWA; Apart from CRAR, DBBL also assesses the Liquidity iv. In addition to minimum CRAR, Capital Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR) Conservation Buffer (CCB) @ 2.50% of RWA and Leverage Ratio and submits the same to BB within should be maintained in the form of CET 1; and the stipulated time. Regulatory Capital position of DBBL The year-wise capital position of the Bank is as under:

46,084

37,193 16,401 34,077

12,557 26,107 13,805 21,249 9,513 CET1/Tier 1 Capital

aka 6,311 29,683 24,636 20,272 Tier 2 Capital 14,938 16,593

2016 2017 2018 2019 2020 Capital in Million T Year

Capital to Risk-weighted Asset Ratio (CRAR) of DBBL

17.2% 15.6% 15.5% 13.1% 13.0% 6.1% 6.3% 5.2% 3.9% 4.7%

CET1/Tier 1 Capital Ratio

11.1% 9.3% 10.3% Tier 2 Capital Ratio 9.2% 8.3% In Percentage

2016 2017 2018 20192020 Year

Risk Weighted Asset (RWA) mix based on risk type of DBBL

RWA Mix (%) 2020 RWA Mix (%) 2019

14.3% 13.4% 2.1% 0.4%

83.6% 86.3%

Credit Risk Market Risk Credit Risk Market Risk Operational Risk Operational Risk

ANNUAL REPORT 2020 147 As of 31 December 2020 the LCR and NSFR of DBBL in a specified reporting format: stood at 182.1% and 103.6% respectively against the BB’s minimum threshold of 100%. i. Residual risk; ii. Concentration risk; Besides, at the end of 2020, Leverage Ratio of DBBL stood at 5.7% against regulatory requirement of iii. Liquidity risk; minimum 3%. iv. Reputation risk; Implementation of Pillar 2 – Supervisory Review Process: SRP-SREP Dialogue on v. Strategic risk; ICAAP vi. Settlement risk; Bangladesh Bank has also implemented the Pillar 2 of vii. Evaluation of Core Risk Management; RBCA framework. The key principle of the Supervisory Review Process (SRP) is that “banks have a process for viii. Environmental & climate change risk; and assessing overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital at an ix. Other material risk. adequate level”. Banks are instructed to form a SRP team, In addition to the numerical calculation of capital where risk management division is an integral part, and requirement against the risks under Pillar 2, Bank should to develop a process document called Internal Capital also submit the following supplementary documents to Adequacy Assessment Process (ICAAP) for assessing Bangladesh Bank for regulatory requirement of ICAAP their overall risk profile. reporting to demonstrate that they have proper risk The areas to be covered by the process document are management procedures, methods and tools in place to review of risk management and planning for adequate control the risks: capital against comprehensive risk profile including credit, • Internal audit report of the Bank; market, operational and all other risks which are not • Capital growth plan; captured in the process of determining MCR. • Valuation methodology; That is along with credit, market, operational risks; banks will allocate capital against other risks which are not • Assessment procedure and evaluation of report of captured in calculating MCR. each core risk;

Supervisory Review Evaluation Process (SREP) of • Wholesale borrowing and funding guidelines; Bangladesh Bank includes dialogue/ meeting between • Liquidity contingency plan; Bangladesh Bank and the Bank’s SRP team followed • Management Action Trigger (MAT); by findings/ evaluation of the Bank’s Internal Capital Adequacy Assessment Process (ICAAP). During SRP- • Fraud detection and management process; SREP dialogue/ meeting, Bangladesh Bank reviews and • Methodology for assessing customer service and determines additional capital to MCR of banks. evaluation report; With this end in view, in May 2014, Bangladesh Bank • Methodology for calculating weighted average cost issued the “Revised Process Document for SRP-SREP of fund; Dialogue on ICAAP’ to facilitate the dialogue for • Deposit growth plan; determination of capital requirement under Pillar 2 of Basel II. On the basis of the revised process document • Loans/ advances growth plan; and prescribed reporting format, banks have been advised • Profit growth plan; to submit their quantitative information regarding ICAAP based on 31 December 2014 onwards along with the • Stress testing report; and supplementary documents. Under the process document, • Copy of the Board Resolution through which the Bangladesh Bank also provided guidance to calculate statements on ICAAP under Supervisory Review required capital against the following risks under Pillar 2 Process have been approved. DBBL compliance towards the BB Importance of internal control system for instruction for implementation of Pillar 2 risk assessment and capital requirement In compliance with the BB instruction for implementation The Bank’s internal control structure is essential to the of Pillar 2 under Basel III, DBBL made the following capital assessment process. Effective control of the developments in 2020: capital assessment process includes an independent i. The Bank submitted the ICAAP Report for review and, where appropriate, the involvement of internal or external audits. The Bank’s Board of Directors calculation of capital requirement under Pillar has the responsibility to ensure that management 2 of Basel III for year ended 31 December 2019 establishes a system for assessing the various risks, with due approval of the Board of Directors; BB develops a system to relate risk to the Bank’s capital level, will arrange the SRP- SREP meeting on ICCAP and establishes a method for monitoring compliance with Report of 2019 of the Bank; and internal policies. ii. The Bank will submit the ICAAP report for the year-end 2020 within the stipulated time with Accordingly, risk factors and possible consequence of due approval of the Board of the Bank. every transaction and operation are considered by the management of DBBL for ensuring that Bank is operating Basel Unit/ Capital Management Desk and within approved risk management guidelines of Board Supervisory Review Process (SRP) Team of of Directors of the Bank within the broader framework DBBL were active in 2020 of Basel III guidelines of Bangladesh Bank. Board’s Risk Management Committee, Audit Committee, Internal DBBL has a separate Basel Unit to ensure implementation Auditors, External Auditors and Risk Management Division and full compliance with Basel Capital Accords. In are actively involved, wherever necessary, to assess addition, during the year 2020, the SRP team of DBBL compliance status and adequacy of capital of the Bank. has been active to review the Internal Capital Adequacy Assessment Process (ICAAP) for determining capital Implementation of Pillar 3 – Market requirement under Pillar 2 covering all residual risks in Discipline (Disclosures on risk based capital addition to risks covered under Pillar 1 i.e. credit risk, under Basel III) market risk or operational risk. DBBL fully comply with the disclosures framework under The Board approved Terms of References (ToRs), among Pillar III as stipulated by Bangladesh Bank. Under the disclosures framework, the qualitative and quantitative others, in brief, under which the SRP Team of DBBL has aspects of credit, market and operational risks along with been working are as under: the approaches applied for calculation of MCR are also i. Reviewing and upgradation of ICAAP document for disclosed. assessing the overall risk profile of the Bank; ii. Formulation of strategies for maintaining adequate The detailed disclosures under Pillar III for the year ended 31 December 2020 are furnished from Pages 155 to 186 of capital covering all risks under Pillar 1 and Pillar 2; this Annual Report. iii. Reviewing the stress testing results and setting strategies for improvement of the post shocked These disclosures are also posted in the Bank’s website in CRAR of the Bank; compliance with the BB directive. iv. SRP Team will be responsible for providing, DBBL Risk Management Division verification & authentication of data/ information entrusted with overall and integrated risk required for preparing the ICAAP reporting including management of the Bank preparation of possible SRP-SREP dialogue on their respective area of operation for determination of Bangladesh Bank (BB) continuously underscored the capital requirement of DBBL under Pillar 2; and importance for bringing dynamism and establishing better risk management system in the banks through v. The SRP Team should meet at least bi-monthly issuing independent risk management policy guidelines, (at least once in every two months) to monitor the regulatory reporting framework etc. In continuation of implementation of SRP of the Bank. these policy initiatives, Bangladesh Bank in 2011 instructed Mentionable that, the SRP team of DBBL was active in to prepare a Risk Management Paper (RMP) containing 2020 for working under the above-mentioned ToRs set by the analysis of all types of existing and probable risks the Board. During the year 2020, the SRP team of DBBL that might occur in future, place the same in their regular met 5 times. monthly meeting and submit the RMP along with the

ANNUAL REPORT 2020 149 decisions of the meetings to BB. Based on the RMP, BB BB has also developed rating procedure to quantify all regularly evaluates the risk management activities of possible risks based on available information in the CRMR, each bank and provides constructive recommendations minutes of RMP and board risk management committee to improve their conditions. Banks have to execute all the meetings, compliance status of previous quarters recommendations and submit their compliance reports submitted by banks and other sources. This risk rating is within a specified time frame. done on half yearly basis and carries a certain weightage In 2018, BB issued revised guideline called Risk in the management component of CAMELS rating. Management Guideline for banks. This guideline Compliance with the implementation of promotes an integrated, bank-wide approach to risk core risk management practice management which will facilitate banks in adopting contemporary methods to identify measure, monitor and Bangladesh Bank vide BRPD Circular No. 17 dated 7 control risks throughout their institutions. October 2003 instructed banks to prepare the core The guideline encompasses the most risks in banking risk management guidelines for key areas of banks’ companies of Bangladesh including credit risk, market operations, namely, (i) asset-liability/ balance sheet risk, liquidity risk, operational risk and other residue risks, risks; (ii) credit risk; (iii) foreign exchange risk; (iv) internal namely, compliance risk, strategic risk, money laundering control & compliance risk; and (v) money laundering risk risk, reputation risk etc. in line with the BB circulated indicative guideline for each The guideline, among others, outlined the following key area of core risk segment. Later, in 2007, BB included the issues for establishing a better risk management culture Information & Communication Technology (ICT) under the in the Bank: purview of ‘core risks’ of banks. a) Elements of a sound risk management system; In line with the international best practices and to bringing b) The Board and senior management oversight; dynamism in risk management for a sustainable financial c) Risk measurement, monitoring and management sector in Bangladesh, BB has upgraded & circulated the reporting system; and revised version of all core risks guidelines in March 2016 d) Internal control and comprehensive audits. for compliance by all banks. Keeping an adequate risk management framework in place is the responsibility of the Bank’s senior executives, In compliance with the BB instructions have been brought in particular the Managing Director & CEO, subject to the to us through core risk guidelines, DBBL have been under oversight of the Board of Directors (BOD). process for implementation of the new and upgraded issues. In September, 2015, BB introduced a new reporting format in the name of Comprehensive Risk Management Steps/ action taken for implementation of Report (CRMR) for banks in place of the previous core risk management format (RMP). Subsequently DOS Circular No. 4 dated 8 The Board of Directors of the Bank and its sub- October 2018 also retained the requirement of reporting CRMR. To make the risk management activities more committees, namely, Audit Committee, Risk Management effective, various types of contemporary risk issues and Committee etc. approves relevant guidelines, polices for a questionnaire (related to risk management structure, implementation of core risk management practices across credit policies & procedures, evaluation process of credit the Bank. The Board and its committees also review proposals, post sanction process, follow up & monitoring the implementation status, regulatory compliance and of loans, operation level risk verifications, liquidity risk, guide the management for ensuring the implementation etc.) are included in the format. of the core risk guidelines/ practices efficiently and effectively. Within the management, there are several The revised CRMR mainly includes both quantitative risk management committees, namely, ALCO, Credit Risk and qualitative analysis of different risk parameters. Management Committee and Management Committee The segment-wise (namely, credit risk, market risk, (MANCOM) for overseeing in the relevant risk exclusively. liquidity risk, operational risk) quantitative analysis are In addition to the risk management committee through carrying out through the actual position of the portfolio risk management division regularly assesses the overall vis-a-vis the approved internal or external risk limit set implementation status of core risk management corresponding to each risk parameter/ area. While the aspects and reports the same to the Risk Management qualitative analyses are made based on questionnaire Committee of the Board of the Bank on quarterly rest. check list for each segment of risk. a. Steps/measures taken in 2020 by the individual • Gap between rate sensitive assets and liabilities, functional divisions/respective management various ratios regarding liquid assets, expected committees; and loss from operational loss and the Capital to Risk Weighted Assets (CRAR) after applying stress b. Steps taken by the Risk Management Division test. for implementation of core risk management– synchronizing with capital requirement under Pillar 2 Tools, techniques and approaches for (Supervisory Review Process) of Basel III strengthening the overall risk management activities - introduced by Bangladesh Bank Apart from the risk management measures mentioned above, the Risk Management Division as a coordinating Bangladesh Bank as the regulator has been shifting its division also took the following initiatives for strengthening strategy from compliance based approach to forward the core risk management practices across the Bank: looking risk based approach with a view to strengthening i. Risk Management Division has played a pivotal the overall risk management activities, financial stability and coordinating role with all concerned of the and soundness and the corporate governance of banks in Bank for ensuring implementation of core risk line with international best practices. In compliance with management practices including mitigating the the BB directives/ guidelines, DBBL has been practicing, BB observations in all core risk areas; among others, the following major risk management tools and techniques as under: ii. Compliance status of each core risk aspect of the Bank was reported to the Risk Management i. Risk Appetite Statement (RAS) Committee of the Board of DBBL. The decisions taken by the Committee were also disseminated In compliance with the DOS Letter No. RMMS to all concerned for further compliance; and 1154/1/2018-853 dated 28 February 2018 and subsequent DOS Circular No. 4 dated 8 October 2018 of Bangladesh iii. An evaluation guideline/ criteria has been Bank, a Risk Appetite Statement covering credit, liquidity, prepared with due approval of the Board for Foreign exchange and other areas of banking operations determination of capital requirement against each have been put in place with due approval of the Board. As core risk aspect as stipulated by BB under Pillar per BB directive, the Risk Appetites have been set taking 2 (Supervisory Review Process) of Basel III. As into consideration of the existing as well as emerging per the set guideline, Risk Management Division risks supposed to be associated with the overall activities evaluated implementation status of each core risk of the Bank within next one year. For example, targeted management practice regularly and determined credit concentration to specific single borrower/ industry/ the capital requirement there-against. sector/ geographical region; annual growth of loan, Risk Appetite growth of overall size of balance sheet, growth of off- balance sheet exposures in relation to total assets of the In accordance with DOS Letter No. RMMS 1154/1/2018- Bank, liability/ depositors concentration, gap of financial 853 dated 28 February 2018 of Bangladesh Bank, Risk assets and liabilities in different time buckets, growth Management Division reviews and finalizes risk appetites of rate sensitive assets and rate sensitive liabilities and on yearly basis for all possible measurable risks including: its impact on the Bank’s earnings due to changes of market interest rates, net open position of bank’s foreign • Sector, industry and area-wise loan targets, exchange exposures, expected loss due to the adverse credit concentration among top-20 borrowers; operational events, position of capital to risk weighted asset ratio (CRAR) of the Bank. • Off-balance sheet exposures as a percentage of total assets, the annual growth rate of loans and Risk Management Division (RMD) upon analyzing the advances; actual position in relation to the risk appetites set by the • Limitations on the percentage of financial Board identifies the existing and emerging risk prone liabilities sourced from the top -10 suppliers, areas of the Bank and placed to the Risk Management gaps between total assets and total liabilities in Committee of Board/ Senior Management for taking different time buckets of the liquidity profile; and remedial measures.

ANNUAL REPORT 2020 151 The Board approved risk appetites have been submitted format through Quick Review Report (QRR) on quarterly to Bangladesh Bank as regulatory compliance. These have rest. The report focuses on major risks existed in the also been communicated to all concerned of the Bank for bank portfolio and helps for taking measures to address/ implementation. overcome the risks. Since introduction of this risk identification tool by BB in March 2012, DBBL has been ii. Stress Testing as a forward-looking tool submitting the statement to BB within the stipulated for risk management time for ensuring the regulatory compliance as well as Stress testing is an important risk management tool that taking measures for mitigating the risks by reviewing the identifies potential risks and supports the optimization findings/ observations of this report. of capital and liquidity buffers. It enables the exploration v. Self-Assessment of Anti-Fraud Internal of vulnerabilities in business models whilst overcoming Controls the limitations of historical data. Stress tests are used to measure the impact of extreme, yet plausible events. For identifying the strengths and weaknesses of internal Where necessary, measures are taken on the basis of the control and compliances concerning the major area of results of the stress tests that are in line with DBBL’s risk operations of banks, namely, general banking, credit appetite. The Bank should conduct periodic reviews of its portfolio, information and communication technology risk management process to ensure its integrity, accuracy, (ICT), BB has introduced a Questionnaire based checklist and reasonableness through stress testing. A bank for Self-Assessment of Anti-Fraud Internal Controls in should have written policies and procedures governing 2012. Under reporting framework, banks should submit the stress-testing program. the filled-in questionnaire with relevant supporting papers to BB on quarterly rest. DBBL has been submitting DBBL carried out stress testing as per Bangladesh Bank this statement to BB on quarterly rest for ensuring guidelines regularly in 2020 on quarterly intervals. The the regulatory compliance and taking measures findings were reported to Bangladesh Bank and Board for improvement of the Bank’s internal control and of Directors of the Bank for compliance and guidance. compliance system, where necessary. Findings of stress testing and guidance from Bangladesh Bank and Board are also taken into account for assessing vi. Integrated Supervision System (ISS) potential risk, mitigation of such risks as well as current and future capital requirement of the Bank. With a view to bringing the branch and head office of commercial banks under close monitoring, supervision and As of 31 December 2020, the combined post-shocks control, BB has introduced Integrated Supervision System capital to risk weighted asset ratio (CRAR) at minor (ISS) with effect from February 2014. Under this system, level of DBBL stood at 13.7% in terms of stress test BB has developed a reporting infrastructure segregating parameters set by Bangladesh Bank (BB). the reporting requirements for branches and head office separately. This ISS covers the position of overall state of iii. Financial Projection Model (FPM) affairs of the respective banks at the end of each month/ In compliance with the BB instructions, DBBL has quarter. Since introduction, DBBL has complied with the submitted the FPM on quarterly rest regularly in 2020. ISS reporting requirements of BB. Through the FPM, the Bank tries to identify the risk- Regulatory compliance with regards to prone area, conducts further in-depth review and risk management reporting through risk sets the remedial measures to address the risks and management division of DBBL vulnerabilities. In addition to the regular regulatory compliances, DBBL iv. Quick Review Report (QRR) also complied with the risk management reporting as Bangladesh Bank started evaluating the financial stipulated in ‘Risk Management Guidelines for Banks’ positions of banks upon review/ analysis of banks’ published in October 2018 and others instructions/ submitted data/ information in prescribed reporting circulars issued by Bangladesh Bank from time to time. The compliance status of risk management reporting by the Risk Management Division of DBBL during the year 2020 is as under: Particulars Reporting to Compliance status Remarks 1. Risk management reporting

i. Quarterly risk management reporting Risk management Complied covering committee of the • Internal capital adequacy assessment Board process (ICAAP); • Key figures from the credit portfolio; • Market risk; • Large exposures; and • Liquidity risk.

ii. Submission of Monthly Risk Management Bangladesh Bank on Complied Report and minutes of risk management quarterly rest committee; and

iii. Comprehensive Risk Management Report Bangladesh Bank on Complied (CRMR) and minutes of risk management Half yearly rest committee. 2. Basel III reporting and capital management

i. Submission of MCR under Pillar 1 on Bangladesh Bank Quarterly MCR and CRAR under quarterly rest; Basel III was submitted to BB within the stipulated time.

ii. Submission of ICAAP Report for Bangladesh Bank ICAAP document of DBBL Board approved the calculation of adequate capital requirement was submitted to BB with in ICAAP Document for under Pillar 2 annually; stipulated time. submission to BB.

iii. Disclosure requirement under Pillar 3; Bangladesh Bank • Disclosure requirements with uploading a as per BB reporting soft copy in the format for the year 2019 Bank’s website was submitted to BB and posted in the Bank’s website;

• Disclosures for the year ended 2020 are set from Pages 155 to 186 of this Annual Report. The soft copy of disclosures has been uploaded in the Bank’s website. A printed copy of the same will also be submitted to BB within the stipulated time for regulatory compliance.

iv. Basel III liquidity ratios Bangladesh Bank Under Basel III guideline, Bank has been compliant for a. Liquidity coverage ratio (LCR); Monthly submission of statements of b. Net stable funding ratio (NSFR); and Quarterly Liquidity Coverage Ratio (LCR), c. Leverage ratio. Quarterly Net Stable Funding Ration (NSFR) and Leverage Ratio to Bangladesh Bank within the stipulated time.

v. Capital planning in line with the Board/ Management Information memorandum implementation of Basel III. has been placed to the Board regarding capital management in line with the Basel III guideline from time to time.

ANNUAL REPORT 2020 153 Particulars Reporting to Compliance status Remarks 3. Stress testing Bangladesh Bank, Bank has been compliant for Stress test reports Board/ Risk submission of stress testing have been reported to Management reports to BB on quarterly rest the Board on quarterly Committee of the within the stipulated time. rest. Board of the Bank

4. Statement of Off-Site Supervision (CAMELS Bangladesh Bank, Bank has been compliant The observations/ Pack) for conducting CAMELS Rating by BB Board/ Senior for submission of required findings of BB made Management information/ data on CAMELS in the CAMELS rating rating and its subsequent reports were also regulatory compliance to BB submitted to the on quarterly & half-yearly rest Board for concurrence, within the stipulated time. guidance and compliance with the BB observations.

5. Financial Projection Model (FPM) Bangladesh Bank/ Bank has been compliant for Senior Management submission of filled-in FPM to of the Bank BB on quarterly rest within the stipulated time.

6. Quick Review Report (QRR) under BSS Bangladesh Bank/ Bank has been compliant for Senior Management submission of QRR and its of the Bank subsequent compliance to BB on quarterly rest within the stipulated time.

7. Credit Rating Bangladesh Bank • Bank was compliant for conducting credit rating for the year ended 2019 including submission of the rating report to BB, serving press release for public notification etc. within the stipulated time.

• The credit rating of DBBL for the year ended 2020 will be completed within the stipulated time.

8. Compliance with the core risk management Bangladesh Bank Bank has been compliant with practices the BB recommendations/ suggestions made in different inspection reports of core risks management practices. disclosures on risk based capital (Basel III)

DISCLOSURES ON RISK BASED CAPITAL (BASEL III) Scope of Application

Qualitative Disclosures a) The name of the top corporate entity in the Dutch-Bangla Bank Limited (the Bank) group to which this guidelines applies. b) An outline of differences in the basis of The consolidated financial statements of the Bank include the consolidation for accounting and regulatory financial statements of Dutch-Bangla Bank Limited and the purposes, with a brief description of the Off-shore Banking Units (OBUs). A brief description of the Bank and entities within the group the OBUs are given below: The Bank [Main operation]

(i) that are fully consolidated; Dutch-Bangla Bank Limited (the Bank) is a scheduled commercial bank set up as a joint venture between Bangladesh and the Netherlands. Incorporated as a public limited company under the Companies Act 1994, the Bank obtained license from Bangladesh (ii) that are given a deduction treatment; Bank on 23 July 1995 and started its banking business with one and branch on 3 June 1996. The number of branches was 208 as on 31 December 2020 all over Bangladesh. The Bank is listed with Dhaka Stock Exchange and Chittagong Stock Exchange as a publicly quoted (iii) that are neither consolidated nor company. deducted (e.g. where the investment is The principal activities of the Bank are to carry on all kinds of risk-weighted). commercial banking business in Bangladesh. Mobile Banking Services The Bank obtained the permission for conducting the Mobile Banking Services from Bangladesh Bank on 28 April 2010. The Bank started operation of Mobile Banking Services on 31 March 2011. The principal activities of the Mobile Banking Services are to provide banking services to Mobile Banking customers through Mobile Phone and multiple delivery channels within the applicable rules & regulations and guidelines of Bangladesh Bank. Mobile Banking Services are part of Main Operation of the Bank. Agent Banking Services The Bank obtained the permission for conducting the Agent Banking services from Bangladesh Bank on 27 July 2014. The Bank started operation of Agent Banking Services on 19 January 2015. The principal activities of the Agent Banking Services are to provide banking services to the Bank customers through engagement of agents who conducts Banking Transaction on behalf of the Bank under a valid agency agreements rather than Bank’s own Tellers/Cashiers to deliver the services within the applicable rules & regulations and guidelines of Bangladesh Bank. Agent Banking Services are part of Main Operation of the Bank.

ANNUAL REPORT 2020 157 Scope of Application (Continued) Off-shore Banking Unit (OBU) The Off-shore Banking Unit (OBU) of the Bank is the separate business entity governed by the applicable rules & regulations and guidelines of Bangladesh Bank. The Bank obtained permission for conducting the operations of OBU from Bangladesh Bank on 23 February 2010. The Bank started the operation of OBU on 12 July 2010. The number of OBUs was 2 (two) as on 31 December 2020 located at Chittagong EPZ Branch, Chittagong and Dhaka EPZ Branch, Dhaka. The principal activities of the OBUs are to provide commercial banking services through its Units within the rules & regulations and guidelines of Bangladesh Bank applicable for the Off-shore Banking Units. c) Any restrictions, or other major impediments, on transfer of funds or Not applicable regulatory capital within the group. Quantitative Disclosures d) The aggregate amount of surplus capital of insurance subsidiaries (whether deducted or Not applicable subjected to an alternative method) included in the capital of the consolidated group.

Capital structure

Qualitative Disclosures a) Summary information on the terms and In terms of Section 13 of the Bank Company Act, 1991 (Amended up conditions of the main features of all capital to 2018), the terms and conditions of the main features of all capital instruments, especially in the case of capital instruments have been segregated in line with the eligibility criteria set instruments eligible for inclusion in CET 1, forth vide BRPD Circular No. 18 dated 21 December 2014 [Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework Additional Tier 1 or in Tier 2 capital. for Banks in line with Basel III)] and other relevant instructions given by Bangladesh Bank from time to time. The main features of the capital instruments are as follows: Common Equity Tier 1 (CET1) capital instruments Paid-up share capital: Issued, subscribed and fully paid up share capital of the Bank. Non-repayable share premium account: Amount of premium realized with the face value per share at the time of issuing shares through initial public offering. Statutory reserve: As per Section 24 (1) of the Bank Company Act, 1991, (Amended up to 2018), every banking company shall create a statutory reserve and if the amount of such fund together with the amount in the share premium is less than its paid up capital, it shall transfer at an amount not less than 20% of profit before taxes to statutory reserve fund. Dutch Bangla Bank has already maintained the required fund for statutory reserve and has excess balance compared to the required reserve. Dividend equalization account: As per BRPD Circular Letter No. 18 dated 20 October 2002 issued by Bangladesh Bank, ‘Dividend Equalization Account’ has been created by transferring the amount from the profit that is equal to the cash dividend paid in excess of 20%. Retained earnings: Amount of profit retained with the banking company after meeting up all expenses, provisions and appropriations. Capital structure (Continued) Additional Tier 1 (AT1) capital instruments Instruments issued by the banks that meet the qualifying criteria for AT1: Issued, subscribed and fully paid perpetual subordinated debt/ bond which meet the qualifying criteria for AT1 as stipulated in guidelines on Risk Based Capital Adequacy. Tier 2 capital instruments General provision against unclassified loans and off-balance sheet exposures: As per BRPD Circular Letter No. 5 dated 31 May 2016 and BRPD Circular Letter No. 56 dated 10 December 2020, amount of general provision maintained against unclassified loans (including Special General Provision-COVID 19) and off-balance sheet exposures as of the reporting date has been considered. Subordinated debt capital: In compliance with BRPD Circular No. 18 dated 21 December 2014, Subordinated Debt is considered as a component of Tier 2 capital. Assets revaluation reserves: As per Bangladesh Bank’s instruction, until 31 December 2014, 50% of incremental value of Bank’s assets has been considered. Revaluation Reserve (RR) based on the position as of 31 December 2014 will be deducted @ 20% on yearly basis from 2015 to 2019 under Basel III guideline. Against that, full amount (i.e. equivalent to 100%) has been deducted from Tier 2 capital within the deadline as stipulated by Bangladesh Bank under Basel III guideline. Revaluation reserves of HTM securities: As per Bangladesh Bank’s instruction, until 31 December 2014, 50% of revaluation reserve of HTM securities has been considered. Revaluation Reserve (RR) based on the position as of 31 December 2014 will be deducted @ 20% on yearly basis from 2015 to 2019 under Basel III guideline. Against that, full amount (i.e. equivalent to 100%) has been deducted from Tier 2 capital within the deadline as stipulated by Bangladesh Bank under Basel III guideline. Revaluation reserves of HFT securities: As per Bangladesh Bank’s instruction, until 31 December 2014, 50% of revaluation reserve of HFT securities has been considered. Revaluation Reserve (RR) based on the position as of 31 December 2014 will be deducted @ 20% on yearly basis from 2015 to 2019 under Basel III guideline. Against that, full amount (i.e. equivalent to 100%) has been deducted from Tier 2 capital within the deadline as stipulated by Bangladesh Bank under Basel III guideline. Quantitative Disclosures b) The amount of Common Equity Tier 1 The amount of Common Equity Tier 1 (CET1) capital as per disclosures in (CET1) capital the audited financial statements as of 31 December 2020 are as follows: In million Taka Particulars Amount Paid up capital 5,500.0 Non-repayable share premium account 11.1 Statutory reserve 9,193.0 General reserve - Dividend equalization account 1,766.8 Retained earnings 14,838.4 Other (If any item approved by Bangladesh Bank) - Sub-Total CET1 Capital [A] 31,309.3

ANNUAL REPORT 2020 159 Capital structure (Continued) c) The amount of Additional Tier 1 (AT1) The amount of Additional Tier 1 (AT1) capital as per disclosures in the capital audited financial statements as of 31 December 2020 are as follows: In million Taka Particulars Amount Non-cumulative irredeemable preference shares - Instruments issued by the banks that meet the qualifying criteria for AT1 - Others (if any item approved by Bangladesh Bank) - Sub-Total AT1 Capital [B] -

d) The amount of Tier 2 capital The amount of Tier 2 capital as per disclosures in the audited financial statements as of 31 December 2020 are as follows: In million Taka Particulars Amount General provision against unclassified loans and off- 4,401.4 balance sheet exposures (Including OBU) All other preference shares - Subordinated debt 12,000.0 Revaluation Reserves as on 31 December 2014 (50% of - Fixed Assets and HTM Securities) Others (if any item approved by Bangladesh Bank) - Sub-total of Tier 2 capital [C] 16,401.4

e) Regulatory Adjustments/ Deductions from In million Taka capital Particulars Amount Deferred tax assets against the specific loan loss provision and other intangible assets (computer 1,626.8 software) from CET 1 capital Revaluation Reserves for Fixed Assets and Securities from Tier 2 capital - Sub-total of deduction [D] 1,626.8

In million Taka f) Total eligible capital Particulars Amount Total eligible capital [A+B+C-D] 46,083.9 Capital Adequacy

Qualitative Disclosures (a) A summary discussion of the bank’s The Bank assesses the adequacy of its capital in terms of Section approach to assessing the adequacy of 13 (1) of the Bank Company Act, 1991 (Amended up to 2018) and its capital to support current and future instruction contained in BRPD Circular No. 18 dated 21 December activities. 2014 [Guidelines on ‘Risk Based Capital Adequacy for Banks’ (Revised regulatory capital framework in line with Basel III)] and other relevant rules & regulation issued by BB from time to time. However, in terms of the regulatory guidelines, the Bank computes the capital charge/ requirement as under: i. Credit risk : On the basis of Standardized Approach; ii. Market risk : On the basis of Standardized Approach; and iii. Operational risk: On the basis of Basic Indicator Approach. Capital Adequacy (Continued) The Bank assesses the capital requirement considering the existing size of portfolio, concentration of portfolio to different risk weight groups, asset quality, profit trend etc. on quarterly rest. The Bank also forecasts the adequacy of capital in terms of its capacity of internal capital generation, maintaining the size of the portfolio, asset quality, conducting credit rating of the borrowers, segregation of portfolio to different risk weight groups etc. As of 31 December 2020, Bank maintained total capital (CET 1/Tier 1 and Tier 2) of Taka 46.1 billion against the minimum requirement plus capital conservation buffer of Taka 33.4 billion with a surplus of Taka 12.7 billion. Bank’s capital to risk-weighted asset ratio (CRAR) as of 31 December 2020 stood at 17.2% (consisting of 11.1% in CET 1 capital and 6.1% in Tier 2 capital) against the regulatory requirement of minimum plus capital conservation buffer 12.50%. This surplus capital both in term of absolute amount and ratio (CRAR) is considered to be adequate to absorb all the material risks to which the Bank may be exposed in future. The Bank maintained more than adequate capital against the regulatory requirement to uphold and strengthen the confidence of its investors, depositors and other stakeholders. Quantitative Disclosures (b) Capital requirement for Credit Risk In million Taka Minimum Capital Risk Weighted Particulars Requirement Assets (RWA) (MCR) Credit Risk On-balance sheet 193,760.9 19,376.1 Off-balance sheet 29,729.8 2,973.0 Total 223,490.7 22,349.1

(c) Capital requirement for Market Risk In million Taka Minimum Capital Risk Weighted Particulars Requirement Assets (RWA) (MCR) Market Risk Interest Rate related instrument 5,388.2 538.8 Equities 0.01 0.0 Foreign exchange position 368.2 36.8 Commodities - - Total 5,756.4 575.6

(d) Capital requirement for Operational Risk In million Taka Minimum Capital Risk Weighted Particulars Requirement Assets (RWA) (MCR) Operational Risk 38,214.9 3,821.5 Total 38,214.9 3,821.5

ANNUAL REPORT 2020 161 Capital Adequacy (Continued)

(e) Total Risk Weighted Assets (RWA), In million Taka Total Minimum Capital Requirement Particulars Amount (MCR) and Total Eligible Regulatory Total Risk Weighted Assets (RWA) Capital Credit Risk On-balance sheet 193,760.9 Off-balance sheet 29,729.8 Total Credit Risk [i] 223,490.7 Market Risk [ii] 5,756.4 Operational Risk [iii] 38,214.9 Total Risk Weighted Assets (RWA) [i+ii+iii] 267,462.0

Total Minimum Capital Requirement (MCR) Credit Risk On-balance sheet 19,376.1 Off-balance sheet 2,973.0 Total Credit Risk [i] 22,349.1 Market Risk [ii] 575.6 Operational Risk [iii] 3,821.5 Total Minimum Capital Requirement (MCR) 26,746.2

Total Eligible Regulatory Capital 46,083.9

(f) Total capital, CET1 capital, Total Tier 1 capital and Tier 2 capital ratio:

For the consolidated group Particulars Ratio (%) Total Capital to Risk-weighted Asset Ratio (CRAR) 17.2% Common Equity Tier 1 Capital to Risk-weighted Asset Ratio 11.1% Total Tier 1 Capital to Risk-weighted Asset Ratio 11.1% Tier 2 Capital to Risk-weighted Asset Ratio 6.1%

For stand alone Particulars Ratio (%) Total Capital to Risk-weighted Asset Ratio (CRAR) 17.2% Common Equity Tier 1 Capital to Risk-weighted Asset Ratio 11.1% Total Tier 1 Capital to Risk-weighted Asset Ratio 11.1% Tier 2 Capital to Risk-weighted Asset Ratio 6.1%

(g) Capital Conservation Buffer (CCB) Particulars Ratio (%) Required rate of Capital Conservation Buffer (CCB) for 2.50% 2020 Capital Conservation Buffer (CCB) Maintained 5.1% Capital Adequacy (Continued)

(h) Available Capital under Pillar 2 In million Taka Requirement Particulars Amount Total Eligible Regulatory Capital [A] 46,083.9 Minimum Capital Requirement under Pillar 1 [B] 26,746.2 Capital Conservation Buffer [C] 6,686.5 Minimum Capital Requirement plus Capital 33,432.7 Conservation Buffer [D=B+C] Available Capital for Pillar 2 requirement [E=A-D] 12,651.2

Credit Risk Qualitative Disclosures (a) The general qualitative disclosure requirement with respect to credit risk, including: (i) Definitions of past due and As per relevant Bangladesh Bank guidelines, the Bank defines the past impaired (for accounting due and impaired loans and advances for strengthening the credit purposes); discipline and mitigating the credit risk of the Bank. The impaired loans and advances are defined on the basis of (i) Objective/ Quantitative Criteria and (ii) Qualitative judgment. For this purposes, all loans and advances are grouped into four (4) categories namely- (a) Continuous Loan, (b) Demand Loan, (c) Fixed Term Loan, and (d) Short-term Agricultural & Micro Credit. Definition of past due/overdue:

i) Any Continuous Loan if not repaid/ renewed within the fixed expiry date for repayment or after the demand by the bank will be treated as past due/ overdue from the following day of the expiry date;

ii) Any Demand Loan if not repaid within the fixed expiry date for repayment or after the demand by the bank will be treated as past due/ overdue from the following day of the expiry date;

iii) In case of any installment(s) or part of installment(s) of a Fixed Term Loan is not repaid within the fixed expiry date, the amount of unpaid installment(s) will be treated as past due/ overdue after six months of the expiry date; and

iv) The Short-term Agricultural and Micro-Credit if not repaid within the fixed expiry date for repayment will be considered past due/ overdue after six months of the expiry date.

However, a continuous loan, demand loan or a term loan which will remain overdue for a period of 2 (two) months or more, will be put into the “Special Mention Account (SMA)”, the prior status of becoming the loan into impaired/ classified/ non-performing.

ANNUAL REPORT 2020 163 Credit Risk (Continued) Definition of impaired/ classified/ non-performing loans and advances are as follows: Continuous loans are classified as follows: l Substandard: If it is past due/ overdue for 3 (three) months or beyond but less than 9 (nine) months; l Doubtful: If it is past due/ overdue for 9 (nine) months or beyond but less than 12 (twelve) months; and l Bad/ Loss: If it is past due/ overdue for 12 (twelve) months or beyond. Demand loans are classified as follows: l Substandard: If it remains past due/ overdue for 3 (three) months or beyond but not over 9 (nine) months from the date of expiry or claim by the Bank or from the date of creation of forced loan; l Doubtful: If it remains past due/ overdue for 9 (nine) months or beyond but not over 12 (twelve) months from the date of expiry or claim by the Bank or from the date of creation of forced loan; and l Bad/ Loss: If it remains past due/ overdue for 12 (twelve) months or beyond from the date of expiry or claim by the Bank or from the date of creation of forced loan. date of creation of forced loan. Fixed Term Loans are classified as follows: l Substandard : If the amount of past due installment is equal to or more than 3 (three) months but less than 9 (nine) months; the entire loan will be classified as ‘Sub-standard’; l Doubtful: If the amount of past due installment is equal to or more than 9 (nine) months but less than 12 (twelve) months; the entire loan will be classified as ‘Doubtful’; and l Bad / Loss: If the amount of past due installment more than 12 (twelve) months, the entire loan will be classified as ‘Bad/Loss’; Short-term Agricultural and Micro-credit: The Short-term Agricultural and Micro Credit will be considered irregular if not repaid within the due date as stipulated in the loan agreement. If the said irregular status continues, the credit will be classified as ‘Sub-standard’ after a period of 12 months, as ‘Doubtful’ after a period of 36 months and as ‘Bad/ Loss’ after a period of 60 months from the stipulated due date as per the loan Agreement. Cottage, Micro and Small Credits under CMSME: A Continuous Loan, Demand Loan and Fixed Term Loan will be classified are as under: • Substandard: If it is past due/ overdue for 6 (six) months or beyond but less than 18 (eighteen) months; • Doubtful: If it is past due/ overdue for 18 (eighteen) months or beyond but less than 30 (thirty) months; and • Bad/ Loss: If it is past due/ overdue for 30 (thirty) months or beyond. In compliance with BRPD Circular No. 17 dated 28 September 2020, loan classification and provision requirement there-against has been determined. As per regulatory directives, the application of past due and impairment of loans and advances, among others, have been deferred upto 31 December 2020. ii) Description of approaches The Bank follows the relevant Bangladesh Bank guideline for followed for specific and general determination of general and specific allowances for loans and advances. allowances and statistical Firstly, the base for provision for the unclassified and classified loans are methods; calculated as under: a) Calculation of base for provision for unclassified/ standard loans: Outstanding amount less suspended interest, if any; Credit Risk (Continued)

b) Calculation of base for provision for the classified loans, the higher of the following two amounts: i. Outstanding amount less suspended interest less value of eligible securities; or ii. 15% of outstanding amount. Secondly, the following rates are applied on base for provision for determination of general and specific allowances for loans:

General provisions for unclassified loans and advances: Rates [%] All unclassified loans (Other than loans under special mention account, short term agricultural credit, loans to Brokerage Houses (BHs)/ Merchant Banks (MBs)/ Stock 1.00% Dealers (SDs) against Shares, consumer financing, small and medium enterprise financing, and staff loans) Small and medium enterprise financing 0.25% Consumer financing (other than housing finance, credit card 2.00% and loans for professionals under consumer financing scheme) Consumer financing (for housing finance) 1.00% Consumer financing (for credit card) 2.00% Consumer financing (for professionals) 2.00% Loans to Brokerage Houses (BHs)/ Merchant Banks (MBs)/ 2.00% Stock Dealers (SDs) against Shares etc. Short term Agricultural & Micro-Credits 1.00%

General provisions against Special Mention Account Rates [%] (SMA) loans and advances: All unclassified loans (other than loans under small 1.00% enterprise and consumer financing and BHs, MBs, SDs) Small and medium enterprise financing 0.25% Consumer financing (other than housing finance, credit card and loans for professionals under consumer financing 2.00% scheme) Consumer financing (for housing finance) 1.00% Consumer financing (for credit card) 2.00% Consumer financing (for professionals) 2.00% Loans to Brokerage Houses (BHs)/ Merchant Banks(MBs)/ 2.00% Stock Dealers (SDs) against Shares etc. Short term Agricultural & Micro-Credits 1.00%

As per BRPD Circular Letter No. 56 dated 10 December 2020, the Bank has made additional Provision @ 1% as "Special General Provision-COVID 19".

ANNUAL REPORT 2020 165 Credit Risk (Continued)

Cottage, Micro All other Short term and Small classified Agricultural & Specific provision Credits under loans and Micro-Credits CMSME advances Rates [%] Rates [%] Rates [%]

Substandard 5.00% 5.00% 20.00%

Doubtful 5.00% 20.00% 50.00%

Bad/loss 100.00% 100.00% 100.00%

Mentionable that, all interest accrued is credited to interest suspense account instead of crediting the same to income account if the loan is classified as sub-standard and doubtful. However, charging of interest is discontinued when the loan is classified as bad/ loss.

As per BRPD Circular No. 4 dated 29 January 2015, the restructured large loan facilities have been treated as Special Mention Account (SMA) for the purpose of classification. Provision has also been calculated at existing applicable rate of SMA with additional 1%. The income from restructured loan has been accounted for only when it was actually received.

iii) Discussion of the Bank’s credit The salient features of DBBL credit risk management policy and procedures risk management policy are as under:

l Credit policy approved by the Board: The Board approves the Credit Risk Management Policy of DBBL for ensuring the best practice in credit risk management and maintaining quality of assets. The credit policy/ manual has been put in place in compliance with Bangladesh Bank’s guidelines on credit risk management and other rules & regulations circulated by BB from time to time. The policy envisages making credit decisions based on sound lending principles and practices supported by reliable and accurate financials, management integrity, industry/ technical analysis, environmental due diligence, industry information of the borrowing entity/ company.

l Credit approval is delegated properly: Authorities are properly delegated ensuring check and balance in credit operation at every stage i.e. screening, assessing risk, identification, management and mitigation of credit risk as well as monitoring, supervision and recovery of loans with provision for early warning system. Credit Risk (Continued)

l Independent Credit Risk Management Division: There are two independent Credit Risk Management Divisions (One for Corporate Loan portfolio and other for Retail & SME Loan portfolio) to assess credit risks and suggest the mitigation procedures & techniques while processing the credit proposals by the Business Divisions for approval.

l Separate Credit Administration Division: A separate Credit Administration Division confirms that perfected security documents are in place before disbursement. DBBL is continuing a unique process of rechecking security documentation by a second legal advisor other than the lawyer who vetted it originally. The division also monitors borrower’s compliance with lending covenants and agreed terms and conditions.

l Independent Special Asset Management Division: An independent and fully dedicated Special Asset Management Division monitors the performance and recovery of loans, identify early signs of delinquencies in portfolio and take corrective measures including legal actions to mitigate risks, improve loan quality and to ensure timely recovery of loans. This division also monitors risk status of loan portfolio and ensures adequate loan loss provision. There is a dedicated and high-level management recovery committee to deal with the problem loans for early and most appropriate settlements.

l Credit operations are subject to independent Internal Audit: Internal Control & Compliance Division independently verifies and ensures, at least once in a year, compliance with approved lending guidelines, Bangladesh Bank guidelines, operational procedures, adequacy of internal control, documentation and overall Credit Risk Management System.

l Reporting to Board/ Executive Committee/ Risk Management Committee: Overall quality, performance, recovery status, risks status, adequacy of provision of loan portfolio is regularly reported to the Board of Directors/ Executive Committee/ Risk Management Committee of the Board for information and guidance.

Above all, the Risk Management Division is regularly coordinating with the Credit Risk Management Divisions and other Business Units/ Divisions on increasing the collateral coverage, product/ sector specific diversification of credit exposures, single borrower exposures limit, large loan portfolio ceiling as stipulated by Bangladesh Bank, improving the asset quality, conducting credit rating of the borrowers to minimize the capital charge against credit risk of the Bank.

Adequate provision is maintained against classified loans as per Bangladesh Bank Guidelines. Status of loans is regularly reported to the Board of Directors/ Risk Management Committee of the Board.

ANNUAL REPORT 2020 167 Credit Risk (Continued) Quantitative Disclosures (b) Total gross credit risk exposures Major types of credit exposure as per disclosures in the audited financial broken down by major types of credit statements as of 31 December 2020: exposures In million Taka Outstanding Particulars Mix (%) Amount Overdraft 31,162.7 11.4% Cash credit 34,283.6 12.5% Export cash credit 15,747.8 5.8% Transport loan 1,951.2 0.7% House building loan 6,137.4 2.2% Loan against trust receipt 4,196.1 1.5% Term loan - industrial 85,678.2 31.3% Term loan - other 52,217.1 19.1% Payment against document- cash 22.5 0.0% Payment against document- EDF 315.5 0.1% Consumer Finance 24,819.1 9.1% Staff loan 634.7 0.2% Bills purchased and discounted 16,217.0 5.9% Total Loans and advances 273,382.9 100.0%

(c) Geographical distribution of Geographical distribution of credit exposures as per the disclosures in the exposures, broken down in significant audited financial statements as of 31 December 2020 are as follows: areas by major types of credit In million Taka exposure. Outstanding Particulars Amount Mix (%) Urban Dhaka Division 214,776.2 78.6% Chattogram Division 15,096.2 5.5% Khulna Division 2,712.1 1.0% Rajshahi Division 2,236.4 0.8% Barishal Division 702.9 0.3% Sylhet Division 3,060.8 1.1% Rangpur Division 1,728.2 0.6% Mymensingh Division 24,123.5 8.8% Sub-total (Urban) 264,436.3 96.7% Rural Dhaka Division 7,166.7 2.6% Chattogram Division 865.0 0.3% Rajshahi Division 107.0 0.0% Sylhet Division 402.5 0.1% Mymensingh Division 405.4 0.1% Sub-total (Rural) 8,946.6 3.3% Grand Total (Urban and Rural) 273,382.9 100.0% Credit Risk (Continued)

(d) Industry or counterparty type Industry or counterparty type distribution of exposures, broken down distribution of exposures, broken by major types of credit exposures as per the disclosures in the audited down by major types of credit financial statements as of 31 December 2020 are as follows: exposures. (i) Loans and Advances including bills purchased and discounted on the basis of significant concentration: In million Taka Outstanding Particulars Mix (%) Amount Commercial lending 8,986.5 3.3% Agricultural loan 5,198.9 1.9% Export financing 16,501.5 6.0% Consumer credit scheme 26,421.3 9.7% Small and medium enterprise financing 35,428.7 13.0% Staff loan 634.7 0.2% House building loan (other than the employees) 4,219.4 1.5% Others 175,991.8 64.4% Total 273,382.9 100.0%

(ii) Industry-wise Loans and Advances including bills purchased and discounted: In million Taka Outstanding Particulars Mix (%) Amount Agriculture, fisheries and forestry 5,198.9 1.9% Pharmaceutical industries 4,657.2 1.7% Textile industries 74,301.3 27.2% Ready- made garment industries 36,894.6 13.5% Chemical industries 2,264.1 0.8% Bank and other financial institutions 1,180.1 0.4% Transport and communication 5,176.0 1.9% Electronics and automobile industries 5,968.9 2.2% Housing and construction industries 12,172.4 4.5% Energy and power industries 5,904.5 2.2% Cement and ceramic industries 3,253.9 1.2% Food and allied industries 8,635.8 3.2% Engineering and metal industries including 5,188.5 1.9% ship breaking Service industries 18,482.1 6.8% Other industries 84,104.5 30.8% Total 273,382.9 100.0%

ANNUAL REPORT 2020 169 Credit Risk (Continued)

(e) Residual contractual maturity Residual contractual maturity of exposures as per the disclosures furnished breakdown of the whole portfolio, in the audited financial statements as of 31 December 2020 are as follows: broken down by major types of credit exposure. In million Taka Outstanding Repayable Mix (%) Amount On demand 17,566.5 6.4% Within one to three months 80,297.6 29.4% Within three to twelve months 90,945.7 33.3% Within one to five years 65,523.5 24.0% More than five years 19,049.7 7.0% Total 273,382.9 100.0%

(f) By major industry or counterparty a) Amount of impaired loans and if available, past due loans, type provided separately i) Amount of impaired/ classified loans by major industry/ sector- type as of 31 December 2020 was as under: In million Taka Outstanding Major industry/sector type Mix (%) Amount Agriculture financing 3.0 0.1% Ready made garments (RMG) industries 766.5 12.9% Textile industries - 0.0% Other manufacturing industries 782.7 13.2% Small & medium enterprise (SME) loans 1,746.8 29.5% Commercial real estate including 674.9 11.4% construction industries Residential real estate financing 34.4 0.6% Power and Gas industries - 0.0% Transport, storage and communication 12.7 0.2% industries Trade services 772.3 13.0% Consumer credit 151.5 2.6% Others 976.8 16.5% Total 5,921.9 100.0% ii) Amount of impaired/ classified loans by major counterparty type as of 31 December 2020 was as under: In million Taka Status-wise amount of impaired/ Major classified loans Total counterparty type Substandard Doubtful Bad/Loss Continuous loan 2,083.7 215.2 1,226.6 3,525.6 Demand loan 489.5 1.3 416.1 906.9 Term loan 165.8 67.1 1,252.1 1,485.0 Other loans 4.3 - 0.1 4.4 Total 2,743.3 283.6 2,895.0 5,921.9 Credit Risk (Continued)

b) Specific and general provisions Specific and general provisions for loans portfolio and general provision for off-balance sheet exposures of the Bank as per audited financial statements as of 31 December 2020 was as under: In million Taka Particulars of specific and general provisions for entire Amount loan portfolio and off-balance sheet exposures Specific provision for loans and advances 4,200.1 General provision for loans and advances 3,598.9 General provision for off-balance sheet exposures 802.5 Total 8,601.5

c) Charges for specific allowances and charges-offs (general allowances) during the period The specific and general provisions for loans portfolio and general provision for off-balance sheet exposures of the Bank charged during the year as per audited financial statements for the year ended 31 December 2020 was as under: In million Taka Particulars Amount Specific provision for loans and advances (33.1) General provision for loans and advances 769.0 General provision for off-balance sheet exposures 75.7 Total 811.5

(g) Gross Non Performing Assets (NPAs) Position of Non Performing Loans and Advances including bills purchased and discounted of the Bank as per audited financial statements for the year ended 31 December 2020 was as under: In million Taka Particulars Amount Gross Non Performing Assets (NPAs) 5,921.9 Non Performing Assets (NPAs) to Outstanding Loans & 2.2% advances Movement of Non Performing Assets (NPAs) Opening balance 11,230.1 Additions/ adjustment during the year (net) (5,308.2) Closing balance 5,921.9 Movement of specific provisions for NPAs Opening balance 5,094.0 Add: Provision made during the year (33.1) Less: Write-off (999.5) Add: Recoveries of amounts previously written-off 138.7 Closing balance 4,200.1

ANNUAL REPORT 2020 171 Equities: Disclosures for Banking Book Positions

Qualitative Disclosures a) The general qualitative disclosure requirement with respect to equity risk, including: Differentiation between holdings on which capital gains are expected and those taken under other objectives Not Applicable including for relationship and strategic reasons; and Discussion of important policies Despite, at the end of 31 December 2020, the Bank had no investment covering the valuation and to the equity instruments/ exposures, but the accounting policies, accounting of equity holdings in techniques and valuation methodologies were put in places as under: the banking book. This includes the accounting techniques and valuation Particulars Valuation method methodologies used, including key Shares: assumptions and practices affecting Quoted Cost or market price whichever is lower valuation as well as significant Cost or Book value, as per latest audited changes in these practices. Unquoted financial statements of that entity (ies), whichever is lower Bonds: Subordinated bonds At redemption value Quantitative Disclosures b) Value disclosed in the balance sheet of investments, as well as the fair value of those investments; for quoted securities, a comparison to Not Applicable publicly quoted share values where the share price is materially different from fair value. c) The cumulative realized gains (losses) arising from sales and liquidations in the reporting period. - - Realized gain (losses) from equity investments

d) l Total unrealized gains (losses) l Total latent revaluation gains (losses) - l Any amounts of the above included in Tier 2 capital. e) Capital requirements broken The capital requirements for equity investments as of 31 December 2020 down by appropriate equity was as under: groupings, consistent with the bank’s methodology, as well as the In million Taka aggregate amounts and the type of Amount Capital Capital equity investments subject to any Particulars (Market Charge supervisory provisions regarding Charge Value) Weight regulatory capital requirements. Specific Risk 0.01 10% 0.00 l Capital requirements for equity investments General Risk 0.01 10% 0.00 - For Specific market risk Total 0.00 - For General market risk Interest rate risk in the banking book (IRRBB)

Qualitative Disclosures a) The general qualitative disclosure Interest rate risk is the potential impact on the Bank’s earnings (Net requirement including the nature Interest Income- NII) and net asset values due to changes in market of IRRBB and key assumptions, interest rates. Interest rate risk arises when the Bank’s principal and including assumptions regarding loan interest cash flows (including final maturities), for both On and Off- prepayments and behavior of non- balance sheet exposures, have mismatched re-pricing dates. The maturity deposits, and frequency of amount at risk is a function of the magnitude and direction of interest IRRBB measurement. rate changes and the size and maturity structure of the mismatch position. The portfolio of assets and liabilities in the banking book sensitive to interest rate changes is the element of interest rate risk. The immediate impact of changes in interest rates is on the Bank’s net interest income (difference between interest income accrued on rate sensitive asset portfolio and interest expenses accrued on rate sensitive liability portfolio) for a particular period of time, while the long term impact is on the Bank’s net worth since the economic value of the Bank’s assets, liabilities and off-balance sheet exposures are affected. Key assumptions on loan prepayments and behavior of non- maturity deposits: a) Loans with defined contractual maturity are re-priced in the respective time buckets in which it falls as per the loan repayment schedule; b) Loans without defined contractual maturity are segregated into different time buckets based on the past trend, seasonality, geographical perspective and re-priced accordingly; and c) Non-maturity deposits namely current, saving deposits are segregated into different time buckets on the basis of past trend of withdrawal, seasonality, religious festivals, geographical perspective and re-priced accordingly. However, the behavior of withdrawal of non-maturity deposits of DBBL is more or less stable. DBBL measures the IRRBB as per the regulatory guidelines on a quarterly rest. Quantitative Disclosures b) The impact of changes in interest rate for On-balance sheet rate sensitive assets and liabilities of DBBL as per the audited financial statements as of 31 December 2020 is furnished below: In million Taka Residual maturity bucket Particulars 1-90 91-180 181-270 271-364 Days Days Days Days Rate sensitive assets [A] 162,033.5 54,715.3 24,546.8 18,979.1 Rate sensitive liabilities [B] 132,216.2 47,324.9 19,356.6 16,479.3 GAP [A-B] 29,817.3 7,390.4 5,190.2 2,499.8 Cumulative GAP 29,817.3 37,207.7 42,398.0 44,897.8 Interest rate change (IRC) [Note 1] 1% 1% 1% 1% Quarterly earnings impact [GAP x IRC] 74.5 18.5 13.0 6.2 Cumulative earnings impact 74.5 93.0 106.0 112.2 Note 1: Assuming 1% rise in interest rates for both asset and liability portfolio of the Bank and vice-versa if 1% reduction in interest rates.

ANNUAL REPORT 2020 173 Market risk

Qualitative Disclosures a) i) Views of Board of Directors The Board approves all policies related to market risk, set limits and (BODs) on trading/ investment reviews compliance on a regular basis. The objective is to provide cost activities effective funding to finance assets growth and trade related transactions. The market risk covers the followings risks of the Bank’s balance sheet: i) Interest rate risk; ii) Equity price risk; iii) Foreign exchange risk; and iv) Commodity price risk ii) Methods used to measure market Methods used to measure market risk risk As per relevant Bangladesh Bank guidelines, Standardized Approach has been followed to measure the Market Risk for capital requirement for trading book of the Bank. The total capital requirement in respect of market risk is the aggregate capital requirement calculated for each of the risk sub-categories. For each risk category minimum capital requirement is measured in terms of two separately calculated capital charges for “specific risk” and “general market risk” as under:

Component of Capital Charged For Market Risk Market Risk General Market Risk Specific Market Risk Interest Rate Risk Applied Applied Equity Price Risk Applied Applied Foreign Exchange Risk Applied Commodities Price Risk Applied

iii) Market risk management system The Treasury Division of the Bank manages market risk covering liquidity, interest rate and foreign exchange risks with oversight from Assets- Liability Management Committee (ALCO) comprising senior executives of the Bank. ALCO is chaired by the Managing Director & CEO. ALCO meets at least once in a month. The Risk Management Division also reviews the market risk parameters on monthly basis and recommends on portfolio concentration for containing the RWA. iv) Policies and processes for There are approved limits for credit deposit ratio, liquid assets to total mitigating market risk assets ratio, maturity mismatch, commitments for both on-balance sheet and off-balance sheet items and borrowing from money market and foreign exchange position. The limits are monitored and enforced on a regular basis to protect against market risks. The exchange rate committee of the bank meets on a daily basis to review the prevailing market condition, exchange rate, foreign exchange position, and transactions to mitigate foreign exchange risks. Quantitative Disclosures b) The capital requirements for market In million Taka risk The Capital Requirements for: Amount l Interest rate risk 538.8 l Equity position risk 0.0 l Foreign exchange risk 36.8 l Commodity risk - Total capital requirement for Market risk 575.6 Operational risk

Qualitative Disclosures a) i) Views of Board of Directors The policy for operational risks including internal control and (BODs) on system to reduce compliance risk is approved by the Board in line with the relevant Operational Risk guidelines of Bangladesh Bank. Audit Committee of the Board directly oversees the activities of Internal Control and Compliance Division (IC&CD) to protect against all operational risks. As a part of continued surveillance, the Management Committee (MANCOM), Executive Risk Management Committee (ERMC), MLTFPD, Vigilance Cell and independent Risk Management Division regularly review different aspects of operational risk. The analytical assessment was reported to the Board/ Risk Management Committee/ Audit Committee of the Bank for review and formulating appropriate policies, tool & techniques for mitigation of operational risk. ii) Performance gap of executives DBBL has a policy to provide competitive package and best working and staffs environment to attract and retain the most talented people available in the industry. DBBL’s strong brand image plays an important role in employee motivation. As a result, there is no significant performance gap. iii) Potential external events Like other peers, DBBL operates its business with few external risk factors relating to the socio-economic condition, political atmosphere, regulatory policy changes, natural disaster etc. based on the overall perspective of the country. Potential external events and related downside risk, namely, damage of Bank’s delivery channel including ATM, Fast Track, Agent Banking outlet etc. fear of theft/ robbery in banks vaults, compliance/ adjustment due to changes of regulatory policy stance, laws & regulations etc. are managed to keep within tolerable limit. iv) Policies and processes for The policy for operational risks including internal control and mitigating operational risk compliance risk is approved by the Board taking into account relevant guidelines of Bangladesh Bank. A policy guideline on Risk Based Internal Audit (RBIA) System is in operation. As per RBIA, branches with high risk status and subjected to more frequent audit by Internal Control and Compliance Division (IC&CD). IC&CD directly reports to Audit Committee of the Board. DBBL has been using some tools for mitigating operational risk such as Self Assessment of Anti-fraud Internal Control; Quarterly Operational Report (QOR) and Departmental Control Function Check List (DCFCL) in line with the Bangladesh Bank’s relevant instructions and recommendations. It is required to submit the statement on Self Assessment of Anti-fraud Internal Control to Bangladesh Bank on quarterly rest. In addition, there is a Vigilance Cell established in 2009 to reinforce the operational risk management of the Bank. Bank’s Anti- Money laundering activities are headed by CAMLCO and their activities are devoted to protect against all money laundering and terrorist finance related activities. The Central Customer Service & Complaint Management Cell was also engaged in mitigating the operation risks of the Bank. Apart from that, there is adequate check and balance at every stage of operation, authorities are properly segregated and there is at least dual control on every transaction to protect against operational risk.

ANNUAL REPORT 2020 175 Operational risk (Continued)

v) Approach for calculating capital The Bank follows the Basic Indicator Approach (BIA) in terms of BRPD charge for operational risk Circular No. 18 dated 21 December2014 [Guidelines on ‘Risk Based Capital Adequacy for Banks’ (revised regulatory capital framework in line with Basel III)]. The BIA stipulates the capital charge for operational risk is a fixed percentage, denoted byα (alpha) of average positive annual gross income of the Bank over the past three years. It also states that if the annual gross income for any year is negative or zero, that should be excluded from both the numerator and denominator when calculating the average gross income. The capital charge for operational risk is enumerated by applying the following formula:

K = [(GI 1 + GI2 + GI3) α]/n

Where:

K = the capital charge under the Basic Indicator Approach

GI = only positive annual gross income over the previous three years (i.e., negative or zero gross income if any shall be excluded)

α = 15 percent

n = number of the previous three years for which gross income is positive.

Besides, Gross Income (GI) is calculated as “Net Interest Income” plus “Net non­-Interest Income”. The GI is also the net result of :

i) Gross of any provisions;

ii) Gross of operating expenses, including fees paid to outsourcing service providers;

iii) Excluding realized profits/losses from the sale of securities held to maturity in the banking book;

iv) Excluding extraordinary or irregular items; and

v) Excluding income derived from insurance.

Quantitative Disclosures

b) The capital requirement for In million Taka operational risk Particulars Amount

Capital requirement for Operational Risk 3,821.5

Total Capital Requirement for Operational Risk 3,821.5 Liquidity Ratio In line with the provisions of liquidity risk management under Basel III, Bangladesh Bank on the basis of the relevant guideline of Bank for International Settlements (BIS) has identified the (i) Liquidity Coverage Ratio (LCR); (ii) Net Stable Funding Ratio (NSFR); and (iii) Leverage Ratio under the purview of ‘Liquidity’ ratio vide BRPD Circular No. 18 dated 21 December 2014 and DOS Circular No. 1 dated 1 January 2015.

Qualitative Disclosures a) i) Views of Board of Directors The Board of Directors reviews the liquidity risk of the Bank on quarterly (BODs) on system to reduce rest while reviewing the Quarterly Financial Statements, Stress Testing Liquidity Risk Report etc. Besides, the EC of the Board also reviews the liquidity position while reviewing the management information system (MIS) report on monthly basis. Upon reviewing the overall liquidity position along with the outlook of DBBL funding need, investment opportunity, market/industry trend, the Board takes its strategic decision regarding deposits, funding, investments, loans as well as interest rates polices etc. The Board of DBBL always strives to maintain adequate liquidity to meet up Bank’s overall funding need for the huge retail depositors, borrowers’ requirements as well as maintain regulatory requirements comfortably. ii) Methods used to measure The maintenance of Cash Reserve Requirement (CRR) and Statutory Liquidity Risk Liquidity Ratio (SLR) is considered as the fundamental methods/ tools to measure the liquidity position/ risk of DBBL. However, under Basel III, the following methods and tools are mandated for measuring the liquidity risk. a) Liquidity Coverage Ratio (LCR): Liquidity Coverage Ratio ensures to maintain an adequate level of stock of high quality liquid assets that can be converted into cash to meet its liquidity needs (i.e. total net cash outflows) over the next 30 calendar days. b) Net Stable Funding Ratio (NSFR): Net Stable Funding Ratio aims to limit over-reliance on short-term wholesale funding during times of abundant market liquidity and encourage better assessment of liquidity risk across all on- and off-balance sheet items. The minimum acceptable value of this ratio is 100 percent, indicating that, available stable funding (ASF) should be at least equal to required stable funding (RSF). ASF consists of various kinds of liabilities and capital with percentage weights attached given their perceived stability. RSF consists of assets and off-balance sheet items, also with percentage weights attached given the degree to which they are illiquid or “long-term” and therefore requires stable funding. In addition to the above, the following measures have been put in place to monitor the liquidity risk management position of the Bank on a continued manner: a) Asset-Liability Maturity Analysis (Liquidity profile); b) Advance Deposit Ratio (ADR); c) Whole sale borrowing capacity; and d) Maximum Cumulative Outflow (MCO).

Besides the above, the following tools are also used for measuring liquidity risk: a) Stress Testing (Liquidity Stress); and b) Net open position limit - to monitor the FX funding liquidity risk.

ANNUAL REPORT 2020 177 Liquidity Ratio (Continued)

iii) Liquidity risk management In DBBL, at the management level, the liquidity risk is primarily managed system by the Treasury Division (Front Office) under oversight of ALCO which is headed by the Managing Director & CEO along with other members of the senior management team. Treasury Division (Front Office) upon reviewing the overall funding requirements on daily basis sets their strategy to maintain a comfortable/ adequate liquidity position taking into consideration of Bank's approved credit deposit ratio, liquid assets to total assets ratio, asset-liability maturity profile, Bank's earning/ profitability as well as overall market behavior and sentiment etc. Apart from the above, Risk Management Division (RMD) also monitors & measures the liquidity risk in line with the Basel III liquidity measurement tools, namely, LCR, NSFR, Leverage Ratio. RMD addresses the key issues and strategies to maintain the Basel III liquidity ratios to the respective division(s) on regular interval. iv) Policies and processes for The Asset-Liability (ALCO) policy leads the process & procedures for mitigating Liquidity Risk mitigation of liquidity risk of DBBL. ALCO works under specific Terms of References (functions) approved by the Board. Treasury Division (Front Office) and ALM desk under regular supervision of Top Management reviews the overall liquidity position of DBBL and takes appropriate strategy, process in line with the industry position for managing liquidity risk of the Bank. Quantitative Disclosures b) i) Liquidity Coverage Ratio (LCR) The Liquidity Coverage Ratio (LCR) under Liquidity Ratios of Basel III of Dutch-Bangla Bank Limited as of 31 December 2020 was as under:

Stock of High quality liquid assets Liquidity Coverage Ratio (LCR)= Net cash outflows over the next 30 calendar days

Ratio (%) Particulars BB DBBL’s Requirement Position Liquidity Coverage Ratio (LCR) ≥ 100% 182.12%

ii) Net Stable Funding Ratio (NSFR) The Net Stable Funding Ratio (NSFR) under Liquidity Ratios of Basel III of Dutch-Bangla Bank Limited as of 31 December 2020 was as under:

Available amount of stable funding (ASF) Net Stable Funding Ratio (NSFR) Required amount of stable funding (RSF)

Ratio (%) Particulars BB DBBL’s Requirement Position Net Stable Funding Ratio (NSFR) > 100% 103.63% Liquidity Ratio (Continued)

iii) Stock of High Quality Liquid As stipulated by BB vide DOS Circular Letter No. 1 dated 1 January 2015, Assets (SHQLA) the Stock of High Quality Liquid Assets (SHQLA) of Dutch-Bangla Bank Limited as of 31 December 2020 was as under: In million Taka Particulars Amount Cash in hand 17,030.1 Balance with BB 25,143.1 Un-encumbered approved securities 106,709.9 Total Stock of High Quality Liquid Assets (SHQLA) 148,883.1

iv) Total net cash outflows over the As stipulated by BB vide DOS Circular Letter No. 1 dated 1 January 2015, next 30 calendar days total net cash outflows over the next 30 calendar days of Dutch-Bangla Bank Limited based on the position as of 31 December 2020 was as under: In million Taka Particulars Amount Total weighted cash outflows over next 30 calendar 87,782.0 days [A] Total weighted cash inflows over next 30 calendar 6,031.5 days [B] Total net cash outflows over the next 30 calendar 81,750.5 days [A-B]

v) Available amount of stable As stipulated by BB vide DOS Circular Letter No. 1 dated 1 January 2015, funding the available amount of stable funding (ASF) of Dutch-Bangla Bank Limited as of 31 December 2020 was as under: In million Taka Outstanding Weighted Particulars Amount Amount Available amount of Stable Funding 424,111.1 370,378.5 (ASF) Total 424,111.1 370,378.5

vi) Required amount of stable As stipulated by BB vide DOS Circular Letter No. 1 dated 1 January 2015, funding the required amount of stable funding (RSF) of Dutch-Bangla Bank Limited as of 31 December 2020 was as under: In million Taka Outstanding Weighted Particulars Amount Amount Required amount of Stable Funding 596,315.7 357,388.7 (RSF) Total 596,315.7 357,388.7

ANNUAL REPORT 2020 179 Leverage Ratio

Qualitative Disclosures a) i) Views of BODs on system to The Board of Directors of DBBL primarily views on growth of the On reduce excessive leverage and Off-balance sheet exposures commensurate with its expected capital growth so that the excessive leverage is reduced. Within the On-balance components, again, the Board emphasises on the growth of the prime component i.e. the loans and advances and maintaining good asset quality so as to maximize the revenue as well as the capacity to generate capital internally (in the form of retained earnings) to trade off the excessive leverage supposed to be caused by asset growth. At the outset of asset growth, the Board also views the growth of its sources of fund i.e. deposit growth taking into consideration of projected business growth so that the credit-deposit ratio is maintained at a sustainable basis as well as to reduce the mismatches of asset liability gap within the tolerable limit to manage the liquidity risk. ii) Policies and processes for First and foremost, Bank’s policy is to maintain the Leverage Ratio managing excessive on and off- (Tier 1 capital as proportion to total adjusted On and Off-balance sheet balance sheet leverage asset) well above the regulatory requirement. To this end, the striking components of balance sheet, namely, the deposits & borrowing, loans & advances, other liquid assets (treasury bills, bonds, fund placements) are analyzed on monthly basis. Measures are taken to contain the growth of overall size of balance sheet (On and Off-balance sheet exposures aggregately) considering short term outlook of the industry indicators as well as possible growth of equity (tier 1 capital) of the Bank on quarterly rest. With regard to managing the excessive leverage, the regulatory stance through the monetary policy initiatives i.e. the scope of expected business potential (growth) estimated money supply, inflation, resulting the estimated overall liquidity of the industry as well as the Bank in particular is also considered. iii) Approach for calculating The exposures of balance sheet representing the overall position of the Bank exposure/ Leverage as of the reporting date are calculated and presented in terms of applicable relevant accounting standards, i.e., IASs (BASs), IFRSs (BFRSs), etc. The accounting values of assets and liabilities are also presented and measured at gross. Netting of assets and liabilities are also made where permitted in compliance with the respective accounting standards and the regulatory instruction. For calculating "leverage", DBBL follows the ‘Leverage Ratio’ approach/ method as suggested by Bangladesh Bank. Quantitative Disclosures b) i) Leverage Ratio Leverage Ratio (LR) under Basel III of Dutch-Bangla Bank Limited as of 31 December 2020 was as under: Tier 1 Capital (after related adjustment) Leverage Ratio (LR)= Total Exposure (after related deductions)

Ratio (%) Particulars BB DBBL’s Requirement Position Leverage Ratio (LR) > 3% 5.71% Leverage Ratio (Continued) ii) On balance sheet exposures Total On-balance Sheet exposures for calculating Leverage Ratio under Basel III of Dutch-Bangla Bank Limited as of 31 December 2020 was as under:

In million Taka DBBL’s Particulars Position

Total On Balance Sheet Assets [A] 472,355.4

Less: Total Specific Provision [B] 4,200.1

Total Adjusted On Balance Sheet exposure [A-B] 468,155.3

iii) Off balance sheet exposures Total Off-balance Sheet exposures for calculating Leverage Ratio under Basel III of Dutch-Bangla Bank Limited as of 31 December 2020 was as under:

In million Taka Credit Notional Weighted Exposures Types Conversion Amount Amount Factor (CCF)

1 2 3 4=3 x 2

Direct credit substitutes 36,555.4 100% 36,555.4

Performance related contingencies 27,954.0 50% 13,977.0

Short-term self-liquidating trade 11,475.5 20% 2,295.1 letters of credit

Other commitments that can be unconditionally cancelled by any 2,569.6 10% 257.0 time

Market related Off-Balance sheet 0.0 0% 0.0 exposure

Total 78,554.5 53,084.5

iv) Total exposures Total Exposures for calculating Leverage Ratio under Basel III of Dutch- Bangla Bank Limited as of 31 December 2020 was as under:

In million Taka Particulars Amount Total On Balance Sheet Exposures [A] 468,155.3 Total Off-Balance Sheet Exposures [B] 53,084.5 Less: Total Deduction/ Regulatory adjustments [C] 1,626.8 Total Adjusted exposures [A+B-C] 519,613.9

ANNUAL REPORT 2020 181 Remuneration

Qualitative Disclosures a) Information relating to the bodies that oversee remuneration. i) Name of the bodies that oversee At the management level, primarily the Human Resources Division remuneration oversees the ‘remuneration’ in line with its HR management strategy/ policy under direct supervision and guidance of Management Committee (MANCOM) of the Bank. ii) Composition of the main body The MANCOM is headed and chaired by the Managing Director & CEO overseeing remuneration of the Bank; along with other members of top executive management (Deputy Managing Directors and CXOs). Head of Human Resources Division acts as the Member Secretary of the MANCOM of DBBL.

iii) Mandate of the main body The mandate of the Management Committee (MANCOM) as the main overseeing remuneration body for overseeing the Bank's remuneration is to review the position of remuneration and associated matters and recommend to the Board of Directors for approval of its restructuring, rearrangement and modification commensurate with the industry best practices as per requirement. iv) External consultants whose The Bank has no External Consultant permanently regarding advice has been sought, the 'remuneration' and its process. However, experts' opinion may have body by which they were been sought in case to case basis regarding income tax matter, lawyers' commissioned, and in what areas opinion for settlement of employees' dues in case of death, penalty etc. if of the remuneration process required, by the management. v) A description of the scope of The Bank does not differentiate the 'Pay Structure' and 'employee the bank’s remuneration policy benefits' by regions. However, variation in remuneration is in practice (e.g. by regions, business lines), based on nature of job/ business line/ activity primarily bifurcated for the including the extent to which it is employees who are directly recruited by the Bank and the headcounts/ applicable to foreign subsidiaries employees explored through outsourcing service providers as per rule. and branches As of 31 December 2020, the Bank had no foreign subsidiaries and branches outside Bangladesh. vi) A description of the types We consider the members of senior management, branch managers and of employees considered as the employees engaged in different functional divisions at Head Office material risk takers and as senior (except the employees involved in internal control, risk management and managers, including the number compliance) as the material risk takers of DBBL. of employees in each group b) Information relating to the design and structure of remuneration processes. i) An overview of the key features Remuneration and other associated matters are guided by the Bank’s and objectives of remuneration Service Rules as well as instruction, guidance from the Board from time policy. to time in line with the industry practice with the objectives of retention/ hiring of experienced, talented workforce focusing on sustainable growth of the Bank. ii) Whether the remuneration Human Resources Division under guidance of MANCOM, the Board and committee reviewed the bank’s senior management reviews the issues of remuneration & its associated remuneration policy during the matters from time to time. past year, and if so, an overview of any changes that were made. Remuneration (Continued) iii) A discussion of how the bank The risk and compliance employees are carrying out the activities ensures that risk and compliance independently as per specific terms of references, job allocated to them. employees are remunerated independently of the businesses Regarding remuneration of the risk and compliance employees, Human they oversee. Resources Division does not make any difference with other mainstream/ regular employees and sets the remuneration as per the prevailing rule of the Bank primarily governed by the employees' service rule of the Bank. c) Description of the ways in which current and future risks are taken into account in the remuneration processes. i) An overview of the key risks that The business risk including credit/ default risk, compliance & reputational the bank takes into account when risk are mostly considered when implementing the remuneration implementing remuneration measures for each employee/ group of employee. measures. Financial and liquidity risk are also considered. ii) An overview of the nature Different set of measures are in practice based on the nature & type of and type of the key measures business lines/segments etc. These measures are primarily focused on used to take account of these the business target/goals set for each area of operation, branch vis-a-vis risks, including risks difficult to the actual results achieved as of the reporting date. The most vital tools & measure. indicators used for measuring the risks are the asset quality (NPL ratio), Net Interest Margin (NIM), provision coverage ratio, credit-deposit ratio, cost- income ratio, growth of net profit, as well as the non-financial indicators, namely, the compliance status with the regulatory norms, instructions has been brought to all concerned of the Bank from time to time. iii) A discussion of the ways in which While evaluating the performance of each employee annually, all the these measures affect financial and non-financial indicators as per pre-determined set criteria are remuneration. considered; and accordingly the result of the performance varies from one to another and thus affect the remuneration as well. iv) A discussion of how the nature No material change has been made during the year 2020 that could affect and type of these measures has the remuneration. changed over the past year and reasons for the change, as well as the impact of changes on remuneration. d) Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration. i) An overview of main performance The Board sets the Key Performance Indicators (KPls) while approving the metrics for bank, top-level business target/ budget for each year for the Bank and business lines/ business lines and individuals. segments. The management sets the appropriate tools, techniques and strategic planning (with due concurrence/ approval of the Board) towards achieving those targets. The most common KPls are the achievement of loan, deposit and profit target with the threshold of NPL ratio, cost-income ratio, cost of fund, yield on loans, provision coverage ratio, capital to risk weighted asset ratio (CRAR), ROE, ROA, liquidity position (maintenance of CRR and SLR) etc. ii) A discussion of how amounts The remuneration of each employee is paid based on her/ his individual of individual remuneration are performance evaluated as per set criteria. And, accordingly, the aggregate linked to bank-wide and individual amount of remuneration of the Bank as a whole is linked/ impacted to the performance. same extent.

ANNUAL REPORT 2020 183 Remuneration (Continued) iii) A discussion of the measures the The Bank follows remuneration process as per set criteria with no in bank will in general implement general adjustment in the event of weak performance metrics/scorecard. to adjust remuneration in the event that performance metrics are weak. This should include the bank’s criteria for determining “weak” performance metrics. e) Description of the ways in which the bank seek to adjust remuneration to take account of longer-term performance. i) A discussion of the bank’s policy The Bank pays variable remuneration i.e. annual increment based on the on deferral and vesting of variable yearly performance rating on cash basis with the monthly pay. While the remuneration and, if the fraction value of longer term variable part of remuneration i.e. the amount of of variable remuneration that is provident fund, gratuity fund are made provision on aggregate/individual deferred differs across employees employee basis; actual payment is made upon retirement, resignation or groups of employees, a etc. as the case may be, as per rule. description of the factors that determine the fraction and their relative importance. ii) A discussion of the bank’s policy and criteria for adjusting deferred remuneration before vesting and Not applicable (if permitted by national law) after vesting through claw back arrangements. f) Description of the different forms of variable remuneration that the bank utilizes and the rationale for using these different forms. i) An overview of the forms of The Bank pays variable remuneration on cash basis (i.e. direct credit to variable remuneration offered the employee Bank account and/or Payment Order/Cheque), as the case (i.e. cash, shares and share-linked may be, as per rule/practice. instruments and other forms. A description of the elements corresponding to other forms of variable remuneration (if any) should be provided. ii) A discussion of the use of the The following variable remuneration has been offered by DBBL to its different forms of variable employees: remuneration and, if the mix Annual Increment of different forms of variable remuneration differs across Bank provides annual increments based on performance to the employees employees or groups of with the view of medium to long term strategy and adherence to Dutch- employees), a description of the Bangla Bank values. factors that determine the mix and their relative importance. Remuneration (Continued) Quantitative Disclosures g) Number of meetings held by the main There were 10 (ten) meetings of the Management Committee (MANCOM) body overseeing remuneration during held during the year 2020. All of the members of MANCOM are from the the financial year and remuneration core banking area/operation of the Bank. No additional remuneration was paid to its member. paid to the members of the Management Committee for attending the meeting except their regular remuneration. h) i) Number of employees having The following Number of Employees were received a variable received a variable remuneration remuneration during the year 2020: award during the financial year. Particulars Number Number of employees having received a variable 7,596 remuneration awarded during the year 2020

ii) Number and total amount of The following number and total amount of Guaranteed bonuses awarded guaranteed bonuses awarded during the year 2020: during the financial year. Total amount Number of of guaranteed Particulars employees bonuses (In (In Unit) Million Taka) Guaranteed bonuses awarded during the 10,022 397.72 year 2020

iii) Number and total amount of sign-on awards made during the There was no sign-on awards made in 2020. financial year. iv) Number and total amount of severance payments made during There was no severance payment made during the year 2020. the financial year. i) i) Total amount of outstanding deferred remuneration, split into - cash, shares and share-linked instruments and other forms. ii) Total amount of deferred Total amount of deferred remuneration paid in cash during the year 2020 remuneration paid out in the was Taka 284.93 million. financial year. j) Breakdown of amount of i) Fixed and variable remuneration paid in 2020 are as follows: remuneration awards for the financial year to show: in million Taka Particulars Amount Fixed pay 5,247.47 Variable pay 208.20 Total fixed and variable pay 5,455.67

ANNUAL REPORT 2020 185 Remuneration (Continued)

ii) Deferred and non-deferred (paid during the year).

In million Taka

Particulars Amount

Deferred 281.93

Non-deferred -

iii) Different forms used (cash, shares and share-linked instruments, other forms).

• Remuneration is paid on cash basis (i.e. direct credit to the employee Bank account and/or Payment Order/Cheque), as the case may be, as per rule/practice. k) Quantitative information about employees’ exposure to implicit (e.g. fluctuations in the value of shares or performance units) and explicit adjustments (e.g. claw backs or similar reversals or downward revaluations of awards) of deferred remuneration and retained remuneration:

i) Total amount of outstanding deferred remuneration and retained remuneration exposed Not Applicable to ex post explicit and/or implicit adjustments.

ii) Total amount of reductions during the financial year due to ex post Not Applicable explicit adjustments.

iii) Total amount of reductions during the financial year due to ex post Not Applicable implicit adjustments. f inancial inclusion

FINANCIAL INCLUSION THROUGH DIGITAL FINANCIAL SERVICES MOBILE BANKING – ROCKET: THE TRAILBLAZING DIGITIZATION TOOL Financial inclusion enables individuals and businesses to for financial transactions. Financial inclusion has become a have access in various financial products and services that significant matter in developing countries like Bangladesh. meet their needs. The existence of an inclusive financial Access to a transaction account is the first step toward system is very crucial for the economy where transactions, broader financial inclusion since it allows people to store payments, savings, credit and insurance etc. delivered in a money, send & receive payments. A transaction account responsible and sustainable way by financial institutions. can also serve as a gateway to other financial services. An inclusive financial system enhances efficiency and Financial inclusion brings individuals and small businesses sense of well-being by providing safe and secure platform into an eco-system where they can flourish and contribute

Mr. Zunaid Ahmed Palak MP, Honorable State Minister of ICT, inaugurating DBBL Agent Banking Outlet at Singra, Natore

ANNUAL REPORT 2020 189 to develop a broader formal economy. It is also important that all the other shareholders of financial inclusion like worker industry, public sector, NGOs, civil society etc. should work together to make a difference and a long- lasting impact on the economy. Financial institutions have been increasing financial service accessibility in rural areas. They are using agent network to reach undercover rural population. Financial Inclusion thus is a high priority policy goal for developing and developed countries in order to ensure stable and equitable economic growth and it is not possible leaving aside a large number of populations out of the Box. Digitizing payments with the help of telecommunication Orientation on ROCKET salary account facilities at factory network can play a vital role in the process of financial inclusion. Financial exclusion is a barrier to the Restructure of Financial Inclusion Division development of economic growth of a country. Dutch-Bangla Bank Limited has been continuing digital Shifting payments from cash to electronic forms financial services under its Financial Inclusion Division help driving greater financial inclusion and economic since 2011- started with Mobile Banking services and opportunity in many countries. The Government of later on Agent Banking service also included in Financial Bangladesh is laying the groundwork through regulatory Inclusion Division. In the passage of time, Mobile measures, and an innovating private sector is also driving Banking and Agent Banking operation have expanded the shift from Cash to Digital. Although all forms of digital enormously. To have more focus on each activity and to payments have been increasing in Bangladesh, the mobile get better outcome in respect of business and compliance, financial services (MFS) industry in particular is notable for the competent authority of the bank has decided to its rapid expansion. Government-to-person (G2P) digital restructure financial inclusion division into three separate payments have also grown significantly, and further divisions namely- digitization of G2P payments could save a huge amount i) Mobile Banking Division annually across major social safety net programs. ii) Agent Banking Division In this way, Mobile Financial Services (MFS) and Biometric POS have come up in the field through Agent Banking iii) Financial Inclusion Compliance Division and also opened up a new window for Bangladesh under Financial Inclusion. In line with the guidelines of the Mobile Banking – ROCKET: The Trailblazing Government & Bangladesh Bank, Dutch Bangla Bank is Digitization Tool playing vital role in Financial Inclusion through its MFS under Dutch-Bangla Bank has launched their mobile banking ‘Rocket’ brand and Agent Banking throughout the country. operation on 31st March 2011 with a motto to give Salary Disbursement in Pandemic Period, financial services to the unbanked. DBBL, the leader of 2020 technology driven innovative banking in Bangladesh, is The COVID-19 pandemic has forced the economic activities the pioneer to introduce Mobile Banking based financial of the world to come at a halt. To save the economy from services in Bangladesh as a part of inclusive Banking. Till a devastating recession, different country has taken today, DBBL mobile banking – ROCKET has reached in a various stimulus packages for different sectors. The new height with a remarkable growth in Agent expansion, government of Bangladesh has also introduced stimulus Customer acquisition and transaction compared to packages of a total of BDT 1,000 billion. The commercial previous year 2019. The most exciting & memorable event banks have been given the responsibility to distribute for DBBL Mobile Banking was to rebranding their Brand these stimulus package loans including workers’ salary Logo from ‘DBBL Mobile Banking’ to “ROCKET”. and wages. Since ROCKET has the major market share in “ROCKET” is the symbol of Faster & Flexible banking salary disbursement a good of amount of stimulus loan solution with advanced technology which assuring was disbursed directly to factory worker as their monthly highest security of every transaction that gives a comfort salary. To disburse these salaries to factory workers, we to a Customer. Through re-branding, re-structuring the opened approximately 10 lac new rocket accounts and distribution channel & re-designing our marketing strategy eventually disbursed salary to these accounts. to make available our service at the door of the customers. Rocket Infrastructure

Regional Operation Regional Operaon -Regions Sales & Distribution -Mobile Banking Offices -Compliance Team Salary Disbursement -AM/SSM/SM -Trade Markeng Officers Bills Pay -Merchant Officers -Super Agents Collection (B2B) -DSRs -Acve Agents Product Development Distribuon Trade Marketing & Brand Promotion -Partner Life cycle management -Distribuon Development Telco Relations -Campaign management -Reporng and Commission management Mobile Banking Oces -Agent Life cycle management

Market Infrastructure

- Take virtual money from DBBL - Deliver - Deploy DSR gent virtual

at market for -A money to DSR - Generate agent & agents KYC collection - Collect - Make service physical Super Transactions - Get money from

- Bills Agents Commission agents Payment for KYC & - Educate -Get agents on Transaction Commission various for KYC & campaigns Transaction - Motivate agents to generate KYC

Geographical Coverage more confidence to the customers. The setup of those offices creates jobs for the local people as well as support On the eve of starting of mobile banking operation on to infrastructure development. Presently, we have 77 nos. 31stMarch 2011, mobile banking services were made of Mobile Banking Offices under which 181employees are available only in 46 nos. of Upazila of 6 districts under working at 64 districts of the country to cater different Dhaka Division. Presently, we are glad to inform you that services to the customers. Rocket has foot print in all 64 districts of each &every areas across the country where 289,677 retailers/agents Product & Services offering through with the help of 283 Super agents are delivering mobile ROCKET banking services to our customers. Rocket is successfully established as a lifestyle product Mobile Banking Offices for the customers for its versatile product features & variations. DBBL has launched different types of products While mobile banking activities will be carried out by the keeping in the mind of customers demand. Among agents, the presence of DBBL offices and officers will give these, “General Consumer Product” product is very much

ANNUAL REPORT 2020 191 popular among the customers of Rocket for its simplicity l Corporate Salary/Allowance Disbursement and lower charges. There is a product for students l Air time Top-up/Balance recharge to any operator and corporate salary accounts called “Stipend & Salary l Person to Person Fund Transfer (P2P) Account”. These products have also other features like; depositing money, top up, bill pay, ATM withdrawal, P2P, l Bill Payment (i.e. Utility bills, Tuition fees, remittance and purchase products or sends money etc. Admission fees etc.) through DBBL Mobile Banking. l Merchant Payment In 2020, DBBL has introduced a salary disbursement l Business amount Collection facility product complying and fulfilling the requirement of l ATM Withdrawal Salary/wages disbursement for the Garments worker l Linkage between Core Banking & Mobile Banking during pandemic period. l Balance Inquiry Presently the line of products & services includes: l Statement Inquiry l Customer registration for opening accounts l Sending money from Rocket A/C to any DBBL through *322# Core A/C l Cash-in (Cash Deposit) l Sending Money from Rocket account to any DBBL l Cash-Out (Cash withdrawal) Card Number l Inward Foreign Remittance from abroad l Payment through e-commerce for any kind of e-shopping

“Pre-registration” facility is very much helpful for registering the customer to Rocket Account specially for urgent requirements or bulk account opening like Garments Salary, Government Stipend projects accounts by simply dialing *322#. We are also planning to implement e-KYC, where customer can open their account in simple three steps and start transaction.

Merchant Payment

Linkages Mobile Cash with core Bill Top-up In Bankinging A/A/C Payment

Mobile SERVICES Banking Collection ATM Pre-registration Apps Withdraw Process

Payment to Cash Fundund ForeignForei Out E-Commerce Transfer Remittance Site

Salary Payment

Products & Services of ROCKET at a glance Service Network set ups of ROCKET Inward Foreign Remittance To address the untapped and unprivileged market, a total Western Union Cash pick customers now can receive their number of 181 employees, 77 MB&AB Offices and 2,89,677 money in Real Time giving MTCN no. in his/her mobile. agent points are continuously working together to meet all part of customer requirements. Moreover, 208 DBBL Unique Check digit Branches, 1190 Fast Tracks, 4414 Agent Banking Outlet, 8 Electronic Student Booth, 28,650 Merchants, Call Center DBBL Mobile banking account has robust security. The (16216) and 4862 ATMs and partner banks’ branches are account consist of 12 digits number i.e. 11 digit mobile also working as mobile banking access channel for the number and additional 1 digit check number. As a result, customers. if anybody gives any wrong number while transferring money to other ROCKET Account, the transaction will not Some exclusive ROCKET products be successful because of having check digit at the end of each ROCKET Account. It prevents from fraudulent Process of Pre-Registration activities also. If forgotten, one can retrieve his/her check digit and product type from the ROCKET Menu in the “Pre-registration” facility enables the Customer to register following way: DBBL Mobile Banking account just by dialing *322# avoiding the dependency to open the account from the Inquiring Check digit & *322#  5  4  Secret Agent points. When a new customer dial *322#, system Type of Product PIN Code will ask him whether he is interested to register DBBL Mobile banking or not. If yes, press “1” or “2” to cancel. Linkage Facility To get the full benefit of DBBL Mobile Banking, Pre- ROCKET is having a unique facility through which a Registered customer needs to fill up KYC form and submit Dutch-Bangla Bank Ltd., BRAC Bank Ltd. & Midland it to any Agent or DBBL First Track or any Mobile Banking Bank Ltd. Core banking account holder can establish office with required documents. After authorization by linkage between his/her Core banking account with the bank Official pre-registered customer will be allowed his/her ROCKET account that enables him to transfer to do all types of transaction. money from Core banking account to ROCKET account with daily limited amount completely ‘Free’. Beside this, General Consumer Account one can send money to any DBBL Core banking account instantly with applicable charge. These facilities separate Considering the customers’ convenience DBBL has ROCKET from other MFS in the market. With this facility, introduced single mass product from October 2018. In a ROCKET account holder can easily do Top-up, Bills General Consumer account cash-in charge is free and Payment, P2P (person to person), Merchant Payment and reasonable charge applicable only while cash-out from all ATM Cash withdrawal without having any ATM Card. channels like, DBBL branches, ATM booth & Agent points. Balance recharge (Air time purchase)/Data Stipend & Salary Account purchase

Stipend & Salary Account is a specialized product for A ROCKET account holder can purchase airtime or data of students who are getting government stipend or other any mobile operator i.e. GP, ROBI, Bangla Link, Tele Talk stipend under ROCKET service and also the employees and Airtelat any point of time having available fund in like garments, NGO and other company workers getting the ROCKET wallet. It’s a very popular service and getting salary/allowances under ROCKET platform. This product increased day by day to our customers. has a very special feature of free cash-out from ATM/Fast Process Flow of transfer from/to any DBBL Card Track. Number or Core Banking Account:

Receive money through BEFTN ROCKET account to any *322#  4  4  Debit Debit Card Card No.  Amount  PIN Any ROCKET account holder can receive money through using BEFTN facility from any local bank of Bangladesh. It ROCKET account to any *322#  4  3  CBS A/C enables the account holder to receive foreign remittance Core Banking Account No.  Amount  PIN that received by other bank and can withdraw it from ATM Your linked Core Banking *322#  4  1  1  or agent point. Moreover, by receiving money through Account to Rocket Amount PIN BEFTN, one can use this money for giving utility bills, Account Admission fee/Tuition fees. ROCKET Account to *322#  4  2  1  your linked Core Banking Amount  PIN Account

ANNUAL REPORT 2020 193 ROCKET Mobile APPS iOS compatible. Customer can easily download this from “Google Play store” and “Apple Store”. Besides, Customer Smart phone penetration is very high in Bangladesh. can choice the language from both Bangla and English. Considering the comfort of the young generation and Till31stDecember 2020 127,795agents have already smooth service, ROCKET has introduced transaction installed Apps in their mobile and doing transactions. In facility through Apps. This service is both android and the apps we are able to put our promotional activities.

Compliance & Legal Issues of ROCKET necessary checking. If required, Bank Officials call or visit the Customer for further checking. During the Customer acquisition, ROCKET maintains the Bangladesh Bank guideline precisely. All the mobile PIN Change Banking officials, Sales people, Super Agents, Direct It is very much usual that a ROCKET account holder may Sales Representatives (DSRs) are well trained about the require to change his/her secret PIN code for urgent Bangladesh Bank guideline and Anti Money Laundering purpose. ROCKET account Menu is having such kind of issues. Besides, Agents who give Cash-in, cash-out and facility through which one can reset his/her Secret PIN Customer acquisition support to the Customers, are also code by using the following path: communicated about the compliance issues time to time ROCKET account PIN *322#  5  3  Enter Old by the ROCKET representatives. Change PIN  Enter ‘New’ PIN We don’t allow duplicate ROCKET account for the same Customers. In this regard, Mobile Banking System doesn’t Engagement of Trade Marketing Representative allow multiple accounts with the same NID. Besides, (TMR) in field ROCKET officials maintain the options to check each Brand visibility is the single, most powerful message that NID from the election commission portal. During the a consumer can receive. And the message says that, this KYC information input, system automatically checks the product is good and you can trust this product. This brand information from the UN sanction list. Every account visibility encourages and motivates the customer to look is approved in the system by the Bank Officials after at the product along with the brand attributes. Metro areas, 40 nos. of agent/day in urban areas and 35 nos. of agent/day in rural areas.

We have observed a positive growth in overall transactions, activation of New Agents, Activation of New Customer and the business growth as well as to motivate the agents for support DSR project. Positive impact on the Socio-Economy by ROCKET

ROCKET brings the paradigm shift in the socio economy in the rural areas by creating full range of financial services including savings, fund transfer, money withdraw, pay bills and others.

ROCKET inclusive banking program has increased access to financial facilitation for the people, entrepreneurship among the unemployed people. Over 0.289million Agents are now involved to give banking facilities as a new business or expansion of their previous business. Besides, it has brought dynamic solution in transferring money Visibility at different agent points in the value chain of the rural marketing system. People from distinct places can do marketing of their seasonal One of the shortest ways to ` brand visibility, is to crops, homemade products directly with the urban areas advertise. Advertisements can be in the form of TVC’s by the help of ROCKET Cash-in/out, Merchant payment or in the form of radio ads. They can be in print, in services. It increases the habit of force saving among magazines, online or anywhere where the target audience the poor people which help the formation of domestic can be found. But in Bangladesh, there are many rural capital, spurring entrepreneurship. Besides, ROCKET or semi-urban areas which are traditionally media poor increases women empowerment at the pastoral areas by and have little access to print. Viewing the nature of introducing financial inclusion to them which significantly MFS Product and the service provider, DBBL has engaged reduces early marriage and child mortality. around 403 nos. of Trade Marketing Representatives (TMR) and TMR Supervisors to delivery our “ROCKET” POS DBBL mobile banking introduces technology adaption for Materials to the retail point. Their duty not only limited the development of e-government services in Bangladesh. to deliver this but also to ensure visibility by strong It has reduced the scope of corruption in the Government monitoring from their end. and private organizations related to salary/fund disbursement or payment collection. Engagement of Support Direct Sales Representative (SDSR) to Super Agents These financial developments reduce the overall income inequality, increase income growth and accelerate poverty Presently, we are having around 289,677Agents against alleviation. 1,843 Direct Sales Representatives (DSR) who are working across the country within our Distribution line. Each Agent Partners DSR has to visit approx. 90 agents per day which is not possible. As such, we have engaged support DSR in aid Agent network is one of the vital aspects for running to facilitate to standardize/rationalize the geometric mobile banking within an emerging developing country distribution service approach and strengthen present like Bangladesh to facilitate financial inclusion at grass channel which has added value in our regular distribution root level. They are serving the end customer and service in particular as well as business as a whole. Now, acting as a first contact point to deliver the service. DSRs visit frequency are daily 60 Nos. of agents/day in At present Dutch-Bangla Bank Mobile Banking has an

ANNUAL REPORT 2020 195 extensive 289,677 agent footprint in 64 districts through Telco Partnership the partnerships with different industry stakeholders including government and private entities such as Local ROCKET & Telecommunication Partner Robi Axiata limited Government Division (LGD), Access to Information (a2i), jointly launched an exclusive recharge campaign on 20th Mobile Network Operators (MNOs) and DBBL own Agents. Oct’2020 for Internet product. In this campaign ROCKET This agent points are increasing day by day to provide the customer got additional benefit along with the regular banking services to the door step of the people. internet offer When top up TK. 69 & TK.114 through ROCKET APPS & dialing *322#. Development program for the Field Staffs

DBBL Mobile Banking has arranged regular training and development program for the Field Staffs in order to create a professional and skilled workforce. Besides, as a part of maintaining compliance issues, we have run audit and survey throughout the year at the all concern part of the mobile Banking operation. Moreover, to create strong understanding about compliance and to be aligned to the Bangladesh Bank guidelines we have conducted several workshops for our field staffs especially on Business trend & Anti Money Laundering issue. Business Review Meeting

In the first quarter of 2020 we’ve there were Regional Business Review Meetings conducted by the Chief Retail Business Officer in presence of the other business managers where the Business Mission & Target for 2020 were discussed.

ROCKET-ROBI exclusive data campaign

Disbursement Salary Disbursement

A major shift to digital payments from Business to individuals is not a dream now a day in Bangladesh. The continued transition to company salary payment is an important step for a successful shift toward a less cash economy. ROCKET is the pioneer and popular payment disbursement solution for the corporate bodies and different government and private houses. Digitization Business Review Meeting at Regional level & award giving of payment system is one of the priorities of the government. ROCKET is holding major portion market Brand Promoter to Promote ROCKET share of disbursement among all the MFS operating in Product & Services Bangladesh. Apart from this, we are disbursing salaries / allowances to the employees/ beneficiaries of different Brand Promoters (BP) are deployed to promote P2P government organization, grants to the natural calamity among the garment’s workers. BP provides training to affected people, insurance claims /payments, staffs of AC workers to educate them while they came to withdraw Land office, UP Chairman, Member, Secretary and Village their salary to ATM. Police of different districts. Briefing of RMG workers on ROCKET salary account facilities at factory Prime Minister Grants Disbursement in Pandemic Period In the year 2020, DBBL Mobile Banking (Rocket) has disbursed PM grants to 8,54,859 beneficiaries to the ultra-poor people successfully.

Government Grants disbursement ceremony at Rajshahi Barind Multipurpose Development Insurance Payment collection and Authority (BMDA) Disbursement

The ministry of Agriculture created BMDA on 15th January, Collection of Insurance Premium through mobile banking 1992 to develop agricultural sector for greater Rajshahi, is an innovative method that DBBL has delivered to the Dinajpur, Rangpur and Bogura area of Bangladesh. In this insurance Industry. Payment by own through a mobile is connection the government of Bangladesh disburse the always convenient to the policy holders which saves their agricultural subsidy to the farmer of these area through time and reduces the cost and tension. DBBL ROCKET. In 2020 Government Subsidy was dis- bursed to 17,905 no. of farmers in 16 Districts. Bill Payment/Tuition Fees/Admission Fee

Disbursement to NGO beneficiaries ROCKET is a lifestyle product. Nowadays, “Bills DBBL Mobile Banking also working with most renowned Pay” is becoming a very popular service among the International / Local NGO’s UN bodies like WFP (World Governmental/Non-Governmental organization and Food Program), UNDP, Oxfam ,Terre des Homes, Islamic people. Presently, majority market share of Bills pay Relief, Muslim Aid, Caritas, Shakti Foundation, Grameen transaction has been taking place through ROCKET. Shakti, Concern World Wide etc. ROCKET Customers can pay their different monthly or

ANNUAL REPORT 2020 197 onetime payment like Educational institutions admission/ Bridge at Bhairab and Lalon Shah Bridge at Pakshi, 6th monthly fees, utility bills through this facility. To avail the China-Bangladesh Bridge at Narsingdi. ROCKET is the service, Customer gives the Biller ID (Institution code), pioneer to introduce this service in the country. bill number, own ID and the amount in the respective field for making payment. Recently, DBBL has signed an agreement through which an Indian Visa Applicant will be able to make payment of their VISA fee through ROCKET. Almost all the renowned Universities are collecting their admission fee through ROCKET. Payment Collection Business to Business (B2B) solution

There are hundreds of companies who collect their sale proceeds from their Distributors/Depot/Branch Office/ Inauguration of Electronic Toll Collection system by the Secretary Sales Centers all over the country within a few moments of Bangladesh Bridge Authority in a hassle-free way by using the ROCKET Business to Business (B2B) payment collection solutions. DBBL’s Super agents are engaged all over the country including rural area to collect money from the target sub-base such as Distributors/Depot./Branch Office/Sales Centers. Corporate Head Office are comes to know the deposit details on real time basis.

Benefits of this process are

l Will be able to know their Distributors/Depot./ Branch Office/Sales Center wise transactions details on Real time basis through a portal. Branding at Bangabondhu Bridge l Collected amount will be available in your Bank Agent Banking: Account on the next working day or as per your requirement. Agent Banking is a Banking system of providing banking services to the underserved/disadvantaged segments of l Recycling of cash in bank, will be increased. the society through engaged agents under a valid agency l Render extensive banking facilities for the agreement. enterprises that are doing their business by deploying Sales Representatives throughout the The owner of an outlet provides formal banking services country. on behalf of a bank. Transaction process is simplified as well as secured and customers can get services at their l Less risk of fund. door steps. Transactional cost/account operating cost l The process is instant and cost efficient. is less than traditional banking system. Globally these Toll-Collection retailers are being increasingly utilized as important distribution channels for financial inclusion. Bangladesh In part of digital enhancement Bangladesh introduce Bank has decided to promote this complimentary channel digital toll collection system under road transport and to reach out to the unbanked and underserved segments bridge ministry. The country’s first ever digital toll of the society as well as existing bank customers with booth was opened at Meghnabridge Toll Plaza at Dhaka- a range of banking services especially to geographically Chattagram highway in 2019. Similarly, this system also dispersed locations. Agent Banking has made significant introduced at Bangabondhu Bridge on Jamuna river, Shah contribution to rural economy over the past few years and Amanat Bridge on Karnaphuliriver, Syed Nazrul Islam its becoming popular. Launching program of 4000th DBBL Agent Banking Outlet

Exterior & Interior of DBBL Agent Banking Outlet

Agent Banking Model: l All Transactions are Real-Time. l All Transactions are authenticated by Bio- There are two types of model providing Agent Banking authentication (fingerprint) of Customers. service in Bangladesh. One is distribution led model and l Customers get SMS Notifications if mobile another is bank led model. DBBL is using Distribution led number included at the time of Registration model providing Agent Banking services to the customers. l Agent outlets are equipped with Bio-Metric Where- devices; by which customer registration & other banking services can be done. Bank

Branch-Cash Business Development Rebalancing point for Center/Head Oces Master Agent

Master Agent/ Distributor

(For Cash Rebalancing & KYC & Doc Collection)

DBBL Use this Distribution model for their Agent banking Channel. Agent Outlet This model helps for Easy Cash rebalancing in Rural and Urban area also.

Teller/ Cashier

(Customer Interaction person at Agent Outlet)

Customer

ANNUAL REPORT 2020 199 Technical Tools

What is Biometric Account? Biometric Account is an account opened by the customer registering his/her Finger-Print at DBBL nominated Agent Banking outlet. Geographical Coverage DBBL started Agent Banking Pilot Launching on 19th January 2015 to serve the un-banked people with 100% secured transaction using their Finger Print from any corner of the country. DBBL already launched 4,414 Agent Outlet covering 487 Upazilla under 64 District till 31st December 2020. AnAgent Outlet is the place where customer can get DBBL Agent Banking services. We are having 502 nos. of Master Agent engaged in re-balancing service to our Agent Outlets for smooth operation of client service. Region wise Outlet As of 31 December 2020 Products and Services of DBBL Agent Sl. Region Name District Agent Upazila Number of Banking Coverage Banking overage Outlets Office Cash Deposit Cash 1 BARISHAL 6 6 42 303 A/C opening Withdrawal 2 BOGURA 4 4 36 272 Transaction Facility for Existing Core-Banking Cheque 3 CHATTOGRAM-1 3 3 20 181 Customer 4 CHATTOGRAM-2 2 3 24 93

5 CUMILLA 3 3 28 245 Statement Inquiry Fund Transfer 6 DHAKA-1 3 3 18 214

7 DHAKA-2 2 (Manikganj 6 14 264 DBBL Agent Banking Gazipur, Dhaka) Product & Services E-Com Bill Payment 8 DHAKA-3 1 (Dhaka) 3 0 123 Transaction 9 DHAKA-4 6 3 165 Salary 10 DINAJPUR 4 4 29 241 Merchant Disbursement Payment 11 FARIDPUR 4 4 24 251 Cash Remittance 12 JASHORE 4 4 21 204 (PIN Based) Loans Remittance 13 KHULNA 3 3 25 179 disbursement ATM Card through (A/C Based) 14 KUSHTIA 4 4 18 158 15 MYMENSINGH 3 3 36 248 l Account Opening or Registration 16 NOAKHALI 3 3 20 221 Customer can register Biometric Account from any 17 RAJSHAHI 4 4 31 240 Agent Banking Outlet authorized by DBBL. Agent 18 RANGPUR 4 4 27 271 registers the fingerprint of the customer through 19 SYLHET-1 2 2 24 132 biometric machine. Finally the account authorized by 20 SYLHET-2 2 2 20 172 the Bank Official after verifying the information on 21 TANGAIL 3 3 27 237 the KYC form and documents. Normally, it takes 1-3 Total 21 64 77 487 4414 working days for full approval. l Opening of Joint Account their cheques at any branch of Dutch-Bangla Bank A joint account can promote a cohesive and unified Ltd. across the country. relationship. To fulfill customer demand and market l Linkage between Core Banking & Agent Banking requirement, we have incorporated joint account The beauty of our Agent Banking system is that feature in Agent Banking System. Joint accounts are our Core Banking Customers’ can establish linkage normally opened by interested customers mainly by registering their Finger Print in any of DBBL married couples, close relatives, business partners, Branches with his own Core Account and can enjoy domestic partners or several individuals. With a cash withdrawal facilities from any Agent outlet. joint account, financial management is easy and all But deposit facility is available for all Core Banking parties in the account exercise authority over the Account holders without doing any finger print transactions in the account as agreed upon during registration. account opening. It helps for increasing deposit growth effectively. l Linkage between Agent Banking & Mobile Banking Agent banking customers can link their account with l Opening of DPS Account their mobile banking (Rocket) account. To avail this Biometric Deposit Plus Scheme (DPS) is a special facility agent banking customers have to visit any type of Savings product designed for the small savers DBBL Branch across the country. who can save money on monthly basis. The amount l Remittance Service to be deposited every month is Tk.100/- per month or its multiple and the tenure is 3,5,8 or 10 years. An With a view to provide fast, quick and reliable attractive interest rate is offered for this product. The remittance service to the beneficiaries we have monthly installment is realized automatically from decentralized our remittance services. Now we are the Biometric Savings Account of the Customer. able to serve the customers instantly through all Agent Outlet. Customers are getting cash pickup l Opening of FDR remittance services at their door steps 7 days in a Biometric Fixed Deposit (FDR) is a special type weak with the help of Agent Outlet. As such the of Term Deposit product designed for the savers number and amount of remittance is increasing day who are willing to deposit money for specific time by day. period. The Customer can open Biometric FDR for l Loan Products Tk.10,000/- and above amount for 3, 6 & 12 months tenure. An attractive interest rate is offered for DBBL Agent banking is gradually increasing their this product. Cash transaction for opening the FDR lending operations countrywide. Currently, DBBL will not be allowed. FDR will be opened by debiting agent banking plays a facilitator role in credit delivery one’s Biometric Account and will be credited to that through agent banking channel. DBBL Agent banking Account at the time of encashment. is emphasizing Retail & SME loans in rural areas and already launched different loan programs for l Cash Deposit and Withdrawal from Agent Outlet as unbanked people for creating Entrepreneur as well as well as Branch eliminating poverty in ultra remote area. Considering Customer can deposit money immediately after rural marginal people and rural Woman-entrepreneur registration but withdrawal is allowed only after the Agent banking has designed its loan products by approval of the Account. offering lower interest rate and easy loan processing l Cheque mechanism. Now, Agent banking customers For providing more banking facilities as well as are enjoying loan products viz. DBBL Women to facilitate customers with another instrument Entrepreneurs Financing (Uthsaho), Prantik Loan, which is substitute of cash payment, DBBL Agent SME Term Loan (Somridhi), SME Cash Credit (Len- Banking recently introduced cheque for clearing and Den) loan at reasonable interest rate. In addition, cash withdrawal (over the counter) for their valued to meet customers’ dream Agent banking is also customers. After introducing this facility now the focusing on Personal loan and Home Loan for their customers of Agent Banking can collect and deposit valued customer.

ANNUAL REPORT 2020 201 DBBL Agent Banking Loan Products:

1. DBBL Personal Loan “Jokhon 2. DBBL Full 12. DBBL Tokhon” Secured Loan “Prantik” (Term Loan)

11. DBBL Distributor 3. DBBL Financing (Cash Home Loan Credit) “Prosher” “Thikana”

4. DBBL Car 10. DBBL Festival Loan Loan “Utshab” “Prottasha”

9. DBBL Women 5. DBBL Cash Enterpreneurs Credit “Len- Financing (Term Den” Loan) “Uthsaho” 8. DBBL Women Enterpreneurs 6. DBBL Term Rinancing (Cash Loan Credit) 7. DBBL “Somridhi” “Shofolota” Property Loan “Janala”

Daily Number of Transaction & Amount Limit (Regulated by BB) for Agent Banking Customer from Agent Outlet: Considering the Agent Banking Customers’ demand, following the Bangladesh Bank guideline the transaction limit has been designed. BDT Amount in Lakh Daily Number of Transactions and Amount Limit Transfer/BEFTN/ Cash Deposit Cash Withdrawal Inter-bank/Intra-Bank Nature of Accounts No. of Total No. of Total No. of Total transactions Volume transactions Volume transactions Volume Current Account 4 6.00 2 5.00 4 15.00 Savings Account 2 4.00 2 3.00 2 5.00 Special Notice Deposit (SND) 4 6.00 2 3.00 4 10.00 Fee and service Charges for the Customers:

SL Type of Services Nature of Charges Charges & Commission Charge to be realized from 1 Registration Free N/A

2 Deposit and withdrawal at DBBL Free N/A Branch / FT 3 Withdrawal from DBBL ATM Free N/A

4 Remittance disbursement (Biometric Free N/A account) 5 Salary Disbursement Free N/A

6 P2P amount transfer (within the zone) Free N/A

7 Mobile Top Up Free for Customer N/A

8 Cash Deposit to Agent Outlet i) Free for same territory Open ii) 0.10% of txn amount (other territory) (Min TK5/- and Max TK 200/-) 9 Cash withdrawal from Agent Outlet i) Free for same territory Open ii) 0.30% of txn amount (other territory) (Min TK5/- and Max TK 500/-) 10 Fund Transfer by the customer of i) Free for same territory Open other territories, CBS & MBS at Agent ii) 0.10% of txn amount Outlet (other territory) (Min TK5/- and Max TK 200/-) 11 Savings account i) Balance inquiry NIL N/A Fee ii) Statement NIL N/A inquiry Fee iii) Account NIL N/A Maintenance Fee (Service Charges) iv) Incidental NIL N/A charges v) Closing charges Amount available in the Customer account at the time of closing but not more than TK. 10/- vi) Minimum TK10/- Customer Balance

ANNUAL REPORT 2020 203 SL Type of Services Nature of Charges Charges & Commission Charge to be realized from 12 Salary account/ School Banking i) Balance inquiry NIL N/A account Fee ii) Statement NIL N/A inquiry Fee iii) Account NIL N/A Maintenance Fee (Service Charges) iv) Incidental NIL N/A charges v) Closing charges NIL N/A

vi)Minimum NIL N/A Balance 13 Current account i) Balance inquiry NIL N/A Fee ii) Statement NIL N/A inquiry Fee iii) Account NIL N/A Maintenance Fee (Service Charges) iv) Incidental NIL N/A charges v) Closing charges Amt. available in the A/C at the time of closing but not more than TK. 100/- vi) Minimum TK. 100/- Customer Balance 14 Debit card: (excluding applicable VAT) i) Issuance fee (1st NIL N/A year only) ii) Annual Fee (2nd TK.200/- Customer year onward) iii) Replacement TK.200/- Customer Fee/Reissue Charge iv) PIN Change Fee TK.100/- Customer

v) Network Fee TK.100/- Customer (yearly) (2nd year onward) 15 ATM Transaction Fee a) Own ATM Free Customer

b) Transaction TK. 20/- Customer through NPSB c) Balance Inquiry Free N/A Fee (Screen View) SL Type of Services Nature of Charges Charges & Commission Charge to be realized from d) Balance Inquiry TK.3/- Customer Fee (Print Copy) e) Mini Statement TK.3/- Customer Fee (Print Copy) f) Other Free N/A Transactions 16 Cheque Book (excluding applicable Issuance of Cheque TK.100/- Customer VAT) Book (Per leaf TK5/-)

17 Statement Charge Tk.50/- per instance Customer

18 Cash deposit by Rocket SA (core Negotiable (Concern CXO/ banking account) DMD may waive/approve the charge) 19 BEFTN Processing fee As per BB Guideline

20 RTGS Processing Fee As per BB Guideline

21 ATM Video Footage Tk.1000/- (All Cases) Customer

22 2FA Token Issuance Fee Free N/A

23 2FA Token Annual Fee NIL N/A

24 Collection of local cheque Maximum of Tk.50 per Customer cheque 25 Collection of outstation Cheque/Bills i) Up to Tk.50,000/- Tk.100 Customer (clean/documents) flat ii) Tk.50,000/- to Tk.100,000/- @0.25% iii) Tk.100,001/- and above @.20%; maximum Tk.500/- 26 Cheque return for insufficient fund Tk.100/- per instance from (Cash, Clearing and Transfer) the account holder of cheque in case of clearing. Besides in case of cash & transfer,Tk.100/- from beneficiary (If return memo is issued) 27 Standing Instructions NIL. N/A

28 Uncollected cheque book destruction Tk. 50/- if not collected Customer within 3 months 29 Cheque book request without Tk. 10/- Customer requisition slip 30 Loan All charges & Fees will be as per respective loan PPG

ANNUAL REPORT 2020 205 Services at Different Channels of Dutch- Local people & other renowned citizens are invited to Bangla Bank attend in inaugural program of Agent Outlet and a large number of people are seen to be present in each program. l All Agent Outlets l All DBBL Branches Sales and Marketing Activities: l ALL DBBL ATMs and Fast Tracks To promote the DBBL Agent Banking massive marketing l Internet Payment Gateway activity is going on across the country through Miking, UthanBoithak, KYC Mela, Rally, Gomvira, Jatra etc. to l Nexus Pay attract people to open biometric accounts. Presently, l Mobile banking (Rocket) we are having 3,265,558 Number of Accounts as on Restrictions/Prohibited activity for Agent 31December 2020, in Agent Banking. We have emphasized Outlet (Regulated by Bangladesh Bank): on opening female account in our channel and several programshave been kicked off in this regard. Agents are not allowed to provide the following services on behalf of the banks: l Enter into agent banking contract with more than one bank. l Operate or carry out an electronic transaction when there is communication failure/error in the system; l Carry out a transaction when a transactional receipt or acknowledgement cannot be generated; l Charge customers directly any fee beyond banks’ prescribed fees; l Offer any type of guarantee in favor of any customer; l Offer banking services on its own accord (provide banking services on its own account similar to those provided by it under an agency contract) or offer services that the principal is not authorized to offer; l Continue with the agency business when it has a criminal record or disciplinary case involving fraud, dishonesty or any other financial impropriety; l Provide, render or hold itself out to be providing or rendering any financial service which is not specifically permitted in the contract; l Open accounts, grant loans or carry out any appraisal function for purposes of opening an account or Uthan Boithak-organized by DBBL Agent Outlet Owner & Field Force granting of a loan or any other facility; UthanBoithak, like many other activities, isa special l Make debit or credit transactions using cheque; initiative by DBBL to increase financial literacy. It is an l Transact in foreign currency; endeavor by the partners to bring more customers under l Representing the bank in any means to a third party the financial umbrella and make them understand the without written consent from the bank; and benefits of having bank accounts. Lots of people are still excluded from formal banking and they do not know l Be run or managed by a bank’s employee or its associate. the advantages of banking hence awareness campaign are organized to let people know the benefits and Agent Outlet inauguration/Launching advantages of banking. Partners inform people of the Program locality beforehand that there will be an awareness session All the Agent Outlets are selected considering the needs & regarding “Agent Banking” which will be done by bank demographic condition of that area. DBBL has covered487 officials. Bank employees conduct the session with the Upazilla and successfully ensured footprint in those areas. help of partner and ensure interested people open account. Different KYC hunting program is going on in different community

Miking at Local Area on DBBL Agent Banking Product

Agent Banking Partner Meet & Day Out

ANNUAL REPORT 2020 207 Training & Development Program Salary Disbursement facilities. To enhance and develop socio-economic conditions of our country we introduced In the endeavor towards achieving excellence training and cashless salary disbursement for our valued clients. Right development is a must. It is a continuing process and at the moment we are covering 120 Organizations (with 23 DBBL always run training & development programs as and RMG Factories & others) to pay employee salary through when required for both partners and employees. us. Now on, we are disbursing almost 600 Mill BDT sala- DBBL ensure two types of Training who are engaged with ries per month. this Agent Banking: a. Class Room Training b. On the Job Training

Regional Business Review Meeting & Performance Award giving Program at Chattogram Region

Bills Pay and Collection A Spreads of 4,400+ Outlets are continuously working hard to improve and develop people’s life style, Socio- economic condition along with doing their money Management efficiently & smart. Besides traditional banking solution (Product and Services) Agent Banking School Banking under DBBL Agent Banking department is always effort to remain innovative & Up-to- date. Now, we are working for being ground-breaking as Projects to be their “Life Style” product. A customer is now being Also, we are partnering with different development able to pay his/her utility & service bills of a good number organization of country’s leading development activities; of organizations. We also collect different types of bills for those are carried with government, different national & corporate partners across the country through our Agent internationals agencies. They are disbursing their dif- Outlets to make B2B business easier. Most of our valued ferent social safety net/other allowances to the poor to corporate customers are DNCC, DSCC, REB, DESCO, DPDC, ultra poor marginal people’s through us. Other then, a2i NESCO, KGDCL, Dhaka WASA, Akij Biri, Ad din Trading, projects, UNDP, DFID, SWISSCONTACT BD, EGPP etc are Delta life insurance company Ltd. Jibon Bima Corporation, reliably working with us and we are proud of being their along with Different Schools, College & major Universities. key disbursement partner and making unbanked people This is how we are ensuring financial inclusivity at one’s financially inclusive. door step and simplifying customer’s life. Continuous improvement and adoption towards state of Corporate Disbursements: art technology with aggressive business attitude, Agent Therefore, we are extending our hands together to Banking is moving forward on and on; & hopping to cre- cover remote but salaried people for being digitalized ate benchmarking life style solution & experience to our for getting their wages or salary through Agent Banking customer through Agent Banking. Performance Comparison: 2019 and 2020

2019 2020 Particulars Number Number Growth Agent 490 502 2%

Outlet 3,771 4,414 17% Biometric A/C (Savings, MSE & 1,883,642 3,112,363 65% Interest Free) DPS 115,223 140,364 22%

FDR 9,654 12,831 33%

Loan 312 944 203%

Remittance 568,167 1,197,007 111%

Disbursement 600,916 661,009 10%

Bills Pay 219,150 607,296 177%

E-COM & POS 59,382 179,490 202%

Transactions(Cash Deposit, 18,432,883 24,504,154 33% Withdrawal & Fund Transfer) 2019 2020 Particulars Amount Amount Growth Remittance 40,453,828,296 60,844,655,704 50%

Loan 76,665,000 262,419,250 242%

Disbursement 5,006,464,379 5,872,361,829 17%

Bills Pay 1,822,943,827 3,716,055,959 104%

E-COM & POS 101,763,219 324,557,815 219% Transactions(Cash Deposit, 515,125,467,337 779,518,111,382 51% Withdrawal & Fund Transfer)

Financial Inclusion Compliance Division Manpower for Head Office and 231 (two hundred thirty one) manpower for Field level. Financial Inclusion Compliance Division has been established on October 25, 2020 to facilitate the Mobile Banking Geographical Coverage Division & Agent Banking Division by abolishing Financial On the eve of starting of mobile banking operation on Inclusion Division. This division will also maintain a strong March 31, 2011, Mobile Banking services were made compliance activity for Mobile Banking & Agent Banking available only in 46 nos. of Upazila of 6 districts under Offices, Agent Outlets under Agent Banking Division, and Dhaka Division. Presently, we are glad to inform you that Agents under Mobile Banking Division (ROCKET). Rocket has foot print in all 64 districts of each & every The division operates its activities through Head Office areas across the country where 289,677 nos. of retailers/ different Units and 77 (seventy seven) Mobile Banking & agents with the help of 285 nos. of Super agents are Agent Banking Offices all over the country. We have 27 delivering Mobile Banking services to our customers.

ANNUAL REPORT 2020 209 Mobile Banking and Agent Banking Offices opening process to ensure that all vital information and documents have been obtained. While mobile banking and Agent banking activities will be carried out by the agents/AB Outlets, the presence They ensure correctness of the Transaction Profile, follow of DBBL offices and officers will give more confidence to and update it when deemed necessary. They notify the customers. The setup of those offices creates jobs the Head office (FICD) about any suspicious activity or for the local people as well as support to infrastructure transaction of the customer as and when detected. development. Presently, we have 77 nos. of Mobile Banking & Agent Banking Offices under which 231 nos. of Compliance & Legal Issues of ROCKET & employees are working at 64 districts of the country to Agent banking cater different services to the customers. During the Customer acquisition, we maintain the Services at MB & AB Offices Bangladesh Bank guideline precisely. All the MB&AB officials, Sales people, Super Agents, Direct Sales Compliance team of Financial Inclusion Compliance Representatives (DSRs) are well trained about the Division provided different services for customer of Bangladesh Bank guideline and Anti Money Laundering ROCKET & Agent Banking in a umbrella through our issues. Besides, Agents who give Cash-in, cash-out and dedicated officers at 77 (seventy seven) Offices. Presently Customer acquisition support to the Customers, are also the following services have been providing our offices: communicated about the compliance issues time to time l Rocket Customer registration for opening by the field representatives. accounts through *322# Maintain Relationship with Law Enforcing l ROCKET account input and authorization Agency & Regulatory Authority: l Providing Account Statement The FICD maintaining relationship with the below l Rocket account PIN reset mentioned Low Enforcing Agencies and Regulatory l Rocket account close and fund transfer Authorities for the welfare of the people of Bangladesh l CBS MBS linkage request receive and execute and in quick response to control the financial crime: through nearest DBBL Branches 1. BFIU of Bangladesh Bank l Customer complaint management through 2. FICSD of Bangladesh Bank Escalation Matrix of call center 3. Police Head Quarter l Agent Banking Account authorization. 4. Counter Terrorism & Transnational Crime Unit of l Agent Banking FDR & DPS authorization & Close. DMP l Walking customer query meet up. 5. Criminal Investigation Department l ATM card issue of Agent Banking account Holder 6. National Security intelligence l Ensure due diligence as per IC & CD Audit report 7. Directorate General of Forces Intelligence Compliance & Control of MB & AB Offices Fraud Management:

AML/CTF program is effective within the MB&AB offices Sometimes customers act as per instruction and share by the supervision of Head office (FICD). Head office their secret information to fraudsters and looses their ensures all compliance issues of the MB&AB office is done balance from account. We always try to aware our properly under overall operational responsibilities. customers through poster, leaflet, SMS notification, verbal communication that they should not share account MB&AB office Compliance in-charge (SCM/CM) check due PIN or OTP to anyone. When we receive any customer diligence while opening an account and must be satisfied complain regarding fraudulent activity, we investigate about customer’s identification, proper KYC, TP etc. the issue through review of the customer. If found any before approving the account. Counter check the account mismatch, we report the issue immediately to MLTFPD. retail banking, school banking, VIP banking & e-business

BUSINESS OPERATIONS Retail Banking Lending Products a wide range of Retail Loan facilities. Personal Loan, Home Loan, Car Loan, Credit Card, Secured Overdraft Retail Banking, also known as a consumer or personal and Full Secured Loan are the Retail Loan product line banking, deals directly with individuals and provides of DBBL. Competitive interest rates and fees, affordable personal financial services to meet various individual needs. monthly Installment, suitable product parameters, Consumers are always concerned about the improvement simple processing, flexible tenure of loan repayment, of their standard of living. The banking sector is playing dedicated Relationship Managers, SMS alert on loan a significant role in this regard through Retail Banking. status, early full or partial payment facility are some of Over the last several years, Retail Banking has been proven the key features of DBBL Retail Loans. The parameters of to be one of the important profit drivers for Banks. The these products are regularly reviewed and redesigned to prospect of Retail Banking is increasing nowadays because meet the changing market demand. DBBL has effectively it has become a customer-based business and it caters to segmented the Retail lending customers. It offers very a large number of customers individually instead of highly competitive product features to its targeted segments, depending on a single customer. which has helped to position the bank as the preferred choice for the Retail Loan customers. A good number of Banks and Non-Banking Financial Institution (NBFI)s have come forward with Retail DBBL has already built a very strong presence in the Financing Solutions recently, targeted at different Retail lending business sector and has become one of consumer segments to satisfy their increasing need, the largest retail banks in the country in recent years due want & demand. Risk diversification, favorable net to its high emphasis and efforts. Diversified financial interest margin, less dependency on the individual solutions, flexible product features, doorstep service, borrowers - these is the key factors that draw multiple rigorous credit policy, method of customer selection and banks to the overall growth of the lending portfolio while screening, customer feedback, strong portfolio health exploring the retail market. Also, increasing market management, nation-wide sales, and service network (including Branch, ATM booth, Fast Track, Agent Banking, opportunities and low Non-Performing Loan (NPL) are Mobile Banking and 24 hours Call Center facility, etc.) critical considerations to focus on the Retail Business. In and unmatched technical innovation-advancement have recent years, performance in the retail lending market for helped us to develop a stable Retail Asset Portfolio and some of the country's banks has been notable. Besides, enabled DBBL to succeed in its Retail Loan market share. retail consumer segments are also known as a loyal brand In terms of NPL ratio, DBBL is continuously maintaining ambassador of a bank that, by word of mouth, spreads the one of the best track records in the industry as well. Bank's product characteristics and services to their friends and families. By balanced asset portfolio development The year 2020 has been a year of debacle across the and enhancement of the brand picture, the Retail Lending world, including financial markets and institutions in all sector plays a vital role in overall profitability. possible dimensions. The consequences of the raging COVID-19 pandemic have been catastrophic on business The financial solutions provided to creditworthy people growth in the entire banking industry which has impacted to fulfill their regular personal requirements are Retail the Retail lending business of DBBL as well. Maintaining Loans. To meet the growing needs and changing proper health and safety guidelines to face the COVID-19 lifestyles of the targeted consumers, DBBL provides pandemic was one of the priorities for the Retail Loan

ANNUAL REPORT 2020 213 business during the year 2020 for ensuring the safety of the customers, employees, and other stakeholders. Instead of physical meetings, mobile phones and digital platforms were widely used to communicate with the existing and prospective Retail Loan customers as well as internal customers. Necessary measures were taken for ensuring health safety awareness and hygiene of all concerns, who are involved in selling Retail Loan products and serving the Retail Loan customers both at front end and back office. Among the entire Retail Loan Portfolio, DBBL Personal Loan owns the bulk. DBBL offers Personal Loans up to Although DBBL fairly began the year 2020 in terms of BDT 2 million for a maximum tenure of 5 years mostly retail lending business growth, the pace had to slow for service holders, professionals, and landlords. Personal down for a few months due to the massive impact of Loan facilities are provided to eligible individuals for the COVID-19 pandemic. As a result, the Retail Loan meeting various personal needs. This unsecured credit portfolio witnessed deterioration from April 2020 to facility has significantly contributed to meet the July 2020, however, the Retail lending business took an emergency personal requirements, medical service, upward turn to regain its business momentum since marriage, education, festival, traveling, purchasing August 2020 and continued its growth exponentially till consumer durables and many other needs of the valued the end of the year. DBBL Retail Lending has managed customers. DBBL Personal Loan does not only provide to mark its highest ever quarterly disbursement as loan-worthy borrowers with inexpensive financial options well as business growth during the last quarter of the to improve their living standard but also plays a critical year 2020 despite the challenges. The contribution of role in the development of many sectors which involve Agent Banking to the overall growth of the Retail Loan medical service, education, tourism as well as lifestyle business has been increased remarkably in addition to consumer goods, etc. other business channels (such as Branch, Fast Track etc.). Due to effective customer selection methods, proper screening and quality loan sourcing, strong monitoring, and customer relationship management initiatives, DBBL has experienced favorable repayment of retail loans even during the pandemic.

DBBL introduced Document Management System (DMS) for faster and paperless processing of Retail Loans in the last quarter of the year 2019 as a pilot project, which was officially launched for all DBBL Branches in the year Private cars are no longer viewed as a privilege today, but 2020. It has significantly improved the overall Retail Loan rather as a requirement for many to fulfill their personal processing mechanism as well as generating robust MIS. mobility needs. DBBL Car Loan is provided to individuals In the year 2020, DBBL has conducted several training up to BDT 4 Million for a maximum tenure of 5 years and workshops on Retail Loan products, DMS, customer within their affordable spectrum to finance the vehicle service and other important aspects for all concerned (new or reconditioned) of their choosing. DBBL also DBBL officials and sales representatives through digital provides refinancing facility against personally owned platform. Two (2) New Business wings were launched vehicle (Date of purchase to be within one year). naming “Payroll Sales” and “Home Loan” to provide better Retail Loan services to the respective segments DBBL Home Loan supports consumers to purchase or and product customers under Retail Business Division in build their desired apartment or house as an affordable the last quarter of the year 2020. financial solution. It also helps the bank to establish products, metal products, etc. In Bangladesh, the living of a vast population depends directly or indirectly on such industries. As a result, economic growth has expanded exponentially and the consumer's purchasing power has also risen.

Home Loans also play a pivotal role in the country's Small and Medium business expansion. This has energized the housing market, providing new opportunities to fund a long term relationship with the valued customers. the new businesses developed on the foundations of the DBBL provides customers Home Loan facility up to housing sector. Due to offering competitive Interest rates, BDT 20 million for a maximum tenure of 25 years. This fees, and other attractive features as well as superior is a mortgage collateral backed secured loan product. customer services, DBBL is attracting more and more Homeowners may also avail DBBL Home Loan to renovate customers. Hence, DBBL Home Loan customers and or expand their current apartment or house. Besides, Home Loan portfolio are gradually increasing year on year customers may transfer their existing Home Loans from in line with its business strategy. other Banks or NBFIs to DBBL as per their requirements. Another enticing aspect of DBBL Home Loan is the Retail Loan Business Performance: refinancing against personally owned apartment/ house Over the last few years, DBBL has created a landmark in (date of purchase/handover/completion of building/ Retail Loan disbursement and business growth, which apartment to be within one year). has enabled it to ascend its position as a leading Retail The housing (real estate) industry plays a major role in Loan Service provider. DBBL has grown its Retail Loan Bangladesh's overall economic development. Not only portfolio substantially year on year while managed the does it encourage consumers to buy their preferred portfolio health very satisfactorily. home, but it also provides opportunities in terms of At the end of December 2020, the portfolio stood at creating new industries and jobs. Several industries are approximately 27,874 million (including Agent Banking), expanding side-by-side relying on the development of containing Home Loan 38%, Personal Loan 47%, Credit the housing market, including construction materials Card 9%, Car Loan 1%, and Secured Loan & SOD 5%. The such as concrete, iron rod, cement, aluminum, glass, portfolio mix in 2019 and 2020 is given below. electrical accessories, paint, tiles, sanitary goods, plastic

Portfolio Mix : 2019Portfolio Mix : 2020 5% 10% 1% 9%

7%

1% 38%

48% 47%

34%

Personal Loan Home Loan Car Loan Personal Loan Home Loan Car Loan SL & SOD Credit Card SL & SOD Credit Card

ANNUAL REPORT 2020 215 Year-end Retail Loan Number of Account and Outstanding

40,036 41,447 27,874 24,928

33,877 18,214 5,107 23,843 3,276 11,712 11,208 13,827 Taka in Million

2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 NUMBER OF RETAIL LOAN ACCOUNTS OUTSTANDING AMOUNT

*All Retail Loans Excluding Credit Cards *Retail Loans Outstanding including Credit Cards

Year-wise Retail Loan Disbursement Trend 11,126

9,468 9,236 7,873

3,016 Taka in Million

1,029

2015 2016 2017 2018 2019 2020 AMOUNT OF LOAN DISBURSED

Photos of some of the events and activities related to the DBBL Retail Loan business during the year 2020 are furnished below

DBBL Organized Training Session on e-Business, SME and DBBL signed MOU with renowned Real Estate Developers of Sylhet Retail Loan Products and Services for Fast Track employees of in December 2020 as a part of its Joint Promotional initiatives. Chattogram Zone in February 2020. DBBL School Banking Dutch-Bangla Bank launched the “DBBL School Savers • E-Commerce facility for payment of tuition fees, Account” on March 03, 2011 with the objective to create purchasing of study materials; the habit of contemporary banking practice from an early • Cash-free purchase/shopping through large POS age into the minds of students and to popularize the network; usage of ATM, NexusPay and technology based banking. • In addition to wide range of branch network, “DBBL School Savers’ Account” was designed to provide convenient deposit facility through Cash Deposit convenience for parents and their children with financial Machine at Fast Tracks across the country; responsibility. This account enable students to manage • This account will be jointly operated by the their online accounts on their own schedule with student with parents or guardian; convenient 24/7 access to their funds through ATMs and internet. “DBBL School Savers Account” may be As a part of the financial inclusion endeavor in 2020, one of the best ways to encourage the savings habit of DBBL conducted Financial Literacy Campaign in 200 the school-going students and to help them learn how educational institutions across the country through its to budget, account for and manage their own fund for branch network, to boost up and create awareness of higher education. School Banking Products among the students, guardians • Key Features & Benefits of Account: Any and educational institutions. The bank postponed its Bangladeshi students aged below 18 (eighteen) Financial Literacy Campaign as lead bank in Bandarban years can open the account with the following district due to COVID-19 pandemic as per directives of benefit & facilities: Bangladesh Bank. As on December 31, 2020 DBBL has 554,823 numbers of School Banking Accounts including • Interest bearing savings account; the scheme A/C. • Opening deposit as minimum as BDT 100/- only; • Free DBBL Nexus Debit/ATM Card; In addition, DBBL is also collecting tuition fees from 18 (eighteen) educational institutions such as BAF Shaheen • No renewal fee for DBBL Nexus Debit/ATM Card; School, Sunnydale School, Ideal School and College, • No yearly account maintenance/service fee; Viqarunnisa Noon School, Notre Dame College, Dhaka City • Free SMS alert service; College etc. through Nexus Payment Gateway. Year wise account and deposit position of school banking accounts • 24 hour cash withdrawal facility by using the are as follows: largest ATM network;

Year Total No. of School Banking A/C Balance (BDT in Millon)

2015 98,328 2,624.70

2016 123,172 3,429.90

2017 171,362 4,067.10

2018 307,989 4,520.60

2019 431,088 4,895.20

2020 554,823 5,427.70

ANNUAL REPORT 2020 217 VIP Banking

Dutch-Bangla Bank believes in its uncompromising Location of VIP Lounges OPENING DATE commitment to fulfill its customer needs and satisfaction and to become their first choice in banking. Gulshan Branch, Dhaka 14th March, 2017 In order to serve better and to ensure segment wise Gulshan Circle 1 Branch, 30th December, 2017 customer services, the bank has taken initiatives to Dhaka introduce “VIP Banking” for the existing and new high th net worth customers, recognizing their contribution to Uttara Branch, Dhaka 25 September, 2018 the bank. Satmasjid Road Branch, 7th April, 2019 Dhaka VIP Portfolio Banani Branch, Dhaka 14th May, 2019 In 2020, VIP banking department experienced a significant business growth. The bank commenced Local Office, Dhaka 28th July, 2019 VIP banking operation in 2017 and ended the year with a portfolio of BDT 8,724.42 million and 1,595 VIP Sylhet Branch, Sylhet 4th August, 2019 customers. Year to year performance of VIP banking is as B .B Road Branch, 6th August, 2019 under: Narayangonj

Dhanmondi Branch, Dhaka 9th September, 2020 Year 2017 2018 2019 2020 Growth Over Estimated Opening Ring Road Branch, Dhaka 2019 Date March 2021

No. of 1,595 2,824 4,742 7,112 49.98% Apart from the VIP Lounges, VIP customers are also Customers served from the Branch Managers chambers in locations without lounges. VIP Banking Deposit 8,724.42 14,353.59 21,608.08 28,942.92 33.94% (BDT Mil) VIP Banking Facilities: Dutch-Bangla Bank VIP Banking offers a thoughtful bouquet of exclusive services, benefits and banking The bank witnessed a growth of 49.98% in the number solutions to the Bank’s prime customers. VIP customers of VIP customer and the VIP banking deposit grew by are entitled to special facilities and privileged services 33.94%. This is a reflection of customer satisfaction with through dedicated Relationship Managers and Branch VIP banking service of DBBL. Managers. Among the mentionable facilities VIP customers can enjoy ‘Airport Meet & Greet’ services VIP Lounges along with access to VIP lounge at Hazrat Shahjalal At present the bank serves its VIP banking customers International Airport at Dhaka. through 9 (nine) exclusive VIP Lounges located in some Additionally VIP customer can avail special Buy 1 Get of the prime locations of the country with one more to 1 offers in the top restaurants like Westin, Radisson be opened soon in Ring Road Branch and a VIP Zone in Water Garden, Radisson Blue, Hotel Intercontinental, Le Agrabad Branch in Chattogram. Meridien, Pan Pacific Sonargaon etc. Opening of VIP Lounge

Discussion with VIP customer on the occasion of opening of the Dhanmondi VIP lounge, Dhaka

ANNUAL REPORT 2020 219 e-Business e-Business Division (e-BD) looks after various types of electronic businesses such Credit Cards, NexusPay 2,462.75 2,350.34 digital wallet and PoS, NexusPay, e-Commerce merchant acquiring. After the emergence of COVID-19 pandemic, regular momentum of almost all types businesses were 1,759.75 disrupted. Gradually all businesses started to get back to regular flow once the country wide lockdown period was 1,369.02 over. Moreover, use of NexusPay and e-Commerce increased 1,117.51 significantly due to their contactless nature. Presently, e-business portfolio has 88,728 Credit Cards,4480 Taka in Million e-Commerce merchants, 12,297 pos, 17913 NexusPay QR and 28650 Rocket merchants across the country.

Credit Card Since inception, DBBL issued total 1,55,424 EMV secure Visa/MasterCard Credit Cards to customers. DBBL issued 2016 2017 2018 2019 2020 13,244 new Credit Cards till 31st December, 2020. New CREDIT CARD OUTSTANDING Credit Card outstanding grew by 5% in 2020. Credit Card Loyalty Program After country wide lockdown period from October, 2020, DBBL launched year round Buy 1 Get 1 Free Breakfast/Lunch/ Dinner offer at finest 5 star hotels of the country for DBBL Titanium, Platinum Credit Card and VIP Banking Card holders.

More over there is a point-based loyalty program for Cardholders where they earn loyalty points against their card’s spending and redeem points as Cashback and card’s annual fee is waived for an usage of Tk. 50,000 only in a year.

ANNUAL REPORT 2020 221 0% InstaPay DBBL has 572 0% InstaPay partners to cater the huge demand for interest free and installment-based payment facilities. Credit cardholders can buy their favorite products from 0% InstaPay partner outlets located around the country and pay back in easy and convenient 3, 6, 9, 12, 18, 24 & 36 months equal installments at 0% interest. ANNUAL REPORT 2020 223 Strategic Alliance

Dutch-Bangla Bank Signs MoU with The Westin Dhaka

Dutch-Bangla Bank and The Westin Dhaka exchange documents after signing an MoU. Under this agreement DBBL Nexus MasterCard Titanium Credit Card, Nexus Visa Platinum Credit Card Holders and VIP Banking Debit Card holders will enjoy exclusive year round BUY 1 GET 1 FREE Buffet Breakfast, Lunch and Dinner offer. Tawfique Aziz-Head of Product & Business Development, Reazul Karim - Head of e-Payments from DBBL and Saadman Salahuddin, Cluster Asst. Director of Marketing Communications of The Westin Dhaka & Sheraton Dhaka were present in the ceremony.

Yearlong Buy1 Get1 Free Agreement Signing with the Westin, Dhaka

Dutch-Bangla Bank Signs MoU with Pan Pacific Sonargaon Dhaka

Dutch-Bangla Bank and Pan Pacific Sonargaon Dhaka exchange documents after signing an MoU. Under this agreement DBBL Nexus MasterCard Titanium Credit Card, Nexus Visa Platinum Credit Card Holders and VIP Banking Debit Card holders will enjoy exclusive year round BUY 1 GET 1 FREE Buffet Breakfast, Lunch and Dinner offer. Tawfique Aziz-Head of Product & Business Development from DBBL, Kazi Moazzem Hossain-Assistant Director, F&B, Fariaz Morshed Chowdhury-Asst. Director of Sales & Marketing of Pan Pacific Sonargaon Dhaka and other Senior Officials from both organizations exchange were present in the ceremony.

Yearlong Buy1 Get1 Free Agreement Signing with Pan Pacific Sonargaon, Dhaka NexusPay In the post COVID era of technology advancement, smart phone based digital solutions have come to the point of financial eco system. DBBL’s complete banking application - “NexusPay”, has also gained much popularity among prospective users. Since its introduction, more than 3.63 million customers have downloaded NexusPay to their smart phones. and DBBL has partnered with 17,913 merchants across the country to facilitate NexusPay QR based payments. In 2020, NexusPay QR based transaction and Bill payment volume increased by 31.34% and 330.56% respectively compared to 2019. Total transaction volume through NexusPay increased by 129.94% in 2020. NexusPay 20% Cashback Campaign To create widespread acceptance and to increase usage of NexusPay among the customers and merchants, 20% cash back campaign was launched against purchase through NexusPay in renowned Restaurants & Fast Food, Superstores and Footwear brands. This campaign started from March 1, 2020 and ended on May 15, 2020 due to COVID lock-down.

Merchant Acquiring e-Commerce Payment Gateway POS Merchant: Being the first online payment gateway introducer DBBL Currently DBBL has 12,297 POS terminals deployed at now has 4480, e-commerce merchants onboard who 5,887 merchant points across the country where DBBL made more than 4.5 million transactions in 2020 making Nexus, VISA, MasterCard and UnionPay cardholders 35% growth over 2019. During the pandemic period can make payments through these EMV compatible DBBL’s e-Commerce platform namely Nexus Payment machines. This is one of the largest and wide spread Gateway became a popular choice for online retail POS network of the country and this network is growing purchase. In 2020 Dutch-Bangla Bank made e-Commerce consistently over time. agreements with many prominent organizations such as West Zone Power Distribution Company Ltd (WZPDCL), Karnaphuli Gas Distribution Company Limited, Ideal 22,503 School and College, Pathao Limited , Vasha Shaheed Abdul Jabber Ansar VDP School & College, Scholars School and College, DPS STS School, International School Dhaka, CANTONMENT ENGLISH SCHOOL CHITTAGONG, Dinajpur 20,870 Govt College, Bangladesh Home Economics College, Dhaka, Phulbari Govt. College, Cambrian Education Group 20,008 18,428 (BSB Foundation), Governing Body of Cadet Colleges, Taka in Million Delta Life Insurance Company Limited, etc. for online 17,227 fee collection. With the vision to enable the society with a hassle-free payment service, DBBL is aiming to reach 2016 2017 2018 2019 2020 out more and more public and private organizations to POS TRANSACTION VOLUME significantly improve people’s life.

ANNUAL REPORT 2020 225 6,591

4,346

2,172 3,319 Taka in Million 1,274

2016 2017 2018 2019 2020

e-COMMERCE TRANSACTION VOLUME Rocket Merchant As a part of DBBL’s financial inclusion initiative, we have emphasized on massive expansion of Rocket Merchant Base. In end of 2020, the number of rocket merchants were 28,650.

28,650

22,932

16,285

10,208 7,440

2016 2017 2018 2019 2020

ANNUAL REPORT 2020 227

SME finance

ANNUAL REPORT 2018 229 Inauguration of the first VIP Lounge of DBBL at Gulshan Branch on 14th March 2017 by the Honorable Chairman of the Board of Directors in presence of senior management of the bank

Presenting the first VIP Welcome Kit to Honorable Chairman of Board of Directors by Managing Director & CEO

Lobby area of the Gulshan VIP Lounge

Common Space of Gulshan VIP Lounge

Inauguration of the second VIP Lounge of DBBL at Gulshan Circle-1 Branch on 30th December 2017 by the Honorable Managing Director and CEO of the bank

Lobby area of the Gulshan Circle-1 VIP Lounge

Common Space of Gulshan VIP Lounge

Inner Space of Gulshan Circle-1 VIP Lounge

Inauguration of the third VIP Lounge of DBBL at Uttara Branch on 25thSeptember 2018 by the Honorable Managing Director and CEO of the bank Dutch-Bangla Bank Ltd (DBBL) is one of the SME Bank prone banks in the country. with an objective to contribute to the economic development of this country, DBBL is offering finances to the Cottage, Micro, Small & Medium (CSMEs) industries with diversified ranges of product lines. Under this milieu, DBBL has given special emphasis on SME Business and has the foresight to increase SME Portfolio significantly within the shortest possible time. Accordingly, the majority of the outlets has been given special emphasis on SME Business. Since the inception this division, DBBL is constantly working for the betterment of the CMSME sector and has equipped with an experienced and efficient pool of human resources who has easy access to its client through its widespread outlets all over the country. The division has attires of sub wings, including Business wing, followed by Collection & Monitoring, Product & Business Development, and Women Entrepreneur Cell.

Honorable Minister of Industries Mr. Nurul Majid Mahmud Humayun visited DBBL stall in the Banker- SME Women Entrepreneur Conference and Product Display Fair-2020.

ANNUAL REPORT 2020 231 

           

    

Structure of SME Division

The Business Wing consist of National and Branch Sales, portfolio has reached to Tk.35,429 Million. Compared to equipped with a dynamic range of SME expert all over the December 2019, the portfolio has shown a steady growth country where DBBL has its presence. of Tk.684 Million. As this was a year of global pandemic, DBBL took a stand to expand business to help to rebuild A dedicated collection and monitoring wing has been the economy and also maintain a healthy portfolio. established to ensure timely repayments. They work for collection of overdue loans from delinquent accounts. The wing engages dedicated executives to ensure collection 34,745 35,429 from the field level as well as through tele-collection. 28,474 The objects of Product & Business Development work as 26,268 the eyes and ears of division. In other words, they work 22,719 23,720 as a business intelligence, who engages themselves to monitor the market, studies the needs of the existing potential clients, maintains robust MIS and Reporting, Taka in Million Training and development and also work as Sales Governance. In other words, it works as the spokesperson of the division. 2015 2016 2017 2018 2019 2020 A dedicated Women Entrepreneur Cell is established to YEARLY OUTSTANDING cater to the needs of women entrepreneurs. At present it has a network of “Women Entrepreneur Dedicated Desk” has been established in each business outlets to expand Women Entreprenures Loan finances to this segment SME Division specially designed two products for Business Highlights Women Entrepreneurs (WE) to meet up working capital requirement, expansion of existing business, procurement The growth story of SME Division is well represented of machinery / other fixed assets or any valid business by the increasing trend of active SME client base, as requirement of CMSMEs set up by WEs. portraited in the graph, at the end of December 2020, the Distribution of COVID 19 Packages mind the current pandemic situation, special emphasis has been given in organizing events like this in online platforms DBBL SME Division has always been proactive to such as ZOOM. Few snapshots of the said events are contribute to the development of this country. As we presented below: are going through the global pandemic, to rebuild the economy, DBBL SME Division has successfully disbursed in total of TK.2,354 Mil under the COVID 19 Packages. Training and Development Program

Objective of training and workshop is to provide participants with a holistic understanding of the methodologies aimed at assessing the strengths and weaknesses of the potential borrower’s business, which may impact the borrower’s ability and willingness to pay back the loan in a timely manner. Further, based on the analysis performed, the attendees will be able to substantiate an opinion to which extent the loan should be granted based on the analyzed pros and cons.

Considering the above in mind, SME Division continuously arranges training and workshop program on regular basis. However, considering the current pandemic situation, DBBL SME Division has organized several training and workshop virtually.

Participants are usually selected based on their training needs & potentiality in SME Business. Few snapshots of the session are presented below:

Business Review Meeting Banker- SME Women Entrepreneur Conference

Dutch-Bangla Bank participated in the “Banker- SME Women Entrepreneur Conference and Product Display Fair-2020” held at Bangladesh Institute of Bank Management (BIBM), Dhaka during March 05-08, 2020. Honorable Minister of Industries Mr. Nurul Majid Mahmud Humayun inaugurated the Fair as The Chief Guest while A Business Review Meeting with SME RMs by using the Zoom Mr. Fazle Kabir, Governor, Bangladesh Bank was present as Platform Special Guest.

An SME Entrepreneur namely “Chandra Bindu" financed Business Review Meeting by Dutch-Bangla Bank participated in the fair on behalf of DBBL SME. Several Business Review Meetings are organized around the year to monitor the individual performance of Relationship Prantik Loan Managers (RMs) of SME Business. Various issues including market opportunity, competitive advantages and challenges During the year 2020 the Division disburse 346 units of from the competitors, strategy to overcome the challenges “Prantik” Loan amounting Tk.17.22 Mil. Under supervision have been discussed for the improvement of the SME of SME Division different Branches have offered this Business & the overall performance of the Division. Keeping facility to the root level landless population of the country.

ANNUAL REPORT 2020 233 Product Features: To cater the requirement of CMSME Borrowers, DBBL is equipped with several diversified products. Key Features of DBBL SME Products are presented below:

• For expansion of existing business, procurement of • To meet up seasonal working capital requirement machinery, other fixed assets, seasonal requirement etc. • Financing up to Tk.20.00 Million • A Term Loan Financing available up to Tk.750.00 • Bullet payment facility Million. • Easy documentation & faster processing • Easy documentation and faster processing • No hidden charges

• One of the exclusive packages that fulfills the need • A Cash Credit facility to complete the requirement of of Women Entrepreneurs Working Capital • Easy Term Loan Financing up to Tk.5.00 Million • Financing available up to Tk.750.00 Million. • Easy documentation and faster processing • Offered to various business entities under CMSME • Lucrative interest rate with no hidden charges • Easy documentation and faster processing

• Term Loan for property development • Financing Up to Tk.12.00 Million • One of the exclusive packages that fulfills the need • Fulfilling the requirement of the landlord segment of Women Entrepreneurs. • • Maximum tenor up to 10 years A Cash Credit Financing up to Tk.5.00 Million • • Lowest rate offering in the market Easy documentation & faster processing • • No hidden charges Lucrative interest rate with no hidden charges • Available for CMSMEs location outside Dhaka and • Exclusively designed for Distributor Financing Chittagong Metropolitan area • Working Capital Financing • For expansion of existing business, procurement of machinery, other fixed assets, seasonal requirement • Financing up to Tk.20.00 Million and any valid business requirement • Interest rate quarterly rest • A Term Loan Financing available up to Tk.30.00 • No Processing fees or hidden charges. Million • Easy documentation & faster processing • Lucrative interest rate with no hidden charges

• Available for CMSMEs location outside Dhaka and • A specialized lending facility for marginal landless Chittagong Metropolitan area people • A Cash Credit facility to complete the requirement of • Simple processing with minimum requirements Working Capital • Minimum documentation • Financing available up to Tk.30.00 Million • Maximum facility up to Tk.50,000/- • Easy documentation and faster processing • Lucrative interest rate with no hidden charges

ANNUAL REPORT 2020 235 agricultural credit

SUSTAINABLE AGRICULTURE SUPPORT FOR OUTREACHING THE NEEDS OF PRIMARY PRODUCERS

Agricultural financing through MFI linkage for Fruit Cultivation

Prudential Policy of Bangladesh Bank share croppers with the directives of Bangladesh Bank agriculture and rural credit policy. Agricultural credit has significant importance for the socio-economic development. It has a pivotal role in The Government has undertaken changes in rural credit economic growth of the country. If the nation’s agriculture distribution for the Banks in the current FY (2020-2021) in and rural base economy walk through a techno-based eco- order to keep pace with annual budget and rural economy friendly process, all the targeted goals will be achieved supporting agri-policy directives. Bangladesh Bank has set in a sustainable way. With this vision, Bangladesh Bank an amount of Tk262,920.00 million target for all banks for announces a farmer-friendly agriculture and rural credit the fiscal year 2020-2021. For agricultural and rural credit, policy for each fiscal year. which is 8.99% higher than that of the previous year (Tk241,240.00 million). Bangladesh Bank’s Agriculture & Rural Credit Policy and Program emphasize to ensure food security, employment Partnership/Linkage with Micro Finance generation and alleviating rural poverty through escalating Institutions (MFIs) the scope of agricultural credit, financial inclusion, To achieve the desired goal, the Central bank has been resulting increased fund flow in rural areas. Under this allowing the banks, having not enough branches in rural policy, adequate credit has to be ensured two other main areas, to use MFIs linkage for disbursement of agricultural sub-sectors namely Fishery and Livestock alongside credit. the crop loan including income generating and poverty alleviation activities in rural areas. DBBL has been increasingly extending agricultural credit line to reputed MFIs for onward disbursement to ultimate A plurality of Bangladeshi earns their living from beneficiaries over last one decade. DBBL has also been agriculture. Bank’s agricultural credit is to be distributed providing agricultural credit directly to the primary among the marginal farmers including small, landless and producers in rural areas through its own branch network.

ANNUAL REPORT 2020 239 Agricultural financing and recovery thereof requires a Target and Achievements nationwide frame works having skilled manpower. As Agricultural and Rural Credit Performance of Dutch-Bangla such, DBBL established a very good relationship with Bank Limited against target for last 05(five) years is internationally reputed MFIs like BRAC, BURO Bangladesh, appended below: United Development Initiatives for Programmed Actions (Taka in Million) (UDDIPAN), Thengamara Mohila Sabuj Sangha (TMSS), RDRS Bangladesh, Padakhep Manabik Unnayan Kendra, FY Target Achievement Achievement AID Foundation, Aungkur Palli Unnayan Kendra, DAM in percent (%) Foundation for Economic Development (DFED), Resource 2015-2016 2,300.00 2,331.10 101.35% Development Foundation (RDF) and Peoples Oriented Programme Implementation (POPI). Side by side, there 2016-2017 2,650.00 4,566.80 172.33% have been a number of MFIs working regionally efficiently, 2017-2018 3,230.00 4,121.90 127.61% who have also been made linkage partner of DBBL during last couple of years. Agricultural financing using MFI 2018-2019 3,760.00 3,973.31 105.67% linkage could reach hard core poorer section of primary 2019-2020 4,260.00 4,196.29 98.50% producers. A brief view of sector wise disbursement of Agricultural Credit of the Bank for last 02 (two) years is appended below: (Taka in Million) Sectors Disbursement in 2019 Disbursement in 2020 1. Short Term Loan: a. Crops 2,340.18 2,956.94 b. Pisciculture (i) Fishery (Shrimp) 122.55 166.18 (ii) Others 340.33 66.62 c. Crop Storage d. Livestock (i) Development 156.82 108.93 (ii) Ox/ Buffalo for ploughing 138.52 188.29 (iii) Poultry Firm 1,413.21 1,844.14 e. Poverty Alleviation 200.00 -- f. Others - - Subtotal: 4,711.61 5331.10

2. Term Loan: a. Irrigation Tools 127.61 188.21 b. Pisciculture - - (i) Fishery (Shrimp) - - (ii) Others - 3.00 c. Agricultural Tools - - d. Livestock - - (i) Development - - (ii) Ox/ Buffalo for ploughing - 1.50 (iii) Poultry Firm - - e. Poverty Alleviation 293.78 833.89 f. Others 193.94 161.29 Subtotal: 615.33 1,187.89 Grand total: 5,326.94 6,518.99 Sector wise disbursement of Agricultural Credit

Crops Fisheries 8

2,956.94 Crop Storage .1 14 2,340 Livestock Development 1,84 4. 413.21 Taka in Million Ox/Bu alo for 1, Ploughing 78 833.89 Poultry Farm 3 79 493. 462.88 .29 61 9.

7. Poverty Alleviation 232.80 188.21 18 193.94 156.82 164 138.52 12 108.9 0 0 Agricultural Tools 2020 2019 Others

Agricultural Credit disbursement for the year 2019 & 2020

Strategies to Achieve the Target for the FY l Strengthened capacity building to financing rural 2020-2021 credit so that the target as fixed by Bangladesh Bank could be achieved. Dutch-Bangla Bank extends Agriculture/ Rural Credit l Instructed branches located at districts head as one of the major tools to bring the rural & unbanked quarter/representing the district to attend at the people specially the farmers in to the banking channel as meeting of District Agricultural Credit Committee financial inclusion program which plays a vital role in the as and when required. rural economic development of the country. l Identified some branches in different divisions of In order to achieve the target for the FY 2020- 2021, DBBL the country as important agricultural hub and set has adopted following measures: target against the total target for the fiscal year

l For disbursement of agricultural and rural credit, 2020- 2021. priority has been given in 04 (four) core sectors l Instructed the Managers of DBBL Branches (crops, fisheries, livestock and poultry) compared locating close to 111 extinct enclaves (obtained to other agricultural sectors. through exchange contract with India) in

l Financing through MFIs recognized by Microcredit different areas of the country to disburse Regulatory Authority (MRA) will be made on agricultural & rural credit according to Bangladesh partnership basis. Bank’s policy to those areas. l l Branches have been assigned to find out suitable Exploring the possibility of providing agricultural MFIs, who have expertise in Agri & Microfinance. credit through Agent Banking of DBBL. l l In light of Bangladesh Bank’s Agricultural & Branches have been instructed for disbursement Rural Credit Policy and Program, Branches have of agricultural credit for the cultivation of pulse, been given annual budget for procuring potential oilseed, spices and maize @4% p.a. concessional candidates, who are good primary producers in rate of interest to comply with Bangladesh Bank’s agriculture. Agricultural & Rural Credit Policy and Program.

ANNUAL REPORT 2020 241 SOME PICTURES OF AGRICULTURAL FINANCING FINANCED BY DBBL

Agricultural financing through MFI linkage for Vegetable Farming

Agricultural financing through MFI linkage for Vegetable Farming Agricultural financing through MFI linkage for Vegetable Farming

Agricultural financing through MFI linkage for Vegetable Farming

ANNUAL REPORT 2020 243 Agricultural financing through MFI linkage for Fruit Cultivation

Agricultural financing through MFI linkage for Fruit Cultivation Agricultural financing through MFI linkage for Fruit Cultivation

Agricultural financing through MFI linkage for Maize Cultivation

ANNUAL REPORT 2020 245 Agricultural financing through MFI linkage for Onion Cultivation

Agricultural financing through MFI linkage for Crop Cultivation Agricultural financing through MFI linkage for Betel Leaf Farming

Agricultural financing through MFI linkage for Chilly Cultivation

ANNUAL REPORT 2020 247 Agricultural financing through MFI linkage for Cattle Farming

Agricultural financing through MFI linkage for Poultry Farming green banking

GREEN BANKING CURRENT SCENARIO

A project having ETP (Effluent Treatment Plant) at Kashimpur, Gazipur financed by DBBL.

Green Banking refers to financial initiative, process, banking policy guidelines, donor-aided sector-specific product or service that is either designed to protect the transformational projects and concessional refinancing natural environment or to manage how the environment schemes. Banks have increased dependence on impacts finance and investment. Green Banking is sustainable energy sources and reduced the use of imperative as it promotes and supports the flow of paper for various banking activities by making the financial and related services towards the achievement services available through online platform. Over the of sustainable business models, investments, trade, years, financing for green projects and environmental economic, environmental and social projects and policies. risk management projects have also experienced enhancement. The importance of green banking practices has been receiving growing attention worldwide among a large Bangladesh Bank is firmly committed to ensuring number of stakeholders, including banks, financials sustainable economic development by carrying out policies institutes, policy makers, regulators, academic scholars and guidelines for reducing the impact of environmental and NGOs. degradation and implementing financial institutions. Through continuous monitoring and taking appropriate Dutch Bangla Bank Limited (DBBL) has been upholding actions, Bangladesh Bank is trying to expand green green banking activities covering multidimensional areas finance in the country. Thus, the central bank has been which include both in-house environment management integrating 'sustainability' into core banking practices and green financing to support green economy. through green banking, corporate social responsibility, financial inclusion and financial education. The society and Bangladesh Bank has been encouraging financing for environment oriented banking practices gradually created green projects through the establishment of green

ANNUAL REPORT 2020 251 the concept of sustainable banking. Sustainable banking process of full Centralization as per CRM Guidelines of mainly focuses on three broad categories - green banking, Bangladesh Bank. Out of its 208 branches, 31 branches are corporate social responsibility and financial inclusion. powered by Solar Energy.

Bangladesh Bank has introduced guidelines on The management of DBBL is well aware regarding the Environmental & Social Risk Management (ESRM) for Green Office Guidelines which includes among others, Banks and Financial Institutions in Bangladesh in 2017. economic use of office equipment (Computer, Laptop, The central bank has set examples of pioneering green Photocopier, AC, Light etc.) and efficient use of papers banking initiatives by guiding the banks and NBFIs and inks by encouraging paperless electronic Banking. for diverse sustainable banking initiatives. In such aspect, green banking initiatives of Bangladesh Bank Sustainable Finance Unit broadly categorised into the following aspects: policy Banking Regulation & Policy Department, Bangladesh initiatives, monitoring the green banking activities of Bank vide their Circular no. dated February 27, 2011 banks and NBFIs, refinancing facilities from BB in diverse outlined a detailed policy guidelines for implementing green products/sectors and BB's own initiatives for Green Banking through all scheduled banks. environmental management. The Board of Directors of DBBL on 07.02.2012 approved DBBL has been maintaining leading position in Green banking Policy and Strategy of Dutch-Bangla Bank Bangladesh to provide IT based banking services to its Ltd. Subsequently, the EC of the Board in its 751st meeting valued customers since its inception. DBBL provides held on 25.09.2014 approved “Revision of Green Banking online banking through its 208 Branches and a number Policy & Strategy of DBBL”. of Agents, ATM/Fast Track, Mobile Banking viz. ‘Rocket’, Earlier, DBBL’s green banking activities were running Internet Banking, SMS Banking, App based Banking, under “Green Banking Cell”, formed under the guidelines i.e., Nexus Pay, Debit Card, Credit Card, Virtual card, of Bangladesh Bank. Later on, at the time of formation of E-payment and so on. Besides, DBBL has completed its Sustainable Finance Unit, the cell was abolished.

A project having Solar Panel at Kashimpur, Gazipur financed by DBBL. A project having ETP (Effluent Treatment Plant) at Panchdona, Narsingdi financed by DBBL.

In terms of Policy Guidelines of Sustainable Finance i. Soft archival of customer documents for Department of Bangladesh Bank vide circular No. 02 electronic access and retrieval to reduce dated 01.12.2016, the Board of Director of DBBL in a consumption of paper. meeting held on 27.12.2016 has approved formation of ii. Some of internal memos, process notes and “Sustainable Finance Unit” under supervision of Head records are kept in electronic form. of Credit Risk Management Division and “Sustainable Finance Committee” with the membership of different iii. Communication with the customers are being divisional Heads of the Bank. The Board has also abolished done through e-mails, SMS or ATM display, Green Banking Cell of the Bank. Sustainable Finance Unit instead of letter of communication (except for and Sustainable Finance Committee of DBBL are working regulatory requirements). under the guidelines of Bangladesh Bank. iv. IP phone and video conferencing system have Sustainable Finance Unit of DBBL ensures conducting been introduced for telecommunication among Environmental and Social Risk Rating of the projects, it the Officials, Managers, Heads and Senior finances in order to ensure quality finance. The bank rated Management of the Bank. 320 clients in 2019 and 274 clients in 2020. v. Solar energy has been used to power 31 Branches In-house Green Management in the country. vi. Meeting and Training Programs through digital DBBL has been maintaining a balanced initiative and platform. supporting activities to contain things that may adversely affect environment and contribute to pollution since its Fund Allocation for Climate change Risks inception. The 3R thumb rule drives us towards Reuse, DBBL has contributed Tk201.76million in 2020 for disaster Reduce and Recycle (3R) in our daily activities in order to management, the break-up of which may be seen as arrest emissions from carbon footprint, a few of which are under: mentioned below:

ANNUAL REPORT 2020 253 Taka in million among the consumers/clients of the Bank in respect of i. Donation of 500 Mond sustainable development. DBBL is continuously making Rice & 100 Mond Dal to the necessary training programs on regular basis for capacity Office of the DNCC Mayor for building of its employees on these issues. This year we 1.26 distribution to the workless have trained 66 officials of the Bank on Environmental poor people due to the & Social Risk Management issues. DBBL officials also pandemic effect of COVID-19 participated in different trainings, workshops and Disaster ii. Donation to the Prime seminars on Sustainable/Green banking issue time to Minister's Relief Fund for management 100.00 time as per invitations of different institutions. helping flood affected people Structural Reform iii. Donation to the Prime Minister's Relief Fund for 100.00 DBBL has completed its centralization process of helping cold affected people Corporate, SME and Retail Credit operation including iv. Donation of Blankets 0.50 Trade Service business. In this regard, DBBL’s Trade Service operation, Credit Administration, Credit Marketing, Credit Total 201.76 Monitoring, Credit Risk Management, Credit Approval and Credit Disbursement process have gone under the Environmental and Social Management umbrella of Centralization. Business mobilization, proposal System (ESMS) in DBBL processing, review, approval as well as documentation and disbursement are being made in a centralized manner. We DBBL, with the support of FMO, has established are now keeping the client’s security documents in the an internationally standard Environmental & Social Central Vault. Every foreign trade related business, such Management System (ESMS) of its own by the technical as opening of LC, negotiation of export documents etc. assistance of a 3rd party consultant viz. F.I. Konsults.r.o. are being made through one platform. This centralization from Czech Republic. As part of the capacity development has reduced paper consumption and saved valuable time program, DBBL has its existing Green Banking policy in making decisions and approving credit proposals. alongwith internationally accepted exclusion list and Finance made in environmentally complied launched Environmental & Social (E&S) Categorization Industries Tool (Environmental & Social Risk Rating) in excel based software as per ERM guidelines of Bangladesh Bank DBBL has financed various projects which are environment and internationally best practices. DBBL also included friendly. DBBL has continued financing significant amount ‘procedure for managing environmental and social risks as Direct Green Finance, like installation of Effluent for commercial lending operations’ in their credit manual. Treatment Plant (ETP). The bank has further strengthened Environmental and Social due diligence is our key issue in its green banking initiatives by financing environment- approving credit proposals. friendly Hoffman Kiln and Zigzag based automated brick Contribution for Capacity Building for fields, which contribute towards a greener climate. So Awareness Development far, we have financed several projects like ETP, Solar, Automatic Brick Manufacturing industry such as Tunnel The Bank has contributed Tk8.38 million & Tk0.48 million Kiln, Zig-Zag etc. Some of the factories that we have in 2019 & 2020, respectively for creating awareness on financed maintain environmentally friendly procedures, different social causes, Tk.1.38 million & Tk1.35 million in such as handling waste in a safe manner in hospital, hot 2019 & 2020, respectively for environmental beautification water heat recovery system in Textile/RMG, converting and Tk457.76million & Tk263.89million in 2019 & 2020, non-compliance factory into environmentally complied respectively for marketing, training and capacity building factory as per observations of accord alliance and so on. of officials of the Bank as well as awareness development Financing 10 (Ten) Taka account holders remittance, government allowance disbursement, ATM money withdrawal through Rocket. It is in a true sense of The central bank has formed a revolving re-financing paperless banking. DBBL has currently 21.95 million Mobile fund of Tk2.0 billion for strengthening financial inclusion Banking Customers. programmes through providing loans to Tk10.00 account holders. The aim of the fund is to bring un-banked Agent Banking people in the banking network for facilitating their As a part of financial inclusion, Dutch-Bangla Bank has business activities. Marginal traders are benefited from started Agent Banking which is limited scale banking and the re-financing scheme. Under the scheme, the banks financial services to the underserved population through are allowed to disburse the collateral-free loan to the engagement of agents under a valid agency agreement, Tk10.00 account holders. One single borrower can borrow rather than a teller/ cashier. This is a 100% secured new maximum Tk50,000.00 under the scheme. DBBL has banking process where every transaction is completed by completed the Participation Agreement with Bangladesh verification of customers' Finger-Print through Biometric Bank in 2014 and made finance to different borrowers Machine. Agent Banking is helping the customers deposit through MFI linkage. Under the scheme of Bangladesh and withdraw funds and other admissible services at Bank, DBBL has extended loan to 346 individual clients for banking agents, i.e., retail outlets that turn Deposit to Tk17.22million in 2020. DBBL has currently 11,254 10 (Ten) electronic funds. Taka account holders. DBBL has 4,414 Agent Banking Outlet throughout the Online Banking facilities country. Dutch-Bangla Bank is the first bank in Bangladesh to Dutch-Bangla Bank NexsusPay introduce fully automated and introduce Electronic Banking. The further additions and features are NexusPay from Dutch-Bangla Bank is the first fully continuously being added and upgraded. A Dutch-Bangla cardless solution in Bangladesh. NexusPay works Bank Ltd. client has unique access to banking from with all bank cards including Nexus, Visa, MasterCard, any Dutch-Bangla Bank branch, ATM and POS. All of Dutch-Bangla Bank Agent Banking and Rocket Mobile these services are free-of-charge and are affordable for Banking. Numbers of Merchants accepting DBBL everyone. The services under Electronic Banking were NexsusPay stood at 17,913 at the year ended, 2020. undertaken with the same mindset as Dutch-Bangla Bank Numbers of DBBL NexsusPay users stood at 3,639,152 at Ltd undertakes its Corporate Social Responsibility tasks. the year ended 2020. Mobile Banking (ROCKET) E-Payment Gateway facilities

Dutch-Bangla Bank has pioneered Mobile Banking DBBL is the first bank in Bangladesh to introduce in Bangladesh. It was the first bank to offer banking e-payment gateway. This gives a person the liberty to facilities through a wide range of mobile phones. purchase online, pay utility bills etc. through online. Rocket is a Banking process without bank branch which Most importantly, the person does not need to be a provides financial services to unbanked communities DBBL account holder. Currently there are 4,480 e-Com efficiently at affordable cost. It is much more effective in Merchants or MSP (Merchant Service Provider) registered developing savings habit. DBBL is providing banking and with DBBL Nexus Payment Gateway and this is increasing financial services, such as cash-in, cash out, merchant day by day. Currently, we accept MasterCard, Visa and payment, utility payment, salary disbursement, foreign DBBL Nexus cards in our payment gateway.

ANNUAL REPORT 2020 255 Annual Disclosure for the year ended in December 2019 and 2020

Taka in Million

Sl. Item / Particulars 2019 2020 Remarks No.

Direct & Indirect Green Finance a. Funded 34,426.10 39,597.50 Including Direct Green 1. b. Non-Funded 22,320.91 30,032.90 Finance of 5,030.50 in c. Total 56,747.01 69,630.40 2020

Contribution to Disas- 2. Utilization of Climate Risk Fund 164.72 201.76 ter Management

Expense Related to Marketing, Training & 3. 457.76 263.89 -- Capacity Building

4. No. of Branches 195 208 --

5. Consumption --

Paper & Stationary 179.45 148.58 --

Water 8.88 8.82 --

Electricity Consumption 538.29 479.76 --

Fuel 54.89 46.73 --

No ATM/Fast Track 6. ATM & Fast Track powered by Solar Energy 39 -- is powered by Solar Energy at present

7. Branches Partially Powered by Solar Energy 31 31 --

Nos. of clients under Social & Environmental Risk 8. 320 274 -- Rating during the year social cause

Dutch-Bangla Bank has contributed an amount of TK. 10.00 crore only to Bangabandhu Memorial Trust for celebrating Mujib Borsho-the birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman.

ANNUAL REPORT 2020 259

Dutch-Bangla Bank has contributed an amount of TK. 10.00 crore only to Prime Minister’s Relief Fund for helping the winter affected people of the country.

ANNUAL REPORT 2020 261

Dutch-Bangla Bank has donated Tk.10.00 crore only to the Prime Minister’s Relief Fund for helping the flood affected poor people of the country.

SOCIAL CAUSE

Social Cause is something that is mutually beneficial, wider obligation to society and believes in the symbiotic both for the organization in the sense of goodwill and relationship between social cause and sustainable interaction with the people and the community as far as success. economic emancipation is concerned. Dutch-Bangla Bank DBBL is not only a financial institution acting as an engine shows great discernment in its services from the inception of growth for economic development in Bangladesh; but of the Bank in 1996. With the largest IT platform in the also a bellwether in societal progress. As an extension of banking industry, the Bank has crystallized the services this quintessential philosophy, the bank has established and innovations including its rock solid commitment to Dutch-Bangla Bank Foundation which has been rendering the society through Corporate Social Responsibility (CSR) invaluable services to various fields relentlessly covering activities. the areas of education, healthcare, natural calamities as well as man-made disaster. According to the World Business Council for Sustainable Development, “Corporate Social Responsibility is the Conducting business in an ethical way, creating opportunities for business & economic growth, continuing commitment by business to behave ethically empowering people to fulfill their aspirations, ensuring and contribute to economic development while improving protection of environment while financing businesses the quality of life of the workforce and their families as and supporting the distressed people of the society are well as of the local community and society at large”. at the heart of social cause policy of DBBL. DBBL since its In DBBL, CSR is modified to the term of Social Cause inception in 1996 had adopted the policy of contributing in order to make its services more pro-active towards to the social cause. It has been continuing its great effort social needs and national development through ethical, during the last 24 years as a pioneer in the banking sector legal and commercial conduct. DBBL has always aspired and has become the leader much ahead of the other to the highest standards of conduct, recognizes its banks due to its cinematic tour de force.

ANNUAL REPORT 2020 263

A partial view of the scholarship awarding program of Dutch-Bangla Bank held at Shaheed Suhrawardy Indoor Stadium, Mirpur, Dhaka.

ANNUAL REPORT 2020 265 Education 20%

ORS IN 2020 Health 12%

Social Development 1%

Disaster 29% Management

Environmental & Social 1% Awareness ONTRIBUTION OF DBBL IN DIFFERENT SECT C Miscellaneous 37%

DBBL dreams of a country free from hunger and a society developing medical infrastructures, communication free from vices. It is impossible without education. As infrastructures and many other social development such the bank puts thrust on education. Meritorious programs. Over the years, DBBL’s various social cause students, particularly in rural areas are deprived of obligations increased in leaps and bounds and the education every year because of financial constraint. But initiatives taken in 2020 are explained sector-wise in the they could contribute to the nation building if they could following pages: have some financial assistance. Keeping this view in mind, DBBL has been awarding scholarship to the meritorious 1. Contribution to Education Sector students in need of financial aid since its beginning. Considering the growing number of such students over Education is sine-qua-non for the overall development of the years the bank has increased the scholarship number the country. Keeping this view in mind, Dutch-Bangla Bank to an insurmountable level. has been giving top priority to promote the education sector. Awarding scholarship to meritorious students in need of In addition to scholarship, DBBL’s social cause initiatives financial aid, financial support for organizing the prestigious includes - building of educational infrastructure, Smile- Brighter program for the underprivileged cleft-lip & Ganit Olympiad, Physics Olympiad and Informatics Olympiad, cleft-palate children, cataract operation program for helping development of educational infrastructural facilities, the underprivileged visually impaired people, healthcare providing essential educational equipment etc. are some of support for helpless patients, financial support for the aspects included in the program. Contribution to Education Sector in 2020

7% 3% 90%

Ganit, Physics & Infrastructural Scholarship Informatics Olympiad Development 1.1. Scholarship Program Dutch-Bangla Bank, under its social cause program, has been awarding the scholarships to the meritorious students in need of financial aid studying at different levels of education since its beginning. New scholarships are being awarded every year along with renewal of existing awardees. The Bank has given scholarships to the deserving students from huge number of submitted applications following a set of criteria such as the applicant’s academic results, financial capability, physical conditions etc. Around 90% of the total scholarships have been given to the rural students and 50% to the female students. The scholarship awardees are provided with the following benefits:

Amount of One time grant annually (Taka) Total amount Duration of per year Level of Study scholarship per For reading scholarship For clothing month (Taka) materials (Taka) H.S.C. 2 years 2,500.00 2,500.00 1,000.00 33,500.00 Graduation 3-5 years 3,000.00 5,000.00 1,000.00 42,000.00

Realizing the fact that every year many meritorious beginning, Dutch-Bangla Bank has been providing financial students, mostly in rural areas, are compelled to support for organizing the Ganit Olympiad, a prestigious discontinue their study because of poverty, the bank event and continuing its support under the title of ‘Dutch- has increased the number of scholarship substantially. Bangla Bank-Prothom Alo Ganit Utsab’ for the last 17 Accordingly, 62,752 students of H.S.C. and Graduation level were awarded scholarship under this program. (seventeen) years. About 69,190 students from different schools and colleges The scholarships of DBBL are available for the entire of the country participated in the Ganit Utsab held in academic period for different levels of education like- 2020. The program was held through virtual platform with H.S.C. and Graduation level. the qualifiers of the preliminary round. i). H.S.C. level: After passing S.S.C. examination For participating in the Olympiad, the students are divided in the current year, the students who have been into the following 4 categories: studying at H.S.C. level are eligible to apply for scholarship. The scholarships are renewable for SL# Category Eligible Students the entire academic period of H.S.C. level. Already 1 Primary For the students of Class-III to Class-V 36,162 scholarships have been awarded in this level. 2 Junior For the students of Class-VI to Class-VIII ii). Graduation level: Every year DBBL awards new scholarships for the meritorious students in 3 Secondary For the students of Class-IX to Class-X need of financial aid of this level along with the continuation of existing awardees. The students, who have been studying at graduation level after 4 Higher For the students of Class-XI to Class-XII Secondary passing H.S.C. examination in the current year, are eligible to apply for scholarship of this level. Among the participants of the above mentioned The scholarships are renewable for the entire categories, more than 1,300 students qualified for the academic period of graduation level. Already national round of the program and participated in the 26,590 scholarships have been awarded in this th level. 18 Bangladesh Ganit Olympiad held through virtual platform. Then a ‘ganit camp’ was arranged with the 1.2. The Math Olympiad, Dutch-Bangla Bank - winners of the National Olympiad and finally a team of Prothom Alo Ganit Utsab: 06 (six) members were selected and they participated in Ganit Utsab (Math Olympiad) has been introduced by the the 61st International Mathematical Olympiad (IMO) held Bangladesh Mathematical Olympiad Committee with through virtual platform. This year the IMO was scheduled a view to removing the math-phobia as well as making to be held in Russia. But due to the Covid-19 pandemic, Mathematics attractive among the school and college the program was held virtually in September 2020. going students. This Olympiad has now become a flagship The students participated in the IMO from their home event for the students all over the country. Since its countries under the supervision of Russia.

ANNUAL REPORT 2020 267 It is mentionable that starting in 2004, Dutch-Bangla Mathematical Olympiad (IMO) and so on held in different Bank-Prothom Alo Ganit Utsab has been engaged in countries in each year. developing the mathematical efficiency of the students as well as facilitating the participation in the International DBBL has been providing financial support for organizing Mathematical Olympiad. This program has now become a this prestigious Ganit Utsab. From the year 2004 to signature event for the school and college going students 2020, a total amount of Tk.95,589,000/- (Taka ninety of the country. The program is jointly organized by five million five hundred eighty nine thousand) only Bangladesh Mathematical Olympiad Committee, Dutch- was provided to organize the events among which Bangla Bank Limited and Daily Prothom Alo at regional, Tk.4,500,000/- (Taka four million five hundred thousand) divisional and national level to flourish latent potential only was provided in 2020 for arranging this program. As of the future nation builders of the country. A team the program was held through virtual platform instead of consisting of 6 to 8 members is selected for participating physical attendance of the participants, the total cost is in the Asian Mathematical Olympiad, International reduced in this year.

The contribution of Dutch-Bangla Bank for organizing this Ganit Utsab, number of participants as well as achievements of Bangladeshi students in IMO is summarized below:

Regional Olympiad No. of International Math. Olympiad (IMO) Contribution participants Year of DBBL in National (Taka) No. of No. of Venue of Achievements of Bangladeshi Olympiad participants Olympiad IMO participants

2004 1,500,000/- 6 regions 9,000 360 Greece ….. 2005 3,000,000/- 10 regions 12,000 600 Mexico …… 2006 3,500,000/- 14 regions 15,000 840 Slovenia 2 Honorable Mention Awards 2007 4,000,000/- 14 regions 15,000 840 Vietnam 3 Honorable Mention Awards 2008 4,000,000/- 14 regions 15,000 840 Spain 1 Honorable Mention Award 2009 4,500,000/- 14 regions 15,000 900 Germany 2 Bronze medals & 3 Honorable Mention Awards

2010 4,700,000/- 13 regions 16,000 840 Kazakhstan 1 Bronze medal & 3 Honorable Mention Awards

2011 5,000,000/- 13 regions 18,000 840 Netherlands 1 Bronze medal & 1 Honorable Mention Award

1 Silver medal, 2 Bronze medals & 2 2012 6,500,000/- 17 regions 22,000 856 Argentina Honorable Mention Awards

2013 7,000,000/- 17 regions 22,000 838 Colombia 3 Bronze medals & 1 Honorable Mention Award

1 Silver medal, 1 Bronze medal & 4 2014 7,386,000/- 22 regions 25,000 1,055 South Africa Honorable Mention Awards 1 Silver medal, 4 Bronze medals & 1 2015 7,503,000/- 24 regions 30,000 1,281 Thailand Honorable Mention Award 1 Silver medal, 3 Bronze medals & 2 2016 7,500,000/- 24 regions 32,000 1,350 Hong Kong Honorable Mention Awards 2 Silver medals, 2 Bronze medals & 2 2017 8,000,000/- 15 regions 22,000 1,120 Brazil Honorable Mention Awards 1 Gold medal, 3 Bronze medals & 2 2018 8,500,000/- 35 regions 25,000 1,300 Romania Honorable Mention Awards 2019 8,500,000/- 67 regions 50,000 1,400 England 1 Bronze medal & 4 Honorable Mention Awards 17 regions Russia 2020 4,500,000/- (held through virtual 69,190 1,300 (held through virtual 1 Silver medal & 5 Bronze medals platform) platform) 1 Gold medal, 07 Silver medals, 28 Bronze Total 95,589,000/- medals and 31 Honorable Mention Awards Achievements of Bangladeshi students in IMO 8.50 8.50 8.00 Bangladeshi students have been participating regularly 7.50 in the International Mathematical Olympiad (IMO) since the year 2005. In continuation of this, the latest 61st International Mathematical Olympiad (IMO) was held through virtual platform in September 2020 where 06 Bangladeshi students participated in the program. Among 4.50 the 06 Bangladeshi students, 01 earned Silver medal and 05 earned Bronze medals. The Bangladeshi participants proved their mathematical prowess in the IMO by Taka in Million achieving a total of 01 Gold medal, 07 Silver medals, 28 2016 2017 2018 2019 2020 Bronze medals and 31 Honorable Mention Awards. CONTRIBUTION FOR ARRANGING GANIT UTSAB IN LAST 5 YEARS

Flag hoisting ceremony of the National Round of 10th Dutch-Bangla Bank- Bangladesh Physics Olympiad-2020, organized by Bangladesh Physics Olympiad Committee at Curzon Hall, University of Dhaka. Dr. Dipu Moni, MP, Honorable Minister for Education, Govt. of the People’s Republic of Bangladesh was present as chief guest, while Professor Dr. Muhammad Samad, Pro-Vice Chancellor (Admin.) of the University of Dhaka, Professor Dr. Muhammed Zafar Iqbal, Senior Vice Chairman, Bangladesh Physics Olympiad Committee, Professor Dr. Khorshed Ahmed Kabir, President, Bangladesh Physics Olympiad Committee and Mr. Sayem Ahmed, Chairman of Dutch-Bangla Bank were present as special guests. 1.3. Donation for organizing Bangladesh attracted to Physics and Science. The National round of Physics Olympiad the Olympiad was held successfully before the spread of Covid-19 pandemic in physical presence of the participants Physics is the mother of all sciences and the root of all on February 28 & 29, 2020 at Curzon Hall and Nabab concepts. Making Physics flourish will help science to Nawab Ali Chowdhury Senate Bhaban, University of develop beyond just textual studies. The Physics Olympiad Dhaka. Among the winners of the national round, finally a will arouse interest regarding science in the minds of team of 05 (five) members were selected for participation the new generation and draw them towards it, as well in the 51st International Physics Olympiad (IPhO). This year as encourage them to learn in-depth about this field of the IPhO was scheduled to be held in Lithuania. Due to the knowledge. Keeping this view in mind, Bangladesh Physics outbreak of covid-19 pandemic, the students participated Olympiad Committee has been arranging Bangladesh from their home countries in the international round of Physics Olympiad for the last 10 (ten) years successfully. the Physics Olympiad (IPhO) held through virtual platform Dutch-Bangla Bank has been providing financial support from 7th to 15th December 2020. The Bangladeshi students for last consecutive 08 (eight) years for organizing participated in the IPhO from Russian Centre for Science Bangladesh Physics Olympiad (BdPhO) along with & Culture in Dhaka under the supervision of Mr. Maxim participation in the International Physics Olympiad (IPhO). Dobrokhotov, Head of the centre and assigned supervisor The latest 10th Physics Olympiad was held in 2020 in 15 of IPhO-2020 for Bangladesh. regions where around 12,000 students participated in the Apart from this, the contribution of DBBL as well as program and out of them 750 students participated in the the achievement of the Bangladeshi participants in the national round. In testimony to the great success of this International Physics Olympiad (IPhO) has increased DBBL venture, a lot of students of Bangladesh have been remarkably which is summarized as under:

ANNUAL REPORT 2020 269 International Contribution of Number of No. of Regional Achievement of participants in the Year Physics Olympiad DBBL (Taka) participants Olympiad (IPhO) held in IPhO.

2013 01 Honorable 2,500,000/- 4,000 7 regions Denmark (3rd Physics Olympiad) Mention Award

2014 02 Honorable 2,500,000/- 6,000 10 regions Kazakhstan (4th Physics Olympiad) Mention Awards

2015 01 Bronze medal & 3,130,000/- 9,000 12 regions Mumbai, India (5th Physics Olympiad) 01 Honorable Mention Award

2016 Zurich, 01 Bronze medal & 3,500,000/- 10,000 12 regions (6th Physics Olympiad) Switzerland 02 Honorable Mention Awards

2017 Yogyakarta, 01 Silver medal, 03 Bronze medals 3,500,000/- 10,000 12 regions (7th Physics Olympiad) Indonesia and 01 Honorable Mention Award

2018 5,000,000/- 10,000 14 regions Lisbon, Portugal 04 Bronze medals (8th Physics Olympiad)

Bangladesh Team did not participate 2019 5,000,000/- 10,000 15 regions Israel as the IPhO venue was shifted from (9th Physics Olympiad) Jordan to Israel.

2020 Lithuania 02 Bronze medals & 01 Honorable th 3,500,000/- 12,000 15 regions (held through virtual (10 Physics Olympiad) platform) Mention Award

01 Silver medal, 11 Bronze medals Total 28,630,000/- & 08 Honorable Mention Awards

Honorable guests are seen at the National Round of Dutch-Bangla Bank- Bangladesh Physics Olympiad-2020. The Bangladeshi participants and the assigned supervisor for IMO-2020 are seen at the examination center of International Math Olympiad (IMO). This year the IMO has been held through virtual platform and the students participated in the event from their home countries under supervision of Russia, the host of 61st IMO.

5.00 5.00

3.50 3.50 3.50 Taka in Million

Closing ceremony and award distributions of the National Round of 10th Dutch-Bangla Bank-Bangladesh Physics Olympiad-2020, organized by 2016 2017 2018 2019 2020 Bangladesh Physics Olympiad Committee at Nabab Nawab Ali Chowdhury CONTRIBUTION FOR ARRANGING BANGLADESH PHYSICS OLYMPIAD FOR LAST 5 YEARS Senate Bhaban, Dhaka University.

1.4. Donation for organizing Bangladesh To cope with the goals of the IOI at the national level in Olympiad in Informatics (BdOI) our country, Bangladesh Informatics Olympiad Committee (BIOC) has been formed in 2004 with the prominent International Olympiad in Informatics (IOI) is an annual programming competition for pre-university level professors of the department of computer science of students. It was proposed by the UNESCO with a view to different universities. BIOC has been organizing the bringing together, challenge and give recognition to young Bangladesh Olympiad in Informatics (BdOI) since the students around the globe who are the most talented in year 2005 to develop the programming ability and informatics (computer science) and to foster friendship problem solving skills of the high school and college going among these students from diverse cultures. The first IOI was held in Bulgaria in 1989. students.

ANNUAL REPORT 2020 271 BdOI has been organized at the following 5 steps

The participants of BdOI are selected through a preliminary round of the contest that 1 Divisional round was run in parallel simultaneously at several venues at several divisional towns.

2 National round Top performers from the divisional round, participate in the national round.

Programming Top 15-20 performers of the national round are selected for a month long intensive 3 camp programming camp.

Based on the continuous performance assessment in the programming camp, results Selection of final of Asia-Pacific Informatics Olympiad (APIO) and several other parameters including 4 contestants for IOI learning curve, potential future availability etc. finally 4 students are selected for participating in the IOI.

As per rule of IOI, a team of 6 members (4 students, 1 team leader & 1 deputy leader) 5 Participation in IOI participate in the IOI. Every year students from different schools and colleges of the country participate in the Divisional round of the Informatics Olympiad and out of them around 100 top performing students are selected for National round and finally 04 (four) students are selected for participating in the IOI. Bangladesh has been participating in the IOI every year since 2005 and achieved a total of 2 Silver and 16 Bronze medals up to the year 2020. Performance of Bangladesh team in the IOI has been impressive and consistent for last five years which are summarized as under:

Achievement of Contribution No. of Division No. of Participants No. of Participants Venue Year Bangladesh team in of DBBL (Taka) Covered in Divisional Round from Bangladesh in IOI of IOI IOI 2016 … 5 500 4 Kazan, Russia 2 Bronze Medals

2017 … 5 500 4 Tehran, Iran 4 Bronze Medals

2018 … 5 500 4 Tsukuba, Japan 1 Silver & 1 Bronze Medal

2019 2,000,000/- 6 600 4 Baku, Azerbaijan 3 Bronze Medals Singapore 2020 2,000,000/- 7 700 4 (held through virtual 3 Bronze Medals platform) Total 4,000,000/- 2 Silver & 16 Bronze Medals

Honorable guests and winners of the National Round are seen in the program of Bangladesh Informatics Olympiad-2020 organized by Bangladesh Informatics Olympiad Committee at Daffodil International University, Ashulia, Dhaka. Dutch-Bangla Bank has been providing financial support in Informatics-2020 were held at seven divisional towns. for arranging the Informatics Olympiad since the Around 700 students participated in the divisional rounds. year 2019. In this continuation and as per request of Then National round was held on March 13 & 14, 2020 at Bangladesh Informatics Olympiad Committee (BIOC), Daffodil International University, Ashulia, Dhaka for cherry Dutch-Bangla Bank has provided financial support - picking the top 50 performers from the divisional rounds. Before participating in the International Olympiad, a of Tk.2,000,000/-(Taka two million) only in 2020 to month-long intensive training program was conducted at Bangladesh Informatics Olympiad Committee (BIOC) BUET, Dhaka for the above mentioned 4 students selected for organizing the Bangladesh Olympiad in Informatics for IOI. Finally a team of 06 (six) members participated in nd (BdOI)-2020 along with participation in the 32 the 32nd International Olympiad in Informatics (IOI) held on International Olympiad in Informatics (IOI). September 13 & 14, 2020 through virtual platform due to Accordingly, the divisional rounds of Bangladesh Olympiad covid-19 pandemic.

1.5. Educational Infrastructural development Dutch-Bangla Bank has been providing financial support for developing the infrastructure of educational institutions. In this year the following contribution has been made in this regard:

Amount contributed Name of institutions Purpose of financial support (Tk.) For establishing a Digital Lab at Mirkundi High School, Halima Omar Foundation 1,500,000/- Minarbari, Bandor, Narayanganj For developing and implementing the project ‘Graphite- Graphite e-learning’ Ôï×vPvi- fv‡jvUv Rvwb, fv‡jvUv KwiÕ to enhance the 1,000,000/- quality of education of the primary school going students For constructing and furnishing 3 classrooms including Fatepur Gazironnesa Junior baranda and stair of Fatepur Gazironnesa Junior Girl's High 1,000,000/- Girl's High School School, Mohespur, Jhenaidah 2. Contribution to Health Sector: 2.1. Contribution for preventing the spread of Covid-19: Health is one of the prime parameters to indicate the development of a nation. The need for healthcare is 2.1.1 Donation to "Prime Minister's Relief and Welfare increasing everyday due to rapid growth of population. Fund" for supplying Personal Protective Equipment (PPE) /Testing Kit/ Respiratory Equipment to the Dutch-Bangla Bank has identified health care as a priority doctors/ nurses. sector and helped to create better health care facilities at an affordable cost for the disadvantaged population. In Bangladesh Association of Banks (BAB) informed this connection, Dutch-Bangla Bank extended its support that Covid-19 virus had already infected worldly and for the following programs in 2020: continuously killed thousands of people daily. Covid-19 had also infected Bangladesh. To prevent the spread of Contribution to Health Sector in 2020 this pandemic, Government had declared public holiday, stop public transport, close office and market etc. In this 1% 1% regard, poor people specially day laborers had become 24% helpless and on the other side, treatment of increasing Covid-19 affected patient was hampered due to lack of Personal Protective Equipment (PPE) for health service 74% provider. As stated, BAB had come forward at first in any crisis of the nation as the Prime Association of the Banking sector of the country. In continuation of the past, BAB had decided to provide financial support to "Prime Minister's Donation for preventing the spread of COVID-19 Relief and Welfare Fund" for supplying Personal Protective Cataract and Cleft-lip/palate operation Infrastructural development Equipment (PPE)/ Testing Kit/ Respiratory Equipment to Individual donation for treatment purpose the doctors/nurses.

ANNUAL REPORT 2020 273 Considering the importance of the issue, Dutch-Bangla Subsequently, Managing Director of BEXIMCO Ltd. has Bank contributed Tk.50,000,000/- (Taka fifty million) requested 7 (seven) banks including Dutch-Bangla Bank only to "Prime Minister's Relief and Welfare Fund" for to provide Tk.10,000,000/- (Taka ten million) only each in supplying Personal Protective Equipment (PPE)/ Testing support of this noble initiative. Kit/ Respiratory Equipment to the doctors/ nurses. In Considering the noble cause and importance of the issue, this connection, a Payment Order was handed over to the Dutch-Bangla Bank contributed Tk.10,000,000/- (Taka Prime Minister‘s Office on March 31, 2020. ten million) only for providing 100,000 pieces of Personal 2.1.2 Donation for providing Personal Protective Protective Equipment (PPE) set to Bangladesh Police. Equipment (PPE) set to Bangladesh Police. The deadly COVID-19 global pandemic had affected 2.2. Smile Brighter program: Bangladesh. To prevent the spread of this highly ‘Smile Brighter’ program is an initiative taken by DBBL contagious COVID-19 virus, Bangladesh Government had to bring back smile on the face of the boys and girls with declared general holiday to enable the citizens to stay at cleft-lip and cleft-palate through plastic surgery at free home and to maintain the social distance since March 29, 2020. of cost. DBBL contributed Tk.71.52 million for cleft-lip and cleft-palate operation under ‘Smile Brighter’ program In this situation, people who were working in the frontline, including the police forces, were at high risk. since 2003. The police forces were in vulnerable condition due to their Boys and girls cursed with cleft-lip face numerous involvement in ensuring lockdown & social distancing, problems in everyday life such as disruption of formal creating public awareness, distributing relief, taking people education, hassle in attending social ceremonies and to hospital for treatment, helping burial activities of the people died by COVID-19 etc. As stated, already 218 police restraint while getting married. They live in our society personnel were infected with COVID-19 till April 26, 2020. with no destiny, shattered hope and gloomy future. In our country, poor cleft patients have very little access to the Considering this vulnerable situation of the police forces, Deputy Inspector General, Dhaka Range of Bangladesh plastic surgery. Most of the patients receive no treatment Police, requested to BEXIMCO Ltd. for providing 100,000 at all. pcs of PPE (Coveralls) and 100,000 pcs masks on urgent Considering the sufferings of the cleft lipped boys & basis to protect their members. BEXIMCO Ltd. had agreed girls, Dutch-Bangla Bank has taken an initiative to bring to produce and supply the mentioned PPE and masks to back smile on the face of the boys and girls with cleft- Bangladesh Police conforming to international standards. lip through plastic surgery at free of cost across the As stated, cost of each set of PPE (1 coverall and 1 mask) country under the banner “Smile Brighter” in 2003. This was Tk.700/- (Taka seven hundred) and total cost would is a continuous program aiming at performing as much stand at Tk.70,000,000/- (Taka seventy million) only. operation as possible per year.

Before operation After operation

Photograph of a cleft-lip baby (before and after operation) DBBL’s efforts towards the cleft-lip and cleft-palate 2.3. Cataract operation for underprivileged visually patients: impaired people In the year of 2020, several cleft-lip and cleft-palate Visual impairment is an immense social problem in operation camps were arranged in different parts our country. Cataract is the major cause of blindness of Bangladesh like- Satkhira, Sylhet, Sunamganj, and 80% of them can resume vision through cataract operation. A large number of rural poor people are Brahmanbaria, Munshiganj, Dhaka, Lalmonirhat, Gazipur, deprived of the opportunity to do away with the Narayangonj, Mymensingh, Rangpur, Sirajganj, Cox’s problem. Keeping their sufferings in mind, Dutch-Bangla Bazar, Naogaon, Barishal, Noakhali, Jashore, Sherpur, Bank has been continuing the cataract operation Thakurgaon and Chandpur districts. During 2003 to 2020 program for underprivileged visually impaired people by more than 6,877 poor cleft-lip boys & girls have been providing sophisticated cataract surgery (Intra Ocular successfully operated upon across the country under Lens) throughout the country since 2008. the Bank’s “Smile Brighter” program. Among which 144 Several camps were arranged under this program in operations were done in the year 2020. Dhaka, Mymensingh, Rangpur, Rajshahi, Thakurgaon, Lalmonirhat, Sylhet, Moulvibazar, Sunamgonj, Habiganj, Total number of cleft-lip and cleft-palate operation and Magura, Khulna, Chuadanga, Cox’s Bazar, Laxmipur, expenditure since 2003: Chandpur, Noakhali, Narsingdi, Barishal, Narayanganj Total no. of and Kushtia districts. About 31,605 cataract operations Period Total expenditure operation (Taka in million) have so far been completed successfully among which 5,200 operations were done in 2020. 2003-2020 6,877 71.52 Total number of cataract operation and expenditure since 2008: 317 323 307 Total no. of Period Total expenditure operation (Taka in million) 241 2008-2020 31,605 87.06

144 Statistics of cataract operation of last five years: Expenditure No. of operation Year No. of operation (Taka in million) 2016 1,900 4.56 2016 2017 2018 2019 2020 2017 1,900 4.56 CLEFT-LIP AND CLEFT-PALATE OPERATION OF LAST FIVE YEARS 2018 4,000 11.94 2019 10,500 31.50 2020 5,200 15.60

The parents along with their cleft-lip/palate boys and girls attended in the The post-operative visually impaired patients are seen in front of an eye Smile Brighter program of Dutch-Bangla Bank. hospital enlisted under the Drishti program of Dutch-Bangla Bank. Dutch-Bangla Bank has been continuing cleft-lip/palate operation under Dutch-Bangla Bank has been continuing cataract operation under the the program ‘Smile Brighter’ at free of cost for the underprivileged pa- program ‘Drishti’ at free of cost for the underprivileged visually impaired tients round the year at different locations of the country since 2003. patients round the year at different locations of the country since 2008.

ANNUAL REPORT 2020 275 3. Contribution in Disaster Management 3.3. Donation of blankets to 02 selected organizations through Bangladesh Bank for Dutch-Bangla Bank Limited stands by the distressed helping the cold affected poor people. people at the time when natural calamities occur. DBBL Dutch-Bangla Bank has been donating blankets to Prime provides support to the affected people in cash and Minister’s Relief Fund for helping the cold affected poor kind for their rehabilitation after the natural calamities people of the country every year as a part of its social like cyclone, flood, tornado, landslide, river erosion, cause activities. In addition, this year Dutch-Bangla Bank conflagration etc. The donation in kind includes blankets, has provided 1,500 pieces of blankets to the following 02 GCI sheets, food, medicine, water purifying tablets, etc. organizations through Bangladesh Bank for distributing Some of the contributions of DBBL in this sector in 2020 among the cold affected poor persons: are mentioned below: 3.1. Donation to “Prime Minister’s Relief Fund” SL# Name and address of the Quantity of for helping the cold affected poor people of the organizations Blankets (Pcs) country. Sondabari Darul Hadith The people of Bangladesh usually suffer in the chilling cold Rahmania and Hafezia 1 Madrasah, Sondabari, Gabtali, 500 sweeps through many districts of the country every year. Bogura. Poor people of the country become the worst sufferers in the chilling cold as they can’t buy warm clothes due to Rashad Khan Protebondi financial hardships. As in the past, this year also Dutch- Unniuan Songothon, 2 Savianagar Bazar, Austogram, 1,000 Bangla Bank has come forward to stand by the cold-hit Kishoreganj. people of the country. Total 1,500 Accordingly, Dutch-Bangla Bank has provided cash donation of Tk.100,000,000/- (Taka one hundred million) only to Accordingly, the blankets were procured at a cost of “Prime Minister’s Relief Fund” for helping the cold affected Tk.496,432/- only and handed over to the aforementioned poor people of the country same as the previous year. 02 organizations through the Bogura and Kishoreganj In this connection, a Payment Order amounting to Branch of Dutch-Bangla Bank on December 26, 2020. Tk.100,000,000/- (Taka one hundred million) only was issued in favor of “Prime Minister’s Relief Fund” and 3.4. Donation of 500 Maund Rice and 100 Maund subsequently handed over to Principal Secretary to the Lentil (Dal) for distributing among the workless Honorable Prime Minister on October 28, 2020 for helping poor people. the cold affected poor people of the country. The deadly COVID-19 global pandemic had affected 3.2. Donation to “Prime Minister’s Relief Fund” Bangladesh. To prevent the spread of this highly contagious for helping the flood affected poor people of the COVID-19 virus, Bangladesh Government had declared country. general holiday to enable the citizens to stay at home and to maintain the social distance since March 29, 2020. Bangladesh Association of Banks (BAB) decided to provide financial support to “Prime Minister’s Relief Fund” for Because of the spread out of the virus and its impact on helping the flood affected poor people. overall economy, many poor people like low paid daily worker became jobless. They were striving to fulfill their Considering the sufferings of the flood affected people, the competent authority of Dutch-Bangla bank provided basic needs. Considering their critical condition “Shobai donation of Tk.100,000,000/- (Taka one hundred million) Mele Shobar Dhaka” - a voluntary organization led by the only to “Prime Minister’s Relief Fund” for helping the Honorable Mayor of Dhaka North City Corporation, had flood affected poor people. taken an initiative to distribute food and essential relief Accordingly, a payment order amounting to items among the destitute people. But it was difficult Tk.100,000,000/- (Taka one hundred million) only was for them to fulfill the huge demand. Accordingly, they issued in favor of “Prime Minister’s Relief Fund” and requested Dutch-Bangla Bank to provide some emergency subsequently handed over to Principal Secretary to the food items (i.e. rice, dal etc.) for distributing among the Honorable Prime Minister on September 20, 2020. poor and destitute people. Considering their noble initiative and urgent need of the 6. Contribution for creating awareness on poor and helpless people, the competent authority of different social issues: Dutch-Bangla Bank provided 500 Maund (20,000 Kgs) Rice and 100 Maund (4,000 Kgs) Lentil (Dal) to “Shobai Dutch-Bangla Bank has been engaged in creating Mele Shobar Dhaka” on April 02, 2020 for distributing awareness through electronic and print media since among the workless poor people. long on different social issues like– Hope and love make us lovely, Willpower is enough to do a good job, Drug 4. Contribution to Social Development: addiction- a menace to destroy life, Good behavior with mentally retarded persons- a moral duty, Human for 4.1. Donation for the beautification project of the humanity, Uphold justice, Plant tree- save environment Mazaar gate of Hazart Shah Paran (R.), Sylhet. etc. The short dramas focusing on above social issues Hazrat Shah Paran (R.) Mazaar is situated at Khadim are telecast on several electronic media for creating Nagar in Dakshingarh Pargana, about 7 km away from awareness among the mass people. Sylhet town. Thousands of Muslim devotees across the Besides, as per instruction of Bangladesh Bank, Dutch- country along with the people of other regions visit the Bangla Bank published the advertisement named as Mazaar every day. There is a gae in the approach road of “Chhoray Chhoray Suddhachar” on quarterly basis in the the Mazaar of Hazrat Shah Paran (R.) which is required National Dailies to create awareness against the corruption to renovate since it was built many years ago. In this and to promote integrity as a part of implementation connection, the local authority approached Dutch-Bangla of National Integrity Strategies for the country. In this Bank to provide financial support to enhance the beauty connection, Dutch-Bangla Bank provided Tk.484,924/- only of the gate of Hazrat Shah Paran (R.) Mazaar. They had in 2020. Some of the initiatives of DBBL regarding creation estimated the cost amounting to Tk.40,000,000/- (Taka of awareness are enumerated here under: forty million) only to complete the beautification project of the Mazaar gate as per the design.

Considering the historical importance of Hazrat Shah Paran (R.) maazar, the competent authority of Dutch- `yb©xwZ‡Z _g‡K _v‡K Bangla Bank had agreed to provide financial support of Dbœq‡bi AMÖMwZ Tk.40,000,000/- (Taka forty million) only in phases for the Avi KviI bq, `yb©xwZ‡Z beautification project of the Mazaar gate of Hazart Shah †`‡ki ¶wZ `‡ki ¶wZ| Paran (R.). Accordingly, the 3rd phase of the committed - †iv‡gb ivqnvb donation amounting to Tk.10,000,000/- (Taka ten million) only has been disbursed in 2020. 5. Contribution to environmental beautification:

Dutch-Bangla Bank constructed a monument in the crossing of Hotel Intercontinental (previous Hotel ï×vPvi I wkóvPvi Ruposhi Bangla) and State Guest’s House Jamuna. DBBL mf¨ RvwZi AnsKvi| is also engaged in beautification of the road islands and Ki‡j mevB †Póv footpaths from Kakrail Crossing to Hotel Intercontinental GwM‡q hv‡e †`kUv| Crossing of Dhaka metro as a part of city beautification - dviæK bIqvR project. Tk.1,350,000/- (Taka one million three hundred fifty thousand) only was spent in the year 2020 for maintenance of the monument and fountain.

ANNUAL REPORT 2020 277 7. Donation on account of miscellaneous 7.3. Donation to Rapid Action Battalion (RAB) for purposes celebrating the birth centenary of Father of the Nation, Bangabandhu Sheikh Mujibur Rahman. 7.1. Donation to “Bangabandhu Memorial Trust” for celebrating Mujib Borsho- the birth centenary of Bangladesh Association of Banks (BAB) informed that Father of the Nation Bangabandhu Sheikh Mujibur Rapid Action Battalion (RAB) was going to celebrate the Rahman. birth centenary of Father of the Nation, Bangabandhu

Bangladesh Association of Banks had decided to Sheikh Mujibur Rahman in a befitting manner. They provide donation to “Bangabandhu Memorial Trust” for had planned to celebrate the program eye catching and celebrating Mujib Borsho- the birth centenary of Father of charming by using state-of-the-art technologies. To the Nation Bangabandhu Sheikh Mujibur Rahman. organize the said program, they had estimated the cost of Tk.30.00 crore only. In response to the decision of BAB, Dutch-Bangla Bank contributed Tk.100,000,000/- (Taka one hundred million) In this regard, RAB had requested BAB to provide only in favor of “Bangabandhu Memorial Trust” for donation through its member banks to celebrate the birth celebrating Mujib Borsho- the birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman. centenary of Father of the Nation. Subsequently, BAB requested Dutch-Bangla Bank to contribute for the stated In this connection, Mr. M Sahabuddin Ahmed, Honorable purpose. Founder of Dutch-Bangla Bank & Chairman of Dutch- Bangla Bank Foundation handed over a Payment Order of In response to the request, Dutch-Bangla Bank Tk.100,000,000/- (Taka one hundred million) only to the contributed Tk.59,895,833/- (Taka fifty nine million eight Honorable Prime Minister Sheikh Hasina on January 06, hundred ninety five thousand eight hundred thirty three) 2020 at her official Gonobhaban residence, Dhaka. only (including VAT & Tax) to Rapid Action Battalion for celebrating the birth centenary of Father of the Nation, 7.2. Donation to “The Prime Minister’s Relief and Bangabandhu Sheikh Mujibur Rahman. Welfare Fund” for constructing houses for the poor and helpless people of the country. 7.4. Financial assistance for construction of The Honorable Prime Minister of the Government Kamlapur Paschimpara Jamee Moshjed, Kamlapur, of the People’s Republic of Bangladesh has taken Sreepur, Magura. initiatives for constructing area based houses to ensure accommodation facilities for the poor and helpless people The Additional Police Commissioner (Traffic), Dhaka of the country. To make the initiative of the Honorable Metropolitan Police (DMP), Dhaka and Chairman of Prime Minister a grand success, Bangladesh Association Mosque Committee of Kamlapur Paschimpara Jamee of Banks requested Dutch-Bangla Bank to provide Moshjed, Kamlapur, Sreepur, Magura requested Tk.100,000,000/- (Taka one hundred million) only to “The Dutch-Bangla Bank to provide financial assistance for Prime Minister’s Relief and Welfare Fund” as donation. construction of the aforesaid mosque. In response to the request of BAB, Dutch-Bangla Bank contributed Tk.100,000,000/- (Taka one hundred million) In response to the request of Chairman of the said only to “The Prime Minister’s Relief and Welfare Fund” Mosque Committee, Dutch-Bangla Bank provided for constructing houses for the homeless poor people of financial assistance of Tk.500,000/- (Taka five hundred the country. thousand) only for construction of Kamlapur Paschimpara Accordingly, a Payment Order of the donation was handed Jamee Moshjed, Kamlapur, Sreepur, Magura. over to Prime Minister’s Office on March 05, 2020. A few of many memorable incidents and illustrations of the impact of DBBL scholarship program are described here for our valued clients and stakeholders. ¯^cœ c~i‡Yi c‡_ †hme wkÿv_ ©xiv....

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On way to fulfill the dreams of the learners Dutch-Bangla Bank Limited (DBBL), under its scholarship program, has been awarding scholarships to thousands of meritorious students in need of financial aid studying at different levels of education. Talking with the students, we came to know the sad episode of their families. The touchy stories may bring tears in every body’s eye. The students are struggling with poverty and conquered the suffering and came to this stage. To make their way easy, Dutch-Bangla Bank initiates the scholarship program. The program salvaged to survive the meritorious students who were being dropped out because of poverty. They are finding a new lease of hope. Some of their expressions are mentioned here: wkÿve„wËi A‡_©i mwVK e¨envi wbwð‡Zi gva¨‡g mvweKyb bvnvi Zvi evev hLb gviv hvb ZLb Zvi gv‡qi eqm gvÎ 26 eQi; †h eq‡m †g‡qiv wb‡R‡K cÖwZwôZ K‡i †`‡ki †mev I `wi`ª †gavex‡`i cv‡k Zv‡`i mvsmvwiK Rxeb ïiæ K‡i| wewai wbg©g cwinv‡m wZbRb mšÍvb wb‡q `uvov‡Z Pvq Zv‡K Aí eq‡mB weaevi Rxeb ïiæ Ki‡Z nq| Gi mv‡_ mv‡_ kyiæ nq Zvi mvweKyb bvnvi, eªvþYevwoqv †Rjvi evÃvivgcyi Dc‡Rjvq Zvi Rb¥| 2019 gv‡qi msMÖvgx, wbh©vwZZ I AZ¨vPvwiZ Rxeb| Zvi evev g„Zz¨i ci Zvi bvbv mv‡ji AbywôZ Gm. Gm. wm. cixÿvq wRwcG-5 †c‡q DËxY© n‡q eZ©gv‡b I PvPviv †P‡qwQ‡jb, Zvi gv‡K Avevi we‡q w`‡Z| Avi Zv‡`i GwZgLvbvq †m XvKvq nvg``© cvewjK K‡j‡R Øv`k †kÖwY‡Z Aa¨qbiZ| R‡b¥i ci w`‡q w`‡Z| wKš‘ Zvi gv Zv K‡ibwb| wZwb bvbv cªwZK‚jZvi gv‡SI Zvi nuvwU-nuvwU cv-cv K‡i eo n‡Z _vKv wkïiv evev-gv‡qi Kv‡Q bvbv evqbv- mšÍvb‡`i †Q‡o †h‡Z cv‡ibwb| wb‡Ri myL-kvwšÍ wemR©b w`‡q Zv‡`i AvM‡j Ave`v‡ii gva¨‡g Zv‡`i Rxeb ïiæ K‡i| Zvi †ÿ‡Î Rxe‡bi ïiæUv ivLvi wm×všÍ †bb wZwb| wKQz w`b bv †h‡ZB Av‡iKwU `ytmsev` Av‡m Zv‡`i A‡bKUv e¨wZµg wQj| KviY Zvi Rxe‡bi m~Pbv‡ZB †m nvwi‡qwQj Zvi cwiev‡i| Zv‡`i mevi †QvU †evbwU bq gvm eq‡m cvwb‡Z Wz‡e gviv hvq| evev‡K| †Kbbv cª_g †kÖwY‡Z covKvjxb mg‡q Zvi evev gviv hvb| Amy¯’ Zvi cwiev‡ii m`m¨iv ZLb cvMjcÖvq| cÖ`xcnxb N‡i KvUv‡Z n‡q‡Q A‡bK evevi †eu‡P _vKvi AvKzwZ, A_©vfv‡e Zvi evev‡K fvj-g›` bv LvIqv‡Z ivZ| g„Zy¨i b¨vq n‡q D‡VwQj Zv‡`i Rxeb| ay‡jvi ¯Í‚c n‡q c‡owQj covi cviv, wPwKrmvi Afv‡e Zvi evevi KiæY g„Zy¨- Gme K‡ói ¯§„wZ GLbI Zv‡K eB-LvZv †Uwej| ZLb Zv‡`i g‡b nZ ayjv-evwj‡Z ‡hb Zv‡`i RxebUvI Zvwo‡q †eovq| Pvcv c‡o †Mj| †mB msKUvcbœ mg‡q Zv‡`i cÖwZ mvnv‡h¨i nvZ evwo‡q cv‡k `uvwo‡qwQ‡jb Zvi GK gvgv| †mB gvgvi KvQ †_‡K Zviv cvq bZzbfv‡e euvPvi cÖqvm| Zvi gvgvi wbweo cwiPh©vq Zviv GKUy GKUz Av‡jv †`L‡Z †c‡Z ïiæ K‡i| Zv‡`i `yB fvB-‡evb‡K wZwb Avevi ¯‹z‡j hvIqvi e¨e¯’v K‡ib| Gig‡a¨ Zvi gvI `wR©i KvR I ev”Pv‡`i ‡KviAvb cwo‡q mvgvb¨ †ivRMvi Ki‡Z ïiæ K‡ib| Zvi H gvgvi nvZ a‡iB Zvi eo fvB cÖv_wgK mgvcbx I †R. Gm. wm. cixÿvq e„wËmn wRwcG-5 Ges Gm. Gm. wm. cixÿvqI e„wËmn †Mv‡ìb wRwcG-5 AR©b K‡i| Zvi GKgvÎ eo fvB WvP&-evsjv e¨vs‡Ki e„wËi mn‡hvwMZvq †`‡ki ¯^bvgab¨ we`¨vcxV †m›U †Rv‡md K‡jR †_‡K GBP. Gm. wm. ch©v‡q covïbv †kl K‡i| eZ©gv‡b Zvi fvB †bvqvLvjx weÁvb I cÖhyw³ wek^we`¨vj‡q covïbv Ki‡Q| mvweKyb bvnviI cÖv_wgK mgvcbx I †R. Gm. wm. cixÿvq e„wËmn wRwcG-5 Ges Gm. Gm. wm. cixÿvqI wRwcG-5 AR©b K‡i WvP&-evsjv e¨vs‡Ki e„wËi Rb¨ Av‡e`b K‡i| cieZ©x‡Z GB e„wËi Rb¨ g‡bvbxZI nq †m| eZ©gv‡b Zvi gv‡qi mvgvb¨ †ivRMvi, Zvi gvgvi I WvP&-evsjv e¨vs‡Ki e„wËi mn‡hvwMZvq ZviI GBP. Gm. wm. ch©v‡q covïbv Pj‡Q| WvP&-evsjv e¨vs‡Ki cÖwZ K…ZÁZv Rvbv‡Z wM‡q †m e‡j, ÒWvP&-evsjv e¨vs‡Ki cÖwZ K…ZÁZv Rvbv‡bvi fvlv Avgvi Rvbv †bB| A_©vfv‡e `vwi‡`ªi Kv‡Q nvi †g‡b †`‡ki nvRvi nvRvi †gavex wkÿv_©xi Rxe‡bi my›`i ¯^cœ¸‡jv A¼z‡iB mvweKyb bvnvi webó n‡q hvq| wKš‘ GB e¨vs‡Ki e„wËi mnvqZvq, Avgvi gZ nvRv‡iv nZ

ANNUAL REPORT 2020 279 `wi`ª wkÿv_©xiv wkÿvi Av‡jvq Av‡jvwKZ n‡q Zv‡`i Rxe‡bi my›`i ¯^cœ¸‡jv her elder brother passed PEC and JSC securing GPA-5 with c~i‡Y mÿg n‡”Q| WvP&-evsjv e¨vsK Zvi GB gnvb K‡g©i Rb¨ ‡eu‡P _vK‡e stipend and also passed in the SSC exam with golden nvRvi eQi| mgv‡R D”Pvmxb e¨w³eM© wbR wbR Ae¯’vb †_‡K GB e¨vs‡Ki GPA-5. Then her elder brother got DBBL scholarship gZ hw` nZ `wi`ª‡`i cv‡k `uvovq, Zvn‡j †`‡ki nvRvi nvRvi †gavex and completed higher secondary level from a reputed wkÿv_©xiv nq‡Zv Zv‡`i ¯^cœc~i‡Y mÿg n‡e| Avwg Avjøvni wbKU cÖv_©bv Kwi educational institution ‘Saint Joseph College’. Now, her elder - GB e¨vs‡Ki e„wËi Kvh©µg †hb hyM hyM a‡i Pvjy _v‡K Ges e¨vs‡Ki cÖ`Ë brother is studying in Noakhali Science and Technology e„wËi mwVK e¨en‡ii gva¨‡g wb‡R‡K cÖwZwôZ K‡i Avwg †hb †`‡ki †mev I University with the help of Dutch-Bangla Bank scholarship. `wi`ª †gavex‡`i cv‡k `vov‡Z cvwi|Ó Sabikun Nahar passed PEC and JSC securing GPA-5 with mvweKyb bvnvi stipend in both exams. She applied for Dutch-Bangla Bank Øv`k †kÖwY, weÁvb wefvM scholarship after passing SSC exam securing GPA-5. She nvg``© cvewjK K‡jR, XvKv was also nominated for this scholarship. Presently, she is continuing her study with the help of Dutch-Bangla Bank Sabikun Nahar wants to serve the country and scholarship. to stand beside the poor meritorious students Expressing her gratitude to Dutch-Bangla Bank, she said, after establishing herself through ensuring "I do not know the words of gratitude to Dutch-Bangla proper utilization of scholarship money Bank. The beautiful dreams of the lives of thousands of Sabikun Nahar was born under Banchharampur upazila meritorious students of our country are ruined prematurely of Brahamanbaria district. She passed with GPA-5 in SSC due to poverty. But with the help of the scholarship of exam held in 2019 and now she is studying in class twelve this bank, thousands of poor students like me would at Hamdard Public College in Dhaka. After birth, the be enlightened in the light of education and be able to children start to grow up on their own by making various fulfill the stunning dreams of their lives. Dutch-Bangla demands to their parents. But the beginning of life was Bank will live thousands of years for such great deed. If an exception for Sabikun Nahar. She lost her father early the elites in the society stand by the side of the poor like in life. Her father died while she was studying in class this bank from their own point of view, then thousands one. The yearning for survival of her father, the financial of meritorious students of the country may be able to inability to feed her father, her father's death due to lack fulfill their dreams. I pray to the almighly Allah that such of treatment - the memories of all these hardships still scholarship activities will continue for ages and through haunts her. the proper use of the scholarships awarded by the bank, I will be able to serve the country as well as to stand beside When Sabikun Nahar’s father died, her mother was only the poor meritorious students after establishing myself.” 26 years old- the age when girls normally start their conjugal life. But she had to start the life of a widow Sabikun Nahar with three children in the cruel irony of the fate. These Class-XII, Group-Science had to force for beginning of her mother's struggling, Hamdard Public College, Dhaka torturing and oppressing life. After the demise of her father, her maternal grandparent and uncles wanted to wkÿv mnvqK AwffveK wn‡m‡e WvP&-evsjv e¨vsK Av‡Q dRjyi cv‡k arrange re-marry of her mother and to give them to the weL¨vZ mvwnwZ¨K †gvZvnvi †nv‡mb †PŠayix iwPZ Ôwkÿv I gbyl¨Z¡Õ bvgK orphanage. But her mother did not do it. She could not leave her children in the midst of adversity. She decided cÖe‡Ü gvby‡li Rxeb‡K wZwb GKwU †`vZjv N‡ii mv‡_ Zzjbv K‡i‡Qb| to keep them by sacrificing her own happiness and peace. N‡ii wb‡Pi Zjv‡K wZwb RxemËv Avi Dc‡ii Zjv‡K gvbemËv Z_v But a few days later another awful blow hit their family. gbyl¨‡Z¡i m‡½ Zzjbv K‡i‡Qb| Rxe mËvi Ni †_‡K gbyl¨‡Z¡i N‡i DVvi Their youngest sister drowned at the age of nine months. Rb¨ wkÿv‡K wZwb wmuwo wn‡m‡e AvL¨vwqZ K‡i‡Qb| Avi †mB wkÿv‡K Almost all the members of her family seem to become weKwkZ Kivi j‡ÿ¨ WvP&-evsjv e¨vsK m~PbvjMœ †_‡K wkÿve„wË Kvh©µg mournful. They had to spend many nights in a house cwiPvjbv K‡i Avm‡Q| without a light. Their lives became like death. There was Avwg †gv. dRjyj nK, GKRb `„wó cÖwZeÜx wkÿv_©x| jvjgwbinvU †Rjvi a pile of dust on the books remained on the table. It was PiLvUvgvix bvgK GK cÖZ¨šÍ Pi GjvKvq Avgv‡`i evwo| w`bgRyi evev hLb felt as if their lives were buried in the dust. †h KvR ‡c‡Zb ZvB K‡i Avgv‡`i Qq m`‡m¨i cwieviUv‡K †Kv‡bviK‡g In that critical moment, one of her maternal uncles came Pvwj‡q wb‡Zb| GK w`‡K `wi`ªZv Avi Ab¨w`‡K Avwg `„wó cÖwZeÜx nIqvq forward to help them and they had got a new way of living. Avgvi wkÿvi cÖwZ cwiev‡ii †Zgb †Kv‡bv AvMÖnB wQj bv| ZeyI Avwg They began to see a diminutive hope in the intensive care cÖwZ‡ekx wkï‡`i m‡½ MÖv‡gi we`¨vj‡q †hZvg| wKš‘ `„wónxbZvi Kvi‡Y of her uncle. He arranged the two siblings to go to school. In the meantime, her mother also began to earn a little †mLv‡b †jLvcov Ki‡Z cvwiwb| money by working as a tailor and to teach the children the †ek K‡qKgvm c‡i GbwRI ms¯’vi GKRb Kg©KZ©vi mn‡hvwMZvq `„wó holy Qur'an at home. With that maternal uncle's hand, cÖwZeÜx‡`i covïbvi Rb¨ we‡klvwqZ ¯‹z‡j fwZ© nIqvi my‡hvM †c‡q hvB| wKš‘ Avgvi eqm Kg _vKvq ZLb wkÿvi gh©v`v eyS‡Z cvwiwb| ZvB evev-gv‡K †Q‡o `~‡i _vK‡ZI PvBwb| Avi Zviv wbiÿi nIqvq Avgvi B”Qv‡K cÖvavb¨ w`‡q Avgv‡K evwo‡Z wb‡q Av‡m| Avi ZLb †_‡KB ïiæ nq Avgvi wkÿvnxb Awfkß Rxeb| Gfv‡eB Avwg eo n‡Z _vwK Avi w`‡b w`‡b wkÿvi cÖ‡qvRbxqZvI Dcjwä Ki‡Z _vwK| ZLb g‡b n‡Zv Avgvi †h‡nZz †Pv‡Li Av‡jv †bB ZvB Avgv‡K wkÿvi Av‡jvq Av‡jvwKZ n‡q GKwU my›`i Rxeb Mo‡Z n‡e| GRb¨ A‡bK †Póv K‡i Avgvi MÖv‡gi GKwU wb¤œgva¨wgK we`¨vj‡q fwZ© nB| ZLb †_‡KB g~jZ cov‡jLvi cÖwZ Avgvi AvMÖn evo‡Z _v‡K| Avwg H ¯‹z‡j Aa¨qbiZ Ae¯’vq wb‡Pi †kÖYxi QvÎ-QvÎx‡`i‡K wkÿK‡`i Abycw¯’wZ‡Z A‡bK mgq ‡¯^”Qvq K¬v‡m covZvg| Avwg eySZvg †h ZvivI Avgvi K¬vm cQ›` Ki‡Zv| ZvB AvwgI Zv‡`i‡K cwo‡q A‡bK Avb›` †cZvg| QvÎ-QvÎxivI ¯‹z‡ji cÖavb wkÿ‡Ki Kv‡Q Av‡e`b Ki‡jv mßv‡n AšÍZ `yB w`b Zv‡`i‡K wbqwgZfv‡e cov‡bvi Rb¨| Zv‡`i‡K cov‡bvi myweav‡_© wb‡Pi K¬v‡mi wKQz wel‡qi cvV¨cy¯ÍK wbR Li‡P †eªB‡j iæcvšÍi K‡i wb‡qwQjvg| Gfv‡eB mgq Mwo‡q †h‡Z jvM‡jv Ges 2016 mv‡ji †R.Gm. wm. cixÿv w`‡q Avjøvn&i ing‡Z wRwcG-5 †c‡q K…wZ‡Z¡i mv‡_ DËxY© njvg| wb¤œ gva¨wgK ¯‹zj nIqvq Gici †mLv‡b Avi cov‡jLvi e¨e¯’v wQj bv| ZvB A‡bK RvqMvq †LvR-Lei wb‡q Rvb‡Z cvwi †h, Rqcyinv‡U cybU D”P †eªB‡ji mvnv‡h¨ †gv. dRjyj nK Zvi we`¨vj‡qi cÖv_wgK ch©v‡qi wkÿv_©x‡`i cvV`vb Ki‡Qb| we`¨vjq bv‡g GKwU miKvwi wkÿv cÖwZôv‡b webv Li‡P cov‡jLvmn _vKvi e¨e¯’v Av‡Q| ZLb Avi †`wi bv K‡i †mB ¯‹z‡j fwZ© n‡q cov‡jLv Pvwj‡q e„_v †h‡Z †`‡ev bv| Abvb¨ my¯’ gvby‡li g‡Zv wb‡R‡K wkwÿZ I cÖwZwôZ †h‡Z _vwK Ges cieZ©x‡Z 2019 mv‡j Gm. Gm. wm. cixÿvq Ask wb‡q Kivi cvkvcvwk Áv‡bi Av‡jv‡K hw` mgv‡R Qwo‡q w`‡Z cvwi Zvn‡jB wRwcG-4.86 †c‡q DËxY© nB| wKš‘ GUvB ‡Zv †kl bq, Avgv‡K Av‡iv nq‡Zv WvP&-evsjv e¨vs‡Ki GB gnZx D‡`¨vM mv_©K n‡e| WvP&-evsjv e¨vs‡Ki cov‡jLv Ki‡Z n‡e| m‡e †Zv gva¨wgK †kl n‡jv, GL‡bv ‡Zv A‡bK GB Ae`vb‡K m¤§vb K‡i `y‡Uv jvBb ej‡Z PvB Ògvbyl gvby‡li Rb¨, c_ cvwo ‡`qv evwK Av‡Q! †mB j‡ÿ¨ D”P gva¨wg‡Ki wkÿv AR©‡bi Rb¨ Avi WvP&-evsjv e¨vsK `wi`ª I †gavex wkÿv_©x‡`i wkÿv mnvqZvi Rb¨Ó| miKvix evOjv K‡jR, wgicyi, XvKv‡Z fwZ© njvg| ïay fwZ© n‡jB †Zv cwi‡k‡l WvP&-evsjv e¨vs‡Ki mg„w× I Kj¨vY Kvgbv K‡i Ges mevi Kv‡Q †kl bq! Avgvi B”Qv I †Póvi cvkvcvwk †Zv `iKvi A‡_©i †hvMv‡biI| †`vqv cÖv_©bv K‡i GLv‡b †kl KiwQ| Avwg Av‡MB e‡jwQ †h, Avwg nZ`wi`ª cwiev‡ii GKRb `„wócÖwZeÜx mšÍvb| cwiev‡ii GKgvÎ DcvR©bKvix evevi c‡ÿ Avgvi cov‡jLvi LiP Pvjv‡bv †gv. dRjyj nK m¤¢e bq| Avcbviv nq‡Zv A‡b‡KB Rv‡bb mvaviY wkÿv_©x‡`i eB-LvZvi Øv`k †kÖwY, gvbweK wefvM Zzjbvq `„wó-cÖwZeÜx‡`i Rb¨ Dc‡hvMx †eªBj c×wZi eB-LvZv A‡bK miKvix evOjv K‡jR, wgicyi, XvKv e¨qeûj| cov‡jLvi GB AwZwi³ Li‡Pi cvkvcvwk _vKv-LvIqv I Ab¨vb¨ LiP †Zv Av‡QB| Dutch-Bangla Bank becomes an education XvKv‡Z fwZ© nevi ci GZme Li‡Pi wPšÍvq Avwg memgq nZvkvMÖ¯Í _vKZvg supportive guardian of Fazlul Haque Ges fveZvg A‡bK K‡ói ci wkÿvi wmuwo‡Z cv w`‡Z bv w`‡ZB `wi`ªZv The famous litterateur, Motaher Hossain Chowdhury eywS Avgv‡K Avevi wb‡P bvwg‡q †`‡e| Ggb nZvkvMÖ¯Í Ae¯’vq Avgvi GK has compared human life as a two storied house in his eÜzi Kv‡Q WvP&-evsjv e¨vsK wkÿv e„wËi Lei cvB| †m Avgv‡K e‡j †gavex essay titled Òwkÿv I gbyl¨Z¡Ó. He compared the down stair I `wi`ª wkÿv_©x‡`i cvkvcvwk, WvP&-evsjv e¨vsK cÖwZeÜx wkÿv_©x‡`i‡KI of the house as living being and the upper stair as human e„wËcÖ`vb K‡i _v‡K| GK_v ï‡b †hb Avwg A‡bKUv fimv †cjvg| Gici being that is huminity. He termed education as a stair to †mB eÜzi mn‡hvwMZvq e„wËi Rb¨ Av‡e`b Kijvg| Avgvi Avkv wQj WvP&- ascend from the house of the living entity to the house of evsjv e¨vsK Avgv‡K wbivk Ki‡e bv| mwZ¨B ZvB n‡jv, Avwg e„wËi Rb¨ humanity. To amplify that education, Dutch-Bangla Bank has been providing scholarship since its inception. wbev©wPZ n‡q †Mjvg| †hw`b Rvb‡Z cvijvg †h Avwg WvP&-evsjv e¨vs‡Ki e„wËi Rb¨ g‡bvbxZ n‡qwQ, ZLb D”Q¡vwmZ K‡Ú Avgvi evev‡K †dvb K‡i e‡jwQjvg I, Md. Fazlul Haque, am a visually impaired student. We Avgvi cov‡jLvi LiP wb‡q ‡Zvgv‡K Avi wPšÍv Ki‡Z n‡e bv| KviY †Zvgvi reside at a remote area named Charkhatamari under g‡Zv wkÿv mnvqK AwffveK wnmv‡e WvP&-evsjv e¨vsK Avgvi cv‡k Av‡Q| Lalmonirhat district. My father had to maintain our family of six members by working as a floating daylabour. The ZLbKvi Abyf~wZUv Avm‡j cy‡ivcywi cÖKvk Kiv m¤¢e bq| WvP&-evsjv family was not interested in my education because of our e¨vs‡Ki GB Ae`vb Avwg mn Avgvi cwiev‡ii Kv‡Q wPi ¯^iYxq n‡q _vK‡e| poverty and my visual impairment. Yet I would go to the e¨vs‡Ki GB wkÿv e„wËi UvKv h_vh_ e¨env‡ii gva¨‡g Bb&kvAvjøvn& Avwg village school with the neighboring students. But I could D”P gva¨wg‡KI m‡šÍvlRbK djvdj AR©b Ki‡Z mÿg n‡ev| e¨vsK hw` not study there due to my visual impairment. wkÿv Rxe‡bi evKx mgq ¸‡jv‡ZI Zv‡`i wkÿv e„wËi mnvqZv wb‡q Avgvi cv‡k _v‡K Zvn‡j AvwgI A½xKvi KiwQ, WvP&-evsjv e¨vs‡Ki GB Ae`vb‡K Several months later, with the help of an NGO official,

ANNUAL REPORT 2020 281 I was admitted to a specialized school for the visually with disabilities like me. After hearing this, I felt a lot of impaired. That time I was very little to understand the confidence. Then I applied for the scholarship with the value of education. So I didn't want to leave my parents. help of that friend. I expected that Dutch-Bangla Bank As they were illiterate, they brought me home by giving would not dishearten me, and in fact, I was selected for priority on my desire. From then, my cursed life began the scholarship finally. The day I found out that I had without the light of education. Day by day, I was growing been nominated for the scholarship, I phoned my father up and realizing the need for education. At that time and told him no longer to worry about my educational it seemed that since I don’t have the eye sight to build expenses. Dutch-Bangla Bank is with me as an education a bright future, I should be enlightened in the light of supportive guardian. education. So I tried a lot and got admitted in a junior It is not possible to fully express my feelings. This school in my village. Since then my interest in study had contribution of the Dutch-Bangla Bank will be been increasing. remembered by me and my family forever. By making While studying in that school, I often voluntarily taught proper use of this scholarship of the bank, I will be able the lower class students in the classroom due to the to achieve satisfactory results in higher secondary as absence of teachers. I realized that they liked my classes. well. If the bank stays with the help of its scholarship I also enjoyed teaching them. The students also appealed for my rest educational life, I also promise that I will not to the headmaster of the school to teach them at least let this contribution go in vain. These great initiatives of twice in a week. To make it easier for me, I converted Dutch-Bangla Bank may be successful if I can educate some of their textbooks into Braille. In this way, time and establish myself like other people as well as spread began to pass and by the grace of almighty Allah, I the light of education in the society. Respecting the obtained GPA-5 in JSC exam in 2016. contribution of Dutch-Bangla Bank, I would like to say that: "Human for the humanity; and Dutch-Bangla Bank Being a junior school, there was no arrangement for is for the educational support of poor and meritorious further education. So, after searching in many places, I students. I wish prosperity and well-being of Dutch- came to know about a government school named Punat Bangla Bank and praying for all. High School under Joypurhat district with free tuition and accommodation. Then I got admitted in that school Md. Fazlul Haque without any delaying and continued my studies and Class-XII, Humanities later I passed SSC examination in 2019 with GPA- 4.86. Govt. Bangla College, Mirpur, Dhaka But this was not the end, I had to study more. Barely finished secondary school, there was still a long way to GKRb my‡hvM¨ wPwKrmK n‡q `wi`ª gvbyl‡K mwVK wPwKrmv †mev go. To that aim, I was admitted to Government Bangla cÖ`vbB- mvbwR`v Rvnvb Bfvi jÿ¨ College, Mirpur, Dhaka to pursue higher secondary cÖwZwU RvwZi Rb¨B wkÿv AZxe ¸iæZ¡c~Y©| we‡kl K‡i evsjv‡`‡ki g‡Zv education. It's not just about getting admitted, I need Dbœqbkxj †`‡k wkÿv †h KZUzKz cÖ‡qvRbxq Zv Avi ejvi A‡cÿv iv‡L bv| financial support along with my desire and effort. As I GB wkÿv AR©‡bi Rb¨ †hgb PvB †gav Avi cwikÖg, †Zgwb cÖ‡qvRb Avw_©K am a visually impaired child from a very poor family, it myweavI| †mRb¨B Avgv‡`i g‡Zv Dbœqbkxj †`‡k D”Pwkÿv MÖnY Kiv mevi Rb¨ AZUv mnR bq| `wi`ª I †gavex wkÿv_©x‡`i wkÿvi c_‡K myMg Kivi was not possible by the earning of my father to cover the Rb¨B cÖwZ eQi WvP&-evsjv e¨vsK nvRvi nvRvi wkÿv_©x‡`i wkÿve„wË cÖ`vb expense of my education. You may know, Braille books for K‡i Avm‡Q| the visually impaired students are more expensive than mvbwR`v Rvnvb Bfv 2017 mv‡j mvnvRDÏxb miKvi g‡Wj ¯‹zj GÛ K‡jR books for normal students. Besides these extra costs †_‡K Gm.Gm.wm. Ges 2019 mv‡j nwjµm K‡jR, XvKv †_‡K GBP.Gm.wm. of tuition, there are also some additional expenses for cixÿvq wRwcG-5 †c‡q DËxY© n‡q‡Q| eZ©gv‡b †m Lyjbv †gwW‡Kj K‡j‡Ri accommodation and other incidental expenses. Gg.we.we.Gm. †Kv‡m©i cÖ_g e‡l©i QvÎx| Zvi Rb¥ biwms`x †Rjvi wkecyi After being admitted to Bangla College in Dhaka, I was Dc‡Rjvi cywUqv evRvi BDwbq‡bi Avwjqvev` MÖv‡g| gv I fvB-‡evb wb‡q always frustrated about so many expenses. I thought Zv‡`i cwievi| Zvi evev wQ‡jb mvgvb¨ †eZ‡bi GKRb †Kivwb Ges gv that even after stepping on the ladder of education after GKRb M„wnYx| 2013 mv‡j evev gviv hvIqvi ci †_‡K Zvi covïbvi c_Uv a lot of hardship, poverty seems to bring me down again. mnR wQj bv| XvKvq †_‡K †jLvcov Kiv, eB †Kbv, †KvwPs Kiv me wgwj‡q In such a frustrating situation, I got the news of Dutch- Avw_©Kfv‡e Lye msK‡Ui ga¨ w`‡q hvw”Qj| eo †evb‡`i mnvqZvq Zvi Bangla Bank scholarship from a friend. My friend told me covïbvi wewfbœ LiP †Kvbfv‡e †hvMvo n‡q †hZ| wKš‘ †m GKv`k †kÖYx‡Z that Dutch-Bangla Bank has been providing scholarships covi mgq †evb‡`i we‡q n‡q hvIqvq cybivq Avw_©K msK‡U c‡o hvq| Avw_©K msK‡Ui Kvi‡Y GBP.Gm.wm. cixÿvq fvj djvdj Kiv wb‡q †m Lye to meritorious and poor students as well as students wPwšÍZ wQj| cieZ©x‡Z †m WvP&-evsjv e¨vs‡Ki wkÿve„wË Kg©m~Px m¤ú‡K© AeMZ nq Ges get this education, it is required of talent and hard work e„wËi Rb¨ Av‡e`b K‡i| Avjøvni A‡kl ing‡Z †m e„wËi Rb¨ wbe©vwPZ nq| as well as financial soundness. That is why getting higher e„wË cvIqvi ci Zvi gv_v †_‡K `ywðšÍvi fviUv A‡bKUvB K‡g wM‡qwQj| eB education in a developing country like us is not accessible †Kbv †_‡K ïiæ K‡i K‡j‡Ri †eZb Ges †cvkvK-cwi”Q‡`i hveZxq LiP for all. Dutch-Bangla Bank has been providing scholarships †m e„wËi UvKv w`‡q cÖ`vb KiZ| GBP.Gm.wm. cixÿvq fvj djvdj Kivi to thousands of poor and meritorious students every year †cQ‡b WvP&-evsjv e¨vs‡Ki GB Ae`v‡bi K_v †m †Kvbw`bI fzj‡Z cvi‡e bv| Zvi g‡Z, `yB eQ‡ii wkÿv Rxe‡bi Avw_©K msKUvcbœ gyn~Z©¸‡jv‡Z to facilitate the education. WvP&-evsjv e¨vsK A‡bKUv mn‡hv×vi g‡ZvB cv‡k `uvwo‡qwQj| Shanjida Jahan Eva passed SSC from Shahajuddin Sarker Model School and College in 2017 and HSC from Holy Cross College in 2019 achieving GPA-5. At present she is a first year student of MBBS course in Khulna Medical College. She was born in Aliabad village of Putia Bazar union under Shibpur upazila of Narsingdi district. She has a family with mother and siblings. Her father was a low-paid clerk and her mother was a housewife. Since her father died in 2013, it was not easy for her to continue her education. She was passing through a financial hardship because she had to manage various types of cost like procuring educational materials, coaching fees, accommodation etc. With the help of her elder sisters, she was someway able to meet up various expenses of her education. When she was studying as HSC level, flow of financial support from her elder sisters was stopped as they got married. She was WvP&-evsjv e¨vs‡Ki wkÿve„wË cÖ`vb Abyôv‡b mvbwR`v Rvnvb Bfv very worried about getting good results in HSC exam due to financial crisis. mvbwR`vi g‡Z, Ò‡gwW‡Kj K‡j‡R fwZ© nIqvi mgq Avgv‡K Av‡Mi She later came to know about the scholarship program g‡Zv Avw_©K msK‡Ui `ywðšÍvq co‡Z nqwb| KviY Avgvi wek¦vm wQj Avwg cybivq WvP&-evsjv e¨vs‡Ki wkÿve„wË cv‡ev Ges Avjøvni ing‡Z †c‡qwQI| of Dutch-Bangla Bank and applied for the scholarship. GB e„wËi UvKv Avgvi wkÿv Rxe‡bi c_‡K A‡bKUv mnR K‡i w`‡q‡Q| By the boundless kindness of Allah, she was selected ‡gwW‡K‡j covi Rb¨ †h eB¸‡jv †Kbvi cÖ‡qvRb, Avkv Kwi e„wËi UvKv for the scholarship. After receiving it, the burden of w`‡q †mB Li‡Pi wmsnfvMB †hvMvb w`‡Z cvi‡ev| Avgvi wkÿv Rxeb‡K her anxiety reduced a lot. She used to manage all the mn‡hvMxZv Kivi Rb¨ Avwg WvP&-evsjv e¨vs‡Ki cÖwZ AvšÍwiKfv‡e K…ZÁZv expenses from buying books to tuition fees of the college cÖKvk KiwQ| Avcbviv mevB Avgvi Rb¨ cÖv_©bv Ki‡eb Avwg †hb Avgvi and clothes with scholarship money. She will never forget j‡ÿ¨ †cŠuQv‡Z cvwi Ges GKRb my‡hvM¨ wPwKrmK n‡q gvbyl‡K wPwKrmv †mev w`‡Z cvwiÓ| wZwb e‡jb, Kwe e‡j‡Qb- the contribution of Dutch-Bangla Bank in achieving good results in HSC examination. According to her, Dutch- Ò†gN †`‡L †KD Kwim‡b fq Avov‡j Zvi m~h© nv‡m|Ó Bangla Bank has stood by her side like a catalyst in the financial crisis of two years of education. mvbwR`vi g‡Zv nvRv‡iv `wi`ª wkÿv_x©‡`i wkÿv Rxeb †_‡K GB †gN bvgK evav‡K A‡bKvs‡k mwi‡q †`evi Rb¨ WvP&-evsjv e¨vsK GB wkÿve„wË Kvh©µg According to Shanjida, “when I got admitted to the Pjgvb ivL‡e GUv Zvi cÖZ¨vkv| Medical College in MBBS course, I did not have to worry about financial crisis like previous. Because I believed mvbwR`v Rvnvb Bfv Gg. we. we. Gm. (1g el©) that I would get the Dutch-Bangla Bank’s Scholarship Lyjbv †gwW‡Kj K‡jR again and finally I got it with the mercy of Allah. This scholarship has made my education life easier. I hope to Becoming a well trained doctor, Shanjida be able to cover most of the cost of the books need to Jahan Eva expects to provide proper buy for medical studies. I am sincerely grateful to Dutch- medical services to the poor people Bangla Bank for facilitating my educational life. All of you Education is very important for every nation. It does not will pray for me so that I can attain my goal and become a need to elaborate how much important the education is well trained physician for providing medical services to the for a developing country especially like Bangladesh. To people.”

ANNUAL REPORT 2020 283 It is her expectation that Dutch-Bangla Bank will continue †gvbvRv‡Z AS‡o Kvu`‡Zb| hZ Dc‡ii K¬v‡m DV‡Z jvMjvg covïbv its scholarship program to largely remove the barriers I Avbylvw½K LiP Pvjv‡bv ZZ KóKi n‡q DV‡Z jvM‡jv| ZLb ¯‹z‡ji called cloud from the educational life of thousands of poor wkÿK‡`i mv‡_ K_v e‡j mßv‡n cuvP w`b K¬vm Kiv Avi Ab¨ `yB w`b students like Shanjida. ivRwgw¯¿i †RvMvb ‡`Iqvi wm×všÍ †bB wKQz Av‡qi D‡Ï‡k¨| Kv‡Ri mgq A‡b‡KB Avgvi mybvg Ki‡Zv, ZLb Avgvi A‡bK fv‡jv jvM‡Zv| wKš‘ †mB Shanjida Jahan Eva fv‡jv jvMv wb‡g‡lB nvwi‡q †hZ, hLb Avgv‡K 50 ‡KwR IR‡bi wm‡g‡›Ui MBBS (1st year) e¯Ív 4-5 Zjv fe‡b Zzj‡Z n‡Zv| cÖwZwU wmuwoi avc gvov‡bvi Kó Avgvi Khulna Medical College Kv‡Q cÖv‡Y DôvNvZ nIqvi g‡Zv wQj| ZeyI Avwg `‡g hvBwb; Gfv‡eB KvR K‡i cov‡jLv Pvjv‡Z n‡q‡Q Avgv‡K| 2017 mv‡ji Gm.Gm.wm. cixÿvi mgm¨v RR©wiZ Avgvi Rxe‡b mdjZvi Abb¨ my‡hvM G‡b c‡iI Avgv‡K Kv‡Ri Rb¨ Qz‡U †h‡Z n‡q‡Q wbKU¯’ †Rjvq| Avjøvn&i A‡kl w`‡q‡Q WvP&-evsjv e¨vs‡Ki wkÿve„wË ‡g‡nievbx‡Z Gm.Gm.wm. cixÿvq †Mv‡ìb wRwcG-5 †c‡q DËxY© nB| GK †L‡U LvIqv mvaviY w`bgRy‡ii †Q‡j †gv. D¾j †nv‡mb| bv‡Uvi m`i GK GKUv cÖvwß ‡hgb gvbyl‡K G‡b †`q bZzb bZzb m¤¢vebv, †Zgb Kv‡iv Kv‡iv Rxe‡b ïiæ nq bZzb KóNb gyn~‡Z©iI| †Zgwb cÖwZUv cÖvwß Avgv‡K Dc‡Rjvi QvZbx BDwbq‡bi me ‡_‡K wcwQ‡q cov MÖvg fevbx‡Z Zvi Rb¥| G‡b w`‡q‡Q wKQz `ywðšÍv Avi K‡qKwU wbN©yg ivZ| †QvU‡ejvq ¯^cœ †`LZvg Qq fvB-‡evb‡`i g‡a¨ D¾j mevi †QvU| AZx‡Z Zvi evevi Avw_©K Ae¯’v XvKvq fv‡jv †Kv‡bv K‡j‡R co‡ev| wKš‘ Avwg RvbZvg GUv Avgvi ïayB ‡gvUvgywU ¯^”Qj wQj wKšÍy Pvi †ev‡bi we‡qi e¨q I eo fvB‡qi ü`‡iv‡Mi AvKvkKzmyg Kíbv| Gm.Gm.wmi dj cÖKv‡ki K‡qKw`b ci Avgvi mvd‡j¨i wPwKrmvi Kvi‡Y wZwb GLb cÖvq me©¯^všÍ| †gv. D¾j †nv‡mb 2019 mv‡j GBP. K_v K‡qKwU RvZxq cwÎKvq ÒivRwgw¯¿i †RvMvb w`‡q †Mv‡ìb wRwcG-5 Gm.wm. cvk K‡i eZ©gv‡b ivRkvnx wek¦we`¨vj‡q A_©bxwZ wefv‡M Aa¨qb †c‡q‡Q D¾jÓ wk‡ivbv‡g cÖKvwkZ n‡qwQj| fvM¨µ‡g †mB KjvgwU XvKvq Ki‡Q| fv‡M¨i A`„ó cwinv‡mi bZzb Aa¨vq g~jZ Zv‡K w`‡qB ïiæ nq| Aew¯’Z nvg``© cvewjK K‡jR KZ©…c‡ÿi `„wó‡MvPi nq| K‡jR KZ…©cÿ msMÖvgx Rxe‡bi wKQz KiæY Kvwnbx Zvi wb‡Ri †jLv‡ZB eY©bv Kiv n‡jv- webv Li‡P H K‡j‡R fwZ© I _vKv-LvIqvi e¨e¯’v K‡i †`b| GB my‡hvM Òbq eQi eq‡m Avwg hLb Z…Zxq †kÖYxi QvÎ wQjvg, ZLb Avgvi cov‡jLvi Avgv‡K h‡ZvUv bv Avbw›`Z K‡iwQj Zvi †P‡q †ewk wePwjZ K‡iwQj, wel‡q evevi Am¤§wZ _vKvi Kvi‡Y cvwievwiK Kj‡ni m„wó n‡q msmv‡i KviY XvKvq hvIqv-Avmv, eB-LvZvi ‡Kbvi LiP, cixÿvi wdmn †jLvcovi fv½b a‡i| evev Avgv‡`i ‡Q‡o Ab¨Î P‡j hvb| evevi Abycw¯’wZ Avbylvw½K LiP †hvMv‡bv Avgvi cwiev‡ii c‡ÿ cÖvq Am¤¢e wQj| ZLb Avgv‡`i‡K ZLb Dfq msK‡U †d‡j w`‡qwQj| Avwg I Avgvi eo fvB A‡bKUv wm×všÍnxbZvq fzMwQjvg ‡h XvKvq fwZ© n‡ev wKbv? Ggb GK A‡b¨i Rwg‡Z w`bfi KvR K‡i †Kv‡bv g‡Z Pvjvw”Qjvg Avgv‡`i msmvi| †`vUvbvi g‡a¨ cwÎKvq WvP&-evsjv e¨vs‡Ki wkÿve„wËi weÁvcbwU †`‡L evev wb‡Ri fyj eyS‡Z †c‡i cÖvq 1 eQi c‡i Avgv‡`i gv‡S Avevi wd‡i wKQzUv Avkvi mÂvi n‡qwQj| Avm‡jI wZwb Amy¯’Zvi Kvi‡Y fvwi KvR Ki‡Z cvi‡Zb bv, ZvB msmv‡i †mB mgq e„wËi Rb¨ Av‡e`b Kijvg Ges WvP&-evsjv e¨vsK Avgv‡K e„wËi Kó †_‡KB hvq| GZ K‡ói g‡a¨I 2011 mv‡ji PEC cixÿvq †Kv‡bv g‡Z Rb¨ g‡bvbxZ K‡i Avgvi `ye©j nvZwU a‡i Avgv‡K kw³ hywM‡qwQj| wRwcG-4.08 wb‡q gva¨wg‡K QvZbx D”P we`¨vj‡q fwZ© nB| wb‡Ri B”Qv e„wËi UvKv w`‡q wb‡Ri cÖ‡qvRb wgUv‡bvi ci hv evuP‡Zv Zv Aí Aí K‡i kw³i Ici fi K‡i Ges ¯‹z‡ji wkÿK‡`i mnvqZvq covïbv ïiæ Kwi Ges mÂq K‡i †i‡LwQjvg wek^we`¨vj‡qi fwZ© cixÿvi LiP wgUv‡bvi Rb¨| 2014 mv‡ji JSC cixÿvq †Mv‡ìb wRwcG-5 †c‡q DËxY© nB| ¯‹zj Rxe‡b Gfv‡e fv‡jvB PjwQ‡jv| wKš‘ nVvr K‡i Avgv‡`i cwiev‡i †b‡g Av‡m K¬v‡mi cÖ_g wZbR‡bi evB‡i KL‡bv Avgvq †h‡Z nqwb| †Nvi Agvwbkv| 2018 mv‡j ˆe`y¨wZK kU© mvwK©‡U Av¸‡b cy‡o QvB n‡q hvq Avgv‡`i evwo| ZLb Avgvi evwoi gvbyl n‡q c‡o M„nnxb| GB av°v evev Ges Amy¯’ fvB wg‡j ZLb †_‡KB msmvi mvgjvw”Q‡jb| Zviv Avgvi mvgjv‡Z hLb Avgv‡`i cwievi wngwkg Lvw”Qjvg wVK ZLbB cwiev‡ii 2q cov‡jLvi m¤ú~Y© LiP KL‡bv bv w`‡Z cvi‡jI mvnm w`‡q‡Qb memgq| DcvR©bÿg e¨w³ Avgvi eo fvB wPwKrmvi Afv‡e cvwo Rgvq bv †divi Avgvi gv‡K †`‡LwQ cov‡jLvi miÄvg †hvMvo Kivi AÿgZvi Rb¨ bvgv‡Ri †`‡k| Avgvi cwieviwU cÖvq APj n‡q c‡o| Ggb cwiw¯’wZ‡Z wbt¯^ evev-gv Avgv‡K mvnm hywM‡qwQ‡jb, e‡jwQ‡jb Zv‡`i hZ Kó †nvK bv †Kb Avwg †hb †jLvcov Pvwj‡q hvq| e¨vs‡Ki GB e„wËwU Avwg e„_v n‡Z †`Bwb, Avwg GBP. Gm. wm. cixÿv‡ZI wRwcG-5 AR©b Kwi| GBP. Gm. wm. cv‡ki ci Avkv wQj fv‡jv †Kv‡bv wek^we`¨vj‡q fwZ© n‡Z cvi‡j WvP&-evsjv e¨vsK cybivq Zv‡`i wkÿve„wË cÖ`v‡bi gva¨‡g Avgvi cv‡k _vK‡e| cieZ©x‡Z 2019 mv‡j GBP. Gm. wm. cixÿv ‡kl K‡i WvP&-evsjv e¨vs‡Ki wkÿve„wËi Rgv‡bv UvKv w`‡qB fwZ© cixÿvi hveZxq LiP Pvjv‡Z †c‡iwQjvg| e¨vsK Avgv‡K wbivk K‡iwb, Zviv Avev‡iv wkÿv e„wËi Rb¨ wbe©vwPZ K‡i D”P wkÿv MÖn‡Yi c_‡K mnR K‡i ‡`qvi Rb¨ Avgvi cv‡k `uvwo‡q‡Q| Avwg I Avgvi cwievi GLb A‡bK Avbw›`Z G †f‡e ‡h, ïaygvÎ A‡_©i Afv‡e Avgvi cov‡jLv eÜ n‡q hv‡e bv| Avgv‡`i mgm¨v RR©wiZ Rxe‡b mvdj¨gq GK Abb¨ my‡hvM G‡b w`‡q‡Q WvP&-evsjv e¨vs‡Ki wkÿve„wË| Avwg GB e¨vs‡Ki cÖwZ AšÍ‡ii AšÍt¯’j †_‡K K…ZÁZv Ávcb KiwQ| WvP&-evsjv e¨vsK †hb Zv‡`i GB gnr Kvh©µg AvRxeb Pvwj‡q †h‡Z cv‡i †mB cÖZ¨vkv e¨³ KiwQ Ges GB e¨vs‡Ki DˇivËi mg„w× Kvgbv KiwQ|Ó

†gv. D¾j †nv‡mb A_©bxwZ wefvM (1g el©) †gv. D¾j †nv‡mb ivRkvnx wek¦we`¨vjq The scholarship of Dutch-Bangla Bank has has brought me some worries and a few sleepless nights. brought a unique opportunity of success in In the childhood I dreamt of getting admission in a good college in Dhaka. But I knew it was just my imagination. my thorny life A few days after publication of SSC results, the news of Md. Uzzal Hossain is a son of a day laborer. He was born in my success was published in several national dailies under Vabani, the most backward village of Chatni Union under the headline "Uzzal got Golden GPA-5 even after working Sadar upazila of Natore district. Uzzal is the youngest as a mason". Luckily that column caught the attention among the six siblings. In the past, his father’s financial to the authority of Hamdard Public College, Dhaka. condition was moderately solvent but due to meet up the The college authority arranged for my admission and cost of the marriage of his four sisters and treatment of accommodation at free of cost. This opportunity upset heart disease of elder brother, his father is now almost me more than happiness, because how do I manage the destitute. Uzzal Hossain passed HSC in 2019 and is cost of traveling, buying books, the examination fees and currently studying at Economics department in University the other incidental expenses of education? At that time of Rajshahi. The chapter of irony of fate begins with I was suffering from a lot of indecisiveness whether to be him. Some of his cruel histories of the struggling life are admitted in Dhaka or not? In such a dilemma, seeing the narrated in his own writings – advertisement of the scholarship of Dutch-Bangla Bank in the newspaper gave me some expectation. “When I was in class three at the age of nine, our family had been broken up because my father was disagreed to At that time I applied for the scholarship and Dutch- continue my studies. Father left us and went elsewhere. Bangla Bank nominated me for the scholarship and gave Father's absence put us in crisis then. My elder brother me strength by holding my fragile hand. After meeting and me were working all day long on other’s land and my needs with this scholarship money, I used to save a somehow running our family. After realizing his mistake, little bit so that it would be used for meeting the cost my father came back about one year later, but he could of university admission test. It was going well. But all not do hard work due to illness. As a result, there was of a sudden, darkness fell on our family. In 2018, our always trouble in the family. Despite all the hardships, house caught fire due to an electrical short circuit. Then I somehow passed the PEC exam in 2011 with a GPA of we became homeless. While the family was struggling 4.08 and was admitted to Chatni High School. I started to cope with the shock, my elder brother, who was the studying on the strength of my own will and with the second earner in our family died due to lack of treatment. help of school teachers. I passed JSC exam in 2014 with My family became about to motionless. In such a a golden GPA-5. I never had to go out of the top three situation, my parents encouraged me to continue my positions in the classes. studies no matter how hard they tried. My father and ailing elder brother had been maintaining I did not let this scholarship be in vain, I also got GPA-5 in of the family since then. Although my family could never HSC exam. After passing HSC examination, I hoped that if have afforded the full cost of education but they always I could get admission in a public university, Dutch-Bangla encouraged me. I saw my mother weeping loudly during Bank would be beside me providing its scholarships yet the prayers because of their inability to manage the again. After completing the HSC examination in 2019, I reading materials. As I had stepped forward to the upper was able to meet up all the expenses for admission test classes, it became more and more difficult to manage the with the money saved from the scholarship of Dutch- cost of my study and other incidental expenses. At that Bangla Bank. time, with the consent of the teachers, I took part in the Yes! Bank has not disappointed me; the bank again classes for five days in a week and worked as a helper of selected me for the scholarship at graduation level and mason for the remaining two days with a view to earning paved the way for higher education. We are now very some money. Many people praised me at work, of course happy to think that my studies will not stop just because I liked it. But that feeling blew away in a moment when of lack of money. I had to lift a 50kg weighted bag of cement over a 4-5 The scholarship of Dutch-Bangla Bank has brought an storied building. The toiling of stepping on each step was exceptional opportunity of success in our thorny life. I am like a blow to my soul. Yet I did not renounce; in this way expressing my heartfelt gratitude to this bank. I would like I had to work and to study. Even in 2017, after the SSC to express the hope that Dutch-Bangla Bank can continue exam, I had to rush to the nearer district for work. By the this great activity forever and wish for the continuous boundless kindness of Allah, I passed the SSC exam with prosper of this bank.” a golden GPA-5. Just as one achievement brings new possibilities to a Md. Uzzal Hossain person, other hand a new thorny moment begins in the Department of Economics (1st year) life for some people. In the same way, each achievement Rajshahi University

ANNUAL REPORT 2020 285 ¯^cœ c~iY

WvP&-evsjv e¨vsK Gi wkÿve„wË ‡c‡q Avw_©Kfv‡e Am”Qj A_P †gavex A‡bK QvÎ-QvÎx AvR wbR wbR Kg©‡ÿ‡Î cÖwZwôZ n‡q‡Q| Gme QvÎ-QvÎx‡`i weMZ mg‡qi cvwievwiK BwZnvm A‡bK KiæY| hv ïb‡j Pg‡K DV‡e A‡b‡KB| †mme QvÎ-QvÎxiv Zv‡`i AeY©bxq Kó‡K Rq K‡i GZ`~i ch©šÍ G‡m‡Q| Zv‡`i c_Pjv‡K wKQzUv n‡jI Q›`gq K‡iwQj WvP&-evsjv e¨vs‡Ki G wkÿve„wË| Zv‡`i GB mvd‡j¨i avivevwnKZvq mn‡hvMx n‡Z †c‡i WvP&-evsjv e¨vsK AvR Mwe©Z| Zv‡`i GKR‡bi g‡bi Awfe¨w³ GLv‡b Zz‡j aivi ‡Póv Kiv n‡jv: Fulfilling a dream Getting scholarship from Dutch-Bangla Bank Limited (DBBL), the meritorious students in need of financial aid are now established in their own profession. The histories of their family are very sad. The students after fighting poverty conquered the suffering and came to the long. To make their way easy, the Dutch-Bangla Bank Limited (DBBL) takes the scholarship program. Dutch-Bangla Bank feels proud to assist the poor continuously. Such a story of a DBBL scholar established in his own profession is mentioned here: WvP&-evsjv e¨vs‡Ki wkÿve„wË †hb AÜKv‡i cw_‡Ki Kv‡Q ÒAvwg Wvt †gv. iveŸy †nv‡mb, wcZv †gv. nv‡iQ wgTv, iscyi †Rjvi cxiMÄ Av‡jvi w`kv Dc‡Rjvi ivgP›`ªcyi MÖv‡gi cÖZ¨šÍ GjvKvi GKwU wbgœweË cwiev‡ii mšÍvb| Wvt †gv. iveŸy †nv‡mb, WvP&-evsjv e¨vs‡Ki GKRb ¯‹jvi| 36Zg we.wm. evsjv‡`‡ki wKQz A`g¨ mvnmx ‰mwbK hviv cÖwZwbqZ P¨v‡jÄ †gvKv‡ejvq Gm. cix¶vq DËxY© n‡q eZ©gv‡b wZwb gv¸iv ‡Rjvi kªxcyi ¯^v¯’¨ Kg‡cø‡· mÿg wKQz jovKz ‰mwbK‡`i Kv‡Q G‡m AvR Avwg Me©‡eva KiwQ| AvwgI 10 †gwW‡Kj Awdmvi wn‡m‡e Kg©iZ Av‡Qb| AvR wZwb GKRb cÖwZwôZ e¨w³| eQi c~‡e© †Zvgv‡`i g‡ZvB GiKg GKwU gyn~Z© †c‡qwQjvg WvP&-evsjv e¨vsK wKš‘ Zvi GB Ae¯’v‡b ‡cŠuQv‡bvi c_ †gv‡UI mgZj wQj bv| A‡bK PovB- dvD‡Ûkb Av‡qvwRZ e„wËcÖ`vb Abyôv‡b| AvR Avwg Avgvi AZxZ msMÖv‡gi DrivB †cwi‡q AvR wZwb G ch©v‡q ‡cuŠQv‡Z †c‡i‡Qb| WvP&-evsjv e¨vsK w`b¸wji K_v, WvP&-evsjv e¨vs‡Ki Avgvi cv‡k `uvov‡bvi K_v, Avgvi KZ„©K Av‡qvwRZ 2019 mv‡ji GBP.Gm.wm cixÿvq DËxY© wkÿv_©x‡`i e„wË mdjZvi K_v ej‡Z PvB, †h¸‡jv †Zvgv‡`i‡K mvg‡b GwM‡q †h‡Z DrmvwnZ cÖ`vb Abyôv‡b Wvt †gv. iveŸy †nv‡mb G‡mwQ‡jb Zvi wb‡Ri Abyf~wZ cÖKvk Ki‡e| Kivi Rb¨| ‡mB Abyôv‡b Zvi wb‡Ri Rxeb msMÖv‡gi wKQz K_v ej‡Z wM‡q 1990 mv‡j Avgvi Rb¥| Avwg evev gv‡qi eo mšÍvb| `yB fvB I GK †evb wZwb Av‡eM AvcøyZ n‡q wM‡qwQ‡jb| Gevi Wvt †gv. iveŸyi KvQ †_‡KB †kvbv wg‡j †gvU cvuP m`‡m¨i cwievi wQj Avgv‡`i| evev wQ‡jb †ckvq GKRb hvK, Zvi wb‡Ri Rxeb msMÖv‡gi wKQz K_v: `wi`ª K…lK, Avi gv M„wnbx| hLb Avwg cÖv_wgK we`¨vj‡q fwZ© nB, ZL‡bv eyS‡Z wkwLwb `vwi`ª wK? `vwi`ª wK eyS‡Z wkwL ZLb, hLb evev Avgvi LvZv- Kjg G‡b w`‡Z cvi‡Zb bv, ¯‹zj †Wªm Qvov ¯‹z‡j †h‡Z n‡Zv, Ab¨‡`i g‡Zv M„nwkÿK †i‡L cov‡Z cvi‡Zb bv| GK wkÿ‡Ki KvQ †_‡K wk‡LwQjvg wKfv‡e GKB LvZvq cÖ_‡g †cwÝj, Zvici Kjg w`‡q wj‡L LvZvi LiP euvPv‡Z nq| `vwi‡`ªi Kvi‡Y ¯‹zj ev` w`‡q KL‡bv ev ivLvj n‡qwQ Avevi KL‡bv evevi mv‡_ gv‡V KvR K‡iwQ| Gfv‡eB Avwg cÖv_wgK ¯‹z‡ji MwÛ †cwi‡qwQ| hLb 7g †kÖYx‡Z cwo ZLb cwiev‡i Afve AbUb G‡ZvUvB †e‡o †Mj †h Avgvi †jLvcov eÜB n‡q †Mj| †jLvcov ev` w`‡q Mv‡g›Um Kg©x wnmv‡e KvR Ki‡Z †Mjvg| kZ mn¯ ª ¯^‡cœi mgvwß NU‡jv| ZLb g‡b n‡Zv Rb¥B Avgvi AvRb¥ cvc| ïay `vwi`ªB Avgvi Rxe‡bi Pig mZ¨| gv‡K ‡Q‡o kn‡i P‡j Avwm Mv‡g©›U‡m KvR Ki‡Z| GZ Aí eq‡m Mv‡g©›U‡m KvR Ki‡Z G‡m `yB gv‡mi g‡a¨B Avwg Amy¯’ n‡q cojvg| eva¨ n‡q Avwg wd‡i hvB Avev‡iv wPi‡Pbv †mB cjøx MÖv‡g| Avgvi gv †mw`b A‡bK †K‡`uwQ‡jb Avgvi GB `kv †`‡L| Avgvi gv †mw`b †_‡K g‡b g‡b cÖwZÁv K‡iwQ‡jb ‡h Avgv‡K eo wKQz wn‡m‡e †`L‡e e‡j| A‡bK mvnm K‡i Avevi Avgv‡K gv ¯‹z‡j wb‡q hvq| Avwg j¾vq †h‡bv gywo‡q hvw”Qjvg mncvwV‡`i Kv‡Q| hvB ‡nvK, ¯‹z‡ji wkÿK‡`i mvnv‡h¨ Pj‡Z _v‡K Avgvi cov‡jLv| 2007 mv‡j Avgv‡`i ¯‹z‡ji weÁvb wefvM †_‡K AvwgB cÖ_g †Mv‡ìb G cøvm WvP&-evsjv e¨vs‡Ki wkÿve„wË cÖ`vb Abyôv‡b wb‡Ri Abyf‚wZ e¨³ Ki‡Qb †c‡q Gm.Gm.wm. cixÿvq DËxY© nB| Avgvi G‡Zv fv‡jv djvd‡j ¯‹z‡ji Wvt †gv. iveŸy †nv‡mb wkÿKe„›`I Avgv‡K wb‡q A‡bK Me© Ki‡jb| fv‡jv djvdj AR©b Kiv m‡Ë¡I ïay UvKvi Afv‡e bvwg`vwg K‡j‡R fwZ©i ¯^‡cœi RjvÄwj w`‡q GKv`k Dutch-Bangla Bank scholarship is like a †kÖYx‡Z fwZ© njvg evwoi KvQvKvwQ †fÛvevox wWMÖx K‡j‡R| A‡bK Afve- direction of light for a traveler in the dark AbU‡bi g‡a¨I wkÿK‡`i mn‡hvwMZvq Ges wb‡Ri K‡Vvi cwikÖ‡gi dj Dr. Md. Rabbu Hossain is a scholar of Dutch-Bangla Bank. ¯^iƒc 2009 mv‡j †fÛvevox wWMÖx K‡jR †_‡K GBP.Gm.wm. cixÿv‡ZI After passing the 36th BCS, he is currently working as weÁvb wefvM †_‡K †Mv‡ìb G cøvm cvB| ‡mB K‡jR †_‡K AvwgB cÖ_g QvÎ a medical officer at Sreepur Health Complex in Magura wQjvg †h G‡Zv fv‡jv †iRvë Ki‡Z mÿg n‡qwQjvg| district. Today he is an established person. But his path to Avgvi fv‡jv djvdj †`‡L K‡j‡Ri wkÿ‡Kiv Puv`v msMªn K‡i Avgv‡K reach this position was not flat at all. He has reached in iscy‡i †gwW‡Kj †KvwPs‡q fwZ© Kwi‡q w`‡jb| fwZ© cixÿvq AskMÖnY K‡i this stage after passing many ups and downs. Dr. Rabbu Avjøvni A‡kl ing‡Z Avwg cÖ_g cÖ‡Póv‡ZB PvÝ †c‡q hvB gqgbwmsn was present at DBBL’s scholarship awarding ceremony †gwW‡Kj K‡j‡R| K‡j‡R fwZ© njvg| Gevi eBcÎ, K¼vj BZ¨vw` wKb‡Z n‡e| A‡bK UvKvi `iKvi, wKš‘ †Kv_vq cv‡ev? Avwg‡Zv Amva¨‡K Rq K‡i for the students who passed HSC examination in 2019 to fwZ© njvg ¯^bvgab¨ †gwW‡Kj K‡j‡R, wKšyÍ UvKvi Afv‡e g‡b nq Avgvi express his own feelings. He was inundated with emotion c‡ÿ †gwW‡K‡j covïbv Pvwj‡q hvIqv Avi m¤¢e bq| Avgvi Avkvi cÖ`xc as he spoke about his life struggles on that scholarship †hb wbfz wbfy Ki‡Z jvM‡jv| program. Let us hear from Dr. Rabbu about some of his life struggles: AÜKv‡i w`‡knviv cw_K †hgb Av‡jvi †`Lv †c‡j ¯^w¯Í cvq, AvwgI ‡Zgwb WvP&-evsjv e¨vs‡Ki e„wËi weÁvcb ‡`‡L ZLb †hb Avkvi cÖ`xc †c‡qwQjvg| “I am Dr. Md. Rabbu Hossain, son of Md. Haresh Mia, Avwg h_vixwZ Av‡e`b Kwi Ges Avjøvni ing‡Z GBP. Gm. wm.-2009 e¨v‡P came from a low-income family in a remote area of WvP&-evsjv e¨vs‡Ki e„wË †c‡q hvB| ‡mB mgq cuvPwU eQi WvP&-evsjv e¨vsK Ramchandrapur village under Pirganj upazila of Rangpur wbiwew”Qbœfv‡e cÖwZ gv‡m †h e„wË Avgv‡K w`‡qwQj, Zv‡Z Avgvi Gg.we. district. I feel very proud today to participate here in front we.Gm. Gi mgqUyKzI †K‡UwQj wbwð‡šZ I wbwe©‡Nœ| Avgvi evev-gv‡qi Dci of some spirited courageous fighters of Bangladesh who †_‡KI †b‡g wM‡qwQj K‡ói GK wekvj †evSv| Gici Avi Avgv‡K wcQ‡b are always able to face the challenge. 10 years ago, I also wd‡i ZvKv‡Z nqwb| 2015 mv‡j Gg.we.we.Gm. cvm K‡i B›Uvb©iZ Ae¯’vq had such a moment like you at the DBBL scholarship Avwg 36-Zg wewmGm cixÿvq Ask MÖnY Kwi Ges gnvb Avjøvn Zvqvjvi K… cvq cÖ_g cÖ‡Póvq Avwg 36-Zg wewmGm cixÿvq DËxY© n‡q Wv³vi wn‡m‡e awarding program. Today I would like to talk about my miKvix PvKzix‡Z cÖ‡e‡ki my‡hvM cvB| eZ©gv‡b Avwg gv¸iv ‡Rjvi kªxcyi past struggling days, about the scholarship of Dutch- ¯^v¯’¨ Kg‡cø‡· †gwW‡Kj Awdmvi wn‡m‡e Kg©iZ AvwQ| Bangla Bank, about my successes, which will encourage you to move forward. Avgvi wk¶v Rxe‡b WvP&-evsjv e¨vsK Gi e„wË wQ‡jv evwZN‡ii g‡Zv| GRb¨ Avwg WvP&-evsjv e¨vsK KZ©„cÿ‡K AvšÍwiKfv‡e ab¨ev` Rvbv‡Z PvB Ges I was born in 1990. I am the eldest child of my parents. Avkv Kwi mvg‡bi w`b¸‡jv‡ZI Zviv Zvu‡`i GB gnr cªqvm Ae¨vnZ ivL‡e| We had a family of five members with two brothers and Avwg wek^vm Kwi †h, mgv‡Ri g~j avivq Avm‡Z I Zv‡`i ¯^cœ¸‡jv‡K ev¯Z‡e one sister. My father was a poor farmer and mother a iƒc w`‡Z WvP&-evsjv e¨vsK Avgvi gZ Av‡iv iveŸyi cv‡k G‡m `uvov‡e| housewife. When I was admitted in primary school, I did AvR hviv WvP&-evsjv e¨vs‡Ki e„wËi Rb¨ g‡bvbxZ n‡q‡Qv, †Zvgiv hLb not understand what poverty is. I learned to understand mgv‡R GK mgq cÖwZwôZ n‡e Avkv Kie GK w`b †ZvgivI †Zvgv‡`i the meaning of poverty, when my father could not bring mvd‡j¨i Mí †Zvgv‡`i †QvU‡`i ‡kvbv‡e| †ZvgivI GB wk¶ve„wËi mnvqZvq me notebook-pen, when I had to go to school without a mdj n‡q †`‡ki Avcvgi gvby‡li Kj¨v‡Y I Dbœq‡b Kvh©Ki f~wgKv ivL‡e school dress, when I could not afford a house tutor like Ges WvP&-evsjv e¨vsK Gi gZ K‡iB cÖ‡qvR‡bi mgq gvby‡li cv‡k wM‡q others. A kind hearted teacher taught me how to save the `uvov‡e Zvn‡jB mv_©K n‡e WvP-evsjv e¨vs‡Ki GB D‡`¨vM, M‡o DV‡e cost of a notebook by first writing with a pencil and then †mvbvi evsjv‡`kÓ| with a pen. Due to poverty, I sometimes had to drop out from school and became a shepherd or sometimes I had to Wvt †gv. iveŸy †nv‡mb work in the field with my father. This is how I completed †gwW‡Kj Awdmvi the primary level education. kªxcyi ¯^v¯’¨ Kg‡cø·, gv¸iv

ANNUAL REPORT 2020 287 When I was in class seven, due to increasing the poverty When a confused wanderer fells comfort to see the light of our family, my study was stopped. I dropped out of in the dark, the advertisement of scholarships of Dutch- school and went to work in a garments factory. My whole Bangla Bank as a glimmer of hope for me like that. I dreams came to an end. At that time it seemed that applied as usual and by the grace of Allah, I nominated being born in a poor family is a sin. Poverty is the ultimate for Dutch Bangla Bank scholarship in HSC 2009 batch. truth of my life. I moved to the town to work in a garment The financial support given to me by DBBL as a monthly factory. Within two months, I became sick for working scholarship for five years uninterruptedly, I continued my hard in the garments such a young age. I was forced to go study period of MBBS in unworried and unhindered. My back to my village again. My mother cried a lot that day parents were felt relief from huge burden of suffering. when she saw my condition. My mother had promised Then I didn't have to look back. After passing MBBS in that day that she would see me as something special. 2015, I participated in the 36th BCS as an intern and by With a lot of courage, my mother managed admission the grace of Allah, I got the opportunity to enter the me to the school again. I felt embarrassed in front of my government service as a doctor in my first attempt. classmates. Currently I am working as a Medical Officer in Sreepur Health Complex in Magura District. However, my studies had been continued with the help of school teachers. In 2007, I was the first student who passed In my educational life, the scholarship of DBBL was like the SSC exam securing Golden A+ in science group from our a beacon. I would like to express my heartfelt thanks to school. Teachers of our school were very proud of me for my the bank for this and I hope that it will continue this great brilliant result. Despite getting good results, I could not get effort in the days to come. I believe that to join into the admission in a good college due to lack of money, so I got mainstream of the society and make their dreams come admitted in Vendabarhi Degree College near my home. In true, Dutch-Bangla Bank will stand by more Rabbu like me. spite of much paucity, with the help of teachers and my own Today, those who have been selected for scholarship, hard work, again I got Golden A+ in the HSC examination when you will be established in the society, I hope one day from science group of this College in 2009. I was the first you too will tell your success stories to your junior. You will student from that college to get such a good result. also be successful with the help of this scholarship and Considering my good results, our college teachers will play a significant role in the welfare and development collected hand-outs and was admitted me to a medical of the people of the country. This initiative of the bank will coaching in Rangpur. By the grace of Allah after be successful if we stand by the people in time of need attending admission test, I got chance at Mymensingh like the Dutch-Bangla Bank, then Golden Bangladesh will Medical College on my first attempt in MBBS course. I be formed.” got admitted in this college. Then I had to buy books, skeletons etc. I need a lot of money, but where can I get Dr. Md. Rabbu Hossain Medical Officer, it? I overcame the impossible and got admitted in the Sreepur Health Complex, Magura reputed medical college. I thought that due to lack of money it might not be possible for me to continue my medical studies. The lamp of my hope seemed to go out. A few of many memorable incidents and illustrations of the impact of DBBL Cataract Operation program for the poor visually impaired patients are described here:

`„wó cÖwZeÜxZ¡ Avgv‡`i †`‡ki GKwU AeY©bxq mvgvwRK mgm¨v| †Pv‡Li Qvwb n‡jv A܇Z¡i cÖavb KviY| Z‡e Avkvi K_v n‡jv, cÖv_wgK Ae¯’vq 80% Qvwbcov †ivMx‡KB Qvwb Acv‡ik‡bi gva¨‡g ¯^vfvweK `„wókw³ wdwi‡q †`qv hvq| wKš‘ Avgv‡`i †`‡ki cÖZ¨šÍ GjvKvi A‡bK `wi`ª Qvwb cov †ivMx GB Qvwb Acv‡ik‡bi my‡hvM †_‡K ewÂZ| GB Ae¯’v we‡ePbv K‡i WvP&-evsjv e¨vsK 2008 mvj †_‡K †`‡ki cÖZ¨šÍ A‡ji Amnvq, `wi`ª I `yt¯’ Qvwb cov †ivMx‡`i Rb¨ BbUªv IwKDjvi †jÝ e¨envi K‡i webvg~‡j¨ †Pv‡Li Qvwb Acv‡ik‡bi gva¨‡g `„wókw³ wdwi‡q Avbvi Kg©m~wP Pvwj‡q Avm‡Q| GB Kg©m~wPi gva¨‡g 2020 mvj ch©šÍ mviv‡`ke¨vcx me©‡gvU 31,605 Rb `wi`ª Qvwb cov †ivMx ‡Pv‡Li Qvwb Acv‡ik‡bi gva¨‡g ¯^vfvweK `„wókw³ wd‡i †c‡q‡Qb| Amnvq GB me gvbyl¸‡jvi ¯^vfvweK Rxe‡b wd‡i Avmvi c‡_ mn‡hvMx n‡Z †c‡i WvP&-evsjv e¨vsK AvR Mwe©Z| Ggwb GKRb Qvwbcov Amnvq †ivMxi ¯^vfvweK Rxe‡b wd‡i Avmvi Kvwnbx GLv‡b Zz‡j aiv n‡jv t

DBBL Cataract Operation Program Visual impairment is an immense social problem in our country. Cataract is the major cause of blindness and 80% of them can resume vision through cataract operation. A large number of poor rural people are deprived of the opportunity to cure the problem. Keeping their sufferings in mind, in the year 2008, Dutch-Bangla Bank started a new program of operating cataract patients. Under this program more than 31,605 surgeries (Intra Ocular Lens) have been done till the year 2020 throughout the country. Dutch-Bangla Bank feels proud to assist the victims. Such a successful story is mentioned here:

†Pv‡L mdj Qvwb Acv‡ik‡bi ci KyÏym wgqv GLb Av‡Mi gZ Pjv‡div Ki‡Qb Ges gmwR‡` wM‡q cuvP Iqv³ bvgvR Av`vq Ki‡Qb

KyÏym wgqvi evox eªvþYevoxqv †Rjvi AvïMÄ _vbvi cÖZ¨šÍ bInvUv MÖv‡g| cuvP †Q‡j-‡g‡qi RbK wZwb| eZ©gv‡b ¯¿x‡K wb‡q bInvUv MÖv‡gi wbR evox‡Z Aemi Rxeb hvcb Ki‡jI †hŠe‡b wZwb wewfbœ A‡j wg¯¿xi KvR K‡i RxweKv wbe©vn Ki‡Zb| `xN© w`b KvR K‡i‡Qb AvïM‡Ä Aew¯’Z Zvjkni †ijI‡q KviLvbvq| Zvici A‡bK mgq †cwi‡q wM‡q‡Q| GLb KyÏym wgqv Avwk eQ‡ii e„×| Aemi RxebUv fv‡jvB Dc‡fvM KiwQ‡jb wZwb| bvwZ-bvZbx‡`i mv‡_ LybmywU, gmwR‡` wM‡q cuvP Iqv³ bvgvR Av`vq Kiv, mgeqmx‡`i mv‡_ AvÇv †`Iqv BZ¨vw`i gva¨‡g fv‡jvB mgq P‡j hvw”Q‡jv Zvi| 2019 mv‡ji gvSvgvwS †_‡K wZwb GKUv bZzb mgm¨vi m¤§ywLb nw”Q‡jb| Avi †mwU n‡jv, Zvi Kv‡Q g‡b nw”Qj ‡h, Zvi †Pv‡Li `„wó wKQzUv Svcmv n‡q wM‡q‡Q| †h‡nZy Zvi Pjv‡divq †Kvb ai‡bi mgm¨v nw”Qjbv ZvB cÖ_gw`‡K wZwb welqUv‡K ‡Zgb ¸iæZ¡ †`bwb| wKš‘ 2020 mv‡ji ïiæ ‡_‡K cwiw¯’wZ `ªæZ AebwZ n‡Z _v‡K A_©vr Zvi †Pv‡Li `„wó kw³ `ªæZ Kg‡Z _v‡K| Ae¯’vi ¸iæZ¡ we‡ePbv K‡i Zv‡K Pÿz we‡kl‡Ái Kv‡Q wb‡q hvIqv nq| cÖ‡qvRbxq cixÿv-wbixÿvi ci wZwb Rvb‡Z cv‡ib †h, Zvi †Pv‡L Qvwb c‡o‡Q| cybivq ¯^vfvweK `„wó kw³ wd‡i †c‡Z n‡j Acv‡ik‡bi gva¨‡g GB Qvwb AcmviY K‡i †mLv‡b †jÝ ms‡hvRb Ki‡Z n‡e| Wv³v‡ii K_v ï‡b KyÏym wgqv KzÏym wgqv wPšÍvq c‡o hvb| †Kbbv GLb Zvi wb‡Ri †Kvb Avq-‡ivRMvi †bB| †Q‡j‡`i Av‡qi DciB wZwb I Zvi ¯¿x wbf©ikxj| †Q‡jiv hv Avq Zv‡`i nv‡Z _v‡Kbv| ZvB Zv‡`i c‡ÿ evevi †Pv‡Li Acv‡ik‡bi UvKv K‡ib Zv w`‡q †Kvb iK‡g Zv‡`i msmvi P‡j ‡M‡jI evowZ †Kvb UvKv †hvMvo KivI m¤¢e bq|

ANNUAL REPORT 2020 289 Gw`‡K KzÏym wgqv GKUz fq †c‡q hvb| KviY †Pv‡Li Ae¯’v †h nv‡i Lviv‡ci not take the problem seriously, because it did not hamper w`‡K hv‡”Q Zv‡Z Zvi g‡b n‡”Q `ªæZ Acv‡ikb Kiv‡bv m¤¢e bv n‡j wZwb his normal activities. But from the beginning of 2020, his nq‡Zv AwP‡iB AÜ n‡q hv‡eb| GB Ae¯’vq GKw`b GK cÖwZ‡ekxi Kv‡Q eyesight began to deteriorate quickly. Considering the Rvb‡Z cv‡ib †h, WvP&-evsjv e¨vsK webvg~‡j¨ `wi`ª I Amnvq gvby‡li Qvwb seriousness of the condition, he was taken to a local eye Acv‡ikb K‡i _v‡K| GB Lei ï‡b e„× KzÏym wgqvi g‡b Avkvi Av‡jv specialist. After the necessary tests, he was diagnosed as R¦‡j D‡V| †Q‡j‡`i mv‡_ Avjvc-A‡jvPbv K‡i wZwb WvP&-evsjv e¨vsK a cataract patient. And he was advised to add lens in his Av‡qvwRZ Pÿz K¨v‡¤ú wPwKrmv †bIqvi wm×všÍ †bb| cieZx©‡Z wbw`©ó eyes through operation. w`‡b WvP&-evsjv e¨vsK Av‡qvwRZ Pÿz K¨v‡¤ú Dcw¯’Z n‡j K¨v‡¤úi AwfÁ Wv³viMY cÖv_wgK cixÿv-wbixÿvi ci Zvi †Pv‡L mdj fv‡e Qvwb Acv‡ikb Quddus Miah got worried after hearing the doctor's m¤úbœ K‡ib| †Pv‡Li Av‡jv wd‡i †c‡q KzÏym wgqv AvR A‡bK Lywk| KviY advice. Because now he has no income of his own. He and GLb wZwb Avevi Av‡Mi gZ Pjv‡div Ki‡Qb, gmwR‡` wM‡q cuvP Iqv³ his wife depend on the earnings of their sons. All of his bvgvR Av`vq Ki‡Z cvi‡Qb| sons are struggling to fulfill their basic family needs. They did not have any savings in their hands. So it is impossible After successful cataract operation, now for them to raise fund for their father's eye surgery. Quddus Miah can move all the places including mosque to perform his prayer Quddus Miah was scared with the deteriorating condition of his eyes. It was seemed to him that, he will be blind if Quddus Miah lives in a remote village named Naohata his eyes cannot be operated at the earliest possible time. under Ashuganj upazila of Brahmanbaria district. He is In this situation, one day Quddus Miah was informed from the father of five offspring. At present, he is passing one of his neighbor that Dutch-Bangla Bank arranges his aged life at his village home with his wife. But in his cataract surgery without cost for the poor and helpless early life, he worked as a carpenter in different areas. He people of the country. Hearing this news, the light of hope also worked as a mechanic at Talshahor Railway Factory, shone in the mind of old Quddus Miah. After discussing with the sons, he decided to take treatment at an eye Ashuganj for a long time. camp organized by Dutch-Bangla Bank. Then a lot of time has passed away. In the year of 2019, Later, on a certain day he attended the eye camp Quddus Mia was eighty years old. He has made his leisure organized by Dutch-Bangla Bank and after preliminary life enjoyable by- grumping with his grandchildren, going examination the experienced surgeons completed a to the mosque to perform the prayers five times in a day, successfully cataract operation on his eye. Quddus Miah is chatting with same age people and so on. very happy to get his eyesight back. Now, he can move all At the mid part of 2019, he faced a problem- he started over the place including mosque to perform his prayer, as to feel haziness in his eyes. At the initial stage, he did before. A few of many memorable incidents and illustrations of the impact of DBBL Smile Brighter program for the poor cleft-lip boys and girls are described here under:

‡VuvUKvUv hZUv bv ¯^v¯’¨MZ mgm¨v Zvi †P‡q †ekx mvgvwRK cÖwZeÜKZv| †VuvUKvUv †Q‡j‡g‡q‡`i covïbv Pvwj‡q hvIqv, mvgvwRK AvPvi Abyôv‡b †hvM`vb Kiv wKsev we‡q †`qv BZ¨vw` bvbvwea †ÿ‡Î cÖwZeÜKZvi m¤§yLxb n‡Z nq| G Ae¯’v we‡ePbv K‡i-WvP&-evsjv e¨vsK cøvw÷K mvR©vixi gva¨‡g wPwKrmv cÖ`vb K‡i †VuvUKvUv †Q‡j‡g‡q‡`i gy‡L nvwm wdwi‡q Avb‡Z 2003 mvj †_‡K Ó¯§vBj eªvBUviÓ bv‡g GKwU Abb¨ mvaviY wPwKrmv Kg©m~wP Pvwj‡q Avm‡Q| G Kg©m~Pxi gva¨‡g 2020 mvj ch©šÍ 6,877 Rb `wi`ª †VuvUKvUv †Q‡j‡g‡q‡`i gy‡Li ¯^vfvweK nvwm wdwi‡q G‡b mgv‡Ri g~j †¯ªv‡Z GKvZ¥ Kiv n‡q‡Q| Zv‡`i GB ¯^vfvweK Rxe‡bi mn‡hvMx n‡Z †c‡i WvP&-evsjv e¨vsK AvR Mwe©Z| Amnvq wcZvgvZvi Ggwb GKRb wkïi ¯^vfvweK Rxe‡b wd‡i Avmvi Kvwnbx GLv‡b Zz‡j aiv n‡jvt DBBL Smile Brighter program Cleft-lip is far more a social setback than a health problem. Boys and girls cursed with cleft-lips face numerous problems in everyday life ranging from disruption of formal education, attending social ceremonies and impediment at the time of getting married. Considering the gravity of the situation, DBBL has taken the initiative to bring back smile on the face of the boys and girls with cleft-lip through plastic surgery at free of cost since 2003 under the banner “Smile Brighter”. More than 6,877 numbers of poor cleft-lipped boys and girls have so far been successfully operated across the country till 2020 bringing them under the main-stream of the society. Dutch-Bangla Bank feels proud to assist the victims. Such a story of a cleft-lip child who is now getting normal life is mentioned here: mdj cøvw÷K mvR©vixi ci dvwiqv GLb Avi cÖwZeÜx bq mšÍv‡bi jvjb-cvj‡bi ci mvsmvwiK KvRKg© mym¤úbœ Ki‡Z wM‡q P¤úv †eMg‡K K‡Vvi cwikÖg Ki‡Z nZ| ïaygvÎ mšÍvb‡`i gy‡Li w`‡K ZvwK‡q ¯^vgx, wZb ‡g‡q I GK †Q‡j wb‡q P¤úv †eM‡gi msmvi| wK‡kviMÄ †Rjvi GB K‡Vvi cwikÖg‡K nvwm gy‡L †g‡b wb‡jI dvwiqvi Rb¨ wKQz Ki‡Z bv KwUqv`x _vbvi kÖx‡gvnbxnvÇv bvgK GK cÖZ¨šÍ MÖv‡g Zvi evox| mšÍvb cvivi Kó cÖwZwbqZ Zv‡K Zvov K‡i ‡eivw”Qj| jvjb-cvjb mn hveZxq mvsmvwiK KvR-Kg© wZwb GKvB K‡i _v‡Kb | cÖ_g w`‡K wKQzUv Kó n‡jI ax‡i ax‡i wZwb Zv fvjfv‡eB mvg‡j wb‡qwQ‡jb| B‡Zvg‡a¨ dvwiqvi eqm cÖvq 15 gvm n‡q †M‡Q wKš‘ GL‡bv †m K_v ejv ïiæ wKš‘ PZz_© mšÍvb A_©vr dvwiqv Av³v‡ii R‡b¥i ci me wnmve-wbKvk cv‡ë K‡iwb| KviY, Zvjy KvUv wkïiv K_v ej‡Z cv‡ibv, Avi K_v ej‡jI -Zv hvq| KviY, ‡m †VuvU I Zvjy KvUv mgm¨v wb‡q R‡b¥‡Q| GKwU mvaviY wkïi ¯úó nq bv| hw` Acv‡ik‡bi gva¨‡g dvwiqvi KvUv-Zvjy †Rvov jvMv‡bv jvjb-cvjb Avi †VuvU I Zvjy KvUv mgm¨v wb‡q Rb¥v‡bv wkïi jvjb-cvj‡bi hvq, Z‡eB †m ax‡i ax‡i K_v ej‡Z cvi‡e| ZvB dvwiqvi Acv‡ikb g‡a¨ we¯Íi dvivK | mvaviYZ †VuvU I Zvjy KvUv mgm¨v wb‡q Rb¥v‡bv wkï‡`i Kiv‡bvUv AZ¨šÍ Riæix n‡q `uvovq| wKš‘ A‡_©i Afv‡e ‡mUv m¤¢e nw”Qjbv| Lvevi LvIqv‡bv LyeB KwVb KvR| KviY, Zvjy KvUv _vKvi Ki‡Y Giv Lvevi †Kbbv P¤úv †eM‡gi ¯^vgx gwnmDwÏb GKRb A‡Uv PvjK| mvivw`b A‡Uv ‡L‡Z †M‡j Zv Zv‡`i k^vmbvjx‡Z Xz‡K hvq| †h‡nZz k^vmbvjx‡Z wKQz Xy‡K Pvwj‡q wZwb hv Avq K‡ib Zv w`‡q msmv‡ii Riæix cÖ‡qvRb ¸‡jv ‡gUv‡ZB †M‡j k^vm-cÖk^vm ‡bIqv hvq bv, †m‡nZz Lvevi LvIqvi cÖwZ Zv‡`i g‡a¨ Zv‡`i‡K wngwmg †L‡Z nq| ZvB dvwiqvi Acv‡ik‡bi UvKv †hvMvo Kiv GKai‡bi Abxnv KvR K‡i| ZvB G‡`i‡K Lvevi LvIqv‡Z †M‡j A‡bK Zv‡`i c‡ÿ cÖvq Am¤¢eB ejv P‡j| Zvn‡j wK dvwiqv GKRb cÖwZeÜx n‡qB †eM †c‡Z nq| dvwiqvi †ejvqI Gi e¨wZµg nqwb| dvwiqv I evKx wZb GB c„w_ex‡Z †eu‡P _vK‡e ? †m wK mevi KiæYvi cvÎ n‡qB _vK‡e? GiKg

Acv‡ik‡bi Av‡M dvwiqv Av³vi Acv‡ik‡bi c‡i dvwiqv Av³vi

ANNUAL REPORT 2020 291 A‡bK cÖkœ P¤úv †eM‡gi g‡b NyicvK †L‡Z _v‡K| Avi mšÍv‡bi fwel¨‡Zi children, she accepted this hard work with a smile. But, K_v †f‡e GKai‡bi nZvkv me mgq Zv‡K Av”Qbœ K‡i iv‡L| the pain of not being able to do anything for Faria was constantly haunting her. GKw`b dvwiqvi evev gwnmDwÏb A‡Uv Pvjv‡bvi mgq GKwU wjd‡jU cvq, †hwU‡Z D‡jøL wQj †h, WvP&-evsjv e¨vsK `wi`ª I Avw_©Kfv‡e A¯^”Qj wcZv- Faria is already about 15 months old but she has not gvZvi †VuvU I Zvjy KvUv †Q‡j‡g‡q‡`i webvg~‡j¨ cøvw÷K mvR©vix e¨e¯’v MÖnY started talking yet. Generally, cleft palate children cannot K‡i‡Q Ges AvMÖnx AwffveK‡`i‡K Zv‡`i †Q‡j-‡g‡q‡`i bvg †iwR‡óªkb speak. In some cases if they can, their pronunciation may Ki‡Z ejv n‡q‡Q| gwnmDwÏb `ªæZ evox wd‡i Av‡mb Ges Zvi ¯¿x P¤úv not clear. However, Faria will be able to speak, if her cleft †eMg‡K welqwU Ly‡j e‡jb| LeiwU ï‡b Avb‡›` P¤úv †eM‡gi †Pv‡L Rj P‡j palate problem can be repaired through plastic surgery. Av‡m| wZwb Zvi ¯^vgx‡K `ªæZ dvwiqvi bvg †iwR‡óªkb Ki‡Z e‡jb| Ae‡k‡l So it became very essential to arrange that operation Av‡m Lykxi gv‡n›`ª ÿY| ‡h ÿYwUi Rb¨ P¤úv †eMg GZ w`b a‡i A‡cÿv K‡i‡Qb| AvR Zvi A‡cÿvi cvjv †kl n‡q‡Q| A_©vr WvP&-evsjv e¨vs‡Ki for Faria. But it was not happened due to lack of money. Õ¯§vBj eªvBUviÕ ‡cÖvMÖvg †_‡K Zvi †g‡qi Acv‡ik‡bi ZvwiL †`Iqv n‡q‡Q| Because Champa's husband Mohisuddin is an auto driver. By the lower income of her husband they can hardly fulfill AZtci, WvP&-evsjv e¨vs‡Ki A_©vq‡b dvwiqvi ‡VuvU I Zvjy-KvUv Acv‡i‡kb their daily needs. So, it is almost impossible for them to mdjfv‡e m¤úbœ n‡q‡Q| dvwiqv GLb m¤ú~Y© my¯’| †m GLb Avi cÖwZeÜx bq| arrange money for Faria's operation. Such condition arise question in Champa's mind- Will Faria survive on this After successful plastic surgery, Faria is no earth as a disabled? Will she be the object of everyone's longer a disable compassion? Thinking about the uncertain future of her daughter, a frustration always concealed her. Champa Begum belongs to a family with her husband, three daughters and one son. Her husband One day, Mohisuddin got a leaflet stating that Dutch- is an auto driver. They live in a remote village called Bangla Bank has been providing free cleft-lip and cleft- Shreemohanihadda of Kotiadi police station in Kishoreganj palate surgery for the underprivileged children whose district. Champa Begum does all the household works parents are unable to afford it, and asked interested alone, including child rearing. In the beginning, it was parents to register their children's names. Mohisuddin little bit difficult for her to manage all this things but quickly returned home and shared the matter with his gradually she handled it well. After the birth of the fourth wife Champa Begum. Champa Begum's eyes filled with child, Faria Aktar, all reckoning was reversed. Because tears when she heard the news. She told her husband to Faria was born with cleft lip and palate problem. It is a enlist Faria's name. myriad different to nurture a normal baby and a baby with cleft lip and palate. Feeding a baby born with cleft Finally, the most expected moment appears in their life. lip and palate is a difficult task, because food grain It is the moment, for which Champa Begum has been often enters into the respiratory passage when they eat. waiting for so long. Today her waiting turn is over. Because Since they cannot breathe when something enters the she has received a schedule from Smile-Brighter Program respiratory passage, they have a reluctance to eat. Faria of Dutch-Bangla Bank. Eventually, Faria's cleft lip and was no exception. After nurturing Faria and her other palate surgery has been successfully completed with the three children, Champa Begum had to complete her support of Dutch-Bangla Bank. Now, Faria is completely other household works. Considering the wellbeing of her fit. She is no longer a cleft disabled. economy and financial market

ANNUAL REPORT 2020 293

ECONOMY AND FINANCIAL MARKET GLOBAL ECONOMIC OUTLOOK 2.0 percent in 2018 mainly due to lower commodity prices. Following weaker economic activity, inflation is expected Global economic growth decelerated in 2019 compared to to dip further to 0.7 percent in 2020. It is projected to pick that of 2018 as governments worldwide have imposed up to 1.3 percent in 2021, thanks to forecasted economic widespread closures, lock-down, isolation and restrictions activity. Inflation in emerging market and developing of movement of domestic and international transports in economies slightly increased to 5.1 percent in 2019 from order to contain the spread of the corona virus. As a result, 4.9 percent in 2018; while it is projected to decline to 5.0 the COVID-19 pandemic has triggered the deepest global percent in 2020 and 4.2 percent in 2021. recession since World War II and global economic activity is projected to contract sharply by -3.5 percent in 2020. World trade volume growth declined considerably to just However, growth is anticipated to pick up to 5.5 percent in 1.0 percent in 2019 from 3.9 percent in 2018. It is projected 2021 subject to effective implementation of monetary and at -9.6 percent in 2020 reflecting weaker demand for fiscal stimulus packages, restoration of normal economic goods and services and at 8.1 percent in 2021. activities and multiple vaccine approvals and the launch The growth rate of imports for advanced economies of vaccination in some countries in December have raised declined from 3.6 percent in 2018 to 1.7 percent in 2019. hopes of an eventual end to the pandemic. In advanced Projections suggest that imports will suffer a deep economies, growth declined to 1.6 percent in 2019 from contraction of -11.5 percent in 2020 and will experience 2.2 percent in 2018 and it is projected to decline to -4.9 a rise of 7.3 percent in 2021. In emerging markets and percent in 2020 and increase to 4.3 percent in 2021. In developing economies, growth rate of imports decreased emerging market and developing economies, growth is significantly from 5.0 percent in 2018 to -0.6 percent in forecasted to decline to -2.4 percent in 2020 and then pick 2019. It is projected to be -9.4 percent in 2020 and at 11.0 up to 6.3 percent in 2021 percent in 2021. Exports growth of advanced economies In the United States, growth declined to 2.2 percent in decreased to 1.3 percent in 2019 from 3.5 percent in 2018. It is projected to be -11.6 percent in 2020 and at 7.0 2019 from 3.0 percent in 2018. It is projected to further percent in 2021. Exports growth of emerging markets and decrease to -3.4 percent in 2020 and rebound to 5.1 percent developing economies declined to 0.9 percent in 2019 from in 2021. In the euro area, growth decreased to 1.3 percent 4.1 percent in 2018. It is expected that exports of emerging in 2019 from 1.8 percent in 2018 and is projected to drop markets and developing economies will experience growth further to -7.2 percent in 2020 and bounce back to 4.2 of -7.7 percent in 2020 and 9.5 percent in 2021. percent in 2021. However, growth in the United Kingdom increased to 1.4 percent in 2019 from 1.3 percent in 2018 Risks to the Outlook and is projected to decline to -10.0 percent in 2020. Japan’s Exceptional uncertainty surrounds the baseline projection. economy is set to shrink by -5.1 percent in 2020. Although new restrictions following the surge in In China, growth decreased to 6.0 percent in 2019 from infections (particularly in Europe) suggest growth could 6.7 percent in 2018. China's growth is projected to slow be weaker than projected in early 2021, other factors pull the distribution of risks in the opposite direction. Beyond down further to 2.3 percent in 2020 and then pick up to 8.1 the pandemic, the December agreement on the terms of percent in 2021. India's economic growth also decelerated the United Kingdom’s exit from the European Union has from 6.1 percent in 2018 to 4.2 percent in 2019 and is eliminated a key downside risk (i.e., a “no-deal Brexit”). projected to decrease further to -8.0 percent in 2020 and then pick up to 11.5 percent in 2021. • On the upside, further favorable news on vaccine manufacture (including on those under Inflation is expected to remain low in 2020 and 2021 development in emerging market economies), for both advanced and emerging market economies distribution, and effectiveness of therapies could compared with historical averages. In advanced increase expectations of a faster end to the economies, inflation declined to 1.4 percent in 2019 from pandemic than assumed in the baseline, boosting

ANNUAL REPORT 2020 295 confidence among firms and households. accelerates sooner in advance economies. This would generate stronger consumption, The increase is therefore more pronounced in investment, and employment recoveries, advanced economies in 2021 and in emerging with firms hiring and expanding capacity in market economies in 2022. anticipation of rising demand. The resulting • In the downside scenario, vaccine rollout is income gains would support higher and more assumed to go less smoothly than in the front-loaded spending than projected. Global baseline, with widespread availability occurring growth would be stronger than in the baseline. later in both advanced and emerging economies More fiscal policy support than assumed in the and with more resistance to take-up even after baseline, with favorable spillover effects for vaccines become widely available. With global trading partners, would further lift global activity. activity weaker, emerging vulnerable economies • On the downside, growth could turn out weaker are also assumed to see mild increases in risk than in the baseline if the virus surge (including premia. However, some emerging and most from new variants) proves difficult to contain, advanced economy central banks are assumed infections and deaths mount rapidly before to be able to prevent tightening in financial vaccines are widely available, and voluntary conditions. Global activity falls below baseline distancing or lockdowns prove stronger than by roughly ¾ percent in 2021 but starts to anticipated. Slower-than-anticipated progress return toward baseline in 2022. Again, the on medical interventions could dampen hopes deviation from the baseline is more pronounced of a relatively quick exit from the pandemic in advanced economies in 2021 and in emerging and weaken confidence. Specifically, vaccine market economies in 2022. rollout could suffer delays, widespread hesitancy could hamper vaccine take-up, vaccines could Bangladesh Economic Outlook deliver shorter-lived immunity than anticipated, Bangladesh economy faced COVID-19 pandemic-induced and advances on therapies could be limited. challenges in all economic sectors, but managed a 5.24 Intensifying social unrest, including due to higher percent real GDP growth rate in FY20, though significantly inequality and unequal access to vaccines and lower than a record high of 8.15 percent growth rate therapies, could further complicate the recovery. in FY19. The economy of Bangladesh witnessed an Moreover, if policy support is withdrawn before impressive GDP growth trend in last decade, maintaining the recovery takes firm root, bankruptcies of more than 7.0 percent yearly growth during FY16-FY19, viable but illiquid firms could mount, leading breaking the phase of yearly 7.0 percent growth mark to further employment and income losses. in FY16. The contraction in GDP for FY20 stemmed The ensuing tighter financial conditions could mostly from the supply-side shocks, suffered mainly increase rollover risks for vulnerable borrowers, by pandemic induced disturbances in the industry sector, add to the already large number of economies in particularly by substantial production loss in large and debt distress and increase insolvencies among medium scale manufacturing output. While the industry sector had been contributing to GDP with double-digit corporate and households. growth rates since FY16, the growth rate in this sector Scenario analysis sharply came down to 6.48 percent in FY20. Some of these aspects are explored in two alternative The service sector, which also impacted by the pandemic scenarios using the IMF’s G20 Model. Both scenarios are but less severe than the industry sector, grew by 5.32 focused on the key uncertainties underlying the outlook: percent in FY20 against 6.78 percent in FY19 as most incidence of COVID infections and efficacy of vaccine of the leading sub-sector activities such as wholesale rollout. and retail trade activities, transport, storage and communication, financial intermediations, education, • In the upside scenario, the level of global output real estate, renting and business activities waned increases above baseline by roughly ¾ percent due to lockdown measures. On the other hand, the in 2021, widening to almost 1 percent above agriculture sector maintained solid growth even amid baseline in 2022. Although vaccine rollout is the COVID period on the back of the healthy production assumed to occur earlier in the upside, advanced of most of the cereal and non-cereal crops aided by economies still receive vaccines before many the timely availability of inputs, favorable weather emerging economies and, consequently, activity conditions at the time of cultivation and harvesting. In the backdrop of the COVID-19 pandemic, the sector-wise performance for the first quarter of FY21 government of Bangladesh and BB took a series of timely amid a dreadful situation as the pandemic continues. The and appropriate initiatives such as stimulus packages growth targets indicate that growth will recover at a faster of more than BDT 1.21 trillion, policy relaxations, pace in FY21 and will increase gradually. The economy low cost refinance schemes, etc., among others, to is likely to maintain the targeted growth path with an support weaker segments of the economy and to expectation that a second wave of the pandemic would not ensure sufficient liquidity in the banking system. Aided harm the economy seriously. Besides, an advanced stage by those prompt policy initiatives, the economic recovery of vaccine development would have a positive impact on of Bangladesh remained at the forefront among the neighboring South Asian economies and attained a 5.2 the global as well as domestic economy. percent growth rate in FY20 while growth rates of India, Sectoral Share of GDP Pakistan, and Sri-Lanka are expected to be negative in 2020. Although growth rate moderated due to COVID-19 pandemic in FY20, the industry sector continued to Industry and service sector activities are recovering aided by government and BB's continued supportive achieve the highest growth followed by services sector policy measures to boost the sectoral performances. and agriculture sector, which was 6.48%, 5.32% and 3.11% The industry sector has staged a magnificent respectively compared to 12.67%, 6.78% and 3.92% in FY 19. turnaround from the pandemic deadlock with faster- The sectoral decomposition of the share of GDP shows than-expected growth of Quantum Index of Industrial that the service sector continued to achieve the largest Production (QIIP) at 7.94 percent in Q1FY21. Mostly share of GDP followed by industry and agriculture sector. manufacturing sector led by wearing apparel, textile, pharmaceuticals, non-metallic mineral product, leather The services sectors’ share in GDP stood at 51.3 percent in and related products and chemical production spurred FY20 as compared to 51.4 percent in the preceding year. the QIIP. Besides, service sector related activities also Among the subsectors of service, the shares of Wholesale climbed out from their pandemic depths. Cargo handled and retail trade, repair of motor vehicles, motorcycles and through Chattogram port started increasing sharply after personal and household goods; financial intermediations; May 2020 and came back to the pre-pandemic level in real estate, renting and business activities; and public November 2020. Private sector credit growth in trade and administration and defence remained same at 13.9, 3.4, 6.1 commerce and consumer finance increased significantly and 3.7 percent in FY20 respectively. On the other hand, during the first quarter of FY21. the share of hotel and restaurants; transport, storage and communication; education; and health and social works The expected progress in the implementation of all slightly increased to 0.8, 11.1, 2.5 and 2.0 percent in FY20 supportive policy initiatives helped domestic demand from 0.7, 11.0, 2.4 and 1.9 percent in FY19. to maintain at 5.05 percent growth in FY20 of which The contribution of the industry sector to GDP increased four-fifth of the demand was contributed by private to 35.4 percent in FY20 from 35.0 percent in FY19. Among investment and consumption. Domestic demand revived the subsectors of industry, the shares of manufacturing; further as supported by more than 37.6 percent growth and construction increased slightly to 24.2, and 7.9 percent in inflows of workers' remittances during July – December in FY20 from 24.1, and 7.6 percent in FY19 respectively. 2020. Though the growth rate of import demand However, the share of mining and quarrying; and remained in negative territory (-8.84 percent during electricity, gas and water supply subsectors remained July – November 2020 and -5.24 percent during July same at 1.7 and 1.6 percent respectively during the same – November 2019), external demand gained momentum period. with acceleration in export growth nearing 1.0 percent during July – November 2020 compared to a negative Contribution of agriculture sector to GDP has been 8.22 percent growth at the same period of last year. declining and shifting towards service and industry sector as per development paradigm during the last several Looking forward, the government has set a 7.4 percent years. The share of agriculture slightly went down to 13.4 real GDP growth target for FY21 weighing on the rebound percent in FY20 from 13.7 percent in FY19. Among the in the economic situation aided by continued policy subsectors of the agriculture sector, share of agriculture initiatives such as stimulus packages, low cost and forestry subsector to GDP declined to 9.8 percent in refinance schemes, and policy relaxations, among others. FY20 from 10.2 percent in FY19, while the share of fishing Bangladesh economy has recovered faster reflected in subsector remained same at 3.5 percent in FY20.

ANNUAL REPORT 2020 297 GDP based on Expenditure Savings and Investment Looking at the expenditure-based GDP at current market Gross Domestic Savings (GDSs) at current market price, price in FY20, there was a statistical discrepancy of BDT stood at 25.3 percent of GDP in FY20, higher than 25.0 124.7 billion between gross domestic expenditure (GDE) percent of GDP in the previous fiscal year. Gross National and gross domestic product (GDP). In FY19, the amount of Savings (GNSs) increased to 30.1 percent of GDP in FY20 statistical discrepancy was BDT 110.4 billion . from 29.5 percent in FY19. Gross Domestic Expenditure (GDE) reflects the aggregate Investment as a percent of GDP stood at 31.8 in FY20 demand originating from domestic economic activities, from 31.6 in FY19. Private and public investment to GDP measured as the sum of domestic consumption and ratio slightly increased to 23.6 and 8.1 percent in FY20 investment, along with resource balance (exports- from 23.5 and 8.0 percent respectively in FY19. imports). Gross Domestic Savings (GDSs) and Gross National Domestic demand was estimated at BDT 29766.6 billion Savings (GNS) at current market prices increased by 11.2 at current market prices in FY20 which was 9.9 percent and 12.3 percent respectively in FY20 compared to FY19. higher than that of FY19. Net export was estimated at Domestic savings-investment gap as percent of GDP BDT (-) 1678.1 billion in FY20. reduced to 6.4 percent in FY20 from 6.6 percent in FY19. Total consumption expenditure and trade deficit External Sector accounted for 74.4 percent and 6.0 percent of GDE In FY20, external sector of Bangladesh has been affected respectively in FY20. In nominal terms, investment seriously due to the COVID-19 pandemic. The current increased by 10.6 percent while consumption increased by account deficit stood at 1.5 percent of GDP in FY20 which 9.6 percent during the same period. was 1.7 percent of GDP in FY19. Nominal exchange rate Consumer Prices in Bangladesh stood at BDT 84.78 as of end June 2020 compared to BDT The twelve month average general Consumer Price Index 84.03 as of end June 2019 (period average). Foreign exchange reserve stood at USD 36.0 billion at the end (CPI) inflation was recorded 5.7 percent in June 2020 with of June 2020. However, the reserve coverage of imports gradually increasing by 17 basis points during FY20, which decreased but remains broadly adequate at around 6.4 exceeded the targeted ceiling of 5.5 percent. This higher months of prospective imports. general CPI inflation was the result of higher non- food inflation on the back of higher remittance inflows Outstanding external debt stock of Bangladesh increased and disruption of supply chains due to the COVID-19 at the end of FY20. The outstanding external debt to pandemic. Food inflation remained almost similar in June GDP ratio increased to 13.4 percent in FY20 from 12.7 2020 though non-food inflation increased compared to percent in FY19. the same month of the previous fiscal year. With minor fluctuations the food inflation remained unchanged at Balance of Payment 5.5 percent in June 2020 as in June 2019, while non-food Comparatively lower export growth than import growth inflation increased to 5.9 percent in June 2020 from 5.4 led to the increase in trade deficit in FY20 compared to percent in June 2019. The non-food and non-energy ‘core’ the FY19.The trade deficit grew by 12.8 percent to USD component of CPI inflation also showed fluctuations 17861 million during FY20 compared to the deficit of USD throughout the fiscal year and stood at 5.8 percent in June 15835 million in FY19. The deficit in both services account 2020 from 5.5 percent in June 2019, indicating a rising and primary income decreased to USD 2987 million (6.0 inflationary pressure. percent) and USD 2776 million (7.3 percent) respectively in FY20. However, secondary income significantly increased Looking forward, the government has projected CPI by 11.1 percent from USD 16903 million in FY19 to USD at 5.4% for FY21. According to the MPS for FY21, a 18775 million in FY20 due to dramatically increase in moderate and tolerable single-digit average CPI inflation private transfers mostly workers’ remittances. As a result, was projected. The slow recovery in the international the deficit of current account declined to USD 4849 million commodity and energy prices signaled the enervated in FY20 which was USD 5102 million in FY19. The balance in inflationary pressure from external sources. Besides, the capital account and financial account increased to USD food inflation is expected to decline in the coming 256 million and USD 7658 million respectively in FY20 months with increased domestic production of crop from USD 239 million and USD 5907 million respectively and non-crop agriculture, which was reflected already in FY19. The net outcome of all these made the overall in softened headline inflation in November and balance a surplus of USD 3655 million in FY20 compared to December 2020 driven by decreased food inflation. a surplus of USD 179 million in FY19. Foreign Direct Investment (FDI) has played a positive role Jute goods (excluding carpets): Export earnings from for developing the Bangladesh economy. FDI is limited but jute goods increased by 6.9 percent to USD 752.5 million it has various uses in the different sector of our economy. in FY20 from USD 703.8 million in FY19. As a potential source of foreign exchange reserves, FDI needs to be encouraged. FDI has been emphasized by Raw jute: In FY20, raw jute increased by 15.5 percent to the Government in its 7th five year plan and has USD 129.9 million compared to USD 112.5 million in FY19. undertaken various policies for adequate incentives in Export Development Fund (EDF) attracting foreign investors. However, net FDI inflow decreased significantly by 42.5 percent to USD 1510 The EDF commenced its operation in 1989 with the million in FY20. On the other hand, portfolio investment participation of International Development Association increased significantly by 61.4 percent to USD 276 million (IDA) and Government of Bangladesh (GOB) having an in FY20 compared to USD 171 of preceding year. initial fund amounting to USD 30.16 million to provide foreign exchange refinance facilities to boost up export Merchandise exports (fob) decreased by 17.1 percent to sector. As export posted a significant growth, Bangladesh USD 32830 million and imports (fob) also decreased by Bank enhanced the volume of the EDF fund from time 8.6 percent to USD 50691 million in FY20. to time. On 7 April, 2020 the fund was further enhanced to USD 5.00 billion from 3.50 billion to facilitate export Exports trade due to overcome the COVID-19 related disruptions in export business. Due to COVID-19, export earnings drastically decreased by 16.9 percent to USD 33674.1 million in FY20 from To overcome the loss of export due to recent COVID-19 USD 40535.0 million in FY19 . Readymade Garments related pandemic/ disruption, a number of policies (woven garments and knitwear products) continued to have been declared by Bangladesh Bank in line with occupy a lion share (above four fifths) of the total export. Government incentive packages. Important policy support includes lowering the EDF interest rate to 2.0 percent Ready Made Garments (woven and knitwear): Woven from USD LIBOR+1.50%. and knitwear products, which accounts for about 83.0 percent of total export earnings, registered a decrease A borrower-wise maximum exposure limit of EDF is in receipts from USD 34133.3 million in FY19 to USD followed to streamline the credit discipline. At present, 27949.2 million in FY20. Woven and Knitwear products maximum USD 30.00 million is allowed to a single party showed a sharp decrease of 18.6 and 17.6 percent against member mills of BGMEA and BTMA. However, respectively in FY20 compared to FY19. this limit is maximum USD 20.00 million for knitwear, USD 20.00 million for leather goods & footwear and 15.00 Leather: During FY20, export earnings from leather and million for ceramic wares, dyed yarn and USD 2.00 million leather products decreased by 22.6 percent to USD 318.9 for accessories and packaging and USD 1.00 million for million in FY20 from USD 411.9 million in FY19. plastic goods manufacturers and USD 0.50 million for Frozen food: Earnings from frozen foods comprises exporters irrespective of sectors. mainly of shrimps, decreased during FY20. Shrimp and In general, the reimbursement from the EDF is initially fish valued at USD 407.9 million were exported in made for a tenor of 180 days with a provision for FY20, against USD 425.0 million in FY19. further extension up to 90 days, if requires for delay in Footwear: Export earnings from footwear products stood repatriation of related export proceeds of the exporter at USD 755.9 million in FY20 from USD 879.4 million in concerned. But for pandemic situation it can be extended FY19. for further 180 days from the maturity date. On revolving basis, the total disbursement from EDF in Chemical Products: Chemical products export earning FY20 stood at USD 6.18 billion which was USD 6.08 stood at USD 198.9 million in FY20 against USD 205.2 billion in FY19. The outstanding balance at the end of million in FY19. June, 2020 stood at USD 4.45 billion which was USD 3.29 Tea: During FY20 export earnings from tea increased by billion in corresponding time of the previous year. A total 10.6 percent compared to the previous fiscal year’s growth number of 56 banks availed EDF refinancing facilities and amounting USD 3.1 million in FY 20 from USD 2.8 million the total number of borrowers was 1348 at the end of in FY19 June, 2020.

ANNUAL REPORT 2020 299 Workers' Remittance exchange reserve of USD 41.08 billion at the end of November 2020 which can approximately meet more than Inward remittances from Bangladeshi nationals working 8 months of import coverage. abroad continued to play a vital role in strengthening the current account balance. Remittance receipts increased GOVERNMENT POLICY TOWARDS MACRO by 10.9 percent to USD 18205.01 million in FY20 from USD ECONOMIC STABILITY AND SUSTAINABLE 16419.63 million in FY19. GROWTH

Due to government incentive, simplification of sending Public Finance remittances in formal channel and different supportive Attaining SDGs and their targets had been the spotlight policy regarding remittances helped expatriates to of government’s fiscal policy in FY20. The FY20 was increase remittance inflows again. To facilitate the formal the terminal year of 7th Five Year Plan, hence the budget channel, Bangladesh Bank reduced the security deposit also emphasized on the implementation of the plan. The requirement for the exchange houses abroad to establish budget aims to optimally mobilize public resources to drawing arrangement with local banks. Presently, attain sustainable and inclusive growth. To this end in the commercial banks have 1312 drawing arrangements with national budget for FY20, government proposed an overall more than 334 exchange houses all over the world for deficit (including grants) of 4.8 percent of GDP. However, collecting remittances. this deficit increased to 5.3 percent of GDP in the revised budget for FY20, which was 5.4 percent of GDP in FY19. During FY20, the highest amount (22.06 percent) of The deficit was largely financed by domestic sources, remittances came from Saudi Arabia followed by the contribution of which decreased slightly to 3.5 percent United Arab Emirates (UAE) (13.58 percent), United States of GDP in FY20 from 4.2 percent of GDP in FY19. The of America (13.20 percent), Kuwait (7.54 percent), Government's financing from banking system increased United Kingdom (7.50 percent), Oman (6.81 percent) and from 1.4 percent of GDP in FY19 to 2.9 percent of GDP in Malaysia (6.76 percent). All other countries contributed to FY20, while financing from non-bank sources decreased 22.55 percent of total remittance over the same period. from 2.8 percent of GDP to 0.5 percent of GDP over the Foreign Exchange Reserves same period. Foreign Exchange Reserves is another significant part for Revenue Receipts stabilizing foreign exchange market. Foreign exchange In the revised budget for FY20, total revenue receipts reserves are the foreign assets held or controlled by the targeted at BDT 3480.7 billion , which was 7.9 percent central banks. BB's gross foreign reserves comprises major lower than the initial target. It was 38.2 percent higher currencies (G-7), gold and Special Drawing Rights (SDR). than the actual revenue receipts in FY19.The revised target The reserves are generally used to finance the balance of for tax revenue collection constituted 89.9 percent of the payments imbalances or to control exchange rates. It is an total revenue receipts, which was 38.6 percent higher important indicator for gauging an economies’ ability to than that of the actual tax collected in FY19. Similarly, the absorb external shock. revised target for non-tax revenue collection for FY20 was Foreign Exchange Reserves stood at USD 36.04 billion in 35.0 percent higher than the actual collection for that of FY20, which was USD 32.72 billion in FY19. The current FY19. Foreign Exchange Reserves is sufficient to pay import In the revised budget for FY20, total revenue receipts as liability of 6.4 months. percentage of targeted GDP stood at 12.4 percent which Bangladesh Bank closely monitors the foreign exchange was 9.9 percent in FY19. The target for total tax revenue market to avoid undue volatility in the exchange rate. receipts as a percentage of GDP revised at 11.2 percent in To facilitate the foreign exchange liquidity and ensure FY20 which was 8.9 percent in FY19. Similarly, total non- stability and smooth market activities, BB sold USD 0.84 tax revenue as percentage of GDP targeted at 1.2 percent billion and purchased USD 0.88 billion in local inter-bank in FY20 which was 1.0 percent in FY19. market in FY20. Expenditure Later, Strong growth in remittance inflows and positive export growth together with large financial assistance The total expenditure in the revised budget for FY20 from multinational/international institutions and amounted to BDT 5015.8 billion (17.9 percent of GDP) development partners helped to reach a record foreign which tends to be 28.1 percent higher than the actual expenditure in FY19. The operating expenditure in the growth declined in FY20 due to both supply and demand revised budget for FY20 targeted at BDT 2952.8 billion side factors owing to long and sustained worldwide (10.5 percent of GDP) which was 24.0 percent higher than lockdowns caused by COVID-19 pandemic. In the the actual operating expenditure of BDT 2381.1 billion in supply side, the economic activities, particularly in the FY19. manufacturing and service sectors remarkably declined in FY20. Similarly, both the domestic and external demand Budget Deficit and its Financing declined sharply as reflected in the growth of imports In the revised budget for FY20, total deficit (excluding (-8.6 percent) and exports (-16.9 percent) in FY20. grants) revised at BDT 1535.1 billion which was 5.5 percent Although the achievements of prime objectives were of the GDP. The domestic borrowing component of the slightly lower than the targets, the monetary policy deficit financing was BDT 973.5 billion (3.5 percent of stance and programme executed in FY20 were largely the GDP) in FY20. Of this component, BDT 824.2 billion successful in narrowing the current account deficit (2.9percent of the GDP) was bank borrowing and BDT 149.2 of BoP from USD 5.1 billion in FY19 to USD 4.9 billion in billion (0.5 percent of the GDP) was non-bank borrowing FY20 which help to excel up the growth of net foreign which was mainly through sales of national savings assets of the banking system. Most of the monetary schemes. The foreign financing component (excluding and credit aggregates also remained consistent with grants) of the budget deficit was BDT 527.1 billion (1.9 the programmed paths in FY20. Broad money (M2) percent of the GDP). growth (12.7 percent) remained very close to the target MONEY, CREDIT AND FINANCIAL MARKETS ceiling of 13.0 percent. Although credit to public sector experienced an elevated growth path as compared to its Stance and Performance of Monetary and programme, domestic credit growth remained well below Credit Policy the programme ceiling. The monetary policy stance and monetary programme Money and Credit Situation for FY20 was drawn-up with the dual objectives of maintaining price stability and supporting inclusive, To pursue the growth supportive monetary policy stance equitable, and environmentally sustainable economic and to attain the inflation target, the growth of major growth. Monetary policy stance and monetary anchor variables of the monetary and credit policy and programmes for FY20 were cautiously accommodative for programme viz. broad money (M2), reserve money and all growth support needs with the target of attaining GDP domestic credit were set to be within 13.0 percent, 12.0 growth rate at 8.2 percent alongside containing CPI-based percent and 17.4 percent respectively for FY20. Broad annual average inflation within the targeted ceiling of money actually grew closely to the programme level of 5.5 percent. 12.7 percent against the targeted 13.0 percent.

Until February of FY20, the domestic economy of Although credit to public sector as well as actual Net Bangladesh upheld its precise path of moderating Foreign Asset (NFA) growth outpaced the programme inflation and accelerating real GDP growth supported path, net domestic assets (NDA) remained well below the by the broad based economic activities. The emergence programmed level due mainly to slow growth of credit to of novel corona virus pandemic in the late December private sector, which also helped keep broad money within 2019 confounds the world to an incomprehensible halt. the programmed level. The growth in private sector credit With the confirmation of the COVID-19 outbreak locally experienced a moderating trend throughout the whole spread in March 2020, a serious impediment created on fiscal year (FY20) initially due to the banks’ adherence the achievement of the key objectives of FY20 monetary towards quality lending which was further aggravated policy - keeping annual CPI average inflation within target by the outbreak of corona virus. Therefore, private sector ceiling and attaining real GDP growth at the desired rate. credit grew by 8.6 percent against the targeted growth As a result, annual average CPI based inflation stood of 14.8 percent in FY20. The public sector credit including at 5.7 percent in FY20, slightly up from target ceiling of net credit to the government significantly grew by 53.4 FY20 and actual inflation of 5.5 percent in FY19. percent against the programmed growth of 37.7 The real GDP growth also tumbled which has been due mainly to slow growth of NBR revenue collection, provisionally estimated at 5.2 percent for FY20, subdued sale of national saving certificates while the significantly lower than the target as well as actual government spending followed an increasing trend for the growth (8.2 percent) recorded in FY19. The real GDP implementation of massive stimulus package to mitigate

ANNUAL REPORT 2020 301 the blow of corona virus pandemic. However, domestic Bank Rate credit grew moderately by 13.7 percent against the targeted 17.4 percent due to slow pace in credit to private sector, the After introduction of repo and reverse repo windows for leading contributing sector to the domestic credit. banks on November 6, 2003; the use of bank rate became very much limited. However, BB has prudently been using Income Velocity of Money bank rate mostly for providing refinance facilities to banks and penalizing them for any departure from maintenance The income velocity of money slightly decreased to of CRR as per set rules of BB. 2.04 in FY20 from 2.08 in FY19 . The income velocity of money decreased after a continued increasing trend The bank rate was fixed at 4% from 5% vide MPD circular for the previous three consecutive years, reflecting M2 No. 06, dated July 29, 2020. growth was faster than the growth of nominal income Liquidity Management Framework indicating slow pace of economic activities in spite of BB’s expansionary monetary policy measures taken to boost up BB’s current monetary policy regime is highly bonded the economy. As a result, the change of income velocity of with liquidity management especially for maintaining broad money declined by 1.92 percent in FY20 against 2.46 stability in call money rate, long-term interest rate as well percent increase in FY19. as exchange rate and for promoting economic growth alongside maintaining price stability. Through controlling Bank Credit liquidity in the banking system by using various monetary policy instruments, BB tries to keep reserve money within Outstanding bank credit (excluding foreign bills and the target path mostly for achieving price stability. inter-bank items) in FY20 rose by BDT 898.26 billion or 8.95 percent to BDT 10940.07 billion against the increase Lower than expected tax revenue generation and slow of 11.64 percent in FY19. The rise in the bank credit net sales of National Saving Certificate (NSC) forced occurred due to increasing of advances by banks while bills the government to switch borrowing from non-bank purchased and discounted by banks slightly decreased in to banks to meet up ADP related expenditure in FY20. FY20. Advances increased by BDT 964.39 billion or 9.91 As a result, credit demand in the banking system was percent in FY20 against the increase of 11.74 percent in high especially during the first half of FY20, thereby; FY19. Bills purchased and discounted decreased by BDT surplus liquid assets (in excess of CRR and SLR) with 66.13 billion or 21.63 percent in FY20 against the increase banks remained at a reasonable level during that period. of 8.40 percent in FY19. Moreover, in the backdrop of the COVID-19 outbreak, BB pursued various liquidity enhancing policy measures Bank Deposits including reduction of CRR, purchase of government Bank deposits (excluding inter-bank items) increased securities from banks and FIs, introduction of long-term by BDT 1217.84 billion or 10.61 percent to BDT 12690.99 repo facilities up to 360-day, along with the adoption of billion during FY20 against 9.89 percent increase in FY19. several refinance schemes facilitate to extend liquidity The rise in total bank deposits was shared by all kinds of in the money market. As a result, excess liquid assets (in deposits. Demand deposits increased by BDT 173.11 billion excess of CRR and SLR) of scheduled banks stood higher or 14.64 percent to BDT 1355.28 billion in FY20 against at BDT 1395.78 billion at the end of June 2020, though a 4.42 percent increase in FY19. Time deposits increased lion share of this surplus liquidity holding by the banks by BDT 991.53 billion or 10.48 percent to BDT 10454.71 remained in the form of government securities. billion in FY20 against 10.67 percent increase in FY19. Alongside BB’s ongoing expansionary policy measures, its Government deposits increased by BDT 53.2 billion or 6.43 drives of buying foreign currency from the market started percent to BDT 880.99 billion in FY20 against 9.2 percent during the last quarter of FY20 also helped restoring increase in FY19. normalcy in both the money and foreign exchange markets, stabilizing the call money rate within the corridor Credit/Deposit Ratio of the repo and reverse repo rates and keeping the BDT- The credit/deposit ratio of the scheduled banks excluding USD exchange rate competitive. the specialized banks was 0.86 at the end of June 2020 Financial Markets which was 0.88 at the end of June 2019. Marginal decrease in credit to deposit ratio indicates that deposit growth Bangladesh Bank (BB) undertook several measures during was slightly faster than the credit growth. FY20 in terms of liquidity management by easing access and transaction norms, and maintained stability in the Call Money Market Activities in FY20 foreign exchange market by keeping BDTUSD exchange rate competitive, while affirmed vigilant surveillances The money market in Bangladesh experienced a moderate to secure the integrity of financial markets. BB has used volatility in FY20. Addressing the demand of banks, on its available policy tools to ensure adequate liquidity, day-today basis, BB meticulously used government debt normal functioning of the markets and the stability of the management and open market operations (OMOs) tools financial system in the face of the interruption caused by to balance the call money market. BB’s scrupulous policy COVID-19. measures help banks to maintain liquidity contributing stable weighted average interest rate in the call money Financial Market Highlights in FY20 market ranging from 3.46 percent to 5.14 percent. During FY20, the volume of interbank call money decreased by • Slower deposit growth along with strong government borrowings from banks lead to BDT 57.99 billion, which was 4.67 percent lower comparing some liquidity constraint in the banking system FY19. in FY20, while demand for liquidity increased Repo Auctions held in FY20 substantially. Consequently call money market rate went through some upward pressure and Bangladesh Bank usually conducts various types of Repo picked up to 5.1 percent in March 2020 from 4.5 (overnight Repo, Term Repo, Liquidity Support Facility percent in December 2019. (LSF) and special Repo) auctions to provide overnight • To improve the liquidity situation, BB set up a liquidity facility to banks at a pre-determined and auction downward modification of its Cash Reserve based rates as against the collateral market and face Requirement (CRR) and repo rate from 5.5 value of government treasury bills, bonds and Bangladesh percent to 5.0 percent and from 6.0 percent to Bank Bills to maintain their liquidity requirements. The 5.75 percent respectively in March 2020. rates of interest for overnight Repo, Special Repo and LSF were 5.25 percent, 8.25 percent and 5.25 percent • In the backdrop of COVID-19 outbreak, BB further respectively in FY20. cut its CRR and repo rate from 5.0 percent to 4.0 percent and 5.75 percent to 5.25 percent Under repo programme, the repayment duration is respectively in April 2020, which lead to a between 1-day to 360-days as per BB regulations. To significant rise in the liquidity in the banking fulfill periodical need of liquidity, term repo for 7, 14 and system, despite a falling in deposit growth. 28 days were introduced on June 06, 2018. Additionally, Consequently call money market rate witnessed 360 days term repo was introduced on May 13, 2020 to downward movement from April and onward in support the longer term liquidity need, though no bid was FY20. The reverse repo rate remained unchanged received against this instrument in FY20. Term repo at 4.75 percent in FY20. rate is fixed through auction competitive bids taking into • BB has introduced 360 days term repo in FY20 account overnight repo rate as benchmark. A total of 171 to support the longer term liquidity needs in the Repo auctions were held during FY20. In all 5841 bids for money market. BDT 5478.44 billion were received of which all bids were accepted. During FY19 total 635 bids for BDT 1135.40 billion • In FY20, BB announced to buy back government were received and all bids were accepted. The volume of securities from the secondary market as some accepted amounts increased by BDT 4343.04 billion during banks and NBFIs act as primary dealers of such FY20. securities to ease their liquidity. • Substantial rise in liquidity in the banking system The interest rate against the accepted bids was ranging contributed to a decrease in the interest rate on 5.25-9.00 percent per annum, which was 6.00-9.00 most of the treasury bills and bonds of different percent per annum in FY19. maturities while the interest rates on longer term bonds remained mostly unchanged. Reverse Repo Auctions • BB’s timely intervention in the foreign exchange In line with the broad objective of monetary policy, market including purchase of USD from the Bangladesh Bank uses Reverse Repo to mop up excess market helped to maintain normal behavior in liquidity from the banks to keep the Reserve Money and USD interbank market. Consequently exchange Money Multiplier on track, impacting currency, reserves rate of BDT against USD remained broadly stable and deposits. In case of Reverse Repo, BB abstained in FY20. from providing any collateral to the banks. In FY20, the

ANNUAL REPORT 2020 303 interest rate of Reverse Repo (policy rate) was higher (4.75 (HTM) securities maintained for Statutory Liquidity percent) comparing BB Bills rate signaling the market Requirement (SLR) purpose with amortization. to maintain reasonable interest rate on bank deposits protecting the marginal savers. A total of 09 reverse repo The range of annual weighted average yields of most of auctions were held during FY20. A total of 10 bids for BDT the Treasury Bills increased in FY20 as compared to FY19 21.80 billion were received but no bid was accepted under reflecting liquidity tightness in the market. A total of reverse repo during FY20 6316 bids amounting to BDT 2918.98 billion were received of which 2516 bids amounting to BDT 1503.00 billion Bangladesh Bank Bill Auctions (including BDT 302.24 billion as devolved amount) were accepted in FY20. The weighted average yield-to-maturity To conduct effective management and sterilize liquidity against the accepted bids was ranged from 4.92 percent of the banking system, operations of 7-day and 14-day to 8.70 percent. In FY19, a total of 4312 bids amounting Bangladesh Bank Bill were introduced in April, 2016 to BDT 2138.91 billion were received, of which BDT 921.00 and 30- day Bangladesh Bank Bill which was revived in billion (including BDT 293.71 billion as devolved amount) FY10 were continued in FY20 as a tool of open market were accepted. operations (OMOs). Among 7-day, 14-day and 30-day Bangladesh Bank Bills, BB meticulously only used 7-day Bangladesh Government Treasury Bonds Bangladesh Bank Bill considering the overall liquidity of (BGTBs) Auctions the economy and 2 bids of 7-day Bangladesh Bank bill Treasury Bonds bearing half yearly interest coupons were accepted in FY20. With a view to maintaining stable with tenors of 2-year, 5-year, 10-year, 15-year and interest rate, exchange rate, inflation and optimum 20-year are auctioned in every month following a pre- return on bank deposits, Bangladesh Bank cautiously used announced auction calendar prepared by Bangladesh the selective 7-day BB Bill as a tool of OMOs with lower Bank in consultation with the Ministry of Finance return for banks (institutional investors) in FY20. of the Government of the People’s Republic of Bangladesh, considering liquidity situation and status of Government Securities Market macroeconomic indicators. The BGTB auction committee Government Treasury Bills Auctions determined cutoff coupon rate used for bond pricing. Banks are eligible to use Government Treasury Bills and Treasury bills and bonds are short-term and long-term BGTBs for SLR purpose in the form of Held To Maturity debt instruments issued by Bangladesh Bank on behalf (HTM) and Held For Trade (HFT). HTM securities are of the Government of Bangladesh. These are the indirect amortized in order to converge at face value and HFT monetary instruments that BB uses mainly for debt securities are traded following marking to market management purpose. The securities are issued through norms. This bills and bonds are eligible for trading in the an auction process where the allotments are awarded to secondary market using MI module of Bangladesh Bank. the bids which fill the notified issue amount ranging from A total of 4818 bids for BDT 1736.54 billion were received the lowest to highest yield. Pro-rata partial allotments and 1929 bids for BDT 761.00 billion were accepted, of are made for bids at the cut-off-yield. The objectives of which BDT 160.91 billion was devolved on BB. The amount issuing these securities are two-fold. The first one is to of outstanding bonds was increased by BDT 615.31 billion provide a mechanism for financing Government budget or 39.62 percent to BDT 2168.18 billion at the end of June deficit and the second one for managing excess liquidity 2020 from BDT 1552.87 billion at the end of June 2019. prevailing in the market. In FY20, a total of 22 Primary The weighted average annual yield-to-maturity for the Dealers (PDs) banks acted as underwriters and market treasury bonds ranged from 6.4998 percent to 9.7381 makers with commitments to bid in auctions. Apart percent in FY20. from that, the auction committee may also devolve the unsubscribed amount to Bangladesh Bank/ PD and non Floating Rate Treasury Bond (FRTB) PD banks considering the auction rate, market timing, Allowing the variability of interest rate and diversity of macroeconomic and liquidity situation of banks. In FY20, market for the first time in FY19 the Government with the auction committee devolved a good amount of money collaboration of BB has introduced 03-Year Floating to BB curbing higher rate and financing the government Rate Treasury Bond (FRTB) as on 25 March, 2019. FRTB at a lower cost and keeping momentum in the weekly will encourage robust bond pricing mechanism allowing valuations of Government Treasury Bills for held for trade secondary bond market development in Bangladesh. (HFT) and calculating of book value of held to maturity Both individuals and institutional investors are eligible to purchase and hold the FRTBs. According to the mood Bangladeshi wage earners or Bangladeshi nationals who of operations resident and non-resident investors can are gainfully employed in abroad. purchase the FRTB using particular bank accounts. The In FY20, remittance inflow invested in NRB Savings non-resident can transfer interest (coupon) and resale or Bond is 1.05 percent. redemption proceeds abroad in foreign currency. 91-Days BCR is primarily used to set the rate of floating Capital Market rate instruments of government. It is a daily rate based Capital Market Activities in FY20 on the cut-off yield of 91-Days Treasury Bills auction announced by BB on its website daily. Capital market is considered the second largest segment of financial system in the country. It plays significant Bangladesh Government Islamic role in the economy by providing funds for the long Investment Bond (Islamic Bond) term investment and development which contributes to economic growth. The market comprised of Dhaka Stock Government provides guarantee against the Bangladesh Exchange (DSE) and Chittagong Stock Exchange (CSE), Government Islamic Investment Bond (BGIIB) pool of where DSE is pioneering in the exploration of economic funds formed by the Islamic banks and individuals in advancement of the country. The instruments in these order to develop money market in Islamic banking sector. exchanges are equity securities (shares), debentures and Virtually, government does not borrow money from this corporate bonds. The regulator body of capital market is sector. The return of the bonds depends on investment Bangladesh Securities and Exchange Commission (BSEC). in line with the Islamic Shariah savings rate and other Bangladesh Bank has been playing proactive role also to related factors reflected in the balance sheet of the steady functioning and development of the market as well. respective Islamic bank. The operation of 6-month BGIIB was introduced in FY04. Further, 3-month BGIIB was The DSE index and the market capitalization decreased to introduced in January, 2015. The auction of 1-year and 4452.93 and BDT 3395.51 billion respectively at the end of 2-year Islamic Bonds have been suspended since January December 2019. Having with a downward trend, the index 2015. Currently, 3-month and 6-month maturity BGIIBs are and the market capitalization stood at 3989.1 and BDT operated in accordance with the rules of Islamic Shariah. 3119.7 billion respectively at the end of FY20 As per rules, Bangladeshi institutions, individuals and Primary Issuance non-resident Bangladeshis who agree to share profit or loss in accordance with Islamic Shariah may buy these Five companies have collected new equity of BDT 3.0 bonds. As of end June 2020, the total sale against this billion from the capital market through public placements bond amounted to BDT 131.88 billion while balance of total in FY20, which was much higher amounting BDT 4.2 billion amount of financing stood at BDT 67.82 billion and net collected by the 15 companies in FY19. In FY20, no new balance against the BGIIB stood at BDT 64.06 billion. As of equity issued through private placements, that was BDT end June 2019, the total sale against BGIIB was BDT 107.11 0.4 billion in FY19. The volume of public offerings was billion and the financing was BDT 84.80 billion and net oversubscribed, more than 06 times in FY20, indicating a balance of BDT 22.31 billion. The sale amount of BGIIB was shortage of new securities in the primary market. Bonus increased in FY20. The amount of net balance was also shares worth of BDT 18.3 billion were issued in FY20 by increased in FY20 comparing FY19 due mainly to higher 95 companies against retained profits. This was lower amount of supply and demand of funds by the Islamic than BDT 31.4 billion issued by 150 companies in FY19. On banks. the other hand, right shares amounting to BDT 2.1 billion issued by two companies in FY20 whereas, no right shares NRB Savings Bond were issued in FY19.

The Government had introduced 03 types of NRB Savings Secondary Market Activities Bond namely, Wage Earner Development Bond (WEDB), US Dollar Investment Bond (DIB) and US Dollar Premium As percentage of market capitalization, secondary market Bond (DPB) with a view to encouraging the wage earners is dominated by the manufacturing sector with 39.8 and Non-Resident Bangladeshi (NRB) people to invest percent share followed by services and miscellaneous and increasing the remittance inflow Target groups for sector (34.2 percent), financial sector (25.9 percent) WEDB (Maturity 5 years, available in the denomination and bonds (0.2 percent) at the end of FY20. In the DSE, of BDT and interest rate 12.0 percent in BDT) are general market capitalization decreased by 22.0 percent to BDT

ANNUAL REPORT 2020 305 3119.7 billion at the end of FY20 from BDT 3998.2 billion fundamental companies, especially profitable state- at the end of FY19 which is 11.2 percent of GDP (at current owned and multinational companies, to enhance the market price). In case of the CSE, it also decreased by market capitalization. The new commission of BSEC only 25.7 percent to BDT 2447.6 billion at the end of FY20, has already taken special attention for faster approval which is 8.8 percent of GDP (at current market price). of initial public offerings (IPO) in the capital market. Amount of turnovers in the secondary market at DSE Meantime, the BSEC has approved some companies with and CSE have decreased by 46.5 percent and 37.4 percent large paid-up capital which is expected to increase the respectively in FY20 as compared to FY19. DSE broad index market capitalization. (DSEX) have decreased by 26.4 percent to 3989.1 while To improve the liquidity condition in the capital CSE all-share price index have decreased by 31.9 percent to market, the BB and related regulatory bodies took 11332.6 in FY20. several initiatives such as: Scheduled Banks Investments in Capital Market (i) the BB has asked all scheduled banks to create Securities a special investment fund of BDT 2.0 billion for Holdings of capital market assets (equities, debentures) investment in the stock market in addition to excluding investment on Government Treasury Bills/Bonds banks’ stock market exposure limit; and Bangladesh Government Islamic Investment Bond (ii) banks can avail financial support from BB (BGIIB) by the scheduled banks stood at BDT 480.7 billion through long term repo at the end of June 2020 as against BDT 446.9 billion at the (iii) the BSEC approved Investment Corporation of end of June 2019. Outstanding advances of the scheduled Bangladesh’s (ICB)BDT 20.0 billion funds for banks against shares and securities amounted to BDT capital market investment and 54.4 billion at the end of June 2020, which was BDT 44.0 billion at the same period of the previous year. (iv) budget FY21 announced that the Government allowed the investment of undisclosed money Capital Market Developments and outlook in the capital market without any question from The downward movements of share prices and trade any agencies after paying 10 percent tax. volume with some degrees of volatility continued in the In response to the COVID-19 crisis, BB took an capital market during FY20 compared to FY19 due to unprecedented easy monetary and prudential financial investors' disquiet stemmed mainly from the Covid-19 policy which will help indirectly to increase liquidity in the pandemic. However, the country’s capital market capital market and impact the market positively. experienced some improvements during the first half of FY21 by the favorable policy supports of BB and Credit Market related regulatory bodies as reflected in increased price indices, turnover, and market capitalization. Scheduled Banks' Advances by Economic Purposes The key indicators of the capital market, the DSEX dropped by 26.9 percent (y/y) in June 2020 as the The advances of scheduled banks by economic purposes investors feared during the last quarter of FY20 that showed an upward trend during FY20. Total amount of the economy may worsen further by the COVID-19 advances stood at BDT 10486.9 billion at the end of June pandemic. Thereafter, the DSE broad index (DSEX) grew 2020 which was 10.2 percent higher than the amount by 21.31 percent (y/y) in December 2020, where the of BDT 9514.5 billion at the end of June 2019. In recent daily average turnover picked up significantly to BDT 8.2 years, major changes have been viewed in the trends in billion at the end of December 2020 from BDT 3.8 billion total bank advances classified by economic purpose. at the end of June 2020. Of the total advances, transport sector recorded a leading The DSE market capitalization increased to 14.1 percent growth by 86.3 percent followed by working capital of GDP in December 2020 from 11.2 percent in June financing (13.5 percent), industrial sector (12.8 percent), 2020 but is still low as compared to peer countries trade and commerce (11.4 percent) and agriculture, fishing such as India, the Philippines, and Sri Lanka. The and forestry (5.6 percent) in FY20 compared to that of Bangladesh Securities Exchange Commission (BSEC), FY19. Construction sector showed low improvement by merchant banks, and stock exchanges may consider 2.7 percent only, whereas, others sector depicted negative appropriate initiatives to increase the number of good increment of 1.6 percent in FY20. Sector-wise contributions of total advances show that internal production has been reduced significantly the trade and commerce sector played the leading role due to 66 (sixty six) days long countrywide lockdown. (33.7 percent) followed by working capital financing Both the internal and external situations of the (21.3 percent), advances for industry (20.6 percent), financial market have created enormous pressure on others sector (9.5 percent), construction (9.0 percent), the banking sector. Despite these, all scheduled banks agriculture, fishing and forestry (4.6 percent) and of the country remained operational for specified time transport (1.3 percent) in FY20. in every working day during the lockdown period to provide regular banking services to their customers. Industrial Term Loans of Banks and Moreover, to help the scheduled banks and non-bank Financial Institutions financial institutions (NBFIs) to survive in this critical situation and to continue their contribution in revamping Disbursement of industrial term loans by banks and the country's economy, Bangladesh Bank (BB) has financial institutions decreased by 8.2 percent to BDT announced a series of policies and prudential measures 742.6 billion in FY20. The recoveries also decreased by from the very beginning of the pandemic situation. 8.9 percent to BDT 697.2 billion in FY20. The outstanding These include but not limited to, re-fixation of the balance showed a positive growth of 13.7 percent and regulatory liquidity ratios to ensure additional liquidity stood at BDT 2773.5 billion as of end June 2020. However, in the banking sector, issuance of sufficient prudential the overdue increased by 1.3 percent in FY20 and as guidelines to maintain proper office environment in percentage of outstanding loans decreased to 15.5 as of the banks for continuing the business activities in a end June 2020. limited scale as well as compensation package for the Private commercial banks (PCBs) had the major shares employees as frontline workers during the lock down (65.3 percent) in the total outstanding loans amounting period, easing of foreign trade and foreign currency to BDT 2773.5 billion as of end June 2020, making them transaction regulations, temporary relaxation in the major players in industrial term lending. Though six SCBs loan classification policy, modeling and implementation and two specialised banks together had 20.8 percent of the Govt. stimulus packages for different segments of shares of outstanding loans, with very high levels of the economy and refinance schemes to provide liquidity overdue loans, their actual role in current lending was support to those packages and introduction of special quite minor, as they disbursed only BDT 77.8 billion (10.5 fund for capital market investment, etc. Furthermore, percent) out of total disbursed loans amounting to BDT the preannounced ceiling of lending rate was also 742.6 billion in FY20. In case of disbursement, PCBs had introduced from April 01, 2020. As a part of supervisory the major amount (BDT 579.6 billion) in FY20, followed activities, regular and special on-site inspections have by SCBs (BDT 75.2 billion), financial institutions (BDT 43.3 been conducted throughout the year. The performance of billion), foreign banks (BDT 41.9 billion) and specialised the Risk Management Committee at the board level of banks (BDT 2.6 billion). banks is also being evaluated regularly. Special monitoring The foreign banks had very low overdue loans (3.2 percent has been continued by BB to oversee the liquidity level of of outstanding) as of end June 2020. Overdue loans were the banking sector which results in a sufficient and strong also lower in private commercial banks (11.3 percent) and level of aggregate liquidity at the end of FY20. Besides, financial institutions (16.9 percent). Overdue loans of BB continues its efforts to reduce overall NPLs of the the SCBs and the specialised banks were very high (29.5 banking sector. At the end of FY20, the overall NPL ratio percent and 32.3 percent respectively) as of end June and Capital to Risk weighted Asset Ratio (CRAR) stood at 2020. Since two specialised banks— BKB and RAKUB are 9.56 percent and 11.63 percent respectively. basically agriculture sector lenders, their role in industrial Banking Sector Performance term lending is insignificant. Depending on the ownership structure, there are Development In Banking Sector four categories of scheduled banks in Bangladesh: The performance of the banking sector of Bangladesh state-owned commercial banks (SCBs), state-owned has been largely affected by the COVID-19 pandemic development financial institutions (SBs), private situation for the last four months of FY20. Almost all commercial banks (PCBs) and foreign commercial banks the large financial markets around the world have (FCBs). Total number of scheduled banks operated in been extremely impaired due to the lockdown aiming 2019 was 59. Two (02) new banks (Prabashi Kallyan Bank, at hindering the escalation of pandemic. Bangladesh Community Bank) have received license and started their has also lost huge export earnings and its pace of operation. Besides, one new bank (Bengal Commercial

ANNUAL REPORT 2020 307 Bank) has got license as scheduled bank as on 23 February allowed to write off the default loans that have been 2020. The number of bank branches increased to 10,578 at hovering in the bad category for three years from their the end of December 2019 from 10,286 of December 2018. balance sheet, down from five years previously, according On the other hand, depending on the mode of operations to a recent notification from the Bangladesh Bank. (e.g. conventional and Islami Shariah based), there are Furthermore, lenders do not have to file any case with three type of banks: full-fledged conventional banks, the Artha Rin Adalat (Money Loan Court) to write off fullfledged Islami Shariah based banks and banks with a delinquent loan worth Tk 2 lakh, up from Tk 50,000 dual operation. previously. At the end of December 2019, total assets of the banking Earnings and Profitability sector stood at BDT 16298.4 billion which was 11.84 percent higher than that of the previous year. Although various indicators are used to determine earnings and profitability, the most representative and Total deposits of the banking sector stood at BDT widely used ones are return on assets (ROA), return on 12145.2 billion in 2019 which was BDT 10798.7 billion in equity (ROE) and net interest margin (NIM). 2018, showing an increase of 12.46 percent. Aggregate Balance Sheet ROA, ROE and NIM of the banking sector at the end of June 2020 stood at 0.42 percent, 6.68 percent and In 2019, total assets of the banking sector stood at 2.70 percent respectively compare to 0.30 percent, 4.68 BDT 16,298.4 billion showing an increase of 11.8 percent percent and 2.99 percent in June 2019. over the total assets in 2018. During this period, the SCBs' assets rose by 7.1 percent and that of the PCBs' increased CAMELS Rating by 13.1 percent. The aggregate banking sector assets CAMELS rating is a supervisory tool to assess and review consisted of BDT 10315.1 billion as loans and advances the financial soundness of the banking companies. It (63.3 percent of total assets), BDT 161.6 billion as cash helps BB to remain always vigilant over the banks and in tills including foreign currencies, BDT 885.4 billion as identify those banking companies, which have problems deposit with BB including foreign currencies, BDT 2157.1 and require close supervision. The previous CAMELS billion as investment in treasury securities and BDT 2,779.1 rating guideline has been reviewed by the Department of billion as other assets during the period. Off-site Supervision with a view to assessing the banks’ Deposits continued to be the main sources of funds of the soundness more accurately, reflecting the banks’ financial banking industry in FY20 and it (excluding inter-bank) condition and management issues more pragmatically, constituted 74.5 percent of the total amount of liability making the guideline more country perspective oriented and shareholders' equity in 2019. Total shareholders' and making an effort to address good governance equity of the banks was BDT 1027.5 billion at the end of issues in the banking sector. The revised CAMELS rating December 2019 which was BDT 931.0 billion in 2018. guideline came into effect from 2013. A partial revision Asset Quality has been brought into the guidelines latest in 2016. The revised CAMELS rating guideline has brought not The most important indicator to demonstrate the asset only major changes in ratios or indicators but also quality is the ratio of gross Non-Performing Loans (NPLs) to total loans and net NPLs to net total loans. modifications in the questionnaire for evaluation of At the end of December 2019, the gross NPL ratio of qualitative issues. Basel-III principles related to capital the banking sector stood at 9.32 percent. FCBs had the adequacy have also been reflected in the guideline. Along lowest and SCBs had the highest gross NPL ratio. FCBs' with emphasizing best quality capital, investments in gross NPL ratio was 5.74 percent, whereas those of the capital market, the amount of off-balance sheet SCBs, PCBs and SBs were 23.86, 5.78 and 15.13 percent items in comparison to the capital of the banks, large respectively at the end of December 2019. loan exposures to capital, etc. are considered to calculate capital adequacy rating. Under this rating system, banking Written-Off Bad Loans companies are assigned two sets of ratings- Bank may write-off any default loan as classified as BL (i) performance ratings, based on six individual for more than 5 years and take legal action in appropriate ratings that address six components of CAMELS legal court upon providing full provision for the loans (Capital Adequacy, Asset Quality, Management, as per BRPD circular issued in 2003. A new policy was Earnings, Liquidity and Sensitivity to Market introduced in February 2019 in this regard via BRPD Risk;) and circular no. 01 dated February 6, 2019 and Banks are now (ii) an overall composite rating based on a been issued in this context on 19 March 2020 and 15 June comprehensive assessment of the overall 2020 respectively to facilitate the borrowers through the condition of the banking company. deferral of the loan classification. Moreover by issuing a circular on July 21, 2020 Bangladesh Bank relaxed the Both ratings are expressed by using a numerical scale loan classification and provisioning rules to facilitate of “1” to “5” in ascending order of supervisory concern, cottage, micro and small industries of the country and to “1” representing the best rating, while “5” indicating encourage participation of the banks in disbursing loans to the worst. Any bank rated 4 or 5, i.e., ‘Marginal’ or cottage, micro and small sectors. Again in 28 September ‘Unsatisfactory’ under the composite CAMELS rating is 2020, Bangladesh Bank issued BRPD Circular no- 17 for not generally identified as a problem bank, and the activities classifying the loan up to December 2020. of these banks are closely monitored by BB. At present, there are two problem banks, which are under intensive Also, as per BRPD Circular Letter no. 56, Para 3(ga), dated monitoring of BB. December 10, 2020, Bangladesh Bank instructed the bank to keep additional 1% special general provision-COVID 19 Risk Based Capital Adequacy (RBCA) for against the SMAs and unclassified loans and advances Banks availing additional time (deferral) for repayment of According to the road map of the phase-in arrangements, installments. December 2019 was the final timeline for the Corporate Governance in Banks implementation of Basel III framework by the banks. Basel III framework requires increasing the level as well BB has undertaken several measures in the recent as the quality of capital that banks must hold. Banks are years to establish corporate governance in the banking expected to maintain a minimum total capital ratio of 10.0 sector. These include ‘formation of Risk Management percent, where 6.00 percent is to be maintained as Tier-1 Committee at the Board of the banks’, ‘the constitution capital. of audit committee of the Board’, “fit and proper” test for appointment of chief executive officers of PCBs, Besides, all banks must hold Common Equity Tier 1 (CET1) enhanced disclosure requirements, etc. In continuation of capital (the highest quality and most loss absorbing the above reforms, the roles and functions of the board form of capital) in an amount of at least 4.50 percent of and management have been redefined and clarified with total Risk Weighted Assets (RWA) at all time. a view to specifying the functions and powers of the Banks have been submitting capital adequacy reports/ management of the bank. In this connection, related statements following new Basel III accord from the clauses of the Bank Company Act 1991 have already been quarter ended in March 2015. It is found that Capital to amended. Risk Weighted Asset Ratio (CRAR) of the banking industry stood at 11.63 percent at the end of June 2020 Risk Management Activities of Banks while CET1 was 7.70 percent which fulfilled Basel III BB has revised six core risks management guidelines to Capital Adequacy Requirements. ensure robustness, efficiency and effectiveness of risk Under Basel III, banks will have to build up additional management system for the banking sector. Besides, Capital Conservation Buffer (CCB). Maintenance of CCB the guideline issued in 2012 named 'Risk Management has ended up with 2.50 percent in 2019. CCB of the Guideline for Banks' has been revised and already been put banking industry stood at 1.63 percent at the end of June into effect to facilitate banks in adopting contemporary 2020. Besides, at individual level, 37 banks have already methods to identify, measure, monitor and control fulfilled the CCB requirements. the risks and thus improve their resilience capacity. At present, BB is monitoring banks’ implementation Loan Classification and Loan-Loss progress of various instructions given in those guidelines. Provisions BB assigns a comprehensive risk management rating for Recent COVID-19 pandemic situation has critically each bank on half yearly basis based on the information worsened overall economic and business environment of Comprehensive Risk Management Report (CRMR), in the country. With a view to facilitating the existing minutes of executive risk management committee business environment and aligning with the (ERMC) meetings and board risk management macroeconomic cycle, some amendments have been committee (BRMC) meetings, compliance status of BB brought in the objective criteria of loan classification instructions as submitted by the concerned bank and policy of BB declared in 2013. Two circulars have other sources.

ANNUAL REPORT 2020 309

some of the projects financed by DBBL

Partial view of most modern and sophisticated 100% export oriented bi-cycle manufacturing industry located at Sreepur, Gazipur.

ANNUAL REPORT 2020 313 Partial view of a most modern cement industry located at Meghnaghat, Sonargaon, Narayanganj.

A partial view of a most modern knitting section of a 100% export oriented knit composite garment industry at Godnail, Narayanganj A partial view of MRI Unit of a most modern hospital located at Dhanmondi, Dhaka.

A partial view of Intensive Baby Care Unit of a most modern hospital located at Siddeshwari, Dhaka

ANNUAL REPORT 2020 315 A partial view of weaving section of a most modern home textile mills located at Kewa Purbo Khondo, Sreepur, Gazipur.

A partial view of sophisticated loom section of 100% export oriented home textile mills located at Kewa Purbo Khondo, Sreepur, Gazipur. A partial view of All Over Printing (AOP) section of the modern & most sophisticated textile mills located at Kashimpur, Gazipur.

A partial view of printing section of a most modern textile mill located at Mawna, Sreepur, Gazipur.

ANNUAL REPORT 2020 317 A partial view of the most modern embroidery section of 100% export oriented garment industry located at Panchdona, Narsingdi.

A partial view of the modern & most sophisticated twisting section of a 100% export oriented dyeing industry located at Kashimpur, Gazipur. A partial view of dyeing section of a 100% export oriented dyeing industry located in Kashimpur, Gazipur.

A partial view of the printing section of a most modern printing industry located at Gobindo Bari, Kashimpur, Gazipur.

ANNUAL REPORT 2020 319 A partial view of the cutting section of a 100% export oriented knit garment industry located at Fatullah, Narayanganj

A partial view of the screen printing section of a 100% export oriented knit garment industry located at Fatullah, Narayanganj. A partial view of the embroidery section of a 100% export oriented knit garment industry located at Fatullah, Narayanganj

A partial view of the finishing unit of sewing section of a 100% export oriented knit garment industry located at Fatullah, Narayanganj.

ANNUAL REPORT 2020 321 A partial view of a private Inland Water Container Terminal situated on the bank of Dhaleshwari river in Muktarpur, Munshiganj. A partial view of a ceramic tiles manufacturing industry located at Sreepur, Gazipur.

ANNUAL REPORT 2020 323 A partial view of a ceramic tiles manufacturing industry located at Sreepur, Gazipur.

A partial view of leading and largest electric transformer manufacturing industry located at Baruipara, Savar, Dhaka A partial view of leading and largest electric transformer manufacturing industry located at Baruipara, Savar, Dhaka

A partial view of net and mesh fabrics mills located of A-95, BSCIC I/E, Tongi, Gazipur.

ANNUAL REPORT 2020 325 A partial view of net and mesh fabrics mills located of A-95, BSCIC I/E, Tongi, Gazipur.

A partial view of the most modern blow room section of a spinning mills located at Goal Nagar, Panchdona, Narsingdi. A partial view of the draw frame section of a spinning mills located at Goal Nagar, Panchdona, Narsingdi.

A partial view of the ring frame section of a spinning mills located at Goal Nagar, Panchdona, Narsingdi.

ANNUAL REPORT 2020 327 A partial view of the ring frame section of a spinning mills located at Goal Nagar, Panchdona, Narsingdi.

A partial view of the knitting section of a 100% knit composite industry located at Valuka, Mymensingh. A partial view of most modern knitting section of a 100% export oriented knit composite industry located at Valuka, Mymensingh.

A partial view of most modern pharmaceutical industry located at Shafipur, Gazipur

ANNUAL REPORT 2020 329 A partial view of most modern pharmaceutical industry located at Shafipur, Gazipur

A partial view of the sizing section of composite textile mills located at Jamirdia, Valuka, Mymensingh. A partial view of the sizing section of composite textile mills located at Jamirdia, Valuka, Mymensingh.

A partial view of the weaving section of composite textile mills located at Jamirdia, Valuka, Mymensingh.

ANNUAL REPORT 2020 331 A partial view of the weaving section of composite textile mills located at Jamirdia, Valuka, Mymensingh.

A partial view of a modern packaging industry located at Dhanua, Sreepur, Gazipur A partial view of a sophisticated offset printing/ Board printing industry located at Valuka, Mymensingh.

ANNUAL REPORT 2020 333 A partial view of a leading composite denim manufacturing industry located at Valuka, Mymensingh. directors' report

DIRECTORS' REPORT

Bismillahir Rahmanir Rahim MasterCard & VISA. Bank has introduced NexusPay to bring all internets banking facilities in one apps/card Dear Fellow Shareholders namely “NexusPay”. It is a 4-Generation service first time The Board of Directors is pleased to welcome the introduced by DBBL in banking industries of the country. honorable shareholders in the 25th Annual General Nexus Pay is a unique services & milestone in the country Meeting of the Bank. The Directors' Report along with providing internet banking service to the customers. audited financial statements and auditors' report thereon In addition, mobile banking services were introduced in for the year ended December 31, 2020 are presented 2011 by DBBL which was first of its kind in the country to before your kind self. provide banking services to mainly those people who are In the report, DBBL's operational performance of 2020 as living in rural areas of the country and mostly deprived compared to 2019 has been evaluated and analyzed within of conventional banking services. The mobile banking the prevailing business environment. The information services were rebranded in 2016 with ‘Rocket’ logo to and analysis may be read in conjunction with the DBBL's make it more visible and customer-centric. The mobile audited financial statements for the year ended 31 banking services are now spread all over Bangladesh. December, 2020, which have been prepared in accordance DBBL also introduced Agent Banking services in 2015. with Bangladesh Bank guidelines, International This is deposit based service and extended hands of Accounting Standards, International Financial Reporting DBBL branches. The objective is to bring small banking Standards, Financial Repoting Act 2015, Bangladesh customers in rural area under the banking umbrella. Securities & Exchange Commission rules and others As part of its strategic plan, DBBL continued to invest applicable legal and regulatory requirements. heavily to improve and expand IT network, ATM services, Fast Track & card services, mobile banking & agent REVIEW OF BUSINESS OPERATIONS AND banking services along with branch network, business STRATEGY promotion & activities related to Social Cause. Expenses on such investments in 2020 apparently resulted in higher Principal activities costs; these will substantially improve our capacity to deliver customer services with a wide range of products The principal activities of DBBL are to provide all kinds and services that can be matched with the best in of commercial banking products and services to the such industry by strengthening IT platform, expanding customers including working capital finance, trade finance distribution channels and communication networks and & project finance for corporate customers, SME loans to improving productivity. DBBL's strategic objective is to small traders & businesses, house building loan, car loan have a clear competitive advantage over its competitors and wide range of life style & need based loans for retail to provide the full range of banking services via multiple customers. There are various deposit products particularly delivery channels through state-of-the-art-technology at suitable for retail and institutional customers. DBBL's the lowest cost. state-of-the-art IT platform and online banking system provide the largest ATM network, Fast Track, NexusPay Brand positioning apps and POS services of the country through which customers are getting any-branch and anytime banking Throughout its operation for last 25 years, DBBL has for 24 hours a day and 365 days a year. IT network also established itself as a different Bank from other Banks. provides SMS alert and internet banking services. Debit It has differentiated itself as a leader in technology by cards of MasterCard International and DBBL's propriety reaching the latest banking services to its customers cards (Nexus) are in operation. International cards (VISA through largest ATM network in the country at free or & Master Card) of different local & international banks are affordable cost. Fast Track was introduced in 2010 to accepted at DBBL's ATMs for withdrawal of money from expand the ATM services. Fast Track includes deposit kiosk ATM and at POS terminals for payments of shopping, supported by officers from the Bank to facilitate deposit hotel and dining bills etc. DBBL earlier introduced EMV in accounts by our valued customers that is in addition supported Chip VISA Credit Cards for the first time in to multiple ATMs housed in a Fast Track. The Fast Track Bangladesh. Thereafter, EMV Credit Cards of MasterCard and ATM network was further expanded in 2020. Cash and EMV debit cards of MasterCard were introduced in Receiving Machine (CRM) will be added in 2021 in the Fast 2010. The EMV feature shields DBBL customers from Track and Branches for providing more smooth service any kind of frauds as per the guidelines provided by to the depositors. The Bank has developed a new service

ANNUAL REPORT 2020 337 for internet banking introducing “NexusPay” to make DBBL is collecting remittance of our wage earners since available all the internet banking service in one apps/card. long. The bank is providing to the remitter/remittance It is first time in the industry and got huge response from receiver through main banking, agent banking & mobile all types of customers as it is a 4-generation service in banking services. It became second remittance collector digital banking. in the country in 2020 among the Private Commercial DBBL has also established itself as a Bank that cares for Banks. Further efforts are continuing to ramp up volume the society. All the business activities of DBBL are done of remittance collection. in full conformity with social, ethical and environmental Our report on mobile and agent banking services is set out standards. DBBL is the pioneer in Social Cause programs on pages 187 to 210 of this Annual Report. in the country. It has been intensifying its resources and VIP banking efforts on a continuous basis to reach the distressed & needy people of the society to bring smile on their faces DBBL believes in its uncompromising commitment to and to improve their health and educational standard and fulfill its customer needs and satisfaction and to become overall quality of life. their first choice in banking. In order to provide customized services to its prime customer, the bank decided to DBBL is continuing a massive and expanded scholarship introduce “VIP Banking” for the existing and new high program since 2011 which provides yearly scholarships net worth customers, recognizing their contribution to to more than 16,000 students mainly studying in HSC, the bank. The first VIP lounge was opened in the bank’s graduation and post-graduation levels. Gulshan branch on 14 March 2017 and subsequently the Mobile banking and Agent Banking services second lounge was launched on 30 December, 2017 in expanded and covered whole Bangladesh. Gulshan Circle-1 branch and third lounge was launched Mobile banking service was introduced by DBBL in 2011 on 25 September 2018 in Uttara branch. Total 05 (five) that was first of it’s kind in the country. Mobile service numbers of VIP banking lounge was open during the year was rebranded as “ROCKET” in 2016 to make it more 2019 and One number of VIP banking lounge was opened visible & customer centric. It is further strengthened during the year 2020 and at the end of year, there were in 2020 to cover the entire Bangladesh. The services nine VIP Banking lounge to serve our prime customers As were targeted to reach the unbanked mass people of on 31 December 2020, the bank has 7,112 number of VIP the country, who are deprived from traditional banking customers with a total amount of deposit of BDT 28,942.9 services, living mostly in rural and remote areas to include million. them in financial services network through mobile phone. Our report on VIP banking services is set out on pages 218 to 219 of this Annual Report. Compared to traditional banking, mobile banking services are close to the doorsteps of customers, easier to use (can Customer focus and customers' right be operated without writing any cheque or using any card DBBL's performance cannot be judged by just looking at but using pin number only) through mobile phone and profit figures. DBBL considers that it is the customers' highly convenient for instant remittance of money from right to get modern, online and full ranges of banking abroad or within the country to any remote destination of services at an affordable price anytime and anywhere. the country. DBBL's service cost is the lowest in the industry and In order to serve this untapped and unprivileged market, in most cases services provided through ATM and Fast a total number of 623 employees in 77 offices across the Track are free. DBBL is committed to put the customers’ country are continuously working together with agent interest first. In line with its central vision, DBBL is points to meet customer requirements. In addition, promise-bound to extend personalized services to the full all the 208 DBBL Branches have dedicated counters to satisfaction of the customers that should be considered serve mobile banking customers where they can make by the customers to be the best in the industry. transactions. Corporate governance ensuring best A further extension of banking for mass people to reach practices even the remotest corner of the country, agent banking DBBL complies with good corporate governance practices services introduced in 2015 was further expanded also in in line with industry best practices and regulatory 2020. As many as 4,414 Sub-Agent Points covering 486 requirements of The Bangladesh Securities and Exchange Upazilas under 64 District were operating at the end of Commission (BSEC) and Bangladesh Bank ensuring December 2020 to serve the agent banking customers. transparency, accountability and fairness at every step of A total of 873 Agents were engaged in providing re- its business operations to maximize performance with balancing service to the Sub-Agents for smooth operation governance. of customer service. DBBL become the market Leader in agent banking service having more than 50 percent Corporate governance practices in DBBL are set out on market share. pages 101 to 106 of this Annual Report. Managing risks ensuring quality and value and improve quality and value of assets, and to ensure of assets and uninterrupted operations smooth banking operations and services in a sustainable way to protect interest of shareholders, depositors and all Risk management covering credit risks, operational risks, the stakeholders. Risk management system also complies market risks and other risks is at the heart of all business with Bangladesh Bank’s core risk management guidelines, operations and transactions of DBBL. Risk management guideline for risk management division (RMD) as well as systems are designed and implemented to maintain capital to risk-weighted assets ratio as per Basel III. Future risks and uncertainties in business outlook and cash flows and DBBL’s responses to address such issues.

Policy and Action plan for mitigating Risks and Potential Risks and Uncertainties Uncertainties Decrease in interest income for reduction of interest • Concentrating more on earning non-interest income rate on loans & advance and Investment • Increasing loan portfolio in low-risk-segments for Interest Income from loans & advances may be reduced reducing NPL & increasing effective interest yield. due to the reduction of rate of interest on loans & • Long term strategy for loan portfolio is Corporate: advances and Investment to comply single digit interest SME: Retail as 40%:30%:30%. rate requirement by the Government. Interest income may also hamper for reduction of interest rate on BB • Maximum utilization of AD ratio by providing fresh treasury Bill/Bond. loan to borrower with good credit rating. • Diversify investment in other profitable area. Increase of Non-performing Loan (NPL) and decrease in • Intensified monitoring of business activity of profitability for impact of COVID 19 borrowers by newly formed Corporate Business NPL may increase following withdrawal of restriction on Monitoring Cell of the Bank. classification status of borrower from January 2021 and • Maintenance of adequate provision for loans and disruption of business activity of borrower for COVID 19 advances for absorbing future shock on profit. result in decrease in profitability of bank for keeping loan loss provision against NPLs.

Maintaining capital requirement under Basel -III • Retaining profit

Under Basel -III, capital requirement is much higher A certain portion of profit generated from business along with higher proportion of equity capital, to have operations will be retained to strengthen the core adequate cushion against credit risk, market risk, capital position of the Bank. operational risk and other residual risks. • Credit rating of borrowers Increasingly more corporate borrowers will be brought under credit rating to reduce risk weighted assets and capital requirement, • Strengthening overall risk management system Overall risk management system will be further strengthened throughout the Bank and particularly under RMD to reduce combined risk exposure of the Bank that will also enhance capital adequacy ratio of the Bank. • Issuance of subordinated bond Issuance of subordinated bond to strength tier II capital. Maintaining ADR ratio • Value added services for depositors Maintaining ADR ratio within the regulatory More value added products & services will be provided requirements to the depositors and borrowers to attract existing & new Customer with enhanced customer experience for balancing ADR ratio.

ANNUAL REPORT 2020 339 Quality of assets • Diversified lending Quality of assets may decline for business or continuing We are continuously diversifying our portfolio towards smaller corporate, SMEs and retail borrowers corona virus outbreak condition. to reduce portfolio, industry and customer specific credit risks. New organizational structure has been put in place for streamlining our lending operations with particular attention on overall credit risk management and special asset (impaired assets) management. Vaccination program may control present corona virus outbreak worldwide. • Intensified monitoring We will continue intensified monitoring and recovery efforts, under special assets management division and high powered recovery team , with early warning system in place, to maintain and improve quality of assets Containing cost / income ratio • Operating cost will be rationalized Cost / income ratio may be increasing Operating cost will be rationalized by using modern software, digitalizing the filing, documentation and working process, improving productivity of resources, improving internal control system and reducing duplication of process, wastage and pilferage and also taking measures to control operation cost. • Source of income will be diversified Sources of income will be diversified by developing new value added products and services with particular emphasis on low risk corporate fee income and retail products. Fierce competition in the market • Customer services will be improved Fierce competition may reduce our market share and Our state of the art technology, innovative and value added services will help us to attract new customers growth potential and to retain existing customers. • Brand image will be strengthened We will keep strengthening our brand image, delivery channel and customer services to add value to both corporate and retail customers to bolster our asset and liability growth. • New Technological Product A new product “NexusPay” will be able to attract new customers to get competitive age in the market. Liquidity and foreign exchange risk • We will pursue prudent asset–liability management. Volatile money market and foreign exchange market may Our strong treasury team under the guidance of ALCO increase risk and reduce profit. is watchful of the ongoing market condition and they are operating within limits without taking any undue or disproportionate risk. A new CXO post was created to look after treasury business. • We will have surplus liquidity We will run comfortable liquidity by containing credit deposit ratio within limits , expanding low cost & stable deposit base to stave off any possible liquidity crisis in banking sector Credit Risks • Credit Risk Management Higher credit risk may Increase NPL ratio and capital DBBL is always concern with NPL. It scrutinizes every adequacy ratio. loan proposal effectively before placing to competent authority for approval. Further, as per latest guidelines CRG (named as ICCR) bank introduced ICCR in addition to CRG to as certain risks of loan before approval. Market risk in equity • We have no exposure in stock market Volatile & bearish stock market may increase market risk We have no exposure in stock market. We are and increase loss of the Bank. dedicating our focus and efforts on our core banking business. Sufficient skilled manpower may not be available • We have strong brand image and competitive package Sufficient manpower with adequate experience Our working environment and compensation package and expertise may not be available to support the are competitive. Moreover, our strong brand image customer services, business growth and brand position is increasingly attracting more talented people in joining and staying in DBBL. Market condition may limit our business growth. • Our products and services will attract and retain the depositors. Current economic and business condition may slowdown Depositors can be retained with better access, our deposit and business growth. product and services. With that end in view we will provide them more convenient access to wide range of banking services and options. We will seek diversified credit growth. Credit portfolio will be grown in a diversified way within acceptable risk profile. Disruption in online banking system • We are upgrading our software system Excessive burden on software system may disrupt We have upgraded software and hardware enabling or delay transaction resulting in information loss, the IT platform more secure and capable of handling disruption in business & financial transaction and huge volume compared to our previous system. customer dissatisfaction. Moreover, we have implemented Synchronous Disaster Recovery Site (DRS) to provide uninterrupted and reliable banking convenience to our customers. A 2nd data centre has implemented in 2018, for having extra cushion for ensuring uninterrupted IT operations even under adverse condition. It is a first time 4-generation data centre in the country. External factors • We will remain cautious External factors may adversely affect our business We are aware of latest development in global growth economy particularly in the USA, EURO area and China. However, we will remain cautious about external factors and take necessary measures well in advance to protect interest of depositors and other stake holders. We will be particularly cautious in credit approval (both funded and non-funded) and having adequate liquidity.

Our report on Risk management systems in DBBL are set out on pages 129 to 154 of this Annual Report.

ANNUAL REPORT 2020 341 Impact of Global Corona Virus pandemic Maintaining adequate capital and capital adequacy ratio – cushion to absorb the Corona virus pandemic, originated in China, has been unforeseen shocks impacting lives, businesses and economies around the world. First corona virus infection has been identified in As part of risk management system, it is the policy of DBBL to maintain strong capital to risk-weighted assets Bangladesh on 8th March, 2020. It is likely to adversely ratio to have sufficient cushion to absorb any unforeseen impact the domestic and global economy that in turn shock arising from any potential risk, to ensure long-term may adversely impact the financial position and results of solvency of the Bank and to help sustainable business the Bank in 2021 like 2020, the amount of which cannot and profit growth of the Bank that can maximize value for be predicted with any degree of certainty at this point stakeholders. of time. But there is a positive expectation that Covid During 2020, Shareholders' equity (Tier-1 capital) Pandemic situation will be under controlled through increased to Taka 29,682.5 million being 11.1% of risk vaccination to masses of the world. weighted assets (RWA) and supplementary capital (Tier 2 capital) stood at Taka 16,401.4 million being 6.1% of RWA. Impact of lending interest rate cap at Tier-2 capital is comprised of subordinated debt obtained 9.00% from Local Banks and General Provision maintained against unclassified loans, Special General Provision- The lending interest rate cap at 9.0% since April 2020 and Covid-19 for deferred loans and General Provision for ongoing liquidity surplus leading to reduction of lending off-balance sheet exposures. It may be noted that as interest rates in the market will reduce interest yield and per Bangladesh Bank regulation subordinated bond is interest margin. However, the Bank have taken necessary eligible as Tier-2 capital. In line with long-term capital management plan of the Bank and in compliance with strategy & initiatives to compete within prevailing market Basel III requirement, adequate capital adequacy ratio was conditions and will reduce interest cost to offset some of maintained in 2020 which stood at 17.2% at the end of the loss in interest yield and interest margin. the year compared to 15.5% in 2019 that was well above statutory requirement of 12.50%.

Summary of total capital to risk-weighted asset ratio of DBBL is as follows: In million Taka Particulars 2020 2019 Computation of capital Tier I capital [A] 29,682.5 24,636.0 Tier 2 capital [B] 16,401.4 12,556.8 Total capital (Tier I and 2) [C] 46,083.9 37,192.8 Risk weighted assets [D] 267,462.0 239,471.3 Tier 1 capital (against minimum requirement of 8.5%) [A/D] 11.1% 10.3% Total capital (against minimum requirement of 12.5%) [C/D] 17.2% 15.5%

46,083.9

37,192.8 34,077.4

26,106.7 21,187.8 Taka in Million 2016 2017 2018 2019 2020 TOTAL CAPITAL PERCENTAGE (%) CAPITAL TO RISK-WEIGHTED ASSET RATIO

18 17.2% 15.6% 16 15.5%

14 13.1% 13.0% 12

10

2016 2017 2018 2019 2020 AUTOMATION IN DBBL DBBL has taken these initiatives as part of its Social Cause programs to reach the benefits to the customers Development in IT infrastructure and Online Banking Services enabling them to make seamless transaction across the country. At the end of 2020, such services were provided In today’s global business scenario, particularly in banking through 208 branches, 4,862 ATMs, 1,190 Fast Tracks, sector, technology plays a vital role in executing all sorts of 7 electronic student booths and a large number of POS customer friendly banking operations with cost-effective terminals spread throughout the country. Sub-Branches services. In this sector, competition is rising steadily day will be opened in 2021 in order to provide more service to by day. As a result, technology has become an aide of customers at their door step. necessity rather than option in financial institutions just to satisfy the growing service demand of the customer To widen and spread the benefit of the ATM network, in a cost effective way. Keeping this in view, the bank has DBBL is allowing customers of other banks to use the adopted many technology based solutions that has placed Network at nominal cost through central switching our bank at the zenith of the technological advancement network of Bangladesh Bank. DBBL is committed to in our banking industry. spreading the network even further to maximize socio- With the advance of technology, customers are more economic benefits of the country though it is not cost- powerful and more demanding. They want to get the effective for the Bank. By providing such services, DBBL service instantly. They do not want to understand the is enabling the customers to maximize their business barrier of time and geographical limitations. Without potentials and to fulfill their personal hopes and having a state of the art technology, it is not possible aspirations. to satisfy such customers. Being understood that customers are the king, Dutch-Bangla Bank has set up a Our report on Automation in DBBL is set out on pages 49 comprehensive ICT infrastructure to manage the time and to 73 of this Annual Report. geographical limitations, to bring employee efficiency, to SME Financing provide cost effective service to the customers with the ultimate objective of complete customer satisfaction. Small and Medium Enterprises (SMEs) play a significant Making technology affordable for masses to role in the economy in terms of balanced and sustainable facilitate seamless transaction and socio-economic growth, employment generation, development of development entrepreneurial skills and contribution to GDP. DBBL strongly believes that SME sector is one of the main In DBBL, banking products and services based on latest driving forces of economic growth and there is a market technology and multiple delivery channels are aimed at with huge potential. faster and better customer services at the doorsteps of customers at affordable cost. DBBL being the most In order to facilitate the SMEs of our country, the Bank technologically advanced Bank has established the has been financing the SME sectors since its inception. largest ATM and Fast Track network of the country and Full-fledged SME Division has been established to the first mobile and agent banking services with a huge further reinforce SME financing to bring the grass- investment which is not at all financially rewarding. Still root entrepreneurs into the main stream of economic

ANNUAL REPORT 2020 343 growth. Subsequently, SME Division has been further 4,862 4,837 strengthened with sufficient manpower and various rules and procedures at different times. A number of need 4,705 based SME products are offered to our SME clients Our report on SME Financing is set out on pages 229 to 4,467 235 of this Annual Report. Retail Banking & e – banking 4,331

Retail Banking and e-banking divisions of DBBL deliver Number diversified electronic and retail banking products and services including personal loan, auto loan, home loan, 2016 2017 2018 2019 2020 credit card, POS (Point of Sales) and e-Payment solutions ATM through NEXUS gateway to bring utmost comfort and enhance the lifestyle of the consumers of different Correspondent banking relationship segments. During the year 2020, Dutch-Bangla Bank has registered Our report on Retail Banking is set out on pages 211 to 216 negative growth in Foreign Trade business due to Covid-19 of this Annual Report. pandemic. DBBL is well equipped with state of the art Expansion of bank branches, mobile banking technology to provide instant services to the growing offices and agent banking operation customers demand. International Division’s strategy is to focus on providing end-to-end solutions for the The Bank opened 13 new branches in 2020 to reach 208 branches at the end of the year spreading the branch international banking requirements of corporate clients. network throughout the country. More branches and Our mission is to establish DBBL as the Bank of choice sub-branches booth will be opened in 2021 to expand the for key global markets to provide all the international branch and distribution network. Mobile banking operation banking solutions more effectively by bringing all Trade started in 2011 was also expanded in 2020 covering all over Service units under a single roof. Accordingly, Centralized the country to spread our banking services to the remotest Trade Service (CTS) has been established to offer premium villages of the country to serve mainly the marginal service through reliable, accurate, timely delivery and customers who are mostly deprived of traditional banking customized solutions for business needs. services. Agent banking services were also introduced in 2015 to reinforce our commitment to unbanked people DBBL has further streamlined Trade Finance business mainly in rural area. These will bring up-to-date banking while strengthening risk management activities. During services to our existing and potential customers both in the year 2020, bank’s import business was USD 1,508.5 rural and urban areas at the same time it will optimize million against USD 1,692.0 million in 2019. The export utilization of our strong delivery channels, increase business in 2020 was USD 1,286.4 million against USD our resource position and business potentials that will 1,668.9 million in 2019. maximize profitability and shareholders' value. DBBL's strategy is to reach the doorsteps of customers to provide Trade finance experienced higher demand from the full range of banking services based on state- of -the- art- expanding domestic economy. Import and supply chain technology and IT platform at free or affordable cost. services registered higher growth in various industry segments. International Division of Dutch-Bangla Bank always strives to enhance and expand foreign 208 correspondence relationship to facilitate International 195 184 trade business of the Bank. This enabled DBBL to be well 175 165 positioned to facilitate trade flows through our global network with Relationship Management Applications

Number (RMA) with 482 numbers of reputed foreign banks covering 60 countries across the globe. To facilitate the foreign exchange transactions, Bank maintains 25 nostro accounts in 11 major currencies with internationally reputed banks across the globe. Under Trade Finance Program of Asian Development Bank (ADB) and sufficient 2016 2017 2018 2019 2020 credit lines from correspondent banks, DBBL enjoys add BRANCHES confirmation facilities for letter of credits as and when required. In 2020, international division arranged Add competitive financial market like Bangladesh. Accordingly, Confirmation and Discounting for USD 384.0 million only the Bank's strategy is to attract, retain and motivate for the LCs issued by different branches of DBBL. the most talented people and providing them with healthy, safe and progressive working environment and Bangladesh continues to remain one of the largest competitive compensation package. remittance receiving country in the world and DBBL experienced a significant growth in market share of Human Resources policies are designed to remittances. This has been made possible through our long-term career growth - unleashing the diversified products and service offerings to meet the hidden potential requirements of the Non Resident Bangladeshi (NRB) spread over the world. Wage remittance is indivisible from The Bank's HR policies are based on trust and relationship. banking services and has a significant role in balance of The Bank's policy is to look after people who want to payment. DBBL is continuing efforts for further expanding make a long-term career with the Bank because trust and it’s remittance services by arranging new partnerships relationship are built over time. Remuneration package and distribution channels to uphold Dutch-Bangla Bank’s may be an important factor to motivate for joining a name at home and abroad. During the year 2020, 65 company, but it is not the only one. The corporate culture Exchange Houses all over the world routed USD 2,020.8 at DBBL as grew over last 25 years is such that the million remittances through Dutch-Bangla Bank with a members of the staff have ample opportunities to take y-o-y growth of 4.6%. In 2020, it secured second position initiative and responsibilities to unleash their hidden among the private banks in receiving remittance. potential to maximize benefits for themselves and for the society. The challenge is to maintain a business Off-shore Banking Unit (OBU) like, committed corporate culture that matches DBBL's mission. Achieving results and taking responsibility are Dutch-Bangla Bank is offering Foreign Currency (FCY) important components of the culture we pursue, one financing facilities at a lower rate of interest to its prime in which management and staff work together and are customers through Off-shore Banking Unit. DBBL has two mutually accountable. OBU Units located at Chittagong EPZ and Dhaka EPZ. Total advance increased to USD 178.7 million at the end of DBBL provides challenging but rewarding December 31, 2020, from USD 157.4 million in the previous career where good values, fairness and year. hard work are highly encouraged.

Progressive, healthy and safe working In case of DBBL, it is excellence of DBBL with good values, environment for staff fairness, potential for success, scope to develop a broad A high quality and competent human resource is crucial interesting career etc. which attract people to join and to continued growth and success of any business entity work with DBBL. DBBL always encourages excellence in which can be achieved by improving skill, knowledge performance by rewards and recognition. and productivity of employees. Accordingly, how human Healthcare, safety standards and modern resource is recruited, trained, developed & motivated working environment has far reaching implication on long-term sustainable • A thorough medical checkup facility is provided to growth of the Bank. Customers’ perception & satisfaction each employee in every alternate year. ultimately determines relative or absolute success or failure of an organization. In turn, we need a competent, • Medical allowance @ 10% of basic salary being well-trained, committed & motivated team of human paid to each employee. resources with positive & sincere attitude towards • In order to provide highly sophisticated and customers that can develop, maintain and strengthen encouraging working environment, all the DBBL trust & confidence in our customers that is crucial for our offices including head office and branches success. are equipped with modern facilities with air- conditioning and generator for power back up. A talented, committed, skilled and fully motivated team of human resources is the main driving force for • All DBBL offices including head office and providing better, faster and coordinated services to the branches are equipped with fire fighting material clients and for performing at the highest level in a fiercely and have multiple exit points for emergency exit

ANNUAL REPORT 2020 345 Staff welfare schemes in DBBL quality training at home and abroad to develop and broaden existing knowledge and skills and to acquire new A number of well thought out policies are in place for skills and expertise. welfare of employees in DBBL those are in addition to competitive compensation package available in the DBBL Library has been equipped with industry: sufficient number of latest professional • Provident Fund books and journals. • Superannuation Fund, In order to provide latest knowledge, research and • Gratuity Fund strategy to executives and officers , DBBL library, • House Building Loan Scheme, attached with the training institute, has been equipped • Car Lease Finance Scheme with sufficient number of latest books published by internationally reputed writers and publishers on banking, • Festival Bonus finance, management, economics, ITC, marketing, • Performance Bonus and branding, mobile banking, retail banking, etc . The Library • Study Leave also provides opportunity to the executives / officers Career development and training program. for studying international magazines and journals like The Economist, The Banker, Business world and Harvard DBBL attaches utmost importance to the development of Business Review. its employees through continuous training so that DBBL executives can have competitive advantage in the market. DBBL training institute organized 17 different training The training need of individual employees including courses and 17 workshops on important banking issues training need for introducing new products, services and with active participation of 4,045 employees during the technology is evaluated on a continuous and systematic year 2020. Trainings carried out by the Bank’s own training way. DBBL executives are encouraged to attend high institute for the year 2020 are outlined below:

Serial Subject Number of Number of No courses Participants 1. Training Courses

a. Foundation Training Course 3 200

b. Credit Risk Management 2 109

c. Land Documents, Mortgage and Litigation 2 110

d. General Banking Operation 2 90

e. Internal Credit Risk Rating (ICRR) System 1 62

f. Online Training on Trade Finance Operation for the Branch 2 195 Managers g. Online Training on e-KYC for UBS Account Opening 1 165

h. Online Trainings on Integrated Supervision System (ISS) 2 412 Reporting. i. Online BAMLCO Conference of DBBL 1 285

j. Products & Services of Retail & SME Business 1 21

Sub-total of training 17 1,649 Serial Subject Number of Number of No courses Participants 2. Workshop

a. Awareness in IT Security across DBBL 03 201

b. Overall Cash Management 01 55

c. SWIFT Payment Message & AutoFX/ operational issues/ 01 21 challenges and solutions d. Prevention of Money Laundering and Combating Terrorist 03 469 Financing (Including NIS/Ethics in Banking) e. Internet Banking and 2FA 01 147

f. TBML Prevention Guidelines version 2020 Implementation 1 143

g. Initiatives to Increase Cash Pickup Remittance Inflow through 2 780 Branch. h. Gender Equality in Sustainable Development: Bangladesh 1 40 Perspective i. Marketing of Retail & SME Products 1 223

j. Developing Soft-skills for Efficient, Ethical & Enduring 1 221 Customer Relationship Sub-total of workshop 17 2,396

Grand Total of training and workshop 34 4,045

Apart from the mentioned training/ workshop DBBL has Mobilization and allocation of resources in organized 5 Exam with total 14,781 no. of participants on optimum way-extending loans to important DBBL products and AML with through e-leaning for all sectors at reasonable interest rate and charges regular employees (officials of Branches, Divisions and FTs). It is the policy of DBBL to mobilize resources from Apart from the above training programs, the Bank also diversified sources to make it cost effective and nominated 332 officials to undergo 134 different training sustainable to support business growth. Depositors are programs/courses organized by different organizations offered the best technology driven products & services like Bangladesh Institute of Bank Management (BIBM), available in the market to encourage them in savings. Bangladesh Bank Training Academy (BBTA) and other While resources are allocated at competitive rates similar organizations. preferably in most productive as well as export-oriented sectors to maximize economic and social development Contribution to national economy & of the country. Resources are also allocated to farmers, national exchequer: people engaged in small business and trade and other Contribution to national economy individuals to make them self reliant so that they can fulfill their hopes and aspirations and lead a meaningful Primarily our business strategies are based on goodwill life and contribute to social progress. Credit-deposit ratio and trust of the customers and other stakeholders. Our is contained within optimum limits to ensure utilization of Social Cause programs help strengthens this trust. DBBL resources within tolerable risks. conducts its activities in responsible way to maximize In 2020 total liability, including capital, deposit, borrowing value for its customers, stakeholders and the economy. and others increased to Taka 472,355.4 million from Our report on contribution to economy is set out on pages 390,362.0 million in 2020. Number of deposit accounts 293 to 309 of this Annual Report. decreased to 8.3 million from 8.7 million, Loans & advances increased to Taka 273,382.9 million from Taka

ANNUAL REPORT 2020 347 256,239.7 in 2020. Within loans, Taka 35,428.7 million various social and philanthropic programs to help was given to SME, Taka 26,421.3 million was given to disadvantaged people of the country. Education, retail and consumer and Taka 5,198.9 million was given to healthcare, human resource development, conservation Agriculture sector. of nature, creation of social awareness, rehabilitation of Commitment to rural area and Supporting SME distress humanities and such other programs to redress human sufferings are some of the important areas where DBBL has six SME/Agriculture branch mainly in rural areas the Bank carries out its social and philanthropic activities. to support SMEs and to bring related low income group under financial intermediation to help them become self In order to discharge activities related to Social Cause reliant and unleash the potential of economic growth Programs in an effective way, DBBL established the in rural area. In addition specialized head office team is Dutch-Bangla Bank Foundation (DBBF) in 2001 in working to ascertain the prospective SME and provide which contribution is made by the Bank to carry out financial support. highly important social cause programs in the areas of education, healthcare etc. DBBL’s contribution to Social In order to reinforce our commitment to rural and cause programs was Taka 691.5 million in 2020. marginal people of the country, mobile banking services and agent banking services are offered by DBBL for With the aim of illuminating lives of tens of thousands providing banking services to mainly those people who of students with the light of education, DBBL continued are living in rural areas of the country and mostly deprived its newly expanded and massive scholarship program in of conventional banking services. 2020 which would provide yearly to more than 16,200 Contribution to the national exchequer meritorious but needy students studying in HSC and graduation levels. Total students under scholarship is DBBL made significant contribution to the government in 62,752 but now 16,283 is continuing with scholarship. boosting its revenue collection. As per the prevailing law Total 46,469 students completed their study under the of the country, the Bank being a corporate citizen pays tax scholarship and servicing the country establishing them and VAT on its own income. Besides, the Bank deducts self in various sector of the country. income tax, VAT and excise duty at source from clients, depositors and suppliers, and deposits the same to the Our Full Report on Social Cause Programs is set out on national exchequer. pages 257 to 292 of this Annual Report. During the year 2020, the Bank contributed Taka 7,945.2 877 million to national exchequer as against Taka 6,975.5 838 860 835 million in the previous year. 692

7,945 Taka In Million

6,975

6,327

6,043 Taka In Million 5,967 2016 2017 2018 2019 2020 CONTRIBUTION TO SOCIAL CAUSE

2016 2017 2018 2019 2020 DBBL is committed to eco-friendly business CONTRIBUTION TO NATIONAL EXCHEQUER environment and green banking

Social Cause (Corporate social In light with Banking Regulations & Policy Department, responsibility) – Supporting the society at Bangladesh Bank vide their Circular No. 02 dated large February 27, 2011, DBBL has outlined a detail policy guidelines for implementing Green Banking activities DBBL being a responsible corporate citizen of the country under a comprehensive Green Banking Policy in a formal has been playing a pioneering role in implementing and structured manner in line with global norms so as to protect environmental degradation and ensure REVIEW OF FINANCIAL RESULTS AND sustainable banking practices. DBBL believes that Green FINANCIAL POSITION OF THE BANK Banks or environmentally responsible banks do not only improve their own standards but also affect socially Summary responsible behavior of other businesses. Operating profit: DBBL, with the support of FMO, has established The operating profit of the Bank during the year 2020 an international standard Environmental & Social has decreased due to lending interest rate cap at 9.0% Management System (ESMS) of its own by the technical since April 2020 and adverse impact of Covid-19 pandemic assistance of a 3rd party consultant viz. F.I. Konsult from during the period from March to December 2020. The Czech Republic. As part of the capacity development contribution of operating profit decreased mainly decrease program, DBBL has completed, among others, revision of of net interest income and foreign trade income. Protect its existing Green Banking policy along with internationally it from more deterioration by proper management of accepted exclusion list and launched Environmental & deposit mix, diversification of loan portfolio, increase of Social (E&S) Categorization Tool (Environmental Risk loan at 6.7%, decrease of NPL, recovery of written off Rating) in excel based software as per ERM guidelines of loan, utilization of surplus fund & effective management Bangladesh Bank and international best practices. of treasury operation. DBBL complies with environmental standard while The deposit of the Bank increased by 20.0% from Taka financing industrial projects. Projects with likely adverse 302,159.2 million in 2019 to Taka 362,611.0 million in 2020, impact on environment are strongly discouraged by loans and advances increased by 6.7% from Taka 256,239.7 DBBL. We are trying to incorporate sound environmental million to Taka 273,382.9 million in 2020 while export management process in business operations of projects business of the Bank decreased by 23.0% and import financed by us that can ensure healthy and sustainable business decreased by 10.9%. Operating profit decreased lives for our future generations. DBBL introduced a by 6.7% from Taka 11,260.0 million to Taka 10,501.3 million guideline demanding assessment of environmental and in 2020 and net profit after tax increased from Taka social impacts of the projects to ensure that operations of 4,341.4 million to Taka 5,498.7 million in 2020 showing a the projects would be eco-friendly. growth of 26.7%. Negative growth in net interest income DBBL is sponsoring social awareness (-20.6%) and non-interest income (-7.1%) resulted in 1.2% programs for protecting the environment. negative growth in revenue income. Actual expenses growth is attributable to expansion of branch, Fast Track Environmental degradation and depletion of natural & ATM network; mobile & agent banking operation, resources are matters of great concern in Bangladesh operation of robust IT platform & online banking, strategic like anywhere in the world. Environmental degradation promotional activities and improved customer services is taking place due to poverty, over population and lack provided through multiple delivery channels to millions of of awareness about the environment. It is manifested customers. Net profit after tax increased (+26.7%) mainly by deforestation, destruction of wetlands, depletion of due to lower provision for loans and advances in 2020. soil nutrients etc. Natural calamities like floods, cyclones Return on equity was 18.4% in 2020 compared to 17.2% in and tidal bores also result in severe socio-economic and 2019. Return on assets was 1.3% in 2020 as compared to environmental damage. DBBL has been continuously 1.2% in 2019. creating social awareness to protect the environment that is essential for present and future generations. With Higher investments in IT platform, operation of online that end in view, DBBL is regularly advertising in print and banking, expansion of delivery channels like branch electronic media to develop an eco-friendly society for network, Fast Track and ATM network, mobile banking sustainable and healthy human life. services, card services as well as human resources and better services to increasingly higher client base Our Report on Green Banking Activities is set out on pages resulted positive growth 26.7% in net profit after tax 249 to 256 of this Annual Report. in 2020. However, these investments will increase

ANNUAL REPORT 2020 349 resource capacity, increase distribution network, improve in 2019 to Taka 3,615.1 million in 2020. Other operating efficiency in operations, augment resource flow to income decreased due to downward income in mobile expand customer base and ensure much better and faster banking and agent banking services. customer services. As a result, in the long term, it will bring substantial and sustainable business and financial Total operating expenses benefits for the Bank. Total operating expenses of the Bank during the year Net interest income 2020 grew by Taka 427.1 million or 2.7%. Higher operating expenses were necessary to support the long term growth During the year 2020, net interest income of the Bank strategy and overall business operations and customer downward by Taka 3,654.3 million (-20.6%) to Taka 14,129.7 million from Taka 17,784.0 million of the previous services of the Bank during the year 2020. Increased year. Net interest income decreased mainly due to lower expenses were required to support capacity building and yield on loans and advances because lending interest rate expansion of distribution network and multiple delivery cap at 9.0% since April 2020. Yield on loans and advances channels. Thirteen new branches were opened in 2020 and decreased by 1.9% to 8.4% in 2019 from in 10.3% mainly 90 new Fast Tracks & 25 ATM units were installed in 2020, due to aforesaid un sustained lower interest rate on loans while mobile & agent banking services were spread to all advances prevailing in the market with huge liquidity over the country. Installing new software, maintenance surplus leading to reduction of lending interest rates in and up gradation of IT network including ATM and Fast the market will reduce interest yield and interest margin. Track, expansion of Mobile & Agent Banking Operations However, Cost of fund stood at 1.9% in 2020 as against 2.3% of previous year. That means lower yield could be and increasing of branch network for supporting fully passed on deposits. The lower yield on loans and expanded business operations and customer services are advances is the main reason for negative growth in net attributable to higher operating expenses. interest income. The share of net interest income to the Provision for loans & advances and off- total operating income of the Bank decreased to 53.1% in balance sheet exposures 2020 compared to 66.0% of the previous year. Investment income Total provision charged for loans & advances and off- balance sheet exposures (including 1% special general During the year 2020, the investment income of the Bank provision-COVID-19) by Taka 811.5 million during the year increased by Taka 3,731.6 million to Taka 7,143.9 million 2020. The specific provision against loans and advances from Taka 3,412.2 million of the previous year. Investment has been released by Taka 33.1 million during the year for income increased mainly due to increase of investments restriction by Bangladesh Bank on down-gradation of loan in government treasury bills and bonds portfolio in 2020 classification status as per BRPD circular No. 17/2020, compare to 2019. write off of classified loans & advances and up gradation Non-interest income of classification status of borrowers by rescheduling. The general provision for unclassified loans and advances The non-interest income consists of the commission, has also been released by Taka 48.5 million during the exchange and other operating income of the Bank. Total year for relaxed loan provisioning policy of Bangladesh non-interest income of DBBL decreased by Taka 409.0 Bank on CMSME and Consumer financing. In addition, million (-7.1%) in 2020 over the previous year. Commission the Bank has kept 1% special general provision-Covid-19 and exchange income decreased by Taka 203.3 million by taka 817.5 Million for deferral loan & advances in line (-10.5%) during the year 2020 mainly due to lower volume with BB guidelines. The general provision for off-balance of import and export business although higher remittance sheet exposures has been charged by Taka 75.7 million for inflow during 2020. While other operating income reduce growth in outstanding off-balance sheet exposures at the by Taka 205.7 million (-5.4%) from Taka 3,820.8 million end of 2020. Summary of operating results The summary of operating results for the years 2020 and 2019 with the variance is given below: In million Taka Amount Particulars Variance 2020 2019 Interest income 22,195.0 25,543.9 -13.1% Interest expenses 8,065.3 7,759.8 3.9% Net interest income 14,129.7 17,784.0 -20.5% Investment income 7,143.9 3,412.2 109.4% Non-interest income 5,340.8 5,749.7 -7.1% Total operating income 26,614.3 26,946.0 -1.2% Total operating expenses 16,113.0 15,686.0 2.7% Profit before provision 10,501.3 11,260.0 -6.7% Provision for loans and advances (including special general provision - Covid-19 and off-balance sheet exposures) 811.5 3,722.5 -78.2% Other provisions 28.9 101.2 -71.4% Profit before taxes 9,660.8 7,436.3 29.9% Provision for taxation-current 3,852.5 3,283.4 17.3% Provision for taxation-deferred 309.6 (188.5) -264.2% Net profit after taxation 5,498.7 4,341.4 26.7%

COMPOSITION OF REVENUE AND EXPENSE 2020 10%

5% 10% 2% 21% 2%

21%

10% 33%

22% 64%

Interest income Interest expenses Rent and insurance

Investment income Salary and allowance Stationery, printing and advertisement Commission, exchange and brokerage Depreciation and repair of Bank’s assets Postage, stamp, Other operating income telecommunications Other expenses

ANNUAL REPORT 2020 351 Profit before taxes tax expenses for the year as compared to Taka (-) 188.5 million (credited) in 2019 as per provision of International For the year 2020, profit before taxes of the Bank Accounting Standard (IAS) - 12. increased by Taka 2,224.5 million or 29.9% to Taka 9,660.8 million from Taka 7,436.3 million of previous year. Net profit after taxation This growth was mainly attributed due to lower provision The net profit after taxation increased by Taka 1,157.4 of loans and advances in 2020. million to Taka 5,498.7 million (+26.7%) from Taka Provision for taxation 4,341.4 million of the preceding year. The increased after tax profit is attributed to lower provision for loans and As per Income Tax Ordinance, 1984, an amount of Taka advances. However, this profit after tax contributed to 3,852.5 has been charged as provision for current tax Tier 1 capital as well as total capital adequacy ratio of the for the year 2020 compared to Taka 3,283.4 million of Bank under Basel-III strengthening the capital base and 2019. Taka 309.6 million has been charged as deferred widening business opportunities for the Bank. Significant profitability ratio The key profitability performance indicators for the years 2020 and 2019 are furnished below:

Year Deviation Particulars 2020 2019 (%) Net interest margin 63.7% 69.6% -6.0% Non-interest income to total income 15.4% 16.6% -1.2% Cost - income ratio 60.5% 58.2% 2.3% Profit after tax to total income 15.9% 12.5% 3.3% Return on average assets (ROA) 1.3% 1.2% 0.1% Return on average equity (ROE) 18.4% 17.2% 1.2%

63.7%

15.4%

60.5%

15.9%

1.3%

18.4% Summary of quarterly operating results The summary of quarterly operating results for the years 2020 with the year-to-year variance is given below: In million Taka

2020 Variance Particulars 2019 Q1 Q2 Q3 Q4 Total (%)

Interest income 6,076.7 5,320.6 5,002.0 5,795.7 22,195.0 25,543.9 -13.1%

Interest expenses 1,925.4 2,587.9 1,732.8 1,819.2 8,065.3 7,759.8 3.9%

Net interest income 4,151.3 2,732.7 3,269.2 3,976.5 14,129.7 17,784.0 -20.5%

Investment income 1,265.5 2,011.1 1,812.2 2,055.0 7,143.9 3,412.2 109.4%

Non-interest income 1,197.2 1,303.1 1,223.5 1,617.0 5,340.8 5,749.7 -7.1%

Total operating income 6,614.0 6,046.8 6,304.9 7,648.6 26,614.3 26,946.0 -1.2%

Total operating expenses 4,584.1 4,059.4 4,085.9 3,383.6 16,113.0 15,686.0 2.7%

Profit before provision 2,029.9 1,987.4 2,219.0 4,265.0 10,501.3 11,260.0 -6.7%

Provision for loans and advances (including special general provision - Covid 19 and off- balance sheet exposures) 482.4 (190.2) 76.1 443.2 811.5 3,722.5 -78.2%

Other provisions - - - 28.9 28.9 101.2 -71.4%

Profit before taxes 1,547.4 2,177.6 2,143.0 3,792.8 9,660.8 7,436.3 29.9%

Provision for taxation -current 864.8 804.3 901.5 1,282.0 3,852.5 3,283.4 17.3%

Provision for taxation - deferred (72.2) (35.9) (52.2) 469.8 309.6 (188.5) -264.2%

Net profit after taxation 754.9 1,409.2 1,293.7 2,041.0 5,498.7 4,341.4 26.7%

REVIEW OF BALANCE SHEET Total assets Total assets of the Bank as at 31 December 2020 stood at Taka 472,355.4 million compared to Taka 390,362.0 million of 2019 registering a growth by Taka 81,993.4 million or 21.0%. Loans and advances is the largest component of assets followed by investments.

ANNUAL REPORT 2020 353 Summary of assets The composition of assets vis-à-vis the assets mix and growth are furnished below: In million Taka Year Growth Mix (%) Particulars 2020 2019 (%) 2020 2019

Cash in hand (including foreign currencies) 17,030.1 16,437.9 3.6% 3.6% 4.2%

Balance with Bangladesh Bank and its agent bank (including foreign currencies) 23,858.7 25,555.9 -6.6% 5.1% 6.5%

Balance with other banks and financial institutions 13,256.6 10,387.0 27.6% 2.8% 2.7%

Money at call and short notice - - - - -

Investments 112,589.8 55,104.8 104.3% 23.8% 14.1%

Loans and advances 273,382.9 256,239.7 6.7% 57.9% 65.6%

Fixed assets 7,882.8 5,380.6 46.5% 1.7% 1.4%

Other assets 24,354.5 21,256.1 14.6% 5.2% 5.4%

Total 472,355.4 390,362.0 21.0% 100.0% 100.0%

COMPOSITION OF ASSETS (%) 5.2% 3.6% 1.7% 5.1%

2.8%

23.8%

57.9%

Loans and advances Fixed assets Other assets Cash in hand

Balance with Bangladesh Bank Balance with other banks Investments Cash in hand and balances with Bangladesh The Bank was able to maintain adequate cash reserve Bank and its agent bank(s) including requirement (CRR) and statutory liquidity ratio (SLR) foreign currency successfully throughout the year 2020. As at 31 December 2020, cash in hand and balances with Bangladesh Bank and its agent banks (including foreign currencies) stood at Taka 40,888.8 million as against Taka 41,993.8 million of 2019 registering a negative 21.0% growth by Taka 1,105.0 million or (-2.6%). “Cash is better than bad assets”, considering the doctrine Bank has Totalassets increased by 21.0% managed cash withdrawing cash from risk borrowers for subsequent investment to Bangladesh Bank Treasury compared to previous year. bill/bonds. It also accumulated cash to manage risk weighted assets at year end. Balance with other banks and financial 3.6% -6.6% institutions Cash in hand (including Balance with Bangladesh Bank A portion of the excess fund, if any, after meeting the foreign currencies) increased and its agent bank (including requirement to finance loan portfolio, is placed with by 3.6% compared to previous foreign currencies) decreased by banks and financial institutions as term deposits for year -6.6% compared to previous year. optimizing profit of the Bank. Apart from that, the Treasury Division of the Bank (TFO) has to maintain some special notice deposit (SND) accounts and current deposit 27.6% 00% (CD) accounts with other banks and financial institutions Balance with other banks Money at call and short in and outside the country for smooth functioning of and financial institutions notice remained unchanged treasury operations and trade finance. The balance assets increased by 27.6% compared to previous outstanding with other banks and financial institutions compared to previous year. year. increased to Taka 13,256.6 million at the end of 2020 from Taka 10,387.0 million at the end of 2019. 104.3% 6.7% Money at call and short notice Investments increased Loansand advances The balance of money at call and short notice at the year by 104.3% compared to increased by 6.7% end of 2020 and 2019 was nil. previous year. compared to previousyear. Investments The Bank’s investments at year end 2020 was Taka 112,589.8 million against Taka 55,104.8 million of 2019. 46.5% 14.6% The investments mainly included Government securities Fixed assets increased Otherassets increased for Taka 106,709.9 million (94.8%) of total investments by 46.5% compared to by 14.6% compared to maintained to cover SLR requirement and intake of previous year. previous year. mandatory devolvement of treasury bonds/treasury bills by Bangladesh Bank. In addition, investments Loans and advances were planned in a way to provide sufficient liquidity and flexibility in treasury operations and to boost the income Loans and advances of the Bank stood at Taka 273,382.9 from investments as well as total profitability of the Bank. million at the end of 2020, with a growth of 6.7% over Taka 256,239.7 million at the end of 2019 although which Treasury team of the Bank was very much watchful and given the interest income with 13.1% negative growth. active to manage market risk & uncertainty and to ensure maximum return from investments in security, bonds, The Bank continued to diversify its portfolio in 2020 to term deposits and overnight lending, in a market that have a diversified client base and portfolio distributed was characterized by increasing liquidity surplus and across the sectors to reduce client specific and industry falling yield throughout the year 2020 with record foreign specific concentration and to reduce overall portfolio exchange reserve of Bangladesh Bank reaching USD 36.0 risk. At the end of 2020, DBBL’s total retail loan portfolio billion in FY 2020 (USD 32.7 billion in FY 2019). However, was Taka 26,421.3 million (+9.7%) of total loan portfolio) at the end of the year Taka was weaker than USD as compared to Taka 15,570.6 million at the end of 2019. At compared to exchange rate at the beginning of the year.

ANNUAL REPORT 2020 355 the end of 2020, DBBL’s total SME loan portfolio stood of total loan portfolios decreased to 2.2% at the end of at Taka 35,428.7 million (+13.0%) of total loan portfolio) 2020 compared to 4.4% at the end of 2019. However, compared to Taka 34,744.6 million of 2019. interest was suspended & transferred to non-accrual The Bank has given atmost importance in recovery of account and provision as per regulatory requirement NPL throughout the year and strengthen the recovery against all classified loans and advances. Recovery Team team in Special Asset Management Division (SAMD) have also been making intensified efforts for recovery & of the Bank. Recently the NPL of the Bank reduced regularization of probable and already classified loans and advances. substantly. Classified loans of the Bank as a percentage

Summary of loans and advances with the risk status

The summary of loans and advances with the risk status is given below: In million Taka

Position as of 31 December Variance Particulars 2020 2019 (%)

Total loans and advances 273,382.9 256,239.7 6.7%

Less: Total provision for loans and advances 7,799.0 7,924.0 -1.6%

Less: Total balance in interest suspense account 4,841.7 3,433.7 41.0%

Net loans and advances 260,742.2 244,882.0 6.5%

Classified loans

Substandard 2,743.3 4,777.6 -42.6%

Doubtful 283.6 1,517.8 -81.3%

Bad / loss 2,895.0 4,934.7 -41.3%

Total classified loans and advances 5,921.9 11,230.1 -47.3%

Net classified loans (6,718.9) (127.6) 5166.0%

Particulars 2020 2019 Deviation

Classified loans as % of total loans

Substandard 1.0% 1.9% -0.9%

Doubtful 0.1% 0.6% -0.5%

Bad / Loss 1.1% 1.9% -0.9%

Total 2.2% 4.4% -2.2%

Net classified loans as a % of net loans -2.6% -0.1% -2.5% Total liabilities The Bank’s outside liabilities (except shareholders’ equity) as at 31 December 2020 increased to Taka 440,098.8 million compared to Taka 362,918.7 million at the end of 2019 showing a growth of 21.3% Deposit, the biggest component of liabilities stood at 82.4% of total liabilities as at 31 December 2020 compared to 83.3% of the preceding year-end.

Summary of liabilities (except shareholders’ equity)

The summary of liabilities along the growth is furnished below: In million Taka

Position as of 31 December Variance Particulars 2020 2019 (%)

Borrowing from other banks, financial institutions and 25,796.1 18,919.5 36.3% agents

Deposits

Current and other deposits including bills payable 93,017.4 70,652.4 31.7%

Savings deposits 170,213.6 145,754.0 16.8%

Term deposits 99,380.0 85,752.8 15.9%

Total deposits 362,611.0 302,159.2 20.0%

Other liabilities 37,691.8 31,309.4 20.4%

Subordinated debt 14,000.0 10,530.6 32.9%

Total liabilities 440,098.8 362,918.7 21.3%

Deposits of savings and current accounts as well as amount of deposits increased substantially in 2020. The share of The deposits grew by Taka 60,451.8 million in 2020 from Taka 302,159.2 million to Taka 362,611.0 million cost free or low cost deposits increased to 83.2% of total showing a growth of 20.0%. The growth was supported deposits in 2020 (82.4% in 2019). by expansion of distribution network; by opening 13 The savings deposits of the Bank increased by Taka new branches, 25 new ATM units and 90 Fast Tracks 24,459.6 million to Taka 170,213.6 million from Taka at different rural and urban locations throughout the 145,754.0 million of the preceding year showing a growth country. DBBL’s deposit mix further improved in 2020. of 16.8%. The share of high cost deposits decreased Online banking with expanded ATM network and tailor to 16.8% of total deposits in 2020 from 17.6% of the made products and customer services helped increase preceding year with the absolute amount of fixed confidence of customers in DBBL. As a result, number deposits increased by Taka 7,606.3 million.

ANNUAL REPORT 2020 357 Deposit growth and mix

The growth and deposit mix at the end of 2020 and 2019 are furnished below: In million Taka

Outstanding amount Growth Deposit Mix (%) Particulars 2020 2019 (%) 2020 2019 Difference

Current and other accounts 93,112.6 70,757.8 31.6% 25.7% 23.4% 2.3%

Savings deposits 170,213.6 145,754.0 16.8% 46.9% 48.2% -1.3%

Special notice deposits (SND) 38,370.8 32,339.7 18.6% 10.6% 10.8% -0.2%

Fixed deposits 60,914.0 53,307.7 14.3% 16.8% 17.6% -0.8%

Total 362,611.0 302,159.2 20.0% 100.0% 100.0% -

DEPOSIT MIX 2020 (%) DEPOSIT MIX 2019 (%)

16.8% 25.7% 17.6% 23.4%

10.6% 10.8%

46.9% 48.2% Borrowing from other banks, financial the capital of the Bank. Subordinated bonds are eligible institutions and agents as Tier 2 capital of the Bank subject to the regulatory conditions. Borrowing from other banks, financial institutions and agents stood at Taka 25,796.1 million at the end of 2020 Shareholders’ equity compared to Taka 18,919.5 million at the end of 2019. Regulatory requirement stipulates that the Bank should There was no overnight borrowing from call market at the have 12.5% capital to risk-weighted asset ratio (CRAR) as end of the year. per Basel-III or Taka 4,000.0 million whichever is higher. The Bank’s borrowing includes borrowing against As at 31 December 2020, DBBL’s shareholders’ equity refinance from Bangladesh Bank for financing under (i) increased to Taka 32,256.7 million from Taka 27,443.3 housing scheme, (ii) refinance for export financing under million of 2019 registering an increase by Taka 4,813.3 Export Development Fund (EDF), (iii) Small & Medium million (+17.5%). The increase mainly resulted from Taka Enterprise financing and (iv) Financial Sector Support 5,498.7 million after tax profit. The paid up share capital Project (FSSP) and (iv) Stimulus Fund. of the Bank stood at Taka 5,500.0 million at the end of Subordinated debt 2020. The statutory reserve is Taka 9,193.0 million at the end of 2020, which remained same as of 31 December The total amount of subordinated bonds stood at Taka 2019. The paid up share capital and the statutory reserve 14,000.0 million at the end of 2020 against Taka 10,530.6 together stood at Taka 14,693.0 million as at 31 December million at the end of 2019. Subordinated bonds have been 2020. arranged from local banks/FIs mainly for strengthening

The summary of shareholders' equity is furnished below: In million Taka

Position as of 31 December Variance Particulars 2020 2019 (%)

Shareholders’ equity

Paid up share capital 5,500.0 5,000.0 10.0%

Statutory reserve 9,193.0 9,193.0 0.0%

Other reserves and share premium 2,725.2 2,660.6 2.4%

Retained earning 14,838.4 10,589.6 40.1%

Total shareholders’ equity 32,256.7 27,443.3 17.5%

Capital management plan and capital to Under Basel III guideline, the capital to risk-weighted risk-weighted asset ratio asset ratio (CRAR) at the end of 2020 stood at 17.2% compared to 15.5% of the previous year against As per Bangladesh Bank guidelines for determining regulatory requirement of minimum 12.5%. Tier 1 capital minimum capital requirement (MCR) and the capital increased to Taka 29,682.5 million being 11.1% of total of to risk-weighted asset ratio (CRAR) for banks, Basel III risk weighted assets (RWA). Supplementary capital (Tier guidelines has been in force with effect from 1 January 2 capital) stood at Taka 16,401.4 million being 6.1% of 2015. RWA.

ANNUAL REPORT 2020 359 The details of risk weighted assets, minimum capital requirement and the capital to risk-weighted asset ratio (CRAR) are given below: In million Taka

As of 31 December Variance Particulars 2020 2019 (%) Total risk weighted assets 267,462.0 239,471.3 11.7% Tier 1 capital 29,682.5 24,636.0 20.5% Tier 2 capital 16,401.4 12,556.8 30.6% Total capital 46,083.9 37,192.8 23.9% Deviation Minimum capital requirement 12.5% 12.5% - Tier 1 capital to risk-weighted asset ratio 11.1% 10.3% 0.8% Tier 2 capital to risk-weighted asset ratio 6.1% 5.2% 0.9% Total capital to risk-weighted asset ratio 17.2% 15.5% 1.7% REVIEW OF OFF - BALANCE SHEET EXPOSURES AS AT 31 DECEMBER 2020 Total outstanding amount of off-balance sheet exposures of the Bank stood at Taka 82,817.4 million at the end of 2020 from Taka 75,307.4 million of 2019. The summary of off-balance sheet exposures is furnished below: In million Taka Particulars 2020 2019 Growth (%)

Acceptances and endorsements 39,572.3 38,508.2 2.8%

Letters of guarantee 5,654.6 6,271.3 -9.8%

Irrevocable letters of credit 35,020.9 27,076.3 29.3%

Bills for collection - - -

Other contingent liabilities 2,569.7 3,451.7 -25.6%

Total 82,817.4 75,307.4 10.0%

Import-Export business During the year under review, import business of DBBL stood at Taka 127,924.6 million against Taka 143,652.8 million registering a negative growth of 10.9% while export business stood at Taka 109,085.5 million against Taka 141,688.5 million registering a negative growth of 23.0%. The summary of Import and Export business for the years 2020 and 2019 is given below:

Particulars 2020 2019 Growth (%)

Import 127,924.6 143,652.8 -10.9%

Export 109,085.5 141,688.5 -23.0%

Total 237,010.1 285,341.3 -16.9% Future outlook for Banking Industry • Rationalizing operating cost to optimize operational efficiency and effectiveness, enhancing productivity Macroeconomic scenario of resources. Bangladesh Bank's policy are designed to keep price • Running adequate liquidity to ensure smooth stability supporting growth to create employment transactions including that of ATMs, mobile banking opportunity in line with MDGs, vision 2022 and target of transactions and to protect the bank from exposure middle income country by 2024. Monitory policy for 2021 to excessive interest rate or liquidity crises; is also aimed to provide required quality credit to support Key targets in 2021 government's growth and inflation targets keeping in mind to provide financial & external stability with Keeping in view the above goals, in the business plan and consideration of global & domestics risks. budget for 2021, deposits are projected to Taka 400,000.0 million (+10.3%) and loans are projected to Taka Business and financial plan 2021 347,400.0 million (+27.2%). Import and export businesses Within the context of above noted macroeconomic are expected to grow by 74.3% and 32.4% to Taka scenario, picking-up business confidence, investment 185,000.0 million and Taka 175,000.0 million respectively. and interest rate in the market resulting from liquidity With improved deposit mix, better quality of assets, condition, DBBL has formulated its business and financial growing funded and non-funded business particularly plan for 2021. those related to corporate business and value added online services, and increased productivity of resources, Strategic goals of business & financial plan 2021 healthy growth in operating profit and after tax profit is • Be cautiously optimistic about business prospect in expected in 2021. 2021 considering present liquidity of the industry; Strategies to achieve the business & • Strengthening risk management to protect against financial goals in 2021 any unusual risk arising from uncertainty in local The above growth will be supported by expansion of market and international economic & financial crisis Branches, ATM/CRM/FT, Agent Outlet, Sub-Branch upon consideration of latest Bangladesh Bank’s network and further up-gradation of IT and online guidelines; banking system through NexusPay to provide better and • Expanding funded and non-funded business growth faster services to customers. Mobile and Agent banking while ensuring quality of portfolio and limiting operation will be expanded further. Organizational risk, In this respect, the organizational structure of structure and business process will be further streamlined the bank has been changed mainly strengthening to improve efficiency & productivity, rationalize cost and focusing on streamlining business operations and enhance customer satisfaction. Human resources and expansions by centralizing credit operations , will be further strengthened through motivations and marketing and decision making. incentives to improve operational efficiency, productivity • Containing cost of fund by opening new savings and performance. A number of new products and services deposit accounts, introducing value added retail particularly in mobile banking and agent banking, SME deposit products & services and increasing the and retail segments will be introduced to provide wider amount and percentage of low cost deposits; choice and convenience to the customers.

Appropriation of profit The financial results and appropriation of profit for the year 2020 and 2019 are given below: In million Taka Particulars 2020 2019

Net profit after tax 5,498.7 4,341.4

Appropriations

Retained surplus to retained earnings 5,498.7 4,341.4

The Bank earned a net profit after tax of Taka 5,498.7 million in 2020 that was 26.7% higher than Taka 4,341.4 million in 2019.

ANNUAL REPORT 2020 361 Key financial information and ratios for • Proper books and accounts of the Bank have been last five years maintained.

Key financial information and ratios for last five years are • Appropriate accounting policies, including International Accounting Standards (IAS)/ set out on page no. 28 of this Annual Report. International Financial Reporting Standards Segment Analysis (IFRS), as applicable in Bangladesh, have been consistently applied in preparation of the financial Segment Analysis are set out on page no. 35 to 36 of this statements. Any change or deviation has been Annual Report. adequately disclosed.

CEO and CFO’s declaration certificate • Accounting estimates are based on reasonable and prudent judgment. The CEO and CFO’s declaration to the Board is appended on page no 126 of this Annual Report. • Minority shareholders have been duly protected as have effective means of redress. Management’s Discussion and Analysis • No significant doubt exists upon the Bank’s ability The management’s discussion and analysis of the to continue as a going concern. financials, as delivered by the Managing Director & CEO, has been provided on page no 19 to 21 of this Annual • Comparative analysis of significant deviations have Report. been highlighted and reasons have been explained in the sections above. Analysis- post Right Issue Related Party Transactions IPO was made in 2001 and the IPO fund were used for Disclosure of all related party transactions, including acquisition of fixed assets and lending. basis for such transactions, has been provided in Note Shareholding Pattern no. 50 of the financial statements in page no. 452 of this Annual Report. DBBL’s shareholding pattern as on December 31, 2020, is disclosed as per BSEC on page no. 25 of this Annual Remuneration of the directors Report. The information on remuneration of the directors of the Corporate and Financial Reporting Bank has been provided in Note no. 39 of the financial Framework statements in page no. 446 of this Annual Report.

The Directors of the Bank, in conformance with the BSEC Election of the Directors Notification No. SEC/CMRRCD/2006-158/207/Admin/80 In terms of Article 113 of the Articles of Association of the dated 3 June 2018, confirm compliance with the financial Company, at every Ordinary General Meeting, one-third reporting framework for the following: of the Directors for the time being or if their number is • The financial statements, prepared by the not three or multiple of three, then the number nearest management of the Bank make a fair presentation to one-third shall retire from the office. Accordingly, as of its activities, operational details and results, per Article 114, Mr. Abedur Rashid Khan will retire from cash flow information and changes in equity the office of Director. He is eligible for re-election/re- structure. appointment. He offered himself for re-election. Meetings of the Directors Status of Compliance Status of the compliance of conditions of Corporate 10 Meetings of the Board of Directors, 43 Meetings of Governance Code imposed by the Bangladesh Securities the Executive Committee of the Board, 11 Meetings of and Exchange Commission’s Notification No. SEC/ the Audit Committee of the Board and 07 Meetings of CMRRCD/2006-158/207/Admin/80 dated 3 June 2018 the Risk Management Committee of the Board were held along with a certificate from a practicing Chartered during the year under review. Secretary has been enclosed on page no. 107 to 120 of this annual report. Dividend policy for sustainable growth and Gratitude maximize shareholder value The members of the Board of Directors of DBBL would DBBL’s dividend policy is designed in a way to ensure like to express their gratitude to all shareholders, valued sustainable growth of the Bank with strong capital clients, patrons, all employees and well-wishers for their adequacy ratio, which must maximize value for continued support and cooperation, without which the shareholders. DBBL paid 15% cash dividend and 10% Bank would not be able to achieve its present amazing stock dividend for 2019. position. We are also indebted to the Government of Bangladesh, Bangladesh Bank, Bangladesh Securities and Proposed Annual Dividend: The Bank proposed Exchange Commission, Office of the Registrar of Joint dividend for 2020 @ 15% cash and 15% stock. Stock Companies & Firms, Dhaka Stock Exchange and Chittagong Stock Exchange for their continued support Interim Dividend: No cash or stock dividend was and cooperation. declared as interim dividend during 2020. The Bank We look forward for your continuous support and best have no such plan yet. wishes for meeting the future challenges awaiting us in Appointment of Auditors the fiercely competitive financial market and satisfying ever increasing expectation of our customers, patrons Our existing Auditors Hoda Vasi Chowdhury & Co., and well wishers. Chartered Accountants has completed audit for the With best regards year ended 2020 as second year of their audit and as per Bangladesh Bank’s BRPD Circular Letter No. 12 On behalf of the Board of Directors dated 11 July 2001 and order of Bangladesh Securities and Exchange Commission dated 08 July 2015, they are eligible for re-appointment for 2021. They will be Sayem Ahmed appointed and their remuneration will be fixed for the Chairman year 2021 by the Honorable Shareholders in this Annual General Meeting.

ANNUAL REPORT 2020 363 Directors’ responsibility for internal control Effective Internal Audit Department with and financial reporting Direct Access and Reporting to Audit The Board of Directors of DBBL is responsible to cause Committee of the Board preparation and true & fair presentation of the annual Inter Control & Compliance Division (IC&CD) of the Bank financial statements of 2020 and other financial work under close coordination with Audit Committee of information and reports contained in this annual report by the Board for ensuring better internal control, effective the management. The accompanying financial statements operational procedure and reliable financial reporting. have been prepared in accordance with International IC&CD undertakes details audit of the activities of Accounting Standards as adopted by Institute of Chartered branches and head office on a regular basis. It’s reports are Accountants of Bangladesh and Companies Act 1994, presented directly to Audit Committee of the Board. IC&CD Bank Companies Act 1991 (as amended up to date) and has also direct access to the Audit Committee of the Board Securities and Exchange Rules 1987 with all updated to discuss any matter related to their audit, adequacy of amendments as considered relevant and appropriate internal control procedure and compliance as well as overall under the circumstances. In cases where amounts are risk management of the Bank. stated based on estimate those are based on informed judgment and estimate made by the management and External Auditors has full access to the agreed by Board of Directors. The financial information and Audit Committee of the Board for ensuring data provided in this annual report is fully consistent with effectiveness of internal control procedure financial statements. and reliability of financial reporting The Board is responsible for ensuring Hoda Vasi Chowdhury & Co., Chartered Accountants is Adequate Internal Control external auditors of the Bank for auditing annual financial The Board of Directors is responsible for ensuring adequate statements for the year 2020. Hoda Vasi Chowdhury & Co. internal control on financial transactions and reporting. In keeps an understanding of DBBL’s internal control system order to ensure effective risk management, the Board also for preparation of financial statements and financial ensures that adequate internal control system is in place reporting and undertakes such auditing tests and other and it is consistently complied with to provide reasonable auditing procedures as may be considered appropriate assurance that financial records are reliable for preparation under the circumstances to express its independent of financial statements, that quality of financial reporting opinion on the financial statements that follow. The is maintained, that assets of the bank are safeguarded auditors Hoda Vasi Chowdhury & Co. has full access to the against unauthorized use or disposition and that Audit Committee to discuss any matter related to its audit accountability for assets and business transactions are to ensure reliability of financial reporting and effectiveness maintained. The Board monitors and updates internal of internal control procedure. control procedure on a continuous basis. The Board understands that despite taking all cares, Internal control, accounting policies and any internal control system may have limitations in it’s financial reporting under direct supervision effectiveness. However, the Board believes that effective of Audit Committee of the Board that is control was maintained over preparation of financial fully comprised of non-executive members statements as of and for the year ended 31 December of the Board and independent of executive 2020. management With best regards DBBL’s internal control, accounting policies and financial reporting are under direct supervision of the Audit On behalf of the Board of the Directors Committee of the Board that in turn report to the Board of Directors for general oversight and supervision. Audit Committee of the Board is fully independent of executive management. The Committee regularly reviews reports prepared by Internal Control & Compliance Division (IC&CD) Sayem Ahmed covering all the business operations of the Bank with particular focus on core risks. Chairman auditors' report

INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF DUTCH-BANGLA BANK LIMITED

Report on the audit of the financial statements those standards are further described in the auditor’s responsibilities for the audit of the financial statements Opinion section of our report. We are independent of the Bank in accordance with the International Ethics Standards We have audited the financial statements of Dutch Board for Accountants’ Code of Ethics for Professional Bangla Bank Limited (the “Bank”), which comprise the Accountants (IESBA Code), requirements of Bangladesh balance sheet as at 31 December 2020, and the profit and Securities and Exchange Commission (BSEC) and loss account, statement of changes in equity and cash Bangladesh Bank, and we have fulfilled our other ethical flow statement for the year then ended, and notes to the responsibilities in accordance with the IESBA Code and the financial statements, including a summary of significant Institute of Chartered Accountants of Bangladesh (ICAB) accounting policies. Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis In our opinion, the accompanying financial statements of for our opinion. the Bank give a true and fair view of the balance sheet as at 31 December 2020, and of its profit and loss accounts Key audit matters and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) Key audit matters are those matters that, in our as explained in note 2 and other applicable laws and professional judgement, were of most significance in the regulations. audit of the current period. These matters were addressed in the context of the audit of the financial statements, Basis for opinion and in forming the auditor’s opinion thereon, and we do We conducted our audit in accordance with International not provide a separate opinion on these matters. For each Standards on Auditing (ISAs). Our responsibilities under matter below our description of how our audit addressed the matter is provided in that context.

Risks Our Response to the Risk Measurement of provision for loans and advances The process for estimating the provision for loans and We tested the design and operating effectiveness of key advances portfolio associated with credit risk is significant controls focusing on the following: and complex. • Credit appraisal, loan disbursement procedures, For the individual analysis, these provisions consider the monitoring and provisioning process; estimates of future business performance and the market value of collateral provided for credit transactions. • Identify loss events, including early warning and default warning indicators; For the collective analysis, these provisions are manually processed that deals with voluminous databases, • Reviewed quarterly classification ledger of loans and advances (CL); assumptions and calculations for the provision estimates of complex design and implementation. Our substantive procedures in relation to the provision for loans and advances portfolio comprised the At year end of 2020 the Bank reported total gross loans following: and advances of BDT 273.38 billion (2019: BDT 256.24 billion) whereas at the year end of 2020 the Bank reported • Reviewed the adequacy of the general and specific total provision for loans and advances of BDT 7.47 billion provisions in line with related Bangladesh Bank (2019: BDT 7.79 billion). guidelines;

ANNUAL REPORT 2020 367 Risks Our Response to the Risk

Furthermore as per BRPD circular no 56 dated 10 December • Assessed the methodologies on which the provision 2020, additional 1% provision is required for clients who amounts based, recalculated the provisions and tested the completeness and accuracy of the have taken the deferral facility and shown as special underlying information; general provision- COVID 19 under other liabilities. • Assessed the appropriateness and presentation of disclosures against relevant accounting standards We have focused on the following significant judgements and Bangladesh Bank guidelines; and and estimates which could give rise to material • Finally compared the amount of loan provision misstatement or management bias: and loan classification disclosed in the financial statements with the quick summary report prepared • Completeness and timing of recognition of loss events by Bangladesh Bank in accordance with criteria set out in BRPD circular no Considering the unprecedented adverse impact on Bangladesh economy due to COVID 19, Bangladesh Bank 14, dated 23 September 2012 and BRPD circular no 03, has instructed Banks not to further downgrade any loan dated 21 April 2019; from its existing classification applicable as at 1 January 2020. Initially the duration of this moratorium for any • For individually assessed provisions, the measurement further downgrade was up to 30 June 2020 and then up of the provision may be dependent on the valuation of to 30 September 2020 but considering longer adverse impact of COVID-19 this has been further extended to collateral, estimates of exit values and the timing of 31 December 2020 vide BRPD Circular # 17 dated 28 cash flows; September 2020. The Bank has calculated required provision as per Provision measurement is primarily dependent upon key Bangladesh Bank letter DBI-1/57/2021-532 dated assumptions relating to probability of default, ability to 3 March 2021 considering total classified loans and advances of Tk 8,285,326,000 (3.21%). However, as per repossess collateral and recovery rates. the earlier BRPD circular referred above, the Bank has not downgraded any loans and advances from its earlier classification status as at 31 December 2019 and hence instead of the revised classification referred above, the Bank has maintained the earlier classification status (Tk 5,921,867,925 or 2.29%). Accordingly, the amount and percentage of classified loan has improved as at 31 December 2020 as compared to 31 December 2019 since no additional classification or further downgrade of classified loans and advances have been recognized during the current year.

See note # 9 & 14.1.3 to the financial statements Interest income recognition Considering the adverse impact on economy form Interest has been accrued in full on all unclassified loan COVID-19, Bangladesh Bank vide circular # 11 dated 3 May balances at relevant rates (maximum of 9% since 1 April 2020 has advised Banks to transfer all interest charged 2020) considering the entire amount as recoverable from or chargeable on outstanding loans and advances for the the client and the Government (waived portion). period from 1 April to 31 May 2020 to “interest free blocked On test basis we have checked a sample of loan accounts account” without realizing those from clients and/or to assess whether the Bank has complied with the taking those to income. instruction referred herein. Risks Our response to the risk

Subsequently, on 10 June 2020 vide BRPD Circular no 12, We have also reviewed the memorandum prepared by Bangladesh Bank has allowed banks to transfer interest management for the approval of the audit committee and from “interest-free blocked account” to income upon the Board for recognition of income from deferral accounts. waiving certain portion of interest based on outstanding However, due to the current uncertainty of the overall loan balances. These loan balances would be receivable economic situation both in Bangladesh and Globally from Government as “subsidy”. Furthermore, net there are inherent risk that the judgment applied by amount of interest after giving waiver for the months of Management in assessing recoverability of interest April and May 2020, shall be recoverable from the client income may be different than the actual situation in during the next twelve months on equal installments future. If it became worse, there is a risk that significant or as per cash flow of the client based on banker-client portion of interest accrued during the year ended 31 relationship. December 2020 may not be ultimately recoverable. Finally, as per BRPD circular letter no 56 dated 10 December 2020 Bangladesh Bank has allowed the Bank to recognize interest income for clients taking the deferral facility without receiving cash repayment, subject to the compliance of certain criteria,such as approval by management, audit committee and the Board based on applying judgement.

See note # 9 & 14.1.3 to the financial statements

Measurement of deferred tax assets

At year end of 2020 the Bank reported total deferred We obtained an understanding, evaluated the design tax assets of BDT 2.27 billion (2019: BDT 2.58 billion) and tested the operational effectiveness of the Bank’s and deferred tax expense of BDT 309.57 million (2019: key controls over the recognition and measurement deferred tax income BDT 188.48 million). of DTAs and the assumptions used in estimating the Significant judgment is required in relation to deferred Bank’s future taxable income. tax assets as their recoverability is dependent on forecasts of future profitability over a number of years. We also assessed the completeness and accuracy of the data used for the estimations of future taxable income. The Bank has sufficient taxable profit to recover the deferred tax assets in foreseeable future.

We involved tax specialists to assess key assumptions, controls, recognition and measurement of DTA’s.

Finally assessed the appropriateness and presentation of disclosures against IAS 12 Income Tax including deduction of DTA on specific provision from regulatory capital.

See note no 11.2.2 to the financial statements

ANNUAL REPORT 2020 369 Risks Our response to the risk IT systems and controls

Our audit procedures have a focus on IT systems and We tested the design and operating effectiveness of the controls due to the pervasive nature and complexity of Bank’s IT access controls over the information systems the IT environment, the large volume of transactions that are critical to financial reporting. processed in numerous locations daily and the reliance on automated and IT dependent manual controls. We tested IT general controls (logical access, changes management and aspects of IT operational controls). Our areas of audit focus included user access management, developer access to the production This included testing that requests for access to environment and changes to the IT environment. These systems were appropriately reviewed and authorized. are key to ensuring IT dependent and application based We tested the Bank’s periodic review of access rights controls are operating effectively. and reviewed requests of changes to systems for appropriate approval and authorization.

We considered the control environment relating to various interfaces, configuration and other application layer controls identified as key to our audit.

Implementation of IFRS 16 Leases The Bank has adopted IFRS 16 for the first time during In responding to the identified key audit matter, we the current period effective from the last quarter 2020, completed the following audit procedures: due to ongoing pandemic. Assessed the design and implementation of key IFRS 16 modifies the accounting treatment of operating controls pertaining to the determination of the IFRS 16 leases at inception, with the recognition of a right of Leases impact on the financial statements of the Bank; use (ROU) on the leased asset and of a liability for the lease payments over the lease contract term. With Assessed the appropriateness of the discount rates respect to operating leases of premises used by the applied in determining lease liabilities; Bank, at inception of the lease, the lessor receives a right of using the premises, in exchange of a lease debt, Verified the accuracy of the underlying lease data by using an implicit discount rate. agreeing to original contract and checked the accuracy Our key audit matter was focused on all leasing of the IFRS 16 calculations through recalculation of the arrangements within the scope of IFRS 16 are identified expected IFRS 16 adjustment; and and appropriately included in the calculation of the transitional impact and specific assumptions applied to Assessed whether the disclosures within the financial determine the discount rates for lease are inappropriate. statements are appropriate in light of the requirements of IFRS.

For identifying the individual lease contract as ‘low value item’ the Bank has applied a threshold of Tk 20 million for each lease and also considered the probability of exercising non-renewal option of those lease contract. Other information In preparing the financial statements, management is responsible for assessing the Bank’s ability to continue Management is responsible for the other information. as a going concern, disclosing, as applicable, matters The other information comprises all of the information in related to going concern and using the going concern the Annual Report other than the financial statements basis of accounting unless management either intends and our auditor’s report thereon. The Annual Report is to liquidate the Bank or to cease operations, or has no expected to be made available to us after the date of this realistic alternative but to do so. auditor’s report. Those charged with governance are responsible for Our opinion on the financial statements does not cover overseeing the Bank’s financial reporting process. other information and we do not express any form of assurance conclusion thereon. Auditor’s responsibilities for the audit of the financial statements In connection with our audit of the financial statements, our responsibility is to read the other information Our objectives are to obtain reasonable assurance about identified above when it becomes available and, in doing whether the financial statements as a whole are free from so, consider whether the other information is materially material misstatement, whether due to fraud or error, inconsistent with the financial statements or our and to issue an auditor’s report that includes our opinion. knowledge obtained in the audit or otherwise appears to Reasonable assurance is a high level of assurance, but is be materially misstated. not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement If, based on the work we have performed on the other when it exists. Misstatements can arise from fraud or information that we obtained prior to the date of this error and are considered material if, individually or in the auditor’s report, we conclude that there is a material aggregate, they could reasonably be expected to influence misstatement of this other information, we are required the economic decisions of users taken on the basis of to report that fact. We have nothing to report in this these financial statements. regard. As part of an audit in accordance with ISAs, we exercise Responsibilities of management and professional judgement and maintain professional those charged with governance for the skepticism throughout the audit. We also: financial statements and internal controls • Identify and assess the risks of material Management is responsible for the preparation and fair misstatement of the financial statements, whether presentation of the financial statements of the Bank in due to fraud or error, design and perform audit accordance with IFRSs as explained in note 2 and comply procedures responsive to those risks, and obtain with the Banking Companies Act, 1991 (as amended audit evidence that is sufficient and appropriate up to date), the Companies Act, 1994, the Rules and to provide a basis for our opinion. The risk of not Regulations issued by the Bangladesh Bank, the Rules detecting a material misstatement resulting from and Regulations issued by the Bangladesh Securities & fraud is higher than for one resulting from error, Exchange Commission (BSEC) Bank and other applicable as fraud may involve collusion, forgery, intentional Laws and Regulations,and for such internal control as omissions, misrepresentations, or the override of management determines is necessary to enable the internal control. preparation of financial statements that are free from material misstatement, whether due to fraud or error. The • Obtain an understanding of internal control relevant Bangladesh Bank guidelines require the management to to the audit in order to design audit procedures that ensure effective internal audit, internal control and risk are appropriate in the circumstances. management functions of the Bank. The management • Evaluate the appropriateness of accounting is also required to make a self-assessment on the policies used and the reasonableness of accounting effectiveness of anti-fraud internal controls and report to estimates and related disclosures made by Bangladesh Bank on instances of fraud and forgeries. management.

ANNUAL REPORT 2020 371 • Conclude on the appropriateness of management’s the matter or when, in extremely rare circumstances, we use of the going concern basis of accounting and, determine that a matter should not be communicated in based on the audit evidence obtained, whether a our report because the adverse consequences of doing material uncertainty exists related to events or so would reasonably be expected to outweigh the public conditions that may cast significant doubt on the interest benefits of such communication. Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are Report on other legal and regulatory required to draw attention in our auditor’s report to requirements the related disclosures in the financial statements In accordance with the Companies Act, 1994, the Bank or, if such disclosures are inadequate, to modify Company Act, 1991, and the rules and regulations issued our opinion. Our conclusions are based on the audit by Bangladesh Bank, the Securities and Exchange Rules evidence obtained up to the date of our auditor’s 1987, we also report that: report. However, future events or conditions may i. We have obtained all the information and cause the Bank to cease to continue as a going explanations which to the best of our knowledge concern. and belief were necessary for the purposes of our • Evaluate the overall presentation, structure and audit and made due verification thereof; content of the financial statements, including the ii. to the extent noted during the course of our audit disclosures, and whether the financial statements work performed on the basis stated under the represent the underlying transactions and events in Auditor’s Responsibility section in forming the a manner that achieves fair presentation. above opinion on the financial statements and • Obtain sufficient appropriate audit evidence considering the reports of the Management to regarding the financial information of the entities Bangladesh Bank on anti-fraud internal controls or business activities within the Bank to express and instances of fraud and forgeries as stated an opinion on the financial statements. We are under the Management’s Responsibility for the responsible for the direction, supervision and financial statements and internal control: performance of the Bank’s audit. We remain solely (a) internal audit, internal control and risk responsible for our audit opinion. management arrangements of the Bank as disclosed in the financial statements We communicate with those charged with governance, appeared to be materially adequate; among other matters, the planned scope and timing of the audit and significant audit findings, including any (b) nothing has come to our attention regarding significant deficiencies in internal control that we identify material instances of forgery or irregularity during our audit. or administrative error and exception or anything detrimental committed by We also provide those charged with governance with employees of the Bank; a statement that we have complied with relevant ethical requirements regarding independence, and to iii. in our opinion, proper books of account as required communicate with them all relationships and other by law have been kept by the Bank so far as it matters that may reasonably be thought to bear on our appeared from our examination of those books; independence, and where applicable, related safeguards. iv. the records and statements submitted by the From the matters communicated with those charged with branches have been properly maintained in the governance, we determine those matters that were of financial statements; most significance in the audit of the financial statements v. the balance sheet and profit and loss account of the current period and are therefore the key audit together with the annexed notes dealt with by the matters. We describe these matters in our auditor’s report report are in agreement with the books of account unless law or regulation precludes public disclosure about and returns; vi. the expenditures incurred and payments made x. the information and explanations required by us were for the purpose of the Bank’s business for have been received and found satisfactory; the year; xi. we have reviewed over 80% of the risk weighted vii. the financial statements have been drawn up in assets of the Bank and spent over 2,985 person conformity with prevailing rules, regulations and hours; and accounting standards as well as related guidance xii. capital to risk-weighted asset ratio (CRAR) issued by Bangladesh Bank; as required by Bangladesh Bank has been viii. adequate provisions have been made for advance maintained adequately during the year. and other assets which are in our opinion, doubtful of recovery;

ix. the records and statements submitted by the branches have been properly maintained in the financial statements;

DVC No: 2103070770AS201814 Dhaka: 06 March 2021 Sabbir Ahmed FCA, Partner Enrolment number: 770 Hoda Vasi Chowdhury & Co. Chartered Accountants

ANNUAL REPORT 2020 373

financial statements

Balance Sheet As at 31 December 2020

PROPERTY AND ASSETS Notes 2020 2019 Taka Taka Cash In hand (including foreign currencies) 4 17,030,120,126 16,437,855,873 Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) 5 23,858,695,319 25,555,947,901 40,888,815,445 41,993,803,774

Balance with other banks and financial institutions 6 In Bangladesh 12,574,309,059 9,664,575,867 Outside Bangladesh 682,321,195 722,463,012 13,256,630,254 10,387,038,879

Money at call on short notice 7 - -

Investments 8 Government 106,718,508,845 52,193,468,169 Others 5,871,283,434 2,911,283,434 112,589,792,279 55,104,751,603 Loans and advances 9 Loans, cash credits, overdrafts, etc. 257,165,934,137 239,209,515,963 Bills purchased and discounted 16,216,972,893 17,030,193,242 273,382,907,030 256,239,709,205

Fixed assets including land, building, furniture and fixtures 10 7,882,842,294 5,380,606,143 Other assets 11 24,354,460,906 21,256,136,196 Non-banking assets - - TOTAL ASSETS 472,355,448,208 390,362,045,800

LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents 12 25,796,052,059 18,919,504,632

Deposits and other accounts 13 Current deposits and other accounts 89,092,047,606 66,320,230,637 Bills payable 3,925,305,619 4,332,131,895 Savings bank deposits 170,213,630,379 145,754,017,061 Term deposits 99,380,006,141 85,752,836,476 362,610,989,745 302,159,216,069 Other liabilities 14 37,691,753,730 31,309,357,448 Subordinated debt 15 14,000,000,000 10,530,625,000 TOTAL LIABILITIES 440,098,795,534 362,918,703,149

ANNUAL REPORT 2020 377 Balance Sheet As at 31 December 2020 2020 2019 Note Taka Taka Shareholders’ equity Paid up share capital 16.2 5,500,000,000 5,000,000,000 Share premium 17 11,067,500 11,067,500 Statutory reserve 18 9,193,048,174 9,193,048,174 Other reserve 19 - - Dividend equalization account 20 1,766,827,195 1,766,827,195 Assets revaluation reserve 21 850,413,777 850,413,777 Revaluation reserve of HTM securities 22 96,905,831 32,340,447 Retained earnings 23 14,838,390,197 10,589,645,558 TOTAL SHAREHOLDERS’ EQUITY 32,256,652,674 27,443,342,651 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 472,355,448,208 390,362,045,800 OFF-BALANCE SHEET ITEMS Contingent liabilities 24 Acceptances and endorsements 39,572,273,905 38,508,239,854 Letters of guarantee 5,654,553,523 6,271,259,411 Irrevocable letters of credit 35,020,907,978 27,076,256,191 Bills for collection - - Other contingent liabilities 2,569,651,432 3,451,670,075 Total contingent liabilities 82,817,386,838 75,307,425,531

Other commitments Documentary credits and short term trade-related transactions - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - -

Total other commitments - - Total off-balance sheet items including contingent liabilities 82,817,386,838 75,307,425,531

Net Asset Value (NAV) Per Share 23.3 58.65 49.90 The annexed notes 1 to 50 form an integral part of these financial statements.

______Chairman Director Director Managing Director & CEO

Auditors' report to the Shareholders See annexed report of date

DVC No: 2103070770AS201814 ______Dhaka, 06 March 2021 Sabbir Ahmed FCA, Partner Enrolment number: 770 Hoda Vasi Chowdhury & Co. Chartered Accountants Profit and Loss Account For the year ended 31 December 2020 2020 2019 Notes Taka Taka Interest income 26 22,194,983,159 25,543,861,602 Interest paid on deposits and borrowings etc. 27 8,065,280,264 7,759,845,166 Net interest income 14,129,702,895 17,784,016,436 Investment income 28 7,143,871,577 3,412,225,985 Commission, exchange and brokerage 29 1,725,671,452 1,928,953,326 Other operating income 30 3,615,083,897 3,820,779,393 Total operating income 26,614,329,821 26,945,975,140 Salary and allowances 32 5,219,592,498 4,808,522,669 Rent, taxes, insurance, electricity, etc. 34 2,326,134,531 2,181,287,658 Legal expenses 35 2,359,569 2,130,439 Postage, stamp, telecommunications, etc. 36 377,009,483 347,951,521 Stationery, printings, advertisements, etc. 37 404,615,350 618,152,444 Managing Director & CEO’s salary and allowances 38 14,670,000 10,750,000 Directors’ fees 39 228,000 265,000 Auditors’ fees 40 609,500 834,250 Depreciation and repair of bank’s assets 41 2,337,846,612 2,177,156,910 Other expenses 42 5,429,948,523 5,538,908,673 Total operating expenses 16,113,014,066 15,685,959,564 Profit before provision 10,501,315,755 11,260,015,576 Provision for loans and off-balance sheet exposures 14.1.3 Specific provision for loans 14.1.3(A) (33,091,881) 3,351,539,058 General provision for loans 14.1.3(B) (48,549,711) 419,528,740 Special general provision - Covid 19 for loans 14.1.3(B) 817,531,599 - General provision for off-balance sheet exposures 14.1.3(B) 75,652,163 (48,600,024) 811,542,170 3,722,467,774 Other provision 14.1.1.1 28,935,000 101,221,000 Total provision 840,477,170 3,823,688,774 Profit before taxes 9,660,838,585 7,436,326,802 Provision for taxation Current tax 14.1.2 3,852,516,597 3,283,420,884 Deferred tax 11.2.2 309,577,349 (188,481,842) 4,162,093,946 3,094,939,042 Net profit after taxation 5,498,744,639 4,341,387,760 Appropriations Statutory reserve 18 - - - - Retained surplus to retained earnings 23.1 5,498,744,639 4,341,387,760 Earnings per share (EPS) 23.2 10.00 7.89 The annexed notes 1 to 50 form an integral part of these financial statements.

______Chairman Director Director Managing Director & CEO

Auditors' report to the Shareholders See annexed report of date

DVC No: 2103070770AS201814 ______Dhaka, 06 March 2021 Sabbir Ahmed FCA, Partner Enrolment number: 770 Hoda Vasi Chowdhury & Co. Chartered Accountants

ANNUAL REPORT 2020 379 Cash Flow Statement For the year ended 31 December 2020 2020 2019 Notes Taka Taka A) Cash flows from operating activities Interest receipts in cash 25,498,812,185 27,962,362,800 Interest payments (8,214,347,021) (8,098,028,983) Dividend receipts in cash 5,711,803 5,711,803 Gain on sale of shares - - Gain on sale of securities - - Recoveries of loan previously written-off 138,671,837 28,378,993 Fee and commission receipts in cash 792,670,438 752,433,229 Cash payments to employees (5,237,364,256) (4,818,793,510) Cash payments to suppliers (3,560,251,010) (2,777,764,892) Income taxes paid (4,164,359,285) (2,841,156,137) Receipts from other operating activities 43 4,529,813,126 4,979,557,128 Payments for other operating activities 44 (4,930,681,733) (7,064,129,309) Operating profit before changes in operating assets and liabilities 4,858,676,084 8,128,571,122 Increase/(decrease) in operating assets and liabilities Statutory deposits - - Purchase /sale of trading securities (47,299,253,951) (7,053,127,281) Loans and advances to other banks - - Loans and advances to customers (14,762,190,992) (27,308,465,889) Other assets 45 (1,464,127,359) (237,836,010) Deposits from other banks (81,645,298) 79,422,389 Deposits from customers 60,501,567,429 39,595,840,814 Other liabilities account of customers 10,873,774,455 (8,013,043,354) Other liabilities 46 4,543,244,265 1,234,465,907 Net cash from operating activities 17,170,044,633 6,425,827,698 B) Cash flows from investing activities Payments for purchase of securities (151,802,938,576) (52,670,959,780) Proceeds from sale of securities 141,617,748,750 36,822,957,523 Purchase of property, plant and equipment (3,979,286,638) (1,013,113,110) Sale proceeds of property, plant and equipment 36,519,042 34,115,660 Net cash used in investing activities (14,127,957,422) (16,826,999,707) C) Cash flows from financing activities Receipts from issue of loan capital and debt securities 5,000,000,000 - Payment for redemption of loan capital and debt securities (1,530,625,000) (1,042,500,000) Dividends paid (748,765,465) (415,032,609) Net cash from financing activities 2,720,609,535 (1,457,532,609) D) Net increase / (decrease) in cash (A+B+C) 5,762,696,747 (11,858,704,618) E) Cash and cash-equivalents at beginning of the year 55,551,702,197 67,410,406,815 F) Cash and cash-equivalents at end of the year (D+E) 48 61,314,398,944 55,551,702,197 Net Operating Cash Flow Per Share (NOCFPS) 31.22 11.68

Chairman Director Director Managing Director & CEO

Dhaka, 06 March 2021 ------Total 64,565,384 64,565,384 Figures in Taka 5,498,744,639 5,498,744,639 27,443,342,651 27,443,342,651 (750,000,000) 27,443,342,651 27,443,342,651 27,443,342,651 27,443,342,651 32,256,652,674 32,256,652,674 ------earnings Retained 5,498,744,639 5,498,744,639 (750,000,000) (500,000,000) 14,838,390,197 14,838,390,197 10,589,645,558 10,589,645,558 10,589,645,558 10,589,645,558 10,589,645,558 10,589,645,558 ------Managing Director & CEO ______96,905,831 64,565,384 64,565,384 32,340,447 32,340,447 32,340,447 32,340,447 32,340,447 securities Revaluation reserve of HTM ------Assets reserve 850,413,777 850,413,777 850,413,777 850,413,777 850,413,777 850,413,777 revaluation ------1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 account Dividend equalization Director ------______Other reserve ------9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174

Statutory reserve ------Director 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 ______Share premium ------

Paid up Paid 500,000,000 500,000,000 share capital 5,500,000,000 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 Particulars Chairman ______

06 March 2021 Dhaka, Balance at 31 December 2020 December at 31 Balance 2019 December at 31 Balance Appropriations during the year Appropriations Issue of share capital Transfer for dividend for the year 2019 the year dividend for for Transfer 2020 year for the Net profit Payment of dividend for the year 2019 the year of dividend for Payment Net gains and losses not recognized in and losses not recognized Net gains statement the income Currency translation differences translation Currency Surplus/deficit on account of on account Surplus/deficit of investments revaluation Restated balance Surplus/deficit on account of on account Surplus/deficit of properties revaluation Changes in accounting policy in accounting Changes Balance at 1 JanuaryBalance 2020 Statement of Changes in Equity 2020 December ended 31 the year For

ANNUAL REPORT 2020 381 Liquidity Statement (Assets and liabilities maturity analysis) As at 31 December 2020

Residual Maturities

Within Within Within Within More than Total Particulars one month one to three three to one to five five years months twelve years months Taka Taka Taka Taka Taka Taka

Assets

Cash in hand 17,030,120,126 - - - - 17,030,120,126

Balance with BB, other banks and financial institutions 3,064,676,089 9,934,587,824 1,028,271,071 - 23,087,790,589 37,115,325,573

Money at call on short notice ------

Investments 19,911,834 5,983,304,715 22,576,268,950 53,148,049,768 30,862,257,012 112,589,792,279

Loans and advances 17,566,469,388 73,071,584,813 99,063,255,522 65,445,913,937 18,235,683,369 273,382,907,030

Fixed assets including land, building, furniture and fixtures 72,646,286 159,173,240 623,015,266 2,791,648,774 4,236,358,728 7,882,842,294

Other assets 14,446,263,420 8,556,951,458 996,685,832 354,560,197 - 24,354,460,906

Non-banking assets ------

Total assets [A] 52,200,087,144 97,705,602,050 124,287,496,640 121,740,172,676 76,422,089,698 472,355,448,208

Liabilities

Borrowings from other banks, financial institutions and agents 7,761,927,192 5,613,880,195 6,465,892,084 4,227,938,507 1,726,414,081 25,796,052,059

Deposits 39,580,967,600 85,234,448,594 95,904,199,716 83,273,623,554 54,692,444,661 358,685,684,126

Other accounts 3,925,305,619 - - - - 3,925,305,619

Provision and other liabilities 610,930,675 4,575,633,929 15,320,336,400 7,374,552,804 9,810,299,922 37,691,753,730

Subordinated debt - - 2,000,000,000 10,000,000,000 2,000,000,000 14,000,000,000

Total liabilities [B] 51,879,131,086 95,423,962,719 119,690,428,200 104,876,114,865 68,229,158,664 440,098,795,534

Net Liquidity Gap [A-B] 320,956,058 2,281,639,332 4,597,068,441 16,864,057,810 8,192,931,034 32,256,652,674

Cumulative liquidity surplus 320,956,058 2,602,595,389 7,199,663,830 24,063,721,640 32,256,652,674 - Balance Sheet (Main Operation) As at 31 December 2020

2020 2019 Notes PROPERTY AND ASSETS Taka Taka

Cash In hand (including foreign currencies) 4 17,030,120,126 16,437,855,873 Balance with Bangladesh Bank and its agent bank (s) 5 23,858,695,319 25,555,947,901 (including foreign currencies) 40,888,815,445 41,993,803,774

Balance with other banks and financial institutions 6 In Bangladesh 19,715,885,793 12,602,076,244 Outside Bangladesh 682,321,195 722,463,012 20,398,206,988 13,324,539,256 Money at call on short notice 7 - -

Investments 8 Government 106,718,508,845 52,193,468,169 Others 5,871,283,434 2,911,283,434 112,589,792,279 55,104,751,603 Loans and advances 9 Loans, cash credits, overdrafts, etc. 256,245,350,799 238,033,430,126 Bills purchased and discounted 1,983,551,092 4,845,110,193 258,228,901,891 242,878,540,319 Fixed assets including land, building, furniture and fixtures 10 7,882,842,212 5,380,606,061 Other assets 11 24,389,793,021 21,269,259,489 Non-banking assets - - TOTAL ASSETS 464,378,351,836 379,951,500,502

LIABILITIES AND CAPITAL

Liabilities Borrowings from other banks, financial institutions and agents 12 19,079,301,498 9,466,563,691

Deposits and other accounts 13 Current deposits and other accounts 88,898,579,297 66,270,302,596 Bills payable 3,925,305,619 4,332,131,895 Savings bank deposits 170,213,630,379 145,754,017,061 Term deposits 99,380,006,141 85,752,836,476 362,417,521,436 302,109,288,028 Other liabilities 14 37,511,749,343 31,073,493,100 Subordinated debt 15 14,000,000,000 10,530,625,000 TOTAL LIABILITIES 433,008,572,277 353,179,969,819

ANNUAL REPORT 2020 383 Balance Sheet (Main Operation) As at 31 December 2020

Notes 2020 2019 Taka Taka Shareholders’ equity Paid up share capital 16.2 5,500,000,000 5,000,000,000 Share premium 17 11,067,500 11,067,500 Statutory reserve 18 9,193,048,174 9,193,048,174 Other reserve 19 - - Dividend equalization account 20 1,766,827,195 1,766,827,195 Assets revaluation reserve 21 850,413,777 850,413,777 Revaluation reserve of HTM securities 22 96,905,831 32,340,447 Retained earnings 23 13,951,517,082 9,917,833,590 TOTAL SHAREHOLDERS’ EQUITY 31,369,779,559 26,771,530,683 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 464,378,351,836 379,951,500,502

OFF-BALANCE SHEET ITEMS

Contingent liabilities 24

Acceptances and endorsements 39,572,273,905 38,508,239,854 Letters of guarantee 5,654,553,523 6,271,259,411 Irrevocable letters of credit 35,020,907,978 27,074,866,414 Bills for collection - - Other contingent liabilities 2,569,651,432 3,451,670,075 Total contingent liabilities 82,817,386,838 75,306,035,754

Other commitments Documentary credits and short term trade-related transactions - - Forward assets purchased and forward deposits placed - - Undrawn note issuance and revolving underwriting facilities - - Undrawn formal standby facilities, credit lines and other commitments - - Total other commitments - - Total off-balance sheet items including contingent liabilities 82,817,386,838 75,306,035,754

The annexed notes 1 to 50 form an integral part of these financial statements.

______Chairman Director Director Managing Director & CEO Auditors' report to the Shareholders See annexed report of date

DVC No: 2103070770AS201814 ______Dhaka, 06 March 2021 Sabbir Ahmed FCA, Partner Enrolment number: 770 Hoda Vasi Chowdhury & Co. Chartered Accountants Profit and Loss Account (Main Operation) For the year ended 31 December 2020 2020 2019 Notes Taka Taka Interest income 26 21,714,066,619 24,943,726,342 Interest paid on deposits and borrowings etc. 27 7,813,823,212 7,383,795,016 Net interest income 13,900,243,407 17,559,931,326 Investment income 28 7,143,871,577 3,412,225,985 Commission, exchange and brokerage 29 1,725,671,452 1,928,953,326 Other operating income 30 3,605,391,670 3,808,698,481 Total operating income 26,375,178,106 26,709,809,118 Salary and allowances 32 5,217,461,698 4,803,740,212 Rent, taxes, insurance, electricity, etc. 34 2,326,134,531 2,181,287,658 Legal expenses 35 2,359,569 2,130,439 Postage, stamp, telecommunications, etc. 36 377,006,559 347,921,988 Stationery, printings, advertisements, etc. 37 404,615,350 618,152,444 Managing Director & CEO’s salary and allowances 38 14,670,000 10,750,000 Directors’ fees 39 228,000 265,000 Auditors’ fees 40 609,500 834,250 Depreciation and repair of bank’s assets 41 2,337,784,537 2,177,009,170 Other expenses 42 5,425,982,116 5,537,943,330 Total operating expenses 16,106,851,860 15,680,034,491 Profit before provision 10,268,326,246 11,029,774,627 Provision for loans and off-balance sheet exposures 14.1.3 Specific provision for loans 14.1.3(A) (33,091,881) 3,351,539,058 General provision for loans 14.1.3(B) (66,478,073) 421,610,806 Special general provision - Covid 19 for loans 14.1.3(B) 817,531,599 - General provision for off-balance sheet exposures 14.1.3(B) 75,652,163 (48,600,024) 793,613,808 3,724,549,840 Other provision 14.1.1.1 28,935,000 101,221,000 Total provision 822,548,808 3,825,770,840 Profit before taxes 9,445,777,438 7,204,003,787 Provision for taxation Current tax 14.1.2 3,852,516,597 3,283,420,884 Deferred tax 11.2.2 309,577,349 (188,481,842) 4,162,093,946 3,094,939,042 Net profit after taxation 5,283,683,492 4,109,064,745 Appropriations Statutory reserve 18 - - - - Retained surplus to retained earnings 23.1 5,283,683,492 4,109,064,745 The annexed notes 1 to 50 form an integral part of these financial statements

______Chairman Director Director Managing Director & CEO Auditors' report to the Shareholders See annexed report of date

DVC No: 2103070770AS201814 ______Dhaka, 06 March 2021 Sabbir Ahmed FCA, Partner Enrolment number: 770 Hoda Vasi Chowdhury & Co. Chartered Accountants

ANNUAL REPORT 2020 385 Cash Flow Statement (Main Operation) For the year ended 31 December 2020 2020 2019 Notes Taka Taka A) Cash flows from operating activities Interest receipts in cash 24,890,045,591 27,120,378,153 Interest payments (7,796,236,128) (7,467,406,728) Dividend receipts in cash 5,711,803 5,711,803 Gain on sale of shares - - Gain on sale of securities - - Recoveries of loan previously written-off 138,671,837 28,378,993 Fee and commission receipts in cash 792,670,438 752,433,229 Cash payments to employees (5,235,233,456) (4,814,011,053) Cash payments to suppliers (3,560,251,010) (2,777,764,892) Income taxes paid (4,164,359,285) (2,841,156,137) Receipts from other operating activities 44 4,520,120,899 4,967,476,216 Payments for other operating activities 45 (4,926,650,327) (7,062,986,693) Operating profit before changes in operating assets and liabilities 4,664,490,362 7,911,052,891 Increase/(decrease) in operating assets and liabilities Statutory deposits - - Purchase /sale of trading securities (47,299,253,951) (7,053,127,281) Loans and advances to other banks - - Loans and advances to customers (12,956,313,324) (27,456,690,483) Other assets 46 (1,464,662,833) (265,033,900) Deposits from other banks (81,645,298) 79,422,389 Deposits from customers 60,358,027,161 39,580,042,555 Other liabilities account of customers 9,612,737,807 (4,306,559,289) Other liabilities 47 4,543,244,265 1,234,465,907 Net cash from operating activities 17,376,624,189 9,723,572,789 B) Cash flows from investing activities Payments for purchase of securities (151,802,938,576) (52,670,959,780) Proceeds from sale of securities 141,617,748,750 36,822,957,523 Purchase of property, plant and equipment (3,979,286,638) (1,013,113,110) Sale proceeds of property, plant and equipment 36,519,042 34,115,660 Net cash used in investing activities (14,127,957,422) (16,826,999,707) C) Cash flows from financing activities Receipts from issue of loan capital and debt securities 5,000,000,000 - Payment for redemption of loan capital and debt securities (1,530,625,000) (1,042,500,000) Dividends paid (748,765,465) (415,032,609) Net cash from financing activities 2,720,609,535 (1,457,532,609) D) Net increase / (decrease) in cash (A+B+C) 5,969,276,303 (8,560,959,527) E) Cash and cash-equivalents at beginning of the year 55,326,374,530 63,887,334,057 F) Cash and cash-equivalents at end of the year (D+E) 48 61,295,650,833 55,326,374,530

______Chairman Director Director Managing Director & CEO

Dhaka, 06 March 2021

------Total Figures in Taka 64,565,384 64,565,384 5,283,683,492 5,283,683,492 (750,000,000) 26,771,530,683 26,771,530,683 31,369,779,559 31,369,779,559 26,771,530,683 26,771,530,683 ------earnings Retained 9,917,833,590 9,917,833,590 9,917,833,590 9,917,833,590 9,917,833,590 9,917,833,590 5,283,683,492 5,283,683,492 (750,000,000) 13,951,517,082 13,951,517,082 (500,000,000) Managing Director & CEO ------______96,905,831 64,565,384 64,565,384 32,340,447 32,340,447 32,340,447 32,340,447 32,340,447

securities Revaluation reserve of HTM ------Assets reserve 850,413,777 850,413,777 850,413,777 850,413,777 850,413,777 850,413,777 revaluation ------account Dividend 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 1,766,827,195 equalization Director ______------Other reserve ------reserve 9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174 Statutory 9,193,048,174 9,193,048,174 9,193,048,174 9,193,048,174

(Main Operation) (Main ------

Director Share premium 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 11,067,500 ______------

Paid up Paid 500,000,000 500,000,000 share capital 5,500,000,000 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 5,000,000,000 Particulars Chairman ______

06 March 2021 Dhaka,

For the year ended 31 December 2020 December ended 31 the year For Statement of Changes in Equity Balance at 1 JanuaryBalance 2020 policy in accounting Changes Restated balance of revaluation on account Surplus/deficit of properties Surplus/deficit on account of revaluation of revaluation on account Surplus/deficit of investments Currency translation differences translation Currency Net gains and losses not recognized in the and losses not recognized Net gains statement income Payment of dividend for the year 2019 the year of dividend for Payment Transfer for dividend for the year 2019 the year dividend for for Transfer 2020 year for the Net profit Issue of share capital Appropriations during the year Appropriations Balance at 31 December 2020 December at 31 Balance Balance at 31 December 2019 December at 31 Balance

ANNUAL REPORT 2020 387 Notes to the Financial Statements (Main Operation and Off-shore Banking Unit) As at and for the year ended 2020 1. Status of the Bank 1.1 Dutch-Bangla Bank Limited (the “Bank”) is a scheduled commercial bank set up as a joint venture between Bangladesh and The Netherlands. Incorporated as a public limited company under the Companies Act 1994, the Bank obtained license from Bangladesh Bank on 23 July 1995 and started its banking business with one branch on 3 June 1996. The number of branches was 208 as at 31 December 2020 all over Bangladesh. The Bank is listed with Dhaka Stock Exchange and Chittagong Stock Exchange as a publicly quoted company. 1.2 Nature of business Main operation The principal activities of the Bank are to carry on all kinds of commercial banking business in Bangladesh. Mobile Banking Services The Bank obtained the permission for conducting the Mobile Banking Services from Bangladesh Bank on 28 April 2010. The Bank started operation of Mobile Banking Services on 31 March 2011. The principal activities of the Mobile Banking Services are to provide banking services to Mobile Banking customers through Mobile Phone and multiple delivery channels within the applicable rules & regulations and guidelines of Bangladesh Bank. Mobile Banking Services are part of Main Operation of the Bank. Agent Banking Services The Bank obtained the permission for conducting the Agent Banking services from Bangladesh Bank on 27 July 2014. The Bank started operation of Agent Banking Services on 19 January 2015.

The principal activities of the Agent Banking Services are to provide banking services to the Bank customers through engagement of agents who conducts Banking Transaction on behalf of the Bank under a valid agency agreements rather than Bank’s own Tellers/Cashiers to deliver the services within the applicable rules & regulations and guidelines of Bangladesh Bank. Agent Banking Services are part of Main Operation of the Bank. Off-shore Banking Unit (OBU) The Off-shore Banking Unit (OBU) of the Bank is the separate business entity governed by the applicable rules & regulations and guidelines of Bangladesh Bank. The Bank obtained the permission for conducting the operations of OBU from Bangladesh Bank on 23 February 2010. The Bank started the operation of OBU on 12 July 2010. The number of OBUs were two as at 31 December 2020 located at Chittagong EPZ Branch- Chittagong and Dhaka EPZ Branch-Dhaka. The principal activities of the OBUs are to provide commercial banking services through its Units within the rules & regulations and guidelines of Bangladesh Bank applicable for the Off-shore Banking Units.

2. Significant accounting policies and basis of preparation of financial statements

2.1 Basis of accounting

The financial statements of the Bank have been prepared under historical cost convention except investments which are measured at present value and in accordance with “First Schedule” of the Bank Companies Act, 1991 as amended under sub-section 38(4) of the Act, relevant Bangladesh Bank Circulars, International Accounting Standard (IASs) and International Financial Reporting Standards (IFRSs) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), the Companies Act, 1994, the Financial Reporting Act, 2015, the Securities and Exchange Rules, 1987 and other rules and regulations applicable for Banks in Bangladesh. In cases, any requirement of provisions and circulars issued by Bangladesh Bank differs with those of other regulatory authorities, the provisions & circulars issued by Bangladesh Bank prevailed. Material departures from the requirement of IAS & IFRS are as follows: 2.1.1 Investment in shares and Securities IFRS As per requirements of IFRS 9, classification and measurement of investment in shares and securities will depend on how these are managed (the entity’s business model) and their contractual cash flow characteristics. Based on these factors it would generally fall either under “at fair value through profit or loss account” or under “at fair value through other comprehensive income” where any change in the fair value (as measured in accordance with IFRS 13) at the year-end is taken to profit and loss account or other comprehensive income respectively. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003 investments in quoted shares and unquoted shares are revalued at the year end at market price and as per book value of last audited balance sheet respectively. Provision should be made for any loss arising from diminution in value of investment. 2.1.2 Revaluation gain/loss on Government securities IFRS As per requirement of IFRS 9, all financial assets are into two classifications - measured at amortised cost and measured at fair value. For securities like treasury bills and treasury bonds designated as “held for trading” falls under “fair value measurement” and any change in the fair value is recognized through fair value through profit and loss account. T-bills and T-Bonds not designated as “held for trading” (i.e., held to maturity) are measured at amortized cost method and interest income is recognized through the profit and loss account. Bangladesh Bank: As per DOS circular no. 05 dated 26 May 2008, HFT securities are revalued on the basis of marking to market and at year end any gains on revaluation of securities which have not matured as at the balance sheet date are recognized in other reserve as a part of equity and any losses on revaluation of securities which have not matured as at the balance sheet date are charged in the profit and loss account. Interest on HFT securities including amortization of discount are recognized in the profit and loss account. 2.1.3 Provision on loans and advances IFRS As per IFRS 9, an entity shall recognised an impairment allowance on loans & advances based on the expected credit loss. Expected credit losses are required to be measured through a loss allowance at an amount equal to the (i) 12-month expected credit losses or (ii) full lifetime expected credit losses. For loans & Advances whose credit risk increased significantly since initial recognition, a loss allowance for full lifetime expected credit losses is required. For loans & advances whose credit risk didn’t increased significantly, a loss allowance equal to the 12-month expected credit losses is required. Bangladesh Bank: As per BRPD circular No.24 (17 November 2019), BRPD circular No.6 (19 May 2019), BRPD circular No.4 (16 May 2019), BRPD circular No.3 (21 April 2019), BRPD circular No.15 (27 September 2017), BRPD circular No.16 (18 November 2014), BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012, BRPD circular no. 05 dated 29 May 2013 & BRPD circular no. 16 dated 18 November 2014, a general provision at 0.25% to 5% under different categories of unclassified loans (good/standard loans) has to be maintained regardless of objective evidence of impairment. Also provision for sub-standard loans, doubtful loans and bad losses has to be provided at 20%, 50% and 100% respectively for loans and advances depending on time past due. Again as per BRPD circular no. 10 dated 18 September 2007, BRPD circular no. 14 dated 23 September 2012, a general provision at 1% is required to be provided for all off-balance sheet exposures and BRPD circular no. 56 dated 10 December 2020, a special general provision-Covid -19 at 1% is required to be provided for deferral loans. Such provision policies are not specifically in line with those prescribed by IFRS 9. 2.1.4 Recognition of interest in suspense IFRS Loans and advances to customers are generally classified at amortised cost as per IFRS 9 and interest income is recognized through effective interest rate method to the gross carrying amount over the term of the loan. Once a loan is impaired, interest income is recognized in profit and loss account on the same basis based on revised carrying amount. Bangladesh Bank: As per BRPD circular no. 14 dated 23 September 2012, once a loan is classified, interest on such loans are not allowed to be recognized as income, rather the corresponding amount needs to be credited to an interest in suspense account, which is presented as liability in the balance sheet. 2.1.5 Other comprehensive income IFRS As per IAS 1 Other Comprehensive Income (OCI) is a component of financial statements or the elements of Other Comprehensive Income are to be included in a Single Other Comprehensive Income (OCI) Statement.

ANNUAL REPORT 2020 389 Bangladesh Bank: Bangladesh Bank has issued templates for financial statements as per BRPD circular no. 14 dated 25 June 2003, which will strictly be followed by all banks. The templates of financial statements issued by Bangladesh Bank do not include Other Comprehensive Income nor are the elements of Other Comprehensive Income allowed to include in a Single Comprehensive Income (OCI) Statement. As such the company does not prepare the other comprehensive income statement. However elements of OCI, if any, are shown in the statements of changes in equity. 2.1.6 Financial instruments – presentation and disclosure In several cases Bangladesh Bank guidelines categorize, recognize, measure and present financial instruments differently from those prescribed in IFRS 9. As such some disclosure and presentation requirements of IFRS 7 and IAS 32 cannot be made in the financial statements.

2.1.7 Repo and Reverse Repo transactions IFRS As per IFRS 9 when an entity sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo), the arrangement is treated as a loan and the underlying asset continues to be recognised at amortised cost in the entity’s financial statements. The difference between selling price and repurchase price will be treated as interest expense. The same rule applies to the opposite side of the transaction (reverse repo). Bangladesh Bank: As per DOS Circular letter no. 6 dated 15 July 2010 and subsequent clarification in DOS circular no. 2 dated 23 January 2013, when a bank sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a normal sales transactions and the financial assets are derecognized in the seller’s book and recognized in the buyer’s book. However, as per Debt Management Department (DMD) circular letter no. 7 dated 29 July 2012, non primary dealer banks are eligible to participate in the Assured Liquidity Support (ALS) program, whereby such banks may enter collateralized repo arrangements with Bangladesh Bank. Here the selling bank accounts for the arrangement as a loan, thereby continuing to recognize the asset. 2.1.8 Financial guarantees IFRS As per IFRS 9, financial guarantees are contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee liabilities are recognized initially at their fair value plus transaction costs that are directly attributable to the issue of the financial liabilities. The financial guarantee liability is subsequently measured at the higher of: (i) the amount of the loss allowance and (ii) the amount initially recognised less, the cumulative amount of income recognised in accordance with the principles of IFRS 15. Financial guarantees are included within other liabilities. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, financial guarantees such as letter of credit, letter of guarantee will be treated as Off- Balance Sheet items. No liability is recognized for the guarantee except the cash margin. 2.1.9 Cash and cash equivalent IFRS Cash and cash equivalent items should be reported as cash item as per IAS 7. Bangladesh Bank: Some cash and cash equivalent items such as ‘money at call and on short notice’, Treasury bills, Bangladesh Bank bills and Prize bond are not shown as cash and cash equivalent. Money at call and on short notice presented on the face of the balance sheet, and Treasury bills, Prize bonds are shown in investments. 2.1.10 Cash flow statement IFRS Cash flow statement can be prepared either in direct method or in indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the business or industry. The method selected is applied consistently. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, cash flows is the mixture of direct and indirect method.

2.1.11 Balance with Bangladesh Bank: (CRR) IFRS Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as per IAS 7. Bangladesh Bank: Balance with Bangladesh Bank is treated as cash and cash equivalents. 2.1.12 Presentation of intangible asset IFRS An intangible asset must be identified and recognized and the disclosure must be given as per IAS 38. Bangladesh Bank: There is no requirement for regulation of intangible assets in BRPD circular no. 14 dated 25 June 2003. 2.1.13 Off-balance sheet items IFRS There is no concept of off-balance sheet items in any IFRS; the off-balance sheet item e.g., Letter of credit, Letter of guarantee etc are considered as contingent liability and require disclosure on note to the financial statements. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.) must be disclosed separately on the face of balance sheet. 2.1.14 Disclosure of appropriation of profit IFRS There is no requirement to show appropriation of profit in the face of statement of comprehensive income. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, an appropriation of profit should be disclosed in the face of profit and loss account. 2.1.15 Loans and advance net of provision IFRS Loans and advances should be presented net of provisions. Bangladesh Bank: As per BRPD circular no. 14 dated 25 June 2003, provision on loans and advances are presented separately as liability and cannot be netted off against loans and advances. 2.1.16 Name of Financial Statements IFRS As per IAS 1 : Presentation of financial of financial statements, Components of financial statements are defined as statement of financial position and statement of profit or loss and other comprehensive income. Bangladesh Bank: As per BRPD 14, statement of financial position is defined as “Balance Sheet” whilst statement of profit or loss and other comprehensive income is defined as “Profit and Loss Account” 2.2 IFRS 16: Leases IFRS 16 Leases is effective for the annual reporting periods beginning on or after 1 January 2019. IFRS 16 defines that a contract is (or contains) a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. IFRS 16 significantly changes how a lessee accounts for operating leases. Under previous IAS 17, an entity would rent an office building or a branch premises for several years with such a rental agreement being classified as operating lease would have been considered as an off balance sheet item. However, IFRS 16 does not require a lease classification test and hence all leases shall be accounted for as on balance sheet item (except some limited exception i.e. short-term lease, leases for low value items). Under IFRS 16, an entity shall be recognizing a right-of-use (ROU) asset (i.e. the right to use the office building, branches, service center, call center, warehouse, etc.) and a corresponding lease liability. The asset and the liability are initially measured at the present value of unavoidable lease payments. The depreciation of the lease asset (ROU) and the interest on the lease liability is recognized in the profit or loss account over the lease term. IFRS 16 was implemented in the year 2020.

ANNUAL REPORT 2020 391 2.3 Functional and presentation currency

These financial statements are presented in Taka, which is the Bank’s functional currency. Figures appearing in these financial statements have been rounded off to the nearest Taka.

2.4 Use of estimates and judgements The preparation of financial statements requires management to make informed judgements, estimates and assumptions that affect the application of accounting policies and the amounts of assets, liabilities, income and expenses reported in the financial statements. Actual results may differ from these estimates. 2.5 Foreign currency transactions Foreign currency transactions are converted into Taka using the exchange rates prevailing on the dates of respective transactions. In terms of instructions contained in Bangladesh Bank’s Letter No. BRPD(R)717/2004-959 dated 21 November 2004, foreign currency assets and liabilities are translated into Taka at the weighted average rate as on balance sheet date as determined by Bangladesh Bank. Gains and losses arising from foreign currency transactions are credited/charged to profit and loss account.

2.6 Taxation

As per provisions of International Accounting Standard (IAS) 12 ‘Income Taxes’, provision for income taxes has been made as under: 2.6.1 Current tax

Provision for current income tax has been made @ 37.50% on taxable profit as per Income Tax Ordinance 1984 and as per Finance Act 2020. 2.6.2 Deferred tax Deferred tax is accounted for all temporary timing differences arising between the tax base of assets and liabilities and their carrying value for financial reporting purpose. Tax rate (@ 37.50%) prevailing at the balance sheet date is used to determine deferred tax.

2.7 Bases for valuation of assets 2.7.1 Loans and advances

a) Loans and advances are stated at gross amount. Provision and interest suspense against loans and advances are shown separately as other liabilities. Interest income is accounted for on accrual basis until the loans and advances are defined as classified accounts as per Bangladesh Bank guidelines. Interest on classified loans (other than bad/loss loans) are credited to interest suspense account instead of income account. Such interest kept in suspense account is reversed to income account only when respective loan accounts are regularized and /or realized in cash, in accordance with Bangladesh Bank guidelines. As per Bangladesh Bank directives, interest on loans and advances classified as bad/loss is not accounted for. A separate memorandum record is maintained for such interest on bad/loss loans. b) Provision for loans and advances is made on the basis of the year end review by the management of the Bank in line with the instructions contained in BRPD Master Circular No. 14 dated 23 September 2012, BRPD Circular No. 19 dated 27 December 2012, BRPD Circular No. 05 and 06 dated 29 May 2013, BRPD Circular No. 15 dated 23 December 2013, BRPD Circular No. 16 dated 18 November 2014, BRPD Circular No. 08 dated 02 August 2015, BRPD Circular No. 01 dated 20 February 2018, BRPD circular No. 24 (17 November 2019), BRPD circular No.6 (19 May 2019), BRPD circular No. 4 (16 May 2019) and BRPD circular No.3 (21 April 2019), issued by Bangladesh Bank on the following basis: Rates Bangladesh Category / status of loans and advances Maintained by Bank’s the Bank requirement General provisions for unclassified loans and advances : All unclassified loans (other than loans under small and medium enterprise financing, consumer financing, loans to Brokerage Houses (BHs) / Merchant Banks (MBs) / Stock Dealers (SDs) against Shares and staff loans) 1.00% 1.00% Small and medium enterprise financing 0.25% 0.25% Consumer financing (other than housing finance and loans for profes- sionals under consumer financing scheme) 2.00% 2.00% Consumer financing for housing finance, etc. 1.00% 1.00% Consumer financing for credit card, for loans to professionals and loans to Brokerage Houses (BHs) / Merchant Banks (MBs) / Stock Dealers (SDs) against Shares etc. 2.00% 2.00% Short term agricultural credit and Micro credit 1.00% 1.00%

Special mention account All loans (other than loans under small and medium enterprise financ- ing, consumer financing, loans to Brokerage Houses (BHs) / Merchant Banks (MBs) / Stock Dealers (SDs) against Shares and staff loans) 1.00% 1.00% Small & Medium enterprise financing 0.25% 0.25% Consumer financing (other than housing finance, credit card and loans for professionals under consumer financing scheme) 2.00% 2.00% Consumer financing for Credit card, loans to professionals and loans to Brokerage Houses (BHs) / Merchant Banks (MBs) / Stock Dealers (SDs) against Shares etc. 2.00% 2.00% Consumer financing for housing finance, etc. 1.00% 1.00% Specific provision for classified loans and advances: Substandard Other 20.00% 20.00% Substandard small and MC 5.00% 5.00% Doubtful Other 50.00% 50.00% Doubtful small 20.00% 20.00% Bad/loss 100.00% 100.00% General provision General provision for all unclassified and SMA loans and advances (other than loans under small and medium enterprise financing, consumer financing, loans to Brokerage Houses (BHs) / Merchant Banks (MBs) / Stock Dealers (SDs) against Shares and staff loans) has been maintained @ 1%. General provision for all unclassified and SMA loans and advance under small & medium enterprise financing has been maintained @ 0.25%.

General provision for all unclassified and SMA loans and advance under consumer financing for housing finance, Credit card, loans to professionals and loans to Brokerage Houses (BHs) / Merchant Banks (MBs) / Stock Dealers (SDs) against Shares has been maintained @ 1% to 2%.

Specific provision Specific provision for classified loans and advances has been maintained @ 5% to 100% as prescribed by Bangladesh Bank. c) Loans and advances are written-off in line with Bangladesh Bank’s BRPD Circular No. 02 dated 13 January 2003 and DOS Circular No. 01 dated 29 December 2004, when prospect of recovery of such loans and advances become non-existent. However, such write-off does not reduce the claim against the borrower. Detailed records for all write-off accounts are separately maintained by the Bank to continue the recovery efforts.

ANNUAL REPORT 2020 393 2.7.2 Investments a) Investments have been accounted for as follows :

Particulars Valuation method

Government treasury bills Amortised cost/ Fair value Government treasury bonds Amortised cost/ Fair value Subordinated bonds At redemption value ICB’s debenture At redemption value Prize bond Cost price Shares: Quoted Cost or market price whichever is lower Unquoted Cost or Book value as per latest audited accounts whichever is lower b) The investment in government securities (Treasury bills and bonds) are classified into Held to Maturity (HTM) and Held for Trading (HFT) as per Bangladesh Bank’s guidelines contained in DOS Circular Letter No. 05 dated 26 May 2008, DOS Circular Letter No. 05 dated 28 January 2009, DOS Circular No. 06 dated 15 July 2010 and under reference Letter No. DOS (SR)1153/120-A/2011-746 dated 29 December 2011. Reclassification of HTM securities into HFT securities are also done in compliance with Bangladesh Bank’s guidelines. The government securities under ‘Held to Maturity (HTM)’ category are valued at present value at amortized cost at the end of the year. The Held to Maturity securities are amortized to ensure a constant yield over the remaining period of maturity of the securities. The resulting gains / (losses) are credited to revaluation reserve account and shown in the equity. Such gains / (losses) are credited to income account at the time of maturity or sale of the security. The government securities under ‘Held for Trading (HFT)’ category are valued at present value on the basis of marking to market method. The resulting gains / (losses) are transferred to other reserve account. The gains / (losses) arising on maturity or sale of such securities are credited to income. 2.7.3 Fixed assets a) All fixed assets are stated at cost or revalued amount less accumulated depreciation. b) Depreciation is charged over the estimated useful life of fixed assets excepting land on a straight line method. The useful life of fixed assets are reviewed on a yearly basis to determine if there has been any significant change in the expected pattern of consumption resulting in changes in estimated residual value and useful life of the fixed assets and if considered appropriate, adjustment is made at the balance sheet date. The annual rates of depreciation based on estimated useful life for fixed assets are given below:

Building 2.50% Interior decoration 15.00% Furniture and fixtures 10.00% ATM Booth 10.00% ATM/Fast Track 12.50% Computer equipment 20.00% Computer software 20.00% Other machinery and equipment 15.00% Motor vehicles 20.00% Books 10.00% Right of use of asset - IFRS 16: lease Over the lease term

c) As at 31 December 2010, all immovable properties of the Bank including land, building and ready made floor spaces were revalued by a professionally qualified valuation firm and certified by the external auditors, M/S. A. Qasem & Co., Chartered Accountants. Accordingly, revaluation surplus is included in fixed assets and equity in terms of instructions contained in BRPD Circular No. 10 dated 25 November 2002. 2.8 Off-balance sheet exposures In compliance with the instruction contained in BRPD Circular No. 10 dated 18 September 2007 issued by Bangladesh Bank, provision against the off-balance sheet exposures of the Bank as at reporting date has been made as under: Rates Category / status of Off-balance sheet exposures Bangladesh Maintained by Bank’s the Bank requirement General provision for Off-balance sheet exposures All types of Off-balance sheet exposures 1.00% 1.00%

2.9 Bases for valuation of liabilities and provisions 2.9.1 Retirement benefits to the employees The retirement benefits accrued for the employees of the Bank as at the reporting date have been accounted for in accordance with the provisions of International Accounting Standard (IAS) 19, ‘Employee Benefits’ as outlined below: a) Provident fund There is a Provident Fund Scheme under defined contribution plan. The Fund is operated by a separate Board of Trustees approved by the National Board of Revenue as per Income Tax Ordinance, 1984. All eligible employees contribute 10% of their basic pay to the Fund. The Bank also contributes equal amount of employees’ contribution to the Fund. Benefits from the Fund is given to eligible employees at the time of retirement/resignation as per approved rules of the Fund.

b) Gratuity fund The Bank has a separate Board of Trustees for operating the staff gratuity fund approved by the National Board of Revenue. The provision for the gratuity fund is made in the books of account of the Bank for the eligible employees on the basis of the assessment made by the management at the year end [Note 14.1]. The amount of provision is transferred to the Board of Trustees of the Fund on a yearly basis. c) Superannuation fund The Bank has a separate Board of Trustees for operating the staff superannuation fund approved by the National Board of Revenue. The provision for the superannuation fund is made in the books of account of the Bank for the eligible employees on the basis of the assessment made by the management at the year end. The amount of provision is transferred to the Board of Trustees of the Fund on a yearly basis. 2.9.2 Workers’ Profit Participation Fund (WPPF) Consistent with the Industry practice and in accordance with the Bank Company Act, 1991, no provision has been made for WPPF. 2.10 Revenue recognition

The revenues of the Bank during the year have been recognized in terms of the provisions of International Financial Reporting Standards 15, ‘Revenue from contracts with customers’ and International Financial Reporting Standards 9 “Financial Instruments” as outlined below: 2.10.1 Interest income

a) Interest income from loans and advances

The policy for accounting of interest income on loans and advances is stated in 2.7.1.a and 2.7.2 above.

b) Other interest income Interest income from investments, money at call on short notice and fund placement with other banks and financial institutions is recognized on accrual basis.

ANNUAL REPORT 2020 395 2.10.2 Fees and commission income Fees and commission income arising from different services provided by the Bank is recognized on cash receipt basis. Commission realized on letters of credit and letters of guarantee is credited to income at the time of effecting the respective transactions. 2.10.3 Dividend income Dividend income is recognised when the right to receive payment is established. 2.10.4 Interest paid on deposits and borrowings Interest paid on deposits, borrowings etc. are accounted for on accrual basis. 2.10.5 Other operating expenses All other operating expenses are provided for in the books of the accounts on accrual basis.

2.11 Earnings per share Earnings per share (EPS) has been computed by dividing the basic earnings by the number of ordinary shares outstanding as at 31 December 2020 as per International Accounting Standard (IAS) 33, ‘Earnings Per Share’. 2.12 Cash flow statement Cash flow statement has been prepared in accordance with the International Accounting Standard (IAS) 7, ‘State- ment of Cash Flows’ under Direct method as recommended in the BRPD Circular No. 14 dated 25 June 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

2.13 Statement of liquidity The liquidity statement of assets and liabilities as at the reporting date has been prepared on residual maturity term as per the following bases: a) Balance with other banks and financial institutions, money at call on short notice etc. are on the basis of their maturity term. b) Investments are on the basis of their maturity. c) Loans and advances are on the basis of their repayment / maturity schedule. d) Fixed assets are on the basis of their useful life. e) Other assets are on the basis of their realization/adjustment. f) Borrowing from other banks, financial institutions and agents are as per their maturity /repayment term. g) Deposits and other accounts are on the basis of their maturity term and past trend of withdrawal by the depositors. h) Other long term liabilities are on the basis of their maturity term. i) Provisions and other liabilities are on the basis of their payment /adjustment schedule. 2.14 Events after the reporting period a) There were no material post balance sheet events which could affect the values stated in these financial statements. b) The Board of Directors of the Bank in its 233rd meeting held on 06 March 2021 recommended cash dividend @ 15% and stock dividend @ 15% for the year 2020. c) Corona virus pandemic, originated in China, has been impacting lives, businesses and economies around the world. First corona virus infection has been identified in Bangladesh on 08th March, 2020. It is likely to adversely impact the domestic and global economy that in turn may adversely impact the financial position and results of the Bank in 2021 like 2020, the amount of which cannot be predicted with any degree of cer- tainty at this point of time. But there is a positive expectation that Covid Pandemic situation will be under controlled through vaccination to mass people of the world. 2.15 Reconciliation of books of account Books of account with regard to inter-bank (in Bangladesh and outside Bangladesh) transactions and inter-branch transactions are reconciled in all material respects. There were no un-reconciled entries which could materially affect the financial condition or results of the Bank.

2.16 Reporting period The reporting period of these financial statements cover one calendar year from 1 January 2020 to 31 December 2020 2.17 Offsetting No asset or liability has been offset or reduced by any other asset or liability unless a legal right [Note 10, 28 (revaluation gain on securities), 29.2 and 30.2] of set-off exists and the offsetting represents the expectation as to the realization or settlement of the asset or liability in normal course of business. 2.18 Compliance report on International Financial Reporting Standards (IFRSs) The Financial Reporting Act 2015 (FRA) was enacted in 2015. Under the FRA, the Financial Reporting Council (FRC) is formed and it is yet to issue financial reporting standards for public interest entities such as banks. The Bank Companies Act 1991 has been amended to require banks to prepare their financial statements under such financial reporting standards. The FRC has been formed but yet to issue any financial reporting standards as per the provisions of the FRA and hence International Financial Reporting Standards (IFRS) as approved by the Institute of Chartered Accountants of Bangladesh (ICAB) are still applicable. Subject to the departures mentioned above, the Bank has complied with all the applicable Accounting and Financial Reporting Standards for preparation and presentation of the financial statements of the Bank as at 31 December 2020 as noted below: International Accounting Standards (IASs) IAS Number Status of compliance by DBBL Presentation of Financial Statements IAS -1 Complied Inventories IAS -2 Complied Statement of Cash Flows IAS -7 Complied Accounting Policies, Changes in Accounting Estimates and Errors IAS -8 Complied Events After the Reporting Period IAS -10 Complied Income Taxes IAS -12 Complied Property, Plant and Equipment IAS -16 Complied Employee Benefits IAS -19 Complied Accounting for Government Grants and Disclosure of Government Assistance IAS -20 Not applicable The Effects of Changes in Foreign Exchange Rates IAS -21 Complied Borrowing Costs IAS -23 Complied Related Party Disclosures IAS -24 Complied Accounting and Reporting by Retirement Benefit Plans IAS -26 Complied Separate Financial Statements IAS -27 Not applicable Investments in Associates and Joint Ventures IAS -28 Not applicable Financial Reporting in Hyperinflationary Economics IAS -29 Not applicable Financial Instruments: Presentation IAS -32 Complied Earnings Per Share IAS -33 Complied Interim Financial Reporting IAS -34 Complied Impairment of Assets IAS -36 Complied Provisions, Contingent Liabilities and Contingent Assets IAS -37 Complied Intangible assets IAS -38 Complied Financial Instruments: Recognition and Measurement IAS -39 Complied Investment Property IAS -40 Not applicable Agriculture IAS -41 Not applicable International Financial Reporting Standards (IFRSs) IFRS Number Status of compliance by DBBL First-time Adoption of International Financial Reporting Standards IFRS - 1 Not applicable Share-based Payment IFRS - 2 Not applicable Business Combinations IFRS - 3 Not applicable Insurance Contracts IFRS - 4 Not applicable Non-current Assets Held for Sale and Discontinued Operations IFRS - 5 Not applicable Exploration for and Evaluation of Mineral Resources IFRS - 6 Not applicable Financial Instruments : Disclosures IFRS - 7 Complied Operating Segments IFRS - 8 Complied Financial instruments IFRS - 9 Complied Consolidated Financial Statements IFRS - 10 Not applicable Joint Arrangements IFRS - 11 Not applicable Disclosure of Interests in other Entities IFRS - 12 Not applicable Fair Value Measurement IFRS - 13 Complied Regulatory deferral accounts IFRS - 14 Not applicable Revenue from contracts with customers IFRS - 15 Complied Leases IFRS - 16 Complied ‘* Subject to the departure specified above to comply with Bangladesh Bank Regulations

ANNUAL REPORT 2020 397 2.19 New accounting standards not yet adopted The Bank has consistently applied the accounting policies as set out above to all periods presented in these financial statements. The various amendments to standards, including any consequential amendments to other standards, with the date of initial application of 1 January 2020 have been considered. A number of standards and amendments to standards are effective for annual periods beginning after 1 January 2020 and earlier application is permitted. However, the Bank has not early applied these new standards and yet assess potential impact on its financial statements. 2.20 Approval of the financial statements

The Board of Directors of the Bank in its 233rd meeting held on 06 March 2021 approved the financial statements of the Bank for the year ended 31 December 2020. 3.1 Risk Management Banking risk is defined by DBBL as prospect of potential losses or foregone profits that can be triggered by internal and external factors. The objective of risk management system is to identify , assess, record and actively manage any internal and external risks that could pose a threat to the attainment of the core objectives of the Bank. Therefore, as part of risk management system potential risks in Bank’s operations and transactions , in assets, liabilities, income, costs and off-balance sheet items identified and assessed ,and timely and adequate measures are initiated to actively manage and mitigate such risks within a risk-return framework. In DBBL, only calculated banking risks are taken while conducting banking business to strike a balance between risks and returns. Risks are clearly identified, quantified, mitigated or minimized to protect capital and maximize value to the shareholders. 3.1.1 Core risk management Within risk management framework, all core banking risks of DBBL are proactively managed. Bank’s risk management system adequately complies with an effective risk management system as required by BRPD circular no.17 (7 October 2003) and BRPD circular no.4 (5 March 2007). Bangladesh Bank monitors the progress of implementation of its risk management guidelines through on-site inspections and off-site supervisions. The risk management systems in place at the Bank are discussed below. 3.1.1.1 Credit risk Credit risk is the most significant and inherent risk in banking business. Every loan exposure or transaction with counterparty involves the Bank to some extent of credit risks. Credit Risk Management is at the heart of the overall risk management system of the Bank. It is designed and regularly updated to identify, measure, manage and mitigate credit risk to maintain and improve quality of loan portfolio and reduce actual loan losses and to ensure that approved processes are followed and appropriate due diligence are made in approving new credit facilities and renewals. The salient features of credit risk management practices in place at different levels of DBBL management and board are as under: I. Credit policy is approved by the Board II. Credit approval is delegated properly III. Independent Credit Risk Management Division is responsible for assessing and mitigating credit risk IV. Separate Credit Administration Division is responsible for documentation and disbursements V. Independent Special Asset Management Division is responsible for managing non-performing loans VI. Adequate loan-loss provisions (principal ) and interest suspense accounts are maintained VII. Conducting Internal Credit Risk Rating (ICRR) for mitigating credit risk VIII. Eligible Borrowers’ credit ratings are conducted for assessing client and industry specific credit risk IX. Credit operations are regularly audited by independent Internal Audit Division X. Early warning system is in place for raising red flag for potential credit problem for taking timely actions XI. Board of directors of the Bank, Executive Committee and Risk Management Committee of the board are regularly and adequately reported on existing and potential credit risks of the Bank and measures taken by the management for mitigating such credit risks XII. Environmental issues are properly assessed and mitigated while financing any project or industry 3.1.1.2 Asset liability management risk The Asset-Liability (ALCO) management risk includes the process, procedures for managing & mitigating liquidity risk, interest rate risk, and foreign exchange risk of DBBL. ALCO works under specific Terms of References (functions) approved by the Board. Treasury Division (Front Office) and ALM desk under regular supervision of ALCO reviews the overall liquidity, interest rate and foreign exchange exposures and risk of DBBL and take appropriate measures in line with industry best practice. 3.1.1.3 Liquidity risk Liquidity risk is the risk that we may not meet our financial obligation as they become due. Liquidity risks also include our inability to liquidate any asset at reasonable price in a timely manner. It is the policy of the Bank to maintain adequate liquidity at all times in both local and foreign currencies. Liquidity risks are managed on a short, medium and long-term basis. There are approved limits for credit/ deposit ratio, liquid assets to total assets ratio, maturity mismatch, commitments for both on-balance sheet and off-balance sheet items and borrowing from money market to ensure that loans and investments are funded by stable sources, maturity mismatches are within limits and that cash inflow from maturities of assets, customer deposits in a given period exceeds cash outflow by a comfortable margin even under a stressed liquidity scenario. 3.1.1.4 Interest rate risk

Interest rate risk is the potential impact on the Bank’s earnings and net asset value due to changes in market interest rates. Interest rate risk is the result of mismatches of interest rate re-pricing of financial assets and liabilities. DBBL uses the following tools for measuring the interest rate risk:

a. Gap analysis Under this system, a gap i.e. the difference between the amount of financial assets and the amount of liabilities is calculated at a pre- determined time bucket. The interest rate factor is then applied on the assessed financial value of Gap for measuring the earning impact due to movement of interest rate.

b. Duration analysis Duration is the time-weighted average maturity of the present value of the cash flows from on balance sheet assets and liabilities. It measures the relative sensitivity of the value of these instruments to changing interest rates and therefore reflects on the economic value i.e. the present value of shareholders’ equity of the Bank. 3.1.1.5 Foreign exchange risk Foreign exchange risk is the potential loss arising from changes in foreign currency exchange rate in either direction. Assets and liabilities denominated in foreign currencies generally entail foreign exchange risks. The Bank operates its foreign exchange and money market activities under a centralized and single functional area. DBBL’s dealing room is equipped with advanced technology and experienced personnel. Bank’s Exchange Rate Committee meets on a daily basis to review the prevailing market condition, exchange rate, exposure and transactions to mitigate foreign exchange risk.

3.1.1.6 Internal control and compliance Internal Control and Compliance (ICC) ensures compliance with laws and regulations, policies and procedures issued by both the bank management and the regulators. ICC enhances confidence over the bank and facilitates risk based bank examination. This is one of the means for reducing potential losses associated with unwanted events. Banking is a diversified financial activities involving different risks. The issues of effective internal control system, good governance, transparency of all financial activities, accountability towards its stakeholders and regulators are highly important for ensuring smooth performance of the banking company. An effective internal control & compliance system has no alternative for protecting the stakeholders of a banking company. Dutch-Bangla Bank Limited has established an appropriate and effective internal control environment through the Board of Directors, Management, organizational and procedural controls and an independent audit mechanism in order to ensure that the Bank is managed and controlled in a sound and prudent manner. Internal Control and Compliance (ICC) operates independently as a division consisting of four units (Audit & Inspection, Compliance, Monitoring & ICC Secretariat) with prime responsibility to determine risks by evaluating overall Business, Operations & Credit Portfolios of the Bank. The key objective of ICC is to assist and guide in all aspects of the bank using adequate resources for identification of weaknesses and taking appropriate measures to overcome the same to be a compliant bank. 3.1.1.7 Operational Risk Operational risk can be defined as the possibilities of losses resulting from inadequacy or failed internal processes, systems and people or from external events. Operational risk includes legal and regulatory risk, business process and change risk, fiduciary or disclosure breaches, technology failure, financial crime and environmental risk. It exists in some form in every Bank business and function. Operational risk can not only result in financial loss, but also regulatory sanctions and damage to the Bank’s reputation. DBBL is successful at managing operational risk with a view to safeguarding client assets and preserving shareholder value.

ANNUAL REPORT 2020 399 DBBL manages operational risks in the following manner: I. Risks are identified with reference to the relevant policy manuals, processes, and practices; II. Departmental Control Function Check List (DCFCL) is in place for evaluation of control; III. Review of safety and control measures of premises and equipments; IV. Management of technological and information security risks; and V. Ensuring the Bank’s business continuity while facing unforeseen crisis under a business continu- ity and disaster management plan.

3.1.1.8 Money Laundering Risk and Terrorist Financing Risk The Government through its bodies, particularly ‘Bangladesh Financial Intelligence Unit (BFIU)’ has been playing a vital role to enhance the compliance status of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) among the local banks & financial institutions. Bangladesh has become the prestigious Co- Chair of the APG (Asia-Pacific Group on Money Laundering). All these have made our country viable and reliable to both the global regulators and investors. DBBL has become confident to nourish its financial-system and structure with more dynamism and professionalism to protect its customers’ deposits and reputation from any Money Laundering (ML) or Terrorist Financing (TF) risks. The Bank, under the legal framework of the “Money Laundering Prevention Act, 2012 ( amended in 2015)” and Anti Terrorism Act, 2009 (amended in 2013), has been pursuing the policy of strict compliance with all regulatory directives and culture of good governance in all aspects of its banking services and operations. 3.1.1.9 Legal Risks In DBBL, legal risks are covered by recognizing potential losses from litigation or possible litigation at an early stage and by formulating solutions for reducing, restricting and avoiding such risks and creating adequate provision there- against. 3.1.1.10 Business Risk Business risk covers the risk of losses arising from lower non-interest income and higher expenses from the budgeted amount. The business risk is resulted from the market condition, greater customer expectation and / or technological development that may be significantly different from the assumptions made at the time of planning. Business risk in DBBL is managed by setting clear targets for specific business units, in terms of business volume, income, cost, cost-income ratio, quality of assets etc. with an ongoing process of continuous improvement. 3.1.1.11 Reputational Risk Reputational risk is defined as the risk of losses, falling business volume or income as well as reduced value of the company arising from business events that may reduce the confidence of the customers & clients, shareholders, investors, counterparties, business partners, credit rating agencies, regulators and general public in DBBL. The branches and operational divisions are directly responsible for reputational risks arising from their business operations. Reputational risks may also arise from a deficiency in managing other risks. All risk must therefore be managed effectively in order to uphold the Bank’s reputation. The management ensures that DBBL is aware of any changes in market perceptions as soon as possible. Accordingly, all business policies and transactions are subjected to careful consideration. DBBL takes necessary precautions to avoid business policies and transactions that may result in significant tax, legal or environmental risks. Reputational risk is also factored into major credit decisions that may lead to credit proposal being declined. 3.1.1.12 Compliance Risk The success of DBBL is largely dependent on the trust and confidence of our existing and potential customers, our shareholders, our staff, our regulators and the general public in our integrity and ethical standard. The confidence largely depends on meticulous compliance with applicable legal and regulatory requirements and internal policies of DBBL. The confidence also depends on conformity with generally accepted market norms and standards in our business operations. The Board of Directors is primarily responsible for compliance with all applicable norms and regulations. The Board discharges its responsibilities itself and through delegation of authorities to Executive Committee, Audit Committee and Risk Management Committee of the Board. The objective is to identify any compliance risks at an early stage that may undermine the integrity and the success of DBBL and to mitigate the risks in most appropriate way. 3.1.1.13 Technology Risk

Technology risk is the risk of financial loss arising from failure, exploitation of vulnerabilities or other deficiencies in the electronic platforms that support our daily operations and the system applications and infrastructure on which they reside. As a component of operational risk, technology risk is inherent not only in our IT assets, but also in the people and processes that interact with them. Cyber risk, which is part of technology risk, is the risk that our systems will not operate properly or will be compromised as a result of cyber-attacks, security breaches, unauthorized access, loss or destruction of data, unavailability of service, computer viruses or other events that could have an adverse security impact. Any such event could subject us to litigation or cause us to suffer a financial loss, a disruption of our businesses, liability to our clients, regulatory intervention or reputational damage. We could also be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures. Service and infrastructure disruption risks are managed through our business continuity management plan, our technology risk management program and other contingency and resiliency plans. Although we have business continuity plans, our businesses face a wide variety of operational risks, including technology risk arising from dependencies on IT, third-party suppliers and the worldwide telecommunications infrastructure. As a large IT investment financial services company in Bangladesh, we operate in a complex technological landscape covering our diverse business model. Ensuring that the confidentiality, integrity and availability of information assets are protected is critical to our operations. 3.1.2 Credit Rating of the Bank As per the BRPD instruction circular no.6 dated 5 July 2006, the Bank has done its credit rating by CRISL based on the financial statements dated 31 December 2019. Particulars Date of Rating Long term Short term Rating Valid Credit Rating Information and Services Ltd (CRISL) July 16, 2020 AA+ ST-1 July 15, 2021 Again the Bank “DBBL” has been rated by renowned international rating agency “Moody’s” and was awarded rating “B1”. 3.1.3 Fraud and administrative error During the year 2020, four cases of fraud & forgeries were detected by the bank amounting to Taka 14,252,417. Out of which, resolution of Taka 11,791,426 was remain pending at the year end. 3.2 Number of employees As per the Schedule XI of the Companies Act, 1994, the number of employees (including contractual employees) engaged for the whole year or part thereof who received a total remuneration of Taka 36,000 per annum or Taka 3,000 per month were 10,022 as at 31 December 2020 compared to 9,988 as at 31 December 2019. 3.3 General Wherever considered necessary previous year's figures and presentation have been rearranged to conform with the current year's presentation.

2020 2019 Taka Taka 4. Cash in hand (including foreign currencies) Local currency 16,987,953,065 16,407,921,018 Foreign currencies 42,167,061 29,934,855 17,030,120,126 16,437,855,873

5. Balance with Bangladesh Bank and its agent bank(s) (including foreign currencies) Bangladesh Bank ` Local currency 23,087,790,589 21,795,480,397 Foreign currencies 318,852,121 3,151,577,474 23,406,642,710 24,947,057,871 Sonali Bank Limited (as an agent of Bangladesh Bank) - Local currency 452,052,609 608,890,030 23,858,695,319 25,555,947,901

ANNUAL REPORT 2020 401 2020 2019 Taka Taka 5.1 Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR)

Cash Reserve Requirement (CRR) and Statutory Liquidity Ratio (SLR) have been calculated and maintained in accordance with the Section 33 of the Bank Companies Act, 1991 and of instructions contained in BRPD Circular No. 11 dated 25 August 2005, BRPD Circular No. 12 dated 25 August 2005, Monetary Policy Department (MPD) Circular No. 1 dated 4 May 2010, MPD Circular No. 2 dated 4 May 2010, MPD Circular No. 4 dated 1 December 2010, MPD Circular No. 5 dated 1 December 2010, DOS Circular No. 1 dated 19 January 2014, MPD Circular No. 1 date 23 June 2014, MPD Circular No. 116/2014-853 dated 23 June 2014, DOS Circular No. 26 dated 19 August 2019 and MPD Circular No. 3 dated 09 April 2020 issued by Bangladesh Bank. 5.1.1 Cash Reserve Requirement (CRR): average 4% of average demand and time liabilities with minimum 3.5% on any date

Required reserve 14,544,507,000 17,497,197,000 Actual reserve maintained Balance with Bangladesh Bank-Local currency [Note 5] 23,087,790,589 21,795,480,397 23,087,790,589 21,795,480,397 Surplus 8,543,283,589 4,298,283,397

Cash Reserve Maintained: more than 3.5% throughout the accounting 6.35% 6.85% year and 6.35% on the Balance Sheet date

5.1.2 Statutory Liquidity Ratio (SLR): 13% of average demand and time liabilities

Required reserve 47,676,741,000 41,357,011,000

Available for maintenance:

Cash in hand (including foreign currencies) 17,030,120,126 16,437,855,873 Balance with Sonali Bank Limited (as an agent of Bangladesh Bank) 452,052,609 608,890,030 Balance with Bangladesh Bank in excess of CRR 8,543,283,589 4,298,283,397 Unencumbered approved securities (treasury bills and bonds, debentures etc.) 52,185,436,669 132,735,336,769 73,530,465,969 Surplus 85,058,595,769 32,173,454,969

Statutory Liquidity Ratio (SLR) Maintained (%) 36.19% 23.11%

6. Balance with other banks and financial institutions In Bangladesh

Main Operation [Note 6.1 (a)] 19,715,885,793 12,602,076,244 Off-shore Banking Unit 18,748,111 225,327,667 Less: Inter Bank transactions [Note 12] (7,160,324,845) (3,162,828,044) Total in Bangladesh 12,574,309,059 9,664,575,867

Outside Bangladesh Main Operation [Note 6.1 (b)] 682,321,195 722,463,012 Total Balance with other banks and financial institutions 13,256,630,254 10,387,038,879 2020 2019 Taka Taka 6.1 Balance with other banks and financial institutions - Main Operation (a) In Bangladesh In current deposit accounts with Janata Bank Limited 4,533,430 39,955 Sonali Bank Limited 151,726,447 130,672,436 Standard Chartered Bank, Dhaka 60,558,580 146,280,585 Islami Bank Bangladesh Limited (13,412,650) 6,399,841 Agrani Bank Limited 627,391 39,338 Al Arafah Islami Bank Limited - 435 The City Bank Limited 44,189 44,131 National Bank Limited 28,230 29,725 204,105,617 283,506,446

In special notice deposit accounts with Sonali Bank Limited 56,433,698 330,679,270 National Bank Limited 2,727,602 6,568,767 The City Bank Limited 4,359 4,359 Rupali Bank Limited 15,399,580 24,514,170 Agrani Bank Limited 32,893,689 36,062,533 Janata Bank Limited 14,938,761 4,090,068 Dhaka Bank Limited 2,096,427 2,043,341 Islami Bank Limited 424,790,693 452,632,223 Mutual Trust Bank Limited 2,652,016 279,747 551,936,825 856,874,478 In fixed deposit accounts with Jamuna Bank Limited - 500,000,000 The City Bank Limited - 1,000,000,000 Southeast Bank Limited 2,500,000,000 100,000,000 NCC Bank Limited 500,000,000 1,000,000,000 Dhaka Bank Limited 1,750,000,000 - Exim Bank Limited 750,000,000 - Social Islami Bank Limited 750,000,000 - One Bank Limited 1,000,000,000 1,000,000,000 7,250,000,000 3,600,000,000

In fixed deposit accounts (in foreign currency) with Islami Bank Bangladesh Limited - 424,500,000 Al-Arafah Islami Bank Limited 169,602,200 - Off-shore Banking Unit, Dutch-Bangla Bank Limited 7,160,241,151 3,137,195,320 7,329,843,351 3,561,695,320 Other financial institutions In fixed deposit accounts with Investment Corporation of Bangladesh 3,440,000,000 3,860,000,000 International Leasing & Financial Services Limited 90,000,000 90,000,000 Bangladesh Industrial Finance Company Limited (BIFC) 350,000,000 350,000,000 IDLC Finance Limited 500,000,000 - 4,380,000,000 4,300,000,000 Total (a) In Bangladesh 19,715,885,793 12,602,076,244

ANNUAL REPORT 2020 403 (b) Outside Bangladesh

In demand deposit accounts (interest bearing) with

2020 2019 Exchange Exchange Amount rate for Amount rate for Name of the correspondent Bank Currency Amount in Amount in in foreign per unit in foreign per unit Taka Taka currency foreign currency foreign currency currency

Mashreqbank PSC, New York, USA USD 578,150 84.8011 49,027,750 339,709 84.9000 28,841,287 Commerzbank AG, Frankfurt, Germany EUR 92,491 103.8559 9,605,711 2,012 94.8758 190,868 AB Bank Ltd., Mumbai, India ACU 32,563 84.8011 2,761,415 20,321 84.9000 1,725,238 Citibank N.A., New York, USA USD 2,398,942 84.8011 203,432,942 4,393,057 84.9000 372,970,524 ICICI Bank Limited, Mumbai, India ACU 27,740 84.8011 2,352,399 35,587 84.9000 3,021,322 267,180,217 406,749,239 In demand deposit account (non-interest bearing) with

2020 2019 Exchange Exchange Amount rate for Amount rate for Name of the correspondent Bank Currency Amount in Amount in in foreign per unit in foreign per unit Taka Taka currency foreign currency foreign currency currency

Standard Chartered Bank, London, UK GBP 99,606 114.4815 11,402,997 14,345 111.0152 1,592,567 Standard Chartered Bank, New York, USA USD 3,315,352 84.8011 281,145,521 2,616,233 84.9000 222,118,189 Standard Chartered Bank AG, Germany EUR 35,973 103.8559 3,736,037 - 94.8758 - ICICI Bank Ltd., Hong Kong USD 60,308 84.8011 5,114,210 60,830 84.9000 5,164,499 JP Morgan Chase Bank N.A., New York, USA USD 644,817 84.8011 54,681,193 384,974 84.9000 32,684,331 Standard Chartered Bank, Colombo, Sri Lanka ACU 8,412 84.8011 713,308 44,846 84.9000 3,807,419 Commerzbank AG, Frankfurt, Germany CHF 32,358 95.8529 3,101,569 8,287 87.0680 721,518 The Bank of Tokyo-Mitsubishi UFJ Ltd., Tokyo, Japan JPY 6,083,293 0.8186 4,979,784 2,311,265 0.7758 1,793,079 Bank of Montreal, Canada CAD 80,464 66.1423 5,322,048 35,347 64.9083 2,294,316 Axis Bank, India ACU 73,602 84.8011 6,241,542 84,976 84.9000 7,214,471 Commerz Bank AG, Germany AUD 91,949 64.4912 5,929,925 45,455 59.2347 2,692,512 Mashreqbank PSC, Mumbai, India ACU 104,971 84.8011 8,901,637 46,618 84.9000 3,957,866 Mashreqbank PSC, Mumbai, India EUR 683 103.8559 70,978 683 94.8758 64,841 Mashreqbank PSC, Dubai, UAE AED 136,317 23.0846 3,146,830 97,146 23.1115 2,245,180 Standard Chartered Bank, Mumbai, India ACU 79,401 84.8011 6,733,304 198,574 84.9000 16,858,972 HDFC Bank Limited ACU 96,775 84.8011 8,206,636 22,727 84.9000 1,929,558 Bank of Ceylon, Colombo, Sri Lanka ACU 17,483 84.8011 1,482,601 28,005 84.9000 2,377,648 Kookmin Bank, Seoul,Korea USD 5,855 84.8011 496,481 49,210 84.9000 4,177,951 Al Rajhi Bank in Riyadh, Saudi Arabia SAR 99,934 22.5968 2,258,188 100,000 22.4575 2,245,754 Habib Metropolitan Bank, Karachi, Pakistan ACU 17,408 84.8011 1,476,189 20,885 84.9000 1,773,102

415,140,978 315,713,773 Total (b) Outside Bangladesh 682,321,195 722,463,012 Total (a+b) 20,398,206,988 13,324,539,256 2020 2019 Taka Taka 6 2 Maturity grouping of balance with other banks and financial institutions On demand 2,293,771,359 1,797,251,023 Within one to three months 9,934,587,824 7,784,101,088 Within three to twelve months 1,028,271,071 805,686,768 Within one to five years - - More than five years - - 13,256,630,254 10,387,038,879 7. Money at call on short notice a) With banks - - - -

b) With non bank financial institutions - - - - Total (a+b) - -

8. Investments In Government securities Treasury bills 07-day treasury bills - - 14-day treasury bills - - 91-day treasury bills - 1,275,856,033 182-day treasury bills 5,070,496,778 2,439,098,000 364-day treasury bills 8,589,180,443 1,399,132,500 13,659,677,221 5,114,086,533 Treasury bonds 2-days treasury bonds 43,703,200,151 6,261,573,569 5-days treasury bonds 16,735,035,717 14,888,305,180 10-days treasury bonds 23,287,902,337 19,006,859,233 15-days treasury bonds 6,827,640,817 5,130,818,816 20-days treasury bonds 2,496,424,202 1,783,793,338 93,050,203,224 47,071,350,136 Total treasury bills and bonds 106,709,880,445 52,185,436,669 Prize bonds 8,628,400 8,031,500 106,718,508,845 52,193,468,169 Other investments

Subordinated bonds [Note 8.3] 5,860,000,000 2,900,000,000 Shares [Note 8.4] 11,283,434 11,283,434 5,871,283,434 2,911,283,434 112,589,792,279 55,104,751,603 8.1 Classification of investments Government treasury bills and bonds Held for trading (HFT) 54,352,381,232 7,053,127,281 Held to maturity (HTM) 52,357,499,213 45,132,309,388 Total investments in government securities 106,709,880,445 52,185,436,669 Prize bonds 8,628,400 8,031,500 Other investments 5,871,283,434 2,911,283,434 112,589,792,279 55,104,751,603

ANNUAL REPORT 2020 405 8.2 Details of treasury bills and bonds

Present value (Taka) Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019

Held to maturity [HTM) Note 8.1] 91-day treasury bills 7.25% 33,553,531 91-day treasury bills 6.49% 13-Jan-20 498,614,000 91-day treasury bills 6.75% 20-Jan-20 497,917,500 91-day treasury bills 7.49% 23-Mar-20 245,771,000 182-day treasury bills 8.43% 23-Mar-20 245,771,000 182-day treasury bills 8.45% 23-Mar-20 245,771,000 182-day treasury bills 8.49% 23-Mar-20 245,771,000 182-day treasury bills 7.50% 20-Apr-20 488,650,500 182-day treasury bills 6.90% 4-May-20 243,596,250 182-day treasury bills 6.95% 4-May-20 243,596,250 182-day treasury bills 7.00% 4-May-20 243,596,250 182-day treasury bills 7.62% 16-Jun-20 241,332,250 182-day treasury bills 7.69% 16-Jun-20 241,332,250 182-days treasury bills 4.50% 2-Feb-21 1,999,670,000 - 182-days treasury bills 4.58% 2-Feb-21 999,835,000 - 182-days treasury bills 4.97% 15-Feb-21 499,827,500 - 182-days treasury bills 4.89% 15-Feb-21 499,827,500 - 182-days treasury bills 4.30% 8-Mar-21 74,942,025 - 182-days treasury bills 1.95% 10-May-21 249,232,750 - 182-days treasury bills 1.69% 24-May-21 249,054,000 - 182-days treasury bills 1.73% 24-May-21 249,054,000 - 182-days treasury bills 1.76% 24-May-21 249,054,000 - 364-day treasury bills 7.92% 12-Oct-20 470,302,500 364-day treasury bills 7.64% 7-Dec-20 371,532,000 364-day treasury bills 7.70% 7-Dec-20 232,207,500 364-day treasury bills 7.75% 7-Dec-20 185,766,000 364-day treasury bills 7.82% 7-Dec-20 139,324,500 364-days treasury bills 8.10% 11-Jan-21 199,998,400 - 364-days treasury bills 7.85% 25-Jan-21 259,977,640 - 364-days treasury bills 7.69% 1-Feb-21 249,961,750 - 364-days treasury bills 7.41% 15-Feb-21 249,913,750 - 364-days treasury bills 7.49% 1-Mar-21 249,847,250 - 364-days treasury bills 7.54% 1-Mar-21 249,847,250 - 364-days treasury bills 7.59% 1-Mar-21 249,847,250 - 8.2 Details of treasury bills and bonds Present value (Taka) Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019 Held for trading (HFT) [Note 8.1] 364-days treasury bills 7.55% 15-Mar-21 99,904,700 - 364-days treasury bills 7.59% 15-Mar-21 99,904,700 - 364-days treasury bills 7.37% 17-May-21 498,291,500 - 364-days treasury bills 7.39% 17-May-21 498,291,500 - 364-days treasury bills 7.44% 17-May-21 498,291,500 - 364-days treasury bills 5.00% 9-Aug-21 495,895,000 - 364-days treasury bills 5.05% 9-Aug-21 495,895,000 - 364-days treasury bills 5.10% 9-Aug-21 495,895,000 - 364-days treasury bills 5.15% 9-Aug-21 495,895,000 - 364-days treasury bills 5.15% 23-Aug-21 247,740,750 - 364-days treasury bills 2.74% 1-Nov-21 493,149,000 - 364-days treasury bills 2.79% 1-Nov-21 493,149,000 - 364-days treasury bills 2.84% 1-Nov-21 493,149,000 - 364-days treasury bills 2.04% 6-Dec-21 491,819,500 - 364-days treasury bills 1.74% 20-Dec-21 393,006,400 - 364-days treasury bills 1.79% 20-Dec-21 294,754,800 - 364-days treasury bills 1.84% 20-Dec-21 294,754,800 - 2-year treasury bonds 5.40% 6-Mar-21 1,938,722,000 2-year treasury bonds 5.40% 6-Mar-21 1,003,928,754 - 2-year treasury bonds 5.40% 6-Mar-21 1,003,928,754 - 2-year treasury bonds 8.33% 4-Dec-21 1,044,730,926 - 2-year treasury bonds 8.33% 4-Dec-21 1,044,730,926 - 2-year treasury bonds 7.68% 22-Apr-22 210,593,613 - 2-year treasury bonds 7.68% 22-Apr-22 210,593,613 - 2-year treasury bonds 7.68% 22-Apr-22 421,187,226 - 2-year treasury bonds 7.68% 22-Apr-22 315,890,419 - 2-year treasury bonds 7.80% 3-Jun-22 1,058,710,248 - 2-year treasury bonds 7.80% 3-Jun-22 529,355,124 - 2-year treasury bonds 7.80% 3-Jun-22 529,355,124 - 2-year treasury bonds 7.80% 3-Jun-22 529,355,124 - 2-year treasury bonds 7.80% 3-Jun-22 529,355,124 - 2-year treasury bonds 6.48% 8-Jul-22 3,128,607,026 - 2-year treasury bonds 6.48% 8-Jul-22 2,085,738,017 - 2-year treasury bonds 5.90% 5-Aug-22 750,097,800 -

ANNUAL REPORT 2020 407 Present value (Taka) Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019 Held for trading (HFT) [Note 8.1] 2-year treasury bonds 8.33% 4-Dec-21 522,365,463 - 2-year treasury bonds 3.64% 7-Oct-22 10,000,048,347 - 2-year treasury bonds 8.33% 4-Dec-21 626,838,556 - 2-year treasury bonds 8.33% 4-Dec-21 940,257,834 - 2-year treasury bonds 3.64% 7-Oct-22 1,000,004,835 - 2-year treasury bonds 3.64% 7-Oct-22 1,500,007,252 - 2-year treasury bonds 3.64% 7-Oct-22 1,500,007,252 - 2-year treasury bonds 3.64% 7-Oct-22 1,000,004,835 - 2-year treasury bonds 7.80% 3-Jun-22 1,058,710,248 - 2-year treasury bonds 7.80% 3-Jun-22 1,058,710,248 - 2-year treasury bonds 7.80% 3-Jun-22 2,117,420,496 - 2-year treasury bonds 7.80% 3-Jun-22 1,058,710,248 - 5-year treasury bonds 4.69% 29-Dec-25 1,319,860,000 - Total of held for trading (HFT) securities 54,352,381,232 7,053,127,28

Present value (Taka) Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019 Held to maturity (HTM) [Note 8.1 2-year treasury bonds 7.94% 3-Jul-21 500,986,369 497,030,513 2-year treasury bonds 8.73% 4-Sep-21 503,864,442 501,680,913 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 250,725,715 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 250,610,965 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 250,496,205 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 250,343,323 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 250,228,751 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 250,152,500 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 253,530,766 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 253,336,431 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 253,142,086 2-year treasury bonds 8.73% 4-Sep-21 251,932,221 252,947,959 2-year treasury bonds 8.73% 4-Sep-21 503,864,442 505,547,208 2-year treasury bonds 8.73% 4-Sep-21 302,318,665 303,078,233 5-year treasury bonds 6.24% 11-May-21 1,990,808,001 2,058,982,755 5-year treasury bonds 4.50% 14-Nov-23 456,755,475 486,619,543 5-year treasury bonds 4.50% 14-Nov-23 456,755,475 485,766,207 5-year treasury bonds 4.50% 14-Nov-23 456,755,475 484,914,865 5-year treasury bonds 4.50% 14-Nov-23 456,755,475 484,064,705 5-year treasury bonds 8.43% 10-Jul-24 1,012,737,599 1,016,045,234 5-year treasury bonds 8.43% 10-Jul-24 759,684,512 760,905,138 5-year treasury bonds 8.43% 10-Jul-24 759,684,512 759,496,107 5-year treasury bonds 8.43% 10-Jul-24 506,456,341 504,271,592 5-year treasury bonds 8.43% 10-Jul-24 506,456,341 503,339,463 5-year treasury bonds 8.43% 10-Jul-24 759,684,512 753,892,338 Present value (Taka) Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019 Held to maturity (HTM) [Note 8.1

5-year treasury bonds 8.43% 10-Jul-24 759,684,512 750,832,229 5-year treasury bonds 6.44% 13-Mar-24 191,542,532 182,428,634 5-year treasury bonds 6.44% 13-Mar-24 191,542,532 182,104,551 5-year treasury bonds 6.44% 13-Mar-24 287,313,798 272,671,776 5-year treasury bonds 6.44% 13-Mar-24 383,085,064 362,917,066 5-year treasury bonds 6.44% 13-Mar-24 383,085,064 362,272,818 5-year treasury bonds 8.43% 10-Jul-24 759,684,512 743,765,961 5-year treasury bonds 8.43% 10-Jul-24 759,684,512 743,214,389 5-year treasury bonds 8.43% 10-Jul-24 506,456,341 494,928,022 5-year treasury bonds 8.43% 10-Jul-24 405,165,073 395,504,188 5-year treasury bonds 8.43% 10-Jul-24 202,582,536 197,679,309 5-year treasury bonds 8.43% 10-Jul-24 202,582,536 197,314,980 5-year treasury bonds 8.43% 10-Jul-24 202,582,536 196,951,770 5-year treasury bonds 8.97% 11-Dec-24 205,949,305 201,735,104 5-year treasury bonds 8.97% 11-Dec-24 360,411,284 352,481,715 5-year treasury bonds 8.97% 11-Dec-24 360,411,284 351,790,423 5-year treasury bonds 8.97% 11-Dec-24 308,923,958 300,943,255 5-year treasury bonds 8.97% 11-Dec-24 308,923,958 300,471,043 5-year treasury bonds 8.86% 15-Jan-25 102,606,132 - 5-year treasury bonds 8.86% 15-Jan-25 256,515,331 - 5-year treasury bonds 8.86% 15-Jan-25 153,909,198 - 10-year treasury bonds 7.15% 22-Nov-28 108,100,000 1,003,259,660 10-year treasury bonds 7.15% 22-Nov-28 150,400,000 830,000,000 10-year treasury bonds 7.15% 22-Nov-28 132,900,000 977,460,428 10-year treasury bonds 11.75% 22-Aug-22 160,284,367 108,100,000 10-year treasury bonds 11.75% 12-Sep-22 178,466,771 150,400,000 10-year treasury bonds 11.80% 10-Oct-22 96,900,000 132,900,000 10-year treasury bonds 11.75% 14-Nov-22 83,900,000 160,239,169 10-year treasury bonds 11.80% 12-Dec-22 112,086,164 178,454,316 10-year treasury bonds 11.90% 9-Jan-23 118,257,108 96,900,000 10-year treasury bonds 12.00% 13-Feb-23 94,381,724 83,900,000 10-year treasury bonds 12.10% 13-Mar-23 68,853,119 112,030,101 10-year treasury bonds 12.10% 13-Mar-23 66,450,669 118,199,224 10-year treasury bonds 12.10% 10-Apr-23 77,520,419 94,343,994 10-year treasury bonds 12.22% 17-Jul-23 65,342,237 68,839,821 10-year treasury bonds 12.22% 17-Jul-23 56,813,052 66,425,495 10-year treasury bonds 12.22% 17-Jul-23 512,985,678 77,498,541 10-year treasury bonds 12.22% 17-Jul-23 514,615,364 65,324,493 10-year treasury bonds 12.16% 20-Nov-23 510,668,044 56,802,222 10-year treasury bonds 7.59% 20-Jul-26 511,362,100 514,796,917 10-year treasury bonds 7.59% 20-Jul-26 260,337,547 516,657,651 10-year treasury bonds 7.59% 20-Jul-26 259,746,875 512,152,751

ANNUAL REPORT 2020 409 Present value (Taka) Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019 Held to maturity (HTM) [Note 8.1

10-year treasury bonds 7.59% 20-Jul-26 259,393,256 512,944,340 10-year treasury bonds 7.59% 20-Jul-26 259,157,731 261,798,239 10-year treasury bonds 7.59% 20-Jul-26 532,961,560 261,122,233 10-year treasury bonds 7.59% 20-Jul-26 531,990,461 260,717,677 10-year treasury bonds 7.59% 20-Jul-26 528,607,384 260,448,286 10-year treasury bonds 7.59% 20-Jul-26 527,885,761 537,682,749 10-year treasury bonds 7.59% 20-Jul-26 1,499,704,785 536,566,060 10-year treasury bonds 7.59% 20-Jul-26 1,495,473,516 532,679,015 10-year treasury bonds 7.59% 20-Jul-26 497,084,475 531,850,545 10-year treasury bonds 9.27% 21-Aug-29 1,002,991,107 251,102,560 10-year treasury bonds 9.27% 21-Aug-29 830,000,000 250,786,753 10-year treasury bonds 9.27% 21-Aug-29 979,269,896 250,471,676 10-year treasury bonds 9.27% 21-Aug-29 1,955,399,535 250,000,000 10-year treasury bonds 7.50% 20-Jun-28 168,893,378 1,499,725,281 10-year treasury bonds 7.50% 20-Jun-28 243,506,764 1,495,094,397 10-year treasury bonds 7.50% 20-Jun-28 251,028,979 496,825,873 10-year treasury bonds 8.44% 19-Jun-29 250,734,301 2,001,287,029 10-year treasury bonds 8.44% 19-Jun-29 250,440,261 168,552,453 10-year treasury bonds 8.44% 19-Jun-29 250,000,000 243,026,065 10-year treasury bonds 7.74% 17-Apr-29 278,701,972 277,068,911 10-year treasury bonds 7.74% 17-Apr-29 371,162,219 368,953,315 10-year treasury bonds 7.74% 17-Apr-29 278,041,849 276,361,643 10-year treasury bonds 7.74% 17-Apr-29 370,521,346 368,266,747 10-year treasury bonds 7.74% 17-Apr-29 323,616,250 321,601,555 10-year treasury bonds 9.27% 21-Aug-29 256,337,136 252,639,921 10-year treasury bonds 9.27% 21-Aug-29 503,688,175 503,974,855 10-year treasury bonds 9.27% 21-Aug-29 110,586,549 110,626,269 10-year treasury bonds 8.74% 7-May-30 103,150,142 - 10-year treasury bonds 8.74% 7-May-30 306,516,662 - 10-year treasury bonds 8.74% 7-May-30 253,817,353 - 10-year treasury bonds 8.74% 7-May-30 252,217,511 - 10-year treasury bonds 8.66% 17-Jun-30 200,894,249 - 10-year treasury bonds 8.66% 17-Jun-30 50,159,564 - 10-year treasury bonds 8.66% 17-Jun-30 200,254,895 - 10-year treasury bonds 7.89% 22-Jul-30 478,600,000 - 10-year treasury bonds 8.66% 17-Jun-30 1,158,321,565 - 10-year treasury bonds 9.15% 22-Jan-30 585,034,267 - 10-year treasury bonds 9.15% 22-Jan-30 378,386,246 - 10-year treasury bonds 5.63% 21-Oct-30 373,000,000 - 15-year treasury bonds 13.97% 15-Aug-22 358,600,000 358,600,000 15-year treasury bonds 12.22% 9-Jan-23 304,000,000 304,000,000 15-year treasury bonds 11.75% 23-May-27 1,021,396,365 1,023,591,477 Present value (Taka)

Tenors and Status (HTM) Coupon/interest rate Date of maturity As at 31 Dec As at 31 Dec 2020 2019

Held to maturity (HTM) [Note 8.1

15-year treasury bonds 11.88% 19-Sep-27 66,600,000 66,600,000 15-year treasury bonds 11.93% 17-Oct-27 18,274,429 18,272,257 15-year treasury bonds 12.10% 29-Dec-27 16,613,652 16,615,143 15-year treasury bonds 12.20% 16-Jan-28 14,600,000 14,600,000 15-year treasury bonds 12.38% 20-Mar-28 8,196,092 8,195,793 15-year treasury bonds 12.40% 19-Jun-28 41,578,690 41,569,883 15-year treasury bonds 12.40% 24-Jul-28 16,941,898 16,937,759 15-year treasury bonds 12.42% 25-Sep-28 38,903,542 38,896,899 15-year treasury bonds 12.42% 23-Oct-28 26,108,819 26,102,639 15-year treasury bonds 11.47% 26-Nov-29 21,164,778 21,162,707 15-year treasury bonds 11.47% 26-Nov-29 32,704,930 32,695,672 15-year treasury bonds 10.06% 29-Jul-30 1,211,273,143 1,226,049,694 15-year treasury bonds 10.06% 29-Jul-30 1,199,595,171 1,213,434,565 15-year treasury bonds 7.55% 28-Nov-33 20,000,000 20,000,000 15-year treasury bonds 7.20% 26-Sep-33 437,559,613 435,056,726 15-year treasury bonds 7.20% 26-Sep-33 250,202,203 248,437,602 15-year treasury bonds 8.90% 13-May-35 433,906,071 - 15-year treasury bonds 8.90% 13-May-35 378,410,500 - 15-year treasury bonds 8.70% 24-Jun-35 341,704,916 - 15-year treasury bonds 7.79% 27-Apr-31 569,306,007 - 20-year treasury bonds 12.16% 29-Aug-32 58,200,000 58,200,000 20-year treasury bonds 12.16% 26-Sep-32 28,400,000 28,400,000 20-year treasury bonds 12.16% 25-Oct-32 19,675,447 19,674,600 20-year treasury bonds 12.18% 28-Nov-32 9,276,778 9,275,992 20-year treasury bonds 12.28% 26-Dec-32 19,000,000 19,000,000 20-year treasury bonds 12.48% 27-Mar-33 13,874,027 13,873,209 20-year treasury bonds 12.48% 26-Jun-33 20,011,823 20,009,154 20-year treasury bonds 12.48% 25-Sep-33 19,413,773 19,411,260 20-year treasury bonds 12.33% 26-Dec-33 24,903,748 24,901,013 20-year treasury bonds 11.98% 29-Oct-34 37,075,566 37,072,327 20-year treasury bonds 11.98% 26-Nov-34 16,312,156 16,309,901 20-year treasury bonds 11.98% 26-Nov-34 28,116,731 28,113,740 20-year treasury bonds 9.29% 26-Jun-39 501,756,697 501,791,039 20-year treasury bonds 9.29% 26-Jun-39 495,299,009 495,283,313 20-year treasury bonds 9.29% 26-Jun-39 246,680,424 246,668,814 20-year treasury bonds 9.29% 26-Jun-39 245,823,878 245,490,227 20-year treasury bonds 9.20% 20-May-40 553,217,672 - 20-year treasury bonds 9.20% 20-May-40 159,386,491 - Total of held to maturity (HTM) securities 52,357,499,213 45,132,309,388 Total of treasury bills and bonds (HFT and HTM) 106,709,880,445 52,185,436,669

ANNUAL REPORT 2020 411 2020 2019 Taka Taka 8.3 Other investments -Subordinated Bonds Northwest Power Generation Company Limited 1,000,000,000 1,000,000,000 Standard Bank Limited 1,000,000,000 - Islami Bank Bangladesh Limited 1,000,000,000 - Ashugonj Power Distribution Limited 500,000,000 500,000,000 Bank Asia Limited 500,000,000 500,000,000 Al-Arafah Islami Bank Limited 1,500,000,000 500,000,000 First Security Islami Bank Mudaraba Bond 360,000,000 400,000,000 5,860,000,000 2,900,000,000

8.4 Other investments - shares

In shares (quoted and unquoted) Quoted RAK Ceramics (Bangladesh) Limited 5,664 5,664 5,664 5,664 Unquoted Central Depository Bangladesh Limited 6,277,770 6,277,770 Market Stabilization Fund (MSF) Asset Management Company Limited 5,000,000 5,000,000 11,277,770 11,277,770 11,283,434 11,283,434

8.5 Valuation of investments

Cost / present Market/present Market/present value value value (Taka) at 31 Dec 2020 at 31 Dec 2019 (Taka) (Taka) Government securities Treasury bills and bonds Held for trading (HFT) 54,352,381,232 54,352,381,232 7,053,127,281 Held to maturity (HTM) 52,357,499,213 52,357,499,213 45,132,309,388 Prize bonds 8,628,400 8,628,400 8,031,500 106,718,508,845 106,718,508,845 52,193,468,169 Other investments Subordinated bonds Northwest Power Generation Company Limited 1,000,000,000 1,000,000,000 1,000,000,000 Standard Bank Limited 1,000,000,000 1,000,000,000 - Islami Bank Bangladesh Limited 1,000,000,000 1,000,000,000 - Ashugonj Power Distribution Limited 500,000,000 500,000,000 500,000,000 Bank Asia Limited 500,000,000 500,000,000 500,000,000 Al-Arafah Islami Bank Limited 1,500,000,000 1,500,000,000 500,000,000 First Security Islami Bank Mudaraba Bond 360,000,000 360,000,000 400,000,000 5,860,000,000 5,860,000,000 2,900,000,000 Shares (Quoted and unquoted) Number Cost per Quoted as at 31 December 2018 of Shares share (Taka) RAK Ceramics (Bangladesh) Limited 214 26.47 5,664 5,665 5,665 Sub total 214 26.47 5,664 5,665 5,665 Unquoted as at 31 December 2018 Central Depository Bangladesh Limited 2,284,721 2.75 6,277,770 6,277,770 6,377,770 Market Stabilization Fund (MSF) Asset Management Company Limited 500,000 10.00 5,000,000 5,000,000 5,000,000 Sub total 11,283,434 11,283,435 11,283,435 Total of other investments 5,871,283,434 5,871,283,435 2,911,283,435 Total investments 112,589,792,279 112,589,792,280 55,104,751,604 2020 2019 Taka Taka 8.6 Maturity grouping of investments Payable On demand 19,911,834 19,314,934 Within one to three months 5,983,304,715 2,013,169,031 Within three to twelve months 22,576,268,950 3,101,236,250 Within one to five years 53,148,049,768 24,082,836,126 More than five years 30,862,257,012 25,888,195,262 112,589,792,279 55,104,751,603 8.7 Disclosures for REPO and Reverse REPO transactions In terms of the instructions contained in DOS Circular No. 6 dated 15 July 2010, the disclosures requirements for REPO and Reverse REPO transactions of the Bank are furnished below: 8.7.1 Disclosure regarding outstanding REPO as on 31 December 2020 Amount Reversal SL. No. Name of the counter party Agreement Date (1st leg cash Date consideration) - - - - 8.7.2 Disclosure regarding outstanding Reverse REPO as on 31 December 2020

Amount Reversal SL. No. Name of the counter party Agreement Date (1st leg cash Date consideration) - - - - 8.7.3 Disclosure regarding overall transactions of REPO and Reverse REPO for the year ended 31 December 2020

Minimum Maximum Daily average outstanding outstanding outstanding Particulars during the during the during the year year year Taka Taka Taka Securities sold under repo / ALS i) With Bangladesh Bank - - - ii) With other banks and financial institutions - - - Securities purchased under reverse repo i) From Bangladesh Bank - - - ii) From other banks and financial institutions - - -

9. Loans and advances - Consolidated Main Operation [Note 9.1] Loans, cash credits, overdrafts, etc. 256,245,350,799 238,033,430,126 Bills purchased and discounted 1,983,551,092 4,845,110,193 258,228,901,891 242,878,540,319 Off-shore Banking Unit

Loans, cash credits, overdrafts, etc. 920,583,338 1,176,085,837 Bills purchased and discounted 14,233,421,801 12,185,083,049 15,154,005,139 13,361,168,886 Total loans and advances 273,382,907,030 256,239,709,205

ANNUAL REPORT 2020 413 2020 2019 9.1 Loans, cash credits, overdrafts etc.-Main Operation Taka Taka In Bangladesh Overdraft 31,162,729,003 26,344,947,894 Cash credit 34,283,595,654 42,008,043,817 Export cash credit 15,747,771,492 10,853,346,468 Transport loan 1,951,208,952 1,982,740,521 House building loan 6,137,437,502 5,012,411,908 Loan against trust receipt 4,196,149,661 4,054,439,232 Term loan - industrial 84,757,570,750 77,985,966,152 Term loan - other 52,217,108,357 46,291,294,994 Payment against document - cash 22,509,847 15,477,213 Payment against document - EDF 315,481,905 610,687,448 Consumer Finance 24,819,131,748 22,232,212,276 Staff loan 634,655,928 641,862,203 256,245,350,799 238,033,430,126 Outside Bangladesh - - 256,245,350,799 238,033,430,126 Bills purchased and discounted - Main Operation Payable in Bangladesh Inland bills purchased 1,881,592,372 4,781,891,227 Payable outside Bangladesh Foreign bills purchased and discounted 101,958,720 63,218,966 1,983,551,092 4,845,110,193 Lease receivables Lease payment receivables - - Less : Unearned interest income - - b) Total lease receivables - - Total loans and advances 258,228,901,891 242,878,540,319

Total loans and advances of the Bank includes outstanding amount against the Small and Medium Enterprises (SME) financing as follows [Note 9.5]:

Loans to Small and Medium Enterprise (SME) financing 35,428,746,166 34,744,588,820

9.2 Net loans and advances including bills purchased and discounted

Total loans and advances [Note 9.1] 258,228,901,891 242,878,540,319 Less : Provision agaInst loans and advances (specific and general) [Note 9.9(b)] 7,647,486,337 7,790,349,311 Less : Cumulative balance of interest suspense account [Note 14.1.4] 4,841,730,487 3,433,730,845 245,739,685,067 231,654,460,163

9.3 Residual maturity grouping of loans and advances including bills purchased and discounted Payable On demand 17,566,469,388 15,954,384,887 Within one to three months 73,071,584,813 68,712,715,752 Within three to twelve months 83,909,250,383 78,903,892,468 Within one to five years 65,445,913,937 51,710,593,769 More than five years 18,235,683,369 27,596,953,443 258,228,901,891 242,878,540,319 2020 2019 9.4 Loans and advances including bills purchased and discounted are classified Taka Taka into the following broad categories - Main Operation a) Loans and advances

In Bangladesh Loans 190,799,026,142 169,680,438,415 Cash credit 34,283,595,654 42,008,043,817 Overdraft 31,162,729,003 26,344,947,894 256,245,350,799 238,033,430,126 Outside Bangladesh - - 256,245,350,799 238,033,430,126 b) Bills purchased and discounted Payable in Bangladesh 1,881,592,372 4,781,891,227 Payable outside Bangladesh 101,958,720 63,218,966 1,983,551,092 4,845,110,193 Total (a+b) 258,228,901,891 242,878,540,319

9.5 Loans and advances including bills purchased and discounted on the basis of significant concentration

i. Loans and advances to the allied concerns of the directors - -

ii. Advances to chief executive and other senior executives (AVP and above) 633,000,291 639,969,362 iii. Advances to customers’ group Commercial lending 8,986,544,476 7,790,004,543 Agricultural loan 5,198,927,388 4,390,582,298 Export financing 1,347,490,459 1,794,279,827 Consumer credit scheme 26,421,309,873 15,570,613,573 Small and medium enterprise financing 35,428,746,166 34,744,588,820 Staff loan (except Sl. No. ii) 1,655,637 1,892,841 House building loan (other than the employees) 4,219,393,560 3,315,779,740 Others 175,991,834,041 174,630,829,315 257,595,901,600 242,238,570,957 258,228,901,891 242,878,540,319

iii(a) Disclosure on large loan

Disclosures on large loan i.e. loan sanctioned to any individual or enterprise or any organization of a group amounting to 10% or more of the Bank’s total capital and classified amount therein and measures taken for recovery of such loan have been furnished as under. Mentionable that, total capital of the Bank as at 31 December 2020 was Taka 46,083,939,013 against that of Taka 37,192,841,326 as at 31 December 2019.

iii (a.i) Number of clients to whom loans and advances sanctioned each more than 10% of the Bank’s total capital (Funded and Non-Funded) 34 29 iii (a.ii) Amount of outstanding loans and advances [to the clients quoted in iii(a.i) above] -Funded 83,056,600,000 91,435,200,000

Amount of outstanding loans and advances [to the clients quoted in iii(a.i) above] -Non- 49,634,590,000 37,994,700,000

iii (a.iii) Amount of classified loans and advances [out of the amount quoted in iii(a.ii) above] - 3,437,122,850

iii (a.iv) Measures taken for recovery [for the amount mentioned in iii(a.iii) above] Not applicable Not applicable

ANNUAL REPORT 2020 415 2020 2019 Taka Taka 9.6 Industry-wise loans and advances including bills purchased and discounted Agriculture, fisheries and forestry 5,198,927,388 4,390,582,298 Pharmaceutical industries 4,459,596,321 5,330,928,493 Textile industries 64,336,344,447 63,974,171,192 Ready- made garment industries 35,997,423,500 29,407,146,487 Chemical industries 2,057,432,003 1,670,321,165 Bank and other financial institutions 1,180,138,516 2,313,817,965 Transport and communication 4,299,909,630 6,367,129,834 Electronics and automobile industries 5,603,026,994 7,061,839,422 Housing and construction industries 12,155,804,271 16,978,168,428 Energy and power industries 5,881,341,940 3,830,181,224 Cement and ceramic industries 2,844,408,280 2,830,317,010 Food and allied industries 8,182,158,978 8,765,462,362 Engineering and metal industries including ship breaking 5,139,991,274 5,116,108,318 Service industries 18,482,137,909 15,517,293,937 Other industries 82,467,174,557 69,325,072,183 258,285,816,008 242,878,540,319 9.7 Geographical location-wise loans and advances including bills purchased and discounted Urban Dhaka Division 199,622,171,307 186,390,002,023 Chittagong Division 15,096,180,368 13,808,635,289 Khulna Division 2,712,145,419 4,954,683,411 Rajshahi Division 2,236,395,117 2,070,965,488 Barisal Division 702,851,002 524,834,498 Sylhet Division 3,060,810,202 3,046,062,931 Rangpur Division 1,728,212,280 1,981,741,987 Mymensingh Division 24,123,495,443 23,741,035,791 249,282,261,138 236,517,961,418 Rural Dhaka Division 7,166,658,090 5,126,631,772 Chittagong Division 865,041,675 511,089,230 Khulna Division - - Rajshahi Division 107,004,759 94,424,532 Barisal Division - - Sylhet Division 402,513,383 288,842,429 Rangpur Division - - Mymensingh Division 405,422,846 339,590,938 8,946,640,753 6,360,578,901 258,228,901,891 242,878,540,319 9.8 Broad economic sector-wise segregation of loans and advances including bills purchased and discounted Government and autonomous bodies - - Bank and financial institutions (public and private) 1,180,138,516 2,313,817,965 Other public sector 562,616,362 1,085,612,470 Private sector 256,486,147,013 239,479,109,884 58,228,901,891 42,878,540,319 9.9 a) Classification of loans and advances including bills purchased and discounted Year 2020 2019 Status of loans and advances Outstanding amount (Taka) Total Main Operation Off-shore Mix (%) Outstanding Mix (%) Total [Note 9.9.b] Banking Unit amount (Taka) Unclassified loans and advances Standard (including staff loans) 248,366,535,994 15,154,005,139 263,520,541,133 96.39% 237,171,344,205 92.56% Special mention account 3,940,497,972 - 3,940,497,972 1.44% 7,838,262,334 3.06% Total unclassified loans and advances 252,307,033,966 15,154,005,139 267,461,039,105 97.83% 245,009,606,539 95.62% Classified loans and advances Substandard 2,743,331,507 - 2,743,331,507 1.00% 4,777,610,859 1.86% Doubtful 283,555,399 - 283,555,399 0.10% 1,517,761,318 0.59% Bad/loss 2,894,981,019 - 2,894,981,019 1.06% 4,934,730,489 1.93% Total classified loans and advances 5,921,867,925 - 5,921,867,925 2.17% 11,230,102,666 4.38% Total loans and advances 258,228,901,891 15,154,005,139 273,382,907,030 100.00% 256,239,709,205 100.00% b) Classification and provisioning of loans and advances including bills purchased and discounted

Amount of Percentage Amount of outstanding loans Base for (%) of provision Amount of Classification / Status of and advances provision provision required as at provision loans and advances as at required as per 31 December required as at 31 31 December 2020 Bangladesh 2020 December 2019 (Taka) (Taka) Bank’s directives (Taka) (Taka) Unclassified loans and advances All unclassified loans (other than loans under small and medium enterprise, consumer financing and short term agricultural credit) 182,735,623,663 182,735,623,663 1% 1,827,925,379 1,683,600,310 Small and medium enterprise financing 33,207,821,742 33,207,821,742 0.25% 84,673,194 81,812,966 Consumer financing (other than housing finance under consumer financing scheme) 13,385,158,634 13,385,158,634 2% 267,703,173 654,922,054 Consumer Financing(Credit Card) 2,359,545,880 2,359,545,880 2% 47,190,918 44,261,869 Consumer financing (for housing finance) 11,169,699,268 11,169,699,268 1% 111,696,993 87,726,815 Loans to BHs/MBs/SDs 467,463,265 467,463,265 2% 9,349,265 8,975,454 Short term agricultural credit 5,022,429,872 5,022,429,872 1% 50,224,299 41,513,863 Micro credit 18,793,669 18,793,669 1% 187,937 232,917 248,366,535,994 248,366,535,994 2,398,951,157 2,603,046,249 Special mention account All unclassified loans (other than loans under small enterprise and consumer financing) 3,469,053,505 3,469,053,505 1% 52,701,488 74,628,012 Small & Medium enterprise financing 412,594,274 412,594,274 0.25% 1,031,486 1,069,741 Consumer financing (other than housing finance under consumer financing scheme) 17,185,359 17,185,359 2% 343,707 1,119,305 Consumer financing (Credit Card) 40,999,869 40,999,869 2% 819,997 640,929 Consumer financing (for housing finance) 664,965 664,965 1% 6,650 15,828,322 3,940,497,972 3,940,497,972 54,903,328 93,286,309 Sub-total General Provision [A] 252,307,033,966 252,307,033,966 2,453,854,485 2,696,332,558 Special General Provision-Covid 19 (Calculated) [B] 817,531,599 - Classified loans and advances* Sub Standard Small 303,297,949 56,425,692 5% 2,821,285 575,799,531 Sub Standard Other 2,435,731,293 946,976,819 20% 241,246,711 - Sub Standard MC 4,302,265 1,966,887 5% 98,344 119,321 Doubtful Small 196,663,627 29,499,544 20% 5,899,909 495,860,724 Doubtful Other 86,891,772 39,313,436 50% 19,656,718 - Doubtful MC - - 5% - - Bad /loss 2,894,981,019 1,213,521,863 100% 3,930,377,286 4,022,237,177 Sub-total [C] 5,921,867,925 2,287,704,240 4,200,100,253 5,094,016,753 Total provision required [A+B+C] 258,228,901,891 254,594,738,206 7,471,486,337 7,790,349,311 Total provision maintained [Note 14.1.3] 7,647,486,337 7,790,349,311 Total provision surplus 176,000,000 - * The aforesaid provision has been calculated as per Bangladesh Bank letter DBI-1/57/2021-532 dated 3 March 2021 whereby amount of total classified loans and advances is shown Taka 8,285,326,000 (3.21%) and comprise of substandard Taka 1,301,598,000 (0.50%), doubtful Taka 213,760,000 (0.08%) and Bad /loss Taka 6,679,969,000 (2.62%). As per earlier instruction of Bangladesh Bank, due to COVID 19 Pandemic, the Bank has not downgraded any loans and advances from its earlier classification status as at 31 December 2019 and hence maintain the above classification status.

ANNUAL REPORT 2020 417 2020 2019 Taka Taka b.1) Total provision required Main Operation (i) 7,471,486,337 7,790,349,311 Off-shore Banking Unit (ii) 151,540,051 133,611,689 7,623,026,388 7,923,961,000

Total provision maintained Main Operation (iii) 7,647,486,337 7,790,349,311 Off-shore Banking Unit (iv) 151,540,051 133,611,689 7,799,026,388 7,923,961,000

Total provision surplus Main Operation (iii-i) 176,000,000 - Off-shore Banking Unit (iv-ii) - - 176,000,000 - c) Disclosure on large loan restructuring The Bank has not any restructured large loan facilities in 2020.

9.10 Particulars of loans and advances including bills purchased and discounted

i) Loans considered good in respect of which the banking company is fully secured 239,055,092,174 216,161,900,884

ii) Loans considered good for which the banking company holds no other security other than the debtor’s personal guarantee 582,024,583 1,192,873,887

iii) Loans considered good and secured by the personal undertakings of one or more parties in addition to the personal guarantee of the debtors 18,591,785,134 25,523,765,548

iv) Loans adversely classified; provision not maintained there against - - 258,228,901,891 242,878,540,319

Loans due by directors or officers of the banking company or any of v) 634,655,928 641,862,203 them either separately or jointly with any other persons *

vi) Loans due from companies or firms in which the directors of the banking company have interests as directors, partners or managing agents or in case of private companies as members - -

vii) Maximum total amount of advances, including temporary advances made at any time during the year to directors or managers or officers of the banking company or any of them either separately or jointly with 634,655,928 641,862,203 any other persons

viii) Maximum total amount of advances, including temporary advances granted during the year to the companies or firms in which the directors of the banking company have interests as directors, partners or managing agents or in the case of private companies as members Nil Nil ix) Due from other banking companies - - 2020 2019 Taka Taka

x) Amount of classified loans on which interest has not been charged 2,894,981,019 4,934,730,489

a.i) Increase (deetease) in specific provision (893,916,500) (66,979,952) a.ii) Amount realized against loan previously written-off 1,199,595,949 4,162,348,667 a.iii) Amount realized against loan previously written-off 104,737,718 68,695,041 b) Amount of provision kept against loan classified as ‘bad/loss’ on the date of preparing the balance sheet 3,930,377,286 4,022,237,177 c) Interest creditable to the interest suspense account (during the year) 6,112,659,673 7,089,387,090

* Amount represents loans to employees of the Bank only. xi) a) Cumulative amount of written-off loan Opening balance 7,086,010,835 2,992,827,517 Add: Amount written-off during the year 1,199,595,949 4,162,348,667 Less: Amount realized against written-off loan during the year 104,737,718 68,695,041 Less: Amount waiver / adjustment against written-off loan during the year - 470,308 Balance as on 31 December 8,180,869,066 7,086,010,835

b) Amount realized against loan previously written - off 104,737,718 68,695,041 c) Amount of written-off loan for which lawsuit has been filed for its recovery 9,974,313,982 2,992,827,517

9.11 Bills purchased and discounted

Payable In Bangladesh 1,881,592,372 4,781,891,227 Outside Bangladesh 101,958,720 63,218,966 1,983,551,092 4,845,110,193

9.11.1 Bills purchased and discounted on the basis of the residual maturity grouping

Payable Within one month 837,797,516 2,046,441,506

More than one month but less than three months 830,305,364 2,028,140,843

More than three months but less than six months 315,448,212 770,527,844

Above six months - -

1,983,551,092 4,845,110,193

ANNUAL REPORT 2020 419 9.12 Litigation filed by the Bank As of the reporting date, the Bank filed lawsuit against recovery of its defaulted loans and advances as under: Lawsuit filed for recovery of loans and advances outstanding as at Name of the Branch 31 December 2020 2019 Local Office 1,169,826,741 973,007,252 Agrabad Branch 694,013,098 694,758,069 Banani Branch 6,394,331 3,984,584 Nababpur Branch 65,833,352 61,942,575 Motijheel F. Ex. Branch 2,183,329,913 1,831,353,344 Narayangonj Branch 1,527,775 1,527,775 Kawran Bazar Branch 114,611,131 174,756,384 Baburhat Branch 3,623,924,430 3,549,129,994 Dhanmondi Branch 1,936,458,243 1,640,444,872 Patherhat Branch 3,689,070 3,590,906 Hathazari Branch 692,521 692,521 Mohakhali Branch 126,751,329 167,401,329 Mirpur Branch 546,988,239 544,488,378 Gulshan Branch 476,053,502 459,205,099 Khulna Branch 6,619,080 6,619,080 Sylhet Branch 6,658,923 6,903,923 Dhaka EPZ Branch 1,110,224 - Board Bazar Branch 174,905,286 174,905,286 Netaiganj Branch 291,017 306,017 Bogura Branch 41,309,047 41,309,047 Elephant Road Branch 271,484,233 1,033,979 Barisal Branch 272,693 280,693 Shimrail Branch 1,121,439 253,127 O. R. Nizam Road Branch 119,526,785 95,910,504 Joypara Branch 7,201,012 4,692,777 Biswanath Branch 3,353,398 3,353,398 Moulvibazar Branch 6,477,481 6,398,177 Muradpur Branch 143,418,355 144,979,628 Golapganj Branch 1,235,324 - Rajshahi Branch 244,154 244,154 Savar Bazar Branch 387,742 387,742 Gazipur Chowrasta Branch 346,332 346,332 Imamganj Branch - 258,495 Feni Branch 48,078,658 3,113,639 Cumilla Branch 174,809,203 174,809,203 Jubilee Road Branch 3,655,089 3,928,089 Kadamtoli Branch 33,008,583 34,248,583 Cox's Bazar Branch 833,366 873,366 Lohagara Branch 1,215,451 911,362 Ring Road Branch 1,198,400 1,290,468 Manikganj Branch 9,040,303 9,470,836 Fatikchari Branch 6,172,006 6,172,006 Chowmuhani Branch 7,696,558 7,696,558 Goala Bazar Branch 1,932,000 2,144,000 Khatungonj Branch 38,968,877 38,650,925 Beani Bazar Branch 450,000 450,000 Chattak Branch 6,844,005 4,438,000 Saidpur Branch 854,893 2,242,944 Rangpur Branch 9,615,735 4,102,261 Mirpur Circle-10 Branch 1,113,408 - Halishahar Branch 19,175,224 19,175,224 Basurhat Branch 13,479,555 9,532,691 Lawsuit filed for recovery of loans and advances outstanding as at Name of the Branch 31 December 2020 2019 Pabna Branch 25,337,076 22,403,845 Satmasjid Road Branch 412,401,089 286,337,680 Dinajpur Branch 11,610,477 9,379,125 Bhairab Branch 708,189 383,027 Dagonbhuiyan Branch 2,767,643 2,767,643 Gobindaganj Branch 17,947,018 19,133,060 Rampura Branch 75,230,799 75,230,799 Tongi Branch 12,896,152 12,896,152 Satkhira Branch 20,914,768 22,616,052 Madaripur Branch 1,027,000 2,507,000 DakshinKhan SME/Agriculture Branch 555,202 - Dhaka Dakshin SME/Agriculture Branch 512,545 612,545 Munshiganj Branch 694,433 836,685 Habiganj Branch 14,397,235 9,991,169 Chittagong EPZ Branch 371,498 - Shahjalal Uposhohor Branch 5,022,510 1,552,131 Bijoynagar Branch 24,394,454 24,394,454 Rawzan SME/Agriculture Branch 413,024 589,375 Progoti Shoroni Branch 85,249,507 58,656,443 Tangail Branch 1,195,949 - Digpait Branch 12,203,346 11,132,578 Jamalpur Branch 44,843,359 3,937,430 Naogaon Branch 3,419,673 692,000 Vatara Branch 285,083 - Laxmipur Branch 1,439,048 96,000 Mawna Branch 4,195,823 1,746,555 Mirer Bazar Branch 2,653,989 2,673,989 Ashulia Branch 1,872,162 - Patuakhali Branch 5,763,909 - Panchagarh Branch 33,559,843 32,508,634 Chokoria Branch 1,700,102 1,386,201 Amin Bazar Branch 8,470,408 - Tejgaon Branch 1,076,501 - Abdullahpur Branch 72,910,741 72,910,741 Sirajganj Branch 3,459,551 3,673,098 Kapasia Branch 3,622,888 - Elenga Branch 1,444,091 1,444,091 Chapai Nawabganj Branch 81,316,221 43,874,631 Chandpur Branch 11,095,041 10,497,768 Velanagar Branch 4,851,927 - Gopaldi Branch 1,095,065 844,653 Thakurgaon Branch 12,551,254 - Corporate Branch 17,963,494 - ID (Treasury-FO) 531,747,778 422,777,778 CBD (Cluster-5) 90,283,029 85,150,641 CBD (Cluster-6) 19,635,115 19,635,115 Total 13,801,303,526 12,182,984,687

ANNUAL REPORT 2020 421 2020 2019 Taka Taka 10. Fixed assets at cost or revalued amount including land, building, furniture and fixtures - Consolidated Main Operation [Note 10.1] Total cost 19,027,278,501 15,200,407,656 Less: Accumulated depreciation 11,144,436,289 9,819,801,595 7,882,842,212 5,380,606,061 Off-shore Banking Unit Total cost 101,633 101,633 Less: Accumulated depreciation 101,551 101,551 82 82 Total Fixed assets at cost or revalued 7,882,842,294 5,380,606,143

Details are shown in Annexure-A

10.1 Fixed assets at cost or revalued amount including land, building, furniture and fixtures Land 748,360,000 748,360,000 Building 399,543,957 399,543,957 Interior decoration 1,279,978,236 1,236,646,954 Furniture and fixtures 425,537,884 381,366,883 Other machinery and equipment 2,571,768,441 2,362,805,128 Computer equipment 5,478,464,515 4,832,994,348 Computer software 606,018,519 537,093,397 Motor vehicles 580,850,310 635,371,255 ATM Booth 1,317,592,740 1,206,643,888 ATM/Fast Track (Deposit Machine) 2,879,320,255 2,859,387,255 Right of use of asset - IFRS 16: lease 2,739,649,053 - 194,591 194,591 19,027,278,501 15,200,407,656 Less: Accumulated depreciation 11,144,436,289 9,819,801,595 7,882,842,212 5,380,606,061 11. Other assets Main Operation Income generating other assets [Note 11.1.a] - - Non-income generating other assets [Note 11.1.b] 24,389,793,021 21,269,259,489 24,389,793,021 21,269,259,489 Off-shore Banking Unit 227,850 763,324 Less: Inter Bank transactions [Note 14] (35,559,965) (13,886,617) Total Other assets 24,354,460,906 21,256,136,196

11.1.a Income generating other assets i) Investment in shares of subsidiary companies: In Bangladesh - - Outside Bangladesh - - - - 2020 2019 Taka Taka 11.1.b Non-income generating other assets

i) Stationery, stamps, printing materials in stock 143,346,138 108,093,219 ii) Advance rent and advertisement 688,429,194 1,331,417,556 iii) Interest accrued on investment but not collected, commission and brokerage receivable on share and debentures and other income receivable 1,798,308,038 1,229,671,940 iv) Security deposits 21,676,180 21,377,839 V) Preliminary, formation and organization expenses, renovation/ 728,865,676 529,643,576 development expenses and prepaid expenses vi) Branch adjustment (net) - - vii) Suspense account 3,673,847 3,408,075 viii) Silver - - ix) Others [Note 11.2] 21,005,493,948 18,045,647,284 24,389,793,021 21,269,259,489

11.2 Break-up of others

Encashment of Sanchaya Patra (awaiting realization) 978,050,019 726,256,923 Advance tax [Note 11.2.1] 14,204,115,031 12,398,789,738 Deferred tax [Note 11.2.2] 2,272,090,028 2,581,667,377 Sundry assets [Note 11.2.3] 3,551,238,870 2,338,933,246 21,005,493,948 18,045,647,284

11.2.1 Advance tax The amount is stated after adjustment of advance income tax against final assessment orders for the accounting years 1996, 1997, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2015 and 2016. [Note 14.1.2 and 14.1.2.2]

11.2.2 Deferred tax

Opening balance 2,581,667,377 2,393,185,535 Add: Deferred tax assets / (liability) for the year [Note11.2.2.1] (309,577,349) 188,481,842 Closing balance 2,272,090,028 2,581,667,377

11.2.2.1 Detail calculation of deferred tax asset / (liability)

In terms of instructions contained in BRPD Circular No. 11 dated 12 December 2011 and provision of International Accounting Standard (IAS) - 12, “ Taxation”, the detail calculation of deferred tax asset / (liability) of the Bank is furnished as under:

i) Temporary timing difference in written down value (WDV) of Fixed Assets

Accounting written down value [carrying amount] of fixed assets (excluding value of land) [A] 4,327,653,852 4,476,662,349 Written down value of fixed assets as per Tax (Tax base) as of the balance sheet date (excluding value of land) [B] 5,293,011,340 5,252,577,936 Temporary timing difference in Accounting WDV and Tax WDV (ex- cluding value of land) [B - A] 965,357,488 775,915,587

ANNUAL REPORT 2020 423 2020 2019 Taka Taka ii) Temporary timing difference in provision for other classified assets [Note 14.1.1] 610,949,000 582,014,000 iii) Temporary timing difference in specific provision for loans and advances [Note 14.1.3(A)] 4,200,100,253 5,094,016,753 iv) Temporary timing difference in provision for Gratuity [Note 14.1] 282,500,000 432,500,000

Total amount of temporary timing differences in assets / (liabilities) [i+ii+iii] [C] 6,058,906,741 6,884,446,340

Effective tax rate [D] 37.50% 37.50% Deferred tax asset / (liability) [ C X D] 2,272,090,028 2,581,667,377

Deferred tax (liability) / asset for the year [ Note 11.2.2 ] (309,577,349) 188,481,842 v) Detail description of deferred tax asset recognized on specific loan loss provision a) Amount of deferred tax asset recognized on specific loan loss provision Temporary timing difference in specific provision for loans and advances 4,200,100,253 5,094,016,753 Effective tax rate 37.50% 37.50% Deferred tax asset recognized 1,575,037,595 1,910,256,282 b) Method of calculation As per IAS -12 As per IAS -12 and Income Tax and Income Tax Ordinance, 1984 Ordinance, 1984

c) Year of origin of deferred tax asset on specific loan loss provision 2007 229,694,727 229,694,727 2008 (20,889,786) (20,889,786) 2009 106,847,212 106,847,212 2010 60,085,384 60,085,384 2011 75,234,728 75,234,728 2012 132,159,371 132,159,371 2013 393,254,949 393,254,949 2014 313,950,178 313,950,178 2015 (177,082,181) (177,082,181) 2016 794,573,764 794,573,764 2017 132,248,546 132,248,546 2018 (104,703,128) (104,703,128) 2019 (25,117,482) (25,117,482) 2020 (335,218,687) - Total as at 31 December 1,575,037,595 1,910,256,282 As per BRPD Circular no. 11 dated 12 December 2011, the above amount of deferred tax originated against specific loan loss provision and included in the accumulated retained earning is not distributable as dividend.

d) Amount recognized and realized in the financial statements for the year (335,218,687) (25,117,482) e) Expected time of adjustment of deferred tax asset recognized against specific loan loss provision Temporary timing difference in terms of specific provision against loans and advances will be adjusted in future when the “loans and ad- vances” will be recovered or written-off. 2020 2019 11.2.3 Sundry assets Taka Taka

Sundry debtors 61,073,485 75,924,088 Cash remittance 91,558,511 119,617,164 Others 3,398,606,874 2,143,391,994 3,551,238,870 2,338,933,246 12. Borrowings from other banks, financial institutions and agents -Consolidated

Main Operation [Note 12.1] 19,079,301,498 9,466,563,691 Off-shore Banking Unit 13,877,075,406 12,615,768,985 Less: Inter Bank transactions [Note 6] (7,160,324,845) (3,162,828,044) 25,796,052,059 18,919,504,632 12.1 Borrowings from other banks, financial institutions and agents- Main operation

a) In Bangladesh

Secured Refinance from Bangladesh Bank Housing [Note 12.3] 1,450,806 3,870,322 Stimulus Fund 3,592,894,484 - Export Development Fund (EDF) 14,153,285,885 8,732,628,702 Small and Medum Enterprise (SME) [Note 12.2, 12.3] 712,679,583 54,307,500 Financial Sector Support Project (FSSP) 618,907,046 650,124,443.00 19,079,217,804 9,440,930,967 Unsecured Credit lines From Off-shore Banking Unit, Dutch-Bangla Bank Limited 83,694 25,632,724 83,694 25,632,724 19,079,301,498 9,466,563,691 b) Outside Bangladesh Secured - -

Unsecured Others - - - -

Total (a+b) 19,079,301,498 9,466,563,691

12.2 Small and Medium Enterprise (SME) Refinance facility (ies) availed from Bangladesh Bank under the following schemes for Small and Medium Enterprises :

Asian Development Bank Fund [Notes 12.3] 1,059,375 1,059,375 Woman Enterpreneur Fund [Notes 12.3] 70,257,708 35,468,125 10 Taka Account Fund [Note 12.3] 8,887,500 - SMEDP-2 Fund 44,500,000 17,780,000 Covid-19 Fund 587,975,000 - 712,679,583 54,307,500

ANNUAL REPORT 2020 425 2020 2019 Taka Taka 12.3 Assets pledged as security for liability

As at the reporting date of these financial statements, the Bank had no assets pledged as security except the Balance with Bangladesh Bank (local currency) against liability of refinance facility availed from Bangladesh Bank under the Housing Loan, Small & Medium Enterprising Financing under Asian Development Bank Fund, International Development Agency (IDA), Women Entrepreneur Fund and 10 Taka Account Fund by the Bank. [Note 12.1] 12.4 Residual maturity grouping of borrowings from other banks, financial institutions and agents Repayable Within one month 7,761,927,192 5,384,046,847 Over one month but within three months 5,613,880,195 4,213,480,773 Over three months but within twelve months 6,465,892,084 4,852,955,715 Over one year but within five years 4,227,938,507 3,173,266,438 More than five years 1,726,414,081 1,295,754,859 25,796,052,059 18,919,504,632 13. Deposits and other accounts Main Operation [Note 13.1] 362,417,521,436 302,109,288,028 Off-shore Banking Unit 193,468,309 49,928,041 362,610,989,745 302,159,216,069

13.1 Deposits and other accounts - Main Operation

Current deposits and other accounts Current deposits 76,810,918,332 56,592,670,628 Foreign currency deposits 2,414,052,540 1,641,805,850 Sundry deposits [Note 13.2] 9,673,608,425 8,035,826,118 88,898,579,297 66,270,302,596 Bills payable Payment order 3,908,611,527 4,315,416,431 Demand draft 16,694,092 16,715,464 3,925,305,619 4,332,131,895

Savings bank deposits 170,213,630,379 145,754,017,061

Term deposits Fixed deposits 60,913,989,431 53,307,675,939 Special notice deposits 38,370,761,967 32,339,704,154 Non resident foreign currency deposits 1,786,067 1,754,393 Resident foreign currency deposits 62,658,168 68,962,822 Monthly term deposits 30,810,508 34,739,168 99,380,006,141 85,752,836,476 362,417,521,436 302,109,288,028 2020 2019 13.2 Details of sundry deposits Taka Taka

Margin on irrevocable letters of credit 675,300,998 414,757,673 Margin on letters of guarantee 325,345,809 312,058,958 Margin on inward foreign documentary bills for collection (IFDBC) 293,959,209 360,606,587 Sundry deposit on foreign bills purchased awaiting for realization (FBPAR) 4,925,840,173 4,221,459,816 Sundry deposit - withholding tax -IT 356,138,992 374,540,668 Sundry deposit - excise duty 522,689,120 401,529,395 Sundry deposit - withholding tax -VAT 194,882,140 159,195,047 Sundry deposits-sale proceeds of Sanchay Patra 77,750,200 210,625,000 Interest payable on deposit accounts 674,691,995 642,840,450 Deposits on lease finance - - Others sundry deposits 1,627,009,789 938,212,524 9,673,608,425 8,035,826,118

13.3 Segregation of deposits and other accounts Other than inter-bank deposits 362,406,589,341 302,016,710,635 Inter-bank deposits [Note 13.7] 10,932,095 92,577,393 362,417,521,436 302,109,288,028 13.4 Residual maturity grouping of deposits and other accounts (a) Other than inter-bank deposits

Repayable On demand 24,218,310,120 20,360,132,901 Within one month 19,279,929,086 16,057,087,661 Over one month but within six months 102,278,440,231 85,181,531,181 Over six months but within one year 78,663,841,688 65,514,359,316 Over one year but within five years 83,273,623,554 69,353,568,018 Over five years but within ten years 54,692,444,661 45,550,031,558 362,406,589,341 302,016,710,635 (b) Inter-bank deposits Repayable On demand 876,681 7,424,091 Within one month 7,157,332 60,611,175 Over one month but within six months 2,898,082 24,542,127 Over six months but within one year - - Over one year but within five years - - Over five years but within ten years - - 10,932,095 92,577,393 Total (a+b) 362,417,521,436 302,109,288,028

13.5 Unclaimed deposits for ten (10) years and more held by the Bank - - - -

ANNUAL REPORT 2020 427 2020 2019 Taka Taka 13.6 As at the reporting date of these financial statements, there were no valuable items unclaimed for ten (10) years or more held by the Bank.

13.7 Details of inter-bank deposits

In current deposits account Al-Arafah Islami Bank Limited 1,235,803 40,227,183 Bangladesh Commerce Bank Limited 50,253 566,403 Bangladesh Krishi Unnayan Bank 874,334 875,524 Brac Bank Limited 2,007 60,025 Southeast Bank Limited 3,305 4,685 2,165,702 41,733,820 In special notice deposits account Janata Bank Limited 52,363 53,168 Dhaka Bank Limited 7,308,061 6,396,192 National Credit and Commerce Bank Limited 144,080 139,435 Prime Bank Limited 980,038 946,510 ICB Islami Bank Limited 116,719 114,283 The City Bank Limited 8,479 9,605 Habib Bank Limited 156,653 43,184,380 8,766,393 50,843,573 10,932,095 92,577,393

13.8 Sector-wise break up of deposits and other accounts

Year 2020 2019 Deposit and other accounts Outstanding Outstanding Mix (%) Mix (%) amount (Taka) amount (Taka) a) Other than inter-bank deposits Government institutions 1,693,893,000 0.47% 1,700,620,000 0.56% Autonomous and semi autonomous bodies 1,865,398,000 0.51% 1,568,084,000 0.52% Public non-financial corporations 12,041,260,000 3.32% 8,846,037,000 2.93% Local authorities 1,390,789,000 0.38% 1,939,854,000 0.64% Non-bank depository corporations-public - 0.00% - 0.00% Other financial intermediaries-public 24,433,000 0.01% 1,941,000 0.00% Insurance companies and pension funds - public 411,386,000 0.11% 224,380,000 0.07% Private sector (including individual public deposit) 344,979,430,341 95.20% 287,735,794,635 95.27% 362,406,589,341 99.997% 302,016,710,635 99.99% b) Inter-bank deposits [Note 13.7] State-owned commercial banks (SCBs) 52,363 0.00% 53,168 0.00% Specialised banks (SBs) 874,334 0.00% 875,524 0.00% Private commercial banks (PCBs) 10,005,398 0.003% 91,648,701 0.01% 10,932,095 0.003% 92,577,393 0.01% Total (a+b) 362,417,521,436 100.00% 302,109,288,028 100.00% 2020 2019 Taka Taka 14. Other liabilities Main Operation [Note 14.1] 37,511,749,343 31,073,493,100 Off-shore Banking Unit 215,564,352 249,750,965 Less: Inter Bank transactions [Note 11] (35,559,965) (13,886,617) 37,691,753,730 31,309,357,448 14.1 Other liabilities- Main operation Note Unclaimed dividends 12,580,929 11,346,394 Provision for expenses 1,351,638,405 694,237,911 Contribution to Dutch-Bangla Bank Limited Employees’ Superannuation Fund 57,500,000 47,500,000 Contribution to Dutch-Bangla Bank Limited Employees’ Gratuity Fund 282,500,000 432,500,000 Provision for interest on credit lines, refinance scheme and subordinated debt 121,915,485 136,179,946 Branch adjustment (net) 331,072,646 141,355,153 Provision for classified assets 14.1.1 610,949,000 582,014,000 Provision for taxation 14.1.2 18,351,135,454 16,857,652,849 Accumulated provision for loans and advances including off-balance sheet exposures 14.1.3 8,449,994,405 8,517,205,216 Cumulative balance of interest suspense account 14.1.4 4,841,730,487 3,433,730,845 Lease Liability-IFRS-16 2,143,362,295 - Others 957,370,237 219,770,786 37,511,749,343 31,073,493,100 14.1.1 Provision for classified assets Provision for other classified assets [Note 14.1.1.1] 610,949,000 582,014,000 Provision for nostro accounts [Note 14.1.1.3] - - 610,949,000 582,014,000 14.1.1.1 Provision for other classified assets As per BRPD Circular No. 14 dated 25 June 2001, the following amount has been provided in the financial statements of the Bank as provision for other classified assets (legal expenses recoverable from the defaulted borrowers): Opening balance 582,014,000 480,793,000 Add: Provision made for the year 28,935,000 101,221,000 Closing balance [Note 14.1.1.2] 610,949,000 582,014,000

14.1.1.2 Break up of provision for other classified assets BIFC (Provision against placement of FDRs classified as Bad) 367,666,667 367,666,667 International Leasing (Provision against placement of FDRs classified as Bad) 90,000,000 90,000,000 Legal expenses recivable 36,575,715 30,594,779 Protested bills recivable 35,481,412 37,187,230 Others 81,225,206 56,565,324 610,949,000 582,014,000 14.1.1.3 Provision for nostro accounts As per instructions contained in the Circular Letter No. FEPD (FEMO)/01/2005- 677 dated 13 September 2005 issued by Foreign Exchange Policy Department of Bangladesh Bank, following provision has been made against the un-reconciled debit balance of nostro accounts: Opening balance - - Add: Adjustment during the year - - Closing balance - -

ANNUAL REPORT 2020 429 2020 2019 Taka Taka 14.1.2 Provision for taxation Current tax Opening balance 16,857,652,849 16,336,918,366 Add: Provision made for the year [Note 14.1.2.1] 3,852,516,597 3,283,420,884 Less: Adjustment made against Advance Tax/Adjustment made against final assessment orders by the Deputy Commissioner of Taxes or the Appellate Authority 2,359,033,992 2,762,686,401 Closing balance [Note 14.1.2.2] 18,351,135,454 16,857,652,849 14.1.2.1 Current tax - Provision for the year On Taka Tax rate Banking business income (calculated) * 10,275,444,897 37.50% 3,853,291,836 3,285,772,038 Add: Dividend income * 5,711,803 20.00% 1,142,361 1,142,361 Less: Rebate on allowable CSR (calculated) 19,176,000 10.00% (1,917,600) (3,493,515) Add/Less: Adjustment for the previous year - 37.50% - - 3,852,516,597 3,283,420,884

* Taxable Income [Banking business income (calculated) and Dividend income] 10,281,156,700 8,773,482,374 14.1.2.2 Assessment of income tax has been finalized with the tax authority for the accounting years 1996, 1997, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008,2009, 2015 and 2016. [Note 11.2.1] Final assessment of income tax for accounting years 1998, 1999, 2000, 2010, 2011, 2012, 2013 and 2014 are pending with Appellate Authorities. Full tax provision has been made in the accounts for the respective years based on the latest assessment orders made by the Deputy Commissioner of Taxes or Appellate Authorities. 14.1.3 Accumulated provision for loans and advances and Off-balance sheet exposures

(A) Specific provision for bad and doubtful loans and advances Opening balance 5,094,016,753 5,160,996,705 Less : Fully provided debt written-off 999,496,456 3,446,898,003 Add: Recoveries of amounts previously written-off 138,671,837 28,378,993 Add: Specific provision for the year (33,091,881) 3,351,539,058 Less: Recoveries and Provision no longer required - - Add: Net charge to profit and loss account - - Provision held at the end of the year [Note 9.9(b)] 4,200,100,253 5,094,016,753 (B) General provision

General provision against unclassified loans and advances

Opening balance 2,696,332,558 2,274,721,752 General provision for the year * (66,478,073) 421,610,806 Provision held at the end of the year [Note 9.9(b)] 2,629,854,485 2,696,332,558

Special General Provision Covid-19 against deferral loans

Opening balance - - Special general provision - Covid-19 for the year 817,531,599 - Provision held at the end of the year [Note 9.9(b)] 817,531,599 - 2020 2019 Taka Taka General provision against Off-balance sheet exposures As per the instructions contained in BRPD Circular No. 8 dated 7 August 2007 and BRPD Circular No. 10 dated 18 September 2007, following provision has been made against the Off-balance sheet exposures of the Bank: Opening balance 726,855,905 775,455,929 Add: Provision made for the year 75,652,163 (48,600,024) Provision held at the end of the year [Note 24.4.A] 802,508,068 726,855,905 Accumulated General provision for loans and advances including deferral loans & off-balance sheet exposures-Main Operation 4,249,894,152 3,423,188,463 Accumulated provision (General and Specific) for loans and advances including deferral loans & off-balance sheet exposures-Main Operation [A+B] 8,449,994,405 8,517,205,216

* General provision made for the period against unclassified loans and advances Main Operation [Note 14.1.3.B] (66,478,073) 421,610,806 Off-shore Banking Unit 17,928,362 (2,082,066) (48,549,711) 419,528,740 (C) Accumulated General provision against unclassified loans and advances 2,629,854,485 2,696,332,558 Main Operation [Note 14.1.3.B] 151,540,051 133,611,689 Off-Shore Banking Unit 2,781,394,536 2,829,944,247

14.1.4 Cumulative balance of interest suspense account

Opening balance 3,433,730,845 2,333,278,760 Add: Amount transferred to interest suspense account during the year 6,112,659,673 7,089,387,090 Less: Amount recovered from interest suspense account during the year 4,587,249,060 5,772,621,344 Less: Amount written-off/waived during the year 117,410,971 216,313,661 Balance at the end of the year 4,841,730,487 3,433,730,845 15. Subordinated debt Subordinated debt - Taka 1,934,375,000 The Bank arranged a subordinated debt from FMO, the Netherlands for USD 25 million equivalent to Taka 1,934,375,000 for a term of six years to strengthen the Tier-2 capital as well as total capital of the Bank during December 2013 with the approval of Bangladesh Bank. The principal amount was repayable in eight (8) equal half-yearly installments with two years moratorium, last installment of which was paid in February 2020. - 265,312,500 The interest rate for the subordinated debt was six (6) month LIBOR plus 5% margin p.a. Subordinated debt - Taka 1,934,375,000 The Bank arranged a subordinated debt from DEG, Germany for USD 25 million equivalent to Taka 1,934,375,000 for a term of six years to strengthen the Tier-2 capital as well as total capital of the Bank during June 2014 with the approval of Bangladesh Bank. The principal amount was repayable in eight (8) equal half-yearly installments with two years moratorium, last installment of which was paid in February 2020. - 265,312,500

The interest rate for the subordinated debt is six (6) month LIBOR plus 5% margin p.a.

ANNUAL REPORT 2020 431 2020 2019 Taka Taka Subordinated debt - Taka 5,000,000,000 The Bank arranged a subordinated debt from six scheduled local banks for Taka 5,000,000,000 for a term of seven years to strengthen the Tier-2 capital as well as total capital of the Bank during June 2017 with the approval of Bangladesh Bank. The principal amount is repayable in five (5) equal installments with two years moratorium, last installment of which is payable on 14 June 2024. 4,000,000,000 5,000,000,000 The interest rate for the subordinated debt is approximately @ 7.97% p.a. Subordinated debt - Taka 5,000,000,000 The Bank arranged a subordinated debt from six scheduled local banks for Taka 5,000,000,000 for a term of seven years to strengthen the Tier-2 capital as well as total capital of the Bank during December 2018 with the approval of Bangladesh Bank. The principal amount is repayable in five (5) equal installments with two 5,000,000,000 5,000,000,000 years moratorium, last installment of which is payable on 26 December 2025. The interest rate for the subordinated debt is approximately @ 7.22% p.a.

Subordinated debt - Taka 5,000,000,000

The Bank arranged a subordinated debt from six scheduled local banks for Taka 5,000,000,000 for a term of seven years to strengthen the Tier-2 capital as well as total capital of the Bank during December 2020 with the approval of Bangladesh Bank. The principal amount is repayable in five (5) equal installments with two years moratorium, last installment of which is payable on 14 December 2027. 5,000,000,000 -

The interest rate for the subordinated debt is approximately @ 7.22% p.a.

Total 14,000,000,000 10,530,625,000

As per BRPD Circular No. 13 dated 14 October 2009, BRPD Circular No. 35 dated 29 December 2010 and Letter No. BRPD(BIC)661/14B(P)/2010-340 dated 22 December 2010, FEPD (external debts & grants section)/701/K-1/2013-463 dated 17 December 2013 and Letter No. BRPD(BIC)661/148(P)/2013/2560 dated 30 December 2013 issued by Bangladesh Bank, the above noted debt capital (Subordinated debt) is considered as a component of supplementary capital (Tier 2 capital) of the Bank within the regulatory limits. [Note 16.6.5].

15.1 Residual maturity grouping of subordinated debt

Repayable Within one month - - Over one month but within three months - 530,625,000 Over three months but within twelve months 2,000,000,000 1,000,000,000 Over one year but within five years 10,000,000,000 8,000,000,000 More than five years 2,000,000,000 1,000,000,000 14,000,000,000 10,530,625,000 2020 2019 Taka Taka 16. Share capital 16.1 Authorized share capital

1500,000,000 ordinary shares of Taka 10 each. 15,000,000,000 15,000,000,000

16.2 Issued, subscribed and fully paid up share capital 550,000,000 ordinary shares of Taka 10 each. (As at 31 December 2019: 500,000,000 ordinary shares of Taka 10 each).* 5,500,000,000 5,000,000,000

16.2.1 Raising of capital The paid-up share capital of the Bank was raised in the following manner: From the sponsor shareholders before IPO By issuing of 1,800,000 ordinary shares of Taka 100 each 180,000,000 180,000,000 Through Initial Public Offering (IPO) The Bank raised Taka 22,135,000 through initial public offering in the year 2001 against issuance of 221,350 ordinary shares of Taka 100 each 22,135,000 22,135,000 The premium of Taka 50 was also applied for 221,350 shares against face value of Taka 100 each [Note 17] Bonus shares Bonus shares @3.94719 against 1 existing share of Taka 100 each for the year 2007 797,865,000 797,865,000 Bonus shares @0.50 against 1 existing share of Taka 100 each for the year 2008 500,000,000 500,000,000 Bonus shares @0.333 against 1 existing share of Taka 100 each for the year 2009 500,000,000 500,000,000 Bonus shares @1.50 against 1 existing share of Taka 10 each for the year 2018 3,000,000,000 3,000,000,000 Bonus shares @ 0.10 against 1 existing share of Taka 10 each for the year 2019 * 500,000,000 - 5,500,000,000 5,000,000,000 * Note: The Board of Directors of Dutch-Bangla Bank Limited in its 223rd meeting held on March 15, 2020 declared 30% cash dividend for the year 2019. Later on May 11, 2020, Bangladesh Bank issued a circular with a dividend policy of the Banks for the year 2019. According to the policy guidelines of Bangladesh Bank, Dutch- Bangla Bank limited is permitted to disburse cash dividend to the tune of maximum 15%. As per Bangladesh Bank circular the shareholders of Dutch-Bangla Bank Limited in the 24th AGM of the Bank held on July 08, 2020 has approved 15% Cash Dividend and 10% stock dividend for the year 2019. Accordingly the paid up capital of the Bank has increased from 5,000.0 million to 5,500.0 million.

16.3 Particulars of fully paid up share capital as at 31 December are as follows

2020 2019 Categories Number of Percentage Value Value shares (%) of holding (Taka) (Taka)

Sponsors and Directors (Local and Foreign) 478,453,634 86.99% 4,784,536,340 4,349,578,500 General Public shares 71,546,366 13.01% 715,463,660 650,421,500 Total 550,000,000 100.00% 5,500,000,000 5,000,000,000

ANNUAL REPORT 2020 433 16.4 Range-wise shareholdings as at 31 December 2020 are as follows

Percentage (%) Number of Number of Range of holding of shares of holding of shareholders shares shares

Less than 500 2,738 0.07% 394,039

500 to 5,000 2,689 0.85% 4,690,404

5,001 to 10,000 409 0.52% 2,839,248

10,001 to 20,000 228 0.58% 3,200,301

20,001 to 30,000 55 0.25% 1,353,513

30,001 to 40,000 38 0.23% 1,284,611

40,001 to 50,000 15 0.12% 670,540

50,001 to 100,000 37 0.50% 2,769,109

100,001 to 1,000,000 45 2.20% 12,122,300

Over 1,000,000 31 94.67% 520,675,935

Total 6,285 100.00% 550,000,000

16.5 Name of the Directors and their shareholdings in the year 2020

Position on Position on 1 January 2020 SL. 31 December 2020 Percentage (%) of Name of the Directors Status (number of No (number of shares shareholdings shares Taka 10 Taka 10 each) each) 1 Mr. Sayem Ahmed Chairman 12,367,925 13,604,717 2.47% 2 Mr. Abedur Rashid Director Khan * (Nominee of Horizon - - - Associates Limited) 3 Ms. Tang yuen Ha, Ada Director ** (Nominee of Ecotrim Hong - - - Kong Limited) 4 Mr. Ekramul Haq, Independent Director FCA*** - - - 5 Mr. Mohammed Salim, Independent Director FCMA, CPFA*** - - - 6 Mr. Abul Kashem Ex-officio Director Md. Shirin *** (Managing Director & CEO) - -

* Horizon Associates Ltd. (Institutional Director) held 125,618,790 shares of Taka 10 each (22.84%) as on 31 December 2020 .

** Ecotrim Hong Kong Limited (sponsor shareholder) held 136,047,670 shares of Taka 10 each (24.74 %) as on 31 December 2020.

*** Independent Director and Managing Director & CEO of the Bank need not to hold any qualification share. 2020 2019 Taka Taka 16.6 Capital to risk-weighted asset ratio (CRAR) As per Section 13 of the Bank Company (Amended) Act, 2018 and instructions contained in BRPD Circular No. 18 dated 21 December 2014, [Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III)], the eligible regulatory capital of the Bank as of 31 December 2020 stood at Taka 46,083,939,013 against the risk based capital requirement of Taka 33,432,749,031. As a result, there was a capital surplus of Taka 12,651,189,982 in risk based capital adequacy ratio as on 31 December 2020.

The details of capital to risk-weighted asset ratio (CRAR) are furnished below:

Total assets (excluding off-balance sheet assets) 472,355,448,208 390,362,045,800 Total off-balance sheet assets 82,817,386,838 75,307,425,531 Total Risk weighted assets [RWA] against [Note 16.6.1] i. Credit Risk On-balance sheet [Note 16.6.1.1] 193,760,892,476 177,949,918,419 Off-balance sheet [Note 16.6.1.2] 29,729,778,034 28,597,140,719 223,490,670,510 206,547,059,138

ii. Market Risk [Note 16.6.2] 5,756,446,495 859,513,976 iii. Operational Risk [Note 16.6.3] 38,214,875,246 32,064,744,085 A) Total Risk weighted assets (RWA) [i+ii+iii] 267,461,992,251 239,471,317,199

B) Minimum Capital Requirement (MCR) with Capital Conservation Buffer (CCB) [12.5% of RWA] 33,432,749,031 29,933,914,650 C) Common Equity Tier 1 (CET1) capital Paid -up share capital 5,500,000,000 5,000,000,000 Share premium 11,067,500 11,067,500 Statutory reserve 9,193,048,174 9,193,048,174 Dividend equalization account 1,766,827,195 1,766,827,195 Retained earnings (Including OBU) 14,838,390,197 10,589,645,558 31,309,333,066 26,560,588,427 Less : Other Intangible Assets (computer software) 130,542,541 109,803,785 Less : Deferred tax asset [Note 16.6.4] 1,496,285,715 1,814,743,468 29,682,504,810 24,636,041,174 D) Additional Tier-1 Capital Non-cumulative irredeemable preference shares - - Instruments issued by the banks that meet the qualifying criteria for AT1 - - Others (if any item approved by Bangladesh Bank) - - - - Less: Regulatory Adjustments from AT-1 Capital - - - -

E) Tier 1 Capital [C+D] 29,682,504,810 24,636,041,174

ANNUAL REPORT 2020 435 2020 2019 Taka Taka F) Tier 2 Capital General provision maintained against unclassified loans and off-balance sheet exposures (including OBU) [Note 16.6.5] 4,401,434,203 3,556,800,152 Subordinated debt capital [Note 16.6.6] 12,000,000,000 9,000,000,000 Assets revaluation reserves [Note 16.6.7] - 425,206,889 Revaluation reserves of HTM securities [Note 16.6.7] - 49,965,473 16,401,434,203 13,031,972,514 Less : Revaluation Reserves for Fixed Assets and Securities - 475,172,362 16,401,434,203 12,556,800,152 G) Total Eligible Regulatory Capital (Tier 1 and 2) [C+D+F] 46,083,939,013 37,192,841,326 Total capital surplus [G - B] 12,651,189,982 7,258,926,676

Capital to risk-weighted asset ratio (CRAR): Common Equity Tier-1 to RWA (C/A)*100 11.10% 10.29% Tier-1 Capital to RWA (E/A)*100 11.10% 10.29% Tier-2 Capital to RWA (F/A)*100 6.13% 5.24% Capital to risk-weighted asset ratio (CRAR) (G/A)*100 17.23% 15.53%

16.6.1 Calculation of risk weighted assets (RWA) 16.6.1.1 Credit Risk-On balance sheet assets SL Outstanding Risk weighted assets No. balance as of Risk weights as of Particulars 31-Dec-2020 (%) 31-Dec-2020 31-Dec-2019 Taka Taka Taka i. Cash 17,030,120,126 0% - - ii. Claims on Bangladesh Government and Bangladesh Bank 131,953,787,925 0% - - iii. Claims on other Sovereigns & Central Banks - 0% - - iv. Claims on Bank for International Settlements, International Monetary Fund and European Central Bank - 0% - - v. Claims on Multilateral Development Banks (MDBs) - 0%-150% - - vi. Claims on Public Sector Entities (other than Government) in Bangladesh 1,500,000,000 20%-150% 300,000,000 300,000,000 vii. Claims on Banks and NBFIs Original maturity over 3 months 15,494,627,191 20%-100% 7,706,909,737 8,622,584,367 Original maturity less than 3 months 14,066,269,318 20% 2,813,253,864 2,254,238,900 viii. Claims on Corporate 166,959,832,990 20%-125% 93,558,787,380 80,119,563,538 ix. Claims on SME 28,311,273,832 20%-100% 26,514,530,502 23,915,192,360 x. Claims under Credit Risk Mitigation 13,707,156,276 20%-125% 6,273,216,964 7,528,647,439 xi. Claims categorized as retail portfolio (excluding consumer loan) 185,076,150 75% 138,807,112 108,608,589 xii. Consumer loan 15,640,652,067 100% 15,640,652,067 14,302,698,837 xiii. Claims fully secured by residential property 10,674,274,736 50% 5,337,137,368 4,416,926,510 xiv. Claims fully secured by commercial real estate 8,819,305,874 100% 8,819,305,874 5,310,133,223 xv. Past due claims (net off specific provision) 7,945,693,644 50%-150% 10,722,638,378 21,126,966,151 xvi. Capital Market Exposures 467,463,265 125% 584,329,081 560,965,864 xvii. Unlisted equity investments and regulatory capital instruments issued by other banks (other than those deducted from capital) held in the banking book 4,371,283,434 125% 5,464,104,293 1,764,097,213 2020 2019 Taka Taka

xviii. Investments in venture capital - 100% - - xix Investments in premises, plant and 7,882,842,294 100% 7,882,842,294 5,380,606,143 equipment and all other fixed assets xx Claims on all fixed assets under operating - 100% - - lease xxi All other assets 24,378,167,834 0%-100% 2,004,377,564 2,238,689,285 Total 469,387,826,954 193,760,892,476 177,949,918,419

16.6.1.2 Credit Risk-off- balance sheet assets Risk weighted assets Notional Amount Credit SL [Netting off Margin conversion Credit Risk As of As of No. Particulars and add-on factor factor equivalent weights 31 December 31 December for exchange rate (CCF) (%) 2020 2019 fluctuation](Taka) (Taka) (Taka) i. Direct Credit Substitutes 36,555,444,649 100% 36,555,444,649 ii. Lending of Securities or posting of securities as - 100% - collateral iii. Other commitments with certain drawdown - 100% - iv. Performance related contingencies 27,953,978,778 50% 13,976,989,389 v. Commitments with original maturity of over one year - 50% - 20%-125% 29,729,778,034 28,597,140,719 vi. Trade related contingencies 11,475,461,647 20% 2,295,092,329 vii. Commitments with original maturity of one year or less - 20% - viii. Other commitments that can be unconditionally 2,569,610,395 0% - cancelled by any time ix. Foreign exchange contract - 0% - Total 78,554,495,468 52,827,526,367 29,729,778,034 28,597,140,719

16.6.2 Risk weighted assets against Market Risk SL Risk weighted assets No. Capital charge Particulars As of As of (Taka) 31 Dec 2020 31 Dec 2019 (Taka) (Taka) i. Capital charge for Interest rate risk 538,824,563 5,388,245,631 428,025,355

ii. Capital charge for Equities 1,133 11,328 11,328

iii. Capital charge for Foreign Exchange position 36,818,954 368,189,536 431,477,293

iv. Capital charge for Commodities - - -

Total 575,644,649 5,756,446,495 859,513,976

ANNUAL REPORT 2020 437 16.6.3 Risk weighted assets against Operational Risk 2020 2019 Taka Taka

Gross income Amount (Taka) Amount (Taka) Year 1 [2019] 30,379,705,985 - Year 2 [2018] 24,956,656,404 24,956,656,404 Year 3 [2017] 21,093,388,103 21,093,388,103 Year 4 [2016] - 18,079,443,662 Total gross income 76,429,750,492 64,129,488,169 Average gross income 25,476,583,497 21,376,496,056 Capital charge @ 15% of average gross income 3,821,487,525 3,206,474,408 Risk weighted assets 38,214,875,246 32,064,744,085 16.6.4 In terms of instruction contained in BRPD Circular No. 11 dated 12 December 2011, deferred tax asset for Taka 1,575,037,595 on specific provision for loans and advances has been created. As per BRPD Letter No. BRPD(BFIS)661/14B(P)/2015-18014 dated 24 December 2015, 5% of deferred tax asset on specific provision for loans and advances has been recognized in Common Equity Tier 1 (CET1) Capital. Excess over 5% of Deferred Tax Asset created on specific provision amounting to Taka 1,496,285,715 [Taka 1,575,037,595 - Taka 78,751,880] has been deducted. 16.6.5 In compliance with the BRPD Circular Letter No. 5 dated 31 May 2016, General Provision maintained against unclassified loans & off-balance sheet exposures and in compliance with the BRPD Circular Letter No. 56 dated 10 December 2020, Special General Provision for Covid 19 against unclassified loans totaling to Taka 4,401,434,203 has been fully considered as Tier 2 capital as at 31 December 2020. 16.6.6 As per Bangladesh Bank’s instructions contained in BRPD Circular No. 18 dated 21 December 2014, [Guidelines on Risk Based Capital Adequacy (Revised Regulatory Capital Framework for banks in line with Basel III)], eligible amount of Subordinated Debt is considered as a component of Tier 2 capital. 16.6.7 As per Bangladesh Bank’s instruction, until 31 December 2014, 50% revaluation reserves for Fixed Assets and HTM securities are eligible for Tier 2 capital. As per Basel III guideline, Revaluation Reserve (RR) for Fixed Assets and HTM securities based on the position as of 31 December 2014 should be deducted @ 20% on yearly basis from 2015 to 2019.

In terms of Bangladesh Bank’s instruction, 50% of revaluation reserves for fixed asset (Taka 425,206,889) and HTM securities (Taka 49,965,473) as of 31 December 2014 amounting to total Taka 475,172,362 has been considered as base for component of Tier 2 capital. Against that, full amount of Taka 475,172,362 (i.e. equivalent to 100% of Taka 475,172,362) has been deducted from Tier 2 capital as of 31 December 2019 under Basel III guideline.

17. Share premium Taka 5 per share on 2,213,500 ordinary shares of Taka 10 each at the time of issuing shares through initial public offering in the year 2001 * 11,067,500 11,067,500 * In compliance with Bangladesh Securities and Exchange Commission (BSEC) Order No. SEC /CMRRCD/2009-193/109 dated 15 September 2011 and with the approval of shareholders in the 3rd Extra-ordinary General Meeting (EGM) held on 13 November 2011, the denomination of shares (face value) has been changed from Taka 100 each to Taka 10 each with effect from 4 December 2011 and accordingly the number of shares and premium have been restated. 2020 2019 Taka Taka 18. Statutory reserve As per Section 24 (1) of the Bank Companies Act, 1991, every banking company shall create a statutory reserve and if the amount of such fund together with the amount in the share premium is less than its paid up capital, it shall transfer at an amount not less than 20% of profit before taxes to statutory reserve fund. Dutch Bangla Bank has already maintained the required fund for statutory reserve and have excess balance compared to the required reserve. Hence, any transfer to statutory reserve is not made in current year. Balance at 1 January 9,193,048,174 9,193,048,174 Add: Transferred from profit during the year - - Closing balance 9,193,048,174 9,193,048,174 19. Other reserve Revaluation reserve of HFT securities [Note 19.1] - - - - 19.1 Other reserve In terms of First Schedule (Section 38) of the Bank Companies Act, 1991, and instructions contained in BRPD Circular No. 5 dated 26 May 2008 and Letter No. DOS (SR)1153/120-A/2011-746 dated 29 December 2011 the revaluation reserve for HFT securities has been made as under:

Balance at 1 January - - Add: Reserve made for the year - - Less: Adjustment during the year - - Closing balance - -

20. Dividend equalization account As per BRPD Circular Letter No. 18 dated 20 October 2002 issued by Bangladesh Bank, ‘Dividend Equalization Account’ has been created by transferring the amount from the profit that is equal to the cash dividend paid in excess of 20%.

Balance at 1 January 1,766,827,195 1,766,827,195 Add: Transferred for previous year’s dividend paid - - Closing balance 1,766,827,195 1,766,827,195 21. Assets revaluation reserve In terms of International Accounting Standard (IAS) 16, ‘Property, Plant and Equipment’, and instructions contained in BRPD Circular No. 10 dated 25 November 2002 issued by Bangladesh Bank, all the immovable properties of the Bank has been revalued by a professionally qualified valuation firm of the country. The rationale of the valuation has also been certified by the Bank’s external auditors, M/s. A. Qasem & Co., Chartered Accountants. Accordingly, revaluation surplus of Taka 850,413,777 has been included in equity. Balance at 1 January 850,413,777 850,413,777 Add : Addition during the year (net) - - Closing balance 850,413,777 850,413,777

22. Revaluation reserve of HTM securities [Note 2.7.3(b)]

Balance at 1 January 32,340,447 16,355,788 Add: Reserve made for the year 64,565,384 15,984,659 Closing balance 96,905,831 32,340,447

ANNUAL REPORT 2020 439 2020 2019 Taka Taka 23. Retained Earnings - Consolidated Main Operation [Note 23.1] 13,951,517,082 9,917,833,590 Off-shore Banking Unit 886,873,115 671,811,968 14,838,390,197 10,589,645,558 23.1 Retained Earnings-Main Operation Balance at 1 January 9,917,833,590 8,808,768,845 Dividend paid for previous year’s (750,000,000) - Transfer to dividend equalization fund for previous year’s dividend paid - - Transfer to paid up share capital for previous year’s bonus share (500,000,000) (3,000,000,000) Retained surplus for the current year 5,283,683,492 4,109,064,745 Closing balance 13,951,517,082 9,917,833,590

23.2 Calculation of Earnings Per Share (EPS) - Consolidated The earnings per share of the Bank has been calculated in accordance with the International Accounting Standard (IAS) 33, ‘Earnings Per Share’ under Basic Earning Per Share method as follows: Basic earnings (net profit after tax) [numerator] 5,498,744,639 4,341,387,760 Number of ordinary shares outstanding [denominator]* 550,000,000 550,000,000 Earnings Per Share 10.00 7.89

23.3 Calculation of Net Asset Value (NAV) Per Share - Consolidated Total Shareholders Equity [numerator] 32,256,652,674 27,443,342,651 Number of ordinary shares outstanding [denominator]* 550,000,000 550,000,000 Net Asset Value (NAV) Per Share 58.65 49.90

23.4 Net Operating Cash Flow Per Share (NOCFPS) Net cash from operating activities [numerator] [Note 47.1] 17,170,044,633 6,425,827,698 Number of ordinary shares outstanding [denominator]* 550,000,000 550,000,000 Net operating cash flow per share (NOCFS) 31.22 11.68 * As per requirement of IAS 33 - “Earning Per Share (EPS)”, previous year’s EPS was restated for the increase of number of ordinary shares outstanding through issue of bonus share during the year 2020. [Note 16.2.1] 24. Contingent liabilities Main Operation [Note 24.1] 82,817,386,838 75,306,035,754 Off-shore Banking Unit - 1,389,777 82,817,386,838 75,307,425,531 24.1 Contingent liabilities - Main Operation a) Acceptances and endorsements 39,572,273,905 38,508,239,854 b) Letters of guarantee Local 5,574,426,694 6,173,623,994 Foreign 80,126,829 97,635,417 5,654,553,523 6,271,259,411 c) Irrevocable letters of credit Local Cash 230,853,641 541,066,936 Usance 51,044,380 53,904,866 Back to back 7,924,494,652 5,432,163,488 8,206,392,673 6,027,135,290 2020 2019 Taka Taka Foreign Cash 15,352,900,170 11,825,570,223 Usance 8,457,139,731 6,561,459,987 Back to back 3,004,475,404 2,660,700,914 26,814,515,305 21,047,731,124 35,020,907,978 27,074,866,414 d) Bills for collection Inward - - Outward - - - - e) Other contingent liabilities Travelers’ cheques - - Export Development Fund - - Bangladesh Shanchaya Patra 2,566,580,000 2,621,835,000 Others 3,071,432 829,835,075 2,569,651,432 3,451,670,075 Total (a+b+c+d+e) 82,817,386,838 75,306,035,754

24.2 Letters of guarantee Money for which the Bank is contingently liable in respect of guarantee issued favoring: Directors - - Government 64,157,644 71,154,907 Bank and other financial institutions 49,409,172 54,797,913 Others 5,540,986,708 6,145,306,591 5,654,553,523 6,271,259,411 24.3 Irrevocable letters of credit and other commitments

Documentary credit and short-term trade-related transactions 35,020,907,978 27,074,866,414 35,020,907,978 27,074,866,414

Forward Assets purchased and forward deposits placed - - - - Undrawn formal standby facilities, credit facilities and other commitments Less than one year - - One year and above - -

Spot and forward foreign exchange rate contract - - - - Other exchange contract - - - - 35,020,907,978 27,074,866,414

24.4 (A) Calculation of General provision required against Off-balance sheet exposures

Total Off-balance sheet items [Note 24] 82,817,386,838 75,307,425,531 Less: Bangladesh Shanchaya Patra [Note 24.1] 2,566,580,000 2,621,835,000 Base figure of General provision required against Off-balance sheet exposures 80,250,806,838 72,685,590,531 Provision required [ 1% of Base figure] 802,508,068 726,855,905

ANNUAL REPORT 2020 441 Taka Taka 2020 2019 (B) General provision required against Off-balance sheet exposures [Note 24.4] 802,508,068 726,855,905 General provision maintaineded against Off-balance sheet exposures [Note 14.1.3.B] 802,508,068 726,855,905 Surplus/(Deficit) - -

25. Particulars of profit and loss account Income Note Interest, discount and other similar income 26 22,194,983,159 25,543,861,602 Dividend income 28 5,711,803 5,711,803 Fees, commission and brokerage 29.1 792,670,438 752,433,229 Gains less losses arising from dealing securities - - Gains less losses arising from investment securities 28 7,138,159,774 3,406,514,182 Gains less losses arising from dealing in foreign currencies 29.2 933,001,014 1,176,520,097 Income from non-banking assets - - Other operating income 30 3,615,083,897 3,820,779,393 Profit less losses on interest rate changes - - 34,679,610,085 34,705,820,306 Expenses Interest, fee and commission 27 8,065,280,264 7,759,845,166 Directors’ fees 39 228,000 265,000 Administrative expenses 31 9,224,034,313 8,793,343,629 Other operating expenses 42 5,429,948,523 5,538,908,673 Depreciation on banking assets 41 1,458,803,230 1,353,442,262 24,178,294,330 23,445,804,730 Profit before provision 10,501,315,755 11,260,015,576

26. Interest income

Interest income - Main Operation [Note 26.1] 21,714,066,619 24,943,726,342 Interest income - Off-Shore Banking Unit 595,455,408 816,857,998 Less: Inter Bank transactions [Note 27] (114,538,868) (216,722,738) 22,194,983,159 25,543,861,602 26.1 Interest income - Main Operation Interest on loans and advances House building loan 416,050,387 329,652,101 Transport loan 191,484,717 226,228,529 Term loan - industrial 7,375,071,770 7,424,608,117 Term loan - others 1,663,182,871 2,203,641,179 Secured overdraft 1,994,647,199 2,378,116,482 Cash credit 2,405,605,172 3,151,882,452 Payment against document - cash 5,710,789 7,346,536 Payment against document EDF- others 154,527,648 157,169,013 Loan against trust receipts 212,739,353 320,506,902 Export cash credit 97,649,062 138,023,311 Loan against accepted bills 335,638,263 800,067,078 Staff loan 30,557,100 32,242,919 SME and consumer financing 5,815,274,977 6,208,973,403 20,698,139,308 23,378,458,022 Taka Taka 2020 2019 Interest on balance with other banks and financial institutions Fixed deposits 624,005,576 983,933,014 Special notice deposits 7,288,947 13,504,405 Nostro accounts 2,160,732 14,152,764 Money at call on short notice 382,472,056 553,678,137 1,015,927,311 1,565,268,320 21,714,066,619 24,943,726,342 27. Interest paid on deposits and borrowings etc.

Main Operation [Note 27.1] 7,813,823,212 7,383,795,016 Off-shore Banking Unit 365,995,920 592,772,888 Less: Inter Bank transactions [Note 26] (114,538,868) (216,722,738) 8,065,280,264 7,759,845,166

27.1 Interest paid on deposits- Main Operation [Note 27.2] 5,705,453,419 5,877,758,898 Interest paid on borrowings- Main Operation [Note 27.3] 2,108,369,793 1,506,036,118 7,813,823,212 7,383,795,016 27.2 Interest paid on deposits- Main Operation

Savings deposits 1,790,356,475 2,099,048,665 Special notice deposits 851,372,609 801,148,223 Fixed deposits 3,040,809,966 2,957,933,439 Non-resident foreign currency deposits 21,978,746 17,478,899 Resident foreign currency deposits 458,872 1,613,096 Monthly term deposits 476,751 536,576 5,705,453,419 5,877,758,898 27.3 Interest paid on borrowings- Main Operation

Interest on borrowing - call loan and term loan 4,025,006 5,963,774 Interest on credit lines 31,659,727 - Interest paid on subordinated debt 880,981,202 1,009,503,883 Interest on borrowing under REPO and Re-financing facilities with Bangladesh Bank 1,191,703,858 490,568,461 Interest on borrowing under REPO with other banks - - 2,108,369,793 1,506,036,118 28. Investment income Dividend on shares 5,711,803 5,711,803

Interest on treasury bills, bonds and debentures Interest on treasury bills and bonds (net) 5,846,239,298 3,238,779,370 Capital gain on sales of government securities 902,712,473 28,590,840 Interest on reverse REPO with other banks 89,809,647 13,976,025 Interest on subordinated bonds 299,398,356 125,167,947 7,138,159,774 3,406,514,182

Gain on sale of shares - - 7,143,871,577 3,412,225,985

ANNUAL REPORT 2020 443 2020 2019 Taka Taka 29. Commission, exchange and brokerage Commission [Note 29.1] 792,670,438 752,433,229 Exchange earnings (net) [Note 29.2] 933,001,014 1,176,520,097 1,725,671,452 1,928,953,326

29.1 Commission Commission on Remittances-Local 12,311,345 15,338,234 Commission on Remittances-Foreign 18,807,581 18,743,848 Commission on Letter of Credit-Import 249,792,010 261,693,185 Commission on Letter of Credit-Export 447,051,963 383,867,699 Commission on Export Bills 7,732,621 10,011,626 Commission on Letter of Guarantee 55,979,301 60,733,792 Commission on Sale of Government Saving Instruments 539,867 2,015,542 Commission on Banker to the issue & underwriting 443,000 83 Other Commission 12,750 29,220 792,670,438 752,433,229 29.2 Exchange earnings (net)

From General activities and Treasury dealings 933,001,014 1,176,520,097 933,001,014 1,176,520,097

30. Other operating income

Main Operation [Note 30.1] 3,605,391,670 3,808,698,481 Off-shore Banking Unit 9,692,227 12,080,912 3,615,083,897 3,820,779,393

30.1 Other operating income - Main Operation Charges for service 89,224,791 86,183,264 Income from card, ATM and other services 2,547,417,277 2,411,674,614 Recoveries from client 142,028,987 157,473,199 Service charges on deposit accounts 358,117,751 424,825,853 Income from Export-Import 138,629,079 145,359,677 Examination and appraisal fees - - Document handling charges-Export 3,550,407 349,898 Locker Rent 9,227,740 11,755,965 Gain on sale of fixed assets [Note 30.2] 18,271,785 17,742,362 Other earning 298,923,853 553,333,649 3,605,391,670 3,808,698,481 30.2 Gain on sale of fixed assets (net) Some impaired items of fixed assets were sold during the year as under: Gain on sale of fixed assets 18,271,785 17,742,362 Less: Loss on sale of fixed assets - - Gain on sale of fixed assets (net) [Note 30.3] 18,271,785 17,742,362 30.3 Calculation of income from sale of fixed assets Sale proceeds [A] 36,519,042 34,115,660 Cost price of the sold items 152,415,793 151,306,191 Less: Accumulated depreciation 134,168,536 134,932,893 Written down value [B] 18,247,257 16,373,298 Net gain [A - B] 18,271,785 17,742,362 2020 2019 Taka Taka 31. Administrative expenses Notes Salary and allowances 32 5,219,592,498 4,808,522,669 Rent, taxes, insurance, electricity, etc. 34 2,326,134,531 2,181,287,658 Legal expenses 35 2,359,569 2,130,439 Postage, stamp, telecommunications, etc. 36 377,009,483 347,951,521 Stationery, printings, advertisements etc. 37 404,615,350 618,152,444 Managing Director & CEO’s salary and allowances 38 14,670,000 10,750,000 Auditors’ fees 40 609,500 834,250 Repair and maintenance 41.2 879,043,382 823,714,648 9,224,034,313 8,793,343,629 32. Salary and allowances Main Operation [Note 32.1] 5,217,461,698 4,803,740,212 Off-shore Banking Unit 2,130,800 4,782,457 5,219,592,498 4,808,522,669 32.1 Salary and allowances Basic salary 2,197,534,434 1,963,851,469 House rent allowance 1,103,201,291 984,985,474 Conveyance allowance 231,028,766 199,910,101 Other allowances 547,364,869 222,077,567 Bank’s contribution to provident fund 193,693,639 182,417,069 Medical expenses 237,131,295 207,781,132 Bonus 367,507,404 562,217,400 Gratuity 282,500,000 433,000,000 Superannuation 57,500,000 47,500,000 5,217,461,698 4,803,740,212 33. Number of employees and remuneration thereof

As per the Schedule XI of the Companies Act, 1994, the number of employees (including contractual employees) engaged for the whole year or part thereof who received a total remuneration of Taka 36,000 per annum or Taka 3,000 per month were 10,022 as at 31 December 2020 compared to 9,988 as at 31 December 2019.

34. Rent, taxes, insurance, electricity, etc. Rent Office premises 942,005,354 871,657,081 ATM Booths and other installations 592,970,231 524,228,771 1,534,975,585 1,395,885,852 Rates and taxes Rates 1,629,690 1,822,519 Taxes 22,264,951 7,633,761 23,894,641 9,456,280 Insurance Cash 49,431,753 40,513,678 Vehicles 3,775,021 4,046,991 Deposits 198,724,507 166,490,699 Staff 10,500,000 - Other properties 12,459,307 12,730,003 274,890,588 223,781,371 Electricity and sanitation Light and power 479,833,333 538,382,017 Water and sewerage 12,540,384 13,782,138 492,373,717 552,164,155 2,326,134,531 2,181,287,658

ANNUAL REPORT 2020 445 2020 2019 Taka Taka 35. Legal expenses Legal expenses 2,359,569 2,130,439 2,359,569 2,130,439 36. Postage, stamp, telecommunications, etc. Main Operation [Note 36.1] 377,006,559 347,921,988 Off-shore Banking Unit 2,924 29,533 377,009,483 347,951,521 36.1 Postage, stamp, telecommunications, etc.-Main Operation Postage 24,668,025 24,205,490 Telephone 12,386,906 15,447,465 Radio link 319,442,817 288,563,284 Swift, Reuters, internet, etc. 20,508,811 19,705,749 377,006,559 347,921,988 37. Stationery, printings, advertisements etc. Printing and stationery: Printed stationery 59,545,643 63,177,074 Security stationery 34,591,779 42,054,506 Petty stationery 54,445,559 74,220,197 148,582,981 179,451,777 Publicity and advertisement 256,032,369 438,700,667 404,615,350 618,152,444 38. Managing Director & CEO’s salary and allowances Basic salary 9,700,000 6,900,000 House rent allowance 960,000 560,000 House maintenance 480,000 380,000 Bank’s contribution to provident fund 970,000 690,000 Leave fare assistance 600,000 400,000 Other allowances 360,000 260,000 Bonus 1,600,000 1,560,000 14,670,000 10,750,000

39. Directors’ fees

Honorarium for attending meeting 228,000 265,000 Incidental expenses for attending meeting - - 228,000 265,000 40. Auditors’ fees Statutory annual audit fees 517,500 585,000 Special audit fees 92,000 249,250 Fees for various certification - - 609,500 834,250 41. Depreciation and repair of bank’s assets

Depreciation on fixed assets including building, furniture and fixtures Main Operation [Note 41.1] 1,458,803,230 1,353,442,262 Off-shore Banking Unit - - 1,458,803,230 1,353,442,262 2020 2019 Taka Taka Repair and maintenance Main Operation [Note 42.1] 878,981,307 823,566,908 Off-shore Banking Unit 62,075 147,740 879,043,382 823,714,648 2,337,846,612 2,177,156,910

41.1 Depreciation on fixed assets including land, building, furniture and fixtures

Land - - Building (including lease hold property) 9,988,600 9,988,599 Interior decoration 90,940,258 96,246,744 Furniture and fixtures 29,613,450 27,206,364 Other machinery and equipment 264,961,780 241,368,968 Computer equipment 583,855,161 553,672,626 Computer software 48,186,366 34,478,710 Motor vehicles 77,515,627 71,575,793 ATM Booth 100,531,399 98,402,960 ATM/Fast Track (Machinery) 169,978,492 220,483,671 Right of use of asset - IFRS 16: lease 83,214,293 - Books 17,804 17,827 1,458,803,230 1,353,442,262 41.2 Repair and maintenance Premises 203,429,371 217,266,936 Vehicles 42,006,546 53,877,299 Computers 633,545,390 552,422,673 878,981,307 823,566,908

42. Other expenses

Main Operation [Note 42.1] 5,425,982,116 5,537,943,330 Off-shore Banking Unit 3,966,407 965,343 5,429,948,523 5,538,908,673 42.1 Other expenses- Main Operation Entertainment expenses 26,571,690 53,851,355 Fuel and lubricant 46,732,143 54,890,860 Subscription and donations 593,414,903 160,578,633 Annual general meeting 414,050 1,461,078 Casual wages & allowances 1,089,147,852 1,161,275,831 Travelling expenses and allowances 510,865,345 440,645,027 Petty conveyance 27,104,189 40,030,042 Credit rating fees 5,666,319 5,446,481 News papers, periodicals, learning materials etc. 1,121,116 2,038,047 Crockeries 228,523 524,237 Debit and Credit Card expenses 662,364,645 504,904,700 ATM expenses - 790,612 Tele Banking Expenses 88,702,885 72,851,170 Cash carrying charges 35,798,707 39,431,852 ATM cash replenishment charges 574,900,000 660,000,000 Recruitment, training, seminar and workshop 9,607,620 29,326,388

ANNUAL REPORT 2020 447 2020 2019 Taka Taka

Service charge on nostro account and others 27,948,339 33,751,773 Consultancy fees 23,139,548 20,095,748 Business promotion and development 364,907,638 854,206,976 Other operatng expenses 101,510,434 586,208,625 Finance cost for right of use of asset - IFRF 16 lease 18,149,797 - Laundry and cleaning 180,903 359,008 Other expenses for Mobile Banking Services 221,158,175 108,455,765 Other expenses for Agent Banking Services 978,771,205 566,180,514 Miscellaneous 17,576,090 140,638,608 5,425,982,116 5,537,943,330

43. Receipts from other operating activities - Main Operation

Other operating income [Note 30.1] 3,605,391,670 3,808,698,481 Less: Income from sale of fixed assets (net) 18,271,785 17,742,362 3,587,119,885 3,790,956,119 Exchange earnings (net) [Note 29.2] 933,001,014 1,176,520,097 4,520,120,899 4,967,476,216

44. Payments for other operating activities - Main Operation

Expenses for the year 6,230,140,941 6,772,903,965 Add: Opening accrued expenses 690,360,033 308,305,009 Add: Closing advance expenses 688,429,194 1,331,417,556 Less: Closing accrued expenses 1,350,862,285 690,360,033 Less: Opening advance expenses 1,331,417,556 659,279,804 4,926,650,327 7,062,986,693

45. Increase/(decrease) of other assets Closing other assets Security deposits 21,676,180 21,377,839 Suspense account 3,673,847 3,408,075 Branch adjustment (net) - - Encashment of Sanchaya Patra (awaiting realization) 978,050,019 726,256,923 Sundry debtors 61,073,485 75,924,088 Cash remittance 91,558,511 119,617,164 Others 3,398,606,874 2,143,391,994 4,554,638,916 3,089,976,083 Opening other assets Security deposits 21,377,839 22,322,210 Suspense account 3,408,075 7,143,799 Branch adjustment (net) - 14,643,233 Encashment of Sanchaya Patra (awaiting realization) 726,256,923 489,118,917 Sundry debtors 75,924,088 64,614,397 Cash remittance 119,617,164 89,815,759 Others 2,143,391,994 2,137,283,868 3,089,976,083 2,824,942,183 1,464,662,833 265,033,900 2020 2019 Taka Taka 46. Increase/(decrease) of other liabilities - Main Operation

Closing other liabilities

Branch adjustment (net) 331,072,646 141,355,153 Cumulative balance of interest suspense account 4,841,730,487 3,433,730,845 Revaluation reserve for HTM securities 96,905,831 32,340,447 Revaluation reserve for HFT securities - - Liability for lease hold property 2,143,362,295 - Others 957,370,237 219,770,786 8,370,441,496 3,827,197,231 Opening other liabilities

Cumulative balance of interest suspense account 3,433,730,845 2,333,278,760 Revaluation reserve for HTM securities 32,340,447 16,355,788 Revaluation reserve for HFT securities - - Others 219,770,786 243,096,776 3,827,197,231 2,592,731,324 4,543,244,265 1,234,465,907

47.1 Reconciliation between Operating profit of the Bank and Cash flows from operating activities

Profit before provision 10,501,315,755 11,260,015,576 Depreciation on fixed assets 1,458,803,230 1,353,442,262 Gain/loss on sale of fixed assets (18,271,785) (17,742,362) Charges on loan losses - - Adjustment of provision for loans and advances 138,671,837 28,378,993 Increase of interest receivable (3,948,869,616) (1,204,735,722) Increase of interest payable (34,527,889) (121,461,079) Increase of accrued expenses 517,400,494 512,534,183 Increase of advance expenses 408,513,343 (840,704,592) Advance tax paid (4,164,359,285) (2,841,156,137) Operating profit before changes in operating assets and liabilities 4,858,676,085 8,128,571,122

Increase/(decrease) in operating assets and liabilities

Statutory deposits - - Purchase /sale of trading securities (47,299,253,951) (7,053,127,281) Loans and advances to other banks - - Loans and advances to customers (14,762,190,992) (27,308,465,889) Other assets (1,464,127,359) (237,836,010) Deposits from other banks (81,645,298) 79,422,389 Deposits from customers 60,501,567,429 39,595,840,814 Other liabilities account of customers 10,873,774,455 (8,013,043,354) Other liabilities 4,543,244,265 1,234,465,907 Net cash from operating activities 17,170,044,634 6,425,827,698

ANNUAL REPORT 2020 449 2020 2019 Taka Taka

47.2 Net operating cash flow per share (NOCFS) [Note 23.4] 31.22 11.68

47.3 Net operating cash flow per share (NOCFS) increase/(decrease) mainly due to

Increase/(decrease) in operating cash flow

Difference from previous year Interest receivable (2,744,133,894) (3,948,869,616) (1,204,735,722) Advance tax paid (1,323,203,148) (4,164,359,285) (2,841,156,137) Purchase /sale of trading securities (40,246,126,670) (47,299,253,951) (7,053,127,281) Loans and advances to customers 12,546,274,898 (14,762,190,992) (27,308,465,889) Deposits from customers 20,905,726,615 60,501,567,429 39,595,840,814 Other liabilities account of customers 18,886,817,809 10,873,774,455 (8,013,043,354) Total 8,025,355,609 1,200,668,040 (6,824,687,569)

48. Cash and cash-equivalents

Main Operation [Note 48.1] 61,295,650,833 55,326,374,530 Off-shore Banking Unit 18,748,111 225,327,667 61,314,398,944 55,551,702,197

48.1 Cash and cash-equivalents-Main Operation

Cash in hand (including foreign currencies) 17,030,120,126 16,437,855,873 Balance with Bangladesh Bank and its agent 23,858,695,319 25,555,947,901 bank (including foreign currencies) Balance with other banks and financial institutions 20,398,206,988 13,324,539,256 Prize bonds 8,628,400 8,031,500 Money at call on short notice - - 61,295,650,833 55,326,374,530 49. Disclosure on audit committee of the Board

The Audit Committee of the Board was first duly constituted by the Board of Directors of the Bank in accordance with the BRPD Circular Number 12 dated December 23, 2002 of Bangladesh Bank. Subsequently, the Committee was reconstituted at several times due to change of Members of the Committee and to comply with the rules and regulations of Bangladesh Bank and Bangladesh Securities and Exchange Commission. Accordingly, last 15 March 2020, the Audit Committee was reconstituted in 223rd meeting of the Board of Directors in compliance with the BRPD Circular No. 11 dated 27 October 2013 as under :

Sl. Status with Name Status with the Bank Educational qualification No. the committee

i) Mr. Ekramul Haq, FCA Independent Director Chairman B. Com., FCA

Director ii) Ms. Tang Yuen Ha, Ada (Nominee of Ecotrim Hong Member University Graduate Kong Limited) M. Com. (University of Dhaka), MBA (University of Hull, UK), Diploma in Management iii) Mr. Mohammed Salim, FCMA, CPFA Independent Director Member Studies (University of Hull, UK), FCMA and CPFA (Chartered Institute of Public Finance, UK)

The Audit Committee of the Board conducted eleven (11) meetings in 2020, among others, the following salient issues were discussed: a) The Committee reviewed the inspection reports of different branches of the Bank conducted and submitted by the Bank’s Internal Control & Compliance Division and gave necessary instructions to the management for proper and prompt rectification / solution of the irregularities / objections stated therein.

b) The Committee reviewed the annual financial statements for the year 2019 including the annual report and gave necessary instructions.

c) The Committee reviewed the compliance report of the Management Letter / Report for the year 2019 submitted by the external auditors of the Bank.

d) The Committee reviewed the financial statements for the first quarter (Q1) ended on 31 March 2020, half yearly (Q2) ended on 30 June 2020 and the third quarter (Q3) ended on 30 September 2020 and gave necessary advices.

e) The Committee approved the Internal Control and Compliance Health Score as evaluated/prepared by IC & CD for eventual preparation of Annual integerated Health Report’ of Dutch-Bangla Bank Limited for the year 2019.

f) The Committee reviewed the performance of Internal Control & Compliance Division (IC & CD) for the year 2019.

g) The Committee reviewed & approved the audit and inspection plan of IC & CD for the year 2020.

ANNUAL REPORT 2020 451 50. Disclosures on related party / (ies)

50.1 Name of the Directors and the entities in which they have interest as at 31 December 2020

Name of the firms/ companies Percentage (%) of Sl. Status with in which interested as proprietor, part- Name of the Directors holding / interest in Remarks No. the Bank ner, director, managing agent, guarantor, the concern employee, etc. i) Mr. Sayem Ahmed Chairman Director of

i) Kader Compact Spinning Limited 45%

ii) MSA Textiles Limited 9.62%

iii) AA Yarn Mills Limited 4.23%

Deputy Managing Director of

i) Kader Synthetic Fibres Limited -

ii) MSA Spinning Limited 1.41%

iii) AA Synthetic Fibres Limited -

iv) AA Power Generation Co. Limited - ii) Mr. Abedur Rashid Khan Nominee i) Avanti International 100% Nominee Director of Horizon Associates Limited

- Proprietor

ii) Nextgen Trading Limited 16.67%

- Chairman iii) Ms. Tang Yuen Ha, Ada Nominee Etasia (BD) Limited 5.34% Nominee Director - Managing Director of Ecotrim Hong Kong Limited iv) Mr. Ekramul Haq, FCA Independent Chartered Accountants 35% Director Partner, Rahman Mustafiz Haq & Co v) Mr. Mohammed Salim, Independent Central Procurement Technical Unit - FCMA, CPFA Director (CPTU), IMED, Ministry of Plan- ning, Government of Bangladesh. - Senior Financial Management Consultant vi) Mr. Abul Kashem Md. Shirin Ex.-officio Dutch-Bangla Bank Limited - Director - Managing Director & CEO 50.2 Significant contracts in which the Bank, its subsidiary or any fellow subsidiary company was a party and wherein the Directors have interest subsisted at any time during the year or at the end of the year:

As approved by Bangladesh Bank, Ref no: BRPD (P-3)/745(25)2019-4143, dated 10 June 2019, the Bank has entered into an agreement to rent 162,329 sft. of floor space for its head office, located at 47, Motijheel Commercial Area, Dhaka-1000, from Mrs. Amina Ahmed, mother of Mr. Sayem Ahmed, a Sponsor Director & Chairman of the board of directors of the Bank. The agreement has been effective from October 01, 2019 for 10 years. Out of 162,329 sft useable , monthly rent @ Taka 130 per sft is payable on 151,014 sft plus monthly car parking rent of Taka 185,000 for 37 car parking space, totaling monthly rent of Taka 19,816,820. An advance of Taka 471,163,680 has been made against the agreement that will be adjusted @ 50% of rent payable on a monthly basis. 50.3 Shares issued to Directors and Executives to acquire shares at ‘Nil’ consideration or restricted shares plan exercisable at discount Nil

50.4 Nature, type and elements of transactions with the related party Nill

50.5 Lending policies in respect of related party

a) Amount of transactions regarding loans and advances, deposits, guarantees and commitment Nil

b) Amount of transactions regarding principal items of deposits, expenses and commission Nil

c) Amount of provision against loans and advances given to related party Not applicable

d) Amount of guarantees and commitments arising out of the statement of affairs Nil

50.6 Business other than the banking business with the related concerns of the Directors as per Section 18(2) of the Bank Companies Act, 1991 Nil

50.7 Investments in securities of the Directors and their related concerns Nil

50.8 The Managing Director & CEO is considered as key management personnel and related remuneration are disclosed in Note 38.

______Chairman Director Director Managing Director & CEO

Dhaka, 6 March 2021

ANNUAL REPORT 2020 453 Schedule of fixed assets of the Bank (including land, building, furniture and fixtures) Annexure -A As at 31 December 2020

Interior Furniture Other ma- Computer Computer Motor ATM/Fast Right of use decoration and fixtures chinery and equipment software vehicles Track of asset - IFRS Land Building ATM Booth Books Total Particulars equipment Deposit 16: lease Machine Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka Taka

Cost / Revaluation

At 1 January 2020 105,550,689 191,939,491 1,236,646,954 381,366,883 2,362,805,128 4,833,095,981 537,093,397 635,371,2551,206,643,888 2,859,387,255 - 194,591 14,350,095,512

Revaluation surplus 642,809,311 207,604,466 ------850,413,777

Cost with revaluation at surplus 1 January 2020 748,360,000 399,543,9571,236,646,954 381,366,883 2,362,805,128 4,833,095,981 537,093,397 635,371,255 1,206,643,888 2,859,387,255 - 194,591 15,200,509,289

-

Addition during the year - - 79,703,480 44,788,791 226,464,506 646,259,727 68,925,122 42,614,107 110,948,852 19,933,000 2,739,649,053 - 3,979,286,638

Revaluation surplus during the year ------

Disposal / adjustments - - 36,372,198 617,790 17,501,193 789,560 - 97,135,052 - - - - 152,415,793

At 31 December 2020 749,360,000 399,543,957 1,279,978,236 425,537,884 2,571,768,441 5,478,566,148 606,018,519 580,850,310 1,317,592,740 2,879,320,255 2,739,649,053 194,591 19,027,380,134

- Depreciation -

-

At 1 January 2020 - 106,123,600 898,995,826 254,824,725 1,450,775,271 3,391,755,301 427,289,612 403,469,026 733,169,293 2,153,329,566 - 170,926 9,819,903,146

Charged for the year - 9,988,600 90,940,258 29,613,450 264,961,780 583,855,161 48,186,366 77,515,627 100,531,399 169,978,492 83,214,293 17,804 1,458,803,230

Disposal / adjustments - - 26,752,726 279,456 17,174,943 636,925 - 89,324,486 - - - - 134,168,536

At 31 December 2020 - 116,112,200 963,183,358 284,158,719 1,698,562,108 3,974,973,537 475,475,978 391,660,167 833,700,692 2,323,308,058 83,214,293 188,730 11,144,537,840

Written down value

At 31 December 2020 748,360,000 283,431,757 316,794,878 141,379,165 873,206,333 1,503,592,611 130,542,541 189,190,143 483,892,048 556,012,197 2,656,434,760 5,861 7,882,842,294

At 31 December 2019 748,360,000 293,420,357 337,651,128 126,542,158 912,029,857 1,441,340,680 109,803,785 231,902,229 473,474,595 706,057,689 - 23,665 5,380,606,143 Annexure - B Business segment results of the Bank For the year ended 31 December 2020 In million Taka

Off-shore Corporate Retail Financial SME Particulars Treasury Banking Total Banking Banking Inclusion Banking Unit

Interest income 10,413.5 4,681.6 1,979.2 3,509.3 8,154.1 595.5 29,333.1

Interest paid on deposits and borrowings 1,891.6 2,756.7 205.4 737.2 2,108.4 366.0 8,065.3

Net interest income 8,521.9 1,924.9 1,773.8 2,772.1 6,045.7 229.5 21,267.9

Transfer of interest between business segments (6,731.3) 12,736.9 - (1,295.9) (4,709.7) - -

Net interest income(NII) after transfer of interest between business segments 1,790.6 14,661.7 1,773.8 1,476.3 1,336.0 229.5 21,267.9

Non-interest income (fees, commission, exchange & other operating income) 2,561.8 1,564.0 249.2 879.3 82.4 9.7 5,346.5

Total operating income 4,352.4 16,225.8 2,023.0 2,355.6 1,418.4 239.2 26,614.3

Operating expenses 360.5 12,494.6 2,120.3 922.5 209.0 6.2 16,113.0

Profit before provision 3,991.9 3,731.2 (97.4) 1,433.2 1,209.5 233.0 10,501.3

Provision for loans and off-balance sheet exposures (specific and general) 534.0 110.6 - 178.0 - 17.93 840.5

Profit before taxes 3,457.9 3,620.6 (97.4) 1,255.2 1,209.5 215.1 9,660.8

Total provision for taxation (current and deferred) 1,425.0 1,506.2 - 626.9 604.0 - 4,162.1

Net profit after taxation 2,033.0 2,114.4 (97.4) 628.3 605.4 215.1 5,498.8

Total Average Assets 196,492.8 34,620.2 29,400.8 57,169.3 99,295.5 14,380.1 431,358.7

Total Average Assets Liabilities 79,589.4 216,533.7 29,489.4 40,615.5 21,680.1 13,600.8 401,508.7

ANNUAL REPORT 2020 455 Annexure - C Highlights on the overall activities of the Bank For the years 2020 and 2019

Serial Year No. Particulars 2020 2019

Taka Taka

1 Paid up share capital 5,500,000,000 5,000,000,000

2 Total capital 46,083,939,013 37,192,841,326

3 Capital surplus 12,651,189,982 7,258,926,676

4 Total assets 472,355,448,208 390,362,045,800

5 Total deposits 362,610,989,745 302,159,216,069

6 Total loans and advances 273,382,907,030 256,239,709,205

7 Total contingent liabilities and commitments 82,817,386,838 75,307,425,531

8 Credit deposit ratio 64.33% 73.93%

9 Percentage of classified loans against total loans and advances 2.17% 4.38%

10 Net profit after taxation and provision 5,498,744,639 4,341,387,760

11 Amount of classified loans and advances at the end of the year 5,921,867,925 11,230,102,666

12 Provisions kept against classified loan 4,200,100,253 5,094,016,753

13 Provisions surplus against classified loan - -

14 Cost of fund including operating cost 6.32% 7.27%

15 Interest earning assets 398,814,188,585 321,415,785,914

16 Non-interest earning assets 73,541,259,623 68,946,259,886

17 Return on investment (ROI) 6.35% 6.19%

18 Return on asset (ROA) 1.27% 1.18%

19 Income from investment 7,143,871,577 3,412,225,985

20 Earnings per share (Taka) 10.00 8.68

21 Net income per share (Taka) 10.00 8.68

22 Price earning ratio (Times) 6.50 8.21 off-shore banking unit

Balance Sheet (Off-shore Banking Unit) As at 31 December 2020

PROPERTY AND ASSETS 2020 2019 Notes USD Taka Taka Cash In hand (including foreign currencies) - - - Balance with Bangladesh Bank and its agent bank (s) (including foreign currencies) ------Balance with other banks and financial institutions In Bangladesh 221,083 18,748,111 225,327,667 Outside Bangladesh - - - 221,083 18,748,111 225,327,667

Money at call on short notice - - -

Investments Government - - - Others ------Loans and advances 3 Loans, cash credits, overdrafts, etc. 10,855,795 920,583,338 1,176,085,837 Bills purchased and discounted 167,844,778 14,233,421,801 12,185,083,049 178,700,573 15,154,005,139 13,361,168,886

Fixed assets including land, building, furniture and fixtures 4 1 82 82 Other assets 5 2,687 227,850 763,324 Non-banking assets - - - TOTAL ASSETS 178,924,344 15,172,981,182 13,587,259,959

LIABILITIES AND CAPITAL Liabilities Borrowings from other banks, financial institutions and agents 6 166,138,829 13,877,075,406 12,615,768,985

Deposits and other accounts 7 Current deposits and other accounts 2,281,436 193,468,309 49,928,041 Bills payable - - - Savings bank deposits - - - Term deposits - - - 2,281,436 193,468,309 49,928,041 Other liabilities 8 2,647,417 215,564,352 249,750,965 Subordinated debt - - - TOTAL LIABILITIES 171,067,682 14,286,108,067 12,915,447,991

ANNUAL REPORT 2020 459 Balance Sheet (Off-shore Banking Unit) As at 31 December 2020 2020 2019 Notes USD Taka Taka Shareholders’ equity Paid up share capital - - -

Share premium - - -

Statutory reserve - - -

Other reserve - - -

Dividend equalization account - - -

Assets revaluation reserve - - -

Retained earnings 9 7,856,662 886,873,115 671,811,968

TOTAL SHAREHOLDERS’ EQUITY 7,856,662 886,873,115 671,811,968

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 178,924,344 15,172,981,182 13,587,259,959

OFF-BALANCE SHEET ITEMS

Contingent liabilities

Acceptances and endorsements - - - Letters of guarantee - - - Irrevocable letters of credit - - 1,389,777 Bills for collection - - - Other contingent liabilities - - - Total contingent liabilities - - 1,389,777

Other commitments Documentary credits and short term trade-related transactions - - - Forward assets purchased and forward deposits placed - - - Undrawn note issuance and revolving underwriting facilities - - - Undrawn formal standby facilities, credit lines and other commitments ------Total other commitments - - -

Total off-balance sheet items including contingent liabilities - - 1,389,777 Profit and Loss Account(Off-shore Banking Unit) For the year ended 31 December 2020 2020 2019 Notes USD Taka Taka

Interest income 10 7,021,789 595,455,408 816,857,998 Interest paid on deposits and borrowings etc. 12 4,315,934 365,995,920 592,772,888 Net interest income 2,705,855 229,459,488 224,085,110 Investment income - - - Commission, exchange and brokerage - - - Other operating income 11 114,293 9,692,227 12,080,912 Total operating income 2,820,149 239,151,715 236,166,022 Salary and allowances 13 25,127 2,130,800 4,782,457 Rent, taxes, insurance, electricity, etc. - - - Legal expenses - - - Postage, stamp, telecommunications, etc. 14 34 2,924 29,533 Stationery, printings, advertisements, etc. - - - Managing Director & CEO’s salary and allowances - - - Directors’ fees - - - Auditors’ fees - - - Charges on loan losses - - - Depreciation and repair of bank’s assets 15 732 62,075 147,740 Other expenses 16 46,773 3,966,407 965,343 Total operating expenses 72,666 6,162,206 5,925,073 Profit before provision 2,747,482 232,989,509 230,240,949

Provision for loans and off-balance sheet exposures 3.4 Specific provision for loans - - - General provision for loans 211,417 17,928,362 (2,082,066) General provision for off-balance sheet exposures - - - 211,417 17,928,362 (2,082,066) Other provision - - - Total provision 211,417 17,928,362 (2,082,066) Net profit before taxation 2,536,065 215,061,147 232,323,015 Provision for taxation Current tax - - - Deferred tax [expense /(income)] ------Net profit after taxation 2,536,065 215,061,147 232,323,015 Appropriations - - - Retained surplus to retained earnings 9 2,536,065 215,061,147 232,323,015

ANNUAL REPORT 2020 461 Cash Flow Statement (Off-shore Banking Unit) For the year ended 31 December 2020

2020 2019 Notes USD Taka Taka A) Cash flows from operating activities

Interest receipts in cash 7,077,127 608,766,594 841,984,647 Interest payments (4,930,489) (418,110,893) (630,622,255) Dividend receipts in cash - - - Gain on sale of shares - - - Gain on sale of securities - - - Recoveries of loan previously written-off - - - Fee and commission receipts in cash - - - Cash payments to employees (25,127) (2,130,800) (4,782,457) Cash payments to suppliers - - - Income taxes paid - - - Receipts from other operating activities 114,293 9,692,227 12,080,912 Payments for other operating activities (47,540) (4,031,406) (1,142,616) Operating profit before changes in operating assets and liabilities 2,188,265 194,185,722 217,518,231

Increase/(decrease) in operating assets and liabilities Statutory deposits - - - Purchase /sale of trading securities - - - Loans and advances to other banks - - - Loans and advances to customers (21,295,451) (1,805,877,668) 148,224,594 Other assets 6,314 535,474 27,197,890 Deposits from other banks - - - Deposits from customers 1,692,670 143,540,268 15,798,259 Other liabilities account of customers 14,975,249 1,261,036,648 (3,706,484,065) Other liabilities Net cash from operating activities (2,432,952) (206,579,556) (3,297,745,091)

B) Cash flows from investing activities Payments for purchase of securities - - - Proceeds from sale of securities - - - Purchase of property, plant and equipment - - - Sale proceeds of property, plant and equipment - - - Net cash used in investing activities - - - C) Cash flows from financing activities Receipts from issue of loan capital and debt securities - - - Dividends paid - - - Net cash from financing activities - - -

D) Net increase / (decrease) in cash (A+B+C) (2,432,952) (206,579,556) (3,297,745,091)

E) Cash and cash-equivalents at beginning of the year 2,654,036 225,327,667 3,523,072,758

F) Cash and cash-equivalents at end of the year (D+E) 221,084 18,748,111 225,327,667 Notes to the Financial Statements (Off-shore Banking Unit) As at and for the year ended 31 December 2020

1. Status of the unit

1.1 The Off-shore Banking Units (OBU) of Dutch-Bangla Bank Limited are governed by the applicable rules & regulations of Bangladesh Bank. The Bank obtained the permission for conducting the activities of OBU under reference letter no. BRPD(P-3)744(109)/2010-610 dated 23 February 2010 of Bangladesh Bank. The Bank started the operation of OBU on 12 July 2010. The number of OBUs were two as at 31 December 2020, located at Chittagong EPZ Branch-Chittagong and Dhaka EPZ Branch-Dhaka.

1.2 Nature of business

The principal activities of the Bank are to carry on all kinds of banking business in accordance with applicable rules and regulations of Bangladesh Bank for operations of Off-shore Banking Unit in Bangladesh.

2. Significant accounting policies and basis of preparation of financial statements

2.1 Basis of accounting

The financial statements of the Bank have been prepared under historical cost convention and in accordance with the Bank Companies Act, 1991 as amended under sub-section 38(4) of the Act, relevant Bangladesh Bank Circulars, International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) adopted by the Institute of Chartered Accountants of Bangladesh (ICAB), the Companies Act, 1994 Financial Reporting Act 2015, the Securities and Exchange Rules, 1987 and other rules and regulations applicable in Bangladesh.

The financial statements represent the financial position and results of OBUs of the Bank. 2.2 Functional and presentation currency The functional currency of OBUs is US Dollar. While the financial statements are presented both in USD and equivalent Bangladesh Taka. Transactions in others currencies are recorded in the functional currency (USD) at the rate of exchange prevailing on the date of the transactions. Assets and liabilities in other currencies are translated into functional currency (USD) at the rate of exchange prevailing at the date of balance sheet. 2.3 Loans and advances a) Loans and advances are stated at gross amount. While the provision and interest suspense against loans and advances are shown separately as other liabilities. b) Interest income is calculated on daily product basis and accounted for on quarterly rest on accrual basis until the loans and advances are defined as classified accounts as per Bangladesh Bank guidelines. As per Bangladesh Bank directives, interest on loans and advances classified as bad/loss is not accounted for. A separate memorandum record is maintained for such interest on bad/loss loans.

c) Provision for loans and advances is made on the basis of the year end review by the management of the Bank in line with the instructions contained in BRPD Master Circular No. 14 dated 23 September 2012, BRPD Circular No. 19 dated 27 December 2012, BRPD Circular No. 05 and 06 dated 29 May 2013, BRPD Circular No. 15 dated 23 December 2013, BRPD Circular No. 16 dated 18 November 2014, BRPD Circular No. 08 dated 02 August 2015, BRPD Circular No. 01 dated 20 February 2018, BRPD circular No. 24 (17 November 2019), BRPD circular No.6 (19 May 2019), BRPD circular No. 4 (16 May 2019), BRPD circular No. 3 (21 April 2019), BRPD circular No. 16 (21 July 2020) and BRPD circular No. 52 (20 October 2020), issued by Bangladesh Bank.

ANNUAL REPORT 2020 463 2.4 Revenue recognition

The revenues of the OBU during the year have been recognized in terms of the provisions of International Financial Reporting Standards 15, ‘Revenue from Contracts with Customers’ as outlined below:

2.4.1 Interest income

a) Interest income from loans and advances and lease finance The policy for accounting of interest income on loans and advances is stated in 2.3.a and 2.3.b above.

2.4.2 Fees and commission income Fees and commission income arising from different services provided by the Units are recognized on cash receipt basis.

2.4.3 Interest paid on deposits and borrowings

Interest paid on deposits, borrowings etc. are accounted for on accrual basis.

2.5 Cash flow statement Cash flow statement has been prepared in accordance with the International Accounting Standard (IAS) 7, ‘Statement of Cash Flows’ under Direct method as recommended in the BRPD Circular No. 14 dated 25 June 2003 issued by the Banking Regulation & Policy Department of Bangladesh Bank.

2020 2019 USD Taka Taka 3. Loans and advances Loans, cash credits, overdrafts etc. 10,855,795 920,583,338 1,176,085,837 Bills purchased and discounted 167,844,778 14,233,421,801 12,185,083,049 Total loans and advances 178,700,573 15,154,005,139 13,361,168,886

3.1 Net loans, advances and lease receivables including bills purchased and discounted Total loans, advances and lease receivables 178,700,573 15,154,005,139 13,361,168,886 Less : Provision against loans and advances (specific and general) 1,892,423 151,540,051 133,611,689 Less : Cumulative balance of interest suspense account - - - 176,808,150 15,002,465,088 13,227,557,197 3.2 Residual maturity grouping of loans, advances and lease receivables including bills purchased and discounted

Payable

On demand - - - Within one to three months - - - Within three to twelve months 178,700,573 15,154,005,139 13,361,168,886 Within one to five years - - - More than five years - - - 178,700,573 15,154,005,139 13,361,168,886 2020 2019 USD Taka Taka 3.3 Classification status of loans and advances including the bills purchased & discounted

Unclassified Standard 178,700,573 15,154,005,139 13,361,168,886 Special mention account (SMA) - - - 178,700,573 15,154,005,139 13,361,168,886 Classified Substandard - - - Doubtful - - - Bad / loss ------178,700,573 15,154,005,139 13,361,168,886 3.4 Classification and provisioning of loans, advances and lease receivables including bills purchased and discounted Amount of Base for Percentage (%) of Amount of Amount of outstanding loans and ad- provision provision Provision provision Classification / Status of vances as at required as per required as at required as at loans and advances 31 December 2020 Bangladesh 31 December 31 December 2019 USD Taka Taka Bank’s directives 2018 (Taka) (Taka) Unclassified loans and advances Small & Medium enterprise financing - - - 0.25% - - Other than Small & Medium enterprise financing 178,700,573 15,154,005,139 15,154,005,139 1% 151,540,051 133,611,689

Special mention account - - - 1% - - Total unclassified loans and advances 178,700,573 15,154,005,139 15,154,005,139 151,540,051 133,611,689 Classified loans and advances Substandard - - - 20% - - Doubtiful - - - 50% - - Bad / loss - - - 100% - - Total classified loans and advances - - - - - Total loans and advances 178,700,573 15,154,005,139 15,154,005,139 151,540,051 133,611,689 Total provision maintained 151,540,051 133,611,689 Total provision surplus - -

3.5 Geographical location-wise loans, advances and lease receivables including bills purchased and discounted

Dhaka Division 178,700,573 15,154,005,139 13,273,687,953 Chittagong Division - - 87,480,933 Other Divisions - - - 178,700,573 15,154,005,139 13,361,168,886

ANNUAL REPORT 2020 465 2020 2019 USD Taka Taka

4. Fixed assets at cost or revalued amount including land, building, furniture and fixtures

Computer equipment and software 1,242 101,633 101,633 1,242 101,633 101,633 Less: Accumulated depreciation 1,241 101,551 101,551 Exchange differences adjustment* 1,241 101,551 101,551 * USD1 = Taka 81.85 in 2011 1 82 82

5. Other assets Interest accrued on investment but not collected, commission and brokerage receivable on shares and debentures and other income receivable 2,687 227,850 763,324 2,687 227,850 763,324

6. Borrowings from other banks, financial institutions and agents

a) In Bangladesh Borrowings from Dutch-Bangla Bank, Head Office 86,931,905 7,160,241,151 3,137,195,320 86,931,905 7,160,241,151 3,137,195,320 b) Outside Bangladesh Borrowings from other banks, financial institutions and agents 79,206,924 6,716,834,255 9,478,573,665 79,206,924 6,716,834,255 9,478,573,665 Total (a+b) 166,138,829 13,877,075,406 12,615,768,985

7. Deposits and other accounts

Current deposits 2,116,057 179,443,964 48,538,264 Savings bank deposits - - - Fixed deposits - - - Special notice deposits - - - Monthly term deposits - - - Sundry deposit - withholding tax -IT 165,379 14,024,345 1,389,777 2,281,436 193,468,309 49,928,041 8. Other liabilities

Interest payable on borrowings 754,994 64,024,322 116,139,295 Accumulated provision for loans and advances including off-balance sheet exposures [Note 8.1] 1,892,423 151,540,051 133,611,689 Other liability - - - Exchange differences* - (21) (19) 2,647,417 215,564,352 249,750,965 * USD1 = Taka 84.8011 as on 31 December 2020; USD1 = Taka 84.9000 as on 31 December 2019. 2020 2019 USD Taka Taka 8.1 Accumulated provision for loans and advances and Off-balance sheet exposures General provision Opening balance 1,681,006 133,611,689 135,693,755 General provision for the year 211,417 17,928,362 (2,082,066) Provision held at the end of the year [Note 3.4] 1,892,423 151,540,051 133,611,689

9. Retained Earnings

Balance at 1 January 5,320,597 671,811,968 439,488,953 Retained surplus for the year 2,536,065 215,061,147 232,323,015 Closing balance 7,856,662 886,873,115 671,811,968

10. Interest income

Interest on loans and advances 7,020,444 595,341,380 740,120,130 Interest on balance with other banks and financial institutions 1,345 114,028 76,737,868 7,021,789 595,455,408 816,857,998

11. Other income Commission, exchange etc 1,407 119,347 (740,047) Recoveries from client 107,219 9,092,289 10,646,375 Service charges on deposit accounts 60 5,088 6,368 Income from Export-Import 5,607 475,503 2,168,216 114,293 9,692,227 12,080,912

12. Interest paid on deposits and borrowings etc.

Interest paid on borrowings 4,315,934 365,995,920 592,772,888 4,315,934 365,995,920 592,772,888

13. Salary and allowances

Basic salary 12,910 1,094,808 2,500,982 House rent allowance 6,455 547,404 1,250,500 Conveyance allowance 1,210 102,637 229,293 Bank’s contribution to provident fund 1,291 109,480 250,098 Medical expenses 1,291 109,462 250,081 Bonus 1,969 167,009 301,503 25,127 2,130,800 4,782,457

14. Postage, stamp, telecommunications, etc.

Postage, telecommunications, etc. 34 2,924 29,533 34 2,924 29,533

ANNUAL REPORT 2020 467 2020 2019 USD Taka Taka

15. Depreciation and repair of bank’s assets

Depreciation on fixed assets including land, building, furniture and fixtures [Note-15.1] - - - Repair and maintenance [Note-15.2] 732 62,075 147,740 732 62,075 147,740

15.1 Depreciation on fixed assets including land, building, furniture and fixtures

Computer equipment and software ------

15.2 Repair and maintenance

Vehicle 732 62,075 147,740 732 62,075 147,740

16. Other expenses 46,773 3,966,407 965,343 Top Management of DBBL

Managing Director & CEO

Mr. Abul Kashem Md. Shirin

Deputy Managing Directors

Mr. Shahidur Rahman Khan Mr. Md. Abedur Rahman Sikder Mr. Md. Ahteshamul Haque Khan Mr. Md. Shahadat Hossain Mr. Md. Shah Alam Patwary Mr. Mohammed Shahid Ullah, FCA DBBL BRANCHES 01. Abdullahpur Branch 12. Aziznagar Branch Anwar Hossain Plaza (1st floor), Kolakandi Road, “Chowdhury Shopping Abdullahpur Bus stand, Keraniganj, Dhaka. Complex” at Aziznagar, Lama, Mob: 01938-801698 Bandarban, Mobile- 01847-415222

02. Aganagar Branch 13. Baburhat Branch Mayaz Tower (1st & 2nd floor), Madhabdi Bazar, Narsingdi. Aganagar, Kaligonj, Keranigonj, Dhaka. Tel: 9446921-22, 9446670 Mob: 01938-803293 Mob: 01711-541734, 01711-629340 03. Agrabad Branch 14. Bagerhat Branch Hossain Court, 75, Agrabad C/A, Chattogram-4100. Kazi Badar Uddin Plaza, (1st & 2nd Floor), Tel: 031-724781-2, 031-726571 Holding no. 37, Khan Zahan Ali Road, Mob: 01711-728391, 01729-072876 Bagerhat Sadar, Bagerhat. Mob: 01847-278127

04. Amborkhana Branch 15. Bagher Bazar Branch 781, Lais Super Market (1st floor), 1st Floor, Mecca Tower, Amborkhana, Sylhet.Tel: 0821-710416, 0821-720178 Bagher Bazar, Gazipur. Mob: 01938-801621, Fax: 0821-717497 Mob: 01847-278125

05. Amin Bazar Branch 16. Banani Branch Begun Bari, Amin Bazar, “Borak Mehnur” (1st & 2nd Floor), 51/B, Kamal Ataturk Savar, Dhaka. Avenue, Banani, Dhaka-1213. Tel: 55034190, 9883892 Tel: 02-9026098, 02-9026096 Mob: 01711-596014, 01713-069923 Mob: 01938-801677 Fax: 9887336

06. Ashkona Branch 17. Banasree Branch Bhuiyan Shopping Complex, 301/631, Ashkona, Holding No-2 & 3 (1st floor), Main Road, Dakshinkhan, Dhaka. Block # F, Banasree, Rampura, Dhaka Tel: 58955884, 7912494, 7914814, Mob: 01938-801625 Mob: 01810-025608

07. Ashuganj Branch 18. Bandarban Branch Nur Plaza, Dag# R. S. 97/2961, Union: Chor Chartala, “Haque Hill Tower” (1st Floor), Main Road, Bandarban Thana: Ashuganj, Dist: Brahmanbaria. Sadar, Bandarban Tel: 8528-74144, 8528-74154, Mob: 01938-803287 Mob: 01810-025611

08. Ashulia Bazar Branch 19. Bandura Branch Ashulia New Market (1st floor), Ashulia Bazar, Shezan Multi Shopping Mall (1st Floor), Ashulia, Dhaka. Bandura Bazar, Nawabganj, Dhaka. Mob: 01847-278123 Mob: 01730-726982, 01730-726983, 01713-481746

09. Ashulia Branch 20. Bangabandhu Road Branch Jamgora, DEPZ Main Road, 60 (Old) / 86 (New), Bangabandhu Road, Narayanganj. Ashulia, Savar, Dhaka. Tel: 7642860-2, Mob:01711-541739 Mob: 01938-801656 Fax: 7642862

10. Ati Bazar Branch 21. Banti Bazar Branch Ati Bazar, Keraniganj, Dhaka. Tarazuddin Plaza (1st floor), Banti Bazar, Araihazar, Tel: 02-55103283, 02-55103284 Narayanganj Mob: 01938-801676, 01938-801681 Mob: 01810-025610

11. Aushkandi Branch 22. Baraipara Branch Hazi Nawab Mansion (1st Floor), “Sufia Mansion”, Aushkandi, Nabiganj, Habiganj. Nabinagar- Chandura Highway, Mob: 01847-278108 Baraipara, Ashulia, Dhaka Mobile- 01847-415228 23. Barishal Branch 35. Bogura Branch S.S. Tower, 109, Sadar Road, Barishal. Madhu Metro Tower (2nd & 3rd Floor), Tel: 0431-61662,0431-2174474 Holding# 56/64, Kazi Nazrul Islam Road, Sathmatha, Mob: 01713-450734, 01938-801653 Bogura Sadar, Bogura-5800. Fax:0431-2174489 Tel: 051-69820, 051-69830, Mob: 01713-201690 24. Bashundhara Branch 36. Borguna Branch Ka-3/1-C (1st Floor) Bashundhara Road, ‘Shahabuddin Plaza’ (1st & 2nd floor), Jagannathpur, Dhaka-1229. Tel:8413618-20 Sadar Road, Borguna Mob: 01730-024092, Fax: 8413620 Ext: 108 Mob: 01810-025613 25. Basurhat Branch 37. Borolekha Branch Tanha Bhaban (1st & 2nd floor), Hazi Moshud Ali Trade Centre, College Road, Basurhat, Noakhali. Vill-Baroigram (Borolekha Bazar), Tel: 03223-56015-16, Mob: 01730-333631 P.S.: Borolekha, Dist: Moulvibazar. Fax: 03223-56010 Tel: 08622-56702-04, Mob: 01938-801634 26. Beani Bazar Branch 38. Brahmanbaria Branch Zaman Plaza, Beani Bazar, Sylhet. F.C. Tower, Holding# 1018, Tel: 08223-56061-62 Court Road (Kalaisreepara), Brahmanbaria Mob: 01713-481743, Fax: 08223-56060 Tel: 0851-63284, Mob: 01938-801650 27. Benapole Branch 39. Chandpur Branch Noor Shopping Complex, Holding # 570/1, Hakim Plaza, 2nd floor, Jashore-Kolkata Highway, Benapole, Jashore. 248, Shahid Muktijoddha Road, Chandpur. Mob: 01847-278106 Tel: 0841-66595-7, Mob: 01938-801714 28. Bhairab Branch 40. Chapai Nawabganj Branch 261-262, Char Rastar More, Bottola Road, Holding# 04 (2nd floor), Puraton Bazar, Bhairab Bazar, Bhairab, Kishoreganj. Godagari Road, Chapai Nawabganj. Tel: 0781-52699(M), Tel: 029470255-6, Mob: 01730-333773 0781-52697(D/M), 0781-52698 (cash), Mob: 01938-801715

29. Bhola Branch 41. Chhatak Branch Jahanara Arcade, (1st and 2nd Floor) “Tahir Plaza”, 2nd & 3rd Floor, Sylhet Road, Holding # 434, Sadar Road, Bhola. Chhatak, Sunamganj. Tel: 08723-56356, 08723-56446, Mob: 01847-278128 08723-56439, Mob: 01713-481707

30. Bhuigar Branch 42. Chattogram EPZ Branch Bhuiyan Tower (1st floor), Chowdhury Market, 2nd floor, EPZ main gate, Bhuigar Bus stand, Fatulla, South Halishahar, Bondor, Chattogram. Kutubpur, Narayanganj. Tel: 031-741421-2, Mob:01730-703435 Mob: 01938-801734 31. Bhulta Branch 43. Chokoria Branch Hazi Abdul Haque Super Market, Bhulta 1st Floor of ‘White Stone N. Y. Shopping Center’, GolaKandail, Rupgonj, Narayanganj. Main Road, Chokoria, Cox’s Bazar. Mob: 01730-313995 Tel: 034-2256415, 034-2256416, Mob: 01938-801664 32. Bijoynagar Branch 44. Chowmuhani Branch 180-181, Shahid Syed Nazrul Islam Shoroni, NSS Bhaban, Feni Road, Bijoynagar, Dhaka. Tel: 8391562-3 Chowmuhani, Begumganj, Noakhali. Mob: 01730-703441, 01938-801692 Tel: 0321-53632-3, Mob: 01730-077785

33. Biswanath Branch 45. Chuadanga Branch Haji Afij Ali Complex, Jagannathpur road, Anawar Tower, Holding# 0634 Biswanath, Sylhet. Ferighat Road, Tel: 08224-56009, 08224-56010 Ward# 04, Chuadanga. Mob: 01713-080234 Tel: 0761-81131-2, Mob: 01938-803288

34. Board Bazar Branch 46. Companiganj Branch Mansur Plaza, Board Bazar, Gazipur. 871 (1st & 2nd floor), Nabinagar Road, Tel: 9293433-5, Mob: 01713-060712 Companiganj, Muradnagar, Cumilla. Mob: 01938-801717

ANNUAL REPORT 2020 471 47. Corporate Branch 60. Doulatpur Branch Holding no- 47, Motijheel C/A, ‘S.S Center’, Daulatpur, Khulna Dhaka-1000, Mobile- 01847-415231 Mob: 01810-025615

48. Cox’s Bazar Branch 61. Dumni Branch M. Rahman City Centre, Holding# 465, Dumni Bazar, Khilkhet Road# 01, Laldighir Par, Main Road, Cox’s Bazar Sadar, Dhaka. Cox’s Bazar. Tel: 0341-51146-7, Mob: 01713-257364 Mob: 01938-801704 49. Cumilla Branch 32/30, Bandi Shahi Market, Chawk Bazar, Cumilla. 62. Elenga Branch Tel: 081-61011, Mob: 01713-431444 Ekattur Bhaban (1st floor), Elenga Bus Stand, Kalihati, Tangail. Mob: 01938-801713 50. Dagonbhuiyan Branch Sultan Tower, Zero Point, 63. Elephant Road Branch Dagonbhuiyan, Feni. Tel:03323-79397-8 235/5 Elephant Road, 1st ,2nd & 3rd floor, Dhaka -1205. Mob: 01730-351786, Fax: 03323-79425 Tel: 5675458, 9675498, Mob: 01713-049306, 01938-801690, Fax: 9675498 Ext-(111) 51. Dakshinkhan SME / Agriculture Branch 83, Rajob Ali Super Market (1st Floor), 64. Faridpur Branch Dakshinkhan Bazar, Dakshinkhan, Dhaka. Chawk Bazar Tower, 57-58, Chawk Bazar, Faridpur. Tel: 8999669-71, Mob:01730-317194 Tel: 0631-67080-82, Mob: 01730-703437

52. Dakshin Surma Branch 65. Fatikchari Branch Sumaiya Complex, Sultanpur Road, Chandipul, Nazrul Shopping Complex, College Road, Dakshin Surma, Sylhet, Bibirhat, Fatikchari, Chattogram. Mobile- 01847-415224 Tel: 03022-56235-6, Mob: 01730-077780

53. Dania Branch 66. Feni Branch Ayesha Mosharaf Shopping Complex (2nd & 3rd Floor), Aziz Shopping Centre, Dania, kadamtali, Shyampur, Dhaka 1236. 163, S.S.K. Road, Feni. Tel: 7552400, 7553095,7552501 Tel: 0331-63526, 0331-74490 Mob: 01713-010703, Fax:7552501 Mob: 01713-431443

54. Dhaka EPZ Branch 67. Gaibandha Branch Baipail Mor, Asulia, Savar, Dhaka. Islam Plaza, 1st floor, Tel: 7790668, 7788254, Station Road, Mob: 01713-046290 , Fax: 7789265 Gaibandha. Mob: 01847-278124 55. Dhaka Dakshin SME / Agriculture Branch 32, Shahir Uddin Super Market, 68. Gazipur Branch Dhaka Dakshin, Golapganj, Sylhet. Asian Tower (2nd floor), Holding# 80 Tel: 8227-56523, Mob: 01713-481740 Block# J, Bus Stand, Bazar Road Joydebpur, Gazipur. Tel-02-49260260, 49260228 56. Dhanmondi Branch Mob: 01938-801695, Fax: 02-9264234 Bay’s Park Height (Ground & 1st Floor), 69. Gazipur Chowrasta Branch Road # 09, Holding # 02, Dhanmondi, Dhaka-1205. Reaz Tower (1st Floor), Tel: 58610963, 58615661, 58611372, Mob: 01711-590289 Gazipur Chowrasta, Gazipur. Tel: 49262167, 49262001 57. Dholaikhal Branch Mob: 01713-141987, 01938-801649 Jaheda Rupali Bhaban (1st floor), 40/1/A, Lal Mohon Saha Street, Dholaikhal, Dhaka. Mob: 01810-025607 70. Goala Bazar Branch Mohon Plaza, Manik & Brothers, 1st & 2nd floor, North 58. Digpait Branch Goala Bazar, Osmaninagar, Sylhet. Digpait Uposhahar, Sadar, Jamalpur. Tel: 08242-56419-20, Mob: 01730-077787 Mob: 01938-801620 71. Gobindaganj Branch 59. Dinajpur Branch 219, Rangpur -Bogura Highway, Gobindaganj Palok, Munshipara, Lilir Mor, Kotwali, Dinajpur. Gaibandha. Tel: 05423-75310, 05423-75318 Tel: 0531-63960-61, Mob: 01730-331459, Fax: 0531-63962 Mob: 01713-435864, Fax: 05423-75320 72. Golapgonj Branch 85. Ibrahimpur Branch Noor Mansion, Golapgonj, Chowmohona, Sylhet. 83, Ibrahimpur, Main Road, Kafrul, Dhaka Tel: (08227)-756300, Mob: 01713-060998 Mob: 01810-025603

73. Gopaldi Branch 86. Imamgonj Branch Holding# H/D-112, Ward# 06, Gopaldi, Holding # 22/01-23 (2nd & 3rd Floor), Roy Ishwar Chandra Araihazar, Narayanganj. Mob: 01938-803290 Shil Bahadur Street, Imamgonj, Dhaka. Tel: 7341344, 7341369-70 74. Gopalganj Branch Mob: 01713-060961, Fax: Ext:108 04, Madrasa Road, Gopalganj Sadar, Gopalganj. 87. Islampur Branch Mob: 01847-278101 Jahangir Tower (2nd Floor & 3rd floor), 114-116, Islampur Road, Dhaka-1100. Tel: 57395414, 75. Gouripur Branch 57392944, 57396026, Mob: 01711-594508, 01730-726981 Madona Twin Tower, Gouripur Bazar, Gouripur, Daoudkandi, Cumilla. Mob: 01938-801680 88. Jamalpur Branch Jam-e Masjid Road (Tamaltala), Jamalpur Sadar, Jamalpur. Tel: 0981-62489, 0981-64868 76. Gorai Branch Mob: 01938-801644. Firoz Haider Khan Complex, 1st floor, Dhaka-Tangail Highway, Gorai, 89. Jashore Branch Mirzapur, Tangail. Mob: 01844-490182 11/A, R.N. Road, Kotwali, Jashore. Tel: 0421-68314-5, Mob: 01713-431347. 77. Gulistan Branch ‘Hossain Chember’, 30, Bangabandhu Avenue, 90. Jhalakathi Branch Dhaka-1000, Mob: 01810-025614 21/22, Dakter Potti Road, Jhalakathi Sadar, Jhalakathi 78. Gulshan Branch Mobile- 01847-415230 The Grand Delvistaa CES (A), Road # 113, 91. Jhawtala SME / Agriculture Branch Old GP Center, Gulshan, Dhaka - 1212. Holding# 1040/2 (1st Floor), Jhawtala Main Road, Tel: 58812213, 9888436 Jhawtala, Cumilla. Tel: 081-68618, 081-68588 Mob: 01711-590396, 01713-040865, Fax: 8826344 Mobile: 01713-481725, Fax: 081-68594 79. Gulshan Circle-1 Branch 92. Jhenaidah Branch Bay’s 23, Gulshan Avenue (1st Floor), Plot # 6, M. N. Super Market (1st floor), 19, Sher-e-Bangla Sarak, Block # SW (l), Gulshan Model Town, Dhaka - 1212. Jhenaidah Sadar, Jhenaidah. Mob: 01938-801720, 01938-801726 Tel: 0451-63641-2, Mob: 01938-801694 FAX : 0451-63643, 01938-801694 80. Habiganj Branch Habiganj Regency, 93. Joina Bazar Branch R.D Hall Road (Kalibari Road), Habiganj. Joina Bazar, Sreepur, Gazipur Tel: 0831-63153-4, Fax: 0831-63152 Mob: 01810-025602 Mob: 01730-703433 94. Joypara Branch 81. Halishahar Branch Monowara Mansion, Joypara Bazar, Holding No. 1719/2100, Plot-4, Road# 4, Block-K, Dohar, Dhaka. Word-24, P C Road, Halishahar, Chattogram. Tel: 02-7768169, Mob:01713-201877 Tel: 031-2518051-3, Mob: 01730-333630 95. Joypurhat Branch 82. Hasnabad Branch Ansar Ali Complex (Gr. Floor), Mofizuddin Mansion, Holding# 01, Hasnabad, Sadar Road, Joypurhat, Mob: 01938-803285 South Keraniganj, Dhaka. Mob: 01938-803296 96. Jubilee Road Branch 83. Hathazari Branch Kader Tower (2nd Floor), Tinpool, 128, Jubilee Road, S.S. Tower (1st Floor), Court Road,Hathazari, Chattogram. Kotwali, Chattogram. Tel: 031-2601188, Mob: 01711-728300 Tel: 031-2854491-3, Mob: 01713-257361 84. Hemayetpur Branch 97. Kadamtali Branch Hazi Ashraf Shopping Complex, 1st floor, Rahat Centre(1st Floor), 295, D.T. Road, Kadamtali, Hemayetpur Bus Stand, Savar, Dhaka. Chattogram. Tel: 031-2514116, 031-2514130 Tel: 027745865, Mob: 01938-801718 Mob: 01713-257362

ANNUAL REPORT 2020 473 98. Kalampur Branch 111. Konabari Branch Kalampur Bazar, Dhamrai, Anjuman Tower (1st & 2nd floor), Plot no. A-149 (part), Dhaka-1351. Mob: 01938-801703 S-66 (Part) BSCIC I/E, Konabari, Gazipur.Tel: 9298841-3, Mob: 01730-077784 99. Kalatia Branch “Darani Master Plaza”, Holding # 9/1-A, Kalatia Bazar, 112. Kurigram Branch Keraniganj, Dhaka Ganir Uddin Super Market, 1st floor, Holding# 25, Mob: 01810-025612 Ghoshpara, Bazar Road, Kurigram. Mob: 01938-801732 100. Kaliganj Branch Gouro Bhabon (1st floor), 220, Kaligonj Bazar, 113. Kushtia Branch Kaligonj, Gazipur. Mob: 01938-801712 Monir Tower, 298 (old 164) N.S. Road, Barobazar, Kushtia. Tel: 071-71729, 071-71730, 101. Kamarpara Branch Mob: 01730-333634 Hazi Ramzan Ali Tower, 33, Kamarpara, Turag, Dhaka. 114. Lalmonirhat Branch Mobile- 01847-415221 “Patwary Complex”, Holding No- 1224-01, Goshala Road, 102. Kanchpur Branch Lalmonirhat Sadar, Lalmonirhat. 96, Sonargaon Mega Complex (1st floor), Kanchpur, Mobile- 01847-415227 Sonargaon, Narayanganj. Mob: 01938-803283 115. Laksham Branch 103. Kapasia Branch Khair Mansion, Holding# 894, Laksham Bazar, Mollah Manson, Kapasia Bazar, Laksham, Cumilla. Tel: 08032-51031-2 Kapasia, Gazipur. Mob: 01938-801711 Mob: 01938-801647

104. Kashinathpur Branch 116. Laxmipur Branch New Alahi Super Market, Kashinathpur Bazar, Ali Plaza, 1126, 1127 Godown Road (Old Khaddogudam Kashinathpur, Sathia, Pabna. Road), Laxmipur. Mob: 01938-801702 Tel: 0381-62429, 62409, Mob: 01938-801646

105. Kawran Bazar Branch 117. Local Office BTMC Bhaban (1st floor), 7/9 Kawran Bazar 1, Dilkusha C/A, Dhaka-1000. Dhaka-1215. Tel: 55011975-6 Tel: 9568539, 9559291, 9557846, 9552831 Mob: 01711-590395, 01711-431524, Fax:58155522 Mob: 01730-031823, 01711-566271

106. Keraniganj Branch 118. Lohagara Branch Jahanara Plaza, Dakpara, Zinzira, Keraniganj Mostafa City (1st Floor), Lohagara Sadar, Dhaka. Tel: 7763994-6, Lohagara, Chattogram, Mob: 01938-801615, Fax: 7763997 Tel: 03034-56342, Mob: 01730-024090 107. Khatunganj Branch 119. Madaripur Branch Alam Business Center (1st & 2nd floor), City Plaza,Main Road, Puran Bazar, Madaripur. 254, Khatungonj, Chattogram. Tel: 0661-62005, 0661-62006, 0661-61873, Tel: 031-2856781-3, 031-2866691-2, Mob: 01730-088882 Mob: 01713-248799 108. Khilgaon Branch 120. Magura Branch R, N Square, Holding No- 937, Kokhon-Anowara Tower, Holding No-94, Pashu Haspatal Plot No-552/C, Block- C, Shahid Baki Road Para, Syed Atar Ali Road, Ward#09, Pourosova- Magura, Khilgaon, Dhaka- 1219, Mobile- 01847-415226 Upzilla-Magura, Zilla-Magura. Mob: 01847-278103 109. Khulna Branch R. Amin Trade Center, 17, KDA Avenue, Khulna. 121. Maijdee Court Branch Tel: 041-813782-3, Rahman Center (1st floor), Town Hall More, Mob: 01713-400582 Main Road, Maijdee Court, Noakhali. Tel: 032171043, 032171047, Mob: 01938-803284 110. Kishoreganj Branch Nirala Shopping Complex, 742, Ishakhan Road, 122. Mainamati Branch Kishoreganj. Tel: 0941-61390-1, A.M Hazi Market, 2nd Floor, Nischintopur, Cumilla Mob: 01938-801699 Cantonment, Cumilla Sadar, Cumilla. Mob: 01847-278107 123. Manda Branch 135. Moghbazar Branch 145 North Manda (Main Road), Mugda, Green Satmahal, 1st floor, 206, 207, 208, Dhaka-1214. Boro Moghbazar, Moghbazar, Dhaka. Tel: 02-7274429-31, Mob: 01938-801675 Mob: 01844-490183 124. Manikgonj Branch 136. Mohakhali Branch Shandhani Plaza (1st Floor), 69/1, Shahid Rafiq 35, Bir Uttam A. K. Khandaker Road, Hotel Zakaria Sarak,Manikgonj. International (1st Floor), Mohakhali C/A Dhaka. Tel: 7720020, 7720149, Mob: 01730-024094 Tel: 9891317, 9861939, Mob: 01711-593278, 01938-801608 125. Masterbari Branch RH Complex ( 1st Floor), Masterbari, 137. Mohammadpur Branch Valuka, Mymensingh. 75/C, Asad Avenue, Mohammadpur, Dhaka. Mob: 01938-803295 Mob: 01938-803294 126. Matuail Branch 138. Monohardi Branch Meghna Plaza, 11, Konapara, Main Road, Lake City, 8/1, Monohardi, Narsingdi. Paradogar Matuail, Jatrabari, Dhaka. Tel: 7550640, Tel: 9445077, 9445377, 7550644, Mob: 01938-801614, Fax: 77550642 Mob: 01938-801701 127. Mawna Branch 139. Motijheel Foreign Exchange Branch Hazi Amir Complex (1st & 2nd Floor), Mawna Chowrasta, City Center, 90/1 Motijheel C/A, Dhaka-1000. Sreepur Road, Sreepur, Tel: 9550769, 9550677 Gazipur-1740. Mob: 01938-801651 Mob: 01711-535664, 01711-543501 Fax: 9550504 128. Megna Ghat Branch Islam Shopping Center, 1st floor, Meghna, New Town, 140. Moulvibazar Branch Sonargoan, Narayanganj Sonour Complex, M.Saifur Rahman Road, Mob: 01847-278131 Paschim Bazar, Moulvibazar. Tel: 0861-62850-51, Mob: 01713-201879 129. Meherpur Branch Kalam Market, 195/5, 141. Munshiganj Branch Borobazar, Main Road, 67/6, Dewan Plaza, Sadar Road, Munshiganj. Meherpur Sadar, Meherpur Tel: 7620077, 7620099, Mob: 01730-703431 Mobile- 01847-415225 142. Muradpur Branch 130. Mirer Bazar Branch Al-Kabir Tower (1st floor) Fouzia Sarker Commercial Complex (2nd floor), Muradpur, Panchlish, Chattogram. Kamargaon, Mirer Bazar, Pubail, Gazipur. Tel: 656011-3, Mob: 01713-060994 Mob: 01938-801654 143. Mymensingh Branch 131. Mirpur Branch Mamatashi Emporium 8, Darus Salam Road, Mirpur–1, Dhaka-1216. 8 & 12 GKMC Saha Road, Choto Bazar, Mymensingh. Tel: 9016841, 9016843 Tel: 091-52081, 091-52082, Mob: 01711-593280, Fax: 9030533 Mob: 01730-088883 132. Mirpur Circle-10 Branch 144. Nababpur Branch Gemcon EI Mercado, 2nd & 3rd Floor 165, Nababpur Road, Dhaka-1000. 114, Begum Rokeya Sarani, Mirpur -10, Dhaka -1216. Tel: 9582872, 47111504, 9583285 Tel: 9015957, 9015975, 9015966, Mob: 01711-541738, 01713-043691 Mob: 01713-247410 145. Naogaon Branch 133. Mirzapur Branch Ananda Bazar Shopping Complex, Bridge More, Ashkabar Biponi Bitan (1st Floor), Main Road, Naogaon. Mirzapur Bus Stand, Mirzapur, Tangail. Tel: 0741-81166, 0741-81167 Tel: 09229-56226-7, Mob: 01938-801645, Fax: 0741-81176 Mob: 01713-257363, 01938-801652 146. Narail Branch Bhuiyan Shopping Mall, 134. Modonpur Branch Holding No. 81, Rupganj Bazar Ekota Shomobay Super Market (2nd Floor), Narail Sadar, Narail Modonpur, Bondor, Narayanganj. Mob: 01847-278130 Mob: 01938-803289

ANNUAL REPORT 2020 475 147. Narayanganj Branch 159. O. R. Nizam Road Branch 45, S.M. Maleh Road, Tanbazar, Narayanganj-1400. IPL, Atlanta Trade Center, 788/864, Tel: 7643828, 7631134, 7643088, 764052 O.R. Nizam Road, Golpahar Circle, Chattogram. Mob: 01713-032551, 01711-880080 Tel: 321-2855936-38 Mob: 01713-107249, Fax: 2855939 148. Narayanganj BSCIC Branch Plot# A - 55, Block# A, BSCIC Hosiery Industrial Area, 160. Pabna Branch Shasongaon, Enayetnagar, Fatullah, Narayangonj. “Midtown Homes”, 1st & 2nd floor, Holding # 1345/1, # Tel: 7671611, 47670980, Mob: 01730-313997 1346/2, Abdul Hamid Road, Shalgaria, Pabna. Tel: 0731-64478, 0731-63246 149. Narsingdi Branch Mob: 01730-333635 217, Deshprio Road, Ward# 4, Narsingdi Sadar, Narsingdi. Tel: 9464460, 9464470, 9464466, 161. Pagla Branch Mob: 01713-481704 Al-Haz Afsar Karim Bhaban, Pagla, Fatullah, Narayanganj. 150. Natore Branch Tel: 02-7696683-4, 02-7696239 R.M Bhaban, Holding # 363, Kanaikhali –Dhaka Road, Mob: 01938-801640, 01938-801697 Natore Sadar, Natore. Mob: 01847-278102 162. Pallabi Branch 151. Nawabgonj Branch Northern Khan Heights, Plot# 34, Main Road# 03, Rajuk Commercial Complex, 1st, Block-D, Section# 11, Pallabi, Mirpur, Dhaka-1216. 2nd Floor Nawabganj , Dhaka. Tel: 9013444, 9013446, Mob: 01847-278104 Mob: 01938-801643, Fax: 9013445

152. Naya Bazar Branch 163. Panchagarh Branch 29/01, North South Road, Bangshal, Dhaka. Anwar Plaza,Holding # 19, Tetulia Road, Panchagarh. Tel: 7394659, 57395523, 57394654, Tel: 0568-62401, 0568-61210 Mob: 01938-801663 Mob: 01713-141986 164. Patherhat Branch 153. Nayanpur Bazar Branch Bharateswari Plaza (1st floor), Kazi Complex (1st floor), Nayanpur Bazar, Noapara, Raozan, Chattogram. Sreepur, Gazipur Tel:031-671620, 031-671610 Mob: 01810-025601 Mob: 01711-728339, 01730-726984

154. Netaiganj Branch 165. Panthapath Branch 21, R. K. Das Road, ENA Shakur Emarat (1st Floor), Netaigonj, Narayanganj. 19/3, West Panthapath, Dhaka. Tel: 7646099, 7648920 Mob: 01938-803291, Tel: 9128325 Mob: 01713-060713 166. Patuakhali Branch 155. Netrokona Branch Holding# 11, S.S. Tower, Sadar Road, Patuakhali. 0337, Chitra Medical Hall, (1st & 2nd floor), Tel: 044165194, 044165195, Mob: 01938-801658 Choto Bazar, Netrokona. Tel: 0951-61698, 0951-61676, 0951-62171, 167. Pirojpur Branch Mob: 01938-801716 Shamsunnahar Tower (2nd floor), Holding# 125, Shahid Omor Faruque Road (Sadar Road), Pirojpur. 156. New Market Branch Tel: 0461-63113-4, Mob: 01938-801733 Golden Gate Shopping center, 28 Mirpur Road, Dhaka. Mob: 01847-278109 168. Progoti Shoroni Branch Azhar Comfort Complex (1st floor), Ga-130/A, Progoti 157. Nilphamari Branch Shoroni, Middle Badda, Dhaka-1212. Prodhan House (1st floor), Boro Masjid Road, Nilphamari Tel: 8834220, 8833976, 8816800, Sadar, Nilphamari Mob: 01730-703440 Mob: 01810-025605 169. Rajbari Branch 158. Noapara Branch Miah Tower (1st floor), Holding# 242-244, Noapara Bazar, Saiham College Road, Rajbari Bazar, Rajbari. Nagar, Madhabpur, Tel: 0641-65800, 0641-65811, Habiganj. Mob: 01938-803292 Mobile- 01847-415223 170. Rajshahi Branch 181. Seed Store Bazar Branch Rajshahi Association Bhavan (1st Floor), Alokar Mor, Ps: Shomola-Taher Plaza (1st and 2nd floor), Boalia, Dist: Rajshahi. Seed Store Bazar, Valuka, Mymensingh Tel: 0721-821593-94, Mob: 01713-455551 Mob:01847-278126 171. Rampura Branch 182. Shafipur SME / Agriculture Branch 2/1, East Rampura, DIT Road, Ishadi Tower (1st floor), Shafipur Bazar, Shafipur, Rampura, Dhaka. Kaliakoir, Gazipur Tel: 9356453-54, 9356200 Tel: 02-49271210-2, Mob: 01730-317192 Mob: 01730-317188, 01730-317196 183. Shahzadpur Branch 172. Rangpur Branch Shahjahan Super Market (1st & 2nd floor), Town Masjid Azahar Plaza, Nababganj Bazar, Road, Monirampur Bazar, Shahjadpur, Sirajgonj. Dewanbari Road, Rangpur. Tel: 07527-64001, 07527-64003, Tel:0521-67426-7, 0521-67406, Mob: 01713-481701 Mob: 01713-431319 431319 184. Shahjalal Uposhahar Branch 173. Raozan SME / Agriculture Branch Syed Plaza, 1st floor (Level-2), Multiplan Shahjalal City, 256, Hazi Ahsan Ullah Mansion, Main Road, Shahjalal Uposhohor, Sylhet. Thana Road, Fakirhat, Raozan, Chattogram. Tel: 0821-721882, 0821-721553, Mob: 01730-703439 Tel: 03026-56258, Mob: 01713-481710 Fax: 0821-711861

174. Ring Road Branch 185. Shantinagar Branch Shyamoli Cinema Complex (2nd Floor), plot 23/8C Green Peace, 41, Chamelibagh, Shantinagar, Dhaka-1217. Block- B, Mohammadpur Housing Estate, Tel: 48314482, 9337063, 58310436, 58311117, Mohammadpur, Dhaka. Mob: 01711-541792, 01730-726986 Tel: 9137158, 9129290, 8155256 Mob: 01730-024096, 01938-801607 186. Shariatpur Branch Talukder Plaza (1st & 2nd floor), Maddobazar, Shariatpur 175. Ruhitpur Branch Sadar, Shariatpur Khokon Tower (1st & 2nd floor), Ruhitpur Boarding Mob: 01810-025604 Market, Keraniganj, Dhaka. Tel: 7766772, 7766773, Mob: 01938-801657 187. Sherpur Branch Holding no- 29/30, 31 176. Saidpur Branch New Market Mor,Raghunath Bazar, Bismillah Market, 1st & 2nd floor, Shahid Dr. Zikrul Haque Sherpur-2100. Mobile- 01847-415229 Road, Saidpur. Nilphamari. Tel: 05526-73130-1, 05526-73133 188. Shewrapara Branch Mob: 01713-431337 Holding No-888/1 (1st floor), Shewrapara, Mirpur, Dhaka-1216 177. Satkhira Branch Mob: 01810-025609 Meherun Plaza, Boro Bazar Road, Satkhira. Tel: 0471-65799, 0471-65801 189. Shimrail Branch Mob: 01713-186891 Plot# 218, Haji Ibrahim Khalil Shopping Complex, 178. Satmasjid Road Branch Shimrail, Siddergonj, Narayanganj. House# 47, Road# 9/A, Dhanmondi R/A, Dhaka. Tel: 7691072, 7693465, Mob: 01713-047804 Tel: 8191144, 8191162, 8191750, Mob: 01713-481709, 01938-801632 190. Singair Branch Bahadur Mollah Super Market, (1st floor), Singair Bazar 179. Savar Bazar Branch Road (Shahid Rafiq Sharani), Amin Tower (2nd floor) 44-A, Savar Bazar Road, Singair, Manikganj. Savar, Dhaka-1340. Mob: 01938-801730 Tel: 7741522-23, Mob: 01713-141985 191. Sirajganj Branch 180. Savar Palli Bidyut Branch Apurupa Plaza, 199, S. S. Road, Ward# 03, .Hazi Nizam Plaza, 2nd Floor, Dendabar, Savar Sirajganj Sadar, Sirajganj. Cantonment, Ashulia, Savar,Dhaka. Tel: 0751-62711, 0751-62731-2 Mob: 01847-278105 Mob: 01938-801700

ANNUAL REPORT 2020 477 192. Sonagazi Branch 203. Tongi Branch Chakladar Market, 8, Thana Road, Razzak Plaza, 8/2, Anarkoli Roard, Tongi Bazar, Sonagazi, Feni. Tongi, Gazipur. Tel: 03325-76581-2, Mob: 01730-077786 Tel:9816801-03 Mob: 01730-317190 193. Sonargoan Branch Ambia Plaza, Mograpara Chowrasta, 204. Uttara Branch Sonargoan, Narayanganj. Plot# 07, Road# 07, Sector# 04, Uttara R/A, Tel: 7656339, 7656076, Mob: 01938-801679 Uttara, Dhaka. Tel: 58954739, 58954206 194. Sreemongal Branch Mob: 01711-593449, Fax: 58952004 Afzal Plaza, Moulvibazar Road, 205. Uttara Sonargaon Janopad Branch Sreemongal, Moulvibazar. House# 02, Sonargaon Janopad, Tel: 08626-72078-79 Sector# 11, Uttara, Dhaka. Mob: 01730-333632, Fax: 08626-72080 Tel: 8991718-9, 8991597, Mob: 01938-801619

195. Sreenagar Branch 206. Uttarkhan Branch Mokka Complex, 1st floor, Vagyakul Road Kazi Tower, Masterpara Bazar, Sreenagar, Munshiganj. Uttarkhan, Dhaka-1230. Mob: 01847-278110 Tel: 7914090, 7914091, Mob: 01938-801655

196. Sunamgonj Branch 207. Vatara Branch Joaher Raza Trade Center,Old Bus Stand, Major Iqbal Shahida Plaza, House# 4261, Ferazitola, Solmaid, Road, Sunamganj. Vatara, Bashundhara, Badda, Dhaka. Tel: 0871-61219, 0871-61262 Tel: 8432760-63, 8432767, Mob: 01938-801639, Fax: 0871-61263 Mob: 01938-801642

197. Sylhet Branch 208. Velanagar Branch 358, East Zinda Bazar, Sylhet-3100. Khadija Mension (1st & 2nd floor), Dhaka-Sylhet Tel: 0821-712637, 0821-712623, 0821-712653 Highway, Velanagar, Chinishpur, Narsingdi. Mob: 01711-923159 Mob: 01938-803286

198. Sylhet Gobindaganj SME / Agriculture Branch 209. Wari Branch Relation Tower, Gobindaganj Point, S.B.A.L. Sahadat Bilash, 25, Rankin Street, Wari, Dhaka. Gobindagonj Notun Bazar, Chhatak, Sunamgonj. Tel: 02-9589158, 9532086-7 Tel: 0871-31023, 0871-31024,Mob: 01713-481748 Mob: 01938-801678, Fax: 02-9573445

199. Sylhet Islampur Branch 210. Zirabo Branch Siddiquey Mansion (1st floor), Islampur, Sylhet Araf Super Market, (1st floor), Zirabo Bus Stand, Savar, Dhaka. Mob: 01810-025606 Mob: 01938-801719 200. Tangail Branch Tangail Tower, Main Road, Tangail Sadar, Tangail. Tel: 0921-51443, 0921-61307 Mob: 01730-703442, Fax: 0921-62643

201. Tejgaon Branch 315/B, Shaheed Tajuddin Sarani, Tejgaon I/A (1st floor), Nabisco Bus Stand , Dhaka. Tel: 9830045-7, Mob: 01938-801693, 01938-803282.

202. Thakurgaon Branch Talukder Plaza (1st Floor), 1306, Shahid mohammad Ali Road, Thakurgaon Sadar, Thakurgaon. Mob: 01938-801731 FORWARD LOOKING STATEMENTS

This annual report contains forward looking statements • Changes in local and international financial with respect to the financial condition, results of and capital markets, interest rates, forex rates, operations and business of the Bank and future plan and commodity prices; objectives of the Bank which are based on assumptions, • Changes in confidence of customers, consumers, estimates, believes and future expectations. Forward investors, depositors and borrowers; looking statements may include but not limited to future plan, performance, growth of business, profitability and • Changes in consumer behavior and technology; cash flow of the Bank which are subject to known and • Changes in local and international legal and unknown risks, as a result, actual performance or results regulatory framework; may be adverse or materially differ from original plan, • Changes in market structure and competitive assumptions, estimate or expectations expressed or condition; implied in forward looking statements with words such as “believes” “estimates” “respect” “should” “will” “likely” • Unforeseen natural disasters; and “result” “forecast” “outlook” “project” “way” or “similar • Any other unforeseen changes in economy, market, repressions”. Therefore, undue reliance should not be society and the globe. placed on such forward looking statements for making any decisions, transactions or investments with the Bank. The Bank does not guarantee in any way that the Actual results may materially differ from those implied or expressions made or implied in forward looking expressed in forward looking statements for a number of statements would be materialized. The Bank does not also factors which may include but not limited to the following: take any responsibility to update, modify or revise any forward looking statement contained in this annual report • Changes in local and international political, economic, business and financial conditions irrespective of whether those are changed by any new including changes in fiscal, monetary and trade events, information or future development or by any other policies; factors.

ANNUAL REPORT 2020 479 LIST OF ABBREVIATIONS

ADB Asian Development Bank HR Human Resources ADP Annual Development Program HTM Held to Maturity ALCO Asset-Liability Management Committee IAS International Accounting Standards ATA Anti- Terrorism Act IBP Inland Bills Purchased ATM Automated Teller Machine ICAB The Institute of Chartered Accountants of Bangladesh BACPS Bangladesh Automated Cheque Processing System IC&CD Internal Control & Compliance Division BAS Bangladesh Accounting Standards ICC Internal Control & Compliance Risk BB Bangladesh Bank ICRR Internal Credit Risk Rating BBTA Bangladesh Bank Training Academy ICB Investment Corporation of Bangladesh BDT Bangladesh Taka ICMAB The Institute of Cost & Management Accountants of Bangladesh BEFTN Bangladesh Electronic Fund Transfer Network ICT Information & Communication Technology BFIU Bangladesh Financial Intelligence Unit IDA International Development Agency BFRS Bangladesh Financial Reporting Standards IFRS International Financial Reporting Standards BIBM Bangladesh Institute of Bank Management IMF International Monetary Fund BRPD Banking Regulation and Policy Department IPFF Investment Promotion and Financing Facility BSA Bangladesh Standards on Auditing IPO Initial Public Offering BSEC Bangladesh Securities and Exchange Commission IT Information Technology BSP Bangladesh Sanchaya Patra L/C Letter of Credit CAMLCO Chief Anti Money Laundering Compliance Officer LIBOR London Inter-Bank Offering Rates CAMELS Capital Adequacy, Asset Quality LIC Low Income Country Management, Earnings, Liquidity and MBS Mobile Banking Services Sensitivity to Market Risk MCR Minimum Capital Requirement CD Current Deposits MICR Magnetic Ink Character Recognition CDS Central Depository System MLPA Money Laundering Prevention Act CEO Chief Executive Officer MTMF Medium Term Macroeconomic Framework CFO Chief Financial Officer MVA Market Value Added CIB Credit Information Bureau NAV Net Asset Value CRO Chief Risk Officer NPL Non-Performing Loan CNG Compressed Natural Gas OBU Off-Shore Banking Unit CPI Consumer Price Index PEP Politically Exposed Persons CRAR Capital to Risk-weighted Assets Ratio POS Point of Sales CRAB Credit Rating Agency of Bangladesh Limited PRSP Poverty Reduction Strategy Paper CRISL Credit Rating Information and Services Limited PSP Pratirakha Sanchaya Patra CRR Cash Reserve Requirement KYC Know Your Customer CSE Chittagong Stock Exchange Limited RBCA Risk Based Capital Adequacy CSR Corporate Social Responsibility REPO Repurchase Agreement CTR Cash Transaction Report RBIA Risk Based Internal Audit DBBL Dutch-Bangla Bank Limited RMG Readymade Garments DBBF Dutch-Bangla Bank Foundation RMU Risk Management Unit DEG German Investment and Development Company RMP Risk Management Paper DOS Department of Off-site Supervision RMD Risk Management Division ROA Return on Asset DRS Disaster Recovery Site ROE Return on Equity DSE Dhaka Stock Exchange Limited ROI Return on Investment ECAI External Credit Assessment Institution RPGCL Rupantarita Prakritik Gas Company Limited ECB European Central Bank RWA Risk Weighted Assets ECRL Emerging Credit Rating Limited SCB State-owned Commercial Bank EDF Export Development Fund SLR Statutory Liquidity Ratio EFT Electronic Fund Transfer SMA Special Mention Account EGBMP Enterprise Growth and Bank Modernization Programme SOE State Owned Enterprise EMI Equal Monthly Installment SMS Short Message Service EMV EuroPay, MasterCard and VISA SME Small and Medium Enterprise EPS Earnings Per Share SND Special Notice Deposit EPZ Export Processing Zone SRP Supervisory Review Process ETP Effluent Treatment Plant SREP Supervisory Review Evaluation Process EU European Union STR Suspicious Transaction Report EVA Economic Value Added TOR Terms of Reference FCB Foreign Commercial Bank UAE United Arab Emirates FDI Foreign Direct Investment USA United States of America FY Financial Year (July-June) UCP Uniform Customs and Practice FMO Netherlands Development Finance Company US $, USD US Dollar FT First Track VAT Value Added Tax GDP Gross Domestic Product WEO World Economic Outlook GFSR Global Financial Stability Report WTO World Trade Organization GOB Government of Bangladesh WEF Women Entrepreneur Fund HFT Held for Trading WDV Written Down Value Dutch-Bangla Bank Limited Registered Office 47, Motijheel Commercial Area, Dhaka-1000, Bangladesh PROXY FORM

I/We ______of ______being a Member of Dutch-Bangla Bank Limited do hereby appoint Mr./Ms. ______of ______or (failing him/her) Mr./Ms. ______of ______as my/our proxy, to participate and vote on my/our behalf at the 25th Annual General Meeting (AGM) of the Company to be held on Monday, April 26, 2021 at 10.00 AM (Dhaka time) at Virtually by using digital platform through the following link http://tinyurl.com/dbblagm2021 and at any adjournment thereof or at any ballot to be taken in consequence thereof.

Signed this ______day of April 2021

______Signature of Member

Revenue Folio / BOID No. : ______Stamp Tk. 20.00 Signature of Proxy No. of Shares : ______

N.B.:

(1) This form of Proxy duly completed and must be sent through e-mail to the Company’s Registered Office at share@ dutchbanglabank.com at least 72 hours before the AGM. Proxy is invalid if not signed and stamped as indicated above. (2) Signature of the Member shall agree with the specimen signature registered with the Company.

ANNUAL REPORT 2020 481

Frequently Asked Questions (FAQs) on Virtual Annual General Meeting

1. Why is this Annual General Meeting (AGM) only virtual?

Pursuant to the Bangladesh Securities and Exchange Commission’s Order No. BSEC/CMRRCD/2009-193/12 dated 23 March 2021, a listed company can arrange virtual shareholder meeting, which can be conducted via live webcast by using digital platform. Accordingly, in the light of prevailing COVID-19 situation in bangladesh, considering the health and safety of all the shareholders, staff and others who plan to attend the AGM 2021. Dutch-Bangla Bank (DBBL) plans to conduct its 25th AGM 2021 virtually by using digital platform.

2. How can I participate in the AGM?

You are eligible to participate in the AGM 2021, if you were a shareholder of DBBL as on the “Record Date” i.e. March 28, 2021. You will be able to participate in the AGM online from your laptop, smartphone, tablet and desktop. For logging in to the system, you need to input your 16-digit BO ID number / Folio number and other credentials as a proof of your identity by visiting the link http://tinyurl.com/dbblagm2021

3. How can I submit questions/comments prior to and during the meeting?

You can submit your questions / comments in writing or through voice recording 24 (twenty four) hours before commencement of the AGM and during the AGM, by visiting the link http://tinyurl.com/dbblagm2021.

4. How can I send comments/Queries through video/audio recording?

You may send your comments / queries through voice recording (video/ audio) via email to [email protected] on or by 4 P.M., April 21, 2021. The maximum length of the video / audio recording be 02 (two) minutes.

5. Who is entitled to vote and how many shares can I vote?

Each holder of shares of DBBL as on the “Record Date” i.e. March 28, 2021 is entitled to cast one vote per share on each Agenda item at the AGM. You are entitled to vote all shares owned by you as on the “Record Date”.

6. How can I vote my shares in the AGM?

You can vote electronically prior to and during the AGM by visiting the link http://tinyurl.com/dbblagm2021. You may vote in “FAVOUR” or “AGAINST” with respect to each agenda item.

7. What is the deadline for voting my shares?

Your vote must be received before the polls close for each agenda items during the AGM.

8. What is the voting requirement to approve each of the Agenda?

Each agenda will be passed by the vote of majority of votes cast. Each agenda receiving more votes in “FAVOUR” than votes “AGAINST” will be passed.

9. What If I have technical difficulties or trouble accessing the virtual meeting?

If you encounter any difficulties accessing the virtual meeting through the link http://tinyurl.com/dbblagm2021 prior to or during the AGM, please call +880 9666322050 ( EXT. 750999 ), +880 9612322050 ( Ext. 750999 ) for support.

ANNUAL REPORT 2020 483